DEFINITIVE PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
x
Filed by a Party other than the Registrant []
¨
Check the appropriate box:
[X] Preliminary Proxy Statement
[] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[] Definitive Proxy Statement
[] Definitive Additional Materials
[] Soliciting Material under Rule 14a-12
| Preliminary Proxy Statement |
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| Definitive Proxy Statement |
| ¨ | Definitive Additional Materials |
| ¨ | Soliciting Material under Rule 14a-12 |
GENERAL ENVIRONMENTAL MANAGEMENT, INC.
(Name
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
- --------------------------------------------------------------------------------
[] Fee paid previously with preliminary materials.
[] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
| x | No fee required. |
| ¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| | | |
| 1. | Title of each class of securities to which transaction applies: | |
| | | |
| 2. | Aggregate number of securities to which transaction applies: | |
| | | |
| 3. | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |
| | | |
| 4. | Proposed maximum aggregate value of transaction: | |
| | | |
| 5. | Total fee paid: | |
| Fee paid previously with preliminary materials. |
| ¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| | | |
| 1. | Amount Previously Paid: | |
| | | |
| 2. | Form, Schedule or Registration Statement No.: | |
| | | |
| 3. | Filing Party: | |
| | | |
| 4. | Date Filed: | |
GENERAL ENVIRONMENTAL MANAGEMENT, INC
3191 Temple Avenue, Suite #250
Ste 250,
Pomona, CA 91768
NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS
To Be Held On June 15, 2006 January 29, 2007
Dear Stockholders:
You are cordially invited to attend the Annuala Special Meeting of Stockholders of General Environmental Management, Inc. (GEM)., a Nevada corporation.corporation (the “Company”). The meeting will be held on Thursday, June 15, 2006January 29, 2007 at 10:00 a.m., local time, at the office 3191 Temple Avenue, Suite #250,Ste 250, Pomona, CA 91768, for the following purposes:
1. To elect three directorsgrant the Board of Directors the authority to serve foramend the ensuing year and until their
successors are elected (Proposal One);
Certificate of Incorporation to increase the number of authorized common shares $.001 par value, from 200,000,000 to one billion.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO GRANT THE BOARD OF DIRECTORS THE AUTHORITY TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES, $.001 PAR VALUE, FROM 200,000,000 TO ONE BILLION.
2. To ratifygrant the appointmentBoard of Weinberg & Company, P.A. as GEM's
independent certified public accountantsDirectors the authority to amend the Certificate of Incorporation to combine shares of the Company’s common stock to effect a one for 30 reverse stock split of the fiscal year ending
December 31, 2006; and
common stock:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO GRANT THE BOARD OF DIRECTORS THE AUTHORITY TO AMEND THE CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE SPLIT OF THE OUTSTANDING COMMON STOCK OF THE COMPANY, PAR VALUE $.001 PER SHARE, BY A RATIO OF 1-FOR-30.
3. To conduct anygrant the Board of Directors the authority to amend the Certificate of Incorporation to increase the number of authorized preferred shares, $.001 par value, from 50,000,000 to 100,000,000.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO GRANT THE BOARD OF DIRECTORS THE AUTHORITY TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SERIES B CONVERTIBLE PREFERRED STOCK $.001 PAR VALUE, FROM 50,000,000 TO 100,000,000.
No other business properly brought before the Annual
Meeting or any adjournment or postponement thereof.
may be transacted.
These items of business are more fully described in the Proxy Statement accompanying this Notice. The record date for the AnnualSpecial Meeting is April 17,December 27, 2006. On April 17,November 30, 2006 there were 28,250,635128,382,181 shares of common stock outstanding and entitled to vote. Each such share is entitled to one vote. In addition, there were 2,479,000 shares of Series “B” Convertible Preferred Stock (“Series B Preferred Stock”) outstanding. Each share of Series B Preferred Stock is entitled to 20 votes. Only stockholders of record at the close of business on April 17,December 27, 2006 may vote at the AnnualSpecial Meeting or any adjournment or postponement thereof. This Notice of AnnualSpecial Meeting of Stockholders and Proxy Statement and form of proxy are being distributed on or about May 5, 2006;January 10, 2007 by Order of the Board of Directors.
Timothy J. Koziol
Chairman
President and Chief Executive Officer
Pomona, California
April 17, 2006
January 10, 2007
You are cordially invited to attend the AnnualSpecial Meeting in person. Whether or not you expect to attend the AnnualSpecial Meeting, please complete, date, sign and return the enclosed proxy card, as promptly as possible in order to ensure your representation at the AnnualSpecial Meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy card, you may still vote in person if you attend the AnnualSpecial Meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the AnnualSpecial Meeting, you must obtain a legal proxy issued in your name from that record holder.
2
GENERAL ENVIRONMENTAL MANAGEMENT, INC.
3191 Temple Avenue, Suite #250
Ste 250,
Pomona, CA 91768
PROXY STATEMENT
FOR THE 2006 ANNUAL2007 SPECIAL MEETING OF STOCKHOLDERS
To Be Held On June 15, 2006
January 29, 2007
QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why am I receiving these materials?
We sent you this proxy statement and the enclosed proxy card because the board of directors of General Environmental Management, Inc. (referred to as the "Company"“Company” or "GEM"“GEM”) is soliciting your proxy to vote at the Company's 2006
AnnualCompany’s 2007 Special Meeting. You are invited to attend the AnnualSpecial Meeting and we request that you vote on the proposals described in this proxy statement. However, you do not need to attend the AnnualSpecial Meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card. The Company intends to mail this proxy statement and accompanying proxy card on or about May 5, 2006January 10, 2007 to all stockholders of record entitled to vote at the AnnualSpecial Meeting.
Who can vote at the AnnualSpecial Meeting?
Only stockholders of record at the close of business on the record date, April
17,December 27, 2006, will be entitled to vote at the AnnualSpecial Meeting. As of the record date, there were 28,250,635128,382,181 shares of GEM'sGEM’s common stock and 2,479,000 shares of GEM’s preferred stock outstanding and entitled to vote. For information regarding security ownership by management and by the beneficial owners of more than 5% of GEM'sGEM’s common stock, see the section entitled "Security“Security Ownership of Certain Beneficial Owners and Management"Management” below.
Stockholders of Record: Shares Registered in Your Name
If on April 17,December 27, 2006 your shares were registered directly in your name with GEM'sGEM’s transfer agent, Colonial Stock Transfer Co., then you are a stockholder of record. As a stockholder of record, you may vote in person at the AnnualSpecial Meeting or vote by proxy. Whether or not you plan to attend the AnnualSpecial Meeting, we urge you to fill out and return the enclosed proxy card as instructed below to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If on April 17,December 27, 2006 your shares were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in "street name"“street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the AnnualSpecial Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the AnnualSpecial Meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the AnnualSpecial Meeting unless you request and obtain a legal proxy from your broker or other agent. If you fail to instruct your organization how you would like to have your shares voted, the organization has
the authority to vote in its discretion as to Proposals One and Two.
they will not be voted.
May I attend the AnnualSpecial Meeting?
All stockholders of record as of the close of business on
April 17,December 27, 2006 may attend the
AnnualSpecial Meeting. You must have a proxy card or other evidence of your ownership of shares eligible to be voted as of the record date (such as a copy of your brokerage or bank account statement) to attend the
AnnualSpecial Meeting. Also, stockholders will be asked to present valid government-issued photo identification, such as a
driver'sdriver’s license or passport, before being admitted to the meeting. Cameras, recording devices and other electronic devices will not be permitted at the
AnnualSpecial Meeting. No items will be allowed into the
AnnualSpecial Meeting that might pose a concern for the safety of those attending.
3
If you are a registered stockholder, you will receive a proxy card in the mail. Please bring the proxy card, or other evidence of your ownership of shares eligible to be voted as of the record date, to the AnnualSpecial Meeting.
If a broker, bank, trustee, nominee or other third party holds your shares, please inform that party that you plan to attend the AnnualSpecial Meeting and ask for a legal proxy. Bring the legal proxy to the stockholder registration area when you arrive at the AnnualSpecial Meeting and we will admit you to the AnnualSpecial Meeting. If you cannot obtain a legal proxy in time, we will admit you to the AnnualSpecial Meeting if you bring a copy of your brokerage or bank account statement showing that you owned GEM stock as of April 17,December 27, 2006.
On what proposals am I voting?
The following twothree matters are scheduled for a vote:
1. The election of three directors to serve for the ensuing year and
until their successors are elected (Proposal One); and
2. To ratify the appointment of Weinberg & Company, P.A. as GEM's
independent certified public accountants for the fiscal year ending
December 31, 2006 (Proposal 2.)
| o | To grant the Board of Directors the authority to amend the Certificate of Incorporation to increase the number of authorized common shares $.001 par value, from 200,000,000 to one billion. |
| o | To grant the Board of Directors the discretion and authority to amend the Certificate of Incorporation to effect a reverse split of the outstanding common stock of the Company, par value $.001 per share, by a ratio of 1-for-30. |
| o | To grant the Board of Directors the authority to amend the Certificate of Incorporation to increase the number of authorized preferred shares $.001 par value, from 50,000,000 to 100,000,000. |
How do I vote?
