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EXHIBIT 10.48
AMENDMENT AND RESTATEMENT OF
EXECUTIVE SEVERANCE AGREEMENT
THIS AMENDMENT AND RESTATEMENT OF EXECUTIVE SEVERANCE AGREEMENT,
by and between ALLWASTE, INC., a Delaware corporation (the "COMPANY"), and
T. XXXXX XXXX, XX. (the "EMPLOYEE"), which was effective as of November 11,
1996 (as so amended and restated, the "AGREEMENT"), is entered into this 5th
day of March 1997, to become effective only as provided in Section 1 hereof.
W I T N E S S E T H:
WHEREAS, the Employee is a key employee of the Company, and the
Employee's experience and knowledge of the affairs of the Company are
extremely valuable to the Company; and
WHEREAS, the Company and the Employee have entered into that
certain Employment Agreement dated November 11, 1996 governing the Employee's
employment with the Company (the "EMPLOYMENT AGREEMENT"); and
WHEREAS, the Board of Directors of the Company (the "BOARD")
believes it imperative that the Company be able to rely on the Employee to
continue his services to the Company without concern that the Employee may be
distracted by the personal uncertainties and risks created by the possibility
of a change in control; and
WHEREAS, the Company is entering into this Agreement with the
Employee in order to ensure the Employee's continued services, dedication
and objectivity during such period as the Company may be susceptible to a
change in control and to define the nature and terms of the Employee's
severance benefits following a Change in Control (as defined in Section 9
below); and
WHEREAS, an Agreement and Plan of Merger is being executed
currently herewith among the Company, Xxxxxx Environmental Inc., Taro
Aggregates Ltd., and Xxxxxx/Atlas Merger Corp. (the "MERGER AGREEMENT");
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, the Company and the
Employee hereby agree as follows.
SECTION 1. TERM. Subject to the second sentence of this
Section 1, this Agreement shall become effective (the "EFFECTIVE TIME")
immediately prior to (and subject to the occurrence of) approval of the
Merger Agreement by the Company's stockholders and shall continue until the
expiration or termination of the Employment Agreement, and to the extent that
the Employment Agreement is renewed for successive one-year periods, this
Agreement shall be similarly renewed (the "TERM"). If this Agreement
becomes effective, the Employee's original Executive Severance Agreement (and
any prior amendments thereto) described in the preamble hereto shall
simultaneously become null and void; provided that, if the Merger Agreement is
terminated, then, on the date of such termination, this Agreement shall
terminate
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and the Employee's original Executive Severance Agreement shall remain in
full force and effect. Notwithstanding any provision of this Agreement to
the contrary, termination of this Agreement shall not alter or impair any
rights of the Employee (or the Employee's estate or beneficiaries) that have
arisen under this Agreement prior to such termination.
SECTION 2. TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN
CONTROL.
2.1 GENERAL. For purposes of this Agreement, the "PROTECTED
PERIOD" shall mean the period of time beginning with a Change in Control
which occurs during the Term and ending 18 months following such Change in
Control; provided, however, if the Employee's employment with the Company
terminates for any reason (other than a termination (i) due to the
Employee's death, (ii) by the Company on account of the Employee's Disability
as provided in Section 2.2 below, (iii) by the Company for Cause as provided
in Section 2.3 below, or (iv) by the Employee for other than Good Reason as
provided in Section 2.4 below) prior to, but within six months of, the date on
which such a Change in Control occurs, then, for all purposes of this
Agreement: (A) the Employee shall be deemed to have continued employment
with the Company until the date of the Change in Control and then terminated
his employment on such date for Good Reason, and (B) the Protected Period
shall be deemed to have commenced immediately prior to the Employee's actual
termination of employment.
