<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
HANDEX ENVIRONMENTAL RECOVERY, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
HANDEX ENVIRONMENTAL RECOVERY, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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<PAGE> 2
HANDEX ENVIRONMENTAL RECOVERY, INC., 500 Campus Drive, P.O. Box 451,
Morganville, New Jersey 07751-0451 (908) 536-8500
NOTICE OF ANNUAL STOCKHOLDERS' MEETING
TO BE HELD MAY 9, 1995
To Our Stockholders:
The Annual Meeting of Stockholders (the "Meeting") of Handex Environmental
Recovery, Inc. (the "Company") will be held at the Sheraton Eatontown Hotel and
Conference Center, 6 Industrial Way East and Route 35, Eatontown, New Jersey, on
Tuesday, May 9, 1995, at 10:00 a.m., EDT, to consider and act upon the
following:
1. The election of two Directors whose three-year term of office will
expire in 1998;
2. A proposal to change the name of Company to Handex Corporation;
3. A proposal to ratify the selection of KPMG Peat Marwick LLP as the
Company's independent auditors for 1995; and
4. The transaction of such other business as may properly come before
the Meeting or any adjournments thereof.
Holders of Common Stock of record at the close of business on March 31,
1995 are entitled to notice of and to vote at the Meeting.
Whether or not you expect to be personally present at the Meeting, please
be sure that the enclosed proxy is properly marked, signed and dated, and
returned without delay in the enclosed prepaid envelope. Such action will not
limit your right to vote in person or to attend the Meeting, but will ensure
your representation if you cannot attend.
By Order of the Board of Directors,
STUART O. SMITH
Secretary
April 17, 1995
<PAGE> 3
HANDEX ENVIRONMENTAL RECOVERY, INC.
500 Campus Drive
Morganville, NJ 07751
------------------
PROXY STATEMENT
MAILED ON APRIL 17, 1995
------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 9, 1995
Proxies in the form enclosed with this Proxy Statement are solicited by the
Board of Directors of Handex Environmental Recovery, Inc., a Delaware
corporation (the "Company"), for use at the Annual Meeting of Stockholders to be
held on Tuesday, May 9, 1995, and any adjournments thereof. The time, place and
purposes of the Annual Meeting are stated in the Notice of Annual Meeting which
accompanies this Proxy Statement.
Only stockholders of record as of March 31, 1995 will be entitled to vote
at the Meeting or any adjournments thereof. As of that date, 6,865,212 shares of
Common Stock, par value $.01 per share (the "Common Stock"), of the Company were
issued and outstanding. Each share of Common Stock outstanding as of the record
date will be entitled to one vote, and stockholders may vote in person or by
proxy. The Company's Certificate of Incorporation (the "Certificate") does not
provide for cumulative voting rights. Execution of a proxy will not in any way
affect a stockholder's right to attend the Meeting and vote in person. Any
stockholder has the right to revoke a proxy by written notice to the Secretary
of the Company at any time before it is exercised, including by executing
another proxy, bearing a later date, or by attending the Meeting and voting in
person.
A properly executed proxy returned in time to be cast at the meeting will
be voted in accordance with the instructions contained thereon, if it is
returned duly executed and is not revoked. If no choice is specified on the
proxy, it will be voted "FOR" the election of each of the individuals nominated
by the Board of Directors and "FOR" the other proposals set forth in the Notice
of Annual Meeting.
At the Annual Meeting, in accordance with the Delaware General Corporation
Law and the Company's Certificate of Incorporation, the inspectors of election
appointed by the Board of Directors for the Annual Meeting will determine the
presence of a quorum and will tabulate the results of stockholder voting.
Pursuant to the Company's By-Laws, at the Annual Meeting the holders of a
majority of the outstanding shares of the Company's Common Stock entitled to
vote at the meeting, present in person or by proxy, constitute a quorum. The
shares represented at the Annual Meeting by proxies which are marked, with
respect to the election of Directors, as "withheld" or, with respect to any
other proposals, "abstain," will be counted as shares present for purposes of
determining whether a quorum is present.
Under the rules of the New York Stock Exchange, brokers who hold shares in
street name for beneficial owners have the authority to vote on certain items
when they have not received instructions from such beneficial
1
<PAGE> 4
owners. Under applicable Delaware law, if a broker returns a proxy and has not
voted on a certain proposal, such broker non-votes will count for purposes of
determining whether a quorum is present.
Pursuant to the Company's By-Laws, at the Annual Meeting, a plurality of
the votes cast is sufficient to elect a nominee as a Director. In the election
of Directors, votes may be cast in favor or withheld; votes that are withheld or
broker non-votes will have no effect on the outcome of the election of
Directors.
