<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 240.14a-11(c) or 240.14a-12
ENVIROSOURCE, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
EnviroSource, Inc.
1155 Business Center Drive
Horsham, PA 19044-3454
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 18, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
ENVIROSOURCE, INC., a Delaware corporation (the "Company"), will be held at The
Homestead Restaurant, Three Village Road, Horsham, Pennsylvania 19044 on
Thursday, June 18, 1998 at 10:00 A.M. (local time), for the following purposes:
1. To elect three members of Class C of the Board of Directors.
2. To authorize and approve amendments to the Company's certificate of
incorporation in order to: (i) effect a one-for-seven (1-for-7) reverse
stock split with respect to the outstanding shares of the Company's Common
Stock; (ii) change the number of authorized shares of the Company's Common
Stock; and (iii) change the Company's name to make the "S" lower case.
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, 1998.
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 at the close of
business on April 20, 1998 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 Company's
offices located at 1155 Business Center Drive, Horsham, Pennsylvania. 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 1997 Annual Report to Stockholders is enclosed
herewith.
By Order of the Board of Directors
[GRAPHIC OMITTED]
LEON Z. HELLER
Secretary
Dated: April 30, 1998
<PAGE>
EnviroSource, Inc.
1155 Business Center Drive
Horsham, PA 19044-3454
---------------------
PROXY STATEMENT
For Annual Meeting of Stockholders
to be held on June 18, 1998
---------------------
April 30, 1998
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 Homestead Restaurant, Three Village Road, Horsham, Pennsylvania 19044, on
Thursday, June 18, 1998 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 at
the close of business on April 20, 1998, 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 20, 1998, there were outstanding and
entitled to vote at the Annual Meeting 40,713,765 shares of Common Stock, $.05
par value (the "Common Stock"). Each share of Common Stock is entitled to one
vote.
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
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 5, 1998.
PROXIES AND VOTE REQUIRED
The persons named in the accompanying Proxy intend to vote Proxies FOR the
election of the 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 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 approval of the amendments to the
Company's certificate of incorporation 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, 1998. See "Other Matters"
with respect to additional discretion and authority conferred by the
accompanying Proxy.
The presence in person or by proxy of a majority of the shares of Common
Stock outstanding and entitled to vote at the Annual Meeting is required for a
quorum. If a quorum is present, those nominees receiving a plurality of the
votes cast will be elected. Accordingly, shares not voted in the election of
directors (including shares covered by a Proxy as to which authority is
withheld to vote for all nominees) and shares not voted for any particular
nominee (including shares covered by a Proxy as to which authority is withheld
to vote for only one or
<PAGE>
less than all of the nominees) will not prevent the election of any of the
nominees for director. Approval of the amendments of the Company's certificate
of incorporation (Proposal 2) requires the affirmative vote of 66 2/3% of the
outstanding shares of Common Stock. For all other matters submitted to
stockholders at the Annual Meeting, if a quorum is present the affirmative vote
of a majority of the shares voted is required for approval. As a result,
abstention votes with respect to any of the foregoing matters (other than
Proposal 1) will have the effect of a vote against such matter.
Shares held by brokers and other stockholder nominees sometimes are voted
on certain matters but not others. This can occur, for example, when a broker
is instructed by the beneficial owner of shares of Common Stock, or otherwise
has the authority, to vote on a particular matter but is not instructed, and
does not have such authority, to vote on one or more others. These are known as
"non-voted" shares. Non-voted shares will be counted for purposes of
determining whether there is a quorum at the Annual Meeting, but with respect
to the matters as to which they are "non-voted" (other than for Proposal 2)
they will have no effect upon the outcome of the vote thereon. Shares that are
"non-voted" with respect to Proposal 2 will have the effect of a vote against
the proposal.
PROPOSAL 1
ELECTION OF CLASS C DIRECTORS
The Board of Directors of the Company consists of three classes: Class A,
Class B and Class C. Each Class consists of three directors. Directors in each
class serve for a three-year term and until their respective successors have
been elected and qualified (or as otherwise provided under the By-laws of the
Company). The term of the present Class C directors will end with this year's
Annual Meeting, the term of the present Class A directors will end with the
1999 Annual Meeting and the term of the present Class B directors will end with
the 2000 Annual Meeting.
