<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or section 240.14a-12
Ecology and Environment, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
ECOLOGY AND ENVIRONMENT, INC.
368 Pleasant View Drive
Lancaster, New York 14086
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JANUARY 16, 1997
The Annual Meeting of Shareholders of Ecology and Environment, Inc., a New
York corporation (the "Company"), will be held on January 16, 1997 at 9:00 a.m.,
Eastern Standard Time, at the Radisson Hotel, 4243 Genesee Street, Cheektowaga,
New York, for the following purposes:
1. To elect eight Directors of the Company, two of whom will be Class A
Directors elected by holders of Class A Common Stock and six of whom
will be Class B Directors elected by the holders of Class B Common
Stock, such Directors to hold office until the next Annual Meeting of
Shareholders and until the election and qualification of their
successors.
2. To act on a proposal to appoint Price Waterhouse as the Company's
independent public accountant.
The Board of Directors has fixed the close of business on December 2, 1996
as the record date for the determination of Shareholders entitled to notice of
and to vote at the Annual Meeting.
A copy of the Company's Annual Report to Shareholders is enclosed for your
reference.
Please complete and return the enclosed proxy in the accompanying
post-paid, addressed envelope as soon as you have an opportunity to review the
attached Proxy Statement.
By Order of the Board of Directors
RONALD L. FRANK
Secretary
Lancaster, New York
December 16, 1996
<PAGE> 3
ECOLOGY AND ENVIRONMENT, INC.
368 Pleasant View Drive
Lancaster, New York 14086
PROXY STATEMENT
DATED DECEMBER 16, 1996
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 16, 1997
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of Ecology and
Environment, Inc., a New York corporation (the "Company"), in connection with
the solicitation of proxies for use at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held at the Radisson Hotel, 4243 Genesee Street,
Cheektowaga, New York at 9:00 a.m., Eastern Standard Time, on Thursday, January
16, 1997 and at any adjournments thereof. The enclosed proxy is being solicited
by the Board of Directors of the Company.
If a proxy in the accompanying form is duly executed and returned, the
shares represented thereby will be voted and, where a specification is made by
the shareholder as provided therein, will be voted in accordance with such
specification. A shareholder giving the enclosed proxy has the power to revoke
it at any time before it is exercised by giving written notice to the Company
bearing a later date than the proxy, by the execution and delivery to the
Company of a subsequently dated proxy, or by voting in person at the Annual
Meeting. Any shareholder may vote in person at the Annual Meeting, whether or
not he or she has previously given a proxy.
This Proxy Statement and the enclosed proxy are first mailed to
shareholders on or about December 16, 1996.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only holders of shares of Class A Common Stock and Class B Common Stock of
record at the close of business on December 2, 1996 will be entitled to notice
of and to vote at the meeting and at all adjournments thereof. At the close of
business on November 15, 1996, the Company had issued and outstanding 2,128,772
shares of Class A Common Stock and 1,834,958 shares of Class B Common Stock. At
the meeting, the holders of Class A Common Stock will be entitled, as a class,
to elect two Directors (the "Class A Directors") and the holders of Class B
Common Stock will be entitled, as a class, to elect the remaining six Directors
(the "Class B Directors").
Except for the election of Directors and except for class votes as required
by law, holders of both classes of Common Stock vote or consent as a single
class on all matters, with each share of Class A Common Stock having one-tenth
vote per share and each share of Class B Common Stock having one vote per share.
Shares of Class A Common Stock represented by the proxies in the form
enclosed, properly executed, will be voted in the manner designated, or if no
instructions are indicated, in favor of the Class A Directors named therein and
for the other proposal. The proxy given by the enclosed proxy card may be
revoked at any time before it is voted by delivering to the Secretary of the
Company a written revocation or a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person.
Only holders of record of Common Stock at the close of business on December
2, 1996 will be entitled to notice of and a vote at the Annual Meeting.
One-third of such shares, present in person or represented by proxy, shall
constitute a quorum for the transaction of business at the Annual Meeting.
