EXHIBIT 10.26
AMENDED AND RESTATED
AGREEMENT
THIS AGREEMENT ("Agreement") is made as of November 3, 1997, between
EMCON, A California corporation, (the "Company"), and Xxxxxx X. Xxxxxx, (the
"Employee"). Unless otherwise indicated, certain of the capitalized terms used
herein are defined in Exhibit A and shall have the meaning as assigned.
RECITALS
A. The Company recognizes that the possibility of a Change of Control
Event exists and that the Employee possesses an intimate knowledge of the
Company. The Board of Directors of the Company (the "Board") believes that it is
necessary that the Company be able to call on the Employee for advice upon the
occurrence of a Change of Control Event. The Board also believes that the
existence of this Agreement will enhance the Company's ability to call on and
rely upon such Employee.
B. The Company and the Employee desire to enter into this Agreement in
order to provide additional compensation and benefits to the Employee in
recognition of past services and to encourage Employee to continue employment
with the Employer.
C. It is intended by the parties that the provisions of paragraphs 2
and 3 of this Agreement shall be effective during the eighteen (18) month period
following a Change of Control Event.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, the Company and Employee agree as follows:
1. Term: Operation of Agreement. Except as provided in paragraph 1(a)
below, this Agreement shall be effective immediately, and, except as provided in
paragraph 1(b) below, shall terminate on the eighteenth (18) month anniversary
following any Change of Control Event.
(a) The provisions of paragraphs (2) and (3) of this Agreement
shall not become effective unless (i) there is a Change of Control Event and
(ii) the Employee is employed by the Company immediately prior to the Change of
Control Event. Notwithstanding the foregoing, if the Employee's employment with
the Company is terminated within the ninety (90) day period immediately
preceding a Change of Control Event and such termination would have constituted
a Termination as defined in Exhibit A if termination had occurred after the
Change of Control Event, the termination will be deemed to have occurred the day
after the Change of Control Event, such that paragraphs 2 and 3 shall be
effective as to such termination.
(b) This Agreement shall terminate on the first to occur of
the following:
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(i) The termination of the Employee's employment with
the Company prior to a Change of Control Event unless such termination is deemed
to occur the day after such Change of Control Event as provided in paragraph
1(a) above.
(ii) Subject to the provisions of paragraph 3(f) below,
the termination of the Employee's employment following a Change of Control Event
is due to any of the following: (a) termination by the Company with Cause, (b)
death of the Employee, (c) Permanent Disability of the Employee or (d) voluntary
termination of employment by the Employee without Good Reasons.
2. Service. Once a Change of Control Event occurs, the Employee shall
not voluntarily terminate his employment with the Company until ninety (90) days
after such Event has occurred. Following a Change of Control Event, the Company
shall not terminate the Employee's employment with the Company, except in
accordance with this Agreement and the Company shall provide not less than
ninety (90) days prior written notice of such Termination to the Employee.
3. Payments and Benefits Upon Termination. The Employee shall be entitled
to the following payments and benefits following Termination:
(a) Termination Payment. The Company shall pay the Employee
within ten (10) days of the date of Termination an amount equal to the sum of
twenty-four (24) months cash salary and a prorated cash bonus, if earned and
otherwise due.
(b) Welfare Plan Benefits. The Employee shall be entitled to
continuation of medical insurance coverage under the Company's Continuation of
Benefits Program for Former Senior Executives (originally implemented by the
Company on January 1, 1993). The Company shall pay the cost of medical insurance
coverage for a period equal to the lesser of (i) twenty-four months following
the date of Termination or (ii) until the Employee is provided by another
employer with medical insurance benefits. The Employee shall notify the Company
within ten (10) days of any employment by the Employee during the period the
Company is paying for medical insurance coverage pursuant to this paragraph
3(b).
(c) Vesting of Benefits. Employee shall become immediately
vested in full in any and all employment benefits, including, without
limitation:
(i) Employee's interest in the EMCON Shared Savings
and Profit Sharing Plan, including the Company match portion; provided that if
such action is found to be a violation of ERISA, the Company shall have the
option of instead paying the Employee an amount which after taking account for
applicable withholding, equals the unvested balance of the Company match portion
of the Employees account.
