-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T7ktBSmcROKBis4uCzDjStLHb6oaO9eXZ+slbcEooFshmqV/XPgSzA6e6kUrjPqu 3ZrLGBfwvdn63KgDHHfaNQ== 0000950144-99-006918.txt : 19990625 0000950144-99-006918.hdr.sgml : 19990625 ACCESSION NUMBER: 0000950144-99-006918 CONFORMED SUBMISSION TYPE: 10KSB40/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990131 FILED AS OF DATE: 19990601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: U S ENERGY SYSTEMS INC CENTRAL INDEX KEY: 0000351917 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC, GAS & SANITARY SERVICES [4900] IRS NUMBER: 521216347 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10KSB40/A SEC ACT: SEC FILE NUMBER: 000-10238 FILM NUMBER: 99638473 BUSINESS ADDRESS: STREET 1: 515 N FLAGLER DR STREET 2: STE 702 CITY: WEST PALM BEACH STATE: FL ZIP: 33401 BUSINESS PHONE: 5618209779 MAIL ADDRESS: STREET 1: 515 NORTH FLAGLER DRIVE STREET 2: SUITE 702 CITY: WEST PALM BEACH STATE: FL ZIP: 33401 FORMER COMPANY: FORMER CONFORMED NAME: U S ENVIROSYSTEMS INC /DE/ DATE OF NAME CHANGE: 19960607 10KSB40/A 1 U.S. ENERGY SYSTEMS INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM 10-KSB/A (MARK ONE) [X] AMENDMENT NO. 1 TO ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______ COMMISSION FILE NUMBER 0-10238 U.S. ENERGY SYSTEMS, INC. - -------------------------------------------------------------------------------- (NAME OF REGISTRANT IN ITS CHARTER) Delaware 52-1216347 (State of Incorporation) (I.R.S. Employer Identification Number) 515 N. Flagler Drive Suite 702 West Palm Beach, FL 33401 (561)820-9779 (Address of registrant's principal executive offices) (Issuer's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None. Securities Registered pursuant to Section 12(g) of the Act:
NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED -------------------------------------- ------------------------- Common Stock, par value $.01 per share Nasdaq SmallCap Market Warrants Nasdaq SmallCap Market
Check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for a shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB [X]. Revenue for the Fiscal Year ended January 31, 1999: $4,195,000. The aggregate market value of the Common Stock held by nonaffiliates computed by reference to the average bid and asked price of the Common Stock of the registrant as of May 28, 1999 was approximately $15,750,000. Check whether issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act. [X] As of May 28, 1999 the number of outstanding shares of the registrant's Common Stock was 5,153,005. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] 2 PART III ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY The directors and executive officers of the Company are as follows:
NAME AGE POSITION ---- --- -------- Theodore Rosen 74 Chairman of the Board of Directors Richard H. Nelson 59 President, Chief Executive Officer and Director Howard A. Nevins 43 Executive Vice President and Director Henry Schneider 34 Vice President and Director Seymour J. Beder 72 Secretary, Treasurer and Chief Financial Officer Terrence Page 52 Vice President Evan Evans 73 Director Asher E. Fogel 50 Director Allen J. Rothman 42 Director Lawrence I. Schneider 63 Director and Chairman of Executive Committee
THEODORE ROSEN. Mr. Rosen has been a Director of the Company and Chairman of the Board of Directors since November 1993. Since June 1993, Mr. Rosen has been Managing Director of Burnham Securities. He was Senior Vice President of Oppenheimer & Co. from January 1991 to June 1993, and was Vice President of Smith Barney & Co. from 1989 to 1991. Mr. Rosen also currently serves as a director of Waterhouse Investors Cash Management Co., an investment management company engaged in management of money market mutual funds. Mr. Rosen holds a BA degree from St. Lawrence University and did graduate work at both Albany Law School and Columbia University School of Business. RICHARD H. NELSON. Mr. Nelson has been President, Chief Executive Officer and Director of the Company since November 1993. Mr. Nelson has been engaged in the power plant industry for more than twenty years and has been involved with over 200 power projects throughout the world, 125 of which have been cogeneration projects. In 1973, Mr. Nelson formed Sartex Corp., which was merged into the Company, then called Cogenic Energy Systems, Inc. ("Cogenic"), in 1981. Mr. Nelson served as president of Cogenic until 1989. From January 1989 until January 1991, Mr. Nelson was president of Utility Systems Corp., a