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This Agreement made effective the 24 th day of
January, 2007.
Between:
Laidlaw International, Inc., a Delaware
corporation ("Laidlaw")
and
Kevin E. Benson (the "Executive")
WHEREAS, Laidlaw desires to employ the Executive and the
Executive desires to be employed by Laidlaw;
WHEREAS , Laidlaw and Executive entered into an
Employment Agreement dated August 1, 2006 (the "Employment
Agreement"), which Employment Agreement amended and restated the
initial employment agreement by and between Laidlaw and Executive
dated September 16, 2002, as amended on August 20, 2004,
and replaced Change of Control Agreement dated, September 18,
2002 ; and
WHEREAS , Laidlaw and Executive intend to amend and
restate and replace the Employment Agreement with this
Agreement.
NOW THEREFORE , the parties have agreed that the terms
and conditions of the relationship shall be as follows:
Article 1 — Definitions
Whenever used in this Agreement, the following terms shall have
the meanings set forth below, and when the meaning is intended, the
initial letter of the word is capitalized:
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(a)
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"Accrued Obligations" means any unpaid amounts with respect to
(i) the Executive’s Base Salary through the Date of
Termination, (ii) any Annual Bonus or other incentive
compensation that the Executive may have earned pursuant to the
terms of any applicable incentive compensation or bonus plan of
Laidlaw with respect to any fiscal year or other performance period
completed prior to the Date of Termination,
(iii) reimbursement for any properly incurred, unreimbursed
business expenses incurred prior to termination in accordance with
Laidlaw’s business reimbursement policy applicable to the
Executive prior to the Date of Termination and (iv) payments
and benefits under the employee benefit and incentive plans and
perquisite programs of Laidlaw, in accordance with the respective
terms of those plans and perquisite programs.
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(b) "Agreement" means this employment agreement, as amended
from time to time.
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(c)
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"Annual Bonus" means the annual bonus under Laidlaw’s
Short Term Incentive Plan or any successor annual incentive
plan.
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(d)
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"Base Salary" means the salary of record paid to the Executive
as annual salary, and as further indicated in Section (a) of
Article 4.
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(e)
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"Board" means the Board of Directors of Laidlaw.
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(i)
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the continuous and willful failure or refusal by the Executive
to perform the Executive’s material duties and
responsibilities of his position with Laidlaw (other than any such
failure resulting from the Executive’s incapacity due to
physical or mental illness), which has not ceased within twenty
(20) days after a written demand for substantial performance
is delivered to the Executive by Laidlaw, which demand identifies
with particularity the manner in which Laidlaw believes that the
Executive has not performed such duties;
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(ii)
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Executive’s willful malfeasance or willful misconduct in
connection with Executive’s duties hereunder or any willful
act or willful omission, including a willful failure to abide by
the Laidlaw International, Inc. Code of Business Conduct and
Ethics, which is materially injurious to the financial condition or
business reputation of Laidlaw or any significant Subsidiary;
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(iii)
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the Executive’s commission of an act of fraud,
embezzlement or theft in connection with the Executive’s
duties or in the course of his employment with Laidlaw or any
Subsidiary;
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(iv)
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the conviction of the Executive of, or the entering of a plea of
nolo contendere by, the Executive with respect to a felony; or
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(v)
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Executive’s breach of the provisions of Article 7 of
this Agreement.
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For purposes of this Section (f) and Article 17, no
act or omission by the Executive shall be considered "willful"
unless it is done or omitted in bad faith or without reasonable
belief that the Executive’s action or omission was in the
best interests of Laidlaw. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board
or based upon the advice of counsel for Laidlaw shall be
conclusively presumed to be done, or omitted to be done, in good
faith and in the best interests of Laidlaw. A termination of
employment shall not be deemed to be for Cause unless prior to such
termination the Executive shall have received a copy of a
resolution duly adopted by the affirmative vote of not less than a
majority of the disinterested membership of the Board at a meeting
of such Board called and held for such purpose (after reasonable
notice is provided to the Executive and the Executive is given an
opportunity to be heard before such Board), finding that, in the
good faith opinion of the Board, the Executive is guilty of the
conduct described in Subsection (i), (ii), (iii), (iv) or
(v) of this Section (f) above.
