Document:

Exhibit 10.8

 

 

December 22, 2011

 

TERMS OF ROLE

 

This document outlines the terms of your employment with Safety-Kleen Systems, Inc. (the “Company” or “Safety-Kleen”).

 

	
Name:
    	
 
    	
Jeff Richard
    
	
 
    	
 
    	
 
    
	
Effective Date :
    	
 
    	
December 1,   2011
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
EVP,   Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
Location:
    	
 
    	
Plano,   TX
    
	
 
    	
 
    	
 
    
	
Reporting   To:
    	
 
    	
Bob   Craycraft, President and CEO
    
	
 
    	
 
    	
 
    
	
Base   Pay:
    	
 
    	
Weekly:    $7,403.85
    	
Annualized: $385,000
    
	
 
    	
 
    	
 
    	
 
    
	
Employment   Term:
    	
 
    	
The   employment relationship created under this agreement will begin on the Effective   Date and continue for an initial term of one (1) year (or until later   termination if this agreement is renewed as provided hereunder) unless   earlier terminated by either you or the Company. The term of this agreement   shall be automatically renewed for an additional one (1) year term on   the first anniversary of the Effective Date, and on each anniversary of the   Effective Date thereafter, unless terminated by either party upon giving at   least sixty (60) days written notice (a “Non-Renewal Notice”) to the other   party prior to the end of the initial term or, as applicable, a renewal term.
    
	
 
    	
 
    	
 
    
	
Annual   Incentive Plan:
    	
 
    	
You   are eligible to participate in the Company’s Annual Incentive Plan (the   “AIP”) for your position, pursuant to the terms of such plan, a copy of which   is attached. Effective December 1, 2011, your annual incentive target is   67% (Threshold bonus percentage is 33.5%, Maximum bonus percentage is 100.5%)   of your base pay earnings, contingent upon meeting the plan goals and   performance objectives established for your position.
    
	
 
    	
 
    	
 
    
	
Safety-Kleen   Equity Plan:
    	
 
    	
During   the Employment Term, you shall be eligible to participate in the Safety-Kleen   Equity Plan, as may be amended from time to time (the “Equity Plan”),   pursuant to the terms of such plan, a copy of which is attached. As soon as   administratively practicable after the Effective Date, you shall receive an   award of stock options equal in value to 100% of your annualized base pay at   the time of award. Beginning in 2012, and continuing throughout the   Employment Term, you shall be eligible to receive additional awards of stock   options under the Equity Plan each year equal in value to 100% of your   annualized base pay at the time of award. Awards made in 2012 and later shall   generally be awarded in December of the applicable year, and are subject   to approval of the Safety-Kleen, Inc. Board of Directors and both your   and Safety-Kleen, Inc.’s performance.
    

 

SAFETY-KLEEN SYSTEMS, INC. · 5360 LEGACY DRIVE · BLDG. 2, SUITE 100 · PLANO, TX 75024 · 972-265-2000 · FAX 972-265-2973

 

 

	
Severance   Protection:
    	
 
    	
If   your employment is terminated by the Company without Cause or you resign for   Good Reason, then you shall receive fifty-two (52) payments of your weekly   base pay, payable in accordance with the Company’s normal payroll procedures   (the “Severance Payments”), beginning with the first payroll period following   your effective date of termination (the “Date of Termination”). Each of the   foregoing payments shall be treated as a separate payment for purposes of Section 409A   of the Internal Revenue Code of 1986, as amended (“Section 409A”). In   addition, if the Company delivers a Non-Renewal Notice to you, then you shall   be entitled to the Severance Payments beginning with the first payroll period   following the last day of the Employment Term, provided that (i) your   employment terminates on or before the last day of the Employment Term, and   (ii) you do not continue employment with the Company following the end   of the Employment Term pursuant to another employment agreement or upon   mutual agreement with the Company (written or oral). If you are a participant   in the AIP during the year in which your employment terminates, you rights   regarding a bonus upon your termination of employment will be governed by and   subject to the terms and conditions of the AIP plan document. 

 

Notwithstanding   anything herein to the contrary, no Severance Payments shall be payable to   you upon a termination without Cause in connection with a “Change in Control”   (as defined in the Equity Plan) if, on or before the effective date of such   Change in Control, the Company, Parent or a successor thereto offers you   employment for the period on or after such Change in Control that is at least   equal to the remainder of your Employment Term with substantially equivalent   responsibilities and at least as favorable compensation, severance benefits,   and location. 

