SCHEDULE 14 A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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:
_______________________________________________________
<PAGE>
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
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 New York corporation,
will be held at the Comfort Inn, One Prospect Point, Niagara
Falls, New York, on May 18, 1999, 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 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,
1999.
(3) To transact such other business as may properly come
before the meeting.
By Order of the Board of Directors,
WILLIAM J. McDERMOTT
Secretary
April 12, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, DATE,
SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.
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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 18,1999
_______________
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
18,1999, at 10:00 a.m. This Proxy Statement and the enclosed form
of proxy are first being mailed to stockholders on or about April
12, 1999.
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, par value $.Ol per
share (the "Common Stock") and the Company's Class B Common
Stock, par value $.Ol per share (the "Class B Common Stock") of
record at the close of business on April 5, 1999 will be entitled
to notice of and to vote at the meeting and at all adjournments
thereof. At the close of business on April 5, 1999, the Company
had outstanding approximately 2,110,779 shares of Common Stock
and 7,434,850 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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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 ratification of the
appointment of Deloitte & Touche LLP as independent accountants.
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 March 16, 1999, and the
aggregate voting power held by such persons and the group in
circumstances where Class B Common Stock votes as one class with
the Common Stock.
<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. 1,153,320 54.64% 0 0 1.51%
1414 Avenue of Americas
New York, N.Y. 10019
Michael A. Elia 0 0 1,361,590(7) 18.31% 17.81%
Laurence A. Elia 0 0 1,389,920(8) 18.69% 18.18%
Richard A. Elia 0 0 1,391,420(9) 18.71% 18.20%
William J. McDermott 0 0 1,405,900(10) 18.91% 18.39%
Alan R. Elia, Jr. 7,000(3) * 245,000(3) 3.30% 3.20%
Arthur A. Elia 22,180(4) * 0 0 *
Dena M. Armstrong 14,700(5) * 0 0 *
Joseph J. Castiglia 6,400(6) * 0 0 *
Robert S. Kelso 5,120(6) * 0 0 *
All officers and Directors
as a group 47,520 * 5,793,830 77.90% 75.78%
_______________________________________________________________________________
</TABLE>
*Less than 1%
(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.
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(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) Does not include 5,240 shares of Common Stock held in
trusts, of which he is a co-trustee, for the benefit of his
children and as to which he disclaims beneficial ownership
and 1,151,240 Class B shares held by a trust of which he and
his father, Alan R. Elia, Sr., are co-trustees.
(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. Does not include 7,090
shares of Common Stock held by his spouse as to which he
disclaims beneficial ownership.
(5) Includes 12,600 shares of common Stock which may be acquired
under options.
(6) 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.
(7) Does not include 72,000 Class B shares held by his spouse
and 67,760 held in trusts, of which he is a co-trustee, for
the benefit of his minor children, and as to which he
disclaims beneficial ownership.
(8) 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 and 5,100 Class B shares held in trusts for the
benefit of his minor children of which he is a co-trustee
and as to which he disclaims beneficial ownership.
(9) 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 and 3,600 Class B shares held in trusts for the
benefit of his minor children of which he is a co-trustee
and as to which he disclaims beneficial ownership.
(10) Does not include 80,000 Class B shares held by his spouse
and 24,320 Class B shares held by his spouse as custodian
for his minor children as to which he disclaims beneficial
ownership and 4,040 Class B shares held in trusts for the
benefit of his minor children of which he is a co-trustee
and as to which he disclaims beneficial ownership.
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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 77.9% 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 64 1989 Director
Robert S. Kelso 78 1989 Director
_________________________________________________________________
Nominees for
Class B Directors
Michael A. Elia 47 1980 President, Chief
Executive Officer
and Director
Laurence A. Elia 48 1979 Vice President and
Director
Richard A. Elia 45 1982 Executive Vice
President and
Director
William J. McDermott 49 1979 Vice President -
Finance, Secretary
and Director
Dena M. Armstrong 41 1982 Assistant Vice
President -
Finance, Treasurer
and Director
Arthur A. Elia 70 1979 Director
_________________________________________________________________
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Joseph J. Castiglia, former Vice Chairman, President and
Chief Executive Officer of Pratt & Lambert United, Inc., (paint,
industrial coatings, and adhesives manufacturer) Buffalo, NY. is
presently a business consultant and private investor, JBC
Enterprises, East Aurora, NY. He also serves as Chairman,
Catholic Health System of Western New York (consortium of
hospitals); Chairman, Blue Cross & Blue Shield of Western New
York, Inc. (health care and health insurance company); Director,
New York State Electric and Gas Corporation (utility); Director,
Vision Group of Funds and Vision Fiduciary Funds, Inc. (mutual
fund group); and Director, Community Foundation for Greater
Buffalo. Mr. Castigilia was Vice Chairman, President and Chief
Executive Officer of Pratt & Lambert United, Inc. from August
1994 until his retirement in January 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. He received his B.B.A. degree
from Canisius College and is a Certified Public Accountant in the
State of New York.
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 Inc., 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 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.
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.
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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 1998, 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 1998, 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 1998, 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.
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.
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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 1998, 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 request of the
named executive officers no increase in their salaries was
implemented for a nine year period through 1996. In subsequent
years, the Committee has approved increases in salary for each of
these officers 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
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 1998, incentive stock
options were awarded to certain officers, not including those
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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 difficult industry
conditions faced by the Company in 1997 which caused profit
margins to shrink and lowered backlog at the beginning of 1998.
