<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-11(c) or Section 240.14a-12
Avalon Holdings Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
Notes:
<PAGE>
===============================================================================
[LOGO] AVALON HOLDINGS
CORPORATION
Notice of Annual Meeting
of Shareholders
April 29, 1999
and
Proxy Statement
Avalon Holdings Corporation . One American Way . Warren, Ohio 44484-5555
===============================================================================
<PAGE>
===============================================================================
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 1999
To the Shareholders of Avalon Holdings Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of Avalon
Holdings Corporation will be held at the Grand Pavilion, One American Way,
Warren, Ohio, on Thursday, April 29, 1999, at 10:00 A.M., local time, for the
following purposes:
1. To elect five Directors, two of whom will be Class A Directors elected by
the holders of Class A Common Stock, and three of whom will be Class B
Directors elected by the holders of Class B Common Stock, such Directors to
hold office until the next Annual Meeting of Shareholders and until their
successors are elected and qualified; and
2. To transact such other business as may properly come before the meeting and
any adjournment thereof;
all in accordance with the accompanying Proxy Statement.
The Board of Directors has fixed the close of business on Tuesday, March 2,
1999, as the record date for the determination of the shareholders entitled to
notice of and to vote at such meeting or any adjournment thereof. Only those
shareholders of record at the close of business on such date will be entitled to
vote at the meeting or any adjournment thereof.
Your prompt action in sending in your proxy will be greatly appreciated. An
envelope is provided for your use which requires no postage if mailed in the
United States. If you have more than one shareholder account, you are receiving
a proxy for each account. Please vote, date, sign and mail all proxies you
receive.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jeffrey M. Grinstein
JEFFREY M. GRINSTEIN
General Counsel and Secretary
Warren, Ohio
March 19, 1999
IMPORTANT:
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE RETURN ENVELOPE
FURNISHED FOR THAT PURPOSE, WHICH ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES, AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY
DO SO IN THE MANNER DESCRIBED IN THE ENCLOSED PROXY STATEMENT.
<PAGE>
===============================================================================
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 1999
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Avalon Holdings Corporation (the "Company") of proxies in
the form enclosed herewith to be voted at the Annual Meeting of Shareholders to
be held at the Grand Pavilion, One American Way, Warren, Ohio, on Thursday,
April 29, 1999, at 10:00 A.M., local time, and at any adjournment thereof (the
"Annual Meeting"), for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders. This Proxy Statement is being sent to each
holder of the issued and outstanding shares of Class A Common Stock, $.01 par
value, ("Class A Common Stock") and Class B Common Stock, $.01 par value,
("Class B Common Stock," and together with the Class A Common Stock, the "Common
Stock") of the Company entitled to vote at the meeting in order to furnish
information relating to the business to be transacted at the meeting. The
Company's Annual Report to Shareholders for the fiscal year ended December 31,
1998, including financial statements, is being mailed to shareholders, together
with this Proxy Statement and the accompanying form of proxy, beginning on or
about March 29, 1999.
Any shareholder giving a proxy will have the right to revoke it at any time
prior to the voting thereof by giving written notice to the Secretary of the
Company, by voting in person at the Annual Meeting, or by execution of a
subsequent proxy provided that such action is taken in sufficient time to permit
the necessary examination and tabulation of the subsequent proxy or revocation
before the vote is taken. Shares of Common Stock represented by the proxies in
the form enclosed, properly executed, will be voted in the manner designated, or
if no applicable instructions are indicated, in favor of the Directors named
therein. The persons named in the enclosed form of proxy are authorized to vote,
in their discretion, upon such other business as may properly come before the
meeting and any adjournment thereof. Only those shares represented at the Annual
Meeting in person or by proxy shall be counted for purposes of determining the
number of votes required for any proposals upon which shareholders of the
Company shall be called upon to vote. Abstentions and "broker non-votes" shall
not be counted as votes for or against any matter upon which shareholders of the
Company shall be called upon to vote. The Articles of Incorporation of the
Company do not permit cumulative voting in the election of Directors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on March 2, 1999, as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting. Only shareholders of record at the close of
business on that date will be entitled to vote at the meeting or any adjournment
thereof. At the Annual Meeting, the holders of Class A Common Stock will be
entitled, as a class, to elect two of the Company's Directors ("Class A
Directors") and the holders of Class B Common Stock will be entitled, as a
class, to elect three Directors ("Class B Directors," and together with the
Class A Directors are collectively referred to as the "Directors").
