EXHIBIT 10(U)
EMPLOYMENT AGREEMENT
AGREEMENT by and between Safety-Kleen Corp., a Delaware corporation
(the "Company"), and Xxxxxx X. Xxxxx (the "Executive"), dated as of the 4th day
of October, 2001.
WHEREAS, the Company has determined that it is in the best interest of
the Company to employ the Executive as the Executive Vice President & Chief
Administrative Officer of the Company, and the Executive desires to serve the
Company in that capacity pursuant to the terms set forth herein; provided,
however, that this Agreement shall be subject to the proper approval of the
United States Bankruptcy Court (the "Bankruptcy Court") and such other
conditions and obligations of the parties as are set forth in Section 9(j)
hereof.
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, during the Employment Period (as defined below). The "Employment
Period" shall mean the period beginning on the Effective Date and ending on
February 8, 2003, unless such employment is earlier terminated for any reason as
provided herein.
2. Position and Duties. During the Employment Period, the
Executive shall serve as Executive Vice President & Chief Administrative Officer
of the Company and, as may be agreed to by Executive from time to time, in
appropriate positions in each subsidiary of the Company, with the duties,
functions, responsibilities and authority customarily associated with such
position (but shall not be required to exercise control over the waste handling
practices of
the Company except in his role as Executive Vice President & Chief
Administrative Officer), and shall report to the Chairman of the Board of
Directors of the Company (the "Board"), President & Chief Executive Officer of
the Company. During the Employment Period, the Executive shall be appointed,
elected and/or otherwise maintained by the Company as the Executive Vice
President & Chief Administrative Officer of the Company. The Executive shall
not, during the term of this Agreement, engage in any other business activities
that will unreasonably interfere with the Executive's employment pursuant to
this Agreement; provided however, the Company acknowledges and agrees that
Executive is and may continue to provide services to AFD Fund, the
post-confirmation estate of AmeriServe Food Distribution, Inc. and its
affiliated debtors. During the Employment Period, the Executive's services shall
be performed at those location where the Company conducts business throughout
the United States as the needs and exigencies of the business of the Company
from time to time reasonably require; provided however, Executive shall not be
required to relocate his personal residence.
3. Compensation. (a) Salary. From the date of employment through
the end of the Employment Period, the Executive shall receive a monthly salary
(the "Salary") of $50,000, payable in accordance with the Company's normal
payroll practices for executives.
(b) Other Benefits. In addition to the foregoing, during the
Employment Period: (i) the Executive shall be entitled to participate in the
current and any future savings, retirement, fringe benefit, and any other
benefit plans, practices, policies and programs of the Company on terms and
conditions commensurate with Executive's position and level of responsibility
with the Company, but in no event less than those applicable to peer executives;
provided, however, the Executive shall not be entitled to participate in any
general bonus or
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severance plans, practices, policies or programs of the Company (and provided
further that nothing herein will prevent the Board from approving discretionary
bonus plans for the Executive), and Executive shall not be entitled to
participate in any medical, life or disability insurance programs of the
Company; and (ii) the Executive shall be entitled to four weeks of vacation,
effective and vested as of the Effective Date, and two weeks of additional
vacation effective and vested as of the first anniversary of the Effective Date.
Further, the Company will promptly reimburse Executive for all travel and other
business expenses that Executive incurs in the course of the performance of his
duties under this Agreement, including any commuting expenses to/from and living
expenses in Columbia, SC. plus tax "gross up" thereon if any taxes based on
income are applicable, in a manner commensurate with Executive's position and
level of responsibility with the Company, but in no event less than those
applicable to peer executives.
(c) For purposes of this Section 3, the Executive's peer
executives shall be other senior executives employed by the Company.
