AMENDED AND RESTATED SENIOR MANAGEMENT AGREEMENT
Exhibit 10.10
AMENDED AND RESTATED SENIOR MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED SENIOR MANAGEMENT AGREEMENT (this “Agreement”) is made as of
September 18, 2006, by and among SPI PETROLEUM LLC, a Delaware limited liability company (the
“Company”), XXXXXX PETROLEUM, INC., an Oklahoma corporation (“Employer”), XXXXXX
TEXAS LIMITED PARTNERSHIP, a Texas limited partnership (“Xxxxxx XX”), Xxxxx Xxxxxx
(“Executive”), NCA Energy, Inc., a Washington corporation (“NCA”), RBCP Energy Fund
Investments, LP, a Delaware limited partnership (“RBC”), and Waud Capital Partners, L.P., a
Delaware limited partnership (“Waud”), and any other investment fund managed by NCA, RBC or
Waud that at any time acquires securities of the Company and executes a counterpart to this
Agreement or otherwise agrees to be bound by this Agreement. NCA, RBC and Waud are sometimes
individually referred to as an “Investor” and collectively as “Investors”. Certain
definitions are set forth in Section 9 of this Agreement.
Pursuant to the Merger Agreement, the Company issued to Xxxxxx XX, 33,000 of the Company’s
Senior Preferred Units (“Senior Preferred Units”). In addition, on April 9, 2004, pursuant
to the Senior Management Agreement, dated as of April 9, 2004, by and among Executive, the Company,
Employer, Xxxxxx XX, NCA, RBC and Waud (the “Prior Senior Management Agreement”), Executive
purchased 13,250 of the Company’s Common Units (“Common Units”).
Immediately prior to the transactions contemplated by the Recapitalization Agreement (as
defined below), Executive purchased an additional 15,000 Senior Preferred Units.
Pursuant
to the Recapitalization Agreement, dated as of September 18, 2006 (which
amends this Agreement), by and among the Company and each of its unitholders (the
“Recapitalization Agreement”), all of the Senior Preferred Units and Common Units will be
exchanged for Class A Units of the Company (“Class A Units”).
In connection with the execution and delivery of this Agreement, the Company will issue 6,625
Common Units to Executive subject to time and performance vesting and with no capital contribution
with respect thereto.
The parties hereto desire to amend and restate the Prior Senior Management Agreement in its
entirety. Certain provisions of this Agreement are intended for the benefit of, and will be
enforceable by, the Investors.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
to the Prior Senior Management Agreement hereby agree to amend and restate the Prior Senior
Management Agreement in its entirety as follows and all parties hereto hereby agree as follows:
PROVISIONS RELATING TO EXECUTIVE SECURITIES
1. Purchase and Sale of Co-Invest Units; Issuance of Carried Common Units.
(a) Pursuant to the Prior Senior Management Agreement, on April 9, 2004, Executive purchased,
and the Company sold to Executive, 13,250 Common Units (the “Existing Carried Common
Units”). Pursuant to the Merger Agreement, the Company issued to Xxxxxx XX 33,000 Senior
Preferred Units at a price of $100 per unit (the “Existing Co-Invest Units”).
(b) Upon the execution of this Agreement, (i) the Company will issue to Executive 6,625 Common
Units (the “New Carried Common Units” and, together with the Existing Carried Common Units,
the “Carried Common Units”) subject to time and performance vesting, and (ii) Xxxxxx XX
will purchase, and the Company will sell to Xxxxxx XX, 15,000 Senior Preferred Units at a price of
$100.00 per unit (the “New Co-Invest Units” and, together with the Existing Co-Invest
Units, the “Co-Invest Units”). Upon the execution of this Agreement, the Company will
deliver to Executive and Xxxxxx XX a unit ownership ledger evidencing their ownership of such
Executive Securities, and Executive and Xxxxxx XX will deliver to the Company a cashier’s or
certified check or wire transfer of immediately available funds in the aggregate amount of
$1,500,000 as payment for the New Co-Invest Units. Following such issuance of Executive Securities
(but prior to the consummation of the transactions contemplated by the Recapitalization Agreement),
Xxxxxx XX and Executive shall own Executive Securities in the following amounts:
(i) Xxxxxx XX shall own 48,000 Senior Preferred Units; and
(ii) Executive shall own 19,875 Common Units.
(c) Within 30 days after the date hereof, Executive will make an effective election with the
Internal Revenue Service under Section 83(b) of the Internal Revenue Code and the regulations
promulgated thereunder.
(d) Until the occurrence of a Qualified Change of Control, certificates (if any) evidencing
Executive Securities shall be held by the Company for the benefit of Executive and the other
holder(s) thereof. Upon the occurrence of a Qualified Change of Control, the Company will return
any such certificates for the Executive Securities to the record holders thereof.
(e) In connection with the issuance of the Executive Securities, Executive represents and
warrants to the Company that:
(i) The Executive Securities to be acquired by Executive and Xxxxxx XX will be acquired
for Executive’s and Xxxxxx LP’s own accounts and not with a view to, or intention of,
distribution thereof in violation of the Securities Act, or any applicable state securities
laws, and the Executive Securities will not be disposed of in contravention of the
Securities Act or any applicable state securities laws.
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(ii) Executive is an executive officer of the Company, is sophisticated in financial
matters and is able to evaluate the risks and benefits of the investment in the Executive
Securities.
(iii) Executive and Xxxxxx XX are able to bear the economic risk of his or its
investment in the Executive Securities for an indefinite period of time because the
Executive Securities have not been registered under the Securities Act and, therefore,
cannot be sold unless subsequently registered under the Securities Act or an exemption from
such registration is available.
(iv) Executive and Xxxxxx XX have had an opportunity to ask questions and receive
answers concerning the terms and conditions of the offering of Executive Securities and have
had full access to such other information concerning the Company as it or he has requested.
(v) This Agreement constitutes the legal, valid and binding obligation of each of
Executive and Xxxxxx XX, enforceable in accordance with its terms, and the execution,
delivery and performance of this Agreement by each of Executive and Xxxxxx XX does not and
will not conflict with, violate or cause a breach of any agreement, contract or instrument
to which Executive or Xxxxxx XX is a party or any judgment, order or decree to which
Executive or Xxxxxx XX is subject.
(vi) Except for this Agreement, the LLC Agreement and the Merger Agreement, neither
Executive nor Xxxxxx XX is a party to, nor bound by, any other employment agreement,
consulting agreement, noncompete agreement, non-solicitation agreement or confidentiality
agreement.
