Document:

Exhibit 10.4

 

DEFERRAL AGREEMENT

 

THIS DEFERRAL AGREEMENT (“Agreement”) dated as of                       , is by and between Safety-Kleen HoldCo., Inc. (the “Company”) and                 (the “Participant”).

 

The parties hereto, intending to be legally bound hereby, agree to the following:

 

1.              Deferral. The Participant has been awarded Restricted Stock Units (“RSUs”) pursuant to the Safety-Kleen Equity Plan (the “Equity Plan”). Subject to the terms of the Equity Plan and the agreement evidencing the RSUs (the “RSU Agreement”), the RSUs are scheduled to vest on the date or dates set forth on Exhibit A hereto, at which time or times the Participant will be entitled to receive, pursuant to the terms of the RSU Agreement, the number of shares of the Company’s Common Stock set forth on Exhibit A next to the applicable vesting date. Pursuant to the provisions of the Safety-Kleen Deferred Compensation Plan (the terms of which are hereby incorporated by reference) and this Agreement, the Participant and the Company hereby agree that, notwithstanding the terms of the RSU Agreement, the receipt by the Participant of such Company Common Stock will be deferred until the Payment Date. For purposes of this Agreement, the “Payment Date” will be the date indicated below. 

 

Please initial in one or more of the spaces provided below, the Payment Date elected. If more than one date is indicated, the Payment Date shall be the earliest to occur of the indicated dates. 

 

the date upon which the Participant’s employment or service with the Company and any of its Subsidiaries terminates.

 

the date upon which a Change in Control (as defined in the Equity Plan) occurs.

 

the following date:          /         /         .

 

the date of a Public Offering (as defined in the Equity Plan) of the Company or any of its Subsidiaries.

 

Upon the Payment Date, the Participant shall receive the shares of Company Common Stock in accordance with the other terms and conditions of the RSU Agreement. However, if Participant’s employment or service with the

 

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Company and any of its Subsidiaries is terminated for Cause (as defined in the Equity Plan), the RSU’s in Participant’s Investment Account will be forfeited. Capitalized terms that are used but not defined herein shall have the meaning set forth in the Safety-Kleen Deferred Compensation Plan (“the Deferred Compensation Plan”).

 

2.              Terms of Deferral. As of the applicable vesting date or dates with respect to the RSUs, the Company shall establish an unfunded Investment Account in the Participant’s name and shall credit such Investment Account with the number of shares of Company Common Stock which were scheduled to vest on such date pursuant to the RSU Agreement. At all times prior to the Payment Date, the Investment Account shall continue to be denominated in shares of Company Common Stock and shall not be credited with interest during such period. The Investment Account shall be debited to reflect any payments made to the Participant. By execution of this Agreement, the Participant agrees to the terms and conditions of the Deferred Compensation Plan, and further acknowledges that neither the Company nor any of its officers, directors or agents have made any promise or representation with respect to the value which the Company Common Stock may have as of a Payment Date. The Participant acknowledges that he has been advised by the Company to consult with his personal tax advisors prior to executing this Agreement.

 

3.              Amendment and Duration of the Agreement. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Participant and the Company. No waiver by either party hereto at any time of any breach of the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.

 

4.              No Offset. The payments made by the Company to the Participant under this Agreement will not offset any severance or other payments due to the Participant from the Company.

 

5.              Nontransferability. The Participant will not have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments which he or she may expect to receive, contingently or otherwise, under this Agreement.

 

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6.              No Right To Continued Employment. Neither the establishment of the Agreement, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits will be construed as giving the Participant the right to be retained in the employment or service of the Company, any of its Subsidiaries or their respective successors, and the Participant will remain subject to discharge to the same extent as if this Agreement had never been executed.

 

7.              Successors. This Agreement will be binding upon the heirs, executors, administrators, successors and assigns of the parties, including the Participant, present and future, and any successor to the Company.

 

8.              Withholding Taxes. All amounts to be paid hereunder will be paid net of the amount of any taxes that the Company or its successor may be required to withhold therefrom in respect of any federal, state, local or other income or other taxes.

 

9.              Unfunded Status. This Agreement will not be funded. The Deferred Compensation Plan is an unfunded plan of deferred compensation and nothing in the Deferred Compensation Plan or this Agreement shall give the Participant, a Beneficiary or any other person any interest of any kind in the assets of the Company or its affiliates or create a trust or fiduciary relationship of any kind between the Company and any such person. The obligations hereunder to any Participant shall be the sole responsibility of the Company and the Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts deferred hereunder.

 

10.       Beneficiary Designation. The Participant may, upon execution of this Agreement, or from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) by whom any right under the Deferred Compensation Plan is to be exercised in case of his death. Each designation will revoke all prior designations by the same Participant, shall be submitted in writing to the Committee, and will be effective only when acknowledged in writing by the Committee.

 

I hereby designate                                        as my beneficiary under this Agreement.