2.2 TERMINATION BY COMPANY ON ACCOUNT OF DISABILITY. If a
Change in Control occurs during the Term, and if, as a result of the
Employee's illness, physical or mental disability, or other incapacity which
continues for an uninterrupted period in excess of three (3) months or a
cumulative period of six (6) months in any twelve (12) month period during
the Protected Period, and if, within 30 days after the Company has given the
Employee written notice of the Company's intention to terminate the Employee
on account of such incapacity, the Employee shall not have returned to the
full-time performance of the Employee's duties, then the Company may
thereafter terminate the Employee's employment on account of "DISABILITY";
provided, however, such termination shall not by itself alter or impair
the Employee's rights as a "DISABLED EMPLOYEE" or otherwise under any of the
Company's employee benefits plans.
2.3 TERMINATION BY COMPANY FOR CAUSE. If a Change in Control
occurs during the Term, the Company may, at any time during the Protected
Period, terminate the Employee's employment for Cause. For purposes of this
Agreement, the Company shall have "CAUSE" to terminate the Employee's
employment hereunder only if: (a) the Employee willfully and continually
fails to perform substantially the Employee's duties with the Company (other
than any such failure resulting from the Employee's incapacity due to physical
or mental illness), which failure continues unabated after a demand for
substantial performance is delivered to the Employee by the Board that
specifically identifies the manner in which the Board believes that the
Employee has not substantially performed the Employee's duties, or (b) the
Employee willfully engages in gross misconduct that is materially and
demonstrably injurious to the Company. For purposes of this Section 2.3,
an act or failure to act on the Employee's part shall be considered "WILLFUL"
if done or omitted to be done by the Employee otherwise than in good faith
and without reasonable belief that the Employee's action or omission was in the
best interest of the Company. Notwithstanding the foregoing, the Employee
shall not be deemed to
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have been terminated by the Company for Cause unless and until the Company
shall have delivered to the Employee a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the entire
membership of the Board, at a meeting of the Board called and held for
the purpose (after reasonable notice to the Employee and an opportunity for
the Employee, together with the Employee's counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Employee
was guilty of conduct set forth in clauses (a) or (b) of the second
sentence of this Section 2.3 and specifying the particulars thereof in
reasonable detail.
2.4 TERMINATION BY EMPLOYEE FOR GOOD REASON. If a Change in
Control occurs during the Term, the Employee may terminate the Employee's
employment for Good Reason at any time during the Protected Period. For
purposes of this Agreement "GOOD REASON" shall mean any of the following:
(a) The Employee is assigned any duties materially
inconsistent with, or diminished from, the Employee's positions,
duties, responsibilities and status with the Company
immediately prior to the commencement of the Protected Period, or
the Employee's status, reporting responsibilities, titles or offices
are materially diminished from those in effect immediately prior to
the commencement of the Protected Period, or the Employee is
removed from or is not re-elected or appointed to any of such
responsibilities, titles, offices or positions, except in each
case in connection with the termination of the Employee's employment
by the Company for Cause or on account of Disability, or as a result
of the Employee's death, or by the Employee for other than Good
Reason; provided, however, that Good Reason shall not be triggered
under this subsection (a) by an insubstantial action not taken in
bad faith and which is remedied by the Company promptly after
receipt of written notice from the Employee; and provided further
that Good Reason shall not be triggered under this subsection (a) by
any such alteration primarily attributable to the fact that the
Company may no longer be a public company; or
(b) The Employee's annual rate of base salary is
reduced from that in effect immediately prior to the commencement of
the Protected Period or as the same may be increased from time to
time thereafter (such annual rate of base salary, as so increased
(if applicable) but prior to such reduction, is referred to
hereinafter as the "ANNUAL BASE SALARY"); provided, however, with
respect to a termination of employment prior to a Change in Control
that is deemed to have occurred on the date of the Change in
Control, "ANNUAL BASE SALARY" shall be the Employee's annual rate
of base salary as in effect immediately prior to the Employee's
actual date of termination, but disregarding any reduction therein
made within 30 days of the Employee's actual termination date; or
(c) The Company fails to continue in effect any
benefit or compensation plan (except the Supplemental Executive
Retirement Plan) which is material to the Employee's total
compensation, including, but not limited to, the Company's annual
