Attached files
| file | filename |
|---|---|
| EX-10.2 - EXHIBIT 10.2 - GENESIS ENERGY LP | ex10_2.htm |
| EX-10.3 - EXHIBIT 10.3 - GENESIS ENERGY LP | ex10_3.htm |
| EX-10.5 - EXHIBIT 10.5 - GENESIS ENERGY LP | ex10_5.htm |
| EX-10.4 - EXHIBIT 10.4 - GENESIS ENERGY LP | ex10_4.htm |
| EX-10.8 - EXHIBIT 10.8 - GENESIS ENERGY LP | ex10_8.htm |
| EX-3.1 - EXHIBIT 3.1 - GENESIS ENERGY LP | ex3_1.htm |
| EX-10.7 - EXHIBIT 10.7 - GENESIS ENERGY LP | ex10_7.htm |
| EX-10.6 - EXHIBIT 10.6 - GENESIS ENERGY LP | ex10_6.htm |
| EX-10.1 - EXHIBIT 10.1 - GENESIS ENERGY LP | ex10_1.htm |
| EX-4.1 - EXHIBIT 4.1 - GENESIS ENERGY LP | ex4_1.htm |
| 8-K - GENESIS ENERGY 8-K 2-5-2010 - GENESIS ENERGY LP | form8k.htm |
Exhibit
10.9
RESTRICTED
UNIT AGREEMENT
This RESTRICTED UNIT AGREEMENT
(this “Agreement”)
is made as of February 5, 2010 (the “Effective
Date”), between GENESIS
ENERGY, LLC, a Delaware limited liability company (the “Company”),
and Karen Pape, (the “Principal”). Capitalized
terms used in this Agreement but not defined in the body hereof are defined in
Exhibit
A.
WHEREAS, the Amended and
Restated Limited Liability Company Agreement of the Company (as amended from
time to time, the “LLC
Agreement”) authorizes the issuance by the Company of Series B-1 Units;
and
WHEREAS, the Company desires
to issue to the Principal on the terms and conditions hereinafter set forth, and
the Principal desires to accept on such terms and conditions, the number of
Series B-1 Units specified herein.
NOW, THEREFORE, in
consideration of the mutual promises, covenants and obligations contained herein
and other good and valuable consideration, the Company and the Principal agree
as follows:
1.
Issuance of
Units. The
Company hereby issues 33 Series B-1 Units (the “Series B-1
Units”) to the Principal which shall vest in accordance with the
provisions of Section
4 below. The Threshold Value for each Series B-1 Unit shall be
equal to zero. The Series B-1 Units are intended to constitute
“profits interests” within the meaning of Revenue Procedures 93-27 and
2001-43.
2.
Terms of
Issuance.
(a) As
an inducement to the Company to enter into this Agreement, concurrently with the
execution and delivery of this Agreement, the Principal shall be granted Series
B-1 Units.
(b) The
Principal acknowledges and agrees that no provision contained in this Agreement
shall entitle the Principal to remain in the employment of the
Company.
(c) The
Principal acknowledges and agrees that, except as provided in the LLC Agreement,
the Company has no duty or obligation to disclose to the Principal, and the
Principal shall have no right to be advised of, any information regarding the
Company in connection with the forfeiture or redemption of the Series B-1 Units
pursuant to the terms and conditions of this Agreement.
(d) The
Principal acknowledges and agrees that the Series B-1 Units are a designated
series of the Series B Units authorized and issued pursuant to the LLC Agreement
and subject to all of the restrictions applicable to Series B-1 Units as set
forth in the LLC Agreement and in this Agreement.
3.
Unvested Series B-1
Units. Except
as provided in Section
4 below, all Series B-1 Units shall initially be deemed “Unvested Series
B-1 Units” under the LLC Agreement (“Unvested
Units”), shall be subject to all of the restrictions on Series B-1 Units
contained in the LLC Agreement and, to the extent the LLC Agreement
distinguishes between Vested Series B-1 Units and Unvested Series B-1 Units,
shall carry only such rights as are conferred on Unvested Series B-1 Units under
the LLC Agreement.
4.
Vesting of Series B-1
Units.
(a) Subject
to Section
4(g), if the Principal is, and has been, continuously employed by the
Company from the date of this Agreement through the first anniversary date of
the Effective Date, then on such anniversary date twenty-five percent (25%) of
the Series B-1 Units will be “Vested Series B
Units” under the LLC Agreement (“Vested
Units”). Vested Units shall no longer be deemed Unvested
Series B-1 Units, shall no longer be subject to the restrictions on Unvested
Series B Units (but shall remain subject to the restrictions on the Series B
Units in general) under the LLC Agreement and, to the extent the LLC Agreement
distinguishes between Vested Series B-1 Units and Unvested Series B-1 Units,
shall carry all of the rights conferred on Vested Series B-1 Units under the LLC
Agreement.
(b) Subject
to Section
4(g), if Principal is, and has been, continuously employed by the Company
from the date of this Agreement through the second anniversary date of the
Effective Date, then on such anniversary date thirty-three and one-third percent
(33 1/3%) of the remaining Unvested Units will become Vested Units (which, for
the sake of clarity, will constitute one-fourth of the total number of original
Series B-1 Units).
(c) Subject
to Section
4(g), if Principal is, and has been, continuously employed by the Company
from the date of this Agreement through the third anniversary date of the
Effective Date, then on such anniversary date fifty percent (50%) of the
remaining Unvested Units will become Vested Units (which, for the sake of
clarity, will constitute one-fourth of the total number of original Series B-1
Units).
(d) Subject
to Section
4(g), if Principal is, and has been, continuously employed by the Company
from the date of this Agreement through the fourth anniversary date of the
Effective Date, then on such anniversary date the remaining Unvested Units will
become Vested Units.