subsidiary of Cogenic. In January 1991, Mr. Nelson formed Utility Systems Florida, Inc. ("USF") where he served as president until November 1993, when USF and Cogenic merged, with Cogenic being the surviving corporation and changing its name to U.S. Envirosystems, Inc. U.S. Envirosystems changed its name to U.S. Energy Systems, Inc. in November 1996. Mr. Nelson was Special Assistant to the Director of the Peace Corps from 1961 to 1962; thereafter he served as Military Aide to the Vice President of the United States from 1962 to 1963 and Assistant to the President of the United States from 1963 to 1967. From 1967 to 1969, Mr. Nelson was Vice President of American International Bank, and from 1969 to 1973 he was Vice President of Studebaker-Worthington Corp. Mr. Nelson received his BA degree from Princeton University. HOWARD A. NEVINS. Mr. Nevins has been Executive Vice President of the Company's Environmental Division and Director of the Company since August 1997. Mr. Nevins has wide ranging experience in the fields of mineral exploration, chemical operations and environmental compliance. In 1985, he founded Trey Explorations, Inc., a land exploration and development drilling company which presently operates 80 oil and gas wells in the Illinois Basin. In 1990, he co-founded Midwest Custom Chemicals, Inc., a manufacturer and international distributor of specialty chemicals used for oil and water demulsification, specializing in used oil recycling. In 1994, he co-founded both Quality Environmental Laboratories, Inc. and America Enviro-Services, Inc., the latter company which was acquired by the Company in August 1997. Mr. Nevins remains on the boards of Midwest Custom Chemicals and Quality Environmental Laboratories. Mr. Nevins is a Certified Professional Geologist, past President 2 3 of the Indiana-Kentucky Geological Society, past Chairman of the Society of Petroleum Engineers (Illinois Basin) and is currently on the boards of both the Illinois Oil & Gas Association and the Independent Oil Producers. He is also on the Advisory Council of the Indiana Department of Natural Resources. Mr. Nevins received his BS degree in Geology from Western Michigan University in 1978. HENRY SCHNEIDER. Mr. Schneider, a member of Energy Systems Investors, LLC, was appointed Vice President for Development in March 1998 and was appointed a Director of the Company in December 1998. From 1986 to 1988, Mr. Schneider was an associate at Drexel Burnham Lambert specializing in taxable institutional fixed income products and portfolio strategies. From 1989 to 1994, Mr. Schneider was an associate with S & S Investments and Wood Gundy, specializing in mergers, acquisitions and corporate restructuring. From 1994 to 1996, Mr. Schneider was a principal of Global Capital Resources, Inc., a private merchant bank. Since 1996, Mr. Schneider has been a private investor. He has been involved in arranging acquisitions and funding for the telecommunications, energy, apparel, airline, financial and garage industries. Mr. Schneider holds an Economics degree from Tufts University and a Master of Business Administration from Boston University. Mr. Schneider is the son of Lawrence I. Schneider. SEYMOUR J. BEDER. Mr. Beder has been Secretary, Treasurer and Chief Financial Officer of the Company since November 1993. From 1970 through 1980 he was Chief Financial Officer for Lynnwear Corporation, a textile company, and from 1980 to September 1993, Mr. Beder was president of Executive Timeshare, Inc., a provider of executive consulting talent. Mr. Beder is a Certified Public Accountant, and a member of the New York State Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Mr. Beder received his BA degree from City College of New York. TERRENCE PAGE. Mr. Page has been Vice President C Western Resources of the Company since March 1997. Previously, Mr. Page served with the Nevada Public Service Commission since 1982. From 1982 to 1989 he was Regulatory Operations Supervisor and from 1989 until he resigned to join the Company, he served as Director of Regulatory Operations. In this position, he had final responsibility for developing all staff positions brought before the Commission and coordinated with federal, state and local governments on matters of regulatory policy. He has served on the Nevada Department of Information Services Advisory Committee, the Ohio State University's National Regulatory Research Institute Advisory Committee, the Las Vegas Regional Transportation Advisory Committee and the Washoe Regional