SCHEDULE 14A - INFORMATION REQUIRED IN A PROXY STATEMENT
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SCHEDULE 14A INFORMATION
------------------------
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
- --------------------------------------------------------------------------------
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check
the appropriate box: [X] Preliminary Proxy Statement [ ] Confidential, for use
of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
- --------------------------------------------------------------------------------
WASTE SYSTEMS INTERNATIONAL, INC.
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of person(s) Filing Proxy Statements, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on the table below per Exchange Act rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the Date of its filing.
(1) Amount previously Paid:
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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>
WASTE SYSTEMS INTERNATIONAL, INC.
420 Bedford Street
Suite 300
Lexington, MA 02173
April __, 1999
Dear Stockholder:
You are invited to attend the 1999 Annual Meeting of Stockholders (the "Annual
Meeting") of Waste Systems International, Inc. (the "Company"), scheduled for
June 14, 1999 at 10:00 a.m. to be held at the offices of the Company, located at
420 Bedford St., Lexington, Massachusetts. In connection with the Annual
Meeting, enclosed is a Notice of the Annual Meeting and an accompanying Proxy
Statement for your review. We encourage you to review the enclosed material and
promptly return the enclosed Proxy Card.
As some of you will not be able to attend the Annual Meeting, we would like to
take this opportunity to update you on some of the significant events that have
occurred over the past year.
The following are some of the tasks the Company has accomplished
within the past year:
o Completed 34 acquisitions of landfills, collection companies and transfer
stations which significantly expanded the Company's operations entering
the Central Pennsylvania, Central Upstate New York and Central
Massachusetts markets.
o Completed ten acquisitions since January 1, 1999, which have
significantly increased the Company's presence within the geographic
regions in which it operates.
o Consummated the exchange of shares of Common Stock of the Company for a
portion of the Company's outstanding 7% Convertible Subordinated Notes
which resulted in an estimated savings to the Company of approximately
$4.4 million in interest payments over the course of the next 6 years.
o Completed an offering of $100.0 million aggregate principal amount of 11
1/2% Senior Notes which resulted in net proceeds to the Company of $97.3
million. The Company used a portion of the proceeds to repay certain debt
obligations and to repurchase 497,778 shares of the Company's common
stock. The Company intends to use the balance of the proceeds for
general corporate purposes, including possible future acquisitions and
working capital.
o Identified additional waste management opportunities to complement
current waste disposal and hauling operations.
<PAGE>
We also enclose the Company's 1998 Annual Report which provides more
detailed information regarding the Company's activities during the year.
With a continued focus on core business activities and the continued execution
of our plan to develop integrated waste management business opportunities, we
believe that Waste Systems International, Inc. can look forward to a very bright
future.
Sincerely,
Waste Systems International, Inc.
/s/ Philip Strauss /s/ Robert Rivkin
- ------------------- --------------------
Philip W. Strauss Robert Rivkin
Chairman, President and Executive Vice President - Acquisitions,
Chief Executive Officer Chief Financial Officer, Treasurer,
and Secretary
<PAGE>
Waste Systems International, Inc.
420 Bedford Street
Suite 300
Lexington, Massachusetts 02173
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY, JUNE 14, 1999
---------------
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") of Waste Systems International, Inc. ("WSI" or the "Company")
will be held on Monday, June 14, 1999 at 10 a.m., local time, at the offices of
the Company, 420 Bedford St., Lexington, Massachusetts for the following
purposes:
1. To elect the directors of the Company;
2. To consider and vote upon a proposal to amend the
Company's Amended and Restated Certificate of
Incorporation, as amended, to increase the number of
authorized shares of Common Stock, par value $.01 per
share, of 30,000,000 shares to 75,000,000 shares;
3. To consider and vote upon a proposal to approve the
amendment of the Company's Amended and Restated 1995 Stock
Option and Incentive Plan (the "Option Plan") to increase
the number of shares of the Company's Common Stock, par
value $.01 per share ("Common Stock"), reserved for
issuance under the Option Plan from 3,000,000 shares to
4,000,000 shares;
4. To consider and act upon a proposal to ratify the Board of
Director's selection of KPMG Peat Marwick LLP as the
Company's independent auditors for the current fiscal
year; and
5. To consider and act upon any other matters which may
properly be brought before the Annual Meeting and any
adjournments or postponements thereof.
Any action may be taken on the foregoing proposals at the Annual Meeting
on the date specified above or on any date or dates to which, by original or
later adjournment, the Annual Meeting may be adjourned, or to which the Annual
Meeting may be postponed.
The Board of Directors has fixed the close of business on April 26, 1999
as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournments or postponements thereof. Only
stockholders of record of the Company's Common Stock, at the close of business
on that date will be entitled to notice of and to vote at the Annual Meeting and
at any adjournments or postponements thereof.
<PAGE>
You are requested to fill in and sign the enclosed form of proxy (also
referred to herein and in the accompanying proxy statement as the "Proxy Card"),
which is being solicited by the Board of Directors, and to mail it promptly in
the enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.
By Order of the Board of Directors,
/s/ Robert Rivkin
----------------------
Robert Rivkin
Secretary
Lexington, Massachusetts
April __, 1999
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE POSTAGE-PREPAID
ENVELOPE PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN
PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
<PAGE>
WASTE SYSTEMS INTERNATIONAL, INC.
420 Bedford Street
Suite 300
Lexington, MA 02173
---------------
PROXY STATEMENT
---------------
FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 14, 1999
April ,1999
This proxy statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies by the Board of Directors of Waste Systems
International, Inc., a Delaware corporation (the "Company"), from stockholders
of the outstanding shares of the Company's capital stock for use at the 1999
Annual Meeting of Stockholders of the Company to be held on June 14, 1999, and
any adjournments or postponements thereof (the "Annual Meeting"), for the
purposes set forth in the accompanying Notice of Annual Meeting.
This Proxy Statement, the accompanying Notice of Annual Meeting and the
form of proxy (also referred to herein as the "Proxy Card") are first being sent
to stockholders on or about [April 30, 1999]. The Board of Directors has fixed
the close of business on April 26, 1999 as the record date for the determination
of stockholders entitled to notice of and to vote at the Annual Meeting (the
"Record Date"). Only stockholders of record of the Company's common stock, $.01
par value per share (the "Common Stock") at the close of business on the Record
Date will be entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, there were an aggregate of [_________ ] shares of Common Stock and
Common Stock equivalents outstanding and eligible to vote at the Annual Meeting.
Holders of Common Stock outstanding as of the close of business on the Record
Date will be entitled to one vote for each share.
The presence, in person or by proxy, of holders of shares of voting
stock representing a majority of the voting power of the outstanding shares of
voting stock issued, outstanding, and entitled to vote at a meeting of
stockholders is necessary to constitute a quorum for the transaction of business
at the Annual Meeting. The affirmative vote of the holders of a majority of the
outstanding voting power, present in person or represented by proxy at the
Annual Meeting and entitled to vote on the matter, is required for the approval
of any proposal or matter other than the election of directors. Directors shall
be elected by a plurality of the shares present in person or represented by
proxy at the Annual Meeting, entitled to vote in the election of directors, and
cast in such election. Shares that reflect abstentions or "broker nonvotes"
(i.e., shares represented at the Annual Meeting held by brokers or nominees as
to which instructions have not been received from the beneficial owners or
persons entitled to vote such shares and, with respect to one or more but not
all issues, such brokers or nominees do not have discretionary voting power to
vote such shares) will be counted for purposes of determining whether a quorum
is present for the transaction of business at the Annual Meeting, except in the
case of Proposal 2, which requires the affirmative vote of a majority of the
outstanding Common Stock for approval. With respect to the election of
directors, votes may be cast only in favor of or withheld from each nominee;
votes that are withheld will be excluded entirely from the election and will
have no effect.
