<PAGE>
===============================================================================
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
------
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
------
EnviroSource, Inc.
(Name of Registrant as Specified in Its Charter)
EnviroSource, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ / 125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid.
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
(Bulletin No. 161. 02-03-95)
===============================================================================
<PAGE>
ENVIROSOURCE, INC.
Five High Ridge Park
P.O. Box 10309
Stamford, CT 06904-2309
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 20, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
ENVIROSOURCE, INC., a Delaware corporation (the "Company"), will be held at the
offices of Credit Lyonnais New York Branch, 1301 Avenue of the Americas, 19th
Floor, New York, New York, on Thursday, June 20, 1996 at 10:00 A.M. (local
time), for the following purposes:
1. To elect three members of Class A of the Board of Directors.
2. To ratify and approve the amendment and restatement of the Company's
Certificate of Incorporation in order to eliminate provisions which are, or
will be, of no further force or effect.
3. To ratify and approve the selection of Ernst & Young LLP as the
Company's independent public accountants for the fiscal year ending December
31, 1996.
4. To transact such other and further business as may properly come before
the meeting or any adjournment or adjournments thereof.
Holders of record of shares of the Company's Common Stock or Class G
Preferred Stock at the close of business on April 22, 1996 are entitled to
notice of and to vote at the meeting. A complete list of the Company's
stockholders will be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours for ten days prior to the
meeting at the offices of American Stock Transfer & Trust Company, 40 Wall
Street, 46th Floor, New York, New York. The list will also be produced and kept
at the time and place of the meeting and may be inspected by any stockholder who
is present.
A copy of the Company's 1995 Annual Report to Stockholders is enclosed
herewith.
By Order of the Board of Directors
/s/ CHRISTINA E. HUBEN
------------------------------------
CHRISTINA E. HUBEN
Secretary
Dated: April 29, 1996
<PAGE>
ENVIROSOURCE, INC.
Five High Ridge Park
P. O. Box 10309
Stamford, CT 06904-2309
------
PROXY STATEMENT
For Annual Meeting of Stockholders
to be held on June 20, 1996
------
April 29, 1996
To the Stockholders:
This Proxy Statement is furnished to you in connection with the Annual
Meeting of the Stockholders (the "Annual Meeting") of EnviroSource, Inc., a
Delaware corporation (the "Company"), and the related solicitation by the
Board of Directors of the Company of Proxies in the accompanying form, to be
held at the offices of Credit Lyonnais New York Branch, 1301 Avenue of the
Americas, 19th Floor, New York, New York, on Thursday, June 20, 1996 at 10:00
A.M. (local time) and at any subsequent time that may be necessary by the
adjournment thereof.
If you were a holder of record of shares of the Company's Common Stock or
Class G Preferred Stock at the close of business on April 22, 1996, you are
entitled to vote at the Annual Meeting. If you cannot be present at the
Annual Meeting in person, a form of Proxy is enclosed, which the Board of
Directors requests you to execute and return as soon as possible. A Proxy can
be revoked at any time before it is voted, in person at the Annual Meeting,
by executing and submitting a new Proxy that is dated a date after the Proxy
to be revoked or by delivery of a duly executed written statement to that
effect addressed to the Secretary of the Company.
As of the close of business on April 22, 1996, there were outstanding and
entitled to vote at the Annual Meeting 40,209,844 shares of Common Stock,
$.05 par value (the "Common Stock"), and 1,300 shares of Class G $7.25
Cumulative Convertible Preferred Stock, $.25 par value (the "Class G
Preferred Stock"). Each share of Common Stock and Class G Preferred Stock is
entitled to one vote. In the event of a "broker non-vote" with respect to any
issue coming before the meeting, arising from the absence of authorization by
the beneficial owner to vote as to that issue, the Proxy will be counted as
present for purposes of determining the existence of a quorum but will not be
deemed as present and entitled to vote as to that issue for purposes of
determining the total number of shares required for adoption.
All stockholders are urged to fill in, sign, date and mail the enclosed
Proxy. If mailed in the United States in the enclosed envelope, no postage is
required. The prompt return of your Proxy to vote your shares of Common Stock
or Class G Preferred Stock will save the Company the expense of further
communication. If you attend the Annual Meeting and vote in person, the Proxy
will not be used.
The Proxy Statement and the Proxies in the accompanying form are first
being sent to stockholders on or about May 3, 1996.
PROXIES
THE PERSONS NAMED IN THE ACCOMPANYING PROXY INTEND TO VOTE PROXIES FOR THE
ELECTION OF NOMINEES FOR DIRECTOR DESCRIBED HEREIN UNLESS AUTHORITY TO VOTE
FOR ANY OR ALL OF THE NOMINEES IS WITHHELD. In the event that any nominee at
the time of election shall be unable or for good reason unwilling to serve
(which contingencies are not now contemplated or foreseen) and in consequence
other nominees shall be nominated, the persons named in the Proxy shall have
the discretion and authority to vote or refrain from voting in accordance
with their judgment on such other nominations. IN ADDITION, UNLESS OTHERWISE
SPECIFIED IN THE PROXY, PROXIES WILL BE VOTED FOR THE RATIFICATION AND
APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE COMPANY'S CERTIFICATE OF
INCORPORATION (THE "RESTATEMENT") AND FOR THE RATIFICATION AND APPROVAL OF
THE SELECTION OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1996. See "Other Matters"
with respect to additional discretion and authority conferred by the
accompanying Proxy.
<PAGE>
PROPOSAL 1
ELECTION OF CLASS A DIRECTORS
The Board of Directors of the Company consists of three classes: Class A,
Class B and Class C. Class A consists of three directors and Classes B and C
each consist of four directors. Directors in each class serve for a
three-year term and until their respective successors have been elected and
qualified. The term of the present Class A directors will end with this
year's Annual Meeting, the term of the present Class B directors will end
with the 1997 Annual Meeting and the term of the present Class C directors
will end with the 1998 Annual Meeting.
Three directors, to serve as Class A directors, are to be elected at the
Annual Meeting, to hold office until the 1999 Annual Meeting and until their
respective successors have been elected and qualified. The names of the three
nominees for director and the names of the directors continuing in office
whose terms do not expire in 1996, together with certain information
furnished to the Company by each nominee and director, are set forth below
(see also "Certain Transactions" and "Security Ownership of Certain
Beneficial Owners"). Assuming the presence of a quorum, directors shall be
elected by a plurality of the votes present or represented by proxy at the
Annual Meeting. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR THE ELECTION OF THE NOMINEES FOR CLASS A DIRECTORS INDICATED BELOW.