Pursuant to the Company's By-Laws, all other questions and matters brought
before the meeting (except for the amendment to the Certificate) will be decided
by the vote of the holders of a majority of the outstanding shares entitled to
vote thereon present in person or by proxy at the meeting, unless otherwise
provided by law or by the Certificate. In voting on matters other than the
election of Directors, votes may be cast in favor, against or abstained.
Abstentions will count as present for purposes of the proposal on which the
abstention is noted and will have the effect of a vote against the proposal.
Broker non-votes, however, are not counted as present and entitled to vote for
purposes of determining whether a proposal (other than the amendment to the
Certificate of Incorporation) has been approved and will have no effect on the
outcome of such proposal. The amendment to the Company's Certificate requires
the approval of a majority of the outstanding shares of Common Stock of the
Company. Abstentions and broker non-votes will have the same effect as a vote
against the proposed amendment to the Certificate.
The cost of soliciting proxies in the form accompanying this Proxy
Statement will be borne by the Company. In addition to solicitation by mail,
proxies may be solicited by Directors, officers and regular employees of the
Company in person or by mail, telephone, or telegraph, following the original
solicitation.
SHARE OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
The following table sets forth information with respect to Common Stock
owned on March 31, 1995 by each person known by the Company to own beneficially
more than 5% of the Company's outstanding Common Stock at such date, the number
of shares owned by each such person and the percentage of the outstanding shares
represented thereby. The table also lists beneficial ownership of Common Stock
by each of the Company's Directors, each nominee for election as a Director,
each executive officer named in the cash compensation table set forth in this
proxy statement, and all Directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares
Names and Address of Beneficially Percent of
Beneficial Owner Owned Class
- ---------------------------------------- ------------ ----------
<S> <C> <C>
Curtis Lee Smith, Jr.................... 1,344,275 19.6%
500 Campus Drive
Morganville, NJ 07751
Stuart O. Smith......................... 1,635,290 23.81
500 Campus Drive
Morganville, NJ 07751
Gregory J. Reuter(1).................... 112,500 1.6
Thomas J. Bresnan(2).................... 101,625 1.5
David A. Goldfinger(3).................. 72,435 1.1
John T. St. James(1).................... 22,750 *
Richard L. Osborne(1)................... 2,250 *
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
Shares
Names and Address of Beneficially Percent of
Beneficial Owner Owned Class
- ---------------------------------------- ------------ ----------
<S> <C> <C>
William H. Heller(4).................... 7,000 *
Scott R. Wilson(4)...................... 6,000 *
P. Craig Modesitt(1).................... 4,000 *
All Directors and Executive Officers
as a Group (12)....................... 3,313,125 46.4%
</TABLE>
- ---------------
* Less than 1%.
(1) Represents shares which may be acquired upon the exercise of immediately
exercisable options.
(2) Mr. Bresnan's ownership figure includes 101,000 shares which may be acquired
upon the exercise of immediately exercisable stock options.
(3) Mr. Goldfinger's ownership figure includes 12,500 shares which may be
acquired upon the exercise of immediately exercisable options.
(4) Messrs. Wilson's and Heller's ownership figures include 5,000 shares each
which may be acquired upon the exercise of immediately exercisable options.
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes. Each class
initially consisted of two Directors until July 1, 1992 when the membership of
the Board was expanded to seven members with the election of Mr. William H.
Heller as a Class I Director. The Board was further expanded to eight members on
May 11, 1993, with the election of Mr. Thomas J. Bresnan as a Class II Director.
Each class of Directors is elected to a three-year term. At the Meeting, the
Class III Directors will be elected to a three-year term ending at the 1998
Annual Meeting.
Unless otherwise directed, the persons named in the accompanying proxy will
vote for the election of the two nominees set forth in the table below as Class
III Directors of the Company for a three-year term. In the event of the death or
inability to act of any of the nominees, the proxies will be voted for the
election of such other person as the Board of Directors may recommend. The Board
of Directors has no reason, however, to anticipate that this will occur. In no
event will the accompanying proxy be voted for more than two nominees or for
persons other than those named below and any such substitute nominee for either
of them.
The following table lists the nominees for election at the Meeting, the
Directors who will continue in office subsequent to the Meeting, and certain
other information with respect to each individual.
3
<PAGE> 6
NOMINEES FOR ELECTION FOR A THREE YEAR TERM ENDING IN 1998
<TABLE>
<CAPTION>
Name Age Principal Occupation and History
- ------------------------------ --- -------------------------------------------------
<S> <C> <C>
DAVID A. GOLDFINGER (1) 59 Director
Mr. Goldfinger has served as a Director of the
Company since its acquisition by NCS Holdings
Corporation ("NCS") in July 1986. Mr. Goldfinger
served as President of U.S. Consolidated, Inc., a
Cleveland, Ohio-based manufacturers'
representative agency, from 1966 to 1991. From
January 1992 to the present, Mr. Goldfinger has
served as President of M.S.C.I. Holdings, Inc., a
Tavernier, Florida-based private consulting and
investment corporation. Mr. Goldfinger has served
as a member of the Company's Compensation
Committee and Audit Committee during the term of
his directorship.