You may either vote "For" all of the nominees to the board of directors“For” or you
may“Against” or abstain from voting for any nominee you specify on the proxy card. For each of the other matters to be voted on, you may vote "For" or "Against" or abstain
from voting.on. The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at the AnnualSpecial Meeting,
or vote by proxy using the enclosed proxy card. Whether or not you plan to attend the AnnualSpecial Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the AnnualSpecial Meeting and vote in person if you have already voted by proxy.
o To vote in person: come to the Annual Meeting and we will give you a
ballot when you arrive.
o To vote using the proxy card: simply complete, sign and date the
enclosed proxy card and return it promptly in the envelope provided.
If you return your signed proxy card to us before the Annual Meeting,
the designated proxy holders will vote your shares as you direct,
except with respect to all other matters that may properly come
before the meeting or any postponement, continuation or adjournment
thereof, the designated proxy holders have discretionary authority to
vote your shares.
| · | To vote in person: come to the Special Meeting and we will give you a ballot when you arrive. |
| · | To vote using the proxy card: simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Special Meeting, the designated proxy holders will vote your shares as you direct, except with respect to all other matters that may properly come before the meeting or any postponement, continuation or adjournment thereof, the designated proxy holders have discretionary authority to vote your shares. |
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from GEM. Simply complete and mail the proxy card to ensure that your vote is counted. To vote in person at the
AnnualSpecial Meeting, you must obtain a valid legal proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a legal proxy form.
4
How many votes do I have?
On each matter to be voted upon, youholders of common stock have one vote for each share of common stock you own as of April 17,December 27, 2006 and holders of Series B Preferred Stock have 20 votes for each share of Series B Preferred Stock you own as of December 27, 2006.
What if I return a proxy card but do not make specific choices?
If you return a signed and dated proxy card without marking any voting selections, your shares will be voted:
o "For" the election of all three nominees for director to serve for the
ensuing year and until their successors are elected;
o "For" the ratification of the appointment of Weinberg & Company, P.A.
as GEM's independent certified public accountants for the fiscal year
ending December 31, 2006.
voted
| o | “For” granting the Board of Directors the authority to amend the Certificate of Incorporation to increase the number of authorized common shares $.001 par value, from 200,000,000 to one billion. |
| o | “For” granting the Board of Directors the discretion and authority to amend the Certificate of Incorporation to effect a reverse split of the outstanding common stock of the Company, par value $.001 per share, by a ratio of 1-for-30. |
| o | “For” granting the Board of Directors the authority to amend the Certificate of Incorporation to increase the number of authorized preferred shares $.001 par value, from 50,000,000 to 100,000,000. |
As set forth on the proxy card, if any other matter is properly presented at the meeting, your proxy (one of the individuals named on your proxy card) will vote your shares at his or her discretion.
Who is paying for this proxy solicitation?
GEM will bear the entire cost of solicitation of proxies, including preparation, assembly, printing and mailing of this proxy statement. In addition to these mailed proxy materials, our directors and employees may also solicit proxies in person, by telephone, by electronic mail or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. We may engage the services of a professional proxy solicitation firm to aid in the solicitation of proxies from certain brokers, bank nominees and other institutional owners. Our costs for such services, if retained, will not be material.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Yes. You may revoke your proxy at any time before the closing of the polls at the
AnnualSpecial Meeting. You may revoke your proxy in any one of three ways:
o You may complete, sign, date and mail another proxy card bearing a
later date and deliver such proxy card to us prior to the Annual
Meeting;
o You may send a written notice that you are revoking your proxy to our
Secretary: Clyde Rhodes at 3191 Temple Avenue, Suite #250, Pomona, CA
91768 and deliver such notice to us prior to the Annual Meeting.
o You may attend the Annual Meeting and vote in person. Simply attending
the Annual Meeting will not, by itself, revoke your proxy.
When are stockholder proposals due for next year's Annual Meeting?
Requirements for Stockholder Proposals to be Considered for Inclusion in the
Company's Proxy Materials.
Stockholders may present proper proposals for inclusion in the Company's proxy
statement and for consideration at the Annual Meeting to be held in 2007 by
submitting their proposals in writing to the Secretary of the Company in a
timely manner as provided herein. In order to be included in the Company's
5
proxy materials for the 2007 Annual Meeting, stockholder proposals must be
received by the Secretary of the Company no later than the Notice Deadline (as
defined below), and must otherwise comply with the requirements of Rule 14a-8 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Requirements for Stockholder Proposals to be Brought Before an Annual Meeting.
Section 3.6 of our Bylaws establishes an advance notice procedure for
stockholders who wish to present certain matters before an Annual Meeting of
stockholders. The Bylaws provide that, to be properly brought before an Annual
Meeting, nominations for the election of director or other business must be: (1)
specified in the notice of meeting given by or at the direction of the board of
directors, (2) properly brought before the meeting by or at the direction of the
board of directors, or (3) properly brought before the meeting by a stockholder
who has delivered written notice to the Secretary of the Company no later than
the Notice Deadline, which notice must contain specified information concerning
the matters to be brought before such meeting and concerning the stockholder
proposing such matters.
The "Notice Deadline" is defined as that date which is 120 days prior to the
one-year anniversary of the date on which the Company first mailed its proxy
materials for the previous year's Annual Meeting of stockholders. As a result,
the Notice Deadline for the 2007 annual stockholder meeting is January 5, 2007.
If a stockholder who has notified the Company of his or her intention to present
a proposal at an Annual Meeting does not appear to present his or her proposal
at such meeting, the Company need not present the proposal for vote at such
meeting.
A copy of the full text of Section 3.6 of our Bylaws may be obtained without
charge by stockholders by writing to the Secretary of the Company at the address
below. All notices of proposals by stockholders, whether or not included in the
Company's proxy materials, should be sent to our Secretary: Clyde Rhodes at 3191
Temple Avenue, Suite #250, Pomona, CA 91768.
Stockholders may also submit a recommendation (as opposed to a formal
nomination) for a candidate for membership on our board of directors by
following the procedures set forth in the section entitled "Director Candidates"
in Proposal 1 below.
| · | You may complete, sign, date and mail another proxy card bearing a later date and deliver such proxy card to us prior to the Special Meeting; |
| · | You may send a written notice that you are revoking your proxy to our Secretary at 3191 Temple Avenue, Ste 250, Pomona, CA 91768 and deliver such notice to us prior to the Special Meeting. |
| · | You may attend the Special Meeting and vote in person. Simply attending the Special Meeting will not, by itself, revoke your proxy. |
How are votes counted?
Votes will be counted by the inspector of election appointed for the AnnualSpecial Meeting, who will separately count "For"“For” and (with respect to proposals other than the election of directors) "Against"“Against” votes, abstentions and broker non-votes. A "broker non-vote"“broker non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner. Broker non-votes will have the effect on each Proposal as indicated below. Abstentions will be counted towards the vote total for each proposal and will have the same effect as "Against"“Against” votes.
How many votes are needed to approve each proposal?
o For Proposal 1, the election of directors, the three nominees
receiving the most "For" votes (among votes properly cast in person or
by proxy) will be elected. "Withheld votes" and Broker non-votes will
have no effect.
o For Proposal 2, the ratification of the appointment of Weinberg & Co.
P.A. as GEM's independent certified public accountants for the fiscal
year ending December 31, 2006, a "For" vote by a majority of the votes
present in person or by proxy, will ratify the appointment. "Withheld
votes" and Broker non-votes will have no effect.
| · | Proposal 1-- the granting to the Board of Directors the authority to amend the Certificate of Incorporation to increase the number of authorized common shares $.001 par value, from 200,000,000 to one billion, a “For” vote by a majority of the votes present in person or by proxy. “Withheld votes” and Broker non-votes will have no effect. |
| · | Proposal 2-- the granting to the Board of Directors the discretion and authority to amend the Certificate of Incorporation to effect a reverse split of the outstanding common stock of the Company, par value $.001 per share, by a ratio of 1-for-30, a “For” vote by a majority of the votes present in person or by proxy. “Withheld votes” and Broker non-votes will have no effect. |
| · | Proposal 3-- the granting to the Board of Directors the authority to amend the Certificate of Incorporation to increase the number of authorized preferred shares, $.001 par value, from 50,000,000 to 100,000,000, a “For” vote by a majority of the votes present in person or by proxy voting as a separate class. “Withheld votes” and Broker non-votes will have no effect. |
What is the quorum requirement?
6
A quorum of stockholders is necessary to hold a valid stockholder meeting. A quorum will be present if at least a majority of the stock issued and outstanding and entitled to vote at the AnnualSpecial Meeting is present in person or represented by proxy at the AnnualSpecial Meeting.
