SCHEDULE 14 A 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 Section 240.14a-11(c) or
Section 240.14a-2.
SEVENSON ENVIRONMENTAL SERVICES, INC.
_________________________________________________________________
(Name of Registrant as Specified In Its Charter)
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement,
if other than Registrant)
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 0-12.
(1) Title of each class of securities to which transaction
applies:
_______________________________________________________
(2) Aggregate number of securities to which transaction
applies:
_______________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
_______________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________
(5) Total fee paid:
_______________________________________________________
[ ] Fee paid previously with preliminary materials.
<PAGE>
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
_______________________________________________________
(3) Filing Party:
_______________________________________________________
(4) Date Filed:
_______________________________________________________
<PAGE>
Sevenson Environmental
Services, Inc.
2749 Lockport Road
Niagara Falls, New York 14302-0396
NOTICE OF ANNUAL MEETING
TO ALL STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of Sevenson Environmental Services, Inc., a Delaware
corporation, will be held at the Comfort Inn, One Prospect Point,
Niagara Falls, New York, on May 19, 1998, at 10:00 a.m., for the
following purposes:
(1) To elect eight Directors, two of whom will be Class A
Directors elected by holders of Common Stock and six of whom will
be Class B Directors elected by holders of Class B Common Stock,
such Directors to hold office until the next Annual Meeting of
Stockholders and until their successors are elected and
qualified.
(2) To consider and approve the reincorporation of Sevenson
Environmental Services, Inc. from Delaware to New York by merging
the Company into a wholly owned subsidiary, Sevenson
Environmental Services of New York, Inc., a New York corporation,
which merger, following shareholder approval, is to be effective
on June 30, 1998.
(3) To amend the Company's 1989 Incentive Stock Plan to
increase the number of shares available for issuance under the
Plan from 320,000 to 600,000.
(4) To ratify the appointment by the Board of Directors of
Deloitte & Touche LLP as independent accountants to audit the
accounts of the Company for the fiscal year ending December 31,
1998.
(5) To transact such other business as may properly come
before the meeting.
By Order of the Board of Directors,
WILLIAM J. McDERMOTT
Secretary
April 13, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
MARK, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY
IN THE ENVELOPE PROVIDED.
Page 1 of 31
<PAGE>
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
OF
Sevenson Environmental Services, Inc.
__________
TO BE HELD AT
THE COMFORT INN
ONE PROSPECT POINT
NIAGARA FALLS, NEW YORK
ON MAY 19, 1998
__________
PROXY STATEMENT
GENERAL MATTERS
The accompanying proxy is solicited by the Board of
Directors of Sevenson Environmental Services, Inc. (the
"Company") for the Annual Meeting of Stockholders of the Company
(the "Annual Meeting") to be held at the Comfort Inn, One
Prospect Point, Niagara Falls, New York, 14302, on Tuesday,
May 19, 1998, at 10:00 a.m. This Proxy Statement and the
enclosed form of proxy are first being mailed to stockholders on
or about April 13, 1998.
The cost of solicitation of proxies will be borne by the
Company. Solicitation other than by mail may be made by officers
or by regular employees of the Company, who will receive no
additional compensation therefor, by personal or telephone
solicitation, the cost of which is expected to be nominal. The
Company will reimburse brokerage firms and other securities
custodians for their expenses in forwarding proxy materials to
their principals.
Only holders of shares of Common Stock and Class B Common
Stock of record at the close of business on April 3, 1998 will be
entitled to notice of and to vote at the meeting and at all
adjournments thereof. At the close of business on April 8, 1998,
the Company had outstanding approximately 2,640,785 shares of
Common Stock and 7,486,440 shares of Class B Common Stock. At
the meeting, the holders of Common Stock will be entitled, as a
class, to elect two Directors (the Class A Directors) and the
holders of Class B Common Stock will be entitled, as a class, to
elect the remaining six Directors (the Class B Directors).
Except for the election of Directors and except for class
votes as required by law, holders of both classes of Common Stock
vote or consent as a single class on all matters, with each share
of Common Stock having one vote per share and each share of
Class B Common Stock having ten votes per share.
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<PAGE>
Shares of Common Stock represented by the proxies in the
form enclosed, properly executed, will be voted in the manner
designated, or if no instructions are indicated, in favor of
Directors named therein and for the other proposals. In their
discretion the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting. The
proxy given by the enclosed proxy card may be revoked at any time
before it is voted by delivering to the Secretary of the Company
a written revocation or a duly executed proxy bearing a later
date, or by attending the Annual Meeting and voting in person.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the
persons known to the Company to beneficially own, as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, more than
5% of the outstanding shares of Common Stock or Class B Common
Stock, the number of shares of each class owned by each Director
of the Company, the named executive officers and by all executive
officers and Directors as a group, as of April 3, 1998, and the
aggregate voting power held by such persons and the group in
circumstances where the Class B Common Stock votes as one class
with the Common Stock.
The number of shares of each class owned by each of the
persons in the following table reflects an eight-for-five stock
dividend declared by the Board of Directors on October 6, 1997.
The stock dividend was payable on October 27, 1997 to
stockholders of record on October 20, 1997 in the form of a 60%
stock dividend payable in Class B Common Stock, on the
outstanding Class B Common Stock of the Company, and payable in
Common Stock, on the outstanding Common Stock of the Company.
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<PAGE>
<TABLE>
<CAPTION> Shares of Shares of Class B
Name (1) Common Stock(2) Common Stock(2)
_______________ _______________ _________________
Voting
Number Percentage Number Percentage Power
______ __________ ______ __________ ______
<S> <C> <C> <C> <C> <C>
Royce & Associates, Inc. 1,037,700 39.30% 0 0 1.34%
1414 Avenue of Americas
New York, N.Y. 10019
J.P. Morgan & Co., Inc. 525,600 19.90% 0 0 0.68%
60 Wall Street
New York, NY 10260
Michael A. Elia 0 0 1,373,440(5) 18.35% 17.72%
Laurence A. Elia 0 0 1,395,620(6) 18.64% 18.03%
Richard A. Elia 0 0 1,397,120(7) 18.66% 18.03%
William J. McDermott 0 0 1,409,000(8) 18.82% 18.18%
Alan R. Elia, Jr. 7,000 * 245,000(9) 3.27% 3.16%
Arthur A. Elia 17,280(3) * 0 0 *
Dena M. Armstrong 5,040 * 0 0 *
Joseph J. Castiglia 6,400(4) * 0 0 *
Robert S. Kelso 5,120(4) * 0 0 *
All officers and Directors
as a group (13 persons) 97,520 * 5,820,180 74.47% 72.06%
________________________________________________________________________________________
</TABLE>
*Less than 1%
____________________
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<PAGE>
(1) Unless otherwise noted, the address of all beneficial owners
is c/o Sevenson Environmental Services, Inc., 2749 Lockport
Road, Niagara Falls, New York 14302-0396.
(2) Beneficial ownership has been determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, and
individuals may disclaim beneficial ownership for other
purposes. Each stockholder has sole investment and voting
power over the shares opposite his name unless otherwise
indicated.
The Class B stockholders are parties to a Voting Agreement
pursuant to which all shares of Class B Common Stock are to
be voted in accordance with the majority vote, except in
situations in which there exist certain conflicts of
interest. The Voting Agreement commenced in 1989, is for a
term of ten years and is subject to renewal.
(3) Includes 4,800 shares of Common Stock which may be acquired
under options granted to non-employee Directors pursuant to
the 1989 Incentive Stock Plan. Does not include 2,440
shares of Common Stock held by his spouse as to which he
disclaims beneficial ownership.
(4) Includes 4,800 shares of Common Stock which may be acquired
under options granted to non-employee directors pursuant to
the 1989 Incentive Stock Plan.
(5) Does not include 72,000 Class B shares held by his spouse
and 61,760 Class B shares held by his spouse as custodian
for his minor children as to which he disclaims beneficial
ownership.
(6) Does not include 80,000 Class B shares held by his spouse,
37,980 Class B shares held by his spouse as custodian for
his minor children as to which he disclaims beneficial
ownership and 1,500 Class B shares held in a trust for the
benefit of a minor child of which he is a co-trustee and as
to which he disclaims beneficial ownership.
(7) Does not include 80,000 Class B shares held by his spouse
and 36,480 Class B shares held by his spouse as custodian
for his minor children as to which he disclaims beneficial
ownership.
(8) Does not include 80,000 Class B shares held by his spouse
and 27,360 Class B shares held by his spouse as custodian
for his minor children as to which he disclaims beneficial
ownership and 1,900 Class B shares held in a trust for the
benefit of a minor child of which he is a co-trustee and as
to which he disclaims beneficial ownership.
(9) Does not include 1,180,640 Class B shares held by a trust of
which he and his father, Alan R. Elia, Sr., are co-trustees,
and 3,040 Class B shares held in a trust for his minor
children of which he is a co-trustee, as to which he
disclaims beneficial ownership.
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<PAGE>
All directors and executive officers timely filed all
required beneficial ownership reports during fiscal 1997.
ELECTION OF DIRECTORS
It is intended that proxies solicited by the Board of
Directors will, unless otherwise directed, be voted to elect the
two nominees for Class A Director named below. The Class B
Directors will be elected by the holders of the Class B Common
Stock. Holders of Common Stock are not entitled to vote on the
election of the Class B Director nominees. Directors are elected
by a plurality of the votes cast; accordingly, abstentions and
broker non-votes will have no effect.
The nominees proposed for election to the Board of Directors
are all presently members of the Board.
The nominees named herein, if elected as Class A Directors,
will hold office until the next succeeding Annual Meeting of
Stockholders and until their successors are duly elected and
qualified. In the event either nominee for Class A Director
becomes unavailable and a vacancy exists, it is intended that the
persons named in the proxy may vote for a substitute who will be
recommended by the remaining Director. It is anticipated that
Michael A. Elia, Laurence A. Elia, Richard A. Elia, William J.
McDermott and Alan R. Elia, Jr., who own 77.7% of the Class B
Common Stock (the "Principal Stockholders"), will execute a proxy
authorizing the voting for all of the nominees for Class B
Directors. The Board of Directors has no reason to believe that
any of the nominees will be unable to serve as Directors. All
Directors have served continuously as such from the year stated.
___________________________________________________________________________
Director
Name Age Since Title
___________________________________________________________________________
Nominees for
Class A Directors
Joseph J. Castiglia 63 1989 Director
Robert S. Kelso 77 1989 Director
___________________________________________________________________________
Nominees for
Class B Directors
Michael A. Elia 46 1980 President, Chief
Executive Officer
and Director
Laurence A. Elia 47 1979 Vice President and
Director
Richard A. Elia 44 1982 Executive Vice President
and Director
William J. McDermott 48 1979 Vice President-Finance,
Secretary and Director
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<PAGE>
Dena M. Armstrong 40 1982 Assistant Vice President-
Finance, Treasurer and
Director
Arthur A. Elia 69 1979 Director
_________________________________________________________________________
Joseph J. Castiglia former Vice Chairman, President and
Chief Executive Officer of Pratt & Lambert United, Inc. (paint,
industrial coatings and adhesives manufacturer) Buffalo, New York
is presently a business consultant and private investor, JBC
Enterprises, East Aurora, New York. He also serves as Chairman,
AAA Western and Central New York (automobile club); Chairman,
Catholic Health System of Western New York (consortium of
hospitals); Chairman, Blue Cross and Blue Shield of Western
New York (health care and health insurance company) and New York
State Electric and Gas Corporation (utility); Director, Vision
Group of Funds and Vision Fiduciary Funds, Inc. (mutual fund
group); Director, Buffalo Alliance for Education; and Director
Community Foundation for Greater Buffalo. Mr. Castiglia was Vice
Chairman, President and Chief Executive Officer of Pratt &
Lambert United, Inc. from August 1994 until his retirement in
1996. Prior to that time, he was President and Chief Executive
Officer of Pratt & Lambert, Inc. from 1989 until July 1994, at
which time the Company was merged with United Coatings Inc.
Mr. Castiglia received his B.B.A. degree from Canisius College.
Robert S. Kelso served as President, Chief Executive Officer
and a Director of Calspan Corporation (aerospace research and
development company) from 1970 until his retirement in 1978.
From 1984 until 1993 he served as a Director of Blue Shield of
Western New York, Inc. (health care and health insurance
company). He received B.S. and M.S. degrees in engineering from
the Massachusetts Institute of Technology and the University of
Michigan, respectively.
Michael A. Elia has served as Chief Executive Officer of the
Company since 1984. Prior to 1984 he served as Vice President in
charge of construction operations of the Company. He received
his B.S. degree in Civil Engineering from Villanova University.
Mr. Elia is also a director of Sovran Self Storage, a real estate
investment trust which owns and operates self-storage centers.
Laurence A. Elia has served as a Vice President of the
Company and its predecessors since 1975 and in various executive
capacities prior to that time. He is President of the Company's
wholly-owned Canadian subsidiary. He received his A.B. and B.S.
degrees in Engineering from Dartmouth College.
Richard A. Elia has served as a Vice President of the
Company since 1982 and in various executive capacities prior to
that time. He received his B.S. degree in Business
Administration from Villanova University.
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<PAGE>
William J. McDermott has served as Vice President-Finance of
the Company since 1986, and as Secretary since 1987. Prior to
1986 he served as legal counsel with the Company and its
predecessors. He received his J.D. and B.S. (Civil Engineering)
degrees from the State University of New York at Buffalo. He is
a member of the New York bar.
