EXHIBIT 10.3
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement"), is entered into as
of October 29, 1999, by and between Genesis Energy, L.L.C., a
Delaware limited liability corporation (the "Company"), and Xxxx X.
xxxXxxx (the "Executive") who is employed as Executive Vice
President, Trading and Price Risk Management.
WHEREAS, the Company's Board of Directors (the "Company
Board") and the Compensation Committee of the Company Board (the
"Committee") have determined that it is in the best interests of
the Company and its Members to assure that the Company will have
the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change in Control (as
defined herein) of the Company, a termination other than for cause,
the duties and responsibilities of the Executive are substantially
and materially changed, a reduction in salary occurs or there is a
change of greater than 75 miles in the location of Executive's
place of work (collectively, "Changed Circumstances"); and
WHEREAS, the Company Board believes that it is imperative to
diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or
threatened Change in Control or Changed Circumstances, to encourage
the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change in
Control or Changed Circumstances, and to provide the Executive with
compensation arrangements upon a Change in Control or Changed
Circumstances which provide the Executive with individual financial
security and which are competitive with those of other
corporations.
WHEREAS, the Executive's employment contract with the Company
is due to expire on December 31, 1999 and the Company and Executive
desire not to extend the contract but desire to continue the
employment arrangement between the Company and Executive with the
protection afforded by this Agreement.
NOW, THEREFORE, in consideration of the premises and the
agreements herein contained, the receipt and sufficiency of which
are hereby acknowledged, the Company and Executive hereby agree as
follows:
1. Definitions. As used in this Agreement, the following
terms shall have the following meanings (the singular includes the
plural, unless the context clearly indicates otherwise):
(a) A "Changed Circumstance" shall be deemed to have occurred on
any Change in Control, termination for any reason
other than cause, the duties and responsibilities of
the Executive are substantially and materially
changed without the Executive's agreement, a
reduction in salary or there is a change of greater
than 75 miles in the location of Executive's place
of work.
(b) A "Change in Control" shall be deemed to have
occurred on the earliest of the following dates:
(i) The date any entity or person (including a
"group" within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, or any
comparable successor provisions) shall
have become the beneficial owner of, or
shall have obtained voting control over,
fifty percent (50%) or more of the then
outstanding shares of the Company; or
(ii) (1) The date the stockholders
of Genesis Energy, L.P. ("MLP") approve a
definitive agreement to sell or otherwise
dispose of substantially all the assets of
the MLP, or to merge or consolidate the
MLP with or into another partnership or
corporation, in which the MLP is not the
continuing or surviving partnership or
corporation or pursuant to which any
common shares of the MLP would be
converted into cash, securities or other
property of another partnership or
corporation, other than a merger of the
MLP in which holders of common shares
immediately prior to the merger have the
same proportionate ownership of common
stock of the surviving partnership or
corporation immediately after the merger
as immediately before, or (2) the date the
Company closes on a binding agreement to
sell or otherwise transfer (including
without limitation by merger or
consolidation) to one or more unaffiliated
entities or persons not less than a
majority of the outstanding interests in
the Company.
(c) "Change in Control Date" shall be the
date on which a Change in Control
occurs.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Termination Date" shall mean the date on which
Executive's employment with the Company is
terminated, by the Company or a Changed
Circumstance occurs by way of closing a definitive
agreement or otherwise occurs without execution of
a definitive agreement in accordance with the
definition of a "Changed Circumstance" as set forth
herein.
(f) "Termination for Cause" shall mean
(i) a conviction of any crime involving the misuse
or misappropriation of Company assets;
(ii) a material violation of Company policy;
(iii) a material violation of any rule or
regulation of any regulatory body to which the
Company or any subsidiary partnership is
subject; or
(iv) a material breach by the Executive of
Executives fiduciary responsibilities to the
Company.
2. Benefits upon Change in Control or Changed
Circumstance. At any time after a Change in Control
or any Changed Circumstance, the Company shall be
required to provide the following benefits to
Executive:
(a) The Company shall pay to the Executive
in a lump sum in cash, concurrently with the
Termination Date, the aggregate of the following
amounts:
(i) a cash lump sum payment of $420,000.00; and
(b) In addition to the cash benefits
payable pursuant to Section 2(a) hereof, all
Phantom Units (as defined in the Restricted Unit
Plan) and similar awards granted to Executive by
the Company shall immediately vest on the
Termination Date, notwithstanding any existing
vesting schedule or other terms set forth in any
plan or agreement governing the term of such
restricted stock awards and similar awards.
(c) In the event the Executive elects to
continue medical and/or dental coverage under
COBRA, the Company will pay the required premiums for a
period of six months.
(d) Any incentive compensation due in accordance with
any Incentive Compensation Plan then in effect.
(e) The Company shall make any payment required to be
made under this Agreement in cash and on demand. Any payment
required to be paid by the Company under this Agreement which
is not paid within five days of receipt by the Company of
Executive's demand therefor shall thereafter be deemed
delinquent, and the Company shall pay to Executive
immediately upon demand interest at the highest nonusurious
rate per annum allowed by applicable law from the date such
payment becomes delinquent to the date of payment of such
delinquent sum.
(f) In the event that there is any change to the Code
which results in the recodification of Section 280G (Excess
Parachute Payments) or Section 4999 of the Code, or in the
event that either such section of the Code is amended,
replaced or supplemented by other provisions of the Code of
similar import ("Successor Provisions"), then this Agreement
shall be applied and enforced with respect to such new Code
provisions in a manner consistent with the intent of the
parties as expressed herein, which is to assure that
Executive is in the same after-tax position and has received
the same benefits that he would have been in and received if
any taxes imposed by Section 4999 or any Successor Provisions
had not been imposed.
