Exhibit 10.1
WMX TECHNOLOGIES, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") dated as
of this 7th day of June, 1996, between WMX TECHNOLOGIES, INC., a Delaware
corporation (hereinafter referred to as the "Company"), and XXXXXXX X. XXXXXX
(hereinafter referred to as the "Executive"):
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Executive has previously served and is serving as President of
the Company; and
WHEREAS, the Board of Directors of the Company has also elected the
Executive as Chief Executive Officer of the Company effective as of the date
hereof; and
WHEREAS, the Executive has developed extensive experience with respect to
the management and operations of the Company which it considers extremely
valuable to the continued prosperity of the Company; and
WHEREAS, the Company wishes to adequately compensate the Executive and to
ensure that the Company will continue to have the Executive available to perform
for the Company duties as President and Chief Executive Officer for the Company;
and
WHEREAS, the Company and the Executive have entered into a prior employment
agreement dated as of September 1, 1986 (the "Prior Agreement") and the parties
hereto desire to amend and restate the Prior Agreement in its entirety in order
to reflect the election of the Executive to the additional position of Chief
Executive Officer; and
WHEREAS, the Company and the Executive desire to set forth in this
Agreement the terms, conditions and obligations of the parties with respect to
such employment and this Agreement is intended by the parties to supersede all
previous agreements and understandings, whether written or oral, including the
Prior Agreement, concerning such employment.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive effective as of the
date of this Agreement and the Executive hereby accepts employment as President
and Chief Executive Officer of the Company upon the terms and conditions
hereinafter set forth. The Executive shall perform such duties and
responsibilities for the Company which are commensurate with his offices as may
be assigned him by the Company's Board of Directors.
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As President and Chief Executive Officer, the Executive shall be supervised by
the Chairman of the Board of the Company. Incident to the performance of such
duties, the Executive shall be provided by the Company with office space,
facilities and secretarial assistance commensurate with that currently being
provided to the Executive.
2. TERM. Subject only to the provisions hereof relating to "termination for
cause" hereinafter set forth in Subsection 6(b), or the Executive's voluntary
termination under Subsection 6(f) hereof, the term of the Executive's employment
hereunder (herein the "Term") shall be for a period beginning on the date hereof
and ending on June 6, 2001. Subject to the provisions of Subsection 6(c) hereof,
on June 7, 1997, and on each successive June 7, the Term of this Agreement shall
be extended for a term of five (5) years from such June 7.
3. COMPENSATION. (a) The Company agrees to pay the Executive during the
Term a minimum annual salary of One Million Two Hundred Fifty Thousand Dollars
($1,250,000.00). The salary shall be payable at intervals not less often than
semi-monthly. All adjustments to the Executive's salary and all aspects of the
Employee's incentive or performance compensation shall be established by the
Company's Board of Directors or a duly authorized committee thereof (the
"Compensation Committee"). The Executive shall also receive such benefit and
perquisites (the "Benefits") which have been made available to executives of the
Company including, without limitation, incentive compensation, loans, awards,
insurance, stock options, stock purchase plans, benefits from qualified plans or
non-qualified plans or other benefit plans (including group life insurance and
severance pay plans or arrangements) now or hereafter existing which are adopted
by the Company for the benefit of its employees generally and for the benefit of
the Company's principal executive officers, all such Benefits to be provided in
such amounts as may be determined from time to time by the Board or the
Compensation Committee.
(b) Concurrently with the execution of this Agreement, the
Compensation and Stock Option Committee has granted to the Executive options to
purchase 350,000 shares of the Company's common stock under the Company's 1992
Stock Option Plan.
(c) In addition to all life insurance generally available to the
employees and executives of the Company, the Company and the Executive's
designated trustee shall enter into a split dollar life insurance arrangement
which shall provide the Executive's life insurance trust with a death benefit of
approximately Ten Million Dollars assuming an insurance dividend rate of 8.5%.
