Exhibit (10)(dd)
JA&A Letter Agreement
JA&A SERVICES, LLC
0000 Xxxx Xxxxxx,
Xxxxx 000
Xxxxxxxxxx, XX 00000
October 3, 2001
Xx. Xxxxxx X. Xxxxxxxxxxx
Chairman of the Board of Directors, CEO and President
Safety-Kleen Corp.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xxx:
This letter outlines the understanding between JA&A Services, LLC ("XXX") and
Safety-Kleen Corp. (the "Company") for the engagement of XXX, effective as of
June 11, 2000, to provide certain temporary employees to the Company to assist
it in its restructuring as described below. Generally, the engagement of XXX,
including any JAS employee s who serve in Executive Officer [fn 1] positions,
shall be under the approval of the Board of Directors of the Company and the
direct supervision of you or your delegates.
Upon signing this letter, the Company agrees that its engagement with Xxx Xxxx &
Associates under letter of March 16, 2000 shall be deemed superceded, effective
June 11, 2000, by this engagement and the retainer that is being held by Xxx
Xxxx & Associates ("JA&A") shall be transferred to XXX pursuant to the retainer
provisions of this agreement.
XXX will provide the individuals set forth on the following Exhibits, herein
referred to as temporary employees ("Temporary Employees"), subject to the terms
and conditions of this letter, with the titles, pay rates, and other
descriptions set forth:
o Exhibit A--Individuals with Executive Officer positions--full time
o Exhibit B--Additional Temporary Employees--full time
o Exhibit C--Additional Temporary Employees--part time
o Exhibit D--Additional Temporary Employees--(1) no longer working on
engagement, or (2) who billed less than 20 cumulative hours as of August 31,
2001.
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1 Executive Officers for the purposes of this letter agreement is as defined in
the Protocol for Engagements of Xxx Xxxx & Associates and Affiliates (the
"Protocol") as filed with the Delaware Bankruptcy Court. For purposes of the
Protocol, Executive Officers shall include but is not necessarily limited to
Chief Executive Officer, President, Chief Operating Officer, Treasurer, Chief
Financial Officer, Chief Restructuring Officer, Chief Information Officer, and
any other Officers having similar roles, power or authority, as well as any
other Officers provided for in the Company's bylaws.
Xx. Xxxxxx X. Xxxxxxxxxxx
October 3, 2001
Page 2
XXX shall be compensated for its services under this agreement at the rates set
forth on the Exhibits. The Temporary Employees identified on Exhibits A and B
will devote substantially full-time to the provision of services to the Company
under this agreement, unless XXX and the Company agree to modify the terms of
this agreement.
We will keep you informed as to our staffing and will not add additional
Temporary Employees to the assignment without first consulting with you to
obtain your concurrence that additional required resources are not available
from another source.
The billing rates will be in effect until December 31, 2001, after which we
reserve the right to revise our rates as we review and revise our billing rates
each January 1.
In addition to the fees set forth above, the Company shall pay directly or
reimburse XXX upon receipt of periodic xxxxxxxx, for all reasonable
out-of-pocket expenses incurred in connection with this assignment such as
travel, lodging, postage, telephone and facsimile charges. Payment of invoices
for expenses will be due upon receipt of the invoices.
We acknowledge that we received a retainer of $150,000 pursuant to the March 16,
2000 engagement letter and that such retainer was subsequently increased, as of
June 9, 2000, to $295,547.33, which is net of prepetition fees and expenses
incurred. The retainer has been transferred to XXX from JA&A. Any unearned
portion of the retainer will be returned to you at the termination of the
engagement.
In addition to the monthly fees and expenses, XXX reserves the right to apply to
the Bankruptcy Court for a success fee based upon benefit conferred upon the
Company's estate by interim employees furnished by XXX.
The parties intend that an independent contractor relationship will be created
by this agreement. As an independent contractor, XXX will have complete and
exclusive charge of the management and operation of its business and Temporary
Employees, including hiring and paying the wages and other compensation of all
its Temporary Employees and agents, and paying all bills, expenses and other
charges incurred or payable with respect to the operation of its business and
Temporary Employees. Of course, as an independent contractor, neither the
Temporary Employees nor XXX will be entitled to receive from the Company any
vacation pay, sick leave, retirement, pension, or social security benefits,
workers' compensation, disability, unemployment insurance benefits, or any other
employee benefits. XXX will be responsible for all employment, withholding,
income and other taxes incurred in connection with the operation and conduct of
its business and Temporary Employees. Temporary Employees will not be considered
employees or agents of the Company for any purpose.
