EXHIBIT 10.1
------------
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is made and entered into as of May 15, 2001 or
such earlier date as the parties agree (the "Effective Date"), by and between
▇▇▇▇▇ ▇▇▇▇▇ (the "Employee") and Waste Connections, Inc., a Delaware corporation
(the "Company"), with reference to the following facts.
Thc Company desires to engage the services and employment of the Employee,
and the Employee is willing to accept employment by the Company, on the terms
and conditions set forth below.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein, the Company and the Employee agree as follows:
1. EMPLOYMENT. The Company agrees to employ the Employee, and the Employee
agrees to accept employment with the Company, on the terms and conditions stated
herein.
2. POSITION AND RESPONSIBILITIES. During the Term the Employee shall serve
as the Director of Finance of the Company, reporting directly to the Company's
Chief Accounting Officer. The Employee shall be based in the Company's corporate
headquarters in California and shall be responsible for specific components of
financial and accounting functions relating to the Company's operations and
properties. The employee shall perform such other duties and responsibilities as
the President or the Board of Directors (the "Board") of the Company may
reasonably assign to the Employee from time to time. The Employee shall devote
such time and attention to his duties as are necessary to the proper discharge
of his responsibilities hereunder. The Employee agrees to perform all duties
consistent with (a) policies established from time to time by the Company and(b)
all applicable legal requirements.
3. TERM. The period of the Employee's employment under this Agreement (the
"Term") shall commence on the Effective Date and continue until the third
anniversary of the Effective Date, unless terminated earlier as provided herein
or extended by the Board. At the end of the initial Term, this Agreement shall
be renewed automatically for successive Terms of one year, unless either party
shall have given the other notice of termination hereof as provided herein.
4. COMPENSATION BENEFITS AND REIMBURSEMENT OF EXPENSES.
(a) COMPENSATION. The Company shall compensate the Employee during the
Term of this Agreement as follows:
(1) BASE SALARY. The Employee shall be paid a base salary ("Base
Salary") of not less than ninety thousand dollars ($90,000) per year in
installments consistent with the Company's usual practices. The Board shall
review the Employee's Base Salary on each anniversary of the Effective Date or
more frequently. at the times prescribed in salary administration practices
applied generally to management employees of the Company.
(2) PERFORMANCE BONUS. The Employee shall be entitled to an annual
cash bonus (the "Bonus") based on the Company's attainment of reasonable
financial objectives to be determined annually by the Board. The maximum annual
Bonus will equal twenty-five percent (25%) of the applicable year's beginning
Base Salary and will be payable if the Board determines, in its sole and
exclusive discretion, that that year's financial objectives have been fully met.
The Bonus shall be paid in accordance with the Company's bonus plan, as approved
by the Board; provided that in no case shall any portion of the Bonus with
respect to any fiscal year be paid more than seventy-five (75) days after the
end of such fiscal year. For the Employee's bonus to be paid in 2002, for the
fiscal 2001 year, any bonus earned shall be prorated from the first day of
employment to the end of the year.
(3) GRANT OF OPTIONS OR RESTRICTED STOCK. On the Effective Date,
the Company sha11 grant to the Employee, for no additional consideration, the
following awards:
(a.) Nonqualified stock options (the "Options") to purchase an
amount of the Company's Common Stock under the Company's Amended and Restated
1997 Stock Option Plan, such that the exercise price subtracted from the market
price of the stock, multiplied by the number of shares issued equals one hundred
thousand dollars ($100,000) on the grant date. For example, if on the first day
of employment, the Company's Common Stock closes at $26.00 per share; then the
Company would issue twenty thousand (20,000) stock options at $21.00 exercise
price to yield ($26.00 - $21.00 = $5.00/share multiplied by 20,000 options =
$100,000 of "in the money" value). All stock options granted shall vest and
become exercisable with respect to 25% of the shares granted on the first,
second, third, and fourth anniversaries of the grant date. The option shall have
a term of 10 years from the date of such grant.
And,
(b.) A grant of seven thousand, five hundred (7,500)
non-qualified stock options of the Company's Common Stock. These stock options
will be issued to the Employee in his name effective on the first day of
employment. The price of each stock option will be equal to the close of market
price for one share of the Company's common stock on the first day of
employment. The ownership of these shares shall vest 33 1/3% on the first,
second and third anniversaries of the grant date to the Employee, pursuant to
the 1997 Stock Option Plan.
The terms of the Options shall be described in more detail in a
Stock Option Agreement to be entered into between the Employee and the Company.
