SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A#1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission file number 0-20868
UNITED WASTE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3532338
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Four Greenwich Office Park, Greenwich, Connecticut 06830
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (203) 622 3131
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of class
Common Stock, $.001 par value
8% Cumulative Convertible Preferred
Stock, $.001 par value
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
[X]Yes No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K in not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [x]
As of March 12, 1997, there were 42,641,771 shares of the
registrant's common stock outstanding. The aggregate market value
of the common stock held by non-affiliates of the registrant at
March 12, 1997 was approximately $1,722,276.00. The aggregate
market value was calculated by using the closing price of the stock
as of that date on the Nasdaq Stock Market.
Documents Incorporated by Reference:
None
FORM 10-K/A#1 REPORT INDEX
Page
PART III
Item 10 Directors and Executive Officers of the Registrant . 3
Item 11 Executive Compensation . . . . . . . . . . . . . . . 4
Item 12 Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . 13
Item 13 Certain Relationships and Related Transactions . . . 15
Signatures . . . . . . . . . . . . . . . . . . . . . 16
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors and Executive Officers
See Item 1 - "Business-Executive Officers of the Registrant"
for information regarding the directors and executive officers of
the Company.
Each director holds office until the next annual meeting of
stockholders and until his successor has been elected and
qualified. The Company's executive officers are elected by the
Board of Directors and, subject to the employment agreements
described under Item 11 - "Executive Compensation," serve at the
discretion of the Board of Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act") requires the Company's officers and directors, and
persons who own more than ten percent 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
("SEC"). Officers, directors and greater than ten percent
stockholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) reports that they file. Based
solely upon a review of the copies of such reports furnished to the
Company and written representations from certain of the Company's
officers and directors that no other such reports were required,
the Company believes that during the period from January 1, 1996
through December 31, 1996 all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten-percent
stockholders were complied with on a timely basis.
Item 11. Executive Compensation
All share information under this Item 11 has been adjusted to give effect
to a 2-for-1 stock split effected on June 18, 1996.
Summary Compensation Table
The following table sets forth for the periods indicated information
concerning the compensation of the chief executive officer of the Company
and the four most highly compensated executive officers of the
Company (other than the chief executive officer) during 1996.
<TABLE>
Long Term
<CAPTION> Compensation
Awards
Annual Compensation (1) Securities
Name and Principal Underlying All Other
Position Year Salary($) Bonus($) Options(#) Compensation($)
<S> <C> <C> <C> <C> <C>
Bradley S. Jacobs 1996 332,500(2) 174,000 370,000
Chief Executive Officer 1995 272,411(2) 92,482 280,000
1994 196,250(2) 67,500 380,000
Edward T. Sheehan 1996 195,000 62,500 135,000
President 1995 195,000 62,500 120,000
1994 195,000 62,500 100,000 25,000(3)
John N. Milne 1996 150,900(2) 55,000 240,000 1,000(4)
Senior Vice President 1995 153,250(2) 55,000 120,000
1994 153,250(2) 55,000 160,000
Michael J. Nolan 1996 125,000 40,000 135,000 1,000(4)
Chief Financial Officer 1995 112,500 40,000 120,000
1994 102,500 40,000 50,000
Richard A. Volonino 1996 140,000 32,500 35,000 1,000(4)
Executive Vice President 1995 140,000 32,500 23,000
1994 140,000 32,500 30,000
</TABLE>
(1) The only type of other annual compensation for each of the named
officers was in the form of perquisites which were in each case less
than the level required for reporting.
(2) Includes directors' fees to Messrs. Jacobs and Milne of $2,500,
$8,000 and $6,250 each in 1996, 1995 and 1994, respectively.
(3) Consists of a one-time payment for relocation expenses.
(4) Represents a contribution by the Company under its 401(K) Plan.
