AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.2
AMENDED AND RESTATED
This Employment Agreement (this “Agreement”), dated as of January 5, 2007, is entered into
between WCA Management Company, L.P. (the “Company”), WCA Waste Corporation (the “Guarantor”) and
Xxx X. Xxxxx, Xx. (the “Executive”), and is effective as of January 1, 2007 (the “Effective Date”).
RECITALS
A. The Company has previously determined that it is in the best interest of the Company and
its equity holders to retain the Executive and to induce the continued employment of the Executive
for the long term benefit of the Company.
B. The Company desires to continue the employment of the Executive on the terms set forth
below to provide services to the Company and its affiliates, and the Executive is willing to
continue such employment and to continue to provide such services on the terms set forth in this
Agreement.
C. The Guarantor has determined that it is in the best interests of the Guarantor to
facilitate such retention and continued employment of the Executive by the Company by guaranteeing
the Company’s obligations under this Agreement.
D. The Company, the Guarantor and the Executive entered into that certain employment
agreement, effective January 1, 2005 (the “Prior Agreement”), which Prior Agreement is
automatically extended as therein provided unless proper notice of termination is given under the
Prior Agreement.
E. The Company, the Guarantor and the Executive deem it to their mutual best interests to
amend and restate the Prior Agreement as hereinafter set forth in order to help ensure compliance
with any applicable provisions of Section 409A of the Internal Revenue Code of 1986, as amended,
and regulations or other regulatory guidance issued thereunder and to update provisions of the
Prior Agreement that relate to annual and long-term incentives.
F. The parties retained the right in Section 17 of the Prior Agreement to modify the Agreement
by a subsequent written agreement executed by all of the parties thereto.
G. In consideration of the foregoing and the mutual terms, conditions, and covenants
set forth herein, and for other good and valuable consideration, the parties hereto do hereby agree
that the Prior Agreement is hereby amended and restated as follows.
AGREEMENT
1. Term of Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to remain in the employ of the Company, for a three-year period commencing
on the Effective Date of this Agreement and continuing until the day before the third anniversary
of the Effective Date, plus any extensions made in accordance with the provisions of this Section 1
(the “Term”). On the first day of each month occurring after the Effective Date, the initial Term
(and any extended Term) shall automatically be extended for an additional calendar month unless
prior to any such first day of the affected calendar month, the Company or Executive shall have
given notice not to extend the Term. The Company and Executive agree that any such notice by the
Company shall constitute “Good Reason” as defined in Section 2(d) for Executive to terminate
Executive’s employment. This Agreement shall terminate on the earlier of (a) the last day of the
Term or (b) such earlier date as this Agreement is terminated pursuant to Section 2. Nothing in
this Section 1 shall limit the right of the Company or Executive to terminate Executive’s
employment hereunder subject to the terms and conditions of Sections 7, 10 and 11 and other
applicable provisions of this Agreement.
