secondamendmenttoexecuti






US.129930434.05   SECOND AMENDMENT TO   EXECUTIVE EMPLOYMENT AGREEMENT  This Second Amendment to Executive Employment Agreement (the “Second  Amendment”) is made and entered into effective as of February 1, 2021, by and between  Heritage-Crystal Clean, Inc., a Delaware corporation (the “Company”), and Brian J. Recatto  (“Executive”).  Recitals  A. The Company and Executive are parties to that certain Executive  Employment Agreement dated as of February 1, 2017 (the “Agreement”), which was  subsequently amended by a First Amendment to Executive Employment Agreement, effective  February 1, 2017.  B. The Company and Executive now desire to amend the Agreement as set forth in this Second Amendment to provide for a new set of incentive compensation provisions.  Amendment  NOW, THEREFORE, in consideration of the foregoing and the mutual promises  set forth herein, and other good and valuable consideration, the receipt and sufficiency of which  are hereby acknowledged, the Company and Executive agree as follows:  1. Section 4.3 of the Agreement is deleted in its entirety and replaced with the following:  4.3 Equity Compensation  (a) On each of December 31, 2021, December 31, 2022, and December 31, 2023, to the extent Executive remains employed by the Company  under this Agreement on such date, Executive shall receive a grant of restricted  stock as of such date valued at Five Hundred Thousand Dollars ($500,000), with  the number of shares of restricted stock constituting such grant determined by  applying the average closing price for a share of the Company’s common stock  for the 90-day period ending on such date (the “Time-Based Restricted Stock”).   Such awards of Time-Based Restricted Stock shall be granted pursuant to and  governed by the terms of the 2019 Incentive Plan and an award agreement in a  form provided by the Company.  The Time-Based Restricted Stock will vest in  accordance with the following:  (A) If Executive remains employed by the Company under this Agreement through December 31, 2023, all shares of such Time-Based  Restricted Stock shall become vested.   (B) If Executive is not employed by the Company on December 31, 2023, none of the Time-Based Restricted Stock shall  





 






US.129930434.05  -2-   become vested, and Executive shall have no further rights in any shares of  such Time-Based Restricted Stock.   (C) Notwithstanding the preceding provisions, in the event of a Change in Control (as defined is subsection (b) below) involving the  Company, all shares of such Time-Based Restricted Stock awarded up  through the date of closing of the Change in Control shall become vested,  and no further award of Time-Based Restricted Stock shall be made under  this provision.  (b) As of February 1, 2021, Executive will receive a one-time award of 500,000 shares of restricted stock, subject to the achievement of performance  criteria established by the Compensation Committee of the Board of Directors  pursuant to the 2019 Incentive Plan as set forth below (the “Performance-Based  Restricted Stock”).  The award date for such Performance-Based Restricted Stock  will be February 1, 2021 (the “Award Date”).  Such award shall be granted  pursuant to and governed by the terms of the 2019 Incentive Plan and an award  agreement in a form provided by the Company.  The shares of Performance- Based Restricted Stock will vest in accordance with the following:  (A) On January 31, 2025 (the “Vesting Date”), Executive shall vest in the percentage of shares of such Performance-Based Restricted  Stock determined in accordance with (B) below.  Except as provided in  subsection (C), (D) and (E) below, if Executive is not employed by the  Company on the Vesting Date, none of the shares of Performance-Based  Restricted Stock shall become vested, and Executive shall have no further  rights in any shares of the Performance-Based Restricted Stock.  Further,  after the Vesting Date (and the application of the provisions in subsections  (A) and (B) herein), Executive shall be entitled to no further vesting in the Performance-Based Restricted Stock , and any non-vested shares of Performance-Based Restricted Stock shall be forfeited. (B) If Executive remains employed by the Company through the Vesting Date, then on that date Executive shall become vested in the  number of shares of Performance-Based Restricted Stock determined by  applying the applicable percentage from the chart below that corresponds  to the growth in the share price of the Company’s common stock from the  Award Date for the Performance-Based Restricted Stock to the Vesting  Date, with the share price as of each such date determined by the average  closing price of a share of the Company’s common stock for the 90-day  period ending on such date (and with the percentage of shares vesting for  share price increases between the designated levels in the chart to be  determined using linear interpolation):  





 






US.129930434.05  -3-   Column A  Increase in Stock  Price From Award  Date to Vesting  Date (using average  closing price of a  share of the  Company’s  common stock for  the 90-day period  ending on each such  date)  Column B  Percentage of  Executive’s shares  of Performance- Based Restricted  Stock that Will  Become Vested  Less than $5 per  share increase 0%  $5 per share increase  25%   (vest in 125,000  shares)  $10 per share  increase  50%  (vest in 250,000  shares)  $15 per share  increase  75%  (vest in 375,000  shares)  $20 or more per  share increase   100%  (vest in 500,000  shares)  (C) In addition, notwithstanding the provisions in (A) and (B) above, if the average closing price of a share of the Company’s common  stock for any period of 180 consecutive days between the Award Date for  the Performance-Based Restricted Stock and the Vesting Date exceeds the  share price as of the Award Date by one of the stated marginal increase  levels set forth in Column A above, and Executive remains employed by  the Company throughout that 180-day period, then the number of shares of  Performance-Based Restricted Stock in which Executive shall vest on the  last day of that 180-day period shall be calculated as fifty percent (50%) of  the corresponding applicable percentage set forth in the chart above. For  example, if during the period after the Award Date but prior to the Vesting  Date the closing price per share of the Company’s common stock  





