Exhibit 10.26
MEMORANDUM OF AGREEMENT
made as of the 8th day of July, 1997
(hereinafter referred to as the "Agreement Date")
B E T W E E N:
XXXXX REFINING AND MARKETING, INC.,
a corporation incorporated
under the laws of Delaware
(hereinafter referred to as the "Corporation"),
OF THE FIRST PART
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Xxxxxx X. Xxxxxxx
of
Foristell, Missouri
(hereinafter referred to as the "Executive"),
OF THE SECOND PART.
WHEREAS the Corporation is a wholly-owned subsidiary of Xxxxx USA, Inc.
(hereinafter referred to as "Xxxxx USA");
AND WHEREAS the Corporation recognizes the valuable services that the
Executive has provided and is continuing to provide to the Corporation, Xxxxx
USA, and their affiliates, and believes that it is reasonable and fair to the
Corporation that the Executive receive fair treatment in the event of a Change
in Control (as hereinafter defined);
AND WHEREAS the Corporation considers the establishment and maintenance of
a sound and vital management to be essential to protecting and enhancing the
best interests of the Corporation, Xxxxx USA, and its shareholders;
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AND WHEREAS the Corporation recognizes that, in the circumstances of the
capital structure of Xxxxx USA, the risk of a Change in Control is high, and the
uncertainty and questions which a Change in Control may raise among management
could result in the departure or distraction of management personnel to the
detriment of the Corporation, Xxxxx USA, and its shareholders;
AND WHEREAS in the event of a Change in Control, there is a possibility
that the employment of the Executive would be terminated without cause or
adversely modified and executives of the Corporation have expressed concern in
that regard to the Corporation;
AND WHEREAS the Board has determined that it would be in the best interests
of Xxxxx USA and the Corporation to induce the Executive to remain in the employ
of Xxxxx USA, the Corporation and the Subsidiaries, by indicating that in the
event of a Change in Control, the Executive would have certain automatic and
guaranteed rights;
AND WHEREAS both the Corporation and the Executive wish formally to agree
as to the terms and conditions which will govern the termination or modification
of the employment of the Executive following a Change in Control or during a
Potential Change in Control;
NOW THEREFORE, in consideration of the premises hereof and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties agree as follows:
ARTICLE II
Recitals
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II.1 The parties agree, and represent and warrant to each other, that the
above recitals are true and accurate.
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ARTICLE III
Interpretation
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III.1 Unless elsewhere herein otherwise expressly provided or unless the
context otherwise requires, words importing the singular include the plural and
vice versa and words importing the masculine gender include the feminine and
neuter genders.
III.2 The headings of the Articles, sections, subsections, paragraphs, and
clauses herein are inserted for convenience of reference only and shall not
affect the meaning or construction hereof.
III.3 This Agreement shall be construed in accordance with the laws of the
State of Missouri, without regard to the conflict of law provisions of any
state. All disputes shall be litigated in St. Louis, Missouri.
III.4 If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of Law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party hereto. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties hereto as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
III.5 In this Agreement, unless the context otherwise requires, the
following terms shall have the following meanings, respectively:
(a) "Affiliate" means (i) any corporation, partnership, joint venture or other
entity during any period in which it beneficially owns at least thirty
percent of the voting power of all classes of stock of the Corporation
entitled to vote; and (ii) any corporation, partnership, joint venture or
other entity during any period in which at least a fifty percent voting or
profits interest is beneficially owned by
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the Corporation or by any entity that is an Affiliate by reason of clause
(i) next above.
(b) "Annual Salary" means the sum of:
(i) the annual salary of the Executive based upon the greater of (A) the
salary paid by or on behalf of Xxxxx USA and the Corporation for the
calendar year ended immediately preceding the date of the Change in
Control and (B) the salary which would have been payable by or on
behalf of Xxxxx USA and the Corporation to the Executive (based upon
the salary rate in effect immediately preceding the Change in Control)
for the 12 months immediately following the Change in Control; and
(ii) an amount equal to the greater of:
(A) the agreed yearly minimum bonus which is payable to the Executive
by Xxxxx USA and the Corporation under the compensation terms in
effect immediately prior to the date of the Date of Termination;
or
(B) the average of the yearly bonus amounts paid to the Executive by
Xxxxx USA and the Corporation over the last two fiscal years of
the Corporation ended immediately preceding the date of the Date
of Termination.
(c) "beneficial ownership" shall be determined in accordance with Rule 13d-3
issued under the U.S. Securities Exchange Act of 1934.
(d) "Board" means the board of directors of the Corporation.