Options
The following tables summarize the options granted in 1996 to the
executive officers named in the Summary Compensation table above, the
potential value of these options at the end of the option term, assuming certain
levels of appreciation of the Company's Common Stock, options exercised in 1996
by such executive officers and the number and value of all options held by such
executive officers at the end of 1996.
<TABLE>
Option Grants in 1996
<CAPTION>
Individual Grants
% of Potential Realizable
Total Value at Assumed
Number of Options Rate of Stock
Securities Granted Exercise Appreciation
Underlying to Price For Option
Options Employees Per Expiration Term(1)
Name Granted(#) in 1996 Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Bradley S. Jacobs 180,000(2) 9.1% $25.00 7/15/06 $7,330,026 $11,671,841
190,000(3) 9.6% 31.00 12/13/06 9,594,189 15,277,143
Edward T. Sheehan 60,000(2) 3.0% 25.00 7/15/06 2,443,342 3,890,614
75,000(3) 3.8% 31.00 12/13/06 3,787,180 6,030,451
John N. Milne 115,000(2) 5.8% 25.00 7/15/06 4,683,072 7,457,010
125,000(3) 6.3% 31.00 12/13/06 6,311,967 10,050,752
Michael J. Nolan 60,000(2) 3.0% 25.00 7/15/06 2,443,342 3,890,614
75,000(3) 3.8% 31.00 12/13/06 3,787,180 6,030,451
Richard A. Volonino 15,000(2) 0.8% 25.00 7/15/06 610,835 972,653
20,000(3) 1.0% 31.00 12/13/06 1,009,915 1,608,120
</TABLE>
(1) The dollar amounts under these columns are the result of calculations
at hypothetical 5% and 10% compounded annual appreciation rates prescribed
by the Securities and Exchange Commission and, therefore, are not intended
to forecast possible future appreciation, if any, of the Company's Common
Stock price.
(2) Each of these options were exercisable as to 33.3% on July 15, 1996,
and will become exercisable as to 33.3% on July 15, 1997, and as to the
balance on July 15, 1998. See "--Employment Contracts and Change-in-Control
Arrangements" for certain information concerning the potential impact on
outstanding options of an Agreement and Plan of Merger which the Company
entered into on April 13, 1997.
(3) Each of these options were exercisable as to 33.3% on December 13, 1996,
and will become exercisable as to 33.3% on December 13, 1997, and as to the
balance on December 13, 1998. See "--Employment Contracts and
Change-in-Control Arrangements" for certain information concerning the
potential impact on outstanding options of an Agreement and Plan of Merger
which the Company entered into on April 13, 1997.
<TABLE>
Aggregated Option Exercises in 1996
and Value of Options at December 31, 1996
<CAPTION>
Number
of Share Number of Securities Value of Unexercised
Acquired Underlying In-the-Money
on Unexercised Options Options at Year
Exercise Value at Year End(#) End
Name (#) Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Bradley S. Jacobs 596,667 $15,333,280 192,666 504,001 $ 1,868,244 $7,118,014
Edward T. Sheehan 228,596 4,515,406 74,439 177,333 755,314 2,371,741
John N. Milne 327,780 6,514,931 202,667 267,333 3,235,757 3,345,493
Michael J. Nolan 180,945 3,558,916 71,000 160,667 681,375 1,940,509
Richard A. Volonino 130,865 2,770,304 72,062 42,853 1,578,657 576,355
</TABLE>
Compensation of Directors
Each director of the Company is paid up to $2,500 per day for
each Board of Directors' meeting such director attends, together
with an expense reimbursement. In addition, members of the Board
of Directors who are not officers were granted options in 1996 as
follows: Mr. Andersen (options to purchase an aggregate of 30,000
shares at an exercise price per share of $25.00 and 40,000 shares
at an exercise price per share of $31.00); Mr. Weyer (options to
purchase an aggregate of 36,000 shares at an exercise price per
share of $27.38); and Mr. Williams (options to purchase an
aggregate of 36,000 shares at an exercise price per share of
$27.38). The options granted to Mr. Weyer and Mr. Williams were
granted pursuant to the Disinterested Director Plan described
below. For information concerning options granted to directors who
are officers, see the table above captioned "Option Grants in
1996."