Stockholders of the Company are requested to complete, date, sign and
promptly return the accompanying Proxy Card in the enclosed postage-prepaid
envelope. Shares represented by a properly executed proxy received prior to the
vote at the Annual Meeting and not revoked will be voted at the Annual Meeting
<PAGE>
as directed on the Proxy Card. If a properly executed proxy is submitted and no
instructions are given, the proxy will be voted FOR (i) the election of the
nominees for directors of the Company named in this Proxy Statement; (ii) the
amendment of the Articles of Organization to increase the number of authorized
shares of Common Stock from 30,000,000 to 75,000,000; (iii) the amendment of the
Option Plan to increase the number of shares of Common Stock authorized
thereunder from 3,000,000 shares to 4,000,000 shares; and (iv) the ratification
and approval of the selection of KPMG Peat Marwick LLP as the Company's
independent auditors for the current fiscal year. It is not anticipated that any
matters other than those set forth in this Proxy Statement will be presented at
the Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the discretion of the proxy holders.
A stockholder of record may revoke a proxy at any time before it has
been exercised by filing a written revocation with the Secretary of the Company
at the address of the Company set forth above, by filing a duly executed proxy
bearing a later date, or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the Record Date attending the
Annual Meeting may vote in person whether or not a proxy has been previously
given, but the presence (without further action) of a stockholder at the Annual
Meeting will not constitute revocation of a previously given proxy.
The Company' s Annual Report on Form 10-K, including financial
statements, for the fiscal year ended December 31, 1998 (the "1998 Form 10-K"),
is being mailed to stockholders concurrently with this Proxy Statement. The 1998
Form 10-K, however, is not part of the proxy solicitation materials, except for
certain parts of the 1998 Form 10-K which are expressly incorporated by
reference herein. See "Incorporation of Certain Documents by Reference."
(Item 1 of the Proxy Card)
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors has nominated seven individuals to serve as
directors of the Company (the "Nominees"). All of the Nominees are currently
serving as directors of the Company. The Board of Directors anticipates that
each of the Nominees will serve, if elected, as a director. However, if any of
the Nominees is unable to accept election, the proxies will be voted for the
election of such other person or persons as the Board of Directors may
recommend. Directors serve for one-year terms expiring on the date of the
Company's 2000 Annual Meeting and until their successors are duly elected and
qualified.
Approval of this proposal requires a plurality of the votes present in person
or represented at the meeting. The Board of Directors recommends a vote
FOR the Nominees.
Information Regarding Nominees and Executive Officers
The following table and biographical descriptions set forth certain
information as of March 15, 1999, unless otherwise specified, with respect to
the seven Nominees based on information furnished to the Company by each
Nominee.
<PAGE>
Directors
Director
Name Age Since
- --------------------- --- --------
Nominees
Philip W. Strauss 50 1996
Robert Rivkin 40 1997
Jay Matulich 44 1995
David J. Breazzano 42 1997
Charles Johnston 64 1997
Judy K. Mencher 42 1997
William B. Philipbar 73 1997
Philip W. Strauss. Mr. Strauss has been Chief Executive Officer and
President of the Company since March 27, 1996 and Chairman of the Board since
June 24, 1996. Previously Mr. Strauss had been Executive Vice President and
Chief Operating Officer ofthe Company ince September 19, 1995. He has 24 years
of experience in project, business and corporate development. Mr. Strauss was
co-founder of BioMedical Waste Systems, Inc., a publicly-held waste managemen
firm, where he served as Executive Vice President from its inception in 1987
until May 1992 and as a Director from inception until May 1993.
Robert Rivkin. Mr. Rivkin, a Certified Public Accountant, has been
Executive Vice President - Acquisitions of the Company since April 1998, Vice
President and Chief Financial Officer since March 1995, Secretary since May 1995
and Treasurer since June 1996. Mr. Rivkin was first elected to the Board of
Directors in June 1997. For the six-year period prior to joining the Company,
Mr. Rivkin was a principal at The Envirovision Group Inc., a full service
environmental engineering, consulting and contracting company, where he was
responsible for finance, marketing and strategic planning. Previously, Mr.
Rivkin practiced public accounting in New York, where he specialized in mergers
and acquisitions, initial public offerings and Securities and Exchange
Commission ("SEC") reporting.
Jay J. Matulich. Mr. Matulich has been a member of the Board of
Directors since March 1995. Mr. Matulich is a Managing Director of International
Capital Growth Limited ("ICG"), formerly Capital Growth International L.L.C.
and U.S. Sachem Financial Consultants, L.P. He has held this position since
1994. From May 1990 to October 1994, Mr. Matulich was a Vice President of
Gruntal& Co., Incorporated, investment bankers.
David J. Breazzano. Mr. Breazzano has been a member of the Board of
Directors since June 1997. Mr. Breazzano is one of the two principals at DDJ
Capital Management, LLC, which was established in 1996. He has more than 18
years of investment experience and served as a Vice President and Portfolio
Manager at Fidelity Investments ("Fidelity") from 1990 to 1996. Prior to joining
Fidelity, Mr. Breazzano was President and Chief Investment Officer of the T.
Rowe Price Recovery Fund. Mr. Breazzano also serves as a Director of Key Energy
Group, Inc. and Samuel Jewelers, Inc.
Charles Johnston. Mr. Johnston has been a member of the Board of
Directors since June 1997. During the past 10 years he has served on various
boards of directors. Mr. Johnston is currently Chairman of Ventex Technology of
Riviera Beach, Florida and has held that position since 1993. He is also
currently Chairman of AFD Technologies of Jupiter, Florida. He was previously
founder, Chairman, and CEO of ISI Systems, a public company listed on the
American Stock Exchange prior to being sold to Teleglobe Corporation of
Montreal, Quebec, Canada. Mr. Johnston also serves as Trustee of Worcester
Polytechnic Institute, Worcester, Massachusetts, as well as Trustee for the
Institute of Psychiatric Research, University of Pennsylvania, Philadelphia,
Pennsylvania. In addition, he serves as director of the following companies -
Kideo Productions and Infosafe Systems both of New York City, Hydron
Technologies Inc. of Boca Raton, Florida and Spectrum Signal Processing of
Vancouver, British Columbia, Canada.
<PAGE>
Judy K. Mencher. Ms. Mencher has been a member of the Board of Directors
since August 1997. Ms. Mencher is one of the two principals at DDJ Capital
Management, LLC, which was established in 1996. From 1990 to 1996, Ms. Mencher
was at Fidelity working in the Distressed Investing Group. Prior to joining
Fidelity in 1990, Ms. Mencher was a Partner at the law firm of Goodwin, Procter
& Hoar LLP specializing in bankruptcy and creditors' rights.
