<PAGE>
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 Rule 14a-6(e)(2)
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14(a)-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 ] No fee required.
[ ] 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) Filing Party:
--------------------------------------------------------------------
3) Date Filed:
--------------------------------------------------------------------
Notes:
No preliminary filing was made, because the only matters to be acted upon are
routine matters as defined in Rule 14a-6.
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>
[LOGO]
Corporate Headquarters
1501 Washington Street
Braintree, Massachusetts 02184
Tel. 781-849-1800
May 1, 1998
To Our Fellow Stockholders:
On behalf of the Board of Directors, it is my pleasure to invite you to attend
the 1998 Annual Meeting of Stockholders, to be held on Wednesday, June 17, 1998
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
[LOGO]
- ----------------------------
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
Wednesday, June 17, 1998, at Swissotel, 1 Avenue de Lafayette, Boston,
Massachusetts, for the following purposes:
1. To elect two (2) Class III members of the Board of Directors of the
Company to serve until the 2001 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, 1998 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, 1998
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 Swissotel, 1 Avenue de Lafayette, Boston, Massachusetts, on June 17,
1998, 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 5, 1998.
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, 1998
will be entitled to vote at the meeting. On April 1, 1998, there were 10,195,016
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 III directors requires the affirmative vote of the
holders of a plurality of the shares of both classes of stock represented at the
meeting. Approval of any other matters which may properly come before the
meeting will require the affirmative vote of the holders of a majority of the
shares represented and entitled to vote on such proposals 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, votes withheld from any
nominee for director 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, and therefore it is anticipated that broker "non-votes" will not occur
with respect to such election. Because such brokers will not be entitled to vote
at the meeting on any non-routine matter, their broker "non-votes" will not have
any effect on the voting on such proposal.
1
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Alan S. McKim........................................ 43 Chairman of the Board of Directors, President Chief
Executive Officer
Christy W. Bell...................................... 75 Director
John F. Kaslow....................................... 65 Director
Daniel J. McCarthy................................... 66 Director
John T. Preston...................................... 48 Director
Lorne R. Waxlax...................................... 64 Director
Gene A. Cookson...................................... 40 Senior Vice President, Field Services & Operations *
Steve E. Dovell...................................... 43 Vice President of Disposal Services Group *
Roger A. Koenecke.................................... 49 Senior Vice President and Chief Financial Officer
John P. Lawton....................................... 37 Senior Vice President of Corporate Marketing and
National Accounts *
Stephen H. Moynihan.................................. 42 Senior Vice President Planning & Development
Carl Paschetag, Jr................................... 38 Vice President, Treasurer and Financial Controller
</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 in 1999.
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 and a managing member of
Temblor Petroleum Company LLC. 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 this year, and he is standing for reelection for a three-year term.
John F. Kaslow is a consultant to the electric utility industry. Mr. Kaslow
served for 7 years as an advisor to 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 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.
2
<PAGE>
Mr. Kaslow is a director of Doble Engineering Company. He has served as a
director of the Company since 1991. His current term as a Class I director
expires in 1999.
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 of Tufts Associated Health Maintenance Organization, and as a director
and member of the Audit and Compensation Committees 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 this year, and he is standing for reelection for a
three-year term.
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 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. His current term as a Class II director
expires in 2000.
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 currently a director of
B.J.'s Wholesale Club, Inc, HON Industries Inc., Homebase, Inc and Quaker State
Corporation, which are public companies, and The Iams Company, a private
company. Mr. Waxlax holds a BBA degree from the University of Minnesota and an
MBA degree from Northwestern University. He has served as a director of the
Company since 1994. His current term as a Class II director expires in 2000.
Gene A. Cookson recently rejoined the Company as Senior Vice President,
Field Services & Operations. Over the last two years, Mr. Cookson was the Vice
President of Operations of The Flatley Group, a privately owned real estate
management company, and he was in charge of major accounts at the Gartner Group.
From 1991 to 1996, Mr. Cookson held a variety of management positions with the
Company. Mr. Cookson holds a Masters Degree in Civil Environmental Engineering
from Northeastern University.
Stephen E. Dovell is Vice President of the Disposal Services Group of Clean
Harbors Environmental Services. Mr. Dovell joined Clean Harbors Environmental
Services in 1984 and has served in a variety of operational positions. In 1986
he was appointed as a Vice President of Clean Harbors of Braintree, in charge of
the Braintree facility, and in 1994 he was appointed Regional Vice President of
Disposal Services. Mr. Dovell received a BS degree in Business Administration
from Emmanuel College.
