SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
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WASTE HOLDINGS, INC.
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(Name of Registrant as Specified In Its Charter)
WASTE HOLDINGS, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
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Schedule 14A.
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WASTE HOLDINGS, INC.
3301 Benson Drive, Suite 601
Raleigh, North Carolina 27609
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 30, 2001
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TO THE SHAREHOLDERS OF WASTE HOLDINGS, INC.
The Annual Meeting of Shareholders of Waste Holdings, Inc., a North
Carolina corporation, will be held at 3301 Benson Drive, First Floor, Raleigh,
North Carolina, on Wednesday, May 30, 2001 at 4:00 p.m., for the following
purposes:
o to elect a board of six directors;
o to ratify the appointment of Deloitte & Touche LLP as the independent
auditors of the company for the fiscal year ending December 31, 2001; and
o act upon such other matters as may properly come before the meeting or
any adjournment thereof.
These matters are more fully described in the attached Proxy Statement.
The Board of Directors has fixed the close of business on April 22, 2001
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting or any adjournment thereof. We cordially invite you
to attend the meeting in person. However, to assure your representation at the
meeting, please mark, sign, date and return the enclosed proxy card as promptly
as possible in the enclosed postage-prepaid envelope. If you attend the meeting
you may vote in person, even if you returned a proxy.
Our proxy statement and proxy are included, along with our Annual Report
to Shareholders for the fiscal year ended December 31, 2000.
IMPORTANT -- YOUR PROXY IS ENCLOSED
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE EXECUTE AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED FOR
MAILING IN THE UNITED STATES.
By Order of the Board of Directors
LONNIE C. POOLE, JR.,
Chairman of the Board and
Chief Executive Officer
Raleigh, North Carolina
April 27, 2001
WASTE HOLDINGS, INC.
3301 Benson Drive, Suite 601
Raleigh, North Carolina 27609
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
May 30, 2001
INFORMATION CONCERNING SOLICITATION AND VOTING
The enclosed proxy is solicited by the Board of Directors of Waste
Holdings, Inc., a North Carolina corporation, for use at our Annual Meeting of
Shareholders to be held at 3301 Benson Drive, First Floor, Raleigh, North
Carolina, at 4:00 p.m. on Wednesday, May 30, 2001, and any adjournment thereof.
We will bear the cost of soliciting proxies. In addition to solicitation of
proxies by mail, employees of the company, without extra remuneration, may
solicit proxies personally or by telephone. We will reimburse brokerage firms
and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy materials to beneficial owners and
seeking instruction with respect thereto. The mailing address of our principal
executive offices is 3301 Benson Drive, Suite 601, Raleigh, North Carolina
27609. Copies of this proxy statement and accompanying proxy card were mailed
to shareholders on or about April 30, 2001.
Revocability of Proxies
Any shareholder giving a proxy has the power to revoke it at any time
before it is voted by giving a later proxy or written notice to us (Attention:
Stephen C. Shaw, Chief Financial Officer), or by attending the meeting and
voting in person.
Voting
When the enclosed proxy is properly executed and returned (and not
subsequently properly revoked), the shares it represents will be voted in
accordance with the directions indicated thereon, or, if no direction is
indicated thereon, it will be voted:
(1) FOR the election of the six nominees for director identified below;
(2) FOR ratification of the appointment of Deloitte & Touche LLP, Raleigh,
North Carolina, as our independent auditors for the fiscal year ending
December 31, 2001; and
(3) in the discretion of the proxies with respect to any other matters
properly brought before the shareholders at the meeting.
Record Date
Only the holders of record of our common stock at the close of business on
the record date, April 22, 2001, are entitled to notice of and to vote at the
meeting. On the record date, 13,336,541 shares of our common stock were
outstanding. Shareholders will be entitled to one vote for each share of common
stock held on the record date.
Predecessor Company
Waste Holdings is the successor in interest to Waste Industries, Inc.
