<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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 Section240.14a-11(c) or
Section240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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<PAGE>
TRC
NOTICE OF ANNUAL MEETING TO BE HELD OCTOBER 24, 1997
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of TRC Companies, Inc. will be held
Friday, October 24, 1997 at 10:00 a.m., at the Company's executive office, 5
Waterside Crossing, Windsor, Connecticut, to consider and take action on the
following items:
1. The election of five directors for the ensuing year;
2. The appointment of Price Waterhouse LLP as independent accountants
for the Company for the fiscal year ending June 30, 1998; and
3. Such other business as may properly come before the meeting or any
adjournments thereof.
Only holders of record of Common Stock as of the close of business on
September 8, 1997 are entitled to receive notice of and vote at this meeting.
If your shares are held of record by a broker or other nominee in street
name, you cannot vote at the meeting unless the broker or nominee gives
written notice to the Company that you are its authorized representative for
those shares.
By Order of the Board of Directors
/s/ Martin H. Dodd
Martin H. Dodd
Senior Vice President and Secretary
Dated at Windsor, Connecticut
September 24, 1997
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT AT ONCE IN THE ENCLOSED
ENVELOPE.
<PAGE>
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of TRC Companies, Inc. (the "Company") from the
holders of the Company's Common Stock for the Annual Meeting (the "Meeting")
to be held October 24, 1997, and any adjournment or adjournments thereof.
The giving of a proxy does not affect your right to vote should you attend
the Meeting in person, and the proxy may be revoked at any time before it is
voted by voting in person at the Meeting or by giving the Secretary of the
Company a signed instrument revoking the proxy or a signed proxy of a later
date. Each properly executed proxy not revoked will be voted in accordance
with instructions therein. If no instructions are specified in the proxy, it
is the intention of the persons named in the accompanying proxy to vote FOR
the election of the nominees named therein as directors of the Company and
FOR the matters described in item 2 in the Notice of Annual Meeting.
The vote required for the election of directors and approval of the other
proposal is set forth in the discussion of the proposals. Abstentions are
not counted as votes "for" or "against" a proposal, but where the affirmative
vote of a majority of the shares of Common Stock present or represented on a
proposal is required for approval (Proposal 2), abstentions are counted in
determining the number of shares present or represented. On proposals which
require the affirmative vote of a majority of the outstanding shares for
approval, abstentions have the same effect as a vote "against." New York
Stock Exchange rules permit brokers to vote on both proposals in instances
where the broker has not received instructions from the beneficial owner of
the shares.
The Company's Annual Report, including financial statements, for the
fiscal year ended June 30, 1997, is being mailed to shareholders along with
the Notice of Annual Meeting and Proxy Statement. The financial statements
and the discussion and analysis by management of the Company's results of
operations and financial condition contained in the Annual Report of the
Company for the fiscal year ended June 30, 1997 are incorporated herein by
reference.
The record date for determining those shareholders entitled to vote at
the Annual Meeting was September 8, 1997. On that date, the Company had
6,228,332 shares of Common Stock outstanding and entitled to vote*. Each
share of Common Stock is entitled to one vote.
The mailing address of the Company's principal executive office is 5
Waterside Crossing, Windsor, CT 06095, and the approximate date on which this
Proxy Statement and the form of proxy are first being sent to shareholders is
September 24, 1997.
___________________
*Does not include shares issued in connection with the acquisition of the
assets of Environmental Solutions, Inc. which will not be votable until
delivered in 1999. See Certain Transactions, page 13.
<PAGE>
PRINCIPAL SHAREHOLDERS
The table below sets forth information as of September 8, 1997 with
respect to all persons known to the Company to be the beneficial owner of
more than 5% of the Company's Common Stock. Information in the table was
reported to the Company by the beneficial owners on forms as required by the
Securities and Exchange Commission.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
------------------- ------------------ ------------
State of Wisconsin Investment Board 647,900 9.7%
Madison, Wisconsin
T. Rowe Price 525,000 7.8
Baltimore, Maryland
The TCW Group, Inc. 448,100 6.7
Los Angeles, California
Dimensional Fund Advisors Inc. 426,050 6.4
Santa Monica, California
Sven B. Karlen, Jr. 425,000 6.4
Grandview Partners L.P.
