UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 2)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from . . . . . . to . . . . . . . . . . .
Commission file number 0-11264
-------
WESTERN WASTE INDUSTRIES
(Exact name of registrant as specified in its charter)
California 95-1946054
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21061 South Western Avenue
Torrance, California 90501
- ------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 328-0900
THE PURPOSE OF THIS AMENDMENT IS TO AMEND THE FOLLOWING ITEMS OF
WESTERN WASTE'S ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR ENDED JUNE 30,
1994:
PART III
Item 10 - Directors and Executive Officers
Item 11 - Executive Compensation
Item 12 - Security Ownership of Certain Beneficial Owners and
Management
Item 13 - Certain Relationships and Related Transactions
Total number of pages in this document: 15
-1- <PAGE>
Item 10. Directors and Executive Officers of Registrant
----------------------------------------------
DIRECTORS. The following table sets forth the persons who are
currently serving on the Company's Board of Directors.
Served as Expiration
Position and Offices a Director of Present
Name ith the Company Since Age Term
- ------------------- ---------------------- --------- --- ----------
CLASS I
-------
Ramsey G. DiLibero Chief Operating Officer 1993 66 1995
<F1>
John W. Simmons Director <F1><F2><F3> 1983 76 1995
Savey Tufenkian Executive Vice President 1964 65 1995
and Secretary-Treasurer
<F1><F3><F4><F5>
CLASS II
--------
Harry S. Derbyshire Director <F4> 1983 69 1994
Dr. A.N. Mosich Director <F1><F2><F3><F6> 1980 66 1994
<F5>
Kosti Shirvanian Chairman of the Board of 1964 64 1994
Directors and President
<F1><F4><F5>
[FN]
<F1> Member of Management Committee
<F2> Member of Audit Committee
<F3> Member of Compensation Committee
<F4> Member of Nominating Committee
<F5> Kosti Shirvanian and Savey Tufenkian are brother and sister.
<F6> Dr. Mosich served as a director of the Company from 1980 to 1983,
when he resigned due to personal business. He was re-elected in
September 1984.
Background of Directors
- -----------------------
Mr. DiLibero served as Vice Chairman of Browning-Ferris International
from 1988 until he retired in August 1989. He was the President, Chief
Operating Officer and Director for CECOS International, Inc., a wholly
owned hazardous waste subsidiary of Browning Ferris Industries, Inc. from
1985 to 1988. Prior to 1985, he served as President and Chief Operating
Officer of BFI International and SCA Services, Inc., both of which were
engaged in the waste management business. Mr. DiLibero is a member of the
Board of Directors of Unitas National Bank in Chambersburg, Pennsylvania.
-2- <PAGE>
Mr. Simmons was elected a director in 1983. He also serves as a
director for Jacobs Engineering Group, Inc., an engineering and
construction firm and U.G.I. Corporation, a company engaged in the
operation of utilities and the distribution of propane. Mr. Simmons
retired in 1983 as a Senior Vice President of Atlantic Richfield Company
and serves as a consultant to various businesses.
Ms. Tufenkian has served as Executive Vice President since 1988 and
Secretary-Treasurer since the Company's incorporation in 1964. She
assisted in the establishment of the Company in 1955.
Mr. Derbyshire was elected a director in 1983. Since January 1987, he
has served as Chairman of the Board of J.C. Carter Company, Inc., a
manufacturer of aerospace products. Prior to his retirement in 1985, he
was an Executive Vice President of Whittaker Corporation. Mr. Derbyshire
also serves as a Director of National Technical Systems, Inc., an operator
of high technology testing laboratories.
Dr. Mosich served as a director from 1980 to 1983. He resigned in
1983 due to personal business and was re-elected a director in September
1984. He was a Professor of Accounting at the University of Southern
California. He retired in 1993. Dr. Mosich is also an author, consultant
and lecturer.
Mr. Shirvanian has served as Chairman of the Board of Directors and
President of Western Waste Industries since the Company's incorporation in
1964. He founded the Company in 1955 as a sole proprietorship.
EXECUTIVE OFFICERS. The following table sets forth the persons who
are currently serving as executive officers of the Company:
Name Age Present Office or Position<F1>
- ------------------------- --- ------------------------------
Kosti Shirvanian <F2><F3> 64 Chairman of the Board and
President
Ramsey G. DiLibero <F3> 66 Chief Operating Officer
Savey Tufenkian <F2><F3> 65 Executive Vice President and
Secretary-Treasurer
Lawrence F. McQuaide <F3> 46 Executive Vice President,
Finance
[FN]
<F1> Officers serve at the discretion of the Board of Directors.