(e) Following
consummation by the Company of a Qualified Public Offering, all shares of common
stock of the IPO corporate issuer issued in respect of any Unvested Units issued
pursuant hereto shall continue to be subject to vesting in accordance with Section 4(a) through
Section 4(d)
hereto.
(f) In
the event of the consummation of a sale or business combination that results in
a Change of Control or upon the occurrence of a Sale of the Business, all Series
B-1 Units that shall not have previously become Vested Units shall become Vested
Units as of the consummation of such Change of Control or Sale of the Business;
provided, that the
Principal has been continuously employed by the Company from the date of this
Agreement until the consummation of such Change of Control or Sale of the
Business.
(g) Notwithstanding
the foregoing Sections
4(a)-(d); if Principal’s employment with the Company is terminated as a
result of death or Disability at any time prior to an anniversary of the
Effective Date, the percentage of the Unvested Units that would have vested but
for the Principal’s death or Disability on such anniversary date of the
Effective Date will become Vested Units on such date of death or Disability, and
the remaining Unvested Units shall be forfeited, for no consideration, as
provided in Section
5(b)(i).
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5.
Forfeiture of and Right to
Purchase Series B-1 Units.
(a) If
the Principal’s employment with the Company is terminated by the Company for
Cause or the Principal terminates his employment with the Company without Good
Reason, then the Principal, and any other Person who shall be the holder of any
of the Series B-1 Units on the date of such termination or resignation, shall
forfeit to the Company all of such Series B-1 Units (including any Vested Units
and any Unvested Units) and all rights arising from such Units, and no
consideration shall be paid in respect of such Units.
(b) If
the Principal’s employment with the Company is terminated without Cause, by
reason of the Principal’s death or Disability or by the Principal for Good
Reason, then:
(i) subject
to Section
4(g), the Principal, and any other Person who shall be the holder of any
of the Series B-1 Units on the date of such termination or resignation, shall
forfeit to the Company all of the Unvested Units and all rights arising from
such Unvested Units and no consideration shall be paid in respect of such
Units;
(ii) the
Company shall have the right to redeem, in accordance with Section 6 below, any
or all of the Principal’s Vested Units at a redemption price equal to the Fair
Market Value of such Units;
(c) The
forfeitures of Units subject to the terms and conditions of this Section 5 shall
occur immediately and without further action of the Company except with respect
to death or Disability as provided below, the Principal or any other Person upon
the termination, resignation, death, Disability or breach giving rise thereto
(the date of such termination, resignation, death, Disability or breach being
the “Trigger
Date”). The Company’s right to redeem or purchase Vested Units
pursuant to Section
5 shall apply to all Units, whether then held by the Principal or any
other Person to whom the Principal may have transferred such Units in accordance
with the LLC Agreement.
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6.
Procedure for
Redemption/Purchase of Vested Units.
(a) Within
ninety days of the Trigger Date, the Board shall provide the Principal, the
Principal’s legal representative or guardian, or the executor of the Principal’s
estate (as applicable, the “Representative”),
with written notice of its determination of the fair market value, as of the
date of termination, of the Vested Units that are subject to redemption under
Section 5 (the
“Purchase
Price”), together with a non-binding estimate of the number of Vested
Units that the Company anticipates it will redeem and a worksheet showing in
reasonable detail its determination of the Purchase Price. In each
case, “fair market value” shall equal the amount that would be distributed with
respect to such Vested Units if the assets of the Company were sold for their
Fair Market Value as of such date of termination and there was a hypothetical
complete liquidation of the Company and the proceeds were distributed, after
payment or other satisfaction of all liabilities and other obligations of the
Company, by the Company pursuant to Section 6.1 of the LLC
Agreement. The Representative shall have the right to dispute in
writing the Board’s determination of the Purchase Price within thirty days
following receipt of the Board’s determination (the “Notice
Period”). If the Company has not received written notice of
such a dispute within the Notice Period, the Purchase Price as determined by the
Board shall be deemed to be the final Purchase Price. If the Company
has received written notice of such a dispute within the Notice Period, then the
Company and the Representative shall, for an additional thirty days following
receipt of such written notice of dispute (such additional thirty-day period,
the “Resolution
Period”), attempt to reach agreement on the Purchase Price. If
no resolution of this dispute is finalized within the Resolution Period, the
Board’s determination of the Purchase Price shall be submitted for review and
final determination by an independent valuation firm (the “Independent
Valuation Firm”) selected by the Board. The Independent
Valuation Firm shall review all relevant data, including any necessary books and
records of the Company, to determine the changes to the Purchase Price
calculation, if any, necessary to resolve only the disputed items or
amounts. The determination by the Independent Valuation Firm shall be
made as promptly as practical, but in no event beyond thirty days from its
engagement, and shall be final and binding. If the final Purchase
Price as determined by the Independent Valuation Firm is ten percent or more
lower than the Purchase Price as determined by the Board, the costs of the
Independent Valuation Firm shall be borne by the Representative. If
the final Purchase Price as determined by the Independent Valuation Firm is ten
percent or more higher than the Purchase Price as determined by the Board, the
costs of the Independent Valuation Firm shall be borne by the
Company. If the final Purchase Price as determined by the Independent
Valuation Firm is any other amount, the costs of the Independent Valuation Firm
shall be borne fifty percent by the Company and fifty percent by the
Representative.
(b) Following
the final determination of the Purchase Price as provided above, the Company
shall give written notice to the Representative of the number of Vested Units
that are subject to redemption pursuant to Section 5 (the “Subject
Units”), and the final Purchase Price. The date that such
notice is received by the Representative shall constitute the “Purchase Notice
Date.”
