<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 [ ]
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 sec. 240.14a-11(c) or sec. 240.14a-12
USA WASTE SERVICES, 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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[USA WASTE LOGO]
1001 FANNIN STREET, SUITE 4000
HOUSTON, TEXAS 77002
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 1998
TO OUR STOCKHOLDERS:
The 1998 Annual Meeting of Stockholders (the "Meeting") of USA Waste
Services, Inc. (the "Company") will be held at the Four Seasons Hotel, 1300
Lamar, Houston, Texas 77010, on May 19, 1998, at 10:00 a.m., Houston, Texas
time, for the following purposes:
1. To elect four members of the Board of Directors of the Company to serve
as Class III directors for a three-year term expiring at the annual
meeting of stockholders of the Company to be held in the year 2001.
2. To approve an increase in the number of shares available for grant under
the Company's 1993 Stock Incentive Plan by 10,000,000 shares.
3. To transact such other business as may properly be brought before the
Meeting or any adjournments thereof.
The Meeting may be postponed or adjourned from time to time, and at any
reconvened meeting, actions with respect to the matters specified in this notice
may be taken without further notice to stockholders unless required by the
Bylaws of the Company.
Only stockholders of record at the close of business on March 31, 1998 are
entitled to notice of, and to vote on all matters at, the Meeting and any
adjournments thereof. A list of all such stockholders will be available at the
Meeting and, during the ten days prior to the Meeting, at the offices of the
Company, 1001 Fannin Street, Suite 4000, Houston, Texas 77002.
By Order of the Board of Directors,
/s/ GREGORY T. SANGALIS
GREGORY T. SANGALIS
Vice President and Secretary
April 8, 1998
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED PREPAID ENVELOPE.
<PAGE> 3
[USA WASTE LOGO]
1001 FANNIN STREET, SUITE 4000
HOUSTON, TEXAS 77002
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of USA Waste Services, Inc., a Delaware corporation ("USA
Waste" or the "Company"), of proxies to be voted at its 1998 Annual Meeting of
Stockholders to be held at the Four Seasons Hotel, 1300 Lamar, Houston, Texas
77010, on May 19, 1998, at 10:00 a.m., Houston, Texas time, and at any
adjournment(s) thereof (such meeting or adjournment(s) thereof are referred to
as the "Meeting"). This Proxy Statement and the accompanying materials will be
mailed on or about April 8, 1998, to holders of record of common stock, par
value $0.01 per share ("Common Stock"), of the Company as of the record date.
The record date for determining stockholders entitled to notice of, and to
vote at, the Meeting is the close of business on March 31, 1998. On that date,
the Company had outstanding and entitled to vote 219,339,755 shares of Common
Stock. Holders of record of Common Stock on the record date will be entitled to
one vote for each share held on all matters properly brought before the Meeting.
A majority of the votes entitled to be cast on matters to be considered at
the Meeting constitutes a quorum. If a share is represented for any purpose at
the Meeting, it is deemed to be present for all other matters. Abstentions and
shares held of record by a broker or its nominee ("Broker Shares") that are
voted on any matter are included in determining the number of votes present.
Broker Shares that are not voted on any matter will not be included in
determining whether a quorum is present.
Other than the election of directors, which requires a plurality of the
votes cast, each matter to be submitted to stockholders requires the affirmative
vote of a majority of the votes cast at the Meeting. In all cases, shares with
respect to which authority is withheld, abstentions, and Broker Shares that are
not voted will not be included in determining the number of votes cast.
All costs of soliciting proxies for the Meeting will be borne by the
Company. In addition to use of the mails, proxies may be solicited by personal
interview, telephone and facsimile, and by banks, brokerage houses, and other
institutions. Nominees or fiduciaries will be requested to forward the
solicitation for the execution of proxies. The Company will, upon request,
reimburse banks, brokerage houses, other institutions, nominees, and fiduciaries
for their reasonable expenses in forwarding solicitation materials to beneficial
owners.
Any stockholder returning the accompanying proxy may revoke such proxy at
any time prior to its exercise by (a) giving written notice to the Company of
such revocation, (b) voting in person at the Meeting, or (c) executing and
delivering to the Company a later-dated proxy. Written revocations and
later-dated proxies should be sent to the Secretary of USA Waste Services, Inc.,
1001 Fannin Street, Suite 4000, Houston, Texas 77002.
ANNUAL REPORT
A copy of the Company's 1997 Annual Report to Stockholders, covering the
fiscal year ended December 31, 1997, including the Company's Annual Report on
Form 10-K containing financial statements, is enclosed with this Proxy
Statement. Neither the Annual Report to Stockholders nor the Annual Report on
Form 10-K is incorporated by reference into this Proxy Statement or deemed to be
a part of the materials for the solicitation of proxies.
<PAGE> 4
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS
The Board of Directors of the Company is divided into three classes, each
consisting of four members. Directors are elected for a term of three years. At
the Meeting, the term of office of the Class III directors will expire, and the
four directors in that class will be nominated to serve until USA Waste's annual
meeting in 2001 and until their respective successors are elected. The terms of
office of the Class I and Class II directors will expire at USA Waste's annual
meetings in 1999 and 2000, respectively.
USA Waste's Board of Directors intends to cause the nomination of Richard
D. Kinder, Larry J. Martin, Rodney R. Proto and Alexander W. Rangos for election
as Class III directors. Unless a stockholder requests that voting of his proxy
be withheld for any one or more of the nominees for directors by so directing on
the proxy card, the shares represented by the proxy will be voted FOR election
of the four nominees described below. If any nominee becomes unavailable for any
reason, then the shares represented by proxy will be voted FOR the remainder of
the listed nominees and FOR such other nominees as may be designated by the
Board of Directors of USA Waste as replacements for those who become
unavailable.
