WASTE CONNECTIONS INC
 
Folsom, California
March 30, 2009
 
Dear Stockholders:
 
          You are cordially invited to attend the Waste Connections, Inc. Annual Meeting of Stockholders on Thursday, May 14, 2009, at 10:00 a.m. (California time). The meeting will be held at Waste Connections’ corporate headquarters, 2295 Iron Point Road, Suite 200, Folsom, California 95630. Directions to Waste Connections’ corporate headquarters appear on the back cover of this notice of annual meeting and proxy statement.
 
          The matters to be acted upon are described in the accompanying notice of annual meeting and proxy statement. At the meeting, we will also report on Waste Connections’ operations. As always, we are looking forward to meeting our stockholders in person, and responding to any questions you may have about the company.
 
          YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual Meeting of Stockholders, we urge you to vote and submit your proxy in order to ensure the presence of a quorum. You may do so by returning your proxy card by mail or, pursuant to instructions you receive from your bank or broker, by using the Internet or your telephone. If you attend the meeting, you will have the right to revoke any proxy you previously submitted and vote your shares in person.
     
 
Very truly yours,
  
     
 
graphic
  
 
Chairman and Chief Executive Officer
  

 
 
 

Waste Connections, Inc.
 
2295 Iron Point Road, Suite 200
Folsom, California 95630
 
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 
          The Annual Meeting of Stockholders of Waste Connections, Inc. will be held on Thursday, May 14, 2009, at 10:00 a.m. (California time). The meeting will be held at Waste Connections’ corporate headquarters, 2295 Iron Point Road, Suite 200, Folsom, California 95630, for the following purposes:
     
 
1.
To elect Michael W. Harlan and William J. Razzouk to serve as Class II directors for a term of three years and until a successor for each has been duly elected and qualified; and
     
 
2.
To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2009.
 
          Only stockholders of record of Waste Connections common stock at the close of business on March 16, 2009, are entitled to receive notice of and to vote at the Annual Meeting of Stockholders or any adjournment thereof.
 
          Waste Connections’ Annual Report to Stockholders for the fiscal year 2008 is enclosed for your convenience.
 
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to be held May 14, 2009
 
Our 2009 Proxy Materials and Annual Report to Stockholders for the fiscal year 2008
are available at http://phx.corporate-ir.net/phoenix.zhtml?c=118605&p=irol-proxy.
 
          Stockholders of record may vote their proxies by signing, dating and returning the enclosed proxy card. If your shares are held in the name of a bank or broker, you may be able to vote on the Internet or by telephone. Please follow the instructions on the form you receive. The method by which you decide to vote will not limit your right to vote at the Annual Meeting of Stockholders. If you later decide to attend the Annual Meeting of Stockholders, you may revoke your previously submitted proxy and vote your shares in person.
     
 
By Order of the Board of Directors,
  
     
 
graphic
  
 
Secretary
  
     
March 30, 2009
    
 
          Your vote is important. Whether or not you plan to attend the Annual Meeting of Stockholders, please sign and date the enclosed proxy card or follow any telephone or Internet procedures established by your bank or broker as promptly as possible in order to ensure your representation at the annual meeting.

 
 
 

PROXY STATEMENT
 
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Waste Connections, Inc.
 
2295 Iron Point Road, Suite 200
Folsom, California 95630
 
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
 
GENERAL INFORMATION
 
About this Proxy Statement
 
          We sent you these proxy materials because our Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting of Stockholders. This proxy statement includes information that we are required to provide to you under the rules of the Securities and Exchange Commission, or the SEC, and that is designed to assist you in voting your shares.
 
          We will bear the costs of soliciting proxies from our stockholders. In addition to soliciting proxies by mail, our directors, officers and employees, without receiving additional compensation, may solicit proxies by telephone or in person.
 
          We will arrange for banks and brokers to forward these proxy materials to the beneficial owners of our common stock for whom they hold shares of record, and we will reimburse them for reasonable out-of-pocket expenses incurred in forwarding these materials.
 
          We began mailing these proxy materials to our stockholders on or about April 1, 2009.
 
Who May Vote
 
          Every holder of Waste Connections common stock, as recorded in our stock register at the close of business on March 16, 2009, may vote at the annual meeting. As of March 16, 2009, 80,041,506 shares of our common stock were outstanding and entitled to vote. Each stockholder of record is entitled to one vote for each share of our common stock held by the stockholder. In addition, on March 16, 2009, we had 5,882,354 shares of common stock reserved for issuance upon the conversion of our outstanding 3.75% Convertible Senior Notes due 2026, none of which is entitled to vote at the annual meeting.
 
How to Vote
 
          You may vote in person at the annual meeting or by proxy. We recommend you vote by proxy even if you plan to attend the meeting. You may revoke your proxy before we vote it at the meeting by submitting a new proxy with a later date, voting in person at the meeting or notifying our Corporate Secretary in writing at: Waste Connections, Inc., 2295 Iron Point Road, Suite 200, Folsom, California 95630. We will count your most current proxy, unless you vote in person at the meeting.
 
How Proxies Work
 
          Our Board of Directors is asking for your proxy. Giving us your proxy means that you authorize us to vote your shares at the meeting in the manner you direct. You can vote by proxy:
     
 
●
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.
 
          If you sign your proxy card but do not give voting instructions, we will vote your shares as follows:
     
 
●
in favor of our director candidates; and
     
 
●
in favor of the ratification of the appointment of the independent registered public accounting firm.

 
 
 
 
          For any other matters that may properly come before the meeting, your shares will be voted at the discretion of the proxy holders. You may vote for both, one or neither of our director candidates. You may also vote for or against the other proposal, or you may abstain from voting.
 
          You may receive more than one proxy card depending on how you hold your shares. Shares registered in your name are covered by one proxy card. If you hold shares through someone else, such as a broker, you may also receive material from them asking how you want to vote. You should complete and return each proxy card or other voting instruction request provided to you.
 
Quorum
 
          In order to carry on the business of the annual meeting, we must have a quorum. This means that at least a majority of the outstanding shares entitled to vote as of the close of business on the record date must be present at the meeting, either by proxy or in person.
 
          Abstentions, directions to withhold authority and broker non-votes are counted as present and entitled to vote at the meeting for purposes of determining whether we have a quorum. A broker non-vote occurs when a broker signs and returns a proxy but does not vote on a particular proposal because the broker does not have discretionary voting power for that particular item and has not received voting instructions from the beneficial owner.
 
Votes Needed
 
          Directors are elected by a plurality of shares present at the meeting, meaning the two nominees that receive the highest number of votes cast in favor of their election will be elected.
 
          The ratification of the appointment of the independent registered public accounting firm requires the favorable vote of a majority of the shares present, either by proxy or in person, and entitled to vote.
 
          Abstentions and directions to withhold authority have the same effect as a vote against a matter because they are considered present and entitled to vote, but are not voted.
 
          Broker non-votes will be considered present for quorum purposes but have no effect on the outcome of the election of directors and will not be counted for any purpose in determining whether the appointment of the independent registered public accounting firm has been ratified.
 
Attending in Person
 
          Only stockholders, their proxy holders and our invited guests may attend the meeting. If you plan to attend, please bring identification and, if you hold shares in street name, you should bring your bank or broker statement showing your beneficial ownership of our stock in order to be admitted to the meeting.
 
Counting the Vote
 
          We will use an automated system administered by our transfer agent to tabulate the votes at the annual meeting. Under certain circumstances, a broker or other nominee may have discretionary authority to vote certain shares of common stock if the broker or nominee has not received instructions from the beneficial owner or other person entitled to vote.

