UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended February 29, 2000
Commission File Number 1-8368
SAFETY-KLEEN CORP.
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(Exact name of registrant as specified in its charter)
Delaware 51-0228924
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1301 Gervais Street Columbia, Suite 300, South Carolina 29201
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(Address of principal executive offices) (Zip Code)
(803) 933-4200 (Registrant's telephone number, including area code)
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(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes No X
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The number of shares of the issuer's common stock outstanding as of
April 6, 2000 was 100,783,596.
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SAFETY-KLEEN CORP.
INDEX
PART I FINANCIAL INFORMATION......................................... 3
PART II OTHER INFORMATION
Item 1 Legal Proceedings........................................... 3
Item 2 Changes In Securities And Use Of Proceeds................... 9
Item 3 Defaults Upon Senior Securities.............................10
Item 5 Other Events................................................10
Item 6 Exhibits and Reports on Form 8K.............................10
Signatures...........................................................16
Exhibit Index........................................................17
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PART I - FINANCIAL INFORMATION
Due to the ongoing internal investigation of the Company's reported
financial results and certain of its accounting policies and practices, as
announced by the Company on March 6, 2000, the Company is unable to prepare
financial statements for the quarter ended February 29, 2000 at this time. The
Company will file amended reports as soon as practicable.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
GENERAL
The business of the Company's hazardous and industrial waste services
is continuously regulated by federal, state, provincial and local provisions
that have been enacted or adopted, regulating the discharge of materials into
the environment or primarily for the purpose of protecting the environment. The
nature of the Company's businesses results in its frequently becoming a party to
judicial or administrative proceedings involving all levels of governmental
authorities and other interested parties. The issues that are involved generally
relate to applications for permits and licenses by the Company and their
conformity with legal requirements and alleged technical violations of existing
permits and licenses. The Company does not believe that these issues will be
material to the Company's operations or financial condition. At February 29,
2000, subsidiaries of the Company were involved in three proceedings of the
latter type relating primarily to activities at waste treatment, storage and
disposal facilities where the Company believes sanctions involved in each
instance may exceed $100,000. The Company believes that the ultimate disposition
of these issues will not have a materially adverse effect upon the Company's
consolidated financial position or results of operations.
From time to time, the Company is named as a defendant in various
lawsuits arising in the ordinary course of business, including proceedings
wherein persons claim injury resulting from the use of the Company's parts
cleaner equipment and/or cleaning products, other matters involving personal
injury and property damage claims and employment-related claims. A number of
such legal proceedings are currently pending in various courts and jurisdictions
throughout North America. Based on the Company's assessment of known claims and
its historical claims payment pattern, and discussions with internal and outside
legal counsel and risk management personnel, the Company believes that there is
no proceeding pending against the Company relating to such matters arising out
of the ordinary course of business that, if resolved against the Company, would
have a materially adverse effect upon the Company's consolidated financial
position or results of operations.
In the United States, CERCLA imposes financial liability on persons who
are responsible for the release of hazardous substances into the environment.
Present and past owners and operators of sites which release hazardous
substances, as well as generators and transporters of the waste material, are
jointly and severally liable for remediation costs and environmental
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damage. At February 29, 2000, the Company had been notified that it was a
potentially responsible party in connection with 49 locations in its hazardous
waste management and other businesses. The Company continually reviews its
status with respect to each location and the extent of its alleged contribution
to the volume of waste at the location, the available evidence connecting the
Company to that location, and the numbers and financial soundness of other
potentially responsible parties at the location. Based upon presently available
information, the Company does not believe that potential liabilities arising
from its involvement with these locations will be material to the Company's
operations or financial condition.
SAFETY-KLEEN (PINEWOOD), INC. FINANCIAL ASSURANCE
The Company's report on this matter contained in the Company's Report
on Form 10-K for the twelve months ended August 31, 1999 is incorporated herein
by reference thereto. In its May 19, 1994 order DHEC established Pinewood's
permitted capacity at 2250 acre feet and determined that from the date of the
order all wastes disposed, hazardous and non-hazardous, would be included in
determining the exhaustion of permitted capacity and non-hazardous waste
disposed prior to the May 19, 1994 order would not be counted toward the
hazardous waste capacity. In June 1995, DHEC promulgated, and the South Carolina
legislature approved, regulations (the "Regulations") governing financial
assurance for environmental cleanup and restoration giving owner/operators of
hazardous waste facilities the right to choose from among several options for
providing financial assurance. The options included insurance, a bond, a letter
of credit, a cash trust fund and a corporate guaranty with a financial test.
As previously reported in the Company's report on Form 8-K dated
January 19, 2000, the South Carolina Court of Appeals ("Court of Appeals")
issued a decision on January 17, 2000. The Court of Appeals declared:
1. The Regulations invalid due to insufficient public notice
during the promulgation procedure and ordering Pinewood to
immediately comply with the cash financial assurance
requirements of the May 19, 1994 DHEC Order. This decision, if
upheld, would require a present cash payment of approximately
$70 million.
2. That non-hazardous and hazardous waste volume count against
Pinewood capacity beginning with the site's initial disposal
of waste. The practical effect of the decision would render
Pinewood at approximately 500 acre feet over its permitted
capacity at this time, notwithstanding the fact that under the
DHEC Board Order, Pinewood was prohibited from seeking
additional capacity until it was within three years of
exhaustion of presently permitted capacity. Pinewood had at
least four years operation remaining under its previously
determined permitted capacity at the time of the January 17,
2000 decision.
Pinewood petitioned for a rehearing which was denied by the Court of Appeals in
its order dated April 4, 2000.
The Company will appeal the case to the South Carolina Supreme Court.
To address the possibility that no relief will be achieved in the state court
system, a strategy has been devised
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and a complaint prepared to challenge the decision in Federal Court, upon the
theory that South Carolina's imposition of a cash fund requirement and its
interpretation with respect to permitted capacity violates the Federal laws
and/or the United States Constitution. As a fall back position, the Company will
pursue the promulgation of new regulations identical to those declared invalid
by the Court of Appeals and will seek additional capacity through permit
modification proceedings before DHEC.
The Stock Purchase Agreement among Rollins Environmental Services, Inc.
(now Safety-Kleen Corp.) and Laidlaw Inc. and Laidlaw Transportation, Inc. dated
February 6, 1997, provides that Laidlaw Inc. shall maintain, solely at its
expense, until the tenth anniversary of the Closing Date (May 15, 1997), the
financial mechanism as may be permitted by the relevant environmental laws to
provide the required financial assurance for potential environmental cleanup and
restoration at the Pinewood facility.
If none of the challenges to the decision of the Court of Appeals is
successful, enforcement of the decision could have a material adverse impact
upon the Company's financial position.
MATTERS RELATED TO INVESTIGATION OF FINANCIAL RESULTS
As previously reported in the Company's Current Report on Form 8-K
dated March 6, 2000, the Company announced that it had initiated an internal
investigation of its prior reported financial results and certain of its
accounting policies and practices following receipt by the Company's Board of
Directors of information alleging possible accounting irregularities that may
have affected the previously reported financial results of the Company since
fiscal year 1998. The Board has appointed a Special Committee, consisting solely
of four independent outside directors of the Company, to conduct the internal
investigation, and has engaged the law firm Shaw Pittman and the accounting firm
Arthur Andersen LLP to assist with the comprehensive investigation of these
matters. Pending the outcome of the investigation, the Board also has placed
Kenneth W. Winger, the Company's Chief Executive Officer and a Director, Michael
J. Bragagnolo, Executive Vice President and Chief Operating Officer and Paul R.
Humphreys, Sr. Vice President of Finance and Chief Financial Officer
(collectively referred to as the "Individual Defendants"), on administrative
leave.
Between March 6 and 30, 2000, various Company shareholders (the "Class
Members") filed actions in the United States District Court for the District of
South Carolina, on behalf of various alleged classes of Company shareholders
(the "Federal Class Actions"), asserting federal securities fraud claims against
the Company, the Individual Defendants (the Company and the Individual
Defendants collectively referred to as the "Defendants") and in one case James
R. Bullock, former Chairman of the Board of the Company ("Bullock"). The Federal
Class Actions are as follows:
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<TABLE>
<CAPTION>
No. CASE NAME COURT DOCKET # DATE OF CLASS PERIOD
FILING
<S> <C> <C> <C> <C> <C>
1. Rachel Samet, Individually and on Behalf United States 3:00-0739-10 3/7/00 7/7/98 - 3/6/00
of all others Similarly Situated vs. District Court
Safety-Kleen Corp., Kenneth W. Winger, (Columbia Division)
Paul R. Humphreys and Michael Bragagnolo
2. Jack Forrest, on behalf of himself and United States 3:00-736 3/7/00
all other similarly situated vs. District Court
Safety-Kleen Corp., Kenneth W. Winger, (Columbia Division)
Michael J. Bragagnolo and Paul R.
Humphreys
3. Kenneth Steiner, Individually and on United States 3:00-0750-10 3/8/00 5/4/98 - 3/6/00
Behalf of all others Similarly Situated District Court
vs. Safety-Kleen Corp., Kenneth W. (Columbia Division)
Winger, Paul R. Humphreys, Michael
Bragagnolo and James R. Bullock
4. D. Scott Kelley, Individually and on United States 3:00-0748-10 3/8/00 7/7/98 - 3/6/00
Behalf of all others Similarly Situated District Court
vs. Safety-Kleen Corp., Kenneth W. (Columbia Division)
Winger, Paul R. Humphreys and Michael
Bragagnolo
5. Izidor Klein, Individually and on Behalf United States 3:00-749-17 3/8/00 7/7/98 - 3/6/00
of all other Similarly Situated v. District Court
Safety-Kleen Corp., Kenneth W. Winger, (Columbia Division)
Michael Bragagnolo and Paul R. Humphreys
6. Michael Potts, Individually and on United States 3:00-0769-17 3/9/00 7/7/98 - 3/6/00
Behalf of all others Similarly Situated District Court
vs. Safety-Kleen Corp., Kenneth W. (Columbia Division)
Winger, Paul R. Humphreys and Michael
Bragagnolo
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No. CASE NAME COURT DOCKET # DATE OF CLASS PERIOD
FILING
7. Jerry Krim and Hirsch Weber, United States 3:00-0768-17 3/9/00 7/7/98 - 3/6/00
Individually and on Behalf of all others District Court
Similarly Situated vs. Safety-Kleen (Columbia Division)
Corp., Kenneth W. Winger, Paul R.
Humphreys and Michael Bragagnolo
8. Faye Scher, Individually and on Behalf United States 3:00-0791-17 3/13/00 7/7/98 - 3/6/00
of all others Similarly Situated vs. District Court
Safety-Kleen Corp., Kenneth W. Winger, (Columbia Division)
Paul R. Humphreys and Michael Bragagnolo
9. Maurice Suede, Individually and on United States 3:00-0792-17 3/13/00 10/6/98 - 3/3/00
Behalf of all others Similarly Situated District Court
vs. Safety-Kleen Corp., Kenneth W. (Columbia Division)
Winger, Paul R. Humphreys and Michael
Bragagnolo
10. Myron H. Smith, Individually and on United States 3:00-0829-17 3/15/00 7/7/98 - 3/6/00
Behalf of all others Similarly Situated District Court
vs. Safety-Kleen Corp., Kenneth W. (Columbia Division)
Winger, Paul R. Humphreys and Michael
Bragagnolo
11. Frank A. Riccobono, Individually and on United States 3:00-0866-17 3/20/00 7/7/98 - 3/3/00
Behalf of all others Similarly Situated District Court
vs. Safety-Kleen Corp., Kenneth W. (Columbia Division)
Winger, Paul R. Humphreys and Michael
Bragagnolo
12. Michael Schmeling, on behalf of himself United States 3:00-875 3/20/00 7/9/97 - 3/6/00
and all other similarly situated vs. District Court
Safety-Kleen Corp., Kenneth W. Winger, (Columbia Division)
Michael J. Bragagnolo and Paul R.
Humphreys
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No. CASE NAME COURT DOCKET # DATE OF CLASS PERIOD
FILING
13. Joseph Lyons, on behalf of himself and United States 3:00-996 3/29/00 7/7/98 - 3/6/00
all other similarly situated vs. District Court
Safety-Kleen Corp., Kenneth W. Winger, (Columbia Division)
Michael J. Bragagnolo and Paul R.
Humphreys
14. John Ulrich, on behalf of himself and United States 3:00-1005 3/30/00 10/6/98 - 3/3/00
all others similarly situated vs. District Court
Safety-Kleen Corp., Kenneth W. Winger, (Columbia Division)
Michael J. Bragagnolo and Paul R.
Humphreys
</TABLE>
The significant part of these actions brought on behalf of various
putative classes of purchasers of Company securities between May 4, 1998 and
March 6, 2000 (the "Class Periods") is the allegation that the Defendants
disseminated materially false and misleading information and failed to disclose
material facts with respect to the Company's financial condition and business
prospects, thereby causing the market price of Company securities to be
artificially inflated during the Class Periods and that the Class Members
acquired Company securities during the Class Periods at artificially inflated
prices and were damaged thereby.
The Federal Class Actions assert various violations of securities laws
including violations of Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934 and Rules 10b-5 and 14a-9 promulgated under the Exchange Act, Sections
11, 12(a)(2) and 15 of the Securities Act of 1933. The claims under Section 15
of the Securities Act of 1933 and 20(a) of the Exchange Act have been asserted
against the Individual Defendants, and in once case Bullock, but not against the
Company. These actions seek to recover damages in an unspecified amount which
the Class Members allegedly sustained by purchasing Company securities at
artificially inflated prices, as well as related relief. As of April 7, 2000,
the Company had not received copies of the Complaints in cases numbered 2, 12
and 13. Allegations and causes of action may be contained in these cases which
are not included in this disclosure.
In addition to the above, two shareholder derivative lawsuits were
filed in the Delaware Court of Chancery for New Castle County on behalf of the
Company, against certain of its directors and former directors (the "Delaware
Derivative Actions"): (1) Civil Action No. 17923-NC on March 24, 2000, pending
under the caption Peter Frank, Plaintiff vs. Kenneth W. Winger, John W. Rollins,
James R. Bullock, David E. Thomas, Jr., Leslie W. Haworth, Henry B. Tippie,
James L. Wareham, John W. Rollins, Jr., Robert W. Luba and Grover C. Wren (sic),
Defendants (the "Director Defendants") and Safety-Kleen Corp. (Nominal
Defendant) and (2) Civil Action No. 1974-NC on March 30, 2000, pending under the
caption Harbor Finance Partners, derivatively on behalf of Safety-Kleen Corp.,
Plaintiff against James R. Bullock, John W. Rollins, Sr., David E. Thomas, Jr.,
Kenneth W. Winger, Leslie W. Haworth, Henry B. Tippie,
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James L. Wareham, John W. Rollins, Jr., Robert W. Luba, Peter N.T. Widdrington
and Grover C. Wrenn, Defendants and Safety-Kleen Corp. (Nominal Defendant). The
Delaware Derivative Actions assert, inter alia, that the Director Defendants
breached their fiduciary obligations to the Company and its Shareholders by
failing to adequately supervise the Company and to monitor its internal
financial administrative policies, procedures and controls over an extended
period of time, thereby exposing the Company to class action lawsuits and the
loss of goodwill in the investment community, resulting in damages to the
Company and its shareholders. These claims seek to recover damages on behalf of
the Company against the Director Defendants in an unspecified amount as well as
related relief.
It is anticipated that other lawsuits similar in nature to the
previously disclosed lawsuits may be filed.
Shortly after the Company's March 6, 2000 announcement, Company
representatives met with officials of the Securities and Exchange Commission
(the "Commission") and advised the Commission of the alleged accounting
irregularities and the Company's internal investigation with respect to the
allegations. On March 10, 2000, the Company was advised that the Commission had
initiated a formal investigation of the Company. Also on March 10, 2000, the
Commission issued a subpoena to the Company requiring the production of certain
financial and corporate documents relating to the preparation of Company
financial statements, reports and audits for Fiscal Years 1998, 1999 and 2000
and for other various documents pertaining to and ancillary to the alleged
accounting irregularities. The Company has obtained an indefinite extension of
time to respond to the Subpoena.
On or about March 22, 2000, the Company was served with a subpoena
issued by a Grand Jury sitting in the United States District Court for the
Southern District of New York seeking production of the same documents described
in the Commission's Subpoena. The Company has obtained an indefinite extension
of time to respond to the Subpoena.
The Company is cooperating with each of the investigations.
Other than as herein reported there have been no additional significant
legal proceedings or any material changes in the legal proceedings reported in
PART II, Item 3 of the Company's Report on Form 10-K for the twelve months ended
August 31, 1999.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
(c) On January 5, 1999 the Company issued 6014 unregistered shares of
common stock, par value $1.00 per share. On January 4, 2000 the Company issued
5621 unregistered shares of Common Stock, par value $1.00 per share. The shares
were issued under the Non-Employee Director Stock Plan, pursuant to which each
non-employee director receives 50% of his annual remuneration in shares of
Company common stock.
The Company believes that the issuance of these securities to the
directors was exempt from the registration requirements of the Securities Act of
1933, as amended, pursuant to section 4(2) thereof by virtue of the recipients'
status as directors of the Company.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
As previously announced by the Company in a Form 8-K filed by the
Company on March 13, 2000, the Company is in default of certain obligations
under the Amended and Restated Credit Agreement dated as of April 3, 1998 among
Safety-Kleen Services, Inc. (formerly known as LES, Inc.), Safety-Kleen Services
(Canada) Ltd. (formerly known as Laidlaw Environmental Services (Canada) Ltd.),
the Lenders, Toronto Dominion (Texas), Inc., The Toronto Dominion Bank, TD
Securities (USA) Inc., The Bank of Nova Scotia, NationsBank, N.A., The First
National Bank of Chicago and Wachovia Bank N.A. (the "Credit Facility").
ITEM 5. OTHER EVENTS
On April 14, 2000, the Company issued the press release filed with this
Quarterly Report on Form 10-Q as Exhibit 99.1. The information contained in
Exhibit 99.1 is incorporated by reference herein.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
(3)(a) Restated Certificate of Incorporation of the Company dated May 13, 1997
and Amendment to Certificate of Incorporation dated May 15, 1997 filed as
Exhibit 3(a) to the Company's Form 10-Q for the Quarter ended May 31, 1997 and
incorporated herein by reference.
(3)(a)(i) Certificate of Correction Filed to Correct a Certain Error in the
Restated and Amended Certificate of Incorporation of the Company dated October
15, 1997 filed as Exhibit (3)(a)(i) to the Company's Form 10-K-405 for the Year
ended August 31, 1997, and incorporated herein by reference.
(3)(a)(ii) Certificate of Amendment to the Restated Certificate of Incorporation
of the Company dated November 25, 1998 filed as Exhibit (3)(a)(iii) to the
Company's Form 10-Q for the quarter ended November 30, 1998 and incorporated
herein by reference.
(3)(a)(iii) Certificate of Amendment to the Restated Certificate of
Incorporation of the Company dated November 30, 1998 filed as Exhibit (3)(a)(iv)
to the Company's Form 10-Q for the quarter ended November 30, 1998 and
incorporated herein by reference.
(3)(b) Amended and Restated Bylaws of the Company filed as Exhibit 4(ii) to the
Company's Current Report on Form 8-K dated July 29, 1997 and incorporated herein
by reference.
(4)(a) Indenture dated as of May 29, 1998 between LES, Inc. (a subsidiary of the
Company), Company, subsidiary guarantors of the Company and The Bank of Nova
Scotia Trust Company of New York, as trustee filed as Exhibit 4(b) to the
Company's Form S-4 Registration Statement No. 333-57587 filed June 24, 1998 and
incorporated herein by reference.
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(4)(b) First Supplemental Indenture effective as of November 15, 1998 among
Safety-Kleen Services, Inc., the Company, SK Europe, Inc. and The Bank of Nova
Scotia Trust Company of New York, as trustee filed as Exhibit (4)(f) to the
Company's Form S-4 Registration Statement No. 333-82689 filed July 12, 1999 and
incorporated herein by reference.
(4)(c) Second Supplemental Indenture effective as of May 7, 1999 among
Safety-Kleen Services, Inc., the Company, SK Services, L.C., SK Services (East),
L.C. and The Bank of Nova Scotia Trust Company of New York, as trustee filed as
Exhibit (4)(d) to the Company's Form 10-K filed October 29, 1999 and
incorporated herein by reference.
(4)(d) Indenture dated as of May 17, 1999 between the Company and the Bank of
Nova Scotia Trust Company of New York, as trustee filed as Exhibit (4)(b) to the
Company's Form S-4 Registration Statement No. 333-82689 filed July 12, 1999 and
incorporated herein by reference.
(4)(e) Registration Rights Agreement dated as of May 17, 1999 between the
Company and TD Securities, NationsBanc Montgomery Securities LLC and Raymond
James & Associates, Inc. filed as Exhibit (4)(a) to the Company's Form S-4
Registration Statement No. 333-82689 filed July 12, 1999 and incorporated herein
by reference.
(4)(f) Amended and Restated Credit Agreement among Laidlaw Chem-Waste, Inc.,
Laidlaw Environmental Services (Canada) Ltd., Toronto Dominion (Texas) Inc., The
Toronto-Dominion Bank, TD Securities (USA) Inc., The Bank of Nova Scotia,
NationsBank, N.A. and The First National Bank of Chicago and NationsBank, N.A.
as Syndication Agent dated as of April 3, 1998, filed as Exhibit 4(f) to the
Company's Form 10-Q for the quarter ended February 28, 1999, and incorporated
herein by reference.
(4)(g) Supplement to the Amended and Restated Credit Agreement among Laidlaw
Chem-Waste, Inc., Laidlaw Environmental Services (Canada) Ltd., Toronto Dominion
(Texas) Inc., The Toronto-Dominion Bank, TD Securities (USA) Inc., The Bank of
Nova Scotia, NationsBank, N.A. and The First National Bank of Chicago and
NationsBank, N.A. as Syndication Agent dated as of April 3, 1998, filed as
Exhibit 4(e) to a subsidiary of the Company's Form S-4 Registration Statement
No. 333-57587 filed June 24, 1998 and incorporated herein by reference.
(4)(h) Waiver and First Amendment to the Amended and Restated Credit Agreement
dated as of May 15, 1998 among LES, Inc., Laidlaw Environmental Services
(Canada) Ltd., the Lenders, Toronto Dominion (Texas), Inc., The Toronto Dominion
Bank, TD Securities (USA) Inc., The Bank of Nova Scotia, NationsBank, N.A., The
First National Bank of Chicago and Wachovia Bank filed as Exhibit 4(f) to a
subsidiary of the Company's Form S-4 Registration Statement No. 333-57587 filed
June 24, 1998 and incorporated herein by reference.
(4)(i) Commitment to Increase Supplement to the Amended and Restated Credit
Agreement dated as of June 3, 1998 among LES, Inc., Laidlaw Environmental
Services (Canada) Ltd., the Lenders, Toronto Dominion (Texas), Inc., The Toronto
Dominion Bank, TD Securities (USA) Inc., The Bank of Nova Scotia, NationsBank,
N.A., The First National Bank of Chicago and Wachovia Bank filed as Exhibit 4(g)
to a subsidiary of the Company's Form S-4 Registration Statement No. 333-57587
filed June 24, 1998 and incorporated herein by reference.
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(4)(j) Second Amendment to the Amended and Restated Credit Agreement dated as of
November 20, 1998 among Safety-Kleen Services, Inc. (formerly known as LES,
Inc.), Safety-Kleen Services (Canada) Ltd. (formerly known as Laidlaw
Environmental Services (Canada) Ltd.), the Lenders, Toronto Dominion (Texas),
Inc., The Toronto Dominion Bank, TD Securities (USA) Inc., The Bank of Nova
Scotia, NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank
N.A., filed as Exhibit (4)(j) to the Company's Form 10-Q for the quarter ended
February 28, 1999 and incorporated herein by reference.
(4)(k) Waiver and Third Amendment to the Amended and Restated Credit Agreement
dated as of May 6, 1999 among Safety-Kleen Services, Inc. (formerly known as
LES, Inc.), Safety-Kleen Services (Canada) Ltd. (formerly known as Laidlaw
Environmental Services (Canada) Ltd.), the Lenders, Toronto Dominion (Texas),
Inc., The Toronto Dominion Bank, TD Securities (USA) Inc., The Bank of Nova
Scotia, NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank
N.A. filed as Exhibit (4)(l) to the Company's Form S-4 Registration Statement
No. 333-82689 filed July 12, 1999 and incorporated herein by reference.
(4)(l) Registration Rights Agreement dated May 15, 1997 among the Company,
Laidlaw Transportation, Inc. and Laidlaw Inc., the form of which was filed as
Exhibit B to Annex A to the Company's Definitive Proxy Statement on Form DEF
14A, filed on May 1, 1997 and incorporated herein by reference.
(4)(m) Indenture dated as of May 1, 1993 between the Industrial Development
Board of the Metropolitan Government of Nashville and Davidson County
(Tennessee) and NationsBank of Tennessee, N.A., filed as Exhibit 4(f) to the
Company's Form 10-Q for the Quarter ended May 31, 1997, and incorporated herein
by reference.
(4)(n) Indenture of Trust dated as of August 1, 1995 between Tooele County, Utah
and West One Bank, Utah, now known as U.S. Bank, as Trustee, filed as Exhibit
4(h) to the Company's form 10-Q for the Quarter ended May 31, 1997, and
incorporated herein by reference.
(4)(o) Indenture of Trust dated as of July 1, 1997 between Carbon County, Utah
and U.S. Bank, a national banking association, as Trustee, filed as Exhibit 4(i)
to the Company's Form 10-Q for the Quarter ended May 31, 1997, and incorporated
herein by reference.
(4)(p) Indenture of Trust dated as of July 1, 1997 between Tooele County, Utah
and U.S. Bank, a national banking association, as Trustee, filed as Exhibit 4(j)
to the Company's Form 10-Q for the Quarter ended May 31, 1997, and incorporated
herein by reference.
(4)(q) Indenture of Trust dated as of July 1, 1997 between California Pollution
Control Financing Authority and U.S. Bank, a national banking association, as
Trustee, filed as Exhibit 4(k) to the Company's Form 10-Q for the Quarter ended
May 31, 1997, and incorporated herein by reference.
(4)(r) Promissory Note dated May 15, 1997 for $60,000,000 from the Company to
Westinghouse Electric Corporation, filed as Exhibit 4(n) to the Company's Form
10-Q for the Quarter ended May 31, 1997, and incorporated herein by reference.
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(4)(s) Letter dated May 7, 1999 from Toronto-Dominion (Texas) Inc. (as assignee
of Westinghouse Electric Corporation) and agreed to by the Company and Laidlaw
Inc. amending the terms of the Promissory Note dated May 15, 1997 (as referenced
in Exhibit (4)(r)) filed as Exhibit (4)(u) to theCompany's Form S-4 Registration
Statement No. 333-82689 filed July 12, 1999 and incorporated herein by
reference.
(4)(t) Guaranty Agreement dated May 15, 1997 by Laidlaw Inc. to Westinghouse
Electric Corporation guaranteeing Promissory Note dated May 15, 1997 (as
referenced in Exhibit (4)(s)) from Company to Westinghouse Electric
Corporation), filed as Exhibit 4(o) to the Company's Form 10-Q for the Quarter
ended May 31, 1997, and incorporated herein by reference.
(4)(u) Collateral Account Pledge and Security Agreement dated as of May 17, 1999
among the Company, The Bank of Nova Scotia Trust Company of New York, as escrow
agent and The Bank of Nova Scotia Trust Company of New York, as trustee, filed
as Exhibit (4)(d) to the Company's Form S-4 Registration Statement No. 333-82689
filed July 12, 1999 and incorporated herein by reference.
(4)(v) Rights Agreement dated as of October 15, 1999 between the
Company and EquiServe Trust Company, N.A., as Rights Agent, filed as Exhibit
(c)1 to the Company's Current Report on Form 8-K filed on October 15, 1999 and
incorporated herein by reference.
(4)(w) First Amendment to Rights Agreement, dated as of March 17, 2000, between
Safety-Kleen Corp. and Equiserve Trust Company, N.A. filed as Exhibit 99.1 to
the Company's Current Report on Form 8-K filed on March 17, 2000 and
incorporated herein by reference.
(4)(x) Letter Agreement, dated October 12, 1999, between Safety-Kleen Corp. and
Laidlaw Inc. filed as Exhibit 99.2 to the Company's Current Report on Form 8-K
filed on March 17, 2000 and incorporated herein by reference.
(4)(y) Other instruments defining the rights of holders of nonregistered debt of
the Company have been omitted from this exhibit list because the amount of debt
authorized under any such instrument does not exceed 10% of the total assets of
the Company and its subsidiaries. The Company agrees to furnish a copy of any
such instrument to the Commission upon request.
(10)(a) Agreement and Plan of Merger dated as of March 16, 1998 by and among the
Company, LES Acquisition, Inc., and Safety-Kleen Corp. included as Annex A of
Safety-Kleen's Revised Amended Prospectus on Form 14D-9 filed as Exhibit 62 to
Safety-Kleen's Amendment No. 28 to Schedule 14-9A on March 17, 1998, and
incorporated herein by reference.
(10)(b) Stock Purchase Agreement between Westinghouse Electric Corporation
(Seller) and Rollins Environmental Services, Inc. (Buyer) for National Electric,
Inc. dated March 7, 1995 filed as Exhibit 2 to the Company's Current Report on
Form 8-K filed on June 13, 1995 and incorporated herein by reference.
Page 13
<PAGE>
(10)(c) Second Amendment to Stock Purchase Agreement (as referenced in Exhibit
(10)(b) above), dated May 15, 1997 among Westinghouse Electric Corporation,
Rollins Environmental Services, Inc. and Laidlaw Inc., filed as Exhibit 4(m) to
the Company's Form 10-Q for the Quarter ended May 31, 1997, and incorporated
herein by reference.
(10)(d) Rollins Environmental Services, Inc. 1982 Incentive Stock Option Plan
filed with Amendment No. 1 to the Company's Registration Statement No. 2-84139
on Form S-1 dated June 24, 1983 and incorporated herein by reference.
(10)(e) Rollins Environmental Services, Inc. 1993 Stock Option Plan filed with
the Company's Proxy Statement for the Annual Meeting of Shareholders held
January 28, 1994 and incorporated herein by reference.
(10)(f) Company's 1997 Stock Option Plan, filed as Exhibit 4.4 to the Company's
Registration Statement No. 333-41859 on Form S-8 dated December 10, 1997 and
incorporated herein by reference.
(10)(g) First Amendment to Company's 1997 Stock Option Plan, filed as Exhibit
(10)(g) to the Company's Form 10-Q dated January 14, 2000 and incorporated
herein by reference.
(10)(h) Company's Director's Stock Option Plan, filed as Exhibit 4.5 to the
Company's Registration Statement No. 333-41859 on Form S-8 dated December 10,
1997 and incorporated herein by reference.
(10)(i) First Amendment to Company's Director's Stock Option Plan filed as
Exhibit (10)(i) to the Company's Form 10-Q dated January 14, 2000 and
incorporated herein by reference.
(10)(j) Stock Purchase Agreement dated February 6, 1997 among the Company,
Laidlaw Inc., and Laidlaw Transportation, Inc. filed as Exhibit A to Annex A to
the Definitive Proxy Statement on Form DEF 14A filed on May 1, 1997 and
incorporated herein by reference.
(10)(k) Executive Bonus Plan for fiscal year 2000 filed as Appendix C to the
Definitive Proxy Statement on Form DEF 14A filed on October 29, 1999 and
incorporated herein by reference.
(10)(l) Company's U.S. Supplemental Executive Retirement Plan filed as Exhibit
10(g) to the Company's 10-Q for the quarter ended November 30, 1997, and
incorporated herein by reference.
(10)(m) Form of Change of Control Agreement A-12-22.
(10)(n) Form of Change of Control Agreement A1 RB 11 30.
(10)(o) Form of Change of Control Agreement A2-12-22.
(10)(p) Form of Change of Control Agreement AAMB0120.
Page 14
<PAGE>
(10)(q) Form of Change of Control Agreement B-12-22.
(10)(r) Form of Change of Control Agreement C-12-22.
(10)(s) Form of Change of Control Agreement D-12-22.
99.1 Press Release of April 14, 2000
(b) Reports on Form 8-K.
i. The Company filed a Current Report on Form 8-K on January 7, 2000, which
contained Item 5 related to the Company announcing operating results for
the first quarter ended November 30, 1999 and also releasing financial
information as part of an analysts' call.
ii. The Company filed a Current Report on Form 8-K on January 19, 2000 which
contained Item 5 related to the Company announcing that the Company would
appeal a decision of the South Carolina Court of Appeals relating to
various financial assurance, capacity and other issues at its Pinewood,
South Carolina facility.
iii. The Company filed a Current Report on Form 8-K on January 26, 2000 which
contained Item 5 related to the Company announcing the resignation of James
R. Bullock as Chairman of the Board of Directors and as a Director of the
Company.
iv. The Company filed a Current Report on Form 8-K on February 9, 2000 which
contained Item 5 announcing that the appointment of Peter N.T. Widdrington
to the Board of Directors and as Chairman of the Board.
v. The Company filed a Current Report on Form 8-K on February 11, 2000 which
contained Item 5 announcing that the Board of Directors of the Company
disbanded the Special Committee formed September 13, 1999.
Page 15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: April 14, 2000 SAFETY-KLEEN CORP.
------------------
(Registrant)
/s/ Henry H. Taylor
------------------------
Henry H. Taylor
Vice President, General Counsel and Secretary
/s/ John G. McGregor
------------------------
John G. McGregor
Interim Chief Financial Officer
Page 16
<PAGE>
EXHIBIT INDEX
(3)(a) Restated Certificate of Incorporation of the Company dated May
13, 1997 and Amendment to Certificate of Incorporation dated
May 15, 1997 filed as Exhibit 3(a) to the Company's Form 10-Q
for the Quarter ended May 31, 1997 and incorporated herein by
reference.
