EXECUTION COPY
EMPLOYMENT AGREEMENT
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AGREEMENT by and between Safety-Kleen Corp., a Delaware corporation
(the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ (the "Executive"), dated as of the
8th day of August, 2001.
WHEREAS, the Company has determined that it is in the best interest of
the Company to employ the Executive as the Chairman of the Board, President and
Chief Executive Officer of the Company, and the Executive desires to serve the
Company in that capacity pursuant to the terms set forth herein; provided,
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however, that this Agreement shall be subject to the proper approval of the
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United States Bankruptcy Court (the "Bankruptcy Court") and such other
conditions and obligations of the parties as are set forth in Section 9(j)
hereof.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company shall employ the Executive, and
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the Executive shall serve the Company, on the terms and conditions set forth in
this Agreement, during the Employment Period (as defined below). The
"Employment Period" shall mean the period beginning on the Effective Date and
ending on February 8, 2003, unless such employment is earlier terminated for any
reason as provided herein.
2. Position and Duties. During the Employment Period, the
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Executive shall serve as Chairman of the Board, President and Chief Executive
Officer of the Company and, as may be agreed to by Executive from time to time,
in appropriate positions in each subsidiary of the Company, with the duties,
functions, responsibilities and authority customarily associated with such
positions (but shall not be required to exercise control over the waste handling
practices of the Company except in his role as Chairman, President and Chief
Executive Officer), and shall report to the Board of Directors of the Company
(the "Board"). During the Employment Period, the Executive shall be appointed,
elected and/or otherwise maintained by the Company as the Chairman of the Board,
President and Chief Executive Officer of the Company. The Executive shall not,
during the term of this Agreement, engage in any other business activities that
will unreasonably interfere with the Executive's employment pursuant to this
Agreement; provided however, the Company acknowledges and agrees that Executive
is and may continue to (i) serve as the plan administrator of AFD Fund, the
post-confirmation estate of AmeriServe Food Distribution, Inc. and its
affiliated debtors, (ii) serve as a director for ▇▇▇▇▇▇▇▇▇ School and the
Wyoming Seminary, and (iii) manage personal and family investments. Further,
Executive may, (i) subject to prior approval of the Board (which approval shall
not be unreasonably withheld), serve as a director of other noncompeting
companies, and (ii) serve as an officer, director or otherwise participate in
educational, welfare, social, religious and civic organizations. During the
Employment Period, the Executive's services shall be performed at those
locations where the Company conducts business throughout the United States as
the needs and exigencies of the business of the Company from time to time
reasonably require; provided however, Executive shall not be required to
relocate his personal residence from the Dallas, Texas area.
3. Compensation. (a) Salary. From the date of this Agreement
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through the end of the Employment Period, the Executive shall receive a monthly
salary (the "Salary") of $125,000, payable in accordance with the Company's
normal payroll practices for executives.
(b) Other Benefits. In addition to the foregoing, during the
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Employment Period: (i) the Executive shall be entitled to participate in the
current and any future savings, retirement, fringe benefit, and any other
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benefit plans, practices, policies and programs of the Company on terms and
conditions commensurate with those afforded to the previous Chairman and CEO of
the Company, but in no event less than those applicable to peer executives;
provided, however, the Executive shall not be entitled to participate in any
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general bonus or severance plans, practices, policies or programs of the Company
(and provided further that nothing herein will prevent the Board from approving
discretionary bonus plans for the Executive); (ii) the Executive shall be
entitled to four weeks of vacation, effective and vested as of the Effective
Date, and two weeks of additional vacation effective and vested as of the first
anniversary of the Effective Date, and (iii) the Executive and, pursuant to
the terms of the applicable plan, practice, policy or program, eligible family
members, as the case may be, shall, effective as of the Effective Date, be
eligible for participation in, and shall receive all benefits under medical,
dental, disability, life insurance and other welfare benefit plans, practices,
policies and programs provided by the Company, on terms and conditions
commensurate with those afforded to the previous Chairman and CEO of the
Company, but in no event less than those applicable to peer executives, plus tax
"gross up" on the amount of premiums paid and included in the Executive's gross
income in connection therewith, if any (provided, however, for purposes of
determining (i) disability benefits provided to the Executive under any
long-term disability plan of the Company and (ii) life insurance benefits
provided to Executive under any life insurance program of the Company, (and for
such purposes only) the Executive's annual salary from the Company shall be
deemed to be $750,000.). In addition, the Company shall pay the reasonable fees
and expenses of Executive's counsel and other professionals incurred in
connection with the negotiation of, entering into and otherwise in connection
with this Agreement, and the Exhibits attached hereto, in an amount not to
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exceed $75,000, plus tax "gross up" thereon if any taxes based on income are
applicable. Further, the Company will promptly reimburse Executive for all
travel and other business expenses that Executive incurs in the course of the
performance of his duties under this Agreement, including any commuting expenses
to/from and living expenses in Columbia, SC. plus tax "gross up" thereon if any
taxes based on income are applicable, in a manner commensurate with Executive's
position and level of responsibility with the Company, but in no event less than
those applicable to peer executives.