(ii) all amounts payable as salary continuation and
noncompetition payments under the salary continuation agreements between the
Employee and the Company dated November 1990, November 1994 and November 9,
1996, as well as any similar agreements that have been or may hereafter be
entered into between Employee and the Company; provided that (A) the portion of
such payments representing salary continuation payments shall be immediately due
and payable upon full vesting and (B) the portion of such payments representing
noncompetition payments shall be paid to Employee in equal monthly installments
over a three-year period commencing from the date of departure from the Company
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and for so long during the subsequent three-year period as the Employee is not
employed by a competitor or potential competitor of the Company. For purposes of
the foregoing, a competitor or potential competitor of the Company shall be
defined as an environmental engineering, consulting or construction company not
affiliated with the Company.
(iii) all incentive and non-qualified stock options
to purchase the Company's (or its successor's) capital stock, and
(iv) all restricted stock agreements.
(d) Continued Right to Exercise Options. Employee shall retain
the right to exercise all of the incentive and nonqualified stock options held
by Employee and referred to in paragraph 3(c)(iii) above for a period of up to
three years after Employee's departure from the Company or, if earlier, until
expiration of the original term of the respective option agreements, and for
these purposes Employee shall be considered a continuing employee of EMCON.
(e) No Mitigation. All payments and benefits to which the
Employee is entitled under this Agreement shall be made and provided without
offset, deduction or mitigation on account of income the Employee may receive
from other employment or otherwise, except as provided in paragraph 3(b) above.
(f) Death of the Employee. In the event of the Employee's
death subsequent to Termination, all payments and benefits required by this
Agreement shall be paid to the Employee's designated beneficiary or
beneficiaries or, if he has not designated a beneficiary or beneficiaries, to
his estate.
4. Arbitration. Any claim, dispute or controversy arising out of or in
any way relating to the parties' employment relationship (including, but not
limited to, any claims of wrongful termination or age, sex or other
discrimination), this Agreement, the interpretation of this Agreement or the
alleged breach thereof shall be submitted by the parties to binding arbitration
by the American Arbitration Association in San Mateo County, California;
provided, however, that this arbitration provision shall not apply to any
disputes or claims relating to or arising out of the misuse or misappropriation
of the Company's trade secrets or confidential and proprietary information.
5. Conflict in Benefits. This Agreement amends and restates that
certain Agreement between the Employee and the Company dated November 30, 1995
and shall supersede all other prior arrangements, whether written or oral, and
understandings regarding the subject matter of this Agreement; provided,
however, that this Agreement is not intended to and shall not affect, limit or
terminate (i) any plans, programs, or arrangements of the company that are
either in writing or regularly made available to a significant number of
employees of the Company, (ii) any agreement or arrangement with the Employee
that has been reduced to writing, or (iii) any agreements or arrangements
hereafter entered into by the parties in writing.
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6. Miscellaneous.
(a) Notices. Any notice or other communication provided for in
this Agreement or contemplated hereby shall be sufficiently given if given in
writing and personally delivered or delivered by certified mail, return receipt
requested, and addressed, in the case of the Company, to the Company at:
EMCON
000 X. Xx Xxxxxx Xxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Chairman of the Board
and, in the case of the Employee, to the Employee at:
Xxxxxx X. Xxxxxx
000 Xx Xxxxxx Xxx Xxx
Xxx Xxxxxxxxx, XX 00000
Either party may designate a different address by giving written notice of
change of address in the manner provided above.
(b) Waiver. No waiver or modification in whole or in part of
this Agreement, or any term or condition hereof, shall be effective against any
party unless in writing and duly signed by the party sought to be bound. Any
waiver of any breach of any provision hereof or any right or power by any party
on one occasion shall not be construed as a waiver of, or a bar to, the exercise
of such right or power on any other occasion or as a waiver of any subsequent
breach.
(c) Binding Effect; Successors. This Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the Company and
the Employee and their respective heirs, legal representatives, successors and
assigns. For purposes of the foregoing, the successors to the Company shall
include, without limitation, successors (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business or assets of the Company (a "Company Successor"). If the Company
shall be merged into or consolidated with another entity, the provisions of this
Agreement shall be binding upon and inure to the benefit of the entity surviving
such merger or resulting from such consolidation. The provisions of this
paragraph 6(c) shall continue to apply to each subsequent employer of the
Employee hereunder in the event of any subsequent merger, consolidation or
transfer or assets of such subsequent employer.
