SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuan toExchang Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-22: (1)
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party: EA Engineering, Science, and Technology, Inc.
(4) Date Filed: November 23, 1999
<PAGE>
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
11019 McCormick Road
Hunt Valley, Maryland 21031
December 2, 1999
Dear Shareholders:
You are cordially invited to attend the annual meeting of shareholders of EA
Engineering, Science, and Technology, Inc., which will be held at Marriott's
Hunt Valley Inn, 245 Shawan Road, Hunt Valley, Maryland on January 13, 2000 at
9:00 a.m. EST. I look forward to greeting as many of our shareholders as
possible.
Details of the business to be conducted at the annual meeting are given in the
attached Notice of Annual Meeting and Proxy Statement.
You will notice in reading the Proxy Statement that George G. Radcliffe, a
director of the Company since 1990, is not standing for re-election. We want to
express our appreciation to George for his valuable contributions to the Company
during his service on the Board.
Whether or not you attend the annual meeting, it is important that your shares
be represented and voted at the meeting. Therefore, I urge you to sign, date and
promptly return the enclosed proxy in the enclosed postage paid envelope. If you
decide to attend the annual meeting and vote in person, you will of course have
that opportunity.
On behalf of the Board of Directors, I would like to express our appreciation
for your continued interest in the affairs of the Company.
Sincerely,
/s/ Loren D. Jensen
Loren D. Jensen, Ph.D.
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
11019 McCormick Road
Hunt Valley, Maryland 21031
NOTICE OF ANNUAL MEETING
JANUARY 13, 2000
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of EA
Engineering, Science, and Technology, Inc. will be held on January 13, 2000, at
9:00 a.m. EST, at Marriott's Hunt Valley Inn, 245 Shawan Road, Hunt Valley,
Maryland, for the following purposes:
1. To elect four directors to serve until the next annual meeting and
until their successors are elected and qualified;
2. To ratify the appointment of PricewaterhouseCoopers LLP as
independent public accountants for the Company for the fiscal year
ending August 31, 2000; and
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Only shareholders of record of Common Stock as of the close of business on
November 24, 1999 are entitled to receive notice of and vote at the meeting or
any adjournment or postponement thereof.
By Order of the Board of Directors,
/s/ Barbara L. Posner
Barbara L. Posner
Senior Vice President, Chief Financial Officer,
Chief Operating Officer and Secretary
December 2, 1999
Baltimore, Maryland
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY
PROMPTLY IN THE ENCLOSED POSTAGE PAID RETURN ENVELOPE.
<PAGE>
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by and on
behalf of the Board of Directors of EA Engineering, Science, and Technology,
Inc., together with its wholly-owned subsidiaries (the "Company") of proxies
from the holders of the Company's common stock, par value $0.01 per share (the
"Common Stock"), for use at the Annual Meeting to be held on January 13, 2000 as
set forth in the attached notice, and any adjournment or postponement thereof
(the "Meeting"). The giving of a proxy does not affect your right to vote should
you attend the Meeting in person, and the proxy may be revoked at any time
before it is voted by giving the Secretary of the Company a signed instrument
revoking the proxy or a signed proxy having a later date. Each properly executed
proxy not revoked will be voted in accordance with instructions thereon. If no
instructions are specified in the proxy, it is the intention of the persons
named in the accompanying proxy to vote FOR the election of the nominees named
herein as directors of the Company and FOR the matter described in Item 2 in the
Notice of Annual Meeting.
The mailing address of the Company's principal executive office is 11019
McCormick Road, Hunt Valley, Maryland 21031, and the approximate date on which
this Notice of Meeting, Proxy Statement and the form of proxy are first being
sent to stockholders is December 2, 1999.
Only holders of record of Common Stock at the close of business on November 24,
1999 are entitled to notice of and to vote at the Meeting, one vote for each
share of Common Stock so held. On that date there were 6,338,970 shares of
Common Stock outstanding held of record by 871 shareholders.
PRINCIPAL STOCKHOLDERS
The following table shows, as of October 29, 1999, the total number of shares of
Common Stock beneficially owned by each person who was known by the Board of
Directors to own more than 5% of the Common Stock: On that date there were
6,332,515 shares of Common Stock outstanding.