 






US.129930434.05  -4-   increases by $5 over the price as of the Award Date and the average  closing price per share over the following 180 consecutive days maintains  that closing price per share increase, Executive shall become vested in  12.5% of the shares of Performance-Based Restricted Stock on the last day  of that 180-day period (50% of the 25% figure from the chart).  This  separate vesting provision shall not apply to any increase in share price for  which Executive has already received vesting credit (e.g., if Executive  becomes entitled to 12.5% vesting due to a $5 average closing price per  share increase for a 180-day period, and the stock price subsequently  drops, the Executive is not entitled to any additional vesting for a  subsequent closing price per share increase over that same $5 margin).   (D) In the event of a Change in Control involving the Company during Executive’s employment with the Company and on or before the  Vesting Date, Executive shall vest in all 500,000 shares of the  Performance-Based Restricted Stock on the date of closing of the Change  in Control transaction.  For these purposes, "Change in Control" shall be  as defined in the 2019 Incentive Plan except that, notwithstanding  anything in that definition to the contrary, the Company’s sale or other  divestiture of its oil business shall not, by itself, constitute a Change in  Control for purposes of this Agreement.   Further, this vesting provision  shall not be applied to the extent Executive has already vested in a portion  of the Performance-Based Restricted Stock associated with such dollar  share price increase under subsection (C) above.  (E) If Executive terminates employment prior to the Vesting Date due to death, Disability, termination without cause or termination for  good reason, then Executive shall remain eligible to vest as of the Vesting  Date in a portion of the shares of Performance-Based Restricted Stock,  determined as follows:  the share price of the Company’s common stock  shall be determined as of the date of Executive’s termination of  employment (using the average closing price of a share of the Company’s  common stock for the 21-day period ending on the termination date); if  such share price is higher than the share price on the Award Date, the  vesting percentage from the chart corresponding to the share price increase  shall be determined (which shall include linear interpolation to determine  the applicable percentage for share price increases between the designated  levels in the chart), then that percentage shall be prorated to reflect the  portion of time Executive was employed between the Award Date and  Vesting Date; and Executive shall become vested on the Vesting Date in  the resulting percentage of shares of Performance-Based Restricted Stock.  However, notwithstanding anything in the preceding sentence to the  contrary, Executive is entitled to vesting in a percentage of his shares of  Performance-Based Restricted Stock under this subsection (E) only if the  share price as of the Vesting Date remains greater than or equal to the  share price calculated above as of the date of Executive’s termination.  For  example, if Executive is terminated without cause one year after the  





 






US.129930434.05  -5-   Award Date and the share price of Company stock as of the time of  Executive’s termination of employment is $7.50 greater than the initial  price as of the Award Date, the figures in the chart will then be  interpolated to determine the applicable percentage corresponding to the  $7.50 increase (which is 37.5%, the percentage halfway between the  percentages for $5 and $10 per share increases), and if the share price at  the subsequent Vesting Date maintains at least that $7.50 increase,  Executive would vest as of that Vesting Date in 9.375% of the shares of  Performance-Based Restricted Stock (the 37.5% figure from the chart  prorated to 25% because Executive worked 1 of the 4 years between  Award Date and Vesting Date).  After such a termination, except for this  vesting provision, Executive shall be entitled to no further vesting in the  Performance-Based Restricted Stock, and any non-vested shares of  Performance-Based Restricted Stock shall be forfeited.  Further, this  vesting provision shall not be applied to the extent Executive has already  vested in a portion of the Performance-Based Restricted Stock associated  with such dollar share price increase under subsection (C) above.  (c) Executive previously received an award of performance-based restricted  stock subject to a January 31, 2021 vesting date under the prior provisions of Section 4.3(b) (the  “Prior Award”).  If on January 31, 2021 Executive vests in no additional shares of restricted  stock under the Prior Award, the Company will grant to Executive 62,500 shares of restricted  stock as of February 1, 2021 (the “Additional Time-Based Restricted Stock”). Such award of  Additional Time-Based Restricted Stock shall be granted pursuant to and governed by the terms of  the 2019 Incentive Plan and an award agreement in a form provided by the Company.   If  Executive remains employed by the Company under this Agreement through January 31, 2024, all  shares of such Additional Time-Based Restricted Stock shall become vested.  If Executive is not  employed by the Company on January 31, 2024, none of the Additional Time-Based Restricted  Stock shall become vested, and Executive shall have no further rights in any shares of such  Additional Time-Based Restricted Stock. Notwithstanding the preceding provisions, in the event  of a Change in Control (as defined is subsection (b) above) involving the Company during  Executive’s employment with the Company and on or before January 31, 2024, all shares of such  Additional Time-Based Restricted Stock shall become vested as of the date of closing of such  Change in Control.   2. References to the term “Restricted Stock” in Sections 6.2, 6.3, 6.5, 6.6 and 6.8 of the Agreement shall be replaced with the term “Performance-Based Restricted Stock.”  IN WITNESS WHEREOF, Executive and the Company have executed this  Second Amendment, intending it to be effective as of the date first noted above.  HERITAGE-CRYSTAL CLEAN, INC. EXECUTIVE  By:__________________________________ ____________________________  Charles E. Schalliol Brian J. Recatto  Brian RecattoCharles Schalliol * $")-)./$*)0( -ѷш/с0/цш#( (сш. -!уш.