Waste Holdings was formed in September 2000 by Waste Industries as part of
Waste Industries' holding company reorganization. The holding company
reorganization was completed on March 31, 2001 upon the merger of Waste
Industries into Waste Industries MergeCo, LLC, a wholly owned subsidiary of
Waste Holdings. All references in this proxy statement to dates prior to April
1, 2001, refer to Waste Industries and all references to dates on and after
March 31, 2001, refer to Waste Holdings.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
Nominees
Our bylaws provide that the number of directors constituting the Board of
Directors shall be no less than three. The number of directors is currently
six, and the number authorized to be elected at the meeting is six. Therefore,
that number of directors are to be elected to serve for one year, until the
election and qualification of their successors, and it is intended that
proxies, not limited to the contrary, will be voted FOR all of the management
nominees named below. If any such nominee is unable or declines to serve as a
director at the time of the meeting, the individuals named in the enclosed
proxy may exercise their discretion to vote for any substitute proposed by the
Board of Directors. We do not anticipate that any nominee listed below will be
unable or will decline to serve as a director. None of our directors or
executive officers is related by blood, marriage or adoption to any other
director or any executive officer.
Name of Management Nominee Age Director Since
---------------------------------- --- ---------------
Lonnie C. Poole, Jr. .............. 63 1970
Jim W. Perry ...................... 56 1974
J. Gregory Poole, Jr. ............. 66 1994
Thomas F. Darden .................. 46 1997
Thomas C. Cannon .................. 51 1999
Paul L. Brunswick ................. 61 1999
Lonnie C. Poole, Jr. founded Waste Industries in 1970 and has served as
our Chief Executive Officer and Chairman of the Board of Directors since that
time. Mr. Poole holds a B.S. in Civil Engineering from North Carolina State
University and an M.B.A. from the University of North Carolina at Chapel Hill.
Mr. Poole has more than 30 years' experience in the solid waste industry. He
has served in the Environmental Industry Association, a non-profit business
association established to, among other things, inform, educate and assist its
members in cost-effective, safe and environmentally responsible management of
waste ("EIA", formerly the National Solid Waste Management Association or the
"NSWMA"), in the following positions: Chairman; Vice-Chairman; and Board
Member. In addition, Mr. Poole has served in the EIA Research and Education
Foundation as Chairman and now is a member of its Board of Directors. Mr. Poole
was inducted into the EIA Hall of Fame in 1994.
Jim W. Perry joined us in 1971 and has served as our President and Chief
Operating Officer since 1987 and as a director since 1974. Mr. Perry holds a
B.S. in Agricultural and Biological Engineering from North Carolina State
University and an M.S. in Systems Management from the University of Southern
California. Mr. Perry has more than 30 years' experience in the solid waste
industry and has received the Distinguished Service Award from the NSWMA. In
addition, Mr. Perry has served in the Carolinas Chapter of NSWMA as Chairman
and on the Membership Committee. Mr. Perry was inducted into the EIA Hall of
Fame in 1997.
J. Gregory Poole, Jr., an original investor in our company in 1970, has
served as a member of the Board of Directors since 1994. Mr. Poole is retired.
Until March 1999, he was Chairman of the Board and Chief Executive Officer of
Gregory Poole Equipment Company. Mr. Poole is a member of the Board of
Directors of First Union Corporation. Mr. Poole holds a B.S. in Business
Administration from the University of North Carolina at Chapel Hill.
Thomas F. Darden has served as a director of our company since June 1997.
Since 1984, Mr. Darden has served as Chairman of Cherokee Sanford Group LLC, or
its predecessors and affiliates, which include building materials and
environmental remediation companies and an institutional investment fund. He is
also a principal of Franklin Street/Fairview Capital, a private equity
investment company. Mr. Darden chaired the Triangle Transit Authority and is on
the boards of Shaw University, Winston Hotels, Inc. and BTI Telecom Corp. In
addition, Mr. Darden has served on the Board of Visitors and currently serves on
the Honors Advisory Board at the University of North Carolina at Chapel Hill.
Mr. Darden holds a B.A. with Highest Honors and an M.R.P. in Environmental
Planning from the University of North Carolina at Chapel Hill, and a J.D. from
Yale University.
Thomas C. Cannon has served as a Vice President of our company since its
acquisition of TransWaste Services, Inc. in September 1998. Mr. Cannon founded
TransWaste Services in 1994 and has served as its President since that time. He
holds a B.B.A. in Industrial Management from the University of Georgia and has
done graduate work in Accounting at Georgia Southwestern College.