(c) For purposes of this Section 3, the Executive's peer
executives shall be other senior executives employed by the Company.
4. Termination of Employment. (a) Death or Disability. In the
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event of the Executive's death during the Employment Period, the Executive's
employment with the Company shall terminate automatically. The Company shall
have the right to terminate the Executive's employment because of the
Executive's Disability during the Employment Period. "Disability" means that
(i) the Executive has been unable, for a period of 90 consecutive days, or for
periods aggregating 90 business days in any period of twelve months, to perform
the Executive's duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by the Company or its insurers
and reasonably acceptable to Executive has determined that the Executive's
incapacity is total and permanent as defined in the Company's Long Term
Disability Benefit Plan. A termination of the Executive's employment by the
Company for Disability shall be communicated to the Executive by written notice,
and shall be effective on the 5th day after receipt of such notice by the
Executive (the "Disability Effective Date"), unless the Executive returns to
full-time performance of the Executive's duties before the Disability Effective
Date.
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(b) By the Company. In addition to termination for Disability,
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the Company may terminate the Executive's employment during the Employment
Period for Cause or without Cause. For purposes of this Agreement, "Cause"
means that, prior to any termination, the Executive shall have:
(i) been convicted of or pled no contest to a felony crime
involving fraud, embezzlement or theft or other felony crime resulting
in imprisonment (excluding, without limitation, in any case any of the
foregoing related to Limited Vicarious Liability, as defined below);
(ii) committed intentional, wrongful and material damage to
property of the Company, and any such act shall have been materially
harmful to the Company; or
(iii) committed intentional wrongful disclosure of secret
processes or confidential information of the Company and any such act
shall have been materially harmful to the Company.
For purposes of this Agreement, no act or failure to act on the part of the
Executive shall be deemed "intentional" if it was due primarily to an error in
judgment or negligence, but shall be deemed "intentional" only if done or
omitted to be done by the Executive not in good faith and without reasonable
belief that his action or omission was in the interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for "Cause" hereunder unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three quarters of the Board then in office at
a meeting of the Board called and held for such purpose, after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel (if the Executive chooses to have counsel present at such
meeting), to be heard before the Board, finding that, in the good faith opinion
of the Board, the Executive had committed an act constituting "Cause" as herein
defined and specifying the particulars thereof in detail. Nothing herein will
limit the right of the Executive or his beneficiaries to contest the validity or
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propriety of any such termination with the Bankruptcy Court or otherwise. For
purposes of this Agreement, Limited Vicarious Liability, as used above, shall
mean any liability which is based on acts of the Company for which Executive is
charged solely as a result of his offices with the Company.
(c) Voluntarily by the Executive. The Executive may terminate his
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employment at any time during the Employment Period by giving not less than 60
days prior written notice thereof to the Company; provided, however, that
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Executive may terminate his employment immediately and without notice upon
either: (i) the occurrence of any of the events listed in Section 5(a)(i),
(ii), (iii), or (v) of this Agreement , or (ii) the occurrence of an event
constituting Good Reason (as defined below) .
(d) Date of Termination. The "Date of Termination" means the date
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of the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause as set forth in notice from the Company is effective, or the date on which
the termination of the Executive's employment by Executive as set forth in any
notice from Executive is effective, as the case may be.
(e) Involuntary Termination. (i) An "Involuntary Termination"
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means: (A) a termination of the Executive's employment by the Company, other
than for Cause, death or Disability; and/or (B) a termination by the Executive
after the occurrence of an event constituting Good Reason (as that term is
defined below).
