EXHIBIT 10.7
FORM OF EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of November 15, 1996
by and between Genesis Energy, L.L.C. (the "Company") and ("Executive").
RECITALS:
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A. The Company is the general partner of Genesis Energy L.P. ("Genesis
MLP") and Genesis Crude Oil, L.P. ("Genesis OLP") and is engaged in the crude
oil gathering, marketing and pipeline business.
B. Executive is the for the Company.
C. Executive desires to obtain the benefits and incentives from the
Company of a written employment agreement having an initial term through
December 31, 1999, and, at the Company's election, certain extension terms.
D. The Company desires to enter into such an employment agreement with
Executive.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive hereby
agree as follows:
SECTION 1. Employment. The Company hereby employs Executive as
of the Company; provided, however, that Executive will continue as an employee
of Executive's employer on the date hereof but will be seconded to the Company
until January 1, 1997 at which time Executive will become employed by the
Company. In such capacity, Executive will have the responsibilities and perform
the services and duties described in Section 3 of this Agreement. Executive
hereby accepts such employment and agrees to perform such services and duties
for the Company.
SECTION 2. Term. This Agreement will be for an initial term commencing
on the effective date of that certain initial public offering of limited
partnership interests in Genesis MLP and ending on December 31, 1999 (the
"Initial Term"), unless sooner terminated in accordance with the provisions
hereof. Thereafter, the Company will have the option, exercisable by notice to
Executive given not less than 60 days prior to the expiration of the Initial
Term, or any Extension Term (as hereinafter defined), to extend this Agreement
for one additional term of two calendar years ending December 31, 2001, and, if,
in each instance, so extended, for five additional terms of one calendar year
each with the term of the last extension, if so exercised, expiring on
December 31, 2006 (each such extension an "Extension Term"). Anything herein to
the contrary notwithstanding, this Agreement, and Executive's employment
hereunder, may be terminated at any time, with or without cause, upon notice of
termination to Executive; provided, however, that in the event of any such
termination without cause (including any Involuntary Termination (as hereinafter
defined)), Executive will be entitled to the Termination Compensation (as
hereinafter defined) set forth herein.
SECTION 3. Duties of Executive. As , Executive will
report directly to the President and Chief Executive Officer and will have such
duties and responsibilities with respect to the Company, Genesis MLP and Genesis
OLP as customarily would be undertaken by the of
companies engaged in businesses similar to, or competitive with, the Company.
Executive will not be required to hold any other offices, positions or
directorships of the Company and/or any subsidiary or affiliate of the Company
during the term of this Agreement. Executive will act in the best interest of
the Company, Genesis MLP and Genesis OLP and their subsidiaries and affiliates
in the performance of Executive's services and duties under this Agreement.
Without the prior consent of the Non-Executive Chairman of the Board of
Directors of the Company, Executive will not actively engage in any other
business or business activity; provided, however, that nothing herein contained
will limit the right of Executive to manage Executive's personal investment
activities provided that such personal investment activities do not materially
interfere with the performance of Executive's duties and responsibilities
hereunder or otherwise materially conflict with any policies which have been
promulgated and distributed by the Company.
SECTION 4. Compensation.
4.1 Compensation during the Initial Term. Subject to the terms and
conditions of this Agreement, the Company will cause Executive to be paid an
annual salary of $ for the partial year ending December 31, 1996 and
will pay Executive an annual salary of $ for each of the years ending
December 31, 1997, 1998 and 1999 (such annual salary hereinafter referred to as
the "Base Compensation"). The Base Compensation will reviewed annually by the
Compensation Committee of the Board of Directors of the Company. In addition,
Executive will be entitled to participate in the Company's Incentive Plan in
accordance with the terms thereof (the "Incentive Plan Amount").
4.2 Compensation during the Extension Terms. The Base Compensation
paid by the Company to Executive during the Extension Terms will be established
by the Company in connection with the election to extend the term of this
Agreement pursuant to Section 2, will not be less than the Base Compensation
multiplied by 1.05 with respect to the first Extension Term and thereafter not
less than the Base Compensation in effect immediately prior to such election for
any subsequent Extension Term and will be advised to Executive simultaneously
with notice from the Company of its election to exercise an Extension Term
option.
