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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into on
this 1st day of April, 2001 by and between Canadian Waste Services, Inc. (the
"Company"), and Xxxxxxx Xxx (the "Executive"). The Company is an indirect
subsidiary of Waste Management, Inc. ("WMI").
1. EMPLOYMENT AND TERMINATION OF PREVIOUS EMPLOYMENT AGREEMENT.
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.
The Company and Executive hereby agree that the certain Employment
Agreement between Executive and Canadian Waste Services, Inc. dated on or about
April 6, 1999 is wholly and completely terminated, and any and all obligations
of the Company and Executive created thereunder, whether express or implied,
shall be null and void and of no further force or effect, and that the only
continuing rights, obligations, and duties between the Company and Executive
shall be those expressly set forth in this Agreement.
2. TERM OF EMPLOYMENT.
The period of Executive's employment under this Agreement shall
commence on April 1, 2001 ("Employment Date"), and shall continue for a period
of two (2) years thereafter, and shall automatically be renewed for successive
one (1) year periods thereafter, unless Executive's employment is terminated in
accordance with Section 5 below. The period during which Executive is employed
hereunder shall be referred to as the "Employment Period."
3. DUTIES AND RESPONSIBILITIES.
(A) Executive shall serve as President of Canadian Waste Services, Inc.
In such capacity, Executive shall perform such duties and have the power,
authority, and functions commensurate with such position in similarly-sized
public companies, and have and possess such other authority and functions
consistent with such position as may be assigned to Executive from time to time
by the Chief Executive Officer of WMI.
(B) Executive shall devote substantially all of his working time,
attention and energies to the business of the Company, and its affiliated
entities. Executive may make and manage his personal investments (provided such
investments in other activities do not violate, in any material respect, the
provisions of Section 8 of this Agreement), be involved in charitable and
professional activities, and, with the prior written consent of the WMI Board of
Directors, serve on boards of other for profit entities, provided such
activities do not materially interfere with the performance of his duties
hereunder.
4. COMPENSATION AND BENEFITS.
(A) BASE SALARY. During the Employment Period, the Company shall pay
Executive a base salary at the annual rate of Three Hundred Fifty-Four Thousand
Eight Hundred Ninety and
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00/100ths Canadian Dollars (C$354,890.00) per year, or such higher rate as may
be determined from time to time by the Company ("Base Salary"). Such Base Salary
shall be paid in accordance with the Company's standard payroll practice for its
executive officers. Once increased, Base Salary shall not be reduced.
(B) ANNUAL BONUS. During the Employment Period, Executive will
be entitled to participate in an annual incentive compensation plan of the
Company. The Executive's target annual bonus will be seventy-five percent (75%)
of his Base Salary in effect for such year (the "Target Bonus"), and his actual
annual bonus may range from 0% to 150% (two times Target Bonus), and will be
determined based upon (i) the achievement of certain WMI and Company performance
goals, as may be established and approved by from time to time by the
Compensation Committee of the WMI Board of Directors, and (ii) the achievement
of personal performance goals as may be established by WMI's Chief Executive
Officer.
(C) STOCK OPTIONS. Executive shall be eligible to be considered for
stock option grants under Waste Management Inc.'s annual stock option award
program as administered by, and at the discretion of, the Compensation Committee
of the WMI Board of Directors.
(D) BENEFIT PLANS AND VACATION. Subject to the terms of such plans,
Executive shall be eligible to participate in or receive benefits under any
pension plan, profit sharing plan, salary deferral plan, medical and dental
benefits plan, life insurance plan, short-term and long-term disability plans,
or any other health, welfare or fringe benefit plan, generally made available to
similarly-situated WMI executive employees. Neither WMI nor the Company shall be
obligated to institute, maintain, or refrain from changing, amending, or
discontinuing any benefit plan, or perquisite, so long as such changes are
similarly applicable to similarly-situated employees generally.
During the Employment Period, Executive shall be entitled to vacation
each year in accordance with the Company's policies in effect from time to time,
but in no event less than four (4) weeks paid vacation per calendar year.
(E) EXPENSE REIMBURSEMENT. The Company shall promptly reimburse
Executive for the ordinary and necessary business expenses incurred by Executive
in the performance of the duties hereunder in accordance with the Company's
customary practices applicable to its executive officers.
During the Employment Period, the Company shall pay Executive a taxable
monthly automobile allowance of one thousand (C$1,000) Canadian dollars per
month to cover the cost of ownership of an automobile or the Company shall lease
an automobile, which Executive shall be entitled to utilize on an exclusive and
taxable benefit basis during the Employment Period. The automobile lease cost
shall be comparable to the taxable automobile allowance in value.