(vii) Executive is a resident of the State of Oklahoma.
(f) As an inducement to the Company to issue the Executive Securities to Executive and Xxxxxx
XX, and as a condition thereto, Executive acknowledges and agrees that neither the issuance of the
Executive Securities to Executive or Xxxxxx XX nor any provision contained herein or in the Merger
Agreement shall entitle Executive to remain in the employment of the Company, Employer or their
Subsidiaries or affect the right of the Company or Employer to terminate Executive’s employment at
any time for any reason (it being understood, however, that the foregoing shall not be construed as
limiting any rights or obligations Executive or Xxxxxx XX may have as a result of any such
termination).
2. Vesting of Carried Common Units.
(a) The Carried Common Units shall include a time-vesting component and performance-vesting
component, and shall be subject to vesting in the manner specified in this Section 2.
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(b) Time-Vesting Carried Common Units.
(i) 7,950 Carried Common Units (the “Time-Vesting Carried Common Units”) will
vest annually over a five-year period provided that the Executive is employed by the Company
as of each successive anniversary of the commencement date of such five-year period. Such
period shall be deemed to have commenced on April 9, 2004. Such Time-Vesting Carried Common
Units shall vest as follows:
| Aggregate Time-Vesting | ||||
| Anniversary of April 9, 2004 | Carried Common Units vested as of such date | |||
1st Anniversary |
15.0 | % | ||
2nd Anniversary |
30.0 | % | ||
3rd Anniversary |
45.0 | % | ||
4th Anniversary |
72.5 | % | ||
5th Anniversary |
100.0 | % | ||
(ii) Immediately prior to the occurrence of a Qualified Change of Control, all
shares of Time-Vesting Carried Common Units which have not yet become vested shall become
vested at the time of such event if the Executive (at the acquiror’s request) agrees to
continue to provide services to the Employer (or its successor) for a period of six months
following such Qualified Change of Control (provided that the compensation
and benefits package and other terms offered to Executive, taken as a whole, are at least as
favorable as the compensation and benefits package and other terms, taken as a whole, of
Executive immediately prior to such Qualified Change of Control).
(c) Performance Vesting.
(i) Up to 11,925 Carried Common Units (the “Performance-Vesting Carried Common
Units”) will vest upon the achievement of the Investor IRR hurdles set forth below upon
the occurrence of a Qualified Change of Control if the Executive (at the acquiror’s request)
agrees to continue to provide services to the Employer (or its successor) for six months
following such Qualified Change of Control (so long as the compensation and benefits package
and other terms offered to Executive, taken as a whole, are at least as favorable as the
compensation and benefits package and other terms, taken as a whole, of Executive
immediately prior to such Qualified Change of Control).
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| Investor | Percentage of Performance-Vesting | |||
| IRR | Carried Common Units Vested | |||
25% |
33.33 | % | ||
30% |
66.67 | % | ||
35% |
100.00 | % | ||
(d) Carried Common Units that have become vested and the Co-Invest Units are collectively
referred to herein as “Vested Units.” All Carried Common Units that have not vested are
referred to herein as “Unvested Units.” For the avoidance of doubt, the Carried Common
Units and the Co-Invest Units shall be converted and exchanged as provided in the Recapitalization
Agreement.
3. Repurchase Option.
(a) In the event Executive ceases to be employed by the Company, Employer or their respective
Subsidiaries for any reason (the “Separation”), the Executive Securities (whether held by
Executive, Xxxxxx XX or one or more of their Permitted Transferees, other than the Company and the
Investors) will be subject to repurchase, in each case by the Company and the Investors pursuant to
the terms and conditions set forth in this Section 3 (the “Repurchase Option”).
(i) In the event that Executive is terminated with Cause at any time on or prior to
April 9, 2009, the Unvested Units will be forfeited, and all of the Vested Units, including
the Existing Co-Invest Units (in each case, whether held by Executive, Xxxxxx XX or one or
more of their Permitted Transferees, other than the Company and the Investors, will be
subject to repurchase at the lower of Original Cost and Fair Market Value thereof.
(ii) In the event that Executive resigns without Good Reason prior to April 9, 2009,
the Unvested Units will be forfeited, and the Vested Units (other than the Existing
Co-Invest Units) (in each case, whether held by Executive, Xxxxxx XX or one or more of their
Permitted Transferees, other than the Company and the Investors) will be subject to
repurchase at the lower of Original Cost and Fair Market Value thereof.
(iii) In event that Executive is terminated without Cause, Executive resigns with Good
Reason or Executive resigns without Good Reason after April 9, 2009, the Vested Units (other
than Existing Co-Invest Units) (whether held by Executive, Xxxxxx XX or one or more of their
Permitted Transferees, other than the Company and the Investors) will be subject to
repurchase at the Fair Market Value thereof, and the Unvested Units will be forfeited.
Notwithstanding the foregoing, in the event that Executive’s employment with the Company and
the Employer terminates pursuant to this paragraph 3(a)(iii) after the date hereof, a number
of Performance-Vesting Carried Common Units equal to (x) 11,925 multiplied
by (y) the product of (1) .10 and (2) the number of complete years elapsed since
April 9, 2004 shall not be subject to repurchase pursuant to this paragraph 3(a)(iii) (the
“Retained Performance-Vesting Carried Common
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Units”). The Retained
Performance-Vesting Carried Common Units shall continue to be
subject to the performance-vesting criteria specified in paragraph 2(c), but will be
forfeited if a Qualified Change of Control is not consummated within six months from the
date of Executive’s termination.
(iv) In the event of a termination as a result of Executive’s death, Disability or
retirement, the Vested Units (other than Existing Co-Invest Units) will be subject to
repurchase at the Fair Market Value thereof, and the Unvested Units will be forfeited. As
used in this clause (iv), the term “retirement” means retirement as of or following the
federal age for retirement.
(v) For the avoidance of doubt, the Existing Co Invest Units shall only be subject to
repurchase if Executive is terminated for Cause.
(b) In connection with the exercise of the Repurchase Option, the Company (with Board
approval) may elect to purchase all or any portion of the Executive Securities subject to
repurchase hereunder by delivering written notice of its election to the holder or holders of such
Executive Securities within 30 days of Executive’s Separation (the “Repurchase Notice”).
The Repurchase Notice will set forth the number of Executive Securities to be acquired from each
holder, the aggregate consideration to be paid for such units and the time and place for the
closing of the transaction.