Shares Beneficially
Name and Address of Owned Directly or Percent of
Beneficial Owner Indirectly Common Stock
---------------- ---------- -----------
Loren D. Jensen 1,552,980 24.5%
12 Burnbrae Road
Towson, Maryland 21204
Cleaveland D. Miller, Trustee 708,125 (1) 11.2%
250 W. Pratt Street
Baltimore, Maryland 21201
Dimentional Fund Advisors, Inc. 438,750 (2) 6.9%
1299 Ocean Avenue, 11 Floor
Santa Monica, California 90401
(1) Cleaveland D. Miller holds 702,000 of these shares as the trustee of
irrevocable trusts for the benefit of each of Loren D. Jensen's three
children.
(2) Shares owned by advisory clients of Dimensional Fund Advisors, Inc., which
disclaims beneficial ownership thereof.
<PAGE>
ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of five members. George G.
Radcliffe, a director of the Company since 1990, is leaving the Board effective
as of the date of the annual meeting. Although the Company has begun a search
for another director, the Board has reduced the number of directors to four (4)
as of the date of the Annual Meeting.
The four persons named in the following table have been designated as nominees
for election to the Board of Directors, each to serve for a one-year term and
until his successor is duly elected and qualified. All of the nominees listed
below currently serve as directors of the Company and have agreed to serve as
directors. If any of such nominees becomes unable to serve for any reason, the
persons named in the proxy will vote for the election of any substitute nominee
designated by the Board of Directors. The Company has no reason to believe that
any nominee will be unable to serve.
Shares Beneficially
Owned (1) (2)
------------------
Name of Nominee Director
and Background Since Amount Percent
-------------- ----- ------ -------
Edmund J. Cashman, Jr., age 63, Senior 1986 53,625 *
Executive Vice President of Legg Mason
Inc. and Legg Mason Wood Walker, Inc.;
Director/Trustee, Various Legg Mason
Registered Investment Companies
Loren D. Jensen, Ph.D., age 62, President, 1973 1,552,980 24.5%
Chief Executive Officer and Chairman of
the Board of Directors of the Company
Rudolph P. Lamone, Ph.D., age 67, Chairman 1986 10,548 *
of the Board, Michael D. Dingman Center for
Entrepreneurship, Robert H. Smith School of
Business, University of Maryland
Cleaveland D. Miller, Esq., age 61, Managing 1997 10,875 *
Partner, Semmes, Bowen & Semmes, a Pro-
fessional Corporation
All executive officers and directors of the 1,655,113 27.0%
Company as a group (5 individuals)
- --------------
*Less than 1%
(1) Based upon information supplied by each director and executive officer as
of October 29, 1999. Unless otherwise noted, all shares indicated are held
with sole voting and sole investment power.
(2) Includes 1,612,863 shares for which directors and executive officers have
sole voting and dispositive powers and presently exercisable option shares
of 15,000 for Ms. Posner and 8,750, 8,750, and 9,750 for Messrs. Cashman,
Lamone and Miller, respectively.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE ABOVE NOMINEES AS DIRECTORS OF THE COMPANY.
<PAGE>
Certain Transactions
The Company leases approximately 43,700 square feet of office space, which
serves as its corporate headquarters, in Hunt Valley, Maryland from Merrymack
Limited Partnership, a Maryland limited partnership of which Loren D. Jensen is
the limited partner and Ecolair Limited Partnership is the general partner.
Ecolair is a Maryland Limited Liability Limited Partnership of which Loren D.
Jensen is the general partner. Of the 43,700 square feet, the Company sublets
4,200 square feet to other tenants. The prime lease expires December 31, 2006.
For the year ended August 31, 1999, total payments under the lease (including
pass-through taxes and operating expenses) were $796,200.
The Company leases approximately 32,400 square feet of office space in Sparks,
Maryland from Ecolair. The lease expires November 30, 2007. For the year ended
August 31, 1999 total payments under the lease (including pass-through taxes and
operating expenses) were $621,500.