Boston, Massachusetts
Richard D. Ellison 382,328* 5.7
Chairman, President,
Chief Executive Officer and
Director of the Company
Windsor, Connecticut
______________________
*See Footnote, page 5
2
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors held seven (7) meetings during the fiscal year
ended June 30, 1997. Messrs. Large and McNealey had perfect attendance
records for meetings of the Board of Directors and of the committees of which
they were members. Mr. Jepsen attended all but one of the meetings of the
Board and attended all his committee meetings. Messrs. Ellison and McGuire
had perfect attendance records for all meetings after they were elected to
the Board on April 1, 1997.
The Audit Committee of the Board of Directors, currently composed of
Messrs. Jepsen (Chairman), Large and McNealey, met four times during the
fiscal year ended June 30, 1997. The Audit Committee, which is elected
annually, reviews with Price Waterhouse LLP, the Company's independent
accountants, the audit plan and the internal accounting controls for the
Company and its subsidiaries, as well as the Company's consolidated financial
statements. The Audit Committee reports to the Board of Directors. It also
recommends to the Board the selection of the independent accountants for the
Company. In addition, the Audit Committee initiated the investigation into
allegations of improper exercising of stock options and other matters by
former Chairman and Chief Executive Officer Vincent A. Rocco and former
President Bruce D. Cowen and recommended to the Board that a Special
Committee be formed to further this investigation.
Also in fiscal 1997, the Board of Directors formed a Special Committee
composed of Messrs. McNealey (Chairman), Large and Jepsen to investigate the
above noted allegations concerning Messrs. Rocco and Cowen. The Special
Committee met ten times in fiscal 1997. The Special Committee conducted its
investigation with the assistance of outside counsel and accountants who had
no prior affiliation with the Company and also consulted with the Company's
independent accountants. The investigation revealed no circumstances that
had any material effect on the Company's historical audited financial
statements.
The Compensation Committee of the Board of Directors, currently composed
of Messrs. Large (Chairman), Jepsen and McNealey, met two (2) times during
the fiscal year ended June 30, 1997. The Committee approves the general
salary scale for senior employees of the Company and its subsidiaries and
specifically establishes the compensation package for the Chairman and the
executive officers. The Committee's actions are discussed more fully in the
Compensation Committee Report on Executive Compensation (see pages 10 and 11).
The Nominating Committee of the Board of Directors, currently composed of
Messrs. McNealey (Chairman) and Large, met once during the fiscal year ended
June 30, 1997. The Committee reviews the organization, structure, size and
composition of the Board and recommends to the Board nominees to serve as
directors.
3
<PAGE>
ELECTION OF DIRECTORS
The five individuals named in the following table have been nominated for
election to the Board of Directors, each to serve for a one-year term and
until his successor is duly elected and qualified. Messrs. Jepsen, Large and
McNealey were elected directors at the 1996 Annual Meeting.
Should any of such nominees decline or become unable to serve as a
director prior to election, the persons named in the proxy will vote for the
election of a substitute nominee, if any, designated by the Board of
Directors. The Company has no reason to believe that any nominee will
decline or be unable to serve.
NAME, PRINCIPAL OCCUPATION SERVED AS
DURING PAST FIVE YEARS AND DIRECTOR
OTHER CORPORATE DIRECTORSHIPS AGE SINCE
----------------------------- --- ----------
Richard D. Ellison 58 1997
CHAIRMAN, CHIEF EXECUTIVE OFFICER, PRESIDENT AND
DIRECTOR OF THE COMPANY AND PRESIDENT OF
TRC ENVIRONMENTAL SOLUTIONS, INC.
Edward G. Jepsen 54 1989
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER OF AMPHENOL CORPORATION
Edward W. Large, Esq. 67 1990
COUNSEL TO THE LAW FIRMS OF CROWELL & MORING
AND DAY, BERRY & HOWARD; FORMERLY EXECUTIVE
VICE PRESIDENT AND DIRECTOR OF UNITED
TECHNOLOGIES CORPORATION
Richard J. McGuire, Jr. 53 1997
PRESIDENT OF TRC MARIAH ASSOCIATES, INC.
