EXHIBIT 10.2
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement"), is entered into
as of October 29, 1999, by and between Genesis Energy, L.L.C., a
Delaware limited liability corporation (the "Company"), and Xxxx
X. Xxxxxx (the "Executive") who is employed as Chief Executive
Officer and President.
WHEREAS, the Company's Board of Directors (the "Company
Board") and the Compensation Committee of the Company Board (the
"Committee") have determined that it is in the best interests of
the Company and its Members to assure that the Company will have
the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change in Control (as
defined herein) of the Company, a termination other than for
cause, the duties and responsibilities of the Executive are
substantially and materially changed, a reduction in salary
occurs or there is a change of greater than 75 miles in the
location of Executive's place of work (collectively, "Changed
Circumstances"); and
WHEREAS, the Company Board believes that it is imperative to
diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or
threatened Change in Control or Changed Circumstances, to
encourage the Executive's full attention and dedication to the
Company currently and in the event of any threatened or pending
Change in Control or Changed Circumstances, and to provide the
Executive with compensation arrangements upon a Change in Control
or Changed Circumstances which provide the Executive with
individual financial security and which are competitive with
those of other corporations.
WHEREAS, the Executive's employment contract with the
Company is due to expire on December 31, 1999 and the Company and
Executive desire not to extend the contract but desire to
continue the employment arrangement between the Company and
Executive with the protection afforded by this Agreement.
NOW, THEREFORE, in consideration of the premises and the
agreements herein contained, the receipt and sufficiency of which
are hereby acknowledged, the Company and Executive hereby agree
as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the following meanings (the singular includes
the plural, unless the context clearly indicates otherwise):
(a) A "Changed Circumstance" shall be deemed to have occurred on
any Change in Control, termination for any reason other than
cause, the duties and responsibilities of the Executive are
substantially and materially changed without the Executive's
agreement, a reduction in salary or there is a change of greater
than 75 miles in the location of Executive's place of work.
(b) A "Change in Control" shall be deemed to have
occurred on the earliest of the following dates:
(i) The date any entity or person (including a
"group" within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, or any comparable
successor provisions) shall have become the beneficial
owner of, or shall have obtained voting control over,
fifty percent (50%) or more of the then outstanding
shares of the Company; or
(ii) (1) The date the stockholders of Genesis
Energy, L.P. ("MLP") approve a definitive agreement to
sell or otherwise dispose of substantially all the
assets of the MLP, or to merge or consolidate the MLP
with or into another partnership or corporation, in
which the MLP is not the continuing or surviving
partnership or corporation or pursuant to which any
common shares of the MLP would be converted into cash,
securities or other property of another partnership or
corporation, other than a merger of the MLP in which
holders of common shares immediately prior to the
merger have the same proportionate ownership of common
stock of the surviving partnership or corporation
immediately after the merger as immediately before, or
(2) the date the Company closes on a binding agreement
to sell or otherwise transfer (including without
limitation by merger or consolidation) to one or more
unaffiliated entities or persons not less than a
majority of the outstanding interests in the Company.
(c) "Change in Control Date" shall be the date on
which a Change in Control occurs.
(d) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(e) "Termination Date" shall mean the date on which Executive's
employment with the Company is terminated, by the Company or a
Changed Circumstance occurs by way of closing a definitive
agreement or otherwise occurs without execution of a definitive
agreement in accordance with the definition of a "Changed
Circumstance" as set forth herein.
(f) "Termination for Cause" shall mean
(i) a conviction of any crime involving the misuse or
misappropriation of Company assets;
(ii) a material violation of Company policy;
(iii) a material violation of any rule or regulation of any
regulatory body to which the Company or any subsidiary
partnership is subject; or
(iv) a material breach by the Executive of Executives fiduciary
responsibilities to the Company.
2. Benefits upon Change in Control or Changed
Circumstance. At any time after a Change in Control or any
Changed Circumstance, the Company shall be required to provide
the following benefits to Executive:
(a) The Company shall pay to the Executive in a lump
sum in cash, concurrently with the Termination Date, the
aggregate of the following amounts:
(i) a cash lump sum payment of $270,000.00; and
(b) In addition to the cash benefits payable pursuant
to Section 2(a) hereof, all Phantom Units (as defined in the
Restricted Unit Plan) and similar awards granted to
Executive by the Company shall immediately vest on the
Termination Date, notwithstanding any existing vesting
schedule or other terms set forth in any plan or agreement
governing the term of such restricted stock awards and
similar awards.
(c) In the event the Executive elects to continue
medical and/or dental coverage under COBRA, the Company will
pay the required premiums for a period of six months.
(d) Any incentive compensation due in accordance with
any Incentive Compensation Plan then in effect.
(e) The Company shall make any payment required to be
made under this Agreement in cash and on demand. Any
payment required to be paid by the Company under this
Agreement which is not paid within five days of receipt by
the Company of Executive's demand therefor shall thereafter
be deemed delinquent, and the Company shall pay to Executive
immediately upon demand interest at the highest nonusurious
rate per annum allowed by applicable law from the date such
payment becomes delinquent to the date of payment of such
delinquent sum.
(f) In the event that there is any change to the Code
which results in the recodification of Section 280G (Excess
Parachute Payments) or Section 4999 of the Code, or in the
event that either such section of the Code is amended,
replaced or supplemented by other provisions of the Code of
similar import ("Successor Provisions"), then this Agreement
shall be applied and enforced with respect to such new Code
provisions in a manner consistent with the intent of the
parties as expressed herein, which is to assure that
Executive is in the same after-tax position and has received
the same benefits that he would have been in and received if
any taxes imposed by Section 4999 or any Successor
Provisions had not been imposed.
