<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
GZA GEOENVIRONMENTAL TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE> 2
GZA GEOENVIRONMENTAL TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 15, 1997
Please take notice that the Annual Meeting of Stockholders of GZA
GeoEnvironmental Technologies, Inc. (the "Company") will be held at the Sheraton
Needham Hotel, 100 Cabot Street, Needham, Massachusetts on Tuesday, July 15,
1997, commencing at 10:00 a.m. local time, for the following purposes:
1. To elect four Class II directors of the Company, each for a three-year
term.
2. To ratify the appointment of Coopers & Lybrand L.L.P. as the Company's
independent public accountants for the fiscal year ending February 28,
1998.
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on May 20, 1997 as
the record date for the meeting. Only stockholders of record as of such date
will be entitled to receive notice of, and to vote at, the Annual Meeting and
any adjournment thereof.
By Order of the Board of Directors
HELGA FINLAY THOMPSON
Secretary
June 10, 1997
YOUR VOTE IS IMPORTANT.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY, WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING.
<PAGE> 3
GZA GEOENVIRONMENTAL TECHNOLOGIES, INC.
320 NEEDHAM STREET
NEWTON UPPER FALLS, MA 02164
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 15, 1997
INTRODUCTION
This Proxy Statement is being furnished to stockholders of GZA
GeoEnvironmental Technologies, Inc., a Delaware corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders (the "1997 Annual
Meeting") to be held at The Sheraton Needham Hotel, 100 Cabot Street, Needham,
Massachusetts on Tuesday, July 15, 1997, commencing at 10:00 a.m. local time,
and at any adjournments thereof.
At the 1997 Annual Meeting, the stockholders of the Company will be asked
to consider and vote upon the election of four Class II directors of the Company
and to ratify the appointment of Coopers & Lybrand L.L.P. as the Company's
auditors for the Company's 1998 fiscal year.
The Board of Directors of the Company has fixed the close of business on
May 20, 1997 as the record date for the 1997 Annual Meeting. Only stockholders
of record as of such date will be entitled to receive notice of, and to vote at,
the 1997 Annual Meeting. At such date, there were 4,013,548 shares of common
stock, par value $.01 per share, of the Company ("Common Stock") outstanding and
entitled to vote.
Reference to the Company in this Proxy Statement shall, unless the context
does not permit, include the Company and its direct and indirect subsidiaries,
including, without limitation, GZA GeoEnvironmental, Inc. ("GZA
GeoEnvironmental"), GZA Remediation, Inc. ("GZA Remediation"), and GZA Drilling,
Inc. ("GZA Drilling").
The date on which this Proxy Statement and the accompanying form of proxy
are first being sent or given to stockholders of the Company is on or about June
10, 1997.
PROXIES
Each copy of this Proxy Statement is accompanied by a form of proxy which
is being solicited by the Board of Directors of the Company. You are requested
to complete, sign, date, and promptly return the accompanying form of proxy in
the self-addressed envelope provided. Shares of Common Stock represented by
properly executed proxies received by the Company and not revoked will be voted
at the 1997 Annual Meeting in accordance with the instructions therein.
If instructions to the contrary are not contained therein, proxies will be
voted: FOR the election of M. Joseph Celi, Lewis Mandell, Andrew P. Pajak and
William E. Hadge as Class II directors of the Company; and FOR ratifying the
appointment of Coopers & Lybrand L.L.P. as the Company's auditors for the 1998
fiscal year.
Any proxy signed and returned by a stockholder may be revoked at any time
before it is voted by giving written notice of such revocation to the Company's
Secretary at its principal executive offices, by signing and duly delivering a
proxy bearing a later date, or by attending the Annual Meeting and voting in
person.
<PAGE> 4
The Company's principal executive offices are located at 320 Needham Street,
Newton Upper Falls, Massachusetts 02164.
Holders of Common Stock are entitled to one vote for each share held on
each matter submitted to a vote. Votes withheld from any nominee for election as
director, abstentions, and broker "non-votes" will be counted as present or
represented at the meeting for purposes of determining the presence or absence
of a quorum for the meeting. A broker "non-vote" occurs when a broker or other
nominee who holds shares for a beneficial owner withholds his or her vote on a
particular proposal with respect to which the nominee does not have
discretionary voting power or instructions from the beneficial owner.
Abstentions with respect to a proposal are included in the number of shares
voting on such proposal. "Non-votes" are not so included. An automated system
administered by the Company's transfer agent tabulates the votes.
The cost of proxy solicitation will be borne by the Company. It is
contemplated that proxies will be solicited principally through use of the
mails, but officers, directors and regular employees of the Company may, without
additional compensation, solicit proxies personally or by telephone, telegraph
or special letter. The Company will reimburse banks, brokerage houses and other
custodians, nominees and fiduciaries for their reasonable expenses in forwarding
proxy materials to the beneficial owners of shares held of record by them.
OTHER MATTERS TO BE CONSIDERED
As of the date of the Proxy Statement, the Board of Directors of the
Company does not know of any matters not set forth herein that may be presented
for consideration at the 1997 Annual Meeting. If any other such matters are
properly presented, proxies will be voted in accordance with the best judgment
of the proxy holders.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, each containing,
insofar as possible, an equal number of directors. Directors are elected for
three-year terms, with the term of one of the three classes expiring each year,
concurrently with the Company's Annual Meeting. The number of directors
constituting the full Board of Directors of the Company is currently ten,
consisting of three Class I directors, four Class II directors, and three Class
III directors.