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. The Company shall
have the right to terminate the Executive's employment because of the
Executive's Disability during the Employment Period. "Disability" means that (i)
the Executive has been unable, for a period of 90 consecutive days, or for
periods aggregating 90 business days in any period of twelve months, to perform
the Executive's duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by the Company or its insurers
and reasonably acceptable to Executive has determined that the Executive's
incapacity is total and permanent as defined in the
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Company's Long Term Disability Benefit Plan. 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. In addition to termination for Disability, the
Company may terminate the Executive's employment during the Employment Period
for Cause or without Cause. For purposes of this Agreement, "Cause" means that,
prior to any termination, the Executive shall have:
(i) been convicted of or pled no contest to a felony
crime involving fraud, embezzlement or theft or other felony crime
resulting in imprisonment (excluding, without limitation, in any case
any of the foregoing related to Limited Vicarious Liability, as defined
below);
(ii) committed an intentional, wrongful act against the
Company, and any such act shall have been materially harmful to the
Company; or
(iii) committed intentional wrongful disclosure of secret
processes or confidential information of the Company and any such act
shall have been materially harmful to the Company.
For purposes of this Agreement, no act or failure to act on the part of the
Executive shall be deemed "intentional" if it was due primarily to an error in
judgment or negligence, but shall be deemed "intentional" only if done or
omitted to be done by the Executive not in good faith and without reasonable
belief that his action or omission was in the interest of the Company. Nothing
herein will limit the right of the Executive or his beneficiaries to contest the
validity or propriety of any such termination with the Bankruptcy Court or
otherwise. For purposes of this Agreement, Limited Vicarious Liability, as used
above, shall mean any liability which is based
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on acts of the Company for which Executive is charged solely as a result of his
offices with the Company.
(c) Voluntarily by the Executive. The Executive may terminate his
employment at any time during the Employment Period by giving not less than 60
days prior written notice thereof to the Company; provided, however, that
Executive may terminate his employment immediately and without notice upon
either: (i) the occurrence of any of the events listed in Section 5(a)(i), (ii),
(iii), or (v) of this Agreement , or (ii) the occurrence of an event
constituting Good Reason (as defined below).
(d) Date of Termination. The "Date of Termination" means 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 for Cause or without
Cause as set forth in notice from the Company is effective, or the date on which
the termination of the Executive's employment by Executive as set forth in any
notice from Executive is effective, as the case may be.
(e) Involuntary Termination. (i) An "Involuntary Termination"
means: (A) a termination of the Executive's employment by the Company, other
than for Cause, death or Disability; and/or (B) a termination by the Executive
after the occurrence of an event constituting Good Reason (as that term is
defined below).
(ii) "Good Reason" means:
(A) Failure to elect or reelect or otherwise to maintain
the Executive in the office and the position with the Company (or any
successor entity by operation of law or otherwise) set forth in Section
2 of this Agreement, as the case may be;
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(B) (I) A material adverse change in the nature or scope
of the authorities, powers, functions, responsibilities or duties
attached to the Executive's position with the Company and any
affiliated company; (II) a reduction in the Executive's Salary; or
(III) the termination or denial of the Executive's rights to employee
benefits or a material reduction in the scope or value thereof, any of
which is not remedied by the Company within 10 business days after
receipt by the Company of written notice from the Executive of such
change, reduction or termination, as the case may be;
(C) The Company, without the prior written consent of the
Executive, requires the Executive to have his principal residence
changed;
(D) The Company shall fail to timely pay or satisfy any
of its material obligations or liabilities for which the Executive
could, based on the advice of counsel, reasonably be found to be
personally liable, provided such failure, if curable without liability
to Executive, is not remedied by the Company within 10 business days
after receipt by the Company of written notice from the Executive of
such failure;
(E) The Company shall fail to comply or be capable of
continuing to comply in all material respects with any applicable laws,
including any environmental laws and regulations, or the Executive
shall be required to exercise control over the waste handling practices
of the Company, for which the Executive could in either case, based on
the advice of counsel, reasonably be found to be personally liable,
provided such failure, if curable without liability to Executive, is
not remedied by the Company within 10 business days after receipt by
the Company of written notice from the Executive thereof;
(F) The Company shall fail to maintain satisfactory
liability insurance as required under Section 7(a) hereof, provided
such failure, if curable, is not remedied by the Company within 10
business days after receipt by the Company of written notice from the
Executive of such failure; or
(G) Without limiting the generality or effect of the
foregoing, any material breach of this Agreement by the Company or any
successor thereto which, if curable, is not remedied by the Company
within 10 business days after receipt by the Company of written notice
from the Executive of such breach.
