ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

 

Pursuant to the Merger Agreement, effective as of the closing of the Merger on April 16, 2009, all of the members of World Waste's Board of Directors and all of World Waste's executive officers resigned and the officers and directors of Vertex Nevada continued as officers and directors of Vertex Nevada. John Pimentel, formerly an officer and director of World Waste, has become a non-executive officer and director of Vertex Nevada, and Matthew Lieb, formerly an officer of World Waste, has become an officer of Vertex Nevada. Mr. Pimentel’s employment as a non-executive officer of Vertex Nevada was subsequently terminated on June 22, 2009.  The officers and Directors of Vertex Nevada are as follows:

OFFICER AND DIRECTOR BIOS:

 

BENJAMIN P. COWART - DIRECTOR, CHIEF EXECUTIVE OFFICER AND PRESIDENT (Age 40): Mr. Cowart, the president of the General Partner for Vertex LP, has been involved in the petroleum recycling industry for over 20 years. Mr. Cowart is the founder of the Vertex group of companies and has served such companies since 2001. Mr. Cowart is the founder, Chief Executive Officer, President and Chairman of the Board of Vertex Nevada. As a leader in the recycling field, Mr. Cowart helped pioneer the reclamation industry by developing recycling options for many residual materials once managed as a hazardous waste. Mr. Cowart co-authored the industry's first e-commerce operating system for the digital management of petroleum waste and residual materials. Mr. Cowart was awarded the 2003 Business Man of the Year from The National Republican Congressional Committee, and serves on NORA's Board of Directors and President for 2008. Mr. Cowart has taken an active role in the petroleum industry with his involvement in speaking, consulting, chairing, and serving on various committees and industry associations. Prior to the formation of Vertex LP, Mr. Cowart served as the Vice President of Aaron Oil Company, a regional recycler in Alabama.

JOHN PIMENTEL - DIRECTOR (Age 43): Mr. Pimentel was appointed to the Board of Directors of Vertex Nevada in connection with the closing of the Merger, and is the Vertex Series A preferred stock appointee to the Board. Mr. Pimentel served as the Executive Vice President of Corporate Development of Vertex Nevada from the closing of the Merger until June 22, 2009. Mr. Pimentel served as the Chief Executive Officer of World Waste from the fourth quarter of 2005 and as a member of the World Waste board of directors since early 2004 until the effective date of the Merger.. Mr. Pimentel was one of the co-founders of Pacific Ethanol (NASDAQ: PEIX) where he served as a director from 2003 to 2005. He has also served on the boards of Particle Drilling (NASDAQ: PDRT) and Evolution Petroleum (Amex: EVO). Previously, he worked with Cagan McAfee Capital Partners, responsible for portfolio company management, strategy and investment structuring in industries including energy and technology Mr. Pimentel has also worked for Bain & Company in its Private Equity Group, as well as that firm's general consulting practice. Mr. Pimentel has extensive operating experience including service as Deputy Secretary for Transportation for the State of California where he oversaw a $4.5 billion budget and 28,000 employees. Mr. Pimentel has an MBA from Harvard Business School and a BA from the University of California, Berkeley.

DAN BORGEN - DIRECTOR (Age 48): Mr. Borgen was appointed a director of Vertex Nevada in June 2008. Mr. Borgen currently serves as Chairman, Chief Executive Officer and President of U.S. Development Group LLC (" USD "), where he has worked since May 1995. In his current role, Mr. Borgen guides all senior aspects of USD's corporate activities. USD is comprised of wholly owned subsidiaries that focus on industrial development, logistics, products terminaling, power corridors, financial services and gasification. In addition to his work with USD, Mr. Borgen has served as President of U.S. Right-of-Way Corporation since June 1993. Prior to this, Mr. Borgen worked for eleven years as an investment banker serving as Merger & Acquisition Director, Portfolio Manager and as a member of the Executive Committee for strategic planning and development. His activities were focused on manufacturing, food service, oil and gas exploration/production, telecommunications, banking and Western European finance. In his capacity as an investment banker, Mr. Borgen served as Vice President of The Oxford Group from July 1990 to June 1993, Vice President/Principal of The Paramount Companies from July 1985 to April 1990 and Manager - Investor Relations of Invoil Inc. from April 1982 to June 1985.

