EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the 1st day
of May, 2004, by and between MAPCO Express, Inc., a Delaware corporation
("Employer"), and Uzi Yemin, an Israeli citizen ("Employee").
Recitals
WHEREAS, Employer desires to employ Employee to render services to it for
the period and upon the terms and conditions provided for in this Agreement;
and
WHEREAS, Employee wishes to serve in the employ of Employer for the
benefit of Employer for the period and upon the terms and conditions provided
for in this Agreement.
NOW THEREFORE, for the reasons set forth above and in consideration of the
mutual promises and agreements set forth herein, the receipt, adequacy,
sufficiency, and value of which are hereby acknowledged by the parties, Employer
and Employee agree as follows:
1. Employment Services, Duties, and Responsibilities. Effective as of May
1, 2004, Employer agrees to employ Employee and Employee accepts employment as
Employer's President and Chief Executive Officer. Employee agrees to perform the
services required by and have the duties and responsibilities designated by
Employer for such position, as determined by Employer from time to time, and to
devote Employee's best efforts on a full-time basis to such position. Employee's
services, duties, responsibilities, and decisions shall be subject to the
control of, review of, and change by Employer, the board of directors of Delek
US Holdings, Inc. ("Delek US"), and such other persons as Employer may designate
from time to time.
2. Compensation and Benefits. Employer agrees to provide Employee with the
following compensation and benefits:
a. Salary. Employer shall pay Employee, and Employee shall accept from
Employer, salary based on a monthly rate of Twenty-One Thousand U.S.
Dollars (US$21,000), subject to any and all deductions and withholdings
required by law and authorized by Employee (as permitted by Employer under
its payroll practices), and which amount shall be divided and paid through
Employer's regular payroll procedures based on the time period worked by
Employee.
b. Fringe Benefits. Employer shall provide Employee with twenty-four
(24) working days paid vacation each full year of employment, which
vacation pay shall accrue ratably during the employment year; any accrued
but unused vacation pay shall be paid to Employee upon the termination of
this Agreement, and Employee may carry forward to subsequent employment
years any accrued but unpaid vacation pay with no limit or forfeiture. With
respect to such vacation pay, Employer agrees that Employee may use such
vacation pay for
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fourteen (14) calendar days of travel to Israel each year, for such travel,
Employer agrees to pay for the cost of round-trip airfare for Employee and
his family and provide Employee with the use of a car in Israel. Employer
agrees that Employee shall receive fourteen (14) calendar days paid sick
leave each full year of employment, which sick leave pay shall accrue
ratably during the employment year according to Employer's personnel
policies and practices; however, any accrued but unused sick leave shall
not be paid to Employee upon the termination of this Agreement. Employee
will also be entitled to participate in any benefit plans, policies,
programs, and payroll practices that Employer makes available to its
employees consistent with the terms and conditions of the respective plans,
policies, programs, and payroll practices applicable to such employees.
Such benefit plans, policies, programs, and payroll practices may be
amended or modified at any time by Employer, except as prohibited by law;
however, any change in the cost of the benefits provided for under the
benefit plans, policies, programs, and payroll practices must be approved
by Delek.
c. Ancillary Benefits. Without limiting the provisions of Section 2(b)
of this Agreement, Employer agrees to provide Employee with the following
ancillary benefits ("Ancillary Benefits"):
1. Company Vehicle. Employer will provide Employee with the use
of a company-provided vehicle and pay all expenses relating to the
operation of the vehicle.
2. Housing Allowance. Employer will provide Employee with a
company-provided house, which shall have a maximum value of US$1,000
per month.
3. Education Expense Allowance. Employer will pay for or
reimburse Employee for educational expenses not to exceed US$200 per
month.
4. Telephone. Employer will provide Employee with a home
telephone and cellular telephone for Employee's use and pay all
expenses relating to the use of the telephones.
