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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-1(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Superior Services, Inc.
_________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
__________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
________________________________________________________________
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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
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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.
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4) Date Filed:
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<PAGE>
SUPERIOR SERVICES, INC.
10150 West National Avenue
West Allis, Wisconsin 53227
_____________________________
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 13, 1997
_____________________________
To the Shareholders of
Superior Services, Inc.:
NOTICE IS HEREBY GIVEN THAT the 1997 Annual Meeting of
Shareholders of Superior Services, Inc. will be held on Tuesday, May 13,
1997, at 1:00 p.m., at the offices of Foley & Lardner, 40th Floor, 777
East Wisconsin Avenue, Milwaukee, Wisconsin, for the following purposes:
1. To elect two directors for three-year terms.
2. To consider and act upon any other business which may be
properly brought before the meeting or any adjournment
thereof.
Only holders of record of the Common Stock at the close of
business on April 2, 1997, will be entitled to notice of, and to vote at,
the annual meeting and any adjournment thereof.
Shareholders are cordially invited to attend the meeting in
person. Even if you expect to attend the meeting in person, to help
ensure that your vote is represented at the meeting please complete, sign,
date, and return the accompanying proxy in the enclosed postage paid
envelope. You may revoke your proxy at any time before it is actually
voted by notice in writing to the undersigned or by voting in person at
the meeting.
Accompanying this Notice of 1997 Annual Meeting of Shareholders
is a form of proxy and proxy statement.
On Behalf of the Board of Directors
/s/ Peter J. Ruud
Peter J. Ruud, Secretary
West Allis, Wisconsin
April 7, 1997
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED RETURN
ENVELOPE.
<PAGE>
SUPERIOR SERVICES, INC.
_____________________________
PROXY STATEMENT
_____________________________
Annual Meeting of Shareholders
May 13, 1997
This Proxy Statement and accompanying proxy are being furnished
to the shareholders of Superior Services, Inc. (the "Company") beginning
on or about April 7, 1997, in connection with the solicitation by the
Board of Directors ("Board") of the Company of proxies to be voted at its
1997 Annual Meeting of Shareholders to be held on Tuesday, May 13, 1997,
at 1:00 p.m., at the offices of Foley & Lardner, 40th Floor, 777 East
Wisconsin Avenue, Milwaukee, Wisconsin and at any adjournment thereof
(collectively, the "Meeting").
Only record holders of outstanding shares of the Company's
Common Stock ("Common Stock") as of the close of business on April 2, 1997
("Record Date") are entitled to notice of, and to vote at, the Meeting.
As of the Record Date, 17,485,140 shares of Common Stock were outstanding.
The record holder of each outstanding share of Common Stock as of the
Record Date is entitled to one vote per share for each proposal submitted
for shareholder consideration at the meeting.
Execution of a proxy given in response to this solicitation will
not affect a shareholder's right to attend the Meeting and to vote in
person. The presence at the Meeting of a shareholder who has signed a
proxy does not in itself revoke a proxy. Any shareholder giving a proxy
may revoke it at any time before it is exercised by giving notice thereof
to the Company's Secretary in writing, by notifying the appropriate
personnel at the Meeting in writing or by voting in person at the Meeting.
Unless so revoked, the shares represented by proxies received by the Board
will be noted at the Meeting in accordance with the instructions thereon.
If no instructions are specified on the proxy, the votes represented
thereby will be voted (i) FOR the Board's two director nominees set forth
below and (ii) on such other shareholder matters which may properly come
before the Meeting in accordance with the best judgment of the persons
named as proxies.
<PAGE>
ELECTION OF DIRECTORS
General
Two members of the Board are to be elected at the Meeting for
three-year terms to expire at the Company's annual meeting of shareholders
held in the year 2000. Gary G. Edler and Warner C. Frazier are the
Board's nominees for such directorships.
The Articles of Incorporation and By-laws of the Corporation
provide that the Board shall be divided into three classes, with one class
being elected each year for a three-year term. Class I Directors will be
elected at the Meeting. The terms of the Class II Directors and Class III
Directors will expire at the Company's annual meetings in 1998 and 1999,
respectively. Stephen G. Woodsum, a director of the Company and a member
of the Audit, Compensation and Acquisition Committees, whose term expires
as of the Meeting has advised the Company that he will not stand for re-
election. The Board wishes to express its gratitude to Mr. Woodsum for
his service as a director since 1993 and for the valuable counsel he has
provided to the Company.
It is intended that the persons named as proxies in the
accompanying proxy will vote FOR the election of the Board's two nominees.
If any nominee should become unable to serve as a director prior to the
Meeting, the shares represented by proxies otherwise voted in favor of the
Board's two nominees or which do not contain any instructions will be
voted FOR the election of such other person as the Board may recommend.