Three directors, to serve as Class C directors, will be elected at the
Annual Meeting, to hold office until the 2001 Annual Meeting and until their
respective successors have been elected and qualified (or as otherwise provided
under the By-laws of the Company). The names of the nominees for Class C
director and the names of the directors continuing in office whose terms do not
expire in 1998, together with certain information furnished to the Company by
each nominee and director, are set forth below (see also "Security Ownership of
Certain Beneficial Owners").
The Board of Directors recommends that the stockholders vote FOR the
election of the nominees for Class C directors indicated below.
Nominees for Election as Class C Directors
Class C Directors
Raymond P. Caldiero (age 63) 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. He is a director of the Autrey Museum and Technology
Solutions, Inc. and served as a director of Envirosafe Services, Inc.
("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.
Robert N. Gurnitz (age 59) became a director of the Company in November
1997. Mr. Gurnitz served as President and Chief Executive Officer of
Northwestern Steel and Wire Co. from 1991 to 1993 and as its Chairman and Chief
Executive Officer from 1993 to 1997. Prior to that he served in various senior
management capacities with Rockwell Investment, Bethlehem Steel Corporation and
Webcraft Technologies.
Ronald P. Spogli (age 50) became a director and Chairman of the Board of
the Company in May 1993. Mr. Spogli is a founding partner of Freeman Spogli &
Co, ("FS&Co."). He is also a director of Advance Stores Company, Inc., AFC
Enterprises, Inc., Buttrey Food and Drug Stores Company, Calmar Inc., and
Hudson Respiratory Care Inc.
2
<PAGE>
Class A Directors
Louis A. Guzzetti, Jr. (age 59) has been a director and President and
Chief Executive Officer of the Company since October 1986.
Jeffrey G. Miller (age 56) 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 was of counsel to the Seattle and
Washington D.C. law firm of Perkins Coie from 1987 to 1997 practicing
environmental law. Mr. Miller was a director of Envirosafe from 1987 until
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 as a director on May 13, 1993
pursuant to the terms of the purchase agreement by which an affiliate of FS&Co.
acquired its interest in the Company.
Jon D. Ralph (age 33) has been a director of the Company since August
1993. Mr. Ralph joined FS&Co. in August 1989. Mr. Ralph is also a director of
Hudson Respiratory Care Inc. and The Pantry, Inc.
Class B Directors
Wallace B. Askins (age 67) 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. Mr. Askins is a director of Trump Hotel & Casino Resorts, Inc.
John M. Roth (age 39) became a director of the Company in May 1993. Mr.
Roth joined FS&Co. in March 1988 and became a general partner in March 1993.
Mr. Roth is also a director of Advance Stores Company, Inc., AFC Enterprises,
Inc. and Calmar Inc.
J. Frederick Simmons (age 43) became a director of the Company in May
1993. Mr. Simmons joined FS&Co. in 1986 and became a general partner in January
1991. He is also a director of Advance Stores Company, Inc. and Buttrey Food
and Drug Stores Company.
Other Information as to Directors
During the fiscal year ended December 31, 1997, the Board of Directors
held five meetings. During 1997 each director attended at least 75% of the
number of meetings of the Board and of the committees of the Board on which he
served.
The Board of Directors has an Executive Committee, consisting of Messrs.
Guzzetti, Simmons and Spogli; an Audit Committee, consisting of Messrs. Askins,
Gurnitz and Miller; 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 1997, the Executive Committee held no meetings.
The primary function of the Audit Committee, which held two meetings
during 1997, 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
stock option plans, 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 1997.
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
3
<PAGE>
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 reelection to
the Board of Directors in August 1993, the Company amended Mr. Miller's option
to provide that his option would remain in effect, as if he had not resigned,
during the period from May 13, 1993 until such reelection. 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.
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. Mr. Askins
elected to receive options to purchase shares of Common Stock in lieu of his
annual director's fees for 1997, and both Mr. Askins and Mr. Gurnitz elected to
receive options to purchase shares of Common Stock in lieu of their annual
directors' fees for 1998.
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, 1998, the following persons were
the beneficial owners of more than 5% of the outstanding shares of the Common
Stock of the Company.
Number of
Shares
Name and Address Beneficially Percent
of Beneficial Owner(l) Owned of Class
- -------------------------------------------- -------------- ---------
FS Equity Partners II, L.P.
c/o Freeman Spogli & Co.(2) ............... 19,187,095 47.1%
11100 Santa Monica Blvd.
Suite 1900
Los Angeles, CA 90025
Gabelli Funds, Inc.(3) ..................... 2,980,270 7.3%
One Corporate Center
Rye, NY 10580-1434
The IBM Retirement Plan Trust Fund ......... 2,678,333 6.6%
262 Harbor Place
Stamford, CT 06904-2399
- ------------
(1) To the best of the Company's knowledge, except as otherwise indicated
herein, the persons named in the table have sole voting and investment
power with respect to all shares of Common Stock shown as beneficially
owned by them.
