Exhibit 10.60
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of March 1 1999, by and between Petro Stopping
Centers, L.P., a Delaware limited partnership (the "Company") and Xxxx Xxxxxxx
("Executive").
IN CONSIDERATION of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive and
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Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
2. Term. The period of employment of Executive by the Company
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hereunder (the "Employment Period") shall commence on April 1, 1999 (the
"Commencement Date") and shall end on the last date of the fourth calendar year
following the Commencement Date. The Employment Period may be sooner terminated
by either party in accordance with Section 6 of this Agreement.
3. Position and Duties. During the Employment Period, Executive's
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duties and responsibilities shall be consistent with the position of Senior Vice
President of Operations or with a similar position of equivalent responsibility
and shall include those that are assigned to Executive by the Chief Executive
Officer or President of the Company during the Employment Period.
Notwithstanding the foregoing, if the individual serving as President of the
Company, as of the date hereof (the "Current President"), ceases to serve in
such capacity during the Employment Period and another individual (other than
Executive) is selected to serve in that capacity, then Executive shall promptly
be promoted to the position of Executive Vice President and shall have such
duties and responsibilities as are customary for someone of that position.
Executive shall devote substantially all of his working time, attention and
energies during normal business hours (other than absences due to illness or
vacation) to the performance of his duties for the Company.
4. Place of Performance. The principal place of employment of
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Executive shall be at the Company's principal executive offices in El Paso,
Texas or at such other place as the Board of Directors of the Company (the
"Board") shall determine the principal executive offices to be.
5. Compensation and Related Matters.
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(a) Base Salary. During the Employment Period, the Company shall pay
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Executive a base salary at the rate of not less than $189,600 per year ("Base
Salary"). Executive's Base Salary shall be paid in approximately equal
installments in accordance with the Company's customary payroll practices.
Executive's Base Salary shall be subject to annual review by the compensation
committee of the Board for possible increase. If Executive's Base Salary is
increased by the Company, such increased Base Salary shall then constitute the
Base
Salary for all purposes of this Agreement. Executive's Base Salary shall not be
decreased at any time during the Employment Period without his direct written
consent.
(b) Equity.
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(i) Prior to the date hereof, Executive received options to
purchase common partnership interests of the Company ("Options") under
terms and conditions as set forth in the option agreement(s) by and between
the Company and Executive (the "Option Agreement"). Except as set forth is
clause (ii) below, this Agreement shall have no effect with respect to such
Options and the terms and conditions of such Options will be governed under
the Option Agreement.
(ii) If Xxxxx X. Xxxxxxxx (the "Xxxxxxxx") receives a bona
fide offer from a third party to transfer any of his interests in the
Company (the "Offered Units") which Xxxxxxxx desires to accept, then
Xxxxxxxx must first give notice in writing to such effect (a "Tag-Along
Notice") to Executive. The Tag-Along Notice shall set forth the name and
address of the proposed purchaser, the number of Offered Units Xxxxxxxx
desires to sell, the purchase price per unit, and any other material terms
and conditions of the third party offer. Upon receipt of the Tag-Along
Notice, Executive shall have the right, exercisable by written notice to
Xxxxxxxx within thirty (30) days after receipt of the Tag-Along Notice, to
elect to participate in the proposed sale of the Offered Units to the third
party. If Executive so elects, he shall have the right to sell in the
proposed sale that number of units owned by him equal to the product
obtained by multiplying (A) the number of units owned by Executive by (B) a
fraction, the numerator of which is the number of units to be sold by
Xxxxxxxx in the proposed sale and the denominator of which is the number of
units owned by Xxxxxxxx. Such sale shall be made at the highest price per
unit and on the same terms and conditions specified in the Tag-Along
Notice. Failure of the Executive to respond within such 30-day period shall
be deemed an election by Executive not to participate in the proposed sale.
Notwithstanding any other provision contained herein, Executive
acknowledges and agrees that the duties and obligations set forth in this
clause (ii) are that of Xxxxxxxx and Executive, and the Company shall have
no liability with respect to any of the acts (or failures to act) that may
occur under this clause (ii).