Paul L. Brunswick has served as a director of our company since December
1999. Currently Mr. Brunswick is president of General Management Advisory. From
1992 to 1999, Mr. Brunswick served as Vice President and Chief
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Financial Officer of GoodMark Foods, Inc., a public company that was acquired
by ConAgra, Inc. in July 1998. From 1987 to 1992, he served as Vice President
and Chief Financial Officer for CompuChem Corporation, a public company that
was acquired by Hoffman-La Roche in 1992. Mr. Brunswick has served on several
company boards of directors and is currently the President of the North
Carolina Chapter of the Financial Executives Institute and serves on the board
of Life Experiences, a nonprofit public service organization. He has previously
served on the boards of United Way and Junior Achievement. Mr. Brunswick holds
a B.S. in Accounting and an M.B.A. from Ohio State University.
Information Concerning the Board of Directors and Its Committees
The business of our company is under the general management of the Board
of Directors as provided by the laws of North Carolina and our bylaws. During
the fiscal year ended December 31, 2000, the Board of Directors held four
formal meetings, excluding actions by unanimous written consent. Each member of
the Board attended all of the fiscal 2000 meetings of the Board of Directors
and Board committees of which he was a member.
The Board of Directors has an Audit Committee and a Compensation
Committee, but not a nominating committee. The Audit Committee currently
consists of Paul L. Brunswick, chairman, J. Gregory Poole, Jr. and Thomas F.
Darden. During 2000, the Audit Committee held one formal meeting. The Audit
Committee reviews the results and scope of the audit and other services
provided by our independent auditors. The Compensation Committee currently
consists of Paul L. Brunswick, chairman, J. Gregory Poole, Jr. and Thomas F.
Darden. During 2000, the Compensation Committee held one formal meeting,
excluding actions by unanimous written consent. The Compensation Committee
makes recommendations to the Board of Directors regarding salaries and
incentive compensation for our officers, and administers our stock plans.
Vote Required
The six nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted at the meeting shall be
elected as directors. In accordance with North Carolina law, votes withheld
from any director will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business. Withheld votes, if any,
are not treated as votes cast and, therefore, will have no effect on the
proposal to elect directors.
The Board of Directors has unanimously approved and recommends that
shareholders vote "FOR" the election of the management nominees listed above.
PROPOSAL NO. 2 --
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Deloitte & Touche LLP,
Raleigh, North Carolina, to serve as our independent auditors for the fiscal
year ending December 31, 2001, and recommends that the shareholders ratify this
appointment. Deloitte & Touche has audited our accounts since 1983 and has
advised us that it does not have, and has not had, any direct or indirect
financial interest in our company or subsidiaries in any capacity other than
that of serving as independent auditors. Representatives of Deloitte & Touche
are expected to attend the meeting. They will have an opportunity to make a
statement, if they desire to do so, and will also be available to respond to
appropriate questions.
The affirmative vote of the holders of a majority of the shares of our
common stock present or represented and voting on this proposal at the meeting
shall constitute ratification of the appointment of Deloitte & Touche LLP. If
the appointment of Deloitte & Touche LLP is not ratified by the shareholders,
the Board of Directors will reconsider its selection.
The Board of Directors has unanimously approved and recommends a vote
"FOR" the ratification of the appointment of Deloitte & Touche LLP as our
independent auditors for the fiscal year ending December 31, 2001.
3
OTHER INFORMATION
Principal Shareholders
The following table sets forth certain information regarding the ownership
of shares of our common stock as of the record date by (1) each person known by
us to beneficially own more than 5% of the outstanding shares of common stock,
(2) each director of our company, (3) each of the Named Executive Officers, as
listed under " -- Executive Compensation -- Summary Compensation" below, and
(4) all directors and executive officers of our company as a group.
This table is based upon information supplied by our officers, directors
and principal shareholders and from Schedules 13D and 13G filed with the SEC.
Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, each of the shareholders named in
this table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Share ownership in each case includes shares
issuable upon exercise of options that may be exercised within 60 days after
the record date for purposes of computing the percentage of common stock owned
by such person but not for purposes of computing the percentage owned by any
other person. Applicable percentages are based on 13,336,541 shares outstanding
on the record date.