On March 10, 1998, USA Waste entered into a definitive Agreement and Plan
of Merger (the "Merger Agreement") with Waste Management, Inc. ("WMI"), pursuant
to which WMI will become a wholly-owned subsidiary of USA Waste (the "Merger").
As part of the Merger, the USA Waste Board of Directors will be increased to 14
members, seven of whom will be designated by each of WMI's Board of Directors
and USA Waste's Board of Directors. In furtherance thereof, each of the
Company's directors, with the exception of Messrs. Drury and Proto, have
submitted their resignations as directors to be effective as of the day
immediately preceding the date of the Merger. There can be no assurance that the
Merger will occur, in which case the resignations will have no effect, and the
directors then in office will continue through their terms.
The following sets forth as of March 1, 1998 certain information concerning
each of the nominees for election to the Board of Directors and each director
who will continue in office.
<TABLE>
<CAPTION>
DIRECTOR DIRECTOR
NAME DESCRIPTION AGE SINCE CLASS
---- ----------- --- -------- --------
<S> <C> <C> <C> <C>
John E. Drury(1)................ Chairman of the Board and Chief 53 1994 II
Executive Officer
Rodney R. Proto(1).............. President, Chief Operating 49 1996 III
Officer and Director
Ralph F. Cox(3)................. Director 65 1996 I
Richard J. Heckmann(3).......... Director 54 1994 I
Richard D. Kinder............... Director 53 1997 III
Larry J. Martin(3).............. Director 56 1996 III
William E. Moffett(2)........... Director 67 1995 II
Alexander W. Rangos(1)(2)....... Vice Chairman of the Board 37 1995 III
John G. Rangos, Sr.(1).......... Director 68 1995 II
Kosti Shirvanian(1)............. Vice Chairman of the Board 68 1996 I
David Sutherland-Yoest(1)....... Vice Chairman of the Board and 42 1994 I
Vice President-Atlantic Region
Jerome B. York(2)............... Director 60 1997 II
</TABLE>
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(1) Member of the Executive Committee
(2) Member of the Compensation and Stock Incentive Plan Committee (the
"Compensation Committee")
(3) Member of the Audit Committee
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NOMINEES FOR TERMS EXPIRING AT THE ANNUAL MEETING IN 2001 (CLASS III DIRECTORS):
Richard D. Kinder has been Chairman and Chief Executive Officer of Kinder
Morgan Energy Partners, L.P., a master limited partnership headquartered in
Houston, Texas since February 1997. From 1990 through December 1996, he was
President and Chief Operating Officer of Enron Corp. Prior thereto, Mr. Kinder
served in various management and legal positions with Enron Corp. and its
affiliates commencing in 1980. Mr. Kinder is also a director of Baker Hughes
Incorporated, K N Energy, Inc. and Transocean Offshore Inc. He is past Chairman
of the Interstate Natural Gas Association of America and is a Trustee of the
Museum of Fine Arts, Houston.
Larry J. Martin was a co-founder and Vice Chairman of the Board of
Directors of Sanifill, Inc. ("Sanifill"). From October 1989 to July 1991, Mr.
Martin was President and Co-Chief Executive Officer of Sanifill and from July
1991 to February 1992, he was President of Sanifill. For more than five years
prior to October 1989, Mr. Martin was the president of a group of companies
involved in the waste disposal business. Mr. Martin is also a director of
Putting Children First and Comfort Systems USA, Inc.
Rodney R. Proto has been President, Chief Operating Officer and a director
of USA Waste since joining the Company in August 1996. From February 1992 to
August 1996, he was President, Chief Operating Officer and a director of
Sanifill. Before joining Sanifill, Mr. Proto was employed by Browning-Ferris
Industries, Inc. ("BFI") for 12 years where he served, among other positions, as
President of Browning-Ferris Industries Europe, Inc. from 1987 through 1991 and
Chairman of BFI Overseas from 1985 to 1987.
Alexander W. Rangos has been Vice Chairman of the Board of Directors of USA
Waste since December 1995. He served as Executive Vice President -- Corporate
Development of USA Waste from June 1995 until December 1995. Mr. Rangos
previously served as President and Chief Operating Officer of Chambers
Development Company, Inc. ("Chambers") from January 1994 through June 1995.
Prior thereto, he served with Chambers as Executive Vice President -- Operations
and Corporate Development from 1990 to 1994, as Executive Vice
President -- Corporate Development from 1985 to 1990, and as Manager of the
Southern Region from 1984 to 1985. Mr. Rangos is a son of John G. Rangos, Sr., a
director of the Company.
DIRECTORS WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 1999 (CLASS I DIRECTORS)
Ralph F. Cox was a director of Sanifill from September 1993 until December
1996. Since February 1, 1994, Mr. Cox has been a management consultant. For four
years prior thereto, Mr. Cox was President of Greenhill Petroleum Corporation, a
subsidiary of Western Mining Corporation. From 1985 through 1990, he served as
President and Chief Operating Officer of Union Pacific Resources Company, a
petroleum exploration and production company. Before 1985, Mr. Cox spent 31
years with Atlantic Richfield Company ("ARCO"), joining the ARCO board in 1978,
assuming responsibility for ARCO's worldwide petroleum exploration and
production activities and minerals exploration and production activities in
1984, and culminating with his election as Vice Chairman of ARCO in 1985. Mr.
Cox serves as a director of Bonneville Pacific Corporation, an independent power
company; Daniel Industries, Inc., which manufactures oil and gas measurement and
flow control equipment; Rio Grande, Inc., a petroleum exploration and production
company; and CH2M Hill, a consulting engineering firm. He also serves as an
Independent Trustee for The Fidelity Group of funds. Mr. Cox holds a Bachelor of
Science in Petroleum Engineering and a Bachelor of Science in Mechanical
Engineering from Texas A&M University.
