<PAGE> 1
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:
[ ] 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-11(c) or Rule 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)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
SUPERIOR SERVICES, INC.
[SUPERIOR COLOR LOGO]
125 SOUTH 84TH STREET
MILWAUKEE, WI 53214
------------------------
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1999
------------------------
To the Shareholders of
Superior Services, Inc.:
NOTICE IS HEREBY GIVEN THAT the 1999 Annual Meeting of Shareholders of
Superior Services, Inc. will be held on Tuesday, May 11, 1999, 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 1, 1999, 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 1999 Annual Meeting of Shareholders is a form
of proxy and proxy statement.
On Behalf of the Board of Directors
Peter J. Ruud, Secretary
Milwaukee, Wisconsin
April 2, 1999
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> 3
SUPERIOR SERVICES, INC.
SUPERIOR COLOR LOGO
------------------------
PROXY STATEMENT
------------------------
1999 ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 1999
This Proxy Statement and accompanying proxy are being furnished to the
shareholders of Superior Services, Inc. (the "Company") beginning on or about
April 2, 1999, in connection with the solicitation by the Board of Directors
("Board") of the Company of proxies to be voted at its 1999 Annual Meeting of
Shareholders to be held on Tuesday, May 11, 1999, 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 1, 1999 ("Record Date")
are entitled to notice of, and to vote at, the Meeting. As of the Record Date,
32,356,812 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 voted 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.
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
2002. Joseph P. Tate and Walter G. Winding 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 III Directors will be elected at the Meeting.
The terms of the Class I Directors and Class II Directors will expire at the
Company's annual meetings in 2000 and 2001, respectively.
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
<PAGE> 4
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.
DIRECTORS AND EXECUTIVE OFFICERS
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 have previously been elected to the Board by the Company's shareholders.
<TABLE>
<CAPTION>
NAME AGE COMPANY POSITION DIRECTOR SINCE
---- --- ---------------- --------------
<S> <C> <C> <C>
Joseph P. Tate.............. 55 Chairman and Director (Class III) July, 1992
G. William Dietrich......... 53 President, Chief Executive Officer and September, 1994
Director (Class II)
Francis J. Podvin(1)........ 57 Director (Class II) July, 1992
Donald Taylor(1)(2)......... 71 Director (Class II) March, 1996
Walter G. Winding(1)(2)..... 57 Director (Class III) March, 1996
Warner C. Frazier(1)(2)..... 66 Director (Class I) May, 1997
George K. Farr.............. 40 Chief Financial Officer and Treasurer
Peter J. Ruud............... 45 Senior Vice President and Corporate
Secretary
Scott S. Cramer............. 46 Vice President--General Counsel
Paul Jenks.................. 52 Vice President--Special Projects
Philip J. Auld.............. 46 Regional Vice President
James M. Dancy, Jr. ........ 54 Regional Vice President
Larry E. Goswick............ 51 Regional Vice President
John H. King................ 42 Regional Vice President
</TABLE>
- ------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Joseph P. Tate is a co-founder of the Company. Mr. Tate has more than 30
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 has been nominated for reelection as a member of
Class III of the Board of Directors, with a term through the Company's 2002
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 Browning-Ferris Industries, Inc.
("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 Waste Systems, Inc. (a national solid waste
company) for three years with principal responsibility for Laidlaw's solid waste
operations
2
<PAGE> 5
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 2001 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 2001
annual shareholders meeting.
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 has been a director of the Company
since March, 1996 and serves as a member of Class II of the Board of Directors,
with a term through the Company's 2001 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 (brewery and beer
distributor), Milwaukee, Wisconsin. Mr. Winding has been a director of the
Company since March 1996 and has been nominated for reelection as a member of
Class III of the Board of Directors with a term through the Company's 2002
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 serves 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 (including investor relations). In October 1998, he also assumed
responsibility for the Company's public relations activities. 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. In August 1997, Mr. Ruud was promoted to Vice
President-Administration and Corporate Secretary with responsibilities for the
Company's human resources and health and safety functions, public relations,
governmental affairs and corporate governance. In October 1998, he was promoted
to Senior Vice-President and Corporate Secretary. 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.
3
<PAGE> 6
While a shareholder of Davis & Kuelthau, S.C., Mr. Ruud was actively involved in
the formation of the Company and the Consolidation.
