<PAGE>
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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 Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CLEAN HARBORS, INC.
---------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CLEAN HARBORS, INC.
---------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
---------------------------
2) Aggregate number of securities to which transaction applies:
---------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
---------------------------
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:
---------------------------
Notes:
No preliminary filing was made, because the only matters to be acted upon are
the election of directors.
The proxy statement does not include either the Long-Term Incentive Plan
Awards Table or the Pension Plan Table specified in Item 402(e) and (f),
respectively, because the Company does not have a "long-term incentive plan"
as defined in Item 402(a)(7)(iii) or a pension plan other than a 401(k) plan.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
[CLEAN HARBORS STATIONERY]
[COVER LETTER FROM THE CHAIRMAN OF THE BOARD]
CORPORATE HEADQUARTERS
1501 WASHINGTON STREET
BRAINTREE, MASSACHUSETTS 02184
TEL. 617-849-1800
To Our Fellow Stockholders:
On behalf of the Board of Directors, it is my pleasure to invite you to
attend the 1996 Annual Meeting of Stockholders, to be held on Monday, June 17,
1996 in Boston, Massachusetts.
Information about the Annual Meeting is presented on the following pages. In
addition to the formal items of business, the meeting will include a report by
members of management on Company operations. You will have an opportunity to
ask questions of our management team if you attend the meeting in person.
Your vote is important. You can be sure your shares are represented at the
meeting by completing, signing, and returning your proxy form in the enclosed
envelope, even if you plan to attend the meeting. Sending in your proxy will
not prevent you from voting in person at the meeting should you wish to do so.
Thank you for your continued support of Clean Harbors. We look forward to
seeing those stockholders who are able to attend the Annual Meeting on June
17.
Sincerely,
/s/ Alan S. McKim
Alan S. McKim
Chairman of the Board
- --------------------------
PEOPLE AND TECHNOLOGY
PROTECTING & RESTORING
AMERICA'S ENVIRONMENT
<PAGE>
CLEAN HARBORS, INC.
1501 WASHINGTON STREET
BRAINTREE, MASSACHUSETTS 02184
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
Notice is hereby given that the Annual Meeting of Stockholders of Clean
Harbors, Inc. (the "Company"), will be held at 9:30 a.m., local time, on
Monday, June 17, 1996, at the Swissotel, One Avenue de Lafayette, Boston,
Massachusetts, for the following purposes:
1. To elect three (3) Class I members of the Board of Directors of the
Company to serve until the 1999 Annual Meeting of Stockholders and until
their respective successors are duly elected; and
2. To consider and act upon such other business as may properly come
before the meeting and any adjournment thereof.
Stockholders of record at the close of business on May 1, 1996 will be
entitled to notice and to vote at the meeting.
You are cordially invited to attend the meeting. Whether or not you plan to
attend the meeting in person, please date, sign and mail your proxy in the
enclosed envelope to ensure that your shares will be represented at the
meeting.
By order of the Board of Directors
/s/ C. Michael Malm
C. Michael Malm, Clerk
May 1, 1996
Boston, Massachusetts
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.
<PAGE>
CLEAN HARBORS, INC.
1501 WASHINGTON STREET
BRAINTREE, MA 02184
----------------
PROXY STATEMENT
----------------
This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders are being furnished in connection with the solicitation of proxies
by the Board of Directors of Clean Harbors, Inc., a Massachusetts corporation
(the "Company"), for use at the Annual Meeting of Stockholders of the Company
to be held at the Swissotel, One Avenue de Lafayette, Boston, Massachusetts, on
June 17, 1996, commencing at 9:30 a.m., local time, and any adjournment
thereof.
PROXY SOLICITATION
Proxies in the accompanying form, properly executed and received prior to the
meeting and not revoked, will be voted as specified or, if no instructions are
given, will be voted in favor of the proposals described herein. Proxies may be
revoked at any time prior to the meeting by written notice given to the Clerk
of the Company. The cost of this solicitation shall be borne by the Company.
Solicitations of proxies by telephone or in person may be made by the Company's
directors, officers or other employees, but any such solicitation will be
carried on during working hours and for no additional cost, other than the time
expended and telephone charges in making such solicitation. This Proxy
Statement and the accompanying proxy form are scheduled to be mailed to
stockholders beginning on May 3, 1996.
INFORMATION AS TO VOTING SECURITIES
The holders of the Company's Common Stock and Series B Convertible Preferred
Stock vote as a single class with respect to the election of directors and most
other matters. Each issued and outstanding share of the Company's Common Stock,
$.01 par value per share, and each issued and outstanding share of the
Company's Series B Convertible Preferred Stock, $.01 par value per share, is
entitled to one vote. Only stockholders of record at the close of business on
May 1, 1996 will be entitled to vote at the meeting. On April 15, 1996, there
were 9,592,240 shares of Common Stock and 112,000 shares of Series B
Convertible Preferred Stock of the Company outstanding and entitled to vote.