Under the Company's by-laws and the laws of the State of New York,
directors of each class are elected by a majority of the votes cast by that
class in the election. Any other matters to be considered as set forth in the
Notice for the Annual Meeting are to be decided by the vote of the holders of a
majority of the votes represented by the shares present in person or represented
by proxy at the Annual Meeting, except as hereafter noted.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of September 30, 1996, the number of
outstanding shares of Class A Common Stock and Class B Common Stock of the
Company beneficially owned by each person known by the Company to be the
beneficial owner of more than 5 percent of the then outstanding shares of Common
Stock:
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
-------------------------------- --------------------------------
NATURE AND NATURE AND
AMOUNT OF PERCENT OF AMOUNT OF
BENEFICIAL CLASS AS BENEFICIAL
OWNERSHIP ADJUSTED OWNERSHIP PERCENT OF
NAME AND ADDRESS(1) (2) (3) (2) CLASS
- ---------------------------------------- --------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Gerhard J. Neumaier* 346,944 14.0% 345,894 18.8%
Frank B. Silvestro* 288,937 11.9% 288,937 15.7%
Ronald L. Frank* 269,976 11.3% 262,394 14.3%
Gerald A. Strobel* 270,796 11.3% 270,796 14.7%
Franklin Resources, Inc. 330,000 15.5% 0 0
<FN>
- ---------------
* See Footnotes in next table
(1) The address for Gerhard J. Neumaier, Frank B. Silvestro, Gerald A. Strobel
and Ronald L. Frank is c/o Ecology and Environment, Inc., 368 Pleasant View
Drive, Lancaster, New York 14086, unless otherwise indicated. The address
for Franklin Resources, Inc. is 777 Mariners Island Blvd., P. O. Box 7777,
San Mateo, California 94403-7777.
(2) Each named individual or corporation are deemed to be the beneficial owners
of securities that may be acquired within 60 days through the exercise of
exchange or conversion rights. The shares of Class A Common Stock issuable
upon conversion by any such shareholder are not included in calculating the
number of shares or percentage of Class A Common Stock beneficially owned by
any other shareholder.
(3) There are 2,130,872 shares of Class A Common Stock issued and outstanding
and 1,837,558 shares of Class B Common Stock issued and outstanding as of
September 30, 1996. The figures in the "as adjusted" columns are based upon
these totals and except as set forth in the preceding sentence, upon the
assumptions described in footnote 2 above.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Class A Common Stock and Class B Common Stock as of
September 30, 1996, by (i) each Director of the Company and (ii) all Directors
and officers of the Company as a group.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
-------------------------------- --------------------------------
NATURE AND NATURE AND
AMOUNT OF PERCENT OF AMOUNT OF
BENEFICIAL CLASS AS BENEFICIAL
OWNERSHIP ADJUSTED OWNERSHIP PERCENT OF
NAME(1) (2)(3) (4) (2)(3) CLASS
- ---------------------------------------- --------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Gerhard J. Neumaier (5)(13) 346,944 14.0% 345,894 18.8%
Frank B. Silvestro(13) 288,937 11.9% 288,937 15.7%
Ronald L. Frank(6)(13) 269,976 11.3% 262,394 14.3%
Gerald A. Strobel(7)(13) 270,796 11.3% 270,796 14.7%
Harvey J. Gross (8) 94,887 4.3% 94,887 5.2%
Gerard A. Gallagher, Jr. 76,987 3.5% 76,646 4.2%
Ralph Bookbinder (9) 18,200 * 17,850 1.0%
Ross M. Cellino (10) 13,206 * 1,050 *
Directors and officers as a
Group(11)(12)
(10 individuals) 1,397,195 39.9% 1,372,043 74.7%
</TABLE>
2
<PAGE> 5
- ---------------
* Less than 0.1%
(1) The address of each of the above shareholders is c/o Ecology and
Environment, Inc., 368 Pleasant View Drive, Lancaster, New York 14086.
(2) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the vote) or sole or
shared investment power (including the power to dispose or direct the
disposition) with respect to a security whether through any contract,
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated, the shareholders identified in this table have sole voting and
investment power of the shares beneficially owned by them.
(3) Each named person and all Directors and officers as a group are deemed to
be the beneficial owners of securities that may be acquired within 60 days
through the exercise of exchange or conversion rights. The shares of Class
A Common Stock issuable upon conversion by any such shareholder are not
included in calculating the number of shares or percentage of Class A
Common Stock beneficially owned by any other shareholder. Moreover, the
table gives effect to only 2,965 shares of Class A Common Stock of the
total 90,710 shares of Class A Common Stock that may be issued pursuant to
the Company's Incentive Stock Option Plan, which may be purchased within
the next 60 days pursuant to vested options granted to one officer.