(F) OTHER PERQUISITES. Executive shall be entitled to all perquisites
provided to Senior Vice Presidents of WMI as approved by the Compensation
Committee of the WMI Board of Directors, and as they may exist from time to
time.
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5. TERMINATION OF EMPLOYMENT.
Executive's employment hereunder may be terminated during the
Employment Period under the following circumstances:
(A) DEATH. Executive's employment hereunder shall terminate upon
Executive's death.
(B) TOTAL DISABILITY. The Company may terminate Executive's employment
hereunder upon Executive becoming "Totally Disabled." For purposes of this
Agreement, Executive shall be considered "Totally Disabled" if Executive has
been physically or mentally incapacitated so as to render Executive incapable of
performing the essential functions of Executive's position with or without
reasonable accommodation. Executive's receipt of disability benefits under the
Company's long-term disability plan or receipt of Employment Insurance
disability benefits shall be deemed conclusive evidence of Total Disability for
purpose of this Agreement; provided, however, that in the absence of Executive's
receipt of such long-term disability benefits or Employment Insurance benefits,
WMI's Board of Directors may, in its reasonable discretion (but based upon
appropriate medical evidence), determine that Executive is Totally Disabled.
(C) TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
Executive's employment hereunder for "Cause" at any time after providing a
Notice of Termination for Cause to Executive.
(i) For purposes of this Agreement, the term "Cause" means any of the
following: (A) willful or deliberate and continual refusal to
perform Executive's employment duties reasonably requested by the
Company after receipt of written notice to Executive of such
failure to perform, specifying such failure (other than as a
result of Executive's sickness, illness or injury) and Executive
fails to cure such nonperformance within ten (10) days of receipt
of said written notice; (B) breach of any statutory or common law
duty of loyalty to the Company; (C) has been convicted of an
indictable offense; (D) willfully or intentionally caused material
injury to the Company, its property, or its assets; (E) disclosed
to unauthorized person(s) proprietary or confidential information
of the Company; or (F) breach of any of the covenants set forth in
Section 8 hereof.
(ii) For purposes of this Agreement, the phrase "Notice of Termination
for Cause" shall mean a written notice that shall indicate the
specific termination provision in Section 5(c)(i) relied upon, and
shall set forth in reasonable detail the facts and circumstances
which provide the basis for termination for Cause. Further, a
Notification of Termination for Cause shall be required to include
a copy of a resolution duly adopted by at least two-thirds (2/3)
of the entire membership of the WMI Board of Directors at a
meeting of the Board which was called for the purpose of
considering such employment termination, and at which Executive
and his representative had the right to attend and address the
Board, finding that, in the good faith belief of the Board,
Executive engaged in conduct set forth in Section 5(c)(i) herein
and specifying the particulars thereof in reasonable detail.
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The date of termination for Cause shall be the date indicated in
the Notice of Termination for Cause. Any purported termination for
Cause which is held by a court or arbitrator not to have been
based on the grounds set forth in this Agreement or not to have
followed the procedures set forth in this Agreement shall be
deemed a termination by the Company without Cause.
(D) VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate his
employment hereunder with or without Good Reason at any time upon written notice
to the Company.
(i) A termination for "Good Reason" means a resignation of employment
by Executive by written notice ("Notice of Termination for Good
Reason") given to WMI's Chief Executive Officer within ninety (90)
days after the occurrence of the Good Reason event, unless such
circumstances are substantially corrected prior to the date of
termination specified in the Notice of Termination for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean
the occurrence or failure to cause the occurrence, as the case may
be, without Executive's express written consent, of any of the
following circumstances: (A) the Company substantially changes
Executive's core duties or removes Executive's responsibility for
those core duties, so as to effectively cause Executive to no
longer be performing the duties of his position (except in each
case in connection with the termination of Executive's employment
for Cause or Total Disability or as a result of Executive's death,
or temporarily as a result of Executive's illness or other
absence), provided that the change in the geographic area of
Executive's responsibility or the reassignment of Executive to a
different geographical area within Canada or the change in
reporting structure shall not constitute Good Reason under any
circumstances; further provided that if the WMI becomes a fifty
percent or more subsidiary of any other entity, Executive shall be
deemed to have a substantial change in the core duties of his
position unless he is a Senior Vice-President of the ultimate
parent entity; (B) removal or the non-reelection of the Executive
from the officer position with the Company specified herein, or
removal of the Executive from any of his then officer positions;
(C) any material breach by the Company of any provision of this
Agreement, including without limitation Section 10 hereof; or (D)
failure of any successor to the Company or to WMI (whether direct
or indirect and whether by merger, acquisition, consolidation or
otherwise) to assume in a writing delivered to Executive upon the
assignee becoming such, the obligations of the Company hereunder.
