Exhibit 10.6
EMPLOYMENT AGREEMENT
This Agreement is made as of the 27th day of November, 1996
between Statia Terminals Group N. V., a Netherlands Antilles corporation, having
a registered office at L.B. Xxxxxxxxxx 0, Xxxxxxx, Xxxxxxxxxxx Antilles (the
"Company"); Statia Terminals, Inc., a Delaware corporation, with offices at 000
Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 (the "Subsidiary"); and
Xxxxx X. Xxxxxxx, an individual with an address of 00000 Xxxxx Xxxxx Xxxx.
Xxxxx, Xxxxx Xxxxxxx, XX 00000 (the "Employee").
RECITALS
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company shall, directly or indirectly, acquire all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary and is presently serving as President and Chief Executive
Officer of the Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods and
personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as President and Chief
Executive Officer of the Subsidiary and the Subsidiary hereby agrees to employ
and continue to employ the Employee as President and Chief Executive Officer,
and the Employee accepts such employment for the term of the employment
specified in Section 3 hereof (the "Employment Term"). During the Employment
Term, the Employee shall serve as the President and Chief Executive Officer of
the Subsidiary, performing such duties and having such authority as shall be
reasonably required of an executive-level employee of the Subsidiary, reporting
only to the Board of Directors of the Subsidiary (the "Board"), and shall have
such other powers and perform such other additional executive duties as may from
time to time be assigned to him by the Board. Such duties being performed and
such authority being exercised shall be at least commensurate with the duties
being
performed and authority being exercised by the Employee immediately prior to the
date of this Agreement.
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all of
his time, energy, experience and talents during regular business hours and as
otherwise reasonably necessary to such employment, to the exclusion of all other
business activities; provided however, that such exclusion shall not prohibit
the Employee from attending to the Employee's personal matters and/or financial
and investment affairs (which financial or investment affairs shall not conflict
with the business of the Subsidiary or the Company and is subject to the
provisions of Section 12 hereof) during regular business hours as may from
time-to-time be reasonably necessary so long as attendance to such matters and
affairs does not interfere with the performance of the Employee's duties
hereunder.
3. Employment Term. Subject to earlier termination pursuant to
Section 7 hereof the Employment Term shall (i) begin on the date of this
Agreement and continue until December 31, 2001 and (ii) be automatically renewed
for successive three-year periods thereafter, unless, at least 90 days before
the end of the initial term or any subsequent three-year period, either party
gives notice to the other of his or its desire to terminate this Agreement, in
which case it shall terminate as of the end of such term or period.
Notwithstanding the foregoing, if after December 31, 1998, there is a Change in
Control (as hereinafter defined) which occurs during the Employment Term, the
Employment Term shall be extended automatically for a period of three years from
and after the date of such Change in Control and shall not be automatically
renewed thereafter.
4. Compensation.
(a) Salary. During the Employment Term, the Company shall
cause the Subsidiary to pay the Employee a base salary, payable in equal
bi-weekly installments, subject to withholding and other applicable taxes, at an
annual rate of not less than Two Hundred Fifteen Thousand U.S. Dollars
($215,000). Such base salary shall be reviewed in January, 1997, and at least
annually thereafter.
(b) Cash Incentive Bonus. For the calendar year 1997
and for each subsequent calendar year, or portion thereof, during the
Employment Term, a reasonable target EBITDA (as defined below) for each calendar
year and a target bonus for the Employee for such calendar year shall be
established by the Board in its discretion after receiving the recommendation of
the management of the Subsidiary, and as soon as practicable after the end of
each such calendar year as the actual EBITDA achieved for such calendar year has
been determined, the Company shall cause the Subsidiary to pay to the Employee a
lump sum bonus determined as follows:
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% of Target EBITDA Achieved
-------------------------------------
At Least But Less Than % of Target Bonus to be Paid
------------ ----------------- -----------------------------------
-- 85 None
85 90 85
90 95 90
95 100 95
100 105 100
105 110 105
110 115 110
115 120 115
120 125 120
125 and above -- 125
If during the course of any calendar year, the Company shall sell or otherwise
dispose of five percent (5%) or more of the total assets of the Company and its
subsidiaries, the Board shall establish a revised EBITDA target for such
calendar year after receiving management's recommendation.
"EBITDA" shall mean for any period, the (a) net income (or net
loss) of the Company and its subsidiaries plus (b) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, and (v) extraordinary or unusual losses deducted in calculating net
income (or net loss) less (c) extraordinary or unusual gains added in
calculating net income (or net loss), in each case determined in accordance
with generally accepted accounting principles at the end of each such calendar
year for the Company and its subsidiaries on a consolidated basis, and plus (d)
any fees paid to or expenses incurred by the Company pursuant to the Management
Agreement between the Company and an Affiliate (as hereinafter defined) of a
stockholder of the Company dated November __, 1996.