 
2
 
 
PROPOSAL 1 — ELECTION OF DIRECTORS
 
          Our Board of Directors is currently composed of five directors and is divided into three classes. One class is elected each year for a three-year term. Our Board of Directors has nominated Michael W. Harlan and William J. Razzouk for reelection to the Board of Directors to serve as Class II Directors until the Annual Meeting of Stockholders to be held in 2012 and until a successor for each has been duly elected and qualified. Proxies will be voted, unless otherwise indicated, for the reelection of Messrs. Harlan and Razzouk to the Board of Directors. Proxies will be voted in a discretionary manner if either of Messrs. Harlan or Razzouk is unable to serve. Each of Messrs. Harlan and Razzouk is currently a director of Waste Connections.
 
          Certain information about Messrs. Harlan and Razzouk and the directors serving in Class I and Class III, whose terms expire in future years, is set forth below.
         
Name and Background
    
Age
  
Director
Since
         
Nominees for Class II Directors for Terms Expiring in 2012
        
         
Michael W. Harlan has been President and Chief Executive Officer of U.S. Concrete, Inc., a publicly traded producer of ready-mixed concrete, precast concrete products and concrete-related products to all segments of the construction industry, since May 2007. Mr. Harlan has also served as a Director of U.S. Concrete, Inc., since May 2006. Mr. Harlan served as U.S. Concrete’s Executive Vice President and Chief Operating Officer from April 2003 to May 2007 and as 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 Anderson LLP, where he was a Manager since July 1986. Mr. Harlan is on the Board of Directors of the National Ready Mixed Concrete Association, where he serves on the Executive Committee, and he is a member of the Board of Trustees for the RMC Research and Education Foundation. Mr. Harlan is a Certified Public Accountant and holds a B.A. degree from the University of Mississippi.
  
48
  
1998
         
William J. Razzouk has been Chief Executive Officer of Newgistics, Inc., a provider of intelligent order delivery and returns management solutions for direct retailers and technology companies, since March 2005. Mr. Razzouk has also served as a Director of Newgistics, Inc. since March 2005. Mr Razzouk also serves on the Board of Directors of Re-Trans, Inc., a privately held transportation management company. 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.
  
61
  
1998
 
 
3
 
 
Name and Background
    
Age
  
Director
Since
         
Class I Director Continuing in Office — Term Expiring in 2011
        
         
Robert H. Davis has been President of Waste Systems International, Inc., a turnkey solid waste management systems provider of environmentally acceptable solutions to developing countries outside the U.S., since November 2007, and a partner in Rubber Recovery Inc., a private, California-based scrap tire processing and recycling company, since July 2006. Mr. Davis is a member of the board of effENERGY LLC, an alternative energy company, and he is the conceptual founder and a member of the external advisory board of the Global Waste Research Institute at California Polytechnic State University. Prior to acquiring Rubber Recovery Inc., Mr. Davis was President, Chief Executive Officer and a Director of GreenMan Technologies, Inc., a publicly traded tire shredding and recycling company, from 1997 to 2006. Prior to joining GreenMan, Mr. Davis served as Vice President of Recycling for Browning-Ferris Industries, Inc., from 1990 to 1997. A 35-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 State University, has done graduate work at George Washington University in Solid Waste Management, and is currently engaged in continuing education at Stanford University Law School in Corporate Governance.
  
66
  
2001
         
Class III Directors Continuing in Office — Terms Expiring in 2010
        
         
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 21 years of experience in the solid waste industry. He is a member of the Board of Trustees for the UC Santa Barbara Foundation. Mr. Mittelstaedt holds a B.A. degree in Business Economics with a finance emphasis from the University of California at Santa Barbara.
  
45
  
1997
         
Edward E. “Ned” Guillet has been an independent human resources consultant since January 2007. From October 1, 2005 until December 31, 2006, he was Senior Vice President, Human Resources for the Gillette Global Business Unit of The Procter & Gamble Company, a position he held subsequent to the merger of Gillette with Procter & Gamble. From July 1, 2001 until September 30, 2005, Mr. Guillet was Senior Vice President, Human Resources and an executive officer of The Gillette Company, a global consumer products company. He joined Gillette in 1974 and held a broad range of leadership positions in its human resources department. Mr. Guillet has been a Director of CCL Industries Inc., a manufacturer of specialty packaging and labeling solutions for the consumer products and healthcare industries, since 2008, where he also serves as a member of the Board of Directors’ Human Resources Committee. Mr. Guillet is a former member of Boston University’s Human Resources Policy Institute. He holds a B.A. degree in English Literature and Secondary Education from Boston College.
  
57
  
2007
 
          THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RE-ELECTION OF MESSRS. HARLAN AND RAZZOUK TO THE BOARD OF DIRECTORS.

 
4
 
 
CORPORATE GOVERNANCE AND BOARD MATTERS
 
Corporate Governance Guidelines and Code of Conduct and Ethics
 
          We have adopted Corporate Governance Guidelines to promote the effective functioning of our Board of Directors and its Committees, to promote the interests of stockholders and to ensure a common set of expectations concerning how the Board of Directors, its Committees and management should perform their respective functions. We have also adopted a Code of Conduct and Ethics that applies to all of our directors, officers and employees. Copies of our Corporate Governance Guidelines and our Code of Conduct and Ethics are available on our website at www.wasteconnections.com. A copy of either may also be obtained, free of charge, by writing to the Secretary of Waste Connections, Inc., 2295 Iron Point Road, Suite 200, Folsom, California 95630.
 
Board of Directors and Committees
 
          Our Board of Directors held nine meetings during 2008, four of which were regularly scheduled and five of which were special meetings held telephonically. The Board of Directors has five standing committees: an Executive Committee, an Audit Committee, a Compensation Committee, a Special Equity Award Committee and a Nominating and Corporate Governance Committee. Each director attended at least 75% of the meetings of the Board of Directors and the committees on which he served in 2008. Our policy on director attendance at Annual Meetings of Stockholders is that directors are invited but not required to attend. Mr. Mittelstaedt, the Chairman of the Board, attended the Annual Meeting of Stockholders in 2008.
 
          The Executive Committee, whose chairman is Mr. Mittelstaedt and whose other current members are Messrs. Harlan and Razzouk, met five times in 2008. The Executive Committee is authorized to exercise all of the powers and authority of the Board of Directors in managing our business and affairs, other than to authorize matters required by Delaware law to be approved by the stockholders, and other than adopting, amending or repealing any of our Bylaws. Between meetings of the Board of Directors, the Executive Committee approves all acquisitions by us for stock and all acquisitions by us for cash or other consideration of $5.0 million or more.
 
          The Board of Directors has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit Committee, whose chairman is Mr. Harlan and whose other current members are Messrs. Razzouk and Davis, met five times in 2008. The Board of Directors has determined that all of the members of the Audit Committee are “financially literate” within the meaning of Section 303A.07 of the New York Stock Exchange Listed Company Manual. The Board of Directors has also determined that Mr. Harlan is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K. The committee’s duties are discussed below under “Audit Committee Report.” A current copy of the Audit Committee Charter, which our Board of Directors has adopted, is available on our website at www.wasteconnections.com. A copy of the Audit Committee Charter may also be obtained, free of charge, by writing to the Secretary of Waste Connections, Inc., 2295 Iron Point Road, Suite 200, Folsom, California 95630.
 
          The Compensation Committee, whose chairman is Mr. Razzouk and whose other current members are Messrs. Harlan and Guillet, met two times in 2008. This committee is responsible for establishing our executive officer compensation policies and administering such policies. The Compensation Committee studies, recommends and implements the amount, terms and conditions of payment of any and all forms of compensation for our directors and executive officers; approves and administers any guarantee of any obligation of, or other financial assistance to, any officer or other employee; and approves the grant of options, warrants, restricted stock and other forms of equity incentives to officers, directors, employees, agents and consultants. See “Executive Compensation — Compensation Discussion and Analysis” for more information regarding compensation and the Compensation Committee. A current copy of the Compensation Committee Charter is available on our website at www.wasteconnections.com. A copy of the Compensation Committee Charter may also be obtained, free of charge, by writing to the Secretary of Waste Connections, Inc., 2295 Iron Point Road, Suite 200, Folsom, California 95630.
 
