NSC CORPORATION
49 Danton Drive
Methuen, Massachusetts 01844
----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1996
----------------------
To the Stockholders of
NSC Corporation:
The Annual Meeting of Stockholders of NSC Corporation (the "Company") will be
held at the Company's Headquarters, located at 49 Danton Drive, Methuen,
Massachusetts 01844 on Thursday, May 16, 1996 at 11:00 a.m., local time for the
purpose of (i) electing seven directors to serve for the ensuing year, and (ii)
transacting such other business as may properly come before the meeting or any
adjournment thereof.
Only stockholders of record at the close of business on March 30, 1996 will be
entitled to vote at the meeting and any adjournment thereof. A list of such
stockholders will be available at the time and place of the meeting and, during
the ten days prior to the meeting, at the Company's principal office.
By Order of the Board of Directors
J. Drennan Lowell
Vice President, Chief Financial Officer,
Treasurer and Secretary
Methuen Massachusetts
April 16, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO NOT EXPECT TO ATTEND,
PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED FORM OF PROXY IN THE ENCLOSED
PREPAID ENVELOPE AS PROMPTLY AS POSSIBLE.
<PAGE>
TABLE OF CONTENTS
VOTING 1
ELECTION OF DIRECTORS 2
Information Concerning the Nominees 2
Committees of the Board of Directors and Meetings Held 4
Directors' Fees 4
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF 5
Security Ownership of the Company 5
Security Ownership of OHM 7
Security Ownership of WMX 8
EXECUTIVE COMPENSATION 9
Summary of Cash and Certain Other Compensation 9
Stock Options 9
Compensation Committee Interlocks and Insider Participation 10
Board Compensation Committee Report 10
Performance Graph 11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 12
Revolving Credit Agreement 12
Other 12
INDEPENDENT AUDITORS 13
STOCKHOLDER PROPOSALS 13
OTHER MATTERS 13
<PAGE>
NSC CORPORATION
49 Danton Drive
Methuen, Massachusetts 01844
----------------------
PROXY STATEMENT FOR 1996 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1996
----------------------
NSC Corporation (the "Company") is mailing this Proxy Statement to the
stockholders of the Company in connection with the solicitation of proxies by
the Company's Board of Directors. These proxies will be used at the Annual
Meeting of Stockholders to be held at 11:00 a.m. on Thursday, May 16, 1996 at
the Company's headquarters, located at 49 Danton Drive, Methuen, Massachusetts
01844 and at any adjournment thereof (the "Annual Meeting").
If a stockholder properly executes and returns the enclosed form of proxy, it
will be voted according to his or her instructions. If no instructions are
given, it will be voted for the election as directors of the seven nominees
named below and in the discretion of the proxies with respect to any other
matter that may come before the meeting. Any proxy may be revoked by giving
notice of revocation to the Company in writing or in open meeting before the
proxy is exercised. No appraisal rights exist for any action proposed to be
taken at the Annual Meeting.
The Company will pay the expenses of soliciting proxies, including the charges
and expenses of brokers, nominees, fiduciaries and custodians incurred in
sending proxy materials to principals and obtaining their instructions. In
addition to the use of the mail, proxies may be solicited in person or by
telephone or telegraph. Directors, officers and regular employees of the Company
may solicit proxies without additional compensation.
This Proxy Statement and the accompanying form of proxy are being mailed to
stockholders on or about April 16, 1996.
VOTING
The Board of Directors has fixed the close of business on March 30, 1996 as the
record date (the "Record Date") for determining stockholders entitled to notice
of and to vote at the Annual Meeting. On the Record Date, there were outstanding
9,971,175 shares of the Company's Common Stock, $0.01 par value (the "Common
Stock"), all of one class and all of which are entitled to be voted at the
Annual Meeting. On the Record Date, each of OHM Corporation ("OHM") and Rust
International Inc. ("Rust"), an affiliate of WMX Technologies, Inc. ("WMX"), was
the owner of record of 4,010,000, or approximately 40%, of the issued and
outstanding shares of Common Stock. See "Election of Directors." Holders of
issued and outstanding shares of Common Stock are entitled to one vote for each
share held by them.
