MANAGEMENT EMPLOYMENT AGREEMENT
Exhibit 10.14
This Agreement is entered into between Xxxxx Xxxxxx (“Manager”) and Southwest Convenience
Stores, LLC (“Employer” or “Company”) on July 1, 2001, who, in return for the mutual promises set
forth herein, agree as follows:
1. Position/Term. (a) The term of the Manager’s employment hereunder shall commence upon
the completion of the employment process including obtaining visa status allowing employment in the
United States; provided that, for purposes of Sections 2, 3 and 4 hereof, Manager shall be deemed
to have commenced employment as of July 1, 2001.
(b) Throughout the term of this Agreement, Employer shall employ Manager and Manager shall
render services to Employer in the capacity and with the title of Chief Executive Officer,
reporting to the Chairman of Alon USA and the President of Alon USA. Manager shall devote his full
time and best effort to the successful functioning of the business of Employer and shall faithfully
and industriously perform all duties pertaining to his position, including such additional duties
as may be assigned from time to time, to the best of Manager’s ability, experience and talent.
Manager shall be subject at all times during the term hereof to the direction and control of
Employer in respect of the work to be done.
(c) Manager’s employment hereunder shall be for an initial term beginning on the Commencement
Date and ending on December 31, 2003. Thereafter, the term shall renew automatically each year for
a term of one year, unless either party provides the other with written notice at least 30 days
prior to the expiration of the term.
2. Compensation. Manager’s salary (“Base Compensation”) shall be $67,000 for the first six
months and $150,000 per year thereafter payable bi-weekly (unless the payroll practice of the
Company changes to monthly or semi-monthly) in arrears and subject to change only with the mutual
written consent of Employer and Manager. It is the intent of the Company to develop guidelines for
annual merit increases for salaries of all salaried employees/management, including Manager.
Manager will also be paid a bonus of up to 50% of base salary based upon pre-agreed performance
criteria, as will be agreed upon during the first six months after developing a business plan for
the company.
3. Fringe Benefits; Reimbursement of Expenses. Employer shall make available, or cause to be
made available to Manager, throughout the period of his employment hereunder, such benefits,
including any disability, hospitalization, medical benefits, 401(k), life insurance, or other
benefits or policy, as may be put into effect from time to time by Employer generally for other
Management members at the level of Management. The Company expressly reserves the right to modify
such benefits at any time, subject to the provisions of paragraph 10(b) hereof.
Employer will pay for Manager’s primary living expenses including apartment rent or monthly
housing costs, utilities, cable and telephone contingent upon manager living in or around Midland
or Odessa. Employer will also provide manager with a leased automobile including fuel and
maintenance. Housing and automobile costs deemed personal (not business) use will be taxable to
manager according to Internal Revenue Service regulations. Any such amount deemed taxable will be
grossed up and reimbursed at 28%.
Manager will be reimbursed for all reasonable out-of-pocket business, business entertainment
and travel expenses paid by the Manager, in accordance with and subject to applicable Company
expense incurrence and reimbursement policies
4. Vacation. Manager will be granted 30 days of vacation per year. A few days each month of
the total vacation will be used to allow a trip to Israel. Employer will pay for 8 roundtrip
tickets per year for Manager’s personal trips to Israel. Personal trips taken during normal
business hours will count against Manager’s allotted vacation days. Unless otherwise agreed,
vacation may not be carried over into a new calendar year. Vacation time shall be taken only after
providing reasonable notice to the person to whom the Manager reports.
5. Compliance With Employer Policies. Manager shall comply with and abide by all employment
policies and directives of Employer. Employer may, in its sole discretion, change, modify or adopt
new policies and directives affecting Manager’s employment. In the event of any conflict between
the terms of this Agreement and Employer’s employment policies and directives, the terms of this
Agreement will be controlling.
6. Restrictive Covenant. (a) In consideration of the confidential information of Employer
provided to Manager and the other benefits provided to Manager pursuant to this Agreement, Manager
agrees that during the term of Manager’s employment with Employer and for a period of one year
following any termination of Manager’s employment, if the Manager terminates employment during the
first two years of Manager’s employment, or nine months, if the Manager terminates employment after
the first two years of employment and before the completion of five years of employment (the
“Non-Compete Period”), Manager will not, without the prior written consent of Employer, directly or
indirectly, either as an individual or as an employee, officer, director, shareholder, partner,
sole proprietor, independent contractor, consultant or in any other capacity conduct any business,
or assist any person in conducting any business, that is in competition with the business of
Employer or its Affiliates (as defined below).
