<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Waste Recovery, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
WASTE RECOVERY, INC.
309 SOUTH PEARL EXPRESSWAY
DALLAS, TEXAS 75201
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 14, 1995
To the Shareholders of Waste Recovery, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of
Waste Recovery, Inc. ("WRI") will be held on Monday, August 14, 1995, at 10:00
A.M., Dallas, Texas time at WRI's corporate offices at 309 South Pearl
Expressway, Dallas, Texas for the following purposes:
1. To elect two directors to serve three years, and until their
successors have been duly elected and qualified; and
2. To increase shares available for issuance under WRI's 1989 Stock Plan
for Employees and limit individual grants thereunder; and
3. To approve the selection of Price Waterhouse as the independent
accountants of WRI to serve for the fiscal year ending December 31,
1995; and
4. To transact such other business as may properly be brought before the
meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on July 17, 1995,
are entitled to notice of, or to vote at, the meeting or any adjournment(s)
thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTPAID RETURN
ENVELOPE ENCLOSED HEREWITH. In the event you are present at the meeting, you
may disregard your proxy and vote in person.
By Order of the Board of Directors,
JOHN E. COCKRUM
Secretary
Dallas, Texas
July 21, 1995
<PAGE> 3
WASTE RECOVERY, INC.
309 SOUTH PEARL EXPRESSWAY
DALLAS, TEXAS 75201
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 14, 1995
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Waste
Recovery, Inc., a Texas corporation ("WRI" or the "Company"), for use at the
Annual Meeting of Shareholders of WRI to be held in WRI's offices in Dallas,
Texas at 10:00 a.m. local time on August 14, 1995, and at any adjournment(s)
thereof, for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders. Solicitations of proxies may be made in person or by
mail, telephone or telegram by directors, officers and other employees of WRI
who will receive no special compensation for such services. WRI will also
request banking institutions, brokerage firms, custodians, trustees, nominees
and fiduciaries to forward solicitation material to the beneficial owners of
its common stock ("Common Stock") held of record by such persons, will furnish
at its expense the number of copies thereof necessary to supply such material
to all such beneficial owners, and will reimburse the reasonable forwarding
expense incurred by such record owners. All costs of preparing, printing,
assembling and mailing the form of proxy and the material used in the
solicitation will be paid by WRI. The Proxy Statement and form of proxy are
being mailed to shareholders on or about July 21, 1995.
ANNUAL REPORT TO SHAREHOLDERS
The Annual Report to Shareholders, covering the year ended December
31, 1994, including audited financial statements, is enclosed herewith. Unless
otherwise specified herein, the Annual Report to Shareholders does not form any
part of the material for the solicitation of proxies.
FORM 10-K
The Annual Report on Form 10-K for 1994 is contained in the Annual
Report to Shareholders. Additional copies of the Form 10-K may be obtained by
writing WRI at the above address, ATTN: John E. Cockrum, Corporate Secretary.
RECORD DATE; OUTSTANDING STOCK
The close of business on July 17, 1995, is the record date ("record
date") for determination of shareholders entitled to notice of, and to vote at,
the meeting. The stock transfer books will not be closed. At the record date,
there were outstanding and entitled to be voted 10,607,979 shares of the Common
Stock, no par value.
REVOCATION OF PROXY
Granting a proxy does not preclude the right to vote in person, and a
person may revoke his proxy by a signed notice in writing to the Secretary of
WRI at any time before the proxy has been voted.
1
<PAGE> 4
PROPOSALS OF SHAREHOLDERS
Any proposal by a shareholder to be presented at WRI's Annual Meeting
of Shareholders in 1996 must be received by WRI, attention Corporate Secretary,
no later than December 19, 1995, in order to be eligible for inclusion in WRI's
Proxy Statement and form of proxy used in connection with such meeting.
QUORUM; VOTING
Quorum and voting requirements are governed by Texas law, and WRI's
articles of incorporation and bylaws. The presence, in person or by proxy, of
the holders of a majority of the shares of WRI entitled to vote is necessary to
constitute a quorum at the meeting. If a quorum is not present or represented
at the meeting, the shareholders entitled to vote, present in person or
represented by proxy, have the power to adjourn the meeting, without notice
other than announcement at the meeting, until a quorum is present or
represented. At any such adjourned meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the meeting as originally notified.
On all matters submitted to a vote of the shareholders at the meeting
or any adjournment(s) thereof, each shareholder entitled to vote will have one
vote for each share of Common Stock owned by him of record at the close of
business on July 17, 1995. Unless otherwise provided herein, or by law, the
vote of a majority of the shares of Common Stock present in person or
represented by proxy shall decide all matters that may properly come before the
meeting.
ACTION TO BE TAKEN UNDER THE PROXY
Proxies in the accompanying form that are properly executed and
returned will be voted at the meeting and any adjournment(s) thereof in
accordance with the instructions given therein by the signatory shareholder. If
no voting instructions are given, such proxy will be voted "FOR" Proposals 1,
2, and 3, and in the transaction of such other business as may properly come
before the meeting or any adjournment(s) thereof according to the discretion of
the appointed attorneys and proxies. Abstentions and broker non-votes will not
be voted for or against a matter, but will be counted for the purpose of
determining a quorum. The proxies will be tabulated by WRI's transfer agent
who will forward them to WRI. The tabulations are transmitted by fax and phone
to WRI's election judges, who verify the tabulation and conduct the final vote
count of shares represented in person or by proxy. The Board of Directors
("Board") knows of no matters, other than the foregoing proposals, to be
presented for consideration at the meeting. If, however, any other matters
properly come before the meeting or any adjournment(s) thereof, it is the
intention of the attorneys and proxies named in the enclosed proxy to vote such
proxy in accordance with their judgment on any such matters, and such persons
may also, if they deem it advisable, vote such proxy to adjourn the meeting
from time to time.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
At the close of business on July 17, 1995, there was a total of
10,711,739 shares of Common Stock, no par value, issued and 10,607,979 shares
outstanding. At that date, to the knowledge of the management of WRI, no person
owned of record or beneficially more than 5% of the outstanding Common Stock of
WRI, except as set forth in the following table. Shares beneficially owned by
the Kerr, Connors Group are estimated (see footnote no. 3 below). Unless
indicated otherwise, shares are directly owned, are non-derivative, and each
party has sole voting and investment power with respect to such shares.
2
<PAGE> 5
Beneficial Owners of More than 5% of the Common
Stock of WRI
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS NUMBER OF SHARES OUTSTANDING SHARES(1)
---------------- ---------------- ---------------------
<S> <C> <C>
Crandall S. Connors 2,441,606(2) 20.6%
108 Forest Avenue
Locust Valley, New York 11560
Kerr, Connors Group(3) 2,441,606 20.6%
108 Forest Avenue
Locust Valley, New York 11560
</TABLE>
(1) Outstanding shares for the purpose of calculating these percentages do not
include shares held by or for the account of WRI, but include shares which can
be acquired within sixty (60) days by the exercise of stock options or
conversion of WRI's 10% Convertible Subordinated Debentures ("Debentures").
