Edgar Filing: COMMODORE APPLIED TECHNOLOGIES INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14A INFORMATION

Proxy Statement
Pursuant to Section 14(a) of the Securities Exchange Act of
1934

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|

COMMODORE APPLIED TECHNOLOGIES, INC.

(Name of Registrant as Specified in Its Charter)

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(Names 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:

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(2) Aggregate number of securities to which transaction
applies:

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(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):

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(5) Total fee paid:

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| | Fee paid previously with preliminary materials:

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| | 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, of the form or schedule and the date of its filing.

(1) Amount previously paid:

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(2) Form, Schedule or Registration Statement no.:

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(3) Filing Party:

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(4) Date Filed:

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PROXY STATEMENT AND NOTICE OF 2003

ANNUAL STOCKHOLDERS MEETING

COMMODORE APPLIED TECHNOLOGIES, INC.

NOTICE OF 2003 ANNUAL
MEETING OF STOCKHOLDERS

Time: 11:00 a.m. on Tuesday, December 21,2004

Place: The Fitzpatrick Hotel
687 Lexington Avenue
New York, NY 10022

Items of
Business:

1) To elect directors.

2) To authorize our Board of Directors in
its discretion,to amend our Certificate
of Incorporation to effect a reverse stock
split in a ratio of between 1-for-10 and
1-for-20,without further approval of our
stockholders.

3) To ratify the Company's selection of
independent auditors.

4) To transact other business properly coming
before the meeting.

Who Can Vote: You can vote if you were a stockholder of
record on November 10, 2004.

Annual Report: A copy of our 2003 Annual Report on Form
10K is enclosed.

Date of Mailing: This notice and the proxy statement
are first being mailed to stockholders on
or about November 19, 2004.

By Order of the Board of Directors
James M. DeAngelis, Secretary

LETTER TO THE STOCKHOLDERS

To Our Stockholders:

It is our pleasure to invite you to attend our 2003 Annual
Meeting of Stockholders, which will be held this year on
Tuesday, December 21, 2004, at the Fitzpatrick Hotel, 687
Lexington Avenue, New York, NY 10022. The meeting will start
at 11:00 a.m. local time.

On the ballot at this year's meeting are company proposals
(1) for the election of directors, (2) to authorize our Board
of Directors in its discretion, to amend our Certificate of
Incorporation to effect a reverse stock split in a ratio of
between 1-for-10 and 1-for-20, without further approval of
our stockholders, and (3) to ratify the Company's independent
auditor. We also look forward to answering your questions at
the meeting in the manner discussed in the proxy statement.
If you will need special assistance at the meeting because of
a disability, please contact James M. DeAngelis at 212-308-
5800. We will not provide an interpreter for the hearing
impaired.

Please note that you will need to show that you are a
stockholder of Commodore to attend the annual meeting. If
your shares are registered in your name, your admission card
is attached to your proxy card, and you will need to bring
this card with you to the meeting. If your shares are in the
name of your broker or bank or you received your proxy
materials electronically, you will need to bring evidence of
your stock ownership, such as your most recent brokerage
statement, and valid picture identification. If you do not
have either an admission card or proof that you own Commodore
Applied Technologies, Inc. stock, you may not be admitted
into the meeting.

Whether or not you plan to attend, you can be sure your
shares are represented at the meeting by promptly voting and
submitting your proxy by completing, signing and returning
the enclosed proxy card.

Thank you for your support.

Sincerely,

Shelby T. Brewer
Chairman and CEO

ABOUT THE MEETING

What am I voting on?
---------------------

You will be voting on the following:

* To elect eight directors;
* To authorize our Board of Directors in its discretion,
to amend our Certificate of Incorporation to effect a
reverse stock split in a ratio of between 1-for-10 and
1-for-20, without further approval of our stockholders;
and
* To ratify Tanner + Co as the Company's independent
auditors.

Who is entitled to vote?
------------------------

You may vote if you owned stock as of the close of business
on November 10, 2004. Each share of common stock is entitled
to one vote. As of November 11, 2004, we had
132,346,053 shares of common stock outstanding.

How do I vote before the meeting?
---------------------------------

You have two voting options:

* By facsimile through the number shown on your proxy
card; or
* By mail by completing, signing and returning the
enclosed proxy card.

If you hold your shares in the name of a bank or broker,
whether you can vote by facsimile depends on their voting
processes. Please follow the directions on your proxy card
carefully.

Can I vote at the meeting?
--------------------------

You may vote your shares at the meeting if you attend in
person. Even if you plan to attend the meeting, we encourage
you to vote your shares by proxy. You may vote by proxy by
facsimile or by mail.

Can I change my mind after I vote?
----------------------------------

You may change your vote at any time before the polls close
at the meeting. You may do this by (1) signing another proxy
with a later date and returning it to us by mail or facsimile
prior to the meeting, (2) voting again at the meeting.

What if I return my proxy card but do not provide voting
instructions?
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Proxies that are signed and returned but do not contain
instructions will be voted (1) FOR the election of the
nominee directors named on page 3 of this proxy statement;
(2) FOR the authorization of our Board of Directors in its
discretion, to amend our Certificate of Incorporation to
effect a reverse stock split in a ratio of between 1-for-10
and 1-for-20, without further approval of our stockholders;
and (3) FOR the ratification of Tanner + Co. as the Company's
independent auditors.

What does it mean if I receive more than one proxy card?
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It means that you have multiple accounts with brokers and/or
our transfer agent. Please vote all of these shares. We
recommend that you contact your broker and/or our transfer
agent to consolidate as many accounts as possible under the
same name and address. Our transfer agent is Registrar and
Transfer Company, which may be reached at 1-800-866-1340.

Will my shares be voted if I do not provide my proxy?
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Your shares may be voted under certain circumstances if they
are held in the name of a brokerage firm. Brokerage firms
have the authority under the National Association of
Securities Dealers rules to vote customers' un-voted shares,
which are referred to as "broker non-votes," on certain
"routine" matters, including the election of directors.
Shares represented by broker non-votes are counted for
purposes of establishing a quorum. At our meeting, shares
represented by broker non-votes will be counted as voted by
the brokerage firm in the election of directors and the
ratification of the auditors, but will not be counted for all
other matters to be voted on because these other matters are
not considered "routine" under the applicable rules. If you
hold your shares directly in your own name, they will not be
voted if you do not provide a proxy.

How can I attend the meeting?
-----------------------------

The annual meeting is open to all holders of Commodore
Applied Technologies common stock. To attend the meeting,
you will need to bring evidence of your stock ownership. If
your shares are registered in your name, your admission card
is attached to your proxy card, and you will need to bring it
with you to the meeting. If your shares are in the name of
your broker or bank or you received your proxy materials
electronically, you will need to bring evidence of your stock
ownership, such as your most recent brokerage statement, and
valid picture identification. For directions to the annual
meeting, please call our Investor Relations department at 212-
308-5800. If you do not have either an admission card or
proof that you own Commodore Applied Technologies stock, you
may not be admitted into the meeting.

May stockholders ask questions at the meeting?
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Yes. Representatives of the Company will answer
stockholders' questions of general interest at the end of the
meeting. In order to give a greater number of stockholders
an opportunity to ask questions, individuals or groups will
be allowed to ask only one question and no repetitive or
follow-up questions will be permitted.

How many votes must be present to hold the meeting?
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Your shares are counted as present at the meeting if you
attend the meeting and vote in person or if you properly
return a proxy by mail, or facsimile. In order for us to
conduct our meeting, a majority of our outstanding shares of
common stock as of November 10, 2004, must be present in
person or by proxy at the meeting. This is referred to as a
quorum.

ABOUT THE MEETING

How many votes are needed to elect directors?
---------------------------------------------

The eight nominees receiving the highest number of "Yes"
votes will be elected as directors. This number is called a
plurality. Shares not voted, whether by marking "Abstain" on
your proxy card, by broker non-vote (which is described
above), or otherwise, will have no impact on the election of
directors, except that they may be counted for purposes
of establishing a quorum. Unless a properly executed proxy
card is marked "Withhold Authority," the proxy given will be
voted "For" the eight nominees for director.

How many votes are needed to authorize our Board of Directors
in its discretion, to amend our Certificate of Incorporation
to effect a reverse stock split in a ratio of between 1-for-
10 and 1-for-20, without further approval of our
stockholders?
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The amendment of the Certificate of Incorporation to
authorize our Board of Directors in its discretion, to amend
our Certificate of Incorporation to effect a reverse stock
split in a ratio of between 1-for-10 and 1-for-20, without
further approval of our stockholders must receive the "Yes"
vote of a majority of our outstanding shares of common stock
as of November 10, 2004. A properly executed proxy card
marked "Abstain" with respect to these proposals will not be
voted. Accordingly, abstentions will have the effect of a
vote "Against" these proposals.

How many votes are needed to ratify the auditors?
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The proposal to ratify the Company's selection of an
independent auditor must receive the "Yes" vote of a majority
of the shares present at the meeting in order to be approved.
Shares not voted, whether by marking "Abstain" on your proxy
card, by broker non-vote (which is described above), or
otherwise, will have no impact on the ratification of the
Company's independent auditor. Unless a properly executed
proxy card is marked "Withhold Authority," the proxy given
will be voted "For" ratification of the Company's independent
auditor.

Can my shares be voted on matters other than those described
in this proxy statement?
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Yes. The Company has not received proper notice of, and is
not aware of, any business to be transacted at the meeting
other than as indicated in this proxy statement. If any
other item or proposal properly comes before the meeting, the
proxies received will be voted in accordance with the
discretion of the proxy holders.

Are appraisal rights applicable to any of the proposals?
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No, appraisal rights do not apply to any of the proposals.

ELECTION oF DIRECTORS &
DIRECTOR BIOGRAPHIES (Proposal Number 1)

Who are this year's nominees?
-----------------------------
The directors standing for election this year are:

* Dr. Shelby T. Brewer - Chairman
* Bentley J. Blum
* Dr. Frank E. Coffman
* James M. DeAngelis
* Paul E. Hannesson
* O. Mack Jones
* VADM Michael P. Kalleres
* Ambassador William A. Wilson

WE RECOMMEND THAT YOU VOTE FOR THE ELECTION OF THESE
DIRECTORS

How long will this year's nominees serve?
-----------------------------------------

Each director is elected to serve for a term of one year or
until his or her successor is duly elected and qualified.
The Company's officers are elected by, and serve at the
pleasure of, the Board of Directors, subject to the terms of
any employment agreements. Messrs. Hannesson and Blum are
brothers-in-law. No family relationship exists among any
other directors or executive officers of the Company.

Who are the directors who are nominated to serve?
--------------------------------------------------

SHELBY T. BREWER, 68, Director since January 2001,
* Chairman and CEO of the Company since April 2003.
* President of the Company from January 2001 to April 2003.
* Since April 2000, Mr. Brewer served as Chairman and CEO
of Solutions, a wholly owned subsidiary of the Company.
* From 1996 to March 2000, Dr. Brewer was President of S.
Brewer Enterprises, a consulting firm he founded that is
engaged in supporting mergers and acquisitions, arranging
private and public financing, and forming joint ventures
abroad.
* Served as President and CEO of the nuclear power
businesses of ABB Combustion Engineering from 1985 to 1995.
* From 1981 to 1984, he served as Assistant Secretary of
Energy in the Reagan administration, holding the top nuclear
post in the US government.
* Dr. Brewer holds Ph.D. and M.S. degrees in nuclear
engineering from Massachusetts Institute of Technology; he
holds a B.S. degree in mechanical engineering and a B.A. in
humanities from Columbia University.

BENTLEY J. BLUM, 63, Director since March 1996,
* Served as director of Environmental since 1984, Chairman
of the Board of Environmental from 1984 to November 1996 and
is its principal stockholder.
* Currently serves as a director of Separation, Solution
and CFC Technologies.

* Sole stockholder and director of a number of
corporations that hold real estate interests, oil drilling
and other corporate interests.
* Mr. Blum is the brother-in-law of Paul E. Hannesson, a
director of the Company.

DR. FRANK E. COFFMAN 63, Director since June 2002,
* Mr. Coffman also currently serves as Senior Vice
President, Corporate Development Officer of Holmes & Narver,
a construction and engineering firm (August 1997 - Present).
* Mr. Coffman served as Senior Vice President, Government
& Commercial Programs, IT Corporation, from January 1995 to
May 1997 and as Vice President, Government & Commercial
Programs, IT Corporation from 1984 to 1995.
* Mr. Coffman served as Deputy Assistant Secretary for
Waste Management for the Department of Energy ("DOE") from
1981 to 1984, Director of the Office of Advanced Nuclear
Systems, DOE from 1980 to 1981 and as a Director of the
Division of Fusion Development and Technology, DOE from 1978
to 1980.
* Mr. Coffman served as Chief of the Energy Research
Development Agency, Fusion Systems and Applications Studies
Branch from 1970 to 1975.
* Mr. Coffman serves on the Board of Directors of Holmes
and Narver.
* Mr. Coffman holds a Ph.D. in nuclear physics and a MA
degree in plasma physics from Vanderbilt University. Mr.
Coffman holds a BS degree in physics from Western Kentucky
University.

