Document:

Exhibit 10.2

 

TENDER AND VOTING AGREEMENT

 

THIS TENDER AND VOTING AGREEMENT (this “Agreement”) dated July 30, 2013, is entered into between Cubist Pharmaceuticals, Inc., a Delaware corporation (“Parent”), BRGO Corporation, a Delaware corporation and direct or indirect wholly owned subsidiary of Parent (“Purchaser”), and [                  ] (“Stockholder”), with respect to (i) the shares of common stock, par value $0.0001 per share (the “Shares”), of Trius Therapeutics, Inc., a Delaware corporation (the “Company”), (ii) all securities exchangeable, exercisable or convertible into Shares, and (iii) any securities issued or exchanged with respect to such Shares, and upon any recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up or combination of the securities of the Company or upon any other change in the Company’s capital structure, in each case whether now owned or hereafter acquired by the Stockholder (collectively, the “Securities”).

 

W I T N E S S E T H:

 

WHEREAS, Parent, Purchaser and the Company have entered into an Agreement and Plan of Merger dated as of the date hereof (as the same may be amended or supplemented, other than to lower the price to be paid in the Offer or Merger, the “Merger Agreement”) pursuant to which Purchaser has agreed to make a cash tender offer described therein and thereafter merge with and into the Company (the “Merger”) with the result that the Company becomes a wholly owned subsidiary of Parent;

 

WHEREAS, as of the date hereof, Stockholder beneficially owns and has the power to dispose of the Securities set forth on Schedule I hereto and has the power to vote the Shares set forth thereon;

 

WHEREAS, Parent and Purchaser desire to enter into this Agreement in connection with their efforts to consummate the acquisition of the Company;

 

WHEREAS, capitalized terms used in this Agreement and not defined have the meaning given to such terms in the Merger Agreement.

 

NOW, THEREFORE, in contemplation of the foregoing and in consideration of the mutual agreements, covenants, representations and warranties contained herein and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.                                      Certain Covenants.

 

1.1                               Lock-Up.  Subject to Section 1.5, except as contemplated by the Merger Agreement, Stockholder hereby covenants and agrees that between the date hereof and the Termination Date, Stockholder will not (a) directly or indirectly, sell, transfer, assign, pledge, hypothecate, tender, encumber or otherwise dispose of or limit its right to vote in any manner any of the Securities, or agree to do any of the foregoing, or (b) take any action which would have the effect of preventing or disabling Stockholder from performing its obligations under this Agreement.  Notwithstanding the foregoing, in connection with any transfer not involving or relating to any Acquisition Proposal (as defined in the Merger Agreement), Stockholder may transfer any or all of the Securities as follows: (i) in the case of a Stockholder that is an entity, to

 

 

any parent entity, subsidiary or affiliate under common control with such Stockholder, or to a partner or member of Stockholder, and (ii) in the case of a Stockholder that is an individual, to Stockholder’s spouse, ancestors, descendants or any trust for any of their benefits or to a charitable trust; provided, however, that in any such case, prior to and as a condition to the effectiveness of such transfer, (x) each person to which any of such Securities or any interest in any of such Securities is or may be transferred shall have executed and delivered to Parent and Purchaser a counterpart to this Agreement pursuant to which such person shall be bound by all of the terms and provisions of this Agreement, and (y) this Agreement shall be the legal, valid and binding agreement of such person, enforceable against such person in accordance with its terms.

 

1.2                               RESERVED

 

1.3                               Certain Events.  This Agreement and the obligations hereunder will attach to the Securities and will be binding upon any person to which legal or beneficial ownership of any or all of the Securities passes, whether by operation of Law or otherwise, including without limitation, Stockholder’s successors or assigns.  This Agreement and the obligations hereunder will also attach to any additional Shares or other Securities of the Company issued to or acquired by Stockholder.

 

1.4                               Grant of Proxy; Voting Agreement.

 

(a)                                 The Stockholder has revoked or terminated any proxies, voting agreements or similar arrangements previously given or entered into with respect to the Securities and hereby irrevocably appoints Parent as proxy for Stockholder to vote the Securities for Stockholder and in Stockholder’s name, place and stead, at any annual or special meeting, or at any adjournment thereof or pursuant to any consent of the holders of the Shares, in lieu of a meeting or otherwise, whether before or after the Acceptance Time (as defined in the Merger Agreement), for the adoption of the Merger Agreement and against any Acquisition Proposal.  Stockholder may vote the Securities in its sole discretion on all other matters not referred to in this Section 1.4(a), and Parent may not exercise this proxy with respect to such other matters. The parties acknowledge and agree that neither Parent, nor Parent’s successors, assigns, subsidiaries, divisions, employees, officers, directors, stockholders, agents and affiliates shall owe any duty to, whether in law or otherwise, or incur any liability of any kind whatsoever, including without limitation, with respect to any and all claims, losses, demands, causes of action, costs, expenses (including reasonable attorney’s fees) and compensation of any kind or nature whatsoever to Stockholder in connection with or as a result of any voting by Parent of the Securities or any execution of any consent in accordance with this Section 1.4(a).  The parties acknowledge that, pursuant to the authority hereby granted under the irrevocable proxy, Parent may vote the Securities in furtherance of its own interests, and Parent is not acting as a fiduciary for Stockholder.

