UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Securities Exchange Act of 1934 (Amendment No. )
Filed
by the Registrant o
Filed
by a Party other than the Registrant x
Check
the appropriate box:
o Preliminary
Proxy
Statement
o Confidential,
for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2))
x Definitive
Proxy
Statement
o Definitive
Additional
Materials
o Soliciting
Material Pursuant to
240.14a-12
Perma-Fix
Environmental Services, 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.
|
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o
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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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:
Persons
who are to respond to the collection of information contained in this form
are
not required to respond unless the form displays a SEC 1913(05-05) currently
valid OMB control number.
o Fee
paid
previously with preliminary materials.
o 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.: Def 14A
3)
Filing Party: Perma-Fix Environmental Services, Inc.
4)
Date Filed: June 20, 2005
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
1940
N.W. 67th Place
Gainesville,
Florida 32653
NOTICE
OF ANNUAL MEETING
To
Be Held July 27, 2005
To
the
Stockholders of Perma-Fix Environmental Services, Inc.:
Notice
is
hereby given that the 2005 Annual Meeting of Stockholders (the “Meeting”) of
Perma-Fix Environmental Services, Inc. (the “Company”) will be held at the
offices of Perma-Fix Environmental Services, Inc., 1940 N.W. 67th Place,
Gainesville, Florida 32653, on Wednesday, July 27, 2005, at 1:00 p.m. (EDST),
for the following purposes:
| 1. |
To
elect seven directors to serve until the next Annual Meeting of
Stockholders or until their respective successors are duly elected
and
qualified;
|
| 2. |
To
ratify the appointment of BDO Seidman, LLP as the independent auditors
of
the Company for the 2005 fiscal year;
and
|
| 3. |
To
transact such other business as may properly come before the meeting
and
at any adjournments thereof.
|
Only
stockholders of record at the close of business on June 3, 2005, will be
entitled to notice of, and to vote at, the Meeting or at any postponement or
adjournment thereof. A complete list of the stockholders entitled to vote at
the
meeting will be open to the examination of any stockholder for any purposes
relevant to the meeting during ordinary business hours for 10 days prior to
the
meeting at the offices of the Company. The list will also be available at the
meeting.
The
Company’s Annual Report for 2004 is enclosed for your convenience.
By
the
order of the Board of Directors
/s/
Richard T. Kelecy
Richard
T. Kelecy
Secretary
Gainesville,
Florida
June
20,
2005
It
is important that your shares be represented at the
meeting. Please
complete, date, sign and return the accompanying Proxy whether or not you plan
to attend the meeting in person. The enclosed return envelope requires no
additional postage if mailed in the United States. If a stockholder decides
to
attend the meeting, he or she may, if so desired, revoke the Proxy and vote
in
person.
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
1940
N.W. 67th Place
Gainesville,
Florida 32653
PROXY
STATEMENT
FOR
THE
2005
ANNUAL MEETING OF STOCKHOLDERS
Solicitation
This
Proxy Statement is furnished to the holders of the common stock, par value
$.001
(the “Common Stock”), of Perma-Fix Environmental Services, Inc. (the “Company”)
in connection with the solicitation on behalf of the Board of Directors of
the
Company (the “Board of Directors” or the “Board”) of proxies to be used in
voting at the 2005 Annual Meeting of Stockholders to be held at the Company’s
offices, located at 1940 N.W. 67th Place, Gainesville,
Florida
32653, on Wednesday, July 27, 2005, at 1:00 p.m. (EDST), and any adjournments
thereof (the “Meeting”). The Notice of Annual Meeting of Stockholders, this
Proxy Statement and the accompanying Proxy Card were first mailed to
stockholders on or about June 20, 2005.
The
Company will pay the cost of preparing, printing, assembling and mailing this
Proxy Statement and the Proxy Card. In addition to solicitation by use of the
mail, certain of the Company’s officers and employees may, without receiving
additional compensation therefore, solicit the return of proxies by telephone,
telegram or personal interview. The Company will reimburse brokerage houses
and
custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses
in forwarding soliciting materials to their principals, the beneficial owners
of
Common Stock.
Revocation
of Proxy
The
enclosed proxy is for use at the Meeting if the stockholder will not be able
to
attend in person. Any stockholder who executes a proxy may revoke it at any
time
before it is voted by delivering to the Company’s Secretary either an instrument
revoking the proxy or a duly executed proxy bearing a later date. Any
stockholder present at the Meeting who expresses a desire to vote his shares
in
person may also revoke a proxy.
Record
Date and Voting Shares
Only
the
holders of Common Stock of record at the close of business on June 3, 2005
(the
“Record Date”), will have the right to receive notice of, and be entitled to
vote at, the Meeting. At the close of business on the Record Date, 41,805,267
shares (excluding 988,000 treasury shares) of Common Stock were issued and
outstanding. Each stockholder of record, as of the Record Date, is entitled
to
one vote for each share of Common Stock that the stockholder owned as of the
Record Date on each matter to be voted upon at the Meeting. A majority of all
of
the outstanding shares of Common Stock entitled to notice of, and to vote at,
the Meeting, represented in person or by proxy, will con-stitute a quorum for
the holding of the Meeting. The failure of a quorum to be represented at the
Meeting will necessitate adjournment and will subject the Company to additional
expense.
Pursuant
to the General Corporation Law of the State of Delaware, only votes cast “FOR” a
matter constitute affirmative votes, except proxies in which the stockholder
fails to make a specification as to whether the stockholder votes
“FOR,”“AGAINST,”“ABSTAIN” or “WITH-HOLD” as to a particular matter shall be
considered as a vote “FOR” that matter. Votes in which the stockholder specifies
“WITHHOLD” or “ABSTAIN” are counted for quorum purposes. Abstentions and broker
non-votes are not considered as votes “FOR” a particular matter. An inspector of
election appointed by the Board of Directors will tabulate votes.
PROPOSAL
1 - ELECTION OF DIRECTORS
The
Company’s Certificate of Incorporation, as amended, provides that each member of
the Board of Directors shall hold office until the next annual meeting of
stockholders and their successors have been elected and qualified or until
their
earlier resignation or removal. Suc-cessors to those Directors whose terms
have
expired are required to be elected by stockholder vote. The existing Board
of
Directors fills vacancies for an unexpired term and any additional positions
created by the Board of Directors’ action.
The
Company’s Bylaws provide that the number of the Company’s directors (the
“Directors”) shall be at least three, and that the number of Directors may be
increased or decreased by action of the Board. The Board of Directors currently
has determined that the number of Directors shall be seven.
The
seven
Directors named below have been recommended by the Corporate Governance and
Nominating Committee (“Nominating Committee”) to the Board of Directors for
election at the Meeting to serve until the next annual meeting of the
stockholders and until their respective successors are elected and qualified.
All nominees are incumbent Directors. Shares represented by the enclosed proxy
will be voted “FOR” the election as Directors of the seven nominees named below
unless authority is withheld. Except as described below, if any nominee named
below becomes unavailable for election, the proxies in the form solicited will
be voted for a person who is recommended by the Nominating Committee and who
the
Board of Directors proposes to replace such nominee. Approval of each nominee
for election to the Board of Directors will require the affirmative vote of
a
plurality of the votes cast by the holders of the Company’s Common
Stock.
1
Nominees
for Directors
The
following sets forth information concerning the seven nominees for election
as
Directors:
|
Director/Nominee
|
Principal
Occupation and
Other
Information
|
|
Dr.
Louis F. Centofanti
Chairman
of the Board
and
Director since 1991,
Age:
61
|
Dr.
Centofanti has served as Chairman of the Board of the Company since
he
joined the Company in February 1991. Dr. Centofanti also served
as
President and Chief Executive Officer of the Company from February
1991
until September 1995, and again in March 1996 was elected to serve
as
President and Chief Executive Officer of the Company and is still
serving
in that capacity. From 1985 until joining the Company, Dr. Centofanti
served as Senior Vice President of USPCI, Inc. (“USPCI”), a large
hazardous waste management company, where he was responsible for
managing
the treatment, reclamation and technical groups within USPCI. In
1981, he
founded PPM, Inc. a hazardous waste management company specializing
in the
treatment of PCB contaminated oils, which was subsequently sold
to USPCI.