2. Termination of Employment. Executive’s employment with the Company shall terminate
upon the earliest of:
(a) the death of the Executive;
(b) at any time after Executive has been receiving full or partial salary payments under the
Company’s disability plans for a period of 18 consecutive months by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 consecutive months, either the Company
or Executive sending the other party written notice that Executive is “permanently disabled” as
defined above in this Section 2(b); provided, however, that during any period prior to such
termination of this Agreement in which Executive is receiving full or partial salary payments under
the Company’s disability insurance policies, the obligation of the Company to pay Executive salary
pursuant to Section 4 shall cease;
(c) the Company’s sending Executive written notice that Executive’s employment is terminated
for “cause” which term shall mean (i) the willful material breach by Executive of this Agreement,
(other than any breach resulting from Executive’s incapacity due to physical or mental illness),
which breach continues for thirty (30) days after actual receipt of written notice from the Company
and which results in, or is reasonably likely to result in, demonstrable material damage to the
Company, (ii) Executive’s conviction of or plea of guilty to a felony or Executive’s conviction of
a crime involving moral turpitude, (iii) Executive’s engagement in the fraud of the Company or the
misappropriation or embezzlement of funds from the Company, (iv) or Executive’s reckless disregard
or willful misconduct which misconduct, if ongoing, (as distinguished from an isolated incident),
continues for thirty (30) days after actual receipt of written notice from the Company and which
results in, or is reasonably likely to result in, demonstrable and material damage to the Company;
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(d) the Executive’s sending the Company written notice that Executive’s employment is
terminated for “Good Reason” which term shall mean the occurrence (without the Executive’s express
written consent) of any one of the following acts by the Company, or failures by the Company to
act, unless, in the case of any act or failure to act described below, such act or failure to act
is corrected within thirty (30) days after actual receipt of written notice from Executive: (i) the
Company’s breach of a material term or condition of the Agreement;
(ii) except for any changes required by applicable law, the failure by the Company to continue
in effect any compensation plan in which the Executive participates immediately prior to the date
hereof which is material to the Executive’s total compensation, including but not limited to the
Company’s annual incentive plan, long-term incentive plan, supplemental executive retirement plan
and equity incentive plan, as applicable, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan; (iii) the Company’s asking
or requiring the Executive to take (or not to take) any action which the Executive in good faith
reasonably believes could be materially misleading to the Company’s employees, investors,
accountants or attorneys and/or any regulatory authority; or (iv) notice by the Company to the
Executive under Section 1 that the Term will not be extended; provided, however, that the
Executive’s right to terminate the Executive’s employment for Good Reason shall not be affected by
the Executive’s incapacity due to physical or mental illness. Notwithstanding any other provision
of this Section 2(d) to the contrary, within ninety (90) days (or such other period as the parties
may agree to in writing) following any date on which an act by the Company or failure to act by the
Company gives rise to the right of Executive to terminate employment by the Company for Good
Reason, Executive shall provide the Company written notice that Executive’s employment is
terminated, and any failure to comply with the requirements of this sentence shall be conclusively
deemed to be a waiver by Executive of the right to terminate his employment hereunder for Good
Reason that is based on that act or failure to act by the Company.
3. Position and Duties.
(a) The Executive’s positions shall be those of Chairman and Chief Executive Officer, and in
such capacity Executive shall perform the customary duties and responsibilities of the positions.
Subject to the Company’s actual receipt of prior written consent of Executive, these positions,
duties, and responsibilities can be modified as required to suit the specific requirements and
needs of the Company, provided that any such modification shall result in substantially similar,
comparable or higher positions, duties and responsibilities. Similarly, subject to the Company’s
actual receipt of prior written consent of Executive, the Company may assign Executive part time or
full time to a subsidiary in which case the subsidiary shall be jointly and severally responsible
as, and shall be treated as, the Company under this Agreement for the period of time the Executive
performs services for the subsidiary. Executive’s place of employment will be located within the
greater Houston, Texas metropolitan area, but Executive will undertake appropriate business travel
as required by the Company.
(b) Executive agrees to conduct all business in accordance with the Company’s general
policies/directives as they may exist at any given time. Executive shall comply materially with
all applicable laws and regulations of the countries in which the Company and its affiliates
operate.
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(c) Executive agrees to devote his full time, attention, and efforts during regular business
hours, and at all such other times as may be requested by the Company, consistent with industry
practices, to the business affairs of the Company during the Term of this Agreement and to perform
his duties faithfully and diligently to discharge the responsibilities assigned to the Executive
hereunder. The foregoing notwithstanding, the parties recognize and agree that Executive may
engage in passive personal investments and other business, civic or charitable activities that do
not conflict with the business and affairs of the Company or interfere with Executive’s performance
of his duties hereunder.
4. Salary. Except if Executive’s employment is terminated pursuant to Section 2(a),
(b), (c) or (d) (in which case Section 7(a) applies) and except as otherwise provided in Section
2(b), during the Term, the Company shall pay Executive a base salary of $385,785 per year, payable
bi-monthly (“Base Salary”). The Base Salary will be increased each year on the anniversary of the
Effective Date of the Employment Agreement by not less than the increase during the immediately
preceding year in the Consumer Price Index for the Houston Standard Metropolitan Statistical Area.
