EXHIBIT 10.01
EXECUTIVE EMPLOYMENT AGREEMENT
ALLIED WASTE INDUSTRIES, INC., a Delaware corporation ("Company") and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Executive") enter into this Executive Employment Agreement
("Agreement") effective September 19, 2005 ("Effective Date"), to set forth the
terms and conditions of Executive's employment. The parties agree as follows:
1. CERTAIN DEFINITIONS AND UNDERSTANDINGS. As used in this Agreement,
the following terms have the meanings prescribed below:
Annual Incentive Compensation is defined in Section 4.2.
Base Salary is defined in Section 4.1.
Beneficial Owner is defined in Rule 13(d)-3 under the Exchange Act;
provided, however, and without limitation, that any individual, corporation,
partnership, group, association or other person or entity that has the right to
acquire any Voting Stock at any time in the future, whether such right is (a)
contingent or absolute, or (b) exercisable presently or at any time in the
future, pursuant to any agreement or understanding or upon the exercise or
conversion of rights, options or warrants, or otherwise, shall be the Beneficial
Owner of such Voting Stock.
Board of Directors (or Board) means the Company's Board of
Directors.
Cash Termination Excise Tax is defined in Section 6.7(a).
Cash Termination Payment is defined in Section 6.7(a).
Cause is defined in Section 5.3.
Change in Control of the Company means one of the following: (a) the
Company merges or consolidates, or agrees to merge or to consolidate, with any
other corporation (other than a wholly-owned direct or indirect subsidiary of
the Company) and is not the surviving corporation (or survives as a subsidiary
of another corporation), (b) the Company sells, or agrees to sell, all or
substantially all of its assets to any other person or entity, (c) the Company
is dissolved, (d) any third person or entity (other than Apollo Advisors, L.P.,
The Blackstone Group L.P., or a trustee or committee of any qualified employee
benefit plan of the Company) together with its Affiliates shall become (by
tender offer or otherwise), directly or indirectly, the Beneficial Owner of at
least 30% of the Voting Stock of the Company, or (e) the individuals who
constitute the Board of Directors of the Company as of the Effective Date
("Incumbent Board") shall cease for any reason to constitute at least a majority
of the Board of Directors; provided, that any person becoming a director whose
election or nomination for election was approved by a majority of the members of
the Incumbent Board shall be considered, for the purposes of this Agreement, a
member of the Incumbent Board.
Change in Control Date is defined in Section 6.5.
Code means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated by the Internal Revenue Service thereunder.
Common Stock means the Company's common stock, par value $.01 per
share.
Company means Allied Waste Industries, Inc., a Delaware corporation.
Compensation Plans is defined in Section 4.6.
Confidential Information is defined in Section 7.2.
Continuing Obligations is defined in Section 3.
Date of Termination means the earliest to occur of (a) the date of
the Executive's death, or (b) the date specified in the Notice of Termination,
in accordance with Section 5.8.
Disability means an illness or other disability which prevents the
Executive from discharging the essential functions of his responsibilities under
this Agreement, with or without a reasonable accommodation, for a period of 180
consecutive calendar days, or an aggregate of 180 calendar days in any calendar
year, during the Term, all as determined in good faith by the Board of Directors
(or a committee thereof).
Effective Date means September 19, 2005.
Exchange Act means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Securities and Exchange
Commission thereunder.
Executive means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or, as applicable, his heirs).
Good Reason is defined in Section 5.5.
LTIP means the Company's Long-Term Incentive Plan.
Notice of Termination is defined in Section 5.8.
Paid Leave is defined in Section 4.3.
Retirement is defined in Section 5.7.
Share Price has the same meaning as "Fair Market Value" as that term
is defined in the Company's 1991 Incentive Stock Plan, as amended.
Targeted Annual Incentive Compensation is defined in Section 4.2.
Term is defined in Section 3.
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Threshold Share Price means (a) in the case of the one (1) year
period following the Effective Date, a Share Price of $16 or more, or (b) in the
case of subsequent years, a Share Price which is at least fifteen percent (15%)
greater than the Threshold Share Price for the preceding one (1) year period.
Unrestricted Payments means those payments to which the Executive is
entitled under Sections 6.2(a)(1), 6.3(a)(1), 6.4(a), 6.5(a)(1), 6.6(a), 6.6(b),
and 6.6(c) of this Agreement.
Voting Stock means all outstanding shares of capital stock of the
Company entitled to vote generally in an election of directors; provided,
however, that if the Company has shares of Voting Stock entitled to more or less
than one (1) vote per share, each reference to a proportion of the issued and
outstanding shares of Voting Stock shall be deemed to refer to the proportion of
the aggregate votes entitled to be cast by the issued and outstanding shares of
Voting Stock.
Welfare Plans is defined in Section 4.7.
Without Cause is defined in Section 5.4.
In addition, throughout this Agreement, the parties have defined
certain words and intend for those definitions to apply whenever the parties
have used a defined word in this Agreement. One of the defined terms is
"Company" which means Allied Waste Industries, Inc. However, the parties expect
hat some or all of the Company's obligations under this Agreement will be
fulfilled through its parent, subsidiary, related, or successor companies or
businesses (which will be called "Affiliates" in this Agreement). Accordingly,
Executive acknowledges that the discharge of any obligation of the Company under
this Agreement, which may be through the acts of one or more Affiliates,
discharges any such obligation of the Company. Moreover, the obligations
Executive assumes under this Agreement will be owed to the Company and to its
Affiliates. Accordingly, the parties expressly intend for the Affiliates to be
third-party beneficiaries of the promises made and obligations assumed by
Executive in this Agreement.
2. GENERAL DUTIES OF COMPANY AND EXECUTIVE.
2.1. The Company will employ the Executive as its Executive Vice
President, Human Resources and Organizational Development. The Executive's
authority, duties and responsibilities shall be those assigned by the Company's
Chief Executive Officer and/or Board of Directors (or a committee thereof) and
agreed to by the Executive. The Executive shall devote reasonable time and
attention during normal business hours to the affairs of the Company and use his
best efforts to perform faithfully and efficiently his duties and
responsibilities. The Executive may (a) serve on corporate, civic or charitable
boards or committees, (b) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (c) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's duties and responsibilities.
2.2. The Executive agrees and acknowledges that he owes a fiduciary
duty of loyalty, fidelity and allegiance to act at all times in the best
interests of the Company and to do no act and to make no statement, oral or
written, which would injure the Company's business, its interests or its
reputation. The Executive also agrees that he shall not knowingly become
involved
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in a conflict of interest with the Company and, upon discovery of any such
conflict, that he will inform the Company of the conflict and will not allow the
conflict to continue.
2.3. The Executive agrees to comply at all times with all applicable
policies, rules and regulations of the Company, including but not limited to,
the Company's Code of Ethics and the Company's policies regarding trading in
Common Stock, stock ownership and retention guidelines, and reimbursement of
expenses, as each is in effect from time to time.
3. TERM. The initial "Term" of this Agreement shall be a period of two (2)
years, beginning on the Effective Date and ending on the second anniversary of
the Effective Date, and thereafter this Agreement shall automatically renew for
successive one (1) year Terms. Notwithstanding the foregoing, either party may
terminate this Agreement pursuant to Section 5 of this Agreement, in which case
the Term shall end on the Date of Termination specified in the Notice of
Termination (or on the Executive's date of death if termination is due to the
Executive's death). Neither the termination of this Agreement nor the consequent
end of the Term shall affect the Company's obligations under Section 6 of this
Agreement or the Executive's obligations under Sections 7 through 11 of this
Agreement (or under Section 2.3 with respect to the Company's policies regarding
trading in Common Stock) (collectively, "Continuing Obligations").
4. COMPENSATION AND BENEFITS.
4.1. Base Salary. As compensation for services to the Company during
the Term, the Company shall pay to the Executive until the Date of Termination a
base salary at the annual rate of Four Hundred and Twenty Thousand Dollars
($420,000.00), or such higher rate as may be determined from time to time in the
discretion of the Board of Directors (or a committee thereof) ("Base Salary").