Your shares will be counted as present at the AnnualSpecial Meeting if you submit a valid proxy vote or vote at the AnnualSpecial Meeting. Abstentions and broker non-votes are counted as present and entitled to vote and are, therefore, included for purposes of determining the quorum requirement. If there is no quorum, a majority of the votes present at the AnnualSpecial Meeting may adjourn the AnnualSpecial Meeting to another date.
Dissenter’s or Appraisal Rights
The Company’s shareholders are not entitled to dissenter’s or appraisal rights under Nevada law in connection with the amendments.
How can I find out the results of the voting at the AnnualSpecial Meeting?
Preliminary voting results will be announced at the AnnualSpecial Meeting. Final voting results will be published in the Company'sCompany’s quarterly report on Form 10-Q for the quarter ending June 30, 2006.
PROPOSAL 1
TO ELECT THREE DIRECTORS TO SERVEMarch 31, 2007.
OVERALL REASON FOR THE ENSUING YEAR AND UNTIL THEIR
SUCCESSORS ARE ELECTED
GEM's boardMEETING
The Board of directors currently consists of three directors. UponDirectors has determined that it is in the recommendationbest interests of the nominating committeeCompany and the stockholders to adjust the capital structure of the boardCompany so that the Company, as a result of directors, which
consists solelythe adjustments, has under 15 million shares of independent directors,common stock issued and outstanding. In order to fulfill the boardCompany’s commitments to certain purchasers of directorsits Series B Convertible Preferred stock, the Company must first amend its Articles of Incorporation to increase the number of common shares authorized to allow for the issuance of common stock. After conversion of the Series B, and giving effect to the number of shares that are reserved for issuance upon the exercise of options and warrants, the Company would have approximately 248,895,622 common shares outstanding (323,895,622 if 3,000,000 shares of Series C are sold prior to the filing of the Amendment to increase the authorized common stock). The Board of Directors believes that the Company’s best interest would be served if a “reverse split’ of the shares would occur after the issuance of the common shares upon the conversion of the Series B, reducing the issued and outstanding common stock to under 15 million shares. The Board of Directors believes that the reduction in common shares outstanding will increase investor interest in the Company. Further, by increasing the authorized common stock and increasing the authorized preferred stock, the Board of Directors will have more flexibility to enter into financing or acquisition transactions without having to wait for the stockholder approval of the issuance of additional shares of common or preferred stock.
The plan is therefore, assuming stock holder approval at the meeting: First-- file an amendment to the Articles of Incorporation increasing the authorized common stock from 200 million to one billion and increasing the authorized preferred stock from 50 million to 100 million; Second-- convert all Series B into common stock; Third-- file another amendment to the Articles of Incorporation implementing a reverse split of the common stock at a ratio of 1-for-30.
PROPOSAL 1
TO GRANT THE BOARD OF DIRECTORS THE AUTHORITY TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES $.001 PAR VALUE, FROM 200,000,000 TO ONE BILLION.
The Board of Directors has selected
three nomineesapproved, subject to shareholder approval, an amendment to the Company’s Amended and Restated Articles of Incorporation to increase the number of authorized common shares from two hundred million (200,000,000) to one billion (1,000,000,000). The Board of Directors has determined that this amendment is advisable and in the best interests of the Company and its shareholders.
At the Special Meeting, shareholders will be asked to consider and vote upon this amendment. The Board of Directors recommends that shareholders vote FOR the amendment.
Reasons for director this year. Each directorthe Amendment
Currently, the Company is authorized to be elected will hold
office untilissue 200,000,000 common shares. Of the next Annual Meeting200,000,000 common shares authorized, as of stockholdersNovember 30, 2006, there were 128,382,181 common shares issued and until his or her
successor is elected, or untiloutstanding and 14,515,150 common shares reserved for issuance upon the director's death, resignation or removal.
Each nominee listed below is currently a directorexercise of outstanding options, including, without limitation, the benefit plans of the Company. Consequently, the Company has approximately 57,102,669 common shares available for general corporate purposes.
In addition, the Company is authorized to issue 50 million shares of preferred stock, 3 million of which has been designated as “Series A Convertible Preferred” (“Series A”), 19 million of which has been designated as “Series B Convertible Preferred” (“Series B”), 16 million which have been designated as Series C (“Series C”) and 12 million of which have no terms designated by the Board of Directors. As of November 30, 2006, there were: a) no Series A Convertible Preferred outstanding, b) 2,479,000 shares of Series B outstanding, and c) no Series C outstanding. Each share of Series A is convertible into one share of common stock has no votes to cast at any meeting of common stockholders. Each share of Series B will be automatically converted into 20 shares of common stock at the time the Company effectuates an amendment (the “Amendment”) to its Articles of Incorporation in accordance with Nevada General Corporation Law to increase the authorized number of shares of common stock in an amount sufficient to allow for the full conversion of all outstanding and issued shares of Series B into shares of common stock. Each share of Series B has 20 votes to cast at any meeting of common stockholders. Each share of Series C will be automatically converted into 25 shares of common stock at the time the Company effectuates an amendment (the “Amendment”) to it’s Articles of Incorporation in accordance with Nevada General Corporation Law to increase the authorized number of shares of common stock in an amount sufficient to allow for the full conversion of all outstanding and issued shares of Series C into shares of common stock. Each share of Series C has 20 votes to cast at any meeting of common shareholders.
From May 22, 2006 to August 31, 2006, the Company had raised $4,753,277 for working capital, through the sale of Convertible Notes. On August 31, 2006, the Company converted all of the Convertible Notes into 95,065,546 shares of common stock at $.05 per share.
From September 1, 2006 to November 30, 2006, the Company had raised $2,454,000 for working capital, through the sale of 2,454,000 shares of Series B at $1.00 per share. The Company is currently attempting to sell an additional 3 million shares of Series C at $1.00 per share through a private placement to “accredited investors.” If the Company is successful in selling the additional $3 million of Series C, it would have 3,000,000 of Series C outstanding. Series C is convertible into 75,000,000 shares of common stock. The Company does not have sufficient shares of common stock authorized to convert the Series C into common stock.
The Board of Directors had designated Series B and Series C to allow the Company to raise the working capital it needs through the sale of equity at the equivalent of $.05 and $.04 per share of common stock respectively. The Board of Directors has committed to the purchasers of the Series B and Series C, that it would call a meeting of stockholders to approve the Amendment to increase the authorized common stock, so that the Series B and Series C can be automatically converted into common stock. The Board of Directors has determined that the Company shall issue to the investors un the Convertible Notes and the investors in the Series B, upon the filing of the Amendment to increase the authorized common stock, a number of shares or pre-reverse split shares of common stock, so that each of the investors in the Convertible Notes and the Series B will receive the equivalent amount of pre-reverse split common shares as if the Convertible Notes and Series B were converted at $.04 per share. Accordingly, the Company: a) will issue to the investors in the Convertible Notes, an additional 23,766,379 shares of common stock (pre-reverse split) upon the filing of the Amendment to increase the authorized common stock; and b) issue to the Series B a total of 61,975,000 shares of common stock (pre-reverse split) upon the approval of the Amendment to increase the authorized common stock.
Also, other than the issuance of common stock upon the conversion of the Series B and Series C, the Board of Directors has proposed the increase in authorized common shares to enable the Company as a means of providing it with the additional flexibility to act with respect to the issuance of common shares or securities exercisable for, or convertible into, common shares in circumstances which it believes will advance the interests of the Company and its stockholders without the delay of seeking an amendment to the Amended Articles of Incorporation at that time.
The Board of Directors has no current specific plans to authorize the issuance of additional common shares, except as stated above, and in connection with possible future awards under employee benefit plans. However, the Company is considering, and will continue to consider, various financing alternatives, including potential capital market transactions. In connection with the Company’s overall financing initiatives, from time to time, the Board of Directors has considered and will continue to consider the issuance of common shares or securities convertible into common shares. If stockholders approve the amendment to the Amended and Restated Articles of Incorporation, then the Board of Directors would have more flexibility to pursue opportunities to engage in possible future capital market transactions involving common shares or securities convertible into common shares, including, without limitation, public offerings or private placements of such common shares or securities convertible into common shares.
Ability of the Board to Issues Shares; Certain Issuances Requiring Shareholder Approval
If the Amendment is approved by the stockholders, the additional common shares authorized by the amendment may be issued from time to time upon authorization by the Board of Directors, without further approval by the shareholders unless required by applicable law, rule or regulation. Shares may be issued for such consideration as the Board of Directors may determine and as may be permitted by applicable law.
VOTE REQUIRED
Directors are elected
A “For” vote by a pluralitymajority of the votes properly castof the shares of common stock and Series B Preferred Stock present in person or by proxy. The nominees receivingproxy at the highest number of affirmative votes will be
elected.
meeting, voting together, is required to approve Proposal 1.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERSRECCOMENDS A VOTE FOR THE THREE NOMINEES LISTED BELOW.
