EMPLOYMENT AGREEMENT
Exhibit
10.14
THIS
EMPLOYMENT AGREEMENT (“Agreement”) made and entered into this _______ day of
March, 2009 (the “Effective Date”), by and between SEMGROUP ENERGY PARTNERS
MANAGEMENT, INC., a Delaware corporation (the “Company”), and ___________ (the
“Executive”).
W I T N E S S E T
H:
WHEREAS,
the Company is a wholly-owned subsidiary of SemGroup Energy Partners, G.P.,
L.L.C. (the “General Partner”), the general partner of SemGroup Energy Partners,
L.P., a Delaware limited partnership (the “MLP”);
WHEREAS,
the Executive is currently employed through SemManagement, L.L.C., a Delaware
limited liability company and a subsidiary of SemGroup, L.P., an Oklahoma
limited partnership (“SemGroup”), to provide services to the General Partner and
the MLP;
WHEREAS,
the Company wishes to continue to secure the services of the Executive subject
to the contractual terms and conditions set forth herein; and
WHEREAS,
the Executive is willing to enter into this Agreement upon the terms and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual promises and agreements set forth
herein, the parties hereto agree as follows:
1. Employment. The
Company hereby agrees to employ the Executive, and the Executive hereby agrees
to accept such employment with the Company, all upon the terms and conditions
set forth herein.
2. Term of
Employment. Subject to the terms and conditions of this
Agreement, the Executive shall be employed for a term commencing on the
Effective Date and ending on the second (2nd) anniversary of the Effective Date
(the “Term”) unless sooner terminated as provided for herein. The
Term shall renew automatically for additional one (1) year terms, unless either
party gives written notice no less than ninety (90) days prior to the expiration
of the Term that it does not intend to extend the Term.
3. Duties
and Responsibilities.
A. Capacity. During
the Term, the Executive shall serve in the capacity of Chief Accounting Officer
of the Company and the General Partner subject to the supervision of the Board
of Directors of the General Partner (the “Board”).
B. Duties. During the
Term, and excluding any periods of disability, vacation or sick leave to which
the Executive is entitled, the Executive shall devote as much time to the
management of the business and affairs of the Company, the General Partner and
the MLP as is necessary for the proper conduct of the business and affairs of
the Company, the General Partner and the MLP. The Executive may be
required by the Board to provide services to, or otherwise serve as an officer
or director of any direct or indirect subsidiary of the Company, the General
Partner or the MLP. During the Term, it shall not be a violation of
this Agreement for the Executive to: (i) continue employment with SemGroup or
any of its Affiliates, provided that Executive shall at all times act, in his
good faith judgment, solely in the interest of the Company, the General Partner
and the MLP, (ii) serve on corporate, civic or charitable boards or committees
and (iii) deliver lectures or fulfill speaking engagements. For
purposes of this Agreement, “Affiliate” means with respect to any Person (as
defined in Section 6.C.), any other Person that directly or indirectly through
one or more intermediaries controls, is controlled by or is under common control
with, the Person in question. As used herein, the term “control” means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
C. Standard of
Performance. The Executive will perform his duties under this
Agreement with fidelity and loyalty, to the best of his ability, experience and
talent and in a manner consistent with his duties and
responsibilities.
4. Compensation.
A. Base Salary. The
Company shall pay the Executive a salary (the “Base Salary”) of $17,500 per
month, prorated for partial months of employment. The Base Salary
shall be payable in accordance with the general payroll practices of the Company
in effect from time to time. During the Term, the Base Salary shall
be reviewed at least annually by the Board after consultation with the Executive
and may from time to time be increased (but not decreased) as solely determined
by the Board. Effective as of the date of any such increase, the Base
Salary as so increased shall be considered the new Base Salary for all purposes
of this Agreement and may not thereafter be reduced. Any increase in
the Base Salary shall not limit or reduce any other obligation of the Company to
the Executive under this Agreement.
B. Performance
Bonus. The Executive shall be eligible for discretionary bonus
awards payable in cash or common units of the MLP, as so determined solely by
the Board, based on performance objectives determined by the Board.