(ii) "Good Reason" means:
(A) Failure to elect or reelect or otherwise to maintain the
Executive in the office and the position with the Company (or any
successor entity by operation of law or otherwise) set forth in
Section 2 of this Agreement, as the case may be, or the removal of the
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Executive as a Director on or Chairman of the Board of the Company (or
any successor thereto);
(B) (I) A material adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or duties attached to
the Executive's position with the Company and any affiliated company;
(II) a reduction in the Executive's Salary; or (III) the termination
or denial of the Executive's rights to employee benefits or a material
reduction in the scope or value thereof, any of which is not remedied
by the Company within 10 business days after receipt by the Company of
written notice from the Executive of such change, reduction or
termination, as the case may be;
(C) The Company, without the prior written consent of the
Executive, requires the Executive to have his principal residence
changed, to any location outside of the Dallas, Texas area;
(D) The Company shall fail to timely pay or satisfy any of its
material obligations or liabilities for which the Executive could,
based on the advice of counsel, reasonably be found to be personally
liable, provided such failure, if curable without liability to
Executive, is not remedied by the Company within 10 business days
after receipt by the Company of written notice from the Executive of
such failure;
(E) The Company shall fail to comply or be capable of continuing
to comply in all material respects with any applicable laws, including
any environmental laws and regulations, or the Executive shall be
required to exercise control over the waste handling practices of the
Company, for which the Executive could in either case, based on the
advice of counsel, reasonably be found to be personally liable,
provided such failure, if curable without liability to Executive, is
not remedied by the Company within 10 business days after receipt by
the Company of written notice from the Executive thereof;
(F) The Company shall fail to maintain satisfactory liability
insurance as required under Section 7(a) hereof, provided such
failure, if curable, is not remedied by the Company within 10 business
days after receipt by the Company of written notice from the Executive
of such failure; or
(G) Without limiting the generality or effect of the foregoing,
any material breach of this Agreement by the Company or any successor
thereto which, if curable, is not remedied by the Company within 10
business days after receipt by the Company of written notice from the
Executive of such breach.
Any item in (B), (D), (E), (F), or (G) above that is not curable or
not curable without liability to Executive, will immediately
constitute Good Reason.
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5. Completion Fee; Obligations of the Company on Termination. (a)
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Upon the first to occur of the following events during the Employment Period,
the Company shall pay to the Executive, and the Executive shall be entitled to
receive, a cash amount equal to $1,750,000 (the "Completion Fee"): (i) the
Company's plan of reorganization under Chapter 11 of the Bankruptcy Code is made
effective, (ii) the Company's liquidation under Chapter 11 of the Bankruptcy
Code is substantially completed, (iii) there is a conversion of the Company's
proceedings under Chapter 11 of the Bankruptcy Code to a proceeding under
Chapter 7 of the Bankruptcy Code, (iv) there is an Involuntary Termination of
the Executive's employment, or (v) all or substantially all of the Company's,
including any debtor affiliate's, assets are sold or disposed of in one or more
transactions, or any other sale, merger, consolidation, disposition or similar
transaction involving the Company and any debtor affiliate. In addition, if any
of the events listed in Section 5(a)(i), (ii), (iii), or (v) does not occur
prior to the completion of the Employment Period and the Executive's employment
was not terminated for Cause, death or Disability, upon the first to occur of
the items in Section 5(a)(i), (ii), (iii), or (v) at any time after the
completion of the Employment Period, the Company shall pay to the Executive, and
the Executive shall be entitled to receive, a cash amount equal to the
Completion Fee. In any case, the Company expressly acknowledges and agrees that
payment of the Completion Fee shall be made, in the Executive's sole discretion,
by the Executive drawing upon the Completion Letter of Credit following the
occurrence of the first event entitling the Executive to payment of such fee.
(b) Death; Disability. If the Executive's employment is
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terminated by reason of the Executive's death during the Employment Period, or
by reason of the Executive's Disability during the Employment Period in
accordance with Section 4(a) hereof, the Company shall pay to the Executive, the
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Executive's estate or the Executive's legal representative, as applicable,
within 10 days after the Date of Termination, a lump-sum cash amount equal to
the sum any portion of the Salary and any other compensation earned for the
period up to the Date of Termination that has not yet been paid, plus the cash
equivalent of any accrued but unused vacation.
(c) Cause; Voluntary Termination. If the Executive's employment
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is terminated for Cause or the Executive terminates his employment during the
Employment Period other than in an Involuntary Termination, the Company shall
pay the Executive, within 10 days after the Date of Termination, a lump-sum cash
amount equal to the sum of any portion of the Salary and any other compensation
earned for the period up to the Date of Termination that has not yet been paid,
plus the cash equivalent of any accrued but unused vacation.
