Exhibit 10.2
WASTE SERVICES, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is dated as of February 23, 2004 by
and among WASTE SERVICES, INC., a Delaware corporation (the "Company"), CAPITAL
ENVIRONMENTAL RESOURCE INC., an Ontario, Canada corporation ("Capital") and ▇▇▇▇
▇. ▇▇▇▇▇▇ (the "Executive"):
WHEREAS, the Company desires to employ Executive in an executive capacity and
Executive desires to enter into the Company's employ upon the terms and subject
to the conditions set forth herein.
WHEREAS, as of the date of this Agreement, the Company is a wholly-owned
subsidiary of Capital.
WHEREAS, Capital intends to effect a reorganization transaction (the "U.S.
Reorganization Transaction") pursuant to which Capital will become a subsidiary
of the Company.
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
herein, the receipt and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. EMPLOYMENT.
The Company shall employ Executive, and Executive shall be employed by the
Company, upon the terms and subject to the conditions set forth in this
Agreement, effective as of February 23, 2004 (the "Effective Date"); PROVIDED,
HOWEVER that as a condition to effectiveness of this Agreement, the Company and
Executive shall have entered into an Indemnification Agreement substantially in
the form of Exhibit A attached hereto.
2. TERM OF EMPLOYMENT.
The period of Executive's employment under this Agreement (the "Employment
Term") shall begin on the Effective Date and shall continue until Executive's
employment is terminated in accordance with Section 5 below.
3. DUTIES AND RESPONSIBILITIES.
(a) Executive shall serve as Executive Vice President of the Company and
shall report to the Chief Executive Officer of the Company. In such
capacity, Executive shall have responsibility and authority for
corporate development, strategic planning, treasury, investor relations
and human resources, and shall perform the duties necessary to carry
out those responsibilities and exercise that authority, as may be
assigned to Executive from time to time by the Chief Executive Officer
and/or by the Board of Directors of the Company (the "Board of
Directors") or a duly authorized committee thereof..
(b) During the Employment Term, Executive shall devote his full 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; PROVIDED, HOWEVER, that subject to the
limitations of Section 8 hereof and to the prior approval of the Chief
Executive Officer of the Company, Executive may serve on corporate,
industry, civic or charitable Boards or committees as long as such
activities do not interfere with the performance of Executive's
responsibilities to the Company. Executive agrees to act at all times
in the best interests of the Company and to take no action or make any
statement, oral or written, which could reasonably be expected by
Executive to injure the Company's business, financial condition,
results of operations, prospects, interests or reputation.
(c) Executive agrees to comply at all times during the Employment Term with
all applicable policies, rules, codes and regulations of the Company in
effect from time to time, including, without limitation, all applicable
codes of ethics or conduct and all policies regarding trading in the
Company's common stock.
4. COMPENSATION AND BENEFITS.
(a) BASE SALARY. During the Employment Term, the Company shall pay
Executive a base salary at the annual rate of $400,000 USD, or such
higher rate as may be determined from time to time by the Board of
Directors or a duly authorized committee thereof (such amount, as
increased from time to time, the "Base Salary"). Such Base Salary shall
be paid on the Company's regular pay days in accordance with the
Company's standard payroll practice for executive officers, subject
only to such payroll and withholding deductions as may be required by
law and other deductions applied generally to employees of the Company
for insurance and other employee benefit plans. For all purposes under
this Agreement, Executive's Base Salary shall include any amount which
is deferred under any nonqualified plan or arrangement of the Company.
(b) INCENTIVE COMPENSATION.
(i) ANNUAL CASH BONUS. In addition to the Base Salary, Executive
shall be eligible for an annual cash bonus (either pursuant to
a bonus or incentive plan or program of the Company or
otherwise) for each fiscal year during the Employment Term.
Executive's target annual cash bonus will be equal to 100%
(the "Target Bonus Rate") of his Base Salary in effect at the
beginning of the relevant fiscal year. The amount of the
annual cash bonus, which may be higher or lower than the
Target Bonus Rate, shall be determined by the Board of
Directors or a duly authorized committee thereof based upon
applicable corporate and individual performance targets
established by the Board of Directors or such committee in its
sole discretion (the "Annual Bonus"). For all purposes under
this Agreement, Executive's Annual Bonus shall include any
amount which is deferred under any nonqualified plan or
arrangement of the Company.
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(ii) LONG-TERM OR SUPPLEMENTAL INCENTIVE COMPENSATION. Executive
shall be eligible to participate in any supplemental and/or
long-term incentive compensation plans or programs (which may
consist of stock options, restricted stock, long-term cash
awards or other forms of long-term or supplemental incentive
compensation) generally made available to full-time senior
executive officers of the Company.
(c) BENEFIT PLANS. Executive shall be eligible to participate in and
receive benefits under all retirement, health and welfare benefit
plans, programs and arrangements which are from time to time available
to full-time senior executive officers of the Company in accordance
with the terms and conditions of such plans, programs and arrangements
in effect from time to time. Such benefit plans, programs and
arrangements will include family medical, family dental and family
vision benefit plans and short-term and long-term disability plans, and
may include, without limitation, life insurance plans, accidental death
insurance plans, travel accident insurance plans, savings and
retirement plans and pension plans (all such benefit plans, the
"Benefit Plans"). At his option, Executive may pay directly the
premiums for coverage under the above-mentioned disability plans and
have the Company pay to him, as additional income, an amount equal to
the amount of those premiums. Executive agrees to submit to a physical
examination from time to time as requested by the Company to facilitate
Executive's participation in one or more Benefit Plans. The Company may
terminate or reduce benefits under any such plans, programs or
arrangements to the extent such reductions apply uniformly to all
full-time senior executive officers of the Company, and Executive's
benefits shall be reduced or terminated accordingly. The Company's
obligations under this Section 4(c) are expressly conditioned on
Executive and his family dependents taking all reasonable actions
(including but not limited to enrolling in all health and welfare
benefit programs, plans and arrangements which are from time to time
available to the Company's full-time senior executive officers as and
when Executive and his family dependents become eligible to participate
in such programs, plans and arrangements) and providing all information
as the Company shall reasonably request and as is necessary for the
Company to fulfill such obligations.
