<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
MED/WASTE, 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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
MED/WASTE, INC.
6175 N.W. 153RD STREET, SUITE 324
MIAMI LAKES, FLORIDA 33014
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 18, 1998
---------------------
To the Stockholders of Med/Waste, Inc.:
NOTICE is hereby given that the Annual Meeting of Stockholders of
Med/Waste, Inc., a Delaware corporation (the "Company") will be held at the
Coral Gables Hyatt, 50 Alhambra Plaza, Coral Gables, Florida 33134, on Thursday,
June 18, 1998 at 10:00 A.M., for the following purposes:
1. To elect two (2) directors, each for a term of three (3) years.
2. To act upon a proposal to adopt an amendment to the Company's 1996
Employee Stock Option Plan.
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 29, 1998
shall be entitled to receive notice of, and to vote at, the Annual Meeting, or
any postponements or adjournments thereof. A complete list of the stockholders
entitled to vote at the Annual Meeting will be available for inspection by
stockholders at the Annual Meeting.
Whether or not you expect to attend the Annual Meeting, please vote, date,
sign, and return the enclosed proxy as promptly as possible to assure
representation of your shares at the meeting. You may revoke your proxy at any
time prior to its exercise by written notice to the Company prior to the Annual
Meeting, or by attending the Annual Meeting in person and voting.
By Order of the Board of Directors
RICHARD GREEN, Secretary
Miami Lakes, Florida
Dated: May 6, 1998
YOUR VOTE IS IMPORTANT. ACCORDINGLY YOU ARE ASKED TO COMPLETE, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY CARD IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 3
MED/WASTE, INC.
6175 N.W. 153RD STREET, SUITE 324
MIAMI LAKES, FLORIDA 33014
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
JUNE 18, 1998
This Proxy Statement and the accompanying Notice of Annual Meeting and
Proxy Card are being furnished to stockholders of Med/Waste, Inc., a Delaware
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company for use at the Company's 1998 Annual
Meeting of Stockholders (the "Annual Meeting") to be held at 10:00 A.M., local
time, on June 18, 1998 at the Coral Gables Hyatt, 50 Alhambra Plaza, Coral
Gables, Florida, and at any and all postponements or adjournments thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting.
This Proxy Statement, Notice of Annual Meeting, and the accompanying Proxy
Card are first being mailed to stockholders on or about May 8, 1998 to all
common and preferred stockholders of record as of April 29, 1998. At the Annual
Meeting, stockholders will be asked to elect two Class I directors, approve an
amendment to the Company's 1996 Employee Stock Option Plan, and to vote on such
other matters as may properly come before the Annual Meeting.
Because many of the Company's stockholders are unable to attend the Annual
Meeting in person, the Board of Directors solicits proxies by mail to give each
stockholder an opportunity to vote on all matters that will come before the
Annual Meeting. Stockholders are urged to:
(1) Read this Proxy Statement carefully;
(2) Specify their choice on each matter by marking the appropriate box
on the enclosed Proxy Card; and
(3) Sign, date and return the Proxy Card in the enclosed envelope.
If Proxy Cards are returned properly signed, the shares represented thereby
will be voted by the persons named in the Proxy Card, or their substitute, in
accordance with the stockholder's directions. If the Proxy Card is signed and
returned without instructions marked on it, it will be voted FOR the nominees
for Class I directors listed on the Proxy; FOR the amendment to the 1996
Employee Stock Option Plan and as recommended by the Board of Directors with
respect to any other matters which may properly come before the Annual Meeting.
A stockholder must return a signed Proxy Card to permit the proxy holders to
vote the shares owned by such stockholder.
A stockholder granting a proxy may revoke it at any time prior to the
Annual Meeting by giving written notice of its revocation to the Company, by
submission of another duly executed proxy dated after the Proxy Card to be
revoked, or by attending the Annual Meeting and voting in person. The mere
presence at the Annual Meeting by a stockholder who has appointed a proxy will
not revoke the prior appointment.
The Board of Directors has designated Daniel A. Stauber and Arthur G.
Shapiro and each or either of them, as proxies to vote the shares of common and
preferred stock solicited on its behalf.
Only common and preferred stockholders of record as of the close of
business on April 29, 1998 (the "Record Date") are entitled to notice of, and to
vote at, the Annual Meeting and any adjournment thereof. On the Record Date,
there were issued and outstanding 5,192,965 shares of common stock ("Common
Stock") and 28,869 shares of Series A Preferred Stock. The holders of the Series
A Preferred Stock are entitled to vote on all matters in which the holders of
Common Stock are entitled to vote, voting together with the Common Stock without
regard to class. Each share of Series A Preferred Stock is presently convertible
into 23 shares of Common Stock. The Series A Preferred Stock holders have the
number of votes assuming conversion of the
<PAGE> 4
Series A Preferred Stock into Common Stock as of the Record Date, or an
aggregate of 679,237 shares of Common Stock (the "Common Stock Equivalents").
Each stockholder is entitled to one vote for each share of Common Stock or
Common Stock Equivalents registered in his name on the Record Date for each
matter brought before the stockholders at the Annual Meeting. The presence, in
person or by proxy, of a majority of the Common Stock and Common Stock
Equivalents entitled to vote is required for a quorum at the Annual Meeting. In
determining whether a quorum exists at the Annual Meeting, all votes "for" or
"against," as well as abstentions, will be counted. Broker non-votes will also
be counted as present or represented for the purpose of determining whether a
quorum is present for the transaction of business.
