<PAGE>
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 Section 240.14a-12
TRC Companies, 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:
------------------------------------------------------------------------
<PAGE>
NOTICE OF ANNUAL MEETING TO BE HELD OCTOBER 27, 2000
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of TRC Companies, Inc. will be held Friday,
October 27, 2000 at 10:00 a.m., at the Company's executive offices, 5 Waterside
Crossing, Windsor, Connecticut, to consider and take action on the following
items:
1. The election of four directors for the ensuing year;
2. The ratification of an amendment to the Company's Stock Option
Plan to increase by 750,000 the number of shares of Common
Stock available for grants.
3. The appointment of PricewaterhouseCoopers LLP as independent
accountants for the Company for the fiscal year ending June
30, 2001; and
4. 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, 2000 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, Chief Financial Officer and Secretary
Dated at Windsor, Connecticut
September 18, 2000
<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 27, 2000, 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 items 2 and
3 in the Notice of Annual Meeting.
The vote required for the election of directors and approval of the
other proposals 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 (Proposals 2 and 3), 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 Proposals 1 and 3 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, 2000, 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, 2000 are incorporated herein by reference.
The record date for determining those shareholders entitled to vote at
the Annual Meeting was September 8, 2000. On that date, the Company had
6,988,842 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 29, 2000.
--------------------------
*Does not include 94,100 shares issued in connection with the acquisition of
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, 2000 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>
Peter R. Kellogg 1,000,000(1) 14.1
New York, New York
State of Wisconsin Investment Board 664,900 9.4
Madison, Wisconsin
Dimensional Fund Advisors Inc. 547,050 7.7
Santa Monica, California
Richard D. Ellison 557,476(2) 7.6
Chairman, President,
Chief Executive Officer,
and Director of the Company
Windsor, Connecticut
</TABLE>
-------------------------
(1) See disclaimer of beneficial ownership contained in a Form 13G filed on
February 11, 2000 with the Securities and Exchange Commission.
(2) See Footnote, page 5.
-2-
<PAGE>
ELECTION OF DIRECTORS
The four 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 1999 Annual Meeting. Mr. Richard J. McGuire, Jr., a
director since 1997, has decided not to stand for reelection in order to pursue
other business interests. The Board is currently evaluating additional
candidates for Board membership.
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 61 1997
CHAIRMAN, PRESIDENT, CHIEF EXECUTIVE OFFICER AND
DIRECTOR OF THE COMPANY AND PRESIDENT
OF TRC ENVIRONMENTAL SOLUTIONS, INC.
Edward G. Jepsen 57 1989
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
OF AMPHENOL CORPORATION
Edward W. Large, Esq. 70 1990
FORMERLY EXECUTIVE VICE PRESIDENT AND DIRECTOR
OF UNITED TECHNOLOGIES CORPORATION
J. Jeffrey McNealey, Esq. 56 1985
PARTNER IN THE LAW FIRM OF PORTER, WRIGHT, MORRIS & ARTHUR
</TABLE>
At the Annual Meeting of Shareholders held on October 22, 1999,
approximately 95% 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 ten meetings during the fiscal year ended
June 30, 2000. Dr. Ellison and Mr. McNealey were present at all meetings of the
Board of Directors, and Messrs. McGuire and McNealey attended all but one of the
meetings of the Board of Directors. All of the directors were present at all
meetings 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 three times during the fiscal
year ended June 30, 2000. 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 members
of the Audit Committee are "independent" as defined under rules of the New York
Stock Exchange. The Audit Committee is governed by a Charter which has been
adopted by the Board of Directors.
The Compensation Committee of the Board of Directors, currently
composed of Messrs. Large (Chairman), Jepsen and McNealey, met three times
during the fiscal year ended June 30, 2000. 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 once during the fiscal year ended
June 30, 2000. The Committee reviews the organization, structure, size and
composition of the Board and recommends to the Board nominees to serve as
directors.
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 2001, Messrs. Large, Jepsen and McNealey
each elected to receive options to purchase 5,333 shares of the Company's Common
Stock. These options vest in equal quarterly installments over the year assuming
continued service during that period. See Footnote 4 on page 6 for a further
description of these options. In fiscal 2000, Messrs. Large, Jepsen and McNealey
each received options to purchase 7,000 shares of the Company's Common Stock at
an exercise price of $6.25 pursuant to the Company's Stock Option Plan on terms
as described in Footnote 3 on page 6.
