EXHIBIT 10.10
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 Xxxx X. Xxxxxx
("Executive").
RECITALS:
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 Senior Vice President, Crude Oil 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 Senior Vice
President, Crude Oil 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 Senior Vice President, Crude Oil,
Executive will report directly to the Executive Vice President, Marketing and
Operations and will have such duties and responsibilities with respect to the
Company, Genesis MLP and Genesis OLP as customarily would be undertaken by the
senior vice president, crude oil 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 $16,667.00 for the partial year ending December 31, 1996 and will pay
Executive an annual salary of $200,000.00 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 be 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 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.
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, excercisable 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.
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 chief financial officers 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 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.
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 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
Xxxx X. Xxxxxx
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 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.
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
GENESIS ENERGY, L.L.C.
By: BASIS PETROLEUM, INC.
As Member
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxx, Chairman, President
and Chief Executive Officer
