SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A No. 1
(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, 1995:
PART II
Item 8 Consolidated Statement of Cash Flows (EDGAR
Version)
To correct line item "Proceeds from Sale of
Investments" for fiscal 1995. The original schedule
indicated that the proceeds from the sale of
investments for fiscal 1995 were $200,000. The
correct amount is $1,200,000.
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: 18
-1- <PAGE>
Western Waste Industries Consolidated Statement of Cash Flows
Year Ended June 30,
1993 1994 1995
Operating Activities: ------------ ------------ ------------
Net income (loss) $(10,116,000) $ 12,941,000 $ 17,089,000
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 18,678,000 22,047,000 26,999,000
Bad debt expense 1,858,000 1,965,000 1,579,000
Uninsured claims 3,723,000 1,728,000 1,407,000
Employer portion-401(k) contribution 506,000 566,000 661,000
Deferred income taxes (8,976,000) 1,327,000 1,967,000
Loss on municipal contract 6,000,000 - ( 950,000)
Gain on sale of minority investment (2,829,000) - -
Cumulative effect of accounting change - (414,000) -
Loss on disposition of assets 157,000 1,164,000 628,000
Special charges 21,043,000 - -
Changes in operating assets
and liabilities net of effects
of purchased businesses:
Decrease (increase) in receivables (1,882,000) (6,045,000) 1,162,000
Decrease (increase) in other assets 1,891,000 4,979,000 (2,429,000)
Increase (decrease) in
accounts payable 48,000 ( 171,000) 395,000
Increase (decrease) in
other liabilities 6,171,000 (3,842,000) 515,000
Net cash provided by ----------- ----------- -----------
operating activities 36,272,000 36,245,000 49,023,000
----------- ----------- -----------
Investing activities:
Purchases of property and equipment (34,980,000) (44,293,000) (36,386,000)
Proceeds from sale of investments 7,000,000 - 1,200,000
Proceeds from disposition of assets 270,000 1,976,000 870,000
----------- ----------- -----------
Net cash used in investing
activities (27,710,000) (42,317,000) (34,316,000)
----------- ----------- -----------
Financing activities:
Proceeds from revolving lines of credit
and long-term borrowings, net of
restricted cash 13,515,000 15,028,000 18,675,000
Principal payments on debt (20,954,000) ( 4,574,000) (39,450,000)
Proceeds from sale of stock 419,000 3,294,000 2,617,000
----------- ----------- -----------
Net cash provided (used) by
financing activities ( 7,020,000) 13,748,000 (18,158,000)
----------- ----------- -----------
Increase (decrease) in cash and
short-term investments 1,542,000 7,676,000 (3,451,000)
Cash and short-term investments at
beginning of year 717,000 2,259,000 9,935,000
----------- ----------- -----------
Cash and short-term investments at
end of year $ 2,259,000 $ 9,935,000 $6,484,000
=========== =========== ===========
The accompanying notes are an integral part of these statements.
-2- <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 with the Company Since Age Term
- -------------------- ------------------------ --------- --- ----------
CLASS I
Ramsey G. DiLibero Chief Operating Officer 1993 67 1995
Michael C. Palmer Director 1995 46 1995
John W. Simmons Director <F1><F2> 1983 77 1995
Savey Tufenkian Executive Vice President and 1964 66 1995
Secretary-Treasurer<F3><F4>
CLASS II
Harry S. Derbyshire Director <F3> 1983 70 1996
Dr. A.N. Mosich Director <F1><F2><F5> 1980<F5> 67 1996
Kosti Shirvanian Chairman of the Board of 1964 65 1996
Directors, Chief Executive
Officer and President<F3><F4>
[FN]
<F1> Member of Audit Committee
<F2> Member of Compensation Committee
<F3> Member of Nominating Committee
<F4> Kosti Shirvanian and Savey Tufenkian are brother and sister.
<F5> 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 became Chief Operating Officer in December
1993. He had previously served in various positions with
Browning- Ferris International, including Vice Chairman,
prior to his retirement in August 1989.