Roger A. Koenecke recently joined the Company as Senior Vice President and
Chief Financial Officer. From 1982 through 1997, Mr. Koenecke held a variety of
management positions, including Senior Vice President and Chief Financial
Officer, with Millbrook Distribution Services, Inc. and its predecessor
corporations, which are engaged in the distribution of health and beauty care,
general merchandise, and specialty food products. Prior to that, he was and
Audit Manager with Price Waterhouse & Co. Mr. Koenecke holds a BS in Chemistry
and MBA from the University of Wisconsin.
John P. Lawton is Senior Vice President of Corporate Marketing and National
Accounts for Clean Harbors Environmental Services. Mr. Lawton joined the Company
in 1988 as a Customer Service
3
<PAGE>
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.
Stephen H. Moynihan has served as an officer of either the Company or one or
more of its subsidiaries since June 1987. In November 1996, he was appointed
Senior Vice President Planning and Development, prior to which he served as Vice
President and Treasurer. 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.
Carl Paschetag, Jr. joined the Company as Vice President, Treasurer and
Financial Controller in June 1997. He also serves as Vice President and
Treasurer of most of the Company's subsidiaries. From 1994 through 1997, Mr.
Paschetag was the Controller of Cambridge Energy Research Associates, a
privately owned international management consulting company. From 1987 through
1994, Mr. Paschetag held a variety of management positions with Draka Holdings
B.V., a publicly held company traded on the Amsterdam Exchange. Prior to that,
Mr. Paschetag worked for KPMG Peat Marwick, an international accounting firm. He
received a BBA in Accounting from The University of Texas.
4
<PAGE>
Set forth below is information as to ownership of the Company's Common Stock
as of April 1, 1998 by each director of the Company, each of the executive
officers named in the Summary Compensation Table set forth below, and 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............................................................. 4,211,562(2) 41.22%
Christy W. Bell........................................................... 50,352 *
John F. Kaslow............................................................ 5,300 *
Daniel J. McCarthy........................................................ 11,000(3) *
John T. Preston........................................................... 5,520 *
Lorne R. Waxlax........................................................... 38,408 *
Gene A. Cookson........................................................... -- *
Steven E. Dovell.......................................................... 15,050 *
Roger A. Koenecke......................................................... -- *
John P. Lawton............................................................ 18,475 *
Stephen H. Moynihan....................................................... 89,644 *
Carl Paschetag, Jr........................................................ 3,400 *
All current directors and executive officers as a group (12 persons)...... 4,448,711 43.22%
</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, 1998: Mr. Bell (3,000
shares), Mr. Kaslow (5,000 shares), Mr. McCarthy (11,000 shares), Mr.
Preston (5,520 shares), Mr. Waxlax (4,208 shares), Mr. Dovell (15,050
shares), Mr. Lawton (18,475 shares), Mr. Moynihan (35,844 shares), and all
current directors and executive officers as a group (98,097 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.
5
<PAGE>
To the Company's knowledge, as of April 1, 1998, 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............................................... 4,211,562(1) 41.22% Common Stock
Clean Harbors, Inc.
1501 Washington St.
Braintree, MA 02184
Brinson Partners, Inc....................................... 841,100(2) 8.25% Common Stock
Brinson Trust Company
c/o Brinson Holdings, Inc.
209 South LaSalle
Chicago, IL 60604
Dimensional Fund Advisors, Inc.............................. 628,900(2)(3) 6.17% Common Stock
1299 Ocean Avenue
Santa Monica, CA 90401
Whiting & Co................................................ 42,000 37.50% Series B
One Wall Street Convertible
New York, NY 10286 Preferred Stock
Cardinal Recovery Partners, LP.............................. 26,500 23.66% Series B
One Fawcett Place Convertible
Greenwich, CT 06830 Preferred Stock
Morgan Stanley & Co., Inc................................... 20,000 17.86% Series B
55 Water Street Convertible
New York, NY 10036 Preferred Stock
Auer & Co................................................... 15,000 13.39% Series B
Church Street Station Convertible
New York, NY 10008 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, 1997 shown on Schedule 13G filed
with the Company by the specified entities in February 1998.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 628,900 shares of Clean
Harbors, Inc. stock as of December 31, 1997, all of which shares 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.