Through April 30, 1999, the Company leased a 16,500 square foot building
adjacent to its facility in Sparks, Maryland from ARE Sparks Limited
Partnership, a Pennsylvania limited partnership of which Loren D. Jensen is the
general partner and Ecolair is the limited partner. When the Company sold its
chemical laboratory, EA Laboratories, on April 30, 1999 to Severn Trent
Laboratories, Inc., ARE Sparks Limited Partnership sold the building to Severn
Trent Laboratories, Inc. Therefore, EA currently has no responsibility for any
future lease payments at this facility. For the year ended August 31, 1999 total
payments under the lease through April 30, 1999 (including pass-through taxes
and operating expenses), were $328,200.
Legg Mason Wood Walker, Inc., with which Edmund J. Cashman is affiliated,
provides investment advisory services to the Company.
Semmes, Bowen & Semmes ("Semmes"), of which Cleaveland D. Miller is managing
partner, provided legal services to the Company during fiscal 1999. Semmes'
legal services were primarily in connection with the sale of EA Laboratories.
The firm's billings to the Company in fiscal 1999 were less than $60,000,
however, the Director's fees paid to Mr. Miller, plus Semmes' fees, totaled
$65,002 in the fiscal year ended August 31, 1999.
At the request of its former primary lender and in order to maintain a favorable
relationship with this lender, in December 1996 the Company purchased from this
lender the secured loans of three former Company officers. These interest-free
demand loans, in the aggregate amount of $301,000, are secured by pledges of
Common Stock. The differential between the current fair market value of the
pledged stock and the amount of the loans is fully reserved within the Company's
balance sheet.
Management of the Company believes that the terms and conditions of the
transactions between the Company and entities with which certain of its
directors are affiliated were on terms and conditions at least as favorable to
the Company as could have been obtained from third parties and were in the best
interests of the Company.
<PAGE>
BOARD ORGANIZATION AND COMPENSATION
Organization
The Board of Directors held thirteen meetings during the fiscal year ended
August 31, 1999. Each incumbent director attended at least 75% of the meetings
of the Board of Directors and of its committees of which he was a member. The
Company has an Audit Committee, a Compensation Committee and an Ethics
Committee, but does not have a Nominating Committee.
The Audit Committee of the Board of Directors, composed of Messrs. Miller
(Chairman), Cashman, Lamone, and Radcliffe, met once during the fiscal year
ended August 31, 1999. The Audit Committee reviews with Arthur Andersen LLP, the
Company's independent auditors, the audit plan and the internal accounting
controls for the Company and its subsidiaries, as well as the Company's
consolidated financial statements and management letter. It also recommends to
the Board the selection of independent auditors for the Company.
The Compensation Committee of the Board of Directors, composed of Messrs. Miller
(Chairman), Cashman, Lamone, and Radcliffe, met two times during the fiscal year
ended August 31, 1999. This Committee periodically reviews the Company's
management compensation program and reports its actions or recommendations to
the Board of Directors. The Committee also approves the general salary scale for
employees of the Company. The Committee is also authorized to grant options
under the Company's Amended and Restated Stock Option Plan and to make phantom
stock awards under the Company's 1999 Long-Term Incentive Plan. See "Report of
the Compensation Committee on Executive Compensation" below.
The Ethics Committee of the Board of Directors, created in fiscal 1998, is
composed of Messrs. Miller (Chairman), Cashman, Lamone, and Radcliffe. The
Committee, established to oversee enforcement of EA's Code of Business Ethics
and Practices, met once in fiscal 1999.
Director Compensation
Effective March 31, 1998, each non-employee director of the Company received a
fee of $1,500 for each meeting of the Board of Directors which he attended. In
addition, each non-employee director received $1,500 for attendance at each
meeting of any committee of the Board not held on the day of a Board meeting.
Prior to March 31, 1998, the per meeting Board and committee attendance fees
were $1,000.
