SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE
REQUIRED]
For the fiscal year ended December 31, 1996
OR
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from to
Commission file number 0-19761
OP-TECH Environmental Services, Inc.
(Exact name or registrant as specified in its charter)
Delaware 91-1528142
State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
6392 Deere Road, Syracuse, NY 13206
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 315-463-1643
Securities registered pursuant to section 12(b) of the Act:
Title of each class Name or each exchange on which registered
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1943
during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X or No
Indicate by check mark if disclosure of delinquent filers pursuant to
item 405 of regulation S-K
(Section 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K [X].
The aggregate market value of the voting stock held by non-affiliates
of the Company as of
March 15, 1997 was $1,820,436 based upon the average bid and ask price
of such stock on such day.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the Company's
classes of common stock,
as of March 15, 1997. Common Stock, $.01 par value. 4,854,497
PART I
ITEMS 1. BUSINESS
General
OP-TECH Environmental Services, Inc. and Subsidiaries
(the "Company"), a Delaware corporation
provides comprehensive environmental services
predominately in Upstate and Central New York. The
Company performs industrial cleaning of non-hazardous materials,
provides varying services relating to plant facility closure
including interior and exterior demolition as well as
asbestos removal services. In addition, the Company provides
remediation services for sites contaminated by hazardous materials
and provides 24 hour emergency spill response services. The
majority of the Company's revenues are derived from industrial
companies and Municipalities facing complex environmental clean-up
problems associated with hazardous materials as required by the
New York State Department of Environmental Conservation (NYSDEC).
The Company's services include assessing the regulatory, technical, and
construction aspects of the environmental issue, developing a
strategic plan to solve the environmental issue, and performing
the necessary remediation activities. The Company seeks to
provide its clients with remedial solutions which integrate the
various aspects of a project and are well-
documented, practical, cost effective, and acceptable to regulatory
agencies and the public. Through its affiliation with O'Brien & Gere
Limited Inc. and Subsidiaries ("Limited"), the Company has an available
resource of experienced engineers, scientists, construction
professionals and attorneys.
SERVICES
Asbestos Abatement
The Company provides asbestos abatement contracting services to
the public and private sectors. The Company has expertise in all
types of asbestos abatement including removal, disposal and
enclosure and encapsulation. Asbestos removal is performed in
commercial buildings, industrial facilities and governmental buildings.
Interior Demolition/Structural Dismantling
The Company provides interior demolition services such as
removing walls, ceilings and flooring. In addition, the Company
offers structural dismantling services with experience in razing
concrete, wood and steel structures, concrete and brick chimneys
and concrete piers and foundations.
On-Site Industrial and Waste Management Services
The Company provides on-site industrial cleaning and waste management
services. Specialized services for the handling, processing and
disposal of hazardous wastes are provided by vacuuming,
soda blasting, hydroblasting, dredging, dewatering and sludge
processing, sludge pumping, chemical
cleaning and tank cleaning.
Transportation and Disposal Services
The Company provides transportation of hazardous and non-hazardous
wastes from customer sites to customer designated landfills, disposal
facilities and the Company's own Aqueous Treatment
Facility. The Company also provides liquid tank truck transports
equipped with vacuum pumps.
Excavation and Site Remediation Services
The Company provides excavation and soil blending services for
treatment of contaminated
soil using heavy equipment such as excavators, loaders and a large
soil blender. The Company primarily provides on-site soil blending
to public utilities and municipal customers.
Hydrogeological/Drilling Services
The Company subcontracts hydrogeological services to petroleum
companies, engineering firms and local and state public entities.
Through performing hydrogeological assessments, the
Company evaluates and determines the need for ground water remediation
systems, pump and treatment systems and sub-surface petroleum
product recovery. In addition, the Company provides
air sparging systems, long term remediation system operations
and maintenance as well as monitoring
well and recovery well installations.
24 Hour Emergency Spill Response
The Company undertakes environmental remediation projects on both
a planned and emergency basis. Emergency response actions may develop
into planned remedial action projects when soil, groundwater, buildings,
or facilities are extensively contaminated. The Company has
established specially trained emergency response teams.
Many of the Company's decontamination and mitigation activities
result from a response to an emergency situation by one of its response
teams. These incidents can result from transportation accidents
involving chemical or petroleum substances, fires at chemical
facilities or hazardous waste sites, transformer fires or explosions
involving PCB's, and other unanticipated developments. The
substances involved may pose an immediate threat to public
health or the environment, such as possible groundwater contamination.
The Company has an agreement with the NYSDEC to provide emergency
response services in Upstate, Central and Western New York,
payment of which is guaranteed by the NYSDEC.
Emergency response projects require trained personnel who are
equipped with protective gear and specialized equipment and are
prepared to respond promptly whenever these situations occur.
The Company's health and safety specialists and other skilled
personnel closely supervise these projects during and subsequent to
the clean-up process. The steps performed by the Company include rapid
response, containment and control procedures, sampling for
analytical testing and assessment, neutralization and treatment,
collection and transportation of the substance to an appropriate
treatment or disposal facility.
Aqueous Treatment Facility
The Company operates a year round aqueous treatment facility at
the Company's Massena, New York location. The facility provides
for the clean-up of contaminated water and its eventual
discharge into the St. Lawrence River. The facility services both
the Company, its clients and outside vendors. Construction of the
facility was completed in September, 1992 and has seen increased use
as a result of receiving a Part 360 permit from the State of New York.
Overall Site Assessment and Implementation of Remediation Services
Hazardous Waste: The Company's hazardous waste projects include the
design and construction of on-site facilities to monitor, isolate,
or contain hazardous wastes existing in surface
and subsurface water; the transport of contaminated soils;
the decontamination of equipment and facilities related to the
production and use of hazardous materials, industrial cleaning, building
demolition and asbestos removal. Although the Company's projects vary
widely in objective, scope and duration, each project involves the
Company providing one or more of the following services
through the use of its own resources or the resources of selected
subcontractors: strategic planning; site reconnaissance and security;
remedial evaluation; clean-up evaluation; design, construction and
operation of facilities to treat, stabilize, or isolate the hazardous
materials; and closure planning and monitoring.
Strategic Planning: On each of its projects, the Company attempts
as early as possible, to formulate a complete strategy for
directing all efforts toward solving the hazardous waste problem.
The Company's strategic plans are designed to satisfy the demands
of regulatory agencies and the public, sometimes under emergency conditions.
Additionally, the Company attempts to balance the
cost of the alternatives against risks to the client associated with
potential litigation or unfavorable publicity. Through strategic
planning, the Company attempts to minimize expenditures that will not
lead to complete solutions, and to enhance the clients' credibility
with regulatory agencies and the public.
Site Reconnaissance and Security: In conducting a site reconnaissance,
the Company makes a general assessment to determine the basic
characteristics of a site and the limitations imposed
thereby, climatological considerations and the proximity and degree
of residential development. In providing site security, the Company's
services include assessing the hazardous condition, restricting
access to the affected area, assisting in the preparation of any
necessary evacuation plans, eliminating or reducing potential risks
of fire or explosion, containing or removing hazardous materials which
might pose additional risk, and implementing measures to reduce or
halt the spread of hazardous substances into adjacent areas.
Remedial Evaluation: A remedial investigation involves the detailed
assessment of an affected area to determine the nature and extent of
hazardous materials present. This is often done at the
request of one or more regulatory agencies. In conducting such an
investigation, the Company performs numerous physical tests.
A remedial investigation also involves the study of the geologic,
and hydrogeologic characteristics of the affected area and the
surrounding environment and a determination of the risks posed
by the hazardous materials determined to be located in the affected
area. In conducting such investigations, the Company often reviews
the construction of a facility and past storage and handling practices
regarding hazardous materials. The Company has the capability
of removing and replacing underground storage tanks.
Clean-up Evaluation: A feasibility study addresses measures which may
be implemented to remove hazardous wastes from a site, to treat,
stabilize or contain such wastes on-site or to otherwise
mitigate their effects. Such studies take into account, among other
things, available technology, regulatory considerations and the cost-
benefit relationship of alternative measures. Additionally, the
Company reviews the project and alternative remedial measures in light
of legitimate public concerns.
Design, Construction, and Operation of Remedial Facilities:
Based on the results of remedial investigations and feasibility studies,
the Company uses its scientific and construction expertise
directly, or through subcontractors to design an appropriate structure
or system for use at a particular site, and performs the necessary
remediation activities. These remediation activities might include
such diverse measures as construction of a slurry wall to contain
the hazardous materials, construction and operation of a pumping
and filtration system to decontaminate surface or subsurface waters or
construction and operation of an integrated system to excavate
contaminated soil and remove it to a licensed disposal facility.
Closure Planning and Site Monitoring: The Resource Conservation and
Recovery Act of 1976 ("RCRA") requires the planning of closure and
postclosure monitoring for all licensed secure hazardous
landfills, treatment facilities, and on-site hazardous waste storage
areas. The Company plans and performs facility closures and
postclosure monitoring programs. While certain monitoring
requirements are mandated by RCRA, many sites have, at some time,
contained hazardous wastes which also frequently require monitoring.
The Company provides monitoring for sites and the corresponding data
management services.
The Company usually contracts for and manages all aspects of the
work related to the completion of a particular project. In addition,
the Company performs all aspects of the work and certain other
specialized operations, some of which are subcontracted to other
parties. The Company does, however, occasionally, contract to
perform only certain aspects of a particular project. The
Company has submitted a number of bids for projects with other
members of Limited.
Technologies Employed
The Company utilizes a wide variety of physical and chemical treatment
technologies in performing its remediation activities. Physical
treatment technologies generally involve filtration and
aeration techniques and are used to separate contaminants from soils,
slurries or water. Chemical treatment technologies generally involve
flocculation, clarification, precipitation, polymer addition,
chemical oxidation, chemical absorption and stabilization.
Depending on the contaminants present and the site characteristics,
these technologies are combined into integrated treatment systems which
reduce contaminant concentrations to levels consistent with prescribed
regulatory standards.
Regulation
The business of the Company and its clients is subject to extensive,
stringent and evolving regulation by the EPA and various other federal,
state and local environmental authorities. These regulations directly
impact the demand for the services offered by the Company. In addition,
the Company is subject to the federal Occupational Safety and Health Act,
which imposes requirements for employee safety and health. The Company
believes it is in substantial compliance with all federal,
state and local regulations governing its business.
RCRA. The Resources Conservation and Recovery Act of 1976 ("RCRA")
is the principal federal statute governing hazardous waste generation,
treatment, storage and disposal. RCRA, or EPA- approved state programs
may govern any waste handling activities of substance classified as
"hazardous". The 1984 amendments to RCRA substantially expanded its
scope by, among other things, providing for the listing of additional
wastes as "hazardous" and providing of the regulation of
hazardous wastes generated in lower quantities than previously had
been regulated. Additionally, the amendments impose restrictions
on land disposal of certain hazardous wastes, prescribe more
stringent standards for hazardous waste land disposal sites, set
standards for underground storage tanks and provide for "corrective"
action at or near sites of waste management units. Under RCRA,
liability and stringent operating requirements may be imposed on a
person who is either a "generator" or a"transporter" of hazardous
waste, or an "owner" or "operator" of a waste treatment, storage, or
disposal facility. The Company does not believe its hazardous waste
remediation services cause it to fall within any of these categories,
although it might be considered an "operator" of a waste
management facility of a "generator" of hazardous waste if it were
to control the collection, source, separation, storage, transportation,
processing, treatment, recovery or disposal of hazardous wastes,
including operation of a treatment unit for remedial purposes.
Regulation of underground storage tanks (UST) legislation, in
particular Subtitle I of RCRA, focuses on the regulation of underground
tanks in which liquid petroleum or hazardous substances
are stored and provides for the regulatory setting for the principal
portion of the Company's work.
Subtitle I of RCRA requires owners of all existing underground tanks to
list the age, size, type, location and use of each tank with a
designated state agency. The EPA has published performance standards
and financial responsibility requirements for storage tanks over a five
year period. These regulations also require all new tanks which are
installed to have protection against spills, overflows, and
corrosion. Subtitle I of RCRA provides civil penalties of up to
$15,000 per violation for each day of non-compliance with tank
requirements and $10,000 for each tank for which notification was not given
or was falsified. RCRA also imposes substantial monitoring obligations
on parties which generate, transport, treat, store or dispose of
hazardous waste.
Superfund Act. The Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("Superfund Act") generally addresses clean-up
of inactive sites at which hazardous waste
treatment, storage or disposal took place. The Superfund Act assigns
joint and several liability for cost of clean-up and damages to natural
resources to any person who, currently, or at the time of disposal
of a hazardous substance who by contract, agreement or otherwise
arranged for disposal or treatment, or arranged with a transporter for
transport of hazardous substances owned or possessed
by such person for disposal or treatment; and to any person who accepts
hazardous substances for transport to disposal or treatment facilities
or sites from which there is a release or threatened release.
Among other things, the Superfund Act authorized the federal
government either to clean up these sites itself or to order persons
responsible for the situation to do so. The Superfund Act created a
fund, financed primarily from taxes on oil and certain chemicals,
to be used by the federal government to pay for the clean-up efforts.
Where the federal government expends money for remedial activities
it may seek reimbursement form the Potentially Responsible Parties (PRPs).
In October 1986, the Superfund Amendment and Reauthorization act
("SARA") was enacted and has increased environmental remediation
activities significantly. SARA authorizes federal expenditures
of $8.5 billion over five years, while imposing more stringent clean-up
standards and accelerated timetables. The requirements of SARA are
expected to add 1,600 to 2,000 sites to the national priority
list. Within 36 months of the enactment of SARA, remedial
investigation and feasibility studies were to be conducted for at
least 275 national priority list sites, and were this not achieved
for at least 650 sites within five years. Physical on-site remedial
work was to be commenced for at least 175 new sites
in the 36 months after enactment and for an additional 200 sites in
the following 24 months. SARA also contains provisions which expand
the EPA's enforcement powers and which are expected to
encourage and facilitate settlements with PRPs. The Company believes
that, even apart from funding authorized by SARA, industry and
governmental entities will continue to try to resolve hazardous waste
problems due to their need to comply with other statutory and
regulatory requirements and to avoid liabilities to private parties.
The liabilities provided by the Superfund Act could, under certain
factual circumstances, apply to a broad rage of possible activities
by the Company, including generation of transportation of
hazardous substances, releases of hazardous substances, failure to
properly design a clean-up, removal or remedial plan and failure to
achieve required clean-up standards, leakage of removed wastes
intransit or a the final storage site and remedial operations on
ground water. Such liabilities can be joint and several where other
parties are involved.
Other. The Company's operations are subject to other federal laws
protecting the environment, including the Clean Water Act and the
Toxic Substances Control Act.
Many states have also enacted statutes regulating the handling of
hazardous substances, some of which are broader and more stringent
than the federal laws and regulations.
Competitive Conditions
The markets for environmental remediation, as well as demolition and
asbestos removal, have become increasingly competitive. The Company
competes with many different firms ranging from small local firms to
large national firms having greater financial and marketing resources
than the Company. Competition in environmental services is based
largely on competitive pricing and quality of service provided.
Other competitive factors include geographic location as well as
reputation.
Management believes the Company is one of the few firms based in
the Central and Upstate New York Region that offers a high quality
combination of environmental services at the most competitive
prices. In addition, through its wide range of environmental
services, good reputation and competitive pricing, the Company
hopes to maintain a competitive edge in the environmental services
business.
The Company operates field offices in Syracuse, Massena, Rochester
and Albany, New York and an additional office in Canada.
While operations in the Syracuse and Massena offices are substantial,
the Rochester and Albany offices operate on a skeleton staff.
Operations in Canada have been minimal since inception.
Seasonality
Typically during the first quarter of each calendar year there is
less demand for environmental remediation due to the cold weather,
particularly in the Northeast and Midwest regions. In addition,
factory closings for the year-end holidays reduce the volume of
industrial waste generated, which results in lower volumes of waste
handled by the Company during the first quarter of the following
year.
Customers
The Company's client base includes industrial companies, real estate
developers, auto parts manufacturers, aluminum producers, utilities,
waste disposal firms, municipalities and engineering
firms. During 1996, the Company performed services for more than
250 clients. These projects ranged from short-term (three months or
less) to projects which were on going for 12 months or more. The
majority of the projects were short-term in nature and continue to
provide a substantial amount of revenue for the Company. During 1996,
sales to the New York State Department of Environmental
Conservation, amounted to approximately $428,000. Sales to
O'Brien & Gere Limited (an affiliated party) totalled approximately
$1,100,000 or 27% of the Company's revenues.
Insurance
The Company maintains commercial general liability insurance which
provides aggregate coverage limits of $5.0 million. The Company
also maintains asbestos liability and contractors pollution
legal liability which provide aggregate coverage limits of $1.0
million respectively. In addition, the Company also maintains
workers compensation, comprehensive automobile, and Directors and Officers
liability insurance. The Company's insurance coverage is consistent
with the insurance requirements found in the environmental
remediation industry.
Backlog
As of December 31, 1996, the Company had a backlog of orders it
believed to be firm of approximately $1,400,000.
Employees
As of March 15, 1997, the Company had a total of 60 full-time employees
between its headquarters in Syracuse, NY and its branch offices in
Massena, Rochester and Albany, NY. All employees of St. Lawrence
Industrial Services, Inc., a wholly owned subsidiary, are covered by union
contracts. The Company's union contracts are negotiated on an
annual basis and cover wages, vacations, working conditions
and fringe benefits. The Company has contracts with two
union locals in the Massena area.
No other employees are currently covered by union contracts.
The Company's ability to retain and expand its staff will be an
important factor in determining the Company's future success.
The Company maintains employment contracts with its key managers in
its Massena and Syracuse branch offices. Manager contracts are
negotiated on an annual basis and encompass salary, bonuses and
non-compete clauses.The Company does not
maintain key-person insurance for such personnel.
The Company considers its relations with its employees to be good,
and the Company has never had a work stoppage or threat of a
work stoppage.
ITEM 2. PROPERTIES
The Company's executive and branch office located in Syracuse,
New York, occupy approximately 17,000 square feet leased from
O'Brien and Gere Property Development, a related party,
at a current monthly rate of $7,167 including utilities.
The terms of the lease extend through June 30, 1998 and does not
contain an escalation clause.
