<PAGE>
February 24, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders (the "Annual Meeting") of Purus, Inc. (the "Company") on
Friday, March 21, 1997, at 10:00 a.m., local time, at the Company's
corporate headquarters, 600 California Street, Suite 1300, San Francisco,
California. The formal Notice of Annual Meeting of Stockholders and Proxy
Statement accompanying this letter describe the business to be acted upon.
Your vote is important. Please complete, sign, date and return the
enclosed proxy promptly in the accompanying reply envelope. Stockholders
attending the Annual Meeting may revoke their proxies and vote in person,
if they so desire.
Sincerely,
Russell K. Burbank
Interim Chief Executive Officer
YOUR VOTE IS IMPORTANT
- ----------------------
SO THAT YOUR COMMON STOCK WILL BE REPRESENTED AT THE ANNUAL MEETING IN THE
EVENT YOU ARE NOT PERSONALLY PRESENT, PLEASE DATE, SIGN AND RETURN PROMPTLY
THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. EXECUTION OF THE PROXY WILL
NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ARE PRESENT AT THE MEETING.
<PAGE>
PURUS, INC.
600 California Street, Suite 1300
San Francisco, CA 94108
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held March 21, 1997
----------
TO THE STOCKHOLDERS OF PURUS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of Purus, Inc., a Delaware corporation (the "Company"),
will be held on Friday, March 21, 1997, at the Company's corporate
headquarters, 600 California Street, Suite 1300, San Francisco, CA 94108,
at 10:00a.m., local time, and thereafter as it may from time to time be
adjourned or postponed, for the following purposes:
1. To elect the Board of Directors to serve until the next Annual Meeting
of Stockholders or until their respective successors are elected and
qualified.
2. To transact such other business as may properly come before the Annual
Meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of the common stock of the Company is necessary to
constitute a quorum at the Annual Meeting. Assuming that a quorum is
present, a plurality of votes cast will be required for election of
directors. KPMG Peat Marwick LLP has audited the Company's financial
statements annually since 1992. A representative of KPMG Peat Marwick LLP
is expected to be present at the Annual Meeting and will be available to
respond to appropriate questions.
Only stockholders of record at the close of business on January 28,
1997 are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the Annual Meeting, you
are urged to sign and return the enclosed proxy as promptly as possible in
the envelope enclosed for that purpose. You may revoke your proxy at any
time prior to exercise, and if you are present at the Annual Meeting you
may, if you wish, revoke your proxy at that time and exercise your right to
vote your shares in person.
By Order of the Board of Directors
Reinhard Siegrist
Director
San Francisco, California
February 24, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
GENERAL INFORMATION FOR STOCKHOLDERS . . . . . . . . . . . . . . . . . . .1
Revocability of Proxies . . . . . . . . . . . . . . . . . . . . . . .1
Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Record Date and Voting. . . . . . . . . . . . . . . . . . . . . . . .1
Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . .2
Share Ownership by Certain Beneficial Owners and Management . . . . .2
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING . . . . . . . . . . . . . .4
PROPOSAL ONE - ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . .4
Nominees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Board of Directors Committees and Meetings. . . . . . . . . . . . . .5
Directors' Compensation . . . . . . . . . . . . . . . . . . . . . . .5
Compensation Committee Interlocks and Insider Participation . . . . .5
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . .6
Executive Officers of the Registrant. . . . . . . . . . . . . . . . .6
Summary Compensation Table. . . . . . . . . . . . . . . . . . . . . .6
Stock Option Grants in Last Fiscal Year . . . . . . . . . . . . . . .7
Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values . . . . . . . . . . . . . . . . . . . . . . . . .8
Repricing of Options. . . . . . . . . . . . . . . . . . . . . . . . .8
Employment, Termination and Change in Control Arrangements. . . . . .8
Compensation Committee Report on Executive Compensation . . . . . . .9
General Compensation Policy . . . . . . . . . . . . . . . . . . . . .9
CEO Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . .9
Option Repricings . . . . . . . . . . . . . . . . . . . . . . . . . 10
Compliance with Internal Revenue Code Section 162(m). . . . . . . . 10
STOCK PERFORMANCE GRAPH. . . . . . . . . . . . . . . . . . . . . . . . . 11
CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. . . . . . . . . 12
SUBMISSION OF STOCKHOLDER PROPOSALS - 1998 ANNUAL MEETING. . . . . . . . 13
INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . 13
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
PURUS, INC.
600 California Street, Suite 1300
San Francisco, CA 94108
----------
PROXY STATEMENT
----------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 21, 1997
GENERAL INFORMATION FOR STOCKHOLDERS
This Proxy Statement (the "Proxy Statement") is furnished to the
holders of the common stock, par value $.01 per share (the "Common Stock"),
of Purus, Inc., a Delaware Corporation (the "Company"), in connection with
the solicitation of proxies by the Board of Directors of the Company (the
"Board of Directors") to be voted at the 1997 Annual Meeting of
Stockholders of the Company to be held on Friday, March 21, 1997, at 10:00
a.m., local time, at the Company's corporate headquarters, 600 California
Street, Suite 1300, San Francisco, California, and at any adjournment or
postponement thereof (the "Annual Meeting"). The Board of Directors has
fixed January 28, 1997 as the record date (the "Record Date") for the
Annual Meeting.
This Proxy Statement, Notice of Annual Meeting, and the accompanying
proxy cards are first being sent or given to stockholders on or about
February 24, 1997.