In addition to such fees, under the Company's 1993 Non-Employee Director Stock
Option Plan, each director who is newly elected to the Board and who, at that
time, is not an employee of the Company is granted an option to purchase 4,000
shares of Common Stock when he or she becomes a director. Also, under the
Company's 1995 Non-Employee Director Stock Option Plan, per approval at the
January 14, 1999 meeting of Company stockholders, each non-employee director is
granted an option to purchase 4,750 shares of Common Stock as of the date of
each annual meeting of stockholders at which such director is reelected. Prior
to this approval, 1,000 shares of Common Stock was awarded to each non-employee
director as of the date of each annual meeting of stockholders at which such
director is reelected. All such options have an exercise price equal to the
market price of the Common Stock on the date of grant and vest immediately upon
grant.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed of the four non-employee directors. The Committee has the authority to
set the level of compensation for the Chairman of the Board, President and Chief
Executive Officer and other executive officers; to administer the Company's
plans and policies relating to executive compensation; and to administer the
Company's stock plans.
The Committee believes that executive compensation should; (1) be evaluated with
a view to motivating individual and company performance; (2) align the interest
of executives with the long-term interest of the Company's stockholders; and (3)
be competitive with similar positions and levels of responsibilities of other
comparable companies. The total compensation package should attract, retain,
reward and motivate key executives to achieve desired Company performance and to
enhance stockholder value.
The Committee seeks to realize these objectives both by the use of short-term
incentives in the form of base salary and incentive compensation - and long-term
incentives in the form of stock option grants and the Long-Term Incentive Plan.
Base Salary
Salaries of executive officers are initially based on experience and competitive
conditions. Salaries are reviewed annually and adjusted to reflect the
performance of the executive and by considering salaries for comparable
positions in other companies. In fiscal 1999, base salaries for executive
officers were not increased, except that the salary of Barbara L. Posner was
increased from $145,000 to $185,000 when she was appointed Chief Financial
Officer and Chief Operating Officer of the Company.
Incentive Compensation
The Compensation Committee paid a bonus to management in fiscal 1999 as a result
of the Company exceeding its profit targets for the final six months of fiscal
1999.
For fiscal 2000, the Compensation Committee approved a performance-based
incentive compensation plan for the Company's corporate staff, branch managers,
and project managers. The plan is based on operating income goals. For corporate
staff, bonus potential ranges from 15% to 35% of base salary. Eligible employees
would be entitled to incentive compensation only if the Company achieves at
least 70% of its fiscal 2000 income target. For branch managers, bonus potential
is up to 30% of base salary. Eligible employees would be entitled to incentive
compensation only if 70% of branch manager income target is achieved. For
project managers, bonus potential is from 4% to 12% of base salary. Eligible
employees would be evaluated for incentive compensation only if they achieve 90%
of their personal new order, project profitability, utilization and cash
management goals.
Long-Term Incentives
In administering the Company's stock option plans, the Company determines the
amount and terms of stock option grants to be made to the Company's executive
officers. Stock options granted are usually nonqualified stock options,
exercisable at a price equal to the fair market value of the underlying stock on
the date of grant, and vest over three or four years in order to provide an
added incentive for key individuals to remain with the Company. During fiscal
1999, the Company granted stock options to only one executive officer. It
granted 65,000 options to purchase its common stock to Barbara Posner when she
was named Chief Operating Officer and Chief Financial Officer.
<PAGE>
The Company also granted stock options to a wide range of other employees,
believing it is desirable to provide key employees with long-term incentives
tied to the Company's performance and stockholder value. In determining the
number of options to grant, the Committee bases its decision on the performance
of the individual employee and the employee's potential to improve stockholder
value. Typically, options do not immediately vest at the time they are granted.
Vesting occurs at equal installments over a three-year period.
The Company, as previously disclosed, adopted the 1999 Long-Term Incentive Plan
at its regularly scheduled meeting on September 29, 1998. This Plan, as approved
by the stockholders at the annual meeting held on January 14, 1999, gives the
Committee the authority to issue phantom stock awards to executive officers and
other key employees tied to the fair market value of EA's common stock. No
awards have yet been made under this Plan.
Chairman of the Board Compensation
The Company made no change in the base salary of Dr. Jensen, which remains at
$225,000. However, Dr. Jensen did assume the additional responsibilities of
Chief Executive Officer in February 1999, when Dr. Donald Deieso resigned. Dr.
Jensen was also elected President in November 1999.
Chief Executive Officer Compensation
Dr. Deieso served as Chief Executive Officer of the Company until February 1999.