Shares
Beneficially Percentage
Name Owned Owned
- ----- -------------- -----------
Lonnie C. Poole, Jr.(1) ....................................... 4,938,439 37.00%
3301 Benson Drive, Suite 601
Raleigh, North Carolina 27609
Lonnie C. Poole, III(2) ....................................... 2,786,125 20.89%
3301 Benson Drive, Suite 601
Raleigh, North Carolina 27609
Scott J. Poole(3) ............................................. 2,800,690 21.00%
2408 Mt. Vernon Church Road
Raleigh, North Carolina 27614
Jim W. Perry(4) ............................................... 1,555,896 11.66%
3301 Benson Drive, Suite 601
Raleigh, North Carolina 27609
Goldman Sachs Asset Management ................................ 1,233,400 9.25%
1 New York Plaza
New York, New York 10004
J. Gregory Poole, Jr.(5) ...................................... 635,032 4.76%
Thomas C. Cannon(6) ........................................... 426,116 3.19%
Stephen C. Shaw(7) ............................................ 16,794 *
Paul L. Brunswick ............................................. 2,827 *
Thomas F. Darden(8) ........................................... 2,000 *
All directors and executive officers as a group (7 persons)(9) 7,577,104 56.68%
- ---------
* Less than one percent.
(1) Includes 11,470 shares underlying vested options, 1,000 shares owned by Mr.
Poole's wife and 3,848,518 shares held by three grantor trusts of which
Lonnie C. Poole, III and Scott J. Poole, Mr. Poole's children, are
beneficiaries and/or trustees.
(2) Includes 2,148 shares underlying vested options, 784,258 shares held by a
trust of which Mr. Poole is a co-trustee and beneficiary and 1,064,260
shares held by a trust of which he is a beneficiary with shared investment
power.
(3) Includes 538 shares underlying vested options, 784,258 shares held by a
trust of which Mr. Poole is a co-trustee and beneficiary and 1,064,260
shares held by a trust of which he is a beneficiary with shared investment
power.
(4) Includes 11,841 shares underlying vested options.
(5) Includes 540,000 shares owned by Mr. Poole's three adult children and 2,520
shares held by Mr. Poole's children as custodian for his three
grandchildren. As to all of such shares, Mr. Poole disclaims beneficial
ownership.
(6) Includes 2,079 shares underlying vested options.
(7) Includes 4,162 shares underlying vested options.
(8) The shares are held in a custodial account managed by Mr. Darden's wife for
the benefit of Mr. Darden's son.
(9) Includes the shares and shares underlying vested options discussed in
footnotes (1) and (4) - (8).
4
Executive Compensation
Summary Compensation
The following table sets forth all compensation paid by us for services
rendered to us in all capacities for the fiscal years ended December 31, 1998,
1999, and 2000 to our Chief Executive Officer and our other executive officers
who earned at least $100,000 in the respective fiscal year. We refer to these
executive officers as the Named Executive Officers.
Summary Compensation Table
Long-Term
Compensation
Awards
Annual Compensation ---------------
---------------------- Stock Options All Other
Name and Principal Position Fiscal Year Salary Bonus (Shares) Compensation(1)
- ------------------------------------------------- ------------- ----------- ---------- --------------- ----------------
Lonnie C. Poole, Jr. ............................ 2000 $ -- $ -- -- $ 4,860
Chairman and Chief Executive Officer 1999 $ -- $ -- -- $ --
1998 $ -- $ -- -- $ 4,200
Jim W. Perry .................................... 2000 $232,520 $ -- 7,150 $ 7,727
President 1999 $214,798 $ -- -- $ 7,956
1998 $212,381 $ -- -- $15,132
Stephen C. Shaw ................................. 2000 $125,671 $ -- 3,692 $ 4,934
Chief Financial Officer, Secretary and Treasurer 1999 $ 92,450 $19,747 3,000 $ 4,447
- ---------
(1) Includes for Mr. Poole:
o 401(k) Plan contributions of $4,860 in 2000 and $4,200 in 1998.
Includes for Mr. Perry:
o auto allowance of $4,200 in 1998;
o life insurance premiums paid by the Company on executive group policy
insurance coverage in excess of $50,000 payable to Mr. Perry or his
family as follows: $932, $1,456 and $902 in 1998, 1999 and 2000,
respectively;
o 401(k) Plan contributions in the following amounts for 1998, 1999 and
2000: $10,000, $6,500 and $6,825 respectively.