(c) If for any reason the Company does not elect to purchase all of the Executive Securities
pursuant to the Repurchase Option, the Investors shall be entitled to exercise the Repurchase
Option for all (but not less than all) of the Executive Securities the Company has not elected to
purchase (the “Available Securities”). As soon as practicable after the Company has
determined that there will be Available Securities, the Company shall give written notice (the
“Option Notice”) to the Investors setting forth the number of Available Securities and the
purchase price for the Available Securities. The Investors may elect to purchase all (but not less
than all) of the Available Securities by giving written notice to the Company within 30 days after
the Option Notice has been given by the Company. If the Investors elect to purchase an aggregate
number greater than the number of Available Securities, the Available Securities shall be allocated
among the Investors based upon the number of Senior Preferred Units then owned by each Investor.
As soon as practicable, and in any event within ten days, after the expiration of the 30-day period
set forth above, the Company shall notify each holder of Executive Securities as to the number of
units being purchased from such holder by the Investors (the “Supplemental Repurchase
Notice”). At the time the Company delivers the Supplemental Repurchase Notice to the holder(s)
of Executive Securities, the Company shall also deliver written notice to each Investor setting
forth the number of units such Investor is entitled to purchase, the aggregate purchase price and
the time and place of the closing of the transaction. The number of Executive Securities to be
repurchased hereunder shall be allocated among the Company and the Investors pro rata according to
the number of Executive Securities to be purchased by each of them. In no event shall the Company
and the Investors collectively elect to purchase less than 100% of the Executive Securities then
subject to repurchase hereunder.
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(d) The closing of the purchase of the Executive Securities pursuant to the Repurchase Option
shall take place on the date designated by the Company in the Repurchase Notice or Supplemental
Repurchase Notice (subject to the final determination of Fair Market Value hereunder), which date
shall not be more than 30 days after the final determination of the Fair Market Value of such
Executive Securities, nor less than five days after the delivery of the Repurchase Notice or
Supplemental Repurchase Notice.
(e) The Company will pay for the Executive Securities to be purchased by it pursuant to the
Repurchase Option by first offsetting amounts outstanding under any bona fide debts owed by
Executive and/or Xxxxxx XX to the Company and will pay the remainder of the purchase price by a
check or wire transfer of funds. Each Investor will pay for the Executive Securities purchased by
it by a check or wire transfer of funds. The Company and the Investors will be entitled to receive
customary representations and warranties from the sellers regarding such sale and to require that
all sellers’ signatures be guaranteed.
(f) Notwithstanding anything to the contrary contained in this Agreement, all repurchases of
Executive Securities by the Company pursuant to the Repurchase Option shall be subject to
applicable restrictions contained in the Delaware Limited Liability Company Act, the Delaware
General Corporation Law or such other governing law, and applicable restrictions in the Company’s
and its Subsidiaries’ debt and equity financing agreements. If any such restrictions prohibit (i)
the repurchase of Executive Securities hereunder which the Company is otherwise entitled or
required to make or (ii) dividends or other transfers of funds from one or more Subsidiaries to the
Company to enable such repurchases, then the Company may make such repurchases as soon as it is
permitted to make repurchases or receive funds from Subsidiaries under such restrictions.
(g) The provisions of this Section 3 shall terminate upon the earlier to occur of the
consummation of (i) a Public Offering which raises not less than $50 million in net proceeds to the
Company or its successor or any of its Subsidiaries, and (ii) a Qualified Change of Control.
4. Restrictions on Transfer of Executive Securities.
(a) Transfer of Executive Securities. The holders of Executive Securities shall not
Transfer any interest in any Executive Securities, except pursuant to (i) the provisions of
Section 3 hereof, (ii) the provisions of Articles 9 and 10 of the LLC
Agreement, or (iii) the provisions of Section 4(b) below.
(b) Certain Permitted Transfers. The restrictions in this Section 4 will not
apply with respect to any Transfer of Executive Securities made pursuant to applicable laws of
descent and distribution or to such Person’s legal guardian in the case of any mental incapacity or
among such Person’s Family Group; provided that the restrictions contained in this
Section 4 will continue to be applicable to the Executive Securities after any Transfer of
the type referred to above and the transferees of such Executive Securities must agree in writing
to be bound by the provisions of this Agreement. Any transferee of Executive Securities pursuant
to a Transfer in
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accordance with the provisions of this Section 4(b) is herein referred to as a
“Permitted Transferee.” Upon the Transfer of Executive Securities pursuant to this
Section 4(b), the transferring holder of Executive Securities will deliver a written notice
(a “Transfer Notice”) to the Company. The Transfer Notice will disclose in reasonable
detail the identity of the Permitted Transferee(s).
5. Additional Restrictions on Transfer of Executive Securities.
(a) Legend. The certificates representing the Executive Securities will bear a legend
in substantially the following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED AS OF
___, 2006, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
SUCH LAWS OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN
REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AMENDED AND RESTATED
SENIOR MANAGEMENT AGREEMENT BETWEEN THE COMPANY AND AN EXECUTIVE OF THE COMPANY
DATED AS OF ___, 2006. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE
HOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”
(b) Opinion of Counsel. No holder of Executive Securities may Transfer any Executive
Securities (except pursuant to an effective registration statement under the Securities Act)
without first delivering to the Company a written notice describing in reasonable detail the
proposed Transfer, together with an opinion of counsel (reasonably acceptable in form and substance
to the Company) that neither registration nor qualification under the Securities Act and applicable
state securities laws is required in connection with such transfer. In addition, if the holder of
the Executive Securities delivers to the Company an opinion of counsel that no subsequent Transfer
of such Executive Securities shall require registration under the Securities Act, the Company shall
promptly upon such contemplated Transfer deliver new certificates for such Executive Securities
that do not bear the Securities Act portion of the legend set forth in Section 5(a). If
the Company is not required to deliver new certificates for such Executive Securities not bearing
such legend, the holder thereof shall not Transfer the same until the prospective transferee has
confirmed to the Company in writing its agreement to be bound by the conditions contained in this
Section 5.
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PROVISIONS RELATING TO EMPLOYMENT
6. Employment. Employer agrees to employ Executive and Executive accepts such
employment for the period beginning as of the date hereof and ending upon his separation pursuant
to Section 6(c) hereof (the “Employment Period”). The Employment Period will have
an initial term of five years from April 9, 2004, and shall be subject to renewal for one-year
periods thereafter unless either party hereto gives the other notice of non-renewal not less than
45 days prior to the end of the current term, with the initial term commencing April 9, 2004.
(a) Position and Duties.