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(g)
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"Change in Control" means the occurrence during the term of this
Agreement of any of the following events:
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(i)
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the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
(a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of fifty
percent (50%) or more of the then-outstanding Voting Stock;
provided, however, that the following acquisitions shall not
constitute a Change in Control: (A) any acquisition directly
from Laidlaw, (B) any acquisition by Laidlaw, (C) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Laidlaw or any Subsidiary, or
(D) any acquisition by any Person pursuant to a transaction
that complies with clauses (A), (B) and (C) of Subsection
(iii) of this Section (g);
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(ii)
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individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason (other than death or
disability) to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by Laidlaw’s stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board (either by a specific vote or by approval of the proxy
statement of Laidlaw in which such person is named as a nominee for
director, without objection to such nomination) shall be considered
as though such individual were a member of the Incumbent Board, but
excluding for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the
Exchange Act) with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board;
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(iii)
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consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets
of Laidlaw (a "Business Combination"), unless, in each case,
immediately following such Business Combination, (A) all or
substantially all of the individuals and entities who were the
beneficial owners of Voting Stock of Laidlaw immediately prior to
such Business Combination beneficially own, directly or indirectly,
more than fifty percent (50%) of the then outstanding shares of
common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of such
transaction owns Laidlaw or all or substantially all of
Laidlaw’s assets either directly or through one or more
subsidiaries) in substantially the same proportions relative to
each other as their ownership, immediately prior to such Business
Combination, of the Voting Stock of Laidlaw, (B) no Person
(excluding any entity resulting from such Business Combination or
any employee benefit plan (or related trust) sponsored or
maintained by Laidlaw, any Subsidiary or such entity resulting from
such Business Combination) beneficially owns, directly or
indirectly, fifteen percent (15%) or more of the then outstanding
shares of common stock of the entity resulting from such Business
Combination or the combined voting power of the then outstanding
voting securities of such entity except to the extent such
ownership existed prior to the Business Combination, and
(C) at least a majority of the members of the board of
directors of the entity resulting from such Business Combination
were members of the Incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing for
such Business Combination; or
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(iv)
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approval by the stockholders of Laidlaw of a complete
liquidation or dissolution of Laidlaw.
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(h) "Code" means the Internal Revenue Code of 1986, as
amended.
(i) "Committee" means the Human Resources and Compensation
Committee of the Board.
(j) "Date of Termination" has the meaning ascribed to such
term in Section (e) of Article 6
(k) "Effective Date" means the date first above
written.
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(l)
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"Employee Benefits" means the perquisites, benefits and service
credit for benefits as provided under any and all employee
retirement income and welfare benefit policies, plans, programs or
arrangements in which the Executive is entitled to participate,
including, without limitation, any stock option, performance share,
performance unit, stock purchase, stock appreciation, savings,
pension, supplemental executive retirement, or other retirement
income or welfare benefit, compensation, incentive compensation,
group or other life, health, medical/hospital or other insurance
(whether funded by actual insurance or self-insurance by Laidlaw or
a Subsidiary), salary continuation, expense reimbursement and other
employee benefit policies, plans, programs or arrangements.
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(m)
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"Exchange Act" means the Securities Exchange Act of 1934.
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(n)
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"Executive" means Kevin E. Benson.
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(o)
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"Good Reason" means the occurrence of one or more of the
following events (regardless of whether any other reason, other
than Cause, for such termination exists or has occurred, including,
without limitation, other employment):
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(i)
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With respect to the two (2) year period commencing on a
Change in Control, the failure to elect or reelect or otherwise to
maintain the Executive in the office or the position, or a
substantially equivalent office or position, of or with Laidlaw
and/or a Subsidiary (or any successor thereto by operation of law
of or otherwise), as the case may be, which the Executive held
immediately prior to a Change in Control, or the removal of the
Executive as a director of Laidlaw and/or a Subsidiary (or any
successor thereto) if the Executive shall have been a director of
Laidlaw and/or a Subsidiary immediately prior to the Change in
Control;
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(ii)
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With respect to the two (2) year period commencing on a
Change in Control, (A) a significant adverse change in the nature
or scope of the authorities, powers, functions, responsibilities or
duties attached to the position with Laidlaw and any Subsidiary
which the Executive held immediately prior to the Change in
Control, (B) a reduction in the aggregate of the
Executive’s Base Salary received from Laidlaw and any
Subsidiary or the Executive’s Incentive Pay opportunity from
Laidlaw or its Subsidiaries, or (C) the termination or denial
of the Executive’s rights to Employee Benefits or a reduction
in the scope or value thereof to a level that is substantially
lower in the aggregate from the level in effect at the time of the
Change in Control, any of which is not remedied by Laidlaw within
ten (10) calendar days after receipt by Laidlaw of written
notice from the Executive of such change, reduction, denial or
termination, as the case may be;
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(iii)
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The liquidation, dissolution, merger, consolidation or
reorganization of Laidlaw or transfer of all or substantially all
of its business and/or assets, unless the successor or successors
(by liquidation, merger, consolidation, reorganization, transfer or
otherwise) to which all or substantially all of its business and/or
assets have been transferred (by operation of law or otherwise)
assumes all duties and obligations of Laidlaw under this Agreement
pursuant to Section (a) of Article 14;
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(iv)
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Laidlaw relocates its principal executive offices (if such
offices are the principal location of the Executive’s work),
or requires the Executive to have his principal location of work
changed, to any location that, in either case, increases the
Executive’s commute to work by more than fifty
(50) miles without, his prior written consent; or
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(v)
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Without limiting the generality or effect of the foregoing, any
material breach of this Agreement by Laidlaw or any successor
thereto which is not remedied by Laidlaw within ten
(10) calendar days after receipt by Laidlaw of written notice
from the Executive of such breach.
