SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Exchange Act of 1934 (Amendment No. )
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To be Held May 25, 2006
1. | To elect two Class II directors to serve for a term of three years; |
2. | To approve the Second Amended and Restated 2004 Equity Incentive Plan; and |
3. | To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2006. |
Robert D. Evans
Secretary
35 Iron Point Circle, Suite 200
Folsom, California 95630
ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 25, 2006
• | by mail by signing, dating and mailing the enclosed proxy card; or |
• | by telephone or over the Internet if your shares are held in the name of a bank or broker, and instructions for voting in this manner are included in information you receive from your bank or broker. |
• | in favor of our two director candidates; |
• | in favor of the Second Amended and Restated 2004 Equity Incentive Plan; and |
• | in favor of the ratification of the appointment of the independent registered public accounting firm. |
Name of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership(2) | Percent of Class | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
T. Rowe Price Associates, Inc.(3) | 3,926,850 | 8.5 | % | |||||||
Westfield Capital Management Co., LLC(3) | 2,998,790 | 6.5 | ||||||||
FMR Corp.(3) | 2,994,750 | 6.5 | ||||||||
Columbia Wanger Asset Management, L.P.(3) | 2,402,349 | 5.2 | ||||||||
Steven F. Bouck | 711,085 | (4) | 1.5 | |||||||
Ronald J. Mittelstaedt | 696,418 | (5) | 1.5 | |||||||
Robert D. Evans | 396,501 | (6) | 0.8 | |||||||
Eugene V. Dupreau | 258,717 | (7) | 0.6 | |||||||
Darrell W. Chambliss | 222,624 | (8) | 0.5 | |||||||
Worthing F. Jackman | 202,501 | (9) | 0.4 | |||||||
Michael W. Harlan | 55,500 | (10) | * | |||||||
William J. Razzouk | 54,750 | (10) | * | |||||||
Robert H. Davis | 25,650 | (11) | * | |||||||
All executive officers and directors as a group (15 persons) | 3,361,651 | 7.2 |
(1) | Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. In general, a person who has voting power and/or investment power with respect to securities is treated as the beneficial owner of those securities. Except as otherwise indicated by footnote, we believe that the persons named in this table have sole voting and investment power with respect to the shares of common stock shown. |
(2) | Shares of common stock subject to options and/or warrants currently exercisable or exercisable within 60 days after March 1, 2006, shares of common stock into which convertible securities are convertible within 60 days after March 1, 2006, and shares which will become issuable within 60 days after March 1, 2006, pursuant to outstanding restricted stock units count as outstanding for computing the percentage beneficially owned by the person holding such options, warrants, convertible securities and restricted stock units, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. On October 27, 2005, our Board of Directors accelerated the vesting of outstanding options previously awarded to employees. In addition, to prevent unintended benefits to the company’s executive officers and other selected corporate, regional and field employees, restrictions were imposed on any shares obtained through the exercise of such accelerated options. Accordingly, the Resale Restriction Agreement that the company entered into with each of these employees, including each of the named executive officers, prevents the sale of any shares acquired from the exercise of an accelerated option prior to the earlier of the original vesting date of the option, or the individual’s termination of employment. |
(3) | The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202. The address of Westfield Capital Management Co., LLC is One Financial Center, Boston, Massachusetts 02111. The address of FMR Corp. is 82 Devonshire Street, Boston, Massachusetts 02109. The address of Columbia Wanger Asset Management, L.P. is 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. The share ownership of T. Rowe Price Associates, Inc. is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2006. The share ownership of Westfield Capital Management Co., LLC is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2005. The share ownership of FMR Corp. is based on a Schedule 13G/A filed with the Securities and Exchange Commission on |
February 14, 2006. The share ownership of Columbia Wanger Asset Management, L.P. is based on a Schedule 13G filed with the Securities and Exchange Commission on February 14, 2006. |
(4) | Includes 498,779 shares subject to options exercisable within 60 days of March 1, 2006. Excludes 2,600 shares owned by Mr. Bouck’s two minor sons as to which Mr. Bouck disclaims beneficial ownership. |
(5) | Includes 440,793 shares subject to options exercisable within 60 days of March 1, 2006; 90,000 shares subject to a range forward collar contract that settles on June 11, 2007, and will require Mr. Mittelstaedt to sell such shares at that time at a price per share designated in the contract; and 165,625 shares held by Mittelstaedt Enterprises, L.P., of which Mr. Mittelstaedt is a limited partner. Excludes 1,900 shares held by the Mittelstaedt Family Trust as to which Mr. Mittelstaedt disclaims beneficial ownership. |
(6) | Includes 394,501 shares subject to options exercisable within 60 days after March 1, 2006. |
(7) | Includes 127,007 shares subject to options exercisable within 60 days after March 1, 2006; and 1,543 shares of restricted stock granted under our 2002 Restricted Stock Plan, which shares vest in three successive, equal, annual installments upon Mr. Dupreau’s completion of each year of continued service as the company’s Vice President – Western Region over the three-year period measured from the February 23, 2005 grant date. |
(8) | Includes 145,864 shares subject to options exercisable within 60 days after March 1, 2006. |