If the Executive is in the employ of the Company at age 60 or if the Executive
is disabled under Subsection 6(a) or is terminated by the Company pursuant to
Subsections 6(c) or 6(d) hereof, the Company covenants and agrees to pay all
premiums required to be paid by the Company on such split dollar life insurance
until the policy is fully paid up. In the event the Executive elects to
terminate service prior to age 60 under Subsections 6(c) or 6(f) or is
terminated by the Company prior to age 60 under Subsection 6(b), the Executive
shall only receive such paid up life insurance as may be purchased with the
Executive's cash value in the policy at the time of such termination. The
economic terms of such insurance are summarized on
2
Exhibit A attached hereto. The assumed insurance dividend rate of 8.5% is not
guaranteed and may be higher or lower in future years. The Executive's life
insurance trust will be responsible for paying the annual premium attributable
to the economic benefit for the life insurance coverage provided to the trustee
of the Executive's life insurance trust. The Company shall pay to the Executive
an annual bonus equal to the premium cost paid by the trustee for such economic
benefit.
4. EXTENT OF SERVICE. Except as provided in Subsection 6(d) hereof, during
the Term the Executive shall devote such time, attention, and energy to the
business of the Company as the Company's Board of Directors shall reasonably
require and the Executive shall not be engaged in any other business activity
pursued for gain, profit, or other pecuniary advantage which activity interferes
with the Executive's duties and responsibilities provided for herein.
5. CONFIDENTIAL INFORMATION. The Executive acknowledges that in his
employment he is or will be making use of, acquiring or adding to the Company's
confidential information which includes, but is not limited to, memoranda and
other materials or records of a proprietary nature; records and policy matters
relating to finance, personnel, management, and operations. Therefore, in order
to protect the Company's confidential information and to protect other employees
who depend on the Company for regular employment, the Executive agrees that he
will not, in any way utilize any of said confidential information except in
connection with his employment by the Company, and except in connection with the
business of the Company he will not copy, reproduce, or take with him the
original or any copies of said confidential information and will not disclose
any of said confidential information to anyone.
6. TERMINATION.
(a) Death or Disability. If the Executive should become physically or
mentally disabled and unable to perform duties hereunder for a continuous period
in excess of ninety (90) days (in the reasonable opinion of the Board of
Directors of the Company), which event shall result in the termination of the
Executive's employment with the Company, or if the Executive should die while an
employee of the Company, the Company shall, as of the date of death or
disability, begin to pay an annual amount of $2,500,000 for the balance of the
then-current Term. Such amount shall be payable at intervals not less frequently
than monthly. The foregoing payments shall be made to the Executive, or in the
event of the Executive's death, to such beneficiary as the Executive may
designate in writing to the Company for that purpose, or if the Executive has
not so designated, then to the personal representative of the estate of the
Executive. In the event of the disability of the Executive during the Term, the
Company shall make such additional payments to the Executive as may be necessary
to ensure that at the earliest payment date under the Company's Supplemental
Executive Retirement Plan ("SERP") the Executive will receive an unreduced
benefit under the SERP based on credited service of the greater of 30 years or
actual service. In the event of the death of the Executive while an employee of
the Company, his surviving spouse, if any, will receive an unreduced surviving
3
spouse's benefit from the SERP beginning at the earliest payment date under the
SERP based on the greater of 30 years of credited service or the Executive's
actual service prior to death. This subsection is not to be deemed a limitation
of the Executive's benefits under any death or disability plan currently in
effect.
(b) Termination for Cause. Except with respect to the provisions of
Subsections 6(a), 6(d), 6(e), and 6(f), it is the intention of the parties
hereto that the only other events which shall create in the Company any right to
terminate the Executive's employment under this Agreement prior to the
expiration of the Term shall be: (i) the commission of fraud, embezzlement or
theft by the Executive in connection with the Executive's duties; (ii)
intentional wrongful damage to property of the Company and/or its subsidiaries
by the Executive; (iii) intentional wrongful disclosure by the Executive of any
secret process or confidential information of the Company and/or its
subsidiaries; or (iv) intentional violation of the Executive's covenant not to
compete contained in Section 7 hereof. In the event of Termination for Cause,
all of the obligations of the Company shall terminate forthwith.