Mr. Simmons was elected a director in 1983. Mr. Simmons
retired in 1983 as a Senior Vice President of Atlantic
Richfield Company and presently serves as a consultant to
various businesses.
-3- <PAGE>
Ms. Tufenkian has served as Executive Vice President
since 1988 and Secretary-Treasurer since the Company's
incorporation in 1964. She co-founded the Company in 1955.
Mr. Palmer was named as a director in July 1995.
Mr. Palmer, who is a Certified Public Accountant, is a
Partner in the accounting firm of Parks, Palmer, Turner &
Yemenidjian, which he co-founded in 1978.
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 was initially elected as a director in 1980.
He was a Professor of Accounting at the University of
Southern California until retirement 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:
Present Office or
Name Age Position<F1>
-------------------- --- --------------------
Kosti Shirvanian <F2> 65 Chairman of the Board,
Chief Executive Officer
and President
Ramsey G. DiLibero 67 Chief Operating Officer
Savey Tufenkian <F2> 66 Executive Vice President
and Secretary-Treasurer
Lawrence F. McQuaide 47 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.
-4- <PAGE>
Background of Mr. McQuaide
--------------------------
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.
-5- <PAGE>
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 fiscal 1995 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:
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 recommended increases in base
salary for executive officers in fiscal 1995 of up to 6%.
-6- <PAGE>
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 1995, 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 return in fiscal 1995.
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. Each nonemployee director receives
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.
Nonemployee directors 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.
Compensation for the President and Chief Executive Officer
----------------------------------------------------------
The Committee, in considering the compensation for the
President and Chief Executive Officer for fiscal 1995,
-7- <PAGE>
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:
- Based upon Mr. Shirvanian's and the Company's
fiscal 1994 performance, the Committee increased
Mr. Shirvanian's base salary by 6%. In determining
Mr. Shirvanian's base salary increase the Committee
considered the fact that he did not receive an
increase in base salary in fiscal 1994 or 1993.
- Based upon Mr. Shirvanian's and the Company's
fiscal 1995 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 non-
qualified stock options to purchase 200,000 shares
of the Company's common stock at fair market value
on the date of grant and awarded him incentive
stock options to purchase 40,000 shares of the
Company's common stock at a price equal to 110% of
the fair market value on the date of 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
/s/ Dr. A.N. Mosich
Dr. A.N. Mosich, Chairman
/s/ John W. Simmons
John W. Simmons
Board of Directors Compensation
-------------------------------
Non-employee directors receive fees of $10,000 per annum
plus $1,000 per Board meeting attended in person, in addition
to expenses reasonably incurred in attending meetings.
-8- <PAGE>
Directors also receive $1,000 a day for services rendered
beyond normal director duties. During fiscal 1995, the
Company paid Mr. Derbyshire $6,000, Dr. Mosich $5,250, and
Mr. Simmons $1,000 for consulting services. In addition,
the Company entered into a one-year agreement with
Mr. Simmons whereby he provided consulting services to the
Company during fiscal 1995. Mr. Simmons was paid $120,000
pursuant to this agreement. On July 5, 1994, each
nonemployee director was granted stock options to purchase
10,000 shares of the Company's Common Stock at an exercise
price equal to the fair market value per share of stock
on the date of grant.
-9- <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, 1995 and each of
the four other most highly compensated executive officers of
the Company serving at June 30, 1995.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Awards
-----------------
Annual Compensation
---------------------------------------- Securities
Name and Other Annual Underlying Options All Other
Principal Position Year Salary Bonus<F1> Compensation<F2> (Shares)<F3> Compensation<F4>
---------------------------- ---- -------- --------- ----------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Kosti Shirvanian 1995 $786,760 $150,000 $-0- 240,000 $4,620
Chairman of the Board, 1994 772,800 150,000 -0- 300,000 4,620
Chief Executive Officer 1993 786,800 -0- -0- 450,000<F5> 4,497
and President
Ramsey G. DiLibero 1995 208,800 25,000 -0- 20,000 6,220
Chief Operating Officer <F6> 1994 121,600 25,000 -0- 24,000 -0-
1993 - - - - -
Savey Tufenkian 1995 197,874 40,000 -0- 40,000 4,631
Executive Vice President, 1994 187,680 40,000 -0- 50,000 4,497
Secretary-Treasurer 1993 204,680 -0- -0- 137,500<F5> 4,721
Lawrence F. McQuaide 1995 167,852 15,000 -0- 12,000 896
Executive Vice President, 1994 160,080 12,000 -0- 15,000 6,878
Finance 1993 162,980 -0- -0- 33,000<F5> 812
Arnold J. Rothlisberger 1995 124,554 10,000 -0- 5,000 2,154
Vice President, 1994 - - - - -
General Counsel <F7> 1993 - - - - -
-10- <PAGE>
<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 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 (3).