(d) VACATION. In addition to normal statutory holidays recognized by the
Company, Executive shall be entitled to the greater of (a) four weeks
of paid vacation for each fiscal year during the Employment Term and
(b) such other amount of paid vacation as may be afforded executive
officers under the Company's policies in effect from time to time
("Vacation Time").
(e) EXPENSE REIMBURSEMENT. The Company shall promptly reimburse Executive
for travel and other out-of-pocket expenses incident to his position in
accordance with the Company's customary practices applicable to
full-time senior executive officers. To the extent that these expense
reimbursements are reportable as taxable income, they will be grossed
up to include the tax due on them.
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(f) REIMBURSEMENT OF CERTAIN TAX EXPENSES. The Company shall, upon written
demand by Executive accompanied by supporting invoices, promptly
reimburse Executive for all costs and expenses (including reasonable
legal, accounting and other advisory fees) incurred by Executive to (i)
determine, in any tax year of Executive, the tax consequences to
Executive of any amount payable (or reimbursable) under Section 7
hereof, or (ii) prepare responses to an Internal Revenue Service audit
of, and to otherwise defend, his personal income tax return for any
year during the Employment Term or to defend himself in any
administrative proceeding or civil litigation relating to any such tax
return, in each case that is occasioned by or related to any audit by
the Internal Revenue Service of the Company's income tax returns;
PROVIDED, HOWEVER, in no event shall the Company be required to
reimburse Executive for costs and expenses in excess of seventy-five
thousand United States dollars ($75,000 USD) in any given fiscal year
pursuant to this Section 4(e).
(g) FRINGE BENEFITS AND PERQUISITES. Executive shall be eligible to
participate in and receive benefits under all fringe benefit plans,
practices, policies and programs of the Company to the same extent, and
subject to the same terms and conditions, as those arrangements are
made available to full-time senior executive officers of the Company.
5. TERMINATION OF EMPLOYMENT.
Executive's employment under this Agreement may be terminated under any of the
circumstances set forth in this Section 5. Upon termination, Executive (or his
beneficiaries or estate as the case may be) shall be entitled to receive the
compensation and benefits described in Section 6 and, if applicable, Section 7
below.
(a) DEATH. Executive's employment hereunder shall terminate automatically
upon Executive's death.
(b) TOTAL DISABILITY. The Company may terminate Executive's employment
hereunder, by written notice to Executive delivered in accordance with
Sections 5(g) and 16 hereof, upon a determination pursuant to this
Section 5(b) that Executive is "Totally Disabled." For purposes of this
Agreement, For the purposes of this provision, "Totally Disabled" shall
have the same meaning as it has under the long-term disability policy
covering Executive pursuant to paragraph 4(c) herein. Executive's
receipt of disability benefits under the Company's long-term disability
plan shall be deemed conclusive evidence of Total Disability for
purposes of this Agreement.
(c) TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
Executive's employment hereunder for "Cause" at any time, by written
notice to Executive delivered in accordance with Sections 5(g) and 15
hereof.
(i) For purposes of this Agreement, the term "Cause" shall mean
any of the following: (A) conviction of a crime (including
conviction on a nolo contendre plea) involving the commission
by Executive of a felony or of a misdemeanor
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involving, in the good faith judgment of the Board of
Directors, fraud, dishonesty or moral turpitude; (B)
Executive's deliberate and continual refusal to perform the
duties and responsibilities assigned to Executive under this
Agreement (other than as a result of vacation permitted under
this Agreement, sickness, illness or injury); (C) fraud or
embezzlement by Executive, determined in accordance with the
Company's normal, internal investigative procedures
consistently applied; (D) gross misconduct or gross negligence
by Executive in connection with the business of the Company or
an Affiliate (as defined herein) unless Executive reasonably
believed, in good faith, that his acts or omissions were in or
not opposed to the best interests of the Company (without
intent of Executive to gain therefrom, directly or indirectly,
a profit to which he was not legally entitled); or (E) any
material breach by Executive of any of the provisions of
Section 8 of this Agreement or of any provisions of the
Confidentiality and Proprietary Information Agreement (as
defined herein); provided, however, that the occurrence of an
act or omission covered by clauses (B), (D) or (E) of this
paragraph 5(c)(i) shall not constitute "Cause" if Executive
remedies such act or omission within ten (10) business days
after delivery by the Company of written notice to Executive
in accordance with Section 15 hereof specifying in reasonable
detail the facts and circumstances believed by the Company to
constitute such "Cause."
(ii) Any determination of Cause under this Agreement shall be made
by resolution duly adopted by the affirmative vote of at least
two-thirds of the members of the Board of Directors (not
including Executive if Executive is a member of the Board of
Directors) at a meeting of the Board of Directors called and
held for that purpose; PROVIDED that Executive shall have been
given written notice of such meeting by certified mail at
least ten (10) business days prior to the meeting and shall
have been given the opportunity to be heard by the Board of
Directors before such resolution is passed. The failure by the
Company to follow the procedures set forth in this Section
5(c)(ii) shall result in the termination of the Executive's
employment being deemed to be a termination by the Company
without Cause.