(2) FS&Co., as general partner of FS Equity Partners II, L.P. ("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 Common
Stock indicated as beneficially owned by FSEP.
(3) Gabelli Funds, Inc. and its Chairman, CEO and majority stockholder, Mario
J. Gabelli, Jr., may be deemed to have beneficial ownership of these
shares. The shares are held with sole voting and investment power by
Gabelli Funds, Inc. or its affiliates, except for 80,000 shares which are
held without voting power and 150,000 shares as to which the voting power
is contingent.
4
<PAGE>
Security Ownership of Management
As of April 1, 1998, the following directors, executive officers and all
directors and executive officers as a group, were the beneficial owners of
shares of Common Stock of the Company as follows:
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as of
April 1, 1998(1)
-------------------------------
Number of Percent
Name and Position with Company Shares of Class
- -------------------------------------------------------------------------- ------------------- ---------
<S> <C> <C>
Class A Directors
Louis A. Guzzetti, Jr., President and Chief Executive Officer ......... 797,489(2) 1.9%
Jeffrey G. Miller ..................................................... 35,000(3) *
Jon D. Ralph .......................................................... -- --
Class B Directors
Wallace B. Askins ..................................................... 126,501(3) *
John M. Roth(4) ....................................................... 19,187,095 47.1%
J. Frederick Simmons(4) ............................................... 19,187,095 47.1%
Class C Directors
Raymond P. Caldiero ................................................... 35,000(3) *
Robert N. Gurnitz ..................................................... -- --
Ronald P. Spogli, Chairman of the Board(4) ............................ 19,187,095 47.1%
Other Four Most Highly Compensated Executive Officers
Aarne Anderson .......................................................... 113,471(2) *
George E. Fuehrer ....................................................... 237,083(2) *
Leon Z. Heller .......................................................... 31,109(2) *
James C. Hull ........................................................... 142,953(2) *
All directors and executive officers as a group (15 persons) ............. 20,768,413(5) 49.9%
</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 Common Stock shown as
beneficially owned by them.
(2) Includes (i) shares for which options under the EnviroSource Incentive
Stock Option Plan and EnviroSource 1993 Stock Option Plan are exercisable
by executive officers within 60 days, as follows: Mr. Guzzetti, 380,306
shares; Mr. Anderson, 67,063 shares; Mr. Fuehrer, 161,580 shares; Mr.
Heller, 11,532 shares; and Mr. Hull, 73,463 shares; and (ii) shares held
through the EnviroSource, Inc. Savings Plan and EnviroSource, Inc. Profit
Sharing Plan as of December 31, 1997, as follows: Mr. Guzzetti, 109,158
shares; Mr. Anderson, 33,408 shares; Mr. Fuehrer, 45,353 shares; Mr.
Heller, 18,577 shares; and Mr. Hull, 67,990 shares.
(3) 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, 110,145 shares; Mr. Caldiero,
35,000 shares; and Mr. Miller, 35,000 shares.
(4) All shares shown as beneficially owned are held 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 held by
FSEP.
(5) Includes (i) 901,686 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; and (ii) 307,101 shares held through the
EnviroSource, Inc. Savings Plan or the EnviroSource, Inc. Profit Sharing
Plan as of December 31, 1997.
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. ......... 1997 $410,459 $ 0 0 $ 30,023(1)
Chief Executive Officer 1996 409,161 0 70,000 34,763(2)
1995 403,000 103,000 106,640 39,612(3)
Aarne Anderson ................. 1997 157,830 0 0 11,824(1)
Vice President, Taxes 1996 147,234 0 8,600 13,228(2)
1995 144,675 28,000 13,330 14,399(3)
George E. Fuehrer .............. 1997 183,125 237,500(4) 0 18,656(1)
Senior Vice President, Planning 1996 182,694 0 26,880 21,454(2)
and Business Development 1995 180,375 65,000 26,660 15,611(3)
Leon Z. Heller ................. 1997 123,011 0 0 13,530(1)
Vice President, General 1996 115,208 0 12,000 12,727(2)
Counsel and Secretary 1995 106,975 43,500 0 12,225(3)
James C. Hull .................. 1997 198,117 0 0 19,406(1)
Vice President and Chief 1996 197,716 0 14,000 21,136(2)
Financial Officer 1995 195,250 45,000 21,330 22,963(3)
</TABLE>
- ------------
(1) Includes Company contributions to accounts in the EnviroSource, Inc.