NOMINEES
Unless otherwise instructed,PROPOSAL TO GRANT THE BOARD OF DIRECTORS THE AUTHORITY TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES, $.001 PAR VALUE, FROM 200,000,000 TO ONE BILLION.
PROPOSAL 2
TO GRANT THE BOARD OF DIRECTORS THE AUTHORITY TO AMEND THE CERTIFICATE OF INCORPORATION TO COMBINE SHARES OF THE COMPANY’S COMMON STOCK TO EFFECT A ONE FOR THIRTY REVERSE STOCK SPLIT.
The primary reasons for a reverse stock split are to increase the proxy holders will votepublic trading price of the proxies received by
them for the nominees named below. The nominees have consented to be named
nominees in the proxy statementCompany’s shares and to continue to serve as directors if
elected. If a nominee becomes unable or declines to serve as a director or if
additional persons are nominated atreduce the Annual Meeting, the proxy holders intend
to vote all proxies received by them in such a manner as will assure the
election of the nominees listed below if possible (or, if new nominees have been
designated by the board of directors, in such a manner as to elect such
nominees), and the specific nominees to be voted for will be determined by the
proxy holders.
The Company is not aware of any reason that any of the nominees will be unable
or will decline to serve as directors. There are no arrangements or
understandings between any director or executive officer and any other person
pursuant to which he is or was to be selected as a director or officer of the
Company. The following is a brief biography of each nominee for director:
Name Age Position
- ----
Timothy J. Koziol 52 Chief Executive Officer, Board Chairman
and Director
James P. Stapleton 46 Director
7
Clyde E. Rhodes, Jr. 42 Chief Compliance Officer, VP of Technical
Services, Board Secretary and Director
Timothy J. Koziol. Mr. Koziol joined GEM in January 2002 and now serves as the
Chairman and Chief Executive Officer of the Company. Mr. Koziol implemented
accounting controls and systems to monitor the day-to-day financial position of
GEM, changed operational policies to improve efficiencies, and implemented new
sales and marketing programs to increase revenue. Prior to joining GEM, Mr.
Koziol was a principal of Fortress Funding, Inc., an asset based lending
company, where he was responsible for business development and underwriting. Mr.
Koziol was also a principal in Global Vantage, Ltd., an investment banking firm
located in Newport Beach, CA. Prior to his work in the financial services
industry, Mr. Koziol managed a marketing consulting firm for national and
regional clients. He has a Bachelor of Arts from Wheaton College in Speech
Communications and a Masters of Arts (Magma Cum Laude) from the Wheaton Graduate
School in Mass Communications.
James P. Stapleton is currently the Chief Financial Officer of BioNovo (OTC BB
BNVI), a pharmaceutical company. Bionovo is a drug discovery and development
company focusing on cancer and women's health. He was hired as the CFO. at
BioNovo in June 2005. From January 2003 to January 2005, Mr. Stapleton was the
CFO for Auxilio, Inc. (NASDAQ OTC AUXO.OB). Prior to that, from 1996 through
2002, Mr. Stapleton was employed in a variety of positions for ProSoft Learning
Corp. (NASDAQ OTC POSO.OB); including holding the positions as Corporate
Secretary, Vice President - Investor Relations, Chief Financial Officer, and
other positions. Moreover, Mr. Stapleton was Chief Financial Officer of BioTek
Solutions, Inc. from 1995 through February 1996. Also, from 1987 to1995, Mr.
Stapleton was the Chief Financial Officer for Advantage Life Products, Inc.
Currently, Mr. Stapleton serves on GEM's Board of Directors. He also served as
GEM's CFO from Nov. 2003 through April 2004. Mr. Stapleton graduated in 1995
from the University of California, Irvine (UCI) with an MBA; he also graduated
in 1985 from the University of Washingon with a BA in Economics.
Clyde E. Rhodes, Jr. Mr. Rhodes serves as Chief Compliance Officer, VP of
Technical Services, Secretary and a Director of the Company. Mr. Rhodes joined
GEM's predecessor, HazPak Environmental Services, Inc. ("HES"), in 2000. Before
joining HES, he was the Hazardous Waste Program Manager for the Metropolitan
Water District of Southern California for more than nine years. Mr. Rhodes has
been in the environmental industry for a total of more than 15 years developing
environmental management programs, performing environmental audits and assisting
public and private entities in meeting the myriad of state and federal
environment control laws and regulations. Mr. Rhodes is a founding member of the
Joint Utilities Vendor Audit Consortium established by west coast utilities
(Edison, LA Department of Water and Power, Southern California Gas, PG&E, Salt
River Project, and the Arizona Public Service Utility) to audit hazardous waste
facilities throughout the country. Mr. Rhodes possesses a Bachelor of Science
Degree in Chemical Engineering from Louisiana Tech University. Mr. Rhodes has
the certificate of Engineer-In-Training and received registration as a
Registered Environmental Assessor in the State of California in 1994.
CORPORATE GOVERNANCE
We are committed to principles of sound corporate governance. Our board of
directors has adopted charters for each of its committees. In addition, we have
a Code of Business Conduct and Ethics that is applicable to our officers,
directors and employees, and is designed to promote compliance with the laws
applicable to our business, accounting standards, and proper and ethical
business methods and practices. You can access our current committee charters,
Code of Business Conduct and Ethics and other information regarding our
corporate governance practices at the "Corporate Governance" link on the
"Investors" page of our website at www.go-gem.com (the "Corporate Governance
Webpage").
INDEPENDENCE OF DIRECTORS
8
Our board of directors has determined that James P. Stapleton, an "independent"
director for the purposes of the applicable rules of and the SEC.
DIRECTOR CANDIDATES
Stockholder Nominations and Recommendations. Section 3.6 of our Bylaws,
described above, sets forth the procedure for the proper submission of
stockholder nominations for membership on the board of directors. In addition,
it is the policy of our nominating committee to consider properly submitted
stockholder recommendations (as opposedoutstanding common stock to a formal nomination) for candidates
for membership on our board of directors. A stockholder maylevel that would make such a
recommendation by submitting the following information: candidate's name, home
and business contact information, detailed biographical data, relevant
qualifications, information regarding any relationships between the candidate
and GEM within the last three years and evidence of ownership of GEM stock by
the recommending stockholder. Information must be submitted to:
Clyde E. Rhodes, Jr. Board Secretary
3191 Temple Avenue, Suite #250
Pomona, CA 91768
Identifying and Evaluating Director Nominees.Company more attractive to potential investors. The nominating committee uses a
variety of methods for identifying and evaluating candidates for nomination to
the board of directors. Although candidates for nomination to the board of
directors typically are suggested by existing directors or by our executive
officers, candidates may come to the attention of the nominating committee
through professional search firms, stockholders or other persons. The nominating
committee evaluates candidates for nomination by reviewing the qualifications of
the candidates, considering the performance of the board of directors as a whole
and the directors eligible for re-election at the Annual Meeting of
stockholders, and considering the current size, composition and needs of the
board of directors and its committees. The nominating committee also takes into
account other factors it considers appropriate, including issues of character,
judgment, independence, age, expertise, diversity of experience, length of
service, other commitments and potential conflicts of interest. Except as may be
required by rules promulgated by the SEC, it is the current sense of the
nominating committee that there are no specific, minimum qualifications that
must be met by each nominee for the board of directors, nor are there specific
qualities or skills that are necessary for one or more of the members of the
board of directors to possess. Candidates properly recommended by stockholders
are evaluated by the nominating committee using the same criteria as other
candidates.
CODE OF ETHICS
GEM is committed to maintaining the highest standards of business conduct and
ethics. Our Code of Business Conduct and Ethics (the "Code") reflects the
business practices and principles of behavior that support this commitment and
covers our employees, officers and directors. The Code satisfies SEC rules for a
"code of ethics" required by Section 406 of the Sarbanes-Oxley Act of 2002. The
Code is available at GEM's Corporate Governance Webpage, and we will post any
amendment to the Code, as well as any waivers that are required to be disclosed
by the rules of the SEC, on GEM's Corporate Governance Webpage.
COMMUNICATIONS WITH THE BOARD
Stockholders may communicate with the non-management members of the board of
directors by writing to: Board of Directors General Environmental Management, Inc.
3191 Temple Avenue Suite #250
Pomona, California 91768.
9
Pursuantexpects that a reverse stock split of the common stock will increase the market price of the common stock. However, the company cannot be certain whether the reverse stock split would increase the trading price for the common stock. There is no assurance that:
| · | the trading price per share of common stock after the reverse stock split would rise in proportion to the reduction in the number of pre-split shares of common stock outstanding before the reverse stock split; and |
| · | the reverse stock split would result in a per share price that would attract brokers and investors who do not trade in lower priced stocks; |
The market price of the Common Stock would also be based on the Company’s performance and other factors, some of which are unrelated to procedures adoptedthe number of shares outstanding. If the reverse stock split is consummated and the trading price of the common stock declines, the percentage decline as an absolute number and as a percentage of the Company’s overall market capitalization may be greater than would occur in the absence of the reverse stock split. Furthermore, the liquidity of the common stock could be adversely affected by the boardreduced number of directors,shares that would be outstanding after the chief financial
officerreverse stock split.
