AMENDED AND RESTATED EMPLOYMENT AGREEMENTEmployment Agreement Amendment |
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Search Employment Agreement Amendment by:
Exhibit 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This
Employment Agreement (this “Agreement”), dated as of
January 5, 2007, is entered into between WCA Management Company, L.P. (the
“Company”), WCA Waste Corporation (the “Guarantor”) and
Jerome Kruszka (the “Executive”), and is effective as of
January 1, 2007 (the “Effective Date”).
RECITALS
A. The
Company has previously determined that it is in the best interest of the
Company and its equity holders to retain the Executive and to induce the
continued employment of the Executive for the long term benefit of the Company.
B
The Company desires to continue the employment of the Executive on the terms
set forth below to provide services to the Company and its affiliates, and the
Executive is willing to continue such employment and to continue to provide
such services on the terms set forth in this Agreement.
C. The
Guarantor has determined that it is in the best interests of the Guarantor to
facilitate such retention and continued employment of the Executive by the
Company by guaranteeing the Company’s obligations under this Agreement.
D. The
Company, the Guarantor and the Executive entered into that certain employment
agreement, effective January 1, 2005 (the “Prior Agreement”),
which Prior Agreement is automatically extended as therein provided unless
proper notice of termination is given under the Prior Agreement.
E. The
Company, the Guarantor and the Executive deem it to their mutual best interests
to amend and restate the Prior Agreement as hereinafter set forth in order to
help ensure compliance with any applicable provisions of Section 409A of
the Internal Revenue Code of 1986, as amended, and regulations or other
regulatory guidance issued thereunder and to update provisions of the Prior
Agreement that relate to annual and long-term incentives.
F. The
parties retained the right in Section 17 of the Prior Agreement to modify
the Agreement by a subsequent written agreement executed by all of the parties
thereto.
G. In
consideration of the foregoing and the mutual terms, conditions, and covenants
set forth herein, and for other good and valuable consideration, the parties
hereto do hereby agree that the Prior Agreement is hereby amended and restated
as follows.
AGREEMENT
1. Term
of Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to remain in the employ of the Company, for a
three-year period commencing on the Effective Date of this Agreement and continuing
until the day before the third anniversary of the Effective Date, plus any
extensions made in accordance with the provisions of this Section 1 (the
“Term”). On the first day of each month occurring after the
Effective Date, the initial Term (and any extended Term) shall automatically be
extended for an additional calendar month unless prior to any such first day of
the affected calendar month, the Company or Executive shall have given notice
not to extend the Term. The Company and Executive agree that any such notice by
the Company shall constitute “Good Reason” as defined in Section
2(d) for Executive to terminate Executive’s employment. This Agreement
shall terminate on the earlier of (a) the last day of the Term or (b) such
earlier date as this Agreement is terminated pursuant to Section 2.
Nothing in this Section 1 shall limit the right of the Company or
Executive to terminate Executive’s employment hereunder subject to the
terms and conditions of Sections 7, 10 and 11 and other applicable provisions
of this Agreement.