Water Planning Commission. Mr. Page holds his BS in Business from the University of the State of New York and his MS in Management from the American University. EVAN EVANS. Mr. Evans has been a Director of the Company since August 1995. Since 1983 he has been chairman of Holvan Properties, Inc. ("Holvan"), a real estate developer, and was managing director of Easco Marine, Ltd. from 1983 to 1988. Also, from 1985 to 1986 Mr. Evans was general manager of Belgian Refining Corporation ("BRC"), pursuant to a contract between BRC and Holvan, and from 1992 to 1996, Mr. Evans was a director of BRC. From 1981 to 1983 he was vice president of Getty Trading and Transportation Company and president of its subsidiary, Getty Trading International, Inc. From 1970 to 1981 Mr. Evans was vice president and member of the board of directors of United Refining Corp ("URC"). Mr. Evans also currently serves as a director of Holvan, and since 1997 has been a director of URC. Mr. Evans received his BS degree in Mathematics from St. Lawrence University and his BS in Civil Engineering from M.I.T. ASHER E. FOGEL. Mr. Fogel was appointed to the Board of Directors of the Company in October 1998. From 1985 to 1997 Mr. Fogel held senior positions at Citicorp in London and New York specializing in corporate finance, capital markets and investment advice and was a Managing Director of Citicorp Securities, Inc. For twelve years prior to joining Citicorp Mr. Fogel held a number of positions in Bank or America and Samuel Montagu & Co. In June 1997, Mr. Fogel founded Dovertower Capital, a merchant banking boutique providing corporate finance services in the United States and international markets. Mr. Fogel holds a BA in Economics and an MBA from Hebrew University. ALLEN J. ROTHMAN. Mr. Rothman has been a member of the Board of Directors of the Company since January 1997. Mr. Rothman is a partner with the law firm of Robinson, Brog, Leinwand, Greene, Genovese & Gluck P.C. in New York with whom he has been associated since January 1996. Mr. Rothman specializes in 3 4 corporate, finance and real estate law. Prior to joining Robinson Brog, he was associated with several New York law firms. Mr. Rothman received his BA degree from Columbia University and his JD degree from Harvard University. LAWRENCE I. SCHNEIDER. Mr. Schneider, manager of Energy Systems Investors, LLC, has been a member of Board of Directors since March 1998 and serves as Chairman of its Executive Committee. Mr. Schneider has been associated with numerous corporations through the years, including Newpark Resources, Inc., a company involved with oil field environmental remediation, where he was Chairman of the Executive Committee. Mr. Schneider was also a partner in the New York Stock Exchange firm Sassower, Jacobs and Schneider. He holds his BS degree from New York University. Mr. Schneider is the father of Henry Schneider. ELECTION OF EXECUTIVE OFFICERS The Company's officers are elected annually by the Board of Directors and serve at the discretion of the Board of Directors. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") requires certain officers, directors, and beneficial owners of more than ten percent (10%) of the Company's Common Stock to file reports of ownership and changes in their ownership of the equity securities of the Company with the Securities and Exchange Commission and Nasdaq. Based solely on a review of the reports and representations furnished the Company during the last fiscal year, the Company believes that each of these persons is in compliance with all applicable filing requirements. INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS The Company's Board of Directors is comprised of three classes of directors, each being elected every three years at the Company's Annual Meeting of Stockholders. Class I directors currently serve until the Company's 2001 Annual Meeting of Stockholders, Class II directors currently serve until the Company's 1999 Annual Meeting of Stockholders, and Class III directors currently serve until the Company's 2000 Annual Meeting of Stockholders. Messrs. Howard Nevins and Lawrence I. Schneider serve on Class I of the Company's Board of Directors, Messrs. Allen J. Rothman and Evan Evans serve on Class II of the Company's Board of Directors, and Messrs. Theodore Rosen and Richard H. Nelson serve on Class III of the Company's Board of Directors. Messrs. Henry Schneider and Asher Fogel, who were appointed to the Company's Board of Directors in 1998, serve on Class I and