Dena M. Armstrong has been employed by the Company and its
predecessors since 1975. Since 1982 she has served as Assistant
Vice President-Finance. She received her B.S. degree from
Niagara University.
Arthur A. Elia has been with the Company including its
predecessors since 1947. From 1947 until 1982 he served as a
Vice President. From 1982 to 1984 he served as the Chief
Executive Officer of the Company. Arthur Elia is the father of
Michael, Laurence and Richard Elia and Dena M. Armstrong is their
cousin.
The Board of Directors recommends a vote FOR the election of
the above nominees.
BOARD OF DIRECTORS AND COMMITTEES
During 1997, the Board of Directors had four meetings. The
Board of Directors has an Audit Committee consisting of Messrs.
Castiglia and Kelso and a Compensation Committee consisting of
Messrs. Castiglia, Kelso and Arthur A. Elia. The Board of
Directors does not have a nominating committee.
The Audit Committee recommends independent accountants for
selection by the Board of Directors, reviews the results and
scope of the audit and the services provided by and the fees paid
to the independent accountants. The Audit Committee also reviews
semi-annually the allocation of expenses pursuant to the Services
Agreement between the Company and SCC Contracting, Inc. (SCC), a
general construction business owned by the Principal
Stockholders. See "Certain Transactions - Transactions with
SCC." During 1997, the Audit Committee had two meetings.
The Compensation Committee makes recommendations to the
Board of Directors with respect to compensation of Directors and
executive officers. The Committee administers the Bonus Plan and
the 1989 Incentive Stock Plan. During 1997, the Compensation
Committee had one meeting.
Every member of the Board of Directors attended at least 75%
of the meetings of the Board and of the committees of which the
Director is a member.
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<PAGE>
REMUNERATION OF DIRECTORS
Directors who are not employees of the Company are paid an
annual retainer of $6,000 plus a fee of $1,000 for each meeting
of the Board of Directors attended, and each meeting of a
committee of the Board of Directors attended when not scheduled
on the same day as a Board Meeting, and are reimbursed for their
expenses incurred in attending such meetings.
In accordance with the provisions of the 1989 Incentive
Stock Plan, each non-employee Director is entitled to receive a
one-time, non-discretionary option to acquire 4,800 shares of
Common Stock.
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
Decisions on compensation of the Company's executives
generally are made by the three-member Compensation Committee of
the Board (the "Committee"). Each member of the Committee is a
non-employee director. All decisions by the Committee relating
to the compensation of the Company's executive officers are
reviewed by the full Board, except for decisions about awards
under the Company's 1989 Incentive Stock Plan (the "Plan").
The Company's executive compensation policies are to provide
competitive levels of compensation that integrate pay with the
Company's performance goals, reward profitability, recognize
individual initiative and achievements, and assist the Company in
attracting and retaining qualified executives. In 1997, these
policies were carried out through the compensation components of
salary, profit sharing, pension, perquisites, bonus and, for
officers other than those named in the following Summary
Compensation Table, incentive stock options.
Although the Committee has approved modest periodic
increases in the salaries of executive officers other than those
named in the Summary Compensation Table, at the requests of the
named executive officers no increases in their salaries was
implemented for a nine year period through 1996. The Committee
approved increases in salary for each of these officers for 1997
to offset some of the loss of the value of their salaries due to
inflation. A competitive salary structure is the most
fundamental component of executive compensation used by the
Committee to assist in attracting and retaining qualified
executives.
The Committee considers the profitability of the Company in
awarding bonuses under the Bonus Plan, which are awarded based
solely on individual performance and Company profitability.
Bonuses have been awarded to various officers including the named
executive officers, as indicated in the Summary Compensation
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Table. Annual Company contributions to the Company's Profit
Sharing Plan, if any, are made from the Company's current or
accumulated profits and are then allocated among participants
based upon compensation.
Neither pension allocations nor perquisites, which include
income tax return preparation, club membership dues, interest-
free loans for split dollar life insurance premiums and provision
of or payments for automobiles, relate directly to the Company's
performance. Instead, these relatively inexpensive components of
executive compensation are primarily viewed as necessary to keep
compensation levels competitive and to assist in attracting and
retaining qualified executives.
The Committee also believes that stock ownership by
management and employees serves as an incentive to the
enhancement of stockholder value. In 1997, incentive stock
options were awarded to certain officers, not including those
named in the Summary Compensation Table, and employees. Because
the named executive officers are also among the Principal
Stockholders, the Committee sees less reason to award them
options, stock appreciation rights ("SARs") or restricted stock.
Accordingly, while the named executive officers continue to be
eligible to participate in the Plan, and the Committee reserves
the right to make awards to them in the future based on
individual or Company performance, assistance in the attraction
or retention of qualified executives, or other qualitative or
quantitative criteria, it has never awarded the named executive
officers any options, SARs or restricted stock.
The Committee's approach to establishing Mr. Michael Elia's
compensation does not differ from the policies and criteria
described above, except that recognition is given to the fact
that, as President and Chief Executive Officer, Mr. Elia's
responsibility for the Company's performance is incrementally
greater than that of the other executive officers. In
particular, the Committee considered the challenging industry
conditions faced by the Company in 1997. The competitive
situation was shaped by slackening regulatory enforcement with
resultant diminished demand and increased competition. The
Company also faced the postponement of two important projects and
unexpected difficulties at others. Despite this, the Company
remained profitable and is in a strong position to maintain
profitability even in a difficult market. Also, the Company
began to see results of its efforts to shift from being almost
entirely dependent on regulatorily-driven cleanups to a mix
including economically driven brownfield sites. The Committee is
satisfied that the Company continues to be among the best managed
companies in its industry.
Compensation Committee:
Joseph J. Castiglia
Robert S. Kelso
Arthur A. Elia
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<PAGE>
Summary Compensation Table
The following Summary Compensation Table sets forth
information with respect to the annual and other compensation
paid or accrued by the Company during the years ended December
31, 1997, 1996 and 1995 for (i) the chief executive officer and
(ii) the three other executive officers of the Company whose
annual compensation exceeded $100,000, for services rendered in
all capacities.
Annual
Compensation
All Other
Name and Principal Salary Bonus(1) Compensation(2)
Position Year ($) ($) ($)
Michael A. Elia, 1997 206,000 37,847 16,028
Chief Executive 1996 200,000 53,885 15,158
Officer 1995 200,000 66,661 14,981
William J. McDermott, 1997 185,400 37,847 16,204
Vice President - 1996 180,000 53,885 15,405
Finance 1995 180,000 66,661 15,085
Laurence A. Elia, 1997 185,400 37,847 16,096
Vice President 1996 180,000 53,885 15,125
1995 180,000 66,661 15,032
Richard A. Elia, 1997 195,700 37,847 15,887
Executive Vice 1996 190,000 53,885 14,969
President 1995 190,000 66,661 14,887
(1) Amounts shown in this column represent cash bonuses paid and
annual awards under the Company's Profit Sharing Plan, in
which most regular employees participate on the basis of
compensation.
(2) Amounts shown for 1997 include the dollar value of split
dollar life insurance premiums paid by the Company on behalf
of each of the named executive officers, in the amounts of
$1,423, $1,599, $1,491 and $1,282, respectively. Such
amounts also include Company contributions to the accounts
of each named executive officer in the defined contribution
pension plan in the amounts of $13,555 each.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Castiglia, Kelso and Arthur A. Elia served on the
Compensation Committee of the Company for the past fiscal year.
The Company pays interest at the annual rate of 9% to Arthur A.
Elia, a Director and a former executive officer of the Company,
and to his brother Alan Elia, Sr., with respect to the
indebtedness incurred by the Company in 1981 in connection with
its acquisition of a construction business owned by them. The
amount of the principal indebtedness, all of which is unsecured,
owed to Arthur A. Elia and Alan Elia, Sr. as of December 31, 1997
was $1,000,000 each, and interest payments to them in 1997 were
$90,000 each. The indebtedness to each matures six months after
his death and is funded by life insurance.
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<PAGE>
Other than as stated above, during the fiscal year no
Compensation Committee member had any interlocking relationship
with the Company of the type required by Item 402(j) of
Regulation S-K to be disclosed herein.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1994
requires the Company's directors and officers, and persons who
own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and change in ownership
with the SEC and the Nasdaq National Market tier of the Nasdaq
Stock Market. Directors, officers and greater-than-10%
stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file. Based
solely on review of information furnished to the Company, reports
filed through the Company and written representations that no
Forms 5 were required, the Company believes that all Section
16(a) filing requirements applicable to its directors, officers
and greater-than-10% beneficial owners were complied with during
fiscal year 1997.
FIVE-YEAR STOCKHOLDER RETURN COMPARISON
The following line-graph presentation compares cumulative
stockholder returns on an indexed basis since 1993 with the S&P
500 Stock Index and a peer group of companies selected by the
Company.
The peer group consists of six companies engaged in the
environmental services business; those companies are: CET
Environmental Services, Inc., Fluor Daniel/GTI, Inc.,
International Technology Corp., OHM Corp., and Thermo Remediation
Inc.
CUMULATIVE TOTAL STOCKHOLDER RETURN
SEVENSON ENVIRONMENTAL SERVICES, INC.
DECEMBER 31, 1992 - DECEMBER 31, 1997
Dec 92 Dec 93 Dec 94 Dec 95 Dec 96 Dec 97
Sevenson Environmental Svcs $100.00 $111.54 $130.40 $138.30 $148.14 $161.85
S&P 500 Index $100.00 $107.06 $105.41 $141.36 $170.01 $222.72
Peer Group $100.00 $ 98.73 $ 92.00 $ 94.30 $ 94.18 $ 89.18
CERTAIN TRANSACTIONS
Transactions with SCC
Prior to an internal restructuring of the Company completed
before the Company's initial public offering in April 1989, the
Company also conducted a general construction business. As a
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part of the restructuring, the general construction business was
transferred to SCC. All of the capital stock of SCC was
distributed to and is owned by the Principal Stockholders. The
businesses of SCC and the Company have been and are expected to
continue to be operated out of the office, yard and shop
facilities owned by the Company. SCC has used to varying degrees
and is expected to continue to use the Company's office and
administrative personnel, computer resources, equipment and other
Company personnel.
An agreement (the "Services Agreement") provides guidelines
for the Company's performance and pricing of services it provides
to SCC and facilities used by SCC. The Company's charges to SCC
are based upon a cost allocation system believed by the Company
to be fair and equitable to the Company's stockholders.
Allocation of these costs is generally based upon usage.
Occasionally, SCC or the Company will rent equipment owned by the
other. In such circumstances the user will pay the fair market
rental rate.
During 1997, SCC paid the Company approximately $196,000 for
general and administrative services and general yard and shop
services. The formulae and actual intercompany charges are
reviewed semi-annually by the Audit Committee of the Company's
Board of Directors.
The Company's liability insurance and workers compensation
policies are written to cover both the Company and SCC. Since
these policies contain limits which are applicable to both SCC
and the Company, covered losses experienced by SCC would increase
the costs of and reduce limits of coverage available to the
Company. SCC will pay the portion of the premiums for these
policies attributable to its operations. In 1997, the Company's
shares of the liability insurance and workers compensation
premiums totaled approximately $2,399,000 and SCC's share totaled
approximately $187,000.
Premiums for the Company's general liability and workers
compensation policies are retrospectively rated, which means that
premiums for past policy years are recalculated annually to
reflect actual losses under the policies in subsequent years.
Recalculation can result in an increase or decrease in the
premiums within certain limits. The Company and SCC have agreed
to share such increases and decreases pro-rata on the basis of
the respective portion of the original premiums paid.
Accordingly, losses incurred by SCC could result in increases in
the Company's insurance premiums in an amount disproportionate to
its own loss experience.
As is customary in the industry, the Company is obligated to
indemnify its surety against losses incurred by the surety on
surety bonds written on behalf of the Company and its
subsidiaries. The Company remains liable to the surety for any
loss on surety bonds written on behalf of SCC prior to March 1,
1989 when SCC was part of the Company. The surety has not
suffered any losses on such surety bonds and the Company is not
aware of any basis for any claims that could give rise to such
losses. SCC and the Principal Stockholders have agreed to
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indemnify the Company against any loss the Company sustains as a
result of its indemnification of the surety on surety bonds
written on behalf of SCC.
The Company maintains both a money-purchase pension plan and
a profit sharing plan. SCC formerly maintained identical plans
for its employees which were merged into the Company's plans
effective as of January 1, 1989. Persons employed by both the
Company and SCC in the same year will receive allocations to the
plans from both companies based on their compensation from each.
Other Transactions
See "EXECUTIVE COMPENSATION - Compensation Committee
Interlocks and Insider Participation."
In May 1988, a corporation owned primarily by the Principal
Stockholders acquired a hotel in Niagara Falls, New York. The
Company provides bookkeeping and accounting services to the hotel
and charges the corporation an amount equal to the Company's
costs (determined on the basis of computer usage) of providing
such services. In 1997, these costs totaled approximately
$62,000.
REINCORPORATION OF THE COMPANY INTO NEW YORK
The Board of Directors of the Company has unanimously
approved the change of the Company's state of incorporation from
Delaware to New York through the merger by the Company into its
wholly-owned subsidiary, Sevenson Environmental Services of
New York, Inc. ("SES-NY"), a New York corporation, subject to
shareholder approval (the "Reincorporation"). The
Reincorporation is to be effective on June 30, 1998.