Base Salary shall be payable in equal bi-weekly installments or in accordance
with the Company's established policy, subject only to such payroll and
withholding deductions as may be required by law and other deductions that are
either applied generally to employees of the Company for insurance and other
employee benefit plans or which are authorized by the Executive. For all
purposes under this Agreement, the Executive's Base Salary shall include any
portion thereof which is deferred under any nonqualified plan or arrangement.
4.2. Annual Incentive Compensation. In addition to Base Salary, the
Executive shall be eligible to be awarded, for each fiscal year during the Term
until the Date of Termination, beginning with the 2006 calendar year, annual
cash incentive compensation (either pursuant to an incentive plan or program of
the Company or otherwise) ("Annual Incentive Compensation") in an amount to be
determined by the Board of Directors (or a committee thereof) in its sole
discretion and specified as a percentage of the Executive's Base Salary
("Targeted Annual Incentive Compensation"). The Executive's actual Annual
Incentive Compensation may range from zero percent (0%) to the maximum
percentage of the Executive's Base Salary permitted by the terms of the
Company's annual incentive compensation plan(s), as amended from time to time.
All such Annual Incentive Compensation shall be payable at a time to be
determined by the Board of Directors (or a committee thereof) in its sole
discretion. For all purposes under this Agreement, the Executive's Annual
Incentive Compensation shall include any portion thereof which is deferred under
any nonqualified plan or arrangement.
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4.3. Paid Leave. Commencing on the Effective Date and continuing
until the Date of Termination, for each full calendar year in which the
Executive is employed under this Agreement, the Executive shall be entitled to
twenty (20) days' paid leave ("Paid Leave") during the year without any
reduction in the Compensation to which he is entitled under this Section 4. For
any partial calendar year during which the Executive is employed under this
Agreement, he will be entitled to a prorated amount of this Paid Leave, based on
the number of weeks worked in the calendar year and pursuant to the Company's
then current paid leave policy. For the 2005 calendar year, the Executive will
be eligible for eight (8) days of Paid Leave. Because the Company intends for
this Paid Leave to be used by the Executive, so that he benefits from having
time away from his customary employment duties, the Executive must use the Paid
Leave provided under this Section 4.3, for each calendar year, during the
relevant calendar year for which it is provided. If the Executive does not use
all of the Paid Leave to which he is entitled in any calendar year, he will
forfeit this benefit at the end of that calendar year and shall have no right to
take more than twenty (20) days of Paid Leave in the following or any subsequent
calendar year or to be otherwise compensated for not having utilized the Paid
Leave.
4.4. Automobile Allowance. Commencing on the Effective Date and
continuing until the Date of Termination, the Executive shall receive an
automobile allowance of Six Hundred Dollars ($600.00) per month ("Automobile
Allowance"). The Board of Directors (or a committee thereof), in its discretion,
may increase the Automobile Allowance based upon relevant circumstances.
4.5. Club Membership Dues. Commencing on the Effective Date and
continuing until the Date of Termination, the Executive shall receive an
allowance for monthly membership dues (i.e., the regular membership fee, and not
incidental or ancillary charges such as food, beverages, rentals, coaching,
training, supplies, therapy, spa, etc.) for a club or organization of
Executive's choice in the amount of Six Hundred Dollars ($600.00) per month
("Club Allowance"). The Executive will not be entitled to this Club Allowance if
the Company determines that membership in the relevant club or organization
would violate the letter or spirit of any Company policy.
4.6. Incentive, Savings, Retirement and Stock Plans. As of the
Effective Date, the Executive shall be granted options to acquire up to One
Hundred and Fifty Thousand (150,000) shares of Common Stock, and Twenty Thousand
(20,000) restricted shares of Common Stock, subject to the terms of the
Company's 1991 Incentive Stock Plan, as amended, and of the instruments
evidencing the grants. In addition, the Executive shall be entitled to
participate in and be eligible to receive benefits under all executive
incentive, savings, retirement, deferral, and stock (including any stock option,
restricted stock, restricted stock units, phantom stock and other stock rights
and interests, including derivative interests) plans and programs currently
maintained or hereinafter established by the Company for the benefit of its
similarly-situated executive officers (collectively "Compensation Plans"). The
Executive's participation in the Compensation Plans shall be governed by the
terms and conditions of those plans. Subject to the terms of the Company's stock
ownership and retention guidelines, as adopted and/or amended by the Board of
Directors (or a committee thereof) from time to time, the Executive is expected
to retain fifty percent (50%) of the shares received upon the exercise of any
options or the vesting of any restricted stock (after netting such shares for
the purpose of satisfying the Executive's income and payroll tax obligations
incurred as the result of any exercise or vesting event), until such time as he
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has accumulated stock with a value of at least two and one-half (2.5) times the
Executive's Base Salary. For purposes of the preceding sentence, "Base Salary"
shall be (a) during the first year of the Term, the Executive's Base Salary as
of the Effective Date, and (b) during each successive year during the Term, the
Executive's Base Salary as of the first day of such successive Term. The
Executive shall participate in the Company's Long-Term Incentive Plan ("LTIP"),
beginning with the 2006-2008 performance cycle.
4.7. Welfare Plans. The Executive shall be eligible to participate
in and shall receive all benefits under each welfare benefit plan of the Company
currently maintained or subsequently established by the Company for the benefit
of its similarly-situated executive officers. Such welfare benefit plans may
include medical, dental, vision, disability, group life, accidental death and
travel accident insurance plans and programs (collectively "Welfare Plans"). The
Executive's participation in the Welfare Plans shall be governed by the terms
and conditions of those plans.
4.8. Reimbursement of Expenses. The Executive may from time to time
during the Term incur various business expenses customarily incurred by persons
holding positions of like responsibility, including, without limitation, travel,
entertainment and similar expenses incurred for the benefit of the Company. The
Company shall reimburse the Executive for all legitimate expenses incurred on
the Company's behalf, upon the Company's receipt of proper documentation for
such expenses, provided that reimbursement of the expenses would not violate the
letter or spirit of any Company policy regarding the reimbursement of such
expenses.
4.9. Relocation Expense Allowance. The Company shall pay the
Executive an allowance of Two Hundred Thousand Dollars ($200,000.00) to assist
the Executive in relocating from his current home in New York to the Phoenix -
Scottsdale metropolitan area. This payment will be made in one lump sum within
fifteen (15) business days of the effective date.
4.10. Indemnification and Insurance. At all times during the term of
this Agreement, and for such additional periods as are provided for in this
Agreement, the Executive shall be covered under the Company's directors' and
officers' liability insurance, if any, and under a separate Indemnity Agreement
with the Company.
4.11 Signing Bonus. The Executive will receive a one-time signing
bonus in the gross amount of One Hundred and Fifty Thousand Dollars
($150,000.00). Payment of the signing bonus will be made to the Executive with
thirty (30) days of the Effective Date and will be subject to Federal, State and
local tax withholding. If this Agreement is terminated by the Company for Cause,
or by the Executive Without Good Reason within ninety (90) days of the Effective
Date, the Executive shall repay the signing bonus to the Company.
5. TERMINATION. This Agreement may be terminated as follows:
5.1. Death. This Agreement shall terminate automatically upon the
death of the Executive.
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5.2. Disability. The Company may terminate this Agreement, upon
written notice to the Executive delivered in accordance with Sections 5.8 and
11.1, upon the Disability of the Executive.