Additionally, the Company leases approximately 6,400 square feet
of office and garage space in Rochester, New York from Elam Sand
and Gravel at a current monthly rate of $1,500 plus electrical
and gas charges. The terms of the lease extend through
August 31, 1997 and does not contain an
escalation clause.
The Company owns a 13.93 acre parcel of land located in the Town
of Massena, St. Lawrence County, New York. This parcel, which has
approximately 1,300 feet of frontage on the St. Lawrence
River, is located in a protected area where the water is forty-five
feet deep. This provides excellent
dockage for local ships and also ocean going ships utilizing
the St. Lawrence Seaway.
The land is improved with a well maintained concrete and creosote
timbered dock that extends about 90 feet into the river and about
260 feet along the river bed. it is equipped with the
necessary piping, valves and fittings to serve the former
Metropolitan Oil Petroleum Tank Farm. The land is improved with seven
petroleum tanks that have a capacity of 472,000 barrels. There are four
support buildings on the premises, consisting of an office building,
a combination office, ship and boiler room building; and two storage
sheds.
The Company is currently pursuing the sale of its Massena property
and is currently in negotiations with two independent parties
interested in purchasing it. (See additional discussion
under ITEM 7 of this report).
In March of 1997, the Company signed a consent order issued by the
New York State Department of Environmental Conservation which
requires the Company to remediate its Massena, NY
property. Currently, the Company is unable to determine the extent
of the contamination if any.
Management plans to begin digging test sites on the property in the
second quarter of 1997. The Company believes the extent of the
contamination is minimal and will not impair its ability to sell the
property.
The Company's owned equipment consists primarily of construction
equipment such as vacuum trucks, tankers, forklifts, excavation
equipment, pumps, generators and compressors, some
of which have been specially modified for the Company's use.
Chemical trailers and other specialized equipment for short-term
projects are typically leased form local equipment contractors. The
Company also, from time to time, leases equipment to outside parties.
ITEM 3. LEGAL PROCEEDINGS
With the exception of the New York State Department of Environmental
Conservation consent order discussed in ITEM 2 above, the Company
is not a party to any litigation or governmental
proceedings that management believes could result in any judgements or
fines against it or that would have a material adverse effect on
the Company or its financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) The shares of the Company's common stock are listed in the
"Pink Sheets" and on the
NASDAQ Bulletin Board under the symbol OTES.
The high and low bid price for the shares of the Company's common
stock of the following periods is as follows:
Quarter Ended High Bid Low Bid
March 31, 1995 1 1/4 1/2
June 30, 1995 3/4 5/8
September 30, 1995 1 3/4
December 31, 1995 1 3/4
March 31, 1996 1 1/8 5/8
June 30, 1996 7/8 3/8
September 30, 1996 5/8 1/8
December 31, 1996 5/8 1/8
March 15, 1997 5/8 1/8
The aforementioned prices reflect inter-dealer prices, without retail
mark-up, mark down or commission and may not necessarily represent
actual transactions.
(b)At March 15, 1997, there were approximately 140 holders of record of
the Company's common stock.
(c) The Company has never paid any dividends and does not anticipate
paying dividends for the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31
Statement of Operations Data
1996 1995 1994 1993 1992
Revenues $5,792,548 $7,145,587 $5,143,623 $4,648,574 $2,041,532
Net Loss (1,553,320) (847,037) (1,131,139) ($587,084) (953,790)
Net Loss
Per Share (.32) ($.17) ($.25) ($.20) ($.32)
1996 1995 1994 1993 1992
Balance
Sheet Data (5) (2)(3) & (4) (2) & (3)
Total
Assets $5,155,409 $5,527,547 $6,269,756 $5,610,187 $5,202,398
Long-Term
Obligations $875,000 $2,326,459 $1,681,686 $3,249,620 $3,182,871
(2) On March 2, 1994, a shareholder of the Company converted its
$1.0 million long-term obligation to common stock.
(3)On March 2, 1994, the Company paid off its subordinate debt to a
shareholder. The long-term obligation as of December 31, 1993 was
$681,516.
(4)April 6, 1994, the Company sold 170,000 shares of Common Stock
for $255,000.
(5)On November 1, 1995, the Company converted a $500,000 short-term
note to a long-term obligation.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company had cash and cash equivalents of
$19,077 as compared to $32,044 at December 31, 1995.
At December 31, 1996, the Company had a working capital deficit of
$2,978,958 compared to a working capital deficit of $742,556 at
December 31, 1995, with a current ratio of .4 to 1 at the end
of 1996 compared to .7 to 1 at the end of 1995. The increase in
the working capital deficit is primarily attributable to the
default provisions in the Company's debt which has been classified
as current as discussed below.
As a result of recurring operating losses during 1996, the Company's
cash provided by financing activities was due primarily to proceeds
from its line of credit with O'Brien & Gere Limited, an affiliate
of the Company.
For the year ended December 31, 1996, the Company's net cash used in
operating activities was $371,140 versus net cash provided by operating
activities of $308,694 in 1995.
During 1996, the Company had capital purchases of $153,953 which
were financed through operations and long term debt. Capital
expenditures consisted of several utility vehicles and a Vec
Loader which increased the Company's ability to provide dry vacuum
services.
On May 31, 1996, the Company renewed its $1,000,000 working capital
line of credit with a bank. The line of credit currently expires on
May 31, 1997. The Company expects to satisfy its liquidity
requirements in 1997, which are expected to consist of working
capital requirements, principal and interest payments on debt and
some small capital expenditures. In order for the Company to achieve
these cash requirements, it will be necessary for the bank to renew
the line of credit in May 1997.
Although there can be no guarantees of its renewal, management believes
that the bank will renew this credit facility.
Due to the significant amount of debt held by the Company,
a significant rise in interest rates
could have an adverse effect on the Company's profitability and its
ability to meet cash flow requirements.
On August 1, 1996, the Company entered into a modification with the
bank that deferred principal payments on the first and second
mortgages until February 1998. In addition, interest
payments on its unsecured line of credit with O'Brien & Gere
Limited have been deferred until February
of 1998. The Company's ability to resume principal and interest
payments on these obligations depends on its ability to meet its
budgetary goals in 1997.
During 1996, the Company increased its existing unsecured line of
credit with O'Brien & Gere Limited, an affiliate of the Company and a
shareholder, to $1,000,000 due on March 1, 1998. As of
December 31, 1996, there was an $875,000 advance against the
line of credit. Subsequent to year end,
the Company borrowed an additional $125,000 bringing the shareholder
note up to $1,000,000. In March of 1997, O'Brien & Gere Limited
approved an additional $400,000 advance, $200,000 which is
immediately available to the Company and an additional $200,000
which will become available in May
1997 subject to meeting certain budgetary goals.
Substantially all of the Company's debt is with one financial
institution, and such agreements have cross default provisions.
As a result of non compliance with covenants on certain of the debt,
all of the debt is deemed to be in default and callable by the Bank.
Though the Bank has not at this date called the obligations,
there can be no assurances that they will not exercise this right in the
future.
NEW PRESIDENT
During 1996, the Board of Directors conducted a national search for
a new President. After reviewing numerous candidates, the Board
decided to hire Anthony R. Pongonis as the Company's new
President. Since taking on this role in October of 1996,
Mr. Pongonis has been focused on achieving
a higher sales volume for the Company while assembling a new
management team to lead the Company into 1997.
IMPAIRMENT OF LONG-LIVED ASSETS TO BE DISPOSED OF.
The Company's financial statements reflect the non-cash impact
of Statement of Financial Accounting Standards (SFAS) #121 which
was adopted in 1996. The non-cash charge as a result of the
adoption of SFAS #121 was $342,896. $240,594 was related to
equipment which was deemed non-usable in the third quarter and
$102,302 related to the write down of an intangible non-current asset.
As a result of the reduced carrying amount of these long-lived
assets, depreciation and amortization expense is expected to be
reduced by approximately $90,000 in 1997.
ASSETS HELD FOR SALE
Assets held for sale of $1,908,677 at December 31, 1996 consist
principally of the Massena Port Facility ($1,828,677) and certain
equipment ($80,000). As discussed in Item 2 the Company believes the
extent of the contamination on this property is nimimal and will not
impair its ability to sell the property.
THE MASSENA PORT FACILITY
The Massena Port Facility is a former oil tank farm which is located
on the St. Lawrence River in Massena, NY. The property is improved
with several buildings and a deep water docking facility for
large ocean going ships. The property is still a viable location
for a petroleum distribution facility and could still function as
one pending upgrades of tanks and diking systems to current state
and federal guidelines. Any improvements such as these would be
treated as a capital expense in the year they were occurred. Currently,
the Company uses the property for its Massena branch office headquarters,
equipment storage and its Aqueous Treatment/360 Facility. Due to the
significance of the carrying value of the property, the Company obtained
an independent third party appraisal to support its
carrying value. Such appraisal included an evaluation of sales that
took place during the past twelve and eighteen months, plus a
pending transaction. It also included an evaluation of the time frame
during which a sale would be expected. Based upon the appraisal report
and an estimate of the costs to sell, Management has concluded that
there is no impairment of the property's value at this time.
Management recognizes the potential debt reduction and generation
of working capital if the property were to be sold. As a result,
management is actively pursuing the sale of the property and
realizes its value as both a petroleum storage facility as well as
a non-petroleum products storage facility. Currently, management
is pursuing options with two independent parties who are interested
in the property for each of the above purposes.
EQUIPMENT
Management is actively pursuing the sale of certain equipment valued
at $80,000. Due to the nature of the equipment and the current demand
for it, an impairment valuation is not deemed appropriate at this time.
1997 BUSINESS PLAN
Management has formulated a business plan which it believes will
help the Company achieve both its revenue goal and overhead reduction
plan for 1997. There are no assurances that this
program will be successful. Some of the specifics of the plan are
outlined as follows:
Revenues
To increase sales volume, the Company has implemented a Master
Service Agreement Plan. This plan will allow the Company to become
listed on the preferred vendor lists of large industrial
customers. The successful marketing of these plans will allow
for recurring industrial services to these clients and provide a
base workload for the Company.
In addition to the above, the Company is pursuing public projects
in 1997. In the past, OP-TECH has never aggressively pursued work
in the public sector. As a result of changing markets,
management believes the Company can be very competitive in the
public sector and still yield a gross margin sufficient enough to
meet budgetary goals.
Gross Margin
In addition to achieving a higher sales volume for 1997, management
is focusing on attaining a gross margin sufficient enough to cover
overhead expenses. As the overall environmental market
has become very competitive, managing the type of work pursued
has become a difficult challenge.
Management believes it can achieve a proper mix of business during
1997 to enable it to achieve a gross margin consistent with its goals.
Overhead Reduction
Management has taken and will continue to take the necessary steps
it deems appropriate to reduce corporate overhead. Some actions
taken by the Company during 1996 and early 1997 are
outlined as follows;
All staffing needs were reviewed and under utilized staff were
released thus reducing overhead
wages.
The Company eliminated its in house drilling division as it found
the demand for these services
to be at an all time low in its service area.
Several pieces of unused equipment were sold during 1997 which
helped generate approximately $40,000 in additional operating cash.
In addition, the Company has since paid down $82,000 of debt related
to this equipment.
Overhead items such as shop supplies, shop labor and non-project
expenses have been held to a minimum in 1997.
Although there can be no assurances of the Company's ability to
meet its cash requirements during 1997, management believes achieving
certain revenue, gross margin and overhead reduction
goals set forth in its 1997 operating budget will allow the Company
to meet the necessary cash requirements to enable it to continue as
a going concern.
Results of Operations
This financial review should be read in conjunction with the
accompanying Consolidated Financial Statements and related notes thereto.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's future operating results may be affected by a number
of factors, including the Company's ability to: successfully increase
market share in its existing service territory while expanding
its services into other markets; realize benefits form cost
reduction programs; sell the Massena Property and utilize its
facilities and work force profitability in the face of intense
price competition.
The Company's operations may be affected by the commencement and
completion of major site remediation projects; seasonal fluctuations
due to weather and budgetary cycles influencing the
timing of customers' spending for remedial activities;
the timing of regulatory decisions relating to
hazardous waste management projects'; changes in regulations
governing the management of hazardous waste and secular changes in
the waste processing industry towards waste minimization
and the propensity of delays in the remedial market. As a result
of these factors, the Company's revenue and income could vary
significantly form quarter to quarter, and past financial performance
should not be considered a reliable indicator of future performance.
The Company's business has not been significantly affected by
inflation during the periods discussed below.
1996 COMPARED TO 1995
Revenues
During the year ended December 31, 1996, the Company's revenues
decreased 19% to $5,792,548 compared to $7,145,587 reported for
the previous year ended December 31, 1995. A
comparison of revenues by business type between the current and
prior year shows the following.
The asbestos abatement and demolition business remained stable
due to an award of a large asbestos abatement contract in the
fourth quarter. The hydrogeological and drilling business decreased
significantly due to the lack of enforcement of governmental
regulations during the year. The Company has since eliminated its
in-house hydrogeological division and is currently subcontracting
these services to another company. Industrial cleaning services
rose slightly during the year as the Company began to refocus its
marketing effort in this area. The Company's Emergency Spill Response
revenue decreased significantly during 1996 as there were fewer
emergency response calls than in 1995. Finally, the Company saw a
slight decrease in the transportation and disposal business during
the year.
Project Costs and Gross Profit
Project costs for the year ended December 31, 1996 decreased 15%
to $4,036,846 from $4,756,576 for the year ended December 31, 1995.
The decrease in project costs is attributable primarily to decreased
revenues. The gross profit margin for the year ended December 31,
1996 was 30.3% versus 36.8% for the year ended December 31, 1995.
The decrease in the gross profit margin is attributable to
increasingly competitive market conditions which have forced the
Company to bid jobs at a lower gross profit margin than in past
years. In addition, several large projects during 1995
contributed to an overall higher gross profit margin.
Selling, General and Administrative Expenses
During the year ended December 31, 1996 selling, general and
administrative expenses decreased 9.6% to $2,593,996 compared
to $2,871,719 reported for the previous year ended December
31, 1995. The decrease is mainly attributable to a reduction
in personnel.
Operating Loss
For the year ended December 31, 1996, the Company's operating loss
increased to $1,181,190 compared to a loss of $482,708 for year ended
December 31, 1995. The increase in the operating loss
is attributable to an overall lower sales volume in 1996 and a lower
gross margin on sales due to an increasingly competitive market.
In addition, the Company incurred a non-cash charge of $342,896
related to the write-down of certain equipment and intangible assets
during 1996.
Interest Expense
Interest expense decreased slightly in 1996 to $357,173 from
$357,460 in 1995. Interest expense on short term borrowings increased
during 1996 as a result of an increase in the Company's line of
credit borrowings with an affiliate.
Net Loss
The net loss for the year ended December 31, 1996 was $1,553,320
($.32 per share) compared to $847,347 ($.17 per share) in 1995.
As a result of the Company's net operating loss, there was no
provision for federal income taxes recorded in 1996.
1995 COMPARED TO 1994
Revenues
During the year ended December 31, 1995, the Company's revenues
increased by 38.9% to $7,145,587 compared to $5,143,623 reported
for the previous year ended December 31, 1994. A
comparison of revenues by business type between the current and
prior year shows the following.
The asbestos abatement and demolition business increased due to
a large contract with an affiliated party. The hydrogeological and
drilling business increased due to a high volume of governmental
contracts during 1995. Finally, the Company's emergency spill
response revenue rose significantly due to several large fuel
truck spills which occurred throughout the year. The Company also saw a
moderate increase in the transportation and disposal business while
the industrial cleaning business only experienced a slight increase.
Project Costs and Gross Profit
Project Costs for the year ended December 31, 1995 increased 32.5%
to $4,509,328 from $3,402,744 for the year ended December 31, 1994.
The increase in project costs is attributable primarily
to increased revenues. The gross profit margin for the year ended
December 31, 1995 was 36.8% versus 33.8% for the year ended
December 31, 1994. The increase in the gross margin is attributable
to a greater number of projects which were labor and equipment
intensive during 1995.
Selling, General and Administrative Expenses
During the year ended December 31, 1995, selling, general and
administrative (S,G & A) expenses increased by 20.5% to $3,118,967
compared to $2,589,287 reported for the previous year ended
December 31, 1994. The increase in SG & A is mainly attributable to
an increase in bad debt write offs, depreciation expense and added
personnel. In addition, the Company wrote off the remaining value
of its customer list and organization costs in the amount of $107,000.
SG & A as a percent of revenue decreased to 43.6% in 1995 versus 50.4%
for 1994.
Operating Loss
For the year ended December 31, 1995, the Company's operating loss
improved by 43.1% to $482,708 compared to a loss of $848,408 for
the year ended December 31, 1994. The improvement in
the operating loss is attributable to increased revenues and a higher
gross profit margin in 1995.
Interest Expense
Interest expense increased 23.1% in 1995 to $357,460 from $290,453
in 1994 as a result of increased borrowings by the Company principally
to finance capital purchases.
Net Loss
The net loss for the year ended December 31, 1995 improved to
$847,037 ($.17 per share) from $1,131,139 ($.25 per share) in 1994.
As a result of the Company's net operating loss, there was no
provision for federal income taxes recorded in 1995.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Company and the report
of Coopers & Lybrand L.L.P. are submitted under Item 14 of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND OFFICERS OF THE COMPANY
The following table sets forth certain information about the
directors of the Company, all of whom were unanimously elected at
the Annual Meeting of Stockholders of the registrant on May 30,
1996 for a term of one year.
Name, Age Year First
Principal Occupation Elected Certain Other Information
Terry L. Brown (45)
Vice President 1991 Mr. Brown has served his present
position as Vice President since
November 1991. He has served as
President of O'Brien & Gere
Technical Services since
September 1991. He has served as a
director of O'Brien & Gere
Limited since August of 1991. From
1988 to September 1991,
he served as Vice President
and General Manager of O'Brien
& Gere Technical Services.
Richard L. Elander (55)
Vice President 1991 Mr. Elander has served his
present position as Vice
President and General Manager
since June 1994. He also
served as Chief Executive
Officer from November 1991
to June 1994. Mr. Elander
serves as a Director of
O'Brien & Gere Limited
since August 1991.
From prior to 1988, Mr.
Elander served as President
of O'Brien & Gere Operations.
