EXHIBIT 4.26
WASTE SERVICES, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is dated as of July 28, 2003 by and
among WASTE SERVICES, INC., a Delaware corporation (the "Company"), CAPITAL
ENVIRONMENTAL RESOURCE INC., an Ontario, Canada corporation ("Capital") and
XXXXXX X. XXXXX (the "Executive"):
WHEREAS, the Company desires to employ Executive in an executive capacity and
Executive desires to enter into the Company's employ upon the terms and subject
to the conditions set forth herein.
WHEREAS, as of the date of this Agreement, the Company is a wholly-owned
subsidiary of Capital.
WHEREAS, Capital intends to effect a reorganization transaction (the "U.S.
Reorganization Transaction") pursuant to which Capital will become a subsidiary
of the Company.
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
herein, the receipt and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. EMPLOYMENT.
The Company shall employ Executive, and Executive shall be employed by the
Company, upon the terms and subject to the conditions set forth in this
Agreement, effective as of September 2, 2003 (the "Effective Date"); PROVIDED,
HOWEVER that as a condition to effectiveness of this Agreement, the Company and
Executive shall have entered into an Indemnification Agreement substantially in
the form of Exhibit A attached hereto.
2. TERM OF EMPLOYMENT.
Unless sooner terminated pursuant to Section 5 below, the period of Executive's
employment under this Agreement (the "Employment Term") shall be a period of two
years beginning on the Effective Date; provided that, beginning on the first
anniversary of the Effective Date, the Employment Term shall be for a continuous
period of one year, such that on any given date thereafter, the Executive's
Employment Term shall always be one year from the date in question.
3. DUTIES AND RESPONSIBILITIES.
(a) Executive shall serve as Executive Vice President and Chief Financial
Officer of the Company and shall report to the Chief Executive Officer of
the Company. In such capacity, Executive shall perform the customary
duties of such positions, along with such other duties as may be assigned
to Executive from time to time by the Chief Executive Officer and/or by
the Board of Directors of the Company (the "Board of Directors") or a duly
authorized committee thereof; PROVIDED HOWEVER that Executive shall have
such responsibility and authority as is normally conferred upon such an
officer.
(b) During the Employment Term, Executive shall devote his full time and
attention during normal business hours to the affairs of the Company and
use his best efforts to perform faithfully and efficiently his duties and
responsibilities; PROVIDED, HOWEVER, that subject to the limitations of
Section 8 hereof and to the prior approval of the Chief Executive Officer
of the Company, Executive may serve on corporate, industry, civic or
charitable Boards or committees as long as such activities do not
interfere with the performance of Executive's responsibilities to the
Company. Executive agrees to act at all times in the best interests of the
Company and to take no action or make any statement, oral or written,
which could reasonably be expected by Executive to injure the Company's
business, financial condition, results of operations, prospects, interests
or reputation.
(c) Executive agrees to comply at all times during the Employment Term with
all applicable policies, rules, codes and regulations of the Company in
effect from time to time, including, without limitation, all applicable
codes of ethics or conduct and all policies regarding trading in the
Company's common stock.
4. COMPENSATION AND BENEFITS.
(a) BASE SALARY. During the Employment Term, the Company shall pay Executive a
base salary at the annual rate of $300,000 USD, or such higher rate as may
be determined from time to time by the Board of Directors or a duly
authorized committee thereof (such amount, as increased from time to time,
the "Base Salary"). Such Base Salary shall be paid on the Company's
regular pay days in accordance with the Company's standard payroll
practice for executive officers, subject only to such payroll and
withholding deductions as may be required by law and other deductions
applied generally to employees of the Company for insurance and other
employee benefit plans. For all purposes under this Agreement, Executive's
Base Salary shall include any amount which is deferred under any
nonqualified plan or arrangement of the Company.
(b) INCENTIVE COMPENSATION.
(i) ANNUAL CASH BONUS. In addition to the Base Salary, Executive shall
be eligible for an annual cash bonus (either pursuant to a bonus or
incentive plan or program of the Company or otherwise) for each
fiscal year during the Employment Term. Executive's target annual
cash bonus will be equal to 80% (the "Target Bonus Rate") of his
Base Salary in effect at the beginning of the relevant fiscal year.
The amount of the annual cash bonus, which may be higher or lower
than the Target Bonus Rate, shall be determined by the Board of
Directors or a duly authorized committee thereof based upon
applicable corporate and individual performance targets established
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by the Board of Directors or such committee in its sole discretion
(the "Annual Bonus"). For all purposes under this Agreement,
Executive's Annual Bonus shall include any amount which is deferred
under any nonqualified plan or arrangement of the Company.
(ii) LONG-TERM OR SUPPLEMENTAL INCENTIVE COMPENSATION. Executive shall be
eligible to participate in any supplemental and/or long-term
incentive compensation plans or programs (which may consist of stock
options, restricted stock, long-term cash awards or other forms of
long-term or supplemental incentive compensation) generally made
available to full-time senior executive officers of the Company.
(c) BENEFIT PLANS.
(i) Executive shall be eligible to participate in and receive benefits
under all retirement, health and welfare benefit plans, programs and
arrangements which are from time to time available to full-time
senior executive officers of the Company in accordance with the
terms and conditions of such plans, programs and arrangements in
effect from time to time. Such benefit plans, programs and
arrangements will include medical, dental and vision benefit plans
and may include, without limitation, life insurance plans,
short-term and long-term disability plans, accidental death
insurance plans, travel accident insurance plans, savings and
retirement plans and pension plans (all such benefit plans, the
"Benefit Plans"). Executive agrees to submit to a physical
examination from time to time as requested by the Company to
facilitate Executive's participation in one or more Benefit Plans.