4.3 Award of Restricted Units. The Company will grant to Executive
Restricted Units ("Initial Award Units") in an amount determined by dividing
$600,000 by the initial offering price of a limited partnership interest in
Genesis MLP, pursuant to the Company's Restricted Unit Plan, in accordance with
the terms thereof, promptly upon the adoption of such plan by the Board
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of Directors of the Company. The Initial Award Units shall vest in accordance
with terms of the Restricted Unit Plan.
4.4 Short Term Disability Salary Continuance. In the event of a short
term illness or injury that would entitle Executive to salary continuance
benefits under the Company's short term disability salary continuance plan (the
"STD Plan") in effect from time to time, and Executive's years of service with
the Company, as determined in accordance with the STD Plan, are not sufficient
to provide 100% of the maximum amount of salary continuance that would otherwise
be available to Executive with more years of service (the "Maximum STD Payment")
the Company will pay Executive, as and when salary continuance payments are made
under the STD Plan, an amount equal to the difference between the Maximum STD
Payment and the payment made to Executive under the STD Plan.
SECTION 5. Payment of Compensation. The compensation payable to Executive
pursuant to Section 4 of this Agreement will be paid as follows:
(i) During the term of Executive's employment by the Company
(A) the Base Compensation will be paid to Executive in accordance
with the Company's customary payroll practices; and
(B) the Incentive Plan Amount, if any, will be paid in the manner
determined by the Compensation Committee of the Board of
Directors of the Company in accordance with the Incentive
Plan.
(ii) Upon termination of Executive's employment by the Company in
accordance with Section 7.5(A) of this Agreement, the Termination
Compensation (as hereinafter defined), if any, will be paid in
accordance with the provisions of Section 7.5(C).
All payments of Base Compensation, the Incentive Plan Amount, Initial Award
Units and any other amounts paid to Executive will be subject to such deductions
and withholdings as, from time to time, may be required by law or as may be
elected by Executive pursuant to the Company's benefit plans in effect from time
to time.
SECTION 6. Employment Benefits. During the Initial Term or any Extension
Term of Executive's employment by the Company, Executive will be entitled to
four weeks paid vacation. In addition, Executive will be entitled to sick leave
in accordance with the Company's sick leave plans in effect from time to time,
and to participate, subject to qualification requirements, in such medical,
dental, life or other insurance or employee benefit plans as the Company may
have in effect from time to time and generally offer to its employees.
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SECTION 7. Termination.
7.1 Termination for Cause. This Agreement will be null and void
(except for the provisions of Section 8 concerning Confidentiality which will
survive any termination of this Agreement) upon the termination of Executive's
employment for Cause. As used in this Agreement, "Cause" will mean (a)
conviction of Executive, in a final non-appealable decision, in a court of law
of a felony, a crime involving moral turpitude or any crime or offense involving
the misuse or misappropriation of money, credit or other property of the Company
or any subsidiary or affiliate of the Company which hereinafter may employ
Executive; provided, however, that the Company may suspend Executive's
employment and any payment due Executive under this Agreement during the
pendency of any such criminal charge; (b) violation in any material respect of
any material rule or policy promulgated and distributed by the Company, Genesis
MLP, Genesis OLP or any subsidiary or affiliate of the Company which hereinafter
may employ Executive (hereinafter the "Genesis Affiliates"); (c) violation, as
determined in a final non-appealable decision, of any rule or regulation of any
regulatory or self-regulatory body to which any of the Genesis Affiliates is
subject or of which any of the Genesis Affiliates is a member including without
limitation, the New York Stock Exchange, The National Association of Securities
Dealers, Inc., the Commodity Futures Trading Commission and the New York
Mercantile Exchange, which violation would materially reflect on Executive's
character, competence or integrity; (d) a material breach by Executive of
Executive's duty of loyalty to any of the Genesis Affiliates including, by way
of illustration, Executive's pretermination of employment solicitation of
customers or employees of any of the Genesis Affiliates, unauthorized removal of
Confidential Business Information (as hereinafter defined) from the premises of
any of the Genesis Affiliates and the dissemination thereof or refusal to return
such Confidential Business Information to the Company; (e) Executive's material
breach of this Agreement; or (f) Executive's gross misconduct, gross
insubordination or willful refusal to perform the lawful duties of his
employment. In no event will Executive be entitled to any compensation or
payments under this Agreement following Executive's termination, or deemed
termination, for Cause, provided that Executive's termination for Cause under
this Agreement shall not affect Executive's rights with respect to any Initial
Award Units that shall have vested at the time of termination. If, after
Executive's termination of employment, it is determined that Executive's
employment could have been terminated for Cause under items (a),(b),(c) or (d)
above and such grounds for termination resulted in or reasonably could be
expected to result in injury to the business, reputation or prospects of the
Company or the Genesis Affiliates, Executive's employment shall, at the election
of the Company in its sole discretion, be deemed to have been terminated for
Cause. If Executive's employment and payment are suspended pursuant to item (a)
above, Executive will have the right, exercisable by notice to the Company given
within 15 days after any such suspension, to treat such suspension as a
termination for Cause and resign from the Company without being bound by the
non-compete provisions of Section 10 of this Agreement.