From 1978 to 1981, Dr. Centofanti served as Regional Administrator
of the
Department of Energy for the southeastern region of the United
States. Dr.
Centofanti has a Ph.D and a M.S. in Chemistry from the University
of
Michigan, and a B.S. in Chemistry from Youngstown State
University.
|
|
Jon
Colin
Director
since 1996,
Age:
49
|
Mr.
Colin has served as a Director of the Company since December 1996
and is a
member of the Audit Committee and the Compensation and Stock Option
Committee. Mr. Colin is currently Chief Executive Officer of Lifestar
Response Corporation, a position he has held since April 2002.
Mr. Colin
served as Chief Operating Officer of Lifestar Response Corporation
from
October 2000 to April 2002, and a consultant for Lifestar Response
Corporation from September 1997 to October 2000. From 1990 to 1996,
Mr.
Colin served as President and Chief Executive Officer for Environmental
Services of America, Inc., a publicly traded environmental services
company. Mr. Colin has a B.S. in Accounting from the University
of
Maryland.
|
|
Jack
Lahav
Director
since 2001,
Age:
56
|
Jack
Lahav has served as a Director of the Company since September 2001
and is
a member of the Corporate Governance and Nominating Committee and
the
Compensation and Stock Option Committee. Mr. Lahav is a private
investor,
specializing in launching and growing businesses. Previously, Mr.
Lahav
founded Remarkable Products, Inc. and served as its president from
1980 to
1993; Mr. Lahav was also co-founder of Lamar Signal Processing,
Inc.;
president of Advanced Technologies, Inc., a robotics company; and
Director
of Vocaltech Communications, Inc.
|
|
Joe
R. Reeder
Director
since April 2003,
Age:
57
|
Mr.
Reeder has served as a Director since April 2003, and is a member
of the
Corporate Governance and Nominating Committee and the Compensation
and
Stock Option Committee. Mr. Reeder also serves as Shareholder in
Charge of
the Mid-Atlantic Region for Greenberg Traurig LLP, an international
law
firm with 18 offices and 950 attorneys. Previously, Mr. Reeder
served as
Litigation Chair of Patton Boggs LLP. His clientele has included
countries, international corporations, and law firms throughout
the United
States. Mr. Reeder served for four years as the 14th
Under Secretary of the Army and for three years as Chairman of
the Panama
Canal Commission’s Board of Directors where he oversaw a
multibillion-dollar infrastructure program. He is a trustee of
the
Association of the United States Army and frequent television commentator
on military issues. Mr. Reeder has a L.L.M. from Georgetown University,
J.D. from the University of Texas and a B.S. from the U.S. Military
Academy at West Point.
|
2
|
Alfred
C. Warrington, IV
Director
since 2002,
Age:
69
|
Mr.
Warrington has served as a Director of the Company since March
2002, and
is a member of the Audit Committee and the Corporate Governance
and
Nominating Committee. Mr. Warrington was the founding chairman,
co-chief executive officer and chief financial officer of Sanifill,
Inc.,
a solid waste company that was merged with Waste Management, Inc.
He
currently serves as vice-chairman of HC Industries, Inc., a manufacturer
of health and beauty aids. He has also been very active in community
affairs and higher education. Mr. Warrington served as co-chairman
of the
MARTA referendum that brought rapid transit to the city of Atlanta
and has
been a strong supporter of the University of Florida, where he
was
instrumental in starting the School of Accounting. In recognition
of his
efforts and a significant contribution, the University of Florida
has
renamed the College of Business as the Warrington College of Business.
In
2001 Governor Jeb Bush appointed Mr. Warrington to the newly formed
University of Florida Board of Trustees. Prior to joining Sanifill,
Mr.
Warrington was a practicing CPA and a partner with Arthur Andersen
&
Co. Mr. Warrington holds a B.S.B.A. from the University of
Florida.
|
|
Dr.
Charles E. Young
Director
since July 2003,
Age:
73
|
Dr.
Young has served as a Director since July 2003, and is a member
of the
Corporate Governance and Nominating Committee and the Compensation
and
Stock Option Committee. Dr. Young is currently residing in Qatar
and is
serving as president of the Qatar Foundation for Education, Science
and
Community Development, a position he assumed in April 2004. Dr.
Young
previously served as president of the University of Florida, from
November
1999 to December 2003. Dr. Young also served as chancellor of the
University of California at Los Angeles (UCLA) for 29 years until
his
retirement in November 1997. Dr. Young was formerly the chairman
of the
Association of American Universities and served on numerous commissions
including the American Council on Education, the National Association
of
State Universities and Land-Grant Colleges, and the Business-Higher
Education Forum. Dr. Young serves on the board of directors of
I-MARK,
Inc., a software and professional services company. He previously
served
on the boards of directors of Intel Corp., Nicholas-Applegate Growth
Equity Fund, Inc., Fiberspace, Inc., and Student Advantage, Inc.
Dr. Young
has a Ph.D. and M.A. in political science from UCLA and a B.A.
from the
University of California at Riverside.
|
|
Mark
A. Zwecker
Director
since 1991,
Age:
54
|
Mr.
Zwecker has served as a Director of the Company since its inception
in
January 1991 and is a member of the Audit Committee, and the Compensation
and Stock Option Committee. Mr. Zwecker is currently chief
financial
officer of Intrusec Inc., a position he has held since September
2003, and
president of ACI Technology, LLC, a position he has held since
1997.
Previously, Mr. Zwecker was Vice President of Finance and Administration
for American Combustion, Inc., a position he held from 1986 until
1998. In
1983, Mr. Zwecker participated as a founder with Dr. Centofanti
in
the start up of PPM, Inc. He remained with PPM, Inc. until its
acquisition
in 1985 by USPCI. Mr. Zwecker has a B.S. in Industrial and
Systems
Engineering from the Georgia Institute of Technology and an M.B.A.
from
Harvard University.
|
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF
THE SEVEN NOMINEES AS THE COMPANY’S DIRECTORS.
Board
Independence
The
Board
of Directors has determined that each of Messrs. Zwecker, Colin, Lahav,
Warrington, Reeder, and Young is an “independent director” under the current
listing standards of the Nasdaq Stock Market, Inc. (“NASDAQ”). Dr. Centofanti is
not considered to be an “independent director” because of his employment as a
senior executive of the Company.
Meetings
and Committees of the Board of Directors
During
2004, the Board of Directors held nine meetings. No Director attended fewer
than
75% of the aggregate number of meetings held by the Board of Directors and
the
committees on which he served during 2004, except Dr. Young was only able to
attend 44% of the Board meetings and committee meetings on which he serves.
The
Board of Directors has an Audit Committee, Compensation and Stock Option
Committee and a Corporate Governance and Nominating Committee.
3
Audit
Committee:
The
Audit
Committee assists the Board of Directors in monitoring the integrity of the
financial statements of the Company, the independent auditor’s qualifications
and independence, the performance of the Company’s internal audit function and
independent auditor, and the Company’s compliance with legal and regulatory
requirements. In carrying out these purposes, the Audit Committee, among other
things:
| · |
appoints,
evaluates, and approves the compensation of, the Company’s independent
auditor;
|
| · |
pre-approves
all auditing services and permitted non-audit
services;
|
| · |
annually
considers the qualifications and independence of the independent
auditors;
|
| · |
reviews
recommendations of independent auditors concerning the Company’s
accounting principles, internal controls and accounting procedures
and
practices;
|
| · |
reviews
and approves the scope of the annual
audit;
|
| · |
reviews
and discusses with the independent auditors the audited financial
statements; and
|
| · |
performs
such other duties as set forth in the Audit Committee
Charter.
|
The
Audit
Committee acts under an Audit Committee Charter that was adopted by the Board
of
Directors on February 27, 2003, which replaced its previous charter. A copy
of
the Audit Committee Charter is available on the website at www.perma-fix.com.
The
Audit Committee has established procedures for the receipt, retention and
treatment of complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential, anonymous
submission by employees of the Company of concerns regarding accounting or
auditing matters.