The Company may terminate or reduce benefits under any such plans,
programs or arrangements to the extent such reductions apply
uniformly to all full-time senior executive officers of the Company,
and Executive's benefits shall be reduced or terminated accordingly.
The Company's obligations under this Section 4(c)(i) are expressly
conditioned on Executive and his family dependents taking all
reasonable actions (including but not limited to enrolling in all
health and welfare benefit programs, plans and arrangements which
are from time to time available to the Company's full-time senior
executive officers as and when Executive and his family dependents
become eligible to participate in such programs, plans and
arrangements) and providing all information as the Company shall
reasonably request and as is necessary for the Company to fulfill
such obligations.
(ii) Executive represents that, as of the Effective Date, he is eligible
under COBRA for the medical, dental and vision insurance benefits
described on Exhibit B attached hereto (the "COBRA Continuation
Benefits") under the group health plans of his former employer (the
"Former Employer") and that he will continue to be eligible for such
benefits until the end of the COBRA health care continuation period
under the Former Employer's group health plans (the "COBRA
Continuation Period"). From the Effective Date until the earlier of
(A) the end of the COBRA Continuation Period and (B) the date on
which Executive becomes eligible for a medical, dental and vision
insurance benefit program of the Company, the Company shall promptly
reimburse Executive, upon written demand by Executive accompanied by
supporting invoices, for all premiums charged by the Former Employer
to Executive for the COBRA Continuation Benefits provided that
Executive and his family dependents timely and properly elect and
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maintain COBRA Continuation Benefits under the Former Employer's
group health plans throughout such period. The Company's obligations
under this Section 4(c)(ii) are expressly conditioned on Executive
and his family dependents taking all reasonable actions (including
but not limited to satisfying all eligibility conditions under COBRA
during the COBRA Continuation Period) and providing all information
as the Company shall reasonably request and as is necessary for the
Company to fulfill such obligations.
(d) VACATION. In addition to normal statutory holidays recognized by the
Company, Executive shall be entitled to the greater of (a) four weeks of
paid vacation for each fiscal year during the Employment Term and (b) such
other amount of paid vacation as may be afforded executive officers under
the Company's policies in effect from time to time ("Vacation Time").
(e) EXPENSE REIMBURSEMENT. The Company shall promptly reimburse Executive for
travel and other out-of-pocket expenses incident to his position in
accordance with the Company's customary practices applicable to full-time
senior executive officers.
(f) REIMBURSEMENT OF CERTAIN TAX EXPENSES. The Company shall, upon written
demand by Executive accompanied by supporting invoices, promptly reimburse
Executive for all costs and expenses (including reasonable legal,
accounting and other advisory fees) incurred by Executive to prepare
responses to an Internal Revenue Service audit of, and to otherwise
defend, his personal income tax return for any year during the Employment
Term or to defend himself in any administrative proceeding or civil
litigation relating to any such tax return, in each case that is
occasioned by or related to any audit by the Internal Revenue Service of
the Company's income tax returns; PROVIDED, HOWEVER, in no event shall the
Company be required to reimburse Executive for costs and expenses in
excess of seventy-five thousand United States dollars ($75,000 USD) in any
given fiscal year pursuant to this Section 4(f).
(g) FRINGE BENEFITS AND PERQUISITES. Executive shall be eligible to
participate in and receive benefits under all fringe benefit plans,
practices, policies and programs of the Company to the same extent, and
subject to the same terms and conditions, as those arrangements are made
available to full-time senior executive officers of the Company.
(h) REIMBURSEMENT OF MOVING COSTS. The Company shall reimburse Executive for
actual and reasonable out-of-pocket costs incurred in Executive's move of
his household goods from his current residence to the Scottsdale, Arizona
area. The Company shall also pay Executive an additional payment (the
"Gross-Up Payment") in an amount which, when combined with the
reimbursement payments retained by Executive after giving effect to the
application of federal and state income taxes on the reimbursement amount,
will result in receipt by Executive of a Gross-Up Payment equal to the
amount of federal and state income taxes imposed on the reimbursements. If
within two (2) years after the Effective Date Executive's employment is
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terminated by the Company without Cause pursuant to Section 5(f) hereof or
by Executive for Good Reason pursuant to Section 5(d) hereof, the Company
shall also reimburse Executive for actual and reasonable out-of-pocket
costs incurred in Executive's move of his household goods from the
Scottsdale, Arizona area back to the area of his current residence, and
shall also make a Gross-Up Payment with respect to any such reimbursement.
5. TERMINATION OF EMPLOYMENT.
Executive's employment under this Agreement may be terminated under any of the
circumstances set forth in this Section 5. Upon termination, Executive (or his
beneficiaries or estate as the case may be) shall be entitled to receive the
compensation and benefits described in Section 6 and, if applicable, Section 7
below.
(a) DEATH. Executive's employment hereunder shall terminate automatically upon
Executive's death.
(b) TOTAL DISABILITY. The Company may terminate Executive's employment
hereunder, by written notice to Executive delivered in accordance with
Sections 5(g) and 16 hereof, upon a determination pursuant to this Section
5(b) that Executive is "Totally Disabled." For purposes of this Agreement,
Executive shall be "Totally Disabled" if, in the good faith determination
of the Board of Directors or a duly authorized committee thereof, based on
sound medical advice, Executive has become physically or mentally
incapable of performing the duties and responsibilities assigned to
Executive under this Agreement without reasonable accommodation and such
incapability endures for a continuous period of one hundred eighty (180)
calendar days or an aggregate of one hundred eighty (180) calendar days in
any calendar year in which event Executive will be considered Totally
Disabled upon the satisfaction of the applicable one hundred eighty (180)
day period. Executive's receipt of disability benefits under the Company's
long-term disability plan shall be deemed conclusive evidence of Total
Disability for purposes of this Agreement; provided, however, that a
determination of Total Disability also may be made by the Board of
Directors or a duly authorized committee thereof as provided above in the
absence of Executive's receipt of such long-term disability benefits.