(9) | Includes 202,501 shares subject to options exercisable within 60 days after March 1, 2006. |
(10) | Includes 51,000 shares subject to options exercisable within 60 days after March 1, 2006. |
(11) | Includes 21,000 shares subject to options exercisable within 60 days after March 1, 2006. |
Name and Background | Age | Director Since | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nominees for Class II Directors for Terms Expiring in 2009 | ||||||||||||||
Michael W. Harlan is Executive Vice President and Chief Operating Officer of U.S. Concrete, Inc., a major producer of ready-mixed concrete and related concrete products. Mr. Harlan also served as U.S. Concrete’s Chief Financial Officer from September 1998 to November 2004. From November 1997 to January 30, 1998, Mr. Harlan served as a consultant to Waste Connections on various financial matters. From March 1997 to August 1998, Mr. Harlan was Vice President and Chief Financial Officer of Apple Orthodontix, Inc., a publicly traded company that provides practice management services to orthodontic practices in the U.S. and Canada. From April 1991 to December 1996, Mr. Harlan held various positions in the finance and acquisition departments of USA Waste Services, Inc. (including Sanifill, Inc., which was acquired by USA Waste Services, Inc.), including serving as Treasurer and Assistant Secretary, beginning in September 1993. From May 1982 to April 1991, Mr. Harlan held various positions in the tax and corporate financial consulting services division of Arthur Andersen LLP, where he was a Manager since July 1986. Mr. Harlan is a Certified Public Accountant and holds a B.A. degree from the University of Mississippi. | 45 | 1998 | ||||||||||||
William J. Razzouk is Chief Executive Officer of Newgistics, Inc., a provider of intelligent returns management solutions for direct retailers and technology companies. Mr. Razzouk also owns WJR Advisors and WJR Ventures, management consulting and investment firms. From August 2000 to December 2002, he was a Managing Director of Paradigm Capital Partners, LLC, a venture capital firm in Memphis, Tennessee that focuses on meeting the capital and advisory needs of emerging growth companies. From September 1998 to August 2000, he was Chairman of PlanetRx.com, an e-commerce company focused on healthcare and sales of prescription and over-the-counter medicines, health and beauty products and medical supplies. He was also Chief Executive Officer of PlanetRx.com from September 1998 until April 2000. From April 1998 until September 1998, Mr. Razzouk owned a management consulting business and an investment company that focused on identifying strategic acquisitions. From September 1997 until April 1998, he was the President, Chief Operating Officer and a director of Storage USA, Inc., a then publicly traded (now private) real estate investment trust that owns and operates more than 350 mini storage warehouses. He served as the President and Chief Operating Officer of America Online from February 1996 to June 1996. From 1983 to 1996, Mr. Razzouk held various management positions at Federal Express Corporation, most recently as Executive Vice President, Worldwide Customer Operations, with full worldwide profit and loss responsibility. Mr. Razzouk previously held management positions at ROLM Corporation, Philips Electronics and Xerox Corporation. He previously was a director of Fritz Companies, Inc., Sanifill, Inc., Cordis Corp., Storage USA, PlanetRx.com, America Online and La Quinta Motor Inns. Mr. Razzouk holds a Bachelor of Journalism degree from the University of Georgia. | 58 | 1998 |
Name and Background | Age | Director Since | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Class III Director Continuing in Office — Term Expiring in 2007 | ||||||||||||||
Ronald J. Mittelstaedt has been Chief Executive Officer and a director of Waste Connections since the company was formed in September 1997, and was elected Chairman in January 1998. Mr. Mittelstaedt was also President of the company from Waste Connections’ formation through August 2004. Mr. Mittelstaedt has more than 16 years of experience in the solid waste industry. He holds a B.S. degree in Finance from the University of California at Santa Barbara. | 42 | 1997 | ||||||||||||
Class I Directors Continuing in Office — Terms Expiring in 2008 | ||||||||||||||
Eugene V. Dupreau has been Vice President – Western Region and a director of Waste Connections since February 1998. Mr. Dupreau served as President and a director of Madera Disposal Systems, Inc. beginning in 1981 and 1985, respectively, and held both positions until Waste Connections acquired Madera in 1998. Mr. Dupreau holds a B.S. degree in Business Administration from Fresno State University and has completed advanced coursework in waste management. Mr. Dupreau also holds two California State Contractor Licenses, Classes A and C 12. He has served as a director of several civic and charitable organizations in Madera County. | 58 | 1998 | ||||||||||||
Robert H. Davis is President/Chief Executive Officer and a director of GreenMan Technologies, Inc., a tire shredding and recycling company. Prior to joining GreenMan, Mr. Davis served as Vice President of Recycling for Browning-Ferris Industries, Inc. from 1990 to 1997. A 30-year veteran of the solid waste and recycling industry, Mr. Davis has also held executive positions with Fibres International, Garden State Paper Company and SCS Engineers, Inc. Mr. Davis holds a B.S. degree in Mathematics from California Polytechnic University and has done graduate work at George Washington University in Solid Waste Management. | 63 | 2001 |
repealing any of our Bylaws. Between meetings of the Board, the Executive Committee approves all acquisitions by us for stock and all acquisitions by us for cash or other consideration of $2.5 million or more.
