<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 /X/
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 Section 240.14a-11(c) or Section
240.14a-12
TRC COMPANIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Merrill Corporation -- Edgar Services Group
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
<PAGE>
TRC
NOTICE OF ANNUAL MEETING TO BE HELD OCTOBER 23, 1998
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of TRC Companies, Inc. will be held Friday,
October 23, 1998 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 PricewaterhouseCoopers LLP as independent
accountants for the Company for the fiscal year ending June 30, 1999;
and
3. Such other business as may properly come before the meeting or any
adjournments thereof.
Shareholders of record at the close of business on September 8, 1998 will be
entitled to vote at the meeting.
Shareholders who do not expect to attend the meeting and wish their shares voted
pursuant to the accompanying proxy are requested to sign and date the proxy and
return it as soon as possible in the enclosed reply envelope.
By Order of the Board of Directors
/s/ Harold C. Elston, Jr.
Harold C. Elston, Jr.
Senior Vice President, Secretary and Treasurer
Dated at Windsor, Connecticut
September 23, 1998
TRC Companies, Inc.
5 Waterside Cossing - Windsor, Connecticut 06095
Telephone 860-289-8631 - Fax 860-298-6399
CUSTOMER-FOCUSED SOLUTIONS
<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 23, 1998, and any 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, 1998, 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, 1998 are incorporated herein by reference.
The record date for determining those shareholders entitled to vote at the
Annual Meeting was September 8, 1998. 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 23, 1998.
- -------------------------
*Does not include 459,770 shares issued in connection with the acquisition of
Environmental Solutions, Inc. which will not be votable until delivered in
December 1999, and 94,100 shares issued in connection with the acquisition of
and Hydro-Geo Consultants, Inc. which will not be votable until delivered in
February 2003.
<PAGE>
PRINCIPAL SHAREHOLDERS
The table below sets forth information as of September 8, 1998 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.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
------------------- ------------------ ------------
<S> <C> <C>
State of Wisconsin Investment Board 664,900 9.8
Madison, Wisconsin
T. Rowe Price Associates, Inc. 525,000 7.7
Baltimore, Maryland
The TCW Group, Inc. 456,300 6.7
Los Angeles, California
Dimensional Fund Advisors Inc. 441,250 6.5
Santa Monica, California
Sven B. Karlen, Jr. 425,000 6.3
Grandview Partners L.P.
Boston, Massachusetts
Richard D. Ellison 394,828* 5.8
Chairman, President,
Chief Executive Officer,
and Director of the Company
Windsor, Connecticut
</TABLE>
- -------------------------
*See Footnote, page 5.
-2-
<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. All of the nominees were elected
directors at the 1997 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.
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION SERVED AS
DURING PAST FIVE YEARS AND DIRECTOR
OTHER CORPORATE DIRECTORSHIPS AGE SINCE
----------------------------- --- ---------
<S> <C> <C>
Richard D. Ellison 59 1997
CHAIRMAN, PRESIDENT, CHIEF EXECUTIVE OFFICER AND
DIRECTOR OF THE COMPANY AND PRESIDENT
OF TRC ENVIRONMENTAL SOLUTIONS, INC.
Edward G. Jepsen 55 1989
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
OF AMPHENOL CORPORATION
Edward W. Large, Esq. 68 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. 54 1997
PRESIDENT OF TRC MARIAH ASSOCIATES, INC.
J. Jeffrey McNealey, Esq. 54 1985
PARTNER IN THE LAW FIRM OF PORTER, WRIGHT, MORRIS & ARTHUR
</TABLE>
At the Annual Meeting of Shareholders held on October 24, 1997,
approximately 87% 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
99% of the shares voting at that Meeting were cast in favor of each of the
foregoing directors.
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.
-3-
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors held nine meetings during the fiscal year ended June
30, 1998. All directors had perfect attendance records for meetings of the
Board of Directors and of the committees of which they were members.
The Audit Committee of the Board of Directors, currently composed of
Messrs. Jepsen (Chairman), Large and McNealey, met two times during the fiscal
year ended June 30, 1998. The Audit Committee, which is elected annually,
reviews with PricewaterhouseCoopers 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.
