<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-9654
OHM CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 34-1503050
(State of Incorporation) (I.R.S. Employer Identification Number)
16406 U.S. ROUTE 224 EAST, FINDLAY, OH. 45840
(Address of principal executive offices) (Zip Code)
(419) 423-3529
(Registrant's telephone number, including area code)
Indicate by check whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days. Yes [X] No [ ]
The number of shares of Common Stock, par value $0.10 per share,
outstanding on July 31, 1996 was 26,830,218.
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OHM CORPORATION
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
PART I
FINANCIAL INFORMATION
Page
Number
------
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1996 (Unaudited)
and December 31, 1995.......................................................................... 1
Consolidated Statements of Income (Unaudited) for the Three and Six Months
Ended June 30, 1996 and 1995................................................................... 2
Consolidated Statements of Cash Flows (Unaudited) for the Six Months
Ended June 30, 1996 and 1995................................................................... 3
Notes to Consolidated Financial Statements (Unaudited)........................................... 4
Independent Accountants' Review Report........................................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............ 8
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.............................................. 11
Item 6. Exhibits and Reports on Form 8-K................................................................. 11
Signatures................................................................................................ 12
</TABLE>
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PART I -- FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
OHM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------- -----------
<S> <C> <C>
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents........................................................... $ 4,413 $ 11,205
Accounts receivable................................................................. 88,863 100,291
Costs and estimated earnings on contracts in process in excess of billings.......... 71,828 77,156
Materials and supply inventory, at cost............................................. 12,304 11,831
Receivable from affiliated company.................................................. -- 15,000
Prepaid expenses and other assets................................................... 7,174 7,621
Deferred income taxes............................................................... 15,526 16,600
Refundable income taxes............................................................. 352 401
-------- --------
200,460 240,105
-------- --------
Property and Equipment, net............................................................ 79,021 81,107
-------- --------
Other Noncurrent Assets:
Investments in affiliated company................................................... 23,487 23,038
Intangible assets relating to acquired businesses, net.............................. 34,029 21,613
Deferred debt issuance and financing costs.......................................... 1,644 1,779
Deferred income taxes............................................................... 1,337 1,440
Other assets........................................................................ 6,705 7,424
-------- --------
67,202 55,294
-------- --------
Total Assets.................................................................... $346,683 $376,506
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable.................................................................... $ 49,077 $ 65,233
Billings on contracts in process in excess of costs and estimated earnings.......... 562 1,387
Accrued compensation and related taxes.............................................. 7,590 6,174
Federal, state and local taxes...................................................... 23 200
Other accrued liabilities........................................................... 31,821 33,538
Current portion of noncurrent liabilities........................................... 4,174 4,417
-------- --------
93,247 110,949
-------- --------
Noncurrent Liabilities:
Long-term debt...................................................................... 87,097 104,111
Capital leases...................................................................... 45 53
Pension agreement................................................................... 884 901
-------- --------
88,026 105,065
-------- --------
Commitments and Contingencies
Shareholders' Equity:
Preferred stock, $10.00 par value, 2,000,000 shares
authorized; none issued and outstanding........................................... -- --
Common stock, $.10 par value, 50,000,000 shares authorized;
Shares issued: 1996 - 26,804,569; 1995 - 26,647,077............................. 2,680 2,664
Additional paid-in capital.......................................................... 137,622 136,428
Retained earnings................................................................... 25,108 21,400
-------- --------
165,410 160,492
-------- --------
Total Liabilities and Shareholders' Equity........................................ $346,683 $376,506
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
1
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OHM CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ----------------------
1996 1995 1996 1995
-------- -------- -------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenue....................................................... $129,177 $ 99,501 $248,140 $179,718
Cost of services .......................................... 111,617 83,357 215,550 150,664
-------- -------- -------- --------
Gross Profit.................................................. 17,560 16,144 32,590 29,054
Selling, general and administrative expenses............. 11,943 13,285 23,119 20,966
-------- -------- -------- --------
Operating Income.............................................. 5,617 2,859 9,471 8,088
-------- -------- -------- --------
Other (Income) Expenses:
Investment income.......................................... (4) (13) (15) (23)
Interest expense........................................... 1,970 2,832 3,878 6,071
Equity in net earnings of affiliate........................ (224) (198) (449) (281)
Miscellaneous expense, net................................. 314 7 543 39
-------- -------- -------- --------
2,056 2,628 3,957 5,806
-------- -------- -------- --------
Income Before Income Taxes (Benefit).......................... 3,561 231 5,514 2,282
Income taxes (benefit)..................................... 1,182 (3) 1,805 761
-------- -------- -------- --------
Net Income.................................................... $ 2,379 $ 234 $ 3,709 $ 1,521
======== ======== ======== ========
Net Income Per Share.......................................... $ 0.09 $ 0.01 $ 0.14 $ 0.08
======== ======== ======== ========
Weighted average number of common and
common equivalent shares outstanding....................... 26,830 20,593 26,757 18,135
======== ======== ======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
2
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OHM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1996 1995
--------- --------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income............................................................................. $ 3,709 $ 1,521
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization..................................................... 8,016 3,780
Amortization of other noncurrent assets........................................... 1,699 1,400
Deferred income taxes............................................................. 1,177 (239)
Loss/(gain) on sale of property and equipment..................................... 296 (22)
Equity in net earnings of affiliate............................................... (449) (281)
Deferred translation adjustments and other........................................ 49 59
Changes in current assets and liabilities:
Accounts receivable............................................................... 10,879 (10,905)
Costs and estimated earnings on contracts in process in excess of billings........ 475 7,209
Materials and supply inventory, at cost........................................... (473) (1,698)
Prepaid expenses and other assets................................................. 447 (48)
Refundable income taxes and other adjustments..................................... 49 68
Accounts payable.................................................................. (16,156) (14,161)
Billings on contracts in process in excess of costs and estimated earnings........ (825) 2,376
Accrued compensation and related taxes............................................ 550 (148)
Federal, state and local income taxes............................................. (177) 159
Other accrued liabilities......................................................... (5,222) (748)
-------- ---------
Net cash flows provided by/(used in) operating activities....................... 4,044 (11,678)
-------- ----------
Cash flows from investing activities:
Purchases of property and equipment............................................... (11,221) (7,148)
Proceeds from sale of property and equipment...................................... 2,075 872
Increase in other noncurrent assets............................................... (562) (1,144)
Decrease in receivable from related party......................................... 15,000 --
Cash acquired from purchase of business, net of acquisition cost.................. -- 13,527
-------- --------
Net cash provided by investing activities....................................... 5,292 6,107
-------- --------
Cash flows from financing activities:
Increase in long term debt........................................................ -- 1,945
Payments on long-term debt and capital leases..................................... (2,372) (1,646)
Proceeds from borrowing under revolving credit agreement.......................... 105,400 73,800
Payments on revolving credit agreement............................................ (120,300) (77,900)
Payments on pension agreement..................................................... (66) (55)
Common stock issued for 401k funding and stock options........................... 1,210 --
Proceeds from private placement of common stock................................... -- 10,000
Reissuance of treasury stock...................................................... -- 1,425
-------- --------
Net cash (used in)/provided by financing activities............................. (16,128) 7,569
-------- --------
Net (decrease)/increase in cash and cash equivalents............................ (6,792) 1,998
Cash and cash equivalents at beginning of period....................................... 11,205 4,930
-------- --------
Cash and cash equivalents at end of period............................................. $ 4,413 $ 6,928
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
3
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OHM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
by OHM Corporation (the "Company") and reflect all adjustments of a normal
recurring nature which are, in the opinion of management, necessary for a fair
presentation of financial results for the three and six months ended June 30,
1996 and 1995, in accordance with generally accepted accounting principles for
interim financial reporting and pursuant to Article 10 of Regulation S-X.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. These
interim consolidated financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended December 31, 1995. The
results of operations for the three and six months ended June 30, 1996 and 1995
are not necessarily indicative of the results for the full year.
The unaudited consolidated financial statements include the accounts of the
Company and its subsidiaries. The Company's 40% owned asbestos abatement
affiliate, NSC Corporation ("NSC"), has been accounted for using the equity
method. All material intercompany transactions and balances have been eliminated
in consolidation.
The consolidated financial statements at June 30, 1996, and for the three and
six months then ended, have been reviewed, prior to filing, by Ernst & Young
LLP, the Company's independent accountants, and their report is included herein.
NOTE 2 -- SUPPLEMENTARY CASH FLOW INFORMATION
Cash paid for interest was $4,222,000 and $5,952,000 and cash paid for income
taxes was $327,000 and $330,000 for the six months ended June 30, 1996 and 1995,
respectively.
NOTE 3 -- ACQUISITION
On May 30, 1995, the Company completed the acquisition of substantially all of
the assets and certain liabilities of the hazardous and nuclear waste
remediation service business (the "Division") of Rust International Inc.