Prior to any termination of Executive's employment for Cause, the
Company shall afford Executive an opportunity to meet with the Company's
independent directors and Chairman of the Board and present Executive's position
with respect to such grounds for termination.
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7.2 Involuntary Termination. Executive's employment will be considered
to have been terminated involuntarily (an "Involuntary Termination") upon
occurrence of the following: (a) the duties and responsibilities of Executive
shall have been substantially and materially reduced such that Executive's
duties and responsibilities would no longer reasonably be considered to be
comparable to those of the of companies similar to, or competitive
with, the Company, (b) reduction in Executive's Base Compensation or exclusion,
other than for failure to meet qualification requirements, from the Company's
employee benefit plans in effect from time to time and generally offered to its
employees, (c) a change of greater than 75 miles in the location, on the date
hereof, of the Company's principal executive offices or (d) the Company's
material breach of this Agreement. Executive will promptly, but in any event
within 30 days after the occurrence or discovery thereof, notify the Company of
any event which Executive considers an Involuntary Termination.
7.3 Termination under Benefit Plans. If Executive's employment is
terminated in accordance with the terms of the Company's long term disability
plan in effect from time to time, any unpaid portion of Executive's Base
Compensation will be due Executive pursuant to this Agreement only for periods
prior to such termination, and any payment pursuant to the Incentive Plan may be
made solely in the discretion of the Compensation Committee and otherwise in
accordance with the terms of such plan.
7.4 Termination due to Death. If Executive dies while employed by the
Company, this Agreement will immediately terminate and, except for any unpaid
portion of Executive's Base Compensation for periods prior to Executive's death,
no further payments will be due hereunder, whether to Executive, Executive's
heirs, estate or otherwise; provided, however, that Executive's heirs and estate
will be entitled to retain any Initial Award Units for a period of six months
after Executive's death. Executive shall have the right to designate in writing
from time to time a beneficiary or beneficiaries by filing a written notice of
such designation with the Company, which Beneficiary shall be entitled to
receive any amount required to be paid as provided in this Section 7.4 in the
event of the Executive's death. In the event that the beneficiary designated by
Executive does not survive Executive and no successor beneficiary is selected or
in the event no valid designation has been made, Executive's beneficiary shall
be such Executive's estate. In the event of the death of Executive, any payment
required to be made hereunder to Executive shall be made to such Executive's
beneficiary or beneficiaries. In the event Executive's beneficiary is the
Executive's estate, no payment shall be made unless the Company shall have been
furnished with such evidence as the Company may deem necessary to establish the
validity of the payment.
