<PAGE> 1
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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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
VERITAS DGC 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 the table below per Exchange Act Rules 14a-6(i)(4) and O-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 O-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 O-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by Registration Statement No.,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
[VERITAS LOGO]
VERITAS DGC INC.
3701 KIRBY DRIVE
HOUSTON, TEXAS 77098
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 9, 1998
--------------
Notice is hereby given that the annual meeting of the holders of common stock of
Veritas DGC Inc. (the "Company") and the holders of exchangeable shares of
Veritas Energy Services Inc., a wholly-owned subsidiary of the Company ("VES"),
which holders are collectively referred to herein as "stockholders," will be
held at the offices of the Company, 3701 Kirby Drive, Houston, Texas, 77098, on
Wednesday, December 9, 1998 at 10:00 a.m., Houston time, for the following
purposes:
1) To elect a board of ten directors to serve until the next
annual meeting of stockholders or until their successors are
elected and qualify; and
2) To consider and act upon such other business as may properly
be presented to the meeting.
A record of stockholders has been taken as of the close of business on October
26, 1998 and only those stockholders of record on that date will be entitled to
notice of and to vote at the meeting. A stockholders' list will be available
commencing November 23, 1998 and may be inspected during normal business hours
prior to the annual meeting at the offices of the Company, 3701 Kirby Drive,
Houston, Texas, 77098.
If you do not expect to be present at the meeting, please sign and date the
enclosed proxy and return it promptly in the enclosed stamped envelope, which
has been provided for your convenience. The prompt return of proxies will ensure
a quorum and save the Company the expense of further solicitation.
By Order of the Board of Directors,
/s/ ALLAN C. POGACH
Allan C. Pogach
Secretary
November 2, 1998
<PAGE> 3
VERITAS DGC INC.
3701 KIRBY DRIVE
HOUSTON, TEXAS 77098
PROXY STATEMENT
This proxy statement is being mailed to stockholders commencing on or about
November 2, 1998 in connection with the solicitation by the board of directors
of the Company of proxies to be voted at the annual meeting of stockholders to
be held in Houston, Texas, on December 9, 1998, and at any adjournment thereof,
for the purposes set forth in the accompanying notice.
As of October 26, 1998, the record date for the determination of stockholders
entitled to vote at the meeting, there were outstanding and entitled to vote
21,322,310 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), and 1,304,826 VES exchangeable shares (collectively, the
"Shares"). The Shares vote together as a single class, and each Share entitles
the holder to one vote, on all matters presented at the meeting. Holders of a
majority of the outstanding Shares must be present, in person or by proxy, to
constitute a quorum for the transaction of business.
Proxies will be voted in accordance with the directions specified thereon and in
accordance with the judgment of the persons designated as proxies on other
matters that may properly come before the meeting. Management does not expect
that any matters other than those referred to in this proxy statement will be
presented for action at the meeting. Any proxy on which no direction is
specified will be voted for the election of the nominees named herein to the
board of directors. Abstentions will be treated as present for purposes of
determining whether a quorum is present. A stockholder may revoke a proxy by (i)
delivering to the Company written notice of revocation, (ii) delivering to the
Company a signed proxy of a later date, or (iii) appearing at the meeting and
voting in person. Votes will be tabulated, and the results will be certified by
election inspectors who are required to resolve impartially any interpretive
questions as to the conduct of the vote.
The cost of soliciting proxies in the accompanying form will be borne by the
Company. In addition to solicitations by mail, regular employees of the Company
may, if necessary to assure the presence of a quorum, solicit proxies by
telephone.
<PAGE> 4
DIRECTORS
ELECTION OF DIRECTORS
At the meeting, ten nominees are to be elected, each director to hold office
until the next annual meeting of stockholders or until his successor is elected
and qualifies. The persons named in the accompanying proxy have been designated
by the board of directors, and, except as otherwise indicated or unless
authority is withheld, they intend to vote for the election of the nominees
named. With the exception of Mr. Rask, all of the nominees previously have been
elected directors by the stockholders. If any nominee should become unavailable
for election, the proxy may be voted for a substitute nominee selected by the
persons named in the proxy or the board may be reduced accordingly; however, the
board of directors is not aware of any circumstances likely to render any
nominee unavailable.