 

(b)                                 Notwithstanding the foregoing grant to Parent of the irrevocable proxy, if Parent elects not to exercise its rights to vote the Securities pursuant to the irrevocable proxy, Stockholder agrees to vote the Securities during the term of this Agreement in favor of or give its consent to, as applicable, a proposal to adopt the Merger Agreement and otherwise as described in Section 1.4(a) at any annual or special meeting or action of the holders of the Shares in lieu of a meeting or otherwise.

 

 

(c)                                  This irrevocable proxy shall not be terminated by any act of Stockholder or by operation of law, whether by the death or incapacity of Stockholder or by the occurrence of any other event or events (including, without limiting the foregoing, the termination of any trust or estate for which Stockholder is acting as a fiduciary or fiduciaries or the dissolution or liquidation of any corporation or partnership).  If between the execution hereof and the Termination Date, Stockholder should die or become incapacitated, or if any trust or estate holding the Securities should be terminated, or if any corporation or partnership holding the Securities should be dissolved or liquidated, or if any other such similar event or events shall occur before the Termination Date, certificates representing the Securities shall be delivered by or on behalf of Stockholder in accordance with the terms and conditions of the Merger Agreement and this Agreement, and actions taken by Parent hereunder shall be as valid as if such death, incapacity, termination, dissolution, liquidation or other similar event or events had not occurred, regardless of whether or not Parent has received notice of such death, incapacity, termination, dissolution, liquidation or other event.

 

(d)                                 The irrevocable proxy granted pursuant to this Section 1.4 will terminate on the Termination Date.

 

1.5                               Tender of Securities.  Stockholder agrees, in exchange for the consideration described in the Merger Agreement, to tender the Shares beneficially owned as of the date hereof and set forth on Schedule I hereto to Purchaser in the Offer as soon as practicable following the commencement of the Offer, and in any event not later than ten (10) business days following the commencement of the Offer, or if Stockholder has not received the Offer Documents by such time, within two (2) business days following Stockholder’s receipt of such Offer Documents but in any event prior to the Expiration Date. Unless this Agreement has been terminated in accordance with its terms, Stockholder shall not withdraw any such Shares so tendered unless the Offer is terminated.

 

1.6                               RESERVED

 

1.7                               Public Announcement.  Stockholder shall consult with Parent before issuing any press releases or otherwise making any public statements with respect to the transactions contemplated herein and shall not issue any such press release or make any such public statement without the approval of Parent, except as may be required by Law, including any filings with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  This Section 1.6 shall terminate and be null and void upon the earlier of (i) the Termination Date and (ii) consummation of the Merger.

 

1.8                               Disclosure.  Stockholder hereby authorizes Parent and Purchaser to publish and disclose in any announcement or disclosure required by the SEC, The Nasdaq Stock Market or any other national securities exchange and in the Offer Documents and, if necessary, the Proxy Statement (each as defined in the Merger Agreement), (including all documents and schedules filed with the SEC in connection with either of the foregoing), its identity and ownership of the Securities and the nature of its commitments, arrangements and understandings under this Agreement.  Parent and Purchaser hereby authorize Stockholder to make such

 

 

disclosure or filings as may be required by the SEC or The Nasdaq Stock Market or any other national securities exchange.

 

2.                                      Representations and Warranties of Stockholder.  Stockholder hereby represents and warrants to Parent and Purchaser, as of the date hereof, that:

 

2.1                               Ownership.  Stockholder has good and marketable title to, and is the sole legal and beneficial owner of, the Securities set forth on Schedule I hereto, in each case free and clear of all liabilities, claims, liens, options, proxies, charges, participations and encumbrances of any kind or character whatsoever, other than those arising under the securities laws or under the Company’s governance documents or under any registration rights agreement between the Company and Stockholder (collectively, “Liens”).  At the time Purchaser purchases the Shares pursuant to the Offer, Stockholder will transfer and convey to Parent or its designee good and marketable title to the Shares included in the Securities, free and clear of all Liens created by or arising through Stockholder.