William B. Philipbar. Mr. Philipbar was first elected a director
of the Company in May, 1996. He resigned as a director of the Company in June,
1997 and was reelected to the Board of Directors in August, 1997. Since
December, 1997, Mr. Philipbar has been a part-time consultant for the Company in
connection with the Company's consideration of proposed acquisitions and other
strategic matters. Prior to becoming a director of the Company, Mr. Philipbar
served as Chairman of the Delaware Solid Waste Authority from 1977 to 1987 and
was President and Chief Executive Officer of Rollins Environmental Corp. from
1973 to 1984. He has been a Director of Matlack Systems, Inc. and Rollins Truck
Leasing Corp. since 1993. Until 1995 he was also an advisor to Charles River
Ventures.
The Board of Directors and Its Committees
- -----------------------------------------
Board of Directors
The Company's Board of Directors consists of seven members, a majority
of whom is independent of the Company's management. Each director holds office
for a term from election until the next Annual Meeting of the Company's
stockholders and until his or her successor is duly elected and qualified.
The Board of Directors held 5 meetings during fiscal year 1998. Each of
the Company's directors attended at least 80% of the total number of meetings of
the Board of Directors and of the committees of the Company of which he or she
was a member.
The Board of Directors has appointed a Compensation Committee and an
Audit Committee.
Compensation Committee. The Compensation Committee currently consists
of Messrs. Johnston and Strauss and Ms. Mencher. The Compensation Committee
makes recommendations and exercises all powers of the Board of Directors in
connection with certain compensation matters, including incentive compensation
and benefit plans. The Compensation Committee (excluding Mr. Strauss)
administers, and has authority to grant awards under, the Waste Systems
International, Inc. 1995 Amended and Restated Stock Option and Incentive Plan
(the "Option Plan") to the employee directors and management of the Company and
its subsidiaries, other key employees and consultants.The Compensation Committee
held 2 meetings during fiscal year 1998.
Audit Committee. The Audit Committee currently consists of Messrs.
Breazzano, Matulich and Philipbar. The Audit Committee is empowered to recommend
to the Board of Directors the appointment of the Company's independent public
accountants and to periodically meet with such accountants to discuss their
fees, audit and non-audit services, and the internal controls and audit results
for the Company. The Audit Committee also is empowered to meet with the
Company's accounting personnel to review accounting policies and reports. The
Audit Committee held 2 meetings during fiscal year 1998.
Director Compensation
The Company does not currently pay cash compensation to its directors.
Non-employee directors are entitled to stock option grants under the Amended and
Restated Waste Systems International, Inc. 1995 Stock Option Plan for
Non-Employee Directors (the "Director Plan"). The Director Plan provides for the
automatic granting to Independent Directors (as defined in the Director Plan) of
options that do not qualify as incentive stock options (referred to as "Stock
Options") under Section 422 of the Code. Under the terms of the Director Plan,
each Independent Director who first becomes a director of the Company on or
after June 30, 1997 shall automatically be granted on the date he or she becomes
a director of the Company a Stock Option to purchase 20,000 shares of the
Company's common stock ("Common Stock"). In addition, the Director Plan provides
that each Independent Director shall automatically be granted, at the beginning
of each calendar year in which he or she is serving as an Independent Director,
<PAGE>
a Stock Option to acquire 10,000 shares of Common Stock. Each Independent
Director entering service after the start of any calendar year will
automatically be granted on the effective date of his or her Board membership a
Stock Option to acquire a portion of 10,000 shares of Stock prorated to reflect
the remaining portion of such calendar year. The exercise price per share for
the Common Stock covered by any Stock Option granted under the Director Plan
shall be equal to the fair market value of the Common Stock on the date such
option is granted.
Other than Stock Options to acquire 20,000 shares of Stock granted
automatically to each new director joining the Board of Directors on or after
June 30, 1997, which Stock Options vest immediately upon grant, options granted
under the Director Plan vest at a rate of 25% of the total number of shares of
Common Stock purchasable under such option for each year that the holder remains
a director of the Company, such vesting to take place at the end of each of the
first four calendar years following issuance of such options. An option issued
under the Director Plan shall not be exercisable after the expiration of ten
years from the date of grant.
Mr. William Philipbar, a non-employee director of the Company, serves as
a part-time consultant in connection with the Company's consideration of
proposed acquisitions and other strategic matters. Mr. Philipbar's compensation
for providing such consulting services for up to four days per month, as
requested by the Company, consists of grants under the Director Plan of options
to acquire 25,000 shares of Common Stock to be granted on January 1 of each year
so long as Mr. Philipbar continues to be so retained by the Company.
These options vest in full at the end of the year in which services are
provided. Mr. Philipbar was granted options to acquire 25,000 shares of Common
Stock each on January 1, 1998 and January 1, 1999.
Executive Officers
Set forth below is certain information regarding the executive officers
of the Company as of the Record Date, including their principal occupation and
business experience for at least the last five years.
Name Age Position
- ------------------------- ------- ----------------------------------------
Philip W. Strauss.............50........Chief Executive Officer and President
Robert Rivkin.................40........Executive Vice President - Acquisitions,
Chief Financial Officer, Secretary and
Treasurer
Michael J. Leannah............46........Senior Vice President and Chief
Operating Officer
Joseph E. Motzkin.............56........Vice President - Acquisitions
Arthur Streeter...............39........Vice President and General Counsel
- -----------------
The principal occupation and business experience for at least the last
five years of each executive officer of the Company, other than executive
officers also serving as directors, is set forth below.
Michael J. Leannah. Mr. Leannah has been a Senior Vice President and
the Chief Operating Officer of the Company since July 1998. Prior to joining the
Company, he was an Operating Vice President at Superior Services, Inc. From
1986 to 1997, he held various management positions at Waste Management,
Inc., most recently serving as Vice President, Operations and State President.
Joseph E. Motzkin. Mr. Motzkin has been a Vice President of the
Company since August 1996. From 1994 to 1996, Mr. Motzkin was a General
Manager at Prins Recycling Corporation where he established recycling programs
and directed sales programs and customer service activities. From 1989 to 1994,
he was a General Manager at Laidlaw Waste Systems where he was responsible for
their New England operations. Mr. Motzkin has 26 years of experience in the
solid waste management business.
<PAGE>
Arthur Streeter. Mr. Streeter has been Vice President and General
Counsel since February 1998. Prior to joining the Company, he was a Partner
at Goldstein Manello, a law firm based in Boston, Massachusetts, where he gained
12 years of experience representing both private and public companies.
Each of the executive officers holds his or her respective office until
the regular annual meeting of the Board of Directors following the annual
meeting of stockholders and until his or her successor is elected and qualified
or until his or her earlier resignation or removal.
EXECUTIVE COMPENSATION
The following sections of this Proxy Statement set forth and describe
the compensation paid or awarded during the last three years to the Company s
Chief Executive Officer and the four other most highly compensated executive
officers.