bonus plan, qualified retirement plan, executive life insurance
plan and/or health and accident plan, in which the Employee is
participating immediately prior to the commencement of the Protected
Period, or plans providing the Employee with
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substantially similar benefits, or the Company takes any action
that would materially adversely affect the Employee's participation
in or reduce the Employee's benefits under any of such plans
(excluding any such action by the Company that is required by law);
or
(d) The Company's principal executive offices are
relocated at any time following a Change in Control more than 35
miles from where such offices were located immediately prior to such
Change in Control; or
(e) The Company requires the Employee at any time
following a Change in Control to relocate more than 35 miles from
where the Company's principal executive offices were located
immediately prior to such Change in Control; or
(f) The Company fails to obtain the assumption of the
obligation to perform this Agreement by any successor as
contemplated in Section 7.1 hereof; or
(g) Any purported termination of the Employee's
employment by the Company that is not effected pursuant to a
Notice of Termination satisfying the requirements of Section 2.5
below and, if applicable, the procedures described in Section 2.3
above; or
(h) The Company shall violate or breach any obligation
of the Company in effect immediately prior to the commencement of
the Protected Period (regardless whether such obligation be set forth
in the Employment Agreement or any other separate agreement entered
into between the Company and the Employee) to indemnify the
Employee against any claim, loss, expense or liability sustained
or incurred by the Employee by reason, in whole or in part, of the
fact that the Employee is or was an officer or director of the
Company; or
(i) The Company shall violate or breach any other
material obligation of the Company owing to the Employee in effect
immediately prior to the commencement of the Protected Period
relating to the Employee's employment with the Company, but only if
such violation or breach (if capable of being remedied) shall
continue unremedied for more than 15 days after written notice thereof
is given by the Employee to the Company; or
(j) The Board (or any nominating committee of the
Board) fails to recommend and support the Employee's re-election
as a director of the Company if the Employee is a director of the
Company immediately prior to the commencement of the Protected
Period.
2.5 NOTICE OF TERMINATION. Any termination by the Company
pursuant to Section 2.2 or 2.3 above or by the Employee pursuant to Section
2.4 above shall be communicated by written Notice of Termination to the other
party hereto; provided, however, that in the case of events of Good
Reason enumerated in subsections (f), (h), (i) or (l) of Section 2.4
hereof, the Company shall have the obligation to provide the Employee with
written notice of the occurrence of any of such events and the Employee shall
then have the opportunity
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to provide the Company with Notice of Termination if he so elects. The
Employee shall retain the ability to terminate his employment for Good Reason
under subsections (f), (h), (i) or (l) of Section 2.4 hereof, even if the
Company fails to provide written notice of the occurrence of any of the
events specified in such subsections as provided herein. For purposes of this
Agreement, a "NOTICE OF TERMINATION" shall mean a notice that shall indicate
the specific termination provision in this Agreement relied on and, except in
the case of the termination referred to in the last subsection of Section 2.4
above, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee's employment
under the provision so indicated. Any purported termination of this Agreement
not in compliance with the requirements of this Section 2.5 or, if
applicable, the procedures described in Section 2.3 above shall be
ineffective.
2.6 DATE OF TERMINATION. For purposes of this Agreement, "DATE
OF TERMINATION" shall mean: (a) if the Employee is terminated on account
of Disability pursuant to Section 2.2 above, 30 days after Notice of
Termination is given, provided that the Employee shall not have returned to
the performance of the Employee's duties on a full-time basis during such
30-day period; (b) if the Employee's employment is terminated for Cause
pursuant to Section 2.3 above, the date specified in the Notice of
Termination; (c) with respect to a termination of employment prior to a
Change in Control that is deemed to have occurred on the date of the Change
in Control, the date of such Change in Control; and (d) if the Employee's
employment is terminated for any other reason on or after a Change in Control,
the date on which a Notice of Termination is given; provided, however, in the
event of any dispute or controversy concerning the Employee's entitlement to
payment under this Agreement, solely for purposes of Section 3.3 and 3.4
below, concerning the timing of the payment of amounts under this Agreement,
the "DATE OF TERMINATION" shall mean the date of final resolution of such
dispute or controversy.
