Exhibit
10.16


 


EMPLOYMENT
AGREEMENT


 


THIS EMPLOYMENT AGREEMENT
(the “Agreement”) is made and entered into effective as of January 1, 2004 (the
“Effective Date”), by and between IESI Corporation, a Delaware corporation
(“IESI” or “Employer”), and Gordon P. Peckham (“Executive”).


 


WITNESSETH


 


WHEREAS, Employer desires
to employ Executive, and Executive desires to be employed by Employer, upon the
terms and subject to the conditions set forth in this Agreement;


 


NOW, THEREFORE, in
consideration of the mutual promises and covenants herein set forth and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Employer and Executive, intending to be legally bound,
agree as follows:


 


1.                                      Employment
- IESI hereby employs Executive as its Vice President and Region Manager upon
the terms and conditions and for the compensation herein provided. Executive
hereby agrees to be so employed and to render the services specified herein for
Employer and any subsidiaries or affiliates of Employer. In his capacity as its
Vice President and Region Manager of Employer, Executive shall devote his full
and undivided business time and attention to his duties and responsibilities.


 


2.                                      Term of
Employment - Subject to the provisions for termination as provided in
Section 5 hereof, the term of Executive's employment hereunder (the “Term”)
shall be for a period commencing as of the Effective Date and terminating
December 31, 2005.


 


3.                                      Duties and
Powers - During the Term, Executive agrees as follows: to devote his
full and exclusive business time and attention to the business of Employer and
of any subsidiaries or affiliates of the Company including, but not limited to,
IESI Corporation (excluding reasonable vacations and sick leave in accordance
with Employer's policies consistent with his position); to perform all duties
in a professional and prudent manner, to devote the best of his skill, energy,
experience and judgment to such duties; and to communicate to Employer
suggestions, ideas or information that may be helpful to Employer in its
businesses.  Executive shall have all
the powers and agrees to perform all of the duties associated with his position
as Vice President and Region Manager of Employer, subject to all lawful
policies and guidelines as may be established by the Board of Directors of
Employer (the “Board”).  Executive
agrees not to engage in any other activity or own any interest that would
conflict with the interests of Employer or would interfere with his
responsibilities to Employer and the performance of his duties hereunder; provided,
however, that: (i) passive investment of less than 5% of the outstanding
securities of any company or any other investment that does not conflict with
Executive's performance of his duties to Employer hereunder shall be deemed not
to violate this provision, it being understood that, except as set forth below,
an investment of more than 5% in a company other than Employer engaged in the
solid waste industry shall be deemed to conflict with Executive's performance
of his duties hereunder; and (ii) Executive may engage in activities


 

















 


involving charitable,
educational, religious and similar types of organizations, speaking engagements
and similar type activities to the extent that such other activities do not
detract from the performance by Executive of his duties and obligations
hereunder.


 


4.                                      Compensation
and Benefits - For all services rendered by Executive pursuant to this
Agreement, Employer shall compensate Executive as follows:


 


(a)           Base Compensation - In
consideration of the full and faithful performance by Executive of his
obligations hereunder during the Term and subject to the terms and conditions
set forth herewith, Employer (or any subsidiary or affiliate of Employer for
which Executive also provides services hereunder) shall pay to Executive
$173,000 per annum (such annual compensation as it may be increased from time
to time shall be referred to herein as the “Base Compensation”).  Executive's Base Compensation will be paid
in accordance with Employer's customary payroll practices (but not less
frequently than monthly) and will be prorated based upon the number of days
elapsed in any partial year. Base Compensation shall be reviewed annually and
may be increased at the sole discretion of the Board.


 


(b)           Bonus - In addition to the
Base Compensation payable to Executive, Executive may be awarded performance
bonuses from time to time, in the sole discretion of the Board.


 


(c)           Benefits - Vacation.  During the Term, Executive shall be entitled
to such benefits (including health, dental and disability coverage, life
insurance, 401K, holiday and sick days) as Employer may, from time to time,
make available to its executive employees. Executive shall be entitled to three
(3) weeks paid vacation during each calendar year of employment, with such
vacation allowance being prorated in respect of any employment period of less
than 12 full months.  Notwithstanding
the foregoing, Executive shall not be entitled to take more than two weeks of
vacation leave at any one time.  Unused
vacation shall not be carried forward.