The ten nominees who receive the greatest number of votes cast for election by
the holders of Shares entitled to vote and present, in person or by proxy, at
the annual meeting shall be the duly elected directors of the Company. The board
of directors recommends a vote FOR all ten nominees to the Company's board of
directors.
NOMINEES
Certain information concerning nominees is set forth below:
<TABLE>
<CAPTION>
PRINCIPAL POSITION WITH DIRECTOR
NAME(1) THE COMPANY AGE SINCE MEMBER OF
- ---------------------- --------------------------- ------- ----------- ---------------------------------------
<S> <C> <C> <C> <C>
Clayton P. Cormier Director 66 1991 Audit Committee
Ralph M. Eeson Director 50 1996 Audit, Nominating and Health, Safety
and Environment Committees
Lawrence C. Fichtner Director and executive
vice-president 53 1996 Health, Safety and Environment
Committee
James R. Gibbs Director 54 1997 Audit and Nominating Committees
Steven J. Gilbert Director 51 1991 Compensation Committee
Stephen J. Ludlow Director, president and
chief operating officer 48 1994 -
Brian F. MacNeill Director 59 1996 Compensation and Nominating Committees
Jan Rask Director nominee 43 - -
David B. Robson Chairman of the board 59 1996 Nominating Committee
and chief executive
officer
Jack C. Threet Director 70 1991 Compensation and Health, Safety and
Environment Committees
</TABLE>
- --------------------
(1) See "Other Information - Certain Stockholders" for Shares beneficially
owned by each nominee as of September 30, 1998.
Clayton P. Cormier is currently a financial and insurance consultant. From 1986
to 1991, Mr. Cormier was a senior vice-president in the oil and gas division of
Johnson & Higgins, an insurance broker, and previously served as chairman of the
board, president, and chief executive officer of Ancon Insurance Company, S.A.
and as an assistant treasurer of Exxon.
Ralph M. Eeson has been co-owner and chief executive officer of Kids Only
Clothing Club Inc., a manufacturer and a direct seller of children's and adult
clothing, since 1991. From 1977 to 1991, he was a senior partner at Code Hunter,
Barristers and Solicitors, Calgary.
Lawrence C. Fichtner became executive vice-president - corporate communications
of the Company in August 1996, upon consummation of the business combination
between the Company and VES (the "Combination"). Prior thereto, he had been
executive vice-president of VES or its predecessors since 1978. During the ten
years prior to joining VES, he held various positions as a geophysicist with
Geophysical Services Inc., Texaco Exploration Ltd. and Bow Valley Exploration
Ltd.
James R. Gibbs has been president and chief executive officer of Frontier Oil
Corporation, an oil refining and marketing company and formerly Wainoco Oil
Corporation, since 1992 and has been employed there for over fifteen years. Mr.
Gibbs is a director of Smith International and is an advisory director of Frost
Bank - Houston.
2
<PAGE> 5
Steven J. Gilbert is chairman of Gilbert Global Equity Partners, L.P. From 1992
to 1997 he was managing general partner of Soros Capital L.P., the principal
venture capital and leveraged transaction entity of Quantum Group of Funds, and
was a principal advisor to Quantum Industrial Holdings Ltd. He has also been the
managing director of Commonwealth Capital Partners, L.P., a private equity
investment fund. From 1984 to 1988, Mr. Gilbert was the managing general partner
of Chemical Venture Partners, which he founded. Mr. Gilbert is a director of NFO
Worldwide, Inc., The Asian Infrastructure Fund, Peregrine Indonesia Fund, Inc.,
Terra Nova (Bermuda) Holdings Ltd., Sydney Harbour Casino Holdings, Ltd. and
UroMed Corporation.
Stephen J. Ludlow became president and chief operating officer of the Company in
August 1996, upon consummation of the Combination. He has been employed by the
Company for 25 years and served as president and chief executive officer of the
Company from 1994 to 1996. Prior to 1994, he served as executive vice-president
of the Company for four years following eight years of service in a variety of
progressively more responsible management positions, including several years of
service as the executive responsible for operations in Europe, Africa and the
Middle East.
Brian F. MacNeill has been president and chief executive officer of Enbridge
Inc., a crude oil and liquids transportation and natural gas distribution
company and formerly IPL Energy Inc. ("IPL"), since 1991. He was executive
vice-president and chief operating officer of IPL or its predecessors from 1990
to 1991 and previously served as chief financial officer of Interhome Energy,
Inc. and Home Oil Company Limited and as vice-president and treasurer of Hiram
Walker Resources Ltd.
