BioSafe International, Inc.
September 9, 1997
Via EDGAR
Filing Desk
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: BioSafe International, Inc.
Preliminary Proxy Materials
Ladies and Gentlemen:
In connection with the Company's Special Meeting of Stockholders in
Lieu of Annual Meeting ("Special Meeting") scheduled for October 24, 1997,
please find enclosed for filing the documents listed below:
1. Notice of Special Meeting and accompanying Proxy
Statement for BioSafe International, Inc.
("Company");
2. Exhibit A to the Proxy Statement: Agreement and Plan
of Merger;
3. Exhibit B to the Proxy Statement: Bylaws of Waste
Systems International, Inc. ("Waste Systems");
4. Exhibit C to the Proxy Statement: Amended and
Restated Certificate of Incorporation of Waste
Systems;
5. Exhibit D to the Proxy Statement: Nevada Revised
Statutes regarding dissenters' rights;
6. Proxy card for common stockholders;
7. Proxy card for preferred stockholders;
The Company intends to file a Registration Statement on Form S-8 as
soon as possible following stockholder approval at the Special Meeting to
register the additional shares which the Company intends to authorize under its
Amended and Restated 1995 Stock Option and Incentive Plan. If you have any
questions or require any additional information, please contact the undersigned
at (617) 497-4500.
Sincerely,
Robert Rivkin
Secretary
<PAGE>
BioSafe International, Inc.
10 Fawcett Street
Cambridge, Massachusetts 02138
---------------
NOTICE OF SPECIAL MEETING IN LIEU OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, OCTOBER 24, 1997
---------------
NOTICE IS HEREBY GIVEN that a Special Meeting in lieu of the 1997 Annual
Meeting of Stockholders (the "Annual Meeting") of BioSafe International, Inc.
("BioSafe" or the "Company") will be held on Friday, October 24, 1997 at 10:00
a.m. at the offices of oodwin, Procter & Hoar LLP, 53 State Street, Boston, MA
02109, for the following purposes:
1. To elect the directors of the Company;
2. To act upon a proposal to approve the change of the Company's state
of incorporation from Nevada to Delaware, through a merger of the Company into a
wholly-owned subsidiary, and all effects thereof, including (a) the conversion
of the outstanding Company securities into corresponding securities of the
surviving corporation, (b) certain amendments to the Corporation's Articles of
Incorporation and By-laws as described in the accompanying Proxy Statement and
(c) an increase in the Company's authorized common stock, $.001 par value per
share (the "Common Stock"), from 100,000,000 shares to 150,000,000 shares;
3. To act upon a proposal to approve an amendment to the Company's 1995
Stock Option and Incentive Plan, as amended, to increase the number of shares of
the Company's Common Stock reserved for issuance thereunder from 1,500,000
shares to 8,500,000 shares;
4. To act upon a proposal to approve an amendment to the Company's 1995
Stock Option Plan for Non-Employee Directors to provide for the grant to each
newly-elected non-employee director of an option to purchase 20,000 shares of
the Company's Common Stock upon such election;
5. To act upon a proposal to ratify the Board of Directors'
selection of KPMG Peat Marwick LLP as the Company's independent auditors for the
current fiscal year; and
6. To consider and act upon any other matters that may properly
be brought before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting
on the date specified above, or on any date or dates to which, by original or
later adjournment, the Annual Meeting may be adjourned, or to which the Annual
Meeting may be postponed.
<PAGE>
The Board of Directors has fixed the close of business on September 10,
1997 as the record date for determining the stockholders entitled to notice of
and to vote at the Annual Meeting and at any adjournments or postponements
thereof. Only stockholders of record of the Company's Common Stock and Series A
Preferred Stock at the close of business on that date will be entitled to notice
of and to vote at the Annual Meeting and at any adjournments or postponements
thereof.
You are requested to fill in and sign the enclosed Proxy Card, which is
being solicited by the Board of Directors, and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.
By Order of the Board of Directors
Robert Rivkin
Secretary
Cambridge, MA
September 19, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
2
<PAGE>
BioSafe International, Inc.
10 Fawcett Street
Cambridge, Massachusetts 02138
---------------
PROXY STATEMENT
---------------
FOR 1997 SPECIAL MEETING IN LIEU OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Friday, October 24, 1997
September 19, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of BioSafe International, Inc. ("BioSafe"
or the "Company") for use at the 1997 Special Meeting in Lieu of Annual Meeting
of Stockholders of the Company to be held on Friday, October 24, 1997, and at
any adjournments or postponements thereof (the "Annual Meeting"). At the Annual
Meeting, stockholders will be asked to vote on five proposals. The first action
that the stockholders will take will be to elect directors to the Company's
Board of Directors. The second proposal that the stockholders will consider is a
proposal to change the state of the Company's incorporation from Nevada to
Delaware. The reincorporation will be effected by a merger (the "Merger") of the
Company into a wholly owned subsidiary (the "Delaware Company"). Upon
consummation of the Merger, each outstanding Company security shall be converted
into a corresponding security of the surviving corporation and the surviving
corporation shall adopt the Delaware Company's Certificate of Incorporation (the
"Delaware Certificate") and Bylaws (the "Delaware Bylaws," together with the
Delaware Certificate, the "Delaware Charter Documents"). In connection with the
Merger, the Articles of Incorporation and By-laws of the Company will be subject
to certain changes as set forth in the Delaware Charter Documents. Throughout
this Proxy Statement, the term "Merger" shall refer the merger of the Company
into the Delaware Company and all effects thereof. The third proposal that the
stockholders will consider is a proposal to approve an amendment to the
Company's 1995 Stock Option and Incentive Plan (the "Plan"), to increase the
number of shares of the Company's common stock, $.001 par value per share (the
"Common Stock"), reserved for issuance thereunder from 1,500,000 shares to
8,500,000 shares. The fourth proposal is a proposal to amend the Company's 1995
Stock Option Plan for Non-Employee Directors (the "Director Plan") to provide
for the grant to each newly elected director of an option to purchase 20,000
shares of the Company's Common Stock upon such election. The final proposal is a
proposal to ratify the Board of Directors' selection of KPMG Peat Marwick LLP as
the Company's independent auditors for the current fiscal year. The stockholders
will also act upon any other matters properly brought before them.
References in this Proxy Statement to exhibits shall refer to the
particular exhibits attached to this Proxy Statement. The use in this Proxy
Statement of the masculine pronoun shall be deemed to include the feminine or
neuter, as the context may require.
This Proxy Statement and the accompanying Notice and Proxy Card are
first being sent to stockholders on or about September 19, 1997. The Board of
Directors has fixed the close of business on September 10, 1997 as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting (the "Record Date"). Only stockholders of record of the
Company's Common Stock and Series A Preferred Stock, $.001 par value per share
(the "Preferred Stock"), at the close of business on the Record Date will be
entitled to notice of and to vote at the Annual Meeting. Holders of the
<PAGE>
Company's Common Stock entitled to vote will be entitled to one vote for each
share of Common Stock that they hold. Holders of the Company's Preferred Stock
entitled to vote shall be entitled to the number of votes equal to the number of
shares of Common Stock into which their Preferred Stock is convertible. As of
the Record Date, the total number of common share equivalents eligible to
vote at the Annual Meeting was 52,286,542, consisting of 18,195,904 shares
of Common Stock and 95,880 shares of Preferred Stock convertible into an
aggregate of 34,090,638 shares of Common Stock.
The presence, in person or by proxy, of holders of at least one-third
of the total voting power represented by outstanding shares of Common Stock and
Preferred Stock entitled to vote is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. The affirmative vote of the
holders of a majority of the outstanding voting power of the Company is required
to approve the Merger. The affirmative vote of the holders of a majority of the
votes cast with a quorum present at the Annual Meeting is required for the
election of directors, the amendment to the Plan, the amendment to the Director
Plan, the ratification of the Company's auditors and the approval of other
matters properly presented at the Annual Meeting for stockholder approval.
Abstentions constitute a vote "against" a matter in determining the "votes cast"
for purposes of electing directors, amending the Plan, amending the Director
Plan and ratifying the Company's auditors. Broker "non-votes," or proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owners or other persons entitled to vote such shares on a
particular matter with respect to which the broker or nominee does not have
discretionary voting power, will be treated in the same manner as abstentions
with respect to the election of directors and the ratification of auditors, but
will be disregarded with respect to other matters. Both abstentions and broker
non-votes will be counted in determining the presence of a quorum at the Special
Meeting.
Stockholders of the Company are requested to complete, sign, date and
promptly return the accompanying Proxy Card in the enclosed postage-prepaid
envelope. Shares represented by a properly executed proxy received prior to the
vote at the Annual Meeting and not revoked will be voted at the Annual Meeting
as directed on the Proxy Card. If a properly executed Proxy Card is submitted
and no instructions are given, the shares of Common Stock represented by that
proxy will be voted FOR the election of the seven nominees for directors of the
Company named in this Proxy Statement, FOR the Merger, FOR approval of the
amendment to the 1995 Stock Option and Incentive Plan, FOR approval of the
amendment to the 1995 Stock Option Plan for Non-Employee Directors, and FOR
ratification of the Board of Directors' selection of KPMG Peat Marwick LLP as
the Company's independent auditors for the current fiscal year. It is not
anticipated that any matters other than those set forth in this Proxy Statement
will be presented at the Annual Meeting. If other matters are presented, proxies
will be voted in accordance with the discretion of the proxy holders.
A stockholder of record may revoke a proxy at any time before it has
been exercised by filing a written revocation with the Secretary of the Company
at the address of the Company set forth above, by filing a duly executed proxy
bearing a later date, or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the Record Date attending the
Annual Meeting may vote in person whether or not a proxy has been previously
given, but the presence (without further action) of a stockholder at the Annual
Meeting will not constitute revocation of a previously given proxy.
The Company's Annual Report on Form 10-K, including financial
statements for the fiscal year ended December 31, 1996, is being mailed to
stockholders concurrently with this Proxy Statement. The Annual Report on Form
10-K, however, is not part of the proxy solicitation material.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors has nominated seven individuals to serve as
directors of the Company (the "Nominees"), including four Nominees to be elected
by the holders of the Company's outstanding Preferred Stock and three Nominees
to be elected by all the stockholders. All of the Nominees are currently serving
as directors of the Company. The Board of Directors anticipates that each of the
Nominees will serve, if elected, as a director. However, if any of the Nominees
is unable to accept election, the proxies will be voted for the election of such
other person or persons as the Board of Directors may recommend.
The Board of Directors recommends a vote FOR the Nominees.
Information Regarding Nominees and Executive Officers
The following table and biographical descriptions set forth certain
information as of September 22, 1997, unless otherwise specified, with respect
to the seven Nominees, including all of the executive officers of the Company,
based on information furnished to the Company by each director and officer.
Directors
---------
Amount and Nature of
Director Beneficial Ownership Percent
Name Age Since of Common Stock of Class
- ---- --- -------- -------------------- --------
General Nominees
Jay Matulich 43 1995 34,500(1) *
Philip W. Strauss 48 1996 338,889(2) *
Robert Rivkin 38 1997 339,764(3) *
Nominees for election by Preferred Stock
David J. Breazzano 41 1997 0(4) *
Charles Johnston 62 1997 20,000(5) *
Judy K. Mencher 40 1997 0(4) *
William B. Philipbar 71 1997 20,000(6) *
- --------------
* Less than one percent.
(1) Includes 32,000 shares of Common Stock currently owned and 2,500 shares
subject to stock options which are fully vested and currently
exercisable.
(2) Includes 250 shares of Preferred Stock convertible into 88,889 shares of
Common Stock and 250,000 shares subject to stock options which are fully
vested and currently exercisable.
(3) Includes 875 shares of Common Stock currently owned, 250 shares of
Preferred Stock convertible into 88,889 shares of Common Stock and
250,000 shares subject to stock options which are fully vested and
currently exercisable.
(4) Excludes those shares owned by B III Capital Partners, L.P. ("B III"),
which Ms. Mencher and Mr. Brezzano may be deemed to beneficially own as a
result of Ms. Mencher's and Mr. Brezzano's interest in DDJ Capital
Management, LLC ("DDJ"), which is the investment manager to B III and an
affiliate to the general partner of B III. Both Ms. Mencher and Mr.
Brezzano are managing members of DDJ.
3
<PAGE>
(5) Includes 20,000 shares subject to stock options which are fully vested
and currently exercisable.
(6) Includes 20,000 shares subject to stock options which are fully vested
and currently exercisable.
The Board of Directors has nominated seven individuals to serve as
Directors of the Company for the coming year, including four who are to be
elected by class vote of the Preferred Stock.
Jay J. Matulich. Mr. Matulich is a Managing Director of International
Capital Growth Limited ("ICG"), formerly Capital Growth International L.L.C. and
U.S. Sachem Financial Consultants, L.P. From May 1990 to October 1994, Mr.
Matulich was a Vice President of Gruntal & Co., Incorporated, investment
bankers. Mr. Matulich was elected to the Board of Directors in March 1995
pursuant to an agreement between the Company and Capital Growth, in connection
with Capital Growth's role as placement agent for certain securities of the
Company. That agreement, which expires in March 1998, requires Mr. Matulich
be nominated for election to at least three one-year terms.
Philip W. Strauss. Mr. Strauss has been the Chief Executive Officer
and President since March 27, 1996 and Chairman of the Board since
June 24, 1996. Previously Mr. Strauss had been Executive Vice President and
Chief Operating Officer of the Company since September 19, 1995. He has 24 year
of experience in project, business and corporate development. Mr. Strauss was
co-founder of BioMedical Waste Systems, Inc., a publicly-held waste management
firm, where he served as Executive Vice President from its inception in 1987
until May 1992 and as a Director from inception until May 1993.
Robert Rivkin. Mr. Rivkin, a Certified Public Accountant, has been Vice
President of BioSafe since July 1994, Chief Financial Officer since March 1995,
Secretary since May 1995 and Treasurer since June 1996. Prior to joining
BioSafe, Mr. Rivkin was a principal at The Envirovision Group Inc., a full
service environmental engineering, consulting and contracting company, where he
was responsible for finance, marketing and strategic planning. Previously, Mr.
Rivkin practiced public accounting in New York, where he specialized in mergers
and acquisitions, initial public offerings and SEC reporting.
David J. Breazzano. Mr. Breazzano is one of the three principals at
DDJ Capital Management, LLC, which was established in 1996. He has over 17
years of investment experience and served as a Vice President and Portfolio
Manager at Fidelity Investments ("Fidelity") from 1990 to 1996. Prior to
joining Fidelity, Mr. Breazzano was President and Chief Investment Officer of
the T. Rowe Price Recovery Fund.
Charles Johnston. Mr. Johnston serves as Chairman of Ventex Technology
in Riviera Beach, Florida, AFD Technologies in Jupiter, Florida, and ISI
Systems, a subsidiary of Teleglobe Corp. in Montreal, Quebec. In 1969, Mr.
Johnston founded ISI Systems, which pioneered insurance industry software.
Mr. Johnston also serves as a Trustee of Worcester Polytechnic Institute in
Worcester, Massachusetts, and as a Director of Spectrum Signal Processing in
Vancouver, British Columbia, and Kideo Productions and Infosafe Systems, both
in New York City.
Judy K. Mencher. Ms. Mencher is one of the three principals at DDJ
Capital Management, LLC, which was established in 1996. From 1990 to 1996, Ms.
Mencher was at Fidelity working in the Distressed Investing Group. Prior to
joining Fidelity in 1990, Ms. Mencher was a Partner at the law firm of Goodwin,
Procter & Hoar LLP specializing in bankruptcy and creditors' rights.
William B. Philipbar. Mr. Philipbar was first elected a Director of
the Company on May 8, 1996. He resigned as a Director of the Company on
June 24, 1997 and was reelected to the Board on August 20, 1997. He is
currently a Director of Matlack Systems, Inc., Rollins Truck Leasing Corp.
and Rollins Environmental Services, Inc. Until 1995 he was also a Director of
Charles River Ventures, a company that he continues to serve as an advisor.
4
<PAGE>
Senior Executive Officers Who Are Not Directors
Joseph E. Motzkin. Mr. Motzkin has been a Vice President of BioSafe
since August 1996. Prior to joining BioSafe, he was a Manager at Laidlaw Waste
Systems and Prins Recycling Corporation, where he operated landfills,
established recycling programs, and directed sales programs and customer service
activities. Mr. Motzkin has 26 years in the solid waste management business.
The Board of Directors and Its Committees
Board of Directors
The Company is currently managed by a seven-member Board of Directors,
a majority of whom are independent of the Company's management. Each director
will hold office for the term to which he or she is elected and until his or her
successor is duly elected and qualified.
Pursuant to the Certificate of Designations, Preferences and Rights
adopted June 25, 1997 with respect to the Company's Preferred Stock, the holders
of the Preferred Stock are entitled to elect four members of the Board, two of
whom shall be elected by B-III Capital Partners, L.P. ("B III"), subject to
certain maintenance of ownership requirements.
Prior to June 24, 1997, the Board was comprised of six members, four of
whom resigned on that date. On June 30, 1997, the Board elected Robert Rivkin,
Vice President and Chief Financial Officer of the Company, to one of the
vacancies on the Board. At the same meeting, pursuant to an agreement with
certain purchasers of the Company's Preferred Stock, the Board elected Bart
Grenier, David J. Breazzano and Charles Johnston to serve as directors.
The Board of Directors held 10 meetings during fiscal year 1996 and
seven meetings through June 30, 1997. Each of the Company's directors attended
at least 75% of the total number of meetings of the Board of Directors and of
the committees of the Company of which he was a member.
The Board of Directors has appointed an Audit Committee and a
Compensation Committee.
Compensation Committee. The Compensation Committee currently consists
of Messrs. Johnston and Strauss and Ms. Mencher. Prior to June 24, 1997, the
Compensation Committee consisted of Messrs. Matulich, Barry Simmons and Bill
Taylor. The Compensation Committee makes recommendations and exercises all
powers of the Board of Directors in connection with certain compensation
matters, including incentive compensation and benefit plans. The Compensation
Committee (excluding Mr. Strauss) administers, and has authority to grant awards
under, the Plan to the employee directors and management of the Company and its
subsidiaries and other key employees. The Compensation Committee met one time
in 1996 and on July 3, 1997.
Audit Committee. The Audit Committee currently consists of Messrs.
Breazzano, Matulich and Philipbar. Prior to June 24, 1997, the Audit Committee
consisted of Messrs. Matulich, Philipbar and Daniel Shannon. The Audit Committee
is empowered to recommend to the Board the appointment of the Company's
independent public accountants and to periodically meet with such accountants to
discuss their fees, audit and non-audit services, and the internal controls and
audit results for the Company. The Audit Committee also is empowered to meet
with the Company's accounting personnel to review accounting policies and
reports. The Audit Committee met one time during 1996.
5
<PAGE>
Director Compensation
The Company does not currently pay cash compensation to its directors.
Non-employee directors are entitled to stock option grants under the Director
Plan. See "Proposal 4 -- Approval of Amendment to 1995 Stock Option Plan for
Non-Employee Directors."
Executive Compensation
Summary Compensation Table. The following table sets forth the
aggregate cash compensation paid by the Company with respect to the fiscal years
ended December 31, 1996, 1995 and 1994 to the Company's Chief Executive Officer
and the one other senior executive officer in office on December 31, 1996 who
earned at least $100,000 in cash compensation during 1996 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Awards
Annual ------------
Compensation Shares
------------ Underlying
Salary Options
Name and Principal Position Year ($) (#)
- --------------------------- ---- ----------- ------------
Philip Strauss(1) 1996 150,000 250,000(2)
Chairman of the Board,
President and Chief 1995 43,750 200,000
Executive Officer 1994
Robert Rivkin 1996 150,000 206,250
Vice President, Chief Financial 1995 150,000 0
Officer, Secretary and Treasurer 1994 75,000 43,750
Richard H. Rosen (3) 1996 45,000 0
Chief Executive Officer, President 1995 180,000 0
and Treasurer 1994 180,000 175,000
- -----------------
(1) Mr. Strauss has been the Chief Executive Officer and President since
March 27, 1996 and Chairman of the Board since June 24,1996.
Previously Mr. Strauss had been Executive Vice President and Chief
Operating Officer since September 19, 1995.
(2) Includes the options to acquire 200,000 shares of Common Stock granted
in 1995 and repriced in 1996.
(3) Dr. Richard H. Rosen resigned from all offices and positions with the
Company on March 27, 1996.
6
<PAGE>
Option Grants in Fiscal Year 1996. The following table sets forth the
options granted during fiscal year 1996 and the value of the options held on
December 31, 1996 by the Company's named executive officers.