(c) In
the event the Company elects to redeem any or all of the Subject Units pursuant
to Section
5(b)(ii), the Company shall set a reasonable place and time for the
closing of the redemption of such Subject Units, which shall be not less than
fifteen days nor more than forty-five days after the Purchase Notice
Date.
(d) Any
payment of the Purchase Price for any Subject Units by the Company shall be made
in the form of cash or a Company check, payable to the Representative; provided, however, that any
such payment by the Company may be made, at the option of the Board, in the form
of an unsecured promissory note issued by the Company to the Representative with
a term of two (2) years, interest accruing at a rate of eight percent (8.0%) per
annum, compounded annually, with quarterly principal payments and interest due
and payable quarterly in arrears. Any such note shall contain
restrictions on the holder’s ability to pledge, borrow against or collateralize
such note and shall contain customary subordination provisions for the benefit
of the Company’s lenders. Upon payment of such Purchase Price by the
Company (or issuance of the promissory note described in this Section 6(d)), such
Subject Units shall automatically be cancelled without further action by the
Company, the Principal or any other Person.
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(e) The
Representative shall execute and deliver all documentation and agreements
reasonably requested by the Company to reflect a purchase/redemption of the
Subject Units pursuant to this Agreement, but neither the failure of the
Representative to execute or deliver any such documentation, nor the failure of
the Representative to deposit the Company’s check, shall affect the validity of
a purchase/redemption of the Subject Units pursuant to this
Agreement.
(f) In
connection with any purchase/redemption of the Subject Units hereunder, the
Representative shall not be required to make any representations, warranties or
indemnities, other than customary representations, warranties and indemnities
concerning (i) the Representative’s valid ownership of the Subject Units,
free of all liens and encumbrances (excluding those arising under applicable
securities laws and any arising under the LLC Agreement), (ii) the
Representative’s authority, power and right to enter into and consummate the
sale of any Subject Units without violating any other agreement to which the
Representative is a party or by which his assets are bound,
and (iii) compliance with applicable laws.
7.
Representations and
Warranties of the Principal. The
Principal represents and warrants to the Company as follows:
(a) All
of the representations and warranties made by the Principal pursuant to Article
IV of the LLC Agreement are true and correct as of the date hereof.
(b) This
Agreement constitutes the legal, valid and binding obligation of the Principal,
enforceable in accordance with its terms, and the execution, delivery and
performance of this Agreement by the Principal does not and will not conflict
with, violate or cause a breach of any agreement, contract or instrument to
which the Principal is a party or any judgment, order or decree to which the
Principal is subject.
(c) The
Principal believes that he has received all the information he considers
necessary in connection with his execution of this Agreement, and the Principal
has had an opportunity to ask questions and receive answers from the Company and
from counsel regarding the terms, conditions and limitations set forth in this
Agreement and the business, properties, prospects and financial condition of the
Company and its subsidiaries and to obtain additional information (to the extent
the Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify the accuracy of any information furnished
to the Principal or to which the Principal had access.
8.
Withholding; 83(b)
Election. To
the extent that the receipt of the Series B-1 Units, the vesting of the Series
B-1 Units, or the execution of this Agreement results in compensation income or
wages from the Company to the Principal for federal, state or local tax
purposes, the Principal shall deliver to the Company at the time of such
receipt, lapse or execution, as the case may be, such amount of money as the
Company may require to meet its minimum obligation under applicable tax laws or
regulations, and if the Principal fails to do so, the Company is authorized to
withhold from any cash or Unit remuneration (including withholding any Vested
Units distributable to the Principal under this Agreement) then or thereafter
payable to the Principal any tax required to be withheld by reason of such
resulting compensation income or wages. Within thirty (30) days after
the date of the issuance of the Series B-1 Units, the Principal shall make an
election authorized by section 83(b) of the Code with respect to the Series B-1
Units and the Principal shall submit to the Company a copy of the statement
filed by the Principal to make such election. The form of such
election shall be in the form attached as Exhibit
B.
5
9.
Confidential
Information.
(a) As
used in this Agreement, “Confidential
Information” means information belonging to a Related Party which is of
value to the Related Party, disclosed before or after the Effective Date in the
course of conducting its business, and the disclosure of which could result in a
competitive or other disadvantage to a Related Party. Confidential
Information includes, but is not be limited to, the Related Parties’ various
trade secrets and confidential or proprietary information, including information
Principal has received before first being employed by the Company, consisting
of, but not limited to, information relating to: (a) business operations and
methods; (b) existing and proposed acquisitions, acquisition strategies,
investments, investment strategies and business plans; (c) financial
performance; (d) compensation arrangements and amounts (whether relating to the
Related Parties, or to any of their respective employees); (e) contractual
relationships (including the terms of this Agreement); (f) business partners and
relationships; (g) limited partners and prospective limited partners of the
Related Parties; (h) marketing strategies; (i) lists with information related to
existing or prospective customers, partners or investors, including, but not
limited to particular investments, investment strategies, investment patterns
and amounts; (j) consulting and similar reports from third parties; (k)
inventions, improvements and other intellectual property; trade secrets;
designs, processes or formulae; software; and (l) computerized investment
approaches, methodologies, trading systems or programs, mathematical models,
simulated results, simulation software, price or research databases, other
research, algorithms, numerical techniques, analytical results, or technical
data, regardless of the medium in which any such information is contained, which
have been discussed or considered by a Related Party either before or after the
Effective Date. Confidential Information also includes the
confidential information of others with which a Related Party has a business
relationship. Notwithstanding the foregoing, Confidential Information
does not include (a) general business experience or knowledge and (b)
information that becomes available in the public domain, unless due to breach of
the Principal’s duties under this Section
9. All inventions, ideas, concepts, business opportunities,
improvements, and works of authorship, including all patent, copyright, trade
secret, trademark or other intellectual property rights therein, whether or not
reduced to practice, that the Principal, either alone or jointly with others,
conceives, reduces to practice, invents, makes, or authors during the
Principal’s employment with the Company and that relate to or result from the
business of a Related Party (collectively, the “Intellectual
Property”), shall be the sole and exclusive property of the
Company. The Principal hereby assigns all rights in and to the
Intellectual Property throughout the world to the Company. All
documents and files, both digital and tangible, embodying such Intellectual
Property shall also be the sole and exclusive property of the
Company. The Principal agrees to execute all assignments necessary to
record or evidence title to the Intellectual Property in the Company by signing
a written assignment of the Intellectual Property in favor of the Company,
including in connection with the prosecution of any patent or copyright
application.