(3)(a)(i) Certificate of Correction Filed to Correct a Certain Error in
the Restated and Amended Certificate of Incorporation of the
Company dated October 15, 1997 filed as Exhibit (3)(a)(i) to
the Company's Form 10-K-405 for the Year ended August 31, 1997,
and incorporated herein by reference.
(3)(a)(ii) Certificate of Amendment to the Restated Certificate of
Incorporation of the Company dated November 25, 1998 filed as
Exhibit (3)(a)(iii) to the Company's Form 10-Q for the quarter
ended November 30, 1998 and incorporated herein by reference.
(3)(a)(iii) Certificate of Amendment to the Restated Certificate of
Incorporation of the Company dated November 30, 1998 filed as
Exhibit (3)(a)(iv) to the Company's Form 10-Q for the quarter
ended November 30, 1998 and incorporated herein by reference.
(3)(b) Amended and Restated Bylaws of the Company filed as Exhibit 4
(ii) to the Company's Current Report on Form 8-K dated July 29,
1997 and incorporated herein by reference.
(4)(a) Indenture dated as of May 29, 1998 between LES, Inc. (a
subsidiary of the Company), the Company, subsidiary guarantors
of the Company and The Bank of Nova Scotia Trust Company of New
York, as trustee filed as Exhibit 4(b) to the Company's Form
S-4 Registration Statement No. 333-57587 filed June 24, 1998
and incorporated herein by reference.
(4)(b) First Supplemental Indenture effective as of November 15, 1998
among Safety-Kleen Services, Inc. the Company, SK Europe, Inc.
and The Bank of Nova Scotia Trust Company of New York, as
trustee filed as Exhibit (4)(f) to the Company's Form S-4
Registration Statement No. 333-82689 filed July 12, 1999 and
incorporated herein by reference.
(4)(c) Second Supplemental Indenture effective as of May 7, 1999 among
Safety-Kleen Services, Inc., the Company, SK Services, L.C., SK
Services (East), L.C. and The Bank of Nova Scotia Trust Company
of New York, as trustee filed as Exhibit (4)(d) to the
Company's Form 10-K filed October 29, 1999 and incorporated
herein by reference.
Page 17
<PAGE>
(4)(d) Indenture dated as of May 17, 1999 between the Company and the
Bank of Nova Scotia Trust Company of New York, as trustee filed
as Exhibit (4)(b) to the Company's Form S-4 Registration State-
ment No. 333-82689 filed July 12, 1999 and incorporated herein
by reference.
(4)(e) Registration Rights Agreement dated as of May 17, 1999 between
Company and TD Securities, NationsBanc Montgomery Securities
LLC and Raymond James & Associates, Inc. filed as Exhibit
(4)(a) to the Company's Form S-4 Registration Statement No.
333-82689 filed July 12, 1999 and incorporated herein by
reference.
(4)(f) Amended and Restated Credit Agreement among Laidlaw Chem-Waste,
Inc., Laidlaw Environmental Services (Canada) Ltd., Toronto
Dominion (Texas) Inc., The Toronto-Dominion Bank, TD Securities
(USA) Inc., The Bank of Nova Scotia, NationsBank, N.A. and The
First National Bank of Chicago and NationsBank, N.A. as
Syndication Agent dated as of April 3, 1998, filed as Exhibit
4(f) to the Company's Form 10-Q for the quarter ended February
28, 1999, and incorporated herein by reference. (4)(g)
Supplement to the Amended and Restated Credit Agreement among
Laidlaw Chem-Waste, Inc., Laidlaw Environmental Services
(Canada) Ltd., Toronto Dominion (Texas) Inc., The
Toronto-Dominion Bank, TD Securities (USA) Inc., The Bank of
Nova Scotia, NationsBank, N.A. and The First National Bank of
Chicago and NationsBank, N.A. as Syndication Agent dated as of
April 3, 1998, filed as Exhibit 4(e) to a subsidiary of the
Company's Form S-4 Registration Statement No. 333-57587 filed
June 24, 1998 and incorporated herein by reference.
(4)(h) Waiver and First Amendment to the Amended and Restated Credit
Agreement dated as of May 15, 1998 among LES, Inc., Laidlaw
Environmental Services (Canada) Ltd., the Lenders, Toronto
Dominion (Texas), Inc., The Toronto Dominion Bank, TD
Securities (USA) Inc., The Bank of Nova Scotia, NationsBank,
N.A., The First National Bank of Chicago and Wachovia Bank
filed as Exhibit 4(f) to a subsidiary of the Company's Form S-4
Registration Statement No. 333-57587 filed June 24, 1998 and
incorporated herein by reference.
(4)(i) Commitment to Increase Supplement to the Amended and Restated
Credit Agreement dated as of June 3, 1998 among LES, Inc.,
Laidlaw Environmental Services (Canada) Ltd., the Lenders,
Toronto Dominion (Texas), Inc., The Toronto Dominion Bank, TD
Securities (USA) Inc., The Bank of Nova Scotia, NationsBank,
N.A., The First National Bank of Chicago and Wachovia Bank
filed as Exhibit 4(g) to a subsidiary of the Company's Form S-4
Registration Statement No. 333-57587 filed June 24, 1998 and
incorporated herein by reference.
Page 18
<PAGE>
(4)(j) Second Amendment to the Amended and Restated Credit Agreement
dated as of November 20, 1998 among Safety-Kleen Services, Inc.
(formerly known as LES, Inc.), Safety-Kleen Services (Canada)
Ltd. (formerly known as Laidlaw Environmental Services (Canada)
Ltd.), the Lenders, Toronto Dominion (Texas), Inc., The Toronto
Dominion Bank, TD Securities (USA) Inc., The Bank of Nova
Scotia, NationsBank, N.A., The First National Bank of Chicago
and Wachovia Bank N.A., filed as Exhibit (4)(j) to the
Company's Form 10-Q for the quarter ended February 28, 1999 and
incorporated herein by reference.
(4)(k) Waiver and Third Amendment to the Amended and Restated Credit
Agreement dated as of May 6, 1999 among Safety-Kleen Services,
Inc. (formerly known as LES, Inc.), Safety-Kleen Services
(Canada) Ltd. (formerly known as Laidlaw Environmental Services
(Canada) Ltd.), the Lenders, Toronto Dominion (Texas), Inc.,
The Toronto Dominion Bank, TD Securities (USA) Inc., The Bank
of Nova Scotia, NationsBank, N.A., The First National Bank of
Chicago and Wachovia Bank N.A. filed as Exhibit (4)(l) to the
Company's Form S-4 Registration Statement No. 333-82689 filed
July 12, 1999 and incorporated herein by reference.
(4)(l) Registration Rights Agreement dated May 15, 1997 among the
Company, Laidlaw Transportation, Inc. and Laidlaw Inc., the
form of which was filed as Exhibit B to Annex A to the
Company's Definitive Proxy Statement on Form DEF 14A, filed on
May 1, 1997 and incorporated herein by reference.
(4)(m) Indenture dated as of May 1, 1993 between the Industrial
Development Board of the Metropolitan Government of Nashville
and Davidson County (Tennessee) and NationsBank of Tennessee,
N.A., filed as Exhibit 4(f) to the Company's Form 10-Q for the
Quarter ended May 31, 1997, and incorporated herein by
reference.
(4)(n) Indenture of Trust dated as of August 1, 1995 between Tooele
County, Utah and West One Bank, Utah, now known as U.S. Bank,
as Trustee, filed as Exhibit 4(h) to the Company's form 10-Q
for the Quarter ended May 31, 1997, and incorporated herein by
reference.
(4)(o) Indenture of Trust dated as of July 1, 1997 between Carbon
County, Utah and U.S. Bank, a national banking association, as
Trustee, filed as Exhibit 4(i) to the Company's Form 10-Q for
the Quarter ended May 31, 1997, and incorporated herein by
reference.
(4)(p) Indenture of Trust dated as of July 1, 1997 between Tooele
County, Utah and U.S. Bank, a national banking association, as
Trustee, filed as Exhibit 4(j) to the Company's Form 10-Q for
the Quarter ended May 31, 1997, and incorporated herein by
reference.
(4)(q) Indenture of Trust dated as of July 1, 1997 between California
Pollution Control Financing Authority and U.S. Bank, a national
banking association, as Trustee, filed as Exhibit 4(k) to the
Company's Form 10-Q for the Quarter ended May 31, 1997, and
incorporated herein by reference.
Page 19
<PAGE>
(4)(r) Promissory Note dated May 15, 1997 for $60,000,000 from the
Company to Westinghouse Electric Corporation, filed as Exhibit
4(n) to the Company's Form 10-Q for the Quarter ended May 31,
1997, and incorporated herein by reference.
(4)(s) Letter dated May 7, 1999 from Toronto-Dominion (Texas) Inc. (as
assignee of Westinghouse Electric Corporation) and agreed to by
the Company and Laidlaw Inc. amending the terms of the
Promissory Note dated May 15, 1997 (as referenced in Exhibit
(4)(r)) filed as Exhibit (4)(u) to the Company's Form S-4
Registration Statement No. 333-82689 filed July 12, 1999 and
incorporated herein by reference.
(4)(t) Guaranty Agreement dated May 15, 1997 by Laidlaw Inc. to
Westinghouse Electric Corporation guaranteeing Promissory Note
dated May 15, 1997 (as referenced in Exhibit (4)(s)) from
Company to Westinghouse Electric Corporation), filed as Exhibit
4(o) to the Company's Form 10-Q for the Quarter ended May 31,
1997, and incorporated herein by reference.
(4)(u) Collateral Account Pledge and Security Agreement dated as of
May 17, 1999 among the Company, The Bank of Nova Scotia Trust
Company of New York, as escrow agent and The Bank of Nova
Scotia Trust Company of New York, as trustee, filed as Exhibit
(4)(d) to the Company's Form S-4 Registration Statement No.
333-82689 filed July 12, 1999 and incorporated herein by
reference.
(4)(v) Rights Agreement dated as of October 15, 1999 between the
Company and EquiServe Trust Company, N.A., as Rights Agent,
filed as Exhibit (c)1 to the Company's Current Report on Form
8-K filed on October 15, 1999 and incorporated herein by
reference.
(4)(w) First Amendment to Rights Agreement,dated as of March 17, 2000,
between Safety-Kleen Corp. and Equiserve Trust Company, N.A.
filed as Exhibit 99.1 to the Company's Current Report on Form
8-K filed on March 17, 2000 and incorporated herein by
reference.
(4)(x) Letter Agreement, dated October 12, 1999, between Safety-Kleen
Corp. and Laidlaw Inc. filed as Exhibit 99.2 to the Company's
Current Report on Form 8-K filed on March 17, 2000 and
incorporated herein by reference.
(4)(y) Other instruments defining the rights of holders of
nonregistered debt of the Company have been omitted from this
exhibit list because the amount of debt authorized under any
such instrument does not exceed 10% of the total assets of the
Company and its subsidiaries. The Company agrees to furnish a
copy of any such instrument to the Commission upon request.
(10)(a) Agreement and Plan of Merger dated as of March 16, 1998 by and
among the Company, LES Acquisition, Inc., and Safety-Kleen
Corp. included as Annex A of Safety-Kleen's Revised Amended
Prospectus on Form 14D-9 filed as Exhibit 62 to Safety-Kleen's
Amendment No. 28 to Schedule 14-9A on March 17, 1998, and
incorporated herein by reference.
Page 20
<PAGE>
(10)(b) Stock Purchase Agreement between Westinghouse Electric
Corporation (Seller) and Rollins Environmental Services, Inc.
(Buyer) for National Electric, Inc. dated March 7, 1995 filed
as Exhibit 2 to the Company's Current Report on Form 8-K filed
on June 13, 1995 and incorporated herein by reference.
(10)(c) Second Amendment to Stock Purchase Agreement (as referenced in
Exhibit (10)(b) above), dated May 15, 1997 among Westinghouse
Electric Corporation, Rollins Environmental Services, Inc. and
Laidlaw Inc., filed as Exhibit 4(m) to the Company's Form 10-Q
for the Quarter ended May 31, 1997, and incorporated herein by
reference.
(10)(d) Rollins Environmental Services, Inc. 1982 Incentive Stock
Option Plan filed with Amendment No. 1 to the Company's
Registration Statement No. 2-84139 on Form S-1 dated June 24,
1983 and incorporated herein by reference.
(10)(e) Rollins Environmental Services, Inc. 1993 Stock Option Plan
filed with the Company's Proxy Statement for the Annual Meeting
of Shareholders held January 28, 1994 and incorporated herein
by reference.
(10)(f) Company's 1997 Stock Option Plan, filed as Exhibit 4.4 to the
Company's Registration Statement No. 333-41859 on Form S-8
dated December 10, 1997 and incorporated herein by reference.
(10)(g) First Amendment to Company's 1997 Stock Option Plan, filed as
Exhibit (10)(g) to the Company's Form 10-Q dated January 14,
2000 and incorporated herein by reference.
(10)(h) Company's Director's Stock Option Plan, filed as Exhibit
4.5 to the Company's Registration Statement No. 333-41859 on
Form S-8 dated December 10, 1997 and incorporated herein by
reference.
(10)(i) First Amendment to Company's Director's Stock Option Plan filed
as Exhibit (10)(i) to the Company's Form 10-Q dated January 14,
2000 and incorporated herein by reference.
(10)(j) Stock Purchase Agreement dated February 6, 1997 among the
Company, Laidlaw Inc., and Laidlaw Transportation, Inc. filed
as Exhibit A to Annex A to the Definitive Proxy Statement on
Form DEF 14A filed on May 1, 1997 and incorporated herein by
reference.
(10)(k) Executive Bonus Plan for fiscal year 2000 filed as Appendix C
to the Definitive Proxy Statement on Form DEF 14A filed on
October 29, 1999 and incorporated herein by reference.
Page 21
<PAGE>
(10)(l) Company's U.S. Supplemental Executive Retirement Plan filed as
Exhibit 10(g) to the Company's 10-Q for the quarter ended
November 30, 1997, and incorporated herein by reference.
(10)(m) Form of Change of Control Agreement A-12-22.
(10)(n) Form of Change of Control Agreement A1 RB 11 30.
(10)(o) Form of Change of Control Agreement A2-12-22.
(10)(p) Form of Change of Control Agreement AAMB0120.
(10)(q) Form of Change of Control Agreement B-12-22.
(10)(r) Form of Change of Control Agreement C-12-22.
(10)(s) Form of Change of Control Agreement D-12-22.
99.1 Press Release of April 14, 2000
Page 22
Exhibit (10) (m)
SAFETY-KLEEN
CHANGE OF CONTROL SEVERANCE AGREEMENT
FirstName LastName
coc sk-a-12-22
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. - PURPOSES 1
ARTICLE II. - CERTAIN DEFINITIONS 1
2.1 Accrued Obligations 1
2.2 Agreement Term 1
2.3 Article 2
2.4 Beneficial owner 2
2.5 Cause 2
2.6 Change of Control 2
2.7 Code 2
2.8 Disability 2
2.9 Effective Date 2
2.10 Good Reason 3
2.11 Gross-up Payment 3
2.12 Imminent Change of Control Date 3
2.13 IRS 3
2.14 1934 Act 3
2.15 Notice of Termination 3
2.16 Plans 3
2.17 Policies 3
2.18 Post-Change Period 3
2.19 SEC 3
2.20 Section 3
2.21 Subsidiary 3
2.22 Termination Date 4
2.23 Termination Performance Period 4
2.24 Voting Securities 4
ARTICLE III. - POST-CHANGE PERIOD PROTECTIONS 4
3.1 Position and Duties 4
3.2 Compensation 5
3.3 Stock Options 7
3.4 Excess / Supplemental Plans 7
ARTICLE IV. - TERMINATION OF EMPLOYMENT 8
4.1 Disability 8
4.2 Death 8
4.3 Cause 8
4.4 Good Reason 9
ARTICLE V. - OBLIGATIONS OF THE COMPANY UPON TERMINATION 10
5.1 If by the Executive for Good Reason or by the Company
<PAGE>
Other Than for Cause or Disability 10
5.2 If by the Company for Cause 11
5.3 If by the Executive Other Than for Good Reason 12
5.4 If by the Company for Disability 12
5.5 If upon Death 12
5.6 Joint and Several Obligation 12
ARTICLE VI. - NON-EXCLUSIVITY OF RIGHTS 12
6.1 Waiver of Other Severance Rights 12
6.2 Other- Rights 12
ARTICLE VII. - CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY 13
7.1 Gross-up for Certain Taxes 13
7.2 Determination by the Executive 13
7.3 Additional Gross-up Amounts 14
7.4 Gross-up Multiple 14
7.5 Opinion of Counsel 15
7.6 Amount Increased or Contested 15
7.7 Refunds 16
7.8 Joint and Several Obligation 16
ARTICLE VIII. - EXPENSES AND INTEREST 16
8.1 Legal Fees and Other Expenses 16
8.2 Interest 17
ARTICLE IX. - NO SET-OFF OR MITIGATION 17
9.1 No Set-off by Company 17
9.2 No Mitigation 17
ARTICLE X. - CONFIDENTIALITY AND NON-COMPETITION 18
10.1 Confidentiality 18
10.2 Non-competition/ Non-Solicitation 18
10.3 Remedy 19
ARTICLE XI. - MISCELLANEOUS 19
11.1 No Assignability 19
11.2 Successors 19
11.3 Payments to Beneficiary 19
11.4 Non-alienation of Benefits 20
11.5 Severability 20
11.6 Amendments 20
11.7 Notices 20
11.8 Counterparts 21
11.9 Governing Law 21
11.10 Captions 21
<PAGE>
11.11 Tax Withholding 21
11.12 No Waiver 21
11.13 Entire Agreement 21
11.14 Cancellation 21
<PAGE>
SAFETY-KLEEN
CHANGE OF CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT dated as of October 5, 1999, is made among SAFETY- KLEEN
CORP., a Delaware corporation having its principal place of business in
Columbia, South Carolina (the "Company"), SAFETY-KLEEN SERVICES, INC., a
Delaware corporation having its principal place of business in Columbia, South
Carolina and a wholly owned subsidiary of the Company ("Services") and
(FirstName)(LastName) (the "Executive"), a resident of (State).
The Company, Services and the Executive agree that this agreement
supersedes any prior agreement between any of them which specifically provides
benefits upon a change in control of the Company or Services, and further agree
that, if benefits become payable to the Executive pursuant to Article V hereof,
such benefits will be in lieu of any other severance or termination benefits to
which the Executive otherwise would be entitled under any other severance or
termination plan, policy or arrangement of the Company or Services.
ARTICLE I.
PURPOSES
The Board of Directors of the Company (the "Board") and the Board of
Directors of Services have determined that it is in the best interests of the
Company and its stockholders, and of Services, to assure that the Company and
Services will have the continued service of the Executive, despite the
possibility or occurrence of a change of control of the Company or Services. The
Board believes it is imperative to reduce the distraction of the Executive that
would result from the personal uncertainties caused by a pending or threatened
change of control, to encourage the Executive's full attention and dedication to
the Company and Services, and to provide the Executive with compensation and
benefits arrangements upon a change of control which ensure that the
expectations of the Executive will be satisfied and are competitive with those
of similarly-situated corporations. This Agreement is intended to accomplish
these objectives.
ARTICLE II.
CERTAIN DEFINITIONS
When used in this Agreement, the terms specified below shall have the
following meanings:
2.1 "Accrued Obligations" -- see Section 5.3.
2.2 "Agreement Term" means the period commencing on the date of this
Agreement and ending on the date which is twelve (12) months following the date
that both
1
<PAGE>
the Company and Services give notice of cancellation pursuant to Section 11.14
hereof (the "Expiration Date"); provided, however, that if an Imminent Change of
Control Date occurs before the Expiration Date, then the Agreement Term shall
automatically extend to a date which is twelve (12) months after the date of the
Imminent Change of Control Date: and provided further, that if a Change of
Control occurs before the Expiration Date, the Expiration Date shall
automatically be extended to the last day of the Post-Change Period. 2.3
"Article" means an article of this Agreement.
2.4 "Beneficial owner" means such term as defined in Rule 13d-3 of the
SEC under the 1934 Act.
2.5 "Cause" - see Section 4.3(b).
2.6 "Change of Control" means, except as otherwise provided below, the
occurrence of any of the following:
a. (X) any person (as such term is used in Rule 13(d)- 5 of
the SEC under the 1934 Act) or group (as such term is defined in
Section 13(d) of the 1934 Act), other than a Subsidiary or any employee
benefit plan (or related trust) of the Company or a Subsidiary, becomes
the beneficial owner of 15% or more of the common stock of the Company
or of Voting Securities representing 15% or more of the combined voting
power of all Voting Securities of the Company, (Y) Laidlaw Inc. ceases
to be the beneficial owner, directly or indirectly, of 43.6% or more of
the Voting Securities of the Company and (Z) another person or group
becomes the beneficial owner of Voting Securities of the Company which
represent a larger number of Voting Securities than those held by
Laidlaw Inc.
b. within a period of 24 months or less, the individuals who,
as of any date, constitute the Board (the "Incumbent Directors") cease
for any reason to constitute at least a majority of the Board unless at
the end of such period, the majority of individuals then constituting
the Board were nominated upon the recommendation of a majority of the
Incumbent Directors.
c. the sale or other disposition of all or substantially all
of the assets of the Company or Services.
d. the sale or other disposition by the Company of 50% or more
of the Voting Securities of Services or any other transaction which
results in any person, other than the Company or a subsidiary or any
employee benefit plan of the Company, becoming the beneficial owner of
50% or more of the Voting Securities of Services.
2.7 "Code" means the Internal Revenue Code of 1986, as amended.
2.8 "Disability" -- see Section 4.1(b).
2
<PAGE>
2.9 "Effective Date" means the first date on which a Change of Control
occurs during the Agreement Term. Despite anything in this Agreement to the
contrary, if the Company or Services terminates the Executive's employment
before the date of a Change of Control, and if the Executive reasonably
demonstrates that such termination of employment (a) was at the request of a
third party who had taken steps reasonably calculated to effect the Change of
Control or (b) otherwise arose in connection with or anticipation of the Change
of Control, then "Effective Date" shall mean the date immediately before the
date of such termination of employment.
2.10 "Employer" means whichever of the Company or Services is the
primary common-law employer of the Executive at the relevant time.
2.11 "Good Reason" -- see Section 4.4(b).
2.12 "Gross-up Payment" -- see Section 7.1.
2.13 "Imminent Change of Control Date" means any date on which occurs
(a) a presentation to the Company's stockholders generally or any of the
Company's directors or executive officers of a proposal or offer for a Change of
Control, or (b) the public announcement (whether by advertisement, press
release, press interview, public statement, SEC filing or otherwise) of a
proposal or offer for a Change of Control, and in case of either (a) or (b) such
proposal or offer remains effective and unrevoked.
2.14 "IRS" means the Internal Revenue Service.
2.15 "1934 Act" means the Securities Exchange Act of 1934.
2.16 "Notice of Termination" means a written notice given in accordance
with Section 11.7 which sets forth (a) the specific termination provision in
this Agreement relied upon by the party giving such notice, (b) in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under such termination provision and (c) if the
Termination Date is other than the date of receipt of such Notice of
Termination, the Termination Date.
2.17 "Plans" means plans, programs, policies or practices of the
Company and Services.
2.18 "Policies" means policies, practices or procedures of the Company
and Services.
2.19 "Post-Change Period" means the period commencing on the Effective
Date and ending on the third anniversary of such date.
2.20 "SEC" means the Securities and Exchange Commission.
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2.21 "Section" means, unless the context otherwise requires, a section
of this Agreement.
2.22 "Subsidiary" means a corporation as defined in Section 424(f) of
the Code with the Company being treated as the employer corporation for purposes
of this definition.
2.23 "Termination Date" means the date of receipt of the Notice of
Termination or any later date specified in such notice (which date shall be not
more than 15 days after the giving of such notice), as the case may be;
provided, however, that (a) if the Company or Services terminates the
Executive's employment other than for Cause or Disability, then the Termination
Date shall be the date of receipt of such Notice of Termination and (b) if the
Executive's employment is terminated by reason of death or Disability, then the
Termination Date shall be the date of death of the Executive or the "Disability
Effective Date" (as defined in Section 4.1), as the case may be.
2.24 "Termination Performance Period" - see Section 3.2(b)(2).
2.25 "Voting Securities" of a corporation means securities of such
corporation that are entitled to vote generally in the election of directors of
such corporation.
ARTICLE III.
POST-CHANGE PERIOD PROTECTIONS
3.1 Position and Duties.
a. During the Post-Change Period, (1) the Executive's position
with the Company and Services, (in the case of a Change of Control
involving the Company) or with Services (in the case of a Change of
Control involving Services) (including offices, titles, reporting
requirements and responsibilities), authority and duties shall be at
least commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the 90-day
period immediately before the Effective Date and (2) the Executive's
services shall be performed at the location where the Executive was
employed immediately before the Effective Date or any other location
less than 40 miles from such former location.
b. During the Post-Change Period (other than any periods of
vacation, sick leave or disability to which the Executive is entitled),
the Executive agrees to devote the Executive's full attention and time
to the business and affairs of the Company and Services and, to the
extent necessary to discharge the duties assigned to the Executive in
accordance with this Agreement, to use the Executive's best efforts to
perform faithfully and efficiently such duties. During the Post-Change
Period, the Executive may (1) serve on corporate, civic or charitable
boards or committees, (2) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (3) manage
personal investments, so long as such activities are consistent with
the Policies of the Company or Services at the Effective Date and do
not significantly
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interfere with the performance of the Executive's duties under this
Agreement. To the extent that any such activities have been conducted
by the Executive before the Effective Date and were consistent with the
Policies of the Company and Services at the Effective Date, the
continued conduct of such activities (or activities similar in nature
and scope) after the Effective Date shall not be deemed to interfere
with the performance of the Executive's duties under this Agreement.
3.2 Compensation.
a. Base Salary. During the Post-Change Period, the Company and
Services shall pay or cause to be paid to the Executive an annual base
salary in cash ("Guaranteed Base Salary"), which shall be paid in a
manner consistent with the Company's or Services' (as applicable to the
Executive) payroll practices in effect immediately before the Effective
Date at a rate at least equal to 12 times the highest monthly base
salary paid or payable to the Executive by the Company and Services in
respect of the 12-month period immediately before the Effective Date.
During the Post-Change Period, the Guaranteed Base Salary shall be
reviewed at least annually and shall be increased at any time and from
time to time as shall be substantially consistent with increases in
base salary awarded to other peer executives of the Company and
Services. Any increase in Guaranteed Base Salary shall not limit or
reduce any other obligation of the Company and Services to the
Executive under this Agreement. After any such increase, the Guaranteed
Base Salary shall not be reduced and the term "Guaranteed Base Salary"
shall thereafter refer to the increased amount.
b. Target Bonus. During the Post-Change Period, the Company
and Services shall pay or cause to be paid to the Executive a bonus
(the "Guaranteed Bonus") for each Performance Period which ends during
the Post-Change Period. "Performance Period" means each period of time
designated in accordance with any bonus arrangement of the Company or
Services ("Bonus Plan") which is based upon performance and approved by
the Board or any committee of the Board. The Guaranteed Bonus shall be
at least equal to the greatest of:
(1) the On Plan Bonus, which shall mean the cash bonus which
the Executive would accrue under any Bonus Plan for the Performance
Period for which the Guaranteed Bonus is awarded ("Current Performance
Period") as if the performance achieved 100% of plan established
pursuant to such Bonus Plan and the maximum level of the discretionary
portion is achieved;
(2) the Actual Bonus, which shall mean the cash bonus which
Executive would accrue under any Bonus Plan for the Current Performance
Period if the performance during the Current Performance Period were
measured by actual performance; provided, however, that for purposes of
Article V of this Agreement, the Actual Bonus for the Performance
Period in which the Termination Date occurred (the "Termination
Performance Period") shall not be less than the cash bonus which the
Executive would accrue under any Bonus Plan if performance during that
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Termination Performance Period were measured by the actual performance
during the Termination Performance Period before the Termination Date
projected to the last day of such Performance Period and the maximum
level of the discretionary portion is achieved; and
(3) the Historical Bonus, which shall mean the greatest bonus
that the Executive accrued under any Bonus Plan in the last three (3)
Performance Periods that ended before the Post-Change Period; provided,
however, that for purposes of Article V of this Agreement, the
Historical Bonus for the Performance Period in which the Termination
Date occurred shall not be less than the cash bonus that the Executive
accrued in the last Performance Period that ended before the
Termination Date.
c. Incentive, Savings and Retirement Plans. In addition to
Guaranteed Base Salary and Guaranteed Bonus payable as provided in this
Section, the Executive shall be entitled to participate during the
Post-Change Period in all incentive (including long-term incentives),
savings and retirement Plans applicable to other peer executives of the
Company and Services, but in no event shall such Plans provide the
Executive with incentive (including long-term incentives), savings and
retirement benefits which are less favorable, in the aggregate, than
the most favorable of those provided by the Company or Services to the
Executive or to peer executives under such Plans as in effect at any
time during the 90-day period immediately before the Effective Date.
d. Welfare Benefit Plans. During the Post-Change Period, the
Executive and the Executive's family shall be eligible to participate
in, and receive all benefits under, welfare benefit Plans provided by
the Company and Services (including, without limitation, medical,
prescription, dental, disability, salary continuance, individual life,
group life, dependent life, accidental death and travel accident
insurance Plans) and applicable to other peer executives of the Company
and Services and their families, but in no event shall such Plans
provide benefits which in any case are less favorable, in the
aggregate, than the most favorable of those provided to the Executive
or to peer executives under such Plans as in effect at any time during
the 90-day period immediately before the Effective Date.
e. Fringe Benefits. During the Post-Change Period, the
Executive shall be entitled to fringe benefits and other executive
perquisites in accordance with the most favorable Plans applicable to
peer executives of the Company and Services, but in no event shall such
Plans provide fringe benefits and other executive perquisites which in
any case are less favorable, in the aggregate, than the most favorable
of those provided by the Company and Services to the Executive or to
peer executives under such Plans in effect at any time during the
90-day period immediately before the Effective Date.
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f. Expenses. During the Post-Change Period, the Executive
shall be entitled to prompt reimbursement of all reasonable
employment-related expenses incurred by the Executive upon the
Company's or Services' (as applicable) receipt of accountings in
accordance with the most favorable Policies applicable to peer
executives of the Company and Services, but in no event shall such
Policies be less favorable, in the aggregate, than the most favorable
of those provided by the Company and Services to the Executive or to
peer executives under such Policies in effect at any time during the
90-day period immediately before the Effective Date.
g. Office and Support Staff. During the Post-Change Period,
the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal
secretarial and other assistance in accordance with the most favorable
Policies applicable to peer executives of the Company and Services, but
in no event shall such Policies be less favorable, in the aggregate,
than the most favorable of those provided by the Company and Services
to the Executive or to peer executives under such Policies in effect at
any time during the 90-day period immediately before the Effective
Date.
h. Vacation. During the Post-Change Period, the Executive
shall be entitled to paid vacation in accordance with the most
favorable Policies applicable to peer executives of the Company and
Services, but in no event shall such Policies be less favorable, in the
aggregate, than the most favorable of those provided by the Company and
Services to the Executive or to peer executives under such Policies in
effect at any time during the 90-day period immediately before the
Effective Date.
3.3 Stock Options.
In addition to the other benefits provided in this Section, on the
Effective Date, the Employer shall pay to the Executive a lump-sum cash payment
equal to the spread (fair market value over exercise price) of all outstanding
options granted to the Executive for shares of common stock of the Company
whether vested or not vested on the Effective Date. Whichever of the Company and
Services is not the Employer, shall be jointly and severally liable for the
obligation of the Employer under this Section 3.3.
3.4 Excess/Supplemental Plans.
In addition to the other benefits provided in this Section, on the
Effective Date, the Employer shall pay to Executive an amount equal to the value
(determined using (i) the interest rate published by the PBGC, as of the
calendar month immediately prior to the Effective Date, for the specific purpose
of determining the present value of lump sum benefits as discussed in 29 C.F.R.
4044 and (ii) the UP 84 Mortality Table) of the Executive's accrued benefits
under (1) the Safety-Kleen Supplemental Executive Retirement Plan, or (2) any
such successor plan or other nonqualified unfunded retirement Plan as may be in
effect as of (or as may have been in effect at any time during the 90-day period
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immediately before) the Effective Date (the "Excess/Supplemental Plans"),
irrespective ofwhether or not Executive is vested therein, and without any
reduction for early retirement, early payout and social security benefits, and
taking into account for benefit accrual purposes, the Executive's entire period
of service with the Company and its affiliates as reflected on the Company's
Human Resources database. Whichever of the Company and Services is not the
Employer, shall be jointly and severally liable for the obligation of the
Employer under this Section 3.3.
ARTICLE IV.
TERMINATION OF EMPLOYMENT
4.1 Disability.
a. During the Post-Change Period, the Employer may terminate
the Executive's employment upon the Executive's Disability (as defined
in Section 4.1(b)) by giving the Executive or his legal representative,
as applicable, (1) written notice in accordance with Section 11.7 of
the Employer's intention to terminate the Executive's employment
pursuant to this Section and (2) a certification of the Executive's
Disability by a physician selected by the Employer or its insurers and
reasonably acceptable to the Executive or the Executive's legal
representative. The Executive's employment shall terminate effective on
the 30th day (the 'Disability Effective Date') after the Executive's
receipt of such notice unless, before the Disability Effective Date,
the Executive shall have resumed the full-time performance of the
Executive's duties.
b. "Disability" means any medically determinable physical or
mental impairment that has lasted for a continuous period of not less
than six months and can be expected to be permanent or of indefinite
duration. and that renders the Executive unable to perform the
essential functions required under this Agreement with or without
reasonable accommodation.
