EXHIBIT 10.12
EXECUTIVE EMPLOYMENT AGREEMENT
ALLIED WASTE INDUSTRIES, INC., a Delaware corporation ("Company") and
XXXXXX X. XXXXXXXXX ("Executive") enter into this Executive Employment Agreement
("Agreement") effective June 1, 2004 ("Effective Date"), to set forth the terms
and conditions of Executive's employment. This Agreement supersedes any prior
employment agreement(s) between the parties. The parties agree as follows:
1. CERTAIN DEFINITIONS AND UNDERSTANDINGS. As used in this Agreement,
the following terms have the meanings prescribed below:
Annual Incentive Compensation is defined in Section 4.2.
Base Salary is defined in Section 4.1.
Beneficial Owner is defined in Rule 13(d)-3 under the Exchange Act;
provided, however, and without limitation, that any individual, corporation,
partnership, group, association or other person or entity that has the right to
acquire any Voting Stock at any time in the future, whether such right is (a)
contingent or absolute, or (b) exercisable presently or at any time in the
future, pursuant to any agreement or understanding or upon the exercise or
conversion of rights, options or warrants, or otherwise, shall be the Beneficial
Owner of such Voting Stock.
Cash Termination Excise Tax is defined in Section 6.6(a).
Cash Termination Payment is defined in Section 6.6(a).
Cause is defined in Section 5.3.
Change in Control of the Company means one of the following: (a) the
Company merges or consolidates, or agrees to merge or to consolidate, with any
other corporation (other than a wholly-owned direct or indirect subsidiary of
the Company) and is not the surviving corporation (or survives as a subsidiary
of another corporation), (b) the Company sells, or agrees to sell, all or
substantially all of its assets to any other person or entity, (c) the Company
is dissolved, (d) any third person or entity (other than Apollo Advisors, L.P.,
The Blackstone Group L.P., or a trustee or committee of any qualified employee
benefit plan of the Company) together with its Affiliates shall become (by
tender offer or otherwise), directly or indirectly, the Beneficial Owner of at
least 30% of the Voting Stock of the Company, or (e) the individuals who
constitute the Board of Directors of the Company as of the Effective Date
("Incumbent Board") shall cease 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 shall be considered, for the purposes of this Agreement, a
member of the Incumbent Board.
Change in Control Date is defined in Section 6.5.
Code means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated by the Internal Revenue Service thereunder.
Common Stock means the Company's common stock, par value $.01 per
share.
Company means Allied Waste Industries, Inc., a Delaware corporation.
Compensation Plans is defined in Section 4.6.
Confidential Information is defined in Section 7.2.
Continuing Obligations is defined in Section 3.
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Date of Termination means the earliest to occur of (a) the date of
the Executive's death, or (b) the date specified in the Notice of Termination,
in accordance with Section 5.8.
Disability means an illness or other disability which prevents the
Executive from discharging his responsibilities under this Agreement (with or
without a reasonable accommodation) for a period of 180 consecutive calendar
days, or an aggregate of 180 calendar days in any calendar year, during the
Term, all as determined in good faith by the Board of Directors of the Company
(or a committee thereof).
Effective Date means June 1, 2004.
Exchange Act means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Securities and Exchange
Commission thereunder.
Executive means Xxxxxx X. Xxxxxxxxx.
Good Reason is defined in Section 5.5.
LTIP means the Long-Term Incentive Plan.
Notice of Termination is defined in Section 5.8.
Parties means the parties to this Agreement, i.e., the Company and
the Executive.
Reassignment is defined in Section 5.9.
Retirement is defined in Section 5.7.
Share Price has the same meaning as "Fair Market Value" as that term
is defined in the Company's 1991 Incentive Stock Plan, as amended.
Targeted Annual Incentive Compensation is defined in Section 4.2.
Term is defined in Section 3.
Threshold Share Price means (a) in the case of the one (1) year
period following the Effective Date, a Share Price of $18 or more, or (b) in the
case of subsequent years, a Share Price which is at least fifteen percent (15%)
greater than the Threshold Share Price for the preceding one (1) year period.
Vacation Time is defined in Section 4.3.
Voting Stock means all outstanding shares of capital stock of the
Company entitled to vote generally in an election of directors; provided,
however, that if the Company has shares of Voting Stock entitled to more or less
than one (1) vote per share, each reference to a proportion of the issued and
outstanding shares of Voting Stock shall be deemed to refer to the proportion of
the aggregate votes entitled to be cast by the issued and outstanding shares of
Voting Stock.
Welfare Plans is defined in Section 4.7.
Without Cause is defined in Section 5.4.
Years of Service means all continuous, full, calendar years of
employment with the Company, but does not include any service with an entity
acquired by the Company which is completed prior to the acquisition of that
entity by the Company.
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In addition, throughout this Agreement, the parties have defined
certain words and intend for those definitions to apply whenever the parties
have used a defined word in this Agreement. One of the defined terms is
"Company" which means Allied Waste Industries, Inc. However, the parties expect
that some or all of the Company's obligations under this Agreement will be
fulfilled through its parent, subsidiary, related, or successor companies or
businesses (which will be called "Affiliates" in this Agreement). Accordingly,
Executive acknowledges that the discharge of any obligation of the Company under
this Agreement, which may be through the acts of one or more Affiliates,
discharges any such obligation of the Company. Moreover, the obligations
Executive assumes under this Agreement will be owed to the Company and to its
Affiliates. Accordingly, the parties expressly intend for the Affiliates to be
third-party beneficiaries of the promises made and obligations assumed by
Executive in this Agreement.
2. GENERAL DUTIES OF COMPANY AND EXECUTIVE.
2.1. The Company will employ the Executive as its Vice President,
Operations. The Executive's authority, duties and responsibilities shall be
those assigned by the Company's Chief Operating Officer and agreed to by the
Executive. The Executive shall devote reasonable 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. The
Executive may (a) serve on corporate, civic or charitable boards or committees,
(b) deliver lectures, fulfill speaking engagements or teach at educational
institutions, and (c) manage personal investments, so long as such activities do
not significantly interfere with the performance of the Executive's duties and
responsibilities.
2.2. The Executive agrees and acknowledges that he owes a fiduciary
duty of loyalty, fidelity and allegiance to act at all times in the best
interests of the Company and to do no act and to make no statement, oral or
written, which would injure the Company's business, its interests or its
reputation. The Executive also agrees that he shall not knowingly become
involved in a conflict of interest with the Company and, upon discovery of any
such conflict, that he will inform the Company of the conflict and will not
allow the conflict to continue.
2.3. The Executive agrees to comply at all times with all applicable
policies, rules and regulations of the Company, including, without limitation,
the Company's Code of Ethics and the Company's policies regarding trading in
Common Stock, as each is in effect from time to time.
3. TERM. The "Term" of this Agreement shall be a continuous period of
two (2) years (i.e., on any given date the Term shall be a period of two years
from that date), beginning on the Effective Date, unless this Agreement is
terminated earlier pursuant to Section 5 of this Agreement, in which case the
Term shall end on the Date of Termination. Neither the termination of this
Agreement nor the consequent end of the Term shall affect the Company's
obligations under Section 6 of this Agreement or the Executive's obligations
under Sections 7 through 10 of this Agreement (or under Section 2.3 with respect
to the Company's policies regarding trading in Common Stock) (collectively,
"Continuing Obligations").
4. COMPENSATION AND BENEFITS.
4.1. Base Salary. As compensation for services to the Company during
the Term, the Company shall pay to the Executive until the Date of Termination a
base salary at the annual rate of Four Hundred Eighty Nine Thousand Five Hundred
Dollars ($489,500.00) or such other rate as may be specified from time to time
by the Board of Directors (or a committee thereof) in its discretion ("Base
Salary"). The Base Salary shall be payable in equal bi-weekly installments or in
accordance with the Company's established policy, 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, the Executive's Base
Salary shall include any portion thereof which is deferred under any
nonqualified plan or arrangement.