or affiliate of any current auditor of the company or its subsidiaries, is a part of an interlocking directorate in which any executive officer of the company serves on the compensation committee of another company that concurrently employs such director or has an immediate family member in any of the foregoing categories, can be independent until three years after such employment, affiliation or relationship has ceased.
Committee meetings and otherwise to devote the time necessary to serve, taking into consideration the number of other boards on which the candidate serves and the candidate’s other business and professional commitments; (iv) potential conflicts of interest; (v) whether the candidate is a party to any adverse legal proceeding; (vi) the candidate’s reputation; (vii) specific expertise and qualifications relevant to any Committee that the candidate is being considered for, such as whether a candidate for the Audit Committee meets the applicable financial literacy or audit committee financial expert criteria; (viii) willingness and ability to meet our director’s equity ownership guidelines; (ix) willingness to adhere to our Code of Conduct and Ethics; (x) ability to interact positively and constructively with other directors and management; (xi) willingness to participate in a one-day new director orientation session; (xii) willingness to attend educational forums or workshops to enhance understanding of new and evolving governance requirements; and (xiii) the size and composition of the current Board.
urged to limit their communications to the Board to matters that are of stockholder interest and that are appropriate for consideration at the Board level.
Name | Total ($) | Fees earned or paid in cash ($) | Stock awards ($)(2) | Option awards (#)(5) | Non-stock incentive plan compensation ($) | All other compensation ($) | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Ronald J. Mittelstaedt and Eugene V. Dupreau(1) | — | — | — | — | — | — | ||||||||||||||||||||
Robert H. Davis | 37,500 | 37,500 | — | 21,000 | — | — | ||||||||||||||||||||
Michael W. Harlan | 185,428 | (3) | 41,250 | — | 21,000 | — | — | |||||||||||||||||||
William J. Razzouk | 214,155 | (4) | 37,500 | — | 21,000 | — | — |
(1) | Directors who are officers or employees of Waste Connections do not currently receive any compensation as directors or for attending meetings of the Board of Directors or its committees. |
(2) | No restricted stock or restricted stock unit awards were made to any of our directors as compensation for their service as directors or for attending meetings of the Board of Directors or its committees in 2005. See the “Principal Stockholders” table on page 3 for details on the amount of Waste Connections common stock beneficially owned by each of our directors as of March 1, 2006. |
(3) | Includes $144,778 realized upon the exercise of options granted to him in 2003. |
(4) | Includes $176,655 realized upon the exercise of options granted to him in 2003. |
(5) | Each option has an exercise price of $33.01, the fair market value per share of common stock on the grant date, and is immediately exercisable and vested as to all the option shares. |
Long-Term Compensation | ||||||||||||||||||||||
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�� | Annual Compensation | |||||||||||||||||||||
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(1) | Shares Underlying Options Granted(2) | All Other Compensation | |||||||||||||||||
Ronald J. Mittelstaedt | 2005 | 390,000 | — | 95,000 | 8,965 | (3) | ||||||||||||||||
Chief Executive Officer | 2004 | 307,500 | — | 157,501 | 6,500 | (3) | ||||||||||||||||
and Chairman | 2003 | 295,000 | — | 115,000 | 5,000 | (3) | ||||||||||||||||
Steven F. Bouck | 2005 | 282,300 | — | 80,000 | 6,144 | (4) | ||||||||||||||||
President | 2004 | 237,000 | — | 112,501 | 5,357 | (4) | ||||||||||||||||
2003 | 218,692 | — | 80,000 | 4,717 | (4) | |||||||||||||||||
Darrell W. Chambliss | 2005 | 247,500 | — | 60,000 | 6,188 | (5) | ||||||||||||||||
Executive Vice President and | 2004 | 206,250 | — | 97,501 | 5,339 | (5) | ||||||||||||||||
Chief Operating Officer | 2003 | 176,115 | — | 65,000 | 4,403 | (5) | ||||||||||||||||
Robert D. Evans | 2005 | 243,500 | — | 60,000 | 6,088 | (6) | ||||||||||||||||
Executive Vice President, General | 2004 | 218,750 | — | 97,500 | 4,546 | (6) | ||||||||||||||||
Counsel and Secretary | 2003 | 203,058 | — | 75,000 | 248 | (6) | ||||||||||||||||