SECTION 3. COMPENSATION DURING DISABILITY, DURING PROTECTED
PERIOD OR ON TERMINATION.
3.1 If a Change in Control occurs during the Term and if, during
the Protected Period, the Employee fails to perform the Employee's normal
duties as a result of Disability (as defined in Section 2.2 hereof), the
Employee shall continue during the period of Disability to receive: (i) the
Employee's full Annual Base Salary at the rate then in effect, (ii) any
awards, deferred and non-deferred, payable during such period of disability
under the Company's annual bonus plan, less any amounts paid to the Employee
during such period of Disability pursuant to the Company's sick-leave or
disability program until the Employee's employment is terminated on account
of Disability pursuant to Section 2.2 hereof, and (iii) all other applicable
perquisites, insurance and other employee benefits.
3.2 If a Change in Control occurs during the Term and if,
during the Protected Period, the Employee's employment shall be terminated
by the Company for Cause pursuant to Section 2.3 above, the Company shall
pay the Employee's earned but unpaid Annual Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
and the Company shall have no further obligations to the Employee under this
Agreement, except those arising hereunder prior to the Date of Termination.
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3.3 If a Change in Control occurs during the Term pursuant to
the Merger Agreement, then, subject to the conditions stated in the last
sentence of this Section 3.3, the Company shall pay the Employee the
following amount by certified or bank cashier's check on each of two dates:
An amount equal to 1.25 times the sum of the Annual Base Salary and
an annual target bonus of 75% of the Annual Base Salary
The foregoing amount shall be paid to the Employee on each of the
following dates, if the conditions stated in the following sentence are met:
(1) the date (the "MERGER EFFECTIVE DATE") on which the Effective Time of
the Merger as defined in the Merger Agreement (the "MERGER EFFECTIVE TIME")
occurs, and (2) the later of January 1, 1998, or the six- month anniversary
of the Merger Effective Date. The amounts shall be paid on those two dates
only if the Employee is employed by the Company on the Merger Effective
Date, or if the Company shall have terminated the employment of the Employee
during the Protected Period prior to the Merger Effective Date other than
pursuant to Sections 2.2 or 2.3 hereof, or if the Employee shall have
terminated the Employee's employment during the Protected Period prior to
the Merger Effective Date for Good Reason in accordance with Section 2.4
hereof.
3.4 If a Change in Control occurs during the Term and if,
during the Protected Period, the Company shall terminate the Employee other
than pursuant to Sections 2.2 or 2.3 hereof or if, during the Protected
Period, the Employee shall terminate the Employee's employment for Good Reason
in accordance with Section 2.4 hereof, then, subject to Section 5 below and
the following provisions of this Section 3.4, the Company shall pay to the
Employee, in a single lump sum by certified or bank cashier's check within
five days of such Date of Termination, the sum of the amounts specified in
clauses (a) and (b) below:
(a) an amount equal to that portion of the Annual Base
Salary earned, but not paid, and vacation earned, but not taken, in
each case, to the Date of Termination, and all other amounts
previously deferred by the Employee (except any amounts in any
tax-qualified retirement or savings plan, which shall be governed
by the terms of such plan) or earned but not paid as of such
date under all Company incentive or deferred compensation plans or
programs; and
(b) an amount equal to (i) the amount of the maximum
monthly premium payment that may be charged to continue coverage for
the Employee and the Employee's eligible dependents under the
Company's health insurance plan under COBRA, multiplied by (ii) 30
months.
