NUCLEAR SUPPORT SERVICES, INC.
22 Northeast Drive
Hershey, Pennsylvania 17033
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 5, 1996
To the Shareholders of Nuclear Support Services, Inc.
The Annual Meeting of the Shareholders of Nuclear
Support Services, Inc. (the "Company") will be held at
the Hotel Hershey, Hershey, Pennsylvania on Tuesday,
March 5, 1996, at 1:00 PM, prevailing time, for the
following purposes:
(1) To elect eight Directors for the ensuing year as
proposed in the attached Proxy Statement;
(2) To consider and act upon a proposal to ratify
the appointment of KPMG Peat Marwick LLP, as the
independent auditors of the Company for the
fiscal year commencing October 1, 1995;
(3) To consider and act upon a shareholder proposal
of John Mattern to prohibit Company officers and
others from serving on the Board of Directors;
and
(4) To transact such other business as may properly
come before the meeting or any adjournment
thereof.
The Board of Directors has fixed the close of
business on December 29, 1995, as the record date for
determination of shareholders entitled to notice of and
to vote at the Annual Meeting. Accordingly, only
shareholders of record at the close of business on that
date will be entitled to vote at the meeting.
Management of the Company extends a cordial invitation
to all shareholders to be present at the meeting.
The Annual Report of the Company for 1995 is enclosed
herewith.
By Order of the Board of Directors
Ralph A. Trallo
President and Chief Executive Officer
Hershey, Pennsylvania
January 29, 1996
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE
FILL IN, DATE, SIGN AND RETURN YOUR PROXY PROMPTLY IN
THE POSTAGE PAID, PRE-ADDRESSED ENVELOPE ENCLOSED FOR
THAT PURPOSE. IF YOU ATTEND THE MEETING IN PERSON, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
NUCLEAR SUPPORT SERVICES, INC.
22 Northeast Drive, Hershey, Pennsylvania 17033
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on March 5, 1996
GENERAL INFORMATION
This Proxy Statement is furnished in connection with
the solicitation by the Board of Directors of Nuclear
Support Services, Inc., (the "Company") of proxies for
use at the Annual Meeting of Shareholders to be held on
Tuesday, March 5, 1996, at the Hotel Hershey, Hershey,
Pennsylvania, at 1 PM, prevailing time, and at any
adjournment thereof. This Proxy Statement and the
accompanying form of proxy are being mailed to
shareholders on or about February 5, 1996.
A form of proxy is enclosed for use at the Annual
Meeting. When the enclosed form of proxy is signed,
dated and returned, the shares represented thereby will
be voted in accordance with the instructions specified
thereon. If no contrary instructions are given, the
shares will be voted FOR the election of the eight
nominees for Directors named below; FOR ratification of
KPMG Peat Marwick LLP as independent auditors for the
Company for the fiscal year commencing October 1, 1995;
AGAINST the shareholder proposal to prohibit Company
officers and others from serving on the Board of
Directors; and, at the discretion of the proxies, upon
such other matters as may properly come before the
Annual Meeting. Any shareholder executing a form of
proxy may revoke that proxy by written notice delivered
to the Company's Secretary at any time before it is
voted.
The cost of soliciting proxies will be borne by the
Company. In addition to solicitation by mail, proxies
may, if necessary, be solicited by Directors, Officers,
or regular employees of the Company personally or by
telephone or telegram. It is contemplated that
brokerage houses, nominees, and other custodians and
fiduciaries will be requested to send proxy material to
their principals, and the Company will reimburse them
for their charges and expenses in so doing.
The Company's Annual Report to Shareholders for the
fiscal year ended September 30, 1995, including
consolidated financial statements, accompanies this
Proxy Statement, the meeting notice and the proxy.
VOTING SHARES
The Board of Directors has fixed the close of
business on December 29, 1995, as the record date for
determination of the shareholders entitled to notice of
and to vote at the Annual Meeting of Shareholders or any
adjournment thereof. Shareholders of record as of that
date will receive the notice of Annual Meeting of
Shareholders, the Proxy Statement, the proxy and the
Annual Report of the Company. As of December 29, 1995,
there were 2,169,190 shares of common stock, par value
$.0025 per share, outstanding and entitled to notice of
and to vote at the Annual Meeting. The Company has no
other class of stock outstanding. Each share of common
stock is entitled to one vote on each matter properly
submitted to the shareholders for action at the Annual
Meeting. There are no cumulative voting rights.
