EXHIBIT 10.12
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of December 1, 2001 (the "Effective Date"), by and between IESI
Corporation, a Delaware corporation ("IESI" or "Employer"), and Xxxxxx X. Xxxxx
("Executive").
WITNESSETH
WHEREAS, Employer desires to employ Executive, and Executive desires to be
employed by Employer, upon the terms and subject to the conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Employer and Executive, intending
to be legally bound, agree as follows:
1. EMPLOYMENT - IESI hereby employs Executive as its Senior Vice President and
Chief Financial Officer upon the terms and conditions and for the
compensation herein provided. Executive hereby agrees to be so employed and
to render the services specified herein for Employer and any subsidiaries
or affiliates of Employer. In his capacity as its Senior Vice President and
Chief Financial Officer of Employer, Executive shall devote his full and
undivided business time and attention to his duties and responsibilities.
2. TERM OF EMPLOYMENT - Subject to the provisions for termination as provided
in Section 5 hereof, the term of Executive's employment hereunder (the
"Term") shall be for a period commencing as of the Effective Date and
terminating December 31, 2003. Beginning December 31, 2002 and continuing
each December 31st thereafter, the term of this Agreement shall extend one
additional year unless the Company advises the Employee, in writing, to the
contrary. This annual extension provision shall not be effective unless the
Employee advises (during the first week of December of each year) the
Chairman of the Board of Directors of the Company, in writing, of the
upcoming extension date.
3. DUTIES AND POWERS - During the Term, Executive agrees as follows: to devote
his full and exclusive business time and attention to the business of
Employer and of any subsidiaries or affiliates of the Company including,
but not limited to, IESI Corporation (excluding reasonable vacations and
sick leave in accordance with Employer's policies consistent with his
position); to perform all duties in a professional and prudent manner, to
devote the best of his skill, energy, experience and judgment to such
duties; and to communicate to Employer suggestions, ideas or information
that may be helpful to Employer in its businesses. Executive shall have all
the powers and agrees to perform all of the duties associated with his
position as Senior Vice President and Chief Financial Officer, subject to
all lawful policies and guidelines as may be established by the Board of
Directors of Employer (the "Board"). Executive agrees not to engage in any
other activity or own any interest that would conflict with the interests
of Employer or would interfere with his responsibilities to Employer and
the performance of his duties hereunder; PROVIDED, HOWEVER, that: (i)
passive investment of less than 5% of the outstanding securities of any
company or any other investment that does not conflict with
Executive's performance of his duties to Employer hereunder shall be deemed
not to violate this provision, it being understood that, except as set
forth below, an investment of more than 5% in a company other than Employer
engaged in the solid waste industry shall be deemed to conflict with
Executive's performance of his duties hereunder; and (ii) Executive may
engage in activities involving charitable, educational, religious and
similar types of organizations, speaking engagements and similar type
activities to the extent that such other activities do not detract from the
performance by Executive of his duties and obligations hereunder.
4. COMPENSATION AND BENEFITS - For all services rendered by Executive pursuant
to this Agreement, Employer shall compensate Executive as follows:
(a) BASE COMPENSATION - In consideration of the full and faithful
performance by Executive of his obligations hereunder during the Term and
subject to the terms and conditions set forth herewith, Employer (or any
subsidiary or affiliate of Employer for which Executive also provides
services hereunder) shall pay to Executive $200,000 per annum (such annual
compensation as it may be increased from time to time shall be referred to
herein as the "Base Compensation"). Executive's Base Compensation will be
paid in accordance with Employer's customary payroll practices (but not
less frequently than monthly) and will be prorated based upon the number of
days elapsed in any partial year. Base Compensation shall be reviewed
annually and may be increased at the sole discretion of the Board.
(b) BONUS - In addition to the Base Compensation payable to Executive,
Executive may be awarded performance bonuses from time to time, in the sole
discretion of the Board.