Votes cast by proxy or in person at the Annual Meeting will be counted by
persons appointed by the Company to act as election inspectors for the meeting.
The election of the Class I directors requires the affirmative vote of the
holders of a plurality of the shares of both classes of stock represented at
the meeting. Other matters which may properly come before the meeting will
require the affirmative vote of the holders of a majority of the shares
represented at the meeting. Votes withheld from any nominee for election as a
director, abstentions, and broker "non-votes" are counted as present or
represented for purposes of determining the presence of a quorum for the
meeting. Therefore, abstentions and broker "non-votes" will have the effect of
"against" votes. Broker "non-votes" occur when a nominee holding shares for a
beneficial owner votes on one proposal, but does not vote on another proposal
because the nominee does not have discretionary voting power and has not
received instructions from the beneficial owner. Usually, this would occur when
brokers holding stock in "street name" have not received any instructions from
clients, in which case the brokers (as holders of record) are permitted to vote
on "routine" proposals but not on non-routine matters. The election of
directors is considered a routine matter. Missing votes on non-routine matters
are "broker non-votes."
1
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Alan S. McKim.................. 41 Chairman of the Board of Directors,
President and Chief Executive Officer
Christy W. Bell................ 73 Director
David A. Eckert................ 40 Director and Executive Vice President of the
Company; Chief Operating Officer of Clean
Harbors Environmental Services*
John F. Kaslow................. 63 Director
Daniel J. McCarthy............. 64 Director
John T. Preston................ 46 Director
Lorne R. Waxlax................ 62 Director
Richard Lavoie................. 49 Senior Vice President*
Stephen H. Moynihan............ 40 Vice President and Treasurer
Brian J. House................. 35 Vice President Field Services*
John P. Lawton................. 35 Vice President Sales*
</TABLE>
- --------
*Officer of Clean Harbors Environmental Services, Inc., a wholly-owned
subsidiary of the parent holding company, Clean Harbors, Inc.
Alan S. McKim founded the Company in 1980 and is Chairman of the Board of
Directors, President, and Chief Executive Officer of the Company. He serves as
a director of most of the Company's subsidiaries. Mr. McKim served as
President of the Company and its predecessor from 1980 to 1988. Mr. McKim
holds an MBA from Northeastern University. He has been a director of the
Company since its formation. His current term as a Class I director expires
this year, and he is standing for reelection for a three-year term.
Christy W. Bell was Chairman of the Board of ChemClear Inc., a public
company which was primarily engaged in the business of treating industrial,
aqueous waste at its plants in Baltimore, Cleveland, and Chicago, for more
than five years prior to its merger into a subsidiary of the Company in 1989.
Mr. Bell had also served as President of ChemClear prior to the merger. Mr.
Bell is President and an owner of Electro-Petroleum, Inc., Electro-Pyrolysis,
Inc., and Arc Technologies, Inc., all of which are involved in the development
of technologies for the management of waste and the production of energy. He
is also a director of Thoratec Laboratories Corporation. Mr. Bell has served
as a director of the Company since the ChemClear merger in 1989. His current
term as a Class III director expires in 1998.
David A. Eckert joined the Company as Executive Vice President in March 1996
and was appointed by the Board to serve as a Class I director. He also serves
as Chief Operating Officer of Clean Harbors Environmental Services, Inc. From
1991 until joining Clean Harbors, Mr. Eckert was Co-Chairman and Co-Chief
Executive Officer of SV Corporation, an industrial valve manufacturing
company. From 1988 through 1991 he was co-founder, Managing Director and
President of Cornerstone Partners Limited, which invested in under performing
companies. From 1979 through 1988, he served as a consultant and partner with
Bain & Company, an international consulting firm. Mr. Eckert holds a BS
degree, with highest distinction, from Northwestern University and an MBA from
the Harvard Business School where he was a Baker Scholar and a Loeb, Rhoades
Fellow. As a Class I director, Mr. Eckert is standing for election for a
three-year term.
John F. Kaslow serves as Executive Director of the Northeast Region for the
Electric Power Research Institute ("EPRI"), a collaborative research
organization which provides advanced science and technology to its member
companies and their customers. Prior to joining EPRI, Mr. Kaslow served for 34
years with an electric utility company, the New England Electric System
("NEES"), where
2
<PAGE>
he held a number of engineering, operating and general management positions,
including serving prior to his retirement as a director, Executive Vice
President and Chief Operating Officer of NEES, and as a director and President
of its New England Power Company subsidiary. Mr. Kaslow is a director of Doble
Engineering Company, which designs and manufactures electric test equipment.