If at any time while any of the Options are still outstanding the Company amends
its Stock Option Plan to provide for a less favorable vesting schedule for stock
options than that provided herein, any Options then outstanding shall thereupon
be converted to warrants entitling the Employee to purchase the number of shares
of Common Stock for which the Employee's then outstanding Options may be
exercised, on the same terms as provided under such Options.
(b) OTHER BENEFITS. During the Term, the Company shall provide the
Employee with a cellular telephone and will pay or reimburse the Employee's
monthly service fee and costs of calls attributable to Company business. During
the Term, the Employee shall be entitled to receive all other benefits of
employment generally available to other management employees of the Company and
those benefits for which management employees are or shall become eligible,
including, without limitation and to the extent made available by the Company,
Medical, dental, disability, and prescription coverage, life insurance and
tax-qualified retirement benefits. If the Employee is not eligible for coverage
under the Company's health insurance policy at the commencement of the Term, the
Company shall reimburse the Employee for the expenses of health insurance
coverage under COBRA from the commencement of the Term until the Employee
becomes eligible for the health insurance benefits offered by the Company. The
Employee shall be entitled to two (2) weeks of paid vacation during each of the
first three twelve-month periods of his employment, and three (3) weeks per
twelve-month period beginning with the fourth twelve-month period of employment
under this agreement.
(c) REIMBURSEMENT OF OTHER EXPENSES. The Company agrees to pay or
reimburse the Employee for a11 reasonable travel and other expenses incurred by
the Employee in connection with the performance of his duties under this
Agreement on presentation of proper expense statements or vouchers. All such
supporting information shall comply with all applicable Company policies
relating to reimbursement for travel and other expenses.
(d) WITHHOLDING. All compensation payable to the Employee hereunder is
subject to all withholding requirements under applicable law.
5. CONFIDENTIALITY. During the Term of his employment, the Employee shall
not, without the prior written consent of the Company, divulge to any third
party or use for his own benefit or the benefit of any third party or for any
purpose other than the exclusive benefit of the Company, any confidential or
proprietary business or technical information revealed, obtained or developed in
the course of his employment with the Company and which is otherwise the
property of the Company or any of its affiliated corporations, including, but
not limited to, trade secrets, customer lists, formulae and processes of
manufacture; provided, however, that nothing herein contained shall restrict the
Employee's ability to make such disclosures during the course of his employment
as may be necessary or appropriate to the effective and efficient discharge of
his duties to the Company.
6. PROPERTY. Both during the Term of his employment and thereafter, the
Employee shall not remove from the Company's offices or premises any Company
documents, records, notebooks, files, correspondence, reports, memoranda and
similar materials or property of any kind unless necessary in accordance with
the duties and responsibilities of his employment. In the event that any such
material or property is removed, it shall be returned to its proper file or
place of safekeeping as promptly as possible. The Employee shall not make,
retain, remove or distribute any copies, or divulge to any third person the
nature or contents of any of the foregoing or of any other oral or written
information to which he may have access, except as disclosure shall be necessary
in the performance of his assigned duties. On the termination of his employment
with the Company, the Employee sha11 leave with or return to the Company all
originals and copies of the foregoing then in his possession or subject to his
control, whether prepared by the Employee or by others.
7. TERMINATION.
(a) TERMINATION BY THE COMPANY FOR CAUSE OR BY THE EMPLOYEE. The
employment of the Employee may be terminated for cause at any time by the
"Board" on written Notice of Termination (as defined in Section 8(a)) delivered
to the Employee describing with specificity the grounds for termination. The
employment of the Employee may also be terminated at any time by the Employee on
written Notice of Termination delivered to the Company. Immediately on
termination pursuant to this Section 7(a), the Company shall pay to the Employee
in a lump sum his then current Base Salary under Section 4(a)(1)on a prorated
basis to the Date of Termination (as defined in Section 8(b)). On termination
pursuant to this Section 7(a), the Employee shall forfeit (i) his Bonus under
Section 4(a)(2) for the year in which such termination occurs, and (ii)all
outstanding but unvested Options and other options and rights relating to
capital stock of the Company. For purposes of this Agreement, Cause shall mean:
(1) a material breach of any of the terms of this Agreement that is
not immed1ately corrected following written notice of default specifying such
breach;
(2) a breach of any of the provisions of Section 10;
(3) repeated intoxication with alcohol or drugs while on Company
premises during its regular business hours to such a degree that, in the
reasonable judgment of the other managers of the Company, the Employee is
abusive or incapable of performing his duties and respons1b1l1tles under this
Agreement;
(4) conviction of a felony; or
(5) misappropriation of property belonging to the Company and/or
any of its affiliates.