Revocability of Proxies
A stockholder giving a proxy has the power to revoke it at any time
before its exercise by filing a notice of revocation, or another signed
proxy with a later date, with the Secretary of the Company at the Company's
principal executive offices: Purus, Inc., 600 California Street, Suite
1300, San Francisco, CA 94108. A stockholder may also revoke a proxy by
attending the Annual Meeting and voting in person. Attendance by a
stockholder at the Annual Meeting will not alone serve to revoke his, her
or its proxy.
Solicitation
Proxies in the form enclosed are being solicited by, or on behalf of,
the Board of Directors. The Company will bear the entire cost of
solicitation, including the preparation, assembly, printing and mailing of
this Proxy Statement, the enclosed proxy card and any additional soliciting
materials furnished to stockholders. Copies of solicitation materials will
be furnished to brokerage houses, fiduciaries, and custodians holding
shares in their names that are beneficially owned by others so that they
may forward this solicitation material to such beneficial owners. The
Company may reimburse such persons for their costs in forwarding the
solicitation materials to such beneficial owners. The original solicitation
of proxies by mail may be supplemented by solicitation by telephone,
telegram, or other means by directors, officers or employees of the
Company. No separate compensation will be paid to these individuals for any
such services.
Record Date and Voting
Only holders of record of the Common Stock of the Company on the
Record Date are entitled to notice of and to vote at the Annual Meeting. As
of the Record Date, 666,193 shares of the Company's Common Stock were
issued and outstanding. No shares of the Company's authorized preferred
stock were outstanding on such Date. Each stockholder is entitled to one
vote for each share of Common Stock held by such stockholder. If a quorum,
consisting of a majority of the outstanding shares of Common Stock, is
present at the Annual Meeting, in person or by proxy, the directors shall
be elected by the affirmative vote of a plurality of the shares present at
the Annual Meeting and entitled to vote thereon. All votes will be
tabulated by the inspector of election appointed for the Annual Meeting,
who will separately tabulate votes cast in favor or withheld and broker
non-votes. Votes that are withheld will be excluded entirely from the vote
and have no effect. Broker non-votes are counted as present for purposes of
determining the presence or absence of a quorum for the transaction of
business and will have no effect on the outcome of the election of
directors.
Change of Control
See "Certain Transactions" for a description of the resignation and
replacement of a majority of the Company's Board of Directors in November
1996.
Share Ownership by Certain Beneficial Owners and Management
The following table sets forth certain information known to the
Company with respect to the beneficial ownership of the Common Stock as of
February 14, 1997 by (i) all persons who are beneficial owners of five
percent or more of the Common Stock, (ii) each director who served at any
time during the Company's 1996 fiscal year and nominee for director at the
Annual Meeting, (iii) the Company's chief executive officers who served
during fiscal year 1996, and (iv) all current directors and executive
officers as a group. Unless otherwise indicated, each of the stockholders
has sole voting and investment power with respect to the shares
beneficially owned, subject to community property laws, where applicable.
Such information is based on (i) written statements made to the Company by
such persons, and (ii) Schedules 13D and 13G filed with the Securities and
Exchange Commission.
Principal Stockholders and Share Ownership by Management
- --------------------------------------------------------
<TABLE>
<CAPTION>
Number Percent of
of Total Shares
Name and Address Shares Outstanding<F1>
---------------- ------------ -------------
<S> <C> <C>
Rose Rita Graetz<F2> 53,263 8.0 %
Great Eslyn Side Inc.<F2> 41,699 6.3
James M. Harris 40,250 6.0
15140 Pepper Lane
Saratoga, CA 95070
Cofinvest 97 Ltd.<F2><F3> 36,555 5.5
Friedli Corporate Finance AG<F2><F3><F4> 36,555 5.5
Alan Gelband 35,000 5.3
30 Lincoln Plaza
New York, NY 10023
Russell K. Burbank<F5> 0 *
Michael V. Dettmers<F5> 2,000<F6> *
Reinhard Siegrist<F5> 1,000<F6> *
Hans C. Ochsner<F5> 1,000<F6> *
Donald D. Winstead<F5> 0 *
Joel R. Mesznik<F7> 0 *
All current directors and
officers as a group (4 persons) 4,000<F8> *
*Less than one percent.
<FN>
<F1> Percentage of beneficial ownership is calculated based on 666,193
shares of Common Stock outstanding on January 28, 1997. This
percentage also includes Common Stock of which such individual or
entity has the right to acquire beneficial ownership within 60 days of
February 14, 1997, including but not limited to the exercise of an
option.
<F2> The business address of such person, for purposes hereof, is c/o
Friedli Corporate Finance AG, Freigutstrasse 5, 8002 Zurich,
Switzerland.
<F3> Friedli Corporate Finance AG and Cofinvest 97 Ltd. share beneficial
ownership with respect to the shares set forth opposite their names.
<F4> The Company believes that holders of securities of the Company held
beneficially by persons advised by Friedli Corporate Finance AG
represent approximately 60% of the outstanding Common Stock of the
Company. Holders of securities advised by Friedli Corporate Finance AG
are likely to vote the same way on issues presented to them.
Consequently, it is likely that such stockholders will be able to
control all decisions requiring the vote of stockholders.