VOTE REQUIRED
The nominees for the Board of Directors receiving a
plurality of the votes cast will be elected as
Directors. An affirmative vote of a majority of the
shares present in person or by proxy and entitled to
vote at the Annual Meeting is required for shareholder
approval for the proposal to ratify KPMG Peat Marwick
LLP as independent auditors for the Company and/or the
Mattern proposal to prohibit Company officers and others
from serving on the Board of Directors. Abstentions and
broker non-votes do not have the effect of negative
votes, but may prevent attainment of a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information as
of December 8, 1995 (unless otherwise noted), with respect
to persons with beneficial ownership of more than five
percent (5%) of the Company's outstanding common stock:
<TABLE>
<CAPTION>
Percentage
of
Name and Address Shares Beneficially Owned(1) Class
<S> <C> <C>
Joe C. Quick 263,240(2) 11.88%
22 Northeast Drive
Hershey, PA 17022
</TABLE>
(1) The shares reported may be deemed to be
beneficially owned under rules and regulations of the
U.S. Securities and Exchange Commission, but the
inclusion of these shares in this table does not
constitute an admission of beneficial ownership.
(2) The shares shown include 114,490 shares over which
Mr. Quick exerts sole voting and investment power and
45,724 shares subject to stock options in favor of Mr.
Quick. Mr. Quick shares voting and investment power
over the remaining shares which are held by Mr. Quick
and his spouse or certain relatives (excluding adult
children).
The following table gives certain information as of
December 8, 1995, with respect to the beneficial
ownership, direct or indirect, of the Company's common
stock by each present Director and Nominee for Director
and executive officer and by all Directors and executive
officers as a group, as reported by each person.
<TABLE>
<CAPTION>
Shared
Sole Voting Voting
and and Percentage
InvestmentInvestment Aggregate of
Name Power Power Other Total Class
<S> <C> <C> <C> <C> <C>
Joe C. Quick 114,490 103,026 45,724 263,240 11.88%
Dale L. Ferguson 19,000 30,000 39,537 88,537 4.01%
Heath L. Allen 20,000 -0- 49,591 69,591 3.14%
Wm. Lawrence
Petcovic 886 -0- 48,374 49,260 2.22%
Ralph A. Trallo 8,299 -0- 27,282 35,581 1.62%
Robert A. Hess -0- 21,800 12,532 34,332 1.57%
Donald E. Lyons -0- -0- 14,747 14,747 0.68%
Thomas P. McShane 8,300 -0- 5,007 13,307 0.61%
Michael J.
Olson(4) 1,600 -0- 10,000 11,600 0.53%
All Directors and
Officers as a
Group ( 9 Persons)172,575 154,826 252,794 580,195 26.26%
</TABLE>
(1) Included are shares held by the Director (or
Officer) and his spouse or certain relatives (excluding
adult children).
(2) Shares subject to options in favor of the
respective individual.
(3) The shares reported may be deemed to be
beneficially owned under rules and regulations of the
U.S. Securities and Exchange Commission, but the
inclusion of these shares in this table does not
constitute an admission of beneficial ownership.
(4) Executive officers who are neither directors or
nominees.
ELECTION OF DIRECTORS
Unless otherwise instructed, the persons named in the
accompanying form of proxy intend to vote the shares
represented by the proxies for the election of the eight
nominees listed below to the Board of Directors. All
nominees are presently Directors of the Company and were
elected by the shareholders at the last Annual Meeting.
Directors elected at the Annual Meeting will hold office
until the next Annual Meeting of Shareholders or until
their respective successors are elected and qualified.
In the event that any one or more of the nominees should
become unavailable for election at the time of the
Annual Meeting, for any reason, an event that the Board
of Directors does not anticipate, the persons named in
the accompanying form of proxy will vote for the
remaining nominees and for such substitute nominee or
nominees, if any, as may be designated by the Board of
Directors.
The nominees this year are:
Heath L. Allen (1)(2), Age 68. Partner of Keefer, Wood,
Allen & Rahal (Attorneys), Harrisburg, PA. Director of
Arnold Industries, Inc. Director of the Company since
1986.
Dale L. Ferguson (1), Age 61. Employed by the Company
since 1974. Senior Vice President of the Company from
February 1990 to May 1991, Executive Vice President from
May 1991 to January 1995. President and CEO of
subsidiary, NSS Numanco, Inc. from April 1993 to May
1994. Director of the Company since 1974.
Robert A. Hess (2), Age 67. Consultant to the Company.
Director of the Company since 1974.
Donald E. Lyons (3)(4), Age 66. Former President and
CEO of the Power Systems Group of Combustion Engineering
(retired 1987). Director of Gilbert Associates, Inc.
Director of the Company since 1993.
Thomas P. McShane (1)(3), Age 42. 1987 to present,
President and part owner of McShane Group, Inc.,
Timonium, MD. Consultant to the Company. Director of
the Company since 1991.