5.3. Cause. The Company may terminate this Agreement, upon written
notice to the Executive delivered in accordance with Sections 5.8 and 11.1, for
Cause. For purposes of this Agreement, "Cause" means (a) the Executive is
convicted of, or pleads guilty or nolo contendere to, (i) a felony, or (ii) any
other crime involving the Company, (b) the Board of Directors makes a
reasonable, good faith determination that the Executive has breached any
material term of this Agreement, (c) the Board of Directors makes a reasonable,
good faith determination that the Executive has violated any applicable
policies, rules, or regulations of the Company, including but not limited to,
the Company's Code of Ethics and the Company's policies regarding trading of
Common Stock and reimbursement of expenses, (d) the Board of Directors
determines that the Executive engaged in (i) willful or deliberate conduct, the
result of which exposes the Company to actual or potential financial or other
injury, (ii) fraud, (iii) misappropriation of tangible or intangible property or
funds of the Company, or (iv) embezzlement of Company funds, (e) the Board of
Directors determines that the Executive willfully or deliberately failed or
refused to perform his assigned duties, as reasonably requested by the Company,
and failed to cure his nonperformance within thirty (30) days of receipt of a
written notice from the Board of Directors setting forth in reasonable detail
the facts and circumstances of his nonperformance, or (f) the Executive breached
any statutory or common law duty of loyalty to the Company. For purposes of this
Section 5.3, a determination by the Board of Directors is evidenced by a
resolution, duly adopted by at least two-thirds (2/3) of the entire membership
of the Board of Directors at a meeting called and held for the purpose of
considering the termination of the Executive's employment for Cause, at which
the Executive and his representative have the right to attend and address the
Board of Directors, finding that, in the good faith belief of the Board of
Directors the Executive engaged in conduct described in this Section 5.3 and
specifying the particulars thereof in reasonable detail. No determination by the
Board of Directors will prevent the Executive from contesting such determination
through arbitration, as provided in Section 11.9 of the Agreement.
5.4. Without Cause. The Company may terminate this Agreement Without
Cause, upon written notice to the Executive delivered in accordance with
Sections 5.8 and 11.1. For purposes of this Agreement, the Executive will be
deemed to have been terminated "Without Cause" if the Executive is terminated by
the Company for any reason other than Cause, Disability, or death.
5.5. Good Reason. The Executive may terminate this Agreement for
Good Reason, upon written notice to the Company delivered in accordance with
Sections 5.8 and 11.1. For purposes of this Agreement, "Good Reason" means (a)
the assignment to the Executive of any duties that are materially inconsistent
with the Executive's duties or responsibilities as contemplated in this
Agreement, (b) any other action by the Company which results in a material
diminishment in the Executive's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities (provided,
however, that a temporary diminishment, whether material or not, due to the
Executive's illness or injury, will not constitute grounds for a termination for
Good Reason by the Executive), (c) any material breach by the Company of any of
the provisions of this Agreement, (d) requiring the Executive to relocate
permanently to any office or location, except in the Phoenix-Scottsdale
metropolitan area or any
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other location to which the majority of the Company's executive officers are
relocated, without his consent, (e) any material reduction, or attempted
material reduction, at any time during the Term, of the Base Salary or in the
aggregate of the compensation or benefits described in Article 4 of this
Agreement (provided, however, that any change in the targeted percentage for
purposes of determining the Executive's Annual Incentive Compensation, any
change in the Company's reimbursement policies, or any change in any
Compensation Plans or Welfare Plans, which affects a majority of the similarly
situated executive officers covered by those policies or plans, shall not be
considered "Good Reason"), or (f) the Company's failure to comply, or the
Company's preventing or impeding the Executive from compliance, with any legal
obligation which would subject the Executive to any civil or criminal liability.
5.6. Without Good Reason. The Executive may terminate this Agreement
Without Good Reason, upon written notice to the Company delivered in accordance
with Sections 5.8 and 11.1. For purposes of this Agreement, the Executive will
be deemed to have terminated "Without Good Reason" if the Executive terminates
this Agreement for any reason other than Good Reason, or if this Agreement is
terminated due to the Executive's death or Retirement.
5.7. Retirement. The Executive may terminate this Agreement upon
Retirement, upon written notice to the Company delivered in accordance with
Sections 5.8 and 11.1. For purposes of this Agreement, "Retirement" means the
Executive's bona fide retirement from the Company, as determined in good faith
by the Board of Directors (or a committee thereof).
5.8. Notice of Termination. Any termination of this Agreement by the
Company for Cause, Without Cause or as a result of the Executive's Disability,
or by the Executive for Good Reason or Without Good Reason or upon Retirement,
shall be communicated by a Notice of Termination to the other party. A "Notice
of Termination" means a written notice which (a) indicates the specific
termination provision in this Agreement relied upon and (b) if the termination
is by the Company for Cause or by the Executive for Good Reason, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated. The
Notice of Termination must specify the Date of Termination. In the case of a
termination by the Company for Cause or due to the Executive's Disability or by
the Executive for Good Reason or due to Retirement, the Date of Termination may
be as early as the date notice is given but no later than thirty (30) calendar
days after notice is given, unless otherwise agreed to in writing by both
parties. In the case of a termination by the Company Without Cause or by the
Executive Without Good Reason, the Date of Termination may be as early as
fourteen (14) calendar days after notice is given but no later than sixty (60)
calendar days after notice is given, unless otherwise agreed to by the parties
in writing. The Notice of Termination shall also conform with the provisions of
Section 11.1.
6. OBLIGATIONS OF COMPANY UPON TERMINATION.
6.1. Cause, Without Good Reason. If this Agreement is terminated
either by the Company for Cause or by the Executive Without Good Reason, the
Company shall pay to the Executive, in a lump sum cash payment within thirty
(30) days after the Date of Termination, the aggregate of (a) any unpaid portion
of the Executive's Base Salary (as in effect on the Date of Termination) owed as
of the Date of Termination, and (b) any accrued but unpaid Paid Leave as of the
Date of Termination. The Company also shall promptly pay or reimburse to the
Executive any
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costs and expenses (and moving and relocation expenses, if otherwise agreed to
by the Company in writing) paid or incurred by the Executive which would have
been payable under Section 4.8 of this Agreement if the Executive's employment
had not terminated.
All other obligations of the Company and rights of the Executive
hereunder shall terminate effective as of the Date of Termination; provided,
however, that the Executive's rights under any Compensation Plan or Welfare Plan
shall be governed by the terms and provisions of each such plan and are not
necessarily severed on the Date of Termination.
6.2. Death or Disability. If this Agreement is terminated as a result of
the Executive's death or Disability:
(a) The Company shall pay to the Executive (or to his estate, in the
event the Executive is deceased) the following amounts:
(1) any unpaid portion of the Executive's Base Salary (as in
effect on the Date of Termination) owed as of the Date of Termination, any
unpaid portion of the Annual Incentive Compensation previously awarded to
the Executive, and any accrued but unpaid Paid Leave as of the Date of
Termination, in a lump sum cash payment within thirty (30) days after the
Date of Termination; and
(2) an amount equal to two (2) times the sum of the
Executive's Base Salary (as in effect on the Date of Termination) plus the
Executive's Target Annual Incentive Compensation for the fiscal year during
which the Date of Termination occurs, in bi-weekly installments over a two
(2) year period following the Executive's Date of Termination. The Company
may, to the extent feasible, purchase insurance to cover all or any part of
the obligation contemplated in the foregoing sentence, and the Executive
agrees to submit to a physical examination and otherwise cooperate with the
Company to facilitate the procurement of such insurance.
(b) The Company shall, promptly upon submission by the Executive (or
his estate) of supporting documentation, pay or reimburse to the Executive any
costs and expenses (including moving and relocation expenses, if otherwise
agreed to by the Company in writing) paid or incurred by the Executive which
would have been payable under Section 4.8 of this Agreement if the Executive's
employment had not terminated.
(c) The Company shall continue providing medical, dental, and/or
vision coverage to the Executive and/or the Executive's spouse and dependents,
at least equal to that which would have been provided to him under Section 4.7
if the Executive's employment had not terminated, if such coverage continues to
be available to the Company, until the earlier of (1) the date the Executive
becomes eligible for any comparable medical, dental, or vision coverage provided
by any other employer, (2) the date the Executive becomes eligible for Medicare
or any similar government-sponsored or provided health care program (whether or
not such coverage is equivalent to that provided by the Company), or (3) the
fifth anniversary of the Executive's Date of Termination.
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(d) Whenever compensation is payable to the Executive under this
Agreement during a period in which he is partially or totally disabled, and such
disability would (except for the provisions of this Agreement) entitle the
Executive to disability income or salary continuation payments from the Company
according to the terms of any plan or program presently maintained or hereafter
established by the Company, the disability income or salary continuation paid to
the Executive pursuant to any such plan or program shall be considered a portion
of (and not in addition to) the payment to be made to the Executive pursuant to
this Section 6.2. If disability income is payable directly to the Executive by
an insurance company under the terms of an insurance policy paid for by the
Company, the amounts paid to the Executive by such insurance company shall be
considered a portion of the payment (and not in addition to the payment) to be
made to the Executive pursuant to this Section 6.2.
