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Exhibit 10.9
FIRST AMENDED AND RESTATED
EXECUTIVE COMPENSATION AND SEVERANCE AGREEMENT
FIRST AMENDED AND RESTATED EXECUTIVE COMPENSATION AND
SEVERANCE AGREEMENT, dated as of June 18, 1998, between Crystal Oil Company, a
Louisiana corporation (the "Company"), and __________ ("Executive").
WHEREAS, the Company and the Executive have previously entered into an
Executive Compensation and Severance Agreement dated as of November 10, 1994
(the "Original Agreement");
WHEREAS, the Board of Directors of the Company (the "Board") has
authorized the Company to enter into new severance arrangements with the
Executive in the form hereof;
WHEREAS, it is possible that at some time in the future the Company may
enter into a transaction which would involve a Change in Control (as hereinafter
defined) or may become subject to a proposed or threatened Change in Control;
and
WHEREAS, in connection with the foregoing, Executive may, in addition
to Executive's regular duties, be called upon to assist in the assessment of any
such proposals, advise management and the Board as to whether such proposals
would be in the best interests of the Company and its shareholders, and to take
such other actions as the Board might determine to be appropriate;
NOW, THEREFORE, to assure the Company that it will have the continued
dedication of Executive and the availability of Executive's advice and counsel
notwithstanding the possibility, threat or occurrence of a change of control,
and to induce Executive to remain in the employ of the Company, and for other
good and valuable consideration, the Company and Executive agree as follows:
SECTION 1. Original Agreement Terminated. The Original Agreement is
hereby terminated and of no further force or effect.
SECTION 2. Definitions. For purposes of this Agreement, the following
terms shall have the meanings ascribed to them below:
(a) "Beneficial Ownership" shall have the meaning set forth in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect on the
date hereof, except that a Person will not be deemed to beneficially own any
shares of capital stock (i) that are tendered pursuant to a tender or exchange
offer made by that Person or an affiliate or associate (as such terms are
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as in effect on
the date hereof) of that Person until the tendered shares are accepted for
purchase or exchange or (ii) that are subject to an agreement, arrangement or
understanding relating to the purchase of such shares as long as such Person has
no direct or indirect rights of ownership or voting with respect to such shares.
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(b) "Cause" shall mean the termination of the employment of the
Executive by the Company for (i) dishonesty, (ii) conviction of a felony or
(iii) the continued failure by Executive to perform the material duties assigned
to Executive that are consistent with the position of Executive with the Company
and that would not permit Executive to terminate employment for Good Reason
after notice of such failure has been given by the Company and a reasonable
opportunity to cure is provided to Executive.
(c) "Change in Control" shall be deemed to have occurred if (i) any
Person other than a Designated Person, has Beneficial Ownership of securities of
the Company representing 40% or more of the Voting Power, (ii) there shall occur
a change in the composition of a majority of the Board within any period of four
consecutive years which change shall not have been approved by a majority of the
Board as constituted immediately prior to the commencement of such period, (iii)
at any meeting of the shareholders of the Company called for the purpose of
electing directors, more than one of the persons nominated by the Board for
election as directors shall fail to be elected or (iv) a reorganization, merger
or consolidation or sale or other disposition of all or substantially all of the
assets of the Company is consummated, unless immediately following any such
transaction (A) holders who were the beneficial owners of capital stock of the
Company immediately prior to any such transaction have Beneficial Ownership of
more than 60% of the then outstanding shares of capital stock and Voting Power,
respectively, following such transaction in substantially the same proportions
as their ownership immediately prior to such transaction, (B) no Person has
Beneficial Ownership of 40% or more of the then outstanding shares of capital
stock and Voting Power, respectively, following such transaction, except to the
extent such ownership existed prior to such transaction, and (C) at least a
majority of the members of the Board resulting from such transaction were
members of the Board at the time of the execution of the initial agreement or
the initial action of the Board providing for such transaction.