NOMINEES FOR ELECTION AS CLASS A DIRECTORS
Louis A. Guzzetti, Jr. (age 57) has been a director and President and
Chief Executive Officer of the Company since October 1986. From June 1983
until April 1986, Mr. Guzzetti was employed by United Brands Company ("United
Brands") (a diversified international company), serving as its Executive Vice
President and Chief Administrative Officer from June 1983 until August 1985
and as President and Chief Executive Officer of its United Fruit Company
subsidiary from October 1984 until April 1986. He was also a director of
United Brands from August 1984 until June 1986.
Jeffrey G. Miller (age 54) was re-elected as a director of the Company in
August 1993. Mr. Miller has been a professor of Environmental Law at Pace
University School of Law since 1987. He has also been of counsel to the
Seattle and Washington D.C. law firm of Perkins Coie since 1987 practicing
Environmental Law. Mr. Miller was a director of Envirosafe Services, Inc.
("Envirosafe") from 1987 to February 1992. He became a director of the
Company in February 1992 pursuant to the terms of a merger agreement between
Envirosafe and a wholly-owned subsidiary of the Company. Mr. Miller resigned
on May 13, 1993 pursuant to the terms of the Stock Purchase Agreement (the
"Purchase Agreement") described under the caption "Certain Transactions." Mr.
Miller is one of the three additional designees of F.S. Equity Partners II,
L.P. ("FSEP"), an affiliate of Freeman Spogli & Co. ("FS&Co."), elected to
the Board of Directors.
Jon D. Ralph (age 31) has been a director of the Company since August
1993. He joined FS&Co. in August 1989. Prior to joining FS&Co., Mr. Ralph was
employed in the Investment Banking Division of Morgan Stanley & Co.
Incorporated beginning in 1986. Mr. Ralph is one of the three additional
FS&Co. designees elected to the Board of Directors. Mr. Ralph is also a
director of The Pantry, Inc.
CLASS B DIRECTORS
Wallace B. Askins (age 65) has been a director of the Company since 1978.
Mr. Askins served as Executive Vice President and Chief Financial Officer of
Armco Inc. ("Armco") (a manufacturer of steel and other products) from June
1984, and as a director of Armco from December 1985, until his retirement in
November 1992. Until 1995, Mr. Askins served as a director of Trump Castle
and Resort, Inc. and of Trump Plaza Casino and Resort, Inc. At present, he is
a director of Trump Hotel & Casino Resorts.
John M. Roth (age 37) became a director of the Company in May 1993. Mr.
Roth is one of the four FS&Co. designees initially appointed to the Board of
Directors on May 13, 1993. He joined FS&Co. in March 1988 and became a
general partner in March 1993. From 1984 to 1988, Mr. Roth was a Vice
President in the Merger and Acquisition Group of Kidder, Peabody & Co.
Incorporated. From 1983 to 1984, Mr. Roth worked as a management consultant
with McKinsey & Company, Inc. Mr. Roth is a director of Brylane, L.P. and
Calmar, Inc.
Arthur R. Seder, Jr. (age 76) has served as a director of the Company since
June 1988. Mr. Seder is a consultant in matters relating to the natural gas
industry. He served as Special Counsel to Columbia Gas Transmission Corporation
2
<PAGE>
from June 1988 until 1992. From 1985 to 1988, he was of counsel to the
Washington, D.C. office of the law firm of Sidley & Austin. From 1976 until
April 1985, he was Chairman and Chief Executive Officer of American Natural
Resources Company (a diversified energy and transportation company).
J. Frederick Simmons (age 41) became a director of the Company in May
1993. Mr. Simmons is one of the four FS&Co. designees initially appointed to
the Board of Directors on May 13, 1993. He joined FS&Co. in 1986 and became a
general partner in January 1991. Prior to 1986, Mr. Simmons was Vice
President of Bankers Trust Company's lending group specializing in leveraged
buyouts and health care. Mr. Simmons is also a director of Buttrey Food and
Drug Stores Company and Orchard Supply Hardware Stores Corporation.
CLASS C DIRECTORS
Raymond P. Caldiero (age 61) has served as a director of the Company since
February 1992. Mr. Caldiero has served as Chairman of Caldiero International,
Inc. (a consultant in the areas of hotel development, lobbying, marketing and
sales) since 1989. From 1973 to 1988, Mr. Caldiero served as Vice President
and Assistant to the President of Marriott Corporation (a hotel and
restaurant company). He is a director of Capital Bank and served as a
director of Envirosafe from 1987 until February 1992. Mr. Caldiero became a
director of the Company in February 1992 pursuant to the terms of a merger
agreement between Envirosafe and a wholly-owned subsidiary of the Company.
Mark J. Doran (age 32) became a director of the Company in August 1994 to
fill the vacancy created upon the resignation of William M. Wardlaw, one of
three additional designees of FS&Co. elected to the Board of Directors. Mr.
Doran joined FS&Co. in 1988. Prior to joining FS&Co., Mr. Doran was employed
by Kidder, Peabody & Co. Incorporated.
Charles P. Rullman, Jr. (age 47) became a director of the Company in
January 1995 to fill the vacancy created upon the resignation of William H.
Sherer, one of four FS&Co. designees initially appointed to the Board of
Directors on May 13, 1993. Mr. Rullman joined Freeman Spogli & Company, Inc.
("FSCI"), an affiliate of FS&Co., as a principal in January 1995. Prior to
joining FSCI, Mr. Rullman was a partner at Westar Capital since October 1992.
From 1973 to 1992, Mr. Rullman was employed by BT Securities Corp., serving
last as a Managing Director.
Ronald P. Spogli (age 48) became a director and Chairman of the Board of
the Company in May 1993. Mr. Spogli is one of four FS&Co. designees initially
appointed to the Board of Directors on May 13, 1993. He is a founding partner
of FS&Co.. Mr. Spogli is also a director of Mac Frugal's Bargains-Close-Outs
Inc., Orchard Supply Hardware Stores Corporation and Buttrey Food and Drug
Stores Company.
OTHER INFORMATION AS TO DIRECTORS
During the fiscal year ended December 31, 1995, the Board of Directors
held five meetings.
The Board of Directors has an Executive Committee, consisting of Messrs.
Guzzetti, Simmons and Spogli; an Audit Committee, consisting of Messrs.
Askins, Rullman and Seder; and a Compensation and Stock Option Committee (the
"Compensation Committee"), consisting of Messrs. Askins, Caldiero, Roth and
Simmons.
The function of the Executive Committee is to exercise the powers and
authority of the full Board of Directors, to the extent permitted by law,
when it is not in session. During 1995, the Executive Committee held one
meeting.
The primary function of the Audit Committee, which held two meetings
during 1995, is to review the scope and results of each year's annual audit
as well as the Company's internal accounting procedures.