Disinterested Director Plan
On June 25, 1992, the Board of Directors of the Company
adopted the Company's 1992 Disinterested Director Stock Option Plan
(the "Disinterested Director Plan"). The only persons eligible to
participate in the Disinterested Director Plan are the members of
the Company's Stock Option Committee who are ineligible to receive
options under the Company's 1992 Stock Option Plan (each such
member being referred to as a "Disinterested Director"). At
present the Disinterested Directors are J. Bryan Williams, III, and
Christian Weyer.
Under the terms of the Disinterested Director Plan, on June 6
of each year, each person that is a Disinterested Director as of
such date is entitled to receive an option to purchase 36,000
shares of Common Stock at an exercise price per share equal to the
fair market value per share of Common Stock on such date (except
that the foregoing does not apply to a person that as of such date
was a director for less than six months). The aggregate number of
shares of Common Stock that may be subject to options granted under
the Disinterested Director Plan may not exceed 368,000. Only non-qualified
options may be issued under the plan, and no options may
be granted under the plan after April 30, 2002.
The Disinterested Director Plan may be amended from time to
time by the Board of Directors of the Company. However, the Board
of Directors may not, without shareholder approval, amend the
Disinterested Director Plan to increase the number of shares of
Common Stock which may be issued thereunder (except upon changes in
capitalization as specified in the Disinterested Director Plan),
decrease the minimum exercise price provided in the plan or change
the class of persons eligible to participate in the plan.
Employment Contracts and Change-in-Control Arrangements
The Company has entered into employment agreements (the
"Employment Agreements") with each of the executive officers named
in the Summary Compensation Table above. Certain information with
regard to such Employment Agreements is set forth below.
Base salary is payable at a rate per annum as follow: Mr.
Jacobs ($330,000), Mr. Sheehan ($170,000), Mr. Milne ($140,000),
Mr. Nolan ($125,000), and Mr. Volonino ($140,000). The base salary
payable to Messrs. Jacobs and Milne is subject to possible upward
adjustment based upon changes in a designated consumer price index.
Certain of the Employment Agreements provide for a minimum bonus
(or other incentive compensation) at a rate per annum as follows:
Mr. Jacobs ($174,000), Mr. Sheehan ($25,000), Mr. Milne ($40,000),
and Mr. Nolan ($40,000). In addition to the bonuses and incentive
compensation specifically provided for, the Company may pay such
additional bonuses or incentive compensation as may be authorized
by the Board of Directors.
The Employment Agreements with the following executives
provide that the term shall automatically renew so that at all
times the balance of the term will not be less than the period
hereinafter specified with respect to such executive: Mr. Jacobs
(five years), Mr. Sheehan (two years and three months), Mr. Milne
(three years) and Mr. Nolan (three years). However, the Company
may at any time terminate any such Employment Agreement, with or
without cause, provided that the Company is required to make
severance payments to the extent described in the following
paragraphs.
The Employment Agreement with each of Messrs. Jacobs and Milne
provides that the executive is entitled to severance benefits in
the event that (i) his Employment Agreement is terminated by the
Company without cause (as defined in the Employment Agreement),
(ii) the executive terminates his Employment Agreement for Good
Reason (as so defined) or because of a breach by the Company of its
obligations thereunder or (iii) his employment is terminated as a
result of death or disability. The severance benefits include (i)
a lump sum payment equal to the executive's monthly base salary and
minimum annual bonus at the time of termination for a specified
period (three years, in the case of Mr. Jacobs, and two years, in
the case of Mr. Milne) and (ii) the continuation of the executive's
benefits for such specified period. Certain of the other
Employment Agreements provide that the executive is entitled to
severance benefits, of up to six months base salary, in the event
that the executive's Employment Agreement is terminated without
cause (as defined in the Employment Agreement).