Any item in (B), (D), (E), (F), or (G) above that is not curable or not
curable without liability to Executive, will immediately constitute
Good Reason.
5. Retention Fee; Obligations of the Company on Termination. (a)
Upon the first to occur of the following events during the Employment Period,
the Company shall pay to the Executive, and the Executive shall be entitled to
receive, a cash amount equal to $500,000
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(the "Retention Fee"): (i) the Company's plan of reorganization under Chapter 11
of the Bankruptcy Code is made effective, (ii) the Company's liquidation under
Chapter 11 of the Bankruptcy Code is substantially completed, (iii) there is a
conversion of the Company's proceedings under Chapter 11 of the Bankruptcy Code
to a proceeding under Chapter 7 of the Bankruptcy Code, (iv) there is an
Involuntary Termination of the Executive's employment, or (v) all or
substantially all of the Company's, including any debtor affiliate's, assets are
sold or disposed of in one or more transactions, or any other sale, merger,
consolidation, disposition or similar transaction involving the Company and any
debtor affiliate. In addition, if any of the events listed in Section 5(a)(i),
(ii), (iii), or (v) does not occur prior to the completion of the Employment
Period and the Executive's employment was not terminated for Cause, death or
Disability, upon the first to occur of the items in Section 5(a)(i), (ii),
(iii), or (v) at any time after the completion of the Employment Period, the
Company shall pay to the Executive, and the Executive shall be entitled to
receive, a cash amount equal to the Retention Fee.
(b) Death; Disability. If the Executive's employment is terminated
by reason of the Executive's death during the Employment Period, or by reason of
the Executive's Disability during the Employment Period in accordance with
Section 4(a) hereof, the Company shall pay to the Executive, the Executive's
estate or the Executive's legal representative, as applicable, 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.
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(c) Cause; Voluntary Termination. If the Executive's employment is
terminated for Cause or the Executive terminates his employment during the
Employment Period other than in an Involuntary Termination, 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) Involuntary Termination. If the Executive's employment is
terminated by an Involuntary Termination, the Company shall pay the Executive,
within 10 days after the Date of Termination, a lump-sum cash amount equal to
the sum of: (i) 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, (ii) the
cash equivalent of any accrued but unused vacation, (iii) the Salary that
Executive would have earned pursuant to this Agreement from the Date of
Termination until February 8, 2003, if such Involuntary Termination had not
occurred, and (iv) the Retention Fee.
(e) In addition to the payments and benefits to which the
Executive or the Executive's estate may be entitled under Sections 5(a) through
(d) above, 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 any
employee benefit plan of the Company in which he may participate, and any other
amounts due under this Agreement.
6. Confidential Information. The Executive shall keep
confidential all secret or confidential information, knowledge or data relating
to the Company or any of its affiliated companies and their respective
businesses that the Executive obtains or obtained during the
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Executive's employment by the Company or any of its affiliated companies and
their respective businesses and that is not public knowledge (other than as a
result of the Executive's violation of this Section 6) ("Confidential
Information"). The Executive shall not intentionally communicate, divulge or
disseminate Confidential Information at any time during or after the Executive's
employment with the Company, except with the prior written consent of the
Company, or if he believes it is in the best interests of the Company, or as
otherwise as required by law or legal process.
