Exhibit 10.53

 

CLEAN HARBORS, INC.

ANNUAL CEO INCENTIVE BONUS PLAN

 

1.                                      Purposes.

 

The purpose of the Clean Harbors, Inc. Annual CEO Incentive Bonus Plan (the
“Plan”) is to provide each year an incentive for performance of the Company’s
Chief Executive Officer (“CEO”) by making a significant percentage of the CEO’s
total CEO compensation dependent upon the level of corporate performance
attained for the year, and to do so in a manner which will allow full
deductibility of the bonus portion of the CEO compensation expense under
Section 162(m) of the Internal Revenue Code (the “Code”).

 

2.                                      Definitions in Last Section.

 

Unless defined where the term first appears in the Plan, capitalized terms shall
have the respective meanings set forth in Section 6.

 

3.                                      CEO Annual Incentive Bonus.

 

(a)                                  Establishment of Potential Annual Incentive
Bonus.  On or before the 90th day of each Plan Year, the Committee shall
determine and set forth in writing the Performance Criteria for such Plan Year,
and, where deemed appropriate by the Committee, Threshold and Maximum Levels of
Achievement for each such Performance Criteria, and the respective amounts of
bonus which can potentially be earned based on attainment of each such Level of
Achievement. If the Committee establishes Threshold and Maximum Levels of
Achievement for any Performance Criteria, the Committee shall also determine how
the amount of the potential bonus associated with such Criteria shall be
determined if the actual level of achievement relating to such Criteria during
any Plan Year is between such Threshold and Maximum Levels. Each of the
Performance Criteria and the Levels of Achievement must be objective such that a
third party having knowledge of the relevant facts could determine (1) whether
or not the Performance Criteria at each such Level of Achievement has been
achieved and (2) the total dollar amount of the Bonus (if any) for each Plan
Year which has been earned based on such performance. Once the Committee has
established for any Plan Year the Performance Criteria and the related Levels of
Achievement, the Committee may not thereafter change those Criteria or Levels
for that year, except to the extent that the Committee determines that such a
change (either an increase or a decrease) is necessary in order to adjust for
effects of extraordinary events (such as a material acquisition or divestiture
or changes in accounting methods as determined under generally accepted
accounting principles) which affect the calculation of such Criteria or Levels
and which become effective during such Plan Year.

 

(b)                                 Determination and Certification of Incentive
Bonus Amount.  Within 75 days following the end of each Plan Year, the Committee
shall determine and certify in writing to the Board whether or not each of the
Performance Criteria has been satisfied and, if so, at what Level of
Achievement, and the amount, if any, of the total Annual Incentive Bonus payable
to the CEO. The Committee may decrease, but may not increase, the amount of the
potential Annual Incentive Bonus for each Performance Criteria as calculated
pursuant to the terms originally established by the Committee. The amount of any
Annual Incentive Bonus, as so certified by the Committee, shall be communicated
in writing to the CEO and shall be payable to the CEO as provided in
Section 3(f).

 

(c)                                  Definition of Accounting Terms.  Unless
otherwise so determined by the Committee and reflected in the terms of the
potential Annual Incentive Bonus established pursuant to Section 3(a),
accounting terms used by the Committee in establishing the Performance Criteria
and the Levels of Achievement shall be defined, and the results based thereon
shall be measured, in accordance with generally accepted accounting principles
as applied by the Company in preparing its consolidated financial statements and
related financial disclosures for the Plan Year, as included in its reports
filed with the Securities and Exchange Commission. Notwithstanding the
foregoing, the term “EBITDA” shall be calculated in accordance with the
Company’s then outstanding credit agreement.

 

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(d)                                 Maximum Annual Incentive Bonus.  The maximum
amount of the Annual Incentive Bonus payable to all Participants serving as CEO
in any fiscal year of the Company shall be limited to $2,000,000.

 

(e)                                  Employment Requirement for Annual Incentive
Bonus Payment and Exceptions Thereto.

 

(i)                                     Except as provided in Section 3(e)(ii),
payment of an Annual Incentive Bonus to a Participant for a Plan Year shall be
made only if, and to the extent that, the foregoing requirements of this
Section 3 have been met with respect to that Plan Year and, except as set forth
in Section 3(g), only if the Participant has been employed by the Company as its
CEO for the entire Plan Year (from the first day of the Plan Year through the
last day of the Plan Year).

