<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
C. H. HEIST CORP.
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
C.H. HEIST CORP.
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 1996
To the Shareholders:
The 1996 Annual Meeting of Shareholders of C.H. Heist Corp. (the "Company")
will be held at the Sheraton Sand Key, 1160 Gulf Boulevard., Clearwater Beach,
Florida 34630, on Friday, May 10, 1996, at 10:00 A.M. local time, for the
following purposes:
1. To elect six Directors of the Company, each of whom is to hold
office until the next Annual Meeting of Shareholders and until the due
election and qualification of his successor;
2. To ratify the selection by the Board of Directors of the firm of
KPMG Peat Marwick LLP as independent public accountants for the Company and
its subsidiaries for the fiscal year 1995; and
3. To approve the Leveraged Stock Option Plan for Executive officers
of C. H. Heist Corp. and Ablest Service Corp.
4. To transact such other business as may properly come before the
meeting and any adjournment or adjournments thereof.
The Shareholders of record at the close of business on March 29, 1996, will
be entitled to notice of, and to vote at, the meeting or any adjournments
thereof.
If you cannot personally attend the meeting, it is requested that you
promptly fill in, sign and return the enclosed proxy, which needs no postage if
mailed in the United States.
By order of the Board of Directors
Isadore Snitzer
Secretary
Dated: April 5, 1996
<PAGE> 3
C.H. HEIST CORP.
-------------------------
PROXY STATEMENT
-------------------------
The enclosed proxy is solicited by the Board of Directors of C.H. Heist
Corp. (the "Company") to be voted at the 1996 Annual Meeting of Shareholders to
be held at the Sheraton Sand Key, 1160 Gulf Boulevard, Clearwater Beach, Florida
34630, on Friday, May 10, 1996, at 10:00 A.M., and at any adjournment or
adjournments thereof.
Only Shareholders of record as of the close of business on March 29, 1996,
are entitled to notice of, and to vote at, the meeting or any adjournments
thereof. On March 29, 1996, the Company then had outstanding voting securities
consisting of 2,872,773 shares of Common Stock, par value $.05 per share.
("Common Shares"). Each share is entitled to one vote. Shares cannot be voted at
the meeting unless the Shareholder is present or represented by proxy.
The cost of soliciting proxies will be borne by the Company. In addition to
the use of mails, proxies may be solicited, personally or by telephone or
facsimile transmission, by officers, directors and regular employees of the
Company. The Company will also request securities brokers, custodians, nominees
and fiduciaries to forward soliciting material to the beneficial owners of stock
held of record and will reimburse them for their reasonable out-of-pocket
expenses in forwarding soliciting material.
Any Shareholder executing the accompanying form of proxy has the power to
revoke it at any time prior to its exercise. Such revocation may be made in
person at the 1996 Annual Meeting of Shareholders or by written notification to
the Secretary of the Company. Every properly signed proxy will be voted unless
previously revoked if the proxy is returned to the Company properly executed and
in sufficient time to permit the necessary examination and tabulation of the
proxy before a vote is taken.
The Company's address is 810 North Belcher Road, Clearwater, Florida 34625,
and the telephone number is (813) 461-5656. This Proxy Statement and the
enclosed proxy will be mailed to the Shareholders on or about April 5, 1996.
ITEM 1 -- ELECTION OF DIRECTORS
NOMINEES FOR DIRECTORS
Six Directors are to be elected at the meeting each to serve until the next
annual meeting of shareholders and until the Director's successor shall have
been elected and shall have qualified. It is intended that the shares
represented by proxies solicited by the Board of Directors will be voted for the
six nominees for Director of the Company hereinafter named, unless authority to
vote for one or more nominees is withheld. If for any reason any of said
nominees shall become unavailable for election, which is not now anticipated,
the proxies will be voted for a substitute nominee designated by the Board of
Directors, if any.
Six Directors were elected to the Board of Directors at the 1995 Annual
Meeting of Shareholders and are nominees for re-election at the 1996 Annual
Meeting of Shareholders.
The following information about each nominee with respect to his principal
occupation or employment and the name and principal business of the corporation
or other organization in which such occupation or
<PAGE> 4
employment is carried on and other affiliations has been furnished to the
Company by the respective nominees for director:
<TABLE>
<CAPTION>
FIRST BECAME
NAME PRINCIPAL OCCUPATION AGE A DIRECTOR
- ------------------------------------ ------------------------------------------ --- ------------
<S> <C> <C> <C>
Charles H. Heist.................... Chairman of the Board of Directors and 45 1978
President of the Company
John L. Rowley...................... Vice President -- Finance 52 1994
Richard J. O'Neil................... Retired 66 1973
Willard F. Foster................... Retired 72 1956
Chauncey D. Leake, Jr............... Financial/Business Consultant 68 1971
Charles E. Scharlau................. Chairman of the Board and Chief Executive 68 1980
Officer, Southwestern Energy Co.
</TABLE>
Charles H. Heist, who has been President of the Company since 1983, became
Chairman of the Board and Chief Executive Officer of the Company in November
1988 upon the retirement of Willard F. Foster from those positions. From 1983
until his retirement, Mr. Foster served as Chairman of the Board and Chief
Executive Officer of the Company. Richard J. O'Neil served as Vice
President -- Finance of the Company from 1973 until May 1992, when he became
Senior Vice President. Mr. O'Neil retired as an Officer in May of 1994. Mr.
Rowley became Vice President -- Finance and Chief Financial Officer of the
Company in May, 1992. Prior to that he was Treasurer and Chief Accounting
Officer of the Company from 1975 until his promotion in 1992.
Mr. Leake has been a Financial/Business Consultant since October 1990. From
March 1, 1988 to October 1990 he was Vice President of First Albany Companies,
Inc., an investment banking firm. Prior to joining that firm, Mr. Leake was
employed as a Vice President of Moseley Securities Corporation, a member of the
New York Stock Exchange, Inc., with which firm he was associated for over five
years.
Mr. Scharlau is Chairman of the Board and Chief Executive Officer of
Southwestern Energy Co., a one-utility holding company with subsidiaries engaged
in the exploration, production and marketing of natural gas and oil and in the
operation of an intrastate gas transmission and distribution system in Arkansas.
He has been associated with that corporation for over five years.
INFORMATION ABOUT THE BOARD OF DIRECTORS
During the Company's fiscal year ended December 31, 1995, the Board of
Directors of the Company held a total of four (4) regularly scheduled meetings.
During fiscal 1995, each of the Directors attended all meetings of the Board and
all meetings of all committees of the Board on which he served, except for one
director who missed two meetings. Nonemployee directors received a director's
fee of $1,800 per meeting, plus expenses during fiscal 1995 . Effective the
first quarter of 1996 outside directors will be paid an annual retainer of
$10,000.
The Board of Directors has executive, executive compensation and audit
committees. The executive committee consists of Messrs. Heist, Rowley and
Foster. During the 1995 fiscal year, the executive committee held four meetings,
the compensation committee met twice and the audit committee met twice. The
compensation committee consists of Messrs. Foster, Leake and Scharlau and
authorizes the compensation for each executive officer. The audit committee
consists of Messrs. O'Neil, Leake and Scharlau. This committee monitors and
reviews the financial controls, reporting procedures, and internal checks and
balances of the Company as well as the independence and performance of its
outside auditors. The Company does not have any standing nominating committee.