The Compensation Committee of the Board of Directors, currently composed of
Messrs. Large (Chairman), Jepsen and McNealey, met two times during the fiscal
year ended June 30, 1998. 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 page 9).
The Nominating Committee of the Board of Directors, currently composed of
Messrs. McNealey (Chairman) and Large, met two times during the fiscal year
ended June 30, 1998. The Committee reviews the organization, structure, size
and composition of the Board and recommends to the Board nominees to serve as
directors.
The Special Committee of the Board of Directors formed in fiscal 1997 met
six times in fiscal 1998 and was dissolved in December 1997.
COMPENSATION OF DIRECTORS
Each non-employee director of the Company receives an annual retainer of
$20,000. 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. In lieu
of receiving their retainers for fiscal 1999 and 2000, Messrs. Large, Jepsen and
McNealey each elected to receive options to purchase 20,000 shares of the
Company's Common Stock. These options will vest in equal quarterly installments
over the next two years assuming continued service during that period. See
Footnote 3 on page 6 for a further description of these options.
-4-
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth as of September 8, 1998, 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.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED DIRECTLY PERCENT OF
NAME OF INDIVIDUAL OR GROUP OR INDIRECTLY(1) COMMON STOCK(2)
- --------------------------- ------------------- ---------------
<S> <C> <C>
John H. Claussen 34,978(3) *
Richard D. Ellison 394,828(4) 5.8
Glenn E. Harkness 10,746(5) *
Edward G. Jepsen 63,566(6) *
Miro Knezevic 173,066(7) 2.5
Edward W. Large 22,166(6) *
Richard J. McGuire, Jr. 238,701(8) 3.5
J. Jeffrey McNealey 16,206(6) *
All directors and executive officers as a group 968,896(9) 14.0
(9 individuals)
</TABLE>
- -------------------------
*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 28,959 shares that may be acquired by the exercise of outstanding
stock options.
(4) Includes 50,000 shares that may be acquired by the exercise of outstanding
options and 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 December 1999, and
Mr. Ellison disclaims beneficial ownership of these shares. See Certain
Transactions, page 11.
(5) Includes 6,708 shares that may be acquired by the exercise of outstanding
stock options.
(6) Includes 7,166 shares that may be acquired by the exercise of outstanding
stock options.
(7) Includes 26,563 shares that may be acquired by the exercise of outstanding
options and 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 December 1999, and
Mr. Knezevic disclaims beneficial ownership of these shares. See Certain
Transactions, page 11.
(8) Includes 2,500 shares that may be acquired by the exercise of outstanding
stock options.
(9) Includes 144,145 shares for directors and executive officers that may be
acquired by the exercise of outstanding options and warrants.
-5-
<PAGE>
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 (the "named executive officers")
for each of the three years in the period ended June 30, 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation(1) Compensation(2), (3)
---------------------- -------------------- All Other
Name and Option Compen-
Principal Position Year Salary ($) Bonus ($) Awards (#) Sation ($)(4)
------------------ ---- ---------- --------- ----------- --------------
<S> <C> <C> <C> <C> <C>
RICHARD D. ELLISON 1998 $336,300 $ - 100,000 $ -
Chairman, President and 1997 340,800 - 18,000 -
Chief Executive Officer 1996 392,200 - - -
MIRO KNEZEVIC 1998 205,500 - 112,500 -
Executive Vice President 1997 210,800 - 15,000 -
of TRC Environmental 1996 224,900 - - -
Solutions, Inc.