(2) Includes 580,710 shares directly held, and 185,049 shares of which Mr.
Connors has shared voting or dispositive power. Mr. Connors is a member of the
Kerr, Connors Group (see following footnote). Includes 1,675,847 shares held
by other members of the Kerr, Connors Group with respect to which he disclaims
beneficial ownership.
(3) During November, 1994, WRI received an amended Schedule 13D whereby Kerr,
Connors & Co., its partners John C. Kerr and Crandall S. Connors, and certain
other persons (the "Kerr, Connors Group"), filed with the Securities and
Exchange Commission as a group. Such Schedule 13D stated that the reporting
persons had reached an oral arrangement of unspecified duration with respect to
the voting and transfer of such stock. The ownership reported is based in part
on such Schedule 13D and independent information of WRI, but because of WRI's
recent rights offering to shareholders, the reported ownership is an estimate.
Messrs. Kerr and Connors, and certain other members of such group, were
partners in KCT Associates, Ltd., a limited partnership which was the limited
partner of Waste Recovery Partners, Ltd., of which WRI was a general partner.
Kerr, Connors & Co. was retained 1991 and 1993 as financial advisors to WRI.
Steven E. MacIntyre, a director of WRI, is also a member of this group. For
more detail regarding such partnerships and Kerr, Connors & Co., see Certain
Relationships and Transactions below. The address is that of Kerr, Connors &
Co., and not of all members of such group.
PREFERRED STOCK - As of the record date, WRI had issued 203,580
shares of its 7% Cumulative Preferred Stock, which is non-voting except in
limited circumstances required by statute.
The following table shows all shares of WRI Common Stock beneficially
owned, directly or indirectly, by each member or nominee to the Board of
Directors, and certain executive officers, individually, and by all directors
and executive officers as a group.
Common Stock Beneficially Owned as of July 17, 1995
<TABLE>
<CAPTION>
PERCENT OF OUTSTANDING
NAME NUMBER OF SHARES SHARES(10)
---- ---------------- ---------
<S> <C> <C>
Crandall S. Connors 2,441,606(1) 20.6%
Roger W. Cope 39,227(2) 0.3%
Michael C. Dodge 296,736(3) 2.5%
Thomas L. Earnshaw 139,495(4) 1.2%
Steven E. MacIntyre 2,441,606(5) 20.6%
Allan Shivers, Jr. 421,822(6) 3.6%
Robert L. Thelen 137,598(7) 1.2%
W. David Walls 33,020(8) 0.3%
Directors & Executive Officers as 3,533,096(9) 29.8%
a Group (10 persons)
</TABLE>
3
<PAGE> 6
(1) Includes 580,710 shares directly held, and 185,049 shares of which Mr.
Connors has shared voting or dispositive power. Mr. Connors is a member of the
Kerr, Connors Group (see Beneficial Owners of More than 5% of the Common Stock
of WRI above). Includes 1,675,847 shares held by other members of the Kerr,
Connors Group with respect to which he disclaims beneficial ownership.
(2) Includes 21,727 shares held directly, and 17,500 shares issuable by upon
exercise of stock options.
(3) Includes 279,236 shares held directly, and 17,500 shares issuable upon
exercise of stock options.
(4) Includes 39,495 shares held directly, and 100,000 shares issuable upon
exercise of stock options.
(5) Includes 205,288 shares held directly, 37,010 shares issuable upon
conversion of Debentures, and 2,199,308 shares held by other members of the
Kerr, Connors Group regarding which he disclaims beneficial ownership.
(6) Includes 204,322 shares held directly, and 217,500 shares issuable upon
exercise of stock options.
(7) Includes 83,098 shares held directly, 4,500 shares held of record by his
wife, and 50,000 shares issuable upon exercise of stock options.
(8) Includes 30,520 shares held directly, and 2,500 shares issuable upon
exercise of stock options.
(9) Includes 420,000 shares representing stock options, 222,059 shares
issuable upon conversion of Debentures, and 2,441,606 shares held by the Kerr,
Connors Group, of which Messrs. Connors and MacIntyre are members (see
footnotes 1 and 5 above).
(10) Outstanding shares for the purpose of calculating these percentages do
not include shares held by or for the account of WRI, but include shares which
can be acquired within sixty (60) days by the exercise of stock options or
conversion of Debentures. Except as otherwise indicated in this table, shares
are directly owned, and unless indicated to the contrary the owner has sole
voting and investment power.
ELECTION OF DIRECTORS
At the Annual Meeting, two directors are to be elected as Class C
directors to serve three years, and until their successors shall have been
elected and qualified. Under WRI's Articles of Incorporation, its directors are
divided into three classes, as equal in number as possible, such that
approximately one-third are up for election each year. Directors of the class
with terms expiring are elected for three years. Unless otherwise specified,
the persons named in the enclosed proxy will vote for the election of the
persons named below as nominees. While management has no reason to believe that
any of the nominees will be unable to serve, if for any reason any of the
nominees should become unavailable, proxies will be voted for a substitute
nominee selected by the Board of Directors. The election of directors requires
the affirmative votes of the holders of a majority of the Common Stock present
in person or represented by proxy at the meeting.
<TABLE>
<CAPTION>
NOMINEES
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Roger W. Cope 54 President and Chief Operating Officer of Lone
Star Casino Corporation, Las Vegas, Nevada 1983
Allan Shivers, Jr. 49 Chairman of WRI and Private Investor, Austin,
Texas 1984
</TABLE>
The By-laws of WRI call for a total of eight directors. Mr. Cope and
Mr. Shivers are standing for re-election by the shareholders. There are no
family relationships between any WRI nominee, director or executive officer.