Jan Rask has been president, chief executive officer and director of Marine
Drilling Companies, Inc. since July 1996. Mr. Rask served as president and chief
executive officer of Arethusa (Off-Shore) Limited ("Arethusa") from May 1993
until the acquisition of Arethusa by Diamond Offshore Drilling, Inc. in April
1996. Mr. Rask joined Arethusa's principal operating subsidiary in 1990 as its
president and chief executive officer.
David B. Robson has been chairman of the board and chief executive officer of
the Company since consummation of the Combination in August 1996. Prior thereto,
he had held similar positions with VES or its predecessors since 1974. Mr.
Robson is also a director of Marine Drilling Companies, Inc.
Jack C. Threet is founder of Threet Energy Incorporated ("Threet Energy"), a
small independent oil and gas exploration, management and advice company. He is
a major shareholder of Threet Energy and serves as its president, chairman and
treasurer. He was formerly vice-president - exploration of Shell Oil Company.
Prior to his retirement from Shell Oil Company in 1987, Mr. Threet was also a
member of the boards of directors of several affiliates of Shell Oil Company. He
is now on the board of Citizens Bank - Pagosa Springs, Colorado.
BOARD AND COMMITTEE ACTIVITY, STRUCTURE AND COMPENSATION
During fiscal 1998, the board of directors convened on seven regularly and
specially scheduled occasions, and committees of the board held meetings as
follow: audit committee - two meetings; compensation committee - two meetings;
nominating committee - one meeting; and health, safety and environment committee
- - one meeting. The audit committee assists the board in assuring that the
accounting and reporting practices of the Company are in accordance with all
applicable requirements. The committee meets with the auditors to discuss the
scope of proposed audit work, matters pertaining to the audit and any other
matters that the committee or the auditors may wish to discuss. In addition, the
audit committee would recommend the appointment of new auditors to the board of
directors in the event future circumstances were to indicate that such action is
desirable. The compensation committee administers the Company's compensation
plans and recommends officers' compensation to the board for approval. The
nominating committee recommends nominees for election to the board of directors
at each annual meeting and to fill existing or anticipated vacancies in the
board's membership; stockholders who may wish to suggest individuals for
possible future consideration for board positions should direct recommendations
to the nominating committee of the board of directors at the Company's principal
offices. The health, safety and environment committee assists the board of
directors by overseeing the Company's environmental and occupational health and
safety policies and programs and monitoring related current and future
regulatory issues. With the exception of Steven J. Gilbert, all directors
attended at least 75% of the meetings held during the year by the board and each
committee on which he served.
Each director who is not otherwise compensated by the Company is paid an annual
fee of $15,000 plus travel expenses, if any, and a fee of $1,500 per board
meeting and committee meeting attended. The Company maintains a stock option
plan for non-employee directors (the "Director Plan") providing for stock
options to be granted to each non-employee director of the Company. Under the
Director Plan, each eligible director is granted options to purchase 10,000
shares of the Company's Common Stock on the date of the first meeting of the
board in each odd numbered year (the "Date of Grant"). In the case of a director
who is initially elected or appointed to the board between Dates of Grant, the
board may in its discretion grant an option to such director for a number of
shares of Common Stock not to exceed 10,000. The exercise price for each option
granted is the closing sale price of a share of Common Stock on the date of
grant. Each option will be exercisable on a
3
<PAGE> 6
cumulative basis as to 25% of the shares of Common Stock covered by such option
after the first through fourth anniversaries of the Date of Grant. All options
expire ten years after their date of grant.
EXECUTIVE OFFICERS
TENURE AND IDENTIFICATION
The executive officers of the Company serve at the pleasure of the board of
directors and are subject to annual appointment by the board at its first
meeting following the annual meeting of stockholders. In addition to Messrs.
Robson, Ludlow and Fichtner, who are listed under "Directors - Nominees," the
Company's executive officers include the following individuals (collectively,
"Executive Officers").
Anthony Tripodo, age 46, was appointed executive vice-president, chief
financial officer and treasurer of the Company in April 1997. Prior to
joining the Company, he was employed by Baker Hughes for sixteen years in
various financial management capacities, most recently as vice-president
of finance and administration for its Baker Performance Chemicals
Incorporated unit. Prior to his service with Baker Hughes, Mr. Tripodo
was employed by the accounting firm of Price Waterhouse from 1974 to
1980.