RICHARD L. OSBORNE (1) 56 Director
Mr. Osborne has served as a consultant to the
Company since its acquisition by NCS in July
1986, and was elected to the Company's Board of
Directors in January 1989. He has served as the
Executive Dean of the Weatherhead School of
Management, Case Western Reserve University,
Cleveland, Ohio, since 1971. Mr. Osborne is also
a management consultant, and serves on the Board
of Directors of Capitol American Financial
Corporation, a Cleveland, Ohio-based specialty
insurance provider, Myers Industries, Inc., an
Akron, Ohio-based manufacturer of plastic and
rubber parts for the automotive and other
industries and several privately held
corporations, including Ohio Savings Financial
Corporation, a Cleveland, Ohio-based savings and
loan holding company. Mr. Osborne has served as a
member of the Company's Compensation Committee
and Audit Committee during the term of his
directorship.
</TABLE>
4
<PAGE> 7
DIRECTORS CONTINUING IN OFFICE
<TABLE>
<CAPTION>
Name Age Principal Occupation and History
- ------------------------------ --- -------------------------------------------------
<S> <C> <C>
CURTIS LEE SMITH, JR. (2)(4) 67 Chairman of the Board,
Chief Executive Officer and Director
Mr. Smith has served as the Company's Chairman of
the Board and Chief Executive Officer and as a
Director since its acquisition by NCS Holding
Corporation ("NCS"), in July 1986, and had the
additional title and duties of President from
August 1989 through July 1992. Mr. Smith served
as President of National Copper & Smelting Co., a
Cleveland, Ohio-based manufacturer and
distributor of copper products, from 1962 to
1985, and as President of NCS, a Cleveland,
Ohio-based holding company which operated a
copper tubing importing and fabricating busi-
ness, from 1985 to 1988.
GREGORY J. REUTER (2) 43 Director and Senior Technical Advisor
Mr. Reuter joined the Company in July 1980 and
served as Executive Vice President of the Company
from August 1992 to February 1994, as a Vice
President and its Chief Technical Officer from
January 1989 to February 1994, its Senior
Technical Advisor since February 1994 and as a
Director since March 1989. Prior to joining the
Company, Mr. Reuter worked for the New Jersey
Department of Environmental Protection as a
hydrogeologist from 1977 to 1980.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
Name Age Principal Occupation and History
- ------------------------------ --- -------------------------------------------------
<S> <C> <C>
WILLIAM H. HELLER (2) 56 Director
Mr. Heller was formerly a partner with the public
accounting firm of KPMG Peat Marwick LLP from
February 1971 until December 1991, and currently
manages his own asset management firm, William H.
Heller & Associates. He was elected as a Director
on July 1, 1992, and has served as a member of
the Company's Audit Committee during the term of
his directorship. Mr. Heller also serves as a
Director of Capitol American Financial Corpo-
ration, a Cleveland, Ohio-based specialty
insurance provider, Ohio Savings Financial
Corporation, a Cleveland, Ohio-based savings and
loan holding company and Telarc International,
Inc., a Cleveland, Ohio-based distributor of
phonograph records and tapes.
STUART O. SMITH (3)(4) 62 Vice Chairman of the Board, Chief
Development Officer, Secretary and Director
Mr. Smith has served as a Director of the Company
since its acquisition by NCS in July 1986, as the
Company's Secretary since February 1989, as its
Chief Development Officer since March 1990 and as
Vice Chairman of the Board since August 1992. Mr.
Smith served as a Vice President from July 1986
to August 1992. Mr. Smith also served as Vice
President of National Copper & Smelting Co. from
1962 to 1985 and as Vice President of NCS from
1985 to 1988.
THOMAS J. BRESNAN (3) 42 President, Chief Operating Officer and Director
Mr. Bresnan joined the Company in August 1992 and
has served as the Company's President and Chief
Operating Officer since that time. Mr. Bresnan
has served as the Chairman and Chief Executive
Officer of New Horizons Education Corporation
since its acquisition by the Company in August
1994. Prior to joining the Company, Mr. Bresnan
served in various executive, marketing, financial
and administrative positions for Capitol American
Life Insurance Company, a Cleveland, Ohio-based
specialty insurance provider, from 1984 to 1991.
Mr. Bresnan served as President and Chief
Operating Officer of Capitol American Life
Insurance Company during 1991. From January to
August 1992, Mr. Bresnan was President and Chief
Executive Officer of Glenbrook Group, Inc., a
Cleveland, Ohio-based company seeking acquisition
opportunities. Mr. Bresnan was elected a Director
in May 1993.