(ii) A "Notice of Termination for Good Reason" shall mean a notice that
shall indicate the specific termination provision relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for Termination for Good Reason. The
failure by Executive to set forth in the Notice of Termination for
Good Reason any facts or circumstances which contribute to the
showing of Good Reason shall not waive any right of Executive
hereunder or preclude Executive from asserting such fact or
circumstance in enforcing his rights hereunder. The Notice of
Termination for Good Reason shall provide for a
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date of termination not less than ten (10) nor more than sixty
(60) days after the date such Notice of Termination for Good
Reason is given, provided that in the case of the events set forth
in Sections 5(d)(i)(A) or (B), the date may be five (5) business
days after the giving of such notice.
(E) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate
Executive's employment hereunder without Cause at any time upon written notice
to Executive.
(F) EFFECT OF TERMINATION. Upon any termination of employment for any
reason, Executive shall immediately resign from all Board memberships and other
positions with the Company, or any of its parent corporations or subsidiaries
held by him at such time.
6. COMPENSATION 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) TERMINATION BY REASON OF DEATH. In the event that Executive's
employment is terminated by reason of Executive's death, the Company shall pay
the following amounts to Executive's beneficiary or estate:
(i) Any accrued but unpaid Base Salary for services rendered to the
date of death, any accrued but unpaid expenses required to be
reimbursed under this Agreement, any vacation accrued to the date
of termination, any earned but unpaid bonuses for any prior
period, and, to the extent not otherwise paid, a pro-rata bonus or
incentive compensation payment to the extent payments are awarded
to senior executives of WMI and paid at the same time as senior
executives are paid.
(ii) Any benefits to which Executive may be entitled pursuant to the
plans, policies and arrangements (including those referred to in
Section 4(d) hereof), as determined and paid in accordance with
the terms of such plans, policies and arrangements.
(iii) An amount equal to the Base Salary (at the rate in effect as of
the date of Executive's death) which would have been payable to
Executive if Executive had continued in employment for two
additional years. Said payments will be paid to Executive's estate
or beneficiary at the same time and in the same manner as such
compensation would have been paid if Executive had remained in
active employment.
(iv) As of the date of termination by reason of Executive's death,
stock options previously awarded to Executive as of the date of
death shall be fully vested, and Executive's estate or beneficiary
shall have up to one (1) year from the date of death to exercise
all such previously-awarded options, provided that in no event
will any option be exercisable beyond its term. No stock options
contemplated by this Agreement, but not yet awarded to Executive
as of the time of his death, shall be granted.
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(B) TERMINATION BY REASON OF TOTAL DISABILITY. In the event that
Executive's employment is terminated by reason of Executive's Total Disability
as determined in accordance with Section 5(b), the Company shall pay the
following amounts to Executive:
(i) Any accrued but unpaid Base Salary for services rendered to the
date of termination, any accrued but unpaid expenses required to
be reimbursed under this Agreement, any vacation accrued to the
date of termination, and any earned but unpaid bonuses for any
prior period. Executive shall also be eligible for a pro-rata
bonus or incentive compensation payment to the extent such awards
are made to senior executives of WMI for the year in which
Executive is terminated, and to the extent not otherwise paid to
the Executive.
(ii) Any benefits to which Executive may be entitled pursuant to the
plans, policies and arrangements (including those referred to in
Section 4(d) hereof) shall be determined and paid in accordance
with the terms of such plans, policies and arrangements.
(iii) An amount equal to the Base Salary (at the rate in effect as of
the date of Executive's Total Disability) which would have been
payable to Executive if Executive had continued in active
employment for two years following termination of employment, less
any payments under any long-term disability plan or arrangement
paid for by the Company. Payment shall be made at the same time
and in the same manner as such compensation would have been paid
if Executive had remained in active employment until the end of
such period.
(iv) As of the date of termination by reason of Executive's Total
Disability, stock options previously awarded to Executive as of
the date of termination shall be fully vested, and Executive or
his legal guardian shall have up to one (1) year from the date of
death to exercise all such previously-awarded options, provided
that in no event will any option be exercisable beyond its term.
No stock options contemplated by this Agreement, but not yet
awarded to Executive as of the time of his employment termination,
shall be granted.
(C) TERMINATION FOR CAUSE. In the event that Executive's employment is
terminated by the Company for Cause, the Company shall pay the following amounts
to Executive:
(i) Any accrued but unpaid Base Salary for services rendered to the
date of termination, any accrued but unpaid expenses required to
be reimbursed under this Agreement, any vacation accrued to the
date of termination, and any earned but unpaid bonuses for any
prior period.