J. Jeffrey McNealey, Esq. 53 1985
PARTNER IN THE LAW FIRM OF PORTER,
WRIGHT, MORRIS & ARTHUR
At the Annual Meeting of Shareholders held on October 25, 1996,
approximately 98% of the total number of shares entitled to vote at that
Meeting for the election of directors were represented in person or by proxy.
More than 92% of the shares voting at that Meeting were cast in favor of
Messrs. Jepsen, Large and McNealey.
The affirmative vote of a plurality of the votes cast at the Annual
Meeting is required to elect each nominee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE ABOVE
NOMINEES AS DIRECTORS OF THE COMPANY.
4
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth as of September 8, 1997 (or other
specified date), the total number of shares of the Company's Common Stock
beneficially owned by each director and named executive officer of the
Company and all directors and executive officers as a group based upon
information furnished by each director and executive officer.
SHARES BENEFICIALLY
OWNED DIRECTLY PERCENT OF
NAME OF INDIVIDUAL OR GROUP OR INDIRECTLY(1) COMMON STOCK(2)
- --------------------------- ------------------- --------------
John H. Claussen 14,428(3) *
Richard D. Ellison 382,328(4) 5.7
Glenn E. Harkness 13,462(5) *
Edward G. Jepsen 27,833(6) *
Miro Knezevic 143,442(7) 2.1
Edward W. Large 17,333(6) *
Richard J. McGuire, Jr. 233,573 3.5
J. Jeffrey McNealey 10,173(6) *
Vincent A. Rocco 246,122(8) 3.7
Bruce D. Cowen 243,353(8) 3.6
All directors and executive officers as
a group (10 individuals) 855,231(9) 12.6
_____________
*Indicates that the number of shares owned represents less than 1% of the
Common Stock
(1) Includes shares which may be acquired within sixty (60) days by the
exercise of outstanding options and warrants.
(2) The number of shares that may be acquired within sixty (60) days by the
exercise of outstanding options and warrants has been added to the
number of shares actually outstanding for purposes of computing
ownership percentages.
(3) Includes 9,583 shares that may be acquired by exercise of outstanding
stock options.
(4) Includes 37,500 shares that may be acquired by the exercise of outstanding
warrants. Also includes 344,828 shares payable pursuant to the Asset
Purchase Agreement dated March 21, 1994, under which the Company purchased
the business assets, liabilities and obligations of Environmental
Solutions, Inc. These shares are not deliverable until the end of 1999,
and Mr. Ellison disclaims beneficial ownership of these shares. See
Certain Transactions, page 13.
(5) Includes 10,667 shares that may be acquired by exercise of outstanding
stock options.
(6) Includes 2,333 shares that may be acquired by the exercise of outstanding
stock options.
(7) Includes 12,500 shares that may be acquired by the exercise of outstanding
warrants. Also includes 114,942 shares payable pursuant to the Asset
Purchase Agreement dated March 21, 1994, under which the Company purchased
the business assets, liabilities and obligations of Environmental
Solutions, Inc. These shares are not deliverable until the end of 1999,
and Mr. Knezevic disclaims beneficial ownership of these shares. See
Certain Transactions, page 13.
(8) Includes shares beneficially owned as of December 31, 1996. Messrs. Rocco
and Cowen resigned on April 1, 1997.
(9) Includes 83,249 shares for directors and executive officers that may be
acquired by the exercise of outstanding options and warrants. Excludes any
shares held by Messrs. Rocco and Cowen.
5
<PAGE>
COMPENSATION OF DIRECTORS
Each non-employee director of the Company receives an annual retainer of
$12,000. Directors who are also employees of the Company or any of the
Company's subsidiaries receive no remuneration for serving as directors. In
addition, the directors participate in the Company's Stock Option Plan.
Messrs. Large, Jepsen and McNealey each received options to purchase 19,000
shares of the Company's Common Stock in fiscal 1997.
COMPENSATION OF EXECUTIVE OFFICERS
A) SUMMARY COMPENSATION TABLE
The Summary Compensation Table that follows sets forth the compensation
for services in all capacities earned by the Company's Chairman, Chief
Executive Officer and President and the other four most highly compensated
executive officers of the Company and its subsidiaries as well as the former
Chairman and Chief Executive Officer and former President of the Company (the
"named executive officers") for each of the three years in the period ended
June 30, 1997.
