Document:

exv10w9

 

EXHIBIT 10.9

PARTICIPATION RIGHTS AGREEMENT

     This PARTICIPATION RIGHTS AGREEMENT (this “Agreement”) is dated as of                     , 2008 by and
between HERITAGE-CRYSTAL CLEAN, INC., a Delaware corporation (the “Company”) and THE HERITAGE
GROUP, an Indiana general partnership (“THG”).

RECITALS:

     WHEREAS, THG is one of the founding members of Heritage-Crystal Clean, LLC (the Company’s
predecessor in interest);

     WHEREAS, it is a condition to THG’s consent to the Company’s initial public offering (the
“IPO”) that the Company grant THG certain participating rights with respect to Future Offerings (as
hereinafter defined); and

     WHEREAS, on the date hereof, the Company completed its IPO with respect to the Company’s
common stock, $0.01 par value per share (the “Common Stock”).

     NOW THEREFORE, the Company and THG hereby agree as follows:

ARTICLE I

THG’S REPRESENTATIONS AND WARRANTIES

     THG represents and warrants to the Company, as of the date hereof and as of the date of each
Future Closing, that:

     1.1 Organization and Qualification. THG is an Indiana general partnership, duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, with full power and authority to perform its obligations under this Agreement.

     1.2 Authorization; Enforcement. This Agreement and the consummation of the
transactions contemplated hereby (and each Future Closing) have been (or will be) duly and validly
authorized by, and duly executed and delivered on behalf of, THG. This Agreement constitutes the
valid and binding agreement of THG enforceable in accordance with its terms, except as such
enforceability may be limited by: (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws in effect that limit creditors’ rights generally; (ii) equitable
limitations on the availability of specific remedies; and (iii) principles of equity (regardless of
whether such enforcement is considered in a proceeding in law or in equity).

     1.3 No Conflicts. Neither the execution and delivery of this Agreement nor the
performance or consummation of the transactions contemplated hereby will: (i) contravene, conflict
with, result in a breach or violation of, constitute a default under, or accelerate the performance
provided by, in any material respect any provisions of: (A) any law, rule, ordinance or regulation
of any governmental authority, or any judgment, order, writ, decree, permit or license of any
governmental authority, to which THG may be subject or bound; or (B) any contract, agreement,
commitment or instrument to which THG is a party or by which THG is

 

 

bound or committed; (ii) contravene, conflict with, result in a breach or violation of,
constitute a default under, or accelerate the performance provided by, any provisions of the
partnership agreement (or other organizational or constitutional documents) of THG; (iii) require
any notification to, filing with, or consent of, any person or governmental authority; or (iv) give
rise to any right of termination, cancellation or acceleration of any right or obligation of THG or
any other person.

     1.4 Securities Matters. In connection with the Company’s compliance with applicable
securities laws:

          (a) THG understands that certain Equity Securities sold to THG at a Future Closing under this
Agreement may be offered and sold to THG in reliance upon specific exemptions from the registration
requirements of United States and state securities laws (an “Exempt Offering”) and that, in each
Exempt Offering, the Company will rely upon the truth and accuracy of, and THG’s compliance with,
the representations, warranties, agreements, acknowledgments and understandings of THG set forth in
Sections 1.4 and 1.5 hereof in order to determine the availability of such exemption and the
eligibility of THG to acquire such Equity Securities. For purposes of this Agreement, “Equity
Securities” means any equity securities of the Company that are not Exempted Securities (as
hereinafter defined), including, without limitation, Common Stock, any other class or series of
capital stock, and options, warrants and other securities convertible and/or exercisable into
Common Stock or any other class or series of capital stock.

          (b) Any Equity Securities purchased by THG in an Exempt Offering will be purchased by THG for
its own account, not as a nominee or agent, for investment purposes and not with a present view
towards resale, except pursuant to sales exempted from registration under the Securities Act of
1933, as amended (the “1933 Act”), or registered under the 1933 Act.

          (c) THG is and, if required in order for THG to be able to participate in an Exempt Offering,
will be as of the date it purchases Equity Securities in an Exempt Offering, an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D under the 1933 Act, and has such
knowledge and experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Equity Securities. THG understands that its investment in
Equity Securities issued in an Exempt Offering involves a significant degree of risk. THG
understands that no United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the Equity Securities.

     1.5 Restrictions on Transfer. THG understands that any Equity Securities issued in an
Exempt Offering will not be registered under the 1933 Act or any applicable state securities laws.
THG may be required to hold the Equity Securities issued in an Exempt Offering indefinitely and
such Equity Securities may not be transferred unless (i) such Equity Securities are sold pursuant
to an effective registration statement under the 1933 Act, which the Company may or may not choose
to file with the United States Securities and Exchange Commission in its sole discretion, or (ii)
THG shall have delivered to the Company an opinion of counsel to the effect that such Equity
Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such
registration, which opinion shall be reasonably acceptable to the

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Company. THG understands that until the earlier of (x) such time as the resale of any Equity
Securities issued in an Exempt Offering has been registered under the 1933 Act, or (y) the holding
period for such Equity Securities set forth in Rule 144 under the 1933 Act as in effect from time
to time has expired, certificates evidencing such Equity Securities may bear a restrictive legend
in substantially the following form (and a stop-transfer order may be placed against transfer of
the certificates evidencing such Equity Securities):

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE “ACT”). THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE CORPORATION.”