He has served as a director of the Company since 1991, his current term as a
Class I director expires this year, and he is standing for reelection for a
three-year term.
Daniel J. McCarthy has been a Professor of Strategic Management at
Northeastern University since July 1972, prior to which he was President of
Computer Environments Corporation, a computer services company. He serves as a
director and on the Finance Committee of Tufts Associated Health Plan, a
health maintenance organization, and as a director and on the Compensation
Committee of MANAGEDCOMP, Inc., which manages worker's compensation for
employers. Mr. McCarthy holds an MBA degree from Dartmouth College and a DBA
degree from Harvard Business School. He has served as a director of the
Company since 1987. His current term as a Class III director expires in 1998.
John T. Preston is President and Chief Executive Officer of Quantum Energy
Technologies. From 1992 through 1995, he served as Director of Technology
Development at the Massachusetts Institute of Technology. From 1986 to 1992 he
was Director of the M.I.T. Technology Licensing Office. Previously, Mr.
Preston was a founder of Visual Communication Network and Associate Director
of the M.I.T. Industrial Liaison Program. He holds an MBA from Northwestern
University and a BS in Physics from the University of Wisconsin. He is a
member of a number of government advisory panels and corporate boards,
including Molten Metal Technology, Inc. and Energy BioSystems Corporation,
which are public companies pioneering the application of technology to address
environmental concerns. Prior to joining the Board of the Company, Mr. Preston
served on the board of Clean Harbors Technology Corporation. He accepted an
appointment to fill a vacancy on the Board of Directors of the Company in
March 1995, and his term as a Class II director expires in 1997.
Lorne R. Waxlax served as Executive Vice President of The Gillette Company
from 1985 to 1993, with worldwide responsibility for Braun AG, Oral-B
Laboratories, and Jafra Cosmetics International. He is a director of Waban
Inc., HON Industries Inc., Quaker State Corporation and AMTROL Inc., which are
public companies, and The Iams Company, a private company. Mr. Waxlax holds an
MBA degree from Northwestern University. He has served as a director of the
Company since 1994 and his current term as a Class II director expires in
1997.
Richard Lavoie joined Clean Harbors Environmental Services in May 1995 as
Senior Vice President for Treatment, Transportation and Disposal Services. In
this capacity, Mr. Lavoie has responsibility for overall management of the
treatment, transportation, disposal and lab pack ("CleanPack") business of the
Company. Prior to joining Clean Harbors, Mr. Lavoie was Executive Vice
President of the Western Region of the Chemical Group of Philip Environmental,
Inc. based in Seattle, Washington. From 1990 to 1994 he was employed by the
Safety Kleen Corp. in various management positions. In his last position at
Safety Kleen, he was Divisional Vice President, Environsystems. Mr. Lavoie is
a graduate of Assumption College.
Stephen H. Moynihan has served as an officer of either the Company or one or
more of its subsidiaries since June 1987. In November 1995 he was appointed
Vice President and Treasurer of the Company. Mr. Moynihan served as Vice
President of Strategic Planning of Clean Harbors Environmental Services from
1990 until 1995. Prior to joining Clean Harbors, Mr. Moynihan was Audit
Manager for Gerald T. Reilly and Company, a public accounting firm. Mr.
Moynihan holds a BS degree in Accounting from Bentley College.
Brian J. House is a Vice President of Clean Harbors Environmental Services
responsible for all field service operations. He has served in this capacity
since 1994. Mr. House joined the Company in
3
<PAGE>
1985 and has served in a variety of operations positions. In 1988 he was
appointed General Manager of the Connecticut Field Service Operation, and in
1992 he was appointed Regional Vice President for the Northeast Region. Mr.
House received a BS degree from Bates College.
John P. Lawton is a Vice President of Clean Harbors Environmental Services
responsible for marketing, sales and service for all Company subsidiaries. Mr.
Lawton joined the Company in 1988 as a Customer Service Account Manager at its
Braintree facility. In 1989, he became Sales Manager for the Midwest region.
In 1992, he became Director of Sales for all service areas outside New
England. Mr. Lawton held various management positions with New York Air and
Pan American World Airlines from 1983 to 1988 before joining the Company. He
received a BA degree from North Adams State College.
Set forth below is information as to ownership of the Company's Common Stock
as of April 15, 1996 by each director of the Company, each of the executive
officers named in the Summary Compensation Table set forth below, and by all
directors and executive officers as a group. No director or executive officer
owns any Series B Convertible Preferred Stock. Except as otherwise indicated
below, the named owner has sole voting and investment power with respect to
the specified shares.
