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.


 

















 


(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 


 

















 


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.


 

















 


(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 


 

















 


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.


 

















 


(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.