John R. Loveland (59)
Chairman of the Board and
Chief Executive 1994 Mr. Loveland has served his
Officer present position since June 1994.
He has been a director of
O'Brien & Gere Engineers Inc.
since 1973, he served as
President of O'Brien & Gere
Engineers Inc. from 1980 to
December 1992. He has
been Chairman of the
Board of O'Brien & Gere
Limited since 1989.
Cornellus B. Murphy, Jr. (51)
President 1991 Mr. Murphy has served his
current position since June
1994. He previously served
as the Company's Chairman of
the Board from November of
1991 to June 1994. Mr.
Murphy is a Director
of O'Brien & Gere Limited
since 1985 and President of
O'Brien & Gere Engineers,
Inc. since 1992. Prior to
that, Mr. Murphy
served as Senior Vice
President of O'Brien & Gere
Engineers Inc.
and Chairman of the Board
of O'Brien & Gere Technical
Services Inc. since 1992.
From 1982 to 1992, Mr. Murphy
served as President of
O'Brien & Gere Technical
Services Inc.
Steven A. Sanders (51)
Director 1991 Mr. Sanders is President of
the Law Office of Steven A.
Sanders P.C. since 1992.
Prior to that, he served as
Counsel to Jacobs, Persinger
& Parker from 1987 to 1992.
Prior thereto, Mr. Sanders
served as Senior Partner of
the law firm Sanders and
Srerchio.
EXECUTIVE OFFICERS OF THE COMPANY
Name Age Position Held
John R. Loveland 59 Chairman of the Board and C.E.O.
Cornelius B. Murphy, Jr. 51 President
Anthony R. Pongonis 44 President
Terry L. Brown 45 Vice President
Richard L. Elander 55 Vice President and General Manager
Dennis S. Lerner 50 Secretary
Joseph M. McNulty 42 Treasurer
Mr. Pongonis was hired during the fourth quarter of 1996.
He has over twenty-five years of experience in the environmental
services market.
Richard L. Elander, Cornelius B. Murphy, Jr. and Terry L. Brown
resigned as officers of the Company on December 31, 1996.
Each of them continues to remain directors of the Company.
Mr. Lerner has served his present position since February of 1994.
Mr. Lerner is Assistant Secretary of O'Brien & Gere Engineers Inc.
a wholly owned subsidiary of O'Brien & Gere Limited and
serves as O'Brien & Gere Engineer's in-house legal counsel.
He has held this position since 1990.
Mr. McNulty has served his current position since February 1993.
Mr. McNulty is the Vice President of Finance of O'Brien & Gere Limited
since April of 1995 and serves as a Director of O'Brien &
Gere, Inc. of North America.
ITEM 11. Executive Compensation
The following table sets forth summary information concerning
compensation paid or accrued by the
Company for services rendered during the last three fiscal years.
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payments
Other
Name and Annual # LTIP All Other
Principal Position Year Salary Comp. Options Payouts Comp.(1)
John R. Loveland 1996 $ 16,800 -0- 50,000 -0- -0-
Chairman and CEO 1995 $ 24,960 -0- 50,000 -0- -0-
1994 $ 12,480 -0- -0- -0- -0-
Richard L.Elander 1996 $100,564 -0- 100,000 -0- $6,946
Vice President 1995 $105,957 -0- 100,000 -0- $5,575
1994 $123,325 -0- -0- -0- $4,508
(1) Amounts shown consist of the Company's contribution to the
Company's 401(k) Profit Sharing Plan.
Year End Option Table
The following table sets forth certain information regarding
stock options held as of December 31, 1996 by the named executive
officers.
Number of Securities
Underlying Unexercised
Shares Options at Fiscal Year End
Acquired on Value Exercisable Unexercisable
Name Exercise # Realized # #
John R. Loveland 50,000 -0-
Richard L. Elander 100,000 -0-
Value of Unexercised
In-the-Money Options
Options at Fiscal Year-End (1)
Exercisable Unexercisable
# #
-0- -0-
-0- -0-
(2)The options for all Executive Officers were out-of-the -
money on December 31, 1996 as the exercise price of the options
exceeded the closing price of the Company's Common Stock as
reported by the National Quotation Bureau Inc.
Compensation of Directors
Directors of the Company are paid $500 for each quarter plus
reimbursement for their actual expenses incurred in attending
meetings. During 1996, the Company paid its 1995 Directors fees in the
following manner, two directors were issued 757 shares of stock and
$864 in cash, one director was paid in 757 shares of stock and two
directors were paid nothing. The fair value of the stock on the
issue date was $.62 per share. At December 31, 1996 the Company has
accrued the remaining portion of its 1996 Directors Fees
which remain unpaid.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock at March 15, 1997
by persons who, to the knowledge of the Board of
Directors, beneficially own more than five percent of the outstanding
shares of Common Stock of the Corporation.
All voting power of the Corporation is vested in its Common Stock.
As of the close of business on March 15, 1997, 4,854,497 shares
of Common Stock, par value $.01 per share were outstanding. Each
share of Common Stock is entitled to one vote.
Name and Address Number of Shares of Common Percentage
of Beneficial Owner Stock Beneficially Owned (1) of Class
O'Brien & Gere Limited
5000 Brittonfield Parkway 2,068,200 (2) 42.6%
Syracuse, NY 13220
Richard L. Elander
3613 Melvin Drive South 428,608 (3)(7) 8.9%
Baldwinsville, NY 13027
Terry L. Brown 50,000 (4)(7) < 1%
Cornelius B. Murphy Jr. 667 (7) < 1%
Steven A. Sanders 25,552 (5)(7) < 1%
John R. Loveland 96,000 (6)(7) 1.0%
All Officers & Directors
as a Group (7 persons) (4)(5)(6)(8)
(1) Except as set forth in (2) below, the beneficial owners
have sole voting and investment power over the shares owned.
(2) 1,397,059 of these shares are pledged as collateral to
OnBank & Trust Company, Syracuse, New York to secure the
Corporation's Commercial Mortgage Loan in the principal amount of
$1,150,000. For so long as these shares are pledged to OnBank
& Trust Company and the Corporation is not in default in the
payment of principal and interest on the Commercial
Mortgage Loan. O'Brien & Gere Limited ("Limited") shall have
the right to continue to vote the pledged shares on all matters.
The pledge will terminate on December 31, 1996 or on any
subsequent fiscal year, provided certain revenue, income,
and balance sheet ratios are achieved, and there are no material
adverse factors in the financial condition of the
Corporation as reasonably determined by OnBank & Trust Company.
(3)Includes currently exercisable options to purchase 100,000
shares. Does not include 2,068,200 shares owned by Limited of
which Mr. Elander is a director.
(4)Includes 50,000 shares issuable upon exercise of currently
exercisable stock options. Does not include 2,068,200 shares
owned by Limited of which Mr. Brown is a director.
(5)Does not include 200 shares which are owned by Mr. Sanders'
wife as custodian for the son as to which Mr. Sanders disclaims
beneficial ownership.
(6)Includes 50,000 shares issuable upon exercise of currently
exercisable options. Does not include 2,068,200 shares currently
owned by Limited of which Mr. Loveland is a director.
Includes 46,000 shares owned by Mr. Loveland's wife as to which Mr.
Loveland disclaims beneficial ownership.
(7) Director
(8) Includes 50,000 shares issuable upon exercise of currently
exercisable options in the name of the following executive officers:
Joseph McNulty, Treasurer and Dennis Lerner, Secretary.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 1, 1995, the Company entered into a lease agreement
with O'Brien & Gere Property Development (an affiliate) to
occupy approximately 17,000 square feet of office and garage
space. The terms of the lease extend through June 30, 1998.
Total rent expense incurred in 1996 amounted to
$88,992.
During 1996, the Company provided approximately $1,110,000 of
remediation, sub-contract support and project services to O'Brien
& Gere Limited, an affiliated party. Services provided to O'Brien
& Gere Limited were at competive rates which are bid on a
project by project basis.
The Company purchases technical, accounting and consulting services
from O'Brien & Gere Limited, an affiliated party.
The costs for these services amounted to $150,743 in 1996.
The Company had a $1,000,000 unsecured line of credit with O'Brien
& Gere Limited, an affiliated party, due on March 1, 1998.
Interest is payable at prime plus 2%. Interest expense amounted to
$59,453 for 1996.
Steven A. Sanders, a director of the Company, is President of The
Law Offices of Steven A. Sanders, P.C. which has provided
professional services to the Company since August of 1991, and it is
anticipated that it will continue to do so.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Page
(a) Financial Statements and Exhibits
(1) Report of Independent Auditors. F-1
Consolidated Balance Sheets at December 31, 1996 and 1995. F-2
Consolidated Statements of Operations for the years
ended December 31, 1996, 1995 and 1994. F-3
Consolidated Statements of Shareholders' Deficit for the years
ended December 31, 1996, 1995 and 1994. F-4
Consolidated Statements of Cash Flows for the years
ended December 31, 1996, 1995 and 1994. F-5
Notes to Consolidated Financial Statements. F-6
(2) All schedules for which provision is made in the
applicable accounting regulation of
the Securities and Exchange Commission are not
required under the related instructions or are
inapplicable, and therefore have been omitted.
(21) Subsidiaries of the Company:
St. Lawrence Industrial Services Inc.
OP-TECH Environmental Services Limited - Ontario, Canada
(b) Reports on Form 8-K
The Company did not file any Current Reports on Form
8-K during the three months ended
December 31, 1996.
(c) Exhibits
(10) - Union and Employment Contracts
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly
authorized.
OP-TECH Environmental Services, Inc.
(Registrant)
By:/s/ John R. Loveland
John R. Loveland, Chief Executive Officer
January 9, 1998
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities indicated on
the 9th day of January, 1998.
/s/ John R. Loveland
John R. Loveland Director and Chairman of the Board
(Principal Executive Officer)
/s/ Cornelius B. Murphy, Jr.
Cornelius B. Murphy, Jr. President and Director
/s/ Terry L. Brown
Terry L. Brown Vice President and Director
/s/ Richard L. Elander
Richard L. Elander Vice President and Director
/s/ Steven A. Sanders
Steven A. Sanders Assistant Secretary and Director
/s/ Joseph M. McNulty
Joseph M. McNulty
Treasurer
COOPERS & LYBRAND
INDEPENDENT AUDITORS' REPORT
Shareholders and Board of Directors
OP-TECH Environmental Services, Inc. and Subsidiaries
We have audited the accompayning consolidated balance sheets of OP-TECH
Environmental Services, Inc. and Subsidiaries as of December 31, 1996
and 1995, and the related consolidated statements of operations,
shareholders' deficit, and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain resonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statementst referred to
above present fairly, in all material respects, the consolidated
financial position of OP-TECH Environmental Services, Inc. and
Subsidiaries at December 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for the years ended
December 31, 1996 and 1995, in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note 2 to the financial statements, the Company has
suffered recurring losses from operations and has a net capital
deficiency that raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are
also described in Note 2. The financial statemetns do not include any
adjustments that might result from the outcome of this uncertainity.
As discussed in Note 5 to the consolidated financial statements, in
1996 the Company changed its method of accounting for the impairment
of long-lived assets.
Coopers & Lybrand LLP
Syracuse, New York
April 2, 1997
ERNST & YOUNG
Independent Auditors Report
Shareholders and Board of Directors
OP-TECH Environmental Services Inc.
and Subsidiaries
We have audited the consolidated statements of operations, shareholders'
equity and cash flows of OP-TECH Environmental Services, Inc. and
subsidiaries for the year ended December 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by managment as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements of OP-TECH
Environmental Services, Inc. and subsidiaries referred to above
present fairly, in all material respects, the consolidated results of
their operations and their cash flows for the year ended December 31,
1994, in conformity with generally accepted accounting principles.
Ernst & Young LLP
Syracuse, N.Y.
March 15, 1995
OP-TECH Environmental Services, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, 1996 and 1995
ASSETS 1996 1995
Current Assets:
Cash and cash equivalents $ 19,077 $ 32,044
Accounts receivable
(net of allowance for
doubtful accounts of
approximately $33,000
in 1996 and $31,000 in 1995):
Unaffiliated parties 890,028 1,064,689
Affiliated parties 658,690 196,270
1,548,718 1,260,959
Costs on uncompleted projects
applicable to
future billings 100,941 102,199
Prepaid expense 117,082 114,535
Other assets 151,418 57,308
Total current assets $1,937,236 $1,567,045
Property and equipment, net 1,234,949 3,765,017
Assets held for sale 1,908,677 0
Other Assets 74,547 214,882
5,155,409 5,546,944
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Notes payable to bank $ 971,000 $ 780,000
Accounts payable:
Unaffiliated parties 954,066 681,161
Affiliated parties 112,997 10,242
$1,067,063 691,403
Billings in excess of
costs and estimated profit
on uncompleted contracts 238,063 149,202
Accrued payroll and related
liabilities 208,385 125,281
Accrued expenses and
other liabilities 233,562 147,632
Current portion of long-term
debt 2,198,121 416,083
Total current liabilities 4,916,194 2,309,601
Long-term debt 0 2,081,459
Long-term notes
payable - affiliate 875,000 245,000
Total liabilities 5,791,194 4,636,060
Shareholders' deficit:
Common stock, par value $.01 per share;
authorized 7,500,000 shares; 4,854,497
and 4,850,058 and shares outstanding as
of December 31, 1996 and 1995,
respectively 48,535 48,500
Additional paid-in capital 4,491,773 4,485,157
Accumulated deficit (5,176,093) (3,622,773)
(635,785) 910,884
$5,155,409 $5,546,944
The accompanying notes are an integral part of the consolidated financial
statements.
OP-TECH Environmental Services, Inc. and Subsidiaries
Consolidated Statements of Operations
Years Ended December 31, 1995 and 1994
1996 1995 1994
Project billings
and services $5,792,548 $7,145,587 $5,143,623
Project Costs 4,036,846 4,756,576 3,554,744
Gross margin 1,755,702 2,389,011 1,588,879
Selling, general and
administrative
expenses 2,593,996 2,871,719 2,437,287
Prvision for
impairment of
long-lived asset 342,896
Operating loss (1,181,190) (482,708) (848,408)
Other income and expense:
Interest income 8,699
Interest expense (357,173) (357,460) (290,453)
Other income
(expense), net (14,957) (3,503) 2,923
(372,130) (360,963) (278,831)
Loss before
income taxes (1,553,320) (843,671) (1,127,239)
State income taxes 3,366 3,900
NET LOSS $(1,553,320) $ (847,037) $(1,131,139)
Net loss per share $(.32) $(.17) $(.25)
OP-TECH Environmental Services, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
Operating activities:
Net loss $(1,553,320) $ (847,037) $(1,131,139)
Adjustments to reconcile net
cash (used in) provided by
operating activities:
Provision for loss on
accounts receivable 131,290 126,334 61,906
Depreciation and
amortization 486,021 728,438 526,182
Provision for impariment
of long-lived assets 342,896
Loss on disposal of
equipment 3,770 4,600
(Increase) decrease in operating
assets and increase (decrease)
in operating liabilities:
Accounts receivable (419,049) 338,765 (829,025)
Costs on uncompleted
projects applicable
to future billings 1,258 (1,141) 57,740
Prepaid expenses and
other assets 6,209 (2,743) (97,812)
Billings and
estimated profit
in excess of costs of
uncompleted contracts 88,861 (18,221) 167,423
Accounts payable
and other
accrued expenses 544,694 (19,471) 96,540
Net cash (used in)
provided by
operating activities (371,140) 308,694 (1,143,585)
Investing activities:
Purchases of property and
equipment (153,953) (503,640) (492,521)
Proceeds from sale of
property and equipment 5,707
Increase inorganization
costs/other (3,583)
Maturity of certificates
of deposit 255,000
Net cash used in investing
activities (153,953) (497,933) (241,104)
Financing activities:
Proceeds from notes payable
to banks and long-term
borrowings, net of
financing costs 1,732,000 231,621 1,387,288
Proceeds from notes payable
to affiliates 630,000 140,000 250,000
Principal payments on
long-term borrowings to
affiliates (145,000)
Principal payments on
subordinated debt due
to related party (875,000)
Principal payments on
current and long-term
borrowings (1,856,525) (310,998) (609,917)
Prceeds form issuance of
common stock 6,651 4,512 1,519,374
Net cash provided by
financing activities 512,126 65,135 1,526,745
(Decrease) increase in
cash and cash equivalents (12,967) (124,104) 142,056
Cash and cash equivalents at
beginning of year 32,044 156,148 14,092
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 19,077 $ 32,044 $ 156,148
The accompanying notes are an integral part of the consolidated fiancial
statements.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
OP-TECH Environmental Services, Inc., a Delaware corporation and
Subsidiaries (the "Company"), provides comprehensive
environmental services predominately in Upstate and Central New
York. The Company performs industrial cleaning of non-hazardous
materials, provides varying services relating to plant facility
closure including demolition and asbestos services, provides
remediation services for sites contaminated by hazardous
materials and provides emergency spill response services. The
Company has two subsidiaries, St. Lawrence Industrial Services,
Inc., a New York corporation and OP-TECH Environmental Services,
Ltd., a Canadian subsidiary.
Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been
eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements.
Estimates also affect the reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from those estimates.
One of the more significant estimates includes the evaluation of
impairment of the Company's long-lived assets. As more fully
described in Note 5, the Company has had certain property held
for sale appraised by an independent third party. Such
appraisals are dependent upon various assumptions and estimates,
which are subject to change over time. Future changes in these
estimates may have a material effect on the conclusions reached
and the determination of impairment.
Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents. The carrying amount reported in the balance sheet
for cash and cash equivalents approximates its fair value.
Project Income Recognition and Unbilled Project Costs
Predominately, contracts are short-term in nature, less than
three months, and revenue is recognized as the costs are
incurred and billed. Income on long-term contracts is
recognized on project billings based on the
percentage-of-completion method utilizing the cost-to-cost
basis. Project costs are generally billed in the month they are
incurred and are shown as current assets.
In the event the interim billings exceed costs and estimated
profit, the net amount of deferred revenue is shown as a current
liability. Estimated losses are recorded in full when
identified.
Concentration of Business Risk - Significant Customers
Sales to one customer, other than an affiliated party, amounted
to $428,989, $1,777,468 and $570,720 in 1996, 1995 and 1994,
respectively. Accounts receivable at December 31, 1996, 1995
and 1994 include $164,439, $157,027 and $232,716, respectively,
from this customer.