5. Annual/Long-Term Incentives. During the Term, Executive shall participate in the
Guarantor’s annual incentive plan (i.e., the Management Incentive Plan or any successor thereto)
and shall have the opportunity to earn an annual bonus for the applicable measurement period of up
to two hundred percent (200%) of Executive’s Base Salary based on performance measures and annual
incentive plan goals as shall be established by the Compensation Committee pursuant to the terms of
such plan. Also, during the Term, as soon as practicable on or following the Effective Date and
the first day of each subsequent calendar year, Executive shall receive grants of restricted stock
under the 2004 WCA Waste Corporation Incentive Plan (or any successor thereto) in an amount equal
to the result obtained by dividing one hundred percent (100%) of Executive’s Base Salary for the
relevant year by the greater of nine dollars and fifty cents ($9.50) a share or the average of the
closing bid and ask prices of one share of common stock of the Guarantor on the NASDAQ Market for
the last ten (10) trading days of the calendar year that ends immediately prior to the calendar
year for which the grant is made. Such restricted stock shall vest one-third annually on each of
the three (3) anniversaries of the date of grant of the restricted stock unless other vesting
provisions are prescribed by the Compensation Committee of the Board of Directors of the Guarantor.
6. Benefits. Except if Executive’s employment is terminated pursuant to Section 2(a),
(b), (c) or (d) (in which case Section 7(a) applies), during the Term, Executive and, to the extent
applicable, Executive’s family, dependents and beneficiaries may participate in the benefit or
similar plans, policies or programs (including, without limitation, the Company’s business and
entertainment expense reimbursement policies, car allowance policies, 401(k) plans, disability
plans, pension plans, health insurance plans and director and officer liability insurance policies)
provided to similarly-situated Executives under the Company’s standard employment practices as in
effect from time to time. Nothing herein shall be construed to require the Company to continue or
put into effect any plan, practice, policy, or program or any element thereof. In addition, during
the Term, Executive shall be entitled to three (3) weeks of paid vacation days annually pursuant to
applicable policies and procedures of the Company as in effect from time to time.
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7. Effects of Termination of Employment.
(a) Subject to the provisions of this Section 7, upon termination of Executive’s employment
with the Company for any reason whatsoever, the Company shall pay to Executive (or in case of
Executive’s death, to his estate), within thirty (30) days of the effective date of such
termination, all salary and expense reimbursements due to Executive through the date of such
termination, and Executive shall be entitled to such benefits as are available pursuant to the
terms of any benefit or similar plans, policies or programs in which Executive was participating at
the time of such termination pursuant to Section 6 of this Agreement. In addition, upon
termination of Executive’s employment with the Company for death or permanent disability, in lieu
of any further salary or bonus payments as severance to Executive for periods subsequent to such
termination and in lieu of any other severance otherwise payable to Executive, the Company will pay
to Executive (or to his estate, as applicable), within thirty (30) days of such termination, a lump
sum severance payment, in cash equal to the Executive’s Base Salary for the Remaining Term of the
Agreement as in effect immediately prior to such termination of Executive’s employment. Also, if
the Company terminates the Executive’s employment for any reason other than those set forth in
Sections 2(a), (b) or (c), or if Executive terminates Executive’s Employment under Section 2(d),
the Company shall continue throughout the full Term of this Agreement to pay Executive’s salary
pursuant to Section 4, to continue coverage in any annual and long-term incentive plans pursuant to
Section 5 and to provide Executive’s benefits pursuant to Section 6 (and, if the Company pays
Executive’s salary and provides Executive’s benefits for the full Term of this Agreement, Executive
shall be subject to the covenants contained in Section 9 through the full term of this Agreement).