(e) "Cause" means a determination by the Company that any of the following has
occurred:
(i) wilful and continued failure by the Executive to substantially perform
the Executive's duties with the Corporation (other than any such
failure resulting from his incapacity due to physical or mental
illness);
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(ii) wilful engaging by the Executive in misconduct which is materially
injurious to Xxxxx USA, the Corporation, or the Affiliates,
monetarily or otherwise; or
(iii) the conviction of the Executive of a criminal offense involving
dishonesty or other moral turpitude;
provided that no act, or failure to act, on the Executive's part shall be
considered "wilful" unless the Company determines that such act or failure
to act by the Executive was in bad faith and was without reasonable belief
by the Executive that such act or failure to act was in the best interests
of Xxxxx USA, the Corporation, or the Affiliates. For purposes of paragraph
(i) above, the phrase "wilful and continued failure by the Executive to
substantially perform the Executive's duties with the Corporation" shall
include, without limitation, any violation of paragraph IV.2(a).
(f) "Change in Control" means the first date upon which (I) a TrizecHahn
Corporation Change in Control shall have occurred, if on such date Tiger
shall beneficially own less than 20% of the number of shares of capital
stock of Xxxxx USA held by it as of the Agreement Date; or (II) a Xxxxx
Change in Control shall have occurred.
(g) "TrizecHahn Corporation Change in Control" means the occurrence of any of
the following events described in paragraph (i) through (vi) below:
(i) TrizecHahn Corporation - Voting/Board Control.
The date upon which the following three conditions shall have been
satisfied:
(A) the MVS shall have been converted into SVS in accordance with
their terms (the "Conversion");
(B) a person or group (other than Mr. Xxxxx Xxxx) holds shares and/or
other securities which, directly or after conversion, exercise or
exchange thereof, would entitle the holders thereof to cast 20%
or more of the votes attached to the outstanding Voting Shares;
and
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(C) a change in the composition of the TrizecHahn Corporation Board
within two years after the date of Conversion such that the
directors of TrizecHahn Corporation in office immediately before
the date of Conversion and the directors recommended for election
or elected to succeed such directors by a majority of such
directors cease to constitute a majority of the TrizecHahn
Corporation Board;
provided, however, that a TrizecHahn Corporation Change in Control
will be deemed to have occurred under this paragraph (i) only if, on
the date on which such TrizecHahn Corporation Change in Control would
otherwise have occurred, TrizecHahn Corporation is a Substantial Owner
of Xxxxx USA.
(ii) TrizecHahn Corporation - Voting.
The date upon which the following two conditions shall have been
satisfied:
(A) the Conversion shall have occurred; and
(B) a person or group (other than Mr. Xxxxx Xxxx) holds shares and/or
other securities which, directly or after conversion, exercise or
exchange thereof, would entitle the holders thereof to cast 35%
or more of the votes attached to the outstanding Voting Shares;
provided, however, that a TrizecHahn Corporation Change in Control
will be deemed to have occurred under this paragraph (ii) only if, on
the date on which such TrizecHahn Corporation Change in Control would
otherwise have occurred, TrizecHahn Corporation is a Substantial Owner
of Xxxxx USA.
(iii) TrizecHahn Corporation - MVS/Board.
The date upon which the following two conditions shall have been
satisfied:
(A) a majority of the MVS are beneficially owned, or control or
direction is exercised over a majority of the MVS, by any person
or group,
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other than Mr. Xxxxx Xxxx or a member of his immediate family who
is a Canadian within the meaning of the Investment Canada Act
("Change in Ownership"); and
(B) there is a change in the composition of the TrizecHahn
Corporation Board within two years after the date of the Change
in Ownership and the directors recommended for election or
elected to succeed such directors by a majority of such directors
such that the directors in office immediately before the date of
the Change in Ownership cease to constitute a majority of the
TrizecHahn Corporation Board;
provided, however, that a TrizecHahn Corporation Change in Control
will be deemed to have occurred under this paragraph (iii) only if, on
the date on which such TrizecHahn Corporation Change in Control would
otherwise have occurred, TrizecHahn Corporation is a Substantial Owner
of Xxxxx USA.
(iv) TrizecHahn Corporation - Merger/Board.