OPTION GRANTS IN FISCAL YEAR 1996
---------------------------------
Percent of
Number of Total Options Grant
Shares Granted to Exercise or Date
Underlying Employees in Base Price Expiration Present
Name Options Granted Fiscal Year ($ /share) Date Value $(1)
- -------------- --------------- ------------- ----------- ---------- ---------
Philip Strauss 250,000 34% $2.25 2006 $204,250
Robert Rivkin 206,250 28% $2.25 2006 $168,506
(1) The grant date present value was determined using the Black Scholes
option pricing model with the following weighted average assumptions:
volatility, 30%; expected dividend yield, 0%; risk free interest rate,
5.3% and expected life, 5 years.
Option Exercises and Year-End Holdings. The following table sets forth
the options exercised during fiscal year 1996 and the value of the options held
on December 31, 1996 by the Company's Named Executive Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
AND FISCAL YEAR-END 1996 OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options Options
Shares at Fiscal at Fiscal
Acquired On Value Year-End (#) Year-End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- --------------------------------------------- ------------- -------------
Philip Strauss 0 0 250,000/0 0
Robert Rivkin 0 0 250,000/0 0
Richard H. Rosen 0 0 0 0
7
<PAGE>
Option Repricings. The following table sets forth the options repriced
during fiscal year 1996.
10-YEAR OPTION REPRICING
------------------------
During 1996, the Company lowered the exercise price of options granted
to all Company employees, including the Named Executives, in lieu of raising
salaries. The revised exercise price was $2.25.
Submitted by the Compensation Committee:
Jay Matulich
Barry Simmons
B.G. Taylor
Length
of Original
Number of Market Option
Securities Price of Exercise Term
Underlying Stock at Price at New Remaining
Options Time of Time of Exercise at Date of
Repriced Repricing Repricing Price Repricing
Name Date (#) ($) ($) ($ )
- -------------- ------- ----------- --------- ---------- --------- ----------
Philip Strauss 6/28/96 200,000 $2.25 $5.44 $2.25 9 years
Employment Agreements. On June 30, 1997, the Company and Mr. Strauss
entered into an employment agreement. The terms of the agreement provide (i)
that Mr. Strauss shall serve as the Company's President and Chief Executive
Officer, (ii) that he receive a salary of $175,000 per year and (iii) that he
agree not to compete with the Company following termination of his employment
for a period of one year following the termination. In the event that Mr.
Strauss is terminated for cause, he shall not be bound to the non-competition
provisions. The Company's agreement with Mr. Strauss is effective until June 30,
1999 and, absent ninety-day notice from other party to the contrary, shall be
extended automatically for subsequent one-year terms upon the expiration of the
agreement. The Company's agreement with Mr. Strauss may be terminated at any
time by the mutual consent of the parties.
On June 30, 1997, the Company and Mr. Rivkin entered into an employment
agreement. The terms of the agreement provide (i) that Mr. Rivkin shall serve as
the Company's Vice President, Chief Financial Officer, Secretary and Treasurer,
(ii) that he receive a salary of $175,000 per year and (iii) that he agree not
to compete with the Company following termination of his employment for a period
of one year following the termination. In the event that Mr. Rivkin is
terminated for cause, he shall not be bound to the non-competition provisions.
The Company's agreement with Mr. Rivkin is effective until June 30, 1999 and,
absent ninety-day notice from other party to the contrary, shall be extended
automatically for subsequent one-year terms upon the expiration of the
agreement. The Company's agreement with Mr. Rivkin may be terminated at any time
by the mutual consent of the parties.
8
<PAGE>
Stock Performance Graph
The Securities and Exchange Commission requires the Company to present
a chart comparing the cumulative total shareholder return on its Common Stock
with the cumulative total shareholder return of (i) a broad equity market index
and (ii) a published industry index or peer group. Although such a chart would
normally be for a five-year period, the Common Stock has been listed on the
Nasdaq SmallCap Market only since November 14, 1995 and, as a result, the
following chart reflects only the period during which the Common Stock has been
listed on that market. The chart compares the Common Stock with (i) the Center
for Research in Security Prices Nasdaq Market Value Index (the "Nasdaq Index")
and (ii) the Center for Research in Security Prices Waste Management Industry
Index (the "Waste Management Index"). The total return for each of the Common
Stock, the Nasdaq Index and the Waste Management Index assumes the reinvestment
of dividends, although dividends have not been declared on the Company's Common
Stock. This chart assumes an initial investment of approximately $100 on
November 14, 1995 in the stocks comprising the Nasdaq Index and the stocks
comprising the Waste Management Index and an initial investment of $92 in the
Company's Common Stock. The Nasdaq Index tracks the aggregate price performance
of all domestic equity securities traded on the Nasdaq Market.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Date BSFE Nasdaq Industry Group
- -------- -------- ----------- -------------
11/30/95 92 101.802 101.463
12/01/95 89.333 101.26 107.864
01/31/96 80 101.761 108.918
02/29/96 72 105.639 107.162
03/29/96 64 105.99 113.085
04/30/96 60 114.785 115.776
05/31/96 74.667 120.055 130.935
06/28/96 48 114.642 133.349
07/31/96 38.667 104.431 116.258
08/30/96 29.33 110.282 124.823
09/30/96 30.667 118.72 136.75
10/31/96 26.667 117.407 137.791
11/29/96 20.667 124.67 142.706
12/31/96 14 124.542 138.488
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<PAGE>
Report of the Compensation Committee
The Compensation Committee's executive compensation philosophy is to
establish competitive levels of compensation, link management's pay to the
achievement of the Company's performance goals, and enable the Company to
attract and retain qualified management. The Company's compensation policies
seek to align the financial interests of senior management of the Company with
those of the stockholders.
Base Salary. The Company has established base salary levels for senior
management based on a number of factors, including market salaries for such
positions, the responsibilities of the position, the experience, and the
required knowledge of the individual. The Compensation Committee attempts to fix
base salaries on a basis generally in line with base salary levels for
comparable companies.
Incentive Compensation. During each fiscal year the non-employee
directors who are members of the Compensation Committee may consider granting
senior executives of the Company awards under the Plan. Such awards are based on
various factors, including both corporate and individual performance during the
preceding year and incentives to reach certain goals during future years.
Submitted by the Compensation Committee:
Jay Matulich
Barry Simmons
B.G. Taylor
Compensation Committee Interlocks and Insider Participation
B.G. Taylor, Jay Matulich and Dr. Simmons served on the Compensation
Committee in 1996. No member of the Compensation Committee in 1996 ever served
as an officer of the Company.
Principal Stockholders
The following table presents information as to all directors and senior
executive officers of the Company as of June 30, 1997 and persons or entities
known to the Company to be beneficial owners of more than 5% of the Company's
Common Stock as of June 30, 1997, unless otherwise indicated, based on
representations of officers and directors of the Company and filings received by
the Company on Schedules 13D and 13G or Form 13F under the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
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Beneficial Ownership
--------------------
Directors, Executive Officers Shares of Common Stock Percent
and 5% Stockholders(1) Beneficially Owned of Class
- -------------------------------- -------------------------- ------------
B-III Capital Partners, L.P.(2) 17,777,778 34.00%
c/o DDJ Capital Management, LLC
141 Linden Street
Wellesley, MA 02181
David J. Breazzano(3) 0 *
Richard Brothers(4) 3,022,222 5.78%
P.O. Box 269
Waitsfield, VT 05673
Charles Johnston(5) 20,000 *
Jay Matulich(6) 34,500 *
Judy K. Mencher(3) 0 *
Joseph Motzkin(7) 104,514 *
William B. Philipbar(8) 20,000 *
Robert Rivkin (9) 339,764 *
Philip W. Strauss(10) 338,889 *
All directors and officers as a 2,635,445 5.04%
group (8 persons)
- -------------------------
* less than 1%
(1) The persons named in the table have sole voting and investing power
with respect to all shares shown as beneficially owned by them subject
to community property laws where applicable and the information
contained in footnotes to this table.
(2) B-III Capital Partners, L.P. ("B III")owns 50,000 shares of Preferred
Stock that are convertible into 17,777,778 shares of Common Stock.
DDJ Capital Management, LLC ("DDJ") serves as the investment manager
to B III; an affiliate of DDJ acts as the general partner of B III.
(3) Excludes those shares owned by B III, which Ms. Mencher and Mr.
Brezzano may be deemed to beneficially own as a result of Ms. Mencher's
and Mr. Brezzano's interest in DDJ. Both Ms. Mencher and Mr. Brezzano
are managing members of DDJ.
(4) Includes 8,500 shares of Preferred Stock convertible into 3,022,222
shares of Common Stock.
(5) Includes 20,000 shares subject to stock options which are fully vested
and currently exercisable.
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(6) Includes 32,000 shares of Common Stock currently owned and 2,500 shares
subject to stock options which are fully vested and currently
exercisable.
(7) Includes 3,125 shares of Common Stock currently owned 250 shares of
Preferred Stock convertible into 88,889 shares of Common Stock and
2,500 shares subject to stock options which are fully vested and
currently exercisable.
(8) Includes 20,000 shares subject to stock options which are fully vested
and currently exercisable.
(9) Includes 875 shares of Common Stock currently owned, 250 shares of
Preferred Stock convertible into 88,889 shares of Common Stock and
250,000 shares subject to stock options which are fully vested and
currently exercisable.
(10) Includes 250 shares of Preferred Stock convertible into 88,889 shares
of Common Stock and 250,000 shares subject to stock options which are
fully vested and currently exercisable.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the SEC and the Nasdaq Small-Cap Market. Officers, directors and
greater than 10% stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file. To the Company's
knowledge, based solely on review of the copies of such reports furnished to the
Company and written representations that no other reports were required during
the fiscal year ended December 31, 1996, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than 10% beneficial
owners were satisfied, except that Mr. Joseph Motzkin inadvertently filed a Form
3 Statement of Beneficial Ownership of Securities, which was due on August 11,
1996, approximately 30 days late.
Certain Relationships and Transactions
Jay Matulich, a Director of the Company, is a Managing Director of ICG,
which holds 57,745 Placement Agent Warrants at an exercise price of $2.30 per
share. ICG received these securities as part of a total compensation package
including 200,000 shares of Common Stock and 720,000 Placement Agent Warrants,
together with a gross fee of $808,000, as consideration for placement agent
services rendered on behalf of the Company during March and April 1995. ICG was
also the placement agent for the private placement of Units in October and
November 1995 consisting of convertible debentures and Series F Warrants to
overseas investors. In connection with this overseas offering, ICG received a
fee calculated as 8% of gross proceeds, resulting in approximately $896,000, and
701,563 warrants to purchase shares of the Company's Common Stock at an exercise
price of $10.00 per share. In June 1996, ICG was also the placement agent for an
overseas' offering of the Company's Common Stock. In connection with this
offering, ICG received a fee calculated at 8% of gross proceeds, resulting in
approximately $513,000. In addition, the Company exchanged 701,563 Warrants
exercisable at a price of $10 into 350,000 Warrants exercisable at a price of
$3.50. Through March 29, 1996, ICG also had a continuing relationship with the
Company pursuant to which ICG provided advisory and investment banking services
to the Company, principally in connection with financing matters. The Company
paid ICG $4,500 per month for such services, beginning on March 29, 1995. The
terms of this relationship were comparable to terms that would have been
obtainable from unaffiliated sources.
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B-III Capital Partners, L.P. holds 50,000 shares of the Company's
Preferred Stock. B III purchased these securities in June 1997 from the Company
during the Company's private placement. Holders of the Preferred Stock are
entitled to receive, when, as and if declared by the Board of Directors,
cumulative dividends at the annual rate of $8.00 per share for each of the three
years following June 26, 1997, and at the annual rate of $14.00 per share
thereafter. Dividends are payable annually in arrears on June 26 of each year,
commencing on June 26, 1998, in preference to and with priority over dividends
on the Common Stock. The Preferred Stock is convertible into Common Stock at a
conversion price of $0.28125 per share of Common Stock, which conversion price
may be reset to a lower conversion price upon the occurrence of certain events.
The Preferred Stock is also redeemable at the Company's option after one year,
subject to certain trading requirements. Each share of Preferred Stock entitles
the holder thereof to such number of votes per share as shall equal the number
of shares of Common Stock into which each share of Preferred Stock is then
convertible. The holders of the Preferred Stock have the right to vote together
as a single class to elect four (4) directors to the Board of Directors of the
Corporation, two of whom shall be designated by B III. B III has nominated Mr.
Breazzano and Ms. Mencher to serve on the Company's Board of Directors.
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PROPOSAL 2
APPROVAL OF CHANGE IN COMPANY'S STATE OF INCORPORATION
FROM NEVADA TO DELAWARE INCLUDING CHANGE OF CORPORATE NAME
AND RELATED CHANGES TO THE
CERTIFICATE OF INCORPORATION AND BYLAWS
For the reasons set forth below, the Board of Directors believes that
the best interests of the Company and its stockholders will be served by
changing the state of incorporation of the Company from Nevada to Delaware (the
"Reincorporation Proposal" or the "Proposed Reincorporation"). Stockholders are
urged to read carefully this section of this Proxy Statement, including the
exhibits, before voting on the Reincorporation Proposal. Throughout the Proxy
Statement, the terms the "Company" or "BioSafe" refer to the existing Nevada
corporation and the terms "Delaware Company" or "Waste Systems" refer to Waste
Systems International, Inc., a Delaware corporation and a wholly owned
subsidiary of BioSafe. The Delaware Company is the proposed successor to
BioSafe.
As discussed below, the principal reasons for the Proposed
Reincorporation are the greater flexibility of Delaware corporate law, the
substantial body of case law interpreting that law and the increased ability of
the Company to attract and retain qualified directors. The Company believes that
its stockholders will benefit from the well-established principles of corporate
governance that Delaware law affords. In connection with the Proposed
Reincorporation, the Company's name will be changed to "Waste Systems
International, Inc." and certain changes will be made in the Company's Articles
of Incorporation and By-Laws, including an increase in the number of shares of
the Company's Common Stock authorized for issuance.
The Reincorporation Proposal will be effected by merging BioSafe into
the Delaware Company pursuant to the terms of an Agreement and Plan of Merger
(the "Merger Agreement"), a copy of which is attached hereto as Exhibit A. The
Delaware Company has not previously conducted any business. Upon completion of
the Merger, BioSafe will cease to exist, and the Delaware Company will own all
of the Company's assets, assume its liabilities and carry on the Company's
business activities without change under the name Waste Systems International,
Inc.
Under Nevada law, the affirmative vote of a majority of the outstanding
shares of Common Stock is required for approval of the Merger and the other
terms of the Proposed Reincorporation. The Proposed Reincorporation has been
unanimously approved by BioSafe's Board of Directors. If approved by the
stockholders, it is anticipated that the Merger will become effective as soon as
practicable (the "Effective Date") following the Annual Meeting. However, under
the Merger Agreement, the Board of Directors of either BioSafe or the Delaware
Company may abandon the Merger or amend the Merger Agreement (except that the
principal terms may not be amended without stockholder approval) either before
or after stockholder approval has been obtained and prior to the Effective Date
of the Proposed Reincorporation if, in either of their opinions, circumstances
arise which make it inadvisable to proceed under the original terms of the
Merger Agreement.
Effect of Reincorporation on Company
This section provides a summary of the Merger's effect on the Company's
capital stock, management, employee benefit plans and charter documents. Please
refer to the section entitled "Comparison of Corporation Law of Delaware and
Nevada and Application to the Merger" which begins on page 20 of this Proxy
Statement.
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Corporate Effect
Capital Stock. Upon the Effective Date, each outstanding share of Common
Stock shall automatically convert into one share of Delaware Company common
stock, $.001 par value per share ("Delaware Common Stock"); each outstanding
share of Preferred Stock of the Company will automatically convert into a share
of Series A Preferred Stock, $.001 par value per share (the "Delaware Preferred
Stock"), of the Delaware Company having identical terms and convertible into the
same number of shares of Common Stock into which it was formerly convertible;
each outstanding convertible debenture of the Company will automatically convert
into a convertible debenture of the Delaware Company, having the same face
amount and identical terms and convertible into the same number of shares of
Delaware Common Stock as the number of shares of Common Stock into which it was
formerly convertible; and each outstanding warrant or option to purchase a
number of shares of Common Stock will automatically convert into a warrant or
option to purchase the same number of shares of Delaware Common Stock. Each
stock certificate representing issued and outstanding shares of Common Stock
will continue to represent the same number of shares of Delaware Common Stock.
Following completion of the Merger, arrangements will be made for holders of
BioSafe share certificates to exchange their certificates for share certificates
of Waste Systems International. The Company's Common Stock is listed for trading
on the Nasdaq Small-Cap Market and its trading symbol is BSFE. After the Merger,
the Delaware Common Stock will be traded on the Nasdaq SmallCap Market under the
symbol WSII. On September 23, 1997 the closing price was $.6875.
Management after the Reincorporation Merger. Immediately after the
Effective Date, members of the Board of Directors of the Delaware Company will
be composed of the then-current members of the Board of Directors of the
Company. The current members of the Board of Directors of the Company will
continue to hold office as directors of the Delaware Company for the terms and
subject to the provisions set forth in the Delaware Charter Documents. The
current officers of the Company will become the officers of the Delaware
Company.
Employee Benefit Plans. All of the Company's employee benefit, stock
option and rights plans will be continued, and each outstanding option or right
to purchase Common Stock will automatically be converted into an option or right
to purchase the same number of shares of the Delaware Common Stock, at the same
price per share, upon the same terms and subject to the same conditions.
Approval of the Reincorporation Proposal will also constitute approval of the
assumption of all the Company's employee benefit, stock option and rights plans
by the Delaware Company.
Changes to Charter Documents; Possible Anti-takeover Effect
The Delaware Charter Documents, which will govern the corporate affairs
of the Company after the Merger, differ in certain respects from the Company's
Articles of Incorporation (the "Nevada Articles") and Bylaws (the "Nevada
Bylaws," together with the Nevada Articles, the "Nevada Charter Documents"). The
following is a summary of the principal changes.
The Delaware Charter Documents provide that any action required or
permitted to be taken by shareholders of the Company may be effected at a duly
called annual or special meeting. If a shareholder wishes a proposal to be
considered at an annual or special meeting under the Delaware Bylaws, he must
give timely advance notice to the Company in accordance with the provisions of
the Delaware Bylaws. The Delaware Bylaws permit only the Company's Chairman of
the Board, President, or a majority of the members of the Company's Board of
Directors to call a special meeting of shareholders. In addition, under the
Delaware Charter Documents, a director may be removed only for cause by the
affirmative vote of two-thirds of the outstanding shares entitled to vote at an
election of directors at a special meeting called for that purpose.
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<PAGE>
The Delaware Certificate authorizes the Board of Directors to issue up
to 1,000,000 shares of Delaware Preferred Stock and to determine the price,
rights, preferences, privileges and restrictions, including voting rights of
those shares without any further vote or action by the Company's shareholders.
This does not represent a material change from the Nevada Articles, which also
include authority for up to 1,000,000 shares of undesignated Preferred Stock.
The rights of the holders of Delaware Common Stock will be subject to, and may
be adversely affected by, the rights of the holders of any Delaware Preferred
Stock that may be issued in the future. The issuance of Delaware Preferred
Stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third-party to acquire a majority of the voting stock of
the Company. In connection with the Merger, the 97,378 shares of Preferred Stock
of the Company now outstanding will be converted into a like number of shares of
Series A Preferred Stock of the Delaware Company.
In addition, the Company is subject to Section 203 of the Delaware
General Corporation Law ("Section 203"), which places certain restrictions on
the ability of Delaware corporations to engage in business combinations with
interested shareholders. See "Business Combinations" on page __.
The foregoing provisions could be deemed to have a possible
anti-takeover effect by deterring or delaying the ability of a substantial
shareholder to exercise a controlling influence over the actions of the Company.
The Board of Directors of the Company believes that such provisions are
desirable in that they strengthen the Company's ability to protect the interests
of the stockholders in the event of a proposed change of control.
The Reincorporation Proposal will effect a change in the legal domicile
of the Company and other changes of a legal nature, certain of which are
described in this Proxy Statement. The discussion set forth below is qualified
in its entirety by reference to the Merger Agreement, the Delaware Certificate
and the Delaware By-Laws, copies of which are attached hereto as Exhibit A,
Exhibit B and Exhibit C, respectively. Copies of the Nevada Articles and Nevada
Bylaws are available for inspection at the principal executive office of the
Company and copies will be sent to stockholders, without charge, upon written
request directed to Robert Rivkin, BioSafe International, Inc., 10 Fawcett
Street, Cambridge, MA 02138 (telephone number (617) 497-4500).
Increase in Authorized Common Stock
The number of shares of Common Stock authorized for issuance under the
Delaware Certificate, which will be the Certificate of Incorporation of the
Company following the Merger, is 150,000,000 shares, which represents a 50%
increase in the number of shares authorized for issuance, from 100,000,000
shares to 150,000,000 shares.