Includes for Mr. Shaw:
o life insurance premiums paid by the Company on executive group policy
insurance coverage in excess of $50,000 payable to Mr. Shaw or his family
as follows: $67 and $72 in 1999 and 2000, respectively; and
o 401(k) Plan contributions of $4,380 and $4,862 in 1999 and 2000,
respectively.
Option Grants, Exercises and Holdings and Fiscal Year-End Option Values
The following table sets forth certain information concerning all grants
of stock options made during the year ended December 31, 2000 to the Named
Executive Officers:
Option/SAR Grants in Last Fiscal Year
Potential Realizable
Value at Assumed
Annual Rates
Number of % of Total of Stock Price
Securities Options/SARs Exercise Appreciation
Underlying Granted to or Base for Option Term (1)
Options/SARs Employees Price Expiration ---------------------
Name Granted in Fiscal Year ($/Share) Date 5% 10%
- ------------------------------ -------------- ---------------- ----------- ------------ ---------- ----------
Lonnie C. Poole, Jr. ......... -- -- -- -- -- --
Jim W. Perry ................. 7,150 6.95% $ 12.10 April 2005 $23,881 $52,839
Stephen C. Shaw .............. 3,692 3.59% $ 11.00 April 2005 $11,224 $24,773
- ---------
(1) Potential realizable value is based on the assumption that our common stock
will appreciate at the annual rate shown, compounded annually, from the
date of grant until the expiration of the option term. These amounts are
calculated for SEC-mandated disclosure purposes and do not reflect our
estimate of future stock prices.
5
The following table sets forth certain information concerning the number
and value of unexercised options held by the Named Executive Officers as of
December 31, 2000:
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
Number of Securities
Underlying Unexercised Value of Unexercised
Options In-the-Money Options
Shares at December 31, 2000(#) at December 31, 2000($)(2)
Acquired on Value ----------------------------- ----------------------------
Name Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------- ------------- --------------- ------------- --------------- ------------- --------------
Lonnie C. Poole, Jr. ..... -- $ -- 209,383 16,770 $ -- $--
Jim W. Perry ............. 96,836 $566,016 8,617 21,512 $ -- $--
Stephen C. Shaw .......... -- $ -- 6,949 6,618 $3,563 $--
- ---------
(1) Market value of our common stock on the exercise date, as quoted on the
Nasdaq Stock Market, minus the exercise price.
(2) Market value of our common stock at December 31, 2000 ($6.00 per share), as
quoted on the Nasdaq Stock Market, minus the exercise price. Options are
considered in-the-money if the market value of the shares covered thereby
is greater than the exercise price.
Compensation of Directors
In 2000, our employee directors received no compensation for service as
members of the Board of Directors. Non-employee directors Paul L. Brunswick, J.
Gregory Poole, Jr. and Thomas F. Darden are entitled to receive an annual
retainer fee in cash or stock equal in value to $5,000, plus $500 in cash or
stock at the option of the individual director for attending each meeting of
the Board of Directors and each Board of Directors' committee meeting, in
addition to reimbursement of out-of-pocket expenses.
Report of the Compensation Committee on Executive Compensation
The following statement made by the Compensation Committee shall not be
deemed incorporated by reference into any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, and shall not otherwise be deemed
filed under either of those Acts.
The Compensation Committee is responsible for making recommendations to
the Board of Directors concerning executive compensation, including base
salaries, bonuses and awards of stock options. The Compensation Committee
currently consists of Messrs. Paul L. Brunswick, Thomas F. Darden and J.
Gregory Poole, Jr. each of whom is a non-employee director of our company.
In determining the compensation of our executive officers, the
Compensation Committee takes into account all factors which it considers
relevant, including business conditions in general and in our lines of business
during the year, our performance during the year in light of such conditions,
the market compensation for executives of similar background and experience,
and the performance of the specific executive officer under consideration and
the business area of the Company for which such executive officer is
responsible. In addition, in 1999 the Compensation Committee hired an
independent compensation consulting firm to advise it regarding compensation
practices and the Compensation Committee continues to follow that firm's
advice.