 

For   purposes of this agreement, the term “Cause” shall mean: (i) the willful   and continued failure by you substantially to perform your duties with the   Company (other than any such failure resulting from disability or other   causes beyond your reasonable control); or (ii) the willful engaging by   you in conduct that is demonstrably and materially injurious to the Company,   monetarily or otherwise; or (iii) embezzlement or other fraud committed   by you, at your direction or with your personal knowledge, to the detriment   of Parent, the Company or their direct or indirect subsidiaries, as   determined by Parent’s Board of Directors in its sole discretion; or (iv) your   conviction, commission, or plea of nolo contendere   for any criminal offense or commission by you of any act that Parent’s Board   of Directors in its sole discretion considers materially damaging or   discrediting to Parent, the Company or their direct or indirect subsidiaries;   in case of (i), and (ii) above with notice or a reasonable opportunity   to cure such matter. 

 

For   purposes of this agreement, the term “Good Reason” shall mean your   resignation from employment following the occurrence of one or more of the   following conditions without your consent: (i) a material diminution in   your title, authority, duties, or responsibilities; (ii) a material   diminution in your base pay or target bonus opportunity (and any such   diminution that constitutes Good Reason shall not be taken into account in   calculating your Severance Payments); (iii) a requirement that you   relocate to a geographic 
    

 

 

	
 
    	
 
    	
area   that is more than fifty (50) miles from Plano, Texas; or (iv) any other   material violation by Parent or the Company of this agreement. None of the   foregoing events or conditions shall constitute Good Reason unless   (i) within sixty (60) days after you first have actual knowledge of the   existence of such condition unless such event or condition continues beyond thirty   (30) days without cure after you have provided the Company with written   notice that you believe in good faith that such condition giving rise to such   claim of Good Reason has occurred, so long as such notice is provided. You   shall not be considered to have resigned for Good Reason unless you notify   the Company of your resignation not more than ninety (90) days after the end   of the thirty (30) day cure period. Notwithstanding anything herein to the   contrary, (x) a Non-Renewal Notice by the Company shall not constitute   Good Reason; and (y) you cannot resign for Good Reason on or after   receiving a Non-Renewal Notice from the Company.
    
	
 
    	
 
    	
 
    
	
Benefits:
    	
 
    	
You   will be eligible to participate in the Company’s employee benefits programs   pursuant to the terms of each such program, as amended from time to time.
    
	
 
    	
 
    	
 
    
	
Vacation:
    	
 
    	
During   the Employment Term, you will be entitled to four (4) weeks’ paid   vacation during each calendar year (prorated for 2011 based on actual number   of days this Agreement was in effect). Vacation shall be taken at such times   and intervals as you determine, subject to the reasonable business needs of   the Company, in accordance with the Company’s vacation policies and   procedures.
    
	
 
    	
 
    	
 
    
	
Section 409A:
    	
 
    	
It   is the intent of the parties that all Severance Payments either be excluded   from the definition of deferred compensation subject to Section 409A, or   if not so excluded to comply with all requirements of Section 409A, and   to the maximum extent permitted by law, this agreement shall be so construed   and administered. Without limiting the foregoing, if you incur a termination   of employment that does not constitute a “separation from service” as defined   in Section 409A, then, to the extent that any payment pursuant to this   agreement is subject to Section 409A, your right to such payment shall   be fully vested and nonforfeitable upon the occurrence of the termination of   employment, but payment of such amount shall be deferred until the date on   which you incur a separation from service. In addition, in the event that you   are a “specified employee” as defined in Section 409A as of your Date of   Termination, to the extent required by applicable law, payment of any amount   specified in this agreement which is not otherwise exempt from   Section 409A will not commence until six (6) months and one   (1) day following the date of your Date of Termination (the “Delayed   Commencement Date”). Upon the occurrence of the Delayed Commencement Date,   that portion of such amounts which would have been paid during the six (6) month   period will be paid to you in a lump sum on such date and the remainder of   such amounts, if any, will be paid pursuant to the terms of this agreement.
    

 

 

Acknowledgement

 

I understand and agree to the terms contained herein; I agree that these terms supersede all prior employment offers or agreements with Safety-Kleen (or any subsidiary or affiliate) and that all such prior employment offers or agreements are hereby terminated.