The Board of Directors recommends the Reincorporation
because, in its opinion, the best interests of the Company and
the shareholders will be served by changing the Company's state
of incorporation from Delaware to New York. The change in
domicile, if consummated, will not result in any change in the
business, management, assets, liabilities or net worth of the
Company. New York is the state in which the Company currently
maintains its principal place of business and the Company is
currently registered as a foreign corporation doing business in
the state of New York. The decision to reincorporate in New York
was influenced by State franchise tax factors and the recent
legislative changes that substantially modernized and improved
the New York Business Corporation Law ("NYBCL"). The purposes
and effects of the proposed transaction are summarized below.
In order to effect the Reincorporation, the Company
will be merged into SES-NY, a newly-formed, wholly-owned
subsidiary incorporated in New York. This New York subsidiary
has not engaged in any activities except in connection with the
proposed transaction. The mailing address of SES-NY's principal
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executive offices and its telephone number are the same as those
of the Company. In connection with its recommendation that the
Company reincorporate in New York, the Board of Directors has
approved, and recommends to the shareholders for their adoption
and approval, an Agreement and Plan of Merger (the
"Reincorporation Agreement") pursuant to which the Company will
be merged with and into SES-NY, the New York subsidiary. The
full texts of the Reincorporation Agreement, the Certificate of
Incorporation and the By-laws of SES-NY are attached as
Exhibits A, B and C. The discussion set forth below is qualified
in its entirety by reference to the Reincorporation Agreement,
the Certificate of Incorporation of SES-NY and the Bylaws of SES-
NY, copies of which are attached hereto as Exhibits A, B and C,
respectively.
APPROVAL BY SHAREHOLDERS OF THE PROPOSED
REINCORPORATION WILL CONSTITUTE APPROVAL OF THE MERGER AGREEMENT,
THE CERTIFICATE OF INCORPORATION AND THE BYLAWS OF SES-NY AND ALL
PROVISIONS THEREOF.
Reasons for change in State of Incorporation.
The Company was originally incorporated in Delaware,
because the laws of that state were deemed to be well adapted for
the conduct of the Company's business and, at that time, provided
a more flexible and modern basis for corporate action than was
available under New York law, the state in which the Company was
originally incorporated. In August 1997, the New York
legislature amended the NYBCL to modernize its provisions,
provide greater flexibility in the management and capital
structure of New York corporations. The amendments effectively
eliminated many material substantive differences between the
corporate laws of Delaware and New York with the result that the
Company believes that the advantages of being governed by the
Delaware statutes, as opposed to the New York statutes are not
significant.
Another factor in the Board's recommendation to
reincorporate in New York is that the Company's franchise fees
will be substantially less in New York than in Delaware. The
Board of Directors believes that it costs the Company
approximately $50,000 each year for Delaware franchise tax in
addition to the costs of doing business in New York. The Board
believes that the Company will immediately begin to realize cost
savings upon reincorporation in New York. No additional taxes
will be incurred in New York above those costs that are currently
being paid in New York by the Company.
Organization of SES-NY; Effect of Reincorporation and Merger
SES-NY will be organized by the Company in New York as
a wholly-owned subsidiary of the Company for the sole purpose of
the merger. The Reincorporation and the merger will effect a
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change in the legal domicile of the Company and other changes of
a legal nature, the most significant of which are described in
this Proxy Statement. However, the Reincorporation and merger
will not result in any change in the name, business, management,
location of the Company's principal executive offices, assets,
liabilities, net worth or accounting practices. Moreover, upon
the merger becoming effective, the shares of the Company's Common
Stock and Class B Common Stock will continue to be traded on the
over-the-counter market and reported on the National Market tier
of the NASDAQ Stock Market and will be identical to the Common
Stock and Class B Common Stock of SES-NY in all respects, except
that the par value will change. As a result of the merger, the
shares of Common Stock and Class B Common Stock of SES-NY will
have a par value of $.01 per share. The Common Stock and Class B
Common Stock of the Company currently have a par value of $.10
per share. The merger will not give rise to any appraisal or
dissenters' rights.
COMPARISON OF DELAWARE AND NEW YORK LAW
Set forth below is a brief discussion of certain
differences between the Delaware General Corporation Law (the
"DGCL"), under which the Company is incorporated, and the NYBCL,
under which SES-NY is incorporated.
The statements set forth under this heading with
respect to the DGCL and the NYBCL and the respective certificates
of incorporation of the Company and SES-NY are brief summaries
thereof and do not purport to be complete. The statements
relating to the DGCL and NYBCL are subject to the detailed
provisions of such statutes and the case law and other legal
interpretations relating to such statutes.
Dividend Rights
Holders of Common Stock and Class B Common Stock of
both the Company and SES-NY are entitled to receive such
dividends as may be declared by the board of directors from funds
legally available for such purpose, after payment of any
dividends due with respect to a series of Preferred Stock.
Holders of Class B Common Stock are not entitled to dividends as
may be declared by the Board of Directors unless the holders of
Common Stock are also paid a dividend per share of at least 110%
of the dividends per share paid to the Class B Common Stock.
Under the DGCL, a corporation may pay dividends out of
surplus (defined as the excess, if any, of net assets over
capital), or, if no surplus exists, out of its net profits for
the fiscal year in which such dividends are declared and/or for
its preceding fiscal year, provided, that dividends may not be
paid out of net profits if the capital of such corporation is
less than the aggregate amount of capital represented by the
outstanding stock of all classes having a preference upon the
distribution of assets.
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Under the NYBCL, a corporation may pay dividends out of
surplus only. A corporation is prohibited from paying dividends
or making other distributions to shareholders if, after giving
effect thereto: (i) such corporation would be made insolvent,
(ii) the declaration, payment or distribution would be contrary
to any restrictions contained in the corporation's certificate of
incorporation, (iii) such corporation's net assets remaining
after such declaration, payment or distribution is less than its
stated capital.
Voting Rights
The DGCL and the NYBCL provide that every shareholder
of record shall be entitled at every meeting of
shareholders to one vote for every share owned of record on the
record date for determining shareholders entitled to notice of
and to vote at meeting of shareholders, unless otherwise provided
in the certificate of incorporation. The certificates of
incorporation of both the Company and SES-NY provide for
certain voting rights for holders of Common Stock and for holders
of Class B Common Stock including, in those instances in which
such holders are voting as one class, the holders of Common Stock
have one vote per share and the holders of Class B Common Stock
have ten votes per share. The certificates of incorporation of
both the Company and SES-NY give the board of directors the power
to create a series of preferred stock and to provide for voting
rights for the holders of such series.
Directors
Under the DGCL the number of directors shall be fixed
by, or in the manner provided in, the by-laws unless the
certificate of incorporation fixes the number of directors, in
which event, the number of directors can be changed only by an
amendment to the certificate of incorporation.
Under the NYBCL, the number of directors of a
corporation may be (i) fixed by the by-laws or (ii) by action of
the shareholders or the board of directors under the specific
provisions of a by-law adopted by the shareholders. If the
number is not fixed, there must be a minimum of one director.
The number of directors of both the Company and SES-NY are
determined pursuant to the by-laws. The two Class A Directors of
each of the Company and SES-NY are elected by a plurality of the
votes cast at a meeting of shareholders by the holders of shares
of Common Stock entitled to vote in the election. The six Class
B Directors of both the Company and SES-NY are elected by a
plurality of the votes cast at a meeting of shareholders by the
holders of the shares of Class B Common Stock entitled to vote in
the election.
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Ability to Grant Options to Employees and Directors
The DGCL does not include any requirement for obtaining
shareholder approval for the issue of such options or rights. The
NYBCL prohibits a corporation from issuing options and rights to
purchase capital stock of the corporation to directors, officers
or employees of the corporation or any subsidiary or affiliate as
an incentive for service or continued service unless the issuance
thereof is authorized at a meeting of shareholders by the vote of
the holders of a majority of the votes cast at a meeting of
holders of shares entitled to vote thereon or such issuance is
authorized by and consistent with a plan adopted by such vote of
shareholders.
Fiduciary Duties of Directors
Under the DGCL, the business and affairs of a
corporation are managed by or under the direction of its board of
directors. In exercising their powers, directors are charged
with a fiduciary duty to protect the interest of the corporation
and to act in the best interests of its shareholders.
Delaware law in general presumes that, in making a business
decision, directors are disinterested and act on an informed
basis, in good faith and in the honest belief that the action
taken was in the best interests of such corporation, which
presumption is known as the "business judgment rule." A party
challenging the propriety of a decision of a board of directors
bears the burden of rebutting the applicability of the
presumption of the business judgment rule by demonstrating that,
in reaching their decision, the directors breached one or more of
their fiduciary duties -- good faith, loyalty and due care. If
the presumption is not rebutted, the business judgment rule
attaches to protect the directors and their decisions, and their
business judgments will generally not be judicially second
guessed. Where, however, the presumption is rebutted, the
directors bear the burden of demonstrating the entire fairness of
the relevant transaction. Notwithstanding the foregoing,
Delaware courts subject directors' conduct to enhanced scrutiny
in respect of defensive actions taken in response to a threat to
corporate control and approval of a transaction resulting in a
sale of such control.
Under the NYBCL, directors owe a fiduciary duty to the
corporation and its shareholders and must perform their duties in
good faith and with that degree of care which an ordinarily
prudent person in a like position would use under similar
circumstances. New York law presumes that, without evidence to
the contrary, in making a business decision, directors are acting
in good faith and exercising honest judgment. In taking action,
directors may consider, among other things, both the long-term
and short-term interests of the corporation and its shareholders.
In addition, directors may consider the effects that the
corporation's actions may have in the short-term or in the long-
term upon: (i) the prospects for potential growth, development,
productivity and profitability of the corporation, (ii) the
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corporation's current employees, (iii) the corporation's retired
employees and other beneficiaries who are entitled to receive
retirement benefits or other benefits from a plan or agreement
entered into by the corporation, (iv) the corporation's customers
and creditors, and (v) the ability of the corporation to provide,
as a going concern, goods, services, employment opportunities and
employment benefits to contribute to the communities in which it
does business.
Liability of Directors
The DGCL permits a corporation to include in its
certificate of incorporation a provision limiting or eliminating
the liability of its directors to such corporation or its
shareholders for monetary damages arising from a breach of
fiduciary duty, except for: (i) a breach of the duty of loyalty
to the corporation; (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) a declaration of a dividend or the authorization of
the repurchase or redemption of stock in violation of the DGCL or
(iv) any transaction from which the director derived an improper
personal benefit. The certificate of incorporation of the
Company limits director liability to the maximum extent permitted
by the DGCL.
Under the NYBCL, a corporation's certificate of
incorporation may eliminate or limit the personal liability of
directors to the corporation or its shareholders for damages in
connection with any breach of duty in such capacity, provided
that no such provision may eliminate or limit: (i) the liability
of any director if a judgment or other final adjudication adverse
to him establishes that his acts or omissions were in bad faith
or involved intentional misconduct or a knowing violation of any
law or that he personally gained in fact a financial profit or
other advantage to which he was not legally entitled,
(ii) liability which arises from injury suffered by persons as a
result of a declaration of a dividend or other distribution, a
purchase of the corporation's shares, a distribution of assets
after dissolution, the making of a loan, any of which is effected
in violation of the NYBCL or (iii) the liability of any director
for any act or omission prior to the adoption of a provision
limiting or eliminating such director's liability. The
certificate of incorporation of SES-NY limits director liability
to the maximum extent permitted by the NYBCL.
Call of Special Meetings
Under the DGCL, a special meeting of the shareholders
may be called by the board of directors or such other person as
may be authorized by the certificate of incorporation or by-laws.
The by-laws of the Company provide that a special meeting of the
shareholders may be called by the President or the Chairman of
the Board and is to be called by the President or a Secretary
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upon the written request of the entire Board. The DGCL does not
include any express requirement limiting the business to be
conducted at a special meeting to only those purposes set forth
in the notice for the special meeting.
The NYBCL permits special meetings of the shareholders
to be called by the board of directors and such persons who may
be authorized to do so by the certificate of incorporation or the
by-laws of SES-NY. The by-laws of SES-NY provide that a special
meeting of the shareholders may be called by the President or the
Chairman of the Board and is to be called by the President or a
Secretary upon the written request of the entire Board. Under
the NYBCL at any such special meeting, only such business may be
transacted which is related to the purpose or purposes set forth
in the written notice provided to shareholders.
Amendment to Charter Documents
Under the DGCL, any provision of the certificate of
incorporation of the Company may be amended by approval of the
board of directors and the affirmative vote of a majority of the
voting power of the outstanding shares entitled to vote thereon;
provided, that any amendment which affects the rights of the
holders of any class or series of capital stock must be approved
by the holders of a majority of the shares of such class or
series.
Under the NYBCL, amendments or changes to the
certificate of incorporation may be authorized by a vote of the
board of directors, followed by a vote of the holders of a
majority of all outstanding shares entitled to vote thereon at a
meeting of the shareholders, provided, however, that whenever the
certificate of incorporation requires action by the board of
directors, by the holders of any class or series of shares, the
vote of a greater number or proportion as required by the
certificate of incorporation will apply. In addition, notwith-
standing any provision in the certificate of incorporation, the
holders of shares of a class or series are entitled to vote as a
class or series and, in addition to authorization of an amendment
by a majority of the votes of all outstanding shares entitled to
vote thereon, the amendment must be authorized by a vote of the
holders of a majority of all outstanding shares of the class or
series when a proposed amendment would: (i) exclude or limit
such shareholders' right to vote on any matter, (ii) change such
shareholders' shares to reduce the par value, (iii) change such
shares into a different number of shares of the same class, or
into the same or a different number of shares of any one or more
classes or any series thereof, (iv) fix, change or abolish the
designation of any authorized class, any of the relative rights,
preferences or limitations, including any provisions in respect
of any undeclared dividends, whether or not cumulative or
accrued, or the redemption of any shares, or any sinking fund for
the redemption or purchase of any shares or any preemptive rights
to acquire shares or other securities (v) provide that their
shares may be converted into shares of any other class or into
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<PAGE>
shares of any other series of the same class, (vi) alter the
terms or conditions upon which their shares are convertible or
change the shares issuable upon conversion of their shares, if
such action would adversely affect such holder's rights or
(vii) subordinate their rights, by authorizing shares having
preferences which would be in any respect superior to their
rights. For amendments involving mergers, see "Approval of
Merger and Asset Sales."
