1
EXHIBIT 10.43
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of October 25,
1999, or such earlier date as the parties agree (the "Effective Date"), by and
between Jerri Hunt (the "Employee") and Waste Connections, Inc., a Delaware
corporation (the "Company"), with reference to the following facts.
The Company desires to engage the services and employment of the
Employee, and the Employee is willing to accept employment by the Company, on
the terms and conditions set forth below.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein, the Company and the Employee agree as follows:
1. Employment. The Company agrees to employ the Employee, and the
Employee agrees to accept employment with the Company, on the terms and
conditions stated herein.
2. Position and Responsibilities. During the Term, the Employee shall
serve as Vice President of Human Resources and Risk Management of the Company,
reporting directly to the Company's Executive Vice President Operations (Darrell
Chambliss as of the effective date of this Agreement). The Employee shall be
based in the Company's corporate headquarters in California and shall be
responsible for oversight of all human resources and risk management matters
relating to the Company's operations. The Employee shall perform such other
duties and responsibilities as the Executive Vice President - Operations or the
Board of Directors (the "Board") of the Company may reasonably assign to the
Employee from time to time. The Employee shall devote such time and attention to
her duties as are necessary to the proper discharge of her responsibilities
hereunder. The Employee agrees to perform all duties consistent with (a)
policies established from time to time by the Company and (b) all applicable
legal requirements.
3. Term. The period of the Employee's employment under this Agreement
(the "Term") shall commence on the Effective Date and continue until the second
anniversary of the Effective Date, unless terminated earlier as provided herein
or extended by the Board. At the end of the initial Term, this Agreement shall
be renewed automatically for successive Terms of one year, unless either party
shall have given the other notice of termination hereof as provided herein.
4. Compensation, Benefits and Reimbursement of Expenses.
(a) Compensation. The Company shall compensate the Employee
during the Term of this Agreement as follows:
(1) Base Salary. The Employee shall be paid a base
salary ("Base Salary") of not less than Eighty Thousand Dollars ($80,000) per
year in installments consistent with the Company's usual practices. The Board
shall review the Employee's Base Salary on each
2
anniversary of the Effective Date or more frequently, at the times prescribed in
salary administration practices applied generally to management employees of the
Company.
In addition, if on the first anniversary of the
Effective Date the gross in-the-money value of the Options to purchase 20,000
shares of the Company's Common Stock granted to the Employee pursuant to Section
4(a)(3) below is not at least $100,000, the Employee's Base Salary shall be
adjusted to Eighty-Eight Thousand Dollars ($88,000) per year as of such date. If
on such date the gross in-the-money value of the Options to purchase 20,000
shares of the Company's Common Stock granted to the Employee pursuant to Section
4(a)(3) below is at least $100,000, the Employee's Base Salary shall be adjusted
to Eighty-Three Thousand Five Hundred Dollars ($83,500) per year as of such date
(2) Performance Bonus. The Employee shall be entitled
to an annual cash bonus (the "Bonus") based on the Company's attainment of
reasonable financial objectives to be determined annually by the Board. The
maximum annual Bonus will equal thirty percent (30%) of the applicable year's
ending Base Salary and will be payable if the Board determines, in its sole and
exclusive discretion, that that year's financial objectives have been fully met.
The Employee's eligibility for fifty percent (50%) of the Bonus will be based on
the achievement of annual performance objectives relating to the Employee's
department, as set by the President and Executive Vice President - Operations of
the Company, and her eligibility for the other fifty percent (50%) of the Bonus
will be based on the Company's achievement of annual earnings per share goals
set by the Board each year. The first annual Bonus for which the Employee may be
eligible will relate to her performance during the year ending December 31,
2000. Any Bonus shall be paid in accordance with the Company's bonus plan, as
approved by the Board; provided that in no case shall any portion of the Bonus
with respect to any fiscal year be paid more than seventy-five (75) days after
the end of such fiscal year.
(3) Grant of Options. On the Effective Date, the
Company shall grant to the Employee, for no additional consideration,
nonqualified stock options (the "Options") to purchase 20,000 shares of the
Company's Common Stock under the Company's Amended and Restated 1997 Stock
Option Plan. The Options shall have a term of 10 years from the date of such
grant and shall be exercisable at a price of $16.875 per share. The Options
shall vest and become exercisable with respect to 6,667 shares on each of the
first and second anniversaries of the Effective Date, and with respect to 6,666
shares on the third anniversary of the Effective Date.