4.2 Death. The Executive's employment shall terminate automatically
upon the Executive's death during the Post-Change Period.
4.3 Cause.
a. During the Post-Change Period, the Employer may terminate
the Executive's employment for Cause.
b. "Cause" means any of the following: (i) conviction of the
Executive of, or the Executive's pleading guilty or nolo contendere to,
any felony which includes as an element of the crime a premeditated
intention to commit the act, (ii) Executive's inability to perform his
duties due to habitual alcohol or drug addiction, (iii) serious
misconduct involving dishonesty in the course of Executive's
employment, or (iv) the Executive's habitual neglect of his duties;
except that Cause shall not mean:
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(1) bad judgment or negligence other than habitual neglect of
duty;
(2) any act or omission believed by the Executive in good
faith to have been in or not opposed to the interest of the Company and
Services (without intent of the Executive to gain, directly or
indirectly, a profit to which the Executive was not legally entitled);
(3) any act or omission with respect to which a determination
could properly have been made by the Board that the Executive met the
applicable standard of conduct for indemnification or reimbursement
under the Company's or Services' by-laws, any applicable
indemnification agreement, or applicable law, in each case in effect at
the time of such act or omission; or
(4) any act or omission with respect to which notice of
termination of employment of the Executive is given more than 12 months
after the earliest date on which any member of the Board, not a party
to the act or omission, knew or should have known of such act or
omission.
c. Any termination of the Executive's employment by the
Employer for Cause shall be communicated to the Executive by a Notice
of Termination.
4.4 Good Reason.
a. During the Post-Change Period, the Executive may terminate
his or her employment for Good Reason.
b. "Good Reason" means any of the following:
(1) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including offices,
titles, reporting requirements or responsibilities), authority or
duties as contemplated by Section 3.1 (a)(1), or any other action by
the Company or Services which results in a diminution on or other
material adverse change in such position, authority or duties;
(2) any failure by the Company or Services to comply with any
of the provisions of Article III;
(3) the Company's or Services' requiring the Executive to be
based at any office or location other than the location described in
Section 3.1(a)(2);
(4) any other material adverse change to the terms and
conditions of the Executive's employment; or
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(5) any purported termination by the Employer of the
Executive's employment other than as expressly permitted by this
Agreement (any such purported termination shall not be effective for
any other purpose under this Agreement).
Any reasonable determination of "Good Reason" made in good
faith by the Executive shall be conclusive.
c. Any termination of employment by the Executive for Good
Reason shall be communicated to the Employer by a Notice of
Termination. A passage of time prior to delivery of a Notice of
Termination or a failure by the Executive to include in the Notice of
Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Executive under this
Agreement or preclude the Executive from asserting such fact or
circumstance in enforcing rights under this Agreement.
ARTICLE V.
OBLIGATIONS OF THE EMPLOYER UPON TERMINATION
5.1 If by the Executive for Good Reason or by the Employer Other Than
for Cause or Disability. If, during the Post-Change Period, the Employer shall
terminate Executive's employment other than for Cause or Disability, or if the
Executive shall terminate employment for Good Reason, the Employer shall
immediately pay the Executive, in addition to all vested rights arising from the
Executive's employment as specified in Article III, a cash amount equal to the
sum of the following amounts:
a. to the extent not previously paid, the Guaranteed Base
Salary and any accrued vacation pay through the Termination Date;
b. the difference between (1) the product of (A) the
Guaranteed Bonus, multiplied by (B) a fraction, the numerator of which
is the number of days in the Termination Performance Period which
elapsed before the Termination Date, and the denominator of which is
the total number of days in the Termination Performance Period, and (2)
the amount of any Guaranteed Bonus previously paid to the Executive
with respect to the Termination Performance Period;
c. all amounts previously deferred by or an accrual to the
benefit of the Executive under any nonqualified deferred compensation
or pension plan, together with any accrued earnings thereon, and not
yet paid by the Company or Services;
d. an amount equal to the product of (1) three (3) multiplied
by (2) the sum of (A) the Guaranteed Base Salary and (B) the Guaranteed
Bonus;
e. an amount equal to the sum of the value of the unvested
portion of the Executive's accounts or accrued benefits under any
qualified plan maintained by the
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Company or Services, as of the Termination Date;
f. if the Company or Services maintains any cash-based long
term incentive bonus plan or arrangement, an amount in satisfaction of
the Company's or Services (as applicable) obligation to the Executive
under such plan or arrangement equal to the amount which would be
payable to the Executive if (i) the Company or Services (as applicable)
attained target performance over the entire performance period and (ii)
the Executive had remained employed during the entire performance
period;
g. the difference between (1) an amount equal to the value
(determined using the actuarial assumptions then applied by the Pension
Benefit Guaranty Corporation for determining immediate annuity present
values) of the Executive's accrued benefits under the
Excess/Supplemental Plans (taking into account for benefit accrual
purposes the Executive's entire period of service with the Company and
its affiliates as reflected on the Company's Human Resources database)
calculated as though the Executive (A) continued to accrue benefits
under the Excess/Supplemental Plans for a period of three years after
the Termination Date, and (B) received compensation during each year of
such three-year period equal to the sum of the Guaranteed Base Salary
and the highest Guaranteed Bonus paid (or payable) to the Executive in
the three years preceding the Termination Date, and (C) if Executive
has at least ten (10) years of service with the Company or is 55 years
of age or older, Executive were three (3) years older than his age at
the Termination Date and (2) the amount actually previously paid to
Executive pursuant to Section 3.4; provided however, that the amount
computed under this paragraph shall not be reduced for early
retirement, early payout and social security benefits; further
provided, however, that such amount shall be paid irrespective of
whether Executive is vested in any of the Excess/ Supplemental Plans;
and
h. pay Executive outplacement services, to a maximum of
$25,000.
Until the third anniversary of the Termination Date or such
later date as any Plan of the Company or Services may specify, the
Employer shall continue to provide to the Executive and shall provide
to the Executive's family welfare benefits (including, without
limitation, medical, prescription, dental, disability, salary
continuance, individual life, group life, accidental death and travel
accident insurance plans and programs), fringe benefits and other
executive perquisites, which are at least as favorable as the most
favorable Plans of the Company and Services applicable to Executive and
other peer executives and their families as of the Termination Date,
but which are in no event less favorable than the most favorable Plans
of the Company and Services applicable to the Executive and other peer
executives and their families during the 90-day period immediately
before the Effective Date. The cost to the Executive of such welfare
benefits shall not exceed the cost of such benefits to the Executive
immediately before the Termination Date or, if less, the Effective
Date. Notwithstanding the foregoing, if the Executive is covered under
any medical, life, or disability insurance plan(s)
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provided by a subsequent employer, then the amount of coverage required
to be provided by the Employer hereunder shall be secondary to the
coverage provided by the subsequent employer's medical, life, or
disability insurance plan(s). The Executive's rights under this Section
shall be in addition to, and not in lieu of, any post-termination
continuation coverage or conversion rights the Executive may have
pursuant to applicable law, including without limitation continuation
coverage required by Section 4980B of the Code and Section 601 et. seq.
of the Employee Retirement Income Security Act of 1974, as amended.
5.2 If by the Employer for Cause. If the Employer terminates the
Executive's employment for Cause during the Post-Change Period, this Agreement
shall terminate without further obligation by the Employer to the Executive,
other than the obligation immediately to pay the Executive in cash the
Executive's Guaranteed Base Salary through the Termination Date, plus the amount
of any compensation previously deferred by the Executive, plus any accrued
vacation pay, in each case to the extent not previously paid.
5.3 If by the Executive Other Than for Good Reason. If the Executive
terminates employment during the Post-Change Period other than for Good Reason,
Disability or death, this Agreement shall terminate without further obligations
by the Employer, other than the obligation immediately to pay the Executive in
cash all amounts specified in clauses (a), (b) and (c) of the first sentence of
Section 5.1 (such amounts collectively, the "Accrued Obligations").
5.4 If by the Employer for Disability. If the Employer terminates the
Executive's employment by reason of the Executive's Disability during the
Post-Change Period, this Agreement shall terminate without further obligations
to the Executive, other than
(a) the Employer's obligation immediately to pay the Executive
in cash all Accrued Obligations, and
(b) the Executive's right after the Disability Effective Date
to receive disability and other benefits at least equal to the greater
of (1) those provided under the most favorable disability Plans
applicable to peer executives of the Company or Services in effect
immediately before the Termination Date or (2) those provided under the
most favorable disability Plans of the Company and Services in effect
at any time during the 90-day period immediately before the Effective
Date.
5.5 If upon Death. If the Executive's employment is terminated by
reason of the Executive's death during the Post-Change Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than the obligation of the Employer
immediately to pay the Executive's estate or beneficiary in cash all Accrued
Obligations. Despite anything in this Agreement to the contrary, the Executive's
family shall be entitled to receive benefits at least equal to the most
favorable benefits provided by the Company and Services to the surviving
families of peer executives of the Company or Services under such Plans, but in
no event shall such Plans provide benefits which in each case are less
favorable, in the aggregate, than the most favorable of
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those provided by the Company and Services to the Executive under such Plans in
effect at any time during the 90-day period immediately before the Effective
Date.
5.6 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article V.
ARTICLE VI.
NON-EXCLUSIVITY OF RIGHTS
6.1 Waiver of Other Severance Rights. To the extent that payments are
made to the Executive pursuant to Section 5.1, the Executive hereby waives the
right to receive severance payments under any other Plan or agreement of the
Company or Services.
6.2 Other Rights. Except as provided in Section 6.1 and in the second
paragraph of this Agreement, this Agreement shall not prevent or limit the
Executive's continuing or future participation in any benefit, bonus, incentive
or other Plans, provided by the Company or any of its Subsidiaries and for which
the Executive may qualify, nor shall this Agreement limit or otherwise affect
such rights as the Executive may have under any other agreements with the
Company or any of its Subsidiaries. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any Plan of the Company or
any of its Subsidiaries and any other payment or benefit required by law at or
after the Termination Date shall be payable in accordance with such Plan or
applicable law except as expressly modified by this Agreement.
ARTICLE VII.
CERTAIN ADDITIONAL PAYMENTS BY THE EMPLOYER
7.1 Gross-up for Certain Taxes. If it is determined (by the reasonable
computation of the Employer's independent auditors, which determinations shall
be certified to by such auditors and set forth in a written certificate
("Certificate") delivered to the Executive) that any benefit received or deemed
received by the Executive from the Company or Services pursuant to this
Agreement or otherwise (collectively, the "Payments") is or will become subject
to any excise tax under Section 4999 of the Code or any similar tax payable
under any United States federal, state, local or other law (such excise tax and
all such similar taxes collectively, "Excise Taxes"), then the Employer shall,
immediately after such determination, pay the Executive an amount (the "Gross-up
Payment") equal to the product of
(a) the amount of such Excise Taxes
multiplied by
(b) the Gross-up Multiple (as defined in Section 7.4).
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The Gross-up Payment is intended to compensate the Executive for the
Excise Taxes and any federal, state, local or other income or excise taxes or
other taxes payable by the Executive with respect to the Gross-up Payment.
The Executive or the Employer may at any time request the preparation
and delivery to the Executive of a Certificate. The Employer shall, in addition
to complying with Section 7.2, cause all determinations and certifications under
the Article to be made as soon as reasonably possible and in adequate time to
permit the Executive to prepare and file the Executive's individual tax returns
on a timely basis.
7.2 Determination by the Executive.
a. If the Employer shall fail to deliver a Certificate to the
Executive (and to pay to the Executive the amount of the Gross-up
Payment, if any) within 14 days after receipt from the Executive of a
written request for a Certificate, or if at any time following receipt
of a Certificate the Executive disputes the amount of the Gross-up
Payment set forth therein, the Executive may elect to demand the
payment of the amount which the Executive, in accordance with an
opinion of counsel to the Executive ("Executive Counsel Opinion"),
determines to be the Gross-up Payment. Any such demand by the Executive
shall be made by delivery to the Employer of a written notice which
specifies the Gross-up Payment determined by the Executive and an
Executive Counsel Opinion regarding such Gross-up Payment (such written
notice and opinion collectively, the "Executive's Determination").
Within 14 days after delivery of the Executive's Determination to the
Employer, the Employer shall either (1 ) pay the Executive the Gross-up
Payment set forth in the Executive's Determination (less the portion of
such amount, if any, previously paid to the Executive by the Employer)
or (2) deliver to the Executive a Certificate specifying the Gross-up
Payment determined by the Employer's independent auditors, together
with an opinion of the Employer's counsel (" Employer Counsel
Opinion"), and pay the Executive the Gross-up Payment specified in such
Certificate. If for any reason the Employer fails to comply with clause
(2) of the preceding sentence, the Gross-up Payment specified in the
Executive's Determination shall be controlling for all purposes.
b. If the Executive does not make a request for, and the
Employer does not deliver to the Executive, a Certificate, the Employer
shall, for purposes of Section 7.3, be deemed to have determined that
no Gross-up Payment is due.
7.3 Additional Gross-up Amounts. If, despite the initial conclusion of
the Employer and/or the Executive that certain Payments are neither subject to
Excise Taxes nor to be counted in determining whether other Payments are subject
to Excise Taxes (any such item, a "Non-Parachute Item"), it is later determined
(pursuant to the subsequently-enacted provisions of the Code, final regulations
or published rulings of the IRS, final judgment of a court of competent
jurisdiction or the Employer's independent auditors) that any of the
Non-Parachute Items are subject to Excise Taxes, or are to be counted in
determining whether any
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Payments are subject to Excise Taxes, with the result that the amount of Excise
Taxes payable by the Executive is greater than the amount determined by the
Employer or the Executive pursuant to Section 7.1 or 7.2, as applicable, then
the Employer shall pay the Executive an amount (which shall also be deemed a
Gross-up Payment) equal to the product of
(a) the sum of (1) such additional Excise Taxes and (2) any
interest, fines, penalties, expenses or other costs incurred by the
Executive as a result of having taken a position in accordance with a
determination made pursuant to Section 7.1
multiplied by
(b) the Gross-up Multiple.
7.4 Gross-up Multiple. The Gross-up Multiple shall equal a fraction,
the numerator of which is one (1.0), and the denominator of which is one (1.0)
minus the sum, expressed as a decimal fraction, of the rates of all federal,
state, local and other income and other taxes and any Excise Taxes applicable to
the Gross-up Payment. (If different rates of tax are applicable to various
portions of a Gross-up Payment, the weighted average of such rates shall be
used.)
7.5 Opinion of Counsel. "Executive Counsel Opinion" means a legal
opinion of nationally recognized executive compensation counsel that there is a
reasonable basis to support a conclusion that the Gross-up Payment determined by
the Executive has been calculated in accord with this Article and applicable
law. " Employer Counsel Opinion" means a legal opinion of nationally recognized
executive compensation counsel that (a) there is a reasonable basis to support a
conclusion that the Gross-up Payment set forth of the Certificate of Employer's
independent auditors has been calculated in accord with this Article and
applicable law, and (b) there is no reasonable basis for the calculation of the
Gross-up Payment determined by the Executive.
7.6 Amount Increased or Contested. The Executive shall notify the
Employer in writing of any claim by the IRS or other taxing authority that, if
successful, would require the payment by the Employer of a Gross-up Payment.
Such notice shall include the nature of such claim and the date on which such
claim is due to be paid. The Executive shall give such notice as soon as
practicable, but no later than 10 business days, after the Executive first
obtains actual knowledge of such claim; provided, however, that any failure to
give or delay in giving such notice shall affect the Employer's obligations
under this Article only if and to the extent that such failure results in actual
prejudice to the Employer. The Executive shall not pay such claim less than 30
days after the Executive gives such notice to the Employer (or, if sooner, the
date on which payment of such claim is due). If the Employer notifies the
Executive in writing before the expiration of such period that it desires to
contest such claim, the Executive shall:
a. give the Employer any information that it reasonably
requests relating to such claim,
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b. take such action in connection with contesting such claim
as the Employer reasonably requests in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Employer,
c. cooperate with the Employer in good faith to contest such
claim, and
d. permit the Employer to participate in any proceedings
relating to such claim;
provided, however, that the Employer shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax, including related interest and penalties, imposed as a
result of such representation and payment of costs and expenses.
Without limiting the foregoing, the Employer shall control all
proceedings in connection with such contest and, at its sole option,
may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct the Executive to pay
the tax claimed and sue for a refund or contest the claim in any
permissible manner. The Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Employer shall
determine; provided, however, that if the Employer directs the
Executive to pay such claim and sue for a refund, the Employer shall
advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify the Executive, on an after-tax
basis, for any Excise Tax or income tax, including related interest or
penalties, imposed with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. The Employer's control of the contest shall be
limited to issues with respect to which a Gross-up Payment would be
payable. The Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the IRS or other taxing
authority.
7.7 Refunds. If, after the receipt by the Executive of an amount
advanced by the Employer pursuant to Section 7.6, the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Employer's complying with the requirements of Section 7.6) promptly pay
the Employer the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Employer pursuant to Section 7.6, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Employer does not notify the Executive in
writing of its intent to contest such determination before the expiration of 30
days after such determination, then such
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advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-up
Payment required to be paid. Any contest of a denial of refund shall be
controlled by Section 7.6.
7.8 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article VII. In the event of any assertion of liability
under this Section 7.8 against whichever of the Company or Services is not the
Employer, the party against which such liability is asserted shall succeed to
all of the rights and obligations of the Employer under Article VII.
ARTICLE VIII.
EXPENSES AND INTEREST
8.1 Legal Fees and Other Expenses.
a. If the Executive incurs legal, accounting and other fees or
other expenses in a good faith effort to obtain benefits under this
Agreement (including, without limitation, the fees and other expenses
of the Executive's legal counsel and the accounting and other fees and
expenses in connection with the delivery of the Opinion referred to in
Article VII), regardless of whether the Executive ultimately prevails,
the Employer shall reimburse the Executive on a monthly basis upon the
written request for such fees and expenses to the extent not reimbursed
under the Company's and Services' officers and directors liability
insurance policy, if any. The existence of any controlling case or
controlling regulatory law which is directly inconsistent with the
position taken by the Executive shall be evidence that the Executive
did not act in good faith.
b. Reimbursement of legal fees and expenses shall be made
monthly upon the written submission of a request for reimbursement
together with evidence that such fees and expenses are due and payable
or were paid by the Executive. If the Employer shall have reimbursed
the Executive for legal fees and expenses and it is later determined
that the Executive was not acting in good faith, all amounts paid on
behalf of, or reimbursed to, the Executive shall be promptly refunded
to the Employer.
8.2 Interest. If the Employer does not pay any amount due to the
Executive under this Agreement within three days after such amount became due
and owing, interest shall accrue on such amount from the date it became due and
owing until the date of payment at a annual rate equal to two percent (2.0%)
above the base commercial lending rate announced by The Bank of America in
effect from time to time during the period of such nonpayment.
8.3 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article VIII. The right of refund referred to in the
last sentence of Section 8.1 b. shall
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inure to whichever of the Company or Services originally paid the reimbursement
to the Executive.
ARTICLE IX.
NO SET-OFF OR MITIGATION
9.1 No Set-off by Company or Services. The Executive's right to receive
when due the payments and other benefits provided for under this Agreement is
absolute, unconditional and subject to no set-off, counterclaim or legal or
equitable defense. Time is of the essence in the performance by the Company and
Services of their obligations under this Agreement. Any claim which the Company
or Services may have against the Executive, whether for a breach of this
Agreement or otherwise, shall be brought in a separate action or proceeding and
not as part of any action or proceeding brought by the Executive to enforce any
rights against the Company or Services under this Agreement.
9.2 No Mitigation. The Executive shall not have any duty to mitigate
the amounts payable by the Company or Services under this Agreement by seeking
new employment following termination. Except as specifically otherwise provided
in this Agreement, all amounts payable pursuant to this Agreement shall be paid
without reduction regardless of any amounts of salary, compensation or other
amounts which may be paid or payable to the Executive as the result of the
Executive's employment by another employer.
ARTICLE X.
CONFIDENTIALITY AND NONCOMPETITION
10.1 Confidentiality. Executive acknowledges that it is the policy of
the Company and its Subsidiaries to maintain as secret and confidential all
valuable and unique information and techniques acquired, developed or used by
the Company and its Subsidiaries relating to their business, operations,
employees and customers, which gives the Company and its Subsidiaries a
competitive advantage in the businesses in which the Company and its
Subsidiaries are engaged ("Confidential Information"). Executive recognizes that
all such Confidential Information is the sole and exclusive property of the
Company and its Subsidiaries, and that disclosure of Confidential Information
would cause damage to the Company and its Subsidiaries. Executive agrees that,
except as required by the duties of his employment with the Company and/or its
Subsidiaries and except in connection with enforcing the Executive's rights
under this Agreement or if compelled by a court or governmental agency, he will
not, without the consent of the Company, disseminate or otherwise disclose any
Confidential Information obtained during his employment with the Company and/or
its Subsidiaries for so long as such information is valuable and unique.
10.2 Non-competition/ Non-solicitation.
a. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive will not at any time directly
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or indirectly, in any capacity, engage or participate in, or become
employed by or render advisory or consulting or other services in
connection with any Prohibited Business as defined in Section 10.2(d).
b. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive shall not make any financial investment, whether in the form
of equity or debt, or own any interest, directly or indirectly, in any
Prohibited Business. Nothing in this Section 10.2(b) shall, however,
restrict Executive from making any investment in any company whose
stock is listed on a national securities exchange or actively traded in
the over-the-counter market; provided that (1) such investment does not
give Executive the right or ability to control or influence the policy
decisions of any Prohibited Business, and (2) such investment does not
create a conflict of interest between Executive's duties hereunder and
Executive's interest in such investment.
c. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive shall not (1) employ any employee of the Company and/or its
Subsidiaries or (2) interfere with the Company's or any of its
Subsidiaries' relationship with, or endeavor to entice away from the
Company and/or its Subsidiaries any person, firm, corporation, or other
business organization who or which at any time (whether before or after
the date of Executive's termination of employment), was an employee,
customer, vendor or supplier of, or maintained a business relationship
with, any business of the Company and/or its Subsidiaries which was
conducted at any time during the period commencing one year prior to
the termination of employment.
d. For the purpose of this Section 10.2, "Prohibited Business"
shall be defined as any entity and any branch, office or operation
thereof, which is a direct and material competitor of the Company and/
or its Subsidiaries wherever the Company and/ or its Subsidiaries does
business, in the United States or abroad.
10.3 Remedy. Executive and the Company specifically agree that, in the
event that Executive shall breach his obligations under this Article X, the
Company and its Subsidiaries will suffer irreparable injury and no adequate
remedy for such breach, and shall be entitled to injunctive relief therefor, and
in particular, without limiting the generality of the foregoing, the Company
shall not be precluded from pursuing any and all remedies it may have at law or
in equity for breach of such obligations; provided, however, that such breach
shall not in any manner or degree whatsoever limit, reduce or otherwise affect
the obligations of the Company and Services under this Agreement, and in no
event shall an asserted breach of the Executive's obligations under this Article
X constitute a basis for deferring or withholding any amounts otherwise payable
to the Executive under this Agreement.
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ARTICLE XI.
MISCELLANEOUS
11.1 No Assignability. This Agreement is personal to the Executive and
without the prior written consent of the Company and Services 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.
11.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the Company, Services and their respective successors and assigns.
The Company and Services will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
their respective businesses or assets to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company or
Services, as applicable, would be required to perform it if no such succession
had taken place. Any successor to the business and/or assets of the Company or
Services which assumes or agrees to perform this Agreement by operation of law,
contract, or otherwise shall be jointly and severally liable with the Company
and Services under this Agreement as if such successor were the Company or
Services, as applicable.
11.3 Payments to Beneficiary. If the Executive dies before receiving
amounts to which the Executive is entitled under this Agreement, such amounts
shall be paid in a lump sum to the beneficiary designated in writing by the
Executive, or if none is so designated, to the Executive's estate.
11.4 Non-alienation of Benefits. Benefits payable under this Agreement
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, before actually being received by the
Executive, and any such attempt to dispose of any right to benefits payable
under this Agreement shall be void.
11.5 Severability. If any one or more articles, sections or other
portions of this Agreement are declared by any court or governmental authority
to be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any article, section or other portion not so declared to be unlawful
or invalid. Any article, section or other portion so declared to be unlawful or
invalid shall be construed so as to effectuate the terms of such article,
section or other portion to the fullest extent possible while remaining lawful
and valid.
11.6 Amendments. Except as provided in Sections 2.2 and 11.14 hereof,
this Agreement shall not be altered, amended or modified except by written
instrument executed by the Company, Services and Executive.
11.7 Notices. All notices and other communications under this Agreement
shall be in writing and delivered by hand or by first class registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
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If to the Executive:
FirstName LastName
Address1
City State PostalCode
If to the Company:
Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attention: Vice President, Administration
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If to Services:
Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attention: Vice President, Administration
or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
11.9 Governing Law. This Agreement shall be interpreted and construed
in accordance with the laws of the State of South Carolina without regard to its
choice of law principles.
11.10 Captions. The captions of this Agreement are not a part of the
provisions hereof and shall have no force or effect.
11.11 Tax Withholding. The Company and Services may withhold from any
amounts payable under this Agreement any federal, state or local taxes that are
required to be withheld pursuant to any applicable law or regulation.
11.12 No Waiver. The Executive's failure to insist upon strict
compliance with any provision of this Agreement shall not be deemed a waiver of
such provision or any other provision of this Agreement. A waiver of any
provision of this Agreement shall not be deemed a waiver of any other provision,
and any waiver of any default in any such provision shall not be deemed a waiver
of any later default thereof or of any other provision.
11.13 Entire Agreement. This Agreement contains the entire
understanding of the Company and Services and the Executive with respect to its
subject matter.
11.14 Cancellation. The Company and Services may, at any time prior to
a Change in Control, unilaterally cancel this Agreement on behalf of all parties
hereto by both of them (and not only one of them) notifying the Executive of
such cancellation in writing at least twelve (12) months prior to the effective
date of the cancellation, provided however that no such notice may be given
after an Imminent Change of Control Date.
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IN WITNESS WHEREOF, the Executive, Services and the Company have
executed this Agreement as of the date first above written.
-----------------------------------
FirstName LastName(the Executive)
SAFETY-KLEEN CORP.
By:
-----------------------------
Kenneth W. Winger
President / Chief Executive Officer
SAFETY-KLEEN SERVICES, INC.
By:
-----------------------------
Kenneth W. Winger
President / Chief Executive Officer
23
Exhibit (10) (n)
SAFETY-KLEEN
CHANGE OF CONTROL SEVERANCE AGREEMENT
Name
coc sk a1 rb 11 30
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. - PURPOSES 1
ARTICLE II. - CERTAIN DEFINITIONS 1
2.1 Accrued Obligations 1
2.2 Agreement Term 1
2.3 Article 2
2.4 Beneficial owner 2
2.5 Cause 2
2.6 Change of Control 2
2.7 Code 2
2.8 Disability 2
2.9 Effective Date 2
2.10 Good Reason 3
2.11 Gross-up Payment 3
2.12 Imminent Change of Control Date 3
2.13 IRS 3
2.14 1934 Act 3
2.15 Notice of Termination 3
2.16 Plans 3
2.17 Policies 3
2.18 Post-Change Period 3
2.19 SEC 3
2.20 Section 3
2.21 Subsidiary 3
2.22 Termination Date 4
2.23 Termination Performance Period 4
2.24 Voting Securities 4
ARTICLE III. - POST-CHANGE PERIOD PROTECTIONS 4
3.1 Position and Duties 4
3.2 Compensation 5
3.3 Stock Options 7
3.4 Excess / Supplemental Plans 7
ARTICLE IV. - TERMINATION OF EMPLOYMENT 8
4.1 Disability 8
4.2 Death 8
4.3 Cause 8
4.4 Good Reason 9
ARTICLE V. - OBLIGATIONS OF THE COMPANY UPON TERMINATION 10
5.1 If by the Executive for Good Reason or by the Company
Other Than for
<PAGE>
Cause or Disability 10
5.2 If by the Company for Cause 12
5.3 If by the Executive Other Than for Good Reason 12
5.4 If by the Company for Disability 12
5.5 If upon Death 12
5.6 Joint and Several Obligation 12
ARTICLE VI. - NON-EXCLUSIVITY OF RIGHTS 13
6.1 Waiver of Other Severance Rights 13
6.2 Other- Rights 13
ARTICLE VII. - CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY 13
7.1 Gross-up for Certain Taxes 13
7.2 Determination by the Executive 13
7.3 Additional Gross-up Amounts 14
7.4 Gross-up Multiple 14
7.5 Opinion of Counsel 15
7.6 Amount Increased or Contested 15
7.7 Refunds 16
7.8 Joint and Several Obligation 16
ARTICLE VIII. - EXPENSES AND INTEREST 16
8.1 Legal Fees and Other Expenses 16
8.2 Interest 17
ARTICLE IX. - NO SET-OFF OR MITIGATION 17
9.1 No Set-off by Company 17
9.2 No Mitigation 17
ARTICLE X. - CONFIDENTIALITY AND NON-COMPETITION 18
10.1 Confidentiality 18
10.2 Non-competition/ Non-Solicitation 18
10.3 Remedy 19
ARTICLE XI. - MISCELLANEOUS 19
11.1 No Assignability 19
11.2 Successors 19
11.3 Payments to Beneficiary 19
11.4 Non-alienation of Benefits 20
11.5 Severability 20
11.6 Amendments 20
11.7 Notices 20
11.8 Counterparts 21
11.9 Governing Law 21
11.10 Captions 21
<PAGE>
11.11 Tax Withholding 21
11.12 No Waiver 21
11.13 Entire Agreement 21
11.14 Cancellation 21
<PAGE>
SAFETY-KLEEN
CHANGE OF CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT dated as of October 5, 1999, is made among SAFETY- KLEEN
CORP., a Delaware corporation having its principal place of business in
Columbia, South Carolina (the "Company"), SAFETY-KLEEN SERVICES, INC., a
Delaware corporation having its principal place of business in Columbia, South
Carolina and a wholly owned subsidiary of the Company ("Services") and Name (the
"Executive"), a resident of IL.
The Company, Services and the Executive agree that this agreement
supersedes any prior agreement between any of them which specifically provides
benefits upon a change in control of the Company or Services, and further agree
that, if benefits become payable to the Executive pursuant to Article V hereof,
such benefits will be in lieu of any other severance or termination benefits to
which the Executive otherwise would be entitled under any other severance or
termination plan, policy or arrangement of the Company or Services.
ARTICLE I.
PURPOSES
The Board of Directors of the Company (the "Board") and the Board of
Directors of Services have determined that it is in the best interests of the
Company and its stockholders, and of Services, to assure that the Company and
Services will have the continued service of the Executive, despite the
possibility or occurrence of a change of control of the Company or Services. The
Board believes it is imperative to reduce the distraction of the Executive that
would result from the personal uncertainties caused by a pending or threatened
change of control, to encourage the Executive's full attention and dedication to
the Company and Services, and to provide the Executive with compensation and
benefits arrangements upon a change of control which ensure that the
expectations of the Executive will be satisfied and are competitive with those
of similarly-situated corporations. This Agreement is intended to accomplish
these objectives.
ARTICLE II.
CERTAIN DEFINITIONS
When used in this Agreement, the terms specified below shall have the
following meanings:
2.1 "Accrued Obligations" -- see Section 5.3.
2.2 "Agreement Term" means the period commencing on the date of this
Agreement and ending on the date which is twelve (12) months following the date
that both
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the Company and Services give notice of cancellation pursuant to Section 11.14
hereof (the "Expiration Date"); provided, however, that if an Imminent Change of
Control Date occurs before the Expiration Date, then the Agreement Term shall
automatically extend to a date which is twelve (12) months after the date of the
Imminent Change of Control Date: and provided further, that if a Change of
Control occurs before the Expiration Date, the Expiration Date shall
automatically be extended to the last day of the Post-Change Period.
2.3 "Article" means an article of this Agreement.
2.4 "Beneficial owner" means such term as defined in Rule 13d-3 of
the SEC under the 1934 Act.
2.5 "Cause" - see Section 4.3(b).
2.6 "Change of Control" means, except as otherwise provided below,
the occurrence of any of the following:
a. (X) any person (as such term is used in Rule 13(d)- 5 of the
SEC under the 1934 Act) or group (as such term is defined in Section
13(d) of the 1934 Act), other than a Subsidiary or any employee benefit
plan (or related trust) of the Company or a Subsidiary, becomes the
beneficial owner of 15% or more of the common stock of the Company or
of Voting Securities representing 15% or more of the combined voting
power of all Voting Securities of the Company, (Y) Laidlaw Inc. ceases
to be the beneficial owner, directly or indirectly, of 43.6% or more of
the Voting Securities of the Company and (Z) another person or group
becomes the beneficial owner of Voting Securities of the Company which
represent a larger number of Voting Securities than those held by
Laidlaw Inc.
b. within a period of 24 months or less, the individuals who,
as of any date, constitute the Board (the "Incumbent Directors") cease
for any reason to constitute at least a majority of the Board unless at
the end of such period, the majority of individuals then constituting
the Board were nominated upon the recommendation of a majority of the
Incumbent Directors.
c. the sale or other disposition of all or substantially all
of the assets of the Company or Services.
d. the sale or other disposition by the Company of 50% or more
of the Voting Securities of Services or any other transaction which
results in any person, other than the Company or a subsidiary or any
employee benefit plan of the Company, becoming the beneficial owner of
50% or more of the Voting Securities of Services.
2.7 "Code" means the Internal Revenue Code of 1986, as amended.
2.8 "Disability" -- see Section 4.1(b).
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2.9 "Effective Date" means the first date on which a Change of
Control occurs during the Agreement Term. Despite anything in this Agreement
to the contrary, if the Company or Services terminates the Executive's
employment before the date of a Change of Control, and if the Executive
reasonably demonstrates that such termination of employment (a) was at the
request of a third party who had taken steps reasonably calculated to effect the
Change of Control or (b) otherwise arose in connection with or anticipation of
the Change of Control, then "Effective Date" shall mean the date immediately
before the date of such termination of employment.