7.5 Termination Compensation.
(A) In the event the Company (i) terminates Executive's employment
during the Initial Term or any Extension Term for any reason other
than Cause, including any Involuntary Termination, or as provided
in Section 7.3 of this Agreement, or (ii) does not exercise its
option to extend the Initial Term or any Extension Term of this
Agreement, the Company will pay Executive, in
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full settlement of all sums due Executive from the Company
(excluding, however, any sums then due Executive under any of the
Company's benefit plans or with respect to accrued vacation),
whether under this Agreement or arising at law or in equity, a
termination payment (the "Termination Compensation") equal to the
greater of (i) Executive's Base Compensation for the remaining
period of the Initial Term or Extension Term then in effect, as
the case may be, or (ii) one year of Executive's Base Compensation
at the level in effect at the time of termination or expiration
without exercise of the option to extend. In addition, Executive
will be entitled to (a) retain any Initial Award Units for a
period of six months after Executive's termination or after
expiration of this Agreement without the exercise by the Company
of the option to extend, (b) such Incentive Compensation, if any,
as may be payable to Executive in accordance with any Incentive
Compensation plan then in effect and (c) in the event Executive
elects to continue medical and/or dental coverage under the
provisions of the Consolidated Omnibus Budget Reconciliation Act
(COBRA), the Company will pay Executive, as and when required to
maintain such coverage, an amount equal to the required premiums
for the duration of the Non-Compete Period (as hereinafter
defined).
(B) As a condition to the right to receive the Termination
Compensation, Executive will (i) execute and deliver to the
Company a severance and release agreement in the form attached
hereto as Exhibit A, and (ii) Executive will not, for a period
(the "Non-Compete Period") equal to (a) six months in the event
the Company does not exercise its option to extend this Agreement
or (b) or in the event of termination of the shorter of one year
after the date of Executive's termination or the unexpired portion
of the Initial Term or Extension Term, as the case may be, but in
no event less than six months, either directly or indirectly,
compete with the Company in the crude oil gathering, marketing
(including domestic crude oil trading but excluding trading solely
on the New York Mercantile Exchange or other commodities
exchanges) and transportation (including pipeline) business
whether as an employee, officer, director, shareholder (other than
as an ordinary shareholder of a publicly traded entity), partner,
proprietor or otherwise, in the geographical areas in which the
Company then operates or is engaged in business.
(C) The Termination Compensation will be paid to Executive in the
event of a termination pursuant to Section 7.5(A) above, in four
equal installments with the first installment due on the date of
such termination and the remaining installments at equal intervals
thereafter over the applicable Non-Compete Period.
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SECTION 8. Confidentiality. Executive acknowledges that the business of
the Company and the Genesis Affiliates is highly competitive and that the
Company's method of operation, crude oil trading practices, financial condition
and other matters relating to the conduct of such business, and the conduct of
such business as previously conducted by Basis Petroleum, Inc. and Xxxxxx
Corporation and its affiliates, comprise confidential business information (the
"Confidential Business Information") which is unique and valuable to the
Company. Executive further acknowledges that the use of the Confidential
Business Information by Executive in competition with the Company and the
Genesis Affiliates will be highly detrimental to the continued successful
operation of the business of the Company and the Genesis Affiliates. Executive
will keep the Confidential Business Information confidential and will not
disclose it to any unauthorized parties. Executive acknowledges and agrees that
the Company shall have the broadest possible protection, consistent with public
policy, of the business of the Company and the Genesis Affiliates from the
wrongful use by Executive of such Confidential Business Information.
Confidential Business Information shall not include any information which is
generally available to the public other than as a result of a disclosure by
Executive or which was known to Executive prior to Executive's employment with
the Company or with Basis Petroleum, Inc. or Xxxxxx Corporation and its
affiliates, as the case may be.
SECTION 9. Remedies. Each of the parties acknowledges that the rights
hereunder are necessarily of a special, unique and extraordinary nature, and
that the loss arising from a breach hereof cannot reasonably and adequately be
compensated by money damages and will cause a party to suffer irreparable harm.
Accordingly, upon the breach by a party of any material term of this Agreement
at any time, the other party shall be entitled to injunctive or other
extraordinary relief in case of such breach, and such injunctive or other
extraordinary relief shall be cumulative to, but not in limitation of, any other
remedies to which the party may be entitled as a result of the breach of such
Agreement. In the event Executive breaches this Agreement, the Company will
also have the right, in addition to any other rights it may have at law, in
equity or under this Agreement to cancel, withhold and/or offset any payments
due Executive hereunder against any payments otherwise due to Executive from the
Company, Genesis MLP or Genesis OLP. In any action to enforce any right or
remedy hereunder, the prevailing party in a final non-appealable decision of a
court of competent jurisdiction shall be entitled to recover such prevailing
party's reasonable legal fees and expenses.