The
Audit
Committee members during 2004 were Al Warrington (Chairperson), Jon Colin and
Mark Zwecker. The Board of Directors has determined that each of the three
members of the Audit Committee is an “audit committee financial expert.” The
Audit Committee meets at least quarterly and at such additional times as
necessary or advisable and held nine meetings in 2004. The Board of Directors
has determined that each member of the Audit Committee is “independent” as that
term is defined by the current NASDAQ listing standards and as specified in
Rule
10A-3 under the Securities Exchange Act of 1934, as amended.
Compensation
and Stock Option Committee:
The
Compensation and Stock Option Committee reviews and recommends to the Board
of
Directors the compensation and benefits of all of the Company’s officers and
reviews general policy matters relating to compensation and benefits of the
Company’s employees. The Compensation and Stock Option Committee also
administers the Company’s stock option plans, and its 2003 Employee Stock
Purchase Plan. The members of the Compensation and Stock Option Committee during
2004 were Mark Zwecker (Chairperson), Jack Lahav, Joe Reeder, Dr. Charles Young
and Jon Colin. The Compensation and Stock Option Committee held four meetings
in
2004.
Corporate
Governance and Nominating Committee:
The
Corporate Governance and Nominating Committee recommends to the Board of
Directors candidates to fill vacancies on the Board, as well as, the nominees
for election as the Company’s directors by
the
stockholders at each annual meeting of stockholders. Members of the Nominating
Committee during 2004 were Jack Lahav (Chairperson), Joe Reeder, Dr. Charles
Young and Al Warrington. The Corporate Governance and Nominating Committee
held
one meeting in 2004. Effective after the second quarter of 2005, the Corporate
Governance and Nominating Committee will meet not less than quarterly. The
Corporate Governance and Nominating Committee adopted a Corporate Governance
and
Nominating Committee Charter, which is available on our website at www.perma-fix.com.
All
members of the Corporate Governance and Nominating Committee are "independent"
as that term is defined by the current NASDAQ listing standards.
The
Corporate Governance and Nominating Committee does not have a formal policy
with
regard to the consideration of any director candidate recommended by security
holders, because our Board of Directors believes that our by-laws and the
procedures noted below provide sufficient guidance for the consideration of
such
persons so recommended. Although there is no formal procedure for stockholders
to recommend nominees for the Board of Directors, the Nominating Committee
will
consider such recommendations if received in writing, together with all of
the
information described below as to the person so recommended, 120 days in advance
of the annual meeting of stockholders. The Committee will consider appropriate
factors such as experience with other organizations, skills, diversity,
integrity, judgment and independence. Recommendations should be made in
compliance with the Company’s by-laws and be addressed to the Nominating
Committee at the Company’s address and provide all information relating to such
person that the stockholder desires to nominate that is required to be disclosed
in solicitation of proxies for the election of such nominee, including the
nominee’s written consent to serve as a director if so elected. If the chairman
of the Meeting determines that a person is not nominated in accordance with
the
nomination procedure, such nomination will be disregarded.
4
Code
of Ethics
The
Company has adopted a Code of Ethics that applies to all executive officers.
The
Code of Ethics is available on our website at www.perma-fix.com.
If any
amendments are made to the Code of Ethics or any grants of waivers are made
to
any provisions of the Code of Ethics to any of its executive officers, the
Company will promptly disclose the amendment or waiver and nature of such
amendment or waiver on the Company’s website.
Compensation
of Directors
In
2004,
we paid our outside directors fees of $1,500 for each month of service,
resulting in the six outside directors earning annual director's fees in the
total amount of $108,000. As a member of the Board of Directors, each director
elects to receive either 65% or 100% of the director's fee in shares of our
Common Stock based on 75% of the fair market value of the Common Stock
determined on the business day immediately preceding the date that the fee
is
due. The balance of each director's fee, if any, is payable in cash. The
aggregate amount of accrued directors' fees at December 31, 2004, to be paid
during 2005 to the six outside directors (Messrs. Colin, Lahav, Reeder,
Warrington, Young and Zwecker) was $54,000. Reimbursement of expenses for
attending meetings of the Board are paid in cash at the time of the applicable
Board meeting. The outside directors do not receive additional compensation
for
committee participation or special assignments, except for reimbursement of
expenses. We do not compensate the directors that also serve as our officers
or
employees of our subsidiaries for their service as directors. Although Dr.
Centofanti is not compensated for his services provided as a director, Dr.
Centofanti is compensated for his services rendered as an officer of the
Company. See "EXECUTIVE COMPENSATION — Summary Compensation Table."
Effective
May 1, 2005, the Board of Directors approved an increase in the director fee
paid to the chairman of our Audit Committee to $3,750 for each month of service,
which represents an increase of $2,250 from the previous $1,500 monthly director
fee. The increase is a result of the additional time and responsibilities placed
on this board position.
We
believe that it is important for our directors to have a personal interest
in
our success and growth and for their interests to be aligned with those of
our
stockholders. Therefore, under our 1992 Outside Directors Stock Option and
Incentive Plan ("1992 Directors Plan"), each outside director was granted a
10
year option to purchase up to 15,000 shares of Common Stock on the date such
director was initially elected to the Board of Directors and received on each
reelection date an option to purchase up to another 5,000 shares of Common
Stock, with the exercise price being the fair market value of the Common Stock
on the date that the option is granted. No option granted under the 1992
Directors Plan is exercisable until after the expiration of six months from
the
date the option is granted and no option shall be exercisable after the
expiration of ten years from the date the option is granted. In 2003, our
stockholders approved the 2003 Outside Directors Stock Plan ("2003 Directors
Plan"). The 2003 Directors Plan is substantially similar to the 1992 Directors
Plan (which terminated in 2003), with the exception that each outside director
is granted a 10 year option to purchase 30,000 shares of Common Stock when
initially elected, and granted a 10 year option to purchase 12,000 shares of
Common Stock on each reelection date. As of December 31, 2004, options to
purchase 220,000 shares of Common Stock had been granted and are outstanding
under the 1992 Directors Plan and options to purchase 162,000 shares of Common
Stock were granted and are outstanding under the 2003 Directors Plan. During
2004, 45,000 option shares expired under the 1992 Directors' Plan.
As
of the
date of this report, we have issued 226,550 shares of our Common Stock in
payment of director fees under the 1992 Directors Plan, covering the period
January 1, 1995 through December 31, 2003. No new shares may be issued under
the
1992 Directors Plan, except for the exercise of options already granted. We
have
also issued 140,035 shares of our Common Stock in payment of director fees
under
the 2003 Directors Plan, covering the period October 1, 2003, through December
31, 2004.
5
Communications
with the Board
The
Company’s Board of Directors believes that it is important for the Company to
have a process that enables stockholders to send communications to the
Board. Accordingly, stockholders who wish to communicate with the Board
of
Directors or a particular director may do so by sending a letter to the
Secretary of the Corporation, at 1940 N.W. 67th
Place,
Gainesville, Florida 32653. The mailing envelope must clearly indicate
that the enclosed letter is a “Stockholder-Board Communication” or
“Stockholder-Director Communication.” All such letters must identify the
author as a stockholder and clearly state whether the intended recipients are
all members of the Board of Directors or only certain specified individual
directors. The Secretary of the Corporation will make copies of all
such
letters and circulate them to the appropriate director or
directors.
Compensation
Committee Interlocks and Insider Participation
During
2004, the Compensation and Stock Option Committee for the Company’s Board of
Directors was composed of Mark Zwecker, Jack Lahav, Joe Reeder, Dr. Charles
Young and Jon Colin. Messrs. Zwecker, Lahav, Reeder, Young and Colin were
neither officers nor employees of the Company or any subsidiaries during 2004.
Certain
Relationships
There
are
no family relationships between any of the Company’s existing Directors,
executive officers, or persons nominated or chosen to become a Director or
executive officer. Dr. Centofanti is the only Director who is the Company’s
employee.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the regulations promulgated thereunder require our executive officers and
directors and beneficial owners of more than ten percent (10%) of any class
of
our equity security registered pur-suant to Section 12 of the Exchange Act
to
file reports of ownership and changes of ownership of our equity securities
with
the Securities and Exchange Com-mission, and to furnish us with copies of all
such reports. Based solely on a review of the copies of such reports furnished
to us and information provided to us, we believe that during 2004 none of our
executive officers and directors failed to timely file reports under Section
16(a).