Richard J. Heckmann is Chairman, President and Chief Executive Officer of
United States Filter Corporation ("U.S. Filter"), a position he assumed in July
1990. Prior to joining U.S. Filter, Mr. Heckmann was a Senior Vice
President -- Investments and Branch Manager of Prudential-Bache Securities in
Rancho Mirage, California. Mr. Heckmann is also a director of K2 Inc. and United
Rentals, Inc.
Kosti Shirvanian has served as a Vice Chairman of the Board of Directors
since May 1996. He founded Western Waste Industries ("Western") in 1955 as a
sole proprietorship. He served as Western's Chairman of the Board of Directors,
President and Chief Executive Officer since Western's incorporation in 1964
until November 1997.
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<PAGE> 6
David Sutherland-Yoest was President, Chief Operating Officer and a
director of USA Waste from May 1994 until August 1996 and has been a Vice
Chairman of the Board and Vice President -- Atlantic Region and President of
Canadian Waste Services, Inc. ("Canadian Waste") since August 1996. Prior to
joining USA Waste, he was President, Chief Executive Officer and a director of
Envirofil, Inc. ("Envirofil"). He joined Envirofil in January 1993 and was
elected a director in March 1993. From September 1989 to June 1992, Mr.
Sutherland-Yoest served as President of Browning-Ferris Industries, Ltd. ("BFI
Ltd."), the Canadian subsidiary of BFI. From January through September 1989, Mr.
Sutherland-Yoest served as Vice President, Corporate Development, for Laidlaw
Waste Systems, Inc. From 1987 to September 1989, Mr. Sutherland-Yoest was
Laidlaw's Regional Vice-President -- Atlantic Region, located in Columbus, Ohio.
From 1981 to 1987, Mr. Sutherland-Yoest served as District Manager -- Vancouver
and District Manager -- Calgary for BFI Ltd.
DIRECTORS WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 2000 (CLASS II DIRECTORS)
William E. Moffett retired in 1992 as Chairman of the Board and Chief
Executive Officer of Chatham Enterprises, Inc. (real estate development) and
Hazmed, Inc. (environmental services). In May 1985, he retired as President of
Gulf Oil Foundation and as Vice President -- Public Affairs of Gulf Oil
Corporation, having joined Gulf Oil Corporation in 1969 and served in a number
of managerial assignments for that company and its subsidiaries.
John G. Rangos, Sr. served as Vice Chairman of the Board of Directors of
USA Waste from June 1995 until December 1995. Prior to such time, Mr. Rangos
served as Chief Executive Officer of Chambers until June 1995. Mr. Rangos is the
father of Alexander W. Rangos, a Vice Chairman of USA Waste. In connection with
the settlement of a Securities and Exchange Commission (the "Commission")
investigation with respect to Chambers' accounting method and the accuracy of
its financial statements, in May 1995, the Commission instituted administrative
proceedings against Chambers and certain of its employees and outside auditors
whose conduct the Commission found caused Chambers' violation of the reporting,
internal controls and record keeping provisions of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). The Commission, while not finding that
Mr. Rangos knew of these violations, found that he had not exercised sufficient
oversight over the company's record keeping, internal accounting controls, and
financial reporting functions to assure that Chambers complied with the
applicable provisions of the Exchange Act. Mr. Rangos consented to the issuance
of a cease and desist order without admitting or denying the Commission's
findings.
John E. Drury has been Chairman of the Board since June 30, 1995, and Chief
Executive Officer and a director of USA Waste since May 27, 1994. From 1991 to
May 1994, Mr. Drury served as a Managing Director of Sanders Morris Mundy Inc.
("SMMI"), a Houston based investment banking firm. Prior thereto, Mr. Drury
served in various management capacities at BFI, including President and Chief
Operating Officer of BFI from 1982 to 1991.
Jerome B. York has been Vice Chairman of Tracinda Corporation since
September 1995. From 1993 to 1995, he was Senior Vice President and Chief
Financial Officer of IBM Corporation and was elected to the Board of Directors
of IBM in January 1995. From 1979 to 1993, Mr. York served in various management
positions with Chrysler Corporation ("Chrysler"), including Executive Vice
President -- Finance and Chief Financial Officer, and he was a director of
Chrysler in 1992 and 1993. Mr. York also serves as a director of MGM Grand,
Inc., Metro-Goldwyn-Mayer, Inc. and Apple Computer, Inc.
MEETINGS, COMMITTEES AND COMPENSATION
The USA Waste Board of Directors held eight meetings in 1997. For 1997,
directors who were not employed by USA Waste received a grant of options to
purchase 12,500 shares of USA Waste Common Stock. In addition, USA Waste
reimburses directors for their travel and out-of-pocket expenses incurred in
attending Board or committee meetings.
The USA Waste Board of Directors has an Audit Committee, the Compensation
Committee and an Executive Committee. The Board of Directors does not have a
standing nominating committee or other committee performing a similar function.
The Audit Committee reviews external and internal audit plans and
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<PAGE> 7
activities, annual financial statements, and the system of internal financial
controls, and approves all significant fees for audit, audit-related and
non-audit services provided by independent auditors. The Audit Committee met
four times in 1997. The Compensation Committee reviews and recommends
compensation for USA Waste officers and employees and recommends to the Board of
Directors changes in USA Waste's incentive compensation plans. The Compensation
Committee met seven times in 1997. The Executive Committee may act for the Board
of Directors when action is required between Board meetings and may act on
behalf of the Board on all but major corporate matters. All actions taken by the
Executive Committee must be reported at the Board's next meeting. The Executive
Committee met twice in 1997. During 1997, each director attended more than 75%
of all meetings of the entire USA Waste Board of Directors and the committees on
which he served.