          The Special Equity Award Committee, which the Board of Directors established on October 25, 2005, is empowered with separate but concurrent authority with the Compensation Committee to make awards to all eligible individuals - typically new hires - under the company’s various equity incentive plans, subject to certain exceptions and limitations set by the Board of Directors. The Special Equity Award Committee may not, for example, grant annual awards to the company’s employees, officers, directors and consultants, which are typically authorized by the Compensation Committee annually in February; the committee may not grant awards to the company’s executive officers or directors; and the committee may not grant more than 10,000 options and warrants or more than 5,000 restricted stock and restricted stock unit awards to an eligible individual in any given calendar year. Mr. Mittelstaedt is the chair and sole member of the Special Equity Award Committee.

 
5
 
 
          The Nominating and Corporate Governance Committee, whose chairman is Mr. Davis and whose other current members are Messrs. Guillet and Razzouk, met two times in 2008. This committee is responsible for recommending director nominees to the Board of Directors and developing and implementing corporate governance principles. A copy of the Nominating and Corporate Governance Committee Charter is available on our website at www.wasteconnections.com. A copy of the Nominating and Corporate Governance Committee Charter may also be obtained, free of charge, by writing to the Secretary of Waste Connections, Inc., 2295 Iron Point Road, Suite 200, Folsom, California 95630.
 
Director Independence
 
          The Board of Directors has determined that each of Messrs. Harlan, Razzouk, Davis and Guillet is “independent” within the meaning of the standards set forth in our Corporate Governance Guidelines. Messrs. Davis, Harlan and Razzouk together make up the Board’s Audit Committee. Messrs. Guillet, Harlan and Razzouk together make up the Board’s Compensation Committee. Messrs. Davis, Guillet and Razzouk together make up the Board’s Nominating and Corporate Governance Committee. These independent, non-management directors meet in an executive session, without management, at each of our four regularly scheduled Board of Directors meetings. The Chair of the Audit Committee, currently Mr. Harlan, presides over each meeting of the company’s non-management directors.
 
          As set forth in our Corporate Governance Guidelines, a majority of the members of our Board of Directors must be independent. For a director to be considered independent, the Board of Directors must determine that the director is “independent” within the meaning of Section 303A.02 of the New York Stock Exchange Listed Company Manual. In addition, for a director to be considered independent, the Board of Directors must determine that the director has no material relationship with the company, either directly or indirectly as a partner, shareholder or officer of an organization that has a relationship with the company. No director who is a former employee of the company, is a former employee 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.
 
          The Board of Directors reviews all commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships of each director to assess whether any of them is a material relationship so as to impair that director’s independence. A “material relationship” means a direct or indirect commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship that is reasonably likely to affect the independent and objective judgment of the director in question, provided that the direct or indirect ownership of any amount of our stock is not deemed to constitute a material relationship. The following commercial or charitable relationships are not considered to be material relationships that would impair a director’s independence: if a director of Waste Connections (a) is also an executive officer of another company that does business with Waste Connections and the annual sales to, or purchases from, Waste Connections are less than the greater of one million dollars or two percent of the annual revenue of that other company; (b) is an executive officer of another company that is indebted to Waste Connections, or to which Waste Connections is indebted, and the total amount of either company’s indebtedness to the other is less than one percent of the total consolidated assets of that other company; or (c) serves as an officer, director or trustee of a charitable organization, and Waste Connections’ discretionary charitable contributions to that organization are less than one percent of that organization’s total annual receipts. The Board of Directors reviews annually whether its members satisfy these categorical independence tests before any non-management member stands for re-election to the Board of Directors.
 
          All relationships not covered by the preceding paragraph are reviewed by the directors who satisfy the independence tests set forth above to determine whether they are material so as to impair a director’s independence. If the Board of Directors determines that any relationship is immaterial even though it does not meet the categorical tests for immateriality set forth above, we will explain in our next proxy statement the basis for the Board of Director’s determination.

 
6
 
 
          In October 2008, Mr. Davis informed the Board of Directors that he intended to join the external advisory board of the Global Waste Research Institute, or the GWRI. The GWRI, of which Mr. Davis is a conceptual founder, is being developed in conjunction with California Polytechnic State University, San Luis Obispo. The GWRI’s mission is to advance state-of-the-art research and development of sustainable technologies and practices to more effectively manage existing and emerging wastes and byproducts. Waste Connections has agreed to make gifts to the GWRI totaling up to $1,000,000 over the next nine years, subject to certain conditions. Based on information provided to the Board of Directors by Mr. Davis, these gifts will initially constitute more than one percent of the total annual receipts of the GWRI, which caused the relationship to fall outside the criteria of the independence tests set forth above and required the Board of Directors to review and decide whether to approve Mr. Davis’ involvement with the GWRI. After a review of the relevant facts and the mission of the GWRI, the Board of Directors determined that Mr. Davis’ participation in the GWRI as a member of it external advisory board coupled with Waste Connections’ contributions to the GWRI would not be a material relationship that would impair Mr. Davis’ independence as a director of Waste Connections.
 
          Waste Connections does not make any personal loans or extend credit to any director or officer, other than those expressly permitted under applicable laws and regulations. All such arrangements must be administered by the Compensation Committee, and such arrangements not already maintained on July 30, 2002, must also be approved in advance by the Compensation Committee. As of December 31, 2008, Waste Connections did not have any loans outstanding to any of its directors or executive officers. No independent director or his or her immediate family member may provide personal services to Waste Connections for compensation, other than as permitted under New York Stock Exchange rules.
 
Independence of Committee Members
 
          In addition to the general requirements for independent Board members described above, members of the Audit Committee must also satisfy the additional independence requirements of the New York Stock Exchange and Rule 10A-3 of the Securities Exchange Act of 1934, as amended. These rules, among other things, prohibit a member of the Audit Committee, other than in his capacity as a member of the Audit Committee, the Board of Directors or any other committee of the Board of Directors, from receiving any compensatory fees from or being an affiliated person of Waste Connections or any of its subsidiaries. As a matter of policy, the Board of Directors also applies this additional requirement to members of the Compensation and Nominating and Corporate Governance Committees.
 
Our Director Nomination Process
 
          Our Board of Directors believes that directors must have the highest personal and professional ethics, integrity and values. They must be committed to representing the long-term interests of our stockholders. They must have objective perspective, practical wisdom, mature judgment and expertise, and operational or financial skills and knowledge useful to the oversight of our business. Our goal is to have a Board of Directors that represents diverse experiences at policy-making levels in business and other areas relevant to our activities. Directors should be committed to serving on the Board for an extended period of time.
 
          In addition to the foregoing qualities, the Nominating and Corporate Governance Committee will take a number of other factors into account in considering candidates as nominees for the Board of Directors, including the following: (i) whether the candidate is independent within the meaning of our Corporate Governance Guidelines; (ii) relevant business, academic or other experience; (iii) willingness and ability to attend and participate actively in Board and 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.

 
7
 
 
          When seeking director candidates, the Nominating and Corporate Governance Committee may solicit suggestions from incumbent directors, management, third party advisors, business and personal contacts, and stockholders. The Nominating and Corporate Governance Committee may also engage the services of a search firm. After conducting an initial evaluation, the Nominating and Corporate Governance Committee will make arrangements for candidates it considers suitable to be interviewed by one or more members of the committee. Each candidate will be required to complete a standard directors’ and officers’ questionnaire, completed by all of the directors annually. The Nominating and Corporate Governance Committee may also ask the candidate to meet with members of our management. If the Nominating and Corporate Governance Committee believes that the candidate would be a valuable addition to the Board of Directors, it will recommend the candidate for nomination to the Board.
 