Capital
Bank-Grawe Gruppe AG ("Capital Bank") has advised us that it is a banking
institution regulated by the banking regulations of Austria, which holds shares
of our Common Stock as agent on behalf of numerous investors. Capital Bank
has
represented that all of its investors are accredited investors under Rule 501
of
Regulation D promulgated under the Act. In addition, Capital Bank has advised
us
that none of its investors beneficially own more than 4.9% of our Common Stock.
Capital Bank has further informed us that its clients (and not Capital Bank)
maintain full voting and dispositive power over such shares. Consequently,
Capital Bank has advised us that it believes it is not the beneficial owner,
as
such term is defined in Rule 13d-3 of the Exchange Act, of the shares of our
Common Stock registered in the name of Capital Bank because it has neither
voting nor investment power, as such terms are defined in Rule 13d-3, over
such
shares. Capital Bank has informed us that it does not believe that it is
required (a) to file, and has not filed, reports under Section 16(a) or (b)
to
file either Schedule 13D or Schedule 13G in connection with the shares of our
Common Stock registered in the name of Capital Bank.
If
the
representations, or information provided, by Capital Bank are incorrect or
Capital Bank was historically acting on behalf of its investors as a group,
rather than on behalf of each investor independent of other investors, then
Capital Bank and/or the investor group would have become a beneficial owner
of
more than 10% of our Common Stock on February 9, 1996, as a result of the
acquisition of 1,100 shares of Series 1 Preferred Stock that were convertible
into a maximum of 1,282,798 shares of our Common Stock commencing 45 days after
issuance of the Series 1 Preferred. If either Capital Bank or a group of Capital
Bank's investors became a beneficial owner of more than 10% of our Common Stock
on February 9, 1996, and thereby required to file reports under Section 16(a)
of
the Exchange Act, then Capital Bank has failed to file a Form 3 or any Forms
4
or 5 for period from February 9, 1996, until the present.
Audit
Committee Report
The
Audit
Committee is responsible for providing independent objective oversight of the
Company’s accounting functions and internal controls. In accordance with rules
adopted by the Commission, the Audit Committee of the Company states
that:
| · |
The
Audit Committee has reviewed and discussed with management the Company’s
audited financial statements for the fiscal year ended December 31,
2004.
|
| · |
The
Audit Committee has discussed with BDO Seidman, LLP, the Company’s
independent auditors, the matters required to be discussed by Statement
on
Auditing Standards No. 61 (“Communications with Audit Committees”), as
modified or supplemented.
|
6
| · |
The
Audit Committee has received the written disclosures and the letter
from
BDO Seidman, LLP, required by Independence Standards Board Standard
No. 1
(“Independence Discussions with Audit Committees”), as modified or
supplemented, and has discussed with BDO Seidman, LLP, the independent
accountant’s independence.
|
In
connection with the Audit Committee’s discussion with BDO Seidman, LLP, as
described above, the Audit Committee discussed and considered (a) that
approximately 60% of the total hours spent on audit services for the Company
for
the year ended December 31, 2004, were spent by Gallogly, Fernandez & Riley,
LLP (“GFR”), members of the BDO Seidman, LLP alliance network of firms, and (b)
the nature and scope of the non-audit services performed by GFR, and determined
that the audit and non-audit services provided by BDO Seidman, LLP and GFR
were
compatible with maintaining the independence of BDO Seidman, LLP.
Based
upon the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the Company’s audited financial
statements be included in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2004, for filing with the Securities and Exchange
Commission. The Audit Committee also appointed BDO Seidman, LLP as the Company’s
independent auditor for 2005.
This
report is submitted on behalf of the members of the Audit
Committee:
|
Alfred
C. Warrington, IV (Chairperson)
|
|
Jon
Colin
|
|
Mark
Zwecker
|
The
Report of the Audit Committee shall not be deemed to be “soliciting material” or
to be “filed” with the Securities and Exchange Commission, nor shall it be
incorporated by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as amended, or
the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference and shall not
otherwise be deemed filed under such Acts.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth certain information with respect to the compensation
of our Chairman and Chief Executive Officer and the Company’s other executive
officers whose compensation and bonus, as so determined, exceeded $100,000
during 2004.
|
Annual
Compensation
|
Long-Term
Compensation
|
|||||||||||||
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)(1)
|
Other
Annual
Compen-
sation
($)
|
Restricted
Stock
Award(s)
($)
|
Securities
Underlying
Options/
SARs
(#)
|
All
Other
Compen-
sation
($)(2)
|
|||||||
|
Dr.
Louis F. Centofanti
|
2004
|
190,000
|
50,000
|
¾
|
¾
|
¾
|
11,695
|
|||||||
|
Chairman
of the Board,
|
2003
|
183,069
|
40,000
|
—
|
—
|
100,000
|
11,503
|
|||||||
|
President
and Chief
|
2002
|
149,500
|
—
|
—
|
—
|
—
|
11,214
|
|||||||
|
Executive
Officer
|
||||||||||||||
|
Richard
T. Kelecy
|
2004
|
175,000
|
30,000
|
¾
|
¾
|
¾
|
12,250
|
|||||||
|
Vice
President and Chief
|
2003
|
168,885
|
30,000
|
—
|
—
|
75,000
|
10,950
|
|||||||
|
Financial
Officer
|
2002
|
138,958
|
—
|
—
|
—
|
—
|
10,725
|
|||||||
|
Larry
McNamara
|
2004
|
173,000
|
35,000
|
¾
|
¾
|
¾
|
11,569
|
|||||||
|
President
of Nuclear Services
|
2003
|
167,231
|
30,000
|
—
|
—
|
100,000
|
11,457
|
|||||||
|
2002
|
137,042
|
—
|
—
|
—
|
—
|
10,826
|
||||||||
|
Timothy
Keegan
|
2004
|
160,000
|
15,000
|
¾
|
¾
|
¾
|
11,760
|
|||||||
|
President
of Industrial Services
|
2003
|
104,615
|
—
|
—
|
—
|
100,000
|
6,375
|
|||||||
7
|
(1)
|
The
bonuses represent amounts paid in the respective year, but accrued
for and
expensed in the prior year. We have accrued for 2004, approximately
$160,000 for officer performance bonuses to be paid in
2005.
|
|
(2)
|
Each
noted executive is provided a monthly automobile allowance in the
amount
of $750. Also included, where applicable, is our 401(k) matching
contribution.
|
Option
Grants in 2004
During
2004, there were no individual grants of stock options made to any of the
executive officers named in the Summary Compensation Table.
Aggregated
Option Exercised in 2004 and Fiscal Year-end Option Values
The
following table sets forth the fiscal year-end value of unexercised options
held
by executive officers named in the Summary Compensation table. None of the
named
executive officers exercised stock options during 2004.
|
Number
of Unexercised
Options
at Fiscal Year End
(#)
|
Value
of Unexercised
In-the-Money
Options
At
Fiscal Year End ($)(2)
|
|||||||||||
|
Name
|
Shares
Acquired
on
Exercise
(#)(1)
|
Value
Realized
($)(1)
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
||||||
|
Dr.
Louis F. Centofanti
|
—
|
—
|
460,000
|
135,000
|
37,080
|
10,745
|
||||||
|
Richard
Kelecy
|
—
|
—
|
257,000
|
98,000
|
107,508
|
7,242
|
||||||
|
Larry
McNamara
|
—
|
—
|
132,000
|
138,000
|
26,608
|
8,422
|
||||||
|
Timothy
Keegan
|
—
|
—
|
20,000
|
80,000
|
—
|
¾
|
||||||
(1)
No
options were exercised during 2004.
(2)
Represents the difference between $1.809 (the closing price of our Common Stock
reported on the National Association of Securities Dealers Automated Quotation
("NASDAQ") Small Cap Market on December 31, 2004), and the option exercise
price. The actual value realized by a named executive officer on the exercise
of
these options depends on the market value of our Common Stock on the date of
exercise.