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(b) The
Principal understands and agrees that the Principal’s employment creates a
relationship of confidence and trust between the Principal and the Related
Parties with respect to all Confidential Information. At all times,
both during the Principal’s employment with the Company and after its
termination, the Principal will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such Confidential
Information without the written consent of the Company, except as may be
necessary in the ordinary course of performing the Principal’s duties to the
Related Parties. All documents, records, data, apparatus, equipment
and other physical property, whether or not pertaining to Confidential
Information, which are furnished to the Principal by a Related Party or are
produced by the Principal in connection with the Principal’s employment, will be
and remain the sole property of the Company or the applicable Related
Party. The Principal will return to the Related Party all such
materials and property as and when requested by the Company or the applicable
Related Party. In any event, the Principal will return all such
materials and property immediately upon termination of the Principal’s
employment for any reason. The Principal will not retain any such
material or property or any copies thereof after such termination, except that
the Principal may retain a list of materials returned in order to prove that
such information was actually returned to the Company or the applicable Related
Party.
(c) During
the period of the Principal’s employment by the Company and thereafter, the
Principal shall assist the Related Parties and their respective nominees, at any
time, in the protection of the Related Parties’ worldwide right, title, and
interest in and to Confidential Information and the execution of all formal
assignment documents requested by the Related Parties or their respective
nominees and the execution of all lawful oaths and applications for patents and
registration of copyright in the United States and foreign
countries. The Principal’s reasonable out-of-pocket expenses
(including the reasonable costs of counsel, if any) incurred in providing such
assistance shall be paid or reimbursed by the Related Party requesting such
assistance. The Principal shall be fairly compensated at market rates
for any such assistance provided by the Principal at any time following the
termination of the Principal’s employment with the Company (it being understood
that the Principal shall not be entitled to any compensation in excess of the
severance compensation and benefits set forth in Section 1 in
connection with any such assistance provided by the Principal during the period
in which such severance compensation and benefits are provided).
(d) The
Principal represents and warrants to the Company that (i) he does not have any
agreements with any current or prior employer that will prohibit him from
working for the Company or fulfilling his duties and obligations to the Company
and the other Related Parties pursuant to this Agreement and (ii) he has
complied with all noncompetition, nonsolicitation, and confidentiality duties
imposed on him with respect to his former employers, e.g., the Principal does not
possess any tangible property belonging to any former employer without having
the right to possess such property. The Principal agrees that during
the Principal’s employment with the Company, the Principal will not disclose to
the Company, or use or induce the Company to use, any non-public, confidential
or proprietary information, documents or materials belonging to any third party,
including any prior employer. The Principal acknowledges that the
Company has expressly stated that it does not wish to receive any such
information or for the Principal to use such information in the course of the
Principal’s employment with the Company. Further, the Principal
agrees to indemnify the Company and each Related Party for any claim, including,
but not limited to, reasonable attorneys’ fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company or any Related Party based upon or arising out of any
non-competition, nonsolicitation, confidentiality or other agreement between
Principal and such third party which was in existence as of the date of this
Agreement.
7
(e) The
Principal acknowledges that money damages would not be sufficient remedy for any
breach of this Section
9 by the Principal, and the Company or any other Related Party shall be
entitled to enforce the provisions of this Section 9 by
terminating payments then owing to the Principal under this Agreement or
otherwise and to specific performance and injunctive relief as remedies for such
breach or any threatened breach. Such remedies shall not be deemed
the exclusive remedies for a breach of this Section 9 but shall
be in addition to all remedies available at law or in equity, including the
recovery of damages from the Principal and his agents.
(f)
Notwithstanding anything to the contrary, the Principal’s disclosure of
confidential information shall not be deemed a violation of this Section 9 to the
extent that (i) disclosure is required by law or by any court or other
governmental authority with jurisdiction or authority to order the Principal to
disclose or make accessible any such information or (ii) such information
becomes a part of the public domain so long as the Principal has not violated
this Section 9
in respect of such information; provided, however, that in
the event disclosure is required under clause (i) and the Principal is making
such disclosure, the Principal shall provide the Company with prompt notice of
such requirement prior to making any disclosure, so that the Company may seek an
appropriate protective order. At the request of the Company, the
Principal agrees to deliver to the Company, at any time during the term of
employment with the Company or thereafter, all Confidential Information and
Intellectual Property that he may possess or control.
(g)
Nothing in this Agreement shall prevent the
Principal from using at any time his general knowledge, skill, experience and
expertise in the conduct of his business or other activities, except and only to
the extent such business or other activities would be specifically prohibited by
this Section 9,
Section 10 or
Section
11.
10.
DISPARAGEMENT.
During the Principal’s employment with the Company and following any
termination of such employment, (a) the Principal agrees not to disparage,
either orally or in writing, any of the Related Parties or any Quintana-Related
Entities, any of the Related Parties’ or any Quintana-Related Entities’
business, products, services or practices, or any of the Related Parties’ or any
Quintana-Related Entities’ directors, officers, agents, representatives,
stockholders, partners, members, employees, or their applicable Affiliates and
(b) the Company agrees not to disparage, and to cause the Related Parties not to
disparage, either orally or in writing, the Principal.