(ii) Any benefits to which Executive may be entitled pursuant
to the plans, policies and arrangements (including those referred
to in Section 4(d) hereof up to the date of termination) shall be
determined and paid in accordance with the terms of such plans,
policies and arrangements.
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(iii) All options, whether vested or not vested prior to the date of
such termination of employment, shall be automatically cancelled
on the date of employment termination. However, it is expressly
understood and agreed that Executive would have no obligation to
repay or otherwise reimburse the Company for funds received as a
result of Executive's having exercised any previously-vested stock
options prior to his employment termination.
(D) VOLUNTARY TERMINATION BY EXECUTIVE. In the event that Executive
voluntarily terminates employment other than for Good Reason, the Company shall
pay the following amounts to Executive:
(i) Any accrued but unpaid Base Salary for services rendered to the
date of termination, any accrued but unpaid expenses required to
be reimbursed under this Agreement, any vacation accrued to the
date of termination, and any earned but unpaid bonuses for any
prior period.
(ii) Any benefits to which Executive may be entitled pursuant to the
plans, policies and arrangements (including those referred to in
Section 4(d) hereof up to the date of termination) shall be
determined and paid in accordance with the terms of such plans,
policies and arrangements.
(iii) Any stock options that have not vested prior to the date of such
termination of employment shall be automatically cancelled as of
that date, and Executive shall have ninety (90) days following the
date of termination of employment to exercise any previously
vested options; provided that in no event will any option be
exercisable beyond its term. No stock options contemplated by this
Agreement, but not yet awarded to Executive as of the time of his
employment termination, shall be granted.
(E) TERMINATION BY THE COMPANY WITHOUT CAUSE; TERMINATION BY EXECUTIVE
FOR GOOD REASON. In the event that Executive's employment is terminated by the
Company for reasons other than death, Total Disability or Cause, or Executive
terminates his employment for Good Reason, the Company shall pay the following
amounts to Executive:
(i) Any accrued but unpaid Base Salary for services rendered to the
date of termination, any accrued but unpaid expenses required to
be reimbursed under this Agreement, any vacation accrued to the
date of termination, and any earned but unpaid bonuses for any
prior period.
(ii) Any benefits to which Executive may be entitled pursuant to the
plans, policies and arrangements referred to in Section 4(d)
hereof shall be determined and paid in accordance with the terms
of such plans, policies and arrangements.
(iii) An amount equal to two times the sum of Executive's Base Salary
plus his Target Annual Bonus (in each case as then in effect), of
which one-half shall be paid in a lump sum within ten (10) days
after such termination and one-half shall be paid
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during the two (2) year period beginning on the date of
Executive's termination and shall be paid at the same time and in
the same manner as Base Salary would have been paid if Executive
had remained in active employment until the end of such period.
(iv) The Company at its expense will continue for Executive and
Executive's spouse and dependents, all health benefit plans,
programs or arrangements, whether group or individual, disability,
and other benefit plans, in which Executive was entitled to
participate at any time during the twelve-month period prior to
the date of termination, until the earliest to occur of (A) two
years after the date of termination; (B) Executive's death
(provided that benefits provided to Executive's spouse and
dependents shall not terminate upon Executive's death); or (C)
with respect to any particular plan, program or arrangement, the
date Executive becomes eligible to participate in a comparable
benefit provided by a subsequent employer. In the event that
Executive's continued participation in any such Company plan,
program, or arrangement is prohibited, the Company will arrange to
provide Executive with benefits substantially similar to those
which Executive would have been entitled to receive under such
plan, program, or arrangement, for such period on a basis which
provides Executive with no additional after tax cost.
(v) Executive shall continue to vest in all stock option awards or
restricted stock awards over the two (2) year period commencing on
the date of such termination. Executive shall have two (2) years
and six (6) months after the date of termination to exercise all
options to the extent then vested, provided that in no event may
any option be exercisable beyond its term.
(F) NO OTHER BENEFITS OR COMPENSATION. Except as may be provided under
this Agreement, under the terms of any incentive compensation, employee benefit,
or fringe benefit plan applicable to Executive at the time of Executive's
termination or resignation of employment, Executive shall have no right to
receive any other compensation, or to participate in any other plan, arrangement
or benefit, with respect to future periods after such termination or
resignation.
(G) NO MITIGATION; NO SET-OFF. In the event of any termination of
employment hereunder, Executive shall be under no obligation to seek other
employment and there shall be no offset against any amounts due Executive under
this Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain. The amounts payable hereunder shall not be
subject to setoff, counterclaim, recoupment, defense or other right which the
Company may have against the Executive or others, except upon obtaining by the
Company of a final non-appealable judgment against Executive.
7. RESIGNATION BY EXECUTIVE FOR GOOD REASON AND COMPENSATION
PAYABLE FOLLOWING CHANGE IN CONTROL.