Wm. Lawrence Petcovic (2)(3), Age 50. Director of
Employment & Training of The Ryland Group, Inc.,
Columbia, MD from 1989 to January 1993 and Director of
Continuous Improvement until December 1993. Currently
an independent business consultant. Director of the
Company since 1981.
Joe C. Quick (1)(4), Age 60. Employed by the Company
since 1974. Chairman of the Board of Directors since
1974. President from February 1990 to December 1994 and
Chief Executive Officer from February 1990 to October
1995. Director of the Company since 1974.
Ralph A. Trallo (1)(4),Age 50. President and CEO of
Cannon Sline of Philadelphia, PA; from 1987 to present.
Named Senior Vice President of the Company in April
1994. Named President and Chief Operating Officer of
Company in December 1994 and Chief Executive Officer in
October 1995. Director of the Company since 1993.
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation
Committee
(4) Member of the Strategic Planning
Committee
On September 1, 1995, Oliver B. Cannon & Son, Inc., a
wholly owned subsidiary of the Company (Nuclear Support
Services, Inc.), filed a voluntary petition under
chapter 11 of the Bankruptcy Code. On September 5,
1995, the Company and its other subsidiaries also filed
for protection under chapter 11. Those subsidiaries are
Sline Industrial Painters, Inc., NSS Numanco, Inc., NSS
of Delaware, Inc., IceSolv, Inc. and Henze Services,
Inc. All cases were filed in the United States
Bankruptcy Court for the Middle District of Pennsylvania
in Harrisburg. A number of first day orders were
presented to the Court, including an order allowing
joint administration under the style and case of the
parent, Nuclear Support Services, Inc. at case number 1-
95-01767. Since the dates of the petitions, all of the
debtors have continued to operate their businesses as
debtors in possession under Section 1107 (a) of the
Bankruptcy Code.
On or about June 19, 1992, Robert A. Hess entered
into a consent decree with the U.S. Securities and
Exchange Commission (SEC) settling SEC allegations and
enjoining him from violation of the federal securities
laws in the case of U.S. Securities and Exchange
Commission v. Robert A. Hess, U.S. District Court for
the Middle District of Pennsylvania (primarily alleging
trades in NSSI stock while in possession of material non-
public information and Section 16 reporting omissions).
The case was settled with payment by Mr. Hess to the SEC
of approximately $63,000 (including fines). The
Company's Board of Directors is aware of the SEC
allegations and Mr. Hess' settlement thereof, in which
he neither admits nor denies the charges. The Board
notes that several factors can come into play in
deciding to settle a pending legal action, not the least
of which is the curtailment of ongoing litigation costs.
The Board further notes Mr. Hess' long and proven record
of service and devotion to the Company and reaffirms its
confidence in Mr. Hess' integrity and ability to serve
the Company as a Director.
COMMITTEES AND MEETINGS
The Board of Directors meets on a regularly scheduled
basis and, during the fiscal year ended September 30,
1995, met on five occasions. During fiscal year 1995,
each Director was present for at least 75% of the
meetings of the Board of Directors. Outside Directors
of the Company were paid retainers of $7,500 annually.
All Directors except the Chairman of the Board, were
paid $800 for each meeting attended; the Chairman was
paid $1,200 for each meeting.
The Board of Directors created the following
committees which were active in fiscal year 1995:
Executive, Finance, Audit, Compensation, and Strategic
Planning Committees. In April 1995, the Finance
Committee was dissolved and routine meetings of both
Executive and Strategic Planning Committees were reduced
to an as needed basis. During fiscal year 1995, each
Director was present for at least 75% of the aggregate
number of meetings of the Board Committees on which such
Director served. Outside Board members appointed to
serve on the Strategic Planning, Compensation and Audit
Committees were paid annual retainers of $1,500. In
addition, outside Board members serving on Committees,
except the Committee Chairman, were paid $750 for each
Committee meeting; the Chairman was paid $1,000.
The Executive Committee was created in 1985 to assist
the Board in the exercise of general policy and
oversight functions. The Committee did not meet during
fiscal year 1995.
The Finance Committee was created by the Board of
Directors in 1985 to oversee various financial
arrangements and investments of the Company. The
Finance Committee met one time during fiscal year 1995
before being dissolved in April 1995.
The Audit Committee was created by the Board of
Directors in October 1986. The function of the Audit
Committee is to recommend an accounting firm to conduct
an annual audit engagement to include audit scope and
results of such audit. The Audit Committee reviews the
adequacy of internal controls, Company policies and
procedures, and reports its findings to the Board of
Directors. The Audit Committee met one time during
fiscal year 1995.