2. Termination
of Employment. Executive’s employment with the Company shall
terminate upon the earliest of:
(a) the
death of the Executive;
(b) at
any time after Executive has been receiving full or partial salary payments
under the Company’s disability plans for a period of 18 consecutive
months by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 consecutive months, either the Company or
Executive sending the other party written notice that Executive is
“permanently disabled” as defined above in this Section 2(b);
provided, however, that during any period prior to such termination of this
Agreement in which Executive is receiving full or partial salary payments under
the Company’s disability insurance policies, the obligation of the
Company to pay Executive salary pursuant to Section 4 shall cease;
(c) the
Company’s sending Executive written notice that Executive’s
employment is terminated for “cause” which term shall mean
(i) the willful material breach by Executive of this Agreement, (other
than any breach resulting from Executive’s incapacity due to physical or
mental illness), which breach continues for thirty (30) days after actual
receipt of written notice from the Company and which results in, or is
reasonably likely to result in, demonstrable material damage to the Company,
(ii) Executive’s conviction of or plea of guilty to a felony or
Executive’s conviction of a crime involving moral turpitude,
(iii) Executive’s engagement in the fraud of the Company or the
misappropriation or embezzlement of funds from the Company, (iv) or
Executive’s reckless disregard or willful misconduct which misconduct, if
ongoing, (as distinguished from an isolated incident), continues for thirty
(30) days after actual receipt of written notice from the Company and
which results in, or is reasonably likely to result in, demonstrable and
material damage to the Company;
(d) the
Executive’s sending the Company written notice that Executive’s
employment is terminated for “Good Reason” which term shall mean
the occurrence (without the Executive’s
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express written consent) of
any one of the following acts by the Company, or failures by the Company to
act, unless, in the case of any act or failure to act described below, such act
or failure to act is corrected within thirty (30) days after actual
receipt of written notice from Executive: (i) the Company’s breach
of a material term or condition of the Agreement; (ii) except for any
changes required by applicable law, the failure by the Company to continue in
effect any compensation plan in which the Executive participates immediately
prior to the date hereof which is material to the Executive’s total
compensation, including but not limited to the Company’s annual incentive
plan, long-term incentive plan, supplemental executive retirement plan and
equity incentive plan, as applicable, unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made with respect to
such plan; (iii) the Company’s asking or requiring the Executive to
take (or not to take) any action which the Executive in good faith reasonably
believes could be materially misleading to the Company’s employees,
investors, accountants or attorneys and/or any regulatory authority; or
(iv) notice by the Company to the Executive under Section 1 that the
Term will not be extended; provided, however, that the Executive’s right
to terminate the Executive’s employment for Good Reason shall not be
affected by the Executive’s incapacity due to physical or mental illness.
Notwithstanding any other provision of this Section 2(d) to the contrary, within
ninety (90) days (or such other period as the parties may agree to in
writing) following any date on which an act by the Company or failure to act by
the Company gives rise to the right of Executive to terminate employment by the
Company for Good Reason, Executive shall provide the Company written notice
that Executive’s employment is terminated, and any failure to comply with
the requirements of this sentence shall be conclusively deemed to be a waiver
by Executive of the right to terminate his employment hereunder for Good Reason
that is based on that act or failure to act by the Company.
3. Position
and Duties.
(a) The
Executive’s positions shall be those of President and Chief Operating
Officer, and in such capacity Executive shall perform the customary duties and
responsibilities of the positions, and such other services and duties as shall
be assigned to him by the executive management of the Company in accordance
with Company policy. Subject to the Company’s actual receipt of prior
written consent of Executive, these positions, duties, and responsibilities can
be modified as required to suit the specific requirements and needs of the
Company, provided that any such modification shall result in substantially
similar, comparable or higher positions, duties and responsibilities.
Similarly, subject to the Company’s actual receipt of prior written
consent of Executive, the Company may assign Executive part time or full time
to a subsidiary in which case the subsidiary shall be jointly and severally
responsible as, and shall be treated as, the Company under this Agreement for
the period of time the Executive performs services for the subsidiary.
Executive’s place of employment will be located within the greater
Houston, Texas metropolitan area, but Executive will undertake appropriate
business travel as required by the Company.
(b) Executive
agrees to conduct all business in accordance with the Company’s general
policies/directives as they may exist at any given time. Executive shall comply
materially with all applicable laws and regulations of the countries in which
the Company and its affiliates operate.
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(c) Executive
agrees to devote his full time, attention, and efforts during regular business
hours, and at all such other times as may be requested by the Company,
consistent with industry practices, to the business affairs of the Company
during the Term of this Agreement and to perform his duties faithfully and
diligently to discharge the responsibilities assigned to the Executive
hereunder. The foregoing notwithstanding, the parties recognize and agree that
Executive may engage in passive personal investments and other business, civic
or charitable activities that do not conflict with the business and affairs of
the Company or interfere with Executive’s performance of his duties
hereunder.
4. Salary.
Except if Executive’s employment is terminated pursuant to
Section 2(a), (b), (c) or (d) (in which case Section 7(a) applies)
and except as otherwise provided in Section 2(b), during the Term, the Company
shall pay Executive a base salary of $385,785 per year, payable bi-monthly
(“Base Salary”). The Base Salary will be increased each year on the
anniversary of the Effective Date of the Employment Agreement by not less than
the increase during the immediately preceding year in the Consumer Price Index
for the Houston Standard Metropolitan Statistical Area.