<F5> The business address of such person, for purposes hereof, is c/o
Purus, Inc., 600 California Street, Suite 1300, San Francisco, CA
94108. Messrs. Burbank and Dettmers resigned as directors of the
Company in November 1996, at which time Mr. Burbank also resigned as
the Company's Chief Executive Officer, President and Chairman of the
Board. Messrs. Siegrist, Ochsner and Winstead are the current director
nominees.
<F6> Represents shares subject to stock options which are exercisable
within 60 days of February 14, 1997.
<F7> The business address of such person, for purposes hereof, is 122 East
42nd Street, 49th Floor, New York, NY 10168. Mr. Mesznik served as
Chairman of the Board and Chief Executive Officer of the Company from
November 21, 1996 until his resignation on January 21, 1997.
<F8> Includes 2000 shares subject to stock options which are exercisable
within 60 days of February 14, 1997.
</TABLE>
<PAGE>
PURUS, INC.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE -- ELECTION OF DIRECTORS
The persons named below are nominees for director to serve until the
next annual meeting of stockholders or until their successors have been
duly elected and qualified. Messrs. Siegrist and Ochsner, two of the three
nominees, are currently directors of the Company. The Certificate of
Incorporation and ByLaws of the Company provide that the authorized number
of directors shall be determined by resolution of the Board of Directors.
The authorized number of directors is currently three. Proxies cannot be
voted for a greater number of directors than three. Each person nominated
for election has agreed to serve as a director if elected and management
has no reason to believe that any nominee will be unavailable to serve.
Proxies in the accompanying form will be voted at the Annual Meeting in
favor of the election of each of the nominees named below unless authority
to do so is withheld as to any individual nominee or all nominees. In the
unexpected event that any nominee should become unable to serve as a
director, proxies may be voted for the election of substitute nominees.
Directors will be elected by a plurality of the votes cast by the holders
of shares of Common Stock entitled to vote thereon who are present at the
Annual Meeting in person or by proxy.
Nominees
Set forth below is certain information regarding the nominees:
<TABLE>
<CAPTION>
Year First Elected or
Name Age Appointed Director
---- --- ------------------
<S> <C> <C>
Reinhard Siegrist<F1><F2> 49 1996
Hans C. Ochsner<F1><F2> 37 1996
Donald D. Winstead 60 N/A
- ---------------
<FN>
<F1> Member of the Audit Committee
<F2> Member of the Compensation Committee
</TABLE>
REINHARD SIEGRIST has been a director of the Company since May 1996.
Mr. Siegrist has been an independent investor since 1989. From 1981 to 1989
he served as financial analyst, fund manager and head of the asset
management team at a branch of Credit Suisse. Prior to 1981 he was
controller for the Contraves division of Oerlikon Buhrle and an auditor at
Schweizerische Treuhandgesellshaft & Coopers & Lybrand. Mr. Siegrist holds
a Federal Diploma of Accounting of Switzerland.
HANS C. OCHSNER has been an independent private investor since October
1996. From 1990 to September 1996, he served as the Head of Global Equities
in the Asset Management Department of the Canton of Zurich. Prior to that,
he held various positions at Bank Julius Baer & Co. AG, the Union Bank of
Switzerland and Swiss Life insurance Company. Mr. Ochsner holds a degree in
economics and business from Kaderschule Zurich in Zurich, Switzerland.
DONALD D. WINSTEAD has been a business consultant since June 1991 in
his capacity as sole proprietor of WINCO, Inc., a management consulting
company. From April to December 1993, Mr. Winstead served as Chairman of
the Board, Chief Executive Officer and Chief Financial Officer of CHS
Electronics, Inc., a publicly-traded computer software and hardware
company, of which Mr. Winstead currently serves as a director. From October
1993 to December 1994, Mr. Winstead served as Chief Executive Officer and a
director of Inorganic Coatings, Inc., a specialty coatings company, of
which he currently serves as a director. From October 1993 to June 1996,
Mr. Winstead served as Chairman of the Board, Chief Executive Officer and
Chief Financial Officer of Medical Resource Group, Inc., a supplier of air
support therapy in the medical industry. Mr. Winstead holds a B.S. degree
in Electrical Engineering from Ohio Northern University.
There are no family relationships among the directors of the Company.
The Board of Directors unanimously recommends a vote "FOR" the
election of the three nominees named above as directors of the Company.
Board of Directors' Committees and Meetings
During the fiscal year ended December 29, 1996, the Board of Directors
held seven meetings and acted by unanimous written consent seven times. The
Board of Directors has an Audit Committee and a Compensation Committee.
In the beginning of fiscal year 1996, each of the Audit Committee and
Compensation Committee consisted of two directors, Mr. Michael V. Dettmers
and Mr. Henry Klehn, Jr. In May 1996, Mr. Klehn resigned from both
Committees in connection with his resignation from the Board of Directors,
and, in May 1996, Mr. Reinhard Siegrist was appointed to such Committees.
In November 1996, Mr. Dettmers resigned from the Audit Committee and
Compensation Committee in connection with his resignation from the Board of
Directors, and, in November 1996, Mr. Hans Ochsner was appointed to such
Committees. The Audit Committee is authorized to review the results and
scope of the audit and other services provided by the Company's independent
accountants, the need for internal auditing procedures, and the adequacy of
internal controls. The Audit Committee held one meeting during fiscal year
1996.
The Compensation Committee is authorized to establish the salaries,
incentives and other forms of compensation for officers, to administer the
various incentive compensation and benefit plans, including the Company's
1993 Stock Option Plan and 1995 Non-Employee Directors Stock Option Plan,
and to recommend policies relating to such plans. The Compensation
Committee held one meeting during fiscal year 1996.