     1.6 Registered Offerings. The provisions of Sections 1.4 and 1.5 shall not apply to
any Equity Securities that are or are to be offered and sold to THG pursuant to an effective
registration statement under the 1933 Act.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to THG as of the date hereof that:

     2.1 Organization and Qualification. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction in which it is
incorporated, with corporate power and authority to own, lease, use and operate its properties and
to carry on its business as now operated and conducted.

     2.2 Authorization; Enforcement. The Company has all requisite corporate power and
authority to enter into and perform this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Company and the consummation by it of
the transactions contemplated hereby have been duly authorized by the Company. This Agreement has
been duly executed and delivered by the Company. This Agreement will constitute upon execution and
delivery by the Company, a legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability may be limited by: (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws in effect that
limit creditors’ rights generally; (ii) equitable limitations on the availability of specific
remedies; and (iii) principles of equity (regardless of whether such enforcement is considered in a
proceeding in law or in equity).

ARTICLE III

PARTICIPATION IN FUTURE ISSUANCES

     3.1 Participation Rights. THG shall have the right, but not the obligation, during
the Term to participate in any future offerings of Equity Securities for cash consideration, other
than

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offerings of Exempted Securities (as hereinafter defined), for the same purchase price and
payment terms as are offered to other offerees in any such future offerings and in accordance with
the terms and conditions of this Agreement (collectively, the “Future Offerings,” and THG’s right
to participate in each such Future Offering, the “THG Participation Right”).

     3.2 Future Offering Notice. The Company agrees that during the Term, the Company will
not complete a Future Offering unless it shall have first delivered to THG written notice (the
“Future Offering Notice”) of its intent to complete a Future Offering no less than ten (10)
business days prior to the date of such anticipated Future Closing. The Future Offering Notice
shall provide the following information, to the extent such information is known at the time of
delivery of the Future Offering Notice: (i) the number of such new securities to be offered, (ii)
the anticipated price and terms, if any, upon which the Company proposes to offer such securities
(which shall be the same price and payment terms as the Company proposes to offer to other offerees
in such Future Offering), and (iii) the number of Equity Securities that the THG Participation
Right entitles THG to purchase with respect to such Future Offering.

     3.3 Exercise. THG may exercise its THG Participation Right, contingent upon the
occurrence of the Future Closing, by delivering written notice to the Company within five (5)
business days after THG’s receipt of a Future Offering Notice. THG may elect to purchase, at the
per share price and on the terms specified in the Future Offering Notice or that is paid by the
other purchasers of the Future Offering, up to that number of Equity Securities (with respect to
each Future Offering, the “Shares”) that bears a proportion to the total number of Equity
Securities included in the Future Offering equal to the proportion that,

          (a) the number of shares of Common Stock held by THG immediately prior to the date of delivery
of the applicable Future Offering Notice (assuming full conversion and/or exercise, as applicable,
of all Equity Securities convertible into and/or exercisable for Common Stock), plus the
number of votes entitled to be cast in the election of directors with respect to all other classes
of capital stock held by THG immediately prior to the date of delivery of the applicable Future
Offering Notice (assuming full conversion exercise, as applicable, of all Equity Securities
convertible into and/or exercisable for such class of capital stock) (in all cases counted without
duplication) bears to

          (b) the total number of shares of Common Stock then issued and outstanding immediately prior
to the date of delivery of the applicable Future Offering Notice (assuming full conversion and/or
exercise, as applicable, of all Equity Securities convertible into and/or exercisable for Common
Stock), plus the number of votes entitled to be cast in the election of directors with
respect to all other classes of capital stock then issued and outstanding (assuming full conversion
or exercise, as applicable, of all Equity Securities convertible into and/or exercisable for such
class of capital stock).

     3.4 Future Closings. The exercise of the THG Participation Right shall be contingent
upon, and contemporaneous with, the consummation of such Future Offering (the consummation of each
such Future Offering, a “Future Closing”) by the Company. For purposes of clarity, the Company
may, without penalty, discontinue any Future Offering prior to the Future Closing. In connection
with each Future Closing, THG (if it exercises the THG Participation Right in accordance with
Section 3.3) shall deliver to the Company duly and properly executed originals

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of any documents reasonably required by the Company and customary in similar offerings of
securities, and in form reasonably satisfactory to THG, to effectuate such Future Closing, together
with payment of the purchase price for the Shares being purchased by THG in such Future Closing,
and the Company shall promptly issue to THG the Shares purchased thereby.

     3.5 Exempted Securities. The THG Participation Right shall not apply to future
offerings of securities that are not conducted to raise or obtain equity capital or cash,
including, without limitation, any of the following types of securities issued or deemed to be
issued, including in each case shares underlying (directly or indirectly) any such Equity
Securities (collectively, the “Exempted Securities”):

          (a) Equity Securities issued by reason of a dividend, stock split, split-up, reorganization or
other distribution on shares of Common Stock or any other outstanding Equity Securities, provided
that, in each such case, all holders of Common Stock or such outstanding Equity Securities
(including, in each case, THG) receive equal treatment;

          (b) Equity Securities issued to employees or directors of, or consultants or advisors to, the
Company or any of its subsidiaries pursuant to a compensation or employee benefit plan, agreement
or arrangement approved by the Board of Directors of the Company;

          (c) Equity Securities actually issued upon the exercise of options or warrants and Equity
Securities actually issued upon the conversion or exchange of convertible Equity Securities, in
each case provided such issuance, exercise, exchange or conversion is pursuant to the terms of such
option, warrant or convertible Equity Security, and, in each case, provided further that such
options, warrants or convertible securities are either outstanding on the date of this Agreement or
are Exempted Securities issued after the date of this Agreement;

          (d) Equity Securities issued pursuant to the acquisition of another company or product line
by the Company by license, merger, purchase of all or substantially all of the assets of a person
or entity or other reorganization, provided, that such issuances are approved by the Board of
Directors of the Company; or

          (e) Equity Securities issued in connection with any strategic partnership or joint venture
(the primary purpose or material result of which is not to raise or obtain equity capital or cash).