5. Annual/Long-Term
Incentives. During the Term, Executive shall participate in the
Guarantor’s annual incentive plan (i.e., the Management Incentive Plan or
any successor thereto) and shall have the opportunity to earn an annual bonus
for the applicable measurement period of up to two hundred percent (200%) of
Executive’s Base Salary based on performance measures and annual incentive
plan goals as shall be established by the Compensation Committee pursuant to
the terms of such plan. Also, during the Term, as soon as practicable on or
following the Effective Date and the first day of each subsequent calendar
year, Executive shall receive grants of restricted stock under the 2004 WCA
Waste Corporation Incentive Plan (or any successor thereto) in an amount equal
to the result obtained by dividing one hundred percent (100%) of
Executive’s Base Salary for the relevant year by the greater of nine dollars
and fifty cents ($9.50) a share or the average of the closing bid and ask
prices of one share of common stock of the Guarantor on the NASDAQ Market for
the last ten (10) trading days of the calendar year that ends immediately
prior to the calendar year for which the grant is made. Such restricted stock
shall vest one-third annually on each of the three (3) anniversaries of
the date of grant of the restricted stock unless other vesting provisions are
prescribed by the Compensation Committee of the Board of Directors of the
Guarantor.
6. Benefits.
Except if Executive’s employment is terminated pursuant to
Section 2(a), (b), (c) or (d) (in which case Section 7(a) applies),
during the Term, Executive and, to the extent applicable, Executive’s
family, dependents and beneficiaries, may participate in the benefit or similar
plans, policies or programs (including, without limitation, the Company’s
business and entertainment expense reimbursement policies, car allowance
policies, 401(k) plans, disability plans, pension plans, health insurance plans
and director and officer liability insurance policies) provided to
similarly-situated Executives under the Company’s standard employment
practices as in effect from time to time. Nothing herein shall be construed to
require the Company to continue or put into effect any plan, practice, policy,
or program or any element thereof. In addition, during the Term, Executive
shall be entitled to three (3) weeks of paid vacation days annually
pursuant to applicable policies and procedures of the Company as in effect from
time to time.
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7. Effects
of Termination of Employment.
(a) Subject
to the provisions of this Section 7, upon termination of Executive’s
employment with the Company for any reason whatsoever, the Company shall pay to
Executive (or in case of Executive’s death, to his estate), within thirty
(30) days of the effective date of such termination, all salary and
expense reimbursements due to Executive through the date of such termination,
and Executive shall be entitled to such benefits as are available pursuant to
the terms of any benefit or similar plans, policies or programs in which
Executive was participating at the time of such termination pursuant to
Section 6 of this Agreement. In addition, upon termination of
Executive’s employment with the Company for death or permanent
disability, in lieu of any further salary or bonus payments as severance to
Executive for periods subsequent to such termination and in lieu of any other
severance otherwise payable to Executive, the Company will pay to Executive (or
to his estate, as applicable), within thirty (30) days of such
termination, a lump sum severance payment, in cash equal to the
Executive’s Base Salary for the Remaining Term of the Agreement as in
effect immediately prior to such termination of Executive’s employment.
Also, if the Company terminates the Executive’s employment for any reason
other than those set forth in Sections 2(a), (b) or (c), or if
Executive terminates Executive’s Employment under Section 2(d), the
Company shall continue throughout the full Term of this Agreement to pay
Executive’s salary pursuant to Section 4, to continue coverage in
any annual and long-term incentive plans pursuant to Section 5 and to
provide Executive’s benefits pursuant to Section 6 (and, if the
Company pays Executive’s salary and provides Executive’s benefits
for the full Term of this Agreement, Executive shall be subject to the
covenants contained in Section 9 through the full term of this Agreement).
References in this Section 7(a) to termination of Executive’s employment
shall mean termination of Executive’s employment with the Company and all
entities required to be aggregated with the Company and treated as one employer
under Section 414(b) or (c) of the Code (as defined in Section 10(a)
hereof). Notwithstanding any provision of this Section 7 to the contrary,
except for any payment due under the first sentence of Section 7(a), any
payment otherwise due under Section 7(a) shall be subject to any applicable
limitations set forth in Section 20 of this Agreement.
