Vermont Business Magazine A small Texas private equity firm has announced that it is dropping its proxy challenge involvingCasella Waste Systems, Inc(Nasdaq:CWST). Casella, a Rutland-based regional solid waste, recycling, and resource management services company, has issued the following statement in response to JCP Investment Management’s press release issued Wednesday, before Casella’s 2015 Annual Meeting of Stockholders Friday. JCP has decided to withdraw its notice of nomination and concede the proxy contest that it had been pursuing against Casella to seek the election of two nominees to Casella’s Board. Chairman John Casella is one of the directors up for re-election.
Casella statement:
“The strategic changes that we started making in 2012, and which preceded JCP’s interest in Casella by almost two years, and the significant improvements in our financial and operating performance which we have been very proud to report to our stockholders, together with the significant refreshment of our Board which has included the additions of waste management industry veterans, James E. O’Connor and William P. Hulligan, as independent directors, the appointment of Mr. O’Connor as our Board’s new lead independent director, and the other significant corporate governance enhancements that our Board has adopted have clearly resonated with Casella’s stockholders. JCP’s 11th hour concession reflects the feedback we, and undoubtedly JCP, have received regarding Casella’s strategic direction, the substantial progress we have achieved in improving our financial and operating performance, our refreshed Board and the new independent Board leadership that is now in place to oversee our strategic trajectory. As we look forward to moving past JCP’s proxy contest, we look forward to seeing our stockholders at this Friday’s Annual Meeting.”
JCP Investment Management, LLC (together with its affiliates, "JCP"), the beneficial owner of approximately 5.7% of the outstanding Class A shares of Casella Waste Systems, Inc, issued the following statement regarding theNovember 6, 2015Annual Meeting of Casella.
James Pappas, Managing Member of JCP, said in a statement, "Over the course of this year, JCP has fought relentlessly to bring attention to the (1) sustained underperformance, (2) poor capital allocation, and (3) extremely weak corporate governance at Casella. We are encouraged that as a result of our campaign and the strong support we received from our fellow stockholders, Casella has made the following positive changes after our public announcement onApril 28, 2015:
- July 7, 2015-John Chapplestepped down as a director from the class of directors with terms ending at the Annual Meeting (the "2015 Class") having been on the board since 1994;Jim O'Connor, a new independent director, joined the Board in the resulting vacancy in the 2015 Class.
- September 1, 2015-Jim McManusstepped down as director in the 2015 Class having been on the board since 2005;Bill Hulligan, new independent director, joined the Board in the resulting vacancy in the 2015 Class.
- September 1, 2015- Casella adopted a number of corporate governance changes including the following:
- Adoption of majority vote resignation policy for only uncontested elections, but not for contested elections;
- Adoption of stock ownership guidelines for executives;
- Adoption of policy restricting hedging and pledging activities
- September 2015- Casella released earnings guidance for 2018, including:
- Commitment to a EBITDA guidance
- Commitment to a Free Cash Flow guidance
- Commitment to decrease leverage
- October 19, 2015-Greg Petersstepped down as Lead Director; recent addition to the Board;Jim O'Connor, appointed Lead Director."
Pappas said, "We are gratified to have served as the catalyst for these positive first steps in the right direction and are inclined to give the new Board a chance to deliver on its promises to shareholders.In that regard we have decided to withdraw our nomination of directors ensuring the election of the incumbent slate. We believe this will position us well to monitor the progress of the Board's current plan and we fully expect shareholders to hold the Board and management accountable for any failure to deliver on their plan - now and in the future. Importantly, even with these big concessions, we estimate stockholders made a strong showing of support for the election of JCP's nominees.This strong support is a clear message: the Board must either deliver fully on their plan or shareholders expect to see a full strategic review process for the sale of the Company, not just undertaken but completed in a value-maximizing manner for Class A shareholders. JCP intends to remain a vigilant and vocal shareholder of Casella.We will monitor the new Board's progress executing on its commitments and we will do whatever is necessary to protect shareholder rights and maximize shareholder value at Casella.
"It is our hope that the Board will respond appropriately to shareholders' strong support for JCP's platform of stronger corporate governance by making voluntary enhancements to, at a minimum:
(1)declassify the Board structure and allow for annual accountability of directors;
(2)increase the representation on the Board of Class A public shareholderswho currently have approximately 80% voting power, but only 1 of 9 Board seats (in contrast, Class B shareholders,John and Doug Casella, have only 20% of the vote yet have 2 of 9 Board seats)."
Pappas concluded, "One of the positive results of this process was that it caused the directors to hear firsthand the long-standing frustration of stockholders, and we expect that as a result they will objectively evaluate all strategies to unlock value at Casella. We want to thank our fellow stockholders for their support and contribution to this long overdue and healthy debate about the future of our Company, and encourage them to keep up the pressure through the 2016 annual meeting and beyond so that accountability for Casella management and the new Board continues beyond this annual meeting."
The Casella Board urges stockholders who have questions or need help voting theWHITEproxy card please call Casella’s proxy solicitor, MacKenzie Partners, Inc. toll-free at (800) 322-2885 or (212) 929-5500.
Stockholders are reminded that the 2015 Annual Meeting is being held this Friday, November 6, 2015, at 10:00 a.m., Eastern Time, at The Mountain Top Inn & Resort, 195 Mountain Top Road, Chittenden, Vermont 05737. Whether or not a stockholder plans to attend the 2015 Annual Meeting, Casella urges all stockholders to sign, date and return theWHITEproxy card they recently received and voteFOR ALLthe Casella Board’s highly qualified and very experienced nominees –John W. Casella, William P. Hulligan and James E. O’Connor. Stockholders may also vote by telephone or Internet by following the instructions on theWHITEproxy card.
Details regarding the results of the 2015 Annual Meeting will be contained in a Current Report on Form 8-K that Casella will be filing with the Securities and Exchange Commission (SEC) next week. This filing will be available at no charge at the SEC’s web site atwww.sec.gov. Copies will also be available at no charge at the Investor Relations section of our corporate website atwww.casella.com.
Casella is being advised in connection with the proxy contest by Wilmer Cutler Pickering Hale and Dorr LLP and Morgan, Lewis & Bockius LLP. Mackenzie Partners, Inc. is serving as Casella’s proxy solicitor.
About Casella Waste Systems, Inc.
Casella Waste Systems, Inc., headquartered in Rutland, Vermont, provides solid waste management services consisting of collection, transfer, disposal, and recycling services in the northeastern United States. For further information, investors may contact Ned Coletta, Chief Financial Officer at (802) 772-2239; media may contact Joseph Fusco, Vice President at (802) 772-2247; and anyone may visit Casella's website athttp://www.casella.com.
About JCP Investment Management, LLC
JCP Investment Management, LLC is an investment firm headquartered inHouston, TXthat engages in value-based investing across the capital structure. JCP follows an opportunistic approach to investing across different equity, credit and distressed securities largely inNorth America.
Source:RUTLAND, Vt.--(BUSINESS WIRE)--Casella Waste Systems, Inc JCP11.4.2015