(e) All other obligations of the Company and rights of the Executive
hereunder shall terminate effective as of the Date of Termination; provided,
however, that except as otherwise specifically modified by the terms of this
Agreement the Executive's rights under the Compensation Plans and Welfare Plans
shall be governed by the terms and provisions of those Plans and are not
necessarily severed on the Date of Termination.
(f) The Executive (or the Executive's estate, as the case may be)
shall continue to vest and, if applicable, continue to be permitted to exercise,
all of the rights and interests awarded to the Executive under the Company's
stock plans, as if the Executive were still employed by the Company, for a
period of two (2) years following the Date of Termination (or, if less, for the
remainder of the stated terms of the rights or interests). Notwithstanding any
contrary provision of the LTIP, the Executive's Awards for the Performance
Cycles (as defined in the LTIP) in effect as of the Date of Termination shall be
prorated in the manner described in Section 8(a) of the LTIP.
(g) The Executive (or the Executive's estate, as the case may be)
shall continue to be covered under the Company's directors' and officers'
liability insurance, if any, and under his separate Indemnity Agreement with the
Company, as if the Executive's employment had not terminated, for a period of
ten (10) years following his Date of Termination (or, in the case of the
Indemnity Agreement, for such longer term as may be provided for in the
Indemnity Agreement).
6.3. Good Reason; Without Cause. If this Agreement is terminated either by
the Executive for Good Reason or by the Company Without Cause (other than in
connection with a Change in Control as described in Section 6.5):
(a) The Company shall pay to the Executive the following amounts:
(1) any unpaid portion of the Executive's Base Salary (as in
effect on the Date of Termination) owed as of the Date of Termination, any
unpaid portion of the Annual Incentive Compensation previously awarded to
the Executive, and any accrued but unpaid Paid Leave as of the Date of
Termination, in a lump sum cash payment within thirty (30) days after the
Date of Termination; and
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(2) an amount equal to two (2) times the sum of the
Executive's Base Salary (as in effect on the Date of Termination) plus the
Executive's Target Annual Incentive Compensation for the fiscal year
during which the Date of Termination occurs, in bi-weekly installments
over a two (2) year period following the Executive's Date of Termination.
(b) The Company shall promptly pay or reimburse to the Executive any
costs and expenses (including moving and relocation expenses, if otherwise
agreed to by the Company in writing) paid or incurred by the Executive which
would have been payable under Section 4.8 of this Agreement if the Executive's
employment had not terminated.
(c) The Company shall continue providing medical, dental, and/or
vision coverage to the Executive and/or the Executive's spouse and dependents,
at least equal to that which would have been provided to the Executive under
Section 4.7 if the Executive's employment had not terminated, until the earlier
of (1) the date the Executive becomes eligible for any comparable medical,
dental, or vision coverage provided by any other employer, (2) the date the
Executive becomes eligible for Medicare or any similar government-sponsored or
provided health care program (whether or not such coverage is equivalent to that
provided by the Company), or (3) the fifth anniversary of the Executive's Date
of Termination.
(d) The Executive (or the Executive's estate, as the case may be)
shall continue to vest and, if applicable, continue to be permitted to exercise,
all of the rights and interests awarded to the Executive under the Company's
stock plans, as if the Executive were still employed by the Company, for a
period of two (2) years following the Date of Termination (or, if less, for the
remainder of the stated terms of the rights and interests). Notwithstanding any
contrary provision of the LTIP, the Executive's Awards for the Performance
Cycles (as defined in the LTIP) in effect as of the Date of Termination shall be
prorated in the manner described in Section 8(a) of the LTIP.
(e) The Executive shall continue to be covered under the Company's
directors' and officers' liability insurance, if any, and under his separate
Indemnity Agreement with the Company, as if the Executive's employment had not
terminated, for a period of ten (10) years following his Date of Termination
(or, in the case of the Indemnity Agreement, for such longer term as may be
provided for in the Indemnity Agreement).
(f) All other obligations of the Company and rights of the Executive
hereunder shall terminate effective as of the Date of Termination; provided,
however, that except as otherwise specifically modified by the terms of this
Agreement the Executive's rights under the Compensation Plans and Welfare Plans
shall be governed by the terms and provisions of these Plans and are not
necessarily severed on the Date of Termination.
(g) The Company shall (through an agency of Company's choosing)
provide outplacement services to the Executive for a period of one (1) year
following the Date of Termination, provided that the cost of such services shall
not exceed $50,000 or such higher amount as may be approved by the Board of
Directors (or a committee thereof).
11
6.4 Retirement. If this Agreement is terminated by the Executive due to
Retirement:
(a) The Company shall pay to the Executive, in a lump sum cash
payment within thirty (30) days after the Date of Termination, the aggregate of
the following amounts: (1) any unpaid portion of the Executive's Base Salary (as
in effect on the Date of Termination) owed as of the Date of Termination; (2)
any unpaid portion of the Annual Incentive Compensation previously awarded to
the Executive; and (3) any accrued but unpaid Paid Leave as of the Date of
Termination.
(b) The Company shall promptly pay or reimburse to the Executive any
costs and expenses (including moving and relocation expenses, if otherwise
agreed to by the Company in writing) paid or incurred by the Executive which
would have been payable under Section 4.8 of this Agreement if the Executive's
employment had not terminated.
(c) The Company shall continue providing medical, dental, and/or
vision coverage to the Executive and/or the Executive's family, at least equal
to that which would have been provided to the Executive under Section 4.7 if the
Executive's employment had not terminated, until the earlier of (1) the date the
Executive becomes eligible for any comparable medical, dental, or vision
coverage provided by any other employer, or (2) the date the Executive becomes
eligible for Medicare or any similar government-sponsored or provided health
care program (whether or not such coverage is equivalent to that provided by the
Company). Following the date on which the Executive becomes eligible for
coverage under Medicare, the Executive may, at his election, continue to be
covered under the Company's health coverage, if available, provided that the
Executive pays all applicable premiums charged by the Company or its third-party
provider(s).
(d) The Company shall pay to the Executive, in equal bi-weekly
installments over a period of ten (10) years, beginning with the next bi-weekly
payroll period following the Date of Termination, retirement payments, as
provided below:
(1) If, as of the Date of Termination, the Executive has
completed at least ten (10) years of service with the Company, the
Executive is entitled to retirement payments for each year during the ten
(10) year payment period equal to the product of sixty percent (60%) of
the Executive's average Base Salary during the three (3) consecutive full
calendar years of employment immediately preceding the Date of
Termination. For purposes of this Section 6.4(d), years of service include
all twelve (12) consecutive month periods of employment with the Company,
beginning with the Executive's initial date of employment with the
Company.
(2) At the election of the Executive, the actuarial equivalent
of the Executive's retirement payments (determined by utilizing reasonable
actuarial assumptions) may be paid over a period longer than ten (10)
years.
(3) In the event of the Executive's death prior to the payment
of all of the retirement payments determined under this Section 6.4(d),
the balance of the
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payments shall be made to the Executive's surviving spouse, if any, or to
any other beneficiary named by the Executive in writing.
(4) In addition to the cessation provisions set forth in
Section 6.8, any remaining retirement payments shall immediately cease in
the event the Executive works for a competitor (as determined by the
Company in its sole discretion), or becomes employed by any other employer
without the prior written consent of the Company. Notwithstanding the
foregoing, with the prior written consent of the Company, the Executive
may be employed by an entity which is not deemed by the Company to be in
competition with the Company, in a capacity in which the economic value of
his total compensation is comparable to his total compensation while
employed by the Company, and receive retirement benefits which are reduced
proportionately by the compensation received by the Executive in the new
position. Also with the prior written consent of the Company, the
Executive may be employed by an entity which is not deemed by the Company
to be in competition with the Company, in a capacity in which his total
compensation is materially less than his total compensation while employed
by the Company, in which case there would be no reduction in retirement
benefits.