The Compensation Committee was created by the Board
of Directors in February 1989. The function of the
Compensation Committee is to administer the Company's
1990 Stock Option Plan and the Director's Stock Option
Program. In July 1993, the Salary and Incentive
Committee, whose functions included determination and
administration of plans for salary and incentives for
Company management and employees, including directors'
fees, was consolidated with the Compensation Committee.
The Compensation Committee met two times during fiscal
year 1995.
The Strategic Planning Committee was created by the
Board of Directors in April 1993 and did not meet during
fiscal year 1995. The function of the Strategic
Planning Committee is to assist Company management in
the development of strategies for future growth and
profitability.
The Board of Directors does not have a nominating
committee or any other committee performing similar
functions.
EXECUTIVE OFFICERS
The following table identifies the Company's present
executive officers, sets forth their ages, principal
occupation or employment of each during the past five
years, positions and offices held with the Company and
the terms served as such.
<TABLE>
<CAPTION>
Name Age Principal Occupation or
Employment
<S> <C> <C>
Joe C. Quick 60 See Election of Directors.
Ralph A. Trallo 50 See Election of Directors.
Michael J. Olson 42 Vice President,
Secretary/Treasurer and Chief Financial Officer
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning
all cash compensation paid or accrued by the Company and
its subsidiaries in respect to the three fiscal years
ended September 30, 1995, to or for the chief executive
officer and each of the executive officers of the
Company whose cash compensation exceeded $100,000:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long-Term
Compen-
sation
Other Awards
annual Securities
compen- Underlying
Salary Bonus sation Options/
Year ($) ($)(1) ($)(2) SARs(#)
<S> <C> <C> <C> <C> <C>
JOE C. QUICK 1995 160,000 -0- 6,000 -0-
Chairman of the 1994 166,154 -0- 6,400 -0-
Board of Driectors1993 160,001 15,958 5,164 25,167
and Chief
Executive Officer
RALPH A. TRALLO 1995 150,000 167,904 9,600 10,000(4)
President, Chief 1994 150,000 169,713 3,580 27,282(3)
Operating Officer 1993 n/a n/a n/a n/a
and Director; also
President and CEO
of Cannon Sline
MICHAEL J. OLSON 1995 90,000 100,743 5,530 10,000(4)
Vice President, 1994 90,000 101,828 5,350 10,000(3)
Secretary/ 1993 n/a n/a n/a n/a
Treasurer and
Chief Financial SAR (Stock
Officer Appreciation Rights
</TABLE>
(1) For fiscal year 1995, no bonuses were awarded under
the Senior Executive Group Compensation Program. For
fiscal year 1994, incentive bonuses equaling $42,915 in
cash were awarded under the Senior Executive Group
Compensation Program. Mr. Trallo and Mr. Olson did not
participate in the Senior Executive Group Compensation
Program for 1994 or 1995 but are covered under separate
incentive arrangements. Under those arrangements, Mr.
Trallo and Mr. Olson were awarded cash bonuses for 1994
and 1995. Both Mr. Trallo and Mr. Olson voluntarily
agreed to defer payment of two-thirds of their 1995
cash bonuses until after confirmation of the Company's
reorganization plan to exit bankruptcy. For fiscal
year 1993, incentive bonuses based on performance were
paid in the form of five-year stock options totaling
66,647 shares at an average exercise price of $3.75 per
share and cash totaling $55,571.
(2) Included in Other Annual Compensation are Board of
Director fees, automobile allowances, and excess life
insurance benefits provided by the Company.
(3) Mr. Trallo's and Mr. Olson's tenures with the Company
began in November 1993 coinciding with the acquisition
of Cannon Sline. Options for NSSI stock were awarded
to Mr. Trallo and Mr. Olson by NSSI in fiscal year 1994
in conjunction with the acquisition.
(4) A Stock Appreciation Program for Key Executives was
established in fiscal year 1995. Mr. Trallo and Mr.
Olson were awarded SAR's under this Program.
STOCK OPTIONS
At the 1990 Annual Meeting, the shareholders approved
the Nuclear Support Services, Inc. 1990 Stock Option Plan
(the "1990 Plan"), which is designed to promote continuity
of management and increased incentive to those key
employees and consultants responsible for the Company's
long-range financial success.
The 1990 Plan terminated on December 31, 1994, although
outstanding options at that time were not canceled by such
termination. No immediate plans are in place at this time
to implement a new Stock Option Program for the Company.
The 1990 Plan is administered by the Compensation
Committee formed by the Board of Directors, which extended
rights to selected employees or consultants to purchase
shares of stock in the Company at stated option prices.