II, respectively, of the Company's Board of Directors and will both stand for election at the 1999 Annual Meeting of Stockholders. During the year ended January 31, 1999, the Board of Directors of the Company held a total of ten meetings and took approximately ten actions by unanimous written consent. During 1998, no director attended fewer than 75% of the aggregate of (i) the number of meetings of the Board of Directors held during the period he served on the Board, and (ii) the number of meetings of committees of the Board of Directors held during the period he served on such committees. The Board has two standing committees, an Audit Committee and an Executive Committee. The Board does not have a Nominating Committee nor a Compensation Committee. The duties of the Audit Committee include recommending the engagement of independent auditors, reviewing and considering actions of management in matters relating to audit functions, reviewing with independent auditors the scope and results of its audit engagement, reviewing reports from various regulatory authorities, reviewing the system of internal controls and procedures of the Company and reviewing the effectiveness of procedures intended to prevent violations of law and 4 5 regulations. The Company's Audit Committee is comprised of Messrs. Henry Schneider, Evans and Fogel. The Audit Committee met twice in 1998. The Executive Committee oversees all activities of the Company between meetings of the Board of Directors and may exercise the power and authority of the full Board of Directors to the extent permitted by Delaware law and the Company's bylaws. The duties of the Executive Committee also include recommending to the Board remuneration to be paid to executive officers of the Company, administering and monitoring compensation and recommending the establishment of incentive and bonus programs for executives of the Company, including determining the number of options to be awarded pursuant to the Company's stock option plans. Executive Committee members receive no additional compensation for their participation. The Executive Committee is comprised of Messrs. Lawrence Schneider (Chairman), Rothman, Nelson and Rosen. The Executive Committee met 12 times in 1998. ITEM 10 EXECUTIVE COMPENSATION The following table shows the total compensation paid by the Company during the fiscal years ended January 31, 1999, 1998 and 1997 to Mr. Nelson, the Company's President and Chief Executive Officer, and during the fiscal year ended January 31, 1999 and 1998 to Mr. Nevins, the Company's Executive Vice President. There were no other executives of the Company who received total compensation in excess of $100,000 during any of such years. SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION ---------------------------------- --------------------------- NAME AND YEAR ENDED SECURITIES PRINCIPAL POSITION JANUARY 31 SALARY BONUS UNDERLYING OPTIONS/SARs (#) ------------------ ---------- ------ ----- --------------------------- RICHARD H. NELSON, 1999 $162,500 -- 40,000 President and Chief 1998 $150,000 -- 50,000 Executive Officer 1997 $150,000 -- 100,000 HOWARD NEVINS, Executive Vice President 1999 $100,000 -- 40,000 1998 $ 49,457(1) -- 100,000
- -------------- (1) Mr. Nevins' employment contract with the Company commenced as of August 23, 1997, and provides for an annual salary of $100,000. 5 6 The following table sets forth certain information with respect to all options to purchase shares of Common Stock of the Company granted to the named executive officers during the fiscal year ended January 31, 1999. OPTION/SAR GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS)
PERCENT OF TOTAL NUMBER OF SECURITIES OPTIONS/SARs UNDERLYING GRANTED TO EXERCISE OR OPTIONS/SARs GRANTED EMPLOYEES IN BASE PRICE NAME (#) FISCAL YEAR ($/SH) EXPIRATION DATE ---- -------------------- ----------------- ------------- --------------- Richard H. Nelson 40,000 7% $2.50 August 26, 2008 Howard Nevins 40,000 7% $2.50 August 26, 2008