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
Name Age Principal Occupation and History
- ------------------------------ --- -------------------------------------------------
<S> <C> <C>
SCOTT R. WILSON (3) 43 Director
Mr. Wilson has served as principal outside legal
counsel to the Company since its acquisition by
NCS in July 1986. Mr. Wilson has been with the
law firm of Calfee, Halter & Griswold, Cleveland,
Ohio, since 1977, and has been a partner in such
firm since 1985. His practice focuses on general
corporate and tax law. He was elected a Director
in May 1991.
<FN>
- ---------------
(1) Term as Director expires in 1995; nominee for a three-year term expiring in
1998.
(2) Term as Director expires in 1996.
(3) Term as Director expires in 1997.
(4) Curtis Lee Smith, Jr. and Stuart O. Smith are brothers.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has two standing Committees: the Audit Committee and
the Compensation Committee.
The Audit Committee, of which Messrs. David A. Goldfinger, Richard L.
Osborne and William H. Heller are members, oversees the accounting functions of
the Company, including matters related to the appointment and activities of the
Company's auditors. The Audit Committee met twice during the year ended December
31, 1994.
The Compensation Committee, of which Messrs. Curtis Lee Smith, Jr., David
A. Goldfinger and Richard L. Osborne are members, reviews and makes
recommendations, as well as certain decisions concerning executive salaries,
bonuses and the Company's stock option plans. The members of the Compensation
Committee have renounced their right to receive grants of options under any
stock option plan maintained by the Company during the period of their service
on the Compensation Committee and for a period of one year thereafter. The
Compensation Committee met five times during the year ended December 31, 1994.
The Board of Directors of the Company held seven meetings during 1994. All
of the Directors attended at least 85% of the meetings of the Board of Directors
and each Committee on which each served.
The Company pays a quarterly retainer of $1,000, plus $1,000 per Board
meeting attended, $1,000 for each Committee meeting which is not held in
conjunction with a Board meeting, and $250 for every meeting held via telephone,
to all Directors who are not employees of the company. Directors who are
employees of the Company do not receive quarterly retainers or meeting fees.
In January 1989, the Compensation Committee granted Mr. Osborne and Mr.
Goldfinger options to acquire 6,250 shares of Common Stock and 12,500 shares of
Common Stock, respectively, under the Company's Outside Directors Stock Option
Plan. These options became exercisable on July 9, 1989 at an option price of
$11.20 per share. In 1992, Messrs. Wilson and Heller each were granted
immediately exercisable options to acquire 5,000 shares of Common Stock at an
option price of $6.50 per share. As of March 31, 1995 options granted to
individuals pursuant to the Outside Directors Plan were outstanding to purchase
24,750 shares of common stock at an average price of $9.30 per share.
7
<PAGE> 10
Messrs. Heller and Osborne provide certain consulting services to the
Company. During 1994, the Company paid Messrs. Heller and Osborne $24,000 and
$30,000, respectively, in fees for such services. Mr. Wilson is a member of the
firm of Calfee, Halter & Griswold, which provides legal services to the Company
on an ongoing basis. The Company leases its Florida facilities from Xednah
Investments, a general partnership whose partners are Curtis Lee Smith, Jr. and
Stuart O. Smith. The Company paid $36,000 in rent to Xednah Investments during
fiscal 1994. The Company believes that its transactions with Directors are on
terms no less favorable to it than those that would have been available in
similar transactions with unaffiliated third parties.
COMPENSATION OF EXECUTIVE OFFICERS
The table below shows information concerning the annual and long-term
compensation for services in all capacities to the Company for each of the past
three fiscal years, of all those persons, who were, (i) the Chief Executive
Officer, and (ii) the other four most highly compensated executive officers of
the Company (the "Named Officers") during fiscal 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------------------- ------------ All Other
Name and Principal Position Year Salary Bonus Other(1) Options/SARs Compensation(2)
- --------------------------------------- ----- -------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Curtis Lee Smith, Jr. 1994 $163,077 $ -- $ -- -- $ 10,601
Chairman of the Board, Chief 1993 155,428 -- -- -- 10,673
Executive Officer and Director 1992 165,656 -- -- -- 8,674
Stuart O. Smith 1994 152,885 -- -- -- 4,414
Vice Chairman of the Board, Chief 1993 146,889 -- -- -- 4,414
Development Officer, Secretary 1992 148,271 -- -- -- 4,414
and Director
Thomas J. Bresnan 1994 208,173 -- -- 220,000 4,620
President, Chief Operating Officer 1993 194,039 -- -- 50,000 2,971
and Director 1992 78,462(3) -- -- 130,000 --
John T. St. James 1994 144,596 -- -- -- 2,358
Vice President, Chief Financial Officer 1993 130,976 -- -- -- 2,993
and Treasurer 1992 116,520 -- -- 48,750 3,470
P. Craig Modesitt 1994 127,290 -- -- -- 1,731
Vice President, Sales and Marketing 1993 45,433(4) -- -- -- --
1992 -- -- -- -- --
<FN>
- ---------------
(1) No Named Officer received perquisites or other personal benefits having a
value exceeding the lesser of 10% of such executive salary and bonus for
1994, 1993 and 1992 or $50,000. Pursuant to the terms of Mr. Bresnan's
employment agreement, he received an interest free loan from the Company in
the amount of $250,000 payable on September 30, 1997. Had the loan carried a
market interest rate, Mr. Bresnan would have paid $16,858 in interest during
1994, $17,046 during 1993, and $5,722 during 1992.