The usual duties and functions of a nominating committee are considered and
acted upon by the entire Board of Directors.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth pertinent information concerning the
ownership of shares by persons know to the Company to own beneficially as of the
record date more than 5% of the outstanding shares of Common Stock of the
Company. For the purpose of this proxy statement, beneficial ownership has the
meaning given under the rules of the Securities and Exchange Commission relating
to proxy statements and does not necessarily indicate economic interest. The
beneficial ownership information presented herein is based upon information
furnished by each person or contained in filings made with the Securities and
Exchange Commission.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP OF CLASS
---------------------------------------------------- ----------------------- --------
<S> <C> <C>
C.H. Heist Trust.................................... 738,072(1)(2) 25.7%
c/o Isadore Snitzer,
Charles H. Heist,
Clydis D. Heist and
Willard F. Foster,
Trustees
710 Statler Building
Buffalo, New York 14202
Charles H. Heist.................................... 282,446(1)(3)(4) 9.8%
c/o C.H. Heist Corp.
810 North Belcher Road
Clearwater, Florida 34625
Victoria Hall....................................... 214,259(4)(5) 7.5%
c/o C.H. Heist Corp.
810 North Belcher Road
Clearwater, Florida 34625
Dixie Lea Clark..................................... 176,266(4)(5) 6.1%
c/o C.H. Heist Corp.
810 North Belcher Road
Clearwater, Florida 34625
Clydis D. Heist..................................... 337,730(4) 11.8%
Trust For The Benefit Of Grandchildren
Quest Advisory Corp................................. 202,530(6) 7.1%
1414 Avenue of the Americas
New York, New York 10019
</TABLE>
- ---------------
(1) The 738,072 shares indicated are held of record in a trust created by Mr.
C.H. Heist for the benefit of his family prior to his death in February
1983. The four trustees of the trust are Clydis D. Heist, Willard F.
Foster, Charles H. Heist and Isadore Snitzer. Each of the trustees may be
deemed to be the beneficial owner of the shares held in the trust as they
share both voting and investment powers with respect to such shares
pursuant to the terms of the trust. The trust will continue until the death
of Mrs. Heist and the children of Mr. and Mrs. Heist.
(2) Isadore Snitzer is also the beneficial and record owner of 2,022 shares
(less than 1%).
(3) Amount indicated includes options that are presently exercisable to purchase
9,853 shares and 272,593 shares owned directly by Mr. Heist. Mr. Heist is
the Chairman of the Board and President of the Company.
(4) There are nine Trusts created for the benefit of the children of Charles H.
Heist and his sisters, Victoria Hall and Dixie Lea Clark. They also are
trustees of the trusts. Each of the trustees may be deemed to be the
beneficial owner of the shares held in trust as they share both voting and
investment powers with respect to such shares pursuant to the terms of the
trusts.
(5) The two daughters of C.H. Heist (deceased) and Clydis D. Heist are both of
majority age and own their shares directly. The 214,259 shares owned by
Victoria Hall and the 176,266 shares owned by Dixie Lea
3
<PAGE> 6
Clark do not include the 738,072 shares owned by the C.H. Heist Trust or
the shares of the Trust for the children mentioned in footnote 4. Both
daughters disclaim any beneficial ownership of such shares.
(6) Quest Advisory Corp. is a registered investment advisor under the Investment
Advisors Act of 1940, which is controlled by Charles M. Royce, its
President. Mr. Royce disclaims beneficial ownership of the shares owned by
Quest.
SECURITY OWNERSHIP OF MANAGEMENT
As of March 31, 1996, the Directors, individually, and all Directors and
Officers of the Company as a group, respectively, owned beneficially the
following amounts of Common Stock of the Company:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------------------------------------------ -------------------- --------
<S> <C> <C>
Charles H. Heist............................................ 282,446(1)(2)(3) 9.8%
John L. Rowley.............................................. 22,359(3)(6) (4)
Richard J. O'Neil........................................... 18,104(4) (5)
Willard F. Foster........................................... 61,047(1)(7) 2.5%
Chauncey D. Leake, Jr....................................... 498 (5)
Charles E. Scharlau......................................... 205 (5)
All Officers and Directors (14 persons)..................... 1,530,666(8) 53.3%
</TABLE>
- ---------------
(1) Does not include the 738,072 shares held by the C.H. Heist Trust with
respect to which Willard F. Foster, Charles H. Heist, Clydis D. Heist and
Isadore Snitzer share voting and investment powers. See footnote (1) under
table of "Security Ownership of Certain Beneficial Owners" above.
(2) See footnotes (3) and (4) under Table of "Security Ownership of Certain
Beneficial Owners", above. Does not include 337,730 shares held in trust
for the children of Charles H. Heist and his two sisters.
(3) Executive Officer of the Company.
(4) Amount indicated includes options that are presently exercisable to purchase
18,104 shares.
(5) Less than 1%.
(6) Amounts indicated are options that are presently exercisable.
(7) The 61,047 shares indicated are beneficially owned by and held in trust for
the benefit of Willard F. Foster.
(8) Includes options that are presently exercisable to purchase 112,633 shares,
and the 738,072 shares and 337,730 shares described in footnotes (1) and
(4), under table of "Security Ownership Of Certain Beneficial Owners".
4
<PAGE> 7
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities for the Company and its subsidiaries
for the fiscal years ended December 31, 1995, December 25, 1994, December 26,
1993 and of those persons who were, at December 31, 1995, (i) the chief
executive officer and (ii) the other four most highly compensated executive
officers of the Company and its subsidiaries, (the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------
AWARDS
ANNUAL COMPENSATION(1) --------------
-------------------------------- SECURITIES
FISCAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) OPTIONS
- ----------------------------------------------- ------ -------- -------- --------------
<S> <C> <C> <C> <C>
Charles H. Heist(3)............................ 1995 $165,000 $25,000 --
Chairman of the Board.......................... 1994 $145,000 $ -- --
President and Director......................... 1993 $138,000 $ -- --
W. David Foster(2)............................. 1995 $130,000 29,000 7,000
President -- Chief Operating Officer........... 1994 $120,000 $55,440 16,000
Ablest Service Corp............................ 1993 $109,000 $50,358 --
John L. Rowley(3).............................. 1995 $120,000 $18,000 6,000
Vice President -- Finance...................... 1994 $112,000 $ -- 10,000
C.H. Heist Corp................................ 1993 $105,000 $ -- --
Frank Trotter(3)............................... 1995 $120,000 $18,000 6,000
Vice President................................. 1994 112,000 $ -- 10,000
Chief Operating Officer, C. H. Heist Corp...... 1993 105,000 $ -- --
Duane F. Worthington II(2)..................... 1995 $116,000 $20,900 6,000
Vice President -- Operations U.S............... 1994 $103,000 $24,926 5,000
C.H. Heist Corp................................ 1993 $ 95,000 $ -- --
</TABLE>
- ---------------
(1) The Company provides to certain of its officers income tax services and the
use of Company cars. The amounts indicated do not include the cost to the
Company of such benefits as management believes they do not exceed 10% of
total salary and bonus of any individual.
(2) Bonus was accrued based on the Company's Management Incentive Plan. See
"Report on Executive Compensation".
(3) Bonus for 1995 was a discretionary bonus granted by the Compensation
Committee of the Board of Directors. See "Report on Executive Compensation."