(c) Optional Termination. On or before June 7 of any year, either the
Company or Executive may give the other party hereto notice in writing stating
that the Term shall not be extended beyond a period of five (5) years from such
June 7, and upon the receipt of such notice the Term shall end on the June 6
five (5) years after such June 7.
(d) Termination by Company. If the Company terminates this agreement
for any reason other than those specified in Subsections 6(b) or 6(c), or in the
event that:
(i) the Company shall breach any of its obligations under this
Agreement;
(ii) the Executive is removed from the office of President and
Chief Executive Officer of the Company or is not
re-elected to the office of President and Chief Executive
Officer of the Company; or
(iii) the nature and scope of the Executive's authority, powers,
functions, duties or reporting obligations are materially
reduced or adversely changed without the Executive's prior
consent;
this Agreement may be terminated by either party by delivering written notice of
such termination to the other party, in which case the Term shall expire five
(5) years from the date of such written notice.
During the remainder of the Term, the Executive shall continue as an
employee but without regularly assigned duties. The Executive shall make himself
available for consultation and special projects at times mutually convenient to
the Company and the Executive. The Executive will not be required during the
remainder of the Term to work more than twenty (20)
4
hours a month or more than ten (10) months a year and would not be required
without his consent to pursue such duties as would require overnight travel for
more than one day at a time. During the remainder of the Term, the Executive may
engage in other business opportunities except as are prohibited under Section 7
hereof.
During the remainder of the Term, the Executive (or in the event of his
death, the Executive's beneficiary) shall be entitled to an annual payment of
$2,500,000 payable at intervals not less frequently than monthly. Such amount
shall be in lieu of all salary, bonuses or incentive or performance based
compensation for the remainder of the Term. However, the Executive and his
family shall continue to participate in all employee welfare benefit plans
generally available to employees and executives of the Company in accordance
with the terms of such welfare benefit plans, and all service earned by such
Executive during the remainder of the Term shall be credited for participation,
vesting and benefit accrual under all employee pension benefit plans maintained
by the Company to which the Executive is entitled to participate in accordance
with their terms, including without limitation the SERP.
(e) Change of Control.
(i) For the purposes of this Subsection 6(e), "Change of
Control" shall mean the occurrence at any time during the
Term of any of the following events:
(A) The Company is merged or consolidated or reorganized
into or with another corporation or other legal
person and as a result of such merger, consolidation
or reorganization less than 75% of the outstanding
voting securities or other capital interests of the
surviving, resulting or acquiring corporation or
other legal person are owned in the aggregate by the
stockholders of the Company immediately prior to such
merger, consolidation or reorganization;
(B) The Company sells all or substantially all of its
business and/or assets to any other corporation or
other legal person, less than 75% of the outstanding
voting securities or other capital interests of which
are owned in the aggregate by the stockholders of the
Company, directly or indirectly, immediately prior to
or after such sale;
(C) There is a report filed on Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report)
each as promulgated pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act") disclosing
that any person (as
5
the term "person" is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of 25%
or more of the issued and outstanding shares of
voting securities of the Company; or
(D) During any period of two consecutive years,
individuals who at the beginning of any such period
constitute the Directors of the Company cease for any
reason to constitute at least a majority thereof
unless the election, or the nomination for election
by the Company's stockholders, of each new Director
of the Company was approved by at least two-thirds of
such Directors of the Company then still in office
who were Directors of the Company at the beginning of
any such period.
(ii) In the event of a Change of Control, the Executive may
elect at any time during the Term to terminate this
Agreement and receive, in lieu of base compensation a lump
sum payment equal to three (3) times the average of the
Executive's annual compensation (including bonuses) from
the Company for the five (5) calendar years ending prior
to the date of the Change of Control. Such amount shall be
paid to the Executive within thirty (30) days after the
date the Executive notifies the Company in writing of his
election to terminate this Agreement pursuant to this
Subsection 6(e). In the event that the Executive does not
elect to terminate this Agreement and elect the lump sum
payment provided herein, the provisions of Subsection 6(d)
shall remain in effect.
