EXHIBIT 10.14
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT between Waste Holdings, Inc., a North Carolina corporation
(the "Company"), and D. Stephen Grissom (the "Employee"), is made as
of this 30/th/ day of October, 2001.
RECITALS
A. The Employee holds a position of significant importance with the
Company.
B. The Company believes that, in the event it is confronted with a
situation that could result in a Change of Control (as defined below),
continuity of management at the Company will be essential to the Company's
continued successful operations.
C. The Company understands that any such situation will present
significant concerns for the Employee with respect to his financial and job
security.
D. The Company desires to assure itself of the Employee's services during
the period in which it is confronting such a situation, and to provide the
Employee certain financial assurances to enable the Employee to perform the
responsibilities of his position without undue distraction and to exercise his
judgment without bias due to his personal circumstances.
E. To achieve these objectives, the Company and the Employee desire to
enter into an agreement providing the Company and the Employee with certain
rights and obligations upon the occurrence of a Change of Control.
AGREEMENTS
NOW, THEREFORE, in consideration of the recitals and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Employee as follows:
1. Operation of Agreement.
(a) Effective Date. The effective date of this Agreement shall be the
date on which a Change of Control occurs (the "Change of Control Date"),
provided that, if the Employee is not employed by the Company for any or no
reason on the Change of Control Date, this Agreement shall be void and without
effect.
(b) Employment Protection Benefits. If, on or before the second
anniversary of the Change of Control Date, (x) the Company terminates the
Employee's employment other than for death, for Disability (as defined below) or
for Cause (as defined below) or (y) the Employee terminates his employment for
Good Reason (as defined below), or such termination for any reason other than
death, Disability or for Cause occurs in contemplation of a Change of Control
which Change of Control does in fact occur (such termination within ninety (90)
days
prior to the Change of Control Date being presumed to be in contemplation of a
Change of Control unless rebutted by evidence to the contrary), the Company
shall pay to the Employee an amount (the "Severance Amount") equal to the sum of
(i) the Employee's annual base salary, as then in effect prior to any reduction
therein with respect to taxes, employee benefit plans or other mandatory or
elective withholdings therefrom (the "Base Salary"), and (ii) the average of the
annual bonuses paid to the Employee for each of the last two fiscal years of the
Company ending prior to the Change of Control Date subject to Employee's
compliance with the restrictive provisions set forth in Section 1(c) hereof.
Such Severance Payments shall be paid in equal installments on the Company's
regularly scheduled paydays, net of any federal, state and local payroll taxes
and other withholdings legally required or properly requested by Employee, in
accordance with the Company's regular payroll practices and procedures.
(c) In the event that Employee is entitled to receive the Severance
Amount provided in Section 1(b), Employee promises and agrees that for the
duration of the twelve-month period in which Employee is receiving such
Severance Payments, he will not, either directly or indirectly, for himself or
on behalf of any other individual, partnership, firm, corporation or other
entity:
(i) Engage in, own any interest in (other than less than five
percent (5%) of the outstanding shares of any corporation), manage,
operate, control, or serve as a director or officer of any business
that is engaged in the provision or sale of solid waste collection and
removal services, solid waste transportation services, solid waste
recycling services and the ownership and/or operation of landfills
(the "Covered Services") within the "Restricted Area" (as defined
below);
(ii) Be employed in, engage in, or render services competing
with the Covered Services within the Restricted Area;
(iii) Influence or attempt to influence any of the customers with
whom Employee had contact on behalf of the Company, its subsidiaries,
or affiliates, to divert its purchases of any of the Covered Services
to any other individual, partnership, firm, corporation or other
entity; or
(iv) Solicit any of the employees or sales representatives of
the Company or of any of its subsidiaries or affiliates to work for
any business, individual, partnership, firm, corporation or other
entity then in competition with the Company or any of its subsidiaries
or affiliates.
(v) For purposes of this Agreement, the "Restricted Area" shall
mean the States of Alabama, Florida, Georgia, Mississippi, North
Carolina, South Carolina, Tennessee, and Virginia.
(vi) Employee acknowledges that the Company is doing business
throughout the Restricted Area, and recognizes that the time limits,
geographic scope, and the types and limitations of activities set
forth herein above are
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reasonable and necessary to protect the legitimate interests of the
Company. It is the desire and intent of the parties that the
provisions of this Section 1 shall be enforced to the fullest extent
permitted under the laws and public policies of each jurisdiction in
which enforcement is sought. If any court determines that any
provision of this Section 1 is unenforceable because of the duration
or geographic scope of such provision, such court shall have the power
to reduce the duration or scope of such provision, as the case may be,
and, in its reduced form, such provision shall then be enforceable.
d. Notwithstanding the employment protection provisions of this
Agreement, Employee's employment is and shall continue to be "at will."