Approval of Merger and Asset Sales
Under the DGCL, unless required by its certificate of
incorporation, and the certificate of the Company contains no
such requirement, no vote of the shareholders of a constituent
corporation surviving a merger is necessary to authorize such
merger if: (i) the agreement of merger does not amend the
certificate of incorporation of such constituent corporation;
(ii) each share of stock of such constituent corporation
outstanding prior to such merger is to be an identical
outstanding or treasury share of the surviving corporation after
such merger; (iii) either no shares of common stock of the
surviving corporation and no shares, securities or obligations
convertible into such common stock are to be issued under such
agreement of merger, or the number of shares of common stock
issued or so issuable does not exceed 20% of the number thereof
outstanding immediately prior to such merger; and (iv) certain
other conditions are satisfied. In addition, the DGCL provides
that a parent corporation that is the record holder of at least
90% of the outstanding shares of each class of stock of a
subsidiary may merge such subsidiary into such parent corporation
or merge the parent corporation into such subsidiary without the
approval of such subsidiary's shareholders or board of directors.
However, the DGCL provides that the shareholders of the parent
corporation are entitled to vote on the merger if the parent is
not the surviving corporation.
Under the DGCL, whenever the approval of the
shareholders of a corporation is required for an agreement of
merger or consolidation or for a sale, lease or exchange of all
or substantially all of its assets, such agreement, sale, lease
or exchange must be approved by the affirmative vote of the
holders of a majority of outstanding shares of such corporation
entitled to vote thereon; provided, that under the DGCL, where a
corporation's certificate of incorporation provides for more or
less than one vote per share on any matter, the required vote is
a majority of the combined voting power of the corporation's
stock. The DGCL provides that, notwithstanding shareholder
authorization, any agreement of merger or consolidation may
provide that the board of directors may terminate the agreement
prior to the time that the agreement (or a certificate in lieu
thereof) filed with the Secretary of State in Delaware becomes
effective pursuant to the terms of the DGCL.
Under the NYBCL, the board of directors, upon adopting
a plan of merger or consolidation, must submit such plan to a
vote of shareholders. Notice of the meeting to adopt the plan
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and an outline of the plan must be given to each shareholder of
record, as of the record date, whether or not such shareholder is
entitled to vote. The plan must be adopted at the meeting of
shareholders by vote of a majority of all outstanding shares
entitled to vote thereon. Notwithstanding any provision in the
corporation's certificate of incorporation, the holders of shares
of a class or series of the corporation's stock, are entitled to
vote and to vote as a class if both (i) such shares will remain
after the merger or consolidation or will be converted into the
right to receive shares of stock of the surviving corporation or
consolidated corporation or another corporation, and (ii) the
articles of incorporation of the surviving entity immediately
following the effectiveness of the merger would contain any
provision which is not contained in the corporation's certificate
of incorporation and which, if contained in an amendment, would
entitle the holders to vote such class or series to vote as a
separate class. In such case, in addition to the authorization
of the merger or consolidation by vote of the holders of a
majority of all outstanding shares entitled to vote thereon, the
merger or consolidation must be authorized by a vote of the
holders of a majority or all outstanding shares of each such
class or series. If any provision referred to in (ii) above
affects only a series, but not an entire class, only the series
would be entitled to vote as a separate class. Notwithstanding
shareholder authorization, the board of directors may abandon the
plan of merger or consolidation at any time prior to the filing
of the certificate of merger or consolidation with the New York
Secretary of State, but only if a provision for such abandonment
is contained in the plan.
Like the DGCL, as set forth above, under the NYBCL when
a parent corporation owns at least 90% of the outstanding shares
of each class of a subsidiary, no shareholder approval is
required from either the parent corporation or the subsidiary
corporation when the parent corporation merges any such
subsidiary corporation into itself.
Under the NYBCL, a sale, lease, exchange or other
disposition of all or substantially all of the assets of the
corporation, if not made in the usual or regular course of
business conducted by the corporation, must be authorized only by
the following procedure: (i) the board of directors must
authorize the proposed sale, lease, exchange or other disposition
and direct its submission to a vote of the shareholders,
(ii) notice of a meeting must be given to each shareholder of
record, whether or not entitled to vote, and (iii) the
shareholders must approve such sale, lease, exchange or other
disposition at a meeting of shareholders and may fix, or may
authorize the board to fix, any of the terms and conditions
thereof and the consideration to be received by the corporation
therefor, by a vote of the holders of a majority of all
outstanding shares entitled to vote thereon. Notwithstanding
shareholder approval, the board may abandon the proposed sale,
lease, exchange or other disposition without further action by
the shareholders, subject to the rights, if any, of third parties
under any contract.
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Rights of Appraisal
The DGCL provides for appraisal rights on the part of
the shareholders of a corporation only in the case of certain
mergers or consolidations and not (unless the certificate of
incorporation of a corporation so provides, which the certificate
of incorporation of the Company does not) in the case of other
mergers, a sale or transfer of all or substantially all of such
corporation's assets or an amendment to such corporation's
certificate of incorporation. In addition, the DGCL denies
appraisal rights to the shareholders of the surviving corporation
in a merger if the approval of the shareholders of the surviving
corporation was not required for the merger itself.
Under the NYBCL, a shareholder has a right to dissent
to any plan of merger or consolidation or any sale, lease,
exchange or other disposition of all or substantially all of the
assets of the corporation, provided that this right exists only
when the shareholder was entitled to vote on the proposed
corporate action.
Shareholders who properly dissent to any merger or
consolidation under the NYBCL also have the right to receive
payment of the fair value of their shares, provided that such
shareholders were entitled to vote and did not assent to any plan
of merger or consolidation to which the corporation is a party.
Exceptions to this rule apply in situations where such
shareholders are (i) holders of shares of the parent corporation
in a merger of a parent corporation and a subsidiary corporation,
(ii) holders of shares of the parent corporation in a merger or
consolidation of domestic and foreign corporations, or (iii)
holders of shares in a surviving corporation. Notwithstanding
the foregoing, shareholders of a surviving corporation do have
the right to receive payment of their shares if the merger or
consolidation alters or abolishes any preferential rights,
redemption or sinking fund rights, preemptive rights or excludes
or limits the rights of such holders to vote on any matter.
Furthermore, under the NYBCL a shareholder has a right
to receive payment of the fair value of his shares in the case of
any sale, lease, exchange or other disposition of all or
substantially all of the assets of a corporation which requires
shareholder approval, provided that shareholders do not have the
right to receive such payment in a transaction wholly for cash
where the shareholders' approval thereof is conditioned upon the
dissolution of the corporation and the distribution of
substantially all of the corporation's net assets to the
shareholders is made in accordance with their respective
interests within one year after the date of such transaction.
However, under both the DGCL and the NYBCL, no
dissenter's rights are available when shareholders would be
entitled to vote on a plan of merger or consolidation to which
the corporation is a party, where the corporation's shares are
listed on a national securities exchange or designated as a
national market system security on an interdealer quotation
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system by the National Association of Securities Dealers, Inc.
In addition, under the DGCL shareholders are not entitled to
appraisal rights where the shares were held of record by more
than 2,000 holders.
Indemnification of Directors and Officers
The DGCL provides in general that a corporation may
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, will not, of itself,
create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
In addition, the DGCL permits a corporation to
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit
if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation
and except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to
the extent that the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expense which that court shall deem proper.
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Furthermore, under the DGCL, the determination of
whether indemnification is proper shall be made (1) by a majority
vote of the directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (2) if there are
not such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the
shareholders of the Corporation.
The DGCL provides that the expenses (including
attorneys' fees) incurred by an officer or director in defending
any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the corporation as authorized
in this section. Such expenses (including attorneys' fees)
incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems
appropriate.
The DGCL further provides that the indemnification and
advancement of expenses provided by, or granted pursuant to, the
DGCL is not exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under
any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office.
The by-laws of the Company contain broad
indemnification provisions.
The NYBCL provides in general that a corporation may
indemnify any director or officer made, or threatened to be made,
a party to an action or proceeding (a "Proceeding") (other than
one by or in the right of the corporation to procure a judgment
in its favor), whether civil or criminal, including an action by
or in the right of any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise, which any director or
officer of the corporation served in any capacity at the request
of the corporation, against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorney fees
actually and necessarily incurred. In order to receive such
indemnification, the person must have acted in good faith, for a
purpose which he reasonably believed to be in, or in the case of
service for any other corporation or partnership, joint venture,
trust, employee benefit plan or other enterprise not opposed to
the best interests of the corporation and in addition, in
criminal actions or proceedings such person had no reasonable
cause to believe that his conduct was unlawful. The NYBCL
permits similar indemnification in the case of actions by or in
the right of the corporation, provided that indemnification is
not permitted in respect of (i) a threatened action or a pending
action which is settled or otherwise disposed of, or (ii) any
claim, issue or matter as to which such person has been adjudged
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to be liable to the corporation, unless and only to the extent
that the court in which the action was brought, or if no action
was brought, any court of competent jurisdiction, determines upon
application that, in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for
such portion of the settlement amount and expenses as such court
deems proper. In any case, the NYBCL provides that the
indemnification permitted under the NYBCL is not exclusive of any
other rights to which a director or officer seeking
indemnification or advancement of expenses may be entitled. No
indemnification may be provided to a director or officer under
the NYBCL if a judgment or other final adjudication adverse to
the director or officer establishes that his acts were committed
in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action, or that he
personally gained in fact a financial profit or other advantage
to which he was not legally entitled.
The by-laws of SES-NY also contain broad
indemnification provisions.
Anti-Takeover Provisions
The DGCL applies to a broad range of business
combinations between a Delaware corporation and an interested
shareholder. The DGCL definition of "business combination"
includes mergers, sales of assets, issuance of voting stock and
certain other transactions. An "interested shareholder" is
defined as any person who owns, directly or indirectly, fifteen
percent or more of the outstanding voting stock of a corporation.
The DGCL prohibits a corporation from engaging in a business
combination with an interested shareholder for a period of three
years following the date on which the shareholder became an
interested shareholder, unless (i) the board of directors
approved the business combination before the shareholder became
an interested shareholder, or the board of directors approved the
transaction that resulted in the shareholder becoming an
interested shareholder, (ii) upon consummation of the transaction
which resulted in the shareholder becoming an interested
shareholder, such shareholder owned at least 85% of the voting
stock outstanding when the transaction began other than shares
held by directors who are also officers and by certain employee
stock plans, or (iii) the board of directors approved the
business combination after the shareholder became an interested
shareholder and the business combination was approved at a
meeting by at least two-thirds of the outstanding voting stock
not owned by such shareholder.
The NYBCL applies to a broad range of business
combinations between a New York corporation and an interested
shareholder. The NYBCL defines a "business combination" to
include mergers, consolidations, sales, leases, exchanges of
shares, mortgages, pledges, securities reclassifications and
other transactions. An "interested shareholder" is defined as
any person who (i) is the beneficial owner, directly or
indirectly, of twenty percent or more of the outstanding voting
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stock of a corporation or (ii) is an affiliate or an associate of
such corporation and at any time within the five-year period
immediately prior to the date in question was a beneficial owner,
directly or indirectly, of twenty percent or more of the then
outstanding voting stock of such corporation. The NYBCL
prohibits a corporation from engaging in a business combination
with an interested shareholder for a period of five years
following such interested shareholder's stock acquisition date
except under limited circumstances, including when (i) such
business combination or the purchase of stock made by such
interested shareholder on such interested shareholder's stock
acquisition date is approved by the board of directors of such
corporation prior to such interested shareholder's stock
acquisition date, (ii) such business combination is approved by
the affirmative vote of the holders of a majority of the
outstanding voting stock not beneficially owned by such
interested shareholder or any affiliate or associate of such
interested shareholder at a meeting called for such purpose no
earlier than five years after such interested shareholder's stock
acquisition date.
This provision of the NYBCL does not apply (i) to any
business combination of a New York corporation that does not have
a class of voting stock registered with the Securities and
Exchange Commission pursuant to Section 12 of the Exchange Act
("Registered Voting Stock"), unless the certificate of
incorporation provides otherwise, or under certain circumstances,
such as (ii) to any business combination of a domestic
corporation whose amended certificate of incorporation provides
that Section 912 applies, which did not have a class of business
combination with an interested shareholder (as defined therein)
whose stock acquisition date is prior to the effective date of
such amendment, or (iii) to any business combination of a
domestic corporation the original certificate of incorporation or
any amended by-laws of which contain a provision expressly
electing not to be governed by Section 912 of the NYBCL , or (iv)
to any business combination of a domestic corporation with an
interested shareholder of such corporation who became an
interested shareholder inadvertently.
