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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 27, 2006
LAIDLAW INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 001-10657 98-0390488
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
55 Shuman Blvd. Suite 400, Naperville, Illinois 60563
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (630) 848-3000
Not Applicable
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Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Amendment of Named Executive Officers' Employment Agreements - On July 27, 2006,
the Human Resources and Compensation Committee of the Board of Directors of
Laidlaw International, Inc. ("Laidlaw") approved entering into amended and
restated employment agreements with Kevin E. Benson, Beth Byster Corvino,
Jeffrey W. Sanders, Jeffery A. McDougle, and Douglas A. Carty (the "NEOs"). The
amended and restated employment agreements were entered into on August 1, 2006,
and replace both the NEOs' previous Employment Agreements and the NEOs' previous
Change of Control Severance Agreements, which are no longer effective. In
addition, the amended and restated employment agreements are intended to bring
the NEOs' current agreements into compliance with Section 409A of the Internal
Revenue Code of 1986, as amended ("Section 409A"). The amended and restated
employment agreements are attached as Exhibits 99.1 through 99.5. Generally, the
amended and restated employment agreements combine into one agreement the terms
of the prior employment agreement and Change of Control Severance Agreement. The
amended and restated employment agreements generally do not modify the salary,
bonus, perquisites, change in control payments or other benefits that are
currently provided to the NEO. The following summarizes the other significant
changes contained in the amended and restated employment agreements compared to
the previous employment agreements and Change of Control Severance Agreements:
- Previously, only the Change of Control Severance Agreement provided
for the right of an NEO to terminate employment for "good reason" on
or within two years following a "change in control" and become
entitled to severance payments and benefits. The amended and
restated employment agreements modifies the definition of "good
reason", preserves this right and extends it to all periods of
employment, both prior to and following a "change in control" (as
defined in the amended and restated employment agreements).
- The prior employment agreements provided that in addition to
severance payments, an NEO was entitled to continue to participate
in the Company's medical and dental plans at the same cost as other
active employees for a period of generally 24 months. To the extent
that such arrangement may cause an excise tax on the NEO under Code
Section 409A, the amended and restated employment agreements provide
that the NEO will pay the entire cost of such continuation coverage
and the Company will pay to the NEO at the time of his or her
termination, an additional amount, which after the payment of income
and other employment taxes, provides the NEO with the estimated
amount of the cost of such continuation coverage. The amended and
restated employment agreements also provide that this continuation
period will count towards any required continuation period under
COBRA.
- The amended and restated employment agreements provide that if the
NEO is a "specified employee" as defined in Code Section 409A, then
(i) if such termination is without Cause (as defined in the
agreement), all amounts payable as severance will be paid in equal
monthly amounts over a period ending on the first day of the third
month following the later of the last day of the calendar year in
which such termination occurred, or the fiscal year of Laidlaw in
which the termination occurred, or (ii) if such
termination is by the NEO for "good reason" then, if necessary to
avoid adverse tax consequences, such payments will be made in
monthly installments following the expiration of six months from
such termination.
- If the NEO is subject to excise taxes under Section 409A, Laidlaw
will pay such taxes on a fully grossed-up basis.
- Mr. Carty is now President and Chief Executive Officer of Laidlaw
Transit, Inc. (replacing his former position as Executive Vice
President and Chief Financial Officer of Laidlaw International,
Inc.). Therefore, Mr. Carty's amended and restated employment
agreement is with Laidlaw Transit, Inc., instead of with Laidlaw,
and his "change in control" definition includes, in addition to the
definition of "change in control" contained in the other agreements
(i) the approval of the stockholders of Laidlaw of a complete
liquidation or dissolution of Laidlaw Transit, Inc., and (ii) the
consummation of a sale of substantially all of the assets or the
majority of the voting stock of Laidlaw Transit, Inc.
- Following termination, the NEO covenants to cooperate with Laidlaw
and is subject to noncompete, non-solicitation and confidentiality
covenants. The prior employment agreements only provided these
covenants on terminations that were unrelated to a "change in
control." In addition, the payment of severance is now tied to the
NEO's compliance with the terms of these covenants.
- If the NEO would be subject to excise taxes on excess parachute
payments as defined in Section 280G of the Internal Revenue Code,
then Laidlaw will gross-up the NEO for such taxes and all related
income taxes thereon; but only if the payments the NEO would receive
upon change in control exceeds 110% of the amount that would be an
excess parachute payment. If the amount of payments that the NEO
would receive upon a change in control is less than 110% of the
amount that would cause such payments to be excess parachute
payments, then the NEO's severance would be reduced by an amount
which is necessary to avoid the application of Section 280G.
Amendment of Other Compensation Plans - In addition, on July 27, 2006, the Human
Resources and Compensation Committee of the Board of Directors of Laidlaw also
amended the Laidlaw International, Inc. Non-Employee Director Compensation
Policy, the Laidlaw International, Inc. Short Term Incentive Plan, and the
Laidlaw Inc. U.S. Supplemental Executive Retirement Arrangement to comply with
the timing of deferral elections and distribution requirements of Section 409A.
Such amendments do not modify the amount of any benefits which are otherwise
payable under such plans. Copies of such amendments are attached as Exhibits
99.6, 99.7 and 99.8, respectively.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
Upon execution of the amended and restated employment agreements described in
Item 1.01 above, each NEO's Employment Agreement and Change in Control Severance
Agreement is terminated and is no longer effective.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LAIDLAW INTERNATIONAL, INC.
August 2, 2006 By: /s/ Jeffrey W. Sanders
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Name: Jeffrey W. Sanders
Title: Vice President and Chief Financial
Officer
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Exhibit Index
EXHIBIT NO. DESCRIPTION
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99.1 Amended and Restated Employment Agreement between Laidlaw
International, Inc. and Kevin E. Benson
99.2 Amended and Restated Employment Agreement between Laidlaw
International, Inc. and Beth Byster Corvino
99.3 Amended and Restated Employment Agreement between Laidlaw
International, Inc. and Jeffrey W. Sanders
99.4 Amended and Restated Employment Agreement between Laidlaw
International, Inc. and Jeffery A. McDougle
99.5 Amended and Restated Employment Agreement between Laidlaw
Transit, Inc. and Douglas A. Carty
99.6 First Amendment to the Laidlaw International, Inc.
Non-Employee Director Compensation Policy
99.7 First Amendment to the Laidlaw International, Inc. Short Term
Incentive Plan
99.8 First Amendment to the Laidlaw Inc. U.S. Supplemental
Executive Retirement Arrangement
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