UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<Table>

[ ] Preliminary Proxy Statement [ ] Confidential, for Use
of the Commission Only
(as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</Table>

ENVIRONMENTAL SAFEGUARDS, INC.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required. [ ] 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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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials. [ ] Check box if any
part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.

(1) Amount Previously Paid:

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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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ENVIRONMENTAL SAFEGUARDS, INC.
2600 SOUTH LOOP WEST, SUITE 645
HOUSTON, TEXAS 77054

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 2002

Our Annual Meeting of Stockholders (the "Annual Meeting") of Environmental
Safeguards, Inc. will be held at the Holiday Inn Astrodome, 8111 Kirby Drive,
Houston, Texas on May 20, 2002 at 10:00 AM (CST) for the following purposes:

(1A) To elect four (4) directors by the voting of Common Stock

(1B) To elect one (1) director by the voting of Series B Convertible
Stock.

(2) To ratify the selection of Ham, Langston & Brezina, LLP as our
independent accountants for the fiscal year ending December 31, 2002.

(3) To act upon such other business as may properly come before the
Annual Meeting.

Only holders of our Common Stock and holders of our Series B Convertible
Preferred Stock of record at the close of business on April 12, 2002, will be
entitled to vote at our Annual Meeting or any adjournment thereof.

You are cordially invited to attend our Annual Meeting. Whether or not you plan
to attend, please sign, date and return your proxy to us promptly. Your
cooperation in signing and returning the proxy will help avoid further
solicitation expense.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ James S. Percell
James S. Percell
Chairman of the Board and President

April 15, 2002
Houston, Texas

ENVIRONMENTAL SAFEGUARDS, INC.
2600 SOUTH LOOP WEST, SUITE 645
HOUSTON, TEXAS 77054

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 2002

This proxy statement is being furnished to our stockholders in connection
with the solicitation of proxies by and on behalf of the Board of Directors of
Environmental Safeguards, Inc., a Nevada corporation, for their use at the
Annual Meeting of stockholders to be held at the Holiday Inn Astrodome, 8111
Kirby Drive, Houston, Texas on May 20, 2002 at 10:00 AM (CST), and at any
adjournments thereof, for the purpose of considering and voting upon the matters
set forth in the accompanying Notice of Annual Meeting of Stockholders
("Notice"). This proxy statement and the accompanying form of proxy ("Proxy")
are first being mailed to our stockholders on or about April 17, 2002. The cost
of solicitation of proxies is being borne by us.

The close of business on April 12, 2002 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and any adjournment thereof. As of the record date, there were
10,112,144 shares of Common Stock, par value $0.001 per share issued and
outstanding, and 2,733,686 shares of Series B Convertible Preferred Stock issued
and outstanding. Series B Convertible Preferred Stock may vote on all matters
except the election of Directors that are voted on by holders of Common Stock
only. Series B Convertible Preferred Stock holders, however, have the right to
vote separately, as a class, for the election of one Director.

The presence, in person or by proxy, of at least one-third of the total
outstanding shares of Common Stock and Series B Convertible Preferred Stock on
the record date is necessary to constitute a quorum at the Annual Meeting.

Each share is entitled to one vote on all issues requiring a stockholder
vote at the Annual Meeting, except for the election of Directors, upon which the
Series B Convertible Preferred stockholders are not entitled to vote. The Series
B Convertible Preferred stockholders, however, have the right to vote
separately, as a class, for the election of one Director. Each nominee for
Director named in Number 1A must receive a majority of the Common Stock votes
cast in person or by proxy in order to be elected. Stockholders may not cumulate
their votes for the election of Directors. Each nominee for Director named in
Number 1B must receive a majority of the Series B Convertible Preferred Stock
votes cast in person or by proxy in order to be elected.

The affirmative vote of a majority of the shares of Common Stock and Series
B Convertible Preferred Stock present or represented by proxy and entitled to
vote at the Annual Meeting is required for the approval of Numbers 2 and 3 set
forth in the accompanying Notice.

All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Annual Meeting in accordance
with the directions on the proxies. If no direction is indicated, the shares
will be voted (i) FOR THE ELECTION OF THE NOMINEES NAMED HEREIN, AND (ii) FOR
THE RATIFICATION OF HAM, LANGSTON & BREZINA, LLP AS INDEPENDENT ACCOUNTANT FOR
THE FISCAL YEAR ENDING DECEMBER 31, 2002. The Board of Directors is not aware of
any other matters to be presented for action at the Annual Meeting. However, if
any other matter is properly presented at the Annual Meeting, it is the
intention of the persons named in the enclosed proxy to vote in accordance with
their best judgment on such matters.

Different forms of proxies (collectively the "Proxy") are being sent to
holders of Common Stock and holders of Series B Convertible Preferred Stock to
facilitate class voting for directors.

The enclosed Proxy, even though executed and returned, may be revoked at
any time prior to the voting of the Proxy (a) by execution and submission of a
revised proxy, (b) by written notice to our Secretary, or (c) by voting in
person at the Annual Meeting.

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(1A) TO ELECT FOUR (4) DIRECTORS FOR THE ENSUING YEAR
BY THE VOTING OF COMMON STOCK
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NOMINEES FOR DIRECTORS BY THE VOTING OF COMMON STOCK

The persons named in the enclosed Proxy have been selected by the Board of
Directors to serve as proxies (the "Proxies") and will vote the shares
represented by valid proxies at the Annual Meeting of Stockholders and
adjournments thereof. They have indicated that, unless otherwise specified in
the Proxy, they intend to elect as Directors by the voting of Common Stock the
nominees listed below. All the nominees are presently members of the Board of
Directors. Each duly elected Director will hold office until his successor shall
have been elected and qualified.