Xx. Xxxxxx X. Xxxxxxxxxxx
October 3, 2001
Page 3
XXX agrees to keep confidential all information obtained from the Company, and
neither XXX nor the Temporary Employees will disclose to any other person or
entity, or use for any purpose other than specified herein, any information
pertaining to the Company which is either non-public, confidential, or
proprietary in nature ("Information") which it obtains or is given access to
during the performance of the services provided hereunder. The foregoing is not
intended to nor shall be construed as prohibiting XXX or the Temporary Employees
from disclosure pursuant to a valid subpoena or court order, but neither XXX nor
such Temporary Employees shall encourage, suggest, invite or request, or assist
in securing, any such subpoena or court order, and the Temporary Employees shall
immediately give notice of any such subpoena or court order by fax transmission
to the Company. Furthermore, XXX and the Temporary Employees may make reasonable
disclosures of Information to third parties in connection with their performance
of their obligations and assignments hereunder except as otherwise directed. In
addition, XXX will have the right to disclose to others in the normal course of
business their involvement with the Company.
Information includes data, plans, reports, schedules, drawings, accounts,
records, calculations, specifications, flow sheets, computer programs, source or
object codes, results, models, or any work product relating to the business of
the Company, its subsidiaries, distributors, affiliates, vendors, customers,
employees, contractors and consultants.
The Company acknowledges that all information (written or oral) generated by the
Temporary Employees in connection with their engagement is intended solely for
the benefit and use of the Company (limited to its management, including its
Board of Directors) in considering the transactions to which it relates. The
Company agrees that no such information shall be used for any other purpose or
reproduced, disseminated, quoted or referred to with attribution to XXX at any
time in any manner or for any purpose other than accomplishing the tasks
referred to herein, without JAS's prior approval (which shall not be
unreasonably withheld) except as required by law. This agreement will survive
the termination of the engagement.
The Company acknowledges that it is hiring XXX purely to assist the Company and
its Board of Directors in the management and restructuring of the Company. This
engagement shall not constitute an audit, review or compilation, or any other
type of financial statement reporting or consulting engagement that is subject
to the rules of the AICPA, the SSCS, or other such state and national
professional bodies.
In the event that Temporary Employees become Statutory Officers of the Company,
the Company agrees that it will use reasonable efforts to specifically include
and cover XXX employees serving as Statutory Officers of the Company under the
Company's policy for directors' and officers' insurance. No Temporary Employees
were or currently are Statutory Officers of the Company. The obligations of the
parties as reflected herein shall survive the termination of the engagement.
Xx. Xxxxxx X. Xxxxxxxxxxx
October 3, 2001
Page 4
JAS's engagement to provide Temporary Employees hereunder may be terminated at
any time by written notice by one party to the other; provided, however, that
notwithstanding such termination XXX will be entitled to any fees and expenses
due under the provisions of the agreement. The obligations of the parties as
reflected herein shall survive the termination of the engagement.
This letter agreement is governed by and construed in accordance with the laws
of the State of Delaware with respect to contracts made and to be performed
entirely therein and without regard to choice of law or principles thereof.
If we have any dispute arising between us, including any dispute with respect to
this agreement, its interpretation, performance or breach, and are unable to
agree on a mutually satisfactory resolution with 30 days, either party may
require the matter to be settled by binding arbitration. If such arbitration
shall occur, it shall be in the city of New York. We shall attempt for two weeks
to agree on a single arbitrator. If that effort shall fail, each party shall
appoint one arbitrator. The two arbitrators so chosen shall attempt for two
weeks to select a third. If they are unable to agree, the American Arbitration
Association in New York City shall choose the third. The arbitration shall occur
using the rules and procedures of the American Arbitration Association. The
decision of the arbitrator(s) shall be final, binding and non-appealable.
However, XXX agrees that this arbitration provision shall apply only to the
extent that the United States Bankruptcy Court, or the United States District
Court if the reference is withdrawn, does not retain jurisdiction over a
controversy or claim.
We confirm that XXX, its Temporary Employees, and its affiliates [fn 2] do not
have any financial interest or business connection with the Company other than
as contemplated by this agreement, and we know of no fact or situation that
would represent a conflict of interest for us with regard to the Company. While
we are not currently aware of any other relationships that connect us to any
party in interest, because XXX and its affiliates serve clients on a national
basis in numerous cases, both in and out of court, it is possible that XXX or
its affiliates may have rendered services to, or have business associations
with, other entities which had, or have, relationships with the Company,
including creditors of the Company. XXX and affiliates have not, and will not
perform services for, or have business connections with, any of these
aforementioned entities in this matter involving the Company.
The Company agrees to promptly notify XXX if it extends (or solicits the
possible interest in receiving) an offer of employment to an employee of XXX and
agrees that it will pay XXX x xxxx fee, upon hiring, equal to 150% of the
aggregate first year's annualized compensation, including any bonus or success
fee, to be paid to any person working for the Company on
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2 XXX is a company that provides temporary employees. Affiliates of XXX include
Xxx Xxxx & Associates, a financial advisory and consulting firm, The System
Advisory Group, providing information technology services, and the Questor
funds, which are private equity funds that invest in special situations and
under-performing companies.
Xx. Xxxxxx X. Xxxxxxxxxxx
October 3, 2001
Page 5
behalf of XXX that the Company or any of its subsidiaries or affiliates hires at
any time up to six (6) months subsequent to the date of the final invoice
rendered by XXX with respect to this engagement. This agreement does not
prohibit the Company from making general solicitations for employment or from
soliciting for employment any individuals who have ceased to be employees or
agents of XXX prior to such solicitation.