Rights of Inspection
Under the DGCL any shareholder has, upon written demand
under oath stating the purpose thereof, the right during the
usual business hours to inspect for any proper purpose the
corporation's stock ledger, list of shareholders and its other
books and records and make copies or extracts therefrom. A
proper purpose shall mean a purpose reasonably related to such
person's interest as a shareholder.
Under the NYBCL, every shareholder of record, upon at
least five days written demand, has the right to examine in
person or by agent or attorney, during usual business hours,
certain books and records, including the corporate minutes of the
proceedings of its shareholders, a records of shareholders,
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balance sheets and profit and loss statements. The shareholder
must request the inspection for a purpose which is in the
interest of the corporation or related to his status as a
shareholder.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The merger which will take place in connection with the
Reincorporation should, under current law, constitute a tax-free
reorganization under section 368 of the Internal Revenue Code of
1986, as amended (the "Code"). No ruling has been or is expected
to be requested from the Internal Revenue Service ("IRS") as to
the tax consequences of the Reincorporation.
Assuming that the Reincorporation constitutes a
tax-free reorganization, the federal income tax consequences to
the Company and its shareholders are as follows: (i) no gain or
loss will be recognized to the Company or SES-NY as a result of
this transaction; (ii) no gain or loss will be recognized to
shareholders who exchange their shares of the Company's Common
Stock solely for shares of SES-NY Common Stock; (iii) the tax
basis of shareholders in the Common Stock of SES-NY to be
received in this transaction will be the same basis shareholders
presently have in the Company's Common Stock; and (iv) the
holding period of shares of the Common Stock of SES-NY will
include the period during which the shares of Common Stock of the
Company were held, provided such shares of Common Stock of the
Company were held as capital assets on the effective date of the
Reincorporation.
The foregoing summary of federal income tax
consequences is included for general information only and does
not address the federal income tax consequences to all holders,
including those who acquired shares of Common Stock pursuant to
the exercise of employee stock options or otherwise as
compensation and corporations subject to the alternative minimum
tax. In view of the individual nature of tax consequences,
holders are urged to consult their own tax advisors as to the
specific tax consequences of the transaction, including the
application and effect of state, local and foreign income and
other tax laws.
In order to effect the Reincorporation, the affirmative
vote of a majority of the outstanding Common Stock and Class B
Common Stock, voting as a single class, must be obtained.
Accordingly, abstentions and broker non-votes will have the
effect of votes against the proposal. Unless otherwise directed,
proxies solicited by the Board of Directors will be voted FOR
this proposal.
The Board of Directors recommends a vote FOR the proposal to
approve the change of the Company's state of incorporation from
Delaware to New York.
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AMENDMENT TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE
UNDER THE 1989 INCENTIVE STOCK PLAN
The Sevenson Environmental Services, Inc. 1989 Incentive
Stock Plan (the "Plan") is administered by the Compensation
Committee of the Board of Directors. No member of the Committee
is eligible to participate in the Plan, with the exception of
non-discretionary grants of options to non-employee Directors.
The Plan authorizes the Compensation Committee to grant incentive
stock options, nonqualified stock options, stock appreciation
rights ("SARs") and restricted stock to key employees selected by
it. The approximate number of eligible employees is 200.
Currently, the maximum number of shares available for
issuance under the Plan is 320,000 shares of Common Stock. No
SARs have yet been granted, and no Restricted Stock has yet been
awarded under the Plan. All of the outstanding options are non-
qualified stock options. As of March 9, 1998, options for
308,200 shares have been granted and have not been terminated.
Therefore, the limited number of shares available for issuance
under the Plan are insufficient to provide additional grants
under the Plan. Accordingly, it is proposed to increase the
number of shares of Common Stock available for issuance by
280,000 additional shares, to 600,000 shares. The Company has
not made any grants which are contingent upon stockholder
approval of this proposal.
The Plan continues in effect until terminated by the
Company's Board of Directors. Incentive stock options may only
be granted until March 1, 1999. The option price per share may
not be less than the fair market value of the Common Stock at the
time the option is granted. The Plan also provides for the award
of shares of the Company's Common Stock subject to restrictions
on disposition ("Restricted Stock"). While the restrictions
remain in effect, the participant cannot sell or transfer the
shares of Restricted Stock, but he has the other rights of a
stockholder, including the right to vote and to receive
dividends. Restricted Stock awarded under the Plan is subject to
the terms and conditions of the Plan and to other terms and
conditions as the Compensation Committee specifies. A
participant will forfeit to the Company his Restricted Stock if
his employment with the Company and its subsidiaries terminates
for any reason other than death or disability, prior to the
expiration of the restrictions.
Shares awarded as Restricted Stock shall vest at such time
or times as the Compensation Committee may determine. The
Compensation Committee may remove or relax restrictions in its
discretion. If a participant dies or becomes totally disabled
while employed, all restrictions on such shares will lapse
automatically.
The Plan also provides for a one-time, non-discretionary
grant of options to purchase 4,800 shares of Common Stock to each
non-employee Director. See "Remuneration of Directors." Such
options granted to non-employee Directors may be exercised
beginning six months and will expire ten years after the date of
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<PAGE>
grant. The option price per share will be 100% of the fair
market value of a share of Common Stock at the time the option is
granted. Such options will expire sixty days after termination
of the Directors' term of office for any reason except death or
disability, unless the Director is reelected. If termination is
due to death or disability, the options will expire six months
after such termination.
The following is a brief summary of the federal income tax
aspects of the Plan, based on existing law and regulations which
are subject to change. The application of state and local income
taxes and other federal taxes is not discussed.
A participant who is granted an incentive stock option is
not required to recognize taxable income at the time of the grant
or at the time of exercise. Under certain circumstances,
however, a participant may be subject to the alternative minimum
tax with respect to the exercise of the incentive stock options.
The Company is not entitled to a deduction at the time of grant
or at the time of exercise. If a participant does not dispose of
the shares acquired pursuant to the exercise of an incentive
stock option before the latter of two years from the date of
grant of the option and one year from the transfer of the shares
to him, any gain or loss realized on a subsequent disposition of
the shares will be treated as capital gain or loss. Under such
circumstances, the Company will not be entitled to any deduction
for federal income tax purposes.
If a participant disposes of the shares received upon the
exercise of an incentive stock option either (1) within one year
of the transfer of the shares to him or (2) within two years
after the incentive stock option was granted, the participant
will generally recognize ordinary compensation income equal to
the lesser of (a) the difference between the fair market value of
the shares on the day the incentive stock option was exercised
and the purchase price of the shares, and (b) the amount of gain
realized on the sale. Any gain realized in excess of the
compensation income recognized, and any loss realized, will be a
capital gain or loss. If a participant is required to recognize
ordinary compensation income as a result of the disposition of
shares acquired on the exercise of an incentive stock option, the
Company, subject to general rules relating to the reasonableness
of the participant's compensation, will be entitled to a
deduction for an equivalent amount if the Company makes
appropriate arrangements for withholding of income taxes on such
compensation.
A participant who is granted a nonqualified stock option
does not have taxable income at the time of grant, but does have
taxable income at the time of exercise equal to the difference
between the exercise price of the shares and the fair market
value of the shares on the date of exercise. The Company is
entitled to a corresponding deduction for the same amount.
The grant of a SAR will produce no federal income tax
consequences for the participant or the Company. The exercise of
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a SAR results in taxable income to the participant, equal to the
difference between the exercise price of the SAR and the fair
market value of a share on the date of exercise, and the
corresponding deduction to the Company.
A participant who has been granted shares of Restricted
Stock will not be required to recognize taxable income, and the
Company will not be entitled to a deduction, at the time of the
grant, assuming that the restrictions constitute a substantial
risk of forfeiture for federal income tax purposes. When such
restrictions lapse, the participant will recognize taxable income
in an amount equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for such
shares. The Company will be entitled to a corresponding
deduction.
The closing price of the Company's Common Stock quoted on
the National Market tier of the NASDAQ Stock Market for March 9,
1998 was $9-7/8 per share.
The affirmative vote of a majority of the shares of Common
Stock and Class B Common Stock present and entitled to vote at
the Annual Meeting, voting together as a single class, is
required to approve this proposal. Abstentions and broker non-
votes will have the effect of votes against the proposal. Unless
otherwise directed, proxies solicited by the Board of Directors
will be voted FOR this proposal.
The Board of Directors recommends a vote FOR the amendment
to increase the number of shares available for issuance under the
Plan.
AUDITORS
The firm of Deloitte & Touche LLP, independent certified
public accountants, has audited the records of the Company for
the past fourteen years. The Board of Directors wishes to
continue the services of this firm for the fiscal year ending
December 31, 1998, and the stockholders' ratification of such
appointment is requested. If the stockholders do not ratify the
selection of Deloitte & Touche LLP by the affirmative vote of a
majority of votes cast at the Annual Meeting of Stockholders on
this proposal, selection of independent accountants will be
reconsidered by the Board of Directors.
Representatives of Deloitte & Touche LLP will attend the
Annual Meeting of Stockholders, will have the opportunity to make
a statement if they desire to do so, and will be available to
respond to appropriate questions.
The Board of Directors recommends a vote FOR the
ratification of the appointment of Deloitte & Touche LLP as
independent accountants to audit the accounts of the Company for
the fiscal year ending December 31, 1998.
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<PAGE>
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the
1999 Annual Meeting of Stockholders must be received by the
Secretary, Sevenson Environmental Services, Inc., 2749 Lockport
Road, Niagara Falls, New York 14302-0396, no later than
December 8, 1998.
OTHER MATTERS
At the time of the preparation of this Proxy Statement, the
Board of Directors of the Company did not contemplate or expect
that any business other than that pertaining to the subjects
referred to in this Proxy Statement would be brought up for
action at the meeting, but in the event that other business
calling for a stockholders' vote does properly come before the
meeting, the Proxies will vote thereon according to their best
judgment in the interest of the Company.
By Order of the Board of
Directors,
SEVENSON ENVIRONMENTAL
SERVICES, INC.
William J. McDermott
April 13, 1998 Secretary
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Exhibit A
PLAN OF MERGER
OF
SEVENSON ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
AND
SEVENSON ENVIRONMENTAL SERVICES OF NEW YORK, INC.
(a New York corporation)
THIS PLAN OF MERGER dated as of __________ __, 1998 (the
"Plan") is between Sevenson Environmental Services, Inc., a
Delaware corporation ("Sevenson-Delaware"), and Sevenson
Environmental Services of New York, Inc., a New York corporation
("Sevenson-New York"). Sevenson-Delaware and Sevenson-New York
are sometimes referred to herein as the "Constituent
Corporations."
RECITALS
A. Sevenson-Delaware is a corporation duly organized
and existing under the laws of the State of Delaware and has an
authorized capital of 21,000,000 shares, 12,000,000 of which are
designated "Common Stock," par value $.10 per share, 8,000,000 of
which are designated "Class B Common Stock," par value $.10 per
share and 1,000,000 of which are designated "Preferred Stock,"
par value $.10 per share. The Preferred Stock of Sevenson-
Delaware is undesignated as to series, powers, designations,
preferences, rights, and restrictions. As of the date hereof,
2,640,785 shares of Common Stock and 7,486,440 shares of Class B
Common Stock were issued and outstanding, and no shares of
Preferred Stock were issued and outstanding.
B. Sevenson-New York is a corporation duly organized
and existing under the laws of the State of New York and has an
authorized capital of 21,000,000 shares, 12,000,000 of which are
designated "Common Stock," par value $.01 per share, 8,000,000 of
which are designated "Class B Common Stock", par value $.01 per
share, and 1,000,000 of which are designated "Preferred Stock,"
par value $.01 per share. The Preferred Stock of Sevenson-
New York is undesignated as to series, rights, preferences and
limitations. As of the date hereof, 1998, 1 share of Common
Stock, which is held by Sevenson-Delaware, and no shares of Class
B Common Stock or Preferred Stock were issued and outstanding.
C. The Board of Directors of Sevenson-Delaware has
determined that, for the purpose of effecting the reincorporation
of Sevenson-Delaware in the State of New York, it is advisable
and in the best interest of Sevenson-Delaware and its
stockholders that Sevenson-Delaware merge with and into Sevenson-
New York upon the terms and conditions herein provided.
D. The Board of Directors of Sevenson-Delaware has
approved this Plan and has directed that this Plan be submitted
to a vote of its stockholders and executed by the undersigned
officers.
A-1
<PAGE>
NOW, THEREFORE, Sevenson-Delaware hereby adopts this
Plan subject to the terms and conditions hereinafter set forth.
I. MERGER
1.1 Merger. In accordance with the provisions of
this Plan , the Delaware General Corporation Law and the New York
Business Corporation Law, Sevenson-Delaware shall be merged with
and into Sevenson-New York (the "Merger"), the separate existence
of Sevenson-Delaware shall cease and Sevenson-New York shall
survive the Merger and shall continue to be governed by the laws
of the State of New York. Sevenson-New York shall be, and is
herein sometimes referred to as, the "Surviving Corporation."
Upon completion of the Merger, the name of the Surviving
Corporation shall be changed to "Sevenson Environmental
Services, Inc."
1.2 Filing and Effectiveness. The Merger shall become
effective when the following actions shall have been completed:
(a) This Plan shall have been adopted and approved by
the stockholders of Sevenson-Delaware in accordance with the
requirements of the Delaware General Corporation Law and the
New York Business Corporation Law;
(b) An executed Certificate of Ownership and Merger
meeting the requirements of the Delaware General Corporation Law
shall have been filed with the Secretary of State of the State of
Delaware; and
(c) An executed Certificate of Merger meeting the
requirements of the New York Business Corporation Law shall have
been filed with the Department of State of the State of New York.