 

2.2                               Authorization.  Stockholder has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby and has sole voting power and sole power of disposition, with respect to the Securities with no restrictions on its voting rights or rights of disposition pertaining thereto.  Stockholder has duly executed and delivered this Agreement and this Agreement is a legal, valid and binding agreement of Stockholder, enforceable against Stockholder in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws affecting enforcement of creditors’ rights generally and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.  If Stockholder is married and the Securities constitute community property, this Agreement has been duly authorized, executed and delivered by Stockholder’s spouse, and this Agreement is a legal, valid and binding agreement of Stockholder’s spouse, enforceable against Stockholder’s spouse in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws affecting enforcement of creditors’ rights generally and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

 

2.3                               No Violation.  Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (a) require Stockholder to file or register with, or obtain any permit, authorization, consent or approval of, any governmental agency, authority, administrative or regulatory body, court or other tribunal, foreign or domestic, or any other entity other than filings with the SEC pursuant to the Exchange Act, or (b) violate, or cause a breach of or default under, or conflict with any contract, agreement or understanding, any Law binding upon Stockholder, except for such violations, breaches, defaults or conflicts which are not, individually or in the aggregate, reasonably likely to have a material adverse effect on Stockholder’s ability to satisfy its obligations under this Agreement.  No proceedings are pending which, if adversely determined, will have an adverse effect on Stockholder’s ability to vote or dispose of any of the Securities. The Stockholder has not previously assigned or sold any of the Securities set forth on Schedule I hereto to any third party.

 

 

2.4                               Stockholder Has Adequate Information.  Stockholder is a sophisticated seller with respect to the Securities and has adequate information concerning the business and financial condition of the Company to make an informed decision regarding the sale of the Securities and has independently and without reliance upon either Purchaser or Parent and based on such information as Stockholder has deemed appropriate, made its own analysis and decision to enter into this Agreement.  Stockholder acknowledges that neither Purchaser nor Parent has made and neither makes any representation or warranty, whether express or implied, of any kind or character except as expressly set forth in this Agreement.  Stockholder acknowledges that the agreements contained herein with respect to the Securities by Stockholder are irrevocable (prior to the Termination Date), and that Stockholder shall have no recourse to the Securities, Parent or Purchaser, except with respect to breaches of representations, warranties, covenants and agreements expressly set forth in this Agreement.

 

2.5                               No Setoff.  There are no legal or equitable defenses or counterclaims that have been asserted by or on behalf of the Company or Stockholder to reduce the amount of the Securities or affect the validity or enforceability of the Securities.

 

3.                                      Representations and Warranties of Parent and Purchaser.  Parent and Purchaser hereby represent and warrant to Stockholder, as of the date hereof, that:

 

3.1                               Authorization.  Parent and Purchaser have all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.  Parent and Purchaser have duly executed and delivered this Agreement and this Agreement is a legal, valid and binding agreement of each of Parent and Purchaser, enforceable against each of Parent and Purchaser in accordance with its terms.

 

3.2                               No Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will violate, or cause a breach of or default under, any contract or agreement, any statute or law, or any judgment, decree, order, regulation or rule of any governmental agency, authority, administrative or regulatory body, court or other tribunal, foreign or domestic, or any other entity or any arbitration award binding upon Parent or Purchaser, except for such violations, breaches or defaults which are not reasonably likely to have a material adverse effect on either Parent’s or Purchaser’s ability to satisfy its obligations under this Agreement.

 

4.                                      Survival of Representations and Warranties.  The respective representations and warranties of Stockholder, Parent and Purchaser contained herein shall not be deemed waived or otherwise affected by any investigation made by the other party hereto.  The representations and warranties contained herein shall not survive the Termination Date, subject to Section 6.1.

 

5.                                      Specific Performance.  Stockholder acknowledges that Purchaser and Parent will be irreparably harmed and that there will be no adequate remedy at law for a violation of any of the covenants or agreements of Stockholder which are contained in this Agreement.  It is accordingly agreed that, in addition to any other remedies which may be available to Purchaser and Parent upon the breach by Stockholder of such covenants and agreements, Purchaser and Parent shall have the right to obtain injunctive relief to restrain any breach or threatened breach

 

 

of such covenants or agreements or otherwise to obtain specific performance of any of such covenants or agreements.

 

6.                                      Miscellaneous.

 

6.1                               Term.  This Agreement and all obligations hereunder shall terminate upon the earlier of (i) the day after the Merger is consummated, (ii) the End Date (as defined in the Merger Agreement), (iii) the date of any modification, waiver or amendment to the Merger Agreement in a manner that reduces the amount or changes the form of consideration payable thereunder to Stockholder; provided that any substitution of a cash payment paid on the Closing Date for an identical value of potential payments under the CVR Agreement (as defined in the Merger Agreement), if approved by the Company’s Board of Directors, shall not result in a termination of this Agreement, and (iv) the termination of the Merger Agreement pursuant to Section 8 thereof and, if due in connection therewith, the payment in full of the Termination Fee (the earliest of (i), (ii), (iii) and (iv), the “Termination Date”).  Upon termination of this Agreement, all obligations of the parties under this Agreement will terminate, without any liability or other obligation on the part of any party hereto to any Person in respect hereof or the transactions contemplated hereby, and no party shall have any claim against another (and no person shall have any rights against such party), whether under contract, tort or otherwise, with respect to the subject matter hereof; provided, however, that the termination of this Agreement shall not relieve any party from liability arising from any willful breach prior to such termination.