Under Wisconsin law, directors are elected by a plurality of the votes
cast by the shares entitled to vote in the election, assuming a quorum is
present. For this purpose, "plurality" means that the individuals
receiving the largest number of votes are elected as directors, up to the
maximum number of directors to be chosen at the election. Therefore, any
shares of Common Stock which are not voted on this matter at the Meeting,
whether by abstention, or otherwise, will have no effect on the election
of directors at the Meeting.
Continuing Directors, Executive Officers and Nominees
Certain information about the Board's nominees and its
continuing members and the executive officers of the Company is set forth
below. All members of the Board, except Mr. Frazier, have previously been
elected to the Board by the Company's shareholders.
Name Age Company Position Director Since
Joseph P. Tate . . . . . 53 Chairman and July, 1992
Director (Class III)
G. William Dietrich (1) . 51 President, Chief Sept., 1994
Executive Officer
and Director (Class
II)
Gary G. Edler . . . . . . 50 Vice President- July, 1992
Projects and
Director (Class I)
Francis J. Podvin (1)(2) 55 Director (Class II) July, 1992
Donald Taylor (2)(3) . . 69 Director (Class II) March, 1996
Walter G. Winding (2)(3) 55 Director (Class III) March, 1996
Warner C. Frazier . . . . 64 Director Nominee
(Class I)
George K. Farr . . . . . 38 Chief Financial
Officer and
Treasurer
Peter J. Ruud . . . . . . 43 Vice President,
General Counsel and
Secretary
____________________
(1) Member of the Acquisition Committee.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
Joseph P. Tate is a co-founder of the Company. Mr. Tate has
more than 26 years of experience in the solid waste services industry. In
1967, Mr. Tate founded the "Valley Group" of companies that was part of
the original consolidation which created the Company in 1993 (the
"Consolidation") and, prior to the Consolidation, was a shareholder,
officer and director of each of these companies. Since the Consolidation
he has continued to serve in various executive capacities with certain of
the Company's subsidiaries. From January 1993 until August 1994, Mr. Tate
served as Chief Executive Officer of the Company. Mr. Tate has been a
member of the Board since the Company's original incorporation in July
1992 and has been Chairman of the Board of the Company since January 1993.
Mr. Tate serves as a member of Class III of the Board, with a term through
the Company's 1999 annual shareholders meeting.
G. William Dietrich joined the Company in February 1994 as Vice
President-Solid Waste and was promoted to President and Chief Operating
Officer in September 1994, with management responsibility for all of the
Company's operations. Mr. Dietrich was promoted to President and Chief
Executive Officer in November 1995. Prior to his employment by the
Company, Mr. Dietrich was employed for over two and one-half years by BFI
(a national solid waste company), as a divisional vice president
responsible for BFI's solid waste collection, transportation and disposal
operations in Eastern and Northern Ontario. Prior thereto, Mr. Dietrich
was a district manager for Laidlaw (a national solid waste company) for
three years with principal responsibility for Laidlaw's solid waste
operations in a substantial portion of the Northeastern United States.
Mr. Dietrich has been a director of the Company since September 1994 and
serves as a member of Class II of the Board, with a term through the
Company's 1998 annual shareholders meeting.
Gary G. Edler is a co-founder of the Company and has more than
28 years of experience in the solid waste services industry. Mr. Edler
joined the Company at the time of the Consolidation as Vice President in
charge of the Company's wastewater biosolids and nonhazardous liquid waste
management operations. For 25 years prior to joining the Company, he
served as President of the "E&K Group" of companies that was a part of the
Consolidation. Mr. Edler has been a director of the Company since the
Company's original incorporation in July 1992 and serves as a member of
Class I of the Board, with a term through the Company's 1997 annual
shareholders meeting. Mr. Edler has been nominated to continue serving us
as a member of Class I of the Board, with a term through the Company's
2000 annual shareholders meeting.
Francis J. Podvin has been a principal in the law firm of Nash,
Podvin, Tuchscherer, Huttenburg, Weymouth & Kryshak, S.C., Wisconsin
Rapids, Wisconsin, since 1965, currently serving as its President, and
specializes in business combinations, banking and corporate finance. Mr.
Podvin has been a director of the Company since the Company's original
incorporation in July 1992 and serves as a member of Class II of the
Board, with a term through the Company's 1998 annual shareholders meeting.
Nash, Podvin, Tuchscherer, Huttenburg, Weymouth & Kryshak, S.C. has from
time to time performed, and is expected to continue to perform, legal
services for the Company.
Donald Taylor has been a principal in Sullivan Associates
(specialists in board of directors searches), Milwaukee, Wisconsin, since
1992. Mr. Taylor served as Managing Director of U.S.A. Anatar
Investments, Ltd. (a venture capital firm) from 1989 to 1992, and prior
thereto as Chairman and Chief Executive Officer of Rexnord, Inc. (a
manufacturer of power transmission equipment), Milwaukee, Wisconsin. Mr.