SECTION 10. Noncompetition. If Executive resigns or otherwise terminates
his employment for any reason other than the Company's breach of a material
provision of this Agreement, or as a result of an Involuntary Termination, then,
Executive will not, for the duration of the Non-Compete Period, directly or
indirectly compete with the Company in the crude oil gathering, marketing
(including domestic crude oil trading but excluding trading solely on the New
York Mercantile Exchange or other commodities exchanges) and transportation
(including) pipeline business at the time of such resignation or termination
whether as an employee, officer, director, shareholder (other than as an
ordinary shareholder of a publicly traded entity), partner, proprietor or
otherwise in the geographical areas in which the Company then operates or is
engaged in business. Executive will not be entitled to any compensation or
payments under this Agreement following any
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such resignation or termination except for Incentive Compensation, if any,
payable to Executive in accordance with any Incentive Compensation plan then in
effect.
SECTION 11. Amendments; Waivers. This Agreement may not be modified,
revised, amended or waived in any manner except by an instrument in writing
signed on behalf of each of the parties by their respective duly authorized
representatives. No delay on the part of either party in exercising any right,
power or privilege under this Agreement will operate as a waiver thereof, nor
will any partial exercise or waiver of any right, power or privilege under this
Agreement preclude any other or further exercise of such right, power or
privilege.
SECTION 12. Severability. In the event that any provision of this
Agreement is determined by a court of competent jurisdiction to be invalid or
unenforceable in any respect, the parties will amend this Agreement to provide a
substitute provision which as nearly as possible carries out the intent of the
provision so held invalid or unenforceable; provided, however, that no such
amendment will in any way materially increase the obligation of either party
under this Agreement. Any such determination of invalidity or unenforceability
will not affect such provision in any other respect or affect any other
provision of this Agreement all of which will remain in full force and effect.
SECTION 13. Notices. All notices and other communications under this
Agreement will be in writing and will be duly given (i) upon delivery if
delivered personally with signed receipt acknowledging delivery; or (ii) upon
dispatch if telexed (with answerback confirmation) or telegraphed (and if
telegraphed confirmed by first-class mail as hereinafter provided); or (iii) if
mailed, by first class mail, postage prepaid, ten business days after date of
mailing, addressed as follows:
(a) If to the Company
Genesis Energy, L.L.C.
One Xxxxx Center, Suite 3200
500 Dallas
Xxxxxxx, Xxxxx 00000
Attention: President
(b) If to Executive
at such address as appears on the records of the Company
or to such other address as a party may from time to time
designate in the manner heretofore provided.
SECTION 14. Governing Law and Jurisdiction. This Agreement and the
obligations of the parties hereunder will be governed by and construed in
accordance with the substantive laws of the
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State of Texas without regard to any conflict of law rules. Each party consents
to the jurisdiction of the courts located in Xxxxxx County, Texas with respect
to any action arising hereunder.
SECTION 15. Assignment. This Agreement, and any rights or obligations
hereunder, may not be assigned by either party hereto without written consent of
the other; provided, however, that the Company may assign this Agreement to
Genesis MLP, Genesis OLP, an affiliate of the Company which has succeeded to all
or substantially all of the business of the Company or to a third party
acquiring all or substantially all of the business, equity or assets of the
Company.
SECTION 16. No Third Party Beneficiaries. No person other than Executive
and his beneficiaries on the one hand and the Company or its successors and
assigns on the other hand shall be made a party to this Agreement directly or
indirectly or have any rights or benefits under this Agreement.
SECTION 17. Captions. The titles, captions and headings in this Agreement
are inserted for convenience of reference only and are not intended to form a
part of, or to affect the meaning or interpretation of, this Agreement.