The term of the Company's Class I directors, Donald T. Goldberg, Thomas W.
Philbin and Irvine G. Reinig II, expires in 1998. The term of the Company's
Class III directors, Timothy W. Devitt, Paul F. Gorman and Joseph D. Guertin,
expires in 1999.
The term of M. Joseph Celi, Lawrence Feldman, Lewis Mandell and Andrew P.
Pajak, the Company's current Class II directors, expires immediately following
the 1997 Annual Meeting. In furtherance of the Board's policy encouraging
rotation among its employee directors, Mr. Feldman, an officer of GZA
GeoEnvironmental who has served as a director since 1994, has indicated that he
does not intend to stand for reelection as a director. The Board has nominated
Messrs. Celi, Mandell and Pajak for reelection as Class II directors and has
nominated William E. Hadge for election as a Class II director. If they are
elected, the terms of Messrs. Celi, Mandell, Pajak and Hadge will expire in
2000.
If a quorum is present at the 1997 Annual Meeting, a plurality of the votes
cast will be required to elect as Class II directors the nominees of the Board
of Directors, Messrs. Celi, Mandell, Pajak and Hadge. The Board of Directors
recommends that stockholders vote FOR the proposal to elect Messrs. Celi,
Mandell, Pajak and Hadge as Class II directors.
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<PAGE> 5
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning each director
of the Company continuing in office, each nominee for election as director, and
each executive officer of the Company, including information regarding executive
offices held by such persons with the Company's operating subsidiaries.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL AGE PRINCIPAL POSITION
- ------------------------------------ --- -------------------------------------------------
<S> <C> <C>
Donald T. Goldberg(1)(2)............ 68 Chairman of the Board of Directors
Andrew P. Pajak..................... 47 Director, President and Chief Executive Officer
of the Company; President of GZA GeoEnvironmental
M. Joseph Celi...................... 63 Director and Executive Vice President --
Remediation Services of the Company; Executive
Vice President -- Remediation Services of GZA
GeoEnvironmental; President of GZA Remediation;
President of GZA Drilling
Richard M. Simon.................... 51 Executive Vice President -- Professional Practice
of the Company; Executive Vice President --
Professional Practice of GZA GeoEnvironmental
John E. Ayres....................... 60 Executive Vice President -- Business Development
of the Company; Executive Vice President --
Business Development of GZA GeoEnvironmental
Irvine G. Reinig II................. 50 Director of the Company
Joseph D. Guertin, Jr............... 55 Director of the Company; Senior Vice President of
GZA GeoEnvironmental
William E. Hadge.................... 41 Nominee for election as Director of the Company;
Senior Vice President of GZA GeoEnvironmental
Joseph P. Hehir..................... 52 Senior Vice President, Chief Financial Officer
and Treasurer of the Company
Lewis Mandell(1).................... 54 Director of the Company
Thomas W. Philbin(1)................ 58 Director of the Company
Paul F. Gorman(2)................... 73 Director of the Company
Timothy W. Devitt(2)................ 52 Director of the Company
</TABLE>
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(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Donald T. Goldberg has served as the Company's Chairman of the Board since
1989. Mr. Goldberg also served as the Company's Chief Executive Officer from
1989 to 1995, and as President of GZA GeoEnvironmental from 1966 to 1990 and
from 1992 to 1993.
Andrew P. Pajak has been Chief Executive Officer and President of the
Company and President of GZA GeoEnvironmental since August 1996. Mr. Pajak has
been a Director of the Company since September 1996. Mr. Pajak was Executive
Vice President of Michael Baker Corporation, an engineering, construction and
operations and maintenance services firm, from 1994 to 1996, and President and
Chief Executive Officer of Baker Environmental, Inc., a wholly-owned subsidiary
of Michael Baker Corporation, from 1990 to 1996.
M. Joseph Celi has been a director of the Company and President of GZA
Remediation since 1991. In 1996 Mr. Celi was appointed to the positions of
Executive Vice President -- Remediation Services of the Company, Executive Vice
President -- Remediation Services of GZA GeoEnvironmental and President of GZA
Drilling. From 1984 to 1990, Mr. Celi was President and Chief Executive Officer
of The Carlson Group,
3
<PAGE> 6
an architectural, engineering and construction firm. From 1990 to 1991, Mr. Celi
served as a consultant to the construction and engineering industries.
Richard M. Simon has been Executive Vice President -- Professional Practice
of the Company since 1995 and Executive Vice President -- Professional Practice
of GZA GeoEnvironmental since 1992. Dr. Simon was a director of the Company from
1989 to 1993, and a Senior Vice President of GZA GeoEnvironmental from 1986 to
1992. Dr. Simon served as Central New England Regional Manager of GZA
GeoEnvironmental from 1990 to 1993.
John E. Ayres has been Executive Vice President -- Business Development of
the Company since 1995 and Executive Vice President -- Business Development of
GZA GeoEnvironmental since 1992. Mr. Ayres was a director of the Company from
1989 to 1993 and President of GZA GeoEnvironmental from 1989 to 1992.
Irvine G. Reinig II has been a director of the Company since 1992 and was a
Senior Vice President of GZA GeoEnvironmental from 1990 until April 1996. Mr.
Reinig served as the New York Regional Manager of GZA GeoEnvironmental from 1990
to 1994.
Joseph D. Guertin, Jr. has been a director of the Company since 1996 and
has been a Senior Vice President of GZA GeoEnvironmental since 1990. Mr. Guertin
was a director of the Company from 1989 to 1991.