2.10 "Employer" means whichever of the Company or Services is the
primary common-law employer of the Executive at the relevant time.
2.11 "Good Reason" -- see Section 4.4(b).
2.12 "Gross-up Payment" -- see Section 7.1.
2.13 "Imminent Change of Control Date" means any date on which occurs
(a) a presentation to the Company's stockholders generally or any of the
Company's directors or executive officers of a proposal or offer for a Change of
Control, or (b) the public announcement (whether by advertisement, press
release, press interview, public statement, SEC filing or otherwise) of a
proposal or offer for a Change of Control, and in case of either (a) or (b) such
proposal or offer remains effective and unrevoked.
2.14 "IRS" means the Internal Revenue Service.
2.15 "1934 Act" means the Securities Exchange Act of 1934.
2.16 "Notice of Termination" means a written notice given in accord-
ance with Section 11.7 which sets forth (a) the specific termination provision
in this Agreement relied upon by the party giving such notice, (b) in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under such termination provision and (c) if the
Termination Date is other than the date of receipt of such Notice of
Termination, the Termination Date.
2.17 "Plans" means plans, zprograms, policies or practices of the
Company and Services.
2.18 "Policies" means policies, practices or procedures of the Company
and Services.
2.19 "Post-Change Period" means the period commencing on the Effective
Date and ending on the third anniversary of such date.
2.20 "SEC" means the Securities and Exchange Commission.
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2.21 "Section" means, unless the context otherwise requires, a section
of this Agreement.
2.22 "Subsidiary" means a corporation as defined in Section 424(f) of
the Code with the Company being treated as the employer corporation for purposes
of this definition.
2.23 "Termination Date" means the date of receipt of the Notice of
Termination or any later date specified in such notice (which date shall be not
more than 15 days after the giving of such notice), as the case may be;
provided, however, that (a) if the Company or Services terminates the
Executive's employment other than for Cause or Disability, then the Termination
Date shall be the date of receipt of such Notice of Termination and (b) if the
Executive's employment is terminated by reason of death or Disability, then the
Termination Date shall be the date of death of the Executive or the "Disability
Effective Date" (as defined in Section 4.1), as the case may be.
2.24 "Termination Performance Period" - see Section 3.2(b)(2).
2.25 "Voting Securities" of a corporation means securities of such
corporation that are entitled to vote generally in the election of directors of
such corporation.
ARTICLE III.
POST-CHANGE PERIOD PROTECTIONS
3.1 Position and Duties.
a. During the Post-Change Period, (1) the Executive's position
with the Company and Services, (in the case of a Change of Control
involving the Company) or with Services (in the case of a Change of
Control involving Services) (including offices, titles, reporting
requirements and responsibilities), authority and duties shall be at
least commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the 90-day
period immediately before the Effective Date and (2) the Executive's
services, except with respect to the Executive's relocation in
connection with the consolidation of Safety-Kleen offices in Columbia,
S.C., shall be performed at the location where the Executive was
employed immediately before the Effective Date or any other location
less than 40 miles from such former location.
b. During the Post-Change Period (other than any periods of
vacation, sick leave or disability to which the Executive is entitled),
the Executive agrees to devote the Executive's full attention and time
to the business and affairs of the Company and Services and, to the
extent necessary to discharge the duties assigned to the Executive in
accordance with this Agreement, to use the Executive's best efforts to
perform faithfully and efficiently such duties. During the Post-Change
Period, the Executive may (1) serve on corporate, civic or charitable
boards or committees, (2) deliver lectures, fulfill speaking
engagements or teach at educational institutions and
4
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(3) manage personal investments, so long as such activities are
consistent with the Policies of the Company or Services at the
Effective Date and do not significantly interfere with the performance
of the Executive's duties under this Agreement. To the extent that any
such activities have been conducted by the Executive before the
Effective Date and were consistent with the Policies of the Company and
Services at the Effective Date, the continued conduct of such
activities (or activities similar in nature and scope) after the
Effective Date shall not be deemed to interfere with the performance of
the Executive's duties under this Agreement.
3.2 Compensation.
a. Base Salary. During the Post-Change Period, the Company and
Services shall pay or cause to be paid to the Executive an annual base
salary in cash ("Guaranteed Base Salary"), which shall be paid in a
manner consistent with the Company's or Services' (as applicable to the
Executive) payroll practices in effect immediately before the Effective
Date at a rate at least equal to 12 times the highest monthly base
salary paid or payable to the Executive by the Company and Services in
respect of the 12-month period immediately before the Effective Date.
During the Post-Change Period, the Guaranteed Base Salary shall be
reviewed at least annually and shall be increased at any time and from
time to time as shall be substantially consistent with increases in
base salary awarded to other peer executives of the Company and
Services. Any increase in Guaranteed Base Salary shall not limit or
reduce any other obligation of the Company and Services to the
Executive under this Agreement. After any such increase, the Guaranteed
Base Salary shall not be reduced and the term "Guaranteed Base Salary"
shall thereafter refer to the increased amount.
b. Target Bonus. During the Post-Change Period, the Company
and Services shall pay or cause to be paid to the Executive a bonus
(the "Guaranteed Bonus") for each Performance Period which ends during
the Post-Change Period. "Performance Period" means each period of time
designated in accordance with any bonus arrangement of the Company or
Services ("Bonus Plan") which is based upon performance and approved by
the Board or any committee of the Board. The Guaranteed Bonus shall be
at least equal to the greatest of:
(1) the On Plan Bonus, which shall mean the cash bonus which the
Executive would accrue under any Bonus Plan for the Performance Period
for which the Guaranteed Bonus is awarded ("Current Performance
Period") as if the performance achieved 100% of plan established
pursuant to such Bonus Plan and the maximum level of the discretionary
portion is achieved;
(2) the Actual Bonus, which shall mean the cash bonus which
Executive would accrue under any Bonus Plan for the Current Performance
Period if the performance during the Current Performance Period were
measured by actual performance; provided, however, that for purposes of
Article V of this Agreement, the Actual Bonus for the Performance
Period in which the Termination Date occurred
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(the "Termination Performance Period") shall not be less than the cash
bonus which the Executive would accrue under any Bonus Plan if
performance during that Termination Performance Period were measured by
the actual performance during the Termination Performance Period before
the Termination Date projected to the last day of such Performance
Period and the maximum level of the discretionary portion is achieved;
and
(3) the Historical Bonus, which shall mean the greatest bonus
that the Executive accrued under any Bonus Plan in the last three (3)
Performance Periods that ended before the Post-Change Period; provided,
however, that for purposes of Article V of this Agreement, the
Historical Bonus for the Performance Period in which the Termination
Date occurred shall not be less than the cash bonus that the Executive
accrued in the last Performance Period that ended before the
Termination Date.
c. Incentive, Savings and Retirement Plans. In addition to
Guaranteed Base Salary and Guaranteed Bonus payable as provided in this
Section, the Executive shall be entitled to participate during the
Post-Change Period in all incentive (including long-term incentives),
savings and retirement Plans applicable to other peer executives of the
Company and Services, but in no event shall such Plans provide the
Executive with incentive (including long-term incentives), savings and
retirement benefits which are less favorable, in the aggregate, than
the most favorable of those provided by the Company or Services to the
Executive or to peer executives under such Plans as in effect at any
time during the 90-day period immediately before the Effective Date.
d. Welfare Benefit Plans. During the Post-Change Period, the
Executive and the Executive's family shall be eligible to participate
in, and receive all benefits under, welfare benefit Plans provided by
the Company and Services(including, without limitation, medical,
prescription, dental, disability, salary continuance, individual life,
group life, dependent life, accidental death and travel accident
insurance Plans) and applicable to other peer executives of the Company
and Services and their families, but in no event shall such Plans
provide benefits which in any case are less favorable, in the
aggregate, than the most favorable of those provided to the Executive
or to peer executives under such Plans as in effect at any time during
the 90-day period immediately before the Effective Date.
e. Fringe Benefits. During the Post-Change Period, the Execu-
tive shall be entitled to fringe benefits and other executive
perquisites in accordance with the most favorable Plans applicable to
peer executives of the Company and Services, but in no event shall such
Plans provide fringe benefits and other executive perquisites which in
any case are less favorable, in the aggregate, than the most favorable
of those provided by the Company and Services to the Executive or to
peer executives under such Plans in effect at any time during the
90-day period immediately before the Effective Date.
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f. Expenses. During the Post-Change Period, the Executive shall
be entitled to prompt reimbursement of all reasonable
employment-related expenses incurred by the Executive upon the
Company's or Services' (as applicable) receipt of accountings in
accordance with the most favorable Policies applicable to peer
executives of the Company and Services, but in no event shall such
Policies be less favorable, in the aggregate, than the most favorable
of those provided by the Company and Services to the Executive or to
peer executives under such Policies in effect at any time during the
90-day period immediately before the Effective Date.
g. Office and Support Staff. During the Post-Change Period,
the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal
secretarial and other assistance in accordance with the most favorable
Policies applicable to peer executives of the Company and Services, but
in no event shall such Policies be less favorable, in the aggregate,
than the most favorable of those provided by the Company and Services
to the Executive or to peer executives under such Policies in effect at
any time during the 90-day period immediately before the Effective
Date.
h. Vacation. During the Post-Change Period, the Executive
shall be entitled to paid vacation in accordance with the most
favorable Policies applicable to peer executives of the Company and
Services, but in no event shall such Policies be less favorable, in the
aggregate, than the most favorable of those provided by the Company and
Services to the Executive or to peer executives under such Policies in
effect at any time during the 90-day period immediately before the
Effective Date.
3.3 Stock Options.
In addition to the other benefits provided in this Section, on the
Effective Date, the Employer shall pay to the Executive a lump-sum cash
payment equal to the spread (fair market value over exercise price) of all
outstanding options granted to the Executive for shares of common stock of the
Company whether vested or not vested on the Effective Date. Whichever of the
Company and Services is not the Employer, shall be jointly and severally
liable for the obligation of the Employer under this Section 3.3.
3.4 Excess/Supplemental Plans. (Note: This Section 3.4 is applicable if
----------------------------------------
and only if your participation in the Safety-Kleen Supplemental Executive
- --------------------------------------------------------------------------------
Retirement Plan is approved by the Human Resources and Compensation Committee of
- --------------------------------------------------------------------------------
the Company's Board of Directors)
- ---------------------------------
In addition to the other benefits provided in this Section, on the
Effective Date, the Employer shall pay to Executive an amount equal to the value
(determined using (i) the interest rate published by the PBGC, as of the
calendar month immediately prior to the Effective Date, for the specific purpose
of determining the present value of lump sum benefits as discussed in 29 C.F.R.
4044 and (ii) the UP 84 Mortality Table) of the
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Executive's accrued benefits under (1) the Safety-Kleen Supplemental Executive
Retirement Plan, or (2) any such successor plan or other nonqualified unfunded
retirement Plan as may be in effect as of (or as may have been in effect at any
time during the 90-day period immediately before) the Effective Date (the
"Excess/Supplemental Plans"), irrespective of whether or not Executive is vested
therein, and without any reduction for early retirement, early payout and social
security benefits, and taking into account for benefit accrual purposes, the
Executive's period of service with the Company beginning July 1, 1998. Whichever
of the Company and Services is not the Employer, shall be jointly and severally
liable for the obligation of the Employer under this Section 3.3.
ARTICLE IV.
TERMINATION OF EMPLOYMENT
4.1 Disability.
a. During the Post-Change Period, the Employer may terminate
the Executive's employment upon the Executive's Disability (as defined
in Section 4.1(b)) by giving the Executive or his legal representative,
as applicable, (1) written notice in accordance with Section 11.7 of
the Employer's intention to terminate the Executive's employment
pursuant to this Section and (2) a certification of the Executive's
Disability by a physician selected by the Employer or its insurers and
reasonably acceptable to the Executive or the Executive's legal
representative. The Executive's employment shall terminate effective on
the 30th day (the 'Disability Effective Date') after the Executive's
receipt of such notice unless, before the Disability Effective Date,
the Executive shall have resumed the full-time performance of the
Executive's duties.
b. "Disability" means any medically determinable physical or
mental impairment that has lasted for a continuous period of not less
than six months and can be expected to be permanent or of indefinite
duration. and that renders the Executive unable to perform the
essential functions required under this Agreement with or without
reasonable accommodation.
4.2 Death. The Executive's employment shall terminate automatically
upon the Executive's death during the Post-Change Period.
4.3 Cause.
a. During the Post-Change Period, the Employer may terminate
the Executive's employment for Cause.
b. "Cause" means any of the following: (i) conviction of the
Executive of, or the Executive's pleading guilty or nolo contendere to,
any felony which includes as an element of the crime a premeditated
intention to commit the act, (ii) Executive's inability to perform his
duties due to habitual alcohol or drug addiction, (iii) serious
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misconduct involving dishonesty in the course of Executive's
employment, or (iv) the Executive's habitual neglect of his duties;
except that Cause shall not mean:
(1) bad judgment or negligence other than habitual neglect
of duty;
(2) any act or omission believed by the Executive in good
faith to have been in or not opposed to the interest of the
Company an d Services (without intent of the Executive to gain,
directly or indirectly, a profit to which the Executive was not
not legally entitled);
(3) any act or omission with respect to which a determina-
tion determination could properly have been made by the Board
that the Executive met the applicable standard of conduct for
indemnification or reimbursement under the Company's or
Services' by-laws, any applicable indemnification agreement, or
applicable law, in each case in effect at the time of such act
or omission; or
(4) any act or omission with respect to which notice of
termination of employment of the Executive is given more than 12
months after the earliest date on which any member of the
Board, not a party to the act or omission, knew or should have
known of such act or omission.
c. Any termination of the Executive's employment by the
Employer for Cause shall be communicated to the Executive by a Notice
of Termination.
4.4 Good Reason.
a. During the Post-Change Period, the Executive may terminate
his or her employment for Good Reason.
b. "Good Reason" means any of the following:
(1) the assignment to the Executive of any duties inconsis-
tent in any respect with the Executive's position (including
offices, titles, reporting requirements or responsibilities),
authority or duties as contemplated by Section 3.1 (a)(1), or
any other action by the Company or Services which results in a
diminution on or other material adverse change in such
position, authority or duties;
(2) any failure by the Company or Services to comply with
any of the provisions of Article III;
(3) the Company's or Services' requiring the Executive to
be based at any office or location other than the location
described in Section 3.1(a)(2);
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(4) any other material adverse change to the terms and
conditions of the Executive's employment; or
(5) any purported termination by the Employer of the
Executive's employment other than as expressly permitted by this
Agreement (any such purported termination shall not be effective
for any other purpose under this Agreement).
Any reasonable determination of "Good Reason" made in good faith by the
Executive shall be conclusive.
c. Any termination of employment by the Executive for Good
Reason shall be communicated to the Employer by a Notice of
Termination. A passage of time prior to delivery of a Notice of
Termination or a failure by the Executive to include in the Notice of
Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Executive under this
Agreement or preclude the Executive from asserting such fact or
circumstance in enforcing rights under this Agreement.
ARTICLE V.
OBLIGATIONS OF THE EMPLOYER UPON TERMINATION
5.1 If by the Executive for Good Reason or by the Employer Other
than for Cause or Disability. If, during the Post-Change Period, the Employer
shall terminate Executive's employment other than for Cause or Disability, or if
the Executive shall terminate employment for Good Reason, the Employer shall
immediately pay the Executive, in addition to all vested rights arising from the
Executive's employment as specified in Article III, a cash amount equal to the
sum of the following amounts:
a. to the extent not previously paid, the Guaranteed Base
Salary and any accrued vacation pay through the Termination Date;
b. the difference between (1) the product of (A) the Guaranteed
Bonus, multiplied by (B) a fraction, the numerator of which is the
number of days in the Termination Performance Period which elapsed
before the Termination Date, and the denominator of which is the total
number of days in the Termination Performance Period, and (2) the
amount of any Guaranteed Bonus previously paid to the Executive with
respect to the Termination Performance Period;
c. all amounts previously deferred by or an accrual to the
benefit of the Executive under any nonqualified deferred compensation
or pension plan, together with any accrued earnings thereon, and not
yet paid by the Company or Services;
d. an amount equal to the product of (1) three (3) multiplied
by (2) the sum of (A) the Guaranteed Base Salary and (B) the Guaranteed
Bonus;
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e. an amount equal to the sum of the value of the unvested
portion of the Executive's accounts or accrued benefits under any
qualified plan maintained by the Company or Services, as of the
Termination Date;
f. if the Company or Services maintains any cash-based long
term incentive bonus plan or arrangement, an amount in satisfaction of
the Company's or Services (as applicable) obligation to the Executive
under such plan or arrangement equal to the amount which would be
payable to the Executive if (i) the Company or Services (as applicable)
attained target performance over the entire performance period and (ii)
the Executive had remained employed during the entire performance
period;
g. (Note: This Section 5.1(g) is applicable if and only if your
------------------------------------------------------------
participation in the Safety-Kleen Supplemental Executive Retirement
-----------------------------------------------------------------------
Plan is approved by the Human Resouces and Compensation Committee of
-----------------------------------------------------------------------
the Company's Board of Directors) the difference between (1) an amount
---------------------------------
equal to the value (determined using the actuarial assumptions then
applied by the Pension Benefit Guaranty Corporation for determining
immediate annuity present values) of the Executive's accrued benefits
under the Excess/Supplemental Plans (taking into account for benefit
accrual purposes the Executive's period of service with the Company
beginning July 1, 1998) calculated as though the Executive (A)
continued to accrue benefits under the Excess/Supplemental Plans for a
period of three years after the Termination Date, and (B) received
compensation during each year of such three-year period equal to the
sum of the Guaranteed Base Salary and the highest Guaranteed Bonus paid
(or payable) to the Executive in the three years preceding the
Termination Date, and (C) if Executive were three (3) years older than
his age at the Termination Date and (2) the amount actually previously
paid to Executive pursuant to Section 3.4; provided however, that the
amount computed under this paragraph shall not be reduced for early
retirement, early payout and social security benefits; further
provided, however, that such amount shall be paid irrespective of
whether Executive is vested in any of the Excess/ Supplemental Plans;
and
h. pay Executive outplacement services, to a maximum of $25,000.
Until the third anniversary of the Termination Date or such
later date as any Plan of the Company or Services may specify, the
Employer shall continue to provide to the Executive and the provide to
the Executive's family welfare benefits (including, without limitation,
medical, prescription, dental, disability, salary continuance,
individual life, group life, accidental death and travel accident
insurance plans and programs), fringe benefits and other executive
perquisites, which are at least as favorable as the most favorable
Plans of the Company and Services applicable to Executive and other
peer executives and their families as of the Termination Date, but
which are in no event less favorable than the most favorable Plans of
the Company and Services applicable to the Executive and other peer
executives and their families during the 90-day period immediately
before the Effective Date. The cost to the Executive of such welfare
benefits shall not exceed the cost of such benefits to the Executive
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<PAGE>
immediately before the Termination Date or, if less, the Effective
Date. Notwithstanding the foregoing, if the Executive is covered under
any medical, life, or disability insurance plan(s) provided by a
subsequent employer, then the amount of coverage required to be
provided by the Employer hereunder shall be secondary to the coverage
provided by the subsequent employer's medical, life, or disability
insurance plan(s). The Executive's rights under this Section shall be
in addition to, and not in lieu of, any post-termination continuation
coverage or conversion rights the Executive may have pursuant to
applicable law, including without limitation continuation coverage
required by Section 4980B of the Code and Section 601 et. seq. of the
Employee Retirement Income Security Act of 1974, as amended.
5.2 If by the Employer for Cause. If the Employer terminates the
Executive's employment for Cause during the Post-Change Period, this Agreement
shall terminate without further obligation by the Employer to the Executive,
other than the obligation immediately to pay the Executive in cash the
Executive's Guaranteed Base Salary through the Termination Date, plus the amount
of any compensation previously deferred by the Executive, plus any accrued
vacation pay, in each case to the extent not previously paid.
5.3 If by the Executive Other Than for Good Reason. If the Executive
terminates employment during the Post-Change Period other than for Good Reason,
Disability or death, this Agreement shall terminate without further obligations
by the Employer, other than the obligation immediately to pay the Executive in
cash all amounts specified in clauses (a), (b) and (c) of the first sentence of
Section 5.1 (such amounts collectively, the "Accrued Obligations").
5.4 If by the Employer for Disability. If the Employer terminates
the Executive's employment by reason of the Executive's Disability during the
Post-Change Period, this Agreement shall terminate without further obligations
to the Executive, other than
(a) the Employer's obligation immediately to pay the Executive
in cash all Accrued Obligations, and
(b) the Executive's right after the Disability Effective Date to
receive disability and other benefits at least equal to the greater of
(1) those provided under the most favorable disability Plans applicable
to peer executives of the Company or Services in effect immediately
before the Termination Date or (2) those provided under the most
favorable disability Plans of the Company and Services in effect at any
time during the 90-day period immediately before the Effective Date.
5.5 If upon Death. If the Executive's employment is terminated by
reason of the Executive's death during the Post-Change Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than the obligation of the Employer
immediately to pay the Executive's estate or beneficiary in cash all Accrued
Obligations. Despite anything in this Agreement to the contrary, the Executive's
family shall be entitled to receive benefits at least equal to the most
favorable benefits
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<PAGE>
provided by the Company and Services to the surviving families of peer
executives of the Company or Services under such Plans, but in no event shall
such Plans provide benefits which in each case are less favorable, in the
aggregate, than the most favorable of those provided by the Company and Services
to the Executive under such Plans in effect at any time during the 90-day period
immediately before the Effective Date.
5.6 Joint and Several Obligation. Whichever of the Company and
Services is not the Employer shall be jointly and severally liable for the
obligations of the Employer under this Article V.
ARTICLE VI.
NON-EXCLUSIVITY OF RIGHTS
6.1 Waiver of Other Severance Rights. To the extent that payments
are made to the Executive pursuant to Section 5.1, the Executive hereby waives
the right to receive severance payments under any other Plan or agreement of the
Company or Services.
6.2 Other Rights. Except as provided in Section 6.1 and in the
second paragraph of this Agreement, this Agreement shall not prevent or limit
the Executive's continuing or future participation in any benefit, bonus,
incentive or other Plans, provided by the Company or any of its Subsidiaries and
for which the Executive may qualify, nor shall this Agreement limit or otherwise
affect such rights as the Executive may have under any other agreements with the
Company or any of its Subsidiaries. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any Plan of the Company or
any of its Subsidiaries and any other payment or benefit required by law at or
after the Termination Date shall be payable in accordance with such Plan or
applicable law except as expressly modified by this Agreement.
ARTICLE VII.
CERTAIN ADDITIONAL PAYMENTS BY THE EMPLOYER
7.1 Gross-up for Certain Taxes. If it is determined (by the reason-
able computation of the Employer's independent auditors, which determinations
shall be certified to by such auditors and set forth in a written certificate
("Certificate") delivered to the Executive) that any benefit received or deemed
received by the Executive from the Company or Services pursuant to this
Agreement or otherwise (collectively, the "Payments") is or will become subject
to any excise tax under Section 4999 of the Code or any similar tax payable
under any United States federal, state, local or other law (such excise tax and
all such similar taxes collectively, "Excise Taxes"), then the Employer shall,
immediately after such determination, pay the Executive an amount (the "Gross-up
Payment") equal to the product of
(a) the amount of such Excise Taxes
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multiplied by
(b) the Gross-up Multiple (as defined in Section 7.4).
The Gross-up Payment is intended to compensate the Executive for the
Excise Taxes and any federal, state, local or other income or excise taxes or
other taxes payable by the Executive with respect to the Gross-up Payment.
The Executive or the Employer may at any time request the preparation
and delivery to the Executive of a Certificate. The Employer shall, in addition
to complying with Section 7.2, cause all determinations and certifications under
the Article to be made as soon as reasonably possible and in adequate time to
permit the Executive to prepare and file the Executive's individual tax returns
on a timely basis.
7.2 Determination by the Executive.
a. If the Employer shall fail to deliver a Certificate to the
Executive (and to pay to the Executive the amount of the Gross-up
Payment, if any) within 14 days after receipt from the Executive of a
written request for a Certificate, or if at any time following receipt
of a Certificate the Executive disputes the amount of the Gross-up
Payment set forth therein, the Executive may elect to demand the
payment of the amount which the Executive, in accordance with an
opinion of counsel to the Executive ("Executive Counsel Opinion"),
determines to be the Gross-up Payment. Any such demand by the Executive
shall be made by delivery to the Employer of a written notice which
specifies the Gross-up Payment determined by the Executive and an
Executive Counsel Opinion regarding such Gross-up Payment (such written
notice and opinion collectively, the "Executive's Determination").
Within 14 days after delivery of the Executive's Determination to the
Employer, the Employer shall either (1 ) pay the Executive the Gross-up
Payment set forth in the Executive's Determination (less the portion of
such amount, if any, previously paid to the Executive by the Employer)
or (2) deliver to the Executive a Certificate specifying the Gross-up
Payment determined by the Employer's independent auditors, together
with an opinion of the Employer's counsel (" Employer Counsel
Opinion"), and pay the Executive the Gross-up Payment specified in such
Certificate. If for any reason the Employer fails to comply with clause
(2) of the preceding sentence, the Gross-up Payment specified in the
Executive's Determination shall be controlling for all purposes.
b. If the Executive does not make a request for, and the
Employer does not deliver to the Executive, a Certificate, the Employer
shall, for purposes of Section 7.3, be deemed to have determined that
no Gross-up Payment is due.
7.3 Additional Gross-up Amounts. If, despite the initial conclusion
of the Employer and/or the Executive that certain Payments are neither subject
to Excise Taxes nor to be
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<PAGE>
counted in determining whether other Payments are subject to Excise Taxes (any
such item, a "Non-Parachute Item"), it is later determined (pursuant to the
subsequently-enacted provisions of the Code, final regulations or published
rulings of the IRS, final judgment of a court of competent jurisdiction or the
Employer's independent auditors) that any of the Non-Parachute Items are subject
to Excise Taxes, or are to be counted in determining whether any Payments are
subject to Excise Taxes, with the result that the amount of Excise Taxes payable
by the Executive is greater than the amount determined by the Employer or the
Executive pursuant to Section 7.1 or 7.2, as applicable, then the Employer shall
pay the Executive an amount (which shall also be deemed a Gross-up Payment)
equal to the product of
(a) the sum of (1) such additional Excise Taxes and (2) any
interest, fines, penalties, expenses or other costs incurred by the
Executive as a result of having taken a position in accordance with a
determination made pursuant to Section 7.1
multiplied by
(b) the Gross-up Multiple.
7.4 Gross-up Multiple. The Gross-up Multiple shall equal a fraction,
the numerator of which is one (1.0), and the denominator of which is one (1.0)
minus the sum, expressed as a decimal fraction, of the rates of all federal,
state, local and other income and other taxes and any Excise Taxes applicable to
the Gross-up Payment. (If different rates of tax are applicable to various
portions of a Gross-up Payment, the weighted average of such rates shall be
used.)
7.5 Opinion of Counsel. "Executive Counsel Opinion" means a legal
opinion of nationally recognized executive compensation counsel that there is a
reasonable basis to support a conclusion that the Gross-up Payment determined by
the Executive has been calculated in accord with this Article and applicable
law. " Employer Counsel Opinion" means a legal opinion of nationally recognized
executive compensation counsel that (a) there is a reasonable basis to support a
conclusion that the Gross-up Payment set forth of the Certificate of Employer's
independent auditors has been calculated in accord with this Article and
applicable law, and (b) there is no reasonable basis for the calculation of the
Gross-up Payment determined by the Executive.
7.6 Amount Increased or Contested. The Executive shall notify the
Employer in writing of any claim by the IRS or other taxing authority that, if
successful, would require the payment by the Employer of a Gross-up Payment.
Such notice shall include the nature of such claim and the date on which such
claim is due to be paid. The Executive shall give such notice as soon as
practicable, but no later than 10 business days, after the Executive first
obtains actual knowledge of such claim; provided, however, that any failure to
give or delay in giving such notice shall affect the Employer's obligations
under this Article only if and to the extent that such failure results in actual
prejudice to the Employer. The Executive shall not pay such claim less than 30
days after the Executive gives such notice to the Employer (or, if sooner, the
date on which payment of such claim is due). If the Employer notifies the
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Executive in writing before the expiration of such period that it desires to
contest such claim, the Executive shall:
a. give the Employer any information that it reasonably
requests relating to such claim,
b. take such action in connection with contesting such claim as
the Employer reasonably requests in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Employer,
c. cooperate with the Employer in good faith to contest such
claim, and
d. permit the Employer to participate in any proceedings
relating to such claim; provided, however, that the Employer shall bear
and pay directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including related interest and penalties,
imposed as a result of such representation and payment of costs and
expenses. Without limiting the foregoing, the Employer shall control
all proceedings in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the
Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner. The Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as
the Employer shall determine; provided, however, that if the Employer
directs the Executive to pay such claim and sue for a refund, the
Employer shall advance the amount of such payment to the Executive, on
an interest-free basis and shall indemnify the Executive, on an
after-tax basis, for any Excise Tax or income tax, including related
interest or penalties, imposed with respect to such advance; and
further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to be due is limited
solely to such contested amount. The Employer's control of the contest
shall be limited to issues with respect to which a Gross-up Payment
would be payable. The Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the IRS or other taxing
authority.
7.7 Refunds. If, after the receipt by the Executive of an amount
advanced by the Employer pursuant to Section 7.6, the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Employer's complying with the requirements of Section 7.6) promptly pay
the Employer the amount of such refund (together
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with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Executive of an amount advanced by the Employer
pursuant to Section 7.6, a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Employer does not
notify the Executive in writing of its intent to contest such determination
before the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-up Payment
required to be paid. Any contest of a denial of refund shall be controlled by
Section 7.6.
7.8 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article VII. In the event of any assertion of liability
under this Section 7.8 against whichever of the Company or Services is not the
Employer, the party against which such liability is asserted shall succeed to
all of the rights and obligations of the Employer under Article VII.
ARTICLE VIII.
EXPENSES AND INTEREST
8.1 Legal Fees and Other Expenses.
a. If the Executive incurs legal, accounting and other fees or
other expenses in a good faith effort to obtain benefits under this
Agreement (including, without limitation, the fees and other expenses
of the Executive's legal counsel and the accounting and other fees and
expenses in connection with the delivery of the Opinion referred to in
Article VII), regardless of whether the Executive ultimately prevails,
the Employer shall reimburse the Executive on a monthly basis upon the
written request for such fees and expenses to the extent not reimbursed
under the Company's and Services' officers and directors liability
insurance policy, if any. The existence of any controlling case or
controlling regulatory law which is directly inconsistent with the
position taken by the Executive shall be evidence that the Executive
did not act in good faith.
b. Reimbursement of legal fees and expenses shall be made
monthly upon the written submission of a request for reimbursement
together with evidence that such fees and expenses are due and payable
or were paid by the Executive. If the Employer shall have reimbursed
the Executive for legal fees and expenses and it is later determined
that the Executive was not acting in good faith, all amounts paid on
behalf of, or reimbursed to, the Executive shall be promptly refunded
to the Employer.
8.2 Interest. If the Employer does not pay any amount due to the
Executive under this Agreement within three days after such amount became due
and owing, interest shall accrue on such amount from the date it became due and
owing until the date of payment at a
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annual rate equal to two percent (2.0%) above the base commercial lending rate
announced by The Bank of America in effect from time to time during the period
of such nonpayment.
8.3 Joint and Several Obligation. Whichever of the Company and
Services is not the Employer shall be jointly and severally liable for the
obligations of the Employer under this Article VIII. The right of refund
referred to in the last sentence of Section 8.1 b. shall inure to whichever of
the Company or Services originally paid the reimbursement to the Executive.
ARTICLE IX.
NO SET-OFF OR MITIGATION
9.1 No Set-off by Company or Services. The Executive's right to
receive when due the payments and other benefits provided for under this
Agreement is absolute, unconditional and subject to no set-off, counterclaim or
legal or equitable defense. Time is of the essence in the performance by the
Company and Services of their obligations under this Agreement. Any claim which
the Company or Services may have against the Executive, whether for a breach of
this Agreement or otherwise, shall be brought in a separate action or proceeding
and not as part of any action or proceeding brought by the Executive to enforce
any rights against the Company or Services under this Agreement.
9.2 No Mitigation. The Executive shall not have any duty to
mitigate the amounts payable by the Company or Services under this Agreement by
seeking new employment following termination. Except as specifically otherwise
provided in this Agreement, all amounts payable pursuant to this Agreement shall
be paid without reduction regardless of any amounts of salary, compensation or
other amounts which may be paid or payable to the Executive as the result of the
Executive's employment by another employer.
ARTICLE X.
CONFIDENTIALITY AND NONCOMPETITION
10.1 Confidentiality. Executive acknowledges that it is the policy of
the Company and its Subsidiaries to maintain as secret and confidential all
valuable and unique information and techniques acquired, developed or used by
the Company and its Subsidiaries relating to their business, operations,
employees and customers, which gives the Company and its Subsidiaries a
competitive advantage in the businesses in which the Company and its
Subsidiaries are engaged ("Confidential Information"). Executive recognizes that
all such Confidential Information is the sole and exclusive property of the
Company and its Subsidiaries, and that disclosure of Confidential Information
would cause damage to the Company and its Subsidiaries. Executive agrees that,
except as required by the duties of his employment with the Company and/or its
Subsidiaries and except in connection with enforcing the Executive's rights
under this Agreement or if compelled by a court or governmental agency, he will
not, without the consent of the Company, disseminate or otherwise disclose any
Confidential Information obtained during his employment with the Company and/or
its Subsidiaries for so long as such information is valuable and unique.