JAMES M. DEANGELIS, 44, Director since June 2002,
* Mr. DeAngelis was appointed Vice President-Finance and
Treasurer of the Company in 1998 and promoted to Chief
Financial and Administrative Officer and Secretary in
December 1998.
* Mr. DeAngelis also served as Senior Vice President-Sales
& Marketing of Separation since July 1996.
* He also served as the President of CFC Technologies
since September 1994.
* He holds a MBA from the American Graduate School of
International Management. He holds B.S. degrees in Biology
and Physiology from the University of Connecticut.

PAUL E. HANNESSON, 62, Director since March 1996,
* Mr. Hannesson served as CEO and President of the Company
from 1996 to January 2001.
* He served as Director and Officer of Environmental from
1996 to July 1998.
* He serves as Chairman of the Board and CEO of
Separation.
* Mr. Hannesson is the brother-in-law of Bentley Blum, a
director of the Company.

O. MACK JONES, 64, Director since October 2003,
* President and C.O.O. of the Company since April 2003.
* Since February 2001, Mr. Jones served as Acting
President of Advanced Sciences, a wholly owned subsidiary of
the Company.
* From April 1998 to February 2001, Mr. Jones also has
served as Vice President of Field Operations since April
1998, managing its field treatability studies and commercial
projects.
* From June 1996 to April 1998, Mr. Jones served as a
consultant to the Company assisting in the commercialization
of the solvated electron technology.
* From 1991 to May 1996, Mr. Jones served as the founder
and principal executive officer of an environmental
consulting company, Florida Vector Services, which provided
both consulting and hands-on remediation services primarily
in TSCA-related areas.
* From 1986 to 1991, Mr. Jones was Vice President-
Operations with Quadrex Environmental Company, managing the
company's field remediation businesses.
* Mr. Jones held several managerial operating positions in
power generation and distribution arenas during his twenty-
six years of service to General Electric Company.
* Mr. Jones holds a degree in mechanical engineering from
Mississippi State University and is registered as a
professional mechanical engineer.

VADM MICHAEL P. KALLERES, 63, Director since June 2002,
* VADM Kalleres currently serves as President of Dare to
Excel Inc., a financial management and consulting firm (1998
to present). He also served as President and Chief Executive
Officer of Global Associates, Ltd., Technology Services Group
from 1994 to 1998.
* VADM Kalleres retired from active duty in September 1994
after 32 years as a naval officer.
* VADM Kalleres was awarded 18 personal/unit
military/combat decorations including the Defense
Distinguished Service Medal (2 awards) and the U.S. Navy
Distinguished Service Medal. He is also a recipient of the
Congressional, Ellis Island Medal of Honor.
* VADM Kalleres is a former member (1994-1998) of the
Defense Science Board, the Naval Studies Board of the
National Academy of Science. He is also a board member of
the Dean's Advisory Council at the Krannert School of
Management-Purdue University, and the National Board of the
Salvation Army.
* VADM Admiral Kalleres was awarded a BS degree in
Industrial Management and Engineering from the Krannert
School of Management-Purdue University, and a MS degree in
Political and International Affairs from George Washington
University.

AMBASSADOR WILLIAM A. WILSON, 89, Director since June 2002,
* Mr. Wilson has been active in ranching and farming in
California and Mexico from 1980 to the present.
* Mr. Wilson was active in real estate development in
California from 1961 through 1980.
* Mr. Wilson served as Chief Engineer of Wilson Oil Tools
from 1938 through 1955 and as Chairman from 1955 to 1961.
* Mr. Wilson served as the Presidential Envoy to the Holy
See from 1980 to 1984 and as Ambassador to the Holy See from
1984 to 1986.
* Mr. Wilson served on the Board of Directors of Jorgensen
Steel Co. from 1973 to 1984 and again from 1986 to 1991. Mr.
Wilson also served on the Board of Directors of Pennzoil
Company from 1983 to 1987.
* Mr. Wilson holds a BA in Mechanical Engineering from
Stanford University and a Doctor of Laws, Honoris Causa from
Assumption College, Barry University, and Pepperdine
University.

BOARD OF DIRECTORS INFORMATION

What is the makeup of the Board of Directors?
---------------------------------------------

Our Board of Directors currently has eight (8) members. All
current directors will be standing for election.

Is the Board currently divided into classes?
--------------------------------------------

No.

What if a nominee is unwilling or unable to serve?
--------------------------------------------------

This is not expected to occur. If it does, proxies will be
voted for a substitute nominated by the Board of Directors or
the Board of Directors may reduce the number of directors.

What happens if a Board member retires between the election
of directors?
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Under terms of our Certificate of Incorporation, any vacancy
on the Board may be filled by a majority vote of the
directors then in office.

How are directors compensated?
------------------------------

Each director who is not an employee of Commodore Applied
Technologies, Inc. receives $375.00 for meetings they attend
other than by telephone and are reimbursed for reasonable
expenses in attending meetings. Directors who are also
employees of Commodore Applied Technologies, Inc. are not
separately compensated for their services as directors.
Directors are eligible to participate in the Company's 1998
Stock Option Plan, as amended. All non employee directors
were granted 310,000 options to purchase the Company's common
stock on November 19, 2003, at an exercise price equal to
1050% of the trading price of the common stock on the date of
award ($0.0285).

What are the committees of the Board?
-------------------------------------

The Company's Board of Directors has (i) an Audit Committee
and (ii) a Compensation, Stock Option and Benefits Committee.
The Company no longer maintains an Executive and Finance
Committee. On August 30, 2000, the Board of Directors
unanimously voted to abolish the Executive & Finance Committee
and determined that the entire Board of Directors would
perform its function. The Company does not have a nominating
committee. The Board believes that the entire Board of
Directors can effectively perform the functions of a
nominating committee.

As of December 31, 2002, and as of July 24, 2003 the Audit
Committee was composed of Michael P. Kalleres as Chairman,
Frank E. Coffman, James M. DeAngelis and William A. Wilson.
The responsibilities of the Audit Committee include
recommending to the Board of Directors the firm of
independent accountants to be retained by the Company,
reviewing with the Company's independent accountants the
scope and results of their audits, reviewing with the
independent accountants and management the Company's
accounting and reporting principles, policies and practices,
as well as the Company's accounting, financial and operating
controls and staff, supervising the Company's policies
relating to business conduct and dealing with conflicts of
interest relating to officers and directors of the Company.

As of December 31, 2003, and as of November 11, 2004, the
Compensation, Stock Option and Benefits Committee, was
composed of William A. Wilson, as Chairman, Shelby T. Brewer,
Frank E. Coffman and Michael P. Kalleres. The Compensation,
Stock Option, and Benefits Committee has responsibility for
establishing and reviewing employee and consultant/advisor
compensation, bonuses and incentive compensation awards,
administering and interpreting the Company's 1998 Stock
Option Plan, and determining the recipients, amounts and
other terms (subject to the requirements of the 1998 Stock
Option

Plan) of options which may be granted under the 1998
Stock Option Plan from time to time and providing guidance to
management in connection with establishing additional benefit
plans.

How often did the Board meet in fiscal 2003?
--------------------------------------------

The Board met four (4) times during 2003. Each director
attended at least 75% of the meetings of the Board and of
the committees of which they were members. The Company's
policy is that the directors are expected to attend the
Annual Meeting of Stockholders unless extenuating
circumstances prevent their attendance. All of the directors
except William Wilson, Michael Kalleres, and Frank Coffman
attended the last Annual Meeting of Stockholders.

BOARD OF DIRECTORS INFORMATION

Our Board of Directors has the following committees:

EXECUTIVE & FINANCE:

On August 30, 2000, the Board of Directors unanimously
voted to abolish the Finance & Executive Committee and
determined that the entire Board of Directors would perform
its function.

AUDIT:

* Oversees auditing procedures
* Receives and accepts the report of independent auditors
* Oversees internal systems of accounting and management
control
* Selection of independent auditors
* Pre-approves all audit and non-audit services to be
performed by the independent auditor
* See Audit Committee Charter - Appendix B, for expanded
list of responsibilities

VADM Michael P. Kalleres - Chair
James M. DeAngelis
Frank E. Coffman, PhD.
Ambassador William A. Wilson

The Audit Committee met two (2) times in 2003.

COMPENSATION, STOCK OPTION & BENEFITS:

* Administers stock incentive plans
* Makes grants of stock awards to employees pursuant to
stock incentive plans
* Reviews and recommends compensation of directors and
executive officers
* Makes grants of stock awards to directors and officers
pursuant to stock incentive plans

Ambassador William A. Wilson - Chair
Shelby T. Brewer, PhD.
Frank E. Coffman, PhD.
VADM Michael P. Kalleres

The Compensation, Stock Option & Benefits Committee met two (2)
times in 2003.

PROPOSED AMMENDMENT RELATING TO A REVERSE SPLIT
OF OUR OUTSTANDING COMMON STOCK (Proposal Number 2)

What am I voting on?
---------------------

Our Board of Directors is seeking approval of an amendment to
our certificate of incorporation, as amended, which we refer
to as our certificate of incorporation, to effect a proposed
reverse split of our issued and outstanding common stock in a
ratio between 1-for-10 and 1-for-20 at any time before the
2005 Annual Meeting of Stockholders. Our Board of Directors
believes that, because it is not possible to predict market
conditions at the time the reverse stock split is to be
effected, it would be in the best interests of the
stockholders if the Board were able to determine, within
specified limits approved in advance by our stockholders, the
appropriate reverse stock split ratio. The proposed reverse
stock split would combine a whole number of outstanding
shares of our common stock into one share of common stock,
thus reducing the number of outstanding shares without any
corresponding change in our par value or market
capitalization. As a result, the number of shares of our
common stock owned by each stockholder would be reduced in
the same proportion as the reduction in the total number of
shares outstanding, so that the percentage of the outstanding
shares owned by each stockholder would remain unchanged
(subject to any adjustments for fractional shares).

If this proposal is approved by our stockholders, our Board
of Directors will subsequently have the authority, in its
sole discretion, to determine whether or not to proceed with
a reverse stock split. If the Board of Directors determines,
based on factors such as prevailing market and other relevant
conditions and circumstances and the trading prices of our
common stock at that time, that a reverse stock split is in
our best interests and in the best interests of our
stockholders, it may, at such time as it deems appropriate,
determine the exact ratio of the reverse stock split and
effect the reverse split approved by our stockholders without
further approval or authorization of our stockholders. The
text of the proposed amendment to our certificate of
incorporation is provided in Appendix A. The text of the
proposed amendment is subject to modification to include such
changes as may be required by the office of the secretary of
state of Delaware or as our Board of Directors deems
necessary and advisable to effect the reverse stock split.

Our Board of Directors reserves the right, even after
stockholder approval, to forego or postpone the filing of the
amendment to our certificate of incorporation if it determines
such action is not in our best interests or the best interests
of our stockholders. If the reverse stock split adopted by the
stockholders is not subsequently implemented by our Board of
Directors and effected by the 2005 Annual Meeting of
Stockholders, this proposal will be deemed abandoned, without
any further effect. In such case, our Board of Directors will
again seek stockholder approval at a future date for a reverse
stock split if it deems a reverse stock split to be advisable
at that time. If the amendment to our certificate of
incorporation is adopted and filed with the Delaware secretary
of state, there will be no change in the number of authorized
shares of our common stock.

What are the Reasons for the Board's Recommendation
---------------------------------------------------

Our Board of Directors has determined that it would be
advisable to effect a reverse stock split that would reduce
the number of shares of our outstanding common stock. The
primary reason for the reverse split stock is to increase the
trading price of our common stock on the Over the Counter
Bulletin Board on a per share basis, which we believe will
have several benefits to our company and our stockholders.

Our Board of Directors believes that the current low per share
market price of our common stock, which it believes is due in
part to the overall weakness in the stock market, has had a
negative effect on the marketability of our existing shares.
Our Board of Directors believes that there are several reasons
for these effects. For example, many institutional investors
have internal policies preventing the purchase of low-priced
stocks. Additionally, analysts at many brokerage firms are
reluctant to recommend lower-priced stocks to their clients or
monitor the activity of lower-priced stocks. Similarly, a
variety of policies and practices of broker-dealers discourage
individual brokers within those firms from dealing in low-
priced stocks. Accordingly, some brokers

are reluctant to or will not recommend that their clients
purchase low-priced stocks. Also, because the brokers'
commissions on low-priced stocks generally represent a
higher percentage of the stock price than commissions on
higher priced stocks, the current low share price of the
our common stock can result in investors paying transaction
costs (commissions, markups or markdowns) that are a higher
percentage of their total share value than would be the case
if the share price of our common stock were substantially higher.
We believe that these factors limit the purchase of our
common stock by institutional and individual investors.