(b) In addition to any other covenants or agreements to which Manager may be subject, during
the Non-Compete Period, Manager will not, directly or indirectly, either as an individual or as an
employee, officer, director, shareholder, partner, sole proprietor, independent contractor,
consultant or in any other capacity whatsoever approach or solicit any customer or vendor of
Employer for the purpose of causing, directly or indirectly, any such customer or vendor to cease
doing business with Employer or its Affiliates.
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For the purposes of this Agreement, the “business of Employer or its Affiliates” means the
business of convenience stores or retail fuel marketing in the Territory. The term
“Affiliates” means all subsidiaries of Employer and each person or entity that controls, is
controlled by, or is under common control with Employer. The “Territory” means the states of Texas,
New Mexico, Arizona, Arkansas, Louisiana and Oklahoma. It is understood and agreed that the scope
of each of the covenants contained in this Section 6 is reasonable as to time, area, and persons
and is necessary to protect the legitimate business interest of Employer. It is further agreed
that such covenants will be regarded as divisible and will be operative as to time, area and
persons to the extent that they may be so operative. The terms of this Section 6 shall not apply
to the ownership by Manager of less than 5% of a class of equity securities of an entity, which
securities are publicly traded on the New York Stock Exchange, the American Stock Exchange, or the
National Market System of the National Association of Securities Dealers Automated Quotation
System. The provisions of this Section 6 will survive any termination or expiration of this
Agreement.
7. Confidentiality. (a) Manager recognizes that during the course of employment, Manager
will be exposed to information or ideas of a confidential or proprietary nature which pertain to
Employer’s business, financial, legal, marketing, administrative, personnel, technical or other
functions or which constitute trade secrets (including, but not limited to, specifications,
designs, plans, drawings, software, data, prototypes, the identity of sources and markets,
marketing information and strategies; business and financial plans and strategies, methods of doing
business; data processing and management information and technical systems, programs and practices;
customers and users and their needs, sales history; and financial strength), and such information
of third parties which has been provided to Employer in confidence (“Confidential Information”).
All such information is deemed “confidential” or “proprietary” whether or not it is so marked,
provided that it is maintained as confidential by the Company. Information will not be considered
to be Confidential Information to the extent that it is generally available to the public. Nothing
in this Section 7 will prohibit the use or disclosure by Manager of knowledge that is in general
use in the industry or general business knowledge.
(b) Manager shall hold Confidential Information in confidence, use it only in connection with
the performance of duties on behalf of Employer, and restrict its disclosure to those directors,
employees or independent contractors of Employer having a need to know.
(c) Manager shall not disclose, copy or use Confidential Information for the benefit of anyone
other than Employer without Employer’s prior written consent.
(d) Manager shall, upon Employer’s request or Manager’s termination of employment, return to
Employer any and all written documents containing Confidential Information in Manager’s possession,
custody or control.
8. Non-Interference with Employment Relationships. During Manager’s employment with Employer,
and for a period of one (1) year thereafter, Manager shall not, without Employer’s prior written
consent, directly or indirectly: (a) induce or attempt to induce any employee to leave the
Employer’s employ; or (b) interfere with or disrupt the Employer’s relationship with any of its
employees or independent contractors.
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9. Copyright, Inventions, Patents. Employer shall have all right, title and interest to all
features (including, but not limited to, graphic designs, copyrights, trademarks and patents)
created during the course of or resulting from Manager’s employment with Employer. Manager hereby
assigns to Employer all copyright ownership and rights to any work developed by Manager and reduced
to practice for or on behalf of Employer or which relate to Employer’s business during the course
of the employment relationship. At Employer’s expense, Manager shall do all other things
including, but not limited to, the giving of evidence in suits and proceedings, and the furnishing
and/or assigning of all documentation and other materials relative to Employer’s intellectual
property rights, necessary or appropriate for Employer to obtain, maintain, and assert its rights
in such work.