(b) Notwithstanding
any termination of this Agreement or Executive’s employment hereunder,
this Section 7 and Sections 10 and 11 of this Agreement, and the
rights and obligations created therein, shall survive without limitation.
(c) Notwithstanding
any provision of this Agreement, it is the intention of the parties hereto that
there shall be no duplication of benefits if the circumstances of
Executive’s termination of employment would otherwise entitle Executive
to payments and benefits under this Section 7 and under Section 10.
Accordingly, in the event of such a termination, if a particular type of
benefit is payable under both Section 7 and Section 10, the Company
shall in good faith compare the two benefits and Executive shall be paid the
greater of the two benefits. Such payment shall be accepted by Executive in
lieu of the lesser benefit otherwise provided under this Agreement.
8. Tax
Withholding. All payments to Executive under this Agreement shall be
subject to withholding or deduction of such amounts as may be required by law.
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9. Noncompetition
and Confidentiality.
(a) The
parties recognize that the employment of Executive with the Company has been
and will continue to be special, unique and of an extraordinary character, and
in connection with such employment Executive has and will continue to acquire
special skill and training. The parties also recognize that the covenants of
Executive contained in this Section 9 are an essential part of
Executive’s engagement by the Company and that, but for the agreement of
the Executive to comply with such covenants, the Company would not have entered
into this Agreement. Executive accordingly agrees that, during the Term,
(i) Executive shall not act or serve, directly or indirectly, as a
principal, agent, independent contractor, consultant, director, officer,
executive, employee or advisor or in any other position or capacity with or
for, or acquire a direct or indirect ownership interest in or otherwise conduct
(whether as stockholder, partner, investor, joint venturer, or as owner of any
other type of interest), any Competing Business (defined below); provided,
however, that this clause shall not prohibit the Executive from being the owner
of (A) up to 5% of any class of outstanding securities of any entity if
such class of securities is publicly traded or (B) any other securities
owned by Executive on the date of this Agreement, and (ii) Executive shall
not, in connection with or for the benefit of any person or entity engaged in
the non-hazardous solid waste business, solicit, induce, divert or take away,
any officer, employee or consultant of the Company.
(b) From
the date hereof, Executive shall hold in secrecy for the Company all trade
secrets and other confidential information relating to the business and affairs
of the Company that have come or may have come to his attention during his
employment with the Company, including information concerning costs, profits,
markets, sales, business development plans, lists of clients or customers,
lists of acquisition targets and other information about such acquisition
targets and other information of a similar nature (such categories of
information being referred to herein as “Confidential
Information”). Executive shall not use for his own benefit or disclose to
any person any Confidential Information other than in the ordinary course of
the Company’s business or in response to a court order, unless such use
or disclosure has the prior written authorization of the Company. Executive
shall deliver to the Company, upon request, all correspondence, memoranda,
notes, records, plans, customer lists, product compositions and other documents
and all copies thereof, whether in hard copy form or electronically or
magnetically stored, made, composed, or received by the Executive, solely or
jointly with others, that are in the Executive’s possession, custody or
control and that are related in any manner to the past, present or anticipated
business of the Company.
(c) For
the purposes of this Section 9, “Competing Business” shall
mean an individual, business, corporation, association, firm, undertaking,
partnership, joint venture, organization or other entity that operates non-hazardous
solid waste landfills, non-hazardous solid waste collection businesses or
similar facilities or businesses within a 50-mile radius of any of the
landfills or similar facilities of the Company, Guarantor or any affiliate
thereof.
(d) Should
any portion of this Section 9 be deemed unenforceable because of the
scope, duration or territory encompassed by the undertakings of the Executive
hereunder, and only in such event, then the Executive and the Company consent
and agree to such limitation on scope, duration or territory as may be finally
adjudicated as enforceable by a court of competent jurisdiction after the
exhaustion of all appeals.
