<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to (S)240.14a-11(c) or (S)240.14a-12
EV Environmental, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(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 transactions applies:
________________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-111:
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid
________________________________________________________________________________
[ ] 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:
________________________________________________________________________________
/1/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
EV ENVIRONMENTAL, INC.
1465 Post Road East
Westport, Connecticut 06880
____________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 16, 1996
___________________
To the Shareholders of
EV ENVIRONMENTAL, INC.
Notice is hereby given that the Annual Meeting of Stockholders of EV
Environmental, Inc. (the "Company") will held at the offices of Rich, May,
Bilodeau & Flaherty, P.C., The Old South Building, 294 Washington Street,
Boston, Massachusetts 02108 on December 16, 1996, at 9:00 a.m., local time, for
the purpose of considering and voting upon the following matters:
1. To elect a Board of four Directors to serve until the next Annual
Meeting of Stockholders and until their successors are duly elected
and qualified; and
2. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to increase the number of authorized
shares of common stock from 10,000,000 shares to 20,000,000 shares.
3. To approve the adoption of the Amended and Restated 1992 Stock
Option Plan of the Company.
4. To transact such other business as may properly come before the
meeting.
Only stockholders of record as of the close of business on November 12,
1996 are entitled to receive notice of and to vote at the meeting or any
adjournment thereof.
By order of the Board of Directors
Daniel T. Clark
Secretary
November 18, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING AND VOTE YOUR SHARES.
IN THE EVENT YOU CANNOT ATTEND, PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY IN
THE ENCLOSED SELF-ADDRESSED ENVELOPE. A STOCKHOLDER WHO EXECUTES AND RETURNS A
PROXY IN THE ACCOMPANYING FORM HAS THE POWER TO REVOKE SUCH PROXY AT ANY TIME
PRIOR TO THE EXERCISE THEREOF.
<PAGE>
EV ENVIRONMENTAL, INC.
1465 POST ROAD EAST
WESTPORT, CONNECTICUT 06883
_______________
PROXY STATEMENT
_______________
The accompanying proxy is solicited by the Board of Directors of EV
Environmental, Inc. (the "Company"), for use at the Annual Meeting of
Stockholders to be held on December 16, 1996 and any adjournments thereof (the
"Annual Meeting").
PROXY SOLICITATION AND EXPENSE
Proxies in the accompanying form, properly executed and received prior
to the meeting and not revoked, will be voted as specified, or if no
instructions are given, will be voted in favor of the proposals described
herein. Proxies may be revoked at any time, prior to being voted, by written
notice to the Secretary of the Company. Solicitation of proxies may be made by
personal interview, mail, telephone or telegraph by directors, officers and
employees of the Company. The expense of soliciting proxies will be borne by
the Company. The Company may also request banking institutions, brokerage
firms, custodians, trustees, nominees and fiduciaries to forward solicitation
material to the beneficial owners of the Company's Common Stock. The
approximate date on which this Proxy Statement and the accompanying proxy card
will first be mailed to stockholders is November 18, 1996.
OUTSTANDING VOTING SECURITIES
AND PRINCIPAL HOLDERS THEREOF
Only stockholders of record at the close of business on November 12,
1996 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on that date, the Company had outstanding 3,081,026 shares of
Common Stock, with a par value of $.01, exclusive of treasury shares. The
presence at the meeting, in person or by proxy, of shareholders entitled to cast
at least a majority of the votes which all shareholders are entitled to cast on
each particular matter to be considered at the Annual Meeting will constitute a
quorum for the purpose of considering such matter. Each holder of Common Stock
of the Company will be entitled to one vote for each share held. Four Directors
are to be elected by the holders of the Common Stock.
The following table sets forth, as of November 7, 1996, information
with respect to beneficial ownership of Common Stock, Convertible Debentures and
Warrants of the Company by (1) each person who owns of record or is known by the
Company to own beneficially more than 5% of the common shares of the Company,
(2) by each director and certain executive officers of the Company and (3) by
all executive officers and directors as a group.
<PAGE>
<TABLE>
<CAPTION>
AMOUNT
AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENTAGE OF
BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP(1) CLASS OWNED
- ------------------------------------- ----------------- ------------ --------------
<S> <C> <C> <C>
Michael R. Cox Common Stock 238,598 (2) 7.6
1465 Post Road East Series A Warrants 5,000 (3) 1.1
Westport, CT 06880
(Director and 5% shareholder)
Dan L. Scroggins Common Stock 110,501 (4) 3.5
Pollution Control, Inc. Series A Warrants 8,000 1.8
7529 Sussex Drive
Florence, KY 41042
(Director and 5% shareholder)
Murdoch Heideman Common Stock 66,728 (5) 2.1
Pollution Control Engineering, Inc.
6 Autry, Suite B
Irvine, CA 92718
(Director)
Ralph A. Armstrong Common Stock 49,808 (6) 1.6
1465 Post Road East 9% Convertible 50,000 2.5
Westport, CT 06880 Debentures
(Director)
The Robins Companies, Inc. Common Stock 222,355 7.2
871 Michigan Avenue
Columbus, Ohio 42315
(5% shareholder)(7)
RBB Bank Aktiengesellschaft Common Stock 1,504,781 (8) 35.6
Leonhardstr. 5,8010 Graz
Austria
All executive officers and Common Stock 462,160 (9) 14.1
directors as a group Series A Warrants 13,000 2.9
(6 persons) 9% Convertible 50,000 2.5
Debentures
</TABLE>
(1) Except as otherwise stated, all holders of any shares have sole voting and
investment power with respect to such shares, and all holders having the
right to acquire shares will have sole voting and investment power upon the
acquisition of said shares.
2
<PAGE>
(2) Includes 38,523 shares held by Mr. Cox's retirement account, over which Mr.
Cox exercises sole investment and voting control and 52,967 shares issuable
upon the exercise of certain options and warrants.
(3) Includes 1,000 Series A Warrants held by Mr. Cox's retirement account, over
which Mr. Cox exercises sole investment and voting control.
(4) Includes 59,503 shares issuable upon the exercise of certain other options.
(5) Such shares are held by Mr. Heideman as co-trustee of the Murdoch Heideman
and Nadine Heideman Living Trust and 1,667 shares issuable upon the
exercise of certain options and include 52,967 shares issuable upon the
exercise of certain options held directly by Mr. Heideman.
(6) Includes 16,475 shares held by Mr. Armstrong's retirement account, over
which Mr. Armstrong exercises sole investment and voting control, 20,000
shares issuable upon conversion of the Company's 9% convertible securities
and 13,333 shares issuable upon the exercise of certain options.
(7) The Robins Companies, Inc. is controlled by Gary Robins and Gregg B.
Robins.
(8) Includes 1,132,308 shares issuable upon conversion of convertible
securities. The Company has noticed RBB of the conversion of the
convertible securities; RBB has disputed the Company's right to cause such
conversion. Shares held in the name of RBB are held for the account of
foreign investors. RBB represents that no beneficial owner represents 5%
of the outstanding voting securities of the Company.