(c) BENEFITS - Vacation. During the Term, Executive shall be entitled to
such benefits (including health, dental and disability coverage, life
insurance, 401K, holiday and sick days) as Employer may, from time to time,
make available to its executive employees. Executive shall be entitled to
three (3) weeks paid vacation during each calendar year of employment, with
such vacation allowance being prorated in respect of any employment period
of less than 12 full months. Notwithstanding the foregoing, Executive shall
not be entitled to take more than two weeks of vacation leave at any one
time. Unused vacation shall not be carried forward.
(d) EXPENSES - Executive shall be entitled to reimbursement for his
ordinary and necessary business expenses, including country club dues not
to exceed $2,500 annually, incurred in the performance of his duties under
this Agreement if supported by reasonable documentation as required by
Employer in accordance with its usual practices.
(e) CAR ALLOWANCE - During the Term, Executive shall be entitled to a car
allowance of $750 per month. Executive shall be responsible for all costs
associated with such car (other than fuel expenses reimbursable under
Section 4(d) hereof).
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(f) LIABILITY FOR TAXES - Employer shall have no liability for any tax
obligation of Executive attributable to any payment made under this
Agreement except for customary federal and state withholding taxes (e.g.,
social security, Medicare, etc.). Employer may withhold from any such
payment such amounts as may be required by applicable provisions of the
Internal Revenue Code, other tax laws, and the rules and regulations of the
Internal Revenue Service and other tax agencies, as in effect at the time
of any such payment.
5. EXPIRATION/TERMINATION OF EMPLOYMENT
(a) EXPIRATION AT END OF TERM - Unless earlier terminated in accordance
with the terms of this Agreement, Executive's employment shall expire at
the end of the Term.
(b) TERMINATION AT WILL - The parties acknowledge and agree that
Executive's employment hereunder is an employment at will. Notwithstanding
any other provision contained in this Agreement, either Executive or
Employer may terminate Executive's employment hereunder at any time with or
without Cause (as defined in subsection 5(e)(i)) or for Good Reason (as
defined in subsection 5(e)(ii)) at his election upon prior written notice
(a "Termination Notice") to the other. A Termination Notice shall be
effective upon delivery to the other party and the termination shall be
effective as of the date set forth in such Termination Notice (hereinafter,
the "Termination Date").
(c) EFFECT OF EXPIRATION OR TERMINATION FOR CAUSE OR WITHOUT GOOD REASON -
Upon the expiration of this Agreement pursuant to subsection 5(a) hereof or
upon a termination of this Agreement pursuant to subsection 5(b) hereof by
Employer with Cause or by Executive without Good Reason, Executive shall be
entitled to payment of: (i) Base Compensation through the Termination Date;
(ii) amounts accrued under benefit plans in which Executive is a
participant as of the Termination Date.
(d) EFFECT OF TERMINATION WITHOUT CAUSE OR FOR GOOD REASON - Upon the
termination of this Agreement pursuant to subsection 5(b) hereof by
Employer without Cause or by Executive for Good Reason, Executive shall be
entitled to payment of: (i) Base Compensation (at the rate in effect on the
date of such termination) and all benefits under Section 4(c) hereof for
the remainder of the Term; and (ii) amounts accrued under benefit plans in
which Executive is a participant as of such termination date.
(e) EFFECT OF TERMINATION FOLLOWING A CHANGE OF CONTROL - Notwithstanding
any other provision in this Agreement to the contrary, following a Change
in Control as defined in Section 6 hereof, (a) if Executive chooses to
terminate his employment without Good Reason pursuant to Section 5(b)
hereof, such termination shall be treated as termination under Section 5(c)
hereof; (b) if Employer (or its successor) terminates Executive's
employment without Cause pursuant to Section 5(b) hereof, such termination
shall be treated as a termination under Section 5(d) hereof, except that
Executive shall receive Base Compensation and benefits for the "Payout
Period" (as defined below). For the purposes of this Agreement, "Payout
Period" shall mean the greater of eighteen (18) months or the remainder of
the Term. If a Change in Control as defined in Section 6
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occurs within 6 months after Executive has been terminated Without Cause or
For Good Reason, then termination shall be treated as a termination
following a Change of Control, and Executive shall receive Base
Compensation and benefits as defined by the "Payout Period".