-4-
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth as of September 8, 2000, 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 97,687(3) 1.4
Richard D. Ellison 557,476(4) 7.6
Glenn E. Harkness 34,172(5) *
Edward G. Jepsen 223,432(6) 3.1
Miro Knezevic 327,169(7) 4.5
Edward W. Large 72,232(6) 1.0
Richard J. McGuire, Jr. 188,187(8) 2.6
J. Jeffrey McNealey 52,572(6) *
Michael C. Salmon 44,333(9) *
All directors and executive officers as a group 1,640,051(10) 20.9
(10 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 89,417 shares that may be acquired by the exercise of
outstanding stock options.
(4) Includes 224,166 shares that may be acquired by the exercise of
outstanding options and warrants.
(5) Includes 28,832 shares that may be acquired by the exercise of
outstanding stock options.
(6) Includes 42,332 shares that may be acquired by the exercise of
outstanding stock options.
(7) Includes 161,667 shares that may be acquired by the exercise of
outstanding options and warrants.
(8) Includes 35,332 shares that may be acquired by exercise of outstanding
stock options.
(9) Includes 44,333 shares that may be acquired by the exercise of
outstanding stock options.
(10) Includes 746,911 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, 2000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Compensation(2,3)
Annual Compensation(1) ----------------- All Other
Name and --------------------------- Option Compen-
Principal Position Year Salary ($) Bonus ($)6 Awards (#) sation($)(8)
------------------ ---- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
RICHARD D. ELLISON 2000 $235,400(4) $56,600 66,667(5) $3,400
Chairman, President and 1999 244,000(4) 5,700 40,000 3,200
Chief Executive Officer 1998 336,300 - 100,000(4) -
MIRO KNEZEVIC 2000 118,400(4) 28,300 41,667(5) 2,400
Senior Vice President 1999 113,300(4) 2,900 15,000 3,200
1998 205,500 - 112,500(4) -
JOHN H. CLAUSSEN 2000 212,500(4) 28,300 21,667(5) 5,200
Senior Vice President 1999 192,800(4) 2,900 15,000 4,900
1998 198,300 25,000 25,000(4) 5,300
MICHAEL C. SALMON 2000 180,000(7) 73,600 17,333(5) 3,500
Senior Vice President 1999 - - - -
1998 - - - -
GLENN E. HARKNESS 2000 185,400(4) 45,400 11,333(5) 5,400
Senior Vice President of TRC 1999 173,600(4) 11,400 10,000 5,000
Environmental Corporation 1998 161,900 10,000 5,000(4) 5,400
</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) Options are granted at 100% of market price of the underlying Common
Stock on the date of grant. The Company has not made any restricted
stock awards and its long-term incentive awards to executive officers
consist of stock options and bonuses, as discussed below in Footnote 6.
(3) All options granted in fiscal 1999 and certain options granted in
fiscal 2000 have ten-year terms; one-third vest immediately upon grant
and the remainder vest equally on the first and second anniversaries of
grant.
(4) 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. Knezevic's grant of 112,500 options reflects a commitment of a cash
salary reduction of $112,500 in each of the next two years or an
aggregate salary reduction of $225,000. 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.
(5) Certain options granted in fiscal 2000 have ten-year terms and vest in
equal one-quarter increments in each of the four fiscal quarters
following the date of grant. These options were granted in exchange for
a reduction in cash compensation to grantees over the following year
with individuals receiving one option for every $3.75 in salary
reduction over such one-year period. As an example, Mr. Knezevic's
grant of 26,667 salary reduction options reflects a commitment of a
cash salary reduction of $100,000 over the next year. These options do
not terminate on a termination of employment except to the extent not
then vested. Vesting may accelerate in certain change of control
situations.
(6) In fiscal 1999, the Company adopted a five-year Key Person Group Bonus
Plan which provides for bonus payments to key persons based upon the
Company's earnings performance. The annual bonus pool and percentages
allocated to various management levels are keyed to earnings targets.