DAVID L. PHILLIPS - DIRECTOR (Age 52): Mr. Phillips was appointed a director of Vertex Nevada in June 2008. Mr. Phillips is currently the Managing Partner of Bilateral Initiatives LLP, an international business-to-business consulting firm specializing in providing key strategic expansion and corporate growth advice to the chairman and chief executive level members of various firms. Mr. Phillips is also Managing Partner of Phillips International Law Group PLLC, a worldwide recognized international law firm specializing in mergers, acquisitions, project development and EPC construction work with a focus on the international energy landscape in the oil, gas, chemical and power downstream sector and the alternative energy industry. Mr. Phillips' clients include worldwide energy companies, including several Middle East National Oil Companies. Prior to his founding of Bilateral Initiatives LLP and the Phillips International Law Group, Mr. Phillips was a Partner at the law firm of Jackson Walker LLP from May 2002 until May 2008 and chaired several of the firm's practice areas over that period. Prior to working at Jackson Walker LLP, from May 1995 to May 2002 Mr. Phillips served as a chief executive officer in the former KeySpan Energy Corporation, a $14 billion public energy conglomerate based in New York City, and as a member of the board of directors of certain KeySpan subsidiaries. From June 1991 to May 1995, Mr. Phillips served as a chief executive officer in Equitable Resources, Inc. a $6 billion public gas utility holding company based in Pittsburgh, Pennsylvania, and as a member of the board of directors of certain Equitable subsidiaries. Mr. Phillips also served as the General Counsel to Eastex Energy Inc., a public midstream energy company, from June 1985 to May 1991, which was later acquired by El Paso Energy and ultimately Enterprise Products LP.

In addition to his current roles at Bilateral Initiatives LLP and Phillips International Law Group PLLC, Mr. Phillips is the Chairman of the Board of Directors and is on the Executive Board of Advisors, Ambassadors, Ministers & Former US Cabinet Secretaries of the Bilateral US Arab Chamber of Commerce (BUSACC).

Mr. Phillips received his bachelor's degree from the University of Texas in August 1984 and his Juris Doctor from the South Texas College of Law in August 1988. Mr. Phillips is a member of State Bar of Texas, International Bar Association, American Bar Association, and the Houston Bar Association; he is also a member of the Oil, Gas & Energy Law Section, the Business Law Section, and the Corporate Counsel Section of the State Bar of Texas and Houston Bar Association. Additionally, he is a member of the Natural Resources, Energy and Environmental Law Section of the American Bar Association & International Bar Association.

INGRAM LEE - DIRECTOR AND TREASURER (Age 49): Mr. Lee has been a director and treasurer of Vertex Nevada since its inception in May 2008. Since May 1993, he has worked at PTI, Incorporated (" PTI ") where he currently serves as the President. In his current role with PTI, Mr. Lee is responsible for overseeing trading, purchasing, blending, training and sales of both residual and distillate petroleum products. Prior to joining PTI, Mr. Lee was a Trading Manager at Coastal Corporation (currently El Paso Corporation) from 1988 to 1993, responsible for the trading of over 20 million barrels per year of heavy oil and distillate products in and out of South America, Mexico and the Caribbean. From 1985 to 1988, Mr. Lee was an Operations/Blending Manager for Challenger Petroleum USA, Inc. Prior to this, he worked as a field manager for Torco Oil Company from 1982 to 1985 and a petroleum dispatcher and laboratory coordinator for E.W. Saybolt Petroleum Inspection Company from 1979 to 1982. Mr. Lee has been involved in aspects of the petroleum products trading industry for 28 years, from purchasing and sales to operations and transportation.

CHRIS CARLSON - SECRETARY (Age 36): Mr. Carlson has served as Secretary of Vertex Nevada since inception. Mr. Carlson brings a range of experience to his role as the Vice President for Vertex LP. Mr. Carlson oversees all risk management, investments, e-commerce applications, and day-to-day financial accounting of Vertex LP and its subsidiaries. Mr. Carlson worked for FuelQuest, Inc. before joining Vertex LP in 2001. There he worked as a Project Lead managing implementations of e-commerce services for new customers. In addition, he also planned and developed testing requirements for e-commerce applications. Mr. Carlson was with Pagenet, a wireless communications company prior to FuelQuest, Inc. where he worked as a Strategic Account Supervisor. Mr. Carlson earned his BS degree in Business Finance from the University of Houston.

MATTHEW LIEB - CHIEF OPERATING OFFICER (Age 37): Mr. Lieb has served as the Chief Operating Officer of Vertex Nevada since the closing of the Merger. Mr. Lieb previously served as World Waste's Chief Operating Officer from May 2007 until the effective date of the Merger. Since 1999, Mr. Lieb has served as Chairman of the Board and Chief Executive Officer of Kingsley Management LLC, a company he founded. From January 2007 to May 15, 2007, Mr. Lieb provided World Waste with consulting services at a fee of $3,500 per month plus an expense reimbursement. Mr. Lieb holds a BS in Finance from Georgetown University and an MBA from Harvard Business School.