His base salary remained the same during that period.
The Compensation Committee,
Cleaveland D. Miller, Chairman
Edmund J. Cashman, Jr.
Rudolph P. Lamone
George G. Radcliffe
Compensation Committee Interlocks and Insider Participation
Except as otherwise described in this Proxy Statement ("Election of
Directors-Certain Transactions"), there are no affiliations between the Company
and the members of the Compensation Committee.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company as of November 15, 1999 are Loren D.
Jensen, Ph.D., as to whom information is provided under ELECTION OF DIRECTORS
and Barbara L. Posner for whom related information is as follows:
Barbara L. Posner, 41, Senior Vice President, Chief Financial Officer, Chief
Operating Officer and Secretary. Ms. Posner joined the Company in March 1997 and
was the Senior Vice President of Finance and Administration until February 1999
when she was appointed Chief Financial Officer and Chief Operating Officer. With
more than 20 years experience, Ms. Posner began her career in public accounting
and later moved into operations. Prior to joining EA, she served as Vice
President and Controller at Metcalf & Eddy, Inc., a water, wastewater, and
remediation technologies company.
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning executive
compensation for services during each of the Company's last three fiscal years
to (i) those persons serving as chief executive officer of the Company during
the fiscal year ended August 31, 1999; and (ii) those persons who were among the
four most highly compensated executive officers during the fiscal year ended
August 31, 1999.
<TABLE>
Long-Term
Annual Compensation
Compensation Awards
------------------------- ---------------
Other All
Annual Restricted Other
Compen- Stock Option Compen-
Name and Principal Salary Bonus sation Awards Shares sation
Position in 1999 Year ($) ($) ($) (#) (#) ($) (1)
---------------- ---- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Loren D. Jensen, Ph.D. 1999 238,673 -- -- -- -- 4,191
Chairman of the Board, 1998 282,000 -- -- -- -- 4,750
President and Chief 1997 282,000 -- -- -- -- 4,500
Executive Officer (For-
merly Chairman of the
Board)
Barbara L. Posner 1999 171,154 -- -- -- 65,000 4,858
Senior Vice President, 1998 145,000 -- -- -- 25,000 3,052
Chief Financial Officer, 1997 61,779 25,000 -- -- 10,000 --
Chief Operating Officer
and Secretary
Donald A. Deieso (2) 1999 129,964 -- -- -- -- 193,280
Former President and 1998 275,000 -- -- -- 200,000 3,517
Chief Executive Officer 1997 137,500 75,000 -- -- 200,000 --
Edward M. Greco, P.E. 1999 175,000 -- -- -- -- 267,300
Former Senior Vice 1998 175,000 -- -- -- -- 2,000
President, President of 1997 60,577 20,000 -- -- 70,000 --
EA International, Inc.
Shamseddin Shahid-Saless (3) 1999 107,308 -- -- -- -- 128,229
Former Executive Vice 1998 225,000 -- -- -- -- 2,000
President of Sales and 1997 82,211 25,000 -- -- 75,000 --
Marketing
</TABLE>
(1)Includes the Company's matching contributions under its 401(k) Employees
Savings Plan. Includes severance and payout of vacation accrual for
Donald A. Deieso and Shamseddin Shahid-Saless, as well as a vehicle
settlement payout for Donald A. Deieso and a change-in-control settlement
payout made to Edward M. Greco in the fiscal year ended August 31, 1999.
(2)Donald A. Deieso separated from the Company effective February 12, 1999.
(3)Shamseddin Shahid-Saless separated from the Company effective February 2,
1999.