References in this Section 7(a) to termination of Executive’s employment shall mean termination of
Executive’s employment with the Company and all entities required to be aggregated with the Company
and treated as one employer under Section 414(b) or (c) of the Code (as defined in Section 10(a)
hereof). Notwithstanding any provision of this Section 7 to the contrary, except for any payment
due under the first sentence of Section 7(a), any payment otherwise due under Section 7(a) shall be
subject to any applicable limitations set forth in Section 20 of this Agreement.
(b) Notwithstanding any termination of this Agreement or Executive’s employment hereunder,
this Section 7 and Sections 10 and 11 of this Agreement, and the rights and obligations created
therein, shall survive without limitation.
(c) Notwithstanding any provision of this Agreement, it is the intention of the parties hereto
that there shall be no duplication of benefits if the circumstances of Executive’s termination of
employment would otherwise entitle Executive to payments and benefits under this Section 7 and
under Section 10. Accordingly, in the event of such a termination, if a particular type of benefit
is payable under both Section 7 and Section 10, the Company shall in good faith compare the two
benefits and Executive shall be paid the greater of the two benefits. Such payment shall be
accepted by Executive in lieu of the lesser benefit otherwise provided under this Agreement.
8. Tax Withholding. All payments to Executive under this Agreement shall be subject
to withholding or deduction of such amounts as may be required by law.
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9. Noncompetition and Confidentiality.
(a) The parties recognize that the employment of Executive with the Company has been and will
continue to be special, unique and of an extraordinary character, and in connection with such
employment Executive has and will continue to acquire special skill and training. The parties also
recognize that the covenants of Executive contained in this Section 9 are an essential part of
Executive’s engagement by the Company and that, but for the agreement of the Executive to comply
with such covenants, the Company would not have entered into this Agreement. Executive accordingly
agrees that, during the Term, (i) Executive shall not act or serve, directly or indirectly, as a
principal, agent, independent contractor, consultant, director, officer, executive, employee or
advisor or in any other position or capacity with or for, or acquire a direct or indirect ownership
interest in or otherwise conduct (whether as stockholder, partner, investor, joint venturer, or as
owner of any other type of interest), any Competing Business (defined below); provided, however,
that this clause shall not prohibit the Executive from being the owner of (A) up to 5% of any class
of outstanding securities of any entity if such class of securities is publicly traded or (B) any
other securities owned by Executive on the date of this Agreement, and (ii) Executive shall not, in
connection with or for the benefit of any person or entity engaged in the non-hazardous solid waste
business, solicit, induce, divert or take away, any officer, employee or consultant of the Company.
(b) From the date hereof, Executive shall hold in secrecy for the Company all trade secrets
and other confidential information relating to the business and affairs of the Company that have
come or may have come to his attention during his employment with the Company, including
information concerning costs, profits, markets, sales, business development plans, lists of clients
or customers, lists of acquisition targets and other information about such acquisition targets and
other information of a similar nature (such categories of information being referred to herein as
“Confidential Information”). Executive shall not use for his own benefit or disclose to any person
any Confidential Information other than in the ordinary course of the Company’s business or in
response to a court order, unless such use or disclosure has the prior written authorization of the
Company. Executive shall deliver to the Company, upon request, all correspondence, memoranda,
notes, records, plans, customer lists, product compositions and other documents and all copies
thereof, whether in hard copy form or electronically or magnetically stored, made, composed, or
received by the Executive, solely or jointly with others, that are in the Executive’s possession,
custody or control and that are related in any manner to the past, present or anticipated business
of the Company.
(c) For the purposes of this Section 9, “Competing Business” shall mean an individual,
business, corporation, association, firm, undertaking, partnership, joint venture, organization or
other entity that operates non-hazardous solid waste landfills, non-hazardous solid waste
collection businesses or similar facilities or businesses within a 50-mile radius of any of the
landfills or similar facilities of the Company, Guarantor or any affiliate thereof.
(d) Should any portion of this Section 9 be deemed unenforceable because of the scope,
duration or territory encompassed by the undertakings of the Executive hereunder, and only in such
event, then the Executive and the Company consent and agree to such limitation on scope, duration
or territory as may be finally adjudicated as enforceable by a court of competent jurisdiction
after the exhaustion of all appeals.
