exv10w2



 






EXHIBIT 10.2




APPENDIX A




CHANGE IN CONTROL SEVERANCE AGREEMENT




Mr. John Werner Haugsland

15110 N. Dallas Parkway, Suite 600

Dallas, Texas 75248



Dear Mr. Haugsland:




     Greyhound Lines, Inc. (the “Company”) recognizes that, as is the case for most companies, the
possibility of a change in control exists. The Company wishes to ensure that its senior executives
are not distracted from performing their duties in the event of a proposed or actual transaction
involving a change in control. Accordingly, the Company has determined that as an additional
inducement for you (the “Executive”) to continue to remain in the employ of the Company and to
assure itself of both present and future continuity of management, the Company agrees to provide
the Executive with severance benefits under the following circumstances pursuant to the following
terms and conditions (the “Agreement”):



          1. Defined Terms. In addition to terms defined elsewhere herein, the following terms
have the following meanings when used in this Agreement with initial capital letters:




               (a) “Base Pay” means the Executive’s annual base salary rate as in effect from time to
time.




               (b) “Board” means the Board of Directors of Laidlaw International, Inc. (“Laidlaw”).




               (c) “Cause” means that, prior to any termination pursuant to Section 3(b), the
Executive shall have:




                    (i) engaged in misconduct which is materially injurious to the Company
or Laidlaw, monetarily or otherwise;




                    (ii) committed an act of fraud, embezzlement or theft in connection
with his duties or in the course of his employment with the Company, Laidlaw
or any Subsidiary;




                    (iii) intentionally damaged property of the Company, Laidlaw or any
Subsidiary;




                    (iv) committed wrongful disclosure of secret processes or confidential
information of the Company, Laidlaw or any Subsidiary; or




                    (v) engaged in any Competitive Activity; and any such act shall have
been demonstrably and materially harmful to the Company.



 









 





Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for “Cause” hereunder unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the Board then in office
(excluding the Executive if he is a Director) at a meeting of the Board
called and held for such purpose, after reasonable notice to the Executive
and an opportunity for the Executive, together with the Executive’s counsel
(if the Executive chooses to have counsel present at such meeting), to be
heard before the Board, finding that, in the good faith opinion of the
Board, the Executive had committed an act constituting “Cause” as herein
defined and specifying the particulars thereof in detail. Nothing herein
will limit the right of the Executive or his beneficiaries to contest the
validity or propriety of any such determination;




(d) “Change in Control” means the occurrence after the date hereof and during the Term,
of any of the following events:




                    (i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the then-outstanding Voting Stock of the
Company or Laidlaw; provided, however, that the following acquisitions shall
not constitute a Change in Control: (A) any acquisition directly from the
Company or Laidlaw, (B) any acquisition by the Company or Laidlaw, (C) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company, Laidlaw or any Subsidiary or (D) any acquisition
by any Person pursuant to a transaction that complies with clauses (A), (B)
and (C) of subsection (iii) of this Section 1(d);




                    (ii) individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason (other than death or disability) to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s stockholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee for director, without
objection to such nomination) shall be considered as though such individual
were a member of the Incumbent Board, but excluding for this purpose, any
such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of Rule 14a-11 of
the Exchange Act) with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;



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                    (iii) consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the
Company (a “Business Combination”), unless, in each case, immediately
following such Business Combination, (A) all or substantially all of the
individuals and entities who were the beneficial owners of Voting Stock of
the Company immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of the
entity resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns the Company
or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions
relative to each other as their ownership, immediately prior to such
Business Combination, of the Voting Stock of the Company, (B) no Person
(excluding any entity resulting from such Business Combination or any
employee benefit plan (or related trust) sponsored or maintained by the
Company, any Subsidiary or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 15% or more of the
then outstanding shares of common stock of the entity resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such entity except to the extent such ownership existed
prior to the Business Combination and (C) at least a majority of the members
of the board of directors of the entity resulting from such Business
Combination were members of the Incumbent Board at the time of the execution
of the initial agreement or of the action of the Board providing for such
Business Combination; or




                    (iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.