<PAGE>
STOCK-BASED INCENTIVE COMPENSATION PLAN
The following table sets forth certain information concerning grants of options
to purchase shares of Common Stock in the last fiscal year to the named
executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
Grant Date
Individual Grants in 1999 Value
-------------------------------------------------- ----------
Number of % of Total
Securities Options Grant Date
Underlying Granted to Exercise or Present
Options/SARs Employees in Base Price Expiration Value (1)
Name Granted (#) Fiscal Year ($/Share) Date ($)
---- ----------- ----------- --------- ---- ---
<S> <C> <C> <C> <C> <C>
Loren D. Jensen -- -- -- -- --
Barbara L. Posner 65,000 56.2 1.125 3/30/09 17,600
Donald A. Deieso -- -- -- -- --
Edward M. Greco -- -- -- -- --
Shamseddin Shadid-Saless -- -- -- -- --
</TABLE>
(1) Based on the Black-Scholes option valuation model. In applying this
valuation model, the Company has assumed an expected volatility index of
0.6; a risk-free rate of return ranging from 5.57% to 5.72%; no dividend
yield; and exercise of the option as vesting occurs. The actual value, if
any, that an executive officer may receive is dependent on the excess of
the stock price over the exercise price. Use of this model should not be
viewed as a forecast of the future performance of the Company's stock
price.
<PAGE>
The following table sets forth certain information regarding option exercises
during the fiscal year ended August 31, 1999, as well as the number and value,
as of August 31, 1999, of unexercised options held by the named executive
officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money
Options/SARs at Options/SARs at
Fiscal Year End Fiscal Year End
(#) ($)
------------------------ ---------------------
Shares
Acquired on Value
Exercise Realized Exer- Unexer- Exer- Unexer-
Name (#) ($) cisable cisable cisable cisable
---- --- --- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Loren D. Jensen -- -- -- -- -- --
Barbara L. Posner -- -- 15,000 85,000 -- --
Donald A. Deieso -- -- 400,000 -- -- --
Edward M. Greco -- -- -- -- -- --
Shamseddin Shahid-
Saless -- -- -- -- -- --
</TABLE>
(1) Based on a closing NASDAQ price of $1.031 per share of Common Stock on
August 31, 1999. Values are calculated by subtracting the exercise price
from the fair market value of the stock as of the fiscal year end.
<PAGE>
Employment Agreements and Change-in-Control Arrangements
In March, 1999, the Company entered into a Change of Control(1) Agreement with
Barbara L. Posner. The Agreement provides that if, within thirty (30) days after
a Change of Control, Ms. Posner terminates her employment, she is entitled to
receive a lump sum payment equal to two times her annual salary (presently
$185,000 per year) plus company-provided benefits for 24 months from the date of
termination. She will also receive ownership of the vehicle, computer and fax
machine currently provided to her by the Company.
The Agreement also provides that if Ms. Posner's employment is terminated by the
Company without cause, Ms. Posner will continue to receive her salary plus
benefits for a period of 18 months from the date of termination of employment.
On March 4, 1999, the Company entered into an Employment Agreement with Edward
M. Greco under which Mr. Greco was to serve as President of EA International,
Inc. and Senior Vice President of EA Engineering, Science, and Technology, Inc.
The Agreement was to expire upon the earlier of one year or a Change of
Control(1) of the Company. On November 12, 1999, Mr. Greco's employment with the
Company terminated. Pursuant to the terms of the Agreement, Mr. Greco will
receive severance benefits equal to nine (9) months salary (based on a rate of
$175,000 annually), plus the Company's standard employee benefits and the
ownership of the vehicle currently provided to him by the Company.
- ---------------------
(1) Under the terms of the Company's respective Agreements with Ms. Posner and
Mr. Greco discussed herein, "Change of Control" is defined as the
occurrence of an event with respect to the Company that is a change of a
nature that would be required to be reported, by persons or entities
subject to the reporting requirements of Section 13(d) of the Securities
and Exchange Act of 1934 (the "Exchange Act"), in Schedule 13D of
Regulation 13D-G, or any successor provisions thereto, promulgated under
the Exchange Act; provided that a Change of Control shall be deemed to
have occurred only if any "person" (as that term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 issued under the Exchange Act), directly or
indirectly, of securities of the Company representing forty-five percent
(45%) or more of the combined voting power of the Company's then
outstanding securities.
<PAGE>
PERFORMANCE GRAPH
The following graph compares the performance of the Common Stock to the index of
the NASDAQ National Market Exchange and a self-defined peer group index. The
graph and the following table show the Company's last five fiscal years.