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(e) The covenants in this Section 9 shall be construed as an agreement ancillary to the other
provisions of this Agreement, and the existence of any claim or cause of action of the Executive
against the Company, whether predicated on this Agreement or otherwise, other than a claim or cause
of action based on the Company’s failure to pay Executive amounts payable to Executive hereunder,
shall not constitute a defense to the enforcement by the Company of this covenant.
(f) It is expressly recognized and agreed that the covenants set forth in this Section 9 are
for the purpose of restricting the activities of the Executive only to the extent necessary for the
protection of the legitimate business interests of the Company, and the Company and the Executive
agree that said covenants are reasonable for that purpose and that such covenants do not and will
not preclude Executive from engaging in activities sufficient for the purpose of earning a living.
10. Additional Consideration.
(a) Change in Control. In the event of the occurrence of a “Change in Control”
(defined below), and, within twenty-four (24) months following such Change in Control, Executive’s
employment shall be involuntarily terminated for any reason other than for cause or Executive
terminates Executive’s employment due to (i) suffering a significant reduction in reporting level
(as determined by Executive in good faith), (ii) suffering a reduction in Base Salary and annual
incentive compensation at target by ten percent (10%) or more or (iii) being required to relocate
from the regular assigned work place by more than fifty (50) miles from Executive’s regular
assigned work place, subject to any applicable limitation under Section 20, the Company shall pay
to Executive, within thirty (30) days after such termination of employment following such Change in
Control that gives rise to the payment due hereunder, a lump sum payment, in cash, equal to three
(3) times the sum of (i) Executive’s annual Base Salary as in effect immediately prior to the
Change in Control and (ii) Executive’s Average Annual Bonus (defined below). References in this
Section 10(a) to termination of Executive’s employment shall mean termination of Executive’s
employment with the Company and all entities required to be aggregated with the Company and treated
as one employer under Section 414(b) or (c) of the Code (as defined below). “Change in Control”
shall mean the occurrence during the Term of this Agreement, of an one of the following events:
(i) An acquisition of any common stock (“Common Stock”), par value $.01 per share, of
the Guarantor or other securities entitled to vote, or convertible into or exercisable for
securities entitled to vote, in the election of directors (such Common Stock and other
securities hereinafter being referred to as the “Voting Securities”) of the Guarantor by any
Person (as specified in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and used in Sections 13(d) and 14(d) thereof), including for purposes
of this Section the Guarantor or its Affiliates, immediately after which such Person has
Beneficial Ownership (as defined below) of fifty percent (50%) or more of the combined
voting power of the Guarantor’s then outstanding Voting Securities; provided, however, a
Change in Control shall not be deemed to have occurred by reason of an acquisition of fifty
percent (50%) or more of the
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Guarantor’s Voting Securities by an employee benefit plan maintained by the Guarantor
or any of its Affiliates or by a Person in a Non-Control Transaction (as defined below); or
(ii) The individuals who, as of the date of this Agreement are members of the Board of
Directors of the Guarantor (the “Incumbent Board”), cease for any reason to constitute at
least two/thirds (2/3) of the members of the Board of Directors of the Guarantor; provided,
however, that an individual will be treated as a member of the Incumbent Board if the
members of the Board of Directors of the Guarantor prior to such individual’s nomination
unanimously approve such individual’s nomination and election to the Board of Directors of
the Guarantor and provided further that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of either an actual
or threatened proxy contest or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors of the Guarantor (a
“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Proxy
Contest; or
(iii) The consummation of:
| (A) | A merger, consolidation or reorganization with or into the Guarantor or in which securities of the Guarantor are issued | ||
| (a “Merger”), unless such Merger, consolidation or reorganization occurs in connection with a Non-Control Transaction; | |||
| (B) | A complete liquidation or dissolution of the Guarantor; or | ||
| (C) | The sale or other disposition of all or substantially all of the assets of the Guarantor to any Person (other than a transfer to an employee benefit plan or Affiliate of the Guarantor or under conditions that would constitute a Non-Control Transaction with the disposition of assets being regarded as a Merger for this purpose). |
As used in the above definition of Change in Control, the following terms have the following
meanings:
(i) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under
Section 12 of the Exchange Act.