4.2. Annual Incentive Compensation. In addition to Base Salary, the
Executive shall be awarded, for each fiscal year during the Term until the Date
of Termination, annual cash incentive compensation (either pursuant to an
incentive plan or program of the Company or otherwise) in an amount
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to be determined by the Board of Directors (or a committee thereof) in its sole
discretion ("Annual Incentive Compensation"). "Targeted Annual Incentive
Compensation", earned upon the achievement of one hundred percent (100%) of the
annual target goals for the Executive, shall be eighty percent (80%) of the
Executive's Base Salary, unless otherwise determined by the Board of Directors
(or a committee thereof) in its sole discretion. All such Annual Incentive
Compensation shall be payable at a time to be determined by the Board of
Directors (or a committee thereof) in its sole discretion. For all purposes
under this Agreement, the Executive's Annual Incentive Compensation shall
include any portion thereof which is deferred under any nonqualified plan or
arrangement.
4.3. Vacation Time. Commencing on the Effective Date and continuing
until the Date of Termination, for each full calendar year in which the
Executive is employed under this Agreement, the Executive shall be entitled to
four (4) weeks paid vacation ("Vacation Time"). For any partial calendar year
during which the Executive is employed under this Agreement, he will be entitled
to a prorated amount of Vacation Time, based on the number of weeks worked in
the calendar year (and pursuant to the Company's then current vacation policy).
Because the Company intends for the Vacation Time to be used by the Executive,
so that he benefits from having time off from work, the Executive must use the
entire Vacation Time provided under this Section 4.3, for each calendar year,
during the relevant calendar year for which it is provided. If the Executive
does not use all of the Vacation Time to which he is entitled in any calendar
year, he will forfeit the unused Vacation Time at the end of that calendar year
and shall have no right to use any of the unused Vacation Time in any subsequent
calendar year or to be otherwise compensated for any such unused Vacation Time.
4.4. Automobile Allowance. Commencing on the Effective Date and
continuing until the Date of Termination, the Executive shall receive an
automobile allowance of Six Hundred Dollars ($600.00) per month ("Automobile
Allowance"). The Board of Directors (or a committee thereof), in its discretion,
may increase the Automobile Allowance based upon relevant circumstances.
4.5. Club Membership Dues. Commencing on the Effective Date and
continuing until the Date of Termination, the Executive shall receive an
allowance of up to Six Hundred Dollars ($600.00) per month, equal to the monthly
membership dues (i.e., the regular membership fee, and not incidental or
ancillary charges such as food, beverages, rentals, coaching, training,
supplies, therapy, spa, etc.) which the Executive pays for one club or
organization of Executive's choice.
4.6. Incentive, Savings, Retirement and Stock Plans. The Executive
shall be entitled to participate in and be eligible to receive benefits under
all executive incentive, savings, retirement and stock (including any stock
option, restricted stock, restricted stock units, phantom stock and other stock
rights and interests, including derivative interests) plans and programs
currently maintained or hereinafter established by the Company for the benefit
of its executive officers and/or employees (collectively "Compensation Plans").
The Executive's participation in all such Compensation Plans shall be governed
by the terms and provisions of each such Compensation Plan.
4.7. Welfare Plans. The Executive shall be eligible to participate
in and shall receive all benefits under each welfare benefit plan of the Company
currently maintained or subsequently established by the Company for the benefit
of its employees. Such welfare benefit plans may include medical, dental,
vision, disability, group life, accidental death and travel accident insurance
plans and programs (collectively "Welfare Plans"). The Executive's participation
in the Welfare Plans shall be subject to the terms and conditions of each
Welfare Plan.
4.8. Reimbursement of Expenses. The Executive may from time to time
during the Term incur various business expenses customarily incurred by persons
holding positions of like responsibility, including, without limitation, travel,
entertainment and similar expenses incurred for the benefit of the Company.
Subject to the Company's policy regarding the reimbursement of such expenses as
in effect from time to time during the Term, which does not necessarily allow
reimbursement of all such expenses, and following the Company's receipt of
proper documentation for such expenses, the Company shall reimburse the
Executive for such expenses from time to time, at the Executive's request, and
the Executive shall account to the Company for all such expenses.
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4.9. Indemnification and Insurance. At all times during the term of
this Agreement, and for such additional periods as are provided for in this
Agreement, the Executive shall be covered under the Company's directors' and
officers' liability insurance, if any, to the extent such coverage is
commercially feasible, and under a separate Indemnification Agreement with the
Company.
5. TERMINATION OF AGREEMENT.
5.1. Death. This Agreement shall terminate automatically upon the
death of the Executive.
5.2. Disability. The Company may terminate this Agreement, upon
written notice to the Executive delivered in accordance with Sections 5.8 and
11.1, upon the Disability of the Executive.
5.3. Cause. Cause exists for the Company to terminate the Agreement
if any of the following occur: (a) the Executive is convicted of or pleads
guilty to a crime (other than a minor traffic offense); (b) the Company
determines that the Executive breached any term of this Agreement; (c) the
Company determines that the Executive violated the Company's Code of Ethics, or
other Company policies regarding trading of common stock, reimbursement of
expenses or any other applicable policies, rules or regulations; or (d) the
Company determines that the Executive engaged in conduct, or failed to perform
his assigned duties, the result of which exposes the Company to actual or
potential injury (financial or otherwise).
5.4. Without Cause. The Company may terminate this Agreement Without
Cause, upon written notice to the Executive delivered in accordance with
Sections 5.8 and 11.1. For purposes of this Agreement, the Executive will be
deemed to have been terminated "Without Cause" if the Executive is terminated by
the Company for any reason other than Cause, Disability or death.
5.5. Good Reason. The Executive may terminate this Agreement for
Good Reason, upon written notice to the Company delivered in accordance with
Sections 5.8 and 11.1. For purposes of this Agreement, "Good Reason" means (a)
the assignment to the Executive of any duties that are materially inconsistent
with the Executive's duties or responsibilities as contemplated in this
Agreement, (b) any other action by the Company which results in a material
diminishment in the Executive's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities (provided,
however, that a temporary diminishment, whether material or not, due to the
Executive's illness or injury will not constitute grounds for a termination for
Good Reason by the Executive), (c) any material breach by the Company of any of
the provisions of this Agreement, or (d) any material reduction, or attempted
material reduction, at any time during the Term, of the Base Salary or of any of
the compensation or benefits described in Article 4 of this Agreement (provided,
however, that any change in the targeted percentage for purposes of determining
the Executive's Annual Incentive Compensation, any change in the Company's
reimbursement policies, or any change in any Compensation Plans or Welfare
Plans, which affects a majority of the employees covered by those policies or
plans, shall not be considered "Good Reason").
5.6. Without Good Reason. The Executive may terminate this Agreement
Without Good Reason, upon written notice to the Company delivered in accordance
with Sections 5.8 and 11.1. For purposes of this Agreement, the Executive will
be deemed to have terminated "Without Good Reason" if the Executive terminates
this Agreement for any reason other than Good Reason or due to the Executive's
death or Retirement.
5.7. Retirement. The Executive may terminate this Agreement upon
Retirement, upon written notice to the Company delivered in accordance with
Sections 5.8 and 11.1. For purposes of this Agreement, "Retirement" means the
Executive's bona fide retirement from the Company.
5.8. Notice of Termination. Any termination of this Agreement by the
Company for Cause, Without Cause or as a result of the Executive's Disability,
or by the Executive for Good Reason or Without Good Reason or upon Retirement
shall be communicated by a Notice of Termination to the other
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party. A termination of this Agreement due to Reassignment may also be
communicated by a Notice of Termination. A "Notice of Termination" means a
written notice which (a) indicates the specific termination provision in this
Agreement relied upon and (b) if the termination is by the Company for Cause or
by the Executive for Good Reason, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. If the termination is due to
Reassignment, the Notice of Termination also will set forth the title of the
Executive's reassigned position. The Notice of Termination must specify the Date
of Termination (which, in the case of a Reassignment, will be limited to
termination of this Agreement, not termination of the Executive's employment).