Savings Plan, as follows: Mr. Guzzetti, $9,500; Mr. Anderson, $4,434; Mr.
Fuehrer, $9,500; Mr. Heller, $7,380; and Mr. Hull, $9,500; Company
contributions to accounts in the EnviroSource, Inc. Profit Sharing Plan of
$8,000 each for Messrs. Guzzetti, Fuehrer, and Hull, $7,390 for Mr.
Anderson, and $6,150 for Mr. Heller; and Company contributions to accounts
in the EnviroSource, Inc. Supplemental Executive Retirement Plan, as
follows: Mr. Guzzetti, $12,523; Mr. Fuehrer, $1,156; and Mr. Hull, $1,906.
(2) Includes Company contributions to accounts in the EnviroSource, Inc.
Savings Plan, as follows: Mr. Guzzetti, $9,000; Mr. Anderson, $4,411; Mr.
Fuehrer, $9,000; Mr. Heller, $4,750; and Mr. Hull, $9,000; Company
contributions to accounts in the EnviroSource, Inc. Profit Sharing Plan of
$7,500 each for Messrs. Guzzetti, Anderson, Fuehrer, Heller, and Hull; and
Company contributions to accounts in the EnviroSource, Inc. Supplemental
Executive Retirement Plan, as follows: Mr. Guzzetti, $18,263; Mr.
Anderson, $1,317; Mr. Fuehrer, $4,954; Mr. Heller, $477; and Mr. Hull,
$4,636.
(3) Includes Company contributions to accounts in the EnviroSource, Inc.
Savings Plan, as follows: Mr. Guzzetti, $9,000; Mr. Anderson, $4,340; Mr.
Fuehrer, $2,060; Mr. Heller, $4,816; and Mr. Hull, $9,000; Company
contributions to accounts in the EnviroSource, Inc. Profit Sharing Plan of
$7,500 each for Messrs. Guzzetti, Anderson, Fuehrer, and Hull, and $7,409
for Mr. Heller; and Company contributions to accounts in the EnviroSource,
Inc. Supplemental Executive Retirement Plan, as follows: Mr. Guzzetti,
$23,112; Mr. Anderson, $2,559; Mr. Fuehrer, $6,051; and Mr. Hull, $6,463.
(4) Represents a special bonus paid to Mr. Fuehrer in connection with the sale
of the Company's former subsidiary, IMSAMET, Inc. Substantially all of the
bonus, after taxes, was applied toward principal and interest that had
accrued on the Company's 1989 loan to Mr. Fuehrer in connection with a
purchase of Common Stock. See "Certain Transactions; Compensation
Committee Interlocks and Insider Participation--Employee Loans" for a more
detailed description of the 1989 loan to Mr. Fuehrer.
6
<PAGE>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The following table sets forth the number and value at December 31, 1997
of all exercisable and unexercisable options held by the Chief Executive
Officer and the other four most highly compensated executive officers of the
Company under the Company's Incentive Stock Option Plan and the 1993 Stock
Option Plan. In 1997, none of the named executive officers exercised or were
granted any options.
Number of
Shares Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
----------------- -----------------
Exercisable/ Exercisable/
Name Unexercisable Unexercisable(1)
- -------------------------------- ----------------- -----------------
Louis A. Guzzetti, Jr. ......... 361,426/98,214 $15,000/$--
Aarne Anderson ................. 59,754/12,176 5,000/--
George E. Fuehrer .............. 163,733/30,807 10,000/--
Leon Z. Heller ................. 10,866/10,134 1,000/--
James C. Hull .................. 61,687/19,643 10,000/--
- ------------
(1) The value of unexercised in-the-money options represents the difference
between the fair market value of the underlying Common Stock as of
December 31, 1997 and the exercise price of such options.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors is composed of two
independent 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, 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, increased to as much as 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 1997 and
1998 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
7
<PAGE>
nonfinancial 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.
With the exception of the special bonus paid to Mr. Fuehrer (see "Summary
Compensation Table"), no bonuses were awarded to executive officers for
1997 because the Company did not achieve the required level of operating
income.