11.
Non-Competition
Obligations.
(a) The
Principal expressly covenants and agrees that during the Prohibited Period (as
defined below), (i) such Principal will not, other than in the normal course of
such Principal’s employment with the Company or any of its Affiliates, engage
directly or indirectly in any Competing Business in the Restricted Area, and (B)
such Principal will not, and will cause its Affiliates not to, directly or
indirectly, own, manage, operate, join, become an employee of, control or
participate in or be connected with, or loan money to or sell or lease equipment
or real estate to, any business, individual, partnership, firm, corporation or
other Person, which engages in a Competing Business in the Restricted
Area. For purposes of this Section 11(a), any
such business, individual, partnership, firm, corporation or other Person shall
be deemed to be a Competing Business if more than 5% of its gross revenues in
any twelve (12) month period are attributable to the provision of services or to
operations that compete with the Company. In no event will the
Company or any of its Affiliates be deemed to be a Competing
Business.
8
(i) As
used in this Agreement:
(A) “Competing
Business” shall mean (x) any business in which the Related Parties are
engaged or into which any Related Party has considered expanding (as evidenced
by the consideration of capital expenditure plans or the expenditure of capital,
site visits, discussions with potential acquisition or partnership targets and
the like), in each case as of the Effective Date and (y) any business in which
the Related Parties are engaged or into which any Related Party has considered
expanding within twelve (12) months prior to the termination of this Agreement
(as evidenced by the consideration of capital expenditure plans or the
expenditure of capital, site visits, discussions with potential acquisition or
partnership targets and the like), in each case as of (1) the date of
termination of the Principal’s employment with the Company or (2) the date on
which the Principal ceases to hold any equity interest in the Company or any of
its successors or assigns, whichever is later.
(B)
“Prohibited
Period”
shall mean the longer of (x) the time period during which the Principal is an
employee, officer, or director of the Company or any of its Affiliates and
eighteen (18) months thereafter or (y) the time period during which the
Principal holds any equity interest in the Company or any of its successors or
assigns and eighteen (18) months thereafter.
(C)
“Restricted
Area” shall mean any state in which the Genesis Energy, L.P., a Delaware
limited partnership, is operating at the time of termination of this
Agreement
(b) Notwithstanding
the restrictions contained in Section 11(a), the
Principal or any of his Affiliates may own an aggregate of not more than two and
a half percent (2.5%) of the outstanding capital stock of any class of any
entity engaged in a Competing Business, if such capital stock is listed on a
national securities exchange or regularly traded in the over-the-counter market
by a member of a national securities exchange, without violating the provisions
of Section
11(a), provided,
that neither the Principal nor his Affiliates have the power, directly or
indirectly, to control or direct the management or affairs of any such entity
and are not involved in the management of such entity.
9
(c) The
Principal further expressly covenants and agrees that during the Prohibited
Period, he will not, other than on behalf of the Company or any of its
Affiliates, and he will cause his Affiliates not to (i) engage or employ, or
solicit or contact with a view to the engagement or employment of any Person who
is an officer, employee or agent of the Company or its Affiliates or (ii)
canvass, solicit, approach or entice away or cause to be canvassed, solicited,
approached or enticed away from the Company or any of its Affiliates any Person
who or which is a customer, consultant or supplier of the Company or its
Affiliates.
(d) The
Principal further expressly covenants and agrees that during the Prohibited
Period, he will not, other than on behalf of the Company or any of its
Affiliates, and he will cause his Affiliates not to, call upon any prospective
acquisition candidate for the purpose of completing an acquisition of such
target on such Principal’s own behalf or on behalf of any Competing Business,
which candidate is a Competing Business or which candidate was, to such
Principal’s knowledge, either called upon by the Company or any of its
subsidiaries or for which the Company or any of its subsidiaries made an
acquisition analysis, for the purpose of acquiring such candidate.
(e) The
Principal further expressly covenants and agrees that during the Prohibited
Period, he will advise the Company of the identity of any new employer of the
Principal within ten (10) days of accepting such employment.
(f)
The Principal and the
Company acknowledge and agree that the restrictions as to time, geographic area
and scope of activity set forth in Section 11(a) are
reasonable and do not impose any greater restraint than is necessary to protect
the legitimate business interests of the Company. The Principal
understands that such restrictions may limit his ability to engage in certain
businesses anywhere in the Restricted Area during the Prohibited Period, but
acknowledges that he will receive sufficiently high remuneration and other
benefits from the Company to justify such restrictions. Further, the
Principal acknowledges that his skills are such that he can be gainfully
employed in non-competitive employment, and that the agreement not to compete
will in no way prevent him from earning a living. Nevertheless, if
any of the aforesaid restrictions are found by a court of competent jurisdiction
to be unreasonable, or overly broad as to geographic area or time, or otherwise
unenforceable, the parties intend for the restrictions therein set forth to be
modified by the court making such determination so as to be reasonable and
enforceable and, as so modified, to be fully enforced. By agreeing to
this contractual modification prospectively at this time, the Company and the
Principal intend to make this provision enforceable under the law or laws of all
applicable States so that the entire agreement not to compete and this Agreement
as prospectively modified shall remain in full force and effect and shall not be
rendered void or illegal.
(g) The
Principal and the Company further acknowledge and agree that, in the event of a
breach or threatened breach of any of the provisions of this Section 11, the
Company shall be entitled to immediate injunctive relief, as any such breach
would cause the Company irreparable injury for which it would have no adequate
remedy at law. Nothing herein shall be construed so as to prohibit
the Company from pursuing any other remedies available to it hereunder, at law
or in equity for any such breach or threatened breach.