TERMS OF OPTIONS Stock options to Messrs. Nelson and Nevins were granted in 1998 under the Company's 1998 Executive Incentive Compensation Plan (the "1998 Plan"). All options granted in 1998 to Messrs. Nelson and Nevins, as well as to the other executive officers and directors of the Company, under the 1998 Plan are qualified, incentive stock options, expire 10 years from the date of grant, and were immediately exercisable upon the date of grant. REPRICING OF STOCK OPTIONS On December 8, 1998, the Board of Directors unanimously approved a plan to reprice a total of 639,000 stock options held by certain directors, executive officers and employees of the Company to $2.50 per share, a price equal to approximately 25% above the average high bid and ask price of the Company's Common Stock as reported on the Nasdaq SmallCap Market on December 7, 1998. The Board's decision to reprice these options was based on the Board's unanimous belief that such an action would help retain and provide incentives for the option holders whose compensation is largely dependent on their option grants. A majority of these options were granted by the Company in 1997 and 1996, and other options were granted in 1995. The following table shows stock option exercises during the fiscal year ended January 31, 1999 by the named executive officers. In addition, this table describes the number of unexercised options and the value of unexercised in-the-money options at January 31, 1999. AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND JANUARY 31, 1999 OPTION/SAR VALUE
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED UNEXERCISED OPTIONS/SARs AT IN-THE-MONEY OPTIONS/SARs JANUARY 31, 1999(#) AT JANUARY 31, 1999 ($) (1) SHARES ACQUIRED ---------------------------- ------------------------- NAME ON EXERCISE (#) VALUE REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE ---- --------------- ------------------ ---------------------------- ------------------------- Richard H. Nelson 0 0 190,000/0 $21,950/0 Howard A. Nevins 0 0 140,000/0 0/0
(1) Represents the difference between market price of the Company's Common Stock and the exercise price of the options at January 31, 1999. Such amounts may not necessarily be realized. Actual values which may be realized, if any, upon any exercise of such options will be based on the market price of the Common Stock at the time of any such exercise and thus are dependent upon future performance of the Common Stock. 6 7 COMPENSATION OF DIRECTORS Outside directors are compensated at an annual rate of $10,000 plus travel expenses, and must attend at least four meetings annually. Employee directors are not compensated for attendance at meetings of the Board, although certain travel expenses relating to attending meetings are reimbursed. No additional compensation is given to committee members or participants in special projects. EMPLOYMENT AGREEMENTS Mr. Nelson entered into an amended employment agreement with the Company on March 31, 1998 to serve as its President and Chief Executive Officer until March 31, 2001, which term automatically extends for additional one-year periods beginning on the second anniversary of the agreement and on each anniversary thereafter. Mr. Nelson's agreement provides for an annual salary of $165,000, commencing on April 15, 1998, plus normal benefits. If Mr. Nelson is terminated without cause during the term of the employment agreement, as defined in the agreement, or if Mr. Nelson resigns from the Company because his salary or benefits are decreased or he is demoted within three years after a change in control of the Company, as defined in the employment agreement, he is entitled to severance pay equal to approximately three times his base salary. Under the terms of Mr. Nelson's employment agreement, he may not disclose any confidential information pertaining to the Company nor compete with the Company during the term of his employment with the Company and for an additional two years. Mr. Rosen entered into an amended employment agreement with the Company on March 31, 1998, to serve as its Chairman of the Board of Directors until March 31, 2001, which term automatically extends for additional one-year periods beginning on the second anniversary of the agreement and on each anniversary thereafter. Mr. Rosen's agreement provides for an annual salary of $87,500, commencing on May 15, 1998, plus normal benefits. If Mr. Rosen is terminated without cause during the term of the employment, as defined in the agreement, or if Mr. Rosen resigns from the Company because his salary or benefits are decreased or he is demoted within three years after a change in control of the Company, as defined in the employment agreement, he is entitled to severance pay equal to approximately three times his base salary. Under the terms of Mr. Rosen's employment agreement, he may not disclose any confidential information pertaining to the Company nor compete with the Company during the term of his employment with the Company and for an additional two years thereafter. Mr. Nevins