 


(d)           Expenses - Executive shall be
entitled to reimbursement for his ordinary and necessary business expenses,
incurred in the performance of his duties under this Agreement if supported by
reasonable documentation as required by Employer in accordance with its usual
practices.


 


(e)           Car Allowance - During the
Term, Executive shall be entitled to a car allowance of $800 per month.  Executive shall be responsible for all costs
associated with such car (other than fuel expenses reimbursable under Section
4(d) hereof).


 


(f)            Liability for Taxes -
Employer shall have no liability for any tax obligation of Executive
attributable to any payment made under this Agreement except for customary
federal and state withholding taxes (e.g., social security, Medicare,
etc.).  Employer may withhold from any
such payment such amounts as may be required by applicable provisions of the
Internal Revenue Code, other tax laws, and the rules and regulations of the
Internal Revenue Service and other tax agencies, as in effect at the time of
any such payment.


 


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5.             Expiration/Termination of
Employment


 


(a)           Expiration at End of Term -
Unless earlier terminated in accordance with the terms of this Agreement,
Executive's employment shall expire at the end of the Term.


 


(b)           Termination at Will - The
parties acknowledge and agree that Executive's employment hereunder is an
employment at will.  Notwithstanding any
other provision contained in this Agreement, either Executive or Employer may
terminate Executive's employment hereunder at any time with or without Cause
(as defined in subsection 5(e)(i)) or for Good Reason (as defined in subsection
5(e)(ii)) at his election upon prior written notice (a “Termination Notice”) to
the other.  A Termination Notice shall
be effective upon delivery to the other party and the termination shall be
effective as of the date set forth in such Termination Notice (hereinafter, the
“Termination Date”).


 


(c)           Effect of Expiration or
Termination For Cause or Without Good Reason - Upon the expiration of this
Agreement pursuant to subsection 5(a) hereof or upon a termination of this
Agreement pursuant to subsection 5(b) hereof by Employer with Cause or by Executive
without Good Reason, Executive shall be entitled to payment of: (i) Base
Compensation through the Termination Date; (ii) amounts accrued under benefit
plans in which Executive is a participant as of the Termination Date.


 


(d)           Effect Of Termination Without
Cause or For Good Reason - Upon the termination of this Agreement pursuant
to subsection 5(b) hereof by Employer without Cause or by Executive for Good
Reason, Executive shall be entitled to payment of: (i) Base Compensation (at
the rate in effect on the date of such termination) and all benefits under
Section 4(c) hereof for 18 months; and (ii) amounts accrued under benefit plans
in which Executive is a participant as of such termination date..


 


(e)           Effect Of Termination Following a
Change of Control  -
Notwithstanding any other provision in this Agreement to the contrary,
following a Change in Control as defined in Section 6 hereof, (a) if Executive
chooses to terminate his employment without Good Reason pursuant to Section
5(b) hereof, such termination shall be treated as termination under Section
5(c) hereof; (b) if Employer (or its successor) terminates Executive's
employment without Cause pursuant to Section 5(b) hereof, such termination
shall be treated as a termination under Section 5(d) hereof, except that
Executive shall receive Base Compensation and benefits for the “Payout Period”
(as defined below).  For the purposes of
this Agreement, “Payout Period” shall mean 18 months and includes Base
Compensation, bonus (equal to 33 % of Base Compensation, times 1 year) and
benefits.  If a Change in Control as
defined in Section 6 occurs within 6 months after Executive has been terminated
Without Cause or For Good Reason, then termination shall be treated as a termination
following a Change of Control, and Executive shall receive Base Compensation,
bonus and benefits as defined by the “Payout Period”.