               (e) “Competitive Activity” means the Executive’s participation, without the written
consent of the Board, as an employee, officer, consultant or director of any business
enterprise if such enterprise engages in substantial and direct competition with Laidlaw or
the Company and such enterprise’s sales of any product or service competitive with any
product or service of Laidlaw or the Company amounted to 10% of such enterprise’s net sales
for its most recently completed fiscal year and if the Laidlaw’s or the Company’s net sales
of said product or service amounted to 10% of Laidlaw’s or the Company’s net sales for its
most recently completed fiscal year. “Competitive Activity” will not include (i) the mere
ownership of securities in any such enterprise and the exercise of rights appurtenant
thereto or (ii) participation in the management of any such enterprise other than in
connection with the competitive operations of such enterprise.




               (f) “Employee Benefits” means the perquisites, benefits and service credit for benefits
as provided under any and all employee retirement income and welfare



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benefit policies, plans, programs or arrangements in which Executive is entitled to
participate, including, without limitation, any stock option, performance share, performance
unit, stock purchase, stock appreciation, savings, pension, supplemental executive
retirement, or other retirement income or welfare benefit, compensation, incentive
compensation, group or other life, health, medical/hospital or other insurance (whether
funded by actual insurance or self-insured by the Company, Laidlaw or a Subsidiary),
disability, salary continuation, expense reimbursement and other employee benefit policies,
plans, programs or arrangements.




          (g) “Exchange Act” means the Securities Exchange Act of 1934.




          (h) “Incentive Pay” means an annual bonus, incentive or other payment of compensation,
in addition to Base Pay, made or to be made in regard to services rendered in any year or
other period pursuant to any bonus, incentive, profit-sharing, performance, discretionary
pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of
the Company, Laidlaw or a Subsidiary, or any successor thereto.




          (i) “Laidlaw” means Laidlaw International, Inc., a Delaware corporation and parent of
the Company.




          (j) “Retirement Plans” means the retirement income, supplemental executive retirement,
excess benefits and retiree medical, life and similar benefit plans, programs or
arrangements of Laidlaw or the Company in which the Executive is entitled to participate.




          (k) “Severance Period” means the period of time commencing on the date of the first
occurrence of a Change in Control and continuing until the earlier of (i) the second
anniversary of the occurrence of the Change in Control, or (ii) the Executive’s death.




          (l) “Subsidiary” means an entity in which the Company or Laidlaw directly or indirectly
beneficially owns 50% or more of the outstanding Voting Stock.




          (m) “Term” means the period commencing as of the date hereof and expiring as of the
later of (i) the close of business on August 31, 2005, or (ii) the expiration of the
Severance Period; provided, however, that (A) commencing on September 1, 2005 and each
September 1 thereafter, the term of this Agreement will automatically be extended for an
additional year unless, not later than June 30 of the immediately preceding year, the
Company or the Executive shall have given notice that it or the Executive, as the case may
be, does not wish to have the Term extended and (B) subject to the last sentence of Section
9, if, prior to a Change in Control, the Executive ceases for any reason to be an employee
of the Company and any Subsidiary, thereupon without further action the Term shall be deemed
to have expired and this Agreement will immediately terminate and be of no further effect.
For purposes of this Section 1(m), the Executive shall not be deemed to have ceased to be an
employee of the Company and any



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Subsidiary by reason of the transfer of Executive’s employment between the Company and
Laidlaw or between the Company and any Subsidiary, or among any Subsidiaries.




          (n) “Termination Date” means the date on which the Executive’s employment is terminated
(the effective date of which shall be the date of termination, or such other date that may
be specified by the Executive if the termination is pursuant to Section 3(b)).




          (o) “Voting Stock” means securities entitled to vote generally in the election of
directors.



