FORM] HOLLY LOGISTIC SERVICES, L.L.C. PERFORMANCE UNIT AGREEMENT
Exhibit 10.1
This Performance Unit Agreement (the “Agreement”) is made and entered into by and between
XXXXX LOGISTIC SERVICES, L.L.C., a Delaware limited partnership (the “Company”), and
(the “Employee”). This Agreement is entered into as of the ___day of
___, (the “Date of Grant”).
W I T N E S S E T H:
WHEREAS, the Company has adopted the XXXXX ENERGY PARTNERS, L.P. LONG-TERM INCENTIVE PLAN (the
“Plan”) to attract, retain and motivate employees, directors and consultants; and
WHEREAS, the Company believes that a grant to the Employee of performance units of Xxxxx
Energy Partners, L.P. (the “Partnership”) as part of the Executive’s compensation for services
provided to the Company is consistent with the stated purposes for which the Plan was adopted.
NOW, THEREFORE, in consideration of the services rendered by the Employee, it is agreed by and
between the Company and the Employee, as follows:
1. Grant. The Company hereby grants to the Employee as of the Date of Grant an
Award of performance units (the “Performance Units”), subject to the terms and
conditions set forth in this Agreement. Depending on the performance of Xxxxx Energy
Partners, L.P. (the “Partnership”), the Employee may earn from ___(___%) to ___(___%)
of the Performance Units, based on [performance measure to be described].
2. Nature of Award. The Performance Units represent an Award for the
“Performance Period” which begins on ___, ___and ends on ___, ___. Following the
completion of the Performance Period, the Employee shall be entitled to a payment of Common
Units of the Partnership (“Common Units”) as determined under this Section 2 and payable at
the time indicated in Section 4 or Section 3(b), as applicable.
(a) Performance Measure. The number of Performance Units earned for
the Performance Period is determined on the basis of [performance measure to be
described].
(b) Common Units Payable. The number of Common Units payable is equal
to the result of multiplying Performance Units by the “Performance Percentage” set
forth below:
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| ___-Year Total Increase | ||
| in | Performance Percentage | |
| [performance measure] | (%) to be Multiplied by | |
| Per Common Unit | Performance Units | |
< $____ |
—% | |
$____ |
—% | |
$____ |
—% | |
$____ |
—% | |
> $____ |
—% | |
| The percentages above shall be interpolated between points. |
3. Early Termination. In the event of separation from employment of the
Employee prior to the end of the Performance Period on account of an event described in this
Section 3, the number of Performance Units with respect to which payment at the end of the
Performance Period is based shall be determined as follows:
(a) (i) In the event that the Employee separates from employment for any reason
other than voluntary separation or Cause, as defined in Section 3(c)(vii), or (ii)
in the event of the Employee’s death or (iii) in the event of the Employee’s total
and permanent disability as determined by the Compensation Committee of the
Company’s Board of Directors (the “Committee”) in its sole discretion, or (iv) in
the event that the Employee shall retire after attaining normal retirement age of 62
or after attaining an earlier retirement age approved by the Committee in its sole
discretion, the number of Performance Units that shall be earned by and paid to the
Employee or his beneficiary, in accordance with and at the time specified in Section
4, shall be determined as follows: the Employee shall forfeit a percentage of the
Performance Units earned equal to the percentage that the number of full months
following the date of separation, death, disability or retirement to the end of the
Performance Period bears to ___. The Committee shall determine the number of
Performance Units earned and to be paid to the Employee or his beneficiary in
accordance with Section 2 for the entire Performance Period as soon as
administratively practicable after the end of the Performance Period. In its sole
discretion, the Committee may make a payment to the Employee assuming a Performance
Percentage of up to (___%) of the Performance Units instead of the pro-rata
number of Performance Units as determined pursuant to this Section 3(a). Unless the
Committee determines otherwise, the Employee will have no right to any other
Performance Units and those other Performance Units granted under this Agreement
will be forfeited. If the Employee separates from employment prior to the end of
the Performance Period due to voluntary separation or on account of Cause, all
Performance Units hereunder will be forfeited.
