Exhibit 10.5

 

SECOND AMENDMENT TO
SEPARATION BENEFITS PLAN AND EMPLOYMENT AGREEMENT

 

This Second Amendment to Separation Benefits Plan and Employment Agreement (this
“Amendment”) is dated February 13, 2018, and is by and between Waste Connections
US, Inc., a Delaware corporation (f/k/a Waste Connections, Inc.)(the “Company”),
which is a wholly owned subsidiary of Waste Connections, Inc., an Ontario
corporation (f/k/a Progressive Waste Solutions Ltd.)(“Parent”), and Ronald J.
Mittelstaedt (“Executive”). The Company and Executive are referred to together
herein as the “Parties.” All capitalized terms not otherwise defined in this
Amendment shall have the meaning set forth in the Plan (as hereinafter defined).

 

RECITALS

 

WHEREAS, the Company and Executive previously entered into that certain
Separation Benefits Plan and Employment Agreement, effective as of February 13,
2012, which was amended December 17, 2015 (as amended, the “Plan”); and

 

WHEREAS, on June 1, 2016, pursuant to the terms of that certain Agreement and
Plan of Merger dated as of January 18, 2016, Water Merger Sub LLC, a Delaware
limited liability company and a wholly-owned subsidiary of the Parent, merged
with and into the Company, with the Company continuing as the surviving
corporation and an indirect wholly-owned subsidiary of the Parent (the
“Progressive Waste Acquisition”); and

 

WHEREAS, the Company and the Executive have determined that it is prudent to
amend the Plan to (i) extend its term by five years, (ii) make certain changes
to its terms to reflect the Progressive Waste Acquisition, and (iii) revise
certain additional terms and conditions by executing this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereby agree as follows:

 

1.                  General. Each reference to the term “Waste Connections,
Inc.” in the Plan is hereby deleted and replaced with the term “Waste
Connections US, Inc.”

 

2.                  Position and Responsibilities. Section 2 of the Plan is
hereby deleted and replaced in its entirety with the following:

 

“2. Position and Responsibilities. During the Term, the Executive shall be
directly employed by the Company, shall serve as Chief Executive Officer of
Waste Connections, Inc., an Ontario corporation (f/k/a Progressive Waste
Solutions Ltd.)(the “Parent”) and certain of its subsidiaries, including the
Company, and shall perform such other duties and responsibilities as the Board
of Directors of the Parent (the “Board”), may reasonably assign to the Executive
from time to time. The Executive will be based at the Parent’s principal
administrative offices in The Woodlands, Texas. In addition, the Parent shall
nominate the Executive to serve as a member of the Board at all times during the
Term, subject to election by the Parent’s shareholders. During any period in
which the Executive is a member of the Board, he shall serve as its Chairman and
also shall serve on its Executive Committee. The Executive shall devote such
time and attention to his duties as are necessary to the proper discharge of his
responsibilities hereunder. The Executive agrees to perform all duties
consistent with (i) policies established from time to time by the Parent and/or
the Company, and (ii) all applicable legal requirements.

 

 

 

 

The Company and the Executive agree that the Executive may, upon delivery of
written notice to the Board, become the “Executive Chairman” of the Board and
thereafter shall no longer serve as the Chief Executive Officer of the Parent
and certain of its subsidiaries, including the Company. This change in status
shall be subject to written agreement between the Executive and the Board, which
shall be negotiated in good faith, regarding corresponding changes to the
Executive’s duties and compensation under this Plan. If the Executive becomes
the Executive Chairman of the Board, then (i) the Executive shall continue to be
directly employed by the Company, and (ii) such change in status shall not be
treated as a termination of the Executive’s employment with the Company for any
purpose under this Plan.”

 

3.                  Term. Section 3 of the Plan is hereby deleted and replaced
in its entirety with the following:

 

“3. Term. The period of this Plan, as amended, shall commence on February 13,
2018 (the “Execution Date”) and shall continue through to the fifth anniversary
of such date (the “Initial Term”). On each anniversary of the Execution Date,
commencing on the third anniversary of the Execution Date, this Plan shall be
extended automatically by an additional year, thus extending the Initial Term of
this Plan to three years from such date (the Initial Term together with any such
extended period, the “Term”), unless either party shall have given the other
notice of termination or non-renewal hereof as provided herein.”