6
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation(1) Compensation(2)
--------------------- ---------------
Name and Option All other
Principal Position Year Salary ($) Bonus ($) Awards (#) Compensation ($)(3)
------------------ ---- ---------- --------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
RICHARD D. ELLISON 1997 340,800 - 18,000 -
Chairman, Chief Executive 1996 392,200 - - -
Officer and President 1995 455,900 - - -
MIRO KNEZEVIC 1997 210,800 - 15,000 -
Executive Vice President 1996 224,900 - - -
of TRC Environmental 1995 245,900 - - -
Solutions, Inc.
JOHN H. CLAUSSEN 1997 197,700 - 35,000 6,182
President of TRC 1996 195,600 15,000 5,000 6,476
Environmental Corporation 1995 188,000 15,000 5,000 7,596
RICHARD J. MCGUIRE, JR. 1997 196,000 - 18,000 3,522
President of TRC 1996 228,900 - - 6,239
Mariah Associates, Inc. 1995 159,000 - - 4,991
GLENN E. HARKNESS 1997 158,400 - 9,000 6,415
Senior Vice President of TRC 1996 156,700 - 2,250 5,918
Environmental Corporation 1995 150,700 - 2,500 5,746
VINCENT A. ROCCO 1997 211,500(4) - 75,000 2,856
Former Chairman and 1996 275,000 65,000 - 6,493
Chief Executive Officer 1995 257,000 65,000 25,000 8,081
BRUCE D. COWEN 1997 176,700(4) - 75,000 5,052
Former President 1996 223,000 65,000 - 6,576
1995 207,000 65,000 25,000 8,309
</TABLE>
___________________
(1) Pursuant to the rules on executive compensation disclosure adopted by the
Securities and Exchange Commission, no amounts for executive perquisites
and other personal benefits are shown because the aggregate dollar amount
per executive is less than either $50,000 or 10% of annual salary and
bonus.
(2) The Company has not made any restricted stock awards and its long-term
incentive awards to executive officers consist of stock options rather
than cash payments.
(3) Amounts of all other compensation include (i) contributions by the Company
under the 401(k) Retirement and Savings Plan and (ii) officers'
supplemental health benefit of up to $1,000 for each executive officer.
(4) Messrs. Rocco and Cowen resigned as of April 1, 1997. Compensation shown
is for the period July 1, 1996 through April 1, 1997.
7
<PAGE>
B) OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning individual grants of
options to purchase the Company's Common Stock during the 1997 fiscal year to
the named executive officers. The Company does not have a program to grant
stock appreciation rights.
<TABLE>
<CAPTION>
Individual Grants
- ---------------------------------------------------------------------------------------------------
Potential Realizable Value
Number of at Assumed Annual Rates
Shares % of Total Options of Stock Price Appreciation
Underlying Granted to Exercise or for Option Term(2)
Options Employees in Base Price Expiration ---------------------------
Name Granted (#)(1) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ------------------ -------------- ------------------ ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
RICHARD D. ELLISON 18,000 2.4 $3.50 05/02/05 $17,407 $ 38,462
Chairman, Chief Executive
Officer and President
MIRO KNEZEVIC 15,000 2.0 3.50 05/02/05 14,506 32,051
Executive Vice President
of TRC Environmental
Solutions, Inc.
JOHN H. CLAUSSEN 35,000 4.8 3.93 05/02/05 37,992 83,944
President of TRC
Environmental Corporation
RICHARD J. MCGUIRE, JR. 18,000 2.4 3.50 05/02/05 17,407 38,462
President of TRC
Mariah Associates, Inc.
GLENN E. HARKNESS 9,000 1.2 3.50 02/05/02 8,704 19,231
Senior Vice President of TRC
Environmental Corporation
VINCENT A. ROCCO(3) 75,000 10.1 4.00 08/15/01 - -
Former Chairman and
Chief Executive Officer
BRUCE D. COWEN(3) 75,000 10.1 4.00 08/15/01 - -
Former President
</TABLE>
____________________
(1) Options are granted at 100% of the market price of the underlying Common
Stock on the date of grant and vest 331/3% a year beginning one year from
the date of grant (or in the case of the Series A and Series B Options,
beginning August 1, 1998). Most options granted in fiscal 1997 have an
eight-year term and are equally divided between two series. Series A lapse
in their entirety in the event the earnings per share of the Company's
Common Stock for the fiscal year ended June 30, 1998 are not greater than
or equal to 26 cents (excluding any special, one-time charges or gains).