Unless otherwise instructed or unless authority to vote is withheld, the
enclosed Proxy for the election of the Common Stock Board representatives will
be voted for the election by the voting of Common Stock for the nominees listed
below. Although our Board of Directors does not contemplate that any of the
nominees will be unable to serve, if such a situation arises prior to the Annual
Meeting, the persons named in the enclosed Proxy will vote for the election of
such other person(s) as may be nominated by the Board of Directors.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE BY THE COMMON
STOCKHOLDERS FOR THE ELECTION OF EACH OF THE NOMINEES LISTED BELOW.

JAMES S. PERCELL, age 58, serves as Director, Chairman, CEO and President
and also serves as President of our subsidiaries, National Fuel & Energy, Inc.
("NFE") and OnSite Technology LLC ("OnSite"). Mr. Percell became a director and
President, Chief Executive Officer and a director of NFE in November, 1995. Mr.
Percell became President and CEO of our consolidated company in January, 1996.
Mr. Percell also serves as President of Percell & Associates, a project
developer of facilities in the hydrocarbon industry. From 1985-1993, Mr. Percell
served as Vice-President of Belmont Constructors, Inc., a heavy industrial
contractor. From 1982-1984, he served as President of Capital Services
Unlimited, an international supply company for refining, petrochemical and oil
field compressor stations, modular refineries and modular oilfield components.
From 1977-1980, Mr. Percell served as President of Percell & Lowder, Inc., an
oilfield fabricator of onshore and offshore facilities, and from 1960-1977, he
served as project manager for various onshore and offshore projects. He attended
Amarillo College in Amarillo, Texas.

THOMAS R. BRAY, age 46, was appointed as Director in January 2002. Mr. Bray
is a member of our compensation and audit committees. Mr. Bray has been a
practicing attorney based in Stafford and Houston, Texas for the past nine
years, specializing in business and real estate transactions, and litigation and
general corporate representation, largely for businesses and individuals in the
oil and gas services, banking and investment industries. Prior to that, Mr. Bray
was vice president of New First City, Texas-Houston, N.A., having previously
served as special assistant to the president and an in-house counsel of
Collecting Bank, N.A., and vice-president of First City Asset Servicing Company
and First City, Texas-Houston, N.A. Mr. Bray has also served as president of
Associated Title Company, president of Arbor Oaks Utilities, Inc. a private
water and sewer utility company, and the owner and president of Rembrandt Homes,
Inc., all in Houston. Mr. Bray graduated from the University of Texas with a BBA
in Finance, and received his J.D. degree from South Texas College of Law in
Houston.

BRYAN SHARP, age 58, has served as a Director since November, 1995. Mr.
Sharp joined us in January 2002 as Senior Vice President for our subsidiary
OnSite Technology LLC. Mr. Sharp previously served on our audit committee, and
prior to joining us was a self-employed environmental consultant. Mr. Sharp
previously served as Principal-in-Charge and Director of Espey, Huston &
Associates, Inc. ("EH&A"), an environmental consulting company. From 1990-1993,
he served as President of EH&A. Mr. Sharp has also been employed by North Texas
State University, the Department of the Interior, and the University of Texas.
Mr. Sharp has a B.S. degree in Education from North Texas State University, a
M.S.

degree in Biology from North Texas State University and studied for his Ph.D. in
Zoology from The University of Texas at Austin.

ALBERT M. WOLFORD, age 80, has served as Director since August 5, 1997. Mr.
Wolford is a member of our compensation and audit committees, and previously
served as our Secretary. Mr. Wolford has been an independent business consultant
since 1988. From 1970 to 1988, Mr. Wolford served with Texas United Corporation
as a director, a member of the executive committee, senior vice-president, and
as the chairman of the executive development and compensation committees. As a
senior vice-president of Texas United Corporation, Mr. Wolford served its
subsidiaries as president and CEO of Texas United Chemical Corporation, as the
chairman, president and CEO of United Salt Corporation, and as the president of
American Borate Corporation. He has also served the Texas Chemical Council, an
industry trade group, as a director, a member of its executive committee, and as
secretary-treasurer. Mr. Wolford served as a member of the executive committee
of the Salt Institute, an industry trade group. Mr. Wolford is a graduate of The
University of Texas.
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(1B) TO ELECT ONE (1) DIRECTOR FOR THE ENSUING YEAR
BY THE VOTING OF SERIES B CONVERTIBLE STOCK
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NOMINEES FOR DIRECTOR BY THE VOTING OF SERIES B CONVERTIBLE STOCK

The persons named in the enclosed Proxy have been selected by the Board of
Directors to serve as proxies (the "Proxies") and will vote the shares
represented by valid proxies at the Annual Meeting of Stockholders and
adjournments thereof. They have indicated that, unless otherwise specified in
the Proxy, they intend to elect as Director by the voting of Series B
Convertible Stock the nominee listed below. The nominee is presently a member of
the Board of Directors. The duly elected Director will hold office until his
successor shall have been elected and qualified.

Unless otherwise instructed or unless authority to vote is withheld, the
enclosed Proxy for the election of the Series B Convertible Stock Board
representative will be voted for the election by the voting of Series B
Convertible Stock of the nominee listed below. Although the Board of Directors
do not contemplate that the nominee will be unable to serve, if such a situation
arises prior to the Annual Meeting, the persons named in the enclosed Proxy will
vote for the election of such other person as may be nominated by the Board of
Directors.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION BY
THE VOTING OF SERIES B CONVERTIBLE STOCK OF THE NOMINEE LISTED BELOW.