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10.2 Non-competition/ Non-solicitation.
a. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive will not at any time directly or indirectly, in any capacity,
engage or participate in, or become employed by or render advisory or
consulting or other services in connection with any Prohibited Business
as defined in Section 10.2(d).
b. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive shall not make any financial investment, whether in the form
of equity or debt, or own any interest, directly or indirectly, in any
Prohibited Business. Nothing in this Section 10.2(b) shall, however,
restrict Executive from making any investment in any company whose
stock is listed on a national securities exchange or actively traded in
the over-the-counter market; provided that (1) such investment does not
give Executive the right or ability to control or influence the policy
decisions of any Prohibited Business, and (2) such investment does not
create a conflict of interest between Executive's duties hereunder and
Executive's interest in such investment.
c. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive shall not (1) employ any employee of the Company and/or its
Subsidiaries or (2) interfere with the Company's or any of its
Subsidiaries' relationship with, or endeavor to entice away from the
Company and/or its Subsidiaries any person, firm, corporation, or other
business organization who or which at any time (whether before or after
the date of Executive's termination of employment), was an employee,
customer, vendor or supplier of, or maintained a business relationship
with, any business of the Company and/or its Subsidiaries which was
conducted at any time during the period commencing one year prior to
the termination of employment.
d. For the purpose of this Section 10.2, "Prohibited Business"
shall be defined as any entity and any branch, office or operation
thereof, which is a direct and material competitor of the Company and/
or its Subsidiaries wherever the Company and/ or its Subsidiaries does
business, in the United States or abroad.
10.3 Remedy. Executive and the Company specifically agree that, in
the event that Executive shall breach his obligations under this Article X, the
Company and its Subsidiaries will suffer irreparable injury and no adequate
remedy for such breach, and shall be entitled to injunctive relief therefor, and
in particular, without limiting the generality of the foregoing, the Company
shall not be precluded from pursuing any and all remedies it may have at law or
in equity for breach of such obligations; provided, however, that such breach
shall not in any
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manner or degree whatsoever limit, reduce or otherwise affect the obligations of
the Company and Services under this Agreement, and in no event shall an asserted
breach of the Executive's obligations under this Article X constitute a basis
for deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.
ARTICLE XI.
MISCELLANEOUS
11.1 No Assignability. This Agreement is personal to the Executive
and without the prior written consent of the Company and Services 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.
11.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the Company, Services and their respective successors and assigns.
The Company and Services will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
their respective businesses or assets to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company or
Services, as applicable, would be required to perform it if no such succession
had taken place. Any successor to the business and/or assets of the Company or
Services which assumes or agrees to perform this Agreement by operation of law,
contract, or otherwise shall be jointly and severally liable with the Company
and Services under this Agreement as if such successor were the Company or
Services, as applicable.
11.3 Payments to Beneficiary. If the Executive dies before receiving
amounts to which the Executive is entitled under this Agreement, such amounts
shall be paid in a lump sum to the beneficiary designated in writing by the
Executive, or if none is so designated, to the Executive's estate.
11.4 Non-alienation of Benefits. Benefits payable under this
Agreement shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution or
levy of any kind, either voluntary or involuntary, before actually being
received by the Executive, and any such attempt to dispose of any right to
benefits payable under this Agreement shall be void.
11.5 Severability. If any one or more articles, sections or other
portions of this Agreement are declared by any court or governmental authority
to be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any article, section or other portion not so declared to be unlawful
or invalid. Any article, section or other portion so declared to be unlawful or
invalid shall be construed so as to effectuate the terms of such article,
section or other portion to the fullest extent possible while remaining lawful
and valid.
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11.6 Amendments. Except as provided in Sections 2.2 and 11.14 hereof,
this Agreement shall not be altered, amended or modified except by written
instrument executed by the Company, Services and Executive.
11.7 Notices. All notices and other communications under this
Agreement shall be in writing and delivered by hand or by first class registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Name
Address
City, State Zip
If to the Company:
Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attention: Vice President, Administration
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If to Services:
Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attention: Vice President, Administration
or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
11.9 Governing Law. This Agreement shall be interpreted and construed
in accordance with the laws of the State of South Carolina without regard to its
choice of law principles.
11.10 Captions. The captions of this Agreement are not a part of the
provisions hereof and shall have no force or effect.
11.11 Tax Withholding. The Company and Services may withhold from any
amounts payable under this Agreement any federal, state or local taxes that are
required to be withheld pursuant to any applicable law or regulation.
11.12 No Waiver. The Executive's failure to insist upon strict
compliance with any provision of this Agreement shall not be deemed a waiver of
such provision or any other provision of this Agreement. A waiver of any
provision of this Agreement shall not be deemed a waiver of any other provision,
and any waiver of any default in any such provision shall not be deemed a waiver
of any later default thereof or of any other provision.
11.13 Entire Agreement. This Agreement contains the entire understand-
ing of the Company and Services and the Executive with respect to its subject
matter.
11.14 Cancellation. The Company and Services may, at any time prior to
a Change in Control, unilaterally cancel this Agreement on behalf of all parties
hereto by both of them (and not only one of them) notifying the Executive of
such cancellation in writing at least twelve (12) months prior to the effective
date of the cancellation, provided however that no such notice may be given
after an Imminent Change of Control Date.
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IN WITNESS WHEREOF, the Executive, Services and the Company have
executed this Agreement as of the date first above written.
------------------------------------
Name (the Executive)
SAFETY-KLEEN CORP.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
SAFETY-KLEEN SERVICES, INC.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
23
Exhibit (10) (o)
SAFETY-KLEEN
CHANGE OF CONTROL SEVERANCE AGREEMENT
Name
coc sk-a2-12-22
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. - PURPOSES 1
ARTICLE II. - CERTAIN DEFINITIONS 1
2.1 Accrued Obligations 1
2.2 Agreement Term 1
2.3 Article 2
2.4 Beneficial owner 2
2.5 Cause 2
2.6 Change of Control 2
2.7 Code 2
2.8 Disability 2
2.9 Effective Date 2
2.10 Good Reason 3
2.11 Gross-up Payment 3
2.12 Imminent Change of Control Date 3
2.13 IRS 3
2.14 1934 Act 3
2.15 Notice of Termination 3
2.16 Plans 3
2.17 Policies 3
2.18 Post-Change Period 3
2.19 SEC 3
2.20 Section 3
2.21 Subsidiary 3
2.22 Termination Date 4
2.23 Termination Performance Period 4
2.24 Voting Securities 4
ARTICLE III. - POST-CHANGE PERIOD PROTECTIONS 4
3.1 Position and Duties 4
3.2 Compensation 5
3.3 Stock Options 7
ARTICLE IV. - TERMINATION OF EMPLOYMENT 7
4.1 Disability 7
4.2 Death 8
4.3 Cause 8
4.4 Good Reason 8
ARTICLE V. - OBLIGATIONS OF THE COMPANY UPON TERMINATION 9
5.1 If by the Executive for Good Reason or by the Company
Other Than for Cause or Disability 9
<PAGE>
5.2 If by the Company for Cause 11
5.3 If by the Executive Other Than for Good Reason 11
5.4 If by the Company for Disability 11
5.5 If upon Death 11
5.6 Joint and Several Obligation 11
ARTICLE VI. - NON-EXCLUSIVITY OF RIGHTS 12
6.1 Waiver of Other Severance Rights 12
6.2 Other- Rights 12
ARTICLE VII. - CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY 12
7.1 Gross-up for Certain Taxes 12
7.2 Determination by the Executive 13
7.3 Additional Gross-up Amounts 13
7.4 Gross-up Multiple 14
7.5 Opinion of Counsel 14
7.6 Amount Increased or Contested 14
7.7 Refunds 15
7.8 Joint and Several Obligation 15
ARTICLE VIII. - EXPENSES AND INTEREST 16
8.1 Legal Fees and Other Expenses 16
8.2 Interest 16
ARTICLE IX. - NO SET-OFF OR MITIGATION 16
9.1 No Set-off by Company 16
9.2 No Mitigation 17
ARTICLE X. - CONFIDENTIALITY AND NON-COMPETITION 17
10.1 Confidentiality 17
10.2 Non-competition/ Non-Solicitation 17
10.3 Remedy 18
ARTICLE XI. - MISCELLANEOUS 18
11.1 No Assignability 18
11.2 Successors 18
11.3 Payments to Beneficiary 19
11.4 Non-alienation of Benefits 19
11.5 Severability 19
11.6 Amendments 19
11.7 Notices 19
11.8 Counterparts 20
11.9 Governing Law 20
11.10 Captions 20
11.11 Tax Withholding 20
<PAGE>
11.12 No Waiver 20
11.13 Entire Agreement 20
11.14 Cancellation 20
<PAGE>
SAFETY-KLEEN
CHANGE OF CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT dated as of October 6, 1999, is made among SAFETY- KLEEN
CORP., a Delaware corporation having its principal place of business in
Columbia, South Carolina (the "Company"), SAFETY-KLEEN SERVICES, INC., a
Delaware corporation having its principal place of business in Columbia, South
Carolina and a wholly owned subsidiary of the Company ("Services") and
(FirstName) (LastName) (the "Executive"), a resident of (State).
The Company, Services and the Executive agree that this agreement
supersedes any prior agreement between any of them which specifically provides
benefits upon a change in control of the Company or Services, and further agree
that, if benefits become payable to the Executive pursuant to Article V hereof,
such benefits will be in lieu of any other severance or termination benefits to
which the Executive otherwise would be entitled under any other severance or
termination plan, policy or arrangement of the Company or Services.
ARTICLE I.
PURPOSES
The Board of Directors of the Company (the "Board") and the Board of
Directors of Services have determined that it is in the best interests of the
Company and its stockholders, and of Services, to assure that the Company and
Services will have the continued service of the Executive, despite the
possibility or occurrence of a change of control of the Company or Services. The
Board believes it is imperative to reduce the distraction of the Executive that
would result from the personal uncertainties caused by a pending or threatened
change of control, to encourage the Executive's full attention and dedication to
the Company and Services, and to provide the Executive with compensation and
benefits arrangements upon a change of control which ensure that the
expectations of the Executive will be satisfied and are competitive with those
of similarly-situated corporations. This Agreement is intended to accomplish
these objectives.
ARTICLE II.
CERTAIN DEFINITIONS
When used in this Agreement, the terms specified below shall have the
following meanings:
2.1 "Accrued Obligations" -- see Section 5.3.
2.2 "Agreement Term" means the period commencing on the date of this
Agreement and ending on the date which is twelve (12) months following the date
that both
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the Company and Services give notice of cancellation pursuant to Section 11.14
hereof (the "Expiration Date"); provided, however, that if an Imminent Change of
Control Date occurs before the Expiration Date, then the Agreement Term shall
automatically extend to a date which is twelve (12) months after the date of the
Imminent Change of Control Date: and provided further, that if a Change of
Control occurs before the Expiration Date, the Expiration Date shall
automatically be extended to the last day of the Post-Change Period.
2.3 "Article" means an article of this Agreement.
2.4 "Beneficial owner" means such term as defined in Rule 13d-3 of the
SEC under the 1934 Act.
2.5 "Cause" - see Section 4.3(b).
2.6 "Change of Control" means, except as otherwise provided below, the
occurrence of any of the following:
a. (X) any person (as such term is used in Rule 13(d)- 5 of
the SEC under the 1934 Act) or group (as such term is defined in
Section 13(d) of the 1934 Act), other than a Subsidiary or any employee
benefit plan (or related trust) of the Company or a Subsidiary, becomes
the beneficial owner of 15% or more of the common stock of the Company
or of Voting Securities representing 15% or more of the combined voting
power of all Voting Securities of the Company, (Y) Laidlaw Inc. ceases
to be the beneficial owner, directly or indirectly, of 43.6% or more of
the Voting Securities of the Company and (Z) another person or group
becomes the beneficial owner of Voting Securities of the Company which
represent a larger number of Voting Securities than those held by
Laidlaw Inc.
b. within a period of 24 months or less, the individuals who,
as of any date, constitute the Board (the "Incumbent Directors") cease
for any reason to constitute at least a majority of the Board unless at
the end of such period, the majority of individuals then constituting
the Board were nominated upon the recommendation of a majority of the
Incumbent Directors.
c. the sale or other disposition of all or substantially all
of the assets of the Company or Services.
d. the sale or other disposition by the Company of 50% or more
of the Voting Securities of Services or any other transaction which
results in any person, other than the Company or a subsidiary or any
employee benefit plan of the Company, becoming the beneficial owner of
50% or more of the Voting Securities of Services.
2.7 "Code" means the Internal Revenue Code of 1986, as amended.
2.8 "Disability" -- see Section 4.1(b).
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2.9 "Effective Date" means the first date on which a Change of Control
occurs during the Agreement Term. Despite anything in this Agreement to the
contrary, if the Company or Services terminates the Executive's employment
before the date of a Change of Control, and if the Executive reasonably
demonstrates that such termination of employment (a) was at the request of a
third party who had taken steps reasonably calculated to effect the Change of
Control or (b) otherwise arose in connection with or anticipation of the Change
of Control, then "Effective Date" shall mean the date immediately before the
date of such termination of employment.
2.10 "Employer" means whichever of the Company or Services is the
primary common-law employer of the Executive at the relevant time.
2.11 "Good Reason" -- see Section 4.4(b).
2.12 "Gross-up Payment" -- see Section 7.1.
2.13 "Imminent Change of Control Date" means any date on which occurs
(a) a presentation to the Company's stockholders generally or any of the
Company's directors or executive officers of a proposal or offer for a Change of
Control, or (b) the public announcement (whether by advertisement, press
release, press interview, public statement, SEC filing or otherwise) of a
proposal or offer for a Change of Control, and in case of either (a) or (b) such
proposal or offer remains effective and unrevoked.
2.14 "IRS" means the Internal Revenue Service.
2.15 "1934 Act" means the Securities Exchange Act of 1934.
2.16 "Notice of Termination" means a written notice given in accordance
with Section 11.7 which sets forth (a) the specific termination provision in
this Agreement relied upon by the party giving such notice, (b) in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under such termination provision and (c) if the
Termination Date is other than the date of receipt of such Notice of
Termination, the Termination Date.
2.17 "Plans" means plans, programs, policies or practices of the
Company and Services.
2.18 "Policies" means policies, practices or procedures of the Company
and Services.
2.19 "Post-Change Period" means the period commencing on the Effective
Date and ending on the third anniversary of such date.
2.20 "SEC" means the Securities and Exchange Commission.
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2.21 "Section" means, unless the context otherwise requires, a section
of this Agreement.
2.22 "Subsidiary" means a corporation as defined in Section 424(f) of
the Code with the Company being treated as the employer corporation for purposes
of this definition.
2.23 "Termination Date" means the date of receipt of the Notice of
Termination or any later date specified in such notice (which date shall be not
more than 15 days after the giving of such notice), as the case may be;
provided, however, that (a) if the Company or Services terminates the
Executive's employment other than for Cause or Disability, then the Termination
Date shall be the date of receipt of such Notice of Termination and (b) if the
Executive's employment is terminated by reason of death or Disability, then the
Termination Date shall be the date of death of the Executive or the "Disability
Effective Date" (as defined in Section 4.1), as the case may be.
2.24 "Termination Performance Period" - see Section 3.2(b)(2).
2.25 "Voting Securities" of a corporation means securities of such
corporation that are entitled to vote generally in the election of directors of
such corporation.
ARTICLE III.
POST-CHANGE PERIOD PROTECTIONS
3.1 Position and Duties.
a. During the Post-Change Period, (1) the Executive's position
with the Company and Services, (in the case of a Change of Control
involving the Company) or with Services (in the case of a Change of
Control involving Services) (including offices, titles, reporting
requirements and responsibilities), authority and duties shall be at
least commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the 90-day
period immediately before the Effective Date and (2) the Executive's
services shall be performed at the location where the Executive was
employed immediately before the Effective Date or any other location
less than 40 miles from such former location.
b. During the Post-Change Period (other than any periods of
vacation, sick leave or disability to which the Executive is entitled),
the Executive agrees to devote the Executive's full attention and time
to the business and affairs of the Company and Services and, to the
extent necessary to discharge the duties assigned to the Executive in
accordance with this Agreement, to use the Executive's best efforts to
perform faithfully and efficiently such duties. During the Post-Change
Period, the Executive may (1) serve on corporate, civic or charitable
boards or committees, (2) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (3) manage
personal investments, so long as such activities are consistent with
the Policies of the Company or Services at the Effective Date and do
not significantly
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interfere with the performance of the Executive's duties under this
Agreement. To the extent that any such activities have been conducted
by the Executive before the Effective Date and were consistent with the
Policies of the Company and Services at the Effective Date, the
continued conduct of such activities (or activities similar in nature
and scope) after the Effective Date shall not be deemed to interfere
with the performance of the Executive's duties under this Agreement.
3.2 Compensation.
a. Base Salary. During the Post-Change Period, the Company and
Services shall pay or cause to be paid to the Executive an annual base
salary in cash ("Guaranteed Base Salary"), which shall be paid in a
manner consistent with the Company's or Services' (as applicable to the
Executive) payroll practices in effect immediately before the Effective
Date at a rate at least equal to 12 times the highest monthly base
salary paid or payable to the Executive by the Company and Services in
respect of the 12-month period immediately before the Effective Date.
During the Post-Change Period, the Guaranteed Base Salary shall be
reviewed at least annually and shall be increased at any time and from
time to time as shall be substantially consistent with increases in
base salary awarded to other peer executives of the Company and
Services. Any increase in Guaranteed Base Salary shall not limit or
reduce any other obligation of the Company and Services to the
Executive under this Agreement. After any such increase, the Guaranteed
Base Salary shall not be reduced and the term "Guaranteed Base Salary"
shall thereafter refer to the increased amount.
b. Target Bonus. During the Post-Change Period, the Company
and Services shall pay or cause to be paid to the Executive a bonus
(the "Guaranteed Bonus") for each Performance Period which ends during
the Post-Change Period. "Performance Period" means each period of time
designated in accordance with any bonus arrangement of the Company or
Services ("Bonus Plan") which is based upon performance and approved by
the Board or any committee of the Board. The Guaranteed Bonus shall be
at least equal to the greatest of:
(1) the On Plan Bonus, which shall mean the cash bonus which
the Executive would accrue under any Bonus Plan for the
Performance Period for which the Guaranteed Bonus is awarded
("Current Performance Period") as if the performance achieved
100% of plan established pursuant to such Bonus Plan and the
maximum level of the discretionary portion is achieved;
(2) the Actual Bonus, which shall mean the cash bonus which
Executive would accrue under any Bonus Plan for the Current
Performance Period if the performance during the Current
Performance Period were measured by actual performance;
provided, however, that for purposes of Article V of this
Agreement, the Actual Bonus for the Performance Period in
which the Termination Date occurred (the "Termination
Performance Period") shall not be less than the cash bonus
which the Executive would accrue under any
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Bonus Plan if performance during that Termination Performance
Period were measured by the actual performance during the
Termination Performance Period before the Termination Date
projected to the last day of such Performance Period and the
maximum level of the discretionary portion is achieved; and
(3) the Historical Bonus, which shall mean the greatest bonus
that the Executive accrued under any Bonus Plan in the last
three (3) Performance Periods that ended before the
Post-Change Period; provided, however, that for purposes of
Article V of this Agreement, the Historical Bonus for the
Performance Period in which the Termination Date occurred
shall not be less than the cash bonus that the Executive
accrued in the last Performance Period that ended before the
Termination Date.
c. Incentive, Savings and Retirement Plans. In addition to
Guaranteed Base Salary and Guaranteed Bonus payable as provided in this
Section, the Executive shall be entitled to participate during the
Post-Change Period in all incentive (including long-term incentives),
savings and retirement Plans applicable to other peer executives of the
Company and Services, but in no event shall such Plans provide the
Executive with incentive (including long-term incentives), savings and
retirement benefits which are less favorable, in the aggregate, than
the most favorable of those provided by the Company or Services to the
Executive or to peer executives under such Plans as in effect at any
time during the 90-day period immediately before the Effective Date.
d. Welfare Benefit Plans. During the Post-Change Period, the
Executive and the Executive's family shall be eligible to participate
in, and receive all benefits under, welfare benefit Plans provided by
the Company and Services(including, without limitation, medical,
prescription, dental, disability, individual life, group life,
dependent life, accidental death and travel accident insurance Plans)
and applicable to other peer executives of the Company and Services and
their families, but in no event shall such Plans provide benefits which
in any case are less favorable, in the aggregate, than the most
favorable of those provided to the Executive or to peer executives
under such Plans as in effect at any time during the 90-day period
immediately before the Effective Date.
e. Fringe Benefits. During the Post-Change Period, the
Executive shall be entitled to fringe benefits and other executive
perquisites in accordance with the most favorable Plans applicable to
peer executives of the Company and Services, but in no event shall such
Plans provide fringe benefits and other executive perquisites which in
any case are less favorable, in the aggregate, than the most favorable
of those provided by the Company and Services to the Executive or to
peer executives under such Plans in effect at any time during the
90-day period immediately before the Effective Date.
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f. Expenses. During the Post-Change Period, the Executive
shall be entitled to prompt reimbursement of all reasonable
employment-related expenses incurred by the Executive upon the
Company's or Services' (as applicable) receipt of accountings in
accordance with the most favorable Policies applicable to peer
executives of the Company and Services, but in no event shall such
Policies be less favorable, in the aggregate, than the most favorable
of those provided by the Company and Services to the Executive or to
peer executives under such Policies in effect at any time during the
90-day period immediately before the Effective Date.
g. Office and Support Staff. During the Post-Change Period,
the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal
secretarial and other assistance in accordance with the most favorable
Policies applicable to peer executives of the Company and Services, but
in no event shall such Policies be less favorable, in the aggregate,
than the most favorable of those provided by the Company and Services
to the Executive or to peer executives under such Policies in effect at
any time during the 90-day period immediately before the Effective
Date.
h. Vacation. During the Post-Change Period, the Executive
shall be entitled to paid vacation in accordance with the most
favorable Policies applicable to peer executives of the Company and
Services, but in no event shall such Policies be less favorable, in the
aggregate, than the most favorable of those provided by the Company and
Services to the Executive or to peer executives under such Policies in
effect at any time during the 90-day period immediately before the
Effective Date.
3.3 Stock Options.
In addition to the other benefits provided in this Section, on the
Effective Date, the Employer shall pay to the Executive a lump-sum cash payment
equal to the spread (fair market value over exercise price) of all outstanding
options granted to the Executive for shares of common stock of the Company
whether vested or not vested on the Effective Date. Whichever of the Company and
Services is not the Employer, shall be jointly and severally liable for the
obligation of the Employer under this Section 3.3.
ARTICLE IV.
TERMINATION OF EMPLOYMENT
4.1 Disability.
a. During the Post-Change Period, the Employer may terminate
the Executive's employment upon the Executive's Disability (as defined
in Section 4.1(b)) by giving the Executive or his legal representative,
as applicable, (1) written notice in accordance with Section 11.7 of
the Employer's intention to terminate the Executive's employment
pursuant to this Section and (2) a certification of the Executive's
Disability by a physician selected by the Employer or its insurers and
reasonably
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acceptable to the Executive or the Executive's legal representative.
The Executive's employment shall terminate effective on the 30th day
(the 'Disability Effective Date') after the Executive's receipt of such
notice unless, before the Disability Effective Date, the Executive
shall have resumed the full-time performance of the Executive's duties.
b. "Disability" means any medically determinable physical or
mental impairment that has lasted for a continuous period of not less
than six months and can be expected to be permanent or of indefinite
duration. and that renders the Executive unable to perform the
essential functions required under this Agreement with or without
reasonable accommodation.
4.2 Death. The Executive's employment shall terminate automatically
upon the Executive's death during the Post-Change Period.
4.3 Cause.
a. During the Post-Change Period, the Employer may terminate
the Executive's employment for Cause.
b. "Cause" means any of the following: (i) conviction of the
Executive of, or the Executive's pleading guilty or nolo contendere to,
any felony which includes as an element of the crime a premeditated
intention to commit the act, (ii) Executive's inability to perform his
duties due to habitual alcohol or drug addiction, (iii) serious
misconduct involving dishonesty in the course of Executive's
employment, or (iv) the Executive's habitual neglect of his duties;
except that Cause shall not mean:
(1) bad judgment or negligence other than habitual neglect of
duty;
(2) any act or omission believed by the Executive in good
faith to have been in or not opposed to the interest of the
Company and Services (without intent of the Executive to gain,
directly or indirectly, a profit to which the Executive was
not legally entitled);
(3) any act or omission with respect to which a determination
could properly have been made by the Board that the Executive
met the applicable standard of conduct for indemnification or
reimbursement under the Company's or Services' by-laws, any
applicable indemnification agreement, or applicable law, in
each case in effect at the time of such act or omission; or
(4) any act or omission with respect to which notice of
termination of employment of the Executive is given more than
12 months after the earliest date on which any member of the
Board, not a party to the act or omission, knew or should have
known of such act or omission.
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c. Any termination of the Executive's employment by the
Employer for Cause shall be communicated to the Executive by a Notice
of Termination.
4.4 Good Reason.
a. During the Post-Change Period, the Executive may terminate
his or her employment for Good Reason.
b. "Good Reason" means any of the following:
(1) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including
offices, titles, reporting requirements or responsibilities),
authority or duties as contemplated by Section 3.1 (a)(1), or
any other action by the Company or Services which results in a
diminution on or other material adverse change in such
position, authority or duties;
(2) any failure by the Company or Services to comply with any
of the provisions of Article III;
(3) the Company's or Services' requiring the Executive to be
based at any office or location other than the location
described in Section 3.1(a)(2);
(4) any other material adverse change to the terms and
conditions of the Executive's employment; or
(5) any purported termination by the Employer of the
Executive's employment other than as expressly permitted by
this Agreement (any such purported termination shall not be
effective for any other purpose under this Agreement).
Any reasonable determination of "Good Reason" made in good faith by the
Executive shall be conclusive.
c. Any termination of employment by the Executive for Good
Reason shall be communicated to the Employer by a Notice of
Termination. A passage of time prior to delivery of a Notice of
Termination or a failure by the Executive to include in the Notice of
Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Executive under this
Agreement or preclude the Executive from asserting such fact or
circumstance in enforcing rights under this Agreement.
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ARTICLE V.
OBLIGATIONS OF THE EMPLOYER UPON TERMINATION
5.1 If by the Executive for Good Reason or by the Employer Other Than
for Cause or Disability. If, during the Post-Change Period, the Employer shall
terminate Executive's employment other than for Cause or Disability, or if the
Executive shall terminate employment for Good Reason, the Employer shall
immediately pay the Executive, in addition to all vested rights arising from the
Executive's employment as specified in Article III, a cash amount equal to the
sum of the following amounts:
a. to the extent not previously paid, the Guaranteed Base
Salary and any accrued vacation pay through the Termination Date;
b. the difference between (1) the product of (A) the
Guaranteed Bonus, multiplied by (B) a fraction, the numerator of which
is the number of days in the Termination Performance Period which
elapsed before the Termination Date, and the denominator of which is the
total number of days in the Termination Performance Period, and (2) the
amount of any Guaranteed Bonus previously paid to the Executive with
respect to the Termination Performance Period;
c. all amounts previously deferred by or an accrual to the
benefit of the Executive under any nonqualified deferred compensation
or pension plan, together with any accrued earnings thereon, and not
yet paid by the Company or Services;
d. an amount equal to the product of (1) three (3) multiplied
by (2) the sum of (A) the Guaranteed Base Salary and (B) the Guaranteed
Bonus;
e. an amount equal to the sum of the value of the unvested
portion of the Executive's accounts or accrued benefits under any
qualified plan maintained by the Company or Services, as of the
Termination Date;
f. if the Company or Services maintains any cash-based long
term incentive bonus plan or arrangement, an amount in satisfaction of
the Company's or Services (as applicable) obligation to the Executive
under such plan or arrangement equal to the amount which would be
payable to the Executive if (i) the Company or Services (as applicable)
attained target performance over the entire performance period and (ii)
the Executive had remained employed during the entire performance
period;
g. pay Executive outplacement services, to a maximum of
$25,000.
Until the third anniversary of the Termination Date or such later date
as any Plan of the Company or Services may specify, the Employer shall continue
to provide to the Executive and the provide to the Executive's family welfare
benefits (including, without limitation, medical, prescription, dental,
disability, individual life, group life, accidental death and travel accident
insurance plans and programs), fringe benefits and other executive
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perquisites, which are at least as favorable as the most favorable Plans of the
Company and Services applicable to Executive and other peer executives and their
families as of the Termination Date, but which are in no event less favorable
than the most favorable Plans of the Company and Services applicable to the
Executive and other peer executives and their families during the 90-day period
immediately before the Effective Date. The cost to the Executive of such welfare
benefits shall not exceed the cost of such benefits to the Executive immediately
before the Termination Date or, if less, the Effective Date. Notwithstanding the
foregoing, if the Executive is covered under any medical, life, or disability
insurance plan(s) provided by a subsequent employer, then the amount of coverage
required to be provided by the Employer hereunder shall be secondary to the
coverage provided by the subsequent employer's medical, life, or disability
insurance plan(s). The Executive's rights under this Section shall be in
addition to, and not in lieu of, any post-termination continuation coverage or
conversion rights the Executive may have pursuant to applicable law, including
without limitation continuation coverage required by Section 4980B of the Code
and Section 601 et. seq. of the Employee Retirement Income Security Act of 1974,
as amended.
5.2 If by the Employer for Cause. If the Employer terminates the
Executive's employment for Cause during the Post-Change Period, this Agreement
shall terminate without further obligation by the Employer to the Executive,
other than the obligation immediately to pay the Executive in cash the
Executive's Guaranteed Base Salary through the Termination Date, plus the amount
of any compensation previously deferred by the Executive, plus any accrued
vacation pay, in each case to the extent not previously paid.
5.3 If by the Executive Other Than for Good Reason. If the Executive
terminates employment during the Post-Change Period other than for Good Reason,
Disability or death, this Agreement shall terminate without further obligations
by the Employer, other than the obligation immediately to pay the Executive in
cash all amounts specified in clauses (a), (b) and (c) of the first sentence of
Section 5.1 (such amounts collectively, the "Accrued Obligations").
5.4 If by the Employer for Disability. If the Employer terminates the
Executive's employment by reason of the Executive's Disability during the
Post-Change Period, this Agreement shall terminate without further obligations
to the Executive, other than
(a) the Employer's obligation immediately to pay the Executive
in cash all Accrued Obligations, and
(b) the Executive's right after the Disability Effective Date
to receive disability and other benefits at least equal to the greater
of (1) those provided under the most favorable disability Plans
applicable to peer executives of the Company or Services in effect
immediately before the Termination Date or (2) those provided under the
most favorable disability Plans of the Company and Services in effect
at any time during the 90-day period immediately before the Effective
Date.
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5.5 If upon Death. If the Executive's employment is terminated by
reason of the Executive's death during the Post-Change Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than the obligation of the Employer
immediately to pay the Executive's estate or beneficiary in cash all Accrued
Obligations. Despite anything in this Agreement to the contrary, the Executive's
family shall be entitled to receive benefits at least equal to the most
favorable benefits provided by the Company and Services to the surviving
families of peer executives of the Company or Services under such Plans, but in
no event shall such Plans provide benefits which in each case are less
favorable, in the aggregate, than the most favorable of those provided by the
Company and Services to the Executive under such Plans in effect at any time
during the 90-day period immediately before the Effective Date.
5.6 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article V.
ARTICLE VI.
NON-EXCLUSIVITY OF RIGHTS
6.1 Waiver of Other Severance Rights. To the extent that payments are
made to the Executive pursuant to Section 5.1, the Executive hereby waives the
right to receive severance payments under any other Plan or agreement of the
Company or Services.
6.2 Other Rights. Except as provided in Section 6.1 and in the second
paragraph of this Agreement, this Agreement shall not prevent or limit the
Executive's continuing or future participation in any benefit, bonus, incentive
or other Plans, provided by the Company or any of its Subsidiaries and for which
the Executive may qualify, nor shall this Agreement limit or otherwise affect
such rights as the Executive may have under any other agreements with the
Company or any of its Subsidiaries. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any Plan of the Company or
any of its Subsidiaries and any other payment or benefit required by law at or
after the Termination Date shall be payable in accordance with such Plan or
applicable law except as expressly modified by this Agreement.
ARTICLE VII.
CERTAIN ADDITIONAL PAYMENTS BY THE EMPLOYER
7.1 Gross-up for Certain Taxes. If it is determined (by the reasonable
computation of the Employer's independent auditors, which determinations shall
be certified to by such auditors and set forth in a written certificate
("Certificate") delivered to the Executive) that any benefit received or deemed
received by the Executive from the Company or Services pursuant to this
Agreement or otherwise (collectively, the "Payments") is or will become subject
to any excise tax under Section 4999 of the Code or any similar tax payable
under any United States federal, state, local or other law (such excise tax and
all such similar taxes collectively, "Excise Taxes"), then the Employer shall,
immediately after such determination, pay the Executive an amount (the "Gross-up
Payment") equal to the product of
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(a) the amount of such Excise Taxes
multiplied by
(b) the Gross-up Multiple (as defined in Section 7.4).
The Gross-up Payment is intended to compensate the Executive for the
Excise Taxes and any federal, state, local or other income or excise taxes or
other taxes payable by the Executive with respect to the Gross-up Payment.
The Executive or the Employer may at any time request the preparation
and delivery to the Executive of a Certificate. The Employer shall, in addition
to complying with Section 7.2, cause all determinations and certifications under
the Article to be made as soon as reasonably possible and in adequate time to
permit the Executive to prepare and file the Executive's individual tax returns
on a timely basis.