(i) During the Employment Period, Executive shall serve as the President, Chief
Executive Officer and Chairman of the boards of directors of each of Employer and Xxxxxx
Petroleum, Inc., a Texas corporation (“Texas Employer”). While serving in these
capacities, Executive will focus primarily on expanding Employer’s and Texas Employer’s
businesses through product innovation, organic growth, green-field projects and tuck-in
acquisitions and developing a long-term plan for Executive to transition into more of a
long-term strategic vision role and less of a day-to-day operating role with Employer and
Texas Employer.
(ii) Executive shall report to the Board, and Executive shall devote his full business
time and attention to the business and affairs of Employer, Texas Employer and their
Subsidiaries; provided, however, that Executive may participate in charitable and community
service activities and manage his personal investments, in each case in a manner consistent
with past practices and so long as such participation and management does not collectively
materially interfere with Executive’s duties hereunder.
(iii) During the period from and after the second anniversary of the Closing Date until
a Qualified Change of Control, if and for so long as Executive is serving and has continued
to serve as the Chief Executive Officer of Employer and/or Texas Employer, Executive shall
have the authority and discretion to determine what amount, if any, shall be paid to any Key
Employee (as defined in the Merger Agreement) in the case that and at the time that any such
person is terminated by the Company without Cause (as “Cause” is defined in the Key
Employee’s Executive Unit Agreement) after the second anniversary of the Closing Date;
provided that Executive may not award in excess of one half of any such person’s annual base
salary in effect immediately prior to such termination without the prior consent of the
Board and any severance payment awarded to any such person shall be payable in equal monthly
installments in amounts consistent with and otherwise in accordance with the Company’s
general payroll practices. Executive understands and agrees that the this Section
6(a)(iii) applies only with respect to a termination by the Company without Cause of any
Key Employee and for no other present or future employee of the Company or in connection
with the cessation of any such person’s employment other than due to a termination by the
Company without Cause.
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(b) Salary, Bonus and Benefits.
(i) During the Employment Period, Employer will pay Executive a base salary of $400,000
per annum, or such higher amount as determined by the Board in its discretion from time to
time (the “Annual Base Salary”). In addition to the Annual Base Salary, Executive
shall be eligible for an annual bonus following the end of each fiscal year during the
Employment Period, which annual bonus in any given year shall be determined by the
compensation committee of the Board and be based upon the achievement by the Company,
Employer and their Subsidiaries of certain performance objectives approved by the Board with
respect to each such year. In addition, during the Employment Period, Executive will be
entitled to such other benefits approved by the Board and made available to the senior
management, including retirement, pension, profit-sharing, stock option, health plan,
dental, vacation, sick leave and welfare or any other plan or plans of the Company, Employer
and their Subsidiaries which may now or hereafter be in effect.
(ii) During the Employment Period, the Company shall reimburse Executive for all
reasonable business expenses incurred by him in the course of performing his duties and
responsibilities under this Agreement which are consistent with the Company’s policies in
effect from time to time with respect to travel, entertainment and other business expenses,
subject to the Company’s requirements with respect to reporting and documentation of such
expenses.
(iii) Executive is permitted six weeks vacation per fiscal year, of which two weeks
shall be permitted to be carried forward to the subsequent fiscal year.
(c) Separation. The Employment Period will continue until (i) Executive’s resignation
(with or without Good Reason), Disability or death or (ii) the Board terminates Executive’s
employment (with Cause or without Cause). In the event that Executive is terminated by the
Employer without Cause or Executive resigns for Good Reason after the date hereof, Employer shall
pay to Executive an aggregate amount equal to his Annual Base Salary, payable in equal installments
on the Employer’s regular salary payment dates, until the earlier of (x) one year from the
termination of his employment, and (y) the fifth anniversary of the date hereof. If the Employment
Period is terminated for any other reason, Executive shall only be entitled to receive his Annual
Base Salary through the date of termination and shall not be entitled to any other salary,
compensation or benefits from the Company or its Subsidiaries thereafter. Executive will be under
no obligation to mitigate any damages or will there be any right of offset against any other
earnings made by Executive.
7. Confidential Information.
(a) Obligation to Maintain Confidentiality. Executive acknowledges that the
information, observations and data obtained by him during the course of his performance under this
Agreement concerning the business and affairs of the Company, Employer and their respective
Subsidiaries and Affiliates are the property of the Company, Employer or such
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Subsidiaries and Affiliates, including information concerning acquisition opportunities in or
reasonably related to the Company’s and Employer’s business or industry of which Executive becomes
aware during the Employment Period. Therefore, Executive agrees that he will not disclose to any
unauthorized Person or use for his own account any of such information, observations or data
without the Board’s written consent, unless and to the extent that the aforementioned matters, (i)
become generally known to and available for use by the public other than as a result of Executive’s
acts or omissions to act, (ii) was known to Executive prior to Executive’s employment with
Employer, the Company or any of their Subsidiaries and Affiliates, or (iii) is required to be
disclosed pursuant to any applicable law or court order. Executive agrees to deliver to the
Company at a Separation, or at any other time the Company may request in writing, all memoranda,
notes, plans, records, reports and other documents (and copies thereof) relating to the business of
the Company, Employer and their respective Subsidiaries and Affiliates (including, without
limitation, all acquisition prospects, lists and contact information) which he may then possess or
have under his control.
(b) Ownership of Property. Executive acknowledges that all inventions, innovations,
improvements, developments, methods, processes, programs, designs, analyses, drawings, reports, and
all similar or related information (whether or not patentable) that relate to the Company’s,
Employer’s or any of their respective Subsidiaries’ or Affiliates’ actual or anticipated business,
research and development, or existing or future products or services and that are conceived,
developed, contributed to, made, or reduced to practice by Executive (either solely or jointly with
others) while employed by the Company, Employer or any of their respective Subsidiaries or
Affiliates (including any of the foregoing that constitutes any proprietary information or records)
(“Work Product”) belong to the Company, Employer or such Subsidiary or Affiliate and
Executive hereby assigns, and agrees to assign, all of the above Work Product to the Company,
Employer or to such Subsidiary or Affiliate. Any copyrightable work prepared in whole or in part
by Executive in the course of his work for any of the foregoing entities shall be deemed a “work
made for hire” under the copyright laws, and the Company, Employer or such Subsidiary or Affiliate
shall own all rights therein. To the extent that any such copyrightable work is not a “work made
for hire,” Executive hereby assigns and agrees to assign to the Company, Employer or such
Subsidiary or Affiliate all right, title, and interest, including without limitation, copyright in
and to such copyrightable work. Executive shall promptly disclose such Work Product and
copyrightable work to the Board and perform all actions reasonably requested by the Board (whether
during or after the Employment Period) to establish and confirm the Company’s, Employer’s or such
Subsidiary’s or Affiliate’s ownership (including, without limitation, assignments, consents, powers
of attorney, and other instruments).