Worthing F. Jackman | 2005 | 212,300 | — | 75,000 | 5,308 | (7) | ||||||||||||||||
Executive Vice President and | 2004 | 170,750 | — | 90,001 | 4,419 | (7) | ||||||||||||||||
Chief Financial Officer | 2003 | 105,346 | 156,733 | (8) | 75,000 | — |
(1) | Amounts shown reflect salary and bonuses earned by the named executive officers for the applicable fiscal year. Salaries generally reflect increases that some or all of the named executive officers have received during that fiscal year. In 2005, salaries reflect increases that the named executive officers received on February 1 of that year. Bonuses are paid in the fiscal year following the fiscal year in which they are earned, unless deferred at the election of the executive under our Nonqualified Deferred Compensation Plan for eligible employees. |
(2) | See “Option Grants” below for further information. |
(3) | The amounts shown include (i) matching contributions by the company to the company’s 401(k) Plan on behalf of Mr. Mittelstaedt of $5,302, $6,500 and $5,000 in fiscal 2005, 2004 and 2003 and (ii) a restoration matching contribution by the company to the company’s Nonqualified Deferred Compensation Plan for eligible employees on behalf of Mr. Mittelstaedt of $3,663 in fiscal 2005. |
(4) | The amounts shown include (i) matching contributions by the company to the company’s 401(k) Plan on behalf of Mr. Bouck of $3,580, $3,345 and $4,717 in fiscal 2005, 2004 and 2003 and (ii) restoration matching |
contributions by the company to the company’s Nonqualified Deferred Compensation Plan for eligible employees on behalf of Mr. Bouck of $2,564 and $2,012 in fiscal 2005 and 2004. |
(5) | The amounts shown include (i) matching contributions by the company to the company’s 401(k) Plan on behalf of Mr. Chambliss of $325, $2,675 and $4,403 in fiscal 2005, 2004 and 2003 and (ii) restoration matching contributions by the company to the company’s Nonqualified Deferred Compensation Plan for eligible employees on behalf of Mr. Chambliss of $5,863 and $2,664 in fiscal 2005 and 2004. |
(6) | The amounts shown include (i) matching contributions by the company to the company’s 401(k) Plan on behalf of Mr. Evans of $3,476, $3,402 and $248 in fiscal 2005, 2004 and 2003 and (ii) restoration matching contributions by the company to the company’s Nonqualified Deferred Compensation Plan for eligible employees on behalf of Mr. Evans of $2,612 and $1,144 in fiscal 2005 and 2004. |
(7) | The amounts shown represent restoration matching contributions by the company to the company’s Nonqualified Deferred Compensation Plan for eligible employees on behalf of Mr. Jackman. |
(8) | The amount shown consists of (i) a $56,733 guaranteed annual bonus earned by Mr. Jackman in fiscal 2003 and (ii) a $100,000 signing bonus paid to Mr. Jackman. |
Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term(3) | |||||||||||||||||||||||||||
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Name | Number of Shares Underlying Options Granted(1) | % of Total Options Granted to Employees in 2005 | Exercise Price Per Share(2) | Expiration Date | 5% | 10% | |||||||||||||||||||||
Ronald J. Mittelstaedt | 95,000 | 5.7 | % | $ | 33.01 | 2/23/2015 | $ | 1,972,182 | $ | 4,997,897 | |||||||||||||||||
Steven F. Bouck | 80,000 | 4.8 | 33.01 | 2/23/2015 | 1,660,785 | 4,208,755 | |||||||||||||||||||||
Darrell W. Chambliss | 60,000 | 3.6 | 33.01 | 2/23/2015 | 1,245,589 | 3,156,566 | |||||||||||||||||||||
Robert D. Evans | 60,000 | 3.6 | 33.01 | 2/23/2015 | 1,245,589 | 3,156,566 | |||||||||||||||||||||
Worthing F. Jackman | 75,000 | 4.5 | 33.01 | 2/23/2015 | 1,556,986 | 3,945,708 |
(1) | On October 27, 2005, our Board of Directors accelerated the vesting of outstanding options previously awarded to employees, including those grants listed above, so that those options are now fully vested and exercisable as to all the option shares. However, to prevent unintended benefits to the company’s executive officers and other selected corporate, regional and field employees, restrictions were imposed on shares obtained upon the exercise of those accelerated options. Accordingly, the Resale Restriction Agreement that the company entered into with each of these employees, including each of the named executive officers, prevents the sale of any |
shares acquired from the exercise of an accelerated option prior to the earlier of the original vesting date of the option, or the individual’s termination of employment. |
