Exhibit 99.1
Consulting Agreement By and Between
Bentley King Associates, Inc. and Compost America Holding Company
effective June 29, 2000
COMPOST AMERICA HOLDING COMPANY
June 29, 2000
Bentley King Associates, Inc.
0000 Xxxxxx Xxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Consulting Agreement
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Dear Xx. Xxxxxxx:
This is to confirm that Compost America Holding Company, Inc. (the
"Company") desires to engage in a consulting relationship with Bentley King
Associates, Inc. (the "Contractor") to provide the exclusive services of Xxxxxx
X. Xxxxxxx (the "Consultant"). The following sets forth the agreement among the
Company, the Consultant and the Contractor regarding the terms of this
consulting arrangement with the Company (the "Agreement").
1. Term. The term of the consulting arrangement with the Company
pursuant to this Agreement will commence on the date hereof (the "Effective
Date") and will end on the third anniversary thereof unless terminated earlier
in accordance with the provisions of Section 5 below (the "Consulting Period").
The Consulting Period will be automatically renewed for additional 30 day
periods unless either party elects not to renew the Agreement by giving written
notice to the other party of such intention not to renew.
2. Responsibilities. (a) During the Consulting Period, the Contractor
will provide the consulting services of the Consultant and the Consultant will
devote a majority of his attention and time during normal business hours
performing such consulting services as the Board of Directors of the Company
(the "Board") reasonably requests regarding the implementation of the "Business
Plan" submitted by the Consultant and approved by the Board on March 6, 2000,
including, but not limited to, the development of the proposed facilities for
the Newark Recycling & Composting Company, the Miami Recycling & Composting
Company and American Marine Rail, LLC and, from time to time certain general
managerial and administrative responsibilities.
(b) During the Consulting Period, the Consultant will be a member of
the "Office of the President" of the Company or such other executive committee
that may replace the Office of President at any future date.
(c) During the Consulting Period, the Consultant will attend all
meetings of the Board and at each such meeting will present a report to the
Board of his activities, concerns and any other matters that the Consultant
xxxxx xxx be of interest to the Board, or that the Board may request.
(d) The Contractor will not be obligated to provide the services of the
Consultant for such period or periods of time during the year as the Company may
approve, which will constitute vacation for the Consultant; provided, that such
period or periods will not exceed four weeks per year.
3. Consulting Fee and Stock Options. (a) During the Consulting Period,
as payment for the services rendered to the Company by the Consultant, the
Company will pay the Contractor a fee (the "Fee") of $20,000 per month payable
in advance on the first day of each month in immediately available funds.
(b) On the Effective Date the Contractor will be granted stock options
(the "Commitment Options") to purchase 1,200,000 shares of Company common stock,
no par value (the "Common Stock") and during the Consulting Period upon the
attainment of certain levels of per share Market Price for the Company Common
Stock as more fully defined and described in the Option Agreement (defined
below), the Contractor will be granted stock options to purchase up to an
aggregate of 2,000,000 shares of Common Stock ( the "Retention Options" and
collectively with the Commitment Options, the "Options"). Such Options shall be
subject to the terms and conditions of a separate stock option agreement (the
"Option Agreement") attached hereto as Exhibit A.
4. Expenses. The Company will reimburse the Contractor for the
reasonable expenses incurred by the Consultant in connection with the
performance of the consulting obligations to the Company hereunder, in
accordance with the normal practice of the Company and upon compliance with the
Company's generally applicable reimbursement practice.
5. Termination of Consulting Period.
(a) General. Subject to the provisions of this Agreement, the
Contractor and the Company will have the right to terminate the Consulting
Period, for any reason or for no stated reason. For purposes of this Agreement
the "Date of Termination" will mean the date on which the Consulting Period is
terminated either by the Contractor, the Consultant, the Company or by mutual
agreement of the parties.