(c) Third Party Information. Executive understands that the Company, Employer and
their respective Subsidiaries and Affiliates will receive from third parties confidential or
proprietary information (“Third Party Information”) subject to a duty on the Company’s,
Employer’s and their respective Subsidiaries and Affiliates’ part to maintain the confidentiality
of such information and to use it only for certain limited purposes. During the Employment Period
and thereafter, and without in any way limiting the provisions of Section 7(a) above,
Executive will hold Third Party Information in the strictest confidence and
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will not disclose to anyone (other than personnel of the Company, Employer or their respective
Subsidiaries and Affiliates who need to know such information in connection with their work for the
Company, Employer or their respective Subsidiaries and Affiliates) or use, except in connection
with his work for the Company, Employer or their respective Subsidiaries and Affiliates, Third
Party Information unless expressly authorized by a member of the Board in writing.
(d) Use of Information of Prior Employers. During the Employment Period, Executive
will not improperly use or disclose any confidential information or trade secrets, if any, of any
former employers or any other Person to whom Executive has an obligation of confidentiality, and
will not bring onto the premises of the Company, Employer or any of their respective Subsidiaries
or Affiliates any unpublished documents or any property belonging to any former employer or any
other Person to whom Executive has an obligation of confidentiality unless consented to in writing
by the former employer or Person. Executive will use in the performance of his duties only
information which is (i) generally known and used by persons with training and experience
comparable to Executive’s and which is (x) common knowledge in the industry or (y) is otherwise
legally in the public domain, (ii) is otherwise provided or developed by the Company, Employer or
any of their respective Subsidiaries or Affiliates or (iii) in the case of materials, property or
information belonging to any former employer or other Person to whom Executive has an obligation of
confidentiality, approved for such use in writing by such former employer or Person.
8. Noncompetition and Nonsolicitation. Executive acknowledges that in the course of
his employment with Employer he has and will become familiar with the Company’s, Employer’s and
their respective Subsidiaries’ trade secrets and with other confidential information concerning the
Company, Employer and such Subsidiaries and that his services will be of special, unique and
extraordinary value to the Company, Employer and such Subsidiaries. Therefore, Executive agrees
that:
(a) Noncompetition. During the Employment Period and for a period of two years
thereafter (the “Noncompete Period”), Executive shall not, anywhere in the United States or
in any geographical area in which the Company or its Subsidiaries engage or plan to engage in
business, directly or indirectly through any other Person, own, manage, control, participate in,
consult with, render services for, or in any manner engage in any business competing with the
businesses of the Company, Employer or their respective Subsidiaries or any business in which the
Company, Employer or any of their respective Subsidiaries has entertained discussions or has
requested and received information relating to the acquisition of such business by the Company,
Employer or their respective Subsidiaries within two years prior to the Separation. Nothing herein
shall prohibit Executive from being a passive owner of not more than 2% of the outstanding stock of
any class of a corporation that is publicly traded, so long as Executive has no active
participation in the business of such corporation.
(b) Nonsolicitation. During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee of the Company,
Employer or their respective Subsidiaries to leave the employ of the Company,
- 12 -
Employer or such Subsidiary, or in any way interfere with the relationship between the
Company, Employer and any of their respective Subsidiaries and any employee thereof, (ii) hire any
person who was an employee of the Company, Employer or any of their respective Subsidiaries within
two years after such person ceased to be an employee of the Company, Employer or any of their
Subsidiaries, (iii) induce or attempt to induce any customer, supplier, licensee or other business
relation of the Company, Employer or any of their respective Subsidiaries to cease doing business
with the Company, Employer or such Subsidiary or in any way interfere with the relationship between
any such customer, supplier, licensee or business relation and the Company and any Subsidiary or
(iv) directly or indirectly acquire or attempt to acquire an interest in any business competing
with the business of the Company, Employer or any of their respective Subsidiaries and with which
the Company, Employer and any of their respective Subsidiaries has entertained discussions or has
requested and received information relating to the acquisition of such business by the Company,
Employer or any of their respective Subsidiaries in the two-year period immediately preceding a
Separation.
(c) Enforcement. If, at the time of enforcement of Section 7 or this
Section 8, a court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum duration, scope or
geographical area reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall be allowed to revise the restrictions contained herein to
cover the maximum duration, scope and area permitted by law. Because Executive’s services are
unique and because Executive has access to confidential information, the parties hereto agree that
money damages would be an inadequate remedy for any breach of this Agreement. Therefore, in the
event a breach or threatened breach of this Agreement, the Company, Employer, their respective
Subsidiaries or their successors or assigns may, in addition to other rights and remedies existing
in their favor, apply to any court of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof
(without posting a bond or other security).
(d) Additional Acknowledgments. Executive acknowledges that the provisions of this
Section 8 are in consideration of the issuance of the Executive Securities by the Company
and additional good and valuable consideration as set forth in this Agreement. In addition,
Executive agrees and acknowledges that the restrictions contained in Section 7 and this
Section 8 do not preclude Executive from earning a livelihood, nor do they unreasonably
impose limitations on Executive’s ability to earn a living. In addition, Executive acknowledges
(i) that the business of the Company, Employer and their respective Subsidiaries will be conducted
throughout the United States, (ii) notwithstanding the state of incorporation or principal office
of the Company, Employer or any of their respective Subsidiaries, or any of their respective
executives or employees (including the Executive), it is expected that the Company and Employer
will have business activities and have valuable business relationships within its industry
throughout the United States, and (iii) as part of his responsibilities, Executive will be
traveling around the world in furtherance of Employer’s business and its relationships. Executive
agrees and acknowledges that the potential harm to the Company and Employer of the non-enforcement
of Section 7 and this Section 8 outweighs any potential harm to Executive of its
- 13 -
enforcement by injunction or otherwise. Executive acknowledges that he has carefully read
this Agreement and has given careful consideration to the restraints imposed upon Executive by this
Agreement, and is in full accord as to their necessity for the reasonable and proper protection of
confidential and proprietary information of the Company and Employer now existing or to be
developed in the future. Executive expressly acknowledges and agrees that each and every restraint
imposed by this Agreement is reasonable with respect to subject matter, time period and
geographical area.
GENERAL PROVISIONS
9. Definitions.
“Affiliate” means, (i) with respect to any Person, any Person that controls, is
controlled by or is under common control with such Person or an Affiliate of such Person, and (ii)
with respect to any Investor, any general or limited partner of such Investor, any employee or
owner of any such partner, or any other Person controlling, controlled by or under common control
with such Investor.