 

4.                  Compensation, Benefits and Reimbursement of Expenses.
Section 4 of the Plan is hereby amended by adding the following new Subsection
4(g):

 

“(g)Retention Award. In consideration of the Executive’s entering into this
Amendment and as compensation for his ongoing service, the Executive shall be
granted, under the Parent’s 2016 Incentive Award Plan, a restricted share unit
award with a grant date value of nine million dollars (U.S. $9,000,000) (the
“Retention Award”), determined based on the per share closing price of the
Parent’s common shares on the date of grant, which shall become vested under a
three-year graded vesting schedule with each vesting date on the anniversary of
the date of grant. The grant shall occur on or about the date the Parent grants
its annual equity awards in February 2018.

 

2

 

 

In the event the Executive’s employment with the Company terminates during the
Initial Term due to the Executive’s voluntary resignation of his employment with
the Company (which shall not include the assignment of the Executive to the role
of Executive Chairman), the Executive shall repay to the Company (or to the
Parent at the Company’s direction) a pro-rata portion of the Retention Award.
For clarity purposes, the Company and the Executive agree that this provision
shall not apply if the Executive’s employment with the Company is terminated due
to his death, disability or resignation for Good Reason. Repayment shall be made
in common shares of the Parent within ten (10) business days after the
Executive’s termination date (provided, however, that if the Executive does not
own a sufficient number of common shares of the Parent to satisfy this
obligation, he may elect to deliver the cash equivalent of that number of common
shares to the Company (or to the Parent at the Company’s direction), which
amount shall be calculated based on the average trading price of the Parent’s
common shares on the Executive’s termination date).

 

The repayment amount under the preceding paragraph shall be determined as
follows:

 

(1)       on the date of grant, the Company shall calculate, on a pro forma
basis, the following:

 

(A)       the number of common shares of the Parent that would have been
retained by the Company at the end of each month of service to pay any and all
required income and employment taxes (which amount shall be calculated assuming
such taxes are paid at the maximum applicable rate) related to the Retention
Award if the Retention Award provided for monthly vesting over a sixty-month
period (the “Monthly Tax Share Amount”); and

 

(B)       the number of common shares of the Parent that would be earned and
received by the Executive from the Retention Award after payment of the Monthly
Tax Share Amount if the Retention Award provided for monthly vesting over a
sixty-month period (the “Monthly Earned Share Amount”);

 

(2)       on the Executive’s termination date, the Company shall calculate:

 

(A)       the “net” number of common shares of the Parent earned and received by
the Executive on each vesting date under the Retention Award’s terms after
payment of income and employment taxes (which, for this purpose only, shall be
calculated assuming such taxes had been paid at the maximum applicable rate)(the
“Net Vested Share Amount”);

 

3

 

 

(B)       the number of complete months worked by the Executive during the
Initial Term (the “Completed Months”),

 

(C)        the number of common shares of the Parent which may be retained by
the Executive under this Section, which shall be equal to (i) the Completed
Months, multiplied by (ii) the Monthly Earned Share Amount (the “Retained Share
Amount”);

 

(3)       within ten (10) business days after his termination date, the
Executive shall deliver to the Company (or to the Parent at the Company’s
direction) a number of common shares of the Parent equal to (i) the Net Vested
Share Amount, minus (ii) the Retained Share Amount; and

 

(4)       the Company shall be entitled to any refunds of income or employment
taxes which occur due to the application of this claw back provision with
respect to the Retention Award, whether such amount is payable to the Executive,
the Parent or the Company, and the Executive shall take all reasonable actions
necessary to assist the Company to recover such amount.

 

In the event there is any change in the applicable tax rates paid by the
Executive during the Initial Term, then the preceding formula shall be applied
separately for the period prior to and after such change.”

 

5.                  Termination by Company. Section 7 of the Plan is hereby
amended by adding the following new Subsection 7(e) to the end thereof:

 

“(e) Release. As a condition to the payment of any benefit related to the
termination of employment, including severance, vesting of options or other
benefits, including any amounts otherwise payable under this Section 7, the
Executive (or the Executive’s executor, legal guardian, or other legal
representative in the case of the Executive’s death or disability) shall execute
and not revoke a waiver and release of all claims against the Parent and its
subsidiaries, including the Company, in a form reasonably acceptable to the
Parent within 21 days following the Executive’s receipt of the release
agreement; provided, however, that if the Executive’s employment is terminated
due to his death or disability, such release shall not apply to any claims the
Executive or his estate may have against the Company or the Parent for wrongful
death or gross negligence.”