Beginning in 2001, the Employee shall be eligible for
annual grants of additional stock options commensurate with her position and
with option grants to other employees of the Company, based on the
recommendation of the Company's President and as approved by the Board.
The terms of the Options shall be described in more
detail in a Stock Option Agreement to be entered into between the Employee and
the Company. If at any time while any of the Options are still outstanding the
Company amends its Stock Option Plan to provide for a less favorable vesting
schedule for stock options than that provided herein, any Options then
outstanding shall thereupon be converted to warrants entitling the Employee to
2
3
purchase the number of shares of Common Stock for which the Employee's then
outstanding Options may be exercised, on the same terms as provided under such
Options.
(b) Other Benefits. During the Term, the Company shall
provide the Employee with a cellular telephone and will pay or reimburse the
Employee's monthly service fee and costs of calls attributable to Company
business. During the Term, the Employee shall be entitled to receive all other
benefits of employment generally available to other management employees of the
Company and those benefits for which management employees are or shall become
eligible, including, without limitation and to the extent made available by the
Company, medical, dental, disability and prescription coverage, life insurance
and tax-qualified retirement benefits. If the Employee is not eligible for
coverage under the Company's health insurance policy at the commencement of the
initial Term, the Company shall reimburse the Employee for the expenses of
health insurance coverage under COBRA from the commencement of the Term until
the Employee becomes eligible for the health insurance benefits offered by the
Company. The Employee shall be entitled to three (3) weeks of paid vacation
during the first twelve-month period of her employment, and four (4) weeks per
twelve-month period beginning with the second twelve-month period of employment.
(c) Signing Bonus. The Company will pay the Employee an
signing initial bonus of $5,000 on execution of this Agreement.
(d) Reimbursement of Expenses. The Company agrees to pay or
reimburse the Employee for all reasonable travel and other expenses incurred by
the Employee in connection with the performance of her duties under this
Agreement on presentation of proper expense statements or vouchers. All such
supporting information shall comply with all applicable Company policies
relating to reimbursement for travel and other expenses.
(e) Withholding. All compensation payable to the Employee
hereunder is subject to all withholding requirements under applicable law.
5. Confidentiality. During the Term of her employment, and at all times
thereafter, the Employee shall not, without the prior written consent of the
Company, divulge to any third party or use for her own benefit or the benefit of
any third party or for any purpose other than the exclusive benefit of the
Company, any confidential or proprietary business or technical information
revealed, obtained or developed in the course of her employment with the Company
and which is otherwise the property of the Company or any of its affiliated
corporations, including, but not limited to, trade secrets, customer lists,
formulae and processes of manufacture; provided, however, that nothing herein
contained shall restrict the Employee's ability to make such disclosures during
the course of her employment as may be necessary or appropriate to the effective
and efficient discharge of her duties to the Company.
6. Property. Both during the Term of her employment and thereafter, the
Employee shall not remove from the Company's offices or premises any Company
documents, records, notebooks, files, correspondence, reports, memoranda and
similar materials or property of any kind unless necessary in accordance with
the duties and responsibilities of her employment. In the event that any such
material or property is removed, it shall be returned to its proper file or
place of safekeeping as promptly as possible. The Employee shall not make,
retain, remove or
3
4
distribute any copies, or divulge to any third person the nature or contents of
any of the foregoing or of any other oral or written information to which she
may have access, except as disclosure shall be necessary in the performance of
her assigned duties. On the termination of her employment with the Company, the
Employee shall leave with or return to the Company all originals and copies of
the foregoing then in her possession or subject to her control, whether prepared
by the Employee or by others.
7. Termination.
(a) Termination by the Company for Cause or by the Employee.
The employment of the Employee may be terminated for Cause at any time by the
Board, on written Notice of Termination (as defined in Section 8(a)) delivered
to the Employee describing with specificity the grounds for termination. The
employment of the Employee may also be terminated at any time by the Employee on
written Notice of Termination delivered to the Company. Immediately on
termination pursuant to this Section 7(a), the Company shall pay to the Employee
in a lump sum her then current Base Salary under Section 4(a)(1) on a prorated
basis to the Date of Termination (as defined in Section 8(b)). On termination
pursuant to this Section 7(a), the Employee shall forfeit (i) her Bonus under
Section 4(a)(2) for the year in which such termination occurs, and (ii) all
outstanding but unvested Options and other options and rights relating to
capital stock of the Company. For purposes of this Agreement, Cause shall mean:
(1) a material breach of any of the terms of this
Agreement that is not immediately corrected following written notice of default
specifying such breach;
(2) a breach of any of the provisions of Section 10;
(3) repeated intoxication with alcohol or drugs while
on Company premises during its regular business hours to such a degree that, in
the reasonable judgment of the other managers of the Company, the Employee is
abusive or incapable of performing her duties and responsibilities under this
Agreement;
(4) conviction of a felony; or
(5) misappropriation of property belonging to the
Company and/or any of its affiliates.