BENEFICIAL OWNERSHIP OF USA WASTE COMMON STOCK
The following table sets forth information as of March 1, 1998 (unless
otherwise indicated) with respect to the beneficial ownership of Common Stock by
(1) each owner of more than 5% of USA Waste Common Stock, (2) each director of
USA Waste, (3) certain executive officers of USA Waste, including the Chief
Executive Officer and USA Waste's four most highly compensated officers other
than the Chief Executive Officer who were serving as officers at December 31,
1997, and (4) all executive officers and directors of USA Waste as a group.
Except as otherwise indicated below, each of the entities and persons named in
the table has sole voting and investment power with respect to all shares of
Common Stock beneficially owned.
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL OWNERSHIP
------------------------------
NUMBER PERCENTAGE
NAME OF SHARES OF CLASS
---- ------------ ------------
<S> <C> <C>
FMR Corp.................................................... 28,345,889(1) 13.0%
82 Devonshire Street
Boston, MA 02109
Putman Investments, Inc..................................... 15,385,442(1) 7.1%
1 Post Office Square
Boston, MA 02109
American Express Financial Advisors......................... 14,304,580(1) 6.6%
IDS Tower 10
Minneapolis, MN 55440
John E. Drury............................................... 2,111,614(2) *
Rodney R. Proto............................................. 722,599(3) *
Ralph F. Cox................................................ 33,100(4) *
Richard J. Heckmann......................................... 16,939(5) *
Richard D. Kinder........................................... 0
Larry J. Martin............................................. 1,541,510(6) *
William E. Moffett.......................................... 13,165(7) *
John G. Rangos, Sr.......................................... 7,126,911(8) 3.2%
Alexander W. Rangos......................................... 1,839,465(9) *
Kosti Shirvanian............................................ 8,911,201(10) 3.7%
David Sutherland-Yoest...................................... 439,754(11) *
Jerome B. York.............................................. 10,000 *
Earl E. DeFrates............................................ 224,754(12) *
William A. Rothrock......................................... 80,903(13) *
Directors and executive officers as a group (18 persons).... 23,230,967 10.3%
</TABLE>
- ---------------
* Less than 1%
(1) As of December 31, 1997 according to a Schedule 13G filed with the
Securities and Exchange Commission by the named stockholders.
(2) Includes 1,022,500 shares issuable pursuant to options exercisable within
60 days and 5,176 shares owned by Mr. Drury's spouse.
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<PAGE> 8
(3) Includes 660,500 shares issuable pursuant to options exercisable within 60
days.
(4) Includes 24,600 shares issuable pursuant to options exercisable within 60
days.
(5) Includes 6,500 shares issuable pursuant to options exercisable within 60
days.
(6) Includes 45,000 shares issuable pursuant to options exercisable within 60
days and 7,820 shares owned by Mr. Martin's children.
(7) Includes 13,165 shares issuable pursuant to options exercisable within 60
days.
(8) Includes 75,000 shares issuable pursuant to options exercisable within 60
days.
(9) Includes 193,043 shares issuable pursuant to options exercisable within 60
days and 1,210,008 shares held by John Rangos Development Corporation, Inc.
(10) Includes 2,835,000 shares issuable pursuant to options exercisable within
60 days.
(11) Includes 232,741 shares issuable pursuant to options exercisable within 60
days and 5,000 shares owned by Mr. Sutherland-Yoest's daughter.
(12) Includes 187,000 shares issuable pursuant to options exercisable within 60
days.
(13) Includes 62,924 shares issuable pursuant to options exercisable within 60
days.
COMPENSATION COMMITTEE REPORT
This report explains USA Waste's executive compensation program for the
year ended December 31, 1997. The Compensation Committee, which consists
entirely of non-employee directors, determines the compensation of senior
executives and officers.
Compensation Philosophy. USA Waste's executive compensation program is a
critical part of the effective management of its key executives. The program
rewards senior management for building long-term stockholder value. It is
designed to:
- Establish a comparative framework of companies for pay/performance
analysis;
- Maintain a strong relationship between performance and rewards;
- Communicate the link between pay and performance; and
- Balance all compensation elements to create a total pay program based on
specific performance goals.
Executive Compensation Program. USA Waste's performance-based compensation
plans have been designed so as to qualify compensation paid under those plans to
the Chief Executive Officer and the Chief Operating Officer for deductibility
under Section 162(m) of the Internal Revenue Code of 1986 (the "Code"). From
time to time, however, the Compensation Committee may authorize the payment of
nondeductible compensation if it determines that such action would be in the
best interests of USA Waste's stockholders. For 1997, the Compensation Committee
determined that it was appropriate to pay Mr. Drury total compensation above the
limit set by Section 162(m) in order to achieve the underlying objectives of the
compensation program described in this Report.
In addition to base salary, USA Waste's executive compensation program in
1997 included incentive compensation in the form of annual bonuses (short-term
incentives) and grants of stock options, exercisable over ten years (long-term
incentives). The total amount of compensation paid to executives was determined
with reference to a peer group of Fortune 500 companies, which included USA
Waste's two principal domestic competitors. The Compensation Committee believes
that the various compensation programs within the peer group fairly represent
the types and levels of compensation USA Waste must be prepared to provide in
order to attract and retain qualified executives.
Base Salary. The Compensation Committee establishes base salaries for
executive officers annually in relation to base salaries paid within the peer
group. Base salaries may vary based on such factors as responsibility, current
performance and tenure.
Annual Bonus. In general, annual bonuses are based on corporate performance
in relation to one of the following approved goals: Company revenues, earnings
per share of Common Stock, pretax income, cash flow from operations, total cash
flow, return on equity, return on capital, return on assets, net operating
profits after
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<PAGE> 9
taxes, economic value added, total stockholder return, strategic growth or
return on sales, or any additional performance objectives which are measured
solely in terms of the attainment of quantitative targets related to USA Waste's
business, or any combination thereof.
The Compensation Committee may adjust the amount of any bonus based on (i)
individual performance, (ii) any of the above goals or (iii) other measures of
corporate performance, if in the opinion of the Compensation Committee, the
adjustment would be in the best interests of the stockholders.