(4) There are 2,130,872 shares of Class A Common Stock issued and outstanding
and 1,837,558 shares of Class B Common Stock issued and outstanding as of
September 30, 1996. The figure in the "as adjusted" columns are based upon
these totals and except as set forth in the preceding sentence, upon the
assumptions described in footnotes 2 and 3 above.
(5) Includes 525 shares of Class A Common Stock owned by Mr. Neumaier's spouse,
as to which he disclaims beneficial ownership. Includes 525 shares of Class
A Common Stock owned by Mr. Neumaier's Individual Retirement Account. Does
not include any shares of Class A Common Stock or Class B Common Stock held
by Mr. Neumaier's adult children.
(6) Includes 7,850 shares of Class B Common Stock owned by one of Mr. Frank's
children and 5,067 shares of Class A Common Stock owned by one of Mr.
Frank's children as to which he disclaims beneficial ownership. Does not
include any shares of Class A Common Stock or Class B Common Stock held by
Mr. Frank's other adult children. Includes 41,625 shares of Class B Common
Stock owned by Mr. Frank's former spouse as to which he disclaims
beneficial ownership except for the right to vote the shares which he
retains pursuant to an agreement with his former spouse. Includes 515
shares of Class A Common Stock owned by Mr. Frank's individual retirement
account.
(7) Includes 44,226 shares of Class B Common Stock owned in equal amounts by
Mr. Strobel's three children (Mr. Strobel holds 21,171 shares as custodian
for these children), as to which he disclaims beneficial ownership.
(8) Includes an aggregate of 21,047 shares of Class B Common Stock owned by two
trusts created by Mr. Gross of which he and his spouse are the sole
beneficiaries during their lifetimes.
(9) Includes 1,050 shares of Class B Common Stock owned by Mr. Bookbinder's
spouse as to which he disclaims beneficial ownership.
(10) Includes 10,396 shares of Class A Common Stock owned by Mr. Cellino's
spouse, as to which shares he disclaims beneficial ownership; also includes
1,655 shares of Class A Common Stock owned by Mr. Cellino's Individual
Retirement Account.
(11) Does not include 49,932 shares (19,475 shares of Class A Common Stock and
30,457 shares of Class B Common Stock) owned by the Company's Defined
Contribution Plan of which Messrs. Gerhard J. Neumaier, Frank, Silvestro
and Strobel constitute four of the five trustees.
(12) Includes 1,181 shares of Class A Common Stock which may be issued upon
exercise of a stock option granted to one officer in July 1988, pursuant to
the Company's Incentive Stock Option Plan; includes 892 shares of Class A
Common Stock which may be issued upon exercise of a stock option granted to
one officer in July 1990, pursuant to the Company's Incentive Stock Option
Plan; includes 892 shares of Class A Common Stock which may be issued upon
exercise of a stock option granted to one officer in September 1991,
pursuant to the Company's Incentive Stock Option Plan; does not include 787
shares of Class A Common Stock which may be issued upon the exercise of a
stock option granted to one officer in November 1992, pursuant to the
Company's Incentive Stock Option Plan; does not include 630 shares of Class
A Common Stock which may be issued upon the exercise of a stock option
granted to one officer in April 1994, pursuant to the Company's Incentive
Stock Option Plan; does not include 600
3
<PAGE> 6
shares of Class A Common Stock which may be issued upon the exercise of a
stock option granted to one officer in December 1994, pursuant to the
Company's Incentive Stock Option Plan; does not include 2,400 shares of
Class A Common Stock which may be issued upon the exercise of stock options
granted to two (2) officers in December 1995, pursuant to the Company's
Incentive Stock Option Plan.
(13) Subject to the terms of the Restrictive Agreement. See "Security Ownership
of Certain Beneficial Owners-Restrictive Agreement".
RESTRICTIVE AGREEMENT
Messrs. Neumaier, Silvestro, Frank and Strobel entered into a Stockholders'
Agreement in 1970 which governs the sale of an aggregate of 1,277,018 shares
Class B Common Stock owned by them and the former spouse of one of the
individuals and the children of the individuals. The agreement provides that
prior to accepting a bona fide offer to purchase all or any part of their
shares, each party must first allow the other members to the agreement the
opportunity to acquire on a pro rata basis, with right of over-allotment, all of
such shares covered by the offer on the same terms and conditions proposed by
the offer.