Employment
Contracts and Change-in-Control Arrangements
The
Company does not have any employment agreements with any of its executive
officers. Nor does the Company have any compensatory plan or arrangement that
would result in any payments to any executive officers upon such officer’s
resignation, retirement or other termination or from a change in control of
the
Company. However, the
Company’s 1991 Performance Equity Plan, the 1993 Non-qualified Stock Option
Plan, and the 2004 Stock Option Plan, described under “Report of the
Compensation and Stock Option Committee (c) Stock Options” (collectively, the
“Plans”) provide that in the event of a change in control (as defined in the
Plans) of the Company, each outstanding option and award granted under the
Plans
shall immediately become exercisable in full notwithstanding the vesting or
exercise provisions contained in the stock option agreement.
401(k)
Plan
We
adopted the Perma-Fix Environmental Services, Inc. 401(k) Plan (the "401(k)
Plan") in 1992, which is intended to comply with Section 401 of the Internal
Revenue Code and the provisions of the Employee Retirement Income Security
Act
of 1974. All employees who have attained the age of 18 are eligible to
participate in the 401(k) Plan. Participating employees may make annual pretax
contributions to their accounts up to 18% of their compensation, up to a maximum
amount as limited by law. We, at our discretion, may make matching contributions
based on the employee's elective contributions. Company contributions vest
over
a period of five years. We currently match up to 25% of our employees'
contributions, not to exceed 3% of a participant's compensation. We contributed
$272,000 in matching funds during 2004.
Employee
Stock Purchase Plans
1996
Purchase Plan.
The
Perma-Fix Environmental Services, Inc. 1996 Employee Stock Purchase Plan
provides our eligible employees an opportunity to purchase our Common Stock
through payroll deductions. The maximum number of shares of our Common Stock
that may be issued under the plan was 500,000 shares. The plan provided that
shares would be purchased two times per year and that the exercise price per
share shall be 85% of the market value of each such share of Common Stock on
the
offering date on which such offer commences or on the exercise date on which
the
offer period expires, whichever is lowest. Once employees become eligible to
participate in the plan the discount is available to all employees. The first
purchase period commenced July 1, 1997. The maximum number of shares available
was issued after the first offering period in 2004, with no additional shares
issuable under the plan. The following table details the resulting employee
stock purchase totals.
8
|
Purchase
Period
|
Proceeds
|
Shares
Purchased
|
||
|
July
1 - December 31, 1997
|
$
|
16,000
|
8,276
|
|
|
January
1 - June 30, 1998
|
17,000
|
10,732
|
||
|
July
1 - December 31, 1998
|
22,000
|
17,517
|
||
|
January
1 - June 30, 1999
|
28,000
|
21,818
|
||
|
July
1 - December 31, 1999
|
49,000
|
48,204
|
||
|
January
1 - June 30, 2000
|
54,000
|
53,493
|
||
|
July
1 - December 31, 2000
|
52,000
|
46,632
|
||
|
January
1 - June 30, 2001
|
48,000
|
43,324
|
||
|
July
1 - December 31, 2001
|
69,000
|
33,814
|
||
|
January
1 - June 30, 2002
|
94,000
|
42,917
|
||
|
July
1 - December 31, 2002
|
92,000
|
43,243
|
||
|
January
1 - June 30, 2003
|
91,000
|
57,620
|
||
|
July
1 - December 31, 2003
|
76,000
|
44,799
|
||
|
January
1 - June 30, 2004
|
42,000
|
27,611
|
||
|
500,000
|
2003
Purchase Plan.
In 2003,
our stockholders approved the adoption of the Perma-Fix Environmental Services,
Inc. 2003 Employee Stock Purchase Plan. The plan provides our eligible employees
an opportunity to purchase our Common Stock through payroll deductions. The
maximum number of shares issuable under the plan is 1,500,000. The Plan
authorized the purchase of shares two times per year, at an exercise price
per
share of 85% of the market price of our Common Stock on the offering date of
the
period or on the exercise date of the period, whichever is lower. Once employees
become eligible to participate in the plan the discount is available to all
employees.
The
first
purchase period commenced July 1, 2004, which resulted in the issuance for
the
period ended December 31, 2004, of 31,287 shares purchased in February 2005,
for
proceeds of $47,000.
Equity
Compensation Plans
The
following table sets forth information as of December 31, 2004, with respect
to
our equity compensation plans.
|
Equity
Compensation Plan
|
||||||
|
Plan
Category
|
Number
of securities to
be
issued upon exercise
of
outstanding options
warrants
and rights
|
Weighted
average
exercise
price of
outstanding
options,
warrants
and
rights
|
Number
of securities
remaining
available for
future
issuance under
equity
compensation
plans
(excluding
securities
reflected in
column
(a)
|
|||
|
(a)
|
(b)
|
(c)
|
||||
|
Equity
compensation plans
approved
by stockholders
|
2,675,950
|
$1.77
|
2,091,465
|
|||
|
Equity
compensation plans not
approved
by stockholders (1)
|
300,000
|
2.58
|
—
|
|||
|
Total
|
2,975,950
|
$1.85
|
2,091,465
|
|||
(1)
These
shares are issuable pursuant to options granted to Dr. Centofanti under his
1997
employment agreement, which terminated in 2000. The options expire in October
2007.
Report
of the Compensation and Stock Option Committee
The
Compensation and Stock Option Committee (the “Compensation Committee”) is
responsible for reviewing and approving the Company’s compensation policies and
the compensation paid to the Company’s executive officers, including the
executive officers named in the Summary Compensation Table. The Company’s
compensation program for its executive officers is generally not formalized
but
is designed to provide levels of compensation required to assist the Company
in
attracting and retaining qualified executive officers. The Compensation
Committee attempts to set an executive officer’s compensation at a level that is
similar to such officer’s peers in the industry consistent with the size of the
Company. Generally, executive officer compensation, including that of the Chief
Executive Officer, is not directly related to the Company’s performance.
Instead, the Compensation Committee has a philosophy that recognizes individual
initiative and achievement in arriving at an officer’s compensation. The
executive compensation program is comprised of salary, cash incentives and
stock
options. The following is a discussion of each of the elements of the executive
compensation program.
9
Salary
Generally,
base salary for each executive officer is similar to levels within the industry
and comparable to the level which the Company believes could be attained for
equal positions elsewhere, but consistent with the Company’s size. Also taken
into account are benefits, years of service, responsibilities, Company growth,
future plans and the Company’s current ability to pay. The Board of Directors
increased Dr. Centofanti’s salary in 2004 through application of an inflation
factor and, in addition, the Compensation Committee further increased Dr.
Centofanti’s compensation to a level it believed was consistent with salary
levels of other Chief Executive Officers at similar situated and sized companies
in the waste industry. Mr. Kelecy’s, Mr. McNamara’s and Mr. Keegan's salaries
were increased in 2004 in response to the Compensation Committee’s review of
executive officer salary levels at similarly sized and situated companies within
the Company’s industry. Salaries were again increased in 2005 in conjunction
with new compensation plans approved by the Compensation Committee. See below
under Cash Incentives for discussion on the new compensation plans.
Cash
Incentives
The
cash
incentive plan is a program through which cash bonuses may be paid on an annual
basis to reward significant corporate accomplishments and individual initiative
demonstrated by executive officers during the prior fiscal year. The
Compensation Committee determines the amount of cash bonuses.
In
May
2005, the Compensation Committee approved the adoption of the executive
compensation plans for fiscal year 2005, that in addition to salary increases,
also established a bonus plan for each executive officer. Establishes a
quarterly and annual bonus compensation plan (the "Bonus Plan") for each of
the
above listed executive officers of the Company. Each executive officer has
a
separate Bonus Plan, with eligible quarterly payments to that executive officer,
if they meet the required criteria for a quarterly bonus payment, which shall
be
payable the subsequent month and an annual bonus payment to that executive
officer, if they meet the required criteria for annual bonus payments,
which shall be payable the subsequent month following the close of the
Company's books for the year in question. Annual or quarterly bonus payments
under a Bonus Plan is payable only if the Company meets a minimum threshold
of 85% of its budgeted EBITDA for the quarter and year end. If the EBITDA
criteria are met, the executive officer is eligible to receive quarterly
and annual payments based on achieving certain targets set forth
in the executive officer's particular Bonus Plan during the quarter
in
question and the year in question. The amount of the quarterly and annual
payments will vary depending on the target met and the percentage of meeting
such target.