For the year ended December 31, 1996 two individual customers,
including one shareholder, generated approximately $1,538,952,
or 27% of the Company's revenues.
Property and Equipment
Property and equipment are stated at cost. Expenditures for
repairs and maintenance are charged to expense as incurred.
Depreciation and amortization of assets including those recorded
under capital leases is provided for using the straight-line
method.
Assets Held for Sale
Assets held for sale are stated at the lower of carrying
amount or fair value less cost to sell. The fair value of the
assets held for sale, which comprise of principally the Massena
property, is substantially determined by an independent
appraisal.
Long and Short-Term Debt
The carrying amounts of the Company's short-term secured and
unsecured borrowing and non-traded variable-rate long-term debt
agreements approximate fair value. The fair values of the
Company's non-traded fixed-rate long-term debt are estimated
using discounted cash flow analysis, based upon the Company's
current incremental borrowing rates for similar types of
borrowing arrangements.
Income Taxes
The Company provides for income taxes in accordance with the
liability method as set forth in Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes".
Under the liability method, deferred tax assets and liabilities
are determined based on the difference between the financial
statement and tax basis of assets and liabilities and are
measured using the enacted tax rates and laws that may be in
effect in the years in which the differences are expected to
reverse.
Net Loss Per Share
Net loss per share is based on the average number of common and
common equivalent shares outstanding during the period. The
weighted average number of shares outstanding is 4,851,614 in
1996, 4,848,834 in 1995 and 4,455,364 in 1994, therefore, both
primary and fully diluted earnings per share were calculated
using the same number of weighted average common shares
outstanding.
Impairment of Long-Lived Assets
In March 1995, the Financial Accounting Standards Board ("FASB")
issued Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets to Be Disposed Of ("FAS
121"), for fiscal years beginning after December 15, 1995. This
statement requires long-lived assets and certain identifiable
intangibles, to be held and used by the Company and assets to be
disposed of by the Company, to be reviewed for impairment
whenever events or changes in circumstances indicate the
carrying amount of an asset may not be recoverable. As a result
the Company's assets classified as assets held for sale and
assets to be held and used have been evaluated in accordance
with the provisions of SFAS 121.
Reclassification
Certain amounts in the 1995 financial statements have been
reclassified to conform to 1996 presentation.
2. BUSINESS OPERATIONS
As reflected in the accompanying financial statements, the
Company has suffered recurring losses from operations since
inception, has a working capital deficiency at December 31,
1996, and a negative capital deficiency that raise substantial
doubt about its ability to continue as a going concern.
Substantially all of the Company's debt is with one financial
institution, and such agreements have cross default provisions.
As a result of non compliance with covenants on certain of the
debt, all of the debt is deemed to be in default and callable by
the Bank. Though the Bank has not at this date called the
obligations, there can be no assurances they will not exercise
their right in the future. In addition, the Company's
$1,000,000 revolving loan is subject to annual renewal in May
1997. Accordingly, all debt related to this Bank has been
classified as current.
Management's plans with respect to its ability to continue as a
going concern cover the following significant areas. First of
all, there has been a change in the leadership at the Company
intended to refocus the Company on growth and profitability.
Secondly, the new leadership has put together a budget for 1997
that, if achieved, will provide sufficient cash flow to meet its
obligations when they come due, when considered in connection
with the financing plans discussed below. This budget includes
three main points of focus: increasing revenues, maintaining its
gross profit margin, and continued reduction in operating
expenses.
In order to achieve its budgeted revenue goals, the Company is
focusing on developing relationships with large industrial
customers to ensure the Company is on their preferred vendor
lists. The Company believes this will allow for more recurring
core service revenue from this base of companies. In addition,
the Company is aggressively pursuing public projects, a market
segment not pursued in the past.
With respect to gross margin, the Company has eliminated certain
product lines not able to generate sufficient margins to warrant
continued management focus. All efforts are now being focused
on those projects whereby the Company is able to be both
competitive and be able to realize historical margin levels.
The Company has been engaged in continuous efforts to reduce its
fixed operating expenses. The 1997 budget includes goals to
reduce fixed costs by a further ten percent. The Company is
also looking at under utilized assets that could be sold to
raise additional funds.
With respect to its financing agreement, the Company has entered
into a modification agreement with the Bank deferring principal
payments on the first and second mortgages until February 1998.
This amendment has reduced the Company's cash flow requirements
for 1997. If the Bank, and other creditors, do not call their
debt, as a result of the covenant defaults, then the principal
payments due for 1997 on all debt obligations will be $217,583.
Subsequent to year end, the Company borrowed an additional
$125,000 from its largest Shareholder, bringing the Shareholder
note up to $1,000,000. In addition, the Shareholder has
committed to advance an additional $200,000 in convertible
debentures today, and another $200,000 in convertible debentures
after May 1, 1997, contingent upon the occurrence of certain
events.<PAGE>
Notes to Consolidated Financial Statements
Based on achieving the Company's 1997 budget, availability of
additional financing from a Shareholder, renewal, under similar
terms, of the Company's revolving loan and anticipating the Bank
will not call its debt obligations, management believes that
there will be sufficient cash flow to meet its obligations when
they come due. However, there can be no assurances the Company
will be able to increase its revenues, maintain its gross margin
and achieve its cost reductions to achieve its 1997 budget, nor
that the Bank will renew its revolving loan and not call its
debt obligations during 1997. In the event any one or
combination of the above events do not occur, the Company may
not be able to meet its obligations as they come due.
3. RELATED PARTY TRANSACTIONS
The Company purchases technical, accounting, and consulting
services and rented certain office and warehouse space from a
shareholder and its affiliates. The cost for these services
amounted to $150,743, $122,924 and $162,012 in 1996, 1995 and
1994, respectively.
Additionally, the Company provided $1,109,963, $1,637,499 and
$1,059,362 of remediation, sub-contract support and project
services to a shareholder and its affiliates for the years
ending December 31, 1996, 1995 and 1994, respectively.
Interest expense on an unsecured line of credit with a
stockholder was approximately $59,500, $16,000 and $26,500 in
1996, 1995, and 1994, respectively.
In connection with the bank financing arrangement, a certain
shareholder has pledged to the bank, an aggregate of 1,397,059
shares of common stock of the Company owned by them, as security
for the Company's commercial mortgage and term loan.
See also Note 6 for additional related party transactions.
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following at
December 31:
1996 1995
Land and improvements $ - $ 1,117,761
Building - 833,833
Furniture and fixtures 35,033 34,334
Office machines 133,920 120,567
Utility vehicles 184,941 164,600
Field equipment 1,909,347 2,586,632
Aqueous treatment 332,909 329,176
System
2,596,150 5,186,903
Less: Accumulated 1,361,201 1,421,886
Depreciation
$ 1,234,949 $ 3,765,017
Depreciation expense amounted to $447,988, $471,811, and
$381,972 for 1996, 1995, and 1994, respectively.
5. IMPAIRMENT OF LONG-LIVED ASSETS
Assets Held for Sale
As a result of the Company's operating losses, and the need to
increase cash flows, the Company decided, in the third quarter,
to actively pursue the disposal of under utilized assets. The
largest assets to be disposed of is the Massena Port Facility.
The Company acquired this asset in 1991 for the purpose of
developing a large aqueous treatment facility. Based on an
independent appraisal, the Company has determined there is not
an impairment of the recorded value of this asset. In addition,
the Company has identified certain non-critical equipment
expected to be sold in 1997. This equipment was deemed to have
an impairment of approximately $240,000 and, accordingly in the
third quarter, the Company provided for such through a charge to
the income statement.
The components of Assets Held for Sale consist of the following:
Massena Port Facility $ 1,828,677
Equipment 80,000
$ 1,908,677
Assets to be Held and Used
Due to the operating losses over the past years, the Company has
evaluated whether there is any impairment of its long-lived
assets in accordance with SFAS #121. As a result of this
review, the Company wrote off approximately $100,000 of
intangible assets during the fourth quarter related to the
original purchase of Fourth Coast Pollution, Inc. No further
write downs were deemed to be necessary by management at this
time. Management will continue to monitor whether, as a result
of future events, any impairment of its assets has occurred.
6. DEBT AND LEASE OBLIGATIONS
At December 31, 1996, the Company had a borrowing agreement that
provides for available borrowings up to $1,000,000 on a
revolving loan basis due in May of 1997, subject to certain
acceleration clauses. The revolving loan is subject to renewal,
at the bank's option, in May of 1997. Advances are based upon
85% of certain accounts receivable, as defined in the loan
document, plus 50% of the open project costs. Borrowings
against the revolving loan aggregated $971,000 at December 31,
1996. Interest is charged at prime plus 2% (10.25%). The
Company also has an outstanding $29,000 letter of credit with a
bank at December 31, 1996. The weighted average borrowing rates
under short-term credit facilities were 10.25% at December 31,
1996 and 10.5% at December 31, 1995.
Long-term debt is summarized as follows at December 31, 1996 and
1995:
1996 1995
Commercial mortgage note payable to a bank,
due in monthly installments of $13,232
commencing February 1998 and continuing
through July 2007, including interest
at 9.5% through June 1997 and an interest
rate equal to the prime plus 350 basis points
determined 45 days prior to the beginning of
the next two five year periods, collateralized
by land and building held for sale
having a net carrying value of $1,828,677. (a)
$ 985,782 $ 1,013,386
$1,000,000 unsecured line of credit payable to
a Shareholder with interest and principal
due March 1, 1998. Interest is
accrued at prime plus 2% (10.25% at 1996). (c) 875,000 245,000
Term notes payable to a bank, due in
monthly principal installments of $14,546
plus interest through January 2000. As
of February 2000 monthly interest payments
of $7,208 plus interest through May 2000.
Interest is at prime plus 2% (10.25% at 1996)
and loan is collateralized by equipment with
a net carrying value of $428,435. (a)(b) 385,275 506,455
Term note payable to a bank, due in monthly
principal installments of $2,438 plus
interest through December 1999, with interest
at prime plus 2%, collateralized by equipment with
a net carrying value of $102,866. (a) 89,417 115,999
Term note payable to a bank, due in
monthly principal installments of $5,952
plus interest commencing February 1998
and continu- ing through November 2002
with a balloon payment of $107,144
due December 2002. Interest is at
prime plus 2% (10.25% at 1996) and
loan is collateralized by a second
mortgage on land and building held
for sale having a net carrying value of
$1,828,677. (a)( b) 452,381 500,000
Various equipment installment obligations,
due in aggregate monthly installment
payments of $11,100, including interest
rates between 8.37% and 15%, collateralized
by equipment with a carrying value
of $321,607. (a) 285,266 361,702
3,073,121 2,742,542
Less: Current portion 2,198,121 416,083
$ 875,000 $ 2,326,459
(a) As a result of various subjective acceleration clause and
cross defaults in the debt agreements, all of the debt
obligations, other than the Shareholder line of credit, are
callable by the lenders. As of the date of these financial
statements, none of the lenders have called such debt.
(b) As of August 1, 1996, the Company entered into a
modification agreement with the Bank to defer principal payments
until February 1, 1998. The Company is making interest payments
as prescribed by the original loan agreements.
(c) Subsequent to December 31, 1996, the Company authorized the
issuance of $200,000 of unsecured convertible debt to be sold to
the Shareholder. The conversion will be at the price of $1 of
debt per share of Company common stock. Other terms of the debt
are currently being negotiated. The Shareholder has
conditionally indicated its willingness to acquire an additional
$200,000 (for a maximum total of $400,000) of this convertible
debt, to be issued no earlier than May 1, 1997.
The carrying amounts and fair values of the Company's debt
obligations at December 31, 1996 are as follows:
Short-term debt obligations $ 1,846,000 $ 1,846,000
Long-term debt obligations:
Variable-rate obligations 927,073 927,073
Fixed-rate obligations 1,271,048 1,255,593
Interest paid amounted to approximately $326,000, $357,000 and
$325,000 in 1996, 1995 and 1994, respectively.
Scheduled principal payments on long-term debt, assuming the
creditors do not call the debt, for the next five years are as
follows:
1997 $ 217,583
1998 1,285,423
1999 333,805
2000 223,191
2001 161,108
Thereafter 852,011
3,073,121
Subsequent to December 31, 1996 the Company sold approximately
$80,000 of equipment, the proceeds were utilized to reduce its
outstanding debt obligations.
Office facilities, a portion of which is with an affiliate of
the Company's shareholder, are leased under noncancelable
operating leases expiring at various dates through 1999. Rent
expense incurred amounted to $120,314, $98,720 and $71,352 in
1996, 1995 and 1994, respectively. Future minimum lease
payments under noncancelable operating leases are as follows:
1997 - $137,228, 1998 - $70,036, 1999 - $22,416.
The Company incurred non-cash debt and capital lease obligations
of $16,104 and $84,782 in 1996 and 1995, respectively, for the
acquisition of equipment.
7. STOCK OPTIONS AND WARRANTS
The Company approved a stock option plan permitting the issuance
of up to 500,000 shares of common stock. The purpose of the
Plan, which is more fully defined by the Plan document, provides
various directors, officers and employees ("Eligible Employees")
of the Company the opportunity to acquire a stake in the growth
of the Company, as well as a means of promoting the Eligible
Employee's maximum effort and continued association with the
Company.
Stock options granted under the Plan, at prices ranging from
$1.50 to $2.75 per share, allow the Eligible Employee to
purchase the Company's common stock, for a period not to exceed
three years, at the price established at the grant date.
Options granted under the Plan must specify option periods
ending not more than ten years from the date of grant. The
following table summarizes option activity of the Plan during
1996, 1995 and 1994:
Weighted No. of
Average Shares
Exercise Under
Price Options
Balance at January 1, 1994 $2.75 175,000
Options granted 2.43 275,000
Options expired (2.75) (175,000)
Balance at December 31, 1994 2.43 275,000
Options granted - -
Balance at December 31, 1995 2.43 275,000
Options granted 1.50 25,000
Options forfeited (2.75) (68,750)
Balance at December 31, 1996 2.59 231,250
The Company has elected to follow APB Opinion No. 25 and related
interpretations in accounting for the options granted under the
Plan. Under APB Opinion No. 25, because the exercise price of
the Company's stock is above the market price of the underlying
stock on the date of the grant, no compensation expense is
recognized. Under SFAS No. 123, rights to acquire company stock
are to be valued under the fair value method and the proforma
effect of such value on reported earnings and earnings per share
are to be disclosed in the notes to the financial statements.
As the fair value of these options are not material, further
disclosures are not required.
On March 2, 1994, the Company issued to Summit Capital
Associates, Inc. two separate warrant certificates to purchase
146,250 and 125,000 shares, respectively, of common stock.
These warrants were issued in connection with a certain advisory
service agreement in 1993. These warrants are exercisable on or
after March 2, 1995 and on or before March 1, 1998 for a price
of $1.65 per share.
As of December 31, 1996, the Company has reserved a total of
502,500 shares of common stock for issuance under the agreements
discussed above. No options or warrants have been exercised.
8. INCOME TAXES
The Company has net operating loss carryforwards of
approximately $5,346,000 for income tax purposes that expire
through the year ending December 31, 2011. State income taxes
and franchise taxes paid were $366 in 1996 and 1995.
Deferred income taxes reflect the net tax effect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for income tax purposes. For financial reporting purposes,
the Company increased their valuation allowance by $541,505 and
$321,667 in 1996 and 1995, respectively, due to the uncertainty
of realizing the deferred tax assets in future years. The
Company has recorded a valuation allowance, amounting to the
entire net deferred tax asset, due to the historical losses
incurred by the Company.
Significant components of the Company's deferred tax
liabilities and assets as of December 31, 1996 and 1995 are as
follows:
1996 1995
Deferred tax liabilities:
Tax over book depreciation $ 154,626 $ 212,075
Deferred tax assets:
Net operating loss carryforward $1,817,757 $1,349,368
Accounts receivable reserve 11,259 10,586
Other 22,643 7,649
Total deferred tax assets 1,851,659 1,367,603
Valuation allowance for
deferred assets (1,697,033) (1,155,528)
Deferred tax assets $ 154,626 $ 212,075
Net deferred taxes $ 0 $ 0
9. EMPLOYEE BENEFIT PLAN
During 1992 the Board of Directors approved an employee
retirement plan which covers substantially all employees. The
Plan is funded by voluntary employee contributions which are
matched by the Company at a designated percentage, and
additional contributions by the Company at the discretion of the
Board of Directors. There were matching contributions to the
plan of $12,083, $10,108 and $7,310 in 1996, 1995 and 1994,
respectively, by the Company. In addition, discretionary
compensation expense recognized by the Company at December 31,
1996 was approximately $18,000.
10. COMMITMENT AND CONTINGENCIES
The Company is subject to various federal, state and local
regulations relating to environmental matters, including laws
which require the investigation and, in some cases, remediation
of environmental contamination. The Company's policy is to
accrue and charge to operations environmental investigation and
remediation expenses when it is probable that a liability has
been incurred and an amount is reasonably estimable.
In connection with the ownership of the Massena Port Facility,
the Company has been negotiating over an extended period of
time, the details of a proposed consent order issued by the
State of New York Department of Environmental Conservation. In
March of 1997, the Company signed the consent order which
requires the payment of a $5,000 penalty and to provide
remediation of any contamination at the site. Due to the time
of year, the Company is unable to determine the extent of any
contamination. The Company is planning to perform tests of the
site in the spring, at which time it will be in a better
position to determine the extent of any contamination.
EXHIBIT 10 COLLECTIVE BARGAINING AGREEMENTS AND EMPLOYMENT CONTRACTS
AGREEMENT EFFECTIVE JULY 1, 1997 BETWEEN
ST. LAWRENCE INDUSTRIAL SERVICES, INC.
(HEREIN REFERRED TO AS "EMPLOYER/COMPANY")
AND LABORERS' INTERNATIONAL UNION OF NORTH
AMERICA - LOCAL #322 (HEREIN REFERRED TO AS
"UNION") UNDER WHICH IT IS AGREED AS FOLLOWS:
ARTICLE I - DEFINITION
THIS AGREEMENT IS TO COVER ALL CHEMICAL WASTE
CLEANUP WORK AND OIL SPILL CLEANUP WORK DEFINED
AS INCLUDING BUT NOT LIMITED TO THE CLEANUP OF
HAZARDOUS WASTE IN INDUSTRIAL PLANTS, COMMERCIAL
BUILDINGS, RIVERS, LAKES, POOLS, PONDS, TANKS,
EARTH, STACKS, LAGOONS, AND INDUSTRIAL CLEANING.
