<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-4643
ROY F. WESTON, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1501990
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 WESTON WAY, WEST CHESTER, PENNSYLVANIA 19380-1499
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610)-701-3000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
---- ----
As of July 25, 1997, the registrant had outstanding 7,666,745 shares of
Series A common stock and 2,105,394 shares of common stock.
<PAGE> 2
Index Page
----- ----
Part I - Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets -
June 30, 1997 and December 31, 1996 1-2
Consolidated Statements of Operations -
Three Months Ended June 30, 1997 and 1996 3
Consolidated Statements of Operations -
Six Months Ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
Part II - Other Information 10-11
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE> 3
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 9,274 $ 9,878
Marketable securities 8,090 7,616
Accounts receivable, trade, net of allowance for
doubtful accounts of $1,630 in 1997 and $1,510 in 1996 53,223 65,480
Unbilled costs and estimated earnings on contracts 18,954 18,151
in process
Prepaid and refundable income taxes 4,064 2,719
Deferred income taxes 6,055 5,584
Other 3,485 2,438
-------- --------
Total current assets 103,145 111,866
-------- --------
PROPERTY AND EQUIPMENT
Land 215 215
Buildings and improvements 11,378 11,350
Furniture and equipment 42,308 55,763
Leasehold improvements 2,436 8,929
Construction in progress 11 17
-------- --------
Total property and equipment 56,348 76,274
Less accumulated depreciation and amortization 45,773 64,884
-------- --------
Property and equipment, net 10,575 11,390
-------- --------
OTHER ASSETS
Goodwill, net of accumulated amortization of $564 in
1997 and $4,014 in 1996 1,909 1,940
Deferred income taxes 3,247 3,168
Other 12,533 13,108
-------- --------
Total other assets 17,689 18,216
-------- --------
TOTAL ASSETS $131,409 $141,472
======== ========
</TABLE>
See notes to consolidated financial statements.
-1-
<PAGE> 4
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31,
1997 1996
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt $ 3,827 $ 2,159
Accounts payable and accrued expenses 12,949 11,869
Billings on contracts in process in excess of
costs and estimated earnings 9,556 12,233
Employee compensation, benefits and payroll taxes 9,663 13,326
Income taxes payable 138 220
Other 11,193 13,103
-------- --------
Total current liabilities 47,326 52,910
-------- --------
LONG TERM DEBT 15,901 18,922
-------- --------
OTHER LIABILITIES 6,683 3,550
-------- --------
CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $.10 par value, 10,500,000 shares
authorized; 3,186,669 shares issued in 1997; 3,192,909
shares issued in 1996 319 319
Series A common stock, $.10 par value, 20,500,000 shares
authorized; 8,459,550 shares issued in 1997; 8,319,352
shares issued in 1996 846 832
Unrealized gain on investments 686 541
Additional paid-in capital 55,462 55,130
Retained earnings 9,276 14,274
-------- --------
66,589 71,096
Less treasury stock at cost, 1,081,275 common shares in
1997 and 1996; 792,805 Series A common shares in 1997
and 769,805 Series A common shares in 1996 5,090 5,006
-------- --------
Total stockholders' equity 61,499 66,090
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $131,409 $141,472
======== ========
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 5
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------
1997 1996
(Thousands of Dollars)
<S> <C> <C>
Gross revenues $ 55,777 $ 66,186
Direct project costs 21,686 19,936
----------- -----------
Net revenues 34,091 46,250
----------- -----------
Expenses:
Direct salaries and other operating costs 34,900 40,509
General and administrative expenses 7,888 6,714
Restructuring credit (597) --
----------- -----------
42,191 47,223
----------- -----------
Loss from operations (8,100) (973)
----------- -----------
Other income (expense):
Investment income 322 403
Interest expense (395) (519)
Other (19) 42
----------- -----------
(92) (74)
----------- -----------
Loss before income taxes (8,192) (1,047)
Benefit for income taxes (2,798) (377)
----------- -----------
Net loss $ (5,394) $ (670)
=========== ===========
Net loss per share $ (.56) $ (.07)
=========== ===========
Weighted average shares outstanding 9,644,466 9,511,548
=========== ===========
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 6
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1997 1996
(Thousands of Dollars)
<S> <C> <C>
Gross revenues $ 117,257 $ 133,772
Direct project costs 43,548 40,433
----------- -----------
Net revenues 73,709 93,339
----------- -----------
Expenses:
Direct salaries and other operating costs 69,431 80,282
General and administrative expenses 13,629 14,049
Restructuring credit (1,668) --
----------- -----------
81,392 94,331
----------- -----------
Loss from operations (7,683) (992)
----------- -----------
Other income (expense):
Investment income 869 903
Interest expense (825) (1,044)
Other 66 113
----------- -----------
110 (28)
----------- -----------
Loss before income taxes (7,573) (1,020)
Benefit for income taxes (2,575) (367)
----------- -----------
Net loss $ (4,998) $ (653)
=========== ===========
Net loss per share $ (.52) $ (.07)
=========== ===========
Weighted average shares outstanding 9,651,794 9,541,188
=========== ===========
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 7
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1997 1996
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,998) $ (653)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,754 4,383
Provision for losses on accounts receivable 275 124
Other 780 408
Change in assets and liabilities:
Accounts receivable, trade 11,982 3,339
Unbilled costs and estimated earnings on contracts in process (803) (475)
Other current assets (1,047) (749)
Accounts payable and accrued expenses 1,080 (226)
Billings on contracts in excess of costs and estimated earnings (2,677) 2,050
Employee compensation, benefits and payroll taxes (3,663) 1,005
Income taxes (1,427) 729
Deferred income taxes (625) (392)
Other current liabilities (2,621) (992)
Other assets and liabilities 3,392 (910)
-------- --------
Net cash provided by operating activities 2,402 7,641
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments 9,403 5,823
Payments for purchase of investments (9,940) (15,402)
Purchase of property and equipment, net (1,296) (2,249)
Investments in other assets (71) (271)
-------- --------
Net cash used for investing activities (1,904) (12,099)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under long-term debt (1,353) (1,132)
Proceeds from issuance of Series A common stock 335 527
Purchase of Series A common treasury stock (84) (706)
-------- --------
Net cash used for financing activities (1,102) (1,311)
-------- --------
Net decrease in cash and cash equivalents (604) (5,769)
Cash and cash equivalents:
Beginning of period 9,878 12,980
-------- --------
End of period $ 9,274 $ 7,211
======== ========
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 8
ROY F. WESTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements reflect all adjustments which
are, in the opinion of management, necessary for a fair presentation of the
financial position, results of operations and cash flows for the interim
periods. The unaudited consolidated financial statements do not include all of
the information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
and should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's 1996 Annual Report to Shareholders which
is incorporated by reference in its Form 10-K filed with the Securities and
Exchange Commission. Results for the three months and six months ended June 30,
1997 are not necessarily indicative of results for the full year 1997.
NOTE 2 - LINE OF CREDIT AGREEMENT
On March 31, 1997 the Company agreed to an amendment to its uncollateralized
credit facility which extended the facility through March 27, 1998, reduced the
maximum amount of the facility to $25,000,000 and increased the amount available
for cash borrowings to $10,000,000. The Company is subject to a 3/8% annual
charge on the unused portion of the facility and must maintain covenants
including minimum net worth, adjusted leverage ratio, liquidity ratio and
minimum cash, cash equivalents and marketable securities. As a result of the net
loss incurred in the three months ended June 30, 1997, the Company is out of
compliance with its net worth covenant. The Company is discussing waiver of the
covenant violation with its banks. At June 30, 1997, the Company had no cash
borrowings under the credit facility.
NOTE 3 - RESTRUCTURING CREDIT
During the six months ended June 30, 1997, the Company completed the sale of net
assets of its Weston Interactive, Inc. subsidiary and the sale of net assets of
its Environmental Metrics Division. The proceeds from these transactions
exceeded amounts anticipated in recording the restructuring charge in the three
months ended September 30, 1996. The excess is included as restructuring credit
in the accompanying consolidated statements of operations for the three months
($597,000) and six months ($1,668,000) ended June 30, 1997.
NOTE 4 - CONSOLIDATED STATEMENTS OF CASH FLOW
Net cash refunds for income taxes were $563,000 and $709,000 in the first six
months of 1997 and 1996, respectively. Cash payments for interest were $748,000
and $967,000 in the six months ended June 30, 1997 and 1996, respectively.
No capital lease obligations were incurred in the six months ended June 30, 1997
or 1996.
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<PAGE> 9
NOTE 5 - NEW ACCOUNTING STANDARD - EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share," which will replace
the current rules for earnings per share computations, presentation and
disclosure. Under the new standard, basic earnings per share excludes dilution
and is computed by dividing income available to common shareowners by the
weighted average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock. Statement No. 128 requires a dual presentation of basic and
diluted earnings per share on the face of the statement of operations.
The Company will be required to adopt Statement No. 128 in the fourth quarter of
1997 and, as required by the standard, will restate all prior period earnings
per share data. The new earnings per share amounts are not expected to be
materially different from those computed under the present accounting standard.
-7-
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following information should be read in conjunction with the unaudited
interim consolidated financial statements and the notes thereto included in this
Quarterly Report and the audited financial statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 1996.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Net loss for the three months ended June 30, 1997 increased to $5,394,000 or
$.56 per share, compared to $670,000 or $.07 per share, for the three months
ended June 30, 1996. Net loss for the six months ended June 30, 1997 was
$4,998,000 or $.52 per share, compared to a net loss of $653,000 or $.07 per
share, for the six months ended June 30, 1996.
Gross revenues decreased 16% to $55,777,000 for the three months ended June 30,
1997, and 12% to $117,257,000 for the six months ended June 30, 1997 compared to
the 1996 periods. Net revenues decreased 26% to $34,091,000 for the three months
ended June 30, 1997, and 21% to $73,709,000 for the six months ended June 30,
1997, compared to the 1996 periods. Non-dedicated-site federal government
projects accounted for 72% and 57% of the declines in net revenues in the three
months and six months ended June 30, 1997, respectively. Significantly lower
revenues from a large federal incineration project, active in the first six
months of 1996, contributed to the decrease. Net revenues of the Company's
Environmental Metrics Division were $2,600,000 and $3,000,000 lower in the three
months and six months ended June 30, 1997, respectively. In addition, the
Company recorded revenue writedowns for several construction contract overruns,
aggregating $1,900,000 in the three months ended June 30, 1997.
The Company had losses from operations of $8,100,000 and $7,683,000 in the three
months and six months ended June 30, 1997, respectively, compared to losses from
operations of $973,000 and $992,000 in the three months and six months ended
June 30, 1996, respectively. The increased losses in the 1997 periods were
principally due to lower net revenues. The 1997 periods include charges of
$2,500,000 for reductions in the Company's work force and changes to its Board
of Directors and senior management. The six months ended June 30, 1996 included
a provision of $775,000 relating to severance benefits for the Company's former
Chairman of the Board.
Investment income decreased $81,000, or 20%, to $322,000 in the three months
ended June 30, 1997 due primarily to lower average investments. Interest expense
declined $124,000, or 24%, and $219,000, or 21% in the three months and six
months ended June 30, 1997, due to lower borrowings.
MATERIAL CHANGES IN FINANCIAL CONDITION
Cash and cash equivalents decreased $604,000 in the first six months of 1997 to
$9,274,000 from $9,878,000 at December 31, 1996. Marketable securities increased
$474,000 in the first six months of 1997 to $8,090,000 from $7,616,000 at
December 31, 1996.