Rene M.J. VandenBrand, age 40, became vice-president - business
development of the Company in August 1996 upon consummation of the
Combination. Prior thereto, he had been vice-president - finance and
secretary of VES since November 1995, following two years of service in
comparable positions with Taro Industries Limited. He was previously a
partner of Coopers & Lybrand Chartered Accountants in Calgary.
EMPLOYMENT AGREEMENTS
In connection with the Combination, the Company assumed the obligation of the
employment agreements previously established between VES and Messrs. Robson and
Fichtner. These agreements were for one-year terms ending October 31, 1996. In
August 1996, the Company also entered into an employment agreement with Mr.
VandenBrand that was effective through August 1997. In April 1997, the Company
entered into employment agreements with Messrs. Ludlow and Tripodo that are
effective through March 1999. All of these agreements automatically renew for
successive one-year periods unless terminated by prior written notice of either
party. None of these employment agreements have been terminated. As of July 31,
1998, the Executive Officers are entitled to annual salaries under their
employment agreements as follows: Mr. Robson - $330,000; Mr. Ludlow - $265,000;
Mr. Fichtner - $150,000; Mr. Tripodo - $190,000; and Mr. VandenBrand - $156,000.
Within 30 days of termination without cause, each Executive Officer is entitled
to a one-time payment under his employment agreement equal to several months of
his salary as follows: Messrs. Robson, Ludlow and Fichtner - 24 months; Mr.
Tripodo - 18 months; and Mr. VandenBrand - 12 months. With the exception of Mr.
Tripodo, the Executive Officers are subject to non-compete agreements.
4
<PAGE> 7
COMPENSATION
The following table reflects all forms of compensation for services to the
Company for the years ended July 31, 1998, 1997 and 1996 of those individuals
who served as (i) the chief executive officer of the Company, or (ii) an
executive officer of the Company at an annual rate exceeding $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------------- -------------------------
AWARDS
-------------------------
RESTRICTED STOCK ALL OTHER
FISCAL STOCK OPTIONS COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER AWARDS (SHARES) SATION(1)
- --------------------------- -------- --------- ------------ ---------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
David B. Robson 1998 $297,916 $243,133(3) - - - -
Chief executive officer(2) 1997 239,583 188,982(4) - - 25,806 -
Stephen J. Ludlow 1998 $241,667 $175,038(3) - - - $4,000
President and chief 1997 208,312 148,828 - - 40,273 4,000
operating officer 1996 190,142 139,500 - - 16,000 4,000
Lawrence C. Fichtner 1998 $128,302 $ 94,791(3) - - - -
Executive 1997 109,520 114,730(4) - - 17,032 -
vice-president -
corporate
communications(2)
Anthony Tripodo 1998 $184,167 $132,171 - - - $ 792
Executive 1997 60,000 99,687 - $202,500(6) 17,778 -
vice-president, chief
financial officer and
treasurer(5)
Rene M.J. VandenBrand 1998 $152,500 $109,309 - - - $3,732
Vice-president - 1997 117,500 102,945(4) $31,250(7) - 12,387 3,463
business development(2)
</TABLE>
- ------------------------
(1) Represents Company contributions to the Executive Officer's account
pursuant to the Company's 401(k) Plan.
(2) Commenced employment with the Company on August 30, 1996.
(3) Includes value of Common Stock received in lieu of cash bonuses at a fair
market value of $16 11/16 per share, the closing price on date of payment,
as follows: Mr. Robson - 6,654 shares; Mr. Ludlow - 3,387 shares; and Mr.
Fichtner - 2,322 shares.
(4) Includes a bonus awarded during fiscal 1996 and paid during fiscal 1997 in
the following amounts: Mr. Robson - $7,081; Mr. Fichtner - $5,590; and Mr.
VandenBrand - $3,727.
(5) Commenced employment with the Company on April 1, 1997.
(6) Represents market value of 10,000 shares of restricted stock on the date of
grant. In general, 1/3 of these shares vests on April 1st of each of 1998,
1999 and 2000, if Mr. Tripodo is continuously employed by the Company
through such dates. Dividends, if any, declared by the Company are payable
to Mr. Tripodo on these 10,000 shares. As of July 31, 1998, there were
6,667 unvested shares remaining that had an aggregate value of $221,678.