(d) Involuntary Termination. If the Executive's employment is
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terminated by an Involuntary Termination, the Company shall pay the Executive,
within 10 days after the Date of Termination, a lump-sum cash amount equal to
the sum of: (i) any portion of the Salary and any other compensation earned for
the period up to the Date of Termination that has not yet been paid, (ii) the
cash equivalent of any accrued but unused vacation, (iii) the Salary that
Executive would have earned pursuant to this Agreement from the Date of
Termination until February 8, 2003, if such Involuntary Termination had not
occurred, and (iv) the Completion Fee. In addition, the welfare benefits set
forth in Section 3(b) of this Agreement will continue, at no additional expense
to Executive other than any expense Executive would have normally been required
to pay therefor if his employment had continued, until February 8, 2003.
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(e) In addition to the payments and benefits to which the
Executive or the Executive's estate may be entitled under Sections 5(a) through
(d) above, the Executive shall be entitled to receive any vested or other
benefits to which he may be entitled pursuant to the terms and conditions of any
employee benefit plan of the Company in which he may participate, and any other
amounts due under this Agreement.
6. Confidential Information. The Executive shall keep
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confidential all secret or confidential information, knowledge or data relating
to the Company or any of its affiliated companies and their respective
businesses that the Executive obtains or obtained during the Executive's
employment by the Company or any of its affiliated companies and their
respective businesses and that is not public knowledge (other than as a result
of the Executive's violation of this paragraph (a) of Section 6) ("Confidential
Information"). The Executive shall not intentionally communicate, divulge or
disseminate Confidential Information at any time during or after the Executive's
employment with the Company, except with the prior written consent of the
Company, or if he believes it is in the best interests of the Company, or as
otherwise as required by law or legal process.
7. Indemnification; Letter of Credit. (a) The Executive shall be
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entitled to indemnification to the fullest extent provided to other officers and
directors of the Company in accordance with the Certificate of Incorporation,
Articles and By-Laws of the Company, but in no event less than the maximum
extent permitted under Delaware law, and shall be covered by the Company's
current directors and officers' liability insurance (which shall at all times be
maintained by the Company throughout the Employment Period and for a 6 year
"tail" coverage period_thereafter and provide coverage of not less than $125
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million per occurrence and name Executive as an insured thereunder) and other
appropriate insurance maintained by the Company. The Company shall, on the date
of this Agreement, duly execute the Company Indemnification Agreement attached
hereto as Exhibit "A" ("Company Indemnification Agreement").
(b) The Executive shall not be personally liable to the Company,
its affiliates, or any of their respective creditors or stockholders for
monetary damages, except only to the extent that such damages are finally
adjudged by a court of competent jurisdiction, after exhaustion of all appeals
therefrom, to have been caused by ▇▇. ▇▇▇▇▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ negligence or willful
misconduct (and any actions, omissions or other matters taken with Court
approval will conclusively be deemed not to constitute negligence, gross
negligence or willful misconduct).
(c) As soon as practicable following the date hereof, but in no
event later than August 21, 2001, the Company shall obtain and shall keep in
full force and effect throughout the Employment Period and until all obligations
to pay the Completion Fee pursuant to Section 5 under this Agreement have been
satisfied in full, a clean irrevocable standby letter of credit (the "Completion
Letter of Credit") from a money-center banking institution, in the amount of
$1,750,000, for the benefit of and in form and substance reasonably satisfactory
to the Executive (including prior notification to the Executive of the failure
to renew the letter of credit and the right of Executive to draw upon the letter
of credit in the event of such failure), which he will, in his sole discretion,
draw upon to satisfy the Company's obligations to pay the Completion Fee or
which he may draw upon to satisfy the Company's obligations to pay any amounts
due Executive under this Agreement or otherwise. The Company shall remain liable
for any obligations under this Agreement to the extent such letter of credit is
insufficient to satisfy the obligations hereunder.
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(d) As soon as practicable following the date hereof, but in no
event later than August 21, 2001, the Company shall obtain and shall keep in
full force and effect until 18 months after the Executive's employment with the
Company has terminated, a clean irrevocable standby letter of credit from a
money-center banking institution, in the amount of $750,000, for the benefit of
and in form and substance reasonably satisfactory to the Executive (including
prior notification to the Executive of the failure to renew the letter of credit
and the right of Executive to draw upon the letter of credit in the event of
such failure), which he may draw upon at any time to satisfy any obligations of
the Company for which, based upon the advice of his counsel, the Executive could
reasonably be anticipated to be found personally liable or for which the
Executive is entitled to indemnification from the Company as provided in the
Company Indemnification Agreement, including the defense of any claims relating
to such matters, any deductible(s) and/or self insured retention(s) under any
insurance policies, any premiums for "tail" or other insurance coverage, and to
satisfy any obligations of the Company under this Agreement. The Company shall
remain liable for any such obligations under this Agreement and the Company
Indemnification Agreement to the extent such letter of credit is insufficient to
satisfy the obligations hereunder or thereunder.