("Rust") in exchange for 9,668,000 shares of the common stock of the Company, or
approximately 37% of the outstanding shares of the Company's common stock. Such
shares issued to Rust are subject to a number restrictions set forth in a
Standstill and Non-competition Agreement that was entered into pursuant to the
Agreement and Plan of Reorganization dated December 5, 1994, as amended (the
"Reorganization Agreement"), among the Company, Rust and certain of their
subsidiaries. In addition to the net assets of the Division, the Company
received $16,636,000 in cash pursuant to provisions of the Reorganization
Agreement that provided for an adjustment based on the average share price of
the Company's common stock for a 20 trading day period prior to closing. Also,
under terms of the Reorganization Agreement, as amended on March 22, 1996, the
Company received an additional $15,000,000 on March 25, 1996. For purposes of
calculating the consideration given by the Company for the Division, such 20
trading day average per share price of $11.25 was used, adjusted to reflect a
40% discount for the restricted nature of the common stock issued. Consideration
for the Division aggregated $65,259,000.
The acquisition of the Division has been accounted for using the purchase method
and, accordingly, the acquired assets and assumed liabilities, including
goodwill of $34,183,000, have been recorded at their estimated fair values as of
May 30, 1995. The acquired operations of the Division included contracts in
process for which the Company recognizes revenue using the percentage of
completion method of accounting. The valuation of the contracts in process
require estimates relating to the costs to complete certain large contracts in
process which require provisions for losses. The Company has estimated the fair
value of contracts acquired at amounts which will allow the Company to achieve
reasonable operating margins on the effort it expends to complete these
contracts. The Company's consolidated financial statements for the year ended
December 31, 1995, include the results of operations for the Division since May
30, 1995.
4
<PAGE> 7
The estimated fair value of the assets acquired and liabilities assumed at the
date of acquisition are as follows (in thousands):
<TABLE>
<S> <C>
Current assets.........................................................$59,805
Property and equipment..................................................21,523
Goodwill................................................................34,183
Current liabilities.....................................................50,252
</TABLE>
NOTE 4 -- INCOME TAXES
The reasons for differences between the provisions for income taxes and the
amount computed by applying the statutory federal income tax rate to income
before income taxes are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ------------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Federal statutory rate........................... 34.0 % 34.0 % 34.0 % 34.0 %
Add (deduct):
State income taxes, net of federal benefit.. 4.7 % 1.7 % 4.7 % 4.5 %
Equity in net earnings of affiliate......... (1.7)% (23.3)% (2.2)% (3.3)%
Other, net.................................. (3.8)% (13.7)% (3.8)% (1.9)%
---- ----- ---- ----
33.2 % (1.3)% 32.7 % 33.3 %
==== ===== ==== ====
</TABLE>
NOTE 5 -- SEASONALITY
The timing of revenue recognition is dependent on the Company's backlog,
contract awards and the performance requirements of each contract. The Company's
revenue are also affected by the timing of its clients' planned remediation work
which generally increases during the third and fourth quarters. Because of this
variability in demand, the Company's quarterly revenue can fluctuate, and
revenue for the first and second quarters of each year can normally be expected
to be lower than the third and fourth quarters. Although the Company believes
that the historical trend in quarterly revenue for the third and fourth quarters
of each year are generally higher than the first and second quarters, there can
be no assurance that this will occur in future periods. Accordingly, quarterly
or other interim results should not be considered indicative of results to be
expected for any quarter or for the full year.
NOTE 6 -- LITIGATION AND CONTINGENCIES
The Company's accounts receivable at June 30, 1996 include a claim receivable
aggregating approximately $26,438,000 in direct and other costs relating to a
major remediation project which was performed by the Company for Citgo Petroleum
Corporation ("Citgo") at its Lake Charles, Louisiana refinery during 1993 and
1994. This claim receivable represents direct and other costs to date for
activities which the Company's management believed exceeded the scope of the
existing contract due to deficient project specifications provided by Citgo and
Oxy USA, Inc. ("Oxy") as well as differing site conditions. In addition, at June
30, 1996, the Company has recorded in its financial statements approximately
$5,381,000 of accounts receivable that are in dispute for work performed under
the terms of the Company's base contract with Citgo. In April 1994, Citgo filed
an action in the U.S. District Court for the Western District of Louisiana
seeking a declaratory judgment that the Company is not entitled to additional
compensation under the contract and certain other relief. The Company's answer
to the declaratory judgment action was filed in July 1994, together with
counterclaims against Citgo for negligent misrepresentation, breach of contract
and quantum meruit seeking damages in excess of $35,000,000. In August 1994,
Citgo amended its complaint seeking damages under the contract for production
shortfalls, which Citgo has asserted in answer to the Company's interrogatories
to be approximately $27,600,000. The Company believes that such assertion of
damages is totally without merit since the contract expressly provides that
Citgo's sole remedy for production shortfalls by the Company is liquidated
damages not to exceed $500,000. In January 1995, Citgo filed a third party
complaint against Occidental Oil and Gas Corporation and Oxy in such litigation
because of their prior involvement with the Citgo site and preparation of the
contract specifications. Additionally, in July 1995, the Company also filed a
third party complaint against Oxy for negligent misrepresentation as a result of
its involvement with the development of sampling and analytical data relied upon
by the Company in preparation of its bid and cost estimates for work at the
site.
The Company has also become involved in litigation with Occidental Chemical
Corporation ("Occidental") relating to a separate project performed in 1993 and
1994 for Occidental. The Company's accounts receivable at June 30, 1996 include
a claim receivable of $8,562,000 in direct and other costs relating to this
project. The litigation arises from an October 1993
5
<PAGE> 8
contract between the Company and Occidental for work at a contaminated site in
North Tonawanda, New York. The Company's work was substantially delayed and its
costs of performance were substantially increased as a result of conditions at
the site which the Company's management believes were materially different than
as represented by Occidental. The Company believes that Occidental has
implicitly acknowledged the existence of differing conditions at the site
through its previous execution and partial payment of a change order relating to
the Company's position. In October 1994, Occidental issued a deductive change
order deleting substantially all remaining work from the contract. On December
30, 1994, while the Company was in the process of developing a comprehensive
request for equitable adjustment, Occidental filed suit against the Company in
U.S. District Court for the Western District of New York alleging damages in
excess of $50,000, the jurisdictional minimum. On March 3, 1995, Occidental
filed an amended complaint seeking $8,806,000 in damages primarily for alleged
costs incurred as a result of project delays and added volumes of incinerated
wastes. On April 6, 1995, the Company filed its answer and counterclaim denying
any liability to Occidental and seeking an amount in excess of $9,200,000 for
damages arising from Occidental's breach of contract, misrepresentation and
failure to pay outstanding contract amounts.
Management believes that it has established adequate reserves should the
resolution of the above accounts receivable be lower than the amounts recorded
and such resolution should not have a material adverse impact upon the Company's
consolidated results of future operations or financial condition.
The Company was named in April 1994 as one of 33 third party defendants in a
case titled UNITED STATES OF AMERICA V. AMERICAN CYANAMID COMPANY, INC., ET AL.,
pending in the United States District Court for the Southern District of West
Virginia (the "U.S. District Court"). This litigation (the "Cost Recovery
Litigation") arises out of claims made against several potentially responsible
parties ("PRPs") by the Environmental Protection Agency ("EPA") for amounts in
excess of $24,000,000 for response costs arising out of releases and threatened
releases of hazardous waste at the Fike Chemical, Inc. Superfund site ("Fike")
in Nitro, West Virginia (the "Site"). The Company was retained as a response
action contractor for the site under contracts with the United States Army Corps
of Engineers ("USACE") and the EPA. The third party complaint alleges that the
Company was an operator of the Site during the remediation and that the Company
caused releases or threatened releases of hazardous substances at the Site as a
result of allegedly negligent conduct, grossly negligent conduct or intentional
misconduct. The third party complaint seeks to recover clean-up costs from the
Company and the other third party defendants. The Company has submitted claims
for indemnification related to the lawsuit under its contract with the USACE and
the EPA, has notified its contractors pollution liability insurance carrier and
has impleaded the United States. Those PRP's also filed a suit in the U.S.
District Court against the Company on behalf of the United States under the QUI
TAM provisions of the False Claims Act (the "QUI TAM suit") and caused the
United States to conduct an investigation of the accuracy of the Company's
billings to the EPA. The Company cooperated fully with the investigation and has
been informed that the government will not be proceeding criminally against the
Company. The Company signed a Settlement Agreement, pursuant to which the
Company agreed to pay $589,000, disposing of any civil liability relating to the
QUI TAM suit and the government investigation with respect to Fike. The
Settlement Agreement has been approved by the U.S. District Court. The Company
also executed a Consent Decree settling the Cost Recovery Litigation without any
costs to the Company. The Consent Decree is subject to U.S. District Court
approval.
In addition to the above, the Company is subject to a number of claims and
lawsuits in the ordinary course of its business. In the opinion of management,
the outcome of these actions, which are not clearly determinable at the present
time, are either adequately covered by insurance, or if not insured, will not,
in the aggregate, have a material adverse impact upon the Company's consolidated
financial position or the results of future operations.