(c) Signing Bonus. Upon execution of this agreement, Executive shall
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be entitled to a bonus (the "Signing Bonus") of twenty-five thousand dollars
($25,000). The Company shall pay to the Executive an additional amount such that
the net amount retained by the Executive, after deduction of any federal, state
or local tax, shall be equal to twenty-five thousand dollars ($25,000). The
Signing Bonus will be paid in a lump sum upon execution of this Agreement or as
soon as practicable thereafter.
(d) Incentive Compensation.
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(i) Beginning with calendar year 1999, Executive shall annually
be eligible to receive a bonus (the "Bonus") pursuant to a schedule to be
mutually agreed upon between the Company and Executive; provided, that, the
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amount of such Bonus and
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the performance criteria relating thereto shall be no less
favorable than those set forth on Schedule A hereof.
(ii) Each Bonus shall be paid 10 days following the rendering of
audited financial statements for the relevant calendar year (the "Payment
Date").
(e) Expenses. The Company shall promptly reimburse Executive for all
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reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company.
(f) Vacation. Executive shall be entitled to four (4) weeks vacation
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per year for every year during the Employment Period.
(g) Welfare, Pension and Incentive Benefit Plan. During the Employment
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Period, Executive shall be entitled to participate in and be covered under all
the welfare benefit plans or programs maintained by the Company from time to
time for the benefit of its senior executives, including, without limitation,
the executive medical program, and all medical, hospitalization, dental,
disability, accidental death and dismemberment and travel accident insurance
plans and programs In addition, during the Employment Period, Executive shall be
eligible to participate in all pension, retirement, savings and other employee
benefit plans and programs maintained from time to time by the Company for the
benefit of its senior executives. Notwithstanding the foregoing, the Company
will provide a matching contribution of 50% of the first 4% of Executive's
compensation contributed to the Company's deferred compensation plan for senior
executive officers of the Company.
(h) Country Club. During the Employment Period, the Company shall pay
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Executive's membership dues for membership at a country club of Executive's
choosing in an amount not to exceed $4,000 per year.
(i) Additional Equity Compensation. Executive shall participate in any
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other Company equity incentive plan consistent with his position that may be
adopted by the Company during the term of this Agreement;
(j) Disability Insurance. The Company shall provide Executive with
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long-term disability insurance coverage with benefits at a rate of 66-2/3% of
Base Salary through age sixty-five (65), less any disability benefits paid under
any group long-term disability plan of the Company.
6. Termination. Executive's employment hereunder shall terminate upon
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the expiration of the Employment Period and may be terminated during the
Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his
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death.
(b) Disability. If, as a result of Executive's incapacity due to
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physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an
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entire period of four (4) months or more during any six (6) consecutive month
period, and within thirty (30) days after written Notice of Termination is given
after such six (6) month period, Executive shall not have returned to the
substantial performance of his duties on a fulltime basis, the Company shall
have the right to terminate Executive's employment hereunder for "Disability",
and such termination in and of itself shall not be, nor shall it be deemed to
be, a breach of this Agreement.
(c) Cause. The Company shall have the right to terminate Executive's
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employment for Cause, and such termination in and of itself shall not be, nor
shall it be deemed to be, a breach of this Agreement. For purposes of this
Agreement, the Company shall have "Cause" to terminate Executive's employment
upon Executive's:
(i) Conviction of, or plea of guilty or nolo contendere to,
a felony; or
(ii) Willful and continued failure to use reasonable best
efforts to substantially perform his duties hereunder or to devote
substantially all of his working time, attention and energies during normal
business hours (other than absences due to illness or vacation) to the
performance of his duties hereunder (other than such failure resulting from
Executive's incapacity due to physical or mental illness or subsequent to
the issuance of a Notice of Termination by Executive for Good Reason) after
demand for substantial performance is delivered by the Company in writing
that specifically identifies the manner in which the Company believes
Executive has not used reasonable best efforts to substantially perform his
duties and Executive has not cured such failure to use reasonable best
efforts to substantially perform his duties within thirty (30) days of
receipt of the Company's written demand; or
(iii) Misconduct (including, but not limited to, a breach of the
provisions of Section 10) that is materially economically injurious to the
Company or to any entity in control of, controlled by or under common
control with the Company ("Affiliates").