In the case of a termination by the Company for Cause or due to the Executive's
Disability or by the Executive for Good Reason or due to Retirement, the Date of
Termination may be as early as the date notice is given but no later than thirty
(30) calendar days after notice is given, unless otherwise agreed to in writing
by both parties. In the case of a termination by the Company Without Cause, by
the Company due to Reassignment, or by the Executive Without Good Reason, the
Date of Termination may be as early as fourteen (14) calendar days after notice
is given but no later than sixty (60) calendar days after notice is given,
unless otherwise agreed to by the parties in writing. The Notice of Termination
shall also conform with the provisions of Section 11.1.
5.9. Reassignment. At any time during the term of this Agreement,
the Company and the Executive may agree that there is a more appropriate
position for the Executive. If the Company and the Executive mutually agree to
change Executive's position with the Company ("Reassignment"), this Agreement
shall terminate immediately upon Executive's acceptance of the other position.
Acceptance of another position by the Executive may be accomplished either (a)
upon written acceptance by the Executive of a notice by the Company to the
Executive delivered in accordance with Sections 5.8 and 11.1, of the Executive's
other position, or (b) by actually commencing employment in the other position.
6. OBLIGATIONS OF COMPANY UPON TERMINATION.
6.1. Cause, Without Good Reason. If this Agreement is terminated
either by the Company for Cause or by the Executive Without Good Reason, the
Company shall pay to the Executive, in a lump sum cash payment within thirty
(30) days after the Date of Termination, the aggregate of (a) any unpaid portion
of the Executive's Base Salary (as in effect on the Date of Termination) owing
as of the Date of Termination, and (b) in the case of compensation previously
deferred by the Executive, all amounts of such compensation previously deferred
and not yet paid by the Company (unless such payment is inconsistent with the
terms of either any payment election made by the Executive with respect to such
deferred compensation or the applicable plan). The Company also shall promptly
pay or reimburse to the Executive any costs and expenses (and moving and
relocation expenses, if otherwise agreed to by the Company in writing) paid or
incurred by the Executive which would have been payable under Section 4.8 of
this Agreement if the Executive's employment had not terminated.
All other obligations of the Company and rights of the
Executive hereunder shall terminate effective as of the Date of Termination;
provided, however, that the Executive's rights under any Compensation Plan or
Welfare Plan shall be governed by the terms and provisions of each such plan and
are not necessarily severed on the Date of Termination.
6.2. Death or Disability. If this Agreement is terminated as a
result of the Executive's death or Disability:
(a) The Company shall pay to the Executive (or to his
estate, in the event the Executive is deceased) the following amounts:
(1) any unpaid portion of the Executive's Base Salary
(as in effect on the Date of Termination) through the Date of Termination,
and any unpaid portion of the Annual Incentive Compensation previously
awarded to the Executive, in a lump sum cash payment within thirty (30)
days after the Date of Termination;
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(2) an amount equal to two (2) times the sum of the
Executive's Base Salary (as in effect on the Date of Termination) plus the
Executive's Target Annual Incentive Compensation for the fiscal year
during which the Date of Termination occurs, in bi-weekly installments
over a two (2) year period following the Executive's Date of Termination.
The Company shall, to the extent feasible, purchase insurance to cover all
or any part of the obligation contemplated in the foregoing sentence, and
the Executive agrees to submit to a physical examination and otherwise
cooperate with the Company to facilitate the procurement of such
insurance; and
(3) in the case of compensation previously deferred by
the Executive, all amounts of such compensation previously deferred and
not yet paid by the Company in a lump sum cash payment within thirty (30)
days after the Date of Termination (unless such payment is inconsistent
with either the terms of any payment election made by the Executive with
respect to such deferred compensation or the applicable plan).
(b) The Company shall, promptly upon submission by the
Executive (or his estate) of supporting documentation, pay or reimburse to the
Executive any costs and expenses (and moving and relocation expenses, if
otherwise agreed to by the Company in writing) paid or incurred by the Executive
which would have been payable under Section 4.8 of this Agreement if the
Executive's employment had not terminated.
(c) The Company shall continue providing medical, dental,
and/or vision coverage to the Executive and/or the Executive's spouse and
dependents, at least equal to that which would have been provided to him under
Section 4.7 if the Executive's employment had not terminated, if such coverage
continues to be available to the Company, until the earlier of (1) the date the
Executive becomes eligible for any comparable medical, dental, or vision
coverage provided by any other employer, (2) the date the Executive becomes
eligible for Medicare or any similar government-sponsored or provided health
care program (whether or not such coverage is equivalent to that provided by the
Company), or (3) the fifth anniversary of the Executive's Date of Termination.
Notwithstanding the foregoing, the medical, dental, and/or vision coverage
provided under this Section 6.2(c) shall cease immediately if the Executive
violates any of his Continuing Obligations.
(d) Whenever compensation is payable to the Executive under
this Agreement during a period in which he is partially or totally disabled, and
such Disability would (except for the provisions of this Agreement) entitle the
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
the Executive pursuant to any such plan or program shall be considered a portion
of (and not in addition to) the payment to be made to the Executive pursuant to
this Section 6.2. If disability income is payable directly to the Executive by
an insurance company under the terms of an insurance policy paid for by the
Company, the amounts paid to the Executive by such insurance company shall be
considered a portion of the payment (and not in addition to the payment) to be
made to the Executive pursuant to this Section 6.2.
(e) All other obligations of the Company and rights of the
Executive hereunder shall terminate effective as of the Date of Termination;
provided, however, that except as otherwise specifically modified by the terms
of this Agreement the Executive's rights under the Compensation Plans and
Welfare Plans shall be governed by the terms and provisions of those Plans and
are not necessarily severed on the Date of Termination.
(f) The Executive (or the Executive's estate, as the case
may be) shall continue to vest and, if applicable, continue to be permitted to
exercise, all of the rights and interests awarded to the Executive under the
Company's stock plans, as if the Executive were still employed by the Company,
for a period of three (3) years following the Date of Termination (or, if less,
for the remainder of the stated terms of the rights or interests).
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(g) The Executive (or the Executive's estate, as the case
may be) shall continue to be covered under the Company's directors' and
officers' liability insurance, if any, to the extent such coverage is
commercially feasible, and under his separate Indemnification Agreement with the
Company, as if the Executive's employment had not terminated, for a period of
ten (10) years following his Date of Termination (or, in the case of the
Indemnification Agreement, for such longer term as may be provided for in the
Indemnification Agreement).
6.3. Good Reason; Without Cause. If this Agreement is terminated
either by the Executive for Good Reason or by the Company Without Cause (other
than in connection with a Change in Control as described in Section 6.5):
(a) The Company shall pay to the Executive the following
amounts:
(1) any unpaid portion of the Executive's Base Salary
(as in effect on the Date of Termination) through the Date of Termination,
and any unpaid portion of the Annual Incentive Compensation previously
awarded to the Executive, in a lump sum cash payment within thirty (30)
days after the Date of Termination;
(2) an amount equal to two (2) times the sum of the
Executive's Base Salary (as in effect on the Date of Termination) plus the
Executive's Targeted Annual Incentive Compensation for the fiscal year
during which the Date of Termination occurs, in bi-weekly installments
over a two (2) year period following the Date of Termination, provided
that such payments shall cease immediately if the Executive violates any
of his Continuing Obligations; and
(3) in the case of compensation previously deferred by
the Executive, all amounts of such compensation previously deferred and
not yet paid by the Company in a lump sum cash payment within thirty (30)
days after the Date of Termination (unless such payment is inconsistent
with either the terms of any payment election made by the Executive with
respect to such deferred compensation or the applicable plan).