 

(ii)                                  If, under circumstances described in this
Section 3(e)(ii), a Participant has been employed by the Company as CEO for only
part of a Plan Year, a pro-rata Annual Incentive Bonus shall be paid to the
Participant. The pro-rata Annual Incentive Bonus shall be calculated by
multiplying the Annual Incentive Bonus which would be payable if such employment
had been for the entire Plan Year by a fraction, the numerator of which shall be
the Participant’s days of such employment during the Plan Year (except as
provided in Section 3(e)(ii)(D)) and the denominator of which shall be 365. The
circumstances under which such a pro-rata Annual Incentive Bonus shall become
payable with respect to a Plan Year are the following:

 

(A)                              the Participant’s employment terminated during
the Plan Year under circumstances which qualify the Participant for retirement
(including early retirement) under the Company’s Section 401(k) Plan (or any
successor plan thereto);

 

(B)                                the Participant died during the Plan Year;

 

(C)                                the Participant became CEO of the Company
during the Plan Year and remained so employed on the last day of the Plan Year;
or

 

(D)                               the Participant was disabled (within the
meaning of the Company’s long-term disability plan) during part of the Plan
Year, in which event the numerator of the fraction used to calculate the
pro-rata Annual Incentive Bonus shall be either the days of the Plan Year during
which the Participant was actively at work or such other number (which shall not
be more than 365) as is determined by the Committee in its sole discretion.

 

(f)                                    Time of Payment; Termination for Cause. 
Except as provided in Section 3(g), any Annual Incentive Bonus to which a CEO
becomes entitled under this Section 3 with respect to a Plan Year shall be paid
in a lump sum cash payment as soon as practicable after the amount thereof is
determined by the Committee, but not later than the March 15th immediately
following completion of the Plan Year. Notwithstanding any of the foregoing
provisions of the Plan, if the employment of a Participant has been terminated
for cause (as determined in the sole discretion of the Committee prior to the
occurrence of any Change in Control) at any time before the Company has paid the
Participant’s Annual Incentive Bonus with respect to a Plan Year, no Annual
Incentive Bonus shall be paid to the Participant with respect to such Plan Year.
For purposes of the Plan, after a Change in Control has occurred, the Committee
shall have no power to determine that a termination of a Participant’s
employment was made for cause.

 

(g)                                 Change in Control.  Notwithstanding any
other provision of the Plan to the contrary, (i) if a Change in Control of the
Company shall occur following completion of a Plan Year as to which the actual
Annual Incentive Bonus to be paid has been determined but such Bonus has not yet
been paid, such Bonus shall be paid immediately in cash, (ii) if a Change in
Control shall occur following completion of a Plan Year as to which the actual
Bonus to be paid has not yet been determined, such Annual Incentive Bonus shall
be immediately determined and paid in cash, and (iii) if a Change in Control
shall occur during a Plan Year as to which a potential Annual Incentive Bonus
has been established but the actual Annual Incentive

 

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Bonus to be paid has not yet been determined, such Plan Year shall be deemed to
have been completed, each of the Performance Criteria shall be deemed to have
been satisfied at the midpoint between the Threshold and Maximum Levels of
Achievement, and a pro rata portion of the Annual Incentive Bonus so determined
for such partial Plan Year (based on the number of full and partial months which
have elapsed with respect to such Plan Year) shall be paid immediately in cash
to the Participant.

 

4.                                      Administration.

 

The Plan shall be administered by the Committee. The Committee shall have the
authority in its sole discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan including, without
limitation, to construe and interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, and to make all other determinations
deemed necessary or advisable for the administration of the Plan.

 

The Committee may appoint a chairperson and a secretary and may make such
rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings. All determinations of the
Committee shall be made by a majority of its members either present in person or
participating by conference telephone at a meeting or by unanimous written
consent. The Committee may delegate to one or more of its members or to one or
more agents such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may employ
one or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan. All decisions, determinations
and interpretations of the Committee shall be final and binding on all persons,
including the Company, any Participant (or any person claiming any rights under
the Plan from or through any Participant) and any shareholder.

 

No member of the Committee shall be liable for any action taken or determination
made in good faith with respect to the Plan or any Annual Incentive Bonus
hereunder.

 

5.                                      General Provisions.

 

(a)                                  No Right to Continued Employment.  Nothing
in the Plan or in any potential Annual Incentive Bonus hereunder shall confer
upon any Participant the right to continue in the employ of the Company either
as CEO or in any other capacity or to be entitled to any remuneration or
benefits not set forth in the Plan or to interfere with or limit in any way the
right of the Company to terminate such Participant’s employment.