     2. Operation of Agreement. This Agreement will be effective and binding immediately
upon its execution, but, anything in this Agreement to the contrary notwithstanding, except as
provided in Sections 8 and 9, this Agreement will not be operative unless and until a Change in
Control occurs. Upon the occurrence of a Change in Control at any time during the Term, without
further action, this Agreement shall become immediately operative.



     3. Termination Following a Change in Control.




          (a) In the event of the occurrence of a Change in Control, the Executive’s employment
may be terminated by the Company or a Subsidiary during the Severance Period and the
Executive shall be entitled to the benefits provided by Section 4 unless such termination is
the result of the occurrence of one or more of the following events:




                    (i) The Executive’s death;




                    (ii) If the Executive becomes permanently disabled within the meaning
of, and begins actually to receive disability benefits pursuant to, the
long-term disability plan in effect for, or applicable to, Executive
immediately prior to the Change in Control; or




                    (iii) Cause.



     If, during the Severance Period, the Executive’s employment is terminated by the Company or
any Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), the Executive will be
entitled to the benefits provided by Section 4 hereof.




               (b) In the event of the occurrence of a Change in Control, the Executive may terminate
employment with the Company and any Subsidiary during the Severance Period with the right to
severance compensation as provided in Section 4 upon the occurrence of one or more of the
following events (regardless of whether any other reason, other than Cause as hereinabove
provided, for such termination exists or has occurred, including, without limitation, other
employment):




                    (i) Failure to elect or reelect or otherwise to maintain the Executive
in the office or the position, or a substantially equivalent office or
position, of or with the Company and/or a Subsidiary (or any successor



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thereto by operation of law of or otherwise), as the case may be, which
the Executive held immediately prior to a Change in Control, or the removal
of the Executive as a director of the Company and/or a Subsidiary (or any
successor thereto) if the Executive shall have been a director of the
Company and/or a Subsidiary immediately prior to the Change in Control;




                    (ii) (A) A significant adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or duties attached to the
position with the Company and any Subsidiary which the Executive held
immediately prior to the Change in Control, (B) a reduction in the aggregate
of the Executive’s Base Pay received from the Company and any Subsidiary or
the Executive’s Incentive Pay opportunity from the Company or its
Subsidiaries, or (C) the termination or denial of the Executive’s rights to
Employee Benefits or a reduction in the scope or value thereof to a level
that is substantially lower in the aggregate from the level in effect at the
time of the Change in Control, any of which is not remedied by the Company
within 10 calendar days after receipt by the Company of written notice from
the Executive of such change, reduction, denial or termination, as the case
may be;




                    (iii) The liquidation, dissolution, merger, consolidation or
reorganization of the Company or transfer of all or substantially all of its
business and/or assets, unless the successor or successors (by liquidation,
merger, consolidation, reorganization, transfer or otherwise) to which all
or substantially all of its business and/or assets have been transferred (by
operation of law or otherwise) assumed all duties and obligations of the
Company under this Agreement pursuant to Section 12(a);




                    (iv) The Company relocates its principal executive offices (if such
offices are the principal location of Executive’s work), or requires the
Executive to have his principal location of work changed, to any location
that, in either case, is in excess of 50 miles from the location thereof
immediately prior to the Change in Control, or requires the Executive to
travel away from his office in the course of discharging his
responsibilities or duties hereunder at least 20% more (in terms of
aggregate days in any calendar year or in any calendar quarter when
annualized for purposes of comparison to any prior year) than was required
of Executive in any of the three full years immediately prior to the Change
in Control without, in either case, his prior written consent; or




                    (v) Without limiting the generality or effect of the foregoing, any
material breach of this Agreement by the Company or any successor thereto
which is not remedied by the Company within 10 calendar days after receipt
by the Company of written notice from the Executive of such breach.