(9) Includes 261,723 shares outstanding and 200,437 shares issuable upon the
exercise of options, warrants and conversion of 9% convertible securities.
PROPOSAL I
ELECTION OF DIRECTORS
At the Annual Meeting to which this proxy statement relates, four Directors
of the Company are to be elected. All Directors are elected to hold office
until the next annual meeting of the stockholders and until their successors
shall have been duly elected and qualified, or until their earlier resignation
or removal from the Board. The affirmative vote of a majority of the shares
present at a meeting at which a quorum is present is required for the election
of a Director. Unless a stockholder indicates otherwise, the shares represented
by each proxy, executed in the accompanying form of proxy, will be voted by the
Proxy Committee for the election of the nominees listed below. In the event of
a vacancy in the list of nominees (which event is not now contemplated), the
Proxy Committee will vote for the election of a nominee acceptable to the
remaining nominees. Additional nominations may be made by any stockholder or
his proxy at the Annual Meeting.
Set forth below is certain information concerning the Board of Directors'
nominees for Directors.
NOMINEES FOR DIRECTORS TO BE ELECTED BY STOCKHOLDERS
- ----------------------------------------------------
<TABLE>
<CAPTION>
OFFICER OR
DIRECTOR
NAME AGE SINCE POSITION WITH THE COMPANY
- -------------- ------- ---------- ----------------------------------------------
<S> <C> <C> <C>
Michael R. Cox 49 1991 Chairman, President, Chief Executive Officer,
Chief Financial Officer and Director
Dan L. Scroggins 39 1991 Executive Vice President and Director
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
OFFICER OR
DIRECTOR
NAME AGE SINCE POSITION WITH THE COMPANY
- -------------- ------- ---------- ----------------------------------------------
<S> <C> <C> <C>
Murdoch Heideman 51 1993 President of PCE and Director
Ralph A. Armstrong 41 1994 Senior Vice President - Sales and Marketing
and Director since 1996
</TABLE>
PRINCIPAL OCCUPATIONS AND OTHER DIRECTORSHIPS HELD BY NOMINEES FOR DIRECTORS
- ----------------------------------------------------------------------------
Mr. Cox has been Chairman, President and Chief Executive Officer of the
Company since the merger of JBCH Acquisition Corp. ("JBCH") in December, 1991.
He had held the same positions with JBCH since June, 1991. Mr. Cox was a
director and Executive Vice President of Kimberly, Cox & Harnish, Inc., a
private investment firm, from prior to 1989 until 1993. He was Vice Chairman of
the Board of Hunter Environmental Services, Inc., a publicly traded
environmental services firm, in 1989, and President and Chief Executive Officer
from 1987 through 1988.
Mr. Scroggins was Chairman of the Board and President of North American
Environmental, Inc. from June, 1991 to October, 1991. Prior to that he was Vice
President and General Manager of such corporation beginning in 1986. Mr.
Scroggins has been an Executive Vice President of the Company and its
predecessor JBCH since October, 1991. He has been President of Pollution
Control since October, 1991.
Mr. Heideman has been a director of the Company since March, 1993. For
more than the last five years, he has been President of Pollution Control
Engineering, Inc. which in February, 1993 was acquired by merger into the
Company's wholly-owned subsidiary.
Mr. Armstrong joined the Company in February, 1994 as Senior Vice President
- - Sales and Marketing and was elected a director in March, 1996. He was
President of erca USA Inc. (a food processing and packaging equipment
manufacturer from 1991 to 1993. Prior to that he had held various positions
since 1979 with Continental Can Company, most recently Vice President of Sales
and Marketing at Continental Plastic Ventures.
The terms of office of all Directors of the Company are from the time of
election until the next annual meeting of stockholder and until their respective
successors are qualified as provided in the By-laws of the Company. All
officers held office at the pleasure of the Board of Directors. None of the
Company's Directors or executive officers has a family relationship with any
other Director or executive officer.
No director of the Company or nominee for director holds any directorship
in a company with a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or subject to the requirements of Section 15(d)
of such Act or any company registered as an investment company under the
Investment Company Act of 1940.
EXECUTIVE OFFICERS
- ------------------
The other executive officer of the Company is Jennifer L. Clark.
Ms. Clark (Age 32) has been Controller of the Company since January, 1992.
Prior to that she served as Controller of Lo-Mar Corporation beginning in May,
1991, Controller and Personnel Manager of ASI Technologies, Inc. (engineering)
beginning in 1989 and as Accounting and Agency Accounting Manager of United Way,
Dayton, Ohio (charity) from 1987 to 1989.
4
<PAGE>
MEETINGS AND COMMITTEES
During the calendar year ended December, 1995, there were three meetings of
the Board of Directors. In addition, the Board acted four times by unanimous
written consent. Each of the then serving directors of the Company attended all
meetings of the Board of Directors and of each committee of which he was a
member which were held in the last calendar year.
REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning remuneration paid or
accrued by the Company and its subsidiaries during the calendar year ended
December 31, 1995 for all executive officers including those as to whom the
total remuneration exceeded $100,000, and for all executive officers of the
Company as a group.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
NUMBER OF
OPTION
NAME AND PRINCIPAL POSITION YEAR SALARY AWARDS
<S> <C> <C> <C>
Michael R. Cox 1995 $130,000 20,000
Chairman, President and 1994 130,000
Chief Executive Office 1993 130,000
All Current Executive Officers 1995 452,760 77,000
As a Group 1994 547,616 60,000
1993 381,250 10,000
</TABLE>
During the year ended December 31, 1995 options were granted to the
following executive officers:
<TABLE>
<CAPTION>
Individual Grants
-------------------
Number of
Securities % of Total
Underlying Options Exercise Price Expiration
Name Options Granted ($/share) Date
- -------------------- ------------- ----------- -------------- ------------
<S> <C> <C> <C> <C>
Michael R. Cox 20,000 9% $ 3.50 2000
Ralph A. Armstrong 40,000 19% 3.50 2000
Dan L. Scroggins 10,000 5% 3.50 2000
Murdoch Heideman 5,000 2% 3.50 2000
Jennifer L. Clark 2,000 1% 3.50 2000
</TABLE>
5
<PAGE>
The aggregate option exercise in the last fiscal year and fiscal year end option
values for the named employee is presented as follows:
<TABLE>
<CAPTION>
Number
Securities Value of
Underlying unexercised in
Unexercised the Money
Options at Options at
Shares FY-End FY-End
Acquired on Exercisable/ Exercisable/
Name Exercise Value Realized Unexercisable Unexercisable
- ---------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Michael R. Cox 0 N/A 46,300 0
</TABLE>
The Company qualifies as a Small Business Issuer.
Mr. Cox is paid at the rate of $130,000 per year pursuant to a one year
extension of a three-year employment agreement.