The date upon which the following two conditions shall have been
satisfied:
(A) the shareholders of TrizecHahn Corporation shall have approved
(I) an amalgamation, merger, or any other business combination or
consolidation of TrizecHahn Corporation with any other
corporation (other than a TrizecHahn Corporation Successor,
TrizecHahn Corporation Subsidiary, Xxxxx USA, the Corporation, or
one or more of the Subsidiaries), (II) a plan for the liquidation
of TrizecHahn Corporation, (III) an agreement for the sale or
disposition of all or substantially all of the assets of
TrizecHahn Corporation; and
(B) within two years following a transaction referred to in paragraph
(iv)(A) above, a majority of the Board of the amalgamated or
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merged entity or successor entity into which
TrizecHahn Corporation was liquidated or which acquired
substantially all of the assets of TrizecHahn Corporation is
not comprised of individuals who were directors of TrizecHahn
Corporation immediately before the event referred to in
paragraph (iv)(A) above, or directors recommended for election
or elected to succeed such directors by a majority of such
directors;
provided, however, that a TrizecHahn Corporation Change in Control
will be deemed to have occurred under this paragraph (iv) only if,
on the date on which such TrizecHahn Corporation Change in Control
would otherwise have occurred, TrizecHahn Corporation is a
Substantial Owner of Xxxxx USA.
(v) Increase in Ownership/Board Change.
The date upon which the following two conditions have been satisfied:
(A) any Person (excluding TrizecHahn Corporation, any TrizecHahn
Corporation Subsidiary, and any person who satisfies the requirements
set forth in Rule 13d-1(b)(i) and (ii) issued under the U.S.
Securities Exchange Act of 1934 (relating to certain persons acquiring
securities in the ordinary course of business and not with the purpose
or effect of changing or influencing the control of the issuer)) has
beneficial ownership of the Voting Power of Xxxxx USA that is in
excess of the greater of:
(I) 20% of the Voting Power of Xxxxx USA; or
(II) the Voting Power of Xxxxx USA then held by TrizecHahn
Corporation;
(B) more than 50% of the Board of Directors of Xxxxx USA is comprised
of persons who are neither executive officers of TrizecHahn
Corporation or any TrizecHahn Corporation Subsidiary, nor members of
the board of directors of TrizecHahn Corporation.
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(vi) Increase in Ownership.
The date upon which any Person (excluding TrizecHahn Corporation and
any TrizecHahn Corporation Subsidiary) has beneficial ownership of the
Voting Power of Xxxxx USA that is in excess of the greater of:
(I) 35% of the Voting Power of Xxxxx USA; or
(II) the Voting Power of Xxxxx USA then held by TrizecHahn
Corporation.
(h) "Xxxxx Change in Control" means the occurrence of any of the events
described in paragraphs (i) through (iii) below:
(i) Merger of Xxxxx USA.
The date of approval by the shareholders of Xxxxx USA of a
reorganization, merger or consolidation of Xxxxx USA, in each case,
with respect to which all or substantially all of the individuals and
entities who were the respective beneficial owners of the common stock
and voting securities of Xxxxx USA immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation (or following a series of
prearranged related transactions), beneficially own more than 50% of,
respectively, the then outstanding shares of common stock or the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization, merger
or consolidation.
(ii) Liquidation of Xxxxx USA.
The date of approval by the shareholders of Xxxxx USA of the sale or
other disposition of all or substantially all of the assets of Xxxxx
USA; in each case, with respect to which all or substantially all of
the individuals and entities who were the respective beneficial owners
of the common stock and voting securities of Xxxxx USA immediately
prior to such sale or disposition do not, following such sale
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or disposition (or following a series of prearranged related
transactions), beneficially own more than 50% of, respectively,
the then outstanding shares of common stock or the combined
voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may
be, of the entity or entities acquiring all or substantially all
of the assets of Xxxxx USA.
(iii) Disposition of the Corporation.
The first date on which Xxxxx USA does not beneficially own more
than 50% of the total voting power of the outstanding capital
stock of the Corporation.
(i) "Xxxxx USA" means Xxxxx USA, Inc. and includes any corporation,
partnership, joint venture or other entity that succeeds to the
interests of Xxxxx USA, Inc.
(j) "Corporation" means Xxxxx Refining and Marketing, Inc. and includes
any corporation, partnership, joint venture or other entity that
succeeds to the interests of Xxxxx Refining and Marketing, Inc.
(k) "Date of Termination" means the first date on which the Executive is
employed by neither Xxxxx USA, the Corporation, nor any Subsidiary.
(l) "Disability" means the physical or mental illness of the Executive
resulting in the Executive's absence from his full time duties with
the Corporation for more than nine consecutive months and failure by
the Executive to return to full time performance of his duties within
thirty days after written demand by the Corporation to do so given at
any time after such nine-month period.