-8-
<PAGE> 11
Operating activities provided cash of $2,402,000 for the first six months of
1997, compared to $7,641,000 in the comparable 1996 period. Net cash investments
in property and equipment and other assets were $1,367,000 in the first six
months of 1997, compared to $2,520,000 in the comparable 1996 period. The
Company used cash of $1,102,000 in financing activities in the first six months
of 1997, compared to $1,311,000 in the comparable 1996 period.
FORWARD LOOKING STATEMENTS
From time to time, the Company may publish forward looking statements relating
to such matters as anticipated financial performance, business prospects,
technological developments and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward looking
statements. In order to comply with the terms of the safe harbor, the Company
notes that a number of factors could cause the Company's actual results and
experience to differ materially from anticipated results or other expectations
expressed in the Company's forward looking statements. Risks and uncertainties
that may affect the operations, performance, development and results of the
Company's business include, but are not limited to, the following:
- - The highly competitive marketplace for the Company's services.
- - Changes in and levels of enforcement of federal, state and local
environmental legislation and regulations.
- - The Company's ability to obtain new contracts from existing as well as new
clients.
- - The Company's ability to execute new projects and those currently in
backlog within reasonable cost estimates.
- - Funding appropriation, funding delay and the issuance of work orders on
federal projects.
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<PAGE> 12
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits are numbered in accordance with the Exhibit
Table of Item 601 of Regulation S-K.
Exhibit No. Description
10.2 Severance Agreement between
M. Christine Murphy and the Company
dated May 12, 1997
10.3 Severance Agreement between Peter J.
Marks and the Company dated May
22, 1997
10.4 Modification to December 3, 1996
Severance Agreement between William
J. Marrazzo and the Company effective
May 1, 1997
10.5 Stay Bonus Agreement between
William J. Marrazzo and the Company
dated May 1, 1997
10.6 Letter Agreement between William J.
Marrazzo and the Company dated May
22, 1997
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<PAGE> 13
10.7 Consulting Services Agreement
between GlobeQuest International Ltd.
and the Company for the services of
Tom Harvey, dated May 23, 1997
10.8 Consulting Services Agreement
between Resource Alternatives, Inc.
and the Company for the services of
Domenic J. Monetta, dated June 1,
1997
10.9 Consulting Services Agreement
between William Robertson and the
Company dated May 23, 1997
11 Statements of Computation
of Net Income Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K
On May 27, 1997 the Company filed a Form 8-K under Item
5, Other Events, which incorporated by reference the
Company's News Releases dated May 22 and 23, 1997
concerning the resignation of certain officers of the
Company; the anticipation of a net loss in the second
quarter; and the election of a new Board of Directors
and certain officers.
On June 6, 1997 the Company filed a Form 8-K under Item
5, Other Events, which incorporated by reference the
Company's News Release dated May 27, 1997 concerning the
completion of the sale of the assets of its
Environmental Metrics Division to Recra
Environmental, Inc.
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<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROY F. WESTON, INC.
(Registrant)
Date: August 13, 1997 By: /s/ William Robertson
----------------------------
William Robertson
President and Chief Executive
Officer
(Duly Authorized Officer)
Date: August 13, 1997 By: /s/ William G. Mecaughey
----------------------------
William G. Mecaughey
Vice President and Acting
Chief Financial Officer
(Chief Accounting Officer)
<PAGE> 1
Exhibit 10.2
ROY F. WESTON, INC.
SEVERANCE AGREEMENT
Severance Agreement ("Agreement") made May 12, 1997 between Roy F.
Weston, Inc., a Pennsylvania corporation, ("Weston") and M. Christine Murphy
("Murphy").
BACKGROUND
Murphy is currently Weston's Executive Vice President and Chief
Financial Officer.
Weston and Murphy have a written agreement with respect to Murphy's
employment ("Full Time Employment Agreement") dated as of September 4, 1990,
which is attached hereto as Exhibit A.
Weston and Murphy have entered into (i) seven separate Non-Qualified Stock
Option Agreements covering grants made on each of June 10, 1991, March 31, 1992,
February 8, 1993, February 14, 1994, February 13, 1995, February 26, 1996 and
February 18, 1997, respectively, attached hereto as Exhibits B-1 through B-7,
and (ii) a Supplemental Retirement Agreement dated as of December 31, 1990,
attached hereto as Exhibit C. The agreements referred to in the preceding
sentence are collectively referred to as the "Benefit Agreements".
Weston and Murphy agree that it would serve the best interests of each to
provide Murphy with certain additional benefits in consideration of Murphy's
agreement to terminate her employment with Weston.
<PAGE> 2
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Resignation Date. Effective May 9, 1997, Murphy has
resigned from her employment and from her position as Weston's Executive Vice
President and Chief Financial Officer.
2. Severance Benefits and Payment Conditions. In consideration of
Murphy's resignation and Murphy's agreements and undertakings under Section 3
hereof, Murphy shall receive the severance benefits set forth herein provided
Murphy satisfies each of the requirements of Section 3 hereof. Murphy's
entitlements under the Benefit Agreements and any employee benefit plan,
including Weston's vacation plan, applicable to a class of Weston employees
which includes Murphy shall be as provided for therein without regard to this
Agreement, except as expressly provided under Section 2 or 3 hereof. The
severance benefits under this Agreement are as set forth below:
(a) Salary Continuation. Weston shall pay Murphy at the rate
of $15,340 per month for seven months, effective as of May 10, 1997 and ending
December 9, 1997. Weston shall make payments to Murphy on its regular payroll
dates for payment of salary earned during such seven-month period. If Murphy
dies before the last payment, the remaining payments shall be paid to her
estate. The salary continuation payments hereunder shall be
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<PAGE> 3
in lieu of any benefit or amount otherwise payable on account of employment
termination under any Weston severance plan or program or the Full Time
Employment Agreement.
(b) Automobile. Weston shall permit Murphy to use the
automobile which it currently has under lease for her use until November 9,
1997.
(c) Salary-At-Risk. Weston shall pay Murphy the amount she
earned under its Salary-At-Risk Program for the calendar quarter ended June 30,
1996. Weston shall make the payment on or about the date Weston makes
Salary-At-Risk payments to participating employees.
(d) Supplemental Retirement Agreement. The annual amount
payable under the Supplemental Retirement Agreement commencing at age 65 shall
be $12,000. For purposes of the Supplemental Retirement Agreement, Murphy's
termination shall be treated as an involuntary termination which is not for
cause.
(e) Medical Benefits. Weston shall provide medical, dental and
prescription plan benefits for Murphy on the same basis as in effect for active
employees until November 9, 1997 or until she sooner elects that such coverages
cease. After such period, Murphy may elect continuation coverage completely at
her own expense as provided by law.
(g) Outplacement. Weston shall provide Murphy
outplacement services at Weston's expense, not to exceed $25,000.
3. Murphy's Agreements and Undertakings.
3
<PAGE> 4
(a) Cooperation Requirement. Murphy shall provide Weston such
information pertaining to her employment with Weston as she may have and assist
Weston to transfer her duties to such successor or successors as Weston may
designate. Weston shall reimburse Murphy for all reasonable expenses she incurs
in fulfilling her obligations under the preceding sentence.
(b) Non-Competition Requirement. Weston's obligation to make
payments or provide benefits under Section 2, including all payments under the
Supplemental Retirement Agreement, shall terminate and Weston shall have all of
the rights and remedies provided for in Section 10 of the Full-Time Employment
Agreement as well as restitution of payments made or the cost of benefits
provided hereunder if Murphy, without Weston's prior written approval, either
directly or indirectly, for her own account or for the account of another person
or entity, for a period of two years from and after May 9, 1997,
(i) acquires or holds a significant financial
interest in any competitor of Weston or any "Weston affiliate" (as defined
below);
(ii) competes with Weston or any "Weston affiliate"
in soliciting any business from any person or entity that was at any time during
the two years immediately preceding May 9, 1997 a client of Weston or any
"Weston affiliate" or potential client as to whom Weston or any "Weston
affiliate" had rendered a significant volume of service or had a significant
4
<PAGE> 5
amount of direct business contact for the purpose of soliciting future business;
or
(iii) renders services to any competitor of Weston or
any "Weston affiliate", if such services are similar in nature (in whole or in
part) to services Murphy rendered to Weston or any "Weston affiliate" at any
time during the two years immediately preceding May 9, 1997.
For purposes of this Section, the term "Weston affiliate" shall mean any
business in which Weston owns directly or indirectly at least 50% of the equity
interests or 50% of the profit interests. This Section supersedes the
non-competition covenant of Section 8 of the Full-Time Employment Agreement,
except as provided under Section 10 thereof. This Section replaces the
non-competition provision of Section 13 of Supplemental Retirement Agreement
until May 8, 1999, at which time such provisions become effective to and
including May 8, 2000 with respect to benefits provided under the Supplemental
Retirement Agreement.
(c) Release. Murphy shall deliver a release to Weston in
the form attached hereto as Exhibit D.
4. Acceleration Election. Weston may, at its option, at any
time or from time to time, in its absolute and sole discretion, accelerate
the time and the manner of making any one or more payments required by this
Agreement.
5. Non-Alienation. None of the rights or payments contemplated under
this Agreement may be sold, given away,
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<PAGE> 6
assigned, transferred, pledged, mortgaged, alienated, hypothecated or in any way
encumbered or disposed of by Murphy, or any executor, administrator, heir,
legatee, distributee, relative or any other person or entity, whether or not in
being, claiming under Murphy by virtue of this Agreement, and none of the rights
or benefits contemplated by this Agreement shall be subject to execution,
attachment or similar process. Any sale, gift, assignment, transfer, pledge,
mortgage, alienation, hypothecation or encumbrance, or other disposition of this
Agreement or of such rights or benefits contrary to the foregoing provisions, or
the levy or any attachment or similar process thereon, shall be null and void
and without effect.
6. Taxes. Weston shall withhold from payments to Murphy and remit to
the appropriate government agencies such payroll taxes and income withholding as
Weston determines is or may be necessary under applicable law with respect to
amounts paid under this Agreement.
7. General Obligation. The rights and benefits of Murphy hereunder
shall be solely those of an unsecured creditor of Weston.
8. Waiver of Breach. Weston's failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition, nor shall Weston's waiver
or relinquishment of any right or power hereunder at any one or more times be
deemed a
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<PAGE> 7
waiver or relinquishment of such right or power at any other time or times.
9. Modification. This Agreement shall not be modified or amended
except by written instrument duly executed by Weston and Murphy.
10. Severability. If any clause, sentence, paragraph, section, or
part of this Agreement shall be held by any court of competent jurisdiction to
be invalid, such judgment shall not affect, impair or invalidate any of the
other parts hereof.
11. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either hand-delivered to the
addressee or sent by registered or certified mail, if to Murphy, to Murphy's
address as shown on Weston's books, and if to Weston, addressed to Weston's
Chief Executive Officer at Weston's principal business office located at One
Weston Way, West Chester, Pennsylvania 19380-1499 or such other address as
Weston or Murphy may designate in writing.
12. Arbitration. Any controversy or claim arising out of or relating
to this Agreement or the breach thereof shall be settled by arbitration in the
City of Philadelphia in accordance with the rules of the American Arbitration
Association then in effect. The decision of the arbitrator shall be final and
binding upon the parties, and judgment upon the decision rendered in such
arbitration may be entered in any court having jurisdiction.
7
<PAGE> 8
13. Binding Agreement. This Agreement shall inure to the benefit of
and be binding upon Weston and its successors and upon Murphy, her heirs and
legal representatives. This Agreement shall not be assignable by Murphy and
shall be assignable by Weston only to a person or entity which may become a
successor in interest to Weston and which is bound hereby.