William E. Hadge has been nominated for election as a director of the
Company. If elected, Mr. Hadge will replace Lawrence Feldman upon expiration of
Mr. Feldman's three-year term as a Class II director. Mr. Hadge joined GZA in
1979 and has been a Senior Vice President of GZA GeoEnvironmental since 1993.
Joseph P. Hehir has been the Chief Financial Officer and Treasurer of the
Company since 1993 and a Senior Vice President of the Company since 1995. Mr.
Hehir has been Treasurer of GZA GeoEnvironmental since 1988 and was a Senior
Vice President of GZA GeoEnvironmental from 1990 to 1995.
Lewis Mandell has been a director of the Company since 1991. Dr. Mandell
has been Dean of the Business School of Marquette University since 1995. Dr.
Mandell was a professor of finance and political science at the University of
Connecticut from 1980 to 1995. He also serves as a director of the Variable
Annuities of Traveler's Corporation.
Thomas W. Philbin has been a director of the Company since 1993. Dr.
Philbin has been the President and a director of HEC, Inc., an energy
conservation consulting firm, since 1991. Dr. Philbin was the Executive Director
of Brown, Rudnick, Freed & Gesmer, a Boston law firm, from 1988 to 1990. Dr.
Philbin was President of CompuChem Laboratories, Inc., an analytical laboratory
specializing in forensic and environmental analysis, from 1987 to 1988.
Paul F. Gorman has been a director of the Company since 1991. Mr. Gorman
has been Vice Chairman of the Board of Directors of Viceroy, Inc., a pipe
fabrication and construction services company, since 1990. Mr. Gorman was
Chairman of the Board of Chas. T. Main, Inc., an engineering and construction
management firm, from 1985 to 1990, and served as Chairman of the Board,
Emeritus, of Chas. T. Main from 1990 to 1991.
Timothy W. Devitt has been a director of the Company since 1993. Mr. Devitt
has been a Director of Putnam, Hayes & Bartlett, Inc., a management consulting
firm, since 1990 and a Principal of that firm since 1987.
SECTION 16 COMPLIANCE
Section 16 of the Securities and Exchange Act of 1934, as amended ("Section
16"), requires the Company's officers, directors and persons who own more than
ten percent of a registered class of the Company's equity securities to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission, and to furnish the Company with copies of all such forms they file.
Based on the
4
<PAGE> 7
Company's review of the forms that it has received, and on written
representations from certain reporting persons, the Company believes that,
except as set forth below, during the fiscal year ended February 28, 1997, all
reports required by Section 16 have been properly and timely filed. Richard M.
Simon filed a Form 5 late with respect to a single transaction.
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During fiscal year 1997, the Board of Directors of the Company held 8
scheduled meetings and 3 special meetings, and the Audit Committee and the
Compensation Committee, which are the only standing committees of the Board of
Directors, held 3 meetings and 10 meetings, respectively. No director attended
fewer than 75 percent of the meetings of the Board of Directors and of the
committees on which he served.
The Audit Committee currently consists of Messrs. Mandell and Philbin,
neither of whom is an employee of the Company, and Donald T. Goldberg, the
Chairman of the Board and former Chief Executive Officer of the Company. Since
January 1, 1997, Mr. Goldberg has been employed by the Company on a part-time
basis. See "Certain Transactions". The Audit Committee confers with the
Company's independent public accountants concerning the scope of their
examinations of the Company's financial statements, the Company's accounting
policies and internal accounting controls and the results of the independent
public accountants' audit examination, and recommends the selection of the
Company's independent public accountants to the Board of Directors. The
Committee's duties do not include accounting or auditing functions, which are
the responsibility of the Company's officers and its independent public
accountants.
The Compensation Committee, which currently consists of Messrs. Gorman and
Devitt, neither of whom is an employee of the Company, and Mr. Goldberg,
oversees compensation policy, executive salaries, profit sharing, stock options,
employee stock purchase and other benefit and incentive compensation plans, and
employment contracts.
DIRECTORS' COMPENSATION
Since retiring as the Company's Chief Executive Officer in September 1995,
the Chairman of the Board, Donald T. Goldberg, has been compensated for both his
service as Chairman and for engineering and management consulting services
rendered. In the period from March 1, 1996 through December 31, 1996 Mr.
Goldberg received a monthly fee of $8,333 plus expenses (total compensation for
the 10-month period of $83,330). Since January 1, 1997, Mr. Goldberg has been
employed by the Company on a part-time basis and has received no separate
compensation for his service as a director.
During fiscal year 1997, each non-employee director of the Company,
excluding the Chairman of the Board (Messrs. Gorman, Devitt, Mandell, Philbin
and Reinig), was paid an annual retainer of $3,000 and $1,000 for each Board
meeting attended, plus expenses incurred in attending all such meetings.