5
<PAGE> 8
OPTION GRANTS
Shown below is information on grants of stock options pursuant to the
Company's 1991 Stock Option Plan (the "Option Plan") during the fiscal year
ended December 31, 1995, to the Named Officers.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
PERCENTAGE ASSUMED ANNUAL
OF TOTAL RATES OF STOCK
OPTIONS EXERCISE PRICE APPRECIATION
GRANTED TO OR BASE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------
NAME GRANTED(1) FISCAL 1995 (PER SHARE) DATE 5% 10%
- ------------------------------ ---------- ------------ ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
W. David Foster............... 7,000 14.9% $6.94 12/06/05 $51,000 $53,440
John L. Rowley................ 6,000 12.8% $6.94 12/06/05 $43,700 $45,800
Frank Trotter................. 6,000 12.8% $6.94 12/06/05 $43,700 $45,800
Duane F. Worthington II....... 6,000 12.8% $6.94 12/06/05 $36,435 $45,800
</TABLE>
- ---------------
(1) The options indicated were granted and vested on December 6, 1995 the date
of grant. If a "Change in Control" or a "Potential Change in Control" (as
defined in the Option Plan) occurs then, to the extent vested, all options
outstanding under the Option Plan will be cashed out on the basis of the
difference between the option exercise price and the "Change of Control
Price" (as defined in the Option Plan) as of the date the Change in Control
or Potential Change of Control is deemed to have occurred or such other
date as the Company may determine prior to the Change in Control.
Generally, the "Change of Control Price" is defined under the Option Plan
to mean the highest per share price offered or paid in the 60-day period
preceding the Change in Control or Potential Change in Control.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The Table below provides information with respect to unexercised options to
purchase the Company's Common Stock granted under the Option Plan to Named
Officers and held by them on December 31, 1995. None of the Named Officers
exercised any stock options during fiscal 1995. All options indicated are fully
exercisable.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS
NAME DECEMBER 25, 1994 AT DECEMBER 31, 1995
------------------------------------------------ -------------------- --------------------
<S> <C> <C>
Charles H. Heist................................ 9,853 $-0-
W. David Foster................................. 31,660 $-0-
John L. Rowley.................................. 22,359 $-0-
Frank Trotter................................... 24,140 $-0-
Duane F. Worthington II......................... 17,289 $-0-
</TABLE>
REPORT ON EXECUTIVE COMPENSATION
BY THE COMPENSATION COMMITTEE
The Compensation Committee is composed of three independent, non-employee
directors. The committee approves the salaries of executive officers and
monitors the Management Incentive Plan (the "Incentive Plan") and the Stock
Option Plan (the "Option Plan"). The Incentive Plan was approved by the Board of
Directors and became effective in fiscal 1993 . The Option Plan was approved by
the Board of Directors and the shareholders of the Company and became effective
in fiscal 1992.
The Company's compensation programs are designed to attract and retain
qualified executives by providing competitive salaries and, through the
Incentive Plan and the Option Plan, incentive compensation linked to financial
performance of the Company. The Company's executive compensation program
consists of three key elements: (1) a base salary component; (2) an annual bonus
component; and (3) a long-term, stock
6
<PAGE> 9
option component. The policies with respect to each of these elements, as well
as the basis for determining the compensation of the Chief Executive Officer of
the Company, Charles H. Heist, are described below.
Salary Component. Base salaries for executive officers are determined with
reference to salary ranges established by the Compensation Committee in fiscal
1993 updated through 1995 based on a comprehensive survey of base salaries for
executive officers of non-manufacturing companies conducted for the Company by
the Director of Human Resources. The two sources used were William M. Mercer
Inc. and Watson Wyatt Data Services top management report 1995/1996. The ranges
are considered by the committee to provide competitive compensation to the
Company's executive officers and encompass salaries in the 50th to 75th
percentiles of salaries for comparable positions as determined by the survey.
For fiscal 1996, the Compensation Committee approved a 12.1% increase in
the base salary of the Company's Chairman and Chief Executive Officer. This
compares to a 13.8% increase awarded to the Chief Executive Officer for fiscal
1995. In awarding this increase, the committee considered the Company's
financial performance, particularly a dramatic improvement for the fiscal year
ended December 31, 1995 in which earnings increased five fold, and the Chief
Executive Officer's leadership in refocusing Heist Field Service, bringing new
business services on line in 1995 and implementing the EVA(R) management
reporting system, incentive plan and leveraged stock option program.
Additionally, the committee believed that the increase in the Chief Executive
Officer's salary was warranted in order to bring his compensation to a level
more competitive with that of chief executive officers in the non-manufacturing
sector, based on the survey referred to above. With this increase, the salary of
the Chief Executive Officer is under the median of salaries for chief executive
officers as determined by the survey.
Salaries for the other executive officers of the Company for fiscal 1996
were increased by the Compensation Committee based on recommendations by the
Chief Executive Officer. These increases ranged from 5.6% to 7%, with the
average increase being approximately 6.2%. This compares to increases for fiscal
1995 for such officers ranging from 4% to 8%, with the average increase for the
year being 7%. The fiscal 1996 increases place the salaries of these executive
officers at or somewhat above the 75th percentile of salaries for comparable
executive positions as determined by the survey. In awarding these increases,
the committee considered the Company's financial performance, the executive
officers' individual contributions to such performance, and the competitiveness
of the base salaries of these officers as compared to the base salaries of
executives reflected in the survey.
Incentive Plan. The Incentive Plan is an annual goal attainment plan that
provides incentive awards based upon the achievement of predetermined and
communicated financial performance objectives. The Chief Executive Officer and
the Chief Financial Officer of the Company establish on an annual basis
operating income objectives for each segment of the Company and a return on
equity objective for the company as a whole. Depending on their position in the
Company, executive officers' incentive awards are set at 25% to 30% of their
base salaries for the fiscal year. Depending on position 70%-80% of the
incentive award is based on achievement of the operating income objective and
the remainder of the award on achievement of the return on equity objective. If
both objectives are met, executive officers receive 100% of their target
incentive award. If the objectives are exceeded, bonuses may reach up to a
maximum of 200% of the targeted incentive award. No incentive is paid below 80%
of target. Pro rata amounts are paid from 80% to 100% of target.
For fiscal 1995, incentive awards were accrued under the Incentive Plan for
two executive officers in the amount shown in the compensation table. The return
on equity objective established for fiscal 1995 was not met and no incentive was
paid for this objective. The other executive officers of the Company were
granted discretionary bonuses by the compensation committee at the amounts
accrued in the table due to the five fold increase in earnings and the
performance of Heist Field Services. The plan has been terminated and for fiscal
years 1996 and thereafter all officers will be participating in the EVA(R)
Incentive Plan, described below.
Option Plan. The Option Plan is intended to advance the interest of the
Company and its shareholders by enhancing the Company's ability to attract and
retain highly-qualified key employees and by providing an incentive to such
employees to achieve the Company's long-term business plans and objectives. No
options were granted to the Chief Executive Officer in fiscal 1995. Options were
granted to the other executive officers in fiscal 1995, for exceeding financial
objectives.
7
<PAGE> 10
New EVA Incentive Plan. The Board of Directors and the Compensation
Committee have approved the adoption and implementation of an Economic Value
Added ("EVA") Incentive Remuneration Plan (the "EVA Plan"). The EVA Plan will
strengthen the alignment of interests between the Company's key employees and
its shareholders through the use of EVA incentive compensation and the increased
ownership by certain officers of shares of the Company's common stock. The
purpose of the EVA incentive compensation plan is to provide incentive
compensation to key employees in a form which relates their financial reward to
an increase in value of the corporation to its shareholders. In general, EVA is
the corporation's annual net operating profit after taxes, less a capital
charge. The capital charge is intended to represent the return expected by the
shareholders of the corporation. The Compensation Committee believes that EVA
improvement is the financial performance measure most closely correlated with
increases in shareholder value.
For each performance year there will be a target EVA for the corporation.