 

(b)                                 Withholding Taxes.  The Company shall deduct
from all payments under the Plan any taxes required to be withheld by federal,
state or local governments.

 

(c)                                  Amendment and Termination of the Plan.  The
Board or the Committee may at any time and from time to time alter, amend,
suspend, or terminate the Plan in whole or in part. Additionally, the Committee
may make such amendments as it deems necessary to comply with Section 162(m) of
the Code or other applicable laws, rules and regulations. Notwithstanding the
foregoing, no amendment of the Plan shall be made without shareholder approval
if shareholder approval of the amendment is necessary for each Annual Incentive
Bonus under the Plan to continue to qualify as “performance-based compensation”
under Section 162(m) of the Code.

 

(d)                                 Participant Rights.  No Participant in the
Plan for a particular Plan Year shall have any claim to be granted any Annual
Incentive Bonus under the Plan for any subsequent Plan Year. Furthermore, there
is no obligation for uniformity of treatment of Participants in the event that
more than one Participant shall potentially be entitled to receive an Annual
Incentive Bonus with respect to any Plan Year or any subsequent Plan Year.

 

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(e)                                  Unfunded Status of Annual Incentive
Bonuses.  The Plan is intended to constitute an “unfunded” plan for incentive
compensation. With respect to any payments which at any time are not yet made to
a Participant with respect to an Annual Incentive Bonus, nothing contained in
the Plan or any related document shall give any such Participant any rights that
are greater than those of a general creditor of the Company.

 

(f)                                    Nonalienation of Benefits.  No right or
benefit under the Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber, or charge the same will be void. No
potential right to receive any Annual Incentive Bonus hereunder shall in any
manner be subject to any debts, contracts, liabilities, or torts of the person
potentially entitled to receive such right or interest.

 

(g)                                 Governing Law.  The Plan and the rights of
all persons claiming hereunder shall be construed and determined in accordance
with the laws of the Commonwealth of Massachusetts without giving effect to the
choice of law principles thereof, except to the extent that such law is
preempted by federal law.

 

(h)                                 Effective Date and Shareholder Approval. 
The effective date of the Plan shall be January 1, 2009, provided that the
adoption of the Plan is approved by a majority of the votes cast at a meeting of
the shareholders of the Company duly held following such date at which a quorum
representing a majority of the outstanding voting stock of the Company is,
either in person or by proxy, present and entitled to vote. Although the terms
of a potential Annual Incentive Bonus may be established by the Committee prior
to such shareholder approval of the Plan, any such Bonus shall be subject to
such shareholder approval being obtained, and no payments in respect of such
Bonus shall be made prior to or in the absence of such shareholder approval.
Subject to such approval by the shareholders, the Plan shall continue in effect
until the Plan Year ending December 31, 2013, unless earlier terminated by the
Board or the Committee.

 

6.                                      Definitions.

 

The following terms, as used herein, have the following meanings:

 

(a)                                  “Annual Incentive Bonus” means any Annual
Incentive Bonus to which a Participant may become entitled pursuant to the Plan;
provided, however, that the establishment by the Committee of a potential Annual
Incentive Bonus with respect to a Participant pursuant to Section 3(a) does not,
by itself, entitle the Participant to payment of any such Bonus until such Bonus
has been earned and becomes payable pursuant to other provisions hereof.

 

(b)                                 “Beneficial Owner” has the meaning set forth
in Rule 13d-3 under the Exchange Act.

 

(c)                                  “Board” means the Board of Directors of the
Company.

 

(d)                                 “Change in Control” shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred during the term of the Plan:

 

(i)                                     any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not including in
the securities beneficially owned by such Person any securities acquired
directly from the Company or its Affiliates (which term shall have the meaning
set forth in Rule 12b-2 promulgated under the Exchange Act)) representing 30% or
more of the combined voting power of the Company’s then outstanding securities,
excluding any Person who becomes such a Beneficial Owner in connection with a
transaction described in clause (A) of paragraph (iii) below; or

 

(ii)                                  the following individuals cease for any
reason to constitute a majority of the number of directors then serving:
individuals who on the effective date of the Plan constitute the Board and any
new director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent

 

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solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
shareholders was approved or recommended by a vote of at least two-thirds of the
directors then still in office who either were directors on the effective date
hereof or whose appointment, election or nomination for election was previously
so approved or recommended; or

 

(iii)                               there is consummated a merger or
consolidation of the Company or any direct or indirect subsidiary of the Company
with any other corporation, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or any parent thereof), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any subsidiary of the Company, at least 51% of the combined voting power of
the securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company’s then outstanding securities; or

 

(iv)                              the shareholders of the Company approve a plan
of complete liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or substantially all
of the Company’s assets, other than a sale or disposition by the Company of all
or substantially all of the Company’s assets to an entity, at least 51% of the
combined voting power of the voting securities of which are owned by
shareholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

 

(e)                                  “Chief Executive Officer” or “CEO” means
the Chief Executive Officer of the Company.