(b) Termination by the Company With Cause. The Consulting Period may be
terminated at any time by the Company for Cause (as defined below). Upon such
termination, (i) the Company will have no obligation under this Agreement other
than the payment to the Contractor of any accrued but unpaid Fee and any
unreimbursed expenses and (ii) all Retention Options whether or not vested and
exercisable will terminate as of the Date of Termination. For purposes of this
Agreement the term "Cause" will mean any of the following:
1. A willful failure of the Consultant to perform his duties
under this Agreement, which failure has not been cured (to the extent
susceptible to cure) within 30 days following written notice from the
Board detailing such failure;
2. Any willful misconduct by the Consultant relating, directly
or indirectly, to the Company, which breach has not been cured (to the
extent susceptible to cure) within 30 days following written notice
from the Board detailing such breach;
3. Any material breach by the Consultant of this Agreement,
including, without limitation, Section 6 hereof, which breach has not
been cured (to the extent susceptible to cure) within 30 days following
written notice from the Board detailing such breach; or
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4. The Consultant's commission of a common law fraud or
conviction of a felony.
(c) Termination Without Cause. The Consulting Period may be terminated
at any time by the Company without Cause. In the event of the termination of the
Consulting Period by the Company without Cause, the Company will pay the
Contractor a lump sum cash payment within thirty days following the Date of
Termination in an amount equal to (i) any accrued but unpaid Fee and any
unreimbursed expenses incurred through the Date of Termination and (ii) a
settlement fee of $120,000, provided the Contractor and the Consultant execute a
release in favor of the Company in a form satisfactory to the Company. Such
release shall release the Company and its officers and directors from all claims
arising under applicable federal, state or local law (including claims arising
out of the Age Discrimination in Employment Act of 1967) arising out of your
consulting relationship with the Company, the terms of this Agreement, the
termination of your services as consultant, and such other matters as the
parties shall mutually agree. All Options granted pursuant to the Option
Agreement that were vested as of the Date of Termination will remain exercisable
for a period of three years.
(d) Termination by the Contractor or the Consultant. In the event of
the termination of the Consulting Period by the Contractor or the Consultant,
the Company will have no obligation under this Agreement other than the payment
to the Contractor of any accrued but unpaid Fee and any unreimbursed expenses.
All Options granted pursuant to the Option Agreement that were vested as of the
Date of Termination will remain exercisable for a period of 180 days.
6. Protective and Restrictive Covenants. In addition to the following
protective and restrictive covenants, the Contractor and the Consultant
acknowledge that the Company is bound to the Covenant Not To Compete Agreement
between Synagro Technologies, Inc. and the Company dated June 14, 2000 and
during the Consulting Period both the Contractor and the Consultant will honor
the terms of such agreement.
(a) Restrictions on Competitive Engagements. Beginning on the Effective
Date and continuing until the first anniversary of the Date of Termination,
neither the Contractor nor the Consultant will, directly or indirectly, as a
sole proprietor, member of a partnership, stockholder or investor (other than a
stockholder or investor owning not more than a 1% interest of a publicly traded
company), officer or director of a corporation, or as an employee, associate,
consultant or agent of any person, partnership, corporation or other business
organization or entity, other than the Company or any parent, subsidiary or
affiliate of the Company (together, the "Company Group"), in the areas of Dade
County and Broward County in the State of Florida and the areas of Essex,
Bergen, Morris, Hudson, Union and Passaic counties in the State of New Jersey
and Nassau County and Westchester County and the counties encompassing the
boroughs of Manhattan, Queens, Brooklyn, Bronx and Staten Island in the State of
New York, render any service to or in any way be affiliated with a competitor
(or any person or entity that is reasonably anticipated to become a competitor)
of the Company Group.