 

11.       Notices. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party, by

 

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confirmed facsimile transmission or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Participant:

 

To the address on file with the Company

 

If to the Company:

 

5400 Legacy Drive

Cluster 2, Building 3

Plano, Texas 75024

Attn: General Counsel

 

Either party may furnish to the other in writing a substitute address and phone and fax numbers for delivery of notice in accordance with Section 11. Notices and communications shall be effective when actually received by the addressee.

 

12.       Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.

 

13.       Governing Law. This Agreement and all determinations made and actions taken pursuant hereto will be governed by the laws of the State of Delaware without giving effect to its principles of conflict of laws.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

 

	
 
    	
Safety-Kleen HoldCo., Inc.

(“Company”)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Robert M. Craycraft II
    
	
 
    	
Chief Executive Officer & President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Name] (“Participant”)
    

 

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EXHIBIT “A”

 

         Restricted Stock Units vest on December 24, 2004

         Restricted Stock Units vest on December 24, 2005

         Restricted Stock Units vest on December 24, 2006

         Restricted Stock Units vest on December 24, 2007

 

******

 

5Exhibit 10.5

 

RESTRICTED STOCK UNIT AGREEMENT

 

RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”) by and between Safety-Kleen HoldCo., Inc. (the “Company”) and                     (the “Grantee”), dated as of                     (the “Date of Grant”).

 

1.                                      Definitions. Capitalized terms which are not defined herein shall have the meaning set forth in the Safety-Kleen Equity Plan (the “Plan”).

 

2.                                      Grant of Restricted Stock Units. The Company hereby grants to the Grantee, pursuant to the Plan,                    restricted stock units (the “Restricted Stock Units”).

 

3.                                      Vesting of Restricted Stock Units. Subject to the provisions of this Agreement and the Plan and the Grantee’s continued employment or service with the Company on the applicable vesting dates, the Restricted Stock Units shall become vested and exercisable in four equal increments on each of the first four anniversaries of December 24, 2003.

 

4.                                      Rights and Obligations Upon Termination of Employment or Service.

 

(a)                                 If the Grantee’s employment or service with the Company is terminated for Cause, the Grantee’s unvested Restricted Stock Units shall immediately terminate.

 

(b)                                 If the Grantee’s employment or service with the Company terminates by reason of the Grantee’s death or Disability, then a pro-rata amount of the portion of the Restricted Stock Units scheduled to vest in the year in which the termination occurs (based upon the amount of service of the Grantee in such vesting year) shall vest upon such termination and the unvested portion of the Restricted Stock Units shall terminate upon such termination.

 

(c)                                  If the Grantee’s employment or service with the Company is terminated by the Company other than for Cause, then a pro-rata amount of the portion of the Restricted Stock Units scheduled to vest in the year in which the termination occurs (based upon the amount of service of the Grantee in such vesting year) shall vest upon such termination and the remaining unvested portion of the Restricted Stock Units shall immediately terminate upon such termination.

 

(d)                                 If the Grantee’s employment or service with the Company is terminated by the Optionee, then the unvested portion of the Restricted Stock Units shall immediately terminate upon such termination

 

5.                                      Payment of Restricted Stock Units. Unless otherwise provided pursuant to a deferral agreement between Grantee and the Company entered into pursuant to the authority of Section 11 of the Plan, no later than twenty business days after

 

 

each vesting date (or, in the case of a termination of employment due to the Grantee’s death or Disability or termination of the Grantee’s employment or service by the Company other than for Cause, no later than twenty business days after the date of Grantee’s death, Disability or termination, as the case may be), the Company shall deliver to the Grantee (or to the Grantee’s designated beneficiary) a number of Shares equal to the number of Restricted Stock Units which vested on such date.

 

6.                                      Nontransferability of Restricted Stock Units; Conditions to Transfer of Shares Acquired Pursuant to Restricted Stock Units. Without limiting the provisions of the Plan and except as otherwise determined by the Committee, the Restricted Stock Units shall not be assignable or transferable otherwise than by a duly executed and attested will or by the laws of descent and distribution. As a condition precedent to the transfer of any Shares acquired pursuant to the Restricted Stock Units at any time prior to a Public Offering, the Grantee shall obtain and provide to the Company the prior written agreement (in a form satisfactory to the Committee) of any proposed transferee to the applicability of the provisions of this Agreement, including Sections 6, 7 and 8 of this Agreement to such transferee in the same manner as such provisions would apply to the Grantee. Any purported transfer in violation of this Section 6 shall be void ab initio and of no force or effect.

 

7.                                      Call Rights.

 

(a)                                 Call Right. Upon and following the occurrence of any event described in this Section 7(a) prior to a Public Offering, the Company shall have the right to purchase (the “Call Right”), in its sole discretion, any or all of the Shares then held or thereafter acquired by the Grantee pursuant to Restricted Stock Units under the terms and conditions set forth in Section 8 hereof (including Restricted Stock Units which have been deferred pursuant to the Company’s Deferred Compensation Plan). The events which cause the Call Right to arise are:

 

(i)                                     termination of the Grantee’s employment or service with the Company by the Company for Cause; and

 

(ii)                                  termination of the Grantee’s employment or service for any reason other than Cause.

 

(b)                                 Notwithstanding the foregoing, there shall be no Call Rights with respect to Shares acquired pursuant to the Restricted Stock Units following a Public Offering.