Except for the election of Directors and as otherwise required by the
provisions of the Company's Articles of Incorporation or by law, holders of the
Class A Common Stock and Class B Common Stock will vote or consent as a single
class on all matters with each share of Class A Common Stock having one vote per
share and each share of Class B Common Stock having ten votes per share. In the
event that the outstanding shares of Class B Common Stock constitute less than
50% of the total voting power of the
1
<PAGE>
issued and outstanding shares of Class A Common Stock and Class B Common Stock,
the holders of the Class A Common Stock and Class B Common Stock will vote as a
single class for the election of Directors. At the close of business on March 2,
1999, the Company had outstanding 3,185,240 shares of Class A Common Stock
entitling the holders thereof to 3,185,240 votes in the aggregate and 618,091
shares of Class B Common Stock entitling the holders thereof to 6,180,910 votes
in the aggregate.
Each share of Class B Common Stock is convertible at any time, at the option
of the shareholder, into one share of Class A Common Stock. Shares of Class B
Common Stock are also automatically converted into shares of Class A Common
Stock on the transfer of such shares to any person other than the Company,
another holder of Class B Common Stock or a "Permitted Transferee" as defined in
the Company's Articles of Incorporation. The Class A Common Stock is not
convertible.
The following table sets forth information with respect to beneficial
ownership of the Class A Common Stock and Class B Common Stock by each person
known to the Company to be the beneficial owner of more than five percent of
either class of Common Stock. This information is as of February 8, 1999, unless
noted that it is based upon Schedules 13-D or 13-G filed with the Securities and
Exchange Commission (the "Commission"), in which event such information is as of
December 31, 1998.
<TABLE>
<CAPTION>
Beneficially Owned as of February 8, 1999
----------------------------------------------------------------
Class A Common Stock Class B Common Stock Percent Percent
--------------------- --------------------- of all of Total
Number Percent Number Percent Common Voting
Name of Shares of Class of Shares of Class Stock Power
---- ---------- --------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ronald E. Klingle(1)(3) 2,317 *% 331,558 52.8% 8.8% 35.1%
Darrell D. Wilson(2)(3) 922 * 279,575 44.6% 7.4 29.6
Lourde John Constable (4)(5) 237,446 7.5 -- -- 6.2 2.5
5 Radnor Corporate Center
100 Matsonford Road, Suite 520
Radnor, PA 19087
Cardinal Capital Management,
L.L.C. (6)(7) 382,700 12.0 -- -- 10.1 4.0
One Fawcett Place
Greenwich, CT 06830
Anil C. Nalluri, M.D., Inc.
Profit Sharing Plan and Trust (5)(8) 167,023 5.3 -- -- 4.4 1.8
c/o Anil C. Nalluri, Inc.
5500 Market Street
Youngstown, OH 44512
</TABLE>
__________________________
* Less than one percent.
(1) Includes 14,296 shares of Class B Common Stock owned by Mr. Klingle's
spouse, the beneficial ownership of which is disclaimed. Includes 1,067
shares of Class A Common Stock held by Mr. Klingle in the Avalon Holdings
Corporation Participating Companies Profit Sharing Plan and Trust (including
397 shares held by Mr. Klingle's spouse, the beneficial ownership of which
Mr. Klingle disclaims). Mr. Klingle has sole voting power and sole
investment power over 1,920 shares of Class A Common Stock and 317,262
shares of Class B Common Stock.
(2) Includes 922 shares of Class A Common Stock held by Mr. Wilson in the Avalon
Holdings Corporation Participating Companies Profit Sharing Plan and Trust.
Mr. Wilson has sole voting power and sole investment power over all of the
shares listed.
2
<PAGE>
(3) Each named person is an employee, executive officer and director of the
Company. The address for Messrs. Klingle and Wilson is c/o Avalon Holdings
Corporation, One American Way, Warren, Ohio 44484-5555
(4) Based upon information contained in Schedule 13-G filed with the Commission
on February 16, 1999.
(5) Each named security holder has sole voting power and sole investment power
over all of the shares listed.
(6) Based upon information contained in Schedule 13-G filed with the Commission
on February 12, 1999.
(7) Cardinal Capital Management, L.L.C. has sole voting power over 190,000
shares and sole investment power over 382,700 shares.
(8) Based upon information contained in Schedule 13-D filed with the Commission
on January 28, 1999.