The structure of each executive compensation package is weighted towards
incentive forms of compensation so that such executive's interests are aligned
with the interests of our stockholders. The Compensation Committee believes
that granting stock options provides an additional incentive to executive
officers to continue in our service and gives them an interest similar to
stockholders in our success. The compensation program for executive officers in
2000 consisted of grants of stock options and incentive bonuses, in addition to
base salaries and reimbursement of certain costs and expenses.
To the extent readily determinable, another factor the Compensation
Committee considers when determining compensation is the anticipated tax
treatment to us and to the executive officer of various payments and benefits.
For example, some types of compensation plans and their deductibility by us
depend upon the timing of an executive officer's vesting or exercise of
previously granted rights. Further interpretation of, and changes in, the tax
laws and other factors beyond the Compensation Committee's control also could
affect the deductibility of compensation. In light of these tax considerations
and Mr. Poole's significant ownership position in our company, Mr. Poole was
not paid any cash salary or bonus in 2000. The Compensation Committee continues
to evaluate various alternatives for compensating Mr. Poole that
6
take account of both these tax considerations and his ownership position, as
well as Mr. Poole's services to us as Chairman and Chief Executive Officer, his
past business accomplishments and his expected future contribution to our
company.
The Compensation Committee believes that the forms of compensation, as
described above, represent fair compensation structures for the annual services
for Mr. Poole and the other executive officers in their respective capacities.
Submitted by: Compensation Committee:
Paul L. Brunswick, Chairman
Thomas F. Darden
J. Gregory Poole, Jr.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors consists of Paul L.
Brunswick, chairman, J. Gregory Poole, Jr. and Thomas F. Darden, none of whom
was at any time during the fiscal year ended December 31, 2000 or at any other
time an officer or employee of our company. No executive officer of our company
serves as a member of the board of directors or compensation committee of any
entity which has one or more executive officers serving as a member of the Board
of Directors or the Compensation Committee of our company.
Performance Graph
The following line graph and table illustrate the cumulative total
shareholder return on our common stock over a period beginning on the date of
our initial public offering, June 13, 1997, and ending on December 31, 2000 and
the cumulative total return over the same period of (1) the CRSP Total Market
Return Index of the Nasdaq Stock Market and (2) the CRSP Nasdaq Non-Financial
Stocks Total Return Index. The CRSP is the Center for Research in Securities
Prices at the University of Chicago. The graph assumes an initial investment of
$100 and reinvestment of all dividends.
[Line graph appears here with the following plot points]
6/13/97 12/31/97 12/31/98 12/31/99 12/31/00
------- -------- -------- -------- --------
WWIN 100.0 138.0 127.8 83.8 44.4
NASDAQ CRSP Total 100.0 110.5 152.8 280.0 175.5
NASDAQ Non-Financial 100.0 107.2 157.0 302.6 179.8
7
Certain Transactions
In December 1999, the company made loans to Lonnie C. Poole Jr., in the
aggregate principal amount of $500,000 and to Jim W. Perry, in the principal
amount of $150,000, as advances to pay premiums on life insurance policies
purchased by Mr. Poole and Mr. Perry. The loans are full recourse obligations
of Mr. Poole and Mr. Perry, and Mr. Poole and Mr. Perry are the sole and
absolute owners of the life insurance policies. The loans bear interest at 7%
per annum and premiums advanced under the loans (net of amounts Mr. Poole and
Mr. Perry are obligated to reimburse the company for the economic benefit of
the policies to them, as determined for federal income tax purposes) are also
secured by collateral assignments of policy proceeds and the surrender value of
the policies.
Report of the Audit Committee
The Audit Committee has reviewed and discussed our audited financial
statements for fiscal 2000 with management. The Audit Committee has discussed
with Deloitte & Touche LLP, our independent auditors, the matters required to
be discussed by Statement on Auditing Standards No. 61, as modified or
supplemented. The Audit Committee has received the written disclosures and the
letter from Deloitte & Touche LLP required by Independence Standards Board
Standard No. 1, as modified or supplemented, and has discussed with Deloitte &
Touche LLP its independence. Based on the review and discussions described
above, among other things, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in our Annual
Report on Form 10-K for fiscal 2000.