(c) TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
Executive's employment hereunder for "Cause" at any time, by written
notice to Executive delivered in accordance with Sections 5(g) and 15
hereof.
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(i) For purposes of this Agreement, the term "Cause" shall mean any of
the following: (A) conviction of a crime (including conviction on a
nolo contendre plea) involving the commission by Executive of a
felony or of a misdemeanor involving, in the good faith judgment of
the Board of Directors, fraud, dishonesty or moral turpitude; (B)
Executive's deliberate and continual refusal to perform the duties
and responsibilities assigned to Executive under this Agreement
(other than as a result of vacation permitted under this Agreement,
sickness, illness or injury); (C) fraud or embezzlement by
Executive, determined in accordance with the Company's normal,
internal investigative procedures consistently applied; (D) gross
misconduct or gross negligence by Executive in connection with the
business of the Company or an Affiliate (as defined herein) unless
Executive reasonably believed, in good faith, that his acts or
omissions were in or not opposed to the best interests of the
Company (without intent of Executive to gain therefrom, directly or
indirectly, a profit to which he was not legally entitled); or (E)
any material breach by Executive of any of the provisions of Section
8 of this Agreement or of any provisions of the Confidentiality and
Proprietary Information Agreement (as defined herein).
(ii) Any determination of Cause under this Agreement shall be made by
resolution duly adopted by the affirmative vote of at least
two-thirds of the members of the Board of Directors (not including
Executive if Executive is a member of the Board of Directors) at a
meeting of the Board of Directors called and held for that purpose;
PROVIDED that Executive shall have been given -------- written
notice of such meeting by certified mail at least ten (10) business
days prior to the meeting and shall have been given the opportunity
to be heard by the Board of Directors before such resolution is
passed. The failure by the Company to follow the procedures set
forth in this Section 5(c)(ii) shall result in the termination of
the Executive's employment being deemed to be a termination by the
Company without Cause.
(d) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may terminate his
employment hereunder for Good Reason after delivery by Executive of
written notice to the Company in accordance with Sections 5(g) and 15
hereof within sixty (60) days after the occurrence of a Good Reason Event
(as hereinafter defined). For purposes of this Agreement, "Good Reason"
means the occurrence of any of the following events (each a "Good Reason
Event") without Executive's written consent during the Employment Term:
(i) A change in Executive's responsibilities or titles or any other
action by the Company which represents a material diminution of
Executive's position, status or authority, except in connection with
or as a result of the termination of Executive's employment pursuant
to any provision of this Section 5 (a "Diminution"); PROVIDED,
HOWEVER that such Diminution shall not constitute "Good Reason" or a
"Good Reason Event" if the Company remedies such Diminution within
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ten (10) business days after delivery by Executive of written notice
to the Company in accordance with Section 15 hereof specifying in
reasonable detail the facts and circumstances believed by Executive
to constitute such Diminution.
(ii) A reduction by the Company in Executive's Base Salary.
(iii) A material breach by the Company of Section 4(b) or 4(c) hereof;
PROVIDED, HOWEVER that such a breach shall not constitute "Good
Reason" or a "Good Reason Event" if the Company remedies such breach
within ten (10) business days after delivery by Executive of written
notice to the Company in accordance with Section 15 hereof
specifying in reasonable detail the facts and circumstances believed
by Executive to constitute a material breach of Section 4(b) or
4(c).
(iv) A change of Executive's principal place of employment to a location
outside the Phoenix/Scottsdale metropolitan area.
(v) The failure by the Company to pay Executive any material amount of
his Base Salary, or any material amount of other compensation, that
is due and payable under this Agreement within ten (10) business
days after Executive makes written demand for such amount.
(vi) The failure by the Company to enter into a written agreement with
any entity that purchases all or substantially all of the assets of
the Company or any entity into which the Company is merged (each a
"Successor") pursuant to which such Successor agrees to assume all
of the obligations of the Company under this Agreement at and
effective as of the closing of such sale of assets or merger.
(e) VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate his employment
hereunder without Good Reason at any time during the Employment Term after
providing thirty (30) days' written notice to the Company delivered in
accordance with Sections 5(g) and 15 hereof.
(f) TERMINATION BY THE COMPANY WITHOUT CAUSE. At any time during the
Employment Term, the Company may terminate Executive's employment
hereunder without Cause by written notice to Executive delivered in
accordance with Sections 5(g) and 15 hereof. For purposes of this
Agreement, Executive's employment will be deemed to have been terminated
"Without Cause" if Executive is terminated by the Company for any reason
other than Death pursuant to Section 5(a), Total Disability pursuant to
Section 5(b) or Cause pursuant to Section 5(c).