The aggregate number of shares available for grant under
the 1990 Plan was 416,897. As of December 31, 1995,
options for 327,233 shares were outstanding to
approximately 46 employees and/or consultants, including
Company directors. No options were exercised during the
fiscal year.
Options may be incentive stock options, which qualify
for certain tax benefits (relating primarily to the
deferral of gain recognition until the underlying stock is
sold and the treatment of same as a capital gain as
opposed to ordinary income), or non-qualified options,
which do not qualify as incentive stock options.
Incentive stock options must be granted at not less than
the fair market value of the stock on the date granted,
and non-qualified stock options must be granted at not
less than one-half of the fair market value of the stock
on the date granted. The Company may take a deduction for
gain realized by its employees upon the exercise of a non-
qualified option. Generally this is not so in the case of
an incentive stock option. Options generally are
nontransferable, conditioned upon continued employment
with the Company and expire within five years of grant or
upon stated occurrences. Other option terms may vary
depending upon provisions of the specific option
agreement. On January 26, 1990, the Company filed an
initial S-8 Registration Statement for Company stock
subject to the 1990 Plan and on September 8, 1993, filed
an amendment to its registration statement for additional
shares subject to the Plan. The closing market price of
the Company's common stock as of September 30, 1995 was
$1.25 per share.
DIRECTORS STOCK OPTION PROGRAM
The Directors' Stock Option Program (as Amended), was
approved by shareholder vote at the Annual Meeting in
February 1992. The Program provides a mechanism for
compensating Directors for their services by means other
than cash payment, promotes Director stock ownership and
increases the incentive for those responsible for the long-
range success of the Company. Pursuant to the Program,
each Director may elect to take non-qualified stock
options for Company stock issued under the 1990 Stock
Option Plan in lieu of all or a portion of the normal cash
retainer and/or fee for Board or Committee meetings
attended. Directors who select options pursuant to the
Program make a standing election to do so (or to rescind
such election) at least six (6) months in advance of the
meeting for which the election (or rescission) is to be
effective. For the purpose of this election, options are
valued at 17% of the market price of the stock on grant
date (i.e., date set for payment of retainer or meeting
fees as the case may be) and applied against the fees to
be earned.
The Company's 1990 Stock Option Program expired in
December 1994, thus fees and retainers for Board and
Committee participation are being paid to Directors in
cash. As of December 8, 1995, Messrs. Hess, Allen,
Petcovic, McShane, Lyons and Trallo had acquired options
for 5,932, 49,591, 48,374, 5,007, 14,746 and 2,282,
respectively, pursuant to the Program with exercise prices
ranging from $3.38 to $9.00.
SENIOR EXECUTIVE GROUP COMPENSATION PROGRAM
The following tables list information regarding stock
options and stock appreciation rights (SAR) granted to and
exercised or held by the Company's executive officers in
respect to its last fiscal year.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential realizable
value at assumed
annual rates of stock
price appreciation
Individual Grants for option term
Percent of
Total
Number of Options/
securities SARs Ex-
underlying granted ercise
options/ to or Ex-
SARs employees base pir-
granted in fiscal price ation
Name (#)(1) year ($/sh) date 0%($) 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C> <C>
JOE C. QUICK -0- -0- -0- n/a -0- -0- -0-
RALPH A. TRALLO 10,000 34% 2.50 n/a -0- 1,250 2,500
MICHAEL J. OLSON 10,000 34% 2.50 n/a -0- 1,250 2,500
</TABLE>
(1) Stock Appreciation Rights awarded to Mr. Trallo and Mr. Olson.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY
END OPTION/SAR VALUES
<CAPTION>
Value of
unexercised
Number of sec- in-the-money
urities underlying options/
Shares unexercised options/ SARs at FY
acquired Value SARs at FY end(#) end($)
on rea- exercisable/un- exercisable/
Name exercise(#) lized($) exercisable(1) unexercisable
<S> <C> <C> <C> <C>
JOE C. QUICK -0- -0- 45,724/-0- -0-/-0-
RALPH A. TRALLO -0- -0- 37,282(2)/-0- -0-/-0-
MICHAEL J. OLSON -0- -0- 20,000(3)/-0- -0-/-0-
</TABLE>
(1)Options include those granted under the Company's Senior Executi
ve Compensation Program, the Company's Stock Option Program, the
Directors Stock Option Program, and the Company's Stock
Appreciation Plan.
(2)Mr. Trallo's options include 27,282 shares under the Company's S
tock Option Program and the Director's Stock Option Program
and 10,000 shares under the Company's Stock Appreciation
Plan.