6
<PAGE> 9
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors and Shareholders
OHM Corporation
We have reviewed the accompanying consolidated balance sheet of OHM Corporation
and subsidiaries as of June 30, 1996, and the related consolidated statements of
income for the three and six month periods ended June 30, 1996 and 1995 and the
consolidated statements of cash flows for the six month periods ended June 30,
1996 and 1995. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of OHM Corporation and subsidiaries as
of December 31, 1995, and the related consolidated statements of operations,
changes in shareholders' equity, and cash flows for the year then ended, not
present herein, and in our report dated February 13, 1996, except for Notes 2
and 10, as to which the date is March 25, 1996, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying consolidated balance sheet as of
December 31, 1995, is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.
ERNST & YOUNG LLP
Columbus, Ohio
July 26, 1996
7
<PAGE> 10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The Company provides a broad range of environmental and hazardous waste
remediation services to its clients located primarily in the United States. The
timing of the Company's revenue is dependent on its backlog, contract awards and
the performance requirements of each contract. The Company's revenue is also
affected by the timing of its clients' planned remediation activities which
generally increase during the third and fourth quarters. Because of this change
in demand, the Company's quarterly revenue can fluctuate, and revenue for the
first and second quarters of each year have historically been lower than for the
third and fourth quarters, although there can be no assurance that this will
occur in future years. Accordingly, quarterly or other interim results should
not be considered indicative of results to be expected for any quarter or full
fiscal year.
On May 30, 1995, the Company completed the acquisition of substantially
all of the assets and certain liabilities of the hazardous and nuclear waste
remediation service business (the "Division") of Rust International Inc.
("Rust") in exchange for 9,668,000 shares of common stock of the Company, or
approximately 37% of the outstanding shares of the Company's common stock. In
exchange for a warrant to purchase up to 700,000 shares of the Company's common
stock at an exercise price of $15.00 per share during the five years following
the closing date, Rust's parent Company, WMX Technologies, Inc. ("WMX"),
provides the Company with a credit enhancement in the form of guarantees, issued
from time to time upon request of the Company, of up to $62,000,000 of the
Company's indebtedness, which will increase proportionately up to $75,000,000
upon issuance of shares under the warrant. The acquisition of the Division has
been accounted for using the purchase method and, accordingly, the acquired
assets and assumed liabilities, including goodwill, have been recorded at their
estimated fair values as of May 30, 1995. The Company's consolidated statements
of income include the results of the division since May 30, 1995.
The Company's consolidated statements of income for the three and six
months ended June 30, 1995, include expenses of $3,854,000 or $2,312,000
after-tax, for integration costs related to the acquisition of the Division. The
costs were recorded in selling, general and administrative expenses and were
primarily for severance and relocation costs for certain of the Company's
personnel and the closing of certain of the Company's offices as a result of
combining the operations of the Division and the Company.
RESULTS OF OPERATIONS
REVENUE. The following table sets forth the Company's revenue by client
type for the three and six months ended June 30, 1996 and 1995 (in thousands,
except percentages):
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
------------------------------- --------------------------------
1996 1995 1996 1995
------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Federal, State, and Local Government $ 96,802 75% $ 75,907 76% $187,374 76% $137,715 77%
Industrial 32,375 25% 23,594 24% 60,766 24% 42,003 23%
-------- --- -------- --- -------- --- --------- ---
Total Revenue $129,177 100% $ 99,501 100% $248,140 100% $179,718 100%
======== === ======== === ======== === ======== ===
</TABLE>
Revenue increased during the three and six months ended June 30, 1996
by $29,676,000 or 30% and $68,422,000 or 38%, respectively, when compared to the
same periods in 1995. Such improvement resulted primarily from increased revenue
from federal government agencies and the acquisition of the Division, of which
only one month's results were included in the Company's consolidated statements
of income during the three and six month periods in 1995.
Revenue from government agencies for the three and six months ended
June 30, 1996 increased $20,895,000 or 28% and $49,659,000 or 36%, respectively,
when compared to the same periods in 1995. This improvement resulted primarily
from an increase in revenue from the Company's term contracts with the United
States Navy, the United States Army Corps of Engineers ("USACE") and the United
States Air Force. Such increases were partially offset by a decrease in revenue
from state and local governments and the Environmental Protection Agency ("EPA")
during the 1996 when compared to the same periods in 1995. The federal
government shutdown during the first quarter of 1996 negatively impacted the
Company's revenue from the EPA and delayed delivery orders issued under the
Company's existing federal term contracts. The Company expects to receive
funding under its federal contracts into the foreseeable future and is
experiencing a significant amount of proposal activity for new contracts with
the various Department of Defense agencies, as well as the Department of Energy.
However, reductions by Congress in future environmental remediation budgets of
government agencies may have a material adverse impact upon future revenue from
such agencies and the funding of the Company's government term contracts
included in contract backlog.
8
<PAGE> 11
The Company experienced a $8,781,000 or 37% increase in revenue from
industrial clients for the three months ended June 30, 1996 when compared to the
same period in 1995. For the six months ended June 30, 1996, revenue from
industrial clients increased $18,763,000 or 45% when compared to the same period
in 1995. Such increases are primarily a result of the acquisition of the
Division during May 1995. The Company believes that revenue from the industrial
sector has been negatively impacted due to anticipated changes in the Superfund
law pending its reauthorization as well as current economic conditions in
certain industry and geographic sectors. Although the Company cannot predict the
impact upon the environmental industry of the failure of Congress to reauthorize
the Superfund law, further delays in Superfund reauthorization may have a
material impact upon the demand for the Company's services in the form of
project delays as clients and potential clients wait for and anticipate changes
in these regulations. In addition, demand for the Company's services from the
industrial sector will also remain dependant on general economic and market
conditions.
COST OF SERVICES AND GROSS PROFIT. Cost of services and gross profit
for the three and six months ended June 30, 1996 increased when compared to the
same periods in 1995 primarily as a result of increased revenue. Gross profit as
a percent of revenue for the three and six months ended June 30, 1996 decreased
to 14% and 13%, respectively, from 16% in each of the same periods in 1995. The
Company's gross profit on its fixed-price contracts has been negatively impacted
by competitive market conditions and, during the first quarter of 1996, by the
severe winter weather in the midwest and northeast regions of the country. In
addition, the Company has experienced a decrease in the overall gross margin it
has received on its government projects than it has historically experienced.
Such decrease is due to the nature of the projects that have been awarded to the
Company under its term contracts which has required an increase in the use of
subcontracted services and materials over levels historically experienced. Under
the terms of such contracts, the Company receives minimal markups on such
subcontracted services and materials.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SGA") expenses for the three and six months ended June 30, 1995
included a charge for integration expenses of $3,854,000 related to the
acquisition of the Division. Without such charge, SGA expenses would have
increased 26% and 35% during the three and six months ended June 30, 1996,
respectively, when compared to the same periods in 1995. Such increase in SGA
expenses was primarily as a result of the acquisition of the Division and
increased revenue. In addition, the Company has made a substantial investment in
personnel and systems in support of its government contracts and related
compliance issues. SGA expense as a percent of revenue, excluding the
aforementioned charge, was 9% and 10% for the three months ended June 30, 1996
and 1995, respectively. For the six months ended June 30, 1996 and 1995, SGA
expense as a percent of revenue was 9% and 10%, respectively, exclusive of the
intergration expense charge.
INTEREST EXPENSE. Interest expense decreased 30% and 36% during the
three and six months ended June 30, 1996 when compared to the same periods in
1995. The decrease in interest expense was a result of a decrease in the average
borrowings outstanding, as well as interest rates charged, under the Company's
revolving credit agreement during 1996 when compared to the same periods in
1995. The decrease in interest rates charged under the revolving credit
agreement is a result of the WMX guarantee of the Company's debt in exchange for
the warrant described above.
EQUITY IN NET EARNINGS OF AFFILIATE. The Company's equity interest in
NSC's net earnings increased $26,000 and $168,000 for the three and six months
ended June 30, 1996, respectively, when compared to the same periods in 1995.
NET INCOME. Net income for the three months ended June 30, 1996 was
$2,379,000 or $0.09 per share compared to $234,000 or $0.01 per share for the
same period in 1995. For the six months ended June 30, 1996, net income was
$3,709,000 or $0.14 per share compared to $1,521,000 or $0.08 per share for the
same period in 1995. Net income increased primarily as a result of the charge
for integration expenses recorded in the second quarter of 1995, as well as
other factors described above.
The effective income tax rate was 33% and (1)% for the three months
ended June 30, 1996 and 1995, respectively. For each six month period ending
June 30, 1996 and 1995, the effective income tax rate was 33%. See "Note 4 to
the Consolidated Financial Statements" for a reconciliation of the statutory
federal income tax rate to the effective income tax rate.