Non-employee directors may also be compensated at the rate of $1,000 per day and
receive reimbursement for travel and other expenses for Board-related
activities. Mr. Gorman is compensated at the rate of $1,250 per quarter and
Messrs. Devitt, Mandell and Philbin at the rate of $750 per quarter for
Committees of the Board on which they serve, and each receives reimbursement for
travel and other expenses. Messrs. Gorman, Devitt, Mandell, Philbin and Reinig
received $19,500, $17,500, $18,375, $15,500 and $12,750, respectively, plus
reimbursable expenses, for such activities during fiscal year 1997. Each
non-employee director (other than Mr. Goldberg) may also provide management
consulting services to the Company, for which he is compensated on an hourly
basis. Messrs. Gorman, Philbin and Reinig received $2,938, $5,500 and $1,666
respectively, plus expenses, for such services in fiscal year 1997. Directors
who are employees of the Company are not compensated separately for serving as
directors.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth all compensation earned
by the Company's Chief Executive Officer, former Chief Executive Officer, and
four other most highly paid executive officers (the "Named Executive Officers")
for services rendered to the Company during its fiscal years ending February 28,
1997, February 29, 1996 and February 28, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------------ ------------------- ALL OTHER
NAME AND FISCAL SALARY BONUS OPTIONS/ COMPENSATION(1)
PRINCIPAL POSITION YEAR ($) ($) AWARDS($) SARS(#) ($)
- ------------------------------------- ------ -------- ------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
A.P. Pajak........................... 1997 $ 96,357 $17,000 $30,000(2) 10,000 $ 48,637
Chief Executive Officer 1996 -- -- -- -- --
and President 1995 -- -- -- -- --
L. M. Seale.......................... 1997 $117,638 -- -- -- $ 123,018
Chief Executive Officer and 1996 $178,079 $16,912 -- -- $ 11,937
President (through 8/96) 1995 $168,858 -- -- -- $ 8,235
M. Joseph Celi....................... 1997 $150,295 $ 7,713 -- 13,400(3) $ 12,480
Executive Vice President -- 1996 $150,010 $23,000 -- -- $ 10,263
Remediation Services of the Company 1995 $148,794 -- -- -- $ 8,220
R. M. Simon.......................... 1997 $140,005 $ 7,332 -- 6,200 $ 8,514
Executive Vice President -- 1996 $140,005 $ 7,955 -- -- $ 8,268
Professional Practice of the 1995 $138,865 $ 2,000 -- -- $ 7,762
Company and GZA GeoEnvironmental
J. E. Ayres.......................... 1997 $139,795 $ 5,300 -- -- $ 10,206
Executive Vice President -- 1996 $140,005 $ 4,615 -- -- $ 9,039
Business Development of the Company 1995 $138,865 -- -- -- $ 7,762
and GZA GeoEnvironmental
W. R. Beloff......................... 1997 $130,208 $12,500 -- 4,000(3) $ 7,110
Senior Vice President 1996 $121,126 $21,037 $ 9,546(2) 3,182 $ 7,332
of GZA GeoEnvironmental 1995 $120,518 $17,000 -- -- $ 6,872
</TABLE>
- ---------------
(1) Amounts shown consist of the Company's contribution under the Company's
401(k) Profit Sharing Plan, the value of employer-paid premiums for term
life insurance programs, reimbursement of non-deductible moving expenses,
severance payments to the former Chief Executive Officer and a sign-on bonus
paid to the Company's new Chief Executive Officer. For fiscal year 1997, the
Company's contributions under the 401(k) Profit Sharing Plan for the
accounts of the Named Executive Officers were as follows: Mr. Seale, $6,718;
Mr. Pajak, $0; Mr. Celi, $6,718; Mr. Simon, $6,270; Mr. Ayres, $6,270; and
Mr. Beloff, $5,754. For fiscal year 1997, the value of employer-paid
premiums for term life insurance paid for the accounts of the Named
Executive Officers was as follows: Mr. Seale, $6,300; Mr. Pajak, $812; Mr.
Celi, $5,762; Mr. Simon, $2,244; Mr. Ayres, $3,936; and Mr. Beloff, $1,356.
For the fiscal year 1997, the value of a sign-on bonus paid to Mr. Pajak was
$10,000 and the value of non-deductible moving expenses reimbursed to Mr.
Pajak was $37,825. For the fiscal year 1997, the value of severance payments
made to Mr. Seale was $110,000.
(2) Represents the value, on the date of grant, of shares of Common Stock of the
Company ("Restricted Stock") granted under the Company's 1995 Stock
Incentive Plan. The shares of Restricted Stock vest in five equal annual
installments beginning on the first anniversary date and concluding on the
fifth anniversary date of the Restricted Stock Award Agreement. The unvested
portion of the Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of. In the event that GZA is
acquired by, or merged with, another firm, the unvested portion of Mr.
Pajak's Restricted Stock shall be fully vested. In the event of termination
of employment by the Company for any reason, any unvested shares of
Restricted Stock will be forfeited to the Company. The value of the
Restricted Stock held by Messrs. Pajak and Beloff on February 28, 1997 was
$31,250 and $9,944, respectively.
(3) The options issued to Mr. Celi and Mr. Beloff represent options granted on
July 9, 1996 to replace a like number of options granted prior to fiscal
year 1997. These options were replaced in connection with an offer by the
Company to exchange existing Incentive Stock Options (ISOs) carrying an
exercise price of $5.25 for new ISOs carrying an exercise price of $3.50.