Stock Options. The Company may grant stock options and other stock-related
incentives under the stockholder-approved USA Waste Services, Inc. 1993 Stock
Incentive Plan, as amended and restated (the "1993 Stock Incentive Plan"). The
1993 Stock Incentive Plan is intended to provide long-term incentives, the
ultimate value of which is determined by increases in the price of USA Waste
Common Stock.
No stock option can be granted at an exercise price of less than 100% of
fair market value on the day the option is granted. Each option must be
exercised within ten years after the date of grant, unless earlier terminated in
connection with termination of employment, and is exercisable (i) on and after
the first anniversary of the grant, to the extent of not more than 20% of the
number of shares covered by the option; (ii) on and after the second anniversary
of the grant, to the extent of not more than 40% thereof; (iii) on and after the
third anniversary of the grant, to the extent of not more than 60% thereof; and
(iv) not more than 80% on the fourth anniversary. The shares are fully vested at
the fifth anniversary.
Stock options were granted in 1997 to approximately 500 officers and
executives in amounts which were, in the judgment of the Compensation Committee,
directly related to the level of responsibility of the grantees as compared with
their peer group counterparts.
Chief Executive Officer Compensation. Under Mr. Drury's leadership in 1997,
USA Waste achieved increases in stockholder value, achieving outstanding record
results by every financial measure.
Operating revenues increased by 58%, from $1.6 billion in 1996, to $2.6
billion in 1997. Net income increased 81% to $358.4 million, from $197.5 million
in the prior year. Diluted earnings per share rose 51% to $1.62, compared to
$1.07 in 1996. These results reflect 40% for income taxes and exclude merger,
unusual and extraordinary pre-tax charges of $144.6 million in 1997 and $190.4
million in 1996, which reduced diluted earnings per share by $0.39 in 1997 and
$0.70 in 1996.
In addition, USA Waste has consistently managed its financial assets with
two objectives: (i) to provide ready access to capital for immediate growth
opportunities and (ii) to garner strength for future growth. In 1997, both
objectives were achieved. The Company raised $910 million from the sale of
Common Stock and convertible subordinated notes, representing one of the largest
equity and equity-linked financing transactions ever completed in the solid
waste industry. The Company also sold $1.1 billion of senior notes in two
separate issues, using the net proceeds to replace shorter-term debt at variable
rates with fixed-rate debt having longer maturities. The Company also increased
its bank credit facility twice during the year, from $1.2 billion to $1.6
billion, and subsequently to $2.0 billion.
Major strides toward increasing both the size and strength of the Company
were achieved in 1997 when the Company merged with United Waste Systems, Inc.
("United"). In addition to the United merger, the Company completed over 200
acquisitions in 1997 that provided access to many new markets and greatly
strengthened its position in existing markets throughout North America. Building
on its initial entry into Canada in 1996, two acquisitions were made during the
first quarter of 1997 that had a significant impact on the Company's presence
there: (i) the Canadian solid waste business of Allied Waste Industries,
consisting of 56 operations in major urban markets across six provinces and (ii)
the Canadian solid waste assets of WMI, adding 17 operations in four provinces.
Within one year of the Company's entry into the Canadian market, its subsidiary,
Canadian Waste, became the largest solid waste company in the country and now
has operations generating approximately $500 million in revenues.
By the end of 1997, the Company had completed acquisitions of
privately-held businesses that added approximately $725 million in annualized
revenues -- more than twice the level of 1996 acquisition activity.
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<PAGE> 10
In addition, the Company completed transactions with publicly traded companies
that added over $600 million in net annualized revenues.
In establishing each of the components of Mr. Drury's compensation, the
Compensation Committee relied in part on information developed with the
assistance of an executive compensation consulting firm. Based on such
information and an evaluation of his performance, the Compensation Committee
increased Mr. Drury's base salary to reflect increased salary levels among his
peer group counterparts.
In 1997, Mr. Drury received an annual bonus, as reported in the Summary
Compensation Table, based on USA Waste's performance with respect to earnings
per share.
The Compensation Committee also granted to Mr. Drury options to purchase
800,000 shares of USA Waste Common Stock, recognizing the extraordinary
performance of USA Waste in 1997.
Conclusion. Under USA Waste's executive compensation program, the total
compensation ultimately attainable by executive officers depends to a
significant degree upon the consistent achievement of corporate objectives that
lead to stockholder value and accordingly, has the desired result of aligning
the interests of the executive officers with those of the stockholders. The
pay-out of any incentive compensation is the result of overall corporate
performance, including earnings per share. The options grants, which have been
significant, have had the desired result of attracting talented executives into
USA Waste and properly aligning their interests with the interests of the USA
Waste stockholders. The result has been consistent, solid performance for the
stockholders of USA Waste.