(b) Termination Without Cause. The employment of the Employee
may be terminated without Cause at any time by the Board on delivery to the
Employee of a written Notice of Termination (as defined in Section 8(a)). On the
Date of Termination (as defined in Section 8(b)) pursuant to this Section 7(b),
the Company shall pay to the Employee in a lump sum an amount equal to the
greater of (i) the Base Salary payable under Section 4(a)(1) through the end of
the then-current Term at the rate in effect on the Date of Termination, or (ii)
one year's Base Salary at the rate in effect on the Date of Termination. In
addition, on termination of the Employee under this Section 7(b), all of the
Employee's outstanding but unvested Options and other options and rights
relating to capital stock of the Company shall immediately vest and become
exercisable. The term of any such options and rights shall be extended to the
third anniversary of the Employee's termination. The Employee acknowledges that
extending the term
4
5
of any option pursuant to this Section 7(b), or Section 7(c) or 7(d), could
cause such option to lose its tax-qualified status if it is an incentive stock
option under the Code and agrees that the Company shall have no obligation to
compensate the Employee for any additional taxes she incurs as a result.
(c) Termination on Disability. If during the Term the
Employee should fail to perform her duties hereunder on account of physical or
mental illness or other incapacity which the Board shall in good faith determine
renders the Employee incapable of performing her duties hereunder, and such
illness or other incapacity shall continue for a period of more than six (6)
consecutive months ("Disability"), the Company shall have the right, on written
Notice of Termination (as defined in Section 8(a)) delivered to the Employee to
terminate the Employee's employment under this Agreement. During the period that
the Employee shall have been incapacitated due to physical or mental illness,
the Employee shall continue to receive the full Base Salary provided for in
Section 4(a)(1) hereof at the rate then in effect until the Date of Termination
(as defined in Section 8(b)) pursuant to this Section 7(c). On the Date of
Termination pursuant to this Section 7(c), all of the Employee's outstanding but
unvested Options and other options and rights relating to capital stock of the
Company shall immediately vest and become exercisable. The term of any such
options and rights shall be extended to the third anniversary of the Employee's
termination.
(d) Termination on Death. If the Employee shall die during
the Term, the employment of the Employee shall thereupon terminate. On the Date
of Termination (as defined in Section 8(b)) pursuant to this Section 7(d), all
of the Employee's outstanding but unvested Options and other options and rights
relating to capital stock of the Company shall immediately vest and become
exercisable. The term of any such options and rights shall be extended to the
third anniversary of the Employee's termination. The provisions of this Section
7(d) shall not affect the entitlements of the Employee's heirs, executors,
administrators, legatees, beneficiaries or assigns under any employee benefit
plan, fund or program of the Company.
8. Provisions Applicable to Termination of Employment.
(a) Notice of Termination. Any purported termination of
Employee's employment by the Company or by the Employee pursuant to Section 7
shall be communicated by Notice of Termination to the Employee or the Company,
as the case may be, as provided herein ("Notice of Termination").
(b) Date of Termination. For all purposes, "Date of
Termination" shall mean the date on which a Notice of Termination is given.
(c) Benefits on Termination. On termination of this Agreement
pursuant to Section 7, all profit-sharing, deferred compensation and other
retirement benefits payable to the Employee under benefit plans in which the
Employee then participated shall be paid to the Employee in accordance with the
provisions of the respective plans. Except as otherwise provided in Sections
7(b), 7(c), 7(d) and 9, if the Employee's employment by the Company is
terminated before all of the Employee's options, warrants and rights with
respect to the Company's capital stock have vested, the Employee shall forfeit
any such options, warrants and rights that are unvested as of the termination
date.
5
6
9. Change In Control.
(a) Payments on Change in Control. Notwithstanding any
provision in this Agreement to the contrary, unless the Employee elects in
writing to waive this provision, a Change in Control (as defined below) of the
Company shall be deemed a termination of the Employee without Cause, and the
Employee shall be entitled to receive and the Company agrees to pay to the
Employee in a lump sum the same amount determined under Section 7(b) that is
payable to the Employee on termination without Cause. In addition, on a Change
of Control, all of the Employee's outstanding but unvested Options and other
options and rights relating to capital stock of the Company shall immediately
vest and become exercisable, and the term of any such options and rights shall
be extended to the third anniversary of the Employee's termination.