SECTION 18. Execution in Counterparts. This Agreement may be executed in
one or more counterparts, all of which will be considered one and the same
Agreement, and will become a binding Agreement when one or more counterparts
have been signed by each of the parties and delivered to the other party.
SECTION 19. Entire Agreement. This Agreement constitutes the entire
agreement between Executive and the Company concerning the subject matter hereof
and supersedes all previous negotiations, commitments and writings with respect
to such subject matter.
SECTION 20. Advice of Counsel. Executive represents and warrants that
Executive has been advised by competent counsel of his own selection as to the
meaning and significance of this Agreement and all of the terms hereof.
______________________________
GENESIS ENERGY, L.L.C.
By: BASIS PETROLEUM, INC.
As Member
By:______________________________________
Xxxxxxx X. Xxxxx, Chairman, President
and Chief Executive Officer
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EXHIBIT A
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________________,199_____
[Name]
[Address]
[Address]
Dear [Name]:
This will confirm that your employment at Genesis Energy, L.L.C. (the
"Company") was terminated effective ______________________________, 199_____.
Pursuant to that certain Employment Agreement between the Company and you dated
as of November , 1996 (the "Employment Agreement"), the Company has
agreed that, in addition to your salary and accrued vacation time through
______________________________, 199_____, it will pay you the Initial Term
Termination Compensation or Extension Term Termination Compensation, as
applicable (as defined in and determined and payable in accordance with the
Employment Agreement).
As a condition to the receipt of the Initial Term or Extension Term
Termination Compensation and in consideration thereof, you have agreed, and
hereby agree (i) that the payment of the Termination Compensation, and your
salary and accrued vacation through the above specified date of termination
shall be full settlement of all compensation due to you by the Company, Genesis
MLP and Genesis OLP and their affiliates, (ii) to release the Company, Genesis
MLP and Genesis OLP and each of their officers, directors and employees and all
of their subsidiaries and affiliates and their directors, officers and employees
from any claims of any kind whatsoever, except as provided herein, (iii) to
maintain the confidentiality of all information concerning the business of the
Company, Genesis MLP and Genesis OLP and their subsidiaries and affiliates that
you have received in the course of your employment with the Company and its
affiliates except information which is a matter of public record or is generally
known in the trade and (iv) at the request of the Company or any of its
subsidiaries or affiliates, at any time during the six-year period ending on the
sixth anniversary of the above specified date of termination, to give testimony
at or pursuant to any judicial, arbitral, administrative or other judicial or
quasi-judicial proceedings, including depositions and other pretrial evidentiary
proceedings and to cooperate and assist such companies in the preparation,
prosecution or defense of any such proceedings for reasonable periods of time.
In consideration of your agreement specified in subprovision (iv) above, the
Company agrees to reimburse you for the expenses and out of pocket costs which
you incur in connection with the services to be rendered described in
subprovision (iv) above.
This release and waiver includes but is not limited to any rights or
claims under federal, state or local law, statutory or decisional, for wrongful
or abusive discharge or for any personal injury or tort, for breach of any
contract, or for discrimination based upon race, color, ethnicity, sex, age,
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national origin, religion, disability, or any other unlawful criterion or
circumstance, including without limitation rights or claims under the Age
Discrimination in Employment Act of 1967, as amended, including the Older
Workers Benefit Protection Act of 1990 ("ADEA") (except that you do not waive
ADEA rights or claims that may arise after the date of this agreement). Your
signature below will also constitute confirmation that you have been given at
least 21 days within which to consider this release and its consequences, and
that you have been advised prior to signing this agreement to consult with an
attorney or any personal or financial advisor you choose.
For a period of seven days following the execution of this agreement
and release (the "Revocation Period"), you may revoke this agreement and
release. In the event of such revocation, the Initial Term or Extension Term
Termination Compensation will not be paid to you and this agreement and release
will be null and void.
Kindly sign and return a copy of this letter in confirmation of the
foregoing.
Very truly yours,
GENESIS ENERGY, L.L.C.
By: BASIS PETROLEUM, INC.
As Member
By:______________________________________
Duly Authorized Officer
Confirmed:
___________________________
[Name]
___________________________
Date
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