The Compensation Committee:
Jerome B. York, Chairman
William E. Moffett
Alexander W. Rangos
PERFORMANCE GRAPH
The following performance graph compares the performance of USA Waste
Common Stock to the New York Stock Exchange Composite Index and to the Salomon
Smith Barney Solid Waste Index ("Peer Group Index") for the period of five years
commencing December 31, 1992, and ending December 31, 1997. The graph assumes
that $100 was invested on December 31, 1992, in USA Waste Common Stock and in
each index and that all dividends were reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD SSB SOLID NYSE
(FISCAL YEAR COVERED) USA WASTE WASTE INDEX COMPOSITE
<S> <C> <C> <C>
12/31/92 100 100 100
12/31/93 78 75 108
12/31/94 78 75 104
12/31/95 130 89 137
12/31/96 220 102 163
12/31/97 271 113 213
</TABLE>
8
<PAGE> 11
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth information with
respect to persons serving as USA Waste's Chief Executive Officer during 1997
and the four most highly compensated executive officers other than the Chief
Executive Officer whose total annual salary and bonus for 1997 exceeded $100,000
("named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
--------------------------- ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
John E. Drury 1997 $600,000 $660,000 800,000 $ 4,750
Chairman of the Board and 1996 563,000 625,000 725,000 4,750
Chief Executive Officer 1995 500,000 625,000 425,000 5,192
Rodney R. Proto 1997 $380,000 $440,000 400,000 $ 4,750
President and Chief 1996 317,700 360,000 822,500 8,807
Operating Officer 1995 269,791 260,000 30,000 11,784
David Sutherland-Yoest 1997 $330,000 $518,700 125,000 $ 4,750
Vice Chairman and Vice 1996 328,850 330,000 200,000 4,750
President -- Atlantic Region 1995 300,000 375,000 180,000 4,154
Earl E. DeFrates 1997 $275,000 $302,500 200,000 $ 4,750
Executive Vice President and 1996 238,450 275,000 150,000 4,750
Chief Financial Officer 1995 187,500 200,000 95,000 2,769
William A. Rothrock 1997 $152,250 $621,750 200,000 $ 4,750
Senior Vice President -- Business 1996 150,000 753,150 57,500 4,750
Development 1995 140,000 437,315 63,750 --
</TABLE>
- ---------------
(1) Includes contributions by the Company under its 401(k) plan.
The following table sets forth information concerning the grant of stock
options during 1997 to the named executive officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENTAGE POTENTIAL REALIZABLE VALUE AT
NUMBER OF OF TOTAL ASSUMED ANNUAL RATE OF
SHARES OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION -----------------------------
NAME GRANTED(1) FISCAL 1997 (PER SHARE) DATE 5% 10%
---- ---------- ------------ -------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
John E. Drury................ 800,000 21.46% $34.875 11/21/07 $17,546,160 $44,465,415
Rodney R. Proto.............. 400,000 10.73% $34.875 11/21/07 $ 8,773,080 $22,232,707
David Sutherland-Yoest....... 125,000 3.35% $34.875 11/21/07 $ 2,741,588 $ 6,947,721
Earl E. DeFrates............. 200,000 5.37% $34.875 11/21/07 $ 4,386,540 $11,116,354
William A. Rothrock.......... 200,000 5.37% $34.875 11/21/07 $ 4,386,540 $11,116,354
</TABLE>
- ---------------
(1) All of such options vest in increments of 20% per year over a period of five
years beginning on the first anniversary date of grant. In addition, all of
such options vest immediately upon a change of control of USA Waste as
defined in the 1993 Stock Incentive Plan.
(2) The potential realizable value of each grant of options assuming that the
market price of the underlying security appreciates in value from the date
of grant to the end of the option term at the rates of 5% and 10% compounded
annually.
9
<PAGE> 12
The following table sets forth information concerning the exercise of stock
options during 1997 by USA Waste's named executive officers:
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED
DECEMBER 31, 1997 IN-THE-MONEY OPTIONS AT
SHARES (SHARES) DECEMBER 31, 1997(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John E. Drury............... 952,500 1,847,500 $23,198,193 $23,275,533
Rodney R. Proto............. 150,000 $4,787,310 586,125 1,081,375 $15,445,207 $11,177,011
David Sutherland-Yoest...... 139,064 445,289 $ 2,881,533 $ 4,192,184
Earl E. DeFrates............ 163,000 392,000 $ 3,722,726 $ 6,905,202
William A. Rothrock......... 28,688 $ 701,980 40,187 284,675 $ 921,367 $ 2,569,965
</TABLE>
- ---------------
(1) Computed based upon the difference between aggregate fair market value based
on NYSE Composite Tape closing price on December 31, 1997 (of $39.25 per
share) and the aggregate exercise price.
EMPLOYMENT AGREEMENTS
Messrs. Drury, Proto and DeFrates are each parties to employment agreements
with USA Waste, which have continuously renewing terms of five years and which
provide for the payment of minimum annual base salaries and for participation in
all USA Waste benefit plans and programs. Mr. Sutherland-Yoest is a party to a
substantially similar employment agreement with USA Waste and Canadian Waste,
which has a continuously renewing term of five years. Mr. Rothrock is a party to
a substantially similar employment agreement with USA Waste, which has a
continuously renewing term of three years.
The employment agreements include provisions governing compensation and
severance benefits upon termination of employment with USA Waste and upon
certain changes of control of USA Waste.
In the event that the employment of the employee is terminated by reason of
death or total disability, the employment agreements provide that USA Waste
shall pay (i) all accrued and unpaid base salary of the respective employee,
(ii) all benefits to which the employee is entitled under any USA Waste benefit
plans or policies and (iii) the base salary which would have been payable to the
employee if he had continued in employment throughout the respective employment
term. In addition, all stock options held by the employee become fully vested.
The employment agreements provide that an employee's employment may be
terminated by USA Waste for cause (as defined in the employment agreements) or
without cause. In the event that an employee's employment is terminated for
cause, the employment agreements provide that USA Waste shall pay all accrued
and unpaid base salary of the respective employee and all benefits to which he
is entitled under any USA Waste benefit plans or policies through the
termination date. In the event that an employee's employment is terminated
without cause, the employment agreements provide that, in addition to amounts
payable upon a termination for cause, USA Waste shall pay to the respective
employee an amount equal to 75% of his total direct annual compensation (as
defined in the employment agreements), and maintain certain health benefits and
other insurance coverage for such employee and his spouse and dependents for a
specified period after termination.
The employment agreements may be terminated by the employee at any time
after providing USA Waste with 90 days written notice. In the event an employee
terminates the agreement, other than following a change of control of USA Waste,
the employee will be entitled to receive all of his accrued and unpaid base
salary and all benefits to which he is entitled under any USA Waste benefit
plans or policies through the termination date.