(d) Good Reason. Executive may terminate his employment for "Good
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Reason" within one hundred and twenty (120) days after Executive has actual
knowledge of the occurrence, without the written consent of Executive, of one
of the following events that has not been cured within thirty (30) days after
written notice thereof has been given by Executive to the Company:
(i) A reduction by the Company in Executive's Base Salary or a
failure by the Company to pay any such amounts when due;
(ii) The failure of the Company to substantially provide any
material employee benefits or incentive compensation due to be provided to
Executive (other than any such failure not inconsistent with any express
provisions contained herein which failure affects all senior executive
officers);
(iii) The Company's failure to provide in all material respects
the indemnification set forth in Section 11 of this Agreement;
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(iv) A termination of employment by Executive for any reason or
no reason that occurs within ninety (90) days following the first
anniversary of a Change in Control;
(v) The failure of Executive to be appointed to the position
set forth in Section 3 or the assignment to Executive of duties materially
and adversely inconsistent with Executive's status as Senior Vice President
of Operations of the Company (or Executive Vice President of the Company,
if he is then serving in such capacity as provided for in Section 3 hereof)
or a material and adverse alteration in the nature of Executive's duties
and/or responsibilities, reporting obligations, titles, or authority; or
(vi) If the Current President ceases to serve in such capacity
and another individual (other than Executive), who is an employee of the
Company as of the date of this Agreement, is appointed to the position of
President of the Company.
Executive's right to terminate his employment hereunder for Good Reason shall
not be affected by his incapacity due to physical or mental illness.
Executive's continued employment during the one hundred and twenty (120) day
period referred to above in this paragraph (d) shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
(e) Without Cause. The Company shall have the right to terminate
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Executive's employment hereunder without Cause by providing Executive with a
Notice of Termination sixty (60) days prior to the date of termination of
employment, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement.
(f) Without Good Reason. Executive shall have the right to terminate
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his employment hereunder without Good Reason by providing the Company with a
Notice of Termination sixty (60) days prior to the date of termination of
employment, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement.
For purposes of this Agreement, a "Change in Control" of the Company means any
person, other than the partners as of January 30, 1997 (the "Closing") acquiring
more than 50% of the common partnership interests in the Company, or Petro
Holdings GP Corporation and Petro Holdings LP Corporation transferring more than
50% of their equity interests in the Company held as of the Closing to an
unrelated third party.
7. Termination Procedure.
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(a) Notice of Termination. Any termination of Executive's employment
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by the Company or by Executive during the Employment Period (other than
termination pursuant to Section 6(a)) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 14. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
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(b) Date of Termination. "Date of Termination" shall mean (i) if
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Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 6(b), thirty (30)
days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability. In the event
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Executive is disabled or his employment terminates during the Employment Period,
the Company shall provide Executive with the payments and benefits set forth
below. Executive acknowledges and agrees that the payments set forth in this
Section 8 constitute liquidated damages for termination of his employment during
the Employment Period.
(a) Termination by the Company without Cause or by Executive for Good
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Reason or failure by the Company to negotiate in good faith to renew the
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Agreement upon its expiration.