<F2> Kosti Shirvanian and Savey Tufenkian are brother and sister.
<F3> Member, Management Committee. The Committee, composed of certain
officers and two outside board members, coordinates Company
operations.
-3- <PAGE>
Background of Executive Officers
- --------------------------------
Mr. McQuaide joined the Company in 1984, as Vice President, Finance.
In 1988, he was elected to serve as Executive Vice President, Finance.
Prior to joining the Company, Mr. McQuaide, a Certified Public Accountant,
was a Senior Manager with Price Waterhouse, where he had served for eleven
years.
Item 11. Executive Compensation
----------------------
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
has set forth below the components of the Company's executive officer
compensation programs and has described the basis on which 1994
compensation decisions were made by the Committee with respect to the
executive officers of the Company, including the executive officers that
are named in the compensation table.
Compensation Philosophy and Objectives
- --------------------------------------
In creating its compensation programs, the Company followed a
philosophy that executive compensation is directly linked to continuous
improvements in corporate performance and increases in shareholder value.
The following objectives have been utilized by the Committee as guidelines
for its compensation decisions:
- Compensation should be meaningfully related to the value created for
shareholders.
- Compensation programs should support the short and long-term strategic
goals and objectives of the Company.
- Compensation programs should reflect and promote the Company's values,
and reward individuals for outstanding contributions to the Company's
success.
- Short and long-term compensation play a critical role in attracting
and retaining well qualified executives.
Elements of Compensation Programs
- ---------------------------------
At least annually, the Committee reviews the Company's executive
officer compensation programs to ensure that pay levels and incentive
opportunities are competitive and reflect the performance of the Company.
The three basic components of the program, each of which is intended to
serve the overall compensation philosophy, are as follows:
-4- <PAGE>
BASE SALARY - Base salary levels are, in part, established through
comparisons with companies of similar size engaged in the same or similar
business as that of the Company. Actual salaries are based on individual
performance of the executive officer within a salary range reflecting job
evaluation and market comparisons. Base salary levels for executive
officers are reviewed annually and established within a range deemed by the
committee to be reasonable and competitive. The Committee did not recommend
any increases in base salary for the executive officers in fiscal 1994.
ANNUAL INCENTIVES - The Company's executive officers are eligible to
participate in an annual incentive compensation program whose awards are
based primarily on the attainment of certain operating and individual
goals. The objective of this program is to provide competitive levels of
compensation in return for the attainment of certain financial objectives
that the Committee believes are primary factors in the enhancement of
shareholder value. In particular, the program seeks to focus the attention
of executive officers toward earnings growth. Bonuses for executive
officers of the Company under this program are intended to be consistent
with targeted awards of companies of similar size and engaged in the same
or similar business as that of the Company. Actual awards are subject to
adjustment up or down, at the discretion of the Committee, based on the
Company's overall performance. For fiscal 1994, the Compensation Committee
awarded bonuses to executive officers based upon the performance measures
discussed above. The bonuses are reflective of the Company's overall
improvement in earnings and total stockholder returns in fiscal 1994.
LONG-TERM INCENTIVES - As an important element in retaining and
motivating the Company's senior management, the Committee believes that
those persons who have substantial responsibility for the management and
growth of the Company should be provided with an opportunity to increase
their ownership of Company stock. Therefore, executive officers and
certain other key employees are eligible to receive stock options from time
to time, giving them the right to purchase shares of Common Stock of the
Company at a specified price in the future. The number of stock options
granted to executive officers is based on various factors, including the
respective scope of accountability, strategic and operational goals and
anticipated performance and contributions of the individual executive.
The Board of Directors has adopted an amendment to the Company's 1992 Stock
Option Plan (the "Plan") which provides that each nonemployee director
shall receive annually on a prescribed date options to purchase 10,000
shares of Common Stock at an exercise price equal to the closing price of
the Company's Common Stock on the date of grant as reported on the New York
Stock Exchange. The amendment to the Plan is subject to shareholder
approval. Nonemployee directors shall constitute a committee of
disinterested directors to administer the granting of all other options
under the Plan.
"Compensation", as defined in Section 162(m) of the Internal
Revenue Code, as amended (the "Code"), in excess of $1 million per year
paid to an executive officer is not deductible by the Company unless
such compensation in excess of $1 million per year is payable pursuant
to a performance-based plan, approved by the shareholders of the
Company. The Compensation Committee is in the process of developing
performance goals with respect to compensation exceeding $1 million
per year payable to an executive officer.