(2) | All options granted to the named executive officers were granted at fair market value as determined by the Compensation Committee on the date of grant. |
(3) | Amounts reported in these columns represent amounts that the named executive officers could realize on exercise of options immediately before they expire, assuming that our common stock appreciates at 5% or 10% annually. These amounts do not take into account taxes and expenses that may be payable on such exercise. The amount actually realized will depend on the price of our common stock when the options are exercised, which exercise may occur before the term expires. The Securities and Exchange Commission requires the table to reflect 5% and 10% annualized rates of stock price appreciation. We do not project those rates and our common stock may not appreciate at those rates. |
Number of Shares Underlying Unexercised Options at December 31, 2005(1) | Value of Unexercised In-the-Money Options at December 31, 2005(1), (2) | ||||||||||||||||||||||||||
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Name | Shares Acquired on Exercise | Value Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | |||||||||||||||||||||
Ronald J. Mittelstaedt | 143,910 | $ | 2,450,155 | 440,793 | — | $ | 4,275,973 | — | |||||||||||||||||||
Steven F. Bouck | 56,723 | 967,666 | 498,779 | — | 6,167,022 | — | |||||||||||||||||||||
Darrell W. Chambliss | 106,637 | 1,350,913 | 145,864 | — | 1,018,490 | — | |||||||||||||||||||||
Robert D. Evans | 20,500 | 430,140 | 404,501 | — | 4,411,008 | — | |||||||||||||||||||||
Worthing F. Jackman | 37,500 | 554,816 | 202,501 | — | 1,451,335 | — |
(1) | On October 27, 2005, our Board of Directors accelerated the vesting of outstanding options previously awarded to employees. In addition, to prevent unintended benefits to the company’s executive officers and other selected corporate, regional and field employees, restrictions were imposed on shares obtained through the accelerated vesting process. The Resale Restriction Agreement that the company entered into with each of these employees, including each of the named executive officers, prevents the sale of any shares acquired from the exercise of an accelerated option prior to the earlier of the original vesting date of the option, or the individual’s termination of employment. |
(2) | Based on the closing price of our common stock of $34.46 on the New York Stock Exchange on December 31, 2005, less the per share exercise price. |
(a) | (b) | (c) | ||||||||||||
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Equity Compensation Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||||
Approved by stockholders(1) | 3,474,239 | (2) | $ | 26.37 | (3) | 2,909,981 | (4) | |||||||
Not approved by stockholders(5) | 2,107,936 | $ | 24.33 | 315,939 | ||||||||||
Total | 5,582,175 | $ | 25.60 | 3,225,920 |
(1) | Consists of the (a) the Amended and Restated 2004 Equity Incentive Plan (the “2004 Plan”), (b) the Senior Management Equity Incentive Plan (the “Senior Incentive Plan”) and (c) the Second Amended and Restated 1997 Stock Option Plan (the “Option Plan”). |
(2) | Includes an aggregate of 38,142 restricted stock units. |
(3) | Excludes restricted stock units. |
(4) | The remaining 1,498,625 shares reserved for issuance under the 2004 Plan will be issuable upon the exercise of future stock option grants or pursuant to future restricted stock or restricted stock unit awards that vest upon the attainment of prescribed performance milestones or the completion of designated service periods. For further information concerning the 2004 Plan, see Proposal 2. The remaining 1,357,610 shares reserved for issuance under the Senior Incentive Plan and the remaining 53,746 shares reserved for issuance under the Option Plan will be issuable upon the exercise of future stock option grants made thereunder. |
(5) | Consists of the plans summarized below. |
preceding the termination date; and (iii) an amount equal to the excess of (a) the premiums payable by him for health insurance covering him and his family comparable to the health insurance then offered by us for a period of three years following the termination date, over (b) the premiums that would be payable by him to cover him and his family if he was still employed by us during that period. Mr. Mittelstaedt’s severance payment is payable in a lump sum, subject to his compliance with certain provisions of his employment agreement.