Series B lapse in their entirety in the event the average days outstanding
on accounts receivable is not less than or equal to 115 days as of June 30,
1998. In addition to receiving a total of 15,000 Series A and Series B
Options, Mr. Claussen received options to purchase 20,000 shares which vest
331/3% a year beginning one year from the date of grant and have a five-year
term. Vesting of all options may accelerate in certain change-of-control
situations.
(2) These amounts represent certain assumed rates of appreciation in accordance
with Securities and Exchange Commission rules. The actual value, if any,
that an executive officer may realize is dependent upon the future
performance of the Common Stock and continued employment through the
vesting period.
(3) All options and warrants held by Messrs. Rocco and Cowen were canceled
pursuant to their termination agreements dated April 1, 1997.
8
<PAGE>
C) AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT
FISCAL YEAR END
The following table provides information with respect to the named
executive officers concerning the exercise of stock options during the 1997
fiscal year and unexercised options held as of the end of the fiscal year.
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Acquired Options at 6/30/97 (#) 6/30/97 ($)(1)
Name on Exercise (#) Value Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------- ---------------- ------------------ -------------------------- -------------------------
<S> <C> <C> <C> <C>
RICHARD D. ELLISON - - - 18,000 $ - $ 9,000
Chairman, Chief Executive
Officer and President
MIRO KNEZEVIC - - - 15,000 - 7,500
Executive Vice President
of TRC Environmental
Solutions, Inc.
JOHN H. CLAUSSEN - - 9,583 39,167 - 7,500
President of TRC
Environmental
Corporation
RICHARD J. MCGUIRE, JR. - - - 18,000 - 9,000
President of TRC
Mariah Associates, Inc.
GLENN E. HARKNESS - - 10,667 9,833 - 4,500
Senior Vice President
of TRC Environmental
Corporation
VINCENT A. ROCCO(2) - - - - - -
Former Chairman and
Chief Executive Officer
BRUCE D. COWEN(2) - - - - - -
Former President
</TABLE>
__________________
(1) Based upon the closing price of the Company's Common Stock on June 30, 1997
of $4.00.
(2) All options held by Messrs. Rocco and Cowen were canceled pursuant to their
termination agreements dated April 1, 1997.
9
<PAGE>
D) EMPLOYMENT CONTRACTS AND TERMINATION/CHANGE-IN-CONTROL ARRANGEMENTS
Pursuant to the Company's acquisition of Environmental Solutions, Inc.,
a subsidiary of the Company entered into four-year employment agreements with
Richard D. Ellison and Miro Knezevic. The agreements expire according to
their terms on March 21, 1998 and entitle Messrs. Ellison and Knezevic to
annual salaries of $440,000 and $235,000, respectively, in the initial year
subject to adjustment upwards or downwards in subsequent years based on
certain profit goals for the TRC Environmental Solutions, Inc. business. In
addition, all amounts outstanding under the $7 million Amended Subordinated
Note issued by the Company in favor of R&M Corporation, a corporation of
which Messrs. Ellison and Knezevic are the sole shareholders, are subject to
acceleration in the event Mr. Ellison no longer holds the office of Chairman,
Chief Executive Officer and President of the Company as a result of action of
the Company's Board of Directors. See Certain Transactions, page 13.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed of three independent, outside directors. The Committee is responsible
for establishing and administering the Company's executive compensation
programs. The Committee seeks to achieve the following objectives:
- Competitive pay that allows the Company to attract and retain
personnel with skills critical to the long-term success of the
Company;
- Pay for performance to motivate and reward individual and team
performance in attaining business objectives and maximizing
shareholder value; and
- Maintenance of compensation costs that enable the Company to remain
competitive in the pricing of its services.
The Company's executive compensation program includes three components:
(1) base salary; (2) annual bonus; and (3) long-term incentive awards. It is
the intent of the Committee to link executive compensation as directly as
possible with the Company's financial performance.
10
<PAGE>
BASE SALARY Ranges of appropriate base salaries are determined by an
analysis of salary data on positions of comparable
responsibility within the environmental services sector.