Stock
Options
The
Company’s Stock Option Plans were adopted for the purpose of promoting the
interests of the Company and its stockholders by attracting and retaining
executive officers and other key employees of outstanding ability. Options
are
granted to eligible participants based upon their potential impact on corporate
results and on their individual performance. Generally, options are granted
at
market value, vest over a number of years, and are generally dependent upon
continued employment. The Compensation Committee believes that the grant of
time-vested options provides an incentive that focuses the executive officers’
attention on managing the Company from the perspective of owners with an equity
stake in the Company. Options further motivate executive officers to maximize
long-term growth and profitability because value is created in the options
only
as the Common Stock price increases after the option is granted.
This
report is submitted on behalf of the members of the Compensation and Stock
Option Committee:
|
Mark
Zwecker (Chairperson)
|
|
Jack
Lahav
|
|
Jon
Colin
|
|
Joe
Reeder
|
|
Dr.
Charles Young
|
10
Common
Stock Price Performance Graph
The
following Common Stock price performance graph compares the yearly change in
the
Company’s cumulative total stockholders’ returns on the Common Stock during the
years 2000 through 2004, with the cumulative total return of the NASDAQ Market
Index and the published industry index prepared by Hemscott and known as
Hemscott Industry Group 637-Waste Management Index (“Industry Index”) assuming
the investment of $100 on January 1, 2000.
Assumes
$100 invested in the Company on January 1, 2000, the Industry Index and the
NASDAQ Market Index. The above five-year Cumulative Total Return Graph shall
not
be deemed to be “soliciting material” or to be filed with the Securities and
Exchange Commission, nor shall such information be incorporated by reference
by
any general statement incorporating by reference this Proxy Statement into
any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934
(collectively, the “Acts”), except to the extent that the Company specifically
incorporates this information by reference, and shall not be deemed to be
soliciting material or to be filed under such Acts.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security
Ownership of Certain Beneficial Owners
The
table
below sets forth information as to the shares of voting securities beneficially
owned as of June 3, 2005, by each person known by us to be the beneficial owners
of more than 5% of any class of our voting securities.
|
Name
of Beneficial Owner
|
Title
Of
Class
|
Amount
and
Nature
of
Ownership
|
Percent
Of
Class
(1)
|
|||
|
Rutabaga
Capital Management(2)
|
Common
|
5,033,014
(2)
|
12.0%
|
(1)
In
computing the number of shares and the percentage of outstanding Common Stock
"beneficially owned" by a person, the calculations are based upon 41,805,267
shares of Common Stock issued and outstanding on June 3, 2005 (excluding 988,000
Treasury Shares), plus the number of shares of Common Stock which such person
has the right to acquire beneficial ownership of within 60 days. Beneficial
ownership by our stockholders has been determined in accordance with the rules
promulgated under Section 13(d) of the Exchange Act.
(2)
This
beneficial ownership amount is according to the Schedule 13F-HR, filed with
the
Securities and Exchange Commission, on May 11, 2005,
and
according to discussions with Rutabaga Management, which provides that Rutabaga
Capital Management, an investment advisor, has sole voting power over 2,168,700
shares and shared voting power over 2,864,314 shares, and has sole dispositive
power over all of these shares. The address of Rutabaga Capital Management
is:
64 Broad Street, 3rd
Floor,
Boston, MA 02109.
Security
Ownership of Capital Bank
Capital
Bank represented to us that:
| · |
Capital
Bank owns shares of our Common Stock and rights to acquire shares
of our
Common Stock only as agent for certain of Capital Bank's
investors;
|
| · | All of the Capital Bank's investors are accredited investors; |
11
| · | None of Capital Bank's investors beneficially own more than 4.9% of our Common Stock; |
| · |
Capital
Bank's investors maintain full voting and dispositive power over
the
Common Stock beneficially owned by such investors;
and
|
| · |
Capital
Bank has neither voting nor investment power over the shares of Common
Stock owned by Capital Bank, as agent for its
investors.
|
Notwithstanding
the previous paragraph, if Capital Bank's representations to us described above
are incorrect or if Capital Bank's investors are acting as a group, then Capital
Bank or a group of Capital Bank's investors could be a beneficial owner of
more
than 5% of our voting securities. If Capital Bank is deemed the beneficial
owner
of such shares, the following table sets forth information as to the shares
of
voting securities that Capital Bank may be considered to beneficially own on
June 3, 2005.
|
Name
of
Record
Owner
|
Title
Of
Class
|
Amount
and
Nature
of
Ownership
|
Percent
Of
Class
(1)
|
|||
|
Capital
Bank Grawe Gruppe (2)
|
Common
|
10,236,007
(2)
|
22.2%
|
(1)
This
calculation is based upon 41,805,267 shares of Common Stock issued and
outstanding on June 3, 2005 (excluding 988,000 Treasury Shares), plus the number
of shares of Common Stock which Capital Bank, as agent for certain accredited
investors has the right to acquire within 60 days.
(2)
This
amount includes 5,901,202 shares that Capital Bank owns of record, as agent
for
certain accredited investors and 2,668,138 shares that Capital Bank has the
right to acquire, as agent for certain investors, within 60 days under certain
Warrants. The Warrants are exercisable at an exercise price of $1.75 per share
of Common Stock. This amount also includes 1,666,667 shares of Common Stock
issuable upon the conversion of 2,500 shares of Series 17 Preferred held by
Capital Bank. This amount does not include the shares of Common Stock, which
may
be issuable for payment of dividends on the Series 17 Preferred. Capital Bank
has also advised us that it is holding these Warrants and shares on behalf
of
numerous clients, all of which are accredited investors. Although Capital Bank
is the record holder of the shares of Common Stock and Warrants described in
this note, Capital Bank has advised us that it does not believe it is a
beneficial owner of the Common Stock or that it is required to file reports
under Section 16(a) or Section 13(d) of the Exchange Act. Because Capital Bank
(a) has advised us that it holds the Common Stock as a nominee only and that
it
does not exercise voting or investment power over the Common Stock held in
its
name and that no one investor of Capital Bank for which it holds our Common
Stock holds more than 4.9% of our issued and outstanding Common Stock; (b)
has
no right to, and is not believed to possess the power to, exercise control
over
our management or its policies; (c) has not nominated, and has not sought to
nominate, a director to our board; and (d) has no representative serving as
an
executive officer of the Company, we do not believe that Capital Bank is our
affiliate. Capital Bank's address is Burgring 16, 8010 Graz, Austria. Capital
Bank has advised us that it is a banking institution.
Capital
Bank owns, as agent for its investors, 2,500 shares of Series 17 Preferred,
which may be converted into shares of Common Stock at any time at a conversion
price of $1.50 per share, subject to adjustment as set forth in the Certificate
of Designations relating to the Series 17 Preferred. The Series 17 Preferred
has
a “stated value” of $1,000 per share. The 2,500 shares are currently convertible
into 1,666,667 shares of Common Stock. The Company may, at its sole option,
redeem, in whole or in part, at any time, and from time to time the then
outstanding Series 17 Preferred at the cash redemption price of $1,200 per
share. Upon any notice of redemption, Capital Bank shall have only five business
days to exercise its conversion rights regarding the redeemed
shares.
The
Series 17 Preferred accrues dividends on a cumulative basis at a rate of 5%
per
annum, which dividends are payable semiannually when and as declared by the
Board of Directors. During 2003, accrued dividends on the Series 17 Preferred
of
approximately $125,000 were paid in the form of 53,478 shares of our Common
Stock, of which 19,643 were issued in February 2004. During 2004, accrued
dividends on the Series 17 Preferred of approximately $125,000 were paid in
the
form of 34,938 shares of our Common Stock and $63,000 in cash, of which the
$63,000 was paid in March 2005.