 

6.                  Termination by Executive. Section 8 of the Plan is hereby
amended by adding the following new Subsection 8(c) to the end thereof:

 

“(c) Release. As a condition to the payment of any benefit related to the
termination of employment, including severance, vesting of options or other
benefits, including any amounts otherwise payable under this Section 8, the
Executive (or the Executive’s executor, legal guardian, or other legal
representative in the case of the Executive’s death or disability) shall execute
and not revoke a waiver and release of all claims against the Parent and its
subsidiaries, including the Company, in a form reasonably acceptable to the
Company within 21 days following the Executive’s receipt of the release
agreement; provided, however, that if the Executive’s employment is terminated
due to his death or disability, such release shall not apply to any claims the
Executive or his estate may have against the Company or the Parent for wrongful
death or gross negligence.”

 

4

 

 

7.                  Non-Competition and Non-Solicitation. Section 12 of the Plan
is hereby deleted and replaced in its entirety with the following:

 

“12. Non-Competition and Non-Solicitation.

 

a.The Executive acknowledges that in his employment with the Company, he
occupies a position of trust and confidence. The Executive agrees that the
consideration and other benefits being given to him by the Parent and its
subsidiaries, including the Company, clearly justify the following restrictions
which, in any event, given the Executive’s skills and ability will not prevent
the Executive from earning a living. The Executive acknowledges that all
restrictions contained in this Section 12 are reasonable and valid as to time,
geographical area, and scope of activity to be restrained for the adequate
protection of the legitimate business interests and goodwill of the Parent and
its subsidiaries, including the Company, and are no broader than is necessary to
protect such interests and goodwill. The Executive agrees and acknowledges that
due to the high-level nature of his duties for the Parent and the Company, his
key role within the Parent and the Company, and the nature and depth of the
Confidential Information which the Parent and its subsidiaries, including the
Company, share with the Executive, it is reasonable for the Parent and the
Company to expect the Executive not to engage in competition (as set forth in
this Section 12(a) anywhere in any county of any U.S. state, or any province or
territory in Canada, in which the Executive provides services to the Parent and
its subsidiaries, including the Company, or about which the Executive has access
to Confidential Information relating to the Parent’s and each of its
subsidiaries, including the Company’s, current or planned operations in such
county, province or territory (the “Restricted Territory”).[1] In consideration
of the provisions hereof, during the Term and for the twelve (12)-month period
following the Date of Termination (the “Restricted Period”), the Executive will
not, except as specifically provided below and/or for the benefit of the Parent
or its subsidiaries, including the Company, anywhere in the Restricted
Territory, directly or indirectly, acting individually or as the owner,
shareholder, partner or management employee of any entity: (i) engage or prepare
to engage in any business principally focusing on liquid, semi-solid or solid
waste collection, transportation, disposal, recycling and/or composting,
including disposal or treatment of exempt and non-exempt oil field wastes
derived from the exploration and production of hydrocarbons, and the operation
of transfer stations, recycling facilities, materials recovery facilities or
landfills, and/or any other business engaged in by the Parent and its
subsidiaries, including the Company, (collectively the “Restricted Business”);
or (ii) enter the employ 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, or act as a consultant or in any other advisory role, whether paid or
unpaid, to any Restricted Business; or (iii) receive or purchase a financial
interest in, make a loan to, make a gift in support of, or otherwise provide
financial support to any Restricted Business in any capacity, including without
limitation, as a sole proprietor, partner, shareholder, officer, director,
principal agent or trustee. The term “solicit” and related terms such as
“soliciting” or “solicitation” mean to knowingly engage in acts or
communications, in person or through others, that are intended or can reasonably
be expected to induce or encourage a particular responsive action (such as
buying a good or service), regardless of which party first initiates the contact
or communication or whether the communication is in response to an inquiry or
not. Provided, that the Executive 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 Executive is not a
controlling person of, or a member of a group which controls, such business and
further provided that the Executive does not, in the aggregate, directly or
indirectly, own Two Percent (2%) or more of any class of securities of such
business.