(e) The Executive (or the Executive's estate, as the case may be)
shall continue to vest and, if applicable, continue to be permitted to exercise,
all of the rights and interests awarded to the Executive under the Company's
stock plans, for a period of two (2) years following the Date of Termination
(or, if less, for the remainder of the stated terms of the rights and
interests).
(f) The Executive shall continue to be covered under the Company's
directors' and officers' liability insurance, if any, and under his separate
Indemnity Agreement with the Company, as if the Executive's employment had not
terminated, for a period of ten (10) years following his Date of Termination
(or, in the case of the Indemnity Agreement, for such longer term as may be
provided for in the Indemnity Agreement).
(g) All other obligations of the Company and rights of the Executive
hereunder shall terminate effective as of the Date of Termination; provided,
however, that except as otherwise specifically modified by the terms of this
Agreement the Executive's rights under the Compensation Plans and Welfare Plans
shall be governed by the terms and provisions of these Plans and are not
necessarily severed on the Date of Termination. In addition, the Executive shall
continue to be eligible to make deferrals under any deferred compensation plan
maintained by the Company, and under the LTIP, in accordance with the terms of
those plans.
(h) Except as otherwise provided in this Section 6.4(h), the
payments and benefits provided under this Section 6.4 shall be in lieu of any
payments to which the Executive may have otherwise been entitled under the terms
of Section 6.2, 6.3 or 6.5, and vice versa. In the event a Change in Control
occurs coincident with or following the commencement of the Executive's
retirement payments under this Section 6.4, the payment of any remaining
retirement payments to which the Executive is entitled under this Section 6.4
shall be accelerated and paid in a lump sum cash payment within a reasonable
period of time following the Change in Control. In the event the Executive
becomes eligible for payments under the terms of Section 6.5 following the date
on which the Executive becomes entitled to deferred maximum retirement payments
under this
13
Section 6.4 but prior to the commencement of the retirement payments, the
Executive shall receive payments under the terms of Section 6.5 in lieu of the
deferred retirement payments or any other payments to which the Executive may
have otherwise been entitled under the terms of this Section 6.4.
6.5 Change in Control. If this Agreement is terminated either by the
Executive for Good Reason or by the Company Without Cause, and the termination
occurs within the six (6) month period preceding, or the twelve (12) month
period following, the date on which the Change in Control occurs ("Change in
Control Date"):
(a) As reasonable compensation for services rendered by the
Executive to the Company prior to the Date of Termination, the Company shall pay
to the Executive, in a lump sum cash payment within thirty (30) days after the
later to occur of the Date of Termination or the Change in Control Date, the
aggregate of the following amounts:
(1) any unpaid portion of the Executive's Base Salary
(as in effect on the Date of Termination) owed as of the Date of
Termination, any unpaid portion of the Annual Incentive Compensation
previously awarded to the Executive, and any accrued but unpaid Paid Leave
as of the Date of Termination; and
(2) an amount equal to three (3) times the sum of the
Executive's Base Salary (as in effect on the Date of Termination) plus the
Executive's Target Annual Incentive Compensation for the fiscal year
during which the Date of Termination occurs.
(b) The Company shall promptly pay or reimburse to the
Executive any costs and expenses (including moving and relocation expenses, if
otherwise agreed to by the Company in writing) paid or incurred by the Executive
which would have been payable under Section 4.8 of this Agreement if the
Executive's employment had not terminated.
(c) The Company shall continue providing medical, dental,
and/or vision coverage to the Executive and/or the Executive's family, at least
equal to that which would have been provided to the Executive under Section 4.7
if the Executive's employment had not terminated, until the earlier of (1) the
date the Executive becomes eligible for any comparable medical, dental, or
vision coverage provided by any other employer, or (2) the date the Executive
becomes eligible for Medicare or any similar government-sponsored or provided
health care program (whether or not such coverage is equivalent to that provided
by the Company).
(d) As reasonable compensation for services provided by the
Executive to the Company prior to the Date of Termination, the Company shall
(through an agency of Company's choosing) provide outplacement services to the
Executive for a period of one (1) year following the later of the Date of
Termination or the Change in Control Date, provided that the cost of such
services shall not exceed $50,000 or such higher amount as may be approved by
the Board of Directors (or a committee thereof).
(e) The Executive (or the Executive's estate, as the case may
be) shall become fully and immediately vested as of the Date of Termination and,
if applicable, continue to be permitted to exercise, all of the rights and
interests awarded to the Executive under the
14
Company's stock plans, as if the Executive were still employed by the Company,
for a period of two (2) years following the Date of Termination (or, if less,
for the remainder of the stated terms of the rights and interests).
(f) The Executive shall continue to be covered under the Company's
directors' and officers' liability insurance, if any, and under his separate
Indemnity Agreement with the Company, as if the Executive's employment had not
terminated, for a period of ten (10) years following his Date of Termination
(or, in the case of the Indemnity Agreement, for such longer term as may be
provided for in the Indemnity Agreement).
(g) All other obligations of the Company and rights of the Executive
hereunder shall terminate effective as of the Date of Termination; provided,
however, that except as otherwise specifically modified by the terms of this
Agreement the Executive's rights under the Compensation Plans and Welfare Plans
shall be governed by the terms and provisions of these Plans and are not
necessarily severed on the Date of Termination.
6.6 Cash Termination Excise Tax Payments.
(a) In the event that (1) the closing stock price of the Company on
the date of the Change in Control equals or exceeds the Threshold Share Price,
and (2) it is determined that the payment made under Section 6.4(h) or Section
6.5(a)(2) ("Cash Termination Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code (the "Code") (such excise
tax is hereinafter collectively referred to as the "Cash Termination Excise
Tax"), then the Executive shall be entitled to receive the payment described in
Section 6.6(b) below.
(b) The Executive shall be entitled to receive an additional payment
(a "Gross-Up Payment") such that the net amount retained by the Executive, after
deduction of any excise tax on the Cash Termination Payment and any federal,
state, and local income and employment taxes and excise tax upon the Gross-Up
Payment, shall be equal to the Cash Termination Payment. The Gross-Up Payment,
if any, shall be paid to the Executive, or, at the discretion of the Company, to
governmental authorities on the Executive's behalf, as soon as practicable
following the payment of the Executive's Cash Termination Payment, but, in any
event, not later than five (5) business days immediately following the payment
of the Executive's Cash Termination Payment.
(c) Subject to the provisions of Section 6.6(d), all determinations
required to be made under this Section 6.6, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
tax counsel appointed by the Company (the "Tax Counsel"). All fees and expenses
of the Tax Counsel shall be borne solely by the Company. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Tax Counsel hereunder, it is possible that Gross-Up
Payments, which will not have been made by the Company, should have been made
("Underpayment"). In the event that it is ultimately determined in accordance
with the procedures set forth in Section 6.6(d) that the Executive is required
to make a payment of any excise tax, the Tax Counsel shall determine the
15
amount of the Underpayment that has occurred, and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive.
(d) The Executive shall notify the Company in writing of any claims
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than 30 days after the Executive actually receives
notice in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(1) give the Company any information reasonably requested by
the Company relating to such claim;
(2) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney selected by the Company and reasonably
acceptable to the Executive;
(3) cooperate with the Company in good faith in order to
effectively contest such claim; and
(4) if the Company elects not to assume and control the
defense of such claim, permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any excise tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 6.6(d), the Company shall have the right, at its sole option, to
assume the defense of and control all proceedings in connection with such
contest, in which case it may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may either direct the Executive to pay the tax claimed
and ▇▇▇ for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and ▇▇▇ for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any excise tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further
provided, that any extension of the statute of limitations relating to payment
of taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount.