THIS AGREEMENT COVERS ALL CLEANUP WORK ON
INDUSTRIAL BUILDINGS WITHIN STANDARDS SET UP BY
THE U.S. ENVIRONMENTAL PROTECTION AGENCY "LEVELS
OF PROTECTED" C AND D.
ARTICLE II - SCOPE AND WORK JURISDICTION
SECTION 1 THE SCOPE OF THE WORK OF THE LABORER/
TEAMSTER ON TOXIC OR HAZARDOUS WASTE REMOVAL
LABORER/TEAMSTER COVERS ALL TASKS RELATED TO TOXIC
OR HAZARDOUS WASTE REMOVAL. THIS INCLUDES, BUT IS
NOT LIMITED TO, THE HANDLING, CONTROL, REMOVAL,
ABATEMENT, ENCAPSULATION OR DISPOSAL OF TOXIC OR
HAZARDOUS WASTE OR MATERIALS. IN PERFORMING
THIS WORK, LABORERS/TEAMSTERS SHALL BE ASSIGNED
THE ERECTION, MOVING, SERVICING, AND DISMANTLING
OF ALL SCAFFOLDS AND BARRICADES; THE CONSTRUCTION,
ERECTION, REMOVAL AND DISMANTLING OF ALL ENCLOSURES,
CHAMBERS, OR DECONTAMINATION UNITS REQUIRED
FOR THE REMOVAL OR CONTAINMENT OF HAZARDOUS WASTE
ON THE JOB OR PROJECT SITE; THE OPERATION
OF ALL TOOLS AND EQUIPMENT, INCLUDING, BUT NOT
LIMITED TO GENERATORS, COMPRESSORS, AND VACUUMS
USED IN THE REMOVAL OF TOXIC OR HAZARDOUS WASTE
OR MATERIALS; THE LABELING, BAGGING, CARTONING,
OR OTHERWISE PACKAGING OF MATERIALS FOR DISPOSAL;
THE DISPOSAL OF ALL SUCH MATERIALS TO ANY AUTHORIZED
DISPOSAL SITE; THE CLEANUP OF THE WORK OR PROJECT
SITE AND ALL OTHER WORK INCIDENTAL TO THE REMOVAL
AND/OR ENCAPSULATION OF TOXIC OR HAZARDOUS WASTE
OR MATERIALS. ALL OF THE DESCRIBED WORK SHALL BE
PERFORMED BY THE LABORER/TEAMSTER IN CONFORMANCE
WITH ALL APPLICABLE FEDERAL, STATE, AND MUNICIPAL
STATUTES, REGULATIONS, ORDINANCES, STANDARDS AND
SAFETY REQUIREMENTS.
ARTICLE III - UNION JURISDICTION
THIS AGREEMENT IS TO COVER ALL LABORERS, TEAMSTERS,
FOREMAN, AND EQUIPMENT OPERATORS AS WORK DEFINED
AS CHEMICAL OR HAZARDOUS WASTE CLEANUP AND OIL
SPILL CLEANUP AND INDUSTRIAL CLEANUP.
ARTICLE IV - HOURS OF WORK AND OVERTIME
1 - EIGHT (8) HOURS SHALL CONSTITUTE A REGULAR WORKDAY
AND FIVE (5) SUCH EIGHT (8) HOUR DAYS MONDAY
THROUGH FRIDAY SHALL CONSTITUTE A REGULAR WORKWEEK.
2 - TIME AND ONE HALF (1 1/2) SHALL BE PAID
FOR ALL HOURS WORKED IN EXCESS OF FORTY (40) HOURS
IN ONE (1) WEEK.
3 - TIME AND ONE HALF (1 1/2) SHALL BE PAID FOR
ALL WORK ON SATURDAYS.
4 - DOUBLE TIME WILL BE PAID FOR ALL WORK PERFORMED
ON SUNDAY AND HOLIDAYS.
5 - IN THE EVENT AN EMPLOYEE REPORTS FOR WORK IN
ACCORDANCE TO THE SCHEDULED TIME OR REQUIREMENTS,
WITHOUT RECEIVING NOTICE PRIOR TO HIS SCHEDULED
STARTING TIME, AND FINDS THERE IS NO WORK AVAILABLE
HE SHALL RECEIVE TWO (2) HOURS SHOW UP TIME.
6 - IF THE EMPLOYEE STARTS WORK HE SHALL BE GUARANTEED
FOUR (4) HOURS. IF HE WORKS BEYOND FOUR (4) HOURS
HE SHALL BE PAID FOR ACTUAL TIME WORKED.
7 - TWO (2) SHIFTS MAY BE WORKED IN TWENTY-FOUR (24)
HOURS AND SHALL BE OF EQUAL DURATION AND AT THE SAME
RATE.
8 - THREE (3) SHIFTS MAY BE WORKED IN TWENTY-FOUR
(24) HOURS AND SHALL BE AT THE RATE AND DURATION
AS SET FORTH BELOW:
1ST SHIFT 8 HOURS WORK 8 HOURS PAY
2ND SHIFT 7 /12 HOURS WORK 8 HOURS PAY
3RD SHIFT 7 HOURS WORK 8 HOURS PAY
EACH SHIFT SHALL HAVE ONE HALF (1/2) HOUR FOR
LUNCH. WHEN THREE (3) SHIFTS ARE WORKED, THE SECOND
SHIFT AND THIRD SHIFT SHALL BE CONSIDERED FOR PAYROLL
PURPOSES AS HAVING WORKED IN THEIR ENTIRETY ON THE
SAME DAY WHICH THE FIRST SHIFT STARTED.
9 -A) PAID HOLIDAYS TO BE OBSERVED ARE MEMORIAL DAY,
INDEPENDENCE DAY, LABOR DAY, THANKSGIVING DAY,
CHRISTMAS DAY, AND NEW YEARS DAY IRRESPECTIVE OF
THE DAY OF THE WEEK ON WHICH THE HOLIDAY MAY FALL.
B) ANY EMPLOYEE LAID OFF SEVEN (7) DAYS PRIOR TO A
HOLIDAY SHALL RECEIVE HOLIDAY PAY, EXCEPT THAT IF A NEW
EMPLOYEE IS EMPLOYED BY AN EMPLOYER FOR NOT MORE THAN
TWO (2) DAYS DURING THIS PERIOD HE SHALL NOT BE
ENTITLED TO HOLIDAY PAY.
C) A PERSON MUST WORK THE WORKING DAY BEFORE AND THE
WORKING DAY AFTER A HOLIDAY TO RECEIVE HOLIDAY PAY.
HOWEVER, AN EMPLOYEE NOT ABLE TO REPORT BECAUSE OF
PROVEN SICKNESS, DEATH IN THE IMMEDIATE FAMILY, OR
ACCIDENT SHALL BE ENTITLED TO HOLIDAY PAY.
D) ANY EMPLOYEE ORDERED OUT AND REPORTS FOR WORK ON A
HOLIDAY SHALL BE PAID A MINIMUM OF EIGHT (8) HOURS PAY
AT DOUBLE TIME PLUS THE HOLIDAY PAY.
JULY 1, 1997 WAGE RATE WELFARE PENSION TRNG. DUES DED.
LABORER $12.00 $2.60 $1.80 $.20 - $.40
EQUIPMENT OPERATOR 12.90 2.60 1.80 .20 - .40
FOREMAN 13.90 2.60 1.80 .20 - .40
OIL SPILL ORIENTED WORK 10.00 2.60 1.80 .20 - .40
DUES PER HOUR DEDUCTION UPON RECEIPT OF SIGNED
AUTHORIZATION CARD FROM EMPLOYEE.
1. WHEN AN EMPLOYEE DOES NOT FUNCTION AT THEIR
NORMAL DUTIES, HE WILL WORK ANY OTHER CAPACITY
ASSIGNED BY THE COMPANY.
2. ALL EMPLOYEES WORKING IN A HIGHER CLASS OF PAY
FOR ANY PART OF THE WORK DAY SHALL RECEIVE THE
HIGHER RATE FOR ALL HOURS WORKED ON THAT DAY.
3. IN THE EVENT A NEW JOB CLASSIFICATION IS CREATED
THE COMPANY SHALL NEGOTIATE WITH THE UNION
FOR PERMANENT RATE.
ARTICLE VI - VACATIONS
1. AFTER TWO (2) YEARS OR MORE THE EMPLOYEES
SHALL RECEIVE ONE (1) WEEK VACATION WITH
PAY AT STRAIGHT TIME RATES AT THE REGULAR
FORTY (40) HOUR RATE.
ARTICLE VII - OUT OF TOWN WORK
1. WHEN EMPLOYEES ARE REQUIRED TO GO OUT-OF-TOWN,
OVERNIGHT OR LONGER, THE EMPLOYER WILL PAY ALL
LODGING AND FOOD EXPENSES. HOWEVER, THE FOOD
EXPENSE SHALL NOT EXCEED $25.00 PER DAY. THE
EMPLOYEES WILL BE REQUIRED TO PRODUCE BONAFIDE
RECEIPTS.
ARTICLE VIII - PHYSICAL EXAMINATION
1. IF ANY EMPLOYEE IS REQUIRED TO HAVE A PHYSICAL
BEFORE AND AFTER PERFORMING WORK AT A PARTICULAR
JOB SITE THE COST OF SAID PHYSICAL SHALL ALSO
BE THE RESPONSIBILITY OF THE EMPLOYER.
ARTICLE IX - UNION RIGHTS
1. THE UNION BUSINESS MANAGER SHALL APPOINT A WORKING
SHOP STEWARD ON EACH SHIFT. THE STEWARD WILL BE EMPLOYED
AT ALL TIMES ANY WORK IS PERFORMED OR ANY LABORERS ARE
NOTIFIED BY THE EMPLOYER OR EMPLOYER'S AGENT TO
REPORT FOR WORK. THE STEWARD SHALL NOT BE LAID OFF OR
FIRED FOR PERFORMING HIS DUTIES AS STEWARD WITHOUT
PRIOR APPROVAL OF BUSINESS MANAGER.
2. IT SHALL BE CONDITION OF EMPLOYMENT THAT ALL
EMPLOYEES OF THE EMPLOYER COVERED BY THIS AGREEMENT
WHO ARE MEMBERS OF THE UNION IN GOOD STANDING ON THE
EFFECTIVE DATE OF THIS AGREEMENT SHALL REMAIN MEMBERS IN
GOOD STANDING AND THOSE WHO ARE NOT MEMBERS
ON THE EFFECTIVE DATE OF THIS AGREEMENT SHALL
ON OR AFTER THE EIGHTH (8TH) DAY, FOLLOWING THE
BEGINNING OF SUCH EMPLOYMENT BECOME AND REMAIN
MEMBERS IN GOOD STANDING IN THE UNION.
3. AUTHORIZED REPRESENTATIVES OF THE UNION
SHALL BE ALLOWED TO VISIT JOBS DURING WORKING
HOURS TO INTERVIEW THE EMPLOYER AND THE EMPLOYEES.
4. EMPLOYEES INJURED AT WORK OR DEVELOP SKIN RASH,
EYE BURNS, OR LUNG DISCOMFORT BECAUSE OF HANDLING
HAZARDOUS WASTE SHALL BE PAID FOR THE TIME SPENT
GOING TO THE DOCTOR'S OFFICE FOR TREATMENT AT THE
TIME OF INJURY OR DISCOMFORT. IF THE DOCTOR
CERTIFIES, IN WRITING, THAT THE EMPLOYEE IS
UNABLE TO RETURN TO WORK THAT DAY HE SHALL BE
PAID FOR THE BALANCE OF THE WORK DAY.
ARTICLE X - WORK CONDITIONS
1. THE EMPLOYER SHALL FURNISH ALL NECESSARY
TOOLS THAT THE EMPLOYEES ARE TO USE.
2. THE EMPLOYER SHALL FURNISH ALL RAINSUITS
AND HATS AND SLIPOVER BOOTS WHERE CONDITIONS
REQUIRE THEM WHICH SHALL REMAIN THE PROPERTY
OF THE EMPLOYER AND BE RETURNED AT THE
TERMINATION OF EMPLOYMENT.
3. THE EMPLOYER SHALL SUPPLY SPECIAL GLOVES
FOR PERFORMANCE OF WORK NECESSITATING
THEIR USE.
4. THE EMPLOYER SHALL PROVIDE AND THE LABORERS
SHALL MAINTAIN CLEAN SANITARY TOILET AND DRINKING
FACILITIES.
5. THE COMPANY SHALL PROVIDE ANNUAL PHYSICAL
EXAMINATIONS PAID FOR BY THE COMPANY.
ARTICLE XI - SAFETY
1. A) NO EMPLOYEE SHALL BE REQUIRED OR ASSIGNED TO
ENGAGE IN ANY ACTIVITY INVOLVING DANGEROUS CONDITIONS
OF WORK OR WITH A SUBSTANCE THAT HAS BEEN DEEMED
DANGEROUS TO A PERSONS HEALTH BY THE
OCCUPATIONAL SAFETY AND HEALTH ACT (OSHA)
OR OTHER GOVERNMENTAL HEALTH REGULATIONS OR
LEGISLATION UNLESS PROPER SAFETY EQUIPMENT IS
PROVIDED BY THE EMPLOYER.
B) THE UNION AGREES TO COOPERATE WITH THE
COMPANY IN ENCOURAGING EMPLOYEES TO
OBSERVE SAFETY REGULATIONS PRESCRIBED
BY THE COMPANY AND TO WEAR PROPERLY
FURNISHED SAFETY EQUIPMENT AS REQUIRED
BY THE COMPANY AND TO WORK IN A SAFE
MANNER.
ARTICLE XII - PENSION, WELFARE FUNDS
1. A) THE EMPLOYER HEREBY AGREES TO CONTRIBUTE
THE AMOUNTS HEREIN PROVIDED FOR IN ARTICLE IV
OF THIS AGREEMENT TO LABORERS' LOCAL #322 WELFARE
AND PENSION FUNDS (HEREINAFTER REFERRED TO AS
"FUND" FOR EACH HOUR PAID TO THE EMPLOYEE COVERED
BY THIS AGREEMENT.
B) THE EMPLOYER PARTY TO THIS AGREEMENT ACCEPT
THE TRUSTEES NOW SERVING ON SUCH FUND AND
HEREBY WAIVE THE RIGHT TO NAME NEW, OTHER
SUCCESSOR OR ADDITIONAL TRUSTEES.
2. A) IN THE EVENT THE EMPLOYER DOES NOT MAKE
CONTRIBUTIONS TO THE FUND AS PROVIDED HEREIN,
THE EMPLOYER AGREES THAT HE WILL BE CHARGED
WITH ALL NECESSARY LITIGATION AND ACCOUNTING
EXPENSES INCURRED BY THE TRUSTEES OF THE
FUND IN COLLECTION THE MONIES DUE AND THAT A
MONEY JUDGEMENT MAY BE RENDERED AGAINST SUCH
EMPLOYER FOR SUCH LITIGATION AND ACCOUNTING
EXPENSES IN ADDITION TO A JUDGEMENT FOR UNPAID
CONTRIBUTIONS.
3 A) THE EMPLOYER SHALL FURNISH THE TRUSTEES
OF THE WELFARE AND/OR PENSION FUND WITH PERIODIC
REPORTS SHOWING NAMES, SOC. SEC. NUMBERS, HOURS
WORKED FOR EACH EMPLOYEE PERFORMING WORK COVERED
BY THIS AGREEMENT. PAYMENTS SHALL BE MADE MONTHLY
AND DUE ON OR BEFORE THE FIFTEENTH (15TH) CALENDAR
DAY OF THE MONTH FOLLOWING THE CALENDAR MONTH IN
WHICH THE WORK IS PERFORMED.
4 THE BOOKS AND RECORDS OF THE EMPLOYER PERTINENT
TO HIS EMPLOYEES SHALL BE MADE AVAILABLE AT ALL
REASONABLE TIMES FOR INSPECTION AND AUDIT BY THE
ACCOUNTANTS OF THE WELFARE FUND AND/OR PENSION FUND,
INCLUDING WITHOUT LIMITATION, ALL PAYROLL SHEETS,
W-2 FORMS, NYS EMPLOYMENT REPORTS, SOC. SEC. REPORTS,
INSURANCE COMPANY REPORTS, AND SUPPORTING CHECK
LEDGERS, VOUCHERS, AND ANY OTHER ITEMS CONCERNING
PAYROLLS. INSPECTION SHALL BE RESTRICTED TO A
VERIFICATION OF PAYMENT MADE AND/OR DUE TO THE FUNDS.
ARTICLE XIII - DUES DEDUCTION
1. THE EMPLOYER SHALL DEDUCT FROM THE BASIC RATE
OF EMPLOYEES AS SET FORTH IN ARTICLE IV THE
AMOUNT OF ($.40) FORTY CENTS PER HOUR STRAIGHT TIME
HOURS AND/OR ($.60) SIXTY CENTS PER HOUR FOR
OVERTIME HOURS AS A BASIS FOR DUES DEDUCTION.
2. NO DEDUCTION SHALL BE MADE FOR DUES FOR ANY
SUCH EMPLOYEE UNLESS THE EMPLOYEE HAS DEPOSITED
WITH EMPLOYER A COPY OF AN EXECUTED DUES DEDUCTION
AUTHORIZATION FORM WHICH SHALL IN NO EVENT BY
IRREVOCABLE FOR A PERIOD OF MORE THAN ONE (1)
YEAR OR THE TERMINATION DATE OF THIS AGREEMENT,
WHICHEVER BE THE LESS.
3. THE EMPLOYER ASSUMES NO OBLIGATION WITH RESPECT TO
OBTAINING THE DUES DEDUCTION AUTHORIZATION CARDS
SIGNED BY HIS EMPLOYEES, IT BEING UNDERSTOOD THAT THIS
IS THE DUTY AND OBLIGATION OF THE UNION.