(A) RESIGNATION FOR GOOD REASON FOLLOWING CHANGE IN CONTROL. In the
event a "Change in Control" occurs and Executive terminates his employment for
Good Reason thereafter, or the Company terminates Executive's employment other
than for Cause, or such
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termination for Good Reason or without Cause occurs in contemplation of such
Change in Control (any termination within six (6) months prior to such Change in
Control being presumed to be in contemplation unless rebutted by clear and
demonstrable evidence to the contrary), the Company shall pay the following
amounts to Executive:
(i) The payments and benefits provided for in Section 6(e), except
that (A) the amount and period with respect to which severance is
calculated pursuant to Section 6(e)(iii) will be three (3) years
and the amount shall be paid in a lump-sum and (B) the benefit
continuation period in Section 6(e)(iv) shall be for three years.
(ii) In lieu of Section 6(e)(v), Executive will be 100% vested in all
benefits, awards, and grants (including stock option grants and
stock awards, all of such stock options exercisable for three (3)
years following Termination, provided that in no event will any
option be exercisable beyond its term) accrued but unpaid as of
the date of termination under any non-qualified pension plan,
supplemental and/or incentive compensation or bonus plans, in
which Executive was a participant as of the date of termination.
Executive shall also receive a bonus or incentive compensation
payment (the "bonus payment"), payable at 100% of the maximum
bonus available to Executive, pro-rated as of the effective date
of the termination. The bonus payment shall be payable within five
(5) days after the effective date of Executive's termination.
Except as may be provided under this Section 7 or under the terms
of any incentive compensation, employee benefit, or fringe benefit
plan applicable to Executive at the time of Executive's
termination of employment, Executive shall have no right to
receive any other compensation, or to participate in any other
plan, arrangement or benefit, with respect to future periods after
such resignation or termination.
(B) CHANGE IN CONTROL. For purposes of this Agreement, "Change in
Control" means the occurrence of any of the following events:
(i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of WMI (not including in the securities
beneficially owned by such person any securities acquired directly
from WMI or its Affiliates) representing twenty-five percent (25%)
or more of the combined voting power of WMI's then outstanding
voting securities;
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who,
on the Employment Date, constitute the Board and any new director
(other than a director whose initial assumption of office is in
connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to
the election of directors of WMI) whose appointment or election by
the Board or nomination for election by WMI's stockholders was
approved or recommended by a vote of the at least two-thirds
(2/3rds) of the directors then still in office who either were
directors on the Employment Date or whose appointment, election or
nomination for election was previously so approved or recommended;
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(iii) there is a consummated merger or consolidation of WMI or any
direct or indirect subsidiary of WMI with any other corporation,
other than (A) a merger or consolidation which would result in the
voting securities of WMI outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving or parent
entity) more than fifty percent (50%) of the combined voting power
of the voting securities of WMI or such surviving or parent equity
outstanding immediately after such merger or consolidation or (B)
a merger or consolidation effected to implement a recapitalization
of WMI (or similar transaction) in which no Person, directly or
indirectly, acquired twenty-five percent (25%) or more of the
combined voting power of WMI's then outstanding securities (not
including in the securities beneficially owned by such person any
securities acquired directly from WMI or its Affiliates); or
(iv) the stock holders of WMI approve a plan of complete liquidation of
WMI or there is consummated an agreement for the sale or
disposition by WMI of all or substantially all of WMI's assets (or
any transaction having a similar effect), other than a sale or
disposition by WMI of all or substantially all of WMI's assets to
an entity, at least fifty percent (50%) of the combined voting
power of the voting securities of which are owned by stockholders
of WMI in substantially the same proportions as their ownership of
WMI immediately prior to such sale.
For purposes of this Section 7(b), the following terms shall have the
following meanings:
(i) "Affiliate" shall mean an affiliate of WMI, as defined in
Rule 12b-2 promulgated under Section 12 of the Securities Exchange
Act of 1934, as amended from time to time (the "Exchange Act");
(ii) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Exchange Act;
(iii) "Person" shall have the meaning set forth in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (1) WMI, (2) a
trustee or other fiduciary holding securities under an employee
benefit plan of WMI, (3) an underwriter temporarily holding
securities pursuant to an offering of such securities or (4) a
corporation owned, directly or indirectly, by the stockholders of
WMI in substantially the same proportions as their ownership of
shares of Common Stock of WMI.
8. COVENANTS
(A) THIS AGREEMENT. The terms of this Agreement constitute
Confidential Information, which Executive shall not disclose to anyone other
than Executive's spouse, lawyers, advisors, or as required by law. Disclosure of
these terms is a material breach of this Agreement and could subject Executive
to disciplinary action, including without limitation, termination of employment
for Cause.