(c) Employee Benefits. The Employee shall be entitled
to and shall receive employee benefits or participate in plans and programs
maintained by or on behalf of the Subsidiary which are otherwise made available
to employees of the Subsidiary, including but not limited to, medical, health,
accident and disability plan, cafeteria plan and 401(k) plan.
(d) Additional Benefits. In addition to the other
compensation payable to the Employee hereunder, during the Employment Term, the
Company shall cause the Subsidiary to furnish at its expense an automobile, or
a reasonable allowance in lieu thereof at the option of the Subsidiary, office,
reasonable secretarial services, a club membership, and such
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other supplies, equipment, facilities, services and emoluments appropriate to
such Employee's position. Also, the Subsidiary shall purchase from The CBI
Industries Inc. Supplemental Survivors' Benefit, Executive Life Insurance and
Benefit Restoration Trust at cash surrender value the collateral assignment of
the Executive Life Insurance Policy on the Employee and pay the premiums on such
policy during the Employment Term pursuant to a separate agreement dated the
date hereof between the Employee and the Subsidiary relating to such policy.
(e) Paid Time Off. Employee shall be entitled to paid
vacation, holidays, and sick leave during each calendar year of employment in
accordance with policies of the Subsidiary. Vacation may only be taken at times
mutually convenient for the Subsidiary and the Employee. The Subsidiary may
elect to pay out all accrued and unused vacation time as of December 31 of any
calendar year in January of the following calendar year. Such pay out will be at
the then prevailing rate of annual compensation. No more than four weeks
vacation time may be accrued at any time.
5. Expenses. The Employee shall be entitled to be reimbursed
by the Subsidiary for all reasonable expenses incurred by him in connection with
the performance of his duties hereunder in accordance with policies established
by the Board from time to time and upon receipt of appropriate documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only to
the extent required, after prompt notice to both the Company and the Subsidiary
of any such order), directly or indirectly, other than in the regular and proper
course of business of the Company and/or the Subsidiary, any confidential
knowledge or information with respect to the operations or finances of the
Subsidiary or the Company or any of their subsidiaries or Affiliates, or with
respect to confidential or secret processes, services, techniques, customers or
plans with respect to the Company and/or the Subsidiary, and (b) the Employee
will not use, directly or indirectly, any confidential information for the
benefit of anyone other than the Company and/or the Subsidiary; provided,
however, that the Employee has no obligation, express or implied, to refrain
from using or disclosing to others any such knowledge or information which is or
hereafter shall become available to the public other than through disclosure by
the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. Section 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company may
deem necessary or appropriate to vest complete title and ownership of any Work
Product, and all rights therein, exclusively in the Subsidiary.
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During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the Subsidiary or to commit any other action
that injures or hinders the business relationships of the Company and/or the
Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
7. Termination.
(a) Mutual Agreement. The employment of the Employee
hereunder may be terminated at any time by the mutual agreement of the parties
hereto.
(b) Termination for Substantial Cause. The Subsidiary may
at any time upon thirty (30) days prior written notice to the Employee,
terminate the employment of the Employee for Substantial Cause (as hereinafter
defined).
(c) Termination by the Employee. The Employee shall be
entitled to terminate his employment without being in violation of any provision
of this Agreement upon 30 days prior written notice to the Subsidiary (i) for
Good Reason; (ii) upon retirement pursuant to the CBI Pension Plan, as amended
effective August 1, 1996, or pursuant to any other plan or policy of the
Subsidiary; or (iii) at any time and for any reason after the Employee has
attained the age of sixty-five (65) years.
(d) Termination by Death or Disability. The employment of
the Employee shall terminate upon the death of the Employee or the inability
of the Employee to perform his duties as a result of physical or mental
disability for an aggregate of 90 days in any 180 day period, as determined in
good faith by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of owning, leasing
or operating petroleum and other bulk liquid blending, trans-shipment, storage
or processing facilities or providing related terminaling services such as
supply of bunker fuel for vessels, emergency and spill response services;
brokering of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime constituting
a felony in the jurisdiction in which committed, or for any other criminal act
against the Subsidiary or the Company involving dishonesty or willful misconduct
intended to
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injure the Subsidiary or the Company or any Affiliate of either of them in any
substantial way (whether or not a felony and whether or not criminal
proceedings are initiated);
(ii) Failure or refusal of the Employee in any material
respect to perform his obligations under this Agreement or the duties of his
employment or to follow the lawful and proper directives of the Board, other
than by reason of a Disability provided such duties or directives are consistent
with this Agreement, and such failure or refusal continues uncured for a period
of sixty (60) days after written notice thereof from the Subsidiary to the
Employee which specifies (i) the nature of such failure or refusal, and (ii) the
reasonable action of the Employee necessary for cure;
(iii) Any willful or intentional misconduct of the
Employee committed for the purpose, or having the reasonably foreseeable effect,
of injuring in a substantial way the Company, the Subsidiary, or any Affiliate
of either of them, or their respective businesses or reputations; or
(iv) Any conduct by Employee that causes the Subsidiary
or any of its Affiliates to violate any state or federal law relating to the
workplace environment or any violation of any written policy of the Subsidiary
providing for termination in the event of violation of such policy.