(d) "Designated Person" shall mean any one or more of (i) Quantum Fund
NV, Quantum Partners LDC or any of their affiliates, (ii) any Person whose
Beneficial Ownership of securities representing 40% or more of the Voting Power
is a result of such Person acquiring securities as an underwriter in an
underwritten public offering of such securities, (iii) any Person who has
Beneficial Ownership of securities representing 40% or more of the Voting Power,
who is eligible, under Rule 13d-1(b)(1) of the General Rules and Regulations of
the Securities and Exchange Commission under the Securities Exchange Act of
1934, to file (and has timely filed) a short-form statement on Schedule 13G (or
any substantially similar schedule which may supersede such Schedule) with
respect to such person's Beneficial Ownership and as to whom all conditions of
such eligibility are continuously met to the extent provided in such Rule
13d-1(b)(1) and in all other applicable provisions of Rule 13d-1, provided that
if such person ever ceases to be so eligible or if any such condition shall
cease to have been met, such Person shall no longer be deemed to be a
"Designated Person", and (iv) Executive or any Person that includes Executive.
(e) "Disability" shall mean a disability involving the Executive that
prevents the Executive from performing his duties with the Company for more than
a period of six consecutive months.
(f) "Good Reason" shall mean the termination of the Executive's
employment with the Company due to (i) the assignment of Executive to any duties
or responsibilities that are materially
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inconsistent with Executive's position and status with the Company immediately
prior to the Change in Control or (ii) a reduction of Executive's annual salary
(including any deferred portions thereof) or benefits.
(g) "Person" shall have the meaning set forth in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as in effect on the date
hereof.
(h) "Voting Power" shall mean the voting power of the outstanding
securities of the Company having the right under ordinary circumstances to vote
at an election of the Board.
SECTION 3. Change in Control Bonus. If during the term of this
Agreement, there shall occur a Change in Control, the Company will provide or
cause to be provided to Executive immediately following the occurrence of the
Change in Control a lump-sum payment in an amount equal to _____________ times
the Executive's most recent annual base salary, without giving effect to any
reduction thereof that may have been made without Executive's consent. The
payments provided for pursuant to this Section 3 shall not be payable in the
event the employment of the Executive is terminated by the Company for Cause or
Disability, by reason of the death of the Executive or by the Executive for any
reason other than Good Reason.
SECTION 4. Rights and Benefits upon Termination. In addition to any
payments that may be made pursuant to Section 3, if during the term of this
Agreement and within one year following the occurrence of a Change in Control
the employment of the Executive is terminated by the Company for any reason
other than Cause or Disability, by reason of death or by the Executive for Good
Reason, the Company agrees to provide or cause to be provided to Executive the
following rights and benefits:
(i) Insurance and Other Special Benefits. To the extent
Executive is eligible thereunder, for a period of ___ months following
termination or until Executive's retirement upon reaching age 65,
whichever is sooner, Executive shall continue to be covered by the life
insurance, medical and dental plans, and accident and disability plans
of the Company and its subsidiaries or any successor plan or program in
effect at Termination for employees in the same class or category as
Executive, subject to the terms of such plans and to Executive's making
any required contributions thereto. In the event Executive is
ineligible to continue to be so covered under the terms of any such
benefit plan or program, or, in the event Executive is eligible but the
benefits applicable to Executive are not substantially equivalent to
the benefits applicable to Executive immediately prior to Termination,
then, for a period of ___ months following Termination (or until
Executive's retirement upon reaching age 65, whichever is sooner), the
Company shall provide to Executive through other sources such benefits,
including such additional benefits, as may be necessary to make the
benefits applicable to Executive substantially equivalent to those in
effect before Termination; provided, however, that if during such
period Executive should enter into the employ of another company or
firm which provides health benefits to its executives in general and
for which Executive is eligible, the Company's obligations to provide
such benefits shall cease. Nothing contained in this paragraph shall be
deemed to require or permit termination or restriction of any of
Executive's coverage under any plan or program of the Company or any
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of its subsidiaries or any successor plan or program thereto to which
Executive is entitled under the terms of such plan or program, whether
at the end of the aforementioned ___-month period or at any other time.