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(B) COMPANY PROPERTY. All written materials, records, data, and other
documents prepared or possessed by Executive during Executive's employment with
the Company are the Company's property. All information, ideas, concepts,
improvements, discoveries, and inventions that are conceived, made, developed,
or acquired by Executive individually or in conjunction with others during
Executive's employment (whether during business hours and whether on the
Company's premises or otherwise) which relate to the Company's business,
products, or services are the Company's sole and exclusive property. All
memoranda, notes, records, files, correspondence, drawings, manuals, models,
specifications, computer programs, maps, and all other documents, data, or
materials of any type embodying such information, ideas, concepts, improvements,
discoveries, and inventions are the Company's property. At the termination of
Executive's employment with the Company for any reason, Executive shall return
all of the Company's documents, data, or other Company property to the Company.
(C) CONFIDENTIAL INFORMATION; NON-DISCLOSURE. Executive acknowledges
that the business of the Company is highly competitive and that the Company has
agreed to provide and immediately will provide Executive with access to
"Confidential Information" relating to the business of the Company, WMI, and
their respective affiliates.
For purposes of this Agreement, "Confidential Information" means and
includes the Company's and WMI's confidential and/or proprietary information
and/or trade secrets that have been developed or used and/or will be developed
and that cannot be obtained readily by third parties from outside sources.
Confidential Information includes, by way of example and without limitation, the
following information regarding customers, employees, contractors, and the
industry not generally known to the public; strategies, methods, books, records,
and documents; technical information concerning products, equipment, services,
and processes; procurement procedures and pricing techniques; the names of and
other information concerning customers, investors, and business affiliates (such
as contact name, service provided, pricing for that customer, type and amount of
services used, credit and financial data, and/or other information relating to
the Company's relationship with that customer); pricing strategies and price
curves; positions, plans, and strategies for expansion or acquisitions; budgets;
customer lists; research; weather data; financial and sales data; trading
methodologies and terms; evaluations, opinions, and interpretations of
information and data; marketing and merchandising techniques; prospective
customers' names and marks; grids and maps; electronic databases; models;
specifications; computer programs; internal business records; contracts
benefiting or obligating the Company; bids or proposals submitted to any third
party; technologies and methods; training methods and training processes;
organizational structure; personnel information, including salaries of
personnel; payment amounts or rates paid to consultants or other service
providers; and other such confidential or proprietary information. Information
need not qualify as a trade secret to be protected as Confidential Information
under this Agreement, and the authorized and controlled disclosure of
Confidential Information to authorized parties by Company in the pursuit of its
business will not cause the information to lose its protected status under this
Agreement. Executive acknowledges that this Confidential Information constitutes
a valuable, special, and unique asset used by the Company, Waste Management,
Inc. and their respective affiliates in their businesses to obtain a competitive
advantage over their competitors. Executive further acknowledges that protection
of such Confidential Information against unauthorized
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disclosure and use is of critical importance to the Company, Waste Management,
Inc. and their respective affiliates in maintaining their competitive position.
Executive also will have access to, or knowledge of, Confidential
Information of third parties, such as actual and potential customers, suppliers,
partners, joint venturers, investors, financing sources, and the like, of the
Company, Waste Management, Inc. and their affiliates.
The Company also agrees to provide Executive with one or more of the
following: access to Confidential Information; specialized training regarding
the Company's and WMI's methodologies and business strategies, and/or support in
the development of goodwill such as introductions, information and reimbursement
of customer development expenses consistent with Company policy. The foregoing
is not contingent on continued employment, but is contingent upon Executive's
use of the Confidential Information access, specialized training, and goodwill
support provided by Company for the exclusive benefit of the Company and upon
Executive's full compliance with the restrictions on Executive's conduct
provided for in this Agreement.
In addition to the requirements set forth in Section 5(c)(i), Executive
agrees that Executive will not after Executive's employment with the Company,
make any unauthorized disclosure of any then Confidential Information or
specialized training of the Company, WMI, or their respective affiliates, or
make any use thereof, except in the carrying out of his employment
responsibilities hereunder. Executive also agrees to preserve and protect the
confidentiality of third party Confidential Information to the same extent, and
on the same basis, as the Company's Confidential Information.