(f) DEFINITIONS OF "CAUSE" AND "GOOD REASON" - For purposes of this
Agreement, the terms "Cause" and "Good Reason" shall have the following
meanings:
(i) "Cause" shall mean (1) the failure of Executive to perform his
duties with Employer (other than any such failure resulting from death
or the inability of Executive to perform the essential functions of
his job due, with or without a reasonable accommodation) or the
material breach of this Agreement by Executive if Employer gives
notice of such cause and it remains uncured for ten (10) days
following such notice; (2) any act by Executive of fraud or dishonesty
with respect to any aspect of Employer's business; (3) drug or alcohol
abuse or related behavior that impedes Executive's job performance or
brings Executive or Employer into disrepute in the community; (4)
misappropriation of funds or any corporate opportunity: (5) a
conviction or affirmative finding by an appropriate administrative
agency that Executive is guilty of a felony or crime of moral
turpitude (or a plea of nolo contendere thereto); (6) acts by
Executive attempting to secure or securing any personal profit not
fully disclosed to and approved by the Board in connection with any
transaction entered into on behalf of Employer; or (7) gross, willful
or wanton negligence or misconduct by Executive.
(ii) "Good Reason" shall mean (1) a material and adverse change in
Executive's status or position as an officer of Employer or a material
reduction in the duties and responsibilities previously exercised by
Executive, or any removal of Executive from or any failure to
reappoint or reelect Executive to such position, except in connection
with the termination of Executive's service as an officer for Cause,
or as a result of Executive's death or inability to perform the
essential functions of his job, with or without a reasonable
accommodation, or (2) a reduction (other than for Cause) by Employer
in Executive's Base Compensation as of the date hereof, or (3) a
relocation of Executive's assigned place of employment outside the
Dallas/Fort Worth Standard Metropolitan Statistical Area without
Executive's consent, or (4) a Change of Control.
(g) Upon the termination of this Agreement by Employer with Cause or by
Executive without Good Reason, Employer shall have the option, exercisable
within ninety (90) days after the termination date, to purchase all stock
of Employer then owned by Executive at fair market value on the date of
termination, which shall be determined in good faith by the Board. In the
event that Executive disagrees with the Board's determination of fair
market value, it shall be determined by an independent certified public
accountant selected by the Board. Payment for such stock shall, at
Employer's option, be in cash or by promissory note in the amount of the
fair market value, bearing interest at 10% annum, and payable in no more
than three equal annual installments of principal, together with accrued
interest.
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(h) Upon the termination of this Agreement by Employer without Cause or by
Executive with Good Reason, Executive shall have the option, exercisable
within ninety (90) days after the termination date, to require Employer to
purchase all stock of Employer then owned by Executive, the valuation and
payment terms to be determined as set out in (f) above. Executive (or his
duly designated personal representative or executor) shall have the same
option to require Employer to purchase Executive's stock in the event of
Executive's death or permanent disability. Such option must be exercised by
notice to Employer within ninety (90) days after Executive's death or
permanent disability.
6. CHANGE IN CONTROL IS DEFINED AS:
For purposes of this Plan, a Change in Control shall be deemed to have
occurred if
(a) a tender offer (or series of related offers) shall be made and
consummated for the ownership of 50% or more of the outstanding voting
securities of the Employer;
(b) the Employer shall be merged or consolidated with another corporation
and as a result of such merger or consolidation less than 50% of the
outstanding voting securities of the surviving or resulting corporation
shall be owned in the aggregate by the former shareholders of the Company,
any employee benefit plan of the Company or its subsidiaries, and their
affiliates;
(c) the Employer shall sell substantially all of its assets to another
corporation that is not wholly owned by the Company; or
(d) a Person (as defined below) shall acquire 50% or more of the
outstanding voting securities of the Company (whether directly, indirectly,
beneficially or of record).