7. Indemnification. (a) The Executive shall be entitled to
indemnification to the fullest extent provided to other officers and directors
of the Company in accordance with the Certificate of Incorporation, Articles and
By-Laws of the Company, but in no event less than the maximum extent permitted
under Delaware law, and shall be covered by the Company's current directors and
officers' liability insurance (which shall at all times be maintained by the
Company throughout the Employment Period and for a 6 year "tail" coverage period
thereafter and provide coverage of not less than $125 million per occurrence and
name Executive as an insured thereunder) and other appropriate insurance
maintained by the Company. The Company shall, on the date of this Agreement,
duly execute the Company Indemnification Agreement attached hereto as Exhibit
"A" ("Company Indemnification Agreement").
(b) The Executive shall not be personally liable to the Company,
its affiliates, or any of their respective creditors or stockholders for
monetary damages, except only to the extent that such damages are finally
adjudged by a court of competent jurisdiction, after exhaustion of all appeals
therefrom, to have been caused by Executive's gross negligence or
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willful misconduct (and any actions, omissions or other matters taken with Court
approval will conclusively be deemed not to constitute negligence, gross
negligence or willful misconduct).
8. 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's obligations
pursuant to this Agreement will survive any termination or expiration of this
Agreement.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. Except as set forth in this Section 8(c), the
Company shall not assign this Agreement without the prior written consent of the
Executive, which consent shall not be unreasonably withheld. As used in this
Agreement, "Company" shall mean both the Company as defined above and any such
successor that assumes and agrees to perform this Agreement, by operation of law
or otherwise.
9. Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no
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force or effect. This Agreement may not be amended or modified except by a
written agreement executed by the parties hereto or their respective successors
and legal representatives. To the extent this Agreement shall be amended after
the Effective Date, approval of the Bankruptcy Court shall not be required to
the extent such amendment is not materially adverse to the Company.
(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:
Xxxxxx X. Xxxxx
[Address on file with the Company]
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X.X. Xxxxxxxxxx
If to the Company:
Safety-Kleen Corp.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: General Counsel
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxx
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Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 9. 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 extent 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 Company shall promptly reimburse the Executive for the
reasonable legal fees and expenses incurred by the Executive in connection with
enforcing any right of the Executive pursuant to and afforded by this Agreement;
provided, however, that the Company's obligations for such legal fees and
expenses shall only apply if, in connection with enforcing
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any right of the Executive pursuant to and afforded by this Agreement, (i) a
judgment has been rendered in favor of the Executive by a duly authorized court
of law, (ii) an arbitration award in favor of the Executive has been made or
(iii) the Company and the Executive have entered into a settlement agreement
providing for the payment to the Executive of any or all amounts or benefits
alleged by the Executive to be due hereunder.
(g) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement, whether written or oral, between them concerning
the subject matter hereof. Exhibit "A" attached hereto will control over the
terms herein to the extent, and only to the extent, of any conflict with the
terms herein.
(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.
(i) The Executive and the Company will consult with each other and
jointly approve any press release or other public statement regarding the
Executive's appointment and position with the Company. Any such press release or
other public statement shall indicate that the Executive's position with the
Company is subject to Bankruptcy Court approval and other conditions of this
Agreement.
(j) This Agreement shall become effective (the "Effective Date")
on the date of the approval by the Bankruptcy Court of the terms of this
Agreement, with such approval order containing those provisions set forth on
Exhibit "B" attached hereto, and containing such other provisions as the
Executive may reasonably request limiting his personal liability for the
obligations of the Company. Upon final execution of this Agreement by the
parties hereto, the
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Company shall promptly take all commercially reasonable efforts to obtain
approval of the terms of this Agreement and the actions contemplated herein,
including the solicitation of the Company's critical customers, lenders and
trade creditors in supporting the approval of this Agreement by the Bankruptcy
Court. Until such time as the foregoing condition has been satisfied, the
Executive's employment status and position with the Company shall be that of a
common-law employee, and under no circumstances shall the Executive have the
status of an officer of the Company.