Our Board of Directors believes that by increasing the per
share market price of our common stock as a result of the
reverse stock split, we may encourage greater interest in our
common stock and enhance the acceptability and marketability
of our common stock to the financial community and investing
public as well as promote greater liquidity for our
stockholders. In addition, we have 128,631,767 outstanding
shares of common stock and 1,647 outstanding shares of
preferred stock, which are convertible into an aggregate of
187,723,539 shares of common stock, which is more than other
engineering and environmental waste treatment companies that
are comparable in size to us. A reverse stock split would
reduce the number of shares outstanding to a number that is
more comparable with those of similar engineering and
environmental waste treatment companies and more appropriate
to the size and scope of our current business.

What are the Potential Disadvantages to the Reverse Stock Split?
----------------------------------------------------------------

Reduced Market Capitalization. While we expect that the
reduction in our outstanding shares of common stock will
increase the market price of our common stock, we cannot
assure you that the reverse stock split will increase the
market price of our common stock by a multiple equal to the
number of pre-split shares in the reverse split ratio between
1-for-10 and 1-for-20 authorized by our Board of Directors, or
result in any permanent increase in the market price, which
can be dependent upon many factors, including our business and
financial performance and prospects. Should the market price
decline after the reverse stock split, the percentage decline
may be greater, due to the smaller number of shares
outstanding, than it would have been prior to the reverse
stock split. In some cases the stock price of companies that
have effected reverse stock splits has subsequently declined
back to pre-reverse split levels. Accordingly, we cannot
assure you that the market price of our common stock
immediately after the effective date of the proposed reverse
stock split will be maintained for any period of time or that
the ratio of post- and pre-split shares will remain the same
after the reverse stock split is effected, or that the reverse
stock split will not have an adverse effect on our stock price
due to the reduced number of shares outstanding after the
reverse stock split. A reverse stock split is often viewed
negatively by the market and, consequently, can lead to a
decrease in our overall market capitalization. If the per
share price does not increase proportionately as a result of
the reverse stock split, then our overall market
capitalization will be reduced.

Increased Transaction Costs. The number of shares held by
each individual stockholder will be reduced if the reverse
stock split is implemented. This will increase the number of
stockholders who hold less than a "round lot," or 100 shares.
Typically, the transaction costs to stockholders selling "odd
lots" are higher on a per share basis. Consequently, the
reverse stock split could increase the transaction costs to
existing stockholders in the event they wish to sell all or a
portion of their position.

Liquidity. Although our Board of Directors believes that
the decrease in the number of shares of our common stock
outstanding as a consequence of the reverse stock split and
the anticipated increase in the price of our common stock
could encourage interest in our common stock and possibly
promote greater liquidity for our stockholders, such liquidity
could also be adversely affected by the reduced number of
shares outstanding after the reverse stock split.

Authorized Shares; Future Financings. Upon effectiveness of
the reverse stock split, the number of authorized shares of
common stock that are not issued or outstanding, as of
November 11, 2004, would increase from approximately
167,653,947 shares to as many as approximately
286,765,395 shares assuming a 1-for-10 reverse stock
split. As a result, we will have an increased number of
authorized but unissued shares of common stock. Authorized
but unissued shares will be available for issuance, and we
may issue such shares in financings or otherwise. If we
issue additional shares, the ownership interests of our
current stockholders may be diluted.

What is the Effect on Fractional Shares?
----------------------------------------

If any reverse split ratio is authorized by our Board of
Directors, implementation of a reverse stock split would result
in some stockholders owning a fractional share of common stock.
For example, if a 1-for-10 reverse stock split were to be
implemented, the shares owned by a stockholder with 99 shares
would be converted into 9.9 shares. To avoid such a result,
stockholders that would otherwise be entitled to receive a
fractional share of our common stock as a consequence of the
reverse stock split will receive, instead, at the discretion of
our Board of Directors, either (i) a cash payment from us in
U.S. dollars equal to the value of that fractional share,
determined on the basis of the average closing sales price of
our common stock on the Over the Counter Bulletin Board for the
20 trading days immediately preceding the effective date of the
reverse stock split (as adjusted for that reverse stock split)
or (ii) a cash payment from the transfer agent in an amount
equal to such stockholder's pro rata share of the total
proceeds from the sale, by the transfer agent on behalf of
those holders who would otherwise be entitled to receive a
fractional share, of an aggregate of all fractional shares in
the open market at the then prevailing prices. No transaction
costs will be assessed in connection with the sale of the
aggregated shares. You will not be entitled to receive interest
for the period between the effective time of the reverse stock
split and the date you receive your payment for cashed-out
shares.

If any stockholder owns, in total, fewer than the number of our
shares to be converted into one share as a result of the
reverse stock split, that stockholder's shares would be
converted into a fractional share of stock and that stockholder
would receive only cash in place of the fractional share. For
example, if a 1-for-10 reverse stock split is implemented then
stockholders with fewer than four shares would receive only
cash. As a result, the interest of such stockholders in our
company would be terminated and such stockholders would have no
right to share in our assets or future growth. Based on this
example, each stockholder that owns ten shares or more of
our common stock prior to the reverse stock split will continue
to own one or more shares after the reverse stock split and
would continue to share in our assets and future growth as a
stockholder, and any stockholder that owns fewer than ten
shares would receive only cash in place of the fractional share
resulting from the reverse stock split. Assuming the reverse
split under the proposed amendment to our certificate of
incorporation is a 1-for-10 reverse stock split, a stockholder
could assure his or her continued ownership of shares of our
stock after the reverse split by purchasing a number of shares
sufficient to increase the total number of shares that he or
she owns to ten or more.

What is the Effect of Reverse Stock Split on Options?
-----------------------------------------------------

The number of shares subject to outstanding options to purchase
shares of our common stock also would automatically be reduced
in the same ratio as the reduction in the outstanding shares.
Correspondingly, the per share exercise price of those options
will be increased in direct proportion to the reverse stock
split ratio, so that the aggregate dollar amount payable for
the purchase of the shares subject to the options will remain
unchanged. Assuming that an optionee holds options to purchase
1,000 shares at an exercise price of $0.07 per share, on the
effectiveness of a 1-for-10 reverse stock split, the number of
shares subject to that option would be reduced to 100 shares
and the exercise price would be proportionately increased to
$0.70 per share.

Why is the Effect of Reverse Stock Split on Warrants?
------------------------------------------------------

The agreements governing the outstanding warrants to purchase
shares of our common stock include provisions requiring
adjustments to both the number of shares issuable upon exercise
of such warrants, and the exercise prices of such warrants, in
the event of a reverse stock split. Assuming that a warrant
holder holds a warrant to purchase 10,000 shares of our common
stock at an exercise price of $0.07 per share, on the
effectiveness of a 1-for-10 reverse stock split, the number of
shares subject to that warrant would be reduced to 1,000 shares
and the exercise price would be proportionately increased to
$0.70 per share.

What is the Effect of Reverse Stock Split on Series E
Convertible Preferred Stock?
----------------------------------------------------------------

On November 4, 1999, the Company completed a $2.5 million
private placement financing with The Shaar Fund Ltd. The
Company issued to The Shaar Fund 335,000 shares of a newly
authorized Series E Convertible Preferred Stock (the "Series E
Convertible"), par value $0.001 per share, each such share of
Series E Convertible having a stated value of $10.00 per
share.

The holder of our Series E Convertible may convert into the
Company's common stock, at any time after April 30, 2000, for
a conversion price equal to the arithmetic mean of the closing
prices of the Company's common stock as reported on the Over
the Counter Bulletin Board for the ten trading days
immediately preceding the date of conversion. The Shaar Fund
currently holds 95,500 shares of Series E Convertible. The
conversion of the Series E Convertible is unaffected by the
Reverse Stock Split.

What is the Effect of Reverse Stock Split on Series F
Convertible Preferred Stock?
--------------------------------------------------------------

On March 20, 2000, the Company completed a $2.0 million
private placement financing with The Shaar Fund Ltd. The
Company issued to The Shaar Fund 226,000 shares of Series F
Convertible Preferred Stock (the "Series F Convertible"), par
value $0.001 per share, each such share of Series F
Convertible having a stated value of $10.00 per share.

The holder of our Series F Convertible may convert into the
Company's common stock, at any time after September 31, 2000,
for a conversion price equal to the arithmetic mean of the
closing prices of the Company's common stock as reported on
the Over the Counter Bulletin Board for the ten trading days
immediately preceding the date of conversion. The Shaar Fund
currently holds 118,200 shares of Series F Convertible. The
conversion of the Series F Convertible is unaffected by the
Reverse Stock Split.

What is the Effect of Reverse Stock Split on Series H
Convertible Preferred Stock?
--------------------------------------------------------------

The Company issued 800,000 shares of Series H Preferred stock
(the "Series H Preferred"), par value $0.001 per share, each
such share of Series H Preferred having a stated value of
$1.00 per share, to DRM, Russell and Speciale as part of the
DRM Settlement Agreement as of September 30, 2002 for
satisfaction of the remaining liabilities relating to the
purchase and working capital of DRM.

The certificate of designations governing the rights of our
outstanding shares of Series H Preferred provides for
adjustments to the conversion amount of the outstanding
Series H Preferred stock in the event of a reverse stock
split. Assuming that a 1-for-10 reverse stock split is
implemented and a stockholder holds one share of our Series H
Preferred, with an accreted value of $1.00 per share and a
minimum conversion price of $0.40 per share, before the
effectiveness of the reverse stock split, this share of
Series H Preferred would be convertible into 2.5 shares of
common stock. On the effectiveness of the reverse stock split,
the conversion price of the Series H Preferred would be
proportionately increased to $4.00 per share. As a result,
these 800,000 shares of Series H Preferred would be
convertible into 200,000 shares of common stock.

Implementation and Effect of the Reverse Stock Split
----------------------------------------------------

If approved by our stockholders at the Special Meeting, and if
our Board of Directors determines that effecting a reverse
stock split is in our best interests and the best interests of
our stockholders, the Board will, in its sole discretion,
select the reverse stock split in a ratio between 1-for-10 and
1-for-20, based on market and other relevant conditions and
circumstances and the trading prices of our common stock at
that time, and determine the method of dealing with fractional
shares. Following such determinations, our Board of Directors
will effect the reverse stock split by directing management to
file the amendment to our certificate of incorporation with
the secretary of state of Delaware at such time as the Board
has determined is appropriate to effect the reverse stock
split. The reverse stock split will become effective at the
time specified in the amendment to our certificate of
incorporation after its filing with the secretary of state of
Delaware, which we refer to as the effective time.

We estimate that, following the reverse stock split, we would
have approximately the same number of stockholders and, except
for the effect of cash payments for fractional shares as
described above, the completion of the reverse stock split
would not affect any stockholder's proportionate equity
interest in our company. By way of example, a stockholder who
owns a number of shares that prior to the reverse stock split
represented one-half of a percent of the outstanding shares of
the company would continue to own one-half of a percent of our
outstanding shares after the reverse stock split. The reverse
stock split also will not affect the number of shares of
common stock that our Board of Directors is authorized to
issue under our certificate of incorporation, which will
remain unchanged at 300,000,000 shares. However, it will have
the effect of increasing the number of shares available for
future issuance because of the reduction in the number of
shares that will be outstanding after giving effect to the
reverse stock split. Also, because the reverse stock split
would result in fewer shares of our common stock outstanding,
the per share income/(loss), per share book value and other
"per share" calculations would be increased.

Even if the reverse stock split is approved by the
Stockholders, our Board of Directors has discretion to decline
to carry out the reverse split if it determines for any reason
that the reverse split will not be in our best interests. If
the reverse split is not implemented on or before the 2005
Annual Meeting of Stockholders, the Board will either
resolicit stockholder approval or abandon the reverse stock
split.