(7) Includes a $10,000 relocation bonus and a domestic allowance for temporary
living expenses of $21,250 incurred during Mr. VandenBrand's relocation
from Calgary to Houston.
The following table sets forth information with respect to Executive Officers'
options to purchase shares of Common Stock, granted under the 1992 Amended and
Restated Employee Nonqualified Stock Option Plan, that were exercised during
fiscal 1998 or unexercised at fiscal year end. No options were granted during
fiscal 1998 to Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF IN-THE-MONEY
OPTIONS EXERCISED DURING OPTIONS HELD AT FISCAL UNEXERCISED OPTIONS HELD AT
FISCAL YEAR YEAR END FISCAL YEAR END(1)
-------------------------- ------------------------------ ------------------------------
SHARES
ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ----------- ------------ --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
David B. Robson - - 72,989 19,354 $1,857,597 $268,537
Stephen J. Ludlow 19,000 $707,388 34,473 32,419 617,194 449,327
Lawrence C. Fichtner - - 57,161 12,774 1,467,433 177,239
Anthony Tripodo - - 4,445 13,333 57,785 173,329
Rene M.J. VandenBrand - - 21,097 9,290 536,707 128,902
</TABLE>
- -----------------
(1) Value of in-the-money unexercised options are calculated based on the July
31, 1998 closing price of the Common Stock of $33 1/4 per share on the New
York Stock Exchange.
5
<PAGE> 8
COMPENSATION COMMITTEE REPORT
The compensation committee of the board of directors (the "Committee") has
furnished the following report on executive compensation for fiscal 1998:
Under the supervision of the Committee, the Company seeks to relate a
significant portion of potential total executive compensation to the
Company's financial performance. In general, executive financial rewards may
be segregated into the following significant components: base compensation,
bonus and stock-based benefits.
Base compensation for the Executive Officers is intended to afford a
reasonable degree of financial security and flexibility to those individuals
who are regarded by the Committee as acceptably discharging the levels and
types of responsibility implicit in the various executive positions. Based on
these criteria, the Committee awarded Mr. Robson a raise of $80,000 effective
March 1, 1998 in recognition of the Company's improving operating
performance. In the case of all other Executive Officers, base compensation
for fiscal 1998 was set by the Committee based upon the recommendation of Mr.
Robson; base pay increases of approximately $40,000, $40,000, $10,000 and
$6,000 were authorized by the Committee for Messrs. Ludlow, Fichtner, Tripodo
and VandenBrand, respectively, effective March 1, 1998.
In setting the base pay for Executive Officers, little consideration was
given to the compensation plans of executives in other seismic companies
because some of the Company's principal competitors are subsidiaries of
larger, more diversified oilfield service concerns, and compensation data was
not publicly available for the comparable executive positions in those
subsidiaries. Moreover, the few other publicly held seismic operators had
such disparate operating and financial characteristics and were of such
dissimilar sizes, that the Committee found little basis for reliable
comparison. In setting Mr. Robson's salary and the salaries of the other
Executive Officers, the Committee considered the salary histories of each
executive, and his past performance, credentials, age and experience with the
Company, as well as his perceived future utility to the Company.
Annual bonuses are intended to reflect a policy of requiring a minimum level
of Company financial performance before any bonuses are earned by the
Executive Officers, with bonuses for achieving higher levels of performance
directly tied to the level achieved. For fiscal 1998, the Committee
recommended and the board of directors adopted an incentive compensation
program (the "Incentive Plan") pursuant to which some 200 managerial
personnel (including the Executive Officers) became eligible to earn bonuses
based upon the Company's results of operations as a percentage of those
anticipated in the annual budget approved by the board at the beginning of
the year. The following bonuses were awarded under the Incentive Plan to
Executive Officers for their performance during fiscal 1998: Mr. Robson
- $243,133; Mr. Ludlow - $175,038; Mr. Fichtner - $94,791; Mr. Tripodo -
$132,171 and Mr. VandenBrand - $109,309.
The board of directors is of the view that the periodic grant of significant
blocks of stock options to the Executive Officers is calculated to align the
executive's economic interests with those of stockholders and to provide a
direct and continuing focus upon the goal of increasing stockholder value.
The Committee presently anticipates that such grants will be considered only
every other year. The Company last granted options during fiscal 1997.