The immediate effect of a reverse split would be to reduce the number of shares of common stock outstanding, and forwards copieswe anticipate increasing the trading price of all correspondence, togetherour common stock. However, the effect of any reverse stock split upon the market price for our common stock cannot be predicted, and the history of reverse stock splits for companies in similar circumstances is varied, with some companies losing substantial market value after a summary, to each non-management memberreverse stock split. We cannot assure you that the trading price of our common stock after the board of directors. Concerns relating to accounting, internal controls or
auditing matters are immediately broughtreverse stock split will rise in exact proportion to the attentionreduction in the number of the Company's audit
committee and handled in accordance with procedures established by the audit
committee with respect to such matters.
BOARD MEETINGS AND COMMITTEES
The board of directors of the Company held a total of 2 meetings and acted by
written consent 12 times during the year ended December 31, 2005. No director
serving during the year ended December 31, 2005 attended fewer than 75% of the
aggregate of all meetings of the board of directors and the committees of the
board of directors upon which such director served. Directors are encouraged,
but not required, to attend the Annual Meeting of stockholders.
The board of directors has three standing committees: the audit committee, the
compensation committee and the nominating committee.
Audit Committee. GEM has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act. The
audit committee currently consists of one director, James Stapleton, who is
"independent" as independence for audit committee members is defined by the SEC
Rules. Mr. Stapleton has been determined by the board of directors to meet the
qualifications of an "audit committee financial expert" in accordance with SEC
rules, including that the person meets the relevant definition of an
"independent director." Stockholders should understand that this designation is
a disclosure requirement of the SEC related to Mr. Stapleton's experience and
understanding with respect to certain accounting and auditing matters. The
designation does not impose upon Mr. Stapleton any duties, obligations or
liability that are greater than are generally imposed on him as a member of the
audit committee and the board of directors, and his designation as an audit
committee financial expert pursuant to this SEC requirement does not affect the
duties, obligations or liability of any other member of the board of directors.
The audit committee oversees the Company's financial reporting process and
internal controls, as well as the independent audit of the Company's financial
statements. The audit committee also selects an accounting firm to be engaged as
the Company's independent public accountants and provides oversight of legal,
ethical and corporate governance matters. The audit committee held two (2)
meetings during the year ended December 31, 2005. The report of the audit
committee is presented later in this proxy statement. The board of directors has
adopted a written charter for the audit committee that is available at GEM's
Corporate Governance Webpage at www.go-gem.com
DIRECTOR COMPENSATION
Our directors did not receive any cash compensation for their services as
directors during the year ended December 31, 2005. Our 2005 Stock Plan provides
for grants of options to purchase common stock to our directors who are not
employees. Our non-employee directors will each receive a grant of options to
purchase 25,000 shares of our common stock outstanding as a result of the reverse stock split. Also, as stated above, we cannot assure you that a reverse stock split would lead to a sustained increase in the trading price of our common stock. The following table reflects the number of shares of common stock that would be outstanding as a result of the proposed reverse stock split, and the approximate percentage reduction in the number of outstanding shares, based on 128,382,181 shares of common stock outstanding as of the record date, as well as the number of shares of common stock that would be available for issuance after the proposed reverse stock split:
| | Common Shares | Exchange Ratio | Common Shares - Post Split |
| Current Outstanding | 128,382,181 | 30 | 4,279,406 |
| Additional Shares - May Convertible Notes | 23,766,387 | 30 | 792,213 |
| Additional Shares - Series A Convertible Preferred | 1,250,000 | 30 | 41,667 |
| Conversion of Series B Convertible Preferred | 61,975,000 | 30 | 2,065,833 |
| Current Options and Warrants | 33,522,054 | 30 | 1,117,402 |
If a reverse split is implemented, the number of shares of common stock held by each stockholder would be reduced by multiplying the number of shares held immediately before the reverse split by the exchange ratio, and then rounding up to the nearest whole share. No fractional shares will be issued as a result of the reverse split. In lieu of any fractional interest in a share to which each stockholder otherwise would be entitled as a result of the reverse split, the Company will issue to such stockholder one whole share of common stock, as described in further detail below. The reverse stock split would affect our common stock uniformly and would not affect any stockholder’s percentage ownership interests in the Company or proportionate voting power, except to the extent that interests in fractional shares would be rounded up to the nearest whole share.
Effect on Options, Warrants and Other Securities.
In addition, all outstanding options, warrants, convertible preferred stock, and other securities entitling their service during the year
ended December 31, 2005. Non-employee directors did not receive any optionsholders to purchase shares of our common stock will be adjusted, as required by the terms of these securities, for participationthe reverse stock split. In particular, the conversion ratio for each instrument would be reduced, and the exercise price, if applicable, would be increased, in accordance with the terms of each instrument and based on the exchange ratio of the reverse stock split. Also, the number of shares reserved for issuance under our existing stock incentive and employee stock purchase plans would be reduced proportionally based on the exchange ratio of the reverse stock split. None of the rights currently accruing to holders of our common stock, options, warrants, convertible preferred stock or other securities convertible into common stock, will be affected by the reverse stock split.
Other Effects on Outstanding Shares.
If a reverse stock split is implemented, the rights and preferences of the outstanding shares of common stock will remain the same after the reverse split. Each share of common stock issued pursuant to the reverse stock split would be fully paid and nonassessable.
The reverse stock split would result in some stockholders owning “odd-lots” of less than 100 shares of common stock. Brokerage commissions and other costs of transactions in odd-lots are generally higher than the costs of transactions in “round-lots” of even multiples of 100 shares.
Our common stock is currently registered under Section 12(g) of the Securities Exchange Act of 1934, as amended. As a result, we are subject to the periodic reporting and other requirements of the Exchange Act. The proposed reverse stock split would not affect the registration of the common stock under the Exchange Act.
Effect on Authorized Shares of common stock.
The reverse stock split, if implemented, would not change the number of authorized shares of common stock as designated by our amended Articles of Incorporation (1 billion authorized.) Therefore, because the number of issued and outstanding shares of common stock would decrease, the number of shares remaining available for issuance under our authorized pool of common stock would increase.
Possible Anti-Takeover Effects.
Under the proposed reverse stock split, the number of authorized shares of common stock will not be reduced. This will increase significantly the ability of our board of directors to issue authorized and unissued shares without further stockholder action. The effective increase in the number of authorized but unissued shares of common stock may be construed as having an anti-takeover effect by permitting, for example, the issuance of shares to purchasers who might oppose a hostile takeover bid or oppose any committeeefforts to amend or repeal certain provisions of the Company’s certificate of incorporation or bylaws. As a result, management and the board might use the additional shares to resist or frustrate a third-party transaction providing an above-market premium that is favored by a majority of the independent stockholders.
If our stockholders approve some or all of the proposed amendments to our certificate of incorporation, the board of directors may elect whether or not to declare a reverse stock split, as well as the exchange ratio, at any time before the first anniversary of this Special Meeting of Stockholders. The reverse stock split would be implemented by filing the appropriate amendment to our Articles of Incorporation with the Nevada Secretary of State, and the reverse stock split would become effective on the date of the filing. As of the effective date of the reverse stock split, each certificate representing shares of our common stock before the reverse stock split will be deemed, for all corporate purposes, to evidence ownership of the reduced number of shares of common stock resulting from the reverse stock split, except that holders of unexchanged shares would not be entitled to receive any dividends or other distributions payable by the Company after the effective date until they surrender their old stock certificates for exchange. All options, warrants, convertible preferred stock and other securities would also be automatically adjusted on the effective date. Our transfer agent would act as the exchange agent for purposes of implementing the exchange of stock certificates. As soon as practicable after the effective date, stockholders and holders of securities convertible into our common stock will be notified of the effectiveness of the reverse split. Stockholders of record would receive a letter of transmittal requesting them to surrender their stock certificates for stock certificates reflecting the adjusted number of shares as a result of the reverse stock split. Persons who hold their shares in brokerage accounts or “street name” would not be required to take any further actions to effect the exchange of their certificates. No new certificates would be issued to a stockholder until the stockholder has surrendered the stockholder’s outstanding certificate(s) together with the properly completed and executed letter of transmittal to the exchange agent. Until surrender, each certificate representing shares before the reverse stock split would continue to be valid and would represent the adjusted number of shares based on the exchange ratio of the reverse stock split, rounded up to the nearest whole share. Stockholders should not destroy any stock certificate and should not submit any certificates until they receive a letter of transmittal.