Scott S. Cramer joined the Company in July 1997 as Vice President-General
Counsel, with responsibility for all of the Company's legal matters. Prior to
joining the Company, Mr. Cramer served in various legal capacities for more than
13 years with BFI. Most recently Mr. Cramer was Senior Corporate Counsel to BFI.
Mr. Cramer also was European Regional Counsel, Vice President and Director of
Legal Affairs as well as Corporate Secretary for Browning Ferris Industries
Europe, Inc. in Utrecht, The Netherlands from July 1989 to January 1993. Prior
to joining BFI, Mr. Cramer was counsel to Pennzoil Company which followed his
tenure in private practice.
Paul Jenks joined the Company in October 1998 as Vice President-Special
Projects responsible for a variety of special assignments including the
development and supervision of a transition team which assists in the
integration of the Company's acquisitions. Prior to joining the Company, Mr.
Jenks was employed by Waste Management, Inc. (a national solid waste company)
("WMI") for 16 years in a number of operating management roles. From 1997 to
1998 he was Vice President and General Manager of WMI's East Ohio Region; from
1996 to 1997 he was Region President of WMI's Central Ohio Region; from 1994 to
1996 he was Vice President of Operations for WMI's Mideast Region, and from 1987
to 1994 he was Division President and General Manager of WMI's Columbus, Ohio
Division.
Philip J. Auld joined the Company as Regional Vice President-Eastern Region
in October 1998, with management responsibility for all solid waste operations
in the Company's eastern region. Prior to his employment by the Company, Mr.
Auld was employed for over 10 years by WMI, most recently as a Region Vice
President responsible for WMI's solid waste operations in New York City. Prior
to becoming Region Vice President for New York City, Mr. Auld was a Division
President responsible for WMI's solid waste operations in several areas
including Philadelphia, Baltimore and Washington, D.C.
James M. Dancy, Jr. joined the Company in September 1998 as Regional Vice
President-Southern Region, with management responsibility for all solid waste
operations in the Company's southern region. Mr. Dancy has more than 30 years of
experience in the solid waste services industry. Prior to his employment by the
Company, Mr. Dancy was employed by WMI in several operating management
positions. From 1995 to 1998, he was Regional Vice President for a number of
WMI's Regions, including Eastern Pennsylvania and New Jersey, New York City,
Long Island and Northern New Jersey and Eastern Pennsylvania and Southern New
Jersey. From 1992 to 1995, Mr. Dancy served as WMI's Managing Director,
International Solid Waste, Western Europe; from 1990 to 1992 he was Regional
Operations Vice President for WMI's New England and Ontario Region, and from
1988 to 1990 he was General Manger of WMI's solid waste operations in Portland,
Oregon. Before he joined WMI, Mr. Dancy held a number of senior management
positions for other companies in the solid waste services industry, including
Regional Vice President for Laidlaw Waste Systems, Inc. (a national solid waste
company) from 1985 to 1988, Executive Vice President and COO for Western Waste
Industries, Inc. Los Angeles, California (a regional solid waste company) from
1983 to 1985 and Vice President of Waste Resources Corp., Philadelphia,
Pennsylvania (a regional solid waste company) from 1967 to 1981.
Larry Goswick joined the Company in December 1998 as Regional Vice
President-Midwest Region, with management responsibility for all solid waste
operations in the Company's midwest region. Prior to joining the Company, Mr.
Goswick was employed by Loomis, Fargo & Company (a national security services
company) from 1995 to 1998 as Division President/Chief Operating Officer
responsible for Loomis' operations in its eight state South Central Region. From
1981 to 1995, Mr. Goswick was employed in management roles in several companies
in the solid waste services industry. Specifically, from 1989 to 1995 he was
employed as District General Manager for BFI, responsible for BFI's La Porte,
Texas and Beaumont, Texas operations; from 1987 to 1989 he served as Division
General Manger for the Denver, Colorado division of Laidlaw Waste Systems, Inc.;
from 1985 to 1987 he was President of Yellow Rose, Inc., Alvarado, Texas (a
regional solid waste company); and from 1981 to 1985 he was Regional Operations
Manager and District General Manager for BFI's Houston, Texas operations.