(iii) If tax is imposed pursuant to Section 4999 of the Internal
Revenue Code, or successor provision of like import (the
"Excise Tax") on the payment due under Subsection 6(d)
hereof or this Subsection 6(e) (the "Payment"), the
Executive shall be paid an additional amount ("Gross Up")
no later then 30 days prior to the date such Excise Tax is
due such that the net amount retained by the Executive
after deduction of the Excise Tax on the Payment and any
federal or state income taxes on the Payments shall be
equal to the Payments. For the purpose of determining the
Gross Up, the Executive shall be deemed to pay federal and
state income taxes at the highest marginal rate of
taxation in the calendar year in which the Payment or
Gross Up is to be made. The opinion of whether such Excise
Tax is payable and the amount thereof shall be based
6
upon a "substantial authority opinion" of tax counsel
selected by the Company and reasonably acceptable to the
Executive. If such opinion is not finally accepted by the
IRS upon audit, then appropriate adjustments shall be
computed (with Gross Up) by tax counsel based upon the
final amount of Excise Tax so determined. The amount shall
be paid by the appropriate party in one lump cash sum
within 30 days of such computation.
(iv) Upon electing to terminate this Agreement pursuant to this
Subsection 6(e), the Executive shall resign as an officer,
director and employee of the Company and shall not be
entitled to participate in any of the Benefits described
in Subsection 3(a) which terminates upon termination of
service with the Company. The Executive will be entitled
to all Benefits which by their terms, provide benefits
upon or after termination of employment, including but not
limited to, qualified and non-qualified pension benefit
plans, deferred compensation plans, severance pay plans
and retirement welfare benefit plans.
(f) Voluntary Termination. If during the Term the Executive should
voluntarily terminate his employment with the Company for reasons other than
described in Subsection 6(d) hereof, the obligations of the Company under this
Agreement shall terminate forthwith, other than to (i) pay base salary to the
date of termination, (ii) pay all bonuses or incentive compensation earned to
the date of termination and (iii) pay or make available to the Executive all
Benefits which by their terms or under applicable law survive the voluntary
termination of the Executive; and the Executive shall remain bound by his
covenant not to disclose confidential information under Section 5 hereof and his
covenant not to compete under Section 7 hereof.
7. Covenant Not to Compete. During the Term of this Agreement, and for a
period of three years after the end of the Term, the Executive shall not,
directly or indirectly, own, manage, operate, join, control or participate in or
be connected with, as an officer, employee, partner, joint venturer, stockholder
or otherwise, any business, individual, partnership, firm or corporation
(collectively "Entity") which is at the time engaged in a business which is,
directly or indirectly, at the time in competition with the business of the
Company or any subsidiary or affiliate (as defined in the General Rules and
Regulations promulgated under the Securities Exchange Act of 1934) thereof.
Nothing herein, however, shall prohibit the Executive from acquiring any
securities listed on a national securities exchange or quoted in the daily
listing of over-the-counter market securities, provided that any one time he and
members of his immediate family do not own more than one percent (1%) of any
voting securities of any such Entity.
8. NOTICES. Any notice required or permitted to be given under this
Agreement
7
shall be in writing and shall be deemed to have been given when deposited in the
U.S. mail in a registered, postage prepaid envelope addressed: If to the
Executive, at his address set forth below, and if to the Company, c/o Xxxx X.
Xxxxxxxx, Chairman of the Board, WMX Technologies, Inc., 0000 Xxxxxxxxxxx Xxxx,
Xxx Xxxxx, Xxxxxxxx 00000.
9. ASSIGNMENT. The Executive may not assign his obligations hereunder. The
rights of the Executive and the rights and obligations of the Company hereunder
shall inure to the benefit of and shall be binding upon their respective heirs,
personal representatives, successors and assigns.
10. MISCELLANEOUS.
(a) This Agreement shall be subject to and governed by the laws of the
State of Illinois.
(b) Failure to insist upon strict compliance with any provisions
hereof shall not be deemed a waiver of such provisions or any other provision
hereof.
(c) This Agreement may not be modified except by an agreement in
writing executed by the parties hereto.