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               (c) In the event of the occurrence of a Change in Control, the Executive may terminate
employment with the Company and any Subsidiary during the thirty (30) day period following
the first anniversary of the Change in Control for any or no reason with the right to
severance compensation as provided in Section 4.




               (d) Except as otherwise provided herein, a termination by the Company pursuant to
Section 3(a) or by the Executive pursuant to Section 3(b) or (c) will not affect any rights
that the Executive may have pursuant to any agreement, policy, plan, program or arrangement
of the Company or Subsidiary providing Employee Benefits, which rights shall be governed by
the terms thereof, except for any rights to severance compensation to which Executive may be
entitled upon termination of employment pursuant to Paragraph 6(b)(i) of the Executive’s
employment agreement, effective as of January 1, 2005, which rights shall, during the
Severance Period, be superseded by this Agreement.



          4. Severance Compensation.




               (a) If, following the occurrence of a Change in Control, the Company or Subsidiary
terminates the Executive’s employment during the Severance Period other than pursuant to
Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates his employment
pursuant to Section 3(b) or (c), the Company shall pay to the Executive the amounts
described in Annex A within five business days after the Termination Date and shall provide
to the Executive the benefits described on Annex A for the periods described therein.




               (b) Without limiting the rights of the Executive at law or in equity, in the event it
is determined that the Company fails to make any payment or provide any benefit required to
be made or provided hereunder on a timely basis, the Company shall pay interest on the
amount or value thereof at an annualized rate of interest equal to the so-called composite
“prime rate” as quoted from time to time during the relevant period in The Wall Street
Journal, plus 4%. Any change in such prime rate shall be effective on and as of the date of
such change.




               (c) Notwithstanding any provision of this Agreement to the contrary, the parties’
respective rights and obligations under this Section 4 and under Sections 5, 7, 8 and the
last sentence of Section 9 will survive any termination or expiration of this Agreement or
the termination of the Executive’s employment following a Change in Control for any reason
whatsoever.




               (d) Notwithstanding any provision to the contrary in any applicable plan, program or
agreement, upon the occurrence of a Change in Control, all equity incentive awards held by
the Executive shall become fully vested and all stock options held by the Executive shall
become fully exercisable.



          5. Parachute Payments




               (a) Anything in this Agreement to the contrary notwithstanding, but subject to Section
4(d)(8), in the event that it shall be determined (as hereafter provided)



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that any payment (other than the Gross-Up payments provided for in this Section 5) or
distribution by Laidlaw, the Company or any of their affiliates to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option, performance share,
performance unit, stock appreciation right or similar right, or the lapse or termination of
any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the “Code”) (or any successor provision thereto) by reason of being
considered “contingent on a change in ownership or control” of the Company or of Parent,
within the meaning of Section 280G of the Code (or any successor provision thereto) or to
any similar tax imposed by state or local law, or any interest or penalties with respect to
such tax (such tax or taxes, together with any such interest and penalties, being hereafter
collectively referred to as the “Excise Tax”), then the Executive shall be entitled to
receive an additional payment or payments (collectively, a “Gross-Up Payment”);
provided, however, that no Gross-up Payment shall be made with respect to
the Excise Tax, if any, attributable to (a) any incentive stock option, as defined by
Section 422 of the Code (“ISO”) granted prior to the initial execution of the Original
Agreement (as such term is defined in the Prior Agreement), or (b) any stock appreciation or
similar right, whether or not limited, granted in tandem with any ISO described in clause
(a). The Gross-Up Payment shall be in an amount such that, after payment by the Executive
of all taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.