(2) Amounts of All Other Compensation reported for Curtis Lee Smith, Jr., and
Stuart O. Smith represent premiums paid by the Company on insurance policies
for the benefit of such persons. Amounts of All Other Compensation reported
for Messrs. Bresnan, St. James and Modesitt represent the Company's matching
contribution under its 401(k) Profit Sharing Plan. The Company currently
matches each participating
8
<PAGE> 11
employee's contributions to the Plan to the extent of 50% of the first 6% of
the participant's salary reduction up to the maximum allowable under the
Internal Revenue Code.
(3) Mr. Bresnan joined the Company in August 1992. His annualized salary for
1992 was $200,000.
(4) Mr. Modesitt joined the Company in August 1993. His annualized salary for
1993 was $112,500.
</TABLE>
OPTION EXERCISES AND YEAR-END VALUES
The table below shows information with respect to the unexercised options
to purchase the Company's Common Stock granted in 1994 and prior years under the
Company's Key Employees Stock Option Plan (the "Employees Plan") to the Named
Officers and held by them at December 31, 1994. None of Named Officers exercised
any stock options during 1994.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY-OPTIONS AT
DECEMBER 31, 1994 DECEMBER 31, 1994*
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Curtis L. Smith, Jr...... -- -- $ -- $ --
Stuart O. Smith.......... -- -- -- --
Thomas J. Bresnan........ 101,000 299,000 59,250 157,000
John T. St. James........ 22,750 26,000 30,000 45,000
P. Craig Modesitt........ 4,000 16,000 3,500 14,000
- ---------------
<FN>
* Based on the difference between the exercise price of such options and the
closing price of a share of the Company's Common Stock on the NASDAQ National
Market System on such date ($8.375).
</TABLE>
OPTION GRANTS
The table below shows additional information on stock options granted in
1994 under the Key Employees Stock Option Plan to the Named Officers which are
reflected in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENTAGE OF VALUE AT ASSUMED ANNUAL
TOTAL OPTIONS RATES OF STOCK PRICE
GRANTED TO APPRECIATION FOR OPTION
EMPLOYEES EXERCISE OR TERM
IN BASE PRICE EXPIRATION -------------------------
NAME GRANTED(1) 1994 (PER SHARE) DATE 5% 10%
- ------------------------- ---------- ------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Curtis L. Smith, Jr...... -- -- $ -- -- $ -- $ --
Stuart O. Smith.......... -- -- -- -- -- --
Thomas J. Bresnan........ 220,000 87% 8.00 10/21/04 1,106,864 2,804,912
John T. St. James........ -- -- -- -- -- --
P. Craig Modesitt........ -- -- -- -- -- --
- ---------------
<FN>
(1) Represents options awarded under the Employees Plan. Such options vest at
the rate of 20% per year commencing on the first anniversary of the date of
grant and were awarded at an exercise price equal to the fair market value
of a share of Common Stock on the date of grant. The options expire upon the
tenth
9
<PAGE> 12
anniversary of the date of grant. In general, employees may exercise vested
options awarded under the Employees Plan for a period of three months
following the date of the cessation of their employment with the Company.
</TABLE>
EMPLOYMENT AGREEMENTS
The Company is a party to an employment agreement with Thomas J. Bresnan,
its President and Chief Operating Officer. Mr. Bresnan's employment agreement
was entered into when he joined the Company on August 3, 1992. The agreement
provides that Mr. Bresnan will receive a base salary, subject to annual review,
of $200,000 per year. In connection with the execution of the agreement, Mr.
Bresnan received options to purchase an aggregate of 130,000 shares of Common
Stock under the Employees Plan. Pursuant to the terms of Mr. Bresnan's
agreement, he also received a five-year interest-free loan of $250,000 towards
the purchase of a home in New Jersey. The loan is secured by a mortgage on Mr.
Bresnan's residence. In the event that Mr. Bresnan's employment is terminated by
the Company without cause during the three years subsequent to the date of the
employment agreement, the Company will be obligated to continue to pay his
salary for a period of one year subsequent to the date of such termination. The
agreement also obligates the Company to provide certain health insurance and
life insurance benefits for the duration of such agreement. At the time of
execution of his employment agreement, Mr. Bresnan also entered into an
agreement with the Company containing confidentiality and non-competition
provisions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors includes Curtis Lee
Smith, Jr., the Company's Chairman and Chief Executive Officer. The Company
leases its Florida facility from Xednah Investments, a general partnership whose
partners are Curtis Lee Smith, Jr. and Stuart O. Smith. The Company paid $36,000
in rent to Xednah Investments during 1994.