 

 

1Within the state of Louisiana, the Restricted Territory shall include the
following parishes: Caddo, Bossier, Webster, Bienville, Lincoln, Jackson, Union,
Morehouse, West Carroll, East Carroll, Madison, Richland, Franklin, Tensas,
Quachita, Winn, Caldwell, Red River, Desoto, Sabine, Natchitoches, Grant,
LaSalle, Avoyelles, Beauregard, Allen, Evangeline, St Landry, Lafayette, Point
Coupee, East Baton Rouge, West Baton Rouge, Iberville, Assumption, St. Martin,
St. Mary, Calcasieu, Jeff Davis, Allen, Acadia, Vermillion, Cameron, Iberia,
Terrebonne, Lafourche, Ascension, St John, St James, St Charles, Jefferson, St
Tammany, Orleans, St Bernard, Plaquemines, and Tangipahoa.

 

5

 

 

b.During the Restricted Period, the Executive shall not (i) solicit any customer
of the Parent or any of its subsidiaries, including the Company, to whom any
such entity provides service pursuant to a franchise agreement with a public
entity in the Restricted Territory, (ii) solicit on behalf of a competitor any
customer of the Parent or any of its subsidiaries, including the Company, to
enter into a relationship involving the Restricted Business with a competitor of
the Parent or any of its subsidiaries, including the Company, in the Restricted
Territory, (iii) solicit any such public entity to enter into a franchise
agreement with any such competitor, (iv) solicit any officer of the Parent or
any of its subsidiaries, including the Company, to enter into an employment
agreement with a competitor of the Parent or any of its subsidiaries, including
the Company, or otherwise interfere in any such relationship, or (v) solicit on
behalf of a competitor of the Parent or any of its subsidiaries, including the
Company, any prospective customer of the Parent or any of its subsidiaries,
including the Company, in the Restricted Territory that the Executive called on
or was involved in soliciting on behalf of the Parent or any of its
subsidiaries, including the Company, during the Term, provided, however, that
nothing herein shall prevent the Executive from soliciting any of the following
officers of the Parent or the Company to be employed in a business that is not
competitive with the business of the Parent or any of its subsidiaries,
including the Company (i) at any time after any such officer’s employment is
terminated by the Parent or the Company, (ii) at any time after any such
officer’s employment is terminated by the officer for Good Reason (as defined in
the officer’s employment agreement), and (iii) at any time after the expiration
the number of months indicated after each officer’s name from the date of
termination of such officer by the Parent or the Company for “Cause” (as such
term is defined in the Separation Benefits Plan applicable to such officer) or
from the date such officer notifies the Parent or the Company of his intention
to terminate his employment other than for “Good Reason” (as such term is
defined in the Separation Benefits Plan applicable to such officer): Darrell
Chambliss (twelve (12) months), Steven Bouck (twelve (12) months), and Worthing
Jackman (twelve (12) months).

 

c.If the final judgment of a court of competent jurisdiction declares that any
term or provision of this Section 12 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 Plan shall be enforceable as so
modified after the expiration of the time within which the judgment may be
appealed.

 

6

 

 

d.If the scope, duration or area of the restrictions contained in this Section
12 is reduced by a final judgement of a court of competent jurisdiction after
the Company has elected to apply the Optional Restricted Period as permitted in
Section 7 of this Plan, the Company may, within thirty days after the issuance
of such final judgement, rescind its election to apply the Optional Restricted
Period and either (i) if the rescission occurs prior to the first anniversary of
the Date of Termination, not make the Seven Million Dollar (U.S. $7,000,000)
additional payment to the Executive as provided in Section 7, or (ii) if the
rescission occurs on or after the first anniversary of the Date of Termination,
require the Executive to repay the Seven Million Dollar (U.S. $7,000,000)
additional payment amount paid under Section 7. In the event the Executive does
not timely repay the additional payment amount pursuant to the preceding
sentence, the Executive shall reimburse any reasonable court costs and legal
fees incurred by the Parent or its subsidiaries, including the Company, to
recover such amount.”

