CANISCO RESOURCES, INC.
300 Delaware Avenue
Wilmington, Delaware 19801
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 13, 1996
To the Shareholders of Canisco Resources, Inc.
The Annual Meeting of the Shareholders of Canisco
Resources, Inc. (the "Company") will be held at the
Holiday Inn, 700 King Street, Wilmington, Delaware on
Tuesday, August 13, 1996, at 10:00 AM, 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 April 1, 1996;
(3) 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 July 12, 1996, 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 Transition Report on Form 10-K for 1996 is
enclosed herewith.
By Order of the Board of Directors
Ralph A. Trallo
President and Chief Executive Officer
Wilmington, Delaware
July 12, 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.
CANISCO RESOURCES, INC.
300 Delaware Avenue
Wilmington, Delaware 19801
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on August 13, 1996
GENERAL INFORMATION
This Proxy Statement is furnished in connection with
the solicitation by the Board of Directors of Canisco
Resources, Inc., (the "Company") of proxies for use at
the Annual Meeting of Shareholders to be held on Tuesday,
August 13, 1996, at the Holiday Inn, 700 King Street,
Wilmington, Delaware, at 10 AM, prevailing time, and
at any adjournment thereof. This Proxy Statement and
the accompanying form of proxy are being mailed to
shareholders on or about July 18, 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 April 1,
1996; 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 transition report on form 10-K for the
fiscal year ended March 31, 1996, accompanies this
Proxy Statement, the meeting notice and the proxy.
VOTING SHARES
The Board of Directors has fixed the close of business
on July 12, 1996, 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 Transition Report
on Form 10-Kof the Company. As of July 12, 1996, 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. 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 July 12, 1996 (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>
Name and Address Shares Beneficially Owned(1) Percentage of Class
<S> <C> <C>
Joe C. Quick 259,640(2) 11.97%
83 Almond Avenue
Hershey, PA 17022
ROI Capital Management, Inc. 174,600(3) 8.05%
One Bush Street, Suite 1150
San Francisco, CA 94104
Phronesis Partners, L.P. 111,800(4) 5.15%
2206 Beachwood Road
Amelia Island, FL 32034
</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 42,124
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 his spouse or certain
relatives (excluding adult children).
(3) ROI Capital Management, Inc. and affiliates ROI
Partners, L.P., ROI & Lane, L.P., Mark T. Boyer and
Mitchell Soboleski, report shared voting and investment
power over 174,600 shares. The information shown has
been derived from ROI Capital Management, Inc.'s form
13d filed with the SEC on or about January 25, 1996.
(4) The Company was advised that a 13d filing is forth-
coming from this entity. At the time of the printing
of this proxy statement, no further information was available.
The following table gives certain information as of
June 30, 1996, 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>
Name Sole Voting and Shared Voting and Aggregate Percentage
Investment Power Investment Power(1) Other(2) Total(3) of Class
<S> <C> <C> <C> <C> <C>
Joe C. Quick 114,490 103,026 42,124 259,640 11.97%
Dale L.
Ferguson 19,000 30,000 31,470 80,470 3.71%
Heath L.
Allen 20,000 -0- 47,298 67,298 3.10%
Wm. Lawrence
Petcovic 886 -0- 48,012 48,888 2.25%
Ralph A.
Trallo 9,946 -0- 27,282 37,228 1.72%
Robert A.
Hess -0- 21,800 5,932 27,732 1.28%
Donald E.
Lyons -0- -0- 14,747 14,747 0.68%
Thomas P.
McShane 8,300 -0- 4,331 12,631 0.58%
Michael J.
Olson(4) 2,099 -0- 10,000 12,099 0.56%
All Directors
and Officers
as a Group
( 9 Persons) 174,721 154,826 231,196 560,743 25.85%
</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 69. 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 62. Employed by the Company
since 1974 through fiscal year 1996. Currently a consultant
to the Company. 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)(2)(3), Age 43. 1987 to present,
President of McShane Group, Inc., (a financial and management
consulting firm) Timonium, MD. Director of the Company since 1991.
Wm. Lawrence Petcovic (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 a business consultant for L.P.
Associates. Director of the Company since 1981.
Joe C. Quick (1)(4), Age 61. 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 51. 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., predecessor in interest to Canisco
Resources, 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.
On January 31, 1996, the Company filed its Joint Plan
of Reorganization. The Amended Joint Plan of Reorganization
was filed and confirmed by the Court on April 24, 1996.
On June 28, 1996, the Company met all the requirements of
the Amended Plan by executing the necessary banking documents
for securing exit financing. The Effective Date for the
Company's exit from bankruptcy was July 1, 1996.