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(b) Non-Solicitation. Beginning on the Effective Date and continuing
until the second anniversary of the Date of Termination, neither Contractor nor
the Consultant will, directly or indirectly, without the prior written consent
of the Company:
(i) solicit business from, entice away from, accept orders
involving or otherwise interfere with the relationships of the Company
Group with any client, or any person or entity which was reasonably
anticipated or identified by the Company to become a client (including
any person or entity who, during the most recent twelve months, was a
client of any member of the Company Group); or
(ii) solicit the services of any individual who is employed by
any member of the Company Group (or who was employed by any member of
the Company Group during the then most recent twelve-month period) or
who is retained by any member of the Company Group as an independent
contractor or consultant (or who was retained by any member of the
Company Group in such capacity in the most recent twelve-month period),
or take any action that results, or might reasonably result, in any
employee, independent contractor or consultant ceasing to perform
services for any member of the Company Group.
(c) Non-Disclosure. Neither the Contractor nor the Consultant will at
any time during the Consulting Period or for a period of five years thereafter,
directly or indirectly, other than in the performance of the duties described in
this Agreement on behalf of the Company or with the prior written consent of the
Company:
(i) disclose any confidential or other proprietary information
pertaining to the client accounts of the Company Group, including, but
not limited to, contracts, client lists, systems, procedures, manuals,
confidential reports and financial information concerning the Company
Group's services, products or businesses; or
(ii) use any confidential or other proprietary information
pertaining to the clients of any member of the Company Group
(including, but not limited to, client lists, client contacts, client
profiles and statistical or demographic analysis of any member of the
Company Group's clients) in order to contact, solicit, accept or refer
business from, or otherwise do business or deal with, any client of any
member of the Company Group (including any person or entity who, during
the most recent twelve months, was a client of any member of the
Company Group) in connection with the provision of any product or
service similar to any provided by the Company Group.
(d) Return of Company Property. Upon the termination of the Consulting
Period, the Contractor and the Consultant will immediately destroy personal
material; return all Company property and material in the Contractor's
possession or the Consultant's possession that belongs or relates to the Company
(the "Company Property") unless the Company expressly agrees in writing that the
Contractor or the Consultant may retain possession of any such property or
material. Company Property will include all originals and copies of files,
writings, reports, memoranda, diaries, notebooks, notes of meetings or
presentations, data, computer software and hardware, diskettes, drawings charts,
photographs, slides, patents, or an other form of record which contains
information created or produced for or at the direction of any member of the
Company Group, or any employee or agent thereof. All Company Property will be
returned undamaged and intact.
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(e) Application of Covenants. The activities described in this Section
6 (a), (b) and (c) will be prohibited regardless of whether undertaken by the
Contractor or the Consultant in an individual or representative capacity, and
regardless of whether performed for the Contractor's or the Consultant's own
account or for the account of any other individual, partnership, firm,
corporation or other business organization (other than the Company).
(f) Injunctive Relief. Without limiting the remedies available to the
Company, the Contractor and the Consultant acknowledge that a breach of any of
the covenants contained in this Section 6 may result in material irreparable
injury to the Company for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the
event of such a breach or threat thereof, the Company will be entitled to obtain
a temporary restraining order or a preliminary or permanent injunction
restraining the Contractor and/or the Consultant from engaging in activities
prohibited by this Section 6 or such other relief as may be required to
specifically enforce any of the covenants in this Section 6.
(g) Violation and Remedy. If the Company reasonably, after due
consideration, determines that the Contractor or the Consultant have breached
any of the provisions of clause (a), (b), (c) or (d) of this Section 6, in
addition to any other remedies available to the Company in law or equity, the
Company will be entitled (i) to immediately suspend as of the date of such
breach any payments or benefits under this Agreement and (ii) to declare
forfeited the Retention Options granted by the Company to the Contractor,
whether or not such Retention Options have vested or been exercised. The parties
further agree that upon forfeiture, the Company is entitled to recover, and the
Contractor will disgorge to the Company, any profits or proceeds acquired from
the Retention Option within the twelve months preceding such forfeiture. The
forfeiture and disgorgement provisions will survive the termination of any such
agreement and thereafter expire concurrently with the expiration date of the
covenants in this Section 6. Prior to the suspension of payment or benefits or
the forfeiture of Retention Options, the Company agrees to provide both the
Contractor and the Consultant with written notice of the breach and a reasonable
explanation therefore, and the Contractor and the Consultant will have an
opportunity within 5 days to respond to such. Notwithstanding the foregoing, at
the end of such response period the Company reserves the right to enforce the
remedies as set forth above in this clause (g).