The function of the Compensation Committee is to administer the Company's
Incentive Stock Option Plan, to award stock options thereunder and to review
and make recommendations concerning other Company plans, executive
compensation and such other matters referred to it by the Board of Directors.
The Compensation and Stock Option Committee held one meeting during 1995.
3
<PAGE>
The Company pays each director other than Mr. Guzzetti and general
partners or employees of FS&Co. an annual fee of $15,000 (payable in four
equal quarterly installments). In addition, the Company pays the reasonable
expenses of each director in connection with his attendance at each meeting
of the Board of Directors or any committee thereof. In connection with their
election in February 1992 as directors of the Company, each of Mr. Caldiero
and Mr. Miller was granted an option to purchase 20,000 shares of Common
Stock of the Company at an exercise price of $2.625 per share, which became
exercisable in September 1993 and expires in March 2002. Pursuant to its
terms, Mr. Miller's option would have expired 90 days after his resignation
in May 1993. In connection with his re-election to the Board of Directors in
August 1993, the Company amended Mr. Miller's option to provide that his
option will remain in effect, as if he had not resigned, during the period
from May 13, 1993 until such re-election. On August 5, 1993, Mr. Askins was
granted an option to purchase 20,000 shares of Common Stock of the Company at
an exercise price of $4.25 per share, which became exercisable in August 1995
and expires in August 2003. On November 1, 1993, the Company granted an
option to purchase 20,000 shares of Common Stock of the Company to Mr. Seder
at an exercise price of $4.25 per share, which became exercisable in November
1995 and expires in November 2003. Mr. Seder's previously issued option to
purchase 20,000 shares of Common Stock at an exercise price of $7.75 was
terminated at the same time.
In 1995, the Company also adopted a Stock Option Plan for Non-Affiliate
Directors (the "Plan"), which was ratified and approved by the stockholders
of the Company at the 1995 Annual Meeting. Pursuant to the Plan, each
director of the Company who is neither an employee of the Company nor an
affiliate of FS&Co. (i) automatically is granted an option to purchase 5,000
shares of Common Stock as of January 1 of each year, and (ii) is given the
right, exercisable on or before January 1 of each year, to make an
irrevocable election to receive an option to purchase shares of Common Stock
in lieu of receiving his annual director's fee for that particular year. Each
of Mr. Askins and Mr. Seder elected to receive options to purchase shares of
Common Stock in lieu of their annual director's fees for 1995, and only Mr.
Askins elected to receive options to purchase shares of Common Stock in lieu
of his annual director's fee for 1996.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Company's records and other information obtained by the Company from
outside sources indicate that as of April 1, 1996, unless otherwise stated,
the following persons were the beneficial owners of more than 5% of the
outstanding shares of the Common Stock of the Company.
<TABLE>
<CAPTION>
Number of
Shares
Name and Address Beneficially Percent
of Beneficial Owner(l) Class Owned of Class
- ----------------------------------- -------------- --------------- ----------
<S> <C> <C> <C>
FS Equity Partners II, L.P
c/o Freeman Spogli & Co.(2) .... Common Stock 19,533,848(3) 48.2%
11100 Santa Monica Blvd.
Suite 1900
Los Angeles, CA 90025
The IBM Retirement Plan Trust Fund Common Stock 2,726,739(4) 6.8%
262 Harbor Place
Stamford, CT 06904-2399
</TABLE>
- ------
(1) To the best of the Company's knowledge, except as otherwise provided
herein, the persons named in the table have sole voting and investment
power with respect to all shares of equity securities shown as
beneficially owned by them.
(2) FS&Co., as general partner of FSEP, has the sole power to vote and
dispose of such shares. Messrs. Roth, Simmons and Spogli, each of whom is
a director of the Company, and Bradford M. Freeman and William M. Wardlaw
are general partners of FS&Co., and as such may be deemed to be the
beneficial owners of the shares of the Company's capital stock indicated
as beneficially owned by FSEP.
(3) Includes 346,753 shares issuable upon exercise of warrants held by FSEP.
(4) Includes 48,406 shares issuable upon exercise of warrants held by The IBM
Retirement Plan Trust Fund (the "IBM Trust").
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
As of April 1, 1996, the following directors, executive officers and all
directors and officers as a group, were the beneficial owners of shares of
Common Stock of the Company.
<TABLE>
<CAPTION>
Equity Securities of the Company
Beneficially Owned as of
April 1, 1996(1)
----------------------------------------------
Number of Percent
Name and Position with Company Class Shares of Class
------------------------------ -------------- --------------- ----------
<S> <C> <C> <C>
Class A Directors
Louis A. Guzzetti, Jr., President and Chief
Executive Office ......................... Common Stock 639,270(3) 1.6%
Jeffrey G. Miller .......................... Common Stock 25,000(4) *
Jon D. Ralph ............................... -- -- --
Class B Directors
Wallace B. Askins .......................... Common Stock 57,572(4) *
John M. Roth(2) ............................ Common Stock 19,533,848(5) 48.2%
Arthur R. Seder, Jr. ....................... Common Stock 51,216(4) *
J. Frederick Simmons(2) .................... Common Stock 19,533,848(5) 48.2%
Class C Directors
Raymond P. Caldiero ........................ Common Stock 25,000(4) *
Mark J. Doran .............................. -- -- --
Charles P. Rullman, Jr. .................... -- -- --
Ronald R. Spogli, Chairman of the Board(2) .. Common Stock 19,533,848(5) 48.2%
Other Four Most Highly Compensated Executive
Officers
Aarne Anderson ................................ Common Stock 66,579(3) *
Jerrold I. Dolinger ........................... Common Stock 133,348(3) *
George E. Fuehrer ............................. Common Stock 171,709(3) *
James C. Hull ................................. Common Stock 90,006(3) *
All directors and officers as a group (18
persons) ...................................... Common Stock 20,951,078(6) 50.8%
</TABLE>
- ------
* Less than 1%
(1) Unless otherwise disclosed, the persons named in the table have sole
voting and investment power with respect to all shares of equity
securities shown as beneficially owned by them.
(2) All shares shown as beneficially owned are held of record by FSEP. As
general partner of FSEP, FS&Co. has the sole power to vote and dispose of
such shares. Messrs. Roth, Simmons and Spogli, each of whom is a director
of the Company, are general partners of FS&Co., and as such may be deemed
to be the beneficial owners of the shares of the Company's Common Stock
indicated as beneficially owned by each of them.
(3) Includes (i) shares for which options under EnviroSource's Incentive
Stock Option Plan, EnviroSource's 1993 Stock Option Plan or otherwise are
exercisable by executive officers within 60 days, as follows: Mr.
