<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Roy F. Weston, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
[WESTON LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 15, 2000
1400 Weston Way
West Chester, PA 19380-1499
April 5, 2000
TO ALL HOLDERS OF SHARES OF SERIES A COMMON STOCK AND
COMMON STOCK OF ROY F. WESTON, INC.
The 2000 annual meeting of the shareholders of Roy F. Weston, Inc. will
be held at the offices of the Company, 1400 Weston Way, West Chester,
Pennsylvania, on May 15, 2000, at 11:00 a.m. local time, to consider and take
action on the following matters:
(1) Election of 11 directors to serve for the ensuing year and
until their successors shall have been duly chosen and
qualified.
(2) Such other business as may properly be brought before the
meeting.
The Board of Directors has fixed March 15, 2000 as the record date for
the meeting, and only shareholders of record at the close of business on that
date will be entitled to notice of and to vote at the meeting and any
adjournment or postponement of the meeting. All shareholders are cordially
invited to attend the meeting in person.
A proxy statement is set forth on the following pages, and a proxy card
is enclosed.
PLEASE COMPLETE, SIGN, DATE, AND RETURN THE PROXY IN THE ENCLOSED
POSTAGE-PAID RETURN ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN
PERSON. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR
SHARES IN PERSON.
By Order of the Board of Directors,
Arnold P. Borish
Corporate Secretary
<PAGE> 3
PROXY STATEMENT
FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
GENERAL INFORMATION
Roy F. Weston, Inc. (referred to as the "Company" or "We") is
furnishing this proxy statement to shareholders of the Company in connection
with the solicitation of proxies by the Company to be used at the annual meeting
of shareholders to be held at the Company's principal executive offices at 11:00
a.m. on May 15, 2000 and at any adjournment or postponement thereof. The
Company's principal executive offices are located at 1400 Weston Way, West
Chester, Pennsylvania 19380-1499.
We are mailing this proxy statement and the accompanying proxy card to
shareholders on or about April 5, 2000. We will pay the expense of this
solicitation. In addition to solicitation by mail, some officers, directors, and
regular employees of the Company may solicit proxies by telephone or in person,
for which they will not be separately compensated.
A shareholder may revoke his or her proxy at any time before it is
exercised, by giving written notice of such revocation, or by delivering a
properly executed proxy bearing a later date, to the Corporate Secretary of the
Company. In addition, a shareholder who attends the annual meeting in person may
vote by ballot at the meeting, thereby revoking any proxy previously given. A
shareholder will not revoke a proxy merely by attending the meeting; to revoke a
proxy a shareholder must take one of the foregoing actions. The persons named in
the enclosed proxy card will vote as directed in the proxy. In the absence of
such direction, the persons named in the enclosed proxy card will vote as stated
below with respect to the election of directors. As to other items of business
that may arise at the meeting, they will, subject to the applicable rules of the
Securities and Exchange Commission (the "SEC"), vote in accordance with their
best judgment.
At the close of business on March 15, 2000 (the "Record Date"), the
Company had outstanding 2,089,019 Common Shares and 7,875,121 Series A Common
Shares. Each share of Common Stock ("Common share") outstanding on the Record
Date will entitle the holder to one vote, and each share of Series A Common
Stock ("Series A share") outstanding on the Record Date will entitle the holder
to one-tenth of one vote, on each matter to be acted upon at the meeting. The
presence, in person or by proxy, of shareholders entitled to cast at least a
majority of the votes entitled to be cast by all shareholders of record as of
the Record Date will constitute a quorum for the conduct of business at the
meeting. Shareholders do not have cumulative voting rights in the election of
directors. Nominees for director must receive a plurality of the votes cast at
the meeting to be elected. Neither abstentions nor broker non-votes are counted
in determining the number of votes cast at the meeting.
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1. ELECTION OF DIRECTORS
NOMINEES FOR DIRECTOR
The first proposal on the agenda for this year's annual meeting will be
to elect eleven directors to serve for a one-year term and until their
respective successors are elected and qualified. The persons named in the
enclosed proxy card intend to vote for the nominees for director named below.
Each nominee has consented to being nominated and to serve if elected. If any
nominee should subsequently decline or be unable to serve, the persons named in
the proxy card will vote for the election of such substitute nominee, if any, as
may be named by the Board of Directors.
The following sets forth certain information with respect to the
nominees for director, each of whom is currently a director of the Company.
Except as otherwise stated, each of the nominees has been engaged in his or her
principal occupation described below during the past five years, and none of the
organizations or corporations in which the nominees worked was a parent,
subsidiary or other affiliate of the Company.
RICHARD L. ARMITAGE, 54, PRESIDENT, ARMITAGE ASSOCIATES, L. C.
(DIRECTOR SINCE 1997). Ambassador Armitage is engaged in a wide range of
international business development and public policy activities. He currently
provides his professional services to private sector companies to develop
strategic business opportunities. Ambassador Armitage previously served the
United States in numerous diplomatic roles throughout the world, with particular
emphasis in the Pacific Rim, Middle East, and the New Independent States. He has
also served as Assistant Secretary of Defense for International Security
Affairs. Ambassador Armitage currently serves as a director of CACI
International, Inc.
JESSE BROWN, 56, PRESIDENT AND CHIEF EXECUTIVE OFFICER, BROWN AND
ASSOCIATES. (DIRECTOR SINCE 1997). Mr. Brown formed Brown and Associates, a
consulting firm, in 1997, following 25 years of professional experience in
administrative and executive positions in the public sector. From 1993 to July
1997, he served as Secretary for the United States Department of Veterans
Affairs. In this capacity he oversaw the second largest Federal Department, with
a budget of more than $39 billion and more than 240,000 employees. Mr. Brown
currently serves as a Director of Maximus, Inc.
THOMAS E. CARROLL, 56, PRESIDENT AND CHIEF EXECUTIVE OFFICER, MEDIQ
INCORPORATED. (DIRECTOR SINCE 1998). Mr. Carroll has worked in the health care
industry for 32 years. In 1990 he was appointed Executive Vice President and
Chief Operating Officer of MEDIQ/PRN, a wholly owned subsidiary of MEDIQ
Incorporated. In 1994, he was named President of MEDIQ/PRN. Since 1995, Mr.
Carroll has served as President and Chief Executive Officer of MEDIQ
Incorporated, which is engaged in the medical equipment rental business. He
currently serves as a director of MEDIQ Incorporated.
TOM HARVEY, 51, CHIEF EXECUTIVE OFFICER, A-55, INC. (DIRECTOR SINCE
1997). Mr. Harvey has served as Chief Executive Officer of A-55, Inc., a leading
fuel technology company, since July 1999. He was President of A-55, Inc. from
February 1998 through July 1999. He also serves as Chairman of the Global
Environment & Technology Foundation, a non-profit corporation that he founded,
which promotes environmental technology development and commercialization, and
sustainable development. Mr. Harvey is also Chairman of Global Initiatives, Inc.
and GlobeQuest International, Ltd., two private-sector firms engaged in the
communications and international marketing businesses, respectively. Previously,
he held a number of senior-level positions in the U.S. Army, Department of
Defense, White House, and Congressional offices.
WAYNE F. HOSKING, JR., ESQ., 34, GOVERNMENT RELATIONS DIRECTOR, ROY F.
WESTON, INC. (DIRECTOR SINCE 1996). Mr. Hosking has been employed by the Company
since 1988. Since 1990, he has held various positions in client services,
marketing, and sales capacities. In his current position he manages the
Company's Washington, D.C. office. Mr. Hosking is licensed to practice law in
Colorado and the District of Columbia. He is the son-in-law of A. Frederick
Thompson, and is married to the granddaughter of Roy F. Weston, who is also the
niece of Katherine W. Swoyer.
WILLIAM L. ROBERTSON, J.D., M.P.A., 54, CHIEF EXECUTIVE OFFICER.
(DIRECTOR SINCE 1998). Mr. Robertson served as President and Chief Executive
Officer of the Company from May 1997 to May 1998, as Chairman and Chief
Executive Officer from May 1998 to May 1999, and as Chief Executive Officer
since May 1999. Before joining the Company, he advised corporations and
municipalities on business development opportunities in the environment and
technology sectors. From 1996 to 1997, Mr. Robertson was Chairman and founder of
a software development firm, OneSoft, Inc. From 1993 to 1995, he served as
President of Global Environment & Technology Foundation, a non-profit
corporation that promotes environmental technology development and
commercialization, and sustainable development. Before 1993, Mr. Robertson
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spent over 20 years in various sectors of the U.S. Department of Defense,
including the U.S. Army Corps of Engineers, representing the U.S. government on
a wide variety of international and domestic issues.