(h) Third-Party Beneficiary. The parties hereto acknowledge and agree
that the subsidiary and parent companies of the Company are third-party
beneficiaries to the terms of this Section 6 and may enforce the terms of this
Agreement as they pertain to Section 6 to the full extent permitted by law and
equity.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement will be in writing and will be
deemed to have been duly given when delivered or mailed by United States
registered mail or certified return receipt requested, postage prepaid, if to
the Company, to its offices at Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxx
Xxxxxx 00000, attention: General Counsel and if to the Contractor or the
Consultant at the Contractor's last address of record, or to such other address
as any party may have furnished to the other parties hereto in writing in
accordance herewith, except that notice of change of address will be effective
only upon receipt.
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8. Binding Arbitration. Except for the relief provided for in Section
6(f), any controversy or claim arising out of or relating to this Agreement,
whether arising under federal, state, or local law and whether in contract or in
tort and including any discrimination or common law claims, will be settled by
arbitration under the auspices of the American Arbitration Association ("AAA")
in New York, New York. The dispute will be submitted to a single arbitrator to
be mutually agreed upon by the parties. If the parties cannot agree on a single
arbitrator, each party will appoint one arbitrator who will then jointly appoint
a single arbitrator. The arbitrator will give effect to applicable statutes of
limitations. Any controversy concerning whether an issue is arbitrable will be
determined by the arbitrator. Judgment upon the arbitration award may be entered
in any court having jurisdiction. The prevailing party in any arbitration
proceeding, as determined by the arbitrator, or in any proceeding with respect
thereto as determined by the person presiding, will be entitled to receive from
the non-prevailing party reasonable attorneys' fees and costs incurred by such
prevailing party in connection therewith. In the event that there is no
prevailing party, reasonable attorneys' fees and costs incurred by the parties
will be allocated between them by the arbitrator.
9. Miscellaneous.
(a) Amendments, Waivers, Etc. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing by the Company and the Contractor. No waiver by any party
hereto at any time of any breach by the other party hereto of, or of compliance
with, any condition or provision of this Agreement to be performed by such other
party will be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by any party which are not expressly set
forth in this Agreement and this Agreement will supersede all prior agreements,
negotiations, correspondence, undertakings and communications of the parties,
oral or written, with respect to the subject matter hereof and will supercede
all prior agreements, negotiations, correspondence, undertakings and
communications, oral or written, with respect to the subject matter hereof.
(b) Validity. The invalidity or unenforceability of any provision of
this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, which will remain in full force and effect. The
parties intend that any offending provision will be enforced to the fullest
extent to which it is enforceable, that any unenforceable portion thereof be
severed from this Agreement, and that this Agreement, as modified to sever any
such unenforceable portion, will be enforced to the fullest extent permitted by
law.
(c) Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
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(d) Independent Contractor Status. The parties hereto acknowledge and
agree that the Contractor and the Consultant will be independent contractors and
not employees of the Company and that the amounts paid to the Contractor
hereunder are not subject to federal, state or local tax withholdings. The
Contractor will be responsible for all taxes incurred by the Contractor and the
Consultant as a result of this Agreement and the Contractor and the Consultant
will be responsible for and will maintain adequate records of expenses it will
incur in the course of performing services hereunder and will be solely
responsible for and will file, on a timely basis, tax returns and payments
required to be filed with or made to any federal or state or local tax authority
with respect to the performance of services hereunder. The Contractor and the
Consultant agree to indemnify and hold the Company harmless from all
liabilities, costs and expenses (including, but not limited to, attorney's fees)
incurred by the Company as a result of the failure of the Contractor or the
Consultant to be treated as an independent contractor by the Internal Revenue
Service, the United States Department of Labor, or any other governmental
authority.
(e) Headings. The headings contained in this Agreement are intended
solely for convenience of reference and will not affect the rights of the
parties to this Agreement.