Annual Base Salary | Maximum Bonus | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Ronald J. Mittelstaedt | $ | 450,000 | 100 | % | ||||||
Steven F. Bouck | $ | 340,000 | 50 | % | ||||||
Darrell W. Chambliss | $ | 295,000 | 50 | % | ||||||
Robert D. Evans | $ | 285,000 | 50 | % | ||||||
Worthing F. Jackman | $ | 265,000 | 50 | % |
However, as the Compensation Committee moves away from stock options as the principal form of long-term equity compensation and utilizes restricted stock units in replacement, the restricted stock units will not qualify as performance-based compensation for purposes of Section 162(m), and the compensation deemed paid when those units vest may, either alone or in combination with the cash compensation paid to the executive officers, exceed the $1.0 million limit on income tax deductibility in one or more future years.
performance bonuses as a percentage of total compensation for the company’s employees, officers and directors to more competitive levels through 2007; (b) decrease equity as a percentage of total compensation for these individuals relative to the company’s historic levels; and (c) over the next three years, transition the equity component of total compensation for these individuals from stock options to restricted stock and restricted stock unit awards.
Michael W. Harlan
Robert H. Davis
William J. Razzouk
Robert H. Davis
Cumulative Total Return | |||||||||||||||||||||||||||
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Base Period 12/00 | 12/01 | 12/02 | 12/03 | 12/04 | 12/05 | ||||||||||||||||||||||
WASTE CONNECTIONS, INC. | $ | 100.00 | $ | 93.73 | $ | 116.78 | $ | 114.24 | $ | 155.39 | $ | 156.34 | |||||||||||||||
S&P 500 INDEX | 100.00 | 88.11 | 68.64 | 88.33 | 97.94 | 102.75 | |||||||||||||||||||||
PEER GROUP | 100.00 | 113.34 | 86.11 | 111.46 | 116.19 | 121.62 |
SECOND AMENDED AND RESTATED 2004 EQUITY INCENTIVE PLAN
• | remove the 450,000-share limitation on the maximum number of shares of our common stock issuable pursuant to restricted stock and/or restricted stock unit awards granted under the 2004 Plan; and |
• | decrease the maximum aggregate number of shares of our common stock issuable pursuant to all types of awards that may be granted under the 2004 Plan by 400,000 shares. |
compensation policy changes were also driven by the desire to better align the financial statement cost associated with equity incentive grants with the economic value actually delivered to the recipients of those grants.
or directors; and the committee may not grant more than 25,000 options and warrants or more than 7,000 restricted stock and restricted stock unit awards to an eligible individual in any given calendar year.
• | remove the 450,000-share limitation on the maximum number of shares of our common stock issuable pursuant to restricted stock and/or restricted stock unit awards granted under the 2004 Plan. Removing this limitation will increase the authorized shares of common stock remaining available for future grants of restricted stock and restricted stock unit awards under the 2004 plan, as of March 1, 2006, from 108,700 shares to 809,825 shares, collectively, taking into account the overall share reduction proposed below. |
• | decrease the maximum number of shares of our common stock available for issuance pursuant to all types of awards that may be granted under the 2004 Plan by 400,000 shares. This change will reduce the remaining authorized but unissued shares of common stock available for future grants of all awards under the 2004 plan, as of March 1, 2006, from 1,209,825 shares to 809,825 shares. |
surviving corporation), (b) be assumed as immediately exercisable options by the surviving corporation or its parent, (c) be substituted by immediately exercisable options granted by the surviving corporation or its parent with substantially the same terms for the original option, or (d) be cancelled after payment to the optionee of an amount in cash or other consideration equal to the total number of shares subject to the option multiplied by the remainder of (1) the amount per share to be received by holders of the company’s stock in the sale, merger or consolidation, minus (2) the exercise price per share of the shares subject to the option.
PUBLIC ACCOUNTING FIRM
Secretary
SECOND AMENDED AND RESTATED
2004 EQUITY INCENTIVE PLAN
(a) | “Board” means the Company’s Board of Directors. |
(b) | “Change in Control” means: |
(ii) | If the Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Stock on the market trading day of the date of determination, or, if the date of determination is not a market trading day, the last market trading day prior to the date of determination; or |
(iii) | In absence of an established market for the Stock, the Fair Market Value thereof shall be determined in good faith by the Board.” |
defect, omission or inconsistency in the Plan or any Option, Restricted Stock or Restricted Stock Unit Agreement in a manner and to the extent it deems necessary or expedient to make the Plan fully effective;
or similar process; provided that the Board may in its discretion at the time of approval of the grant of an Option or thereafter permit an Optionee to transfer an Option to a trust or other entity established by the Optionee for estate planning purposes, and may permit further transferability or impose conditions or limitations on any permitted transferability. Otherwise, during the lifetime of an Optionee, an Option shall be exercisable only by such Optionee. In the event any Option is to be exercised by the executors, administrators, heirs or distributees of the estate of a deceased Optionee, or such an Optionee’s beneficiary, in any such case pursuant to the terms and conditions of the Plan and the applicable Option Agreement and in accordance with such terms and conditions as may be specified from time to time by the Board, the Company shall be under no obligation to issue Stock thereunder unless and until the Board is satisfied that the person to receive such Stock is the duly appointed legal representative of the deceased Optionee’s estate or the proper legatee or distributee thereof or the named beneficiary of such Optionee.