Employee's employment may be terminated at any time by either party, for any or
no cause or reason, subject to the terms of this Agreement.
e. Accelerated Vesting of Options. All options to purchase the
Company's securities granted to and then held by Employee shall automatically
vest in full upon a Change of Control; provided, further, that in the event the
Employee's employment is terminated prior to the Change of Control Date under
circumstances which ultimately give rise to Employee's right hereunder to
receive the Severance Amount, then notwithstanding such termination, all of the
Employee's options held on such termination date will accelerate and vest on the
Change of Control Date and shall remain exercisable for 90 days thereafter.
2. Definitions.
(a) Change of Control. For the purposes of this Agreement, a "Change
of Control" shall mean any (i) "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than a
majority owned subsidiary of the Company, any of the then current stockholders,
any members of the immediate family of any of the then current stockholders, any
entity which holds any of the Company's securities for the benefit of any of the
then current stockholders or members of any such stockholder's immediate family,
or any other business entity which is owned or controlled by one or more of the
then current stockholders (the "Excluded Holders"), becomes the beneficial
owner, directly or indirectly, of securities of the Company representing more
than 50% of the combined voting power of the Company's then outstanding
securities or (ii) a sale or transfer of substantially all of the assets of the
Company to any person other than an Excluded Holder or as part of sale-leaseback
transaction (or a series of such transactions). The phrase "then current
stockholders" means the stockholders of the Company immediately prior to the
Change of Control Date.
(b) Cause. For purposes of this Agreement, "Cause" means (i) the
Employee's conviction or plea of nolo contendere to a felony; (ii) an act or
acts of dishonesty or misconduct on the Employee's part which result or are
intended to result in material damage to the Company's business or reputation;
or (iii) repeated material violations by the Employee of his position,
authority, duties or responsibilities as in effect at the Change of Control
Date.
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(c) Good Reason. "Good Reason" means the occurrence of any of the
following, without the express written consent of the Employee, after the
occurrence of a Change of Control:
(i) any failure by the Company, other than an insubstantial or
inadvertent failure remedied by the Company promptly after receipt of
notice thereof given by the Employee, to provide the Employee with a
base salary or annual cash incentive compensation opportunities at a
level which, in each case, is at least the same as the Base Salary
paid, or incentive compensation opportunities made available, to the
Employee immediately prior to the Change of Control Date;
(ii) the Company's requiring the Employee to be based at any
office or location more than 50 miles from that location at which he
performed his services for the Company immediately prior to the Change
of Control, except for travel reasonably required in the performance
of the Employee's responsibilities; or
(iii) any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by
Section 5(b).
In no event shall the mere occurrence of a Change of Control, absent
any further impact on the Employee, be deemed to constitute Good Reason.
(d) Disability. For purposes of this Agreement, "Disability" shall
mean the Employee's inability to perform the duties of his position, as
determined in accordance with policies and procedures applicable with respect to
the Company's long-term disability plan, as in effect immediately prior to the
Change of Control Date.
3. Other Benefits and Provisions Relating to Termination.
(a) Earned Salary and Accrued Obligations. The Severance Amount shall
be in addition to and neither a limitation of, nor an offset against, the amount
payable to the Employee in respect of (i) his Base Salary earned through the
date of termination, (ii) any vested amounts or benefits owing to the Employee
under the Company's otherwise applicable employee benefit plans and programs,
including any compensation previously deferred by the Employee (together with
any accrued earnings or match thereon) and not yet paid by the Company and any
earned and accrued vacation pay not yet paid by the Company and (iii) any stock
options held by the Employee with respect to the Company's securities.
(b) Continuation of Benefits. If the Employee is entitled to receive
the Severance Amount, the Employee (and, to the extent applicable, his
dependents) shall be entitled, after the effective date of the Employee's
termination until the earlier of (x) 12 months following the date of such
termination (the "End Date") or (y) the date the Employee becomes eligible for
comparable benefits under a similar plan, policy or program of a subsequent
employer, to continue participation in the Company's medical, dental, and life
insurance benefit
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plans the ("Benefit Plans"). To the extent any such benefits cannot be provided
under the terms of the applicable plan, policy or program, the Company shall
provide a comparable benefit under another plan or from the Company's general
assets. The Employee's participation in the Benefit Plans will be on the same
terms and conditions that would have applied had the Employee continued to be
employed by the Company through the End Date.
(c) Notice of Termination. Any termination by the Company for Cause
or for Disability or by the Employee for Good Reason shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section
6(d). For purposes of this Agreement, a "Notice of Termination" means a written
notice given, in the case of a termination for Cause, within 10 business days of
the Company's having actual knowledge of the events giving rise to such
termination, in the case of a termination for Disability and in the case of a
termination for Good Reason, within 60 days of the Company's or the Employee's
having actual knowledge of the events giving rise to such termination, as
applicable, and which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated, and (iii) if the termination date
is other than the date of receipt of such notice, specifies the termination date
of this Agreement (which date shall not be more than 15 days after the giving of
such notice). The failure by the Employee to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his rights
hereunder.