ELECTION OF DIRECTORS
The Board of Directors is currently divided into three classes, having
three year terms that expire in successive years. The term of office of Class I
directors expires at the 1998 Annual Meeting. The Board of Directors proposes
that the nominees described below, all of whom are currently serving as Class I
directors, be re-elected as Class I directors for a new term of three years and
until their respective successors are duly elected and qualified, except in the
event of their earlier death, resignation or removal. Each of the nominees has
consented to serve a three year term. The Company has no reason to believe that
any of the nominees will be unable or unwilling to serve, if elected. If any
nominee should become unavailable prior to the election, the accompanying Proxy
Card will be voted for the election, in his stead, of such other person as the
Board of Directors may recommend.
NOMINEES FOR CLASS I DIRECTOR
Information regarding the Board's nominees for election as Class I
directors is set forth below.
RICHARD GREEN
DIRECTOR SINCE 1991
AGE 60
Mr. Green has been Secretary of the Company since June 1993. Since February
1997, he has served as President/Chief Executive Officer of Diabetes Support
Systems, Inc., a durable medical equipment supplier to individuals suffering
from diabetes. From August 1995 until February 1997, he was president of
Sennercomm, Inc., a manufacturer of computerized environmental sensors. From
June 1991 until August 1995, he was chairman of the board, president, and chief
executive officer of Electronic Environmental Controls, Inc., a manufacturer of
computerized environmental sensors. Prior thereto for 17 years, he was employed
by Ryder System, Inc. most recently as senior vice president of international
and business development for Ryder Truck Rental, a division of Ryder System,
Inc. Mr. Green is Chairman of the Audit Committee and a member of the Stock
Option and Compensation Committees.
WILLIAM DOLAN, D.D.S.
DIRECTOR SINCE 1993
AGE 71
Dr. Dolan is a retired dentist and previously maintained a private practice
of dentistry for over 30 years until his retirement in 1995. He is a director of
Bankers Savings Bank and the Dade County, Florida Housing Finance Authority. Dr.
Dolan is a member of the Stock Option Committee.
2
<PAGE> 5
DIRECTORS CONTINUING IN OFFICE
CLASS II DIRECTORS. The following Class II directors were elected at the
Company's 1997 Annual Meeting, except that William F. Bonham was appointed a
Class II Director in November 1997 to fill a vacancy. The terms of the Class II
directors end at the 1999 Annual Meeting.
KENDRICK MEEK
DIRECTOR SINCE 1996
AGE 31
Mr. Meek has been a development representative for the Wackenhut
Corporation, a provider of security services. Prior thereto, from March 1994
through November 1994, he was President of F&L Security Services, Inc., a
security consulting firm. From March 1989 until March 1994, he was employed by
the Florida Highway Patrol, the last three years of which he served as a
captain. Mr. Meek has served as a State Representative in the Florida State
Legislature since 1994.
WILLIAM F. BONHAM
DIRECTOR SINCE 1997
AGE 54
Mr. Bonham has served as the Company's Vice President of Operations since
June 1997. From October 1995 until June 1997, Mr. Bonham was the president of
Bonham Management Group, Inc. which managed a medical waste autoclave facility.
The Company acquired certain of the assets of Bonham Management Group, Inc. in
November 1997. Prior thereto, from 1990 to 1995 Mr. Bonham was a vice president
of Bio-Medical Waste, Inc., a medical waste hauling and treatment company. Prior
thereto, from 1985 to 1990 Mr. Bonham was a vice president of market and sales
of Medex, Inc., a medical waste management company.
CLASS III DIRECTORS. The following Class III directors were elected at the
1997 Annual Meeting for terms ending in 2000.
MILTON J. WALLACE
DIRECTOR SINCE 1991
AGE 62
Mr. Wallace has been Chairman of the Board of the Company since June 1993.
Mr. Wallace has been a practicing attorney in Miami, Florida for over 30 years
and is currently a shareholder of the law firm of Wallace, Bauman, Fodiman &
Shannon, P.A. He was chairman of the board of directors of Home Intensive Care,
Inc., a provider of dialysis and home infusion therapy services from December
1989 until July 1993, when it was sold to W.R. Grace & Co. Mr. Wallace is the
Chairman of the Board of Renex Corp., a dialysis provider. He is a director of
several private companies and is chairman of the Dade County, Florida Housing
Finance Authority. Mr. Wallace is a member of the Company's Executive Committee.
DANIEL A. STAUBER
DIRECTOR SINCE 1991
AGE 41
Mr. Stauber has been President and Chief Executive Officer of the Company
since December 1991. He was a founder of Safety Disposal System, Inc. ("SDS"), a
wholly owned subsidiary of the Company and has served as its president since its
inception in January 1989. Prior thereto, from 1981 to 1989, he was a practicing
attorney in Miami, Florida. Mr. Stauber serves as a member of the Task Force on
Industry Standards of the Medical Waste Institute, a subsidiary of the National
Solid Waste Management Association. Mr. Stauber is a member of the Company's
Executive and Nominating Committees.