At the Annual Meeting, the results of stockholder voting will be tabulated by
the inspector of elections appointed for the Annual Meeting. Under Delaware law
and the Company's Certificate of Incorporation and By-Laws, properly executed
proxies either marked "abstain" or held in "street name" by brokers that are not
voted on one or more particular proposals (if otherwise voted on at least one
proposal) will be counted for purposes of determining whether a quorum has been
achieved at the Annual Meeting but will not be treated as either a vote for or a
vote against any of the proposals to which such abstention or broker non-vote
applies.
1
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ELECTION OF DIRECTORS
Information Concerning the Nominees
Seven directors will be elected at the Annual Meeting. Each director elected at
the Annual Meeting will hold office until the next Annual Meeting and until his
successor is duly elected and qualified, or until his earlier death, resignation
or removal from office. The Company's management intends that the shares
represented by the enclosed proxy will be voted, unless the stockholder
executing the proxy otherwise instructs, for the election to the Board of
Directors of each of the seven nominees below.
On May 4, 1993 the Company purchased substantially all the assets of the
asbestos-abatement division (the "Division") of The Brand Companies, Inc.
("Brand") pursuant to a Purchase Agreement, dated as of December 23, 1992 as
amended, by and among the Company, NSC Industrial Services Corp., OHM, Brand and
WMX (the "Purchase Agreement"). The Purchase Agreement provides that for so long
as OHM and Rust each own 20% or more of the outstanding Common Stock of the
Company, each of OHM and Rust will have the right to nominate certain members of
the Board of Directors of the Company and contains other agreements concerning
the makeup of the membership of the Board of Directors. Each of OHM and Rust has
informed the Company that they intend to vote all the shares of Common Stock
owned by them (collectively, approximately 80% of the outstanding Common Stock)
in favor of the election of the nominees named below.
The Company has no reason to believe that any of such nominees will be unable,
if elected, to serve as a director. However, if such an event should occur, the
Company's management intends that the shares represented by the enclosed proxy
will be voted for the remainder of the nominees, and for such substitute nominee
or nominees as may be selected by the Company's current Board of Directors.
All of the nominees for director named below are currently serving as directors
of the Company for terms expiring at the Annual Meeting. Mr. Victor J. Barnhart
took his position as a Director effective February 20, 1996, Mr. Robert J.
Blackwell took his position as a director effective November 9, 1995 and Mr.
John J. Ray III took his position effective March 11, 1996. Mr. Randall M.
Walters resigned effective August 10, 1995, Mr. Frank A. McBride resigned
effective November 9, 1995, Mr. Rodney C. Gilbert resigned effective February
20, 1996 and Mr. Harold W. Ingalls resigned effective March 11, 1996.
Positions and Other
Relationships with the Company
Name Age and Business Experience
- - ---- --- -------------------------------
Eugene L. Barnett 66
Director. Mr. Barnett is retired and was a Vice President of Pittway Corp.,
a diversified conglomerate, from 1976 to 1992. He was formerly Chairman and
Chief Executive Officer of Brand from 1976 through February 1991. Mr.
Barnett is a director of Aptar Group, Inc. and Pittway Corp.
Victor J. Barnhart 53
Director. Mr. Barnhart has been the President of Integrated Environmental
Services - WMX Technologies, since December 1995 and President of Rust
Industrial Services Inc., a subsidiary of Rust and Vice President of Rust,
since May 1993. Prior to that time, he was the President of Brand from
November 1990 and Chief Executive Officer from March 1991 to May 1993. Mr.
Barnhart is a Director of OHM Corporation.
Robert J. Blackwell 39
Director. Mr. Blackwell has been Senior Vice President - Sales and
Marketing of OHM Remediation Services Corporation since August 1993. Prior
to joining the Company, Mr. Blackwell served as Vice President - Sales and
Marketing for EBASCO since August 1986.