(D) UNFAIR COMPETITION RESTRICTIONS. Upon Executive's Employment
Date, the Company agrees to and shall provide Executive with immediate access to
Confidential Information. Ancillary to the rights provided to Executive
following employment termination, the Company's provision of Confidential
Information, specialized training, and/or goodwill support to Executive, and
Executive's agreements, regarding the use of same, and in order to protect the
value of the above-referenced stock options, training, goodwill support and/or
the Confidential Information described above, the Company and Executive agree to
the following provisions against unfair competition. Executive agrees that for a
period of two (2) years following the termination of employment for any reason
("Restricted Term"), Executive will not, directly or indirectly, for Executive
or for others, anywhere in Canada (the "Restricted Area") do the following,
unless expressly authorized to do so in writing by the Chief Executive Officer
of WMI:
Engage in, or assist any person, entity, or business engaged in,
the selling or providing of products or services that would
displace the products or services that (i) the Company or WMI are
currently in the business of providing and were in the business of
providing, or were planning to be in the business of providing, at
the time Executive was employed with the Company, and (ii) that
Executive had involvement in or received Confidential Information
about in the course of employment; the foregoing is expressly
understood to include, without limitation, the business of the
collection, transfer, recycling and resource recovery, or disposal
of
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solid waste, including the operation of waste-to-energy facilities
and alternative energy facilities.
It is further agreed that during the Restricted Term, Executive cannot
engage in any of the enumerated prohibited activities in the Restricted Area by
means of telephone, telecommunications, satellite communications,
correspondence, or other contact from outside the Restricted Area. Executive
further understands that the foregoing restrictions may limit his ability to
engage in certain businesses during the Restricted Term, but acknowledges that
these restrictions are necessary to protect the Confidential Information the
Company has provided to Executive.
A failure to comply with the foregoing restrictions will create a
presumption that Executive is engaging in unfair competition. Executive agrees
that this Section defining unfair competition with the Company or with WMI does
not prevent Executive from using and offering the skills that Executive
possessed prior to receiving access to Confidential Information, confidential
training, and knowledge from the Company. This Agreement creates an advance
approval process, and nothing herein is intended, or will be construed as, a
general restriction against the pursuit of lawful employment in violation of any
controlling provincial or federal laws. Executive shall be permitted to engage
in activities that would otherwise be prohibited by this covenant if such
activities are determined in the sole discretion of the Chief Executive Officer
of WMI to be no material threat to the legitimate business interests of the
Company or WMI.
(E) NON-SOLICITATION OF CUSTOMERS. For a period of two (2) years
following the termination of employment for any reason, Executive will not call
on, service, or solicit competing business from customers of the Company, WMI,
or their respective affiliates whom Executive, within the previous twelve (12)
months, (i) had or made contact with, or (ii) had access to information and
files about, or induce or encourage any such customer or other source of ongoing
business to stop doing business with the Company or WMI.
(F) NON-SOLICITATION OF EMPLOYEES. During Executive's
employment, and for a period of two (2) years following the termination of
employment for any reason, Executive will not, either directly or indirectly,
call on, solicit, encourage, or induce any other employee or officer of the
Company, WMI, or their respective affiliates whom Executive had contact with,
knowledge of, or association within the course of employment with the Company to
terminate his or her employment, and will not assist any other person or entity
in such a solicitation.
(G) NON-DISPARAGEMENT. 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, its management, or of
management of corporations affiliated with the Company.
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9. ENFORCEMENT OF COVENANTS.
(A) TERMINATION OF EMPLOYMENT AND FORFEITURE OF COMPENSATION.
Executive agrees that any breach by Executive of any of the covenants set forth
in Section 8 hereof during Executive's employment by the Company, shall be
grounds for immediate dismissal of Executive for Cause pursuant to Section
5(c)(i), which shall be in addition to and not exclusive of any and all other
rights and remedies 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 and/or WMI with respect to which the remedy at law for damages will be
inadequate. Therefore, in the event of breach or anticipatory breach of the
covenants set forth in this section by Executive, Executive and the Company
agree that the Company and/or WMI shall be entitled to seek the following
particular forms of relief, in addition to remedies otherwise available to it at
law or equity: (A) 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 (B) recovery of all reasonable sums as determined by a court
of competent jurisdiction expended and costs, including reasonable lawyer's
fees, incurred by the Company and/or WMI to enforce the covenants set forth in
this section.
(C) SEPARABILITY OF COVENANTS. The covenants contained in
Section 8 hereof constitute a series of separate but ancillary covenants, one
for each applicable State in the United States and the District of Columbia, and
one for each applicable foreign country. 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
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. INDEMNIFICATION.
The Company shall indemnify and hold harmless Executive to the fullest
extent permitted by law for any action or inaction of Executive while serving as
an officer and director of the Company or, at the Company's request, as an
officer or director of any other entity or as a fiduciary of any benefit plan.
This provision includes the obligation and undertaking of the Executive to
reimburse the Company for any fees advanced by the Company on behalf of the
Executive should it later be determined that Executive was not entitled to have
such fees advanced by the Company. The Company shall cover the Executive under
directors and officers liability insurance both during and, while potential
liability exists, after the Employment Period
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in the same amount and to the same extent as the Company covers its other
officers and directors.