14. Captions. The captions of the various provisions shall not
be deemed a part of this Agreement and shall not be construed in any way to
limit the contents hereof but are inserted herein only for reference and for
convenience of the parties.
15. Governing State Law. This Agreement may be executed at
different times in different places, but all questions concerning the
construction or validity hereof, or relating to performance hereunder, shall be
determined in accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, Weston has caused this Agreement to be executed by its
duly authorized officers, and Murphy has hereunto set her hand and seal as of
the day and year first above written.
ATTEST: ROY F. WESTON, INC.
s/Arnold P. Borish By: s/William J. Marrazzo
- ------------------------------ -----------------------------------
Secretary
(SEAL) s/M. Christine Murphy
----------------------------------
M. Christine Murphy
8
<PAGE> 1
Exhibit 10.3
ROY F. WESTON, INC.
SEVERANCE AGREEMENT
Severance Agreement ("Agreement") made May 22, 1997 between Roy F.
Weston, Inc., a Pennsylvania corporation, ("Weston") and Peter J. Marks
("Marks").
BACKGROUND
Marks is currently Weston's Executive Vice President and Chief Operating
Officer.
Weston and Marks have entered into (i) seven separate Non-Qualified Stock
Option Agreements covering grants made on each of May 20, 1990, March 31, 1992,
February 8, 1993, February 14, 1994, February 13, 1995, February 26, 1996 and
February 18, 1997, respectively, attached hereto as Exhibits A-1 through A-7,
and (ii) a Supplemental Retirement Agreement dated as of December 31, 1989,
attached hereto as Exhibit B. The agreements referred to in the preceding
sentence are collectively referred to as the "Benefit Agreements".
As a result of the change in the composition of Weston's Board of
Directors, Weston and Marks agree that it would serve the best interests of each
to provide Marks with certain additional benefits in consideration of Marks'
agreement to terminate his employment with Weston.
<PAGE> 2
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Resignation Date. Effective May 30, 1997, Marks shall
resign from his employment with Weston and from his position as Weston's
Executive Vice President and Chief Operating Officer.
2. Severance Benefits and Payment Conditions. In consideration of
Marks' resignation, Marks shall receive the severance benefits set forth herein
provided Marks satisfies each of his agreements and undertakings under Sections
3 and 4 hereof. Marks' entitlements under the Benefit Agreements and any
employee benefit plan, including Weston's vacation plan, applicable to a class
of Weston employees which includes Marks shall be as provided for therein
without regard to this Agreement, except as expressly provided under Section 2
or 3 hereof. The severance benefits under this Agreement are as set forth below:
(a) Salary Continuation. Weston shall pay Marks at the rate of
$17,081 per month for sixteen months, effective as of June 1, 1997 and ending
September 30, 1998. Weston shall make installment payments to Marks on its
regular payroll dates during such sixteen-month period. If Marks dies before the
last payment, the remaining payments shall be paid to his estate. The salary
continuation payments hereunder shall be in lieu of any benefit or amount
otherwise payable on account of employment termination under any Weston
severance plan or program or any employment agreement between Weston and Marks.
(b) Automobile. Weston shall permit Marks to use the
automobile which it currently has under lease for his use and shall pay expenses
associated therewith that it currently pays, until November 30, 1997.
2
<PAGE> 3
(c) Salary-At-Risk. Weston shall pay Marks the amount he
earned under its Salary-At-Risk Program for the calendar quarters ended March
31, 1997 and June 30, 1997, if any. Weston shall make the payment on or about
the date Weston makes Salary-At-Risk payments to participating employees.
(d) Supplemental Retirement Agreement. The annual amount
payable under the Supplemental Retirement Agreement commencing June 1, 1997
shall be $16,000, payable in monthly installments for 15 years. For purposes of
the Supplemental Retirement Agreement, Marks' termination shall be treated as an
involuntary termination which is not for cause.
(e) Medical Benefits. Weston shall provide medical, dental and
prescription plan benefits for Marks on the same basis as in effect for active
employees until September 30, 1998 or until he sooner elects that such coverages
cease. After such period, Marks may elect continuation coverage completely at
his own expense as provided by law.
(g) Outplacement. Weston shall provide Marks $20,000 for
outplacement services, as designated in writing by Marks, and if no such
designation has been furnished by Marks by June 30, 1997, Weston shall pay the
sum of $20,000 to Marks.
3. Marks' Agreements and Undertakings.
(a) Cooperation Requirement. During the severance period (June
1, 1997 through September 30, 1998), at Weston's reasonable request, Marks shall
provide Weston such information pertaining to his employment with Weston as he
may have and assist Weston to transfer his duties to such successor or
successors as Weston may designate. Weston shall reimburse Marks for all
reasonable expenses he incurs in fulfilling his obligations under the preceding
sentence.
(b) Non-Competition Requirement. Weston's obligation to
make payments or provide benefits under Section 2, including all payments
3
<PAGE> 4
under the Supplemental Retirement Agreement, shall terminate and Weston shall
have all of the rights and remedies provided for under subsection 3(c) as well
as restitution of payments made or the cost of benefits provided hereunder if
Marks, without Weston's prior written approval, either directly or indirectly,
for his own account or for the account of another person or entity, during the
sixteen-month severance period (June 1, 1997 through September 30, 1998)
(i) acquires or holds a 5% equity or profit interest
in any competitor of Weston or any business in which Weston owns directly or
indirectly at least 50% of the equity interests or 50% of the profit interests;
(ii) solicits, recruits, hires, or otherwise induces
any other Weston employee to leave the employment of Weston or induces such
Weston employee to become an employee or otherwise become associated with any
company or business other than Weston;
(iii) discloses, divulges, furnishes or otherwise
makes available any "Trade Secrets" or "Documents" of Weston to any third party
except as Weston authorizes. Marks acknowledges that Weston's business,
services, and technologies are highly specialized, that the identity and
particular needs of Weston's customers and suppliers are not generally known,
and that the documents and information regarding Weston's customers, suppliers,
services, methods of operation, sales, pricing, and costs are highly
confidential and constitute trade secrets ("Trade Secrets"). Further, Marks
agrees that all memoranda, notes, correspondence, records, articles,
publications, studies, drawings, specifications, reports, computer programs in
any format, project management systems, proposals, photographs, films, tapes,
graphic matter, and other related documents ("Documents") which are made,
compiled, authored or co-authored by, or distributed or made available to Marks
while employed by Weston shall remain the sole and exclusive property of
4
<PAGE> 5
Weston. Marks agrees that he does not have any proprietary interest in the
Documents and shall deliver the same to Weston upon termination of his
employment.
(iv) solicits the trade or patronage of any Weston
clients or prospective clients to whom there are pending proposals regardless of
the location of such clients or prospective clients with respect to any
technologies, services, products, Trade Secrets, or other matters in which
Weston is active. Such restrictions shall only apply to clients that Marks had
direct or indirect contact with while employed at Weston or to technologies,
services, products or Trade Secrets that Marks was involved with or had access
to while employed at Weston.
(c) Injunctive Relief. Marks acknowledges the reasonableness
of each of the conditions and restrictions of this Section 3, including, without
limitation, the duration of time for which they apply, and that Weston will
suffer irreparable injury, not readily susceptible to valuation in monetary
damages, if Marks breaches any obligations under this Section. Accordingly,
Marks agrees that Weston will be entitled to injunctive relief against any
breach or prospective breach by Marks. Marks hereby submits to the jurisdiction
of the courts in the Commonwealth of Pennsylvania.
(d) Relief. Marks and Weston shall deliver a release to
each other in the form attached hereto as Exhibit C.
4. Mutual Agreement and Undertaking. Weston and Marks agree that
each shall refrain from any communication of any kind or in any form which could
reasonably be construed as detrimental to the other and, with respect to Marks'
communications, to Weston's directors, officers or employees. In the course of
any legal or administrative proceedings both parties shall at all times tell the
truth. In addition, Weston agrees to
5
<PAGE> 6
provide Marks with a letter of reference in the form attached hereto as Exhibit
D.
5. Acceleration Election. Weston may, at its option, at any
time or from time to time, in its absolute and sole discretion, accelerate the
time and the manner of making any one or more payments required by this
Agreement.
6. Non-Alienation. None of the rights or payments contemplated under
this Agreement may be sold, given away, assigned, transferred, pledged,
mortgaged, alienated, hypothecated or in any way encumbered or disposed of by
Marks, or any executor, administrator, heir, legatee, distributee, relative or
any other person or entity, whether or not in being, claiming under Marks by
virtue of this Agreement, and none of the rights or benefits contemplated by
this Agreement shall be subject to execution, attachment or similar process. Any
sale, gift, assignment, transfer, pledge, mortgage, alienation, hypothecation or
encumbrance, or other disposition of this Agreement or of such rights or
benefits contrary to the foregoing provisions, or the levy or any attachment or
similar process thereon, shall be null and void and without effect.
7. Taxes. Weston shall withhold from payments to Marks and remit to
the appropriate government agencies such payroll taxes and income withholding as
Weston determines is or may be necessary under applicable law with respect to
amounts paid under this Agreement.
8. General Obligation. The rights and benefits of Marks
hereunder shall be solely those of an unsecured creditor of Weston.
9. Waiver of Breach. Weston's failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition, nor shall Weston's waiver
or relinquishment of any right or power hereunder at any one or more times be
6
<PAGE> 7
deemed a waiver or relinquishment of such right or power at any other time or
times.
10. Modification. This Agreement shall not be modified or
amended except by written instrument duly executed by Weston and Marks.
11. Severability. If any clause, sentence, paragraph, section,
or part of this Agreement shall be held by any court of competent jurisdiction
to be invalid, such judgment shall not affect, impair or invalidate any of the
other parts hereof.
12. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either hand-delivered to the
addressee or sent by registered or certified mail, if to Marks, to Marks'
address as shown on Weston's books, and if to Weston, addressed to Weston's
Chief Executive Officer at Weston's principal business office located at One
Weston Way, West Chester, Pennsylvania 19380-1499 or such other address as
Weston or Marks may designate in writing.
13. Arbitration. Any controversy or claim arising out of or relating
to this Agreement or the breach thereof shall be settled by arbitration in the
City of Philadelphia in accordance with the rules of the American Arbitration
Association then in effect. The decision of the arbitrator shall be final and
binding upon the parties, and judgment upon the decision rendered in such
arbitration may be entered in any court having jurisdiction.
14. Binding Agreement. This Agreement shall inure to the benefit of
and be binding upon Weston and its successors and upon Marks, his heirs and
legal representatives. This Agreement shall not be assignable by Marks and shall
be assignable by Weston only to a person or entity which may become a successor
in interest to Weston and which is bound hereby.
7
<PAGE> 8
15. Captions. The captions of the various provisions shall not
be deemed a part of this Agreement and shall not be construed in any way to
limit the contents hereof but are inserted herein only for reference and for
convenience of the parties.
16. Governing State Law. This Agreement may be executed at
different times in different places, but all questions concerning the
construction or validity hereof, or relating to performance hereunder, shall
be determined in accordance with the laws of the Commonwealth of Pennsylvania.
17. No Changes. This Agreement represents the entire agreement
between the parties with respect to the subject matter hereof and supersedes
any and all prior agreements and undertakings, written or oral.
IN WITNESS WHEREOF, Weston has caused this Agreement to be executed by its
duly authorized officers, and Marks has hereunto set his hand and seal as of the
day and year first above written.
ATTEST: ROY F. WESTON, INC.
s/Arnold P. Borish By: s/William J. Marrazzo
- -------------------------------- ---------------------------
Secretary
(SEAL)
s/Peter J. Marks
---------------------------
Peter J. Marks
8
<PAGE> 1
Exhibit 10.4
ROY F. WESTON, INC.