KATHERINE W. SWOYER, 52, TRAVEL CONSULTANT. (DIRECTOR SINCE 1992;
VICE-CHAIRMAN OF THE BOARD OF DIRECTORS FROM 1997 TO MAY 1999; CHAIRMAN OF THE
BOARD OF DIRECTORS SINCE MAY 1999). From 1994 to 1998, Ms. Swoyer was the owner
and president of International Corporate Travel Services, Inc. ("Intercorp"), a
travel agency. She is presently an independent travel consultant. She is the
daughter of Roy F. Weston, the sister-in-law of A. Frederick Thompson, the
mother of Thomas M. Swoyer, Jr. and the aunt of the wife of Wayne F. Hosking,
Jr.
THOMAS M. SWOYER, JR., 29, OPERATIONS MANAGER, SAN ANTONIO TX OFFICE,
ROY F. WESTON, INC. (DIRECTOR SINCE 1996). Mr. Swoyer presently serves as
Operations Manager for the Company's San Antonio, Texas office and as a Client
Service Manager, with responsibility for the Company's marketing initiative
along the border between the United States and Mexico. During 1991 to 1998, he
held the positions of Junior Marketing Analyst and Market Development
Professional in the Strategic Marketing and Proposal Management Departments of
the Company as well as Client Service Manager in the Company's Southern
Division. Mr. Swoyer is the grandson of Roy F. Weston, the son of Katherine W.
Swoyer and the late Thomas M. Swoyer, former President of the Company from 1984
to 1989, and the nephew of A. Frederick Thompson.
A. FREDERICK THOMPSON, PH.D., P.E., 58, PROGRAM DIRECTOR, ENVIRONMENTAL
TECHNOLOGY, NATIONAL SCIENCE FOUNDATION. (DIRECTOR SINCE 1975). Dr. Thompson
assumed his current position with the National Science Foundation in 1997.
Previously, he served as Chairman of the Board of Directors of the Company from
October 1991 to March 1996, Vice Chairman from 1989 to 1991, and Executive Vice
President from 1987 to 1990. Dr. Thompson is the son-in-law of Roy F. Weston,
the father-in-law of Wayne F. Hosking, Jr., the brother-in-law of Katherine W.
Swoyer, and the uncle of Thomas M. Swoyer, Jr.
ROY F. WESTON, P.E., DEE, 88, RETIRED, ROY F. WESTON, INC. (DIRECTOR
SINCE 1957). Mr. Weston is the founder and Chairman Emeritus of Roy F. Weston,
Inc. He served as Chairman of the Board of Directors from March 1996 to July
1996. He was Chairman Emeritus from October 1991 to March 1996 and resumed his
role in that capacity in July 1996. Mr. Weston served as Chairman of the Board
of Directors and Chief Executive Officer of the Company for more than 35 years.
He is the father of Katherine W. Swoyer, the father-in-law of A. Frederick
Thompson, the grandfather of the wife of Wayne F. Hosking, Jr., and the
grandfather of Thomas M. Swoyer, Jr.
JAMES H. WOLFE, 67, CERTIFIED PUBLIC ACCOUNTANT. (DIRECTOR SINCE 1998).
From 1968 through 1994, Mr. Wolfe was a partner in the accounting and consulting
firm of Coopers & Lybrand L.L.P., where he was responsible for overseeing the
firm's professional services to many of its largest clients and served as
Regional Director of Accounting, Auditing and SEC Consulting. Since his
retirement from Coopers & Lybrand L.L.P. on December 31, 1994, he has been
providing accounting and financial consulting services to selected corporations
and other organizations.
ORGANIZATION OF THE BOARD OF DIRECTORS
The Board of Directors held 9 meetings during 1999. Each incumbent
director attended at least 75% of the aggregate of all meetings of the full
Board of Directors and of all committees of the Board of Directors on which he
or she served.
Set forth below is information regarding certain of the committees of
our Board of Directors. The Board of Directors does not have standing nominating
or compensation committees.
The Executive Committee held 7 meetings during 1999. Its voting members
are Katherine W. Swoyer (Chairman), Richard L. Armitage, Thomas E. Carroll, Tom
Harvey and Roy F. Weston. William L. Robertson is a non-voting member of the
Executive Committee. Subject to certain limitations, the Executive Committee can
exercise the powers and authority of the Board of Directors in the intervals
between Board of Directors' meetings. The Executive Committee also establishes
the compensation of executive officers of the Company and recommends to the
Board of Directors nominees for election as directors of the Company.
The Audit Committee held 5 meetings during 1999. Its members are Roy F.
Weston (Chairman), Jesse Brown, Wayne F. Hosking, Jr., Thomas M. Swoyer, Jr., A.
Frederick Thompson and James H. Wolfe. The Audit Committee recommends annually
to the Board of Directors a firm of independent accountants for appointment as
auditors of the Company, reviews and approves the fees paid to the independent
accountants, and reviews with the independent accountants
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the scope and results of each annual audit and the recommendations made by the
independent accountants, the Company's internal audit department and the
Company's financial officer. The Audit Committee also reviews related party
transactions.
COMPENSATION OF DIRECTORS
The non-executive Chairman of the Board receives an annual retainer of
$45,000. Each other director who is not an officer of the Company receives an
annual retainer equal to $12,000. The retainer is payable quarterly and is paid
in cash unless the director is required to participate or has elected to
participate in the Roy F. Weston Director Stock Compensation Plan (the "Director
Plan").
The Director Plan was approved by the Company's shareholders on May 10,
1999, and became effective on that date. Under the Director Plan all directors
who hold fewer than 25,000 shares of the Company's stock (including both Series
A shares and Common shares) must be paid their quarterly retainer in Series A
shares, valued on the date that is 10 days after the day on which the Board's
regular quarterly meeting is held. A director who holds more than 25,000 shares
of the Company's stock may elect to participate in the Director Plan by
notifying the Company before the later of ten days after the most recent annual
meeting of shareholders or ten days after he or she first becomes a director.
All directors who are not officers of the Company also receive
$1,500 plus travel expenses for each Board meeting they attend and for each
Committee meeting they attend that is not held on the same day as a meeting of
the Board. Fees payable to a director who is a non-officer employee of the
Company are reduced by that director's employee salary for the days that
director attends a meeting of the Board or a Board Committee.
2. OTHER BUSINESS
Management of the Company does not currently plan to bring any other
business before the meeting, and has not been informed of any other matters that
are to be presented at the meeting. If any such business is properly presented,
however, the persons named in the enclosed proxy card will, subject to the
applicable rules of the SEC, vote in accordance with their best judgment.