The Board of Directors has determined that the members of the Audit
Committee are independent as defined in Rule 4200(a)(14) of the National
Association of Securities Dealers' listing standards, as applicable and as may
be modified or supplemented. The Audit Committee recommended and the Board of
Directors approved an Audit Committee charter, a copy of which is attached as
Appendix A to this Proxy Statement.
Audit Fees
Deloitte & Touche billed us aggregate fees of $198,774 for professional
services rendered for the audit of our annual financial statements for fiscal
year 2000 and for reviews of the financial statements included in our quarterly
reports on Form 10-Q for the first three quarters of fiscal 2000.
All Other Fees
Deloitte & Touche billed us aggregate fees of $992,992 for professional
services rendered in fiscal 2000 other than audit services and review of
quarterly reports. These fees resulted primarily from services rendered for the
review of our fiscal 1999 tax returns, tax consulting related to our holding
company reorganization and review of our registration statements and reports
filed with the SEC during fiscal 2000 as part of our holding company
reorganization and reporting requirements. The Audit Committee of the Board of
Directors considered these activities to be compatible with the maintenance of
Deloitte & Touche's independence. We did not engage Deloitte & Touche in fiscal
2000 to perform any services for financial information systems design or
implementation.
Submitted by: The Audit Committee
Paul L. Brunswick, Chairman
Thomas F. Darden
J. Gregory Poole, Jr.
This Audit Committee Report shall not be deemed to be filed with the SEC
or incorporated by reference into any of our previous or future filings with
the SEC, except as otherwise explicitly specified by us in any such filing.
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to Section 16(a) of the Securities Exchange Act, our directors
and executive officers are required to file reports with the SEC indicating
their holdings of and transactions in our equity securities. To our knowledge,
based solely on a review of the copies of such reports furnished to us and
written representations that no other reports were required, there were no
reports required under Section 16(a) of the Exchange Act which were not timely
filed during the fiscal year ended December 31, 2000, except as follows: Jim W.
Perry inadvertently failed to report the exercise of an aggregate of 96,836
options on August 18, 21 and 23, 2000, for which the required report was filed
on Form 5 on February 14, 2001.
8
Deadline for Shareholder Proposals
Shareholders having proposals that they desire to present at next year's
annual meeting of our shareholders should, if they desire that such proposals
be included in our Proxy Statement relating to such meeting, submit such
proposals in time to be received by us not later than December 28, 2001. To be
so included, all such submissions must comply with the requirements of Rule
14a-8 promulgated under the Securities Exchange Act and the Board of Directors
directs the close attention of interested shareholders to that rule. In
addition, management's proxy holders will have discretion to vote proxies given
to them on any shareholder proposal of which we do not have notice prior to
March 15, 2002. Proposals should be mailed to the Corporate Secretary, Waste
Holdings, Inc., 3301 Benson Drive, Suite 601, Raleigh, North Carolina 27609.
Other Matters
The Board of Directors knows of no other business to be brought before the
meeting, but intends that, as to any such other business, the shares will be
voted pursuant to the proxy in accordance with the best judgment of the person
or persons acting thereunder.
9
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Appendix A
WASTE HOLDINGS, INC.
AUDIT COMMITTEE CHARTER
This charter shall be reviewed, updated and approved annually by the board
of directors.
Role and Independence
The audit committee of the board of directors assists the board in
fulfilling its responsibility for oversight of the quality and integrity of the
accounting, auditing and reporting practices of the corporation and other such
duties as directed by the board. The membership of the committee shall consist
of at least three directors who are generally knowledgeable in financial and
auditing matters, including at least one member with accounting or related
financial management expertise. Each member shall be free of any relationship
that, in the opinion of the board, would interfere with his or her individual
exercise of independent judgment, and shall meet the director independence
requirements for serving on audit committees as set forth in the corporate
governance standards of the (New York Stock Exchange, NASDAQ, American Stock
Exchange). The committee is expected to maintain free and open communication
(including private executive sessions at least annually) with the independent
accountants, the internal auditors and the management of the corporation. In
discharging this oversight role, the committee is empowered to investigate any
matter brought to its attention, with full power to retain outside counsel or
other experts for this purpose.
The board of directors shall appoint one member of the audit committee as
chairperson. He or she shall be responsible for leadership of the committee,
including preparing the agenda, presiding over the meetings, making committee
assignments and reporting to the board of directors. The chairperson will also
maintain regular liaison with the CEO, CFO, the lead independent audit partner
and the director of internal audit.