4
<PAGE> 7
Mr. King joined the Company in June 1994 as Vice President-Operations and
was promoted to the position of Operating Vice President-Special Services in
September 1994, with responsibility for managing the Company's other integrated
waste services group. In April 1997, Mr. King's area of responsibility was
expanded to include solid waste operations in the Company's central region. In
October 1998, Mr. King resumed responsibility for the Company's other integrated
waste services operations when he was appointed as Regional Vice
President-Special Services. Prior to his employment by the company, Mr. King was
employed for five years by Laidlaw Waste Systems, Inc. as Director of Operations
for its Ohio and Michigan region, with responsibility for the management of
Laidlaw's collection operations throughout that territory. For six years prior
thereto, Mr. King served in various capacities with BFI.
BOARD COMMITTEES AND MEETINGS OF THE BOARD
The Board has established two standing committees, the Audit Committee and
the Compensation 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 1998, 12 meetings of the Board were held.
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 fees
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 entirely of independent
directors, including Donald Taylor (Chairman), Walter G. Winding and Warner C.
Frazier. The Audit Committee met twice in 1998.
The Compensation Committee, which met four times in 1998, 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, 1996 Equity
Incentive Plan and 1998 Broad-Based Stock Option Plan. The Compensation
Committee currently consists entirely of independent directors, including
Francis J. Podvin (Chairman), Donald Taylor, Walter G. Winding, and Warner C.
Frazier. See "Executive Compensation-Report on Executive Compensation."
5
<PAGE> 8
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).
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
--------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT
------------------------ --------- -------
<S> <C> <C>
Joseph P. Tate(1)(2)(4).................................. 2,591,184 8.0%
G. William Dietrich(3)(4)................................ 488,876 1.5
George K. Farr(4)........................................ 292,452 *
Francis J. Podvin(4)..................................... 45,306 *
Donald Taylor(4)......................................... 24,875 *
Walter G. Winding(4)..................................... 24,875 *
Warner C. Frazier(4)..................................... 19,142 *
Gary Blacktopp(4)........................................ 83,652 *
John King(4)............................................. 47,983 *
Scott Cramer(4).......................................... 33,538 *
Paul M. Burke(5)......................................... 1,915,658 5.9
All executive officers and directors as a group (10
persons)(4)............................................ 3,651,883 10.9
</TABLE>
- ------------
*Indicates less than 1%.
(1) Address is c/o 125 South 84h Street, Suite 200, Milwaukee, WI 53214.
(2) The listed shares include 2,397,431 shares owned by two trusts 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, Blacktopp, Cramer and
King include 38,753, 487,676, 292,352, 81,152, 33,338 and 47,983 shares,
respectively, subject to acquisition upon the exercise of stock options
currently exercisable or exercisable within 60 days of the Record Date. The
shares listed for Messrs. Podvin, Taylor, Winding and Frazier include
24,375, 24,375, 24,375, and 18,542 shares, respectively, subject to
acquisition upon the exercise of stock options currently exercisable or
exercisable within 60 days of the Record Date. The shares listed for all
executive officers and directors as a group include 1,067,921 shares subject
to acquisition upon exercise of stock options currently exercisable or
exercisable within 60 days of the Record Date.
(5) Address is 2806 Juniper Hill Court, Louisville, Kentucky 40206. The
information with respect to Mr. Burke is as of February 12, 1999, as
reported by Mr. Burke in his Schedule 13G/A dated February 10, 1999 except
to the extent otherwise known to the Company.
EXECUTIVE COMPENSATION
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board 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.
6
<PAGE> 9
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 scope of the executive's role and responsibilities, the past performance of
the individual and the Company, the executive's 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 with
similar revenues and growth rates, and other relevant factors. Consistent with
the Company's compensation philosophy, the executive compensation program, which
includes elements of both cash bonus and 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 1998 included
qualifying criteria and measurement targets based upon year over year
improvement in the Company's earnings per share. These financial performance
criteria were designed and intended to directly link executive compensation to
the shareholders' interest in the creation of shareholder value through growth
of the Company's earnings. 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 usually 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 named
Executive Officer's achievement of his individual non-financial criteria. In
some circumstances, special stock option grants may also be awarded by the
Committee during the Company's fiscal year, for example to adjust the
compensation package of an executive officer who has been assigned additional
responsibilities, to recognize extraordinary performance related to a specific
event or activity or to otherwise promote the Company's compensation philosophy.