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PRINCIPAL SHAREHOLDERS
The table below sets forth, as of March 15, 2000, certain information
regarding the beneficial ownership of the Common shares and Series A shares by
each person known by the Company to beneficially own more than 5% of any class
of the Company's capital stock, each of the Company's directors and director
nominees, each of the executive officers of the Company named in the Summary
Compensation Table appearing later in this Proxy Statement, and all directors
and executive officers of the Company as a group. Unless otherwise noted, the
persons named in the table have sole voting and investment power with respect to
all of the shares owned by each of them.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF NUMBER OF PERCENTAGE PERCENTAGE PERCENTAGE AGGREGATE
COMMON SHARES SERIES A OF CAPITAL OF COMMON OF SERIES A VOTING
NAME AND ADDRESS (1) (2)(20) SHARES(2)(11) STOCK SHARES SHARES POWER (3)(20)
-------------------- ------- ------------- ----- ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C>
Vanguard Fiduciary Trust Company, as
Trustee (4) 967,973 9.7 -- 12.3 3.4
Heartland Advisors, Inc. (5) -- 990,000 9.9 -- 12.6 3.4
Franklin Advisory Services, LLC (6) -- 625,000 6.3 -- 7.9 2.2
The TCW Group, Inc. (7) -- 540,800 5.4 -- 6.9 1.9
Dimensional Fund Advisors, Inc. (8) -- 390,600 3.9 -- 5.0 1.4
RFW Partnership Limited (9) 438,081 -- 4.4 21.0 -- 15.2
Katherine W. Swoyer and Susan W
Thompson, as Trustees (10) 162,111 -- 1.6 7.8 -- 5.6
William L. Robertson -- 59,400 * -- * *
Patrick G. McCann -- 44,460 * -- * *
William G. Mecaughey (12) -- 26,589 * -- * *
Richard L. Armitage (13) -- 3,258 * -- * *
Jesse Brown -- 3,258 * -- * *
Thomas E. Carroll -- 4,258 * -- * *
Tom Harvey -- 5,658 * -- * *
Wayne F. Hosking, Jr. (10)(14) 103,181 9,679 1.1 4.9 * 3.6
Katherine W. Swoyer (9)(10)(15) 429,976 872 4.3 20.6 * 15.0
Thomas M. Swoyer, Jr. (10)(16) 89,672 1,456 * 4.3 * 3.1
A. Frederick Thompson (9)(10)(17) 386,338 3,103 3.9 18.5 * 13.4
Roy F. Weston (9)(18) 190,000 39,151 2.3 9.1 * 6.7
James H. Wolfe -- 3,258 * -- * *
All directors and
executive officers as
a group (19) 1,799,359 204,400 20.1 86.1 2.6 63.3
</TABLE>
* Less than 1%.
(1) Except as indicated below, the business address of each
beneficial owner is c/o Roy F. Weston, Inc., 1400 Weston Way,
West Chester, PA 19380-1499.
(2) A beneficial owner of securities is one who, directly or
indirectly, has or shares with others: (a) the power to vote
or direct the voting of such securities or (b) investment
power with respect to such securities, which includes the
power to dispose or direct the disposition of such securities.
A person is deemed to be a beneficial owner of a security if
that person has the right to acquire beneficial ownership of
such security within 60 days of March 15, 2000, including, but
not limited to, the right to acquire through the exercise of
any option, warrant, or right or through the conversion of a
security.
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(3) Aggregate voting power is calculated by multiplying the total
number of Common shares and Series A shares outstanding by one
vote and one-tenth of one vote per share, respectively.
(4) Vanguard Fiduciary Trust Company, P.O. Box 2900, Valley Forge,
PA 19482, is the trustee under the Roy F. Weston, Inc.
Retirement Savings Plan ("Retirement Savings Plan"). Under the
terms of the Retirement Savings Plan and the Trust Agreement
between Vanguard and the Company, a Company committee,
appointed by the Board of Directors, has the right to direct
the trustee how to vote the shares held by the trustee.
Currently, the committee consists of Wayne F. Hosking, Jr.,
Katherine W. Swoyer, Thomas M. Swoyer, Jr. and Roy F. Weston.
(5) Reflects ownership as reported on a Schedule 13G, dated
January 27, 2000, filed with the SEC by Heartland Advisers,
Inc., 789 North Water Street, Milwaukee, WI 53202. This
Schedule 13G states that Heartland Advisers, Inc. had sole
dispositive power over 990,000 Series A shares, as an
investment adviser.
(6) Reflects ownership as reported on a Schedule 13G, dated
January 27, 2000, filed with the SEC by: Franklin Advisory
Services, LLC, One Parker Plaza, Sixteenth Floor, Fort Lee, NJ
07024; Franklin Resources, Inc., 777 Mariners Island Blvd.,
San Mateo, California 94404, as parent holding company; and
Charles B. Johnson and Rupert H. Johnson, Jr., 777 Mariners
Island Blvd., San Mateo, California 94404, as Principal
Shareholders of Franklin Resources, Inc. This Schedule 13G
states that Franklin Advisory Services, LLC, as investment
advisor, has sole voting and dispositive power over 625,000
Series A shares.
(7) Reflects ownership as reported on a Schedule 13G, dated
February 11, 2000, filed with the SEC by The TCW Group, Inc.,
865 South Figueroa Street, Los Angeles, CA 90017 and Robert
Day, 865 South Figueroa Street, Los Angeles, CA 90017. This
Schedule 13G states that The TCW Group, Inc. and Robert Day
(an individual who may be deemed to control the TCW Group)
share voting and dispositive power over 540,800 Series A
shares.
(8) Reflects ownership as reported on a Schedule 13G, dated
February 11, 2000, filed with the SEC by Dimensional Fund
Advisors, Inc., 1299 Ocean Avenue, 11th Floor, Santa Monica,
CA 90401. This Schedule 13G states that Dimensional Fund
Advisors, Inc., as investment advisor, has sole voting and
dispositive power over 390,600 Series A shares.
(9) RFW Partnership Limited is a limited partnership in which RFW
Enterprises, Inc., Susan W. Thompson, and Katherine W. Swoyer
are general partners. Mrs. Thompson and Mrs. Swoyer are the
daughters of Roy F. Weston, and Mrs. Thompson is the wife of
Dr. A. Frederick Thompson. Mr. Weston is the President of RFW
Enterprises, Inc., which is owned in equal one-third shares by
Mr. Weston, Mrs. Thompson and Mrs. Swoyer. Under the
partnership agreement, the shares held by the partnership are
voted by direction of a majority of the general partners.
(10) Mrs. Swoyer and Mrs. Thompson share voting power, as trustees
under a Deed of Trust dated March 5, 1969, over 162,111 Common
shares. Thomas M. Swoyer, Jr., a beneficiary of the trust, is
entitled to distribution of 13,509 Common shares from the
trust on each of his 30th and 35th birthdays. Jennifer T.
Hosking, a beneficiary of the trust who is married to Wayne F.
Hosking, Jr., is entitled to distribution of 13,509 Common
shares from the trust on her 35th birthday. A minor daughter
of Mrs. Swoyer is one of the trust beneficiaries and is
entitled to distribution of 13,509 Common shares from the
trust on each of her 25th, 30th and 35th birthdays. The
trustees of the trust have agreed that the trustees will vote
the trust shares as may be directed by the adult beneficiaries
of the trust, and that if those instructions are conflicting,
they will vote the trust shares pursuant to such instructions,
allocating the votes on a pro rata basis based on the adult
beneficiaries' respective beneficial ownership interests in
the trust. None of the shares reported in the Table as
beneficially owned by the trust is included in the shares
listed as beneficially owned by Mr. or Mrs. Hosking, Mr.
Swoyer, Jr., Mrs. Swoyer or Dr. Thompson.
(11) Includes the following number of Series A shares which may be
obtained upon the exercise of options exercisable within 60
days of March 15, 2000: Mr. Robertson, 47,800 shares, Mr.
McCann, 36,960 shares and Mr. Mecaughey, 17,706 shares; and
all directors and executive officers as a group, 102,466
shares.
(12) Mr. Mecaughey's shares include 1,275 shares owned by his wife.
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(13) All of the shares reported for Ambassador Armitage are owned
by Armitage Associates, L.C., a limited liability company in
which Ambassador Armitage holds an interest. Ambassador
Armitage disclaims beneficial ownership of these shares.
(14) Of the Common shares reported as beneficially owned by Mr.
Hosking, 103,181 shares are owned by his wife and 1 share is
owned by his wife as custodian for their minor child. Of the
Series A shares reported as beneficially owned by Mr. Hosking,
155 shares are owned by his wife, 4,700 shares are owned by
his wife as custodian for their minor child, and 1,944 shares
are owned jointly by Mr. Hosking and his wife.
(15) Of the Common shares reported as beneficially owned by Ms.
Swoyer, 76,163 shares are registered in Ms. Swoyer's name as
custodian for her minor daughter.
(16) Of the Series A shares reported as beneficially owned by Mr.
Swoyer, 658 shares are owned by his wife.
(17) Of the Common shares reported as beneficially owned by Dr.
Thompson, 341,083 shares are owned by his wife.
(18) Of the Common shares reported as beneficially owned by Mr.
Weston, 70,000 shares are owned by his wife.
(19) In determining the number of shares held by officers and
directors as a group, shares beneficially owned by more than
one officer or director have been counted only once.