Richard L. Osborne, a member of the Compensation Committee of the Board of
Directors, provides certain consulting services to the Company. Mr. Osborne
received $30,000 in consulting fees from the Company for 1994.
The Company believes that these transactions were on terms no less
favorable than would have been available in similar transactions with
unaffiliated third parties.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee of the Board of Directors is responsible for
reviewing and implementing the Company's existing and proposed executive
compensation arrangements and plans. The current members of the Compensation
Committee are Richard L. Osborne, David A. Goldfinger and Curtis Lee Smith, Jr.
Messrs. Osborne and Goldfinger are non-employee Directors of the Company. Mr.
Smith is the Company's Chairman and Chief Executive Officer.
Set forth below is a discussion of the Company's compensation philosophy,
together with a discussion of the factors considered by the Committee in
determining the compensation of the Company's Chief Executive Officer and other
executive officers named in this proxy statement for its 1994 fiscal year.
10
<PAGE> 13
COMPENSATION PHILOSOPHY
The Company's compensation programs are intended to provide its
executive officers with a mix of salary, benefits and incentive compensation
arrangements that are: (i) consistent with the interests of stockholders; (ii)
competitive with those provided by other companies in the industry; (iii)
commensurate with each executive's performance, experience and
responsibilities; and (iv) sufficient to attract and retain highly qualified
executives. In making its recommendations concerning adjustments to salaries
and awards under other compensation plans, the Committee considers the
financial condition and performance of the Company during the prior year and
the Company's success in achieving financial, operational and other strategic
objectives. The Committee also makes an assessment of the contributions of the
individual executive officer to the Company's performance and to the
achievement of its objectives, as well as the success of the executive in
achieving objectives which may have been set for such individual. In assessing
individual performance, the Committee also seeks to recognize individual
contributions during periods when the Company experiences adverse business or
financial conditions.
For purposes of determining whether the Company's compensation packages are
competitive, the companies with which the Company compares itself are those
included in the peer group index set forth in the Stockholder Return Performance
Presentation contained elsewhere in this proxy statement. While the Committee
does not establish a targeted range for Company's overall executive compensation
within the peer group, its review of publicly available information for the
years 1990 through 1993 indicates that the compensation level of the Company's
Chief Executive Officer has historically been significantly below the average
compensation paid to Chief Executive Officers of peer group companies. Such
information also indicates that the base salary levels for the Company's other
executive officers have been generally comparable with those provided to similar
executives at peer group companies, while the overall amount of bonuses paid to
other executives by the Company have been equal to or lower than the bonuses
paid to peer group executives. Option awards to peer group executives vary
widely from company to company and from year to year, although the Company's
option awards to its executive officers are generally lower than awards by
members of the peer group. The Company's stock significantly outperformed the
peer group during the period prior to fiscal 1992, and since that time its
performance has been below that of the peer group.
Each component of an executive's compensation package is intended to assist
in attaining one or more of the objectives outlined above. The Company attempts
to provide its executives with base salaries and benefits that are competitive
with those of comparable companies and commensurate with the performance,
experience and responsibilities of each executive. Through salary adjustments
and bonuses, the Company also seeks to provide its executives with incentives to
improve the Company's financial and operational performance by providing a
method for rewarding individual performance. Finally, the Company's Key
Employees' Stock Option Plan is intended to provide executive officers with an
opportunity to acquire a proprietary interest in the Company, thereby providing
these individuals with increased incentive to promote the long-term interests of
the Company's stockholders.
While the Committee seeks to assure that the Company's compensation
programs further the objectives described above and, in making compensation
decisions, considers the various factors outlined above, it does not take a
highly formalized or objective approach to determining compensation. Instead,
the Committee gives consideration to these various factors in subjectively
evaluating the compensation of each individual executive. While the subjective
nature of the Committee's decisions makes it difficult to specifically identify
the relative importance of each of these various factors, in making compensation
decisions for fiscal 1994, the Committee generally gave greater weight to the
Company's performance, as measured by its net income, and its subjective
assessment of individual performance, than to other factors.
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<PAGE> 14
In 1993, Congress adopted Section 162(m) of the Internal Revenue Code.
Section 162(m) limits the ability of public companies to deduct compensation in
excess of $1,000,000 paid to certain executive officers, unless such
compensation is "performance based" within the meaning of Section 162(m). As of
the date of this proxy statement, the Internal Revenue Service has not issued
final regulations interpreting Section 162(m). At such time as final regulations
are promulgated, the Committee will review the impact of Section 162(m) on the
Company's existing compensation plans and determine what revisions, if any, need
to be made to such plans.