6
<PAGE> 9
OPTION/SAR GRANTS
The following table provides certain information with respect to options
granted to each Named Executive Officer during the fiscal year ended February
28, 1997 under the Company's 1989 Incentive Stock Option Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT ANNUAL RATES OF
NUMBER OF OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(1)
OPTIONS/SARS EMPLOYEES IN EXERCISE OR EXPIRATION --------------------
NAME GRANTED FISCAL YEAR BASE PRICE DATE 5%($) 10%($)
- ------------------------ ------------ ------------ ----------- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
A.P. Pajak.............. 75,000 22.3% $3.50 12/31/01 $72,524 $160,259
M.J. Celi(2)............ 7,200 2.1% $3.50 10/1/01 $ 6,962 $ 15,385
6,200 1.8% $3.50 12/31/01 $ 5,995 $ 13,248
R.M. Simon.............. 6,200 1.8% $3.50 12/31/01 $ 5,995 $ 13,248
J.E. Ayres.............. -- -- -- -- -- --
W.R. Beloff(2).......... 4,000 1.2% $3.50 12/31/01 $ 3,868 $ 8,547
</TABLE>
- ---------------
(1) "Potential Realizable Value" represents a calculation of the hypothetical
appreciation in the value of Common Stock underlying the options from its
fair market value at the date of grant ($3.50 per share) at assumed rates of
appreciation set forth in the table, compounded annually over the term of
the option (approximately 5 years). Actual gains, if any, on stock option
exercises and Common Stock holdings are dependent upon the future
performance of the Common Stock.
(2) Options granted to Mr. Celi and Mr. Beloff represent options repriced from
prior grants and reissued in fiscal year 1997.
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<PAGE> 10
YEAR-END OPTION TABLE
The following table sets forth certain information regarding stock options
held as of February 28, 1997 by the Named Executive Officers.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS OPTIONS/SARS
ACQUIRED AT FISCAL YEAR END AT FISCAL YEAR END(1)
ON VALUE --------------------------- ---------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
- ---------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
L. M. Seale........... -- -- -- -- -- --
A. P. Pajak........... -- -- 15,000 60,000 -- --
M. J. Celi............ -- -- 12,160(2) 1,240(2) -- --
R. M. Simon........... -- -- 4,960 1,240 -- --
J. E. Ayres........... -- -- -- -- -- --
W. R. Beloff.......... -- -- 1,600(2) 2,400(2) -- --
</TABLE>
- ---------------
(1) The options for all Named Executive Officers were out-of-the-money on
February 28, 1997, i.e., the exercise price of the options exceeded the
closing price of the Company's Common Stock on that date as reported by the
Nasdaq National Market.
(2) The options held by Mr. Celi and Mr. Beloff represent options granted on
July 9, 1996 to replace a like number of options granted prior to fiscal
year 1997. These options were replaced in connection with an offer by the
Company to exchange existing Incentive Stock Options (ISOs) carrying an
exercise price of $5.25 for new ISOs carrying an exercise price of $3.50.
TEN-YEAR OPTION/SAR REPRICING(1)
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SECURITIES ORIGINAL
UNDERLYING MARKET PRICE OF EXERCISE PRICE OPTION TERM
OPTIONS/SARS STOCK AT TIME AT TIME OF REMAINING AT DATE
REPRICED OR OF REPRICING OR REPRICING OR NEW EXERCISE OF REPRICING OR
NAME DATE AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
- ------------------- ------ ------------ --------------- -------------- ------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
M.J. Celi.......... 9/7/93 7,200 $5.25 $ 6.28 $ 5.25 8 Years 1 Month
7/9/96 7,200 $3.50 $ 5.25 $ 3.50 5 Years 3 Months
7/9/96 6,200 $3.50 $ 5.25 $ 3.50 5 Years 6 Months
W.R. Beloff........ 7/9/96 4,000 $3.50 $ 5.25 $ 3.50 5 Years 6 Months
J.P. Hehir......... 7/9/96 6,200 $3.50 $ 5.25 $ 3.50 5 Years 6 Months
</TABLE>
- ---------------
(1) See Compensation Committee Report on Executive Compensation for report on
repricing of options.
CERTAIN AGREEMENTS OF DIRECTORS AND EXECUTIVE OFFICERS
Each of Messrs. Pajak, Simon, Ayres, Celi, Beloff, Feldman, Guertin, Hadge
and Hehir has entered into a Non-Competition and Non-Disclosure Agreement with
the Company which provides, among other things, that following the termination
of his employment, and provided that he complies with certain non-competition
covenants set forth in the agreement, he may be entitled to receive, for a
period of up to twelve months following such termination, his base salary and
certain other benefits.
8
<PAGE> 11
The Stock Performance Graph and Compensation Committee Report on Executive
Compensation set forth below shall not be deemed to be filed or incorporated by
reference in any filing by the Company with the Securities and Exchange
Commission.
STOCK PERFORMANCE GRAPH
The following Stock Performance Graph sets forth the cumulative total
shareholder return of the Company's Common Stock with the cumulative total
return of the equity securities included in the National Association of
Securities Dealers Automated Quotation System ("Nasdaq") Index, and of the
equity securities of a peer group of issuers in the environmental consulting
industry selected by the Company. The issuers included in the peer group are: EA
Engineering Science & Technology, Inc.; Fluor Daniel/GTI, Inc.; Ecology and
Environment, Inc.; EMCON Associates; GZA GeoEnvironmental Technologies, Inc.;
Harding Associates, Inc.; Versar, Inc.; and Roy F. Weston, Inc. The Stock
Performance Graph assumes a $100 investment in each issuer on March 1, 1992 and
compares the market value of such investment (assuming reinvestment of
dividends, if any) as of the last day of February in each of the five succeeding
years. The Company paid no dividends during the period shown.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG GZA GEOENVIRONMENTAL TECHNOLOGIES, INC.,
NASDAQ MARKET INDEX AND PEER GROUP INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) GZA PEER GROUP BROAD MARKET
<S> <C> <C> <C>
1992 100 100 100
1993 103.33 79.91 100.16
1994 153.33 74.67 127.62
1995 80.00 50.28 121.85
1996 90.00 46.74 168.25
1997 83.33 38.62 201.94
</TABLE>
9
<PAGE> 12
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee during fiscal year 1997
were Paul F. Gorman and Timothy W. Devitt, neither of whom is or ever has been
an officer or employee of the Company or any of its subsidiaries or a party to
any relationship of a character required to be disclosed pursuant to Items 402
or 404 of Regulation S-K promulgated by the Securities and Exchange Commission.