(ii) “Beneficial Ownership,” “Beneficially Owned” and the like means having, with
respect to a security or group of securities, the power to control or direct the voting or
disposition of Voting Securities, as determined by Rule 13d-3 under the Exchange Act.
(iii) “Non-Control Transaction” means a Merger whereby (A) the individuals who were the
president, chief executive officer and the chief financial officer of the Guarantor hold
such respective positions with, and individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for the Merger, constitute at
least a majority of the members of the board of directors of, the surviving corporation and
(B) either (1) fifty percent (50%) or more of the combined
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voting power of the then outstanding voting securities of the surviving corporation is
Beneficially Owned directly by the Beneficial Owners of the Guarantor’s Voting Securities
prior to the Merger or (2) the president, chief executive officer and/or chief financial
officer of the Company, as a result of such Merger, acquire (or their Affiliates acquire)
fifty percent (50%) or more of the combined voting power of the then outstanding voting
securities of the surviving corporation.
To the extent necessary to avoid adverse federal income tax consequences to Executive,
this definition of Change in Control is intended to comply with the definition of change in
control under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as
in effect from time to time and, to the extent that the above definition does not so comply,
such definition shall be void and of no effect and, to the extent required to ensure that
this definition complies with the requirements of Section 409A of the Code, the definition
of such term set forth in regulations or other regulatory guidance issued under Section 409A
of the Code by the appropriate governmental authority is hereby incorporated by reference
into and shall form part of this Agreement as fully as if set forth herein verbatim and the
Agreement shall be operated in accordance with the definition prescribed in such regulations
or other regulatory guidance.
“Average Annual Bonus” shall mean the average annual bonus earned by the Executive
pursuant to any annual bonus plan maintained by the Company in which the Executive
participated in respect of any of the three (3) consecutive calendar years ending
immediately prior to the calendar year in which occurs the last event that gives Executive
the right to payments under this Section 10(a); provided, however, that if only one bonus is
earned by the Executive in the applicable three-year period, such bonus shall be deemed to
be the Average Annual Bonus.
(b) Gross-Up Payment. If any payment or distribution by the Company or any of its affiliates,
or any acceleration of such payment or vesting of the stock options or long-term incentives, with
respect to or for the benefit of Executive, whether paid or payable or distributed or distributable
under this Agreement or under any other agreement, policy, plan, program or arrangement, or the
lapse or termination of any restriction under any agreement, policy, plan, program or arrangement
(a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code by reason of
being considered contingent on a change in ownership or control of the Company, with the meaning of
Section 280G of the Code, or to any similar tax imposed by state or local law, or any interest or
penalties with respect to such tax (such tax or taxes, together with any interest or penalties
being hereafter collectively referred to as the “Excise Tax”), then Executive shall be entitled to
receive an additional payment or payments (collectively, a “Gross-Up Payment”). The Gross-Up
Payment will be in an amount such that, after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any income tax or Excise Tax
imposed on the Gross-Up Payment, Executive retains an amount equal to the Payment before any Excise
Tax is imposed. Any Gross-Up Payment shall be due and payable to the Executive thirty (30) days
prior to the due date of any Excise Tax.
(i) Scale-Back Agreement. Notwithstanding the foregoing, if no Excise Tax would apply
if the aggregate Payments were reduced by three percent (3%), then the
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aggregate Payments shall be reduced by the amount necessary to avoid application of the
Excise Tax, in such manner as the Executive shall direct, and no Gross-Up Payment will be
made.