7.2 Determination by the Executive.
a. If the Employer shall fail to deliver a Certificate to the
Executive (and to pay to the Executive the amount of the Gross-up
Payment, if any) within 14 days after receipt from the Executive of a
written request for a Certificate, or if at any time following receipt
of a Certificate the Executive disputes the amount of the Gross-up
Payment set forth therein, the Executive may elect to demand the
payment of the amount which the Executive, in accordance with an
opinion of counsel to the Executive ("Executive Counsel Opinion"),
determines to be the Gross-up Payment. Any such demand by the Executive
shall be made by delivery to the Employer of a written notice which
specifies the Gross-up Payment determined by the Executive and an
Executive Counsel Opinion regarding such Gross-up Payment (such written
notice and opinion collectively, the "Executive's Determination").
Within 14 days after delivery of the Executive's Determination to the
Employer, the Employer shall either (1 ) pay the Executive the Gross-up
Payment set forth in the Executive's Determination (less the portion of
such amount, if any, previously paid to the Executive by the Employer)
or (2) deliver to the Executive a Certificate specifying the Gross-up
Payment determined by the Employer's independent auditors, together
with an opinion of the Employer's counsel (" Employer Counsel
Opinion"), and pay the Executive the Gross-up Payment specified in such
Certificate. If for any reason the Employer fails to comply with clause
(2) of the preceding sentence, the Gross-up Payment specified in the
Executive's Determination shall be controlling for all purposes.
b. If the Executive does not make a request for, and the
Employer does not deliver to the Executive, a Certificate, the Employer
shall, for purposes of Section 7.3, be deemed to have determined that
no Gross-up Payment is due.
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7.3 Additional Gross-up Amounts. If, despite the initial conclusion of
the Employer and/or the Executive that certain Payments are neither subject to
Excise Taxes nor to be counted in determining whether other Payments are subject
to Excise Taxes (any such item, a "Non-Parachute Item"), it is later determined
(pursuant to the subsequently-enacted provisions of the Code, final regulations
or published rulings of the IRS, final judgment of a court of competent
jurisdiction or the Employer's independent auditors) that any of the
Non-Parachute Items are subject to Excise Taxes, or are to be counted in
determining whether any Payments are subject to Excise Taxes, with the result
that the amount of Excise Taxes payable by the Executive is greater than the
amount determined by the Employer or the Executive pursuant to Section 7.1 or
7.2, as applicable, then the Employer shall pay the Executive an amount (which
shall also be deemed a Gross-up Payment) equal to the product of
(a) the sum of (1) such additional Excise Taxes and (2) any
interest, fines, penalties, expenses or other costs incurred by the
Executive as a result of having taken a position in accordance with a
determination made pursuant to Section 7.1
multiplied by
(b) the Gross-up Multiple.
7.4 Gross-up Multiple. The Gross-up Multiple shall equal a fraction,
the numerator of which is one (1.0), and the denominator of which is one (1.0)
minus the sum, expressed as a decimal fraction, of the rates of all federal,
state, local and other income and other taxes and any Excise Taxes applicable to
the Gross-up Payment. (If different rates of tax are applicable to various
portions of a Gross-up Payment, the weighted average of such rates shall be
used.)
7.5 Opinion of Counsel. "Executive Counsel Opinion" means a legal
opinion of nationally recognized executive compensation counsel that there is a
reasonable basis to support a conclusion that the Gross-up Payment determined by
the Executive has been calculated in accord with this Article and applicable
law. " Employer Counsel Opinion" means a legal opinion of nationally recognized
executive compensation counsel that (a) there is a reasonable basis to support a
conclusion that the Gross-up Payment set forth of the Certificate of Employer's
independent auditors has been calculated in accord with this Article and
applicable law, and (b) there is no reasonable basis for the calculation of the
Gross-up Payment determined by the Executive.
7.6 Amount Increased or Contested. The Executive shall notify the
Employer in writing of any claim by the IRS or other taxing authority that, if
successful, would require the payment by the Employer of a Gross-up Payment.
Such notice shall include the nature of such claim and the date on which such
claim is due to be paid. The Executive shall give such notice as soon as
practicable, but no later than 10 business days, after the Executive first
obtains actual knowledge of such claim; provided, however, that any failure to
give or delay in giving such notice shall affect the Employer's obligations
under this Article only if and to
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the extent that such failure results in actual prejudice to the Employer. The
Executive shall not pay such claim less than 30 days after the Executive gives
such notice to the Employer (or, if sooner, the date on which payment of such
claim is due). If the Employer notifies the Executive in writing before the
expiration of such period that it desires to contest such claim, the Executive
shall:
a. give the Employer any information that it reasonably
requests relating to such claim,
b. take such action in connection with contesting such claim
as the Employer reasonably requests in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Employer,
c. cooperate with the Employer in good faith to contest such
claim, and
d. permit the Employer to participate in any proceedings
relating to such claim;
provided, however, that the Employer shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax, including related interest and penalties, imposed as a
result of such representation and payment of costs and expenses.
Without limiting the foregoing, the Employer shall control all
proceedings in connection with such contest and, at its sole option,
may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct the Executive to pay
the tax claimed and sue for a refund or contest the claim in any
permissible manner. The Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Employer shall
determine; provided, however, that if the Employer directs the
Executive to pay such claim and sue for a refund, the Employer shall
advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify the Executive, on an after-tax
basis, for any Excise Tax or income tax, including related interest or
penalties, imposed with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. The Employer's control of the contest shall be
limited to issues with respect to which a Gross-up Payment would be
payable. The Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the IRS or other taxing
authority.
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7.7 Refunds. If, after the receipt by the Executive of an amount
advanced by the Employer pursuant to Section 7.6, the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Employer's complying with the requirements of Section 7.6) promptly pay
the Employer the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Employer pursuant to Section 7.6, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Employer does not notify the Executive in
writing of its intent to contest such determination before the expiration of 30
days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-up Payment required to be paid. Any contest
of a denial of refund shall be controlled by Section 7.6.
7.8 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article VII. In the event of any assertion of liability
under this Section 7.8 against whichever of the Company or Services is not the
Employer, the party against which such liability is asserted shall succeed to
all of the rights and obligations of the Employer under Article VII.
ARTICLE VIII.
EXPENSES AND INTEREST
8.1 Legal Fees and Other Expenses.
a. If the Executive incurs legal, accounting and other fees or
other expenses in a good faith effort to obtain benefits under this
Agreement (including, without limitation, the fees and other expenses
of the Executive's legal counsel and the accounting and other fees and
expenses in connection with the delivery of the Opinion referred to in
Article VII), regardless of whether the Executive ultimately prevails,
the Employer shall reimburse the Executive on a monthly basis upon the
written request for such fees and expenses to the extent not reimbursed
under the Company's and Services' officers and directors liability
insurance policy, if any. The existence of any controlling case or
controlling regulatory law which is directly inconsistent with the
position taken by the Executive shall be evidence that the Executive
did not act in good faith.
b. Reimbursement of legal fees and expenses shall be made
monthly upon the written submission of a request for reimbursement
together with evidence that such fees and expenses are due and payable
or were paid by the Executive. If the Employer shall have reimbursed
the Executive for legal fees and expenses and it is later determined
that the Executive was not acting in good faith, all amounts paid on
behalf of, or reimbursed to, the Executive shall be promptly refunded
to the Employer.
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8.2 Interest. If the Employer does not pay any amount due to the
Executive under this Agreement within three days after such amount became due
and owing, interest shall accrue on such amount from the date it became due and
owing until the date of payment at a annual rate equal to two percent (2.0%)
above the base commercial lending rate announced by The Bank of America in
effect from time to time during the period of such nonpayment.
8.3 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article VIII. The right of refund referred to in the
last sentence of Section 8.1 b. shall inure to whichever of the Company or
Services originally paid the reimbursement to the Executive.
ARTICLE IX.
NO SET-OFF OR MITIGATION
9.1 No Set-off by Company or Services. The Executive's right to receive
when due the payments and other benefits provided for under this Agreement is
absolute, unconditional and subject to no set-off, counterclaim or legal or
equitable defense. Time is of the essence in the performance by the Company and
Services of their obligations under this Agreement. Any claim which the Company
or Services may have against the Executive, whether for a breach of this
Agreement or otherwise, shall be brought in a separate action or proceeding and
not as part of any action or proceeding brought by the Executive to enforce any
rights against the Company or Services under this Agreement.
9.2 No Mitigation. The Executive shall not have any duty to mitigate
the amounts payable by the Company or Services under this Agreement by seeking
new employment following termination. Except as specifically otherwise provided
in this Agreement, all amounts payable pursuant to this Agreement shall be paid
without reduction regardless of any amounts of salary, compensation or other
amounts which may be paid or payable to the Executive as the result of the
Executive's employment by another employer.
ARTICLE X.
CONFIDENTIALITY AND NONCOMPETITION
10.1 Confidentiality. Executive acknowledges that it is the policy of
the Company and its Subsidiaries to maintain as secret and confidential all
valuable and unique information and techniques acquired, developed or used by
the Company and its Subsidiaries relating to their business, operations,
employees and customers, which gives the Company and its Subsidiaries a
competitive advantage in the businesses in which the Company and its
Subsidiaries are engaged ("Confidential Information"). Executive recognizes that
all such Confidential Information is the sole and exclusive property of the
Company and its Subsidiaries, and that disclosure of Confidential Information
would cause damage to the Company and its Subsidiaries. Executive agrees that,
except as required by the duties of his
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employment with the Company and/or its Subsidiaries and except in connection
with enforcing the Executive's rights under this Agreement or if compelled by a
court or governmental agency, he will not, without the consent of the Company,
disseminate or otherwise disclose any Confidential Information obtained during
his employment with the Company and/or its Subsidiaries for so long as such
information is valuable and unique.
10.2 Non-competition/ Non-solicitation.
a. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive will not at any time directly or indirectly, in any capacity,
engage or participate in, or become employed by or render advisory or
consulting or other services in connection with any Prohibited Business
as defined in Section 10.2(d).
b. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive shall not make any financial investment, whether in the form
of equity or debt, or own any interest, directly or indirectly, in any
Prohibited Business. Nothing in this Section 10.2(b) shall, however,
restrict Executive from making any investment in any company whose
stock is listed on a national securities exchange or actively traded in
the over-the-counter market; provided that (1) such investment does not
give Executive the right or ability to control or influence the policy
decisions of any Prohibited Business, and (2) such investment does not
create a conflict of interest between Executive's duties hereunder and
Executive's interest in such investment.
c. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive shall not (1) employ any employee of the Company and/or its
Subsidiaries or (2) interfere with the Company's or any of its
Subsidiaries' relationship with, or endeavor to entice away from the
Company and/or its Subsidiaries any person, firm, corporation, or other
business organization who or which at any time (whether before or after
the date of Executive's termination of employment), was an employee,
customer, vendor or supplier of, or maintained a business relationship
with, any business of the Company and/or its Subsidiaries which was
conducted at any time during the period commencing one year prior to
the termination of employment.
d. For the purpose of this Section 10.2, "Prohibited Business"
shall be defined as any entity and any branch, office or operation
thereof, which is a direct and material competitor of the Company and/
or its Subsidiaries wherever the Company and/ or its Subsidiaries does
business, in the United States or abroad.
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10.3 Remedy. Executive and the Company specifically agree that, in the
event that Executive shall breach his obligations under this Article X, the
Company and its Subsidiaries will suffer irreparable injury and no adequate
remedy for such breach, and shall be entitled to injunctive relief therefor, and
in particular, without limiting the generality of the foregoing, the Company
shall not be precluded from pursuing any and all remedies it may have at law or
in equity for breach of such obligations; provided, however, that such breach
shall not in any manner or degree whatsoever limit, reduce or otherwise affect
the obligations of the Company and Services under this Agreement, and in no
event shall an asserted breach of the Executive's obligations under this Article
X constitute a basis for deferring or withholding any amounts otherwise payable
to the Executive under this Agreement.
ARTICLE XI.
MISCELLANEOUS
11.1 No Assignability. This Agreement is personal to the Executive and
without the prior written consent of the Company and Services 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.
11.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the Company, Services and their respective successors and assigns.
The Company and Services will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
their respective businesses or assets to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company or
Services, as applicable, would be required to perform it if no such succession
had taken place. Any successor to the business and/or assets of the Company or
Services which assumes or agrees to perform this Agreement by operation of law,
contract, or otherwise shall be jointly and severally liable with the Company
and Services under this Agreement as if such successor were the Company or
Services, as applicable.
11.3 Payments to Beneficiary. If the Executive dies before receiving
amounts to which the Executive is entitled under this Agreement, such amounts
shall be paid in a lump sum to the beneficiary designated in writing by the
Executive, or if none is so designated, to the Executive's estate.
11.4 Non-alienation of Benefits. Benefits payable under this Agreement
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, before actually being received by the
Executive, and any such attempt to dispose of any right to benefits payable
under this Agreement shall be void.
11.5 Severability. If any one or more articles, sections or other
portions of this Agreement are declared by any court or governmental authority
to be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any article, section or other
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portion not so declared to be unlawful or invalid. Any article, section or other
portion so declared to be unlawful or invalid shall be construed so as to
effectuate the terms of such article, section or other portion to the fullest
extent possible while remaining lawful and valid.
11.6 Amendments. Except as provided in Sections 2.2 and 11.14 hereof,
this Agreement shall not be altered, amended or modified except by written
instrument executed by the Company, Services and Executive.
11.7 Notices. All notices and other communications under this Agreement
shall be in writing and delivered by hand or by first class registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Name
Address
City, State Zip
If to the Company:
Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attention: Vice President, Administration
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If to Services:
Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attention: Vice President, Administration
or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
11.9 Governing Law. This Agreement shall be interpreted and construed
in accordance with the laws of the State of South Carolina without regard to its
choice of law principles.
11.10 Captions. The captions of this Agreement are not a part of the
provisions hereof and shall have no force or effect.
11.11 Tax Withholding. The Company and Services may withhold from any
amounts payable under this Agreement any federal, state or local taxes that are
required to be withheld pursuant to any applicable law or regulation.
11.12 No Waiver. The Executive's failure to insist upon strict
compliance with any provision of this Agreement shall not be deemed a waiver of
such provision or any other provision of this Agreement. A waiver of any
provision of this Agreement shall not be deemed a waiver of any other provision,
and any waiver of any default in any such provision shall not be deemed a waiver
of any later default thereof or of any other provision.
11.13 Entire Agreement. This Agreement contains the entire
understanding of the Company and Services and the Executive with respect to its
subject matter.
11.14 Cancellation. The Company and Services may, at any time prior to
a Change in Control, unilaterally cancel this Agreement on behalf of all parties
hereto by both of them (and not only one of them) notifying the Executive of
such cancellation in writing at least twelve (12) months prior to the effective
date of the cancellation, provided however that no such notice may be given
after an Imminent Change of Control Date.
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IN WITNESS WHEREOF, the Executive, Services and the Company have
executed this Agreement as of the date first above written.
---------------------------------
First Name Last Name
SAFETY-KLEEN CORP.
By:
---------------------------------
Kenneth W. Winger
President / Chief Executive Officer
SAFETY-KLEEN SERVICES, INC.
By:
---------------------------------
Kenneth W. Winger
President / Chief Executive Officer
22
Exhibit (10) (p)
SAFETY-KLEEN
CHANGE OF CONTROL SEVERANCE AGREEMENT
Name
coc sk-a-ambo120
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. - PURPOSES 1
ARTICLE II. - CERTAIN DEFINITIONS 1
2.1 Accrued Obligations 1
2.2 Agreement Term 1
2.3 Article 2
2.4 Beneficial owner 2
2.5 Cause 2
2.6 Change of Control 2
2.7 Code 2
2.8 Disability 2
2.9 Effective Date 2
2.10 Good Reason 3
2.11 Gross-up Payment 3
2.12 Imminent Change of Control Date 3
2.13 IRS 3
2.14 1934 Act 3
2.15 Notice of Termination 3
2.16 Plans 3
2.17 Policies 3
2.18 Post-Change Period 3
2.19 SEC 3
2.20 Section 3
2.21 Subsidiary 3
2.22 Termination Date 4
2.23 Termination Performance Period 4
2.24 Voting Securities 4
ARTICLE III. - POST-CHANGE PERIOD PROTECTIONS 4
3.1 Position and Duties 4
3.2 Compensation 5
3.3 Stock Options 7
3.4 Excess / Supplemental Plans 7
ARTICLE IV. - TERMINATION OF EMPLOYMENT 8
4.1 Disability 8
4.2 Death 8
4.3 Cause 8
4.4 Good Reason 9
<PAGE>
ARTICLE V. - OBLIGATIONS OF THE COMPANY UPON TERMINATION 10
5.1 If by the Executive for Good Reason or by the
Company Other Than for Cause or Disability 10
5.2 If by the Company for Cause 11
5.3 If by the Executive Other Than for Good Reason 12
5.4 If by the Company for Disability 12
5.5 If upon Death 12
5.6 Joint and Several Obligation 12
ARTICLE VI. - NON-EXCLUSIVITY OF RIGHTS 12
6.1 Waiver of Other Severance Rights 12
6.2 Other- Rights 12
ARTICLE VII. - CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY 13
7.1 Gross-up for Certain Taxes 13
7.2 Determination by the Executive 13
7.3 Additional Gross-up Amounts 14
7.4 Gross-up Multiple 14
7.5 Opinion of Counsel 15
7.6 Amount Increased or Contested 15
7.7 Refunds 16
7.8 Joint and Several Obligation 16
ARTICLE VIII. - EXPENSES AND INTEREST 16
8.1 Legal Fees and Other Expenses 16
8.2 Interest 17
ARTICLE IX. - NO SET-OFF OR MITIGATION 17
9.1 No Set-off by Company 17
9.2 No Mitigation 17
ARTICLE X. - CONFIDENTIALITY AND NON-COMPETITION 18
10.1 Confidentiality 18
10.2 Non-competition/ Non-Solicitation 18
10.3 Remedy 19
ARTICLE XI. - MISCELLANEOUS 19
11.1 No Assignability 19
11.2 Successors 19
11.3 Payments to Beneficiary 19
11.4 Non-alienation of Benefits 20
11.5 Severability 20
11.6 Amendments 20
11.7 Notices 20
11.8 Counterparts 21
<PAGE>
11.9 Governing Law 21
11.10 Captions 21
11.11 Tax Withholding 21
11.12 No Waiver 21
11.13 Entire Agreement 21
11.14 Cancellation 21
<PAGE>
SAFETY-KLEEN
CHANGE OF CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT dated as of October 5, 1999, is made among SAFETY- KLEEN
CORP., a Delaware corporation having its principal place of business in
Columbia, South Carolina (the "Company"), SAFETY-KLEEN SERVICES, INC., a
Delaware corporation having its principal place of business in Columbia, South
Carolina and a wholly owned subsidiary of the Company ("Services") and
(FirstName Last Name) (the "Executive"), a resident of (State).
The Company, Services and the Executive agree that this agreement
supersedes any prior agreement between any of them which specifically provides
benefits upon a change in control of the Company or Services, and further agree
that, if benefits become payable to the Executive pursuant to Article V hereof,
such benefits will be in lieu of any other severance or termination benefits to
which the Executive otherwise would be entitled under any other severance or
termination plan, policy or arrangement of the Company or Services.
ARTICLE I.
PURPOSES
The Board of Directors of the Company (the "Board") and the Board of
Directors of Services have determined that it is in the best interests of the
Company and its stockholders, and of Services, to assure that the Company and
Services will have the continued service of the Executive, despite the
possibility or occurrence of a change of control of the Company or Services. The
Board believes it is imperative to reduce the distraction of the Executive that
would result from the personal uncertainties caused by a pending or threatened
change of control, to encourage the Executive's full attention and dedication to
the Company and Services, and to provide the Executive with compensation and
benefits arrangements upon a change of control which ensure that the
expectations of the Executive will be satisfied and are competitive with those
of similarly-situated corporations. This Agreement is intended to accomplish
these objectives.
ARTICLE II.
CERTAIN DEFINITIONS
When used in this Agreement, the terms specified below shall have the
following meanings:
2.1 "Accrued Obligations" -- see Section 5.3.
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2.2 "Agreement Term" means the period commencing on the date of this
Agreement and ending on the date which is twelve (12) months following the date
that both the Company and Services give notice of cancellation pursuant to
Section 11.14 hereof (the "Expiration Date"); provided, however, that if an
Imminent Change of Control Date occurs before the Expiration Date, then the
Agreement Term shall automatically extend to a date which is twelve (12) months
after the date of the Imminent Change of Control Date: and provided further,
that if a Change of Control occurs before the Expiration Date, the Expiration
Date shall automatically be extended to the last day of the Post-Change Period.
2.3 "Article" means an article of this Agreement.
2.4 "Beneficial owner" means such term as defined in Rule 13d-3 of the
SEC under the 1934 Act.
2.5 "Cause" - see Section 4.3(b).
2.6 "Change of Control" means, except as otherwise provided below, the
occurrence of any of the following:
a. (X) any person (as such term is used in Rule 13(d)- 5 of
the SEC under the 1934 Act) or group (as such term is defined in
Section 13(d) of the 1934 Act), other than a Subsidiary or any employee
benefit plan (or related trust) of the Company or a Subsidiary, becomes
the beneficial owner of 15% or more of the common stock of the Company
or of Voting Securities representing 15% or more of the combined voting
power of all Voting Securities of the Company, (Y) Laidlaw Inc. ceases
to be the beneficial owner, directly or indirectly, of 43.6% or more of
the Voting Securities of the Company and (Z) another person or group
becomes the beneficial owner of Voting Securities of the Company which
represent a larger number of Voting Securities than those held by
Laidlaw Inc.
b. within a period of 24 months or less, the individuals who,
as of any date, constitute the Board (the "Incumbent Directors") cease
for any reason to constitute at least a majority of the Board unless at
the end of such period, the majority of individuals then constituting
the Board were nominated upon the recommendation of a majority of the
Incumbent Directors.
c. the sale or other disposition of all or substantially all
of the assets of the Company or Services.
d. the sale or other disposition by the Company of 50% or more
of the Voting Securities of Services or any other transaction which
results in any person, other than the Company or a subsidiary or any
employee benefit plan of the Company, becoming the beneficial owner of
50% or more of the Voting Securities of Services.
2.7 "Code" means the Internal Revenue Code of 1986, as amended.
2.8 "Disability" -- see Section 4.1(b).
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2.9 "Effective Date" means the first date on which a Change of Control
occurs during the Agreement Term. Despite anything in this Agreement to the
contrary, if the Company or Services terminates the Executive's employment
before the date of a Change of Control, and if the Executive reasonably
demonstrates that such termination of employment (a) was at the request of a
third party who had taken steps reasonably calculated to effect the Change of
Control or (b) otherwise arose in connection with or anticipation of the Change
of Control, then "Effective Date" shall mean the date immediately before the
date of such termination of employment.
2.10 "Employer" means whichever of the Company or Services is the
primary common-law employer of the Executive at the relevant time.
2.11 "Good Reason" -- see Section 4.4(b).
2.12 "Gross-up Payment" -- see Section 7.1.
2.13 "Imminent Change of Control Date" means any date on which occurs
(a) a presentation to the Company's stockholders generally or any of the
Company's directors or executive officers of a proposal or offer for a Change of
Control, or (b) the public announcement (whether by advertisement, press
release, press interview, public statement, SEC filing or otherwise) of a
proposal or offer for a Change of Control, and in case of either (a) or (b) such
proposal or offer remains effective and unrevoked.
2.14 "IRS" means the Internal Revenue Service.
2.15 "1934 Act" means the Securities Exchange Act of 1934.
2.16 "Notice of Termination" means a written notice given in accordance
with Section 11.7 which sets forth (a) the specific termination provision in
this Agreement relied upon by the party giving such notice, (b) in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under such termination provision and (c) if the
Termination Date is other than the date of receipt of such Notice of
Termination, the Termination Date.
2.17 "Plans" means plans, programs, policies or practices of the
Company and Services.
2.18 "Policies" means policies, practices or procedures of the Company
and Services.
2.19 "Post-Change Period" means the period commencing on the Effective
Date and ending on the third anniversary of such date.
2.20 "SEC" means the Securities and Exchange Commission.
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2.21 "Section" means, unless the context otherwise requires, a section
of this Agreement.
2.22 "Subsidiary" means a corporation as defined in Section 424(f) of
the Code with the Company being treated as the employer corporation for purposes
of this definition.
2.23 "Termination Date" means the date of receipt of the Notice of
Termination or any later date specified in such notice (which date shall be not
more than 15 days after the giving of such notice), as the case may be;
provided, however, that (a) if the Company or Services terminates the
Executive's employment other than for Cause or Disability, then the Termination
Date shall be the date of receipt of such Notice of Termination and (b) if the
Executive's employment is terminated by reason of death or Disability, then the
Termination Date shall be the date of death of the Executive or the "Disability
Effective Date" (as defined in Section 4.1), as the case may be.
2.24 "Termination Performance Period" - see Section 3.2(b)(2).
2.25 "Voting Securities" of a corporation means securities of such
corporation that are entitled to vote generally in the election of directors of
such corporation.
ARTICLE III.
POST-CHANGE PERIOD PROTECTIONS
3.1 Position and Duties.
a. During the Post-Change Period, (1) the Executive's position
with the Company and Services, (in the case of a Change of Control
involving the Company) or with Services (in the case of a Change of
Control involving Services) (including offices, titles, reporting
requirements and responsibilities), authority and duties shall be at
least commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the 90-day
period immediately before the Effective Date and (2) the Executive's
services shall be performed at the location where the Executive was
employed immediately before the Effective Date or any other location
less than 40 miles from such former location.
b. During the Post-Change Period (other than any periods of
vacation, sick leave or disability to which the Executive is entitled),
the Executive agrees to devote the Executive's full attention and time
to the business and affairs of the Company and Services and, to the
extent necessary to discharge the duties assigned to the Executive in
accordance with this Agreement, to use the Executive's best efforts to
perform faithfully and efficiently such duties. During the Post-Change
Period, the Executive may (1) serve on corporate, civic or charitable
boards or committees, (2) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (3) manage
personal investments, so long as such activities are consistent with
the Policies of the Company or Services at the Effective Date and do
not significantly
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interfere with the performance of the Executive's duties under this
Agreement. To the extent that any such activities have been conducted
by the Executive before the Effective Date and were consistent with the
Policies of the Company and Services at the Effective Date, the
continued conduct of such activities (or activities similar in nature
and scope) after the Effective Date shall not be deemed to interfere
with the performance of the Executive's duties under this Agreement.
3.2 Compensation.
a. Base Salary. During the Post-Change Period, the Company and
Services shall pay or cause to be paid to the Executive an annual base
salary in cash ("Guaranteed Base Salary"), which shall be paid in a
manner consistent with the Company's or Services' (as applicable to the
Executive) payroll practices in effect immediately before the Effective
Date at a rate at least equal to 12 times the highest monthly base
salary paid or payable to the Executive by the Company and Services in
respect of the 12-month period immediately before the Effective Date.
During the Post-Change Period, the Guaranteed Base Salary shall be
reviewed at least annually and shall be increased at any time and from
time to time as shall be substantially consistent with increases in
base salary awarded to other peer executives of the Company and
Services. Any increase in Guaranteed Base Salary shall not limit or
reduce any other obligation of the Company and Services to the
Executive under this Agreement. After any such increase, the Guaranteed
Base Salary shall not be reduced and the term "Guaranteed Base Salary"
shall thereafter refer to the increased amount.
b. Target Bonus. During the Post-Change Period, the Company
and Services shall pay or cause to be paid to the Executive a bonus
(the "Guaranteed Bonus") for each Performance Period which ends during
the Post-Change Period. "Performance Period" means each period of time
designated in accordance with any bonus arrangement of the Company or
Services ("Bonus Plan") which is based upon performance and approved by
the Board or any committee of the Board. The Guaranteed Bonus shall be
at least equal to the greatest of:
(1) the On Plan Bonus, which shall mean the cash bonus which
the Executive would accrue under any Bonus Plan for the Performance
Period for which the Guaranteed Bonus is awarded ("Current Performance
Period") as if the performance achieved 100% of plan established
pursuant to such Bonus Plan and the maximum level of the discretionary
portion is achieved;
(2) the Actual Bonus, which shall mean the cash bonus which
Executive would accrue under any Bonus Plan for the Current Performance
Period if the performance during the Current Performance Period were
measured by actual performance; provided, however, that for purposes of
Article V of this Agreement, the Actual Bonus for the Performance
Period in which the Termination Date occurred (the "Termination
Performance Period") shall not be less than the cash bonus which the
Executive would accrue under any Bonus Plan if performance during that
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Termination Performance Period were measured by the actual performance
during the Termination Performance Period before the Termination Date
projected to the last day of such Performance Period and the maximum
level of the discretionary portion is achieved; and
(3) the Historical Bonus, which shall mean the greatest bonus
that the Executive accrued under any Bonus Plan in the last three (3)
Performance Periods that ended before the Post-Change Period; provided,
however, that for purposes of Article V of this Agreement, the
Historical Bonus for the Performance Period in which the Termination
Date occurred shall not be less than the cash bonus that the Executive
accrued in the last Performance Period that ended before the
Termination Date.
c. Incentive, Savings and Retirement Plans. In addition to
Guaranteed Base Salary and Guaranteed Bonus payable as provided in this
Section, the Executive shall be entitled to participate during the
Post-Change Period in all incentive (including long-term incentives),
savings and retirement Plans applicable to other peer executives of the
Company and Services, but in no event shall such Plans provide the
Executive with incentive (including long-term incentives), savings and
retirement benefits which are less favorable, in the aggregate, than
the most favorable of those provided by the Company or Services to the
Executive or to peer executives under such Plans as in effect at any
time during the 90-day period immediately before the Effective Date.
d. Welfare Benefit Plans. During the Post-Change Period, the
Executive and the Executive's family shall be eligible to participate
in, and receive all benefits under, welfare benefit Plans provided by
the Company and Services (including, without limitation, medical,
prescription, dental, disability, salary continuance, individual life,
group life, dependent life, accidental death and travel accident
insurance Plans) and applicable to other peer executives of the Company
and Services and their families, but in no event shall such Plans
provide benefits which in any case are less favorable, in the
aggregate, than the most favorable of those provided to the Executive
or to peer executives under such Plans as in effect at any time during
the 90-day period immediately before the Effective Date.
e. Fringe Benefits. During the Post-Change Period, the
Executive shall be entitled to fringe benefits and other executive
perquisites in accordance with the most favorable Plans applicable to
peer executives of the Company and Services, but in no event shall such
Plans provide fringe benefits and other executive perquisites which in
any case are less favorable, in the aggregate, than the most favorable
of those provided by the Company and Services to the Executive or to
peer executives under such Plans in effect at any time during the
90-day period immediately before the Effective Date.
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f. Expenses. During the Post-Change Period, the Executive
shall be entitled to prompt reimbursement of all reasonable
employment-related expenses incurred by the Executive upon the
Company's or Services' (as applicable) receipt of accountings in
accordance with the most favorable Policies applicable to peer
executives of the Company and Services, but in no event shall such
Policies be less favorable, in the aggregate, than the most favorable
of those provided by the Company and Services to the Executive or to
peer executives under such Policies in effect at any time during the
90-day period immediately before the Effective Date.
g. Office and Support Staff. During the Post-Change Period,
the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal
secretarial and other assistance in accordance with the most favorable
Policies applicable to peer executives of the Company and Services, but
in no event shall such Policies be less favorable, in the aggregate,
than the most favorable of those provided by the Company and Services
to the Executive or to peer executives under such Policies in effect at
any time during the 90-day period immediately before the Effective
Date.
h. Vacation. During the Post-Change Period, the Executive
shall be entitled to paid vacation in accordance with the most
favorable Policies applicable to peer executives of the Company and
Services, but in no event shall such Policies be less favorable, in the
aggregate, than the most favorable of those provided by the Company and
Services to the Executive or to peer executives under such Policies in
effect at any time during the 90-day period immediately before the
Effective Date.
3.3 Stock Options.
In addition to the other benefits provided in this Section, on the
Effective Date, the Employer shall pay to the Executive a lump-sum cash payment
equal to the spread (fair market value over exercise price) of all outstanding
options granted to the Executive for shares of common stock of the Company
whether vested or not vested on the Effective Date. Whichever of the Company and
Services is not the Employer, shall be jointly and severally liable for the
obligation of the Employer under this Section 3.3.
3.4 Excess/Supplemental Plans.
In addition to the other benefits provided in this Section, on the
Effective Date, the Employer shall pay to Executive an amount equal to the value
(determined using (i) the interest rate published by the PBGC, as of the
calendar month immediately prior to the Effective Date, for the specific purpose
of determining the present value of lump sum benefits as discussed in 29 C.F.R.
4044 and (ii) the UP 84 Mortality Table) of the Executive's accrued benefits
under (1) the Safety-Kleen Supplemental Executive Retirement Plan, or (2) any
such successor plan or other nonqualified unfunded retirement Plan as may be in
effect as of (or as may have been in effect at any time during the 90-day period
immediately before)
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the Effective Date (the "Excess/Supplemental Plans"), irrespective of whether or
not Executive is vested therein, and without any reduction for early retirement,
early payout and social security benefits, and taking into account for benefit
accrual purposes, the Executive's entire period of service with the Company and
its affiliates as reflected on the Company's Human Resources database. Whichever
of the Company and Services is not the Employer, shall be jointly and severally
liable for the obligation of the Employer under this Section 3.3.
ARTICLE IV.
TERMINATION OF EMPLOYMENT
4.1 Disability.
a. During the Post-Change Period, the Employer may terminate
the Executive's employment upon the Executive's Disability (as defined
in Section 4.1(b)) by giving the Executive or his legal representative,
as applicable, (1) written notice in accordance with Section 11.7 of
the Employer's intention to terminate the Executive's employment
pursuant to this Section and (2) a certification of the Executive's
Disability by a physician selected by the Employer or its insurers and
reasonably acceptable to the Executive or the Executive's legal
representative. The Executive's employment shall terminate effective on
the 30th day (the 'Disability Effective Date') after the Executive's
receipt of such notice unless, before the Disability Effective Date,
the Executive shall have resumed the full-time performance of the
Executive's duties.
b. "Disability" means any medically determinable physical or
mental impairment that has lasted for a continuous period of not less
than six months and can be expected to be permanent or of indefinite
duration. and that renders the Executive unable to perform the
essential functions required under this Agreement with or without
reasonable accommodation.