PROPOSAL 1 -- ELECTION OF DIRECTORS
It is intended that proxies solicited by the Board of Directors will,
unless otherwise directed, be voted to elect the two nominees for Class A
Directors and the six Class B Directors named below. Holders of Class A Common
Stock are not entitled to vote on the election of the Class B Director nominees.
INFORMATION CONCERNING NOMINEES
The nominees proposed for election to the Board of Directors are all
presently members of the Board.
The Class A nominees named herein, if elected as Directors, will hold
office until the next succeeding Annual Meeting of Shareholders and until their
successors are duly elected and qualified. In the event either nominee for Class
A Director becomes unavailable and a vacancy exists, it is intended that the
persons named in the proxy may vote for a substitute who will be recommended by
the remaining Class A Director.
The following table sets forth the names, ages and positions of those
persons nominated by the Board of Directors for election as Directors of the
Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
------------------------- --------- --------------------------------------------------------------
<S> <C> <C>
Gerhard J. Neumaier 59 President and Director
Frank B. Silvestro 59 Executive Vice President and Director
Gerald A. Strobel 56 Executive Vice President of Technical Services and Director
Ronald L. Frank 58 Executive Vice President of Finance, Secretary, Treasurer and
Director
Gerard A. Gallagher, Jr. 65 Senior Vice President of Special Projects and Director
Harvey J. Gross 68 Director
Ralph Bookbinder 65 Director
Ross M. Cellino 64 Director
</TABLE>
Each Director is elected to hold office until the next annual meeting of
shareholders and until his successor is elected and qualified. Executive
officers are elected annually and serve at the discretion of the Board of
Directors.
Mr. Neumaier is a founder of the Company and has served as the President
and a Director since its inception in 1970. Mr. Neumaier has a B.M.E. in
engineering and a M.A. in physics.
Mr. Silvestro is a founder of the Company and has served as a Vice
President and a Director since its inception in 1970. In August 1986, he became
Executive Vice President. Mr. Silvestro has a B.A. in physics and a M.A. in
biophysics.
4
<PAGE> 7
Mr. Strobel is a founder of the Company and has served as a Vice President
and a Director since its inception in 1970. In August 1986, he became Executive
Vice President of Technical Services. Mr. Strobel is a registered Professional
Engineer with a B.S. in civil engineering and a M.S. in sanitary engineering.
Mr. Frank is a founder of the Company and has served as Secretary,
Treasurer, Vice President of Finance and a Director since its inception in 1970.
In August 1986, he became Executive Vice President of Finance. Mr. Frank has a
B.S. in engineering and a M.S. in biophysics.
Mr. Gallagher joined the Company in 1972. In March 1979, he became a Vice
President of Special Projects and in February, 1986 he became a Director. Mr.
Gallagher is in charge of quality assurance for hazardous substance projects. In
August 1986, he became a Senior Vice-President of Special Projects. Mr.
Gallagher has a B.S. in physics.
Mr. Gross has been a Director of the Company since its inception in 1970.
Mr. Gross is an independent insurance broker and a capital financing consultant.
Mr. Bookbinder has been a Director of the Company since its inception in
1970. Mr. Bookbinder is a retired stock broker.
Mr. Cellino has been a Director of the Company since its inception in 1970.
Mr. Cellino is an attorney and counselor-at-law retired from private practice.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended July 31, 1996, the Board of Directors held
four (4) meetings. Each director of the Company attended at least 75% of the
aggregate of (i) the total number of meetings of the Board of Directors and (ii)
the total number of meetings of the committees of the Board of Directors in
which he served during the period for which he served.
The Board of Directors has an Audit Committee and a Pension Review
Committee. All decisions with respect to compensation of executive officers or
nominations are made by the Board of Directors as a whole.
The Audit Committee consists of Messrs. Gerhard J. Neumaier, Ross M.
Cellino and Harvey J. Gross. The functions of the Audit Committee are to examine
the results of financial statements and reports prepared by the independent
public accountants and make recommendations thereon to the Board of Directors.
During fiscal year 1996, the Committee met one (1) time to examine the results
of the financial statements and reports prepared by the independent public
accountants, and then held discussions with the Board of Directors.