ELECTION OF DIRECTORS
It is intended that the proxies will be voted for the election of the five
nominees named below to hold office as Directors until the next succeeding
annual shareholders' meeting and until their respective successors are duly
elected and qualified. Specifically, the holders of Class A Common Stock are
entitled, as a class, to elect two Class A Directors and the holders of Class B
Common Stock are entitled, as a class, to elect three Class B Directors. It is
the intention of the persons named in the enclosed forms of proxy to vote such
proxies as specified and if no specification is made, to vote such proxies for
the election as Directors of the nominees for Class A Directors and Class B
Directors listed below. All such nominees have consented to serve if elected.
While management has no reason to believe that any of the nominees will not be
available to serve as a Director, if for any reason any of them should become
unavailable, the proxies will be voted for such substitute nominees as may be
designated by the Board of Directors. The two nominees for Class A Directors
receiving the greatest number of votes from the holders of shares of Class A
Common Stock eligible to be cast at the meeting will be elected Class A
Directors; and, the three nominees for Class B Directors receiving the greatest
number of votes from the holders of shares of Class B Common Stock eligible to
be cast at the meeting will be elected Class B Directors.
Set forth below is certain information about the nominees for Class A
Directors and Class B Directors:
<TABLE>
<CAPTION>
Director
Name Age Since Title Term
---- --- -------- ----- ----
<S> <C> <C> <C> <C>
Nominees for
Class A Directors:
Sanford B. Ferguson 52 1998 Director 1 year
Stephen L. Gordon 57 1998 Director 1 year
Nominees for
Class B Directors:
Ronald E. Klingle 51 1998 Chairman of the Board, Chief Executive 1 year
Officer and a Director
Darrell D. Wilson 47 1998 President, Chief Operating Officer and 1 year
a Director
Robert M. Arnoni 43 1998 Director 1 year
</TABLE>
3
<PAGE>
Set forth below is information concerning each nominee for election as a
director, including such nominee's principal occupation.
Sanford B. Ferguson has been a director of the Company since June 1998 and had
been a director of American Waste Services, Inc. since January 1991. He has been
a partner in the law firm of Kirkpatrick & Lockhart LLP since 1981. Mr. Ferguson
received his Bachelor of Arts degree from Dartmouth College, his Master of Arts
degree from Oxford University and his Doctor of Jurisprudence degree from Yale
University.
Stephen L. Gordon has been a director of the Company since June 1998 and had
been a director of American Waste Services, Inc. since April 1997. He has been a
partner in the law firm of Beveridge & Diamond, P.C. since 1982. Mr. Gordon
received his Bachelor of Arts degree from Rutgers University and his Doctor of
Jurisprudence degree from the University of Pennsylvania.
Ronald E. Klingle has been a director, Chairman of the Board and Chief
Executive Officer since June 1998. He had been Chairman, Chief Executive Officer
and a director of American Waste Services, Inc. since December 1988. Mr. Klingle
has approximately 28 years of environmental experience and received his Bachelor
of Engineering degree in Chemical Engineering from Youngstown State University.
Mr. Klingle is the spouse of Frances R. Klingle who is the Chief Administrative
Officer and Controller of the Company.
Darrell D. Wilson has been a director, President and Chief Operating Officer
since June 1998. He had been President, Chief Operating Officer and a director
of American Waste Services, Inc. since December 1988. Mr. Wilson has
approximately 25 years of environmental experience including service with
governmental regulators. He received his Bachelor of Science degree in
Environmental Sciences from Ferris State University.
Robert M. Arnoni has been a director of the Company since June 1998 and had
been a director of American Waste Services, Inc. since April 1997. He is
currently President of the Arnoni Development Company, Inc. From 1985 to August
1996 Mr. Arnoni was President and Chief Executive Officer of The Arnoni Group, a
management company for various, related solid waste collection, transportation
and disposal operations. Mr. Arnoni has over 20 years experience in the solid
waste industry.
4
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information as of February 8, 1999, with
respect to beneficial ownership of the Class A Common Stock and Class B Common
Stock by: (i) the Company's directors and certain named officers of the Company,
and (ii) all executive officers and directors, including nominees, as a group.
See "Voting Securities and Principal Holders Thereof."