Exchange of Stock Certificates and Payment for Fractional Shares
----------------------------------------------------------------

Exchange of Stock Certificates. Promptly after the
effective time, you will be notified that the reverse stock
split has been effected. Our stock transfer agent, Registrar
and Transfer Company, whom we refer to as the exchange agent,
will implement the exchange of stock certificates representing
outstanding shares of common stock. You will be asked to
surrender to the exchange agent certificates representing your
pre-split shares in exchange for certificates representing
your post-split shares in accordance with the procedures to be
set forth in a letter of transmittal which we will send to
you. You will not receive a new stock certificate representing
your post-split shares until you surrender your outstanding
certificate(s) representing your pre-split shares, together
with the properly completed and executed letter of transmittal
to the exchange agent. We will not issue scrip or fractional
shares, or certificates for fractional shares, in connection
with the reverse stock split. For example, if a ratio of 1-for-
10 is authorized by our Board of Directors, should you be
entitled to receive fractional shares because you hold a
number of shares not evenly divisible by the number four, you
will be entitled, upon surrender to the exchange agent of
certificates representing such shares, to a cash payment,
without interest, in lieu of such fractional shares. The
ownership of a fractional share will not give you any voting,
dividend or other rights, except the right to receive payment
for the fractional share as described above. PLEASE DO NOT
DESTROY ANY STOCK CERTIFICATE OR SUBMIT ANY OF YOUR
CERTIFICATES UNTIL YOU ARE REQUESTED TO DO SO.

Effect of Failure to Exchange Stock Certificates. Upon the
filing of the amendment to our certificate of incorporation
with the Delaware secretary of state, each certificate
representing shares of our common stock outstanding prior to
the that time will, until surrendered and exchanged as
described above, be deemed, for all corporate purposes, to
evidence ownership of the whole number of shares of our common
stock, and the right to receive, from us or the transfer
agent, the amount of cash for any fractional shares, into
which the shares of our common stock evidenced by such
certificate have been converted by the reverse stock split.
However, a holder of such unexchanged certificates will not be
entitled to receive any dividends or other distributions
payable by us after the effective date, until the old
certificates have been surrendered. Such dividends and
distributions, if any, will be accumulated, and at the time of
surrender of the old certificates, all such unpaid dividends
or distributions will be paid without interest.

Are There Appraisal Rights?
---------------------------

Under the Delaware General Corporation Law and our certificate
of incorporation and amended bylaws, you are not entitled to
appraisal rights with respect to the reverse stock split.

What are the Federal Income Tax Consequences?
---------------------------------------------

The following description of the material federal income tax
consequences of the reverse stock split is based on the
Internal Revenue Code, applicable Treasury Regulations
promulgated under the Code, judicial authority and current
administrative rulings and practices as in effect on the date
of this proxy statement. Changes to the laws could alter the
tax consequences described below, possibly with retroactive
effect. We have not sought and will not seek an opinion of
counsel or a ruling from the Internal Revenue Service
regarding the federal income tax consequences of the proposed
reverse stock split. This discussion is for general
information only and does not discuss the tax consequences
that may apply to special classes of taxpayers (e.g., non-
resident aliens, broker/dealers or insurance companies). The
state and local tax consequences of the reverse stock split
may vary significantly as to each stockholder, depending upon
the jurisdiction in which such stockholder resides. We urge
stockholders to consult their own tax advisors to determine
the particular consequences to them.

In general, the federal income tax consequences of the reverse
stock split will vary among stockholders depending upon whether
they receive cash for fractional shares or solely a reduced
number of shares of our common stock in exchange for their old
shares of our common stock. We believe that because the reverse
stock split is not part of a plan to increase periodically a
stockholder's proportionate interest in our assets or earnings
and profits, the reverse stock split will likely have the
following federal income tax effects.

A stockholder who receives solely a reduced number of shares
of our common stock will not recognize gain or loss. In the
aggregate, such a stockholder's basis in the reduced number of
shares of our common stock will equal the stockholder's basis
in its old shares of common stock and the holding period of the
common stock received after the reverse stock split will
include the holding period of the common stock held prior to
the reverse stock split exchanged therefore. A stockholder who
receives cash in lieu of a fractional share as a result of the
reverse stock split will generally be treated as having
received the payment as a distribution in redemption of the
fractional share, as provided in section 302(a) of the Code,
which distribution will be taxed as either a distribution under
Section 301 of the Code or an exchange to such stockholder,
depending on that stockholder's particular facts and
circumstances. Generally, if such distribution is treated as an
exchange to a stockholder receiving such a payment, the
stockholder should recognize gain or loss equal to the
difference, if any, between the amount of cash received and the
stockholder's basis in the fractional share. If the fractional
share was held by the stockholder as a capital asset then the
gain or loss will be taxed as capital gain or loss, and will be
long-term capital gain or loss if the stockholder's holding
period in the fractional share is greater than one year. In the
aggregate, such a stockholder's basis in the reduced number of
shares of our common stock will equal the stockholder's basis
in its old shares of common stock decreased by the basis
allocated to the fractional share for which such stockholder is
entitled to receive cash and the holding period of the common
stock received after the reverse stock split will include the
holding period of the common stock held prior to the reverse
stock split exchanged therefore.

We will not recognize any gain or loss as a result of the
reverse stock split.

_____________________________

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO AUTHORIZE OUR BOARD OF DIRECTORS TO AMEND OUR CERTIFICATE
OF INCORPORATION TO EFFECT A REVERSE SPLIT OF OUR OUTSTANDING
COMMON STOCK IN A RATIO BETWEEN 1-FOR-10 AND 1-FOR-20 WITHOUT
FURTHER APPROVAL OF OUR STOCKHOLDERS, UPON A DETERMINATION BY
OUR BOARD THAT SUCH A REVERSE STOCK SPLIT IS IN OUR BEST
INTERESTS AND IN THE BEST INTERESTS OF OUR STOCKHOLDERS.

RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(Proposal 3)
-------------------------------------------------------

What am I voting on?
--------------------

The board of directors recommends that stockholders vote
"for" ratification of the appointment of Tanner + Co. as the
Company's independent accountants for fiscal 2004.

What services does the independent accountant provide?
------------------------------------------------------

The Audit Committee of the Company has appointed Tanner + Co.
as the Company's independent accountants for the fiscal year
ending December 31, 2004. Tanner + Co. has served as the
Company's independent accountants since 1999. Services
provided to the Company and its subsidiaries by Tanner + Co.
in fiscal 2003 included the examination of the Company's
consolidated financial statements, limited reviews of
quarterly reports, services related to filings with the
Securities and Exchange Commission and consultations on
various tax matters.

Will the independent auditors be present at the Annual
Meeting?
--------------------------------------------------------------

A representative(s) of Tanner + Co. will be present at the
annual meeting to respond to appropriate questions and to
make such statements as they may desire.

How many votes are necessary to ratify Tanner + Co. as the
Company's independent accountants for fiscal 2004?
-------------------------------------------------------------

Ratification of the appointment of Tanner + Co. as the
Company's independent accountants for fiscal 2004 will
require the affirmative vote of a majority of the shares of
Common Stock represented in person or by proxy and entitled
to vote at the annual meeting. In the event stockholders do
not ratify the appointment of Tanner + Co., the appointment
will be reconsidered by the Audit Committee and the Board of
Directors.

What fees did the Company pay to Tanner + Co. for services
provided in fiscal year 2003?
-------------------------------------------------------------

What fees were paid to the Company's Principal Accountant?
----------------------------------------------------------

Audit Fees: We were billed a total of $41,273, in the
aggregate, by Tanner + Co., for the audit of the Company's
and its subsidiaries' annual financial statements for the
fiscal 2003 and the reviews of the interim financial
statements included in the Company's Forms 10-Q filed during
the fiscal 2003; and

Financial Information Systems Design and Implementation Fees:
There were no fees billed by Tanner + Co. for services
rendered in connection with financial information systems
design and implementation services described in Paragraph
(c)(4)(ii) of Rule 2-01 of Regulation S-X. during the fiscal
year ended December 31, 2003.

All Other Fees: $19,831, in the aggregate, for all services
other than those covered above under "Audit Fees". "All Other
Fees" consist primarily of tax compliance and consulting
services, benefit plan audits, assistance in the assessment
of impending accounting pronouncements, and due diligence
services for the fiscal year 2001. Tax services and the
associated billings were $11,100 for the fiscal year 2003.

Principal Accountant Independence: The Audit Committee has
determined that the provision of all non-audit services
performed by the principal accountant were compatible with
maintaining their independence.

_____________________

WE RECOMMEND THAT YOU VOTE FOR THE RATIFICATION OF
THIS PROPOSAL

EXECUTIVE COMPENSATION
-----------------------

The following table sets forth the amount of all compensation
paid by the Company and/or its affiliates and allocated to
the Company's operations for services rendered during each of
2003, 2002 and 2001 to all persons serving as the Company's
Chief Executive Officer during 2003, 2002, and 2001 to each
of the Company's four most highly compensated executive
officers other than the Chief Executive Officer whose total
salary and bonus compensation exceeded $100,000 during any
such year.

Summary Compensation Table

Annual Compensation Long-Term Compensation
------------------- ----------------------

Other Securities
Annual Restrited Under- LTIP All Other
Compen- Stock Lying Pay- Compen-
Name and Principal Salary Bonus sation Award(s) Options outs sation
Position Year ($) ($) ($) ($) (#) ($) ($)
(a) (b) (c) (d) (e) (g) (g) (h) (i)
------------------ ---- ------ ----- ------- ---------- --------- ----- ---------

Shelby T. Brewer, Ph.D.(1) 2003 -0-(2) -0- -0- -0- 39,450,846(3) -0- 30,000(4)
Chief Executive Officer 2002 69,677(2) -0- -0- -0- 2,865,200(3) -0- 30,000(4)
2001 90,137(2) -0- -0- -0- 200,000(3) -0- -0-

Paul E. Hannesson 2003 -0- -0- -0- -0- 4,818,075(6) -0- -0-
Former Chief Executive 2002 -0- -0- -0- -0- 1,181,925(6) -0- -0-
Officer 2001 77,242(5) -0- -0- -0- -0- -0- -0-

1
James M. DeAngelis(7) 2003 12,480(8) -0- -0- -0- 20,641,812(9) -0- -0-
Senior Vice President & 2002 114,175(8) -0- -0- -0- 1,841,688(9) -0- -0-
Chief Financial Officer 2001 164,368(8) -0- -0- -0- -0- -0- -0-

William E. Ingram 2003 -0- -0- -0- -0- -0- -0- -0-
Former Vice President & 2002 -0- -0- -0- -0- -0- -0- -0-
Controller 2001 20,645(10) -0- -0- -0- -0- -0- -0-

O. Mack Jones(110) 2003 103,938(121) -0- -0- -0- 10,240,625(13) -0- -0-
President & 2002 110,019(121) -0- -0- -0- 1,759,37(13) -0- -0-

Annual Compensation Long-Term Compensation
------------------- ----------------------

Peter E Harrod 2003 -0- -0- -0- -0- -0- -0- -0-
Former President 2002 -0- -0- -0- -0- -0- -0- -0-
Advanced Sciences 2001 49,460(14) -0- -0- -0- 200,000(15) -0- -0-

(1) Mr. Brewer served as Chief Executive Officer and
President of Solutions and a director of the Company since
April 2000. Mr. Brewer assumed the positions of Chairman,
Chief Executive Officer and President of the Company from
January 2001 through October 2003 and continues to serves as
Chief Executive Officer and a director since October 2003 to
present.

(2) Represents the amount of Mr. Brewer's base salary paid
by the Company. Mr. Brewer's base salary for 2003 from
January through April was $250,000, and from May through
December was $285,000 of which $271,000 was originally
deferred until December 31, 2003, and remains unpaid as of
November 11, 2004. Mr. Brewer's base salary
for 2002 was $250,000 of which $184,231 was originally
deferred until December 31, 2002, and remains unpaid as of
November 11, 2004. Mr. Brewer's base salary
for 2001was $250,000 of which $160,000 annually originally
deferred until December 31, 2001, and remains unpaid as of
November 11, 2004. Mr. Brewer's base salary
for 2000 was $90,000.

(3) Represents shares of common stock underlying stock
options granted to Mr. Brewer by the Company in his capacity
as an officer and director of the Company. Mr. Brewer
canceled prior options for 840,000 shares of common stock
voluntarily on October 2, 2002.

(4) Represents a $1,000,000 Life Insurance Policy in the
name of Shelby T. Brewer paid on behalf of Mr. Brewer by the
Company.

(5) Represents the amount of Mr. Hannesson's base salary
paid by the Company. The Company previously recorded a
liability for $344,000 representing amounts owed to Mr.
Hannesson under his employment contract, but deferred per
agreement. The deferred salary amount was used by Mr.
Hannesson to offset a portion of the exercise price and taxes
with respect to Mr. Hannesson's stock option exercise of
830,000 stock options in July 2000. See "Certain
Relationships and Related Transactions-Services Agreement."
Mr. Hannesson was replaced as Chief Executive Officer by
Shelby T. Brewer effective January 15, 2001. Mr. Hannesson
remains a director of the Company.

(6) Represents shares of common stock underlying stock
options granted to Mr. Hannesson by the Company in his
capacity as an officer and director of the Company. Mr.
Hannesson canceled prior options for 2,147,500 shares of
common stock voluntarily on October 2, 2002.