 

(f)                                    “Code” means the Internal Revenue Code of
1986, as amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.

 

(g)                                 “Committee” means the Compensation Committee
of the Board, which shall consist during the term of the Plan of not less than
two members of the Board, each of whom, at the time of appointment to the
Committee and at all times during service as a member of the Committee, shall be
both (i) an “outside director,” as then defined under Section 162(m) of the Code
and (ii) an “independent director” within the meaning of the listing
requirements of the primary stock exchange on which the common stock of the
Company may then be listed.

 

(h)                                 “Company” means Clean Harbors, Inc., a
corporation organized under the laws of the Commonwealth of Massachusetts, or
(except as used in the definitions of Change in Control and Person in this
Section 6) any successor corporation.

 

(i)                                     “Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time.

 

(j)                                     “Levels of Achievement” mean a Threshold
Level of Achievement and a Maximum Level of Achievement which may be established
by the Committee with respect to any Performance Criteria for each Plan Year.

 

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(k)                                  “Maximum Level of Achievement” means a
specified level of achievement of a Performance Criteria applicable to a Plan
Year which must be attained for the maximum portion of an Annual Incentive
Bonus, which is based on achievement of that Performance Criteria, to be earned.

 

(l)                                     “Participant” means an individual
serving as CEO of the Company for whom a potential Annual Incentive Bonus is
established by the Committee with respect to the relevant Plan Year.

 

(m)                               “Performance Criteria” means one or more
pre-established, objective measures of performance by the Company during a Plan
Year selected by the Committee in its discretion to determine whether an Annual
Incentive Bonus has been earned in whole or in part. Performance Criteria may be
based on one or more of the following: the Company’s consolidated revenues,
consolidated earnings before interest, taxes, depreciation and amortization
(“EBITDA”), ratio of EBITDA to consolidated revenues (“EBITDA Margin”), earnings
per share, health, safety and compliance statistics (“HSC Compliance”), cost
reductions, days of sales outstanding (“DSO”) (based upon the time of payment of
the Company’s outstanding billings), hiring of key executive officers,
succession planning, financing or refinancing results, or implementation or
expansion of a new line of business or programs. Such Performance Criteria may
be based on the Company’s absolute performance under such measure for the year
and/or upon a comparison of such performance with the performance of the Company
in a prior period or the performance of a peer group of companies.

 

(n)                                 “Person” has the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include (i) the Company or any of
its subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company, or (v) any individual or entity (including
the trustees (in such capacity) of any such entity which is a trust) which as of
January 1, 2009 is, directly or indirectly, the Beneficial Owner of securities
of the Company representing 5% or more of the combined voting power of the
Company’s then outstanding securities or any Affiliate of any such individual or
entity, including, for purposes of this Plan, any of the following: (A) any
trust (including the trustees thereof in such capacity) established by or for
the benefit of any such individual; (B) any charitable foundation (whether a
trust or a corporation, including the trustees or directors thereof in such
capacity) established by any such individual; (C) any spouse of any such
individual; (D) the ancestors (and spouses) and lineal descendants (and spouses)
of such individual and such spouse; (E) the brothers and sisters (whether by the
whole or half blood or by adoption) of either such individual or such spouse; or
(F) the lineal descendants (and their spouses) of such brothers and sisters.

 

(o)                                 “Plan” means this Clean Harbors, Inc. CEO
Annual Incentive Bonus Plan, as amended from time to time.

 

(p)                                 “Plan Year”means the Company’s fiscal year,
except that if a Participant becomes the CEO during a fiscal year, the Committee
may establish a Plan Year for such Participant consisting of all or part of the
remainder of such fiscal year. In case of a Plan Year which is less than a full
calendar year, the Committee shall establish the terms of the potential Annual
Incentive Bonus, as provided in Section 3(a), before 25% of such Plan Year has
elapsed.

 

(q)                                 “Threshold Level of Achievement” means a
minimum level of achievement of a Performance Criteria applicable to a Plan Year
which must be attained for the minimum level of an Annual Incentive Bonus which
is based on achievement of that Performance Criteria to be earned.

 

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