<TABLE>
<CAPTION>
Beneficially Owned as of February 8, 1999(1)
---------------------------------------------------------------
Class A Common Stock Class B Common Stock Percent Percent
-------------------- --------------------- of all of Total
Name of Individual or Number Percent Number Percent Common Voting
Number of Persons in Group of Shares of Class of Shares of Class Stock Power
-------------------------- ---------- -------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ronald E. Klingle (2)(4)(5)(6) 2,317 * 331,558 52.8% 8.8% 35.1%
Darrell D. Wilson (2)(4)(6) 922 * 279,575 44.6 7.4 29.6
Timothy C. Coxson (3) 399 * -- -- * *
Jeffrey M. Grinstein (3) -- * 5,546 * * *
Sanford B. Ferguson -- * -- -- * *
Robert M. Arnoni 25,025 * -- -- * *
Stephen L. Gordon -- * -- -- * *
All executive officers, directors and
nominees for directors as a group
(8 persons) 28,663 * 616,679 98.3 17.0 65.6
</TABLE>
______________________________________________
* Less than one percent.
(1) One executive officer in "All executive officers and directors as a group"
has shared voting and investment power with his spouse. All other named
persons have sole voting and sole investment power over all listed shares.
(2) Each of these individuals is an employee, executive officer and director of
the Company.
(3) Each of these individuals is an employee and executive officer of the
Company.
(4) Includes 14,296 shares of Class B Common Stock owned by Mr. Klingle's
spouse, the beneficial ownership of which is disclaimed.
(5) In determining the number of shares held by executive officers and directors
as a group, shares beneficially owned by more than one executive officer or
director have been counted only once.
(6) Includes shares of Class A Common Stock held within employee accounts under
the Avalon Holdings Corporation Participating Companies Profit Sharing Plan
and Trust, as follows: Mr. Klingle, 1,067 shares (including 397 shares held
by Mr. Klingle's spouse, the beneficial ownership of which Mr. Klingle
disclaims); Mr. Wilson, 922 shares; and "All executive officers and
directors as a group," 1,989 shares. In determining the number of shares
held by executive officers and directors as a group, shares beneficially
owned by more than one executive officer or director have been counted only
once.
5
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has established four standing committees to assist in
the discharge of its responsibilities. These are the Executive, Audit, Option
Plan and Compensation Committees. The Board as a whole nominates directors for
election after receiving recommendations from the Executive Committee. During
1998, the Board of Directors had two meetings.
Each incumbent Director acted pursuant to all written consents without formal
meeting and attended at least 75% of the total number of meetings of (a) the
Board of Directors and (b) the committees of the Board on which the respective
Directors served during 1998.
The Executive Committee, subject to the restrictions of the Ohio General
Corporation Law, may exercise the authority of the Board of Directors in the
management of the business and affairs of the Company during intervals between
meetings of the Board. During 1998, the Executive Committee held two meetings.
The Executive Committee currently consists of three members, as follows: Messrs.
Klingle (Chairman), Ferguson and Wilson.
The Audit Committee is responsible for recommending the firm of independent
accountants to be engaged to audit the Company's financial statements, reviewing
the scope and results of the audit with the independent accountants, reviewing
with management and the independent accountants the Company's interim and year-
end operating results, considering the adequacy of the internal accounting
controls and audit procedures of the Company and reviewing the non-audit
services to be performed by the independent accountants. During 1998, the Audit
Committee held two meetings. The Audit Committee currently consists of three
members, as follows: Messrs. Gordon (Chairman), Arnoni and Ferguson.
The Compensation Committee is responsible for reviewing and establishing the
compensation arrangements for employees of the Company, including top
management, including salaries and bonuses. During 1998, the Compensation
Committee held two meetings. The Compensation Committee currently consists of
three members, as follows: Messrs. Klingle (Chairman), Wilson and Arnoni.
The Option Plan Committee determines grants of options to purchase shares
under the Company's 1998 Long-Term Incentive Plan (the "Plan") based on
recommendations made by the Company's Compensation Committee. During 1998, the
Option Plan Committee held no meetings. The Option Plan Committee currently
consists of three members, as follows: Messrs. Ferguson (Chairman), Arnoni and
Gordon.
Compensation Committee Interlocks and Insider Participation
Ronald E. Klingle (Chairman) and Darrell D. Wilson each served as a member of
the Compensation Committee and were executive officers of the Company during
1998. Furthermore, during 1998, Mr. Klingle and Mr. Wilson were executive
officers and/or directors of various directly or indirectly wholly owned
subsidiaries of the Company.