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
- ------------------------ ----------------------- --------
<S> <C> <C>
Alan S. McKim................................ 3,630,462(2) 37.8%
Christy W. Bell.............................. 52,352 *
David A. Eckert.............................. -- *
John F. Kaslow............................... 4,300 *
Daniel J. McCarthy........................... 18,200(3) *
John T. Preston.............................. 3,200 *
Lorne R. Waxlax.............................. 36,208 *
Richard Lavoie............................... 8,000 *
Stephen H. Moynihan.......................... 32,389 *
Brian J. House............................... 10,600 *
John T. Lawton............................... 7,875 *
All current directors and executive officers
as a group (11 persons)..................... 3,803,586 39.6%
</TABLE>
- --------
*Less than 1%
(1) Beneficial ownership has been determined in accordance with Securities and
Exchange Commission regulations and includes the following number of
shares of the Company's Common Stock which may be acquired under stock
options which are exercisable within 60 days of April 1, 1996: Mr. Kaslow
(4,000 shares), Mr. Waxlax (3,208 shares), Mr. McCarthy (18,000 shares),
Mr. Bell (5,000 shares), Mr. Preston (3,200 shares), Mr. Lavoie (8,000
shares), Mr. Moynihan (11,889 shares), Mr. House (10,600 shares), Mr.
Lawton (7,875 shares), and all current directors and executive officers as
a group (71,772 shares).
(2) Excludes 60,000 shares owned by a trust for Mr. McKim's minor children as
to which Mr. McKim holds no voting or investment power.
(3) Includes 200 shares owned by Mr. McCarthy's son as to which Mr. McCarthy
shares voting and investment power.
4
<PAGE>
To the Company's knowledge, as of April 1, 1996, no person or entity
"beneficially owned" (as that term is defined by the Securities and Exchange
Commission) 5% or more of the Company's Common Stock or Series B Convertible
Preferred Stock, except as shown in the following table. Except as otherwise
indicated below, the Company understands that the named person or entity has
sole voting and investment power with respect to the specified shares. The
holders of the Company's Common Stock and Series B Convertible Preferred Stock
vote as a single class with respect to the election of directors and most other
matters.
<TABLE>
<CAPTION>
PERCENT AND
NAME AND ADDRESS NUMBER OF SHARES CLASS OF STOCK
---------------- ---------------- ---------------------
<S> <C> <C>
Alan S. McKim........... 3,630,462(1) 37.85% Common Stock
Clean Harbors, Inc.
1501 Washington St.
Braintree, MA 02184
Brinson Partners, Inc... 881,700(2) 9.19% Common Stock
Brinson Trust Company
c/o Brinson Holdings,
Inc.
209 South LaSalle
Chicago, IL 60604
Dimensional Fund Advi- 503,400(2)(3) 5.25% Common Stock
sors, Inc..............
1299 Ocean Avenue
Santa Monica, CA 90401
Froley, Revy Investment 67,000 59.82% Series B
Company, Inc...........
10900 Wilshire Blvd. Convertible
Los Angeles, CA 90024 Preferred Stock
Morgan Guaranty Trust 42,000 37.50% Series B
Co. of New York........
23 Wall Street Convertible
New York, NY 10015 Preferred Stock
</TABLE>
- --------
(1) Excludes 60,000 shares owned by a trust for Mr. McKim's minor children as
to which Mr. McKim holds no voting or investment power.
(2) Based upon ownership as of December 31, 1995 shown on Schedule 13G filed
with the Company by the specified entities in February 1996.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of such shares, which are
held in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, for all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
ELECTION OF DIRECTORS
The Board of Directors of the Company is composed of seven directors
classified into three classes of which Class I consists of three (3) directors
and Classes II and III each consist of two directors. One class of directors is
elected each year for a term of three years. The term of the Class I Directors,
Alan S. McKim, John F. Kaslow and David A. Eckert, shall expire at the 1996
Annual Meeting, and the Board of Directors has nominated each of the foregoing
to continue to serve as Class I Directors.
UNLESS OTHERWISE SPECIFIED THEREIN, SHARES REPRESENTED BY THE ENCLOSED PROXY
WILL BE VOTED AT THE ANNUAL MEETING TO ELECT ALAN S. MCKIM, JOHN F. KASLOW AND
DAVID A. ECKERT AS DIRECTORS
5
<PAGE>
OF THE COMPANY FOR A THREE-YEAR TERM, UNTIL THE 1999 ANNUAL MEETING OF
STOCKHOLDERS AND UNTIL THEIR RESPECTIVE SUCCESSORS SHALL BE DULY ELECTED. IN
THE EVENT THAT ONE OR MORE OF THE NOMINEES IS UNABLE TO STAND FOR ELECTION
(WHICH EVENT IS NOT NOW CONTEMPLATED), THE HOLDERS OF THE ENCLOSED PROXY WILL
VOTE FOR THE ELECTION OF A NOMINEE OR NOMINEES ACCEPTABLE TO THE REMAINING
MEMBERS OF THE COMPANY'S BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL
TO ELECT MESSRS. MCKIM, KASLOW AND ECKERT AS DIRECTORS.