In the opinion of the Board of Directors increasing the number of
authorized but unissued shares of Common Stock would be in the best interests of
the Company insofar as increasing the number of authorized shares of Common
Stock affords the Company the opportunity to take a number of corporate
initiatives, although the Company has no specific such initiatives presently
under consideration. These initiatives include, among others, the following:
First, the Company may consider a stock dividend or stock split. In
order to declare a stock dividend or a stock split, there must be a sufficient
number of authorized but unissued shares of Common Stock available to be issued
to existing Company stockholders. Thus, additional authorized but unissued
shares of Common Stock might eventually be necessary for the Company to declare
stock dividends or stock splits to existing shareholders. Further, the existence
of authorized but unissued shares of Common Stock does not affect the ability of
the Company to declare cash dividends.
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<PAGE>
Second, the Company may consider one or more merger and acquisition
transactions. In certain circumstances, merger and acquisition transactions
require the issuance of authorized but unissued shares of common stock in
consideration of the business or assets to be acquired. If the Company
determined it was in its best interests to acquire or merge with another entity,
the acquisition or merger agreement might require an exchange of shares of each
entity's stock and the issuance of authorized but unissued shares by the
Company. Thus, a sufficient number of authorized but unissued shares of the
Company's Common Stock must be available for issuance under such circumstances.
Third, the Company may desire to raise additional capital through the
sale on the primary market of authorized but unissued shares of Common Stock.
Such additional capital could, for example, be used by the Company to improve
its equity capital position or to provide funds needed for expansion.
Although there are many advantages to increasing the authorized number
of shares of Common Stock from 100,000,000 to 150,000,000, the increase could
result, in certain circumstances, in the dilution of existing shareholders'
ownership interests in the Company at some point in the future. This could
occur, for example, where authorized but unissued shares of Common Stock are
sold by the Company in the public or private equity markets and existing
shareholders are not given (or do not take advantage of) the right to maintain
their percentage ownership interests through the purchase of a portion of the
new issuance of stock. In such case, the sale of new shares of Common Stock
would dilute the existing shareholders' ownership interest in the Company.
Holders of the Company's Common Stock have no pre-emptive rights as to any
shares issued in the future. Therefore, the Company may issue shares of Common
Stock without first offering such shares to the Company's then-current
stockholders. However, the Company does not presently have any plan to issue
authorized but unissued shares of Common Stock.
Vote Required for the Reincorporation Proposal
Approval of the Reincorporation Proposal, which will also constitute
approval of (i) the Merger and the Delaware Charter Documents and (ii) the
Delaware Company's assumption of BioSafe's employee benefit plans and stock
option plans, will require the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock entitled to vote and at least 51% of the
Preferred Stock entitled to vote and voting as a separate class. Upon the
Effective Date of the Merger, the Company's name will change to Waste Systems
International, Inc.
Principal Reasons for the Proposed Reincorporation
As the Company plans for the future, the Board of Directors and
management believe that it is essential to be able to draw upon well-established
principles of corporate governance in making legal and business decisions. The
prominence and predictability of Delaware corporate law provide a reliable
foundation on which the Company's governance decisions can be based, and the
Company believes that stockholders will benefit from the responsiveness of
Delaware corporate law to their needs and to those of the corporation they own.
Prominence, Predictability and Flexibility of Delaware Law. For many
years Delaware has followed a policy of encouraging incorporation in that state
and, in furtherance of that policy, has been a leader in adopting, construing
and implementing comprehensive, flexible corporate laws responsive to the legal
and business needs of corporations organized under its laws. Many corporations
have chosen Delaware initially as a state of incorporation or have subsequently
changed corporate domicile to Delaware in a manner similar to that proposed by
the Company. Because of Delaware's prominence as the state of incorporation for
many major corporations, both the legislature and courts in Delaware have
demonstrated an ability and a willingness to act quickly and effectively to meet
18
<PAGE>
changing business needs. The Delaware courts have developed considerable
expertise in dealing with corporate issues and a substantial body of case law
has developed construing Delaware law and establishing public policies with
respect to corporate legal affairs.
Increased Ability to Attract and Retain Qualified Directors. Both Nevada
and Delaware law permit a corporation to include a provision in its certificate
of incorporation which reduces or limits the monetary liability of directors for
breaches of fiduciary duty in certain circumstances. The Company believes that,
in general, Delaware case law regarding a corporation's ability to limit
director liability is more developed and provides more guidance than Nevada law.
The increasing frequency of claims and litigation directed against directors and
officers has greatly expanded the risks facing directors and officers of
corporations in exercising their respective duties. The amount of time and money
required to respond to such claims and to defend such litigation can be
substantial. It is the Company's desire to reduce these risks to its directors
and officers and to limit situations in which monetary damages can be recovered
against directors so that the Company may continue to attract and retain
qualified directors who otherwise might be unwilling to serve because of the
risks involved.
Well-Established Principles of Corporate Governance. There is
substantial judicial precedent in the Delaware courts as to the legal principles
applicable to measures that may be taken by a corporation and as to the conduct
of the Board of Directors under the business judgment rule. The Company believes
that its stockholders will benefit from the well-established principles of
corporate governance that Delaware law affords.
No Change in Board Members, Business, Management, Employee Benefit Plans
or Location of Principal Facilities of the Company. The Reincorporation Proposal
will effect only a change in the name and legal domicile of the Company and
certain other changes of a legal nature, certain of which are described in this
proxy statement. The Proposed Reincorporation will NOT result in any change in
the business, management, fiscal year, assets or liabilities (except to the
extent of legal and other costs of effecting the reincorporation) or location of
the principal facilities of the Company.
Prior to the Effective Date, the Company will obtain any requisite
consents to the Merger from parties with whom it may have material contractual
arrangements (the "Material Agreements"). As a result, BioSafe's rights and
obligations under such Material Agreements will continue and be assumed by the
Delaware Company.
Certain Federal Income Tax Consequences of the Merger
The Proposed Reincorporation is intended to be a tax-free organization
under Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the
"Code"). Accordingly, no gain or loss will be recognized by the holders of
Common Stock of the Company as a result of the Proposed Reincorporation, and no
gain or loss will be recognized by the Company or the Delaware Company. Each
former holder of Common Stock of the Company will have the same basis in the
Delaware Common Stock received as such holder has in the Common Stock of the
Company held on the Effective Date of the Proposed Reincorporation. Each
stockholder's holding period with respect to the Delaware Common Stock will
include the period during which such holder held the corresponding Common Stock
of the Company, provided the latter is held as a capital asset on the Effective
Date.
Although the Company believes that the foregoing summary describes the
material federal income tax consequences of the Proposed Reincorporation, there
can be no assurance that the actual tax consequences will not be different.
Stockholders should be advised that the Company has not obtained, and does not
intend to request, either a ruling from the Internal Revenue Service or an
opinion of counsel regarding any of such tax consequences. Furthermore, the
foregoing is only a summary of the federal income tax consequences of the
Proposed Reincorporation, and does not deal with all the tax consequences that
may be relevant to particular stockholders, such as stockholders who are dealers
in securities, foreign persons or stockholders who acquired their Common Stock
upon the exercise of stock options or in other compensatory transactions. In
view of the individual nature of tax consequences, stockholders are urged to
consult their own tax advisers as to the specific tax consequences to them of
the Proposed Reincorporation, including the applicability of federal, state,
local and foreign tax laws.
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Dissenters' Rights
The following discussion is not a complete statement of the law relating
to dissenters' rights and is qualified in its entirety by reference to Exhibit
D. ANY HOLDER WHO WISHES TO EXERCISE STATUTORY DISSENTERS' RIGHTS OR WHO WISHES
TO PRESERVE THE RIGHT TO DO SO SHOULD REVIEW CAREFULLY THIS DISCUSSION AND
EXHIBIT D. FAILURE TO COMPLY STRICTLY WITH THE PROCEDURES SET FORTH HEREIN AND
IN EXHIBIT D WILL RESULT IN THE LOSS OF DISSENTERS' RIGHTS.
Stockholders of BioSafe will have dissenters' rights with respect to the
Merger under the Nevada Business Corporation Act ("NBCA") and will be entitled
to receive the "fair value" of their shares upon consummation of the Merger.
Under the applicable provisions of the NBCA, the "fair value" of the shares of
Common Stock will be equal to the value of the shares immediately before the
effectuation of the Merger, excluding any appreciation or depreciation in
anticipation of the Merger. Sections 300 through 500 of the NBCA are reprinted
in their entirety as Exhibit D. All references in the NBCA and in this summary
to a "stockholder" are to the record holder of the shares of Common Stock as to
which dissenters' rights are asserted. A person having a beneficial interest in
shares of Common Stock that are held of record in the name of another person,
such as a broker or nominee, must act promptly to cause the record holder to
follow the steps summarized below properly and in a timely manner to perfect
whatever dissenters' rights the beneficial owner may have.
Each stockholder electing to exercise his dissenters' rights and seek
payment for the fair value of his shares must deliver to the Company, before the
vote on the Merger at the Annual Meeting, a written notice of his intent to
demand payment for his shares of Common Stock. Stockholders should send this
notice to Robert Rivkin, BioSafe International, Inc., 10 Fawcett Street,
Cambridge, MA 02138. This written notice must be in addition to and separate
from any proxy or vote against the Merger. Voting against, abstaining from
voting or failing to vote on the Merger will not constitute a demand for
dissenters' rights and payment for shares of Common Stock within the meaning of
the NBCA. Any stockholder electing to demand dissenters' rights with respect to
the Merger will not be granted dissenters' rights under the NBCA if such
stockholder has either voted in favor of the Merger or consented thereto in
writing (including by granting the proxy solicited by this proxy statement or by
returning a signed proxy without specifying a vote against the Merger or a
direction to abstain from such vote).
If the Merger is approved at the Annual Meeting, the Company will send a
notice within 10 days after effectuation of the Merger to all of the
stockholders who have satisfied the requirements to assert dissenters' rights.
This notice will state where the payment demand is to be sent and where and when
certificates for the shares of Common Stock must be deposited. The Company will
include in this notice a form for the dissenting stockholder to complete which
demands payment, a statement as to the date of the first announcement to news
media or the stockholders of the terms of the Merger and a requirement that the
stockholder certify to the Company that he acquired the shares of Common Stock
before that date. In addition, this notice will set a date by which the Company
must receive the completed form of payment demand from the dissenting
stockholder; the date will not be fewer than 30 days nor more than 60 days after
the date of the Company's notice. To obtain payment for his shares, a dissenting
stockholder must complete and return to the Company the completed form of
payment demand included with the Company's notice and deposit his shares in
accordance with the Company's notice.
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Within thirty (30) days after the Company receives the demand for
payment, the Company will pay each dissenter who has complied with the
applicable provisions of the NBCA the amount the Company estimates to be the
fair value of the dissenter's shares plus accrued interest. The Company will
also send to the dissenting stockholder along with such payment the following
items: (i) the Company's balance sheet for the year ended December 31, 1996;
(ii) a statement of income for that year; (iii) a statement of changes in the
stockholders' equity for that year, (iv) the latest interim financial
statements, (v) a statement of the Company's estimate of the fair value of the
shares; (vi) an explanation of how interest was calculated; (vii) a statement of
the dissenter's right to demand payment under the applicable provision of the
NBCA; and (viii) a copy of Sections 300 to 500 of the NBCA.
The NBCA provides that a corporation may elect to withhold payment from
a dissenter, unless the stockholder was the beneficial holder of the shares
before the date set forth in the Company's notice to dissenting stockholders. To
the extent the Company elects to withhold payment, the Company must estimate the
fair value of the shares of Common Stock owned by the dissenting stockholder
plus accrued interest and will offer this amount to each dissenter. The Company
must also give the dissenter an explanation of how the Company calculated the
interest and a statement of the dissenter's right to demand payment.
A dissenting stockholder may reject the Company's offer and supply his
own estimate of the fair value of his shares of Common Stock plus interest and
demand payment for such amount less any amount he received from the Company. A
dissenting stockholder will waive his dissenter's right to demand payment if he
fails to notify the Company of his dissatisfaction of the Company's offer within
30 days after the Company has made or offered payment for his shares.
If a demand for payment remains unsettled, the Company may commence a
judicial proceeding in the district court of the county in which the
corporation's registered office is located 60 days after receiving the payment
demand and petition the court to determine the fair value of the shares of
Common Stock and accrued interest owned by the dissenting stockholder. If the
Company does not commence a proceeding, the Company is obligated to pay to the
dissenting stockholders the amounts demanded by them. The Company will make all
dissenting stockholders parties to the proceeding. Each dissenter made a party
to the suit is entitled to judgment for either of the following: (a) the amount,
if any, by which the court finds the fair value of the dissenter's shares plus
interest exceeds the amount paid by the Company or (b) the fair value, plus
interest, of the dissenter's after-acquired shares for which the Company elected
to withhold payment. The court will assess court costs against the Company
except to the extent the court finds the dissenters acted arbitrarily,
vexatiously or not in good faith.
Exchange of Stock Certificates
If the Board of Directors determines to consummate the Merger, as soon
as practicable after the Effective Date the Company will send letters of
transmittal to all stockholders of record on the Effective Date for use in
transmitting stock certificates ("Old Certificates") to the Company's exchange
agent.
Upon proper completion and execution of the letter of transmittal and
return thereof to the exchange agent, together with Old Certificates, holders of
record will receive certificates ("New Certificates") representing the number of
whole shares of Common Stock into which their shares of Common Stock have been
converted as a result of the Merger (as well as cash in lieu of fractional
shares resulting from the Merger). Until surrendered, each outstanding Old
Certificate held by a stockholder shall be deemed for all purposes to represent
the number of whole shares to which the holder is entitled as a result of the
Merger (as well as cash in lieu of fractional shares resulting from the Merger).
No service charges will be payable by stockholders in connection with
the exchange of certificates; all such expenses will be borne by the Company.
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Comparison of Corporation Law of Delaware and Nevada and Application to the
Merger
BioSafe is incorporated under the laws of the State of Nevada, and the
Delaware Company is incorporated under the laws of the State of Delaware. The
Company stockholders, whose rights as stockholders are currently governed by
Nevada law and the Nevada Charter Documents, will become upon consummation of
the Merger stockholders of the Delaware Company and their rights will be
governed by Delaware law and the Delaware Charter Documents. The following
summary does not purport to be a complete statement of the rights of BioSafe's
stockholders under applicable Nevada law and the Nevada Charter Documents as
compared with the rights of the Delaware stockholders under applicable Delaware
law and the Delaware Charter Documents. The summary is qualified in its entirety
by the Delaware General Corporation Law ("DGCL") and the NBCA to which
stockholders are referred. Generally, the provisions of the Delaware Charter
Documents are similar to those of the Nevada Charter Documents in many respects.
The discussion of the Delaware Charter Documents is qualified by reference to
Exhibit B and Exhibit C.
Authorized Capital Stock. The Nevada Articles currently authorize the
Company to issue up to 100,000,000 shares of Common Stock and 1,000,000 shares
of Preferred Stock. There are currently 97,378 shares of Preferred Stock
outstanding. The Delaware Certificate provides that the Company is authorized to
issue 150,000,000 shares of Delaware Common Stock and 1,000,000 shares of
Delaware Preferred Stock.
Each of the Nevada Articles and the Delaware Certificate provides that
each company's respective Board of Directors is entitled to determine the
powers, preferences and rights and the qualifications, limitations or
restrictions, of the authorized and unissued preferred stock. Although they have
no present intention of doing so, the Board of Directors of either BioSafe or
the Delaware Company, without stockholder approval, could authorize the issuance
of preferred stock in the future upon terms or with any rights, preferences and
privileges which could have the effect of delaying or preventing a change in
control of either company or modifying the effective rights of holders of either
company's common stock under applicable Nevada or Delaware law. Each Board of
Directors could also utilize such shares for further financings, possible
acquisitions and other uses.
Amendment to Charter and Bylaws. Delaware and Nevada law require the
approval of the holders of a majority of all outstanding shares entitled to vote
(with, in each case, each stockholder being entitled to one vote for each share
so held) to approve proposed amendments to a corporation's charter. Neither
state requires stockholder approval for the board of directors of a corporation
to fix the voting powers, designation, preferences, limitations, restrictions
and rights of a class of stock, provided that the corporation's charter
documents grant such power to its board of directors. The holders of the
outstanding shares of a particular class are entitled to vote as a class on a
proposed amendment if the amendment would alter or change the power, preferences
or special rights of one or more series of any class so to affect them
adversely. The number of authorized shares of any such class of stock may be
increased or decreased (but not below the number of shares then outstanding) by
the affirmative vote of the holders of a majority of the stock entitled to vote
thereon (without a class vote) if so provided in any amendment to the
certificate of incorporation or resolutions creating such class of stock.
The Delaware Certificate provides that the affirmative vote of not less
than 80% of the total votes eligible to be cast by holders of voting stock,
voting together as a single class, shall be required to amend or repeal any of
the provisions regarding the directors or amendments to the Delaware
Certificate.
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Business Combinations. The Delaware Company is subject to the provisions
of Section 203 of DGCL. That section provides, with certain exceptions, that a
Delaware corporation may not engage in any of a broad range of business
combinations with a person or affiliate, or associate of such person, who is an
"interested stockholder" for a period of three years from the date that such
person became an interested stockholder unless: (i) the transaction resulting in
a person becoming an interested stockholder, or the business combination, is
approved by the board of directors of the corporation before the person becomes
an interested stockholder; (ii) the interested stockholder acquires 85% or more
of the outstanding voting stock of the corporation in the same transaction that
makes it an interested stockholder (excluding shares owned by persons who are
both officers and directors of the corporation, and shares held by certain
employee stock ownership plans); or (iii) on or after the date the person
becomes an interested stockholder, the business combination is approved by the
corporation's board of directors and by the holders of at least 66% of the
corporation's outstanding voting stock at an annual or special meeting,
excluding shares owned by the interested stockholder. An "interested
stockholder" is defined as any person who is (i) the owner of 15% or more of the
outstanding voting stock of the corporation or (ii) an affiliate or associate of
the corporation and was the owner of 15% or more of the outstanding voting stock
of the corporation at any time within the three-year period immediately prior to
the date on which it is sought to be determined whether such person is an
interested stockholder. Section 203 further provides that where it specifies a
particular stockholder vote required to approve a matter, no provision in the
certificate of incorporation or bylaws may require a greater vote.
Nevada law regulates combinations more stringently. First, an interested
stockholder is defined as a beneficial owner of 10% or more of the voting power.
Second, the three-year moratorium can be lifted only by advance approval by a
corporation's board of directors, as opposed to Delaware's provision that allows
interested stockholder combinations at the time of the transaction with
stockholder approval. Finally, after the three-year period, combinations remain
prohibited unless (i) they are approved by the board of directors, the
disinterested stockholders or a majority of the outstanding voting power not
beneficially owned by the interested party or (ii) the interested stockholders
satisfy certain fair value requirements. As in Delaware, a Nevada corporation
may opt out of the statute and BioSafe has done so. The Nevada Articles provides
that BioSafe may engage in transactions with its directors or other entity in
which its directors or officers are financially interested provided that the
fact of such relationship is disclosed to the Board of Directors and
stockholders entitled to vote and the transaction is fair and reasonable to the
company.
Cumulative Voting. Cumulative voting for directors entitles each
stockholder to cast a number of votes that is equal to (x) the number of voting
shares held by him multiplied by (y) the number of directors to be elected. The
stockholder may cast all such votes either for one nominee or distribute such
votes among up to as many candidates as there are positions to be filled.
Cumulative voting may enable a minority stockholder or group of stockholders to
elect at least one representative to the board of directors where such
stockholders would not otherwise be able to elect any directors.
Nevada law permits cumulative voting in the election of directors as
long as certain procedures are followed. Although Delaware law does not
explicitly grant cumulative voting, a Delaware corporation may provide for
cumulative voting in the corporation's certificate of incorporation. Neither the
Nevada Articles nor the Delaware Certificate provides for cumulative voting.
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Vacancies. Subject to the rights, if any, of any series of Delaware
Preferred Stock to elect directors and to fill vacancies on the Board of
Directors, vacancies during the year shall be filled by the affirmative vote of
a majority of the remaining directors then in office, even if less than a
quorum. Any director appointed shall hold office for the remainder of the full
term of the class of directors in which the vacancy occurred.
Removal of Directors. Under Delaware law, the holders of a majority of
voting shares of each class entitled to vote at an election of directors may
vote to remove any director or the entire board without cause unless (i) the
board is a classified board in which case directors may be removed only for
cause, or (ii) the corporation has cumulative voting in which case if less than
the entire board is to be removed no director may be removed without cause if
the vote cast against his removal would be enough to elect him. Nevada law
requires at least two-thirds of the majority of voting shares or class entitled
to vote at an election of directors to remove a director. Furthermore, Nevada
law does not make a distinction between removals for cause and removals without
cause.