16
Furthermore, the Company's right to assume the defense of and control the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder, and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(e) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 6.6(d), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 6.6(d)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 6.6(d), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim, and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid, and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
6.7. Payments Contingent on Executive's Release of Company, Compliance
with Continuing Obligations, and Certain Other Contingencies. All of the
payments and benefits to which the Executive would otherwise be entitled under
Sections 6.2, 6.3, 6.4, 6.5, or 6.6, except the Unrestricted Payments, shall be
contingent on (a) the Executive's delivery to the Company of a signed and
enforceable release of all claims against the Company, in a form specified by
the Company, except that no such release shall be required in the event that the
Company fails to tender such release to the Executive for his signature within
thirty (30) days of his Date of Termination, and (b) the Executive's compliance
with the Continuing Obligations. In addition, if the Executive fails to comply
with the Continuing Obligations, then the Company shall have the right, upon
notice to the Executive (describing such failure to comply in reasonable detail)
to terminate all of the payments and benefits described in the preceding
sentence, other than the Unrestricted Payments, and to recover from the
Executive (i) any and all payments made or benefits paid to or for the benefit
of the Executive, other than the Unrestricted Payments, that the Company paid to
or for the benefit of the Executive or to which the Executive otherwise would
not have been entitled if the Company had terminated the Executive for Cause as
of the date of termination of this Agreement, and (ii) any and all proceeds
realized by the Executive subsequent to the date of termination of this
Agreement upon vesting, exercise, or sale of Common Stock granted or issued to
the Executive under the Company's Compensation Plans. Furthermore, if the
Company becomes aware, subsequent to the Date of Termination, that the Executive
was engaged in conduct during the Term that, had the Company been aware of such
conduct, would have permitted the Company to terminate this Agreement during the
Term for Cause, then the Company shall have the right, upon notice to the
Executive (describing such conduct in reasonable detail), (A) to terminate all
payments and benefits, other than the Unrestricted Payments, then remaining
payable to or for the benefit of the Executive under Sections 6.2, 6.3, 6.4,
6.5, or 6.6 (including but not limited to continued vesting or payment of any
unvested or unexercised awards under the Company's Compensation Plans), and (B)
to recover from the Executive (1) any and all payments made or benefits paid to
or for the benefit of the Executive, including all or any portion of the
Unrestricted Payments, that the Company would not have been obligated to pay to
or for the benefit of the Executive or to which the Executive otherwise would
not have been entitled if the Company had terminated the Executive for Cause as
a result of such conduct at or promptly after
17
the time on which such conduct first occurred, and (2) any and all proceeds
realized by the Executive subsequent to the date on which such conduct first
occurred upon vesting, exercise, or sale of Common Stock granted or issued to
the Executive under the Company's Compensation Plans. The Executive shall repay
to the Company all amounts due under the preceding sentences promptly upon
demand for such payment by the Company.
7. EXECUTIVE'S CONFIDENTIALITY OBLIGATION.
7.1. The Executive hereby acknowledges, understands and agrees that all
Confidential Information is the exclusive and confidential property of the
Company and its Affiliates which shall at all times be regarded, treated and
protected as such in accordance with this Article 7. The Executive acknowledges
that all such Confidential Information is in the nature of a trade secret.
7.2. For purposes of this Agreement, "Confidential Information" means
information, not generally known to the public, that is used in the business of
the Company and (a) is proprietary to, about or created by the Company, (b)
gives the Company some competitive business advantage or the opportunity of
obtaining such advantage or the disclosure of which is likely to be detrimental
to the interests of the Company, (c) is designated as Confidential Information
by the Company, is known by the Executive to be considered confidential by the
Company, or from all the relevant circumstances should reasonably be assumed by
the Executive to be confidential and proprietary to the Company, or (d) is not
generally known by non-Company personnel. Such Confidential Information
includes, without limitation, the following types of information and other
information of a similar nature (whether or not reduced to writing or designed
as confidential):
(a) Internal personnel and financial information of the Company,
information about vendors that is not generally known but is known to the
Company as a result of the Company's relationship with the vendor (including
vendor characteristics, services, prices, lists and agreements), purchasing and
internal cost information, internal service and operational manuals, and the
manner and methods of conducting the business of the Company;
(b) Marketing and development plans, price and cost data, price and
fee amounts, pricing and billing policies, quoting procedures, marketing
techniques, forecasts and forecast assumptions and volumes, and future plans and
potential strategies (including, without limitation, all information relating to
any acquisition prospect and the identity of any key contact within the
organization of any acquisition prospect) of the Company which have been or are
being discussed;
(c) Names of customers and their representatives, contracts
(including their contents and parties), customer services, and the type,
quantity, specifications and content of products and services purchased, leased,
licensed or received by customers of the Company;
(d) Confidential and proprietary information provided to the Company
by any actual or potential customer, government agency or other third party
(including businesses, consultants and other entities and individuals);
18
(e) Any non-public information about the Company's landfill
development plans, landfill capacity, and the status of the permitting process
with respect to any aspect of the Company's business; and
(f) Any non-public information about the existence or status of any
governmental investigation, charge, or lawsuit, the status or the position of
the Company regarding the value of any claim or charge (whether filed by the
government or a third party), the Company's interest in resolving any such claim
or charge; or any non-public information regarding the Company's compliance with
federal, state or local laws.
7.3. As a consequence of the Executive's acquisition or anticipated
acquisition of Confidential Information, the Executive shall occupy a position
of trust and confidence with respect to the affairs and business of the Company.
In view of the foregoing, and of the consideration to be provided to the
Executive, the Executive agrees that it is reasonable and necessary that the
Executive make each of the following covenants:
(a) At any time during the Term and thereafter, the Executive shall
not disclose Confidential Information to any person or entity, either inside or
outside of the Company, other than as necessary in carrying out his duties and
responsibilities as set forth in Article 2, without first obtaining the
Company's prior written consent (unless such disclosure is compelled pursuant to
court orders or subpoena, and at which time the Executive shall give notice of
such proceedings to the Company);
(b) At any time during the Term and thereafter, the Executive shall
not use, copy or transfer Confidential Information other than as necessary in
carrying out his duties and responsibilities as set forth in Article 2, without
first obtaining the Company's prior written consent; and
(c) On the Date of Termination, the Executive shall promptly deliver
to the Company (or its designee) all written materials, records and documents
made by the Executive or which came into his possession prior to or during the
Term concerning the business or affairs of the Company, including, without
limitation, all materials containing Confidential Information.
7.4 The Executive acknowledges and agrees that the use of the term
"Company" in this Article 7 means both the Company and its Affiliates.
8. DISCLOSURE OF INFORMATION, IDEAS, CONCEPTS, IMPROVEMENTS, DISCOVERIES
AND INVENTIONS. Consistent with the Executive's fiduciary duties to the Company,
the Executive agrees that during his employment by the Company, the Executive
shall promptly disclose in writing to the Company all information, ideas,
concepts, improvements, discoveries and inventions, which are conceived,
developed, made or acquired by the Executive, either individually or jointly
with others, and which relate to the business, products or services of the
Company, irrespective of whether the Executive used the Company's time or
facilities and irrespective of whether such information, idea, concept,
improvement, discovery or invention was conceived, developed, discovered or
acquired by the Executive on the job, at home, or elsewhere. This obligation
extends to all types of information, ideas and concepts, including, information,
ideas and concepts relating to new types of services, corporate opportunities,
acquisition prospects, the identity of key representatives within
19
acquisition prospect organizations, prospective names or service marks for the
Company's business activities, and the like. The Executive acknowledges and
agrees that the use of the term "Company" in this Article 8 means both the
Company and its Affiliates.
9. OWNERSHIP OF INFORMATION, IDEAS, CONCEPTS, IMPROVEMENTS, DISCOVERIES
AND ALL ORIGINAL WORKS OF AUTHORSHIP.
9.1. All information, ideas, concepts, improvements, and discoveries which
are conceived, made, developed or acquired by the Executive or which are
disclosed or made known to the Executive, individually or in conjunction with
others, during the Executive's employment by the Company and which relate to the
business, products or services of the Company (including, without limitation,
all such information relating to corporate opportunities, research, financial
and sales data, pricing and trading terms, evaluations, opinions,
interpretations, acquisition prospects, the identity of customers or their
requirements, the identity of key contacts within the customers' organizations
or within the organization of acquisition prospects, marketing and merchandising
techniques, and prospective names and service marks) are and shall be the sole
and exclusive property of the Company. Furthermore, all drawings, memoranda,
notes, records, files, correspondence, manuals, models, specifications, computer
programs, maps and all other writings or materials of any type embodying any of
such information, ideas, concepts, improvements, and discoveries are and shall
be the sole and exclusive property of the Company.