 

8.                                      Terms and Conditions Applicable to Exercise of Call Rights.

 

(a)                                 Price. The Purchase Price per Share with respect to Shares purchased by the Company in connection with the exercise of a Call Right shall be the

 

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Fair Market Value of such Share on the date upon which the right is exercised.

 

(b)                                 Other Restrictions. Notwithstanding anything to the contrary contained herein, all repurchases of and payments for the Shares by the Company shall be subject to applicable legal restrictions and any restrictions in the Company’s and its affiliates’ debt and equity financing agreements. If any such restrictions prohibit the repurchase of or payment for the Shares hereunder, the Company shall make such repurchases or payments as soon as it is permitted to do so under such restrictions.

 

(c)                                  Other Terms and Conditions. Exercise of the Call Right shall be effected by written notice in accordance with the provisions of Section 9. Notices of the exercise of a Call Right shall be irrevocable and shall specify the number of Shares to be purchased. Subject to delivery of the applicable certificates, settlement of the Call Right shall occur on a date determined by the Company within thirty (30) days of the Company’s receipt or delivery of notice of exercise, as applicable (or, in the event of an extension of the time period for the Company to comply with its obligations in accordance with Section 8(b), within thirty (30) days of the end of the extension period), and shall be made in cash or by wire transfer or certified check. The Company shall be entitled to receive customary representations and warranties as to ownership, title, authority to sell and the like from the Grantee or his transferees regarding any repurchase hereunder and to receive such other evidence as may reasonably be necessary to effect the repurchase of the Shares hereunder.

 

9.                                      Notices. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party, by confirmed facsimile transmission or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Grantee:

 

To the address on file with the Company

 

If to the Company:

 

5400 Legacy Drive

Cluster 2, Building 3

Plano, Texas 75024

Attn: General Counsel

 

Either party may furnish to the other in writing a substitute address and phone and fax numbers for delivery of notice in accordance with Section 9. Notices and communications shall be effective when actually received by the addressee.

 

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10.                               Incorporation of Plan; Acknowledgment. The Plan is hereby incorporated herein by reference and made a part hereof, and the Restricted Stock Units and this Agreement are subject to all terms and conditions of the Plan. In the event of any inconsistency between the Plan and this Agreement, the provisions of the Plan shall govern. By signing this Agreement, the Grantee acknowledges having received and read a copy of the Plan. This Agreement and the Plan embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

 

11.                               Adjustment. The Restricted Stock Units shall be subject to adjustment as provided in Section 5 of the Plan.

 

12.                               Governing Law. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of law rules thereof.

 

13.                               Amendment and Termination. Rights and obligations under this Agreement shall not be adversely altered or impaired by termination or amendment of the Plan, except with the consent of the Grantee.

 

14.                               Representations.

 

(a)                                 The Grantee hereby represents and warrants that, upon vesting of the Restricted Stock Units, the Grantee will be acquiring Shares for investment solely for his own account and not with a view to, or for resale in connection with, the distribution or other disposition thereof. The Grantee agrees and acknowledges that he will not, directly or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of any Shares, or solicit any offers to purchase or otherwise acquire or take a pledge of any Shares, unless (i) such offer, transfer, sale, assignment, pledge, hypothecation or other disposition complies with (A) the provisions of the Plan and this Agreement and (B) the Securities Act or an exemption therefrom and (ii) the Grantee shall have furnished the Company with an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Company, to the effect that no registration under the Securities Act is required because of the availability of an exemption from registration under the Securities Act and all applicable state securities or “blue sky” laws.

 

(b)                                 The Grantee acknowledges and represents that he has been advised by the Company that (i) the offer and sale of the Shares have not been registered under the Securities Act; (ii) the Shares must be held indefinitely and the Grantee must continue to bear the economic risk of the investment in the Shares unless the offer and sale of such Shares is subsequently registered under the Securities Act and all applicable state securities laws or an

 

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exemption from such registration is available; (iii) there is no established market for the Shares and there may not be any public market for the Shares in the foreseeable future; (iv) Rule 144 promulgated under the Securities Act is not presently available with respect to the sale of any securities of the Company, and the Company has made no covenant to make such Rule available; (v) when and if the Shares may be disposed of without registration under the Securities Act in reliance on Rule 144, such disposition can be made only in limited amounts and in accordance with the terms and conditions of such Rule; (vi) if the Rule 144 exemption is not available, public offer or sale without registration will require the availability of an exemption under the Securities Act; (vii) a restrictive legend with respect to the foregoing shall be placed on the certificates representing the Shares, as well as a restrictive legend to the effect of Section 14(a) above; and (viii) a notation shall be made in the appropriate records of the Company indicating that the Shares are subject to restrictions on transfer and appropriate stop-transfer instructions will be issued to the Company’s transfer agent with respect to the Shares.

 

15.                               Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year set forth first above.

 

 

	
 
    	
Safety-Kleen HoldCo., Inc.

(“Company”)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Robert M. Craycraft II
    
	
 
    	
Chief Executive Officer & President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Name] (“Grantee”)
    

 

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