JOHN H. CLAUSSEN 1998 197,300 - 25,000 6,276
President of TRC 1997 197,700 - 35,000 6,182
Environmental Corporation 1996 195,600 15,000 5,000 6,476
RICHARD J. MCGUIRE, JR. 1998 189,900 - 20,000 6,380
President of TRC 1997 196,000 - 18,000 3,522
Mariah Associates, Inc. 1996 228,900 - - 6,239
GLENN E. HARKNESS 1998 161,600 - 5,000 5,732
Senior Vice President of TRC 1997 158,400 - 9,000 6,415
Environmental Corporation 1996 156,700 - 2,250 5,918
</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) Options are granted at 100% of market price of the underlying common
stock on the date of grant. All options granted in fiscal 1998 have
ten-year terms and vest in equal one-eighth increments in each of the
eight fiscal quarters following the date of grant. Options were granted
in fiscal 1998 in exchange for a reduction in cash compensation to
grantees over the next two years with individuals receiving one option
for every two dollars in aggregate salary reduction over such two-year
period. As an example, Mr. Ellison's grant of 100,000 options reflects a
commitment of a cash salary reduction of $100,000 in each of the next two
years or an aggregate salary reduction of $200,000. These options do not
terminate on termination of employment except to the extent not then
vested. Vesting may accelerate in certain change of control situations.
Series A and Series B options granted in fiscal 1997 lapsed in their
entirety prior to vesting in accordance with their terms.
(4) 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 $1,000 for each executive officer.
-6-
<PAGE>
b) OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning individual grants of
options to purchase the Company's Common Stock during the 1998 fiscal year to
the named executive officers. The Company does not have a program to grant
stock appreciation rights.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------
Potential Realizable Value
at Assumed Annual Rates
Number of of Stock Price Appreciation
Shares % of Total Options For Option Term(2)
Underlying Granted to Exercise or ----------------------------
Options Employees in Base Price Expiration
Name Granted (#)(1) Fiscal Year ($/Sh) Date 5% 10%
---- -------------- ------------------ ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
RICHARD D. ELLISON 100,000 20.6 $4.50 05/31/08 $124,335 $274,725
Chairman, President and
Chief Executive Officer
MIRO KNEZEVIC 112,500 23.2 4.50 05/31/08 139,877 309,066
Executive Vice President
of TRC Environmental
Solutions, Inc.
JOHN H. CLAUSSEN 25,000 5.2 4.50 05/31/08 31,084 68,681
President of TRC
Environmental Corporation
RICHARD J. MCGUIRE, JR. 20,000 4.1 4.50 05/31/08 24,867 54,945
President of TRC
Mariah Associates, Inc.
GLENN E. HARKNESS 5,000 1.0 4.50 05/31/08 6,217 13,736
Senior Vice President of TRC
Environmental Corporation
</TABLE>
- -------------------
(1) Options are granted at 100% of market price of the underlying common
stock on the date of grant. All options granted in fiscal 1998 have
ten-year terms and vest in equal one-eighth increments in each of the
eight fiscal quarters following the date of grant. Options were granted
in fiscal 1998 in exchange for a reduction in cash compensation to
grantees over the next two years with individuals receiving one option
for every two dollars in aggregate salary reduction over such two-year
period. As an example, Mr. Ellison's grant of 100,000 options reflects a
commitment of a cash salary reduction of $100,000 in each of the next two
years or an aggregate salary reduction of $200,000. These options do not
terminate on termination of employment except to the extent not then
vested.
(2) These amounts represent certain assumed rates of appreciation in
accordance with Securities and Exchange Commission rules. The actual
value, if any, that an executive officer may realize is dependent upon
the future performance of the Common Stock and continued employment
through the vesting period. Vesting may accelerate in certain change of
control situations.
-7-
<PAGE>
c) AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT
FISCAL YEAR END
The following table provides information with respect to the named
executive officers concerning the exercise of stock options during the 1998
fiscal year and unexercised options held as of the end of the fiscal year.
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Acquired Options at 6/30/98 6/30/98 ($)(1)
Name On Exercise (#) Value Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- ------------------ ------------------------- --------------------------
<S> <C> <C> <C> <C>
RICHARD D. ELLISON - - - 100,000 $ - $ -
Chairman, President and
Chief Executive Officer
MIRO KNEZEVIC - - - 112,500 - -
Executive Vice President
of TRC Environmental
Solutions, Inc.
JOHN H. CLAUSSEN - - 23,334 42,916 1,667 3,333
President of TRC
Environmental
Corporation
RICHARD J. MCGUIRE, JR. - - - 20,000 - -
President of TRC
Mariah Associates, Inc.