 

6.2                               Fiduciary Duties.  Notwithstanding anything in this Agreement to the contrary: (a) Stockholder makes no agreement or understanding herein in any capacity other than in Stockholder’s capacity as a record holder and beneficial owner of Securities, and (b) nothing herein will be construed to limit or affect any action or inaction by Stockholder or any Representative of Stockholder, as applicable, serving on the Company Board of Directors or as an officer or fiduciary of the Company, acting in such person’s capacity as a director, officer or fiduciary of the Company.

 

6.3                               Expenses.  Each of the parties hereto shall pay its own expenses incurred in connection with this Agreement.  Each of the parties hereto warrants and covenants to the others that it will bear all claims for brokerage fees attributable to action taken by it.

 

6.4                               Binding Effect.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective representatives and permitted successors and assigns.

 

6.5                               Entire Agreement.  This Agreement contains the entire understanding of the parties and supersedes all prior agreements and understandings between the parties with respect to its subject matter.  This Agreement may be amended only by a written instrument duly executed by the parties hereto.

 

6.6                               Headings.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

 

6.7                               Assignment.  Without limitation of Section 1.1, this Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns.  Except as provided in Section 1.1, no party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties; provided, however, that each of Parent and Purchaser may freely assign its rights to another direct or indirect wholly owned subsidiary of Parent or Purchaser without such prior written approval but no such assignment shall relieve Parent or Purchaser of any of its obligations hereunder.  Any purported assignment requiring consent without such consent shall be void.

 

6.8                               Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be an original, but each of which together shall constitute one and the same Agreement.

 

6.9                               Notices.  Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed given when delivered in person, by overnight courier, by facsimile transmission (with receipt confirmed by telephone or by automatic transmission report) or by electronic mail (with receipt confirmed by telephone), or two business days after being sent by registered or certified mail (postage prepaid, return receipt requested), as follows:

 

(a)                                 if to Parent or Purchaser, to:

 

Cubist Pharmaceuticals, Inc.

65 Hayden Avenue

Lexington, Massachusetts 02421

Attn:                    Chief Executive Officer

Chief Legal Officer

Telephone:                                   (781) 860-8660

Facsimile:                                         (781)860-1407

 

with a copy to:

 

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, Massachusetts 02199

Attn:                    Christopher Comeau

Paul Kinsella

Email:            christopher.comeau@ropesgray.com

paul.kinsella@ropesgray.com

Telephone:                                   (617) 951-7000

Facsimile:                                         (617) 951-7050

 

 

(b)                                 If to Stockholder, to the addresses indicated on Schedule I hereto.

 

Any party may by notice given in accordance with this Section 6.9 to the other parties to designate updated information for notices hereunder.

 

6.10                        Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the Laws of the State of Delaware, without regard to its principles of conflicts of Laws.

 

6.11                        Enforceability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.  Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto will negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible and, absent agreement among the parties, a court is authorized to so modify this Agreement.

 

6.12                        Further Assurances.  From time to time, at Parent’s request and without further consideration, Stockholder (in its capacity as such) shall execute and deliver to Parent such documents and take such action as Parent may reasonably request in order to consummate more effectively the transactions contemplated hereby.

 

6.13                        Remedies Not Exclusive.  All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity will be cumulative and not alternative, and the exercise of any thereof by either party will not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.

 

6.14                        Waiver of Jury Trial.  EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

6.15                        No Agreement Until Executed. This Agreement shall not constitute or be deemed to evidence a contract, agreement, arrangement or understanding between the parties hereto unless and until (a) the Company Board of Directors has adopted and approved the possible acquisition of the Shares by Parent and Purchaser pursuant to the Merger Agreement, (b) the Merger Agreement is executed by all parties thereto and (c) this Agreement is executed by all parties hereto.

 

[The rest of this page has intentionally been left blank]

 

 

IN WITNESS WHEREOF, Parent, Purchaser and Stockholder have caused this Agreement to be duly executed as of the day and year first above written.