entered into an employment agreement with the Company on August 4,1997, to serve as the Executive Vice President for a term of three years ending August 4, 2000. Mr. Nevins' contract provides for an annual salary of $100,000 plus normal benefits, and an initial grant of options to purchase 100,000 shares of the Company's Common Stock. Provision is also made for incentive compensation in addition to the base salary and options. Under the terms of Mr. Nevins' employment agreement, Mr. Nevins agrees that he will not disclose any confidential information pertaining to the Company nor compete with the Company during the term of his employment with the Company and for an additional two years thereafter, but no earlier than August 4, 2002. Mr. Page's contract with the Company to serve as Vice President was amended effective March 1, 1998. His annual compensation is $47,400 for which he will devote a minimum of 20 hours per week. Under the terms of the agreement, Mr. Page agrees that he will not disclose any confidential information pertaining to the Company without the prior express written consent of the Company. 7 8 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following table sets forth the number of shares of Common Stock owned as of May 28, 1999 (i) by each director and nominee, (ii) by each executive officer of the Company, (iii) by those persons known to the Company to beneficially own 5% or more of the outstanding shares of Common Stock of the Company, and (iv) by all directors and officers of the Company as a group. With respect to any person who beneficially owns 5% or more of the outstanding shares of Common Stock, the address of such person is also set forth.
AMOUNT AND NATURE OF NAME AND ADDRESS BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS ---------------- ----------------------- ---------------- Theodore Rosen................................................. 295,214 (2) 4.60% Richard H. Nelson.............................................. 278,210 (3) 4.39% Howard A. Nevins............................................... 381,000 (4) 6.05% Seymour J. Beder............................................... 103,500 (5) 1.66% Evan Evans..................................................... 92,500 (6) 1.48% Allen J. Rothman............................................... 91,000 (7) 1.46% Lawrence I. Schneider.......................................... 1,040,000 (8) 16.79% Henry Schneider................................................ 1,040,000 (8) 16.79% Asher Fogel.................................................... 40,000 (9) * Energy Systems Investors, LLC.................................. 1,000,000 (8) 16.79% 450 Park Avenue Suite 1000 New York, New York 10022 Cambridge Investments Limited.................................. 360,000 (10) 6.98% 600 Montgomery Street 27th Floor San Francisco, CA 94111 All officers and directors as a group (9 persons).............. 2,361,424 33.05%
- ---------------- * Indicates less than 1% of number of shares of Common Stock outstanding. (1) The tabular information gives effect to the exercise of warrants or options exercisable within 60 days of the date of this table owned in each case by the person or group whose percentage ownership is set forth opposite the respective percentage and is based on the assumption that no other person or group exercises its option. The address of each of the officers and directors is 515 North Flagler Drive, Suite 702, West Palm Beach, Florida 33401. (2) Includes 50,000 shares issuable upon exercise of options at an exercise price of $2.031 per share, 11,357 shares issuable upon exercise of warrants at an exercise price of $4.00 per share, and 200,250 shares issuable upon exercise of presently exercisable options at an exercise price of $2.50 per share. 8 9 (3) Includes 50,000 shares issuable upon exercise of options at an exercise price of $2.031 per share, and 140,000 shares issuable upon exercise of presently exercisable options at an exercise price of $2.50 per share. (4) Includes 140,000 shares issuable upon exercise of presently exercisable options at an exercise price of $2.50 per share. (5) Includes 85,000 shares issuable upon exercise of presently exercisable options at an exercise price of $2.50 per share, and 15,000 shares issuable upon exercise of presently exercisable options at an exercise price of $2.031 per share. (6) Includes 81,250 shares issuable upon exercise of presently exercisable options at an exercise price of $2.50 per share, and 10,000 shares issuable