4. THE UNION SHALL INDEMNIFY AND SAVE HARMLESS THE
EMPLOYER AGAINST ANY AND ALL CLAIMS, DEMANDS, SUITS,
OR OTHER FORMS OF LIABILITY THAT SHALL ARISE OUT OF
OR BY REASON OF ACTION TAKEN OR NOT TAKEN BY THE
EMPLOYER IN RELIANCE UPON DUES DEDUCTION CARDS
FURNISHED BY THEIR EMPLOYEES AND/OR THE UNION.
ARTICLE XIV - SUBCONTRACTING
THE COMPANY SHALL NOT CONTRACT WORK OUT IF THE USE OF
AN OUTSIDE CONTRACTOR WOULD RESULT IN A LAYOFF OF EMPLOYEES
COVERED BY THIS AGREEMENT OR IF USE OF SUCH OUTSIDE
CONTRACTOR WOULD RESULT IN A REDUCTION OF WORK OR EARNINGS,
OPPORTUNITY, INCLUDING OVERTIME, FOR BARGAINING UNIT
EMPLOYEES.
IN THE EVENT OF ANY DISPUTE UNDER THIS PROVISION,
THE PARTIES MAY BY MUTUAL AGREEMENT WAIVE THE STEPS
OF THE GRIEVANCE PROCEDURE AND SUBMIT THE MATTER
DIRECTLY TO ARBITRATION.
ARTICLE XI - NON DISCRIMINATION
THE EMPLOYER AND THE UNION AGREE NOT TO DISCRIMINATE
AGAINST ANY INDIVIDUAL WITH RESPECT TO HIS HIRING,
COMPENSATION, TERMS OR CONDITION OF EMPLOYMENT
BECAUSE OF SUCH INDIVIDUAL'S RACE, COLOR, RELIGION,
SEX OR NATIONAL ORIGIN, NOR WILL THEY LIMIT,
SEGREGATE, OR CLASSIFY EMPLOYEES IN ANY WAY TO DEPRIVE
ANY INDIVIDUAL EMPLOYEE OF EMPLOYMENT OPPORTUNITIES
BECAUSE OF HIS RACE, COLOR, RELIGION, SEX OR NATIONAL
ORIGIN.
ARTICLE XVI - GRIEVANCE & ARBITRATION PROCEDURES
1. THIS COLLECTIVE BARGAINING AGREEMENT CONTAINS A
MANDATORY GRIEVANCE ADJUSTMENT AND ARBITRATION
PROCEDURE FOR RESOLVING QUESTIONS NOT EXPRESSLY EXCEPTED.
DURING THE TERM OF THIS AGREEMENT, EXCEPT AS OTHERWISE
HEREINAFTER PROVIDED, ANY QUESTIONS, CONTROVERSY,
DISPUTE, INTERPRETATION, MISUNDERSTANDING,
OR CLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE BREACH THEREOF, SHALL BE SETTLED BY
ARBITRATION IN ACCORDANCE WITH THE VOLUNTARY LABOR
ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION UNDER THE LAWS OF THE STATE OF NEW YORK,
AND THE AWARD RENDERED IN SUCH ARBITRATION SHALL BE
FINAL AND BINDING ON THE PARTIES HERETO SUBJECT TO THE
CIVIL PRACTICES LAW AND RULES.
2. DURING THE TERM OF THIS AGREEMENT THE UNION
SHALL NOT AUTHORIZE, ORDER, OR PERMIT ANY
STRIKE, SLOWDOWN, OR OTHER WORK STOPPAGE, NOR SHALL
IT PERMIT, AID, OR SUPPORT UNAUTHORIZED STRIKES,
SLOWDOWNS, OR WORK STOPPAGE BY ITS MEMBERS. THE
PARTIES HERETO EXPRESSLY AGREE THAT STRIKES,
SLOWDOWNS, OR OTHER WORK STOPPAGE CAUSE
IRREPARABLE INJURY TO THE EMPLOYERS.
3. NO EMPLOYEE SHALL HAVE THE RIGHT TO INSTITUTE ANY
ACTION, GRIEVANCE, ARBITRATION, OR SPECIAL PROCEEDING
UNDER THIS AGREEMENT, BUT ALL SUCH SHALL ONLY
BE INSTITUTED BY THE UNION, EMPLOYER, OR THE ASSOCIATION.
4. THE FOLLOWING TERMS AND CONDITIONS OF THIS AGREEMENT
OR ISSUES INVOLVING SUCH ARE EXPRESSLY EXCLUDED FROM
ARBITRATION AND ARE TO BE DETERMINED BY ARBITRATION:
THE SETTING OF RATES OF PAY OR HOURS OF WORK, AND
CLAIMS OF WORK JURISDICTION OR MATTERS RELATED
THERETO.
ARTICLE XVII - EFFECTIVE DATE
TERMINATION AND AMENDMENTS
1. THIS AGREEMENT SHALL TAKE EFFECT JULY 1, 1997,
AND SHALL REMAIN IN EFFECT UNTIL MIDNIGHT JUNE 30, 1998.
2. EITHER PARTY DESIRING TO CHANGE THIS AGREEMENT
MUST NOTIFY THE OTHER, IN WRITING, NO LATER
THAN MAY 1ST OF ANY TERMINATION YEAR. THIS
AGREEMENT SHALL BE SUBJECT TO AMENDMENT AT ANY TIME
BY MUTUAL CONSENT OF THE PARTIES HERETO AND SHALL BE
SIGNED BY THE PARTIES HERETO.
FOR: LABORERS' LOCAL #322
SAM AGATI, BUSINESS MANAGER
FOR: ST. LAWRENCE INDUSTRIAL SERVICES, INC.
CHRISTOPHER J. POLIMINO
ASSISTANT TREASURER
ARTICLES OF AGREEMENT
BY AND BETWEEN
TEAMSTERS LOCAL 687
14 ELM STREET
POTSDAM, N.Y. 13676
AND
ST.LAWRENCE INDUSTRIAL SERVICES, INC.
P.O. BOX 5182
MASSENA, NEW YORK 13662
EFFECTIVE: 7/1/97 EXPIRATION: 6/30/98
INDEX
ARTICLE SUBJECT PAGE
1 DEFINITION
2 UNION JURISDICTION
3 UNION SHOP-HIRING OF NEW EMPLOYEES
4 SCOPE AND WORK JURISDICTION
5 CREDIT UNION & CHECK-OFF
6 UNION STEWARD
7 UNION VISITS
8 SENIORITY
9 DISCIPLINARY ACTION
10 GRIEVANCE PROCEDURE
11 SAVINGS CLAUSE
12 MAINTENANCE OF STANDARDS
13 TRANSFER OF COMPANY TITLE OR INTEREST
14 AGREEMENT CONFLICTION
15 NON-DISCIMINATION
16 SUBCONTRACTING
17 SAFETY
18 PHYSICAL EXAMINATION
19 VACATIONS
20 OUT-OF-TOWN WORK
21 HEALTH & HOSPITAL
22 PENSION AND RETIREMENT
23 HOLIDAYS
24 HOURS OF WORK AND OVERTIME
25 WAGES
26 DURATION
MEMORANDUM OF AGREEMENT
ST. LAWRENCE INDUSTRIAL SERVICES, INC.
SEPTEMBER 15, 1997 PAGE 1
THIS AGREEMENT EFFECTIVE JULY 1, 1997 BETWEEN
ST. LAWRENCE INDUSTRIAL SERVICES, INC.
(HEREINAFTER REFERRED TO AS "EMPLOYER/COMPANY")
AND TEAMSTERS LOCAL 687 (HEREINAFTER REFERRED
TO AS "UNION") UNDER WHICH IT IS AGREED AS
FOLLOWS:
ARTICLE 1: DEFINITION
THIS AGREEMENT IS TO COVER ALL CHEMICAL WASTE
CLEANUP WORK AND OIL SPILL CLEANUP WORK DEFINED
AS INCLUDING BUT NOT LIMITED TO THE HAZARDOUS
WASTE IN INDUSTRIAL PLANTS, COMMERCIAL BUILDINGS,
RIVERS, LAKES, POOLS, PONDS, TANKS, EARTH, STACKS,
LAGOONS AND INDUSTRIAL CLEANING. THIS AGREEMENT
COVERS ALL CLEANUP WORK ON INDUSTRIAL BUILDINGS
WITHIN THE STANDARDS SET UP BY THE U.S.
ENVIRONMENTAL PROTECTION AGENCY "LEVELS OF
PROTECTION" C AND D.
ARTICLE 2: UNION JURISDICTION
THIS AGREEMENT IS TO COVER ALL TEAMSTERS,
LABORERS, FOREMAN AND EQUIPMENT OPERATORS
ON WORK DEFINED AS CHEMICAL OR HAZARDOUS
WASTE CLEANUP AND INDUSTRIAL CLEANUP.
ARTICLE 3: UNION SHOP-HIRING OF NEW EMPLOYEES
3.1: IT SHALL BE A CONDITION OF EMPLOYMENT
THAT ALL EMPLOYEES OF THE EMPLOYER COVERED BY
THIS AGREEMENT WHO ARE MEMBERS OF THE UNION IN
GOOD STANDING ON THE EFFECTIVE DATE OF THIS
AGREEMENT SHALL REMAIN MEMBERS IN GOOD STANDING,
AND THOSE WHO ARE NOT MEMBERS ON THE EFFECTIVE
DATE OF THIS AGREEMENT SHALL, ON THE 8TH DAY
FOLLOWING THE EFFECTIVE DATE OF THIS AGREEMENT,
BECOME AND REMAIN MEMBERS IN GOOD STANDING OF
THE UNION.
IT SHALL ALSO BE A CONDITION OF EMPLOYMENT THAT
ALL EMPLOYEES COVERED BY THIS AGREEMENT AND HIRED
ON OR AFTER ITS EFFECTIVE DATE SHALL, ON AND AFTER
EIGHT (8) WORKING DAYS OF CONTINUOUS EMPLOYMENT
FOLLOWING THE BEGINNING OF SUCH EMPLOYMENT, BECOME
AND REMAIN MEMBERS IN GOOD STANDING IN THE UNION.
FOR THE PURPOSES OF THIS ARTICLE, AN EMPLOYEE SHALL
BE DEEMED IN GOOD STANDING IF HE HAS TENDERED THE
PERIODIC DUES AND INITIATION FEES UNIFORMLY REQUIRED
AS A CONDITION OF ACQUIRING AND RETAINING MEMBERSHIP
IN THE UNION.
3.2: ANY EMPLOYEE WHO FAILS TO OBTAIN MEMBERSHIP
IN ACCORDANCE WITH THE PRECEDING SECTION SHALL BE
SUBJECT TO DISCHARGE UPON DEMAND BY THE UNION TO
THE EMPLOYER; PROVIDED, HOWEVER, THAT NOTHING IN
THIS AGREEMENT SHALL BE CONSTRUED SO AS TO PLACE
ANY OBLIGATION ON THE EMPLOYER TO DISCRIMINATE
AGAINST ANY EMPLOYEE FOR NON-MEMBERSHIP IN THE
UNION, IF THE EMPLOYER HAS REASONABLE GROUNDS FOR
BELIEVING THAT SUCH MEMBERSHIP WAS NOT AVAILABLE
TO THE EMPLOYEE ON THE SAME TERMS AND CONDITIONS
GENERALLY APPLICABLE TO OTHER EMPLOYEES AT THAT
TIME. IF A DISCHARGE REQUIRED BY THE PROVISIONS OF
THIS SECTION WOULD RESULT IN A HARDSHIP UPON THE
EMPLOYER, THE EMPLOYER SHALL BE PERMITTED TIME,
NOT TO EXCEED FIVE (5) DAYS, TO REPLACE THE
EMPLOYEE TO BE DISCHARGED BEFORE SUCH DISCHARGE
BECOME EFFECTIVE.
3.3: A NEW EMPLOYEE MAY BE SUMMARILY DISMISSED
WITHOUT RECOURSE WITHIN EIGHT (8) WORKING DAYS
FROM THE DATE OF HIS/HER EMPLOYMENT AT THE SOLE
DISCRETION OF THE EMPLOYER. IN EACH CASE OF SUCH
DISMISSAL, THE EMPLOYER AGREES TO NOTIFY THE SHOP
STEWARD, IN WRITING, SETTING FORTH THE REASON,
WITH A COPY TO THE UNION.
3.4: THE EMPLOYER AGREES TO CONSIDER THE UNION'S
OUT-OF-WORK LIST WHEN THERE ARE ANY VACANCIES,
BUT SHALL BE FREE TO HIRE ANY APPLICANT, UNION OR
NON-UNION.
ARTICLE 4: SCOPE AND WORK JURISDICTION
THE SCOPE OF THE WORK OF THE TEAMSTER/LABORER
OR TOXIC OR HAZARDOUS WASTE REMOVAL TEAMSTER/
LABORER COVERS ALL TASKS RELATED TO TOXIC OR
HAZARDOUS WASTE REMOVAL. THIS INCLUDES, BUT IS
NOT LIMITED TO, THE HANDLING, CONTROL, REMOVAL,
ABATEMENT, ENCAPSULATION OR DISPOSAL OF TOXIC OR
HAZARDOUS WASTE OR MATERIALS. IN PERFORMING THIS
WORK, TEAMSTER/LABORER SHALL BE ASSIGNED THE
ERECTION, MOVING, SERVICING, AND DISMANTLING
OF ALL SCAFFOLDS AND BARRICADES; THE CONSTRUCTION,
ERECTION, REMOVAL AND DISMANTLING OF ALL ENCLOSURES,
CHAMBERS, OR DECONTAMINATION UNITS REQUIRED FOR THE
REMOVAL OR CONTAINMENT OF HAZARDOUS WASTE ON
THE JOB OR PROJECT SITE; THE OPERATION OF ALL
TOOLS AND EQUIPMENT, INCLUDING, BUT NOT LIMITED
TO GENERATORS, COMPRESSORS, AND VACUUMS USED IN
THE REMOVAL OF TOXIC OR HAZARDOUS WASTE OR
MATERIALS; THE LABELING, BAGGING, CARTONING, OR
OTHERWISE PACKAGING OF MATERIALS FOR DISPOSAL;
THE DISPOSAL OF ALL SUCH MATERIALS TO ANY
AUTHORIZED DISPOSAL SITE; THE CLEAN-UP OF THE
WORK OR PROJECT SITE AND ALL OTHER WORK INCIDENTAL
TO THE REMOVAL AND/OR ENCAPSULATION OF TOXIC OR
HAZARDOUS WASTE OR MATERIALS. ALL OF THE DESCRIBED
WORK SHALL BE PERFORMED BY THE TEAMSTER/LABORER
IN CONFORMANCE WITH ALL APPLICABLE FEDERAL, STATE
AND MUNICIPAL STATUTES, REGULATIONS, ORDINANCES,
STANDARDS AND SAFETY REQUIREMENTS.
ARTICLE 5: CREDIT UNION & CHECK-OFF
5.1 THE COMPANY AGREES TO DEDUCT WEEKLY FROM THE PAY
OF EACH EMPLOYEE WHO SO DESIGNATES, AN AMOUNT TO BE
REMITTED TO THE CREDIT UNION WITH THE FOLLOWING
CONDITIONS:
A. THE COMPANY WILL NOT DEDUCT LESS OFTEN THAN ONCE
PER WEEK,
B. THE COMPANY'S OBLIGATION UNDER THIS AGREEMENT
SHALL BE LIMITED TO PAYROLL DEDUCTION AND REMITTANCE
TO THE CREDIT UNION, MONTHLY,
C. CHANGES, OTHER THAN TERMINATIONS, SHALL NOT BE
PERMITTED OTHER THAN ONCE PER YEAR AT A TIME AGREED
UPON BY THE UNION AND THE COMPANY.
5.2: THE EMPLOYER AGREES TO DEDUCT MONTHLY FROM THE
EARNINGS OF EACH EMPLOYEES WHO IS A MEMBER OF THE
UNION AN AMOUNT EQUAL TO THE MEMBERSHIP DUES AND
INITIATION FEES OF THE UNION, AND TO SEND A CHECK
FOR ALL SUCH MONEY DEDUCTED TO THE UNION ON THE
10TH DAY OF THE MONTH FOLLOWING THAT MONTH WHICH
PROVIDED, HOWEVER, THAT NO SUCH DEDUCTION SHALL
BE MADE UNLESS AND UNTIL THE EMPLOYER IS FURNISHED
BY THE EMPLOYEE WITH INDIVIDUAL AUTHORIZATION,
IN WRITING, TO MAKE SUCH DEDUCTIONS; SUBJECT,
MOREOVER, TO ALL REQUIREMENTS OF THE LABOR
MANAGEMENT RELATIONS ACT OF 1947, AS AMENDED.
ARTICLE 6: UNION STEWARD
6.1: THE UNION MAY APPOINT ONE STEWARD AND ONE
ALTERNATE WHOSE DUTIES IN NO WAY CONFLICT WITH
THEIR DUTIES TO THE EMPLOYER. BEFORE DISCHARGING
THE STEWARD, THE EMPLOYER SHALL IN EVERY CASE
NOTIFY THE UNION. THERE SHALL BE A PROMPT
NOTIFICATION BY THE EMPLOYER TO THE STEWARD, OR TO
THE UNION, OF ALL INFRACTIONS OF COMPANY RULES
BY THE EMPLOYEES WITHIN FIVE (5) DAYS.
6.2: THE STEWARD SHALL HAVE NO AUTHORITY TO ALTER,
AMEND, VIOLATE OR OTHERWISE CHANGE ANY PART OF THIS
AGREEMENT AND HIS/HER AUTHORITY SHALL BE LIMITED
TO, AND SHALL NOT EXCEED, THE FOLLOWING DUTIES
AND ACTIVITIES:
A. THE INVESTIGATION AND PRESENTATION OF GRIEVANCES
IN ACCORDANCE WITH PROVISIONS OF THE COLLECTIVE
BARGAINING AGREEMENT.
B. THE TRANSMISSION OF SUCH MESSAGES AND INFORMATION
WHICH SHALL ORIGINATE WITH, AND ARE AUTHORIZED BY,
THE UNION OR ITS OFFICERS.
6.3:THE EMPLOYER RECOGNIZES THESE LIMITATIONS UPON
THE AUTHORITY OF THE STEWARD AND SHALL NOT HOLD THE
UNION LIABLE FOR UNAUTHORIZED ACTS OF THE STEWARD.