During
2004, Capital Bank exercised outstanding warrants to purchase (a) 14,262 shares
of Common Stock at a total exercise price of $24,959, or $1.75 per share; (b)
105,000 shares of Common Stock at a total exercise price of $206,724, or $1.9688
per share; (c) 105,000 shares of Common Stock at a total exercise price of
$203,438, or $1.9375 per share; and (d) 105,000 shares of Common Stock at a
total exercise price of $190,313, or $1.8125 per share.
12
Security
Ownership of Management
The
following table sets forth information as to the shares of voting securities
beneficially owned as of June 3, 2005, by each of our directors and executive
officers named in the Summary Compensation Table and by all of our directors
and
executive officers as a group. Beneficial ownership has been determined in
accordance with the rules promulgated under Section 13(d) of the Exchange Act.
A
person is deemed to be a beneficial owner of any voting securities for which
that person has the right to acquire beneficial ownership within 60 days.
|
Name
of Beneficial Owner
|
Number
of Shares
Of
Common Stock
Beneficially
Owned
|
Percentage
of
Common
Stock (1)
|
||
|
Dr.
Louis F. Centofanti (2)(3)
|
1,334,934
|
(3)
|
3.16%
|
|
|
Jon
Colin (2)(4)
|
111,380
|
(4)
|
*
|
|
|
Jack
Lahav (2)(5)
|
1,225,917
|
(5)
|
2.89%
|
|
|
Joe
Reeder (2)(6)
|
252,686
|
(6)
|
*
|
|
|
Alfred
C. Warrington, IV (2)(7)
|
189,766
|
(7)
|
*
|
|
|
Dr.
Charles E. Young (2)(8)
|
52,407
|
(8)
|
*
|
|
|
Mark
A. Zwecker (2)(9)
|
293,874
|
(9)
|
*
|
|
|
Richard
T. Kelecy (2)(10)
|
287,950
|
(10)
|
*
|
|
|
Larry
McNamara (2)(11)
|
186,000
|
(11)
|
*
|
|
|
Timothy
Keegan (2)(12)
|
40,000
|
(12)
|
*
|
|
|
Directors
and Executive Officers as a Group (10
persons)
|
3,974,914
|
9.10%
|
*Indicates
beneficial ownership of less than one percent (1%).
(1)
See
footnote (1) of the table under "Security Ownership of Certain Beneficial
Owners."
(2)
The
business address of such person, for the purposes hereof, is c/o Perma-Fix
Environmental Services, Inc., 1940 N.W. 67th Place, Gainesville, Florida
32653.
(3)
These
shares include (i) 535,934 shares held of record by Dr. Centofanti; (ii) options
to purchase 195,000 shares granted pursuant to the 1991 Performance Equity
Plan
and the 1993 Non-qualified Stock Option Plan, which are immediately exercisable;
(iii) options to purchase 300,000 shares granted pursuant to Dr. Centofanti's
employment agreement that expired in 2000, which are immediately exercisable;
and (iv) 304,000 shares held by Dr. Centofanti's wife. This amount does not
include options to purchase 80,000 shares granted pursuant to the 1993
Non-qualified Stock Option Plan, which are not exercisable within 60 days.
Dr.
Centofanti has sole voting and investment power of these shares, except for
the
shares held by Dr. Centofanti's wife, over which Dr. Centofanti shares voting
and investment power. In January 2005, 20,000 option shares expired under the
1993 Non-qualified Stock Option Plan.
(4)
Mr.
Colin
has sole voting and investment power over these shares which include: (i) 42,380
shares held of record by Mr. Colin, and (ii) options to purchase 69,000 shares
granted pursuant to the 1992 Outside Directors Stock Option and Incentive Plan
and the 2003 Outside Directors Stock Plan, which are immediately exercisable.
(5)
Mr.
Lahav
has sole voting and investment power over these shares which include: (i)
610,488 shares of Common Stock held of record by Mr. Lahav; (ii) 44,000 options
to purchase Common Stock pursuant to the 1992 Outside Directors Stock Option
and
Incentive Plan and the 2003 Outside Directors Stock Plan which are immediately
exercisable; and (iii) 571,429 Warrants to purchase Common Stock, which are
exercisable immediately.
(6)
Mr.
Reeder has sole voting and investment power over these shares which include:
(i)
213,686 shares of Common Stock held of record by Mr. Reeder, and (ii) options
to
purchase 39,000 shares granted pursuant to the 1992 Outside Directors Stock
Option and Incentive Plan and the 2003 Outside Directors Stock Plan, which
are
immediately exercisable.
(7)
Mr.
Warrington has sole voting and investment power over these shares which include:
(i) 145,766 shares of Common Stock held of record by Mr. Warrington; and (ii)
44,000 options to purchase Common Stock pursuant to the 1992 Outside Directors
Stock Option and Incentive Plan and the 2003 Outside Directors Stock Plan which
are immediately exercisable.
(8)
Dr.
Young
has sole voting and investment power over these shares which include: (i) 10,407
shares held of record by Dr. Young; and (ii) options to purchase 42,000 shares
granted pursuant to the 2003 Outside Directors Stock Plan, which are immediately
exercisable.
13
(9)
Mr.
Zwecker has sole voting and investment power over these shares which include:
(i) 224,874 shares of Common Stock held of record by Mr. Zwecker; and (ii)
options to purchase 69,000 shares granted pursuant to the 1992 Outside Directors
Stock Option and Incentive Plan and the 2003 Outside Directors Stock Plan which
are immediately exercisable.
(10)
Mr.
Kelecy has sole voting and investment power over 21,950 shares of Common Stock
held of record by Mr. Kelecy and 266,000 options to purchase Common Stock
granted pursuant to the 1993 Non-qualified Stock Option Plan. This amount does
not include options to purchase 59,000 shares of Common Stock granted pursuant
to the 1993 Non-qualified Stock Option Plan, which are not exercisable within
60
days. In January 2005, 30,000 option shares expired under the 1993 Non-qualified
Stock Option Plan.
(11)
Mr.
McNamara has sole voting and investment power over these shares which include:
(i) 186,000 options to purchase Common Stock pursuant to the 1993 Non-qualified
Stock Option Plan which are exercisable within 60 days. This amount does not
include options to purchase 84,000 shares pursuant to the 1993 Non-qualified
Stock Option Plan which are not exercisable within 60 days.
(12)
Mr.
Keegan has sole voting and investment power over options to purchase 40,000
shares granted pursuant to the 1993 Non-Qualified Stock Option Plan which are
exercisable within 60 days. This amount does not include options to purchase
60,000 shares of Common Stock granted pursuant to the 1993 Non-qualified Stock
Option Plan, which are not exercisable within 60 days.
PROPOSAL
2 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The
Audit
Committee has appointed BDO Seidman, LLP (“BDO Seidman”) as independent
accountants to audit the consolidated financial statements of the Company for
fiscal year 2005. BDO Seidman has been the Company’s independent auditor since
December 18, 1996. It is expected that representatives of BDO Seidman will
be
present at the annual meeting, will have an opportunity to make a statement
if
they desire to do so, and will be available to answer appropriate
questions.
The
affirmative vote of the holders of a majority of the Common Stock present in
person or by proxy at the Meeting and entitled to vote is required for adoption
of this proposal.
Audit
Fees
The
aggregate fees and expenses billed by BDO Seidman, LLP ("BDO") for professional
services rendered for the audit of the Company's annual financial statements
for
the fiscal years ended December 31, 2004 and 2003, for the reviews of the
financial statements included in the Company's Quarterly Reports on Form 10-Q
for those fiscal years, and for review of documents filed with the Securities
and Exchange Commission for those fiscal years were approximately $422,100
and
$195,800, respectively. Audit fees for 2004 include approximately $198,900
in
fees to provide internal control audit services to the Company. Approximately
60% and 85% of the total hours spent on audit services for the Company for
the
years ended December 31, 2004 and 2003, respectively, were spent by Gallogly,
Fernandez and Riley, LLP ("GFR") members of the BDO alliance network of firms.