(7) Mr. DeAngelis served as Vice President and Treasurer of
the Company from July 1998 to December 1999 and as Sr. Vice
President, Chief Financial and Administrative Officer,
Treasurer and Secretary from December 1999 to present. Mr.
DeAngelis has served as a director of the Company since June
2002.

(8) Represents the amount of Mr. DeAngelis' base salary paid
by the Company. Mr. DeAngelis' total base salary for 2003
from January through April was $165,000, and from May through
December was $225,000 of which $194,520 was originally
deferred until December 31, 2003, and remains unpaid as of
November 11, 2004. Mr.

DeAngelis' total base salary for 2002 was $165,000 of which
$55,985 was originally deferred until December 31, 2002,
and remains unpaid as of November 11, 2004. Mr. DeAngelis'
total base salary for 2001 was $165,000 of which $33,000
was originally deferred until December 31, 2002, and remains
unpaid as of November 11, 2004. Mr. DeAngelis' base
salary for 2000 and 1999 was $165,000 and $145,000 respectively.

(9) Represents shares of common stock underlying stock
options granted to Mr. DeAngelis by the Company in his
capacity as an officer of the Company. Mr. DeAngelis
canceled prior options for 681,250 shares of common stock
voluntarily on October 2, 2002.

(10) Represents the amount of Mr. Ingram's base salary paid
by the Company. Mr. Ingram's total base salary for 2001,
2000 and 1999 was $150,000. Mr. Ingram resigned his
management position effective January 12, 2001.

(11) Mr. Jones served as Vice President and Field Operations
Manager of Solutions from April 1998 to January 2001 and as
President of Advanced Sciences from February 2001 to present,
and President and Chief Operating Officer from April 2003 to
present. Mr. Jones has served as a director of the Company
since October 2003.

(12) Represents the amount of Mr. Jones' base salary paid by
the Company. Mr. Jones' total base salary for 2003 from
January through April was $165,000, and from May through
December was $250,000 of which $115,485 originally deferred
until December 31, 2003, and remains unpaid as of November
11, 2004. Mr. Jones' total base salary for 2002 was
$165,000 of which $60,581 originally deferred until
December 31, 2002, and remains unpaid as of November
11, 2004. Mr. Jones' total base salary for 2001 was
$165,000 of which $33,000 originally deferred until
December 31, 2001, and remains unpaid as of November
11, 2004. Mr. Jones' base salary for 2000 and 1999 was
$150,000.

(13) Represents shares of common stock underlying stock
options granted to Mr. Jones the Company in his capacity as
an officer of the Company. Mr. Jones canceled prior options
for 437,500 shares of common stock voluntarily on October 2,
2002.

(14) Represents the amount of Mr. Harrod's base salary paid
by the Company, through its wholly owned subsidiary, Advanced
Sciences. Mr. Harrod's total base salary for 1997, 1998 and
1999 was $150,000, $170,000, and $190,000 respectively. Mr.
Harrod resigned his management position effective February
28, 2001.

(15) Represents shares of common stock underlying stock
options granted to Mr. Harrod by the Company in his capacity
as an officer of the Company. Mr. Harrod resigned his
management position effective February 28, 2001.

STOCK OPTIONS

The following table sets forth certain information concerning
options granted during the year ended December 31, 2003 to
the individuals listed in the Summary Compensation Table
pursuant to the Company's 1998 Stock Option Plan, as amended,
(the "1998 Plan") and to certain individuals outside of the
1998 Plan. The Company has no outstanding stock appreciation
rights and granted no stock appreciation rights during the
year ended December 31, 2003.

Option Grants in Last Fiscal Year

Individual Grants
--------------------------------------

Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of
Securities Total Options Exercise of Stock Price Appreciation
Underlying Granted to Base for Option Term(6)
Options Employees in Price Expiration -------------------------
Name Granted (#) Fiscal Year(5) ($/Share) Date 5%($) 10%($)
(a) (b) (c) (d) (e) (f) (g)
-----------------------------------------------------------------------------------------------------

Shelby T. Brewer 39,450,846(1) 51.18% 0.0285 12/14/08 -0- -0-
James M. DeAngelis 20,641,812(2) 26.78% 0.0285 12/14/08 -0- -0-
O. Mack Jones 10,240,625(3) 13.29% 0.0285 12/14/08 -0- -0-
Paul E. Hannesson 4,818,075(4) 6.25% 0.0285 12/14/08 -0- -0-

(1) Options to purchase 39,450,846 shares of common stock
were issued on November 19, 2003 outside of the 1998 Plan of
which 100% vested upon issuance.

(2) Options to purchase 20,641,812 shares of common stock
were issued on November 19, 2003 outside of the 1998 Plan of
which 100% vested upon issuance.

(3) Options to purchase 10,240,625 shares of common stock
were issued on November 19, 2003 outside of the 1998 Plan of
which 100% vested upon issuance.

(4) Options to purchase 4,818,075 shares of common stock
were issued on November 19, 2003 outside of the 1998 Plan of
which 100% vested upon issuance.

(5) Percentages based on 77,081,358 stock options granted
(under the 1998 Plan and outside the 1998 Plan) during the
year ended December 31, 2003.

(6) The closing price for the Company's common stock on
December 31, 2003 was $0.013. The closing price is used for
all the subsequent stock appreciation calculations.

The following table sets forth certain information
concerning the exercise of options and the value of
unexercised options held under the 1998 Plan and outside
of the 1998 Plan at December 31, 2003 by the individuals
listed in the Summary Compensation Table.

Aggregated Option Exercises In Last Fiscal Year and Fiscal
Year-End Option Values

Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares Value at Fiscal Year-End(#) at Fiscal Year-End($)
Acquired on Realize Exercisable/ Exercisable/
Name Exercise(#) ($)(1) Un-exercisable Un-exercisable
(a) (b) (c) (d) (e)
-------------- ------------ -------- ---------------------- ---------------------

Shelby T. Brewer -0- -0- 40,316,046/40,316,046 -0- /-0-

Paul E. Hannesson -0- -0- 6,000,000/6,000,000 -0- /-0-

James M. DeAngelis -0- -0- 21,483,500/21,483,500 -0- / -0-

O. Mack Jones -0- -0- 12,000,000/12,000,000 -0- / -0-

(1)Represents the difference between the last reported
sale price of the Common Stock on December 31, 2003
($0.013), and the exercise prices of the options
(ranging from $0.0285 to $0.07) multiplied by the
applicable number of options exercised.

(2)Represents the difference between the exercise
price and the closing price on December 31, 2003,
multiplied by the applicable number of securities.

Securities Authorized for Issuance Under Equity Compensation
Plans

The following table reflects the number of shares of our
common stock that, as of November 11, 2004, were outstanding
and available for issuance under compensation plans that have
previously been approved by our stockholders as well as
compensation plans that have not previously been approved by
our stockholders.

Number of Securities
Remaining Available
Number of Weighted- for
Securities to Average Future Issuance
be Exercise Price Under
Issued Upon of Equity Compensation
Exercise of Outstanding Plans (Excluding
Outstanding Options, Securities Reflected
Options, Warrants and in Column (a))
Warrants and Rights ($)
Rights

Plan Category (a) (b) (c)
Equity Compensation
Plans Approved by
Security Holders (1) 13,461,458 0.06 4,538,542

Equity Compensation
Plans not Approved
by Security Holders
(2) 75,151,358 0.03 -0-

Total.......... 88,612,816 0.05 4,538,542
___________________________

1. Consists of options issuable under the 1998 Stock Option
Plan, as amended.

2. Includes options to purchase a total of 75,151,358
shares issued to Mr. Brewer, Mr. DeAngelis, Mr. Jones, and
Mr. Hannesson in November 2003 outside of the 1998 Stock
Option Plan, as amended.

The following is a brief description of the material features
of the equity compensation plans not approved by our
stockholders that are reflected in the chart above.

On December 14, 1998, our Board of Directors approved the
adoption of the 1998 Stock Option Plan, as amended. The
purpose of this plan is to advance the interests of our
stockholders by enhancing our ability to attract, retain and
motivate persons who make important contributions to the
Company by providing them with equity ownership opportunities
and performance-based incentives that better align their
interests with those of our stockholders. A total of
15,000,000 shares of our common stock, subject to adjustment
in the event of a stock split or similar event, is issuable
to our consultants, advisors and employees, officers and
directors. A total of 10,000,000 shares of our common stock
have been duly registered under the Company's S-8 filings
under the Plan. The remaining 5,000,000 shares have been
approved by the directors for issuance under the Plan but
have yet to be registered under an S-8 filing. The plan
provides for the granting of non-qualified options.

Ten Year Option Repricings

The following table sets forth information regarding
options held by the Commodore Named Executive Officers
and Directors that were voluntarily surrendered by such
persons, after which the Company issued new options to
such persons at current fair market value. The
Compensation Committee approved these transactions in
order to restore the incentive value of such options.

Number of Length of
Securities Originial
Underlying Exercise Price of Option Term
Options Market Price of Stock Option at Time of New At Date of
Repriced or at Time of Repricing Repricing or Exercise Repricing or
Date Amended(#) or Amendment ($)(1) Amendment($) Price($) Amendment
---- ------------ -------------------- ----------------- -------- ------------
Shelby T. Brewer 10/02/02 200,000 $0.07 $0.288 (2) 12/14/08
10/02/02 500,000 $0.07 $1.00 (2) 12/14/08
10/02/02 140,000 $0.07 $1.06 (2) 12/14/08
James M. DeAngelis 10/02/02 181,250 $0.07 $0.4375 (3) 12/14/08
10/02/02 300,000 $0.07 $0.288 (3) 12/14/08
10/02/02 200,000 $0.07 $0.688 (3) 12/14/08
O. Mack Jones 10/02/02 187,500 $0.07 $0.4375 (4) 12/14/08
10/02/02 100,000 $0.07 $0.288 (4) 12/14/08
10/02/02 150,000 $0.07 $0.688 (4) 12/14/08
Paul E. Hannesson 10/02/02 147,500 $0.07 $0.4375 (5) 12/14/08
10/02/02 1,000,000 $0.07 $0.50 (5) 12/14/08
Bentley J. Blum 10/02/02 70,000 $0.07 $0.4375 (6) 12/14/08
10/02/02 70,000 $0.07 $1.00 (6) 12/14/08
_________________________

(1) Represents the closing price of our common stock on
October 2, 2002 as reported by the AMEX Stock Market ($0.07).

(2) In October 2002, Mr. Brewer, the Company's Chairman of
the Board and Chief Executive Officer, voluntarily
surrendered options to purchase 840,000 shares of our common
stock, after which the Company issued to him options to
purchase 865,200 shares of our common stock so long as Mr.
Brewer continues to be an eligible participant under the 1998
Stock Option Plan, as amended. The exercise price of the new
options is equal to 100% of the fair market value of our
common stock on the date of grant of the new options, as
determined by the last reported sales price of our common
stock as reported by the AMEX Stock Market on the date we
granted the new options.

(3) In October 2002, Mr. DeAngelis, the Company's Chief
Financial and Administrative Officer, Treasurer and
Secretary, voluntarily surrendered options to purchase
681,250 shares of our common stock, after which the Company
issued to him options to purchase 681,250 shares of our
common stock so long as Mr. DeAngelis continues to be an
eligible participant under the 1998 Stock Option Plan, as
amended. The exercise price of the new options is equal to
100% of the fair market value of our common stock on the date
of grant of the new options, as determined by the last
reported sales price of our common stock as reported by the
AMEX Stock Market on the date we granted the new options.

(4) In October 2002, Mr. Jones, the Company's President and
Chief Operating Officer, voluntarily surrendered options to
purchase 437,500 shares of our common stock, after which the
Company issued to him options to purchase 437,500 shares of
our common stock so long as Mr. Jones continues to be an
eligible participant under the 1998 Stock Option Plan, as
amended. The exercise price of the new options is equal to
100% of the fair market value of our common stock on the date
of grant of the new options, as determined by the last
reported sales price of our common stock as reported by the
AMEX Stock Market on the date we granted the new options.

(5) In October 2002, Mr. Hannesson, the Company's former
Chairman of the Board and Chief Executive Officer,
voluntarily surrendered options to purchase 1,147,500 shares
of our common stock, after which the Company issued to him
options to purchase 1,147,500 shares of our common stock so
long as Mr. Hannesson continues to be an eligible participant
under the 1998 Stock Option Plan, as amended. The exercise
price of the new options is equal to 100% of the fair market
value of our common stock on the date of grant of the new
options, as determined by the last reported sales price of
our common stock as reported by the AMEX Stock Market on the
date we granted the new options.

(6) In October 2002, Mr. Blum voluntarily surrendered
options to purchase 140,000 shares of our common stock, after
which the Company issued to him options to purchase 144,200
shares of our common stock so long as Mr. Blum continues to
be an eligible participant under the 1998 Stock Option Plan,
as amended. The exercise price of the new options is equal
to 100% of the fair market value of our common stock on the
date of grant of the new options, as determined by the last
reported sales price of our common stock as reported by the
AMEX Stock Market on the date we granted the new options.