The target EVA will generally be the average of the EVA for the current year and
the current year target EVA, plus an expected improvement. If the EVA for the
performance year equals the target EVA for the year, the participants will
receive a cash bonus under the Plan. The amount of the bonus will vary according
to the amount by which the actual EVA exceeded the target EVA, the participant's
base salary, and other factors. For certain officers, a portion of the bonus
amount will not be payable, but will be used in a formula pursuant to the
Leveraged Stock Option Plan, described in Item 3 below; all others will receive
their entire bonus in cash. If the EVA for the performance year is less then the
target EVA for the year, less bonus would be paid under the Plan for that year,
and could result in zero bonus being paid.
THE COMPENSATION COMMITTEE
Charles E. Scharlau Chauncey D. Leake, Jr.
Willard F. Foster
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
The Board of Directors of the Company consists of Charles H. Heist, Willard
F. Foster, Chauncey D. Leake, Jr., Richard J. O'Neil, Charles E. Scharlau, and
John L. Rowley, of whom Messrs. Foster, Leake and Scharlau are members of the
compensation committee.
Willard F. Foster, who served on the compensation committee of the Board of
Directors during 1995, served as the Chairman of the Board and Chief Executive
Officer of the Company prior to his retirement in 1988.
Two of the Company's facilities are presently leased on a month-to-month
basis from a partnership, Colander Associates, the beneficial interests of which
are held by members of the family of Mr. C.H. Heist (deceased), by Messrs.
Willard F. Foster, Isadore Snitzer and Robert Goldsmith and by the Estate of
Louis Borins. Both leases obligated the Company during fiscal 1995 to bear all
expenses relating to the maintenance of the properties and to pay all insurance
premiums and real estate taxes and assessments. The Company paid approximately
$48,300 under these leases (including $37,200 of fixed rents) for the year ended
December 31, 1995.
UNITED STATES EMPLOYEES' PENSION PLAN
Since July 1, 1986, the Company has maintained the C.H. Heist Corp. United
States Employees' Pension Plan ("Pension Plan"), a defined benefit retirement
plan for the benefit of its eligible non bargaining unit United States employees
and their beneficiaries. All non bargaining unit United States employees of the
Company become participants in the Pension Plan upon completion of one year of
eligibility service. All of the executive officers listed in the preceding "Cash
Compensation" table participate in the Pension Plan.
The Pension Plan is a trusteed plan and is funded entirely by Company
contributions. The Pension Plan is administered by a Committee appointed by the
Company, consisting of Gail A. Orffeo, John L. Rowley and Isadore Snitzer.
8
<PAGE> 11
The Pension Plan generally provides a monthly benefit at normal retirement
(age 65) equal to 1 percent of an employee's average monthly compensation (as
defined in the Pension Plan) during the employee's service, multiplied by the
employee's years of credited service to a maximum of thirty. In general, the
monthly compensation covered by the Pension Plan includes salary and bonuses.
Credited service means an employee's service with the Company after July 1,
1986. An employee will be fully vested under the Pension Plan if the employee
completes five years of vesting service after July 1, 1986. An employee may
elect to retire under the Pension Plan after age 55 and completion of five years
of vesting service. Benefits are reduced for an employee who elects the early
retirement option as defined in the Pension Plan agreement. In addition, the
Pension Plan provides for certain disability and death benefits.
Under a defined benefit plan, contributions are not specifically allocated
to individual participants. The table below shows estimated annual retirement
benefits based on a 5.5% increase in annual compensation covered by the plan
payable to each of the executive officers named above in the "Cash Compensation"
table, who retires at age 65 after the number of years of credited service
indicated. The estimates assume that benefits commence at age 65 and that the
employee elects to receive the benefits only during the employee's own lifetime
rather than the joint lives of the employee and the employee's spouse.
<TABLE>
<CAPTION>
AMOUNT OF REMUNERATION
PAID FOR FISCAL YEAR
ENDED DEC. 25, 1994 PROJECTED YEARS
COVERED BY THE OF CREDITED SERVICE
NAME OF INDIVIDUAL PENSION PLAN AT NORMAL RETIREMENT BENEFIT
- ---------------------------------------------- ---------------------- -------------------- -------
<S> <C> <C> <C>
Charles H. Heist.............................. $165,000 29 $43,500
W. David Foster............................... $185,440 14 $21,000
John L. Rowley................................ $120,000 22 $26,400
Duane F. Worthington II....................... $134,926 30 $32,900
Frank Trotter................................. $120,000 14 $16,800
</TABLE>
COMMON STOCK PERFORMANCE
The stock performance graph presented on the next page compares the Company
to the American Stock Exchange Market Value Index, (a broad market Index) and
American Stock Exchange Service Industry Index.
The American Stock Exchange Service Industry Index is intended to provide a
peer group comparison, to the extent possible. A search of publicly traded
companies that was made for the Company by an independent consultant was able to
discover only one company with the same mix of businesses as the Company
(industrial maintenance and temporary employment), and that company's capital
structure was not comparable to the Company's. It was determined after an
extensive search that the Company could not construct an appropriate peer group
in the same industries because they would be over weighted to either Industrial
Maintenance or Temporary Help. Having no appropriate alternative to use as a
peer group, the AMEX Service Industry Index was selected. C.H. Heist Corp. is
one of 139 companies that are included in the Service Industry Index.
9
<PAGE> 12
5-YEAR TOTAL SHAREHOLDER RETURN
HEIST (C H) CORP VS. AMEX MARKET VALUE AND SERVICE INDUSTRY INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD C. H. HEIST AMEX MARKET AMEX SERVICE
(FISCAL YEAR COVERED) CORP. VALUE INDEX INDUSTRY
<S> <C> <C> <C>
1990 100 100 100
1991 95 128 141
1992 107 130 153
1993 104 155 201
1994 97 141 168
1995 95 178 207
</TABLE>
SOURCE: Compustat PC Plus
NOTES: Assumes $100 invested on 12/31/90 in C.H. Heist Corp. stock and the
AMEX Market Value and Service Industry Indices. Reflects month-end
dividend reinvestment.
CERTAIN TRANSACTIONS
Certain of the Company's Buffalo, New York facilities are leased from Mr.
Charles H. Heist, Chairman of the Board, President and Chief Executive Officer
of the Company, and his two sisters, Dixie Lea Clark and Victoria Hall. Under
the lease, the Company is responsible for maintenance and all insurance
premiums, assessments and taxes and the rent is to be increased or decreased
once every three (3) years in the event of each full 10% change in the cost of
living index. The increase or decrease in the rent is fixed by the lease at an
amount equal to $1,650 per year for each full 10% change. Rents of approximately
$108,600 including amounts paid for the foregoing purposes, were paid under the
lease during the year ended December 31, 1995.
For the 1995 fiscal year, the Company paid $60,900 for legal services to
the law firm of Borins, Setel, Snitzer & Brownstein, 710 Statler Towers,
Buffalo, New York 14202, a law firm in which Isadore Snitzer, Esq., the
secretary of the Company, is a partner.
CERTAIN REPORTS
Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than 10% of its Common
Stock are required to report their ownership of the Company's Common Stock and
any changes in that ownership to the Securities and Exchange Commission.
Specific due dates for these reports have been established, and the Company is
required to report in this Proxy Statement any failure to file by these dates
during 1995. All of these filing requirements were satisfied in 1995 by the
Company's directors, officers and ten percent holders.