For purposes of this Section, ownership of voting securities shall
take into account and shall include ownership as determined by applying the
provisions of Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under
the Exchange Act. Also for purposes of this Section 6(b), Person shall have
the meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) thereof; however, a Person shall not
include (1) the Employer or any of its subsidiaries; (2) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
or any of its subsidiaries; (3) an underwriter temporarily holding
securities pursuant to an offering of such securities; or (4) a corporation
owned, directly or indirectly, by the shareholders of the Employer in
substantially the same proportion as their ownership of stock of the
Company.
7. NON-INTERFERENCE, NON-SOLICITATION AND NON-COMPETITION COVENANTS
(a) Pursuant to this Agreement, Executive has agreed to become Senior Vice
President and Chief Financial Officer of Employer and to comply with a
non-disclosure
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provision in Section 8. Executive recognizes and acknowledges that he will
be given access to certain of Employer's Confidential Information (as
hereafter defined in Section 9(a)), and have access to and authority to
develop relationships with customers of Employer because of his position
and status as an Employer's Senior Vice President and Chief Financial
Officer, which he would not otherwise attain. In consideration of the
foregoing, Executive agrees to comply with the terms of this Section 7.
(b) The restraints imposed by this Section 7 shall apply during any period
that Executive continues to receive payment of Base Compensation hereunder,
and for a period of one year thereafter (the "Restricted Period").
Notwithstanding any other provision in this Agreement, if Employer
terminates Executive's employment under Section 5(e) following a Change in
Control, the Restricted Period shall extend for a period ending one year
after the Payout Period. In the event that any Court having jurisdiction
should find that the Restricted Period is so long and/or the scope
(distance) (as set forth below) is so broad as to constitute an undue
hardship on Executive, then, in such event only, the Restricted Period and
area limitations shall be valid for the maximum time and area for which
they could be legally made and enforced.
(c) During the Restricted Period, Executive shall not, as an executive
(other than an executive of Employer or an affiliate thereof), employee,
employer, stockholder, officer, director, partner, consultant, advisor,
proprietor, lender, provider of capital or other ownership, operational or
management capacity, directly or indirectly, (i) solicit or hire any
employee of Employer or otherwise interfere with or disrupt the employment
relationship between Employer and any employee, (ii) solicit or do business
with (a) Employer's customers with whom Employer did business while
Executive was employed under this Agreement or (b) individuals or entities
whom Executive met as a result of his position with Employer while
Executive was employed under this Agreement, that results in competition
with Employer in any county, parish or other comparable jurisdiction within
a state, province or nation located in North America in which any of such
customers have operations (other than customers whose business relationship
with Employer has terminated for at least 90 days) or in which Employer has
conducted business while Executive was employed under this Agreement
(collectively, the "Restricted Area"), or (iii) be associated with any
entity engaged in the business of non-hazardous waste disposal in the
Restricted Area that results in competition with Employer (but excluding
association due to ownership of less than 5% of the outstanding securities
of any such entity).
(d) Executive expressly recognizes and agrees that the restraints imposed
by this Section 7 are (i) reasonable as to time, geographic limitation and
scope of activity to be restrained; (ii) reasonably necessary to the
enjoyment by Employer of the value of its assets and to protect its
legitimate interests; and (iii) not oppressive. Executive further expressly
recognizes and agrees that the restraints imposed by this Section 7
represent a reasonable and necessary restriction for the protection of the
legitimate interests of Employer, that the failure by the Executive to
observe and comply with the covenants and agreements in this Section 7 will
cause irreparable harm to Employer, that it is and
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will continue to be difficult to ascertain the harm and damages to Employer
that such a failure by the Executive would cause, that the consideration
received by the Executive for entering into these covenants and agreements
is fair, that the covenants and agreements and their enforcement will not
deprive Executive of his ability to earn a reasonable living in the waste
disposal field or otherwise, and that Executive has acquired knowledge and
skills in his field that will allow him to obtain employment without
violating these covenants and agreements. Executive further expressly
acknowledges that he has been encouraged to and has consulted independent
counsel, and has reviewed and considered this Agreement with that counsel
before executing this Agreement.