          (b) Subject to the provisions of Section 5(f), all determinations required to be made
under this Section 5, including whether an Excise Tax is payable by the Executive and the
amount of such Excise Tax and whether a Gross-Up Payment is required to be paid by the
Company to the Executive and the amount of such Gross-Up Payment, if any, shall be made by a
nationally recognized accounting firm (the “Accounting Firm”) selected by the Executive in
his sole discretion. The Executive shall direct the Accounting Firm to submit its
determination and detailed supporting calculations to both the Company and the Executive
within 30 calendar days after the date of termination of the Executive’s employment, if
applicable, and any such other time or times as may be requested by the Company or the
Executive. If the Accounting Firm determines that any Excise Tax is payable by the
Executive, the Company shall pay the required Gross-Up Payment to the Executive within five
business days after receipt of such determination and calculations with respect to any
Payment to the Executive. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall, at the same time as it makes such determination, furnish the
Company and the Executive an opinion that the Executive has substantial authority not to
report any Excise Tax on his federal, state or local income or other tax return. As a
result of the uncertainty in the application of Section 4999 of the Code (or any successor
provision thereto) and the possibility of similar uncertainty regarding applicable state or
local tax law at the time of any determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company should have
been made (an



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“Underpayment”), consistent with the calculations required to be made hereunder. In
the event that the Company exhausts or fails to pursue its remedies pursuant to Section 5(f)
and the Executive thereafter is required to make a payment of any Excise Tax, the Executive
shall direct the Accounting Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting calculations to both the
Company and the Executive as promptly as possible. Any such Underpayment shall be promptly
paid by the Company to, or for the benefit of, the Executive within five business days after
receipt of such determination and calculations.




               (c) The Company and the Executive shall each provide the Accounting Firm access to and
copies of any books, records and documents in the possession of the Company or the
Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise
cooperate with the Accounting Firm in connection with the preparation and issuance of the
determinations and calculations contemplated by Section 5(b). Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment shall be binding upon the Company
and the Executive.




               (d) The federal, state and local income or other tax returns filed by the Executive
shall be prepared and filed on a consistent basis with the determination of the Accounting
Firm with respect to the Excise Tax payable by the Executive. The Executive shall make
proper payment of the amount of any Excise Tax, and at the request of the Company, provide
to the Company true and correct copies (with any amendments) of his federal income tax
return as filed with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such payment. If prior to the
filing of the Executive’s federal income tax return, or corresponding state or local tax
return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment
should be reduced, the Executive shall within five business days pay to the Company the
amount of such reduction.




               (e) The fees and expenses of the Accounting Firm for its services in connection with
the determinations and calculations contemplated by Section 5(b) shall be borne by the
Company. If such fees and expenses are initially paid by the Executive, the Company shall
reimburse the Executive the full amount of such fees and expenses within five business days
after receipt from the Executive of a statement therefor and reasonable evidence of his
payment thereof.




               (f) The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service or any other taxing authority that, if successful, would require the payment
by the Company of a Gross-Up Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the Executive actually receives notice
of such claim and the Executive shall further apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid (in each case, to the extent
known by the Executive). The Executive shall not pay such claim prior to the earlier of (a)
the expiration of the 30-calendar-day period following the date on which he gives such
notice to the Company and (b) the date that any payment of amount with respect to such claim
is due. If the Company notifies the



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Executive in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:




                    (i) provide the Company with any written records or documents in his
possession relating to such claim reasonably requested by the Company;




                    (ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including
without limitation accepting legal representation with respect to such claim
by an attorney competent in respect of the subject matter and reasonably
selected by the Company;




                    (iii) cooperate with the Company in good faith in order effectively to
contest such claim; and




                    (iv) permit the Company to participate in any proceedings relating to
such claim;


provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such contest and shall
indemnify and hold harmless the Executive, on an after-tax basis, for and against any Excise Tax or
income tax, including interest and penalties with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without limiting the foregoing provisions of
this Section 4(d)(6), the Company shall control all proceedings taken in connection with the
contest of any claim contemplated by this Section 5(f) and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim (provided, however, that the Executive may participate therein
at his own cost and expense) and may, at its option, either direct the Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs the Executive to pay the tax claimed
and sue for a refund, the Company shall advance the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income or other tax, including interest or penalties with respect thereto,
imposed with respect to such advance; and provided further, however, that
any extension of the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which the contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company’s control of any such contested claim shall be
limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.