(a) "Good Reason" shall mean:
(i) a signlficant reduction in the authorities, duties,
or responsibilities of Employee other than as a result of sales of assets as
contemplated by the Purchase and Sale Agreement;
(ii) assignment to an office location which is more
than 100 miles from the office location of the Employee as of the date of this
Agreement; or
(iii) material breach of this Agreement by the
Subsidiary or the Company which is not cured within thirty (30) days after
written notice of such breach is given by the Employee to the Company and the
Subsidiary.
As applied to the Employee, the parties hereto agree that any position other
than President and Chief Executive Officer of the Subsidiary, reporting only to
the Board, and to whom all other employees report, directly or indirectly, would
constitute a significant reduction in the authorities, duties or
responsibilities of the Employee.
(b) "Change in Control" shall mean the occurrence of any
of the following events with respect to the Company or with respect to the
Subsidiary:
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(i) a merger, consolidation, combination,
reorganization or other transaction resulting in less than fifty percent (50%)
of the combined voting power of the surviving or resulting entity being owned by
the former shareholders of the Company or the Subsidiary, as applicable;
(ii) the sale or other disposition of all or
substantially all of the assets or business of the Company or the Subsidiary, as
applicable other than to an Affiliate of the Company or the Subsidiary, as
applicable; or
(iii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company or of the Subsidiary, as applicable, cease for any
reason to constitute at least a majority of such board, unless the election, or
nomination for the election by the shareholders of the Company or the
Subsidiary, respectively, of each new director was approved by at least
two-thirds of the directors then still in office who were directors at the
beginning of the period;
provided, however, that, the foregoing to the contrary notwithstanding, in no
event shall any Change in Control be deemed to occur, for purposes of this
Agreement, as the direct or indirect result of the occurrence of any of the
transactions contemplated under the Purchase and Sale Agreement.
(c) "Afiliate" shall mean, with respect to any Person, any
entity that directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with such Person.
(d) "Person" shall mean any corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or other entity or organization.
(e) "Work Product" shall mean work product, property,
data documentation or information of any kind relating to the Business,
prepared, conceived, discovered, developed or created by the Employee for the
Subsidiary or any of the Subsidiary's Affiliates, clients or customers while the
Employee is employed by the Subsidiary.
(f) "Disability" shall have the meaning specified in
Section 7(d) hereof.
9. Insurance and Indemnification.
(a) Life Insurance. The Subsidiary may purchase
insurance on the life of the Employee, and if it does so, the Employee shall
cooperate fully by performing all the requirements of the life insurer which are
necessary conditions precedent to the issuance of the life insurance policy
issued by it.
7.
(b) Directors and Officers Insurance and
Indemnification. The Subsidiary shall provide directors and officers
insurance covering the Employee for events occurring during the Employment
Term on terms at least as favorable as coverage for Directors of the Company,
and the Subsidiary shall provide indemnification to the Employee to the full
extent allowed by the law of its jurisdiction of incorporation.
10. Severance.
(a) If the Employee's employment is terminated by the
Subsidiary without Substantial Cause or by the Employee for Good Reason, then
without further liability of the Subsidiary or the Company the Employee shall be
entitled to (i) medical and dental benefits as provided immediately prior to the
date of termination which shall continue for the Severance Period (as
hereinafter defined) (which shall be terminated sooner to the extent provided by
another employer) and (ii) severance compensation for the Severance Period
following any such termination, payable in equal monthly installments, subject
to withholding and other applicable taxes, at an annual rate equal to the
Employees base rate of pay for the year of termination. In addition, the
Employee will be entitled to a pro rata portion of the bonus compensation
referred to in Section 4(b) hereof for the year of termination only as and when
ordinarily determined for such year. For the purposes of this Agreement,
"Severance Period" shall mean a period commencing on the date of any such
termination and ending on the expiration of the Employment Term (determined as
of the date of such termination without giving effect to such termination);
provided, however, that the Severance Period shall not be less than one year.
(b) If the Employee's employment is terminated for any
other reason, then without further liability of the Subsidiary or the Company,
the Employee shall be entitled to the salary, expenses and benefits accrued to
the termination date (excluding the bonus referred to in Section 4(b) hereof).