 

I understand and agree that my title, pay and benefits plans may be amended or revised by Safety-Kleen at any time during my employment, to the extent not inconsistent with the terms of this agreement.

 

I agree to execute, comply with and be bound by the Non-disclosure, Non-solicitation and Non-competition Agreement attached hereto as Exhibit “A”. I agree to treat the terms of this Agreement as strictly confidential, and will not disclose the same to any Company employees other than those involved in the preparation and negotiation of this Agreement.

 

I understand and agree that my relationship with Safety-Kleen will continue to be “at-will”, meaning that either I or the Company may elect to end the employment relationship at any time for any reason, with or without notice, without continuing obligations other than those related to the applicable employee benefits programs or as specifically set forth in this document.

 

	
Accepted   and Agreed By:
    	
 
    	
Witnessed   By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Jeffrey O. Richard
    	
1/19/12
    	
 
    	
/s/   Robert M. Craycraft
    	
1/19/12
    
	
Jeff   Richard 
    	
  Date
    	
 
    	
Bob   Craycraft 
    	
      Date
    
	
EVP,   Chief Financial Officer
    	
 
    	
President   and Chief Executive Officer
    

 

 

AMENDMENT TO TERMS OF ROLE

 

June 11, 2012

 

This document outlines the terms and conditions of the amendment to your Terms of Role between you and Safety-Kleen Systems, Inc. (the “Company” or “Safety-Kleen”).  Except as specifically modified by this Amendment to Terms of Role, the terms and conditions of your Terms of Role shall remain in effect and terms not defined in this Amendment to Terms of Role shall have the same meanings as contained in the Terms of Role.

 

	
Name:
    	
 
    	
Jeffrey   Richard
    
	
 
    	
 
    	
 
    
	
Effective   Date(s):
    	
 
    	
May 11,   2012, provided, however that the changes to the “Base Pay” set forth below   shall be effective April 22, 2012.
    
	
 
    	
 
    	
 
    
	
Base   Pay:
    	
 
    	
Weekly:    $7,596.15 
    	
Annualized:    $395,000
    
	
 
    	
 
    	
 
    
	
Transaction   Bonus:
    	
 
    	
You   are eligible to receive a bonus equal to 15.0% of the Transaction Bonus Pool   (as defined below) in the event a “Transaction” (as defined below) closes on   or before May 11, 2013, payable in a lump sum cash payment on the date   the Transaction closes (less applicable withholdings and taxes) (the “Transaction   Bonus”). Your right to the Transaction Bonus shall terminate if (i) a   Transaction does not close on or before May 11, 2013 or (ii) your   employment is terminated prior to the date the Transaction closes for any   reason other than as a result of death, Disability (as defined below),   termination by the Company for Cause or termination by you for Good Reason.   If, prior to the date the Transaction closes, your employment is terminated   by the Company without Cause, by you for Good Reason, or due to your death or   Disability, then, if a Transaction closes on or before May 11, 2013, you   shall be eligible to receive a Transaction Bonus on the date the Transaction   closes as if you were still actively employed on such date. 

 

For   purposes of the Transaction Bonus: 

 

“Transaction   Bonus Pool” means 1% of the Equity Value over $1 billion. 

 

“Equity   Value” means in the case of a Transaction structured as a stock purchase or a   merger with Safety-Kleen, Inc., SK Holding Company, Inc. or the   Company (the “Acquired Company”), (a) the price to be paid to the   Acquired Company’s stockholders by the buyer for 100% of the outstanding   shares of common stock (determined on a fully-diluted basis) of the Acquired   Company or (b) if the buyer does not purchase 100% of the Acquired Company’s   outstanding shares (on a fully diluted basis) the amount that would have been   paid by the buyer if the buyer had purchased 100% of the Acquired Company’s   outstanding shares (on a fully diluted basis), assuming the same purchase   price per share being paid for 100% of 
    

 

 

	
 
    	
 
    	
the   Acquired Company’s outstanding shares (on a fully diluted basis). 

 

“Transaction”   means any one person, or more than one person acting as a “group” within the   meaning of section 409A of the Internal Revenue Code of 1986, as amended   (“Section 409A”), acquires the ownership of stock in the Acquired   Company that, together with stock held by such person or group, constitutes   eighty percent (80%) or more of the total fair market value or total voting   power of the stock of the Acquired Company. Notwithstanding the foregoing, a   Transaction shall be deemed to have occurred only if the event is also a   “change in the ownership” or a “change in the ownership of a substantial   portion of the assets” in each case as defined in Treasury Regulation   1.409A-3(i)(5) or successor guidance thereto. 