               (g) If, after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 5(f), the Executive receives any refund with respect to such claim, the
Executive shall (subject to the Company’s complying with the requirements of



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Section 5(f)) promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company pursuant to Section 5(f), a
determination is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its intent to contest
such denial or refund prior to the expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and the amount of
any such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid by the Company to the Executive pursuant to this Section 5.




               (h) Notwithstanding any provision of this Agreement to the contrary, if (a) but for
this sentence, the Company would be obligated to make a Gross-Up Payment to the Executive,
(b) the aggregate “present value” of the “parachute payments” to be paid or provided to the
Executive under this Agreement or otherwise does not exceed 1.15 multiplied by three times
the Executive’s “base amount,” and (c) but for this sentence, the net after-tax benefit to
the Executive of the Gross-Up Payment would not exceed $50,000 (taking into account both
income taxes and any Excise Tax), then the payments and benefits to be paid or provided
under this Agreement will be reduced to the minimum extent necessary (but in no event to
less than zero) so that no portion of any payment or benefit to the Executive, as so
reduced, constitutes an “excess parachute payment.” For purposes of this Section 5(h), the
terms “excess parachute payment,” “present value,” “parachute payment,” and “base amount”
will have the meanings assigned to them by Section 280G of the Code. The determination of
whether any reduction in such payments or benefits to be provided under this Agreement is
required pursuant to the preceding sentence will be made at the expense of the Company, if
requested by the Executive or the Company, by the Accounting Firm. The fact that the
Executive’s right to payments or benefits may be reduced by reason of the limitations
contained in this Section 5(h) will not of itself limit or otherwise affect any other rights
of the Executive other than pursuant to this Agreement. In the event that any payment or
benefit intended to be provided under this Agreement or otherwise is required to be reduced
pursuant to this Section 5(h), the Executive will be entitled to designate the payments
and/or benefits to be so reduced in order to give effect to this Section 5(h). The Company
will provide the Executive with all information reasonably requested by the Executive to
permit the Executive to make such designation. In the event that the Executive fails to
make such designation within 10 business days of the date of termination of the Executive’s
employment, the Company may effect such reduction in any manner it deems appropriate.



          6. No Mitigation Obligation. The Company hereby acknowledges that it will be
difficult and may be impossible for the Executive to find reasonably comparable employment
following the Termination Date. Accordingly, the payment of the severance compensation by the
Company to the Executive in accordance with the terms of this Agreement is hereby acknowledged by
the Company to be reasonable, and the Executive will not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise, nor will any
profits, income, earnings or other benefits from any source whatsoever create any mitigation,
offset, reduction or any other obligation on the part of



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the Executive hereunder or otherwise, except as expressly provided in the last sentence of
Section 2 set forth on Annex A.



     7. Legal Fees and Expenses. It is the intent of the Company that the Executive not be
required to incur legal fees and the related expenses associated with the interpretation,
enforcement or defense of Executive’s rights under this Agreement by litigation or otherwise
because the cost and expense thereof would substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if the Executive reasonably believes that the
Company has failed to comply with any of its obligations under this Agreement or in the event that
the Company or any other person takes or threatens to take any action to declare this Agreement
void or unenforceable, or institutes any litigation or other action or proceeding designed to deny,
or to recover from, the Executive the benefits provided or intended to be provided to the Executive
hereunder, subject to the other provisions of this Section 7, the Company irrevocably authorizes
the Executive from time to time to retain counsel of Executive’s choice, at the expense of the
Company to the extent and as hereafter provided, to advise and represent the Executive in
connection with any such interpretation, enforcement or defense, including, without limitation, the
initiation or defense of any litigation or other legal action, whether by or against the Company or
any director, officer, stockholder or other person affiliated with the Company, in any
jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to the Executive’s entering into an
attorney-client relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the Executive and such
counsel. The Company will pay and be solely responsible for any and all attorneys’ and related
fees and expenses incurred by the Executive in connection with any of the foregoing, except to the
extent that the Executive fails to prevail on a material claim in any such proceeding described in
this Section 7.