DAVID L. WARNOCK, age 44, was appointed as Director in December, 1997 in
connection with the December, 1997 financing. Mr. Warnock is a member of our
audit and compensation committees. Mr. Warnock is a founding partner of Cahill,
Warnock & Company, L.L.C., an asset management firm established in 1995 to
invest in small public companies. From 1983 to 1995, Mr. Warnock was with T.
Rowe Price Associates in senior management positions including President of the
corporate general partner of T. Rowe Price Strategic Partners I and T. Rowe
Price Strategic Partners II, and as the Executive Vice-president of T. Rowe
Price New Horizons Fund. Mr. Warnock also serves on the Boards of Directors of
other public and private companies. Mr. Warnock received a Bachelor of Arts
Degree, History, from the University of Delaware and a Masters Degree, Finance,
from the University of Wisconsin.

EXECUTIVE OFFICERS

In addition to Mr. Percell, our Chief Executive Officer, the following
person serves as an executive officer:

RONALD L. BIANCO, age 55, joined us in April 1997 as Chief Financial
Officer. Mr. Bianco is presently the C.F.O., Treasurer and Secretary of our
company. From 1975 through 1991, Mr. Bianco was with Dresser Industries where he
served as Controller of Dresser Rand Power in Norway, as Controller for the
North America Operations of Dresser Masonelian Valve and in other division and
headquarters assignments. From 1992 through 1993, Mr. Bianco was an independent
business consultant. From 1994 through 1996, Mr. Bianco served as C.F.O. of
Sweco Oilfield Services. Mr. Bianco received his B.B.A. in accounting in 1970
from St. Bonaventure University in Olean, New York, and his M.B.A. in 1983 from
Southern Methodist University in Dallas, Texas.

INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES

James S. Percell is the only director who also serves as an officer. In
1997, our board established an independent compensation committee whose present
members are David L. Warnock, Thomas R. Bray and Albert M. Wolford. Also in
1997, our board established an independent audit committee whose present members
are David L. Warnock, Thomas R. Bray and Albert M. Wolford. We held nine
meetings of the board during the period covered by the fiscal year ended
December 31, 2001. All Directors were present for at least 75% of the meetings.
Our compensation committee met three times during 2001 (all members were present
for each meeting); and our audit committee met four times during 2001 (all
members were present for at least 75% of those meetings).

AUDIT COMMITTEE REPORT

In May 2000, our audit committee established, and our board adopted, a
formal charter that conforms to the Securities and Exchange Commission ("SEC")
approved American Stock Exchange ("Amex") guidelines. A copy of the charter of
the audit committee adopted by our board is attached as Annex A to this Proxy
Statement.

Our audit committee is primarily responsible for assisting the board in
monitoring the quality and integrity of our accounting, auditing and financial
reporting practices and the independence of our independent accountants which
are hired to audit our financial statements. Our committee conducts an annual
review of its charter to assess its adequacy, such as in adopting the
SEC-approved Amex guidelines in our May 2000 revision of our charter.

We are responsible for preparing our financial statements and our
independent accountants are responsible for auditing those financial statements
and issuing a report thereon. Accordingly, our audit committee's responsibility
is one of oversight Our independent accountant for the fiscal year ended
December 31, 2001, was PricewaterhouseCoopers LLP ("PwC"). As noted below, PwC
was dismissed in April 2002, and Ham, Langston & Brezina, LLP ("HLB") was
engaged to be our independent accountant for the fiscal year ending December 31,
2002. In this regard, our committee discussed with PwC, our independent
accountants for 2001, those matters PwC communicated to and discussed with our
committee under applicable auditing standards, including information regarding
the scope and results of the audit and other matters required to be discussed by
the Statement on Auditing Standards No. 61, "Communication with Audit
Committees." Those communications and discussions were intended to assist the
committee in overseeing the financial reporting and disclosure process. Our
committee also discussed with PwC its independence from us, and received a
written statement from PwC concerning independence as required by Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees." This discussion and disclosure informed our audit committee of the
independence of PwC and assisted our audit committee in evaluating such
independence. Our audit committee also considered whether the provision of
services by PwC not related to the audit of our financial statements and to the
review of our interim financial statements is compatible with maintaining the
independence of PwC. Finally, our audit committee reviewed and discussed with
our management, our internal auditors and PwC our audited consolidated balance
sheet as
5

of December 31, 2001 and 2000, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the two years in the
period ended December 31, 2001. PwC informed our audit committee that our
audited financial statements had been prepared in accordance with accounting
principles generally accepted in the United States.

Based on the review and discussions referred to above, and such other
matters deemed relevant and appropriate by our audit committee, our committee
recommended to our board, and our board approved, that those financial
statements be included in our Annual Report on Form 10-K for the year ended
December 31, 2001.

DIRECTOR COMPENSATION

We do not currently pay any cash director's fees. However, we pay the
expenses, if any, of our directors in attending board meetings. In 1998, our
board adopted a stock option plan (as detailed below) which included
participation in the plan by directors.

EXECUTIVE COMPENSATION

Mr. James Percell became Chief Executive Officer in January, 1996. Our
employment contract with Mr. Percell (the "Employment Agreement"), which
commenced in April 1997, has a term of three years. The Employment Agreement
automatically extends, unless terminated by us or Mr. Percell (upon at least
thirty days written notice prior to the end of the initial term or any
additional one-year term), for additional successive one year periods after the
initial three year term. Mr. Percell's employment contract provides that he
receive annual compensation in the amount of $125,000. In November, 1997, the
Board of Directors increased Mr. Percell's annual compensation to $250,000,
however, during 1998 Mr. Percell agreed to reduce his annual compensation to
$180,000.