If any portion of the letter agreement shall be determined to be invalid or
unenforceable, we each agree that the remainder shall be valid and enforceable
to the maximum extent possible.
All of the above contains the entire understanding of the parties relating to
the services to be rendered by XXX and may not be amended or modified in any
respect except in writing signed by the parties. XXX will not be responsible for
performing any services not specifically described in this letter or in a
subsequent writing signed by the parties.
All notices required or permitted to be delivered under this letter agreement
shall be sent, if to us, to the address set forth at the head of this letter, to
the attention of Xx. Xxxxxx X. Xxxxxxxxxxxx, and if to you, to the address for
you set forth above, to the attention of your General Counsel, or to such other
name or address as may be given in writing to the other party. All notices under
the agreement shall be sufficient if delivered by facsimile or overnight mail.
Any notice shall be deemed to be given only upon actual receipt.
Xx. Xxxxxx X. Xxxxxxxxxxx
October 3, 2001
Page 6
If these terms meet with your approval, please sign and return the enclosed copy
of this proposal.
We look forward to working with you.
Sincerely yours,
JA&A SERVICES, LLC
Xxxxx X. Xxxxxxxxxx
Principal
P/mrc/clients/safetykleen-XXX eng ltr 092401
Acknowledged and Agreed to:
SAFETY-KLEEN CORP.
By:
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Its:
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Dated:
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JA&A Services LLC
Employment by
Safety Kleen Corp. et al.
Exhibit A
Temporary Employees
Individuals With Executive Officer Positions--Full Time
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Name Description Hourly Rate Hourly Rate
2000 2001
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Xxxxx, Xxxxxxx X. Interim Controller $400 $430
[fn 3]
------------------------------- ---------------------------------------------
XxXxxxx, Xxxxx X. Interim Chief Information $400 $430
Officer
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3 Xx. Xxxxx held this title in the past and as of October 31, 2001, is no longer
providing services to the Company.
Exhibit B
Additional Temporary Staff Employees - Full time
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Name Description Hourly Rate Hourly Rate
2000 2001
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Xxxxxx, Xxxxxxx X. Financial Planning N/A $220
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Xxx, Xxxxxx X. Bankruptcy Reporting, N/A $285
Cost Reduction Planning
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Xxxxxxxx, Xxxx X. Treasury Manager N/A $300
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Xxxxx, Xxxxxx X. Manager of Accounts $400 $430
Receivable and Payable
[fn 4]
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Xxxxxx, Xxxxxxx X. Financial Reporting and $400 $430
Control
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Xxxxxxxx, Xxxx X. Information Systems $300 $390
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Xxxxxxxxxx, Xxxxx X. Assistant to CEO $400 $500
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Xxxxxxxx, Xxxxxx X. Buyer Due Diligence, Cost N/A $350
Reduction Planning
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4 Xx. Xxxxx had this role after the inception of the case. At the present time,
he is not working at the Company.
Exhibit C
Additional Temporary Staff Employees - Part time
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Name Description Hourly Rate Hourly Rate
2000 2001
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Xxxxx, Xxxx X. Lease Analyst, Claims $265 $285
Reconciliation
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Xxxxxxxxxx, Xxxxxx X. Restructuring $575 $595
Executive
[fn 5]
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Xxxxxx, Xxxxx Manager of Lease $400 $400
Analysts
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Xxxxxxxx, Xxxxxx X. Lease Analyst, Claims $220 $250
Reconciliation
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Xxxx, Xxxxxx X. Lease Analyst, Claims N/A $220
Reconciliation
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Xxxxxxxxxxx, Xxxxxx X. Information Systems $530 $595
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5 Xx. Xxxxxxxxxx had this role at the inception of the case on a part-time
basis. At the present time, his role in the case has been substantially reduced.
Exhibit D
Additional Temporary Staff Employees
(1) No Longer Working on Engagement as of August 31, 2001
(2) Billed Less Than 20 Cumulative Hours as of August 31, 2001
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Name Description Hourly Rate Hourly Rate
2000 2001
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(1) Xxxxxxxx, Xxxxx Information systems $375 N/A
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(1) Xxxxxx, Xxxxxxx Lease analyst $190 N/A
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(1) Xxxxxxxx, Xxxxx Lease analyst $160 N/A
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(2) XxXxxxx, Xxxxxx Administration $130 $130
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(2) Xxxxx, Xxxxxxxx Administration $130 $130
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(2) Xxxx, Xxxxxx Restructuring $575 $575
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(1) Xxxxxx, Xxxxxxx Lease analyst $190 N/A
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(2) Xxxxx, Xxxx Lease analyst N/A $220
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(1) Xxxxxxxxx, Xxx Lease analyst $215 $215
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(2) Xxxxxx, Xxxxx Lease analyst N/A $300
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