10. Termination of Employment. (a) Employer may terminate Manager’s employment hereunder
at any time for Cause. For purposes hereof, Cause shall mean: (i) conviction of a felony or a
misdemeanor where imprisonment is imposed for more than 30 days; (ii) commission of any act of
theft, fraud, dishonesty, or falsification of any employment or Employer records; (iii) improper
disclosure of Confidential Information; (iv) any intentional action by the Manager having a
material detrimental effect on the Company’s reputation or business; (v) any material breach of
this Agreement, which breach is not cured within ten (10) business days following receipt by
Manager of written notice of such breach; (vi) unlawful appropriation of a corporate opportunity;
(vii) intentional misconduct in connection with the performance of any of Manager’s duties,
including, without limitation, misappropriation of funds or property of the Company, securing or
attempting to secure to the detriment of the Company any profit in connection with any transaction
entered into on behalf of the Company, any material misrepresentation to the Company, or any
knowing violation of law or regulations to which the Company is subject; or (viii) loss of
immigration status allowing Manager to be employed in the United States. Upon termination of
Manager’s employment with the Company for Cause, the Company shall be under no further obligation
to Manager, except to pay all earned but unpaid Base Compensation and all accrued benefits and
vacation to the date of termination (and to the extent required by law).
(b) Employer may terminate Manager’s employment hereunder in good faith, or Manager may
terminate his employment hereunder for Good Reason, upon not less than thirty (30) days prior
written notice. In the event of any such termination, Manager shall be entitled to receive his
Base Compensation through the termination date and any annual bonus entitlement, prorated for the
number of months of employment for the fiscal year in question, all accrued benefits and vacation
to the date of termination (and to the extent required by law), plus, during the first two years of
Manager’s employment hereunder, an additional amount of severance payment equal to one year’s Base
Compensation as in effect immediately before any notice of termination, and, after the first two
years of Manager’s employment hereunder, an additional amount of severance payment equal to nine
months’ Base Compensation as in effect immediately before any notice of termination. “Good Reason”
means (i) without the Manager’s prior written consent, the Employer reduces Manager’s Base
Compensation or the percentage of Manager’s Base Compensation established as Manager’s maximum
target bonus percentage for purposes of Employer’s annual cash bonus plan; (ii) any material breach
of this Agreement, which breach is not cured within ten (10) business days following receipt by
Employer of written notice of such breach; (iii) Employer requires Manager to be based at an office
or location that is more than
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thirty-five (35) miles from the location at which Manager was based as of the Commencement Date,
other than in connection with reasonable travel requirements of Employer’s business; (iv) the
delivery by Employer of notice pursuant to Section 1 (c) of this Agreement that it does not wish
this Agreement to automatically renew for any subsequent year; and (v) Manager may submit his
resignation at any time after July 31, 2010, which will be considered to be for Good Reason.
(c) Manager may terminate the employment relationship hereunder with not less than thirty (30)
days prior written notice. Upon any such termination of Manager’s employment, other than for Good
Reason, the Company shall be under no further obligation to Manager, except to pay all earned but
unpaid Base Compensation and all accrued benefits and vacation to the date of termination (and to
the extent required by law).
(d) The provisions of Sections 6, 7, 8 and 9 of this Agreement will continue in effect
notwithstanding any termination of Manager’s employment.
11. Mediation and Arbitration. (a) Employer and Manager hereby state their mutual desire
for any dispute concerning a legally cognizable claim arising out of this Agreement or in
connection with the employment of Manager by Employer, including, but not limited to, claims of
breach of contract, fraud, unlawful termination, discrimination, harassment, workers’ compensation
retaliation, defamation, tortious infliction of emotional distress, unfair competition, and
conversion (“Legal Dispute”), to be resolved amicably, if possible, and without the need for
litigation.
(b) Based on this mutual desire, in the event a Legal Dispute arises, the parties shall
utilize the following protocol:
(i) The parties shall first submit the Legal Dispute to mediation under the auspices of the
American Arbitration Association (“AAA”) and pursuant to the mediation rules and procedures
promulgated by the AAA.