In addition, Donald T. Goldberg, who was employed by the Company as its Chief
Executive Officer until his retirement in September 1995, was elected to the
Compensation Committee in October 1995. Since January 1997, Mr. Goldberg has
been employed by the Company on a part-time basis. See "Certain Transactions".
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") of the Board of Directors has
furnished the following report on executive compensation for fiscal year 1997.
Compensation Policies. The purpose of the Company's policy for
compensating its executive officers is to establish aggregate compensation
levels which are consistent with the Company's financial performance; to provide
appropriate incentives to promote individual performance and goal achievement,
thereby enhancing Company profitability and thus shareholder value; and, to
grant total compensation sufficiently competitive to retain and, when necessary,
attract executive officers capable of leading the Company in the attainment of
its business objectives.
In fiscal year 1997, base salaries were selectively increased so as to
remain competitive with the levels of compensation paid by comparable firms.
Senior executives and selected other Company employees also may qualify for cash
bonuses through participation in the Company's Incentive Compensation Plan. To
maintain an emphasis on incentive-based compensation, the dollar increases in
base salary for fiscal year 1997 were modest, and the amount of bonus
compensation which could potentially be earned under the Incentive Compensation
Plan based on the Company's performance remained significant.
In addition to the Incentive Compensation Plan, senior executives are
eligible to participate in various benefit programs provided to all full-time
employees in varying degrees -- including the Company's 401(k) Profit Sharing
Plan and a supplemental insurance program whereby term insurance premiums are
paid by the Company on behalf of senior executives and selected other Company
employees.
Base Salaries. The salaries of the executive officers are established
annually by evaluating requirements of the position, the contribution of the
individual executive to Company performance and the executive's responsibility,
experience and potential. Base salaries of executive officers are intended to be
comparable to median salaries of a peer group of comparably-sized companies and
to salaries of executive officers reported in an environmental industry salary
survey. In making such comparisons, the Company's financial performance as well
as non-financial measures such as contributions to the success of the Company's
strategic plan are considered. In fiscal year 1997, the base salaries of the
executive officers named in the Summary Compensation Table, other than the Chief
Executive Officer, were selectively increased, as compared with 1996, to be
consistent with their current duties and responsibilities.
Chief Executive Officer Compensation. Leonard M. Seale held the position
of Chief Executive Officer through August 25, 1996, and received a base salary
at the annual rate of $190,000 for fiscal year 1997. Andrew P. Pajak assumed the
position of Chief Executive Officer in August 1996, with an annual base salary
of $193,000. Mr. Pajak also received a restricted stock grant valued at $30,000
on the date of grant and a sign-on bonus of $10,000. Mr. Pajak has a potential
bonus consistent with the policy (as previously stated) of providing a
significant portion of total compensation in the form of incentive compensation.
Mr. Pajak was
10
<PAGE> 13
paid a total bonus of $17,000 under the Company's Incentive Compensation Plan
for the partial fiscal year 1997 during which he was in office.
Report on Repricing of Options/SARs. The July 1996 repricing of options
held by certain Named Executive Officers described in the Ten-Year Option/SAR
Repricing table reflects the Compensation Committee's desire to utilize
incentive stock options to motivate employees, including senior executives, and
to encourage employee ownership of the Company's Common Stock. The Compensation
Committee and full Board of Directors have determined that to provide maximum
incentive for employees, incentive stock options should be granted at exercise
prices equal to, or not materially in excess of, the market price of the Common
Stock. Consistent with past practice and Compensation Committee policy,
outstanding options held by Named Executive Officers and other employees, which
were materially out-of-the-money on the date of repricing, were repriced at
$3.50 per share, the approximate market price in July 1996.
Communications with Shareholders. The Committee is responsible for
communicating with shareholders regarding the Company's compensation policy and
to ensure that the Board of Directors understands shareholders' perspectives
regarding executive compensation. Members of the Committee may, when
appropriate, respond to shareholder concerns about compensation in subsequent
reports or proxy statements. Comments and questions may be addressed to:
PAUL F. GORMAN, P.E.
c/o GZA GeoEnvironmental
Technologies, Inc.
320 Needham Street
Newton Upper Falls, MA 02164
TIMOTHY W. DEVITT, P.E.
c/o GZA GeoEnvironmental
Technologies, Inc.
320 Needham Street
Newton Upper Falls, MA 02164
DONALD T. GOLDBERG, P.E.
c/o GZA GeoEnvironmental Technologies, Inc.