(ii) Determination of Parachute Payments or Gross-Up. Any determination of the amount
of Payments or Gross-Up required to be made under this Agreement shall be made in writing by
a certified public accountant of the Executive’s choosing, whose determination shall be
conclusive and binding upon the Executive and the Company for all purposes. For this
purpose, the accountant may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. The Company and Executive shall promptly
furnish to the accountant such information and documents as the accountant may reasonably
request in order to make a determination hereunder. The Company shall bear the fees of the
accountant and all costs the accountant may reasonably incur in connection with any
calculations contemplated hereunder. The accountant shall be required to provide a detailed
determination to the Company and the Executive within thirty (30) days after the date of
receipt of all relevant information.
(iii) Challenge by the IRS. If federal, state and local income or other tax returns
filed by Executive are consistent with the determination of the accountant under paragraph 4
above, and the Internal Revenue Service or any other taxing authority asserts a claim or
notice of deficiency (referred to in this Section as a “claim”) against the Executive that,
if successful, would require the payment by the Executive of an Excise Tax, the Company
shall be obligated to make the Gross-Up Payment set forth above, provided that the Executive
(i) notifies the Company within ten (10) business days of the claim; (ii) does not pay such
claim prior to the earlier of (1) the expiration of the thirty (30) calendar-day period
following the date on which he gives such notice to the Company and (2) the date that any
payment of amount with respect to such claim is due. If the Company notifies Executive in
writing prior to the expiration of such period that it desires to contest such claim,
Executive will:
| (A) | Provide the Company with any written records or documents in his or her possession relating to such claim reasonably requested by the Company; | ||
| (B) | Take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company; | ||
| (C) | Cooperate with the Company in good faith in order to effectively contest such claim, which may include the payment of an amount advanced by the Company and assertion of claim for refund; and |
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| (D) | Permit the Company to participate in any proceedings relating to such claim; |
provided, however, that the Company will bear and pay directly all costs and expenses
(including interest and penalties) incurred in connection with such contest and will
indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax
or income tax, including interest and penalties with respect thereto, imposed as a result of
such contest and any such payments. If the Company directs Executive to pay the tax
claimed, or otherwise fails to contest the claim as described above, the Company will
immediately pay to Executive the amount of the deficiency payment claimed by the IRS to be
due, including, but not limited to, any interest, penalty or Excise Tax due on such
deficiency (such payments to be collectively referred to as the “Deficiency Payment”) and
shall also pay to the Executive a Gross-Up Payment in an amount necessary to pay the income
tax liability of the Executive on the Deficiency Payment and the Gross-Up Payment.
(iv) Dispute Resolution. The Company and Executive agree that any dispute regarding
the interpretation or enforcement of this Agreement shall be decided by confidential, final
and binding arbitration rather than by litigation in court, trial by jury or other forum.
Executive and Company agree that in any dispute resolution proceedings arising out of this
Agreement, the Company shall be responsible for all reasonable attorney’s fees and costs
incurred by Executive, not to exceed $50,000 in connection with the resolution of the
dispute in addition to any other relief granted.
11. No Mitigation; Limited Offset. The Company agrees that, if Executive’s employment
with the Company terminates during the Term, Executive is not required to seek other employment or
to attempt in any way to reduce any amounts payable to Executive by the Company pursuant to this
Agreement. Further, the amount of any payment or benefit provided for in this Agreement shall not
be reduced by any compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive
to the Company (unless such amount is evidenced by a promissory note signed by the Executive), or
otherwise.
12. Remedies. With respect to each and every breach or violation or threatened
breach or violation by Employee of Section 9, the Company, in addition to all other remedies
available at law or in equity, including specific performance of the provisions thereof, shall be
entitled to enjoin the commencement or continuance thereof and may, with notice to Employee, but
without the necessity of posting a bond or otherwise, apply to any court of competent jurisdiction
for entry of an immediate restraining order or injunction. The Company may pursue any of the
remedies described in this Section 12 concurrently or consecutively in any order as to any such
breach or violation, and the pursuit of one of such remedies at any time will not be deemed an
election of remedies or waiver of the right to pursue any of the other of such remedies.