No incumbent director attended fewer than 75% of the aggregate number
of meetings of the Board of Directors or meetings of the Committees of the
Board of Directors on which he served during fiscal year 1996.
Directors' Compensation
The Company's directors do not currently receive any cash compensation
for service on the Board of Directors or any committee thereof, but
directors may be reimbursed for certain expenses incurred in connection
with attendance at Board of Directors and committee meetings.
Non-employee directors of the Company participate in the Company's
1995 Non-Employee Directors Stock Option Plan (the "1995 Directors Plan"),
which was adopted by the Board of Directors in March 1995 and approved by
the Company's stockholders in May 1995 at its Annual Meeting of
Stockholders. Pursuant to the terms of the 1995 Directors Plan, option
grants to purchase 1,000 shares of Common Stock at an exercise price equal
to 100% of the fair market value of the Common Stock on the grant date are
automatically made on the date of each annual meeting of the Company's
stockholders to the non-employee members of the Board of Directors who have
served as a member of the Board of Directors for a period of at least six
months prior to the date of the annual meeting, or in the case of members
of the Board of Directors who are elected or appointed on or after the date
of the annual meeting, an option grant to purchase 1,000 shares of Common
Stock is automatically made on the date of such initial election or
appointment.
Accordingly, on May 23, 1996, the date of his appointment to the Board
of Directors, Mr. Siegrist received an automatic grant for 1,000 shares of
Common Stock at an exercise price of $3.50 per share. On November 20, 1996,
the date of his appointment to the Board of Directors, Mr. Ochsner received
an automatic grant for 1,000 shares of Common Stock at an exercise price of
$4.00 per share.
Each automatic option granted under the 1995 Directors Plan becomes
exercisable immediately. However, any shares purchased under the option
will be subject to repurchase by the Company, at the exercise price paid
per share, upon the optionee's cessation of Board of Directors service
prior to vesting in those shares. Each option will vest, and the Company's
repurchase right will lapse, in two equal installments over the optionee's
period of continued service as a member of the Board of Directors, with the
first such installment to vest upon the optionee's completion of one year
of Board service measured from the grant date. The shares subject to each
automatic option grant will immediately vest upon certain changes in the
ownership or control of the Company and upon the optionee's death or
permanent disability while serving as a member of the Board of Directors.
Non-employee members of the Board of Directors who are not members of
the Compensation Committee are also eligible to participate in the
Company's 1993 Stock Option Plan. However, no options have been granted to
any such non-employee member of the Board of Directors under that Plan.
Compensation Committee Interlocks and Insider Participation
Russell K. Burbank, who served as the President, Chief Executive
Officer and Chairman of the Board of Directors of the Company during fiscal
year 1996, served on the compensation committee of the Board of Directors
of Amnex, Inc. from October 1995 to August 1996.
EXECUTIVE COMPENSATION
Executive Officers of the Registrant
The executive officers of the Company and their ages and positions as
of February 14, 1997 are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Russell K. Burbank 53 Interim Chief Executive Officer
Stephen D. Mayer 42 Treasurer and Principal Financial and
Accounting Officer
</TABLE>
RUSSELL K. BURBANK was elected Interim Chief Executive Officer of the
Company on February 4, 1997. He also served as Chief Executive Officer,
President, and a director of the Company from November 1994 to November
1996, and as Chairman of the Board of Directors of the Company from January
1995 to November 1996. Since November 19, 1996, Mr. Burbank has been an
independent management consultant and has provided administrative and
operations management services to the Company. From 1993 to 1994, Mr.
Burbank was President and Chief Executive Officer of Applied Dielectrics,
Inc., a producer of high frequency electronic circuits that filed a
petition under Chapter 11 of the United States Bankruptcy Code in 1993.
From 1989 to 1993, Mr. Burbank was President and Chief Executive Officer of
Siva International, a manufacturer of solvent recycling equipment. From
1979 to 1989, Mr. Burbank served in several positions at Thermal Power
Company, a geothermal energy subsidiary of Maxus Energy Corp., including
Executive Vice President and President. From 1971 to 1979, Mr. Burbank
served in several positions at Envirotech Corporation, a manufacturer of
pollution control equipment. Mr. Burbank holds a B.S. in Chemical
Engineering from the University of California, Berkeley and an M.B.A. from
Stanford University.
STEPHEN D. MAYER was elected Treasurer and Principal Financial and
Accounting Officer of the Company in March 1996. Since 1986, Mr. Mayer has
been founder and managing partner of the accounting firm of Burr, Pilger &
Mayer and is responsible for the firm's audits, compilations and reviews,
as well as other special business advisory services, including litigation
support, bankruptcy, mergers and acquisitions, and financing. Prior to
forming Burr, Pilger & Mayer, Mr. Mayer was an audit manager at Coopers &
Lybrand from 1976 to 1986. Mr. Mayer is a member of the American Institute
of Certified Public Accountants and the California Society of Certified
Public Accountants. Mr. Mayer holds B.S. and M.B.A. degrees from the
University of California, Berkeley.
Summary Compensation Table
The following table sets forth information for fiscal years 1996, 1995
and 1994 with respect to the compensation earned by the two individuals who
served as the Company's Chief Executive Officer during fiscal year 1996
(the "Named Executives"). No other executive officer of the Company earned
in excess of $100,000 in the 1996 fiscal year.