(d) The invalidity or unenforceability of any provision hereof shall
not affect the validity or enforceability of any other provision.
(e) This Agreement shall supersede prior employment agreements or
understandings, written or oral, with Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
WMX TECHNOLOGIES, INC.
By /s/ Xxxx X. Xxxxxxxx
_________________________________
Chairman of the Board
/s/ Xxxxxxx X. Xxxxxx
____________________________________
Xxxxxxx X. Xxxxxx
Address:
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EXHIBIT A
SPLIT DOLLAR PLAN
Prepared For
WMX TECHNOLOGIES INC.
XXXXXXX X. XXXXXX Age 52 Page 1
$10,364,507 Estate CompLife Plan (Quik Pay Plus) $322,275.00 Initial Annual Premium
$5,000,000 Basic Amount $146,000.00 Additional Premium
$5,000,000 Additional Protection
Dividends initially used to purchase paid-up additions
This Illustration assumes payment of all premiums when due. Policy paid-up at age 100.
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Corporate Cumulative
Annual Corporate Executive Cumulative
Split Split Corporate Corporate Annual Executive Executive Executive
Dollar Dollar Death Cash Total After Tax After Tax Death Cash
Year Age Payment Payment Benefit Value Bonus Cost Cost Benefit Value
------------------------------------------------------------------------------------------------------------------------------------
1 52 306,887 306,887 306,887 153,146 15,388 6,155 6,155 10,057,620 0
2 53 305,804 612,691 612,691 423,754 16,471 6,588 12,744 10,104,851 0
3 54 304,424 917,115 917,115 716,717 17,851 7,140 19,884 10,142,499 0
4 55 302,746 1,219,861 1,219,861 1,034,775 19,529 7,812 27,696 10,171,359 0
5 56 300,769 1,520,631 1,520,631 1,374,115 21,506 8,602 36,298 10,192,206 0
6 57 298,598 1,819,228 1,819,228 1,738,405 23,677 9,471 45,769 10,205,683 0
7 58 295,926 2,115,155 2,115,155 2,115,155 26,349 10,540 56,308 10,212,688 14,232
8 59 292,859 2,408,013 2,408,013 2,408,013 29,416 11,767 68,075 10,213,999 141,787
9 60 289,090 2,697,104 2,697,104 2,697,104 33,185 13,274 81,349 10,210,674 304,840
10 61 286,876 2,983,979 2,983,979 2,983,979 35,399 14,160 95,508 10,201,514 504,214
11 62 284,788 3,268,767 3,268,767 3,268,767 37,487 14,995 110,503 10,186,729 744,566
12 63 282,625 3,551,392 3,551,392 3,551,392 39,650 15,860 126,363 10,166,745 1,026,478
13 64 280,287 3,831,679 3,831,679 3,831,679 41,988 16,795 143,159 10,142,089 1,351,170
14 65 277,777 4,109,455 4,109,455 4,109,455 44,498 17,799 160,958 10,113,276 1,720,957
15 66 274,996 4,384,451 4,384,451 4,384,451 47,279 18,912 179,870 10,080,909 2,140,325
16 67 271,644 4,656,095 4,656,095 4,656,095 50,631 20,252 200,122 10,045,863 2,614,549
17 68 267,424 4,923,519 4,923,519 4,923,519 54,851 21,940 222,062 10,009,282 3,149,677
18 69 258,342 5,181,860 5,181,860 5,181,860 63,933 25,573 247,636 10,585,002 3,742,842
19 70 246,100 5,427,961 5,427,961 5,427,961 76,175 30,470 278,106 11,285,150 4,396,177
20 71 230,339 5,658,300 5,658,300 5,658,300 91,936 36,774 314,880 12,033,505 5,113,755
21 72 210,097 5,868,396 5,868,396 5,868,396 112,178 44,871 359,751 12,835,047 5,723,482
22 73 -5,868,396 0 0 0 0 0 359,751 10,337,326 6,052,675
23 74 0 0 0 0 0 0 359,751 10,548,625 6,397,460
24 75 0 0 0 0 0 0 359,751 10,780,669 6,758,549
25 76 0 0 0 0 0 0 359,751 11,033,964 7,136,457
------------------------------------------------------------------------------------------------------------------------------------
(See Specifications Pages for pertinent information)
*Illustrated values and benefits include dividends. Illustrated dividends reflect current (1996 scale) claim, expense and
investment experience and are not estimates or guarantees of future results. Dividends actually paid may be larger or smaller than
those illustrated. This illustration does not reflect that money is paid and received at different times. 7.39% 1996 variable rate
loan provision.