COMPENSATION COMMITTEE REPORT
-----------------------------

Filings made by companies with the Securities and Exchange
Commission sometimes "incorporate information by reference."
This means the Company is referring you to information that has
been previously filed with the SEC and that this information
should be considered as part of the filing you are reading. The
Compensation Committee Report and Stock Performance Graph in
this proxy statement are not incorporated by reference into any
other filings with the SEC.

What are the components of executive compensation?
--------------------------------------------------

Our compensation program for executives consists of three key
elements:

* Annual base salary
* Performance based annual bonus
* Long-term stock incentive compensation

What is the overview and philosophy of executives compensation?
---------------------------------------------------------------

The Company's executive compensation program is designed to be
linked to corporate performance and returns to stockholders. Of
particular importance to the Company is its ability to grow and
enhance its competitiveness for the rest of the decade and
beyond. Shorter-term performance, although scrutinized by the
CSOB Committee, stands behind the issue of furthering the
Company's strategic goals. To this end, the Company has
developed an overall compensation strategy and specific
compensation plans that tie a significant portion of executive
compensation to the Company's success in meeting specified
performance goals.

The objectives of the Company's executive compensation program
are to:

* attract, motivate and retain the highest quality
executives;
* motivate them to achieve tactical and strategic
objectives in a manner consistent with the Company's
corporate values; and
* link executive and stockholder interests through equity-
based plans and provide a compensation package that
recognizes individual contributions as well as overall
business results.

To achieve these objectives, the Company's executive
compensation program is designed to:

* focus participants on high priority goals to increase
stockholder value;
* encourage behavior that exemplifies to Company's values
relating to customers, quality of performance, employees,
integrity, teamwork and good citizenship;
* assess performance based on results and pre-set goals
that link the business activities of each individual to the
goals of the Company; and
* increase stock ownership to promote a proprietary
interest in the success of the Company.

How are the Chairman of the Board and Chief Executive Officer
compensated?
----------------------------------------------------------------

Shelby T. Brewer, the Chairman of the Board and Chief Executive
Officer of the Company, received a base salary for 2003 from
January through April of $250,000 per annum, and from May
through December was $285,000 per annum of which $271,000 was
originally deferred until December 31, 2003, and remains unpaid
as of November 11, 2004. The members of the CSOB Committee
established the amount actually received by Mr. Brewer last year
as base salary for services rendered to the Company and its
affiliates. In determining Mr. Brewer's salary, the CSOB
Committee considered, without any particular weighting, the
salaries paid to chief executive officers of comparable
companies, the company's performance in terms of stock price and
key financial indices compared to its peers, the performance of
Mr. Brewer, and Mr. Brewer's extensive industry knowledge.

Mr. Brewer received no cash bonus for fiscal 2003 under the
Officers Bonus Pool Plan. This plan pays total bonuses of up to
25% of a participant's salary. The CSOB Committee determined
that no bonus was to be paid in fiscal 2003.

How are other executive officers compensated?
---------------------------------------------

In setting all other executive officers annual salaries, the
CSOB Committee reviews an annual salary plan recommended by the
Chairman and CEO. The annual salary plan is based on numerous
subjective factors that include performance, merit increases and
responsibility levels.

All executive officers are eligible to participate in the
officer's bonus plans. Under these plans, officers are eligible
to receive a bonus up to an established percent of their annual
base salary, depending on the Company's performance relative to
criteria established by the Compensation Committee. During
fiscal 2003, based upon these objective performance assessments,
no officer was awarded a bonus as reflected in the Summary
Compensation Table contained elsewhere in this proxy statement.

COMPENSATION, STOCK OPTION AND BENEFITS COMMITTEE

The Report of the Compensation Committee on Executive
Compensation shall not be deemed incorporated by reference by
any general statement incorporating by reference this Annual
Report into any filing under the Securities Act, or under the
Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not
otherwise be deemed filed under such acts.

Does the Compensation Committee compare Company salaries to
other companies?
-----------------------------------------------------------

Salaries are based on the Compensation Committee assessment of
each officer's past performance and the expectation for future
contributions in leading the Company. In addition, the
Compensation Committee reviews compensation data for the
industry and other companies similar in size. This review is
not done scientifically. The Compensation Committee uses other
company compensation data for information purposes only, but
also considers subjective factors relating to the differences
between companies.

How are limitations on the deductibility of compensation
handled?
--------------------------------------------------------

Section 162(m) of the Internal Revenue Code limits the
deductibility of executive compensation paid by publicly held
corporations to $1 million per employee. The $1 million
limitation generally does not apply to compensation based on
performance goals if certain requirements are met. The Company
believes its Senior Officers' Bonus Pool Plan and Executive
Officers' Bonus Plan each satisfy Section 162(m). As a result,
the Company believes that the compensation paid under these
plans is not subject to limits on deductibility. However, there
can be no assurance that the Internal Revenue Service would
reach the same conclusion.

Who prepared this report?
-------------------------

This report has been furnished by the members of the
Compensation, Stock Option and Benefits committee:

Ambassador William A. Wilson, Chair
Shelby T. Brewer, PhD.
Frank E. Coffman, PhD.
VADM Michael P. Kalleres

AUDIT COMMITTEE REPORT
------------------------

Filings made by companies with the Securities and Exchange
Commission sometimes "incorporate information by reference."
This means the Company is referring you to information that has
been previously filed with the SEC and that this information
should be considered as part of the filing you are reading. The
Audit Committee Report in this proxy statement is not
incorporated by reference into any other filings with the SEC.

What are the responsibilities of the Audit
Committee?
-------------------------------------------

The Audit Committee oversees the Company's financial
reporting process on behalf of the Board of Directors and is
governed by its Charter as set forth in Exhibit A, hereto,
which was adopted in October of 2004. Management has the
primary responsibility for the financial statements and the
reporting process including the systems of internal controls.
In fulfilling its oversight responsibilities, the committee
reviewed the audited financial statements in the Annual
Report with management, including a discussion of the
quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and
the clarity of disclosures in the financial statements. The
Audit Committee received the written disclosures and the
letter from the independent accountants required by
Independence Standards Board Standard No. 1 and discussed
with the independent accountants the independence of the
independent accountants. The Audit Committee also discussed
with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61.

What are the areas of focus of the Audit Committee?
----------------------------------------------------

The Audit Committee reviews with the independent auditors,
who are responsible for expressing an opinion on the
conformity of those audited financial statements with
generally accepted accounting principles:

* the overall scope and plans for their respective audits,

* their judgments as to the quality, not just the
acceptability, of the Company's accounting principles,

* their independence from management and the Company
including matters in the written disclosures and the letter
from the independent accountants required by the Independence
Standards Board No. 1,

* and such other matters as are required to be discussed
with the committee under generally accepted auditing
standards.

The Audit Committee also pre-approves all audit and non-audit
services performed by the independent auditors. (see Audit
Committee Charter - Appendix B, for expanded list of
responsibilities)

Who are the independent members of the
Audit Committee?
--------------------------------------

Messrs. Kalleres, Coffman, and Wilson are independent audit
committee members in accordance with the listing standards of
the American Stock Exchange. Mr. DeAngelis is an Executive
Officer of the Company, and as such, is not independent.
Having Mr. DeAngelis on the committee is in the best interest
of the Company because he can provide day-to-day supervision
to the internal audit staff, he is readily available to
address issues with management, and provides independent
members insight into audit and financial matters.

What financial statements does the Audit Committee review?
------------------------------------------------------------

The audit committee, as part of its Charter, reviews
quarterly with management the Company's financial statements
prior to filing with the Securities and Exchange Commission
and discusses with the independent auditors matters required
to be discussed by Statement on Auditing Standards No. 61.
In addition, the committee in reliance on the reviews and
discussions referred to above, has recommended to the Board
of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2003.

Does the Company have an Audit Committee Financial Expert?
----------------------------------------------------------

The Board of Directors has determined that VADM Kalleres and
Mr. DeAngelis by virtue of their background, education, and
experience are audit committee financial experts within the
meaning of SEC rules. VADM Kalleres is independent of
management under the AMEX listing standards.

Who prepared this report?
-------------------------

This report has been furnished by the members of the Audit
Committee:

VADM Michael P. Kalleres - Chair
Frank E. Coffman, PhD.
James M. DeAngelis
Ambassador William A. Wilson

What fees were paid to the Company's Principal Accountant?
----------------------------------------------------------

STOCK PERFORMANCE GRAPH
------------------------

This graph compares our total stockholder returns, the Standard
and Poor's 500 Composite Stock Index, the Standard and Poor's
Small Cap Composite Environmental Services Stock Index, the
Standard and Poor's 500 Composite Environmental Services Stock
Index, and the Standard and Poor's 500 Super Composite
Environmental Services Stock Index. The graph assumes $100
invested at the per share closing price of the common stock of
Commodore Applied Technologies, Inc. on the American Stock
Exchange, from June 28, 1996 through March 6, 2003, and then on
the Over the Counter Bulletin Board from that point forward.

(Graph Omitted)

06/28/1996 12/26/1997 12/25/1998 12/31/1999 12/29/2000 12/28/2001 12/27/2002 12/31/2003
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

CXII 100.00 53.93 5.62 14.61 4.49 2.34 1.26 0.23
S&P 500 100.00 139.64 182.85 219.09 196.87 173.12 130.53 165.80
S&P Small
Cap
Environmental
Services 100.00 87.25 64.24 62.00 102.29 87.92 70.85 78.49
S&P 500
Environmental
Services 100.00 100.82 107.49 49.05 79.42 90.87 63.69 83.75
S&P Super
Composite
Environmental
Services 100.00 102.84 106.11 52.62 85.52 95.02 70.92 90.82

Comparison of initial $100 investment in various indices versus
the common stock of the Company.

STOCK OWNERSHIP

The following table sets forth certain information, as of
November 11, 2004, with respect to the beneficial ownership
of common stock by each person known to the Company to be the
beneficial owner of more than 5% of the outstanding shares of
common stock of the Company. Unless otherwise indicated, the
owners have sole voting and investment power with respect to
their respective shares.

Number of Shares Percentage of
Name and Address of of Common Stock Outstanding
Beneficial Owner Beneficially Shares of Common
Owned(4) Stock
Beneficially Owned
------------------- ----------------- -------------------
Shelby T. Brewer, PhD(1) 62,009,593(5) 35.30%
Bentley J. Blum(2) 35,019,680(6) 21.48%
James M. DeAngelis(2) 22,582,000(7) 14.57%
O. Mack Jones(3) 12,000,000(8) 8.31%
Commodore Environmental
Services, Inc.(2) 8,382,302(9) 6.33%
Paul E. Hannesson(2) 6,714,721(10) 4.84%

(1) The address of Shelby T. Brewer is 2151 Jamieson Street,
Carlyle Towers, Suite 308, Alexandria, Virginia 22314.
(2) The address of Commodore Environmental Services, Inc.,
Bentley J. Blum, Paul E. Hannesson, and James M. DeAngelis
is 150 East 58th Street, Suite 3238, New York, New York 10155.
(3) The address of O. Mack Jones is 507 Knight Street,
Richland, Washington 99352.
(4) As used herein, the term beneficial ownership with
respect to a security is defined by Rule 13d-3 under the
Exchange Act as consisting of sole or shared voting power
(including the power to vote or direct the disposition of)
with respect to the security through any contract,
arrangement, understanding, relationship or otherwise,
including a right to acquire such power(s) during the next 60
days. Unless otherwise noted, beneficial ownership consists
of sole ownership, voting and investment rights.
(5) Consists of: (i) 3,428 shares of common stock (ii)
490,695 shares of our common stock representing the balance
held of the common stock issued pursuant to the Restated
Brewer Note, dated as of March 15, 2001, between the Company
and SB Enterprises and a subsequent conversion notice for 50%
of the outstanding principal dated as of April 9, 2001; (iii)
13,189,842 shares of our common stock representing the
balance held of the common stock issued pursuant to the
Restated Brewer Note, dated as of March 15, 2001, between the
Company and SB Enterprises and a subsequent conversion notice
for the remaining 50% of the outstanding principal dated as
of March 17, 2003 (iv) 865,200 shares of the Company common
stock underlying currently exercisable options granted to Mr.
Brewer by the Company under the 1998 Plan; (v) 2,000,000
shares of the Company common stock underlying currently
exercisable options granted to Mr. Brewer by the Company
outside of the Company's 1998 Plan; (vi) 1,000,000 shares of
our common stock underlying a currently exercisable two year
warrant at an exercise price of $0.05 per share granted to
S.B. Enterprises in connection with the extension of the
Brewer Note until January 1, 2004; and (vii) 39,450,846
shares of our

common stock underlying a currently exercisable
five year warrant at an exercise price of $0.0285 per share
granted to Mr. Brewer outside of the Company's 1998 Plan.