(3)Mr. Olson's options include 10,000 shares under the Company's St
ock Option Program and 10,000 shares under the Company's
Stock Appreciation Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
As previously noted, the Compensation Committee
reviews and makes recommendations to the Board of
Directors on matters of Executive Officer compensation.
The current members of the Committee are Wm. Lawrence
Petcovic (Chairman), Thomas P. McShane and Donald E.
Lyons, all of whom are non-employee "outside" Directors as
noted in this proxy statement. The Committee establishes
the Company's policies and performance requirements for
Executive Officer compensation and the total compensation
paid for each fiscal year. Its report for fiscal year
1995 is set forth below.
The Committee formulated the 1995 Executive
Compensation program to focus on short term financial
results for FY 95. During the reorganization of FY 1995,
the Committee limited the Executive Program to full time
NSSI Corporate level employees: Joe Quick, Ralph Trallo,
Dave Williams, and Mike Olson. Subsidiary officer
compensation was delegated to the NSSI Chief Operating
Officer, Ralph Trallo. Under the 1995 Senior Executive
Program, the total compensation for executives is managed
utilizing three (3) components - base pay, incentive pay
and benefits.
(1) Base pay for key executives was determined in
fiscal year 1992 at the median pay range for executives in
diversified service industries adjusted for a $100 million
revenue base. The data was obtained from The Conference
Board report No. 983, Top Executive Compensation, 1991
Edition. The Committee adjusts base pay every three years
or when more than a 25% change in applicable business
revenue occurs. Base salaries for FY 1995 did not change.
(2) Incentive pay available to be earned for FY 1995
was determined as a percentage of Pre-Tax profits above a
performance threshold. Incentives are to be paid in cash.
Stock Appreciation Rights were made available for FY 1995
in place of the 1990 Stock Option Plan which had expired
in FY 95. The Committee reviews individual performance
with each Executive after consultation with the Chief
Executive Officer and reports its findings to the Board of
Directors.
(3) Benefits, the third component of executive pay,
are the same for all NSSI employees. The Committee does
not consider any Executive compensation that is linked to
the Board of Director fees or additional options or pay
off a Company-wide award for exceptional service as
determined by the Chief Executive Officer using options
allocated by the Committee.
Joe C. Quick, the Company's President and Chief
Executive Officer maintained a base salary of $160,000
which was determined to be the median pay range for
diversified service companies of $100 million in revenue
and of similar employee population. Mr. Quick had no
incentive bonus below a NSSI pre-tax profit of $499K. He
had available an incentive of 3% for pre-tax profits above
$500K, 6% above $1,000K and 9% above $2,000K. The
Committee has no pay-out ceiling for incentive pay. Mr.
Quick received no incentive pay for FY 1995.
Mr. Williams base pay remained the same for FY 1995.
Mr. Williams resigned on February 15, 1995 before a final
incentive program was agreed upon with the Committee.
Mr. Trallo and Mr. Olson have similar incentive
programs as contracted with Cannon Sline and agreed upon
as a condition of the Cannon Sline acquisition. The
Committee added to the Cannon Sline agreement the
opportunity to earn additional incentive based on NSSI
performance. The incentive pay for FY 1995 for both Mr.
Trallo and Mr. Olson was paid out under the contract
agreement for the performance of Cannon Sline. There was
no NSSI incentive pay-out. Mr. Trallo and Mr. Olson
voluntarily delayed two thirds of the 1995 incentive pay-
out until NSSI exits bankruptcy. Upon Board appointment
to NSSI executive positions, the Committee awarded Mr.
Trallo and Mr. Olson 10,000 SAR's at $2.50 linked to NSSI
future performance.
The Committee intends to continue the strategy of a
median base pay with opportunity to earn financial
performance based incentive bonus linked to short term
financial performance until exit from bankruptcy and
financial stability is achieved.
The Compensation Committee
William Lawrence Petcovic
Thomas P. McShane
Donald E. Lyons
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The firm of McShane Group of which NSSI Director Thomas
P. McShane is part owner, entered into an agreement in
December 1994, whereby McShane Group provided financial
and management consulting services to Henze Services, Inc.
on a temporary basis, including the services of a full-
time consultant. The McShane Group received $80,713 for
these services. Mr. McShane, in an individual capacity,
provided consulting services to the Board of Directors of
NSSI in fiscal year 1995. For these services he received
$40,835. These payments for services during fiscal year
1995 were in an amount greater than 5% of the annual gross
revenues of McShane Group.
