Exhibit 10.1
EMPLOYMENT AND RETIREMENT
AGREEMENT
THIS EMPLOYMENT AND RETIREMENT
AGREEMENT (this “Agreement”) is effective as of the
28th day of November, 2008, by and between K-SEA TRANSPORTATION,
INC. a Delaware corporation (the “Company”), and John
Nicola (“Executive”).
1.
Employment of
Executive : In consideration of
the mutual covenants and agreements herein contained, including
Executive’s agreement to sign a release of claims as provided
in Section 16, the Company and Executive wish to establish an
Employment and Retirement Agreement retaining Executive’s
services as described herein and otherwise fixing Executive’s
benefits, base salary and incentive compensation related to such
employment. Unless otherwise specifically provided herein,
the benefits below shall be in full satisfaction of the
Company’s obligations under the terms of the Employment
Agreement effective as of January 14, 2004, between the
Company and Executive, and all applicable cash or equity incentive
compensation plans and agreements under which Executive has any
rights or benefits.
2.
Definitions
:
“Affiliates” means with
respect to any Person, any other Person that directly or indirectly
through one or more intermediaries Controls, is Controlled by or is
under common Control with, the Person in question.
“Annual Performance
Bonus” means Executive’s annual incentive bonus as
determined by the Committee in its discretion, including both a
cash component and a grant of Phantom Units under the
LTIP.
“Cause” means
(i) Executive’s plea of nolo contendere or conviction of
Executive by a court of competent jurisdiction of any felony or a
crime involving moral turpitude; (ii) after repeated notices
and warnings, Executive’s failure to perform his reasonably
assigned duties as reasonably determined by the supervising
officer; (iii) Executive’s material breach of any of the
terms or conditions of this Agreement; (iv) Executive’s
commission of any dishonest, unethical or fraudulent act which
materially damages the reputation of the Company or any of its
Affiliates; or (v) any fraud or intentional misconduct by
Executive that is a significant contributing factor to the
restatement by the Company or any of its Affiliates of all or a
portion of any financial statement.
“Code” means the
Internal Revenue Code of 1986, as amended.
“Committee” means the
compensation committee of the Board of Directors of K-Sea General
Partner GP LLC, a Delaware limited liability company and the
general partner of the general partner of the
Partnership.
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“Competing Business”
means any business or other enterprise which engages in the marine
transportation business or otherwise competes with the
Company.
“Control” means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or
otherwise.
“Disability” means any
physical or mental ailment or incapacity as determined by a
licensed physician agreed to by the Company and Executive (or, in
the event that Executive and the Company cannot so agree, by a
licensed physician agreed upon by a physician selected by Executive
and a physician selected by the Company), which prevents Executive
from performing his duties hereunder which has continued for a
period of either (i) 90 consecutive days in any 12-month
period or (ii) 180 total days in any 12-month period, either
of which can reasonably be expected to be of permanent
duration.
“Effective Date” means
November 28, 2008.
“LTIP” means the K-Sea
Transportation Partners L.P. Long-Term Incentive Plan.
“Partnership” means
K-Sea Transportation Partners L.P., a Delaware limited
partnership.
“Person” means an
individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization,
association, firm, governmental agency or political subdivision
thereof or other entity.
“Phantom Unit” shall
have the meaning set forth in the LTIP.
“Protected Employee”
means any current or former employee of the Company during the
period in which the covenants set forth in Section 6 are in
effect, but excluding Persons who have not been employed by the
Company during the eighteen-month period preceding the date on
which a determination is made regarding whether a Person is a
Protected Employee.
“Term” means the period
beginning with the Effective Date and ending with November 28,
2010.
3.
Term and
Extent of Services; Retirement : During the Term
Executive shall be employed as Special Advisor to the
President. During the Term, Executive agrees to be retained
as a part-time employee, to devote his time to the business of the
Company, as requested, and to perform to the best of his ability
and with reasonable diligence the duties and responsibilities
assigned to him by the appropriate management of the Company.
The Company and Executive anticipate that, during the Term,
Executive will perform at least 40% of his average level of
services over the 36-month period preceding the Effective
Date. At the expiration of the Term, Executive agrees to
voluntarily retire and terminate his employment with the Company
and all Affiliates.
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4.
Compensation
and Benefits :
(a)
Salary
: For the
first year of the Term, Executive’s annual base salary shall
be $105,000, and for the second year of the Term, his annual base
salary shall be $75,000. Executive’s base salary shall
be payable in accordance with the Company’s normal payroll
practices.
(b)
Benefits
: During the
Term, Executive shall be eligible to participate in the
Company’s benefit plans on a basis comparable to that of
other employees.
(c)
Incentive
Plans : During the portion of
the Term that includes the Company’s 2009 fiscal year end,
Executive shall be eligible for an Annual Performance Bonus.
For the remainder of the Term, Executive shall not participate in
new grants under the LTIP or be eligible for the Annual Performance
Bonus.
Notwithstanding anything in the
Employee Phantom Unit Award Agreement under the LTIP or any other
similar award agreement to the contrary, all unvested Phantom Units
(other than the Phantom Units, if any, that may be awarded in
October 2009 as part of Executive’s Annual Performance
Bonus) shall vest and all restrictions shall lapse according to the
following schedule, and the relevant award agreements are hereby
amended accordingly:
(i)
The 3,100 Phantom
Units that are scheduled to vest in October 2009 shall
continue to vest in October 2009; and
(ii)
The 4,980 Phantom
Units that are scheduled to vest in October 2010 and
thereafter shall vest on the last day of the Term.