Guzzetti, 235,212 shares; Mr. Anderson, 43,943 shares; Mr. Dolinger,
76,533 shares; Mr. Fuehrer, 115,220 shares; and Mr. Hull, 39,510 shares;
and (ii) shares held through the EnviroSource, Inc. Savings Plan and
EnviroSource, Inc. Profit Sharing Plan as of December 31, 1995, as
follows: Mr. Guzzetti, 96,033 shares; Mr. Anderson, 10,636 shares; Mr.
Dolinger, 36,815 shares; Mr. Fuehrer, 26,339 shares; and Mr. Hull, 48,996
shares.
(4) Includes shares for which options under EnviroSource's Stock Option Plan
for Non-Affiliate Directors or otherwise are exercisable by directors
within 60 days, as follows: Mr. Askins, 41,216 shares; Mr. Caldiero,
25,000 shares; Mr. Miller, 25,000 shares; and Mr. Seder, 41,216 shares.
(5) Includes 346,753 shares issuable upon exercise of warrants held by FSEP.
(6) Includes (i) 721,792 shares for which options under EnviroSource's
Incentive Stock Option Plan, EnviroSource's 1993 Stock Option Plan,
EnviroSource's Stock Option Plan for Non-Affiliate Directors or otherwise
are exercisable within 60 days; (ii) 292,907 shares held through the
EnviroSource, Inc. Savings Plan, the EnviroSource, Inc. Profit Sharing
Plan or otherwise as of December 31, 1995; (iii) 19,187,095 shares held
of record by FSEP; and (iv) 346,753 shares issuable upon exercise of
warrants held by FSEP. See footnote (2) for an explanation of the
relationship between certain directors and FSEP.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by or
paid to the Chief Executive Officer and the other four most highly
compensated executive officers of the Company for the last three completed
fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
--------------------------------- ---------------
Number of All Other
Name and Principal Position Year Salary Bonus Stock Options Compensation
- ------------------------------------ ------ ---------- ---------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Louis A. Guzzetti, Jr. ............ 1995 $403,000 $103,000 106,640 $39,612(1)
Chief Executive Officer 1994 401,500 207,000 0 29,184(2)
1993 390,750 0 168,000 20,786(3)
Aarne Anderson .................... 1995 144,675 28,000 13,330 14,399(1)
Vice President, Taxes 1994 142,100 56,500 0 11,368(2)
1993 137,812 0 32,500 11,270(3)
Jerrold I. Dolinger ............... 1995 168,188 10,000 24,000 16,929(1)
Vice President, Corporate 1994 161,750 80,000 0 12,587(2)
Development 1993 155,625 0 56,000 22,291(3)(4)
George E. Fuehrer ................. 1995 180,375 65,000 26,660 15,611(1)
Senior Vice President, Planning 1994 177,625 85,600 0 8,932(2)
1993 172,000 0 76,000 8,615(3)
James C. Hull ..................... 1995 195,250 45,000 21,330 22,963(1)
Vice President and Chief Financial 1994 192,250 84,000 0 18,612(2)
Officer 1993 187,312 0 16,000 18,360(3)
</TABLE>
- ------
(1) Includes Company contributions to accounts in the EnviroSource, Inc.
Savings Plan, as follows: Mr. Guzzetti, $9,000; Mr. Anderson, $4,340; Mr.
Dolinger, $4,500; Mr. Fuehrer, $2,060; and Mr. Hull, $9,000; Company
contributions to accounts in the EnviroSource, Inc. Profit Sharing Plan
of $7,500 each for Messrs. Guzzetti, Anderson, Dolinger, Fuehrer, and
Hull; and Company contributions to accounts in the EnviroSource, Inc.
Supplemental Executive Retirement Plan, as follows: Mr. Guzzetti,
$23,112; Mr. Anderson, $2,559; Mr. Dolinger, $4,929; Mr. Fuehrer, $6,051;
and Mr. Hull, $6,463.
(2) Includes Company contributions to accounts in the EnviroSource, Inc.
Savings Plan, as follows: Mr. Guzzetti, $9,000; Mr. Anderson, $4,263; Mr.
Dolinger, $4,500; and Mr. Hull, $9,000; Company contributions to accounts
in the EnviroSource, Inc. Profit Sharing Plan, as follows: Mr. Guzzetti,
$7,500; Mr. Anderson, $7,105; Mr. Dolinger, $7,500; Mr. Fuehrer, $7,500;
and Mr. Hull, $7,500; and Company contribution to accounts in the
EnviroSource, Inc. Supplemental Executive Retirement Plan, as follows:
Mr. Guzzetti, $12,684; Mr. Dolinger, $587; Mr. Fuehrer, $1,432 and Mr.
Hull, $2,112.
(3) Includes Company contributions to accounts in the EnviroSource, Inc.
Savings Plan, as follows: Mr. Guzzetti, $8,994; Mr. Anderson, $4,372; Mr.
Dolinger, $4,497, and Mr. Hull, $8,994; and Company contributions to
accounts in the EnviroSource, Inc. Profit Sharing Plan as follows: Mr.
Guzzetti, $11,792; Mr. Anderson, $6,898; Mr. Dolinger, $7,794; Mr.
Fuehrer, $8,615; and Mr. Hull, $9,366.
(4) Includes $10,000 of loan forgiveness. See "Employee Loans".
-------------------------------
In February 1996, the Compensation Committee granted stock options to each
of the named executive officers in recognition of their accomplishments
during 1995 in the following amounts: Mr. Guzzetti, 70,000; Mr. Anderson,
8,600; Mr. Dolinger, 4,000; Mr. Fuehrer, 26,880; and Mr. Hull, 14,000.
6
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Percent of
Number of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Grant Date Present
Name Granted (#)(1) Fiscal Year ($/Sh)(2) Expiration Date Value ($)(3)
------------------------ -------------- -------------- ------------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
Louis A. Guzzetti, Jr... 106,640 28% $3.625 2/15/05 $271,932
Aarne Anderson ........ 13,330 3% $3.625 2/15/05 33,992
Jerrold I. Dolinger ... 24,000 6% $3.625 2/15/05 61,200
George E. Fuehrer ..... 26,660 7% $3.625 2/15/05 67,983
James C. Hull ......... 21,330 6% $3.625 2/15/05 54,392
</TABLE>
- ------
(1) These options vest at the annual rate of 33 1/3 % beginning on the first
anniversary of the date of grant.
(2) The exercise price is equal to the closing market price of the Company's
Common Stock on the date of grant.