“Board” means the board of managers of the Company.
“Cause” shall mean (i) the commission by Executive of a felony, of theft, fraud or
embezzlement or of any other intentional act or omission involving dishonesty or disloyalty with
respect to the Company or any of its customers or suppliers; (ii) the inability to perform material
duties and responsibilities as result of any addiction to alcohol or drugs, other than drugs
legally prescribed and administered by a duly licensed physician, or the reporting to work under
the influence of alcohol or illegal drugs, (iii) the willful, substantial and repeated failure to
follow lawful written instructions of the Board, (iv) willful misconduct with respect to the
Company or any of its Subsidiaries or (v) breach of any confidentiality agreements which xxxxx the
Company or material breach of this Agreement.
“Disability” means Executive’s inability to perform the essential duties,
responsibilities and functions of his position with the Company and its Subsidiaries as a result of
any disability or incapacity for a period of 6 consecutive months, as determined by a physician
selected in good faith by the Board.
“Executive Securities” means all Units acquired by Xxxxxx XX and Executive pursuant to
the Merger Agreement, the Prior Senior Management Agreement or this Agreement. Executive
Securities will continue to be Executive Securities in the hands of any holder other than Executive
or Xxxxxx XX (except for the Company and the Investors and except for transferees in a Public
Sale), and except as otherwise provided herein, each such other holder of Executive Securities will
succeed to all rights and obligations attributable to Executive and Xxxxxx XX as a holder of
Executive Securities hereunder. Executive Securities will also include equity of the Company (or a
corporate successor to the Company) issued with respect to Executive Securities (i) by way of a
unit split, unit dividend, conversion, or other recapitalization or (ii) by way of reorganization
or recapitalization of the Company in connection with the
- 14 -
incorporation of a corporate successor prior to a Public Offering. Notwithstanding the
foregoing, all unvested Units shall remain unvested Units after any Transfer thereof.
“Fair Market Value” of each unit or share of capital stock or other type of security
means the average of the closing prices of the sales of any such security on all securities
exchanges on which such security may at the time be listed, or, if there have been no sales on any
such exchange on any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so listed, the average of
the representative bid and asked prices quoted in the Nasdaq Stock Market as of 4:00 P.M., New York
time, or, if on any day such security is not quoted in the Nasdaq Stock Market, the average of the
highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported
by the National Quotation Bureau Incorporated, or any similar successor organization, in each such
case averaged over a period of 21 days consisting of the day as of which the Fair Market Value is
being determined and the 20 consecutive business days prior to such day. With respect to any unit
or other share of capital stock or other type of security which is not, as of the date of
determination, listed on any securities exchange or quoted in the Nasdaq Stock Market or the
over-the-counter market, the Fair Market Value thereof shall be the fair value of such unit or
share or other type of security, as the case may be, determined in good faith by the Board, without
regard for any minority discount or lack of marketability discount. Executive or Xxxxxx XX, as
the case may be, may hire an independent outside appraiser (at such Person’s expense) to determine
the Fair Market Value of Executive Securities at any time such determination has been made in good
faith by the Board hereunder. If the determination by Executive’s or Xxxxxx LP’s appraiser is less
than 110% of the Board’s determination, the Board’s determination of Fair Market Value shall be
determinative. If the determination by Executive’s or Xxxxxx LP’s appraiser is greater than 110%
of the Board’s determination, the Company shall promptly, but in any event within 5 business days
after the determination made by Executive’s or Xxxxxx LP’s appraiser, as the case may be, identify
an independent outside appraiser. The Company’s appraiser and the Executive’s appraiser (or Xxxxxx
LP’s appraiser) shall select a third independent outside appraiser to make the final determination
of Fair Market Value, and the expense of such third party appraiser shall be shared equally by the
Company and the Executive.
“Family Group” means a Person’s spouse and descendants (whether natural or adopted),
and any trust, family limited partnership, limited liability company or other entity wholly owned,
directly or indirectly, by such Person or such Person’s spouse and/or descendants that is and
remains solely for the benefit of such Person and/or such Person’s spouse and/or descendants and
any retirement plan for such Person.
“Good Reason” means (i) the assignment to the Executive of or reduction in duties and
responsibilities in a manner inconsistent with a senior executive position, (ii) any material
failure by the Company to comply with the provisions of this Agreement, or (iii) any relocation of
Executive outside of the Oklahoma City metropolitan area without his consent.
“Investor IRR” means the interest rate compounded annually which, when used as the
discount rate to calculate the net present value as of the date on which the holder of Investor
Senior Preferred Units made a capital contribution with respect to such Units of the aggregate
- 15 -
Inflows and Outflows, causes such net present value to equal zero. For purposes of the
foregoing net present value calculation, (A) distributions shall be positive numbers, (B) capital
contributions shall be negative numbers, (C) the distributions and capital contributions shall be
deemed to have been received or made on the first day of the month nearest the actual date of such
receipt or payment, and (D) tax distributions shall not be taken into account. “Inflows” means
the sum of all cash payments received by the holders of Senior Preferred Units in respect of units
purchased by the Investors in exchange for their $50 million commitment except as provided in (D)
above. “Outflows” means the sum of all cash contributions up to $50 million made by the Investors
to and in the Company to acquire Senior Preferred Units (or otherwise make capital contributions
with respect to such Senior Preferred Units).
“LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of
the Company, as amended from time to time pursuant to its terms.
“Merger Agreement” means the Agreement and Plan of Merger, dated as of January 16,
2004 (as amended from time to time), by and among the Company, Xxxxxx Acquisition Co., Inc.,
Employer and Xxxxxx XX.
“Original Cost” means, (i) with respect to each Existing Carried Common Unit, $0.01,
(ii) with respect to each Existing Co-Invest Unit, $100.00, (iii) with respect to each New
Co-Invest Unit, $100.00 and (iv) with respect to each New Carried Common Unit, $0.00 ( in each case
as proportionately adjusted for all subsequent unit splits, unit dividends and other
recapitalizations).
“Person” means an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization, investment fund, any other business entity and a governmental entity or any
department, agency or political subdivision thereof.
“Public Offering” means the sale in an underwritten public offering registered under
the Securities Act of equity securities of the Company or a corporate successor to the Company or
any of the Company’s Subsidiaries.