(b) TERMINATION WITHOUT CAUSE. The employment of the Employee may be
terminated without Cause at any time by the Board on delivery to the Employee of
a written Notice of Termination (as defined in Section 8(a)). On the Date of
Termination(as defined in Section 8(b)) pursuant to this Section 7(b), the
Company shall pay to the Employee in a lump sum an amount equal to (i) the Base
Salary payable under Section 4(a)(1)at the rate in effect on the Date of
Termination a period of one year provided the Employee agrees to a full time
transition period to assist the Company of up to one hundred and twenty (120)
days as directed by the Company. At the end of this transition period, the
Company shall pay the Employee the one year's lump sum payment. In addition, on
termination of the Employee under this Section 7(b),all of the Employee's
outstanding but unvested Options and other options and rights relating to
capital stock of the Company shal1 immediately vest and become exercisable. The
term of any such options and rights shall be extended to the third anniversary
of the Employee's termination. The Employee acknowledges that extending the term
of any option pursuant to this Section 7(b), or Section 7(c) or 7(d), could
cause such option to lose its tax-qualified status if it is an incentive stock
option under the Code and agrees that the Company shall have no obligation to
compensate the Employee for any additional taxes he incurs as a result.
(c) TERMINATION ON DISABILITY. If during the Term the Employee should
fail to perform his duties hereunder on account of physical or mental illness or
other incapacity which the Board shall in good faith determine renders the
Employee incapable of performing his duties hereunder, and such illness or other
incapacity shall continue for a period of more than six (6) consecutive months
("Disability"), the Company shall have the right, on Written Notice of
Termination (as defined in Section 8(8)) delivered to the Employee to terminate
the Employee's employment under this Agreement. During the period that the
Employee shall have been incapacitated due to physical or mental illness, the
Employee shall continue to receive the full Base Salary provided for in Section
4(a)(1) hereof at the rate then in effect until the Date of Termination (as
defined in Section 8(b)) pursuant to this Section 7(c). On the Date of
Termination pursuant to this Section 7(c), all of the Employee's outstanding but
unvested Options and other options and rights relating to capital stock of the
Company shall immediately vest and become exercisable. The term of any such
options and rights shall be extended to the third anniversary of the Employee's
termination.
(d) TERMINATION ON DEATH. If the Employee shall die during the Term,
the employment of the Employee shall thereupon terminate. On the Date of
Termination (as defined in Section 8(b))pursuant to this Section 7(d), all of
the Employee's outstanding but unvested Options and other options and rights
relating to capital stock of the Company shall immediately vest and become
exercisable. The term of any such options and rights shall be extended to the
third anniversary of the Employee's termination. The provisions of the Section
7(d) shall not affect the entitlements of the Employee's heirs, executors,
administrators, legatees, beneficiaries or assigns under any employee benefit
plan, fund or program of the Company.
8. PROVISIONS APPLICABLE TO TERMINATION OF EMPLOYMENT.
(a) NOTICE OF TERMINATION. Any purported termination of Employee's
employment by thc Company or by the employee pursuant to Section 7 shall be
communicated by Notice of Termination to the Employee or the Company, as the
case may be, as provided herein ("Notice of Termination").
(b) DATE OF TERMINATION. For all purposes, "Date of Termination" shall
mean the date on which a Notice of Termination is given.
(c) BENEFITS ON TERMINATION. On termination of this Agreement pursuant
to Section 7, all profit-sharing, deferred compensation and other retirement
benefits payable to the Employee under benefit plans in which the Employee then
participated shall be paid to the Employee in accordance with the provisions of
the respective plans. Except as otherwise provided in Sections 7(b), 7(c), 7(d),
and 9, if the Employee's employment by the Company is terminated before all of
the Employee's options, warrants and rights with respect to the Company's
capital stock have vested, the Employee shall forfeit any such options, warrants
and rights that are unvested as of the termination date.
9. CHANGE IN CONTROL.
(a) PAYMENTS ON CHANGE IN CONTROL. Notwithstanding any provision in
this Agreement to the contrary, unless the Employee elects in writing to waive
this provision, a Change in Control (as defined below) of the Company shall be
deemed a termination of the Employee without Cause and the Employee shal1 be
entitled to receive and the Company agrees to pay to the Employee in a lump sum
the same amount determined under Section 7(b) that is payable to the Employee on
termination without Cause. In addition, on a Change of Control, all of the
Employee's outstanding but unvested Options and other options and rights
relating to capital stock of the Company shall immediately vest and become
exercisable, and the term of any such options and rights shall be extended to
the third anniversary of the Employee's termination.