(20) All Common shares included in the table are held subject to a
Stock Pooling Agreement among the Company and certain holders
of the Company's Common shares, including all Common
shareholders listed in the Table. In any vote of the Company's
shareholders, all Common shares held by the parties to the
Stock Pooling Agreement will be voted in accordance with the
expressed will of the owners of a majority of those Common
shares. The parties to the Stock Pooling Agreement, most of
whom are members of the family of Roy F. Weston, hold more
than ninety-nine percent of the issued and outstanding Common
shares, representing approximately seventy-two percent of the
total voting power of all outstanding shares of the Company.
The Stock Pooling Agreement was effective January 2, 1998, and
is for a five-year period unless terminated sooner in
accordance with its provisions. The Stock Pooling Agreement
places certain transfer restrictions on the Common shares held
by the parties to the agreement and also provides, in certain
circumstances, for the Company to exchange those Common shares
for an equal number of Series A shares.
EXECUTIVE MANAGEMENT
EXECUTIVE OFFICERS
Officers are elected annually and hold office until their successors
are elected and qualified. The current executive officers of the Company are:
WILLIAM L. ROBERTSON, J.D., M.P.A., 54, CHIEF EXECUTIVE OFFICER. (See
biographical information under the heading "ELECTION OF DIRECTORS" above.)
PATRICK G. MCCANN, 46, PRESIDENT AND CHIEF OPERATING OFFICER. Mr.
McCann joined the Company in October 1996 as Executive Vice President, Strategic
Development. He became Chief Operating Officer on June 1, 1997 and President on
May 18, 1998. From 1984 to 1996, Mr. McCann was with Chemical Waste Management,
an environmental services company based in Oak Brook, IL. From 1995 to 1996, he
was President of Advanced Environmental Technical Services, a Chemical Waste
Management affiliate. From 1993 to 1995, Mr. McCann was President of the
Technical Services Division of Chemical Waste Management. From 1991 to 1993, he
was a Vice President of Chemical Waste Management.
WILLIAM G. MECAUGHEY, CPA, 44, VICE PRESIDENT, CHIEF FINANCIAL OFFICER,
AND TREASURER. Mr. Mecaughey joined the Company in 1991 as Vice President and
Corporate Controller. He has served as Chief Financial Officer since May 1997
and became Treasurer in July 1997. Before joining the Company, he was a senior
manager with Ernst & Young LLP, an international accounting firm.
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EXECUTIVE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Set out below is the report of the Executive Committee of the Board
(the "Committee") on executive compensation. The report outlines the principal
components of the Company's executive officer compensation programs in 1999 and
describes the basis for the Chief Executive Officer's ("CEO") 1999 compensation.
Executive Officer Compensation Policy
The Company's compensation philosophy is to ensure that executive
compensation is aligned with the interests of the shareholders and directly
linked to measurable improvements in corporate performance and increases in
shareholder value focusing on:
- A total compensation package, which is competitive with other
companies in the same industry and is designed to attract and
retain key executives.
- Compensation programs which are integrated with the Company's
annual and long-term objectives.
- Compensation opportunities which are directly linked with the
performance of the Company.
Compensation Program Components
Annual Compensation: The 1999 annual compensation of the Company's
executive officers was composed primarily of two elements: a base salary and a
cash incentive component. The cash incentive component is provided under the
Company's Pay for Performance (PFP) program (formerly known as the Salary at
Risk (SAR) program). An executive officer's total cash compensation was equal to
his base salary plus the PFP component. Each executive officer has a PFP
Guideline amount that is equal to a percentage of the executive officer's base
salary (known as the PFP Guideline percentage). In 1999, the executive officers'
PFP Guideline percentages ranged from 35% to 50% of their base salary. In
establishing an executive officer's base salary and PFP Guideline percentage,
the Company seeks to create the opportunity for an executive officer to earn
cash compensation within the competitive range offered at comparable companies
of similar size and complexity. In determining appropriate cash compensation
levels, the Committee used data provided by the Company's Human Resources staff.
In preparing this data, the Human Resources staff obtained and utilized
compensation surveys and comparative analyses of compensation data.
An executive officer is paid his annual base compensation throughout
the year. An executive officer's actual PFP payments, which are made on a
quarterly basis, depend on the Company's financial performance as measured by
certain objective financial performance criteria. During 1999, the most heavily
weighted corporate financial performance criteria were corporate profit (before
tax) earned during the year, and annual sales bookings. Other criteria were
corporate revenue and billing/cash collection efficiency. These criteria, which
included minimum, target and above-target levels, were approved by the Board of
Directors as part of the Company's annual operating plan budget. If the Company
fails to meet the minimum corporate financial performance goals, an executive
officer will receive no PFP incentive compensation. If the Company achieves its
target corporate financial performance goals, an executive officer will be paid
half of his PFP Guideline amount. If the Company achieves its above-target
corporate financial performance goals, an executive officer will receive his
full PFP Guideline amount and his total cash compensation should be commensurate
with the cash compensation provided to similarly situated executive officers at
comparable companies. The PFP program has no maximum incentive amount, and an
executive officer can receive more than his PFP Guideline amount if the Company
exceeds its above target corporate financial performance goals.
Long Term Incentive Compensation: In September 1998 the Committee began
a review of the Company's long term incentive compensation arrangements for
senior management. The Committee was assisted in this review by outside
compensation experts. As a result of this review the Board of Directors, on
April 1, 1999, approved a new long term incentive compensation program for the
Company's executive officers and other members of the Company's senior
management (the "senior management long term incentive compensation program").
The principal components of this program are stock options and a cash award that
is linked to increases in the Company's share price. Under this program, in 1999
each executive officer received:
(a) A stock option, granted at fair market value on the grant date,
which will vest in 20% annual increments, on the anniversary of the date of
grant, beginning one year after the date of grant. These options will also vest,
to the extent not previously vested, upon a change in control of the Company;
and
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<PAGE> 11
(b) A stock appreciation right ("SAR"), payable in cash, that vests in
25% increments on April 1 of 2001, 2002, 2003 and 2004, equal to the product of
(i) the difference between $2.50 and the exercise price of each outstanding
option (for which the exercise price exceeds $2.50) held by the executive
officer and (ii) the number of shares subject to each such option, provided
that, with respect to a given vesting date for a given option, if the closing
market price of the Company's Series A shares has not equaled or exceeded the
exercise price of such option in the 12-month period immediately before such
vesting date (the "measurement period'), then the amount of the cash SAR award
will be reduced to the product of (i) the positive difference, if any, between
$2.50 and the highest closing market price of the Series A shares during such
measurement period and (ii) the number of shares subject to such option. The
cash SAR is payable regardless of whether the underlying option is exercised and
vested, upon a change in control of the Company. The SAR has a maximum value of
$30,500 in the case of Mr. Robertson, and $136,500 and $64,746, in the case of
Messrs. McCann and Mecaughey, respectively.
In addition, the vesting schedule was amended in respect of certain
stock options that were granted in 1997. The vesting schedule in those options
had been based on incremental, sustained increases in the market price of Series
A shares, with an outside vesting date nine years after the date of grant (or,
to the extent not previously vested, upon a change in control of the Company).
Under the amended schedule, these options will vest in 20% increments, on the
anniversary of the date of the amendment, beginning one year after the date of
the amendment. These options will also continue to vest, to the extent not
previously vested, upon a change in control of the Company.
The Committee believes that the senior management long term incentive
compensation program will better align the compensation of the Company's
executive officers with the goal of increasing the value of the Company's stock,
and will also help to ensure that the Company's compensation arrangements are
competitive in the markets in which the Company operates.
Chief Executive Officer Compensation
Annual Compensation: Mr. Robertson's base salary was increased from
$275,000 to $288,756 on March 27, 1999. This increase was based on market
factors, including comparison with chief executive officer base salary at other
relevant companies. During 1999, Mr. Robertson's PFP Guideline percentage was 50
percent of his base salary. His actual 1999 PFP payment totaled $70,812, which
was 25% of the base salary paid to him during 1999. Mr. Robertson's 1999 PFP
payment was based entirely on the Company's actual financial performance, as
measured against the PFP corporate financial performance criteria described
above in this Committee Report. The Committee believes that these criteria
reflect the level of success of strategies designed and implemented under Mr.