SECTION 4. ACCELERATION OF OPTION AND RESTRICTED STOCK GRANTS
4.1 If a Change in Control occurs during the Term pursuant to
the Merger Agreement and the Employee holds outstanding unexercisable options
under the Company's stock option plan(s) immediately prior to the Merger
Effective Time (the "UNEXERCISABLE OPTIONS"), then, notwithstanding any
provisions of such plans or prior agreements between the Company and the
Employee (and in lieu of any exercisability or vesting schedules therein), each
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date on which a portion of an Unexercisable Option would otherwise vest and
become exercisable (a "VESTING DATE") shall be accelerated by two years;
provided, however, that no accelerated Vesting Date shall be deemed to occur
earlier than immediately prior to the Merger Effective Time. Notwithstanding
the foregoing provisions of this Section 4.1, a portion of an Unexercisable
Option shall become exercisable on a projected accelerated Vesting Date
only if the Employee is employed by the Company on such date; provided,
however, in the event the Employee's employment is terminated subsequent to
the Effective Time of this Agreement while the Employee holds Unexercisable
Options, (i) due to the Employee's death, (ii) by the Company on account of
the Employee's Disability as provided in Section 2.2 hereof, (iii) by the
Company other than for Cause as provided in Section 2.3 hereof, or (iv)
by the Employee for Good Reason as provided in Section 2.4 hereof, then,
notwithstanding any provision of this Agreement to the contrary, each
Unexercisable Option shall become fully vested and exercisable on the later of
(x) the date of such termination or (y) immediately prior to the Merger
Effective Time.
4.2 If a Change in Control occurs during the Term pursuant to the
Merger Agreement and the Employee holds any outstanding shares of restricted
stock issued by the Company to the Employee under the Company's stock
plan(s) (including those granted under the Company's Target 2000: One, Two,
Four Plan) which remain subject to restrictions and/or performance or other
criteria relating thereto (the "RESTRICTIONS") immediately prior to the
Merger Effective Time (the "RESTRICTED SHARES"), then, notwithstanding any
provisions of such plans or prior agreements between the Company and the
Employee (and in lieu of any schedules for the lapsing of restrictions
contained therein), each date on which Restrictions on a portion of the
Restricted Shares would otherwise lapse or be deemed satisfied in full, as
applicable (a "Lapsing Date"), shall be accelerated by two years; provided,
however, that no accelerated Lapsing Date shall be deemed to occur earlier
than immediately prior to the Merger Effective Time. Notwithstanding the
foregoing provisions of this Section 4.2, Restrictions shall lapse on such
portion of the Restricted Shares on a projected accelerated Lapsing Date
only if the Employee is employed by the Company on such date; provided,
however, in the event the Employee's employment is terminated subsequent to
the Effective Time of this Agreement while the Employee holds Restricted
Shares, (i) due to the Employee's death, (ii) by the Company on account of
the Employee's Disability as provided in Section 2.2 hereof, (iii) by the
Company other than for Cause as provided in Section 2.3 hereof, or (iv) by the
Employee for Good Reason as provided in Section 2.4 hereof, then,
notwithstanding any provision of this Agreement to the contrary, all
Restrictions on all such Restricted Shares shall lapse or be deemed satisfied
in full, as applicable, on the later of (x) the date of such termination or
(y) immediately prior to the Merger Effective Time. No later than the fifth
day following any such lapse of Restrictions, the Company shall cause the
relevant unrestricted shares of stock to be delivered to the Employee.
SECTION 5. GROSS-UP OF PARACHUTE PAYMENT.
5.1 To provide the Employee with adequate protection in
connection with his ongoing employment with the Company, this Agreement
provides the Employee with various benefits in the event of termination of
the Employee's employment with the Company during the Protected Period. If the
Employee's employment is terminated following a "CHANGE IN CONTROL" of the
Company, within the meaning of Section 280G of the Internal Revenue Code of
1986, as
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amended (the "CODE"), a portion of those benefits could be characterized as
"EXCESS PARACHUTE PAYMENTS" within the meaning of Section 280G of the Code.
The parties hereto acknowledge that the protections set forth in this Section
5 are important, and it is agreed that the Employee should not have to bear
the burden of any excise tax that might be levied under Section 4999 of the
Code, in the event that a portion of the benefits payable to the Employee
pursuant to this Agreement are treated as an excess parachute payment. The
parties, therefore, have agreed as set forth in this Section 5.
5.2 Anything in this Agreement to the contrary notwithstanding,
if it shall be determined that any payment or distribution by the Company or
any other person to or for the benefit of the Employee (whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payments required under this Section 5) (a "PAYMENT") would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Employee with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "EXCISE TAX"), then the Company shall pay
an additional payment (a "GROSS-UP PAYMENT") in an amount such that after
payment by the Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed on the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed on the Payments.