(f) Governing Law. The validity, interpretation, construction, and
performance of this Agreement will be governed by the laws of the State of New
Jersey applicable to contracts entered into and performed in such State without
regard to the choice of law provisions thereof.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter, which
will then constitute our agreement on this subject.
Sincerely,
COMPOST AMERICA HOLDING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President & General Counsel
ACCEPTED AND AGREED:
BENTLEY KING ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
ACCEPTED AND AGREED:
/s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Address: 0000 Xxxxxx Xxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
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STOCK OPTION AGREEMENT dated as of June 29, 2000 (the "Agreement")
among COMPOST AMERICA HOLDING COMPANY, INC., a Delaware corporation (the
"Company"), BENTLEY KING ASSOCIATES, INC. (the "Contractor") and the other party
signatory hereto (the "Consultant").
WHEREAS, Section 3 of the Consulting Agreement dated as of June 29,
2000 (the "Consulting Agreement") between the Company and the Contractor,
provides for the granting to the Contractor of nonqualified stock options to
purchase 3,200,000 shares of common stock, no par value, of the Company (the
"Common Stock") upon the terms and conditions hereinafter set forth and set
forth in the Consulting Agreement, and
WHEREAS, the Company intends that such options comply with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and Section 162(m) of the Internal Revenue Code of 1986,
as amended;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Confirmation of Grant of Options; Effectiveness. Pursuant to a
determination by the Board of Directors of the Company (the "Board"), the
Company hereby agrees to grant the Contractor, subject to the terms and
conditions of this Agreement and the Consulting Agreement, the number of
Commitment Options (as defined below) and Retention Options (as defined below)
(the Commitment Options together with the Retention Options the "Options")
specified in Section 3 of this Agreement. Each such Option shall entitle the
Contractor to purchase, upon payment of the exercise price of each Option (the
"Option Price") as set forth below, one share of Common Stock.
2. Certain Restrictions. None of the Options may be sold, transferred,
assigned, pledged, or otherwise encumbered or disposed of. Any attempt to sell,
transfer, assign, pledge or otherwise encumber or dispose of any Option contrary
to the provisions of this Agreement, and any levy, attachment or similar process
upon any Option shall be null and void and without effect, and the Board may, in
its discretion, upon the happening of any such event, terminate the Options as
of the date of such event.
3. Terms and Conditions of Options. The Options shall be granted in the
following manner:
(a) Commitment Options. Effective as of the date hereof, the Company
grants to the Contractor Options to purchase 1,200,000 shares of Common Stock
(the "Commitment Options") at an Option Price of $ .01 per share. The Commitment
Options are fully vested upon the date of grant.
(b) Retention Options. The Company shall grant to the Contractor
additional Options to purchase 2,000,000 shares of Common Stock (the "Retention
Options") in accordance with the following schedule:
(i) 500,000 Retention Options shall be granted to the
Contractor at an Option Price of $.25 per share within 30 days after
the date the Per Share Market Price (as defined below) of the Common
Stock is equal to $.50 per share.
(ii) 500,000 Retention Options shall be granted to the
Contractor at an Option Price of $.40 per share within 30 days after
the date the Per Share Market Price of the Common Stock is equal to
$.75 per share.
(iii) 1,000,000 Retention Options shall be granted to the
Contractor at an Option Price of $.80 per share within 30 days after
the date the Per Share Market Price of the Common Stock is equal to
$1.00 per share.
The Retention Options shall be vested upon the date of grant. For purposes of
this Agreement "Per Share Market Price" shall mean the market price for a share
of Common Stock determined based on a 10-day average closing price per share as
reported on the O.T.C. Bulletin Board or other national market where the Common
Stock is currently traded.
(c) Termination of Consultant's Services.
(i) In the event that the Consultant's services for the
Company and its subsidiaries are terminated by the Company without
Cause (as defined in the Consulting Agreement), Options that were
vested as of the Date of Termination (as defined in the Consulting
Agreement) will remain exercisable for a period of three years from
such date.