(g) As a condition to Executive receiving severance
compensation, the employee will execute a severance and
release agreement in the form attached hereto as Exhibit A
and will not compete against the Company for a period of six
months from the Termination Date.
(h) An Executive will not be prohibited from competing
against the Company for any period of time in the event the
Executive resigns, is terminated for cause, or is
involuntarily terminated and elects not to receive the
benefits described in this Section 2.
(i) Executive is employed as Company's Chief Executive
Officer and President. As President and Chief Executive
Officer, Executive will report directly to the Non-Executive
Chairman of the Board and the Board of Directors of the
Company and will have such duties and responsibilities with
respect to the Company, Genesis MLP and Genesis OLP as
customarily would be undertaken by the president and chief
executive officer of companies engaged in business similar
to, or competitive with, the Company. Executive will act in
the best interest of Company, Genesis MLP and Genesis OLP
and their subsidiaries and affiliates in the performance of
Executive's services and duties. Executive will not
actively engage in any other business or business activity,
without the prior consent of the Non-Executive Chairman of
the Board of Directors of the Company. 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 to the Company or otherwise materially
conflict with any policies which have been promulgated and
distributed by the Company.
(j) Executive shall not be entitled to any of the
benefits of this Agreement if Terminated for Cause as
defined herein.
4. Full Settlement. The Company's obligations to perform
hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the
Company may have against the Executive. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement. The
Company agrees to pay, to the fullest extent permitted by law,
all legal fees and expenses which the Executive may incur as a
result of any contest by the Company or others of the validity or
the enforceability of, or liability under, any provision of this
Agreement.
As consideration for Company entering into this Agreement
with Executive, Executive agrees to release and hold harmless
Company from any and all obligations that Company may otherwise
have to Executive pursuant to the terms of that certain
Employment Agreement with Executive dated November 15, 1996, as
amended.
5. Non-Exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plans,
programs, policies or practices provided by the Company or any of
its subsidiaries and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as
the Executive may have under any stock option, restricted stock
or other agreements with the Company or any of its subsidiaries
except for any benefit, bonus, incentive or right to which the
Executive would be entitled solely by reason of Sections 4, 5, 6
and 7 of the November 15, 1996 Agreement, the rights of the
Executive under which are released pursuant to Section 4 of this
Agreement... Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan,
policy, practice or program of the Company or any of its
subsidiaries on the Change in Control or Changed Circumstance
Termination Date shall be payable in accordance with such plan,
policy, practice or program provided, however, that the Executive
shall not be entitled to receive any amounts to which the
Executive would be entitled solely by reason of Sections 4, 5, 6
and 7 of the November 15, 1996 Agreement, the rights of the
Executive under which are released pursuant to Section 4 of this
Agreement.
6. Funding. The Company shall pay the benefits under this
Agreement out of its general assets pursuant to the terms of this
Agreement. There shall be no special fund out of which benefits
shall be paid, nor shall the Executive be required to make a
contribution as a condition of receiving benefits.
7. Tax Withholding. The Company may withhold or cause to
be withheld from any benefits payable under this Agreement all
federal, state, city or other taxes that are required by any law
or governmental regulation or ruling.
8. Notices. Any notice required or desired to be given
under this Agreement or other communications relating to this
Agreement shall be in writing and delivered personally or mailed,
return receipt requested, to the party concerned at the address
set forth below:
If to the Company: Genesis Energy, L.L.C.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Executive: At his residence address as
maintained by the Company in the
regular course of its business for
payroll purposes.
9. Entire Agreement. This Agreement contains the entire
agreement of the parties hereto with respect to severance
payments and supersedes any prior agreement, arrangement or
understanding, whether oral or written, between the Company and
Executive concerning severance payments.
10. Choice of Law. This Agreement shall be governed by,
and enforced according to, the laws of the State of Texas. The
invalidity of any provision shall be automatically reformed to
the extent permitted by applicable law and shall not affect the
enforceability of the remaining provisions hereof. Executive
hereby waives any objection which he may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out
of or relating to this Agreement brought in the District Court of
Xxxxxx County, State of Texas, or in the United States District
Court for the Southern District of Texas, and hereby further
waives any claims that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient
forum.
11. Assignment. The rights and obligations under this
Agreement of the Company and Executive may not be assigned,
except that the Company may, at its option, assign one or more of
its rights or obligations under this Agreement to any of its
subsidiaries or affiliates, provided that in each case the
Company shall remain responsible for its obligation hereunder.
12. Counterparts. This Agreement may be executed in
several identical counterparts, and by the parties hereto on
separate counterparts, and each counterpart, when so executed and
delivered, shall constitute an original instrument, and all such
separate counterparts shall constitute but one and the same
instrument.
13. Modification. This Agreement may be modified only by
written agreement signed by Executive and by the President or
Secretary of the Company. The failure to insist upon compliance
with any provision hereof shall not be deemed a waiver of such
provision or any other provision hereof.
14. Term. This Agreement shall commence as of October 29,
1999 and shall terminate on December 31, 2000; provided, however,
that if any Change of Control or Changed Circumstance occurs
between December 31, 2000 and July 1, 2001 then the provisions of
this Agreement shall be applicable to the benefit of Executive.
IN WITNESS WHEREOF, the undersigned parties have executed
this Agreement effective as of the date first written above.
GENESIS ENERGY, L.L.C.
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
Chief Financial Officer
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
President and CEO