SUMMARY COMPENSATION TABLE

<Table>
<Caption>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION PAYOUTS
OTHER AWARDS SECURITIES ALL
NAME AND ANNUAL RESTRICTED UNDERLYING OTHER
PRINCIPAL COMPEN- STOCK OPTIONS/ LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION AWARDS SARS PAYOUTS SATION

James S. Percell 2001 $180,000 -0- -0- -0- -0- -0- -0-
CHIEF 2000 $180,000 -0- -0- -0- -0- -0- -0-
EXECUTIVE 1999 $180,000 -0- -0- -0- -0- -0- -0-
OFFICER
</Table>

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<Table>
<Caption>
NAME AND NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE AT
PRINCIPAL SECURITIES TOTAL ASSUMED ANNUAL RATES OF
POSITION UNDERLYING OPTIONS/SARS STOCK PRICE APPRECIATION FOR
OPTIONS/SARS GRANTED TO OPTION TERM:
GRANTED EMPLOYEES
IN FISCAL EXERCISE OF EXPIRATION
YEAR BASE PRICE DATE 5% 10%

"No Options/SAR Grants made during 2001"
</Table>

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

<Table>
<Caption>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
NAME AND SHARES OPTIONS/SARS AT OPTIONS/SARS AT
PRINCIPAL ACQUIRED ON VALUE FISCAL YEAR-END FISCAL YEAR-END
POSITION EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE

James S. Percell (*) (*) 1,303,042/0 -0-/-0-
CHIEF EXECUTIVE OFFICER
</Table>

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(*) Did not exercise any options.

1998 STOCK OPTION PLAN

While we have been successful in attracting and retaining qualified
personnel, we believe that our future success will depend in part on its
continued ability to attract and retain highly qualified personnel. We pay wages
and salaries which we believe are competitive. We also believe that equity
ownership is an important factor in our ability to attract and retain skilled
personnel, and on December 9, 1998, the Board of Directors approved the 1998
Stock Option Plan (the "Plan") which was approved by the Stockholders at our
1999 annual meeting of stockholders. The Plan will allow Incentive Stock Options
as determined by the Compensation Committee, or the Board of Directors if there
is no compensation committee (the "Committee"). The Board of Directors has
reserved 800,000 shares of Common Stock for issuance pursuant to the Plan. The
purpose of the Plan is to foster and promote our financial success and increase
stockholder value by enabling eligible key employees, directors and consultants
to participate in our long-term growth and financial success of the Company.

ELIGIBILITY. The Plan is open to key employees (including officers and
directors) and our consultants and affiliates ("Eligible Persons").

TRANSFERABILITY. The grants are not transferrable.

CHANGES IN CAPITAL STRUCTURE. The Plan will not effect our right to
authorize adjustments, recapitalizations, reorganizations or other changes in
our capital structure. In the event of an adjustment, recapitalization or
reorganization the award shall be adjusted accordingly. In the event of a
merger, consolidation, or liquidation, the Eligible Person will be eligible to
receive a like number of shares of stock in the new entity. The board may waive
any limitations imposed under the Plan so that all options are immediately
exercisable.

OPTIONS. The Plan provides for both Incentive and Nonqualified Stock
Options.

Option price. Incentive options shall be not less than the greater of (i)
100% of fair market value on the date of grant, or (ii) the aggregate par value
of the shares of stock on the date of grant. The Compensation Committee, at its
option, may provide for a price greater than 100% of fair market value. The
price for Incentive Stock Options for Stockholders owning 10% or more of our
shares ("10% Stockholders") shall be not less than 110% of fair market value.

Amount exercisable-incentive options. In the event an Eligible Person
exercises incentive options during the calendar year whose aggregate fair market
value exceeds $100,000, the exercise of options over $100,000 will be considered
non qualified stock options.

Duration. No option may be exercisable after the expiration date as set
forth in the option agreement.

Exercise of Options. Options may be exercised by written notice to our
President with:

(i) cash, certified check, bank draft, or postal or express money order payable
to Environmental Safeguards, Inc. for an amount equal to the option price
of the shares;

(ii) stock at its fair market value on the date of exercise;

(iii) an election to make a cashless exercise through a registered broker-dealer
(if approved in advance by the Compensation Committee);

(iv) an election to have shares of stock, which otherwise would be issued on
exercise, withheld in payment of the exercise price (if approved in advance
by the Compensation Committee); and/or

(v) any other form of payment which is acceptable to the Compensation Committee,
including without limitation, payment in the form of a promissory note, and
specifying the address to which the certificates for the shares are to be
mailed.

TERMINATION OF OPTIONS.

Termination of Employment. Any Option which has not vested at the time the
Optionee ceases continuous employment for any reason other than death,
disability or retirement shall terminate upon the last day that the Optionee is
employed by us. Incentive Stock Options must be exercised within three months of
cessation of Continuous Service for reasons other than death, disability or
retirement in order to qualify for Incentive Stock Option tax treatment.
Nonqualified Options may be exercised any time during the Option Period
regardless of employment status.

Death. Unless the Option expires sooner, the Option will expire one year
after the death of the Eligible Person.

Disability. Unless the Option expires sooner, the Option will expire one
year after the disability of the Eligible Person.

Retirement. Any Option which has not vested at the time the Optionee
ceases continuous employment due to retirement shall terminate upon the last day
that the Optionee is employed by us. Upon retirement Incentive Stock Options
must be exercised within three months of cessation of Continuous Service in
order to qualify for Incentive Stock Option tax treatment. Nonqualified Options
may be exercised any time during the Option Period regardless of employment
status.