In connection with a change of control of USA Waste, the employment
agreements provide that the employee shall be paid certain compensation if such
employee resigns or is terminated from employment with USA Waste at any time
within six months of the change of control following the occurrence of any of
the
10
<PAGE> 13
following events: (i) a change of his reporting, responsibilities, titles or
offices as in effect immediately before the change of control; (ii) a reduction
in the employee's base salary as in effect immediately before the change of
control; (iii) a failure of USA Waste substantially to maintain and continue
employee's participation in all benefit plans; (iv) the change of the employee's
principal place of employment to a location more than 50 miles from the
employee's original place of employment; (v) failure of USA Waste to pay the
employee any compensation to which he is entitled within seven days of the date
such compensation is due; and (vi) failure of USA Waste to obtain an assumption
of the respective employment agreement by any successor to USA Waste.
The compensation payable to the employee upon such a resignation or
termination following a change of control shall include: (i) all accrued and
unpaid base salary of the respective employee; (ii) all benefits to which he is
entitled under any USA Waste benefit plans or policies; (iii) an amount equal to
$1.00 less than three times the employee's "base amount" within the full meaning
of Section 280G of the Code; (iv) the immediate vesting of all accrued and
unpaid benefits, awards and grants (including stock options); and (v) a bonus or
incentive compensation payment, pro-rated to the effective date of resignation
or termination. In the event that the benefits payable to the employee
constitute an "excess parachute payment" under Section 280G of the Code, the
employment agreements provide that USA Waste shall pay the employee an
additional amount to reimburse him on an after-tax basis for any excise tax
imposed on such payments under Section 4999 of the Code.
The employment agreements also include such non-competition,
non-solicitation and non-disparagement covenants as are customary, in nature and
scope, for such agreements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, Messrs. Moffett, Alexander Rangos and York served on the
Compensation Committee of the Board of Directors. During 1997, no executive
officer of USA Waste served as (i) a member of the compensation committee (or
other board committee performing equivalent functions) of another entity, one of
whose executive officers served on the Compensation Committee, (ii) a director
of another entity, one of whose executive officers served on the Compensation
Committee or (iii) a member of the compensation committee (or other board
committee performing equivalent functions) of another entity, one of whose
executive officers served as a director of USA Waste.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective November 11, 1997, following USA Waste's acquisition of United,
Mr. Shirvanian resigned as an employee in connection with the change of control
provisions in his employment agreement with USA Waste. In connection with the
termination of Mr. Shirvanian's employment agreement, USA Waste granted Mr.
Shirvanian certain severance benefits, including a cash payment of $200,000, the
issuance of 230,000 unregistered shares of Common Stock, and a warrant to
purchase 290,625 shares of Common Stock at $36.875 per share (the closing price
on the date of his termination). USA Waste has also agreed to allow Mr.
Shirvanian and his spouse to participate in the medical and dental insurance
plans of USA Waste until May 31, 2001 and has agreed to keep in force its
agreement to continue a split dollar life insurance agreement (the "Insurance
Agreement") entered into in 1995 by Western and Mr. and Mrs. Kosti Shirvanian
and Ms. Linda Shirvanian, as trustee for the Kosti and Marian Shirvanian Family
1995 Irrevocable Trust (the "Trust"). The Insurance Agreement provides for life
insurance on the life of Mr. Shirvanian or the lives of Mr. and Mrs. Shirvanian.
The beneficiary of the policy is the Trust. The beneficiaries of the Trust are
the descendants of Mr. and Mrs. Shirvanian. Under the Insurance Agreement, the
premium payment obligations are split between Western and the Trust. The
estimated discounted single premium payment required to pay in full the
obligations under the Insurance Agreement would be approximately $7 million, of
which approximately $2.35 million represents the Trust's share of such premium.
In connection with USA Waste's acquisition of Western, USA Waste assumed the
payment obligations of both Western and the Trust. All premium payments made by
USA Waste or Western are recoupable out of the death benefits of such policy.
Additionally, in connection with Mr. Shirvanian's employment termination, he has
agreed to certain non-competition provisions effective until December 31, 2002.
11
<PAGE> 14
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, USA Waste's directors, executive (and
certain other) officers and any person holding more than ten percent of USA
Waste Common Stock are required to report their ownership to USA Waste and the
Commission. Specific due dates for these reports have been established by
regulation and USA Waste is required to report in this Proxy Statement any
failure to file by these dates during 1997. All of these filings were satisfied
by USA Waste's directors, officers and ten percent holders, except that Messrs.
Heckmann, Alexander Rangos and John Rangos, Sr. each failed to file on a timely
basis one report concerning one transaction.
As of March 1, 1998, USA Waste believes that all directors, officers and
ten percent holders are current in their filings. In making these statements,
USA Waste has relied on the written representations of its directors, officers
and ten percent holders and copies of reports that they have filed with the
Commission.
APPROVAL OF AMENDMENT TO THE USA WASTE 1993 STOCK INCENTIVE PLAN
USA Waste has for many years utilized stock incentives as part of its
overall compensation program. The Board of Directors of USA Waste believes stock
options and stock-based incentives play an important role in attracting and
retaining the services of outstanding personnel and in encouraging such
employees to have a greater personal financial investment in USA Waste. For a
more detailed discussion, see the Compensation Committee Report above.
USA Waste stockholders approved the 1993 Stock Incentive Plan at their 1993
annual meeting. In 1995, in connection with USA Waste's acquisition of Chambers,
the stockholders of USA Waste approved an amendment to the 1993 Stock Incentive
Plan to increase shares available for issuance under the 1993 Stock Incentive
Plan from 1,000,000 to 4,000,000. In 1996, in connection with USA Waste's
acquisition of Western, the stockholders of USA Waste approved an amendment to
the 1993 Stock Incentive Plan to increase shares available for issuance under
the 1993 Stock Incentive Plan from 4,000,000 to 6,500,000.