The Company has adopted an incentive compensation program whereby key
employees will participate in bonuses equal to one-third of pre-tax profits for
1996. Individual awards are at the discretion of the Board of Directors.
STOCK OPTION PLAN
- -----------------
The Company has adopted a stock option plan conforming to Securities and
Exchange Commission Rule 16b-3 pursuant to which incentive stock options and
non-statutory stock options could be granted. Up to an aggregate of 300,000
shares of the Common Stock may be issued under the plan. The plan was approved
by the Company's stockholders and may be amended or terminated by the Board of
Directors.
An incentive stock option may be granted to an eligible employee pursuant
to the plan. The number of shares and other terms of grant will be fixed by the
Committee except that in no event shall the term of an incentive stock option be
more than ten years. The exercise price of an incentive stock option shall be
not less than the fair market value of the Common Stock at the time of grant,
and may be paid either in cash or, with the Option Committee's consent, with
previously owned shares of the Company's Common Stock, a promissory note or a
combination thereof.
The Board of Directors granted during the fiscal year ended December 31,
1995, options to purchase an aggregate 87,500 shares of Common Stock to
executive officers of the Company, who served in the capacities as set forth
above. Options to purchase an aggregate of 100,500 shares were granted subject
to the plan to all employees as a group. Such options have an exercise price of
$3.50.
On August 15, 1996 the Board of Directors adopted certain amendments to the
Plan and the Plan as amended and restated is subject to the approval of the
Company's stockholders. The amended and restated Plan is discussed herein.
See, "Proposal III-Approval of Amended and Restated 1992 Stock Option Plan."
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Descriptions of certain transactions and agreements to which the Company,
or its predecessor, JBCH, and certain of the officers, directors and other
related parties of the Company are parties set forth below. The Board of
Directors believes the transactions and agreements described below were on terms
at least as favorable to the
6
<PAGE>
Company as those which could have been obtained from unrelated parties and were
negotiated in an arm's-length manner.
PURCHASE OF JBCH SHARES BY COX
- ------------------------------
Upon the merger of JBCH into the Company, Mr. Cox received 184,630 shares
in exchange for JBCH shares held by him which he purchased for an aggregate cash
consideration of $151,000.
LEASE OF REAL ESTATE
- --------------------
Effective September 1, 1993, PCE entered into a lease arrangement with a
company of which Mr. Heideman, President of PCE and director of the Company, is
a principal owner. The lease is for approximately 8,000 square feet of office
and warehouse space which serves as the headquarters of PCE. The lease calls
for base annual rentals of $43,200 per year with taxes, insurance and
maintenance being the responsibility of PCE. The lease is for a period of five
years with annual adjustments to the base rent based on the Consumer Price Index
with minimum annual increases of 4% and maximum annual increases of 6%.
LOANS TO COMPANY
- ----------------
During the year ended December 31 1994, Mr. Heideman, a director of the
Company, and his spouse were issued promissory notes totaling $110,000 bearing
interest at rates ranging from 8% to 9.5% with various maturities through
January 1999.
TRANSACTIONS WITH EZRA
- ----------------------
Ezra E. Ezra was the Chairman of the Board of the Company up to the merger
and a former vice president of Drake Capital Securities, Inc. ("Drake"), the
placement agent for a private placement of common stock by the Company which was
completed in February 1992 and is described below. In addition, Mr. Ezra is a
beneficial owner of more than five percent of the shares of the Company. Prior
to the merger, the Company had no operations, a net worth of approximately
$450,000 consisting mostly of cash raised in a 1990 "blind pool" public
offering, and the sole business objective of acquiring an operating business
which offered significant growth potential. At the time of the merger, Mr. Ezra
held 49% of the Company's shares.
Upon the consummation of the merger, the Company paid Mr. Ezra $12,000 as a
non-accountable expense reimbursement and issued 14,036 shares to him in
consideration of services rendered by him in connection with the merger. Of the
42,107 shares issued to Drake following the merger in consideration of services
provided by Drake, Mr. Ezra received 27,370 shares. Pursuant to the terms of the
merger, Mr. Ezra was given the right to direct the Company to issue 20,000
shares and 20,000 Redeemable Warrants directly to persons designated by Mr.
Ezra. Of such amounts, 1,600 shares and 16,000 Redeemable Warrants were issued
to Mr. Ezra. In addition, the Company has agreed to nominate Mr. Ezra, at his
request, for election as a director of the Company and to use its reasonable
best efforts to cause his election. Mr. Ezra has not made such a request and the
Company does not anticipate that Mr. Ezra will make such a request in the near
future.
As part of the merger, the Company agreed to a subsequent private placement
of its Common Stock at a price of $2.00 per share. Such private placement was
completed in February 1992 and 197,500 shares were sold. In connection with the
completion of such private placement, Drake received a combination of fees,
shares and warrants. Mr. Ezra, pursuant to his employment arrangement with the
Placement Agent, received sixty-five percent of such fees, shares and warrants.
Of the $37,000 in placement fees paid to Drake, Mr. Ezra received $24,050. Of
the 14,035 shares issuable to Drake following such private placement, Mr. Ezra
received 9,123 shares. Of the warrants to purchase 20,800 shares issuable to
Drake at $2.00 per share following such private placement, Mr. Ezra received
warrants to purchase 13,520 shares. In addition, Mr. Ezra jointly with his wife,
purchased 32,500 shares in such private placement.
7
<PAGE>
PROPOSAL II
APPROVAL OF AMENDMENT TO CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
GENERAL
- -------
On September 10, 1996, the Board of Directors approved a resolution to
amend Article IV of the Company's Certificate of Incorporation to increase the
number of authorized shares of common stock from 10,000,000 shares of Common
Stock, $.01 par value to 20,000,000 shares of Common Stock, $.01 par value,
subject to approval of the Company's stockholders.
PURPOSES
- --------
The Board of Directors determined that an increase in the number of
authorized shares of common stock is essential to allow for flexibility in the
future and to provide the Company with the ability to raise additional capital,
to facilitate future financings, if any, and to act in connection with other
corporate matters, which may, in the Board's judgment involve the issuance of
common stock. If an increase is approved at the Meeting, stockholder approval
would not be necessary for the issuance of all or any portion of the additional
shares of common stock unless required by law or by any rules or regulations to
which the Company is subject. There are no current specific plans to engage in
any such transaction.
Currently there are sufficient shares authorized for issuance in the event
that currently exercisable stock options and warrants are exercised and
debentures are exchanged or converted for common stock.
An increase in the number of authorized shares will not have an immediate
effect on the rights of existing shareholders. When additional shares are
issued, however, such event will result in a decrease of existing shareholders'
percentage equity ownership, and depending on the price at which they are
issued, could have a dilutive effect on shareholders who paid a higher
consideration per share for their stock.