LIQUIDITY AND CAPITAL RESOURCES
On May 31, 1995, the Company entered into a $150,000,000 revolving
credit agreement with a group of banks (the "Bank Group") to provide letters of
credit and cash borrowings. The agreement has a five year term and is scheduled
to expire on May 30, 2000. WMX has issued a guarantee of up to $62,000,000
outstanding under the credit agreement in favor of the Bank Group. Under the
terms of the agreement the entire credit facility can be used for either cash
borrowings or letters of credit. Cash borrowings bear interest at either the
prime rate plus a percentage up to 0.625% or, at the Company's option, the
Eurodollar market rate plus a percentage ranging from 0.325% to 1.625%. The
percentage
9
<PAGE> 12
over the prime rate or the Eurodollar market rate is based on the aggregate
amount borrowed under the facility, the presence of the guarantee, and the
Company's financial performance as measured by an interest coverage ratio and a
total funded debt ratio. The agreement provides the participating banks with a
security interest in the Company's equipment, inventories, accounts receivable,
general intangibles and in the Company's investment in the common stock of NSC
as well as the Company's other subsidiaries. The agreement also imposes, among
other covenants, a minimum tangible net worth covenant, a restriction on all of
the Company's retained earnings including the declaration and payment of cash
dividends and a restriction on the ratio of total funded debt to earnings before
income taxes, depreciation and amortization. The amounts outstanding for cash
borrowing under the revolving credit facility at June 30, 1996 and December 31,
1995 were $27,200,000 and $42,100,000, respectively, and aggregate letters of
credit outstanding at June 30, 1996 and December 31, 1995 were $14,823,000 and
$14,655,000, respectively.
Capital expenditures for the six months ended June 30, 1996 and 1995,
were $11,221,000 and $7,148,000, respectively. The Company's capital
expenditures are primarily related to the installation of computer systems and
related equipment, the purchase of heavy equipment and the fabrication of custom
equipment by the Company for the execution of remediation projects. Capital
expenditures for fiscal year 1996 are expected to range between $15,000,000 and
$18,000,000. The Company's long-term capital expenditure requirements are
dependent upon the type and size of future remediation projects awarded to the
Company.
The Company believes that the government sector will continue to be its
primary source of revenue for the foreseeable future in light of its contract
backlog with federal government agencies. Revenue from government agencies
historically has required greater working capital, the major component of which
is accounts receivable, than revenue from industrial sector clients. In
addition, the Company is bidding on a number of large, long-term contract
opportunities which, if awarded to the Company, would also increase working
capital needs and capital expenditures. The Company believes it will be able to
finance its increased working capital needs and capital expenditures in the
short term through a combination of cash flows from operations, borrowing under
its revolving credit facility, proceeds from permitted asset sales and other
external sources. In addition, in connection with the acquisition of the
Division, Rust's parent company, WMX, has provided the Company with a credit
guarantee of up to $62,000,000 of the Company's indebtedness outstanding until
May 30, 2000. Such credit guarantee has allowed the Company to expand its
borrowing capacity and lower its cost of capital under its new credit facility
entered into on May 31, 1995.
The Company's identified long-term capital needs consist of payments
due upon the maturity of the Company's revolving credit facility in 2000 and
sinking fund payments commencing in 1996 of 7.5% of the principal amount as well
as payments due upon maturity of its 8% Subordinated Convertible Debentures in
2006. The Company purchased and retired $5,000,000 of the outstanding 8%
Subordinated Convertible Debentures during October 1995, sufficient to meet its
first annual sinking fund obligation due October 1, 1996. The Company believes
that it will be able to refinance the remaining indebtedness as necessary.
ENVIRONMENTAL MATTERS AND GOVERNMENT CONTRACTING
Although the Company believes that it generally benefits from increased
environmental regulations and from enforcement of those regulations, increased
regulation and enforcement also create significant risks for the Company. The
assessment, remediation, analysis, handling and management of hazardous
substances necessarily involve significant risks, including the possibility of
damages or injuries caused by the escape of hazardous materials into the
environment, and the possibility of fines, penalties or other regulatory action.
These risks include potentially large civil and criminal liabilities for
violations of environmental laws and regulations, and liabilities to customers
and to third parties for damages arising from performing services for clients,
which could have a material adverse effect on the Company.
The Company does not believe there are currently any material
environmental liabilities which should be recorded or disclosed in its financial
statements. The Company anticipates that its compliance with various laws and
regulations relating to the protection of the environment will not have a
material effect on its capital expenditures, future earnings or competitive
position.
Because of its dependence on government contracts, the Company also
faces the risks associated with such contracting, which could include civil and
criminal fines and penalties. As a result of its government contracting
business, the Company has been, is, and may in the future be subject to audits
and investigations by government agencies. The fines and penalties which could
result from noncompliance with the Company's government contracts or appropriate
standards and regulations, or the Company's suspension or debarment from future
government contracting, could have a material adverse effect on the Company's
business.
10
<PAGE> 13
PART II -- OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
a) The Annual Meeting of the Company's shareholders was held on
May 9, 1996. At the Annual Meeting, the following persons were
elected as directors of the Company, to serve until the next
Annual Meeting of Shareholders, with the votes for and
withheld with respect to each person, respectively, set forth
after such name:
<TABLE>
<CAPTION>
For Withheld
<S> <C> <C>
Victor J. Barnhart 25,751,170 414,996
Herbert A. Getz 25,760,949 405,217
Ivan W. Gorr 25,779,188 386,978
Charles D. Hollister 25,776,698 389,468
James L. Kirk 25,774,445 391,721
Joseph R. Kirk 25,773,792 392,374
James E. Koenig 25,768,236 397,930
Richard W. Pogue 25,774,350 391,816
Charles W. Schmidt 25,776,492 389,674
</TABLE>
(b) A proposal to increase the number of shares available under
the Company's 1986 Stock Option Plan was approved by 89.8% of
the Company's Common Stock present and voting at the meeting.
The results of the vote on the proposal were:
<TABLE>
<S> <C>
For 23,498,305
Against 2,574,867
Abstain 92,994
</TABLE>
The total number of shares of the Registrant's Common Stock
outstanding as of March 19, 1996, the record date for the
Annual Meeting, was 26,718,097.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.33* OHM Corporation Retirement and Incentive Compensation
Plan
10.34* OHM Corporation Incentive Stock Plan
11 Statement Re Computation of Per Share Earnings
15 Letter Re Unaudited Financial Information
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
June 30, 1996.
- --------------------------------------------------------------------------------
*Indicates a management contract or compensatory plan or arrangement required to
filed pursuant to Item 6 of Form 10Q.
11
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OHM CORPORATION
Date: August 14, 1996 By /s/ James L. Kirk
----------------------------------------
James L. Kirk
Chairman of the Board
President and Chief Executive Officer
(Duly Authorized Officer)
Date: August 14, 1996 By /s/ Kris E. Hansel
----------------------------------------
Kris E. Hansel
Vice President and Controller
(Principal Accounting Officer)
12
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Exhibit
Number Description
- ------ -----------
<S> <C>
10.33 Retirement and Incentive Compensation Plan
10.34 Incentive Stock Plan
11 Statement Re Computation of Per Share Earnings
15 Letter Re Unaudited Financial Information
27 Financial Data Schedule
</TABLE>
<PAGE> 1
OHM CORPORATION
RETIREMENT AND INCENTIVE COMPENSATION PLAN
<PAGE> 2
OHM CORPORATION
RETIREMENT AND INCENTIVE COMPENSATION PLAN
(Amended and Restated as of August 15, 1996)
PURPOSE AND EFFECTIVE DATE
The OHM Corporation (the "Company") Retirement and Incentive
Compensation Plan (the "Plan"), is intended to be a nonqualified deferred
compensation plan exempt from the provisions of the Employee Retirement Income
Security Act of 1974, as amended. This Plan is an amendment and restatement of
the Company's Executive Retirement Plan adopted effective as of January 1, 1996.
The purpose of the Plan is to provide a mechanism to allow officers and other
key employees of the Company to defer compensation and thereby accumulate funds
for retirement, and to retain such individuals, make their compensation
competitive with other opportunities, and cause them to strive to increase the
Company's cumulative returns to its shareholders.
ARTICLE I
PARTICIPATION
1.1 ELIGIBILITY
Participation in the Plan is limited to the Company's officers
designated as Participants by the Company's Compensation and Stock Option
Committee of the Board of Directors (the "Compensation Committee) and other key
employees who are not officers of the Company as may be designated from time to
time by the Compensation Committee under the Plan. In designating an officer or
other key employee as a Participant in the Plan, the Compensation Committee may
limit an individual's participation in the Plan to either the Retirement
Deferral Account or the OHM Common Stock Deferral Account (as such terms are
defined Section 2.3 hereof).
1.2 CONDITIONS OF PARTICIPATION
An eligible employee may participate in the Plan after the employee has
completed and returned to the Administrative Committee a "Deferral Election
Form" (as described in Section 2.1), and any other information or documents that
the Administrative Committee deems necessary to administer the Plan.