10
<PAGE> 13
ITEM 2 -- RATIFICATION OF AUDITORS
KPMG Peat Marwick LLP audited the Company's financial statements for the
fiscal year ended December 31, 1995 and has been selected by the Board of
Directors to audit the Company's financial statements for the current fiscal
year. KPMG Peat Marwick LLP and its predecessors have audited the Company's
financial statements annually since 1969 and is considered well qualified by
management and the Board of Directors. KPMG Peat Marwick LLP is a member of the
Securities and Exchange Commission Practice Section of the American Institute of
Certified Public Accountants -- Division of C.P.A. Firms and accordingly, has
periodic Peer Reviews which consist of a review of the quality of its accounting
and auditing practice by another C.P.A. Firm. A representative of KPMG Peat
Marwick LLP is expected to attend the meeting and will have an opportunity to
make a statement or respond to appropriate questions from Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY.
ITEM 3 -- ADOPTION OF A LEVERAGED STOCK
OPTION PLAN FOR EXECUTIVE OFFICERS
There will be submitted at the Annual Meeting for action by the holders of
common stock a proposal to adopt a Leveraged Stock Option Plan for executive
officers (the "Leveraged Option Plan") to be implemented in connection with the
Company's Economic Value Added (EVA) Incentive Remuneration Plan ("EVA Incentive
Plan") described above in the Report of the Compensation Committee of the Board
of Directors on Executive Compensation. The Leveraged Option Plan has been
approved by the Board of Directors and the Compensation Committee. The following
summary of the material provisions of the Leveraged Option Plan is qualified by
reference to such plan, a copy of which is on file with the Securities and
Exchange Commission.
The purpose of the Leveraged Option Plan is to strengthen the alignment of
interests between the executive officers and the shareholders of the Company
through the increased ownership by such officers of shares of the Company's
common stock. The total number of shares of common stock of the Company that may
be made subject to options awarded under the Leveraged Option Plan is 375,000.
Participation is limited to executive officers of the Company, of whom there are
currently 8. The Plan will be administered by the Compensation Committee.
An amount equal to 10% of each executive officer's nominal bonus calculated
under the EVA Incentive Plan will be used in a formula under the Leveraged
Option Plan to determine the number of shares subject to an option to be granted
under such plan. The remainder of the nominal bonus will be paid in cash. The
exercise price of each option will be equal to the relevant share price (defined
below) of the common stock underlying the option reduced by a percentage
(initially 10%). Both of these percentages have been determined and may be
changed by the Compensation Committee. The number of shares underlying each
option will be determined by dividing the formula amount by 10% of the relevant
share price. For purposes of the Leveraged Option Plan, the relevant share price
(fair market value) of a share of common stock will be equal to the average
price (as quoted on the American Stock Exchange) for such common stock for the
ten trading days at the end of the calendar year immediately preceding the grant
of such options.
The initial exercise price as described above of each option granted under
the Leveraged Option Plan will increase by 8 percent per year during the 10 year
option period. Such percentage has been determined by the Compensation
Committee.
The following table illustrates how the Leveraged Option Plan would work in
a hypothetical situation. In the hypothetical, an executive officer with a
nominal bonus under the Incentive Plan of $10,000, would have $1,000 used in the
formula for grant of an option under the Leveraged Option Plan. The relevant
share price of common stock is $8.00 per share. The 10% discount, $.80 per
share, would cause the option exercise price at date of grant to be equal to
$7.20 for the first year. That exercise price of $7.20 per share would then
increase
11
<PAGE> 14
by 8% for each year that the option remained outstanding. The option would be
exercised for 1,250 shares of common stock. All information in the table below
is entirely hypothetical, and is furnished solely for purposes of illustrating
how the Leveraged Option Plan would work.
- - An executive officer has a nominal bonus calculated at $10,000 under EVA(R)
Incentive Plan
- - The executive officer's option award percentage is 10%, hence he/she will
receive $9,000 and an option
- - The relevant share price is $8 and the option price per share is $0.80 (10% x
$8)
- - The exercise price grows at 8% a year
- - The exercise price will be $7.20 in year one; $7.78 in year two; $8.39 in year
three etc. for 10 years
- - The number of shares subject to the option is 1250 calculated as follows:
$1000 divided by $.80 option price per share
Options may be exercised in whole or in part, by paying the exercise price
in cash, or in shares of common stock previously acquired, or in a combination
of cash and such shares. The Leveraged Option Plan also would permit a "cashless
exercise" of options by selling all or part of the underlying shares of common
stock.
In the ordinary course, stock options granted under the Leveraged Option
Plan shall become exercisable on the third anniversary of the date of grant.
Each option shall have a term of ten years from date of grant.
Options granted under the Leveraged Option Plan are not transferable ,
except as permitted by applicable law. In the event of a reorganization, stock
split, merger or other change in corporate structure of the Company, the
Leveraged Option Plan provides for appropriate adjustments to be made (i) in the
number and kind of shares either reserved for issuance thereunder or already
covered by options granted thereunder; and (ii) in the exercise price of all
outstanding options.
Under the Leveraged Option Plan, (i) participants who terminate employment
voluntarily will receive in cash for all vested options an amount equal to the
lesser of the current value of such options or the amount of the EVA Incentive
Plan bonus applied to purchase options, but will forfeit all non-vested options;
(ii) participants who retire or become disabled will be able to exercise all of
their options in accordance with their terms; (iii) participants whose
employment is terminated with cause will forfeit all options; (iv) participants
whose employment is terminated without cause will receive in cash for all vested
options an amount equal to the current value of such options, but will forfeit
all non- vested options; and (v) participants who are employed on the date of a
change in control (as defined in the Leveraged Option Plan) will vest in all
their options, and will receive in cash the current value of those options.
As of March 27, 1996, the aggregate market value of the 375,000 shares
reserved for issuance under the Leveraged Option Plan was $2,343,750 , based on
the closing sale price of a share of common stock on such date as quoted on the
American Stock Exchange.
No options have been granted under the Leveraged Option Plan to date.
Assuming approval of the Leveraged Option Plan by the requisite vote of the
holders of common stock, the Plan will become effective as of March 4, 1996, and
will continue in effect until it expires on March 3, 2006. Options outstanding
under the Leveraged Option Plan at the expiration date of the Plan will continue
in effect until the expiration of their respective terms.
FEDERAL INCOME TAX CONSEQUENCES OF THE LEVERAGED OPTION PLAN
The following is a summary of the federal income tax consequences of
transactions under the Leveraged Option Plan. The discussion applies only to
certain transactions under the Internal Revenue Code of 1986, (the "Code"), and
concerns only exercises of stock options and dispositions of common shares
occurring during the lifetimes of executive officers. The consequences may
differ in the event an option is exercised, or common shares are disposed of,
following the death of an executive officer.
12
<PAGE> 15
The discussion which follows relates to the exercise of an option by an
executive officer of the Company at the time of such exercise, or to the sale of
common shares received on such exercise, and assumes that such officer will make
a proper written election with the Internal Revenue Service ("IRS") within
thirty days after such exercise to include in such his gross income, for his or
her tax year in which such exercise occurs, the excess of the fair market value
of such common shares at the time of exercise over the aggregate exercise price
for such common shares. (If such is not the case, the shares issued to an
executive officer of the Company would, as a result of the short-swing profit
rule under Section 16 (b) of the Exchange Act, be considered subject to a
substantial risk of forfeiture during the six-month period following the
exercise of such option, and such officer's gross income would be measured when
such substantial risk of forfeiture lapses at the end of such six-month period
and would be included in such officer's tax year in which such substantial risk
of forfeiture lapsed.)