8. MEMORANDA, NOTES, RECORDS, ETC. - All memoranda, notes, records, customer
lists or other documents made or compiled by Executive or otherwise made
available to him concerning the business of Employer or its subsidiaries or
affiliates shall be Employer's property and shall be delivered to Employer
upon the expiration or termination of Executive's employment hereunder or
at any other time upon request by Employer, and Executive shall retain no
copies of those documents. Executive shall never at any time have or claim
any right, title or interest in any material or matter of any sort prepared
for or used in connection with the business or promotion of Employer.
9. NONDISCLOSURE
(a) Executive hereby acknowledges that in connection with his employment
by Employer he will be exposed to and may obtain certain information
(including, without limitation, procedures, memoranda, notes, records and
customer and supplier lists whether such information has been or is made,
developed or compiled by Executive or otherwise has been or is made
available to him) regarding the business and operations of Employer and its
subsidiaries or affiliates. Executive further acknowledges that such
information and procedures are unique, valuable, considered trade secrets
and deemed proprietary by Employer. For purposes of this Agreement, such
information and procedures shall be referred to as "Confidential
Information," except that the following shall not be considered
Confidential Information: (i) information disclosed on a non-confidential
basis to third parties by Employer (but not by Executive in violation of
this Agreement), (ii) information released from confidential treatment by
written consent of Employer, and (iii) information lawfully available to
the general public.
(b) Executive agrees that all Confidential Information is and will remain
the property of Employer. Executive further agrees, for the duration of the
Term and thereafter, to hold in the strictest confidence all Confidential
Information, and not to, directly or indirectly, duplicate, sell, use,
lease, commercialize, disclose or otherwise divulge to any person or entity
any portion of the Confidential Information or use any Confidential
Information for his own benefit or profit or allow any person, entity or
third party, other than Employer and authorized Executives of the same, to
use or otherwise gain access to any Confidential Information.
(c) It is the intention of the parties that to the extent any Confidential
Information may constitute a "trade secret" as defined by Texas common law,
then, in addition to the
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remedies set forth in this Agreement, Employer may elect to bring an action
against Executive in the case of any actual or threatened misappropriation
of any such trade secret by Executive.
(d) Regardless of whether any of the Confidential Information or any of
the items set forth in Section 8 and this Section 9 constitute a trade
secret as defined by Texas common law, Executive expressly recognizes and
agrees that the restrictions contained in Section 8 of this Agreement and
this Section 9 represent a reasonable and necessary protection of the
legitimate interests of Employer, that his failure to observe and comply
with his covenants and agreements in those Sections will cause irreparable
harm to Employer, that it is and will continue to be difficult to ascertain
the harm and damages to Employer that such a failure by Executive could
cause, and that a remedy at law for such failure by Executive will be
inadequate.
10. ENFORCEMENT - The parties hereto recognize that the covenants of Executive
hereunder are special, unique and of extraordinary character. Accordingly,
it is the intention of the parties that, in addition to any other rights
and remedies which Employer may have in the event of any breach of said
Sections, Employer shall be entitled, and hereby is expressly and
irrevocably authorized by Executive, inter alia, to demand and obtain
specific performance, including without limitation temporary and permanent
injunctive relief, and all other appropriate equitable relief against
Executive in order to enforce against Executive, or in order to prevent any
breach or any threatened breach by Executive of, the covenants and
agreements contained herein. In case of any breach of this Agreement,
nothing herein contained shall be construed to prevent Employer from
seeking such other remedy in the courts as it may elect or invoke.