ARTICLE II
DEFERRAL OF COMPENSATION
2.1 DEFERRAL AMOUNTS; DEFERRAL LIMITATIONS
As a condition of participation, each Participant must complete and
return to the Administrative Committee a Deferral Election Form in which the
Participant specifies the portion of the Participant's Compensation (as defined
below) that is to be deferred under the Plan during the following calendar year
(the "Plan Year"). A Participant may defer in any Plan Year up to
50% of the Participant's Compensation, provided that a Participant shall not
defer more than 30% of the Participant's Compensation in any Plan Year to the
Participant's "Retirement Deferral Account" (as described in Section 2.3). The
Deferral Election Form shall be delivered to the Administrative Committee prior
to the beginning of each Plan Year. If an officer or key employee first becomes
eligible to participate during the
<PAGE> 3
2
Plan Year, the Participant may file a Deferral Election Form within thirty (30)
days of becoming eligible to participate in the Plan. Amounts deferred under the
Plan will be credited to the Participant's designated Deferral Account (as
described in Section 2.3) no later than the first day of the calendar month
following the calendar month during which the amount deferred otherwise would
have been paid to the Participant. The term "Compensation" means base salary and
annual or other cash compensation earned by a Participant within a Plan Year,
excluding contributions to or amounts paid to the Participant pursuant to this
Plan or any other employee benefit plan or stock option or restricted stock
plan, except deferred Compensation or any other contributions made by the
Company on behalf of the Participant pursuant to the Plan.
2.2 MATCHING CONTRIBUTIONS; VESTING
The Participant's designated Deferral Account shall be credited with
Company "Matching Contributions" each month in an amount equal to (i) fifty
percent (50%) of the amount of the Participant's Compensation which is deferred
by the Participant and credited to the Participant's Retirement Deferral
Account; and (ii) one hundred percent (100%) of the amount of the Participant's
Compensation which is deferred by the Participant and credited to the
Participant's "OHM Common Stock Deferral Account". The Compensation Committee
may reduce or eliminate the amount of Company Matching Contributions under the
Plan for any Plan Year, provided that any such reduction is made prior to the
beginning of such Plan Year.
Participants shall be vested in Matching Contributions (i) one year
after the amounts are credited to the Participant's Retirement Deferral Account;
or (ii) two years after the amounts are credited to the Participant's OHM Common
Stock Deferral Account; provided that a Participant shall be fully vested in
Matching Contributions and any Interest (as defined in Section 2.4) or Dividends
(as defined in Section 2.4) thereon upon attaining Early or Normal Retirement
(as defined in Section 3.2), upon the Participant's death or Disability (as
defined in Section 3.2) or in the event of a Change in Control (as defined in
Section 5.6). If the Participant terminates employment prior to the vesting of
any Matching Contributions, such non-vested amounts and any Interest or
Dividends with respect to the Matching Contributions shall be forfeited.
2.3 DEFERRAL ACCOUNTS
The Company will establish a "Retirement Deferral Account" and an "OHM
Common Stock Deferral Account" for each Participant (sometimes individually
referred to as a "Deferral Account" and collectively as "Deferral Accounts").
Each Participant's Deferral Accounts will be credited with:
(a) Compensation that the Participant elects to defer under
Section 2.1;
(b) Company Matching Contributions credited under Section 2.2;
(c) "Interest" calculated and credited under Section 2.4(a); and
(d) "Dividends" calculated and credited under Section 2.4(b).
<PAGE> 4
3
Each Participant's Deferral Accounts will be debited by:
(a) Amounts distributed under Article III.
The Participant shall designate, prior to the beginning of each Plan
Year, the amounts and percentages to be contributed to the Participant's
Retirement Deferral Account and OHM Common Stock Deferral Account. A
Participant's Deferral Accounts may be segregated into one or more sub-accounts
as may be deemed necessary by the Administrative Committee to administer the
Plan.
2.4 DEEMED INVESTMENT
(a) RETIREMENT DEFERRAL ACCOUNT. As of the first day of each calendar
month, a Participant's Retirement Deferral Account shall be credited with
"Interest" at the rate equal to the prime rate (as published by The Wall Street
Journal-Midwest Edition on the first business day of the month), and such
Interest shall be compounded monthly on the balance credited to the
Participant's Retirement Deferral Account as of the first business day of that
month. As of the first day of each Plan Year, the balance of each Participant's
Retirement Deferral Account as of such date will be credited with additional
"Interest" in the amount by which the percent of net increase in the Standard
and Poor's 500 Index (calculated from the first business day of the Plan Year to
the last business day of the Plan Year (or the business day preceding the date
of distribution in the event of a distribution prior to the end of a Plan Year),
as published by The Wall Street Journal-Midwest Edition as of such dates)
exceeds the Interest credited during the Plan Year to the Participant's
Retirement Deferral Account in accordance with the preceding sentence.
(b) OHM COMMON STOCK DEFERRAL ACCOUNT. As of the first day of each
calendar month, each Participant's OHM Common Stock Deferral Account shall be
credited in Units (as defined below) on the basis of the average of the Market
Value (as defined below) of the Company's Common Stock (as defined below) during
the preceding calendar month. Each Participant's OHM Common Stock Deferral
Account shall be credited after the end of each calendar quarter with additional
Units equal in value to the amount of dividends or other distributions
("Dividends") paid by the Company during such calendar quarter on the Common
Stock equivalent to the average daily balance of Units in such OHM Common Stock
Deferral Account during such calendar quarter. The Units allocated from time to
time to the Participant's OHM Common Stock Deferral Account shall reflect any
subsequent appreciation or depreciation in the Company's Common Stock based
upon the average of the Market Value of the Common Stock during the preceding
month.
The term "Market Value" means the closing price of the Common Stock on
the New York Stock Exchange on the specified date (or, if Common Stock was not
traded on such date, on the next preceding date on which it was traded) as
reported in The Wall Street Journal -Midwest Edition. The term "Common Stock"
means the Company's common stock, par value $.10 per share, or such other
security as may at the applicable time be represented by the Units. The term
"Units" means an accounting unit equal in value to one share of Common Stock.
2.5 TRANSFER OF DEFERRAL ACCOUNT. Upon a Participant becoming vested in the
Company's Matching Contribution made with respect to the Participant's
Retirement Deferral Account, during the Plan Year (but not more than once each
calendar quarter), a Participant may transfer all or any portion of the balance
of the Participant's Retirement
<PAGE> 5
4
Deferral Account to the Participant's OHM Common Stock Deferral Account. Upon a
Participant becoming vested in the Company's Matching Contribution made with
respect to the Participant's OHM Common Stock Deferral Account, during the Plan
Year (but not more than once each calendar quarter), a Participant may transfer
all or any portion of the balance of the Participant's OHM Common Stock Deferral
Account representing the amount of the Participant's deferred Compensation (but
excluding the Company Matching Contribution and dividends and distributions
thereon) to the Participant's Retirement Deferral Account.
ARTICLE III
DISTRIBUTIONS
3.1 FORMS OF DISTRIBUTION
Subject to other provisions of this Article and Section 5.6, all
distributions will be made in cash by the Company at the time and in the manner
elected by the Participant, subject to such uniform procedures and rules as
established by the Administrative Committee from time to time. All payments from
a Participant's Deferral Accounts shall reduce allocation to the Participant's
Retirement Deferral Account and OHM Common Stock Deferral Account equally,
unless otherwise specified by the Participant in accordance with procedures
established by the Administrative Committee.
3.2 METHODS OF DISTRIBUTION
Plan benefits will be paid in a lump sum of the entire amount then
credited to the Participant's Deferral Accounts, unless the Participant's
termination is a result of retirement on or after the date the Participant
attains the age of 65 ("Normal Retirement") or upon the Participant reaching age
55 with ten years or more of service ("Early Retirement") with the Company or
its Subsidiaries (as defined below), or in the event the Participant dies or
becomes "Disabled" (as defined below). Any amount distributed from a
Participant's Deferral Accounts in a lump sum shall be credited with Interest or
Dividends through the last day of the month preceding the month in which the
distribution is made. In the case of Early or Normal Retirement, death or
Disability, one or both of the Participant's Deferral Accounts will be paid in a
lump sum, or in substantially equal annual payments over a period not greater
than 15 years beginning on the one year anniversary of the Participant's
retirement, as elected by the Participant. If benefits under the Retirement
Deferral Account are to be paid annually, Interest will continue to be credited
on the unpaid balance of the Participant's Retirement Deferral Account at the
rate specified in Section 2.4, or at such lesser rate as may be specified by the
Compensation Committee in its sole discretion at any time prior to the
Participant's retirement. A distribution of Participant's OHM Common Stock
Deferral Account shall be based upon the average Market Value of the Company's
Common Stock during the month preceding the date of distribution and, if
benefits are to be paid annually from the OHM Common Stock Deferral Account,
Dividends will be credited on the unpaid balance of Participant's OHM Common
Stock Deferral Account.
A Participant shall be deemed to be "Disabled" or subject to a
"Disability" if he or she is unable to perform the normal duties of his or her
employment by reason of a medically determinable physical or mental impairment
which in the opinion of a physician acceptable to the Administrative Committee
can be expected to result in death or to be of a long-continual or indefinite
duration.
<PAGE> 6
5
The term "Subsidiary" means any corporation in which at the time the
Company owns or controls, directly or indirectly, not less than 50% of the total
combined voting power represented by all classes of shares owned by such
corporation.