4
<PAGE> 7
Board of Directors
<TABLE>
<CAPTION>
DIRECTOR
Name Class AGE PRINCIPAL OCCUPATION SINCE
---- ----- --- -------------------- -----
<S> <C> <C> <C> <C>
Crandall S. Connors B 47 Partner with the investment banking firm 1994
of Kerr, Connors & Co., Locust Valley, New
York office
Roger W. Cope* C 54 President and Chief Operating Officer of 1983
Lone Star Casino Corporation, Las Vegas,
Nevada
Michael C. Dodge * B 52 Chairman of the law firm of Dodge 1983
Associates, P.C., in Dallas, Texas
Thomas L. Earnshaw A 40 President and Chief Executive Officer of 1990
WRI
Steven E. MacIntyre B 42 Investment banker with D. H. Troob & 1994
Company, a licensed broker/dealer in New
York City
Allan Shivers, Jr. C 49 Chairman of WRI and Private Investor, 1984
Austin, Texas
Robert L. Thelen A 56 Executive Vice President - Engineering of 1990
WRI
W. David Walls * A 51 Chairman, Inside Communications, Inc. 1986
Boulder, Colorado
</TABLE>
* Member of the Compensation Committee
Mr. Crandall S. Connors has been a general partner in the investment
banking firm of Kerr, Connors & Co. since its formation in 1990. Previously,
he was a partner with the NYSE member firm of Shields & Co. since 1987, where
he was president of its real estate subsidiary. From 1976 to 1986, he was
co-founder and CEO of Connors, Sternlieb & Co., specializing in real estate and
oil & gas syndications. Prior to such time, he had served since 1970 in
various management positions with Citicorp N.A. His nomination for the Board
in 1994 was pursuant to an understanding arising from his affiliations with KCT
Associates, Ltd. and with the Company's financial advisors.
Mr. Roger W. Cope has been President and a director of Lone Star
Casino Corporation of Las Vegas, Nevada since January of 1993. Previously, he
was Director-Strategic Planning for the Litton Applied Technology Division of
San Jose, California from April 1991 until December 1992. In 1986 he formed
700 South Peters Corp., a real estate development firm located in New Orleans
of which he was owner and President. From 1981 until 1991 he was President of
Cope Development Corp., a consulting company.
Mr. Michael C. Dodge is an attorney in Dallas, Texas where he has
practiced law for more than fifteen years. In addition to practicing law, Mr.
Dodge is a director of Auto Wax Company, Inc., of Stirling Cooke North American
Holdings, Ltd., and of Stirling Cooke Texas, Inc.
Mr. Thomas L. Earnshaw was elected President and Chief Executive
Officer of the Company in March 1990. Mr. Earnshaw worked for Peat, Marwick,
Mitchell & Co., and in the retail business, before joining the Company when
5
<PAGE> 8
it was founded in 1982. Mr. Earnshaw was elected Vice President - Operations
in 1985 and Executive Vice President - Operations in 1987.
Mr. Steven E. MacIntyre has worked as an investment banker since 1981.
He is Managing Director of D.H. Troob & Company, a licensed broker/dealer,
where he has worked for five years. Prior to joining D.H. Troob & Company, he
was a partner with Rector Street Capital Partners, Inc., investment bankers,
for approximately two years. His nomination for the Board in 1994 was pursuant
to an understanding arising from his affiliations with KCT Associates, Ltd. and
with the Company's financial advisors.
Mr. Allan Shivers, Jr. was elected Chairman of the Board of Directors
of the Company in April 1990. He served as Chairman of Texas State Chamber of
Commerce in 1993, and for over five years has been a partner or officer of
several agricultural, mineral leasing, and real estate enterprises. He is
Chairman of the Seton Fund and trustee for the Institute for Rehabilitation and
Research.
Mr. Robert L. Thelen is one of the Company's original founders,
joining in 1982. He was elected Vice President - Engineering of the Company in
1989, and Executive Vice President-Engineering in 1991. He is responsible for
the design and improvement of plant equipment, plant construction, and
technical assistance to customers.
Mr. W. David Walls spent twelve years in the investment banking
business, ten years of which were with Wood, Gundy, Inc. and two years with the
Company's original underwriters, Balis Zorn & Gerard, Inc. In September, 1987,
he went into business for himself as a private investor, and in August, 1988,
became Chairman of Inside Communications, Inc., a publishing company.
The Board of Directors held eight meetings in 1994, including three
regular meetings. No director failed to attend 75% of the Board or applicable
committee meetings in 1994. The Board appointed a Compensation Committee in
1995 consisting of Messrs. Cope, Dodge and Walls. Among its duties are
executive compensation, and the administration of the stock plans of the
Company, including determination of the grantees, amount of the grants and the
purchase price, if any. This committee was previously designated as the Stock
Option Committee with duties limited to stock plan administration, and it did
not meet in 1994.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. As a company
registered under Section 12 of the Securities Exchange Act of 1934, the
executive officers, directors and beneficial owners of more than 10% of the
Company's Common Stock have reporting requirements pursuant to Section 16(a) of
such act. Based on available information, the Company believes that the
following reporting delinquencies occurred with respect to fiscal year 1994.
Steven E. MacIntyre was late in filing a Form 3; each of Crandall S. Connors,
Anthony LaSalla, Richard Schiff and La Schiff Partners were late in filing a
Form 4. All of the Form 4s involved the same transaction.
EXECUTIVE COMPENSATION
Please refer to Item 11, Executive Compensation, of WRI's 1994 Annual
Report to Shareholders which accompanied this Proxy Statement. Such item
includes a Summary Compensation Table, information on Stock Options and Stock
Appreciation Rights, WRI's 1989 Stock Plan for Employees, WRI's 401K plan,
Compensation of Directors, and Compensation Committee Interlocks and Insider
Participation.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION. Prior
to 1995, WRI had no standing compensation committee, and all such decisions
were made by the full Board with interested executive officers absenting
themselves from deliberation and voting on such matters. At the March 14, 1995
regular Board meeting, the Stock Option Committee was redesignated as the
Compensation Committee and its responsibilities expanded to cover all executive
compensation. For most of 1994, WRI only had three executive officers, with a
fourth executive officer, the Chief Financial Officer, joining WRI at the end
of the year. Because of the small size of both the Company and its executive
staff, WRI does not have a highly structured compensation policy. In order to
have sufficient cash flow to meet operational needs, and to reward executives
commensurate with WRI's success, WRI has emphasized stock options as a form of
compensation. During 1994, the only increases in salary for executive officers
were (i) an increase in the salary of the CEO, Mr. Earnshaw, from $75,000 to
$100,000, and (ii) an increase in the salary of Robert L. Thelen from
6
<PAGE> 9
$62,000 to $75,000. No executives received a bonus in 1994. Executive
officers of WRI are evaluated on the basis of both their individual
performance, as well as WRI's performance. The Chairman is evaluated on his
leadership of the Board, and is paid a consulting fee for his time spent on WRI
business, which includes legislative and regulatory matters. Mr. Thelen is
evaluated for his engineering expertise and its application, as he is
responsible for equipment design and improvement, plant construction, and
technical assistance to customers. The CEO's compensation is generally based
on factors related to his leadership of WRI, as well as his specific
accomplishments and the performance of WRI. At the March 23, 1994 Board
meeting, using the recommendations of an ad hoc committee of outside directors,
the Board approved the above salary increases for Mr. Earnshaw and Mr. Thelen,
but conditioned them upon the successful closing of a bond financing to build
two new plants in Illinois. This $8.875 million financing of Waste Recovery -
Illinois, a partnership of which WRI is the manager, was successfully closed in
September 1994. This financing was a specific goal that was critical to WRI's
expansion plans in the Midwest, and enabled it to fulfill a very significant
supply contract. As a cashless means of rewarding both past and future
performance, in 1993 Messrs. Earnshaw and Thelen were granted stock options
aggregating 85,000 shares and 35,000 shares respectively, of which 30,000 and
10,000 share options, respectively, replaced options that expired in 1993
unexercised. Although no stock options were granted in 1994, this
performance-based compensation is considered an important component of
executive compensation.