3
<PAGE> 6
ARTHUR G. SHAPIRO, M.D., F.A.C.O.G.
DIRECTOR SINCE 1991
AGE 59
Dr. Shapiro has held an appointment to the University of Miami School of
Medicine as a professor of clinical obstetrics and gynecology in the division of
reproductive endocrinology since January 1995. From 1985 until 1995, he was
engaged in the private practice of medicine. From 1970 until 1983, he was
employed by the University of Miami School of Medicine most recently as a
professor. He is a graduate of Harvard Medical School and is board certified in
obstetrics and gynecology, endocrinology and laser surgery. He is a Fellow in
the American College of Obstetrics and Gynecology and has been elected to become
a Fellow by the American College of Endocrinology. Dr. Shapiro was the Corporate
Medical Director of Home Intensive Care, Inc. and served on its board of
directors from 1985 until July 1993. He serves as chairman of the board of
directors of Bankers Savings Bank and as vice-chairman of Renex Corp. Dr.
Shapiro is Chairman of the Executive, Stock Option and Compensation Committees,
and is a member of the Audit and Nominating Committees.
DIRECTORS' REMUNERATION; ATTENDANCE
DIRECTORS' COMPENSATION. Directors who are employees of the Company or its
subsidiaries do not receive any compensation for their service as members of the
Board of Directors. Directors who are not employees of the Company receive an
annual retainer of $2,500, payable quarterly and are reimbursed for expenses
which may be incurred by them in connection with the business and affairs of the
Company. In addition, non-employee directors receive options granted under the
Directors' Stock Option Plan ("Directors' Plan") based upon specific criteria
set forth in the Directors' Plan. See "Compensation -- Directors Stock Option
Plan".
BOARD ATTENDANCE. The Board of Directors met four (4) times in 1997. In
addition, the Board of Directors took action by unanimous written consent five
(5) times during 1997. Every director attended in excess of 75% of meetings of
the Board during 1996, except William Dolan, who did not attend any meetings.
COMMITTEES OF THE BOARD
The Board has established a number of standing committees to assist it in
the discharge of its responsibilities. The principal responsibilities of each
standing committee are described below. Actions taken by any committee of the
Board are reported to the Board of Directors, usually at the next Board meeting.
The Board has standing Executive, Stock Option, Compensation, Nominating and
Audit Committees.
EXECUTIVE COMMITTEE. The Executive Committee is composed of Dr. Shapiro
and Messrs. Wallace and Stauber. Dr. Shapiro serves as the Chairman. When the
Board of Directors is not in session, the Executive Committee possesses all of
the powers of the Board, other than certain powers reserved by Delaware law to
the Board. Although the Executive Committee has broad powers, in practice it
meets only infrequently to take formal action in a specific matter when it would
be impractical to call a meeting of the Board. The Executive Committee met once
in 1997.
STOCK OPTION COMMITTEE. The Stock Option Committee, composed of Dr.
Shapiro, as Chairman, Mr. Green and Dr. Dolan, met once during 1997, and took
action by written consent once in 1997. The Stock Option Committee's function is
to administer the Company's 1993 and 1996 Employee Stock Option Plans. The Stock
Option Committee has the authority to determine, among other things, to whom to
grant options, the amount of options, the terms of options and the exercise
prices thereof.
AUDIT COMMITTEE. The Audit Committee is presently composed of Mr. Green,
as Chairman and Dr. Shapiro. The Audit Committee met once during 1997. The
principal duties of the Audit Committee are to recommend the appointment of
independent auditors; to meet with the Company's independent auditors to review
the arrangements for, and scope of, the audit and the fees related to such work;
to review the independence of the independent auditors; to consider the adequacy
of the system of internal accounting
4
<PAGE> 7
controls; to review and monitor the Company's policies regarding conflicts of
interest; and to discuss with management and the independent accountants the
Company's annual financial statements.
COMPENSATION COMMITTEE. The Compensation Committee presently consists of
Dr. Shapiro, as Chairman and Mr. Green. The Compensation Committee met three (3)
times during 1997. The Compensation Committee reviews the Company's general
compensation policies and procedures; establishes salaries and benefit programs
for the Chief Executive Officer and other executive officers of the Company and
its subsidiaries; reviews, approves and establishes performance targets and
awards under incentive compensation plans for its executive officers; and
reviews and approves employment agreements.
NOMINATING COMMITTEE. The Nominating Committee consists of Dr. Shapiro and
Mr. Stauber. It recommends to the Board director nominees for election by
stockholders. It also reviews the qualification of, and recommends to the Board,
candidates to fill Board vacancies as they may occur during the year. The
Committee considers suggestions from stockholders and other sources regarding
possible candidates for director. Such suggestions, together with appropriate
biographical information, should be submitted to the Secretary of the
Corporation. The Nominating Committee met once in 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. None of the
members of the Board's Compensation Committee is, or has been, an officer or
employee of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
The Company's officers and directors are required to file Forms 3, 4 and 5
with the Securities and Exchange Commission in accordance with Section 16(a) of
the Securities and Exchange Act of 1934, as amended and the rules and
regulations promulgated thereunder. Based solely on a review of such reports
furnished to the Company as required by Rule 16(a)-3, no director or executive
officer failed to timely file such reports in 1997:
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE
"FOR" THE ELECTION OF ALL THE NOMINEES.