(b) In the event of a Special Involuntary Termination, as defined in Section
3(c)(vi), before the end of the Performance Period, no Performance Units
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shall be forfeited, and payment with respect to (___%) of the
Performance Units shall be made as soon as administratively practicable following
the Special Involuntary Termination, but in no event later than two and one-half
months after the end of the calendar year in which the Special Involuntary
Termination occurs. Payment pursuant to this Section 3(b) is in lieu of payment
pursuant to Section 3(a) and if the Employee receives payment pursuant to this
Section 3(b) the Employee will not be entitled to any payment pursuant to Section
3(a).
(c) Definitions. For purposes of this Section 3,
(i) “Change in Control” shall mean:
A. Any “Person” (as defined in Section 3(c)(ii) below), other
than Xxxxx Corporation (“Xxxxx”) or any of its wholly-owned
subsidiaries, HEP Logistics Holdings, L.P. (the “General Partner”),
the Partnership, the Company, or any of their subsidiaries, a trustee
or other fiduciary holding securities under an employee benefit plan
of Xxxxx, the Partnership, the Company or any of their “Affiliates”
(as defined in Section 3(c)(v) below), an underwriter temporarily
holding securities pursuant to an offering of such securities, or
entity owned, directly or indirectly, by the holders of the voting
securities of Xxxxx, the Company, the General Partner or the
Partnership in substantially the same proportions as their ownership
in Xxxxx, the Company, the General Partner or the Partnership,
respectively, is or becomes the “Beneficial Owner” (as defined in
Section 3(c)(iii) below), directly or indirectly, of securities of
Xxxxx, the Company, the General Partner or the Partnership (not
including in the securities beneficially owned by such person any
securities acquired directly from Xxxxx, the General Partner, the
Partnership, the Company or their Affiliates) representing more than
forty percent (40%) of the combined voting power of Holly’s, the
Company’s, the General Partner’s or the Partnership’s then
outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in
Section 3(c)(i)(C)(I) below.
B. The individuals who as of the Date of Grant constitute the
Board of Directors of Xxxxx (the “Xxxxx Board”) and any “New
Director” (as defined in Section 3(c)(iv) below) cease for any reason
to constitute a majority of the Xxxxx Board.
C. There is consummated a merger or consolidation of Xxxxx, the
Company, the General Partner or the Partnership with any other
entity, except if:
(1) the merger or consolidation results in the voting
securities of Xxxxx, the Company, the General
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Partner or the Partnership outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof) at least sixty
percent (60%) of the combined voting power of the voting
securities of Xxxxx, the Company, the General Partner or the
Partnership, as applicable, or such surviving entity or any
parent thereof outstanding immediately after such merger or
consolidation; or
(2) the merger or consolidation is effected to implement
a recapitalization of Xxxxx, the Company, the General Partner
or the Partnership (or similar transaction) in which no
Person is or becomes the Beneficial Owner, directly, or
indirectly, of securities of, as applicable, (not including
in the securities beneficially owned by such Person any
securities acquired directly from Xxxxx, the Company, the
General Partner or the Partnership or their Affiliates other
than in connection with the acquisition by Xxxxx, the
Company, the General Partner or the Partnership or its
Affiliates of a business) representing more than forty
percent (40%) of the combined voting power of Holly’s, the
Company’s the General Partner’s or the Partnership’s, as
applicable, then outstanding securities.
D. The holders of the voting securities of Xxxxx, the Company,
the General Partner or the Partnership approve a plan of complete
liquidation or dissolution of holders of the voting securities of
Xxxxx, the Company, the General Partner or the Partnership or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or
disposition by holders of the voting securities of Xxxxx, the
Company, the General Partner or the Partnership of all or
substantially all of Holly’s, the Company’s the General Partner’s or
the Partnership’s assets, as applicable, to an entity at least sixty
percent (60%) of the combined voting power of the voting securities
of which is owned by the direct and indirect holders of the voting
securities of Xxxxx, the Company, the General Partner or the
Partnership in substantially the same proportions as their ownership
of direct or indirect holders of the voting securities of Xxxxx, the
Company, the General Partner or the Partnership, as applicable,
immediately prior to such sale.