(g) NOTICE OF TERMINATION. Any termination of Executive's employment by the
Company for Cause pursuant to Section 5(c), without Cause pursuant to
Section 5(f), or as a result of Executive's Total Disability pursuant to
Section 5(b), or by Executive for Good Reason pursuant to Section 5(d),
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shall be communicated by Notice of Termination to the other party hereto
given in accordance with this Agreement. For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of Executive's employment under the provision so
indicated, and (iii) specifies the effective date of termination, if such
date is other than the date of receipt of such notice (which effective
date shall not be (A) less than ten (10) business days after the giving of
such notice in the case of termination by Executive for Good Reason or (B)
more than 15 days after the giving of such notice in all other cases). Any
voluntary termination of Executive's employment by Executive pursuant to
Section 5(e) shall be communicated by written notice to the Company
specifying (i) that Executive wishes to terminate his employment with the
Company pursuant to Section 5(e) hereof and (ii) indicating the effective
date of termination (which effective date shall not be less than 30 days
after the giving of such notice).
6. COMPENSATION AND BENEFITS FOLLOWING TERMINATION OF EMPLOYMENT.
In the event that Executive's employment hereunder is terminated, Executive
shall be entitled to the following compensation and benefits upon such
termination:
(a) COMPENSATION AND BENEFITS PAYABLE FOLLOWING TERMINATION FOR ANY REASON.
The following compensation and benefits shall be payable upon termination
of Executive's employment under this Agreement for any reason:
(i) Executive or his beneficiaries or estate shall be entitled to
receive, within fourteen (14) days after the effective date of
termination, any accrued but unpaid Base Salary for services
rendered by Executive to the Company prior to the date of
termination, any accrued but unpaid expenses required to be
reimbursed under this Agreement, and cash compensation (at a rate
per day equal to the Base Salary divided by the number of business
days in the relevant year) for any accrued Vacation Time that
remained unused by the Executive at the time of termination; and
(ii) Any earned benefits to which Executive (or his beneficiaries or
estate) may be entitled pursuant to the plans, policies and
arrangements referred to in Sections 4(b), 4(c) and 4(g) hereof
shall be determined and paid in accordance with the terms of such
plans, policies and arrangements. In the case of compensation
previously deferred by Executive, all amounts previously deferred
and not yet paid by the Company shall be paid to Executive within
fourteen (14) days after the effective date of termination unless
such payment is inconsistent with the terms of any payment election
made by Executive with respect to such deferred compensation.
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(b) TERMINATION BY REASON OF DEATH. In the event that Executive's employment
is terminated by reason of Executive's death, the Company shall pay
Executive's estate the following compensation and benefits in addition to
the compensation and benefits provided for in Section 6(a) above:
(i) Executive's estate shall be entitled to be paid Executive's Base
Salary at the rate in effect immediately prior to Executive's date
of death on the Company's regular pay days for a period equal to the
remainder of the Employment Term from the effective date of
termination as if his employment had continued until the end of such
period. The Company may purchase insurance to cover all or any part
of the obligations set forth in this Section 6(b)(i) and Executive
agrees to submit to a physical examination from time to time to
facilitate the procurement or renewal of such insurance. Any
proceeds of such insurance paid to Executive or his beneficiaries or
estate shall be considered a portion of the payments required to be
made to Executive pursuant to this Section 6(b)(i) and shall not be
in addition thereto.
(ii) Executive's dependents shall be entitled to continue to receive
medical, dental and vision insurance coverage at least equal in type
and amount to that made available to dependents of full-time senior
executives of the Company immediately prior to Executive's death for
a period equal to the remainder of the Employment Term from the
effective date of termination, or until Executive's dependents
become eligible for employer-provided health insurance benefits from
any other person or business entity (whether or not those health
insurance benefits are comparable to the health insurance benefits
provided by the Company), whichever occurs first. In the event that
participation in any such plan, program or arrangement of the
Company is prohibited, the Company will arrange to provide benefits
substantially similar to those benefits which Executive's dependents
would have been entitled to receive under such plan, program or
arrangement for such period.
(iii) All of Executive's then outstanding options to purchase shares of
the Company's common stock shall be vested and exercisable in
accordance with the terms of the stock option plan of the Company
pursuant to which such options were granted (the "Governing Stock
Option Plan") as then in effect.
(c) TERMINATION BY REASON OF TOTAL DISABILITY. In the event that Executive's
employment is terminated by reason of Executive's Total Disability
pursuant to Section 5(b) hereof, the Company shall pay Executive the
following compensation and benefits in addition to the compensation and
benefits provided for in Section 6(a) above:
(i) Subject to Section 6(c)(ii) below, Executive shall be entitled to be
paid his Base Salary at the rate in effect immediately prior to the
effective date of termination on the Company's regular pay days for
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a period equal to the remainder of the Employment Term from the
effective date of termination as if his employment had continued
until the end of such period.
(ii) Whenever compensation is payable to Executive under Section 6(c)(i)
during a period in which he is partially or totally disabled, and
such disability would (except for the provisions hereof) entitle
Executive to disability income or salary continuation payments from
the Company according to the terms of any plan or program presently
maintained or hereafter established by the Company, the disability
income or salary continuation paid to Executive pursuant to any such
plan or program shall be considered a portion of the payments
required to be made to Executive pursuant to this Section 6(c) and
shall not be in addition thereto. If disability income is payable
directly to Executive by an insurance company under the terms of an
insurance policy paid for by the Company, the amounts paid to
Executive by such insurance company shall be considered a portion of
the payment to be made to Executive pursuant to this Section 6(c)
and shall not be in addition thereto.
(iii) Executive and his dependents shall be entitled to continue to
receive medical, dental and vision insurance coverage at least equal
in type and amount to that made available to full-time senior
executives of the Company immediately prior to the effective date of
termination for a period equal to the remainder of the Employment
Term from the effective date of termination, or until Executive
becomes eligible for employer-provided health insurance benefits
from any other person or business entity (whether or not those
health insurance benefits are comparable to the health insurance
benefits provided by the Company), whichever occurs first. In the
event that participation in any such plan, program, or arrangement
of the Company is prohibited, the Company will arrange to provide
benefits substantially similar to those benefits which Executive
would have been entitled to receive under such plan, program, or
arrangement, for such period.