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(p)
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"Laidlaw" means Laidlaw International Inc., a Delaware
corporation.
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(q)
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"Notice of Termination" has the meaning ascribed to such term in
Section (d) of Article 6.
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(r)
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"Retirement Plans" means the retirement income, supplemental
executive retirement, excess benefits and retiree medical, life and
similar benefit plans, programs or arrangements of Laidlaw or a
Subsidiary in which the Executive is entitled to participate.
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(s)
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"Subsidiary" means an entity in which Laidlaw directly or
indirectly beneficially owns fifty percent (50%) or more of the
outstanding Voting Stock.
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(t)
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"Target Bonus" has the meaning ascribed such term in Section
(b) of Article 4.
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(u)
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"Voting Stock" means securities entitled to vote generally in
the election of directors.
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Article 2 — Term of the Agreement
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The term of this Agreement shall commence on the Effective Date
and shall continue until terminated in accordance with the
provisions of this Agreement (the "Term").
1
Article 3 — Title; Commencement of Employment;
Reporting
The Executive shall serve as the President and Chief Executive
Officer of Laidlaw. The Executive shall report to the Board.
Article 4 — Compensation
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(a)
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Unless otherwise provided, all dollar amounts set forth in this
Agreement shall be in United States Dollars. The Base Salary of the
Executive for his services is established by the Committee at the
annualized rate of Seven Hundred and Fourteen Thousand and Four
Hundred Dollars ($714,400.00). The Base Salary shall be payable
twice monthly on the fifteenth business day and the last business
day of each month. The Base Salary shall be reviewed annually
during Laidlaw’s normal review period. The review will be
undertaken by assessing the Executive’s achievement of the
overall objectives established by the Committee in consultation
with the Executive and with regard to the market rates of
remuneration paid for similar duties and responsibilities. As a
result of such review, the Executive’s Base Salary may be
increased, but not decreased.
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(b)
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The Executive will be eligible to participate in and be eligible
to receive an Annual Bonus under Laidlaw’s Short Term
Incentive Plan or any successor plan or program. For each fiscal
year of Laidlaw, the Executive’s target bonus shall be no
less than one hundred percent (100%) of Base Salary (the "Target
Bonus") and the maximum bonus shall be no less than two hundred
percent (200%) of Base Salary. The Executive’s right to
receive any bonus under Laidlaw’s Short Term Incentive Plan
shall be determined based upon measurements established by the
Committee after consultation with the Executive and as set forth in
accordance with Laidlaw’s Short Term Incentive Plan.
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(c)
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The Executive shall participate in the Supplemental Executive
Retirement Plan sponsored by Laidlaw for the benefit of its
employees.
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(d)
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Subject to approval by the Committee, the Executive will be
eligible to receive equity or equity based grants from time to
time. Such grants will be on terms and conditions established by
the Committee in accordance with the Laidlaw International, Inc.
Amended and Restated 2003 Equity and Performance Incentive Plan or
any successor plan.
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(a)Laidlaw shall also reimburse the Executive for reasonable gas
and insurance expenses as incurred, provided that the Executive
provides to Laidlaw an itemized written account and receipts
acceptable to Laidlaw.
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It is understood and agreed that the Executive will incur
expenses in connection with his duties under this Agreement,
including, but not limited to, travel expenses, home facsimile
expenses, personal computer expenses and telephone expenses.
Laidlaw shall reimburse the Executive for any such expenses
provided that the Executive provides to Laidlaw an itemized written
account and receipts acceptable to Laidlaw.