Committee approval of individual salary changes is based on
performance of the executive against financial and strategic
objectives and position of the executive in the competitive
pay range. Consistent with the compensation philosophy
discussed above, the Committee's preference will be to
enhance annual bonuses and long-term awards rather than
salaries when possible, given competitive salary conditions.
ANNUAL BONUS Annual bonuses are paid pursuant to an Executive Incentive
Compensation Plan established in 1988 for officers and
senior managers of the Company and its subsidiaries. Under
the Plan, an incentive pool is created each fiscal year and
is distributed if certain financial goals for the Company
are met.
The amount of the incentive pool distributed depends on a
number of factors including net income objectives and
performance on strategic initiatives.
LONG-TERM The purpose of this element of the executive compensation
INCENTIVE AWARDS program is to link management pay with the long-term interest
of shareholders, rather than performance in one single
fiscal year as is the case with annual bonuses. The
Committee is currently using eight-year incentive stock
options to achieve the long-term link and has adopted a
vesting requirement for the first three years of the
grant. The options are granted pursuant to the
Company's Stock Option Plan adopted in 1979 and
subsequently amended. In determining annual stock
option grants, the Committee bases its decision on the
individual executive's performance and potential to
improve shareholder value.
SUBMITTED BY THE COMPENSATION COMMITTEE:
Edward W. Large
Edward G. Jepsen
J. Jeffrey McNealey
11
<PAGE>
STOCK PERFORMANCE INFORMATION
The following graph compares the cumulative, five-year total return on
the Company's Common Stock with the Standard & Poor's 500 Stock Index and an
index of peer companies. The peer group consists of six other environmental
companies providing services similar to those of TRC. The figures presented
assume that all dividends, if any, paid over the five-year period were
reinvested, and the starting value of each index and the investment in the
Company's stock was $100 on June 30, 1992.
CUMULATIVE TOTAL RETURN
YEARS ENDED
JUN -92 JUN-93 JUN-94 JUN-95 JUN-96 JUN-97
TRC $100.00 $ 60.87 $ 86.96 $ 65.22 $ 51.09 $ 34.78
S&P 500 100.00 113.63 115.23 145.27 183.04 246.55
PEER GROUP 100.00 96.36 73.82 65.34 59.65 57.57
The companies included in the peer group are Dames & Moore, Inc., Earth
Technology Corp. (acquired by Tyco International Ltd. in February, 1996),
EMCON, Inc., Harding Lawson Associates, Inc., ICF Kaiser International, Inc.
and Roy F. Weston, Inc. Information concerning the peer group and the
Standard & Poor's 500 Stock Index was supplied to the Company by Standard &
Poor's Compustat, a division of The McGraw-Hill Companies.
12
<PAGE>
CERTAIN TRANSACTIONS
On March 21, 1994, a subsidiary of the Company acquired the business
assets, liabilities and obligations of Environmental Solutions, Inc., an
environmental engineering and consulting business headquartered in Irvine,
California. The purchase price for the assets consisted of approximately
$4.8 million in cash; a $14 million 5.75% three-year promissory note (the
"Note"); and 459,770 shares of the Company's Common Stock. None of the stock
is payable until the end of 1999. Mr. Ellison, President of the subsidiary
now known as TRC Environmental Solutions, Inc., was a 75% shareholder of the
selling company and is entitled to 75% of the purchase consideration. Mr.
Ellison received a total of $225,786 in interest payments on the Note in
fiscal 1997. Mr. Knezevic, Executive Vice President of the subsidiary, was a
25% shareholder of the selling company and is entitled to 25% of the purchase
consideration. Mr. Knezevic received a total of $75,261 in interest payments
on the Note in fiscal 1997. The Company did not make the $7 million final
principal payment due March 21, 1997 on the Note. As a result, the Note was
amended extending the payment term and increasing the interest rate to the
greater of the interest rate paid on the Company's bank debt or 73/4%. In
connection with the amendment of the Note, a warrant to purchase 50,000
shares of the Company's Common Stock at an exercise price of $4.50 with a
term expiring July 11, 2000 was issued. Mr. Ellison's spouse and two of his
brothers-in-law were employed in the normal course of business by the
subsidiary during fiscal 1997 at annual salaries (including bonus) of
$68,864, $120,629, and $115,703, respectively. Law firms of which Mr. Large
was of counsel and Mr. McNealey was a partner were among a number of law
firms which provided legal services to the Company in fiscal 1997.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
nominated the firm of Price Waterhouse LLP to be independent accountants for
the Company for the fiscal year ending June 30, 1998. Price Waterhouse LLP
has been the Company's independent accountants for eleven years. A
representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting and available to make statements and to respond to appropriate
questions from shareholders. The affirmative vote of a majority of shares
present and entitled to vote at the Meeting is required to approve this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPOINTMENT OF PRICE
WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS OF THE COMPANY.