AMENDMENT OR TERMINATION OF THE PLAN. The Committee may amend, terminate
or suspend the Plan at any time, in its sole and absolute discretion; provided,
however, that to the extent required to qualify the Plan under Rule 16b-3
promulgated under Section 16 of the Exchange Act, no amendment that would (a)
materially increase the number of shares of stock that may be issued under the
Plan, (b) materially modify the requirements as to eligibility for participation
in the Plan, or (c) otherwise materially increase the benefits accruing to
participants under the Plan, shall be made without the approval of our
Stockholders; provided further, however, that to the extent required to maintain
the status of any incentive option under the Code, no amendment that would (a)
change the aggregate number of shares of stock which may be issued under
incentive options, (b) change the class of employees eligible to receive
incentive options, or (c) decrease the option price for incentive options below
the fair market value of the stock at the time it is granted, shall be made
without the approval of the Stockholders. Subject to the preceding sentence, the
Board shall have the power to make any changes in the Plan and in the
regulations and administrative provisions under it or in any outstanding
incentive option as in the opinion of our counsel may be necessary or
appropriate from time to time to enable any incentive option granted under this
Plan to continue to qualify as an incentive stock option or such other stock
option as may be defined under the Code so as to receive preferential federal
income tax treatment. No amendment, suspension or termination of the Plan shall
act to impair or extinguish rights in Options already granted at the date of
such amendment, suspension or termination.

Options Granted Under
1998 Stock Option Plan

The following sets forth the options granted under our 1998 Stock Option
Plan:

<Table>
<Caption>
NAME AND POSITION DOLLAR VALUE(1) NUMBER OF OPTIONS
- ------------------------------------------------------ --------------- -----------------

James S. Percell, CEO $210,937 125,000
Executive Group $210,937 125,000
Non-executive Director Group $101,250 60,000
Non-executive Officer
Employee Group $611,720 362,500
</Table>

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(1) Dollar value was calculated based on the exercise price of $1.6875, which
was also the market value per share on the date of the grants.

STOCK PRICE PERFORMANCE GRAPH

The performance graph as set forth below compares the cumulative total
stockholder return of our Common Stock from December 31, 1995 through December
31, 2001, with Standard & Poors 500 Index (our Broad Market Index) and with
Standard & Poors Oil Composite Index (our Peer Group Index). The graph assumes
that the value of the investment in our Common Stock and each index was $100 on
December 31, 1995, and that all dividends, if any, were reinvested. The
comparisons in this table are not intended to forecast or be indicative of
possible future price performance.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN OF
ENVIRONMENTAL SAFEGUARDS, INC., THE S&P 500 INDEX (BROAD
MARKET INDEX), AND THE S&P OIL COMPOSITE INDEX (PEER GROUP INDEX)

<Table>
<Caption>
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----

Environmental Safeguards, Inc.............. 100 104 42 27 6 10
Broad Market Index......................... 100 131 166 198 178 155
Peer Group Index........................... 100 120 127 147 156 143
</Table>

[PERFORMANCE GRAPH]

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of April 12, 2002,
with respect to the beneficial ownership of shares of Common Stock by (i) each
person who is known by us to beneficially own more than 5% of the outstanding
shares of Common Stock, (ii) each of our directors, (iii) each of our executive
officers, and (iv) all executive officers and directors as a group. Unless
otherwise indicated, each stockholder has sole voting and investment power with
respect to the shares shown.

<Table>
<Caption>
NUMBER OF PERCENT CLASS OF
NAME SHARES OWNED(1) OF CLASS SECURITIES
---- --------------- -------- ------------

James S. Percell 1,486,960(2) 13.0% Common Stock
2600 South Loop West, Ste #645
Houston, Texas 77054
Bryan Sharp 1,132,264(3)(10) 10.1% Common Stock
3200 Wilcrest, #200
Houston, Texas 77042
Albert M. Wolford 129,346(4)(10) 1.3% Common Stock
2600 South Loop West, Ste #645
Houston, Texas 77054
Thomas R. Bray -0- 0% Common Stock
2600 South Loop West, Ste #645
Houston, Texas 77054
David L. Warnock 7,683,663(5)(6)(10) 43.2% Common Stock
One South Street, Ste #2150
Baltimore, Maryland 21202
Edward L. Cahill 7,663,663(5)(6) 43.1% Common Stock
One South Street, Ste #2150
Baltimore, Maryland 21202
Donald W. Hughes 7,663,663(5)(6) 43.1% Common Stock
One South Street, Ste #2150
Baltimore, Maryland 21202
George Stelljes III 7,663,663(5)(6) 43.1% Common Stock
One South Street, Ste #2150
Baltimore, Maryland 21202
Strategic Associates, L.P. 7,663,663(5)(6) 43.1% Common Stock
One South Street, Ste #2150
Baltimore, Maryland 21202
Cahill, Warnock Strategic
Partners, L.P. 7,663,663(5)(6) 43.1% Common Stock
One South Street, Ste #2150
Baltimore, Maryland 21202
Ronald L. Bianco 129,516(8) 1.3% Common Stock
2600 South Loop West, Ste 645
Houston, Texas 77054
Newpark Resources, Inc. 6,909,770(7)(9) 40.6% Common Stock
3850 N. Causeway, Ste #1770
Metairie, LA 70002-1756
</Table>

<Table>
<Caption>
NUMBER OF PERCENT CLASS OF
NAME SHARES OWNED(1) OF CLASS SECURITIES
---- --------------- -------- ------------

Nadia, L.L.C. 593,500 5.9% Common Stock
Grosvenot Trust Co.
33 Church Street
Hamilton, Bermuda
All officers and directors as a
Group (6 persons) 10,561,749 51.7% Common Stock
</Table>

- ---------------

(1) Under the rules of the Securities and Exchange Commission (the
"Commission"), a person who directly or indirectly has or shares voting
power or investment power with respect to a security is considered a
beneficial owner of the security. Voting power is the power to vote or
direct the voting of shares, and investment power is the power to dispose
of or direct the disposition of shares. Shares as to which voting power or
investment power may be acquired within 60 days are also considered as
beneficially owned under the Commission's rules and are, accordingly,
included as shares beneficially owned.