Responsibilities
The audit committee's primary responsibilities include:
o Recommending to the board the independent accountant to be selected or
retained to audit the financial statements of the corporation. In so
doing, the committee will request from the auditor a written affirmation
that the auditor is in fact independent, discuss with the auditor any
relationships that may impact the auditor's independence, and recommend
to the board any actions necessary to oversee the auditor's independence.
o Overseeing the independent auditor relationship by discussing with the
auditor the nature and rigor of the audit process, receiving and
reviewing audit reports, and providing the auditor full access to the
committee (and the board) to report on any and all appropriate matters.
o Providing guidance and oversight to the internal audit activities of the
corporation including reviewing the organization, plans and results of
such activity.
o Reviewing the audited financial statements and discussing them with
management and the independent auditor. These discussions shall include
consideration of the quality of the Company's accounting principles as
applied in its financial reporting, including review of estimates,
reserves and accruals, review of judgmental areas, review of audit
adjustments whether or not recorded and such other inquiries as may be
appropriate. Based on the review, the committee shall make its
recommendation to the board as to the inclusion of the company's audited
financial statements in the company's annual report on Form 10-K.
o Reviewing with management and the independent auditor the quarterly
financial information prior to the company's filing of Form 10-Q. This
review may be performed by the committee or its chairperson.
o Discussing with management, the internal auditors and the external
auditors the quality and adequacy of the company's internal controls.
o Discussing with management the status of pending litigation, taxation
matters and other areas of oversight to the legal and compliance area as
may be appropriate.
o Reporting audit committee activities to the full board and issuing
annually a report to be included in the proxy statement (including
appropriate oversight conclusions) for submission to the shareholders.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
WASTE HOLDINGS, INC.
3301 Benson Drive, Suite 601
Raleigh, North Carolina 27609
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
May 30, 2001
The undersigned hereby appoints Lonnie C. Poole, Jr. and Stephen C. Shaw, and
each of them, as proxies, each with full power of substitution, and hereby
authorizes them to represent and to vote, as designated below, all the shares of
common stock of Waste Holdings, Inc., a North Carolina corporation, held of
record by the undersigned on April 22, 2001, at the Annual Meeting of
Shareholders to be held at 3301 Benson Drive, First Floor, Raleigh, North
Carolina, on May 30, 2001, or at any adjournment(s) thereof. The following
proposals to be brought before the meeting are more specifically described in
the accompanying Proxy Statement.
(1) Election of Directors: [ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHOUT
(except as marked AUTHORITY TO VOTE
to the contrary below) FOR ALL NOMINEES
LISTED BELOW
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A
LINE THROUGH THE NOMI NEE'S NAME BELOW:
Paul L. Brunswick Thomas F. Darden J. Gregory Poole, Jr.
(outside directors)
Lonnie C. Poole, Jr. Jim W. Perry Thomas C. Cannon
(CEO) (President) (Vice President)
(2) To ratify the appointment of Deloitte & Touche LLP as the independent
auditors of the company for the fiscal year ending December 31, 2001:
[ ] VOTE FOR [ ] VOTE AGAINST [ ] ABSTAIN
(3) In their discretion, to vote upon such other matters as may properly come
before the meeting:
[ ] GRANT AUTHORITY [ ] WITHHOLD AUTHORITY
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE THIS PROXY WILL BE VOTED
FOR MANAGEMENT'S SLATE OF NOMINEES FOR DIRECTOR LISTED ABOVE, FOR PROPOSAL 2,
AND IN THE DISCRETION OF THE PROXIES NAMED HEREIN ON ANY OTHER MATTER AS MAY
PROPERLY COME BEFORE THE MEETING.
_________________________________
Signature
_________________________________
Signature, if held Jointly
Please date and sign exactly as
your name appears on your stock
certificate. Joint owners should
each sign. Trustees, custodians,
executors and others signing in
a representative capacity should
indicate that capacity.
Date:____________________ , 2001
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
WHETHER OR NOT YOU PLAN TO BE
PRESENT AT THE MEETING. IF YOU
ATTEND THE MEETING, YOU CAN VOTE
EITHER IN PERSON OR BY YOUR
PROXY