In November 1998, the Compensation Committee also authorized a special
grant of stock options to a broad based group of management employees. In the
Committee's judgment, stock options are critical to the Company's compensation
program's underlying philosophy of motivating managers to realize higher stock
prices for the Company's shareholders. In the Committee's view, the decline in
the Company's share price in the second half of 1998, to the extent it was
attributable to general stock market conditions rather than operating
performance, had reduced the effectiveness of outstanding stock options to
motivate and retain employees and respond to competitive pressures.
In determining the 1998 base salary of Mr. Dietrich, the Compensation
Committee considered (i) Mr. Dietrich's contribution to the Company's financial
performance in 1997 which included significant growth in both revenues and
profitability, (ii) Mr. Dietrich's critical role in the successful "follow-on"
public offering which was completed in 1997, (iii) 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, (iv) the effort required to continue to generate significant
growth in earnings per share in light of the significant increase in the number
of shares outstanding and (v) his commitment to implementation of the Company's
long-term strategic plan. In addition, the Compensation Committee engaged the
services of an outside compensation consultant for the purpose of reviewing
executive compensation survey data.
The CEO's compensation plan for 1998 was heavily weighted to
pay-for-performance compensation. Mr. Dietrich's base salary was increased from
$236,600 for 1997 to $324,000 for 1998. The increase was intended to reflect Mr.
Dietrich's role in the Company's 1997 financial performance (specifically, the
substantial increase in earnings and significant increase in profitability
during a time of accelerating growth) and to keep the CEO's salary comparable
with compensation of executives of other companies in the solid
7
<PAGE> 10
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
and growth rates who have similar responsibilities. The annual cash bonus
incentive awarded to Mr. Dietrich for 1998 was $276,670, based upon the earnings
per share growth qualifying criteria and measurement targets under the Company's
1998 management incentive plan. In February 1999, Mr. Dietrich also was granted
stock options exercisable for 85,392 shares at the fair market value of the
stock on the grant date, based upon the 1998 earnings per share measurement
targets under the Company's 1998 management incentive plan. The incentive
compensation awarded to Mr. Dietrich for 1998 represented 71.2% of the maximum
possible payout under his 1998 compensation plan. In addition to the stock
options granted to Mr. Dietrich under the Company's 1998 compensation plan, the
Compensation Committee also authorized a special award to Mr. Dietrich in
November 1998 of stock options for 250,000 shares at the stock's fair market
value on the grant date, as part of a broad based stock option grant to the
Company's operating management intended to provide additional incentives to
successfully implement the Company's long-term growth strategies.
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
Donald Taylor
Walter G. Winding
Warner C. Frazier
8
<PAGE> 11
SUMMARY COMPENSATION INFORMATION
The following table sets forth certain information concerning compensation
paid by the Company for the last three fiscal years to (i) the Company's Chief
Executive Officer, (ii) the four most highly compensated executive officers
other than the CEO who were serving as such as of December 31, 1998 (or for any
part of the fiscal year ended December 31, 1998), and (iii) individuals who
would have been included in the group described in (ii) above, but for the fact
that the individual was not serving as an executive officer as of December 31,
1998. The persons named in this table are sometimes referred to herein as the
named Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
SHARES UNDERLYING
FISCAL ANNUAL ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) GRANTED(2) COMPENSATION(3)
- --------------------------- ------ -------- -------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Joseph P. Tate....................... 1998 $170,000 $120,000 45,000 $5,110
Chairman 1997 $155,000 $155,000 24,495 $3,873
1996 $155,000 $134,816 8,300 $3,873
G. William Dietrich.................. 1998 $324,000 $276,670 350,000 $9,795
President and CEO 1997 $236,600 $307,580 180,000 $9,794
1996 $182,000 $285,000 10,435 $4,184
George K. Farr....................... 1998 $180,000 $115,279 250,000 $3,112
Chief Financial Officer and Treasurer 1997 $150,000 $150,000 146,530 $2,705
1996 $135,000 $101,000 5,739 $2,665
Gary Blacktopp....................... 1998 $170,000 $108,875 34,449 $6,780
Senior Vice President--Operations(4) 1997 $153,482 $128,426 101,558 $4,193
John H. King......................... 1998 $135,200 $ 69,270 32,613 $2,951
Regional Vice President--Special
Services
Scott S. Cramer...................... 1998 $125,000 $ 64,044 30,687 $ 696
Vice President--General Counsel
</TABLE>
- ------------
(1) The value of perquisites and other personal benefits received by any named
Executive Officer did not exceed the lesser of $50,000 or 10% of the named
Executive Officer's salary and bonus. Annual bonus is reflected in the year
earned, even though it may have been paid in the subsequent year.