(ii) Other Benefit Plans. The specific arrangements referred to
in this Section 4 are not intended to exclude Executive's participation
in other benefit plans in which Executive currently participates or
which are available to executive personnel generally in the class or
category of Executive or to preclude other compensation or benefits as
may be authorized by the Board from time to time.
(iii) Duty to Mitigate. Executive's entitlement to benefits
hereunder shall not be governed by any duty to mitigate Executive's
damages by seeking further employment nor offset by any compensation
which Executive may receive from future employment.
SECTION 5. Confidentiality; Remedies. (a) Confidentiality. Executive
agrees that at all times following Termination, Executive will not, without the
prior written consent of the Company, disclose to any person, firm or
corporation any confidential information of the Company or its subsidiaries
which is now known to Executive or which hereafter may become known to Executive
as a result of his employment or association with the Company and which could be
helpful to a competitor, unless such disclosure is required under the terms of a
valid and effective subpoena or order issued by a court or governmental body;
provided, however, that the foregoing shall not apply to confidential
information which becomes publicly disseminated by means other than a breach of
this Agreement.
(b) Remedies for Breach. It is recognized that damages in the event of
breach of this Section 5 by Executive would be difficult, if not impossible, to
ascertain, and it is therefore agreed that the Company, in addition to and
without limiting any other remedy or right it may have, shall have the right to
an injunction or other equitable relief in any court of competent jurisdiction
enjoining any such breach, and Executive hereby waives any and all defenses
Executive may have on the ground of lack of jurisdiction or competence of the
court to grant such an injunction or other equitable relief. The existence of
this right shall not preclude the Company from pursuing any other rights and
remedies at law or in equity which the Company may have.
SECTION 6. Reduction in Payments. (a) For purposes of this section, (i)
"Payment" shall mean any payment or distribution in the nature of compensation
to or for the benefit of Executive, whether paid or payable pursuant to this
Agreement or otherwise; (ii) "Agreement Payment" shall mean a Payment paid or
payable pursuant to this Agreement (disregarding this Section); (iii) "Net After
Tax Receipt" shall mean the Present Value of a Payment net of all taxes imposed
on Executive with respect thereto under Sections 1 and 4999 of the Internal
Revenue Code of 1986, as amended (the "Code), determined by applying the highest
marginal rate under Section 1 of the Code which applied to the Executive's
taxable income for the immediately preceding taxable year; (iv) "Present Value"
shall mean such value determined in accordance with Section 280G (d)(4) of the
Code; and (v) "Safe Harbor" shall mean the sum of $1.00 less than three times
the Executive's "base amount" within the meaning of that term in Section 280G of
the Code.
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(b) Anything in this Agreement to the contrary notwithstanding, in the
event KPMG Peat Marwick or such other accounting firm that may be agreed upon by
the Company and Executive (the "Accounting Firm") shall determine that receipt
of all Payments would subject Executive to tax under Section 4999 of the Code,
it shall determine whether the receipt of the Safe Harbor would result in
greater Net After Tax Receipts to the Executive than receipt of all the
Agreement Payments. If such firm determines that the receipt of the Safe Harbor
would so result, the aggregate Payments shall be reduced to the Safe Harbor as
provided below.
If the Accounting Firm determines that aggregate Payments should be
reduced to the Safe Harbor, the Company shall promptly give Executive notice to
that effect and a copy of the detailed calculation thereof, and the Executive
may elect, in his sole discretion, which and how much of the Agreement Payments
or any other Payments shall be eliminated or reduced (as long as after such
election the present value of the aggregate Payments equals the Safe Harbor),
and shall advise the Company in writing of his election within ten days of his
receipt of notice. If no such election is made by the Executive within such 10
day period, the Company may elect which of the Agreement Payments shall be
eliminated or reduced (as long as after such election the present value of the
aggregate Payments equals the Safe Harbor) and shall notify the Executive
promptly of such election. All determinations made by the Accounting Firm under
this Section shall be binding upon the Company and Executive and shall be made
within 60 days of a termination of employment of the Executive. As promptly as
practicable following such determination, the Company shall pay or distribute
for the benefit of Executive such Agreement Payments as are then due to
Executive under this Agreement and shall promptly pay to or distribute for the
benefit of Executive in the future such Agreement Payments as become due to
Executive under this Agreement.