IN THE EVENT THE STEWARD ORDERS UNAUTHORIZED STRIKE
ACTIONS, SLOW DOWN OR WORK STOPPAGE, THEY SHALL BE
SUBJECT TO SUSPENSION, DISCHARGE OR OTHER DISCIPLINE
AT THE EMPLOYER'S DISCRETION.
6.4: THERE SHALL BE A UNION STEWARD ON EACH SHIFT.
THE STEWARD WILL BE EMPLOYED AT ALL TIMES ANY WORK IS
PERFORMED OR ANY TEAMSTERS ARE EMPLOYED ON THE PROJECT
AND WILL BE PAID FOR ALL TIME LOST DUE TO NOT HAVING
BEEN NOTIFIED BY THE EMPLOYER OR EMPLOYER'S AGENT
TO REPORT FOR WORK. THE STEWARD SHALL NOT BE LAID OFF
OR FIRED FOR PERFORMING HIS DUTIES AS STEWARD WITHOUT
PRIOR APPROVAL OF THE BUSINESS AGENT. THE STEWARD
WILL BE THE LAST ONE LAID OFF.
ARTICLE 7: UNION VISITS
AUTHORIZED REPRESENTATIVES OF THE UNION SHALL BE
ALLOWED TO VISIT JOBS DURING WORKING HOURS TO
INTERVIEW THE EMPLOYER AND THE EMPLOYEES.
ARTICLE 8: SENIORITY
THE PRINCIPLE OF SENIORITY SHALL PREVAIL AT ALL
TIMES. THE EMPLOYER IS TO FURNISH A SENIORITY
LIST ONCE A YEAR WITH COPIES TO THE UNION AND THE
STEWARD.
ARTICLE 9: DISCIPLINARY ACTION
9.1: THE EMPLOYER MAY SUSPEND, DISCHARGE OR
OTHERWISE DISCIPLINE ANY EMPLOYEE IN GOOD AND
SUFFICIENT CAUSE. IF THE UNION DISPUTES ANY
ACTION TAKEN BY THE EMPLOYER UNDER THIS ARTICLE,
IT SHALL HAVE THE RIGHT TO PRESENT A GRIEVANCE
PURSUANT TO THE PROVISIONS OF ARTICLE 10 OF THIS
AGREEMENT.
9.2: THE EMPLOYER MAY SUSPEND, DISCHARGE OR
OTHERWISE DISCIPLINE ANY EMPLOYEE FOR GOOD
CAUSE, EXCEPT THAT THE EMPLOYER SHALL HAVE
THE RIGHT OF SUMMARY DISCHARGE OR DISMISSAL
ON ANY ONE OF THE FOLLOWING GROUNDS:
A. DISHONESTY.
B. USE OF OR BEING UNDER THE INFLUENCE OF
INTOXICANTS OR HABIT FORMING DRUGS WHILE
ON DUTY.
C. VIOLATION OF LOCAL OR STATE HEALTH CODES
OR LAWS.
D. DIRECT REFUSAL TO OBEY ORDERS GIVEN BY
THE PROPER PARTY UNLESS SUCH ORDERS
JEOPARDIZE LIFE OR HEALTH.
E. DELIBERATE DESTRUCTION OF PROPERTY.
F. FAILURE TO REPORT PROMPTLY AND HONESTLY
ACCIDENTS OR PERSONAL INJURIES.
G. FAILURE TO ADHERE TO SAFETY PRECAUTIONS AS
OUTLINED BY THE EMPLOYER WILL BE GROUNDS FOR
DISMISSAL.
H. AN EMPLOYEE THAT DEMONSTRATES HABITUAL
UNSAFE HABITS MAY BE TERMINATED AFTER THREE
(3) WRITTEN WARNING LETTERS.
9.3: ALL WARNINGS, SUSPENSIONS OR DISCHARGES
SHALL BE IN WRITTEN FORM WITH COPIES TO EMPLOYEE,
UNION STEWARD AND THE UNION. WARNING LETTERS SHALL
BE VALID FOR ONE (1) YEAR. IN THE CASE OF SEASONAL
OR PART-TIME EMPLOYEES WARNING LETTERS SHALL BE
VALID FOR TWO (2) YEARS.
ARTICLE 10: GRIEVANCE PROCEDURE
10.1: AN EMPLOYEE'S GRIEVANCE RELATIVE TO THE
MEANING OR APPLICATION OF THIS AGREEMENT SHALL BE
PRESENTED TO THE PLANT MANAGER WITHIN FIVE (5)
WORKING DAYS FROM THE DATE THE CAUSE OF THE
GRIEVANCE OCCURS. IF THE GRIEVANCE IS NOT SETTLED
WITHIN FIVE (5) WORKING DAYS AFTER SUCH PRESENTATION
IT SHALL BE SUBMITTED TO THE UNION REPRESENTATIVE
AND THE EMPLOYER FOR SETTLEMENT. IF THE GRIEVANCE
IS NOT SETTLED WITHIN FIFTEEN (15) WORKING DAYS
AFTER SUBMISSION IN A CASE INVOLVING DISCHARGE OR
WITHIN THIRTY-FIVE (35) WORKING DAYS AFTER SUBMISSION
IN A CASE NOT INVOLVING DISCHARGE, EITHER PARTY
MAY REQUEST ARBITRATION, PROVIDED SUCH REQUEST IS
DELIVERED TO THE OTHER PARTY WITHIN THE NEXT TEN
(10) WORKING DAYS.
10.2: A GRIEVANCE OF THE UNION BASED UPON AN ALLEGED
VIOLATION OF ANY PROVISIONS OF THIS AGREEMENT BY
THE EMPLOYER JOINTLY WITH THE EMPLOYEES SHALL
BE PRESENTED BY THE UNION TO THE EMPLOYER WITHIN
FIFTEEN (15) WORKING DAYS AFTER THE FACTS CONSTITUTING
SUCH VIOLATION ARE KNOWN TO THE UNION. IF THE
GRIEVANCE CANNOT BE SETTLED BY THE EMPLOYER AND THE
UNION, IT SHALL BE SUBMITTED TO ARBITRATION AS HEREIN
PROVIDED AFTER THE UNION AND THE EMPLOYER FAIL TO AGREE.
10.3: THE ARBITRATOR SHALL BE SELECTED FROM A LIST OF
ARBITRATORS TO BE FURNISHED BY THE NEW YORK STATE
BOARD OF MEDIATION. IF NO ARBITRATOR ON SUCH LIST
IS MUTUALLY ACCEPTABLE TO THE PARTIES, THE ARBITRATOR
SHALL BE DESIGNATED BY THE DIRECTOR OF THE NEW YORK
STATE BOARD OF MEDIATION, OR BY HIS DULY AUTHORIZED
DESIGNEES. THE DECISION OF THE ARBITRATOR SO
SELECTED OR DESIGNATED SHALL BE FINAL AND BINDING
UPON THE PARTIES. THE FEES AND EXPENSES OF THE
ARBITRATOR SHALL BE BORNE EQUALLY BY THE PARTIES
HERETO. COMPLIANCE WITH THE REQUIREMENTS OF SECTION
2 (A) OF THE LABOR MANAGEMENT RELATIONS ACT OF 1947,
AS AMENDED, SHALL NOT BE DEEMED A BREACH OF THIS
ARTICLE.
10.4: THE ARBITRATOR SHALL HAVE NO POWER TO ADD OR
SUBTRACT FROM OR MODIFY ANY OF THE TERMS OF THIS
AGREEMENT.
10.5 ANY COMPLAINT OR CONTROVERSY BETWEEN THE EMPLOYER
AND THE UNION RELATING TO THE MEANING OR APPLICATION OF
THIS AGREEMENT THAT CANNOT BE SETTLED SHALL BE SUBMITTED
TO THE FOREGOING ARBITRATION PROCEDURE PROMPTLY
AFTER THE UNION AND THE EMPLOYER FAIL TO AGREE.
10.6: IT IS INTENDED THAT THE DECISION OF THE
ARBITRATOR SHALL BE ENFORCEABLE ACCORDING TO THE LAWS
OF THE STATE IN WHICH SAID DECISION IS TO BE PUT INTO
EFFECT AND THAT, ACCORDINGLY, THE PROCEDURE OF
ARBITRATION PRESCRIBED BY THIS AGREEMENT SHALL BE
MODIFIED WHEN AND TO THE EXTENT REQUIRED BY LAW TO
MAKE THE DECISION ENFORCEABLE IN SUCH STATE.
10.7 NO STRIKES, LOCKOUTS OR WALKOUTS SHALL BE
ORDERED, SANCTIONED OR ENFORCED BY EITHER PARTY
HERETO AGAINST THE OTHER DURING THE LIFE OF THIS
AGREEMENT, EXCEPT AS AGAINST THE PARTY FAILING
TO COMPLY WITH THE DECISION AND ORDER OF ANY
ARBITRATOR HANDING DOWN A DECISION OR MAKING
AN AWARD HEREUNDER.
ARTICLE 11: SAVINGS CLAUSE
IF ANY PROVISION OF THIS AGREEMENT VIOLATES AND
FEDERAL OR STATE LAW AS PRESENTLY ENACTED OR AS
AMENDED OR INTERPRETED DURING THE TERM HEREOF, SUCH
PROVISION SHALL BE INOPERATIVE TO THE EXTENT
THAT IT IS AT VARIANCE WITH SUCH LAW; BUT ALL
OTHER PROVISIONS OF THIS AGREEMENT SHALL REMAIN
IN FULL FORCE AND EFFECT. IF ANY PROVISION BECOMES
INOPERATIVE UNDER THIS ARTICLE BOTH PARTIES
SHALL MEET PROMPTLY TO REWRITE THE PROVISION TO
COMPLY WITH THE LAW AND, AS FAR AS POSSIBLE,
TO MEET THE ORIGINAL INTENTION OF THE PARTIES;
THE REVISED PROVISION SHALL THEREAFTER BY A
PART OF THIS AGREEMENT.
ARTICLE 12: MAINTENANCE OF STANDARDS
THIS AGREEMENT SHALL CONSTITUTE THE ENTIRE
UNDERSTANDING BETWEEN THE PARTIES HERETO.
ANY RIGHT WHICH IS NOT SPECIFICALLY GIVEN UP
IN THIS AGREEMENT REMAINS UNDER THE RESIDUAL
AUTHORITY OF MANAGEMENT. EXCEPT AS THE SAME
MAY BE SPECIFICALLY MODIFIED OR CHANGED BY THIS
AGREEMENT, ALL GENERAL BENEFITS AND PRIVILEGES
EXISTING AT THE DATE OF THIS AGREEMENT, AND
APPLICABLE TO ALL OF THE EMPLOYEES OF THE
EMPLOYER, SHALL NOT BE DISCONTINUED BY THE
EMPLOYER DURING THE TERM HEREOF.
ARTICLE 13: TRANSFER OF COMPANY TITLE OR INTEREST
THIS AGREEMENT SHALL BE BINDING UPON THE
PARTIES HERETO, THEIR SUCCESSORS, ADMINISTRATORS,
EXECUTORS AND ASSIGNS. IN THE EVENT THAT AN ENTIRE
OPERATION OR ANY PART THEREOF IS SOLD, TRANSFERRED
OR TAKEN OVER BY SALE, TRANSFER, RECEIVERSHIP
OR BANKRUPTCY PROCEEDINGS SUCH OPERATION OR
PART THEREOF SHALL CONTINUE TO BE SUBJECT
TO TERMS AND CONDITIONS OF THIS AGREEMENT.
THE EMPLOYER SHALL GIVE NOTICE OF THE EXISTENCE
OF THIS AGREEMENT TO ANY PURCHASER, TRANSFEREE,
RECEIVER OR TRUSTEE OF THE BUSINESS OR OPERATION.
SUCH NOTICE SHALL BE IN WRITING, WITH A COPY TO
THE UNION, NOT LATER THAN THE EFFECTIVE DATE OF
SALE, TRANSFER OR MERGER.
ARTICLE 14: AGREEMENT CONFLICTION
NO EMPLOYEE SHALL BE REQUIRED TO MAKE ANY VERBAL
OR WRITTEN AGREEMENT THAT WILL CONFLICT WITH THIS
AGREEMENT.
ARTICLE 15: NON-DISCRIMINATION
THE EMPLOYER AND THE UNION AGREE NOT TO
DISCRIMINATE AGAINST ANY INDIVIDUAL WITH RESPECT
TO HIS HIRING, COMPENSATION, TERMS OR CONDITIONS
OF EMPLOYMENT BECAUSE OF SUCH INDIVIDUAL'S RACE,
COLOR, RELIGION, SEX OR NATIONAL ORIGIN, NOR
WILL THEY LIMIT, SEGREGATE OR CLASSIFY EMPLOYEES
IN ANY WAY TO DEPRIVE ANY INDIVIDUAL EMPLOYEE OF
EMPLOYMENT OPPORTUNITIES BECAUSE OF HIS RACE,
COLOR, RELIGION, SEX, OR NATIONAL ORIGIN.
ARTICLE 16: SUBCONTRACTING
THE COMPANY SHALL NOT CONTRACT OUT WORK IF THE USE
OF AN OUTSIDE CONTRACTOR WOULD RESULT IN A LAYOFF
OF EMPLOYEES COVERED BY THIS AGREEMENT OF IF THE
USE OF SUCH OUTSIDE CONTRACTOR WOULD RESULT IN A
REDUCTION OF WORK OR EARNINGS OPPORTUNITY, INCLUDING
OVERTIME, FOR BARGAINING UNIT EMPLOYEES.
IN THE EVENT OF ANY DISPUTE UNDER THIS PROVISION,
THE PARTIES MAY BY MUTUAL AGREEMENT WAIVE THE STEPS
OF GRIEVANCE PROCEDURE AND SUBMIT THE MATTER
DIRECTLY TO ARBITRATION.
ARTICLE 17: SAFETY
17.1: NO EMPLOYEE SHALL BE REQUIRED OR ASSIGNED
TO ENGAGE IN ANY ACTIVITY INVOLVING DANGEROUS
CONDITIONS OR WORK OR WITH A SUBSTANCE THAT
HAS BEEN DEEMED DANGEROUS TO A PERSON'S HEALTH
BY THE OCCUPATIONAL SAFETY AND HEALTH ACT (OSHA)
OR OTHER GOVERNMENTAL HEALTH REGULATION OR
LEGISLATION UNLESS PROPER SAFETY EQUIPMENT IS
PROVIDED BY THE EMPLOYER.
17.2: THE UNION AGREES TO COOPERATE WITH THE
COMPANY IN ENCOURAGING EMPLOYEES TO OBSERVE
THE SAFETY REGULATIONS PRESCRIBED BY THE
COMPANY AND TO WEAR PROPERLY FURNISHED SAFETY
EQUIPMENT AS REQUIRED BY THE COMPANY AND TO WORK IN
A SAFE MANNER.
17.3: THE EMPLOYER SHALL FURNISH EMPLOYEES
WITH RAINSUITS, HATS, SLIPOVER BOOTS AND
GLOVES, IN ADDITION TO WHATEVER SAFETY EQUIPMENT
IS REQUIRED BY LAW.
17.4: EMPLOYEES INJURIES AT WORK OR DEVELOP SKIN
RASH, EYE BURNS, OR LUNG DISCOMFORT BECAUSE
OF HANDLING HAZARDOUS WASTE SHALL BE PAID FOR THE
TIME SPENT GOING TO THE DOCTOR'S OFFICE FOR TREATMENT
AT THE TIME OF INJURY OR DISCOMFORT. IF THE DOCTOR
CERTIFIED IN WRITING THAT THE EMPLOYEE IS UNABLE
TO RETURN TO WORK THAT DAY HE SHALL BE PAID FOR THE
BALANCE OF THE WORK DAY.
ARTICLE 18: PHYSICAL EXAMINATION
THE EMPLOYER SHALL PAY FOR AN ANNUAL PHYSICAL FOR
EACH FULL-TIME* EMPLOYEE. IF AN EMPLOYEE IS
REQUIRED TO HAVE A PHYSICAL BEFORE PERFORMING WORK
AT A PARTICULAR JOBSITE THE COST OF SAID PHYSICAL
SHALL ALSO BE RESPONSIBILITY OF THE EMPLOYER.
*FULL-TIME EMPLOYEE - EMPLOYED BY SLIS FOR THREE
(3) CONSECUTIVE MONTHS.
ARTICLE 19: VACATIONS
VACATION PAY SHALL BE GRANTED EMPLOYEES COVERED
BY THIS AGREEMENT ACCORDING TO THE FOLLOWING
SCHEDULE:
A) UP TO TWO (2) YEARS EMPLOYMENT - NO VACATION
B) TWO (2) YEARS OR MORE OF EMPLOYMENT FOR
THE EMPLOYER SHALL RESULT IN THE EMPLOYEE
RECEIVING TWO (2) WEEK'S VACATION WITH PAY
AT STRAIGHT TIME RATE AT THE REGULAR WEEKLY
FORTY (40) HOUR RATE.
ARTICLE 20: OUT-OF-TOWN WORK
WHEN EMPLOYEES ARE REQUIRED TO GO OUT OF TOWN
OVERNIGHT THE COMPANY WILL PAY ALL LODGINGS
AND UP TO FIFTEEN ($15) DOLLARS FOR FOOD
EXPENSE. THE EMPLOYEE WILL BE REQUIRED TO
TURN IN BONAFIDE RECEIPTS.
ARTICLE 21: HEALTH & HOSPITAL
EFFECTIVE JULY 1, 1997, THE EMPLOYER AGREES
TO CONTRIBUTE TO THE NEW YORK STATE TEAMSTERS
COUNCIL HEALTH AND HOSPITAL FUND, $30.00 PER DAY
NOT TO EXCEED THE SUM OF ONE-HUNDRED-TWENTY
DOLLARS ($120.00) PER WEEK FOR EACH EMPLOYEE
COVERED BY THIS AGREEMENT.
EFFECTIVE JANUARY 1, 1998, THE EMPLOYER AGREES TO
CONTRIBUTE TO THE NEW YORK STATE TEAMSTERS
COUNCIL HEALTH AND HOSPITAL FUND, #33,25 PER
DAY NOT TO EXCEED THE SUM OF ONE-HUNDRED-THIRTY THREE
DOLLARS ($133.00) PER WEEK FOR EACH EMPLOYEE COVERED
BY THIS AGREEMENT.