The Pension Review Committee consists of Messrs. Ronald L. Frank, Frank B.
Silvestro, Ross M. Cellino and Harvey J. Gross. The Committee met three (3)
times during the fiscal year 1996. The principal functions of the Pension Review
Committee are to review changes to the retirement plans necessitated by law or
regulation and to determine whether the Company's retirement plans meet the
compensation goals for the Company's employees as established by the Board of
Directors.
COMPENSATION OF DIRECTORS
Each Director who is not an employee of the Company is paid an annual
director's fee of $20,826 per annum. The director's fee is paid quarterly.
COMPENSATION OF EXECUTIVE OFFICERS
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended July 31, 1994, 1995 and 1996 of those persons who were at July 31, 1996
(i) the chief executive officer and (ii) the four other most highly compensated
executive officers with annual salary and bonus for the fiscal year ended July
31, 1996 in excess of $100,000. In this report, the five persons named in the
table below are referred to as the "Named Executives".
5
<PAGE> 8
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------
AWARDS PAYOUTS
--------- ------------
STOCK
ANNUAL COMPENSATION INCENTIVE LONG-TERM ALL
FISCAL -------------------------------- OPTIONS COMPENSATION OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OTHER (SHARES) PAYOUTS (2)
- ---------------------------- ------- -------- --------- ----- --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Gerhard J. Neumaier 1996 $216,632 --0-- --0-- --0-- --0-- 7,611
President and Director 1995 $220,118 $28,200 --0-- --0-- --0-- 12,213
1994 $213,687 $62,000 --0-- --0-- --0-- 12,435
Frank B. Silvestro 1996 $196,949 --0-- --0-- --0-- --0-- 6,841
Executive VP and Director 1995 $200,118 $28,200 --0-- --0-- --0-- 11,149
1994 $194,270 $62,000 --0-- --0-- --0-- 12,375
Ronald L. Frank 1996 $196,949 --0-- --0-- --0-- --0-- 6,841
Executive Vice President 1995 $200,118 $28,200 --0-- --0-- --0-- 11,149
of Finance, Secretary, 1994 $194,270 $62,000 --0-- --0-- --0-- 12,375
Treasurer and Director
Gerald A. Strobel 1996 $196,949 --0-- --0-- --0-- --0-- 6,841
Executive Vice President of 1995 $200,118 $28,200 --0-- --0-- --0-- 11,156
Technical Services 1994 $194,270 $62,000 --0-- --0-- --0-- 12,375
and Director
Gerard A. Gallagher, Jr. 1996 $174,226 --0-- --0-- --0-- --0-- 5,938
Senior Vice President of 1995 $177,268 $20,000 --0-- --0-- --0-- 9,843
Special Projects and
Director 1994 $172,088 $43,900 --0-- --0-- --0-- 11,339
<FN>
- ---------------
(1) Amounts earned for bonus compensation determined by the Board of Directors.
(2) Represents group term life insurance premiums and contributions made by the
Company to its Defined Contribution Plan and Defined Contribution Plan SERP
accruals on behalf of each of the Named Executives.
</TABLE>
None of the Company's executive officers have employment agreements.
COMPENSATION PURSUANT TO PLANS
PENSION PLAN. In September 1995, the Company decided to terminate its
Defined Benefit Pension Plan (the "Pension Plan"). The termination of the
Pension Plan was primarily settled by July 1996.
DEFINED CONTRIBUTION PLAN. The Company maintains a Defined Contribution
Plan ("the DC Plan") which is qualified under the Internal Revenue Code,
pursuant to which the Company contributes an amount not in excess of 15% of the
aggregate compensation of all employees who participate in the DC Plan. All
employees, including the executive officers identified under "Compensation of
Executive Officers", are eligible to participate in the plan, provided that they
have attained age 21 and completed one year of employment with at least 1,000
hours of service. The amounts contributed to the plan by the Company are
allocated to participants based on a ratio of each participant's points to total
points of all participants determined as follows: one point per $1,000 of
compensation plus two points per year of service completed prior to August 1,
1979, and one point for each year of service completed after August 1, 1979.
SUPPLEMENTAL RETIREMENT PLAN. In April 1994, the Board of Directors of the
Company, in response to changes in the tax code, voted to establish a
Supplemental Executive Retirement Plans ("SERP") for purposes of providing
retirement benefits to employees including officers of the Company whose
retirement benefits under the Pension Plan and the DC Plan are reduced as a
result of the $150,000 compensation limitation imposed by the tax code change.