3.3 TIME OF DISTRIBUTION
Plan benefits will be paid one year after the Participant's termination
of employment with the Company or any Subsidiary thereof, unless the Participant
is terminating employment as a result of Early, Normal Retirement, death or
Disability, or as otherwise approved by the Compensation Committee in its sole
discretion.
The Participant's election of the form of payment shall be made by
written notice filed with the Committee at least one year prior to the
Participant's termination of employment with, or retirement from, the Company
and any Subsidiary thereof. Any such election may be changed by the Participant
at any time and from time to time without the consent of any other person by
filing a later signed written election with the Administrative Committee;
provided that any election made less than one year prior to the Participant's
termination of employment or retirement shall not be valid, and in such case
payment shall be made in accordance with the Participant's prior election.
Notwithstanding any other provision of this Article III, in the event
of a Participant's Early or Normal Retirement, death or Disability, a
Participant may elect to receive a distribution of part or all of his or her
Deferral Accounts in one or more distributions if the amount in such Deferral
Accounts subject to such distribution is reduced by ten percent. Any
distribution made pursuant to such an election shall be made within sixty days
from the date such election is submitted to the Administrative Committee. The
portion of the electing Participant's Deferral Accounts subject to such
reduction shall be forfeited.
3.4 DISTRIBUTIONS TO BENEFICIARIES
If a Participant's Deferral Accounts have not been fully distributed at
the time of the Participant's death, the unpaid balance will be paid to the
Participant's Beneficiary (as defined below) at the time the amount would have
been paid to the Participant. However, the Compensation Committee, in its sole
discretion, may direct such benefits be paid at an earlier date. The term
"Beneficiary" means the person(s) named by the Participant to receive any Plan
benefits that are unpaid at the Participant's death. Unless changed, the
Participant's Beneficiary will be the person named on the first Deferral
Election Form that the Participant files. However, a Participant may change the
Beneficiary designation at any time by completing and delivering to the
Administrative Committee a subsequent Beneficiary designation form. If the
Participant dies without naming a Beneficiary or if there is no Beneficiary that
survives the Participant, any unpaid Plan benefits will be paid to the
Participant's surviving spouse or, if there is no surviving spouse, to the
Participant's surviving children in equal shares or, if there are no surviving
children, to the Participant's estate.
3.5 WITHHOLDING; PAYROLL TAXES
Each benefit payment will be reduced by any amount required under
applicable law to be withheld in advance payment of the recipient's income or
other taxes. If the Company is required to withhold any
<PAGE> 7
6
current taxes on Compensation when it is deferred under the Plan, the deduction
will be taken against compensation paid by the Company to the Participant that
is not deferred under this Plan. The determination by the Company of the amount
to be withheld is binding on the Participant and the Beneficiary.
3.6 NONCOMPETITION
Notwithstanding any other provision of this Plan, if, within one year
after terminating employment with the Company, a Participant is engaged in any
Competitive Activity (as defined below) without the prior consent of the
Company, all Matching Contributions, Interest and Dividends credited thereon
will be forfeited. For purposes of the Plan, the term "Competitive Activity"
means the Participant's employment or the Participant's engagement, directly or
indirectly, whether as an officer, employee, agent, consultant, partner,
financier, or otherwise, in any business activity in competition with any
business activity of the Company or its affiliates or subsidiaries in any
geographic area in which the Participant provided or attempted to provide any
products or services for the Company. "Competitive Activity" shall not include
the mere ownership of not more than 2% of the securities in any such
publicly-traded enterprise. If requested by the Participant, the Compensation
Committee shall inform the Participant in advance whether any prospective
employment or engagement shall constitute "Competitive Activity."
3.7 MISCONDUCT
Notwithstanding any other provision of this Plan, the Compensation
Committee may direct that a Participant forfeit the balance of all Matching
Contributions, Interest and Dividends and direct that a Participant's Deferral
Accounts not be credited with Matching Contributions, Interest or Dividends
after the Compensation Committee concludes that any Participant has engaged in
or is engaging in (i) any intentional or willful conduct that is detrimental to
the Company's best interests, (ii) any conduct involving dishonesty or moral
turpitude that is detrimental to or causes any financial loss to the Company,
(iii) the malicious destruction of any Company property, (iv) is convicted of a
felony committed during and arising out of the Participant's employment with the
Company.
ARTICLE IV
ADMINISTRATION
4.1 APPOINTMENT OF ADMINISTRATIVE COMMITTEE
The Administrative Committee to administer the Plan shall consist of
the Company's Chief Operating Officer, Chief Administrative Officer and General
Counsel. The members of the Administrative Committee shall serve at the
Compensation Committee's pleasure and may be removed or may resign at any time.
Successor members of the Administrative Committee shall be appointed by the
Compensation Committee and shall have all of the rights, powers, privileges and
immunities given to the original members. Except as required by law, the members
of the Administrative Committee will not be required to give any bond or other
security for the faithful performance of their duties.
4.2 COMMITTEE PROCEDURES
<PAGE> 8
7
The Compensation Committee will be principally responsible for
establishing Plan policy and resolving inconsistencies in the Plan or its
administration and establishing rules and procedures not included in this
document. The Compensation Committee may delegate to the Administrative
Committee the power to establish any rules and procedures consistent with the
provisions of the Plan. In addition, the Committee may, from time to time,
employ other agents and delegate to them such administrative duties as it sees
fit, and may from time to time consult with counsel who may be counsel to the
Company. The Administrative Committee shall be entitled to rely conclusively
upon all tables, valuations, certificates, opinions, and reports furnished by
any actuary, accountant, controller, counsel or other person employed or engaged
by the Compensation Committee or Administrative Committee. The Administrative
Committee will be principally responsible for implementing the Compensation
Committee's decisions. All determinations made under this Plan by the
Compensation Committee and the Administrative Committee may be made in their
sole and absolute discretion. Any disputed matter arising under this Plan will
be resolved by the Compensation Committee. All Compensation Committee decisions
will be final and binding on all persons. The Compensation Committee may act at
a meeting or by written resolution signed by a majority of Compensation
Committee members.
4.3 CLAIMS PROCEDURE
(a) If a Participant or other person believes that he is entitled to
benefits under the Plan, the Participant may file a claim for benefits in
writing with the Administrative Committee. If a claim for benefits is wholly or
partially denied, the Administrative Committee shall give the claimant written
notice of the denial within a reasonable period of time after receipt of the
claim by the Administrative Committee. Such notice shall set forth:
(i) the specific reason or reasons for the denial,
(ii) specific reference to pertinent provisions of the
Plan on which the denial is based,
(iii) a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary, and
(iv) an explanation of the claim review procedure.
(b) A claimant whose claim is denied, or his duly authorized
representative, may request a review upon written application to the
Compensation Committee within 60 days after receiving notice of the denial. In
connection with such request, the claimant or his authorized representative may
review pertinent documents and may submit issues and comments in writing. If
such a request is made, the Compensation Committee shall make a full and fair
review of the denial of the claim and shall make a decision not later than 60
days after receipt of the application, unless special circumstances (such as the
need to hold a hearing) require an extension of time for processing, in which
case a decision shall be rendered as soon as possible, but not later than 120
days after receipt of the request. The decision on review shall be in writing
and shall include specific reasons for the decision and specific references to
the pertinent provisions of the Plan on which the decision is based.
4.4 LEGAL COMPETENCY
<PAGE> 9
8
Any Plan benefits payable to any person who is legally incompetent to
receive them will be paid to the guardian of the incompetent person or to the
person having custody of the disabled person without any further liability by
the Company, the Compensation Committee or the Administrative Committee.
<PAGE> 10
9
4.5 EXEMPTION FROM LIABILITY/INDEMNIFICATION
In addition to any other rights to which they may be entitled under the
Plan, the Company will indemnify each member of the Compensation Committee, the
Administrative Committee, and any other Company officer, employee or director
against any loss, damage, expense or liability, by insurance or otherwise,
reasonably incurred by the individual in connection with any action or failure
to act by reason of serving on the Compensation Committee, acting as a member of
the Administrative Committee or acting pursuant to their direction, to the
fullest extent permitted by law.
4.6 NONALIENATION OF BENEFITS
Except as otherwise provided by law, no benefit, payment or
distribution under this Plan is subject either to the claim of any creditor of a
Participant or Beneficiary, or to attachment, garnishment, levy, execution or
other legal or equitable process, by any creditor of the Participant or
Beneficiary and no Participant or Beneficiary may alienate, commute, anticipate
or assign (either at law or in equity) all or any portion of any benefit,
payment or distribution under this Plan. The Plan will not in any manner be
liable for or subject to the debts, contracts, liabilities, engagements or torts
of any person entitled to receive benefit under this Plan. If any Plan benefits
or assets are garnished or attached by order of any court, the Administrative
Committee may elect to bring an action for a declaratory judgment in a court of
competent jurisdiction to determine the proper person to receive Plan benefits.