Employee understands and agrees that Employee will be responsible for any
income, employment, or other taxes attributable to the foregoing benefits.
d. Bonus. At the sole discretion of the Board of Directors of Delek
US, Employee may be provided with an annual bonus comparable to similarly
situated executives of the Delek group according to the bonus plans,
policies, programs, and/or payroll practices of such group. Such bonus
shall be paid on a pro-rata basis based on the number of full months worked
by Employee during any bonus year. Employee shall not be required to be
employed on a particular date by the Employer to receive the bonus payment.
In the event that Employee is entitled to Bonus Payments as described in
Section 4(b) below, then Employer
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will be entitled, at its sole discretion, to deduct the bonus provided
under this Section 2(d), if provided, from the Bonus Payments.
3. Term of Agreement and Termination.
a. Term. The term of this Agreement shall begin on May 1, 2004, and
end on April 30, 2009 (the "Term").
b. Termination. Notwithstanding Section 3(a) of this Agreement, either
party may terminate this Agreement for any reason upon three (3) full
months' advance notice to the other party. In the event the employment
relationship terminates at any time during the Term or at the end of the
Term, Employee will be provided with salary continuation for a period of
six (6) full months following the three (3)-month notice period; however,
in the event that Employee voluntarily resigns prior to the end of the
Term, Employee will only be entitled to salary continuation for a period of
three (3) full months following the three (3)-month notice period. During
any such salary continuation period, Employee will be entitled to receive
salary continuation based on the salary set forth in Section 2(a).
Furthermore, during such period, if Employee resides in the United States,
Employee will be entitled to receive the fringe benefits as described in
Section 2(b) and Ancillary Benefits as described in Section 2(c); however,
during such period, if Employee resides in Israel, Employee will be
entitled to receive the company-provided vehicle as described in Section
2(c)(1) and the use of telephones described in Section 2(c)(4). Salary
continuation paid during such period shall not be taken into consideration
in determining any Bonus Payments and/or Bonus Shares (as defined below).
c. Termination due to Death. This Agreement shall terminate as a
result of the death of Employee. In such case and as of such time, Employer
will no longer be obligated to provide any compensation or benefits to
Employee other than any salary that has been earned by Employee through the
date of termination, accrued or credited but unpaid vacation pay, and any
vested benefits provided for under the terms of any applicable employee
benefit plan, which amounts, if any, shall be paid to Employee's estate or
otherwise as designated by Employee under the terms of any employee benefit
plan.
4. Additional Remuneration. Employee shall be entitled to receive one (but
not both) of the following types of additional remuneration as applicable:
a. In the event that Delek US or any of its majority-owned subsidiary
companies (Delek US or any such subsidiary companies being referred to
herein as the "Issuer") are issued to the public (in a public offering) and
are registered for sale in the United States or Israel anytime during the
Term, shares of the Issuer (which shall be freely tradable and registered
for trading in the public market) will be allotted to Employee for
Employee's option to purchase according to the terms described below (the
"Bonus Shares"):
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1. Option Percentage. For each year of Employee's employment
during the Term, Employee shall accrue a 1% Option Percentage
(pro-rated for each month during a year of employment) so that at the
end of Term, assuming Employee remains employed through the end of the
Term, Employee will have accrued a total 5% Option Percentage. For
purposes hereof, "Option Percentage" is a percentage used to determine
the number of Bonus Shares that Employee is entitled to based upon the
total number of issued and outstanding shares of the Issuer on the
date of the date of the execution of this Agreement (the "Pre-Public
Offering Outstanding Shares"). For example, if a public offering of
the Issuer occurs in November 2006, Employee will have accrued a total
2.5% Option Percentage.
2. Number of Bonus Shares. Employee shall have the option to
purchase that number of Bonus Shares equal to his respective Option
Percentage multiplied by the number of Pre-Public Offering Outstanding
Shares. Employee must exercise his option in whole or in part on or
before the earlier of the date that is (a) the one-year anniversary of
Employee's termination of employment under this Agreement, or (b) the
one-year anniversary of the Term. For example, if there are
100,000,000 Pre-Public Offering Outstanding Shares, and Employee
remains employed for only a three (3)-year period under this
Agreement, then Employee shall have the option to purchase 3,000,000
Bonus Shares as provided herein.