2
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Frank J. Fradella 40
President, Chief Executive Officer and Director. Mr. Fradella has been
President and Chief Executive Officer of the Company since November 1994
and served as Senior Vice President since May 1994 and Vice President,
Western Region, since February 1993. Prior to joining the Company, Mr.
Fradella served as Vice President for Kaselaan & D'Angelo Associates, Inc.
from February 1991 to January 1993.
Herbert A. Getz 40
Director. Mr. Getz has been Senior Vice President and General Counsel of
WMX since May 1995 and Vice President and General Counsel of WMX since
August 1992 and Secretary of WMX since January 1988. Mr. Getz also served
as the Vice President, General Counsel and Secretary of Wheelabrator
Technologies Inc. from November 1990 to May 1993. In addition, Mr. Getz had
been the Vice President and Secretary of Rust from December 1992 until May
1994.
William M. R. Mapel 64
Director. Mr. Mapel is a private investor and was formerly a Senior Vice
President of Citibank, N.A. from 1969 to 1988, where he was employed for
more than 30 years. Mr. Mapel is a director of Mercantile & General
Reinsurance Company of America; Mercantile & General Life Reassurance
Company of America; Brundage, Story & Rose Investment Trust; Carolina
Freight Corporation; Churchill Capital Partners; Galey & Lord and USLIFE
Income Fund, Inc..
John J. Ray III 37
Director. Mr. Ray has been Vice President, General Counsel and Secretary of
OHM Corporation since November 1995, Vice President and Group General
Counsel of Waste Management Inc. ("WMI"), a subsidiary of WMX, since
September 1991 and Senior Counsel of WMI since May 1990.
3
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Committees of the Board of Directors and Meetings Held
During 1995, the Board of Directors of the Company held a total of eight
meetings.
Messrs. Blackwell and Barnhart are currently members of the Executive Committee,
the function of which is to exercise, when the full Board is not in session, and
except as otherwise may be provided by law, all of the powers and authority of
the Board of Directors in the management of the business and affairs of the
Company. The Executive Committee did not meet during 1995.
Messrs. Mapel (Chairman) and Barnett are members of the Stock Option Committee,
the primary function of which is to administer the Company's 1990 Stock Option
Plan and approve awards of stock options made thereunder. The Stock Option
Committee met one time during 1995.
Messrs. Getz (Chairman), Mapel and Ray are members of the Compensation
Committee, the primary function of which is to review and approve salaries and
other benefits for executive officers of the Company and to make recommendations
to the Board of Directors with respect to the adoption of employee benefit
programs. The Compensation Committee met two times during 1995.
The Company has a standing Audit Committee, the primary function of which is to
oversee the accounting and auditing affairs of the Company. Messrs. Barnett
(Chairman), Barnhart and Ray serve as members of the Audit Committee. The Audit
Committee met three times during 1995.
No director attended less than 75% of Board and applicable committee meetings.
The Company has no standing nominating committee or committee performing similar
functions.
Directors' Fees
Directors of the Company who are not employees of the Company, OHM or WMX or
their affiliates receive $20,000 per annum.
4
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Security Ownership of the Company
The Company's Common Stock is the Company's only outstanding class of voting
securities. The following table sets forth certain information as of March 15,
1996, except as otherwise indicated, with respect to the beneficial ownership of
the Company's Common Stock (i) by holders of 5% or greater, (ii) each director
of the Company, (iii) each executive officer identified under the caption
"Executive Compensation -- Summary of Cash and Certain Other Compensation --
Summary Compensation Table," and (iv) by all directors and executive officers of
the Company as a group.