1994 COMPENSATION DECISIONS
Base Salary and Benefits. The base salaries and benefits provided to
executive officers who were not parties to employment contracts with the Company
for the 1994 fiscal year were established by the Committee in accordance with
the compensation philosophy discussed above. Since one executive was a party to
an employment agreement with the Company entered into prior to the 1994 fiscal
year, his minimum base salary level for 1994 was set by the terms of such
agreement. The Committee determined to make individual salary adjustments with
respect to certain executive officers of the Company, based on the Committee's
subjective evaluation of the executive's performance and his contributions to
the Company.
Bonuses. After considering the Company's performance and the various other
factors discussed above, the Committee determined not to pay any discretionary
bonuses to executive officers with respect to fiscal 1994.
Stock Options. During the 1994 fiscal year, the Company awarded options to
purchase an aggregate of 220,000 shares of Common Stock to an executive officer
of the Company. The award was made at the fair market value of a share of Common
Stock on the date of grant and becomes exercisable over a five year period
commencing on the first anniversary of the date of grant. During the 1994 fiscal
year, the Committee determined that it was desirable to increase the long term
incentives provided to one of the current executive officers. The Committee
based its decision primarily on its subjective assessment of the individual's
performance and its desire to reward this performance. The number of shares
subject to the option was determined on the basis of the Committee's subjective
assessment of the individual's contributions to the Company and the appropriate
level of his long-term incentive compensation. The executive's current share
ownership position and the number of options previously awarded to him were
considered by the Committee in determining the appropriate level of his
long-term incentive compensation.
CHIEF EXECUTIVE OFFICER COMPENSATION
Curtis Lee Smith, Jr.'s compensation is determined on the basis of the
Committee's subjective assessment of his performance, measured by the Company's
financial condition, results of operations and success in achieving strategic
objectives. The Committee also considers the responsibilities associated with
Mr. Smith's position and the level of compensation provided to Chief Executive
Officers of other companies in the environmental remediation industry. Mr. Smith
does not participate in the Committee's actions with respect to his
compensation.
Although the Committee reviews Mr. Smith's compensation on an annual basis,
no adjustments were made to Mr. Smith's salary during 1994. Mr. Smith's base
salary was last adjusted in December 1990, at which time the Committee voted
(with Mr. Smith abstaining) to increase his salary from $175,000 to $200,000.
Mr. Smith declined this salary increase. In June 1992, Mr. Smith voluntarily
reduced his salary from $175,000 to $160,000 in connection with a restructuring
in the Company's business and related cost-cutting measures. As with the
Company's other executive officers, the Committee determined not to pay Mr.
Smith a bonus during 1994.
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<PAGE> 15
Mr. Smith is the beneficial owner of approximately 20% of the Common Stock.
As a consequence of his significant ownership interest in the Company, Mr. Smith
elected, at the time of the Company's initial public offering, to renounce any
rights that he might otherwise have to participate in the Company's stock option
plans. Accordingly, Mr. Smith did not receive any option awards with respect to
fiscal 1994.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Richard L. Osborne
David A. Goldfinger
Curtis Lee Smith, Jr.
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<PAGE> 16
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing yearly percentage change in the
cumulative stockholder return on the Company's Common Stock against the
cumulative total return of the NASDAQ Market Index (U.S.), and a
Company-determined peer group for the period commencing December 30, 1989 and
ended December 31, 1994. The Companies included in the peer group are Canonie
Environmental Services, Inc., Groundwater Technology, Inc., Sevenson
Environmental, International Technology Corporation, and OHM Corporation. The
graph assumes that the value of the investment in the Company's Common Stock and
each index was $100 at December 30, 1989 and that all dividends, if any, were
reinvested.
COMPARISON OF TOTAL CUMULATIVE TOTAL RETURN
HANDEX COMMON STOCK, NASDAQ MARKET INDEX AND
COMPANY DETERMINED PEER GROUP INDEX
<TABLE>
<CAPTION>
HANDEX
MEASUREMENT PERIOD ENVIRON- PEER GROUP NASDAQ MARKET
(FISCAL YEAR COVERED) MENTAL INDEX INDEX
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 127.10 99.26 81.12
1991 204.03 87.76 104.14
1992 56.45 72.77 105.16
1993 48.39 66.85 126.14
1994 54.03 62.69 132.44
</TABLE>
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<PAGE> 17
PROPOSAL TO APPROVE AND ADOPT AN AMENDMENT TO
THE CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY
GENERAL
On February 13, 1995, the Board of Directors unanimously adopted, subject
to stockholder approval, an amendment to the Certificate to change the name of
the Company to "Handex Corporation." The current name of the Company is "Handex
Environmental Recovery, Inc."