Actions by Written Consent of Stockholders. Nevada law and Delaware law
each provide that any action required or permitted to be taken at a meeting of
the stockholders may be taken without a meeting if the holders of outstanding
stock having at least the minimum number of votes that would be necessary to
authorize or take such action at a meeting consent to the action in writing. In
addition, Delaware law requires the corporation to give prompt notice of the
taking of corporate action without a meeting by less than unanimous written
consent to those stockholders who did not consent in writing. The Delaware
Certificate and the Nevada Articles, however, each provide that any action by
the stockholders of such class must be taken at an annual or special meeting of
stockholders and may not be taken by written consent.
Stockholder Vote for Mergers and Other Corporate Reorganizations. In
general, both jurisdictions require authorization by an absolute majority of
outstanding shares entitled to vote, as well as approval by the board of
directors with respect to the terms of a merger or a sale of substantially all
of the assets of the corporation. Neither Nevada law nor Delaware law requires
stockholder approval by the stockholders of a surviving corporation in a merger
or consolidation as long as the surviving corporation issues no more than 20% of
its voting stock in the transaction.
Dissenters' Rights. In both jurisdictions, dissenting stockholders of a
corporation engaged in certain major corporate transactions are entitled to
appraisal rights. Appraisal rights permit a stockholder to receive cash equal to
the fair market value of the stockholder's shares in lieu of the consideration
such stockholder would otherwise receive in any such transaction. Either a court
or the parties by agreement determine the fair market value of the stockholder's
shares.
Under Delaware law, appraisal rights are generally available for the
shares of any class or series of stock of the Delaware Company in a merger or
consolidation. No appraisal rights are available for the shares of any class or
series of stock which, at the record date for the meeting held to approve such
transaction, were either (i) listed on a national security exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. ("NASD") or (ii)
held of record by more than 2,000 stockholders. Even if the shares of any class
or series of stock meet the requirements of clause (i) or (ii) above, appraisal
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rights are available for such class or series if the holders thereof receive in
the merger or consolidation anything except: (i) shares of stock of the
corporation surviving or resulting from such merger or consolidation; (ii)
shares of stock of any other corporation which at the effective date of the
merger or consolidation is either listed on a national securities exchange, or
designated as a national market system security on an interdealer quotation
system by the NASD or held of record by more than 2,000 stockholders; (iii) cash
in lieu of fractional shares; or (iv) any combination of the foregoing. No
appraisal rights are available to stockholders of the surviving corporation if
the merger did not require their approval.
Under Nevada law, a stockholder is entitled to dissent from, and obtain
payment for the fair value of his shares in the event of consummation of, a plan
of merger or plan of exchange in which the corporation is a party and any
corporate action taken pursuant to a vote of the stockholders to the extent that
the articles of incorporation, bylaws or a resolution of the board of directors
provides that voting or nonvoting stockholders are entitled to dissent and
obtain payment for their shares. As with Delaware law, Nevada law provides an
exception to dissenters' rights. Holders (i) of securities listed on a national
securities exchange or designated as a national market system security on an
interdealer quotation system by the NASD or (ii) of securities held by 2,000
stockholders of record are generally not entitled to dissenters' rights. For a
more complete description of the dissenters' rights applicable to the Merger,
please refer to the section entitled "Dissenters' Rights" which begins on page
19 of this Proxy Statement.
Stockholder Inspection Rights. Delaware law grants any stockholder the
right to inspect and to copy for any proper purpose the corporation's stock
ledger, a list of its stockholders, and its other records. A proper purpose is
one reasonably related to such person's interest as a stockholder. Directors
also have the right to examine the corporation's stock ledger, a list of its
stockholders and its other records for a purpose reasonably related to their
positions as directors.
Nevada law provides that any person who has been a stockholder of
record of a corporation for at least six months immediately preceding his
demand, or any person who owns or has been authorized by the holders of at least
5% of all of its outstanding shares, is entitled to inspect and copy the stock
ledger. Furthermore, any person who has been a stockholder of record of any
corporation and owns or has been authorized by the holders of at least 15% of
all of its outstanding shares, is entitled to inspect and copy other corporate
records.
Derivative Suits. Under Delaware and Nevada law, a stockholder may
bring a derivative action on behalf of the corporation only if the stockholder
was a stockholder of the corporation at the time of the transaction in question
or the stockholder acquired the stock thereafter by operation of law.
Dividends and Distributions. Nevada law prohibits distributions to
stockholders when the distributions would (i) render the corporation unable to
pay its debts as they become due in the usual course of business; and (ii)
render the corporation's total assets less than the sum of its total liabilities
plus the amount that would be needed to satisfy the preferential rights upon
dissolution of stockholders whose preferential rights are superior to those
receiving the distribution.
Delaware law permits a corporation to pay dividends out of either (i)
surplus or (ii) in case there is no surplus, out of its net profits for the
fiscal year in which the dividend is declared and/or the preceding fiscal year,
except when the capital is diminished to an amount less than the aggregate
amount of the capital represented by issued and outstanding stock having a
preference on the distribution of assets. Delaware law defines surplus as the
excess, at any time, of the net assets of a corporation (determined on a fair
market value, as opposed to historical cost, basis) over its stated capital.
To date, neither the BioSafe nor the Delaware Company has paid
dividends on its common stock. The payment of dividends, if any, is within the
discretion of the Board of Directors of the Delaware Company and will depend
upon the Delaware Company's earnings, its capital requirements and financial
condition, and other relevant factors. The Board of Directors of the Delaware
Company does not intend to declare any dividends in the foreseeable future, but
instead intends to retain all earnings, if any, for use in the Delaware
Company's business operations.
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Limitation of Liability and Indemnification Matters. Nevada law and
Delaware law each permit corporations to adopt provisions in their charter
documents that eliminate or limit the personal liability of directors to the
corporation or their stockholders for monetary damages for breach of a
director's fiduciary duty, subject to the differences discussed below.
In suits that are not brought by or in the right of the corporation,
both jurisdictions permit a corporation to indemnify directors, officers,
employees and agents for attorneys' fees and other expenses, judgments and
amounts paid in settlement. The person seeking indemnity may recover as long as
he acted in good faith and believed his actions were either in the best
interests of or not opposed to the best interests of the corporation. Similarly,
the person seeking indemnification must not have had any reason to believe his
conduct was unlawful.
In derivative suits, a corporation in either jurisdiction may indemnify
its agents for expenses that the person actually and reasonably incurred. A
corporation may not indemnify a person if the person was adjudged to be liable
to the corporation unless a court otherwise orders. Delaware law does not permit
corporations to indemnify parties for amounts paid in derivative actions without
court approval.
No corporation may indemnify a party unless it makes a determination
that indemnification is proper. In Delaware, the corporation through its
stockholders, directors or independent legal counsel will determine that the
conduct of the person seeking indemnity conformed with the statutory provisions
governing indemnity. In Nevada, the corporation through its stockholders,
directors or independent counsel must determine only that the indemnification is
proper.
Delaware law provides that a corporation may advance attorneys' fees to
a director, officer or employee upon receipt of an undertaking to repay the
corporation if the person seeking the advance is ultimately found not to be
entitled to indemnification. Nevada law does not require employees to give the
undertaking. Both jurisdictions preclude liability limitation for acts or
omissions not in good faith or involving intentional misconduct and for paying
dividends or repurchasing stock out of other than lawfully available funds.
Nevada law does not expressly preclude a corporation from limiting liability for
a director's breach of the duty of loyalty or preclude a corporation from
limiting liability for any transaction from which a director derives an improper
personal benefit.
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PROPOSAL 3
APPROVAL OF AMENDMENT TO 1995 STOCK OPTION AND INCENTIVE PLAN
The Company uses stock options as an important part of the overall
compensation structure for its employees. As explained in "Report of the
Compensation Committee" above, the Board of Directors and the Compensation
Committee believe that it is desirable to use equity-based incentives to retain,
motivate and attract quality personnel for the Company. Prior to the Board of
Directors' approval on June 30, 1997 of an amendment to the BioSafe
International Inc. 1995 Stock Option Plan, the Plan provided for grants of
options to purchase up to 1,500,000 shares of Common Stock. Options granted
under the Plan may be either incentive stock options ("Incentive Options") or
non-qualified stock options ("Non-Qualified Options"). On September 10, 1997,
options to purchase 6,512,088 shares granted to officers and employees of the
Company were outstanding. Of that number, options to purchase 5,875,008 shares
were granted to officers of the Company. The Company believes that the remaining
shares available under the Plan are insufficient to fully serve the Company's
long-term compensation requirements after 1997. Accordingly, the Board of
Directors has voted, subject to stockholder approval, to amend the Plan to
permit the grant of options to purchase up to 8,500,000 additional shares of
Common Stock of the Company, (the Plan with this amendment, the "Amended Option
Plan"). On September 10, 1997 outstanding and unexercised options equaled 12% of
the Company's total outstanding shares of Common Stock and Preferred Stock on an
as-converted basis. Pursuant to the proposed amendment, shares outstanding and
available for future grant under the Amended Option Plan will equal
approximately 15% of the total number of shares outstanding, including shares
issuable on conversion of outstanding Preferred Stock and Convertible Notes. A
summary of the Amended Option Plan is set forth below.
Summary of the Amended Option Plan
The following description of certain features of the Amended Option Plan
is intended to be a summary and is qualified in its entirety by reference to the
full text of the Amended Option Plan.
Number of Shares Subject to the Amended Option Plan. The Amended Option
Plan provides for the issuance of, or grant of options to purchase, up to
8,500,000 shares of Common Stock. The proceeds received by the Company from
option exercises under the Amended Option Plan will be used for the general
corporate purposes. On September 23, 1997, the closing price of the Company's
Common Stock, as reported on the Nasdaq Small-Cap Market, was $.6875.
Plan Administration. The Plan is administered by the Compensation
Committee of the Board of Directors of the Company. All members of the Committee
are required to be and are "Disinterested Persons," as that term is defined
under the rules promulgated by the Securities and Exchange Commission and
"Outside Directors," as that term is defined under Section 162(m) of the Code
and the regulations promulgated thereunder.
Awards under the Amended Option Plan. The Amended Option Plan provides
for the grant of Incentive Options and Non-Qualified Options; stock appreciation
rights, restricted and unrestricted share of Common Stock, performance shares
and dividend equivalent rights.
Eligibility. Persons eligible to participate in the Plan are those full-
or part-time officers, other employees and other key persons of the Company or
its subsidiaries who are responsible for or contribute to the management, growth
or profitability of the Company and its subsidiaries, as selected from time to
time by the Compensation Committee in its sole discretion. Independent
Directors of the Company are eligible to receive awards under the Plan on a
limited basis.
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Nature of Options. Options under the Amended Option Plan may be either
Incentive Options within the definition of Section 422 of the Code or
Non-Qualified Options.
Stock Appreciation Rights. Upon exercise of a stock appreciation right,
the recipient will receive an amount of cash, shares of Common Stock, or any
combination of cash and shares the Compensation Committee deems appropriate,
equal to the excess of the fair market value of a share of Common Stock on the
date of exercise over the exercise price specified in the right (or, in the case
of a tandem right, the exercise price specified in the related option)
multiplied by the number of shares with respect to which the right was
exercised.
Restricted Stock. A restricted award entitles the recipient to receive
shares of Common Stock subject to such conditions and restrictions as the
Committee may determine. Upon the satisfaction of any conditions prescribed by
the Compensation Committee, the restrictions applicable to the Restricted Stock
will lapse and the shares will be deemed vested in the participant.
Performance Share Awards. Upon the satisfaction of any performance goals
prescribed by the Compensation Committee, the recipient of a Performance Share
Award shall receive shares of Common Stock. A recipient of Performance Shares
will have the rights of a shareholder only with respect to shares actually
received by the participant and not with respect to shares that are subject to
the satisfaction of performance goals.
Dividend Equivalent Rights. Dividend Equivalent Rights entitle the
recipient to receive credits for dividends that would be paid if the grantee had
held specified shares of the Common Stock. Dividend equivalents credited under
the Plan may be paid currently or be deemed to be reinvested in additional
shares of Common Stock, which may thereafter accrue additional dividend
equivalents at fair market value at the time of the deemed reinvestment or on
the terms then governing the reinvestment of dividends under the Company's
dividend reinvestment plan, if any.
Other Option Terms. The Compensation Committee has authority to determine
the terms of options granted under the Amended Option Plan; provided, however,
that no Incentive Option or Nonqualified Option may be granted with an exercise
price that is less than the fair market value of the shares of Common Stock at
the date of the option grant. The Amended Option Plan provides that such fair
market value will be deemed to be the last reported sale price of the shares of
Common Stock on the principal stock exchange on which the shares of Common Stock
are listed. Options may be exercised subject to such vesting schedule as the
Compensation Committee determines, except that no option shall be exercisable
after the tenth anniversary of the date of an Incentive Option. In the event of
a Change in Control, as defined in the Amended Option Plan, all outstanding
Stock Options and Stock Appreciation Rights shall automatically become
exercisable and vested in full and all Restricted Stock Awards and Performance
Share Awards shall be subject to such terms as provided by the Compensation
Committee. No option granted under the Amended Option Plan is transferable by
the optionee other than by will or applicable law of intestate succession, and
options may be exercised during the optionee's lifetime only by the optionee or
his or her guardian or legal representative. Options granted under the Plan
expire on the tenth anniversary of the date of grant.
Options under the Amended Option Plan may be exercised for cash or, if
permitted by the Compensation Committee, by transfer to the Company of shares of
Common Stock having a fair market value equivalent to the option exercise price
of the shares being purchased, or by compliance with certain provisions pursuant
to which a securities broker delivers the purchase price for the shares to the
Company on behalf of the Option holder. To qualify as Incentive Options, options
must meet additional federal tax requirements, including limits on the value of
shares of Common Stock subject to Incentive Options which first become
exercisable in any one year.
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Adjustments for Stock Dividends, Mergers, etc. The Amended Option Plan
authorizes the Compensation Committee to make appropriate adjustments to the
number of shares of Common Stock that are subject to the Amended Option Pan and
of any outstanding option to reflect stock dividends, stock splits and similar
events. In the event of a merger, liquidation or similar event, the Compensation
Committee in its discretion may provide for appropriate substitution or
adjustments.
Tax Withholdings. Optionees under the Amended Option Plan are responsible
for the payment of any federal, state or local taxes that the Company is
required by law to withhold upon any option exercise. Optionees may elect to
have such tax withholding obligations satisfied either by authorizing the
Company to withhold shares of Common Stock to be issued pursuant to an option
exercise or by transferring to the Company shares of Common Stock having a value
equal to the amount of such taxes. Such an election is subject to certain
limitations for participants subject to the requirements of Section 16(b) of the
Exchange Act.
Tax Aspects Under the U.S. Internal Revenue Code
The following is a summary of the principal federal income tax
consequences of transactions under the Amended Option Plan. It does not describe
all federal tax consequences under the Amended Option Plan, nor does it describe
state or local tax consequences.
Incentive Options. No taxable income is generally realized by the
optionee upon the grant or exercise of an Incentive Option. If shares of Common
Stock issued to an optionee pursuant to the exercise of an Incentive Option are
not sold or transferred within two years from the date of grant or within one
year after the date of exercise, then (1) upon sale of such shares, any amount
realized in excess of the option price (the amount paid for the shares) will be
taxed to the optionee as a long-term capital gain and any loss sustained will be
a long-term capital loss, and (2) there will be no deduction for the Company for
federal income tax purposes. The exercise of an Incentive Option will give rise
to an item of tax preference that may result in alternative minimum tax
liability for the optionee.
If shares of Common Stock acquired upon the exercise of an Incentive
Option are disposed of prior to the expiration of the two-year and one-year
holding periods described above (a "disqualifying disposition"), generally (1)
the optionee will realize ordinary income in the year of disposition in an
amount equal to the excess (if any) of the fair market value of the shares of
Common Stock at exercise (or, if less, the amount realized on a sale of such
shares of Common Stock) over the option price thereof, and (2) the Company will
be entitled to deduct such amount. Special rules will apply where the optionee
is subject to Section 16(b) of the Exchange Act or where all or a portion of the
exercise price of the Incentive Option is paid by tendering shares of Common
Stock.
If an Incentive Option is exercised at a time when it no longer qualifies
for the tax treatment described above, the option is treated as a Nonqualified
Option. Generally, an Incentive Option will not be eligible for the tax
treatment described above if it is exercised more than three months following
termination of employment (or six months or one year in the case of termination
of employment by reason of death or disability, respectively).
Nonqualified Options. With respect to Nonqualified Options under the
Amended Option Plan, no income is realized by the optionee at the time the
option is granted. Generally, (1) at exercise, ordinary income is realized by
the optionee in an amount equal to the difference between the option price and
the fair market value of the shares of Common Stock on the date of exercise, and
the Company receives a tax deduction for the same amount, and (2) at
disposition, appreciation or depreciation after the date of exercise is treated
as either short-term or long-term capital gain or loss depending on how long the
shares of Common Stock have been held. Special rules will apply where the
optionee is subject to Section 16(b) of the Exchange Act or where all or a
portion of the exercise price of the Nonqualified Option is paid by tendering
shares of Common Stock.
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Recent Tax Law Changes. As a result of Section 162(m) of the Code, the
Company's deduction for Nonqualified Options and other awards under the Amended
Option Plan may be limited to the extent that a "covered employee" (i.e., the
Chief Executive Officer or other executive officer whose compensation is
required to be reported in the summary compensation table of this proxy
statement) receives compensation in excess of $1,000,000 in such taxable year.
Grants Under the Amended Option Plan
The following table discloses the benefits granted under the Plan in 1997
pursuant to a vote of the Board of Directors on June 30, 1997.
BioSafe International, Inc.
1995 Stock Option and Incentive Plan
Number of Option Shares
Name and Position to be Granted in 1997
Philip Strauss, Chairman,
President and CEO............................. 2,614,294
Robert Rivkin, Vice President,
CFO, Secretary and Treasurer.................. 2,614,294
Joseph E. Motzkin............................. 96,500
Executive Group............................... 5,325,088
Non-Executive Director Group.................. 40,000
Non-Executive Officer
Employee Group ........................ 426,000
- ---------------------
The Board of Directors recommends a vote FOR this Proposal.
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PROPOSAL 4
APPROVAL OF AMENDMENT TO 1995 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
On June 30, 1997, the Board of Directors adopted, subject to stockholder
approval, to amend the 1995 Stock Option Plan for Non-Employee Directors (the
"Amended Non-Employee Directors Plan"). At this meeting, the stockholders are
being asked to vote to approve the Amended Non-Employee Directors Plan. The
Board believes that the Amended Non-Employee Directors Plan is an important
element of the Company's strategy for attracting and retaining highly-qualified
directors with specialized experience in the Company's principal business area
to provide leadership and support for the Company.
Summary of Plan
Under the Director Plan, directors are entitled to receive a
Non-Qualified Option to purchase 10,000 shares of the Company's Common Stock for
each year of service as a director of the Company. The Amended Non-Employee
Directors Plan will entitle each director to receive a one-time grant of a
Non-Qualified Option to purchase 20,000 shares of the Company's Common Stock
upon his or her election to the Board of Directors, which option shall vest
immediately with respect to all of the underlying shares. This grant will apply
to the directors elected on June 30, 1997 and August 20, 1997. Directors will
still be entitled to receive a Non-Qualified Option to purchase 10,000 shares of
the Company's Common Stock for each calendar year of service as a director of
the Company. Each such option is subject to vesting at a rate of 2,500 shares
for each year that the holder remains a director of the Company, such vesting to
take place at the end of each calendar year. In the case of a person who first
becomes a director during a calendar year, such person will receive, for the
year in which he or she first becomes a director, an option to purchase a pro
rata portion of 10,000 shares of Common Stock based on the number of days
remaining in the calendar year following the date on which he or she first
became a director, subject to annual vesting in four annual increments as
described above. All options are exercisable at a price equal to the market
value of the Company's Common Stock on the grant date, which is the first
business day of the calendar year if the optionee is a director on such date, or
is otherwise the date on which the optionee becomes a director. Any director who
fails to attend three regularly scheduled meetings of the Board in a calendar
year will forfeit vesting of his or her option for the year.
Restrictions on transfer of Options granted under the Amended
Non-Employee Directors' Plan, provisions regarding their exercise, and
provisions for adjustment to reflect stock dividends, stock splits and similar
events are equivalent to those provided under the Amended Option Plan, and the
tax consequences of such options are as described above with respect to
Non-Qualified Options. The Amended Non-Employee Directors' Plan provides that
the provisions establishing the amount, price and timing of option grants under
the Amended Non-Employee Directors' Plan shall not be amended more than once
every six months, other than to comport with changes in the Code, the Employee
Retirement Income Security Act, or the rules thereunder. Options granted under
the Amended Non-Employee Directors' Plan are treated as non-qualified options
for federal income tax purposes.
The table below shows the aggregate number of options that will be
granted to Non-Executive Directors (as a group) by the Company in 1997, assuming
adoption of the Amended Non-Employee Directors. Each option granted has an
exercise price equal to 100% of the fair market value.