(m) "Good Reason" means the occurrence of any of the following events
without the Executive's written consent:
(i) the assignment to the Executive of a position that is not a
senior management position; provided, however, this paragraph (i)
shall not prevent the Executive being assigned a senior
management position: (A) with a Subsidiary of the Corporation or
Xxxxx USA; (B)
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with responsibilities that are different from the responsibilities
assigned to the Executive immediately prior to the time of the Change
in Control; or (C) with reporting relationships that are different
from the Executive's reporting relationships immediately prior to the
Change in Control. For purposes of this paragraph (i), the term
"senior management position" shall mean any position of the
Corporation, Xxxxx USA or any Subsidiary, or any other position with
the Corporation, Xxxxx USA or any Subsidiary, that is substantially
comparable (in status and responsibility) to the executive's current
position with the Corporation, Xxxxx USA or any Subsidiary, excluding
for this purpose an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Corporation
promptly after receipt of written notice thereof given by the
Executive;
(ii) the Corporation requiring the Executive to be based at any office or
location other than in the Greater St. Louis Area (or, if different,
the metropolitan area in which the Executive's principal office is
located immediately prior to the Change in Control); provided,
however, that Good Reason shall not be deemed to exist under this
paragraph (ii) if the relocation is in connection with a change in
the Executive's position at the Company, but only if either (A) the
change in position is a promotion, compared with the Executive's rank
immediately prior to the Change in Control; or (B) the change in
position is not a demotion (compared with the Executive's rank
immediately prior to the Change in Control, and provides a
developmental opportunity which may lead to a promotion;
(iii) any other action by the Executive's employer purporting to result in
a Date of Termination other than for Cause, Disability or death.
(n) "Greater St. Louis Area" means any location within 30 miles (traveling by
automobile) of 0000 Xxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx.
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(o) "group" means any person or company acting jointly or in concert with any
other person or company and for such purposes "acting jointly or in
concert" shall be interpreted in accordance with subsection 91(a) of the
Securities Act (Ontario).
(p) "TrizecHahn Corporation" means TrizecHahn Corporation Corporation, a
corporation incorporated under the laws of the Province of Ontario, and any
TrizecHahn Corporation Successor.
(q) "TrizecHahn Corporation Board" means the board of directors of TrizecHahn
Corporation.
(r) "TrizecHahn Corporation Subsidiary" means any corporation, partnership,
joint venture or other entity during any period in which at least a fifty
percent voting or profits interest is beneficially owned by TrizecHahn
Corporation.
(s) "TrizecHahn Corporation Successor" means any corporation, partnership,
joint venture or other entity which satisfies either (or both of) clause
(i) and (ii):
(i) Mr. Xxxxx Xxxx has beneficial ownership that is in excess of the
greater of:
(A) 40% of the total voting power of the outstanding capital stock
of the entity; or
(B) the percentage of the total voting power of the outstanding
capital stock of the entity that is then held by any other
Person;
(ii) the entity succeeds to the interests of TrizecHahn Corporation
Corporation; but including only an entity which, immediately after
the succession: (A) is beneficially owned by all or substantially all
of the individuals and entities who were the respective beneficial
owners of TrizecHahn Corporation immediately prior to such
succession, in substantially the same proportions as the proportions
beneficially owned immediately prior to such succession; or (B) for a
period of two years following the succession, a majority of the Board
of
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the successor entity is comprised of individuals who were directors
of TrizecHahn Corporation immediately before the succession.
(t) "MVS" means the outstanding Multiple Voting Shares in the capital of
TrizecHahn Corporation at any time.
(u) The term "Person", when capitalized, shall mean any person, and shall also
include two or more persons acting as a partnership, limited partnership,
syndicate, or other group for the purpose or with the effect of changing or
influencing the control of Xxxxx USA. The provisions of this paragraph (u)
shall be interpreted based on the interpretations of the comparable
provisions of Sections 13 and 14 of the U.S. Securities Exchange Act of
1934 and the rules thereunder.
(v) A "Potential Change in Control" shall exist during any period in which the
circumstances described in paragraphs (i), (ii), or (iii) below, exist
(provided, however, that a Potential Change in Control shall cease to exist
not later than the occurrence of a Change in Control):
(i) TrizecHahn Corporation, Xxxxx USA or the Corporation enter into an
agreement, the consummation of which would result in the occurrence
of a Change in Control, provided that a Potential Change in Control
described in this paragraph (i) shall cease to exist upon the
expiration or other termination of all such agreements;
(ii) any person (including Xxxxx USA and the Corporation) publicly
announces an intention to take or to consider taking actions the
consummation of which would constitute a Change in Control; provided
that a Potential Change in Control described in this paragraph (ii)
shall cease to exist upon the withdrawal of such intention, or upon
a reasonable determination by the Board that there is no reasonable
chance that such actions would be consummated;
(iii) the Board adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control exists; provided that
a Potential Change in
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Control described in this paragraph (iii) shall cease to exist upon
a reasonable determination by the Board that the reasons that gave
rise to the resolution providing for the existence of a Potential
Change in Control have expired or no longer exist.