Significant Employees:

Greg Wallace - Operations

Mr. Wallace provides Vertex Nevada with over 17 years of experience in the petroleum and chemicals trading industry. Mr. Wallace manages several departments for Vertex LP, including processing, used oil recovery technology, purchasing and selling of various petrochemical products, and transportation of lube oils and solvents. Prior to joining Vertex LP in 2005, Mr. Wallace was President of TRW Trading, a company that he co-founded in 2001. Mr. Wallace has served in various management roles ranging from marketing a variety of gasoline blendstocks, various solvents, waste recycling, hazardous/non-hazardous handling, and then later becoming qualified to perform oil spill prevention and response. Mr. Wallace began his petrochemical career with Valley Solvents & Chemicals, where he served as project General Manager responsible for sourcing used feedstocks and selling products into favorable markets.

 

John Strickland - Manager Of Supply

 

Mr. Strickland serves as the Manager of Supply of Vertex Nevada.  Mr. Strickland joined Vertex LP in late 2007 where he currently serves as the Manager of Supply. Mr. Strickland has over 21 years experience in management roles of developing companies in the recycling of used oils and the fuel blending business. In his various positions, he has developed used oil collection fleets, environment services (non-hazardous),  Terminal business of No. 6-oil from water ports and helped develop software for used oil collection fleets. Mr. Strickland was the General Manager of Texpar Energy inc. from 1999 to 2003 and Special Project Manager for Texpar Energy, L.L.C. from 2004 to 2007. From 1986 to 1999, he was the General Manager and Vice-President of Sellers Oil Inc., then one of the largest recycling and fuel marketers of used oil and No. 6-fuel oil in the southeast.

 

Related Party Transaction Committee

 

Vertex Nevada has formed a Related Party Transaction Committee (the “ Related Party Transaction Committee ”). The Related Party Transaction Committee is chaired by Mr. Phillips and includes Mr. Borgen. The Related Party Transaction Committee is required to include at least two “ independent directors ” (defined to mean any individual who does not beneficially own more than 5% of the outstanding voting shares of Vertex Nevada, is not employed by, or an officer of, Vertex Nevada or any entity related to Benjamin P. Cowart, is not a director or manager of any such company, is not a family member of Mr. Cowart, and would qualify as an “ Independent Director ” as defined in the rules and regulations of the New York Stock Exchange). This Related Party Transaction Committee is charged with the review and pre-approval of any and all related party transactions, including between Vertex Nevada and Vertex LP, Mr. Cowart, or any other company or individual which may be affiliated with Mr. Cowart.  The Related Party Transaction Committee will also periodically review Vertex Nevada’s related party transactions and verify that such transactions are at arms length and fair to Vertex Nevada and such affiliate entities.

 

Other Committees

 

Vertex Nevada has also appointed a Compensation Committee, chaired by Mr. Borgen and including Mr. Phillips, and an Audit Committee, chaired by Mr. Phillips and including Mr. Borgen.

 

Compensation of Officers and Directors

 

In consideration for agreeing to serve as a director of Vertex Nevada, on May 16, 2008 each of Messrs. Borgen, Lee and Phillips were issued an option to acquire up to 20,000 shares of Vertex Nevada’s common stock at an exercise price of $1.20 per share. The options expire if unexercised on the earlier of (a) the tenth anniversary of the grant date or (b) three months after the termination of the director’s service to Vertex Nevada. The options vest at the rate of 25% of the total options per year on each annual anniversary of the grant date, assuming that the director is continuing to provide services to Vertex Nevada on such date. The options also contain a cashless exercise provision.

In connection with the Merger, Vertex Nevada entered into an employment agreement with Benjamin P. Cowart pursuant to which Mr. Cowart will serve as its Chief Executive Officer for a term of five years at a base salary of $190,000, and a bonus payment (to be determined in the sole discretion of Vertex Nevada’s compensation committee), as described in greater detail above.

 

Vertex Nevada entered into an executive employment agreement with Mr. Pimentel pursuant to which, Mr. Pimentel served as Vertex Nevada’s Senior Vice President of Corporate Development, which employment agreement was terminated by the Company on June 22, 2009, and with Matthew Lieb (World Waste’s Chief Operating Officer), pursuant to which, Mr. Lieb serves as Vertex Nevada’s Chief Operating Officer, as described above.

Employment Agreements

 

Vertex Nevada entered into an employment agreement with Benjamin P. Cowart effective as of the closing date of the Merger, pursuant to which Mr. Cowart agreed to serve as Vertex Nevada’s Chief Executive Officer effective for a term of five years.