 

 

	
 
    	
CUBIST PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name: 
    	
Michael Bonney
    
	
 
    	
Title:
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BRGO CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name: 
    	
Michael Bonney
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
STOCKHOLDER:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    

 

 

SCHEDULE I TO 
 THE TENDER AND VOTING AGREEMENT

 

1.                                      Securities held by Stockholder:

 

	
Stockholder
    	
 
    	
Shares
    	
 
    	
Options to
   Purchase Shares
    	
 
    	
Restricted Stock
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

2.                                      Address to which notices or other communications are to be sent in accordance with Section 6.9 of this Agreement:

 

	
Stockholder:
    
	
 
    
	
 
    
	
Facsimile:
    
	
Email:
    
	
 
    
	
with a copy to:
    
	
 
    
	
 
    
	
Facsimile:
    
	
Email:
    
	
 
    
	
and with a copy to:EXHIBIT 10.63

 

 

 

2013 MANAGEMENT INCENTIVE PLAN

(EXECUTIVE)

 

I.                PURPOSE

 

The US Ecology, Inc. 2013 Management Incentive Plan (Executive) (“Plan”) provides a variable component of compensation for US Ecology, Inc. (“Company”) executives for achievement of objectives set by the Company’s Board of Directors (“Board”) during calendar year 2013 (“Plan Year”).  The Plan is designed to align the interests of executives with those of stockholders and attract, motivate and retain management critical to the long-term success of the Company.

 

II.           ADMINISTRATION

 

The administrator of the Plan shall be the Board’s Compensation Committee (“Administrator”).  The Administrator, or its designee, shall have full power, discretion and authority to, among other things, interpret the Plan, verify all amounts paid under the Plan, and establish rules and procedures for its administration, as deemed necessary and appropriate.  The Administrator may rely on opinions, reports or statements of the Company’s officers, public accountants and other professionals.  The calculation of any amounts to be paid under the Plan shall be performed by the Company’s Chief Financial Officer and submitted by the Company’s President to the Administrator for approval.  Any interpretation of the Plan or act of the Administrator, or its designee, in administering the Plan, shall be final and binding.

 

No member of the Board shall be liable for any action, interpretation or construction made in good faith with respect to the Plan.  The Company shall indemnify, to the fullest extent permitted by law, each member of its Board who may become liable in any civil action or proceeding with respect to decisions made relating to the Plan.

 

III.      ELIGIBILITY

 

Eligibility to participate in the Plan is limited to designated executives of the Company (each a “Participant”) as approved by the Administrator or the Board and shall be evidenced by a letter from the President (“Participant Letter”).

 

To be eligible to receive an award under the Plan, a Participant must have been employed by the Company (i) on a full-time basis during the Plan Year and (ii) on the date of any payment under the Plan, except as otherwise provided for in this Plan or when such requirement is waived by the Administrator.

 

a.              New Hire/Rehire — A Participant whose employment with the Company began during the Plan Year shall be eligible for an award on a pro-rata basis, provided the Administrator has approved participation and other conditions of the Plan are satisfied.  An award will be pro-rated based upon the number of calendar days the Participant was employed in an eligible position during the Plan Year.  In the case of rehires, there shall be no credit for prior service, unless otherwise approved in writing by the Administrator.

 

b.              Leave of Absence — A Participant who is absent from full-time employment with the Company for more than thirteen (13) consecutive weeks of the Plan Year shall not be eligible for payment under the Plan, unless the Administrator approves participation in writing.

 

c.               Promotion — If a Participant is promoted to an eligible position or from one eligible position to another eligible position (with a higher award potential) during the Plan Year, a pro-rated award will be calculated by factoring the number of calendar days in each eligible position and considering the Target Incentive, Plan Objectives, metrics and weights applicable during the Participant’s tenure in each position.

 

d.              Demotion — If a Participant is demoted from an eligible position during the Plan Year, such Participant shall be deemed ineligible for receipt of any payments under the Plan, unless otherwise approved in writing by the Administrator.

 

e.               Removal from Plan — A Participant may be removed from the Plan or an award adjusted, including elimination of any right to an award under the Plan, for insubordination, misconduct, malfeasance, or any formal disciplinary action taken by the Company during the Plan Year or prior to payment.

 

f.                Termination Without Cause by Company/With Good Reason by Participant — In the event a Participant is terminated without cause by the Company or for good reason by the Participant, as defined in the Participant’s employment agreement, any amount that would have been due the Participant absent his/her termination shall be paid on a pro-rata basis based on the number of calendar days the Participant was employed during the Plan Year.  Payment shall be made  according to the terms of the Plan and the requirement that the Participant be an employee on that date of payment shall be waived.

 

 

IV.       INCENTIVE AWARD

 

The Board shall establish the objectives (each a “Plan Objective”) that must be achieved for a Participant to receive payment of all or a portion of his/her target incentive amount, which amount is the product of the Participant’s annual salary and an established percentage (“Target Incentive”), also established by the Board.