ARTICLE IV

CONDITIONS TO THE COMPANY’S OBLIGATION

     The obligation of the Company hereunder to issue and sell the Shares to THG at a Future
Closing is subject to the satisfaction, at or before the closing date of each Future Closing (each,
a “Future Closing Date”), of each of the following conditions, provided that these conditions are
for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

     4.1 Delivery of Transaction Documents. THG shall have executed and delivered a
purchase agreement for the Shares in form satisfactory to the Company and THG and in

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substantially the same form as required to be executed and delivered by others in connection
with the purchase of Equity Securities in the applicable Future Offering.

     4.2 Payment of Purchase Price. THG shall have delivered the Purchase Price in
accordance with Section 3.4 above.

     4.3 Representations and Warranties. The applicable representations and warranties of
THG made in this Agreement shall be true and correct in all material respects as of the date when
made and as of the Future Closing Date as though made at that time, and THG shall have performed,
satisfied and complied in all material respects with the applicable covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by THG at or
prior to the Future Closing Date.

     4.4 Litigation. No litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court
or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the sale of the Shares or the
consummation of any of the transactions contemplated by this Agreement.

     4.5 Conflict with Charter. No amendment to the Company’s certificate of incorporation
shall have been adopted that prohibits the Company from granting or maintaining participating or
pre-emptive rights with respect to the Common Stock or other securities of the Company.

ARTICLE V

GOVERNING LAW; MISCELLANEOUS

     5.1 Term and Termination. This Agreement becomes effective as of the date of
completion of the IPO and continues in effect until the earlier of the date (i) that the Company is
no longer registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as
amended (the “Term”) and (ii) that the Agreement is deemed terminated in accordance with Section
5.8. In addition, the Term shall automatically expire if THG fails to pay for Shares at a Future
Closing after giving notice of the exercise of its THG Participation Right with respect to such
Shares.

     5.2 Governing Law. This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of Illinois applicable to agreements made and to be performed
entirely within such state, without regard to the principles of conflict of laws. The parties
hereto hereby submit to the exclusive jurisdiction of the United States Federal Courts located in
the Northern District of the State of Illinois with respect to any dispute arising under this
Agreement, the agreements entered into in connection herewith or the transactions contemplated
hereby or thereby. All parties irrevocably waive the defense of an inconvenient forum with respect
to such courts in the Northern District of the State of Illinois to the maintenance of such suit or
proceeding. All parties further agree that service of process upon a party mailed by first class
mail shall be deemed in every respect effective service of process upon the party in any such suit
or proceeding relating to this Agreement. Nothing herein shall

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affect any party’s right to serve process in any other manner permitted by law. All parties
agree that a final non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner. The
party which does not prevail in any dispute arising under this Agreement shall be responsible for
all reasonable fees and expenses, including reasonable attorneys’ fees, incurred by the prevailing
party in connection with such dispute.

     5.3 Counterparts; Electronic Signatures. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which shall constitute one
and the same agreement and shall become effective when counterparts have been signed by each party
and delivered to the other party. This Agreement, once executed by a party, may be delivered to
the other party hereto by electronic transmission of a copy of this Agreement bearing the signature
of the party so delivering this Agreement.

     5.4 Headings. The headings of this Agreement are for convenience of reference only
and shall not form part of, or affect the interpretation of, this Agreement.

     5.5 Severability. In the event that any provision of this Agreement is determined by
a court of competent jurisdiction to be invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform to such statute or rule of law. Any provision
hereof which may prove invalid or unenforceable under any law shall not affect the validity or
enforceability of any other provision hereof.

     5.6 Entire Agreement; Amendments. This Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the matters covered herein
and therein and supersede all previous understandings or agreements between the parties with
respect to such matters. No provision of this Agreement may be waived other than by an instrument
in writing signed by the party to be charged with enforcement. The provisions of this Agreement
may be amended only by a written instrument signed by the Company and THG.

     5.7 Notices. Any notices required or permitted to be given under the terms of this
Agreement shall be sent by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service) or by facsimile and
shall be effective five days after being placed in the mail, if mailed by regular United States
mail, or upon receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The addresses for such
communications shall be:

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If to the Company:

Heritage-Crystal Clean, Inc.

2175 Point Boulevard,

Suite 375

Elgin, IL 60123

Telephone: (847) 836-5670

Facsimile: (847) 836-5677

Attention: President

With copy to:

McDermott Will & Emery LLP

227 West Monroe Street

47th Floor

Telephone: (312) 372-2000

Facsimile: (312) 984-2090

Attention: Heidi J. Steele and Mark A. Harris

If to THG:

The Heritage Group

5400 West 86th Street

PO Box 68123

Indianapolis, IN 46268-0213

Telephone: (317) 228-8314

Facsimile: (317) 228-8325

Attention: John Vercruysse

With copy to:

Ice Miller LLP

One American Square, Suite 3100

Indianapolis, IN 46282-0200

Telephone: (317) 236-2289

Facsimile: (317) 592-4666

Attention: Stephen J. Hackman, Esq.

Each party shall provide notice to the other party of any change in address.

     5.8 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns. THG shall not assign this Agreement or
any of its rights or obligations hereunder, whether by operation of law, merger, sale of all or
substantially all of its general partnership interests or otherwise, without the prior written
consent of the other parties hereto. This Agreement shall terminate upon any purported assignments
by THG not in accordance with this Section 5.8.