 

“Disability”   means you meet one of the following requirements (i) you are unable to   engage in any substantial gainful activity by reason of any medically   determinable physical or mental impairment that can be expected to result in   death or can be expected to last for a continuous period of not less than 12   months; or (ii) you are, by reason of any medically determinable   physical or mental impairment that can be expected to result in death or can   be expected to last for a continuous period of not less than 12 months,   receiving income replacement benefits for a period of not less than three   months under an accident and health plan sponsored by the Company for its   employees.
    
	
 
    	
 
    	
 
    
	
Change   in Control Severance Protection:
    	
 
    	
From   the Effective Date until May 11, 2013, the following severance   protection shall be applicable in the event of a Change in Control instead of   the first and second paragraphs of the Severance Protection section of your   Terms of Role: 

 

If   your employment is terminated by the Company without Cause or you resign for   Good Reason following a “Change in Control” (as defined in the Equity   Incentive Plan) or within six (6) months prior to a Change in Control,   then you shall receive (i) fifty-two (52) payments of your weekly base   pay, payable in accordance with the Company’s normal payroll procedures,   beginning with the first payroll period following your Date of Termination;   (ii) a bonus payment for the year in which your Date of Termination occurs,   in accordance with the AIP achievements at the planned payout date, payable   at the time payments are made to other participants under the AIP (with no   pro-ration of the payout if only partial performance year completed) and   (iii) if you are eligible for, and timely elect, COBRA continuation   coverage under the Company’s group health plan for you (and your eligible   dependents), payment by the Company of the premium for such COBRA   continuation coverage until the earlier of (A) the date that is twelve   (12) months following your Date of Termination, or (B) the date COBRA   coverage under the
    

 

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Company’s   group health plan would otherwise end (other than for non-payment of   premiums) (collectively, (i), (ii) and (iii) are referred to herein   as the “CIC Severance Payments”). You understand and agree that you will be   solely responsible for payment of all COBRA premiums for any COBRA   continuation coverage available after the time period set forth in   (iii) of the immediately preceding sentence. Each of the CIC Severance   Payments shall be treated as a separate payment for purposes of   Section 409A.
    

 

Acknowledgement

 

I understand and agree to the terms contained herein; I agree that these terms amend my Terms of Role.

 

I understand and agree that my title, pay and benefits plans may be amended or revised by Safety-Kleen at any time during my employment, to the extent not inconsistent with the terms of this agreement.

 

I agree to treat the terms of this Agreement as strictly confidential, and will not disclose the same to any Company employees other than those involved in the preparation and negotiation of this Agreement.

 

I understand and agree that my relationship with Safety-Kleen will continue to be “at-will”, meaning that either I or the Company may elect to end the employment relationship at any time for any reason, with or without notice, without continuing obligations other than those related to the applicable employee benefits programs or as specifically set forth in this document.

 

	
Accepted   and Agreed By:
    	
 
    	
 
    	
 
    	
Witnessed   By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
/s/   Jeffrey O. Richard
    	
 
    	
6/21/2012
    	
 
    	
/s/   Robert M. Craycraft
    	
 
    	
6/22/2012
    
	
Jeffrey   Richard
    	
 
    	
Date
    	
 
    	
Bob   Craycraft
    	
 
    	
Date
    
	
 
    	
 
    	
 
    	
 
    	
President   and Chief Executive Officer
    	
 
    	
 
    

 

3Exhibit 10.9

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT by and between Safety-Kleen Systems, Inc., a Wisconsin corporation (the “Company”), Safety-Kleen, Inc. (“SK”) and Dave Sprinkle (the “Executive”), is entered into on this the 31st day of December, 2009 to be effective as of January 1, 2010 (the “Effective Date”).

 

WHEREAS, the Company has determined that it is in the best interests of the Company to employ the Executive as the Executive Vice President, Operations of the Company and SK, and Executive desires to serve the Company in that capacity pursuant to the terms set forth herein.

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.                                      Employment Period.  The Company shall employ the Executive, and the Executive shall serve the Company, on the terms and conditions set forth in this Agreement for the period beginning on the Effective Date and ending on the date one year after the Effective Date (“Employment Period”): provided, however, that the Employment Period (i) shall automatically be extended on the same terms and conditions set forth herein for successive terms of one (1) year unless either party advises the other party in writing at least ninety (90) days prior to the end of the initial term, or any annual extension thereof, of its or his election to not extend this Agreement, and (ii) may be terminated in accordance with Section 4 below.