SUCH PAYMENTS TO BE MADE TO THE NEW YORK SATE
TEAMSTERS COUNCIL HEALTH & HOSPITAL FUND. ALL
SUCH MONEY SHALL BE TURNED OVER TO THE HEALTH
& HOSPITAL FUND ON OR BEFORE THE TENTH (10TH)
DAY OF THE MONTH FOLLOWING THAT MONTH IN WHICH
SAID MONEY IS ACCRUED. FAILURE OF THE EMPLOYER
SIGNATORY TO THIS AGREEMENT TO EXECUTE THE
STANDARD PARTICIPATION AGREEMENT OF THE NAMED
FUND SHALL INVALIDATE THIS AGREEMENT.
ARTICLE 22: PENSION AND RETIREMENT
22.1: EFFECTIVE JULY 1, 1997, THE EMPLOYER
AGREES TO CONTRIBUTE ONE DOLLAR AND EIGHTY-FIVE
CENTS ($1.85) PER HOUR ON ALL HOURS PAID TO THE
NEW YORK STATE TEAMSTERS CONFERENCE PENSION AND
RETIREMENT FUND ON OR BEFORE THE TENTH (10TH) DAY
OF THE MONTH FOLLOWING THAT MONTH IN WHICH SAID
MONIES WERE ACCRUED.
EFFECTIVE JANUARY 1, 1998 THE EMPLOYER AGREES TO
CONTRIBUTE ONE DOLLAR AND FIFTY TWO AND ONE-HALF
CENTS ($1.525) PER HOUR ON ALL HOURS PAID TO THE
NEW YORK STATE TEAMSTERS CONFERENCE PENSION AND
RETIREMENT FUND ON OR BEFORE THE TENTH (10TH)
DAY OF THE MONTH FOLLOWING THAT MONTH IN WHICH
SAID MONIES WERE ACCRUED.
22.2: THE EMPLOYER AGREES TO SIGN THE STANDARD
PARTICIPATION AGREEMENT OF THE NEW YORK STATE
TEAMSTERS CONFERENCE PENSION AND RETIREMENT FUND
AND BY EXECUTION OF THIS PARTICIPATION AGREEMENT
IT BECOMES AN INTEGRAL PART OF THIS LABOR AGREEMENT.
ARTICLE 23: HOLIDAYS
23.1: PAID HOLIDAYS TO BE OBSERVED ARE: MEMORIAL DAY,
INDEPENDENCE DAY, LABOR DAY, THANKSGIVING DAY,
CHRISTMAS DAY, AND NEW YEAR'S DAY, IRRESPECTIVE OF THE
DAY OF THE WEEK ON WHICH THE HOLIDAY FALLS.
23.2: ANY EMPLOYEE LAID OFF SEVEN (7) DAYS PRIOR
TO A HOLIDAY SHALL RECEIVE HOLIDAY PAY, EXCEPT IF A
NEW EMPLOYEE IS EMPLOYED BY AN EMPLOYER FOR NOT MORE
THAN TWO (2) DAYS DURING THIS PERIOD HE SHALL NOT BE
ENTITLED TO HOLIDAY PAY.
23.3: AN EMPLOYEE MUST WORK THE DAY BEFORE AND
THE WORKING DAY AFTER THE HOLIDAY TO RECEIVE HOLIDAY
PAY. HOWEVER, AN EMPLOYEE NOT ABLE TO REPORT
BECAUSE OF PROVEN SICKNESS, DEATH IN THE IMMEDIATE
FAMILY OR ACCIDENT SHALL BE ENTITLED TO HOLIDAY PAY.
23.4: AN EMPLOYEE ORDERED OUT AND REPORTS FOR WORK
ON A HOLIDAY SHALL BE PAID A MINIMUM OF EIGHT (8)
HOURS' PAY AT DOUBLE TIME (2X) PLUS THE HOLIDAY PAY.
ARTICLE 24: HOURS OF WORK AND OVERTIME
24.1: EIGHT (8) HOURS SHALL CONSTITUTE A REGULAR
WORKDAY AND FIVE (5) SUCH EIGHT (8) HOUR DAYS MONDAY
THROUGH FRIDAY SHALL CONSTITUTE A REGULAR WORKWEEK.
24.2: TIME AND ONE-HALF (1 1/2X) SHALL BE PAID FOR ALL
WORK OVER FORTY (40) HOURS. IF HOWEVER, THE COMPANY
FAILS TO PROVIDE FORTY (40) HOURS OF WORK MONDAY
THROUGH FRIDAY AND THEN CAUSES AN EMPLOYEE TO WORK
ON SATURDAY, HE SHALL RECEIVE TIME AND ONE-HALF
(1 1/2X) FOR SUCH SATURDAY WORK.
24.3: DOUBLE TIME (2X) WILL BE PAID FOR ALL WORK
PERFORMED ON SUNDAY AND HOLIDAYS.
24.4: EMPLOYEES REPORTING FOR WORK AT STARTING TIME
AND NOT PUT TO WORK SHALL RECEIVE A MINIMUM OF FOUR
(4) HOURS' WORK IF NOT NOTIFIED NOT TO REPORT TO
WORK.
24.5: AN EMPLOYEE CALLED BACK TO WORK AFTER HIS
REGULAR WORKING HOURS SHALL RECEIVE A MINIMUM
OF FOUR (4) HOURS AT OVERTIME RATE.
24.6: TWO (2) SHIFTS MAY BE WORKED IN TWENTY-FOUR
(24) HOURS AND SHALL BE OF EQUAL DURATION AND AT
THE SAME RATE.
24.7: THREE (3) SHIFTS MAY BE WORKED IN TWENTY-FOUR
(24) HOURS AND SHALL BE AT THE RATE AND DURATION
AS SET FORTH BELOW:
1ST SHIFT 8 HOURS' WORK 8 HOURS' PAY
2ND SHIFT 7 1/2 HOURS' WORK 8 HOURS' PAY
3RD SHIFT 7 HOURS' WORK 8 HOURS' PAY
EACH SHIFT SHALL HAVE ONE-HALF (1/2) HOUR FOR
LUNCH. WHEN THREE (3) SHIFTS ARE WORKED,
THE SECOND AND THIRD SHIFT SHALL BE CONSIDERED
FOR PAYROLL PURPOSES AS HAVING WORKED IN THEIR
ENTIRETY ON THE SAME DAY WHICH THE FIRST SHIFT
STARTED.
ARTICLE 25: WAGES
EFFECTIVE
7/1/97
DRIVER OPERATOR $12.00
EQUIPMENT OPERATOR $12.90
DRIVER-OPERATOR (FOREMAN) $13.10
ALL OIL SPILL ORIENTED RELATED WORK $10.00
TECHNICIAN $12.00
WHEN AN EMPLOYEE DOES NOT FUNCTION AT THEIR NORMAL
DUTIES, HE WILL WORK ANY OTHER CAPACITY ASSIGNED BY THE
COMPANY.
AN EMPLOYEE WORKING IN A HIGHER CLASS OF PAY FOR ANY PART
OF THE WORK DAY SHALL RECEIVE THE HIGHER RATE FOR ALL
HOURS' WORKED IN THE HIGHER CLASS ONLY ON THAT DAY.
IN THE EVENT A NEW JOB CLASSIFICATION IS CREATED THE
COMPANY SHALL NEGOTIATE WITH THE UNION FOR A PERMANENT
RATE.
ARTICLE 26: DURATION
26.1: IT IS AGREED THAT, IN THE EVENT THAT ANY GOVERNMENTAL
LAWS OR REGULATIONS PREVENT THE IMPLEMENTATION OF ANY OF THE
PROVISIONS OF THIS AGREEMENT, THEY SHALL NOT BECOME EFFECTIVE
UNLESS AND UNTIL IT IS LEGAL TO IMPLEMENT THE SAME AND, AT
SUCH TIME, PERFORMANCE THEREOF SHALL BE EFFECTUATED PROMPTLY
ON THE DATE OR DATES IT IS LEGAL TO DO SO. THE EMPLOYER SHALL
IMPLEMENT AT ANY EFFECTIVE DATE, WITHIN THE TERMS OF THIS
AGREEMENT SUCH PROVISION THAT BECOMES LEGAL EVEN THROUGH ALL
OR PART OF IT MAY HAVE PREVIOUSLY BEEN DISALLOWED.
26.2: THIS AGREEMENT SHALL CONTINUE IN FULL FORCE AND EFFECT
FROM JULY 1, 1997 AND INCLUDING JUNE 30, 1998, AND
THEREAFTER FROM YEAR TO YEAR UNLESS ALTERED OR TERMINATED
AFTER THE EXPIRATION OF THE AFOREMENTIONED PERIOD, OR
ANY ADDITIONAL ONE (1) YEAR PERIOD.
26.3: EITHER PARTY DESIRING TO ALTER OR TERMINATE THIS
AGREEMENT SHALL SERVE WRITTEN NOTICE UPON THE OTHER PARTY
AT LEAST SIXTY (60) DAYS PRIOR TO JUNE 30, 1998.
TEAMSTERS LOCAL 687 ST. LAWRENCE INDUSTRIAL SERVICES, INC.
14 ELM STREET P.O. BOX 5182
POTSDAM, NEW YORK 13676 MASSENA, NEW YORK 13662
February 1, 1998
Mr. Sidney M. Belile
5 Park Street
Norwood, NY 13668
RE: EMPLOYMENT CONTRACT
Dear Sid:
This letter states the terms and conditions of your
employment with OP-TECH Environmental Services,
Inc. (the Firm) from February 5, 1998 until February 5, 1999,
or until your employment is terminated
either by you or by the Firm.
Your obligation is to devote all of your business time energies,
and abilities to the performance of your
assigned duties, in the Firm in an efficient, trustworthy,
and businesslike manner. In the event of
termination of your employment either by you or the Firm, you
will work cooperatively as directed by
the Firm to effect an orderly and professional transfer of your
responsibilities, and without the prior
express written consent of the President, you will refrain for two
years from (1) conducting employment
related discussions with Firm employees, and (2) conducting
service-related discussions with Firm clients
or parties identified by the Firm as active or prospective clients
as of the effective date of termination.
In consideration of the services mentioned above, the Firm will pay
to you a salary based upon the
amount of $46,500 per annum. Also, in consideration of your
productivity and efficiency, the Firm will
pay you an annual bonus according to the plan approved by the
Board of Directors. Thirdly, you will
be entitled to such other benefits as are set forth in a schedule
attached hereto and made a part hereof as
EXHIBIT ONE.
If you become unable, due to disability, to perform such duties for
a period of six (6) consecutive months, your employment will
automatically terminate at the end of the sixth full month of your
disability. Income after that date will be received directly from
your own insurance company provided
you maintain long-term disability insurance.
If either you or the Firm elect to terminate your employment,
the party electing to terminate must provide
at least three months prior written notice to the other party.
This notice is in lieu of any severance pay.
If you provide no such timely notice, you will forfeit any right
to incentive payments for the year during
which termination occurred.
Mr. Sidney M. Belile
February 1, 1998
This letter contains all understandings between you and the
Firm concerning employment, supersedes all
prior understandings, and may be modified only by written
agreement executed by you and the Firm.
OP-TECH ENVIRONMENTAL SERVICES, INC.
/s/Christopher J. Polimino
General Manager
Accepted the 8, day of February, 1998
/s/Sidney M. Belile
EXHIBIT ONE
OP-TECH will pay your health benefits for family coverage
through Blue Cross/Blue Shield at a rate of
$3,819.24/year. OP-TECH will provide you with a company
owned vehicle and will provide insurance
and gasoline for the vehicle.
February 1, 1998
Mr. Ronald L. Martin
2860 County Rte 28
P O Box 2
Waddington, NY 13694
RE: EMPLOYMENT CONTRACT
Dear Ron:
This letter states the terms and conditions of your
employment with OP-TECH Environmental Services,
Inc. (the Firm) from February 5, 1998 until February 5, 1999,
or until your employment is terminated
either by you or by the Firm.
Your obligation is to devote all of your business time energies,
and abilities to the performance of your
assigned duties, in the Firm in an efficient, trustworthy, and
businesslike manner. In the event of
termination of your employment either by you or the Firm,
you will work cooperatively as directed by
the Firm to effect an orderly and professional transfer of
your responsibilities, and without the prior
express written consent of the President, you will refrain
for two years from (1) conducting employment
related discussions with Firm employees, and (2) conducting
service-related discussions with Firm clients
or parties identified by the Firm as active or prospective
clients as of the effective date of termination.
In consideration of the services mentioned above, the Firm will
pay to you a salary based upon the
amount of $48,000 per annum plus a $2,000 premium for overtime per
annum. Also, in consideration
of your productivity and efficiency, the Firm will pay you an
annual bonus according to the plan
approved by the Board of Directors. Thirdly, you will be entitled
to such other benefits as are set forth
in a schedule attached hereto and made a part hereof as EXHIBIT ONE.
If you become unable, due to disability, to perform such duties for
a period of six (6) consecutive
months, your employment will automatically terminate at the end
of the sixth full month of your
disability. Income after that date will be received directly
from your own insurance company provided
you maintain long-term disability insurance.
If either you or the Firm elect to terminate your employment,
the party electing to terminate must provide
at least three months prior written notice to the other party.
This notice is in lieu of any severance pay.
If you provide no such timely notice, you will forfeit any right
to incentive payments for the year during
which termination occurred.
Mr. Ronald Martin
February 1, 1998
This letter contains all understandings between you and the
Firm concerning employment, supersedes all
prior understandings, and may be modified only by written
agreement executed by you and the Firm.
OP-TECH ENVIRONMENTAL SERVICES, INC.
/s/Christopher J. Polimino
General Manager
Accepted the 8 day of February , 1998
/s/ Ronald L. Martin
EXHIBIT ONE
OP-TECH will provide you with a company owned pick-up truck and
will provide the insurance and
gasoline for the vehicle mentioned above.
You will receive: All benefits as noted in the Union Agreement
dated July 1, 1997.
February 1, 1998
Mr. Thomas J. Burke
5 Pine Street
Norwood, NY 13668
RE: EMPLOYMENT CONTRACT
Dear Tom:
This letter states the terms and conditions of your
employment with OP-TECH Environmental Services,
Inc. (the Firm) from February 5, 1998 until February 5, 1999,
or until your employment is terminated
either by you or by the Firm.
Your obligation is to devote all of your business time
energies, and abilities to the performance of your
assigned duties, in the Firm in an efficient, trustworthy,
and businesslike manner. In the event of
termination of your employment either by you or the Firm,
you will work cooperatively as directed by
the Firm to effect an orderly and professional transfer of
your responsibilities, and without the prior
express written consent of the President, you will refrain
for two years from (1) conducting employment
related discussions with Firm employees, and (2) conducting
service-related discussions with Firm clients
or parties identified by the Firm as active or prospective
clients as of the effective date of termination.
In consideration of the services mentioned above, the Firm
will pay to you a salary based upon the
amount of $37,800 per annum. Also, in consideration of
your productivity and efficiency, the Firm will
pay you an annual bonus according to the plan approved by
the Board of Directors.
If you become unable, due to disability, to perform such duties
for a period of six (6) consecutive
months, your employment will automatically terminate at the end
of the sixth full month of your
disability. Income after that date will be received directly
from your own insurance company provided
you maintain long-term disability insurance.
If either you or the Firm elect to terminate your employment,
the party electing to terminate must provide
at least three months prior written notice to the other party.
This notice is in lieu of any severance pay.
If you provide no such timely notice, you will forfeit any
right to incentive payments for the year during
which termination occurred.
Mr. Thomas J. Burke
February 1, 1998
This letter contains all understandings between you and
the Firm concerning employment, supersedes all
prior understandings, and may be modified only by written
agreement executed by you and the Firm.
OP-TECH ENVIRONMENTAL SERVICES, INC.
/S/Christopher J. Polimino
General Manager
Accepted the 8th day of February , 1998
EXHIBIT ONE
You will receive all benefits as outlined in the Labor Trade
Agreement dated July 1, 1997.
February 1, 1998
Mr. Richard M. Fairbridge
82 Fenton Street
Waddington, NY 13694
RE: EMPLOYMENT CONTRACT
Dear Richard:
This letter states the terms and conditions of your employment
with OP-TECH Environmental Services,
Inc. (the Firm) from February 5, 1998 until February 5, 1999,
or until your employment is terminated
either by you or by the Firm.
Your obligation is to devote all of your business time energies,
and abilities to the performance of your
assigned duties, in the Firm in an efficient, trustworthy,
and businesslike manner. In the event of
termination of your employment either by you or the Firm,
you will work cooperatively as directed by
the Firm to effect an orderly and professional transfer of
your responsibilities, and without the prior
express written consent of the President, you will refrain
for two years from (1) conducting employment
related discussions with Firm employees, and (2) conducting
service-related discussions with Firm clients
or parties identified by the Firm as active or prospective
clients as of the effective date of termination.
In consideration of the services mentioned above, the Firm
will pay to you a salary based upon the
amount of $43,000 per annum. Also, in consideration of your
productivity and efficiency, the Firm will
pay you an annual bonus according to the plan approved by
the Board of Directors. Thirdly, you will
be entitled to such other benefits as are set forth in a
schedule attached hereto and made a part hereof as
EXHIBIT ONE.
If you become unable, due to disability, to perform such
duties for a period of six (6) consecutive
months, your employment will automatically terminate at
the end of the sixth full month of your
disability. Income after that date will be received
directly from your own insurance company provided
you maintain long-term disability insurance.
If either you or the Firm elect to terminate your
employment, the party electing to terminate must provide
at least three months prior written notice to the other party.
This notice is in lieu of any severance pay.
If you provide no such timely notice, you will forfeit any
right to incentive payments for the year during
which termination occurred.
Mr. Richard Fairbridge
February 1, 1998
This letter contains all understandings between you and the
Firm concerning employment, supersedes all
prior understandings, and may be modified only by written
agreement executed by you and the Firm.
OP-TECH ENVIRONMENTAL SERVICES, INC.
/s/Christopher J. Polimino
General Manager
Accepted the 8th day of February , 1998
/s/Richard M. Fairbridge
EXHIBIT ONE
The firm will pay you a car allowance of $92.31/week to be
included in your paycheck. Mileage will
be reimbursed to you at a rate of $.07/mile.
You will receive all benefits as noted in the Union Labor
agreement dated July 1, 1997.