10
(h) The
Principal hereby represents to the Company that he has read and understands, and
agrees to be bound by, the terms of this Section
11. The Principal acknowledges that the geographic scope and
duration of the covenants contained in this Section 11 are the
result of arm’s-length bargaining and are fair and reasonable in light of (i)
the nature and wide geographic scope of the operations of the Company Business,
(ii) the Principal’s level of control over and contact with the Company Business
in all jurisdictions in which it is conducted, (iii) the fact that the Company
Business is conducted throughout the geographic area where competition is
restricted by this Agreement, and (iv) the amount of consideration that the
Principal is receiving in connection with the transactions contemplated by this
Agreement. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permitted under
applicable Laws, whether now or hereafter in effect and therefore, to the extent
permitted by applicable Laws, the parties waive any provision of applicable Laws
that would render any provision of this Section 11 invalid or
unenforceable.
12.
Duty
of Loyalty. The Principal acknowledges and agrees that the
Principal owes a fiduciary duty of loyalty to act at all times in the best
interests of the Related Parties. In keeping with such duty, the
Principal shall make full disclosure to the Company of all business
opportunities pertaining to the Related Parties’ business and shall not
appropriate for the Principal’s own benefit business opportunities concerning
the Related Parties’ business.
13.
General
Provisions.
(a) Notices. For purposes of this
Agreement, notices and all other communications provided for herein shall be in
writing and shall be personally delivered, mailed by certified mail, return
receipt requested, or delivered by nationally recognized overnight delivery
service with proof of receipt maintained, at the following addresses (or any
other address that any party may designate by written notice to the other party,
in accordance herewith, except that such notice shall be effective only upon
receipt):
|
|
If
to the Company to:
|
GENESIS
ENERGY, LLC
|
919
Milam, Suite 2100
Houston,
Texas 77002
Attention: Grant
Sims
|
|
with
a copy to:
|
Andrews
Kurth LLP
|
600
Travis Street, Suite 4200
Houston,
Texas 77002
Attention: G.
Michael O’Leary
|
|
If
to the Principal to:
|
Karen
Pape
|
_____________________
_____________________
11
Any such
notice shall be effective (i) if delivered personally, upon receipt thereof by
the recipient; (ii) if delivered by nationally recognized overnight delivery
service, on the first business day after being sent or (iii) if delivered by
certified mail, upon the earlier of actual receipt thereof by the recipient or
five business days after the date of deposit in the United States
mail.
(b) Governing Law. THIS AGREEMENT
IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH
STATE.
(c) Consent to
Jurisdiction.
(i)
The parties hereto hereby irrevocably submit
to the exclusive jurisdiction of the courts of the State of Texas and the
federal courts of the United States of America located in Harris County, Texas,
and appropriate appellate courts therefrom, over any dispute arising out of or
relating to this Agreement or any of the transactions contemplated hereby, and
each party hereby irrevocably agrees that all claims in respect of such dispute
or proceeding may be heard and determined in such courts. The parties
hereby irrevocably waive, to the fullest extent permitted by applicable Law, any
objection which they may now or hereafter have to the laying of venue of any
dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. Each of the parties hereto
agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
Law. This consent to jurisdiction is being given solely for purposes
of this Agreement and is not intended to, and shall not, confer consent to
jurisdiction with respect to any other dispute in which a party to this
Agreement may become involved.
(ii)
Each of the parties hereto
hereby consents to process being served by any party to this Agreement in any
suit, action, or proceeding of the nature specified in subsection (i) above by
the mailing of a copy thereof in the manner specified by the provisions of Section
13(a).
(iii) EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
(d) Amendment and Waiver. The
provisions of this Agreement may be amended, modified or waived only with the
prior written consent of the Company and the Principal, and no course of conduct
or failure or delay in enforcing the provisions of this Agreement shall be
construed as a waiver of such provisions or affect the validity, binding effect
or enforceability of this Agreement or any provision hereof.
12
(e) Severability. Any
provision in this Agreement which is prohibited or unenforceable in any
jurisdiction by reason of applicable law shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
(f)
Entire
Agreement. This Agreement and the LLC Agreement embody the
complete agreement and understanding among the parties hereto with respect to
the subject matter hereof and supersede and preempt any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
(g) Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same Agreement.
(h) Headings. The
paragraph headings have been inserted for purposes of convenience and shall not
be used for interpretive purposes.
(i)
Gender
and Plurals. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.
(j)
Successors and
Assigns. Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit of and be enforceable by and against the
Principal, the Company and their respective successors, assigns, heirs,
representative and estate, as the case may be (including subsequent holders of
Series B-1 Units); provided, that the rights and
obligations of the Principal under this Agreement shall not be assignable except
in connection with a transfer of the Series B-1 Units permitted under the LLC
Agreement. Notwithstanding anything else in this Agreement or in the
LLC Agreement each Series B-1 Unit shall remain subject to the terms
of the LLC Agreement and this Agreement regardless of who holds such Series B-1
Unit and the effect that the employment by the Company of the
Principal or events related to such employment have on the rights of and
restrictions on the Series B-1 Units, including vesting, and the rights of the
Company with regard to the Series B-1 Units, under this Agreement, shall not be
altered by any transfer of the Series B-1 Units.
(k) Employment
Relationship. Nothing in the issuance of the Series B-1 Units
and nothing in this Agreement shall confer upon the Principal the right to
continued employment by the Company or affect in any way the right of the
Company to terminate such employment at any time.
(l)
Rights of Third
Parties. Nothing expressed or implied in this Agreement is
intended or shall be construed to confer upon or give any Person, other than the
Parties hereto, any rights or remedies under or by reason of this
Agreement.