(ii) In the event that the Consultant's services for the
Company and its subsidiaries are terminated by the Contractor or
Consultant, Options that were vested as of the Date of Termination will
remain exercisable for a period of 180 days from such date.
(iii) In the event that the Consultant's services for the
Company and its subsidiaries are terminated by the Company with Cause,
all Retention Options whether or not vested and exercisable will
terminate as of the Date of Termination.
(d) Retention Option Forfeiture. In the event of any breach of the
provisions of clause (a), (b), (c) or (d) of Section 6 of the Consulting
Agreement the Company may declare forfeited all unexercised Retention Options
granted by the Company to the Contractor, whether or not such Retention Options
have been vested. The Company is entitled to recover, and the Contractor will
disgorge to the Company, any profits or proceeds acquired from Retention Options
exercised within the twelve months preceding such breach.
(e) Notice of Exercise. Subject to Sections 3(f), 3(h) and 5(b) hereof,
the Contractor may exercise any or all Options (to the extent not forfeited) by
giving written notice to the General Counsel of the Company at its principal
business office. The date of exercise of a Vested Option shall be the later of
(i) the date on which the General Counsel of the Company receives such written
notice or (ii) the date on which the conditions provided in Sections 3(f), 3(h)
and 5(b) hereof are satisfied.
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(f) Payment. Prior to the issuance of a certificate pursuant to Section
3(i) hereof evidencing shares of Common Stock, the Contractor shall have paid to
the Company the Option Price of all Common Stock purchased pursuant to exercise
of such Options, in cash or by certified or official bank check, and all
applicable tax withholding obligations shall have been satisfied as provided in
Section 5(b) of this Agreement.
(g) Shareholder Rights. Neither the Contractor nor the Consultant shall
have rights as a shareholder with respect to any Common Stock issuable upon the
exercise of an Option until a certificate or certificates evidencing such shares
shall have been issued to the Contractor, and no adjustment shall be made for
dividends or distributions or other rights in respect of any share for which the
record date is prior to the date upon which the Contractor or the Consultant
shall become the holder of record thereof.
(h) Limitation on Exercise.
(i) The Common Stock issued upon exercise of the Options shall
be issued only to the Contractor. Each share certificate representing
Common Stock purchased upon exercise of the Options shall bear a legend
stating that the Common Stock evidenced thereby may not be sold or
transferred except in compliance with the Securities Act of 1933, as
amended (the "1933 Act") and the provisions of this Agreement. In the
event of a transfer that is inconsistent with the restrictions on such
legend, the certificate(s) may be made subject to a stop transfer order
placed with the Company's transfer agent.
(ii) The Options shall not be exercisable unless and until (A)
a registration statement under the 1933 Act has been duly filed and
declared effective pertaining to the Common Stock subject to such
Options and such Common Stock shall have been qualified under
applicable state "blue sky" laws, or (B) the Board in its sole
discretion determines that such registration and qualification is not
required as a result of the availability of an exemption from such
registration and qualification under such laws. The Company shall use
all reasonable efforts to file a registration statement with the
Securities and Exchange Commission (the "SEC") on Form S-8 with respect
to the Common Stock subject to an Option on or prior to the date on
which such Option becomes exercisable; provided, however, the Company
shall be under no obligation to file a registration statement with the
SEC with respect to such Common Stock subject to the Options unless and
until the Company files a registration statement with the SEC with
respect to the common stock of the Company owned by X-X Associates,
LLC, a Delaware limited liability company. In the event the Company is
unable to file a registration statement with respect to all of the
common stock of the Company owned by X-X Associates, LLC and the Common
Stock subject to the Options, the Company shall file a registration
statement to register an amount of common stock of the Company owned by
X-X Associates, LLC and the Common Stock subject to the Options in
proportion to the fully diluted common stock share ownership of X-X
Associates, LLC, Bentley King Associates and Xxxxxxxx Partners, LLC in
the Company at the time of the filing of such registration statement.