3. Payment. The exercise price for each Bonus Share shall be
determined on the basis of an assumed enterprise value of Delek US and
its subsidiaries in the amount of US$80,000,000. For example, if there
are 100,000,000 Pre-Public Offering Outstanding Shares, then the price
per Bonus Share shall be US$0.80 per Bonus Share
(US$80,000,000/US$100,000,000).
4. Stock Splits, Stock Dividends and Similar Events. The
number/type of Bonus Shares that Employee has the option to purchase
and the exercise price at which such shares may be purchased shall be
equitably adjusted in the event of a stock split, stock dividend,
recapitalization, reclassification, or similar event by the Issuer, as
determined in reasonable good faith by the independent auditors of
Employer.
5. Registered Shares. Employer represents that to the extent a
public market exist for its shares (whether on a public stock
exchange, national quotation system, or other), Employer will ensure
that the Bonus Shares that Employee purchases shall be registered and
freely tradable subject to applicable securities laws governing sales
by officers and insiders. Employee acknowledges and agrees that he
shall abide by applicable securities laws in connection with the
purchase and sale of his Bonus Shares. Employer and Employee will
cooperate in good faith with
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one another and the Issuer in connection with the compliance of
requisite laws, regulations, and disclosures regarding the purchase
and sale of Employee's Bonus Shares.
6. Assignment. Employee shall not have the right to assign or
encumber his option to Bonus Shares to any person or entity without
the prior written consent of the Employer, provided that Employee
shall have the right to pledge some or all of his Bonus Shares (and
related option) to a lender to the extent such pledge is not in
violation of applicable laws, including securities laws.
7. Right of First Refusal. In the event Employee desires to sell
all or any portion of his Bonus Shares (the "Offered Shares") to a
third party in a bona fide sale transaction, Employee shall first
offer the Offered Shares to Employer. Employee shall give written
notice to Employer setting forth the terms and conditions upon which
Employee proposes to sell the Offered Shares (the "Offer Terms").
Employer shall have the exclusive right during the two (2)-business
day period following receipt of such notice to elect (by delivery of
written notice to Employee) to purchase all (and not less than all) of
the Offered Shares in accordance with the Offer Terms and this
paragraph. If Employer does not elect to purchase all of the Offered
Shares, Employer's right of first refusal as to such Offered Shares
shall terminate and Employee may sell the Offered Shares according to
the Offer Terms or on such other terms as Employee may negotiate in
the current transaction giving rise to the Offer Terms or in any later
transaction. In the event Employer exercises its right of first
refusal under this paragraph as to the Offered Shares, the closing of
a sale of the Offered Shares to Employer shall occur within two (2)
days following the date on which notice is given by Employer of its
exercise of the right to purchase the Offered Shares. At the closing,
Employee shall take such actions required to transfer the Offered
Shares in accordance with the Offer Terms, and Employer shall deliver
to Employee good funds by wire transfer, or a cashier's check on a
national bank, for the entire amount of the purchase price, or upon
the payment terms as set forth in the original Offer Terms.