No members of the Compensation Committee serve on a Compensation Committee or
other board committees performing equivalent functions for any other entity
other than a directly or indirectly wholly owned subsidiary of the Company.
6
<PAGE>
Board Committee Reports on Executive Compensation
Compensation Committee Report. The Company maintains a cash compensation
program which is designed to motivate, retain and attract management and is
comprised of salaries and bonuses. Under the Company's program, the cash
compensation of executive officers of the Company is dependent, in part, on
discretionary bonuses which encourage a cooperative focus on the Company's
consolidated profitability and consider the past performance and potential of
the executive officer.
Ongoing executive officer compensation is determined subjectively, in that the
Chief Executive Officer provides recommendations to the Compensation Committee
for the proposed remuneration of the Company's officers based on his evaluation
of those individuals' performance against objectives jointly formulated by the
Chief Executive Officer, President and the executive officers, any change in
their responsibilities and their potential to contribute to the success of the
Company. No specific weights have been assigned to these factors by the
Committee.
The basis upon which the compensation of the Chief Executive Officer of the
Company for the last completed fiscal year was determined is generally the same
as for other executive officers. As Chairman of the Compensation Committee and
Chairman of the Board of Directors, the Chief Executive Officer in effect has
the ability to establish the level of his cash compensation.
Although the Company's executive compensation program is established by the
Compensation Committee of the Board of Directors, which is composed of the
below-named directors, two of whom are employees and executive officers of the
Company, from time to time the Compensation Committee and the Board of Directors
as a whole discuss, generally, the reasonableness of the amounts of compensation
received by the Chief Executive Officer and the other executive officers.
The Compensation Committee recommended a discretionary contribution to the
Company's 401(k) Profit Sharing Plan for 1998 in the amount of eight percent of
each participant's salary subject to Internal Revenue Code limitations.
Section 162(m) of the Internal Revenue Code addresses the nondeductibility for
federal income tax purposes of certain compensation in excess of $1 million paid
to an employee during the taxable year. As it is highly unlikely that any
executive officer or other employee of the Company will be awarded compensation
in excess of $1 million in the foreseeable future, the Compensation Committee
has not established a policy with respect to the nondeductibility of such
employee compensation.
The Compensation Committee believes that the Chief Executive Officer, as well
as the other executive officers of the Company, are dedicated to achieving
significant improvements in the Company's long-term financial performance and
that the compensation policies, plans and programs implemented by the Company
contribute to achieving this management focus.
COMPENSATION COMMITTEE
Ronald E. Klingle (Chairman)
Darrell D. Wilson
Robert M. Arnoni
7
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Compensation of Executive Officers
The following information sets forth the compensation of the Company's Chief
Executive Officer and the Company's three other executive officers other than
the Chief Executive Officer who were serving as executive officers as of
December 31, 1998 and received compensation in excess of $100,000; in each case
for services rendered in all capacities to the Company and its subsidiaries
during the fiscal year ended December 31, 1998. No other executive officer of
the Company received compensation in excess of $100,000. No individual no longer
serving as an executive officer as of December 31, 1998 received compensation in
excess of any of the named executive officers.
Summary Compensation Table (1)
<TABLE>
<CAPTION>
Annual Compensation (2) Long Term Compensation
------------------------- -------------------------------------------
Awards Payouts
------------------- -------
Other Annual Restricted Options/ All Other
Compen- Stock SARs LTIP Compen-
Name and Principal Position Year Salary Bonus sation Awards (Shares) Payouts sation(3)
- --------------------------- ---- ------- -------- ------- ------ ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald E. Klingle 1998 $70,000 $206,750 -- -- -- -- $6,400
Chairman of the Board
and Chief Executive Officer
Darrell D. Wilson 1998 70,000 206,750 -- -- -- -- 6,400
President and Chief
Operating Officer
Timothy C. Coxson 1998 55,000 81,875 -- -- -- -- 6,400
Chief Financial Officer
and Treasurer
Jeffrey M. Grinstein 1998 55,000 77,650 -- -- -- -- 6,400
General Counsel and Secretary
</TABLE>
__________________________________
(1) Does not include the value of certain non-cash compensation to the named
individuals which did not exceed the lesser of $50,000 or 10% of such
individuals' total annual salary and bonus shown in the table.
(2) Includes salary and/or bonuses deferred pursuant to Section 401(k) of the
Internal Revenue Code.
(3) Reflects contributions to be made on behalf of the named executive officer
pursuant to the provisions of the Company's 401(k) Plan.