MODIFICATION TO SEVERANCE AGREEMENT
This Modification to Severance Agreement ("Modification Agreement")
is made effective May 1, 1997 between Roy F. Weston, Inc., a Pennsylvania
corporation ("Weston") and William J. Marrazzo ("Marrazzo").
Background
Weston and Marrazzo are parties to a certain Severance Agreement
effective December 3, 1996 (the "Severance Agreement").
Weston and Marrazzo desire to amend the Severance Agreement in the
manner hereinafter set forth.
Agreement
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Section 3 of the Severance Agreement be and hereby is amended and
restated in its entirety to read as follows:
"3. Good-Reason Resignation. For purposes of this Agreement,
Marrazzo's employment shall be deemed to have been terminated by
reason of a "good-reason resignation" if Marrazzo in his sole
discretion elects to discontinue his employment with Weston because
either (i) his responsibilities, duties or authority have changed
materially from their level as of December 3, 1996 (the "Effective
Date") which change
<PAGE> 2
substantially reduces the rank or level, responsibility or scope of
Marrazzo's position with Weston (or its successor in the case of a
merger, consolidation, acquisition or transfer of substantially all
of its business assets) below that which he has on the Effective
Date as Weston's President and Chief Executive Officer or (ii) the
composition of the Board of Directors of Weston materially changes.
For purposes hereof, the composition of the Board of Directors shall
be deemed to have materially changed if at any time after the
Effective Date and during any twelve consecutive months four or more
incumbent directors who are not Roy F. Weston or any relative of Roy
F. Weston cease to be directors of Weston (whether by shareholder
action or otherwise). If Marrazzo elects to terminate his employment
under this Section 3, his written notice under Section 4 shall
include the specific matter or matters which Marrazzo asserts
constitute reason for a "good-cause resignation.""
1. Section 5(c) of the Severance Agreement is amended by changing
the period of time for which the non-competition provisions are applicable from
two years to sixteen months and by deleting the last sentence thereof in its
entirety.
2. Section 13 of each of the Supplemental Retirement Agreements (the
"Supplemental Retirement Agreements") referred to in the "Background" to the
Severance Agreement are modified by reducing the period of non-competition from
three years to sixteen months so that the period of non-competition in both the
Severance Agreement and the Supplemental Retirement Agreement shall be for a
period of sixteen months.
3. Except as herein modified, the parties hereto ratify and confirm
the Severance Agreement and the Supplemental Retirement Agreements.
2
<PAGE> 3
IN WITNESS WHEREOF, Weston has caused this Agreement to be executed
by its duly authorized officers, and Marrazzo has hereunto set his hand and seal
as of the day and year first above written.
ROY F. WESTON, INC.
By:___s/________________________ __s/____________________
Joseph Bordogna, Chairman William J. Marrazzo
Attest:
___________s/____________________
Arnold P. Borish, Secretary
3
<PAGE> 1
Exhibit 10.5
May 1, 1997
Mr. William J. Marrazzo
President - Chief Executive Officer
Roy F. Weston, Inc.
One Weston Way
West Chester, PA 19380-1499
Re: Stay Bonus
Dear Bill:
Intending to be legally bound hereby, and in consideration of your
continuation to provide services to Roy F. Weston, Inc., a Pennsylvania
corporation (the "Company"), the Company agrees that it will pay to you (or, in
the event of your death, your legal representatives) the sum of $50,000.00 under
the following circumstances:
1. You will be entitled to such payment on July 31, 1997, provided
that you do not voluntarily terminate your employment with the Company before
the 1997 Annual Meeting of the Company's Shareholders and do not, without the
prior approval of the Company's board of directors, voluntarily terminate your
employment thereafter and before July 31, 1997, for any reason whatsoever,
including, without limitation the exercise by you of your right to give notice
prior to such date of the termination of your employment under Section 4 of the
Severance Agreement but your Employment Termination Date (as defined in the
Severance Agreement) may not, without the prior approval of the Company's Board
of Directors, be before July 31, 1997.
2. You will be entitled to such payment on the date your employment
terminates if the Company terminates your employment without "cause" (as the
term "cause" is defined under the Severance Agreement).
<PAGE> 2
Mr. William J. Marrazzo
May 1, 1997
Page 2
3. You will be entitled to such payment in the event of your death
prior to July 31, 1997, within ten (10) business days after the date of your
death.
It is recognized that, following the 1997 Annual Meeting, your title
may change and you may cease to be the President and Chief Executive Officer of
the Company. While such a change in your role (as well as contemplated changes
in the composition of the Company's Board of Directors) may grant to you rights
under the Severance Agreement to a "good-reason resignation", your entitlement
to a payment under this letter agreement shall exist only if you continue to be
employed by the Company unless the termination of your employment after the 1997
Annual Meeting is approved by the Company's Board of Directors. It is understood
that prior to July 31, 1997, the Company may not require you to undertake duties
or responsibilities inconsistent with the duties and responsibilities of a
senior executive of the Company and the Company may not change any aspect of the
compensation and fringe benefits to which you are now entitled as the President
and Chief Executive Officer of the Company. Without limiting the foregoing, it
is understood that you have a three (3) week vacation planned in June for you
and your family and your right to go on such vacation is herewith deemed to be
consistent with the current fringe benefits to which you are entitled as a the
President and Chief Executive Officer of the Company. If the Company breaches
its obligations under this paragraph, it shall be deemed to have terminated you
without cause and you shall be immediately entitled to the $50,000 payment.
Nothing contained herein will preclude you and the Company agreeing
on the terms under which you may serve as a consultant to the Company upon terms
and conditions mutually satisfactory to you and the Company.
<PAGE> 3
Mr. William J. Marrazzo
May 1, 1997
Page 3
This letter agreement is independent of the Company's and your
respective rights and obligations under the Severance Agreement and the other
agreements identified in the "Background" Section of the Severance Agreement and
nothing contained herein shall adversely affect the Company's or your rights
under the Severance Agreement or any such other agreement even if, by reason of
your actions under the Severance Agreement, you make yourself ineligible under
this letter agreement to receive the $50,000 payment in accordance with the
terms and conditions hereof.
Sincerely yours,
Roy F. Weston, Inc.
By:_______s/_____________
Joseph Bordogna, Chairman
Accepted:
__________s/____________
William J. Marrazzo
<PAGE> 1
Exhibit 10.6
22 May 1997
The Board of Directors
Roy F. Weston, Inc.
c/o Ms. Katherine W. Swoyer, Vice Chairman
1 Weston Way
West Chester, PA 19380
Dear Directors:
This letter shall evidence my resignation as President and Chief Executive
Officer of Roy F. Weston, Inc. (the "Company") and as an officer of all
subsidiaries of the Company effective with, and conditioned upon, the election
at the Annual Meeting of Shareholders of the Company scheduled for Friday, 23
May 1997 of the management nominees named in the Proxy Statement of the Company
for such meeting dated 2 May 1997.
My decisions to resign as President and Chief Executive Officer of the Company
results from my belief that since the incoming Board of Directors intends to
redefine the Company's strategy, it is in the best interests of the Company for
such Board to have maximum flexibility in such efforts and to begin with a
"clean slate" upon which to make decisions concerning the Company.
While I am resigning as an officer of the Company, I will continue to be an
employee of the Company through 31 July 1997, and will not be terminated by the
Company as an employee during such period except for "cause." In such capacity,
I will assist the new Board of Directors and the new officers of the Company in
their transition.
By separate letter, I am submitting a memorandum which I have prepared which
reports on the performance by me of the responsibility (as imposed on me by a
resolution of the Board of Directors of the Company adopted as its 1 May
meeting) to investigate the letter from International Technology Corporation
("IT") dated 22 April 1997, and to consult with the Company's investment banking
firm and outside counsel as is necessary and appropriate.
I am aware that there is a scheduled meeting of the Board of Directors of
the Company after the Annual Meeting of the Shareholders on 23 May. Since
this new Board will be considering the election of new officers, I do not
believe it is appropriate for me in my
<PAGE> 2
The Board of Directors, Roy F. Weston, Inc.
c/o Ms. Katherine W. Swoyer, Vice Chairman
22 May 1997
Page 2
capacity as a director of the Company to attend such meeting. I will, if
requested, make myself available to the new Directors to report to them
concerning the IT letter as well as
respond to any questions which they may have arising from the information
packages submitted to the newly elected Directors.
There is attached herewith a copy of the press release prepared by the Company
and related to my resignation as an officer of the Company. It is my
understanding that this press release will be issued as of the close of business
today. I hereby approve this press release. It is my understanding that the
Company will not change this press release or delay its issuance without my
consent.
It is my understanding that, if anyone asks at the 23 May shareholders meeting
concerning my status, the response will be a statement that I have resigned for
the reasons described in the second paragraph of this letter.
My resignation as an officer of the Company will not affect my rights to
continue as an employee of the Company until 31 July 1997, on the same financial
terms and conditions as exist at present in my role as President and CEO of the
Company, my right to receive my stay bonus on 31 July 1997 in accordance with
the Stay Bonus Agreement approved at the 1 May 1997 Board of Directors meeting,
or my right to exercise, effective 31 July 1997, my rights under my severance
agreement dated 3 December 1996, as amended. In this regard, it is my
understanding that I will continue to participate in the SAR payments for the
full Second Quarter and full Third Quarter (without pro-ration) and, for
purposes of calculating my payment under the SAR program, I will be given a
rating Of "2.0" for my activities for each of the Second and Third Quarters.
I will not be required to report to my office after 22 May and will be treated
as on "administrative leave" during the entire period from 23 May to 31 July
1997. Except for the period 19 June through and including 11 July 1997, I will
make myself available to provide advice (whether in person or by telephone) to
the new Chairman and the acting President and acting CEO of the Company.
I will be given access to my current office until 6 June 1997, to permit an
orderly move-out. It is not expected that I will be present in such office on a
regular basis or during normal working hours during the period from 23 May to 6
June 1997. I will be given access to an office at WESTON's Philadelphia office
beginning 26 May 1997 and continuing through 31 July 1997, which I will be free
to occupy on a regular basis during this period, and I will be provided with one
dedicated secretarial person through 31 July 1997.
<PAGE> 3
The Board of Directors, Roy F. Weston, Inc.
c/o Ms. Katherine W. Swoyer, Vice Chairman
22 May 1997
Page 3
The Company will provide me with full support (including reimbursement for all
reasonable expenses) in connection with my participation in the AWWA Conference
during the six day period beginning 14 June 1997. In addition, and with the
prior approval of the Company, I am prepared to act as a "host" at a dinner on
17 June 1997, at which clients and prospective clients of the Company will be
present, and all costs relating to such dinner will be paid by the Company.
I will be free to discuss with Kate Swoyer her providing me with a letter of
reference.
On 31 July 1997, I will be entitled to my stay bonus, will receive all salary
and benefits (including accrued vacation pay) which have accrued to such date in
accordance with the Company's normal practice and will be treated as having
elected to begin receiving benefits under the Severance Agreement beginning 1
August 1997.
No press release or written communication (including any communication to
employees of the Company) will be issued or transmitted by the Company which
refers to me without my prior approval. No press release or written
communication (including any communication to employees of the Company) which
describes the Company's financial results for the Second Quarter will contain
any language which is critical of me or my management team or which links me or
my management team to such financial results.
Neither the Company nor any senior officer of the Company will make any written
or verbal comments concerning me or my role as President and Chief Executive
Officer of the Company which are critical or disparaging. Similarly, I will not
make any written or verbal comments concerning the Company, its Board of
Directors or members of the Weston family which are critical or disparaging.