(ii) In the event mediation is unsuccessful in fully resolving the Legal Dispute, binding
arbitration shall be the method of final resolution of the Legal Dispute. The parties expressly
waive their rights to bring action against one another in a court of law, except as expressly
provided in subsection (d). The parties hereto acknowledge that failure to comply with this
provision shall entitle the non-breaching party not only to damages, but also to injunctive relief
to enjoin the actions of the breaching party. Any Legal Dispute submitted to Arbitration shall be
under the auspices of the AAA and pursuant to the “National Rules for the Resolution of Employment
Disputes,” or any similar identified rules promulgated at such time the Legal Dispute is submitted
for resolution. All mediation and arbitration hearings shall take place in Dallas, Texas.
(c) Notice of submission of any Legal Dispute to mediation shall be provided no later than
three hundred sixty-five (365) calendar days following the date the submitting party became aware
of the conduct constituting the alleged claims. Failure to do so shall result in the irrevocable
waiver of the claim made in the Legal Dispute.
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(d) Notwithstanding that mediation and arbitration are established as the exclusive procedures
for resolution of any Legal Dispute, (i) either party may apply to an appropriate judicial or
administrative forum for injunctive relief and (ii) claims by Employer arising in connection with
paragraphs 6, 7, 8 or 9 may be brought in any court of competent jurisdiction.
(e) Each party acknowledges that a remedy at law for any breach or attempted breach of
paragraphs 6, 7, 8 or 9 of this Agreement will be inadequate, agrees that Employer will be entitled
to specific performance and injunctive and other equitable relief in case of any breach or
attempted breach, and agrees not to use as a defense that any party has an adequate remedy at law.
This Agreement shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a
decree of specific performance, and appropriate injunctive relief may be applied for and granted in
connection herewith. Such remedy shall not be exclusive and shall be in addition to any other
remedies now or hereafter existing at law or in equity, by statute or otherwise. Except as
provided in subsection (c) no delay or omission in exercising any right or remedy set forth in this
Agreement shall operate as a waiver thereof or of any other right or remedy and no single or
partial exercise thereof shall preclude any other or further exercise thereof or the exercise of
any other right or remedy.
12. Assignment. This Agreement shall not be assignable by either party except that upon any
sale or transfer of all or substantially all of its business by Employer, Employer may assign this
Agreement to its successor; any failure to make such an assignment will be considered to constitute
the termination of Manager’s employment without cause effective upon the closing of the referenced
transaction.
13. No Inducement, Agreement Voluntary. Manager represents that (a) he has not been
pressured, misled, or induced to enter into this Agreement based upon any representation by
Employer or its agents not contained herein, (b) he has entered into this Agreement voluntarily,
after having the opportunity to consult with representatives of his own choosing and that (c) his
agreement is freely given.
14. Interpretation. Any paragraph, phrase or other provision of this Agreement that is
determined by a court, arbitrator or arbitration panel of competent jurisdiction to be unreasonable
or in conflict with any applicable statute or rule, shall be deemed, if possible, to be modified or
altered so that it is not unreasonable or in conflict or, if that is not possible, then it shall be
deemed omitted from this Agreement. The invalidity of any portion of this Agreement shall not
affect the validity of the remaining portions.
15. Prior Agreements Superseded; Amendments. This Agreement revokes and supersedes all prior
agreements, written and oral, and represents the entire agreement between the parties in relation
to the employment of the Manager by the Company after the Commencement Date and shall not be
subject to modification or amendment by any oral representation, or any written statement by either
party, except for a dated writing signed by the Manager and the Employer.
16. Notices. All notices, demands and requests of any kind to be delivered in connection with
this Agreement shall be in writing and shall be deemed to have been duly
given if personally delivered or if sent by nationally-recognized overnight courier or by
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registered or certified mail, return receipt requested and postage prepaid, addressed as follows:
(a)
|
if to the Company, to: | |
| Southwest Convenience Stores | ||
| 000 X Xxxxx | ||
| Xxxxxx, XX 00000 | ||
| Telecopy number: (000) 000-0000 | ||
(b)
|
if to Manager, to the address of Manager | |
| set forth on the signature page hereto; |
or to such other address as the party to whom notice is to be given may have furnished to the other
in writing in accordance with the provisions of this Section 16. Any such notice or communication
shall be deemed to have been received: (i) in the case of personal delivery, on the date of such
delivery; (ii) in the case of nationally-recognized overnight courier, on the next business day
after the date sent; and (iii) if by registered or certified mail, on the third business day
following the date postmarked.