<PAGE>
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards/
Number of
Annual Compensation Securities
------------------------- Underlying Other
Principal Position Year Salary Bonus Option Compensation
- ------------------- ---- ------- ------ ------- -------------
<S> <C> <C> <C> <C> <C>
Russell K. Burbank 1996 169,606 0 30,000<F2> 355,460<F3>
President and 1995 168,054 0 30,000<F4> 0
Chief Executive Officer<F1> 1994 19,038 0 0 0
Joel R. Mesznik, 1996 0 0 0 13,770<F6>
Chief Executive Officer<F5>
- ----------------
<FN>
<F1> Mr. Burbank served as Chief Executive Officer, President, and a director of the
Company from November 1994 to November 1996, when he resigned from such positions. He
was elected Interim Chief Executive Officer of the Company in February 1997 and is
currently serving in such position. See " -- Employment, Termination and Change in
Control Arrangements."
<F2> Represents the repricing of options granted in fiscal year 1995. See " -- Repricing of
Options."
<F3> Includes $349,980 paid to Mr. Burbank in connection with the termination of his
employment with the Company and $5,480 paid by the Company with respect to health
insurance premiums for the benefit of Mr. Burbank.
<F4> Represents the number of options granted as adjusted to reflect the Company's
one-for-ten reverse stock split effected in November 1995.
<F5> Mr. Mesznik served as Chief Executive Officer of the Company from November 1996 to
January 1997.
<F6> Represents compensation earned by Mr. Mesznik in November and December 1996 in
connection with his employment with the Company.
</TABLE>
<PAGE>
Stock Option Grants in Last Fiscal Year
The table below sets forth information concerning grants of stock
options to the Named Executives in the 1996 fiscal year.
<PAGE>
<TABLE>
<CAPTION>
Individual Grants Potential
------------------------------------------ Realized Value at
Number of % of Total Assumed Annual
Securities Options Rates of Stock Price
Underlying Granted to Appreciation
Options Employees for Option Term<F1>
Granted in Fiscal --------------------
Name (#) Year ($/Share) Date 5%($) 10%($)
---- --------- --------- --------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Russell K. Burbank 20,000<F2> 42% $3.50 01/31/05 $44,023 $111,562
10,000<F3> 21% $3.50 04/03/05 $22,011 $ 55,781
Joel R. Mesznik 0 - - - - -
- ------------------
<FN>
<F1> The 5% and 10% assumed annual rates of compounded stock price appreciation are mandated by the
rules of the Securities and Exchange Commission. There can be no assurance provided to the
option holder or any other holder of the Company's securities that the actual stock price
appreciation over the ten (10)-year option term will be at the assumed 5% and 10% levels or at
any other level.
<F2> Represents the repricing of stock options granted in fiscal year 1995 at an exercise price of
$12.50 per share, exercisable in four (4) equal annual installments beginning on January 31,
1995. See " -- Repricing of Options." Mr. Burbank exercised the vested portion of such options
(5,000 shares) in fiscal year 1996. See " -- Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values." The unvested portion of such options were canceled upon the
termination of Mr. Burbank's employment with the Company in November 1996. See " -- Employment,
Termination and Change in Control Arrangements."
<F5> Represents the repricing of stock options granted in fiscal year 1995 at an exercise price of
$7.81 per share, exercisable originally upon Mr. Burbank's completion of seven (7) years of
service to the Company, measured from the grant date. However, vesting was subject to
acceleration upon the Company's attainment of certain pre-determined performance goals in the
1995 fiscal year. See " -- Repricing of Options." In March 1996, in addition to the repricing,
the Compensation Committee accelerated the vesting of such options. Mr. Burbank exercised all
of such options in fiscal year 1996. See " -- Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values."
</TABLE>
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
The table below sets forth information concerning the options
exercised by the Named Executives in fiscal year 1996 and options held as
of December 29, 1996 by such Named Executives.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Monty
Shares Options at Options at
Acquired FY-End FY-End
on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable
----- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Russell K. Burbank 15,000 $20,625<F1> 0/0<F2> $0/$0<F2>
Joel R. Mesznik 0 - - -
- ------------------
<FN>
<F1> Based on the closing price of the option shares on October 9, 1996
($4.875 per share), the date of exercise.
<F2> The remainder of Mr. Burbank's stock options were canceled upon the
termination of his employment with the Company on November 19, 1996.
See " -- Employment, Termination and Change in Control Arrangements."
</TABLE>
Repricing of Options
The table below sets forth information concerning all stock option
repricings held by any executive officer of the Company during the last ten
completed fiscal years.
<TABLE>
<CAPTION>
Numberof Market
Securities Price of Exercise Length of
Underlying Stock at Price at New Original
Options Time of Time of Exercise Option Term
Repriced Repricing Repricing Price Remaining
Name Date ($) ($) ($) ($) Repricing
----- ------- ---------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Russell K. Burbank 3/26/96 20,000 3.50 12.50 3.50 9 years
10,000 3.50 7.81 3.50 9 years
</TABLE>
Employment, Termination and Change in Control Arrangements
The Company entered into an employment agreement (the "Burbank
Agreement") with Mr. Burbank in November 1994. Under the Burbank Agreement,
Mr. Burbank received a base salary of $165,000 per year until May 11, 1995,
when it was increased to $175,000 per year, and was eligible to receive an
annual bonus at the discretion of the Compensation Committee.