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     5.9 Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto, and is not for the benefit of, nor may any provision hereof be enforced by, any
other person.

     5.10 Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

     5.11 No Strict Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

     5.12 Rights Cumulative. Each and all of the various rights, powers and remedies of
the parties shall be considered cumulative with and in addition to any other rights, powers and
remedies which such parties may have at law or in equity in the event of the breach of any of the
terms of this Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other right, power or
remedy available to such party.

     5.13 Survival. Any covenant or agreement in this Agreement required to be performed
following a Closing Date, shall survive the Closing Date.

 [Signature Page Follows]

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     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the
date first above written.

	 	 	 	 	 	 	 
	 	 	HERITAGE-CRYSTAL CLEAN, INC.	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THE HERITAGE GROUP	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:exv10w27

 

EXHIBIT 10.27

HERITAGE-CRYSTAL CLEAN, INC.

NON-QUALIFIED DEFERRED COMPENSATION PLAN

 

 

HERITAGE-CRYSTAL CLEAN, INC.

NON-QUALIFIED DEFERRED COMPENSATION PLAN

SECTION 1

Introduction

1.1. The Plan, Effective Date and Plan Year

     The Heritage-Crystal Clean, Inc. Nonqualified Deferred Compensation Plan (the “Plan”) is
effective as of the date on which Heritage-Crystal Clean, Inc. (the “Corporation”) first issues
shares of common stock of the Corporation that are required to be registered under Section 12 of
the Securities Exchange Act of 1934 as amended (the “Effective Date”). The “Plan Year” means the
calendar year; provided that the first Plan Year shall mean the period beginning on the Effective
Date and ending December 31, 2008.

1.2. Purpose

     Heritage-Crystal Clean, Inc. (the “Corporation”) has established the Plan for a select group
of management and highly compensated employees and non-employee directors of the Corporation (or
any Subsidiary or Affiliate that adopts the Plan in accordance with subsection 7.1) to retain and
attract highly qualified personnel by offering the benefits of a non-qualified, unfunded plan of
deferred compensation. The Plan is intended to be a top-hat plan described in Section 201(2) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Notwithstanding any
provision of the Plan to the contrary, the Plan is subject to the provisions of Section 409A of the
Internal Revenue Code (the “Code”) and at all times shall be interpreted and administered so that
it is consistent with such Code section.

1.3. Administration

     The Plan shall be administered by the Corporation or by one or more individuals appointed by
the Corporation to administer the Plan (the “Plan Administrator”). The Plan Administrator shall
have the powers set forth in the Plan and the power to interpret its provisions. Any decisions of
the Plan Administrator shall be final and binding on all persons with regard to the Plan.

1.4. Employers

     Any Subsidiary or Affiliate of the Corporation may adopt the Plan with the Corporation’s
consent as described in subsection 7.1. A “Subsidiary” of the Corporation is any corporation more
than 50% of the voting stock of which is owned, directly or indirectly, by the Corporation. An
“Affiliate” of the Corporation is any corporation more than 50% of the voting stock of which is
owned, directly or indirectly, by the owner or owners of more than 50% of the voting stock of the
Corporation. The Corporation and any Subsidiaries or Affiliates of the Corporation which adopt the
Plan are referred to below collectively as the “Employers” and sometimes individually as an
“Employer”.

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SECTION 2

Participation and Deferral Elections

2.1. Eligibility and Participation

     Subject to the conditions and limitations of the Plan, the Chief Accounting Officer of the Corporation, or such other officer of the
Corporation as the Corporation may appoint, shall designate which employees of the Employer and which directors of the Corporation who are not employees of the
Corporation or any Subsidiary of the Corporation (“Non-Employee Directors”) shall be eligible to
participate in this Plan. Eligibility to participate in the Plan in one Plan Year does not
guarantee the right to participate in the Plan in any subsequent Plan Year. The Plan Administrator
shall notify the employees of an Employer if they are eligible to participate in the Plan in each
Plan Year.

     An individual participating in the Plan in a given Plan Year (a “Participant”) may, as
authorized by the Plan Administrator, make Deferral Elections as provided in subsection 2.2 below,
and shall be eligible for the Employer Credits described in Section 3.

     If the Plan Administrator informs a Participant that he is unable to participate in the Plan
for a given Plan Year, the Participant shall retain Participant status until the entire balance of
the Participant’s Deferral Account (as defined in subsection 4.1 below) has been distributed.

2.2. Rules for Deferral Elections

     Any eligible Participant (as provided in subsection 2.1 above) may make an irrevocable
election (“Deferral Election”) to defer receipt of compensation he otherwise would be entitled to
receive for a Plan Year in accordance with the rules set forth below:

	 	(a)	 	A Participant shall be eligible to make a Deferral
Election only if on the date such election is made the Participant
satisfies such requirements as are specified by the Plan Administrator.
	 
	 	(b)	 	All deferral and other elections must be made in such
form as the Plan Administrator may prescribe and must be received by
the Plan Administrator no later than the date specified by the Plan
Administrator. The date specified by the Plan Administrator to receive
a Participant’s Deferral Election shall not be later than the November
30 prior to the January 1 of the Plan Year in which the Participant
performs the services producing the compensation to be deferred;
provided, however, that in the case of a Participant’s initial year of
participation, the date specified shall not be later than 30 days after
the date the Participant first becomes eligible to participate in the
Plan. Notwithstanding the foregoing, with respect the deferral of a
Participant’s bonus, the date specified by the Plan Administrator
generally may be no later than six months

3

 

	 	 	 	before the end of the bonus measurement period if the Plan
Administrator determines that such bonus qualifies as
“performance-based compensation” (as defined in Code Section
409A(4)(B)(iii) and the regulations thereunder).