8. Option to Purchase Employee's Bonus Shares Upon Termination of
Employment. In the event Employee's employment with Employer is
terminated for any reason, Employer shall have the right during the
ten (10)-day period following the effective date of Employee's
termination of employment to purchase some or all of the Bonus Shares
held by Employee at a purchase price equal to the fair market value of
such Bonus Shares. Employer may exercise its option by delivering
written notice to Employee within such ten (10)-day option period of
its intent to purchase some or all of the Bonus Shares, which notice
must contain the number of shares Employer will purchase and the
purchase price for such shares. If shares of the same class as the
Bonus Shares are
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traded on a securities exchange or over-the-counter market, the fair
market value of the Bonus Shares shall be deemed to be the average of
the closing prices of the class of shares which are Bonus Shares on
such exchange or over-the-counter market over the ten (10) trading day
period ending one (1) business day prior to Employee's effective
termination date; if the shares are not traded on an exchange or
over-the-counter market, then fair market value shall be determined in
good faith by the Board of Directors of Delek US, provided that the
Board shall consider in their determination the per share valuation
(as adjusted for splits or dividends) of the most recent round of
financing as well as any pending or proposed financings, and the per
share valuation (as adjusted for splits or dividends) of any merger,
sale, or liquidation transaction, whether recently completed or
proposed. If Employer elects to exercise its option under this
paragraph, the closing of a sale of the Bonus Shares which Employer
has agreed to purchase pursuant to this paragraph (the "Option
Shares") shall occur, unless mutually agreed otherwise, within ten
(10) days following the date on which notice is given by Employer of
its exercise of the right to purchase the Option Shares in accordance
with this paragraph. At the closing, Employee shall take such actions
required to transfer the Offered Shares free and clear of all liens
and encumbrances, and Employer shall deliver to Employee good funds by
wire transfer, or a cashier's check on a national bank, for the entire
amount of the purchase price.
b. In the event that no shares are issued as provided for in
subsection (a) above by April 30, 2009, upon termination of employment at
any time during the Term or in the event of a Change in Control at any time
during the Term, whichever occurs first, Employee will be entitled to a
bonus not to exceed US$3,000,000 under the following terms:
1. Employee will be entitled to receive the following amounts for
each year of the Agreement (the "Bonus Payments") but only if Delek US
meets the Pre-Tax Yearly Profit Targets described in Addendum A (the
"Targets"):
Year l - US$200,000
Year 2 - US$400,000
Year 3 - US$600,000
Year 4 - US$800,000
Year 5 - US$1,000,000
2. If due to unforeseen circumstances (such as payment of
management fees from Delek US to Employer and/or other decisions that
are made by Employer), Delek US does not meet the Targets, the
calculation of the profit that is described in Addendum A will be
updated based on the effect of those circumstances on the profit by
Delek US's designated accountant whose determination (made in
accordance with Generally Accepted Accounting Principles) shall be
final and binding.
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3. If the annual growth percentage of Delek US fluctuates such
that a Target is not met in one year but is met in a subsequent year,
the Target will be treated as having been met (for example, if in one
year the Target was not met by 5% but the Target in the prior year is
exceeded by 5%, the Target will be treated as having been met in both
years).
4. If the Targets are not met in a certain year, Employee will be
entitled to the relative share of the Bonus Payments in that year
according to the profit that was reached that year beyond the minimal
pre-tax yearly profit of US$8,000,000 (for example, if in the first
year the profit target was US$17,000,000 and Delek US reached a
pre-tax yearly profit of US$16,100,000, Employee will receive-instead
of US$200,000 (scheduled Bonus Payment in the first year)-only a share
of US$8,100,000 divided by US$9,000,000, being 90% of $200,000, namely
$180,000).
5. In the event that there is a change in the number of
convenience stations owned or leased by Delek US that is not reflected
in Addendum A, there will be an immediate update in the Targets in
Addendum A according to the work plan approved by Delek US's board of
directors.
c. Notwithstanding the foregoing, in the event that Employee's
employment terminates prior to the end of the Term, Employee will be
entitled to Bonus Shares or Bonus Payments, as applicable, until
termination of employment, subject to Section 3(b) of this Agreement.