Option Grants in Last Fiscal Year
There were no options granted during 1998.
Compensation of Directors
Each of the Company's directors who is not an officer or employee of the
Company is entitled to receive a retainer fee of $20,000 per year for Board of
Directors membership and a fee of $1,000 for attendance at each Board of
Directors meeting (or committee meeting held on a separate day). Officers and
employees who serve as directors are not compensated for their services as
directors. In accordance with the Avalon Holdings Corporation 1998 Long-Term
Incentive Plan, non-employee directors are
8
<PAGE>
entitled to receive grants of options to purchase shares of Class A Common Stock
as determined by the Board of Directors. All directors are reimbursed for
expenses incurred in attending Board of Directors meetings and committee
meetings. During 1998, the Company made no other payments to non-employee
directors with respect to participation on the Board of Directors, its
committees or with respect to special assignments.
Performance Graph
The following line graph compares the quarterly percentage change in the
Company's cumulative total shareholder return on its Class A Common Stock for
the second, third and fourth quarters of 1998 with the cumulative total return
of both the Amex Market Value Index and the Russell 2000 Index.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
June 18, June 30, September 30, December 31,
1998 1998 1998 1998
------- -------- ------------- ------------
<S> <C> <C> <C> <C>
Avalon Holdings Corporation Class A Common Stock $100.00 $113.00 $145.00 $120.00
Amex Market Value Index $100.00 $101.00 $ 87.00 $ 97.00
Russell 2000 Index $100.00 $100.00 $ 80.00 $ 93.00
</TABLE>
The Company's Class A Common Stock performance shown by the above graph is not
necessarily indicative of future stock performance.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Legal Services
Sanford B. Ferguson, a director of the Company, is a partner of the
Pittsburgh, Pennsylvania, office of the law firm of Kirkpatrick & Lockhart LLP,
which has rendered legal services to the Company during the last fiscal year.
Stephen L. Gordon, a director of the Company, is a partner in the law firm of
Beveridge & Diamond, P.C., which has rendered legal services to the Company
during the last fiscal year.
9
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The appointment of an independent public accountant is approved annually by
the Board of Directors based on the recommendation of the Audit Committee. No
independent public accountant has been selected for the current year as the
Audit Committee has not yet made its recommendation. KPMG LLP served as
independent public accountant of the Company. Representatives of KPMG LLP will
be present at the Annual Meeting of Shareholders and will be given an
opportunity to make a statement if they desire to do so and will respond to
appropriate questions from shareholders.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, its executive officers and persons holding more than 10 percent of a
class of the Company's equity securities to file with the Commission and the New
York Stock Exchange initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. These
officers, directors and greater than 10-percent shareholders are required by the
Commission's regulations to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ending December 31, 1998, all such
Section 16(a) filing requirements were complied with except that one report
disclosing a November 1998 purchase of 25,000 shares of the Company's Class A
Common Stock by Robert M. Arnoni was inadvertently not filed until February
1999.
ANNUAL REPORT TO SHAREHOLDERS
The Company has enclosed its Annual Report to Shareholders for the Company and
its subsidiaries for the year ended December 31, 1998, including financial
statements reflecting the financial position and results of operations of the
Company and its subsidiaries for that year. The Annual Report is not deemed to
have been filed with the Commission and such report is not incorporated in this
Proxy Statement nor is it part of this proxy solicitation.
SHAREHOLDER PROPOSALS
Any proposals of shareholders which are intended to be presented at the 1999
Annual Meeting of Shareholders must be received by the Secretary of the Company
at the principal executive offices of the Company not later than May 13, 1999.
Such proposals must meet the requirements of the Commission to be eligible for
inclusion in the Company's 2000 Proxy Materials.
FORM 10-K REPORT
THE COMPANY WILL FILE ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1998, WITH THE COMMISSION ON OR BEFORE MARCH 31, 1999. A COPY OF
THE REPORT, INCLUDING ANY FINANCIAL STATEMENTS AND SCHEDULES, AND A LIST
DESCRIBING ANY EXHIBITS NOT CONTAINED THEREIN, MAY BE OBTAINED WITHOUT CHARGE BY
ANY SHAREHOLDER. THE EXHIBITS ARE AVAILABLE UPON PAYMENT OF NOMINAL CHARGES
WHICH APPROXIMATE THE COMPANY'S COST OF REPRODUCTION OF THE EXHIBITS. WRITTEN
REQUESTS FOR COPIES OF THE REPORT OR EXHIBITS SHOULD BE DIRECTED TO THE
SECRETARY, AVALON HOLDINGS CORPORATION, ONE AMERICAN WAY, WARREN, OHIO 44484-
5555.