Certain of the Employment Agreements provide that, if a change
of control (as defined in the Employment Agreement) occurs and the
employment of the executive terminates under specified
circumstances, including termination by the executive within a
specified period of time of the change of control, the executive is
entitled to receive a lump-sum payment equal to the base salary and
minimum bonus that would have been payable to him for the balance
of the term (determined as of the date of termination of
employment). Based on current compensation levels, the amount
payable to each executive is as follows: Mr. Jacobs ($2,520,000),
Mr. Sheehan ($438,750), Mr. Milne ($540,000), and Mr. Nolan
($495,000). In addition, if any portion of such payment to the
executive constitutes an "excess parachute payment" (as defined in
Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code")), the executive is entitled to receive a payment sufficient
on an after-tax basis to offset any excise tax payable by the
executive pursuant to Section 4999 of the Code. Any payment
constituting an "excess parachute payment" would not be deductible
by the Company.
As previously reported in the Company's Current Report on Form
8-K dated April 13, 1997, the Company has entered into an Agreement
and Plan of Merger (the "Merger Agreement") dated as of April 13,
1997, among the Company, USA Waste Services, Inc., a Delaware
corporation ("USA Waste"), and Riviera Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of USA Waste
("Sub"). (A copy of the Merger Agreement is attached as an Exhibit
to such Report on Form 8-K). Subject to the terms and conditions
of the Merger Agreement, the Merger Agreement contemplates that
Sub will merge with and into the Company (the "Merger"), and each
share of common stock of the Company will be converted into 1.075
shares of common stock of USA Waste. The Merger is conditioned
upon, among other things, approval by shareholders of the Company
and USA Waste, and expiration or termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
It is expected that the lump-sum payments to executive officers
described in the preceding paragraph will be payable upon the
closing of the Merger.
The Merger Agreement contemplates that the Company will use
its commercially reasonable efforts to ensure that each outstanding
option to purchase the Company's Common Stock (whether or not such
option has previously vested or become exercisable) will be
canceled in exchange for common stock of USA Waste having a market
value (calculated as provided in the Merger Agreement) equal to the
fair value of such option (determined as provided in the Merger
Agreement).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors of the
Company during 1996 consisted of J. Bryan Williams, III, its
chairman, Bradley S. Jacobs and Christian Weyer. Mr. Jacobs was
also a senior executive officer of the Company during 1996. No
compensation committee interlocks with other companies have existed
through this date.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The following table and the notes thereto set forth, as
of March 31, 1997 (except as footnoted), certain information
concerning beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of Common Stock by (i) each person
known by the Company to be the owner of more than 5% of the
outstanding shares of Common Stock, (ii) each director of the
Company, (iii) the chief executive officer of the Company and the
four most highly compensated executive officers of the Company
(other than the chief executive officer) during 1996 and (iv) all
executive officers and directors of the Company as a group.
Percentage
Number of Common of Common
Name and Address of Shares Beneficially Stock
Beneficial Owner(1) Owned(2) Outstanding
Pilgrim Baxter 3,986,800 (3) 9.27%
& Associates
1255 Drummers Lane
Wayne, PA 19087
Fred Alger 2,250,100 (4) 5.23%
Management, Inc.
75 Maiden Lane
New York, NY 10038
FMR Corp. 2,123,000 (5) 4.93%
82 Devonshire Street
Boston, MA 02109
Bradley S. Jacobs 820,546 (6) 1.89%
Edward T. Sheehan 166,211 (7) *
John N. Milne 269,332 (8) *
Michael J. Nolan 87,667 (7) *
Richard A. Volonino 82,062 (7) *
G. Chris Andersen 85,000 (7) *
Lawrence J. Twill 55,430 (7) *
Christian Weyer 57,667 (7) *
J. Bryan Williams, III 83,141 (7) *
All executive officers and
directors as a group
(10 persons) 1,795,320 4.05%
* Less than 1%
(1) Where no address is indicated, the address is c/o the Company.