VOTE REQUIRED
- -------------
Adoption of this amendment requires the affirmative vote of the holders of
a majority of the outstanding stock entitled to vote at the Annual Meeting. If
the amendment is approved by the shareholders, it will become effective upon
filing and recording of a Certificate of Amendment as required by the Delaware
Corporation Law.
RECOMMENDATION OF THE BOARD OF DIRECTORS
- ----------------------------------------
For the reasons set forth above, the Board of Directors has determined that
the adoption of the amendment to the Company's Certificate of Incorporation is
in the best interests of the Company and its shareholders and recommends to its
shareholders that they vote FOR its adoption. Unless otherwise directed,
proxies will be voted FOR the adoption of the Amendment.
PROPOSAL III
APPROVAL OF AMENDED AND RESTATED 1992 STOCK OPTION PLAN
GENERAL
- -------
At the Annual Meeting there will be submitted to stockholders a proposal to
adopt an amended and restated 1992 Stock Option Plan. The Company's 1992 Stock
Option Plan was adopted by the Board of Directors of the
8
<PAGE>
Company on July 30, 1992 and by the Company's shareholders on July 28, 1993. On
August 15, 1996, the Board adopted certain amendments to the Plan. The amended
and restated Plan is being presented for approval by the Company's shareholders.
The 1992 Stock Option Plan, as amended and restated (the "Plan"), must be
approved by a vote of the holders of a majority of the shares of the Company
Common Stock. This description is qualified in its entirety by the detailed
provisions of the Plan annexed hereto as Exhibit A.
The purpose of the Plan is to advance the interests of the Company and its
subsidiaries by providing significant incentives to selected key employees and
others who contribute and are expected to continue to contribute materially to
the success of the Company and its subsidiaries, to provide a means of rewarding
outstanding performance and to enable the Company and its subsidiaries to
maintain a competitive position in attracting and retaining the key personnel
necessary for continued growth and profitability.
OPERATION OF THE PLAN; AMENDMENTS TO THE PLAN
- ---------------------------------------------
The Plan provides for granting incentive stock options and nonqualified
stock options. The Plan authorizes the granting of options to purchase up to an
aggregate of 300,000 shares of the Company's Common Stock. Such shares may be
either authorized but unissued shares or shares which have been issued and which
have been reacquired by the Company. The Company may pursue a program of
periodic repurchases of its Common Stock to meet the needs of the Plan. No
option may be granted more than 10 years after adoption of the Plan by the Board
of Directors.
The Plan may be amended, modified, suspended or terminated by the Board of
Directors of the Company. However, without further approval of the
shareholders, the Board of Directors may not (1) increase the maximum number of
shares for which options may be granted, (2) decrease the minimum option price,
or (3) change the class of employees eligible to receive options. In addition,
no change in the Plan can be made which will have a material adverse effect upon
an option previously granted unless the consent of the affected employee is
obtained.
Prior to amendment and restatement, the Plan was administered by a
committee of "disinterested directors" appointed by the Board of Directors. The
recent adoption of amendments to Rule 16(b) of the Securities Exchange Act of
1934 (the "Act"), relating to short-swing profits recovery, now permit exemption
from Section 16(b) of the Act those transactions involving an option grant if
the transactions are approved by the board of directors of the issuer or a
committee of the board of directors composed solely of two or more "non-employee
directors." Accordingly, the Plan as amended and restated by the Board,
provides that the Board or a Committee of at least two "non-employee directors"
appointed by the Board will administer the Plan. Members of the Board or the
Committee will be entitled to hold options under the Plan. The Board or the
Committee may make appropriate adjustments in the number of shares covered by an
option granted under the Plan, as well as the price to be paid upon the exercise
of any such option, if the Company effects a change in its capitalization or in
other appropriate circumstances.
Incentive stock options granted pursuant to the Plan are to be granted only
to officers and employees of the Company or its subsidiaries who are considered
by the Committee to be key employees. Pursuant to the amendments adopted by
the Board, directors and consultants to the Company may be granted nonqualified
stock options. Currently, 30 persons are eligible to participate in the Plan.
No determination has been made as to the persons to whom options may be granted
under the Plan in the future.
Incentive stock options are nontransferable otherwise than by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order. A disabled optionee, or the legal representative of a deceased optionee,
may exercise the option within one year of the death or disability of the
optionee, as the case may be, to the extent it is then unexercised. As amended
and restated, the Plan provides that the Board or the Committee may in its
discretion provide in the individual option contracts that the
nontransferability provisions of the plan will not be applicable to the extent
of transfers of options, for no consideration, by grantees of nonqualified stock
options to a grantee's spouse, children or grandchildren or to any trust the
beneficiary of which is the grantee, the grantee's
9
<PAGE>
spouse, children or grandchildren. An option may be exercised within three
months following retirement or termination of employment of any optionee;
however, an option will terminate on the date of discharge of an optionee if the
Board of Directors or the Committee determines in its discretion that is not in
the best interest of the Company that the right of such discharged optionee to
exercise the option continue for such three month period. Any shares as to which
options have terminated may be again subjected to option.
In consideration of having been granted an option, each optionee will, if
the Company requires, agree to remain in the employ of the Company for a period
of three years from the date on which the option was granted, without prejudice
to the right of the Company to terminate such employment or service at any time,
with or without cause. The Plan permits the Company to require that optionees
represent in writing that it is their intention to acquire any shares under the
Plan for investment and not with a view to the distribution thereof.
INCENTIVE STOCK OPTIONS
- -----------------------
An incentive stock option may be granted to an eligible employee. The
number of shares and other terms of grant will be fixed by the Board or the
Committee and set forth in an option contract, provided, however, that in no
event shall the term of an incentive stock option be more than ten years. The
price payable upon exercise shall be not less than the fair market value of the
Company's Common Stock at the time of grant, and may be paid either in cash or,
with the consent of the Board or the Committee, with previously owned shares of
the Company's Common Stock, a promissory note or a combination thereof.
To the extent that the fair market value of the shares (determined as of
the time the option is granted) of the shares, with respect to which incentive
stock options are exercisable for the first time by an employee during any
calendar year (under the Plan and any other plan of the Company) exceeds
$100,000, such options exceeding such amount shall be treated as nonqualified
options.
An incentive stock option may be granted to an employee owning more than
10% of the Company's Common Stock, only if the exercise price of such incentive
stock option is at least 110% of the fair market value of the Common Stock on
the date of grant.
NONQUALIFIED STOCK OPTIONS
- --------------------------
A nonqualified stock option may be granted to eligible employees. The
number of shares and other terms of the grant of nonqualified stock options will
be fixed by the Board or the Committee. No such option shall be exercisable
after ten years from the date of grant. The price payable upon exercise may not
be less than the fair market value of the Company's Common Stock at the time of
grant, and may be paid either in cash or, with the consent of the Board or the
Committee, with previously owned shares of the Company's Common Stock, a
promissory note or a combination thereof.