The two nominees for Class I directors receiving the greatest number of
affirmative votes of the shares of Common Stock and Common Stock Equivalents
represented at the Annual Meeting will be elected as directors. Stockholders are
not entitled to cumulate their votes for the election of Class I directors.
Proxies received by the Board of Directors will be so voted in favor of all
nominees above, unless stockholders specify a contrary choice in their proxies.
5
<PAGE> 8
COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation earned by, and paid to, the
Company's Chief Executive Officer ("CEO") and for each other executive officer
who received compensation in excess of $100,000 for any year in the three (3)
year period ended December 31, 1997 (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION(1) SECURITIES
------------------ UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS
- --------------------------- ---- -------- ------- ------------
<S> <C> <C> <C> <C>
Milton J. Wallace....................................... 1997 $ 84,000 $46,400 100,000
Chairman of the Board 1996 80,000 26,400 100,000
1995 35,759 -- 75,000
Daniel A. Stauber....................................... 1997 $183,000 $72,890 100,000
President/Chief Executive Officer 1996 163,000 72,890 100,000
1995 140,821 -- 75,000
Phillip W. Kubec(2)..................................... 1997 $116,874 $ -- --
President/Chief Executive Officer 1996 107,100 68,930 --
of The Kover Group, Inc. 1995 102,000 55,011 50,000
Michael D. Elkin........................................ 1997 $103,800 $10,000 10,000
Vice President/Chief Financial Officer 1996 77,900 5,300 25,000
1995 37,000 1,500 50,000
William F. Bonham(3).................................... 1997 $100,961 $ -- 100,000
Vice President/Operations 1996 -- -- --
1995 -- -- --
</TABLE>
- ---------------
(1) The Company provides its executive officers with certain non-cash group life
and health benefits, generally available to all salaried employees and are
not included in this table pursuant to applicable Securities and Exchange
Commission rules. No executive officers listed above received aggregate
personal benefits or perquisites that exceeded the lesser of $50,000 or 10%
of such individual's total annual salary and bonus in any year above.
(2) The Company sold The Kover Group, Inc. to a limited liability company wholly
owned by Mr. Kubec and his wife on January 30, 1998.
(3) Mr. Bonham was employed by the Company commencing June 1, 1997.
6
<PAGE> 9
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table sets forth information concerning grants of stock
options to the CEO and each other Named Executive Officer named on the Summary
Compensation Table above, for the year ended December 31, 1997:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------------
% OF TOTAL
NUMBER OF SECURITIES OPTIONS GRANTED TO
UNDERLYING OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME GRANTED(1) FISCAL YEAR(3) PER SHARE(2)(3) DATE
- ---- -------------------- ------------------ --------------- ----------
<S> <C> <C> <C> <C>
Milton J. Wallace............ 100,000 31.25% $2.75 4/2002
Daniel A. Stauber............ 100,000 31.25 2.75 4/2002
Phillip W. Kubec............. -- -- -- --
Michael D. Elkin............. 10,000 3.13 4.32 9/2002
William F. Bonham............ 100,000 31.25 5.19 11/2002
</TABLE>
- ---------------
(1) All the above options were granted pursuant to the Company's 1993 or 1996
Employee Stock Option Plans ("1993 Plan" or "1996 Plan", respectively).
Subject to the terms and conditions of the 1993 and 1996 Plans, the Stock
Option Committee has the authority and discretion, among other things as to
whom to grant options, the number of options, the terms of options,
including vesting requirements and the exercise prices of options may
modify, extend or renew outstanding options granted under the Employee Plan.
Each option entitles the holder to purchase one share of common stock. Each
option granted above vested twenty-five (25%) percent six (6) months
following the date of grant; twenty-five percent (25%) on the first
anniversary of the grant date; and twenty-five percent (25%) on each
anniversary thereafter. In October 1995, the Company's Stock Option
Committee approved the acceleration of vesting requirements of substantially
all options previously granted under the 1993 Plan, became immediately
exercisable by the holders thereof.
(2) The option exercise price may be paid, subject to the requirements of Rule
16b-3 promulgated by the Securities and Exchange Commission, by delivery of
shares already owned by such optionee.
(3) Total options granted in 1997 was for 320,000 shares of Common Stock.
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND FISCAL YEAR END OPTION VALUES
The following table sets forth certain aggregated option information for
the CEO and each named Executive Officer named in the Summary Compensation Table
for the year ended December 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY OPTIONS AT
UNEXERCISED OPTIONS(2) DECEMBER 31, 1997(2)
--------------------------- ---------------------------
NAME(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Milton J. Wallace........................ 347,250 200,000 751,531 212,500
Daniel A. Stauber........................ 347,250 200,000 751,531 212,500
Phillip W. Kubec......................... 50,000 -- 125,000 --
Michael D. Elkin......................... 48,250 36,250 112,656 56,843
William F. Bonham........................ -- 100,000 -- --
</TABLE>
- ---------------
(1) No options were exercised by the above named executive officers during the
fiscal year ended December 31, 1997.