Taylor is a director of Johnson Controls, Inc., Banta Corporation and
Harnischfeger Industries, Inc. Mr. Taylor serves as a member of Class II
of the Board of Directors, with a term through the Company's 1998 annual
shareholders meeting.
Walter G. Winding has been the owner and Chief Executive Officer
of Winding and Company (business consultants for closely-held companies),
Hartland, Wisconsin, since 1995. From January 1994 to January 1996 Mr.
Winding was Senior Vice President of HM Graphics Inc. (commercial printing
company), West Allis, Wisconsin. For six years prior thereto, Mr. Winding
served as President and Chief Executive Officer of Schweiger Industries,
Inc. (furniture manufacturer), Jefferson, Wisconsin, and prior thereto was
Schweiger's Vice President-Administration for four years. Prior thereto,
Mr. Winding served in various management positions with Jos. Schlitz
Brewing Company, Milwaukee, Wisconsin. Mr. Winding currently serves on
numerous boards of directors of privately-held companies. Mr. Winding
serves as a member of Class III of the Board, with a term through the
Company's 1999 annual shareholders meeting.
Warner C. Frazier has been the Chairman and Chief Executive
Officer of Simplicity Manufacturing, Inc. (a manufacturer of lawn and
garden power equipment), Port Washington, Wisconsin, since 1983, and also
served as President of that firm from 1980 to 1996 and as Vice President
of Marketing from 1976 to 1980. Prior thereto, Mr. Frazier served in
various management positions with Allis-Chalmers, in Milwaukee, Wisconsin,
Los Angeles, California, and Seattle, Washington. Mr. Frazier currently
serves on the board of directors of Rexworks, Inc. and Northwestern Steel
& Wire Co. and several privately-held companies. Mr. Frazier has been
nominated to serve as a member of Class I of the Board, with a term
through the Company's 2000 annual shareholders meeting.
George K. Farr joined the Company in February 1993 as Corporate
Controller, with financial reporting responsibility for all of Superior's
operating locations. In December 1994, he was promoted to Chief Financial
Officer of the Company, with responsibility for the oversight of all of
the Company's financial matters. Prior to joining the Company, he served
as the Market Development Controller for Sanifill, Inc. (a solid waste
service company), Houston, Texas, from February 1991 to July 1992, where
he was responsible for supervising the financial due diligence process and
subsequent integration of Sanifill's major acquisitions. Prior thereto,
he held various financial management positions, including Executive Vice
President-Finance and Administration, at BancPlus Savings Association (a
savings and loan institution), Houston, Texas, for five years.
Peter J. Ruud joined the Company in September 1993 as Vice
President-General Counsel and Corporate Secretary, with responsibility for
all of the Company's legal matters. In November 1995, Mr. Ruud also
assumed oversight responsibility for the Company's human resources and
health and safety functions. Prior to joining the Company, Mr. Ruud was
in private practice with the law firm of Davis & Kuelthau, S.C.,
Milwaukee, Wisconsin, since 1978, specializing in environmental and
corporate law and regulatory compliance. Mr. Ruud also served as a member
of the firm's managing Board of Directors. While a shareholder of Davis &
Kuelthau, S.C., Mr. Ruud was actively involved in the formation of the
Company and the Consolidation.
Board Committees and Meetings of the Board
The Board has established three standing committees, the Audit
Committee, the Compensation Committee, and the Acquisition Committee to
exercise certain of the Board's functions and to assist the Board in the
discharge of its responsibilities. The Board as a whole nominates
directors for election and will consider nominees recommended in writing
by shareholders, together with appropriate background data, if such
recommendations are made in accordance with the Company's By-laws.
During 1996, eight (8) meetings of the Board were held. No
director was absent from any meeting of the Board and committees thereof
on which he served during 1996.
The Audit Committee's principal functions are to recommend
annually a firm of independent certified public accountants to serve as
the Company's auditor, to meet with and review reports of the Company's
auditor, approve the audit fee payable to the auditors, to recommend to
the Board such actions within the scope of its authority as it deems
appropriate, and to approve related party transactions. The Audit
Committee currently consists of Stephen Woodsum (Chairman), Donald Taylor,
and Walter Winding. The Audit Committee met twice in 1996. Assuming he
is elected as a director at the meeting, Warner C. Frazier will replace
Mr. Woodsum on the Audit Committee. At such time, the Board will select
the Chairman of the Audit Committee.
The Compensation Committee, which met three times in 1996, is
responsible for reviewing and approving the compensation, bonuses, and
benefits of officers and other key employees of the Company and its
subsidiaries and the administration of the Company's 1993 Incentive Stock
Option Plan and 1996 Equity Incentive Plan. The Compensation Committee
currently consists of entirely independent directors, including Francis J.
Podvin (Chairman), Stephen Woodsum, Donald Taylor, and Walter Winding.
See "Executive Compensation - Report on Executive Compensation." Assuming
he is elected as a director at the meeting, Mr. Frazier will replace Mr.
Woodsum as a member of the Compensation Committee.