Federal Income Tax Consequences--The following is a summary of material federal income tax consequences of the reverse stock split and does not purport to be complete. It does not discuss any state, local, foreign or minimum income or other tax consequences. Also, it does not address the tax consequences to holders that are subject to special tax rules, including banks, insurance companies, regulated investment companies, personal holding companies, foreign entities, nonresident alien individuals, broker-dealers and tax-exempt entities. The discussion is based on the provisions of the United States federal income tax law as of the date hereof, which they servedis subject to change retroactively as well as prospectively. This summary also assumes that the shares are held as a “capital asset,” as defined in the Internal Revenue Code of 1986, as amended (generally, property held for investment). The tax treatment of a stockholder may vary depending upon the particular facts and circumstances of the stockholder. Each stockholder is urged to consult with the stockholder’s own tax advisor with respect to the consequences of the reverse stock split.
No gain or loss should be recognized by a stockholder upon his or her exchange of shares pursuant to the reverse stock split (except in the case of the portion of whole shares attributable to the rounding up of fractional shares, as discussed herein). A stockholder’s tax basis in the shares received as a result of the reverse split will be equal, in the aggregate, to his or her basis in the shares exchanged, increased by the income or gain attributable to the rounding up of fractional shares, as described herein. New shares attributable to the rounding up of fractional shares to the nearest whole number of shares will be treated for tax purposes as if the fractional shares constitute a disproportionate dividend distribution. Such stockholders generally should recognize ordinary income to the extent of earnings and profits of the company allocated to the portion of each whole share attributable to the rounding up process, and the remainder of the gain, if any, shall be treated as received from the exchange of property. The stockholder’s holding period for the shares will include the period during which he or she held the year ended December 31, 2005.
pre-split shares surrendered in the reverse split. The portion of the shares received by a stockholder that are attributable to rounding up for fractional shares will have a holding period commencing on the effective date of the reverse split. The reverse split would constitute a reorganization within the meaning of Section 368(1)(E) of the Internal Revenue Code of 1986, as amended, and the Company will not recognize any gain or loss as a result of the reverse split.
Our beliefs regarding the tax consequence of the reverse stock split are not binding upon the Internal Revenue Service or the courts, and there can be no assurance that the Internal Revenue Service or the courts will accept the positions expressed above. The state and local tax consequences of the reverse stock split may vary significantly as to each stockholder, depending upon the state in which he or she resides.
The affirmative vote of a majority of all outstanding shares of common stock and Series B Convertible Preferred Stock, voting together, is entitled to vote at the meeting is required to approve Proposal 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECCOMENDS A VOTE FOR THE PROPOSAL TO GRANT THE BOARD OF DIRECTORS THE AUTHORITY TO AMEND THE CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE SPLIT OF THE OUTSTANDING COMMON STOCK OF THE COMPANY, PAR VALUE $.001 PER SHARE, BY A RATIO OF 1-FOR 30.
PROPOSAL 3
TO GRANT THE BOARD OF DIRECTORS THE AUTHORITY TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED PREFERRED SHARES $.001 PAR VALUE, FROM 50,000,000 TO 100,000,000.
The Company is authorized to issue 50 million shares of preferred stock, 3 million of which has been designated as “Series A Convertible Preferred” (“Series A”), 19 million of which has been designated as “Series B Convertible Preferred” (“Series B”), and 16 million which have been designated as Series C (“Series C”) and 12 million of which have no terms designated by the Board of Directors. As of November 30, 2006, there were: a) no Series A Convertible Preferred outstanding, b) 2,479,000 shares of Series B outstanding, and c) no Series C outstanding. In accordance with the Articles of Incorporation, the Board of Directors has the authority, by resolution or resolutions from time to time adopted, to provide for the issuance of preferred stock in series and to fix and state the powers, designations, preferences and relative, participating, optional or other special rights of the shares of each such series, and the qualifications, limitation or restrictions thereof, including, but not limited to determination of any of the following:
(1) the distinctive serial designation and the number of shares constituting such series;
(2) the rights in respect of dividends, if any, to be paid on the shares of such series, whether dividends shall be cumulative and, if so, from which date or dates, the payment or date or dates for dividends, and the participating or other special rights, if any, with respect to dividends;
(3) the voting powers, full or limited, if any, of the shares of such series;
(4) whether the shares of such series shall be redeemable and, if so, the price or prices at which, and the terms and conditions upon which such shares may be redeemed:
(5) the amount or amounts payable upon the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation;
(6) whether the shares of such series shall be entitled to the benefits of a sinking or retirement fund to be applied to the purchase or redemption of such shares, and, if so entitled, the amount of such fund and the manner of its application, including the price or prices at which such shares may be redeemed or purchased through the application of such funds;
(7) whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation and, if so convertible or exchangeable, the conversion price or prices, or the rate or rates of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange;
(8) the subscription or purchase price and form of consideration for which the shares of such series shall be issued; and
(9) whether the shares of such series which are redeemed or converted shall have the status of authorized but unissued shares of preferred stock and whether such shares may be reissued as shares of the same or any other series of preferred stock.
The Board of Directors has proposed the increase in authorized preffered shares to enable the Company as a means of providing it with the additional flexibility to act with respect to the issuance of preferred shares or securities exercisable for, or convertible into, common shares in circumstances which it believes will advance the interests of the Company and its stockholders without the delay of seeking an amendment to the Amended Articles of Incorporation at that time.
VOTE REQUIRED
The affirmative vote of a majority of all outstanding shares of common stock entitled to vote at the meeting, as well as a majority of all outstanding shares of Series B Convertible Preferred Stock and Series C Convertible Preferred Stock, entitled to vote at the meeting, voting as a separate classe, is required to approve Proposal 3.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED ABOVE.
10
Proposal No. 2
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Based on the recommendation of its Audit Committee, the Board has appointed the
firm of Weinberg & Co. P.A. to be GEM's independent certified public accountants
for the year ending December 31, 2006, and recommends to stockholders that they
vote for ratification of that appointment. Although not required to do so, the
Board has determined that it would be desirable to request stockholders'
approval of this appointment. The ratification of the appointment of GEM's
independent certified public accountants will require the affirmative vote by
the holders of a majority of the outstanding Stock present in person or
represented by proxy at the Meeting. If such approval is not received, the Board
will reconsider the appointment.
In 2005 and 2004 Weinberg & Co. P.A. services included an examination of GEM's
consolidated financial statements, the financial statements of certain benefit
plans, and reviews of the consolidated financial statements included in GEM Form
10-Qs filed with the SEC for each of the quarters ended March 31, June 30, and
September 30.
Weinberg & Co. P.A. billed GEM for professional services rendered for the years
ended December 31, 2005, and December 31, 2004, as follows:
Fees for Services Rendered Fiscal Year 2005 Fiscal Year 2004
- ----------------------------- ----------------------- -----------------------
Audit fees (1) $ 135,304 $ 45,986
Audit-related fees (2) $ 111,508 $ -
Tax fees (3) $ - $ -
All other fees $ - $ -
Total $ 246,812 $ 45,986
- ----------------------------- --- ------------------ -- -------------------
(1) Includes fees and expenses related to the fiscal year audit and
to interim reviews and related accounting consultation.
(2) Includes fees and expenses for audits of the employee benefit
plan and, in 2004, consultation regarding internal control
reporting.
(3) Includes fees and expenses for tax advisory service.
The Audit Committee approves in advance all audit and non-audit services
provided by the independent auditors prior to their engagement with respect to
such services. The Audit Committee has delegated to the Chairman of the Audit
Committee the authority to pre-approve additional audit-related and non-audit
services not prohibited by law to be performed by GEM's independent auditors and
associated fees up to a maximum for any one non-audit service equal to the
lesser of $20,000 or 20% of the audit fees for GEM's most recent completed
fiscal year, provided that the Chair shall report any decisions to pre-approve
such audit-related or non-audit services and fees to the full Audit Committee at
its next regular meeting. The Audit Committee approved in advance all of the
audit and non-audit services provided by the independent auditors in fiscal 2005
and 2004.
A representative of Weinberg & Co. P.A. is expected to attend the Meeting, will
have an opportunity to make a statement, if he or she desires to do so, and will
be available to respond to appropriate questions.PROPSAL TO GRANT THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE "FOR" THE PROPOSALAUTHORITY TO RATIFYAMEND THE APPOINTMENTCERTIFICATE OF WEINBERG & CO.
P.A.TO SERVE AS GEM'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FORINCORPORATION TO INCREASE THE FISCAL YEAR ENDING DECEMBER 31, 2006.
11
POLICY ON AUDIT COMMITTEE PRE-APPROVALNUMBER OF AUDIT AND PERMISSIBLE NON-
AUDIT SERVICES OF INDEPENDENT AUDITORS
The audit committee's policy is to pre-approve all audit and permissible
non-audit services provided by the independent auditors. These services may
include audit services, audit-related services, tax services and other services.
