EMPLOYMENT AGREEMENT
THIS AGREEMENT by and between Safety-Kleen Corp., a Delaware
corporation (the "Company"), and David E. Thomas, Jr. (the "Executive"), dated
as of the day of August, 2000.
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W I T N E S S E T H
WHEREAS, the Company wishes to provide for the employment by the
Company of the Executive, and the Executive wishes to serve the Company, in the
capacities and on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, it is hereby agreed as follows:
1. TERM. The term of this Agreement (the "Term") shall commence as of
March 6, 2000 (the "Commencement Date") and shall end upon the second
anniversary of the Commencement Date .
2. POSITION AND DUTIES. (a) During the Term, the Executive shall serve
as the Chairman (the "Chairman") of the Board of Directors of the Company (the
"Board") and as the Chief Executive Officer of the Company with such duties and
responsibilities as are customarily assigned to such positions, and such other
duties and responsibilities not inconsistent therewith as may from time to time
be assigned to him by the Board. During the Term, the Company shall cause the
Executive to be included in the slate of persons nominated to serve as directors
on the Board and shall use its best efforts to have the Executive elected and
reelected to the Board and continue to serve as Chairman. If the Executive is
not elected or reelected as a member of the Board it shall not constitute Good
Reason under Paragraph 4(c) hereunder.
(1) During the Term, and excluding any periods of vacation and sick
leave to which the Executive is entitled, and except as may be otherwise
authorized by the Board, the Executive shall devote substantially all of his
attention and time during business hours to the business and affairs of the
Company and shall carry out such responsibilities faithfully and efficiently.
The Executive may serve on corporate, industry, civic or charitable boards and
committees, so long as the Executive secures the prior written consent of the
Board to engage in such activities,
which consent will not be unreasonably withheld, and EXHIBIT A attached hereto
contains a list of such current activities which are all hereby approved.
(2) Other than for periods spent traveling in connection with the
performance of the Executive's duties hereunder, the Executive shall be based in
Columbia, South Carolina. During the Term, the Company shall provide the
Executive with an executive apartment in the Columbia area (which shall be
reasonably acceptable to Executive) and shall pay the customary temporary living
expenses (including all transportation costs) associated with the Executive's
stay in the Columbia area. The aggregate cost to the Company shall not exceed
$3,500 per month for living expenses plus $25,000 per year for taxation on
transportation. The Executive shall provide the Company with acceptable
documentation substantiating such living expenses and tax costs.
3. COMPENSATION. (a) BASE SALARY. During the Term, the Executive shall
receive an annual base salary ("Annual Base Salary") of $800,000. The Annual
Base Salary shall be payable in accordance with the Company's regular payroll
practice for its senior executives, as in effect from time to time. Payments
made in accordance with the Annual Base Salary shall be reduced by the aggregate
amount of compensation received by the Executive from Raymond James &
Associates, Inc. attributable to services performed during the period subsequent
to March 6, 2000. The Executive shall furnish the Company with copies of his
Internal Revenue Service W-2 from Raymond James & Associates, Inc. for the
relevant period and a written statement from Raymond James & Associates, Inc. as
to the compensation paid to the Executive during 2000.
(1) PLAN OF REORGANIZATION/SALE BONUS. If the Executive is employed by
the Company on the date a plan of reorganization for the Company is consummated
in connection with any Chapter 11 bankruptcy or similar proceeding or on the
date of the consummation of the sale of substantially all of the assets of the
Company (the "Sale") then, within fifteen (15) days of such consummation or
sale, the Company shall pay to the Executive a bonus of $1,500,000 (the "Plan of
Reorganization/Sale Bonus"), in recognition of the Executive's efforts in
facilitating such reorganization or sale.
(2) DISCRETIONARY BONUS. The Executive shall be eligible to receive
such bonuses as may be determined from time to time by the Compensation
Committee of the Board, which shall consist solely of independent directors,
pursuant to criteria to be established by such Compensation Committee, payable
from any bonus pool established under Company's employee incentive compensation
program.
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The Agent for the Pre-Petition Secured Lenders and counsel to the Official
Committee of Unsecured Creditors shall be apprised of any such bonus award prior
to its payment and shall be given a reasonable opportunity to comment thereon.