The Acquisition Committee, which met numerous times formally and
informally throughout 1996, is authorized to approve acquisitions on
behalf of the Company involving cash consideration which does not exceed
$2,500,000. The chairman of the Acquisition Committee is Mr. Dietrich and
its other members currently are Mr. Woodsum and Mr. Podvin. Assuming he
is elected as a director at the meeting, Mr. Frazier will replace Mr.
Woodsum as a member of the Acquisition Committee.
STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of the
Record Date with respect to the beneficial ownership of Common Stock by
(a) all persons or entities known to the Company to be the beneficial
owner of more than five percent or more of the Common Stock; (b) each
Executive Officer named in the Summary Compensation Table set forth below;
(c) each of the current directors and nominees; and (d) all executive
officers and directors as a group. Unless otherwise noted, each person
has sole investment and voting power with respect to the shares indicated
(subject to applicable marital property laws).
Shares beneficially owned
Name of beneficial owner Number Percent
Joseph P. Tate(1)(2)(4) . . . . . . . . . . 2,754,506 15.7%
G. William Dietrich(3)(4) . . . . . . . . . 228,808 1.3%
George K. Farr(4) . . . . . . . . . . . . . 85,049 *
Peter J. Ruud(4) . . . . . . . . . . . . . 22,130 *
Gary G. Edler(1) . . . . . . . . . . . . . 648,688 3.7%
Francis J. Podvin(5) . . . . . . . . . . . 37,264 *
Donald Taylor . . . . . . . . . . . . . . . 3,833 *
Walter G. Winding . . . . . . . . . . . . . 3,833 *
Warner C. Frazier . . . . . . . . . . . . . 0 *
All executive officers and continuing
directors as a group (9 persons)(4) . . . . 3,784,111 21.2%
__________________
*Indicates less than 1%.
(1) Address is c/o 10150 West National Avenue, Suite 350, West
Allis, Wisconsin 53227. The listed number of shares for Mr.
Edler includes 1,300 shares owned by Mr. Edler's spouse.
(2) The listed shares include 293,700 shares owned by a trust
established by Mr. Tate, in which Mr. Tate acts as trustee.
(3) The listed shares include 1,000 shares owned by Mr. Dietrich's
spouse.
(4) The shares listed for Messrs. Tate, Dietrich, Farr and Ruud
include 2,075, 227,608, 84,949, and 22,130 shares, respectively,
subject to acquisition upon the exercise of stock options
currently exercisable or exercisable within 60 days of the
Record Date. See "Executive Compensation - Stock Options." The
shares listed for Messrs. Edler, Podvin, Taylor and Winding
include 699, 3,333, 3,333, and 3,333 shares, respectively,
subject to acquisition upon the exercise of stock options
currently exercisable within 60 days of the Record Date. The
shares listed for all executive officers and continuing
directors as a group include 347,460 shares subject to
acquisition upon exercise of stock options currently exercisable
or exercisable within 60 days of the Record Date.
(5) The listed shares include 13,000 shares owned by Mr. Podvin's
spouse.
EXECUTIVE COMPENSATION
Report on Executive Compensation
The Compensation Committee of the Board of Directors of the
Company is responsible for reviewing and approving the compensation
program for the Company's executive officers, including the Chairman of
the Board and the President/Chief Executive Officer. The philosophy
underlying the Company's executive compensation program is that executive
compensation should be designed and implemented in a manner which
attracts, motivates, and retains qualified senior managers, including its
executive officers, who are committed to achieving sustainable growth in
shareholder value.
The Company's executive compensation program includes base
salary, cash bonus and stock option bonus elements. The base salary paid
to each executive officer is based upon the Committee's evaluation of
various factors including the executive's role and responsibilities, past
performance, present and future value to the Company, market compensation
data for executives of other companies in the solid waste industry
(including most of those included in the Company's peer group for
measuring shareholder total return) and non-solid waste industry
companies, and other relevant factors. Consistent with the Company's
compensation philosophy, the executive compensation program, which
includes elements of both cash bonus and incentive and nonqualified stock
options, is weighted towards incentive compensation directly tied to
performance goals which contribute significantly to long-term growth in
shareholder value. By including stock options in the incentive
compensation program, the Company intends to align the interests of the
participating executives with those of shareholders by providing value to
the executive through appreciation in share value.
The Company's management incentive compensation plan for 1996
included qualifying criteria and measurement targets based upon the
Company's operating profit and return on assets. These financial
performance criteria were designed and intended to directly link executive
compensation to the efficient use of capital and increased operating
effectiveness. In addition, the incentive compensation plan for each
individual executive officer included non-financial criteria tied to the
executive's expected contribution to the Company's continuous improvement
programs. The Committee retained the discretion to modify or deviate from
financial performance measures where consistent with the primary objective
of long-term growth in shareholder value.