C. Long-Term
Incentives. Awards of unit options, unit grants, restricted
units and/or other forms of equity based compensation to the Executive may be
made from time to time during the Term by the Board in its sole discretion,
whose decision will be based upon performance and award guidelines for senior
executives of the Company established periodically by the Board in its sole
discretion.
D. Benefits.
(1) If and to
the extent that the Company maintains employee benefit plans (including, but not
limited to, pension, profit-sharing, disability, accident, medical, life
insurance, and hospitalization plans) (it being understood that the Company may
but shall not be obligated to do so), the Executive shall be entitled to
participate therein in accordance with the Company’s regular practices with
respect to similarly situated senior executives. The Company will
have the right to amend or terminate any such benefit plans it may choose to
establish.
(2) The
Executive shall be entitled to prompt reimbursement from the Company for
reasonable out-of-pocket expenses incurred by him in the course of the
performance of his duties hereunder, upon the submission of appropriate
documentation in accordance with the practices, policies and procedures
applicable to other senior executives of the Company.
(3) The
Executive shall be entitled to such vacation, holidays and other paid or unpaid
leaves of absence as are consistent with the Company’s normal policies available
to other senior executives of the Company or as are otherwise approved by the
Board.
E. Retention
Agreement. The Executive and the Company are parties to a
retention agreement, dated as of August 19, 2008 (the “Retention
Agreement”). Nothing in this Agreement shall affect the rights of the
Executive or the Company with respect to the Retention Agreement.
F. Payment by
Affiliates. Compensation and benefits provided under this
Agreement may, at the election of the Company, be provided for administrative
convenience by SemGroup, the MLP or any of their or the Company’s
Affiliates.
5. Termination
of Employment.
Notwithstanding
the provisions of Section 2 hereof, the Executive’s employment hereunder
shall terminate under any of the following conditions:
A. Death. The
Executive’s employment under this Agreement shall terminate automatically upon
his death.
B. Total
Disability. The Company shall have the right to terminate this
Agreement if the Executive becomes Totally Disabled. For purposes of
this Agreement, “Totally Disabled” means that either (i) the Executive is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months or (ii) the Executive is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Company or any entity that
would be considered a single “service recipient” with the Company pursuant to
Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”). Prior to a determination that the Executive is Totally
Disabled, but after the Executive has exhausted all sick leave and vacation
benefits provided by the Company, the Executive shall continue to receive his
Base Salary, offset by any disability benefits he may be eligible to
receive.
C. Termination by Company for
Cause. The Executive’s employment hereunder may be terminated
for Cause upon written notice by the Company. For purposes of this
Agreement, “Cause” shall mean:
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(1)
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conviction
of the Executive by a court of competent jurisdiction of any felony or a
crime involving moral turpitude;
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(2)
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the
Executive’s willful and intentional failure or willful and intentional
refusal to follow reasonable and lawful instructions of the
Board;
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(3)
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the
Executive’s material breach or default in the performance of his
obligations under this Agreement;
or
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(4)
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the
Executive’s act of misappropriation, embezzlement, intentional fraud or
similar conduct involving the
Company.
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The
Executive may not be terminated for Cause pursuant to subsections (2) and (3)
above unless the Executive is given written notice of the circumstances
constituting “Cause” and a reasonable period to cure such circumstances, which
period shall be no less than thirty (30) days.
D. Termination for Good
Reason. The Executive’s employment hereunder may be terminated
by the Executive for Good Reason on written notice by the Executive to the
Company. For purposes of this Agreement, “Good Reason” means the
occurrence of any of the following circumstances without the Executive’s
consent:
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(1)
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a
material reduction in the Executive’s Base
Salary;
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(2)
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a
material diminution of the Executive’s duties, authority or
responsibilities as in effect immediately prior to such diminution;
or
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(3)
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the
relocation of the Executive’s principal work location to a location more
than 50 miles from its current
location.
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In order
to be eligible for payment on account of a Good Reason termination, the
Executive must: (i) provide written notice to the Company within 90 days
following the first event or condition which gives rise to his claim of Good
Reason under this section (the “Initial Breach”); (ii) provide the Company 30
days from the date of such notice in which to “cure” such event or condition and
(iii) actually terminate employment within 2 years of the date of the Initial
Breach.