(PERFORMANCE GRAPH)
8/94 (1) 8/95 8/96 8/97 8/98 8/99
---- ---- ---- ---- ---- ----
The Company 100 141 69 53 45 27
Peer Group (2) 100 215 266 326 231 223
NASDAQ U.S. 100 135 152 212 201 371
(1) Assumes that $100 was invested on August 31, 1994 at the closing sales
price of the Common Stock and of the stocks in each index, and that all
dividends, if any, were reinvested. Returns are measured through the last
trading day of each of the Company's fiscal years. No cash dividends have
been declared on the Common Stock.
(2) Companies included in the peer group index are Ecology & Environment, Inc.,
GZA Geoenvironmental Tech, Inc., Harding-Lawson Associates, Inc., ICF
Kaiser International, Inc., TRC Companies, Inc., Tetra Tech, Inc., Versar,
Inc. and Roy F. Weston, Inc. The peer group utilized in constructing the
above graph consists of the same companies as used by the Company in
preparing the performance graphs last year with the exception that EMCON,
included in last year's graph, is now part of the IT Group, and is no
longer included as part of the Peer Group.
<PAGE>
CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP acted as the independent auditors for the
Company for the fiscal year ended August 31, 1999. Arthur Andersen LLP was
dismissed as the Company's independent auditors effective November 18, 1999,
at which time the Company appointed the firm of Pricewaterhouse-Coopers LLP
to serve as independent auditors for fiscal year 2000. The Company's decision
to replace Arthur Andersen LLP was not the result of any dispute with Arthur
Andersen LLP concerning accounting issues.
The reports of Arthur Andersen LLP on the Company's financial statements as
of and for the two fiscal years ended August 31, 1998 and August 31, 1999 did
not contain an adverse opinion or a disclaimer, and the financial statements
were not qualified or modified as to uncertainty, audit scope or accounting
principles. There were no disagreements between Arthur Andersen and the
Company within the meaning of Item 304 of Regulation S-K on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure in connection with the audit of the Company's
financial statements for the two fiscal years ended August 31, 1998 and 1999,
or for the subsequent interim period through the date of their termination,
which disagreements, if not resolved to their satisfaction would have caused
Arthur Andersen LLP to issue an adverse opinion or disclaimer of opinion, or
was modified as to uncertainty, audit scope or accounting principles. During
the two fiscal years prior to the dismissal of Arthur Andersen LLP, there
have been no reportable events (as defined in Item 304 or Regulation S-K)
with Arthur Andersen LLP.
The Company has not consulted PricewaterhouseCoopers LLP regarding the
application of accounting principles to a specified transaction or the type
of audit opinion that might be rendered on the financial statements during
the prior two fiscal years through the date that they were appointed as the
Company's independent auditors.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
selected the firm of PricewaterhouseCoopers LLP to audit the consolidated
financial statements of the Company for the fiscal year ending August 31,
2000. A representative of PricewaterhouseCoopers LLP is expected to be
present at the meeting, have an opportunity to make a statement, and be
available to respond to appropriate questions. The firm of Arthur Andersen
LLP acted as the independent auditors for the Company for the fiscal year
ended August 31, 1999. A representative of Arthur Andersen LLP is expected to
be present at the meeting, have an opportunity to make a statement, and be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING AUGUST 31, 2000.
<PAGE>
Voting Procedures
Each proposal submitted to the Company's stockholders for a vote is deemed
approved if a majority of the shares of Common Stock of the Company present in
person or by proxy at a meeting at which a quorum is present are voted in favor
of the proposal. The presence in person or by proxy of stockholders entitled to
cast a majority of all the votes entitled to be cast at the meeting constitutes
a quorum. A stockholder is entitled to one vote for each share owned.
Stockholder votes are tabulated by the Company's Registrar and Transfer Agent.
Proxies received by the Registrar, if properly executed and delivered, will be
voted in accordance with the voting specifications made on the proxy.
Under applicable Delaware corporate law and the Charter and By-Laws of the
Company, proxies received by the Registrar specifying an abstention as to any
proposal will cause the shares so represented to be counted toward a quorum, but
are not counted as favorable votes and, therefore, have the same effect as a
vote against the proposal. To the extent holders or brokers having the right to
vote shares do not attend the meeting or return a proxy, such shares will not
count toward a quorum and, if a quorum is otherwise achieved, will have no
effect on the vote of the proposals considered at the meeting which shall be
based solely upon the vote of the shares represented at the meeting.