After a Change in Control, if any previously outstanding
Option or other option or right (the "Terminated Option") relating to the
Company's capital stock does not remain outstanding, the successor to the
Company or its then Parent (as defined below) shall either:
(i) Issue an option, warrant or right, as appropriate
(the "Successor Option"), to purchase common stock of such successor or Parent
in an amount such that on exercise of the Successor Option the Employee would
receive the same number of shares of the successor's/Parent's common stock as
the Employee would have received had the Employee exercised the Terminated
Option immediately prior to the transaction resulting in the Change in Control
and received shares of such successor/Parent in such transaction. The aggregate
exercise price for all of the shares covered by such Successor Option shall
equal the aggregate exercise price of the Terminated Option; or
(ii) Pay the Employee a bonus within ten (10) days
after the consummation of the Change in Control in an amount agreed to by the
Employee and the Company. Such amount shall be at least equivalent on an
after-tax basis to the net after-tax gain that the Employee would have realized
if she had been issued a Successor Option under clause (i) above and had
immediately exercised such Successor Option and sold the underlying stock,
taking into account the different tax rates that apply to such bonus and to such
gain, and such amount shall also reflect other differences to the Employee
between receiving a bonus under this clause (ii) and receiving a Successor
Option under clause (i) above.
(b) Definitions. For the purposes of this Agreement, a Change
in Control shall be deemed to have occurred if (i) there shall be consummated
(aa) any reorganization, liquidation or consolidation of the Company, or any
merger or other business combination of the Company with any other corporation,
other than any such merger or other combination that would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such transaction, (bb) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company, or if
(ii) any "person" (as defined in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), shall become the
"beneficial owner"
6
7
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
fifty percent (50%) or more of the Company's outstanding voting securities
(except that for purposes of this Section 10(b), "person" shall not include any
person or any person that controls, is controlled by or is under common control
with such person, who as of the date of this Agreement owns ten percent (10%) or
more of the total voting power represented by the outstanding voting securities
of the Company, or a trustee or other fiduciary holding securities under any
employee benefit plan of the Company, or a corporation that is owned directly or
indirectly by the stockholders of the Company in substantially the same
percentage as their ownership of the Company) or if (iii) during any period of
two consecutive years, individuals who at the beginning of such period
constituted the entire Board shall cease for any reason to constitute at least
one-half of the membership thereof unless the election, or the nomination for
election by the Company's shareholders, of each new director was approved by a
vote of at least one-half of the directors then still in office who were
directors at the beginning of the period.
The term "Parent" means a corporation, partnership, trust,
limited liability company or other entity that is the ultimate "beneficial
owner" (as defined above) of fifty percent (50%) or more of the Company's
outstanding voting securities.
10. Non-Competition and Non-Solicitation.
(a) In consideration of the provisions hereof, for the period
commencing on the date hereof and ending on the first anniversary of the
termination of this Agreement, the Employee will not, except as specifically
provided below, anywhere in any county in any state in which the Company is
engaged in business as of such termination date, directly or indirectly, acting
individually or as the owner, shareholder, partner or management employee of any
entity, (i) engage in the operation of a solid waste collection, transporting or
disposal business, transfer facility, recycling facility, materials recovery
facility or solid waste landfill; (ii) enter the employ as a manager of, or
render any personal services to or for the benefit of, or assist in or
facilitate the solicitation of customers for, or receive remuneration in the
form of management salary, commissions or otherwise from, any business engaged
in such activities in such counties; or (iii) receive or purchase a financial
interest in, make a loan to, or make a gift in support of, any such business in
any capacity, including without limitation, as a sole proprietor, partner,
shareholder, officer, director, principal agent or trustee; provided, however,
that the Employee may own, directly or indirectly, solely as an investment,
securities of any business traded on any national securities exchange or quoted
on any NASDAQ market, provided the Employee is not a controlling person of, or a
member of a group which controls, such business and further provided that the
Employee does not, in the aggregate, directly or indirectly, own two percent
(2%) or more of any class of securities of such business.