	 	(c)	 	At the time of an eligible Participant’s annual
Deferral Election, the Participant must specify the date on which
amounts deferred under that Deferral Election, any associated Employer
Credits under Section 3, as well as any Fund Adjustments under
subsection 4.2 associated with such deferral amounts and Employer
Credits shall be paid or commence (i.e., the Distribution Date as
defined below) and the form in which payment will be made (as provided
in subsection 5.1).
	 
	 	(d)	 	Except as provided in subsection (e) below, a Deferral
Election shall be irrevocable; provided, however, if an eligible
Participant receives a distribution due to an unforeseeable emergency
(as described in Section 5.1(e) of herein) or on account of financial hardship under the
Heritage Group Retirement Savings Plan, or any successor plan thereto,
then such Deferral Election shall be cancelled for the remainder of the
Plan Year. Provided further, that if an eligible Participant becomes
disabled (as defined in Code Section 409A), such Participant may cancel
his or her deferral election for the plan year in which the Participant
becomes disabled no later than the latest of (i) the end of the
Participant’s taxable year in which such disability occurs, or (ii) the
15th day of the third month following the date the Participant becomes
disabled.
	 
	 	(e)	 	A Participant may make an irrevocable election to
extend a Distribution Date (a “Re-Deferral Election”); provided, that
no Re-Deferral Election shall be effective unless (i) the Plan
Administrator receives the election more than 12-months prior to the
Distribution Date to be changed, and (ii) the new Distribution Date is
not earlier than the fifth anniversary of the Designated Distribution
Date. All Re-Deferral Elections must be made in writing on such forms
and pursuant to such rules as the Plan Administrator may prescribe.
The Plan Administrator, in its complete discretion, may modify the
general rules set forth above as permitted by IRS Notice 2005-1,
applicable regulations and other guidance issued under Code Section
409A.
	 
	 	(f)	 	A change in a Participant’s Deferral Election under the
Plan will not be treated as an accelerated payment nor an impermissible
Deferral Election to the extent the change results solely from a change
in the Participant’s election under a Code Section 125 plan maintained
by the Corporation or an Employer.

4

 

2.3. Amounts Deferred

     For each Plan Year, each Non-Employee Director eligible to participate in the Plan shall be
entitled to make an irrevocable election (pursuant to rules established from time to time by the
Plan Administrator) to defer receipt of all or any portion, but not less than 25 percent, of all
annual cash retainer fees payable by the Corporation to a Non-Employee Director for services as a
director of the Corporation, as such amount may be changed from time to time, and/or the annual
meeting fees payable by the Corporation to a Non-Employee Director for services as a member or
chair of a committee of the Board of Directors of the Corporation, as such amounts may be changed
from time to time.

     For each Plan Year, each employee eligible to participate in the Plan shall be entitled to
make an irrevocable election (pursuant to rules established from time to time by the Plan
Administrator) to defer receipt of: (i) any whole percentage (up to 75%) of base salary paid to the
employee for his services as an employee from the Employer for the following calendar year; and
(ii) any portion (expressed as a dollar amount or a whole percentage up to 100%) of any bonus to be
earned for services performed in the following calendar year.

SECTION 3

Employer Credits

3.1. Discretionary Contributions

     Each Plan Year, each Employer may credit to the Deferral Account of any Participant a
contribution determined by the Employer in its discretion. The Employer shall specify the
distribution time and form for such amount when it credits the Deferral Account; provided that if
no time and form is specified, the default shall be a lump sum at Separation from Service (as
defined below).

SECTION 4

Deferral Accounts

4.1. Deferral Accounts

     All amounts deferred pursuant to one or more Deferral Elections under the Plan (“Deferral
Credits”) and any Employer Credits under Section 3 shall be allocated to a bookkeeping account in
the name of the Participant (“Deferral Account”). A Participant’s Deferral Credits and Employer
Credits shall be credited to his Deferral Account as of the Valuation Date (as defined below)
coinciding with or next following the date on which, in the absence of a Deferral Election, the
Participant would otherwise have received the deferred amounts. In the case of any Participant who
has more than one Distribution Date under the Plan, a separate Deferral Account shall be kept with
respect to each such Distribution Date.

5

 

4.2. Deferral Account Adjustments and Investment Funds

     As of the last business day of each calendar month or such other dates as the Plan
Administrator, in its discretion, may designate (a “Valuation Date”), each Participant’s Deferral
Account will be credited with income and gains and charged with losses, expenses and distributions
equal to the amount by which the Deferral Account would have been credited or charged since the
prior Valuation Date (in the manner described below) had the Participant’s Deferral Account been
invested in the Investment Fund (as defined below) selected by the Participant. The Participant
election described in the immediately preceding sentence shall be made at such times and in
accordance with such rules as shall be established by the Plan Administrator. For purposes of
adjusting accounts, distributions made since the immediately preceding Valuation Date shall be
deemed to have been made on such Valuation Date. The “Investment Fund” shall consist of either, or
both, of the following:

     (a) Stock Equivalent Account.

     Under the Stock Equivalent Account, the value of the Participant’s Deferral shall be
determined as if the Deferral Credits and Employer Credits were invested in common stock
equivalents as of the Valuation Date coinciding with or next following the date on which, in
the absence of a Deferral Election, the Participant would otherwise have recovered the
deferred amounts.