(2) The value of unexercised options represents the positive difference between
the exercise price of the options and the market price of the common stock
at December 31, 1997. The market price is based on the closing sale price as
reported by NASDAQ on that date, which was $4.625.
EMPLOYMENT AGREEMENT
Mr. Stauber serves is the Company as President and Chief Executive Officer
pursuant to an employment agreement expiring on December 31, 2001. Pursuant to
the employment agreement, Mr. Stauber's base salary
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<PAGE> 10
was $183,000 in 1997. Base salary is increased by the greater of (a) five
percent (5%) or (b) the cost of living index for the prior year. Mr. Stauber
also receives a car allowance and certain other non-cash benefits such as
health, life and disability insurance. Mr. Stauber is eligible to participate in
such incentive bonus plans adopted from time to time by the Company's Board of
Directors. The Compensation Committee adopted a 1996 Incentive Bonus Plan for
Mr. Stauber, whereby Mr. Stauber was entitled to earn a bonus of up to 100% of
his base salary if the Company attained certain levels of net income. The
Compensation Committee established a similar incentive plan for 1997 with
different thresholds of net income. The Agreement provides that in the event of
a change of control of the Company, Mr. Stauber will be entitled to terminate
his employment agreement and receive as compensation three (3) times the sum of
(a) his base salary and (b) any bonus received in the twelve (12) months prior
to such change of control. The employment agreement contains a two year
non-competition agreement.
Milton J. Wallace serves as Chairman of the Board pursuant to an employment
agreement expiring December 31, 2001. Mr. Wallace's base salary was $84,000 in
1997. Base Salary is increased in each year by the greater of (a) five percent
(5%) or (b) the cost of living index for the prior year. Mr. Wallace also
receives a car allowance and certain other non-cash benefits, such as health,
life and disability insurance. Mr. Wallace is eligible to participate in such
incentive bonus plans adopted from time to time by the Company's Board of
Directors. The Compensation Committee adopted a 1996 Incentive Bonus Plan for
Mr. Wallace, whereby Mr. Wallace was entitled to earn a bonus of up to 100% of
his base salary if the Company attained certain levels of net income. The
Compensation Committee established a similar incentive plan for 1997 with
different thresholds of net income. The Agreement provides that in the event of
a change of control of the Company, Mr. Wallace is entitled to terminate his
employment agreement and receive as compensation three (3) times the sum of (a)
his base salary and (b) any bonus received in the twelve (12) months prior to
such change of control. The employment agreement contains a two year
non-competition agreement.
Michael D. Elkin serves as the Company's Vice President/Chief Financial
Officer pursuant to a one year employment agreement which automatically reviews
on October 1 of each year if notice of termination is not given by either party
at least ninety (90) days prior to October 1 of each year. The Employment
Agreement provides for a base salary of $100,000, increased by the greater of
(a) 5%; or (b) the cost of living index for the prior year. Mr. Elkin receives a
car allowance and certain other non-cash benefits such as health, life and
disability benefits. Mr. Elkin is eligible to participate in such incentive
bonus plans adopted from time to time by the Company's Board of Directors. The
Agreement provides that in the event of a change of control of the Company, the
employment agreement is automatically extended for a period of two (2) years and
if the agreement is thereafter terminated, he would be entitled to receive as
severance two (2) times his then base salary. The Employment Agreement contains
a one (1) year non-competition agreement.
EMPLOYEE STOCK OPTION PLANS
The Company has a 1993 Employee Stock Option Plan ("1993 Plan") and a 1996
Employee Stock Option Plan ("1996 Plan") which provide for the grant of options
to purchase up to 750,000 and 1,000,000 shares of Common Stock to officers and
other employees, respectively. The 1993 and 1996 Plans are designed as an
incentive program to cause employees to increase their interest in the Company's
performance and to aid in attracting and retaining qualified personnel. The 1993
and 1996 Plans are administered by the Stock Option Committee. During fiscal
1997, options to purchase an aggregate of 220,000 shares of Common Stock were
granted at exercise prices ranging from $2.75 to $4.31 under the 1993 and 1996
Plans. As of March 31, 1998, options to purchase an aggregate 665,425 shares of
Common Stock were outstanding under the 1993 Plan at exercise price ranging from
$2.13 to $4.32. Options to purchase an aggregate of 600,000 shares of Common
Stock were outstanding under the 1996 Plan, of which 200,000 were exercisable as
of March 31, 1998. Option exercise prices range from $2.25 to $4.88 per share.
Options granted under each Plan have a term of five (5) years from the date of
their respective grants. Options are not exercisable under any circumstances for
six (6) months after grant. Options to purchase 629,175 shares are exercisable
as of March 31, 1998 under the 1993 Plan. The remaining options are subject to
three (3) year vesting schedules from the date of grants.