4.2 Death. The Executive's employment shall terminate automatically
upon the Executive's death during the Post-Change Period.
4.3 Cause.
a. During the Post-Change Period, the Employer may terminate
the Executive's employment for Cause.
b. "Cause" means any of the following: (i) conviction of the
Executive of, or the Executive's pleading guilty or nolo contendere to,
any felony which includes as an element of the crime a premeditated
intention to commit the act, (ii) Executive's inability to perform his
duties due to habitual alcohol or drug addiction, (iii) serious
misconduct involving dishonesty in the course of Executive's
employment, or (iv) the Executive's habitual neglect of his duties;
except that Cause shall not mean:
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(1) bad judgment or negligence other than habitual
neglect of duty;
(2) any act or omission believed by the Executive in
good faith to have been in or not opposed to the interest of
the Company and Services (without intent of the Executive to
gain, directly or indirectly, a profit to which the Executive
was not legally entitled);
(3) any act or omission with respect to which a
determination could properly have been made by the Board that
the Executive met the applicable standard of conduct for
indemnification or reimbursement under the Company's or
Services' by-laws, any applicable indemnification agreement,
or applicable law, in each case in effect at the time of such
act or omission; or
(4) any act or omission with respect to which notice
of termination of employment of the Executive is given more
than 12 months after the earliest date on which any member of
the Board, not a party to the act or omission, knew or should
have known of such act or omission.
c. Any termination of the Executive's employment by the
Employer for Cause shall be communicated to the Executive by a Notice
of Termination.
4.4 Good Reason.
a. During the Post-Change Period, the Executive may terminate
his or her employment for Good Reason.
b. "Good Reason" means any of the following:
(1) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including offices,
titles, reporting requirements or responsibilities), authority or
duties as contemplated by Section 3.1 (a)(1), or any other action by
the Company or Services which results in a diminution on or other
material adverse change in such position, authority or duties;
(2) any failure by the Company or Services to comply with any
of the provisions of Article III;
(3) the Company's or Services' requiring the Executive to be
based at any office or location other than the location described in
Section 3.1(a)(2);
(4) any other material adverse change to the terms and
conditions of the Executive's employment; or
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(5) any purported termination by the Employer of the
Executive's employment other than as expressly permitted by this
Agreement (any such purported termination shall not be effective for
any other purpose under this Agreement).
Any reasonable determination of "Good Reason" made in good faith by the
Executive shall be conclusive.
c. Any termination of employment by the Executive for Good
Reason shall be communicated to the Employer by a Notice of
Termination. A passage of time prior to delivery of a Notice of
Termination or a failure by the Executive to include in the Notice of
Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Executive under this
Agreement or preclude the Executive from asserting such fact or
circumstance in enforcing rights under this Agreement.
ARTICLE V.
OBLIGATIONS OF THE EMPLOYER UPON TERMINATION
5.1 If by the Executive for Good Reason or by the Employer Other Than
for Cause or Disability. If, during the Post-Change Period, the Employer shall
terminate Executive's employment other than for Cause or Disability, or if the
Executive shall terminate employment for Good Reason, the Employer shall
immediately pay the Executive, in addition to all vested rights arising from the
Executive's employment as specified in Article III, a cash amount equal to the
sum of the following amounts:
a. to the extent not previously paid, the Guaranteed Base
Salary and any accrued vacation pay through the Termination Date;
b. the difference between (1) the product of (A) the
Guaranteed Bonus, multiplied by (B) a fraction, the numerator of which
is the number of days in the Termination Performance Period which
elapsed before the Termination Date, and the denominator of which is the
total number of days in the Termination Performance Period, and (2) the
amount of any Guaranteed Bonus previously paid to the Executive with
respect to the Termination Performance Period;
c. all amounts previously deferred by or an accrual to the
benefit of the Executive under any nonqualified deferred compensation
or pension plan, together with any accrued earnings thereon, and not
yet paid by the Company or Services;
d. an amount equal to the product of (1) three (3) multiplied
by (2) the sum of (A) the Guaranteed Base Salary and (B) the Guaranteed
Bonus;
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e. an amount equal to the sum of the value of the unvested
portion of the Executive's accounts or accrued benefits under any
qualified plan maintained by the Company or Services, as of the
Termination Date;
f. if the Company or Services maintains any cash-based long
term incentive bonus plan or arrangement, an amount in satisfaction of
the Company's or Services (as applicable) obligation to the Executive
under such plan or arrangement equal to the amount which would be
payable to the Executive if (i) the Company or Services (as applicable)
attained target performance over the entire performance period and (ii)
the Executive had remained employed during the entire performance
period;
g. the difference between (1) an amount equal to the value
(determined using the actuarial assumptions then applied by the Pension
Benefit Guaranty Corporation for determining immediate annuity present
values) of the Executive's accrued benefits under the
Excess/Supplemental Plans (taking into account for benefit accrual
purposes the Executive's entire period of service with the Company and
its affiliates as reflected on the Company's Human Resources database)
calculated as though the Executive (A) continued to accrue benefits
under the Excess/Supplemental Plans for a period of three years after
the Termination Date, and (B) received compensation during each year of
such three-year period equal to the sum of the Guaranteed Base Salary
and the highest Guaranteed Bonus paid (or payable) to the Executive in
the three years preceding the Termination Date, and (C) were three (3)
years older than his age at the Termination Date and (2) the amount
actually previously paid to Executive pursuant to Section 3.4; provided
however, that the amount computed under this paragraph shall not be
reduced for early retirement, early payout and social security benefits;
further provided, however, that such amount shall be paid irrespective
of whether Executive is vested in any of the Excess/ Supplemental Plans;
and
h. pay Executive outplacement services, to a maximum of
$25,000.
Until the third anniversary of the Termination Date or such later date
as any Plan of the Company or Services may specify, the Employer shall
continue to provide to the Executive and shall provide to the Executive's
family welfare benefits (including, without limitation, medical, prescription,
dental, disability, salary continuance, individual life, group life,
accidental death and travel accident insurance plans and programs), fringe
benefits and other executive perquisites, which are at least as favorable as
the most favorable Plans of the Company and Services applicable to Executive
and other peer executives and their families as of the Termination Date, but
which are in no event less favorable than the most favorable Plans of the
Company and Services applicable to the Executive and other peer executives and
their families during the 90-day period immediately before the Effective Date.
The cost to the Executive of such welfare benefits shall not exceed the cost
of such benefits to the Executive immediately before the Termination Date or,
if less, the Effective Date. Notwithstanding the
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foregoing, if the Executive is covered under any medical, life, or disability
insurance plan(s) provided by a subsequent employer, then the amount of coverage
required to be provided by the Employer hereunder shall be secondary to the
coverage provided by the subsequent employer's medical, life, or disability
insurance plan(s). The Executive's rights under this Section shall be in
addition to, and not in lieu of, any post-termination continuation coverage or
conversion rights the Executive may have pursuant to applicable law, including
without limitation continuation coverage required by Section 4980B of the Code
and Section 601 et. seq. of the Employee Retirement Income Security Act of 1974,
as amended.
5.2 If by the Employer for Cause. If the Employer terminates the
Executive's employment for Cause during the Post-Change Period, this Agreement
shall terminate without further obligation by the Employer to the Executive,
other than the obligation immediately to pay the Executive in cash the
Executive's Guaranteed Base Salary through the Termination Date, plus the amount
of any compensation previously deferred by the Executive, plus any accrued
vacation pay, in each case to the extent not previously paid.
5.3 If by the Executive Other Than for Good Reason. If the Executive
terminates employment during the Post-Change Period other than for Good Reason,
Disability or death, this Agreement shall terminate without further obligations
by the Employer, other than the obligation immediately to pay the Executive in
cash all amounts specified in clauses (a), (b) and (c) of the first sentence of
Section 5.1 (such amounts collectively, the "Accrued Obligations").
5.4 If by the Employer for Disability. If the Employer terminates the
Executive's employment by reason of the Executive's Disability during the
Post-Change Period, this Agreement shall terminate without further obligations
to the Executive, other than
(a) the Employer's obligation immediately to pay the Executive
in cash all Accrued Obligations, and
(b) the Executive's right after the Disability Effective Date
to receive disability and other benefits at least equal to the greater
of (1) those provided under the most favorable disability Plans
applicable to peer executives of the Company or Services in effect
immediately before the Termination Date or (2) those provided under the
most favorable disability Plans of the Company and Services in effect
at any time during the 90-day period immediately before the Effective
Date.
5.5 If upon Death. If the Executive's employment is terminated by
reason of the Executive's death during the Post-Change Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than the obligation of the Employer
immediately to pay the Executive's estate or beneficiary in cash all Accrued
Obligations. Despite anything in this Agreement to the contrary, the Executive's
family shall be entitled to receive benefits at least equal to the most
favorable benefits provided by the Company and Services to the surviving
families of peer executives
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of the Company or Services under such Plans, but in no event shall such Plans
provide benefits which in each case are less favorable, in the aggregate, than
the most favorable of those provided by the Company and Services to the
Executive under such Plans in effect at any time during the 90-day period
immediately before the Effective Date.
5.6 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article V.
ARTICLE VI.
NON-EXCLUSIVITY OF RIGHTS
6.1 Waiver of Other Severance Rights. To the extent that payments are
made to the Executive pursuant to Section 5.1, the Executive hereby waives the
right to receive severance payments under any other Plan or agreement of the
Company or Services.
6.2 Other Rights. Except as provided in Section 6.1 and in the second
paragraph of this Agreement, this Agreement shall not prevent or limit the
Executive's continuing or future participation in any benefit, bonus, incentive
or other Plans, provided by the Company or any of its Subsidiaries and for which
the Executive may qualify, nor shall this Agreement limit or otherwise affect
such rights as the Executive may have under any other agreements with the
Company or any of its Subsidiaries. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any Plan of the Company or
any of its Subsidiaries and any other payment or benefit required by law at or
after the Termination Date shall be payable in accordance with such Plan or
applicable law except as expressly modified by this Agreement.
ARTICLE VII.
CERTAIN ADDITIONAL PAYMENTS BY THE EMPLOYER
7.1 Gross-up for Certain Taxes. If it is determined (by the reasonable
computation of the Employer's independent auditors, which determinations shall
be certified to by such auditors and set forth in a written certificate
("Certificate") delivered to the Executive) that any benefit received or deemed
received by the Executive from the Company or Services pursuant to this
Agreement or otherwise (collectively, the "Payments") is or will become subject
to any excise tax under Section 4999 of the Code or any similar tax payable
under any United States federal, state, local or other law (such excise tax and
all such similar taxes collectively, "Excise Taxes"), then the Employer shall,
immediately after such determination, pay the Executive an amount (the "Gross-up
Payment") equal to the product of
(a) the amount of such Excise Taxes
multiplied by
(b) the Gross-up Multiple (as defined in Section 7.4).
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The Gross-up Payment is intended to compensate the Executive for the
Excise Taxes and any federal, state, local or other income or excise taxes or
other taxes payable by the Executive with respect to the Gross-up Payment.
The Executive or the Employer may at any time request the preparation
and delivery to the Executive of a Certificate. The Employer shall, in addition
to complying with Section 7.2, cause all determinations and certifications under
the Article to be made as soon as reasonably possible and in adequate time to
permit the Executive to prepare and file the Executive's individual tax returns
on a timely basis.
7.2 Determination by the Executive.
a. If the Employer shall fail to deliver a Certificate to the
Executive (and to pay to the Executive the amount of the Gross-up
Payment, if any) within 14 days after receipt from the Executive of a
written request for a Certificate, or if at any time following receipt
of a Certificate the Executive disputes the amount of the Gross-up
Payment set forth therein, the Executive may elect to demand the
payment of the amount which the Executive, in accordance with an
opinion of counsel to the Executive ("Executive Counsel Opinion"),
determines to be the Gross-up Payment. Any such demand by the Executive
shall be made by delivery to the Employer of a written notice which
specifies the Gross-up Payment determined by the Executive and an
Executive Counsel Opinion regarding such Gross-up Payment (such written
notice and opinion collectively, the "Executive's Determination").
Within 14 days after delivery of the Executive's Determination to the
Employer, the Employer shall either (1 ) pay the Executive the Gross-up
Payment set forth in the Executive's Determination (less the portion of
such amount, if any, previously paid to the Executive by the Employer)
or (2) deliver to the Executive a Certificate specifying the Gross-up
Payment determined by the Employer's independent auditors, together
with an opinion of the Employer's counsel (" Employer Counsel
Opinion"), and pay the Executive the Gross-up Payment specified in such
Certificate. If for any reason the Employer fails to comply with clause
(2) of the preceding sentence, the Gross-up Payment specified in the
Executive's Determination shall be controlling for all purposes.
b. If the Executive does not make a request for, and the
Employer does not deliver to the Executive, a Certificate, the Employer
shall, for purposes of Section 7.3, be deemed to have determined that
no Gross-up Payment is due.
7.3 Additional Gross-up Amounts. If, despite the initial conclusion of
the Employer and/or the Executive that certain Payments are neither subject to
Excise Taxes nor to be counted in determining whether other Payments are subject
to Excise Taxes (any such item, a "Non-Parachute Item"), it is later determined
(pursuant to the subsequently-enacted provisions of the Code, final regulations
or published rulings of the IRS, final judgment of a court of competent
jurisdiction or the Employer's independent auditors) that any of the
Non-Parachute Items are subject to Excise Taxes, or are to be counted in
determining whether any
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Payments are subject to Excise Taxes, with the result that the amount of Excise
Taxes payable by the Executive is greater than the amount determined by the
Employer or the Executive pursuant to Section 7.1 or 7.2, as applicable, then
the Employer shall pay the Executive an amount (which shall also be deemed a
Gross-up Payment) equal to the product of
(a) the sum of (1) such additional Excise Taxes and (2) any
interest, fines, penalties, expenses or other costs incurred by the
Executive as a result of having taken a position in accordance with a
determination made pursuant to Section 7.1
multiplied by
(b) the Gross-up Multiple.
7.4 Gross-up Multiple. The Gross-up Multiple shall equal a fraction,
the numerator of which is one (1.0), and the denominator of which is one (1.0)
minus the sum, expressed as a decimal fraction, of the rates of all federal,
state, local and other income and other taxes and any Excise Taxes applicable to
the Gross-up Payment. (If different rates of tax are applicable to various
portions of a Gross-up Payment, the weighted average of such rates shall be
used.)
7.5 Opinion of Counsel. "Executive Counsel Opinion" means a legal
opinion of nationally recognized executive compensation counsel that there is a
reasonable basis to support a conclusion that the Gross-up Payment determined by
the Executive has been calculated in accord with this Article and applicable
law. " Employer Counsel Opinion" means a legal opinion of nationally recognized
executive compensation counsel that (a) there is a reasonable basis to support a
conclusion that the Gross-up Payment set forth of the Certificate of Employer's
independent auditors has been calculated in accord with this Article and
applicable law, and (b) there is no reasonable basis for the calculation of the
Gross-up Payment determined by the Executive.
7.6 Amount Increased or ontested. The Executive shall notify the
Employer in writing of any claim by the IRS or other taxing authority that, if
successful, would require the payment by the Employer of a Gross-up Payment.
Such notice shall include the nature of such claim and the date on which such
claim is due to be paid. The Executive shall give such notice as soon as
practicable, but no later than 10 business days, after the Executive first
obtains actual knowledge of such claim; provided, however, that any failure to
give or delay in giving such notice shall affect the Employer's obligations
under this Article only if and to the extent that such failure results in actual
prejudice to the Employer. The Executive shall not pay such claim less than 30
days after the Executive gives such notice to the Employer (or, if sooner, the
date on which payment of such claim is due). If the Employer notifies the
Executive in writing before the expiration of such period that it desires to
contest such claim, the Executive shall:
a. give the Employer any information that it reasonably
requests relating to such claim,
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b. take such action in connection with contesting such claim
as the Employer reasonably requests in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Employer,
c. cooperate with the Employer in good faith to contest such
claim, and
d. permit the Employer to participate in any proceedings
relating to such claim;
provided, however, that the Employer shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax, including related interest and penalties, imposed as a
result of such representation and payment of costs and expenses.
Without limiting the foregoing, the Employer shall control all
proceedings in connection with such contest and, at its sole option,
may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct the Executive to pay
the tax claimed and sue for a refund or contest the claim in any
permissible manner. The Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Employer shall
determine; provided, however, that if the Employer directs the
Executive to pay such claim and sue for a refund, the Employer shall
advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify the Executive, on an after-tax
basis, for any Excise Tax or income tax, including related interest or
penalties, imposed with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. The Employer's control of the contest shall be
limited to issues with respect to which a Gross-up Payment would be
payable. The Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the IRS or other taxing
authority.
7.7 Refunds. If, after the receipt by the Executive of an amount
advanced by the Employer pursuant to Section 7.6, the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Employer's complying with the requirements of Section 7.6) promptly pay
the Employer the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Employer pursuant to Section 7.6, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Employer does not notify the Executive in
writing of its intent to contest such determination before the expiration of 30
days after such determination, then such
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advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-up
Payment required to be paid. Any contest of a denial of refund shall be
controlled by Section 7.6.
7.8 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article VII. In the event of any assertion of liability
under this Section 7.8 against whichever of the Company or Services is not the
Employer, the party against which such liability is asserted shall succeed to
all of the rights and obligations of the Employer under Article VII.
ARTICLE VIII.
EXPENSES AND INTEREST
8.1 Legal Fees and Other Expenses.
a. If the Executive incurs legal, accounting and other fees or
other expenses in a good faith effort to obtain benefits under this
Agreement (including, without limitation, the fees and other expenses
of the Executive's legal counsel and the accounting and other fees and
expenses in connection with the delivery of the Opinion referred to in
Article VII), regardless of whether the Executive ultimately prevails,
the Employer shall reimburse the Executive on a monthly basis upon the
written request for such fees and expenses to the extent not reimbursed
under the Company's and Services' officers and directors liability
insurance policy, if any. The existence of any controlling case or
controlling regulatory law which is directly inconsistent with the
position taken by the Executive shall be evidence that the Executive
did not act in good faith.
b. Reimbursement of legal fees and expenses shall be made
monthly upon the written submission of a request for reimbursement
together with evidence that such fees and expenses are due and payable
or were paid by the Executive. If the Employer shall have reimbursed
the Executive for legal fees and expenses and it is later determined
that the Executive was not acting in good faith, all amounts paid on
behalf of, or reimbursed to, the Executive shall be promptly refunded
to the Employer.
8.2 Interest. If the Employer does not pay any amount due to the
Executive under this Agreement within three days after such amount became due
and owing, interest shall accrue on such amount from the date it became due and
owing until the date of payment at a annual rate equal to two percent (2.0%)
above the base commercial lending rate announced by The Bank of America in
effect from time to time during the period of such nonpayment.
8.3 Joint and Several Obligation. Whichever of the Company and Services
is not the Employer shall be jointly and severally liable for the obligations of
the Employer under this Article VIII. The right of refund referred to in the
last sentence of Section 8.1 b. shall inure to whichever of the Company or
Services originally paid the reimbursement to the Executive.
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ARTICLE IX.
NO SET-OFF OR MITIGATION
9.1 No Set-off by Company or Services. The Executive's right to receive
when due the payments and other benefits provided for under this Agreement is
absolute, unconditional and subject to no set-off, counterclaim or legal or
equitable defense. Time is of the essence in the performance by the Company and
Services of their obligations under this Agreement. Any claim which the Company
or Services may have against the Executive, whether for a breach of this
Agreement or otherwise, shall be brought in a separate action or proceeding and
not as part of any action or proceeding brought by the Executive to enforce any
rights against the Company or Services under this Agreement.
9.2 No Mitigation. The Executive shall not have any duty to mitigate
the amounts payable by the Company or Services under this Agreement by seeking
new employment following termination. Except as specifically otherwise provided
in this Agreement, all amounts payable pursuant to this Agreement shall be paid
without reduction regardless of any amounts of salary, compensation or other
amounts which may be paid or payable to the Executive as the result of the
Executive's employment by another employer.
ARTICLE X.
CONFIDENTIALITY AND NON-COMPETITION
10.1 Confidentiality. Executive acknowledges that it is the policy of
the Company and its Subsidiaries to maintain as secret and confidential all
valuable and unique information and techniques acquired, developed or used by
the Company and its Subsidiaries relating to their business, operations,
employees and customers, which gives the Company and its Subsidiaries a
competitive advantage in the businesses in which the Company and its
Subsidiaries are engaged ("Confidential Information"). Executive recognizes that
all such Confidential Information is the sole and exclusive property of the
Company and its Subsidiaries, and that disclosure of Confidential Information
would cause damage to the Company and its Subsidiaries. Executive agrees that,
except as required by the duties of his employment with the Company and/or its
Subsidiaries and except in connection with enforcing the Executive's rights
under this Agreement or if compelled by a court or governmental agency, he will
not, without the consent of the Company, disseminate or otherwise disclose any
Confidential Information obtained during his employment with the Company and/or
its Subsidiaries for so long as such information is valuable and unique.
10.2 Non-competition/ Non-solicitation.
a. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive will not at any time directly or indirectly, in any capacity,
engage or participate in, or become employed by or render advisory or
consulting or other services in connection with any Prohibited Business
as defined in Section 10.2(d).
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b. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive shall not make any financial investment, whether in the form
of equity or debt, or own any interest, directly or indirectly, in any
Prohibited Business. Nothing in this Section 10.2(b) shall, however,
restrict Executive from making any investment in any company whose
stock is listed on a national securities exchange or actively traded in
the over-the-counter market; provided that (1) such investment does not
give Executive the right or ability to control or influence the policy
decisions of any Prohibited Business, and (2) such investment does not
create a conflict of interest between Executive's duties hereunder and
Executive's interest in such investment.
c. Executive agrees that, during the period of his employment
with the Company and/or its Subsidiaries and, if Executive's employment
is terminated for any reason, thereafter for a period of one (1) year,
Executive shall not (1) employ any employee of the Company and/or its
Subsidiaries or (2) interfere with the Company's or any of its
Subsidiaries' relationship with, or endeavor to entice away from the
Company and/or its Subsidiaries any person, firm, corporation, or other
business organization who or which at any time (whether before or after
the date of Executive's termination of employment), was an employee,
customer, vendor or supplier of, or maintained a business relationship
with, any business of the Company and/or its Subsidiaries which was
conducted at any time during the period commencing one year prior to
the termination of employment.
d. For the purpose of this Section 10.2, "Prohibited Business"
shall be defined as any entity and any branch, office or operation
thereof, which is a direct and material competitor of the Company and/
or its Subsidiaries wherever the Company and/ or its Subsidiaries does
business, in the United States or abroad.
10.3 Remedy. Executive and the Company specifically agree that, in the
event that Executive shall breach his obligations under this Article X, the
Company and its Subsidiaries will suffer irreparable injury and no adequate
remedy for such breach, and shall be entitled to injunctive relief therefor, and
in particular, without limiting the generality of the foregoing, the Company
shall not be precluded from pursuing any and all remedies it may have at law or
in equity for breach of such obligations; provided, however, that such breach
shall not in any manner or degree whatsoever limit, reduce or otherwise affect
the obligations of the Company and Services under this Agreement, and in no
event shall an asserted breach of the Executive's obligations under this Article
X constitute a basis for deferring or withholding any amounts otherwise payable
to the Executive under this Agreement.
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ARTICLE XI.
MISCELLANEOUS
11.1 No Assignability. This Agreement is personal to the Executive and
without the prior written consent of the Company and Services 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.
11.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the Company, Services and their respective successors and assigns.
The Company and Services will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
their respective businesses or assets to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company or
Services, as applicable, would be required to perform it if no such succession
had taken place. Any successor to the business and/or assets of the Company or
Services which assumes or agrees to perform this Agreement by operation of law,
contract, or otherwise shall be jointly and severally liable with the Company
and Services under this Agreement as if such successor were the Company or
Services, as applicable.
11.3 Payments to Beneficiary. If the Executive dies before receiving
amounts to which the Executive is entitled under this Agreement, such amounts
shall be paid in a lump sum to the beneficiary designated in writing by the
Executive, or if none is so designated, to the Executive's estate.
11.4 Non-alienation of Benefits. Benefits payable under this Agreement
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, before actually being received by the
Executive, and any such attempt to dispose of any right to benefits payable
under this Agreement shall be void.
11.5 Severability. If any one or more articles, sections or other
portions of this Agreement are declared by any court or governmental authority
to be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any article, section or other portion not so declared to be unlawful
or invalid. Any article, section or other portion so declared to be unlawful or
invalid shall be construed so as to effectuate the terms of such article,
section or other portion to the fullest extent possible while remaining lawful
and valid.
11.6 Amendments. Except as provided in Sections 2.2 and 11.14 hereof,
this Agreement shall not be altered, amended or modified except by written
instrument executed by the Company, Services and Executive.
11.7 Notices. All notices and other communications under this Agreement
shall be in writing and delivered by hand or by first class registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
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If to the Executive:
FirstName LastName
Address1
City State PostalCode
If to the Company:
Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attention: Vice President, Administration
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If to Services:
Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attention: Vice President, Administration
or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
11.9 Governing Law. This Agreement shall be interpreted and construed
in accordance with the laws of the State of South Carolina without regard to its
choice of law principles.
11.10 Captions. The captions of this Agreement are not a part of the
provisions hereof and shall have no force or effect.
11.11 Tax Withholding. The Company and Services may withhold from any
amounts payable under this Agreement any federal, state or local taxes that are
required to be withheld pursuant to any applicable law or regulation.
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11.12 No Waiver. The Executive's failure to insist upon strict
compliance with any provision of this Agreement shall not be deemed a waiver of
such provision or any other provision of this Agreement. A waiver of any
provision of this Agreement shall not be deemed a waiver of any other provision,
and any waiver of any default in any such provision shall not be deemed a waiver
of any later default thereof or of any other provision.
11.13 Entire Agreement. This Agreement contains the entire
understanding of the Company and Services and the Executive with respect to its
subject matter.
11.14 Cancellation. The Company and Services may, at any time prior to
a Change in Control, unilaterally cancel this Agreement on behalf of all parties
hereto by both of them (and not only one of them) notifying the Executive of
such cancellation in writing at least twelve (12) months prior to the effective
date of the cancellation, provided however that no such notice may be given
after an Imminent Change of Control Date.
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IN WITNESS WHEREOF, the Executive, Services and the Company have
executed this Agreement as of the date first above written.
----------------------------------
FirstName LastName (the Executive)
SAFETY-KLEEN CORP.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
SAFETY-KLEEN SERVICES, INC.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
23
Exhibit (10) (q)
October 5, 1999
Private and Confidential
- ------------------------
Title FirstName LastName
Address1
City,State PostalCode
Dear FirstName:
Safety-Kleen Corp. ("Safety-Kleen") and Safety-Kleen Services, Inc.
("Services"), (Safety-Kleen, Services, and their subsidiaries, collectively
referred to herein, as the "Corporation") consider it essential and in the best
interests of the Corporation and their shareholders to foster the continuous
employment of key management personnel. In this regard, the board of directors
of Safety-Kleen (the "Board") has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of the
members of senior management of the Corporation, including yourself, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from any possible change in control of Safety-Kleen or
Services.
In order to induce you to remain in the employ of the Corporation, the
Corporation has agreed with you that you shall receive the severance benefits
set forth in this letter agreement (this "Agreement") in the event your
employment with the Corporation is terminated subsequent to a Change in Control
(as defined below) under the circumstances described below.
1. Change in Control. No benefits shall be payable hereunder unless there
-----------------
shall have been a "Change in Control", which, for purposes of this
Agreement, shall mean the occurrence of any of the following:
a. (X) any person (as such term is used in Rule 13(d)- 5 of
the SEC under the 1934 Act) or group (as such term is defined in
Section 13(d) of the 1934 Act), other than a subsidiary or any employee
benefit plan (or related trust) of Safety-Kleen or its subsidiary,
becomes the beneficial owner of 15% or more of the common stock of
Safety-Kleen or of voting securities representing 15% or more of the
combined voting power of all voting securities of Safety-Kleen, (Y)
Laidlaw Inc. ceases to be the beneficial owner, directly or indirectly,
of 43.6% or more of the voting securities of Safety-Kleen and (Z)
another person or group becomes the beneficial owner of voting
securities of Safety-Kleen which represent a larger number of voting
securities than those held by Laidlaw Inc.
1
coc sk b-12-12
<PAGE>
b. within a period of 24 months or less, the individuals who,
as of any date, constitute the Board (the "Incumbent Directors") cease
for any reason to
constitute at least a majority of the Board unless at the end of such
period, the majority of individuals then constituting the Board were
nominated upon the recommendation of a majority of the Incumbent
Directors.
c. the sale or other disposition of all or substantially all of
the assets of Safety-Kleen or Services.
d. the sale or other disposition by Safety-Kleen of 50% or more
of the voting securities of Services or any other transaction which
results in any person, other than Safety-Kleen or a subsidiary or any
employee benefit plan of Safety-Kleen, becoming the beneficial owner of
50% or more of the voting securities of Services.
2. Termination Following Change in Control. If a Change in Control shall
----------------------------------------
have occurred, you shall be entitled to the benefits provided for
herein upon the subsequent termination of your employment
("Termination") during the period ("Window Period") beginning upon the
date of the Change in Control and ending on the third anniversary
thereof, unless such Termination is because of your death or
retirement, by the Corporation for Cause or by you other than for Good
Reason. For purposes of this paragraph:
a. "Cause" shall mean:
(I) the willful and continued failure by you substantially to
perform your duties with the Corporation (other than any such
failure resulting from your incapacity due to physical or
mental illness or any such actual or anticipated failure
resulting from Termination by you for Good Reason, as
hereinafter defined) after a written demand for substantial
performance is delivered to you by the Board or executive
management of the Corporation, which demand specifically
identifies the manner in which the Board or executive
management believes that you have not substantially performed
your duties and you failed to correct such failure to perform
your duties within 30 days after such written demand is
delivered to you; or
(II) the willful engaging by you in conduct that is
demonstrably and materially injurious to the Corporation,
monetarily or otherwise, and no act or failure to act on your
part shall be deemed "willful" unless done, or omitted to be
done, by you not in good faith and without reasonable belief
that your action or omission was in the best interests of the
Corporation;
2
<PAGE>
b. "Good Reason" shall mean the occurrence, without your express
written consent, of any of the following:
(I) Inconsistent Duties - a meaningful and detrimental
---------------------
alteration in your position or in the nature or status of your
responsibilities from those in effect immediately prior to the
Change in Control;
(II) Reduction in Remuneration - a reduction by the
-----------------------------
Corporation in your annual base salary as in effect
immediately prior to the Change in Control or at any time
during the window period; or a reduction by the Corporation in
long term incentive opportunity as in effect immediately prior
to the Change in Control or at any time during the window
period; or a reduction by the Corporation in bonus opportunity
as in effect immediately prior to the Change in Control or at
any time during the window period;
(III) Relocation - the relocation of the office of the
----------
Corporation where you are employed at the time of the Change
in Control ("the CIC Location") to a location that is more
than 40 miles away from the CIC Location, or the Corporation
requiring you to be based more than 40 miles away from the CIC
Location (except for required travel on the Corporation
business to an extent substantially consistent with your
customary business travel obligations in the ordinary course
of your business during the year immediately prior to the
Change in Control); provided, however, your relocation, in
connection with the consolidation of Safety-Kleen Corp.
offices in Columbia, S.C., shall not constitute Reason for
Termination by you and shall not entitle you to the
Termination Payment (hereinafter defined) in the event of your
refusal to relocate.
(IV) Benefits and Perquisites - the failure by the Corporation
------------------------
to continue to provide you with benefits and perquisites at
least as favorable as those enjoyed by you immediately prior
to the Change in Control as may be increased thereafter and
prior to the expiry of the Window Period.
3. Termination Payment. If any event of Termination shall have occurred
--------------------
during the Window Period and prior to the expiry of the Term of this
Agreement, and you shall have provided written notice to that effect to
the Corporation, you shall be entitled to a payment ("the Termination
Payment") in a lump sum (subject to mandatory statutory tax
withholding) in the amount of eighteen month's average compensation.
Average compensation is equal to the average aggregate monthly salary,
bonus, and perquisites during the fiscal year of the Corporation
3
<PAGE>
ended immediately prior to the date ("Termination Payment Date") on
which the Termination Payment shall be due provided, however, the
average compensation shall not be less than the average aggregate
monthly salary, bonus, and perquisites received during the fiscal year
ending August 31, 1999.
4. Continuation of Benefits following Termination
----------------------------------------------
For eighteen months following the Termination, the Corporation shall
continue to provide to you and your family welfare benefits (including,
without limitation, medical, prescription, dental, disability, salary
continuance, individual life, group life, accidental death and travel
accident insurance plans and programs), fringe benefits and other
perquisites, which are at least as favorable as the most favorable
plans of the Corporation applicable to you and other peer executives
and their families as of the Termination, but which are in no event
less favorable than the most favorable plans of the Corporation
applicable to you and other peer executives and their families during
the 90-day period immediately before the Change of Control. The cost to
you of such welfare benefits shall not exceed the cost of such benefits
to you immediately before the Termination or, if less, the Change of
Control. Notwithstanding the foregoing, if you are covered under any
medical, life, or disability insurance plan(s) provided by a subsequent
employer, then the amount of coverage required to be provided by the
Corporation hereunder shall be secondary to the coverage provided by
the subsequent employer's medical, life, or disability insurance
plan(s). Your rights under this paragraph shall be in addition to, and
not in lieu of, any post-termination continuation coverage or
conversion rights you may have pursuant to applicable law, including
without limitation continuation coverage required by Section 4980B of
the Code and Section 601 et. seq. of the Employee Retirement Income
Security Act of 1974, as amended.