Amount and
Name of Nature of
Beneficial Beneficial Percentage
Owner (1) Ownership(2) of Class
- - ----------- ------------ -----------
OHM Corporation 4,010,000 40.22%
16406 U.S. Route 224 East
Findlay, Ohio 45840
Rust International Inc. 4,010,000 40.22%
100 Corporate Parkway
Birmingham, Alabama 35242
Eugene L. Barnett (3) 10,000 *
Victor J. Barnhart 0 -
Robert J. Blackwell 0 -
Herbert A. Getz 500 *
William M. R. Mapel (3) 11,000 *
John J. Ray III 0 -
Frank J. Fradella 0 -
J. Drennan Lowell 0 -
Darryl G. Schimeck (4) 0 -
Efstathios A. Kouninis 0 -
All directors and executive
officers as a group (10 persons) (3) 21,500 *
- - ----------------
* Less than 1%
(1) The address of each stockholder is c/o NSC Corporation, 49 Danton Drive,
Methuen, Massachusetts 01844.
(2) Information with respect to beneficial ownership is based on information
furnished to the Company by each stockholder included in this table. Except
as indicated in the notes to the table, each stockholder included in the
table has sole voting and investment power with respect to the shares shown
to be beneficially owned by him.
(3) Assumes the exercise of options, presently exercisable or exercisable
within 60 days, to purchase up to 10,000 shares of Common Stock by each of
Messrs. Barnett and Mapel, granted pursuant to the Company's 1990 Stock
Option Plan.
5
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(4) Under the securities law of the United States, the Company's directors, its
executive officers and any persons holding more than ten percent of the
Common Stock are required to report their initial ownership of Common Stock
and any subsequent changes in that ownership to the Commission. Specific
due dates for these reports have been established and the Company is
required to disclose in this Proxy Statement any failure to file by these
dates during 1995. All of these filing requirements were satisfied, except
that Mr. Schimeck failed to file on a timely basis his initial statement of
beneficial ownership, which reported no transactions. In making these
disclosures, the Company has relied solely on written representations of
its directors and executive officers and copies of the reports that they
have filed with the Commission.
6
<PAGE>
Security Ownership of OHM
The following table sets forth certain information as of March 15, 1996, except
as otherwise noted, with respect to the beneficial ownership of OHM common stock
by (i) each director of the Company, (ii) each executive officer identified
under the caption "Executive Compensation -- Summary of Cash and Certain Other
Compensation -- Summary Compensation Table," and (iii) by all directors and
executive officers of the Company as a group.
Amount and
Name of Nature of
Beneficial Beneficial Percentage
Owner (1) Ownership(2) of Class
---------- ------------ ----------
Eugene L. Barnett 0 -
Victor R. Barnhart 0 -
Robert J. Blackwell (3) 39,112 *
Herbert A. Getz (4) 15,000 *
William M. R. Mapel 0 -
John J. Ray III 0 -
Frank J. Fradella 0 -
J. Drennan Lowell 0 -
Darryl G. Schimeck 0 -
Efstathios A. Kouninis 0 -
All directors and executive
officers as a group (10 persons) (5) 54,112 *
- - --------------------
* Less than 1%
(1) The address of each stockholder is c/o NSC Corporation, 49 Danton
Drive, Methuen, Massachusetts 01844.
(2) Information with respect to beneficial ownership is based on information
furnished to the Company by each stockholder included in this table. Except
as indicated in the notes to the table, each stockholder included in the
table has sole voting and investment power with respect to the shares shown
to be beneficially owned by him.
(3) Assumes the exercise of options, presently exercisable or exercisable
within 60 days, to purchase 35,400 shares.
(4) Assumes the exercise of options, presently exercisable or exercisable
within 60 days, to purchase 15,000 shares.
(5) Assumes the exercise of options, presently exercisable or exercisable
within 60 days, to purchase 50,400 shares.
7
<PAGE>
Security Ownership of WMX
The following table sets forth certain information as of March 15, 1996,
except as otherwise noted, with respect to the beneficial ownership of WMX
common stock by (i) each director of the Company, (ii) each executive officer
identified under the caption "Executive Compensation -- Summary of Cash and
Certain Other Compensation -- Summary Compensation Table," and (iii) by all
directors and executive officers of the Company as a group.