(b) The Company shall promptly pay or reimburse to the
Executive any costs and expenses (and moving and relocation expenses, if
otherwise agreed to by the Company in writing) paid or incurred by the Executive
which would have been payable under Section 4.8 of this Agreement if the
Executive's employment had not terminated.
(c) The Company shall continue providing medical, dental,
and/or vision coverage to the Executive and/or the Executive's spouse and
dependents, at least equal to that which would have been provided to the
Executive under Section 4.7 if the Executive's employment had not terminated,
until the earlier of (1) the date the Executive becomes eligible for any
comparable medical, dental, or vision coverage provided by any other employer,
(2) the date the Executive becomes eligible for Medicare or any similar
government-sponsored or provided health care program (whether or not such
coverage is equivalent to that provided by the Company), or (3) the fifth
anniversary of the Executive's Date of Termination; provided that such coverage
shall cease immediately if the Executive violates any of his Continuing
Obligations.
(d) The Executive (or the Executive's estate, as the case
may be) shall continue to vest and, if applicable, continue to be permitted to
exercise, all of the rights and interests awarded to the Executive under the
Company's stock plans, as if the Executive were still employed by the Company,
for a period of three (3) years following the Date of Termination (or, if less,
for the remainder of the stated terms of the rights and interests).
Notwithstanding any contrary provision of the LTIP, the Executive's Awards for
the Performance Cycles (as defined in the LTIP) in effect as of the Date of
Termination shall be prorated in the manner described in Section 8(a) of the
LTIP.
(e) The Executive shall continue to be covered under the
Company's directors' and officers' liability insurance, if any, to the extent
such coverage is commercially feasible, and under his separate Indemnification
Agreement with the Company, as if the Executive's employment had not terminated,
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for a period of ten (10) years following his Date of Termination (or, in the
case of the Indemnification Agreement, for such longer term as may be provided
for in the Indemnification Agreement).
(f) All other obligations of the Company and rights of the
Executive hereunder shall terminate effective as of the Date of Termination;
provided, however, that except as otherwise specifically modified by the terms
of this Agreement the Executive's rights under the Compensation Plans and
Welfare Plans shall be governed by the terms and provisions of these Plans and
are not necessarily severed on the Date of Termination.
(g) Notwithstanding anything to the contrary, if this
Agreement is terminated either by the Executive for Good Reason or by the
Company Without Cause (other than in connection with a Change in Control as
described in Section 6.5) and the Date of Termination is within one (1) year of
the date on which the Executive would have satisfied the criteria for
eligibility for maximum retirement payments as specified in Section 6.4(d)(1)
below, the termination will be deemed to have been in contemplation of the
Executive's Retirement, and the rights and obligations of the parties shall be
governed by Section 6.4 rather than this Section 6.3.
(h) The Company shall (through an agency of Company's
choosing) provide outplacement services to the Executive for a period of one (1)
year following the Date of Termination, provided that the cost of such services
shall not exceed $25,000 (or such higher amount as may be approved by the Board
of Directors (or a committee thereof).
6.4 Retirement. If this Agreement is terminated by the Executive
due to Retirement:
(a) The Company shall pay to the Executive, in a lump sum
cash payment within thirty (30) days after the Date of Termination, the
aggregate of the following amounts: (1) any unpaid portion of the Executive's
Base Salary (as in effect on the Date of Termination) through the Date of
Termination; (2) any unpaid portion of the Annual Incentive Compensation
previously awarded to the Executive; and (3) in the case of compensation
previously deferred by the Executive, all amounts of such compensation
previously deferred and not yet paid by the Company (unless such payment is
inconsistent with either the terms of any payment election made by the Executive
with respect to such deferred compensation or the applicable plan).
(b) The Company shall promptly pay or reimburse to the
Executive any costs and expenses (and moving and relocation expenses, if
otherwise agreed to by the Company in writing) paid or incurred by the Executive
which would have been payable under Section 4.8 of this Agreement if the
Executive's employment had not terminated.
(c) If, as of the Date of Termination, (1) the sum of the
Executive's age and years of service with the Company equals at least sixty-five
(65), (2) the Executive is at least fifty-eight (58) years old, (3) the
Executive has completed at least ten (10) years of service with the Company, and
(4) the Executive has been employed in his current position (or any other
position in which he is eligible, but for the restriction in this clause, for
retirement payments) for a minimum of four (4) continuous full years of service
following the Effective Date, the Company shall continue providing medical,
dental, and/or vision coverage to the Executive and/or the Executive's family,
at least equal to that which would have been provided to the Executive under
Section 4.7 if the Executive's employment had not terminated, until the earlier
of (A) the date the Executive becomes eligible for any comparable medical,
dental, or vision coverage provided by any other employer, or (B) the date the
Executive becomes eligible for Medicare or any similar government-sponsored or
provided health care program (whether or not such coverage is equivalent to that
provided by the Company), provided that such coverage shall cease immediately if
the Executive violates any of his Continuing Obligations. Following the date on
which the Executive becomes eligible for coverage under Medicare, the Executive
may, at his election, continue to be covered under the Company's health
coverage, if available, provided that the Executive pays all applicable premiums
charged by the Company or its third-party provider(s).
9
(d) The Company shall pay to the Executive, in equal
bi-weekly installments over a period of ten (10) years, beginning with the next
bi-weekly payroll period following the Date of Termination, full or partial
retirement payments, as provided below:
(1) If, as of the Date of Termination, (A) the sum of
the Executive's age and years of service with the Company equals at least
sixty-five (65), (B) the Executive is at least fifty-eight (58) years old,
(C) the Executive has completed at least ten (10) years of service with
the Company, and (D) the Executive has been employed in his current
position (or any other position in which he is eligible, but for the
restriction in this clause, for retirement payments) for a minimum of four
(4) continuous full Years of Service following the Effective Date, the
Executive is entitled to maximum retirement payments for each year during
the ten (10) year payment period equal to the product of sixty percent
(60%) of the Executive's average Base Salary during the three (3)
consecutive full calendar years of employment immediately preceding the
Date of Termination. Notwithstanding the foregoing, if, as of the Date of
Termination, the sum of the Executive's age and years of service with the
Company equal at least sixty-five (65) and the Executive has completed at
least twenty (20) years of service with the Company, but the Executive is
younger than age fifty-eight (58), the Executive shall be entitled to
deferred maximum retirement payments, in the amount and form described in
the preceding sentence, beginning with the next bi-weekly payroll period
following the attainment of age fifty-eight (58).
(2) At the election of the Executive, the actuarial
equivalent of the Executive's retirement payments (determined by utilizing
reasonable actuarial assumptions) may be paid over a period longer than
ten (10) years.
(3) In the event of the Executive's death prior to the
payment of all of the retirement payments determined under this Section
6.4(d), the balance of the payments shall be made to the Executive's
surviving spouse, if any, or to any other beneficiary named by the
Executive in writing.
(4) Any remaining retirement payments shall
immediately cease in the event the Executive works for a competitor (as
determined by the Company in its sole discretion), becomes employed by any
other employer without the prior written consent of the Company, or
violates any of his Continuing Obligations. Notwithstanding the foregoing,
with the prior written consent of the Company, the Executive may be
employed by an entity which is not deemed by the Company to be in
competition with the Company in a capacity in which the economic value of
his total compensation is comparable to his total compensation while
employed by the Company, and receive retirement benefits which are reduced
proportionately by the compensation received by the Executive in the new
position. Also with the prior written consent of the Company, the
Executive may be employed by an entity which is not deemed by the Company
to be in competition with the Company, in a capacity in which his total
compensation is materially less than his total compensation while employed
by the Company, in which case there would be no reduction in retirement
benefits.