-5- <PAGE>
Compensation for the President and Chief Executive Officer
- ----------------------------------------------------------
The Committee, in considering the compensation for the President and
Chief Executive Officer for fiscal 1994, reviewed his existing compensation
arrangements and the performances of both Mr. Shirvanian and the Company.
The Committee made the following determinations regarding Mr. Shirvanian's
compensation:
- The Committee determined that Mr. Shirvanian's base salary is at an
appropriate level and no adjustment was made.
- Based upon Mr. Shirvanian's and the Company's fiscal 1994 performance,
the Committee awarded a bonus of $150,000 to Mr. Shirvanian.
- In order to provide a long-term incentive to Mr. Shirvanian, the
Committee awarded him options to purchase 300,000 shares of the
Company's common stock at fair market value on the date of the grant.
Summary
- -------
The Committee believes, based upon its review of the Company's
compensation programs, that the compensation program for executive officers
of the Company is appropriate and competitive with the compensation
programs provided by other companies engaged in the waste management
business. The Committee also believes that the Company's incentive program
provides for awards appropriately related to the Company's and individual
performance. The Committee further believes that the stock option program
provides opportunities to participants that are consistent with the returns
that are generated on behalf of the Company's shareholders.
Compensation Committee
of the Board of Directors
Dr. A.N. Mosich, Chairman
John W. Simmons
Savey Tufenkian
-6- <PAGE>
Executive Compensation
- ----------------------
The following table sets forth certain information with respect to
compensation for services in all capacities paid by the Company for the
past three years, to the Chief Executive Officer of the Company at June 30,
1994 and each of the four other most highly compensated executive officers
of the Company serving at June 30, 1994, including one individual who
ceased to be an executive officer of the Company during fiscal 1994 but
whose reportable salary and bonus would have placed him in the group of the
four other most highly compensated executive officers of the Company.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Awards
Annual Compensation ------------
----------------------------------- Securities
Underlying
Name and Other Annual Options All Other
Principal Position Year Salary Bonus<F1> Compensation<F2> (Shares)<F3> Compensation<F4>
- ----------------------- ---- ------- --------- -------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Kosti Shirvanian 1994 $772,800 $150,000 $-0- 300,000 $4,620
Chairman of the Board 1993 786,800 -0- -0- 450,000<F5> 4,497
and President 1992 781,800 -0- -0- 300,000<F5> 4,364
Ramsey G. DiLibero 1994 121,600 25,000 -0- 24,000 -0-
Chief Operating Officer <F6> 1993 -0- -0- -0- -0- -0-
1992 -0- -0- -0- -0- -0-
Savey Tufenkian 1994 187,680 40,000 -0- 50,000 4,497
Executive Vice President, 1993 204,680 -0- -0- 137,500 4,721
Secretary-Treasurer 1992 183,310 -0- -0- -0- 4,707
Lawrence F. McQuaide 1994 160,080 12,000 -0- 15,000 6,878
Executive Vice President, 1993 162,980 -0- -0- 33,000 812
Finance 1992 168,355 -0- -0- 12,000<F5> 2,391
Richard A. Haft, Jr. 1994 185,894 -0- -0- 15,000 3,584
Executive Vice President, 1993 154,960 -0- -0- 30,000 770
General Counsel <F7> 1992 154,415 -0- -0- 10,000<F5> 2,999
<FN>
<F1> Includes bonus awards earned for performance in the fiscal year
noted even though such amounts are payable in subsequent years.
<F2> No perquisites and other benefits exceed the lesser of either
$50,000 or 10 percent of the total of annual salary and bonuses
reported for the named executive officer.
<F3> In September 1992, the Compensation Committee approved the
repricing of the options granted on July 1, 1990 and September 6,
1991 to $10 3/8 ($11.41 or 110% for incentive stock options with
respect to optionees owning more than 10% of the outstanding
shares of the Company's Common Stock), the price of the Common
-7- <PAGE>
Stock last reported by the New York Stock Exchange as of the
close of the market on September 10, 1992. As a condition of the
repricing, the Committee required that the number of outstanding
options held by the optionees be reduced by 25%. The options
issued on July 1, 1990 were 75% vested effective July 1, 1993,
and had an original exercise price of $19 1/4 ($21.17 or 110% for
incentive stock options with respect to optionees owning more
than 10% of the outstanding shares of the Company's Common
Stock). The options issued on September 6, 1991 were 67% vested
effective September 6, 1993, and had an original exercise price
of $16 7/8.
<F4> The All Other Compensation column represents the amount of the
Company's matching contribution with respect to each executive
officer under the Company's 401(k) Savings and Investment Plan.