(2) Includes an option to purchase 800,000 shares of our Common Stock at $0.60
per share, and options to purchase 378,022 shares of our Common Stock at
$1.44 per share. Also includes an option to purchase 125,000 shares of our
Common Stock at $1.69 per share. These options are fully vested and
immediately exercisable.

(3) Includes an option to purchase 800,000 shares of our Common Stock at $0.60
per share, an option to purchase 301,267 shares of our Common Stock at
$3.00 per share, and an option to purchase 10,997 shares of our Common
Stock at $5.00 per share. These options are fully vested and immediately
exercisable.

(4) Includes options to purchase 43,346 shares of our Common Stock at $1.44 per
share. These options are fully vested and immediately exercisable.

(5) Includes 1,722,900 shares of Series B Convertible Preferred Stock and
warrants to purchase 599,717 shares of our Common Stock at $0.01 per share
issued to Cahill, Warnock Strategic Partners Fund, L.P. ("Cahill Warnock
Fund"), whose sole general partner is Cahill, Warnock Strategic Partners,
L.P. ("Cahill Warnock Partners"). In addition, includes 95,464 shares of
Series B Convertible Preferred Stock and warrants to purchase 33,230 shares
of our Common Stock at $0.01 per share issued to Strategic Associates, L.P.
("Strategic Associates"), whose sole general partner is Cahill Warnock
Partners. Each share of Series B Convertible Preferred Stock is immediately
convertible into one share of our Common Stock, subject to adjustment under
certain conditions. The warrant is fully vested and immediately
exercisable. David L. Warnock, Edward L. Cahill, Donald W. Hughes and
George Stelljes III are the general partners of Cahill Warnock Partners.
David L. Warnock, Edward L. Cahill, Donald W. Hughes and George Stelljes
III are the control persons of Cahill Warnock Fund, Cahill Warnock Partners
and Strategic Associates. David L. Warnock, Edward L. Cahill, Donald W.
Hughes, George Stelljes III, Cahill Warnock Fund, Cahill Warnock Partners
and Strategic Associates have shared voting power and shared dispositive
power of these shares and each disclaim beneficial ownership of the shares
and warrants, except with respect to their pecuniary interest therein, if
any.

(6) Includes 4,938,703 shares of our Common Stock which would arise upon the
conversion of 182,732 shares of our Series D Convertible Preferred Stock,
issued to the Cahill Warnock Fund, whose sole general partner is Cahill
Warnock Partners. Also includes 273,649 shares of our Common Stock which
would arise upon the conversion of 10,125 shares of our Series D
Convertible Preferred Stock, issued to Strategic Associates, whose sole
general partner is Cahill Warnock Partners. These Preferred shares are
immediately convertible into our Common Stock.

(7) Includes 5,405,405 shares of our Common Stock which would arise upon the
conversion of 200,000 shares of our Series D Convertible Preferred Stock,
issued to Newpark Resources, Inc. These Preferred shares are immediately
convertible into our Common Stock.

(8) Includes an option to purchase 69,516 shares of our Common Stock at $1.44
per share. Also includes an option to purchase 50,000 shares of our Common
Stock at $1.69 per share. These options are fully vested and immediately
exercisable.

(9) Includes 847,975 shares of Series B Convertible Preferred Stock which are
immediately convertible into shares of Common Stock. The number of shares
of Common Stock into which each share of Preferred Stock may be converted
is presently one share of Common Stock for each share of Series B
Convertible Preferred Stock, subject to adjustment under certain
conditions. Also includes warrants to purchase 656,390 shares of our Common
Stock at $0.01 per share. The warrant is fully vested and immediately
exercisable.

(10) Also includes an option to purchase 20,000 shares of our Common Stock at
$1.69 per share. These options are fully vested and immediately
exercisable.

We know of no arrangement or understanding which may at a subsequent date
result in a change of control.

RELATED TRANSACTIONS

Our Board of Directors has adopted a policy that our affairs will be
conducted in all respects by standards applicable to publicly-held corporations
and that we will not enter into any transactions and/or loans between us and our
officers, directors and 5% stockholders unless the terms are no less favorable
than could be obtained from independent, third parties and will be approved by a
majority of our independent, disinterested directors.

In March 2001 and September 2000, we entered into agreements with our
primary lenders and holders of our outstanding preferred stock to defer various
principal and interest payments on our senior debt. The senior debt was fully
repaid in December 2001.

During 1998, we entered into a marketing assistance agreement with the
minority owners of OnSite Colombia, Inc. Under the terms of the agreement, in
exchange for assisting us in our business expansion efforts, the minority owners
and we each received marketing assistance fees totaling $320,000 during each of
the years ended December 31, 2000 and 1999. The agreements were terminated in
2001.

During December 1998, we formed a joint company, OnSite Arabia, Inc. with
an investor group for the purpose of providing environmental remediation in the
Arabian gulf region. We sold two ITD units to the newly formed joint company
(one in 1999 and one in 1998) and recognized gains to the extent proceeds
received exceeded our proportional basis in the assets.
- --------------------------------------------------------------------------------

(2) TO RATIFY THE SELECTION OF HAM, LANGSTON & BREZINA, LLP
AS INDEPENDENT ACCOUNTANTS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002.
- --------------------------------------------------------------------------------

The Board of Directors dismissed PricewaterhouseCoopers LLP ("PwC") as its
independent accountants on April 2, 2002, and appointed Ham, Langston & Brezina,
LLP ("HLB") as our independent accountants for the current fiscal year. The
Board of Directors wishes to obtain from the Stockholders a ratification of
their action in appointing HLB as independent accountants for the fiscal year
ending December 31, 2002. Such ratification requires the affirmative vote of a
majority of the shares of Common Stock present or represented by proxy and
entitled to vote at the Annual Meeting.