BioSafe International, Inc. Amended 1995 Stock Option Plan
for Non-Employee Directors
Number of
Option Shares to be
Name of Group Granted in 1997
- ---------------------------- -------------------
Non-Executive Director Group 40,000
The Board of Directors recommends a vote FOR this proposal.
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PROPOSAL 5
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The accounting firm of KPMG Peat Marwick LLP has served as the
Company's independent auditors since March 29, 1995. On June 30, 1997, the Board
of Directors voted to appoint KPMG Peat Marwick LLP as the Company's independent
auditors for the current fiscal year. The Board of Directors recommends the
ratification of this selection. A representative of KPMG Peat Marwick LLP will
be present at the Annual Meeting, will be given the opportunity to make a
statement if he or she so desires and will be available to respond to
appropriate questions.
The Board of Directors recommends a vote FOR this Proposal.
OTHER MATTERS
Solicitation of Proxies
The cost of solicitation of proxies in the form enclosed herewith will
be borne by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.
Stockholder Proposals
A stockholder proposal submitted pursuant to Exchange Act Rule 14a-8
for inclusion in the Company's proxy statement and form of proxy for the 1998
Annual Meeting of Stockholders must be received by the Company by May 22, 1998;
provided, however, that if the scheduled date of 1998 Annual Meeting of
Stockholders is changed by more than 30 calendar days from October 24,
stockholder proposals must be received by the Company a reasonable time before
the proxy solicitation for the 1998 Annual Meeting of Stockholders. Such a
proposal must also comply with the requirements as to form and substance
established by the Securities and Exchange Commission for such a proposal to be
included in the proxy statement and form of proxy. Any such proposal should be
mailed to: Secretary, BioSafe International, Inc., 10 Fawcett Street, Cambridge,
Massachusetts 02138.
Other Matters
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO THE
COMPANY. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY
CARD TODAY.
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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
OF BIOSAFE INTERNATIONAL, INC.
INTO WASTE SYSTEMS INTERNATIONAL, INC.
AGREEMENT AND PLAN OF MERGER made this ___ day of _______, 1997, by and
between BioSafe International, Inc., a corporation organized in and governed by
the laws of the State of Nevada (the "Nevada Company") and Waste Systems
International, Inc. (the "Delaware Company"), a corporation organized in and
governed by the laws of the State of Delaware, each with principal executive
offices at 10 Fawcett Street, Cambridge, MA 02138.
WHEREAS, the Board of Directors of the Nevada Company and the Delaware
Company, respectively, deem it advisable and generally to the advantage and
welfare of the two corporate parties and the shareholders of each of the parties
that the Nevada Company merge with the Delaware Company under and pursuant to
the provisions of the Business Corporation Law of State of Nevada and of the
General Corporation Law of the State of Delaware.
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements herein contained and of the mutual benefits hereby provided, it is
agreed by and between the parties hereto as follows:
1. MERGER. The Nevada Company shall be and it hereby
is merged into the Delaware Company.
2. EFFECTIVE DATE. This Agreement and Plan of Merger
shall become effective immediately upon compliance with the laws of the States
of Nevada and Delaware, the time of such effectiveness being hereinafter called
the Effective Date.
3. SURVIVING CORPORATION. The Delaware Company shall
survive the merger herein contemplated and shall continue to be governed by the
laws of the State of Delaware and the separate corporate existence of the Nevada
Company shall cease forthwith upon the Effective Date.
4. CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of the Delaware Company as it exists on the Effective Date shall
be the Certificate of Incorporation of the Delaware Company following the
Effective Date (the "Certificate") unless and until the same shall be amended or
repealed in accordance with the provisions thereof. Such Certificate shall
constitute the Certificate of Incorporation of the Delaware Company separate and
apart from this Agreement of Merger and may be separately certified as the
Certificate of Incorporation of the Delaware Company.
<PAGE>
5. BYLAWS. The Bylaws of the Delaware Company as they
exist on the Effective Date shall be the Bylaws of the Delaware Company
following the Effective Date unless and until the same shall be amended or
repealed in accordance with theprovisions thereof.
6. BOARD OF DIRECTORS AND OFFICERS. The members of the Board
of Directors and the officers of the Delaware Company immediately after the
Effective Date shall be those persons who were the members of the Board of
Directors and the officers, respectively, of the Delaware Company on the
Effective Date, and such persons shall serve in such offices, respectively, for
the terms provided by law, in the Bylaws, in the Certificate or until their
respective successors are elected and qualified.
7. CANCELLATION OF SECURITIES. The securities of the
Delaware Company in existence on the Effective Date all of which are held
beneficially and of record by the Nevada Company, shall be canceled and shall
cease to be issued and outstanding shares on and after the Effective Date.
8. CONVERSION OF OUTSTANDING SECURITIES OF THE NEVADA COMPANY.
Upon the Effective Date, each outstanding share of common stock, $.001 par
value, of the Nevada Company ("Nevada Common Stock"), will be automatically
converted into one share of the Nevada Company common stock, $.001 par value,
of the Delaware Company ("Delaware Common Stock"); each outstanding share of
Series A Preferred stock, $.001 par value per share, of the Nevada Company will
be automatically converted into one share of the Delaware Company Series A
Preferred Stock, $.001 par value per share; each outstanding convertible
debenture of the Nevada Company will automatically convert into a convertible
debenture of the Delaware Company, having the same face amount and
identical terms and convertible into the same number of shares of Delaware
Common Stock as the number of shares of Nevada Common Stock into which it was
formerly convertible; and each outstanding warrant or option of the Nevada
Company to purchase a number of shares of Nevada Common Stock will
automatically convert into a warrant or option of the Delaware Company to
purchase the same number of shares of Delaware Common Stock. The conversion of
each of the Nevada Company secutities into its corresponding Delaware Company
security shall occur automatically upon the Effective Date without necessity of
further action on the part of any person. Each stock certificate representing
theretofore issued and outstanding shares of Nevada Common Stock will represent
the same number of shares of Delaware Common Stock and shall be
exchangeable for a stock certificate of the Delaware Company representing
such number of shares of Delaware Common Stock in accordance with such
procedures as may be established by the Delaware Company.
9. RIGHTS AND LIABILITIES OF DELAWARE COMPANY. At and after
the Effective Date, the Delaware Company shall succeed to and possess, without
further act or deed, all of the estate, rights, privileges, powers, and
franchises, both public and private, and all of the property, real, personal,
and mixed, of each of the parties hereto; all debts due to the Nevada Company
shall be vested in the Delaware Company; all claims, demands, property, rights,
privileges, powers and franchises and every other interest of either of the
parties hereto shall be as effectively the property of the Delaware Company as
they were of the respective parties hereto; the title to any real estate vested
by deed or otherwise in the Nevada Company shall not revert or be in any way
impaired by reason of the merger, but shall be vested in the Nevada Company; all
rights of creditors and all liens upon any property of either of the parties
hereto shall be preserved unimpaired, limited in lien to the property affected
by such lien at the Effective Date; all debts, liabilities, and duties of the
respective parties hereto shall thenceforth attach to the Delaware Company and
may be enforced against it to the same extent as if such debts, liabilities, and
duties had been incurred or contracted by it; and the Delaware Company shall
indemnify and hold harmless the officers and directors of each of the parties
hereto against all such debts, liabilities and duties and against all claims and
demands arising out of the merger.
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<PAGE>
10. AMENDMENT AND ABANDONMENT. Subject to applicable law, at any
time prior to the Effective Date, the directors of the Nevada Company and the
directors of the Delaware Company may amend or abandon this Agreement; provided
however, that the principal terms may not be amended without stockholder
approval.
IN WITNESS WHEREOF, each of the corporate parties hereto has caused
this Agreement and Plan of Merger to be executed.
WASTE SYSTEMS INTERNATIONAL, INC.
By: Philip Strauss
Chairman, President and
Chief Executive Officer
BIOSAFE INTERNATIONAL, INC.
By: Philip Strauss
Chairman, President and
Chief Executive Officer
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<PAGE>
BYLAWS
OF
WASTE SYSTEMS INTERNATIONAL, INC.
ARTICLE I
Stockholders
SECTION 1. Annual Meeting. The annual meeting of stockholders shall be
held at the hour, date and place within or without the United States which is
fixed by the majority of the Board of Directors, the Chairman of the Board, if
one is elected, or the President, which time, date and place may subsequently be
changed at any time by vote of the Board of Directors. If no annual meeting has
been held for a period of thirteen months after the Corporation's last annual
meeting of stockholders, a special meeting in lieu thereof may be held, and such
special meeting shall have, for the purposes of these Bylaws or otherwise, all
the force and effect of an annual meeting. Any and all references hereafter in
these Bylaws to an annual meeting or annual meetings also shall be deemed to
refer to any special meeting(s) in lieu thereof.
SECTION 2. Matters to be Considered at Annual Meetings. At any annual
meeting of stockholders or any special meeting in lieu of annual meeting of
stockholders (the "Annual Meeting"), only such business shall be conducted, and
only such proposals shall be acted upon, as shall have been properly brought
before such Annual Meeting. To be considered as properly brought before an
Annual Meeting, business must be: (a) specified in the notice of meeting, (b)
otherwise properly brought before the meeting by, or at the direction of, the
Board of Directors, or (c) otherwise properly brought before the meeting by any
holder of record (both as of the time notice of such proposal is given by the
stockholder as set forth below and as of the record date for the Annual Meeting
in question) of any shares of capital stock of the Corporation entitled to vote
at such Annual Meeting who complies with the requirements set forth in this
Section 2.
In addition to any other applicable requirements, for business to be
properly brought before an Annual Meeting by a stockholder of record of any
shares of capital stock entitled to vote at such Annual Meeting, such
stockholder shall: (i) give timely notice as required by this Section 2 to the
Secretary of the Corporation and (ii) be present at such meeting, either in
person or by a representative. For all Annual Meetings, a stockholder's notice
shall be timely if delivered to, or mailed to and received by, the Corporation
at its principal executive office not less than 75 days nor more than 120 days
prior to the anniversary date of the immediately preceding Annual Meeting (the
"Anniversary Date"); provided, however, that in the event the Annual Meeting is
scheduled to be held on a date more than 30 days before the Anniversary Date or
more than 60 days after the Anniversary Date, a stockholder's notice shall be
timely if delivered to, or mailed to and received by, the Corporation at its
principal executive office not later than the close of business on the later of
(A) the 75th day prior to the scheduled date of such Annual Meeting or (B) the
15th day following the day on which public announcement of the date of such
Annual Meeting is first made by the Corporation.
<PAGE>
For purposes of these Bylaws, "public announcement" shall mean: (i)
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service, (ii) a report or other document filed
publicly with the Securities and Exchange Commission (including, without
limitation, a Form 8-K), or (iii) a letter or report sent to stockholders of
record of the Corporation at the time of the mailing of such letter or report.
A stockholder's notice to the Secretary shall set forth as to each
matter proposed to be brought before an Annual Meeting: (i) a brief description
of the business the stockholder desires to bring before such Annual Meeting and
the reasons for conducting such business at such Annual Meeting, (ii) the name
and address, as they appear on the Corporation's stock transfer books, of the
stockholder proposing such business, (iii) the class and number of shares of the
Corporation's capital stock beneficially owned by the stockholder proposing such
business, (iv) the names and addresses of the beneficial owners, if any, of any
capital stock of the Corporation registered in such stockholder's name on such
books, and the class and number of shares of the Corporation's capital stock
beneficially owned by such beneficial owners, (v) the names and addresses of
other stockholders known by the stockholder proposing such business to support
such proposal, and the class and number of shares of the Corporation's capital
stock beneficially owned by such other stockholders, and (vi) any material
interest of the stockholder proposing to bring such business before such meeting
(or any other stockholders known to be supporting such proposal) in such
proposal.
If the Board of Directors or a designated committee thereof determines
that any stockholder proposal was not made in a timely fashion in accordance
with the provisions of this Section 2 or that the information provided in a
stockholder's notice does not satisfy the information requirements of this
Section 2 in any material respect, such proposal shall not be presented for
action at the Annual Meeting in question. If neither the Board of Directors nor
such committee makes a determination as to the validity of any stockholder
proposal in the manner set forth above, the presiding officer of the Annual
Meeting shall determine whether the stockholder proposal was made in accordance
with the terms of this Section 2. If the presiding officer determines that any
stockholder proposal was not made in a timely fashion in accordance with the
provisions of this Section 2 or that the information provided in a stockholder's
notice does not satisfy the information requirements of this Section 2 in any
material respect, such proposal shall not be presented for action at the Annual
Meeting in question. If the Board of Directors, a designated committee thereof
or the presiding officer determines that a stockholder proposal was made in
accordance with the requirements of this Section 2, the presiding officer shall
so declare at the Annual Meeting and ballots shall be provided for use at the
meeting with respect to such proposal.
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<PAGE>
Notwithstanding the foregoing provisions of this Bylaw, a stockholder
shall also comply with all applicable requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder with respect to the matters set forth in this By-Law, and nothing in
this By-Law shall be deemed to affect any rights of stockholders to request
inclusion of proposals in the Corporation's proxy statement pursuant to Rule
14a-8 under the Exchange Act.
SECTION 3. Special Meetings. Except as otherwise required by law and
subject to the rights, if any, of the holders of any series of Preferred Stock
of the Corporation, special meetings of the stockholders of the Corporation may
be called only by the Board of Directors pursuant to a resolution approved by
the affirmative vote of a majority of the Directors then in office.
SECTION 4. Matters to be Considered at Special Meetings. Only those
matters set forth in the notice of the special meeting may be considered or
acted upon at a special meeting of stockholders of the Corporation, unless
otherwise provided by law.
SECTION 5. Notice of Meetings; Adjournments. A written notice of all
Annual Meetings stating the hour, date and place of such Annual Meetings shall
be given by the Secretary or an Assistant Secretary (or other person authorized
by these Bylaws or by law) not less than 10 days nor more than 60 days before
the Annual Meeting, to each stockholder entitled to vote thereat and to each
stockholder who, by law or under the Amended and Restated Certificate of
Incorporation of the Corporation (as the same may hereafter be amended and/or
restated, the "Certificate") or under these Bylaws, is entitled to such notice,
by delivering such notice to him or by mailing it, postage prepaid, addressed to
such stockholder at the address of such stockholder as it appears on the
Corporation's stock transfer books. Such notice shall be deemed to be delivered
when hand delivered to such address or deposited in the mail so addressed, with
postage prepaid.
Notice of all special meetings of stockholders shall be given in the
same manner as provided for Annual Meetings, except that the written notice of
all special meetings shall state the purpose or purposes for which the meeting
has been called.
Notice of an Annual Meeting or special meeting of stockholders need not
be given to a stockholder if a written waiver of notice is signed before or
after such meeting by such stockholder or if such stockholder attends such
meeting, unless such attendance was for the express purpose of objecting at the
beginning of the meeting to the transaction of any business because the meeting
was not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any Annual Meeting or special meeting of stockholders need
be specified in any written waiver of notice.
The Board of Directors may postpone and reschedule any previously
scheduled Annual Meeting or special meeting of stockholders and any record date
with respect thereto, regardless of whether any notice or public disclosure with
3
<PAGE>
respect to any such meeting has been sent or made pursuant to Section 2 of this
Article I or Section 3 of Article II hereof or otherwise. In no event shall the
public announcement of an adjournment, postponement or rescheduling of any
previously scheduled meeting of stockholders commence a new time period for the
giving of a stockholder's notice under Section 2 of Article I and Section 3 of
Article II of these Bylaws.
When any meeting is convened, the presiding officer may adjourn the
meeting if (a) no quorum is present for the transaction of business, (b) the
Board of Directors determines that adjournment is necessary or appropriate to
enable the stockholders to consider fully information which the Board of
Directors determines has not been made sufficiently or timely available to
stockholders, or (c) the Board of Directors determines that adjournment is
otherwise in the best interests of the Corporation. When any Annual Meeting or
special meeting of stockholders is adjourned to another hour, date or place,
notice need not be given of the adjourned meeting other than an announcement at
the meeting at which the adjournment is taken of the hour, date and place to
which the meeting is adjourned; provided, however, that if the adjournment is
for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned meeting, notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote thereat and each stockholder who, by
law or under the Certificate or these Bylaws, is entitled to such notice.
SECTION 6. Quorum. The holders of shares of voting stock representing a
majority of the voting power of the outstanding shares of voting stock issued,
outstanding and entitled to vote at a meeting of stockholders, represented in
person or by proxy at such meeting, shall constitute a quorum; but if less than
a quorum is present at a meeting, the holders of voting stock representing a
majority of the voting power present at the meeting or the presiding officer may
adjourn the meeting from time to time, and the meeting may be held as adjourned
without further notice, except as provided in Section 5 of this Article I. At
such adjourned meeting at which a quorum is present, any business may be
transacted which might have been transacted at the meeting as originally
noticed. The stockholders present at a duly constituted meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
SECTION 7. Voting and Proxies. Stockholders shall have one vote for
each share of stock entitled to vote owned by them of record according to the
books of the Corporation, unless otherwise provided by law or by the
Certificate. Stockholders may vote either in person or by written proxy, but no
proxy shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period. Proxies shall be filed with the Secretary of
the meeting before being voted. Except as otherwise limited therein or as
otherwise provided by law, proxies shall entitle the persons authorized thereby
to vote at any adjournment of such meeting, but they shall not be valid after
final adjournment of such meeting. A proxy with respect to stock held in the
name of two or more persons shall be valid if executed by or on behalf of any
one of them unless at or prior to the exercise of the proxy the Corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed
valid, and the burden of proving invalidity shall rest on the challenger.
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SECTION 8. Action at Meeting. When a quorum is present, any matter
before any meeting of stockholders shall be decided by the vote of a majority of
the voting power of shares of voting stock, present in person or represented by
proxy at such meeting and entitled to vote on such matter, except where a larger
vote is required by law, by the Certificate or by these Bylaws. Any election by
stockholders shall be determined by a plurality of the votes cast, except where
a larger vote is required by law, by the Certificate or by these Bylaws. The
Corporation shall not directly or indirectly vote any shares of its own stock;
provided, however, that the Corporation may vote shares which it holds in a
fiduciary capacity to the extent permitted by law.
SECTION 9. Action by Consent. Any action required or permitted to be
taken by the Stockholders of the Corporation at any annual or special meeting of
stockholders of the Corporation must be effected at a duly-called Annual or
Special Meeting of Stockholders and may not be taken or effected by a written
consent of stockholders in lieu thereof.
SECTION 10. Stockholder Lists. The Secretary or an Assistant Secretary
(or the Corporation's transfer agent or other person authorized by these Bylaws
or by law) shall prepare and make, at least 10 days before every Annual Meeting
or special meeting of stockholders, a complete list of the stockholders entitled
to vote at the meeting, arranged in alphabetical order, and showing the address
of each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least 10 days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or, if not so specified, at the place where the meeting is to be
held. The list shall also be produced and kept at the hour, date and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
SECTION 11. Presiding Officer. The Chairman of the Board, if one is
elected, or if not elected or in his or her absence, the President, shall
preside at all Annual Meetings or special meetings of stockholders and shall
have the power, among other things, to adjourn such meeting at any time and from
time to time, subject to Sections 5 and 6 of this Article I. The order of
business and all other matters of procedure at any meeting of the stockholders
shall be determined by the presiding officer.
SECTION 12. Voting Procedures and Inspectors of Elections. The
Corporation shall, in advance of any meeting of stockholders, appoint one or
more inspectors to act at the meeting and make a written report thereof. The
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Corporation may designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is able to act at a
meeting of stockholders, the presiding officer shall appoint one or more
inspectors to act at the meeting. Any inspector may, but need not, be an
officer, employee or agent of the Corporation. Each inspector, before entering
upon the discharge of his or her duties, shall take and sign an oath faithfully
to execute the duties of inspector with strict impartiality and according to the
best of his or her ability. The inspectors shall perform such duties as are
required by the General Corporation Law of the State of Delaware, as amended
from time to time (the "DGCL"), including the counting of all votes and ballots.
The inspectors may appoint or retain other persons or entities to assist the
inspectors in the performance of the duties of the inspectors. The presiding
officer may review all determinations made by the inspector(s), and in so doing
the presiding officer shall be entitled to exercise his or her sole judgment and
discretion and he or she shall not be bound by any determinations made by the
inspector(s). All determinations by the inspector(s) and, if applicable, the
presiding officer shall be subject to further review by any court of competent
jurisdiction.
ARTICLE II
Directors
SECTION 1. Powers. The business and affairs of the Corporation shall
be managed by or under the direction of the Board of Directors except as
otherwise provided by the Certificate or required by law.
SECTION 2. Number and Terms. The number of Directors of the Corporation
shall be fixed by resolution duly adopted from time to time by the Board of
Directors. The Directors shall hold office in the manner provided in the
Certificate.