Cash bonuses and stock option grants are awarded by the
Committee to the named Executive Officers subsequent to the end of the
Company's fiscal year. Bonus awards are based upon the Committee's review
with Mr. Dietrich of the Company's achievement of financial performance
criteria and each Executive Officer's achievement of his individual non-
financial criteria.
In determining the 1996 base salary of Mr. Dietrich, the
Compensation Committee considered (i) the Company's financial performance
in 1995, (ii) Mr. Dietrich's critical role in the successful realignment
of the Company which was completed in 1995, (iii) his development and
direction of long-term strategic growth plans for the Company, and (iv)
the compensation practices of other companies (including most of those
included in the Company's peer group for measuring shareholder total
return) for executives with similar levels of responsibility. The terms
of the Employment Agreements and the Key Executive Employment and
Severance Agreements ("KEESAs") between the Company and certain executive
officers, including Mr. Dietrich, were based upon a similar evaluation.
See "Executive Compensation - Employment and Noncompetition Agreements"
and "Executive Compensation - Change-in-Control Arrangements."
The CEO's compensation plan for 1996 was heavily weighted to
pay-for-performance compensation. Mr. Dietrich's base salary was
increased from $160,000 for 1995 to $182,000 for 1996. The increase was
intended to reflect Mr. Dietrich's role in the Company's 1995 financial
performance and to keep the CEO's salary comparable with compensation of
executives of other companies in the solid waste industry, including most
of those in the Company's Self-Determined Peer Group Index, as well as
executives of other companies with comparable revenues who have similar
responsibilities. The annual cash bonus incentive awarded to Mr. Dietrich
for 1996 was $285,000, based upon the financial performance measures
discussed above. The incentive compensation awarded to Mr. Dietrich for
1996 represented the maximum possible payout under his 1996 compensation
plan. For 1996, Mr. Dietrich also was granted stock options exercisable
for 80,000 shares at the fair market value of the stock on the grant date,
based upon the Company's financial performance and Mr. Dietrich's
contributions to the Company's performance.
Since the Company believes its stock option plans have been
adopted and are being administered in accordance with Internal Revenue
Code Section 162(m), it is the Committee's position that no further action
is necessary to conform its compensation plans to comply with the
regulations proposed under Internal Revenue Code Section 162(m) relating
to the $1 million cap on executive compensation deductibility.
By the Compensation Committee:
Francis J. Podvin, Chairman Stephen G. Woodsum
Donald Taylor Walter G. Winding
Summary Compensation Information
The following table sets forth certain information concerning
compensation paid by the Company for the last three fiscal years to the
Company's Chief Executive Officer and the Company's other three executive
officers who were serving as such as of December 31, 1996. The persons
named in this table are sometimes referred to herein as the "named
Executive Officers."
<TABLE>
Summary Compensation Table
<CAPTION>
Shares
underlying
Fiscal Annual options All other
Name and principal position year salary Annual bonus(1) granted(2) compensation (3)
<S> <C> <C> <C> <C> <C>
Joseph P. Tate, Chairman 1996 $155,000 $134,816 8,300 $1,521
1995 $140,000 $140,000 0 $2,814
1994 $180,000 $9,000 0 $1,303
G. William Dietrich, 1996 $182,000 $285,000 10,435 $4,184
President and CEO 1995 $160,000 $250,000 350,000 $2,776
1994 $150,000 $60,000 0 $9,290
George K. Farr, 1996 $135,000 $101,000 5,739 $2,665
Chief Financial Officer 1995 $110,400 $60,000 105,460 $2,313
1994 $80,000 $16,000 0 $28,645
Peter J. Ruud 1996 $140,000 $105,000 8,522 $2,844
General Counsel 1995 $134,000 $70,000 20,000 $2,356
1994 $125,000 $18,750 0 $1,275
_______________
(1) The value of perquisites and other personal benefits received by any
named Executive Officer did not exceed the lessor of $50,000 or 10%
of the named Executive Officer's salary and bonus.
(2) See "Stock Options" below.
(3) The majority of other compensation is Company contributions to the
Company's 401(k) Plan. Also includes life insurance premiums paid by
the Company on executive group policy insurance in excess of $50,000
payable to the named Executive Officers or their respective families.