(6) Consists of: (i) 2,500,000 shares of our common stock
issued to Bentley J. Blum in exchange for $125,000 of debt
owed to Mr. Blum from the Company; (ii) 144,200 shares of the
Company common stock underlying currently exercisable options
granted to Mr. Blum by the Company under the Company's 1998
Plan; (iii) 27,355,800 shares of our common stock underlying
a currently exercisable five year warrant at an exercise
price of $0.0285 per share granted to the Blum Asset Trust by
the Company in connection with the Blum Loan and services
provided by the Blum Asset Trust over the last five years;
and (iv) Mr. Blum's indirect beneficial ownership of common
stock based upon his beneficial ownership of 28,479,737
shares and his spouse's ownership of 2,000,000 shares of
Environmental common stock, representing together 37.74% of
the outstanding shares of Environmental common stock at April
14, 2004, and 4,500,000 shares of Environmental common stock
underlying currently exercisable stock options, representing
together 41.02% of the outstanding shares of Environmental.
Does not include 450,400 shares of Environmental common stock
owned by Simone Blum, the mother of Mr. Blum, and 385,000
shares of Environmental common stock owned by Samuel Blum,
the father of Mr. Blum. Mr. Blum disclaims any beneficial
interest in the shares of Environmental common stock owned by
his spouse, mother and father.

(7) Consists of (i) 16,500 shares of common stock; (ii)
841,688 shares of common stock underlying currently
exercisable stock options granted to Mr. James M. DeAngelis
by the Company under the Company's 1998 Plan; (iii) 1,000,000
shares of common stock underlying currently exercisable stock
options granted to Mr. DeAngelis by the Company outside of
the Company's 1998 Plan; (iv) Mr. DeAngelis' indirect
beneficial ownership of common stock based upon his ownership
of 580,000 shares of Environmental; and (vi) 20,641,812
shares of our common stock underlying a currently exercisable
five year warrant at an exercise price of $0.0285 per share
granted to Mr. DeAngelis outside of the 1998 Plan.
(8) Consists of (i) 1,759,375 shares of common stock
underlying currently exercisable stock options granted to Mr.
O. Mack Jones by the Company under the Company's 1998 Plan;
and (ii) 10,240,625 shares of our common stock underlying a
currently exercisable five year warrant at an exercise price
of $0.0285 per share granted to Mr. Jones outside of the 1998
Plan.
(9) Excludes warrants to purchase an aggregate of 2,104,248
shares of common stock at an exercise price of $1.60 per
share. See "Market for Registrant's Common Equity and Related
Stockholder Matters-Recent Sales of Unregistered Securities"
and "Certain Relationships and Related Transactions."
(10) Consists of: (i) 1,181,925 shares of common stock
underlying currently exercisable stock options granted to Mr.
Paul E. Hannesson by the Company under the 1998 Plan; (ii)
4,818,075 shares of our common stock underlying currently
exercisable stock options granted to Mr. Paul E. Hannesson by
the Company at an exercise price of $0.0285 per share granted
to Mr. Hannesson outside of the Company's 1998 Plan; and
(iii) Mr. Hannesson's indirect beneficial ownership of common
stock based upon his ownership of an aggregate of (a)
2,650,000 shares of Environmental common stock owned by
Suzanne Hannesson, the spouse of Mr. Hannesson, (b) 2,650,000
shares of Environmental common stock owned by the Hannesson
Family Trust (Suzanne Hannesson and John D. Hannesson,
trustees) for the benefit of Mr. Hannesson's spouse and (c)
500,000 shares of Environmental common stock in exchange for
options to purchase 950,000 shares of Environmental common
stock, issued to Hannesson Family Trust, representing
together 7.18% of the outstanding shares of Environmental
common stock as of April 14, 2004, and (d) currently
exercisable options to purchase 525,705 shares of
Environmental common stock, representing together 7.78% of
the outstanding shares of Environmental common stock. Does
not include (i) 40,000 shares of the Company's common stock
owned by each of Jon Paul and Krista Hannesson, the adult
children of Mr. Hannesson; and (ii) 1,000,000 shares of
Environmental common stock owned by each of Jon Paul and
Krista Hannesson. Mr. Hannesson disclaims any beneficial
interest in the shares of

Environmental common stock owned by
or for the benefit of his spouse and children. It also does
not include 1,000,000 shares of common stock underlying stock
options granted to Mr. Hannesson by the Company that are not
currently exercisable.

Messrs. Blum and Hannesson are brothers-in-law.

The Shaar Fund holds certain shares of Series E Preferred
Stock and Series F Preferred Stock that are convertible into
common stock of the Company. If the Shaar Fund were to
exercise this conversion privilege and retain the shares of
common stock received on the conversion, such conversion
might result in a change in control of the Company.

Executive Officers and Key Employees
------------------------------------

The executive officers of the Company are Shelby T.
Brewer, Ph.D., who serves as Chairman of the Board and Chief
Executive Officer, O. Mack Jones, who serves as President and
Chief Operating Officer, and James M. DeAngelis, who serves
as Chief Financial and Administrative Officer and Secretary
and Treasurer. Additional information regarding Dr. Brewer,
Mr. DeAngelis and Mr. Jones is included in this proxy
statement under the heading "Election of Directors and
Director Biographies."

GENERAL
-------

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the Compensation, Stock Option and
Benefits Committee were officers or employees of the Company or
had any relationship with the Company requiring disclosure
under Securities and Exchange Commission regulations.

INSIDER TRANSACTIONS

On March 14, 2003, Mr. Shelby T. Brewer issued a conversion
notice for the remainder of the principal and interest of the
S.B. Enterprises loan, which was converted into 13,189,842
shares of the Company's common stock on October 9, 2003. Mr.
Brewer bought 175,000 shares of the Company's common stock on
September 2, 2004. All required disclosures were submitted to
the Securities and Exchange Commission with respect to the
above-mentioned transactions.

COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNER

Section 16(a) of the Securities Exchange Act of 1934 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 SEC reports of
ownership and changes in ownership of the Company's common
stock. Directors, executive officers and greater than ten
percent stockholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of these reports
furnished to the Company or written representations that no
other reports were required, we believe that during fiscal year
2003, all our directors, executive officers and greater than
ten percent beneficial owners complied with these requirements.

INDEPENDENT CERTIFIED PUBLIC ACCOUNTS

Tanner + Co. was our auditor during fiscal 2003. The Board of
Directors has selected Tanner + Co. to serve as auditors for
the present fiscal year, subject to shareholder ratification.
A representative of that firm will be present at the annual
meeting, will be given an opportunity to make a statement and
will be available to respond to appropriate questions.

AVAILABILITY OF FORM 10-K AND ANNUAL REPORT TO STOCKHOLDERS

SEC rules require us to provide an Annual Report on Form 10K to
stockholders who receive this Proxy Statement. We will also
provide copies of the Annual Report on Form 10K to brokers,
dealers, banks, voting trustees and their nominees for the
benefit of their beneficial owners of record. Additional copies
of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2003 (not including documents incorporated by
reference), are available without charge to stockholders upon
written request to Investor Relations, Commodore Applied
Technologies, Inc., 150 East 58th Street, Ste. 3238, New York,
NY 10155, by calling (212) 308-5800 or via the Internet at
www.commodore.com.

COMMUNICATION WITH DIRECTORS

The Board of Directors has adopted the following process for
shareholders to send communications to members of the Board.
Stockholders may communicate with the chairs of the Audit or the
Compensation, Stock Option and Benefits Committee of the Board,
or with our independent directors, by sending a letter to the
following address: Board of Directors, Commodore Applied
Technologies, Inc., c/o Corporate Secretary, 150 East 58th
Street, Suite 3238, New York, New York 10155.

Communications are distributed to the Board, or to any
individual director or directors as appropriate, depending on
the facts and circumstances outlined in the communications. In
that regard, the Board of Directors has requested that certain
items that are unrelated to the duties and responsibilities of
the Board should be excluded, such as:

* spam
* junk mail and mass mailings
* product inquiries
* new product suggestions
* resumes and other forms of job inquiries
* surveys
* business solicitations or advertisements.

In addition, material that is unduly hostile, threatening,
illegal or similarly unsuitable will be excluded, with the
provision that any communication that is filtered out must be
made available to any outside director upon request.

The Board will consider properly submitted shareholder nominees
for candidates for membership on the Board of Directors.
Shareholders proposing individuals for consideration by the
Board must include at least the following information about the
proposed nominee: the proposed nominee's name, age, business or
residence address, principal occupation or employment, and
whether such person has given written consent to being named in
the proxy statement as a nominee and to serving as a director
if elected. Shareholders should send the required information
about the nominee to:

Corporate Secretary
Commodore Applied Technologies, Inc.
150 East 58th Street, Suite 3238
New York, New York 10155

In order for an individual proposed by a stockholder to be
considered by the Board for recommendation as a Board nominee,
the Corporate Secretary must receive the proposal no later than
5 p.m. Central Time on June 1, 2005. Such proposals must be
sent via registered, certified, or express mail (or other means
that allows the shareholder to determine when the proposal was
received by the Company). The Corporate Secretary will send
properly submitted shareholder proposed nominations to the
Board for consideration at a future Board meeting. Individuals
proposed by shareholders in accordance with these procedures
will receive the same consideration that individuals identified
to the Board through other means receive.

STOCKHOLDER PROPOSALS

To be considered for inclusion in next year's proxy statement,
stockholder proposals must be submitted in writing by June 1,
2005. Any stockholder proposal, including nomination of a
director, to be considered at next year's meeting, but not
included in the proxy statement, must be submitted in writing
by August 31, 2005, or the persons appointed as proxies may
exercise their discretionary voting authority with respect to
the proposal. All written proposals should be submitted to:

Corporate Secretary
Commodore Applied Technologies, Inc.
150 East 58th Street, Suite 3238
New York, New York 10155

Our by-laws, which are publicly available through our SEC
reports or may be obtained upon request from our Corporate
Secretary, state the specific requirements that must be
included in any notice of any business to be brought before the
meeting.

SOLICITATION BY BOARD; EXPENSES OF SOLICITATION

Our Board of Directors has sent you this Proxy Statement. Our
directors, officers and associates may solicit proxies. We
will also reimburse brokers, nominees and fiduciaries to send
proxies and proxy materials to our stockholders so they can
vote their shares.

FORM OF PROXY

COMMODORE APPLIED TECHNOLOGIES, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY

The undersigned, a stockholder of COMMODORE APPLIED
TECHNOLOGIES, INC., a Delaware corporation (the "Company"),
hereby appoints Shelby T. Brewer and James M. DeAngelis, and each
of them, as proxies for the undersigned, each with full power of
substitution, and hereby authorizes them to represent and to
vote, as designated below, all of the shares of Common Stock of
the Company held of record by the undersigned at the close of
business on November 10, 2004 at the Annual Meeting of
Stockholders of the Company to be held on Tuesday, December 21,
2004, at 11:00 a.m., local time, at The Fitzpatrick Hotel, 687
Lexington Avenue, New York, New York 10022, and at any
adjournment or postponement thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS GIVEN, SUCH SHARES WILL BE VOTED FOR ALL NOMINEES FOR DIRECTOR
IDENTIFIED BELOW AND FOR PROPOSALS 2 AND 3 SET FORTH BELOW.

IF YOU CHOOSE TO VOTE BY FACSIMILE, PLEASE FILL IN THE PROXY CARD
AS DIRECTED ABOVE AND FAX TO THE ATTENTION OF: JAMES M.
DEANGELIS, SECRETARY OF THE 2003 ANNUAL MEETING OF THE
SHAREHOLDERS OF COMMODORE APPLIED TECHNOLOGIES, INC. AT 212-755-
0731 ANYTIME PRIOR TO TUESDAY, DECEMBER 21, 2004, at 11:00 A.M.,
LOCAL TIME, NEW YORK, NY.

1. To elect the following nominees as Directors of the
Company to hold office until the Annual Meeting of Stockholders
to be held in 2005, and until their respective successors are
duly elected and have qualified: Bentley J. Blum, Shelby T.
Brewer, PhD., Frank E. Coffman, PhD., James M. DeAngelis, Paul E.
Hannesson, O. Mack Jones, VADM Michael P. Kalleres, and
Ambassador William A. Wilson.

FOR ALL NOMINEES (except as WITHHOLD ALL NOMINEES
marked to the contrary)

( ) ( )

AUTHORITY TO WITHHOLD A VOTE FOR ANY OF THE ABOVE NAMED
INDIVIDUALS SHOULD BE INDICATED BY LINING THROUGH OR OTHERWISE
STRIKING OUT THE NAME OF THE NOMINEE.
----------------------------------------------------------------

2. To authorize our Board of Directors in its discretion,
to amend our Certificate of Incorporation to effect a reverse
stock split in a ratio of between 1-for-10 and 1-for-20, without
further approval of our stockholders.