Summary Compensation Table. The following table sets forth the aggregate
cash compensation paid by the Company with respect to the fiscal years ended
December 31, 1998, 1997 and 1996 to the Company's Chief Executive Officer and
the three other senior executive officers in office on December 31, 1998 who
earned at least $100,000 in cash compensation during 1998 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Annual Shares
Compensation Underlying
Salary Options (1)
Name and Principal Position Year ($) (#)
- -------------------------------------------------- ---- ------------ -----------
<S> <C> <C> <C>
Philip Strauss(2) 1998 188,172 250,000
Chairman of the Board, 1997 162,504 522,859
President and Chief 1996 150,000 50,000(2)
Executive Officer
Robert Rivkin 1998 187,506 250,000
Executive Vice President - Acquisitions, 1997 162,504 522,859
Chief Financial Officer, Secretary and Treasurer 1996 150,000 41,250
Joseph Motzkin(3) 1998 118,060 40,000
Vice President - 1997 110,000 19,300
Acquisitions
Arthur Streeter(4) 1998 118,428 40,000
Vice President and
General Counsel
</TABLE>
(1) All information with respect to outstanding options, including shares
issuable or issued and exercise prices payable or paid per share, has
been adjusted to reflect the 1-for-5 reverse stock split effected
February 13, 1998.
(2) Includes the options to acquire 40,000 shares of Common Stock granted in
1995 and repriced in 1996.
<PAGE>
(3) Includes Mr. Motzkin's salary for 1998 and 1997 only as Mr. Motzkin did
not join the Company until the third quarter of 1996.
(4) Includes Mr. Streeter's salary for 1998 only as Mr. Streeter joined the
Company in February 1998.
Option Grants in Fiscal Year 1998. The following table sets forth the
options granted during fiscal year 1998 and the value of the options held on
December 31, 1998 by the Company's Named Executive Officers.
OPTION GRANTS IN FISCAL YEAR 1998 (1)
-------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Percent of Total
Number of Options Granted Exercise or Grant Date
Shares Underlying to Employees in Base Price Expiration Present
Name Options Granted (#) Fiscal Year ($/share) Date Value$(2)
- ------------------ -------------------- ----------------- ----------- ----------- ---------
Philip Strauss 250,000 24% $6.25 4/17/08 $767,000
Robert Rivkin 250,000 24% $6.25 4/17/08 $767,000
Michael Leannah 75,000 7% $9.25 7/20/08 $126,525
Joseph Motzkin 40,000 4% $6.25 4/17/08 $122,720
Arthur Streeter 30,000 3% $3.44 2/2/08 $50,610
Arthur Streeter 10,000 1% $6.25 4/17/08 $30,680
</TABLE>
(1) All information with respect to outstanding options, including shares
issuable or issued and exercise prices payable or paid per share, has
been adjusted to reflect the 1-for-5 reverse stock split effected
February 13, 1998.
(2) The grant date present value was determined using the Black Scholes
option pricing model with the following weighted average assumptions:
volatility, 50%; expected dividend yield, 0%; risk free interest rate,
4.75%; and expected life, 5 years.
Option Exercises and Year-End Holdings. The following table sets forth
the options exercised during fiscal year 1998 and the value of the options held
on December 31, 1998 by the Company's Named Executive Officers.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1998
AND FISCAL YEAR-END 1998 OPTION VALUES
<S> <C> <C> <C> <C>
Number of Value of
Shares Securities Underlying Unexercised in-the-
Acquired On Value Unexercised Options Money Options at
Name Exercise (#) Realized ($) at Fiscal Year-End (#) Fiscal Year-End ($)
- --------------- ------------- ------------- --------------------------- ----------------------------
Exercisable Unexercisable Exercisable Unexercisable
Philip Strauss 0 0 180,715 642,144 $739,847 $2,628,937
Robert Rivkin 0 0 180,715 642,144 $739,847 $2,628,937
Joseph Motzkin 0 0 9,825 59,475 $40,224 $79,731
</TABLE>
Employment Agreements. On June 30, 1998, the Company and Mr. Strauss
entered into an employment agreement. The terms of the agreement provide (i)
that Mr. Strauss shall serve as the Company's President and Chief Executive
Officer, (ii) that he receive a salary of $200,000 per year through June 30,
<PAGE>
1999 and $225,000 per year through June 30, 2000 and (iii) that he agree not to
compete with the Company following termination of his employment for a period of
one year following the termination. In the event that Mr. Strauss is terminated
for cause (as defined in the agreement), he shall not be bound to the
non-competition provisions. The Company's agreement with Mr. Strauss is
effective until June 30, 2000 and, absent ninety-day notice from either party to
the contrary, shall be extended automatically for subsequent one-year terms upon
the expiration of the then current term of the agreement. The Company's
agreement with Mr. Strauss may be terminated at any time by the mutual consent
of the parties.
On June 30, 1998, the Company and Mr. Rivkin entered into an employment
agreement. The terms of the agreement provide (i) that he receive a salary of
$200,000 per year through June 30, 1999 and $225,000 per year through June 30,
2000 and (ii) that he agree not to compete with the Company following
termination of his employment for a period of one year following the
termination. In the event that Mr. Rivkin is terminated for cause (as defined in
the agreement), he shall not be bound to the non-competition provisions. The
Company's agreement with Mr. Rivkin is effective until June 30, 2000 and, absent
ninety-day notice from either party to the contrary, shall be extended
automatically for subsequent one-year terms upon the expiration of the then
current term of the agreement. The Company's agreement with Mr. Rivkin may be
terminated at any time by the mutual consent of the parties.
Stock Performance Graph
The Securities and Exchange Commission requires the Company to present a
chart comparing the cumulative total shareholder return on its Common Stock with
the cumulative total shareholder return of (i) a broad equity market index and
(ii) a published industry index or peer group. Although such a chart would
normally be for a five-year period, the Common Stock has been listed on the
Nasdaq Small-Cap Market only since November 14, 1995 and, as a result, the
following chart reflects only the period during which the Common Stock has been
listed on that market. The chart compares the Common Stock with (i) the Center
for Research in Security Prices Nasdaq Market Value Index (the "Nasdaq Index")
and (ii) the Center for Research in Security Prices Waste Management Industry
Index (the "Waste Management Index"). The total return for each of the Common
Stock, the Nasdaq Index and the Waste Management Index assumes the reinvestment
of dividends, although dividends have not been declared on the Company's Common
Stock. This chart assumes an initial investment of approximately $100 on
November 14, 1995 in the stocks comprising the Nasdaq Index and the stocks
comprising the Waste Management Index and an initial investment of $100 in the
Company s Common Stock. The Nasdaq Index tracks the aggregate price performance
of all domestic equity securities traded on the Nasdaq Market.
1995 1995 1996 1997 1998
----- ------ ------ ------ ------
Waste Systems International, Inc. 100.0 89.33 14.00 16.00 23.47
Industry Index 100.0 107.37 133.17 136.11 118.20
Broad Market 100.0 101.13 125.67 153.73 216.82
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Report of the Compensation Committee
The Compensation Committee's executive compensation philosophy is to
establish competitive levels of compensation, link management's pay to the
achievement of the Company's performance goals, and enable the Company to
attract and retain qualified management. The Company's compensation policies
seek to align the financial interests of senior management of the Company with
those of its stockholders.
Base Salary. The Company has established base salary levels for senior
management based on a number of factors, including market salaries for such
positions, the responsibilities of the position, the experience, and the
required knowledge of the individual. The Compensation Committee attempts to fix
base salaries on a basis generally in line with base salary levels for
comparable companies.