(iv) All of Executive's then outstanding options to purchase shares of
the Company's common stock shall be vested and exercisable in
accordance with the terms of the Governing Stock Option Plan, as
then in effect.
(d) TERMINATION FOR CAUSE. In the event that Executive's employment is
terminated by the Company for Cause pursuant to Section 5(c) hereof, the
Company shall not be obligated to make any payments to Executive under
this Agreement on or following the effective date of termination, other
than the compensation and benefits provided for in Section 6(a) above.
(e) VOLUNTARY TERMINATION BY EXECUTIVE. In the event that Executive terminates
his employment without Good Reason pursuant to Section 5(e) hereof, the
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Company shall not be obligated to make any payments to Executive under
this Agreement on or following the date of termination, other than the
compensation and benefits provided for in Section 6(a) above.
(f) TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON.
In the event that Executive's employment is terminated by the Company
without Cause pursuant to Section 5(f) hereof or by Executive for Good
Reason pursuant to Section 5(d) hereof, the Company shall pay to Executive
the following compensation and benefits in addition to the compensation
and benefits provided for in Section 6(a) above:
(i) Executive shall be entitled to be paid his Base Salary at the rate
in effect immediately prior to the effective date of termination on
the Company's regular pay days for a period equal to the remainder
of the Employment Term from the effective date of termination as if
his employment had continued until the end of such period.
(ii) Executive and his dependents shall be entitled to continue to
receive medical, dental and vision insurance coverage at least equal
in type and amount to that made available to full-time senior
executives of the Company immediately prior to the effective date of
termination for a period equal to the remainder of the Employment
Term from the effective date of termination, or until Executive
becomes eligible for employer-provided health insurance benefits
from any other person or business entity (whether or not those
health insurance benefits are comparable to the health insurance
benefits provided by the Company), whichever occurs first. In the
event that participation in any such plan, program or arrangement of
the Company is prohibited, the Company will arrange to provide
benefits substantially similar to those benefits which Executive
would have been entitled to receive under such plan, program or
arrangement for such period.
(iii) All of Executive's then outstanding options to purchase shares of
the Company's common stock shall be vested and exercisable in
accordance with the terms of the Governing Stock Option Plan, as
then in effect;
PROVIDED, HOWEVER, that if the Company terminates Executive's employment
without Cause or Executive terminates his employment with the Company for
Good Reason within the one-year period preceding, or within the two-year
period following, a "Change of Control", Executive shall be paid the
compensation and benefits provided for in Section 7 hereof rather than the
compensation and benefits provided for in this Section 6(f).
(g) NO OTHER BENEFITS OR COMPENSATION. Except as may be provided under this
Agreement or under the terms of any Compensation Plans or Benefit Plans in
effect and applicable to Executive on the effective date of termination,
Executive shall have no right to receive any other compensation, or to
participate in any other plan, arrangement or benefit after such
termination and all other obligations of the Company and rights of
Executive under this Agreement shall terminate effective as of the
effective date of termination.
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7. CHANGE OF CONTROL.
(a) RESIGNATION FOLLOWING CHANGE OF CONTROL. If (i) the Company terminates
Executive's employment without Cause or Executive terminates his
employment with the Company for Good Reason and (ii) a "Change of Control"
has occurred within the two-year period preceding, or within the one-year
period following, the effective date of termination, Executive shall be
entitled to the compensation described in this Section 7 in addition to
the compensation and benefits provided for in Section 6(a) above and in
lieu of the compensation and benefits provided for in Section 6(f) above:
(i) a lump sum amount equal to his Base Salary at the rate in effect
immediately prior to the effective date of termination.
(ii) Executive and his dependents shall be entitled to continue to
receive medical, dental and vision insurance coverage at least equal
in type and amount to that made available to full-time senior
executives of the Company immediately prior to the effective date of
termination for a period equal to the remainder of the Employment
Term from the effective date of termination, or until Executive
becomes eligible for employer-provided health insurance benefits
from any other person or business entity (whether or not those
health insurance benefits are comparable to the health insurance
benefits provided by the Company), whichever occurs first. In the
event that participation in any such plan, program, or arrangement
of the Company is prohibited, the Company will arrange to provide
benefits substantially similar to those benefits which Executive
would have been entitled to receive under such plan, program, or
arrangement, for such period.
(iii) All of Executive's then outstanding options to pursuant shares of
the Company's common stock shall be vested and exercisable in
accordance with the terms of the Governing Stock Option Plan as then
in effect.