Any benefits that become payable during the pendency of that action will be paid
into the court as they become payable to be distributed by the court as it deems
proper.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 APPLICATION OF RULE 16B-3
Transactions under the Plan are intended to be governed by Rule 16b-3
as promulgated on May 31, 1996 under the Securities Exchange Act of 1934.
5.2 EMPLOYMENT AND OTHER RIGHTS
Nothing in this Plan requires that the Company to employ any
Participant or requires any Participant to remain employed with the Company. Nor
does the Plan create any rights or obligations other than those specifically set
forth in the Plan. The benefits payable under this Plan are independent of, and
in addition to, any other employment agreement that may exist from time to time
concerning any other compensation or benefits payable by the Company.
<PAGE> 11
10
5.3 RIGHT TO BENEFITS
The sole interest of each Participant and each Beneficiary is limited
to receiving the amounts credited to the Participant's Deferral Accounts when
these amounts become due and payable under the terms of the Plan and the
Participant's election. Neither the Participant nor a Beneficiary has any right,
title or interest (legal or equitable) in or to any property or assets of the
Company. Although a Participant's Deferral Accounts may be deemed invested in
Common Stock, the Company will not issue any shares or make any investment on
behalf of a Participant. All Plan benefits will be paid directly by the Company
from its general assets and reflected on the Company's books as a general
unsecured and unfunded obligation, provided that the Company may elect from time
to time in its sole discretion to fund all or any portion of the Participants'
Deferral Accounts by establishing and funding a trust and appointing a trustee
to administer the assets in the trust.
5.4 OFFSET TO BENEFITS
Regardless of any Plan provision to the contrary, the Company may, if
the Compensation Committee in its sole and absolute discretion agrees, offset
any amounts to be paid to a Participant or a Beneficiary under the Plan against
any amounts that the Participant owes to the Company.
5.5 AMENDMENT AND TERMINATION
Although the Company intends to continue this Plan indefinitely, the
Board may amend, suspend or terminate the Plan at any time (including the amount
and manner in which Matching Contributions and the rate or calculation of
Interest are credited to any Participant's Deferral Accounts). However, no Plan
amendment, suspension or termination may adversely affect amounts deferred by
the Participant to the Plan (other than the amount of Matching Contributions and
the rate or calculation of Interest to be credited after the effective date of
such action). If it is determined at any time for any reason by any agency of
the United States government or by any court of competent jurisdiction that the
Plan does not qualify for the exclusions under Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA, the Plan will be deemed to have terminated as of the date of
the determination unless otherwise provided by the Compensation Committee.
5.6 CHANGE IN CONTROL OF THE COMPANY
In the event of a Change in Control of the Company (as defined below),
(i) all Matching Contributions, Interest and Dividends thereon shall immediately
and fully vest, (ii) the Compensation Committee shall cause the Deferral
Accounts payable to Participants to be calculated and paid to Participants as
promptly as practicable following the Compensation Committee's determinations,
notwithstanding any Plan provisions to the contrary. Payment of the
Participant's benefit shall be made by the Company in the event of a Change in
Control, or if the Company is not the survivor of such Change in Control, the
person acquiring the Company. The amount payable by the Company or the acquiror
shall be reduced by any taxes required to be withheld.
With respect to the Participant's OHM Common Stock Deferral Account,
each Unit representing one share of Company common stock shall be valued at the
"fair market value per share". The "fair
<PAGE> 12
11
market value per share" shall be determined by the Compensation Committee, as
it existed immediately prior to such Change in Control. The "fair market value
per share" shall mean, (i) except in the case of a merger, consolidation or
reorganization with an acquiror in which the Company is not the survivor (a
"Termination Merger"), the average of the highest sales price per share of the
Company's common stock on the New York Stock Exchange Composite Tape (as report
in The Wall Street Journal - Midwest Edition) (or if the Company's common stock
is not then traded on the New York Stock Exchange, as reported on the principal
market where such common stock is actively traded) on each of the five trading
days immediately preceding the date of the Change of Control, and (ii) in the
case of a Termination Merger, the higher of (A) the fair market value of the
consideration receivable per share by holders of Common Stock of the Company in
such Termination Merger, which fair market value as to any securities included
in such consideration shall be the average of the highest sales price per unit
of such security on the New York Stock Exchange Composite Tape (as reported in
The Wall Street Journal - Midwest Edition) (or if such security is not traded
on the New York Stock Exchange, reported on the principal market where such
security is actively traded) on each of the five trading days immediately
preceding the date of the Termination Merger and as to any such security not
actively traded in any market and as to all other property included in such
consideration, shall be the amount determined by the Committee in its
discretion or (B) the amount determined pursuant to clause (i) of this Section.
The term "Change in Control" has the same meaning as ascribed to such term
under the Company's Incentive Stock Plan (or any successor plan).
5.7 INTERPRETATION
The Compensation Committee will interpret the Plan, and the
Administrative Committee will administer the Plan, according to the laws of the
State of Ohio and, when applicable, the laws of the United States in a manner
that ensures that this Plan will be treated as a nonqualified, unfunded plan of
deferred compensation within the meaning of the Employee Retirement Income
Security Act of 1974, as amended. The Compensation Committee and the
Administrative Committee may adopt any additional rules or interpretative
guidelines not specifically mentioned in this Plan if they are needed to
administer the Plan and are not inconsistent with its purpose.
5.8 SEVERABILITY
Any determination by a court of competent jurisdiction that any part of
this Plan is illegal or ineffective will not affect any other provision of the
Plan not specifically included in the court's decision.
<PAGE> 13
12
5.9 HEADINGS
Section headings are for convenience only and do not create any
additional rights, privileges or duties.
5.10 GENDER AND NUMBER
Except when the context indicates to the contrary, when used herein,
masculine terms shall be deemed to include feminine, and singular the plural.
The foregoing is the true and complete text of the OHM Corporation
Retirement and Incentive Compensation Plan as adopted by the Compensation and
Stock Option Committee of the Board of Directors of OHM Corporation as of August
15, 1996.
/s/ John J. Ray III
-------------------------------
John J. Ray III
Vice President, General Counsel
and Secretary
<PAGE> 1
OHM CORPORATION
INCENTIVE STOCK PLAN
1. Purpose. The purpose of the OHM Corporation Incentive Stock Plan
(the "Plan") is to attract, compensate and retain officers of OHM Corporation
(the "Company") and to align the financial interests of the Company's officers
with the shareholders of the Company.
2. Definitions. As used in this Plan,
(a) The term "Board" means the Board of Directors of the Company.
(b) The term "Change in Control" means that any of the following
events shall occur:
(i) The Company is merged, or consolidated or
reorganized into or with another corporation or other legal
person, and as a result of such merger, consolidation or
reorganization less than a majority of the combined voting
power of the then-outstanding securities of such corporation
or person immediately after such transaction are held in the
aggregate by the holders of Voting Stock (as that term is
hereinafter defined) of the Company immediately prior to such
transaction; or
(ii) The Company sells all or substantially all of
its assets to any other corporation or other legal person, and
less than a majority of the combined voting power of the
then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate
by the holders of Voting Stock of the Company immediately
prior to such sale; or
(iii) There is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form or report),
each as promulgated pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), disclosing that any
person (as the term "person" is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined
under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing
25% or more of the combined voting power of the
then-outstanding securities entitled to vote generally in the
election of directors of the Company ("Voting Stock"); or
(iv) The Company files a report or proxy statement
with the Securities and Exchange Commission pursuant to the
Exchange Act disclosing in response to Form 8-K or Schedule
14A (or any successor schedule, form or report or item
therein) that a change in control of the Company has or may
have occurred or will or may occur in the future pursuant to
any then-existing contract or transaction; or
(v) If during any period of two consecutive years,
individuals who at the beginning of any such period constitute
the Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election,
or the nomination for election by the Company's shareholders,
of each Director of the Company first elected during such
<PAGE> 2
period was approved by a vote of at least two-thirds of the
Directors of the Company then still in office who were
Directors of the Company at the beginning of any such period.
(c) The term "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(d) The term "Committee" means the committee described in Section
7 of this Plan.
(e) The term "Common Stock" means shares of the common stock, par
value $.01 per share, of the Company.
(f) The term "Date of Grant" means the date specified by the Committee
on which a grant of Restricted Stock shall become effective, which shall not be
earlier than the date on which the Committee takes action with respect thereto.
(g) The term "Disability" means a Participant is unable to perform the
normal duties of his or her employment by reason of a medically determinable
physical or mental impairment which in the opinion of a physician acceptable to
the Committee can be expected to result in death or to be of a long-continual or
indefinite duration.
(h) The term "Market Value" means the closing price of a share of
Common Stock on the New York Stock Exchange on the specified date (or if Common
Stock was not traded on such date, on the next preceding date on which it was
traded) as reported in The Wall Street Journal Midwest Edition.
(i) The term "Participant" means an officer of the Company who is
selected by the Committee to receive benefits under the Plan.
(j) The term "Subsidiary" means any corporation in which at the time
the Company owns or controls, directly or indirectly, not less than 50% of the
total combined voting power represented by all classes of stock issued by such
corporation.