Amount and
Name of Nature of
Beneficial Beneficial Percentage
Owner(1) Ownership(2) of Class
- - ---------- ------------ ----------
Eugene L. Barnett 0 -
Victor R. Barnhart (3) 32,553 *
Robert J. Blackwell 0 -
Herbert A. Getz (4) 137,710 *
William M. R. Mapel 0 -
John J. Ray III (5) 24,052 *
Frank J. Fradella 0 -
J. Drennan Lowell (6) 207 *
Darryl G. Schimeck 0 -
Efstathios A. Kouninis 0 -
All directors and executive
officers as a group (10 persons) (7) 194,522 *
- - -------------------
* Less than 1%
(1) The address of each stockholder is c/o NSC Corporation, 49 Danton Drive,
Methuen, Massachusetts 01844.
(2) Information with respect to beneficial ownership is based on information
furnished to the Company by each stockholder included in this table. Except
as indicated in the notes to the table, each stockholder included in the
table has sole voting and investment power with respect to the shares shown
to be beneficially owned by him.
(3) Assumes the exercise of options, presently exercisable or exercisable
within 60 days, to purchase 31, 1960 shares and includes 593 shares held
jointly by Mr. Barnhart and his spouse.
(4) Assumes the exercise of options, presently exercisable or exercisable
within 60 days, to purchase 92,218 shares, but does not include 240 shares
held by Mr. Getz's wife as to which he disclaims beneficial ownership.
Includes 42,777 shares held jointly with his wife, 2,316 shares held under
the WMX Profit Sharing and Savings Plan and 159 shares held on behalf of
one of his children.
(5) Assumes the exercise of options, presently exercisable or exercisable
within 60 days, to purchase 24,052 shares.
(6) 207 shares held under the WMX Profit Sharing and Savings Plan.
(7) Assumes the exercise of options, presently exercisable or exercisable
within 60 days, to purchase 148,230 shares.
8
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EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended December 31, 1995, 1994,
and 1993, the cash compensation paid by the Company and its subsidiaries, as
well as certain other compensation paid or accrued for those years, to each of
the most highly compensated executive officers of the Company, including the
Chief Executive Officer of the Company, in all capacities in which they served:
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and ------------------- All Other
Principal Position Year Salary ($) Bonus ($) (1) Compensation (S)(2)
- - ------------------ ---- ---------- ------------- -------------------
Frank J. Fradella 1995 200,013 101,316 89,373
President and 1994 166,522 90,750 86,341
Chief Executive Officer 1993 88,278 22,613 -
J. Drennan Lowell 1995 149,288 60,000 -
Vice President, Chief 1994 126,354 55,375 -
Financial Officer,
Treasurer and Secretary
Darryl G. Schimeck 1995 124,432 49,773 44,451
Vice President-Sales
and Marketing
- - ----------------
(1) Fifty percent of the 1995 bonus amounts listed for Messrs. Fradella, Lowell
and Schimeck were earned but not received in 1995. Such amounts will be
paid in 1996, contingent upon such executive continuing in the employ of
the Company.
(2) "All Other Compensation" includes the following: (i) in 1995, $58,800 tax
gross-up associated with the relocation expenses reimbursed to Mr. Fradella
in 1994, (ii) $25,000 forgiveness of one third of a $75,000 interest free
loan and $5,573 one year imputed interest on the outstanding loan to Mr.
Fradella, (iii) relocation bonus of $20,000 and reimbursed relocation
expenses of $66,341 for Mr. Fradella in 1994, and (iv) $44,451 relocation
expenses for Mr. Schimeck in 1995.
Stock Options
None of the executive officers listed in the Summary Compensation Table received
grants of stock options during 1995.
9
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Compensation Committee Interlocks and Insider Participation
Messrs. Getz and Mapel were members of the Compensation Committee of the Board
of Directors during 1995. Mr. Samuel H. Iapalucci, who resigned from the Board
effective January 12, 1995, Mr. Harold W. Ingalls, who resigned from the Board
effective March 11, 1996, Mr. Frank A. McBride, who resigned from the Board
effective November 9, 1995, and Mr. Randall M. Walters, who resigned from the
Board effective August 10, 1995, were members of the Compensation Committee
during a portion of 1995. Mr. Walters was Vice President and Secretary of the
Company from July 1988 until May 1993.