(ii) “Person” shall have the meaning given in section 3(a)(9) of the
Securities Exchange Act of 1934 (the “1934 Act”) as modified and used in
sections 13(d) and 14(d) of the 1934 Act.
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(iii) “Beneficial Owner” shall have the meaning provided in Rule 13d-3
under the 1934 Act.
(iv) “New Director” shall mean an individual whose election by the
Holly’s Board or nomination for election by holders of the voting securities
of Xxxxx was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the Date of
Grant or whose election or nomination for election was previously so
approved or recommended. However, “New Director” shall not include a
director whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a consent
solicitation relating to the election of directors of the Xxxxx.
(v) “Affiliate” shall have the meaning set forth in Rule 12b-2
promulgated under section 12 of the 1934 Act.
(vi) “Special Involuntary Termination” shall mean the occurrence of (1)
or (2) within sixty (60) days prior to, or at any time after, a “Change in
Control” (as defined in Section 3(c)(i)), where (1) is termination of the
Employee’s employment with the Company (including subsidiaries of the
Company) by the Company for any reason other than “Cause” (as defined in
Section 3(c)(vii)) and (2) is a resignation by the Employee from employment
with the Company (including subsidiaries of the Company) within ninety (90)
days after an “Adverse Change” (as defined in Section 3(c)(viii)) by the
Company (including subsidiaries of the Company) in the terms of the
Employee’s employment.
(vii) “Cause” shall mean:
A. An act or acts of dishonesty on the part of the Employee
constituting a felony or serious misdemeanor and resulting or
intended to result directly in gain or personal enrichment at the
expense of the Company;
X. Xxxxx or willful and wanton negligence in the performance of
the Employee’s material and substantial duties of employment with the
Company; or
C. Conviction of a felony involving moral turpitude.
The existence of Cause shall be determined by the Committee, in its
sole and absolute discretion.
(viii) “Adverse Change” shall mean (A) a change in the city in which
the Employee is required to work regularly, (B) a substantial increase in
travel requirements of employment, (C) a substantial reduction in duties of
the type previously performed by the Employee, or (D) a significant
reduction in compensation or benefits (other than bonuses and
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other discretionary items of compensation) that does not apply
generally to Employees of the Company or its successor.
4. Payment of Performance Units. The number of Common Units payable at the end
of the Performance Period (or such earlier time as specified under Section 3(b)) shall be
payable as soon as reasonably practicable following the close of the Performance Period, but
in no event later than two and one-half months after the end of the calendar year in which
the Performance Period closes (or such earlier time as specified under Section 3(b)), in the
amount determined in accordance with Section 2, as adjusted by Section 3, if applicable.
Such payment will be subject to withholding for taxes and other applicable payroll
adjustments. The Committee’s determination of the amount payable shall be binding upon the
Employee and his beneficiary or estate.
5. Adjustment in Number of Performance Units. Except as provided below, in the
event that the outstanding Common Units are increased, decreased or exchanged for a
different number or kind of units or other securities, or if additional, new or different
units or securities are distributed with respect to the Units through merger, consolidation,
sale of all or substantially all of the assets of the Partnership, reorganization,
recapitalization, unit dividend, unit split, reverse unit split or other distribution with
respect to such Common Units, there shall be substituted for the Common Units under the
Performance Units subject to this Agreement the appropriate number and kind of Common Units
or new or replacement securities as determined in the sole discretion of the Committee.
6. Delivery of Common Units. No Common Units shall be delivered pursuant to
this Agreement until the approval of any governmental authority required in connection with
this Agreement, or the issuance of Common Units hereunder, has been received by the Company.
7. Securities Act. The Company shall have the right, but not the obligation,
to cause the Common Units payable under this Agreement to be registered under the
appropriate rules and regulations of the Securities and Exchange Commission. The Company
shall not be required to deliver any Common Units hereunder if, in the opinion of counsel
for the Company, such delivery would violate the Securities Act of 1933 or any other
applicable federal or state securities laws or regulations.