After a Change in Control, if any previously outstanding Option or
other option or right (the "Termination Option") relating to the Company's
capital stock does not remain outstanding, the successor to the Company or its
then Parent (as defined below) shall either:
(i) Issue an option, warrant or right, as appropriate (the "Successor
Option"), to purchase common stock of such successor or Parent in an amount such
that on exercise of the Successor Option the Employee would receive the same
number of shares of the successor's/Parent's common stock as the Employee would
have received had the Employee exercised the Terminated Option immediately prior
to the transaction resulting in the Change in Control and received shares of
such successor/Parent in such transaction. The aggregate exercise price for all
of the shares covered by such Successor Option shall equal the aggregate
exercise price of the Terminated Option; or
(ii) Pay the Employee a bonus within ten (10) days after the
consummation of the Change in Control in an amount agreed to by the Employee and
the Company. Such amount shall be at least equivalent on an after-tax basis to
the net after-tax gain that the Employee would have realized if he had been
issued a Successor Option under clause (i)above and had immediately exercised
such Successor Option and sold the underlying stock, taking into account the
different tax rates that apply to such bonus and to such gain, and such amount
shall also reflect other differences to the Employee between receiving a bonus
under this clause (ii) and receiving a Successor Option under clause (i) above.
(b) Definitions. For the purposes of this Agreement. a Change in
Control shall be deemed to have occurred if (i) there shall be consummated (aa)
any reorganization, liquidation or consolidation of the Company, or any merger
or other business combination of the Company with any other corporation, other
than any such merger or other combination that would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent (50%)of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such transaction, (bb)any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company, or if
(ii) any "person" (as defined in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), shall become the
"beneficial owner"(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of fifty percent (50%)or more of the Company's outstanding voting
securities (except that for purposes of this Section 10(b), "person" shall not
include any person or any person that controls, is controlled by or is under
common control with such person, who as of the date of this Agreement owns ten
percent(10%) or more of the total voting power represented by the outstanding
voting securities of the Company, or a trustee or other fiduciary holding
securities under any employee benefit plan of the Company, or a corporation that
is owned directly or indirectly by the stockholders of the Company in
substantially the same percentage as their ownership of the Company) or if
(iii)during any period of two consecutive years, individuals who at the
beginning of such period constituted the entire Board shall cease for any reason
to constitute at least one-half of the membership thereof unless the election,
or the nomination for election by the Company's shareholders, of each new
director was approved by a vote of at least one-half of the directors then still
in office who were directors at the beginning of the period.
The term "Parent" means a corporation, partnership. trust. limited
liability company or other entity that is the ultimate "beneficial owner" (as
defined above) of fifty percent(50%)or more of the Company's outstanding voting
securities.
10. NON-COMPETITION AND NON-SOLICITATION.
(a) In consideration of the provisions hereof, for the period
commencing on the date hereof and ending on the later of the first anniversary
of the termination of this Agreement, or one year after receipt by the Employee
of all compensation owed under this Agreement, the Employee will not, except as
specifically provided below, anywhere in any county in any state in which the
Company is engaged in business as of such termination date, directly or
indirectly, acting individually or as the owner, shareholder, partner or
management employee in any entity,{i)engage in the operation of a solid waste
collection, transporting or disposal business, transfer facility. recycling
facility. materials recovery facility or solid waste landfill;(ii) enter the
employ as a manager of, or tender any personal services to or for the benefit
of, or assist in or facilitate the solicitation of customers for, or receive
remuneration in the form of management salary, commissions or otherwise from,
any business engaged in such activities in such counties; or (iii)receive or
purchase a financial interest in, make a loan to, or make a gift in support of,
any such business in any capacity, including without limitation, as a sole
proprietor, partner, shareholder, officer, director, principal agent or trustee;
provided, however, that the Employee may own, directly or indirectly, solely as
an investment, securities of any business traded on any national securities
exchange or quoted on any NASDAQ market, provided the Employee is not a
controlling person of, or a member of a group which controls; such business and
further provided that the Employee does not, in the aggregate, directly or
indirectly, own two percent(2%)or more of any class of securities of such
business.