320 Needham Street
Newton Upper Falls, MA 02164
Compensation Committee
By: Paul F. Gorman, Chair
Timothy W. Devitt
Donald T. Goldberg
As of February 28, 1997
11
<PAGE> 14
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock at May 20, 1997, the record date for the
Annual Meeting, by each person who is known by the Company to own beneficially
more than five percent of the outstanding shares of Common Stock, each of the
Company's current directors and nominees for election as director, each of the
Named Executive Officers, and all directors and officers of the Company as a
group:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SHARES OUTSTANDING
NAME OF INDIVIDUAL OR BENEFICIALLY COMMON
NUMBER OF PERSONS IN GROUP OWNED(1) STOCK
------------------------------------------------------------ ------------ -----------
<S> <C> <C>
Heartland Advisors(2)....................................... 498,600 12.4%
William S. Zoino(2)......................................... 428,368 10.7%
Donald T. Goldberg(2)(3).................................... 359,260 9.0%
Joseph D. Guertin, Jr....................................... 174,004 4.3%
John E. Ayres............................................... 168,286 4.2%
Richard M. Simon(4)......................................... 73,905 1.8%
Lawrence Feldman............................................ 58,224 1.5%
William R. Beloff........................................... 55,521 1.4%
Joseph P. Hehir............................................. 42,687 1.1%
Irvine G. Reinig II......................................... 30,245 0.8%
Andrew P. Pajak............................................. 25,000 0.6%
M. Joseph Celi.............................................. 22,141 0.6%
William E. Hadge............................................ 17,584 0.4%
Lewis Mandell............................................... 5,600 0.1%
Timothy W. Devitt........................................... 4,850 0.1%
Paul F. Gorman(5)........................................... 1,600 0.0%
Thomas W. Philbin........................................... 600 0.0%
TOTAL....................................................... 1,966,475 49.0%
All directors and officers as a group (14 persons)(6)....... 1,021,923 25.5%
</TABLE>
- ---------------
(1) Includes, where applicable, shares issuable pursuant to options exercisable
within 60 days of the date of this table.
(2) The business address of Mr. Goldberg, who owns more than 5% of the Company's
Common Stock, is 320 Needham Street, Newton Upper Falls, MA 02164. The home
address of Mr. Zoino is 175 Moraine Street, Brockton, MA 02401. The address
for Heartland Advisors is 790 North Milwaukee Street, Milwaukee, WI 53202.
(3) Includes 100,000 shares held by a family trust for family members of Mr.
Goldberg. Mr. Goldberg, who is not a trustee of the trust, disclaims
beneficial ownership of these shares.
(4) Includes 5,700 shares held by Dr. Simon's son. Dr. Simon disclaims
beneficial ownership of these shares.
(5) Includes 1,000 shares held by Mr. Gorman's spouse.
(6) Excludes shares held by Mr. Hadge, a nominee for director.
CERTAIN TRANSACTIONS
The Company leases certain of its facilities from employees, some of whom
are directors, executive officers or stockholders of the Company, or from
entities in which such persons have interests.
12
<PAGE> 15
The Company's principal facility in Newton Upper Falls, Massachusetts is
leased from Donald T. Goldberg, Chairman of the Board of the Company, and
William S. Zoino, formerly a director and executive officer and currently a
beneficial owner of more than five percent of the outstanding Common Stock of
the Company, who own the property as tenants in common. Rental payments to
Messrs. Goldberg and Zoino aggregated $714,000 for fiscal year 1997.
The Company's Brockton, Massachusetts facility is leased from GZA
Investment Associates Trust, a Massachusetts business trust in which the Company
owns a two-thirds interest together with two other shareholders, Mr. Zoino and
Joseph E. Hebert, a former employee of GZA Drilling, Inc. Lease payments to GZA
Investment Associates Trust totaled $72,000 in fiscal year 1997. In June 1996,
the Company acquired its interest in the trust by purchasing the shares of the
trust held by four individuals, Mr. Goldberg, Joseph D. Guertin and John E.
Ayres (each of whom is a director, executive officer or beneficial owner of more
than five percent of the outstanding Common Stock of the Company) and one other,
Steven J. Trettel, a current employee of GZA GeoEnvironmental. In consideration
for its interest in the trust, the Company paid $12,000 each to Messrs.
Goldberg, Ayres, Guertin and Trettel.
For the first half of fiscal year 1997, the Company's Manchester, New
Hampshire facility was leased from GZNH Associates, a New Hampshire general
partnership whose partners were Messrs. Zoino and Guertin, Richard M. Simon and
Joseph P. Hehir (each of whom is a director, executive officer, or beneficial
owner of more than five percent of the outstanding Common Stock of the Company)
and three others, Steven J. Trettel, a current employee of GZA GeoEnvironmental,
and Mathew DiPilato and Paul Sanborn, both former employees of GZA
GeoEnvironmental. Lease payments to GZNH Associates totaled $62,868 in fiscal
year 1997. The Manchester facility was sold in August 1996 to an unrelated party
from whom the Company continues to lease the office space.
The Company's Providence, Rhode Island facility is leased from GZRI
Associates, a Rhode Island general partnership whose partners are Messrs.
Goldberg and Zoino (each of whom is a director, executive officer, or beneficial
owner of more than five percent of the outstanding Common Stock of the Company)
and four others, Michael A. Powers, Frank W. Clark, David R. Carchedi and
Nicholas A. Campagna, all current employees of GZA GeoEnvironmental. Lease
payments to GZRI Associates totaled $108,039 in fiscal year 1997.
The Company believes that the foregoing leases were entered into on terms
no less favorable to the Company than could reasonably have been obtained in
arm's-length transactions with independent third parties.
The Company entered into an arrangement in September 1995 with Donald T.
Goldberg, Chairman of the Board and formerly the Company's Chief Executive
Officer, to provide management consulting services to the Company. Mr.