COMPENSATION OF DIRECTORS
According to the Company's Equity Incentive Plan approved by stockholders at
the 1992 Annual Meeting, each director who is not an employee of the Company
receives upon election to the Board a grant of a five-year, non-qualified
stock option to purchase that number of shares of the Company's Common Stock
determined by multiplying 1,000 by the number of years or fraction thereof for
which the director shall be elected, at the market price of the Common Stock
on the date of election, vesting immediately as to the first 1,000 shares of
any award and as to an additional 1,000 shares on each anniversary of the date
of election. Awards to directors appointed to fill a vacancy on the Board for
less than one year are prorated. During 1995, upon election as directors to
serve for a term of three-years, Messrs. McCarthy and Bell each received
options for 3,000 shares at the market price of $3.375 per share.
The Company's policy is to pay each director who is not an employee an
annual retainer fee of $20,000 plus $1,000 for each board meeting attended,
$750 for each committee meeting attended and $500 for board meetings conducted
by telephone conference call. The Company also pays outside directors who are
members of committees of the Board $1,000 for membership on a committee and
$1,500 for serving as chairman of a committee. Directors are reimbursed for
expenses incurred in connection with service on the Board. Total fees paid to
directors in 1995 were as follows: Bell $27,000; Kaslow $29,000; McCarthy
$29,000; Waxlax $28,500; and Preston $25,333.
BOARD COMMITTEES AND MEETINGS
During 1995, the Board of Directors held eight meetings, of which two were
held by conference call and one by written consent.
The Board of Directors has established an Audit Committee consisting of
members of the Board of Directors who are not employed by the Company. During
1995, the Audit Committee consisted of Messrs. Bell, McCarthy and Kaslow. The
primary functions of the Audit Committee are to recommend the selection of
independent public accountants, to review the scope of and approach to audit
work, and to meet with and review the activities of the Company's accountants
and the independent public accountants. During 1995, there were two meetings
of the Audit Committee.
The Board of Directors has also established a Compensation and Stock Option
Committee. During 1995, the Compensation and Stock Option Committee consisted
of three non-employee directors: Messrs. McCarthy, Kaslow and Waxlax. Four
meetings of the Committee were held during 1995.
The Board of Directors has not established a Nominating Committee.
During 1995, all directors attended at least 75 percent of the meetings of
the Board and the committees of which they were members.
6
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation and Stock Option Committee of the Board of Directors (the
"Committee"), consists of three outside directors whose responsibilities
include the recommendation to the full Board of Directors of a compensation
package for the Chief Executive Officer; review and approval of other senior
executive officer compensation; review and approval of corporate management
compensation policies, and management of the Company's stock option and equity
incentive plans.
The fundamental philosophy of the Committee regarding executive compensation
is to offer competitive compensation opportunities and to align individual
compensation with the goals, values and priorities of the Company.
Compensation for executive officers currently consists of three basic
elements: base compensation and benefits, salary "at-risk", and awards of
long-term equity incentives through non-qualified stock options.
Base compensation and benefits for 1995 were determined based upon previous
studies of comparable industry groups. Salary at-risk payments to senior
management were to be derived from a profit pool to be established if the
Company achieved its goal of earnings before interest, taxes, depreciation and
amortization ("EBITDA"). Executives would be eligible to receive a number of
participating shares of the pool based upon the relative potential impact of
their positions. Individuals would then be evaluated by senior management,
based upon ten shared goals, to determine whether they had earned their full
shares. The 1995 salary at-risk pool for senior management was not funded
because the Company failed to achieve its EBITDA goal. Notwithstanding the
Company's failure to meet its EBITDA goal in a difficult market, a few
selective individual bonuses were paid for 1995 based upon individual
performance.
The final element of compensation for executive officers is long-term equity
incentives through grants of non-qualified stock option awards at the market
price of the Company's Common Stock. Awards are designed to align the
interests of executive officers with those of stockholders of the Company and
to encourage long-term retention of executives through periodic vesting of
options, most of which vest as to 20% at the end of each successive year of
service. Options were awarded in December 1995 to 87 employees of the Company.
The amount of individual awards ranged from 2,000 to 10,000 shares based upon
the individual's position and ability to positively impact Company results,
adjusted according to his or her performance rating. The Chief Executive
Officer, Alan S. McKim, did not receive any options during 1995.
Base compensation of the Chief Executive Officer, Alan S. McKim, was
increased by the Compensation Committee in the Spring of 1993 from $250,000 to
$300,000. Mr. McKim, however, has voluntarily continued to defer the
implementation of such increase. Salary at risk payable to Mr. McKim for 1995
was to be based upon the Company's achievement of a base line EBITDA goal and
various individual goals established with the Committee. Because the Company
failed to achieve its EBITDA threshold, Mr. McKim did not receive any bonus
for 1995.