 

8.                  Governing Law and Jurisdictional Agreement. Section 22 of
the Plan is hereby deleted and replaced in its entirety with the following:

 

“22. Governing Law and Jurisdictional Agreement. The Plan and this Amendment are
together intended to be a Top Hat Plan and shall be interpreted, administered
and enforced in accordance with ERISA. It is expressly intended that ERISA
preempt the application of state laws to the Plan and this Amendment to the
maximum extent permitted by Section 514 of ERISA. To the extent that state law
is applicable, the statutes and common law of the State of Texas shall apply,
excluding any that mandate the use of another jurisdiction’s laws. The parties
irrevocably and unconditionally submit to the jurisdiction and venue of any
court, federal or state, situated within Harris County, Texas, for the purpose
of any suit, action or other proceeding arising out of, or relating to or in
connection with, the Plan and this Amendment.”

 

9.                  Enforcement. Section 24 of the Plan is hereby deleted and
replaced in its entirety with the following:

 

“24. Enforcement. It is agreed that it is impossible to measure fully, in money,
the damage which will accrue to the Parent and its subsidiaries, including the
Company, in the event of a breach or threatened breach of Section 5, 6 or 12 of
this Plan, and, in any action or proceeding to enforce the provisions of Section
5, 6 or 12 hereof, the Executive 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. Notwithstanding any claim procedure or arbitration
requirement as set forth in Appendix A, 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 and
the Company and the Executive hereby agree that the Company is entitled to seek
such remedies in the jurisdiction set forth in Section 22 hereof. The Executive
agrees that if the Executive breaches any provision of Section 12, the Company
and the Parent may discontinue and terminate all severance payments and benefits
under Sections 7, 8 and 10 of this Plan, as applicable, and recover as partial
damages all profits realized by the Executive at any time prior to such recovery
arising from the acceleration of any equity award in connection with the
Executive’s termination of employment, including the subsequent sale of common
shares of the Parent received in connection with vesting of such awards, and may
also cancel any or all outstanding equity awards held by the Executive.”

 

7

 

 

10.              No Other Changes. Except as provided in this Amendment, the
Plan shall remain in full force and effect and remain unchanged.

 

11.              Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument. A facsimile, telecopy or other reproduction of this Amendment may be
executed by one or more parties and delivered by such party by facsimile or any
similar electronic transmission device pursuant to which the signature of or on
behalf of each such party can be seen. Such execution and delivery shall be
considered valid, binding and effective for all purposes.

 

12.              Governing Law. The Plan and this Amendment are together
intended to be a Top Hat Plan and shall be interpreted, administered and
enforced in accordance with ERISA. It is expressly intended that ERISA preempt
the application of state laws to the Plan and this Amendment to the maximum
extent permitted by Section 514 of ERISA. To the extent that state law is
applicable, the statutes and common law of the State of Texas shall apply,
excluding any that mandate the use of another jurisdiction’s laws. The parties
irrevocably and unconditionally submit to the jurisdiction and venue of any
court, federal or state, situated within Harris County, Texas, for the purpose
of any suit, action or other proceeding arising out of, or relating to or in
connection with, the Plan and this Amendment.

 

13.              Miscellaneous. This Amendment and the Plan set forth the entire
agreement between the Company and the Executive concerning the subject matter
herein, and fully supersedes any and all prior oral or written agreements,
promises or understandings between the Company and the Executive concerning the
subject matter herein including, without limitation, any acceleration provisions
set forth in any agreement evidencing an equity award held by the Executive.
Further, the Executive represents and acknowledges that in executing this
Amendment, the Executive does not rely, and has not relied, on any prior oral or
written communications by the Company, and the Executive expressly disclaims any
reliance on any prior oral or written communications, agreements, promises,
inducements, understandings, statements or representations in entering into this
Amendment. Therefore, the Executive understands that he is precluded from
bringing any fraud or fraudulent inducement claim against the Company associated
with any such communications, agreements, promises, inducements, understandings,
statements or representations. The Company and the Executive are entering into
this Amendment based on their own judgment.

 

[Signature Page Follows]

 

8

 

 

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its
duly authorized officer and the Executive has executed this Amendment as of
February 13, 2018.

 

WASTE CONNECTIONS US, INC.   EXECUTIVE       By:   /s/ Steven F. Bouck   /s/
Ronald J. Mittelstaedt     Ronald J. Mittelstaedt Its: President           Date:
February 13, 2018   Date: February 13, 2018