6. Payments
Upon Termination.
A. Upon
termination of the Executive’s employment hereunder, the Company shall be
obligated to pay and the Executive shall be entitled to receive, within ten (10)
days of termination, the Base Salary which has accrued for services performed to
the date of termination and which has not yet been paid. In addition,
the Executive shall be entitled to any vested benefits to which he is entitled
under the terms of any applicable benefit plan or program, long-term incentive
plan, restricted unit plan and unit option plan of the Company, and, to the
extent applicable, short-term or long-term disability plan or program with
respect to any disability, or any life insurance policies and the benefits
provided by such plan, program or policies, or applicable law as duly adopted
from time to time by the Board, and in all events subject to the payment timing
and other restrictions as may be set forth in such plan or program.
B. Upon
termination of the Executive’s employment by the Company without Cause or by the
Executive for Good Reason, the Company shall be obligated to pay and the
Executive shall be entitled to receive:
(1) all of
the amounts and benefits described in Section 6.A. hereof;
(2) a lump
sum payment, within 10 days of termination, equal to twelve (12) months of the
Executive’s Base Salary; and
(3) continued
participation in all group health plans (medical, dental and vision), if any, of
the Company for the remainder of the Term or, if longer, until the first
anniversary of the Executive’s termination of employment, as if there had been
no termination of employment.
Payments
under Section 6.B., with the exception of amounts due pursuant to Section
6.B(1), are conditioned on the execution by the Executive of a release of all
employment-related claims; provided, however, that such release
shall be contingent upon the Company’s satisfaction of all terms and conditions
of this Section.
C. If within
the one (1) year period following the occurrence of a Change of Control, the
Executive’s employment is terminated by the Company without Cause or by the
Executive for Good Reason, in lieu of the severance benefits under 6.B., the
Executive will be entitled to the benefits identical to those set forth in
Section 6.B. except that the amount described in subsection (2) will be equal to
twenty-four (24) months of the Executive’s Base Salary, provided that the Change
of Control occurs after the Effective Date. For purposes of this
Agreement, “Change of Control” means, and shall be deemed to have occurred upon
the occurrence of one or more of the following events: (i) any “person” or
“group” within the meaning of those terms as used in Sections 13(d) and 14(d)(2)
of the Exchange Act, other than SemGroup, L.P., Manchester Securities Corp.,
Alerian Finance Partners, LP, or their respective Affiliates, shall become the
beneficial owner, by way of merger, consolidation, recapitalization,
reorganization or otherwise, of 50% or more of the combined voting power of the
equity interests in the General Partner or the MLP; (ii) the limited partners of
the MLP approve, in one or a series of transactions, a plan of complete
liquidation of the MLP; (iii) the sale or other disposition by either the
General Partner or the MLP of all or substantially all of its assets in one or
more transactions to any individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity (a “Person”)
other than the General Partner or an Affiliate of the General Partner; or (iv) a
transaction resulting in a Person other than the General Partner or an Affiliate
of the General Partner being the general partner of the MLP.
Payments
under Section 6.C., with the exception of amounts due pursuant to Section
6.B(1), are conditioned on the execution by the Executive of a release of all
employment-related claims; provided, however, that such release
shall be contingent upon the Company’s satisfaction of all terms and conditions
of this Section.
D. Upon
termination of the Executive’s employment upon the death of the Executive
pursuant to Section 5.A., the Company shall be obligated to pay, and the
Executive shall be entitled to receive:
(1) all of
the amounts and vested benefits described in Section 6.A.;
(2) any death
benefit payable under a plan or policy provided by the Company; and
(3) continued
participation by the Executive’s dependents in the group health plans (medical,
dental and vision), if any, of the Company for the remainder of the Term or, if
longer, until the first anniversary of the Executive’s termination of
employment, as if there had been no termination of employment.