This plan is a non-qualified plan which provides benefits that would have been
lost from the DC Plan due to the imposition of the compensation restriction.
6
<PAGE> 9
INCENTIVE STOCK OPTION PLAN
In February 1986, the Company adopted an Incentive Stock Option Plan (the
"Option Plan") under which key employees, including officers, of the Company
could be granted options to purchase up to an aggregate of 100,000 shares of
Class A Common Stock; the Option Plan terminated in March 1996 and no options
can be granted after that date. During the fiscal year ending July 31, 1990, the
shareholders of the Company authorized an additional 100,000 shares, bringing
the aggregate to 200,000 shares of Class A Common Stock authorized to be issued
under the Plan. The antidilution provisions of the plan resulted in an increase
of 9,390 shares upon distribution of the stock dividend distributed by the
company on August 30, 1994 to shareholders of record on August 1, 1994. The
Board of Directors administers the Option Plan. The Option Plan is designed to
qualify as an "incentive stock option plan" under Section 422A of the Internal
Revenue Code.
The option exercise price must be at least 100% of the fair market value
per share of the Company's Class A Common Stock, as determined by the Board of
Directors on the date of grant. The exercise price may be paid in cash or with
previously owned shares of Class A Common Stock or both. The options are
exercisable commencing after a minimum holding period of not more than ten years
after the date of grant, as determined by the Board of Directors. The exercise
price of options granted to employees possessing more than 10% of the combined
voting power of all classes of capital stock on the effective date of the grant
must be not less than 110% of fair market value on the date of grant, and the
options may not be exercised more than five years after the date of grant. The
Named Executive officers found in the Summary Compensation Table have not been
granted any options pursuant to the Option Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company does not have a separate Compensation Committee. Compensation
of the Company's Executive Officers is considered by the entire Board of
Directors. As members of the Board of Directors Messrs. Gerhard J. Neumaier,
Frank B. Silvestro, Ronald L. Frank, Gerald A. Strobel and Gerard A. Gallagher,
Jr. participate in deliberations and discussions concerning their own
compensation.
7
<PAGE> 10
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The Board of Directors reviews executive officer compensation in an effort
to provide levels of compensation that integrate such compensation with the
Company's annual and long-term performance goals, award individual achievement
and attract and retain qualified executives in the highly competitive industry
in which the Company operates.
Compensation for executive officers consists of salaries and bonuses.
Salaries for executive officers (including the Chief Executive Officer) are
determined by evaluating the officer's performance and contributions to the
performance of the Company, the officer's responsibilities, experience and any
data available which describes the general industry trends, peer group
practices, published survey data and salary structures of similar sized,
profitable competitors.
The Company has adopted and consistently implemented a broad discretionary
performance bonus covering senior technical and management personnel, up to and
including the Chief Executive Officer. A year-end bonus pool is established,
with bonuses then awarded which have historically represented up to 30% of total
cash compensation. Bonuses are awarded to the Company's personnel, including
executive officers, based on their individual performance, industry practices,
and the performance of the Company as a whole.
The performance bonus awarded to the Chief Executive Officer is derived by
an annual award from the Company's overall performance bonus pool which relates
to the Company's performance, long-term objectives, achievements and individual
performance.
The Board of Directors of the Company decided that no bonuses would be
awarded during the fiscal year ending July 31, 1996, and that the salaries of
all officers of the Company, including the named Executive Officers, would be
reduced by four percent (4%).
Respectively Submitted,
THE BOARD OF DIRECTORS
Gerhard J. Neumaier
Frank B. Silvestro
Gerald A. Strobel
Ronald L. Frank
Gerard A. Gallagher, Jr.
Harvey J. Gross
Ralph Bookbinder
Ross M. Cellino
8
<PAGE> 11
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
The following graph demonstrates the annual percentage change in the
Company's cumulative total shareholder return against the total return of the
companies listed on the American Stock Exchange (the "AMEX Market Index") and a
peer group consisting of Dames & Moore, Inc., EA Engineering Science and
Technology, Inc., EMCON, Inc., Harding Associates, Inc., ICF Kaiser
International, Inc., TRC Companies, Inc., URS Consultants, Inc., Versar, Inc.
and Roy F. Weston, Inc. (Class A Stock) (collectively the "Peer Group").