In the event the appointment of HLB as independent accountants is not
ratified by the Stockholders, the adverse vote will be considered as a direction
to the Board of Directors to select other independent accountants for the fiscal
year ending December 31, 2002.

A representative of HLB is expected to be present at the Annual Meeting.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF HAM, LANGSTON & BREZINA, LLP AS INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR
ENDING DECEMBER 31, 2002.

PwC audited our financial statements for the three years ended December 31,
2001, and were dismissed on April 2, 2002. We engaged HLB as our new independent
accountants on April 3, 2002. Our Audit Committee and Board of Directors
participated in and approved the decision to change independent accountants. We
timely advised the Securities and Exchange Commission of our change in
independent accountants on Form 8-K.

The reports of PwC on the financial statements noted above contained no
adverse opinion or disclaimer of opinion and were not qualified as to audit
scope or accounting principle, however, the reports for the two years ended
December 31, 2001, were modified to express substantial doubt with respect to
our ability to continue as a going concern.

In connection with the PwC audits noted above, and through April 2, 2002,
there were no disagreements with PwC on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of PwC would have caused them
to make reference thereto in their report on the financial statements for such
years. During the fiscal years noted above, and through April 2, 2002, there
have been no reportable events requiring disclosure.

We have authorized PwC to respond fully to inquiries from HLB regarding the
disclosure of the change in independent accountants.

As noted above, we engaged HLB as our new independent accountants as of
April 3, 2002. Prior to their engagement as our independent accountants, and
through April 3, 2002, we had not consulted with HLB regarding either the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
our financial statements or any other financial presentation whatsoever.

PwC has provided a letter addressed to the Securities and Exchange
Commission pursuant to Regulation S-K Item 304 as to whether PwC agrees with the
disclosure we made in our Form 8-K filing noted above, and such letter was
attached to our 8-K report.

FEES PAID TO PRICEWATERHOUSECOOPERS LLP

Audit Fees

The aggregate fees for professional services rendered by PwC for the audit
of our financial statements for the year ended December 31, 2001 and the reviews
of our financial statements included in our Forms 10-Q for such year were
approximately $130,000.

Financial Information Systems Design and Implementation Fees

PwC did not provide us any financial information systems design and
implementation services for the year ended December 31, 2001.

All Other Fees

The aggregate fees for all other services rendered by PwC for the year
ended December 31, 2001 were approximately $8,000.
- --------------------------------------------------------------------------------

(3) OTHER MATTERS
- --------------------------------------------------------------------------------

The Board of Directors is not aware of any other matters to be presented
for action at the Annual Meeting. However, if any other matter is properly
presented at the Annual Meeting, it is the intention of the persons named in the
enclosed proxy to vote in accordance with their best judgement on such matters.

FUTURE PROPOSALS OF STOCKHOLDERS

The deadline for stockholders to submit proposals to be considered for
inclusion in the Proxy Statement for the year 2003 Annual Meeting of
Stockholders is September 27, 2002.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ James S. Percell
Chairman of the Board and President

Houston, Texas

ANNEX A
ENVIRONMENTAL SAFEGUARDS, INC.
Audit Committee Charter
Adopted by the Board of Directors May 30, 2000

ORGANIZATION.

There shall be a committee of our board of directors ("board") to be known
as the audit committee ("committee"). This charter governs the operations of the
committee. The committee shall review and reassess the charter at least annually
and obtain the approval of our board. The committee shall be appointed by our
board and shall be comprised of at least three directors, each of whom are
independent of our management and our company.

Members of the committee shall be considered independent if they have no
relationship that may interfere with the exercise of their independence from our
management and our company. Examples of such relationships include a director
who has: (i) been employed by us or any of our affiliates for the current year
or any of the past three years; (ii) accepted any compensation from us or any of
our affiliates in excess of $60,000 during the previous fiscal year (except for
board service, retirement plan benefits, or non-discretionary compensation);
(iii) an immediate family member who is, or has been in any of the past three
years, employed by us or any of our affiliates as an executive officer; (iv)
been a partner, controlling shareholder or an executive officer of any
for-profit business to which our company has made, or from which we have
received, payments (other than those which arise solely from investments in our
company's securities) that exceed five percent of our consolidated gross
revenues for that year, or $200,000, whichever is more, in any of the past three
years; or (v) been employed as an executive of another entity where any of our
executives serve on that entity's compensation committee. Under exceptional and
limited circumstances, however, the SEC-approved Amex rules allow for one
non-independent member to serve on the committee, provided that the board
determines it to be in the best interests of our company and our shareholders,
and our board discloses the reasons for the determination in our company's next
annual proxy statement. Current employees or officers, or their immediate family
members, however, are not able to serve on the committee under this exception.

All committee members shall be financially literate, or shall become
financially literate within a reasonable period of time after appointment to the
committee, and at least one members shall have accounting or related financial
management expertise.

STATEMENT OF POLICY

Our committee shall provide assistance to our board in fulfilling their
oversight responsibility to the shareholders, potential shareholders, the
investment community, and others relating to our financial statements and our
financial reporting process, our systems of internal accounting and financial
controls, our audit function, and the annual independent audit of our financial
statements. In doing so, it is the responsibility of our committee to maintain
free and open communication between themselves, our independent auditors, our
internal auditors and our management. In discharging their oversight role, our
committee is empowered to investigate any matter brought to their attention
within the scope of their duties with full access to all books, records,
facilities, and personnel, and the power to retain outside counsel, or other
experts for this purpose.