(g) As a condition to Executive receiving severance
compensation, the employee will execute a severance and
release agreement in the form attached hereto as Exhibit A
and will not compete against the Company for a period of six
months from the Termination Date.
(h) An Executive will not be prohibited from competing
against the Company for any period of time in the event the
Executive resigns, is terminated for cause, or is
involuntarily terminated and elects not to receive the
benefits described in this Section 2.
(i) Executive is employed as Company's Executive Vice
President, Trading and Price Risk Management. As Executive
Vice President, Trading and Price Risk Management, Executive
will report directly to the Chief Executive Officer and will
have such duties and responsibilities with respect to the
Company, Genesis MLP and Genesis OLP as customarily would be
undertaken by the executive vice president of companies
engaged in business similar to, or competitive with, the
Company. Executive will act in the best interest of the
Company, Genesis MLP and Genesis OLP and their subsidiaries
and affiliates in the performance of Executive's services and
duties. Executive will not actively engage in any other
business or business activity, without the prior consent of
the Non-Executive Chairman of the Board of Directors of the
Company. Nothing herein contained will limit the right of
Executive to manage Executive's personal investment
activities provided that such personal investment activities
do not materially interfere with the performance of
Executive's duties and responsibilities to the Company or
otherwise materially conflict with any policies which have
been promulgated and distributed by the Company.
(j) Executive shall not be entitled to any of the
benefits of this Agreement if Terminated for Cause as defined
herein.
4. Full Settlement. The Company's obligations to perform
hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the
Company may have against the Executive. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement. The
Company agrees to pay, to the fullest extent permitted by law, all
legal fees and expenses which the Executive may incur as a result
of any contest by the Company or others of the validity or the
enforceability of, or liability under, any provision of this
Agreement.
As consideration for Company entering into this Agreement
with Executive, Executive agrees to release and hold harmless
Company from any and all obligations that Company may otherwise
have to Executive pursuant to the terms of that certain Employment
Agreement with Executive dated November 15, 1996, as amended.
5. Non-Exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plans,
programs, policies or practices provided by the Company or any of
its subsidiaries and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the
Executive may have under any stock option, restricted stock or
other agreements with the Company or any of its subsidiaries
except for any benefit, bonus, incentive or right to which the
Executive would be entitled solely by reason of Sections 4, 5, 6
and 7 of the November 15, 1996 Agreement, the rights of the
Executive under which are released pursuant to Section 4 of this
Agreement... Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy,
practice or program of the Company or any of its subsidiaries on
the Change in Control or Changed Circumstance Termination Date
shall be payable in accordance with such plan, policy, practice or
program provided, however, that the Executive shall not be
entitled to receive any amounts to which the Executive would be
entitled solely by reason of Sections 4, 5, 6 and 7 of the
November 15, 1996 Agreement, the rights of the Executive under
which are released pursuant to Section 4 of this Agreement.
6. Funding. The Company shall pay the benefits under this
Agreement out of its general assets pursuant to the terms of this
Agreement. There shall be no special fund out of which benefits
shall be paid, nor shall the Executive be required to make a
contribution as a condition of receiving benefits.
7. Tax Withholding. The Company may withhold or cause to
be withheld from any benefits payable under this Agreement all
federal, state, city or other taxes that are required by any law
or governmental regulation or ruling.
8. Notices. Any notice required or desired to be given
under this Agreement or other communications relating to this
Agreement shall be in writing and delivered personally or mailed,
return receipt requested, to the party concerned at the address
set forth below:
If to the Company: Genesis Energy, L.L.C.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Executive: At his residence address as
maintained by the Company in the
regular course of its business for
payroll purposes.
9. Entire Agreement. This Agreement contains the entire
agreement of the parties hereto with respect to severance payments
and supersedes any prior agreement, arrangement or understanding,
whether oral or written, between the Company and Executive
concerning severance payments.
10. Choice of Law. This Agreement shall be governed by,
and enforced according to, the laws of the State of Texas. The
invalidity of any provision shall be automatically reformed to the
extent permitted by applicable law and shall not affect the
enforceability of the remaining provisions hereof. Executive
hereby waives any objection which he may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out
of or relating to this Agreement brought in the District Court of
Xxxxxx County, State of Texas, or in the United States District
Court for the Southern District of Texas, and hereby further
waives any claims that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.
11. Assignment. The rights and obligations under this
Agreement of the Company and Executive may not be assigned, except
that the Company may, at its option, assign one or more of its
rights or obligations under this Agreement to any of its
subsidiaries or affiliates, provided that in each case the Company
shall remain responsible for its obligation hereunder.
12. Counterparts. This Agreement may be executed in several
identical counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when so executed and
delivered, shall constitute an original instrument, and all such
separate counterparts shall constitute but one and the same
instrument.
13. Modification. This Agreement may be modified only by
written agreement signed by Executive and by the President or
Secretary of the Company. The failure to insist upon compliance
with any provision hereof shall not be deemed a waiver of such
provision or any other provision hereof.
14. Term. This Agreement shall commence as of October 29,
1999 and shall terminate on December 31, 2000; provided, however,
that if any Change of Control or Changed Circumstance occurs
between December 31, 2000 and July 1, 2001 then the provisions of
this Agreement shall be applicable to the benefit of Executive.
IN WITNESS WHEREOF, the undersigned parties have executed
this Agreement effective as of the date first written above.
GENESIS ENERGY, L.L.C.
By:/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
Chief Financial Officer
/s/ Xxxx X. xxxXxxx
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Xxxx X. xxxXxxx
Executive Vice President
Trading and Price Risk Management