However, if Employee voluntarily terminates his employment prior to the end
of the Term, Employee will be entitled only to 90% of such Bonus Shares or
Bonus Payments based on the term of Employee's employment.
d. Any applicable taxes with respect to the Bonus Shares or Bonus
Payments will be paid by Employee, and Employer will make any deductions
required by law with respect to such Bonus Shares or Bonus Payments.
e. For the purposes of this Agreement, a Change in Control shall mean
and be deemed to have taken place if (i) any person or entity, including a
"group" as defined in Section 13(d)(3) of the Securities and Exchange Act
of 1934, other than Employer or Delek US, a wholly-owned subsidiary
thereof, or any employee stock ownership plan of Employer becomes, after
the effective date of this Agreement, the actual or beneficial owner of
Employer securities having 50% or more of the combined voting power of the
then-outstanding securities of Employer that may be cast for the election
of directors of Employer (other than as a result of an issuance of
securities initiated by Employer in the ordinary course of business); (ii)
as the result of, or in connection with, any cash tender or exchange offer,
merger, other business combination, sale of assets, contested election, or
any combination of the foregoing transactions less than a majority of the
combined voting power of the then-outstanding securities of Employer, any
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successor corporation, or entity entitled to vote generally in the election
of the directors of Employer after such transaction are held in the
aggregate by the holders of Employer's securities entitled to vote
generally in the election of directors of Employer immediately prior to
such transaction; (iii) as a result of a sale of all or substantially all
of the assets of Employer, (iv) during any year, individuals who at the
beginning of any such period constitute the Board of Directors of Employer
cease for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by Employer's or Delek US's
shareholders, of each director of Employer first elected during such period
was approved by a vote of at least two-thirds of the directors of Employer
then still in office who were directors of Employer at the beginning of any
such period.
5. Severance Pay. Upon termination of Employee's employment at any time
during the Term, Employee shall be entitled to severance pay of US $1,000 for
each full month of employment with Employer or it affiliates from January 2005.
Any applicable taxes with respect to the severance pay, will be paid by the
employee. The employer will make any deductions required by law in respect
of severance payments.
6. Loan. Employer agrees to provide Employee with a loan in the amount of
US$100,000 at no interest. Employee agrees to repay the loan upon termination
of employment. Employer will be entitled to deduct the full amount of the loan
from any amount Employee is owed by Employer, and Employee consents to any such
deduction.
7. Confidentiality of the Agreement. Employee agrees to maintain the
confidentiality of the Agreement and not to disclose the terms thereof to any
party not expressly permitted to be provided such information by Employer,
except that Employee may disclose the Agreement and the terms thereof to
Employee's spouse and immediate family, accountant, or attorney, provided such
individuals agree to maintain the confidentiality of the Agreement.
8. Miscellaneous.
a. Entire Agreement. Employer and Employee agree that this Agreement
contains the complete, entire agreement and understanding between the
parties and supersedes any prior or contemporaneous written or oral
agreements, representations, negotiations, and/or warranties between them
respecting the subject matter hereof. Neither party has made any
representations that are not contained herein on which either party has
relied in entering into this Agreement. Both parties acknowledge having
read and fully understood this Agreement and have voluntarily entered into
this Agreement.
b. Modification. This Agreement shall not be modified or amended,
except by a writing duly executed by the Employee and an officer of
Employer (other than Employee) and approved by the board of directors of
Delek. No
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waiver of any provision of this Agreement shall be effective unless the
waiver is in writing and duly executed by the Employee and an officer of
Employer (other than Employee) and approved by the board of directors
of Delek.
c. Assignment. It is agreed that neither party shall have the
right to assign or transfer any duties, rights, or obligations due
hereunder without the written consent of the other party, except that
Employer may assign the Agreement to its successor or any entity acquiring
all or substantially all of the assets of Employer, subject to the
provisions regarding Change in Control.
d. Severability; Reformation. The provisions of this Agreement shall
be severable and the invalidity of any provisions or portion thereof shall
not affect the validity of the other provisions. The parties further agree
that, to the extent a court of competent jurisdiction deems any provision
of this Agreement unenforceable, such court shall have the power to modify
the terms of the Agreement by adding, deleting, or changing in its
discretion any Language necessary to make such provision enforceable to the
maximum extent permitted by law, and the parties expressly agree to be
bound by any such provision as reformed by the court.