          The Nominating and Corporate Governance Committee will apply the criteria described above when considering candidates recommended by stockholders as nominees for the Board of Directors. In addition, any of our stockholders may nominate one or more persons for election as a director of the company at an Annual Meeting of Stockholders if the stockholder complies with the notice, information and consent provisions contained in our Amended and Restated Bylaws. We have an advance notice Bylaw provision relating to the nomination of Directors. Pursuant to that provision, to be considered for inclusion in our proxy materials, notice of a stockholder’s nomination of a person for election to the Board of Directors must be received by the Secretary of Waste Connections in writing at the address listed on the first page of this Proxy Statement no later than the close of business (California time) on the 120th day prior to the anniversary date of our proxy statement released to stockholders in connection with the previous year’s Annual Meeting of Stockholders. To be considered timely, stockholder nominations submitted after this deadline must be received as set forth above no later than the close of business (California time) on the 90th day prior to the Annual Meeting of Stockholders. The stockholder’s written notice must include information about the proposed nominee, including name, age, business address, residence address, telephone number, email address, principal occupation, number of shares of our common stock beneficially owned, and any other information required in proxy solicitations for the election of directors, including employment history, participation as a director of other public or private corporations, and information about any relationship or understanding between the proposing stockholder and the candidate or any other person (naming that person) pursuant to which the nomination is to be made. The written notice must be accompanied by the executed consent of each nominee to serve as a director if elected. In addition, the stockholder giving the notice must include the following information: such stockholder’s name, record address, phone number, email address, number of shares of our common stock beneficially owned, and a description of all arrangements or understandings between the stockholder and each nominee and any other person (naming such person) pursuant to which each nomination is to be made by the stockholder.
 
          Before nominating a sitting director for re-election at an Annual Meeting of Stockholders, the Nominating and Corporate Governance Committee will consider the director’s performance and contribution to the Board of Directors.
 
How to Contact Directors
 
          Stockholders and other interested parties may communicate with the Board of Directors generally, with the non-management directors as a group or with a specific director at any time by writing to the Board of Directors, the non-management directors or a specific director, care of the Secretary of Waste Connections, Inc., 2295 Iron Point Road, Suite 200, Folsom, California 95630. The Secretary will forward all communications to the Board of Directors, the non-management directors or a specific director, as applicable, as soon as practicable after receipt without screening the communication. Stockholders and other interested parties are requested to provide their contact information and to state the number of shares of our common stock that they beneficially own in their communications to the Board of Directors. Because other appropriate avenues of communication exist for matters that are not of stockholder interest, such as general business complaints or employee grievances, stockholders and other interested parties are urged to limit their communications to the Board of Directors to matters that are of stockholder interest and that are appropriate for consideration at the Board level.
 
Compensation Committee Interlocks and Insider Participation
 
          In 2008, the Compensation Committee of our Board of Directors consisted of Messrs. Razzouk, Harlan and Guillet. None of our executive officers served as a director or member of the compensation committee of another entity which had an executive officer that served as a director or member of our Compensation Committee.

 
8
 
 
Compensation of Directors for Fiscal Year 2008
 
          The following table provides compensation information for the year ended December 31, 2008, for each member of our Board of Directors.
                               
Name
    
Fees
Earned or
Paid in
Cash
($)
  
Stock
Awards
($)(3)
  
Option
Awards
($)(4)
  
Non-Equity
Incentive Plan
Compensation
($)
  
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
  
All Other
Compensation
($)
  
Total
($)
  
Ronald J. Mittelstaedt(1)
  
—
  
—
  
—
    
—
  
—
  
—
  
—
  
Eugene V. Dupreau(1)(2)
  
—
  
—
  
—
    
—
  
—
  
—
  
—
  
Robert H. Davis
  
45,000
  
155,589
(5)
—
(9)
  
—
  
—
  
—
  
200,589
  
Edward E. “Ned” Guillet
  
43,500
  
154,014
(6)
—
(10)
  
—
  
—
  
—
  
197,514
  
Michael W. Harlan
  
49,500
  
155,589
(7)
—
(11)
  
—
  
—
  
—
  
205,089
  
William J. Razzouk
  
45,000
  
155,589
(8)
—
(12)
  
—
  
—
  
—
  
200,589
  
 
(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)
Mr. Dupreau did not stand for re-election at Waste Connections’ 2008 Annual Meeting of Stockholders held on May 15, 2008. Accordingly, his term as a Class I director expired on that date.
   
(3)
Stock awards consist of restricted stock units granted under our Second Amended and Restated 2004 Equity Incentive Plan. Amounts shown do not reflect compensation actually received by the director. Instead, the amounts shown are the dollar amounts recognized by us as compensation expense for financial reporting purposes in 2008 for stock awards pursuant to the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, or SFAS 123R, excluding estimates of forfeitures related to service-based vesting conditions. Although the amounts shown do not reflect estimated forfeitures, the amounts actually recognized in our financial statements are reduced for estimated forfeitures pursuant to SFAS 123R. The assumptions used to calculate the value of stock awards are set forth under Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed with the SEC on February 10, 2009. These compensation expense amounts reflect stock awards granted in 2008, 2007 and 2006 (the first year in which we granted stock awards to independent directors). The following table sets forth the amount included in the 2008 “Stock Awards” column with respect to awards granted in 2008 and prior years.
 
   
Amount included in Table
Attributable to
  
   
Prior Year
Awards
  
Fiscal 2008
Awards
  
 
Robert H. Davis
 $    12,971   $    142,618  
 
Edward E. “Ned” Guillet
     11,396       142,618  
 
Michael W. Harlan
     12,971       142,618  
 
William J. Razzouk
     12,971       142,618  
   
(4)
No option 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 2008. See the “Principal Stockholders” table on page 12 for details on the amount of our common stock beneficially owned by each of our directors as of February 28, 2009.
   
(5)
The grant date fair value of the 2008 award computed in accordance with SFAS 123R is $150,009, and disregards estimates of forfeitures related to service-based vesting conditions. As of December 31, 2008, Mr. Davis had an aggregate of 2,598 shares of stock awards in the form of restricted stock units outstanding.
 
 
9
 
 
(6)
The grant date fair value of the 2008 award computed in accordance with SFAS 123R is $150,009, and disregards estimates of forfeitures related to service-based vesting conditions. As of December 31, 2008, Mr. Guillet had an aggregate of 2,598 shares of stock awards in the form of restricted stock units outstanding.
   
(7)
The grant date fair value of the 2008 award computed in accordance with SFAS 123R is $150,009, and disregards estimates of forfeitures related to service-based vesting conditions. As of December 31, 2008, Mr. Harlan had an aggregate of 2,598 shares of stock awards in the form of restricted stock units outstanding.
   
(8)
The grant date fair value of the 2008 award computed in accordance with SFAS 123R is $150,009, and disregards estimates of forfeitures related to service-based vesting conditions. As of December 31, 2008, Mr. Razzouk had an aggregate of 2,598 shares of stock awards in the form of restricted stock units outstanding.
   
(9)
As of December 31, 2008, Mr. Davis had an aggregate of 6,400 option awards outstanding.
   
(10)
As of December 31, 2008, Mr. Guillet had no option awards outstanding.
   
(11)
As of December 31, 2008, Mr. Harlan had an aggregate of 41,500 option awards outstanding.
   
(12)
As of December 31, 2008, Mr. Razzouk had an aggregate of 31,500 option awards outstanding.
 
          Each independent director receives a monthly cash retainer of $2,125 plus a fee of $4,500 for attending each Board meeting and each committee meeting (unless held in conjunction with a full Board meeting) in person. Each Board member is also eligible for reimbursement of reasonable expenses incurred. Committee chairs receive the following additional cash compensation, which amounts are added to their monthly retainers: Audit Committee Chair - $500, Compensation Committee Chair - $125, and Nominating and Corporate Governance Committee Chair - $125. The monthly cash retainer is intended to compensate independent directors for participation in meetings held by conference call and for incidental participation in company affairs between meetings.
 