Please indicate below your concurrence with the foregoing and your agreement
on behalf of the Company of the terms and conditions contained herein. I
intend to be legally bound hereby.
Sincerely yours,
s/William J. Marrazzo
William J. Marrazzo
cc: Dr. Joseph Bordogna
Mr. Marvin O. Schlanger
<PAGE> 4
The Board of Directors, Roy F. Weston, Inc.
c/o Ms. Katherine W. Swoyer, Vice Chairman
22 May 1997
Page 4
attachment
Intending to be legally bound hereby, Roy F. Weston, Inc. (the "Company")
hereby agrees to the terms and conditions relating to William J. Marrazzo
contained in the foregoing letter which are to be performed or complied with
by the Company.
ROY F. WESTON, INC.
By: s/Katherine W. Swoyer
------------------------------------
Katherine W. Swoyer
Vice Chairman
<PAGE> 1
Exhibit 10.7
CONSULTING SERVICES AGREEMENT
Agreement No. _________
THIS AGREEMENT is made and entered into as of the 23rd day of May, 1997 by and
between Roy F. Weston, Inc. ("Weston" or the "Company"), a Pennsylvania
corporation having its principal offices at 1 Weston Way, West Chester,
Pennsylvania 19380 and GlobeQuest International, Inc. ("Consultant") whose
principal address is 6841 Pacific Lane, Annandale VA 22003.
WHEREAS, Weston is in the business of providing environmental engineering and
consulting services to private industry and governmental clients; and
WHEREAS, Consultant, through its representative, Tom Harvey, is in the business
of providing organizational, executive, strategic, marketing and administrative
consulting services, and is, by reason of its knowledge, education and expertise
capable of performing the services described herein; and
WHEREAS, Weston's Board of Directors desires, and Consultant has agreed, that
Consultant provide certain consulting services as set forth hereinafter to the
Company.
NOW THEREFORE, in consideration of the premises and the mutual promises
contained herein, and other good and valuable consideration, the parties agree
as follows:
ARTICLE I. SCOPE OF CONSULTING SERVICES.
1. THE SERVICES. Subject to the terms and conditions of this Agreement,
Consultant's representative, Tom Harvey, shall provide strategic review and
analysis of the Company's current operations, strategic focus, business
development activities and market position, in order to make recommendations to
the Company's Board of Directors to improve the Company's cost-effectiveness and
profitability (such activities are hereinafter referred to as the "Services").
The specific scope and extent of the Services shall be determined by the
Company's President and Chief Executive Officer. Consultant shall prepare such
written reports and documentation relating to the Services as it may be directed
by the
1
<PAGE> 2
President and Chief Executive Officer to perform. Mr. Harvey, as Consultant's
agent, shall be bound by the obligations imposed on Consultant under this
Agreement.
2. TIME COMMITMENT. Consultant shall commit such time and resources of Mr.
Harvey as shall be necessary to perform the Services as requested by the
President and Chief Executive Officer of Weston.
3. AUTHORIZED WESTON REPRESENTATIVE. Consultant shall report to the
President and Chief Executive Officer of Weston (the "Weston Representative")
or such other person as the Weston Board of Directors shall designate. All
services performed by Consultant shall be at the direction of the Weston
Representative.
4. RESTRICTION ON DELEGATION. All work hereunder shall be performed
exclusively by Mr. Harvey on behalf of the Consultant except that Consultant
may delegate work with the advance written approval of the Weston
Representative.
ARTICLE II. TERM; TERMINATION.
The initial term ("Initial Term") of this Agreement shall be for the period
commencing May 23, 1997 and ending December 31, 1997. Thereafter the term may be
extended for successive month-to-month periods upon the mutual agreement of the
parties. Each monthly extension of the term shall be evidenced by a writing
executed by the parties. After the Initial Term, this Agreement may be
terminated by either party upon giving thirty (30) days' written notice to the
other. Weston may terminate this Agreement during the Initial Term or any
extension thereof if Consultant breaches this Agreement or is unable to perform
hereunder. In such event, Consultant shall be paid for the number of days
Consultant has performed through the date of termination. The provisions of
Articles V, VI, VIII and XIII shall survive the expiration or any termination of
this Agreement.
Notwithstanding anything herein to the contrary, nothing herein shall be deemed
a guaranty that Weston will request Consultant to perform the Services for any
minimum number of days.
ARTICLE III. CONSULTING FEE.
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1. CONSULTING FEE. Weston shall pay Consultant a consulting fee in the
amount of Two thousand Dollars ($2,000.00) for each full day in which Mr.
Harvey provides the Services. A "full day" is defined as at least eight (8)
hours in one calendar day. The consulting fee shall be pro-rated for any day
in which Mr. Harvey provides the Services for less than a full day.
2. EXPENSES. In the event Mr. Harvey is required to travel in connection with
the performance of services hereunder, Weston shall reimburse Consultant for
such expenses incurred for travel and related food and lodging as are incurred
at the request of, or with the prior approval of Weston. Reimbursement of such
expenses shall be made in accordance with applicable Weston policies, and on the
same basis as though Consultant were an employee of Weston.
Except with respect to the purchase of meals or refreshment for persons other
than Mr. Harvey where such purchase has a legitimate business purpose relating
to the Services, no entertainment is authorized under this Agreement and no
entertainment expenses shall be reimbursed to Consultant hereunder without the
prior written authorization of the Weston Authorized Representative.
In consideration for the fees and reimbursement paid by Weston hereunder,
Consultant hereby releases Weston from any and all claims for fees and/or
expenses incurred by Consultant prior to the commencement of the Initial Term
hereof.
ARTICLE IV. INVOICING AND PAYMENT.
1. INVOICES. Consultant shall submit invoices for completed services in a
form acceptable to Weston within ten (10) days following the end of each
month in which Mr. Harvey provides the Services. Invoices shall include the
following detail:
a. This Agreement number, Consultant's name, dates of service, and
number of hours worked each day by Mr. Harvey.
b. A detailed list of expenses in a format reasonably acceptable to
Weston, together with copies of original documentation of such expenses.
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Original invoices shall be submitted together with one copy to the Weston
Representative who shall approve such invoice upon reasonable satisfaction that
the Services have been satisfactorily performed.
2. PAYMENT. Payment shall be issued to Consultant within 30 days after receipt
and approval of each invoice. Weston shall have no obligation to reimburse
Consultant for any expenses incurred, or any services performed, in violation of
any law, Weston Business Ethics Policy or in contravention of this Agreement.
ARTICLE V. WORK PRODUCT.
1. OWNERSHIP OF WORK PRODUCT. All information, including, but not limited to,
all designs, processes, manuals, reports, computer data and related information,
first produced by Consultant for Weston in performing the Services shall be the
sole property of Weston. All such information shall be considered proprietary
information and shall be retained and used solely in accordance with the
provisions of this Agreement. To the extent any such information comprises work
susceptible to protection under applicable copyright laws, Consultant agrees
that such work shall be deemed "work made for hire" hereunder. In the event that
such work is determined not to be "work made for hire," this Agreement shall
operate as an irrevocable assignment by Consultant to Weston of the copyright in
the work, including all right, title and interest therein, in perpetuity.
2. INVENTIONS AND PATENTS. All inventions, improvements and discoveries, whether
patentable or not, first conceived, developed or reduced to practice by
Consultant, either alone or with others, in the course of the performance of the
Services, or as a consequence of Consultant's receipt of information hereunder,
shall be the sole property of Weston. All such inventions, improvements and
discoveries shall be promptly disclosed to Weston in writing. At Weston's
request and expense, Consultant agrees to (i) assist Weston in making
application for patents on such inventions, improvement and discoveries in the
United States and any foreign countries (ii) assign all such applications to
Weston or its designee without further charges, (iii) assist Weston in the
prosecution of any patent applications and the enforcement of any resulting
patents and (iv) execute any and all documents necessary for the accomplishment
of the foregoing.
ARTICLE VI. CONFIDENTIALITY.
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1. PROPRIETARY INFORMATION. All information received by Consultant in the course
of performing the Services, other than information publicly available or
publicly disclosed shall be deemed "Proprietary Information." Consultant shall
receive and retain all Proprietary Information in confidence and shall not
disclose such information to any person without the express written
authorization of Weston. Consultant shall use Proprietary Information solely for
the purpose of performing his obligations hereunder and for no other purpose.
Upon termination of this Agreement, Consultant shall promptly return all
Proprietary Information to Weston, and will, if requested by Weston, execute a
certificate warranting that all Proprietary Information has been returned to
Weston in accordance with this Agreement.
2. RELATIONSHIP WITH WESTON. Consultant shall be deemed an independent
contractor for all purposes hereunder.
3. NON-SOLICITATION OF EMPLOYEES. Consultant shall not, directly or indirectly,
from the date of this Agreement until two (2) years after termination of this
Agreement, solicit, hire or otherwise induce any Weston employee to leave the
employment of Weston; nor shall Consultant induce any Weston employee to become
an employee of, or otherwise become associated with, any company or business
other than Weston, without the written approval of Weston. This paragraph shall
apply to inducement, hiring or solicitation of any Weston employee regardless of
position.
4. NON-SOLICITATION OF CLIENTS. Consultant will not, directly or indirectly,
from the date of this Agreement until two (2) years after termination of this
Agreement, solicit the trade or patronage, in competition with Weston, of any
Weston clients or of any prospective clients with whom Weston has pending
proposals. This restriction shall only apply to clients or prospective clients
with whom Consultant had direct or indirect contact during the pendency of this
Agreement.
ARTICLE VII. CONFLICTS OF INTEREST
1. REPRESENTATION CONCERNING CONFLICTS. Consultant hereby warrants and
represents that to the best of its knowledge and belief there are no relevant
facts or circumstances which could give rise to an actual or potential conflict
of interest under this Agreement, and that Consultant has disclosed to Weston
all information having any relevance to an actual or
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potential conflict of interest. Mr. Harvey's interest in Consultant has been
disclosed to Weston's Board of Directors, which has approved Weston's engagement
of Consultant under this Agreement.
2. DISCLOSURE. Consultant agrees that if an actual or potential conflict of
interest is discovered after execution of this Agreement, Consultant will make
full disclosure to Weston in writing. This disclosure shall include a
description of actions which Consultant has taken or proposes to take to avoid,
mitigate or neutralize the actual or potential conflict, and all actions taken
for such purposes shall be in consultation with Weston.
3. COMMUNICATIONS WITH GOVERNMENTAL OFFICIALS. In performing the Services,
Consultant shall not communicate with any officer, representative, employee,
elected official or agency of the government of any country, with the exception
of the United States, or any subdivision thereof on behalf of Weston without
having first obtained the written consent of the Weston Representative.
4. GOVERNMENT EMPLOYMENT. If Consultant or any person performing work for
Consultant hereunder has been a United States government employee within the
past three (3) years, Consultant agrees to furnish Weston all relevant
information regarding any potential conflict of interest.
ARTICLE VIII. RECORDS RETENTION.
Consultant shall retain all records documenting amounts invoiced to Weston under
this Agreement in legible form for a period of five (5) years from date of final
payment hereunder. Consultant authorizes Weston to inspect and audit these
records during business hours upon prior notice to Consultant. Except for
documentation of amounts invoiced to Weston described above, upon the
termination or expiration of this Agreement, Consultant shall immediately
deliver to Weston all documents relating in any way to the performance of the
Services.
ARTICLE IX. TAXES.