( ) FOR ( ) AGAINST ( ) ABSTAIN

3. To ratify the appointment of Tanner + Co as the
Company's independent auditors for the year ending December 31,
2004.

( ) FOR ( ) AGAINST ( ) ABSTAIN

4. Upon such other matters as may properly come before
such Annual Meeting and any adjournments or postponement thereof.
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting and
any adjournment or postponement thereof.

The undersigned hereby acknowledges receipt of (1) the
Notice of Annual Meeting for the 2003 Annual Meeting, (2) the
Proxy Statement and (3) the Company's 2003 Annual Report to
Stockholders on Form 10-K.

Dated: ______________________, 2004

________________________________
Signature

________________________________
Print Name

________________________________
Signature, if Jointly Held

________________________________
Print Name

PLEASE SIGN EXACTLY AS YOUR NAME APPEARS

HEREIN, if signing as attorney, executor, administrator, trustee
or guardian, indicate such capacity. All joint tenants must
sign. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please
sign in partnership name by authorized person. The Board of
Directors requests that you fill in the date and sign the proxy
and return it in the enclosed envelope.

IF THE PROXY IS NOT DATED IN THE ABOVE
SPACE, IT IS DEEMED TO BE DATED ON THE DAY
ON WHICH IT WAS MAILED BY THE CORPORATION.

Appendix A

CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
COMMODORE APPLIED TECHNOLOGIES, INC.

a Delaware corporation

Pursuant to Section 242 of the General Corporation Law of the
State of Delaware, the undersigned, Shelby T. Brewer, Chief
Executive Officer of Commodore Applied Technologies, Inc., a
corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY,

FIRST: The name of the Corporation is Commodore Applied
Technologies, Inc. (hereinafter the "Corporation").

SECOND: Pursuant to Section 242 of the Delaware General
Corporation Law, the Board of Directors of the Corporation
has duly adopted, and a majority of the outstanding stock
entitled to vote thereon and a majority of the outstanding
stock of each class entitled to vote as a class has duly
approved, the amendment to the Certificate of Incorporation
of the Corporation, as amended, set forth in this Certificate
of Amendment.

THIRD: That Article 4 of the Certificate of Incorporation
of the Corporation, as amended, is amended to insert the
following paragraph immediately following the last sentence
of paragraph three:

"Upon the filing and effectiveness (the "Effective
Time") of this Certificate of Amendment with the
Delaware Secretary of State, every outstanding
shares of Common Stock shall without further action by
this Corporation or the holder thereof be combined into
and automatically become one share of Common Stock. The
number of authorized shares of Common Stock of the
Corporation and the par value of the Common Stock shall
remain as set forth in this Amended and Restated
Certificate of Incorporation, as amended. No fractional
share shall be issued in connection with the foregoing
combination; all shares of Common Stock that are held by
a stockholder will be aggregated for purposes of such
combination and each stockholder shall be entitled to
receive the number of whole shares resulting from the
combination of the shares so aggregated. In lieu of any
interest in a fractional share of Common Stock to which
a stockholder would otherwise be entitled as a result of
the foregoing combination of shares: (1) the Corporation
shall, upon the surrender of such stockholder's stock
certificate(s), pay a cash amount to such stockholder
equal to the fraction to which the stockholder would
otherwise be entitled multiplied by the average of the
closing sales prices of the Common Stock (as adjusted to
reflect the combination of shares effected hereby) for
the 20 trading days immediately prior to the Effective
Time, as reported by the Over the Counter Bulletin Board
(OTCBB); provided that if such price or prices are not
available, or if the stock is no longer traded on the
Over the Counter Bulletin Board (OTCBB), the fractional
share payment shall be based on such other price as
determined by the Board of Directors of the Corporation;
or (2) the Corporation shall arrange for the disposition
of fractional interests by those otherwise entitled
thereto in the manner described below. The Board of
Directors shall determine in its sole and absolute
discretion which of the foregoing means shall be
utilized for paying to stockholders the value of the
fractional shares to which they otherwise would be
entitled. If the Corporation arranges for the
disposition of fractional interests by those entitled
thereto, the aggregate of all fractional shares
otherwise issuable to the holder of record of Common
Stock shall be issued to Registrar & Transfer Company,
the transfer agent, as agent for the accounts of all
holders of record of Common Stock otherwise entitled to
have a fraction of a share issued to them. The sale of
all of the fractional interests will be effected by the
transfer agent as soon as practicable after the
Effective Time on the basis of prevailing market prices
of the Common Stock on the Over the Counter Bulletin
Board (OTCBB) at the time of sale. After such sale and
upon the surrender of the stockholders' stock

certificates, the transfer agent will pay to the holders
of record entitled thereto their pro rata share of the
net proceeds derived from the sale of the fractional
interests."

FOURTH: That said amendment was duly adopted, in
accordance with the provisions of Section 242 of the General
Corporation law of the State of Delaware.

IN WITNESS WHEREOF, said Board of Directors of
Commodore Applied Technologies, Inc. have caused this
Certificate to be signed by its Chief Executive Officer,
Shelby T. Brewer, and attested by James M. DeAngelis, its
Chief Financial Officer, this ______ day of ________________.

COMMODORE APPLIED TECHNOLOGIES,
INC.
By: _________________________
Name: Shelby T. Brewer
Title: Chief Executive
Officer

ATTEST
By: _______________________
Name: James M. DeAngelis
Title: Chief Financial Officer

Appendix B

CHARTER OF THE AUDIT COMMITTEE
OF
THE BOARD OF DIRECTORS
OF
COMMODORE APPLIED TECHNOLOGIES

1.Purpose. The purpose of the Audit Committee (the
"Committee") shall be to (a) appoint, oversee and replace, if
necessary, the independent auditor; (b) assist the Board of
Director's oversight of (i) the preparation of the financial
statements of Commodore Applied Technologies Corporation (the
"Company"), (ii) the Company's compliance with legal and
regulatory requirements, (iii) the independent auditor's
qualifications and independence, and (iv) the performance of the
independent auditor; and (c) prepare the report the Securities
and Exchange Commission rules require be included in the
Company's annual proxy statement.

2.Composition of the Audit Committee. The Committee shall
consist of not less than three board members appointed by the
Board of Directors of the Company. Committee members may be
removed by the Board of Directors in its discretion. The majority
of the members of the Committee shall satisfy the independence
requirements of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-
Oxley Act") and any applicable stock exchange where the Company's
shares of common stock may be trading, as such requirements are
interpreted by the Board of Directors in its business judgment,
and the Board of Directors shall annually review the Committee's
compliance with such requirements. Members of the Committee shall
be versed in reading and understanding financial statements.

3.Meetings of the Audit Committee. The Committee shall hold
regularly scheduled meetings and such special meetings as
circumstances dictate. It shall meet separately, at least twice
annually, with management, with the personnel responsible for the
internal audit function, and with the independent auditor to
discuss results of examinations, or discuss any matters that the
Committee or any of these persons or firms believe should be
discussed privately. The Committee shall report regularly to the
Board of Directors.

4.Responsibilities of the Audit Committee. The function of the
Committee is oversight. While the Committee has the
responsibilities set forth in this charter, it is not the
responsibility of the Committee to plan or conduct audits, to
determine that the Company's financial statements are complete
and accurate and are in accordance with generally accepted
accounting principles, or to assure compliance with laws,
regulations or any internal rules or policies of the Company.
This is the responsibility of management. The independent auditor
is responsible for performing independent audits of the Company's
consolidated financial statements in accordance with generally
accepted auditing standards and for issuing reports thereon. The
Committee has direct and sole responsibility for the appointment,
compensation, oversight and replacement, if necessary, of the
independent auditor, including the resolution of disagreements
between management and the auditor regarding financial reporting.
Each member of the Committee shall be entitled to rely on (i) the
integrity of those persons and organizations within and outside
the Company that it receives information from and (ii) the
accuracy of the financial and other information provided to the
Committee by such persons or organizations absent actual
knowledge to the contrary (which shall be promptly reported to
the Board of Directors). The duties and responsibilities of a
member of the Committee are in addition to those duties set out
for a member of the Board of Directors.

5.Duties and Proceedings of the Audit Committee. The Committee
shall assist the Board of Directors in fulfilling its oversight
responsibilities by accomplishing the following:

5.1. Oversight of Independent Auditor.

a) Annually evaluate, determine the selection of, and if
necessary, determine the replacement of or rotation of, the
independent auditor.
b) Approve or pre-approve all auditing services (including
comfort letters and statutory audits) and all permitted non-audit
services by the auditor.
c) Review, evaluate and discuss formal reports, at least
annually, from the independent auditor regarding the auditor's
independence, including a delineation of all relationships
between the auditor and the Company; and recommend to the Board
of Directors actions to satisfy the Board of Directors of the
independence of the auditor.
d) At least annually, receive a report, orally or in writing,
from the independent auditor detailing the firm's internal
control procedures and any material issues raised by the
independent auditor's internal quality control review, peer
review or any governmental or other professional inquiry
performed within the past five years and any remedial actions
implemented by the firm.

5.2 Oversight of Audit Process and Company's Legal Compliance
Program.

a) Review with the independent auditor the overall scope and
plans for audits, including authority and organizational
reporting lines and adequacy of staffing and compensation.
Review with the independent auditor any difficulties with
audits and managements' response.
b) Review and discuss with management and the independent
auditor the Company's system of internal control, its financial
and critical accounting practices, and policies relating to risk
assessment and management.
c) Receive and review reports of the independent auditor
discussing 1) all critical accounting policies and practices to
be used in the firm's audit of the Company's financial
statements, 2) all alternative treatments of financial
information within generally accepted accounting principles
("GAAP") that have been discussed with management, ramifications
of the use of such alternative disclosures and treatments, and
the treatment preferred by the independent auditor, and 3) other
material written communications between the independent auditor
and management, such as any management letter or schedule of
unadjusted differences.
d) Discuss with management and the independent auditor any
changes in the Company's critical accounting principles and the
effects of alternative GAAP methods, off-balance sheet structures
and regulatory and accounting initiatives.
e) Review and discuss with management and the independent
auditor the annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Conditions and
Results of Operations" of the Company prior to the filing of the
Company's Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q. Discuss results of the annual audit and quarterly
review and any other matters, including the results of the review
of internal controls and procedures, required to be communicated
to the Committee by the independent auditor under generally
accepted auditing standards. Discuss with management and the
independent auditor their judgment about the quality of
accounting principles, the reasonableness of significant
judgments, including a description of any transactions as to
which the management obtained Statement on Auditing Standards No.
50 letters, and the clarity of disclosures in the financial
statements, including the Company's disclosures of critical
accounting policies and other disclosures under "Management's
Discussion and Analysis of Financial Conditions and Results of
Operations."
f) Review material pending legal proceedings involving the
Company and other contingent liabilities.
g) Receive from the Chief Executive Officer and Chief Financial
Officer a report of all significant deficiencies and material
weaknesses in the design or operation of internal controls, and
any fraud that involves management or other employees who have a
significant role in the Company's internal controls.
h) Discuss with the independent auditor the matters required to
be communicated to audit committees in accordance with Statement
on Auditing Standards No. 61.
i) Establish procedures for the receipt, retention and
treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters, and
the confidential, anonymous submissions by employees of concerns
regarding questionable accounting or accounting matters.

j) Receive reports from, and make inquiries of, appropriate
officers of the Company concerning all related party
transactions, conduct appropriate review of all related party
transactions for potential conflict of interest situations and
approve all such related party transactions.

5.3 Other Responsibilities.

a) Review adequacy of this audit committee charter annually and
submit charter to Board of Directors for approval.
b) Prepare or cause to be prepared the report for inclusion in
the Company's annual proxy statement as required by the rules of
the Securities and Exchange Commission.
c) Put in place an appropriate control process for reviewing
and approving the Company's internal transactions and accounting.
d) Report to the Board of Directors on a regular basis.
e) Annually review with the independent auditors the
performance of the Committee, the results of which review shall
be presented to the Board of Directors.
f) Perform any other activities consistent with the Charter, By-
laws and governing law as the Board of Directors or the Committee
shall deem appropriate, including holding meetings with the
Company's investment bankers and financial analysts.

6 Authority and Resources of the Audit Committee. The
Committee has the authority to retain legal, accounting or other
experts that it determines to be necessary to carry out its
duties. It also has authority to determine compensation for such
advisors as well as for the independent auditor. The Committee
may determine appropriate funding needs for its own ordinary
administrative expenses that are necessary and appropriate to
carrying out its duties.