The Company shall have no obligation to issue any Common Stock pursuant
to the exercise of an Option if the Company reasonably determines at
the time of such exercise that the issuance of Common Stock at such
time would violate applicable securities laws or violate then existing
policies of the Company applicable to consultants of the Company or its
Subsidiaries holding options to purchase Common Stock.
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(i) Issuance of Certificate. As soon as practicable, but in no
event later than 30 days following the exercise of any Options, a certificate
evidencing the number of shares of Common Stock issued in connection with such
exercise shall be issued in the name of, and delivered to, the Contractor.
4. Representations and Warranties. The Contractor and the Consultant
are aware of and familiar with the restrictions imposed on the transfer of any
Options. The Contractor and the Consultant represent that this Agreement has
been duly executed and delivered to the Contractor and constitutes a legal,
valid and binding agreement of the Contractor and the Consultant, enforceable
against the Contractor and the Consultant in accordance with its terms, except
as limited by any applicable bankruptcy, insolvency, reorganization, moratorium
or similar law affecting creditors' rights generally and by general principles
of equity. It shall be a further condition to the Company's obligation to issue
and deliver to the Contractor certificates for Common Stock upon exercise of an
Option that the Contractor deliver to the Company in writing a representation
that the Contractor is exercising such Option for its own account and, unless
the shares of Common Stock are then registered under the 1933 Act, for
investment only and not with a view to distribution and that the Contractor will
not make any sale, transfer or other disposition of any shares of Common Stock
purchased except (i) pursuant to the registration thereof under the 1933 Act,
(ii) pursuant to an opinion of counsel satisfactory in form and substance to the
Company that the sale, transfer or other disposition may be made without
registration, or (iii) pursuant to a "no-action" letter from the SEC. The
Contractor and the Consultant have been advised and understand that the Common
Stock must be held indefinitely unless the resale complies with provisions of
the securities laws.
5. Miscellaneous.
(a) No Rights to Grants or Continued Status. Neither this Agreement nor
any action taken or omitted to be taken hereunder or thereunder shall be deemed
to create or confer on the Contractor or the Consultant any right to be retained
in the service of the Company or any of its subsidiaries or affiliates, or to
interfere with or to limit in any way the right of the Company or any of its
subsidiaries or affiliates to terminate the services of the Contractor or the
Consultant at any time. Any right to be retained in the services of the Company
is set forth in the Consulting Agreement. The Contractor and the Consultant
shall have no rights to the benefits conferred by the Options or to any Common
Stock except to the extent the Options are exercised or such benefits are
otherwise conferred by the terms of this Agreement. Termination of the Retention
Options by reason of cessation of services shall not give rise to any claim for
damages by the Contractor or the Consultant under this Agreement or the
Consulting Agreement and shall be without prejudice to any rights or remedies
which the Company or any of its subsidiaries or affiliates may have against the
Contractor or the Consultant.
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(b) Tax Withholding. The Company and its subsidiaries shall have the
right to require the Contractor to remit to the Company, prior to the delivery
of any certificates evidencing Common Stock pursuant to the exercise of an
Option, any amount sufficient to satisfy any federal, state or local tax
withholding requirements. With the consent of the Company in its sole
discretion, prior to the Company's determination of such withholding liability,
the Contractor may make an irrevocable election to satisfy, in whole or in part,
such obligation to remit taxes by directing the Company to withhold Common Stock
that would otherwise be received by the Contractor. Such election may be denied
by the Company in its sole discretion, or may be made subject to certain
conditions specified by the Company, including, without limitation, conditions
intended to avoid the imposition of liability against the Contractor under
Section 16(b) of the Exchange Act.
(c) No Restriction on Right of Company to Effect Corporate Changes.
This Agreement shall not affect in any way the right or power of the Company or
its stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the capital structure or business of the
Company, or any merger or consolidation of the Company, or any issue of stock or
of options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or affect the
Common Stock or the rights thereof or which are convertible into or exchangeable
for Common Stock, or the dissolution or liquidation of the Company, or any sale
or transfer of all or any part of the assets or business of the Company, or any
other corporate act or proceeding, whether of a similar character or otherwise.