Consultant shall have sole responsibility for payment of all Federal, state
(unless it provides Weston with a Non-taxable Transaction Certificate), local
and other sales, use, income and all employment and other taxes applicable to
the fees paid to Consultant
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hereunder. Consultant agrees to indemnify and hold Weston harmless from and
against any and all claims and liability relating to such taxes.
ARTICLE X. INDEPENDENT CONTRACTOR.
For all purposes in performing its services, Consultant shall be deemed to be an
independent contractor and as such, shall not be entitled to any benefits
applicable to the employees of Weston. Consultant declares that it is engaged in
an independent business, that similar services are provided for other clients
from time to time, and Weston is not Consultant's sole and only client.
Consultant's authority to bind or speak for Weston shall be limited by Weston's
By-Laws and applicable law, and further limited and defined by the authority
granted by the Authorized Representative and the Board of Directors from time to
time.
ARTICLE XI. WARRANTY.
Consultant warrants and represents that: (a) it possesses the expertise,
capability, equipment and personnel to properly and professionally perform the
services; (b) to the extent it is required to do so, it is properly and legally
licensed to perform the services; (c) it shall at all times in the performance
of such services comply with all applicable laws, ordinances and regulations;
(d) it shall perform all services in a good, workmanlike, professional,
efficient and non-negligent manner; and (e) it does not, as of the date of this
Agreement, and during the period of performance under this Agreement, shall not
represent any competitor of Weston without first fully disclosing to Weston in
writing the scope of work and the name of such competitor and obtaining Weston's
written consent in advance of such representation.
ARTICLE XII. INDEMNIFICATION.
Consultant agrees to indemnify and hold harmless Weston, its officers,
directors, agents and employees for any loss, including reasonable and actual
attorney's fees, costs or damages that Weston may incur as a result of the
negligent acts or omissions of the Consultant or the Consultant's employees or
agents.
Neither party shall be liable to the other for incidental, indirect or
consequential damages, except where such damages arise out of the gross
negligence or willful misconduct of the other party.
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ARTICLE XIII. ASSIGNMENT.
This Agreement may not be assigned by Consultant, either in whole or in part,
without the prior written consent of Weston. Any attempted or purported
assignment shall be null and void and without force and effect.
ARTICLE XIV. DISPUTES.
Any dispute arising under this Agreement not settled by agreement of the
parties, including disputes arising as a result of termination, shall be decided
by litigation in a court of competent jurisdiction. Pending any decision,
appeal, suit, or claim pursuant to this Article, Consultant shall proceed
diligently with the performance of the work authorized under this Agreement.
ARTICLE XVI. SEVERABILITY.
Any provision or part of this Agreement held to be void or unenforceable under
any law or by any court shall be deemed stricken, and all remaining provisions
shall continue to be valid and binding upon the parties. The parties may reform
or replace such stricken provision or part thereof with a valid and enforceable
provision which expresses the intent of the stricken provision.
ARTICLE XVII. GOVERNING LAW.
This Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Pennsylvania, exclusive of the choice of law rules
thereof, as if wholly to be performed therein.
ARTICLE XVIII. ENTIRE AGREEMENT. This Agreement constitutes the sole and
exclusive agreement of the parties hereto and supersedes any prior
understandings or written or oral agreements between the parties. This
Agreement may be amended only by
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a writing signed by the Authorized Representative of each party.
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have
caused this Agreement to be executed by their duly authorized representatives.
GLOBEQUEST ROY F. WESTON, INC.
INTERNATIONAL, LTD.
(CONSULTANT)
BY:______S/____________ BY: _____S/____________
NAME: TOM HARVEY NAME: PAT MCCANN
TITLE: PRESIDENT TITLE: COO
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Exhibit 10.8
CONSULTING SERVICES AGREEMENT
AGREEMENT NO. RA-97-WSTN1
THIS AGREEMENT is made and entered into as of the 1st day of June, 1997 by and
between Roy F. Weston, Inc. ("Weston"), a Pennsylvania corporation having its
principal offices at 1 Weston Way, West Chester, Pennsylvania 19380 and Resource
Alternatives, Inc., a District of Columbia Chapter C corporation ("Consultant")
having its principal offices at 800 25th Street, N.W., Washington, D.C., 20037.
WHEREAS, Weston is in the business of providing environmental engineering and
consulting services to private industry and governmental clients; and
WHEREAS, Consultant is in the business of providing organizational and strategic
analysis. By reason of its knowledge, education and expertise is capable of
performing the services described herein; and
WHEREAS, Weston has determined that certain of Consultant's professional support
services will be beneficial in ensuring organizational effectiveness and
efficiency.
NOW THEREFORE, in consideration of the premises and the mutual promises
contained herein, and other good and valuable consideration, the parties agree
as follows:
ARTICLE I. SCOPE OF CONSULTING SERVICES.
1. TRANSITION & BUSINESS DEVELOPMENT. Consultant shall provide independent
strategic review and analysis of Weston's current operations, strategic focus
and market position in order to prepare recommendations for Executive Management
and the Board of Directors that will result in increased organizational
opportunity and effectiveness. All information shall be gathered by Consultant
in accordance with current Weston policy and in cooperation with Weston's
current chain of authority. Consultant's tasks shall include the following:
- Review and recommendation for Weston's federal market potential.
- Review of national and international operations.
- Review business development practices.
- Review national Technical Resources capability.
In performing these tasks Consultant shall conduct such due diligence as shall
be necessary to fully inform Executive Management and the new Board of Directors
on an ongoing basis of the business opportunities of the corporation. On or
before August 31, 1997, Consultant shall set forth the status of the foregoing
matters and its recommendations on such matters.
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Deliverable: Strategic Analysis and Recommendations Report.
Estimated Price: $75,000.
2. TIME COMMITMENT. In rendering the services set forth in this Agreement,
Consultant shall commit such time and resources as shall be necessary to
accomplish the specified deliverables.
3. AUTHORIZED WESTON REPRESENTATIVE. Consultant shall report to the
President and Chief Executive Officer of Roy F. Weston, Inc., the Weston
Representative. All services performed by Consultant shall be at the
direction of the Weston Representative.
4. AUTHORIZED CONSULTANT REPRESENTATIVE. The Consultant Representative
shall be Dr. Dominic J. Monetta. All work here under shall be performed by
the persons listed in Schedule "A" at the hourly rates set forth therein, or
such other persons designated by the Consultant Representative, subject to
Weston's prior approval.
ARTICLE II. TERM; TERMINATION.
The term of this Agreement shall be for the period commencing June 1, 1997 and
ending August 31, 1997. Thereafter the term may be extended from month to month
by written agreement executed by the parties. This Agreement may be terminated
by either party upon giving thirty (30) days written notice to the other. Weston
may terminate this Agreement at any time if Consultant breaches this Agreement
or is unable to perform hereunder. In the event of any termination, Consultant's
fee shall be pro-rated, based on the percentage of each deliverable completed
and delivered. The provisions of Articles V., VI., VIII. and XIII shall survive
the expiration or any termination of this Agreement.
ARTICLE III. CONSULTING FEE.
1. CONSULTING FEE. Weston shall pay Consultant a consulting fee in a total
amount not to exceed $75,000. The Consulting Fee shall be determined by
multiplying the number of hours spent by Consultant in performing the tasks set
forth in Article I herein above, by Consultant's applicable hourly rate.
2. EXPENSES. In the event Consultant is required to travel in connection with
the performance of its services hereunder, Weston shall reimburse Consultant for
such expenses incurred for travel and related food and lodging as are incurred
at the request of, or with the prior approval of Weston. Reimbursement of such
expenses shall be made in accordance with applicable Weston polices, and on the
same basis as though Consultant were an employee of Weston.
No entertainment is authorized under this Agreement and no entertainment
expenses shall be reimbursed to Consultant hereunder. The term "entertainment"
shall include, without limitation, the purchase of meals or refreshment for any
person other than Consultant, and the purchase of any recreational activity for
any person.
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In consideration for the fees and reimbursement paid by Weston hereunder,
Consultant hereby releases Weston from any and all claims for fees and/or
expenses incurred by Consultant prior to the commencement of the term hereof.
ARTICLE IV. INVOICING AND PAYMENT.
1. INVOICES. Consultant shall submit invoices for completed services in a
form acceptable to Weston within ten (10) days following the end of each
month in which it provides its services. Invoices shall include the
following detail:
a. This Agreement number, dates of service, number of hours worked,
identification of person(s) performing services, description of deliverables
completed and computation of consulting fee earned to date.
b. A detailed list of expenses in a format reasonably acceptable to
Weston, together with copies of original documentation of such expenses.
Original invoices shall be submitted together with one copy to the Weston
Representative who shall approve such invoice upon reasonable satisfaction that
the services and deliverables described therein have been satisfactorily
completed.
2. PAYMENT. Payment shall be issued to Consultant within 30 days after receipt
and approval of Consultant's invoices. Weston shall have no obligation to
reimburse Consultant for any expenses incurred, or any services performed, in
violation of any law, Weston Business Ethics Policy or in contravention of this
Agreement.
ARTICLE V. WORK PRODUCT.
1. OWNERSHIP OF WORK PRODUCT. All information, including, but not limited to,
all designs, processes, manuals, reports, computer data and related information,
first produced by Consultant for Weston in performing its services hereunder
shall be the sole property of Weston. All such information shall be considered
proprietary information and shall be retained and used solely in accordance with
the provisions of this Agreement. To the extent any such information comprises
work susceptible to protection under applicable copyright laws, Consultant
agrees that such work shall be deemed "work made for hire" hereunder. In the
event that such work is determined not to be "work made for hire"", this
Agreement shall operate as an irrevocable assignment by Consultant to Weston of
the copyright in the work, including all right, title and interest therein, in
perpetuity.
2. INVENTIONS AND PATENTS. All inventions, improvements and discoveries, whether
patentable or not, first conceived, developed or reduced to practice by
Consultant, either alone or with others, in the course of the performance of the
services hereunder, or as a consequence of Consultant's receipt of information
hereunder, shall be the sole property of Weston. All such inventions,
improvements and discoveries shall be promptly disclosed
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to Weston in writing. At Weston's request and expense, Consultant agrees to (i)
assist Weston in making application for patents on such inventions, improvement
and discoveries in the United States and any foreign countries (ii) assign all
such applications to Weston or its designee without further charges, (iii)
assist Weston in the prosecution of any patent applications and the enforcement
of any resulting patents and (iv) execute any and all documents necessary for
the accomplishment of the foregoing.
ARTICLE VI. CONFIDENTIALITY.
1. PROPRIETARY INFORMATION. All information received by Consultant in the course
of performing its services, other than information publicly available or
publicly disclosed shall be deemed Proprietary Information. Consultant shall
receive and retain all Proprietary Information in confidence and shall not
disclose such information to any person without the express written
authorization of Weston. Consultant shall use Proprietary Information solely for
the purpose of performing its obligations hereunder and for no other purpose.
Upon termination of this Agreement, Consultant shall promptly return all
Proprietary Information to Weston, and will, if requested by Weston, execute a
certificate warranting that all Proprietary Information has been returned to
Weston in accordance with this Agreement. Consultant shall cause all persons
identified on Schedule A requiring access to the Proprietary Information in the
course of Consultant's performance hereunder, to agree to the confidentiality
requirements of this Article VI.
2. RELATIONSHIP WITH WESTON. Consultant may not represent that it is
associated with Weston for any marketing, commercial or promotional purposes
without the prior written permission of Weston.
ARTICLE VII. CONFLICTS OF INTEREST
1. REPRESENTATION CONCERNING CONFLICTS. Consultant hereby warrants and
represents that to the best of its knowledge and belief there are no relevant
facts or circumstances which could give rise to an actual or potential conflict
of interest under this Agreement, and that Consultant has disclosed to Weston
all information having any relevance to an actual or potential conflict of
interest.