(e) The Executive (or the Executive's estate, as the case
may be) shall continue to vest and, if applicable, continue to be permitted to
exercise, all of the rights and interests awarded to the Executive under the
Company's stock plans, for a period of three (3) years following the Date of
Termination (or, if less, for the remainder of the stated terms of the rights
and interests).
(f) The Executive shall continue to be covered under the
Company's directors' and officers' liability insurance, if any, to the extent
such coverage is commercially feasible, and under his separate Indemnification
Agreement with the Company, as if the Executive's employment had not terminated,
for a period of ten (10) years following his Date of Termination (or, in the
case of the Indemnification Agreement, for such longer term as may be provided
for in the Indemnification Agreement).
(g) All other obligations of the Company and rights of the
Executive hereunder shall terminate effective as of the Date of Termination;
provided, however, that except as otherwise
10
specifically modified by the terms of this Agreement the Executive's rights
under the Compensation Plans and Welfare Plans shall be governed by the terms
and provisions of these Plans and are not necessarily severed on the Date of
Termination. In addition, the Executive shall continue to be eligible to make
deferrals under the Company's Executive Deferred Compensation Plan, and under
the LTIP, in accordance with the terms of those Plans.
(h) Except as otherwise provided in this Section 6.4(h), the
payments and benefits provided under this Section 6.4 shall be in lieu of any
payments to which the Executive may have otherwise been entitled under the terms
of Section 6.2, 6.3 or 6.5, and vice versa. In the event a Change in Control
occurs coincident with or following the commencement of the Executive's
retirement payments under this Section 6.4, the payment of any remaining
retirement payments to which the Executive is entitled under this Section 6.4
shall be accelerated and paid in a lump sum cash payment within a reasonable
period of time following the Change in Control. In the event the Executive
becomes eligible for payments under the terms of Section 6.5 following the date
on which the Executive becomes entitled to deferred maximum retirement payments
under this Section 6.4 but prior to the commencement of the retirement payments,
the Executive shall receive payments under the terms of Section 6.5 in lieu of
the deferred retirement payments or any other payments to which the Executive
may have otherwise been entitled under the terms of this Section 6.4.
6.5 Change in Control. If this Agreement is terminated either by
the Executive for Good Reason or by the Company Without Cause, and the
termination occurs within the one (1) year period preceding or the eighteen (18)
month period following the date on which the Change in Control occurs ("Change
in Control Date"):
(a) As reasonable compensation for services rendered by the
Executive to the Company prior to the Date of Termination, the Company shall pay
to the Executive, in a lump sum cash payment within thirty (30) days after the
later to occur of the Date of Termination or the Change in Control Date, the
aggregate of the following amounts:
(1) any unpaid portion of the Executive's Base Salary
(as in effect on the Date of Termination) through the Date of Termination,
any unpaid portion of the Annual Incentive Compensation previously awarded
to the Executive, and any accrued but unpaid Vacation Time as of the Date
of Termination;
(2) an amount equal to two (2) times the sum of the
Executive's Base Salary (as in effect on the Date of Termination) plus the
Executive's Targeted Annual Incentive Compensation for the fiscal year
during which the Date of Termination occurs; and
(3) in the case of compensation previously deferred by
the Executive, all amounts of such compensation previously deferred and
not yet paid by the Company (unless such payment is inconsistent with the
terms of either any payment election made by the Executive with respect to
such deferred compensation or the applicable plan).
(b) The Company shall promptly pay or reimburse to the
Executive any costs and expenses (and moving and relocation expenses, if
otherwise agreed to by the Company in writing) paid or incurred by the Executive
which would have been payable under Section 4.8 of this Agreement if the
Executive's employment had not terminated.
(c) The Company shall continue providing medical, dental,
and/or vision coverage to the Executive and/or the Executive's family, at least
equal to that which would have been provided to the Executive under Section 4.7
if the Executive's employment had not terminated, until the earlier of (1) the
date the Executive becomes eligible for any comparable medical, dental, or
vision coverage provided by any other employer, or (2) the date the Executive
becomes eligible for Medicare or any similar government-sponsored or provided
health care program (whether or not such coverage is equivalent to that provided
by the Company).
11
(d) As reasonable compensation for services provided by the
Executive to the Company prior to the Date of Termination, the Company shall
(through an agency of Company's choosing) provide outplacement services to the
Executive for a period of one (1) year following the later of the Date of
Termination or the Change in Control Date, provided that the cost of such
services shall not exceed $25,000 (or such higher amount as may be approved by
the Board of Directors (or a committee thereof).
(e) The Executive shall fully and immediately vest in all of
the rights and interests awarded to the Executive under the Company's stock
plans.
(f) The Executive shall continue to be covered under the
Company's directors' and officers' liability insurance, if any, to the extent
such coverage is commercially feasible, and under his separate Indemnification
Agreement with the Company, as if the Executive's employment had not terminated,
for a period of ten (10) years following his Date of Termination (or, in the
case of the Indemnification Agreement, for such longer term as may be provided
for in the Indemnification Agreement).
(g) All other obligations of the Company and rights of the
Executive hereunder shall terminate effective as of the Date of Termination;
provided, however, that except as otherwise specifically modified by the terms
of this Agreement the Executive's rights under the Compensation Plans and
Welfare Plans shall be governed by the terms and provisions of these Plans and
are not necessarily severed on the Date of Termination.
(h) In the event the Change in Control Date occurs
subsequent to the Executive's Date of Termination, the payments and benefits
provided under this Section 6.5 shall be reduced by and to the extent of any
payments and benefits previously paid or provided to the Executive under Section
6.3, and in no event shall the Executive or his family be entitled to any
duplicate payments or benefits.
6.6 Cash Termination Excise Tax Payments.
(a) In the event that (1) the closing stock price of the
Company on the date of the Change in Control equals or exceeds the Threshold
Share Price, and (2) it is determined that the payment made under Section 6.4(h)
or Section 6.5(a)(2) ("Cash Termination Payment"), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code (the "Code")
(such excise tax is hereinafter collectively referred to as the "Cash
Termination Excise Tax"), then the Executive shall be entitled to receive the
payment described in Section 6.6(b) below.
(b) The Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any excise tax on the Cash Termination Payment and
any federal, state, and local income and employment taxes and excise tax upon
the Gross-Up Payment, shall be equal to the Cash Termination Payment. The
Gross-Up Payment, if any, shall be paid to the Executive, or, at the discretion
of the Company, to governmental authorities on the Executive's behalf, as soon
as practicable following the payment of the Executive's Cash Termination
Payment, but, in any event, not later than five (5) business days immediately
following the payment of the Executive's Cash Termination Payment.
(c) Subject to the provisions of Section 6.6(d), all
determinations required to be made under this Section 6.6, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by tax counsel appointed by the Company (the "Tax Counsel"). All fees and
expenses of the Tax Counsel shall be borne solely by the Company. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Tax Counsel hereunder, it is possible that
Gross-Up Payments, which will not have been made by the Company, should have
been made ("Underpayment"). In the event that it is ultimately determined in
accordance with the procedures set forth in Section 6.6(d) that the Executive is
required to make a payment of any excise tax, the Tax Counsel shall determine
the amount of the Underpayment that has occurred, and any such Underpayment
shall be promptly paid by the Company to or for the benefit of the Executive.