CERTAIN TRANSACTIONS
The firm of Keefer, Wood, Allen, and Rahal, of which
Heath L. Allen, a Director, is a partner, received legal
fees of $142,561 for services performed for the Company
during fiscal year 1995, an amount less than 5% of Keefer,
Wood, Allen & Rahal's annual gross revenues. It is
anticipated that the Company will make payments to Keefer,
Wood, Allen & Rahal for legal services performed during
fiscal year 1996 in an aggregate amount less than 5% of
Keefer, Wood, Allen, & Rahal's annual gross revenues.
Robert A. Hess received approximately $39,000 in fiscal
year 1995 for consulting services provided to the Company.
It is anticipated that the Company will make payments to
Mr. Hess for consulting services performed in fiscal year
1996.
See also the discussion of the Company's relationship
with McShane Group, Inc., an affiliate of Thomas P.
McShane, a Director of the Company, under the caption
"Compensation Committee Interlocks and Insider
Participation."
COMPLIANCE WITH SECTION 16(a)
For 1995 fiscal year, Joe C. Quick submitted one late
Form 4 filing to the U.S. Securities and Exchange
Commission.
PERFORMANCE GRAPH
The following graph compares the yearly percentage
change in the Company's cumulative total shareholder
return on its common stock with (i) the cumulative total
return of a broad market index (the NASDAQ MARKET INDEX)
and (ii) the cumulative total return of a peer group
index. In last year's Proxy Statement, NSSI's peer group
was comprised of four (4) publicly traded companies:
Gilbert Associates, Inc., Joule, Inc., Pacific Nuclear
Systems, Inc., and Quadrex Corp. This year, NSSI's peer
group index is comprised of the following five (5)
publicly traded companies: Gilbert Associates, Inc.,
Joule, Inc., Vectra Technologies, Inc. (name changed from
Pacific Nuclear Systems, Inc. in January 1994), Butler
International and GTS Durateck, Inc. NSSI selected Butler
International and GTS Durateck, Inc. to replace Quadrex
Corp. which was de-listed from NASDAQ in June 1994. The
selection of public companies for this peer group looks to
entities which provide technical manpower and support
services, principally for power generation industries.
Cumulative return for the Company and both indices were
calculated assuming dividend reinvestment.
<TABLE>
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG
NUCLEAR SUPPORT SERVICES, INC.,
NASDAQ MARKET INDEX AND PEER GROUP INDEX
<CAPTION>
Fiscal Year Ending
Company 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Nuclear Support
Svcs., Inc. 100 68.42 52.63 34.21 39.47 13.16
Peer Group Index 100 93.69 105.49 111.05 98.63 106.79
NASDAQ Market Index 100 134.19 131.96 171.62 181.61 220.50
</TABLE>
ASSUMES $100 INVESTED ON OCTOBER 1, 1990
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING SEPTEMBER 30, 1995
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors selects each year the accounting
firm to perform the financial audit and related work for
the Company for that year. KPMG Peat Marwick LLP has been
selected by the Board of Directors as the independent
auditors for the Company's current fiscal year commencing
October 1, 1995. Selection of this firm will be submitted
for ratification at the Annual Meeting. In the event the
shareholders do not ratify the appointment of KPMG Peat
Marwick LLP, the selection of other independent
accountants will be considered by the Board of Directors.
A representative of KPMG Peat Marwick LLP, expected to
be present at the Annual Meeting, will have the
opportunity to make a statement if he or she desires to do
so, and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT
AUDITORS.
SHAREHOLDER PROPOSAL
The following proposal, submitted by Mr. John Mattern,
has been provided to the Company for inclusion in this
year's proxy statement:
Given the Company's consistently poor performance
during the period that seven of the nine directors
were either employees or consultants, employees and
consultants - and their spouses and immediate
families - should be prohibited from being nominated
to serve on the NSSI Board of Directors subsequent
to the 1996 Annual Meeting.
Mr. Mattern has represented to the Company that his
address is Kapaun Air Station, PSC 3, Box 2487, APO AE
09021 and that, as of August 14, 1995, he owned 4,000
shares of NSSI common stock purchased as follows: 1,000
shares on 2/2/93, 1,000 shares on 3/29/93, 1,000 shares on
4/29/93, and 1,000 shares on 8/3/93. Mr. Mattern has also
represented that he intends to retain these shares through
the upcoming Annual Meeting on March 5, 1996.
The Company believes Mr. Mattern's proposal to be
excessive and potentially disruptive to the Company's
recovery from bankruptcy and thereafter in that:
A. The proposal is an absolute bar to service as a director
by any officer, employee, consultant, spouse or
immediate family member and would require replacement
of a majority of the Board within one year's time;
B. Qualified outside candidates may be reluctant to serve as
directors until the Company emerges from bankruptcy and its
financial status is clarified by a period of normal
operations;
C. The Company's present executive officers and employees have
extensive knowledge of the day-to day operations of
the Company which should be represented on the
Company's Board of Directors; and
D. The make-up of the Company's Board should be left to the
discretion and vote of its shareholders without
arbitrary limitations being set on the exercise of
the shareholder's discretion.