The 1993 Stock Incentive Plan permits the granting, either alone or in
combination, of "nonqualified" stock options that do not qualify for beneficial
treatment under the Code, incentive stock options under Section 422 of the Code,
reload options, alternate appreciation rights, limited rights and stock bonuses.
Grants may be made to officers, other employees and consultants of USA Waste who
are responsible for or contribute to the management, growth, success and
profitability of USA Waste and who are designated by the Compensation Committee,
which administers the 1993 Stock Incentive Plan.
Stock options permit the recipient to purchase shares of USA Waste Common
Stock at a fixed price, determined on the date of grant, regardless of the fair
market value on the date of exercise. The holder of an alternative appreciation
right is entitled to receive the excess of the fair market value on the date of
exercise over the grant price of the right. Stock bonuses may provide the
recipient all of the rights of a USA Waste stockholder, including the right to
vote the shares and receive dividends; however, the stock may not be transferred
by the recipient until certain restrictions (as determined by the committee)
lapse.
The Board of Directors of USA Waste has amended the 1993 Stock Incentive
Plan to increase the number of shares of USA Waste Common Stock authorized for
granting of awards under the 1993 Stock Incentive Plan from 6,500,000 to
16,500,000 and has directed that such amendment be submitted for approval by a
vote of the Company's stockholders. As of the date of such amendment by the
Board of Directors, there were no shares available for awards under the 1993
Stock Incentive Plan. The Board of Directors of USA Waste believes the increase
in shares available under the 1993 Stock Incentive Plan was necessary to assure
that an adequate number of shares of USA Waste Common Stock would be available
for future award grants in order to provide appropriate incentives to employees
of USA Waste.
12
<PAGE> 15
The following table sets forth the number of stock options granted under
the 1993 Stock Incentive Plan, subsequent to the amendment by the Board of
Directors, to each of the following:
<TABLE>
<CAPTION>
NUMBER OF
NAME AND POSITION UNITS
----------------- ---------
<S> <C>
John E. Drury -- Chairman of the Board and Chief Executive
Officer................................................... 800,000
Rodney R. Proto -- President and Chief Operating Officer.... 400,000
David Sutherland-Yoest -- Vice Chairman and Vice
President -- Atlantic Region.............................. 125,000
Earl E. DeFrates -- Executive Vice President and Chief
Financial Officer......................................... 200,000
William A. Rothrock -- Senior Vice President -- Business
Development............................................... 200,000
Executive Group............................................. 2,125,000
Non-Executive Director Group................................ -0-
Non-Executive Officer Employee Group........................ 1,045,250
</TABLE>
Vote Required for Approval. The affirmative vote of the holders of a
majority of the shares of USA Waste Common Stock present or represented by proxy
and entitled to vote at the Meeting is required for stockholder approval.
Recommendation of the Board of Directors. The Board of Directors recommends
that USA Waste stockholders vote FOR the approval of the amendment to the 1993
Stock Incentive Plan to increase the number of shares of USA Waste Common Stock
that may be issued under the 1993 Stock Incentive Plan from 6,500,000 to
16,500,000.
INDEPENDENT ACCOUNTANTS
The independent accountants of USA Waste are Coopers & Lybrand L.L.P.
Representatives of Coopers & Lybrand L.L.P. will be present at the Meeting, will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions addressed to them.
PROPOSALS OF STOCKHOLDERS
The Board of Directors will consider proposals of stockholders intended to
be presented for action at the 1999 annual meeting of stockholders. A
stockholder proposal must be submitted in writing and be received at the
Company's principal executive offices, 1001 Fannin Street, Suite 4000, Houston,
Texas 77002, Attn: Corporate Secretary no later than December 9, 1998, to be
included in the Company's proxy statement relating to the 1999 annual meeting of
stockholders.
OTHER MATTERS
The Board of Directors of the Company does not know of any other matters to
be presented for action at the Meeting other than those listed in the Notice of
Meeting and referred to herein. If any other matters properly come before the
Meeting or any adjournment thereof, it is intended that the proxies solicited
hereby be voted thereon in accordance with the recommendations of the Board of
Directors of the Company.
13
<PAGE> 16
PROXY
USA WASTE SERVICES, INC.
ANNUAL MEETING OF STOCKHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS OF USA WASTE SERVICES, INC.
The undersigned hereby appoints John E. Drury, Earl E. DeFrates and Gregory
T. Sangalis as proxies, and each of them with full power of substitution, to
vote all shares of Common Stock, par value $.01 per share, of USA Waste
Services, Inc. that the undersigned is entitled to vote at the Annual Meeting of
Stockholders thereof to be held on May 19, 1998, or at any adjournment
thereof, as follows:
Any executed proxy which does not designate a vote shall be deemed to
grant authority for any item not designated.
ALL SHARES WILL BE VOTED AS DIRECTED HEREIN AND UNLESS OTHERWISE DIRECTED
WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1 AND "FOR" ITEM 2. YOU MAY REVOKE
THIS PROXY AT ANY TIME PRIOR TO A VOTE THEREON.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
================================================================================
1. To elect four members of the Board of Directors of USA Waste to serve as
Class III directors for a three-year term expiring at the USA Waste annual
meeting of stockholders to be held in the year 2001.
NOMINEES: Richard D. Kinder, Larry J. Martin,
Rodney R. Proto, Alexander W. Rangos
FOR WITHHELD
[ ] [ ]
[ ] ________________________________________
For all nominees, except as noted above
2. To approve an increase in the number of shares available for grant under
the Company's 1993 Stock Incentive Plan by 10,000,000 shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, on such other business as may properly come before
the meeting or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE COMPLETE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE ENCLOSED ENVELOPE.
Please sign as name appears on this card. Joint owners should each sign.
Executors, administrators, trustees, etc. should give their full title.
Signature: _____________________ Date: ______________
Signature: _____________________ Date: ______________