(2) Options are reflected in the year of grant, even though they may have been
based upon performance in the year preceding grant. 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. 1998 and 1997 includes
$3,851 and $1,790 respectively of club dues for G. William Dietrich. 1997
also includes $3,187 imputed interest for G. William Dietrich, see "Certain
Transactions." 1998 includes $2,552 of personal airfare reimbursed to Gary
Blacktopp.
(4) Mr. Blacktopp's title was Senior Vice President-Operations until October,
1998 when he became Vice President-Maintenance.
9
<PAGE> 12
STOCK OPTIONS
Option Grants. The following table sets forth certain information with
respect to stock options granted during 1998 to each of the named Executive
Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES
SHARES % OF TOTAL OF STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED FOR OPTION TERM(3)
OPTIONS TO EMPLOYEES EXERCISE PRICE EXPIRATION ----------------------------
NAME GRANTED(1) IN 1998 PER SHARE(2) DATE(7) 5% 10%
---- ---------- --------------- -------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Tate....... 30,000 1.85% $28.4625 2/24/03(4) $ 136,839 $ 396,283
15,000 .92% $ 18.375 11/24/08(5) $ 173,339 $ 439,283
G. William
Dietrich........... 100,000 6.16% $ 25.875 2/24/08(4) $ 1,627,265 $ 4,123,809
250,000 15.40% $ 18.375 11/24/08(5) $ 2,888,985 $ 7,321,254
George K. Farr....... 50,000 3.08% $ 25.875 2/24/08(4) $ 813,632 $ 2,061,904
200,000 12.32% $ 18.375 11/24/08(5) $ 2,311,188 $ 5,857,004
Gary Blacktopp....... 4,449 .27% $ 25.875 2/24/08(4) $ 72,397 $ 183,468
30,000 1.85% $ 18.375 11/24/08(6) $ 346,678 $ 878,551
John King............ 2,613 .16% $ 25.875 2/24/08(4) $ 42,250 $ 107,755
30,000 1.85% $ 18.375 11/24/08(6) $ 346,678 $ 878,551
Scott S. Cramer...... 687 .04% $ 25.875 2/24/08(4) $ 11,179 $ 28,331
30,000 1.85% $ 18.375 11/24/08(6) $ 346,678 $ 878,551
All named Executives
Officers as a
group(8)............. 742,749 45.75% $ 20.586 Various $ 9,117,108 $ 23,154,744
All Shareholders..... 30,138,156(9) N/A N/A N/A $348,274,685(9) $882,596,432(9)
</TABLE>
- ------------
(1) Includes nonqualified stock options and incentive stock options granted
under the Company's 1996 Equity Incentive Plan.
(2) Exercise price is equal to the market value of the Common Stock on the date
of grant (except for the 30,000 share option grant to Mr. Tate which expires
2/24/03 for which the exercise price is 110% of market value on the date of
grant).
(3) 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
from the grant price 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.
(4) The stock options vest at the rate of 25% after the first 12 months after
grant and 6.25% per quarter thereafter.
(5) 50% of the options vested immediately upon grant, the balance vest at the
rate of 6.25% per quarter.
(6) 25% of the options vested immediately upon grant, the balance vest at the
rate of 6.25% per quarter.
(7) Although not a provision of the 1996 Plan, all option agreements evidencing
option grants made under the 1996 Plan have historically included, and are
expected to continue to include, a provision allowing the Board to
accelerate the vesting of all outstanding options represented thereby upon
the occurrence of a change in control of the Company. Under the terms of
their respective employment agreement or
10
<PAGE> 13
KEESA, the vesting of options granted to Messrs. Tate, Dietrich, Farr,
Blacktopp, King and Cramer is automatically accelerated upon the occurrence
of a change in control of the Company (as defined in the applicable
employment agreement or KEESA).
(8) This row represents the total number of shares granted in 1998 to all named
Executive Officers and the potential realizable value of all such options at
assumed annual rates of stock price appreciation as described in footnote
(3) to the table.