Despite this the Company was able to increase revenue and
operating profit over the prior year and to end the year with
record backlog. Company profit in 1998 was also increased by
management initiatives to lower overhead costs. 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
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, 1998, 1997 and 1996 for (i) the chief executive officer and
(ii) the three other executive officers of the Company whose
annual compensation exceeded $100,000, for services rendered in
all capacities.
Annual
Compensation
____________
Name and Principal All Other
Position Year Salary Bonus(l) Compensation(2)
($) ($) ($)
_________________________________________________________________
Michael A. Elia, 1998 212,180 53,694 15,880
Chief Executive 1997 206,000 37,847 16,028
Officer 1996 200,000 53,885 15,158
Richard A. Elia 1998 201,570 53,694 15,737
Executive Vice- 1997 195,700 37,847 15,887
President 1996 190,000 53,885 14,969
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William J. McDermott, 1998 190,960 53,694 16,059
Vice President - 1997 185,400 37,847 16,024
Finance 1996 180,000 53,885 15,405
Laurence A. Elia 1998 190,960 53,694 15,937
Vice President 1997 185,400 37,847 16,096
1996 180,000 53,885 15,125
(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 1998 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
$1,474, $1,331, $1,653, and $1,531, respectively. Such
amounts also include Company contributions to the accounts
of each named executive officer in the defined contribution
pension plan in the amount of $14,406 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, 1998
was $1,000,000 each, and interest payments to them in 1998 were
$90,000 each. The indebtedness to each matures six months after
his death and is funded by life insurance.
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
1994
Section 16(a) of the Securities Exchange Act of 1994
requires the Company's directors and certain 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. 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
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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 1998, except that Messrs.
Michael A. Elia, Laurence A. Elia, Richard A. Elia and William J.
McDermott each filed one late report and Mr. Alan A. Elia two
late reports of a conversion of shares of Class B Common Stock
into an equal number of shares of Common Stock in connection with
gifts made by them. Reports of those gifts were timely filed.
FIVE-YEAR STOCKHOLDER RETURN COMPARISON
The following line-graph presentation compares cumulative
stockholder returns on an indexed basis since 1994 with the S&P
500 Stock Index and a peer group of companies selected by the
Company.
The peer group consists of five companies engaged in the
environmental services and/or contracting business; those
companies are: CET Environmental Services, Inc., IT Group,
Michael Baker Corp., Dames & Moore Group and ThermoRetec (f/k/a
Thermo Remediation Inc.). The peer group has changed from that
used last year. Two companies in the peer group last year, Flour
Daniel/GTI, Inc. and OHM Corp., were acquired by IT Group during
1998 and thus no longer exist as independent companies. Two
companies were added to the peer group to take their place,
Michael Baker Corp. and Dames & Moore Group.
(GRAPHINSERT)
TOTAL STOCKHOLDER RETURNS
SEVENSON ENVIRONMENTAL SERVICES, INC.
DECEMBER 31, 1993 - DECEMBER 31, 1998
Dec 93 Dec 94 Dec 95 Dec 96 Dec 97 Dec 98
______ ______ ______ ______ ______ ______
Sevenson Environmental
Svcs $100.00 $116.90 $123.99 $132.80 $145.10 $112.21
S&P 500 Index $100.00 $ 98.46 $132.05 $158.80 $208.05 $263.53
Peer Group $100.00 $ 86.45 $ 81.43 $122.55 $121.40 $122.01
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 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
business 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
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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. SCC and
the Company rent equipment owned by the other. In such
circumstances the user pays the fair market rental rate.
During 1998, SCC paid the Company approximately $135,722 for
general and administrative services and general yard and shop
services, and the Company paid SCC $168,348 for the use of
equipment. 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 1998, the Company's
share of the liability insurance and workers compensation
premiums was approximately $1,966,212 and SCC's share totaled
approximately $94,074.
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 in
subsequent years to reflect actual losses under the policies.
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
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.
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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 1998, these costs totaled approximately
$114,664.
AUDITORS
The firm of Deloitte & Touche LLP, independent certified
public accountants, has audited the records of the Company for
the past fifteen years. The Board of Directors wishes to
continue the services of this firm for the fiscal year ending
December 31, 1999, 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, 1999.
SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be included in the
proxy materials for the 2000 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 14, 1999.
In the case of a stockholder who wishes to present a
proposal for consideration at the 2000 Annual Meeting of
Stockholders without inclusion of such proposal in the Company's
proxy statement, unless notice of such proposal is received by
13
<PAGE>
the Secretary of the Company no later than February 27, 2000,
management proxies would be allowed to use their discretionary
voting authority to vote on such proposal.
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.
April 12, 1999 William J. McDermott, Secretary
14
<PAGE>
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEVENSON ENVIRONMENTAL SERVICES, INC.
2749 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 them 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 5, 1999 at the Annual Meeting of Stockholders to be held at the
Comfort Inn, One Prospect Point, Niagara Falls, New York, on May 18, 1999,
or any adjournment thereof.
(Continued and to be Signed on Reverse Side)
<PAGE>
[ X ] Please mark
your votes as
in this example
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. Ratify the appointment of Deloitte & Touche LLP as independent
auditors for fiscal year 1999
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. 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
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE.
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.
<PAGE>
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEVENSON ENVIRONMENTAL SERVICES, INC.
2749 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 them 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 5, 1999 at the Annual Meeting of Stockholders to be
held at the Comfort Inn, One Prospect Point, Niagara Falls, New York, on
May 18, 1999, or any adjournment thereof.
(Continued and to be Signed on Reverse Side)
<PAGE>
[ X ] Please mark
your votes as
in this example
THIS 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 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. Ratify the appointment of Deloitte & Touche LLP as independent
auditors for fiscal year 1999
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. 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.
<PAGE>