All options granted under the 1993 and 1996 Plans become fully vested and
immediately exercisable upon the occurrence of a "Change of Control." The
Employee Plan defines Change of Control to mean the
8
<PAGE> 11
occurrence of any of the following: (i) the acquisition (other than from the
Company directly) by any "person" group or entity within the meaning of Sections
13(d) and 14(d) of the Securities Exchange Act of 1934) of beneficial ownership
of twenty-five (25%) percent or more of the outstanding common stock of the
Company; (ii) if the individuals who served on the Board as of June 1993, no
longer constitute a majority of the members of the Board of Directors; provided,
however, any person who becomes a director subsequent to June 1993, who was
elected to fill a vacancy by a majority of the directors then serving on the
Board of directors shall be considered a member prior to June 1993; (iii) the
stockholders of the Company approve a merger reorganization or consolidation of
the Company whereby the stockholders of the Company immediately prior to such
approval do not, immediately after consummation of such reorganization, merger
or consolidation, own more than 50% of the voting stock of the surviving entity;
or (iv) a liquidation or dissolution of the Company, or the sale of all or
substantially all of the Company's assets.
DIRECTORS STOCK OPTION PLAN
The Company's Directors Stock Option Plan (the "Directors' Plan") presently
provides for the grant of options of up to 500,000 shares of Common Stock. All
non-employee directors are eligible to receive grants of option ("Eligible
Directors"). Each Eligible Director receives automatic, non-discretionary annual
grants of options based upon specific criteria set forth in the Directors' Plan.
Each year, each Eligible Director receives options to purchase 3,000 shares of
common stock for service on the Board, options to purchase 3,000 shares for
service on each permanent committee (other than the Executive Committee) and
options to purchase 3,000 shares for services as a Committee Chairman (other
than the Executive Committee). Eligible Directors who serve on the Executive
Committee receive options to purchase 6,000 shares, with additional options to
purchase 6,000 shares for the Chairman of the Executive Committee.
The exercise price of each option granted under the Directors' Plan is
equal to the fair market value of the Common Stock on the date of grant. All
options granted are for a period of five (5) years and are exercisable
commencing six (6) months after the grant date. During 1997, options to purchase
57,000 shares of Common Stock were granted to Eligible Directors at an exercise
price of $3.00 per share. As of March 31, 1998, options to purchase 438,250
shares of Common Stock were outstanding under the Directors' Plan, at exercise
prices ranging from $2.13 to $4.00 per share. As of December 31, 1997, 61,750
shares of Common Stock were available for grants of options.
9
<PAGE> 12
STOCK OWNERSHIP
COMMON STOCK
The following table sets forth information as of April 27, 1998 with
respect to the beneficial ownership of the Company's Common Stock by (i) each
director of the Company, (ii) each Named Executive Officer; (iii) all directors
and executive officers as a group, and (iv) each person known by the Company to
be the beneficial owner of more than five percent (5%) of Common Stock of the
Company.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENTAGE
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED(2)
- ------------------------ ---------------------- ---------------------
<S> <C> <C>
William F. Bonham..................................... 300,000(3) 5.56%
William W. Dolan...................................... 62,375(4) 1.19
Michael D. Elkin...................................... 48,750(5) *
Richard Green......................................... 128,915(6) 2.43
Kendrick Meek......................................... 9,250(7) 5.68
Arthur G. Shapiro, M.D................................ 307,086(8) *
Daniel A. Stauber..................................... 451,420(9) 8.45
Milton J. Wallace..................................... 471,132(10) 8.50
Mark E. Brady......................................... 778,367(11) 13.58
c/o Eubel, Brady & Suttman Management, Inc.
7777 Washington Drive
Dayton, OH 45459
Ronald L. Eubel....................................... 778,367(12) 13.58
c/o Eubel, Brady & Suttman Management, Inc.
7777 Washington Drive
Dayton, OH 45459
Robert J. Suttman, II................................. 778,367(13) 13.58
c/o Eubel, Brady & Suttman Management, Inc.
7777 Washington Drive
Dayton, OH 45459
All officers and directors as a group (9
persons)(14)........................................ 1,904,553 29.42
</TABLE>
- ---------------
* Less than one percent.
(1) Except as set forth herein, all Common Stock is directly owned and the sole
investment and voting power are held by the person named. Unless otherwise
stated the address of each individual named above is c/o the Company, 6175
N.W. 153rd Street, Suite 324, Miami Lakes, Florida 33014.
(2) Based upon 5,192,965 shares of Common Stock outstanding and such shares of
Common Stock such individual has the right to acquire within 60 days.
(3) Includes 100,000 shares of Common Stock issuable upon exercise of options.
(4) Includes 56,000 shares issuable upon exercise of options.
(5) Includes 48,750 shares of Common Stock issuable upon exercise of options.
(6) Includes 108,750 shares of Common Stock issuable upon exercise of options.
(7) Includes 9,250 shares as Common Stock issuable upon exercise of options.
(8) Except as set forth herein, all shares of Common Stock are owned jointly by
Dr. Shapiro and his wife. Includes (i) 9,375 shares of Common Stock owned
by a corporation of which Dr. Shapiro is a director and shareholder, (ii)
214,250 shares of Common Stock issuable upon exercise of options and (iii)
8,000 shares owned by his children.
(9) Includes (i) 834 shares owned by his wife and (ii) 347,500 shares of Common
Stock issuable upon exercise of options.
10
<PAGE> 13
(10) Except as set forth herein, all shares of Common Stock are owned jointly by
Mr. Wallace and his wife. Includes (i) 9,375 shares of Common Stock
beneficially owned by a corporation of which Mr. Wallace is president,
director and a controlling shareholder (ii) 2,500 shares owned by his wife
as custodian for a minor child; (iii) 347,250 shares of Common Stock
issuable upon exercise of options; and (iv) 5,882 shares of Common Stock
issuable upon conversion of Series A Preferred Stock.