 

2.                                      Position and Duties.  During the Employment Period, the Executive shall serve as Executive Vice President, Operations of the Company and SK and in substantially similar positions in the subsidiaries and affiliates of the Company, with the duties, functions, responsibilities and authority customarily associated with such positions. During the Employment Period, the Executive will devote substantially all of his attention and time to the business and affairs of the Company, excluding any periods of vacation and sick leave to which Executive is entitled, and will not engage in any other business activities that will unreasonably interfere with the Executive’s employment pursuant to this Agreement. During the Employment Period, Executive will be based out of the Company’s offices in Atlanta, Georgia, and the Executive’s services shall be performed at such locations where the Company conducts business throughout North America as the needs and exigencies of the business of the Company from time to time reasonably require. However, the Executive shall not be required by the Company to relocate from his current residence as a condition of employment.

 

3.                                      Compensation.

 

(a)                                 Salary.  From the Effective Date through the end of the Employment Period, the Executive shall receive an annual base salary (the “Salary”) of not less than $336.375 payable in accordance with the Company’s normal payroll practices for executives. Executive will receive an annual performance review on or about each anniversary of the Effective Date, and may

 

 

receive a corresponding Salary increase at such time. Any new salary due to any such increase will thereafter be deemed the “Salary” for purposes of this Agreement.

 

(b)                                 Annual Bonus.  Executive will have an annual bonus as a percentage of Salary (the “Bonus”) as follows:

 

	
Plan
    	
 
    	
Plan +
    	
 
    	
Plan ++
    	
 
    
	
67%
    	
 
    	
133%
    	
 
    	
200%
    	
 
    

 

The Bonus will be paid in a lump sum and is subject to the terms and conditions of the MIP Bonus program approved by the Safety-Kleen, Inc. Board of Directors each year.

 

(c)                                  Other Benefits.  During the Employment Period: (i) the Executive shall be entitled to participate in the Company’s 401-k plan, applicable fringe benefit programs and other benefit plans, policies and programs of the Company applicable to Executive as may be amended by the Company from time to time; and (ii) the Executive shall be entitled to four weeks of vacation, effective and vested immediately, and four weeks of additional vacation effective and vested as of each anniversary of the Effective Date during the Employment Period.

 

(d)                                 Programs, Procedures and Policies. Executive will comply with and be bound by the Company’s applicable current and future programs, procedures, plans and policies, as may be amended by the Company from time to time, except to the extent such programs, procedures, plans or policies are contrary to the terms and conditions of this Agreement.

 

4.                                      Termination of Employment.

 

(a)                                 Death or Disability.  In the event of the Executive’s death during the Employment Period, the Executive’s employment with the Company shall terminate automatically. In addition, the Company shall have the right to terminate the Executive’s employment because of the Executive’s Disability (as defined in the Company’s Long Term Disability Benefit Plan) during the Employment Period. A termination of the Executive’s employment by the Company for Disability shall be communicated to the Executive by written notice, and shall be effective on the 5th day after receipt of such notice by the Executive (the “Disability Effective Date”), unless the Executive returns to full-time performance of the Executive’s duties before the Disability Effective Date.

 

(b)                                 By the Company.  The Company may terminate the Executive’s employment during the Employment Period with or without Cause. If termination by the Company is without Cause, the Company shall give Executive thirty (30) days prior written notice of its intent to do so. For purposes of this Agreement, “Cause” means:

 

(i)            the willful and continued failure by Executive to perform his material job duties with the Company which, if curable, is not cured within twenty (20) days after receipt of written notice from the Company specifying such failure;

 

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(ii)           the Executive engaging in any personal misconduct involving dishonesty, illegality, fraud or theft that relates to the Company’s assets, activities or operations; or

 

(iii)          the Executive’s material breach of this Agreement which, if curable, is not cured within twenty (20) days after receipt of written notice from the Company specifying such breach.