(d) Notice of Intent to Exercise. Notwithstanding any other provision
of this Agreement, the Company may, from time to time, require up to 30 days
notice of the Contractor's intent to exercise all or a portion of the Options in
order for the Company to comply with any applicable securities laws. The Company
shall not be liable for any adverse change in the market value of the Common
Stock during any such notice period.
6. Adjustment.
(a) The number of shares and price per share of Common Stock covered by
any Option, and any other rights under any Option, shall be appropriately
adjusted, as deemed appropriate by the Board (whose good faith determination
shall be absolute and binding on the Contractor), to reflect any subdivision
(stock split) or consolidation (reverse split) of the issued Common Stock, or
any other recapitalization of the Company, or any business combination or other
transaction involving the Company, which shall substantially affect the rights
of holders of Common Stock. The Board shall provide for appropriate adjustment
of the Options in the event of stock dividends or distributions of assets or
securities of other companies owned by the Company to stockholders relating to
Common Stock for which the record date is prior to the date the Common Stock
purchased by exercise of the Options are issued or transferred, except that no
such adjustment shall be made for stock dividends of 10% or less (cumulatively,
in the aggregate) or for cash dividends.
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(b) In the event of a change in the presently authorized Common Stock
which is limited to a change of all of its presently authorized Common Stock
into the same number of shares without par value, or any change of all of the
then authorized Common Stock with par value into the same number of shares with
a different par value, the shares resulting from any such change shall be deemed
to be Common Stock for purposes hereof, and no change in the number of Common
Stock covered by the Options or in the Option Price shall take place.
7. Survival; Assignment.
(a) All agreements, representations and warranties made herein and in
any certificates delivered pursuant hereto shall survive the issuance to the
Contractor of the Options and the Common Stock and shall continue in full force
and effect.
(b) The Company shall have the right to assign to any of its affiliates
any of its rights, or to delegate to any of its affiliates any of its
obligations, under this Agreement.
8. Notices. All notices and other communications provided for herein
shall be in writing and shall be delivered by hand or sent by certified or
registered mail, return receipt requested, postage prepaid, addressed, if to the
Contractor, to the most recent mailing address that the Company has on record
and, if to the Company, to its offices at Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxx Xxxxxx 00000, attention: General Counsel. All such notices shall be
conclusively deemed to be received and shall be effective, if sent by hand
delivery, upon receipt, or if sent by registered or certified mail, on the fifth
day after the day on which such notice is mailed.
9. Option Term. The term of the Options shall be ten years beginning on
the date of grant and no Option shall be exercisable following the expiration of
its term.
10. Waiver. The waiver by either party of compliance with any provision
of this Agreement by the other party shall not operate or be construed as a
waiver of any other provision of this Agreement, or of any subsequent breach by
such party of a provision of this Agreement.
11. Source of Rights. This Agreement and the Consulting Agreement shall
be the sole and exclusive source of any and all rights which the Contractor and
the Consultant may have in respect of the Options as granted hereunder. In the
event of any conflict between the provisions of the Consulting Agreement and of
this Agreement, the provisions of the Consulting Agreement shall prevail.
12. Captions. The captions contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
13. Interpretation and Construction. The good faith interpretation and
construction by the Board of any provision of this Agreement or any provision of
the Consulting Agreement relating to the Options shall be final and conclusive
and binding on the parties hereto.
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14. Entire Agreement; Governing Law. This Agreement and the Consulting
Agreement set forth the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings relating to the
subject matter hereof. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement. The headings
of sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of this
Agreement. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New Jersey without reference to the choice of law
provisions of New Jersey law.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Contractor and the Consultant
have executed this Agreement, both as of the day and year first above written.
COMPOST AMERICA HOLDING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President & General Counsel
BENTLEY KING ASSOCIATES, INC.
By /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
CONSULTANT
/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Address: 0000 Xxxxxx Xxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
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