The Omnibus Budget Reconciliation Act of 1993 has limited the
deductibility from corporate income of certain executive compensation in excess
of $1 million per year starting in 1994. Because of the relatively modest
compensation level of WRI's executive salary structure, this would not be an
issue except that stock options theoretically have no upper limit for
appreciation. The Board of Directors of WRI is recommending to shareholders at
this Annual Meeting amendments to the Company's existing employee stock plan
that will allow executive compensation arising under this plan to be deductible
under this act. The Board of Directors intends to further study the issue, and
will take additional action to be exempt from such deduction limits if it deems
this to be in the best interest of the shareholders of WRI.
Crandall S. Connors Roger W. Cope Michael C. Dodge
Thomas L. Earnshaw Steven E. MacIntyre Allan Shivers, Jr.
Robert L. Thelen W. David Walls
PERFORMANCE GRAPH. The following graph compares the changes in value
of $100 invested 5 years ago in WRI Common Stock with that of a like investment
in the NASDAQ Market Index and an industry group composed of companies in the
refuse systems SIC code. This industry group includes companies much larger
than WRI with significantly different purposes, such as Browning-Ferris and
Waste Management, but was the closest peer group to that of WRI for which
statistics could be reasonably obtained. To the knowledge of WRI, there are no
companies in such industry group whose primary business is scrap tire
recycling. Likewise, NASDAQ was the closest broad market index for which
statistics were available to WRI. WRI was delisted from NASDAQ in 1990 for
failing to meet its capital and surplus requirements. The year-end values of
each investment are calculated by adding dividends, if any (and assuming
reinvestment thereof), to the difference between the Common Stock price at the
beginning and end of the measurement period, and dividing such sum by the price
at the beginning of the measurement period. The calculations used in plotting
the graph are also set out below.
7
<PAGE> 10
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
OF WRI, INDUSTRY GROUP AND NASDAQ MARKET INDEX
[GRAPH]
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Waste Recovery, Inc. Industry Index NASDAQ Market Index
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 122.68 89.42 81.12
1991 74.23 93.52 104.14
1992 109.28 88.27 105.16
1993 28.87 64.21 126.14
1994 35.05 60.44 132.44
</TABLE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
This subject matter is discussed under Item 13 of the Company's 1994
Annual Report to Shareholders which accompanied this Proxy Statement, and
reference is made to such Item 13.
PROPOSAL TO INCREASE SHARES RESERVED UNDER THE WRI 1989 STOCK
PLAN FOR EMPLOYEES AND LIMIT INDIVIDUAL GRANTS THEREUNDER
The shareholders are being requested to make two amendments to the WRI
1989 Stock Plan for Employees (the "Plan") which was approved by WRI's
shareholders at the 1989 Annual Meeting. Under the Plan, employees may receive
grants of nonqualified stock options, incentive stock options, stock
appreciation rights ("SARs"), or restricted stock. In 1989, a total of 550,000
shares of WRI Common Stock were reserved for issuance under the Plan. The
purpose of the Plan is to provide incentive for key employees to continue their
services at WRI, to increase the employees' interest in WRI, and to provide a
means through which WRI may attract able persons to its employ. Currently,
there are approximately 68 employees eligible to participate in the Plan. The
proposed Plan amendments before the shareholders are:
(1) Subject to shareholder approval, the Board has approved the
reservation of an additional 1,000,000 shares of Common Stock for
issuance under the Plan, which would bring the total number of shares
of Common Stock reserved for issuance since inception of the Plan to
1,550,000. The amendment to increase the number of shares reserved is
necessary because of the growth of WRI. In 1989, WRI had
approximately 80 employees. Today, WRI and its affiliates have
approximately 200 employees, and WRI continues to evaluate worthy
expansion opportunities. Moreover, almost all of the shares reserved
under the Plan have been granted.
8
<PAGE> 11
(2) The second amendment to the Plan deals with the deductibility
of executive compensation. The Omnibus Budget Reconciliation Act of
1993 placed limits on the deductibility from corporate income of
certain executive compensation in excess of one million dollars per
year starting in 1994. Because of the relatively modest compensation
level of WRI's executive salary structure, this would not be an issue
except that stock options and SARs conceivably have no upper limit for
appreciation. The Internal Revenue Service has promulgated
regulations whereby certain performance-based compensation is exempt
from the limitations on deductibility. These regulations provide that
awards of stock options and SARs offered at fair market value pursuant
to a shareholder approved plan that sets a maximum limit on the number
of shares that can be granted to a plan participant during a specified
period of time are exempt from the limitations on deductibility.
Since the Plan has already been approved by the shareholders, in order
for such grants issued to WRI executives at fair market value to be
exempt from the limits on deductibility, the Plan must be amended to
add such an annual limitation. If this proposal is approved, the
following Section will be added to the Plan:
26. LIMIT ON GRANTS. The maximum number of shares of Common
Stock with respect to which grants of stock options and stock
appreciation rights can be made to any one participant in a
calendar year is 300,000.
Benefits of the Amended Plan
The benefits pursuant to an amended Plan to various persons and groups
cannot be determined at this time. During 1994, no grants of stock options
were made by WRI to any person. Consequently, neither the CEO, Mr. Earnshaw,
or other employees, current executive officers, current non-employee directors,
nominees for election as director, or any associates of such persons, received
stock option grants that year. To date, no awards of SARs or restricted stock
have been made pursuant to the Plan. The fair market value of WRI's Common
Stock was $1.75 as of July 7, 1995.
Summary of Plan
The Plan provides for the granting of incentive stock options
("ISOs"), nonqualified stock options, SARs and restricted stock to selected
employees. Originally, a total of 550,000 shares of WRI Common Stock were
reserved for issuance from either the authorized but unissued, or treasury
stock of WRI.
Administration The Plan has been administered by the Stock Option
Committee (now the Compensation Committee and hereinafter called the
"Committee") comprised of disinterested directors. The Committee has full and
final authority, subject to the provisions of Plan, to determine the number of
shares granted, the recipients, and other terms not inconsistent with the Plan.