10
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any matters or business to be
presented for action at the meeting other than as set forth above. The enclosed
proxy does, however, confer discretionary authority upon the persons named
therein, or their substitutes, to take action with respect to any other matter
that may properly be brought before the meeting or any adjournment thereof.
SOLICITATION OF PROXIES
The enclosed form of proxy is solicited by the Board of Directors and the
proxies named therein have been designated by the Board of Directors. Shares
represented by the proxy will be voted at the meeting and, where a choice has
been specified, such shares will be voted in accordance with such specification.
If no specification is indicated, the proxies will be voted for the election of
the nominees named herein as directors and on other matters presented for a vote
in accordance with the judgment of the persons acting under the proxies. The
cost of preparing, printing, assembling and mailing will be paid by the Company.
In addition to the solicitation of proxies by mail, officers, directors, or
other employees of the Company, as yet undesignated, and without additional
remuneration, may solicit proxies personally or by other appropriate means, if
deemed advisable. The Company will request brokers, banks and other nominees to
send proxy material to, and obtain proxies from, the beneficial owners of Common
Stock held of record by them and it will reimburse such persons for their
expenses in so doing.
We request that you complete, sign, date and return your proxy promptly to
insure that your shares will be voted at the meeting. It is hoped that you will
attend the meeting. For your convenience, a self-addressed envelope, which
requires no additional postage if mailed in the United States, is enclosed.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jeffrey M. Grinstein
JEFFREY M. GRINSTEIN
General Counsel and Secretary
Warren, Ohio
March 19, 1999
11
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Avalon Holdings Corporation Participating Companies Profit Sharing Plan and
Trust (the "Plan")
VOTING INSTRUCTIONS ARE SOLICITED BY PNC BANK, THE PLAN'S TRUSTEE,
FOR THE ANNUAL MEETING OF SHAREHOLDERS, APRIL 29, 1999.
As a Plan Participant, I acknowledge receipt of the Notice of Annual Meeting
and Proxy Statement relating to the Annual Meeting of Shareholders of Avalon
Holdings Corporation (the "Company") to be held at the Grand Pavilion, located
at One American Way, Warren, Ohio, on Thursday, April 29, 1999, at 10:00 a.m.,
local time or at any adjournment thereof, and I hereby instruct PNC Bank, as
Trustee under the Plan (the "Trustee"), to vote the shares of Class A Common
Stock of the Company relating to my Plan account for which I have the right to
give voting directions under the Plan, at such Annual Meeting in the manner
set forth hereon. This card must be returned to Corporate Election Services
using the enclosed envelope, who will tabulate voting instructions for the
Trustee. If this card is not received by Corporate Election Services on or
before the close of business on April 22, 1999, the Trustee cannot ensure that
your voting instructions will be tabulated and counted. Your voting
instructions will be accorded confidential treatment.
Please sign, date and return this card promptly using the enclosed envelope
(To be signed on the reverse side)
<PAGE>
Avalon Holdings Corporation Participating Companies Profit Sharing Plan and
Trust (the "Plan")
VOTING INSTRUCTIONS ARE SOLICITED BY PNC BANK, THE PLAN'S TRUSTEE,
FOR THE ANNUAL MEETING OF SHAREHOLDERS, APRIL 29, 1999.
(Continued on the reverse side)
1. ELECTION OF DIRECTORS BY THE HOLDERS OF CLASS A COMMON STOCK.
The Board of Directors of the Company recommends a vote FOR the election of the
following nominees.
Nominees: Sanford B. Ferguson and Stephen L. Gordon
[_] FOR all nominees listed above, except vote withheld for the following
nominee(s):
----------------------------------
[_] WITHHOLD AUTHORITY to vote for all nominees listed above.
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ADJOURNMENTS THEREOF.
SIGNATURE DATE
-------------------- --------
This Voting Instruction Card should be signed exactly as name appears hereon.
Please sign, date and return this card promptly using the enclosed envelope.
This Voting Instruction Card, when properly executed, will be voted as directed
above. If such card is returned executed with no direction given or if not
returned at all, the Trustee shall vote in its absolute discretion.