The date and time when the Merger shall become
effective, as aforesaid, is herein called the "Effective Date of
the Merger."
1.3 Effect of the Merger. Upon the Effective Date of
the Merger, the separate existence of Sevenson-Delaware shall
cease and Sevenson-New York, as the Surviving Corporation: (i)
shall continue to possess all of its assets, rights, powers and
property as constituted immediately prior to the Effective Date
of the Merger, (ii) shall succeed, without other transfer, to all
of the assets, rights, powers and property of Sevenson-Delaware,
(iii) shall continue to be subject to all of the debts,
liabilities and obligations of Sevenson-New York as constituted
immediately prior to the Effective Date of the Merger, (iv) shall
succeed, without other transfer, to all of the debts, liabilities
and obligations of Sevenson-Delaware in the same manner as if
Sevenson-New York had itself incurred them, and (v) shall be
subject to all actions previously taken by its and Sevenson-
Delaware's Board of Directors, all as more fully provided under
the applicable provisions of the Delaware General Corporation Law
and the New York Business Corporation Law.
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<PAGE>
II. CHARTER DOCUMENTS , DIRECTORS AND OFFICERS
2.1 Certificate of Incorporation. Subject to the
change of name of the Surviving Corporation contemplated by
Section 1.1 hereof, the Certificate of Incorporation of Sevenson-
New York as in effect immediately prior to the Effective Date of
the Merger shall continue in full force and effect as the
Certificate of Incorporation of the Surviving Corporation until
duly amended in accordance with the provisions thereof and
applicable law.
2.2 Bylaws. The Bylaws of Sevenson-New York as in
effect immediately prior to the Effective Date of the Merger
shall continue in full force and effect as the Bylaws of the
Surviving Corporation until duly amended in accordance with the
provisions thereof and applicable law.
2.3 Directors and Officers. The directors and
officers of Sevenson-Delaware immediately prior to the Effective
Date of the Merger shall be the directors and officers of the
Surviving Corporation until their successors shall have been duly
elected and qualified or until as otherwise provided by law, or
the Certificate of Incorporation of the Surviving Corporation or
the Bylaws of the Surviving Corporation.
III. MANNER OF CONVERSION OF STOCK
3.1 Sevenson-Delaware Common Stock. Upon the
Effective Date of the Merger: (i) each share of Sevenson-Delaware
Common Stock issued and outstanding immediately prior thereto
shall, by virtue of the Merger and without any action by the
Constituent Corporations, the holder of such share or any other
person, be converted into and exchanged for one (1) fully paid
and nonassessable share of Common Stock, par value $.01 per
share, of the Surviving Corporation; and (ii) each share of
Sevenson-Delaware Class B Common Stock issued and outstanding
immediately prior thereto shall, by virtue of the Merger and
without any action by the Constituent Corporations, the holder of
such share or any other person, be converted into and exchanged
for one (1) fully paid and non-assessable share of Class B Common
Stock, par value $.01 per share, of the Surviving Corporation.
3.2 Sevenson-Delaware Options, Stock Purchase Rights
and Convertible Securities.
(a) Upon the Effective Date of the Merger, the
Surviving Corporation shall assume and continue the stock option
plans and all other employee benefit plans of Sevenson-Delaware.
Each outstanding and unexercised option or other right to
purchase or security convertible into the Surviving Corporation's
Common Stock shall become an option or right to purchase or a
security convertible into the Surviving Corporation's Common
Stock on the basis of one (1) share of the Surviving
Corporation's Common Stock for each share of Sevenson-Delaware
Common Stock issuable pursuant to any such option, stock purchase
right or convertible security, on the same terms and conditions
A-3
<PAGE>
and at an exercise price per share equal to the exercise price
applicable to any such Sevenson-Delaware option, stock purchase
right or convertible security at the Effective Date of the
Merger. There are no outstanding options, purchase rights for or
securities convertible into Class B Common Stock or Preferred
Stock of Sevenson-Delaware.
(b) A number of shares of the Surviving Corporation's
Common Stock shall be reserved for issuance upon the exercise of
options, stock purchase rights and convertible securities equal
to the number of shares of Sevenson-Delaware Common Stock so
reserved immediately prior to the Effective Date of the Merger.
3.3 Sevenson-New York Common Stock. Upon the
Effective Date of the Merger, each share of Common Stock, par
value $0.01 per share, of Sevenson-New York issued and
outstanding immediately prior thereto shall, by virtue of the
Merger and without any action by the Constituent Corporations,
the holder of such shares or any other person, be canceled and
returned to the status of authorized but unissued shares.
3.4 Exchange of Certificates. After the Effective
Date of the Merger, each holder of an outstanding certificate
representing shares of Sevenson-Delaware Common Stock or Class B
Common Stock may, at such stockholder's option, surrender the
same for cancellation to [American Stock Transfer & Trust
Company], as exchange agent (the "Exchange Agent"), and each such
holder shall be entitled to receive therefor a certificate or
certificates representing the number of shares of the Surviving
Corporation's Common Stock or Class B Common Stock, as the case
may be, into which the surrendered shares were converted as
herein provided. Unless and until so surrendered, each
outstanding certificate theretofore representing shares of
Sevenson-Delaware Common Stock or Class B Common Stock shall be
deemed for all purposes to represent the number of shares of the
Surviving Corporation's Common Stock or Class B Common Stock, as
the case may be, into which such shares of Sevenson-Delaware
Common Stock or Class B Common Stock were converted in the
Merger.
The registered owner on the books and records of the
Surviving Corporation or the Exchange Agent of any shares of
stock represented by such outstanding certificate shall, until
such certificate shall have been surrendered for transfer or
conversion or otherwise accounted for to the Surviving
Corporation or the Exchange Agent, have and be entitled to
exercise any voting and other rights with respect to and to
receive dividends and other distributions upon the shares of
Common Stock or Class B Common Stock of the Surviving Corporation
represented by such outstanding certificate as provided above.
Each certificate representing Common Stock or Class B
Common Stock of the Surviving Corporation so issued in the Merger
shall bear the same legends, if any, with respect to the
restrictions on transferability as the certificates of Sevenson-
Delaware so converted and given in exchange therefore, unless
otherwise determined by the Board of Directors of the Surviving
A-4
<PAGE>
Corporation in compliance with applicable laws, or other such
additional legends as agreed upon by the holder and the Surviving
Corporation.
If any certificate for shares of Sevenson-New York
Common Stock or Class B Common Stock is to be issued in a name
other than that in which the certificate surrendered in exchange
therefor is registered, it shall be a condition of issuance
thereof that the certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer, that such
transfer otherwise be proper and comply with applicable
securities law and that the person requesting such transfer pay
to Sevenson-New York or the Exchange Agent any transfer or other
taxes payable by reason of issuance of such new certificate in a
name other than that of the registered holder of the certificate
surrendered or establish to the satisfaction of Sevenson-New York
that such tax has been paid or is not payable.
IV. GENERAL
4.1 Further Assurances. From time to time, as and when
required by Sevenson-New York or by its successors or assigns,
there shall be executed and delivered on behalf of Sevenson-
Delaware such deeds and other instruments, and there shall be
taken or caused to be taken by Sevenson-New York and Sevenson-
Delaware such further and other actions as shall be appropriate
or necessary in order to vest or perfect in or conform of record
or otherwise by Sevenson-New York the title to and possession of
all the property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of Sevenson-Delaware
and otherwise to carry out the purposes of this Plan, and the
officers and directors of Sevenson-New York are fully authorized
in the name and on behalf of Sevenson-Delaware or otherwise to
take any and all such action and to execute and deliver any and
all such deeds and other instruments.
4.2 Abandonment. At any time before the Effective
Date of the Merger, this Plan may be terminated and the Merger
may be abandoned for any reason whatsoever by the Board of
Directors of Sevenson-Delaware, notwithstanding the approval of
this Plan by the stockholders of Sevenson-Delaware.
4.3 Amendment. The Board of Directors of Sevenson-
Delaware may amend this Plan at any time prior to the Effective
Date of the Merger, provided that an amendment made subsequent to
the adoption of this Plan by the stockholders of Sevenson-
Delaware shall not: (a) alter or change the amount or kind of
shares, securities, cash, property and/or rights to be received
in exchange for or on conversion of all or any of the shares of
any class or series thereof of either Constituent Corporation;
(b) alter or change any term of the Certificate of Incorporation
of the Surviving Corporation to be effected by the Merger; or (c)
alter or change any of the terms and conditions of this Plan if
such alteration or change would adversely affect the holders of
any class or series of capital stock of any Constituent
Corporation.
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<PAGE>
4.4 Availability of Plan. Executed copies of this
Plan will be on file at the principal place of business of the
Surviving Corporation at 2749 Lockport Road, Niagara Falls,
New York 14302 and copies thereof will be furnished to any
stockholder of Sevenson-Delaware, upon request and without cost.
4.5 Governing Law. This Plan shall in all respects be
construed, interpreted and enforced in accordance with and
governed by the laws of the State of New York and, so far as
applicable, the provisions of the Delaware General Corporation
Law.
IN WITNESS WHEREOF, this Plan having first been
approved by the resolutions of the Board of Directors of Sevenson
Environmental Services, Inc., a Delaware corporation, is hereby
executed on behalf of such corporation and attested by its
respective officers thereunto duly authorized.
SEVENSON ENVIRONMENTAL SERVICES, INC.
a Delaware corporation
By:_____________________________________
Michael A. Elia, President and
Chief Executive Officer
ATTEST:
_______________________________
William J. McDermott, Secretary
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Exhibit B
CERTIFICATE OF INCORPORATION
OF
SEVENSON ENVIRONMENTAL SERVICES OF NEW YORK, INC.
Under Section 402 of the Business Corporation Law
For the purposes of forming a corporation under the
Business Corporation Law of the State of New York, the
undersigned hereby certifies:
FIRST. The name of the corporation shall be Sevenson
Environmental Services of New York, Inc.
SECOND. The purpose of the corporation is to engage
in any lawful act or activity for which corporations may be
organized under the New York Business Corporation Law, provided
that it is not formed to engage in any act or activity requiring
the consent or approval of any state official, department, board,
agency or other body without such consent or approval first being
obtained.
THIRD. The office of the corporation is to be
located in the County of Niagara, New York.
FOURTH. The aggregate number of shares which the
corporation has authority to issue is 21,000,000, consisting of
1,000,000 shares of Preferred Stock with a par value of $.01 per
share ("Preferred Stock"), 12,000,000 shares of Common Stock with
a par value of $.01 per share ("Common Stock"), and 8,000,000
shares of Class B Common Stock with a par value of $.01 per share
("Class B Common Stock").
The relative rights, preferences and limitations of the
shares of each class and the authority of the Board of Directors
of the corporation to establish and to designate series of the
Preferred Stock and to fix the variations in the relative rights,
preferences and limitations as between such series, shall be as
follows:
1. Preferred Stock. The Board of Directors of the
corporation is authorized, subject to limitations prescribed by
law and the provisions of this Article FOURTH, to provide for the
issuance of shares of Preferred Stock in series, and by filing a
Certificate of Amendment of this Certificate of Incorporation
pursuant to Section 502(d) of the New York Business Corporation Law,
to establish from time to time the number of shares to be included
in each such series, and to fix the designation, relative rights,
preferences and limitations of the shares.
2. Common Stock.
(a) Common Stock and Class B Common Stock shall
be identical in all respects and shall have equal rights and
privileges, except as otherwise provided in this Article FOURTH.
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(b) Cash or Property Dividends. Subject to all
of the rights of any Preferred Stock outstanding from time to
time, no cash or property dividend shall be declared or paid to
the holders of Class B Common Stock unless the corporation shall
at the same time also declare and pay to the holders of Common
Stock a cash or property dividend per share at least 110% of the
dividend per share paid to the holders of the Class B Common
Stock. The corporation may pay cash or property dividends to
holders of Common Stock in excess of cash or property dividends
paid, or without paying cash or property dividends, to holders of
Class B Common Stock.
(c) Stock Dividends. If at any time a stock
dividend is to be paid in Class B Common Stock or Common Stock,
such stock dividend may be declared and paid only as follows:
(i) So long as no Common Stock is issued and
outstanding, Common Stock may be paid to holders of Class B
Common Stock;
(ii) So long as shares of both classes of
common stock are issued and outstanding, Common Stock shall be
paid only to holders of Common Stock and Class B Common Stock
shall be paid only to holders of Class B Common Stock, and
whenever a stock dividend is paid, the same number of shares
shall be paid in respect of each outstanding share of Common
Stock or Class B Common Stock.
(d) Stock Subdivisions and Combinations. The
corporation shall not subdivide or combine shares of either class
of common stock without at the same time making a proportionate
subdivision or combination of the other class of common stock.