(w) "Subsidiary" means any corporation, partnership, joint venture or other
entity during any period in which at least a fifty percent voting or
profits interest is beneficially owned by the Xxxxx USA.
(x) TrizecHahn Corporation shall be a "substantial owner" of Xxxxx USA for the
period in which it beneficially owns at least 25% of the Voting Power of
Xxxxx USA, and no other shareholder of Xxxxx USA beneficially owns more
Voting Power of Xxxxx USA than does TrizecHahn Corporation.
(y) "SVS" means the outstanding Subordinate Voting Shares in the capital of
TrizecHahn Corporation at any time.
(z) "Tiger" shall mean, collectively, The Jaguar Fund N.V., Tiger (a limited
partnership), Puma (a limited partnership) and any other Person managed by
Tiger Management Corporation which at any time holds any shares of capital
stock of Xxxxx USA.
(aa) "Voting Power of Xxxxx USA" shall mean the total voting power of the
outstanding capital stock of Xxxxx USA.
(bb) "Voting Shares" means any security of TrizecHahn Corporation carrying a
right to vote for the election of directors of TrizecHahn Corporation under
all circumstances or under circumstances that have occurred and are
continuing.
ARTICLE IV
Agreement Term
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IV.1 Subject to the automatic extension discussed below in this subsection
IV.1, the "Agreement Term" shall be the period beginning on the Agreement Date,
and ending on the fifth anniversary of the Agreement Date. On the fifth
anniversary of the Agreement Date and on each anniversary date thereafter
(including the period during which this Agreement is extended), the Agreement
Term shall automatically be extended by one
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additional year unless, not less than 90 days prior to any such anniversary, the
Corporation shall have given written notice to the Executive that the Agreement
Term will not be extended.
IV.2 (a) The Executive shall not solicit, initiate or encourage proposals
or offers from, or provide information relating to Xxxxx USA, the Corporation or
any of the Affiliates to, any person, entity or group in connection with or
relating to any acquisition or disposition of all or any material part of Xxxxx
USA's issued and outstanding shares, or any amalgamation, merger, sale of all or
any material part of the assets of Xxxxx USA, the Corporation or any Subsidiary,
take-over bid, re-organization, re-capitalization, liquidation, winding-up of,
or other business combination or any similar transaction involving Xxxxx USA,
the Corporation or any Subsidiary, without in each case the explicit approval of
any of the person to whom the Executive reports.
(b) The provisions of paragraph IV.2(a)shall not apply to the sale by the
Executive of any shares of Xxxxx USA owned by him.
ARTICLE V
Continuation of Employment Following a Change in Control
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V.1 Upon a Change in Control, and for a period of two years thereafter, the
Corporation agrees to continue the Executive in its employ, in accordance with
the terms and provisions of this Agreement, on the same terms and conditions
which were in effect immediately prior to the Change in Control or on such other
terms as may be subsequently agreed upon in writing between the Corporation and
the Executive. Upon a Change in Control the provisions of this Article V and
Article VI shall become operative.
ARTICLE VI
Obligations Upon Termination
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VI.1 If, at any time within two years following a Change in Control, the
Executive's Date of Termination occurs as a result the Executive's employment
being terminated by the Executive's employer (other than for Cause, Disability,
or death), or as a result of the Executive's employment being terminated by the
Executive for Good Reason:
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(a) The Corporation shall pay to or to the order of the Executive in cash or
certified cheque within ten days after the Date of Termination, the
aggregate of the following amounts (less any statutory deductions):
(i) if not theretofore paid, the amount of the Executive's unpaid Annual
Salary for the then current fiscal year of the Corporation for the
period to and including the Date of Termination, plus any other
compensation and benefit amounts that are accrued and unpaid as of
the Date of Termination; and
(ii) as partial compensation for the Executive's loss of employment, an
amount equal to twenty-four (24) months of Annual Salary; as defined
in Section III.5(b).
(b) If the Executive holds any options, rights, warrants or other entitlements
for the purchase or acquisition of securities in the capital of Xxxxx USA,
the Corporation or any Affiliate granted by Xxxxx USA and the Corporation
(collectively, "Rights"), regardless of whether such Rights are then
exercisable, notwithstanding the terms and conditions of such Rights or of
any plan or other document affecting such Rights, shall be deemed to be
immediately exercisable for a term that is the lesser of five years after
the Date of Termination or the remaining term to expiry for such Rights.