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(i) If Executive's employment is terminated by the Company without
Cause or by Executive for Good Reason, the Company shall pay to Executive
(A) his Base Salary and accrued vacation pay through the Date of
Termination, as soon as practicable following the Date of Termination; (B)
an amount equal to two (2) times Executive's then current Base Salary,
payable in a lump sum within ten (10) days after the Date of Termination,
or as soon as practicable thereafter; and (C) fifty thousand dollars
($50,000), payable in a lump sum within ten (10) days after the Date of
Termination, or as soon as practicable thereafter; or
(ii) If the Company fails to negotiate in good faith with
Executive to renew this Agreement upon its expiration and Executive's
employment is terminated because of such failure by the Company, then
Company shall pay to Executive (A) his Base Salary and accrued vacation pay
through the Date of Termination, as soon as practicable following a date to
be mutually agreed upon between the Company and Executive (the "Mutually
Agreed Termination Date"); (B) an amount equal to one (1) times Executive's
then current Base Salary, payable in a lump sum within ten (10) days after
the Mutual Agreed Termination Date, or as soon as practicable thereafter;
and (c) fifty thousand dollars ($50,000), payable in a lump sum within ten
(10) days after the Mutually Agreed Termination Date, or as soon as
practicable thereafter; and
(iii) If Executive's employment is terminated such that Section
8(a)(i) or Section 8(a)(ii) shall apply, then the Company shall maintain in
full force and effect, for the continued benefit of Executive, his spouse
and his dependents for a period of twelve (12) months following the Date of
Termination the medical, hospitalization, dental, and life insurance
programs in which Executive, his spouse and his dependents were
participating immediately prior to the Date of Termination at the level in
effect and upon substantially the same terms and conditions (including,
without limitation, contributions required by Executive for such benefits)
as existed immediately prior to the Date of Termination, provided, that, if
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Executive, his spouse or his dependents cannot continue to
participate in the Company programs providing such benefits, the Company
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shall arrange to provide Executive, his spouse and his dependents with the
economic equivalent of such benefits which they otherwise would have been
entitled to receive under such plans and programs ("Continued Benefits"),
provided, that, such Continued Benefits shall terminate on the date or
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dates Executive receives equivalent coverage and benefits, without waiting
period or pre-existing condition limitations, under the plans and programs
of a subsequent employer (such coverage and benefits to be determined on a
coverage by coverage or benefit by benefit, basis); and
(iv) The Company shall reimburse Executive pursuant to Section
5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(v) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company; and
(vi) Executive shall be entitled to the Bonus, determined in
accordance with Section 5(d), for the year in which employment is
terminated that Executive would have received had he remained employed
through the Payment Date for such Bonus, pro rated to the Date of
Termination.
(b) Cause or By Executive Without Good Reason. If Executive's
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employment is terminated by the Company for Cause or by Executive (other than
for Good Reason):
(i) The Company shall pay Executive his Base Salary and, to the
extent required by law or the Company's vacation policy, his accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination; and
(ii) The Company shall reimburse Executive pursuant to Section
5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment, unless such termination resulted from a
misappropriation of Company funds; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(c) Disability. During any period that Executive fails to perform his
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duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), Executive shall continue to receive his full Base Salary
set forth in Section 5(a) until his employment is terminated pursuant to Section
6(b), provided, however, that Executive's Base Salary shall be off-set on a
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dollar for dollar basis for each dollar Executive receives from Company provided
disability benefits. In the event Executive's employment is terminated for
Disability pursuant to Section 6(b):
(i) The Company shall pay to Executive his Base Salary and accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination, provided, however, that Executive's Base
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Salary shall be off-set on a
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dollar for dollar basis for each dollar Executive receives
from Company provided disability benefits; and
(ii) The Company shall reimburse Executive pursuant to Section
5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(d) Death. If Executive's employment is terminated by his death:
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(i) The Company shall reimburse Executive's beneficiary(ies),
legal representative(s), or estate, as the case may be, pursuant to Section
5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(ii) The Company shall pay in a lump sum to Executive's
beneficiary(ies), legal representatives or estate, as the case may be,
Executive's Base Salary through the Date of Termination and Executive's
beneficiary(ies), legal representative(s) or estate shall be entitled to
the Bonus, determined in accordance with Section 5(d), for the year in
which employment is terminated that Executive would have received had he
remained employed through the Payment Date for such Bonus, pro-rated to the
Date of Termination; and
(iii) The Company shall pay Executive's beneficiary(ies), legal
representative(s), or estate, as the case may be, a death benefit equal to
two (2) times his Base Salary; provided, that, such amount shall be off-set
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on a dollar for dollar basis (but not below zero) for each dollar
Executive's beneficiary(ies), legal representatives, or estate receive from
Company provided life insurance benefits covering Executive's life; and
(iv) Executive's beneficiary(ies), legal representative(s) or
estate, as the case may be, shall be entitled to any other rights,
compensation and benefits as may be due to any such persons or estate in
accordance with the terms and provisions of any agreements, plans or
programs of the Company.