Robertson's leadership in order to lead to long-term increases in shareholder
value. During 1999, the Company increased sales and revenue, as it continued to
invest in new strategic initiatives and more efficient and effective internal
financial and communication tools. Since the beginning of 1998, the Company has
enjoyed eight straight profitable quarters for the first time since 1992. The
Company, in 1999, met or exceeded its target corporate contribution goal, target
revenue goal and target sales goal, but did not meet its minimum
billing/collection efficiency goals.
Long Term Incentive Compensation: In addition to Mr. Robertson's annual
compensation, in 1997 Mr. Robertson was granted two options to purchase the
Company's Series A shares. One of these options was for 22,000 shares and vests
in 20% annual increments, beginning one year after the date of grant. The other
option was for 100,000 shares and contained incremental vesting provisions that
were principally dependent on sustained increases in the market price of the
Series A shares. Each of the options has an exercise price of $2.75, which was
the market price of Series A shares on the date the options were granted. Under
the senior management long term incentive compensation program approved by the
Board of Directors on April 1, 1999 (and which is described earlier in this
Committee Report), Mr. Robertson received:
(a) A stock option grant for 95,000 shares of the Company's Series A
shares. This option will vest in 20% annual increments on April 1 of each year,
beginning in 2000. This option will also fully vest, to the extent not
previously vested, upon a change in control of the Company. The exercise price
for this option is $2.44, which was the closing price of the Company's Series A
Stock on the date of grant. In addition, the vesting schedule was amended for
the option for 100,000 shares that had been granted to him in 1997. Under the
amended schedule, the options will vest in 20% annual increments on April 1 of
each year, beginning in 2000. This option will also continue to vest, to the
extent not previously vested, upon a change in control of the Company; and
(b) A SAR with a maximum potential cash payment of $30,500, which is
equal to (i) the difference between $2.50 and the $2.75 exercise price of the
options granted to Mr. Robertson in 1997; multiplied by (ii) 122,000 (the number
of shares subject to those options). The SAR award will vest in 25% increments
on April 1 of each year, beginning in 2001.
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<PAGE> 12
The SAR will also vest, to the extent not previously vested, upon a change in
control of the Company. The full vested portion of the SAR will be payable only
if the closing market price of the Company's Series A shares equals or exceeds
$2.75 during the 12 months before the vesting date.
Submitted By the Voting Members of the Executive Committee of the Board
of Directors:
Katherine W. Swoyer, Chair
Richard L. Armitage
Thomas E. Carroll
Tom Harvey
Roy F. Weston
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ended December 31,
1999, 1998, and 1997, the cash compensation paid by the Company as well as
certain other compensation paid or accrued for those years, to the chief
executive officer and all other executive officers of the Company whose cash
compensation in 1999 exceeded $100,000 ( together, the "named executive
officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------------
ANNUAL COMPENSATION (1) AWARDS PAYOUTS
---------------------------------------- ----------------------------------------------
SECURITIES
OTHER UNDERLYING
ANNUAL RESTRICTED OPTIONS/SARS ALL OTHER
NAME AND COMPEN- STOCK (OPTIONS/ LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS (2) SATION AWARDS SARS) PAYOUTS SATION(3)
- ------------------ ---- ------ --------- ------ ------ ----- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William L. Robertson 1999 $285,053 $70,812 N/A $0 95,000/122,000 $0 $9,748
Chairman and Chief 1998 $275,000 $82,500 N/A $0 0/0 $0 $3,564
Executive Officer 1997 $146,636 $12,580 N/A $0 122,000/0 $0 $128,719
Patrick G. McCann 1999 $207,308 $77,248 N/A $0 60,000/81,600 $0 $9,748
President and Chief 1998 $200,000 $90,000 N/A $0 0/0 $0 $9,832
Operating Officer 1997 $196,154 $40,940 N/A $0 63,600/0 $0 $0
William G. Mecaughey 1999 $140,115 $24,376 N/A $0 30,000/33,965 $0 $9,748
Chief Financial 1998 $143,634 $28,350 N/A $0 0/0 $0 $9,832
Officer and Treasurer 1997 $116,191 $14,291 N/A $0 28,765/0 $0 $5,381
</TABLE>
(1) The Company has omitted in the Summary Compensation Table, as
to each named executive officer, information concerning the
value of perquisites and other personal benefits which, in the
aggregate, do not exceed the lesser of $50,000 or 10% of the
total salary and bonus reported for the named executive
officer.
(2) Includes amounts paid under the Company's Pay for Performance
program (formerly known as the Salary-at-Risk program).
(3) Includes (a) for Mr. Robertson, in 1997, $54,870 in fees and
expenses paid to him for his services as Acting President and
Chief Executive Officer under his consulting agreement with
the Company and $73,849 in relocation expenses; and (b) for
Mr. Mecaughey, in 1997, 1998 and 1999, and for Mr. Robertson
and Mr. McCann in 1998 and 1999, amounts contributed by the
Company under the Company's Retirement Savings Plan.
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<PAGE> 13
STOCK OPTION GRANTS, EXERCISES AND HOLDINGS AND SAR GRANTS
OPTION AND SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information about grants of
options to purchase, and stock appreciation rights ("SARs") tied to the price
of, Series A shares in the last fiscal year to the named executive officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------
PERCENT OF TOTAL
OPTIONS/SARS
NUMBER OF SECURITIES GRANTED EXERCISE OR GRANT DATE
UNDERLYING TO EMPLOYEES IN BASE EXPIRATION PRESENT
OPTIONS/SARS GRANTED 1999 PRICE DATE VALUE (4)(5)
(OPTIONS (1)/ (OPTIONS/ (OPTIONS/ (OPTIONS/ (OPTIONS/
NAME SARS(2)) SARS) SARS) SARS(3)) SARS)
- ---- -------- ----- ----- -------- -----
<S> <C> <C> <C> <C> <C>
William L. Robertson 95,000/122,000 23.17/3.78 $2.44/$2.50 4/01/09/ -- $138,700/ --
Patrick G. McCann 60,000/81,600 14.63/14.69 $2.44/$2.50 4/01/09/ -- $ 87,600/ --
William G. Mecaughey 30,000/33,965 7.32/6.97 $2.44/$2.50 4/01/09/ -- $ 43,800/ --
</TABLE>
(1) The options vest in 20% annual increments beginning on April
1, 2000 (the first anniversary of the date of grant) and, to
the extent not previously vested, will fully vest upon a
change in control of the Company.
(2) The number of securities underlying SARs granted in 1999 for
each of the named executive officers is equal to the number of
Series A shares underlying the stock options that each such
officer currently holds. The SARs were granted April 1, 1999
under the Company's senior management long term incentive
compensation program. The cash amount payable to each named
executive officer vests in 25% increments on April 1 of 2001,
2002, 2003 and 2004, and is equal to the product of (i) the
difference between $2.50 and the exercise price of each
outstanding option (the exercise price of which exceeds $2.50)
held by the named executive officer and (ii) the number of
shares subject to each such option, provided that, with
respect to a given vesting date for a given option, if the
closing market price of the Company's Series A shares has not
equaled or exceeded the exercise price of such option in the
12-month period immediately before such vesting date (the
"measurement period'), then the amount of the cash award will
be reduced to the product of (i) the positive difference, if
any, between $2.50 and the highest closing market price of the
Series A shares during such measurement period and (ii) the
number of shares subject to such option.
(3) The expiration date of each SAR granted to a named executive
officer is the expiration date of each option currently held
by the officer, to which such SAR relates. The options held by
the named executive officers are grouped by expiration date as
follows:
<TABLE>
<CAPTION>
Number of Options Expiration Date
----------------- ---------------
<S> <C> <C>
William L. Robertson 122,000 7/14/07
Patrick G. McCann 18,000 10/7/06
3,600 2/18/07
60,000 11/17/07
William G. Mecaughey 1,600 2/14/04
1,600 2/13/05
2,000 2/26/06
2,000 2/18/07
26,675 11/17/07
</TABLE>
(4) Grant date present values of the options reported in the table
were calculated using the Black-Scholes method of option
valuation. The actual value, if any, that an executive officer
may receive is dependent on the excess of the stock price over
the exercise price. Use of this model should not be viewed as
a forecast of the future
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<PAGE> 14
performance of the Company's stock price. The grant date
present values were calculated based on grant date stock price
and exercise prices being equivalent, and the following
assumptions:
<TABLE>
<CAPTION>
<S> <C>
Grant Date Present Value $1.46
Term of Option 10 Years
Risk-Free Interest Rate 5.3%
Dividend Yield 0
Stock Price Volatility 47.2%
</TABLE>
The risk-free interest rate is estimated based on the yields
on seven-year and ten-year treasury bonds with a constant
maturity as of the option grant date. The stock price
volatility is calculated using the standard deviation of
monthly returns on Series A stock over the eight-year period
immediately preceding the grant date.