8. Successors. (a) This Agreement is personal to the Executive
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and, without the prior written consent of the Company, shall not be assignable
by the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
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(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns. The Company's obligations
pursuant to this Agreement will survive any termination or expiration of this
Agreement.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. Except as set forth in this Section 8(c), the
Company shall not assign this Agreement without the prior written consent of the
Executive, which consent shall not be unreasonably withheld. As used in this
Agreement, "Company" shall mean both the Company as defined above and any such
successor that assumes and agrees to perform this Agreement, by operation of law
or otherwise.
9. Miscellaneous. (a) This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of Delaware without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
To the extent this Agreement shall be amended after the Effective Date, approval
of the Bankruptcy Court shall not be required to the extent such amendment is
not materially adverse to the Company.
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(b) All notices and other communications under this Agreement
shall be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
[Address on file with the Company]
With a copy to:
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▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇▇
If to the Company:
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Safety-Kleen Corp.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
With a copy to:
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Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 9. Notices and communications
shall be effective when actually received by the addressee.
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(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(d) Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws or
regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(f) The Company shall promptly reimburse the Executive for the
reasonable legal fees and expenses incurred by the Executive in connection with
enforcing any right of the Executive pursuant to and afforded by this Agreement;
provided, however, that the Company's obligations for such legal fees and
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expenses shall only apply if, in connection with enforcing any right of the
Executive pursuant to and afforded by this Agreement, (i) a judgment has been
rendered in favor of the Executive by a duly authorized court of law, (ii) an
arbitration award in favor of the Executive has been made or (iii) the Company
and the Executive have entered into a settlement agreement providing for the
payment to the Executive of any or all amounts or benefits alleged by the
Executive to be due hereunder. The Company will also promptly reimburse, or pay
directly if requested by Executive, for the reasonable legal fees incurred by
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Executive to obtain personal legal advice from time-to-time regarding
Executive's duties, responsibilities and liabilities with respect to the
Company.
(g) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement, whether written or oral, between them concerning
the subject matter hereof. Exhibit "A" attached hereto will control over the
terms herein to the extent, and only to the extent, of any conflict with the
terms herein.
(h) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
(i) The Executive and the Company will consult with each other and
jointly approve any press release or other public statement regarding the
Executive's appointment and position with the Company. Any such press release
or other public statement shall indicate that the Executive's position with the
Company is subject to Bankruptcy Court approval and other conditions of this
Agreement.
(j) Unless expressly waived by the Executive, this Agreement shall
become effective (the "Effective Date") on the date that each of the following
conditions have been satisfied:
(1) The execution of the Company Indemnification Agreement, the terms
of which are incorporated herein by reference and made a part
hereof as though fully set forth herein.
(2) The approval by the Bankruptcy Court of the terms of this
Agreement, with such approval order containing those provisions
set forth on Exhibit "B" attached hereto, and containing such
other provisions as the Executive may reasonably request limiting
his personal liability for the obligations of the Company.
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(3) Such amendments or clarifications to the Company's directors and
officers' liability insurance policies (the "D&O Policy") as may
reasonably be necessary to assure the Executive of coverage under
the terms of the present D&O Policy, including, without
limitation, to provide for the purchase by the Executive, if
necessary, of "tail" coverage under the D&O Policy in the event
of nonpayment of premiums.
(4) The Company's obligations under Sections 7 (c) and (d) of this
Agreement have been satisfied.
Upon final execution of this Agreement by the parties hereto, the Company shall
promptly take all commercially reasonable efforts to obtain approval of the
terms of this Agreement and the actions contemplated herein, including the
solicitation of the Company's critical customers, lenders and trade creditors in
supporting the approval of this Agreement by the Bankruptcy Court. Until such
time as all of the foregoing conditions have been satisfied, the Executive's
employment status and position with the Company shall be that of a common-law
employee, and under no circumstances shall the Executive have the status of an
officer of the Company.