2. DISCLOSURE. Consultant agrees that if an actual or potential conflict of
interest is discovered after execution of this Agreement, Consultant will make
full disclosure to Weston in writing. This disclosure shall include a
description of actions which Consultant has taken or proposes to take to avoid,
mitigate or neutralize the actual or potential conflict, and all actions taken
for such purposes shall be in consultation with Weston.
3. COMMUNICATIONS WITH GOVERNMENTAL OFFICIALS. In performing these Services,
Consultant shall not communicate with any officer, representative, employee,
elected official or agency of the government of any country or any subdivision
thereof on behalf of Weston without having first obtained Weston's written
consent thereto.
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4. GOVERNMENT EMPLOYMENT. If Consultant has been a United States government
employee within the past five (5) years, Consultant agrees to furnish Weston all
relevant information regarding any potential conflict of interest.
ARTICLE VIII. RECORDS RETENTION.
Consultant shall retain all records related to this Agreement in legible form
for a period of five (5) years from date of final payment hereunder. Consultant
authorizes Weston to inspect and audit these records during business hours upon
prior notice to Consultant.
ARTICLE IX. TAXES.
Consultant shall have sole responsibility for payment of all Federal, state
(unless it provides Weston with a Non-taxable Transaction Certificate), local
and other sales, use, income and all employment and other taxes applicable to
the fees paid to Consultant hereunder. Consultant agrees to indemnify and hold
Weston harmless from and against any and all claims and liability relating to
such taxes.
ARTICLE X. INDEPENDENT CONTRACTOR.
For all purposes in performing its services, Consultant shall be deemed to be an
independent contractor and as such, shall not be entitled to any benefits
applicable to the employees of Weston. The Consultant declares that it is
engaged in an independent business, that similar services are provided for other
clients, and Weston is not Consultant's sole and only client. Consultant shall
in no manner be deemed to be an agent or representative of Weston. Consultant
shall have no authority to bind or speak for Weston except as Weston may grant
specific written authority to Consultant to do so from time to time.
ARTICLE XI. INSURANCE.
Consultant shall maintain insurance at its own expense for services performed
hereunder. Such insurance shall include, but not be limited to, Comprehensive
General Liability ($300,000 Minimum), Professional Liability Errors and
Omissions ($300,000) and Automobile Liability (Bodily Injury and Property
Damage/$300,000 Minimum each). Certificates of insurance shall be provided to
Weston immediately upon request.
ARTICLE XII. WARRANTY.
Consultant warrants and represents that: (a) it possesses the expertise,
capability, equipment and personnel to properly and professionally perform the
services; (b) to the extent it is required to do so, it is properly and legally
licensed to perform the services; (c) it shall at all times in the performance
of such services comply with all applicable laws, ordinances and regulations;
(d) it shall perform all services in a good, workmanlike, professional,
efficient and non-negligent manner; and (e) it does not, as of the date of this
Agreement, and during the period of performance under this Agreement, shall not
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represent any competitor of Weston without first fully disclosing to Weston in
writing the scope of work and the name of such competitor.
ARTICLE XIII. INDEMNIFICATION.
Consultant agrees to indemnify and hold harmless Weston, its officers,
directors, agents and employees for any loss, including reasonable and actual
attorney's fees, costs or damages that Weston may incur as a result of the
negligent acts or omissions of the Consultant or the Consultant's employees or
agents.
Neither party shall be liable to the other for incidental, indirect or
consequential damages, except where such damages arise out of the gross
negligence or willful misconduct of the other party.
ARTICLE XIV. ASSIGNMENT.
This Agreement may not be assigned by Consultant, either in whole or in part,
without the prior written consent of Weston. Any attempted assignment shall be
null and void and without force and effect.
ARTICLE XV. DISPUTES.
Any dispute arising under this Agreement not settled by agreement of the
parties, including disputes arising as a result of termination, shall be decided
by litigation in a court of competent jurisdiction. Pending any decision,
appeal, suit, or claim pursuant to this Article, Consultant shall proceed
diligently with the performance of the work authorized under this Agreement.
ARTICLE XVI. SEVERABILITY.
Any provision or part of this Agreement held to be void or unenforceable under
any law or by any court shall be deemed stricken, and all remaining provisions
shall continue to be valid and binding upon the parties. The parties may reform
or replace such stricken provision or part thereof with a valid and enforceable
provision which expresses the intent of the stricken provision.
ARTICLE XVII. GOVERNING LAW.
This Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Pennsylvania, exclusive of the choice of law rules
thereof, as if wholly to be performed therein.
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ARTICLE XVIII. ENTIRE AGREEMENT.
This Agreement constitutes the sole and exclusive agreement of the parties
hereto and supersedes any prior understandings or written or oral agreements
between the parties. This Agreement may be amended only by a writing signed by
the Authorized Representative of each party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
RESOURCE ALTERNATIVES, INC. ROY F. WESTON, INC.:
(CONSULTANT) (WESTON)
By: _______s/_____________ By: s/
Dominic J. Monetta, D.P.A. Name: William L. Robertson
Title: President Title: Acting President and CEO
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SCHEDULE A
PERSONS PERFORMING THE SERVICES AND HOURLY RATES
NAME HOURLY RATE
- --------------------------------------------------------------------------
DR. DOMINIC J. MONETTA $312.50
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
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Exhibit 10.9
CONSULTING SERVICES AGREEMENT
THIS AGREEMENT is made and entered into as of the 23rd day of May, 1997 by and
between Roy F. Weston, Inc. ("Weston"), a Pennsylvania corporation having its
principal offices at 1 Weston Way, West Chester, Pennsylvania 19380 and William
Robertson ("Consultant") whose principal address is 8130 Crestridge Road,
Fairfax Station, VA 22039.
WHEREAS, Weston is in the business of providing environmental services to
private industry and governmental clients; and
WHEREAS, Consultant is in the business of providing organizational, executive
and administrative consulting services, and is, by reason of his knowledge,
education and expertise capable of performing the services described herein; and
WHEREAS, Weston's Board of Directors is currently conducting a search to fill a
vacancy in the office of President and Chief Executive Officer.
WHEREAS, Weston has determined that Consultant can provide interim executive
leadership pending completion of the Board of Director's search for a President
and Chief Executive Officer, and Consultant has agreed to serve as Acting
President and Chief Executive Officer subject to the terms and conditions of
this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual promises
contained herein, and other good and valuable consideration, the parties agree
as follows:
ARTICLE I. SCOPE OF CONSULTING SERVICES.
1. THE SERVICES. Subject to the terms and conditions of this Agreement,
Consultant shall serve as Acting President and Chief Executive Officer of
Weston. Such services are hereinafter referred to as the "Services." Consultant
shall perform the Services at Weston's West Chester, Pennsylvania corporate
campus and such other locations as may be appropriate. Weston shall provide
Consultant with an appropriate office at such
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corporate campus and with such secretarial and other assistance at such campus
as may be required for Consultant to furnish the Services. The Services shall
include the usual and customary duties of Weston's President and Chief Executive
Officer, including but not limited to those duties and responsibilities set
forth in Weston's By-Laws and required by applicable law. Consultant shall have
the full authority vested in Weston's President and Chief Executive Officer
under those By-Laws and applicable law.
2. TIME COMMITMENT. Consultant shall commit such time and resources as shall be
necessary to perform the Services as described herein, but in no event less than
four (4) days per week.
3. AUTHORIZED WESTON REPRESENTATIVE. Consultant shall report to, and abide by
the directions of, the Weston Board of Directors. William Mecaughey shall be the
"Weston Representative" under this Agreement.
4. RESTRICTION ON DELEGATION. All work hereunder shall be performed exclusively
by the Consultant. Nothing herein, however, shall restrict Consultant from
delegating such tasks and responsibilities as are usually, customarily and/or
necessarily delegated in carrying out the responsibilities of President and
Chief Executive Officer, provided such delegation is in accordance with the
policies and practices of Weston.
ARTICLE II. TERM; TERMINATION.
The initial term ("Initial Term") of this Agreement shall be for the three (3)
month period commencing May 23, 1997 and ending August 22, 1997. Thereafter the
term may be extended for successive month-to-month periods, beginning of the
23rd day of a month and ending on the 22nd day of the following month, upon the
mutual agreement of the parties. Each monthly extension of the term shall be
evidenced by a writing executed by the parties. After the Initial Term, this
Agreement may be terminated by either party upon giving fifteen (15) days'
written notice to the other. Weston may terminate this Agreement at any time if
Consultant breaches this Agreement or is unable to perform hereunder. Upon
termination of this Agreement, Consultant's fee shall be pro-rated, based on the
number of days Consultant has performed in relation to the total number of days
in the Initial Term or renewal period, as the case may be. The provisions of
Articles V., VI., VIII. and XIII shall survive the expiration or any termination
of this Agreement.
2
<PAGE> 3
ARTICLE III. CONSULTING FEE.
1. CONSULTING FEE. Weston shall pay Consultant a consulting fee of $30,000 per
month. Weston shall not provide Consultant with, and Consultant shall not be
entitled to receive from Weston, any employee benefits, including but not
limited to health insurance, life insurance, retirement benefits and the like,
customarily provided to employees of Weston under the terms of Weston's various
employee benefit programs.
2. EXPENSES. In the event Consultant is required to travel in connection with
the performance of his services hereunder, Weston shall reimburse Consultant for
such expenses incurred for travel and related food and lodging in accordance
with applicable Weston policies, and on the same basis as though Consultant were
an employee of Weston. All other expenses incurred by Consultant in the
performance of his duties under this Agreement shall be borne by Consultant.
ARTICLE IV. INVOICING AND PAYMENT.
1. INVOICES. Consultant shall submit invoices for completed services in a
form acceptable to Weston within ten (10) days following the end of each
monthly period in which he provides the Services. Invoices shall include the
following detail:
a. This Agreement number, Consultant's name, dates of service, and
number of hours worked each day.
b. A detailed list of expenses in a format reasonably acceptable to
Weston, together with copies of original documentation of such expenses.
Original invoices shall be submitted together with one copy to the Weston
Representative who shall approve such invoice upon reasonable satisfaction that
the Services have been satisfactorily performed.
2. PAYMENT. Payment shall be issued to Consultant within ten (10) days after
receipt and approval of each invoice. Weston shall have no obligation to
reimburse Consultant for any expenses incurred, or any services performed, in
violation of any law, Weston Business Ethics Policy or in contravention of this
Agreement.
3
<PAGE> 4
ARTICLE V. WORK PRODUCT.
1. OWNERSHIP OF WORK PRODUCT. All information, including, but not limited to,
all designs, processes, manuals, reports, computer data and related information,
first produced by Consultant for Weston in performing the Services shall be the
sole property of Weston. All such information shall be considered proprietary
information and shall be retained and used solely in accordance with the
provisions of this Agreement. To the extent any such information comprises work
susceptible to protection under applicable copyright laws, Consultant agrees
that such work shall be deemed "work made for hire" hereunder. In the event that
such work is determined not to be "work made for hire," this Agreement shall
operate as an irrevocable assignment by Consultant to Weston of the copyright in
the work, including all right, title and interest therein, in perpetuity.