NP S/N Standard Plus Prepared by Xxxxxx X. Xxxxxx, CLU, ChFC 7/03/96
Illustration No. 1200-LRSHD-105847 The Northwestern Mutual Life - Milwaukee (12.0)
EXHIBIT A
SPLIT DOLLAR PLAN
Prepared For
WMX TECHNOLOGIES Inc.
XXXXXXX X. XXXXXX. Age 52 Page 2
$10,364,507 Estate CompLife Plan (Quik Pay Plus) $322,275.00 Initial Annual Premium
$ 5,000,000 Basic Amount $ 146,000.00 Additional Premium
$ 5,000,000 Additional Protection
Dividends initially used to purchase paid-up additions
This illustration assumes payment of all premiums when due. Policy paid-up at age 100.
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Corporate Cumulative
Annual Corporate Executive Cumulative
Split Split Corporate Corporate Annual Executive Executive Executive
Dollar Dollar Death Cash Total After Tax After Tax Death Cash
Year Age Payment Payment Benefit Value Bonus Cost Cost Benefit Value
---------------------------------------------------------------------------------------------------------------------------------
26 77 0 0 0 0 0 0 359,751 11,308,269 7,532,052
27 78 0 0 0 0 0 0 359,751 11,602,937 7,945,982
28 79 0 0 0 0 0 0 359,751 11,916,893 8,379,287
29 80 0 0 0 0 0 0 359,751 12,249,819 8,833,002
30 81 0 0 0 0 0 0 359,751 12,602,879 9,308,647
31 82 0 0 0 0 0 0 359,751 12,978,369 9,807,667
32 83 0 0 0 0 0 0 359,751 13,379,596 10,331,612
33 84 0 0 0 0 0 0 359,751 13,810,228 10,882,024
34 85 0 0 0 0 0 0 359,751 14,272,706 11,460,853
35 86 0 0 0 0 0 0 359,751 14,769,038 12,070,134
36 87 0 0 0 0 0 0 359,751 15,299,877 12,712,211
37 88 0 0 0 0 0 0 359,751 15,866,102 13,390,887
38 89 0 0 0 0 0 0 359,751 16,468,716 14,110,625
39 90 0 0 0 0 0 0 359,751 17,109,353 14,878,315
40 91 0 0 0 0 0 0 359,751 18,790,842 15,703,208
41 92 0 0 0 0 0 0 359,751 18,517,484 16,598,858
42 93 0 0 0 0 0 0 359,751 19,296,679 17,584,862
43 94 0 0 0 0 0 0 359,751 20,138,763 18,689,034
44 95 0 0 0 0 0 0 359,751 21,064,139 19,950,682
45 96 0 0 0 0 0 0 359,751 22,105,557 21,422,576
46 97 0 0 0 0 0 0 359,751 23,314,798 23,173,965
47 98 0 0 0 0 0 0 359,751 24,767,310 25,291,785
48 99 0 0 0 0 0 0 359,751 26,569,257 27,624,591
---------------------------------------------------------------------------------------------------------------------------------
(See Specifications Pages for pertinent information)
* Illustrated values and benefits include dividends. Illustrated dividends reflect current (1996 scale) claim, expense and
investment experience and are not estimates or guarantees of future results. Dividends actually paid may be larger or smaller than
those illustrated. This illustration does not reflect that money is paid and received at different times. 7.39% 1996 variable rate
loan provision.
NP S/N Standard Plus Prepared by Xxxxxx X. Xxxxxx, CLU, ChFC 7/30/96
Illustration No. 1200-LRSHD-105847 The Northwestern Mutual Life - Milwaukee (12.0)