(e) Voting. Subject to the rights of the holders
of any Preferred Stock outstanding from time to time, voting
power shall be divided between the Common Stock and the Class B
Common Stock as follows:
(i) With respect to the election of
directors, holders of Common Stock voting as a separate class
shall be entitled, subject to subparagraph 2(e)(v) of this
Article FOURTH, to elect that number of directors which
constitutes 25% of the authorized number of members of the Board
of Directors and, if such 25% is not a whole number, then the
holders of Common Stock shall be entitled to elect the nearest
whole number of directors that is at least 25% of such
membership. Holders of Class B Common Stock, voting as a
separate class, shall be entitled, subject to subpara-
graph 2(e)(vi) of this Article FOURTH, to elect the remaining
directors. Directors elected by the holders of Common Stock,
voting as a separate class, and directors elected by one or more
other directors to fill vacancies created by the death,
resignation or removal of directors elected by such class, shall
be designated as "Class A Directors." Directors elected by the
holders of Class B Common Stock, voting as a separate class, and
directors elected by one or more other directors to fill
vacancies created by the death, resignation or removal of
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directors elected by such class, shall be designated as "Class B
Directors." Directors elected by the holders of Common Stock and
Class B Common Stock, voting together as a single class pursuant
to subparagraph 2(e)(v) or subparagraph 2(e)(vi) of this Article
FOURTH, and directors elected by one or more other directors to
fill vacancies created by death, resignation or removal of
directors so elected, shall be designated as "Joint Directors."
(ii) Holders of Common Stock shall be
entitled to vote as a separate class on the removal, with or
without cause, of any Class A Director. Holders of Class B
Common Stock shall be entitled to vote as a separate class on the
removal, with or without cause, of any Class B Director. Holders
of Common Stock and Class B Common Stock shall be entitled to
vote together as a single class, as provided for in subparagraph
2(e)(vii) of this Article FOURTH, on the removal, with or without
cause, of any Joint Director.
(iii) The holders of the Common Stock and the
holders of the Class B Common Stock shall be entitled to vote as
separate classes only (A) when required by law to do so
irrespective of the limitations placed herein on the voting
rights of such shareholders, or (B) where a separate class vote
is required by specific provision therefor in this Certificate of
Incorporation.
(iv) Any vacancy in the office of a Class A
Director may be filled by a vote of holders of Common Stock
voting as a separate class. Any vacancy in the office of a
Class B Director may be filled by a vote of holders of Class B
Common Stock voting as a separate class. Any vacancy in the
office of a Joint Director may be filled by a vote of holders of
Common Stock and Class B Common Stock, voting together as a
single class as provided for in subparagraph 2(e)(vii) of this
Article FOURTH. Notwithstanding anything in this paragraph 2(e)
of this Article FOURTH to the contrary, any vacancy in the office
of a director of any class may be filled by the vote of the
majority of the directors in such class, by the sole remaining
director in such class or, in the event that there are no
remaining directors in such class, by the vote of the majority of
the other directors or by the sole remaining director,
regardless, in each instance, of any quorum requirements, set out
in the By-laws. Any director elected by some or all of the
directors to fill a vacancy shall serve until the next annual
meeting of shareholders and until his or her successor has been
elected and has qualified. If permitted by the By-laws, the
Board of Directors may increase the number of directors and any
vacancy so created may be filled by the Board of Directors;
provided, that, so long as the holders of Common Stock have the
rights provided in subparagraph 2(e)(i) and 2(e)(iv) of this
Article FOURTH in respect of the last preceding annual meeting of
shareholders, the Board of Directors may be so enlarged by the
Board of Directors only to the extent that at least 25% of the
enlarged Board consists of Class A Directors.
(v) Holders of Common Stock will not have the
rights to elect directors set forth in subparagraphs 2(e)(i) and
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2(e)(iv) of this Article FOURTH if, on the record date for the
shareholder meeting at which such directors are to be elected, or
on the record date for any written consent of shareholders
pursuant to which directors are elected, the number of issued and
outstanding shares of Common Stock is less than 10% of the
aggregate number of issued and outstanding shares of Common Stock
and Class B Common Stock. In such case, all directors to be
elected shall be elected by holders of Common Stock and Class B
Common Stock voting together as a single class, provided that,
with respect to said election, the holders of Common Stock shall
have one vote per share and holders of Class B Common Stock shall
have ten votes per share.
(vi) Holders of Class B Common Stock will not
have the rights to elect directors set forth in subparagraphs
2(e)(i) and 2(e)(iv) of this Article FOURTH if, on the record
date for the shareholder meeting at which such directors are to
be elected, or on the record date for any written consent of
shareholders pursuant to which directors are elected, the number
of issued and outstanding shares of Class B Common Stock is less
than 12.5% of the aggregate number of issued and outstanding
shares of Common Stock and Class B Common Stock. In such case,
holders of Common Stock, voting as a separate class, shall have
the right to elect 25% of the members of the Board of Directors
as provided in subparagraph 2(e)(i) of this Article FOURTH, and
holders of Common Stock and holders of Class B Common Stock
voting together as a single class shall be entitled to elect the
remaining directors, provided that, with respect to said
election, the holders of Common Stock shall have one vote per
share and holders of Class B Common Stock shall have ten votes
per share.
(vii) Holders of Common Stock and Class B Common
Stock shall in all matters not otherwise specified in this
paragraph 2(e) of this Article FOURTH vote together as a single
class provided that in connection with such matters the holders
of Common Stock shall have one vote per share and the holders of
Class B Common Stock shall have ten votes per share.
(viii) Subject to the rights of the holders of
any Preferred Stock outstanding from time to time and
notwithstanding anything in this paragraph 2(e) of this Article
FOURTH to the contrary, the holders of Common Stock shall have
exclusive voting power on all matters at any time when no Class B
Common Stock is issued and outstanding, and the holders of
Class B Common Stock shall have exclusive voting power on all
matters at any time when no Common Stock is issued and
outstanding.
(f) Conversion. Each holder of record of Class B
Common Stock may at any time or from time to time, in such
holder's sole discretion and at such holder's option, convert any
whole number or all of such holder's shares of Class B Common
Stock into fully paid and non-assessable shares of Common Stock
at the rate of one share of Common Stock for each share of
Class B Common Stock surrendered for conversion. Any such
conversion may be effected by any holder of Class B Common Stock
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surrendering such holder's certificate or certificates for the
Class B Common Stock to be converted, duly endorsed, at the
office of the corporation or any transfer agent for the Class B
Common Stock, together with a written notice to the corporation
at such office that such holder elects to convert all or a
specified number of shares of Class B Common Stock and stating
the name or names in which such holder desires the certificate or
certificates for such Common Stock to be issued. Promptly
thereafter, the corporation shall issue and deliver to such
holder, or such holder's nominee or nominees, a certificate or
certificates for the number of shares of Common Stock to which
such holder shall be entitled as aforesaid. Such conversion
shall be deemed to have been made at the close of business at the
date of such surrender and the person or persons entitled to
receive the Common Stock issuable on such conversion shall be
treated for all purposes as the record holder or holders of such
Common Stock on that date.
Authorized but unissued Common Stock, to the extent
that such stock may be necessary to meet any exercise of the
conversion privilege of issued and outstanding Class B Common
Stock, shall be held by the corporation without the necessity of
a declaration by the Board of Directors, in reserve, to be issued
only in satisfaction of the conversion privilege of the issued
and outstanding Class B Common Stock. No Class B Common Stock
may be issued unless the authorized but unissued and unreserved
shares of Common Stock are sufficient to satisfy the conversion
privilege which will exist with respect to such Class B Common
Stock when issued.
(g) Liquidation. In the event of any liquidation,
dissolution or winding up of the corporation, the holders of the
Common Stock and the holders of the Class B Common Stock shall
participate equally per share in any distribution to
shareholders, if any, after payment in full to the holders of
Preferred Stock of the preferential amounts, if any, to which
they are entitled.
FIFTH. The Secretary of State of the State of
New York is designated as the agent of the corporation, upon whom
process against it may be served, and the post office address to
which the Secretary of State shall mail a copy of any such
process served upon him or her is c/o Phillips, Lytle, Hitchcock,
Blaine & Huber LLP, 3400 Marine Midland Center, Buffalo, New York
14203.
SIXTH. Subject to any limitation provided in any
statute of the State of New York, the corporation in furtherance
of its corporate purposes shall have all the powers now or
hereafter conferred by statute upon, or otherwise legally
attributable to, corporations formed under the New York Business
Corporation Law.
SEVENTH. To the fullest extent that the New York
Business Corporation Law, as the same exists or may hereafter be
amended, permits elimination or limitation of the liability of
directors, no director of the corporation shall be liable to the
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corporation or its shareholders for damages for any breach of
duty in such capacity. Any repeal or modification of this
Article by the shareholders of the corporation shall be
prospective only and shall not adversely affect any elimination
or limitation of the personal liability of a director of the
corporation for acts or omissions occurring prior to the
effective date of such repeal or modification.
IN WITNESS WHEREOF, the undersigned has made and signed
this Certificate of Incorporation this day of _________, 1998
and the undersigned affirms the statements contained herein as
true under penalties of perjury.
______________________________
Incorporator
3400 Marine Midland Center
Buffalo, New York 14203
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<PAGE>
CERTIFICATE OF INCORPORATION
OF
Under Section 402 of the Business Corporation Law
Filer
Phillips, Lytle, Hitchcock, Blaine & Huber LLP
3400 Marine Midland Center
Buffalo, New York 14203
B-7
<PAGE>
Exhibit C
BY-LAWS
OF
SEVENSON ENVIRONMENTAL SERVICES, INC.
ARTICLE I
OFFICES
Section 1. The Corporation's principal office shall be
in the City of Niagara Falls, County of Niagara, State of
New York or such other location within or outside of the State of
New York as the board of directors of the Corporation (the
"Board") shall determine.
Section 2. The Corporation may also have offices at
such other places both within and outside of the State of
New York as the Board may from time to time determine or the
business of the Corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. The annual meeting of the shareholders for
the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held at
such time and place, either within or outside of the State of
New York, as shall be determined by the Board and stated in the
notice of the meeting. The meeting may be adjourned from time to
time and place to place until its business is completed.
Section 2. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute
or by the Certificate of Incorporation, may be called by the
President or the Chairman of the Board, and shall be called by
the President or Secretary at the request in writing of a
majority of the entire Board. Such request shall state the
purpose or purposes of the proposed meeting. Business transacted
at any special meeting of shareholders shall be limited to the
purposes stated in the notice.
Section 3. Notice of every meeting of the shareholders
stating the place, date and hour of the meeting shall be given to
each shareholder entitled to vote at such meeting not less than
ten or more than fifty days before the date of the meeting.
Notice of a special meeting shall also state the purpose or
purposes for which it is called and the person or persons at
whose direction it is being called.
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Section 4. The officer or agent who has charge of the
stock ledger or transfer book of the Corporation shall prepare
and make, at least ten days before every meeting of shareholders,
a complete list of the shareholders entitled to vote at the
meeting, arranged in alphabetical order and showing the address
of each shareholder and the number of shares registered in the
name of each shareholder. Such list shall be open to the
examination of any shareholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified
in the notice of the meeting, or if not so specified, at the
place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the
whole time thereof and may be inspected by any shareholder who is
present.
Section 5. Each outstanding share of common stock
shall be entitled to vote in accordance with the provisions for
voting specified in the Certificate of Incorporation or required
by law. In determining the number of shares of stock required by
law, by the Certificate of Incorporation or by these by-laws to
be represented for any purpose, or to determine the outcome of
any matter submitted to shareholders for approval or consent, the
number of shares represented or voted shall be weighted in
accordance with the provisions of the Certificate of
Incorporation regarding voting powers of each class of stock.
Any reference in these by-laws to a specific fraction or
percentage of the voting stock shall be deemed to refer to a
fraction or percentage of the voting power of such stock. Issues
shall be determined by a class vote only when a class vote is
required by law or by the Certificate of Incorporation.
Section 6. The holders of a majority of the voting
stock issued and outstanding, present in person or represented by
proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise
provided by law or by the Certificate of Incorporation. If a
quorum shall fail to attend any meeting of the shareholders, the
shareholders present at such meeting may adjourn the meeting to
another place, date or time, without notice other than
announcement at the meeting. At such adjourned meeting at which
a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as
originally notified. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the
meeting. If a notice of any adjourned special meeting of
shareholders is sent to all shareholders entitled to vote
thereat, stating that it will be held with those present
constituting a quorum, then, except as otherwise required by law,
those present or represented at such adjourned meeting shall
constitute a quorum if they are the holders of at least one-third
of the voting stock issued and outstanding.
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Section 7. When a quorum is present at any meeting,
any question brought before that meeting shall be determined by
the vote of a majority of the stock voting on such question,
present in person or represented by proxy, unless the question is
one upon which, by express provision of law or of the Certificate
of Incorporation, a different vote is required, in which case
such express provision shall govern and control the decision of
such question.
Section 8. The order of business and all other matters
of procedure at every meeting of the shareholders shall be
determined by the presiding officer. The Board shall appoint two
or more inspectors of election to serve at every meeting of the
shareholders at which directors are to be elected.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall
constitute the entire Board shall be eight. The term "entire
Board" as used in these By-Laws means the total number of
directors which the Corporation would have if there were no
vacancies. Each director elected shall hold office until his
successor is elected and qualified.
Section 2. Vacancies and newly created directorships
shall be filled in accordance with the provisions of the
Certificate of Incorporation.
Section 3. The business and affairs of the Corporation
shall be managed by or under the direction of the Board.
Section 4. Regular meetings of the Board may be held
without notice at such times and at such places as shall from
time to time be determined by the Board.
Section 5. Special meetings of the Board may be called
by the Chairman of the Board, the President, or by any officer of
the Corporation upon the request of a majority of the entire
Board. Notice of every special meeting of the Board shall be
given to each director at his regular place of business, or at
such other address as shall have been furnished by him for that
purpose. Such notice shall be given at least twenty-four hours
before the meeting by telephone or by being personally delivered
or telegraphed, or shall be given at least four business days
before the meeting by mail. Notice is complete when sent. Such
notice need not include a statement of the business to be
transacted at, or the purpose of, any such meeting.