SECTION 3. Director Nominations. Nominations of candidates for election
as directors of the Corporation at any Annual Meeting may be made only (a) by,
or at the direction of, a majority of the Board of Directors or (b) by any
holder of record (both as of the time notice of such nomination is given by the
stockholder as set forth below and as of the record date for the Annual Meeting
in question) of any shares of the capital stock of the Corporation entitled to
vote at such Annual Meeting who complies with the timing, informational and
other requirements set forth in this Section 3. Any stockholder who has complied
with the timing, informational and other requirements set forth in this Section
3 and who seeks to make such a nomination, or his, her or its representative,
must be present in person at the Annual Meeting. Only persons nominated in
accordance with the procedures set forth in this Section 3 shall be eligible for
election as directors at an Annual Meeting.
Nominations, other than those made by, or at the direction of, the
Board of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation as set forth in this Section 3. For the first
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Annual Meeting following the initial public offering of common stock of the
Corporation, a stockholder's notice shall be timely if delivered to, or mailed
to and received by, the Corporation at its principal executive office not later
than the close of business on the later of (A) the 75th day prior to the
scheduled date of such Annual Meeting or (B) the 15th day following the day on
which public announcement of the date of such Annual Meeting is first made by
the Corporation. For all subsequent Annual Meetings, a stockholder's notice
shall be timely if delivered to, or mailed to and received by, the Corporation
at its principal executive office not less than 75 days nor more than 120 days
prior to the Anniversary Date; provided, however, that in the event the Annual
Meeting is scheduled to be held on a date more than 30 days before the
Anniversary Date or more than 60 days after the Anniversary Date, a
stockholder's notice shall be timely if delivered to, or mailed and received by,
the Corporation at its principal executive office not later than the close of
business on the later of (i) the 75th day prior to the scheduled date of such
Annual Meeting or (ii) the 15th day following the day on which public
announcement of the date of such Annual Meeting is first made by the
Corporation.
A stockholder's notice to the Secretary shall set forth as to each
person whom the stockholder proposes to nominate for election or re-election as
a director: (i) the name, age, business address and residence address of such
person, (ii) the principal occupation or employment of such person, (iii) the
class and number of shares of the Corporation's capital stock which are
beneficially owned by such person on the date of such stockholder notice, and
(iv) the consent of each nominee to serve as a director if elected. A
stockholder's notice to the Secretary shall further set forth as to the
stockholder giving such notice: (i) the name and address, as they appear on the
Corporation's stock transfer books, of such stockholder and of the beneficial
owners (if any) of the Corporation's capital stock registered in such
stockholder's name and the name and address of other stockholders known by such
stockholder to be supporting such nominee(s), (ii) the class and number of
shares of the Corporation's capital stock which are held of record, beneficially
owned or represented by proxy by such stockholder and by any other stockholders
known by such stockholder to be supporting such nominee(s) on the record date
for the Annual Meeting in question (if such date shall then have been made
publicly available) and on the date of such stockholder's notice, and (iii) a
description of all arrangements or understandings between such stockholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by such
stockholder.
If the Board of Directors or a designated committee thereof determines
that any stockholder nomination was not made in accordance with the terms of
this Section 3 or that the information provided in a stockholder's notice does
not satisfy the informational requirements of this Section 3 in any material
respect, then such nomination shall not be considered at the Annual Meeting in
question. If neither the Board of Directors nor such committee makes a
determination as to whether a nomination was made in accordance with the
provisions of this Section 3, the presiding officer of the Annual Meeting shall
determine whether a nomination was made in accordance with such provisions. If
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the presiding officer determines that any stockholder nomination was not made in
accordance with the terms of this Section 3 or that the information provided in
a stockholder's notice does not satisfy the informational requirements of this
Section 3 in any material respect, then such nomination shall not be considered
at the Annual Meeting in question. If the Board of Directors, a designated
committee thereof or the presiding officer determines that a nomination was made
in accordance with the terms of this Section 3, the presiding officer shall so
declare at the Annual Meeting and ballots shall be provided for use at the
meeting with respect to such nominee.
Notwithstanding anything to the contrary in the second sentence of the
second paragraph of this Section 3, in the event that the number of directors to
be elected to the Board of Directors of the Corporation is increased and there
is no public announcement by the Corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors at least 75
days prior to the Anniversary Date, a stockholder's notice required by this
Section 3 shall also be considered timely, but only with respect to nominees for
any new positions created by such increase, if such notice shall be delivered
to, or mailed to and received by, the Corporation at its principal executive
office not later than the close of business on the 15th day following the day on
which such public announcement is first made by the Corporation.
No person shall be elected by the stockholders as a Director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section. Election of Directors at the annual meeting need not be by written
ballot, unless otherwise provided by the Board of Directors or presiding officer
at such annual meeting. If written ballots are to be used, ballots bearing the
names of all the persons who have been nominated for election as Directors at
the annual meeting in accordance with the procedures set forth in this Section
shall be provided for use at the annual meeting.
SECTION 4. Qualification. No Director need be a stockholder of the
Corporation.
SECTION 5. Vacancies. Subject to the rights, if any, of the holders of
any series of Preferred Stock of the Corporation to elect Directors and to fill
vacancies in the Board of Directors relating thereto, any and all vacancies in
the Board of Directors, however occurring, including, without limitation, by
reason of an increase in size of the Board of Directors, or the death,
resignation, disqualification or removal of a Director, shall be filled solely
by the affirmative vote of a majority of the remaining Directors then in office,
even if less than a quorum of the Board of Directors. Any Director appointed in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of Directors in which the new directorship was
created or the vacancy occurred and until such Director's successor shall have
been duly elected and qualified or until his or her earlier resignation or
removal. Subject to the rights, if any, of the holders of any series of
Preferred Stock of the Corporation to elect Directors, when the number of
Directors is increased or decreased, the Board of Directors shall determine the
class or classes to which the increased or decreased number of Directors shall
be apportioned; provided, however, that no decrease in the number of Directors
shall shorten the term of any incumbent Director. In the event of a vacancy in
the Board of Directors, the remaining Directors, except as otherwise provided by
law, may exercise the powers of the full Board of Directors until the vacancy is
filled.
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SECTION 6. Removal. Directors may be removed from office in the
manner provided in the Certificate.
SECTION 7. Resignation. A Director may resign at any time by giving
written notice to the Chairman of the Board, if one is elected, the President
or the Secretary. A resignation shall be effective upon receipt, unless the
resignation otherwise provides.
SECTION 8. Regular Meetings. The regular annual meeting of the Board of
Directors shall be held, without notice other than this By-Law, on the same date
and at the same place as the Annual Meeting following the close of such Annual
Meeting of Stockholders. Other regular meetings of the Board of Directors may be
held at such hour, date and place as the Board of Directors may by resolution
from time to time determine without notice other than such resolution.
SECTION 9. Special Meetings. Special meetings of the Board of Directors
may be called, orally or in writing, by or at the request of a majority of the
Directors, the Chairman of the Board, if one is elected, or the President. The
person calling any such special meeting of the Board of Directors may fix the
hour, date and place thereof.
SECTION 10. Notice of Meetings. Notice of the hour, date and place of
all special meetings of the Board of Directors shall be given to each Director
by the Secretary or an Assistant Secretary, or in case of the death, absence,
incapacity or refusal of such persons, by the Chairman of the Board, if one is
elected, or the President or such other officer designated by the Chairman of
the Board, if one is elected, or the President. Notice of any special meeting of
the Board of Directors shall be given to each Director in person, by telephone,
or by telex, telecopy, telegram, or other written form of electronic
communication, sent to his or her business or home address, at least 24 hours in
advance of the meeting, or by written notice mailed to his or her business or
home address, at least 48 hours in advance of the meeting. Such notice shall be
deemed to be delivered when hand delivered to such address, read to such
Director by telephone, deposited in the mail so addressed, with postage thereon
prepaid if mailed, dispatched or transmitted if telexed or telecopied, or when
delivered to the telegraph company if sent by telegram.
When any Board of Directors meeting, either regular or special, is
adjourned for 30 days or more, notice of the adjourned meeting shall be given as
in the case of an original meeting. It shall not be necessary to give any notice
of the hour, date or place of any meeting adjourned for less than 30 days or of
the business to be transacted thereat, other than an announcement at the meeting
at which such adjournment is taken of the hour, date and place to which the
meeting is adjourned.
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A written waiver of notice signed before or after a meeting by a
Director and filed with the records of the meeting shall be deemed to be
equivalent to notice of the meeting. The attendance of a Director at a meeting
shall constitute a waiver of notice of such meeting, except where a Director
attends a meeting for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because such meeting is not lawfully
called or convened. Except as otherwise required by law, by the Certificate or
by these Bylaws, neither the business to be transacted at, nor the purpose of,
any meeting of the Board of Directors need be specified in the notice or waiver
of notice of such meeting.
SECTION 11. Quorum. At any meeting of the Board of Directors, a
majority of the Directors then in office shall constitute a quorum for the
transaction of business, but if less than a quorum is present at a meeting, a
majority of the Directors present may adjourn the meeting from time to time, and
the meeting may be held as adjourned without further notice, except as provided
in Section 10 of this Article II. Any business which might have been transacted
at the meeting as originally noticed may be transacted at such adjourned meeting
at which a quorum is present.
SECTION 12. Action at Meeting. At any meeting of the Board of Directors
at which a quorum is present, a majority of the Directors present may take any
action on behalf of the Board of Directors, unless otherwise required by law, by
the Certificate or by these Bylaws.
SECTION 13. Action by Consent. Any action required or permitted to be
taken at any meeting of the Board of Directors may be taken without a meeting if
all members of the Board of Directors consent thereto in writing. Such written
consent shall be filed with the records of the meetings of the Board of
Directors and shall be treated for all purposes as a vote at a meeting of the
Board of Directors.
SECTION 14. Manner of Participation. Directors may participate in
meetings of the Board of Directors by means of conference telephone or similar
communications equipment by means of which all Directors participating in the
meeting can hear each other, and participation in a meeting in accordance
herewith shall constitute presence in person at such meeting for purposes of
these Bylaws.
SECTION 15. Committees. The Board of Directors, by vote of a majority
of the Directors then in office, may elect from its number one or more
committees, including, without limitation, an Executive Committee, a
Compensation Committee, a Stock Option Committee and an Audit Committee, and may
delegate thereto some or all of its powers except those which by law, by the
Certificate or by these Bylaws may not be delegated. Except as the Board of
Directors may otherwise determine, any such committee may make rules for the
conduct of its business, but unless otherwise provided by the Board of Directors
or in such rules, its business shall be conducted so far as possible in the same
manner as is provided by these Bylaws for the Board of Directors. All members of
such committees shall hold such offices at the pleasure of the Board of
Directors. The Board of Directors may abolish any such committee at any time.
Any committee to which the Board of Directors delegates any of its powers or
duties shall keep records of its meetings and shall report its action to the
Board of Directors. The Board of Directors shall have power to rescind any
action of any committee, to the extent permitted by law, but no such rescission
shall have retroactive effect.
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SECTION 16. Compensation of Directors. Directors shall receive such
compensation for their services as shall be determined by a majority of the
Board of Directors provided that Directors who are serving the Corporation as
employees and who receive compensation for their services as such, shall not
receive any salary or other compensation for their services as Directors of the
Corporation.
ARTICLE III
Officers
SECTION 1. Enumeration. The officers of the Corporation shall consist
of a President, a Treasurer, a Secretary and such other officers, including,
without limitation, a Chairman of the Board of Directors and one or more Vice
Presidents (including Executive Vice Presidents or Senior Vice Presidents),
Assistant Vice Presidents, Assistant Treasurers and Assistant Secretaries, as
the Board of Directors may determine.
SECTION 2. Election. At the regular annual meeting of the Board
following the annual meeting of stockholders, the Board of Directors shall elect
the President, the Treasurer and the Secretary. Other officers may be elected by
the Board of Directors at such regular annual meeting of the Board of Directors
or at any other regular or special meeting.
SECTION 3. Qualification. No officer need be a stockholder or a
Director. Any person may occupy more than one office of the Corporation at any
time. Any officer may be required by the Board of Directors to give bond for the
faithful performance of his or her duties in such amount and with such sureties
as the Board of Directors may determine.
SECTION 4. Tenure. Except as otherwise provided by the Certificate or
by these Bylaws, each of the officers of the Corporation shall hold office until
the regular annual meeting of the Board of Directors following the next annual
meeting of stockholders and until his or her successor is elected and qualified
or until his or her earlier resignation or removal.
SECTION 5. Resignation. Any officer may resign by delivering his or her
written resignation to the Corporation addressed to the President or the
Secretary, and such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.
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SECTION 6. Removal. Except as otherwise provided by law, the Board of
Directors may remove any officer with or without cause by the affirmative vote
of a majority of the Directors then in office.
SECTION 7. Absence or Disability. In the event of the absence or
disability of any officer, the Board of Directors may designate another officer
to act temporarily in place of such absent or disabled officer.
SECTION 8. Vacancies. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of
Directors.
SECTION 9. President. Unless otherwise provided by the Board of
Directors or the Certificate, the President shall be the Chief Executive Officer
of the Corporation and shall, subject to the direction of the Board of
Directors, have general supervision and control of the Corporation's business.
If there is no Chairman of the Board or if he or she is absent, the President
shall preside, when present, at all meetings of stockholders and of the Board of
Directors. The President shall have such other powers and perform such other
duties as the Board of Directors may from time to time designate.
SECTION 10. Chairman of the Board. The Chairman of the Board, if one is
elected, shall preside, when present, at all meetings of the stockholders and of
the Board of Directors. The Chairman of the Board shall have such other powers
and shall perform such other duties as the Board of Directors may from time to
time designate.
SECTION 11. Vice Presidents and Assistant Vice Presidents. Any Vice
President (including any Executive Vice President or Senior Vice President) and
any Assistant Vice President shall have such powers and shall perform such
duties as the Board of Directors or the Chief Executive Officer may from time to
time designate.
SECTION 12. Treasurer and Assistant Treasurers. The Treasurer shall,
subject to the direction of the Board of Directors and except as the Board of
Directors or the Chief Executive Officer may otherwise provide, have general
charge of the financial affairs of the Corporation and shall cause to be kept
accurate books of account. The Treasurer shall have custody of all funds,
securities, and valuable documents of the Corporation. He or she shall have such
other duties and powers as may be designated from time to time by the Board of
Directors or the Chief Executive Officer.
Any Assistant Treasurer shall have such powers and perform such duties
as the Board of Directors or the Chief Executive Officer may from time to time
designate.
SECTION 13. Secretary and Assistant Secretaries. The Secretary shall
record all the proceedings of the meetings of the stockholders and the Board of
Directors (including committees of the Board) in books kept for that purpose. In
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his or her absence from any such meeting, a temporary secretary chosen at the
meeting shall record the proceedings thereof. The Secretary shall have charge of
the stock ledger (which may, however, be kept by any transfer or other agent of
the Corporation). The Secretary shall have custody of the seal of the
Corporation, and the Secretary, or an Assistant Secretary, shall have authority
to affix it to any instrument requiring it, and, when so affixed, the seal may
be attested by his or her signature or that of an Assistant Secretary. The
Secretary shall have such other duties and powers as may be designated from time
to time by the Board of Directors or the Chief Executive Officer. In the absence
of the Secretary, any Assistant Secretary may perform his or her duties and
responsibilities.
Any Assistant Secretary shall have such powers and perform such duties
as the Board of Directors or the Chief Executive Officer may from time to time
designate.
SECTION 14. Other Powers and Duties. Subject to these Bylaws and to
such limitations as the Board of Directors may from time to time prescribe, the
officers of the Corporation shall each have such powers and duties as generally
pertain to their respective offices, as well as such powers and duties as from
time to time may be conferred by the Board of Directors or the Chief Executive
Officer.
ARTICLE IV
Capital Stock
SECTION 1. Certificates of Stock. Each stockholder shall be entitled to
a certificate of the capital stock of the Corporation in such form as may from
time to time be prescribed by the Board of Directors. Such certificate shall be
signed by the Chairman of the Board of Directors, the President or a Vice
President and by the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary. The Corporation seal and the signatures by Corporation
officers, the transfer agent or the registrar may be facsimiles. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed on such certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he or she were such officer,
transfer agent or registrar at the time of its issue. Every certificate for
shares of stock which are subject to any restriction on transfer and every
certificate issued when the Corporation is authorized to issue more than one
class or series of stock shall contain such legend with respect thereto as is
required by law.
SECTION 2. Transfers. Subject to any restrictions on transfer and
unless otherwise provided by the Board of Directors, shares of stock may be
transferred only on the books of the Corporation by the surrender to the
Corporation or its transfer agent of the certificate theretofore properly
endorsed or accompanied by a written assignment or power of attorney properly
executed, with transfer stamps (if necessary) affixed, and with such proof of
the authenticity of signature as the Corporation or its transfer agent may
reasonably require.
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SECTION 3. Record Holders. Except as may otherwise be required by law,
by the Certificate or by these Bylaws, the Corporation shall be entitled to
treat the record holder of stock as shown on its books as the owner of such
stock for all purposes, including the payment of dividends and the right to vote
with respect thereto, regardless of any transfer, pledge or other disposition of
such stock, until the shares have been transferred on the books of the
Corporation in accordance with the requirements of these Bylaws.
It shall be the duty of each stockholder to notify the Corporation of
his or her post office address and any changes thereto.
SECTION 4. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date: (1) in the case of
determination of stockholders entitled to vote at any meeting of stockholders,
shall, unless otherwise required by law, not be more than sixty nor less than
ten days before the date of such meeting and (2) in the case of any other
action, shall not be more than sixty days prior to such other action. If no
record date is fixed: (1) the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held and (2) the record date for determining stockholders
for any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
SECTION 5. Replacement of Certificates. In case of the alleged loss,
destruction or mutilation of a certificate of stock, a duplicate certificate may
be issued in place thereof, upon such terms as the Board of Directors may
prescribe.
ARTICLE V
Indemnification
SECTION 1. Definitions. For purposes of this Article: (a) "Officer"
means any person who serves or has served as a Director or officer of the
Corporation or in any other office filled by election or appointment by the
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stockholders or the Board of Directors of the Corporation and any heirs,
executors, administrators or personal representatives of such person; (b)
"Non-Officer Employee" means any person who serves or has served as an employee
of the Corporation, but who is not or was not an Officer, and any heirs,
executors, administrators or personal representatives of such person; (c)
"Proceeding" means any threatened, pending, or completed action, suit or
proceeding (or part thereof), whether civil, criminal, administrative,
arbitrative or investigative, any appeal of such an action, suit or proceeding,
and any inquiry or investigation which could lead to such an action, suit, or
proceeding; and (d) "Expenses" means any liability fixed by a judgment, order,
decree or award in a Proceeding, any amount reasonably paid in settlement of a
Proceeding and any professional fees and other expenses and disbursements
reasonably incurred in a Proceeding or in settlement of a Proceeding, including
fines, taxes and penalties relating thereto.
SECTION 2. Officers. Except as provided in Section 4 of this Article V,
each Officer of the Corporation shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the DGCL, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader rights
than said law permitted the Corporation to provide prior to such amendment)
against any and all Expenses incurred by such Officer in connection with any
Proceeding in which such Officer is involved as a result of serving or having
served (a) as an Officer or employee of the Corporation, (b) as a director,
officer or employee of any subsidiary of the Corporation, or (c) in any capacity
with any other corporation, organization, partnership, joint venture, trust or
other entity at the written request or direction of the Corporation, including
service with respect to employee or other benefit plans, and shall continue as
to an Officer after he or she has ceased to be an Officer and shall inure to the
benefit of his or her heirs, executors, administrators and personal
representatives; provided, however, that the Corporation shall indemnify any
such Officer seeking indemnification in connection with a Proceeding initiated
by such Officer only if such Proceeding was authorized by the Board of Directors
of the Corporation.
SECTION 3. Non-Officer Employees. Except as provided in Section 4 of
this Article V, each Non-Officer Employee of the Corporation may, in the
discretion of the Board of Directors, be indemnified by the Corporation to the
fullest extent authorized by the DGCL, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader rights than said law
permitted the Corporation to provide prior to such amendment) against any or all
Expenses incurred by such Non-Officer Employee in connection with any Proceeding
in which such Non-Officer Employee is involved as a result of serving or having
served (a) as a Non-Officer Employee of the Corporation, (b) as a director,
officer or employee of any subsidiary of the Corporation, or (c) in any capacity
with any other corporation, organization, partnership, joint venture, trust or
other entity at the request or direction of the Corporation, including service
with respect to employee or other benefit plans, and shall continue as to a
Non-Officer Employee after he or she has ceased to be a Non-Officer Employee and
shall inure to the benefit of his or her heirs, personal representatives,
executors and administrators; provided, however, that the Corporation may
indemnify any such Non-Officer Employee seeking indemnification in connection
with a Proceeding initiated by such Non-Officer Employee only if such Proceeding
was authorized by the Board of Directors of the Corporation.