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.
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 1997,
the Chief Executive Officer received no increase in his base compensation.
Compensation and Stock Option
Committee
WALLACE B. ASKINS
RAYMOND R CALDIERO
JOHN M. ROTH
J. FREDERICK SIMMONS
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Performance Graph
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 Dow Jones
Industrial-Diversified Index assuming $100 was invested on December 31, 1992.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ENVIROSOURCE, INC., THE RUSSELL 2000 INDEX
AND THE DOW JONES INDUSTRIAL-DIVERSIFIED INDEX
300 _______________________________________________________________________
__
250 ______________________________________________________*________________
249
__
^ 214
D 200 _____________________________________________190_______________________
*
O __ ^
150 175
L 150 ____________________________________*^_________________________________
147
L __ 122 117
^* 112
A 100 _____@^*_______119________^*___________________________________________
R __
@ @
S 50 ________________68________65________@_________@_________@_60___________
60 54
__
0 ______|_________|_________|_________|_________|_________|_________|____
12/92 12/93 12/94 12/95 12/96 12/97
------------------------------------------------------------------------
ENVIROSOURCE, INC. RUSSELL 2000 DOW JONES INDUSTRIAL-DIVERSIFIED
___@___ ---^--- ....*....
------------------------------------------------------------------------
* $100 INVESTED ON 12/31/92 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
9
<PAGE>
Certain Transactions; Compensation Committee Interlocks and Insider
Participation
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, respectively. In each of 1991 and 1992, the Company deferred the
principal installment payment then due, extended the maturity of the 1986 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 to 6% per annum, payable annually half in cash and half by adding to the
principal amount of the 1986 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. Effective March 31, 1998, the Company extended
the maturity date of the 1986 Loan to March 31, 1999. The outstanding principal
amount (including financed interest payments) of the 1986 Loan as of April 1,
1998 was $501,603.
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, and $220,000 to Mr. Fuehrer. 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. Effective March 31,
1998, the Company extended the maturity date of each of the loans to March 31,
1999. The aggregate principal amounts (including financed interest payments) of
such loans as of April 1, 1998 were $511,123 for Mr. Guzzetti, $131,432 for Mr.
Anderson, and $200,754 for Mr. Fuehrer.
In January 1998, the Company loaned $2,736 to Mr. Anderson in connection
with his personal purchase of computer equipment. Payments of principal are due
semi-monthly at the rate of $57.00, with a final payment due on January 31,
2000. If payments of principal are timely made, interest will not accrue on
this indebtedness.
The loan terms described above are not normally obtainable from
unaffiliated third parties.
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.
10
<PAGE>
PROPOSAL 2
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Board of Directors has unanimously approved, and recommends that the
stockholders approve, amendments (the "Charter Amendments") to the Company's
Amended and Restated Certificate of Incorporation (the "Charter") to: (a)
effect a reverse split (the "Reverse Stock Split") of the outstanding shares of
the Company's Common Stock (the "Common Stock") on the basis of one new share
of Common Stock for each seven shares of presently outstanding Common Stock;
(b) reduce the authorized number of shares of Common Stock from 60,000,000
shares to 20,000,000 shares (the "Authorized Shares Change"); and (c) change
the name of the Company from "EnviroSource, Inc." to "Envirosource, Inc." (the
"Name Change"). The operative text of the Charter Amendments is reprinted
hereinbelow.
Assuming that the Charter Amendments are approved, a Certificate of
Amendment to the Charter will be filed with the Secretary of State of the State
of Delaware as promptly as practicable thereafter. The Charter Amendments and
the proposed Reverse Stock Split, Authorized Shares Change and Name Change
would become effective upon the date of filing (the "Effective Date").
Stockholders are being asked to approve the Charter Amendments as a whole, and
so none of the Reverse Stock Split, Authorized Shares Change or Name Change can
be approved or become effective separate from each other.
The Proposed Reverse Stock Split. The primary purpose of the Reverse Stock
Split is to increase the market value per share of the Common Stock. The Nasdaq
Stock Market ("Nasdaq") has adopted certain changes to its standards for
maintaining National Market System ("NMS") listings. One of these changes
applicable to the Company is a requirement that the minimum bid price of the
Common Stock be $5.00 per share. The Company meets all the applicable
requirements for the continued listing of the Common Stock on The Nasdaq NMS,
except that the Common Stock currently trades below $5.00 per share. The
reduction in the number of shares of Common Stock outstanding caused by the
Reverse Stock Split presumably will increase the per share market price of the
Common Stock and, accordingly, will allow the Common Stock to qualify for
continued listing on the Nasdaq NMS.