1998 SHAREHOLDER NOMINATIONS AND PROPOSALS
Shareholders who wish to suggest nominees for election to the Board of
Directors at the 1998 Annual Meeting should write, on or before May 27, 1998,
to the Secretary of the Company at 5 Waterside Crossing, Windsor, CT 06095,
stating in detail the qualifications of such persons for consideration by the
Nominating Committee of the Board of Directors.
If any shareholder intends to present a proposal for consideration at
the 1998 Annual Meeting of Shareholders, such proposal must also be received
by the Secretary of the Company on or before May 27, 1998, in order to be
included in the Company's Proxy Statement. Such proposals may be included in
next year's Proxy Statement if they comply with certain rules and regulations
established by the Securities and Exchange Commission.
13
<PAGE>
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors knows of
no other matters that may be brought before the meeting. However, if any
other matters do properly come before the meeting, the persons named in the
enclosed proxy will vote upon them in their discretion and in accordance with
their best judgment.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C., IS AVAILABLE TO
SHAREHOLDERS WITHOUT CHARGE UPON REQUEST. ADDRESS REQUESTS TO: TRC
COMPANIES, INC., 5 WATERSIDE CROSSING, WINDSOR, CT 06095, ATTENTION: INVESTOR
RELATIONS.
The cost of preparing and mailing the Notice of Annual Meeting, Proxy
Statement and Form of Proxy will be paid by the Company. The Company will
request banks, brokers, fiduciaries and similar persons to forward copies of
such material to beneficial owners of the Company's Common Stock in a timely
manner and to request authority for execution of proxies, and the Company
will reimburse such persons and institutions for their out-of-pocket expenses
incurred in connection therewith. To the extent necessary in order to assure
sufficient representation, officers and regular employees of the Company may
solicit the return of the proxies by telephone, personal communication or
other methods. The extent of this solicitation by personal contact will
depend upon the response to the initial solicitation by mail. It is
anticipated that the costs of solicitation, if undertaken, will not exceed
$1,000.
By Order of the Board of Directors
/s/ Martin H. Dodd
Martin H. Dodd
Senior Vice President and Secretary
Dated at Windsor, Connecticut
September 24, 1997
<PAGE>
SOLICITED BY THE BOARD OF DIRECTORS OF
TRC COMPANIES, INC.
PROXY
I (We) hereby appoint Richard D. Ellison and Martin H. Dodd and each of them as
proxies with power of substitution and revocation to vote all my (our) shares of
Common Stock in TRC Companies, Inc., at the Annual Meeting of Shareholders to be
held October 24, 1997 at 10:00 a.m. at the executive offices of the Company at 5
Waterside Crossing, Windsor, Connecticut and at any adjournment thereof: (Please
place mark in one box only.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
ITEM 1--Election of five (5) nominees for directors.
<TABLE>
<S> <C> <C>
FOR WITHHELD Richard D. Ellison, Edward G. Jepsen, Edward W. Large, Richard J. McGuire,
/ / / / Jr. and J. Jeffrey McNealey.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
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</TABLE>
ITEM 2-- The appointment of Price Waterhouse LLP as independent accountants for
the Company for the fiscal year ending June 30, 1998.
/ / FOR / / AGAINST / / ABSTAIN
The Proxies named above will, in their sole discretion, vote upon such other
matters as may properly come before the meeting and any adjournment or
adjournments thereof.
<PAGE>
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE 5 NOMINEES FOR DIRECTOR AND FOR ITEM
2.
Dated ______________________, 1997
__________________________________
__________________________________
Signature(s)
Please sign exactly as your name
or names appear on this Proxy.
Joint owners should each sign.
Attorneys, executors,
administrators, trustees or
guardians should so indicate when
signing.