5.3 Subject to the provisions of Section 5.4 below, all
determinations required to be made under this Section 5, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by an independent public accounting firm with a national
reputation that is selected by the Employee (the "ACCOUNTING FIRM") which
shall provide detailed supporting calculations both to the Company and to
the Employee within 15 business days after each receipt of notice from the
Employee that there has been a Payment, or such earlier time as is requested by
the Company. In the event that the Accounting Firm is serving as accountant
or auditor for the individual, entity or group effecting the change in
control of the Company, the Employee shall appoint another nationally
recognized accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne solely
by the Company. The Company shall indemnify and hold harmless the Employee,
on an after-tax basis, for any Excise Tax or income tax (including interest
and penalties with respect thereto) imposed on the Employee as a result of
such payment of fees and expenses. Any Gross-Up Payment with respect to the
respective Payment, as determined pursuant to this Section 5, shall be
paid by the Company to the Employee within five days of the receipt of the
Accounting Firm's determination. If the Accounting Firm determines that no
Excise Tax is payable by the Employee with respect to the respective
Payment, it shall furnish the Employee with a written opinion that failure to
report the Excise Tax on the Employee's applicable federal income tax return
would not result in the imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding on the Company and the
Employee. As a result of uncertainty in the 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 may not have been made by
the Company which should have been made ("UNDERPAYMENT"), consistent with the
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calculations required to be made hereunder. If the Company exhausts its
remedies pursuant to Section 5.4 below and the Employee 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 the benefit of the Employee.
5.4 The Employee shall notify the Company in writing of any
claim (including any threatened tax lien related to or based on any such
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 10 business days after the
Employee is informed in writing of such claim (or threatened lien) and shall
apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not pay such claim prior
to the expiration of the 30-day period following the date on which the
Employee 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 or such
tax lien would be imposed). If the Company notifies the Employee in writing
prior to the expiration of such period that it desires to contest such claim
(or threatened lien), the Employee shall:
(a) give the Company any information reasonably requested
by the Company relating to such claim (or threatened lien);
(b) take such action in connection with contesting such
claim (or threatened lien) 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 effectively to contest such claim (or threatened lien); and
(d) permit the Company to participate in any
proceedings relating to such claim (or threatened lien);
provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Employee
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 Subsection 5.4, 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 appeals, proceedings, hearings
and conferences with the taxing authority in respect of such claim and may, at
its sole option, either direct the Employee to pay the tax claimed and xxx
for a refund or contest the claim in any permissible manner, and the
Employee 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 Employee shall determine (but in no event shall
the Company permit or direct the Employee to allow a tax lien to be imposed on
the Employee's property); provided, further, that if the Company directs the
Employee to pay such claim and xxx for a refund, the Company shall advance the
amount of such payment to the
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Employee, on an interest-free basis, and shall indemnify and hold the Employee
harmless on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such
advance or with respect to any imputed income with respect to such advance;
and further, provided, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Employee with
respect to which such contested amount is claimed to be due is limited solely
to such contested amount. In addition, 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 the Employee 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.
5.5 If, after the receipt by the Employee of an amount advanced
by the Company pursuant to Section 5.2, 5.3 or 5.4, the Employee becomes
entitled to receive any refund with respect to such amount, the Employee shall
(subject to the Company's complying with the requirements of Section 5.4
above) promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto).
If after the receipt by the Employee of an amount advanced by the Company
pursuant to Section 5.2, 5.3 or 5.4 above, a determination is made that the
Employee shall not be entitled to any refund with respect to such amount and
the Company does not notify the Employee in writing of its intent to
contest such denial of refund prior to the expiration of 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.
SECTION 6. NO MITIGATION OF DAMAGES. The provisions of this
Agreement are not intended to, nor shall they be construed to, require that
the Employee seek or accept other employment following a termination of
employment and, amounts payable and benefits provided under this Agreement
to the Employee shall not be reduced by the Employee's acceptance of (or
failure to seek or accept) employment with another person. The Company's
obligations to make the payments and provide the benefits required for in
this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set off, counterclaim, recoupment, defense or other
claim, rights or action that the Company may have against the Employee or
others.