 

Payments under the Plan, if any, shall be made to a Participant upon certification by the President that such payments are authorized by the Administrator and all applicable criteria have been satisfied.  Payments shall be made as soon as practicable after approval and availability of the Company’s final audited Plan Year financial statements, but in any event will be made by March 15, 2014.

 

V.            PLAN OBJECTIVES

 

Plan Objectives fall into one of three categories:  a) Financial (80% of Target Incentive), b) Health and Safety (10% of Target Incentive), and c) Compliance (10% of Target Incentive).  Plan Objectives are independent and mutually exclusive from each other, so that the applicable percentage of the Target Incentive may be earned if one Plan Objective is met, even if the threshold performance is not met for another Plan Objective.

 

a.              Financial — The Financial Plan Objective is based on the Plan Year’s actual consolidated operating income before Plan expenses. The target amount is set and approved by the Board (“Operating Income Target”).  Achievement will be determined by comparing the Plan Year’s actual financial results (based on audited financial information) to the Operating Income Target.  Achievement of the Operating Income Target will be weighted at 80% of a Participant’s Target Incentive.

 

The Administrator, in its sole discretion, may include or exclude certain non-recurring or special transactions from calculated operating income for purposes of determining the amount of an award under the Plan.

 

The portion of a Participant’s Target Incentive he or she may receive based on operating income results (“Finance Target Incentive”) is scalable. For every percentage point achievement over 89% of the Operating Income Target, up to and including 100% (rounded to the nearest percentage), a Participant shall earn 9.09% of the respective Finance Target Incentive.  Upon 100% achievement of the Operating Income Target, 100% of the respective Finance Target Incentive shall be available to a Participant.

 

If the Operating Income Target is exceeded, a Participant shall be eligible for an additional amount, calculated by multiplying the Participant’s annual salary by 1.25% (“Excess Percentage”) for every 1%, or fraction thereof, over the Operating Income Target and the resulting product by the respective Operating Income Target weight (“Additional Finance Incentive”). The Additional Finance Incentive is capped at one times the Participant’s Target Incentive.

 

By way of example only, a Participant with an annual base salary of $200,000 who has a Target Incentive of 40% would receive the following amounts based on various levels of achievement.

 

EXAMPLE

 

OPERATING INCOME TARGET

(WEIGHTED 80% OF TARGET INCENTIVE)

 

	
Achievement
    	
 
    	
% of
   Award
    	
 
    	
Cumulative
    	
 
    	
Payout
    	
 
    	
Achievement
    	
 
    	
% of
   Award
    	
 
    	
Cumulative
    	
 
    	
Payout
    	
 
    
	
89
    	
%
    	
0
    	
%
    	
0
    	
%
    	
$
    	
0
    	
 
    	
95
    	
%
    	
9.09
    	
%
    	
54.54
    	
%
    	
$
    	
34,906
    	
 
    
	
90
    	
%
    	
9.09
    	
%
    	
9.09
    	
%
    	
$
    	
5,818
    	
 
    	
96
    	
%
    	
9.09
    	
%
    	
63.63
    	
%
    	
$
    	
40,723
    	
 
    
	
91
    	
%
    	
9.09
    	
%
    	
18.18
    	
%
    	
$
    	
11,635
    	
 
    	
97
    	
%
    	
9.09
    	
%
    	
72.72
    	
%
    	
$
    	
46,541
    	
 
    
	
92
    	
%
    	
9.09
    	
%
    	
27.27
    	
%
    	
$
    	
17,453
    	
 
    	
98
    	
%
    	
9.09
    	
%
    	
81.81
    	
%
    	
$
    	
52,358
    	
 
    
	
93
    	
%
    	
9.09
    	
%
    	
36.36
    	
%
    	
$
    	
23,270
    	
 
    	
99
    	
%
    	
9.09
    	
%
    	
90.90
    	
%
    	
$
    	
58,176
    	
 
    
	
94
    	
%
    	
9.09
    	
%
    	
45.45
    	
%
    	
$
    	
29,088
    	
 
    	
100
    	
%
    	
9.10
    	
%
    	
100.00
    	
%
    	
$
    	
64,000
    	
 
    

 

Assuming 95% achievement of the Operating Income Target, the Participant in this example would be entitled to $34,906, calculated as follows:

 

 

	
 
    	
 
    	
OPERATING
   INCOME
   TARGET
    	
 
    
	
Annual Salary
    	
 
    	
$
    	
200,000
    	
 
    
	
Target Incentive
    	
 
    	
X 40
    	
%
    
	
Target Incentive Award
    	
 
    	
$
    	
80,000
    	
 
    
	
Financial Objective Weight
    	
 
    	
X 80
    	
%
    
	
Weighted Target Incentive Award
    	
 
    	