9.2. In particular, the Executive hereby specifically sells, assigns,
transfers and conveys to the Company all of his worldwide right, title and
interest in and to all such information, ideas, concepts, improvements, and
discoveries, and any United States or foreign applications therefore. The
Executive shall assist the Company and its nominee at all times and in all
manners, during the Term and thereafter, in the protection of such information,
ideas, concepts, improvements, or discoveries.
9.3. In the event the Executive individually, or jointly with others,
creates, during the Term (whether the initial or any successive Term), any
original work of authorship fixed in any tangible medium of expression which is
the subject matter of copyright (such as videotapes, written presentations on
acquisitions, computer programs, drawings, maps, architectural renditions,
models, manuals, brochures or the like) relating to the Company's business
products or services, the Company shall be deemed the author of such work if the
work is prepared by the Executive within the scope of his employment; or, if the
work is not prepared by the Executive within the scope of his employment but is
specially ordered by the Company as a contribution to a collective work, as a
part of a motion picture or other audiovisual work, as a translation, as a
supplementary work, as a compilation or as an instructional text, then the work
shall be considered to be a work made for hire, and the Company shall be the
author of such work. If such work is neither prepared by the Executive within
the scope of his employment nor a work specially ordered and deemed to be a work
made for hire, then the Executive hereby agrees to sell, transfer, assign and
convey, and by these presents, does sell, transfer, assign and convey, to the
Company all of the Executive's worldwide right, title and interest in and to
such work and all rights of copyright therein. The Executive agrees to assist
the Company, at all times, during the Term and thereafter, in the protection of
the Company's worldwide right, title and interest in and to such work and all
rights of copyright therein, which assistance shall include, but shall not be
limited to, the execution of all
20
documents requested by the Company or its nominee and the execution of all
lawful oaths and applications for registration of copyright in the United States
and foreign countries.
9.4 The Executive acknowledges and agrees that the use of the term
"Company" in this Article 9 means both the Company and its Affiliates.
10. EXECUTIVE'S NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS
10.1 For purposes of this Article 10:
(a) "Company" means both the Company and its Affiliates.
(b) "Competitor" means any company that provides Non-hazardous Solid
Waste Management services in any state in which the Company does business.
"Principal Competitor" means Waste Management, Inc., Republic Services, Inc.,
Capital Environmental Resource, Inc., Onyx, Waste Industries USA, Inc., Waste
Connections, Inc., or ▇▇▇▇▇▇▇ Waste Systems, Inc. (or their predecessors and
successors, subsidiaries, or affiliate operations), or any other public or
private business (including their predecessors and successors, subsidiaries, or
affiliate operations) conducting Non-hazardous Solid Waste Management in three
(3) or more states in which the Company does business.
(c) For purposes of Article 10, "Rendering Services" means
performing any kind of services or duties related to Non-hazardous Solid Waste
Management, including performing any functions that are the same as, or
substantially similar to, the duties the Executive performed under Section 2 of
this Agreement, whether done directly or through others, whether done in person
or through telephonic, electronic, or some other means of communication, and
whether done as a principal, director, officer, agent, employee, contractor or
consultant.
(d) "Contact" means any direct or indirect interaction between the
Executive and any customer, potential customer or acquisition prospect which
takes place in an effort to further a business relationship, whether done
directly or through others, whether in person or through telephonic, electronic,
or some other means of communication, and whether done as a principal, director,
officer, agent, employee, contractor or consultant.
(e) "Non-hazardous Solid Waste Management" means the collection,
hauling, disposal or recycling of non-hazardous refuse.
(f) "Facility" means any office, transfer station, hauling
operation, landfill, or recycling center of the Company.
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10.2 Prohibition on Competition and Solicitation During Employment.
(a) At no time during the Term (whether the initial or any
successive Term) will the Executive, directly or indirectly, provide service as
a principal, director, officer, agent, employee, consultant or contractor in or
to any business that conducts Non-hazardous Solid Waste Management operations or
provides portable toilet, street sweeping or any other services that the Company
provides.
(b) At no time during the Term (whether the initial or any
successive Term) will the Executive directly or indirectly (1) induce, entice or
solicit any employee of the Company to leave his or her employment, (2) Contact,
communicate or solicit any customer, potential customer, or acquisition prospect
of the Company for the purpose of ending or avoiding a business relationship, or
(3) use any information regarding actual or potential customers or acquisition
targets of the Company for any purpose other than in performing his duties under
this Agreement.
10.3 Prohibition Against Competition After Employment.
(a) The Executive agrees that, after the Date of Termination, he
will not compete with the Company to the extent, and subject to the express
limitations, provided in this Section 10.3. At no time during the Term will the
Executive, directly or indirectly, provide service as a principal, director,
officer, agent, employee, consultant or contractor in or to any business that
conducts Non-hazardous Solid Waste Management operations or provides portable
toilet, street sweeping or any other services that the Company provides.
(b) The Executive's obligation not to compete with the Company will
end two (2) years after the Date of Termination. If a court concludes that two
(2) years is an unreasonable time for that obligation, the Executive's
obligation to not compete with the Company will end one (1) year after the Date
of Termination.
(c) During the Executive's employment as Executive Vice President,
Human Resources and Organizational Development, he will be active in all
significant management and operational issues and will possess Confidential
Information regarding the Company's operations across the nation, not just in
any particular geographic area around where his office is or will be located.
Thus, the scope of Executive's obligation to not compete with the Company cannot
reasonably be limited to a particular geographic area. Executive's employment
with any business that provides Non-hazardous Solid Waste Management Services,
regardless of location, is likely to harm the Company's business interests.
Accordingly, Executive agrees that he will not Render Services to any Competitor
or any Principal Competitor that are: (i) rendered in a state in which the
Company does business; or (ii) directed at achieving, or intended to achieve, a
result in any such state.
(d) The parties acknowledge that they have chosen Arizona law to
apply to this Agreement (see Section 11.6) and that Arizona courts have not
addressed under what circumstances, and to what extent, restrictive covenants
that apply to a multi-state area are enforceable. Thus, the parties wish to
include Section 10.3(d) as a back-up to the restrictions in
22
Section 10.3(c) in the event a court concludes that those restrictions are not
reasonably limited and ▇▇▇▇▇▇ the applicable portions of Section 10.3(c) under
Arizona's "blue pencil" rule. Accordingly, Executive will not Render Services to
any Competitor or Principal Competitor that are: (i) rendered within forty (40)
miles of any Facility; or (ii) directed at achieving, or intended to achieve, a
result within forty (40) miles of any Facility. Executive acknowledges that the
restrictions in this Section 10.3(d) are separate and apart from the
restrictions in Section 10.3(c) above.
(e) Additionally, Executive will not Render Services to any business
providing portable toilet street sweeping or other services within forty (40)
miles of any Facility at which the same or similar services are provided.
(f) The non-compete restrictions in this Section 10.3 are expressly
intended to preclude the Executive from physically working in a geographic area
that is not covered by the applicable restriction (i.e., working in a state in
which the Company is not conducting business) but where the Executive's
responsibilities would include any management, oversight or analysis of a
business unit in a geographic area covered by the applicable restriction.
10.4 Prohibition Against Solicitation After Employment.
(a) The Executive agrees that, after the Date of Termination, he
will limit his activities relating to the customers, potential customers,
acquisition prospects, and employees of the Company to the extent, and subject
to the express limitations, provided in this Section 10.4.
(b) The Executive's obligations under this Section 10.4 will end two
(2) years after the Date of Termination. If a court concludes that two (2) years
is an unreasonable time for those obligations, Executive's obligations under
this Section 10.4 will end one (1) year after the Date of Termination.
(c) The Executive will not Contact customers, potential customers,
or acquisition prospects of the Company for any purpose related to providing
Non-hazardous Solid Waste Management services in any state in which the Company
does business. In the event a court concludes that this particular restriction
is not reasonably limited, the Executive will not Contact customers, potential
customers or acquisition prospects of the Company for any purpose related to
providing Non-hazardous Solid Waste Management services within forty (40) miles
of any Facility.