E. Upon
termination of the Executive’s employment upon the Executive’s becoming Totally
Disabled pursuant to Section 5.B., the Company shall be obligated to pay, and
the Executive shall be entitled to receive:
(1) all of
the amounts and vested benefits described in Section 6.A.;
(2) the Base
Salary, at the rate in effect immediately prior to the date of his termination
of employment due to being Totally Disabled, for the remainder of the Term,
offset by any payments the Executive receives under the Company’s long-term
disability plan and any supplements thereto, whether funded or unfunded, which
is adopted by the Company for the Executive’s benefit and not attributable to
the Executive’s own contributions; and
(3) continued
participation by the Executive and his dependents in the group health plans
(medical, dental and vision) of the Company for the remainder of the Term or, if
longer, until the first anniversary of the Executive’s termination of
employment, as if there had been no termination of employment.
Payments
under Section 6.E., with the exception of amounts due pursuant to Section
6.E(1), are conditioned on the execution by the Executive or the Executive’s
representative of a release of all employment-related claims; provided, however, that such release
shall be contingent upon the Company’s satisfaction of all terms and conditions
of this Section.
F. Upon
voluntary termination of employment by the Executive for any reason whatsoever
(other than for Good Reason as described in Section 6.B. or
6.C.), termination by the Company for Cause or any termination
following the expiration of the Term, the Company shall have no further
liability under or in connection with this Agreement, except to provide the
amounts set forth in Section 6.A.
G. Upon
voluntary or involuntary termination of employment of the Executive for any
reason whatsoever or expiration of the Term, the Executive shall continue to be
subject to the provisions of Section 7, hereof (it being understood and agreed
that such provisions shall survive any termination or expiration of the
Executive’s employment hereunder for any reason whatsoever).
H. For the
avoidance of doubt, while termination of employment with the Company will end
the Company’s obligations pursuant to Section 4, termination of employment for
purposes of rights to severance payments under Section 6.B. or 6.C. of this
Agreement shall not be deemed to have occurred until the Executive has
terminated employment with the Company, SemGroup and all of their Affiliates,
for so long as such entities are considered a single service recipient for
purposes of determining whether a “separation from service” has occurred under
Section 409A of the Code.
7. Confidentiality
and Return of Property.
A. Confidential Information.
(1) Company
Information. The Company agrees that it will provide the
Executive with Confidential Information that will enable the Executive to
optimize the performance of the Executive’s duties to the Company. In
exchange, the Executive agrees to use such Confidential Information solely for
the Company’s benefit. The Company and the Executive agree and
acknowledge that its provision of such Confidential Information is not
contingent on the Executive’s continued employment with the
Company. Notwithstanding the preceding sentence, upon the termination
of the Executive’s employment for any reason, the Company shall have no
obligation to provide the Executive with its Confidential
Information. “Confidential Information” means any Company proprietary
information, technical data, trade secrets or know-how, including, but not
limited to, research, product plans, products services, customer lists and
customers (including, but not limited to, customers of the Company on whom the
Executive called or with whom the Executive became acquainted during the term of
the Executive’s employment), markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering, hardware
configuration information, marketing finances or other business information
disclosed to the Executive by the Company either directly or indirectly in
writing, orally or by drawings or observation of parts or
equipment. Confidential Information does not include any of the
foregoing items which has become publicly known and made generally available
through no wrongful act of the Executive or of others who were under
confidentiality obligations as to the item or items involved or improvements or
new versions. For purposes of this Section 7, references to the
Company include the General Partner or any Affiliate.
The
Executive agrees at all times during the Term and thereafter, to hold in
strictest confidence, and not to use, except for the exclusive benefit of the
Company, or to disclose to any person or entity without written authorization of
the Board, any Confidential Information of the Company.
(2) Third Party
Information. The Executive recognizes that the Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. The Executive shall hold all such confidential or
proprietary information in the strictest confidence and not disclose it to any
person or entity or use it except as necessary in carrying out the Executive’s
work for the Company consistent with the Company’s agreement with such third
party.