     8. Confidentiality. The Executive acknowledges that in the course of his employment
by the Company, he will or may have access to and become informed of confidential or proprietary
information (as defined in this Section 8) of the Company. The Executive hereby covenants and
agrees that he will not, without the prior written consent of the Company, during the Term or
thereafter disclose to any person not employed by the Company, or use in connection with engaging
in competition with the Company, any confidential or proprietary information of the Company. For
purposes of this Agreement, the term “confidential or proprietary information” will include all
information of any nature and in any form that is owned by the Company and that is not publicly
available (other than by Executive’s breach of this Section 8) or generally known to persons
engaged in businesses similar or related to those of the Company. Confidential or proprietary
information will include, without limitation, the Company’s financial matters, customers,
employees, industry contracts, strategic business plans, product development (or other proprietary
product data), marketing plans, and all other secrets and all other information of a confidential
or proprietary nature. For purposes of the preceding two sentences, the term “Company” will also
include any Subsidiary (collectively, the “Restricted Group”). The foregoing obligations imposed
by this Section 8 will not apply (i) during the Term, in the course of the business of and for the
benefit of the Company, (ii) if such confidential or proprietary information will have become,
through no fault of the Executive, generally known to the public or (iii) if the Executive is
required by law to make disclosure (after giving the Company notice and an opportunity to contest
such requirement).



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     9. Employment Rights. Nothing expressed or implied in this Agreement will create any
right or duty on the part of the Company or the Executive to have the Executive remain in the
employment of the Company or any Subsidiary prior to or following any Change in Control. Any
termination of employment of the Executive or the removal of the Executive from the office or
position in the Company or any Subsidiary that occurs (i) not more than 90 days prior to the date
on which a Change in Control occurs, and (ii) following the commencement of any discussion with a
third person that ultimately results in a Change in Control, shall be deemed to be a termination or
removal of the Executive after a Change in Control for purposes of this Agreement.



     10. Post-termination Assistance. Executive shall provide such information and
assistance to the Company as the Company may reasonably request, upon reasonable notice, in
connection with any litigation in which it or any of its affiliates is or may become a party. The
Company shall reimburse the Executive for any expenses, including travel expenses, incurred by the
Executive in connection with providing such information and assistance.



     11. Withholding of Taxes. The Company may withhold from any amounts payable under
this Agreement all federal, state, city or other taxes as the Company is required to withhold
pursuant to any applicable law, regulation or ruling.



     12. Successors and Binding Agreement.




               (a) The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent the Company would be required to perform if no such
succession had taken place. This Agreement will be binding upon and inure to the benefit of
the Company and any successor to the Company, including, without limitation, any persons
acquiring directly or indirectly all or substantially all of the business or assets of the
Company whether by purchase, merger, consolidation, reorganization or otherwise (and such
successor shall thereafter be deemed the “Company” for the purposes of this Agreement), but
will not otherwise be assignable, transferable or delegable by the Company.




               (b) This Agreement will inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees and legatees.




               (c) This Agreement is personal in nature and neither of the parties hereto shall,
without the consent of the other, assign, transfer or delegate this Agreement or any rights
or obligations hereunder except as expressly provided in Sections 12(a) and 12(b). Without
limiting the generality or effect of the foregoing, the Executive’s right to receive
payments hereunder will not be assignable, transferable or delegable, whether by pledge,
creation of a security interest, or otherwise, other than by a transfer by Executive’s will
or by the laws of descent and distribution and, in the event of any



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attempted assignment or transfer contrary to this Section 12(c), the Company shall have
no liability to pay any amount so attempted to be assigned, transferred or delegated.