(c) The Corporation, at its expense, shall provide the Executive with the
reasonable job relocation counselling services of a firm chosen from time
to time by the Executive, for a period not to exceed 18 months after the
Date of Termination.
(d) The Corporation shall maintain in full force and effect, for the
Executive's continued benefit, until the earlier of:
(i) one year after the Date of Termination; and
(ii) the Executive's commencement of full time employment with a new
employer;
all life insurance, medical, dental, health and accident and disability
plans, programs or arrangements in which the
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Executive was entitled to participate immediately prior to the Date of
Termination at a cost to the Executive no greater than the Executive paid
while employed, provided that the Executive's continued participation is
possible under the general terms and provisions of such plans and programs.
In the event that the Executive's participation is barred, the Corporation
shall arrange to provide the Executive, at the Corporation's expense, with
benefits substantially similar to those which the Executive is entitled to
receive under such plans, programs or arrangements or pay cash in an amount
after tax sufficient to enable the Executive to purchase substantially
similar coverage for a one year period on an individual basis at a cost to
the Executive no greater than the Executive paid while employed. In the
case of the Executive's commencement of full time employment with a new
employer within the one year period, the Corporation agrees to make up any
differential in benefits between what the Executive would have received
from the Corporation in the one year period and what the Executive receives
from his new employer, so that the Executive is ensured of receiving the
same benefits which he would have been entitled to receive from the
Corporation had his employment with the Corporation continued for the one
year period at a cost to the Executive no greater than the Executive paid
while employed.
(e) Except as otherwise expressly provided in this Agreement, the Executive's
entitlement to benefits under the employee benefit plans and benefit
arrangements maintained by Xxxxx USA and the Corporation shall be
determined under the terms of the respective plans as in effect from time
to time, with such entitlement based on the fact that the Executive's
employment with Xxxxx USA and the Corporation ceased on the Executive's
Date of Termination.
Except as may be otherwise specifically provided in an amendment of this
subsection VI.1 adopted in accordance with subsection VII.9, payments under this
subsection VI.1 shall be in lieu of all benefits that may be otherwise payable
to or on behalf of the Executive pursuant to the terms of any severance pay
arrangement of Xxxxx USA, the Corporation or any Affiliate or any other, similar
arrangement of Xxxxx USA, the Corporation or any Affiliate providing benefits
upon involuntary termination of employment.
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VI.2 If, during a Potential Change in Control, the Executive's Date of
Termination occurs as a result of the Executive's employment being terminated by
the Executive's employer (other than for Cause, Disability, or death), and a
Change in Control occurs within 90 days following the date of the Executive's
Date of Termination, then:
(a) the Executive shall be treated as though his employment had continued until
the date of the Change in Control, and had been terminated immediately
thereafter for reasons other than for Cause, Disability, or death;
(b) the Executive shall be entitled to the compensation, benefits and rights
described in paragraphs VI.1(a) through (e), determined as though he had,
in fact, been employed through the date of the Change in Control and had
terminated employment in accordance with paragraph (a) above; and
(c) within ten days following the date of the Change in Control, the Executive
shall be entitled to the compensation and benefits that he would have been
entitled to receive if he had remained in the employ of the Corporation
until the date of the Change in Control.
Notwithstanding the foregoing provisions of this subsection VI.2, if the
Executive's employment is terminated by the Executive's employer during a
Potential Change in Control, but the Executive dies on or before the Change in
Control date, then this Agreement shall be inapplicable to the Participant, and
the amount of severance or benefits to which the Executive is entitled in such
circumstances shall be determined by the employment arrangements, if applicable,
with the Executive or, failing any such arrangements, by applicable law.
VI.3 The Corporation shall pay to the Executive all reasonable legal and
professional fees and expenses incurred by the Executive in seeking to obtain or
enforce any right or benefit provided by this Agreement, if the Executive is
successful in obtaining such right or benefit.