(d) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may terminate his
employment hereunder for Good Reason after delivery by Executive of
written notice to the Company in accordance with Sections 5(g) and 15
hereof within sixty (60) days after the occurrence of a Good Reason
Event (as hereinafter defined). For purposes of this Agreement, "Good
Reason" means the occurrence of any of the following events (each a
"Good Reason Event") without Executive's written consent during the
Employment Term:
(i) A change in Executive's responsibilities or titles or any
other action by the Company which represents a material
diminution of Executive's position, status or authority,
except in connection with or as a result of the termination of
Executive's employment pursuant to any provision of this
Section 5 (a "Dimunition"); PROVIDED, HOWEVER that such
Dimunition shall not constitute
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"Good Reason" or a "Good Reason Event" if the Company remedies
such Dimunition within ten (10) business days after delivery
by Executive of written notice to the Company in accordance
with Section 15 hereof specifying in reasonable detail the
facts and circumstances believed by Executive to constitute
such Dimunition.
(ii) A reduction by the Company in Executive's Base Salary.
(iii) A material breach by the Company of Section 4(c) hereof;
PROVIDED, HOWEVER that such a breach shall not constitute
"Good Reason" or a "Good Reason Event" if the Company remedies
such breach within ten (10) business days after delivery by
Executive of written notice to the Company in accordance with
Section 15 hereof specifying in reasonable detail the facts
and circumstances believed by Executive to constitute a
material breach of Section 4(c).
(iv) (Intentionally left blank)
(v) The failure by the Company to pay Executive any material
amount of his Base Salary, or any material amount of other
compensation, that is due and payable under this Agreement
within ten (10) business days after Executive makes written
demand for such amount.
(vi) The failure by the Company to enter into a written agreement
with any entity that purchases all or substantially all of the
assets of the Company or any entity into which the Company is
merged (each a "Successor") pursuant to which such Successor
agrees to assume all of the obligations of the Company under
this Agreement at and effective as of the closing of such sale
of assets or merger.
(e) VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate his
employment hereunder without Good Reason at any time during the
Employment Term after providing thirty (30) days' written notice to the
Company delivered in accordance with Sections 5(g) and 15 hereof.
(f) TERMINATION BY THE COMPANY WITHOUT CAUSE. At any time during the
Employment Term, the Company may terminate Executive's employment
hereunder without Cause by written notice to Executive delivered in
accordance with Sections 5(g) and 15 hereof. For purposes of this
Agreement, Executive's employment will be deemed to have been
terminated "Without Cause" if Executive is terminated by the Company
for any reason other than Death pursuant to Section 5(a), Total
Disability pursuant to Section 5(b), or Cause pursuant to Section 5(c).
(g) NOTICE OF TERMINATION. Any termination of Executive's employment by the
Company for Cause pursuant to Section 5(c), without Cause pursuant to
Section 5(f), or as a result of Executive's Total Disability pursuant
to Section 5(b), or by Executive for Good Reason pursuant to Section
5(d), shall be communicated by Notice of Termination
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to the other party hereto given in accordance with this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written
notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated, and (iii)
specifies the effective date of termination, if such date is other than
the date of receipt of such notice (which effective date shall not be
(A) less than ten (10) business days after the giving of such notice in
the case of termination by Executive for Good Reason or (B) more than
15 days after the giving of such notice in all other cases). Any
voluntary termination of Executive's employment by Executive pursuant
to Section 5(e) shall be communicated by written notice to the Company
specifying (i) that Executive wishes to terminate his employment with
the Company pursuant to Section 5(e) hereof and (ii) indicating the
effective date of termination (which effective date shall not be less
than 30 days after the giving of such notice).
6. COMPENSATION AND BENEFITS FOLLOWING TERMINATION OF EMPLOYMENT.
In the event that Executive's employment hereunder is terminated, Executive
shall be entitled to the following compensation and benefits upon such
termination:
(a) COMPENSATION AND BENEFITS PAYABLE FOLLOWING TERMINATION FOR ANY REASON.
The following compensation and benefits shall be payable upon
termination of Executive's employment under this Agreement for any
reason:
(i) Executive or his beneficiaries or estate shall be entitled to
receive, within fourteen (14) days after the effective date of
termination, any accrued but unpaid Base Salary for services
rendered by Executive to the Company prior to the date of
termination, any accrued but unpaid expenses required to be
reimbursed under this Agreement, and cash compensation (at a
rate per day equal to the Base Salary divided by the number of
business days in the relevant year) for any accrued Vacation
Time that remained unused by the Executive at the time of
termination; and
(ii) Any earned benefits to which Executive (or his beneficiaries
or estate) may be entitled pursuant to the plans, policies and
arrangements referred to in Sections 4(b), 4(c) and 4(g)
hereof shall be determined and paid in accordance with the
terms of such plans, policies and arrangements. In the case of
compensation previously deferred by Executive, all amounts
previously deferred and not yet paid by the Company shall be
paid to Executive (or his beneficiaries or estate) within
fourteen (14) days after the effective date of termination
unless such payment is inconsistent with the terms of any
payment election made by Executive with respect to such
deferred compensation.