$
    	
64,000
    	
 
    
	
Cumulative Award Percent Earned
    	
 
    	
X 54.54
    	
%
    
	
Earned Award
    	
 
    	
$
    	
34,906
    	
 
    

 

Assuming instead a 105% achievement of the Operating Income Target, the Participant would be entitled to $74,000, calculated as follows:

 

	
 
    	
 
    	
OPERATING   INCOME
   TARGET
    	
 
    
	
Annual Salary
    	
 
    	
$
    	
200,000
    	
 
    
	
Target Incentive
    	
 
    	
X 40
    	
%
    
	
Target Incentive Award
    	
 
    	
$
    	
80,000
    	
 
    
	
Financial Objective Weight
    	
 
    	
X 80
    	
%
    
	
Weighted Target Incentive Award
    	
 
    	
$
    	
64,000
    	
 
    
	
Cumulative Award Percent Earned
    	
 
    	
X 100
    	
%
    
	
Earned Award
    	
 
    	
$
    	
64,000
    	
 
    

 

	
 
    	
 
    	
ADDITIONAL   FINANCE 
   INCENTIVE
    	
 
    
	
Annual Salary
    	
 
    	
$
    	
200,000
    	
 
    
	
Cumulative Excess Percentage (5 X 1.25%)
    	
 
    	
X 6.25
    	
%
    
	
Additional Finance Incentive Award
    	
 
    	
$
    	
12,500
    	
 
    
	
Financial Objective Weight
    	
 
    	
X 80
    	
%
    
	
Weighted Additional Finance Incentive Award
    	
 
    	
$
    	
10,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Finance Target Incentive
    	
 
    	
$
    	
64,000
    	
 
    
	
Additional Finance Incentive
    	
 
    	
$
    	
10,000
    	
 
    
	
Earned Award
    	
 
    	
$
    	
74,000
    	
 
    

 

Assuming instead a 145% achievement of the Operating Income Target, the Participant would be entitled to an Additional Finance Incentive of $80,000 and a total earned amount of $144,000, calculated as follows:

 

	
 
    	
 
    	
ADDITIONAL   FINANCE 
   INCENTIVE
    	
 
    
	
Annual Salary
    	
 
    	
$
    	
200,000
    	
 
    
	
Cumulative Excess Percentage (45 X 1.25%)
    	
 
    	
X 56.25
    	
%
    
	
Additional Finance Incentive Award
    	
 
    	
$
    	
112,500
    	
 
    
	
Financial Objective Weight
    	
 
    	
X 80
    	
%
    
	
Weighted Additional Finance Incentive Award   (Before Cap)
    	
 
    	
$
    	
90,000
    	
 
    
	
Additional Finance Incentive Award Cap (.40 x   $200,000)
    	
 
    	
$
    	
(80,000
    	
)
    
	
Excess Additional Finance Incentive Award   Disallowed
    	
 
    	
$
    	
10,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Finance Target Incentive
    	
 
    	
$
    	
64,000
    	
 
    
	
Additional Finance Incentive
    	
 
    	
$
    	
80,000
    	
 
    
	
Earned Award
    	
 
    	
$
    	
144,000
    	
 
    

 

b.              Health and Safety - The metrics for this Plan Objective are identified below and are weighted cumulatively at 10% of a Participant’s Target Incentive and individually at 2%.  Each metric is independent and mutually exclusive from the other  metrics so that a percentage of the Target Incentive related to Health and Safety may be earned independent of achievement of any other Health and Safety metric or other Plan Objective.

 

 

 

i.               Experience Modification Rating (“EMR”) (2.0% Weight) — The Target Incentive related to EMR shall be earned if the U.S. (1.0% Weight) and Stablex (1.0% Weight) metrics, as set and approved by the Board, are achieved as determined by the President and reviewed by the Administrator. One-half of the Target Incentive related to EMR (1.0%) may be earned if the U.S. or Stablex metric is achieved, even if the other is not achieved.

 

ii.            OSHA Designation (2.0% Weight) — The Target Incentive related to OSHA designation shall be earned if each of the Company’s operating facilities maintains its OSHA designation (e.g. STAR and SHARP) or other specified designation as determined on December 31, 2012; or takes such action as is required to pursue such a designation.

 

iii.         Total Case Rate (“TCR”) (2.0% Weight) — The Target Incentive related to TCR shall be earned if the Company-wide metric, as set and approved by the Board, is achieved as determined by the President and reviewed by the Administrator.

 

iv.        Days Away Restricted Time (“DART”) (2.0% Weight) — The Target Incentive related to DART shall be earned if the Company-wide metric, as set and approved by the Board, is achieved as determined by the President and reviewed by the Administrator.