(11) The principal business of such person is to act as an investment advisor
and is a principal of Eubel Brady and Suttman Asset Management, Inc. a
registered investment advisor ("EBS") which serves as a general partner of
EBS Partners, L.P. and EBS Microcap Partners, L.P. Includes (i) 528,212
shares of Common Stock issuable upon conversion of Series A Preferred
Stock; and (ii) 8,784 shares of Common Stock issuable upon exercise of
warrants. All shares are owned by EBS Partners, LP, EBS Microcap Partners,
LP or managed accounts over which EBS has investment discretion.
(12) The principal business of such person is to act as an investment advisor
and is a principal of Eubel Brady and Suttman Asset Management, Inc. a
registered investment advisor ("EBS") which serves as a general partner of
EBS Partners, L.P. and EBS Microcap Partners, L.P. Includes (i) 528,212
shares of Common Stock issuable upon conversion of Series A Preferred
Stock; and (ii) 8,784 shares of Common Stock issuable upon exercise of
warrants. Includes all shares held by EBS Partners, LP, EBS Microcap
Partners, LP or managed accounts over which EBS has investment discretion.
(13) The principal business of such person is to act as an investment advisor
and is a principal of Eubel Brady and Suttman Asset Management, Inc. a
registered investment advisor ("EBS") which serves as a general partner of
EBS Partners, L.P., and EBS Microcap Partners, L.P. Includes (i) 528,212
shares of Common Stock issuable upon conversion of Series A Preferred
Stock; and (ii) 8,784 shares of Common Stock issuable upon exercise of
warrants. Includes all shares held by EBS Partners, LP, EBS Microcap
Partners, LP or managed accounts over which EBS has investment discretion.
(14) Includes 1,281,500 shares of Common Stock issuable upon exercise of
options.
PROPOSAL TO AMEND THE EMPLOYEE STOCK OPTION PLAN
On December 16, 1997, the Board of Directors, based on the recommendation
of the Stock Option Committee, adopted an amendment (the "1996 Plan Amendment")
to the Company's 1996 Employee Stock Option Plan. The 1996 Plan Amendment must
be approved by holders of a majority of the Company's outstanding shares of
common stock present at the Annual Meeting.
The Employee Plan Amendment increases from 400,000 to 14,000,000 the
authorized shares of Common Stock reserved under the Employee Plan. As of March
31, 1998, options to purchase 600,000 shares of common stock were outstanding
under the Employee Plan. Therefore, options to purchase 200,000 shares of common
stock are subject to the approval of the 1996 Plan Amendment. The increase in
the number of reserved shares will allow the Company to grant additional options
pursuant to the 1996 Plan. The Stock Option Committee believes that there is a
continuing need, and that it is in the best interests of the Company and its
stockholders, to make stock related awards to officers and other employees so
that the Company will be able to attract and retain highly qualified
individuals.
All other terms and conditions of the 1996 Plan will remain the same. A
summary of the terms and conditions of the 1996 Plan is set forth in the Proxy
Statement under the caption -- "COMPENSATION -- Employee Stock Option Plans."
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE
"FOR" THE AMENDMENT TO THE 1996 PLAN.
The adoption of the 1996 Plan Amendment requires the affirmative vote of
not less than a majority of the outstanding shares of combined Common Stock and
Common Stock Equivalents represented at the Annual Meeting. The 1996 Plan
Amendment would be effective immediately upon approval by the Company's
stockholders. The effect of an abstention or a broker non-vote is the same as a
vote against the proposal.
CERTAIN TRANSACTIONS
Milton J. Wallace, the Company's Chairman of the Board, is a shareholder of
the law firm of Wallace, Bauman, Fodiman & Shannon, P.A. Such law firm acts as
general counsel to the Company.
11
<PAGE> 14
On November 10, 1997, the Company purchased substantially all of the assets
and business of Bonham Management Group, Inc. ("BMG"). William F. Bonham, a Vice
President and a Director of the Company was the sole shareholder of Bonham
Environmental Services, Inc. ("BESI"), the sole shareholder of BMG. The Company
paid to $850,000 in cash and 200,000 shares of Company Common Stock, $.001 par
value. The Company received credits at closing amounting to $250,000 for
necessary repairs and maintenance at the facility operated by BMG, as well as
miscellaneous credits for advances made under a management agreement entered
into as of June 1, 1997 and terminated at the closing of the purchase.