 

Mr. Cowart’s compensation package includes (1) a base salary of $190,000, subject to annual increases as determined in the sole discretion of the compensation committee of Vertex Nevada’s board of directors, and (2) a bonus payment determined in the sole discretion of the compensation committee. Mr. Cowart will also be eligible to participate in Vertex Nevada’s stock option plan and other benefit plans. Vertex Nevada may terminate Mr. Cowart’s employment for “ cause ” (which is defined to include, among other things, a material breach of the agreement by Mr. Cowart). Mr. Cowart may terminate his agreement upon delivery to Vertex Nevada of written notice of termination for any reason, including “ good reason, ” which is defined to include, among other things, a material breach of the agreement by Vertex Nevada, or a modification of Mr. Cowart’s duties such that they are inconsistent with the position and title of Chief Executive Officer.

 

Upon termination of the agreement on the five-year anniversary thereof, or for “ cause, ” Mr. Cowart will be entitled to any salary accrued through such termination date, as well as any other benefits to which he may be entitled under any stock plan or other benefit plan that Vertex Nevada maintains. If such agreement is terminated without “ cause ” or Mr. Cowart resigns for “ good reason, ” Mr. Cowart will be entitled to continue to receive his salary then in effect for a period of six months following the date of termination.

 

Pursuant to the agreement, as long as Mr. Cowart is employed thereunder and for a period of six months thereafter, he may not engage or participate in any business that is in competition in any manner whatsoever with Vertex Nevada’s business (as presently or hereafter conducted), subject to certain exceptions.

 

Although Mr. Cowart will be prohibited from competing with Vertex Nevada while he is employed with Vertex Nevada, he will only be prohibited from competing for six months after his employment with Vertex Nevada ends. Additionally, none of Mr. Cowart’s affiliated companies, including Vertex LP, will be prohibited from competing with Vertex Nevada following the closing of the merger. Accordingly, Mr. Cowart or these entities could be in a position to use industry experience gained while working with Vertex Nevada to compete with Vertex Nevada.

 

With an effective date of April 16, 2009, Vertex Nevada entered into employment agreements with John Pimentel and Matthew Lieb.  Pursuant to the terms of their employment agreements, Mr. Pimentel was to serve as the Executive Vice President of Corporate Development of Vertex Nevada and Mr. Lieb was to serve as the Chief Operating Officer of Vertex Nevada, for a term of two and four years, respectively, renewable for additional one year periods thereafter.  Pursuant to the employment agreements, so long as they are employed by Vertex Nevada and for 12 months following the termination of their employment, the executives are prohibited from competing with Vertex Nevada.  Pursuant to the employment agreements, Mr. Pimentel was to receive a salary of $156,000 per year, while Mr. Lieb was to receive a salary of $150,000 per year.

Mr. Pimentel’s employment and his employment agreement were terminated by Vertex Nevada effective June 22, 2009, provided that Mr. Pimentel continues to serve on the Board of Directors of Vertex Nevada.  As a result of the terms of Mr. Pimentel’s employment agreement, he is to receive three months of compensation from Vertex Nevada following his termination date.

 

If Mr. Lieb’s employment agreement is terminated without cause by the Company or for good reason by such executive, he is to receive severance pay equal to three months of his salary during the first 12 months of the term of the agreement and six months following the initial 12 month term.  If his employment is terminated for any other reason, he is to receive any compensation earned by him as of the termination date.

 

Mr. Pimentel and Mr. Lieb were also granted options in connection with the entry into their employment agreements.  Mr. Pimentel was granted an aggregate of 200,000 options, of which 100,000 vested immediately and 100,000 are to vest quarterly, at the rate of 12,500 per quarter over the eight fiscal quarters following the first fiscal quarter after the effective grant date of the options, subject to acceleration and forfeiture as provided in the option agreement.  Mr. Lieb was granted an aggregate of 200,000 options, of which 25,000 vested immediately and 175,000 are to vest quarterly, at the rate of 10,937 per quarter, over the sixteen fiscal quarters following the first fiscal quarter after the effective grant date of the options, subject to acceleration and forfeiture as provided in the option agreement.  The exercise price of the option grants was set by the Board of Directors, based on the closing bid price of Vertex Nevada’s common stock on May 9, 2009, at $0.50 per share, which includes the effects of the December 2008 1:10 reverse stock split of Vertex Nevada’s common stock, which has been retroactively reflected herein.

 

As a result of the termination of Mr. Pimentel’s employment, all of his options vested immediately and became subject to the termination provisions of such options as described above.

 

Other Employment Agreements

 

It is anticipated that Vertex Nevada will enter into employment agreements or similar compensation arrangements with Chris Carlson (Secretary), Greg Wallace (Operations) and John Strickland (Manager of Supply), the terms of which have not been finalized to date.