 

v.           Lost Time Incident (“LTI”) (2.0% Weight) — The Target Incentive related to LTI shall be earned if the Company-wide metric, as set and approved by the Board, is achieved as determined by the President and reviewed by the Administrator.

 

c.               Compliance — The metric for this Plan Objective is the avoidance of Notices of Violation or Enforcement with monetary penalties during the Plan Year and is weighted at 10% of a Participant’s Target Incentive.  The Target Incentive related to Compliance (“Compliance Target Incentive”) shall be earned based on a determination by the Administrator, taking into consideration, among other things, the dollar amount of a monetary penalty paid (or accrued under generally accepted accounting principles — “GAAP”) in the Plan Year, severity of the Notices of Violation or Enforcement, regulatory basis for penalty and respective fact patterns.  This metric is independent so that a percentage of the Compliance Target Incentive may be earned independent and mutually exclusive of achievement of any other Plan Objective.

 

The President will include in each Participant Letter the applicable Target Incentive, Plan Objectives, metrics, weights and such other information as may be determined.

 

VI.       MISCELLANEOUS

 

a.              Interests Not Transferable — Any interest of a Participant under the Plan may not be voluntarily sold, transferred, alienated, assigned or encumbered, other than by will or pursuant to the laws of descent and distribution.  Notwithstanding the foregoing, if a Participant dies during the Plan Year, or after the Plan Year and prior to payment of an award, then a pro-rata portion of the award to which the Participant would have been eligible absent death shall be paid to the deceased’s beneficiary, as designated in writing by such Participant (attached hereto as Exhibit A); provided however, that if the deceased Participant has not designated a beneficiary then such amount shall be payable to the deceased Participant’s estate.  Payment shall be based on the number of calendar days the Participant was employed in an eligible position during the Plan Year and shall be made at the time other Participants are paid. The requirement that the Participant be an employee on that date of payment shall be waived.

 

b.              Withholding Taxes — The Company shall withhold from any amounts payable under the Plan applicable withholding including, but not limited to, federal, state, city and local taxes, FICA and Medicare as shall be legally required.  Additionally, the Company will withhold from any amounts payable under the Plan the applicable contribution for the Participant’s 401(k) Savings and Retirement Plan as defined in the US Ecology, Inc. 401(K) Plan description protected under ERISA.

 

c.               No Right of Employment — Nothing in this Plan will be construed as creating any contract of employment or conferring upon any Participant any right to continue in the employ or other service of the Company or limit in any way the right of Company to change such person’s compensation or other benefits or to terminate the employment or other service of such person with or without cause.

 

d.              No Representations — The Company does not represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will result from participation in the Plan.

 

 

e.               Section Headings — The section headings contained herein are for convenience only and, in the event of any conflict, the text of the Plan, rather than the section headings, will control.

 

f.                Severability — In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.

 

g.               Invalidity — If any term or provision contained herein is to any extent invalid or unenforceable, such term or provision shall be reformed so that it is valid, and such invalidity or unenforceability  shall not affect any other provision or part hereof.

 

h.              Amendment, Modification or Termination — The Administrator reserves the right to unilaterally amend, modify or terminate the Plan at any time as it deems necessary or advisable.

 

i.                  Applicable Law — Except to the extent superseded by the laws of the United States, the laws of the State of Idaho, without regard to its conflicts of laws principles, shall govern in all matters relating to the Plan.

 

j.                 Effect on Other Plans — Payments or benefits provided to a Participant under any stock, deferred compensation, savings, retirements or other employee benefit plan are governed solely by the terms of each of such plans.

 

k.              Effective Date — The Plan is effective as of January 1, 2013.

 

 

EXHIBIT A

 

BENEFICIARY DESIGNATION

 

I hereby designate the following person or persons as Beneficiary to receive any management incentive payments due under the attached US Ecology, Inc. 2013 Management Incentive Plan (Executive), effective January 1, 2013, in the event of my death, reserving the full right to revoke or modify this designation, or any modification thereof, at any time by a further written designation:

 

	
Primary Beneficiary
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name   of Individual
    	
 
    	
Relationship   to me
    	
 
    	
Birth   Date (if minor)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name   of Trust
    	
 
    	
Date   of Trust
    	
 
    	
 
    

 

Provided, however, that if such Primary Beneficiary shall not survive me by at least sixty (60) days, the following shall be the Beneficiary:

 

	
Contingent Beneficiary
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name   of Individual
    	
 
    	
Relationship   to me
    	
 
    	
Birth   Date (if minor)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name   of Trust
    	
 
    	
Date   of Trust
    	
 
    	
 
    

 

This Beneficiary Designation shall not affect any other beneficiary designation form that I may have on file with US Ecology, Inc. regarding benefits other than that referred to above.

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Signature

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00219-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00219-of-00352.parquet"}]]