(b) After termination of this Agreement, the Employee shall not (i)
solicit any residential or commercial customer of the Company to whom the
Company provides service pursuant to a franchise agreement with a public entity
in any county in any state in which the Company is engaged in business as of
such termination date, (ii) solicit any residential or commercial customer of
the Company to enter into a solid waste ool1ection account relationship with a
competitor of the Company in any such county,(iii) solicit any such public
entity to enter into a franchise agreement with any such competitor. (iv)
solicit any officer, employee or contractor of the Company to enter into an
employment or contractor agreement with a competitor of the Company or otherwise
interfere in any such relationship, or (v) solicit on behalf of a competitor of
the Company any prospective customer of the Company that the Employee called on
or was involved in soliciting on behalf of the Company during the Term) in each
case until the second anniversary of the date of such termination, unless
otherwise permitted to do so by Section l0(a); provided that if the Employee is
terminated by the Company without Cause by the Company pursuant to Section 7(b),
the restrictions in this Section 10(b)shall apply only for as many months after
such termination as are used to calculate the amount actually paid under Section
7(b){iii) to the Employee on such termination. For example, if the Employee
waives his right to be paid any amount under Section 7(b)(iii) {relating to the
Total Compensation paid to him during the previous twelve months, the
restrictions in this Section l0(b) shall not apply at a1l; if the Employee
elects to receive under Section 7(b)(iii)an amount equal to only eight months'
Total Compensation. the restrictions shall apply for only eight months.
(c) If the final judgment of a court of competent jurisdiction declares
that any term or provision of this Section 10 is invalid 'or unenforceable, the
parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration or area of
the term or provision, to delete specified words or phrases or to replace any
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed.
11. INDEMNIFICATION. As an employee and agent of the Company: the Emp1oyee
shall be fully "indemnified by the Company to the fullest extent permitted by
applicable law in connection with his employment hereunder.
12. SURVIVAL OF PROVISIONS. The obligations of the Company under Section 11
of this Agreement, and of the Employee under Sections 5,6 and 10 of this
Agreement, shall survive both the termination of the Employee's employment and
this Agreement.
13. NO DUTY TO MITIGATE; NO OFFSET. The Employee shall not be required to
mitigate damages or the amount of any payment contemplated by this Agreement,
nor shall any such payment be reduced by any earnings that thc Employee may
receive from any other sources or offset against any other payments made to him
or required to be made to him pursuant to this Agreement.
14. ASSIGNMENT; BINDING AGREEMENT. The Company may assign this Agreement to
any parent, subsidiary, affiliate or successor of the Company. This Agreement is
not assignable by the Employee and is binding on him and his executors and other
legal representatives. This Agreement sha11 bind the Company and its successors
and assigns and inure to the benefit of the Employee and his heirs, executors,
administrators, personal representatives, legatees or devisees. The Company
sha11 assign this Agreement to any entity that acquires its assets or business.
15. NOTICE. Any written notice under this Agreement shall be personally
delivered to the other party or sent by certified or registered mail, return
receipt requested and postage prepaid, to such party at the address set forth in
the records of the Company or to such other address as either party may from
time to time specify by written notice.
16. ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire
agreement of the parties relating to the Employee's employment and supercedes
all oral or written prior discussions, agreements and understandings of every
nature between them. This Agreement may not be changed except by an agreement in
writing signed by the Company and the Employee.
17. WAIVER. The waiver of a breach of any provision of this Agreement shall
not operate or as be construed to be a waiver of any other provision or
subsequent breach of this Agreement.
18. GOVERNING LAW AND JURISDICTIONAL AGREEMENT. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of California.
19. SEVERABILITY. In case anyone or more of the provisions contained in
this Agreement is, for any reason held invalid in any respect, such invalidity
shall not affect the validity of any other provision of this Agreement, and such
provision shall be deemed modified to the extent necessary to make it
enforceable.
20. ENFORCEMENT. It is agreed that it is impossible to measure fully, in
money, the damage which will accrue to the Company in the event of a breach or
threatened breach of Sections 5, 6, or 10 of this Agreement, and, in any action
or proceeding to enforce the provisions of Sections 5, 6, or 10 hereof, the
Employee waives the claim or defense that the Company has an adequate remedy at
law and will not assert the claim or defense that such a remedy at law exists.
The Company is entitled to injunctive re1ief to enforce the provisions of such
sections as well as any and all other remedies available to it at law or in
equity without the posting of any bond. The Employee agrees that if the Employee
broaches any provision of Section 10, the Company may recover as partial damages
all profits realized by the Employee at any time prior to such recovery on the
exercise of any warrant, option or right to purchase the Company's Common Stock
and the subsequent sale of such stock, and may also cancel all outstanding such
warrants, options and rights.
21. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original and both of which together shall constitute
one and the same instrument.
22. DUE AUTHORIZATION. The execution of this Agreement has been duly
authorized by the Company by all necessary corporate action.
IN WITNESS WHEREOF, the parties have executed and delivered this Employment
Agreement as of the day and year set forth above.
WASTE CONNECTIONS,INC.,
a Delaware corporation
By:
----------------------------------------
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
EMPLOYEE:
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