(k) In the event that any of the conditions in Section 9(j) shall
not have been satisfied by August 21, 2001, this Agreement shall be void and of
no force; provided, however, (i) the Executive shall be reimbursed by the
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Company for any reasonable expenses incurred prior to such date in connection
with the matters contemplated by this Agreement, including, without limitation,
reasonable attorney fees and expenses pursuant to Section 3(b) of this
Agreement, (ii) the Executive shall be paid a per diem amount of $5,000 per day
in respect of Executive's services commencing from the date of this Agreement
and continuing until the earlier of the date that Bankruptcy Court approval is
denied or August 21, 2001, and (iii) the terms of the Company Indemnification
Agreement shall, from the date of this Agreement, the effective date of such
Indemnification Agreement, remain in full force and effect.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Executive
SAFETY-KLEEN CORP.;
subject to the approval of the Bankruptcy Court as
further provided in Section 9(j), except for purposes
of Section 9(k)
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By:
Title:
18
EXHIBIT "A"
COMPANY INDEMNIFICATION AGREEMENT
THIS COMPANY INDEMNIFICATION AGREEMENT (this "Agreement") is being executed
and delivered to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ("Indemnitee") by SAFETY-KLEEN CORP., a
Delaware corporation ("Safety-Kleen"), effective as of August 8, 2001.
Safety-Kleen has requested Indemnitee to serve as an employee, a director
and the Chairman of the Board, President and Chief Executive Officer of
Safety-Kleen and, as may be agreed to by Executive from time to time, in
appropriate positions with each of Safety-Kleen's subsidiaries (such
subsidiaries and affiliates together with Safety-Kleen being collectively
referred to herein as the "Company"), pursuant to that certain Employment
Agreement between Safety-Kleen and Indemnitee, dated as of August 8, 2001 (the
"Employment Agreement"), and in consideration of, and as a material inducement
for, such service, the Company is hereby agreeing to bind itself to indemnify
Indemnitee personally under the conditions set forth below.
1. OBLIGATION TO INDEMNIFY. Company hereby agrees to indemnify
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Indemnitee for, and release, defend and hold Indemnitee harmless from and
against any and all claims, losses, costs, liabilities and other damages of
whatever nature, kind or character, including but not limited to, liabilities
that would not have been incurred had Indemnitee not entered into the Employment
Agreement, or served as an employee, officer and/or director of the Company,
judgements, demands, assessments, interest, liabilities under the Employee
Retirement Income Security Act of 1974, as amended (including excise taxes or
penalties, plan termination, withdrawal and funding liabilities), the value of
time of Indemnitee at the rate of $5,000 a day (or portion thereof),
environmental liabilities, any obligations of the Company for which Indemnitee
is, or is asserted to be, personally liable therefor, liabilities for the
Company's employment taxes and any and all other taxes, penalties, excise and
similar taxes, impositions, fines, settlements, and reasonable expenses,
including, without limitation, attorney fees and Proceedings (as defined below)
in any way related to or arising out of (a) Indemnitee being (and/or having
been) an employee, officer and/or director of the Company or a trustee or a
fiduciary to any benefit plan, including without limitation, any act, omission
or other matter in any way connected therewith, and/or (b) Indemnitee serving
(and/or having served) the Company in any other capacity contemplated by the
Employment Agreement, including, without limitation, any act, omission or other
matter in any way connected therewith (collectively, the "Damages"). Company
acknowledges and agrees that the foregoing terms of this section and the terms
of the other sections of this Agreement are intended to apply REGARDLESS OF THE
TIMING, GROUNDS OR NATURE OF ANY PROCEEDINGS OR DAMAGES, INCLUDING, WITHOUT
LIMITATION, DAMAGES BASED ON INDEMNITEE'S NEGLIGENCE, CONTRACT, STATUTE,
INTENTIONAL TORT, STRICT LIABILITY OR OTHERWISE, AND WHETHER OR NOT INDEMNITEE
WAS ADVISED OR AWARE OF THE POSSIBILITY OF SUCH DAMAGES, except only to the
extent that the Damages are finally adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to have been caused by
the gross negligence or willful misconduct of Indemnitee (and any actions taken
with the approval of the Bankruptcy Court will conclusively be deemed not to
constitute gross negligence or willful misconduct). The obligations of Company
hereunder shall be applicable to all Proceedings (as defined below) and Damages
as set forth in this Agreement regardless of when Proceedings or Damages
occurred or accrued or such Proceedings are commenced or threatened, or whether
actions or omissions or other events on which they are based, allegedly took
place or failed to occur, before or after the effective date of this Agreement
or the commencement or termination of Indemnitee's service as an employee,
officer, director or in any other capacity for the Company as contemplated in
the Employment Agreement.