(9) These dollar values represent the potential realizable value to all
shareholders as a group with respect to all 30,138,156 shares outstanding as
of November 24, 1998, the last grant date of options to named Executive
Officers during 1998, based on the difference between the fair market value
of all shares outstanding on November 24, 1998 and the market value of the
Common Stock based on certain assumed rates of stock price appreciation as
described in footnote (3) to the table.
Option Values; Option Exercises. The following table sets forth the
aggregate value of unexercised options at December 31, 1998, held by each of the
named Executive Officers and information regarding option exercises during 1998
by each of the named Executive Officers.
1998 OPTION EXERCISES AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR END(2) AT FISCAL YEAR END(3)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Tate............ 0 $ 0 23,922 53,873 $ 54,952 $ 31,884
G. William Dietrich....... 15,149 $280,976 402,024 348,262 $2,486,646 $238,861
George K. Farr............ 0 $ 0 233,051 252,968 $1,138,138 $184,111
Gary Blacktopp............ 0 $ 0 65,300 112,881 $ 136,480 $ 93,010
John King................. 0 $ 0 42,411 44,275 $ 262,560 $ 94,125
Scott Cramer.............. 0 $ 0 23,125 57,562 $ 12,656 $ 37,969
</TABLE>
- ------------
(1) The value realized is the difference between the gross proceeds from sale of
the acquired shares less the exercise price paid to acquire the shares.
(2) Includes nonqualified stock options and incentive stock options granted
under the Company's 1993 Incentive Stock Option Plan (the "1993 Plan") and
the Company's 1996 Equity Incentive Plan (the "1996 Plan") with prices equal
to the market value of the Common Stock on the date of grant (except for
options granted to Mr. Tate for which the exercise price is 110% of market
value on the date of grants). The stock options have varying vesting
schedules with some options partially vesting immediately upon grant, but
generally vest at the rate of 25% after the first 12 months after grant and
6.25% per quarter thereafter. As provided in the 1993 Plan and as
historically provided in option agreements evidencing options under the 1996
Plan, the Board may accelerate the vesting of all outstanding options under
the 1993 Plan and 1996 Plan upon the occurrence of a change in control of
the Company. Under the terms of their respective employment agreement or
KEESA, the vesting of options granted to Messrs. Tate, Dietrich, Farr,
Blacktopp, King and Cramer is automatically accelerated upon the occurrence
of a change in control of the Company (as defined in the applicable
employment agreement or KEESA).
(3) 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 1998. The last reported sale price of the Company's Common Stock on
The Nasdaq Stock Market on December 31, 1998 was $20.0625 per share.
11
<PAGE> 14
EMPLOYMENT AND NONCOMPETITION AGREEMENTS
The Company has entered into employment agreements with Messrs. Dietrich
and Farr. The employment agreements provide for three-year terms which are
extended automatically on each anniversary date for one additional year, unless
either party gives notice of nonrenewal. The Company may also terminate any of
the employment agreements at any time for "cause" as defined in the officer's
KEESA. See "Severance and Change in Control Arrangements". If the Company
terminates the officer's employment other than for cause or the officer's death
or disability or if the Company elects not to extend the officer's employment
agreement, the officer is entitled to receive a severance payment equal to three
(3) times the officer's average annual total compensation for the five years
prior to termination as well as continuation of the officer's medical benefits.
The employment agreements with Messrs. Dietrich and Farr terminate immediately
upon a "change in control" as defined in the officer's KEESA. In such event the
officers will continue to serve as consultants to the Company through the
expiration date of the then current term of the employment agreement with
monthly consulting fees equal to the officer's then current salary. The
consulting payments automatically accelerate upon the officer/consultant's death
or disability and are subject to acceleration by either the Company or the
officer/consultant at any time. Mr. Dietrich's employment agreement also
provides that, in the event of a change of control, the Company would reimburse
him for closing costs and commissions on the sale of his home and make him whole
if his home sells for less than his cost basis.
The Company has also entered into employment agreements with Messrs.
Blacktopp, King and Cramer. The employment agreements provide for two-year
terms, which are extended automatically on each anniversary date for one
additional year, unless either party gives notice of nonrenewal. The Company may
also terminate the employment agreements at any time for "cause" as defined in
the employment agreements. If the Company elects to terminate Messrs.