(3) The grant date present values were determined using the Black-Scholes
pricing model and the following assumptions: 51% expected stock price
volatility, 6.48% risk free rate of return, zero dividend yield and
option exercise at the end of the 10-year term.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth the number and value at December 31, 1995
of all exercisable and unexercisable options held by the Chief Executive
Officer and the other four most highly compensated executive officers of the
Company under the Company's Incentive Stock Option Plan and the 1993 Stock
Option Plan. In 1995 none of the named executive officers exercised any
options.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
--------------- ---------------
Exercisable/ Exercisable/
Name Unexercisable Unexercisable(1)
- ---------------------------------- --------------- ---------------
<S> <C> <C>
Louis A. Guzzetti, Jr............. 199,666/189,974 $12,000/$3,000
Aarne Anderson .................. 39,500/28,830 4,000/1,000
Jerrold I. Dolinger ............. 68,533/51,467 8,000/2,000
George E. Fuehrer ............... 106,333/61,327 8,000/2,000
James C. Hull ................... 32,400/34,930 8,000/2,000
</TABLE>
- ------
(1) The value of unexercised in-the-money options represents the difference
between the fair market value of the underlying securities as of December
31, 1995 and the exercise price of such options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Messrs. Askins,
Caldiero, Roth and Simmons. Mr. Askins was an executive officer of the
Company's predecessor, White Motor Corporation, from December 1976 until June
1984.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed of two
independent outside directors and two directors who are general partners of
FS&Co. The Compensation Committee has responsibility for administering the
policies that govern employee compensation programs and executive compensation,
7
<PAGE>
and for reviewing and making recommendations concerning the Company's employee
benefit plans, executive compensation and such other matters as are referred to
it by the Board of Directors. The Compensation Committee has furnished the
following report on executive compensation:
The Compensation Committee believes it is important to align the
financial interests of the Company's senior managers, including the Chief
Executive Officer, with those of its stockholders. In furtherance of this
objective, the Company relies to a significant degree on annual incentive
compensation and stock options in addition to base compensation.
Base Compensation. The Company attempts to offer new executive officers
base compensation believed to be somewhat below average for companies of
comparable size, complexity and geographic location. Annual increases in
base compensation have generally been intended to approximate competitive
wage escalation including, where appropriate, adjustments based on merit.
The Compensation Committee has not historically reviewed initial decisions
regarding base compensation for new executive officers (other than the
Chief Executive Officer), but the Compensation Committee does approve
annual increases for executive officers.
Incentive Compensation. The remainder of executive compensation is tied
to corporate performance. The Company relies on annual incentive
compensation and stock options to provide incentives to executives to meet
the Company's business, financial and strategic objectives, and to reward
and retain executives who perform in furtherance of those objectives.
The Company's incentive compensation program for executive officers is
based on a combination of financial and non-financial goals. The annual
incentive compensation "pool" is the sum of the target bonuses of each of
the Company's executive officers, escalated up to 150% of target or
reduced to as low as zero, depending on the extent to which the Company
meets specified financial targets, typically expressed in relation to
budgeted annual cash flow, operating income or net income. For 1995 and
1996 the target bonus has been set at 50% of base compensation for the
Chief Executive Officer and 40-45% of base compensation for the Company's
other executive officers. The extent to which an individual executive
officer participates in bonuses, if any, from the pool depends on that
individual's achievement of non-financial objectives negotiated annually
between that individual and his or her supervisor and that individual's
overall performance. Non-financial objectives involve projects or programs
within each executive officer's area of responsibility. Early each year
the Compensation Committee reviews management's proposed incentive
compensation program financial targets, and the non-financial objectives
of each of the Company's executive officers, for that fiscal year, as well
as proposed awards, if any, in respect of the preceding fiscal year.
The bonuses awarded to executive officers for 1995 and reflected in the
Summary Compensation Table were based on the Company's achievement of
operating income established by the Compensation Committee at the
beginning of 1995 and each executive officer's overall performance and
individual achievements of his non-financial objectives also established
at such time.
Stock Options. The Compensation Committee believes that stock options
represent a desirable long- term compensation method because they reward
Company performance that increases the value of stockholders' ownership.
All options granted to executive officers under the Company's stock option
plans have an exercise price at least equal to the fair market value of
the Company's Common Stock on the date of grant, and all such options
granted to executive officers since 1986 vest or have vested over periods
of several years. These features help ensure the long-term nature of
compensation through stock options.
Early each year the Compensation Committee reviews the Chief Executive
Officer's proposals for option awards, if any, to executive officers and
other key employees, taking into account the Company's recent performance
as well as the responsibilities, past performance, anticipated performance
requirements of each of such individuals and previous option awards. The
Company has not established any particular target ownership level for
Company equity holdings by its executive officers. Options are also
granted to newly-hired officers based on responsibilities and anticipated
performance requirements.
8
<PAGE>
Compensation of Chief Executive Officer. The compensation of Mr.
Guzzetti as Chief Executive Officer is based on a combination of
performance indicators and long-term increase in stockholder value. Mr.
Guzzetti's current base salary is somewhat above the average salary of
peers at other comparable companies in recognition of his experience,
years of service with the Company and the complexity of the Company's
businesses. In 1995, the Chief Executive Officer received a 0.37% increase
in his base compensation.
Mr. Guzzetti received an annual bonus and stock options in respect of
1995 based on his level of achievement of the budgeted corporate earnings
for the year and his individual performance.
Compensation and Stock Option Committee
WALLACE B. ASKINS
RAYMOND R CALDIERO
JOHN M. ROTH
J. FREDERICK SIMMONS
The Revenue Reconciliation Act of 1993 limits the annual deduction a
publicly held corporation may take for certain types of compensation paid or
accrued with respect to certain executives to $1 million per year per
executive for taxable years beginning after December 31, 1993. The Company
does not believe that compensation paid currently to its executives is
affected by such limitation. The Company has reviewed its compensation plans
in the context of the requirements for tax deductibility under these rules,
and will determine whether, and to what extent, revisions of such plans will
be necessary or desirable.