Historically, the Company's operations have focused exclusively on the
environmental remediation business. However, in August, 1995 the Company
purchased the assets of a computer training business located in Santa Ana,
California and the stock of the franchisor of that business. Since that time,
the Company has operated in two distinct business segments: the environmental
services segment and the educational segment. The Company's education business
operates through its New Horizons Education Corporation subsidiary and other
indirect wholly owned subsidiaries, while its environmental segment continues to
be operated through various other operating subsidiaries. Although education
segment revenues represented a relatively small component of the Company's net
operating revenues during fiscal 1994, the Company believes that the education
segment offers significant opportunities for future growth.
The Board of Directors has determined that, because the Company no longer
operates exclusively in the environmental services industry and because the
Board believes that the education segment provides significant growth
opportunities, the Company's name should be modified. The proposed new name -
Handex Corporation - better reflects the more diversified nature of the
Company's current operations.
RECOMMENDATION; REQUIRED VOTE
The Board of Directors recommends a vote FOR the proposal. The persons
named in the accompanying Proxy or their substitutes will vote such Proxy for
this proposal unless it is marked to the contrary. A favorable vote of shares
representing a majority of the total number of shares of Common Stock of the
Company issued and outstanding as of the record date is required to approve and
adopt the amendment to the Company's Certificate.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has recommended that KPMG Peat Marwick LLP,
independent certified public accountants, serve as the Company's independent
auditors for the year ending December 30, 1995. Such firm has served as the
Company's auditors since 1986. It is expected that a member of the firm will be
present at the Meeting, and will be available to respond to appropriate
questions.
The Board of Directors recommends that you vote "FOR" ratification of its
appointment of KPMG Peat Marwick LLP as the Company's independent auditors for
the year ending December 30, 1995. If the stockholders reject the nomination of
KPMG Peat Marwick LLP, the Board of Directors will reconsider its selection.
OTHER MATTERS
The Board of Directors is not aware of any matter to come before the
Meeting other than those mentioned in the Notice of Annual Meeting of
Stockholders. If other matters, however, properly come before the Meeting, it is
15
<PAGE> 18
the intention of the persons named in the accompanying proxy to vote in
accordance with their best judgment on such matters insofar as the proxies are
not limited to the contrary.
Any stockholder who wishes to submit a proposal for inclusion in the proxy
materials to be distributed by the Company in connection with its Annual Meeting
of Stockholders to be held in 1996 must do so no later than December 20, 1995.
To be eligible for inclusion in the 1996 proxy materials of the Company,
proposals must conform to the requirements set forth in Regulation 14A under the
Securities Exchange Act of 1934.
Upon the receipt of a written request from any stockholder, the Company
will mail, at no charge to the stockholder, a copy of the Company's Annual
Report on Form 10-K, including financial statements and schedules required to be
filed with the Securities and Exchange Commission pursuant to Rule 13a-1 under
the Securities Exchange Act of 1934, for the Company's most recent year. Written
requests for such report should be directed to:
Investor Relations Department
Handex Environmental Recovery, Inc.
500 Campus Drive
Morganville, NJ 07751
You are urged to sign and return your proxy promptly in the enclosed return
envelope to make certain your shares will be voted at the Meeting.
By order of the Board of Directors,
STUART O. SMITH
Secretary
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<PAGE> 19
HANDEX ENVIRONMENTAL RECOVERY, INC.
500 CAMPUS DRIVE
P MORGANVILLE, NJ 07751
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
The undersigned hereby appoints each of Curtis Lee Smith, Jr.,
Stuart O. Smith and John T. St. James, as proxy, each with the
O power to appoint his substitute, and hereby authorizes each of them
to represent and to vote as designated below, all shares of Common
Stock of the Company held of record by the undersigned on March 31,
X 1995, at the Annual Meeting of Stockholders to be held on May 9, 1995,
or any adjournment thereof.
Y
<TABLE>
<S> <C>
Election of Directors, Nominees: (change of address)
David A. Goldfinger, Richard L. Osborne _______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
(If you have written in the above space, please
mark the corresponding box on the reverse
side of this card.)
</TABLE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3. -------------
| SEE REVERSE |
| SIDE |
-------------
<PAGE> 20
<TABLE>
<S> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of / / / / 2. Approve the / / / / / / 3. Ratify the appointment / / / / / /
Directors change of the of KPMG Peat Marwick
(see reverse) name of the LLP as independent
Company to auditors of the Company
Handex for 1995.
Corporation.
For, except vote withheld from the following nominee(s): 4. In their discretion,
each proxy is authorized
_______________________________________________________ to vote upon such other
business as may properly
come before the meeting.
Change / /
of
Address
Attend / /
Meeting
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD USING THE
ENCLOSED ENVELOPE.
SIGNATURE(S)_______________________________________ DATE__________
SIGNATURE(S)_______________________________________ DATE__________
</TABLE>
NOTE: Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as an attorney,
executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