(m) Construction. Where
specific language is used to clarify by example a general statement contained
herein, such specific language shall not be deemed to modify, limit or restrict
in any manner the construction of the general statement to which it
relates. The language used in this Agreement shall be deemed to be
the language chosen by the parties to express their mutual intent, and no rule
of strict construction shall be applied against any party.
13
(n) Survival of Representations,
Warranties and Agreements. All representations, warranties and
agreements contained herein shall survive the consummation of the transactions
contemplated hereby and the termination of this Agreement.
(o) WAIVER OF PUNITIVE AND EXEMPLARY
DAMAGE CLAIMS. EACH PARTY, BY EXECUTING THIS AGREEMENT,
WAIVES, TO THE FULLEST EXTENT ALLOWED BY LAW, ANY CLAIMS TO RECOVER PUNITIVE,
EXEMPLARY OR SIMILAR DAMAGES NOT MEASURED BY THE PREVAILING PARTY’S ACTUAL
DAMAGES IN ANY DISPUTE OR CONTROVERSY ARISING UNDER, RELATING TO OR IN
CONNECTION WITH THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO, ANY ARBITRATION
PROCEEDING.
* * *
14
IN WITNESS WHEREOF, the
parties hereto have executed this Restricted Unit Agreement as of the date first
written above.
|
GENESIS
ENERGY, LLC
|
||
|
By:
|
/s/ Robert V. Deere
|
|
|
Name:
|
Robert V. Deere
|
|
|
Title:
|
Chief Financial Officer
|
|
|
/s/ Karen Pape
|
||
|
Karen
Pape
|
||
SPOUSAL
CONSENT
The
undersigned Principal’s spouse, if any, is fully aware of, understands and fully
consents and agrees to the provisions of this Agreement and the LLC Agreement
and their binding effect upon any marital or community property interests he may
now or hereafter own, and agrees that the termination of his and the Principal’s
marital relationship for any reason shall not have the effect of removing any
Series B-1 Units otherwise subject to this Agreement from coverage hereunder and
that her awareness, understanding, consent and agreement are evidenced by his
signature below.
|
Spouse
of Karen Pape
|
[Signature
Page to Pape Restricted Unit Agreement]
EXHIBIT
A
DEFINED
TERMS
“Act” is
defined in the LLC Agreement.
“Affiliate”
is defined in the LLC Agreement.
“Board” is
defined in the LLC Agreement.
“Cause”
shall mean the Principal’s (i) conviction or plea of nolo contendere in a court of
law of any crime or offense (excluding misdemeanors, minor traffic violations
and other minor offenses), imposition of unadjudicated probation for any felony
(or any other crime involving moral turpitude, fraud, embezzlement, material
misconduct or misappropriation) or the Principal’s indictment or entering into a
consent decree relating to any violations of U.S. or foreign securities laws,
(ii) willful misconduct or gross negligence in connection with the business or
affairs of any Related Party, (iii) substance abuse, including abuse of alcohol,
drugs or other substances or use of illegal narcotics or substances, for which
the Principal fails to undertake treatment immediately after requested by the
Board or to complete such treatment and which abuse continues or resumes after
such treatment period, or possession of illegal narcotics or substances on the
premises of any Related Party or while performing the Principal’s duties and
responsibilities, (iv) misappropriation of funds or other acts of dishonesty
involving any Related Party, (v) continuing failure or refusal to perform the
Principal’s duties or to carry out in all material respects the lawful
directives of the Board which remains uncorrected thirty (30) days after the
Principal receives notice of such failure or refusal or (vi) material breach of
the terms of this Agreement or any other agreement between the Principal and any
Related Party.
“Change of
Control” means the occurrence of any of the following events other than
any event that constitutes an Internal Restructure:
(a) at
any time prior to the consummation of a Qualified Public Offering (i) the sale
of more than 50% of the issued and outstanding Aggregate Series A Units of the
Company held by the Persons who are Members prior to such event to a Person who
is not an Affiliate of any Member or (ii) the merger or consolidation of the
Company with any other Person that is not an Affiliate of the Company and as a
result of which the majority of the outstanding equity interests of the
surviving Person are not owned by one or more of the same owners as the owners
of the Aggregate Series A Units in the Company prior to such merger or
consolidation, and in each of cases (i) and (ii) immediately preceding, results
in the Quintana-Related Entities owning in the aggregate less than 10% of the
Series A Units of the Company owned by the Quintana-Related Entities prior to
such event;
A-1
(b) at
any time after a Qualified Public Offering, any “person” (as such term is used
in Section 13(d) and 14(d) of the Exchange Act) (other than (i) a trustee or
other fiduciary holding securities under an employee benefit plan of the IPO
Corporation or any affiliate thereof, (ii) the Quintana-Related Entities or
(iii) any entity owned, directly or indirectly, by the Members of the Company in
substantially the same proportions as their ownership of Units of the Company)
acquires (other than any acquisition directly from the IPO Corporation and any
acquisition by the IPO Corporation) “beneficial ownership” (within the meaning
of Rule 13d-3 under the Exchange Act) of securities of the IPO Corporation
representing 50% or more of the combined voting power of the IPO Corporation’s
then outstanding securities; provided, however, that if
the IPO Corporation engages in a merger or consolidation in which the IPO
Corporation or the surviving entity in such merger or consolidation becomes a
subsidiary of another entity, then references to the IPO Corporation’s then
outstanding securities shall be deemed to refer to the outstanding securities of
such parent entity;
(c) at
any time after a Qualified Public Offering, the consummation of a merger or
consolidation of the IPO Corporation with any other Person, other than a merger
or consolidation which would result in the voting securities of the IPO
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity (or if the surviving entity is or shall become a subsidiary
of another entity, then such parent entity)) more than 50% of the combined
voting power of the voting securities of the IPO Corporation (or such surviving
entity or parent entity, as the case may be) outstanding immediately after such
merger or consolidation; or
(d) a
Liquidation Event.