9
<PAGE>
PERFORMANCE CHART
Set forth below is a line-graph presentation comparing the cumulative
total return on the Company's Common Stock, on an indexed basis, against the
cumulative total returns of the Russell 2000 Index and the S&P Pollution
Control Index, assuming $100 was invested on December 31, 1990.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ENVIROSOURCE, INC., THE RUSSELL 2000 INDEX
AND THE S&P POLLUTION CONTROL INDEX
300|------------------------------------------------------------------|
| |
| & |
250|------------------------------------------------------------------|
| |
| & & |
D 200|------------------------------------------------------------------|
O | & |
L | |
L 150|--------------&---------------------------------------------------|
A | @ |
R | # # |
S 100|---@&#-------------------------------------------------------#----|
| #@ #@ @ |
| @ |
50|------------------------------------------------------------------|
| |
| |
0|----|---------|----------|----------|-----------|------------|----|
12/90 12/91 12/92 12/93 12/94 12/95
@ = ENVIROSOURCE, INC. & = RUSSELL 2000 # = S&P POLLUTION CONTROL
<TABLE>
<CAPTION>
12/90 12/91 12/92 12/93 12/94 12/95
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
ENVIROSOURCE, INC. @ 100 56 125 84 83 75
RUSSELL 2000 & 100 146 173 206 202 260
S&P POLLUTION CONTROL # 100 118 118 86 89 102
</TABLE>
* $100 INVESTED ON 12/31/90 IN STOCK OR INDEX =
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
10
<PAGE>
CERTAIN TRANSACTIONS
THE FSC TRANSACTION
In May 1993, the Company sold the equivalent of 13.3 million shares of
Common Stock to an affiliate of FS&Co. and another investor (collectively,
the "Investors"). At the same time, the Investors purchased from The
Dyson-Kissner-Moran Corporation ("DKM") and WM Financial Corporation ("WM
Financial") the following: (i) 5,636,568 shares of Common Stock, (ii) all
107,000 outstanding shares of Class H Preferred Stock, par value $.25 per
share, all of which were immediately exchanged for 3,066,667 newly issued
shares of Common Stock, and (iii) warrants to purchase 1,695,652 shares of
Common Stock at exercise prices of $3.50 and $4.00 per share. FS&Co. sold a
portion of the aforementioned securities to The IBM Trust. As a result of
these transactions, FS&Co. owns approximately 48% of the Common Stock of the
Company.
MANAGEMENT AGREEMENT
FS&Co. provides advice and assistance to the Company regarding corporate
and financial planning and the development of business strategies. The
Company does not pay FS&Co. a fee for such services but has agreed to
reimburse FS&Co. for all expenses incurred in connection with such advice and
assistance.
EMPLOYEE LOANS
In 1986, the Company granted Mr. Guzzetti a loan of $500,000 (the "1986
Loan") bearing interest at 7.5% per annum and repayable in ten equal annual
installments. The first three $50,000 annual installments were repaid in
1988, 1989 and 1990. In each of 1991 and 1992, the Company deferred the
principal installment payment then due, extended the maturity of such loan by
one year and loaned Mr. Guzzetti $26,250 to finance the payment of interest
then due, represented by new notes bearing interest at 7.5% per annum.
Effective March 31, 1993, the Company and Mr. Guzzetti agreed to amend the
terms of the 1986 Loan to (i) increase the principal amount of such loan by
the amount of interest otherwise due on March 31, 1993, (ii) reduce the
interest rate commencing April 1, 1993 to 6% per annum, payable annually half
in cash and half by adding to the principal amount of the loan on each due
date of such interest, (iii) provide for a lump sum payment of principal and
accrued and unpaid interest thereon on March 31, 1998, in lieu of annual
installment payments, (iv) require payment in full within 30 days of
termination of employment and (v) provide for forgiveness of all outstanding
amounts due in the event Mr. Guzzetti dies while still employed by the
Company. The outstanding principal amount (including financed interest
payments) of the 1986 Loan as of April 1, 1996 was $472,810.
In connection with Common Stock purchases by certain executive officers of
the Company in January 1989, the Company loaned $350,000 to Mr. Guzzetti,
$90,000 to Mr. Anderson, $220,000 to Mr. Fuehrer, and $150,000 to Mr.
Dolinger. All of such indebtedness bore interest payable annually at the
annual rate of 8%, and its principal amount was payable on the earlier of
January 13, 1994 or the date of such borrower's termination of employment
with the Company. On each of April 1, 1991 and April 1, 1992, the Company
agreed to increase the principal amount of such loans by the amount of
interest payments then due. Effective April 1, 1993, the Company agreed to
(i) increase the principal amount of such loans by the amount of interest
payments otherwise due on April 1, 1993, (ii) extend the maturity of such
loans to March 31, 1998, (iii) reduce the interest rate payable on such loans
to 6% per annum, payable annually half in cash and half by adding to the
principal amount of such loans on each due date of such interest, (iv)
require payment in full of all outstanding amounts due under the loans,
including accrued interest, within 30 days of termination of employment and
(v) provide for forgiveness of all outstanding amounts due under the loans in
the event of the officer's death while still employed by the Company. The
aggregate principal amounts (including financed interest payments) of such
loans as of April 1, 1996 were $481,782 for Mr. Guzzetti, $123,886 for Mr.
Anderson, $302,835 for Mr. Fuehrer, and $206,479 for Mr. Dolinger.
11
<PAGE>
PROPOSAL 2
AMENDMENT AND RESTATEMENT OF CERTIFICATE OF INCORPORATION --
ELIMINATION OF DESIGNATION AND TERMS OF PREFERRED STOCK
The Board of Directors of the Company has approved, and recommends that
the stockholders approve, an amendment and restatement (the "Restatement"),
substantially in the form attached hereto as Appendix A hereto, of the
Certificate of Incorporation of the Company (the "Charter") to eliminate the
designation and terms of (i) Classes A, B, C, D, E, F (including Series A, B,
D, F, G and H) Preferred Stock, Class H Cumulative Preferred Stock, Class I
Cumulative Redeemable Preferred Stock, Series A, Increasing Rate, Class I
Cumulative Redeemable Preferred Stock, Series B, Exchangeable, Class I,
Series C Preferred Stock, and Class J Convertible Preferred Stock, all of
which previously have been redeemed and cancelled by the Company, and (ii)
Class G Preferred Stock which, subject to the terms of the Charter, must be
redeemed by the Company no later than July 15, 1996 and which subsequently
will be cancelled (the "Class G Redemption"). The Restatement also eliminates
other provisions no longer necessary or applicable to the Company, including
(a) a provision relating to transactions with a prior equity investor, and
(b) references to the Corporation to include Neoax, Inc., the Company's Ohio
predecessor. The Restatement will be filed with the Secretary of State of the
state of Delaware and become effective as soon as practicable following the
Class G Redemption.
The Restatement is for the purpose of eliminating those provisions which
are, and will be, of no further force and effect and thus are or will no
longer be required to be included in the Charter. Since the Restatement is of
an administrative nature, it will have no substantive effect on the
stockholders of the Company.
Pursuant to the terms of the Charter, the affirmative vote of 66 2/3 % of
the outstanding shares of Common Stock and Class G Preferred Stock, voting
together as a class, is required for approval of any amendment to the Charter
and specifically for the Restatement.
The Board of Directors recommends that the stockholders vote FOR the
ratification and approval of the Restatement.