1994 includes $28,009 reimbursement of costs involved in the sale of
George Farr's home and $9,000 temporary living expenses reimbursed to
G. William Dietrich.
</TABLE>
Stock Options
Option Grants. The following table sets forth certain
information with respect to stock options granted during 1996 to each of
the named Executive Officers:
<TABLE>
1996 Individual Grants
<CAPTION>
Potential realizable
Number of value at assumed
shares % of total options annual rates of stock
underlying granted to employees Exercise price price appreciation
Name options granted in 1996 per share Expiration date for option term (1)
5% 10%
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Tate 8,300 2.60% $12.65 03/07/2006 $66,030 $167,334
G. William Dietrich 10,435 3.26% $11.50 03/07/2006 $75,468 $191,252
George K. Farr 5,739 1.79% $11.50 03/07/2006 $41,505 $105,184
Peter J. Ruud 8,522 2.67% $11.50 03/07/2006 $61,633 $156,191
__________________
(1) The potential realizable values set forth under the columns represent
the difference between the stated option exercise price and the
market value of the Common Stock based on certain assumed rates of
stock price appreciation and assuming that the options are exercised
on their stated expiration date; the potential realizable values set
forth do not take into account applicable tax and expense payments
which may be associated with such option exercises. Actual
realizable value, if any, will be dependent on the future stock price
of the Common Stock on the actual date of exercise, which may be
earlier than the stated expiration date. The 5% and 10% assumed
rates of stock price appreciation over the ten-year exercise period
of the options used in the table above are mandated by rules of the
SEC and do not represent the Company's estimate or projection of the
future price of the Common Stock on any date. There can be no
assurance that the stock price appreciation rates for the Common
Stock assumed for purposes of this table will actually be achieved.
</TABLE>
Option Values. The following table sets forth the aggregate
value of unexercised options at December 31, 1996, held by each of the
named Executive Officers. There were no option exercises during 1996 by
any named Executive Officer.
<TABLE>
1996 Year-End Option Values
<CAPTION>
Number of shares underlying Dollar value of unexercised in-the-
unexercised options at money options at
December 31, 1996(1) December 31, 1996(2)
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Joseph P. Tate 0 8,300 $0 $64,117
G. William Dietrich 350,000 10,435 $4,056,250 $92,610
George K. Farr 138,437 6,052 $1,656,127 $53,710
Peter J. Ruud 170,000 8,522 $2,154,750 $75,632
__________________
(1) Includes incentive stock options granted under the Company's 1993
Incentive Stock Option Plan as part of the Company's 1995 bonus
program to Messrs. Tate, Dietrich, Farr, and Ruud to purchase 8,300,
10,435, 5,739, and 8,522 shares, respectively, with an exercise price
equal to $11.50 per share ($12.65 in the case of Mr. Tate). Also
includes nonqualified stock options granted to Messrs. Dietrich and
Farr to purchase 100,000 and 25,000 shares, respectively, pursuant to
individual stock option agreements, at $11.50, and the balance of
stock options granted to Messrs. Dietrich, Farr, and Ruud pursuant to
individual stock option or employment agreements with the Company at
an exercise price of $7.70 per share. Additionally, Mr. Farr was
granted incentive stock options under the Company's 1993 Incentive
Stock Option Plan exercisable for 1,250 shares of Common Stock at an
exercise price equal to $11.50 per share.
(2) The dollar values were calculated by determining the difference
between the fair market value of the underlying Common Stock and the
various applicable exercise prices of the named Executive Officers'
outstanding options at the end of 1996. The last reported sale price
of the Company's Common Stock on The Nasdaq Stock Market on December
31, 1996 was $20.375 per share.
</TABLE>
Employment And Noncompetition Agreements
The Company has entered into employment agreements with Messrs.
Dietich, Farr, and Ruud. The employment agreements provide for three-year
terms which are renewable automatically for successive three-year terms,
unless either party gives 30 days advance notice of nonrenewal. The
Company may also terminate any of the employment agreements at any time
for "cause" as defined in the Executive Officer's KEESA. See "Severance
and Change in Control Arrangements." If the Company terminates the named
officer's employment other than for cause or the officer's death or
disability or if the Company elects not to renew the officer's employment
agreement, the officer is entitled to receive a severance payment equal to
three (3) years base salary plus an amount equal to the officer's annual
bonus for the year preceding termination prorated to the time of
termination. If the officer's employment is terminated as a result of his
death, his estate or representative is entitled to receive an amount equal
to the officer's base salary for the month in which he dies. If the
officer's employment is terminated as a result of his disability, the
officer is entitled to receive his base salary for a period of 180 days
after the Company notifies the officer of such termination, reduced by the
amount of any disability benefits received under the Company's disability
benefit plan.
Mr. Dietrich is subject to a noncompetition agreement which
prohibits him during the term of his employment and for one year
thereafter from competing with the Company within 50 miles of any Company
facility or from using or disclosing confidential information of the
Company. Mr. Ruud and Mr. Farr are also subject to noncompetition
agreements substantially identical to Mr. Dietrich's, except that the
noncompetition term extends for two years following the termination of
their respective employment with the Company.
Severance and Change in Control Arrangements
The Company has KEESAs with Messrs. Dietrich, Farr, and Ruud
which provide that, following a "change in control" of the Company (as
defined in the KEESAs), such named Executive Officer will be employed for
three years in the same position, performing equivalent duties, and at the
same location as in effect immediately prior to the change of control.