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SECTION 4. Good Faith. No indemnification shall be provided pursuant to
this Article V to an Officer or to a Non-Officer Employee with respect to a
matter as to which such person shall have been finally adjudicated in any
Proceeding not to have acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the Corporation,
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his or her conduct was unlawful. In the event that a Proceeding is compromised
or settled prior to final adjudication so as to impose any liability or
obligation upon an Officer or Non-Officer Employee, no indemnification shall be
provided pursuant to this Article V to said Officer or Non-Officer Employee with
respect to a matter if there be a determination that with respect to such matter
such person did not act in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the Corporation,
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The determination contemplated by the preceding
sentence shall be made by (i) a majority vote of those Directors who are not
involved in such Proceeding (the "Disinterested Directors"); (ii) by the
stockholders; or (iii) if directed by a majority of Disinterested Directors, by
independent legal counsel in a written opinion. However, if more than half of
the Directors are not Disinterested Directors, the determination shall be made
by (i) a majority vote of a committee of one or more disinterested Director(s)
chosen by the Disinterested Director(s) at a regular or special meeting; (ii) by
the stockholders; or (iii) by independent legal counsel chosen by the Board of
Directors in a written opinion.
SECTION 5. Prior to Final Disposition. Unless otherwise determined by
(i) the Board of Directors, (ii) if more than half of the Directors are involved
in a Proceeding by a majority vote of a committee of one or more Disinterested
Director(s) chosen in accordance with the procedures specified in Section 4 of
this Article or (iii) if directed by the Board of Directors, by independent
legal counsel in a written opinion, any indemnification extended to an Officer
or Non-Officer Employee pursuant to this Article V shall include payment by the
Corporation or a subsidiary of the Corporation of Expenses as the same are
incurred in defending a Proceeding in advance of the final disposition of such
Proceeding upon receipt of an undertaking by such Officer or Non-Officer
Employee seeking indemnification to repay such payment if such Officer or
Non-Officer Employee shall be adjudicated or determined not to be entitled to
indemnification under this Article V.
SECTION 6. Contractual Nature of Rights. The foregoing provisions of
this Article V shall be deemed to be a contract between the Corporation and each
Officer and Non-Officer Employee who serves in such capacity at any time while
this Article V is in effect, and any repeal or modification thereof shall not
affect any rights or obligations then existing with respect to any state of
facts then or theretofore existing or any Proceeding theretofore or thereafter
brought based in whole or in part upon any such state of facts. If a claim for
indemnification or advancement of expenses hereunder by an Officer or
Non-Officer Employee is not paid in full by the Corporation within 60 days after
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a written claim for indemnification or documentation of expenses has been
received by the Corporation, such Officer or Non-Officer Employee may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim, and if successful in whole or in part, such Officer or Non-Officer
Employee shall also be entitled to be paid the expenses of prosecuting such
claim. The failure of the Corporation (including its Board of Directors or any
committee thereof, independent legal counsel, or stockholders) to make a
determination concerning the permissibility of such indemnification or
advancement of expenses under this Article V shall not be a defense to the
action and shall not create a presumption that such indemnification or
advancement is not permissible
SECTION 7. Non-Exclusivity of Rights. The provisions in respect of
indemnification and the payment of expenses incurred in defending a Proceeding
in advance of its final disposition set forth in this Article V shall not be
exclusive of any right which any person may have or hereafter acquire under any
statute, provision of the Certificate or these Bylaws, agreement, vote of
stockholders or disinterested directors or otherwise; provided, however, that in
the event the provisions of this Article V in any respect conflict with the
terms of any agreement between the Corporation or any of its subsidiaries and
any person entitled to indemnification under this Article V, then the provision
which is more favorable to the relevant individual shall govern.
SECTION 8. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any Officer or Non-Officer Employee against any
liability of any character asserted against or incurred by the Corporation or
any such Officer or Non-Officer Employee, or arising out of any such status,
whether or not the Corporation would have the power to indemnify such person
against such liability under the DGCL or the provisions of this Article V.
ARTICLE VI
Miscellaneous Provisions
SECTION 1. Fiscal Year. Except as otherwise determined by the Board
of Directors, the fiscal year of the Corporation shall end on the last day of
December of each year.
SECTION 2. Seal. The Board of Directors shall have power to adopt
and alter the seal of the Corporation.
SECTION 3. Execution of Instruments. All deeds, leases, transfers,
contracts, bonds, notes and other obligations to be entered into by the
Corporation in the ordinary course of its business without Director action may
be executed on behalf of the Corporation by the Chairman of the Board, if one is
elected, the President or the Treasurer or any other officer, employee or agent
of the Corporation as the Board of Directors or Executive Committee may
authorize.
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SECTION 4. Voting of Securities. Unless the Board of Directors
otherwise provides, the Chairman of the Board, if one is elected, the President
or the Treasurer may waive notice of and act on behalf of this Corporation, or
appoint another person or persons to act as proxy or attorney in fact for this
Corporation with or without discretionary power and/or power of substitution, at
any meeting of stockholders or shareholders of any other corporation or
organization, any of whose securities are held by this Corporation.
SECTION 5. Resident Agent. The Board of Directors may appoint a
resident agent upon whom legal process may be served in any action or proceeding
against the Corporation.
SECTION 6. Corporate Records. The original or attested copies of the
Certificate, Bylaws and records of all meetings of the incorporators,
stockholders and the Board of Directors and the stock transfer books, which
shall contain the names of all stockholders, their record addresses and the
amount of stock held by each, may be kept outside the State of Delaware and
shall be kept at the principal office of the Corporation, at the office of its
counsel or at an office of its transfer agent or at such other place or places
as may be designated from time to time by the Board of Directors.
SECTION 7. Certificate. All references in these Bylaws to the
Certificate shall be deemed to refer to the Amended and Restated Certificate of
Incorporation of the Corporation, as amended and in effect from time to time.
SECTION 8. Amendment of Bylaws.
(a) Amendment by Directors. Except as provided otherwise by law,
these Bylaws may be amended or repealed by the Board of Directors.
(b) Amendment by Stockholders. These Bylaws may be amended or repealed
at any annual meeting of stockholders, or special meeting of stockholders called
for such purpose, by the affirmative vote of at least two-thirds of the total
votes eligible to be cast on such amendment or repeal by holders of voting
stock, voting together as a single class; provided, however, that if the Board
of Directors recommends that stockholders approve such amendment or repeal at
such meeting of stockholders, such amendment or repeal shall only require the
affirmative vote of a majority of the total votes eligible to be cast on such
amendment or repeal by holders of voting stock, voting together as a single
class.
Adopted and effective as of ____________, 1997.
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EXHIBIT C
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
WASTE SYSTEMS INTERNATIONAL, INC.
ARTICLE I
NAME
The name of the Corporation is Waste Systems International, Inc.
ARTICLE II
REGISTERED OFFICE
The address of the registered office of the Corporation in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.
ARTICLE III
PURPOSES
The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.
ARTICLE IV
CAPITAL STOCK
The total number of shares of capital stock which the Corporation shall
have the authority to issue is One Hundred Fifty One Million (151,000,000)
shares of which (i) One Hundred Fifty Million (150,000,000) shares shall be
common stock, par value $.001 per share (the "Common Stock"), and (ii) One
Million (1,000,000) shares shall be preferred stock, par value $.001 per share
(the "Preferred Stock").
A. PREFERRED STOCK
As set forth in this Article IV, the Board of Directors or any
authorized committee thereof is authorized from time to time to establish and
designate one or more series of Preferred Stock, to fix and determine the
variations in the relative rights and preferences as between the different
series of Preferred Stock in the manner hereinafter set forth in this Article
IV, and to fix or alter the number of shares comprising any such series and the
designation thereof to the extent permitted by law.
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The number of authorized shares of the class of Preferred Stock may be
increased or decreased (but not below the number of shares outstanding) by the
affirmative vote of the holders of a majority of the Common Stock, without a
vote of the holders of the Preferred Stock.
The designations, powers, preferences and rights of, and the
qualifications, limitations and restrictions upon, each class or series of stock
shall be determined in accordance with, or as set forth below.
Subject to any limitations prescribed by law, the Board of Directors or
any authorized committee thereof is expressly authorized to provide for the
issuance of the shares of Preferred Stock in one or more series of such stock,
and by filing a certificate pursuant to applicable law of the State of Delaware,
to establish or change from time to time the number of shares to be included in
each such series, and to fix the designations, powers, preferences and the
relative, participating, optional or other special rights of the shares of each
series and any qualifications, limitations and restrictions thereof. Any action
by the Board of Directors or any authorized committee thereof under this Article
IV to fix the designations, powers, preferences and the relative, participating,
optional or other special rights of the shares of a series of Preferred Stock
and any qualifications, limitations and restrictions thereof shall require the
affirmative vote of a majority of the Directors then in office or a majority of
the members of such committee. The Board of Directors or any authorized
committee thereof shall have the right to determine or fix one or more of the
following with respect to each series of Preferred Stock to the extent permitted
by law:
(a) The distinctive serial designation and the number of
shares constituting such series;
(b) The rights in respect of dividends or the amount of
dividends to be paid on the shares of such series, whether dividends shall be
cumulative and, if so, from which date or dates, the payment date or dates for
dividends, and the participating and other rights, if any, with respect to
dividends;
(c) The voting powers, full or limited, if any, of the
shares of such series;
(d) Whether the shares of such series shall be redeemable
and, if so, the price or prices at which, and the
terms and conditions on which, such shares may be redeemed;
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(e) The amount or amounts payable upon the shares of such
series and any preferences applicable thereto in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation;
(f) Whether the shares of such series shall be entitled to the
benefit of a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and if so entitled, the amount of such fund and the
manner of its application, including the price or prices at which such shares
may be redeemed or purchased through the application of such fund;
(g) Whether the shares of such series shall be convertible
into, or exchangeable for, shares of any other class or classes or of any other
series of the same or any other class or classes of stock of the Corporation
and, if so convertible or exchangeable, the conversion price or prices, or the
rate or rates of exchange, and the adjustments thereof, if any, at which such
conversion or exchange may be made, and any other terms and conditions of such
conversion or exchange;
(h) The price or other consideration for which the shares
of such series shall be issued;
(i) Whether the shares of such series which are redeemed or
converted shall have the status of authorized but unissued shares of Preferred
Stock (or series thereof) and whether such shares may be reissued as shares of
the same or any other class or series of stock; and
(j) Such other powers, preferences, rights, qualifications,
limitations and restrictions thereof as the Board of Directors or any authorized
committee thereof may deem advisable.
B. COMMON STOCK
1. Voting. Each holder of record shall be entitled to one vote
for each share of Common Stock standing in his name on the books of the
Corporation.
2. Dividends. Subject to applicable law, the holders of Common Stock
shall be entitled to receive dividends out of funds legally available therefor
at such times and in such amounts as the Board of Directors may determine in its
sole discretion, with each share of Common Stock sharing equally, share for
share, in such dividends.
3. Liquidation. Upon any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary (a "Liquidation Event"),
after the payment or provision for payment of all debts and liabilities of the
Corporation and all preferential amounts to which the holders of Preferred Stock
are entitled with respect to the distribution of assets in liquidation, the
holders of Common Stock shall be entitled to share ratably in the remaining
assets of the Corporation available for distribution.
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4. Notices. In the event that the Corporation provides any
notice, report or statement to any holder of Common Stock, the Corporation shall
at the same time provide a copy of any such notice, report or statement to each
holder of outstanding Common Stock.
ARTICLE V
BOARD OF DIRECTORS
1. General. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors except as otherwise
provided herein or required by law.
2. Election of Directors. Election of Directors need not be by
written ballot unless the By-laws of the Corporation shall so provide.
3. Terms of Directors. The number of Directors of the Corporation shall
be fixed by resolution duly adopted from time to time by the Board of Directors.
The Directors of the Corporation shall serve for one-year terms expiring on the
date of the Corporation's Annual Meeting and until such Director's successor
shall have been duly elected and qualified or until their earlier resignation or
removal. At each succeeding annual meeting of the Stockholders of the
Corporation, the successors of the Directors whose term expires at that meeting
shall be elected by a plurality vote of all votes cast at such meeting.
Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article IV of this Certificate of Incorporation, the holders of any one or more
series of Preferred Stock shall have the right, voting separately as a series or
together with holders of other such series, to elect Directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation and any certificate of designations
applicable thereto.
During any period when the holders of any series of Preferred Stock
have the right to elect additional Directors as provided for or fixed pursuant
to the provisions of Article IV hereof, then upon commencement and for the
duration of the period during which such right continues: (i) the then otherwise
total authorized number of Directors of the Corporation shall automatically be
increased by such specified number of Directors, and the holders of such
Preferred Stock shall be entitled to elect the additional Directors so provided
for or fixed pursuant to said provisions, and (ii) each such additional Director
shall serve until such Director's successor shall have been duly elected and
qualified, or until such Director's right to hold such office terminates
pursuant to said provisions, whichever occurs earlier, subject to such
Director's earlier death, disqualification, resignation or removal. Except as
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otherwise provided by the Board in the resolution or resolutions establishing
such series, whenever the holders of any series of Preferred Stock having such
right to elect additional Directors are divested of such right pursuant to the
provisions of such stock, the terms of office of all such additional Directors
elected by the holders of such stock, or elected to fill any vacancies resulting
from the death, resignation, disqualification or removal of such additional
Directors, shall forthwith terminate and the total and authorized number of
Directors of the Corporation shall be reduced accordingly.
4. Stockholder Nominations of Director Candidates. Advance
notice of nominations for the election of Directors, other than by the Board of
Directors of a committee thereof, shall be given in the manner provided in the
By-laws.
5. Vacancies. Subject to the rights, if any, of the holders of any
series of Preferred Stock to elect Directors and to fill vacancies in the Board
of Directors relating thereto, any and all vacancies in the Board of Directors,
however occurring, including, without limitation, by reason of an increase in
size of the Board of Directors, or the death, resignation, disqualification or
removal of a Director, shall be filled solely by the affirmative vote of a
majority of the remaining Directors then in office, even if less than a quorum
of the Board of Directors. Any Director appointed in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
created or vacated directorship and until such Director's successor shall have
been duly elected and qualified or until his or her earlier resignation or
removal. Subject to the rights, if any, of the holders of any series of
Preferred Stock to elect Directors, no decrease in the number of Directors shall
shorten the term of any incumbent Director. In the event of a vacancy in the
Board of Directors, the remaining Directors, except as otherwise provided by
law, may exercise the powers of the full Board of Directors until the vacancy is
filled.
6. Removal. Subject to the rights, if any, of any series of Preferred
Stock to elect Directors and to remove any Director whom the holders of any such
stock have the right to elect, any Director (including persons elected by
Directors to fill vacancies in the Board of Directors) may be removed from
office (i) only with cause and (ii) only by the affirmative vote of at least
two-thirds of the total votes which would be eligible to be cast by stockholders
in the election of such Director. At least 30 days prior to any meeting of
stockholders at which it is proposed that any Director be removed from office,
written notice of such proposed removal shall be sent to the Director whose
removal will be considered at the meeting. For purposes of this Certificate of
Incorporation, "cause," with respect to the removal of any Director shall
include (i) conviction of a felony, (ii) declaration of unsound mind by order of
court, (iii) gross dereliction of duty, (iv) commission of any action involving
moral turpitude, or (v) commission of an action which constitutes intentional
misconduct or a knowing violation of law if such action in either event results
both in an improper substantial personal benefit and a material injury to the
Corporation.
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ARTICLE VI
STOCKHOLDER ACTION
Any action required or permitted to be taken by the stockholders of the
Corporation at any annual or special meeting of stockholders of the Corporation
must be effected at a duly called annual or special meeting of stockholders and
may not be taken or effected by a written consent of stockholders in lieu
thereof. Except as otherwise required by law and subject to the rights of the
holders of any series of preferred stock, special meetings of the stockholders
of the Corporation may be called only by (i) the Board of Directors pursuant to
a resolution approved by the affirmative vote of a majority of the Directors
then in office, (ii) the Chairman of the Board, if one is elected, or (iii) the
President. Only those matters set forth in the notice of the special meeting may
be considered or acted upon at a special meeting of stockholders of the
Corporation, unless otherwise provided by law. Advance notice of any matters or
nominations which stockholder intend to propose for action at an annual meeting
shall be given in the manner provided in the By-laws.
ARTICLE VII
LIMITATION OF LIABILITY
A director of this Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent that the elimination or limitation of
liability is not permitted under the Delaware General Corporation Law as in
effect when such liability is determined. No amendment or repeal of this
provision shall deprive a director of the benefits hereof with respect to any
act or omission occurring prior to such amendment or repeal.
Any repeal or modification of this Article VII by either of (i) the
stockholders of the Corporation or (ii) an amendment to the DGCL, shall not
adversely affect any right or protection existing at the time of such repeal or
modification with respect to any acts or omissions occurring before such repeal
or modification of a person serving as a Director at the time of such repeal or
modification.
ARTICLE VIII
AMENDMENT OF BY-LAWS
1. Amendment by Directors Except as otherwise provided by law,
the By-laws of the Corporation may be amended or repealed by the Board of
Directors.
2. Amendment by Stockholders. The By-laws of the Corporation may be
amended or repealed at any annual meeting of stockholders, or special meeting of
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stockholders called for such purpose, by the affirmative vote of at least
two-thirds of the total votes eligible to be cast on such amendment or repeal by
holders of voting stock, voting together as a single class; provided, however,
that if the Board of Directors recommends that stockholders approve such
amendment or repeal at such meeting of stockholders, such amendment or repeal
shall only require the affirmative vote of a majority of the total votes
eligible to be cast on such amendment or repeal by holders of voting stock,
voting together as a single class.
ARTICLE IX
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend or repeal this Certificate
of Incorporation in the manner now or hereafter prescribed by statute and this
Certificate of Incorporation, and all rights conferred upon stockholders herein
are granted subject to this reservation. No amendment or repeal of this
Certificate of Incorporation shall be made unless the same is first approved by
the Board of Directors pursuant to a resolution adopted by the Board of
Directors in accordance with Section 242 of the DGCL, and, except as otherwise
provided by law, thereafter approved by the stockholders. Whenever any vote of
the holders of voting stock is required to amend or repeal any provision of this
Certificate of Incorporation, and in addition to any other vote of holders of
voting stock that is required by this Certificate of Incorporation, or by law,
the affirmative vote of a majority of the total votes eligible to be cast by
holders of voting stock with respect to such amendment or repeal, voting
together a single class, at a duly constituted meeting of stockholders called
expressly for such purpose shall be required to amend or repeal any provisions
of this Certificate of Incorporation; provided, however, that the affirmative
vote of not less than 80% of the total votes eligible to be cast by holders of
voting stock, voting together as a single class, shall be required to amend or
repeal any of the provisions of Article VI or Article X of this Certificate of
Incorporation.
ARTICLE X
INDEMNIFICATION
The Corporation shall, to the fullest extent permitted by the Delaware
General Corporation Law, as amended from time to time, indemnify each person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, administrative or
investigative, by reason of the fact that such person is or was, or has agreed
to become, a director or officer of the corporation, or is or was serving, or
has agreed to serve, at the request of the Corporation, as a director, officer
or trustee of, or in a similar capacity with, another corporation, as a
director, officer or trustee of, or in a similar capacity with, another
corporation, partnership, joint venture, trust or other enterprise, from and
against all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person or on his or
her behalf in connection with such action, suit or proceeding and any appeal
therefrom.
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Indemnification may include payment by the Corporation of expenses in
defending an action or proceeding in advance of the final disposition of such
action or proceeding upon receipt of any undertaking by the person indemnified
to repay such payment if it is ultimately determined that such person in not
entitled to indemnification under this Article, which undertaking may be
accepted without reference to the financial ability of such person to make such
payments.
The Corporation shall not indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person unless the initiation thereof was approved by the Board of Directors
of the Corporation.
The indemnification rights provided in this Article X (i) shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any law, agreement or vote of stockholders or disinterested directors or
otherwise, and (ii) shall inure to the benefit of the heirs, executors and
administrators of such persons. The Corporation may, to the extent authorized
from time to time by its Board of Directors, grant indemnification rights to
other employees or agents of the Corporation or other persons serving the
Corporation and such rights may be equivalent to, or greater or less than, those
set forth in this Article.
Any person seeking indemnification under this Article shall be deemed
to have met the standard of conduct required for such indemnification unless the
contrary shall be established.
Any amendment or repeal of the provisions of this Article shall not
adversely affect any right or protection of a director or officer of the
Corporation with respect to any act or omission of such director or officer
occurring prior to such amendment or repeal.
ARTICLE XI
BOOKS
The books of this Corporation may (subject to any statutory
requirements) be kept outside the State of Delaware as may be designated by the
Board of Directors or in the Bylaws.
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WASTE SYSTEMS INTERNATIONAL, INC.
By: _______________________________
Philip Strauss
President
By: _______________________________
Robert Rivkin
Secretary
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EXHIBIT D
NEVADA REVISED STATUTES
TITLE 7. BUSINESS ASSOCIATIONS; SECURITIES; COMMODITIES
CHAPTER 92A. MERGERS AND EXCHANGES OF INTEREST
RIGHTS OF DISSENTING OWNERS
92A.300. Definitions.