Board Compensation Committee Report *
The primary function of the Compensation Committee is to review and approve
salaries and other benefits for executive officers of the Company and to make
recommendations to the Board of Directors with respect to the adoption of
employee benefit programs. The Compensation Committee is currently composed of
three directors, Messrs. Getz, Mapel and Ray who are not executive officers of
the Company, although Mr. Getz is executive officer of WMX which currently,
through ownership of Rust, is the owner of approximately 40% of the issued and
outstanding Common Stock. Set forth below is a report of Messrs. Getz, Mapel and
Ray in their capacity as the Board's Compensation Committee addressing the
Company's compensation policies for 1995 as they affected the executive officers
who, for 1995, were the Company's most highly paid executive officers.
Compensation Policies Towards Executive Officers. The majority of the
compensation received by the executive officers of the Company, as reflected in
the compensation table, consisted of a base salary, and an incentive payment for
1995 as determined under the 1994 Management Incentive Compensation Plan (the
"Incentive Plan").
The base salaries of the executive officers generally were set at levels
recommended by the President and Chief Executive Officer of the Company and
approved by the Compensation Committee. One executive officer was given a raise
in 1995 based on the Compensation Committee's subjective view of his performance
and the length of time that had elapsed since his last raise. Each of the
executive officers had the opportunity to earn incentive payments under the
Incentive Plan based on the achievement of certain performance goals determined
by the Compensation Committee in conjunction with the Company's annual business
plan. The amount of incentive payment is targeted at a percentage of such
executive's base salary and can be increased or decreased depending on whether
the operating cash flow and operating income of the Company meet, exceed or fall
below the targeted operating cash flow and operating income set by the
Compensation Committee.
Mr. Fradella's 1995 Compensation. Upon Mr. Fradella's appointment in November
1994 as President and Chief Executive Officer, his base salary was set at
$200,000 with the intention that future increases would be tied to both the
future performance of the Company and to Mr. Fradella's personal performance as
assessed by the Compensation Committee. No change was made to Mr. Fradella's
base salary in 1995, in view of the fact that his base pay was recently set in
November 1994. Mr. Fradella will also have the opportunity to receive incentive
payments under the Incentive Plan as previously described.
Section 162(m) of the Internal Revenue Code of 1986, as amended, prohibits a
publicly held corporation, such as the Company, from claiming a deduction on its
federal income tax return for compensation in excess of $1,000,000 paid for a
given fiscal year to certain executives. The Compensation Committee does not
believe it is likely that the deductibility of compensation paid by the company
will be limited by the operation of Section 162(m).
HERBERT A. GETZ
WILLIAM R. MAPEL
JOHN J. RAY
- - ----------------
* Note: This report is not incorporated by reference in any prior or
future Commission filing, directly or by reference to the
incorporation of the proxy statements of the Company, unless such
filing specifically incorporates this report.
10
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Performance Graph *
Set forth below is a line graph comparing the yearly percentage change in the
cumulative total stockholder return on the Common Stock against the cumulative
total return for S&P Composite-500 Stock Index and a peer group of companies
selected by the Company consisting of companies in which significant amounts of
revenues are derived from the asbestos-abatement business (the "Peer Group") for
the period of five years commencing December 31, 1990 and ending December 31,
1995. The Peer Group includes American ECO Group, Inc., Chempower, Inc., LVI
Group, Inc. (name changed to Lehigh Group since 01/30/95) and PDG Environmental
Inc. Certain companies (Advatex Associates, Inc., not traded since 7/14/92;
Eastern Environmental Services; ECI Environmental Inc., not traded since
5/27/95; Environmental Control Groups Inc., not traded since 1/30/92; and
Wellstead, Inc., not traded since 5/14/93) included in the Peer Group for the
Performance Graph contained in the Proxy Statement for the Company's 1995 Annual
Meeting have been excluded from the following Performance Graph because such
companies have, to the knowledge of the Company, ceased public trading.