The Reverse Stock Split also should enhance the acceptability of the
Common Stock by the financial community and investing public. Theoretically,
the number of shares outstanding should not, by itself, affect the Company's
reputation in the financial community, but in practice this is not necessarily
the case, as many investors look upon a stock trading below $5.00 as unduly
speculative in nature and, as a matter of policy or practice, avoid investments
in such stocks. The Company also believes that the current per share price of
the Common Stock has reduced the effective marketability of the shares because
of the reluctance of many leading brokerage firms to recommend low-priced
securities to their clients. Further, various brokerage house policies and
practices tend to discourage individual brokers within firms from dealing in
low-priced stocks. Some of those policies and procedures pertain to the payment
of brokers' commissions and to time-consuming procedures that function to make
the handling of low-priced stocks economically unattractive to brokers. In
addition, the structure of trading commissions tends to have an adverse impact
upon holders of low-priced stocks because the brokerage commission on a sale of
a low-priced stock generally represents a higher percentage of the sales price
than the commission on higher priced issues. The Company also believes that
many or most brokers and other "margin loan" makers are unwilling to lend
against stock trading below $5.00 per share. The Company believes that all of
the foregoing factors tend to depress the market for the Common Stock.
Although there can be no assurance that the price of the Common Stock
after the Reverse Stock Split will actually increase in an amount proportionate
to the decrease in the number of outstanding shares, the proposed Reverse Stock
Split is intended to result in a price level for the Common Stock that will
mitigate or eliminate the foregoing factors that impact the market for the
Common Stock. There is also no assurance that the market for the Common Stock
will be improved. Stockholders should note that the Company cannot predict what
actual effect the Reverse Stock Split will have on the market price of the
Common Stock.
Based on the 40,713,765 shares of Common Stock that were outstanding on
April 1, 1998, the proposed Reverse Stock Split would decrease the outstanding
shares of Common Stock by approximately 85.7%, and thereafter approximately
5,816,252 shares of Common Stock would be outstanding (disregarding the
elimination of fractional shares, as described below). The Reverse Stock Split
would not affect the proportionate equity interest in the Company of any holder
of Common Stock, except as may result from the provisions for the elimination
of fractional shares as described below.
11
<PAGE>
The Reverse Stock Split may leave certain stockholders with "odd lots" of
the Company's Common Stock, i.e., stock in amounts of less than 100 shares.
These shares may be more difficult to sell, or require a greater commission per
share to sell, than shares in even multiples of 100.
As of April 1, 1998, there were outstanding options to purchase an
aggregate of 2,031,860 shares of Common Stock pursuant to Company employee
stock option plans. All of the outstanding options are subject to provisions
for adjustments in the number of shares covered thereby, and the exercise price
thereof, in the event of a reverse stock split. If the proposed Reverse Stock
Split is approved and effected, each of the outstanding options would
thereafter evidence the right to purchase one-seventh of the shares of Common
Stock previously covered thereby and the exercise price per share would be
proportionately increased.
Post-Reverse Stock Split Common Stock will entitle the holder thereof to
one vote per share and will otherwise be identical to the Common Stock prior to
such event.
The Proposed Change in Authorized Shares. Presently, the Company is
authorized to issue up to 65,620,000 shares, of which 60,000,000 are Common
Stock and 5,620,000 are Preferred Stock. The Charter Amendment will reduce the
number of shares of Common Stock authorized by the Charter to 20,000,000 shares
of Common Stock. The number of authorized shares of Preferred Stock will not be
reduced or otherwise affected. If the number of authorized shares of Common
Stock was reduced in proportion to the one-for-seven Reverse Stock Split, the
number of authorized shares after the Reverse Stock Split would be 8,571,429.
Because, instead, 20,000,000 shares will be authorized, the percentage
ownership of the Company represented by the authorized but unissued shares, if
they are issued in the future at the discretion of the Board of Directors,
effectively will be increased. The primary objective of this effective increase
is to give the Company additional shares of Common Stock authorized and
available for issuance as the need may arise for possible future financing
transactions, stock acquisitions, asset purchases, and other general corporate
purposes. Although there are currently no plans or proposals to effect any
such transactions or issue additional shares of Common Stock, the Board of
Directors believes that this effective increase will benefit the Company and
its stockholders by providing enhanced flexibility to issue shares of Common
Stock to meet the Company's future needs. In order to avoid the delay and
expense involved in obtaining stockholder approval, the Board of Directors
believes it to be in the best interests of the Company and its stockholders to
have shares of stock authorized and available for issuance without
further action by the stockholders. Shares of Common Stock may then be issued
on such terms, at such times and on such conditions as the Board of Directors
may determine in its discretion.