12
(d) The Executive shall notify the Company in writing of any
claims by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than 30 days after the Executive actually
receives notice in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
The Executive shall not pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(1) give the Company any information reasonably
requested by the Company relating to such claim;
(2) take such action in connection with contesting
such claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company and
reasonably acceptable to the Executive;
(3) cooperate with the Company in good faith in order
to effectively contest such claim; and
(4) if the Company elects not to assume and control
the defense of such claim, permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any excise tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 6.6(d), the Company shall have the right, at its sole option, to
assume the defense of and control all proceedings in connection with such
contest, in which case it may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may either direct the Executive to pay the tax claimed
and xxx for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any excise tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further
provided, that any extension of the statute of limitations relating to payment
of taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's right to assume the defense of and control
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder, and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(e) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 6.6(d), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Section 6.6(d))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
Section 6.6(d), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim, and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid, and the amount of such advance
13
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
6.7 Termination by Reassignment. If this Agreement is terminated
due to Reassignment, the Company shall pay to the Executive, in a lump sum cash
payment within thirty (30) days after the Date of Termination, any unpaid
portion of the Executive's Base Salary (as in effect on the Date of Termination)
through the Date of Termination. All other obligations of the Company and rights
of the Executive hereunder shall terminate as of the Date of Termination;
provided, however, that the Executive's rights under any Compensation Plan or
Welfare Plan shall be governed by the terms and provisions of each such plan and
are not necessarily severed on the Date of Termination.
6.8 Payments Contingent on Executive's Release of Company. All of
the payments and benefits to which the Executive would otherwise be entitled
under Sections 6.2, 6.3, 6.4, 6.5, or 6.6 [except those payments to which the
Executive is entitled under Sections 6.2(a)(1) and 6.2(a)(3), Sections 6.3(a)(1)
and 6.3(a)(3), Section 6.4(a), and Sections 6.5(a)(1) and 6.5(a)(3)] shall be
contingent on the Executive's delivery to the Company of a signed release of all
claims against the Company, in a form specified by the Company.
7. EXECUTIVE'S CONFIDENTIALITY OBLIGATION.
7.1. The Executive hereby acknowledges, understands and agrees that
all Confidential Information is the exclusive and confidential property of the
Company and its Affiliates which shall at all times be regarded, treated and
protected as such in accordance with this Article 7. The Executive acknowledges
that all such Confidential Information is in the nature of a trade secret.
7.2. For purposes of this Agreement, "Confidential Information"
means information, that is used in the business of the Company or its Affiliates
and (a) is proprietary to, about or created by the Company or its Affiliates,
(b) gives the Company or its Affiliates some competitive business advantage or
the opportunity of obtaining such advantage or the disclosure of which could be
detrimental to the interests of the Company or its Affiliates, (c) is designated
as Confidential Information by the Company or its Affiliates, is known by the
Executive to be considered confidential by the Company or its Affiliates, or
from all the relevant circumstances should reasonably be assumed by the
Executive to be confidential and proprietary to the Company or its Affiliates,
or (d) is not generally known by non-Company personnel. Such Confidential
Information includes, without limitation, the following types of information and
other information of a similar nature (whether or not reduced to writing or
designed as confidential):
(a) Internal personnel and financial information of the
Company or its Affiliates, information about vendors that is not generally known
but is known to the Company as a result of the Company's relationship with the
vendor (including vendor characteristics, services, prices, lists and
agreements), purchasing and internal cost information, internal service and
operational manuals, and the manner and methods of conducting the business of
the Company or its Affiliates;
(b) Marketing and development plans, price and cost data,
price and fee amounts, pricing and billing policies, quoting procedures,
marketing techniques, forecasts and forecast assumptions and volumes, and future
plans and potential strategies (including, without limitation, all information
relating to any acquisition prospect and the identity of any key contact within
the organization of any acquisition prospect) of the Company or its Affiliates
which have been or are being discussed;
(c) Names of customers and their representatives, contracts
(including their contents and parties), customer services, and the type,
quantity, specifications and content of products and services purchased, leased,
licensed or received by customers of the Company or its Affiliates;
(d) Confidential and proprietary information provided to the
Company or its Affiliates by any actual or potential customer, government agency
or other third party (including businesses, consultants and other entities and
individuals);
14
(e) Any non-public information about the Company's landfill
development plans, landfill capacity, and the status of the permitting process
with respect to any aspect of the Company's business; and
(f) Any non-public information about the existence or status
of any governmental investigation, charge, or lawsuit, the status or the
position of the Company regarding the value of any claim or charge (whether
filed by the government or a third party), the Company's interest in resolving
any such claim or charge; or any non-public information regarding the Company's
compliance with federal, state or local laws.
7.3. As a consequence of the Executive's acquisition or anticipated
acquisition of Confidential Information, the Executive shall occupy a position
of trust and confidence with respect to the affairs and business of the Company
and its Affiliates. In view of the foregoing, and of the consideration to be
provided to the Executive, the Executive agrees that it is reasonable and
necessary that the Executive make each of the following covenants:
(a) At any time during the Term and thereafter, the
Executive shall not disclose Confidential Information to any person or entity,
either inside or outside of the Company, other than as necessary in carrying out
his duties and responsibilities as set forth in Article 2, without first
obtaining the Company's prior written consent (unless such disclosure is
compelled pursuant to court orders or subpoena, and at which time the Executive
shall give notice of such proceedings to the Company).
(b) At any time during the Term and thereafter, the
Executive shall not use, copy or transfer Confidential Information other than as
necessary in carrying out his duties and responsibilities as set forth in
Article 2, without first obtaining the Company's prior written consent.
(c) On the Date of Termination, the Executive shall promptly
deliver to the Company (or its designee) all written materials, records and
documents made by the Executive or which came into his possession prior to or
during the Term concerning, the business or affairs of the Company or its
Affiliates, including, without limitation, all materials containing Confidential
Information.
7.4 The Executive acknowledges and agrees that the use of the term
"Company" in this Section 7 means both the Company and its Affiliates.
8. DISCLOSURE OF INFORMATION, IDEAS, CONCEPTS, IMPROVEMENTS,
DISCOVERIES AND INVENTIONS. Consistent with the Executive's fiduciary duties to
the Company and its Affiliates, the Executive agrees that during his employment
by the Company and/or its Affiliates, the Executive shall promptly disclose in
writing to the Company all information, ideas, concepts, improvements,
discoveries and inventions, which are conceived, developed, made or acquired by
the Executive, either individually or jointly with others, and which relate to
the business, products or services of the Company or its Affiliates,
irrespective of whether the Executive used the Company's or Affiliate's time or
facilities and irrespective of whether such information, idea, concept,
improvement, discovery or invention was conceived, developed, discovered or
acquired by the Executive on the job, at home, or elsewhere. This obligation
extends to all types of information, ideas and concepts, including, information,
ideas and concepts relating to new types of services, corporate opportunities,
acquisition prospects, the identity of key representatives within acquisition
prospect organizations, prospective names or service marks for the Company's or
Affiliate's business activities, and the like.
9. OWNERSHIP OF INFORMATION, IDEAS, CONCEPTS, IMPROVEMENTS, DISCOVERIES
AND ALL ORIGINAL WORKS OF AUTHORSHIP.
9.1. All information, ideas, concepts, improvements, and
discoveries which are conceived, made, developed or acquired by the Executive or
which are disclosed or made known to the Executive, individually or in
conjunction with others, during the Executive's employment by the Company and/or
its Affiliates and which relate to the business, products or services of the
Company or its Affiliates (including, without limitation, all such information
relating to corporate opportunities, research, financial and
15
sales data, pricing and trading terms, evaluations, opinions, interpretations,
acquisition prospects, the identity of customers or their requirements, the
identity of key contacts within the customers' organizations or within the
organization of acquisition prospects, marketing and merchandising techniques,
and prospective names and service marks) are and shall be the sole and exclusive
property of the Company. Furthermore, all drawings, memoranda, notes, records,
files, correspondence, manuals, models, specifications, computer programs, maps
and all other writings or materials of any type embodying any of such
information, ideas, concepts, improvements, and discoveries are and shall be the
sole and exclusive property of the Company.