AWARDS TO BE GRANTED TO CERTAIN INDIVIDUALS AND GROUPS
- ------------------------------------------------------
As discussed above, the Board or the Committee has discretion to determine
the number of options (if any) to be granted under the Plan. Accordingly, the
actual number of options to be granted to any individual is not determinable.
No options have been granted under the Plan as amended and restated.
TAX CONSEQUENCES
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The Plan authorizes the granting of (1) options which are intended to
qualify as "incentive stock options", within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended; and (2) options which do not qualify
as incentive stock options ("nonqualified options").
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The Company has been advised that the tax consequences relating to the
grant or exercise of options are as follows:
INCENTIVE STOCK OPTIONS
The grant of an incentive stock option will not result in the recognition
of income by the optionee for Federal income tax purposes. The exercise of an
incentive stock option, and the purchase of shares pursuant thereto, will not
cause the recognition of income by the optionee. Upon a later sale or other
disposition of the shares, the optionee must recognize long-term capital gain or
ordinary taxable income, depending upon whether the optionee holds the shares
for a specified period.
NONQUALIFIED STOCK OPTIONS
No income is recognized upon the grant of a nonqualified option to a
participant, assuming that the option does not have a readily ascertainable fair
market value at the time of the grant. The participant recognizes ordinary
income upon exercise of the nonqualified option equal in amount to the excess of
the fair market value of the option stock on the date of exercise over the
exercise price. Any gain or loss recognized by a later sale or other
disposition of the acquired shares generally will be capital gain or loss. The
Company is allowed a deduction at the time and in an amount equal to the
ordinary income recognized by the participant.
VOTE REQUIRED
- -------------
In order for the amended and restated 1992 Stock Option Plan of the Company
to be approved, the holders of a majority of all shares of Common Stock of the
Company must vote for the adoption of the Plan.
RECOMMENDATION OF THE BOARD OF DIRECTORS
- ----------------------------------------
For the reasons set forth above, the Board of Directors believes that the
adoption of the amended and restated Plan is in the best interests of the
Company and its shareholders and recommends to its shareholders that they vote
FOR its adoption. Unless otherwise directed, proxies will be voted for adoption
of the Plan.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Deloitte & Touche served as the Company's
independent certified public accountants for the year ended December 31, 1995
and has been reappointed for the present fiscal year. A representative of
Deloitte & Touche is expected to be present at the meeting and will have an
opportunity to make a statement if he desires to do so. Such representative is
expected to be available to respond to appropriate questions from stockholders.
ANNUAL REPORT
ANY PERSON FROM WHOM PROXIES FOR THIS MEETING ARE SOLICITED MAY OBTAIN FROM
THE COMPANY, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995, INCLUDING
THE FINANCIAL STATEMENTS THEREIN AND THE RELATED SCHEDULES, BY WRITTEN REQUEST
ADDRESSED TO EV ENVIRONMENTAL, INC., 1465 POST ROAD EAST, WESTPORT, CONNECTICUT
06880 ATTENTION: SECRETARY. ANY SUCH REQUEST FROM A BENEFICIAL OWNER OF STOCK
NOT REGISTERED IN HIS NAME MUST CONFIRM THAT HE WAS A BENEFICIAL OWNER OF SUCH
STOCK ON NOVEMBER 12, 1996.
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STOCKHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next annual
meeting of stockholders must be received by the Company at 1465 Post Road East,
Westport, Connecticut 06880, on or before July 22, 1997 for inclusion in the
proxy material for said meeting.
OTHER BUSINESS
It is not anticipated that any business other than as set forth hereinabove
will be brought before the meeting. Management is not aware of any matters
proposed to be presented to the meeting by any other person. However, if any
other business should properly come before the meeting, it is the intention of
the persons named in the enclosed form of proxy to vote the proxy in accordance
with their best judgment on such business.
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EXHIBIT A
---------
EV ENVIRONMENTAL, INC.
1992 STOCK OPTION PLAN
Adopted July 30, 1992
Amended and Restated August 15, 1996
SECTION 1. INFORMATION
Defined Terms used herein, unless otherwise defined herein, shall have
the meanings given them in Section 1.5 of this 1992 Stock Option Plan.
1.1 PURPOSE.
The purpose of this 1992 Stock Option Plan of EV Environmental, Inc.
(the "Company") is to advance the interests of the Company and its subsidiaries
by providing significant incentives to selected key employees and others who
contribute and are expected to continue to contribute materially to the success
of the Company and its subsidiaries, to provide a means of rewarding outstanding
performance and to enable the Company and its subsidiaries to maintain a
competitive position in attracting and retaining the key personnel necessary for
the success of the Company.
1.2 CONSIDERATION TO COMPANY FOR ISSUANCE OF OPTIONS.
Each Employee, Consultant and Director by signing and accepting an
Option Contract, will, if the Company so requires, agree to remain in the employ
or service of the Company or a Subsidiary for a period of three years. Nothing
in the Plan or in any Option Contract shall confer on any individual any right
to continue in the employ or service of the Company or any of its Subsidiaries
or limit the right of the Company or any of its Subsidiaries to terminate such
employment or service at any time, with or without cause. Employment or service
with the Company and its Subsidiaries is on an at will basis.
1.3 PLAN SUBJECT TO RATIFICATION BY SHAREHOLDERS.
The Plan shall become effective upon adoption by the Board of
Directors, provided that the Plan is approved by a vote of the holders of a
majority of the shares of Common Stock at the next annual meeting of
stockholders following its adoption by the Board of Directors. Options granted
prior to such vote of holders shall be valid upon grant. No Option under the
Plan may be granted more than 10 years after the date the Plan is adopted by the
Board of Directors.
1.4 LIMITATIONS ON NUMBER OF SHARES ISSUABLE UNDER THE PLAN.
The aggregate number of shares of Common Stock which may be issued
under the Plan shall be limited to 300,000 shares. The shares of Common Stock
for which Options may be granted may consist of either authorized but unissued
shares or shares which have been issued and which shall have been heretofore or
hereafter reacquired by the Company. The total number of shares subject to
Options authorized under the Plan shall be subject to increase or decrease in
order to give effect to the adjustment provisions of Section 3.2 of this Plan or
any amendment adopted as provided in such Section. If any Option granted under
the Plan shall expire, terminate or be cancelled for any reason, without having
been exercised in full, the corresponding number of unpurchased shares shall
again be available for purposes of the Plan.
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1.5 DEFINITIONS.
The following terms used in this Plan shall have the meanings set
forth below:
(a) BOARD OR BOARD OF DIRECTORS. The Board of Directors of the
Company.
(b) CODE. The Internal Revenue Code of 1986, as amended.
(c) COMMITTEE. A committee whose members consist solely of at
least two "non-employee directors" who both are "Non-Employee Directors" under
Rule 16b-3 of the Securities Exchange Act of 1934 and "outside directors" under
Section 162(m) of the Code.