GLENN E. HARKNESS - - 5,333 6,167 - -
Senior Vice President
of TRC Environmental
Corporation
</TABLE>
- -------------------------
1 Based upon the closing price of the Company's Common Stock on June 30, 1998
of $4.50.
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 employment agreements with Richard D.
Ellison and Miro Knezevic. In addition, all amounts outstanding under the
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 11.
-8-
<PAGE>
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 principal
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.
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. The Committee is establishing a bonus program for fiscal 1999
where amounts payable will be determined by financial performance of the
Company.
LONG-TERM INCENTIVE AWARDS. The purpose of this element of the executive
compensation program is to link management pay with the long-term interest of
shareholders, rather than performance in one single fiscal year. The Committee
is currently using ten-year stock options to achieve the long-term link and has
adopted a vesting requirement for the first two years of the grant. The options
are granted pursuant to the Company's Stock Option Plan adopted in 1979 and
subsequently amended. In fiscal 1998, Mr. Ellison's compensation consisted of a
base salary of $336,300. In addition, Mr. Ellison elected to receive options to
purchase 100,000 shares of the Company's common stock in exchange for a
reduction in his cash salary compensation of $100,000 in each of the next two
years beginning June 1, 1998.
SUBMITTED BY THE COMPENSATION COMMITTEE:
Edward W. Large
Edward G. Jepsen
J. Jeffrey McNealey
-9-
<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, 1993.
[GRAPH]
<TABLE>
<CAPTION>
JUN-93 JUN-94 JUN-95 JUN-96 JUN-97 JUN-98
<S> <C> <C> <C> <C> <C> <C>
TRC $100.00 $142.86 $107.14 $ 83.93 $ 57.14 $ 64.29
S&P 500 $100.00 101.41 127.84 161.08 216.98 282.42
PEER GROUP $100.00 76.61 67.81 61.91 59.74 62.69
</TABLE>
The companies included in the peer group are Dames & Moore Group Company, Earth
Tech Inc. (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.
-10-
<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. The stock is not
deliverable until the end of 1999. Mr. Ellison was a 75% shareholder and Mr.
Knezevic a 25% shareholder of Environmental Solutions, Inc., and they are
entitled to 75% and 25% of the purchase consideration, respectively. In July
1997, the Note was amended to increase the interest rate to the greater of
the interest rate paid on the Company's bank debt or 7 3/4% in exchange for
an extention of the payment term on the remaining principal balance of $7
million. Also, 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. Interest is payable
quarterly on the Note at 5 3/4% with the excess accruing and payable at final
maturity. Interest payments on the Note totaled $414,631 in fiscal 1998 with
an additional $147,243 of interest accruing. Also, on July 1, 1998 the
Company made the first of two equal principal payments on the Note of $3.5
million. Mr. Ellison's brother-in-law was employed in the normal course of
business by the subsidiary during fiscal 1998 at an annual salary (including
bonus) of $113,530.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
nominated the firm of PricewaterhouseCoopers LLP to be independent accountants
for the Company for the fiscal year ending June 30, 1999.
PricewaterhouseCoopers LLP has been the Company's independent accountants for
twelve years. A representative of PricewaterhouseCoopers 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
PRICEWATERHOUSECOOPERS 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 1999 Annual Meeting should write, on or before May 27, 1999, 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
1999 Annual Meeting of Shareholders, such proposal must also be received by the
Secretary of the Company on or before May 27, 1999, 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.
-11-
<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/ Harold C. Elston, Jr.
Harold C. Elston, Jr.
Senior Vice President, Secretary and Treasurer
Dated at Windsor, Connecticut
September 23, 1998
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<PAGE>
SOLICITED BY THE BOARD OF DIRECTORS OF
TRC COMPANIES, INC.
PROXY
I (We) hereby appoint Richard D. Ellison and Harold C. Elston, Jr. 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 23, 1998 at 10:00 a.m. at the executive offices
of the Company at 5 Waterside Crossing, Windsor, Connecticut and at any
adjournments 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.
</TABLE>
ITEM 2--The appointment of PricewaterhouseCoopers LLP as independent accountants
for the Company for the fiscal year ending June 30, 1999.
/ / 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 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 ______________________, 1998
__________________________________
__________________________________
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.