The Compensation Committee,
Brian F. MacNeill (Chairman)
Steven J. Gilbert
Douglas B. Thompson
Jack C. Threet
6
<PAGE> 9
OTHER INFORMATION
CERTAIN STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Shares at September 30, 1998 by (i) each person who
is known by the Company to own beneficially more than 5% of the outstanding
Shares, (ii) all directors and director nominees of the Company, (iii) the chief
executive officer and each of the other executive officers and (iv) all
directors, director nominees and executive officers as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES(2)
----------------------------------------------
CURRENTLY
EXERCISABLE
OPTIONS TO
PURCHASE PERCENT OF
NAME OF PERSON OR IDENTITY OF GROUP(1) SHARES SHARES TOTAL CLASS
- -------------------------------------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
David B. Robson 1,312,580(3) 72,989 1,385,569 6%
Clayton P. Cormier 10,004 2,500 12,504 *
Ralph M. Eeson 3,100 1,875 4,975 *
Lawrence C. Fichtner 2,322 57,161 59,483 *
James R. Gibbs 1,000 1,563 2,563 *
Steven J. Gilbert 64,185(4) 2,500 66,685 *
Stephen J. Ludlow 4,140 34,473 38,613 *
Brian F. MacNeill 4,000 11,167 15,167 *
Jan Rask - - - -
Jack C. Threet 5,333 5,833 11,166 *
Anthony Tripodo 7,128 4,445 11,573 *
Rene M.J. VandenBrand 1,207 21,097 22,304 *
All directors, director nominees and
executive officers as a group (12
persons named above) 1,414,999 215,603 1,630,602 7%
</TABLE>
- -----------------------
* Does not exceed one percent
(1) The address of all persons listed is 3701 Kirby Drive, Houston, Texas,
77098, c/o the Company.
(2) Each person has sole voting and investment power with respect to the Shares
listed except as otherwise specified.
(3) Includes 1,200 shares of Common Stock held by spouse.
(4) Includes 62,748 shares of Common Stock held by Quantum Partners LDC
("Quantum") which may be deemed beneficially owned by Mr. Gilbert by virtue
of an investment advisory contract between Mr. Gilbert and Quantum. Mr.
Gilbert disclaims beneficial ownership as to these shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's officers and directors and persons who own more
than 10% of a registered class of the Company's equity securities, to file
reports of ownership and changes of ownership with the Securities and Exchange
Commission (the "Commission"). With respect to the fiscal year ended July 31,
1998, with the exception of Mr. Ralph Eeson, director, who was delayed in filing
one Form 4 regarding five transactions, the Company believes that all filing
requirements applicable to the Company's officers, directors and greater than
10% stockholders have been met.
7
<PAGE> 10
COMMON STOCK PERFORMANCE GRAPH
The following graph illustrates the performance of the Company's Common Stock,
compared with the cumulative total return on (i) Standard & Poor's 500 Stock
Index ("S&P 500") and (ii) an index of peer companies ("Peer Companies")
selected by the Company for the period beginning July 31, 1993 and ending July
31, 1998. The graph assumes that the value of the investment in the Company's
Common Stock and each index was $100 at July 31, 1993. In all cases the
cumulative total return assumes, as contemplated by Securities and Exchange
Commission Rules, that any cash dividends on the common stock of each entity
included in the data presented above were reinvested in that security.
[CHART]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
July 31, 1993 July 31, 1994 July 31, 1995 July 31, 1996 July 31, 1997 July 31, 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
VERITAS DGC INC. $ 100.00 $ 54.07 $ 81.98 $ 165.78 $ 362.20 $ 479.33
-------- -------- -------- -------- -------- --------
S&P 500 $ 100.00 $ 105.13 $ 132.54 $ 154.48 $ 234.99 $ 280.29
-------- -------- -------- -------- -------- --------
PEER COMPANIES(1) $ 100.00 $ 96.32 $ 109.57 $ 132.39 $ 248.39 $ 208.18
-------- -------- -------- -------- -------- --------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists of Dawson Geophysical Company, Petroleum Geo-Services, Inc.,
Schlumberger Limited, Seitel, Inc. and Western Atlas Inc.
This graph depicts the past performance of the Common Stock and in no way should
be used to predict future performance. The Company does not make or endorse any
predictions as to future share performance.
The foregoing price performance comparisons shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or under
the Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this graph by reference, and shall not
otherwise be deemed filed under such acts.