During an officer's employment period following the change in
control, the named Executive Officer is entitled to receive compensation
at the same rate in effect at the date of change in control (subject to
increase by the Compensation Committee) and to be included in the
Company's benefit plans available to employees of comparable status. If
during the employment period the officer's employment is terminated by the
Company, other than for "cause" (as defined in the KEESAs) or the
officer's disability, or the officer's duties are changed substantially
without his written consent and the officer terminates his employment as a
result, the officer is entitled to receive a lump sum payment equal to
three times the officer's average annual total compensation for the five
years prior to the change in control (or, if employed for less than five
years, three times the officer's highest amount of total annual
compensation), plus the actuarially determined present value of the
benefit accruals that would have been made through the end of the
employment period under the Company's retirement plans applicable to the
officer. Each of the KEESAs provide that the present value of the total
amounts received by any officer thereunder will be limited so as not to
constitute an "excess parachute payment" as defined in Section 280G of the
Internal Revenue Code. The officer and his eligible dependents are also
entitled to coverage under the Company's medical benefit plans through the
end of the employment period. Each officer also has the right under the
KEESAs to voluntarily terminate his employment with the Company for any
reason whatsoever during the 30-day period after the first anniversary of
a change in control and still be entitled to receive the lump sum
termination payments and benefits described above.
401(k) Plan
The Company maintains an Employees' Retirement Savings Plan
("401(k) Plan") for employees who elect to participate. Subject to
certain limitations, participants may contribute up to 15% of their
compensation on a pre-tax basis to the 401(k) Plan and the Company will
contribute matching funds in an amount equal to 25% of the amount
contributed by each participant up to the first 8% of the participant's
compensation. Amounts attributable to participant contributions under the
401(k) Plan are fully vested at all times (with Company contributions
vesting in increments of 20% per year). Participants are entitled to
receive their vested 401(k) Plan accounts, including investment earnings,
upon death, retirement, or other termination of employment.
Director Compensation
Under the Company's director compensation policy, each
independent director receives an annual retainer fee of $15,000, plus $500
for attending each committee meeting which is not held in conjunction with
a Board meeting, in addition to reimbursement of out-of-pocket expenses.
In addition, under the Company's 1996 Equity Incentive Plan (the
"1996 Plan"), on the effective date of the Company's initial public
offering (March 7, 1996), each then serving independent director was
automatically granted non-qualified stock options under the 1996 Plan to
purchase 10,000 shares of Common Stock at a per share exercise price equal
to the initial public offering price of $11.50 per share. Each new
independent director joining the Board will automatically receive an
initial non-qualified stock option to purchase 10,000 shares of Common
Stock exercisable at the closing sale price of the Common Stock on the
date of grant. Each independent director's initial option grant will vest
ratably over an approximate three-year period, provided that the
independent director continues to serve as a member of the Board at the
end of each vesting period with respect to the increment then vesting.
The 1996 Plan also provides that, beginning with the Annual Meeting and
for each annual meeting thereafter, each then serving and continuing
independent director will receive automatically an additional non-
qualified stock option to purchase 2,500 shares of Common Stock at an
exercise price equal to the closing sale price of the Common Stock on the
date of grant. These annual option grants will vest in full within six
months from the date of grant. Notwithstanding the aforementioned vesting
provisions, all outstanding options granted to independent directors under
the 1996 Plan will vest immediately upon a "change in control," or the
director's death or disability. All options granted to independent
directors under the 1996 Plan will expire upon the earlier to occur of
five years from the grant or one year from the independent director
ceasing to hold such position.
Independent Director Share Ownership Requirement
Pursuant to the Company's Restated By-laws, each independent
director is required to own, directly or through one or more affiliates,
at least 500 shares of Common Stock within six months of the date of the
election of such director.
STOCK PERFORMANCE INFORMATION
The following performance graph compares the cumulative total
return of the Company's Common Stock to the cumulative total return of (i)
the Standard and Poor's 500 Composite Index and (ii) an index of peer
group issuers selected in good faith (the "Self-Determined Peer Group
Index"). The Self-Determined Peer Group Index includes Allied Waste
Industries, Inc., Browning-Ferris Industries, Inc., United Waste Systems,
Inc., American Waste Services, Inc., USA Waste Services, Inc., and WMX
Technologies, Inc. The comparison in the graph assumes the investment of
$100 in the Company's Common Stock, the Standard and Poor's 500 Composite
Index, and the Self-Determined Peer Group Index on March 8, 1996 (first
trading day following the Company's initial public offering), and the
reinvestment of all dividends. The source of the performance graph is the
Center for Research in Security Prices at the University of Chicago
Graduate School of Business.
<TABLE>
Comparison of Five-Year Cumulative Total Returns
[Stock Performance Graph]
<CAPTION>
12/31/92 12/31/93 12/31/94 12/31/95 3/8/96 12/31/96
<S> <C> <C> <C> <C> <C> <C>
Superior Services, Inc. -- -- -- -- $100 $154
S&P 500 Composite Index $63 $69 $70 $97 $100 $119
Composite Peer Group Index $109 $81 $84 $96 $100 $108
</TABLE>
CERTAIN TRANSACTIONS
The Company purchases trucking and other related services from
corporations and certain other affiliates of Gary G. Edler and his
immediate family. Mr. Edler is an officer and director of the Company.