(3) OTHER BENEFITS. During the Term: (1) the Executive shall be
entitled to participate in all applicable fringe benefit and perquisite programs
and savings and retirement plans (other than any non-qualified supplemental
retirement or "top-hat" plans), practices, policies and programs of the Company
to the same extent that such benefits were provided to the Chief Executive
Officer of the Company immediately prior to March 6, 2000 or are otherwise
generally provided to other senior executives of the Company and (2) the
Executive and/or the Executive's eligible dependents, as the case may be, shall
be eligible for participation in, and shall receive all benefits under, all
applicable welfare benefit plans, practices, policies and programs provided by
the Company to the same extent, and subject to the same terms, conditions, as
other senior executives of the Company unless otherwise provided for in this
Agreement; PROVIDED, HOWEVER, the Company shall waive any and all waiting
periods and pre-existing condition exclusions under its plans and programs
contemplated by this Section 3(d) with respect to the participation offered and
coverage provided to the Executive and his eligible dependents, as the case may
be.
(4) INDEMNIFICATION. The Company agrees to indemnify and hold the
Executive harmless, to the fullest extent permitted under applicable law, for,
from and against any and all losses, claims, damages, liabilities or actions
(including security holder actions, in respect thereof) related to or arising
out of the Executive's employment with or service to the Company or any of its
affiliates, including Executive's role as a member of the Board, subsequent to
March 6, 2000, except for actions finally determined by a court of competent
jurisdiction to have been taken in bad faith or to have constituted gross
negligence or willful misconduct. At all times during the Term, the Company will
maintain director and officer liability insurance coverage and policies covering
the Executive which are no less favorable than those currently maintained by the
Company and applicable to the Executive. Following any termination of the
Executive's employment or service with the Company, the Company shall cause any
director and officer liability insurance policies applicable to the Executive
prior to such termination to remain in effect on a claims-made basis for a
period of three years following such termination or, if longer, any applicable
statute of limitations. Nothing in this Agreement is intended to infringe such
rights the Executive may have under the Company's bylaws, articles of
incorporation or otherwise.
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(5) LEGAL FEES. As soon as reasonably practicable after the date
hereof, the Company shall reimburse the Executive for all legal fees incurred by
him in connection with the negotiation, preparation and execution of this
Agreement; PROVIDED, HOWEVER, that such reimbursement shall not exceed $5,000
(including amounts paid to counsel for Grover Wrenn with respect to his
Agreement).
4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive's
employment shall terminate automatically upon the Executive's death during the
Term. The Company shall be entitled 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 six (6) consecutive 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 acceptable to the Executive or the Executive's legal
representative, has determined that the Executive is so disabled. 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
30th day after receipt of such notice by the Executive (the "Disability
Confirmation Date"), unless the Executive returns to full-time performance of
the Executive's duties before the Disability Confirmation Date.
(1) TERMINATION BY THE COMPANY. The Company may, by delivering a
written termination notice to the Executive, terminate the Executive's
employment at any time during the Term for Cause or without Cause. "Cause" means
(i) the willful and continued failure by the Executive substantially to perform
his duties with the Company (other than any such failure resulting from the
Executive's death or his incapacity due to physical or mental illness or injury)
after a written demand for substantial performance is delivered to the Executive
by the Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed his duties and the
Executive has failed to correct such failure to substantially perform such
duties within thirty (30) days after such written demand is delivered; or (ii)
the willful engaging by the Executive in conduct that is demonstrably and
materially injurious to the Company, monetarily or otherwise, and no act or
failure to act on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that such action or omission was in the best interests of the Company.
(2) TERMINATION BY EXECUTIVE. The Executive may, by delivering a
written termination notice to the Company, terminate his employment at
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any time during the Term with Good Reason or without Good Reason. "Good Reason"
means (i) the Company has failed to cure any material breach or default by it
under this Agreement within thirty (30) days after receiving written notice
thereof from the Executive or (ii) the Company is not able to comply in a
material respect with applicable environmental laws and regulations, after
receiving an opinion, upon the request of the Company, of Arnold & Porter, Esqs.
that such non-compliance is material and there exists a significant risk that he
could be exposed to personal liability in connection therewith.