 


(f)            Definitions of “Cause” and “Good
Reason” - For purposes of this Agreement, the terms “Cause” and “Good
Reason” shall have the following meanings:


 


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(i)            “Cause” shall mean (1) the failure
of Executive to perform his duties with Employer (other than any such failure
resulting from death or the inability of Executive to perform the essential
functions of his job, with or without a reasonable accommodation) or the
material breach of this Agreement by Executive if Employer gives notice of such
cause and it remains uncured for ten (10) days following such notice; (2) any
act by Executive of fraud or dishonesty with respect to any aspect of
Employer's business; (3) drug or alcohol abuse or related behavior that impedes
Executive's job performance or brings Executive or Employer into disrepute in
the community; (4) misappropriation of funds or any corporate opportunity: (5)
a conviction or affirmative finding by an appropriate administrative agency
that Executive is guilty of a felony or crime of moral turpitude (or a plea of
nolo contendere thereto); (6) acts by Executive attempting to secure or
securing any personal profit not fully disclosed to and approved by the Board
in connection with any transaction entered into on behalf of Employer; or (7)
gross, willful or wanton negligence or misconduct by Executive.


 


(ii)           “Good Reason” shall mean (1) a
material and adverse change in Executive's status or position as an officer of
Employer or a material reduction in the duties and responsibilities previously
exercised by Executive, or any removal of Executive from or any failure to
reappoint or reelect Executive to such position, except in connection with the
termination of Executive's service as an officer for Cause, or as a result of
Executive's death or inability to perform the essential functions of his job,
with or without a reasonable accommodation, or (2) a reduction (other than for
Cause) by Employer in Executive's Base Compensation as of the date hereof, or
(3) a relocation of Executive's assigned place of employment outside the
Dallas/Fort Worth Standard Metropolitan Statistical Area without Executive's
consent, or (4) a Change of Control.


 


(f)            Upon the termination of this
Agreement by Employer with Cause or by Executive without Good Reason, Employer
shall have the option, exercisable within ninety (90) days after the
termination date, to purchase all stock of Employer then owned by Executive at
fair market value on the date of termination, which shall be determined in good
faith by the Board.  In the event that
Executive disagrees with the Board's determination of fair market value, it
shall be determined by an independent certified public accountant selected by
the Board.  Payment for such stock
shall, at Employer's option, be in cash or by promissory note in the amount of
the fair market value, bearing interest at 10% annum, and payable in no more
than three equal annual installments of principal, together with accrued
interest.


 


(g)           Upon the termination of this
Agreement by Employer without Cause or by Executive with Good Reason, Executive
shall have the option, exercisable within ninety (90) days after the termination
date, to require Employer to purchase all stock of Employer then owned by
Executive, the valuation and payment terms to be determined as set out in (f)
above.  Executive (or his duly
designated personal representative or executor) shall have the same option to
require Employer to purchase Executive's stock in the event of Executive's
death or permanent disability.  Such
option must be exercised by notice to Employer within ninety (90) days after
Executive's death or permanent disability.


 


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(h)           Notwithstanding any provision to the
contrary in any of the Company's stock option plans or agreements, in the event
of Executive's permanent disability or death, any and all stock options that
have been granted to Executive by the Company shall be exercisable by Executive
and/or his successor, assigns, administrators or executors during the ten years
(plus any replacement options and or time extensions to the existing options)
that said stock option(s) are outstanding.


 


6.                                      Change in
Control is defined as:


 


For purposes of
this Plan, a Change in Control shall be deemed to have occurred if:


 


(a)           a tender offer (or series of related
offers) shall be made and consummated for the ownership of 50% or more of the
outstanding voting securities of the Employer;


 


(b)           the Employer shall be merged or
consolidated with another corporation and as a result of such merger or
consolidation less than 50% of the outstanding voting securities of the
surviving or resulting corporation shall be owned in the aggregate by the
former shareholders of the Company, any employee benefit plan of the Company or
its subsidiaries, and their affiliates;


 


(c)           the Employer shall sell substantially
all of its assets to another corporation that is not wholly owned by the
Company; or


 


(d)           a Person (as defined below) shall
acquire 50% or more of the outstanding voting securities of the Company
(whether directly, indirectly, beneficially or of record).