<F6> Mr. DiLibero joined the Company in December 1993 as Chief
Operating Officer.
<F7> Mr. Rothlisberger joined the Company in August 1994 as Vice
President, General Counsel.
</TABLE>
-11- <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 1995.
The Company does not grant any Stock Appreciation Rights.
<TABLE>
OPTION GRANTS IN THE LAST FISCAL YEAR
<CAPTION> Grant Date
INDIVIDUAL GRANTS Value
--------------------------------------------------------------------------------- -------------
Number Percentage
of Securities of Total
Underlying Options
Options Granted to Exercise
Granted Employees in Price Expiration Grant Date
Name (Shares) Fiscal 1995 (per share) Date Present Value<F1>
------------------- ----------- ------------ ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Kosti Shirvanian 200,000<F2> 35.7% $20.00 7/05/04 $2,652,000
40,000<F2> 7.1% 22.00 7/05/04 514,400
Ramsey G. DiLibero 20,000<F2> 3.6% 20.00 7/05/04 265,200
Savey Tufenkian 40,000<F2> 7.1% 20.00 7/05/04 530,400
Lawrence F. McQuaide 12,000<F2> 2.1% 20.00 7/05/04 159,120
Arnold J. Rothlisberger 5,000<F3> 0.7% 20.12 7/31/04 66,700
<FN>
<F1> 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 that
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: 6.3% risk-free
interest rate, no dividends and a volatility factor of
0.452.
<F2> Stock options granted on July 6, 1994 under the
Company's 1992 Stock Option Plan. Options become fully
exercisable on July 6, 1998 with the exception of the
200,000 stock options granted to Mr. Shirvanian
included in the same grant, which become fully
exercisable on July 6, 1997.
<F3> Mr. Rothlisberger joined the Company in August 1994 as
Vice President, General Counsel. He was granted 5,000
stock options on August 1, 1994 under the Company's
1992 Stock Option Plan. These options become fully
exercisable on August 1, 1998.
</TABLE>
-12- <PAGE>
The following table sets forth certain information as to each
exercise of stock options during the year ended June 30, 1995
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, 1995 OPTION VALUES
<CAPTION>
Number of Securities
Underlying Unexercised
Options at June 30, 1995 In-the-Money Options
Shares (Shares) at June 30, 1995<F1>
Acquired On Value ---------------------------- ----------------------------
Name Exercise Realized<F1> Exercisable Unexercisable Exercisable Unexercisable
---------------------- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kosti Shirvanian -0- -0- 1,177,999 440,001 $11,607,000 $2,050,000
Ramsey G. DiLibero -0- -0- 8,000 36,000 60,500 123,500
Savey Tufenkian -0- -0- 230,833 106,667 2,293,100 667,500
Lawrence F. McQuaide 21,200 $148,225 11,800 27,000 106,600 151,500
Arnold J. Rothlisberger -0- -0- -0- 5,000 -0- 625
<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>
-13- <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, 1990 and that all dividends were
reinvested.
June June June June June June
1990 1991 1992 1993 1994 1995
Western Waste 100 102 64 56 104 105
Industries
Value Line Index 100 79 74 75 69 76
S&P 500 100 107 122 138 140 177
-14- <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 24, 1995. 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 . . . . . . . 5,854,411<F2> 36.9%
21061 South Western Avenue
Torrance, California 90501<F1>
FMR Corporation . . . . . . . . 2,163,200<F3> 14.9%
82 Devonshire Street
Boston, Massachusetts 02109
State of Wisconsin
Investment Board . . . . . . . 1,359,000<F4> 9.3%
P.O. Box 7842
Madison, Wisconsin 53707
[FN]
<F1> Mr. Shirvanian is Chairman of the Board and President of the
Company
<F2> Includes options to purchase 1,337,998 shares of the Company's
Common Stock, exercisable within 60 days.