13. Severability. The provisions of this Agreement are severable, and any judicial
determination that one or more of such provisions, or any portion thereof, is invalid or
unenforceable shall not affect the validity or enforceability of any other provisions, or portion
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thereof, but rather shall cause this Agreement to first be construed in all respects as if
such invalid or unenforceable provisions, or portions thereof, were modified to terms which are
valid and enforceable; provided, however, that if necessary to render this Agreement enforceable,
it shall be construed as if such invalid or unenforceable provisions, or portions thereof, were
omitted.
14. Successors. This Agreement is personal to the Executive and shall not be
assignable by the Executive without the prior written consent of the Company. This Agreement shall
inure to the benefit of and be binding upon the Company and its successors and assigns.
15. Governing Law. The validity, interpretation and performance of this Agreement and
all rights and obligations of the parties hereunder shall be governed by and construed under the
laws of the State of Texas.
16. Notices. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested, postage prepaid,
addressed, if to Executive, to the address inserted below the Executive’s signature on the final
page hereof and, if to the Company, to the address set forth below, or to such other address as
either party may have furnished to the other in writing in accordance herewith, except that notice
of change of address shall be effective only upon actual receipt:
To the Company:
WCA Management Company, L.P.
Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxx Xxxxx, Xx.
Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxx Xxxxx, Xx.
17. Amendment. This Agreement may not be amended or modified other than by a written
agreement executed by the parties hereto or their respective successors, assigns or legal
representatives.
18. Miscellaneous. No waiver by either party hereto at any time of any breach by the
other party hereto of, or of any lack of 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. This Agreement supersedes
any other agreements or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either party, including, without limitation, any
employment memorandum, memorandum of understanding, or severance arrangements. Captions and
Section headings in this Agreement are provided merely for convenience and shall not affect the
interpretation of any of the provisions herein.
19. Guarantee By WCA Waste Corporation. The Guarantor hereby guarantees all of
the obligations of the Company under this Agreement.
20. Compliance with Code Section 409A. This Agreement is intended to comply with the
requirements of Section 409A of the Code and, as a result, this Agreement (i) shall automatically
be amended to the extent necessary to incorporate any provisions required to
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ensure such compliance (which the Parties hereby agree are hereby adopted, approved, consented
to, ratified and incorporated herein by reference) and (ii) shall be construed, interpreted and
operated in a manner that will ensure such compliance. Without limiting the scope of the preceding
provisions of this Section 20, to the extent that the Executive is a key employee (as defined in
Section 416(i) of the Code without regard to paragraph 5 thereof) at any time prescribed under
regulations or other regulatory guidance issued under Section 409A of the Code, no distribution or
payment that is subject to Code Section 409A shall be made under this Agreement on account of the
Executive’s separation from service with the Company (at any time when the Executive is deemed
under regulations or other regulatory guidance issued under Code Section 409A to be a specified
employee described in Code Section 409A and regulations or other regulatory authority issued
thereunder and any stock of the Company is publicly traded on an established securities market or
otherwise) before the date that is the first day of the month that occurs six months after the date
of his separation from service (or, if earlier, the date of death of the Executive or any other
date permitted under regulations or other regulatory guidance issued under Code Section 409A).
The parties have executed this Employment Agreement as of the date first set forth above.
| WCA MANAGEMENT COMPANY, L.P. | ||||||||||
| By: | WCA Management General, Inc. | |||||||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||||||||
| Printed Name: | Xxxxxx X. Xxxxxxx | |||||||||
| Title: | President | |||||||||
| Its: | General Partner | |||||||||
| WCA WASTE CORPORATION | ||||||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||||||
| Printed Name: | Xxxxxx X. Xxxxxxx | |||||||
| Title: | President | |||||||
| EXECUTIVE: | ||||||||
| By: | /s/ Xxx X. Xxxxx, Xx. | |||||||
| Printed Name: | Xxx X. Xxxxx, Xx. | |||||||
| Title: | Chairman | |||||||
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