 


For purposes of
this Section, ownership of voting securities shall take into account and shall
include ownership as determined by applying the provisions of Rule
13d-3(d)I)(i) (as in effect on the date hereof) under the Exchange Act.  Also for purposes of this Section 6(b),
Person shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof; however, a Person shall
not include (1) the Employer or any of its subsidiaries; (2) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its subsidiaries; (3) an underwriter temporarily holding securities
pursuant to an offering of such securities; or (4) a corporation owned,
directly or indirectly, by the shareholders of the Employer in substantially
the same proportion as their ownership of stock of the Company.


 


7.                                      Non-Interference,
Non-Solicitation and Non-Competition Covenants


 


(a)           Pursuant to this Agreement, Executive
has agreed to become Vice President and Region Manager of Employer and to
comply with a non-disclosure provision in Section 8. Executive recognizes and
acknowledges that he will be given access to certain of Employer's Confidential
Information (as hereafter defined in Section 9(a)), and have access


 


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to and authority to
develop relationships with customers of Employer because of his position and
status as an Employer's President and Chief Executive Officer, which he would
not otherwise attain.  In consideration of
the foregoing, Executive agrees to comply with the terms of this Section 7.


 


(b)           The restraints imposed by this
Section 7 shall apply during any period that Executive continues to receive
payment of Base Compensation hereunder, and for a period of one year thereafter
(the “Restricted Period”). Notwithstanding any other provision in this
Agreement, if Employer terminates Executive's employment under Section 5(e)
following a Change in Control, the Restricted Period shall extend for a period
ending one year after the Payout Period. 
In the event that any Court having jurisdiction should find that the
Restricted Period is so long and/or the scope (distance) (as set forth below)
is so broad as to constitute an undue hardship on Executive, then, in such
event only, the Restricted Period and area limitations shall be valid for the
maximum time and area for which they could be legally made and enforced.


 


(c)           During the Restricted Period,
Executive shall not, as an executive (other than an executive of Employer or an
affiliate thereof), employee, employer, stockholder, officer, director,
partner, consultant, advisor, proprietor, lender, provider of capital or other
ownership, operational or management capacity, directly or indirectly, (i)
solicit or hire any employee of Employer or otherwise interfere with or disrupt
the employment relationship between Employer and any employee, (ii) solicit or
do business with (a) Employer's customers with whom Employer did business while
Executive was employed under this Agreement or (b) individuals or entities whom
Executive met as a result of his position with Employer while Executive was
employed under this Agreement, that results in competition with Employer in any
county, parish or other comparable jurisdiction within a state, province or
nation located in North America in which any of such customers have operations
(other than customers whose business relationship with Employer has terminated
for at least 90 days) or in which Employer has conducted business while
Executive was employed under this Agreement (collectively, the “Restricted
Area”), or (iii) be associated with any entity engaged in the business of
non-hazardous waste disposal in the Restricted Area that results in competition
with Employer (but excluding association due to ownership of less than 5% of
the outstanding securities of any such entity).


 


(d)           Executive expressly recognizes and
agrees that the restraints imposed by this Section 7 are (i) reasonable as to
time, geographic limitation and scope of activity to be restrained; (ii)
reasonably necessary to the enjoyment by Employer of the value of its assets
and to protect its legitimate interests; and (iii) not oppressive.  Executive further expressly recognizes and
agrees that the restraints imposed by this Section 7 represent a reasonable and
necessary restriction for the protection of the legitimate interests of
Employer, that the failure by the Executive to observe and comply with the
covenants and agreements in this Section 7 will cause irreparable harm to
Employer, that it is and will continue to be difficult to ascertain the harm
and damages to Employer that such a failure by the Executive would cause, that
the consideration received by the Executive for entering into these covenants
and agreements is fair, that the covenants and agreements and their enforcement
will not deprive Executive of his ability to earn a reasonable living in the
waste disposal field or otherwise,


 


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and that Executive has
acquired knowledge and skills in his field that will allow him to obtain
employment without violating these covenants and agreements. Executive further
expressly acknowledges that he has been encouraged to and has consulted
independent counsel, and has reviewed and considered this Agreement with that
counsel before executing this Agreement.