2. WITNESS AND OTHER EXPENSES. Company shall be obligated to pay or
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promptly reimburse Indemnitee for reasonable expenses, including, but not
limited to, attorneys' fees and other professional expenses, incurred by him, in
connection with his appearance as a witness or other participation, in any
threatened, pending or completed action, suit, or proceeding, whether civil,
criminal, administrative, arbitrative, or investigative, formal or informal, and
whether or not based on local, state, federal or foreign laws, rules or
regulations, any appeal of such a threatened, pending or completed action, suit
or proceeding, or any inquiry or investigation which could lead to such a
threatened, pending or completed petition, suit, or proceeding (any of the
foregoing being referred to herein as a "Proceeding") because he is or was an
employee, officer and/or director of the Company or because he serves or has
served the Company in any other capacity contemplated by the Employment
Agreement, including, without limitation, any act, omission or other matter in
any way connected therewith.
3. ADVANCEMENT OF EXPENSES. Reasonable expenses, including, but not
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limited to, attorney's fees, incurred by Indemnitee in connection with a
Proceeding in which he is, or is threatened to be, named as a defendant or
respondent shall be paid by Indemnitor, or promptly reimbursed, in advance of a
final disposition of the Proceeding, if Indemnitee affirms in writing to
Indemnitor that, in good faith, Indemnitee believes he is entitled to
indemnification under this Agreement and undertakes in writing to repay such
amounts if it is ultimately determined that Indemnitee is not so entitled.
4. ATTORNEY'S FEES. It is the intent of the Company that Indemnitee not
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be required to incur legal fees and the related expenses associated with the
interpretation, enforcement or defense of Indemnitee's rights under this
Agreement by litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to Indemnitee
hereunder. Consequently, if it should appear in good faith to Indemnitee that
the Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes or
threatens to take any action to declare this Agreement void or unenforceable, or
institutes any litigation or other action or proceeding designed to deny, or to
recover from Indemnitee the benefits provided or intended to be provided to
Indemnitee hereunder, Company irrevocably authorizes Indemnitee from time to
time to retain counsel of Indemnitee's choice, at the expense of Company, to
advise and represent Indemnitee in connection with any such interpretation,
enforcement or defense, including, without limitation, the initiation or defense
of any litigation or other legal action, whether by or against the Company or
any Director, officer, stockholder, beneficiary or other person affiliated with
the Company, or any other person in any jurisdiction. Without respect to
whether Indemnitee prevails, in whole or in part, in connection with any of the
foregoing, Company will pay and be solely financially responsible for any and
all reasonable attorneys' and related fees and expenses incurred by Indemnitee
in connection with any of the foregoing; provided that a court of competent
jurisdiction has not finally adjudged, after exhaustion of all appeals
therefrom, that in regards to such matters Indemnitee has been grossly negligent
or guilty of intentional misconduct, and such gross negligence or intentional
misconduct caused such matters.
5. CUMULATIVE RIGHT. Nothing herein shall be deemed to diminish or
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otherwise restrict the right of Indemnitee to indemnification under any
provision of the Certificate of Incorporation or By-laws of the Company or under
Delaware law, or from any other person, entity or otherwise. To the extent that
Indemnitee is, or may be, entitled to indemnification from the Company and any
other persons or entities for the same matters as are covered by this Agreement,
Indemnitee shall be under no obligation to seek indemnification from such other
persons or entities for any obligations of Company hereunder.
6. COVENANT NOT TO ▇▇▇. Company hereby covenants and agrees that it
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shall not institute, reinstitute, maintain, or prosecute any action, claim,
suit, proceeding, or cause of action of any kind whatsoever, in any court,
administrative agency, or other forum, against Indemnitee that arises out of, or
relates in any way to, the matters for which Indemnitee is entitled to
indemnification as contemplated by this Agreement, including but not limited to
any action, claim, suit, proceeding, or cause of action for contribution or
indemnity.
7. GOVERNING LAW. This Agreement shall be governed by and construed in
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accordance with Delaware law.
8. OTHER PARTIES. This Agreement shall be binding upon Indemnitee and
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the Company and shall inure to the benefit of and be binding on their successors
and assigns, heirs, personal representatives and their estates. The Company
shall not assign this Agreement without the prior written consent of Indemnitee,
which consent shall not be unreasonably withheld.