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(e) The
covenants in this Section 9 shall be construed as an agreement ancillary
to the other provisions of this Agreement, and the existence of any claim or
cause of action of the Executive against the Company, whether predicated on
this Agreement or otherwise, other than a claim or cause of action based on the
Company’s failure to pay Executive amounts payable to Executive
hereunder, shall not constitute a defense to the enforcement by the Company of
this covenant.
(f) It
is expressly recognized and agreed that the covenants set forth in this
Section 9 are for the purpose of restricting the activities of the
Executive only to the extent necessary for the protection of the legitimate
business interests of the Company, and the Company and the Executive agree that
said covenants are reasonable for that purpose and that such covenants do not and
will not preclude Executive from engaging in activities sufficient for the
purpose of earning a living.
10. Additional
Consideration.
(a) Change
in Control. In the event of the occurrence of a “Change in
Control” (defined below), and, within twenty-four (24) months
following such Change in Control, Executive’s employment shall be
involuntarily terminated for any reason other than for cause or Executive
terminates Executive’s employment due to (i) suffering a significant
reduction in reporting level (as determined by Executive in good faith),
(ii) suffering a reduction in Base Salary and annual incentive
compensation at target by ten percent (10%) or more or (iii) being
required to relocate from the regular assigned work place by more than fifty (50) miles
from Executive’s regular assigned work place, subject to any applicable
limitation under Section 20, the Company shall pay to Executive, within
thirty (30) days after such termination of employment following such
Change in Control that gives rise to the payment due hereunder, a lump sum
payment, in cash, equal to three (3) times the sum of
(i) Executive’s annual Base Salary as in effect immediately prior to
the Change in Control and (ii) Executive’s Average Annual Bonus
(defined below). References in this Section 10(a) to termination of
Executive’s employment shall mean termination of Executive’s
employment with the Company and all entities required to be aggregated with the
Company and treated as one employer under Section 414(b) or (c) of the Code
(as defined below). “Change in Control” shall mean the occurrence
during the Term of this Agreement, of an one of the following events:
(i)
An acquisition of any common stock (“Common Stock”), par value $.01
per share, of the Guarantor or other securities entitled to vote, or
convertible into or exercisable for securities entitled to vote, in the
election of directors (such Common Stock and other securities hereinafter being
referred to as the “Voting Securities”) of the Guarantor by any
Person (as specified in Section 3(a)(9) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and used in Sections 13(d)
and 14(d) thereof), including for purposes of this Section the Guarantor or its
Affiliates, immediately after which such Person has Beneficial Ownership (as
defined below) of fifty percent (50%) or more of the combined voting power of
the Guarantor’s then outstanding Voting Securities; provided, however,
a Change in Control shall not be deemed to have occurred by reason of an
acquisition of fifty percent (50%) or more of the
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Guarantor’s Voting
Securities by an employee benefit plan maintained by the Guarantor or any of
its Affiliates or by a Person in a Non-Control Transaction (as defined below);
or
(ii)
The individuals who, as of the date of this Agreement are members of the Board
of Directors of the Guarantor (the “Incumbent Board”), cease for
any reason to constitute at least two/thirds (2/3) of the members of the Board
of Directors of the Guarantor; provided, however, that an individual
will be treated as a member of the Incumbent Board if the members of the Board
of Directors of the Guarantor prior to such individual’s nomination
unanimously approve such individual’s nomination and election to the
Board of Directors of the Guarantor and provided further that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened proxy contest or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board of Directors of
the Guarantor (a “Proxy Contest”), including by reason of any
agreement intended to avoid or settle any Proxy Contest; or
(iii)
The consummation of:
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(A) |
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A merger,
consolidation or reorganization with or into the Guarantor or in which
securities of the Guarantor are issued (a “Merger”), unless such
Merger, consolidation or reorganization occurs in connection with a
Non-Control Transaction; |
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(B) |
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A complete
liquidation or dissolution of the Guarantor; or |
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(C) |
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The sale or
other disposition of all or substantially all of the assets of the Guarantor
to any Person (other than a transfer to an employee benefit plan or Affiliate
of the Guarantor or under conditions that would constitute a Non-Control
Transaction with the disposition of assets being regarded as a Merger for
this purpose). |






