EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") shall be effective as of
October 12, 1998 by and between Genesis Energy, L.L.C. (the "Company") and by
Xxxx X. Xxxxxxxxx (the "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 Chief Financial Officer for the Company.
C. Executive desires to obtain the benefits and incentives from the
Company of a written employment agreement having a term of two years.
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 Chief
Financial Officer of 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 a Term of two years beginning
on October 12, 1998, unless sooner terminated in accordance with the provisions
hereof. Anything herein to the contrary notwithstanding, this Agreement, and
Executive's employment hereunder, may be terminated at any time by the Company,
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.
Executive may terminate this Agreement at any time by providing Company with a
minimum of two weeks notice.
SECTION 3. Duties of Executive. As Chief Financial Officer, 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 chief financial officer of
companies engaged in business similar to, or competitive with, the Company.
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
President, CEO and 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 Base Annual Salary. Subject to the terms and conditions of this
Agreement, the Company will cause Executive to be paid an annual salary of
$150,000 (such annual salary hereinafter referred to as the "Base
Compensation"). Executive's 1998's salary will be paid at an annual rate of
$150,000 prorated from the first
day of employment through the end of the 1998 calendar year. The Base
Compensation will be reviewed by the Compensation Committee of the Board of
Directors of the Company in accordance with the scheduled meetings of the
Compensation Committee when such matters are reviewed by the Committee for the
Company.
4.2 Incentive Compensation and Benefits. Executive will be
eligible to participate in the Key Employees' Incentive Compensation Plan
subject to award by the Compensation Committee. Executive will be eligible to
participate in all of the Company's benefit plans effective on the first day of
employment. Prior service with Basis Petroleum, Inc. and Basis Clearing,
Inc. will be included for purposes of calculating vesting under the Company's
Profit Sharing & Retirement Savings Plan.
4.3 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:
(1) 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 amount under the Key Employees' Incentive Compensation
Plan, 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.
(2) Upon involuntary termination of Executive's employment by the
Company in accordance with Section 7.2 of this Agreement,
Termination Compensation (as hereinafter defined), if any,
will be paid in accordance with the provisions of Section 7.6.
All payments of Base Compensation, awards under the Key Employees' Incentive
Compensation Plan 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 employment, Executive will be
entitled to participate, subject to qualification requirements, in all of the
Company's benefit plans.
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 pre-termination 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; (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. 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 such action by Company takes place within one year of termination. 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
provision 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) significant 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, or (c) 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 due to Severance. In addition, if within the first
two years of employment, Executive's employment were to terminate as a direct
result of the sale of the General Partnership or as a result of Involuntary
Termination, then the Company will pay to Executive, Termination Compensation
equal to 12 months' of Base Compensation. As a condition of receipt of the
Termination Compensation described hereunder, Executive agrees to sign and
provide to Company a severance and release agreement in the form attached hereto
as Exhibit A.
7.4 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.
7.5. 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, and any benefits payable under the Key Employees' Incentive Compensation
Plan, no further payments will be due hereunder. In the event of the death of
Executive, any payment required to be made hereunder to Executive shall be made
to 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.
7.6 Termination Compensation.
(A) In the event the Company (i) terminates Executive's employment
during the Term of this Agreement for any reason other than Cause, including any
Involuntary Termination, or as provided in Section 7.3 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 12 months' of Base Compensation at the
level in effect at the time of termination. In addition, Executive will be
entitled to (a) such Incentive Compensation, if any, as may be payable to
Executive in accordance with any Incentive Compensation plan then in effect and
(b) in the event Executive elects to continue medical and/or dental coverage
under the provisions of the Consolidated Omnibus 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 of twelve months (the "Non-Compete Period"), 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 exchange) 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 obligation
and other matters relating to the conduct of such business comprise confidential
business information (the "Confidential Business Information") which is unique
and valuable to the Company. Executive further acknowledges that the use of
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.
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 monetary 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. Non-competition. 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 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 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: (b) If to Executive
Genesis Energy, L.L.C. Xxxx X. Xxxxxxxxx
500 Dallas
Suite 2500 at such address as appears
Xxxxxxx, XX 00000 on the records of the
Company
Attention: President
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 he 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 for 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 which 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. Xxxxxxxxx
------------------------
Xxxx X. Xxxxxxxxx
By: /s/ Xxxx X. xxxXxxx
---------------------------
Xxxx X. xxxXxxx, President & CEO