(7) Mr. Salmon became an executive officer of the Company at the beginning
of fiscal 2000.
(8) Amounts of all other compensation include contributions by the Company
under 401(k) retirement and savings plans.
-6-
<PAGE>
b) OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning individual grants
of options to purchase the Company's Common Stock during the 2000 fiscal year to
the named executive officers. The Company does not have a program to grant stock
appreciation rights.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------------------------------
Potential Realized Value
Number of at Assumed Annual Rates
Shares of Stock Price Appreciation
Underlying % of Total Options Exercise or for Option Term(2)
Options Granted in Base Price Expiration ---------------------------
Name Granted(#)(1) Fiscal Year ($/Sh) Date 5% 10%
---------------------------- ------------- ------------------- ------------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
RICHARD D. ELLISON 40,000 8.3 $ 6.250 10/21/09 $157,225 $398,425
Chairman, President and 26,667 5.5 10.875 6/16/10 182,384 462,179
Chief Executive Officer ------ ---- --------- ---------
66,667 13.8 339,609 860,604
------ ---- --------- ---------
MIRO KNEZEVIC 15,000 3.1 6.250 10/21/09 58,959 149,409
Senior Vice President 26,667 5.5 10.875 6/16/10 182,384 462,179
------ --- --------- ---------
41,667 8.6 241,343 611,588
------ --- --------- ---------
JOHN H. CLAUSSEN 15,000 3.1 6.250 10/21/09 58,959 149,409
Senior Vice President 6,667 1.4 10.875 6/16/10 45,598 115,550
------- --- ---------- ---------
21,667 4.5 104,557 264,959
------ --------- ---------
MICHAEL C. SALMON 12,000 2.5 6.250 10/21/09 47,168 119,528
Senior Vice President 5,333 1.1 10.875 6/16/10 36,474 92,428
------- --- --------- ----------
17,333 3.6 83,642 211,956
------ --- --------- ---------
GLENN E. HARKNESS 10,000 2.1 6.250 10/21/09 39,306 99,606
Senior Vice President of TRC 1,333 .3 10.875 6/16/10 9,117 23,102
Environmental Corporation ----- --- ---------- ----------
11,333 2.4 48,423 122,708
------ --- --------- ---------
</TABLE>
-----------------
(1) Options are granted at 100% of market price of the underlying Common
Stock on the date of grant. Grants shown represent normal grants
pursuant to the Stock Option Plan (top number as described in Footnote
3 on page 6) and option grants in exchange for a reduction in salary
(bottom number as described in Footnote 5 on page 6).
(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 2000
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 6/30/00 6/30/00 ($)(1)
Name On Exercise (#) Value Realized($) Exercisable/unexercisable Exercisable/unexercisable
------------------------ --------------- ----------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
RICHARD D. ELLISON - - 140,000 66,667 $966,667 $255,000
Chairman, President and
Chief Executive Officer
MIRO KNEZEVIC - - 127,500 41,667 887,500 106,042
Senior Vice President
JOHN H. CLAUSSEN - - 73,750 21,667 477,657 93,542
Senior Vice President
MICHAEL C. SALMON - - 32,667 15,666 232,419 62,539
Senior Vice President
GLENN E. HARKNESS - - 18,500 11,333 115,917 60,416
Senior Vice President
of TRC Environmental
Corporation
</TABLE>
--------------------
(1) Based upon the closing price of the Company's Common Stock on June 30,
2000 of $11.50.
d) EMPLOYMENT CONTRACTS AND TERMINATION/CHANGE-IN-CONTROL ARRANGEMENTS
Pursuant to the Company's acquisition of Environmental Solutions, Inc.
in March 1994, the Company entered into employment agreements with Richard D.
Ellison and Miro Knezevic which automatically renew for one-year terms unless
terminated. In fiscal 1999, the Company adopted a Termination Policy for Key
Persons which provides for termination benefits ranging from three to twelve
months of salary in the event of certain terminations of employment including
those pursuant to a change of control.
-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 Company's
business 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. In fiscal 1999, a five-year Key Person Group Bonus Plan was
adopted. The Plan provides a sliding bonus scale to keep rewards in line with
success with substantial awards to higher level executives, such as the
Chairman, being based on extraordinary earnings performance.