(d) Additionally, the Executive will not Contact customers,
potential customers or acquisition prospects of the Company for any purpose
related to providing portable toilet, street sweeping or other services within
forty (40) miles of any Facility at which the same or similar services are
provided.
(e) The Executive will not solicit any employee or consultant of the
Company to work for any other person or to leave his or her employment. The
Executive will not, directly or indirectly, be involved in the recruiting and/or
hiring (whether that involvement is in the nature of serving as a reference or
as a decision-maker) of any person employed or retained as a consultant by the
Company.
23
(f) In the event a court concludes that the restrictions in Section
10.4(e) are not reasonably limited, Executive will not: (i) solicit any employee
or consultant of the Company who, directly or indirectly, reported to Executive
at any time during the Term, where the solicitation is to encourage the employee
or consultant to work for any other person or entity, or to leave his or her
employment; or (ii) be involved in the recruiting and/or hiring (whether that
involvement is in the nature of serving as a reference or as a decision-maker)
of any such employee or consultant.
10.5 Other Provisions.
(a) The Executive acknowledges and agrees that a violation of the
promises he has made under this Article 10 is likely to cause irreparable harm
to the Company and justify the grant of injunctive relief. Additionally, to
provide the Company with the protections it has bargained for in this Article
10, any period of time in which the Executive has been in breach of the
provisions in this Article 10 will extend, by that amount of time, the time for
which he should be precluded from further breaching the promises made in this
Article 10, provided that the Company does not unreasonably delay in bringing
appropriate legal action after discovery of any such breach by Executive.
(b) If the applicable temporal or geographic limitations agreed to
by the parties in this Section 10 are found by a court to be overly broad, the
parties expressly authorize the judge before whom any dispute is brought to
impose the broadest temporal and geographic limitations permissible under the
law, so as to effectuate the parties' intent and ensure that the Company obtains
the protections it sought and for which it provided material consideration in
this Agreement.
11. MISCELLANEOUS.
11.1. Notices. All notices and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been given
when delivered by hand or mailed by registered or certified mail, return receipt
requested, as follows (provided that notice of a change of address shall be
deemed given only when received):
If to the Company:
Allied Waste Industries, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Executive Vice-President and General Counsel
If to the Executive:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
c/o Allied Waste Industries, Inc.
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
24
or to such other names or addresses as the Company or the Executive, as the case
may be, shall designate by notice to the other party in the manner specified in
this Section 11.1.
11.2. Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement shall neither operate nor be construed as a waiver
of any subsequent breach by any party. No breach shall be deemed waived unless
the waiver is in a writing signed by the non-breaching party.
11.3. Assignment. This Agreement shall be binding upon and inure to the
benefit of the Company, its Affiliates, successors, legal representatives and
assigns, and upon the Executive, his heirs, executors, administrators, legal
representatives and assigns; provided, however, the Executive agrees that his
rights and obligations hereunder are personal to him and may not be assigned
without the express written consent of the Company.
11.4. Entire Agreement, No Oral Amendments. This Agreement, together with
any schedule or exhibit attached hereto and any document, policy, rule or
regulation referred to herein, replaces and merges all previous agreements and
discussions relating to the same or similar subject matter between the Executive
and the Company and constitutes the entire agreement between the Executive and
the Company with respect to the subject matter of this Agreement. This Agreement
may not be modified in any respect by any verbal statement, representation or
agreement made by any employee, officer, or representative of the Company or by
any written agreement unless signed by an officer of the Company who is
expressly authorized by the Company to execute such document.
11.5. Enforceability. If any provision of this Agreement or application
thereof to anyone or under any circumstances shall be determined to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application.
11.6. Jurisdiction, Venue. The laws of the State of Arizona shall govern
the interpretation, validity and effect of this Agreement without regard to the
place of execution or the place for performance thereof, and the Company and the
Executive agree that the courts situated in Maricopa County, Arizona shall have
personal jurisdiction over the Company and the Executive to hear all disputes
arising under this Agreement. This Agreement is to be at least partially
performed in Maricopa County, Arizona, and as such, the Company and the
Executive agree that venue shall be proper with the courts in Maricopa County,
Arizona to hear such disputes. In the event either party is not able to effect
service of process upon the other party with respect to such disputes, the
Company and the Executive expressly agree that the Secretary of State for the
State of Arizona shall be an agent of the Company and/or the Executive to
receive service of process on behalf of the Company and/or the Executive with
respect to such disputes.
11.7 Injunctive Relief. The Company and the Executive agree that a breach
of any term of this Agreement by the Executive would cause irreparable damage to
the Company and that, in the event of such breach, the Company shall have, in
addition to any and all remedies of law, the right to any injunction, specific
performance and other equitable relief to prevent or to redress the violation of
the Executive's obligations under this Agreement.
25
11.8 Withholding. All payments made pursuant to this Agreement shall be
net of payroll and withholding deductions as may be required by law and other
deductions that are either applied generally to employees of the Company for
insurance and other employee benefit plans or authorized by Executive.
11.9 Arbitration. With the sole exception of any breach by the Executive
of the obligations he assumed under Sections 10.1, 10.2, 10.3, 10.4 and/or 10.5
of this Agreement (the breach of which permit the Company to obtain judicial
relief due to the exigent circumstances presented by such a breach), all other
alleged breaches of this Agreement, or any other dispute between the parties to
this Agreement arising out of or in connection with the Executive's employment
with the Company will be settled by binding arbitration to the fullest extent
permitted by law. This Agreement to arbitrate applies to any claim for relief of
any nature, including but not limited to claims of wrongful discharge under
statutory law and common law; employment discrimination based on federal, state
or local statute, ordinance, or governmental regulations, including
discrimination prohibited by: (a) Title VII of the Civil Rights Act of 1964, as
amended, (b) the Age Discrimination in Employment Act, (c) the Americans with
Disabilities Act, (d) the Fair Labor Standards Act, and (e) claims of
retaliatory discharge or other acts of retaliation; compensation disputes;
tortuous conduct; allegedly contractual violations; ERISA violations; and other
statutory and common law claims and disputes, regardless of whether the statue
was enacted or whether the common law doctrine was recognized at the time this
Agreement was signed.
The parties to this Agreement understand that they are agreeing to
substitute one legitimate dispute resolution forum (arbitration) for another
(litigation) because of the mutual advantages this forum offers, and are waiving
their right to have their disputes (except as to breaches of Sections 10.1,
10.2, 10.3, 10.4 and/or 10.5 of this Agreement) resolved in court. This
substitution involves no surrender, by either party, of any substantive
statutory or common law benefit, protection, or defense.
The arbitration proceeding shall be conducted in Maricopa County, Arizona,
in accordance with the National Rules for the Resolution of Employment Disputes
(National Rules) of the American Arbitration Association (AAA) in effect at the
time a demand for arbitration is made.
One arbitrator shall be used and he or she shall be chosen by mutual
agreement of the parties to this Agreement. If, within thirty (30) days after
the Executive notifies the Company of an arbitrable dispute, no arbitrator has
been chosen, an arbitrator shall be chosen by the AAA pursuant to its National
Rules. The arbitrator shall coordinate and, as appropriate, limit all
pre-arbitration discovery. However, the parties to this Agreement will have the
right to obtain discovery through appropriate decision and award, stating the
reasons for the award. The decision and award shall be exclusive, final, and
binding on both parties to this Agreement, their heirs, executors,
administrators, successors, and assigns.
The Company will pay all costs and expenses of the arbitration, except for
the filing fees and costs that would have been required had the proceeding been
initiated and maintained in the Maricopa County Superior Court, which fees and
costs the Executive will pay. Each party shall pay their own attorneys' fees and
expenses throughout the arbitration proceeding. However, the arbitrator may
award the successful party its attorneys' fees and expenses at the conclusion of
the arbitration (and any other relief provided by law).
26
Dated: September 19, 2005. ALLIED WASTE INDUSTRIES, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Title Exec. Vice President, General Counsel
"Company"
Dated: September 19, 2005.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ "Executive"
27