(5) Grant Date present values of the SARs reported in the table
were calculated using the Black-Scholes method of option
valuation (based on the same assumptions set forth in footnote
4). The grant date present value of each SAR was determined by
reference to the stock option to which each such SAR relates,
as follows:
<TABLE>
<CAPTION>
Expiration Date Grant Date Present
Number of Options of Options Value of SARs
----------------- ---------- -------------
<S> <C> <C> <C>
William L. Robertson 122,000 7/14/07 $ 6,830
Patrick G. McCann 18,000 10/7/06 $ 7,398
3,600 2/18/07 907
60,000 11/17/07 18,960
William G. Mecaughey 1,600 2/14/04 $ 1,096
1,600 2/13/05 814
2,000 2/26/06 850
2,000 2/18/07 504
26,675 11/17/07 8,429
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN 1999 AND DECEMBER 31, 1999 OPTION/SAR VALUES
The following table sets forth certain information regarding the number
and value, as of December 31, 1999, of unexercised options to purchase Series A
shares and SARs held by the named executive officers. None of the named
executive officers exercised any stock options or SARs during 1999.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY OPTIONS/SARS AT
UNEXERCISED OPTIONS/SARS AT DECEMBER 31, 1999
DECEMBER 31, 1999 (1) (OPTIONS/SARS) (OPTIONS/SARS)
------------------------------------ -------------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William L. Robertson 0 N/A 8,800/0 208,200/122,000 $0/0 $0/0
Patrick G. McCann 0 N/A 12,240/0 129,360/81,600 $0/0 $0/0
William G. Mecaughey 0 N/A 5,586/0 58,379/33,965 $0/0 $0/0
</TABLE>
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<PAGE> 15
(1) Includes options for 100,000 shares held by Mr. Robertson, 60,000
shares held by Mr. McCann and 25,000 shares held by Mr. Mecaughey, for which the
vesting term was amended in 1999, as described earlier in the Executive
Committee Report on Executive Compensation.
PENSION AND RETIREMENT PLANS
The Company has a defined benefit Retirement Income Plan (the
"Retirement Plan"), which was frozen effective June 30, 1997. The Retirement
Plan covers all employees of the Company and of certain subsidiaries who, as of
June 30, 1997, had attained 21 years of age and completed at least one year of
service. The Retirement Plan provides a monthly retirement income benefit. For
each year before June 30, 1997 that an employee was a participant, he or she
accrued a benefit equal to 1.15% of his compensation for such year up to 75% of
the Social Security wage base, plus 1.5% of compensation in excess of 75% of the
Social Security wage base. Compensation is defined as a participant's regular
earnings from base salary, overtime and incentives. All contributions to the
Retirement Plan are made by the Company, and vesting occurs upon a participant's
completion of 5 years of service, the attainment of age 65, or upon disability.
Benefits are paid following the participant's retirement after age 60 and, in
some instances, upon the death of the participant.
The annual Retirement Plan pension benefit payable on a straight life
annuity basis at normal retirement date (age 65) to Mr. Mecaughey is $8,330. No
other named executive officer is entitled to any benefits under the Retirement
Plan.
INSURANCE AND SUPPLEMENTAL RETIREMENT BENEFITS
The Company has purchased a last-to-die insurance policy on the lives
of Roy F. Weston and his spouse, in the amount of $4 million. The Company is the
beneficiary of this policy. The Company has exercised a premium offset option
under this policy and the 1999 premium of $259,355 has been offset against
policy dividends. The cumulative cash surrender value of the policy, as of
December 2, 1999, was $2,305,151, the full amount of which was borrowed by the
Company as of that date.
Each of the named executive officers and certain other senior officers
of the Company participate in the Company's Executive Supplemental Benefit Plan
(the "Executive Plan"). Under the Executive Plan, upon the death of a
participant, the Company will pay a death benefit to the participant's
designated beneficiary. Upon the retirement of the participant, supplemental
retirement benefits will be paid to the participant for a 15-year period. The
amount of the death benefit is based on a determination previously made by the
Company's former Compensation Committee. The supplemental retirement benefit is
based on that determination and the participant's years of participation in the
Executive Plan. The estimated annual supplemental retirement benefit under the
Executive Plan, payable upon retirement at age 65, is $42,000 for Mr. Robertson,
$42,000 for Mr. McCann and $34,500 for Mr. Mecaughey.
Ms. Swoyer received from the Company a pre-retirement death benefit,
pursuant to the terms of the Executive Plan in which her late husband, Thomas M.
Swoyer, participated. Mr. Swoyer was the president of the Company at the time of
his death in 1989. In 1999, the Company paid Ms. Swoyer $73,846, representing
the final payment to her under the Executive Plan.
AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
Employment Agreements: The Company has entered into Employment
Agreements with Messrs. Robertson, McCann and Mecaughey (the "executive
officers"), dated March 20, 2000. Each of these agreements amends and restates
prior employment agreements with the executive officers. In general, these
employment agreements provide for the following:
(i) Cash compensation - Messrs. Robertson, McCann and
Mecaughey are to be paid a base salary of $303,194, $260,000 and
$147,680, respectively, subject to periodic review by the Board of
Directors. Each executive officer is also entitled to receive certain
fringe benefits and to participate in the Company's Pay for Performance
incentive compensation program ("PFP"), with a PFP guideline percentage
that will annually provide 30% of base salary for Messrs. Robertson and
McCann, and 17.5% of base salary for Mr. Mecaughey, if the Company
meets its target financial performance criteria established in the
annual operating plan budget approved by the Board of Directors. The
PFP program is described above in the Executive Committee Report on
Executive Compensation ("Executive Compensation Report").
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<PAGE> 16
Each executive officer will also receive a cash bonus in the event of a
change in control of the Company on or before July 31, 2001, based on
the highest amount of consideration received or receivable by a holder
of the Company's Common shares or Series A shares with respect to the
shares of each such class in connection with the change in control
transaction (the "Per Share Price"), including the value of any Common
shares or Series A shares retained by the holder.
If payment of all or a part of the Per Share Price is conditioned on
events occurring after the change in control, the Company is obligated
to pay the change in control bonus, or portion thereof, only when and
if such condition has expired. The cash bonus is paid to the executive
officer only if (i) he was employed by the Company at the time of the
change in control or (ii) within six months before the change in
control, the Company terminated his employment neither for cause nor
due to his death or disability and the Company was engaged in active
negotiations with the party or parties to the change in control within
60 days before such termination.
(ii) Employment termination - Each executive officer is
employed at will. If an executive officer's employment is terminated by
the Company for any reason other than for cause, death or disability,
or if he resigns his employment for good reason (which includes a
material change in his responsibilities, duties or authority; a salary
decrease; geographic relocation of his principal working location to a
place more than 50 miles from West Chester, PA; or his resignation
within 30 days after a change in control of the Company) he will be
entitled to severance payments in the amount of his monthly
compensation, for twelve months in the case of Messrs. Robertson and
McCann, and for nine months in the case of Mr. Mecaughey. Upon such
resignation or termination, each executive officer will also be
entitled to continuation of certain fringe benefits and to payment of
amounts earned under the Company's PFP program or any applicable
replacement incentive program. The receipt of such severance benefits,
fringe benefits and amounts under the PFP or other programs is
conditioned on the executive officer's execution and delivery to the
Company of a comprehensive release. Such payments to the executive
officer, plus the value of any non-cash benefits payable, will not
exceed the maximum amount that the Company could pay to executive
officers without subjecting the executive officers to the excise tax
under sections 280G and 4999 of the Internal Revenue Code of 1986.
(iii) Restrictions on Competition - After employment with the
Company ends, certain restrictions are placed on competition by Messrs.