Section 6. Except as otherwise provided by statute or
in these by-laws, the presence of a majority of the entire Board
shall be necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the
directors present at any meeting at which there is a quorum shall
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be deemed the act of the Board. Less than a quorum may adjourn
any meeting of the Board from time to time, without notice other
than announcement at the meeting.
Section 7. UnLess otherwise restricted by the
Certificate of Incorporation or these by-laws, any action
required or permitted to be taken at any meeting of the Board or
of any committee thereof may be taken without a meeting if all
members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board or committee.
Section 8. Unless otherwise restricted by the
Certificate of Incorporation or these by-laws, members of the
Board or any committee thereof may participate in a meeting of
the Board or any committee by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at
the meeting.
Section 9. The Board may, by resolution passed by a
majority of the entire Board, designate one or more committees,
each committee to consist of one or more of the directors. The
Board may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member
at any meeting of the committee. Any such committee, to the
extent provided in the resolution of the Board, shall have and
may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation and may
authorize the seal of the Corporation to be affixed to all papers
which may require it; but no such committee shall have any power
or authority the exercise of which by such committee is
proscribed by law. Such committee or committees shall have such
names or names as may be determined from time to time by
resolution adopted by the Board.
Section 10. Unless otherwise provided by the Board, a
majority of the members of any committee appointed by the Board
shall constitute a quorum at any meeting thereof and the act of a
majority of the members present at a meeting at which a quorum is
present shall be the act of such committee. Any such committee
shall, subject to any rules prescribed by the Board, prescribe
its own rules for calling, giving notice of and holding meetings
and its method of procedure at such meetings. Each committee
shall keep regular minutes of its meetings and report the same to
the Board when required by the Board.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the
applicable law, the Certificate of Incorporation or of these
bylaws, notice is required to be given to any director or
shareholder, it shall not be construed to exclusively mean
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personal notice, but such notice may also be given in writing, by
mail, addressed to such director or shareholder at his address as
it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at
the time when the same shall be deposited in the United States
mail. Notice to directors may also be given telegram, telex or
similar means, in which case it shall be deemed to have been
given when transmitted.
Section 2. Whenever any notice is required to be given
under the provisions of applicable law, the Certificate of
Incorporation or of these by-laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the Corporation shall be
appointed or elected by the Board. The officers shall be a
President, such number of Vice-Presidents as the Board may from
time to time determine, a Secretary, and a Treasurer and, if the
Board so determines, a Chairman of the Board and a Vice Chairman
of the Board. Any person may hold two or more offices. The
Board may also appoint such other officers and agents as it shall
deem appropriate.
Section 2. If appointed or elected by the Board, the
Chairman of the Board shall have the general powers and duties of
supervision and management of the business of the Corporation
which usually pertain to his office.
Section 3. The President shall be the chief executive
officer of the Corporation. He shall have the general powers and
duties of supervision and management of the business and affairs
of the Corporation which normally pertain to his office and shall
perform such other duties and have such other powers as the Board
may from time to time prescribe. He shall see that all orders
and resolutions of the Board are carried into effect. The
President shall preside at all meetings of the shareholders and
of the Board.
Section 4. In the absence of the President or in the
event of his inability or refusal to act, the Vice-President (or
in the event there be more than one Vice-President, the Vice
Presidents in the order designated by the Board, or, in the
absence of any designation, then in the order of their election)
shall perform the duties of the President and, when so acting,
shall have all the powers of and be subject to all the
restrictions upon the President.
Section 5. The officers, agents and employees of the
Corporation shall perform the duties and exercise the powers
usually incident to the offices or positions held by them
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respectively and/or such other duties and powers as may be
assigned to them from time to time by the Board or the President.
Section 6. The salaries of all officers of the
Corporation shall be fixed by the Board.
Section 7. The officers shall hold office until their
successors are chosen and qualify. Any officer elected or
appointed by the Board may be removed at any time by the Board
with or without cause. Any vacancy occurring in any office of
the Corporation shall be filled by the Board.
Section 8. Except as otherwise provided by the Board,
any one of the following officers, viz.: the Chairman of the
Board, the President, Vice-president and Secretary, shall have
the power in the name of or on behalf of the Corporation to
execute proxies for the voting of stock owned by the Corporation
in any other corporation for use at any meeting of shareholders
of such other corporation.
ARTICLE VI
INDEMNIFICATION
Section 1. The Corporation shall, to the fullest
extent permitted by applicable law, as amended from time to time,
indemnify each person made, or threatened to be made, a party to
any action or proceeding, whether civil, criminal, administrative
or investigative ("Proceeding") by reason of the fact that such
person, such person's testator or intestate, is or was a director
or officer of the Corporation, or, while a director or officer,
serves or served, at the request of the Corporation, any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise in any capacity, against judgments,
fines, penalties, amounts paid in settlement and reasonable
expenses (including attorneys' fees, costs and charges) incurred
in connection with such threatened or pending Proceeding, or any
appeal therein; provided that no such indemnification shall be
made if a judgment or other final adjudication adverse to such
person establishes that (i) his or her acts were committed in bad
faith or were the result of active and deliberate dishonesty and
were material to the cause of action so adjudicated, or (ii) he
or she personally gained in fact a financial profit or other
advantage to which he or she was not legally entitled, and
provided further that no such indemnification shall be required
with respect to any settlement or other nonadjudicated
disposition of any threatened or pending Proceeding unless the
Corporation has given its prior consent to such settlement or
other disposition.
Section 2. The Corporation shall, from time to time,
advance or promptly reimburse upon request any director or
officer seeking indemnification hereunder the funds necessary for
payment of expenses (including attorneys' fees, costs and
charges) reasonably incurred in connection with any threatened or
pending Proceeding in advance of the final disposition thereof
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upon receipt of a written undertaking by or on behalf of such
person to repay such amount if such person is ultimately found
not to be entitled to indemnification or, where indemnification
is granted, to the extent the expenses so advanced or reimbursed
exceed the amount to which such person is entitled.
Section 3. Nothing herein shall limit or affect any
right of any person otherwise than hereunder to indemnification
or to advancement of expenses (including attorneys' fees, costs
and charges) under any statute, rule, regulation, certificate of
incorporation, by-law, resolution of directors or shareholders,
insurance policy, contract or otherwise.
Section 4. The Corporation is authorized to enter into
agreements with any of its directors or officers to reflect or
confirm the rights and benefits contained in this Article and to
extend other additional rights to indemnification and to
advancement of expenses to any such person to the fullest extent
permitted by applicable law, and to set forth procedures for any
such person to obtain advancement of expenses and
indemnification, but the existence of any such agreement or the
failure to enter into any such agreement shall not adversely
affect or limit the rights of any such person pursuant to this
Article or otherwise.
Section 5. For the purposes of this Article, the
Corporation shall be deemed to have requested a person to serve
an employee benefit plan where the performance by such person of
his or her duties to the Corporation also imposes duties on, or
otherwise involves services by, such person to the plan or
participants or beneficiaries of the plan, and excise taxes
assessed on a person with respect to an employee benefit plan
pursuant to applicable law shall be considered indemnifiable
expenses.
Section 6. If a request to be indemnified or for the
advancement of expenses pursuant to this Article is not paid in
full by the Corporation within 30 days after a written claim has
been received by the Corporation, the person seeking
indemnification or advancement of expenses may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the person seeking indemnification or advancement of
expenses shall be entitled also to be paid the expenses of
prosecuting such claim. In any such judicial proceeding, the
Corporation shall have the burden of proving by the preponderance
of the evidence that the person seeking indemnification or
advancement of expenses is not entitled to indemnification or
advances hereunder. Neither the failure of the Corporation
(including the Board, independent legal counsel or shareholders)
to have made a determination that the person seeking
indemnification or advancement of expenses is entitled to
indemnification or advancement of expenses in the circumstances
nor an actual determination by the Corporation (including the
Board, independent legal counsel or shareholders) that the person
seeking indemnification or advancement of expenses is not so
entitled shall be a defense to an action or create a presumption
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that the person seeking indemnification or advancement of
expenses is not so entitled.
Section 7. Nothing in this Article shall restrict the
power and the authority of the Corporation to indemnify or
advance expenses to, make indemnification agreements and
arrangements with, or maintain insurance on behalf of, any
employee or agent of the Corporation or any person (whether or
not a director, officer, employee or agent of the corporation)
who serves at the request of the Corporation in any capacity with
any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise.
Section 8. If this Article or any part hereof shall be
held unenforceable in any respect by a court of competent
jurisdiction, it shall be deemed modified to the minimum extent
necessary to make it enforceable, and the remainder of this
Article shall remain fully enforceable.
Section 9. This Article shall be given retroactive
effect and the full benefits hereof shall be available in respect
of any alleged or actual occurrences, acts or failures to act
prior to the date of the adoption of this Article. The right to
indemnification or advancement of expenses under this Article
shall be a contract right.
ARTICLE VII
REGISTERED SHAREHOLDERS
Section 1. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such
owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be
bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as
otherwise provided by applicable law.
ARTICLE VIII
DIVIDENDS
Section 1. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board at any
regular or special meeting, pursuant to law. Dividends may be
paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the Certificate of Incorporation.
Section 2. Before payment of any dividend, there may
be set aside out of any funds of the Corporation available for
dividends such sum or sums as the Board from time to time, in its
absolute discretion, thinks proper as a reserve or reserves to
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meet contingencies, or for equalizing dividends, or for repairing
or maintaining any property of the Corporation, or for such other
purpose as the Board shall think conducive to the interests of
the Corporation, and the Board may modify or abolish any such
reserve in the manner in which it was created.
ARTICLE IX
SEAL
Section 1. The seal of the Corporation shall in such
form as the directors shall determine.
ARTICLE X
AMENDMENTS
Section 1. These by-laws may be added to, amended or
repealed either by the shareholders or the Board. Any by-law
adopted by the Board may be amended or repealed by the
Shareholders.
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Exhibit D
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEVENSON ENVIRONMENTAL SERVICES, INC.
2479 Lockport Road
Niagara Falls, New York 14302
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, revoking all prior proxies, hereby appoints
Michael A. Elia and William J. McDermott, or either of them, as proxies
with full power of substitution, and hereby authorizes him to represent and
vote, as designated on the reverse, all the shares of Common Stock of
Sevenson Environmental Services, Inc. held of record by the undersigned on
April 3, 1998 at the Annual Meeting of Stockholders to be held at the
Comfort Inn, One Prospect Point, Niagara Falls, New York, on May 19, 1998,
or any adjournment thereof.
(Continued and to be Signed on Reverse Side)
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[ X ] Please mark
your votes as
this example
THE PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. The Directors recommend a vote FOR election
of all nominees and FOR proposal 2.
1. Election of Class A Directors
FOR WITHHELD
[ ] [ ] Nominees: Joseph J. Castiglia,
Robert J. Kelso
For except vote withheld from the following nominee(s):
__________________________________
2. Reincorporation of the Company from Delaware into New York by merging
the Company into a wholly-owned subsidiary, Sevenson Environmental
Services of New York, Inc., a New York corporation.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Amend the 1989 Incentive Stock Plan to increase the number of shares
available for issuance under the plan from 320,000 to 600,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Ratify the appointment of Deloitte & Touche LLP as independent
auditors for fiscal year 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. In their discretion, the proxies are authorized to vote upon any other
matters of business which may properly come before the meeting, or,
any adjournment(s) thereof.
Change of Address/comments on reverse side [ ]
I plan to attend the meeting [ ]
I do not plan to attend the meeting [ ]
SIGNATURE(S)__________________________________ 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 titles as such. If a corporation, please sign
in full by President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
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PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
SEVENSON ENVIRONMENTAL SERVICES, INC.
2479 Lockport Road
Niagara Falls, New York 14302
The undersigned, revoking all prior proxies, hereby appoints
Michael A. Elia and William J. McDermott, or either of them, as proxies
with full power of substitution, and hereby authorizes him to represent and
vote, as designated on the reverse, all the shares of Class B Common Stock
of Sevenson Environmental Services, Inc. held of record by the undersigned
on April 3, 1998 at the Annual Meeting of Stockholders to be held at the
Comfort Inn, One Prospect Point, Niagara Falls, New York, on May 19, 1998,
or any adjournment thereof.
(Continued and to be Signed on Reverse Side)
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[ X ] Please mark
your votes as
this example
THE PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. The Directors recommend a vote FOR election
of all nominees and FOR proposal 2, 3 and 4.
1. Election of Class B Directors
FOR WITHHELD
[ ] [ ] Nominees: Michael A. Elia, Laurence A. Elia,
Richard A Elia, William J. McDermott,
Dena M. Armstrong, Arthur A. Elia
For except vote withheld from the following nominee(s):
__________________________________
2. Reincorporation of the Company from Delaware into New York by merging
the Company into a wholly-owned subsidiary, Sevenson Environmental
Services of New York, Inc., a New York corporation.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Amend the 1989 Incentive Stock Plan to increase the number of shares
available for issuance under the plan from 320,000 to 600,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Ratify the appointment of Deloitte & Touche LLP as independent
auditors for fiscal year 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. In their discretion, the proxies are authorized to vote upon any other
matters of business which may properly come before the meeting, or,
any adjournment(s) thereof.
Change of Address/comments on reverse side [ ]
I plan to attend the meeting [ ]
I do not plan to attend the meeting [ ]
SIGNATURE(S)__________________________________ 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 titles as such. If a corporation, please sign
in full by President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
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