Members of the Committee
John F. Kaslow
Daniel J. McCarthy
Lorne R. Waxlax
7
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation information for the Chief
Executive Officer and the four other most highly compensated executive
officers of the Company and its subsidiaries who were serving as executive
officers at the end of 1995. The table also includes two additional executive
officers (Messrs. Pitts and Hemans) who are no longer with the Company but are
included because total salary and bonus paid to them during the year made them
among the highest paid executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION(1)
------------------
AWARDS PAYOUTS
---------- -------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION OPTIONS ALL OTHER
------------------------------- GRANTED COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER (SHARES) SATION(2)
- --------------------------- ---- -------- ------- -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan S. McKim 1995 $250,008 $ -- $ 384 -- -- $1,000
Chairman of 1994 250,008 -- -- -- -- 1,000
the Board, 1993 250,008 -- -- -- -- 1,000
President and
Chief
Executive
Officer
James A. 1995 $214,000 $ -- $ 1,584 -- -- $1,000
Pitts(3) 1994 214,000 36,000 -- 50,000 -- 1,000
Executive Vice 1993 147,833 58,000(4) -- 7,500 -- 750
President
Finance and
Administration,
Treasurer and
Chief
Financial
Officer
Lawton T. 1995 $150,000 $25,000(4) $ 49,502(5) -- -- $1,000
Hemans II(6) 1994 125,577 -- 17,433(5) 47,500 -- --
Senior Vice
President,
Clean Harbors
Environmental
Services, Inc.
Richard Lavoie 1995 $119,481(7) $ -- $114,623(7) 50,000 -- $ --
Senior Vice
President,
Clean Harbors
Environmental
Services, Inc.
Stephen H. 1995 $130,800 $ -- $ 264 7,000 -- $1,000
Moynihan
Vice President
and Treasurer
Brian J. House 1995 $126,206 $ -- $ 210 7,000 -- $1,000
Vice President 1994 107,236 -- 178 5,000 -- 1,000
Field
Services,
Clean Harbors
Environmental
Services, Inc.
John T. Lawton 1995 $107,187 $ -- $ 205 7,000 -- $1,000
Vice 1994 107,812 -- 169 9,000 -- 1,000
President,
Sales, Clean
Harbors
Environmental
Services,
Inc.
</TABLE>
8
<PAGE>
- --------
(1) No restricted stock or stock appreciation rights were awarded during 1995,
or held at the end of 1995. The Company does not have a long-term
incentive plan, and there were no long-term incentive plan payouts during
1995.
(2) Consists of employer contribution to 401(k) plan. The Company does not
provide any pension benefits other than the 401(k) plan.
(3) Mr. Pitts resigned from active employment with the Company on December 31,
1995.
(4) Bonus paid pursuant to employment agreement, which specified a minimum
bonus for his first full year of employment.
(5) Relocation expenses.
(6) Mr. Hemans joined the Company in March 1994 and resigned from active
employment on October 19, 1995.
(7) Mr. Lavoie joined the Company in May 1995. During 1995, he received a
relocation allowance of $111,207 and a car allowance of $3,010.
9
<PAGE>
OPTIONS
The following table illustrates the hypothetical value of stock options
granted to the individuals named in the Summary Compensation Table during 1995,
based on assumed annual growth rates of 5% and 10% in the value of the
Company's stock price over the life of the stock options. The amounts set forth
under "Potential Realizable Value at Assumed Annual Rates of Stock Price
Appreciation for Option Term" reflect required disclosures pursuant to
regulations of the Securities and Exchange Commission. The actual value to be
realized, if any, could be more or less than the assumed values depending upon
the performance of the stock. Under the terms of the Company's Stock Option and
Equity Incentive Plans, the Compensation and Stock Option Committee retains
discretion, subject to plan limits, to modify the terms of outstanding options
and to reprice the options. No stock appreciation rights were awarded during
1995.
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
------------------------------------------ ----------------------------
PERCENT
NUMBER OF OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES PRICE PER EXPIRATION 5% ANNUAL 10% ANNUAL
NAME GRANTED IN 1995 SHARE(1) DATE GROWTH RATE GROWTH RATE
---- ---------- ---------- --------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alan S. McKim...... -- -- $ -- -- $ -- $ --
Richard Lavoie.......... 40,000 11.12% 3.375 5/12/05 84,901 215,155
10,000 2.78 3.00 12/9/05 18,867 47,812
Stephen H. Moynihan..... 7,000 1.95 3.00 12/9/05 13,207 33,469
Brian J. House.......... 7,000 1.95 3.00 12/9/05 13,207 33,469
John T. Lawton.......... 7,000 1.95 3.00 12/9/05 13,207 33,469
James A. Pitts.......... -- -- -- -- -- --
Lawton T. Hemans, II.... -- -- -- -- -- --
</TABLE>
- --------
(1) The exercise prices of the options granted are equal to the fair market
value of the Common Stock on the date each option was granted.