An executive officer receiving a stock option under the Leveraged Option
Plan generally will not realize taxable income upon the grant of such option,
nor will the Company be entitled, for federal income tax purposes, to claim a
deduction at the time of such grant. The excess of the fair market value of such
common shares on the date such option is exercised over the exercise price of
such common shares will constitute compensation, taxable as ordinary income and
subject to all applicable withholding. If the Company complies with the
applicable federal withholding requirements, it will generally be entitled to a
deduction in computing its federal income taxes, in an amount equal to the
compensation taxable to the officer as ordinary income. Such deduction is
available in the year in which the income is taxable to the officer.
Upon the sale of any common shares acquired by the exercise of a Leveraged
Option, if the selling price exceeds the fair market value of such shares on the
date of exercise, the excess will be taxable as capital gain income (long-term
or short-term, depending on whether the executive officer has held such shares
for more than one year); no tax deduction will be allowed to the Company with
respect to such excess. Should the selling price of the common shares acquired
by option be less than their fair marked value on the date of exercise, the
difference will be treated as a capital loss to the executive officer (long-term
or short-term, depending on whether he has held such shares for more than on
year).
The previous paragraph assumes, for simplicity, that an executive officer
has paid the option price in cash. The federal income tax consequences to an
executive officer who exercises an option and uses common shares (in whole or in
part) to pay the option price will be different. In cases where an executive
officer uses common shares to pay the option price, the transaction will be
treated as (i) a tax-free exchange, between the common shares surrendered and an
equal number of common shares received under the exercised option; and (ii) an
acquisition, without consideration (or with such consideration as is provided in
the form of cash), of the remaining number of common shares received under the
exercised option. The common shares deemed to have been exchanged in the
above-described exercise will have the tax basis and holding period of the
common shares surrendered. However, the common shares deemed to have been
acquired for cash in the above-described exercise will have a tax basis equal to
their fair market value at date of such exercise, and a holding period
commencing on the date of such exercise. Capital gain or loss on the sale of
common shares will depend on whether such shares are deemed exchanged or deemed
acquired; such gain or loss will be measured, based on the difference between
the selling price and the applicable tax basis in such shares. The long-term or
short-term nature of such gain or loss will depend on the applicable holding
period for such shares.
VOTE NECESSARY FOR APPROVAL
The affirmative vote of the holders of a majority of the outstanding common
stock present in person or by proxy at the Annual Meeting is required to approve
the Leveraged Option Plan. The Board of Directors recommends that holders of
common stock vote FOR the Leveraged Option Plan. Proxies for common stock
solicited and received by the Board will be voted FOR the Leveraged Option Plan
unless stockholders specify a contrary choice in such proxies.
13
<PAGE> 16
ANNUAL REPORT
The Annual Report of the Company to the Shareholders for the fiscal year
ended December 31, 1995, including financial statements, which Annual Report is
not a part of this proxy solicitation material, either accompanies or has been
mailed to shareholders prior to the mailing of this proxy material.
On written request, the Company will provide without charge to each record
or beneficial holder of the Company's Common Stock as of March 29, 1996, a copy
of the Company's Annual Report on Form 10-K for the year ended December 31,
1995, as filed with the Securities and Exchange Commission. Requests may be
directed to Mr. John L. Rowley, Vice President -- Finance, C.H. Heist Corp., 810
North Belcher Road, Clearwater, Florida 34625.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the Company's 1997
Annual Meeting of Shareholders must be received by the Company at its principal
executive offices located at 810 North Belcher Road, Clearwater, Florida 34625
by the close of business on December 4, 1996, in order to be timely received for
inclusion in the Company's proxy statement and form of proxy for that meeting.
OTHER MATTERS
Under New York law and the Company's Certificate of Incorporation, broker
non votes and abstaining votes (i) will not be counted in favor of, or against,
election of any nominee for director or for or against the proposal to approve
the appointment of KPMG Peat Marwick as independent public accounts and (ii)
will have the effect of votes against the proposal to approve the Leveraged
Option Plan.
The Company is unaware of any matter, other than those mentioned above,
that will be brought before the meeting for action. If any other matters are
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment in respect to such matters.
It is important that your proxy be returned promptly no matter how small or
how large your holding may be. Shareholders who do not expect to attend in
person are urged to execute and return the enclosed form of proxy. Shares
represented by each proxy will be voted as directed, but if not otherwise
specified, will be voted for the election of the nominees for Directors, for the
ratification of the appointment of the independent accountants for the Company
for 1996 and for the Leveraged Stock Option Plan.
Dated: April 5, 1996 C.H. HEIST CORP.
14
<PAGE> 17
APPENDIX A
C.H. HEIST CORP.
LEVERAGED STOCK OPTION PLAN
ARTICLE I. PURPOSE. DEFINITIONS.
Section 1.1
The purpose of this Plan is to provide executive
officers of the Company an incentive to promote the maximization of
shareholder value over the long term. In order to help promote a
culture of ownership among the Company's executive officers and to
align management incentives with shareholder interests, incentive
compensation will be tied to Economic Value Added ("EVA") as
delineated in the C.H. Heist Corp. EVA Incentive Remuneration Plan
(the "EVA Plan"). This Plan will reward significantly the achievement
of increases in economic value, and penalize any decreases in economic
value, and will operate over a long-term horizon. The Plan also
provides a means through which the Company can attract and retain
executive officers of merit.
Section 1.2
For purposes of the Plan, the following terms are
defined as set forth below:
a. "Board" means the Board of Directors of the Company.
b. "Code" means the Internal Revenue Code of 1986, as amended,
and any successor thereto.
c. "Commission" means the Securities and Exchange Commission or
any successor agency.
d. "Committee" means the Committee referred to in Section 2.1.
e. "Company" means the C.H. Heist Corporation, a New York
corporation, or any successor entity.
f. "Disability" means permanent and total disability as
determined by the Committee for purposes of the Plan.
g. "Disinterested Person" shall have the meaning set forth in
Rule 16b-3(d)(3), as promulgated by the Commission under the
Exchange Act, or any successor definition adopted by the
Commission.
<PAGE> 18
h. "Early Retirement" means retirement, with the consent of the
Company, from active employment with the Company or a
subsidiary thereof, pursuant to the early retirement
provisions of the applicable pension plan of the Company or
such subsidiary.
i. "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor thereto.
j. "Fair Market Value of the Stock" means the average of the
reported closing sale prices of the Stock on the American
Stock Exchange during the ten days prior to the sale or
exchange of the Stock in question. In connection with
determining the initial exercise price of Stock Options
pursuant to grants hereunder, "Fair Market Value of the Stock"
means the average of the reported closing sale prices of the
Stock on the American Stock Exchange during the last ten
trading days of the year prior to the year in which the Option
is granted.
k. "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option within the meaning of Section
422 of the Code.
l. "Normal Retirement" means retirement from active employment
with the Company or a subsidiary thereof at or after age 65.
m. "Plan" means the C.H. Heist Corp. Leveraged Stock Option Plan,
as set forth herein and as amended.
n. "Retirement" means Normal or Early Retirement.
o. "Rule 16b-3" means Rule 16b-3, as promulgated by the
Commission under Section 16(b) of the Exchange Act.
p. "Stock" means the Common Stock, $.05 par value, of the Company.
q. "Stock Option" or "Option" means an option granted under
Article V of the Plan.
r. "Change-in-Control" and "Change-in-Control Price" have the
meanings set forth in Sections 6.2 and 6.3, respectively.
-2-
<PAGE> 19
ARTICLE II. ADMINISTRATION.
Section 2.1
The Plan shall be administered by the Compensation
Committee of the Board or such other Committee of the Board, composed
of not less than two (2) Disinterested Persons, who shall be appointed
by the Board and who shall serve at the pleasure of the Board.