“Public Sale” means (i) any sale pursuant to a registered public offering under the
Securities Act or (ii) any sale to the public pursuant to Rule 144 promulgated under the Securities
Act effected through a broker, dealer or market maker (other than pursuant to Rule 144(k) prior to
a Public Offering).
“Qualified Change of Control” means a transaction (or series of related transactions),
the consummation of which results in the acquisition by an independent third party or independent
third parties of at least 51% of the economic interests represented by the equity owned by the
Investors (calculated immediately prior to the occurrence of such event) (whether through a merger,
consolidation, sale or transfer of the Investors’ interests or sale of assets) and the receipt by
the Investors of cash, cash equivalents or marketable securities; provided that, if at least 80% of
the economic interests represented by the equity owned by the Investors is
- 16 -
transferred, regardless of the consideration received, such event will be deemed to be a
Qualified Change of Control.
“Securities Act” means the Securities Act of 1933, as amended from time to time.
“Subsidiary” means, with respect to any Person, any corporation, limited liability
company, partnership, association, or business entity of which (i) if a corporation, a majority of
the total voting power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a majority of
partnership or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination
thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association, or other business entity (other
than a corporation) if such Person or Persons shall be allocated a majority of limited liability
company, partnership, association, or other business entity gains or losses or shall be or control
any managing director or general partner of such limited liability company, partnership,
association, or other business entity. For purposes hereof, references to a “Subsidiary”
of any Person shall be given effect only at such times that such Person has one or more
Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary
of the Company.
“Transfer” means to sell, transfer, assign, pledge or otherwise dispose of (whether
with or without consideration and whether voluntarily or involuntarily or by operation of law).
10. Notices. Any notice provided for in this Agreement must be in writing and must be
either personally delivered, mailed by first class mail (postage prepaid and return receipt
requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the
address below indicated:
If to Employer:
Xxxxxx Petroleum, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Board of Directors
0000 X.X. 00xx Xxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Board of Directors
- 17 -
| with copies to: | ||||||
| To each of the Investors at the addresses below. | ||||||
| Xxxxxxxx & Xxxxx LLP | ||||||
| 000 Xxxx Xxxxxxxx Xxxxx | ||||||
| Xxxxxxx, XX 00000 | ||||||
| Telephone: | (000) 000-0000 | |||||
| Telecopy: | (000) 000-0000 | |||||
| Attention: | Xxxxxxx X. Xxxxxx, P.C. | |||||
| If to the Company: | ||||||
| SPI Petroleum LLC | ||||||
| 0000 X.X. 00xx Xxxxxx | ||||||
| Xxxxx 000 | ||||||
| Xxxxxxxx Xxxx, XX 00000-0000 | ||||||
| Telephone: | (000) 000-0000 | |||||
| Telecopy: | (000) 000-0000 | |||||
| Attention: | Board of Managers | |||||
| with copies to: | ||||||
| To each of the Investors at the addresses below. | ||||||
| and | ||||||
| Xxxxxxxx & Xxxxx LLP | ||||||
| 000 Xxxx Xxxxxxxx Xxxxx | ||||||
| Xxxxxxx, XX 00000 | ||||||
| Telephone: | (000) 000-0000 | |||||
| Telecopy: | (000) 000-0000 | |||||
| Attention: | Xxxxxxx X. Xxxxxx, P.C. | |||||
| If to Executive or Xxxxxx XX: | ||||||
| Xxxxx Xxxxxx | ||||||
| 0000 X.X. 00xx Xxxxxx | ||||||
| Xxxxxxxx Xxxx, XX 00000 | ||||||
| Telephone: | (000) 000-0000 | |||||
| Telecopy: | (000) 000-0000 | |||||
- 18 -
| If to the Investors: | ||||||
| NCA Energy, Inc. | ||||||
| 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000 | ||||||
| Xxxxxxx, XX 00000 | ||||||
| Telephone: | (000) 000-0000 | |||||
| (000) 000-0000 | ||||||
| Attention: | X. Xxxxx Xxxxxxx | |||||
| Xxxxxxxx X. Xxxxxxxx | ||||||
| RBCP Energy Fund Investments, LP | ||||||
| c/o Cadent Energy Partners, LLC | ||||||
| 000 Xxxxxx Xxxxxx, 0xx Xxxxx | ||||||
| Xxxxxxxx, XX 00000 | ||||||
| Telephone: | (000) 000-0000 | |||||
| Telecopy: | (000) 000-0000 | |||||
| Attention: | Xxxxx Xxxxxxxxx | |||||
| Waud Capital Partners, L.P. | ||||||
| 000 Xxxxxxx Xxxxxx, Xxxxx 000 | ||||||
| Xxxx Xxxxxx, XX 00000 | ||||||
| Telephone: | (000) 000-0000 | |||||
| Telecopy: | (000) 000-0000 | |||||
| Attention: | Xxxxx X. Xxxx | |||||
| with a copy to: | ||||||
| Xxxxxxxx & Xxxxx LLP | ||||||
| 000 Xxxx Xxxxxxxx Xxxxx | ||||||
| Xxxxxxx, XX 00000 | ||||||
| Telephone: (000) 000-0000 | ||||||
| Telecopy: (000) 000-0000 | ||||||
| Attention: Xxxxxxx X. Xxxxxx, P.C. | ||||||
or such other address or to the attention of such other Person as the recipient party shall have
specified by prior written notice to the sending party. Any notice under this Agreement will be
deemed to have been given when so delivered or sent or, if mailed, five days after deposit in the
U.S. mail.
11. General Provisions.
(a) Transfers in Violation of Agreement. Any Transfer or attempted Transfer of any
Executive Securities in violation of any provision of this Agreement shall be void, and the Company
shall not record such Transfer on its books or treat any purported transferee of such Executive
Securities as the owner of such equity for any purpose.
- 19 -
(b) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.
(c) Complete Agreement. The Prior Senior Management Agreement is amended, restated
and superseded by this Agreement in its entirety; provided that, notwithstanding the foregoing or
anything else to the contrary in this Agreement, nothing herein shall relieve any party from any
liability for any breach prior to the date hereof of the Prior Senior Management Agreement and any
provision so breached shall not be superseded by this Agreement for purposes of actions taken in
connection with such breach and liabilities related thereto and the rights of the parties hereto
under Section 1(e) of the Prior Senior Management Agreement shall survive this amendment
and restatement. This Agreement, those documents expressly referred to herein and other documents
of even date herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in separate counterparts (including
by means of facsimile), each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein, this Agreement shall
bind and inure to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns (including subsequent holders of Executive Securities); provided
that the rights and obligations of Executive and Xxxxxx XX under this Agreement shall not be
assignable except in connection with a permitted transfer of Executive Securities hereunder.