(d)
Automobile
:
As of the Effective Date, the
Company shall transfer to Executive all rights, title and interest
in the Company automobile which he is entitled to use immediately
prior to the Effective Date. Following the Effective Date,
Executive shall be responsible for all costs associated with such
automobile, including maintenance, insurance and operating
expenses.
(e)
COBRA
Coverage : During the first 18
months after the date of Executive’s termination of
employment at the end of the Term pursuant to Section 3 (or,
if shorter, during the period in which Executive is eligible to
elect and does elect COBRA continuation coverage under the group
health plans of the Company), the Company shall pay directly or
reimburse Executive for the COBRA cost of continued coverage under
the group health plans of the Company pursuant to
Section 4980B of the Code.
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5.
Termination of
Employment : Should
Executive’s employment terminate prior to the end of the
Term, the following provisions of this Section 5 shall govern
the rights of Executive under this Agreement:
(a)
Termination
without Cause or Due to Death or Disability : In the event
Executive’s employment terminates during the Term (i) by
the Company without Cause, and (ii) as a result of
Executive’s death or Disability, Executive, or his
beneficiary or beneficiaries if applicable, shall receive, subject
to the execution of a waiver and release of claims in favor of the
Company and all Affiliates;
(i)
his base salary
through the date of the termination of his employment;
(ii)
other benefits
for which he is eligible in accordance with applicable plans or
programs of the Company;
(iii)
accelerated
payment of all base salary he would have been entitled to receive
for the remainder of the Term, payable in a lump sum on the date 30
days following termination of employment;
(iv)
during the first
18 months after the date of termination of employment (or, if
shorter, during the period in which Executive is eligible to elect
and does elect COBRA continuation coverage under the group health
plans of the Company), the Company shall pay directly or reimburse
Executive for the COBRA cost of continued coverage under the group
health plans of the Company pursuant to Section 4980B of the
Code; and
(v)
all unvested
Phantom Units shall immediately vest and all restrictions thereon
shall lapse.
(b)
Termination by
the Company for Cause : In the event the Company
terminates Executive’s employment during the Term for Cause,
Executive shall only be entitled to:
(i)
his base salary
through the date of the termination of his employment;
and
(ii)
any other amounts
earned, accrued or owing as of the date of termination of
employment under the applicable employee benefit plans or programs
of the Company.
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6.
Confidentiality, Return of
Property, and Covenant Not to Compete :
(a)
Term Of
Restrictive Covenants . The term of the
restrictive covenants in this Section 6 (the
“Non-Compete Term”) shall commence on the date hereof
and shall terminate eighteen months after the date of termination
of Executive. For purposes of this Section 6, references
to Company shall include all Affiliates of the Company and the
covenants contained in this Section 6 shall be enforceable
against Executive by each such Affiliate as third party
beneficiaries.
(b)
Non-Competition
. During
the Non-Compete Term, Executive shall not, unless acting as an
officer or employee of, or consultant to, the Company directly or
indirectly, (i) own, manage, operate, join, control or
participate in the ownership, management, operation or control of,
or be connected as an officer, director, employee, stockholder,
partner, advisor, consultant or otherwise with, or provide any
financing or lease any assets to, any entity that engages in or
intends to engage in any Competing Business, or (ii) solicit,
employ, retain as a consultant, interfere with or attempt to entice
away from the Company, any Protected Employee, or
(iii) solicit, interfere with or attempt to entice away from
the Company, any Person which has been or is during the
eighteen-month period preceding the date on which a determination
is made a customer of the Company or any of its subsidiaries.
Ownership of not more than 2% of the outstanding stock of any
publicly traded company shall not be a violation of this
Section 6 so long as Executive does not participate in the
management of such company.
(c)
Confidentiality
. From and
after the commencement of the Term, Executive agrees not to
divulge, communicate, use to the detriment of the Company, for
Executive’s benefit or the benefit of any other Person, or
misuse in any way, in whole or in part, any proprietary or
confidential information or trade secrets related to the Company as
it may exist from time to time, including, without limitation, the
Company’s trade secrets or other intellectual property
rights, personnel information, know-how, customer lists, or other
confidential or proprietary data. Executive acknowledges that
the list of the Company’s customers as it may exist from time
to time, and the Company’s proprietary or confidential
information, and trade secrets, are valuable, special and unique
assets of the Company. Executive acknowledges and agrees that
any information or data he has acquired on any of these matters or
items was received in confidence. Executive agrees to hold,
as the property of the Company, all memoranda, books, papers,
letters and other data and all copies thereof or therefrom, made by
him or otherwise coming into his possession, and at any time to
deliver the same to the Company upon their demand.
(d)
Reasonable
Limitations . Executive
acknowledges that given the nature of Executive’s employment
with the Company and of the Company’s business the covenants
contained in this Section 6 contain reasonable limitations as
to time, geographical area and scope of activity to be restrained,
and do not impose a greater restraint than is necessary to protect
the legitimate business interests of the Company including, but not
limited to, the protection of confidential information. In
the event that the covenants contained in this Section 6 shall
be determined by any court of competent jurisdiction to be
unenforceable by reason of their extending for too long a period of
time or over too large a geographical area or by reason of their
being too extensive in any
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other respect, they shall be
interpre
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