(b) DEFINITION OF CHANGE OF CONTROL. For purposes of this Agreement, a "Change
of Control" shall be deemed to have occurred upon the happening of any of
the following:
(i) the sale or lease of all or substantially all of the assets of the
Company to any other person or entity other than a direct or
indirect wholly-owned subsidiary or parent of the Company;
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(ii) a merger, amalgamation, consolidation or other reorganization of the
Company with any other entity (other than a direct or indirect
wholly-owned subsidiary or parent of the Company) in which the
Company is not the surviving entity or becomes owned entirely by
another entity, unless at least 50% of the outstanding voting
securities of the surviving or parent corporation, as the case may
be, immediately following such transaction are beneficially held by
the same persons and/or entities that beneficially held the
outstanding voting securities of the Company immediately prior to
such transaction, and such outstanding voting securities are
beneficially held by such persons and/or entities in the same
proportion as such persons and/or entities beneficially held the
outstanding voting securities of the Company immediately prior to
such transaction;
(iii) the acquisition of beneficial ownership, as such term is defined in
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
in a single transaction or series of related transactions (by tender
offer or otherwise), of more than 50% of the voting securities of
the Company by a single person or entity (other than the Company or
any affiliate (as such term is defined in Rule 12b-2 under the
Exchange Act) of the Company (each an "Affiliate"), a trustee or any
other fiduciary or committee of any employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of the stock of the Company) or "group" within the
meaning of Section 13(d)(3) of the Exchange Act, whether through the
acquisition of previously issued and outstanding voting securities
or of voting securities that have not been previously issued, or any
combination thereof;
(iv) the voluntary or involuntary dissolution, liquidation or winding up
of the Company, or the adoption of any resolution with respect
thereto; or
(v) the individuals who constituted the Board of Directors as of the
Effective Date (the "Incumbent Board") ceasing for any reason to
constitute at least a majority of the Board of Directors; provided,
that any person becoming a director whose election or nomination for
election was approved by a majority of the members of the Incumbent
Board or who was elected pursuant to Section 5(a) of the Company's
Certificate of Designations of the Powers, Preferences and other
Special Rights of the Series A Preferred Stock and the
Qualifications, Limitations and Restrictions Thereof shall be
considered, for purposes of this Agreement, a member of the
Incumbent Board; and provided further that, notwithstanding anything
herein to the contrary, a Change of Control shall not be deemed to
have occurred in connection with (i) any public offering of the
common stock of the Company for cash; (ii) any transaction with an
entity or group that includes, is affiliated with or is wholly or
partially controlled by, one or more executive officers of the
Company in office immediately prior to the transaction that would
otherwise constitute a Change of Control; (iii) any capital raising
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transaction (including any investment by one or more private equity
funds) for the purpose of financing acquisitions specifically
identified by the Board of Directors of the Company; or (iv) the
U.S. Reorganization Transaction.
(c) Notwithstanding anything herein to the contrary, to the extent that
Executive has received payments of Base Salary pursuant to Section 6(f)(i)
hereof at a time when a Change of Control occurs, such payments shall be
deducted from the lump sum payment required to be made to Executive
pursuant to Section 7(a)(i) hereof.
8. RESTRICTIVE COVENANTS
(a) COMPETITIVE ACTIVITY. Executive covenants and agrees that at all times
during Executive's employment with the Company, and during the Non-Compete
Period (as defined below), Executive will not, acting alone or in
conjunction with others, without the prior written consent of the Company,
directly or indirectly, engage or participate in, assist, render services
to or for, or have any active interest or involvement in, whether as an
employee, principal, agent, consultant, creditor, lender, advisor,
employer, officer, director, stockholder (excluding holdings by Executive
of up to 3% of the voting stock of any corporation subject to the periodic
reporting requirements of the Exchange Act), partner, proprietor or in any
other individual or representative capacity in or with, (i) any person,
entity or business which competes, directly or indirectly, with the
Company or any Affiliate in any of the business areas or territories in
which the Company or any Affiliate then conducts business, or (ii) any
development opportunity being pursued by the Company during the
Non-Compete Period irrespective of geographic location.
(b) NON-SOLICITATION. Executive covenants and agrees that at all times during
Executive's employment with the Company, and during the Non-Compete
Period, Executive will not, without the prior written consent of the
Company, directly or indirectly (i) induce, solicit or entice any customer
of the Company or any customer of any Affiliate to patronize any person,
business or entity which competes, directly or indirectly, with the
Company or such Affiliate in any of the business areas or territories in
which the Company or such Affiliate then conducts business; (ii) canvass,
solicit or accept any business from any customer of the Company or any
customer of any Affiliate (other than in connection with the performance
by Executive of his duties and responsibilities for the Company in
accordance with this Agreement) in any of the business areas or
territories in which the Company or any Affiliate of the Company then
conducts business; (iii) request or advise any customer of the Company or
any customer of any Affiliate to withdraw, curtail or cancel such
customer's business with the Company or such Affiliate in any of the
business areas or territories in which the Company or any Affiliate of the
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Company then conducts business; (iv) contact, communicate with or solicit
any acquisition prospect of the Company or any acquisition prospect of any
Affiliate (other than in connection with the performance by Executive of
his duties for the Company in accordance with this Agreement); (v)
disclose to any other person, entity or business the names or addresses of
any customer or acquisition prospect of the Company or any customer or
acquisition prospect of any Affiliate (other than as required in
connection with the performance by Executive of his duties for the Company
in accordance with this Agreement); (vi) cause, solicit, entice or induce
any present or future employee of the Company or any present or future
employee of any Affiliate to leave the employ of the Company or such
Affiliate, or to accept employment with, or compensation from, Executive
or any person, entity or business (other than the Company or any
Affiliate) with which Executive is affiliated or by whom Executive is
employed; or (vii) use any customer lists or customer leads, mail,
telephone numbers, printed material or other information obtained from the
Company or any Affiliate or any employee of any of the foregoing (other
than in connection with the performance by Executive of his duties for the
Company in accordance with this Agreement).
(c) NON-DISPARAGEMENT.
(i) Executive covenants and agrees that Executive shall not engage in
any pattern of conduct that involves the making or publishing of
written or oral statements or remarks (including, without
limitation, the repetition or distribution of derogatory rumors,
allegations, negative reports or comments) which are disparaging,
deleterious or damaging to the integrity, reputation or good will of
the Company or any Affiliate or any member of management of the
Company or any Affiliate.