“Competing
Business” is defined in Section
11(a).
“Confidential
Information” is defined in Section
9(a).
“Disability”
is defined in the Employment Agreement.
“Disability”
shall mean either (i) the Principal’s inability to perform, even with reasonable
accommodation, on a full-time basis the employment duties and responsibilities
assigned to the Principal due to accident, physical or mental illness, or other
circumstance; provided,
however, that such inability continues for a period exceeding ninety (90)
consecutive days during any one hundred and eighty (180) consecutive calendar
days or one hundred and twenty (120) calendar days in any twelve (12) month
period, or (ii) the Principal is determined to be totally disabled by the Social
Security Administration. The Principal must submit to a reasonable
number of examinations, to be paid for by the Company, by the physician making
the determination regarding disability, and the Principal hereby authorizes the
disclosure and release to the Company of such determination and all supporting
medical records. If the Principal is not legally competent, the
Principal’s legal guardian or duly authorized attorney-in-fact will act in
Principal’s stead, for the purposes of submitting the Principal to the
examinations, and for the purpose of providing the authorization of
disclosure.
“Fair Market
Value” is defined in the LLC Agreement.
“Good
Reason” is defined in the Employment Agreement.
A-2
“Good Reason”
shall mean the occurrence of any one or more of the following without the
written consent of the Principal: (i) the assignment to the Principal by the
Board of employment responsibilities that, when taken as a whole, are materially
inconsistent with a senior management position with the Company, (ii) the
Company requiring a change of the location for performance of the employment
responsibilities of the Principal greater than one hundred (100) miles away from
such location as of the Effective Date (not including ordinary periodic travel
during the regular course of employment) or (iii) the Company’s failure to pay
the Principal’s base salary in the absence of Cause.
“Intellectual
Property” is defined in Section
9(a).
“Internal
Restructure”
means any re-formation, conversion, transfer of assets, transfer by Members of
their Units, merger, incorporation, liquidation or other transaction undertaken
in a manner that results in the Members or their Affiliates continuing to have
substantially the same direct or indirect ownership of the Company’s assets in
place prior to the Internal Restructure, and preserves (a) the relative economic
interests of the Members or their Affiliates in the Company or any entity
(including an entity organized under the laws of a foreign jurisdiction) that
succeeds to the Company in such transaction and (b) the limited liability of the
Members to the substantially same extent afforded by the Act.
“LLC
Agreement” is defined in the recitals.
“Law” is
defined in the LLC Agreement.
“Liquidation
Event” is
defined in the LLC Agreement.
“Member(s)”
is defined in the LLC Agreement.
“Person” is
defined in the LLC Agreement.
“Prohibited
Period” is defined in Section
11(a).
“Purchase
Notice” is
defined in Section
6(b).
“Purchase Notice
Date” is defined in Section
6(b).
“Purchase
Price” is
defined in Section
6(a).
“Qualified
Public
Offering”
is defined in the LLC Agreement.
“Quintana-Related
Entity” is defined in the LLC Agreement.
“Related
Parties”
means the Company and each of its Subsidiaries.
“Restricted
Area” is defined in Section
11(a).
“Sale of the
Business” is defined in the LLC Agreement.
“Series B
Units” are
defined in the LLC Agreement.
“Series B-1
Units” are defined in Section 1.
A-3
“Subject
Units” are
defined in Section
6(b).
“Subsidiaries”
is defined in the LLC Agreement.
“Threshold
Value” is
defined in the LLC Agreement.
“Trigger
Date” is
defined in Section
5(d).
“Units” is
defined in the LLC Agreement.
“Unvested
Units” are
defined in Section
3.
“Vested
Units” are
defined in Section
4(a).
A-4
EXHIBIT
B
SECTION
83(B) ELECTION FORM
[See
Attached]
SECTION
83(B) ELECTION FORM
Election
to Include in
Taxable
Income in Year of Transfer Pursuant
to
Section 83(b) of the Internal Revenue Code
The
undersigned is receiving an award of restricted membership units of a Delaware
limited liability company which is being treated as a partnership for federal
income tax purposes. All parties to the transaction believe the award
of restricted membership units to be a “profits interest” within the meaning of
Internal Revenue Service Revenue Procedure 93-27. Notwithstanding the
foregoing, in the event that (i) the award of restricted membership units
constitutes a “capital interest” rather than a “profits interest” or (ii) the
undersigned disposes of such restricted membership units within two years
following receipt thereof, the undersigned hereby makes an election pursuant to
Section 83(b) of the Internal Revenue Code with respect to the property
described below and supplies the following information in accordance with the
regulations promulgated thereunder:
|
1.
|
The
name, address and taxpayer identification number of the undersigned
are:
|
|
Name:
|
||
|
Address:
|
||
|
Taxpayer
Identification Number:
|
|
2.
|
Description
of the property with respect to which the election is being
made:
|
Series
B-1 Units of Genesis Energy, LLC (the “Company”).
|
3.
|
The
date on which the property was transferred is February ___,
2010.
|
The
taxable year to which this election relates is calendar year 2010.
|
4.
|
Nature
of the restrictions to which the property is
subject:
|
The _____
Series B-1 Units issued to the taxpayer vest over time and are subject to
forfeiture in the event certain employment conditions are not
satisfied.
|
5.
|
The
fair market value at the time of transfer (determined without regard to
any restriction other than a restriction which by its terms will never
lapse) of the property with respect to which this election is being made
is $0.
|
|
6.
|
The
amount paid by the taxpayer for said property is
$0.
|
|
7.
|
A
copy of this statement has been furnished to the Company as provided in
Treasury Regulation Section
1.83-2(d).
|
Date: February
___, 2010
|
Printed
Name:
|
B-1