<TABLE>
<CAPTION>
ECOLOGY & AMEX MARKET
COMPANY ENVIRONMENT A PEER GROUP INDEX INDEX
<S> <C> <C> <C>
1991 100 100 100
1992 82.16 72.64 107.85
1993 96.60 64.45 117.77
1994 72.66 54.59 120.70
1995 56.72 51.16 146.38
1996 54.56 43.19 149.82
</TABLE>
*Assumes $100 invested on August 1, 1991 and dividends reinvested through the
fiscal year ending July 31, 1996.
9
<PAGE> 12
PROPOSAL 2 -- APPOINTMENT OF PRICE WATERHOUSE
AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANT
Price Waterhouse, independent certified public accountants, is the auditor
of the Company's records. The Board of Directors wishes to continue the services
of this firm for the fiscal year ending July 31, 1997 and the shareholders'
ratification of such appointment is requested.
Representatives of Price Waterhouse will attend the Annual Meeting, will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
OTHER MATTERS
The cost of solicitation of proxies will be borne by the Company.
Solicitation other than by mail may be made by officers or by regular employees
of the Company, who will receive no additional compensation therefor, by
personal or telephone solicitation, the cost of which is expected to be nominal.
It is not contemplated or expected that any business other than that
pertaining to the subjects referred to in this Proxy Statement will be brought
up for action at the meeting. At the time this Proxy Statement went to press,
the Board of Directors did not know of any other matter which may properly be
presented for action at the meeting.
Proposals of shareholders intended to be presented at the next Annual
Meeting of Shareholders must be received by the Secretary, Ecology and
Environment, Inc., 368 Pleasant View Drive, Lancaster, New York, 14086, no later
than August 19, 1997.
By order of the Board of Directors,
ECOLOGY AND ENVIRONMENT, INC.
Ronald L. Frank
Secretary
10
<PAGE> 13
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
ECOLOGY AND ENVIRONMENT, INC.
368 Pleasant View Drive
Lancaster, New York 14086
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gerhard J. Neumaier and Ronald L. Frank as
Proxies, each with the power to appoint his substitute, and hereby authorizes
either of them to represent and to vote, as designated below, all the shares of
Class B Common Stock of Ecology and Environment, Inc. held of record by either
of the undersigned on December 2, 1996, at the Annual Meeting of Shareholders to
be held on January 16, 1997, or any adjournments thereof.
1. ELECTION OF CLASS B DIRECTORS [ ] FOR all nominees listed below
(except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY to vote for
all nominees listed below.
Gerhard J. Neumaier Frank B. Silvestro Gerald A. Strobel
Ronald L. Frank Gerard A. Gallagher, Jr. Harvey J. Gross
(INSTRUCTION: To withhold authority to vote for any individual nominee's name,
write that nominee's name in the space provided below.)
_______________________________________________________________________________
2. The appointment of Price Waterhouse as independent accountants.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
<PAGE> 14
-2-
Please sign exactly as name appears below. 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 its President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: ___________________, 19___
_________________________________
Signature
_________________________________
Signature if held jointly
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
<PAGE> 15
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
ECOLOGY AND ENVIRONMENT, INC.
368 Pleasant View Drive
Lancaster, New York 14086
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gerhard J. Neumaier and Ronald L. Frank as
Proxies, each with the power to appoint his substitute, and hereby authorizes
either of them to represent and to vote, as designated below, all the shares of
Class A Common Stock of Ecology and Environment, Inc. held of record by either
of the undersigned on December 2, 1996, at the Annual Meeting of Shareholders
to be held on January 16, 1997, or any adjournments thereof.
1. ELECTION OF CLASS A DIRECTORS [ ] FOR all nominees listed
below (except as marked
to the contrary below)
[ ] WITHHOLD AUTHORITY to
vote for all nominees
listed below.
Ralph Bookbinder Ross M. Cellino
(INSTRUCTION: To withhold authority to vote for any individual nominee's name,
write that nominee's name in the space provided below.)
_______________________________________________________________________________
2. The appointment of Price Waterhouse as independent accountants.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
<PAGE> 16
-2-
Please sign exactly as name appears below. 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 for and by its President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Dated: __________________, 19__
________________________________
Signature
________________________________
Signature if held jointly
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