6
<PAGE>
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY FORM)
The Board of Directors of the Company is composed of seven directors
classified into three classes of which Class I consists of three 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. There are currently only two Class
I directors, with a vacancy created by the resignation of David A. Eckert in
January 1998. The Board of Directors is currently considering candidates to fill
that vacancy for the remaining term of Class I Director which runs until the
1999 Annual Meeting. The term of the Class III Directors, Christy W. Bell and
Daniel J. McCarthy, shall expire at the 1998 Annual Meeting, and the Board of
Directors has nominated each of the foregoing to continue to serve as Class III
Directors.
UNLESS OTHERWISE SPECIFIED THEREIN, SHARES REPRESENTED BY THE ENCLOSED PROXY
WILL BE VOTED AT THE ANNUAL MEETING TO ELECT CHRISTY W. BELL AND DANIEL J.
MCCARTHY AS DIRECTORS OF THE COMPANY FOR A THREE-YEAR TERM, UNTIL THE 2001
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. BELL AND MCCARTHY 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 1997, upon the election as directors to serve
for a term of three years, Messrs. Preston and Waxlax, the only non-employees
elected as a director, each received options for 3,000 shares at the market
price of $1.6875 per share. Also during 1997, the Board appointed Paul W. Russo
to serve as director for a term of two years and nine months for which he
received options for 2,750 shares at the market price of $2.00 per share. Mr.
Russo resigned as a director in February 1998, shortly after the resignation of
Mr. Eckert, and his options will expire in May 1998.
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 an
additional $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 outside directors in 1997 were as follows: Bell $30,500; Kaslow
$33,250; McCarthy $35,750; Preston $25,750; Russo $4,333; and Waxlax $30,500.
BOARD COMMITTEES AND MEETINGS
During 1997, the Board of Directors held six meetings, of which one was held
by conference call.
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
1997, the Audit Committee consisted of
7
<PAGE>
Messrs. Bell, Kaslow and McCarthy. 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
1997, there were four meetings of the Audit Committee, of which one was held by
conference call. The Board of Directors has also established a Compensation and
Stock Option Committee. During 1997, the Compensation and Stock Option Committee
consisted of three non-employee directors: Messrs. Kaslow, McCarthy and Waxlax.
During 1997, there were five meetings of the Compensation and Stock Option
Committee, of which one was held by conference call.
In December 1997, the Board of Directors established a Corporate Governance
Committee whose duties include those of a nominating committee. The Corporate
Governance Committee consists of three directors: Messrs. Waxlax, McKim and
McCarthy. This committee met once during 1997.
During 1997, all directors attended at least 75 percent of the meetings of
the Board and the committees of which they were members.
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.
COMPENSATION
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 1997 were determined based upon previous
studies of comparable industry groups. Salary at risk payments were made
pursuant to the Company's Management Incentive Program ("MIP") approved by the
Committee for 1997. Under the 1997 MIP, which covered approximately 100
management positions in the Company, an individual could earn a bonus based upon
any one or more of three components: (i) Company-wide success in meeting
management's goals, including a threshold achievement of earnings before
interest, taxes, depreciation and amortization ("EBITDA"); (ii) business segment
net income; and (iii) net income of the individual's business unit. No bonuses
were paid under the first component of the MIP because the Company failed to
achieve its EBITDA goal. Field Services was the only business segment of the
Company within which managers received bonuses for 1997 ranging from a minimum
of $1,050 to a maximum of $6,850.
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. Awards are made at
current market price, and most options vest as to 20% at the end of each
successive year of service. Options were awarded in 1997 to 6 employees of the
Company. The amount of individual awards ranged from 2,000 to 100,000 shares
based upon the individual's position and ability to positively impact Company
results, adjusted according to his or her performance rating. In 1997, Mr.
Eckert received options for 100,000 shares vesting over five years, which
expired on April 24, 1998. The Chief Executive Officer, Alan S. McKim, did not
receive any options during 1997.
8
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
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, voluntarily continued to defer the implementation
of such increase until March 1, 1997 when his new base compensation went into
effect. Salary at risk payable to Mr. McKim for 1997 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 1997.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly-held companies for compensation paid to
certain executive officers, to the extent that compensation exceeds $1 million
per officer in any year. The compensation paid to the Company's executive
officers during the 1997 fiscal year did not exceed the $1 million limit per
officer, and it is not expected that the compensation to be paid to the
Company's executive officers in the foreseeable future will exceed that limit.