Robertson and McCann for a period of 365 days, and on Mr. Mecaughey for
a period of 274 days. If an executive officer's employment is
terminated for any reason other than for cause or by reason of his
disability or if he resigns his employment for good reason, the
non-compete period is extended to 730 days for Messrs. Robertson and
McCann, and to 548 days for Mr. Mecaughey. In return for the extended
non-compete period, in such circumstances the executive officer would
be entitled to receive his monthly compensation for an additional
period following his last monthly severance payment described above.
For Messrs. Robertson and McCann, the additional period is twelve
months. For Mr. Mecaughey, the additional period is nine months.
Under the terms of Mr. McCann's prior employment agreement he was
entitled, during 1998 and 1999, to receive special quarterly PFP incentive
payments equal to 50% of his regular quarterly PFP payment, if identified
corporate profitability goals for the quarter were achieved. His employment
agreement also provided for payment, in 2000, of a one-time retention bonus of
$100,000 if annual corporate profitability goals for both 1998 and 1999 were
achieved, and if he remained as Chief Operating Officer of the Company through
December 31, 1999. Each of the special quarterly PFP incentive payments and the
one-time retention bonus was earned by Mr. McCann pursuant to the terms of the
Agreement.
In December 1997, the Company and Mr. Robertson entered into an
Elective Deferred Compensation Agreement, under which Mr. Robertson has elected
to defer $100,000 of his compensation in each of 1998, 1999 and 2000. An
election to defer compensation must be made before January 1 of the year in
which a deferral is to apply. Deferred funds are treated as though invested in
one or more investment funds and are to be distributed to Mr. Robertson in one
lump sum on the earlier of a date the Company selects (i) in January 2001 or
(ii) in the calendar month following termination of Mr. Robertson's employment
by the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, no voting member of the Executive Committee (which serves
as the Company's compensation committee for executive officers) was an officer
or employee of the Company or any of its subsidiaries. Since May 1998, Mr.
Robertson has served as a non-voting member of the Executive Committee, and does
not participate in Executive Committee discussions concerning his compensation.
Described below are certain transactions between the Company and persons who
served on the Executive Committee.
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<PAGE> 17
Roy F. Weston previously served as Chairman of the Board, President and
Chief Executive Officer of the Company. In 1997, Mr. Weston and the Company
entered into a Continuing Services/Retirement Agreement. Under this agreement
Mr. Weston retired from active employment by the Company, but agreed to remain
as Chairman Emeritus of the Company and to assist the Board of Directors and the
Company's officers and employees. The agreement provides that until his death he
will receive an annual principal retirement benefit calculated in the same
manner as his salary payment was calculated under a prior employment agreement
with the Company, and this benefit will continue to be paid to his wife in the
event that he predeceases her. The Continuing Services/Retirement Agreement also
provides that Mr. Weston will continue to receive the fringe benefits he
received under the prior employment agreement. The Continuing
Services/Retirement Agreement also requires the Company's Board of Directors to
use its best effort to nominate Mr. Weston and cause his election to the Board
of Directors, subject to any legal requirements. If Mr. Weston is not elected to
the Board, he will become an ex-officio member of the Board of Directors,
subject to any legal requirements. Pursuant to the Continuing
Services/Retirement Agreement, $293,458 was paid to or for the benefit of Mr.
Weston by the Company during 1999. Mr. Weston also received 3,258 shares of
Series A stock under the Roy F. Weston, Inc. Director Stock Compensation Plan
during 1999.
Katherine W. Swoyer is President and sole shareholder of International
Corporate Travel Services, Inc. ("Intercorp"), a travel services business that
provided services to the Company from 1994 through June 30, 1998. Under a three
year agreement, effective January 2, 1996, Intercorp provided these services in
return for an annual management fee of $550,000, less all commissions, fees, and
other payments received by Intercorp from any travel service vendor/provider in
respect of Company-related travel up to a specified maximum amount determined by
reference to anticipated annual travel volume. All such commissions, fees, and
other payments were paid to the Company. Because of the reduction in the number
of Company employees since 1996, and the accompanying decrease in the Company's
travel, in 1998 the Company and Intercorp agreed to an early termination of the
Intercorp agreement, in return for payment by the Company of an early
termination fee of $150,000, payable in three $50,000 installments on June 30 of
1998, 1999 and 2000. In 1999, the net payment by the Company to Intercorp under
this early termination agreement was $50,000. To assist in the operation of the
Company's travel requirements, and to retain continuity in its travel services,
the Company entered into a consulting services agreement (the "Consulting
agreement") with Ms. Swoyer, under which she agreed to provide the Company with
travel management consulting services designed to assist in the transition to
internal travel management and to better control the Company's travel costs.
Under the Consulting agreement, which has a term of three years, Ms. Swoyer
receives an annual retainer of $125,000 and certain incentive fees, up to a
maximum of $25,000 annually, based on reductions in the Company's travel
management costs. During 1999, the Company paid Ms.
Swoyer $150,000 under the Consulting agreement.
OTHER RELATIONSHIPS AND RELATED TRANSACTIONS
Wayne F. Hosking, Jr. is employed by the Company as Government
Relations Director. In 1999, Mr. Hosking was paid $108,094 in salary and
incentive payments, including $13,103 for relocation expenses (plus regular
employee benefits), and not including his compensation for service as a
director.
Jennifer Hosking is the wife of Wayne F. Hosking, Jr., the daughter of
A. Frederick Thompson, the granddaughter of Roy F. Weston and the niece of
Katherine W. Swoyer. Until October 1, 1999 she was employed by the Company as a
Principal Business Professional. During 1999 she was paid $48,725 in salary and
$38,527 in relocation costs by the Company (plus regular employee benefits).
The Infrastructure Revitalization Institute ("IRI") is a 501(c)3 not
for profit organization whose mission is to promote infrastructure redevelopment
as the sustainable choice for growing businesses and communities. Since October
1, 1999, Jennifer Hosking has served as the paid Executive Vice-President of
IRI. Jesse Brown, a director of the Company serves as an unpaid member of the
Board of Directors of IRI. On August 9, 1999, those members of the Company's
Board of Directors who are neither members of the family of Roy F. Weston nor
have any affiliation with IRI authorized the Company to enter into a Master
Services Agreement with IRI for the performance of certain program development
services and to contribute $50,000 to the IRI. This approval was given subject
to the following: (a) rates for the performance of services under the Master
Services Agreement must be competitive, fair and reasonable; and (b) any task
orders that the Company issues to IRI that involve payment for services for
which the Company will not be fully reimbursed by the Company's clients, may be
issued only with the approval of the Company's chief executive officer or chief
operating officer, and may not exceed, in the aggregate, $200,000 during the
twelve months following August 9, 1999, unless further approved by the Board of
Directors. The Company has contributed $50,000 to IRI and, on November 11, 1999,
entered into the Master Services Agreement. Pursuant to the Master Services
Agreement, IRI has performed certain program development services for the
Company, for which the Company has paid IRI $41,434.79 through February 29,
2000.
15
<PAGE> 18
Melissa Kalucki is the daughter of A. Frederick Thompson, the
granddaughter of Roy F. Weston, the sister-in-law of Wayne F. Hosking, Jr., and
the niece of Katherine W. Swoyer. She is employed by the Company as a Financial
Manager. During 1999, she was paid $48,108 in salary (plus regular employee
benefits).
Thomas Kalucki is the son-in-law of A. Frederick Thompson, the
brother-in-law of Wayne F. Hosking, Jr. and the spouse of Melissa Kalucki. He
was employed by the Company during 1999 as a Proposal Administrator and was paid
$40,150 in salary (plus regular employee benefits). He left the Company's employ
on December 22, 1999.
Thomas M. Swoyer, Jr., is employed by the Company as Office Manager of
the Company's San Antonio, Texas office and as a Client Service Manager. During
1999 he was paid $59,095 in salary and incentive payments (plus regular employee
benefits), not including his compensation for service as a director.
Jennifer Swoyer is the spouse of Thomas M. Swoyer, Jr. and the
daughter-in-law of Katherine W. Swoyer. During 1999, the Company employed her as
a temporary Proposal Administrator, for which she was paid $6,233 in salary.
Thomas C. Lewis, Mr. Robertson's brother-in-law, was employed by the
Company as Vice President and Manager, Knowledge Systems and Solutions Group.