(2) All options have a ten-year term. All options vest over five years and are
exercisable as to 20% of shares on the first anniversary of the date of
grant and as to an additional 20% on each anniversary date thereafter.
10
<PAGE>
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table shows for the individuals named in the Summary
Compensation Table the aggregate number of options exercised, the value
realized (market value of underlying shares on exercise minus the exercise
price), the number of unexercised options held by each individual at year-end,
and the value of unexercised in-the-money options at year-end. The high and
low sales prices of the Company's Common Stock in 1995 were $5.50 and $2.375,
respectively. The last sale price at year-end was $2.50. No stock appreciation
rights were exercised during 1995 or held by such individuals at year-end.
OPTION EXERCISES IN 1995
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OF SHARES OPTIONS AT YEAR-END YEAR-END
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alan S. McKim........... -- $ -- -- -- $ -- $ --
James A. Pitts.......... -- -- 49,833 44,500 0 0
Lawton T. Hemans II..... -- -- 9,500 38,000 0 0
Richard Lavoie.......... -- -- 0 50,000 0 0
Stephen H. Moynihan..... -- -- 11,289 30,155 0 0
Brian J. House.......... -- -- 8,200 19,200 0 0
John T. Lawton.......... -- -- 5,875 19,200 0 0
</TABLE>
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Mr. Pitts, who served as Executive Vice President of Finance and
Administration, Treasurer and Chief Financial Officer, retired from active
employment with the Company effective as of the end of 1995. According to his
severance arrangement, Mr. Pitts is to continue to receive his 1995 annual
compensation and benefits until January 1, 1997 or such earlier date as he may
obtain full-time employment. In addition, Mr. Pitts is to receive outplacement
services and secretarial support up to a maximum cost to the Company of
$32,100. Options held by Mr. Pitts will expire on April 1, 1997.
The Company provides "change of control" protection under stock option
agreements awarded to executive officers. Some of those agreements provide
that options will automatically fully vest upon a change of control, while
others provide that if an employee is involuntarily terminated or experiences
a change of position and a reduction in salary or relocation within twelve
months of a change of control, the employee's options become fully vested.
11
<PAGE>
PERFORMANCE GRAPH
The following graph compares the five-year return from investing $100 on
December 31, 1990 in each of Clean Harbors, Inc. Common Stock, the NASDAQ
Market Index of companies, and an index of environmental services companies,
compiled by Media General Financial Services, Inc. The environmental services
group used by Media General Financial Services, Inc. includes all companies
whose listed line-of-business is SIC Code 4953 (refuse systems), and assumes
reinvestment of dividends on the ex-dividend date. An index compares relative
performance since a particular starting date. In this instance, the starting
date is December 31, 1990, when the Company's Common Stock price closed at
$6.25 per share.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
- --------------------------------FISCAL YEAR ENDING-------------------
COMPANY 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
CLEAN HARBORS INC 100 180.00 192.00 114.00 63.00 40.00
INDUSTRY INDEX 100 104.59 98.72 71.81 67.59 80.62
BROAD MARKET 100 128.38 129.64 155.50 163.26 211.77
</TABLE>
CERTAIN TRANSACTIONS
In March 1986, Mr. McKim acquired a 25% limited partnership interest in Wood
Road Associates Limited Partnership which owns property leased to the Company.
The other 75% interest in the partnership is owned by individuals unrelated to
the Company or to Mr. McKim. The lease, executed in March 1986, expires in
July 1996. The Company has elected not to renew its lease and will be moving
from this location starting in May of this year. The lease provides for the
rental of 42,078 square feet of office and laboratory space at an initial
monthly rental of $47,350, subject to annual cost of living adjustments. The
Company believes that the property was leased at its fair rental value.