9.2. In particular, the Executive hereby specifically sells,
assigns, transfers and conveys to the Company all of his worldwide right, title
and interest in and to all such information, ideas, concepts, improvements, and
discoveries, and any United States or foreign applications therefor. The
Executive shall assist the Company and its nominee at all times and in all
manners, during the Term and thereafter, in the protection of such information,
ideas, concepts, improvements, or discoveries.
9.3. In the event the Executive individually, or jointly with
others, creates, during the Term, any original work of authorship fixed in any
tangible medium of expression which is the subject matter of copyright (such as
videotapes, written presentations on acquisitions, computer programs, drawings,
maps, architectural renditions, models, manuals, brochures or the like) relating
to the Company's or its Affiliate's business products or services, the Company
shall be deemed the author of such work if the work is prepared by the Executive
within the scope of his employment; or, if the work is not prepared by the
Executive within the scope of his employment but is specially ordered by the
Company or its Affiliates as a contribution to a collective work, as a part of a
motion picture or other audiovisual work, as a translation, as a supplementary
work, as a compilation or as an instructional text, then the work shall be
considered to be a work made for hire, and the Company shall be the author of
such work. If such work is neither prepared by the Executive within the scope of
his employment nor a work specially ordered and deemed to be a work made for
hire, then the Executive hereby agrees to sell, transfer, assign and convey, and
by these presents, does sell, transfer, assign and convey, to the Company all of
the Executive's worldwide right, title and interest in and to such work and all
rights of copyright therein. The Executive agrees to assist the Company and its
Affiliates, at all times, during the Term and thereafter, in the protection of
the Company's worldwide right, title and interest in and to such work and all
rights of copyright therein, which assistance shall include, but shall not be
limited to, the execution of all documents requested by the Company or its
nominee and the execution of all lawful oaths and applications for registration
of copyright in the United States and foreign countries.
10. EXECUTIVE'S NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS.
10.1 For purposes of this Section 10:
(a) "Company" means both the Company and its Affiliates.
(b) "Competitor" means any company that provides
non-hazardous solid waste management services in any state in which the Company
does business. "Principal Competitor" means Waste Management, Inc., Republic
Services, Inc., Capital Environmental Resource, Inc., Onyx, Waste Industries
USA, Inc., Waste Connections, Inc., or Xxxxxxx Waste Systems, Inc. (or their
predecessors and successors, subsidiaries, or affiliate operations), or any
other public or private business (including their predecessors and successors,
subsidiaries, or affiliate operations) conducting non-hazardous solid waste
management in three (3) or more states in which the Company does business.
(c) "Rendering services" means any of the following
activities, whether done directly or through others, whether done in person or
through telephonic, electronic, or some other means of communication, and
whether done as a principal, director, officer, agent, employee, contractor or
consultant: (1) performing any kind of services or duties related to
non-hazardous solid waste management or providing portable toilet or street
sweeping services; (2) selling, marketing or brokering non-hazardous solid waste
management, portable toilet or street sweeping services; (3) developing,
managing or otherwise handling data or information concerning potential or
actual acquisitions of businesses that engage in non-hazardous
16
solid waste management; (4) participating in any decision, or developing or
implementing any strategy, to acquire such businesses; or (5) performing any
functions that are the same as, or substantially similar to, the duties
Executive performed under Section 2 of this Agreement.
(d) "Contact" means any direct or indirect interaction
between the Executive and any customer, potential customer or acquisition
prospect which takes place in an effort to further a business relationship and
where a subject of the communication relates to non-hazardous solid waste
management, or providing portable toilet or street sweeping services, whether
done directly or through others, whether in person or through telephonic,
electronic, or some other means of communication, and whether done as a
principal, director, officer, agent, employee, contractor or consultant.
(e) "Non-hazardous solid waste management" means the
collection, hauling, disposal or recycling of non-hazardous refuse.
(f) "Facility" means any office, transfer station, hauling
operation, landfill, or recycling center of the Company.
10.2 Prohibition on Competition and Solicitation During Employment.
(a) At no time during the Term will the Executive, directly
or indirectly, provide service as a principal, director, officer, agent,
employee, consultant or contractor in or to any business that conducts
non-hazardous solid waste management operations or provides portable toilet,
street sweeping or any other services that the Company provides.
(b) At no time during the Term will the Executive directly
or indirectly (1) induce, entice or solicit any employee of the Company or its
Affiliates to leave his or her employment, (2) contact, communicate or solicit
any customer, potential customer, or acquisition prospect of the Company or its
Affiliates for the purpose of ending or avoiding a business relationship, or (3)
use any information regarding actual or potential customers or acquisition
targets of the Company or its Affiliates for any purpose other than in
performing his duties under this Agreement.
10.3 Prohibition Against Competition After Employment.
(a) The Executive agrees that, after the Date of
Termination, he will not compete with the Company to the extent, and subject to
the express limitations, provided in this Section 10.3.
(b) The Executive's obligation not to compete with the
Company will end three (3) years after the Date of Termination. If a court
concludes that three (3) years is an unreasonable time for that obligation, the
Executive's obligation to not compete with the Company will end two (2) years
after the Date of Termination.
(c) During the Executive's employment, he will be a senior
officer of the Company with detailed knowledge of, and active participation in,
most significant management and operational issues. Moreover, he will be part of
a management team that shares and discusses Confidential Information regarding
the Company's operations across the nation, not just in any particular
geographic area around where his office is or will be located. Confidential
Information the Executive may be given about the Company's strategic plans, its
acquisition targets, and cost and profit margins in various markets, for
example, will not be limited to the area around the corporate office or any
other particular geographic area. Thus, the scope of Executive's obligation to
not compete with the Company cannot reasonably be limited to a particular
geographic area. Executive's employment with any business that provides
non-hazardous solid waste management services, regardless of location, is likely
to harm the Company's business interests. Accordingly, Executive will not render
services to any Competitor of the Company (as that term is defined in Section
10.1(b)) that are: (i) rendered in any state in which the Company conducts
business; or (ii) directed at achieving, or intended to achieve, a result in any
state in which the Company conducts business. In the event a court concludes
that this particular restriction is not reasonably limited, Executive will not
render
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services to any Competitor of the Company that are: (i) rendered within
forty (40) miles of any Facility; or (ii) directed at achieving, or intended to
achieve, a result within forty (40) miles of any Facility.
(d) Executive further acknowledges that, while his
employment with any Competitor is likely to cause irreparable harm to the
Company's business interests, his employment with any of the Principal
Competitors (as that term is defined in Section 10.1(b)) would lead to the most
grievous harm to the Company. Accordingly, Executive agrees that he will not
render services to any Principal Competitor of the Company that are: (i)
rendered in a state in which the Company conducts business; or (ii) directed at
achieving, or intended to achieve, a result in any such state. Executive
acknowledges that the restrictions in this Section 10.3(d) are separate and
apart from the restrictions in Section 10.3(c) above.
(e) Additionally, Executive will not render services to any
public or private business providing portable toilet or street sweeping services
within forty (40) miles of any Facility at which such services are provided.
(f) The non-compete restrictions in this Section 10.3 are
expressly intended to preclude the Executive from physically working in a
geographic area that is not covered by the applicable restriction (i.e., working
in a state in which the Company is not conducting business) but where the
Executive's responsibilities would include any management, oversight or analysis
of a business unit in a geographic area covered by the applicable restriction.
10.4 Prohibition Against Solicitation After Employment.
(a) The Executive agrees that, after the Date of
Termination, he will limit his activities relating to the customers, potential
customers, acquisition prospects, and employees of the Company to the extent,
and subject to the express limitations, provided in this Section 10.4.
(b) The Executive's obligations under this Section 10.4 will
end three (3) years after the Date of Termination. If a court concludes that
three (3) years is an unreasonable time for those obligations, Executive's
obligations under this Section 10.4 will end two (2) years after the Date of
Termination.