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The Executive shall be entitled to five (5) weeks vacation
during each calendar year. The vacation shall be taken at the
discretion of the Executive with the understanding that the
Executive will take into account business needs and operations in
scheduling vacation. All vacation earned by the Executive shall be
governed by Laidlaw’s vacation policies and other similar
benefit policies Laidlaw has in place, from time to time.
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The Executive shall be entitled to those welfare benefit
coverages as are offered by Laidlaw to its employees generally
(such as medical insurance, dental insurance, short and long-term
disability insurance and group term life insurance), all in
accordance with the employee benefit plans and policies maintained
by Laidlaw or a Subsidiary for the benefit of employees of Laidlaw,
and as amended from time to time.
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Laidlaw will reimburse the Executive for up to Fifty Thousand
Dollars ($50,000.00) of expenses incurred by the Executive for the
initial membership fees associated with joining one business club
and one recreational club that the Executive will use in connection
with Laidlaw’s business. Laidlaw will also reimburse the
Executive for ongoing annual dues and business-related expenses
incurred by the Executive in connection with the Executive’s
membership in such business club and recreational club. Laidlaw may
modify, reduce or eliminate such allowance in accordance with any
uniform modification affecting similarly situated executives of
Laidlaw who receive such allowance.
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(f)
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Professional Expenses
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Laidlaw will reimburse the Executive for up to Ten Thousand
Dollars ($10,000.00) annually for expenses incurred by the
Executive in connection with the Executive’s tax preparation
and financial planning. Laidlaw may modify, reduce or eliminate
such allowance in accordance with any uniform modification
affecting similarly situated executives of Laidlaw who receive such
allowance.
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(g)
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Change in Control Vesting
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Upon a Change in Control, and notwithstanding any provision to
the contrary in any applicable plan, program or agreement, upon the
occurrence of a Change in Control, all equity incentive awards held
by the Executive shall become fully vested and all stock options
held by the Executive shall become fully exercisable.
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Article 6 — Termination of Employment
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(a)
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The parties understand and agree that this Agreement and the
Executive’s employment hereunder may be terminated in the
following manner in the specified circumstances:
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(i)
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The Executive’s employment hereunder shall automatically
terminate upon the death of the Executive.
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(ii)
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By Laidlaw, if, as a result of the Executive’s incapacity
due to physical or mental illness which is expected to be of more
than a brief duration, the Executive has been unable to perform the
essential functions of his job for one hundred eighty (180) days
(whether or not consecutive) during any period of eighteen
(18) consecutive months ("Disability"), and no reasonable
accommodation can be made that will allow Executive to perform the
essential functions of his position with Laidlaw. Upon such
termination, the Executive shall be entitled to the same severance
benefits and payments described in Subsection (v) or (vi), as
applicable, as if such termination was a termination by Laidlaw
without Cause.
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(iii)
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By the Executive, at any time, for any reason. Laidlaw may waive
notice required by Section (d) of this Article 6, in
whole or in part, upon immediate payment to the Executive of the
Executive’s Base Salary for such portion of notice period as
is waived by Laidlaw. If such termination is for Good Reason, then
unless the provisions of Subsection (vi) apply, the Executive
shall be entitled to the same payments and benefits as provided in
Subsection (v) for terminations by Laidlaw without Cause. If
such termination is for any other reason, Laidlaw shall pay to the
Executive the Accrued Obligations.
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(iv)
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By Laidlaw, in its absolute discretion, without any pay in lieu
of notice, for Cause. Upon such termination, Laidlaw shall pay to
the Executive the Accrued Obligations.