 


8.                                      Memoranda,
Notes, Records, Etc.  - All
memoranda, notes, records, customer lists or other documents made or compiled
by Executive or otherwise made available to him concerning the business of
Employer or its subsidiaries or affiliates shall be Employer's property and
shall be delivered to Employer upon the expiration or termination of
Executive's employment hereunder or at any other time upon request by Employer,
and Executive shall retain no copies of those documents. Executive shall never
at any time have or claim any right, title or interest in any material or
matter of any sort prepared for or used in connection with the business or
promotion of Employer.


 


9.                                      Nondisclosure


 


(a)           Executive hereby acknowledges that in
connection with his employment by Employer he will be exposed to and may obtain
certain information (including, without limitation, procedures, memoranda,
notes, records and customer and supplier lists whether such information has
been or is made, developed or compiled by Executive or otherwise has been or is
made available to him) regarding the business and operations of Employer and
its subsidiaries or affiliates. 
Executive further acknowledges that such information and procedures are
unique, valuable, considered trade secrets and deemed proprietary by Employer.
For purposes of this Agreement, such information and procedures shall be
referred to as “Confidential Information,” except that the following shall not
be considered Confidential Information: (i) information disclosed on a
non-confidential basis to third parties by Employer (but not by Executive in
violation of this Agreement), (ii) information released from confidential
treatment by written consent of Employer, and (iii) information lawfully
available to the general public.


 


(b)           Executive agrees that all
Confidential Information is and will remain the property of Employer.  Executive further agrees, for the duration
of the Term and thereafter, to hold in the strictest confidence all Confidential
Information, and not to, directly or indirectly, duplicate, sell, use, lease,
commercialize, disclose or otherwise divulge to any person or entity any
portion of the Confidential Information or use any Confidential Information for
his own benefit or profit or allow any person, entity or third party, other
than Employer and authorized Executives of the same, to use or otherwise gain
access to any Confidential Information.


 


(c)           It is the intention of the parties
that to the extent any Confidential Information may constitute a “trade secret”
as defined by Texas common law, then, in addition to the remedies set forth in
this Agreement, Employer may elect to bring an action against Executive in the
case of any actual or threatened misappropriation of any such trade secret by
Executive.


 


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(d)           Regardless of whether any of the
Confidential Information or any of the items set forth in Section 8 and this
Section 9 constitute a trade secret as defined by Texas common law, Executive
expressly recognizes and agrees that the restrictions contained in Section 8 of
this Agreement and this Section 9 represent a reasonable and necessary
protection of the legitimate interests of Employer, that his failure to observe
and comply with his covenants and agreements in those Sections will cause
irreparable harm to Employer, that it is and will continue to be difficult to
ascertain the harm and damages to Employer that such a failure by Executive
could cause, and that a remedy at law for such failure by Executive will be
inadequate.


 


10.                               Enforcement -
The parties hereto recognize that the covenants of Executive hereunder are
special, unique and of extraordinary character.  Accordingly, it is the intention of the parties that, in addition
to any other rights and remedies which Employer may have in the event of any
breach of said Sections, Employer shall be entitled, and hereby is expressly
and irrevocably authorized by Executive, inter  alia, to demand
and obtain specific performance, including without limitation temporary and
permanent injunctive relief, and all other appropriate equitable relief against
Executive in order to enforce against Executive, or in order to prevent any
breach or any threatened breach by Executive of, the covenants and agreements
contained herein. In case of any breach of this Agreement, nothing herein
contained shall be construed to prevent Employer from seeking such other remedy
in the courts as it may elect or invoke.


 


11.          Delegation of Duties and Assignment
of Rights


 


(a)           Executive may not delegate the
performance of any of his obligations or duties hereunder, or assign any rights
hereunder, without the prior written consent of Employer. Any such purported
delegation or assignment in the absence of such written consent shall be null
and void with no force or effect. 
Notwithstanding the foregoing, nothing herein shall prevent Executive
from delegating ministerial tasks to assistants of the type that are normally
assigned by executives to assistants.