          Other than Mr. Guillet, who the Board of Directors elected on March 1, 2007, to fill a new directorship it created, we granted each independent director an option to purchase shares of our common stock at the time of his initial election or appointment. Historically, we have also granted each independent director an option to purchase between 16,875 and 45,000 shares of our common stock each year during which the director served on the Board of Directors. However, consistent with our intention of granting restricted stock units in lieu of stock options to our management team, on February 5, 2008, we granted each independent director 5,196 restricted stock units under our Second Amended and Restated 2004 Equity Incentive Plan and no options. The units vested in two successive, equal installments upon the February 5, 2008 grant date and the first anniversary of the grant date. The annual grants made to each of our independent directors in 2009 consisted of 5,698 restricted stock units and no options. The units granted in 2009 were granted under our Second Amended and Restated 2004 Equity Incentive Plan (as amended and restated) and vest in two successive, equal installments upon the February 11, 2009 grant date and the first anniversary of the grant date.
 
Directors’ Equity Ownership
 
          The Board of Directors has a policy that requires each non-management director of the company to own a number of shares of the company’s common stock having a market value of at least $200,000, as measured by current market value or purchase price, whichever is higher. Unless otherwise satisfied, current directors and new directors will achieve this requirement by retaining one half of all restricted stock unit grants as they vest, measured on an after tax basis, until the value of their holdings reaches the required level.

 
10
 
 
PRINCIPAL STOCKHOLDERS
 
          The following table shows the amount of our common stock beneficially owned, as of February 28, 2009, by: (i) each person or entity that we know owns more than five percent of our common stock; (ii) our named executive officers and each of our directors and nominees; and (iii) all of our current directors and executive officers as a group. An asterisk in the Percent of Class column indicates beneficial ownership of less than one percent by a director or nominee.
               
 
Name of Beneficial Owner(1)
 
  
Amount and
Nature of
Beneficial
Ownership(2)
  
Percent of
Class
  
T. Rowe Price Associates, Inc.(3)
    
6,039,027
    
7.55
%
Barclays Global Investors, NA(4)
    
4,799,703
    
6.00
  
Eagle Asset Management, Inc.(5)
    
4,716,464
    
5.89
  
Dos Mil Doscientos Uno, Ltd.(6)
    
4,100,100
    
5.12
  
Steven F. Bouck
    
874,047
(7)
  
1.08
  
Ronald J. Mittelstaedt
    
304,383
(8)
  
0.38
  
Worthing F. Jackman
    
212,939
(9)
  
0.27
  
Darrell W. Chambliss
    
137,670
(10)
  
0.17
  
Eric M. Merrill
    
85,538
(11)
  
0.11
  
Michael W. Harlan
    
61,920
(12)
  
*
  
William J. Razzouk
    
49,670
(13)
  
*
  
Robert H. Davis
    
18,769
(14)
  
*
  
Edward E. “Ned” Guillet
    
12,545
    
*
  
All executive officers and directors as a group (16 persons)
    
2,048,777
(15)
  
2.51
  
 
   
(1)
Beneficial ownership is determined in accordance with the rules of the SEC. 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 February 28, 2009, shares of common stock into which convertible securities are convertible within 60 days after February 28, 2009, and shares which will become issuable within 60 days after February 28, 2009, 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.
   
(3)
The share ownership of T. Rowe Price Associates, Inc. is based on a Schedule 13G/A filed with the SEC on February 11, 2009. T. Rowe Price Associates, Inc. has sole voting power with respect to 1,630,102 shares and sole dispositive power with respect to all shares. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202.
   
(4)
The share ownership of Barclays Global Investors, NA is based on a Schedule 13G filed with the SEC on February 5, 2009, by Barclays Global Investors, NA, Barclays Global Fund Advisors, Barclays Global Investors, Ltd, Barclays Global Investors Japan Limited, Barclays Global Investors Canada Limited, Barclays Global Investors Australia Limited and Barclays Global Investors (Deutschland) AG (collectively, “Barclays”). Barclays has sole voting power with respect to 4,054,331 shares and sole dispositive power with respect to all such shares. The address of Barclays Global Investors, NA and Barclays Global Fund Advisors is 400 Howard Street, San Francisco, California 94105.
   
(5)
The share ownership of Eagle Asset Management, Inc. is based on a Schedule 13G filed with the SEC on January 26, 2009. Eagle Asset Management, Inc. has sole voting and dispositive power with respect to all shares. The address of Eagle Asset Management, Inc. is 880 Carillon Parkway, St. Petersburg, Florida 33716.
 
 
11
 
 
(6)
The share ownership of Dos Mil Doscientos Uno, Ltd. is based on a Schedule 13G filed with the SEC on January 29, 2009. Dos Mil Doscientos Uno, Ltd. has sole voting and dispositive power with respect to all shares. The address of Dos Mil Doscientos Uno, Ltd. is Ronda Universitat, 31 1-1, Barcelona, Spain 08007.
   
(7)
Includes 616,393 shares subject to options exercisable within 60 days of February 28, 2009. Excludes 3,900 shares owned by Mr. Bouck’s two minor sons as to which Mr. Bouck disclaims beneficial ownership.
   
(8)
Includes 216,238 shares subject to options exercisable within 60 days of February 28, 2009, and 88,145 shares held by Mittelstaedt Enterprises, L.P., of which Mr. Mittelstaedt is a limited partner. Excludes 2,850 shares held by the Mittelstaedt Family Trust as to which Mr. Mittelstaedt disclaims beneficial ownership.
   
(9)
Includes 202,814 shares subject to options exercisable within 60 days after February 28, 2009.
   
(10)
 Includes 33,756 shares subject to options exercisable within 60 days after February 28, 2009.
   
(11) 
 Includes 76,500 shares subject to options exercisable within 60 days after February 28, 2009.
   
(12)
 Includes 41,500 shares subject to options exercisable within 60 days after February 28, 2009.
   
(13)
 Includes 31,500 shares subject to options exercisable within 60 days after February 28, 2009.
   
(14)
Includes 6,400 shares subject to options exercisable within 60 days after February 28, 2009.
   
(15)
Includes 1,490,320 shares subject to options exercisable within 60 days after February 28, 2009.
 
EXECUTIVE COMPENSATION
 
Compensation Discussion and Analysis
 
          Philosophy and Objectives
 
          Throughout this proxy statement, the individuals who served as our Chief Executive Officer and our Chief Financial Officer during 2008, as well as our three other most highly compensated executive officers in 2008, are referred to as the named executive officers, or the NEOs.
 
          The Compensation Committee’s philosophy with respect to the compensation of the NEOs does not differ materially from the philosophy that applies to other executive officers. The Compensation Committee believes that compensation paid to NEOs should be closely aligned with our performance on both a short-term and long-term basis, linked to specific, measurable results intended to create value for stockholders and should assist us in attracting and retaining key executives critical to our long-term success.
 
          In establishing compensation for NEOs, the Compensation Committee’s objectives are to:
     
 
●
Attract and retain individuals with superior leadership ability and managerial talent by providing competitive compensation and rewarding outstanding performance;
     
 
●
Ensure that NEO compensation is aligned with our corporate strategies, business objectives and the long-term interests of our stockholders; and
     
 
●
Provide an incentive to achieve key strategic and financial performance measures by linking incentive award opportunities to the achievement of performance goals in these areas.
 
          Our overall compensation program is structured to attract and retain highly qualified executive officers by paying them competitively consistent with our success. We believe that compensation should be structured to ensure that a significant portion is directly related to our stock’s performance and other factors that directly and indirectly influence stockholder value. Accordingly, our approach to compensation is to provide a base salary, annual performance-based compensation tied to goals that are intended to link NEO compensation to our operating and financial performance, and long-term equity grants intended to align NEO compensation with stockholder returns and to aid in retention.