11. DISPUTES AND PAYMENT OF LAWYER'S FEES.
If at any time during the term of this Agreement or afterwards there
should arise any dispute as to the validity, interpretation or application of
any term or condition of this Agreement, the Company agrees, upon written demand
by Executive (and Executive shall be entitled upon application to any court of
competent jurisdiction, to the entry of a mandatory injunction, without the
necessity of posting any bond with respect thereto, compelling the Company) to
promptly provide sums sufficient to pay on a current basis (either directly or
by reimbursing Executive) Executive's costs and reasonable lawyer's fees
(including expenses of investigation and disbursements for the fees and expenses
of experts, etc.) incurred by Executive in connection with any such dispute or
any litigation, provided that Executive shall repay any such amounts paid or
advanced if Executive is not the prevailing party with respect to at least one
material claim or issue in such dispute or litigation. The provisions of this
Section 11, without implication as to any other section hereof, shall survive
the expiration or termination of this Agreement and of Executive's employment
hereunder.
12. WITHHOLDING OF TAXES.
The Company may withhold from any compensation and benefits payable
under this Agreement all applicable federal, provincial, local, or other taxes.
13. SOURCE OF PAYMENTS.
All payments provided under this Agreement, other than payments made
pursuant to a plan which provides otherwise, shall be paid from the general
funds of the Company, and no special or separate fund shall be established, and
no other segregation of assets made, to assure payment. Executive shall have no
right, title or interest whatever in or to any investments which the Company may
make to aid the Company in meeting its obligations hereunder. To the extent that
any person acquires a right to receive payments from the Company hereunder, such
right shall be no greater than the right of an unsecured creditor of the
Company.
14. 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 assigns. This Agreement shall
not be assignable by Executive (but any payments due hereunder which would be
payable at a time after Executive's death shall be paid to Executive's
designated beneficiary or, if none, his estate) and shall be assignable by the
Company only to any financially solvent corporation or other entity resulting
from the reorganization, merger or consolidation of the Company with any other
corporation or entity or any corporation or entity to or with which the
Company's business or substantially all of its business or assets may be sold,
exchanged or transferred, and it must be so assigned by the Company to, and
accepted as binding upon it by, such other corporation or entity in connection
with any such reorganization, merger, consolidation, sale, exchange or transfer
in a writing delivered to Executive in a form reasonably
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acceptable to Executive (the provisions of this sentence also being applicable
to any successive such transaction).
15. ENTIRE AGREEMENT; AMENDMENT.
This Agreement shall supersede any and all existing oral or written
agreements, representations, or warranties between Executive and the Company or
any of its parent, subsidiaries or affiliated entities relating to the terms of
Executive's employment by the Company. It may not be amended except by a written
agreement signed by both parties.
16. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario applicable to agreements made and to be
performed in that Province, without regard to its conflict of laws provisions.
17. REQUIREMENT OF TIMELY PAYMENTS.
If any amounts which are required, or determined to be paid or payable,
or reimbursed or reimbursable, to Executive under this Agreement (or any other
plan, agreement, policy or arrangement with the Company) are not so paid
promptly at the times provided herein or therein, such amounts shall accrue
interest, compounded daily, at an 8% annual percentage rate, from the date such
amounts were required or determined to have been paid or payable, reimbursed or
reimbursable to Executive, until such amounts and any interest accrued thereon
are finally and fully paid, provided, however, that in no event shall the amount
of interest contracted for, charged or received hereunder, exceed the maximum
non-usurious amount of interest allowed by applicable law.
18. 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 when delivered or mailed by registered or certified mail, return
receipt requested, or by facsimile or by hand delivery, 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: Waste Management , Inc.
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
To Executive: At the address for Executive set forth
below.
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19. 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.
(B) SEPARABILITY. Subject to Section 9 hereof, if any term or
provision of this Agreement is declared 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.
IN WITNESS WHEREOF, this Agreement is EXECUTED and EFFECTIVE as of the
day set forth above.
XXXXXXX XXX
("Executive")
/s/ XXXXXXX XXX
-----------------------------------
Xxxxxxx Xxx
--------------------------(address)
-----------------------------------
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CANADIAN WASTE SERVICES, INC.
(The "Company")
By: /s/ XXXXX X. XXXXXXX
--------------------------------
Xxxxx Xxxxxxx
Vice-President and Secretary
WASTE MANAGEMENT, INC.
By: /s/ A. XXXXXXX XXXXX
--------------------------------
A. Xxxxxxx Xxxxx
President and Chief Executive
Officer
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