(d) Discharge of the Company's Obligations. Except as expressly
provided in the last sentence of this Section 3(d), the Severance Amount and the
amounts payable and benefits provided in respect of the Employee pursuant to
Section 3 following termination of his employment shall be in full and complete
satisfaction of the Employee's rights under this Agreement and any other claims
he may have in respect of his employment by the Company or any of its
subsidiaries. Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon the Employee's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to the Employee in connection with this Agreement or otherwise in connection
with the Employee's employment with the Company and its subsidiaries. Nothing in
this Section 3(d) shall be construed to release the Company from its obligation
under Section 3(e) below to indemnify the Employee.
(e) Indemnification. From and after the Change in Control Date, the
Company shall indemnify the Employee and hold the Employee harmless from and
against any claim, loss or cause of action arising from or out of the Employee's
performance as an officer, director or employee of the Company or any of its
subsidiaries or in any other capacity, including any fiduciary capacity, in
which the Employee serves at the request of the Company to the same extent, to
the fullest extent permitted by the North Carolina Business Corporation Act, the
Company's bylaws and the Company's articles of incorporation then in effect.
4. Full Settlement. Subject to (i) the Employee's compliance with the
restrictive provisions set forth in Section 1(c) and (ii) any claims for
material damage to the Company's business or reputation arising from any act or
acts of dishonesty or misconduct by the Employee,
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the Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense, or other right which the Company may have against the
Employee or others whether by reason of the subsequent employment of the
Employee or otherwise.
5. Successors.
(a) This Agreement is personal to the Employee and, without prior
written consent of the Company, shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Employee's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors. This Agreement may be assigned by the Company to
any successor so long as such successor assumes all the obligations, liabilities
and duties of the Company as contained in this Agreement either contractually or
by operation of law. The Company shall require any successor who purchases all
or substantially all of the assets of the Company, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent as the
Company would be required to perform if no such succession by purchase had taken
place.
6. Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of North Carolina, applied without
reference to principles of conflict of laws.
(b) Arbitration. Excepting the Employee's violation of the
restrictive provisions set forth in Section 1(c), any dispute or controversy
arising under or in connection with this Agreement shall be resolved by binding
arbitration. The arbitration shall be held in Raleigh, North Carolina and except
to the extent inconsistent with this Agreement, shall be conducted in accordance
with the Expedited Employment Arbitration Rules of the American Arbitration
Association then in effect at the time of the arbitration, and otherwise in
accordance with principles which would be applied by a court of law or equity.
Except as the arbitrator otherwise decides is fair and reasonable, the
prevailing party shall be entitled to an award of its reasonable out-of-pocket
costs and expenses (including attorneys' and arbitrators' fees) relating to such
proceeding. The arbitrator shall be acceptable to both the Company and the
Employee. If parties cannot agree on an acceptable arbitrator, the dispute shall
be heard by a panel of three arbitrators, one appointed by each of the parties
and the third appointed by the other two arbitrators.
(c) Legal Fees. If either the Employee or the Company asserts any
claim in any contest or dispute which is not resolved by arbitration as set
forth in Section 6(b) (whether initiated by the Employee or by the Company) as
to the validity, enforceability or interpretation of any provision of this
Agreement, the prevailing party shall be entitled to an award of its
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reasonable out-of-pocket costs and expenses (including attorneys' fees) relating
to such contest or dispute upon presentation of proof of such expenses.
(d) Entire Agreement. Upon the Change of Control Date, this Agreement
shall constitute the entire agreement between the parties hereto with respect to
the matters referred to herein. No other agreement relating to the terms of the
Employee's employment by the Company, oral or otherwise, shall be binding
between the parties unless it is in writing and signed by the party against whom
enforcement is sought. There are no promises, representations, inducements or
statements between the parties other than those that are expressly contained
herein. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives. In the event any provision of this Agreement is
invalid or unenforceable, the validity and enforceability of the remaining
provisions hereof shall not be affected. The Employee acknowledges that he is
entering into this Agreement of his own free will and accord, and with no
duress, that he has read this Agreement and that he understands it and its legal
consequences.
(e) Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand-delivery to the other party or by
registered or certified mail, return receipt requested, addressed as follows:
If to the Employee: at the home address of the Employee noted at the time
on the records of the Company
If to the Company: Waste Holdings, Inc.
3301 Benson Drive, Suite 601
Raleigh, NC 27609
Attn: President
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and other communications shall be
effective when actually received by the addressee.
[THE NEXT PAGE IS THE SIGNATURE PAGE.]
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IN WITNESS WHEREOF, the Employee has hereto set his hand and the Company
has caused this Agreement to be executed in its name on its behalf, and its
corporate seal to be hereunto fixed and attested by its Corporate Secretary, all
as of the day and year first above written.
[CORPORATE SEAL] WASTE HOLDINGS, INC.
ATTESTED: By: /s/ Lonnie C. Poole, Jr.
------------------------
Lonnie C. Poole, Jr.
Chairman and CEO
/s/ Carol G. Dalton
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Asst. Corporate Secretary
WITNESSED: EMPLOYEE:
/s/ Paul L. Brunswick /s/ D. Stephen Grissom
- ---------------------------- ----------------------
Name: Paul L. Brunswick D. Stephen Grissom
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