EXHIBIT 10.2
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement"), is entered into as of
June 1, 2001, by and between Genesis Energy, L.L.C., a Delaware limited
liability corporation (the "Company"), and Xxxx X. xxxXxxx (the
"Executive") who is employed as Executive Vice 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 Changed Circumstance (as defined herein); 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 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 Circumstances, and to provide the
Executive with compensation arrangements upon a Change in Circumstances
which provide the Executive with individual financial security and
which are competitive with those of other corporations.
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
if, at any time during the term of the Agreement, any of the following
occur: (i) the Executive is terminated for any reason other than
cause, (ii) the gathering and marketing business of Genesis Crude Oil,
L.P. is sold or substantially eliminated, (iii) New York Mercantile
Exchange memberships 445 and 119 are sold, (iv) the Executive's salary
is reduced, (v) the risk management function for the crude oil business
is substantially eliminated, or (vi) there is a change of greater than
50 miles in the location of Executive's place of work.
(b) "Changed Circumstances Date" shall be the effective date
for a Changed Circumstance.
(c) 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 closing date of any transaction to sell or
otherwise dispose of substantially all the assets of Genesis Energy,
L.P. (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 closing date of any transaction 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.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Executive Termination" shall be deemed to have occurred
if, between April 1, 2002 and that last day of this Agreement, the
Executives resigns within 90 days after the first day of a quarter and
on the first day of such quarter total trade credit available to the
Company in the form of Parent Guarantees and letters of credit
supporting management of the Company's crude oil position is less than
$200 million. Additionally, for the 90 days following April 1, 2002
only, an Executive Termination can also occur if total trade credit
available to the Company in the form of Parent Guarantees and letters
of credit supporting management of the Company's crude oil position is
less than $200 million on the first day of any of the preceding three
(3) quarters.
(f) "Termination" shall be deemed to have occurred upon a
Changed Circumstance or upon an Executive Termination.
(g) "Termination Date" shall mean the date of Termination.
(h) "Termination for Cause" shall mean:
a conviction of any crime involving the misuse or misappropriation of
Company assets;
(i) Executive receives written notice of a material
violation of Company policy that is not cured within 30 days;
(ii) a material violation of any rule or regulation of
any regulatory body to which the Company or any subsidiary partnership
is subject; or
(iii) a material breach by the Executive of Executive's
fiduciary responsibilities to the Company.
2. Benefits upon Termination. Upon the Executive's Termination,
the Company shall be required to provide the following benefits to
Executive:
(a) The Company shall pay to the Executive concurrently with
the Termination Date and subject to the terms of the Release attached
as Exhibit A, a cash lump sum payment of $350,000; 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 now
or in the future shall immediately vest on the Termination Date,
notwithstanding any 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 shall be paid whether or not
the employee is employed at the time of payment.
(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.
(h) Executive shall not be entitled to any of the benefits of
this Agreement if terminated for Cause as defined herein.
3. Executive is employed as Company's Executive Vice President,
Trading and Price Risk Management. As Executive Vice President,
Trading and Price Risk Management, Executive will report directly to
the 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 Executive Vice President,
Trading and Price Risk Management, 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 President 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.
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 that 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 Severance Agreement with
Executive dated October 29, 1999, as amended. If a Change in Control,
as defined in this Agreement, occurs on or before June 30, 2001, then
the benefits described in Section 2 of the Severance Agreement dated
October 29, 1999 will be paid to the Executive concurrently with such
Change in Control, as defined in this Agreement, and no benefits will
be paid pursuant to this Agreement.
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 to 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 Termination Date shall be payable in accordance with such plan,
policy, practice or program.
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
General Counsel
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 June 1, 2001, and
shall terminate on December 31, 2003.
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. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President & Chief Executive
Officer
By: /s/ Xxxx X. xxxXxxx
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Xxxx X. xxxXxxx
Executive Vice President