(c) The Executive will not contact customers, potential
customers or acquisition prospects of the Company for any purpose related to
providing non-hazardous solid waste management services in any state in which
the Company is conducting business. In the event a court concludes that this
particular restriction is not reasonably limited, Executive will not contact
customers, potential customers or acquisition prospects of the Company for any
purpose related to providing non-hazardous solid waste management services
within forty (40) miles of any Facility.
(d) Additionally, the Executive will not contact customers,
potential customers or acquisition prospects of the Company for any purpose
related to providing portable toilet or street sweeping services within forty
(40) miles of any Facility at which such services are provided.
(e) The Executive will not solicit employees of the Company
to work for any other person or to leave their employment. The Executive will
not, directly or indirectly, be involved in the recruiting and/or hiring
(whether that involvement is in the nature of serving as a reference or as a
decision-maker) of persons employed by the Company.
10.5 Other Provisions.
(a) The Executive acknowledges and agrees that a violation
of the promises he has made under this Section 10 is likely to cause irreparable
harm to the Company and justify the grant of injunctive relief. Additionally, to
provide the Company with the protections it has bargained for in this Section
10, any period of time in which the Executive has been in breach of the
provisions in this Section 10 will extend, by that amount of time, the time for
which he should be precluded from further breaching the
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promises made in this Section 10, provided that the Company does not
unreasonably delay in bringing appropriate legal action after discovery of any
such breach by Executive.
(b) If the applicable temporal or geographic limitations
agreed to by the parties in this Section 10 are found by a court to be overly
broad, the parties expressly authorize the judge before whom any dispute is
brought to impose the broadest temporal and geographic limitations permissible
under the law, so as to effectuate the parties' intent and ensure that the
Company obtains the protections it sought and for which it provided material
consideration in this Agreement.
11. MISCELLANEOUS.
11.1. Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been given when delivered by hand or mailed by registered or certified mail,
return receipt requested, as follows (provided that notice of a change of
address shall be deemed given only when received):
If to the Company:
Allied Waste Industries, Inc.
00000 Xxxxx Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Senior Vice-President and General Counsel
If to the Executive:
Xxxxxx X. Xxxxxxxxx
0000 X. 00xx Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
or to such other names or addresses as the Company or the Executive, as the case
may be, shall designate by notice to the other party in the manner specified in
this Section 11.1.
11.2. Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement shall neither operate nor be construed as a waiver
of any subsequent breach by any party. No breach shall be deemed waived unless
the waiver is in a writing signed by the non-breaching party.
11.3. Assignment. This Agreement shall be binding upon and inure to
the benefit of the Company, its Affiliates, successors, legal representatives
and assigns, and upon the Executive, his heirs, executors, administrators, legal
representatives and assigns; provided, however, the Executive agrees that his
rights and obligations hereunder are personal to him and may not be assigned
without the express written consent of the Company.
11.4. Entire Agreement, No Oral Amendments. This Agreement, together
with any schedule or exhibit attached hereto and any document, policy, rule or
regulation referred to herein, replaces and merges all previous agreements and
discussions relating to the same or similar subject matter between the Executive
and the Company and constitutes the entire agreement between the Executive and
the Company with respect to the subject matter of this Agreement. This Agreement
may not be modified in any respect by any verbal statement, representation or
agreement made by any employee, officer, or representative of the Company or by
any written agreement unless signed by an officer of the Company who is
expressly authorized by the Company to execute such document.
11.5. Enforceability. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application.
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11.6. Jurisdiction, Venue. The laws of the State of Arizona shall
govern the interpretation, validity and effect of this Agreement without regard
to the place of execution or the place for performance thereof, and the Company
and the Executive agree that the courts situated in Maricopa County, Arizona
shall have personal jurisdiction over the Company and the Executive to hear all
disputes arising under this Agreement. This Agreement is to be at least
partially performed in Maricopa County, Arizona, and as such, the Company and
the Executive agree that venue shall be proper with the courts in Maricopa
County, Arizona to hear such disputes. In the event either party is not able to
effect service of process upon the other party with respect to such disputes,
the Company and the Executive expressly agree that the Secretary of State for
the State of Arizona shall be an agent of the Company and/or the Executive to
receive service of process on behalf of the Company and/or the Executive with
respect to such disputes.
11.7 Injunctive Relief. The Company and the Executive agree that a
breach of any term of this Agreement by the Executive would cause irreparable
damage to the Company and that, in the event of such breach, the Company shall
have, in addition to any and all remedies of law, the right to any injunction,
specific performance and other equitable relief to prevent or to redress the
violation of the Executive's obligations under this Agreement.
11.8 Withholding. All payments made pursuant to this Agreement shall
be net of payroll and withholding deductions as may be required by law and other
deductions that are either applied generally to employees of the Company for
insurance and other employee benefit plans or authorized by Executive.
11.9 Arbitration. With the sole exception of any breach by the
Executive of the obligations he assumed under Sections 10.1, 10.2 and/or 10.3 of
this Agreement (the breach of which permit the Company to obtain judicial relief
due to the exigent circumstances presented by such a breach), all other alleged
breaches of this Agreement, or any other dispute between the Parties arising out
of or in connection with the Executive's employment with the Company will be
settled by binding arbitration. This Agreement to arbitrate applies to any claim
for relief of any nature, including but not limited to claims of wrongful
discharge under statutory law and common law; employment discrimination based on
federal, state or local statute, ordinance, or governmental regulations,
including discrimination prohibited by: (a) Title VII of the Civil Rights Act of
1964, as amended, (b) the Age Discrimination in Employment Act, (c) the
Americans with Disabilities Act, (d) the Fair Labor Standards Act; and (e)
claims of retaliatory discharge or other acts of retaliation; compensation
disputes; tortious conduct; allegedly contractual violations; ERISA violations;
and other statutory and common law claims and disputes, regardless of whether
the statute was enacted or whether the common law doctrine was recognized at the
time this Agreement was signed.
The Parties understand that they are agreeing to substitute
one legitimate dispute resolution forum (arbitration) for another (litigation)
because of the mutual advantages this forum offers, and are waiving their right
to have their disputes (except as to breaches of Sections 10.1, 10.2 and/or 10.3
of this Agreement) resolved in court. This substitution involves no surrender,
by either party, of any substantive statutory or common law benefit, protection,
or defense.
The arbitration proceeding shall be conducted in Maricopa
County, Arizona in accordance with the National Rules for the Resolution of
Employment Disputes (National Rules) of the American Arbitration Association
(AAA) in effect at the time a demand for arbitration is made.
One arbitrator shall be used and he or she shall be chosen by
mutual agreement of the Parties. If, within thirty (30) days after the Executive
notifies the Company of an arbitrable dispute, no arbitrator has been chosen, an
arbitrator shall be chosen by the AAA pursuant to its National Rules. The
arbitrator shall coordinate and, as appropriate, limit all pre-arbitration
discovery. However, the Parties will have the right to obtain discovery through
appropriate document requests, information requests, and depositions. The
arbitrator shall issue a written decision and award, stating the reasons for the
award. The decision and award shall be exclusive, final and binding on both
Parties, their heirs, executors, administrators, successors, and assigns.
The Company will pay all costs and expenses of the arbitration,
except for the filing fees and costs that would have been required had the
proceeding been initiated and maintained in the
20
Maricopa County Superior Court, which fees and costs the Executive will pay.
Each party shall pay their own attorneys' fees and expenses throughout the
arbitration proceeding. However, the arbitrator may award the successful party
its attorneys' fees and expenses at the conclusion of the arbitration (and any
other relief provided by law).
Dated: July ___, 2004. ALLIED WASTE INDUSTRIES, INC.
By___________________________________
Xxxxxx X. Xxxxxx, Executive Vice
President, Chief Operating Officer
"Company"
Dated: July __, 2004. _____________________________________
Xxxxxx X. Xxxxxxxxx
"Executive"
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