2. INVENTIONS AND PATENTS. All inventions, improvements and discoveries, whether
patentable or not, first conceived, developed or reduced to practice by
Consultant, either alone or with others, in the course of the performance of the
Services, or as a consequence of Consultant's receipt of information hereunder,
shall be the sole property of Weston. All such inventions, improvements and
discoveries shall be promptly disclosed to Weston in writing. At Weston's
request and expense, Consultant agrees to (i) assist Weston in making
application for patents on such inventions, improvement and discoveries in the
United States and any foreign countries (ii) assign all such applications to
Weston or its designee without further charges, (iii) assist Weston in the
prosecution of any patent applications and the enforcement of any resulting
patents and (iv) execute any and all documents necessary for the accomplishment
of the foregoing.
4
<PAGE> 5
ARTICLE VI. CONFIDENTIALITY AND NON-SOLICITATION.
1. PROPRIETARY INFORMATION. All information received by Consultant in the course
of performing the Services, other than information publicly available or
publicly disclosed shall be deemed "Proprietary Information." Consultant shall
receive and retain all Proprietary Information in confidence and shall not
disclose such information to any person, except in the regular course of
performing the Services, without the express written authorization of Weston.
Consultant shall use Proprietary Information solely for the purpose of
performing his obligations hereunder and for no other purpose. Upon termination
of this Agreement, Consultant shall promptly return all Proprietary Information
to Weston, and will, if requested by Weston, execute a certificate warranting
that all Proprietary Information has been returned to Weston in accordance with
this Agreement.
2. RELATIONSHIP WITH WESTON. Consultant shall represent that he is
associated with Weston solely as "Acting President and Chief Executive
Officer" or "President and Chief Executive Officer" and in no other way.
3. NON-SOLICITATION OF EMPLOYEES. Consultant shall not, directly or indirectly,
from the date of this Agreement until two (2) years after termination of this
Agreement, solicit, hire or otherwise induce any Weston employee to leave the
employment of Weston; nor shall Consultant induce any Weston employee to become
an employee of, or otherwise become associated with, any company or business
other than Weston. This paragraph shall apply to inducement, hiring or
solicitation of any Weston employee regardless of position.
4. NON-SOLICITATION OF CLIENTS. Consultant will not, directly or indirectly,
from the date of this Agreement until two (2) years after termination of this
Agreement, solicit the trade or patronage, in competition with Weston, of any
Weston clients or of any prospective clients with whom Weston has pending
proposals. This restriction shall only apply to clients or prospective clients
with whom Consultant had direct or indirect contact during the pendency of this
Agreement.
5. RIGHT TO USE LIKENESS. Consultant hereby grants to Weston the absolute right
and permission to copyright and use, re-use and/or publish for lawful business
purposes, any
5
<PAGE> 6
photographic portraits or pictures of Consultant (and printed matter in
conjunction therewith) in which Consultant may be included in whole or in part,
or composite, for art, advertising or trade purposes.
ARTICLE VII. CONFLICTS OF INTEREST
1. REPRESENTATION CONCERNING CONFLICTS. Consultant hereby warrants and
represents that to the best of his knowledge and belief, and except as
previously disclosed to Weston's Board of Directors, there are no relevant facts
or circumstances which could give rise to an actual or potential conflict of
interest under this Agreement, and that Consultant has disclosed to the Weston
Board of Directors all information having any relevance to an actual or
potential conflict of interest.
2. DISCLOSURE. Consultant agrees that if an actual or potential conflict of
interest is discovered after execution of this Agreement, Consultant will make
full disclosure to Weston in writing. This disclosure shall include a
description of actions which Consultant has taken or proposes to take to avoid,
mitigate or neutralize the actual or potential conflict, and all actions taken
for such purposes shall be in consultation with Weston.
3. GOVERNMENT EMPLOYMENT. If Consultant was a former United States government
employee within five (5) years before the date of this Agreement, Consultant
agrees to furnish Weston all relevant information regarding any potential
conflict of interest.
ARTICLE VIII. RECORDS RETENTION.
Consultant shall retain all records documenting amounts invoiced to Weston under
this Agreement in legible form for a period of five (5) years from date of final
payment hereunder. Consultant authorizes Weston to inspect and audit these
records during business hours upon prior notice to Consultant. Except for
documentation of amounts invoiced to Weston described above, upon the
termination or expiration of this Agreement, Consultant shall immediately
deliver to Weston all documents relating in any way to the performance of the
Services.
ARTICLE IX. TAXES.
Consultant shall have sole responsibility for payment of all Federal, state
(unless it provides Weston with a Non-taxable Transaction Certificate), local
and other sales, use,
6
<PAGE> 7
income and all employment and other taxes applicable to the fees paid to
Consultant hereunder. Consultant agrees to indemnify and hold Weston harmless
from and against any and all claims and liability relating to such taxes.
ARTICLE X. INDEPENDENT CONTRACTOR.
For all purposes in performing its services, Consultant shall be deemed to be an
independent contractor and as such, shall not be entitled to any employee
benefits applicable to the employees of Weston. Consultant declares that he is
engaged in an independent business, that similar services are provided for other
clients from time to time, and Weston is not Consultant's sole and only client.
Consultant's authority to bind or speak for Weston shall be limited by Weston's
By-Laws and applicable law, and further limited and defined by the authority
granted by Weston's Board of Directors from time to time.
ARTICLE XI. INSURANCE.
Consultant shall maintain insurance at its own expense for services performed
hereunder. Such insurance shall include, but not be limited to, Comprehensive
General Liability ($300,000 Minimum), Professional Liability -- Errors and
Omissions ($300,000) and Automobile Liability (Bodily Injury and Property
Damage/$300,000 Minimum each). Certificates of insurance shall be provided to
Weston immediately upon request.
Consultant shall be covered, in his role as an officer of Weston, by Weston's
Directors and Officers Liability Insurance Policy.
ARTICLE XII. WARRANTY.
Consultant warrants and represents that: (a) he possesses the expertise,
capability, equipment and personnel to properly and professionally perform the
services; (b) to the extent he is required to do so, he is properly and legally
licensed to perform the services; (c) he shall at all times in the performance
of such services comply with all applicable laws, ordinances and regulations;
(d) he shall perform all services in a good, workmanlike, professional,
efficient and non-negligent manner; and (e) he does not, as of the date of this
Agreement, and during the period of performance under this Agreement, shall not
represent any competitor of Weston without first fully disclosing to Weston in
writing the scope of work and the name of such competitor and obtaining Weston's
written consent in
7
<PAGE> 8
advance of such representation. Consultant further warrants that he shall at all
times, while performing Services under this Agreement, comply with all of
Weston's Policies and Operating Practices.
Weston warrants that this Agreement has been duly approved by its Board of
Directors.
ARTICLE XIII. INDEMNIFICATION.
The standard of care required of Consultant in performing the Services shall be
as set forth in Weston's By-Laws and in applicable law. Consultant shall be
indemnified, in his capacity as an officer of Weston, in accordance with
Weston's By-Laws and applicable law.
ARTICLE XIV. ASSIGNMENT.
This Agreement may not be assigned by Consultant, either in whole or in part,
without the prior written consent of Weston. Any attempted or purported
assignment shall be null and void and without force and effect.
ARTICLE XV. DISPUTES.
Any dispute arising under this Agreement not settled by agreement of the
parties, including disputes arising as a result of termination, shall be decided
by litigation in a court of competent jurisdiction. Pending any decision,
appeal, suit, or claim pursuant to this Article, Consultant shall proceed
diligently with the performance of the work authorized under this Agreement.
ARTICLE XVI. SEVERABILITY.
Any provision or part of this Agreement held to be void or unenforceable under
any law or by any court shall be deemed stricken, and all remaining provisions
shall continue to be valid and binding upon the parties. The parties may reform
or replace such stricken provision or part thereof with a valid and enforceable
provision which expresses the intent of the stricken provision.
8
<PAGE> 9
ARTICLE XVII. GOVERNING LAW.
This Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Pennsylvania, exclusive of the choice of law rules
thereof, as if wholly to be performed therein.
ARTICLE XVIII. ENTIRE AGREEMENT. This Agreement constitutes the sole and
exclusive agreement of the parties hereto and supersedes any prior
understandings or written or oral agreements between the parties. This
Agreement may be amended only by a writing signed by an authorized
representative of each party.
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have
caused this Agreement to be executed by their duly authorized representatives.
WILLIAM ROBERTSON ROY F. WESTON, INC.
(CONSULTANT): (WESTON)
/s/ WILLIAM L. ROBERTSON BY: /s/
- -------------------------------- ---------------------------------
NAME: THOMAS N. HARVEY
-------------------------------
TITLE: CHAIRMAN OF THE BOARD
-------------------------------
9
<PAGE> 1
Exhibit 11
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------
1997 1996
---- ----
(Thousands of Dollars)
<S> <C> <C>
PRIMARY
- -------
Net loss $ (5,394) $ (670)
============ ============
Weighted average shares outstanding 9,644,466 9,511,548
============ ============
Net loss per share $ (.56) $ (.07)
============ ============
FULLY DILUTED
Net loss $ (5,394) $ (670)
ADD:
Interest on 7% Convertible Subordinated Debentures, net
of applicable income taxes 207 244
------------ ------------
Net loss for fully diluted net income per share $ (5,187) $ (426)
============ ============
Weighted average number of shares used in calculating
primary net loss per share 9,644,466 9,511,548
ADD:
Shares issuable upon conversion of 7% Convertible Sub-
ordinated Debentures 848,509 1,033,128
Stock options -- --
------------ ------------
Weighted average number of shares used in calculating fully
diluted net loss share 10,492,975 10,544,676
============ ============
Fully diluted net loss per share $ (.49) $ (.04)
============ ============
</TABLE>
<PAGE> 2
Exhibit 11
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1997 1996
---- ----
(Thousands of Dollars)
<S> <C> <C>
PRIMARY
Net loss $ (4,998) $ (653)
============ ============
Weighted average shares outstanding 9,651,794 9,541,188
============ ============
Net loss per share $ (.52) $ (.07)
============ ============
FULLY DILUTED
Net loss $ (4,998) $ (653)
ADD:
Interest on 7% Convertible Subordinated Debentures, net
of applicable income taxes 416 489
------------ ------------
Net loss for fully diluted net income per share $ (4,582) $ (164)
============ ============
Weighted average number of shares used in calculating
primary net loss per share 9,651,794 9,541,188
ADD:
Shares issuable upon conversion of 7% Convertible Sub-
ordinated Debentures 852,594 1,033,128
Stock options -- 1,492
------------ ------------
Weighted average number of shares used in calculating fully
diluted net loss per share 10,504,388 10,575,808
============ ============
Fully diluted net loss per share $ (.44) $ (.02)
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF JUNE 30, 1997 AND THE CONSOLIDATED STATEMENT OF
INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 9,274
<SECURITIES> 8,090
<RECEIVABLES> 72,177<F1>
<ALLOWANCES> 1,630
<INVENTORY> 0
<CURRENT-ASSETS> 103,145
<PP&E> 56,348
<DEPRECIATION> 45,773
<TOTAL-ASSETS> 131,409
<CURRENT-LIABILITIES> 47,326
<BONDS> 15,901
0
0
<COMMON> 1,165
<OTHER-SE> 60,334
<TOTAL-LIABILITY-AND-EQUITY> 131,409
<SALES> 0
<TOTAL-REVENUES> 117,257
<CGS> 0
<TOTAL-COSTS> 124,940
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 275
<INTEREST-EXPENSE> 825
<INCOME-PRETAX> (7,573)
<INCOME-TAX> (2,575)
<INCOME-CONTINUING> (4,998)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,998)
<EPS-PRIMARY> (.52)
<EPS-DILUTED> 0
<FN>
<F1>INCLUDES $18,954 OF UNBILLED COSTS AND ESTIMATED EARNINGS THEREON.
</FN>
</TABLE>