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
approxiamately $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 March 31, 1996,
met on three occasions. During fiscal year 1996, each
Director was present for a majority of the meetings of
the Board of Directors. Outside Directors of the Company
were paid one half of their annual retainer of $7,500.
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 Audit and Compensation committees were active in
fiscal year 1996. Each committee member was present
for all the meetings of the Board Committees on which
such Director served. Outside Board members appointed
to serve on the Compensation and Audit Committees were
paid one half of the annual retainer 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 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 1996.
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 three times during fiscal year 1996.
The Strategic Planning Committee was created by the
Board of Directors in April 1993 and did not meet during
fiscal year 1996. The function of the Strategic Planning
Committee is to assist Company management in the development
of strategies for future growth and profitability.
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 in fiscal year 1996.
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 61 See Election of Directors.
Ralph A. Trallo 51 See Election of Directors.
Michael J. Olson 42 Vice President, Secretary/Treasurer
and Chief Financial Officer of Cannon
Sline, Inc. since 1986.
Named Acting Chief Financial Officer of
Nuclear Support Services, Inc.
in January, 1995. Named Chief
Financial Officer, Vice President
and Secretary/Treasurer of the
Company in April, 1995.
</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 for
1994, 1995 and 1996 to or for the chief executive officer
and each of the executive officers of the Company whose cash
compensation exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Fiscal Year Compensation Long-Term Compensation
Principal Bonus Other Awards
Position Year Salary($) ($)(1) compen- Securities Underlying
satin Options/SARs (#)
($)(2)
<S> <C> <C> <C> <C> <C>
JOE C. QUICK 1996 $60,000 -0- 8,568 -0-
Chairman of 1995 $100,000 -0- 6,000 -0-
the Board 1994 $166,154 -0- 6,400 -0-
of Directors
RALPH A. 1996 $75,000 82,154 5,200 10,000(3)
TRALLO 1995 $150,000 167,904 9,600 10,000(3)
President, 1994 $150,000 169,713 3,580 27,282(3)
Chief Execu-
tive Officer
and Director;
also President
and CEO of
Cannon Sline
MICHAEL J. 1996 $45,000 49,292 2,675 10,000(3)
OLSON 1995 $90,000 100,743 5,530 10,000(3)
Vice 1994 $90,000 101,828 5,350 10,000(3)
President,
Secretary/
Treasurer and
Chief
Financial
Officer
</TABLE>
SAR (Stock
Appreciation
Rights)
(1) For fiscal year 1996 and 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, 1995 or
1996 but are covered under separate incentive arrangements.
Under those arrangements, Mr. Trallo and Mr. Olson were awarded
cash bonuses for 1994, 1995 and 1996. 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. These sums as well
as the fiscal year 1996 bonus were still outstanding as of
July 12, 1996.
(2) Included in Other Compensation are Board of Director
fees, automobile allowances, and excess life insurance
benefits provided by the Company.
(3) 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 in 1995 and 1996.
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 June 30, 1996, options for 261,797.05 shares
were outstanding to approximately 27 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
excercise 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 March 31, 1996 was
$2.50 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 aall 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 maya 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 June 30, 1996, Messrs. Hess, Allen, Petcovic, McShane,
Lyons and Trallo had acquired options for 5,932; 47,298;
48,012; 4,331; 14,747; and 2,282, respectively, pursuant
to the Program with exercise prices ranging from $3.38 to
$9.00.
SENIOR EXECUTIVE GROUP COMPENSATION PROGRAM
The following tables list information regarding stock
options and stock appreciation rights (SAR) granted to
and exercised or held by the Company's executive officers
in respect to its last fiscal year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential realizable
value at assumed annual
rates of stock price
appreciation
for option term
Individual Grants
Name Number of Percent of Exer- Expir- 0%($) 5%($) 10%($)
securities of Total cise ation
underlying Options/ or date
options/ SARs base
SARs granted price
granted to ($/sh)
(#)(1) employees
in fiscal
year
<S> <C> <C> <C> <C> <C> <C> <C>
RALPH A.
TRALLO 10,000 34% 2.50 n/a -0- 1,250 2,500
MICHAEL J.
OLSON 10,000 34% 2.50 n/a -0- 1,250 2,500
</TABLE>
(1) Stock Appreciation Rights awarded to Mr. Trallo and Mr. Olson.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Name Shares acquired Value Number of Value of
on exercise (#) Realized($) securities unexercised
underlying in-the-money
unexercised options/
options/SARs SARs at FY
at FY end (#) end($)
exercisable/ exercisable/
unexercisable unexercisable
(1)
<S> <C> <C> <C> <C>
JOE C.