PROPOSAL 3
RATIFICATION AND APPROVAL OF
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Ernst & Young LLP ("Ernst & Young") as
the Company's independent public accountants for the fiscal year ending
December 31, 1996. Although it is not required to do so, the Board of
Directors is submitting its selection of Ernst & Young to the stockholders
for ratification and approval. If the selection is not ratified and approved,
the Board of Directors will reconsider its choice but will not be bound by
the refusal of the stockholders to ratify and approve the selection of Ernst
& Young. A representative of Ernst & Young is expected to be present at the
Annual Meeting, will have the opportunity to make a statement if such
representative desires to do so and is expected to be available to respond to
appropriate questions. The Board of Directors recommends that the
stockholders vote FOR the ratification and approval of the selection of Ernst
& Young as the Company's independent public accountants for the fiscal year
ending December 31, 1996.
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. All
reportable transactions for all directors and officers are properly reflected
in their most recent filings under Section 16(a) of the Exchange Act.
12
<PAGE>
OTHER MATTERS
Effective January 15, 1992, due to dividend arrearages, the holders of the
Class G Preferred Stock became entitled to elect two additional directors to
the Company's Board of Directors. As of the date of this statement, the
Company has not received notice from any holder of the Class G Preferred
Stock of an intent to exercise its rights in this regard. Pursuant to its
terms, the Class G Preferred Stock must be redeemed no later than July 15,
1996 at which time such shares will be deemed no longer to be outstanding for
any purpose and holders of the Class G Preferred Stock will cease to have any
rights thereunder.
The Board of Directors of the Company knows of no other matters that are
to be brought before the Annual Meeting. If any other matter should be
presented for proper action, the persons named in the Proxy shall have
discretion and authority to vote or to refrain from voting in accordance with
their judgment on such matters. In addition, the persons named in the Proxy
shall have discretion and authority to vote or to refrain from voting in
accordance with their judgment with respect to matters incidental to the
conduct of the Annual Meeting.
The cost of solicitation will be borne by the Company. Solicitation will
be by mail, except for any incidental personal solicitation made by
directors, officers and regular employees of the Company, none of whom will
receive compensation therefor. The Company will also request banks and
brokers to solicit their customers who have a beneficial interest in shares
of Common Stock registered in the names of nominees and will reimburse such
banks and brokers for their reasonable out-of-pocket expenses. In addition,
the Company's transfer agent, American Stock Transfer & Trust Company, Inc.,
will assist in the solicitation of Proxies from brokers, bank nominees and
other institutional holders.
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received at the Company's principal executive
offices on or before December 29, 1996 for inclusion in the Company's Proxy
Statement with respect to such meeting.
By Order of the Board of Directors,
/s/ LOUIS A. GUZZETTI, JR.
----------------------------------------
LOUIS A. GUZZETTI, JR.
President and Chief Executive Officer
It is important that the Proxies be returned promptly. Stockholders who do
not expect to attend in person are urged to fill in, sign, date and return
the enclosed Proxy.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1995 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MAY
BE OBTAINED WITHOUT CHARGE (EXCEPT FOR EXHIBITS TO SUCH ANNUAL REPORT, WHICH
WILL BE FURNISHED UPON PAYMENT OF THE COMPANY'S REASONABLE EXPENSES IN
FURNISHING SUCH EXHIBITS) BY ANY PERSON SOLICITED HEREUNDER BY WRITING TO:
CORPORATE SECRETARY, ENVIROSOURCE, INC., FIVE HIGH RIDGE PARK, P.O. BOX
10309, STAMFORD, CT 06904-2309.
13
<PAGE>
APPENDIX A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ENVIROSOURCE, INC.
FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is
EnviroSource, Inc.
SECOND: The registered office of the Corporation in the State of Delaware
is to be located at 1209 Orange Street in the City of Wilmington, County of
New Castle. The name of its registered agent at that address is The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: (a) The total number of shares of all classes of stock which the
Corporation is authorized to issue is 65,620,000 shares consisting of
60,000,000 shares of common stock, par value $.05 per share (the "Common
Stock"), and 5,620,000 shares of preferred stock, par value $.25 per share
(the "Preferred Stock").
(b) Subject to the limitations and restrictions set forth herein, the
shares of Preferred Stock may be issued in such classes or series from time
to time with such designations and powers, preferences and rights, and
qualifications, limitations and restrictions thereof, including, without
limitation, the number of shares of any series as shall be fixed by a
resolution or resolutions of the Board of Directors, pursuant to the
authority hereby given as provided in the General Corporation Law of the
State of Delaware. All retired shares of Preferred Stock shall resume the
status of authorized but unissued Preferred Stock without specified
designations, powers, preferences and rights, and may be reissued by the
Corporation in accordance with the immediately preceding sentence.
(c) Each holder of a share of Common Stock shall be entitled to one vote
for each share of Common Stock standing in the name of such holder on the
books of the Corporation, and each holder of a share of Preferred Stock shall
be entitled to such number of votes (which may be a fraction of one vote or
no vote) for each share of Preferred Stock standing in the name of such
holder on the books of the Corporation as set forth herein or as shall be
fixed by the Board of Directors prior to the issuance thereof. No holder of
Common Stock or any other shares of the Corporation shall be entitled to
receive certificates evidencing fractional shares, except as otherwise
required by this Certificate of Incorporation.
FIFTH: (a) The Board of Directors of the Corporation shall consist of
eleven directors.
(b) The Board of Directors shall consist of three classes: Class A,
Class B and Class C. The number of directors in each class (each of which
classes shall have not less than three directors) shall be the whole number
contained in the quotient arrived at by dividing the authorized number of
directors by three, and if a fraction is also contained in such quotient,
then if such fraction is one-third, the extra director shall be a member of
Class C, and if such fraction is two-thirds, one of the extra directors shall
be a member of Class C and the other shall be a member of Class B.
(c) Each director shall serve for a time ending on the date of the third
annual meeting following the annual meeting at which such director was
elected. Notwithstanding the foregoing, in the event that, as a result of any
change in the authorized number of directors, the number of directors in any
class would differ from the number allocated to that class pursuant to
paragraph (b) of this Article FIFTH immediately prior to such change the
following rules shall apply:
(i) each director shall nevertheless continue as a director of the
class of which he is a member until the earlier of the expiration of his
current term or his death, resignation or removal.
(ii) at each subsequent election of directors, if the number of
directors in the class whose term of office then expires is less than the
number then allowed to that class, the number of directors then elected for
A-1
<PAGE>
membership in that class shall not be greater than the number of directors in
that class whose term of office then expires, unless and to the extent that
the aggregate number of directors then elected plus the number of directors
in all classes then duly continuing in office does not exceed the then
authorized number of directors of the Corporation.