(b) After termination of this Agreement, the Employee shall
not (i) solicit any residential or commercial customer of the Company to whom
the Company provides service pursuant to a franchise agreement with a public
entity in any county in any state in which the Company is engaged in business as
of such termination date, (ii) solicit any residential or commercial customer of
the Company to enter into a solid waste collection account relationship with a
competitor of the Company in any such county, (iii) solicit any such public
entity to enter into a franchise agreement with any such competitor, (iv)
solicit any officer, employee or contractor of the Company to enter into an
employment or contractor agreement with a
7
8
competitor of the Company or otherwise interfere in any such relationship, or
(v) solicit on behalf of a competitor of the Company any prospective customer of
the Company that the Employee called on or was involved in soliciting on behalf
of the Company during the Term, in each case until the second anniversary of the
date of such termination, unless otherwise permitted to do so by Section 10(a);
provided that if the Employee is terminated by the Company without Cause by the
Company pursuant to Section 7(b), the restrictions in this Section 10(b) shall
apply only for as many months after such termination as are used to calculate
the amount payable under Section 7(b) to the Employee on such termination
(notwithstanding any election by the Employee pursuant to section 7(b) to
forfeit all or part of such lump sum payment in exchange for the Company's
payment of certain relocation costs).
(c) If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 10 is invalid
or unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration or area of the term or provision, to delete specified words or phrases
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
11. Indemnification. As an employee and agent of the Company, the
Employee shall be fully indemnified by the Company to the fullest extent
permitted by applicable law in connection with her employment hereunder.
12. Survival of Provisions. The obligations of the Company under
Section 11 of this Agreement, and of the Employee under Sections 5, 6 and 10 of
this Agreement, shall survive both the termination of the Employee's employment
and this Agreement.
13. No Duty to Mitigate; No Offset. The Employee shall not be required
to mitigate damages or the amount of any payment contemplated by this Agreement,
nor shall any such payment be reduced by any earnings that the Employee may
receive from any other sources or offset against any other payments made to her
or required to be made to her pursuant to this Agreement.
14. Assignment; Binding Agreement. The Company may assign this
Agreement to any parent, subsidiary, affiliate or successor of the Company. This
Agreement is not assignable by the Employee and is binding on her and her
executors and other legal representatives. This Agreement shall bind the Company
and its successors and assigns and inure to the benefit of the Employee and her
heirs, executors, administrators, personal representatives, legatees or
devisees. The Company shall assign this Agreement to any entity that acquires
its assets or business.
15. Notice. Any written notice under this Agreement shall be personally
delivered to the other party or sent by certified or registered mail, return
receipt requested and postage prepaid, to such party at the address set forth in
the records of the Company or to such other address as either party may from
time to time specify by written notice.
8
9
16. Entire Agreement; Amendments. This Agreement contains the entire
agreement of the parties relating to the Employee's employment and supersedes
all oral or written prior discussions, agreements and understandings of every
nature between them. This Agreement may not be changed except by an agreement in
writing signed by the Company and the Employee.
17. Waiver. The waiver of a breach of any provision of this Agreement
shall not operate or as be construed to be a waiver of any other provision or
subsequent breach of this Agreement.
18. Governing Law and Jurisdictional Agreement. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of California.
19. Severability. In case any one or more of the provisions contained
in this Agreement is, for any reason, held invalid in any respect, such
invalidity shall not affect the validity of any other provision of this
Agreement, and such provision shall be deemed modified to the extent necessary
to make it enforceable.
20. Enforcement. It is agreed that it is impossible to measure fully,
in money, the damage which will accrue to the Company in the event of a breach
or threatened breach of Sections 5, 6, or 10 of this Agreement, and, in any
action or proceeding to enforce the provisions of Sections 5, 6 or 10 hereof,
the Employee waives the claim or defense that the Company has an adequate remedy
at law and will not assert the claim or defense that such a remedy at law
exists. The Company is entitled to injunctive relief to enforce the provisions
of such sections as well as any and all other remedies available to it at law or
in equity without the posting of any bond. The Employee agrees that if the
Employee breaches any provision of Section 10, the Company may recover as
partial damages all profits realized by the Employee at any time prior to such
recovery on the exercise of any warrant, option or right to purchase the
Company's Common Stock and the subsequent sale of such stock, and may also
cancel all outstanding such warrants, options and rights.
21. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and both of which together shall constitute
one and the same instrument.
9
10
22. Due Authorization. The execution of this Agreement has been duly
authorized by the Company by all necessary corporate action.
IN WITNESS WHEREOF, the parties have executed and delivered this
Employment Agreement as of the day and year set forth above.
WASTE CONNECTIONS, INC.,
a Delaware corporation
By:
----------------------------------
Printed Name: Ronald J. Mittelstaedt
Title: President
EMPLOYEE:
- ---------------------
Jerri Hunt