Because of the unlikelihood that compensation payable to any of the Company's
executive officers in the foreseeable future will approach the $1 million limit,
the Compensation Committee has decided at this time not to take any other action
to limit or restructure the elements of compensation payable to the Company's
executive officers. The Compensation Committee will reconsider this decision
should the individual compensation of any executive officer ever approach the $1
million level.
Members of the Committee
Daniel J. McCarthy
John F. Kaslow
Lorne R. Waxlax
9
<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 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION (1)
------------------------
AWARDS
-----------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION OPTIONS
-------------------------------------------- GRANTED ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER (SHARES) COMPENSATION (2)
- ------------------------------------- --------- ----------- --------- --------- ----------- PAYOUTS ------------------
-----------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan S. McKim........................ 1997 $ 291,668 $ -- $ 408 -- -- $ --
Chairman of the Board, President 1996 250,008 -- 408 -- -- --
and Chief Executive Officer 1995 250,008 -- 384 -- -- 1,000
David A. Eckert (3)..................
President and Chief Operating 1997 $ 291,664 $ -- $ 4,608 100,000 -- $ --
Officer * 1996 197,904 50,000 3,738 250,000 -- --
Stephen H. Moynihan.................. 1997 $ 130,800 $ -- $ 408 -- -- $ --
Senior Vice President Planning & 1996 130,800 -- 348 -- -- --
Development 1995 130,800 -- 264 7,000 -- 1,000
Brian J. House (4)................... 1997 $ 130,000 $ -- $ 264 -- -- $ --
Vice President of Field Services 1996 130,000 39,975 256 13,000 -- --
Group * 1995 126,206 -- 210 7,000 -- 1,000
John P. Lawton....................... 1997 $ 120,000 $ -- $ 4,444 -- -- $ --
Senior Vice President of Corporate 1996 120,000 -- 248 5,000 -- --
Marketing and National Accounts * 1995 107,187 -- 205 7,000 -- 1,000
</TABLE>
- ------------------------
* Clean Harbors Environmental Services, Inc.
(1) No restricted stock or stock appreciation rights were awarded during 1997,
or held at the end of 1997. The Company does not have a long-term incentive
plan, and there were no long-term incentive plan payouts during 1997.
(2) Consists of employer contribution to the 401(k) plan. The Company does not
provide any pension benefits other than the 401(k) plan. The Company did not
make a 401(k) plan contribution for 1997.
(3) Mr. Eckert resigned from the Company on January 24, 1998.
(4) Mr. House resigned from the Company on January 8,1998.
10
<PAGE>
OPTIONS
The following table illustrates the hypothetical value of stock options
granted to the individuals named in the Summary Compensation Table during 1997,
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. In 1997 no stock options were repriced, and no stock appreciation
rights were awarded.
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------- AT ASSUMED ANNUAL RATES
PERCENT OF STOCK PRICE
NUMBER OF OF TOTAL APPRECIATION
SECURITIES OPTIONS EXERCISE FOR OPTION TERM(2)
UNDERLYING GRANTED TO OR BASE --------------------------
OPTIONS EMPLOYEES PRICE PER EXPIRATION 5% ANNUAL 10% ANNUAL
NAME GRANTED IN 1997 SHARE DATE GROWTH RATE GROWTH RATE
- ------------------------------------- ----------- ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Alan S. McKim........................ -- -- $ -- -- $ -- $ --
David A. Eckert (3).................. 100,000 77.52% (1) 6/25/07 65,501 228,319
Stephen H. Moynihan.................. -- -- -- -- -- --
Brian J. House (4)................... -- -- -- -- -- --
John P. Lawton....................... -- -- -- -- -- --
</TABLE>
- ------------------------
(1) The exercise prices of the options granted in 1997 were equal to the fair
market value of the Common Stock on the date each option was granted, except
for the options granted to Mr. Eckert. Mr. Eckert was granted 50,000 shares
with an exercise price of $1.6875 and 50,000 shares with an exercise price
of $2.50. The fair market value of these shares on the date of grant was
$1.5625.
(2) All options have a ten-year term, vest over five years, and are exercisable
as to 20% of the shares on the first anniversary of the date of grant and as
to an additional 20% on each anniversary date thereafter.
(3) Mr. Eckert resigned from the Company on January 24, 1998, and his options
expired on April 24, 1998.
(4) Mr. House resigned from the Company on January 8, 1998, and his options
expired on April 8, 1998.
11
<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 any 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 1997 were $3.375 and $1.188. The
last sale price at year-end was $1.5625. No stock appreciation rights were
exercised during 1997 or held by such individuals at year-end.