(d) COMMON STOCK. The Company's presently authorized common
stock, $.01 par value per share, except as this definition may be modified
pursuant to the provisions of Section 3.2 hereof.
(e) CONSULTANT. Any person retained by the Company or any of its
Subsidiaries to render significant services to the Company or its Subsidiaries,
but who is neither an Employee nor a Director.
(f) DISABILITY. Complete and permanent inability by reason of
illness or accident to perform the duties of the occupation in which an Employee
was employed when such disability commenced.
(g) EMPLOYEE. Any of the salaried officers or employees of the
Company or any Subsidiary, or both, including any salaried officers or employees
who are members of the Board of Directors of the Company.
(h) EMPLOYMENT. The rendering of services by an Employee for the
Company, or for any Subsidiary, or both. Whether military, government or public
service shall constitute termination of employment for purposes of this Plan, or
any Option granted hereunder, shall be determined, in each case, by the
Committee, in its sole discretion.
(i) FAIR MARKET VALUE. The average of the bid and ask quotes of
brokers, with respect to the Common Stock, as reported by the National Quotation
Bureau, Inc. on the date of the grant (or other applicable date as set forth
under the terms of this Plan) of such Option or, if no quotes occur on such day,
then on the next preceding day on which there were such quotes with respect to
the Common Stock. If at any time dealer quotations for the Common Stock are not
available, the Committee shall determine the fair market value of the Common
Stock on the basis of available prices for such Common Stock or in such manner
as may be authorized by applicable regulations under the Code.
(j) GRANTEE. An Employee, Director or Consultant granted a Stock
Option under this Plan.
(k) INCENTIVE STOCK OPTION. A stock option granted by the Company
under the Plan which satisfies the requirements of Section 422 of the Code.
(l) NON-STATUTORY STOCK OPTION. A stock option granted by the
Company under the Plan which does not satisfy the requirements of Section 422 of
the Code.
(m) OPTION. An Incentive Stock Option or a Non-Statutory Stock
Option granted by the Company under the Plan.
(n) OPTION EXPIRATION DATE. The date on which an Option becomes
unexercisable by reason of the lapse of time or when a Non-Statutory Stock
Option otherwise becomes available.
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(o) PLAN. The 1992 Stock Option Plan of EV Environmental, Inc.
as amended and restated.
(p) SUBSIDIARY. Subsidiary corporation as defined in Section
424(f) of the Code.
(q) The use of the singular shall also include within its meaning
the plural or vice versa.
SECTION 2. STOCK OPTIONS.
2.1 GRANT AND EXERCISE OF OPTIONS.
(a) GRANT. The Board or the Committee on behalf of the Company
may grant Options to Employees, Directors and Consultants for the purchase of
Common Stock.
(b) OPTION PRICE. The purchase price per share of Common Stock
under each Incentive Stock Option shall be not less than 100 percent of the Fair
Market Value per share of such Common Stock on the date the Option is granted,
as determined by the Board or the Committee. The exercise price per share of
Common Stock under each Non-Statutory Stock Option shall be determined by the
Board or the Committee in its discretion and may be less than the Fair Market
Value of a share of Common Stock on the date such Option is granted. The
exercise price of an Option may be subject to adjustment in accordance with the
provisions of Section 3.2 of this Plan. Options shall be exercisable over a
period determined by the Board or the Committee at the time of the grant (but in
no event shall any Incentive Stock Option be exercisable later than ten years
from the date of the grant of such Option), provided that no Option shall be
exercisable prior to the date the Plan is approved by the shareholders of the
Company in accordance with Section 1.3 of this Plan.
(c) OPTION CONTRACTS. Options shall be evidenced by an agreement
("Option Contracts"), in such form as the Board or the Committee shall approve.
The Option Contracts shall contain such terms and conditions (including the
period of exercise of an Option, whether in installments or otherwise) as shall
be contained therein, which need not be the same for all Options.
(d) TRANSFERABILITY OF OPTIONS. (i) Options granted under the
Plan shall by their terms be nontransferable by the Grantee, otherwise than by
will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. No such transfer of
Options shall be effective to bind the Company, unless the Company shall have
been furnished with written notice thereof and a copy of the will or domestic
relations order, as the case may be, and/or such other evidence as the Board or
Committee may determine necessary to establish the validity of the transfer.
(ii) Notwithstanding the provisions of subsection (i) hereof, the Board or the
Committee may in its discretion provide in individual Option Contracts of Non-
Statutory Stock Options granted hereunder that the nontransferability provisions
of this Plan will not be applicable to the extent of transfers of a Non-
Statutory Stock Option, for no consideration, by Grantees to Grantee's spouse,
children or grandchildren or to any trust the beneficiary of which is Grantee,
Grantee's spouse, children or grandchildren.
(e) PAYMENT. No shares shall be issued on the exercise of an
Option, unless paid for in full at the time of purchase. Payment for shares
purchased upon the exercise of an Option shall be made in cash or, with the
approval of the Board or the Committee, in the form of an interest-bearing
promissory note, in Common Stock valued at the then Fair Market Value thereof as
determined by the Board or the Committee, or by a combination of any of the
foregoing. No Grantee shall have any rights as a shareholder (including no
rights to any dividend or other distribution), with respect to any share of
Common Stock covered by an Option, unless and until such individual shall have
become the holder of record of such share.
(f) INVESTMENT PURPOSE. At the time of an exercise of any Option,
the Company may, if it shall deem it necessary or desirable for any reason,
require the holder of the Option to represent in writing to the
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Company that it is the intention of such holder to acquire the shares of Common
Stock being acquired for investment only and not with a view to the distribution
thereof. No shares of Common Stock shall be issued to such holder, unless the
Company is satisfied with the adequacy of such representation.
(g) COMPLIANCE WITH APPLICABLE LAW. No Option shall be
exercisable, unless and until any applicable registration requirements of, or
exemptions from, federal and state securities laws, and all other legal
requirements, have been fully complied with. The Company will use reasonable
efforts to maintain the effectiveness of a registration statement under the
Securities Act of 1933 for the issuance of Options and shares acquired
hereunder, but there may be times at which no such registration statement will
be currently effective. The exercise of Options may be temporarily suspended
without liability to the Company during times when no such registration
statement is currently effective, or during times when, in the reasonable
opinion of the Board or the Committee, such suspension is necessary to preclude
violation of any requirements of applicable law or regulatory bodies having
jurisdiction over the Company. The Company shall have no obligation to file any
registration statement covering resales of shares acquired hereunder.
The Company intends that this Plan shall comply with the
requirements of Rule 16b-3, as promulgated by the Securities and Exchange
Commission ("Rule 16b-3"), and any future rules promulgated during the term of
the Plan in substitution therefor under the Securities and Exchange Act of 1934
(the "1934 Act"). Should any provision of this Plan not be necessary to comply
with the requirements of Rule 16b-3 or should any additional provisions be
necessary for this Plan to comply with the requirements of such Rule, the Board
may amend the Plan to add to or modify the provisions of the Plan accordingly.