(b) TERMINATION BY REASON OF DEATH. In the event that Executive's
employment is terminated by reason of Executive's death, the Company
shall pay Executive's estate
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the following compensation and benefits in addition to the compensation
and benefits provided for in Section 6(a) above:
(i) Executive's estate shall be entitled to be paid:
(A) Executive's Base Salary at the rate in effect
immediately prior to Executive's date of death on the
Company's regular pay days for a period of three (3)
years from the effective date of termination as if
his employment had continued until the end of such
three (3)-year period; and
(B) an aggregate amount equal to three (3) times the
average of the Annual Bonuses paid to Executive in
the three (3) most recently completed fiscal years
preceding the effective date of termination, without
regard to whether the payment of all or any portion
of such Annual Bonus has been deferred (such average
being hereinafter referred to as the "Bonus
Average"), which shall be paid in equal installments
on the Company's regular pay days over the course of
thirty-six (36) months from the effective date of
termination; PROVIDED, HOWEVER, that if at the time
of termination Executive has not been employed by the
Company for three fiscal years, the Bonus Average
shall be deemed for all purposes of this Agreement to
equal Executive's Target Bonus Rate multiplied by his
Base Salary at the rate in effect immediately prior
to the effective date of termination. The Company may
purchase insurance to cover all or any part of the
obligations set forth in this Section 6(b)(i) and
Executive agrees to submit to a physical examination
from time to time to facilitate the procurement or
renewal of such insurance. Any proceeds of such
insurance paid to Executive or his beneficiaries or
estate shall be considered a portion of the payments
required to be made to Executive pursuant to this
Section 6(b)(i) and shall not be in addition thereto.
(ii) Executive's dependents shall be entitled to continue to
receive medical, dental and vision insurance coverage at least
equal in type and amount to that made available to dependents
of full-time senior executives of the Company immediately
prior to Executive's death for a period of three (3) years
from the effective date of termination, or until Executive's
dependents become eligible for substantially equivalent
employer-provided health insurance benefits from any other
person or business entity, whichever occurs first. In the
event that participation in any such plan, program or
arrangement of the Company is prohibited, the Company will
arrange to provide benefits substantially similar to those
benefits which Executive's dependents would have been entitled
to receive under such plan, program or arrangement for such
period.
(iii) All of Executive's then outstanding options to purchase shares
of the Company's common stock shall be vested and exercisable
in accordance with the terms of the stock option plan of the
Company pursuant to which such options were granted (the
"Governing Stock Option Plan") as then in effect.
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(c) TERMINATION BY REASON OF TOTAL DISABILITY. In the event that
Executive's employment is terminated by reason of Executive's Total
Disability pursuant to Section 5(b) hereof, the Company shall pay
Executive the following compensation and benefits in addition to the
compensation and benefits provided for in Section 6(a) above:
(i) Subject to Section 6(c)(ii) below, Executive shall be entitled
to be paid:
(A) his Base Salary at the rate in effect immediately
prior to the effective date of termination on the
Company's regular pay days for a period of three (3)
years from the effective date of termination as if
his employment had continued until the end of such
three (3) year period; and
(B) an aggregate amount equal to three (3) times the
Bonus Average, which shall be paid in equal
installments on the Company's regular pay days over
the course of thirty-six (36) months from the
effective date of termination.
(ii) Whenever compensation is payable to Executive under Section
6(c)(i) during a period in which he is partially or totally
disabled, and such disability would (except for the provisions
hereof) entitle 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 Executive pursuant to any such plan or
program shall be considered a portion of the payments required
to be made to Executive pursuant to this Section 6(c) and
shall not be in addition thereto. If disability income is
payable directly to Executive by an insurance company under
the terms of an insurance policy paid for by the Company, the
amounts paid to Executive by such insurance company shall be
considered a portion of the payment to be made to Executive
pursuant to this Section 6(c) and shall not be in addition
thereto.
(iii) Executive and his dependents shall be entitled to continue to
receive medical, dental and vision insurance coverage at least
equal in type and amount to that made available to full-time
senior executives of the Company immediately prior to the
effective date of termination for a period of three (3) years
from the effective date of termination, or until Executive
becomes eligible for substantially equivalent
employer-provided health insurance benefits from any other
person or business entity, whichever occurs first. In the
event that participation in any such plan, program, or
arrangement of the Company is prohibited, the Company will
arrange to provide benefits substantially similar to those
benefits which Executive would have been entitled to receive
under such plan, program, or arrangement, for such period.
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(iv) All of Executive's then outstanding options to purchase shares
of the Company's common stock shall be vested and exercisable
in accordance with the terms of the Governing Stock Option
Plan, as then in effect.
(d) TERMINATION FOR CAUSE. In the event that Executive's employment is
terminated by the Company for Cause pursuant to Section 5(c) hereof,
the Company shall not be obligated to make any payments to Executive
under this Agreement on or following the effective date of termination,
other than the compensation and benefits provided for in Section 6(a)
above.
(e) VOLUNTARY TERMINATION BY EXECUTIVE. In the event that Executive
terminates his employment without Good Reason pursuant to Section 5(e)
hereof, the Company shall not be obligated to make any payments to
Executive under this Agreement on or following the date of termination,
other than the compensation and benefits provided for in Section 6(a)
above.
(f) TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD
REASON. In the event that Executive's employment is terminated by the
Company without Cause pursuant to Section 5(f) hereof or by Executive
for Good Reason pursuant to Section 5(d) hereof, the Company shall pay
to Executive the following compensation and benefits in addition to the
compensation and benefits provided for in Section 6(a) above:
(i) Executive shall be entitled to be paid:
(A) his Base Salary at the rate in effect immediately
prior to the effective date of termination on the
Company's regular pay days for a period of two (2)
years from the effective date of termination as if
his employment had continued until the end of such
two (2)-year period; and
(B) an aggregate amount equal to two (2) times the Bonus
Average, which shall be paid in equal installments on
the Company's regular pay days over the course of
twenty-four (24) months from the effective date of
termination.