 
12
 
 
          Our compensation program provides compensation in the form of both cash and equity to provide incentives to reward both our short-term and long-term performance. The Compensation Committee allocates total compensation between cash and equity based on comparisons with other companies and the judgment of the Committee members. The balance between cash and equity compensation among NEOs and other members of the senior executive team is evaluated annually.
 
          Approach to Compensation
 
          The Compensation Committee has the primary authority for the consideration and determination of the compensation we pay to our executive officers and directors, including the amount of equity-based compensation. To aid the Compensation Committee in making its determination, the Chief Executive Officer meets with the Compensation Committee and provides recommendations annually to the Compensation Committee regarding the compensation of all executive officers, other than himself. The Compensation Committee also holds executive sessions not attended by any members of management or non-independent directors. The Compensation Committee is not bound to follow the Chief Executive Officer’s recommendations. The Compensation Committee also has the authority to engage its own independent advisors to assist it in carrying out its duties.
 
          In determining the level of base salary, performance-based compensation and long-term equity-based compensation paid to the NEOs, the Compensation Committee considers: (i) the compensation structure and practices of a peer group of companies that we believe are our leading competitors in the solid waste industry; (ii) a comparator group of companies, most of which are non-solid waste companies, with comparable financial profiles; and (iii) its own judgment as to an appropriate level of compensation for a company of our size and financial performance. These peer and comparator groups are identified and discussed below. While the Compensation Committee uses compensation consultants from time to time, it does not engage consultants every year. For 2008, the Compensation Committee had available a tally sheet that included, for each officer (including the NEOs), current base salary, salary paid in 2007, bonus percentage, cash bonus paid in 2007, options granted in 2007, restricted stock units granted in 2007, dollar amount of 401(k) and deferred compensation plan matches in 2007, payments and reimbursements for various expenses that could be considered perquisites, the value realized from the exercise of options and sale of the underlying stock in 2007, the value of vested and unvested unexercised options and unvested restricted stock units as of the end of the year, and the amount payable to each officer under various severance scenarios, including on a change in control. In determining the amount of compensation for the NEOs, the Compensation Committee does not take into account amounts realized from prior equity-based compensation grants because the Compensation Committee seeks to provide compensation that takes into account the cost of replacing the NEOs on a market competitive basis and what is equitable based on our performance. To some extent, appreciation reflected in the amounts realized from prior equity-based compensation grants confirms the Compensation Committee’s success in aligning compensation with our stockholders’ interests, thus validating our compensation philosophy.
 
          We provide the Chief Executive Officer with greater compensation and benefits than that provided to the other NEOs to reflect his importance and value to us as well as the increased level of responsibility and risk faced by him as our Chairman and Chief Executive Officer. Mr. Mittelstaedt’s compensation also differs as a direct result of the Compensation Committee’s review of the comparator group compensation data, and reflects the competitive nature of compensation paid to chief executive officers of companies within the comparator group. The Compensation Committee believes that Mr. Mittelstaedt’s competitive compensation package is important to reward, motivate and retain him as a highly valued chief executive whose leadership and strategic vision have helped create value for stockholders since our inception.
 
          Transition in Compensation Practices
 
          Our compensation plan for 2008 reflects a three-year transition in compensation practices that culminated in 2007. The transition, which the Compensation Committee launched in 2004 as it reviewed our compensation philosophy primarily in anticipation of the requirement that stock options be expensed, also addressed our evolution from an early growth stage to a mature public company. In connection with its review in 2004, the Compensation Committee engaged Pearl Meyer & Partners, a nationally known compensation consulting firm, to assist it in the determination of the key elements of the compensation program. The Compensation Committee requested that Pearl Meyer establish a comparator group, provide an analysis of how the compensation of our NEOs compares to that of named executive officers in the comparator group, advise the Compensation Committee on alternative forms of compensation and make recommendations to the Committee. Pearl Meyer reported directly to the Compensation Committee, and its services directly related to executive compensation. Pearl Meyer has not performed any other service for the company.

 
13
 
 
          Compensation Benchmarking
 
          An important component of setting and structuring compensation for our executive officers is determining the compensation packages offered by three leading national waste services companies – Waste Management, Inc., Republic Services, Inc. and Allied Waste Industries, Inc. Allied Waste Industries, Inc. merged with Republic Services, Inc. in December 2008. While we do not specifically benchmark our compensation to a peer group, we do periodically perform our own survey of the compensation practices of this peer group of companies to assess our competitiveness. In doing so, we take into account factors such as the relative financial performance of those companies and factors that differentiate us from them. Each of the companies in this peer group is substantially larger than we are and the Compensation Committee takes this into account when comparing compensation.
 
          In 2006, Pearl Meyer, following discussions with management, established a comparator group consisting of the following companies with financial profiles comparable to ours: Aaron Rents, Inc.; Covanta Holding Corporation; EMCOR Group, Inc.; G & K Services, Inc.; McGrath Rentcorp; Mobile Mini, Inc.; Pacar International; Quanta Services, Inc.; Republic Services, Inc.; Rollins, Inc.; ServiceMaster Company; Stericycle, Inc.; United Rentals, Inc.; and Williams Scotsman International, Inc. Allied Waste Industries, Inc. and Waste Management, Inc. were included as additional reference companies. We did not engage Pearl Meyer to update this group for 2008.
 
          Determination of Compensation Components
 
          In light of the 2004 review, the Compensation Committee decided to implement a series of changes to our compensation philosophy for the NEOs and other officers. We (i) increased base salary to more competitive levels over a three-year period through 2007; (ii) decreased equity-based compensation as a percentage of total compensation for these individuals relative to historic levels; and (iii) implemented a program to transition the equity-based compensation of these individuals from stock options to restricted stock unit awards. In 2007, the Compensation Committee adopted the Senior Management Incentive Plan governing the annual performance bonuses and the annual long-term equity incentive grants for 2007 and subsequent years to the five individuals who were our NEOs at that time and to such other executives and employees as may be determined by the Compensation Committee. The Compensation Committee’s objective was to set base salaries of our NEOs close to the median of the comparator group by 2007, before adjustment for inflation and geographic differences. The Committee also reconfirmed its goal of setting equity-based compensation awards over time such that the after-tax income statement impact resulting from company-wide equity-based compensation awards would not exceed approximately five to six percent of projected net income at that time. These goals are based on estimates of future results and actual results of compensation decisions could vary materially. Moreover, the Compensation Committee reserves the right to alter compensation goals and philosophies at any time.
 
          Base Salary. Effective February 1, 2008, for Messrs. Mittelstaedt, Jackman, Bouck and Chambliss, and June 1, 2008, for Mr. Merrill, the anniversary of Mr. Merrill’s employment agreement, we established the following base salaries for our NEOs:
         
Name
 
  
Annual
Base
Salary
  
         
Ronald J. Mittelstaedt
  
$
538,200
  
Worthing F. Jackman
  
$
320,850
  
Steven F. Bouck
  
$
398,475
  
Darrell W. Chambliss
  
$
346,725
  
Eric M. Merrill
  
$
270,000
  

 
14
 
 
          Performance Bonuses. Our compensation program includes a performance bonus to reward executive officers based on our performance and the individual executive’s contribution to that performance. Under our Senior Management Incentive Plan, which is explained in detail below, each participant in the Plan has an opportunity to earn an annual performance bonus based on a targeted percentage of the participant’s annual base salary for the year. The objective of the annual performance bonus is to provide participants with an incentive to manage the company to achieve certain targeted levels of financial performance based on budgeted revenue each year.
 
          Equity-Based Compensation. We believe that equity ownership in our company is important to tie the ultimate level of an executive officer’s compensation to the performance of our stock and stockholder gains while creating an incentive for sustained growth. To meet these objectives, our senior management team receives equity-based compensation.
 