8
<PAGE> 11
AUDITORS
PricewaterhouseCoopers LLP ("PwC"), certified public accountants, have served as
the independent accountants of the Company since November 1996. It is not
proposed that any formal action be taken at the meeting with respect to the
continued employment of PwC, inasmuch as no such action is legally required. PwC
continues to provide audit services to the Company and representatives of PwC
plan to attend the annual meeting and will be available to answer questions. Its
representatives will also have an opportunity to make a statement at the
meetings if they so desire, although it is not expected that any such statement
will be made.
On November 20, 1996, the audit committee of the board of directors recommended
and the board determined to replace Deloitte & Touche LLP ("D&T") as its
principal accountant with PwC. PwC was the principal independent accountant of
VES, which was combined into the Company on August 30, 1996. The report of D&T
on the Company's financial statements for the fiscal year ending July 31, 1996
did not contain an adverse opinion or a disclaimer of opinion, nor was such
opinion qualified or modified as to uncertainty, audit scope or accounting
principles. During the year ended July 31, 1996 and the subsequent interim
period preceding the replacement of D&T, the Company had no disagreements with
D&T on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedures, and neither the Company nor anyone
on the Company's behalf consulted with PwC regarding any matter. D&T has
furnished the Company with a letter addressed to the Securities and Exchange
Commission stating that it agrees with the foregoing statements.
AVAILABILITY OF ANNUAL REPORT AND FORM 10-K
The annual report to stockholders covering the fiscal year ended July 31, 1998
has been mailed to each stockholder entitled to vote at the annual meeting.
The Company will provide a copy of the Company's annual report on Form 10-K for
the fiscal year ended July 31, 1998 without charge to any stockholder making
written request to Allan C. Pogach, Corporate Secretary, 3701 Kirby Drive,
Houston, Texas, 77098.
OTHER MATTERS
Any stockholder who wishes to submit a proposal for action to be included in the
proxy statement and form or proxy relating to the Company's 1999 annual meeting
of stockholders is required to submit such proposals to the Company on or before
July 5, 1999.
By Order of the Board of Directors,
/s/ ALLAN C. POGACH
Allan C. Pogach
Secretary
November 2, 1998
9
<PAGE> 12
VERITAS DGC INC.
PROXY SOLICITATION BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON DECEMBER 9, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints David B. Robson, Stephen J.
Ludlow, Anthony Tripodo and Allan C. Pogach, or any of them,
attorneys and proxies, with power of substitution and
revocation, to vote, as designated on the reverse side, all
shares of stock which the undersigned is entitled to vote, with
all powers which the undersigned would possess if personally
PROXY present, at the Annual Meeting (including all adjournments
FOR thereof) of Stockholders of Veritas DGC Inc. to be held on
ANNUAL Wednesday, December 9, 1998 at 10:00 a.m., Houston time at the
MEETING offices of the Company, 3701 Kirby Drive, Houston, Texas 77098.
OF
STOCKHOLDERS 1. [ ] FOR all nominees (except as specified hereon):
DECEMBER 9, Clayton P. Cormier, Ralph M. Eeson, Lawrence C. Fichtner,
1998 James R. Gibbs, Steven J. Gilbert, Stephen J. Ludlow,
Brian F. MacNeill, Jan Rask, David B. Robson and Jack C.
Threet.
[ ] WITHHOLD authority to vote for all nominees listed
above.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME IN THE
SPACE PROVIDED BELOW.
------------------------------------------------------------
(THIS PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE)
<PAGE> 13
2. [ ] As such proxies may determine in their discretion upon such other
business (including procedural and other matters relating to the
conduct of the meeting) that may properly come before the meeting and
any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IN THE ABSENCE OF SUCH INSTRUCTIONS THIS PROXY WILL
BE VOTED FOR THE NOMINEES LISTED IN ITEM 1.
The undersigned hereby
acknowledges receipt of the
Notice of Annual Meeting of
Stockholders and the Proxy
Statement furnished therewith.
Dated this ____ day of____ 1998
-------------------------------
-------------------------------
Signature(s) of Stockholder
(Sign exactly as name(s)
appears on your stock
certificate. If shares are held
jointly each holder should
sign. If signing for estate,
trust or corporation, title or
capacity should be stated.)
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED BUSINESS ENVELOPE.