OPTION EXERCISES IN 1997
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
NUMBER OF SECURITIES OPTIONS AT
NUMBER UNDERLYING UNEXERCISED YEAR-END
OF SHARES OPTIONS AT YEAR-END -----------------
ACQUIRED ON VALUE ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE
- ------------------------------------- ----------------- ----------- ------------ -------------- -----------------
<S> <C> <C> <C> <C> <C>
Alan S. McKim........................ -- $ -- -- -- --
David A. Eckert...................... -- -- 50,000 300,000 --
Steve H. Moynihan.................... -- -- 35,644 5,800 --
Brian J. House....................... -- -- 21,200 19,200 --
John P. Lawton....................... -- -- 16,675 13,400 --
<CAPTION>
.
NAME UNEXERCISABLE
- ------------------------------------- -------------------
<S> <C>
Alan S. McKim........................ --
David A. Eckert...................... --
Steve H. Moynihan.................... --
Brian J. House....................... --
John P. Lawton....................... --
</TABLE>
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
Mr. Eckert was employed under an employment agreement through January 24,
1998. Mr. Eckert's employment agreement provided for a minimum base salary of
$250,000, which was increased to $300,000 by the Compensation Committee of the
Board of Directors effective March 1, 1997. Mr. Eckert was entitled to
participate in the Company's management bonus plan, which was based upon the
Company's achievement of certain targets of earnings before interest, taxes,
depreciation and amortization (EBITDA). Because the Company did not achieve its
EBITDA target during 1997, Mr. Eckert did not receive a bonus for 1997. In 1996,
under his employment agreement, Mr. Eckert received options for 250,000 shares
of the Company's Common Stock at market price ($3.00) upon commencement of his
employment, as well as normal employee benefits. In December of 1996, these
options were repriced to $2.125 per share. In 1997, the Compensation Committee
of the Board of Directors granted Mr. Eckert options on 100,000 additional
shares of Common Stock, of which 50,000 were granted with an exercise price of
$1.6875 and 50,000 were granted with an exercise price of $2.50. The market
value of the options granted to Mr. Eckert in 1997 was $1.5625 on the date of
grant.
On January 24, 1998, Mr. Eckert resigned from the Company. On March 8, 1998,
Mr. Eckert and the Company entered into an agreement which modified the
severance provisions of his employment agreement to provide that Mr. Eckert
could receive 75% of his base salary of $300,000, or an initial severance of
$225,000. He is entitled to receive additional severance of $25,000 per month
commencing October 25, 1998 to a maximum of $75,000, if he remains unemployed at
that time. Mr. Eckert's vested options terminated on April 24, 1998.
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.
12
<PAGE>
PERFORMANCE GRAPH
The following graph compares the five-year return from investing $100 on
January 1, 1993 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,
1992, when the Company's Common Stock closed at $12.00 per share.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Clean Harbors, Inc. $100.00 $59.38 $32.81 $20.83 $18.75 $13.02
Industry Index $100.00 $72.74 $68.47 $81.67 $93.71 $94.75
Broad Market $100.00 $119.95 $125.94 $163.35 $202.99 $248.30
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1997 all such filing
requirements were satisfied on a timely basis except for a late filing of a Form
5 by Carl Paschetag, Jr.
13
<PAGE>
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,
1998. 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 1999 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,
1998.
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 WILLIAM J. GEARY, ESQ., VICE PRESIDENT OF GOVERNMENT RELATIONS AND
PUBLIC AFFAIRS, CLEAN HARBORS ENVIRONMENTAL SERVICES, INC., 1501 WASHINGTON
STREET, BRAINTREE, MASSACHUSETTS 02184, TELEPHONE (781) 849-1800, EXT. 4169.
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, 1998
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>
CLEAN HARBORS, INC.
This Proxy Is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Alan S. McKim, Carl Paschetag, Jr., and C.
Michael Malm, 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 Common 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 Wednesday, June 17,
1998, at Swissotel, 1 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 below and, in his
own discretion, upon such other matters as may properly come before the
meeting.
Please mark your
votes as in [X]
this example
using dark ink only
1. Election of Directors: FOR WITHHELD Nominees: Christy W. Bell
Daniel J. McCarthy
[ ] [ ]
For, except vote withheld from the following nominee:
-----------------------------------------------------
This Proxy, When Properly Executed, Will Be Voted in the Manner Directed
Above. If No Direction Is Made, This Proxy Will Be Voted "For" Proposal 1.
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.