9. CONSIDERATION. This Agreement is being delivered to Indemnitee in
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consideration of Indemnitee's services as an employee, officer and/or director
of the Company. Indemnitee need not execute this Agreement for it to constitute
a binding obligation of the Company, nor shall the death, resignation or removal
from office or employment of Indemnitee after the termination of such service,
or the termination, expiration or failure of the Employment Agreement to become
effective, limit or terminate the obligations of the Company hereunder. The
obligations of the Company hereunder shall be applicable to all Proceedings in
which Indemnitee is named, or threatened to be named, as a defendant or
respondent or with respect to which Indemnitee is a witness or other
participant, regardless of when such actions are commenced or threatened, or
whether actions or omissions or other events on which they are based, allegedly
took place or failed to occur, before or after the effective date of this
Agreement or the commencement or termination of Indemnitee's service as an
employee, officer, director or in any other official capacity for the Company.
10. SEVERABILITY. If any provision of this Agreement shall be held to
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be invalid or unenforceable for any reason, such invalidity or unenforceability
shall not affect the validity or enforceability of the other provisions hereof,
and such provision shall be deemed to be amended or modified to the least extent
necessary to render it valid and enforceable.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement
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among the parties hereto with respect to the subject matter herein. No
representations, inducements, promises, or agreements, oral or otherwise with
respect to the subject matter herein, which are not embodied in this Agreement
shall be of any force or effect. No amendment, modification, termination, or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
IN WITNESS WHEREOF, pursuant to the authorization of its Board of
Directors, Safety-Kleen Corp., on behalf of itself, its subsidiaries and
affiliates, has caused this Agreement to be duly executed, all as of the day and
year first above written.
SAFETY-KLEEN CORP.
By:
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Title:
EXHIBIT "B"
ORDER PROVISIONS
1. The Motion (which must be mutually agreeable) is granted.
2. The Debtors are authorized and directed to enter into and perform
under the Employment Agreement and the Indemnification Agreement.
3. The Court hereby approves the Employment Agreement and the
Indemnification Agreement.
4. Executive will have no liability in his capacity as Chairman,
President and Chief Executive Officer or in any other capacity contemplated by
the Employment Agreement to any of the Debtors, the Debtors' respective
affiliates, and/or any of their respective creditors, shareholders, employees,
officers and/or bankruptcy estates, and/or to any superseding trustee appointed
with respect to any such estates (whether under Chapter 11 or Chapter 7), and/or
any other person or entity for any claim, loss, cost or other damage of any
nature, except only to the extent that such liability, claim, loss, cost or
other damage is finally adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to have been caused by Executive's gross
negligence or willful misconduct (and any actions, omission or other matter
taken with Court approval will conclusively be deemed not to constitute
negligence, gross negligence or willful misconduct).
5. The Court hereby authorizes the Debtors, pursuant to sections
364(c)(1) and (c)(2) of Title 11 of the United States Code, to (i) obtain one or
more letters of credit in an aggregate amount up to $2,500,000 from Chase Bank
of Texas, N.A. (or any other commercial bank satisfactory to the Debtors and
Executive) to support the Debtors' obligations in connection with the Employment
Agreement and Indemnification Agreement on such terms (including with respect to
fees payable to the issuer of such letters of credit and the indemnification
rights of such issuer) as may be satisfactory to such issuer, the Debtors and
Executive, (ii) secure their obligations to reimburse the issuer of such letters
of credit with the irrevocable pledge and deposit of cash collateral, with such
issuer in an aggregate amount equal to 105% of the face amount of the letters of
credit so issued, and (iii) execute and deliver such instruments and agreements,
and perform such acts (including, without limitation, the payment of fees to the
issuer, and reimbursement of the issuer's expenses, in connection with the
letters of credit so issued), as may be required in connection with the issuance
of such letters of credit. The issuer of the letters of credit shall be
entitled to all of the protections of Section 364(e) of Title 11 of the United
States Code in the event of any reversal or modification on appeal of the
authority to obtain the letters of credit that is set forth herein. The notice
given by the Debtors of matters set forth herein constitutes due and sufficient
notice thereof.
6. The Debtor's obligations to the Executive under the Employment
Agreement, including the obligations of the Debtors under the Indemnification
Agreement, are granted pari passu and pro rata treatment with the current
Debtor-in-Possession ("DIP") financing, and are secured and perfected (without
any further action), and are granted the superpriority claim status to the same
extent and superpriority as the DIP lenders. If the DIP financing is increased
above $150 million, Executive's pari passu and pro rata treatment shall remain
at the same level as if no increase in the DIP financing above $150 million had
occurred. (1)
7. The Court shall retain jurisdiction to hear and determine all
matters arising from the Order.
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(1) Executive will be entitled to a percentage of all payments to the DIP
lenders determined by dividing the amount of the Company's obligations to
Executive by the DIP financing outstanding (but not to exceed $150 million
of DIP financing).