(ii) Executive and his dependents shall be entitled to continue to
receive medical, dental and vision insurance coverage at least
equal in type and amount to that made available to full-time
senior executives of the Company immediately prior to the
effective date of termination for a period of three (3) years
from the effective date of termination, or until Executive
becomes eligible for substantially equivalent
employer-provided health insurance benefits from any other
person or business entity, whichever occurs first. In the
event that participation in any such plan, program or
arrangement of the Company is prohibited, the Company will
arrange to provide benefits substantially similar to those
benefits which Executive
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would have been entitled to receive under such plan, program
or arrangement for such period.
(iii) All of Executive's then outstanding options to purchase shares
of the Company's common stock shall be vested and exercisable
in accordance with the terms of the Governing Stock Option
Plan, as then in effect;
PROVIDED, HOWEVER, that if the Company terminates Executive's
employment without Cause or Executive terminates his employment with
the Company for Good Reason within the one-year period preceding, or
within the two-year period following, a "Change of Control", Executive
shall be paid the compensation and benefits provided for in Section 7
hereof rather than the compensation and benefits provided for in this
Section 6(f).
(g) NO OTHER BENEFITS OR COMPENSATION. Except as may be provided under this
Agreement or under the terms of any Compensation Plans or Benefit Plans
in effect and applicable to Executive on the effective date of
termination, Executive shall have no right to receive any other
compensation, or to participate in any other plan, arrangement or
benefit after such termination and all other obligations of the Company
and rights of Executive under this Agreement shall terminate effective
as of the effective date of termination.
7. CHANGE OF CONTROL.
(a) RESIGNATION FOLLOWING CHANGE OF CONTROL. If (i) the Company terminates
Executive's employment without Cause or Executive terminates his
employment with the Company for Good Reason and (ii) a "Change of
Control" has occurred within the two-year period preceding, or within
the one-year period following, the effective date of termination,
Executive shall be entitled to the compensation described in this
Section 7 in addition to the compensation and benefits provided for in
Section 6(a) above and in lieu of the compensation and benefits
provided for in Section 6(f) above:
(i) a lump sum amount equal to three(3) times the sum of (A) and
(B) below:
(A) his Base Salary at the rate in effect immediately
prior to the effective date of termination; and
(B) the Bonus Average.
(ii) Executive and his dependents shall be entitled to continue to
receive medical, dental and vision insurance coverage at least
equal in type and amount to that made available to full-time
senior executives of the Company immediately prior to the
effective date of termination for a period of three (3) years
from the effective date of termination, or until Executive
becomes eligible for employer-provided health insurance
benefits from any other person or business entity
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(whether or not those health insurance benefits are comparable
to the health insurance benefits provided by the Company),
whichever occurs first. In the event that participation in any
such plan, program, or arrangement of the Company is
prohibited, the Company will arrange to provide benefits
substantially similar to those benefits which Executive would
have been entitled to receive under such plan, program, or
arrangement, for such period.
(iii) All of Executive's then outstanding options to pursuant shares
of the Company's common stock shall be vested and exercisable
in accordance with the terms of the Governing Stock Option
Plan as then in effect.
(b) DEFINITION OF CHANGE OF CONTROL. For purposes of this Agreement, a
"Change of Control" shall be deemed to have occurred upon the happening
of any of the following:
(i) the sale or lease of all or substantially all of the assets of
the Company to any other person or entity other than a direct
or indirect wholly-owned subsidiary or parent of the Company;
(ii) a merger, amalgamation, consolidation or other reorganization
of the Company with any other entity (other than a direct or
indirect wholly-owned subsidiary or parent of the Company) in
which the Company is not the surviving entity or becomes owned
entirely by another entity, unless at least 50% of the
outstanding voting securities of the surviving or parent
corporation, as the case may be, immediately following such
transaction are beneficially held by the same persons and/or
entities that beneficially held the outstanding voting
securities of the Company immediately prior to such
transaction, and such outstanding voting securities are
beneficially held by such persons and/or entities in the same
proportion as such persons and/or entities beneficially held
the outstanding voting securities of the Company immediately
prior to such transaction;
(iii) the acquisition of beneficial ownership, as such term is
defined in the Securities Exchange Act of 1934, as amended
(the "Exchange Act") in a single transaction or series of
related transactions (by tender offer or otherwise), of more
than 50% of the voting securities of the Company by a single
person or entity (other than the Company or any affiliate (as
such term is defined in Rule 12b-2 under the Exchange Act) of
the Company (each an "Affiliate"), a trustee or any other
fiduciary or committee of any employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of the stock of the Company) or
"group" within the meaning of Section 13(d)(3) of the Exchange
Act, whether through the acquisition of previously issued and
outstanding voting securities or of voting securities that
have not been previously issued, or any combination thereof;
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(iv) the voluntary or involuntary dissolution, liquidation or
winding up of the Company, or the adoption of any resolution
with respect thereto; or
(v) the individuals who constituted the Board of Directors as of
the Effective Date (the "Incumbent Board") ceasing 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
purposes of this Agreement, a member of the Incumbent Board;
and provided further that, notwithstanding anything herein to
the contrary, a Change of Control shall not be deemed to have
occurred in connection with (i) any public offering of the
common stock of the Company for cash; (ii) any transaction
with an entity or group that includes, is affiliated with or
is wholly or partially controlled by, one or more executive
officers of the Company in office immediately prior to the
transaction that would otherwise constitute a Change of
Control; (iii) any capital raising transaction (including any
investment by one or more private equity funds) for the
purpose of financing acquisitions specifically identified by
the Board of Directors of the Company; or (iv) the U.S.
Reorganization Transaction.
