[Casella Waste Systems, Inc.
Letterhead]
October 7, 2009
Gina Caires
Fidelity Management and Research Company
One Spartan Way TS1E
Merrimack, NH 03054
Re:
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Casella
Waste Systems, Inc. (the Company)
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2006 Stock Incentive Plan
(the 2006 Plan)
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Dear Ms. Caires:
On behalf of the Company, I am writing to respond to
certain concerns regarding the 2006 Plan that you have shared with us. As you know, the 2006 Plan is the subject of
Proposal No. 2 in the Companys proxy statement for the Annual Meeting of
Stockholders scheduled to be held on October 13, 2009.
In response to your concerns, the Companys
management will, prior to the end of the Companys current fiscal year,
recommend to the Companys Board of Directors that the following amendments be
made to the 2006 Plan:
1. That
a provision be added to the 2006 Plan providing that discretionary awards to
non-employee directors will only be granted and administered by a committee of
the Companys Board of Directors, all of the members of which are independent
directors within the meaning of the Nasdaq Marketplace Rules.
2. That
Section 7(b) of the 2006 Plan be amended to replace the current phrase without
limitation, death or disability of the Participant; estate planning needs of
the Participant; a merger, consolidation, sale reorganization,
recapitalization, or a change in control of the Company; or any other
nonrecurring significant event effecting the Company, a Participant or the Plan
with the more limited phrase death, disability or retirement of the
Participant or a merger, consolidation, sale or other change in control of the
Company.
3. That
a provision be added to the 2006 Plan as Section 8(b) specifying the minimum
vesting period of any Other Stock Unit Award (as defined in the 2006 Plan). In the case of such awards that vest solely
on the passage of time, such period shall be zero percent vested prior to the
first anniversary of the date of grant, no more than 33-1/3% vested prior to
the second anniversary of the date of grant and no more than 66-2/3% vested
prior to the third anniversary of the date of grant. In the case of such awards that do not vest
solely based on the passage of time, the awards shall not vest prior to the
first anniversary of the date of grant.
We note that the 2006 Plan already includes the one-year minimum for
performance-based vesting and three-year minimum for time-based vesting for
Restricted Stock and Restricted Stock Units, so the purpose of the above
provision is to extend such restrictions to Other Stock Units.
4. That
Section 10(h) of the 2006 Plan be amended to replace the current sentence
under the section titled Acceleration
with The Board may provide for accelerated vesting of any Award only in the
case of death, disability or retirement of the Participant or a merger,
consolidation, sale or other change in control of the Company. Notwithstanding the foregoing or the vesting
limitations set forth in Sections 7(b) and 8(b), however, the Board expressly
retains the discretionary right to accelerate at any time the vesting of any
Award (including any right to waive any right to repurchase), or to grant
Restricted Stock, Restricted Stock Units or Other Stock Unit Awards with
vesting periods of less than the minimum vesting periods set forth in Sections
7(b) and 8(b), provided that such Awards, in the aggregate, will represent no
more than 10% of the aggregate number of shares authorized under the Plan from
time to time.
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Sincerely,
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CASELLA
WASTE SYSTEMS, INC.
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/s/
John W. Casella
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John
W. Casella
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Chairman and Chief
Executive Officer
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