e. Waiver of Breach. No failure or neglect of either party hereto in
any instance to exercise any right, power, or privilege hereunder or under
law shall constitute a waiver of any other right, power, or privilege or of
the same right, power, or privilege in any other instance. All waivers by
either party hereto must be contained in a written instrument signed by the
party to be charged and, in the case of Employer, by an officer of Employer
(other than Employee).
f. Choice of Law and Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Tennessee, without
giving effect to any choice-of-law or conflict-of-law provisions or rules
(whether of the State of
Tennessee or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State
of
Tennessee. This Agreement shall be construed without regard to any rule
of construction under which an agreement may be construed against the
drafter. Any dispute arising under this Agreement shall be adjudicated in
the United States District Court for the Middle District of
Tennessee, or,
in the event subject matter jurisdiction does not lie therein, in the
courts of Xxxxxxxxxx Xxxxxxxx County,
Tennessee. Each party submits to the
jurisdiction of such court, waives any defense of an inconvenient forum,
and agrees not to file in such cause any motion to transfer venue or
similar motion. Each party further agrees to waive any right to trial by
jury.
g. Notice. Any notice provided for under this Agreement shall be given
by personal delivery, facsimile, or certified mail (with return receipt
requested); shall be addressed to Employer at its principal place of
business or to Employee at the most recent address on file with Employer;
and shall be deemed
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to have been given upon actual receipt or, if by mail, by three (3)
calendar days of the date on which such notice was deposited in the U.S.
mail.
h. Related Parties. Employer agrees that the agreements, covenants,
representations, acknowledgements, and protections provided for under this
Agreement in favor of Employer shall extend to the parent, subsidiaries,
and affiliates of Employer.
i. Construction. The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in
construing or interpreting this Agreement. The term "including" as used in
this Agreement is used to list items by way of example and shall not be
deemed to constitute a limitation of any term or provision contained
herein. As used in this Agreement, the singular or plural number shall be
deemed to include the other whenever the context so requires. All monetary
amounts set forth in this Agreement shall be in United States Dollars.
j. Rights Cumulative. The rights and remedies provided by this
Agreement are cumulative, and the exercise of any right or remedy by either
party hereto (or by its successor), whether pursuant to this Agreement, any
other agreement, or law, shall not preclude or waive its right to exercise
any or all other rights and remedies.
k. No Inconsistent Obligations. Employee hereby represents and
warrants to Employer that (i) the execution, delivery, and performance of
this Agreement by Employee does not and will not conflict with, breach,
violate, or cause a default under any contract, agreement, instrument,
order, judgment, or decree to which Employee is a party or by which he is
bound, (ii) Employee is not a party to or bound by an employment,
noncompetition, nonsolicitation, nondisclosure, confidentiality, or similar
agreement with any other person or entity that would conflict with this
Agreement, and (iii) upon the execution and delivery of this Agreement by
Employer, this Agreement shall be the valid and binding obligation of
Employee and enforceable in accordance with its terms.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered on the ____ day of October, 2004, effective as of the date first
set forth above.
/s/ UZI YEMIN
----------------------------------------
UZI YEMIN
MAPCO EXPRESS, INC.
By: /s/ Xxxx XxXxxxx
------------------------------------
Title: VP of HR
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Title: Director
By: /s/ Xxxxxxx Last
------------------------------------
Title: Director
DELEK US HOLDINGS, INC.
By: /s/ Xxxx XxXxxxx
------------------------------------
Title: VP of HR
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Title: Director
ADDENDUM A - DELEK US TARGETS
PRE-TAX YEARLY PROFIT TARGETS PERIODS
----------------------------- -----------------------
16 million U.S. dollars 04/01/2004 - 03/31/2005
18 million U.S. dollars 04/01/2005 - 03/31/2006
20 million U.S. dollars 04/01/2006 - 03/31/2007
22 million U.S. dollars 04/01/2007 - 03/31/2008
24 million U.S. dollars 04/01/2008 - 03/31/2009
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