 


(b)           Employer may not assign this
Agreement except with the prior written consent of Executive, except that
Employer may without Executive's consent assign all of its rights and
obligations under this Agreement to the person or entity acquiring a majority
of the assets or outstanding stock of IESI or pursuant to a merger or
consolidation of IESI.  In the event of
such an assignment by Employer, each reference in this Agreement to Employer
shall include the assignee from and after the date of such assignment.


 


(c)           In the event of a valid assignment
pursuant to this Section 11, this Agreement shall be binding on and inure to
the benefit of the parties hereto and their respective heirs, representatives,
successors and permitted assigns and any receiver, trustee in bankruptcy or
representative of the creditors of each such person.


 


12.                               Survival of Covenants
- Notwithstanding anything contained in this Agreement, upon the expiration of
the Term or the Restricted Period, as applicable, or in the event Executive's
employment is terminated for any reason whatsoever, the covenants and
agreements of


 


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Executive contained in
Sections 7 (to the extent set forth therein), 8, 9, 10 and 12 and the covenants
of Employer contained in Section 5 hereof shall survive any such expiration or
termination and shall not lapse except as provided herein.


 


13.                               Warranty -
Executive does hereby warrant that he has not taken any action, and covenants
that during the Term of this Agreement, or the Restricted Period, as
applicable, he shall take no such action, that constitutes or will constitute a
breach of any agreement concerning confidential information and trade secrets,
confidentiality, solicitation or non-competition to which he is bound as a party.


 


14.                               Severability
/Modification - If any term or provision of this Agreement is held or
deemed to be invalid or unenforceable in whole or in part, by a court of
competent jurisdiction, such term or provision shall be ineffective to the
extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement.


 


15.                               Governing Law
- This agreement is entered into in Texas, and the construction, validity and
interpretation of this agreement shall be governed by the laws of the State of
Texas without regard to the laws of conflicts of laws.


 


16.                               Effectiveness; Entire
Agreement; Amendment - This Agreement contains the entire understanding
and agreement between the parties relating to the subject matter hereof, that
certain Change of Control Agreement dated March 7, 2001 between IESI
Corporation and Executive is terminated and cancelled..  Neither this Agreement nor any provision
hereof may be waived, modified, amended, changed, discharged or terminated,
except by an agreement in writing signed by the party against whom enforcement
of any waiver, modification, change, amendment, discharge or termination is
sought.


 


17.                               Notices - Any
notice required or permitted to be given under the provisions of this Agreement
shall be in writing and shall be deemed to have been duly given on the date of
delivery if delivered personally to the party to whom notice is to be given (or
to the appropriate address below), or on the third day after mailing if mailed
to the party to whom notice is to be given by certified or registered mail,
return receipt requested, postage prepaid, or by courier, addressed as follows,
or to such other person at such other address as any party may request in
writing to the other party to this Agreement:


 


	
  To Executive:

  	
   

  	
  Gordon D. Peckham

  
	
   

  	
   

  	
  6111 N. Beach, Apt. 1911

  
	
   

  	
   

  	
  Fort Worth, Texas 76137

  
	
   

  	
   

  	
   

  
	
  To IESI:

  	
   

  	
  IESI Corporation

  
	
   

  	
   

  	
  2301 Eagle Parkway, Suite 200

  
	
   

  	
   

  	
  Ft. Worth, Texas 76177

  



 


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Any party may change its address for purposes of this paragraph by
giving the other parties written notice of the new address in the manner set
forth above.


 


18.       Headings - The section headings
herein are for convenience only and shall not be used in interpreting or
construing this Agreement. 


 


IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement to
be effective as of the Effective Date.


 


	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gordon D. Peckham

  
	
   

  	
  GORDON
  D. PECKHAM

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYER:

  
	
   

  	
   

  
	
   

  	
  IESI CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/ Jeffrey J. Keenan

  
	
   

  	
   

  	
  JEFFREY
  J. KEENAN

  
	
   

  	
   

  	
  CHAIRMAN

  



 


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