Pre-approval is detailed as to the particular service or category of services
and is generally subject to a specific budget. Each new engagement of Weinberg &
Co. P.A. was approved in advance by the audit committee, and none of those
engagements made use of the de minimus exception to pre-approval contained in
the SEC's rules.
AUDIT COMMITTEE REPORT
The Audit Committee (the "Committee") is composed of James P. Stapleton, who is
considered an "independent" director for the purposes of the applicable rules of
the SEC. The Committee's responsibilities are set forth in its charter, a copy
of which is available on GEM's Internet site, www.go-gem.com. The Board and the
Committee believe that the Committee members are and were at the time of the
actions described in this report "independent" directors, as independence is
defined by SEC Rule 401(e).
The Committee has reviewed and discussed with management GEM's audited
consolidated financial statements as of and for the year ended December 31,
2005, and has discussed with GEM's independent auditors the matters required to
be discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, issued by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
The Committee has received and reviewed the written disclosures and the letter
from the independent auditors required by Independence Standard No. 1,
Independence Discussions with Audit Committees, as amended, issued by the
Independence Standards Board, and has discussed with the auditors the auditors'
independence and considered whether the provision of non-audit services by the
auditors is compatible with maintaining their independence.
Based on the foregoing reviews and discussions, the Committee recommended to the
Board that the above referenced consolidated financial statements be included in
GEM's Annual Report on Form 10-KSB for the year ended December 31, 2005, for
filing with the SEC.
Respectfully Submitted
James P. Stapleton
12
AUTHORIZED PREFERRED STOCK, $.001 PAR VALUE, FROM 50,000,000 TO 100,000,000. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 17,November 30, 2006, certain information as known to the Company with respect to the beneficial ownership of our common stock by (i) any person (including any group as that term is used in Section 13(d)(3) of the Exchange Act), known by the Company to be the beneficial owner of more than 5% of the Company'sCompany’s voting securities, (ii) each director, and each
nominee for director to the Company, (iii) each of the executive officers, named
in the Summary Compensation Table appearing herein, and (iv) all current executive officers and directors of the Company as a group. Unless otherwise indicated, all personsperson named below can be reached at General Environmental Management, Inc. 3191 Temple Avenue, Suite #250,Ste 250, Pomona, CA 91768.
Name | No. of Shares owned | % of Stock Outstanding (1) |
| Timothy J. Koziol | | 0.4% |
| Clyde Rhodes | 400,030 | 0.3% |
| James Stapleton | 31,717 | 0.02% |
| Brett M. Clark | 90,000 (3) | 0.07% |
| Directors and Officers as a Group | 1,111,777 | 0.8% |
No. of
Name Shares owned % of Stock Outstanding (1)
W. Reed Jensen 1,550,000 5.6%
4348 Butternut Rd. Salt Lake City, Utah 84124
General Pacific Partners LLC 1,834,142 | Based upon 128,382,181 shares outstanding. |
(2) 6.6%
610 Newport Center Drive, Newport Beach CA 92660
Kevin P. O'Connell | Includes 190,000 options to purchase common stock at $1.00 per share. |
(3) 3,163,379 (4) 11.3%
610 Newport Center Drive, Newport Beach CA 92660
Timothy J. Koziol 600,030 (5) 2.2%
Clyde Rhodes 400,030 1.4%
James Stapleton 31,717
0.1%
Directors and Officers as a Group 1,031,777 3.7%
- ----------------------------------------------------- ------------------- ----------------------------
| Includes 90,000 options to purchase common stock at $1.30 per share. |
(1) Based upon 27,893,576 shares outstanding.
(2) Includes warrants to purchase 929,225 common shares at exercise prices
ranging from $1.00 to $1.25.
(3) Kevin P. O'Connell is the Managing Member of Billington Brown
Acceptance, LLC and General Pacific Partners, LLC.
(4) Includes shares owned by Billington Brown Acceptance, LLC and General
Pacific Partners, LLC.
(5) Includes 150,000 options to purchase common stock at $1.00 per share.
EXECUTIVE COMPENSATION AND OTHER MATTERS
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation earned by or paid to our Chief
Executive Officer and the other most highly compensated executive officers whose
total salary and bonuses exceeded $100,000 for services rendered in all
capacities during the fiscal year ended December 31, 2005. We refer to these
individuals as our named executive officers.
The total compensation for the three fiscal years ended December 31, 2005 of
Timothy J. Koziol, our Chief Executive Officer, Brett M. Clark, our Chief
Financial Officer, and Clyde E. Rhodes, Jr., our Secretary is set forth below in
the following Summary Compensation Table.
13
Other Annual
Name and Principal Compensation ($) All Other Compensation
Position Year Salary ($) (1) Bonus ($) (2) ($)
Timothy J. Koziol 2005 204,194 10,000 -0- -0-
2004 186,401 -0- -0- -0-
2003 95,994 -0- -0- -0-
Brett M. Clark 2005 81,710 10,000 71,920 -0-
2004 -0- -0- -0- -0-
2003 -0- -0- -0- -0-
Clyde E. Rhodes, Jr. 2005 103,393 10,000 -0- -0-
2004 85,361 -0- -0- -0-
2003 80,625 -0- -0- -0-
- ---------------------- ------- ------------- --------------- ------------------- ------------------------
(1) The compensation described in this table does not include medical,
group life insurance or other benefits received by the named executive
officers that are available generally to all of our salaried
employees, and may not include certain perquisites and other personal
benefits received by the named executive officers that do not exceed
the lesser of $50,000 or ten percent (10%) of any such officer's
salary and bonus disclosed in the table.
(2) Mr. Clark performed services for the Company during the first part of
the year as an outside consultant.
Option Grants in Last Fiscal Year
Prior to acquisition by the Company, General Environmental Management, Inc. of
Delaware's Board of Directors approved and implemented the 2005 Stock Option
Plan (the plan). The plan authorized option grants to employees and other
persons closely associated with the Company for the purchase of up to 2,643,500
shares of common stock. Immediately following the approval of the plan the Board
of Directors of General Environmental Management, Inc. of Delaware granted a
total of 1,680,500 options to 68 employees and to two consultants. The exercise
price for the options was $1.00 per share. General Environmental Management,
Inc. of Delaware was not a publicly traded company at the time of the award but
the Board determined that $1.00 was the fair market value at that time. Under
the terms of the Acqisition Agreement and Plan of Merger the options became
exercisable into the same number of shares in the Company's stock.
During 2005, the Company awarded 200,000 options to our Chief Executive Officer
and 200,000 options to our Chief Financial Officer at exercise prices of $1.00
and $1.30, respectively, based on the closing market price on date of issuance.
On April 1, 2005 the Company's Board of Directors authorized the issuance of
6,000 options to three employees. The exercise price for the options was $1.65
per share and was based on the closing market price on the date of issuance. On
July 1, 2005 the Company's Board of Directors authorized the issuance of 283,000
options to eight employees. The exercise price for the options was $1.30 per
share and was based on the closing market price on the date of issuance. On
October 1, 2005 the Company's Board of Directors authorized the issuance of
18,000 options to five employees. The exercise price for the options was $1.17
per share and was based on the closing market price on the date of issuance.
Aggregate Option Exercises in Last Fiscal Year And Fiscal Year End Option Values
There were no option exercises by our executive officers during fiscal 2005.
YEAR-END OPTION VALUES
14
The following table provides information for the executive officers named in the
Summary Compensation Table above concerning stock options exercised during the
year ended December 31, 2005, as well as the number and value of securities
underlying exercisable and unexercisable options held as of December 31, 2005.
Number of Securities Value of Unexercised
Underlying Unexercised Options at In-the-Money Options at
December 31, 2005(#) December 31, 2005 ($)
----------------------------------- ------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
--------------- -------------- ---------------- --------------
Timothy J Koziol 150,000 50,000 - -
Brett M. Clark 50,000 150,000 - -
Clyde E. Rhodes, Jr. - - - -
The values shown for in-the-money options represent the difference between the
respective exercise price of outstanding stock options, and $ 0.50, which is the
fair market value of our common stock as of December 31, 2005.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and executive
officers, and persons who own more than ten percent of a registered class of the
Company's equity securities, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Officers, directors and greater than
ten percent stockholders are required by Securities and Exchange Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 2005, all Section
16(a) filing requirements applicable to its officers, directors and greater than
ten percent beneficial owners were complied with. All such Forms 4 have since
been filed with the Securities and Exchange Commission.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended December 31, 2004, General Pacific Partners (GPP),
whose managing member is Kevin P. O'Connell performed various services for the
Company. In return, GPP was paid $160,000 in cash and converted $240,000 in
advisory fees into 240,000 shares of common stock. In addition, GPP received
$310,375 in cash for finders fees related to financings of the Company. GPP also
purchased 91,875 shares of common stock at $0.01 per share. Also during 2004,
Billington Brown Acceptance, LLC ("Billington Brown"), whose managing member is
Kevin P. O'Connell, made a loan to the Company of $78,837. As partial
consideration for the loan, Billington Brown was issued 80,584 warrants to
purchase 80,584 shares of common stock at $1.25 per share. The loan plus accrued
interest was converted into 80,583 shares of common stock.