11. DELEGATION OF DUTIES AND ASSIGNMENT OF RIGHTS
(a) Executive may not delegate the performance of any of his obligations
or duties hereunder, or assign any rights hereunder, without the prior
written consent of Employer. Any such purported delegation or assignment in
the absence of such written consent shall be null and void with no force or
effect. Notwithstanding the foregoing, nothing herein shall prevent
Executive from delegating ministerial tasks to assistants of the type that
are normally assigned by executives to assistants.
(b) Employer may not assign this Agreement except with the prior written
consent of Executive, except that Employer may without Executive's consent
assign all of its rights and obligations under this Agreement to the person
or entity acquiring a majority of the assets or outstanding stock of IESI
or pursuant to a merger or consolidation of IESI. In the event of such an
assignment by Employer, each reference in this Agreement to Employer shall
include the assignee from and after the date of such assignment.
(c) In the event of a valid assignment pursuant to this Section 11, this
Agreement shall be binding on and inure to the benefit of the parties
hereto and their respective heirs,
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representatives, successors and permitted assigns and any receiver, trustee
in bankruptcy or representative of the creditors of each such person.
12. SURVIVAL OF COVENANTS - Notwithstanding anything contained in this
Agreement, upon the expiration of the Term or the Restricted Period, as
applicable, or in the event Executive's employment is terminated for any
reason whatsoever, the covenants and agreements of Executive contained in
Sections 7 (to the extent set forth therein), 8, 9, 10 and 12 and the
covenants of Employer contained in Section 5 hereof shall survive any such
expiration or termination and shall not lapse except as provided herein.
13. WARRANTY - Executive does hereby warrant that he has not taken any action,
and covenants that during the Term of this Agreement, or the Restricted
Period, as applicable, he shall take no such action, that constitutes or
will constitute a breach of any agreement concerning confidential
information and trade secrets, confidentiality, solicitation or
non-competition to which he is bound as a party.
14. SEVERABILITY/MODIFICATION - If any term or provision of this Agreement is
held or deemed to be invalid or unenforceable in whole or in part, by a
court of competent jurisdiction, such term or provision shall be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of
this Agreement.
15. GOVERNING LAW - This agreement is entered into in Texas, and the
construction, validity and interpretation of this agreement shall be
governed by the laws of the State of Texas without regard to the laws of
conflicts of laws.
16. EFFECTIVENESS; ENTIRE AGREEMENT; AMENDMENT - This Agreement contains the
entire understanding and agreement between the parties relating to the
subject matter hereof and, upon the execution hereof, that certain
Employment Agreement dated January 1, 1999, between IESI Corporation and
Executive is terminated and cancelled. Neither this Agreement nor any
provision hereof may be waived, modified, amended, changed, discharged or
terminated, except by an agreement in writing signed by the party against
whom enforcement of any waiver, modification, change, amendment, discharge
or termination is sought.
17. NOTICES - Any notice required or permitted to be given under the provisions
of this Agreement shall be in writing and shall be deemed to have been duly
given on the date of delivery if delivered personally to the party to whom
notice is to be given (or to the appropriate address below), or on the
third day after mailing if mailed to the party to whom notice is to be
given by certified or registered mail, return receipt requested, postage
prepaid, or by courier, addressed as follows, or to such other person at
such other address as any party may request in writing to the other party
to this Agreement:
To Executive: Xxxxxx X. Xxxxx
0000 Xxxxxxxx Xx.
Xxxxxxxxxxx, Xxxxx 00000
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To IESI: IESI Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxx 00000
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
18. HEADINGS - The section headings herein are for convenience only and shall
not be used in interpreting or construing this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement to be effective as of the Effective Date.
EXECUTIVE:
/s/ Xxxxxx X. Xxxxx
---------------------------------------
XXXXXX X. XXXXX
EMPLOYER:
IESI CORPORATION
BY: /s/ Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX
CHAIRMAN
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