5. Employee Stock Options. Upon a Change of Control, the Corporation shall
----------------------
pay to you a lump-sum cash payment equal to the spread (fair market
value over exercise price) of all outstanding options granted to you
for shares of common stock of Safety-Kleen whether vested or not vested
at the time of the Change of Control.
6. Legal Counsel Fees. If the Corporation shall fail to comply with its
------------------
obligations hereunder or call into question the legal validity of this
Agreement, all reasonable legal counsel fees incurred by you in the
course of seeking to enforce this Agreement shall be for the account of
and payable by the Corporation, except to the extent that a court shall
determine that your action in seeking to enforce this Agreement was
frivolous.
4
<PAGE>
7. Outplacement Expenses. In the event that the Termination Payment shall
----------------------
become payable hereunder, the Corporation shall pay, on your behalf,
the fees and expenses of "outplacement" services on your behalf which
shall have been arranged by you, to a maximum of $25,000.
8. Confidentiality and Noncompetition
----------------------------------
8.1 Confidentiality. You acknowledge that it is the policy of the
---------------
Corporation to maintain as secret and confidential all valuable and
unique information and techniques acquired, developed or used by the
Corporation relating to their business, operations, employees and
customers, which gives the Corporation a competitive advantage in the
businesses in which the Corporation is engaged ("Confidential
Information"). You recognize that all such Confidential Information is
the sole and exclusive property of the Corporation, and that disclosure
of Confidential Information would cause damage to the Corporation. You
agree that, except as required by the duties of your employment with
the Corporation and except in connection with enforcing your rights
under this Agreement or if compelled by a court or governmental agency,
you will not, without the consent of the Corporation, disseminate or
otherwise disclose any Confidential Information obtained during your
employment with the Corporation for so long as such information is
valuable and unique.
8.2 Non-competition/ Non-solicitation.
----------------------------------
a. You agree that, during the period of your employment with the
Corporation and, if your employment is terminated for any reason,
thereafter for a period of one (1) year, you will not at any time
directly or indirectly, in any capacity, engage or participate in, or
become employed by or render advisory or consulting or other services
in connection with any Prohibited Business as defined in Section
8.2(d).
b. You agree that, during the period of your employment with the
Corporation and, if your employment is terminated for any reason,
thereafter for a period of one (1) year, you shall not make any
financial investment, whether in the form of equity or debt, or own any
interest, directly or indirectly, in any Prohibited Business. Nothing
in this Section 8.2(b) shall, however, restrict you from making any
investment in any company whose stock is listed on a national
securities exchange or actively traded in the over-the-counter market;
provided that (1) such investment does not give you the right or
ability to control or influence the policy decisions of any Prohibited
Business, and (2) such investment does not create a conflict of
interest between your duties hereunder and your interest in such
investment.
5
<PAGE>
c. You agree that, during the period of your employment with the
the Corporation and, if your employment is terminated for any reason,
thereafter for a period of one (1) year, you shall not (1) employ any
employee of the Corporation or (2) interfere with the Corporation's
relationship with, or endeavor to entice away from the Corporation any
person, firm, corporation, or other business organization who or which
at any time (whether before or
after the date of your termination of employment), was an employee,
customer, vendor or supplier of, or maintained a business relationship
with, any business of the Corporation which was conducted at any time
during the period commencing one year prior to the termination of
employment.
d. For the purpose of this Section 8.2, "Prohibited Business"
shall be defined as any entity and any branch, office or operation
thereof, which is a direct and material competitor of the Corporation
wherever the Corporation does business, in the United States or abroad.
8.3 Remedy. You and the Corporation specifically agree that, in the event
------
that you shall breach your obligations under this Section 8, the
Corporation will suffer irreparable injury and no adequate remedy for
such breach, and shall be entitled to injunctive relief therefor, and
in particular, without limiting the generality of the foregoing, the
Corporation shall not be precluded from pursuing any and all remedies
it may have at law or in equity for breach of such obligations;
provided, however, that such breach shall not in any manner or degree
whatsoever limit, reduce or otherwise affect the obligations of the
Corporation under this Agreement, and in no event shall an asserted
breach of your obligations under this Section 8 constitute a basis for
deferring or withholding any amounts otherwise payable to you under
this Agreement.
9. Term. This Agreement shall terminate on the later of (a) the third
----
anniversary of the date hereof and (b) the expiry of the Window Period
in respect of the last Change in Control which shall have occurred
prior to the third anniversary of the date hereof.
10. Final Agreement. It is the intention of the Corporation and you that
----------------
the compensation and benefits to be provided to you under this
Agreement shall be the only compensation and benefits to you provided
by the Corporation in the event of your Termination of employment
following the Change in Control, and by your acceptance hereof, you
hereby waive any and all other rights which you might have as a result
of such Termination of employment.
6
<PAGE>
11. Notice. For purposes of this Agreement, notices and all other
------
communications shall be in writing and shall be hand delivered and
shall be deemed given when delivered and received addressed to
Safety-Kleen Corp., 1301 Gervais Street, Suite 300, Columbia, South
Carolina 29201, Attention: Vice President, Administration or to you at
the address set forth on the first page of this Agreement or to such
other address as either party may have furnished to the other in
writing in accordance herewith.
12. Governing Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of South Carolina applicable
therein.
13. Severability. The invalidity or unenforceability of any provision of
------------
this Agreement shall not effect the validity or enforceability of any
other provision of this Agreement which shall remain in full force and
effect.
14. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed to be an original but both of which together
shall constitute one and the same instrument.
15. No Contract of Employment. Nothing in this Agreement shall be construed
-------------------------
as giving you any right to be retained in the employment of the
Corporation.
If the foregoing sets forth our agreement on the subject matter hereof,
kindly sign in the space provided below and return to the Vice President of
Administration of the Corporation for execution by the Corporation. One fully
executed copy of this Agreement shall be returned to you.
SAFETY-KLEEN CORP.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
SAFETY-KLEEN SERVICES, INC.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
Agreed to this day of
, 1999
- ------------------------
FirstName LastName
7
Exhibit (10) (r)
October 5, 1999
Private and Confidential
- ------------------------
Title FirstName LastName
Address1
City,State PostalCode
Dear FirstName:
Safety-Kleen Corp. ("Safety-Kleen") and Safety-Kleen Services, Inc.
("Services"), (Safety-Kleen, Services, and their subsidiaries, collectively
referred to herein, as the "Corporation") consider it essential and in the best
interests of the Corporation and their shareholders to foster the continuous
employment of key management personnel. In this regard, the board of directors
of Safety-Kleen (the "Board") has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of the
members of senior management of the Corporation, including yourself, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from any possible change in control of Safety-Kleen or
Services.
In order to induce you to remain in the employ of the Corporation, the
Corporation has agreed with you that you shall receive the severance benefits
set forth in this letter agreement (this "Agreement") in the event your
employment with the Corporation is terminated subsequent to a Change in Control
(as defined below) under the circumstances described below.
1. Change in Control. No benefits shall be payable hereunder unless there
------------------
shall have been a "Change in Control", which, for purposes of this
Agreement, shall mean the occurrence of any of the following:
a. (X) any person (as such term is used in Rule 13(d)- 5 of the
SEC under the 1934 Act) or group (as such term is defined in Section
13(d) of the 1934 Act), other than a subsidiary or any employee benefit
plan (or related trust) of Safety-Kleen or its subsidiary, becomes the
beneficial owner of 15% or more of the common stock of Safety-Kleen or
of voting securities representing 15% or more of the combined voting
power of all voting securities of Safety-Kleen, (Y) Laidlaw Inc. ceases
to be the beneficial owner, directly or indirectly, of 43.6% or more of
the voting securities of Safety-Kleen and (Z) another person or group
becomes the beneficial owner of voting securities of Safety-Kleen which
represent a larger number of voting securities than those held by
Laidlaw Inc.
b. within a period of 24 months or less, the individuals who, as
of any date, constitute the Board (the "Incumbent Directors") cease for
any reason to
1
coc sk c-2-12
<PAGE>
constitute at least a majority of the Board unless at the end of such
period, the majority of individuals then constituting the Board were
nominated upon the recommendation of a majority of the Incumbent
Directors.
c. the sale or other disposition of all or substantially all of
the assets of Safety-Kleen or Services.
d. the sale or other disposition by Safety-Kleen of 50% or more
of the voting securities of Services or any other transaction which
results in any person, other than Safety-Kleen or a subsidiary or any
employee benefit plan of Safety-Kleen, becoming the beneficial owner of
50% or more of the voting securities of Services.
2. Termination Following Change in Control. If a Change in Control shall
----------------------------------------
have occurred, you shall be entitled to the benefits provided for
herein upon the subsequent termination of your employment
("Termination") during the period ("Window Period") beginning upon the
date of the Change in Control and ending on the third anniversary
thereof, unless such Termination is because of your death or
retirement, by the Corporation for Cause or by you other than for Good
Reason. For purposes of this paragraph:
a. "Cause" shall mean:
(I) the willful and continued failure by you substantially to
perform your duties with the Corporation (other than any such
failure resulting from your incapacity due to physical or
mental illness or any such actual or anticipated failure
resulting from Termination by you for Good Reason, as
hereinafter defined) after a written demand for substantial
performance is delivered to you by the Board or executive
management of the Corporation, which demand specifically
identifies the manner in which the Board or executive
management believes that you have not substantially performed
your duties and you failed to correct such failure to perform
your duties within 30 days after such written demand is
delivered to you; or
(II) the willful engaging by you in conduct that is
demonstrably and materially injurious to the Corporation,
monetarily or otherwise, and no act or failure to act on your
part shall be deemed "willful" unless done, or omitted to be
done, by you not in good faith and without reasonable belief
that your action or omission was in the best interests of the
Corporation;
b. "Good Reason" shall mean the occurrence, without your express
written consent, of any of the following:
2
<PAGE>
(I) Inconsistent Duties - a meaningful and detrimental
alteration in your position or in the nature or status of your
responsibilities from those in effect immediately prior to the
Change in Control;
(II) Reduction in Remuneration - a reduction by the
Corporation in your annual base salary as in effect
immediately prior to the Change in Control or at any time
during the window period; or a reduction by the Corporation in
long term incentive opportunity as in effect immediately prior
to the Change in Control or at any time during the window
period; or a reduction by the Corporation in bonus opportunity
as in effect immediately prior to the Change in Control or at
any time during the window period;
(III) Relocation - the relocation of the office of the
Corporation where you are employed at the time of the Change
in Control ("the CIC Location") to a location that is more
than 40 miles away from the CIC Location, or the Corporation
requiring you to be based more than 40 miles away from the CIC
Location (except for required travel on the Corporation
business to an extent substantially consistent with your
customary business travel obligations in the ordinary course
of your business during the year immediately prior to the
Change in Control); provided, however, your relocation, in
connection with the consolidation of Safety-Kleen Corp.
offices in Columbia, S.C., shall not constitute Reason for
Termination by you and shall not entitle you to the
Termination Payment (hereinafter defined) in the event of your
refusal to relocate.
(IV) Benefits and Perquisites - the failure by the Corporation
to continue to provide you with benefits and perquisites at
least as favorable as those enjoyed by you immediately prior
to the Change in Control as may be increased thereafter and
prior to the expiry of the Window Period.
3. Termination Payment. If any event of Termination shall have occurred
--------------------
during the Window Period and prior to the expiry of the Term of this
Agreement, and you shall have provided written notice to that effect to
the Corporation, you shall be entitled to a payment ("the Termination
Payment") in a lump sum (subject to mandatory statutory tax
withholding) in the amount of twelve month's average compensation.
Average compensation is equal to the average aggregate monthly salary,
bonus, and perquisites during the fiscal year of the Corporation ended
immediately prior to the date ("Termination Payment Date") on which the
Termination Payment shall be due provided, however, the average
compensation shall not be less than the average aggregate monthly
salary, bonus, and perquisites received during the fiscal year ending
August 31, 1999.
3
<PAGE>
4. Continuation of Benefits following Termination
----------------------------------------------
For twelve months following the Termination, the Corporation shall
continue to provide to you and your family welfare benefits (including,
without limitation, medical, prescription, dental, disability, salary
continuance, individual life, group life, accidental death and travel
accident insurance plans and programs), fringe benefits and other
perquisites, which are at least as favorable as the most favorable
plans of the Corporation applicable to you and other peer executives
and their families as of the Termination, but which are in no event
less favorable than the most favorable plans of the Corporation
applicable to you and other peer executives and their families during
the 90-day period immediately before the Change of Control. The cost to
you of such welfare benefits shall not exceed the cost of such benefits
to you immediately before the Termination or, if less, the Change of
Control. Notwithstanding the foregoing, if you are covered under any
medical, life, or disability insurance plan(s) provided by a subsequent
employer, then the amount of coverage required to be provided by the
Corporation hereunder shall be secondary to the coverage provided by
the subsequent employer's medical, life, or disability insurance
plan(s). Your rights under this paragraph shall be in addition to, and
not in lieu of, any post-termination continuation coverage or
conversion rights you may have pursuant to applicable law, including
without limitation continuation coverage required by Section 4980B of
the Code and Section 601 et. seq. of the Employee Retirement Income
Security Act of 1974, as amended.
5. Employee Stock Options. Upon a Change of Control, the Corporation
-----------------------
shall pay to you a lump-sum cash payment equal to the spread (fair
market value over exercise price) of all outstanding options granted to
you for shares of common stock of Safety-Kleen whether vested or not
vested at the time of the Change of Control.
6. Legal Counsel Fees. If the Corporation shall fail to comply with its
------------------
obligations hereunder or call into question the legal validity of this
Agreement, all reasonable legal counsel fees incurred by you in the
course of seeking to enforce this Agreement shall be for the account of
and payable by the Corporation, except to the extent that a court shall
determine that your action in seeking to enforce this Agreement was
frivolous.
7. Outplacement Expenses. In the event that the Termination Payment shall
---------------------
become payable hereunder, the Corporation shall pay, on your behalf,
the fees and expenses of "outplacement" services on your behalf which
shall have been arranged by you, to a maximum of $25,000.
4
<PAGE>
8. Confidentiality and Noncompetition
----------------------------------
8.1 Confidentiality. You acknowledge that it is the policy of the Corpora-
---------------
tion to maintain as secret and confidential all valuable and unique
information and techniques acquired, developed or used by the
Corporation relating to their business, operations, employees and
customers, which gives the Corporation a competitive advantage in the
businesses in which the Corporation is engaged ("Confidential
Information"). You recognize that all such Confidential Information is
the sole and exclusive property of the Corporation, and that disclosure
of Confidential Information would cause damage to the Corporation. You
agree that, except as required by the duties of your employment with
the Corporation and except in connection with enforcing your rights
under this Agreement or if compelled by a court or governmental agency,
you will not, without the consent of the Corporation, disseminate or
otherwise disclose any Confidential Information obtained during your
employment with the Corporation for so long as such information is
valuable and unique.
8.2 Non-competition/ Non-solicitation.
----------------------------------
a. You agree that, during the period of your employment with
the Corporation and, if your employment is terminated for any reason,
thereafter for a period of one (1) year, you will not at any time
directly or indirectly, in any capacity, engage or participate in, or
become employed by or render advisory or consulting or other services
in connection with any Prohibited Business as defined in Section
8.2(d).
b. You agree that, during the period of your employment with
the Corporation and, if your employment is terminated for any reason,
thereafter for a period of one (1) year, you shall not make any
financial investment, whether in the form of equity or debt, or own any
interest, directly or indirectly, in any Prohibited Business. Nothing
in this Section 8.2(b) shall, however, restrict you from making any
investment in any company whose stock is listed on a national
securities exchange or actively traded in the over-the-counter market;
provided that (1) such investment does not give you the right or
ability to control or influence the policy decisions of any Prohibited
Business, and (2) such investment does not create a conflict of
interest between your duties hereunder and your interest in such
investment.
c. You agree that, during the period of your employment with
the Corporation and, if your employment is terminated for any reason,
thereafter for a period of one (1) year, you shall not (1) employ any
employee of the Corporation or (2) interfere with the Corporation's
relationship with, or endeavor to entice away from the Corporation any
person, firm, corporation, or other business organization who or which
at any time (whether before or
5
<PAGE>
after the date of your termination of employment), was an employee,
customer, vendor or supplier of, or maintained a business relationship
with, any business of the Corporation which was conducted at any time
during the period commencing one year prior to the termination of
employment.
d. For the purpose of this Section 8.2, "Prohibited Business"
shall be defined as any entity and any branch, office or operation
thereof, which is a direct and material competitor of the Corporation
wherever the Corporation does business, in the United States or abroad.
8.3 Remedy. You and the Corporation specifically agree that, in the event
------
that you shall breach your obligations under this Section 8, the
Corporation will suffer irreparable injury and no adequate remedy for
such breach, and shall be entitled to injunctive relief therefor, and
in particular, without limiting the generality of the foregoing, the
Corporation shall not be precluded from pursuing any and all remedies
it may have at law or in equity for breach of such obligations;
provided, however, that such breach shall not in any manner or degree
whatsoever limit, reduce or otherwise affect the obligations of the
Corporation under this Agreement, and in no event shall an asserted
breach of your obligations under this Section 8 constitute a basis for
deferring or withholding any amounts otherwise payable to you under
this Agreement.
9. Term. This Agreement shall terminate on the later of (a) the third
----
anniversary of the date hereof and (b) the expiry of the Window Period
in respect of the last Change in Control which shall have occurred
prior to the third anniversary of the date hereof.
10. Final Agreement. It is the intention of the Corporation and you that
----------------
the compensation and benefits to be provided to you under this
Agreement shall be the only compensation and benefits to you provided
by the Corporation in the event of your Termination of employment
following the Change in Control, and by your acceptance hereof, you
hereby waive any and all other rights which you might have as a result
of such Termination of employment.
11. Notice. For purposes of this Agreement, notices and all other
------
communications shall be in writing and shall be hand delivered and
shall be deemed given when delivered and received addressed to
Safety-Kleen Corp., 1301 Gervais Street, Suite 300, Columbia, South
Carolina 29201, Attention: Vice President, Administration or to you at
the address set forth on the first page of this Agreement or to such
other address as either party may have furnished to the other in
writing in accordance herewith.
12. Governing Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of South Carolina applicable
therein.
6
<PAGE>
13. Severability. The invalidity or unenforceability of any provision of
------------
this Agreement shall not effectthe validity or enforceability of any
other provision of this Agreement which shall remain in full force and
effect.
14. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed to be an original but both of which together
shall constitute one and the same instrument.
15. No Contract of Employment. Nothing in this Agreement shall be construed
--------------------------
as giving you any right to be retained i n the employment of the
Corporation.
If the foregoing sets forth our agreement on the subject matter hereof,
kindly sign in the space provided below and return to the Vice President of
Administration of the Corporation for execution by the Corporation. One fully
executed copy of this Agreement shall be returned to you.
SAFETY-KLEEN CORP.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
SAFETY-KLEEN SERVICES, INC.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
Agreed to this day of
, 1999
- ------------------------
FirstName LastName
7
Exhibit (10) (s)
October 5, 1999
Private and Confidential
Name
Address
City, State Zip
Dear First Name:
Safety-Kleen Corp. ("Safety-Kleen") and Safety-Kleen Services, Inc.
("Services"), (Safety-Kleen, Services, and their subsidiaries, collectively
referred to herein, as the "Corporation") consider it essential and in the best
interests of the Corporation and their shareholders to foster the continuous
employment of key management personnel. In this regard, the board of directors
of Safety-Kleen (the "Board") has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of the
members of senior management of the Corporation, including yourself, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from any possible change in control of Safety-Kleen or
Services.
In order to induce you to remain in the employ of the Corporation, the
Corporation has agreed with you that you shall receive the severance benefits
set forth in this letter agreement (this "Agreement") in the event your
employment with the Corporation is terminated subsequent to a Change in Control
(as defined below) under the circumstances described below.
1. Change in Control. No benefits shall be payable hereunder unless there
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shall have been a "Change in Control", which, for purposes of this
Agreement, shall mean the occurrence of any of the following:
a. (X) any person (as such term is used in Rule 13(d)- 5 of
the SEC under the 1934 Act) or group (as such term is defined in
Section 13(d) of the 1934 Act), other than a subsidiary or any
employee benefit plan (or related trust) of Safety-Kleen or its
subsidiary, becomes the beneficial owner of 15% or more of the
common stock of Safety-Kleen or of voting securities representing
15% or more of the combined voting power of all voting securities
of Safety-Kleen, (Y) Laidlaw Inc. ceases to be the beneficial
owner, directly or indirectly, of 43.6% or more of the voting
securities of Safety-Kleen and (Z) another person or group becomes
the beneficial owner of voting securities of Safety-Kleen which
represent a larger number of voting securities than those held by
Laidlaw Inc.
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b. within a period of 24 months or less, the individuals
who, as of any date, constitute the Board (the "Incumbent
Directors") cease for any reason to constitute at least a majority
of the Board unless at the end of such period, the majority of
individuals then constituting the Board were nominated upon the
recommendation of a majority of the Incumbent Directors.
c. the sale or other disposition of all or substantially
all of the assets of Safety-Kleen or Services.
d. the sale or other disposition by Safety-Kleen of 50% or
more of the voting securities of Services or any other transaction
which results in any person, other than Safety-Kleen or a
subsidiary or any employee benefit plan of Safety-Kleen, becoming
the beneficial owner of 50% or more of the voting securities of
Services.
2. Termination Following Change in Control. If a Change in Control shall
----------------------------------------
have occurred, you shall be entitled to the benefits provided for
herein upon the subsequent termination of your employment
("Termination") during the period ("Window Period") beginning upon the
date of the Change in Control and ending on the third anniversary
thereof, unless such Termination is because of your death or
retirement, by the Corporation for Cause or by you other than for Good
Reason. For purposes of this paragraph:
a. "Cause" shall mean:
(I) the willful and continued failure by you substantially
to perform your duties with the Corporation (other than any
such failure resulting from your incapacity due to physical
or mental illness or any such actual or anticipated failure
resulting from Termination by you for Good Reason, as
hereinafter defined) after a written demand for substantial
performance is delivered to you by the Board or executive
management of the Corporation, which demand specifically
identifies the manner in which the Board or executive
management believes that you have not substantially
performed your duties and you failed to correct such
failure to perform your duties within 30 days after such
written demand is delivered to you; or
(II) the willful engaging by you in conduct that is
demonstrably and materially injurious to the Corporation,
monetarily or otherwise, and no act or failure to act on
your part shall be deemed "willful" unless done, or omitted
to be done, by you not in good faith and without reasonable
belief that your action or omission was in the best
interests of the Corporation;
b. "Good Reason" shall mean the occurrence, without your
express written consent, of any of the following:
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(I) Inconsistent Duties - a meaningful and detrimental
alteration in your position or in the nature or status of
your responsibilities from those in effect immediately
prior to the Change in Control;
(II) Reduction in Remuneration - a reduction by the
Corporation in your annual base salary as in effect
immediately prior to the Change in Control or at any time
during the window period; or a reduction by the Corporation
in long term incentive opportunity as in effect immediately
prior to the Change in Control or at any time during the
window period; or a reduction by the Corporation in bonus
opportunity as in effect immediately prior to the Change in
Control or at any time during the window period;
(III) Relocation - the relocation of the office of the
Corporation where you are employed at the time of the
Change in Control ("the CIC Location") to a location that
is more than 40 miles away from the CIC Location, or the
Corporation requiring you to be based more than 40 miles
away from the CIC Location (except for required travel on
the Corporation business to an extent substantially
consistent with your customary business travel obligations
in the ordinary course of your business during the year
immediately prior to the Change in Control); provided,
however, your relocation, in connection with the
consolidation of Safety-Kleen Corp. offices in Columbia,
S.C., shall not constitute Reason for Termination by you
and shall not entitle you to the Termination Payment
(hereinafter defined) in the event of your refusal to
relocate.
(IV) Benefits and Perquisites - the failure by the
Corporation to continue to provide you with benefits and
perquisites at least as favorable as those enjoyed by you
immediately prior to the Change in Control as may be
increased thereafter and prior to the expiry of the Window
Period.
3. Termination Payment. If any event of Termination shall have occurred
--------------------
during the Window Period and prior to the expiry of the Term of this
Agreement, and you shall have provided written notice to that effect to
the Corporation, you shall be entitled to a payment ("the Termination
Payment") in a lump sum (subject to mandatory statutory tax
withholding) in the amount of twenty-four month's average compensation.
Average compensation is equal to the average aggregate monthly salary,
bonus, and perquisites during the fiscal year of the Corporation ended
immediately prior to the date ("Termination Payment Date") on which the
Termination Payment shall be due provided, however, the average
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compensation shall not be less than the average aggregate monthly
salary, bonus, and perquisites received during the fiscal year ending
August 31, 1999.
4. Continuation of Benefits following Termination
----------------------------------------------
For twenty-four months following the Termination, the Corporation shall
continue to provide to you and your family welfare benefits (including,
without limitation, medical, prescription, dental, disability, salary
continuance, individual life, group life, accidental death and travel
accident insurance plans and programs), fringe benefits and other
perquisites, which are at least as favorable as the most favorable
plans of the Corporation applicable to you and other peer executives
and their families as of the Termination, but which are in no event
less favorable than the most favorable plans of the Corporation
applicable to you and other peer executives and their families during
the 90-day period immediately before the Change of Control. The cost to
you of such welfare benefits shall not exceed the cost of such benefits
to you immediately before the Termination or, if less, the Change of
Control. Notwithstanding the foregoing, if you are covered under any
medical, life, or disability insurance plan(s) provided by a subsequent
employer, then the amount of coverage required to be provided by the
Corporation hereunder shall be secondary to the coverage provided by
the subsequent employer's medical, life, or disability insurance
plan(s). Your rights under this paragraph shall be in addition to, and
not in lieu of, any post-termination continuation coverage or
conversion rights you may have pursuant to applicable law, including
without limitation continuation coverage required by Section 4980B of
the Code and Section 601 et. seq. of the Employee Retirement Income
Security Act of 1974, as amended.
5. Employee Stock Options. Upon a Change of Control, the Corporation shall
----------------------
pay to you a lump-sum cash payment equal to the spread (fair market
value over exercise price) of all outstanding options granted to you
for shares of common stock of Safety-Kleen whether vested or not vested
at the time of the Change of Control.
6. Legal Counsel Fees. If the Corporation shall fail to comply with its
------------------
obligations hereunder or call into question the legal validity of this
Agreement, all reasonable legal counsel fees incurred by you in the
course of seeking to enforce this Agreement shall be for the account of
and payable by the Corporation, except to the extent that a court shall
determine that your action in seeking to enforce this Agreement was
frivolous.
7. Outplacement Expenses. In the event that the Termination Payment shall
---------------------
become payable hereunder, the Corporation shall pay, on your behalf,
the fees and expenses of "outplacement" services on your behalf which
shall have been arranged by you, to a maximum of $25,000.
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8. Confidentiality and Noncompetition
----------------------------------
8.1 Confidentiality. You acknowledge that it is the policy of the Corpora-
---------------
tion to maintain as secret and confidential all valuable and unique
information and techniques acquired, developed or used by the
Corporation relating to their business, operations, employees and
customers, which gives the Corporation a competitive advantage in the
businesses in which the Corporation is engaged ("Confidential
Information"). You recognize that all such Confidential Information is
the sole and exclusive property of the Corporation, and that disclosure
of Confidential Information would cause damage to the Corporation. You
agree that, except as required by the duties of your employment with
the Corporation and except in connection with enforcing your rights
under this Agreement or if compelled by a court or governmental agency,
you will not, without the consent of the Corporation, disseminate or
otherwise disclose any Confidential Information obtained during your
employment with the Corporation for so long as such information is
valuable and unique.
8.2 Non-competition/ Non-solicitation.
---------------------------------
a. You agree that, during the period of your employment with
the Corporation and, if your employment is terminated for any reason,
thereafter for a period of one (1) year, you will not at any time
directly or indirectly, in any capacity, engage or participate in, or
become employed by or render advisory or consulting or other services
in connection with any Prohibited Business as defined in Section
8.2(d).
b. You agree that, during the period of your employment with
the Corporation and, if your employment is terminated for any reason,
thereafter for a period of one (1) year, you shall not make any
financial investment, whether in the form of equity or debt, or own any
interest, directly or indirectly, in any Prohibited Business. Nothing
in this Section 8.2(b) shall, however, restrict you from making any
investment in any company whose stock is listed on a national
securities exchange or actively traded in the over-the-counter market;
provided that (1) such investment does not give you the right or
ability to control or influence the policy decisions of any Prohibited
Business, and (2) such investment does not create a conflict of
interest between your duties hereunder and your interest in such
investment.
c. You agree that, during the period of your employment with
the Corporation and, if your employment is terminated for any reason,
thereafter for a period of one (1) year, you shall not (1) employ any
employee of the Corporation or (2) interfere with the Corporation's
relationship with, or endeavor to entice away from the Corporation any
person, firm, corporation, or other business organization who or which
at any time (whether before or after the date
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of your termination of employment), was an employee, customer, vendor
or supplier of, or maintained a business relationship with, any
business of the Corporation which was conducted at any time during the
period commencing one year prior to the termination of employment.
d. For the purpose of this Section 8.2, "Prohibited Business"
shall be defined as any entity and any branch, office or operation
thereof, which is a direct and material competitor of the Corporation
wherever the Corporation does business, in the United States or abroad.
8.3 Remedy. You and the Corporation specifically agree that, in the event
------
that you shall breach your obligations under this Section 8, the
Corporation will suffer irreparable injury and no adequate remedy for
such breach, and shall be entitled to injunctive relief therefor, and
in particular, without limiting the generality of the foregoing, the
Corporation shall not be precluded from pursuing any and all remedies
it may have at law or in equity for breach of such obligations;
provided, however, that such breach shall not in any manner or degree
whatsoever limit, reduce or otherwise affect the obligations of the
Corporation under this Agreement, and in no event shall an asserted
breach of your obligations under this Section 8 constitute a basis for
deferring or withholding any amounts otherwise payable to you under
this Agreement.
9. Term. This Agreement shall terminate on the later of (a) the third
----
anniversary of the date hereof and (b) the expiry of the Window Period
in respect of the last Change in Control which shall have occurred
prior to the third anniversary of the date hereof.
10. Final Agreement. It is the intention of the Corporation and you that
----------------
the compensation and benefits to be provided to you under this
Agreement shall be the only compensation and benefits to you provided
by the Corporation in the event of your Termination of employment
following the Change in Control, and by your acceptance hereof, you
hereby waive any and all other rights which you might have as a result
of such Termination of employment.
11. Notice. For purposes of this Agreement, notices and all other
------
communications shall be in writing and shall be hand delivered and
shall be deemed given when delivered and received addressed to
Safety-Kleen Corp., 1301 Gervais Street, Suite 300, Columbia, South
Carolina 29201, Attention: Vice President, Administration or to you at
the address set forth on the first page of this Agreement or to such
other address as either party may have furnished to the other in
writing in accordance herewith.
12. Governing Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of South Carolina applicable
therein.
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13. Severability. The invalidity or unenforceability of any provision of
------------
this Agreement shall not effect the validity or enforceability of any
other provision of this Agreement which shall remain in full force and
effect.
14. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed to be an original but both of which together
shall constitute one and the same instrument.
15. No Contract of Employment. Nothing in this Agreement shall be construed
--------------------------
as giving you any right to be retained in the employment of the
Corporation.
If the foregoing sets forth our agreement on the subject matter hereof,
kindly sign in the space provided below and return to the Vice President of
Administration of the Corporation for execution by the Corporation. One fully
executed copy of this Agreement shall be returned to you.
SAFETY-KLEEN CORP.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
SAFETY-KLEEN SERVICES, INC.
By:
--------------------------------
Kenneth W. Winger
President / Chief Executive Officer
Agreed to this day of
, 1999
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Name
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Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: John Kyte
April 14, 2000 (803) 933-4224
SAFETY-KLEEN OBTAINS APPROVAL OF
ITS LENDERS TO DEFER INTEREST PAYMENTS
ON SENIOR INDEBTEDNESS
COLUMBIA, South Carolina - Safety-Kleen Corp. (NYSE:SK) announced today that all
79 of its lenders under its senior credit facility have agreed to defer interest
payments on Safety-Kleen's senior debt to May 30, 2000. The Company sought this
deferral, which is effective as of April 7, because it otherwise would have been
unable to make interest payments due on senior debt in April and May, 2000.
"We want to thank our senior lenders for their agreement of forbearance
and interest deferral," said David E. Thomas, Jr., Chairman of Safety-Kleen's
Executive Committee. "This agreement should allow the Company to continue to
support current operations and give us additional time to negotiate a
restructuring of our heavy debt load."
As previously announced, Safety-Kleen has retained Lazard Freres & Co.
LLC, Skadden, Arps, Slate, Meagher & Flom LLP, and Jay Alix & Associates to
assist it in the restructuring process.
"The Company and its lenders understand that our customers, employees
and regulatory agencies want Safety-Kleen to maintain normal business operations
to the maximum extent possible during this difficult period in our corporate
history," said Grover Wrenn, Vice Chairman. "We endeavor to maintain their trust
and confidence."
Under the terms of the agreement with its senior lenders, Safety-Kleen
is allowed to defer paying all interest under its senior credit facility to May
30, 2000. The agreement may be terminated under specific conditions, including,
but not limited to other defaults which may occur under the senior credit
facility subsequent to the date hereof.
Under the Private Securities Litigation Reform Act of 1995, sections of
this release constitute forward-looking statements that involve a number of
risks and uncertainties. Actual results and events may differ materially from
those projected in the forward-looking statements. Many factors could cause
actual events and results to differ from those expected, including, but not
limited to the outcome of continuing negotiations with Safety-Kleen's lenders,
the Company's ability to successfully integrate, transition, upgrade or install
information systems, the availability of additional funding under credit
facilities or from other sources, and other items discussed in the Company's
filings with the Securities and Exchange Commission.
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