Section 2.2
In particular, the Committee shall have the
authority, subject to the terms of the Plan, to:
(a) select the executive officers who will participate in the Plan;
(b) determine the terms and conditions of any Option granted
hereunder (including, but not limited to, the percentage
discount from Fair Market Value of the Stock which determines
the initial exercise price of an Option, the annual rate at
which the exercise price is increased, the time period in
which an Option vests, the term of the Option, the method of
exercise, any restriction or limitation and any vesting
acceleration or forfeiture or waiver regarding any Stock
Option and the shares of Stock relating thereto, based on such
factors as the Committee shall determine); and
(c) determine the circumstances under which a Stock Option may be
settled in cash or Stock.
Section 2.3
The Committee shall have the authority and discretion
to: adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it deems advisable; interpret the
terms and provisions of the Plan and Options granted under the Plan
(and any agreement or other document relating thereto) and; otherwise
supervise the administration of the Plan.
Section 2.4
The Committee may act only by a majority of its
members then in office. However, Committee members may in writing
authorize any one or more of their number, or any officer of the
Company, to execute and deliver documents on behalf of the Committee.
-3-
<PAGE> 20
Section 2.5
Any determination made by the Committee regarding the
terms or provisions of the Plan, or with respect to any Option granted
hereunder, shall be made in its sole discretion. All determinations
made by the Committee shall be final and binding on all persons,
including the Company and the Plan participants.
ARTICLE III. STOCK SUBJECT TO PLAN.
Section 3.1
The total number of shares of Stock reserved and
available for issuance pursuant to the exercise of Stock Options
granted under the Plan shall be 375,000 shares. Such shares may
consist, in whole or in part, of authorized and unissued shares or
treasury shares.
Section 3.2
If any shares of Stock that have been optioned cease
to be subject to a Stock Option, or if any Stock Option terminates
other than upon exercise, such shares shall again be available for
issuance in connection with grants under the Plan.
Section 3.3
In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split or other
change in corporate structure which affects the Stock, such
substitution or adjustments shall be made in the aggregate number of
shares reserved for issuance under the Plan, and in the number and
exercise price of shares subject to outstanding Stock Options granted
under the Plan, as may be determined to be appropriate by the Board,
in its sole discretion.
ARTICLE IV. ELIGIBILITY.
Section 4.1
Only those executive officers who are selected by the
Committee and participate in the EVA Plan are eligible to participate
in, and receive grants of Stock Options pursuant to the terms of, this
Plan.
-4-
<PAGE> 21
ARTICLE V. STOCK OPTIONS.
Section 5.1
Stock Options shall be granted in connection with
bonus awards under the EVA Plan. An executive officer who
participates in this Plan will receive a grant of Options hereunder
only if he receives a bonus under the EVA Plan. Generally, under the
EVA Plan if certain performance targets are achieved, then a bonus is
paid to the participants. Most participants receive 100% of the
bonus. Executive officers who participate in this Plan will receive a
percentage (currently 90%, but subject to change by the Committee) of
the cash bonus. The remaining portion (currently 10%, but subject to
change by the Committee) of the bonus is used in a formula in this
Plan to determine the number of shares subject to the Option that will
be granted to the participant hereunder as further provided in Section
5.3(c).
Section 5.2
All Stock Options shall be evidenced by option
agreements, the terms and provisions of which are determined by the
Committee. Each option agreement shall specify that it is an
agreement which provides for Non-Qualified Stock Options.
Section 5.3
Options granted under the Plan shall be subject to
the following terms and conditions, and such additional terms and
conditions as the Committee deems appropriate:
a. Exercise Price. The exercise price per share of Stock
purchasable under a Stock Option shall be equal to the Fair
Market Value of the Stock, reduced by the initial exercise
price percentage discount, increased annually by a fixed
percentage, initially 8% (but subject to change by the
Committee).
b. Initial Exercise Price Percentage Discount. The initial
exercise price percentage discount is a fixed percentage that
is used to reduce the initial exercise price to purchase Stock
pursuant to Options granted hereunder. The initial exercise
price percentage discount is 10% (but subject to change by the
Committee).
c. Number of Shares Covered by Option. The number of shares of
Stock subject to an Option granted to a participant hereunder
will equal the amount of the participant's bonus which is not
paid under the EVA
-5-
<PAGE> 22
Plan divided by the Initial Exercise Price Percentage Discount
times the Fair Market Value of the Stock. The amount of the
participant's unpaid bonus under the EVA Plan is not paid in
consideration for the Option; it is merely a figure utilized
in the formula to determine the number of shares covered by an
Option granted under the Plan.
d. Option Term. Each Stock Option shall be exercisable during
the ten (10) year period following the date such Option was
granted.
e. Vesting. Except as otherwise provided herein, all Options
granted under the Plan shall vest three years after the date
such Option was granted.
f. Exercisability. Vested Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as
the Committee shall determine.
g. Method of Exercise. Subject to the provisions of this Article
V, vested Stock Options may be exercised, in whole or in part,
at any time during the option term upon delivery of
irrevocable written notice of exercise to the Secretary of the
Company specifying the number of shares to be purchased and
whether payment of the exercise price is to be made pursuant
to clause (i) or (ii). Except as otherwise provided below,
such notice shall be accompanied by payment in full of the
purchase price by certified or bank check, or such other
instrument as the Company may accept. The Committee may, in
its sole discretion, allow payment in full or in part to be
made in the form of unrestricted Stock already owned by the
Optionee. The date on which such notice is received by the
Secretary shall be the date of exercise of the Option,
provided that: (i) full payment as hereinbefore provided
accompanies the notice or; (ii) within five business days of
the delivery of such notice, the funds to pay for the exercise
of the Option are delivered to the Company by a broker acting
on behalf of the Optionee either in connection with the sale
of the shares of Stock underlying the Option or in connection
with the making of a margin loan to the Optionee to enable
payment of the exercise price of the Option. In connection
with clause (ii) above, the Company will provide a copy of the
notice of the exercise to the aforesaid broker (which must be
identified by the Optionee in the notice of exercise) upon
receipt by the Secretary of such notice and will deliver to
such broker, within five business days of the delivery of such
notice to the Company, a certificate or certificates (as
requested by the broker) representing the number of shares of
Stock
-6-
<PAGE> 23
underlying the Option that have been sold by such broker for
the Optionee.
No shares of Stock shall be issued until full
payment therefor has been made. An Optionee shall have all of
the rights of a shareholder of the Company, including the
right to vote the Stock and the right to receive dividends
with respect to shares subject to the Stock Option, when the
Optionee has given written notice of exercise, has paid in
full for such Stock and, if requested, has given the
representation described in Section 9.1 hereof.
h. Non-Transferability of Options. No Stock Option shall be
transferable by the Optionee other than by will or by the laws
of descent and distribution, and all Stock Options shall be
exercisable, during the Optionee's lifetime, only by the
Optionee or by the guardian or legal representative of the
Optionee. For purposes of this provision, the terms "holder"
and "Optionee" shall include the guardian and legal
representative of the Optionee named in the option agreement,
together with any individual to whom an Option is transferred
by will or the laws of descent and distribution.
i. Cashing Out of Option. On receipt of written notice to
exercise, the Committee may elect to cash out all or part of
any Stock Option to be exercised by paying the Optionee an
amount, in cash or Stock, equal to the excess of the Fair
Market Value of the Stock over the exercise price (the "spread
value") on the effective date of such cash out. Cash outs
relating to Options held by Optionees who are actually or
potentially subject to Section 16(b) of the Exchange Act shall
comply with the "window period" provisions of Rule 16b-3, to
the extent applicable.
j. Termination by Death. If an Optionee's employment terminates
by reason of death, the spread value, as defined in Section
5.3(i), of any vested Stock Option held by such Optionee will
be paid in cash to said Optionee's estate or designated
beneficiary.
k. Termination by Reason of Disability or Retirement. If an
Optionee's employment terminates by reason of Disability or
Retirement, any vested Stock Option held by such Optionee may
thereafter be exercised by such Optionee in accordance with
its terms; however, if an Optionee dies after such Disability
or Retirement, any unexercised vested Stock Option held by
such Optionee shall be treated pursuant to Section 5.3(j)
above.