(c) CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. In the event that any
portion of the payments or benefits provided to Executive under this
Agreement or pursuant to any other plan, arrangement or agreement
between Executive and the Company or any Affiliate thereof
(collectively, "Total Payments") would be subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code or any similar tax
that may hereafter be imposed, then Executive shall be entitled to
receive an additional payment (the "Gross-up Payment") in an amount
which, when combined with the net amount of the Total Payments retained
by Executive after giving effect to the application of the Excise Tax
and all other applicable taxes on the Total Payments (including any
interest or penalties imposed with respect to such taxes), will result
in receipt by Executive of a Gross-up Payment equal to the Excise Tax
imposed upon the Total Payments.
(i) Determination by Accounting Firm. Subject to the provisions of
Section 7(c)(ii) below, all determinations required to be made
under this Section 7(c), including whether a Gross-up Payment
is required, the amount of the Gross-Up Payment and the
assumptions to be utilized in arriving at such determination,
shall be made by the Company's independent auditors or such
other certified public accounting firm reasonably acceptable
to Executive as may be designated by the Company (the
"Accounting Firm"). The Accounting Firm shall provide detailed
calculations supporting the Gross-up Payment to the Company
and Executive. All fees and expenses of the Accounting Firm
shall be paid solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 7(c), shall be paid by the
Company to Executive not later than the due date for the
payment of any Excise Tax. Any determination by the Accounting
Firm shall be binding upon the Company and Executive. As a
result of the uncertainty in the
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application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies
pursuant to Section 7(c)(ii) and Executive thereafter is
required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by
the Company to or for Executive's benefit.
(ii) The Company's Right to Contest Excise Tax. Executive agrees to
notify the Company in writing of any claim 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 ten
(10) business days after Executive is informed 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. Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which
Executive 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
Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive agrees to:
(A) give the Company any information reasonably requested
by the Company relating to such claim,
(B) 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 reasonably
selected by the Company;
(C) cooperate with the Company in good faith in order to
effectively contest such claim, and
(D) permit the Company to participate in any proceedings
relating to such claim;
PROVIDED, however, that the Company agrees to bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and
shall indemnify and hold 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
7(c)(ii), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may
pursue or forego any and all administrative
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appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole
option, either direct Executive to pay the tax claimed and ▇▇▇
for a refund or contest the claim in any permissible manner,
and 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 Executive to pay such claim and ▇▇▇ for a
refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify
and hold 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 Executive's
taxable year with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and 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.
(iii) Repayment to the Company. If, after the receipt by Executive
of an amount advanced by the Company pursuant to Section
7(c)(ii), Executive becomes entitled to receive any refund
with respect to such claim, Executive shall promptly pay to
the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable
thereto). Executive shall be entitled to deduct from any
payment made to the Company pursuant to the previous sentence
the amount of any taxes that Executive previously paid on the
amount of such payment. If, after the receipt by Executive of
an amount advanced by the Company pursuant to Section
7(c)(ii), a determination is made that Executive is not
entitled to any refund with respect to such claim and the
Company does not notify 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.
(d) Notwithstanding anything herein to the contrary, to the extent that
Executive has received payments of Base Salary pursuant to Section
6(f)(i) hereof at a time when a "Change of Control" occurs, such
payments shall be deducted from the lump sum payment required to be
made to Executive pursuant to Section 7(a)(i) hereof.
8. RESTRICTIVE COVENANTS
(a) COMPETITIVE ACTIVITY. Executive covenants and agrees that at all times
during Executive's employment with the Company, and during the
Non-Compete Period (as
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defined below), Executive will not, acting alone or in conjunction with
others, without the prior written consent of the Company, directly or
indirectly, engage or participate in, assist, render services to or
for, or have any active interest or involvement in, whether as an
employee, principal, agent, consultant, creditor, lender, advisor,
employer, officer, director, stockholder (excluding holdings by
Executive of up to 3% of the voting stock of any corporation subject to
the periodic reporting requirements of the Exchange Act), partner,
proprietor or in any other individual or representative capacity in or
with, any person, entity or business which competes, directly or
indirectly, with the Company or any Affiliate in any of the business
areas or territories in which the Company or any Affiliate then
conducts business or with any development opportunity being pursued by
the Company during the Non-Compete Period. (b) NON-SOLICITATION.
Executive covenants and agrees that at all times during Executive's
employment with the Company, and during the Non-Compete Period,
Executive will not, without the prior written consent of the Company,
directly or indirectly (i) induce, solicit or entice any customer of
the Company or any customer of any Affiliate to patronize any person,
business or entity which competes, directly or indirectly, with the
Company or such Affiliate in any of the business areas or territories
in which the Company or such Affiliate then conducts business; (ii)
canvass, solicit or accept any business from any customer of the
Company or any customer of any Affiliate (other than in connection with
the performance by Executive of his duties and responsibilities for the
Company in accordance with this Agreement) in any of the business areas
or territories in which the Company or any Affiliate of the Company
then conducts business; (iii) request or advise any customer of the
Company or any customer of any Affiliate to withdraw, curtail or cancel
such customer's business with the Company or such Affiliate in any of
the business areas or territories in which the Company or any Affiliate
of the Company then conducts business; (iv) contact, communicate with
or solicit any prospect that the Company is actively pursuing or any
prospect that any Affiliate is actively pursuing (other than in
connection with the performance by Executive of his duties for the
Company in accordance with this Agreement); (v) disclose to any other
person, entity or business the names or addresses of any customer or
acquisition prospect of the Company or any customer or acquisition
prospect of any Affiliate (other than as required in connection with
the performance by Executive of his duties for the Company in
accordance with this Agreement); (vi) cause, solicit, entice or induce
any employee of the Company or any employee of any Affiliate to leave
the employ of the Company or such Affiliate, or to accept employment
with, or compensation from, Executive or any person, entity or business
(other than the Company or any Affiliate) with which Executive is
affiliated or by whom Executive is employed; or (vii) use any customer
lists or customer leads, mail, telephone numbers, printed material or
other information obtained from the Company or any Affiliate or any
employee of any of the foregoing (other than in connection with the
performance by Executive of his duties for the Company in accordance
with this Agreement).