Also, a subsidiary of the Company is the lessee of a 20,000 square foot
office/warehouse facility owned by Mr. Edler in Fond du Lac, Wisconsin.
Base rent is $9,750 per month, plus real estate taxes, insurance and
routine building maintenance. The Company paid Mr. Edler and his
affiliates in the aggregate $705,480 in 1996. The Company believes such
arrangements were on terms no less favorable to the Company than could be
obtained from an unaffiliated third party.
The Company loaned G. William Dietrich $75,000 in June 1994.
The loan is represented by an unsecured promissory note, with interest
accruing beginning on June 29, 1997, payable annually at the prime rate as
adjusted from time to time and principal payable in one lump sum payment
90 days after Mr. Dietrich terminates employment with the Company for any
reason. The amount outstanding at December 31, 1996, was $75,000 with no
interest accrued or due.
The Company paid $22,721 in 1996 to Francis J. Podvin, a
director of the Company. The payment related to a vertical expansion
royalty paid to former owners of one of the Company's landfills.
OTHER MATTERS
Representatives from Ernst & Young LLP, the Company's
independent auditors for the current year as well as for all years since
the Company began operations in 1993, are expected to be present at the
Meeting and will have an opportunity to make a statement if they so desire
and will be available to respond to appropriate questions.
The Board does not intend to present at the Meeting any matters
for shareholder action other than the matters described in the Notice of
Annual Meeting. The Board knows of no other matters to be brought before
the Meeting which will require the vote of shareholders. For other
business to be properly brought before the Meeting by a shareholder, such
shareholder must have given written notice of such proposed business
complying with the Company's By-laws to the Secretary of the Company not
before February 13, 1997, or after March 14, 1997. The Company received
no such notices within that time period. If any other business or matters
should properly come before the Meeting, the proxies named in the
accompanying proxy will vote on such business or matters in accordance
with their best judgment.
The Company's Annual Report on Securities and Exchange
Commission Form 10-K for its 1996 fiscal year which ended December 31,
1996, has been provided to all shareholders of record as of the Record
Date as part of the Company's 1996 Annual Report to Shareholders.
The cost of soliciting proxies will be paid by the Company. The
Company expects to solicit proxies primarily by mail. Proxies may also be
solicited personally and by telephone by certain officers and regular
employees of the Company. It is not anticipated that anyone will be
specially engaged to solicit proxies or that special compensation will be
paid for that purpose, but the Company reserves the right to do so should
it conclude that such efforts are needed. The Company will reimburse
brokers and other holders of record for their expenses in communicating
with the persons for whom they hold shares of Common Stock.
Any shareholder proposal intended for consideration at the 1998
annual meeting of shareholders must be received by the Company no later
than December 7, 1997, in order to be considered for inclusion in the
Company's proxy statement and proxy for that meeting.
On Behalf of the Board of Directors
/s/ Peter J. Ruud
Peter J. Ruud
Secretary
West Allis, Wisconsin
April 7, 1997
<PAGE>
PROXY
SUPERIOR SERVICES, INC.
1997 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 13, 1997
The undersigned constitutes and appoints G. W. Dietrich and Peter J. Ruud,
and each of them, each with full power to act without the other, and each
with full power of substitution, the true and lawful proxies of the
undersigned, to represent and vote, as designated below, all shares of
Common Stock of Superior Services, Inc., which the undersigned is entitled
to vote at the 1997 Annual Meeting of Shareholders of such corporation to
be held on the 40th Floor of the Firstar Center at the offices of Foley &
Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin, on Tuesday, May
13, 1997, 1:00 p.m. local time, and at any adjournment thereof.
1. Election of [_] FOR all nominees listed [_] WITHHOLD authority
Directors below (except as marked to vote for all
to the contrary below nominees listed
below.
Terms Expiring at 2000 Annual Meeting
Gary G. Edler
Warner C. Frazier
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting and
at any adjournment thereof. The Board of Directors recommends a
vote for all nominees set forth above.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE TWO
SPECIFIED DIRECTOR NOMINEES AND ON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING IN ACCORDANCE WITH THE BEST
JUDGMENT OF THE PROXIES NAMED HEREIN.
(Continued, and to be signed, on next page)
The undersigned acknowledges receipt of the Notice of Said Annual Meeting
and the accompanying Annual Report to Shareholders.
Dated:______________________________, 1997
Signed:_____________________________
_____________________________
(Please print name)
Note: Please sign exactly as your name
appears hereon. Joint owners should
each sign personally. A corporation
should sign full corporate name by duly
authorized officers and affix corporate
seal, if any. When signing as
attorney, executor, administrator,
trustee, or guardian, give full title
as such.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SUPERIOR SERVICES, INC.