Should any provision of the Plan, Option Contracts or actions by the Board or
the Committee fail to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Board or the Committee.
(h) LIMITATION ON EXERCISABILITY OF OPTIONS. Notwithstanding the
provisions of this Section 2.1 and that the Option Contracts may provide for
longer vesting periods, no Option may be exercised during the first six months
following the date on which it is granted, unless, prior to the expiration of
such six month period, the holder of the Option ceases to be an Employee of the
Company or any Subsidiary by reason of such holder's death, disability or
retirement.
2.2 INCENTIVE STOCK OPTIONS.
(a) ELIGIBILITY. Incentive Stock Options may be granted under the
Plan only to such Employees as are deemed by the Board or Committee to be key
employees.
(b) ANNUAL LIMITATION OF OPTIONS GRANTED WHICH MAY BE CONSIDERED
INCENTIVE STOCK OPTIONS. To the extent that the aggregate Fair Market Value of
the shares of Common Stock (at the date of grant), with respect to which
Incentive Stock Options are exercisable for the first time by any Employee
during any calendar year (under the Plan and any other plans of the Company and
its Subsidiaries), exceeds $100,000, such Options shall be treated as Non-
Statutory Stock Options.
(c) INCENTIVE STOCK OPTIONS GRANTED TO TEN PERCENT SHAREHOLDERS.
Notwithstanding anything to the contrary contained in this Plan, an Incentive
Stock Option may be granted to an Employee who owns, directly or indirectly
pursuant to Section 424(d) of the Code, stock possessing more than 10 percent of
the total combined voting power of all classes of stock of the Company or any
Subsidiary if, at the time such Incentive Stock Option is granted, the exercise
price of the Incentive Stock Option is at least 110 percent of the Fair Market
Value of the Common Stock subject to such Option and such Option, by its terms,
is not exercisable after the expiration of five (5) years from the date of grant
of such Option.
(d) NOTICE. An Employee shall give prompt notice to the Company
of any disposition of shares acquired upon exercise of an Incentive Stock
Option.
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SECTION 3. PROVISIONS RELATING TO PLAN PARTICIPATION.
3.1 TERMINATION OF EMPLOYMENT OR SERVICE AND DEATH.
(a) THREE MONTH EXERCISE PERIOD. Unless earlier terminated in
accordance with its terms, an Option shall terminate ninety days after any of
the following:
(i) voluntary termination of employment or service by the
Grantee, with or without the consent of the Company; or
(ii) termination of employment or service by the Company or
any of its Subsidiaries, with or without cause; or
(iii) termination of employment or service because of
retirement, or because the employing subsidiary ceased to be a Subsidiary of the
Company and the Grantee does not, prior thereto or contemporaneously therewith,
enter into the employ or service of the Company or another Subsidiary;
provided, that with regard to terminations of employment or service pursuant to
clause (ii), the Option shall terminate as of the date of such discharge if the
Board or the Committee, in its discretion, shall determine that it is not in the
best interests of the Company that the Option should continue for such ninety-
day period.
(b) OPTIONS EXERCISABLE WITHIN ONE YEAR AFTER DEATH OR
DISABILITY. If the holder of an Option shall die or should terminate employment
or service because of Disability during the term of an Option, the legal
representative of such holder or the Grantee, as the case may be, shall be
entitled to exercise the Option in whole or in part, to the extent then
unexercised, at any time within one year following the death or Disability of
the Grantee, as the case may be, but in no event after the Option Expiration
Date.
3.2 CHANGE IN CAPITALIZATION.
The aggregate number and class of shares of Common Stock which
may be granted under this Plan may be adjusted proportionately, in the
discretion of the Committee, for any increase or decrease exceeding a total of
five percent (5%) in the number of issued shares resulting from a stock split,
stock dividend or dividends for which the record dates occur in any one fiscal
year, a recapitalization or other like capital adjustment, including a merger,
reorganization or consolidation. The adjustment described above shall apply to
the price per share, and to the number and class of shares subject to each
Option outstanding prior to the adjustment.
Upon any reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation, or upon a sale of all or substantially all of the
property of the Company to another corporation, or upon any dividend or
distribution to shareholders of more than five percent (5%) of the Company's
assets, adequate adjustment or other provisions shall be made by the Committee
or the other party to such transaction. The holders of outstanding Options shall
be entitled to receive upon exercise thereafter, the shares, securities or
assets which would have been issuable or payable had the optionee been the owner
of the number of Company shares subject to the Option on the applicable date of
reorganization, merger or consolidation. Any securities so substituted shall be
subject to similar successive adjustments. Any adjustment made under this
Section shall be made by the Board of Directors, whose determination with regard
thereto shall be final and conclusive.
SECTION 4. ADMINISTRATION
4.1 BOARD OR COMMITTEE TO ADMINISTER THE PLAN.
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(a) FUNCTIONS OF ADMINISTRATOR. The Board of Directors will have
general authority to administer the Plan, to grant Options hereunder, and to
perform other functions in connection with the Plan. Other functions may
include, among other things, determining the form of Option Contracts to be
issued under the Plan, the terms and conditions to be included in such Option
Contracts, and adopting from time to time such rules and regulations as the
Board may deem appropriate for the proper administration of the Plan. The Board
may also make such determinations under, and such interpretation of, and take
such steps in connection with the Plan, the rules and regulations, or Options
granted hereunder, as it may deem necessary or advisable. The Board may, in its
discretion, waive any provisions of any Option Contract, provided such waiver is
not inconsistent with the terms of the Plan as then in effect.
In the alternative, the Board may, in its discretion, appoint a
Committee who will perform such functions regarding the administration of the
Plan as may be delegated to it by the Board.
(b) FINDINGS OF THE BOARD OF DIRECTORS AND COMMITTEE ARE
CONCLUSIVE. Each determination, interpretation, or other action made or taken
pursuant to the provisions of the Plan by the Board of Directors or the
Committee shall be final and shall be binding and conclusive for all purposes
and upon all persons, including, without limiting the generality of the
foregoing, the Company, the shareholders, the Committee and each of the members
thereof, and the Grantees of the Company and their respective successors in
interest.
(c) LIABILITY AND INDEMNIFICATION. No member of the Board of
Directors or the Committee shall be liable for any action taken or omitted or
determination made in good faith with respect to the Plan or any Option
Contract. The Company shall indemnify, to the maximum extent permitted by law,
and hold harmless any Board or Committee member, and the estate and heirs of
such Board or Committee member, against all claims, liabilities, expenses,
penalties, damages or other pecuniary losses, including legal fees incurred by
such Board or Committee member, suffered as a result of the performance, in good
faith, of his responsibilities in administering the Plan, to the extent that
insurance, if any, does not cover the payment of such terms.