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<PAGE> 24
l. Other Termination. Unless otherwise determined by the
Committee, if an Optionee's employment terminates for any
reason other than Death, Disability or Retirement, the Stock
Options held by such Optionee, whether or not vested, shall
thereupon terminate. Notwithstanding the preceding sentence:
(i) an Optionee will receive in cash the spread value, as
defined in Section 5.3(i), of any such vested Stock Options
held by the Optionee if such Optionee is involuntarily
terminated by the Company or a subsidiary thereof without
cause; and (ii) if such Optionee voluntarily terminates his
employment, he will receive in cash the lesser of the spread
value of his vested options or the amount equal to the product
of (i) the number of shares of Stock subject to the Option and
(ii) the Initial Exercise Price Percentage Discount at the
time of the grant multiplied by the Fair Market Value of the
Stock at the time of such grant used to determine the initial
exercise price of the Option.
m. Change-in-Control. Notwithstanding the foregoing, upon a
Change-in-Control (as defined in Section 6.2), all Options
held by each Optionee shall immediately vest and the excess of
the Change-in-Control Price over the exercise price of each
Stock Option held by each Optionee shall be paid in cash to
said Optionee within 30 days of the date such
Change-in-Control is determined to have occurred.
ARTICLE VI. CHANGE-IN-CONTROL PROVISIONS.
Section 6.1
Impact of Event. Notwithstanding any other
provision of the Plan to the contrary, in the event of a
Change-in-Control (as defined in Section 6.2), any Stock
Options outstanding as of the date such Change-in-Control is
determined to have occurred, which have not then become
exercisable or vested, shall become fully exercisable and
vested.
Section 6.2
Definition of Change-in-Control. For
purposes of the Plan, a "Change-in-Control" shall mean an
event that, in the judgment of the Board and on the advice of
the Company's counsel, is required to be reported in response
to item 1 of Form 8-K or any successor form thereto
promulgated under the Exchange Act.
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<PAGE> 25
Section 6.3
Change-in-Control Price. For purposes of the
Plan, "Change-in-Control Price" means the highest price per
share paid or offered in any bona fide transaction (via tender
offer, merger or on a stock exchange or otherwise) related to
a Change-in-Control of the Company at any time during the
preceding 60-day period as determined by the Committee.
ARTICLE VII. AMENDMENTS AND TERMINATION.
Section 7.1
The Board by written resolution may amend, alter, or
discontinue the Plan, subject to shareholder approval as and where
required by law; however, no amendment, alteration or discontinuation
shall be made which would impair the rights of an Optionee under a
Stock Option theretofore granted without such Optionee's consent.
Subject to the above provisions, the Board shall have
the authority to amend the Plan to take into account changes in the
law and tax and accounting rules, as well as other developments.
ARTICLE VIII. UNFUNDED STATUS OF PLAN.
The Plan presently is an "unfunded" plan for
incentive and deferred compensation. However, the Committee may
authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver Stock or make payments,
so long as such trusts or other arrangements remain consistent with,
and do not alter, the Plan's "unfunded" status.
ARTICLE IX. GENERAL PROVISIONS.
Section 9.1
The Committee may require each individual purchasing
shares pursuant to a Stock Option to represent to the Company in
writing that such individual is acquiring the shares without a view to
the disposition thereof. The certificates for such shares may include
any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
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<PAGE> 26
Section 9.2
All certificates for shares of Stock or other
securities delivered under the Plan shall be subject to such stock
transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the
Commission, any stock exchange upon which the Stock is then listed,
and any applicable federal or state securities law, and the Committee
may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
Section 9.3
Nothing contained in this Plan shall prevent the
Company or any subsidiary thereof from adopting other or additional
compensation arrangements for its employees.
Section 9.4
The adoption of the Plan shall not confer upon any
employee any right to continued employment, nor shall it interfere in
any way with the right of the Company or any subsidiary thereof to
terminate the employment of any employee at any time.
Section 9.5
No later than the date as of which an amount first
becomes includable in the gross income of an Optionee (or other holder
of an Option, as applicable) by reason of the exercise or other
negotiation or disposition of an Option granted under the Plan, such
Optionee or other holder shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of, any
federal, state, local or foreign taxes of any kind required by law to
be withheld with respect to such gross income. In the sole discretion
of the Company, any and all such withholding obligations may be
settled with Stock, including the Stock which gives rise to the
withholding requirement. The obligations of the Company under the
Plan shall be conditioned on such payment or arrangements, and the
Company and its subsidiaries shall, to the extent permitted by law,
have the right to deduct and withhold any such taxes from any payment
or Stock otherwise due to be paid or transferred.
Section 9.6
At the time of grant, the Committee may provide in
connection with any grant made under this Plan that the shares of
Stock received as a result of such grant shall be subject to a right
of first refusal in favor of the Company, wherein such Optionee (or
such other holder) shall be
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<PAGE> 27
required to offer to the Company any Stock that such Optionee or other
holder wishes to sell at its then fair market value, subject to such
other terms and conditions as the Committee may specify at the time of
grant.
Section 9.7
The Committee shall establish such procedures as it
deems appropriate for an Optionee to designate a beneficiary to whom
any amounts or shares of Stock, payable or transferable in the event
of an Optionee's death, are to be paid or transferred.
ARTICLE X. NOTICE.
Any notice to be given pursuant to the provisions of
the Plan shall be in writing and directed to the appropriate recipient
thereof at his home address, business address or office location.
ARTICLE XI. EFFECTIVE DATE.
This Plan shall be effective as of March 4, 1996.
ARTICLE XII. APPLICABLE LAW.
This Plan shall be construed in accordance with the
provisions of the laws of the State of Florida.
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<PAGE> 28
APPENDIX B
PROXY C.H. HEIST CORP.
810 NORTH BELCHER ROAD
CLEARWATER, FLORIDA 34625
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints CHARLES H. HEIST and WILLARD F. FOSTER as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote as designated below, all of the common shares of
the C.H. HEIST CORP. held of record by the undersigned on March 29, 1996, at the
annual meeting of the shareholders to be held on May 10, 1996, or any
adjournment thereof.
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below (except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
NOMINEES: Charles H. Heist, Richard J. O'Neil, Willard F. Foster, Chauncey D.
Leake, Jr., Charles Scharlau and John L. Rowley.
(INSTRUCTION:To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
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2. PROPOSAL TO APPROVE THE APPOINTMENT OF KPMG PEAT MARWICK as the independent
public accountants for the corporation.
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO APPROVE THE LEVERAGED STOCK OPTION PLAN.
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED ON OTHER SIDE)
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR Proposals 1, 2 and 3.
Dated: , 1996
--------------------
--------------------------------
--------------------------------
Signature(s)
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by President or other
authorized officer. If a
partnership, please sign in
partnership named by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