The Company intends to continue its efforts,
interrupted temporarily by the bankruptcy situation, to
attract additional qualified outside directors, but
believes that to virtually change the entire composition
of the Board at one time (as would be required by Mr.
Mattern's proposal) would be both disruptive and
detrimental to the Company and its shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
MATTERN PROPOSAL.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
If a shareholder intends to present a proposal at the
next Company's Annual Meeting of Shareholders, the
proposal must be submitted in writing and received by the
Secretary of the Company at its executive offices
currently located at 22 Northeast Drive, Hershey,
Pennsylvania, 17033, no later than August 16, 1996, in
order to be considered for inclusion in the Company's
Proxy Statement and form of proxy relating to that
meeting.
OTHER MATTERS
The Board of Directors does not intend to bring any
matters before the Annual Meeting other than those
specifically set forth in the notice of the Annual Meeting
and knows of no matters to be brought before the meeting
by others. If any other matters properly come before the
meeting, it is the intention of the persons named in the
enclosed proxy, or their substitutes, to vote said proxy
in accordance with their best judgment on such matters to
the extent allowed by SEC Rule 14a-4(c) which limits the
purpose for which discretionary authority may be granted..
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
WILL BE AVAILABLE AT THE ANNUAL MEETING. ANY SHAREHOLDER,
UPON WRITTEN REQUEST TO THE SECRETARY, MAY OBTAIN A COPY
OF THE COMPANY'S FORM 10-K WITHOUT CHARGE.
By Order of the Board of Directors
Ralph A. Trallo
President and Chief Executive Officer
Hershey, Pennsylvania
January 29, 1996
This Proxy is Solicited on Behalf of the Board of
Directors of
NUCLEAR SUPPORT SERVICES, INC.
22 Northeast Drive
Hershey, Pennsylvania 17033
The undersigned hereby appoints Joe C. Quick, Robert A.
Hess, Dale L. Ferguson, or Heath L. Allen as proxy (and
if the undersigned is a proxy, as substitute proxy),
each with the power to appoint his substitute, and
hereby authorizes any one of them to vote as designated
on the reverse side all the shares of common stock of
Nuclear Support Services, Inc., held of record by the
undersigned on December 29, 1995, at the Annual Meeting
of Shareholders to be held on Tuesday, March 5, 1996, at
1:00 PM at the Hotel Hershey, Hershey, Pennsylvania, and
at any adjournment thereof.
(continued on reverse side)
========================================================
ALL PROXIES WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS NOTED HEREON. IN THE ABSENCE OF
INSTRUCTIONS, THIS PROXY WILL BE TREATED AS GRANTING
AUTHORITY TO VOTE "FOR" THE ELECTION OF DIRECTORS, IN
FAVOR OF PROPOSAL 2 AND 4 AND "AGAINST" PROPOSAL 3 (THE
MATTERN PROPOSAL).
<TABLE>
<S> <C> <C>
1.FOR all nominees WITHHOLD Heath L. Allen,
listed to the AUTHORITY to Ferguson, Robert A.Hess,
right (except vote for Donald E. Lyons,Thomas P.
as marked to the nominees listed McShane, Wm. Lawrence
contrary to the right Petcovic, Joe C.Quick
Ralph A. Trallo
_____ _____ INSTRUCTION: To withhold
authority to vote for any
individual nominee, write
that nominee's name in the
space provided below
_________________________
_________________________
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
2. FOR AGAINST ABSTAIN With respect to
the
ratification of
the
selection of
_____ _____ _____ KPMG Peat Marwick LLP
as Certified Public
Accountants, as
independent auditors
of the Company for the
fiscal year commencing
October 1, 1995.
3. FOR AGAINST ABSTAIN With respect to the
proposal of John
Mattern to
_____ _____ _____ prohibit Company
officers and
others from
serving on
the Board of
Directors.
4. FOR AGAINST ABSTAIN OTHER BUSINESS:
In their discretion,
the proxies are
_____ _____ _____ authorized
to vote
upon such other
business as may
properly come
before
the meeting.
</TABLE>
The undersigned
hereby acknowledges
receipt of the Proxy
Statement dated January
29, 1996 and hereby
revokes any proxy or
proxies heretofore given
to vote shares at said
meeting or any
adjournments thereof.
Dated:____________________
__________________________
__________________________
__________________________
Sign here exactly as
name(s) appear on left
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED,
ADDRESSED ENVELOPE