<F5> Stock option grants for fiscal 1991 and 1992 were treated as
canceled and reissued in fiscal 1993. See note <F2>.
<F6> Mr. DiLibero joined the Company in December 1994 as Chief
Operating Officer.
<F7> Mr. Haft, Executive Vice President, General Counsel, resigned
from the Company in March 1994. Included in Mr. Haft's salary
above is $78,000 in severance payments made over a period of
six months ending September, 1994.
</TABLE>
-8- <PAGE>
The following table sets forth certain information with respect to
stock options granted to the executive officers named in the Summary
Compensation Table during fiscal 1994. The Company does not grant any
Stock Appreciation Rights.
OPTION GRANTS IN THE LAST FISCAL YEAR
Grant Date
INDIVIDUAL GRANTS Value
- ------------------------------------------------------------ ----------
Percentage
of Total
Number of Options
Securities Granted to
Underlying Employees
Options in Exercise Grant Date
Granted Fiscal Price Expiration Present
Name (Shares)<F1> 1994 (per share) Date Value<F2>
- ----------------- ----------- ------ --------- --------- -----------
Kosti Shirvanian 300,000 40.5% $10.00 7/28/03 $2,154,000
Ramsey G. DiLibero 12,000 1.6% 10.00 7/28/03 86,160
12,000 1.6% 15.13 12/16/03 130,320
Savey Tufenkian 50,000 6.8% 10.00 7/28/03 359,000
Lawrence F. McQuaide 15,000 2.0% 10.00 7/28/03 107,700
Richard A. Haft, Jr. 15,000 2.0% 10.00 7/28/03 107,700
[FN]
<F1> Stock options granted on July 28, 1993 and December 16, 1993 under the
Company's 1983 Non-Qualified Stock Option Plan. Options become fully
exercisable on July 28, 1996 and December 16, 1996, respectively.
<F2> Based upon the Black-Scholes option valuation model. The actual
value, if any, an executive may realize will depend on the excess of
the stock price over the exercise price on the date the option is
exercised. There is no assurance the value realized will be at or
near the value estimated by the Black-Scholes model. The valuation
model uses certain assumptions. The assumptions used in this
valuation were: 7.7% risk-free interest rate, no dividends and a
volatility factor of 0.5002.
-9- <PAGE>
The following table sets forth certain information as to each exercise
of stock options during the year ended June 30, 1994 by the executive
officers named in the Summary Compensation Table and the fiscal year-end
value of unexercised options:
<TABLE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND JUNE 30, 1994 OPTION VALUES
<CAPTION>
Number of Securities
Underlying Unexercised
Shares Options at June 30, 1994 In-the-Money Options
Acquired On Value (Shares) at June 30, 1994<F1>
Name Exercise Realized<F1> Exercisable Unexercisable Exercisable Unexercisable
- ----------------- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kosti Shirvanian -0- -0- 1,003,000 375,000 $9,772,150 $3,721,850
Ramsey G. DiLibero -0- -0- -0- 24,000 -0- 178,500
Savey Tufenkian 10,000 $ 84,750 171,450 126,050 1,686,550 1,231,900
Lawrence F. McQuaide 22,500 206,200 17,750 30,250 162,400 296,750
Richard A. Haft, Jr. 15,000 115,000 40,000 -0- 390,600 -0-
<FN>
<F1> Computed based upon the difference between the aggregate fair market
value and the aggregate exercise price at the exercise date or fiscal
year end as appropriate.
</TABLE>
-10- <PAGE>
Performance Graph
- -----------------
The following performance graph compares the performance of the
Company's Common Stock to the S & P 500 Index and to the Value Line
Environmental Service Index for the Company's last five fiscal years.
The graph assumes that the value of the investment in the Company's
Common Stock and each index was $100 at June 30, 1989 and that all
dividends were reinvested.
June June June June June June
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
Western Waste Industries 100 188 192 120 106 195
Value Line Index 100 151 120 110 104 94
S&P 500 100 116 125 142 161 163
-11- <PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The following table sets forth information concerning those
shareholders known to the Company to have owned beneficially more than five
percent of the Company's outstanding Common Stock as of October 1, 1994.
Common Stock is the Company's only voting security.
Percent of
Name and Address of Number of Shares Common Stock
Beneficial Owner Beneficially Owned Outstanding
-------------------- ------------------ ------------
Kosti Shirvanian........................ 5,842,472 <F1> 37.5%
21061 South Western Avenue
Torrance, California 90501 <F2>
FMR Corporation......................... 1,690,780 <F3> 11.7%
82 Devonshire Street
Boston, Massachusetts 02109
State of Wisconsin Investment Board..... 1,310,800 <F4> 9.1%
P.O. Box 7842
Madison, Wisconsin 53707
[FN]
<F1> Includes options to purchase 1,177,994 shares of the Company's Common
Stock, exercisable within 60 days.