COMPARISON OF FOUR-YEAR CUMULATIVE TOTAL RETURN ON
COMMON STOCK, S&P 500 AND PEER GROUP
(Market Value of $100 Invested on December 31, 1990)
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
Peer Group 100.00 124.64 129.69 129.98 100.95 81.30
NSC Corporation 100.00 76.92 109.69 70.09 62.31 53.85
S&P 500 100.00 126.31 131.95 141.25 139.08 186.52
*WARNING* The above numeric data table is depicted in a graph format in the
original printed copy.
- - ----------------
*Note: This information is not incorporated by reference in any prior or
future Commission filing, directly or by reference to the incorporation
of the proxy statements of the Company, unless such filing specifically
incorporates this information.
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Revolving Credit Agreement
Rust provides a $25 million revolving credit facility to the Company pursuant to
a revolving credit agreement (the "Rust Credit Agreement"). Under the Rust
Credit Agreement, Rust will make revolving loans to the Company until May 3,
1996, in amounts not to exceed $25 million. Such loans will (i) be subordinate
to the Company's senior bank financing, (ii) be unsecured, (iii) bear interest
on the outstanding principal amount thereof at a rate per annum equal to the
prime rate announced from time to time by certain bank plus 1%, and (iv) be
utilized for working capital purposes. Interest on such loans will be payable on
a quarterly basis, and the aggregate principal amount of such loans will mature
on June 6, 1996. No amounts were outstanding under the Rust Credit Agreement for
the years ended December 31, 1995, 1994 and 1993. This revolving credit
agreement terminates June 6, 1996.
Other
In connection with his election as President and Chief Executive Officer, Mr.
Fradella received a $75,000 interest free loan to be forgiven in equal
installments over three consecutive years. The balance of the loan becomes due
and payable in the event Mr. Fradella voluntarily leaves the employ of the
Company or is terminated for cause prior to September 7, 1997.
The Company has, from time to time, provided asbestos-abatement and related
services to an affiliate of OHM on a subcontract basis. Revenues earned from
this affiliate for such services were $212,000 for the year ended December 31,
1995. In addition, the Company has, from time to time, provided
asbestos-abatement and related services to Rust and certain of its affiliates on
a subcontract basis. Revenues earned from Rust and its affiliates for such
services were $302,000 for the year ended December 31, 1995. Rust and certain of
its affiliates also provided scaffolding, disposal, demolition, and other
related services to the Company on a subcontract basis. The costs for such
services were $1,719,000 for the year ended December 31, 1995. During 1995, Rust
rented demolishing equipment to the Company for which it was charged $209,000
for the year ended December 31, 1995.
12
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INDEPENDENT AUDITORS
Ernst & Young LLP, has been selected as the Company's independent auditors for
the fiscal year ending December 31, 1996. Ernst & Young LLP, has served as the
Company's independent auditors since May 1990. A representative of Ernst & Young
LLP, is expected to be present at the Annual Meeting with an opportunity to make
a statement if he desires to do so and to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Proposals for the 1997 Annual Meeting of Stockholders must be received by
December 19, 1996 to be included in the Company's proxy statement and proxy.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for action at
the forthcoming Annual Meeting. However, the proxy confers upon the persons
named therein discretionary authority to act upon any other matter that may
properly come before the meeting.
The Company will furnish a copy of its Annual Report on Form 10-K for the year
ended December 31, 1995 including financial statements and schedules thereto,
but excluding other exhibits, without charge, to any person upon written request
addressed to J. Drennan Lowell, Vice President, Chief Financial Officer,
Treasurer and Secretary, NSC Corporation, 49 Danton Drive, Methuen Massachusetts
01844.
J. Drennan Lowell
Vice President, Chief Financial Officer,
Treasurer and Secretary
April 16, 1996
Methuen, Massachusetts
13