(3) TERMINATION FOLLOWING PAYMENT OF THE PLAN OF REORGANIZATION/SALE
BONUS. The Company may, by delivering a written termination notice to the
Executive, terminate the Executive's employment during the sixty (60) day period
following the payment of the Plan of Reorganization/Sale Bonus. For purposes of
this Agreement, if the Sale is not pursuant to the Plan of Reorganization, the
Executive shall be deemed to have been terminated within the sixty (60) day
period following such Sale and shall have no entitlement to severance benefits
or compensation under this Agreement. Any such termination shall be treated as
though it were with Cause.
(4) DATE OF TERMINATION; RESIGNATION. The "Date of Termination" means
the date of the Executive's death, the Disability Confirmation Date, the date on
which the termination of the Executive's employment by the Company for Cause or
without Cause or following the payment of the Plan of Reorganization/Sale Bonus
or by the Executive with Good Reason or without Good Reason is effective, as the
case may be, or the expiration of the Term. Effective as of the Date of
Termination, the Executive shall resign from the Board and from all other
offices and positions with the Company and its affiliates.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) OTHER THAN FOR
CAUSE, DEATH OR DISABILITY OR UPON EXPIRATION OF THIS AGREEMENT. If, during the
Term, the Company terminates the Executive's employment for any reason other
than (i) Cause, (ii) death (iii) Disability, or (iv) during the sixty (60) day
period following payment of the Plan of Reorganization Bonus or (v) subsequent
to the payment of a Sale Bonus, or at the expiration of the Term, or if the
Executive terminates his employment for Good Reason, the Company shall pay to
the Executive, not later than thirty (30) days following the Date of
Termination, (A) an amount equal to the Executive's then current Annual Base
Salary (without giving effect to reductions thereto) and (B) any unpaid amounts
of the Executive's Annual Base Salary and other amounts earned through the Date
of Termination. In addition, if such termination is other than the
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expiration of the Term, during the second year following the Executive's
termination under this section 5(a), in a time and manner consistent with the
Company's payroll cycle the Executive shall also receive monthly payments equal
to 1/12 of the Executive's Annual Base Salary (which amount shall be reduced by
the amount of any salary earned by Executive during such month). The Company
shall also pay or provide to the Executive, on or following such a termination,
any earned and unpaid bonuses, previously deferred compensation and benefits
payable to the Executive under the terms of the Company's qualified pension
plans, according to the terms of such plans as in effect immediately prior to
the Date of Termination (the "Accrued Benefits"). For a period not to exceed
eighteen (18) months following the Date of Termination or the expiration of the
Term of this Agreement, and only until the Executive obtains full replacement
coverage, the Company shall reimburse the Executive for the cost of any premiums
paid by the Executive pursuant to his (or any of his eligible dependent's)
election to have the Company provide "continuation coverage" (within the meaning
of Section 4980B of the Internal Revenue Code of 1986, as amended (the "Code"))
under the Company's (or, if applicable, an affiliate's) group health plan.
(1) DEATH AND DISABILITY. If the Executive's employment is terminated
by reason of the Executive's death or Disability during the Term, the Company
shall pay to the Executive or, in the case of the Executive's death, to the
Executive's designated beneficiaries (or, if there is no such beneficiary, to
the Executive's estate or legal representative), in a lump sum in cash within
thirty (30) days after the Date of Termination, the sum of the following
amounts: (1) any portion of the Executive's Annual Base Salary and other amounts
earned through the Date of Termination that has not yet been paid plus (2)
either the amount of life insurance proceeds or the amount of long-term
disability insurance proceeds to which the Executive is entitled under current
Company policy. On or following the Date of Termination, the Company shall
provide the Executive with the Accrued Benefits. For a period not to exceed 18
months following the Date of Termination, the Company shall reimburse Executive
for the cost of any premiums paid by the Executive pursuant to his (or any of
his eligible dependent's) election to have the Company provide "continuation
coverage" (within the meaning of Section 4980B of the Code) under the Company's
(or, if applicable, an affiliate's) group health plan.