During the employee's lifetime, options and SARs granted to an employee may be
exercised only by that employee. The Board may amend the Plan, subject to
limitations set forth below.
Stock Options By the terms of the Plan, no options can be granted
for more than a 10 year term, and all ISOs must meet the requirements of
Section 422 of the Internal Revenue Code. The aggregate fair market value on
the date of grant of an ISO shall not exceed $100,000 in the year in which the
options are first exercisable. ISOs will not be granted to any individual, who
at the time of grant, owns stock possessing more than 10% of the total combined
voting power of all classes of WRI stock, unless the option price is at least
110% of the fair market value and the option is not exercisable more than five
years from the date of grant. No option can be granted at a price of less than
50% of the fair market value of WRI's Common Stock on the date of grant, and
ISOs must be 100% thereof. Fair market value is determined by the Committee
using any reasonable valuation method. Payment for shares upon exercising an
option, or purchasing restricted stock, shall be made in full at the time, in
cash, or at the Committee's discretion, in Common Stock of WRI owned by the
participant, valued as of the close of business, on the immediately preceding
business day, and such other forms of consideration, or any combination of the
foregoing, having the current value equal to the option or purchase price as
may be suitable to the Committee.
Options granted under the Plan may not be transferred other than by
will or by the laws of descent and distribution. Each option granted typically
requires the employee to remain in the continuous employ of WRI from the
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<PAGE> 12
date of grant until the right to exercise accrues. Options are exercisable at
such times and in such amounts as determined by the Committee, and the right to
purchase is cumulative.
Stock Appreciation Rights SARs may be granted only to the extent
that the aggregate number of units covered by all SARs granted does not exceed
the number of shares available under the Plan. An SAR shall entitle the
grantee thereof to receive cash from WRI upon exercise of such SAR equal to the
increase of (i) the fair market value of the Common Stock of WRI on the date of
exercise, times the number of units with respect to which the SAR is then being
exercised, over (ii) the fair market value of the Common Stock of WRI on the
day such SAR was awarded, times the number of units with respect to which the
SAR is then being exercised.
Restricted Stock A restricted stock grant typically is a transfer,
either with or without consideration, of stock having certain restrictions.
Usually the grantee will have all indices of ownership, such as the right to
vote and receive dividends, if any, except that the stock is subject to
forfeiture under certain conditions, and frequently disposition or transfer of
ownership cannot be made until the restrictions lapse. Subject to the
provisions of the Plan, the Committee has full and final authority to determine
terms and conditions of each restricted stock grant including specification of
(a) the consideration to be received by WRI, if any, (b) the nature and extent
of restrictions upon disposition of shares acquired, (c) the circumstances
under which all or part of any shares acquired pursuant to grants may be
required to be forfeited and surrendered to WRI, and the consideration, if any,
to be paid by WRI for any such shares forfeited and surrendered, and (d) the
extent and times of lapse of such restrictions or risks of forfeiture.
Amendments The Plan may be amended by the Board of Directors of WRI
without the approval of its shareholders, except that any amendment that would
cause the Plan to no longer be in compliance with Rule 16b-3 of the Securities
Exchange Act of 1934, or its successor rule or regulation, must be approved by
the shareholders. Consequently, amendments to the Plan made without
shareholder approval cannot materially increase benefits to executive officers,
modify eligibility requirements, increase the authorized securities, or
increase costs to WRI.
Share Adjustment The number of shares subject to any outstanding
stock option or SAR, and the number of shares reserved for issuance under the
Plan, are subject to adjustment for stock splits, stock dividends, corporate
reorganizations, recapitalizations, combinations, mergers or other events
involving a change in the number and kind of the outstanding Common Stock of
WRI.
Tax Features
Under federal income tax laws as presently in effect, an employee will
not recognize taxable income upon the grant of an option under the Plan, or
upon exercise of an ISO; however, the excess of the fair market value over the
option price of stock received upon exercise of an ISO will be a tax preference
item for purposes of determining the employee's alternative minimum tax.
Generally, if stock acquired upon exercise of an ISO is disposed of by an
employee within two years after the option is granted, or within one year after
the option is exercised, the employee will then recognize ordinary income in an
amount equal to the excess of the value of the shares at the time the option is
exercised over the option price, or, if less, the excess of the amount received
by the employee on the disposition of such shares over the option price. Any
excess of the amount received on the disposition of the shares over the value
of such shares at the time the option is exercised will be taxed to the
employee as a capital gain. WRI will be allowed an income tax deduction equal
to the amount of any ordinary income so recognized by the employee. If the
employee disposes of this stock subsequent to the applicable holding periods,
any gain recognized on such disposition will be taxable as capital gain, and
WRI will not be entitled to any income tax deduction in respect of such
disposition.
Upon exercise of a nonqualified option, the employee generally will
realize taxable income in an amount equal to the excess of the fair market
value of the shares purchased, at the time of exercise, over the option price.
Ordinarily, the recipient of a restricted stock grant will not
recognize taxable income until such time as the restrictions lapse. Upon lapse
of the restrictions, the grantee will recognize ordinary income equal to the
then fair market value of the shares. The Internal Revenue Code permits the
grantee to elect upon receipt of a restricted stock grant to recognize ordinary
income at the current fair market value. Cash received under an SAR will be
ordinary income in the year of receipt.
10
<PAGE> 13
An employee's tax basis for shares acquired upon exercise of a
nonqualified option or under a restricted stock grant will generally be the
fair market value of the shares on the date their acquisition is taxable to the
employee and the holding period for tax purposes of such shares will commence
on such date.
With respect to an SAR, or shares acquired under a restricted stock
grant or from the exercise of a nonqualified option for which an employee
recognizes ordinary income, WRI will be allowed an income tax deduction equal
to the amount of related ordinary income of the employee in the taxable year so
recognized. Such ordinary income is subject to the withholding provisions of
the Internal Revenue Code.
Board Recommendation
The Board considers awards under the Plan to be an important part of
employee compensation as they give employees a direct interest in the financial
success of WRI. Moreover, no cash outlay is required by WRI at the time of
these grants. The proposed amendments to the Plan will also enhance executive
compensation. The Board feels that executives who have a significant
investment through shares of WRI can better represent the viewpoint of other
shareholders whom they are charged with representing. Approval of this
proposal to increase the number of shares under the WRI 1989 Stock Plan for
Employees, and limit individual grants thereunder, requires the affirmative
vote of a majority of the Common Stock present in person or by proxy, at the
meeting. Shareholders must vote either for both amendments, or against both of
them, or abstain, as both amendments comprise a single proposal. If this
proposal is not approved, no awards for additional shares will be made beyond
the existing Plan authorization. THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF
THIS PROPOSAL.