 

(c)                                  Voluntarily by the Executive Within Six Months Following New CEO Date of Hire.  The Executive and the Company acknowledge that as of the Effective Date, the Company is engaged in an executive search for a new Chief Executive Officer or interim Chief Executive Officer (the “New CEO”). Accordingly, the Parties agree that the Executive may voluntarily terminate his employment at any time during the six month period following the date of hire of the New CEO by giving not less than sixty (60) days prior written notice thereof to the Company. In such event, the Executive shall be entitled to the payments described in Section 5(b) hereof.

 

(d)                                 Voluntarily by the Executive After Six Months Following New CEO Date of Hire.  The Executive may also voluntarily terminate his employment at any time after the six month anniversary of the date of hire of the New CEO by giving not less than thirty 30 days prior written notice thereof to the Company. In such event, the Executive shall be entitled to the payments described Section 5(c) hereof.

 

(e)                                  Date of Termination.  The “Date of Termination” means the last day of the Employment Period if not otherwise terminated early pursuant to any provision of this Agreement (“End of the Term”), the date of the Executive’s death, the Disability Effective Date, the date on which the termination of the Executive’s employment by the Company with Cause or without Cause is effective, or the date on which the voluntary termination of the Executive’s employment by Executive is effective, as the case may be.

 

5.                                      Obligations of the Company on Termination.

 

(a)                                 Termination by the Company Without Cause: Non-Renewal; or by Executive Resigning Following Breach.  If the Company terminates the Executive without Cause (other than in connection with death or Disability as described in Section 4(a) above) or fails to renew or extend this Agreement beyond the initial term, or any extension thereof, or if Executive’s employment is terminated due to the Executive resigning because the Company fails to comply with the material terms and conditions of this Agreement after notice from the Executive and a reasonable opportunity to cure such matter, then the Company shall pay to Executive; (i) in a lump sum in cash within ten (10) days after the Date of Termination (1) the sum of any portion of the Salary and any other compensation earned for the period up to the Date of Termination that has not yet been paid, (2) the cash equivalent of any accrued but unused vacation, and (3) severance pay in an amount equal to the Salary as described in Section 3(a) above; (ii) any MIP Bonus for the year in which the Date of Termination occurs, will be payable to Executive when and as paid to other Company employees, and will be prorated for length of employment in that MIP year); and (iii) provided Executive elects continued health insurance coverage through COBRA, the Company will pay the monthly COBRA contributions for executive and his family for health insurance coverage, as may be amended from time to time, (less an amount equal to the premium contribution paid by active Company employees) during such twelve month period;

 

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provided however that if at any time Executive becomes eligible for health insurance through subsequent employment or otherwise the Company’s health benefit obligations shall immediately cease and the Company shall have no further obligation to make COBRA contributions on Executive’s behalf.

 

(b)                                 Voluntary Termination by Executive Within Six Months Following New CEO date of Hire.  If the Executive voluntarily terminates employment during the six month period following the date of hire of the New CEO pursuant to Section 4(c) above, then the Company shall pay to the Executive (i) in a lump sum in case within ten (10) days after the Date of Termination (1) the sum of any portion of the Salary and any other compensation earned for the period up to the Date of Termination that has not yet been paid.  (2) the cash equivalent of any accrued but unused vacation, and (3) severance pay in an amount equal to the Salary as described in Section 3(a) above.

 

(c)                                  Termination by the Company for Cause or voluntarily by Executive After Six Months Following New CEO Date of Hire. If the Executive’s employment is terminated (i) for Cause by the Company or (ii) voluntarily by Executive after the six month period following the date of hire of the New CEO pursuant to Section 4(d) above then the Company shall pay the Executive within 10 days after the Date of Termination a lump-sum cash amount equal to the sum of any portion of the Salary and any other compensation earned for the period up to the Date of Termination that has not yet been paid plus the cash equivalent of any accrued but unused vacation.

 

(d)                                 Termination on account of Death or Disability.  If the Executive’s employment is terminated due to the Executive’s death or Disability the Company shall pay the Executive within 10 days after the Date of Termination, a lump-sum case amount equal to the sum of any portion of the Salary and any other compensation earned for the period up to the Date of Termination that has not yet been paid, plus the cash equivalent of any accrued but unused vacation.

 

(e)                                  In addition to the payments and benefits to which the Executive or the Executive’s estate may be entitled under Sections 5(a) and (b) above and Section 5(d) below the Executive shall be entitled to receive any vested or other benefits to which he may be entitled pursuant to the terms and conditions of the Company’s 401-k Plan and any Company Life.  Disability or Health Insurance Plan in which he may participate, and any other amounts due under this Agreement.