4.2 AMENDMENT AND DISCONTINUANCE OF THE PLAN.
The Board of Directors may at any time, and from time to time,
amend, modify, suspend or terminate the Plan, provided that no change shall be
made, except in accordance with the provisions of Sections 3.2 and 4.6 hereof,
which will have a material adverse effect upon any Option previously granted,
unless the consent of the affected Option holder is obtained; provided, further,
however that, except in the case of adjustments made pursuant to Section 3.2
hereof, the Board of Directors may not, without further approval of the
shareholders, (a) increase the maximum number of shares for which Options may be
granted under the Plan, (b) decrease the minimum exercise price of an Option
provided in the Plan, or (c) change the class of those eligible to receive
Options.
4.3 COMPLIANCE WITH LAWS AND OTHER CONDITIONS.
(a) OPTIONS. Any exercise of Options by a grantee shall be made
only in compliance with any applicable rule or regulation of the Securities and
Exchange Commission exempting such exercise from the operation of Section 16(b)
of the 1934 Act and any other applicable law, rule, regulation or other
provision that may hereafter relate to the exercise of Options under the Federal
securities laws.
4.4 WITHHOLDING TAXES.
Whenever shares of Common Stock are to be issued pursuant to the
Plan, the Company shall have the right to require that there be remitted to the
Company an amount sufficient to satisfy federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares. The Company reserves the right to satisfy the applicable federal, state
and local withholding tax requirements through the retention
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of shares of Common Stock otherwise issuable upon exercise of an Option. Such
withheld amounts shall meet the Federal securities laws requirements set forth
in Subsection (a) of Section 4.3 hereof.
4.5 USE OF PROCEEDS AND FUNDING.
(a) USE OF PROCEEDS. The proceeds from the sale of Common Stock
pursuant to the exercise of Options granted under the Plan shall constitute
general funds of the Company and may be used for such corporate purposes as the
Company may determine.
(b) FUNDING. No provision of the Plan shall require or permit the
Company for the purpose of satisfying any obligations under the Plan, to
purchase assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor shall the
Company maintain separate bank accounts, books, records or other evidence of the
existence of a segregated or separately maintained or administered fund for such
purpose. Grantees shall have no rights under the Plan other than an unsecured
general creditors of the Company, except that insofar as they may have become
entitled to payment of additional compensation by performance of services, they
shall have the same rights as other employees under general law. This Subsection
(b) shall not prevent the Company for purchasing its Common Stock for the
purpose of meeting its obligation to issue Common Stock pursuant to the Plan.
4.6 QUALIFICATION AS INCENTIVE STOCK OPTION PLAN.
To the extent applicable, this Plan is intended to permit the
issuance of Incentive Stock Options in accordance with the provisions of Section
422 of the Code. This Plan may be modified or amended at any time, both
prospectively and retroactively, and in such manner as to affect Incentive Stock
Options previously granted, if such amendment or modification is necessary for
this Plan and for the Incentive Stock Options granted hereunder to qualify under
said provisions of the Code.
4.7 SUCCESSOR INTEREST.
Subject to the provisions restricting transferability of Options,
the provisions of this Plan and the actions of the Board or the Committee shall
be binding upon all heirs, successors and assigns of the Company and of
optionees.
4.8 OTHER DOCUMENTS.
All documents prepared, executed or delivered in connection with
this Plan shall be, in substance and form, as established and modified by the
Board or the Committee or by persons under its direction and supervision;
provided, however, that all such documents shall be subject in every respect to
the provisions of this Plan, and in the event of any conflict between the terms
of any such documents and this Plan, the provisions of this Plan shall prevail.
4.9 NO OBLIGATION TO CONTINUE EMPLOYMENT.
This Plan and grants hereunder shall not impose any obligation on
the Company or any Subsidiary to continue the employment or service of an
Employee, Director, or Consultant. Moreover, no provision of this Plan or any
document executed or delivered pursuant to this Plan shall be deemed modified in
any way by any employment or service contract or agreement between Employee,
Director or Consultant and the Company.
4.10 MISCONDUCT OF OPTIONEE.
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Notwithstanding any other provision of this Plan, if an Option
holder commits fraud or dishonesty toward the Company, or wrongfully uses or
discloses any trade secret, confidential data or other information proprietary
to the Company, or intentionally takes any other action contrary, in a material
respect, to the interests of the Company, as determined by the Committee, in its
sole and absolute discretion, such Grantee shall forfeit all rights and benefits
under this Plan. This provision shall apply whether or not the Option holder is
terminated for such misconduct.
4.11 GOVERNING LAW.
This Plan shall be construed in accordance with, and governed by,
the law of the State of Delaware.
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Common Stock Common Stock
EV ENVIRONMENTAL, INC.
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 16, 1996
The undersigned hereby appoints Michael R. Cox and Ralph A. Armstrong, or
either one of them, as proxy or proxies of the undersigned, with full powers of
substitution, to vote at the Annual Meeting of Stockholders of EV Environmental,
Inc. to be held on December 16, 1996 at 9:00 a.m., local time, at the offices of
Rich, May, Bilodeau & Flaherty, P.C., 294 Washington Street, Boston,
Massachusetts 02108, and at any and all adjournments thereof, according to the
number of votes that the undersigned would be entitled to cast with all powers
the undersigned would possess if personally present at said meeting. This proxy
may be exercised to vote for the following purposes:
1. FOR _____ WITHHOLD AUTHORITY TO VOTE ON ____
the proposal to elect all the following nominees for Director: Michael R. Cox;
Murdoch Heideman; Dan L. Scroggins; and Ralph A. Armstrong.
FOR _____ all nominees except nominee(s) whose name(s) are written in the space
below:
________________________________________________________________________________
________________________________________________________________________________
2. FOR _____ WITHHOLD AUTHORITY TO VOTE ON ____ AGAINST ____
the proposal to approve an amendment to Article IV of the EV Environmental, Inc.
Amended and Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 10,000,000 shares to 20,000,000 shares.
3. FOR _____ WITHHOLD AUTHORITY TO VOTE ON ____ AGAINST ____
the proposal to approve the adoption of the Amended and Restated 1992 Stock
Option Plan of EV Environmental, Inc.
<PAGE>
The undersigned hereby ratifies and confirms all that said proxy or
proxies, or substitutes, may do by virtue hereof. The proxies are authorized to
vote in their discretion with respect to matters not known or determined at the
date of the Proxy Statement. Receipt of the Notice of Meeting and Proxy
Statement is hereby acknowledged.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR
SPECIFICATIONS ABOVE. IN THE ABSENCE OF SPECIFICATIONS, THIS PROXY WILL BE
VOTED "FOR" ALL OF THE PROPOSALS SET FORTH HEREIN.
Dated:_____________________________, 1996
___________________________________ (L.S.)
___________________________________ (L.S.)
Please sign here exactly as name appears on previous page. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title as such. Each joint owner or trustee should sign the proxy. If the
stockholder is a corporation, the office of the person signing should be
indicated.
PLEASE SIGN, DATE AND MAIL TODAY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