     13. Notices. For all purposes of this Agreement, all communications, including,
without limitation, notices, consents, requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly given when hand delivered or
dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five
business days after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three business days after having been sent by a nationally
recognized overnight courier service (such as Federal Express or UPS) addressed to the Company (to
the attention of the Secretary of the Company) at its principal executive office and to the
Executive at his principal residence, or to such other address as any party may have furnished to
the other in writing and in accordance herewith, except that notices of changes of address shall be
effective only upon receipt.



     14. Governing Law. The validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such State.



     15. Validity. If any provision of this Agreement or the application of any provision
hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it
enforceable, valid or legal.



     16. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing signed by the
Executive and the Company. No waiver by either party hereto at any time of any breach by the other
party hereto or compliance with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement. References to Sections are to references to
Sections of this Agreement.



     17. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
agreement.



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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered
on this ___day of January, 2005.



	 	 	 	 	 	 	 
	 	 	GREYHOUND LINES, INC.
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	
	 	 
	 	 	Name: Stephen E. Gorman
	 	 	Title: President and Chief Executive Officer
	 
	 	 	 	 	 	 
	 	 	LAIDLAW INTERNATIONAL INC.
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	
	 	 
	 	 	Name: Kevin Benson
	 	 	Title: President and Chief Executive Officer
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE
	 
	 	 	 	 	 	 
	 	 	

	 	 	John Werner Haugsland






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Annex A




     1. The Company shall pay to the Executive a lump sum payment in an amount equal to three (3)
times the sum of (A) Base Pay (at the highest rate in effect for any period prior to the
Termination Date), plus (B) Incentive Pay (in an amount equal to not less than the higher of (x)
the highest aggregate Incentive Pay earned in any fiscal year after the Change in Control or in any
of the three fiscal years immediately preceding the year in which the Change in Control occurred or
(y) the plan target for which the year in which the Change in Control occurred).



     2. The Company shall, for a period of thirty-six (36) months following the Termination Date
(the “Continuation Period”), arrange to provide the Executive with Employee Benefits that are
welfare benefits (but not stock option, stock purchase, stock appreciation or similar compensatory
benefits) substantially similar to those that the Executive was receiving or entitled to receive
immediately prior to the Termination Date (or, if greater, immediately prior to the reduction,
termination or denial described in Section 3(b)(ii)), except that the level of any such Employee
Benefits to be provided to the Executive may be reduced in the event of a corresponding reduction
generally applicable to all recipients of or participants in such Employee Benefits, which
Continuation Period will be considered service with the Company for the purpose of determining
service credits and benefits due and payable to the Executive under the Company’s retirement
income, supplemental executive retirement and other benefit plans of the Company applicable to the
Executive, his dependents or his beneficiaries immediately prior to the Termination Date.



     3. In addition to the retirement income, supplemental executive retirement, and other benefits
to which Executive is entitled under the Retirement Plans, a lump sum payment in an amount equal to
the actuarial equivalent of the excess of (x) the retirement pension and the medical, life and
other benefits that would be payable to the Executive under the Retirement Plans if Executive
continued to be employed through the Continuation Period given the Executive’s Base Pay (as
determined in Section 1) (without regard to any amendment to the Retirement Plans made subsequent
to a Change in Control which adversely affects in any manner the computation of retirement or
welfare benefits thereunder), over (y) the retirement pension and the medical, life and other
benefits that the Executive is entitled to receive (either immediately or on a deferred basis)
under the Retirement Plans. For purposes of this Section, “actuarial equivalent” shall be
determined using the actuarial assumptions mandated under Section 417(e)(3) of the Code in effect
for the month second preceding the date of payment and the Continuation Period will be considered
service with the Company for the purpose of determining service credits and benefits due and
payable to the Executive under the Company’s retirement pension and medical, life and other benefit
plans of the Company applicable to the Executive, his dependents or his beneficiaries immediately
prior to the Termination Date.




Annex - 1