Incentive Compensation. During each fiscal year the non-employee
directors who are members of the Compensation Committee may consider granting
senior executives of the Company awards under the Option Plan. Such awards are
based on various factors, including both corporate and individual performance
during the preceding year and incentives to reach certain goals during future
years.
Compensation of Chief Executive Officer. Philip W. Strauss, the
Company's Chief Executive Officer and President, receives competitive
compensation and regular benefits in effect for senior executives of the
Company. During 1998, the Compensation Committee increased Mr. Strauss' annual
base salary from $162,504 to $188,172 as determined on the same basis as other
senior executives of the Company, based on the factors noted above in "Report of
the Compensation Committee - Base Salary". In addition to such cash
compensation, Mr. Strauss also received options to acquire an aggregate of
250,000 shares of Common Stock at exercise prices at and above the fair market
value of the Common Stock on the date of grant. The vesting of all of such
options accelerates upon a sale of the Company.
Submitted by the Compensation Committee:
Philip W. Strauss
Charles Johnston
Judy K. Mencher
Compensation Committee Interlocks and Insider Participation
Currently, Philip W. Strauss, Charles Johnston and Judy K. Mencher serve
on the Compensation Committee. Philip W. Strauss, in addition to serving as
a member of the Compensation Committee, is the Chief Executive Officer and
President. No other member of the Compensation Committee in 1998 ever served as
an officer of the Company.
Principal Management and Stockholders
The following table presents information as to all directors and senior
executive officers of the Company as of March 31, 1999 and persons or entities
known to the Company to be beneficial owners of more than 5% of the Company's
Common Stock as of March 31, 1999, unless otherwise indicated, based on
representations of officers and directors of the Company and filings received by
the Company on Schedules 13D and 13G or Form 13F under the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
<PAGE>
Beneficial Ownership
--------------------
Common Stock
- --------------------------------------------------------------------------------
# of Shares % of Class
Beneficially Beneficially
Owned Owned(2)
Directors, Executive Officers and 5% Stockholders (1)
- --------------------------------------------------------------------------------
B-III Capital Partners, L.P.(3) 6,367,406 42.3%
c/o DDJ Capital Management, LLC
141 Linden Street
Wellesley, MA 02181
The Prudential Insurance Company of America (4) 838,184 6.2%
100 Mulberry Street
Newark, NJ 07102
PaineWebber High Income Fund (5) 1,950,058 13.7%
1285 Avenue of the Americas
New York, NY 10019
John Hancock Advisers(6) 1,417,794 9.9%
101 Huntington Avenue
Boston, MA 02199
BEA Associates (Credit Suisse)(7) 700,000 4.9%
153 East 53 Street, 57th Floor
New York, NY 10022
Dawson Samberg Capital Management, Inc,(8) 735,000 5.1%
354 Pequot Avenue
Southport, CT 06490
David J. Breazzano(9) 6,750 *
Charles Johnston(10) 6,750 *
Jay Matulich(11) 7,000 *
Judy K. Mencher(9) 6,685 *
Joseph Motzkin(12) 45,553 *
William B. Philipbar(13) 31,685 *
Robert Rivkin(14) 261,168 2.3%
Philip W. Strauss(15) 260,993 2.3%
Arthur Streeter (16) 10,000 *
All directors and officers as a
Group (8 persons) 636,584 4.5%
less than 1%
(1) The persons named in the table have sole voting and investment power
with respect to all shares shown as beneficially owned by them subject
to community property laws where applicable and the information
contained in footnotes to this table.
<PAGE>
(2) Based on 13,464,654 shares of Common Stock issued and outstanding as of
March 31, 1999. As of March 31, 1999, the Company had outstanding 7%
Convertible Subordinated Notes (the "Notes") due 2005 which are
currently convertible at the option of the holder into an aggregate
6,175,241 shares of Common Stock at a conversion price of $10.00 as set
forth in the Notes. The Company has completed (subject to the conditions
discussed below) a private exchange offering with respect to the Notes,
pursuant to which it has issued (or will issue) 2,244,109 shares in
exchange for the tender of 7% Subordinated Notes at the face value of
their principal amount (plus a cash payment for accrued interest). The
exchange price for Common Stock issued in such exchange offer was $4.656
per share, or $5.34 per share less than the $10 per share conversion
price under the terms of the 7% Convertible Subordinated Notes.
Completion of the exchange offer with respect to one noteholder
participant, B-III Capital Partners, L.P. ("B-III"), is contingent upon
such holder's obtaining regulatory approvals under the Hart-Scott-Rodino
Antitrust Improvements Act. The Company has already issued 1,024,011
shares in such exchange offer; assuming B-III receives the required
regulatory approval, the Company will issue an additional 1,220,098
shares, for an aggregate of 2,244,109 shares of Common Stock in the
exchange offer at an exchange price of $4.656 per share. In accordance
with rules promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"), as amended, foregoing shares issuable upon conversion
of the 7% Convertible Subordinated Notes are included in this table only
for those holders with the right to acquire such shares within 60 days
from the date of this report, to the extent such holder could acquire
additional shares.
(3) Includes 3,567,406 shares of Common Stock currently owned and 2,800,000
shares issuable upon conversion of 7% Convertible Subordinated Notes at
a conversion price of $10.00 as set forth in the Note. DDJ Capital
Management, LLC ("DDJ") serves as the investment manager to B-III
Capital Partners, L.P. ("B-III"); an affiliate of DDJ acts as the
general partner of B-III. Assuming its pro rata participation in the
private exchange offering described in footnote 2 above, B-III will hold
an additional 652,020 shares of Common Stock.
(4) Includes 678,761 shares of Common Stock currently owned and 159,423
shares issuable upon conversion of 7% Convertible Subordinated Notes at
a conversion price of $10.00 as set forth in the Note. The Common Stock
and Notes are held for the benefit of certain registered investment
companies over which Prudential or The Prudential Investment Corporation
("PIC") may have direct or indirect voting and/or investment discretion,
with respect to which Prudential has advised the Company that Prudential
and PIC disclaim beneficial ownership.
(5) Includes 928,168 shares of Common Stock currently owned and 797,115
shares issuable upon conversion of 7% Convertible Subordinated
Notes at a conversion price of $10.00.
(6) Includes 501,112 shares of Common Stock currently owned and 916,682
shares issuable upon conversion of 7% Convertible Subordinated Notes
at a conversion price of $10.00.
(7) Includes 700,000 shares issuable upon conversion of 7% Convertible
Subordinated Notes at a conversion price of $10.00.
(8) Includes 585,000 shares of Common Stock currently owned and 150,000
shares issuable upon conversion of 7% Convertible Subordinated Notes
with a conversion price of $10.00.
(9) Includes 6,750 shares subject to stock options which are fully vested
and currently exercisable and excludes those shares owned by B-III,
which Mr. Breazzano and Ms. Mencher may be deemed to beneficially own as
a result of Mr. Breazzano's and Ms. Mencher's interest in DDJ, however,
such beneficial ownership is disclaimed. Both Mr. Breazzano and Ms.
Mencher are managing members of DDJ.
<PAGE>
(10) Includes 6,750 shares subject to stock options which are fully vested
and currently exercisable.
(11) Includes 2,000 shares of Common Stock currently owned and 5,000 shares
subject to stock options which are fully vested and currently
exercisable.
(12) Includes 18,403 shares of Common Stock currently owned and 27,150
shares subject to stock options which are fully vested and currently
exercisable.