(ii) The Company covenants and agrees that it shall not engage in any
pattern of conduct that involves the making or publishing of written
or oral statements or remarks (including, without limitation, the
repetition or distribution of derogatory rumors, allegations,
negative reports or comments) which are disparaging, deleterious or
damaging to the integrity or reputation of Executive.
(d) PROTECTED INFORMATION. Executive recognizes and acknowledges that
Executive has had and will continue to have access to various confidential
and proprietary information concerning the Company and its Affiliates
which is of a special and unique value. As a condition to commencement of
Executive's employment hereunder, Executive shall execute a
Confidentiality and Proprietary Rights Agreement in substantially the form
of Exhibit C attached hereto (the "Confidentiality and Proprietary Rights
Agreement"). Any breach by Executive of the Confidentiality and
Proprietary Rights Agreement shall be considered a breach of this
Agreement.
(e) NON-COMPETE PERIOD. For purposes of this Agreement, the term "Non-Compete
Period" shall have the following meanings:
(i) in the event (A) Executive's employment hereunder is terminated by
the Company without Cause pursuant to Section 5(f), or by Executive
for Good Reason pursuant to Section 5(d), and (B) a Change of
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Control did not occur within the two-year period preceding, and does
not occur within the one-year period following, the effective date
of termination, the Non-Compete Period shall mean the period
beginning on the effective date of termination and having a duration
equal to the remainder of the Employment Term from the effective
date of termination;
(ii) in the event that (A) Executive's employment hereunder is terminated
by the Company without Cause pursuant to Section 5(f), or by
Executive for Good Reason pursuant to Section 5(d), and (B) a Change
of Control occurred within the two-year period preceding the
effective date of termination, there shall be no Non-Compete Period;
(iii) in the event (A) Executive's employment hereunder is terminated by
the Company without Cause pursuant to Section 5(f), or by Executive
for Good Reason pursuant to Section 5(d), and (B) a Change of
Control occurs within the one-year period following the effective
date of termination, the Non-Compete Period shall mean the period
beginning on the effective date of termination and ending on the
effective date of the Change of Control;
(iv) in the event Executive's employment hereunder is terminated by
Executive voluntarily pursuant to Section 5(e), or by the Company
with Cause pursuant to Section 5(c), the Non-Compete Period shall
mean the period beginning on the effective date of termination and
ending on the first anniversary of the effective date of
termination; and
(v) in the event Executive's employment hereunder is terminated by the
Company upon Death of Executive pursuant to Section 5(a), or upon
the Total Disability of Executive pursuant to Section 5(b), there
shall be no Non-Compete Period.
9. ENFORCEMENT OF COVENANTS.
(a) TERMINATION OF EMPLOYMENT AND FORFEITURE OF COMPENSATION. Notwithstanding
anything in this Agreement to the contrary, in the event that the Board of
Directors or a duly authorized committee thereof determines in its good
faith judgment that Executive has violated Sections 8(a) or 8(b) hereof,
the Company shall have the right to suspend or terminate any or all
remaining payments or benefits payable pursuant to Section 6 and/or 7 of
this Agreement. Such suspension or termination of benefits shall be in
addition to and shall not limit any and all other rights and remedies that
the Company may have against Executive.
(b) RIGHT TO INJUNCTION. Executive acknowledges that a breach of the covenants
set forth in Section 8 hereof will cause irreparable damage to the Company
with respect to which the Company's remedy at law for damages will be
inadequate. Therefore, in the event of a breach of the covenants set forth
in Section 8 by Executive or if the Company has reasonable grounds to
believe that a breach by Executive of the covenants set forth in Section 8
-16-
is imminent, Executive and the Company agree that the Company shall be
entitled to the following particular forms of relief, in addition to
remedies otherwise available to it at law or in equity; (i) injunctions,
both preliminary and permanent, enjoining or restraining such breach or
anticipatory breach and Executive hereby consents to the issuance thereof
forthwith and without bond by any court of competent jurisdiction; and
(ii) recovery of all reasonable sums expended and costs, including
reasonable attorney's fees, incurred by the Company to enforce the
covenants set forth in Section 8.
(c) SEPARABILITY OF COVENANTS. The covenants contained in Section 8 hereof
constitute a series of separate covenants, one for each applicable State
in the United States and the District of Columbia, and one for each
province and Territory in Canada. If in any judicial proceeding, a court
shall hold that any of the covenants set forth in Section 8 exceed the
time, geographic, or occupational limitations permitted by applicable
laws, Executive and the Company agree that such provisions shall and are
hereby reformed to the maximum time, geographic, or occupational
limitations permitted by such laws. Further, in the event a court shall
hold unenforceable any of the separate covenants deemed included herein,
then such unenforceable covenant or covenants shall be deemed eliminated
from the provisions of this Agreement for the purpose of such proceeding
to the extent necessary to permit the remaining separate covenants to be
enforced in such proceeding. Executive and the Company further agree that
the covenants in Section 8 shall each be construed as a separate agreement
independent of any other provisions of this Agreement, and the existence
of any claim or cause of action by Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense
to the enforcement by the Company of any of the covenants of Section 8.
10. MITIGATION OF DAMAGES; ATTORNEY'S FEES
(a) Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment.
(b) If any legal action is filed by either party to enforce or
interpret any of the provisions of this Agreement, the losing party shall pay to
the prevailing party, in addition to any other amounts awarded in the action,
all reasonable attorney's fees and other fees and costs incurred by the
prevailing party in connection with such legal action, the amount of which shall
be fixed by the court hearing such action and made a part of any judgment
rendered.