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. In fiscal 2000, Dr.
Ellison's compensation consisted of a base salary of $235,400, a bonus of
$56,600 and 66,667 stock options. In fiscal 1998, Dr. 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. Also, in fiscal 2000, Dr. Ellison elected to
receive options to purchase 26,667 shares of the Company's Common Stock in
exchange for a reduction in his cash salary compensation of $100,000 over the
next fiscal year.
SUBMITTED BY THE COMPENSATION COMMITTEE:
Edward W. Large
Edward G. Jepsen
J. Jeffrey McNealey
-9-
<PAGE>
STOCK PERFORMANCE INFORMATION
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG TRC, S&P 500 INDEX AND
INDEX OF PEER COMPANIES
The annual changes for the five-year and thirty-nine month periods
shown in the graphs on this and the following page are based upon the assumption
that $100 had been invested in the Company's Common Stock on June 30, 1995 (as
required by SEC rules) and April 2, 1997, respectively. The figures presented
assume that all dividends, if any, paid over the performance periods were
reinvested.
FIVE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
JUN-95 JUN-96 JUN-97 JUN-98 JUN-99 JUN-00
<S> <C> <C> <C> <C> <C> <C>
TRC $100.00 $ 78.33 $ 53.33 $ 60.00 $ 81.67 $153.33
S&P 500 INDEX 100.00 126.00 169.72 220.91 271.18 290.84
PEER GROUP 100.00 92.61 80.77 102.52 79.55 87.62
</TABLE>
The companies included in the peer group are EA Engineering, Science and
Technology, Inc., Ecology & Environment, Inc., GZA GeoEnvironmental
Technologies, Inc., Harding Lawson Associates Group, Inc., Roy F. Weston, Inc.
and Versar, Inc.
-10-
<PAGE>
COMPARISON OF THIRTY-NINE MONTH CUMULATIVE TOTAL RETURN AMONG TRC, S&P 500 INDEX
AND INDEX OF PEER COMPANIES
This graph shows the cumulative total return since April 2, 1997 when
Dr. Ellison became Chairman, President and Chief Executive Officer of the
Company compared to the same indices shown in the previous graph, illustrating
the relative performance of the Company during his tenure in that position.
THIRTY-NINE MONTH
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
APR-97 JUN-97 JUN-98 JUN-99 JUN-00
<S> <C> <C> <C> <C> <C>
TRC $100.00 $133.33 $150.00 $204.17 $383.33
S&P 500 INDEX 100.00 118.54 154.30 189.41 203.14
PEER GROUP 100.00 97.90 124.27 96.42 106.21
</TABLE>
Information concerning the peer group and the Standard & Poor's 500 Index was
supplied to the Company by Standard & Poor's Compustat, a division of The
McGraw-Hill Companies.
-11-
<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 was not deliverable
until the end of 1999 and was delivered in December 1999. Dr. 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 extension of the payment term on the remaining principal
balance of $7 million. Pursuant to the amendment, the outstanding balance would
be repaid in two equal installments of $3.5 million on July 1, 1998 and 1999.
Also, in connection with the amendment of the Note, the Company issued a
two-year (subsequently extended to a five-year) warrant to purchase 50,000
shares of the Company's Common Stock at an exercise price of $4.50. Interest on
the Note was payable quarterly at 5 3/4% with the excess accruing and payable at
final maturity. On July 1, 1999 the Company made the final principal and
interest payment on the Note totaling $3,823,515. Dr. Ellison's spouse,
brother-in-law and son-in-law were employed in the normal course of business by
TRC Environmental Solutions, Inc. during fiscal 2000 at annual salaries
(including bonus) of $80,685, $117,820 and $63,641, respectively.