PROPOSAL TO APPROVE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has designated Price Waterhouse LLP to serve as
independent public accountants of WRI for the fiscal year ending December 31,
1995, subject to approval by WRI's shareholders. Price Waterhouse LLP has
conducted WRI's audit since 1992. Price Waterhouse LLP will have a
representative at the meeting, and does not intend to make a statement, but
will be available for questioning.
Approval of the selection of Price Waterhouse LLP as independent
public accountants for WRI for the 1995 fiscal year requires the affirmative
vote of a majority of the Common Stock present, in person or by proxy, at the
meeting. THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THIS PROPOSAL.
OTHER MATTERS
The management of WRI is not aware of any matters other than those set
forth in this Proxy Statement which will be presented for action at the
meeting. If any other matters should properly come before the meeting, the
persons authorized under management's proxies shall vote and act with respect
thereto according to their best judgment.
INCORPORATION BY REFERENCE
At certain places in this Proxy Statement, you have been requested to
refer to specified items in WRI's 1994 Annual Report to Shareholders which is
furnished herewith. Accordingly, Items 11 and 13 of the Annual Report to
Shareholders are incorporated by reference herein.
JOHN E. COCKRUM
Secretary
Dated: July 21, 1995
11
<PAGE> 14
WASTE RECOVERY, INC.
1989 STOCK PLAN FOR EMPLOYEES
Effective March 6, 1989, the Board of Directors of Waste Recovery, Inc. (the
"Company") adopted the following 1989 Stock Plan for Employees:
1. PURPOSE. The purpose of this plan is to provide certain key employees
of the Company, and its Subsidiaries, with proprietary interest in the
Company through the granting of an option, stock, or other stock right
which will:
(a) increase the interest of the employees in the Company's
welfare;
(b) furnish an incentive to the employees to continue their
services for the Company; and
(c) provide a means through which the Company may attract able
persons to enter its employ.
2. DEFINITIONS. For the purposes of this Plan, unless the context
requires otherwise, the following terms shall have the meanings
indicated:
(a) "Plan" means this Waste Recovery, Inc. 1989 Stock Plan for
Employees, as amended from time to time.
(b) "Company" means Waste Recovery, Inc., a Texas corporation.
(c) "Board" means the Board of Directors of the Company, or the
committee or person it appoints as its duly authorized
representative. A majority of the Board, and a majority of
its directors exercising discretion pursuant to this Plan,
shall consist of directors that are not, and for one year
prior to exercising any discretion, have not been eligible for
selection as a person to whom Options, Restricted Stock
Grants, or SARs may be allocated or granted under this Plan,
or any other plan of the Company or its subsidiaries entitling
participants to acquire stock, stock options or rights
relating thereto. The same such criteria shall apply to all
members of a committee to which the Board delegates authority
hereunder.
(d) "Common Stock" means the Common Stock which the Company is
currently authorized to issue, or may in the future be
authorized to issue (as long as the Common Stock varies from
that currently authorized, if at all, only in amount of par
value).
(e) "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of the
granting of the Option, each of the corporations other than
the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the
chain, and "Subsidiaries" means more than one of any such
corporation.
(f) "Parent" means any corporation in an unbroken chain of
corporations ending with the Company if, at the time of
granting of the Option, each of the corporations other than
the Company owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the
other corporations in the chain.
(g) "Option Period" means the period during which an Option may be
exercised.
(h) "Option" or "Options" mean Incentive Stock Options,
nonqualified stock options, or other stock options granted
pursuant to this Plan.
(i) "Incentive Stock Option" means a stock option granted pursuant
to Section 422A of the Internal Revenue Code.
(j) "Stock Appreciation Right" ("SAR") means the stock
appreciation right granted pursuant to this Plan.
(k) "Restricted Stock Grant" means a restricted stock grant made
pursuant to this Plan.
3. ADMINISTRATION. The Plan will be administered by the Board.
4. PARTICIPANTS. The Board shall, from time to time, select the
particular employees of the Company and its Subsidiaries to whom
Options, Restricted Stock, or SARs are to be granted, and who will,
upon such grant, become participants in the Plan.
5. STOCK OWNERSHIP LIMITATION. No Incentive Stock Option may be granted
to an employee who owns more than 10% of the total combined voting
power of all classes of stock of the Company or its
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<PAGE> 15
Parent or Subsidiaries. This limitation will not apply if the option
price is at least 110% of the fair market value of the stock subject to
the Option at the time the Option is granted, and the Option is not
exercisable more than five years from the date it is granted.
6. SHARES SUBJECT TO PLAN. The Board shall reserve for the purposes of
this Plan 550,000 shares of Common Stock of the Company, which number
shall be for grants of Options, Restricted Stock and SARs pursuant to
this Plan ("grants"), but this number may be adjusted, if deemed
appropriate by the Board, as provided in paragraph 15 hereof. Shares
for grants hereby may be made available from either authorized but
unissued Common Stock or Common Stock held by the Company as treasury
stock. Shares which by reason of the expiration of an Option or
Restricted Stock grant, or otherwise, are no longer subject to purchase
pursuant to this Plan, may be re-offered under this Plan.
7. LIMITATION ON AMOUNT. The aggregate fair market value (determined at
the time Incentive Stock Options are granted by the Board) of the
shares of Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by the optionee during any calendar
year (under all Plans of the Company, its Parent or Subsidiaries) shall
not exceed $100,000.
8. ALLOTMENT OF SHARES. The Board shall determine the number of shares of
Common Stock to be offered from time to time by grant of Restricted
Stock, SARs or Options to employees of the Company or its Subsidiaries.
Such a grant to an employee shall not be deemed either to entitle the
employee to, or to disqualify the employee from, participation in any
other grant under this Plan.
9. GRANT OF OPTIONS. All Options under this Plan shall be granted by the
Board. The grant of Options shall be evidenced by stock option
agreements containing such terms and provisions as are approved by the
Board, but not inconsistent with this Plan, including provisions which
may be necessary to assure that an Incentive Stock Option qualifies
under Sec. 422A of the Internal Revenue Code. The Company shall
execute stock option agreements upon instructions from the Board. This
Plan shall be submitted to the Company's stockholders for approval
within 12 months before or after the date this Plan is adopted by the
Board. The Board may grant Options, Restricted Stock, or SARs under
this Plan prior to the time of stockholder approval, which grants will
be effective when made, but if for any reason the stockholders of the
Company do not approve this Plan within one year from the date of
adoption of this Plan by the Board, all grants made under this Plan
will be terminated and of no effect, and no Option, Restricted Stock
Grant or SAR may be exercised in whole or in part prior to such
stockholder approval.