 

(f)                                   In addition the Company further agrees that notwithstanding anything to contrary in any existing stock option plan or agreement between it and Executive the entire vested portion of any options then held by Executive shall remain exercisable for a period of twelve (12) months from the Date of Termination.

 

(g)                                  Change in Control.  If Executive’s employment ends due to any of the items listed in Section 5(a) after or in anticipation of a Change in Control (as defined below) instead of the amounts in Section 5(a) the Company shall upon execution of the Company’s settlement agreement and general release pay to the Executive: (i) in a lump sum in case within 10 days after the Date of Termination. (1) the sum of any portion of the Salary and any other compensation earned for the period up to the Date of Termination that has not yet been paid.  (2) the cash equivalent of any accrued but unused vacation and (3) severance pay in an amount

 

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equal to two year’s Salary as described in Section 3(a) above: (ii) any MIP Bonus for the year in which the Date of termination occurs, will be payable to Executive when and as paid to other Company employees, and will be prorated for length of employment in that MIP years and (iii) provided Executive elects continued health insurance coverage through COBRA, the Company will pay the monthly COBRA contributions for Executive and his family for health insurance coverage, as may be amended from time to time, (less an amount equal to the premium contribution paid by active Company employees) during such twelve (12) month period: provided, however, that if at any time Executive becomes eligible for health insurance through subsequent employment or otherwise, the Company’s health benefit obligations shall immediately cease, and the Company shall have no further obligation to make COBRA contributions on Executive behalf. A “Change of Control” for purposes of this Agreement means: (i) the date that any one person, or more than one person acting as a “group” within the meaning of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), acquires ownership of stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company, SK Holding Company, Inc., or Safety-Kleen, Inc.: (ii) the date that any one person, or more than one person acting as a “group” within the meaning of section 409A of the Code, acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition by such person or persons) assets of the Company, SK Holding Company, Inc., or safety-Kleen, Inc., that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all the assets of the Company, SK Holding Company, Inc., or Safety-Kleen, Inc., immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets. Notwithstanding the foregoing, a Change of Control shall be deemed to have occurred only if the event is also a “change in the ownership” or a “change in the ownership of a substantial portion of the assets” in each ease as defined in Treasury Regulation L409A-3(i)(5) or successor guidance thereto. If Executive’s employment ends due to any of the items listed in Section 5(a) within six (6) months prior to a Change of Control, it will be deemed to be “in anticipation of a Change of Control” for purposes of this paragraph.

 

6.                                      Confidentiality and Noncompetition.  Executive agrees to execute, comply with and be bound by the Non-disclosure. Non-solicitation and Non-competition Agreement attached hereto as Exhibit “A” and incorporated herein by reference. Executive will treat the terms of this Agreement as strictly confidential, and will not disclose the same to any Company employees other than those involved in the preparation and negotiation of this Agreement.

 

7.                                      Successors.  (a) this Agreement is personal to the Executive and, without the prior written consent of the company, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

 

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The Company shall not assign this Agreement without the prior written consent of the Executive, which consent shall not be unreasonably withheld.

 

8.                                      Miscellaneous. (a) the captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified

 

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except by a written agreement executed by the parties hereto or their respective successors and legal representatives.

 

(b)                                 All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid addressed as follows:

 

	
If   to the Executive:
    	
Dave   Sprinkle
    
	
 
    	
[Address   on file with the Company]
    
	
 
    	
 
    
	
If   to the Company or SK:
    	
Safety-Kleen   Systems, Inc.
    
	
 
    	
5360   Legacy Drive,
    
	
 
    	
Building   2, Suite 100
    
	
 
    	
Plano,   Texas 75024
    
	
 
    	
Attention:   Chief Executive Officer
    

 

or to such other address as either party furnishes to the other in writing in accordance with this paragraph (b) of Section 8. Notices and communications shall be effective when actually received by the addressee.

 

(c)                                  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. If any provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Agreement, shall remain valid and enforceable and continue in full force and effect to the fullest effect consistent with law.

 

(d)                                 Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations.

 

(e)                                  The Executive’s or the Company’s failure to insist upon strict compliance with any provision of, or to assert any right under, this Agreement shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement.

 

(f)                                   The Executive and the Company acknowledge that this Agreement supersedes any other agreement, whether written or oral, between them concerning the subject matter hereof, including any prior employment agreement severance agreement or plan and change of control agreement or plan.