17. Applicable Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas without giving effect to principles of conflicts of law.
MANAGER:
|
EMPLOYER: | |
Xxxxx Xxxxxx
|
Southwest Convenience Stores, LLC | |
/s/ Xxxxx Xxxxxx
|
By:/s/ Xxxx X. Xxxxxx | |
| Name: Xxxx X. Xxxxxx |
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AMENDMENT TO
MANAGEMENT EMPLOYMENT AGREEMENT
MANAGEMENT EMPLOYMENT AGREEMENT
THIS AMENDMENT is entered into as of December 1, 2008, by and between Southwest Convenience
Stores, LLC, a Texas limited liability company (referred to as “the Company”), and Xxxxx Xxxxxx
(“Manager”). Terms not defined in this Amendment will have the meaning set forth in the Employment
Agreement described below.
WHEREAS, the Company and Manager entered into that certain Manager Employment Agreement dated
as of July 1, 2001 (the “Agreement”) and wish to amend the Agreement to assure that any payments
under the Agreement that (i) constitute a deferral of compensation within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), comply with the requirements of
Section 409A to avoid the imposition of excise taxes and (ii) qualify for an exemption from
deferred compensation treatment under Section 409A of the Code satisfy the requirements of such
exemption.
NOW, THEREFORE, the parties agree as follows:
1. To the extent that a payment becomes due to Manager under Section 10 of the Agreement by
reason of Manager’s termination of employment, (i) the term “termination of employment” will have
the same meaning as “separation from service” under Section 409A of the Code (ii) except as
provided in Section 2, all such payments will be made in a single lump sum no later than 60 days
after the date on which Manager terminates employment.
2. If the Company makes a good faith determination that a payment under the Agreement (i)
constitutes a deferral of compensation for purposes of Section 409A, (ii) is made to Manager by
reason of his separation from service and (iii) at the time such payment would otherwise be made
Manager is a “specified employee” as hereinafter defined, the payment will be delayed until the
first day of the seventh month following the date of such termination of employment and will bear
interest at the prime rate of interest as published in the Wall Street Journal on the first
business day following the date of Manager’s termination of employment. For purposes of this
Section 2, a specified employee is an officer of Alon USA Energy, Inc. with annual compensation in
excess of $150,000 (as adjusted for years after 2008), provided that only the 50 highest paid
officers of Alon USA Energy, Inc. may constitute “specified employees” for any 12-month period. An
individual who is identified as a one of the 50 highest paid officers during any portion of a
calendar year will be a specified employee for purposes of the Agreement during the 12-month period
beginning on April 1 of the following calendar year.
3. To the extent that any payment made under the Agreement constitutes a deferral of
compensation subject to Section 409A of the Code, the time of such payment may not be accelerated
except to the extent permitted by Section 409A. Where Section 409A of the Code permits a payment
or benefit that constitutes a deferral of compensation to be accelerated, the payment or benefit
may be accelerated in the sole discretion of the Company.
4. Any expense reimbursements required to be made under the Agreement will be for expenses
incurred by Manager during the term of the Agreement, and such
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reimbursements will be made not later than December 31st of the year following the
year in which Manager incurs the expense; provided, that in no event will the amount of expenses
eligible for payment or reimbursement in one calendar year affect the amount of expenses to be paid
or reimbursed in any other calendar year. Manager’s right to expense reimbursement will not be
subject to liquidation or exchange for another benefit.
5. Notwithstanding any provision of the Agreement to the contrary, in light of the uncertainty
with respect to the proper application of Section 409A, the Company reserves the right to make
amendments to the Agreement as the Company deems necessary or desirable solely to avoid the
imposition of taxes or penalties under Section 409A.
6. The provisions of this Amendment supersede and replace in their entirety any conflicting
provision set forth in the Agreement.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written
above.
| SOUTHWEST CONVENIENCE STORES, LLC |
||||
| By: | /s/ Xxxx XxXxxx | |||
| Name: | Xxxx XxXxxx | |||
| Title: | Chairman of Board of Managers | |||
| MANAGER |
||||
| /s/Xxxxx Xxxxxx | ||||
| Xxxxx Xxxxxx | ||||
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