(k) In the event that the condition in Section 9(j) shall not have
been satisfied by October 18, 2001, this Agreement shall be void and of no
force; provided, however, (i) the Executive shall be reimbursed by the Company
for any reasonable expenses incurred prior to such date in connection with the
matters contemplated by this Agreement, (ii) the Executive shall be paid a per
diem amount of $3,000 per day in respect of Executive's services until the
earlier of the date that Bankruptcy Court approval is denied or October 18,
2001, and (iii) the terms of the Company Indemnification Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
-------------------------------------------
Xxxxxx X. Xxxxx, Executive
SAFETY-KLEEN CORP.;
subject to the approval of the Bankruptcy
Court as further provided in Section 9(j),
except for purposes of Section 9(k)
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-------------------------------------------
Xxxxxx X. Xxxxxxxxxxx, as Chairman,
President and Chief Executive Officer
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EXHIBIT "A"
COMPANY INDEMNIFICATION AGREEMENT
THIS COMPANY INDEMNIFICATION AGREEMENT (this "Agreement") is being
executed and delivered to XXXXXX X. XXXXX ("Indemnitee") by SAFETY-KLEEN CORP.,
a Delaware corporation ("Safety-Kleen") as of October 4, 2001.
Safety-Kleen has requested Indemnitee to serve as an employee and
Executive Vice President & Chief Administrative Officer of Safety-Kleen and, as
may be agreed to by Executive from time to time, in appropriate positions with
each of Safety-Kleen's subsidiaries (such subsidiaries and affiliates together
with Safety-Kleen being collectively referred to herein as the "Company"),
pursuant to that certain Employment Agreement between Safety-Kleen and
Indemnitee, dated as of October 4, 2001 (the "Employment Agreement"), and in
consideration of, and as a material inducement for, such service, the Company is
hereby agreeing to bind itself to indemnify Indemnitee personally under the
conditions set forth below.
1. OBLIGATION TO INDEMNIFY. Company hereby agrees to indemnify
Indemnitee for, and release, defend and hold Indemnitee harmless from and
against any and all claims, losses, costs, liabilities and other damages of
whatever nature, kind or character, including but not limited to, liabilities
that would not have been incurred had Indemnitee not entered into the Employment
Agreement, or served as an employee, officer and/or director of the Company,
judgements, demands, assessments, interest, liabilities under the Employee
Retirement Income Security Act of 1974, as amended (including excise taxes or
penalties, plan termination, withdrawal and funding liabilities), the value of
time of Indemnitee at the rate of $3,000 a day (or portion thereof),
environmental liabilities, any obligations of the Company for which Indemnitee
is, or is asserted to be, personally liable therefor, liabilities for the
Company's employment taxes and any and all other taxes, penalties, excise and
similar taxes, impositions, fines, settlements, and reasonable expenses,
including, without limitation, attorney fees and Proceedings (as defined below)
in any way related to or arising out of (a) Indemnitee being (and/or having
been) an employee, officer and/or director of the Company or a trustee or a
fiduciary to any benefit plan, including without limitation, any act, omission
or other matter in any way connected therewith, and/or (b) Indemnitee serving
(and/or having served) the Company in any other capacity contemplated by the
Employment Agreement, including, without limitation, any act, omission or other
matter in any way connected therewith (collectively, the "Damages"). Company
acknowledges and agrees that the foregoing terms of this section and the terms
of the other sections of this Agreement are intended to apply REGARDLESS OF THE
TIMING, GROUNDS OR NATURE OF ANY PROCEEDINGS OR DAMAGES, INCLUDING, WITHOUT
LIMITATION, DAMAGES BASED ON INDEMNITEE'S NEGLIGENCE, CONTRACT, STATUTE,
INTENTIONAL TORT, STRICT LIABILITY OR OTHERWISE, AND WHETHER OR NOT INDEMNITEE
WAS ADVISED OR AWARE OF THE POSSIBILITY OF SUCH DAMAGES, except only to the
extent that the Damages are finally adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to have been caused by
the gross negligence or willful misconduct of Indemnitee (and any actions taken
with the approval of the Bankruptcy Court will conclusively be deemed not to
constitute gross negligence or willful misconduct). The obligations of Company
hereunder shall be applicable to all Proceedings (as defined below) and Damages
as set forth in this Agreement regardless of when Proceedings or Damages
occurred or accrued or such Proceedings are commenced or threatened, or whether
actions or omissions or other events on which they are based, allegedly took
place or failed to occur, before or after the effective date of this Agreement
or the commencement or termination of Indemnitee's service as an employee,
officer, director or in any other capacity for the Company as contemplated in
the Employment Agreement.