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(v)
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By Laidlaw, in its absolute discretion and for any reason,
without Cause. Upon such termination, unless the provisions of
Subsection (vi) hereof apply, Laidlaw shall (A) continue
to pay the Executive his Base Salary in effect at the time of such
termination for a period of twenty-four (24) months following
such termination, (B) pay the Executive a monthly amount equal
to one-twelfth of the Executive’s Target Bonus in effect at
the time of Executive’s termination of employment for a
period of twenty-four (24) months following such termination,
(C) continue to provide the Executive term life insurance for
a period of twenty-four (24) months after termination, or, if
such benefits cannot be provided by Laidlaw, Laidlaw shall pay to
the Executive an equivalent lump sum cash amount in lieu of such
benefits, (D) continue to provide the Executive (and his
eligible dependents) with the opportunity to continue to
participate in its group medical and dental benefits (with such
continuation being counted towards any required COBRA continuation
period), at the Executive’s sole expense based on COBRA rates
charged from time to time; provided, however, that Laidlaw shall
pay to the Executive over the twenty-four (24) month period an
amount equal to the full COBRA cost of such coverage,
(E) reasonable outplacement services by a firm selected by the
Executive, at the expense of Laidlaw, in an amount up to
Twenty-Five Thousand Dollars ($25,000.00) and (F) pay to the
Executive the Accrued Obligations. Notwithstanding the foregoing,
if the Executive is a "specified employee" within the meaning of
Code Section 409A at the Date of Termination, then
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(I)
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the total amount which would have been payable to the Executive
over the twenty-four (24) month period pursuant to this
Subsection (v) shall instead be paid to the Executive in equal
monthly amounts over the period commencing on the Date of
Termination and ending no later than the first day of the third
month following the later of (X) the calendar year in which
the Date of Termination occurred and (Y) the fiscal year of
Laidlaw in which the Date of Termination occurred, if such payments
would not be subject to Code Section 409A, or
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(II)
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if the payments specified in Clause (I) would be subject to
Code Section 409A, then such payments shall be paid in the
manner set forth above without regard to Clause (I) hereof,
but payments which would otherwise have been made during the first
six (6) months following the Date of Termination, shall be
withheld and paid to the Executive during the seventh month
following the Date of Termination, increased for interest as
provided in Section (b) hereof.
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(vi)
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In the event that during the two (2) year period commencing
on the date of a Change in Control, Laidlaw terminates the
Executive’s employment without Cause or the Executive
terminates employment for Good Reason, Laidlaw shall pay to the
Executive the amounts described in Annex A within five
(5) business days after the Date of Termination and shall
provide to the Executive the benefits described on Annex A for the
periods described therein. Notwithstanding the foregoing, in the
event that the Executive is at the Date of Termination a "specified
employee" within the meaning of Code Section 409A, payment to
the Executive shall be made within five (5) days following the
expiration of six (6) months from the Date of Termination, and
not before such six (6) month period, if necessary to avoid
adverse tax consequences to the Executive under Code
Section 409A.
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(b)
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Without limiting the rights of the Executive at law or in
equity, in the event it is determined that Laidlaw fails to make
any payment or provide any benefit required to be made or provided
under Section (a) hereof on a timely basis, Laidlaw shall pay
interest on the amount or value thereof at an annualized rate of
interest equal to the so-called composite "prime rate" as quoted
from time to time during the relevant period in The Wall Street
Journal . Any change in such prime rate shall be effective on
and as of the date of such change. In addition, if any payment
described in Subsection (v) or (vi) of Section
(a) hereof by Laidlaw subjects the Executive to the excise tax
under Code Section 409A on such payment, Laidlaw shall pay on
the Executive’s behalf to the applicable taxing authorities,
an amount which, after payment of all state, local and federal
income and employment taxes which may be due on such payment
(calculated at the highest marginal rates), is equal to the excise
tax under Code Section 409A which arose as a result of
Laidlaw’s delay or acceleration in making such payment.
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(c)
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In order to receive the entitlement under Subsection
(vi) of Section (a) hereof, or Clauses (A), (B), (C),
(D) and (E) of Subsection (v) of Section
(a) hereof (whether such termination is by the Executive for
Good Reason or by Laidlaw without Cause), the Executive must
undertake to sign a release in a form satisfactory to Laidlaw,
fully releasing Laidlaw from further claims upon payment of the
amounts stipulated herein and must not revoke such release.
However, the form of release shall not require that the Executive
give up any rights of indemnity which the Executive may have had
against Laidlaw for acts carried out by the Executive in the
ordinary course of Laidlaw’s business, nor shall it require
the release of the benefits under this Agreement payable due to or
after the Executive’s termination of employment. Laidlaw may
withhold payment of such amount until the period during which the
Executive may revoke such waiver (normally seven (7) days) has
elapsed.
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(d)
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Any purported termination of the Executive’s employment by
Laidlaw or by the Executive shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Article 15. "Notice of Termination" shall mean a notice that
shall indicate the specific termination provision in this Agreement
relied upon and shall set 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.
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(e)
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"Date of Termination" shall mean (i) if the
Executive’s employment is terminated because of death, the
date of the Executive’s death, (ii) if the
Executive’s employment is terminated for Disability, the date
Notice of Termination is delivered to the Executive following a
determination that Disability exists pursuant to the provisions of
this Agreement, (iii) if the Executive&r
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