(k) The term "Restricted Stock" means Common Stock granted or sold
pursuant to this Plan as to which neither the Substantial Risk of Forfeiture nor
the restrictions on transfer referred to in Section 4 hereof have expired.
(l) The term "Rule 16b-3" means Rule 16b-3 under the Securities
Exchange Act of 1934 or any successor rule to the same effect.
(m) The term "Substantial Risk of Forfeiture" shall have the
meaning referred to in Section 4(c) hereof.
3. Shares Available under the Plan. The number of shares of Common
Stock issued or transferred and released from Substantial Risk of Forfeiture
under the Plan shall not in the aggregate exceed 500,000 shares, which may be
shares of original issuance or shares held in treasury or a combination thereof.
2
<PAGE> 3
4. Restricted Stock. The Committee may authorize grants or sales to
Participants of shares of Restricted Stock upon such terms and conditions as the
Committee may determine in accordance with the following provisions:
(a) Each grant or sale shall result in an immediate transfer of
ownership of shares of Common Stock to the Participant, or the Committee may, in
its discretion, defer the transfer of ownership of shares of Common Stock until
such time as the Committee may specify, provided that in each case such grant or
sale shall be made, issued or awarded in consideration of the performance of
services and the execution of a non-competition agreement, and shall entitle
such Participant to dividend, voting and other ownership rights, subject to the
Substantial Risk of Forfeiture.
(b) Each grant or sale may be made without any other consideration from
the Participant or in consideration of a payment by the Participant that is less
than the market value per share of Common Stock on the Date of Grant.
(c) Each grant or sale shall provide that the shares of Restricted
Stock covered thereby shall be subject to a "Substantial Risk of Forfeiture"
within the meaning of Section 83 of the Code for a period to be determined by
the Committee on the Date of Grant.
(d) Each grant or sale shall provide that, during the period for which
such Substantial Risk of Forfeiture is to continue, the transferability of the
shares of Restricted Stock shall be prohibited or restricted in the manner and
to the extent prescribed by the Committee on the Date of Grant. Such
restrictions may include without limitation rights of repurchase or first
refusal of the Company, non-competition provisions, or provisions subjecting the
shares of Restricted Stock to a continuing Substantial Risk of Forfeiture in the
hands of any transferee.
(e) Any grant or sale may provide for the payment of dividends,
dividend equivalents, or other distributions prior to the issuance of any shares
of Restricted Stock and may require that any or all dividends, dividend
equivalents, or other distributions paid on the shares of Restricted Stock be
automatically sequestered and reinvested on an immediate or deferred basis in
additional shares of Common Stock, which may be subject to the same restrictions
as the underlying award or such other restrictions as the Committee may
determine.
3
<PAGE> 4
(f) Each grant or sale shall be evidenced by an agreement, which shall
be executed on behalf of the Company by any officer thereof and delivered to and
accepted by the Participant and shall contain such terms and provisions
consistent with this Plan. Unless otherwise directed by the Committee, all
certificates representing shares of Restricted Stock, together with a stock
power that shall be endorsed in blank by the Participant with respect to the
shares of Restricted Stock, shall be held in custody by the Company until all
restrictions thereon lapse.
(g) The Committee may provide at or after the Date of Grant of any
Restricted Stock, for the payment of a cash bonus intended to offset the amount
of tax that the Participant may incur in connection with such Restricted Stock,
including tax on the receipt of such bonus.
5. Fractional Shares. The Company shall not be required to issue any
fractional shares of Common Stock pursuant to this Plan. The Committee may
provide for the elimination of fractions or for the settlement thereof in cash.
6. Withholding Taxes. To the extent that the Company is required to
withhold federal, state, local or other taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for the withholding are insufficient, it
shall be a condition to the receipt of any such payment or the realization of
any such benefit that the participant or such other person make arrangements
satisfactory to the Company for payment of the balance of any taxes required to
be withheld. The Participant's required tax withholding may be satisfied by a
relinquishment of a portion of any such payment or benefit. The Company and any
Participant or such other person may also make similar arrangements with respect
to the payment of any taxes with respect to which withholding is not required.
7. Administration of the Plan. (a) This Plan shall be administered by
the Compensation and Stock Option Committee (the "Committee") of the Board of
Directors of the Company. A majority of the members of the Committee shall
constitute a quorum, and the acts of the members of the Committee who are
present at any meeting thereof at which a quorum is present, or acts unanimously
approved in writing by the members of the Committee, shall be the acts of the
Committee.
(b) The interpretation and construction by the Committee of any
provision of this Plan or any agreement, notification or document evidencing a
grant of Restricted Stock, and any determination by the Committee pursuant to
any provision of this Plan or any such agreement, notification or document,
shall be final and conclusive. No member of the Committee shall be liable for
any such action taken or determination made in good faith.
8. Amendments, etc. (a) The Committee may amend this Plan from time
to time as it deems necessary in its sole discretion.
4
<PAGE> 5
(b) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Company and shall
not interfere in any way with any right that the Company would otherwise have to
terminate any Participant's employment or other service at any time.
(c) In the case of termination of employment by reason of death,
Disability or retirement from the Company upon the attainment of age 65 or upon
completion of ten years of employment with the Company and the attainment of age
55, or in the event of a Change in Control, a Participant's Restricted Stock
shall become fully vested and cease to be subject to a Substantial Risk of
Forfeiture.
9. Successors. In the event that another corporation shall become the
successor of the Company by reason of the merger, consolidation or acquisition
of substantially all of the assets and business of the Company, it shall be a
condition to the consummation of such merger, consolidation or acquisition that
such successor corporation shall assume and agree to perform all terms,
conditions, and obligations of the Company under the Plan.
The foregoing is the true and complete text of the OHM Corporation
Incentive Stock Plan as adopted by the Compensation and Stock Option Committee
of the Board of Directors of OHM Corporation effective as of August 15, 1996.
/s/ John J. Ray III
---------------------------
John J. Ray III
Vice President, General
Counsel and Secretary
5
<PAGE> 1
EXHIBIT 11
Statement Re Computation of Per Share Earnings
OHM CORPORATION
COMPUTATION OF PER SHARE EARNINGS
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- ----------------------------
1996 1995 1996 1995
---- ---- ---- ----
PRIMARY:
<S> <C> <C> <C> <C>
Average Shares Outstanding 26,772 20,100 26,729 17,903
Net effect of dilutive stock options and warrants--
based on the treasury stock method 58 493 28 232
------- ------- ------- -------
Total 26,830 20,593 26,757 18,135
======= ======= ======= =======
Net Income $ 2,379 $ 234 $ 3,709 $ 1,521
======= ======= ======= =======
Per Share Amount $ 0.09 $ 0.01 $ 0.14 $ 0.08
======= ======= ======= =======
FULLY DILUTED: (1)
Average Shares Outstanding 26,772 20,100 27,729 17,903
Net effect of dilutive stock options and warrants--
based on the treasury stock method 58 623 28 553
------- ------- ------- -------
Total 26,830 20,723 26,757 18,456
======= ======= ======= =======
Net Income $ 2,379 $ 234 $ 3,709 $ 1,521
======= ======= ======= =======
Per Share Amount $ 0.09 $ 0.01 $ 0.14 $ 0.08
======= ======= ======= =======
<FN>
(1) Fully dilutive effect of stock options and warrants on per share
amounts for the three and six months ended June 30, 1996 and 1995, has
not been presented in the statement of income since any reduction of
less than 3% in the aggregate need not be considered as dilution.
</TABLE>
<PAGE> 1
EXHIBIT 15
Letter Re Unaudited Financial Information
Board of Directors and Shareholders
OHM Corporation
We are aware of the incorporation by reference into the Registration Statements
(Form S-8 No. 33-24953, Form S-8 No. 33-28025, Form S-8 No. 33-55373 and Form
S-8 33-63233) of OHM Corporation of our report dated July 26, 1996, relating to
the unaudited consolidated interim financial statements of OHM Corporation which
are included in its Form 10-Q for the quarter ended June 30, 1996.
Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part
of the registration statement prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
Ernst & Young LLP
Columbus, Ohio
July 26, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET AND THE UNAUDITED CONSOLIDATED STATEMENTS
OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,413
<SECURITIES> 0
<RECEIVABLES> 183,742
<ALLOWANCES> 23,613
<INVENTORY> 12,304
<CURRENT-ASSETS> 200,460
<PP&E> 126,778
<DEPRECIATION> 47,757
<TOTAL-ASSETS> 346,683
<CURRENT-LIABILITIES> 93,247
<BONDS> 87,142
<COMMON> 2,680
0
0
<OTHER-SE> 162,730
<TOTAL-LIABILITY-AND-EQUITY> 346,683
<SALES> 0
<TOTAL-REVENUES> 248,140
<CGS> 0
<TOTAL-COSTS> 215,550
<OTHER-EXPENSES> 23,198
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,878
<INCOME-PRETAX> 5,514
<INCOME-TAX> 1,805
<INCOME-CONTINUING> 3,709
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,709
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