Goldberg's consulting services have been focused on the further development and
expansion of GZA's geotechnical engineering practice and on the enhancement of
client relations and customer satisfaction through greater personal contact and
communication. Prior to January 1, 1997, Mr. Goldberg was compensated for both
his Board-related activities and his consulting services with a monthly fee of
$8,333. On January 1, 1997, Mr. Goldberg became a part-time employee of GZA
GeoEnvironmental due to his increased involvement in engineering and management
of certain technical projects under contract by the Company. During the period
January 1, 1997 to February 28, 1997, Mr. Goldberg received $14,615 salary from
the Company plus expenses plus statutory benefits only. Since becoming an
employee of the Company on a part-time basis, Mr. Goldberg has received no
separate compensation for his service as a director.
13
<PAGE> 16
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed Coopers & Lybrand
L.L.P. as the Company's independent public accountants for fiscal year 1998, and
submits this appointment for ratification by the stockholders at the 1997 Annual
Meeting. Representatives of Coopers & Lybrand L.L.P. are expected to be present
at the 1997 Annual Meeting, will have the opportunity to make a statement if
they desire to do so, and will be available to respond to appropriate questions.
If a quorum is present at the 1997 Annual Meeting, the affirmative vote of
holders of a majority of the Common Stock present or represented and voted at
the meeting is required to ratify the appointment of the Company's independent
public accountants.
The Board of Directors recommends that you vote FOR the ratification of the
appointment of Coopers & Lybrand L.L.P. as the Company's independent public
accountants for the 1998 fiscal year.
PROPOSALS OF STOCKHOLDERS FOR 1998 ANNUAL MEETING
Proposals of stockholders of the Company intended to be presented at the
1998 Annual Meeting of Stockholders of the Company must, in order to be included
in the Company's Proxy Statement and the form of proxy for the 1998 Annual
Meeting, be received at the Company's principal executive offices no later than
February 3, 1998.
In addition, under the by-laws of the Company, any stockholder intending to
present at the 1998 Annual Meeting (a) any proposal (other than a proposal by,
or at the direction of, the Board of Directors of the Company) which proposal
relates to the nomination of candidates for election as directors of the Company
or (b) any other proposal not made by, or at the direction of, the Board of
Directors, Chairman of the Board or President of the Company, must give written
notice of such proposal (including certain information about any nominee or
matter proposed and the proposing stockholder) to the Secretary of the Company
not later than March 14, 1998 and not before December 14, 1997; provided,
however, that if less than 70 days' notice or prior public disclosure of the
scheduled Annual Meeting is given or made, such notice from the shareholder, to
be timely, must be given within 10 days following public disclosure or mailing
of notice of the meeting, whichever is earlier.
AVAILABLE INFORMATION
Management of the Company will provide, without charge, a copy of its most
recent annual report on Form 10-K (excluding exhibits but including any
financial statements and financial statement schedules included or incorporated
by reference therein) to each person solicited by this Proxy Statement at his or
her written request, addressed to the Company at 320 Needham Street, Newton
Upper Falls, Massachusetts 02164, Attention: Investor Relations.
The date of this Proxy Statement is June 10, 1997.
14
<PAGE> 17
GZA GEOENVIRONMENTAL TECHNOLOGIES, INC.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, July
15, 1997, in order to be voted at the meeting.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
GZA GeoEnvironmental Technologies, Inc.
Please Detach and Mail in the Envelope Provided
A /X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
For All
Except Withhold Nominees:
1) Proposal to / / / / M. Joseph Celi
elect the William E. Hodge
following Lewis Mandell
nominees to Andrew P. Pajak
three year terms as Class II Directors.
To withhold authority to vote for any individual
nominee, check the "For All Except" box and strike
a line through that nominee's name in the list at right.
FOR AGAINST ABSTAIN
2) Proposal to ratify the appointment of Coopers & / / / / / /
Lybrand as the Company's independent public
accountants for the fiscal year ending
February 28, 1998.
This proxy is being solicited on behalf of the Board of Directors of the
Company. When properly executed, this proxy will be voted in the manner
directed herein by the undersigned stockholder(s). IF NO DIRECTION IS GIVEN,
THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND 2 IN THE DISCRETION OF THE PERSONS
NAMED AS PROXIES AS TO SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING. A stockholder wishing to vote in accordance with the recommendations of
the Board of Directors need only sign and date this proxy and return it in the
enclosed envelope.
Comments/Address Change: ______________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
__________________________________________________________________________GZACM
RECORD DATE SHARES:
PLEASE SIGN, DATE AND MAIL YOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
Stockholder sign here__________________________________________________________
Co-owner sign here______________________________ Date____________________, 1997
NOTE: Please sign exactly as name appears above. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title.
<PAGE> 18
Please Detach and Mail in the Envelope Provided
PROXY
GZA GEOENVIRONMENTAL TECHNOLOGIES, INC.
230 NEEDHAM STREET
NEWTON UPPER FALLS, MASSACHUSETTS 02164
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 15, 1997
The undersigned hereby constitutes and appoints Donald T. Goldberg, Andrew P.
Pajak and Joseph. D. Guertin, Jr., and each of them acting singly, as proxies
of the undersigned, each with full power to appoint his substitute, and
authorizes each of them, and each substitute so appointed, to represent and
vote all shares of Common Stock of GZA GeoEnvironmental Technologies, Inc. (the
"Company") held of record by the undersigned at the close of business on May
20, 1997 at the Annual Meeting of Stockholders of the Company to be held at The
Sheraton Needham Hotel, 100 Cabot Street, Needham, Massachusetts on July 15,
1997 at 10:00 a.m. local time and at any adjournments thereof.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders and of the Proxy Statement relating
thereto, and hereby revoke(s) any proxy or proxies heretofore given. This proxy
may be revoked at any time before it is exercised.