<F3> Based upon Form 13-G filed with the Securities and Exchange
Commission on February 13, 1995.
<F4> Based upon Forms 13-G filed with the Securities and Exchange
Commission on February 13, 1995.
The following table sets forth, as of October 1, 1995, 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:
-15- <PAGE>
Security Ownership of Management
Sole Voting Options
and Exercisable Other Percent
Name of Individual Investment Within Beneficial of
or Group Power 60 Days Ownership<F2> Class
---------------------- --------- --------- ------------ ------
Kosti Shirvanian<F1> 4,483,700 1,337,998 32,713 36.9%
Ramsey G. DiLibero 1,016 17,000 225 *
Savey Tufenkian<F1><F3> 250,106 290,833 18,571 3.8%
Lawrence F. McQuaide 9,501 24,800 1,146 *
Arnold J. Rothlisberger -0- 1,250 28 *
Harry S. Derbyshire 27,000 64,333 -0- *
Dr. A.N. Mosich 6,000 37,333 -0- *
John W. Simmons 7,000 57,333 -0- *
All executive officers
and directors as a
group (8 persons) 4,784,323 1,830,880 52,683 40.7%
[FN]
<F*> Less than one percent.
<F1> Kosti Shirvanian and Savey Tufenkian are brother and sister.
<F2> Represents shares of Common Stock held in trust by the Company's
401(k) Savings and Investment Plan.
<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.
-16- <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, 1996. 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 $14,953 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 repaid the loan in total with payments of $158,000 and
$58,000 in fiscal 1994 and 1995 respectively. 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 which was repaid in fiscal 1995.
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 repaid the remaining principal
indebtedness of this loan in the amount of $35,000 in fiscal 1995.
In fiscal 1995, the Company and Mr. and Mrs. Kosti Shirvanian and
Ms. Linda Shirvanian as trustee of the Kosti and Marian Shirvanian
Family 1995 Irrevocable Trust (the"Trust) entered into a split dollar
life insurance agreement (the "Agreement") providing for life insurance
on the life of Mr. Shirvanian or the lives of Mr. and Mrs. Shirvanian.
The owner and beneficiary of the policy is the Trust. The
beneficiaries of the Trust are the descendants of Mr. and
Mrs. Shirvanian. The Agreement stipulates that the Company will pay an
amount equal to the least of (i) two-thirds of the entire amount of the
premium (ii) the sum of $500,000 or (iii) the largest amount which will
not result in a charge to the earnings of the Company for the fiscal
year in which the payment is made of more than $150,000, determined
under the accounting method which results in the least annual charges
over the longest appropriate period of time and conforms with generally
accepted accounting principles. The Trust shall pay the balance of the
premium. In fiscal 1995 the Company recorded a receivable of
-17- <PAGE>
$324,957, which is fully secured by the cash surrender value of the
policy, and expensed $150,000 related to this policy. Upon payment of
the policy death benefit, or upon surrender of the policy, the Company
will be entitled to reimbursement of the aggregate premiums advanced by
the Company. This agreement was unanimously approved by the Board of
Directors of the Company (with Mr. Shirvanian abstaining).
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.
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 26th
day of October, 1995.
WESTERN WASTE INDUSTRIES
By: /s/ Lawrence F. McQuaide
--------------------------------
Lawrence F. McQuaide
Executive Vice President,
Finance (Principal Financial
and Accounting Officer)
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October 26, 1995
Securities and Exchange Commission
Room 104
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
Pursuant to the requirements of the Securities Exchange Act of
1934, we are transmitting herewith the attached Form 10-K/A No. 1.
Sincerely,
/s/ MADHU S. CHANANI
Madhu S. Chanani
Vice President
Corporate Controller
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