upon exercise of presently exercisable options at an exercise price of $2.031 per share. (7) Includes 80,000 shares issuable upon exercise of presently exercisable options at an exercise price of $2.50 per share, and 10,000 shares issuable upon exercise of presently exercisable options at an exercise price of $2.031 per share. (8) Includes 40,000 shares issuable upon exercise of presently exercisable options at an exercise price of $2.50 per share and 250,000 shares of Series A Preferred Stock, currently convertible into 1,000,000 shares of Common Stock, which is owned by Energy Systems Investors, LLC. Lawrence I. Schneider and Henry Schneider are members and managers of Energy Systems Investors, LLC; Rita Schneider is a member of Energy Systems Investors, LLC. Henry Schneider is the son of Lawrence and Rita Schneider. (9) Includes 40,000 shares issuable upon exercise of presently exercisable options at an exercise price of $2.50 per share. (10) Based on a Schedule 13-D sent to the Company on December 26, 1996. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Lawrence I. Schneider is a manager and member of Energy Systems Investors, LLC, the entity which was granted an option to purchase up to 888,888 shares of the Company's Series A Preferred Stock, at the Company's 1998 Annual Meeting of Stockholders. Mr. Schneider is a member of the Board of Directors of the Company and chairman of its Executive Committee. Appointment to these positions was a condition of the Energy Systems Investors' initial purchase of 250,000 shares of the Company's Series A Preferred Stock (the "Initial Financing"). Henry Schneider, the Vice President of the Company, is also a manager and member of Energy Systems Investors. His appointment to the position as Vice President and Director of the Company was made following, but not as a condition to, the Initial Financing. Howard Nevins, Executive Vice President and Director of the Company, was the former President and Director of American Enviro-Services, Inc., an Indiana corporation which the Company acquired pursuant to a merger in August 1997 (the "AES Merger"). As part of the AES Merger, Mr. Nevins received 240,000 shares of the Common Stock of the Company and options to purchase 100,000 shares of the Company's Common Stock. Mr. Nevins was also appointed to the Company's Board of Directors in connection with the AES Merger. The law firm of Robinson, Brog, Leinwand, Green, Genovese & Gluck P.C., of which Allen J. Rothman, a director of the Company, is a partner, provides certain legal services to the Company. All transactions between the Company and its officers, directors, principal stockholders or other affiliates have been on terms no less favorable than those that are generally available from unaffiliated third parties. Any such future transactions will be on terms no less favorable to the Company than could be obtained from an unaffiliated third party on an arm's-length basis and will be approved by a majority of the Company's independent and disinterested directors. 9 10 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act, the Issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. U.S. ENERGY SYSTEMS, INC. May 28, 1999 By: /s/ Seymour J. Beder --------------------------------------- Seymour J. Beder CHIEF FINANCIAL AND ACCOUNTING OFFICER
SIGNATURE TITLE DATE --------- ----- ---- /s/ Theodore Rosen Chairman of the Board of Directors May 28, 1999 ------------------------------------- Theodore Rosen /s/ Richard H. Nelson President and Chief Executive May 28, 1999 ------------------------------------- Officer (Principal Executive Richard H. Nelson Officer) /s/ Seymour J. Beder Chief Financial and Accounting May 28, 1999 ------------------------------------- Officer (Principal Financial and Seymour J. Beder Accounting Officer) /s/ Henry Schneider Vice President and Director May 28, 1999 ------------------------------------- Henry Schneider /s/ Howard Nevins Director and Executive Vice May 28, 1999 ------------------------------------- President Howard Nevins /s/ Lawrence I. Schneider Director and Chairman of Executive May 28, 1999 ------------------------------------- Committee Lawrence I. Schneider /s/ Evan Evans -------------------------------------- Director May 28, 1999 Evan Evans /s/ Allen Rothman -------------------------------------- Director May 28, 1999 Allen Rothman /s/ Asher E. Fogel -------------------------------------- Director May 28, 1999 Asher E. Fogel
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