     The number of common stock equivalents to be credited to the Participant’s Deferral
Account on each Valuation Date shall be determined by dividing the Deferral Credits to be
“invested” on that date by the market value of the Corporation common stock, as determined
by the Plan Administrator.

     An amount equal to the number of common stock equivalents as of the record date
multiplied by the dividend paid on Corporate common stock on each dividend payment date
shall be credited to the Participant’s Deferral Account as of the Valuation Date coincident
with or next following the dividend payment date and “invested” in additional common stock
equivalents as though such dividend credits were a Deferral Credit.

     In the event of any stock dividend, stock split, combination or exchange of securities,
merger, consolidation, recapitalization, spin-off or other distribution (other than normal
cash dividends) of any or all of the assets of the Corporation to stockholders, or any other
similar change or event, such proportionate adjustments, if any, as the Plan Administrator
in its discretion may deem appropriate to reflect such change or event shall be made with
respect to the number of common stock equivalents credited to a Participant’s Deferral
Account.

     The number of shares of applicable Corporation common stock to be paid to a Participant
as of a Distribution Date or event shall be equal to the number of common stock equivalents
accumulated in the Stock Equivalent Account as of the applicable Valuation Date divided by
the total of the payments to be made. All payments from the

6

 

Stock Equivalent Account shall be made in whole shares of Company common stock with
fractional shares credited to federal income taxes withheld.

     (b) Other Investment Fund(s).

     The other Investment Fund(s) shall consist of such mutual funds designated by the Plan
Administrator in its sole discretion. Investment Funds shall be credited with income and
gains and charged with losses to the Participant’s Deferral Account on a monthly basis. The
rate of interest to be credited will be set based on a current external rate determined by
the Plan Administrator from time to time. If installment payments are elected, the amount
to be paid to the Participant as of a Distribution Date shall be determined by dividing the
Participant’s Deferral Account balance as of the applicable Valuation Date by the number of
remaining installment payments. All payments from the other Investment Funds shall be made
in cash.

4.3. Investment Election and Changes.

     A Participant’s investment elections shall be subject to the following rules.

	 	(a)	 	If the Participant fails to make an investment election
with respect to a deferral, the deferral shall be deemed to be invested
as determined by the Plan Administrator.
	 
	 	(b)	 	All investments to the Stock Equivalent Fund Account shall be
irrevocable.
	 
	 	(c)	 	A Participant may elect to transfer amounts from an
Other Investment Fund to the Stock Equivalent Fund as of any business
day; any such transfer shall be made in accordance with the procedures
established by the Plan Administrator.

4.4 Vesting

     A Participant shall be fully vested at all times in the balance of his Deferral Account
attributable to his own Deferral Credits. Any Employer Credits shall vest in accordance with the
vesting schedule established by the Employer at the time of the credit.

SECTION 5

Payment of Benefits

5.1. Time and Method of Payment

	 	(a)	 	The “Distribution Date” specified by the Participant
shall be either (i) a specified date not earlier than January 1
immediately following the fifth anniversary of the date on which the
Participant makes his initial election (the “Designated Distribution
Date”), (ii) the Participant’s Separation from Service (as defined
below) or a

7

 

	 	 	 	specified date coinciding with or next following the Participant’s
Separation from Service (e.g., January 1 coinciding with or next
following the Participant’s Separation from Service), or (iii) the
earlier of (i) or (ii) above. If any Participant dies or becomes
disabled (as defined in Code Section 409A), such Participant’s
Distribution Date shall be the Participant’s date of death or
disability, as applicable. For purposes of the Plan, a “Separation
from Service” occurs when a person leaves the employ of the
Corporation (and all Subsidiaries and Affiliates of the
Corporation), or in the case of a Non-Employee Director when the
Non-Employee Director separates from service, by reason of a
resignation, discharge, retirement, or death that is consistent with
Code Section 409A(a)(2)(A)(i) and any IRS regulations issued
thereunder. Notwithstanding any other provisions of the Plan to the
contrary, distributions to a “Specified Employee” (as defined in
Code Section 409A(2)(B)(i) and the regulations thereunder) upon his
Separation from Service shall not be made before the date that is
six months after the Specified Employee’s Separation from Service.

	 	(b)	 	Payment of the vested portion of a Participant’s
Deferral Accounts shall be made in the form of a single lump sum or a
series of annual installments over a period not exceeding ten years, as
specified in the Participant’s election applicable to each such
Deferral Account. In the event the Participant fails to specify a form
of payment, the form shall be a single lump sum.
	 
	 	(c)	 	Payment shall be made or commence within the 60-day
period following the Valuation Date coinciding with or next following
the Participant’s Distribution Date. If payment is to be made in the
form of a single lump sum, payment shall be in an amount equal to the
value of the Participant’s Deferral Account as of the Valuation Date
coinciding with or immediately preceding the date on which the balance
of the Deferral Account is paid to the Participant. If payment is to
be made in the form of installments, payments shall be made as of the
Valuation Date coinciding with or next following the Participant’s
Distribution Date and, during the balance of the installment payment
period, as of the Valuation Date coinciding with or next following each
anniversary of the Participant’s Distribution Date. Each installment
amount shall be equal to the Participant’s account balance determined
as of the applicable Valuation Date multiplied by a fraction the
numerator of which is one and the denominator of which is the total
number of years remaining in the installment payment period including
the current year. With respect to a Participant who has more than one
Distribution Date, this subsection 5.1 shall be applied separately with
respect to each such Distribution Date.