The Proposed Name Change. The Company is proposing the Name Change, which
merely changes the "S" in EnviroSource to a lower case letter, as part of a
logo redesign and corporate identity program.
Exchange of Stock Certificates and Elimination of Fractional Share
Interests. As soon as possible after the Effective Date, the holders of Common
Stock will be notified and requested to surrender their present Common Stock
certificates for new certificates, which will reflect the Name Change and bear
a new CUSIP number, representing the number of whole shares of Common Stock
after giving effect to the Reverse Stock Split ("post-Amendment Certificates").
The Company will bear the Exchange Agent charges incurred in connection with
such exchanges.
Until stock certificates representing the pre-Reverse Stock Split shares
of Common Stock ("pre-Amendment Certificates") are surrendered and exchanged
for post-Amendment Certificates, each pre-Amendment Certificate will be deemed
to represent the number of shares of Common Stock that the holder thereof is
entitled to receive as a result of the Reverse Stock Split in respect of the
number of shares indicated as being represented by such pre-Amendment
Certificate.
No scrip or fractional share certificates will be issued in connection
with the Reverse Stock Split. In lieu thereof, each stockholder who would
otherwise be entitled to receive any fractional shares of Common Stock
resulting from the Reverse Stock Split will receive cash equal to the "Current
Market Value" of such fractional shares. For these purposes, Current Market
Value shall be based upon the average of the closing sale prices for the Common
Stock for the 20 consecutive Nasdaq trading days immediately preceding the
Effective Date.
American Stock Transfer and Trust Company, 40 Wall Street, New York, NY
10005, will be the Company's Exchange Agent in connection with the exchange of
stock certificates and the forwarding of checks for cash in lieu of fractional
shares. Stockholders should not submit any certificates until requested to do
so.
12
<PAGE>
Federal Income Tax Consequences. The following is a summary of the
federal income tax consequences of the proposed Reverse Stock Split. This
summary does not purport to be complete and does not address the tax
consequences to holders that are subject to special tax rules, such as banks,
insurance companies, regulated investment companies, personal holding
companies, foreign entities, nonresident alien individuals, broker-dealers and
tax exempt entities. This summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations and proposed regulations,
court decisions and current administrative rulings and pronouncements of the
Internal Revenue Service ("IRS"), all of which are subject to change, possibly
with retroactive effect, and assumes that the shares of Common Stock are and
will be held as a "capital asset" (generally, property held for investment) as
defined in the Code.
1. The Reverse Stock Split will qualify as a recapitalization described in
Section 368(a)(1)(E) of the Code.
2. No gain or loss will be recognized by the Company in connection with the
Reverse Stock Split (except as provided in 6 below).
3. No gain or loss will be recognized by a stockholder who exchanges
pre-Amendment Certificates for post-Amendment Certificates.
4. The aggregate basis of the shares to be received in the Reverse Stock
Split will be the same as the aggregate basis of the pre-Reverse Stock
Split shares exchanged therefor.
5. The holding period of the shares to be received in the Reverse Stock
Split will include the holding period of the pre-Reverse Stock Split
shares exchanged therefor.
6. A holder of Common Stock receiving cash in lieu of a fractional share
will be treated as receiving the payment in connection with a redemption
of fractional shares, with the tax consequences of the redemption
determined under Section 302 of the Code. As such, a holder of such Common
Stock will generally recognize capital gain or loss upon such payment
equal to the difference, if any, between such stockholder's basis in the
fractional share (as described in 4 above) and the amount of cash
received.
THE DISCUSSION SET FORTH ABOVE CONCERNING CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE REVERSE STOCK SPLIT IS INCLUDED HEREIN FOR GENERAL
INFORMATION ONLY. ALL STOCKHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX
ADVISORS AS TO ANY FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES APPLICABLE
TO THEM THAT COULD RESULT FROM THE REVERSE STOCK SPLIT.