QUICK -0- -0- 42,124/-0- -0-/-0-
RALPH A.
TRALLO -0- -0- 47,282(2)/-0- -0-/-0-
MICHAEL
J. OLSON -0- -0- 30,000(3)/-0- -0-/-0-
</TABLE>
(1) Options include those granted under the Company's
Senior Executive 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 Stock Option Program and the Director's
Stock Option Program and 20,000 shares under the Company's
Stock Appreciation Plan.
(3) Mr. Olson's options include 10,000 shares under the
Company's Stock Option Program and 20,000 shares under
the Company's Stock Appreciation Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
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
William 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 1996 is set forth below.
The Committee formulated the 1996 Executive Compensation
program to focus on short term financial results for FY 1996.
During the reorganization and focus on exit from bankruptcy
during FY 1996, the committee limited the Executive Program
to full time Canisco corporate level employees: Joe Quick,
Ralph Trallo and Michael Olson. Subsidiary officer
compensation was delegated to the executive group. Under
the 1996 Senior Executive Program, the total compensation
for executives is managed utilizing three (3) components:
base pay, incentive pay and benefits.
(1) Base salaries for FY 1996 remained the same for Mr.
Trallo and Mr. Olson. Mr. Quick's salary was changed from
$160,000 to $120,000 per year to reflect the change in his
role from daily company operations to Board Chairman and
special projects.
(2) Incentive pay available to be earned for FY 1996 was
determined as a percentage of pre-tax profits above a
performance threshold. The Committee reviews individual
performance with each executive after consultation with
the CEO and reports its findings to the Board of Directors.
(3) Benefits, the third component of executive pay, are
the same as staff benefits for the operating company employees.
The Committee does not consider any executive compensation
that is linked to Board of Directors fees or additional
options or pay of a company-wide award for exceptional
service as determined by the CEO using options allocated
by the Committee.
Joe C. Quick, the Companys Chairman of the Board had an
annual base salary of $120,000. Mr. Quick had no incentive
bonus below a Canisco 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. Mr. Quick
received no incentive pay for FY 1996.
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 Canisco performance. The incentive pay for
FY 1996 for both Mr. Trallo and Mr. Olson was paid out under
the contract agreement for the performance of Cannon Sline.
There was no Canisco incentive payout. The Committee awarded
Mr. Trallo and Mr. Olson 10,000 SAR's at $2.50 linked to the
future performance of Canisco Resources, Inc.
With the exit from bankruptcy completed, the Committee
is developing a common program for all executives for
FY 1997 and to enhance compensation strategy to a median
base pay with opportunity to earn a financial performance
based incentive bonus linked to short term financial
performance and long term growth development.
The Compensation Committee
William Lawrence Petcovic
Thomas P. McShane
Donald E. Lyons
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Other than Board and Committee fees, there was no other compensation paid.
CERTAIN TRANSACTIONS
The firm of Keefer, Wood, Allen, and Rahal, of which Heath L.
Allen, a Director, is a partner, performed services in the
amount of $22,056 for the Company during fiscal year 1996,
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 1997 in an aggregate
amount less than 5% of Keefer, Wood, Allen, & Rahal's annual
gross revenues.
Robert A. Hess received approximately $36,192 in fiscal
year 1996 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 1997.
COMPLIANCE WITH SECTION 16(a)
For 1996 fiscal year, no late Form 4 filings were submitted.
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. Last
year, the Company's peer group index is comprised of the
following five (5) publicly traded companies: Gilbert
Associates, Inc., Joule, Inc., Vectra Technologies, Inc.,
Butler International and GTS Durateck, Inc. The same peer
group was chosen for fiscal year 1996. 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. For fiscal year 1997,
the peer group will be revised to more closely reflect
the business complexion of the Company after its reorganization.
<TABLE>
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, PEER GROUP AND BROAD MARKET
<CAPTION>
COMPANY 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
CANISCO RESOURCES 100 112.5 95.83 81.25 31.25 41.67
PEER GROUP 100 97.6 96.79 96.36 74.96 106.5
BROAD MARKET 100 105.4 117.95 136.32 144.62 194.52
THE BROAD MARKET INDEX CHOSEN WAS:
NASDAQ MARKET INDEX
THE PEER GROUP IS MADE UP OF THE FOLLOWING SECURITIES:
BUTLER INTERNATIONAL
GILBERT ASSOCIATES INC.
GTS DURATEK INC.
JOULE INC.
VECTRA TECHNOLOGIES INC.
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 April 1, 1996.
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 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 located at 300
Delaware Avenue, Wilmington, Delaware no later than
February 15, 1997, 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 TRANSITION 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
Wilmington, Delaware
July 12, 1996
</TABLE>