SECTION 7. SUCCESSORS; BINDING AGREEMENT.
7.1 The Company will require any successor, whether direct or
indirect, by purchase, merger, consolidation or otherwise, of all or
substantially all of the business and/or assets of the Company, expressly to
assume and agree to perform this Agreement in the same manner and to the
same extent as the Company would have been required if no such succession
had taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle the Employee to compensation from the Company in the same
amount and on the same terms as the Employee would be entitled hereunder if
the Employee terminated the Employee's employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
As used in this Agreement, "COMPANY" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid that
executes and delivers the agreement provided for in
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this Section 7.1 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
7.2 This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Employee should die while any amounts would still be payable to the
Employee hereunder if the Employee had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Employee's devisee, legatee or other designee
or, if none, to the Employee's estate.
SECTION 8. NOTICE. For the purpose of this Agreement, notices
and all other communications provided for herein shall be in writing and
shall be deemed to have been duly given when delivered or five days after
deposit in the United States mail, registered and return receipt requested,
postage prepaid, addressed to the respective addresses set forth below or to
such other address as either party shall have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only on receipt.
If to the Company:
Allwaste, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Chairman of the Compensation
Committee of the Board of Directors
If to Employee:
T. Xxxxx Xxxx, Xx.
11311 Williamsburg
Xxxxxxx, Xxxxx 00000
SECTION 9. CHANGE IN CONTROL. For purposes of this Agreement,
a "CHANGE IN CONTROL" shall be deemed to have occurred upon the consummation
of the transactions contemplated by the Merger Agreement at the Effective
Time of the Merger (as defined in the Merger Agreement).
SECTION 10. EMPLOYMENT WITH SUBSIDIARIES AND PARENTS.
Employment with the Company for purposes of this Agreement includes
employment with any entity (a "PARENT") which owns, directly or indirectly,
50% or more of the total combined voting power of the Company's outstanding
equity interests and employment with any entity in which the Company or the
Parent has a direct or indirect ownership interest of 50% or more of the
total combined voting power of all outstanding equity interests, it being
understood that for purposes of clause (a) of Section 2.4 hereof, "GOOD
REASON" shall be construed to refer to each of the Employee's positions,
duties, responsibilities (reporting and other), status, titles and offices with
the Company and each of its subsidiaries and parents.
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SECTION 11. MISCELLANEOUS. No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by the Employee and by the
Chairman of the Compensation Committee of the Board or other authorized
officer of the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state
or local law and any additional withholding to which the Employee has agreed.
SECTION 12. VALIDITY. THE INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE
PRINCIPLE OF CONFLICTS OF LAWS. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
SECTION 13. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original but all
of which together shall constitute one and the same instrument.
SECTION 14. DESCRIPTIVE HEADINGS. Descriptive headings are for
convenience only and shall not control or affect the meaning or construction
of any provision of this Agreement.
SECTION 15. CORPORATE APPROVAL. This Agreement has been
approved by the Board of Directors, and has been duly executed and delivered
by Employee and on behalf of the Company by its duly authorized representative.
SECTION 16. DISPUTE RESOLUTION.
16.1 In the event a dispute shall arise between the parties as to
whether the provisions of this Agreement have been complied with (a
"DISPUTE") the parties agree to resolve such Dispute in accordance with
the following procedure:
(a) A meeting shall be held promptly between the
parties, attended by (in the case of the Company) one or more
individuals with decision-making authority regarding the Dispute,
to attempt in good faith to negotiate a resolution of the Dispute.
(b) If, within 10 days after such meeting, the
parties have not succeeded in negotiating a resolution of the
Dispute, the parties agree to submit the Dispute to mediation
in accordance with the Commercial Mediation Rules of the American
Arbitration Association.