In July 1995, the Company adopted the Purus, Inc. Severance and
Retention Plan (the "Plan") to govern the terms and conditions under which
the Company would provide severance and/or retention benefits to certain
eligible employees in connection with the termination of their employment
with the Company. The Plan supersedes, and the benefits thereunder are in
lieu of, all benefits offered under any and all prior severance, separation
or salary continuation programs, plans or arrangements. Pursuant to the
original terms of the Plan, Mr. Burbank was entitled to receive fifty-two
(52) weeks of base salary, payable in one lump sum, in the event of
involuntary termination of his employment or the elimination of his
position during the term of the Plan, provided that he execute a general
release of all claims against the Company. In April 1996, the Company
adopted Amendment No. 1 to the Plan to provide that the amount of such lump
sum payment to Mr. Burbank be increased to one hundred four (104) weeks of
base salary.
On November 19, 1996, the Company entered into a Release and
Consulting Agreement with Mr. Burbank in connection with the termination of
his employment with the Company. The Release and Consulting Agreement
superseded the Plan and provided, among other things, for (i) a lump-sum
severance payment to Mr. Burbank in the amount of $250,000 plus accrued
salary and vacation pay, (ii) severance payments payable in four monthly
installments of $25,000 beginning on December 19, 1996 and, (iii) the
purchase by a third party of 22,000 shares of Purus Common Stock,
representing all of the Common Stock owned by Mr. Burbank, for $88,000.
Also pursuant to such Agreement, Mr. Burbank resigned as President, Chief
Executive Officer and Chairman of the Board of Directors of the Company,
and entered into a Consulting Agreement with the Company (the "Consulting
Agreement"). In accordance with the Consulting Agreement, which expires on
March 19, 1997, Mr. Burbank agreed to provide a minimum of 60 hours of
administrative and management consulting services to the Company per month,
and is entitled to receive compensation in the amount of $150 per hour for
each hour of services provided over 60 hours each month, up to a maximum of
60 additional hours. In addition, Mr. Burbank is entitled to reimbursement
for expenses incurred in connection with such services. Mr. Burbank was
elected as the Company's Interim Chief Executive Officer in February 1997.
See "Certain Transactions."
The Compensation Committee, as Administrator of the Company's 1993
Stock Option Plan, has the authority to provide for the accelerated vesting
of the shares of Common Stock subject to outstanding options granted
thereunder to certain executive officers in connection with certain changes
in control of the Company or the subsequent termination of an officer's
employment following a change in control event.
Compensation Committee Report on Executive Compensation
It is the responsibility of the Compensation Committee of the Board of
Directors to make recommendations to the Board of Directors with respect to
the base salary and bonuses to be paid to the Company's executive officers
each fiscal year. In addition, the Compensation Committee has the authority
to administer the Company's 1993 Stock Option Plan, under which grants of
stock options may be made to such officers and other key employees. The
following is a summary of the policies of the Compensation Committee which
affect the compensation paid to executive officers, as reflected in the
tables and text set forth elsewhere herein.
General Compensation Policy.
Under the supervision of the Compensation Committee, the Company has
developed a compensation policy which is designed to attract and retain
qualified key executives critical to the Company's success and to provide
such executives with performance-based incentives tied to the profitability
of the Company. One of the Committee's primary objectives is to have a
substantial portion of each officer's compensation contingent upon the
Company's performance as well as upon the individual's contribution to the
success of the Company as measured by his personal performance.
Accordingly, each executive officer's compensation package is fundamentally
comprised of three elements: (i) base salary which reflects individual
performance and expertise and is designed to be competitive with salary
levels in the industry and at similarly sized companies in the same
geographic location as the Company; (ii) variable performance awards
payable in cash and tied to the Company's achievement of certain goals; and
(iii) long-term stock-based incentive awards which strengthen the mutuality
of interests between the executive officers and the Company's stockholders.
CEO Compensation
Russell K. Burbank served as Chief Executive Officer and President of
the Company during fiscal year 1996 from January to November 19, 1996. In
determining Mr. Burbank's overall compensation package, the Compensation
Committee considered the factors set forth above (see " -- General
Compensation Policy"), putting particular emphasis on base salary and
long-term incentive compensation. The base salary for Mr. Burbank in fiscal
year 1996 resulted from direct negotiation between Mr. Burbank and the
Compensation Committee, and, the Compensation Committee believes, closely
reflected current market conditions for executives of Mr. Burbank's
experience and expertise. As the long-term incentive portion of Mr.
Burbank's compensation in fiscal year 1996, the Compensation Committee
accelerated the vesting of stock options to purchase 10,000 shares of
Common Stock which were originally granted to Mr. Burbank in fiscal year
1995 under the Company's 1993 Stock Option Plan. As originally granted,
such options were to vest in full upon Mr. Burbank's completion of seven
years of service to the Company commencing on the grant date, except that
vesting was subject to acceleration upon the Company's attainment of
certain pre-determined revenue, profitability and cash reserve levels in
fiscal year 1995. During the course of fiscal year 1995, in light of the
pending sale of substantially all of the Company's operating assets, the
performance goals established as conditions for the accelerated vesting of
Mr. Burbank's options ceased to be aligned with the development of the
Company and no longer served as a meaningful personal incentive for Mr.