Blacktopp's, King's or Cramer's employment, other than for cause or his death or
disability, such individual is entitled to receive a severance payment equal to
the unpaid balance of the employee's base salary through the expiration of the
initial term or the renewal term within which termination takes place, subject
to the change of control provisions described below.
If the employment of any of the above officers 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 employment
of Messrs. Dietrich or Farr is terminated as a result of his disability, such
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. If
the employment of Messrs. Blacktopp, King or Cramer is terminated as a result of
his disability, such officer is entitled to receive his base salary through the
date of termination.
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. Messrs. Farr, Cramer, King
and Blacktopp 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 Key Executive Employment and Severance Agreements, as
amended ("KEESAs"), with Messrs. Tate, Dietrich, and Farr.
Under the terms of the KEESAs, such officers are entitled to receive
compensation at the same rate in effect at the date of change in control
(subject to increase by the Compensation Committee) during an officer's
employment period following the change in control 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 if the officer's duties
are changed substantially without his written consent and the officer terminates
his employment as a result, or the officer terminates employment at any time
within 12 months after the change in control either voluntarily or as a result
of his death or disability, the officer is entitled to receive a lump sum
payment equal to three times the
12
<PAGE> 15
officer's average annual total compensation for the five years prior to the
change in control. Immediately upon a change in control, all outstanding stock
options held by such officers automatically vest. At the option of each officer,
upon a change in control each officer may receive cash in an amount equal to the
difference between the exercise price for the options and the fair market value
of the shares that would be received upon exercise, unless the officer's
exercise of his right to receive cash would make the change in control
transaction ineligible for pooling of interests treatment under APB No. 16.
Under the terms of the KEESA's, the officer and his spouse are entitled to
coverage under the Company's medical benefit plans until age 85 and the
officer's other dependents are entitled to coverage to age 21. In the event the
officers are required to pay an excise tax on "excess parachute payments"
received from the Company upon a change in control, the Company has agreed in
the KEESA's to pay the officer an amount necessary to place the executive in the
same after-tax financial position as the executive would have been in had the
executive not incurred such tax.
Under the terms of the employment agreements with Messrs. Blacktopp, King
and Cramer, if any of the officers is terminated due to a "change in control"
(as defined in the employment agreements) the officer is entitled to receive a
lump sum severance payment equal to three times for Mr. Blacktopp or two times
for Messrs. King or Cramer, of his base salary in effect on the effective date
of the change in control.
DIRECTOR COMPENSATION
Under the Company's director compensation policy, each independent director
receives an annual retainer fee of $16,000, plus $500 for attending each
committee meeting or Board meeting, in addition to reimbursement of
out-of-pocket expenses. The Chairman of the Compensation Committee of the Board
receives an additional annual retainer fee of $1,000.
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, at the time of each annual meeting, 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. The
1996 Plan also authorizes the Board to make special option grants to independent
directors. A special grant of options to purchase 15,000 shares at an exercise
price equal to the closing sale price of the Common Stock on the date of grant
was made to independent directors in November 1998. Under the terms of the
special option grant, the options were 50% vested immediately upon grant with
the balance vesting at the rate of 6.25% per quarter thereafter. 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 ten years from the grant or one year from the independent director ceasing to
hold such position.
SHARE OWNERSHIP REQUIREMENTS
To further support the Company's philosophy of maintaining a strong link
between stockholder and management interests, the Company has amended its
By-laws to expand the stock ownership requirements for independent directors.
Each independent director is required to purchase (over a five-year period of
time) and hold directly or through one or more affiliates, investments in
Company Common Stock valued at three times their annual retainer. In addition,
the Board of Directors has directed the Compensation Committee to establish
ownership guidelines for the Company's executive officers.
13
<PAGE> 16
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file reports concerning their ownership and
changes of ownership of Company stock and furnish copies of such forms to the
Company. Based solely upon information provided to the Company by individual
directors and executive officers, the Company believes that during the fiscal
year ended December 31, 1998 all of its directors and executive officers
complied with the Section 16(a) filing requirements, except that Form 3s to
report initial beneficial ownership of securities by Dale O. Nolder and Gary D.
Blacktopp were inadvertently filed one day late and a Form 5 to report an option
grant in November 1998 was inadvertently not filed by Joseph P. Tate.