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(2) BY THE COMPANY FOR CAUSE; BY THE EXECUTIVE; FOLLOWING PAYMENT OF
THE PLAN OF REORGANIZATION/SALE BONUS. If during the Term the Executive's
employment is terminated by the Company for Cause or following payment of the
Plan of Reorganization/Sale Bonus pursuant to Section 4(d) hereof, or if the
Executive's employment is terminated by the Executive without Good Reason during
the Term, the Company shall pay to the Executive in a lump sum in cash
immediately prior to the Date of Termination, any portion of the Executive's
Annual Base Salary and other amounts earned through the Date of Termination that
has not been paid. On or following the Date of Termination, the Company shall
provide the Executive with the Accrued Benefits. For a period not to exceed 18
months following the Date of Termination, but only until Executive obtains full
replacement coverage, the Company shall reimburse the Executive for the cost of
any premiums paid by the Executive pursuant to his (or any of his eligible
dependent's) election to have the Company provide "continuation coverage"
(within the meaning of Section 4980B of the Code) under the Company's (or, if
applicable, an affiliate's) group health plan, PROVIDED, HOWEVER, that no such
reimbursement shall be made in the event of a termination for Cause.
6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its subsidiaries
or affiliated companies for which the Executive may be selected by the Board to
participate in, nor shall anything in this Agreement limit or otherwise affect
such rights as the Executive may enter into under any contract or agreement with
the Company or any of its subsidiaries or affiliated companies (which contracts,
if any, shall be subject to Board approval). Vested benefits and other amounts
that the Executive is otherwise entitled to receive under any such other plan,
policy, practice or program of, or any contract of agreement with, the Company
or any of its subsidiaries or affiliated companies on or after the Date of
Termination shall be payable in accordance with the terms of each such plan,
policy, practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.
7. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action that the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement as such amounts shall
not be reduced, regardless of whether the Executive obtains other employment,
except that the second
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year of severance payments contemplated in section 5 shall be reduced by the
amount of any salary earned by Executive during such month.
8. CONFIDENTIAL INFORMATION. The Executive shall keep confidential all
trade secret or confidential information, knowledge or data relating to the
Company or any of its subsidiaries or affiliated companies and their respective
businesses that the Executive obtains during the Executive's employment by the
Company or any of its subsidiaries or affiliated companies and that is not
public knowledge (other than as a result of the Executive's violation of this
Section 8) ("Confidential Information"). The Executive shall not 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 as otherwise required by law or legal process.
9. DISPUTE RESOLUTION; ATTORNEYS' FEES. All disputes arising under or
related to the employment of the Executive or the provisions of this agreement
shall be settled by the United States Bankruptcy Court for the District of
Delaware while the Company's Chapter 11 case is pending and otherwise by
arbitration under the rules of the American Arbitration Association then in
effect, such arbitration to be held in Columbia, South Carolina, as the sole and
exclusive remedy of either party and judgement on any arbitration award may be
entered in any court of competent jurisdiction. The Company agrees to reimburse
legal fees incurred by the Executive in any such dispute to the extent the
Executive prevails in the dispute.
10. 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.
(1) This Agreement shall inure to the benefit of and be binding upon
the Company.
11. MISCELLANEOUS. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of South Carolina, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
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(1) 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:
David E. Thomas, Jr.
1301 Gervais Street
19th Floor
Columbia, South Carolina 29201
With a copy to:
David S. Kurtz, Esq.
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
If to the Company:
Safety-Kleen Corp.
1301 Gervais Street
Columbia, South Carolina 29201
Attention: Henry H. Taylor
With a copy to:
David S. Kurtz, Esq.
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 11. Notices and communications
shall be effective when actually received by the addressee.
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(2) 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.
(3) 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.
(4) The Executive's or the Company's failure to insist upon strict
compliance with any provisions 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.
(5) The rights and benefits of the Executive under this Agreement may
not be anticipated, assigned, alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process except as required by law.
Any attempt by the Executive to anticipate, alienate, assign, sell, transfer,
pledge, encumber or charge the same shall be void. Payments hereunder shall not
be considered assets of the Executive in the event of insolvency or bankruptcy.
(6) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
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IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization of its Board, 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.
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David E. Thomas, Jr.
SAFETY-KLEEN CORP.
By:
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John W. Rollins, Jr.
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EXHIBIT A
Reynolds Smith & Hills, Inc.
Engineering Firm
Jacksonville, FL
A-1