Board of Directors Reservation of Rights. The Board of Directors reserves
the right to abandon the proposed Charter Amendments without further action by
the stockholders at any time prior to the filing of the Charter Amendments with
the Delaware Secretary of State, notwithstanding any authorization of the
Charter Amendments by the stockholders.
The Proposed Charter Amendments. The Charter Amendments are set forth
below:
1. Reduction in Authorized Shares. Delete Article FOURTH, paragraph (a) in
its entirety and insert in lieu thereof the following new Article FOURTH,
paragraph (a), to read in its entirety as follows:
FOURTH: (a) The total number of shares of all classes of stock which
the Corporation is authorized to issue is 25,620,000, consisting of
20,000,000 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").
2. Reverse Stock Split. Amend Article FOURTH by adding a new paragraph (d)
at the end thereof, to read in its entirety as follows:
(d) Effective as of the close of business on the day that the
Certificate of Amendment which contains this provision is filed with the
Office of the Secretary of State of the State of Delaware (the
"Effective Date"), each whole share of Common Stock issued and
outstanding at such time shall be and hereby is automatically
reclassified and changed into one-seventh ( 1/7) of one share of Common
Stock (the "Reverse Stock Split"); provided, however, that: (i) no
fractional shares shall be issued pursuant to the Reverse Stock Split,
(ii) any fractional
13
<PAGE>
shares resulting from the Reverse Stock Split will be cancelled, and
(iii) any stockholder who would otherwise be entitled to receive
fractional shares as a result of the Reverse Stock Split will receive,
in lieu thereof, cash (without any interest) in an amount equal to the
Current Market Value (as hereinafter defined) of the shares of the
Common Stock which resulted in such fractional shares. For purposes
hereof, the term "Current Market Value" means the average of the closing
sale prices, as reported by The Nasdaq Stock Market ("Nasdaq"), of the
Common Stock on each of the 20 consecutive Nasdaq trading days that ends
with the Nasdaq trading day that immediately precedes the Effective
Date.
3. Name Change. Delete Article FIRST in its entirety and insert in lieu
thereof the following new Article FIRST, to read in its entirety as follows:
FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is
Envirosource, Inc.
The Board of Directors recommends that the stockholders vote FOR the
Amendments to the Company's Certificate of Incorporation.
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, 1998. 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, 1998.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of the Company's
Common Stock, to file with the Securities and Exchange Commission initial
reports of beneficial ownership and reports of changes in beneficial ownership
of the Company's Common Stock and derivative securities. Based solely upon a
review of the copies of the forms furnished to the Company, or written
representations from reporting persons, the Company believes that during 1997
all filing requirements applicable to officers and directors were met.
OTHER MATTERS
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 matter. 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 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
14
<PAGE>
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 1999 Annual
Meeting of Stockholders must be received at the Company's principal executive
offices on or before January 4, 1999 for inclusion in the Company's Proxy
Statement with respect to such meeting.
By Order of the Board of Directors,
[GRAPHIC OMITTED]
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, 1997 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., 1155 BUSINESS CENTER DRIVE, HORSHAM,
PA 19044-3454.
15
<PAGE>
ENVIROSOURCE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders to be held at
The Homestead Restaurant, Three Village Road,
Horsham, Pennsylvania on June 18, 1998 at 10:00 A.M.
The undersigned hereby constitutes and appoints Louis A. Guzzetti, Jr.,
Leon Z. Heller and James C. Hull, and each of them, proxies for the undersigned,
with full power of substitution, to vote all shares of Common 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 18, 1998 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 VOTE "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 completed and signed on reverse side)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders,
ENVIROSOURCE, INC.
June 18, 1998
+ Please Detach and Mail in the Envelope Provided +
- --------------------------------------------------------------------------------
A [X] Please mark your votes as in this example.
FOR WITHHOLD
1. Election of Class C Directors [ ] [ ]
(Instructions: To withhold authority to vote for any individual nominee, print
that nominee's name on the line provided below.)
______________________________________________________________________________
Nominees: Raymond P. Caldiero
Robert N. Gurnitz
Ronald P. Spogli
FOR AGAINST ABSTAIN
2. Approval of amendments to the Company's
Certificate of Incorporation [ ] [ ] [ ]
3. Ratification and approval of selection of
Ernst & Young LLP as the Company's
independent accountants [ ] [ ] [ ]
Dated__________________________________________________________________, 1998
_____________________________________________________________________________
Signature
_____________________________________________________________________________
Signature if held jointly
(Please sign exactly as the name appears herein. 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.