11. WITHHOLDING OF TAXES.
The Company may withhold all applicable taxes from any compensation and benefits
payable under this Agreement.
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12. ASSIGNMENT.
Except as otherwise provided in this Agreement, this Agreement shall inure to
the benefit of, and be binding upon, the parties hereto and their respective
heirs, representatives, successors and permitted assigns. The rights, benefits
and obligations of Executive under this Agreement are personal to Executive and
no such right, benefit or obligation shall be subject to voluntary or
involuntary alienation, assignment or transfer; PROVIDED, HOWEVER, that nothing
in this Section 12 shall preclude Executive from designating a beneficiary or
beneficiaries to receive any benefit payable on his death. The Company shall
require any Successor (whether by purchase of all or substantially all of the
assets of the Company or by merger of the Company into another entity) to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would have been required to perform if no such succession had
taken place. Upon any such assignment, all references herein to the Company
shall be deemed to refer to such assignee.
13. ENTIRE AGREEMENT; AMENDMENT.
This Agreement, together with all schedules, exhibits and other documents
referred to herein, shall supersede any and all existing oral or written
agreements, representations, or warranties between Executive and the Company
relating to the terms of Executive's employment by the Company. This Agreement
may not be amended, nor any provision waived, except by a written instrument
signed by the party against whom such amendment or waiver is sought to be
enforced.
14. GOVERNING LAW; JURISDICTION.
This Agreement shall be governed by and construed in accordance with the
internal substantive laws of the State of Delaware, without giving effect to the
conflict of law principles thereof. The parties agree that all disputes, legal
actions, suits and proceedings arising out of or relating to this Agreement or
Executive's employment with the Company must be brought exclusively in a federal
district court or state court located in Maricopa County, Arizona. Each party
hereby irrevocably consents and submits to the exclusive jurisdiction of such
courts. No legal action, suit or proceeding with respect to this Agreement or
Executive's employment with the Company may be brought in any other forum. Each
party hereby irrevocably waives all claims of immunity from jurisdiction and any
right to object on the basis that any dispute, action, suit or proceeding
brought in any such court has been brought in an improper or inconvenient forum
or venue.
15. NOTICES.
Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given if delivered personally, mailed by registered or certified mail (return
receipt requested), or by confirmed facsimile to those listed below at their
following respective addresses or at such other address as each may specify by
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notice to the others:
To the Company or Capital:
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: General Counsel
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
To Executive: At the address for Executive set forth on the signature page
below.
16. MISCELLANEOUS.
(a) WAIVER. The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver thereof
or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. The waiver by
any party hereto of a breach of any provision of this Agreement shall
neither operate nor be construed as a general waiver or as a specific
waiver of any subsequent breach by any party, unless otherwise expressly
provided in such waiver.
(b) SEPARABILITY. Subject to Section 9 hereof, if any term or provision of
this Agreement or application thereof to anyone or under any circumstances
shall be determined to be invalid, illegal or unenforceable by any court
of competent jurisdiction and cannot be modified to be enforceable, such
term or provision shall immediately become null and void, leaving the
remainder of this Agreement in full force and effect.
(c) HEADINGS. Section headings are used herein for convenience of reference
only and shall not affect the meaning of any provision of this Agreement.
(d) RULES OF CONSTRUCTION. Whenever the context so requires, the use of the
singular shall be deemed to include the plural and vice versa.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original,
and such counterparts will together constitute but one Agreement.
-19-
(f) COOPERATION. Following termination of employment for any reason, Executive
agrees that he will cooperate fully with the Company and its counsel with
respect to any matter (including, without limitation, litigation or
governmental proceedings) with which Executive was involved during his
term of employment with the Company. Executive will be available to
perform such services on a reasonable basis to the extent requested by the
Company. The Company agrees to cooperate with Executive in scheduling such
services to minimize disruption of any new employment relationship which
Executive may have commenced. Subject to the foregoing sentence, Executive
shall render such cooperation in a timely manner on reasonable notice from
the Company, and agrees to travel as reasonably requested by the Company
in connection with performing such services. The Company will reimburse
Executive's reasonable out-of-pocket expenses incurred in connection with
providing such services in accordance with the Company's policies as in
effect from time to time.
(g) RELEASE. Notwithstanding anything herein to the contrary, the Company
shall not be required to make any of the payments, or provide any of the
benefits, to the Executive pursuant to Sections 6 or 7 hereof unless and
until Executive executes and delivers a release of all claims arising out
of Executive's employment or termination through the date of the release,
but excluding claims for indemnification from the Company under the
Indemnification Agreement attached hereto as Exhibit A, which release
shall be in a form satisfactory to the Company in its sole discretion.
(h) SURVIVAL. Notwithstanding anything in this Agreement to the contrary, the
provisions of Sections 8, 9, 10, 14, 15 and 16 shall survive any
termination of Executive's employment in accordance with their respective
terms.
17. GUARANTEE. Capital hereby guarantees the performance by the Company of the
Company's obligations under this Agreement; PROVIDED, HOWEVER, that this
guarantee shall terminate and be of no further force or effect upon
consummation of the U.S. Reorganization Transaction.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
THE COMPANY:
WASTE SERVICES, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------------------
Name: Xxxxx X. Xxxx
Title: President and Chief Operating Officer
Date: July 28, 2003
CAPITAL:
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ Xxxxx X. Xxxx
------------------------------------------
Name: Xxxxx X. Xxxx
Title: President and Chief Operating Officer
EXECUTIVE:
By: Xxxxxx X. Xxxxx
Date: July 28, 2003
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