VI.4 (a) Notwithstanding anything in the Agreement to the contrary, in
the event that it shall be determined that any payment or distribution by the
Corporation, or by any other member of the same affiliated group with the
Corporation (as determined under Code Section 280G(d)(5)) to or for the benefit
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of the Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (a "Payment") would be non-
deductible by Xxxxx USA, the Corporation, or any Affiliate (as applicable) for
U.S. Federal income tax purposes because of section 280G of the Internal Revenue
Code of 1986, as amended from time to time (the "Code") or any successor
provision, then the aggregate present value of the amounts payable or
distributable to or for the benefit of the Executive pursuant to this Agreement
("Agreement Payments") shall be reduced (but not below zero) to the Reduced
Amount. For purposes of this subsection VI.4, the "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be non-deductible because of
Code section 280G. The determination to be made under this paragraph VI.4(a)
shall be made, within twenty days after the Date of Termination, by such
accounting firm that is currently acting as auditor for Xxxxx USA (the
"Accounting Firm"), which shall provide detailed calculations thereof to Xxxxx
USA and the Executive, provided, however, that the Executive shall elect which
and how much of the Agreement Payments shall be reduced consistent with such
calculations. The determination to be made by the Accounting Firm shall be
binding on Xxxxx USA, the Corporation, or any Affiliate (as applicable) and the
Executive unless each of the following occurs: (i) within fifteen days of the
date of such determination, either party gives to the other party a written
legal opinion from a nationally recognized U.S. law firm stating that there is a
substantial possibility that the U.S. Internal Revenue Service (the "IRS") will
reach a conclusion different from that reached by the Accounting Firm; (ii)
either party, within fifteen days of the date of such letter, seeks a private
letter ruling from the IRS; and (iii) the IRS issues a private letter ruling
reaching a conclusion that is different from that reached by the Accounting
Firm. A private letter ruling by the IRS issued under these circumstances shall
be binding upon Xxxxx USA, the Corporation, or any Affiliate (as applicable) and
the Executive. Present value, for purposes of the calculations under this
subsection VI.4, shall be determined in accordance with section 280G(d)(4) of
the Code.
(b) As a result of uncertainty in the application of section 280G of the
Code at the time of any initial determination by the Accounting Firm hereunder,
it is possible that Agreement Payments will have been paid or distributed by
Xxxxx USA, the Corporation or an Affiliate which should not be so paid or
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distributed ("Overpayment") or that additional Agreement Payments which were not
paid or distributed could have been so paid or distributed ("Underpayment"), in
each case, consistent with the calculation of the Reduced Amount hereunder. In
the event that the Accounting Firm determines that an Overpayment has been made,
any such Overpayment shall be treated for all purposes as a loan to the
Executive which the Executive shall repay to Xxxxx USA, the Corporation, or any
Affiliate (as applicable) promptly upon receiving notice of such Overpayment
together with interest at the applicable Federal rate provided for in section
7872(f)(2) of the Code; provided, however, that no amount shall be payable by
the Executive to Xxxxx USA, the Corporation, or any Affiliate or if paid by the
Executive to Xxxxx USA, the Corporation, or any Affiliate, shall be returned to
the Executive) if and to the extent that such payment would not reduce the
amount which is non-deductible under section 280G of the Code or which is
subject to taxation under section 4999 of the Code. In the event that the
Accounting Firm determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by Xxxxx USA, the Corporation, or any
Affiliate, to or for the benefit of the Executive together with interest at the
applicable Federal rate provided for in section 7872(f)(2) of the Code.
ARTICLE VII
General
VII.1 If, within two years after the date of a Change in Control, the
Executive's employment with Xxxxx USA, the Corporation and the Subsidiaries is
terminated by the Corporation (or other employer, as applicable) without Cause,
or is terminated by the Executive for Good Reason, subject to Section VII.3, the
Executive shall not be prohibited or restricted in any manner whatsoever from
obtaining employment with or otherwise forming or participating in a business
competitive to the business of Xxxxx USA, the Corporation or Subsidiary.
VII.2 If, at any time within two years following a Change in Control, the
Executive's Date of Termination occurs as a result the Executive's employment
being terminated by the Executive's employer (other than for Cause, Disability,
or death), or as a result of the Executive's employment being terminated by the
Executive for Good Reason, the Executive shall not be subject to any duty or
obligation to seek alternate employment or other sources of income or benefits,
or to mitigate
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his damages, or to any similar duty or obligation, and, except as specifically
provided with respect to benefits in paragraph VI.1(d), all payment and other
obligations of the Corporation under this Agreement shall not be subject to any
rights of set-off, duty to mitigate or other reduction, and shall be paid and
performed in full notwithstanding any alternate employment or other sources of
income or benefits obtained or received or receivable by the Executive.
VII.3 The Executive agrees that he shall maintain the confidentiality of
any confidential or proprietary information concerning Xxxxx USA, the
Corporation or any Subsidiary until the date, if any, upon which: (i) the
relevant information becomes available to the public or is made available to the
Executive from a source which is not bound by an obligation of confidentiality
to Xxxxx USA, the Corporation or the relevant Subsidiary; or (ii) the Executive
is required to disclose such information by any court or governmental or
regulatory authority of competent jurisdiction (in which case the Executive
shall notify the Corporation and, after such notification, shall be entitled to
disclose or make use of such information only to the extent he is so required).