10. OPTION PRICE. Except as otherwise provided herein, the Board may set
any Option price per share, at its discretion, but in no event shall
the Option price be less than fifty percent (50%) of the fair market
value of the Common Stock on the date of grant. For Incentive Stock
Options, the option price per share shall not be less than 100% of the
fair market value per share of the Common Stock on the date the
Incentive Stock Option is granted. The Board shall determine the fair
market value of the Common Stock on the date of grant, and shall set
forth the determination in the Incentive Stock Option agreement, using
any reasonable valuation method. Fair market value shall be determined
without regard to any restriction other than a restriction which, by
its terms, will never lapse.
11. OPTION PERIOD. The Option Period will begin on the date the Option is
granted, which will be the date the Board authorizes the Option, unless
the Board specifies a later date. No Option may terminate later than
ten (10) years from the date the Option is granted. The Board may
provide for the exercise of Options in installments and upon such
terms, conditions and restrictions as it may determine. The Board may
provide for termination of the Option in the case of termination of
employment or any other reason.
12. OPTION RIGHTS IN EVENT OF DEATH. If a participant dies prior to
termination of his right to exercise an Option in accordance with the
provisions of his stock option agreement without having totally
exercised the Option, the Option may be exercised, to the extent of the
shares with respect to which the Option could have been exercised by
the participant on the date of the participant's death, by the
participant's estate or by the person who acquired the right to
exercise the Option by bequest or inheritance or by reason of the death
of the participant, provided the Option is exercised prior to the date
of its expiration or 180 days after the date of the participant's
death, whichever first occurs.
13. PAYMENT. Payment for shares purchased upon exercising an Option, or
purchasing Restricted Stock, shall be made in full at the time of
exercise or purchase, in cash, or, in the Company's discretion, in
Common Stock of the Company owned by the participant, valued as of the
close of business on the immediately preceding business day, in such
other forms of consideration having a current value equal to the option
or purchase price as may be suitable to the Board, or any combination
of the foregoing. With respect to Options, no shares may be issued
until full payment of the purchase price therefor has been made, and a
participant will have none of the rights of a stockholder until shares
are issued to him.
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<PAGE> 16
14. EXERCISE OF OPTION. Options granted under this Plan may be exercised
during the Option Period, at such time, in such amounts, in accordance
with such terms and subject to such restrictions as are set forth in
the applicable stock option agreements. In no event may an Option be
exercised or shares of Common Stock be issued pursuant to an Option if
any necessary listing of the shares on a stock exchange has not been
accomplished.
15. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. In the event that a dividend
or stock split shall be hereinafter declared upon the Common Stock of
the Company, payable in shares of Common Stock of the Company, the
number of shares of Common Stock then subject to any such Option and
the number of shares reserved for issuance pursuant to the Plan, but
not yet covered by an Option or a grant, shall be adjusted by adding to
each such share the number of shares which would be distributable
thereon if such share had been outstanding on the date fixed for
determining shareholders of the Company entitled to receive such stock
dividend or stock split. In the event that the outstanding shares of
Common Stock of the Company shall be changed into or exchanged for a
different number of kind of shares of stock or other securities of the
Company, or of another corporation, whether through reorganization,
recapitalization, stock split-up, combination of shares, merger or
consolidation, then there shall be substituted for each share of Common
Stock subject to any such Option and for each share of Common Stock
reserved for issuance pursuant to the Plan, but not yet covered by an
Option or other grant, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall be
so changed or for which each such share shall be exchanged. In the
event there shall be any change, other than as specified in this
paragraph 15, in the number or kind of outstanding shares of Common
Stock of the Company or of any stock or other securities into which
Common Stock shall have been changed or for which it shall have been
exchanged, then if the Board shall in its sole discretion, determine
that such change equitably requires an adjustment in the number or kind
of shares theretofore reserved for issuance pursuant to the Plan, but
not yet covered by an Option or other grant, and of the shares then
subject to an Option or Options, such adjustment shall be made by the
Board and shall be effective and binding for all purposes of the Plan
and each option agreement pursuant thereto. In the case of any
substitution or adjustment as provided in this paragraph 15, the option
price in each such stock option agreement for each share covered
thereby prior to such substitution or adjustment will be the option
price for all shares of stock or other securities which shall have been
substituted for such share or to which such share shall have been
adjusted pursuant to this paragraph 15. No adjustment or substitution
provided for in this paragraph 15 shall require the Company in any
stock option agreement to sell a fractional share, and the total
substitution or adjustment with respect to each such stock option
agreement shall be limited accordingly.
16. NON-ASSIGNABILITY. Options, SARs, or any similar right may not be
transferred other than by will or by the laws of descent and
distribution. During a participant's lifetime, Options and SARs
granted to a participant may be exercised only by that participant.
17. SARS.
(a) Subject to the provisions of the Plan, the Board shall have
full and final authority to determine the persons to whom SARs
shall be granted, the number of units to be covered by each
SAR, and the other terms and conditions of each particular
SAR, including, without limitation, provisions specifying the
time and extent to which each particular SAR (or any portion
thereof) may be exercised. SARs may be granted hereunder only
to the extent that the aggregate number of units covered by
all SARs granted hereunder does not exceed the number of
shares specified in paragraph 6 hereof (with regard to any
adjustment under paragraph 15 hereof). The term "all SARs
granted hereunder" shall not include any SARs that expire or
are terminated unexercised as to any units covered thereby,
but such term shall include any SARs that have been exercised,
including SARs cancelled because of the exercise of a tandem
stock option/SAR.
(b) An SAR shall entitle the grantee thereof to receive cash from
the Company upon exercise of such SAR equal to the increase of
(i) fair market value of the Common Stock of the Company on
the principal stock exchange upon which it is traded (or the
NASDAQ) on the date of exercise, or, if there is no such fair
market value on such date, the fair market value of such stock
on such exchange (or the NASDAQ) on the last preceding day on
which there was such a fair market value, times the number of
units with respect to which the SAR is then being exercised,
over (ii) the fair market value of the Common Stock of the
Company on the principal stock exchange (or the NASDAQ) upon
which it is traded on the day such SAR was awarded, or, if
there was no such fair market value on such day, the fair
market value of such stock on such exchange (or NASDAQ) on the
date last preceding such day on which there was such a fair
market value, times the number of units with respect to which
the SAR is then being exercised, subject to, and reduced by,
all applicable withholding and similar taxes. Adjustments
shall be made in SAR units, and the fair market values
thereof, in accordance with paragraph 15 hereof.
