8-KMaterial AgreementsExhibits & Filings

WASTE MANAGEMENT INC 8-K Report, Material Agreement (Jun 22, 2005)

Filed June 22, 2005For Securities:WM

Summary

Waste Management, Inc. (WM) filed an 8-K on June 21, 2005, reporting a material definitive agreement concerning an employment arrangement. Specifically, the company entered into a two-year employment agreement with David A. Aardsma, Senior Vice President — Sales & Marketing, effective January 17, 2005. This filing is primarily focused on the terms and conditions of this executive employment contract. Key aspects of the agreement include a base salary of at least $300,000 annually, with a target bonus of 75% of base salary, variable between 0% and 150% based on performance. The agreement also outlines severance packages in the event of termination without cause, or for good reason in connection with a change in control, with potential payouts of two to three times base salary plus target bonus. Restrictive covenants, including non-compete and non-solicitation clauses, are also part of the agreement.

Key Highlights

  • 1Waste Management, Inc. entered into a formal employment agreement with Senior Vice President — Sales & Marketing, David A. Aardsma, effective January 17, 2005.
  • 2The agreement has an initial term of two years, with automatic one-year renewals thereafter.
  • 3Mr. Aardsma's base salary is set at a minimum of $300,000 per year.
  • 4He is eligible for an annual bonus with a target of 75% of his base salary, ranging from 0% to 150% based on performance goals.
  • 5The agreement details severance provisions, including 2x base salary + target bonus for termination without cause, and 3x for termination without cause/good reason during a change in control.
  • 6Severance includes continued health and welfare benefits for a specified period (2 or 3 years depending on termination type).
  • 7Restrictive covenants, such as non-compete and non-solicitation clauses, are included for a two-year period post-employment.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose a material definitive agreement, specifically the employment contract entered into with a key executive, David A. Aardsma, Senior Vice President — Sales & Marketing.

Mr. Aardsma will receive a minimum annual base salary of $300,000. He is also eligible for an annual bonus with a target of 75% of his base salary, which can range from 0% to 150% depending on performance.

If terminated without cause, Mr. Aardsma is generally entitled to a cash payment equal to two times his base salary and target bonus, plus continued health and welfare benefits for up to two years. In the event of termination without cause or for good reason in connection with a change in control, this increases to three times his base salary and target bonus, with three years of continued benefits.

Yes, the agreement includes restrictive covenants that prevent Mr. Aardsma from competing with the company or soliciting its customers or employees for a period of two years after his employment terminates. He also agrees not to disparage the company.