to whom such Restricted Stock Award has been granted, unless the Restricted Stock Agreement provides otherwise; two or more Restricted Stock Awards granted to a single Restricted Stock Participant may, however, be combined in a single Restricted Stock Agreement. A Restricted Stock Agreement shall not be a precondition to the granting of a Restricted Stock Award; no person shall have any rights under any Restricted Stock Award, however, unless and until the Restricted Stock Participant to whom the Restricted Stock Award shall have been granted (i) shall have executed and delivered to the Company a Restricted Stock Agreement or other instrument evidencing the Restricted Stock Award, unless such Restricted Stock Agreement provides otherwise, (ii) has satisfied the applicable federal, state, local and/or foreign income and employment withholding tax liability with respect to the shares of Stock which vest or become issuable under the Restricted Stock Award, and (iii) has otherwise complied with the applicable terms and conditions of the Restricted Stock Award.
Stock Units are actually to be issued. The Board may alternatively provide the Restricted Stock Unit Participant with the right to elect the issue date or dates for the shares of Stock which vest under his or her Restricted Stock Unit Award. The issuance of vested shares under the Restricted Stock Unit Award may be deferred to a date following the termination of the Restricted Stock Unit Participant’s employment or service with the Company and its Subsidiaries.
transferable, subject to any market black-out periods which may be imposed by the Company from time to time or insider trading policies to which the Restricted Stock Unit Participant may at the time be subject.
merger or consolidation of the Company or a subsidiary of the Company, any issue of debt, preferred or prior preference stock ahead of or affecting Stock, the authorization or issuance of additional shares of Stock, the dissolution or liquidation of the Company or its subsidiaries, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding.
distribution, be made as of the record date therefor and, in the case of a subdivision, combination or reclassification, be made as of the effective date thereof. In case of any adjustment pursuant to this Section 9(c) with respect to an Option, the total number of shares and the number of shares or other units of such other securities purchasable on exercise of the Option immediately prior thereto shall be adjusted so that the Optionee shall be entitled to receive at the same aggregate purchase price the number of shares of Stock and the number of shares or other units of such other securities that the Optionee would have owned or would have been entitled to receive immediately following the occurrence of any of the events described above had the Option been exercised in full immediately prior to the occurrence (or applicable record date) of such event. If, as a result of any adjustment pursuant to this Section 9(c), the Optionee shall become entitled to receive shares of two or more classes or series of securities of the Company, the Board shall equitably determine the allocation of the adjusted exercise price between or among shares or other units of such classes or series and shall notify the Optionee of such allocation. Any new or additional shares or securities received by a Restricted Stock Participant shall be subject to the same terms and conditions, including the Restriction Period, as related to the original Restricted Stock Award.
payment to the Company of, any taxes of any kind required by law to be withheld with respect to the Stock or other property subject to such Restricted Stock Award, including, for each Restricted Stock Participant who is an Employee, the employee portion of the FICA (Social Security and Medicare) taxes applicable to the shares of Stock or other property. No Stock shall be delivered to a Restricted Stock Participant with respect to a Restricted Stock Award until such payment or arrangement has been made. The Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Restricted Stock Participant. Notwithstanding the above, the Board may, in its discretion and pursuant to procedures approved by the Board, permit the Restricted Stock Participant to elect withholding by the Company of Stock or other property otherwise deliverable to such Restricted Stock Participant pursuant to his or her Restricted Stock Award, provided, however, that the amount of any Stock so withheld shall not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state and/or local tax purposes, including payroll taxes, that are applicable to supplemental taxable income in full or partial satisfaction of such tax obligations, based on the Fair Market Value of the Stock on the payment date.
Number of Shares (Installment) | Date of Earliest Exercise (Vesting) | |||||
---|---|---|---|---|---|---|
descendants, or (D) are owned, directly or indirectly, by or for a corporation, partnership, estate or trust of which you are a shareholder, partner or beneficiary, but only to the extent of your proportionate interest therein as a shareholder, partner or beneficiary thereof. You further agree that the Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period.