8. Federal and State Taxes. The Employee may incur certain liabilities for
Federal, state or local taxes and the Company may be required by law to withhold such taxes
for payment to taxing authorities. Upon the determination by the Company of the amount of
taxes required to be withheld, if any, the Employee shall either pay to the Company, in cash
or by certified or cashier’s check, an amount equal to the taxes required to be withheld, or
the Employee shall authorize the Company to withhold from monies owing by the Company to the
Employee an amount equal to the federal, state or local taxes required to be withheld.
Authorization of the Employee to the Company to withhold taxes pursuant to this Section
shall be in form and content acceptable to the Committee. An authorization to withhold
taxes pursuant to this provision shall be irrevocable unless and until the tax liability of
the Employee has been fully paid. In the
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discretion of the
Committee, the required taxes may be withheld in kind from the Common
Units payable under this Agreement. In the event that the Employee fails to make
arrangements that are acceptable to the Committee for providing to the Company, at the time
or times required, the amounts of federal, state and local taxes required to be withheld
with respect to the Common Units payable to the Employee under this Agreement, the Company
shall have the right to purchase at current market price as determined by the Committee
and/or to sell to one or more third parties in either market or private transactions
sufficient Common Units payable under this Agreement to provide the funds needed for the
Company to make the required tax payment or payments.
9. Definitions; Copy of Plan. To the extent not specifically provided herein,
all terms used in this Agreement shall have the same meanings ascribed to them in the Plan.
By the execution of this Agreement, the Employee acknowledges receipt of a copy of the Plan.
If any provision of this Agreement is held to be illegal, invalid or unenforceable under
any applicable law, then such provision will be deemed to be modified to the minimum extent
necessary to render it legal, valid and enforceable; and if such provision cannot be so
modified, then this Agreement will be construed as if not containing the provision held to
be invalid, and the rights and obligations of the parties will be construed and enforced
accordingly.
10. Administration. This Agreement shall at all times be subject to the terms
and conditions of the Plan. The Committee shall have sole and complete discretion with
respect to all matters reserved to it by the Plan and decisions of the majority of the
Committee with respect thereto and this Agreement shall be final and binding upon the
Employee and the Company. In the event of any conflict between the terms and conditions of
this Agreement and the Plan, the provisions of the Plan shall control.
11. No Right to Continued Employment. This Agreement shall not be construed to
confer upon the Employee any right to continue as an Employee of the Company and shall not
limit the right of the Company, in its sole discretion, to terminate the service of the
Employee at any time.
12. Governing Law. This Agreement shall be interpreted and administered under
the laws of the State of Texas, without giving effect to any conflict of laws provisions.
13. Amendments. This Agreement may be amended only by a written agreement
executed by the Company and the Employee. Any such amendment shall be made only upon the
mutual consent of the parties, which consent (of either party) may be withheld for any
reason.
14. No Liability for Good Faith Determinations. The Company and the members of
the Committee and the Board shall not be liable for any act, omission or determination taken
or made in good faith with respect to this Agreement or the Performance Units granted
hereunder.
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15. No Guarantee of Interests. The Board and the Company do not guarantee the
Common Units from loss or depreciation.
16. Nontransferability of Agreement. This Agreement and all rights under this
Agreement shall not be transferable by the Employee during his life other than by will or
pursuant to applicable laws of descent and distribution. Any rights and privileges of the
Employee in connection herewith shall not be transferred, assigned, pledged or hypothecated
by the Employee or by any other person or persons, in any way, whether by operation of law,
or otherwise, and shall not be subject to execution, attachment, garnishment or similar
process. In the event of any such occurrence, this Agreement shall automatically be
terminated and shall thereafter be null and void. Notwithstanding the foregoing, all or some
of the Units or rights under this Agreement may be transferred to a spouse pursuant to a
domestic relations order issued by a court of competent jurisdiction.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers
thereunto duly authorized, and the Employee has set his hand effective as of the date and year
first above written.
| XXXXX LOGISTIC SERVICES, L.L.C. | ||||
| By: | ||||
| Employee | ||||
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