The Company's subsidiaries currently have a $45,000,000 revolving credit and
term loan agreement (the "Loan Agreement") with Congress Financial Corporation
(New England) (the "Lender"). The Loan Agreement provides for a maximum level
of borrowings at any time which is dependent upon the maintenance of certain
ratios specified in the Loan Agreement. Borrowings are
12
<PAGE>
secured by substantially all of the assets of the Company and its
subsidiaries. Under a cash collateral agreement with the Lender, dated
November 21, 1995, Mr. McKim pledged $2 million cash as additional collateral
in the event that the Company needed to make additional borrowings than were
allowed under the Loan Agreement. In consideration for the pledge of such
additional collateral, the Lender agreed to increase the availability of
borrowings by $4 million, reducing to $2 million on January 29, 1996. Although
Mr. McKim was entitled to receive the interest earned upon the pledged cash,
he otherwise received no consideration for providing the additional
collateral. The cash collateral agreement provided that, as long as the
Company's subsidiaries were not then in default of their obligations under the
Loan Agreement, Mr. McKim could withdraw the cash collateral at any time upon
three days' prior written notice. The Company and its subsidiaries have
determined that they no longer need the additional borrowing capacity which
was made available to them as a result of Mr. McKim's pledge, and Mr. McKim
therefore withdrew all of the cash collateral on March 31, 1996.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than
10% of a registered class of the Company's equity securities, to file reports
of ownership and changes of ownership with the Securities and Exchange
Commission. Copies of those reports are to be furnished to the Company. Based
solely on its review of copies of the reports received by it, or written
representations from certain reporting persons, the Company believes that
during 1995 all such filing requirements were satisfied on a timely basis
except for a late filing of a Form 5 by Daniel McCarthy and a late filing of a
Form 3 by Richard Lavoie.
INDEPENDENT ACCOUNTANTS
The Company's independent public accountants will be selected by the Board
of Directors at its meeting following the Annual Meeting of Stockholders. The
Board of Directors anticipates that it will select Coopers & Lybrand to serve
as the Company's independent public accountants for the year ending December
31, 1996. Coopers & Lybrand has served as the Company's independent public
accountants since the fiscal year ended February 28, 1990. Representatives of
Coopers & Lybrand are expected to be present at the Annual Meeting to respond
to appropriate questions and will have the opportunity to make a statement if
they so desire.
STOCKHOLDER PROPOSALS
Proposals which qualified stockholders intend to present at the 1997 Annual
Meeting must be received by the Company for inclusion in the Company's proxy
statement and form of proxy relating to that meeting no later than December
31, 1996.
13
<PAGE>
OTHER MATTERS
THE COMPANY FILES AN ANNUAL REPORT WITH THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K WHICH INCLUDES ADDITIONAL INFORMATION ABOUT THE
COMPANY. A COPY OF THE FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES, MAY BE OBTAINED WITHOUT CHARGE, AND COPIES OF
THE EXHIBITS WHICH ARE LISTED THEREIN WILL BE FURNISHED UPON PAYMENT OF THE
COMPANY'S COSTS OF REPRODUCTION AND MAILING OF SUCH EXHIBITS. ALL SUCH
REQUESTS SHOULD BE DIRECTED TO STEPHEN H. MOYNIHAN, VICE PRESIDENT, CLEAN
HARBORS, INC., P.O. BOX 327, BRAINTREE, MASSACHUSETTS 02184, TELEPHONE (617)
849-1800, EXT. 4450.
Except for the matters set forth above, management knows of no other matter
which is to be brought before the meeting, but if any other matter shall
properly come before the meeting, it is the intention of the persons named in
the accompanying form of proxy to vote such proxy in accordance with their
judgment on such matter.
By Order of the Board of Directors,
/s/ C. Michael Malm
C. Michael Malm, Clerk
May 1, 1996
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE ANNUAL
MEETING. REGARDLESS OF WHETHER YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE,
DATE, SIGN, AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A
PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING,
AND YOUR COOPERATION WILL BE APPRECIATED. STOCKHOLDERS WHO ATTEND THE ANNUAL
MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR
PROXIES.
14
<PAGE>
APPENDIX
Form of Proxy Card
- --------------------------------------------------------------------------------
CLEAN HARBORS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Alan S. McKim and Stephen H. Moynihan, and each
of them acting solely, with full power of substitution, as the true and lawful
attorney-in-fact and proxy for the undersigned to vote all shares of stock of
Clean Harbors, Inc. (the "Company") which the undersigned is entitled to vote at
the Annual Meeting of Stockholders to be held at 9:30 a.m., local time, on
Monday, June 17, 1996, at the Swissotel, One Avenue de Lafayette, Boston,
Massachusetts, or any adjournment thereof, hereby revoking any proxies
heretofore given. Each such proxy is hereby directed to vote upon the matters
set forth on the reverse side hereof and, in his own discretion, upon such other
matters as may properly come before the meeting.
(To be Signed on Reverse Side)
- --------------------------------------------------------------------------------
Please mark
votes as in [X]
this example.
Election of Directors: FOR WITHHELD Nominees: Alan S. McKim
[_] [_] John F. Kaslow
David A. Eckert
For, except vote withheld from the following
nominee:_________________________________________
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREON.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL
DIRECTORS.
Signature:_______________________________ Date:____________________________
Note: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
- --------------------------------------------------------------------------------