RESPONSIBILITIES AND PROCESSES

The primary responsibility of our committee is to oversee our financial
reporting process on behalf of the board and report the results of their
activities to our board. Our management is responsible for preparing our
financial statements, and our independent auditors are responsible for auditing
those financial statements. Our committee, in carrying out their
responsibilities, believe their policies and procedures should remain flexible,
in order to best react to changing conditions and circumstances. Our committee
should oversee management's efforts to take the appropriate actions to set the
overall corporate "tone" for quality financial reporting, sound business risk
practices, and ethical behavior.

The following shall be the principal recurring processes of our committee
in carrying out their oversight responsibilities. The processes are set forth as
a guide with the understanding that our committee may supplement them as
appropriate.

1. Our committee shall have a clear understanding with management and our
independent auditors that our independent auditors are ultimately accountable
to our board and our committee, as representatives of our shareholders. Our
committee shall have the ultimate authority and responsibility to evaluate
and, where appropriate, replace our independent auditors. Our committee shall
discuss with our auditors their independence from our management and our
company and the matters included in the written disclosures required by the
Independence Standards Board. Annually, our committee shall review and
recommend to our board the selection of our independent auditors, subject to
shareholder approval.

2. Our committee shall discuss with our management, our internal auditors, and
our independent auditors the adequacy and effectiveness of our accounting and
financial controls. Further, our committee shall meet separately with our
internal auditors and our independent auditors, with and without our
management present, to discuss the results of their examinations.

3. Our committee shall review our interim financial statements with our
management and our independent auditors prior to the filing of our Quarterly
Report on Form 10-Q, either telephonically or in person. Also, our committee
shall discuss the results of the quarterly review and any other matters
required to be communicated to our committee by our independent auditors
under generally accepted auditing standards. The chairperson of our committee
may represent our entire committee for the purposes of this review.

4. Our committee shall review with management and our independent auditors the
financial statements to be included in our Annual Report on Form 10-K, either
telephonically or in person, including their judgment about the quality, not
just acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in our financial
statements. Also, our committee shall discuss the results of our annual audit
and any other matters required to be communicated to our committee by our
independent auditors under generally accepted auditing standards.

PROXY

FOR VOTING BY HOLDERS OF COMMON STOCK

ENVIRONMENTAL SAFEGUARDS, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 2002

The undersigned hereby appoints James S. Percell and Ronald L. Bianco, and
each of them as the true and lawful attorneys, agents and proxies of the
undersigned, with full power of substitution, to represent and to vote all
shares of Common Stock of Environmental Safeguards, Inc. held of record by the
undersigned on April 12, 2002 at the Annual Meeting of Stockholders to be held
on May 20, 2002 at 10:00 AM at the Holiday Inn Astrodome, 8111 Kirby Drive,
Houston, Texas, and at any adjournments thereof. Any and all proxies heretofore
given are hereby revoked.

WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR THE NOMINEES
LISTED IN NUMBER 1A, AND FOR THE RATIFICATION IN NUMBER 2.

1A. ELECTION OF OUR DIRECTORS. (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH, OR OTHERWISE STRIKE, THAT
NOMINEE'S NAME IN THE LIST BELOW.)

[ ] FOR all nominees listed [ ] WITHHOLD authority to vote for except as
below marked to the contrary all nominees below

James S. Percell Thomas R. Bray Bryan Sharp Albert M. Wolford

2. PROPOSAL TO RATIFY THE SELECTION OF HAM, LANGSTON & BREZINA, LLP AS
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. 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.

- --------------------------------------------- -----------------------------
Number of Shares of Common Stock Owned Signature

- ---------------------------------------------
(Typed or Printed Name)

- ---------------------------------------------
Signature if held jointly

- ---------------------------------------------
(Typed or Printed Name)

DATED:
---------------------------------------

THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED
AT THE MEETING. PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY PROMPTLY.

PROXY

FOR VOTING BY HOLDERS OF SERIES B CONVERTIBLE STOCK

ENVIRONMENTAL SAFEGUARDS, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 2002

The undersigned hereby appoints James S. Percell and Ronald L. Bianco, and
each of them as the true and lawful attorneys, agents and proxies of the
undersigned, with full power of substitution, to represent and to vote all
shares of Series B Convertible Stock of Environmental Safeguards, Inc. held of
record by the undersigned on April 12, 2002 at the Annual Meeting of
Stockholders to be held on May 20, 2002 at 10:00 AM at the Holiday Inn
Astrodome, 8111 Kirby Drive, Houston, Texas, and at any adjournments thereof.
Any and all proxies heretofore given are hereby revoked.

WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR THE NOMINEE
LISTED IN NUMBER 1B AND FOR THE RATIFICATION IN NUMBER 2.

1B. ELECTION OF ONE DIRECTOR. (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH, OR OTHERWISE STRIKE, THAT
NOMINEE'S NAME IN THE LIST BELOW.)

[ ] FOR the nominee listed [ ] WITHHOLD authority to vote for except as
below marked to the contrary all nominees below

David L. Warnock

2. PROPOSAL TO RATIFY THE SELECTION OF HAM, LANGSTON & BREZINA, LLP AS
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

- ----------------------------------------------------
Number of Shares of Series B Convertible Stock Owned

- ----------------------------------------------------
(Typed or Printed Name)

- ----------------------------------------------------
Signature if held jointly

- ----------------------------------------------------
(Typed or Printed Name)

DATED:
----------------------------------------------

THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED
AT THE MEETING. PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY PROMPTLY.