 

(g)                                  This Agreement shall be governed by and construed in accordance with, the laws of the State of Texas without reference to principles of conflict of laws.

 

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

 

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand, and the Company and SK have caused this Agreement to be executed in their names in their behalf, all as of the day and year first above written.

 

 

	
 
    	
/s/ Dave Sprinkle
    
	
 
    	
Dave Sprinkle
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SAFETY-KLEEN SYSTEMS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pat Daugherty
    
	
 
    	
Name:
    	
Pat Daugherty
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SAFETY-KLEEN, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pat Daugherty
    
	
 
    	
Name:
    	
Pat Daugherty
    
	
 
    	
Title:
    	
Director
    

 

7

 

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment No. 1”) is made and entered into effective as of July 30,  2012, by and between Safety-Kleen Systems, Inc., a Wisconsin corporation (the “Company”), Safety-Kleen, Inc., a Delaware corporation (“SK”) and Dave Sprinkle (the “Executive”) for purposes of amending that certain Employment Agreement entered into by the parties on December 31, 2009 to be effective as of January 1, 2010.

 

WHEREAS, the Company and SK have determined that it is in their best interests to amend the Agreement as set forth in this Amendment No. 1, and the Executive desires to amend the agreement as set forth in this Amendment No. 1.

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.                                      Section 5 of the Agreement is hereby amended to add the following new subsection (h) to such Section:

 

(h)             Compliance with Code §409A. The payments and benefits under this Agreement and the terms of any release agreement are intended to be exempt from, or to comply with, §409A of the Code and the regulations promulgated thereunder and, accordingly, to the maximum extent permitted, this Agreement and any release agreement shall be interpreted and administered consistent with  such intent. Notwithstanding anything contained in this Agreement to the contrary, Executive shall not be considered to have terminated employment with the Company for purposes of any payments under this Agreement that are subject to §409A until Executive has incurred a “separation from service” from the Company within the meaning of §409A. If Executive is deemed by the Company at the time of his separation from service by the Company to be a “specified employee” for purposes of §409A(a)(2)(B)(i) of the of the Code, to the extent delayed commencement of any portion of the benefits to which he is entitled under this Agreement is required in order to avoid a prohibited distribution under §409A(a)(2)(B)(i) of the Code, such portion of his benefits shall not be provided to him prior to the earlier of (a) the expiration of the six-month period measured from the date of his separation from service with the Company or (b) the date of his death. Upon the expiration of the applicable Code §409A(a)(2)(B)(i) period, all deferred payments shall be paid to Executive in a lump sum, and any remaining payments due under the Agreement shall be paid as otherwise provided herein. Notwithstanding the foregoing or any other provisions of this Agreement, the Company and Executive agree that, for purposes of the limitations on nonqualified deferred compensation under §409A, each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying the §409A deferral election rules and the exclusion from §409A for certain short-term deferral amounts. To the extent required to avoid an accelerated or additional tax under §409A, amounts reimbursable to Executive shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to Executive) during one year may not affect amounts

 

1

 

reimbursable or provided in any subsequent year. In the event that any payments under this Agreement are conditioned upon the prior execution (and nonrevocation) by Executive of a general release of claims against the Company, such payments shall be made within 90 days following Executive’s separation from service (the “Release Consideration and Revocation Period”) and if the Release Consideration and Revocation Period begins in one calendar year and ends in a second calendar year, then any such payments shall be delayed until the second of such two calendar years (regardless of whether Executive delivers the release in the first or second calendar year). If any provision of this Agreement would subject Executive to any additional tax or interest under §409A, then the Company shall use its best efforts to amend such provision consistent with the original economic intent of the parties. The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with §409A and makes no undertaking to preclude §409A from applying to any such payment

 

2.              Except as specifically amended, altered, modified and changed by this Amendment No. 1, the Agreement remains in full force and effect as originally written.

 

[Signature page to follow)

 

2

 

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand, and each of the Company and SK has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written.

 

 

	
 
    	
/s/ Dave Sprinkle
    
	
 
    	
Dave Sprinkle
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Safety-Kleen Systems, Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert M. Craycraft II
    
	
 
    	
Title:
    	
Chief Executive Officer and President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Safety-Kleen, Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert M. Craycraft II
    
	
 
    	
Title:
    	
Chief Executive Officer and President
    

 

3

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