RATIFICATION OF AMENDMENT TO THE STOCK OPTION PLAN
In August 1979, the Company's Board of Directors adopted a
non-qualified stock option plan, known as the TRC Companies, Inc. Stock Option
Plan (the "Stock Option Plan"), which has been subsequently amended from time to
time. The purpose of the Stock Option Plan is to permit the Company to attract
and retain able employees for itself and its subsidiaries. All options granted
under the Stock Option Plan are granted by the Company's full Board of Directors
or the Compensation Committee, consisting of three members of the Company's
Board of Directors who are not employees of the Company. As of June 30, 2000,
options for 1,334,988 shares of Common Stock at an average exercise price of
$6.03 per share were outstanding under the Stock Option Plan. In addition, on
August 15, 2000 options for an aggregate of 221,000 shares were granted subject
to shareholder ratification of this Amendment to the Plan.
All options under the Stock Option Plan must be granted at a price
equal to the fair market value of the Common Stock on the date the option is
granted, and all outstanding options are granted at a price equal to the closing
price of the Company's Common Stock on the date of grant. The amount of shares
covered by outstanding options and the price for such shares will be
appropriately adjusted in the event of certain changes in the Company's
capitalization, as, for example, in the case of stock dividends or stock splits.
Options may be granted for periods of up to ten years. The existing Stock Option
Plan covers 189 employees and directors who are deemed key personnel bearing
primary responsibility for the management, growth and protection of the
Company's business. Most options have been granted for a term of ten years which
vest one third upon grant and one third in each of the two years following
grant. Vesting may accelerate in certain change-of-control conditions.
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<PAGE>
Participants exercise options by tendering cash to the Company. In
addition, a person exercising an option must pay to the Company the amount of
money that is required to be withheld for income tax purposes. Recipients of
Plan options will not realize income upon receiving such options; however, all
option recipients will realize ordinary income equal to the difference between
the option price and the fair market value of the underlying Common Stock on the
date of exercise. Subject to compliance with applicable income tax withholding
requirements, the Company is entitled to a deduction in an amount equal to the
amount included in income by the employee.
The Company's Board of Directors has decided to amend the Stock Option
Plan to increase by 750,000 shares the number of shares of Common Stock for
which options may be granted under the Stock Option Plan. At June 30, 2000,
options for only 178,648 shares remain available for grant under the Stock
Option Plan, and the Board of Directors believes that the continued ability to
grant options under the Plan is critical to retaining and incentivizing key
employees. The Board of Directors has the authority under the Stock Option Plan
to increase the number of shares of Common Stock for which options may be
granted pursuant to the Stock Option Plan without shareholder approval. However,
the above described Amendment to the Stock Option Plan is being submitted for
ratification by the Company's shareholders in order to comply with listing
requirements of the New York Stock Exchange.
Under the rules of the New York Stock Exchange, the increase in shares
to be issued should be approved by a majority of votes cast on the proposal
provided that the total vote cast represents over 50% of all securities entitled
to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY
THE AMENDMENT TO THE STOCK OPTION PLAN TO INCREASE BY 750,000 THE SHARES OF
COMMON STOCK FOR WHICH OPTIONS MAY BE GRANTED UNDER THE STOCK OPTION PLAN.
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, 2001. PricewaterhouseCoopers
LLP has been the Company's independent accountants for fourteen 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.
2000 SHAREHOLDER NOMINATIONS AND PROPOSALS
Shareholders who wish to suggest nominees for election to the Board of
Directors at the 2001 Annual Meeting should write, on or before May 27, 2001, 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.
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<PAGE>
If any shareholder intends to present a proposal for consideration at
the 2001 Annual Meeting of Shareholders, such proposal must also be received by
the Secretary of the Company on or before May 27, 2001, 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.
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, Chief Financial Officer and Secretary
Dated at Windsor, Connecticut
September 18, 2000
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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 27, 2000 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 four (4) nominees for directors.
<TABLE>
<S> <C> <C>
FOR WITHHOLD Richard D. Ellison, Edward G. Jepsen,
/ / / / Edward W. Large 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 ratification of an amendment to the Company's Stock Option Plan to
increase by 750,000 shares the number of shares of Common Stock
available for grants.
<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
ITEM 3 - The appointment of PricewaterhouseCoopers LLP as independent
accountants for the Company for the fiscal year ending June 30, 2001.
<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
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 4 NOMINEES FOR DIRECTOR AND FOR
ITEMS 2 AND 3.
Dated ___________________________, 2000
_________________________________
_________________________________
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.