Such members are not full time, permanent employees of BDO.
Audit-Related
Fees
BDO
was
engaged to provide audit related services to the Company for the fiscal year
ended December 31, 2004. The aggregate fees billed by BDO for that period was
$14,600. BDO was not engaged to provide audit related services to the Company
for the fiscal year ended December 31, 2003.
GFR
audited the Company's 401(k) Plan during 2004 and 2003, and billed $7,800 and
$7,800, respectively.
Tax
Services
BDO
was
not engaged to provide tax services to the Company for the fiscal years ended
December 31, 2004 and 2003.
The
aggregate fees billed by GFR for tax compliance services for 2004 and 2003
were
approximately $34,400 and $32,000, respectively.
All
Other Fees
BDO
was
not engaged to provide any other services to the Company for the fiscal years
ended December 31, 2004 and 2003.
14
GFR
was
not engaged to provide any other services to the Company for the fiscal years
ended December 31, 2004 and 2003.
The
Audit
Committee of the Company's Board of Directors has considered whether BDO's
provision of the services described above for the fiscal years ended December
31, 2004 and 2003, is compatible with maintaining its independence. The Audit
Committee also considered services performed by GFR to determine that it is
compatible with maintaining independence.
Engagement
of the Independent Auditor
The
Audit
Committee is responsible for approving all engagements with BDO and GFR to
perform audit or non-audit services for us prior to us engaging BDO and GFR
to
provide those services. All of the services under the headings Audit Related
Fees, Tax Services, and All Other Fees were approved by the Audit Committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X of the
Exchange Act. The Audit Committee's pre-approval policy provides as
follows:
|
·
|
The
Audit Committee will review and pre-approve on an annual basis any
known
audit, audit-related, tax and all other services, along with acceptable
cost levels, to be performed by BDO and GFR. The Audit Committee
may
revise the pre-approved services during the period based on subsequent
determinations. Pre-approved services typically include: statutory
audits,
quarterly reviews, regulatory filing requirements, consultation on
new
accounting and disclosure standards, employee benefit plan audits,
reviews
and reporting on management's internal controls and specified tax
matters.
|
|
·
|
Any
proposed service that is not pre-approved on the annual basis requires
a
specific pre-approval by the Audit Committee, including cost level
approval.
|
|
·
|
The
Audit Committee may delegate pre-approval authority to one or more
of the
Audit Committee members. The delegated member must report to the
Audit
Committee, at the next Audit Committee meeting, any pre-approval
decisions
made.
|
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” RATIFICATION OF
THE REAPPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY’S INDEPENDENT PUBLIC
ACCOUNTANTS.
STOCKHOLDER
PROPOSALS FOR THE 2006 ANNUAL MEETING OF STOCKHOLDERS
Any
stockholder who wishes to present a proposal for consideration at the annual
meeting of stockholders to be held in 2006 must submit such proposal in
accordance with the rules promulgated by the Securities and Exchange Commission.
In order for a proposal to be included in the Company’s proxy materials relating
to the 2006 Annual Meeting of Stockholders, the stockholder must submit such
proposal in writing to the Company so that it is received no later than February
21, 2006. Any stockholder proposal submitted with respect to the Company’s 2006
Annual Meeting of Stockholders which proposal is received by the Company after
February 21, 2006, will be considered untimely for purposes of Rule 14a-4 and
14a-5 under the Exchange Act and the Company may vote against such proposal
using its discretionary voting authority as authorized by proxy. Such proposals
should be addressed to the Secretary of the Corporation, Perma-Fix Environmental
Services, Inc., 1940 N.W. 67th Place, Gainesville, Florida 32653.
OTHER
MATTERS
Other
Business
The
Board
of Directors has no knowledge of any business to be presented for consider-ation
at the Meeting other than as described above. Should any such matters properly
come before the Meeting or any adjournment thereof, the persons named in the
enclosed Proxy Card will have discretionary authority to vote such proxy in
accordance with their best judgment on such matters and with respect to matters
incident to the conduct of the Meeting.
Additional
copies of the Annual Report and the Notice of Annual Meeting of Stockholders,
Proxy Statement and accompanying Proxy Card may be obtained from the
Company.
In
order
to assure the presence of the necessary quorum at the Meeting, please sign
and
mail the enclosed Proxy Card promptly in the envelope provided. No postage
is
required if mailed within the United States. The signing of the Proxy Card
will
not prevent your attending the Meeting and voting in person, should you so
desire.
15
Annual
Report on Form 10-K
A
copy of the Company’s 2004 Annual Report accompanies this Proxy Statement. Upon
written request, the Company will send you, without charge, a copy of its Annual
Report on Form 10-K (without exhibits) for the fiscal year ended December 31,
2004, including the financial statements and schedules, which the Company has
filed with the Securities and Exchange Commission.
Copies
of the exhibits to the Form 10-K are available, but a reasonable fee per page
will be charged to the requesting stockholder. Each written request must set
forth a good faith representation that, as of the record date, the person making
the request was a beneficial owner of the Company’s Common Stock entitled to
vote at the Meeting. Stockholders should direct the written request to the
Company’s Chief Financial Officer at 1940 N.W. 67th Place, Gainesville, Florida
32653.
|
Order
of the Board of Directors
|
|
Richard
T. Kelecy
|
|
Secretary
|
|
Gainesville,
FL
|
|
June
20, 2005
|
16
VFOLD AND DETACH HERE AND READ THE REVERSE SIDE V
PROXY
Perma-Fix Environmental Services, Inc.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
For Annual Meeting of Stockholders to be held July 27, 2005
The undersigned hereby appoints Dr. Louis F. Centofanti and Richard T. Kelecy, and each of them severally, the undersigned’s proxies, with full power of substitution, to attend the Annual Meeting of the Stockholders of Perma-Fix Environmental Services, Inc. (the “Company”) at the offices of Perma-Fix Environmental Services, Inc., 1940 N.W. 67th Place, Gainesville, FL 32653, at 1:00 p.m. (EDST), on July 27, 2005, and at any adjournment of that meeting, and to vote the undersigned’s shares of Common Stock, as designated on the reverse side.
(Continued, and to be marked, dated and signed, on the other side)
VFOLD AND DETACH HERE AND READ THE REVERSE SIDE V
|
PROXY
|
Please
mark your votes like this
|
[X]
|
|
|
THIS
PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS
MADE IN ITEMS 1
AND 2. IF THE UNDERSIGNED MAKES NO SPECIFICATIONS, THIS
PROXY WILL BE
VOTED “FOR” ITEMS 1 AND 2 AND IN THE DISCRETION OF THE PROXIES ON
SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
|
|||
|
FOR
|
WITHHOLD
AUTHORITY
|
FOR
|
AGAINST
|
ABSTAIN
|
|||||
|
1.
|
ELECTION
OF DIRECTORS
(To
withhold authority to vote for an individual nominee,
strike through the
nominees name below)
|
[
]
|
[
]
|
2.
|
RATIFICATION
OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE INDEPENDENT
AUDITORS OF THE
COMPANY FOR FISCAL YEAR 2005
|
[
]
|
[
]
|
[
]
|
| Dr.
Louis F.
Centofanti Joe
R. Reeder
Dr.
Charles E. Young
|
Jon
Colin
Alfred
C. Warrington, IV
Mark
A. Zwecker
|
Jack
Lahav
|
3.
|
In
their discretion, the Proxies are authorized to
vote upon such other
business as may properly come before the meeting
|
|||||
|
COMPANY
ID:
|
|||||||||
|
PROXY
NUMBER:
|
|||||||||
|
ACCOUNT
NUMBER:
|
|||||||||
Signature
_______________________________________________ Signature
_________________________________________
Date_____________
Please
sign exactly
as your name appears below, date and return this Proxy Card promptly, using
the
self-addressed, prepaid envelope enclosed for your convenience. Please correct
your address before returning this Proxy Card. Persons signing in fiduciary
capacity should indicate that fact and give their full title. If a corporation,
please sign in full corporate name by the president or other authorized officer.
If a partnership, please sign in the partnership name by an authorized person.
If joint tenants, both should sign.