14
<PAGE> 17
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., Waste Management, Inc., Casella Waste Systems, Inc., Waste Industries,
Inc. and Republic Services, Inc. American Waste Services, Inc. and USA Waste
Services, Inc. have been omitted from this year's Peer Group because they have
merged with USA Waste Services, Inc. and Waste Management, Inc., respectively.
The comparison in the graph assumes the investment of $100 in the Company's
Common Stock, and 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.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PEER GROUP PERFORMANCE CHART
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
12/31/94 12/31/95 3/8/96 12/31/97 12/31/98 12/31/96
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Superior Services, Inc. -- -- $100 $154 $218 $151
S&P 500 Composite Index $70 $97 $100 $119 $159 $205
Self-Determined Peer Group Index $84 $94 $100 $100 $141 $142
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
CERTAIN TRANSACTIONS
The Company loaned G. William Dietrich $75,000 in June 1994. The loan is
represented by an unsecured promissory note, with interest accruing from June
29, 1997, and payable annually at the Company's average annual borrowing 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
principal amount outstanding at December 31, 1998 was $75,000. All accrued
interest as of December 31, 1998 had been paid in full. The Company loaned G.
William Dietrich $150,000 in March 1999. The loan is represented by an unsecured
promissory note, with principal and interest, at the Company's average borrowing
rate, payable in one lump sum on April 30, 1999.
In 1998, the Company purchased public relations, employee communications
and graphics arts services from Whole Hog Productions, Inc. Ms. Jenifer Ortwein,
a principal shareholder of Whole Hog Productions, Inc., married Joseph P. Tate,
the Chairman and a director of the Company, in February 1999. The Company
15
<PAGE> 18
paid Whole Hog Productions, Inc., a total of $25,603 for services purchased by
the Company in 1998. The Company believes that the purchase of services from
Whole Hog Productions, Inc. was on terms no less favorable to the Company than
could be obtained from an unaffiliated third party.
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 or
other director candidates to be nominated 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 or director nominee complying with the Company's By-laws to the
Secretary of the Company not before February 10, 1999, or after March 12, 1999.
The Company received no such notices within that time period with respect to
other business to be brought before the Meeting by a shareholder. The Company
has extended this time period for one shareholder to allow for his submission of
a director candidate after that date. If any other business or nominees should
properly come before the Meeting, the proxies named in the accompanying proxy
will vote on such business or nominees in accordance with the directions on such
proxy or with their best judgment.
The Company's Annual Report on Securities and Exchange Commission Form 10-K
for its 1998 fiscal year which ended December 31, 1998, has been provided to all
shareholders of record as of the Record Date as part of the Company's 1998
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. The Company may decide to specially engage a proxy solicitation firm to
solicit proxies and, if so, may pay special compensation for that purpose. 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 2000 annual
meeting of shareholders must be received by the Company no later than December
3, 1999, 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
Peter J. Ruud
Secretary
Milwaukee, Wisconsin
April 2, 1999
16
<PAGE> 19
SUPERIOR SERVICES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. []
[ ]
<TABLE>
<CAPTION>
<S><C>
1. ELECTION OF DIRECTORS FOR TERMS FOR ALL 2. In their discretion, the Proxies are
EXPIRING AT 2002 ANNUAL MEETING: FOR WITHHOLD (Except Nominee(s) authorized to vote upon such other
Nominees: Walter G. Winding and ALL ALL written below business as may properly come before
Joseph P. Tate the meeting and at any adjournment thereof.
[ ] [ ] [ ] The Board of Directors recommends a vote
(Instruction: To withhold authority for all nominees set forth above.
to vote for any individual nominee.
write that nominee's name in the THIS PROXY WHEN PROPERLY EXECUTED WILL BE
space provided below.) VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER.
-------------------------------- IF NO SUCH 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 JUDGEMENT OF THE PROXIES NAMED
HEREIN.
The undersigned acknowledges receipt of the
Notice of said Annual Meeting and the
accompanying Annual Report to Shareholders.
Dated: 1999
----------------
Signature(s)
--------------------------------
-------------------------------------------
(Please print your 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.
</TABLE>
- --------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
<PAGE> 20
PROXY PROXY
SUPERIOR SERVICES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SUPERIOR SERVICES, INC.
1999 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 11, 1999
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 1999
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 11, 1999, 1:00 p.m. local time,
and at any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on back)
- --------------------------------------------------------------------------------