(c) The parties will jointly appoint a mutually
acceptable mediator, seeking assistance in such regard from the
American Arbitration Association if they
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have been unable to agree on such appointment within 10 days
following the 10-day period referred to in clause (b) above.
(d) On appointment of the mediator, the parties agree to
participate in good faith in the mediation and negotiations relating
thereto for 15 days.
(e) If the parties are not successful in resolving the
Dispute through mediation within such 15-day period, the parties
agree that the Dispute shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association.
(f) The fees and expenses of the mediator/arbitrators
shall be borne solely by the non-prevailing party or, in the event
there is no clear prevailing party, shall be borne by the Company.
(g) If any dispute shall arise under this Agreement
involving termination of the Employee's employment with the
Company or involving the failure or refusal of the Company to fully
perform in accordance with the terms hereof, the Company shall
reimburse the Employee, on a current basis, for all legal fees and
expenses, if any, incurred by the Employee in connection with such
dispute, together with interest thereon at the prevailing legal rate
of interest, such interest to accrue from the date of Notice of
Termination through the date of payment thereof; provided, however,
that in the event the resolution of such dispute in accordance with
this Section 16 includes a finding denying, in total, the Employee's
claims in such dispute, the Employee shall be required to reimburse
the Company, over a period determined by the Employee but not to
exceed 12 months from the date of such resolution, for all sums
advanced to the Employee with respect to such dispute pursuant to
this clause (g).
(h) Except as provided above, each party shall pay its
own costs and expenses (including, without limitation, reasonable
attorneys' fees) relating to any mediation/arbitration proceeding
conducted under this Section 16.
(i) All mediation/arbitration conferences and hearings
will be held in Houston, Texas.
16.2 In the event there is any disputed question of law involved
in any arbitration proceeding, such as the proper legal interpretation of
any provision of this Agreement, the arbitrators shall make separate and
distinct findings of all facts material to the disputed question of law to be
decided and, on the basis of the facts so found, express their conclusion of
the question of law. The facts so found shall be conclusive and binding on
the parties, but any legal conclusion reached by the arbitrators from such
facts may be submitted by either party to a court of law for final
determination by initiation of a civil action in the proper state or
Federal court sitting in Xxxxxx County, Texas. Such action, to be valid,
must be commenced within 20 days after receipt of the arbitrators' decision.
If no such civil action is commenced within such 20-day period, the legal
conclusion reached by the arbitrators shall be conclusive and binding on the
parties. Any such civil action shall be submitted, heard and determined
solely on the basis of the facts found by the arbitrators. Neither of the
parties shall, or shall be entitled to, submit
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any additional or different facts for consideration by the court. In the
event any civil action is commenced under this Section 16.2, the party who
prevails or substantially prevails (as determined by the court) in such civil
action shall be entitled to recover from the other party all costs, expenses
and reasonable attorneys' fees incurred in connection with such action and on
appeal.
16.3 Except as limited by Section 16.2 above, the parties agree
that judgment on the award rendered by the arbitrators may be entered in any
court of competent jurisdiction. In the event legal proceedings are
commenced to enforce the rights awarded in an arbitration proceeding, the
party who prevails or substantially prevails in such legal proceeding shall be
entitled to recover from the other party all costs, expenses and reasonable
attorneys' fees incurred in connection with such legal proceeding and on
appeal.
16.4 Except as provided above, no legal action may be brought by
either party with respect to any Dispute. All Disputes shall be determined
only in accordance with the procedures set forth above.
SECTION 17. NO OTHER SEVERANCE BENEFITS. In the event the
Employee becomes entitled to severance payments under Section 3.3 or 3.4 of
this Agreement, then the amounts payable under this Agreement to the Employee
shall be in lieu of, and not in addition to, any similar severance amounts to
which the Employee may otherwise be entitled under a severance plan or
program of the Company or any employment contract or agreement with the
Company.
IN WITNESS WHEREOF, the Company and the Employee have entered into
this Agreement as of the day and year first above written.
ALLWASTE, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
EMPLOYEE
/s/ T. Xxxxx Xxxx, Xx.
--------------------------------------------
T. Xxxxx Xxxx, Xx.
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