VII.4 Subject to the provisions of paragraph VI.2 (relating to a Potential
Change in Control), the Corporation and the Executive agree that if the
employment of the Executive is terminated prior to a Change in Control, this
Agreement shall have no application and the amount of severance or benefits, if
any, to which the Executive is entitled in such circumstances shall be
determined by the employment arrangements, if applicable, with the Executive or,
failing any such arrangements, by applicable law.
VII.5 Any notice required or permitted to be given under this Agreement
shall be in writing and shall be properly given if delivered by hand or mailed
by prepaid registered mail addressed as follows:
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(a) in the case of the Corporation, to:
Xxxxx Refining and Marketing, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Administrative Officer
of the Corporation
with a copy to:
Xxxxx Refining and Marketing, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer of the Corporation
(b) in the case of the Executive, to:
Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
or the last address of the Executive in the records of the Corporation
or to such other address as the parties may from time to time specify by notice
given in accordance herewith. Any notice so given shall be conclusively deemed
to have been given or made on the day of delivery, if delivered, or if mailed by
registered mail, upon the date shown on the postal return receipt as the date
upon which the envelope containing such notice was actually received by the
addressee.
VII.6 This Agreement shall enure to the benefit of and be binding upon the
Executive and his heirs, executors, administrators and other legal personal
representatives and upon the Corporation and its successors and assigns.
VII.7 The terms set out in this Agreement, provided that such terms are
satisfied by the Corporation, are in lieu of (and not in addition to) and in
full satisfaction of any and all other claims or entitlements which the
Executive has or may have upon the termination of employment if:
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(a) at any time within two years following a Change in Control, the Executive's
Date of Termination occurs as a result the Executive's employment being
terminated by the Executive's employer (other than for Cause, Disability,
or death), or as a result of the Executive's employment being terminated by
the Executive for Good Reason; or
(b) during a Potential Change in Control under circumstances which will result
in the Executive being treated as having terminated employment after a
Change in Control in accordance with subsection VI.2;
and the compliance by the Corporation with these terms will effect a full and
complete release of the Corporation from any and all claims which the Executive
may then have for whatever reason or cause in connection with the Executive's
employment and the termination of it (including, without limitation, any rights
under an employment agreement which may then be in effect), other than those
obligations specifically set out in this Agreement, and other than obligations
of Xxxxx USA, the Corporation and the Subsidiaries and Affiliates to the extent
that the documents providing for such obligations specifically provide that the
obligations are in addition to obligations under this Agreement. In agreeing to
the terms set out in this Agreement, the Executive specifically agrees to
execute a formal release document to that effect and will deliver upon request
appropriate resignations from all offices and positions with Xxxxx USA, the
Corporation and any Subsidiaries and Affiliates if, as, and when requested by
the Company upon the termination of employment within the circumstances
contemplated by this Agreement.
VII.8 Each of the Corporation and the Executive agrees to execute all such
documents and to do all such acts and things, in any case at the Corporation's
expense, as the other party may reasonably request and as may be lawful and
within its powers to do or to cause to be done in order to carry out and/or
implement the provisions of intent of this Agreement, including, without
limitation, seeking all such governmental, regulatory and other third party
approvals as may be necessary or desirable. Without limiting the generality of
the foregoing, the Corporation agrees to execute all such documents and to do
all such acts and things as the Executive may reasonably request and as may be
lawful and within the power of the Corporation to do or cause to be done in
order to minimize any tax consequences to the Executive or his
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legal personal representatives in respect of the payment or performance by the
Corporation of the obligations of the Corporation upon termination arising under
Article V or in respect of other payments or actions required to be made or
taken by or on behalf of the Corporation in the event of termination of the
Executive's employment hereunder; provided that the Corporation shall in no
material way be prejudiced thereby.
VII.9 This Agreement may be amended only by an instrument in writing
signed by both parties.
VII.10 Neither party may waive or shall be deemed to have waived any right
it has under this Agreement (including under this subsection VII.10) except to
the extent that such waiver is in writing.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.
XXXXX REFINING AND MARKETING, INC.
By Xxxx X. Xxxxxx
-------------------------------
President & CEO
-------------------------------
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
)
/s/ Xxxxx X. Xxxxxxx )
--------------------------------)
Xxxxx X. Xxxxxxx ) Xxxxxx X. Xxxxxxx
--------------------------------) -------------------------------
Notary Public, State of Missouri) EXECUTIVE
My Commission Expires 11/22/99 )
St. Xxxxxxx County )
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