(13) Includes 31,685 shares subject to stock options which are fully vested
and currently exercisable.
(14) Includes 17,953 shares of Common Stock currently owned and 243,215
shares subject to stock options which are fully vested and currently
exercisable.
(15) Includes 17,778 shares of Common Stock currently owned and 243,215
shares subject to stock options which are fully vested and currently
exercisable.
(16) Includes 10,000 shares subject to stock options which are fully vested
and currently exercisable.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company s executive
officers and directors, and persons who own more than 10% of a registered class
of the Company s equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC") and the Nasdaq
Small-Cap Market. Officers, directors and greater than 10% stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. To the Company s knowledge, based solely on review of the
copies of such reports furnished to the Company and written representations that
no other reports were required during the fiscal year ended December 31, 1998,
all Section 16(a) filing requirements applicable to its executive officers,
directors and greater than 10% beneficial owners were satisfied.
Certain Relationships and Transactions
Mr. William Philipbar, a Non-Employee Director of the Company, is
retained by the Company as a part-time consultant in connection with the
Company's consideration of proposed acquisitions and other strategic matters.
See "Director Compensation."
<PAGE>
(Item 2 of the Proxy Card)
PROPOSAL 2
APPROVAL OF AMENDMENT TO
THE CERTIFICATE OF INCORPORATION
The second proposal to be acted upon at the Annual Meeting is a proposal
to amend Article IV of the Company's Amended and Restated Certificate of
Incorporation, as amended, to increase the aggregate number of authorized shares
of Common Stock by 45,000,000 shares (the "Additional Shares"), from 30,000,000
to 75,000,000 shares. The Additional Shares will have the same voting, dividend
and other rights of shares of Common Stock that are currently authorized.
Reasons for the Proposal
The proposed increase in the authorized Common Stock has been
recommended by the Board of Directors to assure that an adequate supply of
authorized and unissued shares is available for general corporate needs, such as
possible future stock dividends or stock splits, possible future equity
financings, issuances under the Company's employee benefit plans or issuances in
connection with possible future acquisitions of other companies. As of April 26,
1999: (a) 13,464,654 shares of the 30,000,000 authorized shares of Common Stock
were issued and outstanding; (b) 4,955,143 additional shares were reserved for
issuance upon conversion of $49,551,428 outstanding principal amount of 7%
Convertible Subordinated Notes into Common Stock at the $10 per share conversion
price set forth in the Notes; (c) 1,500,000 additional shares were reserved for
issuance upon exercise of Warrants (the "Warrants") issued in connection with
the private placement, completed March 2, 1999, of $100 million principal amount
of 11 1/2% Senior Notes due 2006; and (d) 4,000,000 additional shares had been
reserved for issuance under the Company's Option Plan currently in effect. The
Board of Directors has adopted an increase in the number of shares issuable
under the Option Plan which, if approved by the stockholders at the Annual
Meeting, will require the availability of additional shares. See the description
of Proposal 3 below. The Company currently has no other plans or arrangements
relating to the issuance of any Additional Shares other than in relation to
issuances upon the conversion of 7% Convertible Subordinated Notes, the exercise
of the Warrants, or the exercise of awards under the Option Plan as described
above. However, the Board of Directors believes that it is in the interest of
the Company and its stockholders to maintain a reasonable supply of additional
authorized and unissued shares to provide flexibility to respond to future
opportunities or needs as they may arise, particularly in view of the Company's
growth strategy. The Additional Shares would be available for issuance without
further action by the stockholders, unless required by the Articles of
Organization or the By-laws, thus enabling the Company to avoid the delay and
expense of seeking stockholder approval to issue Additional Shares.
Certain Potential Disadvantages of the Proposal
There are certain potential disadvantages to this proposal of which
stockholders should be aware. The issuance of Additional Shares may, among other
things, have a dilutive effect on earnings per share and on the equity and
voting power of existing holders of Common Stock. The issuance of Additional
Shares by the Company may also be deemed to have an antitakeover effect by
making it more difficult to obtain shareholder approval of various actions, such
as a merger or removal of management. The proposed increase in the number of
authorized shares of Common Stock could also enable the Board of Directors to
render more difficult or discourage an attempt by another person or entity to
obtain control of the Company. For example, Additional Shares could be issued by
the Board in a public or private sale, merger or similar transaction, increasing
the number of outstanding shares and thereby diluting the equity interest and
voting power of a party attempting to obtain control of the Company. The Board
of Directors has no present intention of issuing Additional Shares for such
purposes, and this proposal is not in response to any effort of which the
Company is aware to accumulate the Common Stock or to obtain control of the
Company.
<PAGE>
Approval of the proposed amendment to the Company's Certificate of
Incorporation requires the affirmative vote of a majority of the outstanding
shares of Common Stock of the Company. The Board of Directors recommends a vote
FOR this Proposal 2.
(Item 3 of the Proxy Card)
PROPOSAL 3
APPROVAL OF AMENDMENT TO
AMENDED AND RESTATED 1995 STOCK OPTION AND INCENTIVE PLAN
As explained in "Report of the Compensation Committee" above, the Board
of Directors and the Compensation Committee believe that it is desirable to use
equity-based incentives to retain, motivate and attract quality personnel for
the Company. The Company therefore uses awards granted under the Waste Systems
International Inc. Amended and Restated 1995 Stock Option and Incentive Plan
(the "Option Plan") as an important part of its overall compensation structure
to retain, motivate and attract quality personnel for the Company. Prior to
amendment by the Board of Directors as described below in this paragraph, the
Option Plan provided for grants of options to purchase up to 3,000,000 shares of
Common Stock. On MArch 31, 1999, options to purchase shares granted to officers
and employees of the Company were outstanding. Of that number, options to
purchase 1,830,018 shares were granted to officers of the Company. The Company
believes that the remaining shares available under the Option Plan are
insufficient to fully serve the Company's long-term compensation requirements
after 1998. Accordingly, on April 12, 1999 the Board of Directors voted, subject
to stockholder approval, to amend the Option Plan to permit the grant of options
to purchase up to 1,000,000 additional shares of Common Stock of the Company.
The Option Plan, as amended by the amendments described in this paragraph, is
referred to herein as the "Amended Option Plan." On April 15, 1999,
outstanding and unexercised options to purchase 3,143,293 shares of Common
Stock equaled 13.6% of the Company's total outstanding shares of Common Stock
on an as-converted basis. Pursuant to the proposed amendment in this
Proposal 3, shares reserved for issuance and available for future grant under
the Amended Option Plan will equal approximately 3.7% of the total number of
shares outstanding, including shares issuable on conversion of the Company's
outstanding 7% Convertible Subordinated Notes and shares issuable upon exercise
of the Warrants. A summary of the Amended Option Plan is set forth below.
Approval of the proposed amendment to the Option Plan requires the
affirmative vote of a majority of the shares present or represented at the
meeting and entitled to vote on the proposal. The Board of Directors recommends
a vote FOR this Proposal 3.
Summary of the Amended Option Plan
The following description of certain features of the Amended Option Plan
is intended to be a summary and is qualified in its entirety by reference to the
full text of the Amended Option Plan.