<F2> Mr. Shirvanian is Chairman of the Board and President of the Company.
<F3> Based upon Form 13G filed with the Securities and Exchange Commission
on August 9, 1994.
<F4> Based upon Form 13F filed with the Securities and Exchange Commission
on June 30, 1994.
-12- <PAGE>
The following table sets forth, as of October 1, 1994, the amount of
the Company's Common Stock beneficially owned by each of its directors and
nominees for directors, each executive officer named in the Summary
Compensation Table, and all directors and executive officers as a group,
based upon information obtained from such persons:
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
Sole Voting Options
and Exercisable Other Percent
Name of Individual Investment Within Beneficial of
or Group Power 60 Days Ownership<F1> Class
- ---------------------- --------- --------- --------- ------
Kosti Shirvanian <F2> 4,632,100 1,177,994 32,378 37.5%
Ramsey G. DiLibero -0- 4,000 -0- *
Savey Tufenkian <F2><F3> 243,500 230,833 51,255 3.6%
Lawrence F. McQuaide 9,400 33,000 1,146 *
Richard A. Haft, Jr. 1,000 27,500 1,200 *
Harry S. Derbyshire 27,000 49,000 -0- *
Dr. A.N. Mosich 18,000 26,000 -0- *
John W. Simmons 7,000 50,000 -0- *
All executive officers and
directors as a group
(8 persons) 4,938,000 1,598,327 85,979 41.4%
*Less than one percent.
[FN]
<F1> Represents shares of Common Stock held in trust by the Company's
401(k) Savings and Investment Plan.
<F2> Kosti Shirvanian and Savey Tufenkian are brother and sister.
<F3> Does not include stock options exercisable within 60 days held by
Mr. Ralph Tufenkian, an officer of the Company and
Mrs. Tufenkian's husband.
-13- <PAGE>
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
On May 1, 1968, the Company entered into a 25-year lease with
Mr. Shirvanian, for approximately three and one-half acres of land in
Carson, California, constituting about one-half of the property utilized by
the Company at its Carson facility. The term of the lease has been
extended to February 28, 1995. At the end of the lease term the
improvements on the land become the property of the lessor. The Company
pays insurance, taxes and maintenance on the property. Rent is being paid
at the rate of $14,457 per month. This lease rate was determined on the
basis of an independent real estate appraisal of the fair market value of
the property completed on January 22, 1986, and is adjusted annually based
on the Consumer Price Index. The Company believes that the terms of the
lease, including the rent, are comparable to those that would have been
included in a lease entered into with an independent third party for
comparable property.
During fiscal 1989, the Company adopted a policy of making interest-
free short-term loans to officers, directors and key employees to enable
them to exercise stock options. During fiscal 1991, Mrs. Tufenkian and
Ralph Tufenkian, Vice President, Corporate Projects (Mrs. Tufenkian's
husband) received short-term loans of $216,000 in connection with the
exercise of stock options. Mrs. Tufenkian and Mr. Tufenkian have repaid
$158,000 leaving a balance of $58,000 as of June 30, 1994. During fiscal
1992, Mr. Shirvanian, received a short-term loan of $197,560 in connection
with the exercise of stock options and $121,177 for the purchase of a life
insurance policy, totalling $318,737. During fiscal 1993, he received an
additional loan of $166,550 and repaid $115,000. In fiscal 1994, he repaid
$150,000 leaving a balance of $220,287 as of June 30, 1994.
In order to induce Mr. McQuaide to relocate to Southern California,
the Company loaned Mr. McQuaide $80,000 in 1984, payable within ten years,
with interest at 8% per annum, to assist him in the purchase of a house.
Due to the substantial difference between the housing costs in Southern
California and some other parts of the nation, many companies located in
Southern California have had to make similar types of arrangements to
attract talented personnel from other parts of the country. Mr. McQuaide's
current outstanding principal indebtedness under the note is $35,000.
All transactions between the Company and its officers, directors,
employees and shareholders or their affiliates have been, and in the future
will be, subject to the approval of a majority of the independent and
disinterested members of the Board of Directors.
-14- <PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized in the
City of Torrance, State of California, on the 28th day of October, 1994.
WESTERN WASTE INDUSTRIES
By: _______________________________
Lawrence F. McQuaide
Executive Vice President,
Finance (Principal Financial
and Accounting Officer)
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