Page - 3
<PAGE> 17
(c) A tandem Incentive Stock Option/SAR, where the Incentive Stock
Option and the SAR are granted together and the exercise of
one affects the right to exercise the other, may be granted
only if the SAR meets the following requirements:
(i) the SAR will expire no later than the expiration of
the underlying Incentive Stock Option;
(ii) the SAR may be for no more than 100 percent of the
difference between the exercise price of the
underlying Incentive Stock Option and the market price
of the stock subject to the underlying Incentive Stock
Option at the time the SAR is exercised;
(iii) the SAR is transferable only when the underlying
Incentive Stock Option is transferable, and under the
same conditions;
(iv) the SAR may be exercised only when the underlying
Incentive Stock Option is eligible to be exercised;
(v) the SAR may be exercised only when the market price of
the stock subject to the underlying Incentive Stock
Option exceeds the exercise price of such Option; and
(vi) Neither the SAR nor any tandem stock option shall be
exercised during the first six months after their
grant, except that this limitation shall not apply in
the event of disability of the participant prior to
the expiration of the six month period.
(d) Any election by an officer or director to exercise all or part
of an SAR for cash, shall be made during the "window period"
beginning on the third business day following the date of
release to the public of the Company's financials and ending
on the twelfth business day following such date.
18. RESTRICTED STOCK GRANTS. Subject to the provisions of the Plan, the
Board shall have full and final authority to determine the persons to
whom Restricted Stock Grants shall be made, the number of shares to be
granted in each case, the consideration to be received by the Company
for the issuance or transfer of shares, and the other terms and
conditions of each particular grant including, without limitation,
provisions, in all cases consistent with the terms of the Plan, (a)
specifying the consideration to be received by the Company for shares
to be granted pursuant to the Plan, provided that the purchase price,
if any, shall be no more than 50% of the fair market value of the
underlying stock on the date of grant, (b) imposing, and specifying the
nature and extent of, restrictions upon disposition of shares acquired
pursuant to grants hereunder, (c) specifying the circumstances under
which all or part of any shares acquired pursuant to grants hereunder
may be required to be forfeited and surrendered to the Company and the
consideration, if any, to be paid by the Company for any such shares
forfeited and surrendered, and (d) specifying the extent and times of
lapse of such restrictions or risks of forfeiture. In addition, the
Board shall have full and final authority to determine and fix the
other terms and conditions of each particular grant and to authorize
and cause to be effected the issuance or transfer of shares pursuant to
grants made under the Plan. Any shares so issued or transferred
pursuant to grants made under the Plan shall, upon such issuance or
transfer, be duly issued, validly outstanding, fully paid, and
non-assessable.
19. WITHHOLDING TAX. Under circumstances in which the Company is required
to withhold any tax pursuant to the exercise of an Option, or other
grant pursuant to this Plan, the Company may require, in its agreement
with the participant, or otherwise, that the participant make
arrangements satisfactory to the Board to ensure that the amount
required to be withheld is made available to the Company for timely
payment. If agreeable to the Board, the participant shall be allowed
to deliver shares of the Company's Common Stock previously owned by the
participant, or shares from the exercise of an Option, for the payment
of such withholding tax.
20. SURRENDER, COMBINATION GRANTS. At the Board's sole discretion, a
participant may be given an election to surrender an Option, Restricted
Stock Grant, SAR, or other grant, in exchange for a new grant. Grants
may be made under the Plan singly, in combination, or in tandem,
however tandem grants will not be permitted for Incentive Stock
Options, except with SARs.
21. ANNULMENT OF GRANT. In the event that a participant shall be
terminated for cause, or be found to be in competition with the
Company, either finding to be within the sole discretion of the Board,
then any grant pursuant to this Plan may be annulled by the Board.
22. INTERPRETATION. The Board shall interpret this Plan and shall
prescribe such rules in connection with the operation of this Plan as
it determines to be advisable for the administration of this Plan. The
Board may rescind and amend its rules.
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<PAGE> 18
23. AMENDMENT OR DISCONTINUANCE. This Plan may be amended or discontinued
by the Board without the approval of the stockholders of the Company,
except that any amendment that would cause the Plan to no longer be in
compliance with rule 16b-3 of the Securities Exchange Act of 1934 or
its successor rule or regulation, must be approved by the stockholders
of the Company.
24. EFFECT OF PLAN. Neither the adoption of this Plan nor any action of
the Board shall be deemed to give any officer or employee any right to
be granted an Option to purchase Common Stock of the Company, or any
other rights, except as may be evidenced by a stock option agreement,
or other agreement, or any amendment thereto, duly authorized by the
Board and executed on behalf of the Company, and then only to the
extent, and on the terms and conditions, expressly set forth therein.
25. TERM. Unless sooner terminated by action of the Board, this Plan will
terminate on March 6, 1999. The Board may not grant Options or make
other grants under this Plan after that date, but Options granted or
other grants made before that date will continue to be effective in
accordance with their terms.
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PRELIMINARY COPY --
<TABLE>
<C> <S>
P
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O
X
Y
<CAPTION>
WASTE RECOVERY, INC.
<C> <S>
The undersigned hereby (1) acknowledges receipt of the Notice dated July 21, 1995, of the Annual Meeting of Shareholders
of Waste Recovery, Inc. (the
"Corporation") to be held on Monday, August 14, 1995, at 10:00 a.m., Dallas, Texas time, in the offices of the Corporati
on at 309 South Pearl Expressway, Dallas,
Texas, and the Proxy Statement also dated July 21, 1995, in connection therewith (herein called the "Proxy Statement"),
and (2) constitutes and appoints Robert
L. Thelen and Thomas L. Earnshaw, and each of them, as his or her attorneys and proxies, with full power of substitution
and revocation to each, for and in the
name, place and stead of the undersigned, to vote and act as designated below with respect to all of the shares of Commo
n Stock of the Corporation standing in
the name of the undersigned, or with respect to which the undersigned is entitled to vote and act, at said meeting and a
ny adjournment(s) thereof.
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) / / to vote for all nominees listed below / /
ROGER W. COPE ALLAN SHIVERS, JR.
P
R (INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the space provided
below.)
O -------------------------------------------------------------------------------------------
X
Y 2. PROPOSAL TO INCREASE SHARES AND LIMIT GRANTS UNDER THE 1989 STOCK PLAN FOR EMPLOYEES as set forth in Proxy Statement.
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO APPROVE THE SELECTION OF INDEPENDENT ACCOUNTANTS for 1995 as set forth in the Proxy Statement.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meet
ing.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL PROPOSALS
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
(CONTINUED FROM OTHER SIDE)
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3.
Dated: , 1995 ----------------------------------
----------------------------------
PLEASE SIGN HERE
Please date this proxy and sign your
name exactly as it appears hereon.
Where there is more than one owner,
each should sign. When signing as an
agent, attorney, administrator,
executor, guardian, or trustee,
please add your title as such. If
executed by a corporation, the proxy
should be signed by a duly
authorized officer who should
indicate his title. Please date,
sign, and mail this proxy card in
the enclosed envelope. No postage is
required if mailed in the United
States.
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