(iii) at each subsequent election of directors, if the number of
directors in the class whose terms of office then expires exceeds the number
then allocated to that class, the Board of Directors shall designate one or
more of the directorships then being elected as directorships of another
class or classes in which the number of directors then serving is less than
the number then allocated to such other class or classes;
(iv) in the event of the death, resignation or removal of any director
who is a member of a class in which the number of directors serving
immediately preceding the creation of such vacancy exceeds the number then
allocated to that class, the Board of Directors shall designate the vacancy
thus created as a vacancy in another class in which the number of directors
then serving is less than the number then allocated to such other class;
(v) in the event of any increase in the authorized number of
directors, the new directorship resulting from such increase shall be
apportioned by the Board of Directors to such class or classes as shall, so
far as possible, bring the composition of each of the classes into conformity
with the provisions of paragraph (b) of this Article FIFTH, as such
provisions apply to the number of directors authorized immediately following
such increase; and
(vi) designations of directorships or vacancies into other classes and
apportionments of newly created directorships to classes by the Board of
Directors under subparagraphs (iii), (iv) and (v) of this paragraph (c)
shall, so far as possible, be effected so that the class whose term of office
is due to expire next following such designation or apportionment shall
contain the full number of directors then allocated to such class.
(d) Notwithstanding the provisions of this Article FIFTH, each director
shall serve until his successor is elected and qualified or until his death,
resignation or removal. No director may be removed at any time prior to his
death or resignation or the expiration of his term of office without the
affirmative vote of the holders of 80% of the outstanding shares of Common
Stock of the Corporation entitled to vote and voting separately as a class.
(e) Elections of directors need not be by ballot unless the By-laws of
the Corporation so provide. In furtherance of and not in limitation of the
powers conferred by the laws of the State of Delaware, the Board of Directors
is expressly authorized and empowered, without the assent or vote of the
stockholders, to make, alter, amend and repeal the By-laws of the
Corporation, in any manner not inconsistent with the laws of the State of
Delaware or the Certificate of Incorporation of the Corporation.
SIXTH: No action shall be taken by the stockholders of the Corporation
except at an annual or special meeting of the stockholders.
SEVENTH: The affirmative vote of the holders of 66 2/3 % of the voting
power of the outstanding shares of the Common Stock of the Corporation
entitled to vote and voting separately as a class shall be required to
approve:
(a) the issuance during any 24-month period of shares of capital stock
or other securities of the Corporation (other than securities issuable
pursuant to or as contemplated by the second modified plan of reorganization
of NEOAX, Inc., an Ohio corporation (whose corporate name was then White
Motor Corporation) which was confirmed on November 18, 1983 by order of the
United States Bankruptcy Court for the Northern District of Ohio (Case No.
B80-3361), or securities convertible into or exchangeable for shares of its
capital stock, or the grant of rights or options to subscribe for or to
purchase shares of its capital stock or convertible or exchangeable
securities, which shares would entitle the holders thereof to exercise five
percent or more of the voting power of the Corporation in the election of
directors immediately after the issuance of such shares;
(b) any merger, consolidation or other reorganization of the Corporation
(whether for cash securities or other property);
(c) any dissolution, liquidation or winding up of the Corporation; or
A-2
<PAGE>
(d) any sale or disposition of any substantial portion of the assets of
the Corporation; provided, however, that the foregoing provisions shall not
apply to any such transaction which is approved by resolution of the Board of
Directors by a vote of 80% of the directors then in office. The stockholder
vote, if any, required for any transaction of the type described in the
preceding sentence or any transaction not of the type described in this
Article SEVENTH shall be such as may be required by applicable law.
EIGHTH: From time to time any of the provisions of this Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at that time in force may be
added or inserted in the manner and at the time prescribed by such laws, and
all rights at any time conferred upon the stockholders of the Corporation by
this Certificate of Incorporation are granted subject to the provisions of
such laws; provided, however, that, subject to the authority granted to the
Board of Directors pursuant to paragraph (b) of Article FOURTH, no provisions
of this Certificate of Incorporation (including without limitation this
Article EIGHTH), except Articles FIRST and SECOND (which may be amended with
the affirmative vote of the holders of record of shares of the capital stock
of the Corporation having a majority of the voting power of the capital
stock), may be amended, altered or repealed without the affirmative vote of
the holders of record of 66 2/3 % of the outstanding Common Stock of the
Corporation entitled to vote and voting separately as a class.
NINTH: The Corporation shall, to the full extent permitted by the General
Corporation Law of the State of Delaware, as amended from time to time,
indemnify all persons whom it has the power to indemnify pursuant thereto.
TENTH: No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except the liability (i) for any breach of the directors's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or knowing
violation of the law, (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit.
A-3
<PAGE>
ENVIROSOURCE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders to be held at Credit Lyonnais New York Branch,
1301 Avenue of the Americas, 19th Floor, New York, New York
on June 20, 1996 at 10:00 A.M.
The undersigned hereby constitutes and appoints Louis A. Guzzetti, Jr.,
Christina E. Huben and James C. Hull, and each of them, proxies for the
undersigned, with full power of substitution, to vote all shares of Common
Stock and Class G Preferred Stock of EnviroSource, Inc. (the "Company") that
the undersigned is entitled to vote at the Annual Meeting of Stockholders of
the Company to be held on June 20, 1996 or any adjournment or adjournments
thereof, on all matters that may come before the Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS SPECIFIED, THIS
PROXY WILL BE VOTED "FOR" ALL OF THE PROPOSALS LISTED HEREIN. In their
discretion, the Proxies are authorized to vote upon such other and further
business as may properly come before the Annual Meeting or any adjournment or
adjournments thereof.
(To be signed on reverse side)
<PAGE>
Please mark your
/ X / votes as in this
example.
FOR WITHHOLD Nominees: Louis A Guzzetti, Jr.
1. ELECTION OF / / / / Jeffrey G. Miller
CLASS A Jon D. Ralph
DIRECTORS
(Instructions: To withhold authority to vote for
any individual nominee, print that nominee's
name on the line provided below.)
-------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification and approval of amendment / / / / / /
and restatement of the Company's
Certificate of Incorporation.
FOR AGAINST ABSTAIN
3. Ratification and approval of selection / / / / / /
of Ernst & Young LLP as the Company's
independent public accountants.
Dated , 1996
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- ------------------------------------------------------------------------------
Signature
- ------------------------------------------------------------------------------
Signature if held jointly
(Please sign exactly as the name appears hereon. If stock is held in names of
joint owners, each should sign. Attorneys, executors, administrators, etc.,
should so indicate.)
If this Proxy is properly executed, the shares represented by this Proxy will
be voted upon the proposals listed herein in accordance with the directions
given by the stockholder, but if no such directions are given, this Proxy will
be voted FOR all of such proposals.