B. Returning Company
Documents. At the time of leaving the employ of the Company,
the Executive will deliver to the Company (and will not keep in the Executive’s
possession) specifications, drawings blueprints, sketches, materials, equipment,
other documents or property, or reproductions of any aforementioned items
developed by the Executive pursuant to the Executive’s employment with the
Company or otherwise belonging to the Company, its successors or
assigns.
C. Notification of New
Employer. In the event that the Executive leaves the employ of
the Company, the Executive hereby grants consent to notification by the Company
to the Executive’s new employer about the Executive’s rights and obligations
under this Agreement.
D. Representations. The
Executive agrees to execute any proper oath or verify any proper document
required to carry out the terms of this Agreement. The Executive
represents that his performance of all the terms of this Agreement will not
breach any agreement to keep in confidence proprietary information acquired by
the Executive in confidence or in trust prior to the Executive’s employment by
the Company. The Executive has not entered into, and the Executive
agrees that he will not enter into, any oral or written agreement in conflict
herewith.
8. Arbitration. Any
dispute arising out of or relating to this Agreement, including the breach,
termination or validity thereof, shall be finally resolved by arbitration in
accordance with the CPR Institute for Dispute Resolution Rules for
Non-Administered Arbitration in effect on the date of this Agreement by a single
arbitrator selected in accordance with the CPR Rules. The arbitration
shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, and judgment
on the award rendered by the arbitrator may be entered by any court having
jurisdiction thereof. The place of arbitration shall be in Tulsa,
Oklahoma. The arbitrator’s decision must be based on the provisions
of this Agreement and the relevant facts, and the arbitrator’s reasoned decision
and award shall be binding on both parties. Nothing herein is or
shall be deemed to preclude the Company’s resort to the injunctive relief
prescribed in this Agreement, including any injunctive relief implemented by the
arbitrator pursuant to this Section 7. The parties will each bear
their own attorneys’ fees and costs in connection with any dispute.
9. Notices. All
notices and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by registered or certified mail (return receipt requested and with
postage prepaid thereon) or by facsimile transmission to the respective parties
at the following addresses (or at such other address as either party shall have
previously furnished to the other in accordance with the terms of this
Section):
if to the
Company:
SemGroup Energy Partners G.P.,
L.L.C.
Two Xxxxxx Place
0000 Xxxxx Xxxx Xxxxxx, Xxxxx
000
Xxxxx,
Xxxxxxxx 00000
Attention: Chairman of the
Board
if to the
Executive:
[_________________________]
Two Xxxxxx Place
0000 Xxxxx Xxxx Xxxxxx, Xxxxx
000
Xxxxx,
Xxxxxxxx 00000
10. Amendment;
Waiver. The terms and provisions of this Agreement may be
modified or amended only by a written instrument executed by each of the parties
hereto, and compliance with the terms and provisions hereof may be waived only
by a written instrument executed by each party entitled to the benefits
thereof. No failure or delay on the part of any party in exercising
any right, power or privilege granted hereunder shall constitute a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege granted hereunder.
11. Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersede all
prior written or oral agreements or understandings between the parties relating
thereto; provided, however, that the Retention Agreement shall remain in full
force and effect..
12. Severability. In
the event that any term or provision of this Agreement is found to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining terms and provisions hereof shall not be in any way affected or
impaired thereby, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained
therein.
13. Binding Effect;
Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns (it being
understood and agreed that, except as expressly provided herein, nothing
contained in this Agreement is intended to confer upon any other person or
entity any rights, benefits or remedies of any kind or character
whatsoever). The Executive may not assign this Agreement without the
prior written consent of the Company. Except as otherwise provided in
this Agreement, the Company may assign this Agreement to any of its Affiliates
or to any successor (whether by operation of law or otherwise) to all or
substantially all of its business and assets without the consent of the
Executive.
14. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma (except that no effect shall
be given to any conflicts of law principles thereof that would require the
application of the laws of another jurisdiction).
15. Headings. The
headings of the sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.
16. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
[END OF
PAGE]
IN
WITNESS THEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and the Executive has signed this Agreement as of the
Effective Date.
SEMGROUP
ENERGY PARTNERS MANAGEMENT, INC.
By:
EXECUTIVE
[_______________]