Section 16(b) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's
directors and executive officers file reports with the Securities and Exchange
Commission regarding ownership of the Common Stock and furnish the Company with
copies of all such filings. Based on a review of these filings, the Company
believes that all such filings were timely made.
2001 Annual Meeting of Stockholders
If any stockholder intends to present a proposal for consideration at the 2001
Annual Meeting of Stock-holders, such proposal must be received by the Company
on or before August 3, 2000, in order to be included in the Company's proxy
statement and form of proxy for such meeting. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement and form of
proxy relating to the 2001 Annual Meeting of Stockholders any stockholder
proposal which does not meet all of the requirements for such inclusion
established by the Securities and Exchange Commission in effect at that time. As
of the date of this Proxy Statement, the Board of Directors knows of no matters,
other than those stated above, that may be brought before the Meeting. However,
if other matters do properly come before the Meeting, the persons named in the
enclosed proxy will vote upon them in their discretion and in accordance with
their best judgment.
A copy of the Company's Annual Report on Form 10-K, including the financial
statements and financial statement schedules, required to be filed with the
Securities and Exchange Commission for the fiscal year ended August 31, 1999 is
available to stockholders free of charge upon written request. Address requests
to the Secretary of EA Engineering, Science, and Technology, Inc., 11019
McCormick Road, Hunt Valley, Maryland 21031.
<PAGE>
The cost of preparing and mailing the Notice of Meeting, Proxy Statement and
form of proxy will be paid by the Company. The Company will request banks,
brokers, fiduciaries, and similar persons to forward copies of such material to
beneficial owners of the Common Stock in a timely manner and to request
authority for execution of proxies, and the Company will reimburse such persons
and institutions for their reasonable out-of-pocket expenses incurred in
connection therewith. To the extent necessary to assure sufficient
representation, officers and regular employees of the Company may also solicit
the return of proxies by telephone, telegram, or personal interview. The extent
of this solicitation by personal contact will depend upon the response to the
initial solicitation by mail. It is anticipated that the costs of such
solicitation, if undertaken, will not exceed $1,000.
By the Order of the Board of Directors,
/s/ Barbara L. Posner
Barbara L. Posner
Senior Vice President, Chief Financial Officer,
Chief Operating Officer and Secretary
December 2, 1999
Baltimore, Maryland
<PAGE>
Please mark
your vote as X
indicated in
this sample
This proxy when properly executed will be voted in the manner directed by the
undersigned shareholder. If no direction is given, this proxy will be voted FOR
Proposals 1 and 2.
1. ELECTION OF DIRECTORS.
(INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list below.)
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the right
[ ] [ ]
Nominees: E. Cashman, L. Jensen, R. Lamone, C. Miller
2. PROPOSAL TO RATIFY THE APPOINTMENT OF PricewaterhouseCoopers LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY FOR THE FISCAL YEAR ENDING
AUGUST 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. IN THEIR DISCRETION, THE PROXIES ARE HEREBY AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Please sign exactly as the name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated: __________________, 199__
________________________________
(Signature)
________________________________
(Signature if held jointly)
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
(triangle) FOLD AND DETACH HERE (triangle)
<PAGE>
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND
SIGN THE ABOVE PROXY CARD AND RETURN IT PROMPTLY IN THE
ACCOMPANYING ENVELOPE.
(Page)
(EA Engineering Logo)
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
PROXY
This Proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints Barbara L. Posner and David S. Santoro,
or either of them acting singly, as proxies, each with the power to
appoint his or her substitute, and hereby authorizes each of them to
represent and to vote as designated on the reverse side all the shares of
Common Stock of EA Engineering, Science, and Technology, Inc. held of
record by the undersigned as of the close of business on November 24,
1999, at the Annual Meeting of Stockholders to be held on January 13,
2000, or any adjournment or postponement thereof.
(Continued on reverse side)
(triangle) FOLD AND DETACH HERE (triangle)