(f) Choice of Law. The law of the State of Delaware will govern all questions
concerning the relative rights of the Company, Employer and its securityholders. All other
questions concerning the construction, validity and interpretation of this Agreement and the
exhibits hereto will be governed by and construed in accordance with the internal laws of the State
of Delaware, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
(g) Remedies. Each of the parties to this Agreement (and the Investors as third-party
beneficiaries) will be entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including attorney’s fees) caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of the
- 20 -
provisions of this Agreement and that any party may in its sole discretion apply to any court
of law or equity of competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
(h) Amendment and Waiver. The provisions of this Agreement may be amended and waived
only with the prior written consent of the Company and Executive and with Basic Investor Approval
(as defined in the LLC Agreement); provided that any amendment, modification, or waiver
which materially and adversely affects any Investor in a manner materially and adversely different
than another Investor shall also require the written consent of that Investor so materially and
adversely affected.
(i) Insurance. The Company, at its discretion, may apply for and procure in its own
name and for its own benefit life and/or disability insurance on Executive in any amount or amounts
considered available. Executive agrees to cooperate in any medical or other examination, supply
any information, and to execute and deliver any applications or other instruments in writing as may
be reasonably necessary to obtain and constitute such insurance. Executive hereby represents that
he has no reason to believe that his life is not insurable at rates now prevailing for healthy men
of his age.
(j) Business Days. If any time period for giving notice or taking action hereunder
expires on a day which is a Saturday, Sunday or holiday in the state in which the Company’s chief
executive office is located, the time period shall be automatically extended to the business day
immediately following such Saturday, Sunday or holiday.
(k) Indemnification and Reimbursement of Payments on Behalf of Executive. The Company
and its Subsidiaries shall be entitled to deduct or withhold from any amounts owing from the
Company or any of its Subsidiaries to Executive any federal, state, local or foreign withholding
taxes, excise taxes, or employment taxes (“Taxes”) imposed with respect to Executive’s
compensation or other payments from the Company or any of its Subsidiaries or Executive’s ownership
interest in the Company, including, without limitation, wages, bonuses, dividends, the receipt or
exercise of equity options and/or the receipt or vesting of restricted equity. In the event the
Company or its Subsidiaries does not make such deductions or withholdings, Executive shall
indemnify the Company and its Subsidiaries for any amounts paid with respect to any such Taxes,
together with any interest, penalties and related expenses thereto.
(l) Termination. This Agreement (except for the provisions of Sections 6(a)
and (b)) shall survive a Separation and shall remain in full force and effect after such
Separation.
(m) Adjustments of Numbers. All numbers set forth herein that refer to unit prices or
amounts will be appropriately adjusted to reflect unit splits, unit dividends, combinations of
units and other recapitalizations affecting the subject class of equity.
(n) Deemed Transfer of Executive Securities. If the Company (and/or the Investors
and/or any other Person acquiring securities) shall make available, at the time and
- 21 -
place and in the amount and form provided in this Agreement, the consideration for the
Executive Securities to be repurchased in accordance with the provisions of this Agreement, then
from and after such time, the Person from whom such units are to be repurchased shall no longer
have any rights as a holder of such units (other than the right to receive payment of such
consideration in accordance with this Agreement), and such units shall be deemed purchased in
accordance with the applicable provisions hereof and the Company (and/or the Investors and/or any
other Person acquiring securities) shall be deemed the owner and holder of such units, whether or
not the certificates therefore have been delivered as required by this Agreement.
(o) No Pledge or Security Interest. The purpose of the Company’s retention of
Executive’s and Simons LP’s certificates and executed security powers is solely to facilitate the
repurchase provisions set forth in Section 3 herein and does not constitute a pledge by
Executive or Xxxxxx XX of, or the granting of a security interest in, the underlying equity.
(p) Rights Granted to The Investors and their Respective Affiliates. Any rights
granted to the Investors and their Affiliates hereunder may also be exercised (in whole or in part)
by their designees (which may be Affiliates of Investors).
(q) Information Rights. So long as Xxxxxx XX holds any Class A Units, (x) the Company
will deliver to Xxxxxx XX the information described in Section 8.1 of the LLC Agreement to the
extent such information is delivered to the Investor Members, (y) Xxxxxx XX shall have the
inspection rights described in Section 8.2 of the LLC Agreement; and (z) Section 8.5(b) of the LLC
Agreement shall not apply to Executive or Xxxxxx XX.
(r) Board Right. Until such time as either (i) the Company is no longer the
beneficial owner of more than 50% of the outstanding capital stock of Global Petroleum, Inc.
(“Global”) or (ii) the closing of an initial Public Offering of Global, so long as
Executive is entitled to be a member of the board of managers of the Company pursuant to Section
4.2(b)(iv) of the LLC Agreement, the Company shall cause Global to allow Executive to be a member
of the board of director’s of Global.
* * * * *
- 22 -
IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Senior
Management Agreement on the date first written above.
| SPI PETROLEUM LLC | ||||||
| By: | /s/ Xxxxxx Fastuca | |||||
| Name: | Xxxxxx
Fastuca
|
|||||
| Its: | ||||||
| XXXXXX PETROLEUM, INC. | ||||||
| By: | /s/ Xxxxxx Fastuca | |||||
| Name: | Xxxxxx
Fastuca
|
|||||
| Its: | ||||||
| SIMONS TEXAS LIMITED PARTNERSHIP | ||||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | Xxxxx X. Xxxxxx | |||||
| Its: | Chairman and Vice President | |||||
| /s/ Xxxxx X. Xxxxxx | ||||||
| Xxxxx Xxxxxx | ||||||
| NCA ENERGY, INC. | ||||
By: |
/s/ Xxxxxxxx X. Xxxxxxxx | |||
Name:
|
Xxxxxxxx X. Xxxxxxxx
|
|||
Its:
|
President
|
|||
| RBCP ENERGY FUND INVESTMENTS, LP | ||||
| By: 2001 RBCP U.S. GP LIMITED | ||||
| Its: General Partner | ||||
By: |
/s/ Xxxx X. Xxxxxx | |||
Name:
|
Xxxx
X. Xxxxxx
|
|||
Its:
|
||||
| WAUD CAPITAL PARTNERS, L.P. | ||||
| By: Waud Capital Partners, L.L.C. | ||||
| Its: General Partner | ||||
By: |
/s/ Xxxxx X. Xxxx | |||
Name:
|
Xxxxx
X. Xxxx
|
|||
Its:
|
||||