(c) NON-DISPARAGEMENT.
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(i) Executive covenants and agrees that Executive shall not engage
in any pattern of conduct that involves the making or
publishing of written or oral statements or remarks
(including, without limitation, the repetition or distribution
of derogatory rumors, allegations, negative reports or
comments) which are disparaging, deleterious or damaging to
the integrity, reputation or good will of the Company or any
Affiliate or any member of management of the Company or any
Affiliate.
(ii) The Company covenants and agrees that it shall not engage in
any pattern of conduct that involves the making or publishing
of written or oral statements or remarks (including, without
limitation, the repetition or distribution of derogatory
rumors, allegations, negative reports or comments) which are
disparaging, deleterious or damaging to the integrity or
reputation of Executive.
(d) PROTECTED INFORMATION. Executive recognizes and acknowledges that
Executive has had and will continue to have access to various
confidential and proprietary information concerning the Company and its
Affiliates which is of a special and unique value. As a condition to
commencement of Executive's employment hereunder, Executive shall
execute a Confidentiality and Proprietary Rights Agreement in
substantially the form of Exhibit C attached hereto (the
"Confidentiality and Proprietary Rights Agreement"). Any breach by
Executive of the Confidentiality and Proprietary Rights Agreement shall
be considered a breach of this Agreement.
(e) NON-COMPETE PERIOD. For purposes of this Agreement, the term
"Non-Compete Period" shall have the following meanings:
(i) in the event (A) Executive's employment hereunder is
terminated by the Company without Cause pursuant to Section
5(f), or by Executive for Good Reason pursuant to Section
5(d), and (B) a Change of Control did not occur within the
two-year period preceding, and does not occur within the
one-year period following, the effective date of termination,
the Non-Compete Period shall mean the period beginning on the
effective date of termination and ending on the second
anniversary of the effective date of termination;
(ii) in the event that (A) Executive's employment hereunder is
terminated by the Company without Cause pursuant to Section
5(f), or by Executive for Good Reason pursuant to Section
5(d), and (B) a Change of Control occurred within the two-year
period preceding the effective date of termination, there
shall be no Non-Compete Period;
(iii) in the event (A) Executive's employment hereunder is
terminated by the Company without Cause pursuant to Section
5(f), or by Executive for Good Reason pursuant to Section
5(d), and (B) a "Change of Control" occurs within the one-year
period following the effective date of termination, the
Non-Compete Period shall mean the period beginning on the
effective date of termination and ending on the effective date
of the "Change of Control";
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(iv) in the event Executive's employment hereunder is terminated by
Executive voluntarily pursuant to Section 5(e), or by the
Company with Cause pursuant to Section 5(c), the Non-Compete
Period shall mean the period beginning on the effective date
of termination and ending on the first anniversary of the
effective date of termination; and
(v) in the event Executive's employment hereunder is terminated by
the Company upon Death of Executive pursuant to Section 5(a),
or upon the Total Disability of Executive pursuant to Section
5(b), there shall be no Non-Compete Period.
9. ENFORCEMENT OF COVENANTS.
(a) TERMINATION OF EMPLOYMENT AND FORFEITURE OF COMPENSATION.
Notwithstanding anything in this Agreement to the contrary, in the
event that the Board of Directors or a duly authorized committee
thereof determines in its good faith judgment that Executive has
violated Sections 8(a) or 8(b) hereof, the Company shall have the right
to suspend or terminate any or all remaining payments or benefits
payable pursuant to Section 6 and/or 7 of this Agreement. Such
suspension or termination of benefits shall be in addition to and shall
not limit any and all other rights and remedies that the Company may
have against Executive.
(b) RIGHT TO INJUNCTION. Executive acknowledges that a breach of the
covenants set forth in Section 8 hereof will cause irreparable damage
to the Company with respect to which the Company's remedy at law for
damages will be inadequate. Therefore, in the event of a breach of the
covenants set forth in Section 8 by Executive or if the Company has
reasonable grounds to believe that a breach by Executive of the
covenants set forth in Section 8 is imminent, Executive and the Company
agree that the Company shall be entitled to the following particular
forms of relief, in addition to remedies otherwise available to it at
law or in equity; (i) injunctions, both preliminary and permanent,
enjoining or restraining such breach or anticipatory breach and
Executive hereby consents to the issuance thereof forthwith and without
bond by any court of competent jurisdiction; and, in the event the
Company prevails on the merits after all available appeals have been
exhausted (ii) recovery of all reasonable sums expended and costs,
including reasonable attorney's fees, incurred by the Company to
enforce the covenants set forth in Section 8.
(c) SEPARABILITY OF COVENANTS. The covenants contained in Section 8 hereof
constitute a series of separate covenants, one for each applicable
State in the United States and the District of Columbia, and one for
each province and Territory in Canada. If in any judicial proceeding, a
court shall hold that any of the covenants set forth in Section 8
exceed the time, geographic, or occupational limitations permitted by
applicable laws, Executive and the Company agree that such provisions
shall and are hereby reformed to the maximum time, geographic, or
occupational limitations permitted by such laws. Further, in the event
a court shall hold unenforceable any of the separate
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covenants deemed included herein, then such unenforceable covenant or
covenants shall be deemed eliminated from the provisions of this
Agreement for the purpose of such proceeding to the extent necessary to
permit the remaining separate covenants to be enforced in such
proceeding. Executive and the Company further agree that the covenants
in Section 8 shall each be construed as a separate agreement
independent of any other provisions of this Agreement, and the
existence of any claim or cause of action by Executive against the
Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of any of the
covenants of Section 8.