(e) Certain Additional Payments By the Company. In the event of a
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Change of Control, if the Company is unable to satisfy the exemption for small
business corporations, as set forth in Section 280G(b)(5) of the Internal
Revenue Code of 1986, as amended (the "Code") and the applicable regulations
thereunder, and amounts payable under this Agreement constitute "excess
parachute payments" under Section 280G(b) of the Code and applicable
regulations, the following shall apply:
(i) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment, award, benefit or
distribution (or any acceleration of any payment, award, benefit or
distribution) by the Company or any entity which effectuates a change in
control to or for the benefit of Executive (the "Payments")
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would be subject to the excise tax imposed by Section 4999 of the Code, or
any interest or penalties are incurred by Executive with respect to such
excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then the
Company shall pay to Executive an additional payment (a "Gross-Up Payment")
in an amount such that after payment by Executive of all taxes (including
any Excise Tax) imposed upon the Gross-Up Payment, Executive retains an
amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax
imposed upon the Payments and (y) the product of any deductions disallowed
because of the inclusion of the Gross-Up Payment in Executive's adjusted
gross income and the highest applicable marginal rate of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made.
For purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to (i) pay federal income taxes at the highest marginal
rates of federal income taxes at the highest marginal rate of taxation for
the calendar year in which the Gross-Up Payment is to be made, (ii) pay
applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be made,
net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes and (iii) have
otherwise allowable deductions for federal income tax purposes at least
equal to those which could be disallowed because of the inclusion of the
Gross-Up Payment in Executive's adjusted gross income. Notwithstanding the
foregoing provisions of this Section 8(e)(i), if it shall be determined
that Executive is entitled to a Gross-Up Payment, but that the Payments
would not be subject to the Excise Tax if the Payments were reduced by an
amount that is less than 20% of the portion of the Payments that would be
treated as "parachute payments" under Section 280G of the Code, then the
amounts payable to Executive under this Agreement shall be reduced (but not
below zero) to the maximum amount that could be paid to Executive without
giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up
Payment shall be made to Executive. The reduction of the amounts payable
hereunder, if applicable, shall be made by reducing first the payments
under Section 8(a)(i) or Section 8(a)(ii), as the case may be, unless an
alternative method of reduction is elected by Executive. For purposes of
reducing the Payments to the Safe Harbor Cap, only amounts payable under
this Agreement (and no other Payments) shall be reduced. If the reduction
of the amounts payable hereunder would not result in a reduction of the
Payments to the Safe Harbor Cap, no amounts payable under this Agreement
shall be reduced pursuant to this provision.
(ii) Subject to the provisions of Section 8(e)(i), all
determinations required to be made under this Section 8(e), including
whether and when a Gross-Up Payment is required, the amount of such Gross-
Up Payment and the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that is
retained by the Company as of the date immediately prior to the Change in
Control (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and Executive within fifteen (15) business
days of the receipt of notice from the Company or Executive that there has
been a Payment, or such earlier time as is requested by the Company
(collectively, the "Determination"). In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, Executive may appoint another nationally
recognized public accounting firm to make the determinations required
hereunder (which accounting
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firm shall then be referred to as the Accounting Firm hereunder). All fees
and expenses of the Accounting Firm shall be borne solely by the Company
and the Company shall enter into any agreement requested by the Accounting
Firm in connection with the performance of the services hereunder. The
Gross-Up Payment under this Section 8(e) with respect to any Payments made
to Executive shall be made no later than thirty (30) days following such
Payment. If the Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with a written opinion to such
effect, and to the effect that failure to report the Excise Tax, if any, on
Executive's applicable federal income tax return will not result in the
imposition of a negligence or similar penalty. In the event the Accounting
Firm determineds that the Payments shall be reduced to the Safe Harbor Cap,
it shall furnish Executive with a written opinion to such effect. The
Determination by the Accounting Firm shall be binding upon the Company and
Executive.