Mr. Lewis left the Company's employ on October 15, 1999. During 1999, he was
paid $136,289 in salary and incentive payments (plus regular employee benefits).
The Company entered into an Investment and Partnering Agreement (the
"Essential Agreement"), effective December 21, 1999, with Essential
Technologies, Inc. ("Essential"). Thomas C. Lewis is Vice President - CFO of
Essential. Under the Essential Agreement, the Company sold Essential certain
computer hardware, software and web-site assets and entered into a strategic
alliance agreement with Essential in exchange for (i) the right to purchase
certain warrants for Essential stock during 2000 and (ii) a one year $30,000
promissory note from Essential. The computer hardware that was sold to Essential
was purchased by the Company during 1999 for $45,018. The software and web-site
assets that were sold to Essential were purchased by the Company in March 1998
for $150,000. Determination of the sale price of these assets was based on their
book value and the fact that the Company was unable to profitably use the
software and web-site assets. The determination of the sale price of these
assets was made jointly by Vincent Laino, Vice President and Chief Information
Officer of the Company and William L. Robertson.
16
<PAGE> 19
PERFORMANCE GRAPH
The following performance graph compares the performance of the
Company's Series A shares (NASDAQ symbol: WSTNA), for the last five years, to
the Russell 2000 Index and to a peer group of companies in the environmental
services industry that we have constructed, consisting of EA Engineering Science
and Technology, Inc., Ecology & Environment, Inc., GZA Geoenvironmental Tech,
Inc., Harding Lawson Associates Group, Inc., IT Group, Inc., Tetra Tech, Inc.,
TRC Companies, Inc. and Versar, Inc. The graph assumes that the value of an
investment in the Company's Series A shares and each index was $100 at December
31, 1994 and that all dividends were reinvested. The stock price performance in
the graph below is not indicative of future price performance.
[LINE GRAPH]
COMPARATIVE FIVE-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
NAME 1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Roy F. Weston, Inc. 100.00 89.13 60.87 70.66 47.83 35.88
Russell 2000 Index 100.00 128.44 149.55 182.75 177.76 209.46
Peer Group 100.00 94.20 83.40 111.30 134.86 124.46
</TABLE>
17
<PAGE> 20
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP ("PWC"), independent accountants, served as
the independent auditors of the Company for the year ended December 31, 1999,
and have been selected to serve as the independent auditors of the Company for
the year ending December 31, 2000. A representative of PWC will be in attendance
at the annual meeting and will have the opportunity to make a statement and to
respond to appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
Proposals submitted by shareholders for inclusion in the Board of
Directors' Proxy Statement and proxy for the 2001 annual meeting of shareholders
must be received by the Corporate Secretary of the Company no later than
December 1, 2000, and must comply in all other respects with applicable rules
and regulations of the Securities and Exchange Commission relating to such
inclusion. Proposals submitted by shareholders outside of the process described
in Rule 14-a-8 of the Securities Exchange Act of 1934, as amended (the "Act"),
for the 2001 annual meeting must be received by February 25, 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Act requires directors and certain officers of the
Company and persons or entities having beneficial ownership of more than 10% of
the Series A shares to file under the Act reports of beneficial ownership and
reports of changes in beneficial ownership. Based solely on review of the
reports and amendments thereto under Section 16(a) of the Act furnished to the
Company during its most recent fiscal year, the Company believes that all
reports were filed on a timely basis, except for the following: (1) a Form 5
filed by Mr. Mecaughey in February 1998 inadvertently omitted a description of
an option grant to Mr. Mecaughey for 1,765 Series A shares, which was described
on pages 12-13 of the Company's Proxy Statement dated April 10, 1998; This grant
was included in the Form 5 filed by Mr. Mecaughey in February 2000 and (2) the
Form 5 filed by each of Messrs. Robertson, McCann and Mecaughey in February 2000
inadvertently omitted the grant of certain SARs described in the "Summary
Compensation" table and the "Option and SAR Grants In Last Fiscal Year" table in
this proxy statement; amendments to each such Form 5 were filed in March 2000.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report for 1999, containing financial
statements for the year ended December 31, 1999, is being furnished with this
Proxy Statement to each shareholder of record at the close of business on March
15, 2000.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
EXCLUDING CERTAIN EXHIBITS THERETO, MAY BE OBTAINED, WITHOUT CHARGE, UPON
WRITTEN REQUEST DELIVERED TO WILLIAM G. MECAUGHEY, CHIEF FINANCIAL OFFICER AND
TREASURER, ROY F. WESTON, INC., 1400 WESTON WAY, WEST CHESTER, PENNSYLVANIA
19380-1499. COPIES OF EXHIBITS MAY BE OBTAINED FROM THE SAME ADDRESS UPON
WRITTEN REQUEST.
By Order of the Board of Directors,
Arnold P. Borish
Corporate Secretary
April 5, 2000
18
<PAGE> 21
ROY WESTON COMMON
ROY F. WESTON, INC.
COMMON STOCK
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS MAY 15, 2000
The undersigned hereby appoints William G. Mecaughey and Arnold P.
Borish as proxies, each with the power to appoint a substitute, and hereby
authorizes them, or any of them, to represent and to vote, as designated
on the reverse side, all the shares of Common Stock of Roy F. Weston, Inc.
held of record by the undersigned on March 15, 2000, at the Annual
Meeting of Shareholders to be held on May 15, 2000, or any adjournment
thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE VOTE, SIGN ON REVERSE SIDE AND RETURN PROMPTLY.
<PAGE> 22
ROY WESTON COMMON
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
ROY F. WESTON, INC.
COMMON STOCK
MAY 15, 2000
[arrow] Please Detach and Mail in the Envelope Provided [arrow]
- --------------------------------------------------------------------------------
A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
WHICH RECOMMENDS A VOTE FOR PROPOSAL 1.
FOR AGAINST NOMINEES: R.L. Armitage
J.L. Brown
1. ELECTION OF [ ] [ ] T.E. Carroll
DIRECTORS T. Harvey
W.F. Hosking, Jr.
W.L. Robertson
FOR, EXCEPT VOTES AGAINST THE K.W. Swoyer
FOLLOWING NOMINEE(S): T.M. Swoyer, Jr.
A. F. Thompson
R. F. Weston
J.H. Wolfe
___________________________ THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER(S). IF NO
DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSAL 1.
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY IN THE ENCLOSED ENVELOPE.
COMMON STOCK
SIGNATURE______________ DATE_____ SIGNATURE__________________________ DATE______
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee, guardian, or in any other
representative capacity, please so indicate.
<PAGE> 23
ROY WESTON COMMON
ROY F. WESTON, INC.
SERIES A COMMON STOCK
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS MAY 15, 2000
The undersigned hereby appoints William G. Mecaughey and Arnold P.
Borish as proxies, each with the power to appoint a substitute, and hereby
authorizes them, or any of them, to represent and to vote, as designated
on the reverse side, all the shares of Series A Common Stock of Roy F.
Weston, Inc. held of record by the undersigned on March 15, 2000, at the
Annual Meeting of Shareholders to be held on May 15, 2000, or any
adjournment thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE VOTE, SIGN ON REVERSE SIDE AND RETURN PROMPTLY.
<PAGE> 24
ROY WESTON COMMON
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
ROY F. WESTON, INC.
SERIES A COMMON STOCK
MAY 15, 2000
[arrow] Please Detach and Mail in the Envelope Provided [arrow]
- --------------------------------------------------------------------------------
A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS WHICH
RECOMMENDS A VOTE FOR PROPOSAL 1.
FOR AGAINST NOMINEES: R.L. Armitage
J.L. Brown
1. ELECTION OF [ ] [ ] T.E. Carroll
DIRECTORS T. Harvey
W.F. Hosking, Jr.
W.L. Robertson
FOR, EXCEPT VOTES AGAINST THE K.W. Swoyer
FOLLOWING NOMINEE(S): T.M. Swoyer, Jr.
A. F. Thompson
R. F. Weston
J.H. Wolfe
THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE
___________________________ MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER(S). IF NO
DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSAL 1.
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY IN THE ENCLOSED ENVELOPE.
SERIES A COMMON STOCK
SIGNATURE______________ DATE_____ SIGNATURE__________________________ DATE______
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee, guardian, or in any other
representative capacity, please so indicate.