(d) Separability. Any provision of this Agreement which is
unenforceable or invalid in any jurisdiction shall be ineffective in such
jurisdiction to the extent that it is unenforceable or invalid without affecting
the remaining provisions hereof, which shall continue in full force and effect.
The unenforceability or invalidity of a provision of this Agreement in one
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(e) Controlling Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and to be performed therein.
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IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the day and year first above written.
COMPANY:
EMCON, a California Corporation
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Xxxxxxx X. Xxxxx, Chairman of the Board
EMPLOYEE:
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
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EXHIBIT A
DEFINITIONS
As used in this Agreement, and unless the context requires a different
meaning, the following terms mean:
(i) "Cause" means (a) theft, dishonesty or falsification of any
employment or Company records; (b) improper disclosure of the Company's
confidential or proprietary information; (c) any intentional act by Employee
which has a material detrimental effect on the Company's reputation or business;
or (d) failure to perform any reasonable assigned duties, which failure is not
cured within thirty (30) days following written notice of such failure from the
Company.
(ii) "Change of Control Event" means an Ownership Change of which the
shareholders of the Company before such Ownership Change do not retain, directly
or indirectly, at least seventy percent (70%) of the beneficiary interest in the
voting stock of the Company after such transaction or in which the Company is
not the surviving corporation.
(iii) An "Ownership Change" shall be deemed to have occurred in the
event any of the following events occurs with respect to the Company;
A. the direct or indirect sale or exchange by the shareholders
of the Company of all or substantially all of the stock of the Company;
B. a merger or consolidation in which the Company is a party;
C. the sale, exchange, or transfer of all or substantially all
of the assets of the Company; or
D. a liquidation or dissolution of the Company.
(iv) A voluntary termination of employment by the Employee for "Good
Reasons" means a termination of employment following: (a) a Deemed Demotion
which results without the Employee's express written consent and which
continues, for a period of twenty (20) days after written notice thereof to the
Company from the Employee with a "Deemed Demotion" being defined as (i) the
assignment to the Employee of any duties, or any limitation of the Employee's
responsibilities, inconsistent with the Employee's positions, duties,
responsibilities and status with the Company immediately prior to the date of
the Change of Control Event, or (ii) a removal of the Employee from the
Employee's position with the Company held by the Employee in contemplation of a
Change of Control Event, except in connection with the termination of the
employment of the Employee by the Company for Cause or as a result of the death
or Permanent Disability of the Employee; (b) any failure by the Company to pay,
or any reduction by the Company of, the Employee's base annual salary or bonus
compensation in effect immediately prior to the date of the Change of Control
Event; (c) any failure by the Company to (i) continue to provide the Employee
with the opportunity to participate, on terms no less favorable than those in
effect immediately prior to the date of the Change of Control Event, in any
benefit plans and programs, including, but not limited to, the Company's life,
disability, health, dental, medical, bonus savings and retirement plans in which
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the Employee was participating immediately prior to the date of the Change of
Control Event, or their equivalent, or (ii) provide the Employee with all other
fringe benefits (or their equivalent) from time to time in effect for the
benefit of any executive, management or administrative group which customarily
includes a person holding the employment position with the Company then held by
the Employee; (d) without the Employee's express written consent, the relocation
of the principal place of the Employee's employment to a location that is more
than 20 miles further from the Employee's principal residence than such
principal place of employment immediately prior to the date of the Change of
Control Event, or the imposition of travel requirements on the Employee not
substantially consistent with normal day-to-day travel requirements existing
immediately prior to the date of the Change of Control Event and/or (e) a good
faith determination by the Employee, in his sole judgment, that the continuation
of the Employee's employment with the company is no longer in the best interests
of the Company.
(iv) "Permanent Disability" means, as applied to the Employee, that (a)
he has been totally incapacitated by bodily injury or disease so as to be
prevented thereby from engaging in any occupation or employment for remuneration
or profit, (b) such total incapacity shall have continued for a period of six
consecutive months and (c) such total incapacity will, in the opinion of a
qualified physician, be permanent and continuous during the remainder of the
Employee's life.
(v) "Termination" means any termination of the employment of the
Employee following the occurrence of any Change of Control Event, by the Company
without Cause or by the Employee for Good Reason; provided, however, that
"Termination" shall not include any termination of the employment of the
Employee (a) by the Company as a result of the Permanent Disability of the
Employee or (b) as a result of the death of the Employee.
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