11. Notice. Any notices required or permitted hereunder
shall be in writing, signed and shall be deemed to have been given when
personally delivered or when mailed, certified or registered mail,
postage prepaid, to the following addresses:
If to the Employee:
Xxxxx X. Xxxxxxx
00000 Xxxxx Xxxxx Xxxx. Xxxxx
Xxxxx Xxxxxxx, XX 00000
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If to the Subsidiary:
Statia Terminals, Inc.
000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Board of Directors
With a copy to:
Xxxxxx Xxxxxx Partners II, L.P.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
and a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx, Esq.
If to the Company:
Statia Terminals Group N. V.
c/o Statia Terminals Inc.
000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Board of Directors
With a copy to:
Xxxxxx Xxxxxx Partners II, L.P.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
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and a copy to:
Xxxx, Scholer, Fierman,
Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address for purposes of this Section by sending notice to the other
parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of eighteen months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory or
other capacity for, any Competing Entity which conducts its business within the
Territory (as the terms Competing Entity and Territory are hereinafter defined);
provided, however, that notwithstanding the foregoing, the Employee may make
solely passive investments in any Competing Entity the common stock of which is
publicly held and of which the Employee shall not own or control, directly or
indirectly, in the aggregate securities which constitute 5% or more of the
voting rights or equity ownership of such Competing Entity; or (b) solicit or
divert any business or any customer from the Subsidiary or any Affiliate of the
Subsidiary or assist any person, firm or corporation in doing so or attempting
to do so; or (c) cause or seek to cause any person, firm or corporation to
refrain from dealing or doing business with the Subsidiary or any Affiliate of
the Subsidiary or assist any person, firm or corporation in doing so.
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof engages in the Business; and (ii) the term Territory shall mean the
Caribbean and the area within a three hundred mile radius of (a) the terminal
facility operated by an Affiliate of the Subsidiary at Point Xxxxxx, Nova Scotia
and (b) any terminal hereafter operated by the Subsidiary or any Affiliate of
the Subsidiary.
13. General.
(a) Governing Law: Captions. The terms of this Agreement
shall be governed by and construed under the laws of the State of Florida.
Paragraph and Section captions used herein are for convenience of reference
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights hereunder shall inure to the benefit of the assignee or
any person, firm or corporation succeeding to all or substantially all of the
business or assets of the Subsidiary by purchase, merger or consolidation.
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(c) Dispute Resolution. With the exception of the
Company's or the Subsidiary's right to elect to seek injunctive relief pursuant
to paragraph (g) of this Section 13, in the event of any dispute between either
the Company or the Subsidiary and the Employee arising out of or relating to
this Agreement or its termination or any other aspect of Employee's employment,
the parties hereby agree to submit such dispute to a non-binding mediation under
the American Arbitration Association's National Rules for the Resolution of
Employment Disputes; Arbitration and Mediation Rules (the "Rules") within sixty
(60) days of notice from any one of the parties to another. Unless the parties
can agree on a mediator within thirty (30) days of such notice, mediation shall
proceed pursuant to the Rules. In the event any such dispute is not resolved by
mediation, any party hereto may initiate an action or claim to enforce any
provision or term of this Agreement. Each party shall bear its or his own costs
and expenses (including attorney's fees) associated with any mediation, action,
or claim.
(d) Binding Effect. This Agreement is for the employment
of Employee, personally, and the services to be rendered by him must be
rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company, the Subsidiary, and the Employee and, as
the case may be, their respective successors and assigns, personal
representatives, heirs and legatees.
(e) Entire Agreement: Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
(f) Duration. Notwithstanding the term of employment
hereunder, this Agreement shall continue for so long as any obligations remain
under this Agreement hereto, including without limitation any obligations of the
Company or the Subsidiary under Sections 9(b), 10 or 13 of this Agreement.
(g) Survival. The covenants set forth in Sections 6 and
12 of this Agreement shall survive and shall continue to be binding upon
Employee notwithstanding the termination of this Agreement for any reason
whatsoever. The covenants set forth in Section 6 and Section 12 of this
Agreement shall be deemed and construed as separate agreements independent of
any other provision of this Agreement. The existence of any claim or cause of
action by Employee against Company and/or Subsidiary, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
Company or Subsidiary of any or all covenants. It is expressly agreed that the
remedy at law for the breach of any such covenant is inadequate and that
injunctive relief shall be available to prevent the breach or any threatened
breach thereof.
(h) Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby and the parties shall in good faith agree on a
modification of the invalid, illegal or unenforceable provision which renders it
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valid, legal or enforceable (as the case may be) and which as closely as
possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby
unconditionally guarantees to Employee the full and timely performance by
Subsidiary of its obligations under this Agreement.
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
Statia Terminals Group N. V.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Attorney-in-law
EMPLOYEE
/s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
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