          In 2008, the Compensation Committee granted only restricted stock unit awards to our NEOs; as was the case in 2007, no stock options were granted to our NEOs in 2008. The Compensation Committee believes that the use of restricted stock unit awards will reduce the overall compensation cost to us compared to the cost of granting options at levels consistent with previous years, yet will offer our NEOs a competitive and more stable level of equity-based compensation, providing them the opportunity to be owners of and to share in the success of the company. In 2008, our restricted stock unit grants for our NEOs were authorized and made on February 5, 2008, and vest in equal increments over five years.
 
          The Compensation Committee generally makes company-wide annual grants of equity-based compensation to our executive officers and other employees in late January or in February. This timing coincides with a number of events that make that timing optimum from the Compensation Committee’s standpoint: first, the Compensation Committee has available financial results from the previous year; second, making the grants at this time allows management to notify employees of the amount of their annual grant award at or around the same time that management notifies employees of the amount of their cash performance bonus with respect to the previous year, which we typically pay in February. In addition, due to seasonal declines in our business and other market factors, the market price of our stock tends to be lower in the first quarter of each year. The Compensation Committee believes that it is in our best interests and the best interests of our stockholders to confer the benefit of a lower stock price on our employees, if possible, in order to enhance employee morale and minimize the cost of equity-based compensation to the company.
 
          Senior Management Incentive Plan
 
          Under the Senior Management Incentive Plan, each participant has the opportunity to earn up to 175% of his targeted performance bonus based on our achievement of certain targeted levels of financial performance established by the Compensation Committee and based on recommendations of the Chief Executive Officer. Each targeted performance goal is weighted in order to calculate an overall percentage achievement against targeted performance goals; the resulting percentage is then used as a multiplier to determine the annual performance bonus earned.
 
          The performance goals for 2008, which the Compensation Committee adopted in February 2008, were measured against achievement of targeted levels of: (1) EBITDA, weighted at 20%; (2) operating income, or EBIT, weighted at 20%; (3) operating income as a percentage of revenue, or EBIT Margin, weighted at 30%; and (4) net cash provided by operating activities, or CFFO, as a percentage of revenue, weighted at 30%. Because the operating budget adopted by the Board of Directors is a compilation of stretch goals set for each District, the targeted performance goals reflect a percentage or factor of the final budget, as set forth below:
                   
   
2008
Budget
    
2008
Factor
    
2008 Targeted
Performance Goal
  
EBITDA
   $ 324.7M       97.5 %   $ 316.6M  
EBIT
   $ 229.4M       96.0 %   $ 220.3M  
EBIT Margin
     22.1 %     N/A       21.2 %
CFFO Margin
     24.5 %     97.5 %     23.9 %

 
15
 
 
          Under the terms of the Plan, the Compensation Committee, in its complete and sole discretion, may adjust the targeted performance goals if an acquisition, significant new contract or extraordinary event results in a significant impact relative to the goals in order to exclude or reduce the impact of that acquisition, contract or event. For these purposes, the Compensation Committee determines operating income by adjusting for any gains or losses on disposal of assets, and determines EBITDA by adding depreciation and amortization to operating income. The Compensation Committee chose these measures of performance because they are widely used by investors as valuation measures in the solid waste industry and because the targeted goals encourage improving free cash flow and returns on invested capital. The target bonuses are set at 100% of the Chief Executive Officer’s base salary and 50% of the base salary of each of the other participants, and a multiplier is used so that if the company achieves 100% of its target, the participants receive 100% of their performance bonuses. The multiplier may result in the participants being paid a greater (but not more than 175%) or lesser (down to zero percent) percentage of their targeted performance bonuses, based on whether the company’s performance is greater or less than 100% of the target, in accordance with the following sliding scale:
                         
% Target
Achievement
  
Target %
Multiplier
  
Bonus as
% of Base Salary
  
   
CEO
  
Other Participants
  
105% or Higher
    
175
%
    
175
%
    
87.5
%
  
104
%
    
160
%
    
160
%
    
80.0
%
  
103
%
    
145
%
    
145
%
    
72.5
%
  
102
%
    
130
%
    
130
%
    
65.0
%
  
101
%
    
115
%
    
115
%
    
57.5
%
  
100
%
    
100
%
    
100
%
    
50.0
%
  
99
%
    
80
%
    
80
%
    
40.0
%
  
98
%
    
60
%
    
60
%
    
30.0
%
  
97
%
    
40
%
    
40
%
    
20.0
%
  
96
%
    
20
%
    
20
%
    
10.0
%
  
95
%
    
0
%
    
0
%
    
0.0
%
  
 
          Payments under this program are contingent on continued employment at the time of payout, subject to the terms of any applicable employment agreements.
 
          2008 Adjusted Target Goals and Results
 
          Adjusted targeted performance goals and adjusted results and corresponding target percentages for 2008 were as follows:
                               
   
Adjusted
Target(1)
    
Adjusted
Results(1)
    
Adjusted
Results as %
of Target
    
Weighting
    
Target
Achievement
  
EBITDA
   $ 321.6M     $ 311.4M       96.9 %     20 %     19.4 %
EBIT
   $ 222.7M     $ 215.6M       96.8 %     20 %     19.4 %
EBIT Margin
     21.0 %     20.8 %     99.5 %     30 %     29.8 %
CFFO Margin
     23.9 %     25.6 %     107.3 %     30 %     32.2 %
Overall Achievement
                                     100.8 %
 
(1)
The Compensation Committee adjusted the targets and results during 2008 to exclude or reduce the impact of certain acquisitions and fuel costs not incorporated in the original budget.

 
16
 
 
          In addition to the foregoing Target Achievements, in determining actual bonus payouts the Compensation Committee considered uncontrollable decreases in market prices for recycled commodities in late 2008 that negatively impacted results, as well as management’s success in raising over $600 million of capital in volatile financial markets to position the company for additional growth opportunities. For 2008, targeted and actual annual performance bonuses as a percentage of each participant’s annual base salary were as follows:
               
Name
 
  
Targeted Bonus
% of Base Salary
  
  Actual Bonus
% of Base Salary
  
Ronald J. Mittelstaedt
  
100
%
 
122.0
%
 
Worthing F. Jackman
  
50
%
 
60.9
%
 
Steven F. Bouck
  
50
%
 
60.9
%
 
Darrell W. Chambliss
  
 50
%
 
60.9
%
 
 
          In lieu of paying an annual performance bonus in cash, the Compensation Committee, in its complete and sole discretion, may choose to pay the annual performance bonus in restricted stock units issued under our Second Amended and Restated 2004 Equity Incentive Plan (as amended and restated) or any succeeding plan we adopt. If restricted stock units are issued, their value, as determined by the Compensation Committee, will be at least 125% of the earned cash bonus to compensate for the risk and vesting period associated with the underlying stock. Mr. Merrill, who became an NEO in 2008, is not a participant in the Senior Management Incentive Plan. Pursuant to his employment agreement, Mr. Merrill is eligible to receive a maximum annual cash bonus equal to 40% of his beginning base salary in the applicable year, which is payable if the Board of Directors determines, in its sole and exclusive discretion, that such year’s financial objectives have been fully met. For 2008, Mr. Merrill’s actual bonus equaled 40.8% of his base salary at the beginning of that year.
 
          Equity-Based Compensation
 
          Under our Senior Management Incentive Plan, each participant also receives an annual long-term incentive grant of restricted stock units based on the performance of both the company and the individual, subject to a vesting schedule approved by the Compensation Committee. The size of the grant is targeted between 125% and 150% of the participant’s base salary. For 2008, the size of the grant was approximately 150% of the participant’s base salary. The objective of the long-term incentive grant is to supplement each participant’s base salary and annual performance bonus in order to maintain total compensation at the Compensation Committee’s targeted percentile of the comparator group and vest in equal increments over five years. In the case of the Chief Executive Officer, the target was the median of the comparator group.
 