(2) Unless otherwise indicated, each person has sole investment
and voting power with respect to the shares indicated. For
purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares as of a given date which
such person has the right to acquire within 60 days after such
date. For purposes of computing the percentage of outstanding
shares held by each person or group of persons named above on a
given date, any security which such person or persons has the right
to acquire within 60 days after such date is deemed to be
outstanding for the purpose of computing the percentage ownership
of such person or persons, but is not deemed to be outstanding for
the purpose of computing the percentage ownership of any other
person.
(3) The information concerning the number of shares beneficially
owned, is as of December 31, 1996 and is based on a Schedule 13G
filed by Pilgrim Baxter & Associates with the Securities and
Exchange Commission (the "SEC"). Such Schedule 13G indicates that
Pilgrim Baxter and & Associates has shared voting power and sole
dispositive power with respect to the indicated shares.
(4) The information concerning the number of shares beneficially
owned, is as of December 31, 1996 and is based on a Schedule 13G
filed by Fred Alger Management, Inc., and Mr. Fred Alger with the
SEC. Such Schedule 13G indicates that Fred Alger Management, Inc.
(and Mr. Fred Alger, who controls such company) has sole voting
power with respect to 21,200 shares, shared voting power with
respect to 1,950,000 shares and sole dispositive power with respect
to 2,237,700 shares.
(5) The information concerning the number of shares beneficially
owned, is as of December 31, 1996 and is based on a Schedule 13G
filed by FMR Corp. with the SEC. Such Schedule 13G indicates that
(i) Fidelity Management Research Company ("Fidelity"), a wholly
owned subsidiary of FMR Corp., is the beneficial owner of 1,866,000
shares as a result of acting as an investment advisor to various
investment companies (the "Funds") and as the sub-adviser to a unit
trust (the "Trust") and (ii) Fidelity Management Trust Company
("Fidelity Trust"), a wholly owned subsidiary of FMR Corp., is the
beneficial owner of 257,000 shares as a result of serving as
investment manager to various institutional accounts (the
"Institutional Accounts"). Such Schedule 13G further indicates
that Edward C. Johnson 3d (Chairman of FMR. Corp.) and FMR Corp.,
through control of Fidelity and Fidelity Trust, have (i) the sole
power to dispose of the 1,859,600 shares owned by the Funds (but
not the power to vote such shares, since such power resides with
the Funds' Boards of Trustees), (ii) sole dispositive power with
respect to the shares owned by the Institutional Accounts, (iii)
sole power to vote or direct the voting of 222,800 of the shares
owned by the Institutional Accounts and (iv) no power to vote or
direct the voting of 34,200 of the shares owned by the
Institutional Accounts. Such Schedule 13G further indicates that
FMR. Corp., through control of Fidelity, has the sole power to vote
and dispose of the 6,400 shares owned by the Unit Trust.
(6) Consists of 501,213 shares held by Mr. Jacobs and 319,333
shares underlying currently exercisable options held by Mr. Jacobs.
Does not include shares underlying options held by Mr. Jacobs that
are not exercisable within 60 days of March 31, 1997.
(7) Consists of shares underlying currently exercisable options
held by the indicated persons. Does not include shares underlying
options held by the indicated persons that are not exercisable
within 60 days of March 31, 1997.
(8) Consists of (i) 13,332 shares underlying currently exercisable
warrants held by Mr. Milne and (ii) 256,000 shares underlying
currently exercisable options held by Mr. Milne. Does not include
shares underlying options held by Mr. Milne that are not
exercisable within 60 days of March 31, 1997.
Item 13. Certain Relationships and Related Transactions
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
UNITED WASTE SYSTEMS, INC.
Date: April 30, 1997 By: Michael J. Nolan
Michael J. Nolan
Chief Financial Officer