By | Duly authorized on behalf of the Board of Directors |
Notice of Exercise
(Initial)
OTHER: | |
OPTIONEE
Address:
Waste Connections, Inc. 35 Iron Circle, Suite 200 Folsom, CA 95630-8589 | Date of Exercise: |
Option Agreement dated: | ||||||
Number of shares as to which option is exercised: | ||||||
Certificates to be issued in name of: | ||||||
Total exercise price: | $ | |||||
Cash payment delivered herewith: | $ | |||||
Value of shares of common stock delivered herewith: | $ |
1 | Shares must meet the public trading requirements set forth in the Options Agreement. Shares must be valued in accordance with the terms of the option being exercised, must have been owned for the minimum period required in the Option Agreement, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate. |
Date | Restriction Period Expires with Respect to the Following Percentage of Total Shares of Restricted Stock Awarded | |||||
---|---|---|---|---|---|---|
On grant | 0 | % | ||||
As of , 20 (first anniversary of grant) | % | |||||
[As of , 20 (second anniversary of grant)] | [ | %] | ||||
[As of , 20 (third anniversary of grant)] | [ | %] | ||||
[As of , 20 (fourth anniversary of grant)] | [ | %] |
may require you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.
and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan shall control.
Ronald J. Mittelstaedt
President and Chief Executive Officer
RESTRICTED STOCK PARTICIPANT
(ii) subdivide the outstanding shares of Common Stock into a greater number of shares, (iii) combine the outstanding shares of Common Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a reclassification of such Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the resulting corporation). An adjustment made pursuant to this Section 6 shall, in the case of a dividend or distribution, be made as of the record date therefor and, in the case of a subdivision, combination or reclassification, be made as of the effective date thereof.
– | the delivery of your separate check payable to the Company or, |
– the use the proceeds from a same-date sale of the Shares issued to you, provided such a sale is permissible under the Company’s trading policies governing your sale of Company shares and you are not at the time an executive officer subject to the short-swing trading restrictions of the federal securities laws. |
X = (A x B)/C, where | ||||||||||
X | = | the additional number of Shares which will become subject to your Award by reason of the cash dividend; | ||||||||
A | = | the number of unissued Shares subject to this Award as of the record date for such dividend; | ||||||||
B | = | the per Share amount of the cash dividend; and | ||||||||
C | = | the closing selling price per share of Common Stock on the Nasdaq National Market on the payment date of such dividend. |
WASTE CONNECTIONS, INC.
ANNUAL MEETING OF STOCKHOLDERS
Thursday, May 25, 2006
10:00 A.M., Pacific Time
SHERATON GRAND SACRAMENTO
1230 J Street
Sacramento, CA 95814
Waste Connections, Inc. 35 Iron Point Circle, Suite 200 Folsom, California 95630 | proxy |
This proxy is solicited on behalf of the Board of Directors for use at the Annual Meeting on May 25, 2006.
The undersigned holder of Common Stock of Waste Connections, Inc. (“WCI”) acknowledges receipt of WCI’s Notice of Annual Meeting of Stockholders and Proxy Statement, each dated April 10, 2006, and Annual Report to Stockholders for fiscal year 2005. The undersigned revokes all prior proxies and appoints Ronald J. Mittelstaedt and Worthing F. Jackman, and each of them, individually and with full powers of substitution and resubstitution, proxies for the undersigned to vote all shares of WCI Common Stock that the undersigned would be entitled to vote at the Annual Meeting of Stockholders to be held on Thursday, May 25, 2006 at 10:00 A.M., Pacific Time, at the Sheraton Grand Sacramento, 1230 J Street, Sacramento, California 95814, and any adjournment thereof, as designated on the reverse side of this Proxy Card.
THIS PROXY WILL BE VOTED ACCORDING TO THE SPECIFICATIONS YOU MAKE ON THE REVERSE SIDE. IF YOU DO NOT SPECIFY ON THE REVERSE SIDE BUT YOU DO SIGN AND DATE THIS PROXY CARD, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 REFERRED TO ON THE REVERSE SIDE.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
See reverse for voting instructions.
Please detach here
The Board of Directors Recommends a Vote FOR Proposals 1, 2 and 3.
1. Election of Directors:
01 Michael W. Harlan
02 William J. Razzouk
¨ Vote FOR all nominees (except as marked) | ¨ Vote WITHHELD from all nominees |
(Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.)
2. Approval of the Second Amended and Restated 2004 Equity Incentive Plan.
¨ For | ¨ Against | ¨ Abstain |
3. Ratification of appointment of PricewaterhouseCoopers LLP as WCI's independent registered public accounting firm for the fiscal year ending December 31, 2006.
¨ For | ¨ Against | ¨ Abstain |
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTEDFOR EACH PROPOSAL.
Address Change? Mark Box ¨ Indicate changes below:
If you plan to attend the Annual Meeting of Stockholders, please mark the following box. ¨
Date: _________________________, 2006
Signature(s) in Box
Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.