8

 

	 	(d)	 	A Participant may make a one-time election after the
original Deferral Election to change the method of payment elected by
the Participant; provided, that such election shall be treated as a
Re-Deferral Election. Installment payments shall be treated as a
single payment for purposes of making a Re-Deferral Election, and the
first scheduled installment will be the measuring standard for purposes
of determining whether a Re-Deferral Election complies with the
requirements of subsection 2.2(e) above.
	 
	 	(e)	 	Participants also may receive a distribution on account
of an unforeseeable emergency to the extent permitted by Code Section
409A(a)(2)(B)(ii).

5.2. Payment Upon Disability

     Notwithstanding any election by the Participant regarding the timing of payment of his
Deferral Account, in the event a Participant becomes disabled (as defined in Code Section
409A(a)(1)(C)) before his Distribution Date, payment of the Participant’s Deferral Account shall be
made in a single lump sum as soon as practical after the Valuation Date coinciding with or next
following the date on which the Plan Administrator determines that the Participant is disabled.

5.3. Payment Upon Death of a Participant

     Notwithstanding any election by the Participant regarding the timing of payment of his
Deferral Account, a Participant’s Deferral Account shall be paid to the Participant’s beneficiary
(designated in accordance with subsection 5.4) in a single lump sum as soon as practical following
the Valuation Date coinciding with or next following the Participant’s death.

5.4. Beneficiary

     If a Participant is married on the date of his death, then his beneficiary shall be the
Participant’s spouse, unless the Participant names a beneficiary or beneficiaries (other than the
Participant’s spouse) to receive the balance of the Participant’s Deferral Accounts in the event of
the Participant’s death prior to the payment of his entire Deferral Accounts. To be effective, any
beneficiary designation shall be filed in writing with the Plan Administrator. A Participant may
revoke an existing beneficiary designation by filing another written beneficiary designation with
the Plan Administrator. The latest beneficiary designation received by the Plan Administrator
shall be controlling. If no beneficiary is named by a Participant or if he survives all of his
named beneficiaries, the Deferral Accounts shall be paid in the following order of precedence:

	 	(a)	 	the Participant’s spouse;
	 
	 	(b)	 	the Participant’s children (including adopted children)
per stirpes; or
	 
	 	(c)	 	the Participant’s estate.

9

 

5.5. Withholding of Taxes

     The Employers shall withhold any applicable Federal, state or local income, employment or
other tax from payments due under the Plan. Any Social Security taxes, including the Medicare
portion of such taxes, on a Participant’s elective deferrals shall be withheld when the
compensation is deferred and on any Employer Credits under Section 3 when such amounts are vested
under subsection 4.4. Such taxes shall be withheld from such items of cash compensation (including
distributions from this Plan) as the Employers deem appropriate. The Employers shall also withhold
any taxes as necessary to comply with applicable laws.

5.6. Small Amounts

     Notwithstanding any other provision of the Plan to the contrary, if, on a Participant’s
Separation from Service, the aggregate vested portion of the Participant’s Deferral Accounts is not
greater than the “applicable dollar amount” as provided under Code Section 402(g)(1)(B) ($15,500
for 2008), the Plan Administrator may, in its discretion, pay the vested portion of the Participant’s Deferral
Accounts to the Participant in a single lump sum as soon as administratively practicable,
notwithstanding any distribution election requiring further installment payments. The lump sum
payment shall equal the value of the vested portion of the Participant’s Deferral Accounts as of
the Valuation Date coinciding with or immediately preceding the date on which the balance in the
Deferral Accounts is paid to the Participant.

SECTION 6

Miscellaneous

6.1. Funding

     Benefits payable under the Plan to any Participant shall be paid directly by such
Participant’s Employer(s). The Employers shall not be required to fund, or otherwise segregate
assets to be used for payment of benefits under the Plan. While the Employers may make investments
in the funds designated by the Plan Administrator as Investment Funds, the Employers shall not be
under any obligation to make such investments and any such investment shall remain an asset of the
relevant Employer subject to the claims of its general creditors. Notwithstanding the foregoing,
the Employers may maintain one or more grantor Trusts (“Trust”) to hold assets to be used for
payment of benefits under the Plan. Upon a Change in Control (as defined in the Heritage-Crystal
Clean, Inc. Omnibus Incentive Plan of 2008, or any successor plan thereto), the Employers shall
establish such Trusts. The assets of the Trust with respect to benefits payable to the employees
of such Employer(s) shall remain the assets of such Employer(s) subject to the claims of their
general creditors. Any payments by a Trust of benefits provided to a Participant under the Plan
shall be considered payment by the Employers and shall discharge the Employers of any further
liability under the Plan for such payments.

6.2. Employment Rights

     Establishment of the Plan shall not be construed to give any eligible Participants the right
to be retained in the service of the Employers or to any benefits not specifically provided by the
Plan.

10

 

6.3. Interests Not Transferable

     Except as to withholding of any tax under the laws of the United States or any state or
locality and the provisions of subsection 5.4, no benefit payable at any time under the Plan shall
be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, or other
legal process, or encumbrance of any kind. Any attempt to alienate, sell, transfer, assign, pledge
or otherwise encumber any such benefits, whether currently or thereafter payable, shall be void.
No person shall, in any manner, be liable for or subject to the debts or liabilities of any person
entitled to such benefits. If any person shall attempt to, or shall alienate, sell, transfer,
assign, pledge or otherwise encumber his benefits under the Plan, or if by any reason of his
bankruptcy or other event happening at any time, such benefits would devolve upon any other person
or would not be enjoyed by the person entitled thereto under the Plan, then the Plan Administrator,
in its discretion, may terminate the interest in any such benefits of the person titled thereto
under the Plan and hold or apply them for or to the benefit of such person entitled thereto under
the Plan or his spouse, children or other dependents, or any of them, in such manner as the Plan
Administrator may deem proper.