(iii) As a result of the uncertainty in the application of Section
4999 of the Code at the time of the Determination, it is possible that
Gross-Up Payments which will not have been made by the Company should have
been made ("Underpayment") or Gross-Up Payments are made by the Company
which should not have been made ("Overpayment"), consistent with the
calculations required to be made hereunder. In the event that Executive
thereafter is required to make payment of any Excise Tax or additional
Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall
be promptly paid by the Company to or for the benefit of Executive. In the
event the amount of the Gross-Up Payment exceeds the amount necessary to
reimburse Executive for his Excise Tax, the Accounting Firm shall determine
the amount of the Overpayment that has been made and any such Overpayment
(together with interest at the rate provided in Section 1274(b)(2) of the
Code) shall be promptly paid by Executive (to the extent he has received a
refund if the applicable Excise Tax has been paid to the Internal Revenue
Service) to or for the benefit of the Company. Executive shall cooperate,
to the extent his expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contest or
disputes with the Internal Revenue Service in connection with the Excise
Tax.
9. Mitigation. Executive shall not be required to mitigate amounts
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payable under this Agreement by seeking other employment or otherwise, and there
shall be no offset against amounts due Executive under this Agreement on account
of subsequent employment except as specifically provided herein.
10. Confidential Information, Ownership of Documents, Non-Competition.
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(a) Confidential Information. Executive shall hold in a fiduciary
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capacity for the benefit of the Company all trade secrets and confidential
information, knowledge or data relating to the Company and its businesses and
investments, which shall have been obtained by Executive during Executive's
employment by the Company and which is not generally available public knowledge
(other than by acts by Executive in violation of this Agreement). Except as may
be required or appropriate in connection with his carrying out his duties under
this
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Agreement, Executive shall not, without the prior written consent of the Company
or as may otherwise be required by law or any legal process, or as is necessary
in connection with any adversarial proceeding against the Company (in which case
Executive shall use his reasonable best efforts in cooperating with the Company
in obtaining a protective order against disclosure by a court of competent
jurisdiction), communicate or divulge any such trade secrets, information,
knowledge or data to anyone other than the Company and those designated by the
Company or on behalf of the Company in the furtherance of its business or to
perform duties hereunder.
(b) Removal of Documents: Rights to Product. All records, files,
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drawings, documents, models, equipment, and the like relating to the Company's
business, which Executive has control over shall not be removed from the
Company's premises without its written consent, unless such removal is in the
furtherance of the Company's business or is in connection with Executive's
carrying out his duties under this Agreement and, if so removed, shall be
returned to the Company promptly after termination of Executive's employment
hereunder, or otherwise promptly after removal if such removal occurs following
termination of employment. Executive shall assign to the Company all rights to
trade secrets and other products relating to the Company's business developed by
him alone or in conjunction with others at any time while employed by the
Company.
(c) Non-Competition. During the employment of Executive with the
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Company pursuant to this Agreement and during any time within (I) a two year
period, if Executive receives the compensation provided for in Section 8(a)(i)
or (II) a one year period, if Executive's employment is terminated for any other
reason, including, but not limited to, as a result of a failure by the Company
to negotiate in good faith to renew the Agreement upon its expiration, after the
date of his termination of employment in accordance with this Agreement,
Executive agrees that without the Company's prior written consent, which may be
withheld in its absolute discretion, he will not, except as otherwise permitted
in the Partnership Agreement (as defined below), enter into, be engaged or
interested in, as a principal, stockholder, director, trustee, partner, officer,
agent, employee, consultant, independent contractor, or otherwise, any business
or undertaking which directly competes with the truck stop business in its
entirety, (i.e., it is acknowledged that if Executive undertakes employment
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with a component business of the truck stop business, that such employment will
not constitute competitive activity) of the Company, its affiliates or their
successors within any county where any of the Company, its affiliates, or their
successors are doing business, or has made definite plans for and has taken
steps preparatory to doing business, provided, however, that Employee's
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ownership of five percent (5%) or less of the capital stock of a public
company that competes with the Company shall not be prohibited by this covenant.