As used in NRS 92A.300 to 92A.500, inclusive, unless the context otherwise
requires, the words and terms defined in NRS 92A.305 to
92A.335, inclusive, have the meanings ascribed to them in those sections.
92A.305. "Beneficial stockholder" defined.
"Beneficial stockholder" means a person who is a beneficial owner of shares
held in a voting trust or by a nominee as the stockholder of record.
92A.310. "Corporate action" defined.
"Corporate action" means the action of a domestic corporation.
92A.315. "Dissenter" defined.
"Dissenter" means a stockholder who is entitled to dissent from a domestic
corporation's action under NRS 92A.380 and who exercises that right when and in
the manner required by NRS 92A.410 to 92A.480, inclusive.
92A.320. "Fair value" defined.
"Fair value," with respect to a dissenter's shares, means the value of the
shares immediately before the effectuation of the corporate action to which he
objects, excluding any appreciation or depreciation in anticipation of the
corporate action unless exclusion would be inequitable.
92A.325. "Stockholder" defined.
"Stockholder" means a stockholder of record or a beneficial stockholder of a
domestic corporation.
92A.330. "Stockholder of record" defined.
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"Stockholder of record" means the person in whose name shares are registered
in the records of a domestic corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee's certificate on file with the
domestic corporation.
92A.335. "Subject corporation" defined.
"Subject corporation" means the domestic corporation which is the issuer of
the shares held by a dissenter before the corporate action creating the
dissenter's rights becomes effective or the surviving or acquiring entity of
that issuer after the corporate action becomes effective.
92A.340. Computation of interest.
Interest payable pursuant to NRS 92A.300 to 92A.500, inclusive, must be
computed from the effective date of the action until the date of payment, at
the average rate currently paid by the entity on its principal bank loans or,
if it has no bank loans, at a rate that is fair and equitable under all of the
circumstances.
92A.350. Rights of dissenting partner of domestic limited partnership.
A partnership agreement of a domestic limited partnership or, unless
otherwise provided in the partnership agreement, an agreement of merger or
exchange, may provide that contractual rights with respect to the partnership
interest of a dissenting general or limited partner of a domestic limited
partnership are available for any class or group of partnership interests in
connection with any merger or exchange in which the domestic limited
partnership is a constituent entity.
92A.360. Rights of dissenting member of domestic limited-liability company.
The articles of organization or operating agreement of a domestic
limited-liability company or, unless otherwise provided in the articles of
organization or operating agreement, an agreement of merger or exchange, may
provide that contractual rights with respect to the interest of a dissenting
member are available in connection with any merger or exchange in which the
domestic limited-liability company is a constituent entity.
92A.370. Rights of dissenting member of domestic nonprofit corporation.
1. Except as otherwise provided in subsection 2, and unless otherwise
provided in the articles or bylaws, any member of any constituent domestic
nonprofit corporation who voted against the merger may, without prior notice,
but within 30 days after the effective date of the merger, resign from
membership and is thereby excused from all contractual obligations to the
constituent or surviving corporations which did not occur before his
resignation and is thereby entitled to those rights, if any, which would have
existed if there had been no merger and the membership had been terminated or
the member had been expelled.
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2. Unless otherwise provided in its articles of incorporation or bylaws, no
member of a domestic nonprofit corporation, including, but not limited to, a
cooperative corporation, which supplies services described in chapter 704 of
NRS to its members only, and no person who is a member of a domestic nonprofit
corporation as a condition of or by reason of the ownership of an interest in
real property, may resign and dissent pursuant to subsection 1.
92A.380. Right of stockholder to dissent from certain corporate actions and
to obtain payment for shares.
1. Except as otherwise provided in NRS 92A.370 and 92A.390, a stockholder is
entitled to dissent from, and obtain payment of the fair value of his shares in
the event of any of the following corporate actions:
(a) Consummation of a plan of merger to which the domestic corporation is a
party:
(1) If approval by the stockholders is required for the merger by NRS 92A.120
to 92A.160, inclusive, or the articles of incorporation and he is entitled to
vote on the merger; or
(2) If the domestic corporation is a subsidiary and is merged with its parent
under NRS 92A.180.
(b) Consummation of a plan of exchange to which the domestic corporation is a
party as the corporation whose subject owner's interests will be acquired, if
he is entitled to vote on the plan.
(c) Any corporate action taken pursuant to a vote of the stockholders to the
event that the articles of incorporation, bylaws or a resolution of the board
of directors provides that voting or nonvoting stockholders are entitled to
dissent and obtain payment for their shares.
2. A stockholder who is entitled to dissent and obtain payment under NRS
92A.300 to 92A.500, inclusive, may not challenge the corporate action creating
his entitlement unless the action is unlawful or fraudulent with respect to him
or the domestic corporation.
92A.390. Limitations on right of dissent: Stockholders of certain classes or
series; action of stockholders not required for plan of merger.
1. There is no right of dissent with respect to a plan of merger or exchange
in favor of stockholders of any class or series which, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at the
meeting at which the plan of merger or exchange is to be acted on, were either
listed on a national securities exchange, included in the national market
system by the National Association of Securities Dealers, Inc., or held by at
least 2,000 stockholders of record, unless:
(a) The articles of incorporation of the corporation issuing the shares
provide oherwise; or
(b) The holders of the class or series are required under the plan of merger
or exchange to accept for the shares anything except:
(1) Cash, owner's interests or owner's interests and cash in lieu of
fractional owner's interests of:
(I) The surviving or acquiring entity; or
(II) Any other entity which, at the effective date of the plan of merger or
exchange, were either listed on a national securities exchange, included in
the national market system by the National Association of Securities Dealers,
Inc., or held of record by a least 2,000 holders of owner's interests of
record; or
(2) A combination of cash and owner's interests of the kind described in
sub-subparagraphs (I) and (II) of subparagraph (1) of paragraph (b).
2. There is no right of dissent for any holders of stock of the surviving
domestic corporation if the plan of merger does not require action of the
stockholders of the surviving domestic corporation under NRS 92A.130.
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92A.400. Limitations on right of dissent: Assertion as to portions only to
shares registered to stockholder; assertion by beneficial stockholder.
1. A stockholder of record may assert dissenter's rights as to fewer than all
of the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one person and notifies the subject
corporation in writing of the name and address of each person on whose behalf
he asserts dissenter's rights. The rights of a partial dissenter under this
subsection are determined as if the shares as to which he dissents and his
other shares were registered in the names of different stockholders.
2. A beneficial stockholder may assert dissenter's rights as to shares held
on his behalf only if:
(a) He submits to the subject corporation the written consent of the
stockholder of record to the dissent not later than the time the beneficial
stockholder asserts dissenter's rights; and
(b) He does so with respect to all shares of which he is the beneficial
stockholder or over which he has power to direct the vote.
92A.410. Notification of stockholders regarding right of dissent.
1. If a proposed corporate action creating dissenters' rights is submitted to
a vote at a stockholders' meeting, the notice of the meeting must state that
stockholders are or may be entitled to assert dissenters' rights under NRS
92A.300 to 92A.500, inclusive, and be accompanied by a copy of those sections.
2. If the corporate action creating dissenters' rights is taken without a
vote of the stockholders, the domestic corporation shall notify in writing all
stockholders entitled to assert dissenters' rights that the action was taken
and send them the dissenter's notice described in NRS 92A.430.
92A.420. Prerequisite to demand for payment for shares.
1. If a proposed corporate action creating dissenters' rights is submitted to
a vote at a stockholders' meeting, a stockholder who wishes to assert
dissenter's rights:
(a) Must deliver to the subject corporation, before the vote is taken,
written notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(b) Must not vote his shares in favor of the proposed action.
2. A stockholder who does not satisfy the requirements of subsection 1 is not
entitled to payment for his shares under this chapter.
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92A.430. Dissenter's notice: Delivery to stockholders entitled to assert
rights; contents.
1. If a proposed corporate action creating dissenters' rights is authorized
at a stockholders' meeting, the subject corporation shall deliver a written
dissenter's notice to all stockholders who satisfied the requirements to assert
those rights.
2. The dissenter's notice must be sent no later than 10 days after the
effectuation of the corporate action, and must:
(a) State where the demand for payment must be sent and where and when
certificates, if any, for shares must be deposited;
(b) Inform the holders of shares not represented by certificates to what
extent the transfer of the shares will be restricted after the demand for
payment is received;
(c) Supply a form for demanding payment that includes the date of the first
announcement to the news media or to the stockholders of the terms of the
proposed action and requires that the person asserting dissenter's rights
certify whether or not he acquired beneficial ownership of the shares before
that date;
(d) Set a date by which the subject corporation must receive the demand for
payment, which may not be less than 30 nor more than 60 days after the date the
notice is delivered; and
(e) Be accompanied by a copy of NRS 92A.300 to 92A.500, inclusive.
92A.440. Demand for payment and deposit of certificates; retention of rights
of stockholder.
1. A stockholder to whom a dissenter's notice is sent must:
(a) Demand payment;
(b) Certify whether he acquired beneficial ownership of the shares before the
date required to be set forth in the dissenter's notice for this certification;
and
(c) Deposit his certificates, if any, in accordance with the terms of the
notice.
2. The stockholder who demands payment and deposits his certificates, if any,
retains all other rights of a stockholder until those rights are canceled or
modified by the taking of the proposed corporate action.
3. The stockholder who does not demand payment or deposit his certificates
where required, each by the date set forth in the dissenter's notice, is not
entitled to payment for his shares under this chapter.
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92A.450. Uncertificated shares: Authority to restrict transfer after demand
for payment; retention of rights of stockholder.
1. The subject corporation may restrict the transfer of shares not
represented by a certificate from the date the demand for their payment is
received.
2. The person for whom dissenter's rights are asserted as to shares not
represented by a certificate retains all other rights of a stockholder until
those rights are canceled or modified by the taking of the proposed corporate
action.
92A.460. Payment for shares: General requirements.
1. Except as otherwise provided in NRS 92A.470, within 30 days after receipt
of a demand for payment, the subject corporation shall pay each dissenter who
complied with NRS 92A.440 the amount the subject corporation estimates to be
the fair value of his shares, plus accrued interest. The obligation of the
subject corporation under this subsection may be enforced by the district
court:
(a) Of the county where the corporation's registered office is located; or
(b) At the election of any dissenter residing or having its registered office
in this state, of the county where the dissenter resides or has its registered
office. The court shall dispose of the complaint promptly.
2. The payment must be accompanied by:
(a) The subject corporation's balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of payment, a statement of
income for that year, a statement of changes in the stockholders' equity for
that year and the latest available interim financial statements, if any;
(b) A statement of the subject corporation's estimate of the fair value of
the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's rights to demand payment under NRS
92A.480; and
(e) A copy of NRS 92A.300 to 92A.500, inclusive.
92A.470. Payment for shares: Shares acquired on or after date of dissenter's
notice.
1. A subject corporation may elect to withhold payment from a dissenter
unless he was the beneficial owner of the shares before the date set forth in
the dissenter's notice as the date of the first announcement to the news media
or to the stockholders of the terms of the proposed action.
2. To the extent the subject corporation elects to withhold payment, after
taking the proposed action, it shall estimate the fair value of the shares,
plus accrued interest, and shall offer to pay this amount to each dissenter who
agrees to accept it in full satisfaction of his demand. The subject corporation
shall send with its offer a statement of its estimate of the fair value of the
shares, an explanation of how the interest was calculated, and a statement of
the dissenters' right to demand payment pursuant to NRS 92A.480.
92A.480. Dissenter's estimate of fair value: Notification of subject
corporation; demand for payment of estimate.
1. A dissenter may notify the subject corporation in writing of his own
estimate of the fair value of his shares and the amount of interest due, and
demand payment of his estimate, less any payment pursuant to NRS 92A.460, or
reject the offer pursuant to NRS 92A.470 and demand payment of the fair value
of his shares and interest due, if he believes that the amount paid pursuant to
NRS 92A.460 or offered pursuant to NRS 92A.470 is less than the fair value of
his shares or that the interest due is incorrectly calculated.
2. A dissenter waives his right to demand payment pursuant to this section
unless he notifies the subject corporation of his demand in writing within 30
days after the subject corporation made or offered payment for his shares.
92A.490. Legal proceeding to determine fair value: Duties of subject
corporation; powers of court; rights of dissenter.
<PAGE>
1. If a demand for payment remains unsettled, the subject corporation shall
commence a proceeding within 60 days after receiving the demand and petition
the court to determine the fair value of the shares and accrued interest. If
the subject corporation does not commence the proceeding within the 60-day
period, it shall pay each dissenter whose demand remains unsettled the amount
demanded.
2. A subject corporation shall commence the proceeding in the district court
of the county where its registered office is located. If the subject
corporation is a foreign entity without a resident agent in the state, it shall
commence the proceeding in the county where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
entity was located.
3. The subject corporation shall make all dissenters, whether or not
residents of Nevada, whose demands remain unsettled, parties to the proceeding
as in an action against their shares. All parties must be served with a copy of
the petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
4. The jurisdiction of the court in which the proceeding is commenced under
subsection 2 is plenary and exclusive. The court may appoint one or more
persons as appraisers to receive evidence and recommend a decision on the
question of fair value. The appraisers have the powers described in the order
appointing them, or any amendment thereto. The dissenters are entitled to the
same discovery rights as parties in other civil proceedings.
5. Each dissenter who is made a party to the proceeding is entitled to a
judgment:
(a) For the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the subject corporation; or
(b) For the fair value, plus accrued interest, of his after-acquired shares
for which the subject corporation elected to withhold payment pursuant to NRS
92A.470.
<PAGE>
92A.500. Legal proceeding to determine fair value: Assessment of costs and
fees.
1. The court in a proceeding to determine fair value shall determine all of
the costs of the proceeding, including the reasonable compensation and expenses
of any appraisers appointed by the court. The court shall assess the costs
against the subject corporation, except that the court may assess costs against
all or some of the dissenters, in amounts the court finds equitable, to the
extent the court finds the dissenters acted arbitrarily, vexatiously or not in
good faith in demanding payment.
2. The court may also assess the fees and expenses of the counsel and experts
for the respective parties, in amounts the court finds equitable:
(a) Against the subject corporation and in favor of all dissenters if the
court finds the subject corporation did not substantially comply with the
requirements of NRS 92A.300 to 92A.500, inclusive; or
(b) Against either the subject corporation or a dissenter in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good faith with
respect to the rights provided by NRS 92A.300 to 92A.500, inclusive.
3. If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the subject corporation, the
court may award to those counsel reasonable fees to be paid out of the amounts
awarded to the dissenters who were benefited.
4. In a proceeding commenced pursuant to NRS 92A.460, the court may assess
the costs against the subject corporation, except that the court may assess
costs against all or some of the dissenters who are parties to the proceeding,
in amounts the court finds equitable, to the extent the court finds that such
parties did not act in good faith in instituting the proceeding.
5. This section does not preclude any party in a proceeding commenced
pursuant to NRS 92A.460 or 92A.490 from applying the provisions of
N.R.C.P. 68 or NRS 17.115.
<PAGE>
BIOSAFE INTERNATIONAL, INC.
Proxy for Annual Meeting of Stockholders, October 24, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Philip Strauss and Robert Rivkin, and
each of them, as Proxies of the undersigned, with full power of substitution,
and authorizes each of them to represent and to vote all shares of Common Stock
of BioSafe International, Inc. (the "Company") held by the undersigned as of the
close of business of September 10, 1997 at the Annual Meeting of Stockholders to
be held at Goodwin, Procter & Hoar LLP, 53 State Street, Second Floor Conference
Center, Boston, Massachusetts on Friday, October 24, 1997, at 10:00 am, local
time, and at any adjournments or postponements thereof. The undersigned hereby
acknowledge(s) receipt of a copy of the accompanying Notice of Annual Meeting of
Stockholders, the Proxy Statement with respect thereto and the Company's 1996
Annual Report to Stockholders, and hereby revoke(s) any proxy or proxies
heretofore given. This proxy may be revoked at any time before it is executed.
Please mark boxes with an X in blue or black ink.
1. To elect the following persons as Directors:
Jay Matulich, Robert Rivkin and Philip Strauss.
FOR all nominees WITHHELD from all nominees
FOR, except vote withheld form the following nominees(s)
________________________
2. To approve a change in the Company's state of incorporation
from Nevada to Delaware including a change of corporate name
and related changes to the certificate of incorporation and
bylaws, as described in the Proxy Statement.
FOR AGAINST ABSTAIN
3. To approve an amendment to the Company's 1995 Stock Option and
Incentive Plan (the "1995 Plan") to increase the number of
shares of the Company's Common Stock available for issuance
under the 1995 Plan, as described in the Proxy Statement.
FOR AGAINST ABSTAIN
4. To approve an amendment to the Company's 1995 Stock Option
Plan for Non-Employee Directors to provide newly-elected
non-employee directors an option to purchase 20,000 shares of
the Company's common stock upon election, as described in the
Proxy Statement.
<PAGE>
FOR AGAINST ABSTAIN
5. To ratify the selection of KPMG Peat Marwick, L.L.P. as the
independent auditors of the Company for the fiscal year
ending December 31, 1996.
FOR AGAINST ABSTAIN
When properly executed, this proxy will be voted in the manner directed
herein by the undersigned stockholder(s). If no director is given, this proxy
will be voted for the election of all the nominees listed in Proposal 1 and for
the items described in Proposals 2, 3, 4, and 5 and at the Proxies' discretion
upon such other business as may properly come before the meeting. PLEASE SIGN,
DATE AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
Please sign name exactly as shown.
Where there is more than
one holder, each should
sign the proxy. When
signing as an attorney,
administrator, executor,
guardian or trustee, please
add your title as such. If
executed by a corporation,
the proxy should be signed
by a duly authorized
person, stating his or her
title or authority.
Signature:___________________________
Dated:_________________________,1997
<PAGE>
BIOSAFE INTERNATIONAL, INC.
Proxy for Annual Meeting of Stockholders, October 24, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Philip Strauss and Robert Rivkin, and
each of them, as Proxies of the undersigned, with full power of substitution,
and authorizes each of them to represent and to vote all shares of Preferred
Stock of BioSafe International, Inc. (the "Company") held by the undersigned as
of the close of business of September 10, 1997 at the Annual Meeting of
Stockholders to be held at Goodwin, Procter & Hoar LLP, 53 State Street, Second
Floor Conference Center, Boston, Massachusetts on Friday, October 24, 1997, at
10:00 am, local time, and at any adjournments or postponements thereof. The
undersigned hereby acknowledge(s) receipt of a copy of the accompanying Notice
of Annual Meeting of Stockholders, the Proxy Statement with respect thereto and
the Company's 1996 Annual Report to Stockholders, and hereby revoke(s) any proxy
or proxies heretofore given. This proxy may be revoked at any time before it is
executed. Please mark boxes with an X in blue or black ink.
1. To elect the following persons as Directors:
David Breazzano, Charles Johnston, Jay Matulich,
Judy K. Mencher, William B. Philipbar, Robert Rivkin and
Philip Strauss.
FOR all nominees WITHHELD from all nominees
FOR, except vote withheld form the following nominees(s)
________________________
2. To approve a change in the Company's state of incorporation
from Nevada to Delaware including a change of corporate name
and related changes to the certificate of incorporation and
bylaws, as described in the Proxy Statement.
FOR AGAINST ABSTAIN
3. To approve an amendment to the Company's 1995 Stock Option
and Incentive Plan (the "1995 Plan") to increase the number of
shares of the Company's Common Stock available for issuance
under the 1995 Plan, as described in the Proxy Statement.
FOR AGAINST ABSTAIN
4. To approve an amendment to the Company's 1995 Stock Option
Plan for Non-Employee Directors to provide newly-elected
non-employee directors an option to purchase shares of the
Company's common stock upon election, as described in the
Proxy Statement.
FOR AGAINST ABSTAIN
<PAGE>
5. To ratify the selection of KPMG Peat Marwick, L.L.P.
as the independent auditors of the Company for the fiscal year
ending December 31, 1996.
FOR AGAINST ABSTAIN
When properly executed, this proxy will be voted in the manner directed
herein by the undersigned stockholder(s). If no director is given, this proxy
will be voted for the election of all the nominees listed in Proposal 1 and for
the items described in Proposals 2, 3, 4, and 5 and at the Proxies' discretion
upon such other business as may properly come before the meeting. PLEASE SIGN,
DATE AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
Please sign name
exactly as shown.
Where there is
more than one
holder, each
should sign the
proxy. When
signing as an
attorney,
administrator,
executor, guardian
or trustee, please
add your title as
such. If executed
by a corporation,
the proxy should
be signed by a
duly authorized
person, stating
his or her title
or authority.
Signature:___________________________
Dated:_________________________,1997
<PAGE>