6.4. Forfeitures and Unclaimed Amounts

     Unclaimed amounts shall consist of the amounts of the Deferral Account of a Participant that
cannot be distributed because of the Plan Administrator’s inability, after a reasonable search, to
locate a Participant or his beneficiary, as applicable, within a period of two (2) years after the
Valuation Date upon which the payment of benefits become due. Unclaimed amounts shall be forfeited
at the end of such two-year period. These forfeitures will reduce the obligations of the Employers
under the Plan. After an unclaimed amount has been forfeited, the Participant or beneficiary, as
applicable, shall have no further right to his Deferral Account.

6.5. Controlling Law

     This agreement and any controversy arising out of or relating to this Agreement shall be
governed by and construed in accordance with the General Corporation Law of the State of Delaware
as to matters within the scope thereof. To the extend not preempted by ERISA, all other matters
shall be governed by and construed in accordance with the internal laws of Illinois without regard
to any state’s conflict of law principles. Any legal action related to this plan shall be brought
only in a federal or state court located in Illinois.

6.6. Gender and Number

     Words in the masculine gender shall include the feminine, and the plural shall include the
singular and the singular shall include the plural.

6.7. Action by the Employers

     Except as otherwise specifically provided herein, any action required of or permitted to be
taken by the Corporation or the Employers under the Plan shall be by resolution of its Board of
Directors or by resolution of a duly authorized committee of its Board of Directors, or by a person
or persons authorized by resolution of its Board of Directors or such committee.

11

 

6.8. Other Benefit Plans

     The Participant’s Deferral Credits shall be deemed compensation for the purpose of calculating
the amount of a Participant’s benefits or contributions under all retirement and welfare benefit
plans sponsored by the Corporation and the Subsidiaries, except to the extent not permitted under
such retirement or welfare benefit plan and except to the extent not permitted under the Code.

     No amount distributed to a Participant from a Participant’s Deferral Accounts under this Plan
shall be deemed to be compensation with respect to a Participant’s entitlement to benefits under
any retirement or welfare benefit plan established by the Corporation or the Subsidiaries for its
employees unless otherwise specifically provided in such Plan.

6.9. Facility of Payment

     Any amounts payable hereunder to any person under legal disability or who, in the judgment of
the Plan Administrator, is unable to properly manage his financial affairs may be paid to the legal
representative of such person or may be applied for the benefit of such person in any manner that
the Plan Administrator may select.

SECTION 7

Employer Participation

7.1. Adoption of Plan

     Any Subsidiary or Affiliate of the Corporation may, with the approval of the Corporation and
under such terms and conditions as the committee may prescribe, adopt the Plan by filing with the
Corporation a resolution of its Board of Directors to that effect. The Corporation may amend the
Plan as necessary or desirable to reflect the adoption of the Plan by an Employer, provided
however, that an adopting Employer shall not have the authority to amend or terminate the Plan
under Section 8.

7.2. Withdrawal from the Plan by Employer

     Any such Employer shall have the right, at any time, upon the approval of and under such
conditions as may be provided by the Corporation, to withdraw from the Plan by delivering to the
Corporation written notice of its election so to withdraw. Upon receipt of such notice by the
Corporation, the portion of the Deferral Account of Participants and beneficiaries attributable to
amounts deferred while the Participants were employees of such withdrawing Employer, plus any net
earnings, gains and losses on such amounts, shall be distributed from the Trust at the direction of
the Corporation in cash at such time or times as the Corporation, in its sole discretion, may deem
to be in the best interest of such employees and their beneficiaries. To the extent the amounts
held in the Trust for the benefit of such Participants and beneficiaries are not sufficient to
satisfy the Employers’ obligation to such Participants and their beneficiaries accrued on account
of their employment with those Employers, the remaining amount necessary to satisfy such obligation
shall be an obligation of the relevant Employers, and the other Employers

12

 

shall have no further obligation to such Participants and beneficiaries with respect to such
amounts.

SECTION 8

Amendment and Termination

     The Corporation intends the Plan to be permanent but, to the extent permitted by applicable
law (including, without limitation, Code Section 409A), reserves the right at any time in its
complete and unilateral discretion to modify, amend or terminate the Plan, provided however, that
except as provided below, any amendment or termination of the Plan shall not reduce or eliminate
(except by reason of investment experience) any Deferral Account accrued through the date of such
amendment or termination. Upon termination of the Plan, the Corporation may provide that
notwithstanding the Distribution Date specified by each Participant, all deferred account balances
will be distributed on a date selected by the Corporation. The Plan Administrator shall have the
authority to adopt amendments to the Plan in the following circumstances:

	 	(a)	 	to adopt amendments to the Plan which the Plan
Administrator determines are necessary or desirable for the Plan to
comply with or to obtain benefits or advantages under the provisions of
applicable law, regulations or rulings or requirements of the Internal
Revenue Service or other governmental or administrative agency or
changes in such law, regulations, rulings or requirements; and
	 
	 	(b)	 	to adopt any other procedural or ministerial amendment
that the Plan Administrator determines to be necessary or desirable
that does not materially change benefits to Participants or their
beneficiaries or materially increase the Corporation’s or Employer’s
obligations under the Plan.

The Plan Administrator shall provide notice of amendments adopted by the Plan Administrator to the
Corporation and the Board of Directors of the Corporation on a timely basis.

13

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