<PAGE>
Number of Shares Subject to the Amended Option Plan. The Amended Option
Plan provides for the issuance of, or grant of options to purchase, up to
4,000,000 shares of Common Stock. The proceeds received by the Company from
option exercises under the Amended Option Plan will be used for the general
corporate purposes. On [ , 1999], the closing price of the Company's Common
Stock, as reported on the Nasdaq Small-Cap Market, was $ per share.
Plan Administration. The Amended Option Plan is administered by all of
the members of the Compensation Committee of the Board of Directors of the
Company who are not also employees of the Company or any of its subsidiaries.
All such administrators are required to be and are "Non-Employee Directors," as
that term is defined under the rules promulgated by the Securities and Exchange
Commission and "Outside Directors," as that term is defined under Section 162(m)
of the Code and the regulations promulgated thereunder. The administrators of
the Amended Option Plan are referred to herein collectively as the "Amended
Option Plan Committee."
Awards under the Amended Option Plan. The Amended Option Plan provides
for the grant of incentive stock options ("Incentive Options"), non-qualified
stock options ("Non-Qualified Options"), stock appreciation rights, restricted
and unrestricted shares of Common Stock, performance share awards and dividend
equivalent rights. Pursuant to applicable federal law, only employees may
receive Incentive Options under the Amended Option Plan.
Eligibility. Persons eligible to participate in the Amended Option Plan
are those full- or part-time officers, other employees, Non-Employee Directors,
consultants, and other key persons of the Company or its subsidiaries who are
responsible for or contribute to the management, growth or profitability of the
Company and its subsidiaries, as selected from time to time by the Amended
Option Plan Committee in its sole discretion.
Nature of Options. Options under the Amended Option Plan may be either
Incentive Options within the definition of Section 422 of the Code or
Non-Qualified Options.
Stock Appreciation Rights. Upon exercise of a stock appreciation right,
the recipient will receive an amount of cash, shares of Common Stock, or any
combination of cash and shares of Common Stock as the Amended Option Plan
Committee deems appropriate, equal to the excess of the fair market value of a
share of Common Stock on the date of exercise over the exercise price specified
in the right (or, in the case of a tandem right, the exercise price specified in
the related option) multiplied by the number of shares with respect to which the
right was exercised.
Restricted Stock. A restricted award entitles the recipient to receive
shares of Common Stock subject to such conditions and restrictions as the
Committee may determine at the time of grant. Upon the satisfaction of any
conditions prescribed by the Amended Option Plan Committee, the restrictions
applicable to the Restricted Stock will lapse and the shares will be deemed
vested in the participant.
Performance Share Awards. Upon the satisfaction of any performance goals
prescribed by the Amended Option Plan Committee, the recipient of a Performance
Share Award shall receive shares of Common Stock. A recipient of Performance
Shares will have the rights of a stockholder only with respect to shares of
Common Stock actually received by the participant and not with respect to shares
that are subject to the satisfaction of performance goals.
Dividend Equivalent Rights. Dividend Equivalent Rights entitle the
recipient to receive credits for dividends that would be paid if the grantee had
held specified shares of the Common Stock. Dividend equivalents credited under
the Amended Option Plan may be paid currently or be deemed to be reinvested in
additional shares of Common Stock, which may thereafter accrue additional
dividend equivalents at fair market value at the time of the deemed reinvestment
or on the terms then governing the reinvestment of dividends under the Company s
dividend reinvestment plan, if any.
<PAGE>
Other Option Terms. The Amended Option Plan Committee has authority to
determine the terms of options granted under the Amended Option Plan; provided,
however, that no Incentive Option may be granted with an exercise price that is
less than 100% of the fair market value of the shares of Common Stock at the
date of the option grant and no Non-Qualified Option may be granted with an
exercise price that is less than 85% of the fair market value of the shares of
Common Stock at the date of the option grant. The Amended Option Plan provides
that such fair market value will be deemed to be the last reported sale price of
the shares of Common Stock on the principal stock exchange on which the shares
of Common Stock are listed. Options may be exercised subject to such vesting
schedule as the Amended Option Plan Committee determines, except that no option
shall be exercisable after the tenth anniversary of the date of an Incentive
Option. In the event of a Change in Control, as defined in the Amended Option
Plan, all outstanding Stock Options and Stock Appreciation Rights shall
automatically become exercisable and vested in full and all Restricted Stock
Awards and Performance Share Awards shall be subject to such terms as provided
by the Amended Option Plan Committee. No option granted under the Amended Option
Plan is transferable by the optionee other than by will or applicable law of
intestate succession, and options may be exercised during the optionee s
lifetime only by the optionee. Options granted under the Amended Option Plan
expire on the tenth anniversary of the date of grant.
Options under the Amended Option Plan may be exercised for cash or, if
permitted by the Amended Option Plan Committee, by transfer to the Company of
shares of Common Stock having a fair market value equivalent to the option
exercise price of the shares being purchased, or by compliance with certain
provisions pursuant to which a securities broker delivers the purchase price for
the shares to the Company on behalf of the Option holder. To qualify as
Incentive Options, options must meet additional federal tax requirements,
including limits on the value of shares of Common Stock subject to Incentive
Options which first become exercisable in any one year.
Adjustments for Stock Dividends, Mergers, etc. The Amended Option Plan
authorizes the Amended Option Plan Committee to make appropriate adjustments to
the number of shares of Common Stock that are subject to the Amended Option Pan
and of any outstanding option to reflect stock dividends, stock splits and
similar events. In the event of a merger, liquidation or similar event, the
Amended Option Plan Committee in its discretion may provide for appropriate
substitution, adjustments or payment with respect to outstanding awards.
Tax Withholdings. Optionees under the Amended Option Plan are
responsible for the payment of any federal, state or local taxes that the
Company is required by law to withhold upon any option exercise. Optionees may
elect to have such tax withholding obligations satisfied either by authorizing
the Company to withhold shares of Common Stock to be issued pursuant to an
option exercise or by transferring to the Company shares of Common Stock having
a value equal to the amount of such taxes. Such an election is subject to
certain limitations for participants subject to the requirements of Section
16(b) of the Exchange Act.
Tax Aspects Under the U.S. Internal Revenue Code
The following is a summary of the principal federal income tax
consequences of transactions under the Amended Option Plan. It does not describe
all federal tax consequences under the Amended Option Plan, nor does it describe
state or local tax consequences. This description is qualified in its entirety
by reference to the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
<PAGE>
Incentive Options. No taxable income is generally realized by the
optionee upon the grant or exercise of an Incentive Option. If shares of Common
Stock issued to an optionee pursuant to the exercise of an Incentive Option are
not sold or transferred within two years from the date of grant or within one
year after the date of exercise, then (1) upon sale of such shares, any amount
realized in excess of the option price (the amount paid for the shares) will be
taxed to the optionee as a long-term capital gain and any loss sustained will be
a long-term capital loss, and (2) there will be no deduction for the Company for
federal income tax purposes. The exercise of an Incentive Option will give rise
to an item of tax preference that may result in alternative minimum tax
liability for the optionee.
If shares of Common Stock acquired upon the exercise of an Incentive
Option are disposed of prior to the expiration of the two-year and one-year
holding periods described above (a "disqualifying disposition"), generally (1)
the optionee will realize ordinary income in the year of disposition in an
amount equal to the excess (if any) of the fair market value of the shares of
Common Stock at exercise (or, if less, the amount realized on a sale of such
shares of Common Stock) over the option price thereof, and (2) the Company will
be entitled to deduct such amount. Special rules will apply where the optionee
is subject to Section 16(b) of the Exchange Act or where all or a portion of the
exercise price of the Incentive Option is paid by tendering shares of Common
Stock.