10. MITIGATION OF DAMAGES; ATTORNEY'S FEES
(a) Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment.
(b) If any legal action is filed by either party to enforce or interpret
any of the provisions of this Agreement, the non-prevailing party shall
pay to the prevailing party, in addition to any other amounts awarded
in the action, all reasonable attorney's fees and other fees and costs
incurred by the prevailing party in connection with such legal action,
the amount of which shall be fixed by the court hearing such action and
made a part of any judgment rendered.
11. WITHHOLDING OF TAXES.
The Company may withhold all legally required taxes from any compensation and
benefits payable under this Agreement.
12. ASSIGNMENT.
Except as otherwise provided in this Agreement, this Agreement shall inure to
the benefit of, and be binding upon, the parties hereto and their respective
heirs, representatives, successors and permitted assigns. The rights, benefits
and obligations of Executive under this Agreement are personal to Executive and
no such right, benefit or obligation shall be subject to voluntary or
involuntary alienation, assignment or transfer; PROVIDED, HOWEVER, that nothing
in this Section 12 shall preclude Executive from designating a beneficiary or
beneficiaries to receive any benefit payable on his death. The Company shall
require any Successor (whether by purchase of all or substantially all of the
assets of the Company, merger of the Company into another entity, or otherwise)
to assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform if no such
succession had taken place. Upon any such assignment, all references herein to
the Company shall be deemed to refer to such assignee.
13. ENTIRE AGREEMENT; AMENDMENT.
This Agreement, together with all schedules, exhibits and other documents
referred to herein, shall supersede any and all existing oral or written
agreements, representations, or warranties
-19-
between Executive and the Company relating to the terms of Executive's
employment by the Company. This Agreement may not be amended, nor any provision
waived, except by a written instrument signed by the party against whom such
amendment or waiver is sought to be enforced.
14. GOVERNING LAW; JURISDICTION.
This Agreement shall be governed by and construed in accordance with the
internal substantive laws of the State of New York, without giving effect to the
conflict of law principles thereof. The parties agree that all disputes, legal
actions, suits and proceedings arising out of or relating to this Agreement or
Executive's employment with the Company must be brought exclusively in a federal
district court or state court of competent jurisdiction located in New York, New
York. Each party hereby irrevocably consents and submits to the exclusive
jurisdiction of such courts. No legal action, suit or proceeding with respect to
this Agreement or Executive's employment with the Company may be brought in any
other forum. Each party hereby irrevocably waives all claims of immunity from
jurisdiction and any right to object on the basis that any dispute, action, suit
or proceeding brought in any such court has been brought in an improper or
inconvenient forum or venue.
15. NOTICES.
Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given if delivered personally, mailed by registered or certified mail (return
receipt requested), or by confirmed facsimile to those listed below at their
following respective addresses or at such other address as each may specify by
notice to the others:
To the Company or Capital:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: General Counsel
To Executive: At the address for Executive set forth on the signature
page below.
16. MISCELLANEOUS.
(a) WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement. The
waiver by any party hereto of a breach of any provision of this
Agreement shall neither operate nor be construed as a general waiver or
as a specific waiver of any subsequent breach by any party, unless
otherwise expressly provided in such waiver.
-20-
(b) SEPARABILITY. Subject to Section 9 hereof, if any term or provision of
this Agreement or application thereof to anyone or under any
circumstances shall be determined to be invalid, illegal or
unenforceable by any court of competent jurisdiction and cannot be
modified to be enforceable, such term or provision shall immediately
become null and void, leaving the remainder of this Agreement in full
force and effect.
(c) HEADINGS. Section headings are used herein for convenience of reference
only and shall not affect the meaning of any provision of this
Agreement.
(d) RULES OF CONSTRUCTION. Whenever the context so requires, the use of the
singular shall be deemed to include the plural and vice versa.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts will together constitute but one
Agreement.
(f) Intentionally omitted.
(g) RELEASE. Notwithstanding anything herein to the contrary, the Company
shall not be required to make any of the payments, or provide any of
the benefits, to the Executive pursuant to Sections 6 or 7 hereof
unless and until Executive executes and delivers a release of all
claims arising out of this Executive Employment Agreement through the
date of the release, but excluding claims for indemnification from the
Company under the Indemnification Agreement attached hereto as Exhibit
A, local, state or federal statutory or constitutional claims, or other
claims not arising under this Executive Employment Agreement.
(h) SURVIVAL. Notwithstanding anything in this Agreement to the contrary,
the provisions of Sections 8, 9, 10, 14, 15 and 16 shall survive any
termination of Executive's employment in accordance with their
respective terms.
17. GUARANTEE. Capital hereby guarantees the performance by the Company of
the Company's obligations under this Agreement; PROVIDED, HOWEVER, that
this guarantee shall terminate and be of no further force or effect
upon consummation of the U.S. Reorganization Transaction. Upon
consummation of the U.S. Reorganization Transaction, this Executive
Employment Agreement shall remain in full force and effect and shall
remain binding on the parties hereto.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
THE COMPANY:
WASTE SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Title: Chairman and Chief Executive Officer
Date: February 23, 2004
CAPITAL:
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Title: Chairman and Chief Executive Officer
EXECUTIVE:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Date: February 23, 2004
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