(c) While it is the intention of the Company and the Executive to
reduce the amounts payable or distributable to Executive hereunder only if the
aggregate Net After Tax Receipts to Executive would thereby be increased, as a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that amounts will have been paid or distributed by the Company to or
for the benefit of Executive pursuant to this Agreement which should not have
been so paid or distributed ("Overpayment") or that additional amounts which
will have not been paid or distributed by the Company to or for the benefit of
Executive pursuant to this Agreement could have been so paid or distributed
("Underpayment"), in each case, consistent with the calculation of the Reduced
Amount hereunder. In the event that the Accounting Firm, based either upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
Executive which the Accounting Firm believes has a high probability of success
determines that an Overpayment has been made, any such Overpayment paid or
distributed by the Company to or for the benefit of the Executive shall be
treated for all purposes as a loan to Executive which Executive, shall repay to
the Company together with interest at the applicable federal rate provided for
in Section 7872 (f)(2) of the Code; provided, however, that no such loan shall
be deemed to have been made and no amount shall be payable by Executive to the
Company if and to the extent such deemed loan and payment would not either
reduce the amount on which the Executive is subject to tax under Section 1 and
Section 4999 of the Code or generate a refund of such taxes. In the event that
the Accounting Firm, based upon controlling precedent or substantial authority,
determines that an Underpayment has occurred, any such Underpayment shall
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be promptly paid by the Company to or for the benefit of the Executive together
with interest at the applicable federal rate provided for in Section 7872 of the
Code.
SECTION 7. Term of Agreement. This Agreement shall terminate two years
from the date hereof; provided, however, that the term of this Agreement shall
automatically be extended on the anniversary date hereof for successive one-year
periods unless either the Executive or the Company gives notice to the other
party prior to such anniversary date of such party's desire that the term of
this Agreement not be so extended.
SECTION 8. Miscellaneous. (a) Assignment. No right, benefit or interest
hereunder shall be subject to assignment, anticipation, alienation, sale,
encumbrance, charge, pledge, hypothecation or set-off in respect of any claim,
debt or obligation, or to execution, attachment, levy or similar process;
provided, however, that Executive may assign any right, benefit or interest
hereunder if such assignment is permitted under the terms of any plan or policy
of insurance or annuity contract governing such right, benefit or interest.
(b) Construction of Agreement. Except as expressly provided herein,
nothing in this Agreement shall be construed to amend any provision of any plan
or policy of the Company. This Agreement is not, and nothing herein shall be
deemed to create, a commitment of continued employment of Executive by the
Company or any of its subsidiaries. The benefits provided under this Agreement
shall be in addition to any other compensation agreement or arrangement that the
Company may have with Executive.
(c) Amendment. This Agreement may not be amended, modified or canceled
except by written agreement of the parties.
(d) Waiver. No provision of this Agreement may be waived except by a
writing signed by the party to be bound thereby.
(e) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect to
the fullest extent permitted by law.
(f) Successors. This Agreement shall be binding upon and inure to the
benefit of Executive and Executive's personal representative and heirs, and the
Company and any successor organization or organizations. For purposes of Section
3 and 4 of this Agreement, the term "Company" shall include Crystal Oil Company
and any successor organization or organizations thereto or any company that
acquires all or substantially all of its assets.
(g) Taxes. Any payment or delivery required under this Agreement shall
be subject to all requirements of the law with regard to withholding of taxes,
filing, making of reports and the like, and the Company shall use its best
efforts to satisfy promptly all such requirements.
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(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA, WITHOUT GIVING EFFECT TO ITS
CONFLICTS OF LAWS PRINCIPLES.
(i) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the matters covered
hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CRYSTAL OIL COMPANY
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Name:
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Title:
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EXECUTIVE:
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Name:
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