On January 30, 1998, the Company sold 100% of the capital stock of The
Kover Group, Inc. ("Kover") to MPK Holdings, Ltd. ("MPK"). MPK is wholly owned
by Phillip W. Kubec and Melissa Kubec, his wife (the "Kubecs"). Mr. Kubec was
the president and chief executive officer of Kover and a director of the
Company. The Company received aggregate consideration for the sale of Kover of
$2,700,000, payable $1.2 million in cash at closing and the balance of $1.5
million in promissory notes. The Company received two promissory notes, one for
$960,000 from MPK (the "MPK Note") and one for $540,000 from Kover (the "Kover
Note"). Both Notes bear interest at the rate of 8.25% per annum, with interest
payable monthly. The principal balance of the MPK and Kover Notes are due at the
end of five and seven years, respectively. The MPK Note is guaranteed by Kover
and the Kubecs and is secured by a pledge of the capital stock of Kover. The
Kover Note is guaranteed by MPK. The MPK and Kover Notes are subordinate to $1.6
million in financing received by MPK. In connection with the closing, Phillip
Kubec resigned as a member of the Board of Directors of the Company.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of BDO Seidman, LLP served as the Company's independent auditors
for the years ended December 31, 1996 and 1997. Although the Board of Directors
has not yet selected a firm to serve as auditors for the year ended December 31,
1998, it is expected that BDO Seidman, LLP will be retained by the Company for
such audit. Representatives of BDO Seidman, LLP are expected to be present at
the Annual Meeting and will be afforded the opportunity to make a statement, if
they desire, and to respond to appropriate questions.
OTHER MATTERS
Management is not aware of any other matters which may come before the
Annual Meeting and which require the vote of stockholders in addition to those
matters indicated in the notice of meeting and this Proxy Statement. The
Company's By-Laws contain provisions relating to notices of stockholder meetings
which prohibit a stockholder from nominating a person for the Board of Directors
or proposing certain acts relating to the Company's business without advance
written notice to the Company. Such written notice must be given at least sixty
(60) days, but not more than ninety (90) days prior to the anniversary date of
the immediately preceding annual meeting of stockholders and must contain
specific information about the nominee and the stockholder who makes such
nomination or proposal. No nomination proposal was received by the Company for
the Annual Meeting. If any other matter calling for stockholder action should
properly come before the Annual Meeting or any adjournment thereof, those
persons named as proxies in the enclosed proxy will vote in accordance with
their best judgment.
STOCKHOLDER PROPOSALS
Stockholders who wish a proposal to be included in the Company's proxy
statement and form of proxy relating to the 1998 annual meeting must be received
by the Company by no earlier than March 10, 1999 and not later than April 10,
1999 for inclusion on the Company's proxy statement related to that meeting.
Such notice must include (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and record address of such stockholder,
(iii) the number of shares of common stock of the Company which are owned
beneficially of record by such stockholder, (iv) a description of all
arrangements or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such business
by such stockholder and any material interest of such stockholder in such
business and (v) a representation that such stockholder intends to appear in
person or by proxy at the Annual Meeting to bring valid business before the
meeting.
12
<PAGE> 15
ANNUAL REPORT
A copy of the Company's 1997 Annual Report, including audited financial
statements as of December 31, 1997 and 1996 and for each of the two (2) years
then ended are being mailed to all stockholders. Copies of the Annual Report on
Form 10-KSB as filed with the Securities and Exchange Commission may be obtained
by writing to Michael D. Elkin, Vice President/Chief Financial Officer, 6175
N.W. 153rd Street, Suite 324, Miami Lakes, Florida 33014.
COSTS OF SOLICITATION
All expenses in connection with this solicitation will be borne by the
Company. In addition to solicitation by mail, proxies may be solicited by
directors, officers and other employees of the Company by telephone, telefax, in
person or otherwise, without additional compensation. The Company will also
request brokerage firms, nominees, custodians and fiduciaries to forward proxy
materials to the beneficial owners of shares held of record by such persons and
will reimburse such persons and the Company's transfer agent for their
reasonable out-of-pocket expenses in forwarding such materials. The Company
further reserves the right to retain the services of a proxy solicitation form
to solicit proxies and will pay all reasonable costs associated therewith.
13
<PAGE> 16
APPENDIX A
MED/WASTE, INC.
PROXY
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 18, 1998
The undersigned hereby appoints Daniel A. Stauber and Arthur G. Shapiro, or
either of them, as proxies, with full individual power of substitution to
represent the undersigned and to vote all shares of Common Stock and Common
Stock Equivalents of the Company which the undersigned is entitled to vote at
the Annual Meeting of Stockholders of the Company to be held at the Hyatt
Regency Hotel, 50 Alhambra Plaza, Coral Gables, Florida on June 18, 1998 at
10:00 A.M., and any and all adjournments thereof, in the manner specified below:
1. ELECTION OF CLASS I DIRECTORS
Nominees:
Richard R. Green
William Dolan, D.D.S.
[ ] For all nominees listed above
[ ] Withhold authority to vote for the following nominees:
-----------------------------------------------------------------------------
[ ] Withhold authority to vote for all nominees
2. PROPOSAL TO AMEND THE COMPANY'S 1996 EMPLOYEE STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued on other side)
(continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, SHALL BE VOTED AS DIRECTED. IF NO
DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR EACH PROPOSAL. Should any
other matter requiring a vote of the stockholders arise, the persons named in
the Proxy or their substitutes shall vote in accordance with their best judgment
in the interest of the Company. The Board of Directors are not aware of any
matter which is to be presented for action at the meeting other than the matters
set forth herein.
Dated: , 1998
----------------------
------------------------------
Signature
------------------------------
Signature
Please sign the Proxy exactly
as name appears. When shares
are held by joint tenants,
both should sign. Executors,
administrators, trustees or
otherwise signing in a
representative capacity should
indicate the capacity in which
signed.
PLEASE VOTE, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