During the fiscal year ended December 31, 2005, General Pacific Partners (GPP)
performed various services for the Company. Below lists the dollar amounts GPP
earned in advisory fees for fiscal year 2005 and the cumulative amount converted
into shares of the company's common stock.
o GPP earned $355,000 of advisory fees, and
o converted $657,212 in advisory fees from current and previous years
into 657,212 shares of the Company's common stock.
15
GPP also signed several promissory notes with the company for a total loan of
$715,000. The notes carry an interest rate of ten percent (10%) per annum. Along
with the loans, GPP received 357,500 warrants to purchase common shares of the
Company at $1.25 per share. As of December 31, 2005 none of the notes had been
repaid. During 2005 the Company issued to GPP 296,350 warrants to purchase the
Company's common stock at $1.00 per share. These warrants originated from
finders fees related to financings of the Company. GPP also transferred 300,000
warrants, exercisable at $0.10 per share, to Billington Brown. GPP also
exercised 400,000 warrants at $0.10 per share and was issued 400,000 shares.
Also during 2005, Billington Brown received from GPP 300,000 warrants,
exercisable at $0.10 per share. They exercised the warrants and were issued
300,000 shares of the Company's common stock. During 2005 Billington Brown
loaned the Company $400,000 at an interest rate of eight percent (8%) per annum.
The loan was repaid in 2005.
INDEMNIFICATION AGREEMENTS
Our bylaws provide that we shall indemnify our directors and officers and may
indemnify our employees and other agents to the fullest extent permitted by
Nevada law. Our bylaws also permit us to secure insurance on behalf of any
officer, director, employee or other agent for any liability arising out of his
or her actions in such capacity, regardless of whether the Nevada Revised
Statutes expressly permits indemnification.
We believe that these provisions are necessary to attract and retain qualified
persons as directors and executive officers. It is the position of the
Securities and Exchange Commission that indemnification for liabilities arising
under federal or state securities laws is against public policy and not
enforceable.
At present, there is no pending litigation or proceeding involving any of our
directors or officers in which indemnification is required or permitted, and we
are not aware of any threatened litigation or proceeding that may result in a
claim for such indemnification. The Company is self-insured for these and
similar claims.
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g.,
brokers) to satisfy the delivery requirements for proxy statements and annual
reports with respect to two or more stockholders sharing the same address by
delivering a single proxy statement addressed to those stockholders. This
process, which is commonly referred to as "householding," potentially means
extra convenience for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are GEM stockholders
will be "householding" our proxy materials. A single proxy statement will be
delivered to multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholders. Once you have
received notice from your broker that they will be "householding" communications
to your address, "householding" will continue until you are notified otherwise
or until you revoke your consent. If, at any time, you no longer wish to
participate in "householding" and would prefer to receive a separate proxy
statement and annual report, please notify your broker or direct your written
request to:
Brett Clark, Vice President - CFO
General Environmental Management, Inc.
3191 Temple Avenue, Suite #250
Pomona, CA 91768
16
or call (909) 444-9500 to request an additional copy. Stockholders who currently
receive multiple copies of the proxy statement at their address and would like
to request "householding" of their communications should contact their broker.
OTHER MATTERS
The Company knows of no other matters to be submitted to the AnnualSpecial Meeting. If any other matters properly come before the meeting, it is the intention of the persons named in the enclosed form proxy to vote the shares they represent as the board of directors may recommend.
A copy of the Company's Annual Report to the Securities and Exchange Commission
on Form 10-KSB for the year ended December 31, 2005 is enclosed with this Proxy
Statement.
WHERE YOU CAN FIND MORE INFORMATION
The Corporation files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information we file at the SEC'sSEC’s Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC'sSEC’s regional offices located at 233 Broadway, New York, New York 10279; 801 Brickell Ave., Suite 1800, Miami, Florida 33131; 175 W. Jackson Boulevard, Suite 900, Chicago, Illinois 60604; 1801 California Street, Suite 4800, Denver, Colorado 80202-2648 or 5670 Wilshire Boulevard, Suite 1100, Los Angeles, California 90036-3648. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov. The SEC allows the Corporation to "incorporate by
reference" information into this Proxy Statement, which means that we can
disclose important information by referring you to another document filed
separately with the SEC. A copy of such report is enclosed with this Proxy
Statement. All documents filed by the Corporation pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and prior
to the annual meeting shall also be deemed to be incorporated by reference into
this Proxy Statement.
You should rely only on the information contained in this Proxy Statement or other documents to which we refer to vote at the AnnualSpecial Meeting. We have not authorized anyone to provide you with information that is different from what is contained in this Proxy Statement. You should not assume that the information contained in this Proxy Statement is accurate as of any date other than the date of the AnnualSpecial Meeting, and the mailing of the Proxy Statement to stockholders shall not create any implication to the contrary.
Please sign and promptly return your proxy in the enclosed envelope. Your vote is important.
By Order of the Board of Directors
/s/ Clyde E. Rhodes, Jr.
- --------------------------
Clyde E. Rhodes Jr., Secretary
Dated:
April 17, 2006
17
January 10, 2007Appendix A
GENERAL ENVIRONMENTAL MANAGEMENT, INC.
3191 Temple Avenue, Suite #250,
Ste 250
Pomona, CA 91768
PROXY FOR THE 2006 ANNUAL2007 SPECIAL MEETING OF STOCKHOLDERS
To Be Held On June 15, 2006
January 29, 2007
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the AnnualSpecial Meeting of Stockholders of GENERAL ENVIRONMENTAL MANAGEMENT, INC (the "Company"“Company”), a Nevada corporation, will be held on June 15, 2006January 29, 2007 at 10:00 a.m., local time, at the office of the Company, 3191 Temple Avenue, Suite #250,Ste 250, Pomona, CA 91768 for the purposes stated on the reverse side of this proxy card.
The signatory on the reverse side of this proxy card (the "Signatory"“Signatory”), revoking all prior proxies, hereby appoints Timothy J,J. Koziol and Brett M. Clark, and each of them, as proxies and attorneys-in-fact, with full power of substitution, to represent and vote on the matters set forth in this proxy any and all shares of the Common Stock of the Company held or owned by or standing in the name of the Signatory on the Company'sCompany’s books that the Signatory would be entitled to vote at the AnnualSpecial Meeting of Stockholders of the Company to be held on June 15,
2006,January 29, 2007, at 10:00 a.m., local time, and any continuation or adjournment thereof, with all powers the Signatory would possess if personally present at the meeting.
The Signatory hereby directs and authorizes the above named Proxies and each of them, or their substitute or substitutes, to vote as specified with respect to the proposals listed on the reverse side of this proxy card. The shares represented by this proxy will be voted as specified, or, if no specification is made, in favor of each proposal. The Signatory hereby further confers upon said Proxies, and each of them, or their substitutes, discretionary authority to vote with respect to all other matters that may properly come before the meeting or any postponement, continuation or adjournment thereof.
The Signatory hereby acknowledges receipt of the Notice of
AnnualSpecial Meeting of Stockholders, Proxy Statement and
AnnualSpecial Report.
18
This Proxy is solicited on behalf of the Board of Directors of
GENERAL ENVIRONMENTAL MANAGEMENT, INC,
3191 Temple Avenue, Ste 250, Pomona, CA 91768
The undersigned hereby appoints Timothy J. Koziol and Brett Clark as Proxies,
each with the power to appoint his substitute, and hereby authorizes them to
vote as designated below, all the Common Stock of GENERAL ENVIRONMENTAL
MANAGEMENT, INC held of record by the undersigned on April 17 2006, at the
annual meeting of stockholders scheduled to be held on June 15, 2006, and at any
adjournment thereof.
1. ELECTION OF DIRECTORS
for all nominees listed [ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
below, except as marked to
the contrary below.
(01) Timothy J. Koziol
(02) Clyde E. Rhodes Jr. INSTRUCTION: To withhold authority to vote
(03) James Stapleton for any nominee(s), mark "For All Except"
and write that nominee(s) name in the
space provided below.
------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF WEINBERG & Co. P.A. as the independent
certified public accountants of GENERAL ENVIRONMENTAL MANAGEMENT, INC for the
fiscal year ending December 31, 2006.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote on such other
business as may properly come before this meeting.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, and 2.
Please sign exactly as it appears printed
hereon. When shares are held by joint
tenants, both should sign. When signing as
an attorney, executor, administrator,
trustee, or guardian, please give full
title as such. If signing as a corporation,
please sign full corporate name by
President or other authorized officer. If
signing as a partnership, please sign in
partnership name by authorized person.
------------------------------------------
Signature
Dated: ________________, 2006
Please vote, sign, date, and __________________________________________ return
the Proxy Card using the Signature (if held jointly) enclosed envelope.
19