2. WITNESS AND OTHER EXPENSES. Company shall be obligated to pay
or promptly reimburse Indemnitee for reasonable expenses, including, but not
limited to, attorneys' fees and other professional expenses, incurred by him, in
connection with his appearance as a witness or other participation, in any
threatened, pending or completed action, suit, or proceeding, whether civil,
criminal, administrative, arbitrative, or investigative, formal or informal, and
whether or not based on local, state, federal or foreign laws, rules or
regulations, any appeal of such a threatened, pending or completed action, suit
or proceeding, or any inquiry or investigation which could lead to such a
threatened, pending or completed petition, suit, or proceeding (any of the
foregoing being referred to herein as a "Proceeding") because he is or was an
employee, officer and/or director of the Company or because he serves or has
served the Company in any other capacity contemplated by the Employment
Agreement, including, without limitation, any act, omission or other matter in
any way connected therewith.
3. ADVANCEMENT OF EXPENSES. Reasonable expenses, including, but
not limited to, attorney's fees, incurred by Indemnitee in connection with a
Proceeding in which he is, or is threatened to be, named as a defendant or
respondent shall be paid by Indemnitor, or promptly reimbursed, in advance of a
final disposition of the Proceeding, if Indemnitee affirms in writing to
Indemnitor that, in good faith, Indemnitee believes he is entitled to
indemnification under this Agreement and undertakes in writing to repay such
amounts if it is ultimately determined that Indemnitee is not so entitled.
4. ATTORNEY'S FEES. It is the intent of the Company that
Indemnitee not be required to incur legal fees and the related expenses
associated with the interpretation, enforcement or defense of Indemnitee's
rights under this Agreement by litigation or otherwise because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to Indemnitee hereunder. Consequently, if it should appear in good
faith to Indemnitee that the Company has failed to comply with any of its
obligations under this Agreement or in the event that the Company or any other
person takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from Indemnitee the benefits provided or
intended to be provided to Indemnitee hereunder, Company irrevocably authorizes
Indemnitee from time to time to retain counsel of Indemnitee's choice, at the
expense of Company, to advise and represent Indemnitee in connection with any
such interpretation, enforcement or defense, including, without limitation, the
initiation or defense of any litigation or other legal action, whether by or
against the Company or any Director, officer, stockholder, beneficiary or other
person affiliated with the
Company, or any other person in any jurisdiction. Without respect to whether
Indemnitee prevails, in whole or in part, in connection with any of the
foregoing, Company will pay and be solely financially responsible for any and
all reasonable attorneys' and related fees and expenses incurred by Indemnitee
in connection with any of the foregoing; provided that a court of competent
jurisdiction has not finally adjudged, after exhaustion of all appeals
therefrom, that in regards to such matters Indemnitee has been grossly negligent
or guilty of intentional misconduct, and such gross negligence or intentional
misconduct caused such matters.