Burbank to remain with the Company. Accordingly, the Compensation Committee
established certain personal performance goals for Mr. Burbank for the 1995
fiscal year, which goals were attained, and the full vesting of such option
shares was subsequently approved by the Compensation Committee in March
1996. Mr. Burbank resigned as Chief Executive Officer of the Company in
November 1996.
Option Repricings
Also as part of the long-term incentive portion of Mr. Burbank's
compensation in fiscal year 1996, the Compensation Committee, in March
1996, repriced stock options to purchase an aggregate of 30,000 shares of
Common Stock granted to Mr. Burbank in fiscal year 1995 under the Company's
1993 Stock Option Plan (including 10,000 shares referred to under "CEO
Compensation" above). Pursuant to such repricing, the exercise price of
$7.81 per share, was amended to an exercise price of $3.50 per share. The
Compensation Committee decided to reprice such options as a result of its
determination that the trading price of the Common Stock was unlikely to
reach $7.81 or $12.50 at any time in the near future in light of the fact
that the Company had entered into an agreement to sell substantially all of
its operating assets. In addition, the Compensation Committee believed that
the apparent inability of the trading price of the Common Stock to reach
the option exercise price was not principally a result of the efforts, or
lack thereof, by Mr. Burbank as Chief Executive Officer of the Company. By
repricing the option at an exercise price of $3.50, a more realistic
trading price, the Compensation Committee believed that such options would
provide an incentive to Mr. Burbank to perform his duties for the Company
to the best of his ability.
Compliance with Internal Revenue Code Section 162(m).
Section 162(m) of the Internal Revenue Code, enacted in 1993,
generally disallows a tax deduction to publicly held corporations for
compensation exceeding $1 million paid to certain of the corporation's
executive officers. The cash compensation to be paid to the Company's
executive officers for fiscal 1996 did not exceed the $1 million limit per
officer. The Company's 1993 Stock Option Plan has been amended to limit the
maximum number of shares of Common Stock for which any one participant may
be granted stock options over the remaining term of that plan so that any
compensation deemed paid to an executive officer when he or she exercises
an outstanding option under that plan should qualify as performance-based
compensation which would not be subject to the $1 million limitation.
Compensation Committee
s/Reinhard Siegrist.
s/Hans C. Ochsner
<PAGE>
STOCK PERFORMANCE GRAPH
The Company's Common Stock was publicly traded for the first time on
November 9, 1993. The graph depicted below compares the cumulative total
stockholder return (assuming reinvestment of dividends) on the Company's
Common Stock, from December 31, 1993 through December 31, 1996, with the
cumulative total return of the Environmental Business Journal ("EBJ") Stock
Index consisting of peer group companies *, and the Nasdaq Composite Index,
each assuming $100 invested on December 31, 1993.
Comparison of Cumulative Total Return
(Index = 100 beginning on 12/31/93)
<TABLE>
<CAPTION>
12/31 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
INDEX 1993 1994 1994 1994 1994 1995 1995 1995 1995 1996 1996 1996 1996
- ------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Purus 100.0 86.5 53.8 44.2 10.6 5.3 7.2 3.8 1.6 2.9 3.3 4.0 3.1
EBJ 100.0 103.3 93.3 93.5 91.2 84.4 90.2 91.7 90.3 95.2 97.6 92.1 95.4
Nasdaq 100.0 95.7 90.9 98.4 96.8 105.2 120.2 134.3 135.4 141.8 152.5 158.3 166.2
- -----------
</TABLE>
* Although the Company sold substantially all of its assets representing
its environmental pollution control business in April 1996, the
Company knows of no other line-of-business index or group of peer
issuers that would provide a more meaningful basis for comparison than
the EBJ Stock Index.
<PAGE>
CERTAIN TRANSACTIONS
In March 1996, the Company retained The Dettmers Consulting Group
("DCG"), of which Mr. Dettmers is a principal, to provide services with
respect to the wind-down of the Company's operations. For the services
provided to the Company, DCG was paid $5,000.00.
Beginning in November, 1995, the Company retained the accounting firm
of Burr, Pilger & Mayer ("BPM") of which Stephen D. Mayer, the Company's
Treasurer and Principal Financial and Accounting Officer, is a managing
partner, for financial, accounting and administrative services. For the
services provided to the Company in fiscal year 1996, BPM was paid
$144,000.
On or about November 5, 1996, a group of holders of the Company's
Common Stock represented by the Purus Stockholders' Protective Committee
(the "Committee") sent to the Company's stockholders notice of a special
meeting of stockholders to be held on December 3, 1996 (the "Special
Meeting"), two days prior to the originally scheduled date of the Annual
Meeting, together with a proxy statement describing the Committee's
proposal to remove two of the three directors of the Company. In addition,
on or about November 11, 1996, the Committee sent to the Company's
stockholders another proxy statement with the intention of preventing the
establishment of a quorum at the Annual Meeting. The Committee sought to
remove, and prevent the election at the Annual Meeting of, a majority of
the existing directors of the Company because it believed that (i) recent
actions of the Board had been a principal cause of the Company's poor
financial performance and (ii) payment of a distribution in the amount of
$3.00 per share to all stockholders of record on December 12, 1996 (the
"Distribution"), as proposed by the Board for stockholder ratification at
the Annual Meeting, would drain the Company of the resources necessary for
it to expand and develop.
On November 19, 1996, prior to the date scheduled for the Annual
Meeting, Russell K. Burbank and Michael V. Dettmers, two of the three
directors of the Company, resigned from the Board. Concurrently, Mr.