          Amended and Restated Senior Management Incentive Plan
 
          In 2008, our Board of Directors adopted the Amended and Restated Senior Management Incentive Plan (the “Amended SMIP”), which was subsequently approved by our stockholders. The Amended SMIP is a performance-based incentive compensation plan similar to the Senior Management Incentive Plan adopted in 2007. Under the Amended SMIP, designated senior executives of the company are eligible to receive performance bonus payments and equity-based compensation. The Compensation Committee has designated the one-year period commencing January 1, 2009, as the first performance period under the Amended SMIP. For 2009, the participants under the Amended SMIP are Messrs. Mittelstaedt, Jackman, Bouck and Chambliss. The Amended SMIP is designed with the intent to allow us to pay performance-based compensation under Section 162(m) of the United States Internal Revenue Code, or the IRC.
 
          Stock Ownership Guidelines
 
          To encourage long-term stock ownership, the Senior Management Incentive Plan provides that each participating NEO is expected to retain at least 50% of all after-tax shares of common stock received from long-term incentive grants until such NEO meets and maintains the following stock ownership thresholds, as valued by the Compensation Committee:
     
 
●
For the Chief Executive Officer and President, three times such participant’s base salary; and
     
 
●
For other participating NEOs, two and one-half times such participant’s base salary.

 
17
 
 
 
Non-Equity Incentive Plan, Defined Contribution Plan, Nonqualified Deferred Compensation Plan Compensation and Other Benefits
 
          Other than cash performance bonuses, we do not provide non-equity incentive plan compensation, nor do we provide defined benefit retirement plans to our NEOs. The NEOs are entitled to participate in a company-sponsored 401(k) profit sharing plan on the same terms as all employees. We make a matching contribution of $0.50 for each dollar of an employee’s pre-tax contributions until the employee’s contributions equal five percent of the employee’s base salary, subject to certain limitations imposed by the IRC. Employees are eligible to participate in the 401(k) plan beginning on the June 1 or December 1 first following completion of one full year of employment. Our matching contributions vest over five years.
 
          The NEOs and certain other highly compensated employees are also entitled to participate in the nonqualified deferred compensation plan, which we put in place to mitigate the impact of our officers and other highly compensated employees being unable to make the maximum contribution permitted under the 401(k) plan due to certain limitations imposed by the IRC. The deferred compensation plan allows a highly compensated employee to voluntarily defer receipt of a portion of the employee’s earned base salary and all or a portion of cash performance bonuses, if any. Earnings on contributions to the deferred compensation plan are determined by reference to the returns on one or more select mutual funds (as determined by the participant) that are also available for investment by the general public. We make a matching contribution of $0.50 for each dollar of an employee’s pre-tax contributions until the employee’s contributions equal five percent of the employee’s base salary, less the amount of any match we make on behalf of the employee under the company-sponsored 401(k) plan, and subject to the same limits that apply to the 401(k) plan except that our matching contributions are 100% vested when made. The earnings on these funds may exceed or fall short of market rate returns, depending on the performance of the funds selected compared to the markets in general.
 
          We also offer a number of benefits to the NEOs pursuant to benefit programs that provide for broad-based employee participation. In addition to the 401(k) plan described above, the benefits include medical, prescription drugs, dental and vision insurance, long-term disability insurance, life and accidental death and dismemberment insurance, health and dependent flexible spending accounts, a cafeteria plan and employee assistance benefits. These generally available benefits do not specifically factor into decisions regarding an individual executive’s total compensation or equity-based compensation package. These benefits are designed to help us attract and retain employees as we compete for talented individuals in the marketplace, where such benefits are commonly offered.
 
          Perquisites and Other Personal Benefits
 
          The material components of our NEOs’ compensation are described above. We do not provide our NEOs extensive perquisites. Those that are provided are summarized in the Summary Compensation Table for Fiscal Year 2008 and the accompanying footnotes. Perquisites are valued at the incremental cost to the company.
 
          Tax Deductibility Considerations
 
          Within our performance-based compensation program, we aim to compensate the NEOs in a manner that is tax effective, but we do not let tax considerations drive compensation decisions. Section 162(m) of the IRC generally disallows an income tax deduction to publicly held corporations for compensation in excess of $1,000,000 paid for any fiscal year to the corporation’s “covered employees,” which is defined in Section 162(m) as the Chief Executive Officer and the three other most highly compensated executive officers, other than the Chief Financial Officer. However, the statute exempts qualifying performance-based compensation from the deduction limit if certain requirements are met. The policy of the Compensation Committee in the past has been to attempt to structure the compensation of our executive officers to avoid the loss of the deductibility of any compensation, even though Section 162(m) does not preclude the payment of compensation in excess of $1,000,000. In certain situations, the Compensation Committee may approve compensation that will not meet these requirements in order to assure competitive total compensation for the NEOs. Bonuses paid under the Senior Management Incentive Plan and compensation deemed paid with respect to stock option awards, direct stock issuances and restricted stock unit awards under the Second Amended and Restated 2004 Equity Incentive Plan (as amended and restated) may be subject to the $1,000,000 limitation, unless considered “performance-based” compensation. Bonuses paid under the Amended and Restated Senior Management Incentive Plan are intended to be “performance-based” compensation.

 
18
 
 
          Severance and Change in Control Arrangements
 
          The provisions regarding severance and change in control contained in each NEO’s employment agreement are described elsewhere in this proxy statement, under “Potential Payments Upon Termination or Change in Control.” With slight variations, the agreements for our NEOs other than Mr. Merrill generally provide for severance payments under various conditions in an amount approximately equal to three times the NEO’s base salary and bonus, plus the maximum bonus available for the year of termination under the officer’s employment agreement. Mr. Merrill’s employment agreement generally provides for a severance payment under various conditions in an amount approximately equal to the lesser of his base salary for a period of one year and his base salary for the remainder of the term of his employment agreement, plus the pro-rated maximum bonus available to him for the year of termination under his employment agreement. The Compensation Committee believes that these levels of severance are appropriate in light of what it understands is the level of severance offered by the comparator group, and because our relatively low base salaries would result in payments comparable to those that peer companies would pay given a lower multiple but higher base.
 
          The primary factor considered in establishing the change in control benefits was the competitive marketplace. In the case of payment of a multiple of the employee’s annual base salary and bonus in the event of a change in control, the Compensation Committee believes that this is appropriate because such payment generally motivates the executive to act in the best interests of the stockholders by removing the distraction of post change in control uncertainties faced by such executive with regard to his or her compensation. In addition, the company believes that the multiple of the payment is appropriate because the company’s executives have base salaries and bonuses that are low relative to their industry peers; therefore, the multiple would result in payments comparable to those that peer companies would pay given a lower multiple but higher base and bonus. In the case of payment of a bonus in the event of a change in control, the company adopted this approach because, in addition to the rationale discussed above, it would be impractical and potentially unfair, following a change in control, to continue to measure the company’s performance based on goals and targets previously set for an independent, freestanding company. In the case of accelerated vesting of stock options, the company uses stock options to provide compensation only to the extent the company’s stock price increases over the term of the option. In the case of full value awards, such as restricted stock units, the company uses such awards to enable recipients to share in both the risk and rewards of stock ownership through stock depreciation or appreciation and provide a type of compensation used by competitors. Immediate vesting upon a change in control permits recipients of such awards to participate in any price appreciation associated with a change in control on the basis similar to that available to stockholders as a whole, without the necessity of placing receipt of that compensatory element at the risk of the actions of an acquirer.
 
          The Compensation Committee reserves the right to alter severance payment levels going forward, though this action would require the consent of each NEO to an amendment to his existing employment agreement.
 
Compensation Committee Report
 
          The Compensation Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis to be included in this Proxy Statement. Based on the review and discussions referred to above, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and included in this Proxy Statement.
 
          This report is submitted on behalf of the Compensation Committee.
   
 
William J. Razzouk, Chairman
Edward E. “Ned” Guillet
Michael W. Harlan

 
19
 
 
SUMMARY COMPENSATION TABLE FOR FISCAL YEAR 2008
 
          The following table summarizes the total compensation earned by each of our named executive officers in 2008, 2007 and 2006.