If an Incentive Option is exercised at a time when it no longer
qualifies for the tax treatment described above, the option is treated as a
Non-Qualified Option. Generally, an Incentive Option will not be eligible for
the tax treatment described above if it is exercised more than three months
following termination of employment (or six months or one year in the case of
termination of employment by reason of death or disability, respectively).
Non-Qualified Options. With respect to Non-Qualified Options under the
Amended Option Plan, no income is realized by the optionee at the time the
option is granted. Generally, (1) at exercise, ordinary income is realized by
the optionee in an amount equal to the difference between the option price and
the fair market value of the shares of Common Stock on the date of exercise, and
the Company receives a tax deduction for the same amount, and (2) at
disposition, appreciation or depreciation after the date of exercise is treated
as either short-term or long-term capital gain or loss depending on how long the
shares of Common Stock have been held. Special rules will apply where the
optionee is subject to Section 16(b) of the Exchange Act or where all or a
portion of the exercise price of the Non-Qualified Option is paid by tendering
shares of Common Stock.
As a result of Section 162(m) of the Code, the Company's deduction for
Non-Qualified Options and other awards under the Amended Option Plan may be
limited to the extent that a "covered employee" (i.e., the Chief Executive
Officer or other executive officer whose compensation is required to be reported
in the summary compensation table of this proxy statement) receives compensation
in excess of $1,000,000 in such taxable year.
<PAGE>
Grants Under the Amended Option Plan
The following table discloses the benefits granted under the Amended
Option Plan in 1999 (to the date of this Proxy Statement) pursuant to a vote of
the Board of Directors on April 12,1999.
Waste Systems International, Inc.
1995 Amended and Restated Stock Option and Incentive Plan
Number of Option Shares
Name and Position to be Granted in 1999
------------------------- ---------------------
Philip Strauss, Chairman,
President and CEO.................................................250,000
Robert Rivkin, Executive Vice
President - Acquisitions, CFO,
Secretary and Treasurer...........................................250,000
Michael J. Leannah
Senior Vice President
Chief Operating Officer ......................................... 30,000
Joseph E. Motzkin,
Vice President - Acquisitions.................................... 25,000
Mark Popham
Vice President -
Capital Projects Development.......................................20,000
Arthur Streeter,
Vice President and General Counsel............................... 25,000
Executive Group...................................................600,000
Non-Executive Officer
Employee Group ...................................................176,500
- ---------------------
1 Mr. Philipbar, who also serves as a Non-Employee Director on the
Company s Board of Directors, received options to purchase such shares
pursuant to a grant on January 1, 1998 and on January 1, 1999,
authorized by the Board of Directors on December 15, 1997 and approved
by the stockholders on August 19, 1998.
Approval of the proposed amendment to the Option Plan requires the
affirmative vote of a majority of the outstanding shares of Common Stock of the
Company. The Board of Directors recommends a vote FOR this Proposal 3.
(Item 4 of the Proxy Card)
PROPOSAL 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The accounting firm of KPMG Peat Marwick LLP has served as the Company
s independent auditor since March 29, 1995. The Board of Directors has voted to
appoint KPMG Peat Marwick LLP as the Company's independent auditors for the
current fiscal year. The Board of Directors recommends the ratification of this
selection. A representative of KPMG Peat Marwick LLP will be present at the
Annual Meeting, will be given the opportunity to make a statement if he or she
so desires, and will be available to respond to appropriate questions.
Approval of this proposal requires the affirmative vote of a majority
of the shares present at the meeting and entitled to vote on the proposal. The
Board of Directors recommends a vote FOR this Proposal 4.
OTHER MATTERS
Solicitation of Proxies
The cost of solicitation of proxies in the form enclosed herewith will
be borne by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.
Stockholder Proposals
A stockholder proposal (including a director nomination) submitted
pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended
("Exchange Act") for inclusion in the Company's proxy statement and form of
proxy for the 2000 Annual Meeting of Stockholders must be received by the
Company by [Mail date of 1999 proxy-120 days)]; provided, however, that if the
scheduled date of the 2000 Annual Meeting of Stockholders is changed by more
than 30 calendar days from June 14, 2000, stockholder proposals must be received
by the Company a reasonable time before the proxy solicitation for the 2000
Annual Meeting of Stockholders. Such a proposal must also comply with the
requirements as to form and substance established by the Securities and Exchange
Commission for such a proposal to be included in the proxy statement and form of
proxy. Any such proposal should be mailed to: Secretary, Waste Systems
International, Inc., 420 Bedford Street, Suite 300, Lexington, Massachusetts
02173.
A stockholder proposal (including a director nomination) to be
presented at the 2000 Annual Meeting of Stockholders, other than a stockholder
proposal submitted pursuant to Exchange Act Rule 14a-8, must be received in
writing at the Company s principal executive offices at the address given in the
preceding paragraph not earlier than February 14, 2000 and not later than [March
31, 2000] [Note: Assuming June 14, 1999 Annual Meeting]; provided, however, that
if the scheduled date of the 2000 Annual Meeting of Stockholders is scheduled to
be held on a date more than 30 calendar days prior to June 14, 2000 or more than
60 calendar days after June 14, 2000, stockholder proposals must be received by
the Company not later than the close of business on the later of (a) the 75th
day prior to the scheduled date of the 2000 Annual Meeting of Stockholders or
(b) the 15th day following the day on which public announcement of such
scheduled date is first made by the Company. Such proposal or nomination must
also comply with the other requirements contained in the Company's by-laws,
including supporting documentation and other information. Proxies solicited by
the Board of Directors will confer discretionary voting authority with respect
to these proposals, subject to Securities and Exchange Commission ("SEC") rules
governing the exercise of this authority.
<PAGE>
Other Matters
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Item 1 and Items 5 through 9 of the Company s 1998 Form 10-K previously
filed with the SEC pursuant to the Exchange Act, and all other reports filed
pursuant to Section 13(a) or 15(d) of the Exchange Act since December 31, 1998,
are hereby incorporated into this Proxy Statement by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Proxy Statement and
prior to the Annual Meeting to which this Proxy Statement relates shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Proxy Statement to the extent that a statement contained
herein or in any subsequent filed document which also is or is deemed to be
incorporated by reference herein or in any accompanying supplement to this Proxy
Statement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed to constitute a part of this Proxy Statement
or any supplement thereto, except as so modified or superseded.
THIS PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF ANY SUCH DOCUMENTS, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED HEREIN BY
REFERENCE, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY BENEFICIAL
OWNER, TO WHOM THIS PROXY STATEMENT IS DELIVERED UPON REQUEST MADE TO WASTE
SYSTEMS INTERNATIONAL, INC., 420 BEDFORD STREET, SUITE 300, LEXINGTON,
MASSACHUSETTS 02173, ATTENTION: ROBERT RIVKIN, CHIEF FINANCIAL OFFICER
(TELEPHONE: 781-862-3000).
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO
THE COMPANY. PLEASE COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED
PROXY CARD TODAY.