(d) Non-Solicitation. During the employment of Executive with the
----------------
Company pursuant to this Agreement and during any time within (I) a two year
period, if Executive receives the compensation provided for in Section 8(a) (i)
or (II) a one year period, if Executive's employment is terminated for any other
reason, including, but not limited to, as a result of a failure by the Company
to negotiate in good faith to renew the Agreement upon its expiration, after the
date of his termination of employment in accordance with this Agreement,
Executive agrees that without the Company's prior written consent, which may be
withheld in its absolute discretion, he will not, except as otherwise permitted
in the Partnership Agreement, (A)
11
call upon any person who is, at that time, an employee of the Company, any of
its affiliates or their successors in a managerial capacity for the purpose or
with the intent of enticing such employee away from or out of the employ of the
Company, any of its affiliates or their successors, or (B) solicit business from
any person or entity which is at that time a customer of the Company, any of its
affiliates or their successors.
(e) Injunctive Relief. In the event of a breach or threatened breach
-----------------
of this Section 10, Executive agrees that the Company shall be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, Executive acknowledging that damages would be
inadequate and insufficient.
(f) Continuing Operation. Except as specifically provided in this
--------------------
Section 10, the termination of Executive's employment or of this Agreement shall
have no effect on the continuing operation of this Section 10.
(g) Reformation. In the event that any of the provisions of this
-----------
Section 10 are not enforceable in accordance with their terms, Executive and the
Company agree that such Section shall be reformed to make such Section
enforceable in a manner which provides the Company the maximum rights permitted
by law.
11. Indemnification.
---------------
(a) General. The Company shall, to the extent provided in the Third
-------
Amended and Restated Limited Partnership Agreement of the Company dated as of
the Closing (the "Partnership Agreement"), and to the maximum extent permitted
by law, indemnify and hold harmless Executive from any and all losses, damages,
claims or expenses that may be asserted against Executive at any time in
connection with his services for the Company, his employment hereunder or that
may otherwise derive from Executive's employment as contemplated hereby.
(b) Insurance. The Company may, but shall not be required to,
---------
maintain such insurance for the protection of its officers and directors as is
appropriate for entities engaged in the Company's business.
12. Legal Fees and Expenses. If any contest or dispute shall arise
-----------------------
between the Company and Executive regarding any provision of this Agreement, the
Company shall reimburse Executive for all legal fees and expenses reasonably
incurred by Executive in connection with such contest or dispute, but only if
Executive is successful in respect of substantially all of Executive's claims
brought and pursued in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the resolution of
such contest or dispute (whether or not appealed) to the extent the Company
receives reasonable written evidence of such fees and expenses.
13. Successors: Binding Agreement.
-----------------------------
(a) Company's Successors. No rights or obligations of the Company
--------------------
under this Agreement may be assigned or transferred except that the Company
will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or
12
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as herein before defined and any successor to its business
and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) Executive's Successors. No rights or obligations of Executive
----------------------
under this Agreement may be assigned or transferred by Executive other than
his rights to payments or benefits hereunder, which may be transferred only
by will or the laws of descent and distribution. Upon Executive's death,
this Agreement and all rights of Executive hereunder shall inure to the
benefit of and be enforceable by Executive's beneficiary or beneficiaries,
personal or legal representatives, or estate, to the extent any such person
succeeds to Executive's interests under this Agreement. Executive shall be
entitled to select and change a beneficiary or beneficiaries to receive any
benefit or compensation payable hereunder following Executive's death by
giving the Company written notice thereof. In the event of Executive's
death or a judicial determination of his incompetence, reference in this
Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary(ies), estate or other legal representative(s). If Executive
should die following his Date of Termination while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts
unless otherwise provided herein shall be paid in accordance with the terms
of this Agreement to such person or persons so appointed in writing by
Executive, or otherwise to his legal representative(s) or estate.
14. Notice. For the purposes of this Agreement, notices, demands
------
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered either personally or
by United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
Xxxx Xxxxxxx
0000 Xxxxxx Xxxxx
Xx Xxxx, Xxxxx
00000
If to the Company:
Petro Stopping Centers, L.P.