5. CUMULATIVE RIGHT. Nothing herein shall be deemed to diminish
or otherwise restrict the right of Indemnitee to indemnification under any
provision of the Certificate of Incorporation or By-laws of the Company or under
Delaware law, or from any other person, entity or otherwise. To the extent that
Indemnitee is, or may be, entitled to indemnification from the Company and any
other persons or entities for the same matters as are covered by this Agreement,
Indemnitee shall be under no obligation to seek indemnification from such other
persons or entities for any obligations of Company hereunder.
6. COVENANT NOT TO XXX. Company hereby covenants and agrees that
it shall not institute, reinstitute, maintain, or prosecute any action, claim,
suit, proceeding, or cause of action of any kind whatsoever, in any court,
administrative agency, or other forum, against Indemnitee that arises out of, or
relates in any way to, the matters for which Indemnitee is entitled to
indemnification as contemplated by this Agreement, including but not limited to
any action, claim, suit, proceeding, or cause of action for contribution or
indemnity.
7. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with Delaware law.
8. OTHER PARTIES. This Agreement shall be binding upon Indemnitee
and the Company and shall inure to the benefit of and be binding on their
successors and assigns, heirs, personal representatives and their estates. The
Company shall not assign this Agreement without the prior written consent of
Indemnitee, which consent shall not be unreasonably withheld.
9. CONSIDERATION. This Agreement is being delivered to Indemnitee
in consideration of Indemnitee's services as an employee, officer and/or
director of the Company. Indemnitee need not execute this Agreement for it to
constitute a binding obligation of the Company, nor shall the death, resignation
or removal from office or employment of Indemnitee after the termination of such
service, or the termination, expiration or failure of the Employment Agreement
to become effective, limit or terminate the obligations of the Company
hereunder. The obligations of the Company hereunder shall be applicable to all
Proceedings in which Indemnitee is named, or threatened to be named, as a
defendant or respondent or with respect to which Indemnitee is a witness or
other participant, regardless of when such actions are commenced or threatened,
or whether actions or omissions or other events on which they are based,
allegedly took place or failed to occur, before or after the effective date of
this Agreement or the commencement or termination of Indemnitee's service as an
employee, officer, director or in any other official capacity for the Company.
10. SEVERABILITY. If any provision of this Agreement shall be held
to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof, and such provision shall be deemed to be amended or modified
to the least extent necessary to render it valid and enforceable.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties hereto with respect to the subject matter herein. No
representations, inducements, promises, or agreements, oral or otherwise with
respect to the subject matter herein, which are not embodied in this Agreement
shall be of any force or effect. No amendment, modification, termination, or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
IN WITNESS WHEREOF, pursuant to the authorization of its Board
of Directors, Safety-Kleen Corp., on behalf of itself, its subsidiaries and
affiliates, has caused this Agreement to be duly executed, all as of the day and
year first above written.
SAFETY-KLEEN CORP.
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Xxxxxx X. Xxxxxxxxxxx, as Chairman,
President and Chief Executive Officer
EXHIBIT "B"
ORDER PROVISIONS
1. The Motion (which must be mutually agreeable) is granted.
2. The Debtors are authorized and directed to enter into and
perform under the Employment Agreement and the Indemnification Agreement.
3. The Court hereby approves the Employment Agreement and the
Indemnification Agreement.
4. Executive will have no liability in his capacity as Executive
Vice President & Chief Administrative Officer or in any other capacity
contemplated by the Employment Agreement to any of the Debtors, the Debtors'
respective affiliates, and/or any of their respective creditors, shareholders,
employees, officers and/or bankruptcy estates, and/or to any superseding trustee
appointed with respect to any such estates (whether under Chapter 11 or Chapter
7), and/or any other person or entity for any claim, loss, cost or other damage
of any nature, except only to the extent that such liability, claim, loss, cost
or other damage is finally adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to have been caused by Executive's gross
negligence or willful misconduct (and any actions, omission or other matter
taken with Court approval will conclusively be deemed not to constitute
negligence, gross negligence or willful misconduct).
5. The Court shall retain jurisdiction to hear and determine all
matters arising from the Order.