Burbank entered into a Release and Consulting Agreement with the Company
pursuant to which his employment by the Company as Chief Executive Officer
thereof terminated. See " -- Employment, Termination and Change in Control
Arrangements." On November 20, 1996, Reinhard Siegrist, the sole remaining
director, appointed Joel R. Mesznik and Hans C. Ochsner to fill the
vacancies in the Board created by the resignations of Messrs. Burbank and
Dettmers. On November 21, 1996, Mr. Mesznik was elected Chairman of the
Board and President and Chief Executive Officer of the Company and, on
November 25, 1996, the Company announced that it had postponed the Annual
Meeting in order to give the new directors time to examine the Company's
operating plan and the prudence of paying the Distribution. Also on
November 25, the Committee announced the cancellation of the Special
Meeting and the discontinuation of its proxy solicitation.
On January 21, 1996, Mr. Mesznik resigned as Chairman of the Board,
President and Chief Executive Officer of the Company. On February 4, 1997,
the size of the Board of Directors was decreased from three to two, Mr.
Burbank was appointed Interim Chief Executive Officer and the Board of
Directors rescinded the distribution as a result of its determination that
payment thereof was not in the best interests of the Company and its
stockholders. On February 19, 1997, the size of the Board of Directors was
increased to three, and Donald D. Winstead was nominated for election at
the Annual Meeting to fill the vacancy. The Company is currently searching
for a permanent Chief Executive Officer.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934,
directors and executive officers of the Company and beneficial owners of
more than 10% of the Company's outstanding Common Stock are required to
file certain reports with the Securities and Exchange Commission with
respect to their ownership of Common Stock. Based upon (i) copies of
Section 16(a) reports which the Company received from such persons and (ii)
written representations received from certain of such persons that no
annual Form 5 reports were required to be filed by them, the Company
believes that all required Section 16(a) reports were filed in a timely
manner.
SUBMISSION OF STOCKHOLDER PROPOSALS - 1998 ANNUAL MEETING
Any proposal which is intended to be presented by any stockholder for
action at the Company's 1998 Annual Meeting of Stockholders must be
received in writing by the Secretary of the Company at the Company's
principal executive offices at 600 California Street, Suite 1300, San
Francisco, California 94108, a reasonable time prior to the Company's
solicitation of proxies in connection with the 1998 Annual Meeting of
Stockholders in order for such proposal to be considered for inclusion in
the Proxy Statement and form of proxy relating to such Meeting.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP has audited the Company's financial statements
annually since fiscal year 1992. Representatives of KPMG Peat Marwick LLP
are expected to be present at the Annual Meeting, to have the opportunity
to make a statement, if they so desire, and will be available to respond to
appropriate questions.
OTHER MATTERS
The Company knows of no other matters that will be presented for
consideration of the Annual Meeting. If any other matters properly come
before the Annual Meeting, it is the intention of the persons named in the
enclosed form of proxy to vote the shares represented thereby as the Board
of Directors may recommend. Discretionary authority with respect to such
other matters is granted by the execution of the enclosed Proxy.
By Order of the Board of Directors
Reinhard Siegrist
Director
Dated: February 24, 1997
PROXY PROXY
PURUS, INC.
600 CALIFORNIA STREET, SAN FRANCISCO, CA 94108
This Proxy is Solicited on behalf of the Board of Directors for the
Annual Meeting of Stockholders on March 21, 1997.
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of the Annual Meeting of Stockholders and the Proxy Statement dated
February 24, 1997, and appoints Russell K. Burbank and Stephen D. Mayer,
and each of them, as the Proxies of the undersigned, with full power of
substitution, to vote, as specified herein, all shares of Common Stock of
Purus, Inc. (the "Company"), held of record by the undersigned on January
28, 1997, either on his or her own behalf or on behalf of any entity or
entities, at the Annual Meeting of Stockholders of the Company to be held
on March 21, 1997, and at any adjournment(s) or postponement(s) thereof,
with the same force and effect as the undersigned might or could do if
personally present thereat. The shares represented by this Proxy shall be
voted in the manner set forth on the reverse side of this Proxy Card.
(Continued and to be signed on reverse side.)
Please mark your vote as in this sample
The Board of Directors recommends a vote "FOR" the following proposal:
1. To elect the following directors to serve until the 1998 annual
meeting of stockholders or until their respective successors are elected
and qualified:
Nominees: Reinhard Siegrist FOR WITHHOLD
Hans C. Ochsner All Nominees All Nominees
Donald D. Winstead
Instruction: To withhold authority to vote for any individual
nominee(s), write that nominee's name in the space provided below.
-----------------------------------
2. In their discretion, the proxies are authorized to vote upon such
other matters as may properly come before the meeting and at any
adjournment(s) or postponement(s) thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. THIS PROXY WILL BE VOTED FOR THE
ELECTION AS DIRECTOR OF ALL THE NOMINEES LISTED ABOVE IF NO SPECIFICATION
IS MADE.
Please mark, sign, date, and return this proxy card promptly using the
enclosed envelope.
Signature ___________________________ Date _________1997 Date _________1997
_____________________________________ Signature, if held jointly
NOTE: Please sign exactly as name(s) is (are) shown on the stock
certificate to which the Proxy applies. When shares are held by joint
tenant(s), both should sign. When signing as an attorney, executor,
administrator, trustee, or guardian, please give full title, as such. If a
corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in the partnership's
name by an authorized person.