Attention: General Counsel
0000 Xxxxxx Xxxxx
Xx Xxxx, Xxxxx
00000
with a copy to:
Xxxxxx X. Xxxxxx
13
Akin, Gump, Strauss, Xxxxx & Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be amended,
-------------
modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The respective rights
and obligations of the parties hereunder of this Agreement shall survive
Executive's termination of employment and the termination of this Agreement to
the extent necessary for the intended preservation of such rights and
obligations.
16. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. Entire Agreement. This Agreement, set forth the entire agreement
----------------
the parties hereto in respect of the subject matter contained herein and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of such
subject matter. Except as otherwise provided herein, any prior agreement of the
parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled.
18. Withholding. All payments hereunder shall be subject to any
-----------
required withholding of Federal, state and local taxes pursuant to any
applicable law or regulation.
19. Noncontravention. The Company represents that the Company is
----------------
not prevented from entering into, or performing this Agreement by the terms of
any law, order, rule or regulation, its by-laws or declaration of trust, or any
agreement to which it is a party, other than which would not have a material
adverse effect on the Company's ability to enter into or perform this Agreement.
20. Section Headings. The section headings in this Employment
----------------
Agreement are for convenience of reference only, and they form no part of this
Agreement and shall not affect its interpretation.
21. Severability. If this Agreement or any portion thereof is, or
------------
the transactions contemplated hereby are, found to be inconsistent or contrary
to any valid applicable laws or official orders, rules and regulations, the
inconsistent or contrary provision shall be null and void and such laws, orders,
rules and regulations shall control and, as so modified, this Agreement shall
continue in full force and effect; provided, however, that nothing herein
-------- -------
contained shall be
14
construed as a waiver of any right to question or contest any
such law, order, rule or regulation in any forum having jurisdiction.
22. Governing Law. The provisions of this Agreement shall be
-------------
construed in accordance with the laws of the State of Texas without regard to
its conflict of law principles.
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
PETRO STOPPING CENTERS, L.P.
By:
--------------------------------
------------------------------------
Xxxx Xxxxxxx
With respect to Section 5(b)(ii) only:
---------------------------------
Xxxxx X. Xxxxxxxx
16
SCHEDULE A
Incentive Compensation.
----------------------
(a) The Bonus shall be paid as a percent of Base Salary (as defined in Section
5(a) of the Employment Agreement), based upon the achievements of Target
EBITDA, as provided in accordance with the following table:
--------------------------------------------------------------------------------
TARGET EBITDA BONUS
------------- -----
--------------------------------------------------------------------------------
90% 20%
--------------------------------------------------------------------------------
95% 40%
--------------------------------------------------------------------------------
100% 60%
--------------------------------------------------------------------------------
105% 90%
--------------------------------------------------------------------------------
110% 120%
--------------------------------------------------------------------------------
In accordance with the above table, if EBITDA achieved for any calendar year
exceeds 90% Target EBITDA, but is less than 100% Target EBITDA, the Bonus shall
be such percentage of Base Salary between 20% and 60%, calculated on a straight-
line basis, as corresponds to the relative achievement of EBITDA, with 20%
corresponding to 90% Target EBITDA and 60% corresponding to 100% Target EBITDA.
If EBITDA achieved for any calendar year exceeds 100% Target EBITDA, but is less
than 110% Target EBITDA, the Bonus shall be such percentage of Base Salary
between 60% and 120%, calculated on a straight-line basis, as corresponds to the
relative achievement of EBITDA, with 60% corresponding to 100% Target EBITDA and
120% corresponding to 110% Target EBITDA. Notwithstanding the foregoing, if
greater than 110% Target EBITDA is achieved, the Board shall award an additional
Bonus beyond the formula Bonus provided above, in an amount that it shall
determine in its sole discretion.
(b) Target EBITDA shall be established annually by the Board, or, at
the discretion of the Board, by the Compensation Committee and in either event,
with the concurrence of Executive as to the amount of Target EBITDA thereby
established. In the event of an acquisition, disposition or other similar
extraordinary corporate event which would significantly alter the Target EBITDA
established for that year, the parties shall negotiate in good faith to set new
levels of Target EBITDA
17
