Exhibit 10.1 EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”)
is made effective as of December 31, 2008 (the “Effective
Date”) by and between Genesis Energy, LLC (the
“Company”), or any successor entity to the Company, and
Grant E. Sims (“Executive”).
PRELIMINARY STATEMENTS
A.
The Company, which is the general partner of Genesis Energy,
L.P., a Delaware limited partnership (the
“Partnership”), desires to employ Executive as its
Chief Executive Officer, and Executive desires to be employed by
the Company in said capacity;
B.
Each party desires to set forth in writing the terms and conditions
of their understandings and agreements; and
C.
Unless otherwise defined, capitalized terms used in this Agreement
have the meanings specified in Section 22 below.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, the sufficiency of which is hereby
acknowledged by the parties, the Company hereby agrees to employ
Executive and Executive hereby accepts such employment upon the
terms and conditions set forth in this Agreement:
STATEMENT OF AGREEMENT
1.
Position.
(a) The
Company agrees to employ Executive in the position of its Chief
Executive Officer (“CEO”). Executive shall
serve as, and perform the duties of, CEO.
(b) Executive
agrees to serve as CEO and agrees that he will devote his best
efforts and full time and attention to all facets of the business
of the Company and will diligently carry out the duties of
CEO. Nothing in this Section 1(b) or this Agreement,
however, will prevent Executive from engaging in additional
activities in connection with personal investments, civic or
community affairs, or other activities that do not interfere with
the performance of Executive’s duties under this
Agreement.
(c) Executive
shall be vested with all authority specifically granted by the
Board of Directors of the Company (“Board”).
(d) Executive
agrees to reasonable travel as necessary to perform his duties
under this Agreement.
2.
Term. The Term (herein so called) of this Agreement
shall be four (4) years from the Effective Date, unless sooner
terminated pursuant to Section 4 below. If not sooner
terminated, this Agreement shall automatically terminate upon the
expiration the Term. Executive’s employment shall
be in accordance with and governed by this Agreement, unless
modified by the parties to this Agreement in writing.
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3.
Compensation and Benefits.
(a)
Base Salary. The Company shall pay Executive a
base salary at the rate of $340,000 per year, subject to adjustment
as provided below, which shall be pro rated and payable as provided
herein (“Base Salary”). The per annum rate
of Executive’s Base Salary shall be increased by the amounts
set forth below as of the first day of the next full month
occurring after achievement, if any, of the specified levels of
Average Market Capitalization:
(i) $30,000
if Average Market Capitalization of $1.0 billion is achieved for
any 90-consecutive calendar day period; and
(ii) an
additional amount equal to 10% of the then-effective Base Salary
each time an additional $300 million of Average Market
Capitalization above $1.0 billion is achieved (for example, $1.3
billion, $1.6 billion, etc.) for any 90-consecutive calendar day
period.
(b) Bonus
Opportunities. In addition to the Base Salary, Executive
shall also be eligible to receive bonuses from time to time based
on exceptional service and/or the performance of the Company, if
awarded by the Board in its sole discretion (“Discretionary
Bonus”). Any such Discretionary Bonus will be paid
in accordance with the terms of such award.
(c) Payment. Payment
of all compensation to Executive hereunder shall be made in
accordance with the terms of this Agreement and applicable Company
policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable withholdings and
taxes.
(d) Benefits
Generally. The Company shall make available to
Executive, throughout the Term of this Agreement, benefits as are
generally provided by the Company to its executive officers,
including but not limited to any group life, health, dental,
vision, disability or accident insurance, pension plan, profit
sharing plan, retirement savings plan, 401(k) plan, or other such
benefit plan or policy which may presently be in effect or which
may hereafter be adopted by the Company for its executive officers
and key management personnel, and also including any rights and
benefits under the directors’ and officers’ liability
insurance then in place under the Company insurance program for the
directors and officers of the Company; provided, however, that
Executive is not eligible to participate in any of the
“Genesis Energy, Inc. Bonus Plan” or the “Genesis
Energy Inc. Stock Appreciation Rights Plan” (both effective
December 31, 2003), or any successor equity plan or plans of the
Company, or the “Genesis Energy Amended and Restated
Severance and Protection Plan.”
(e) Vacation. Executive
shall be entitled to paid vacation during each calendar year,
consistent with any written policies of the Company then applicable
to executive officers generally, but in no event fewer than four
(4) weeks. Unused vacation days and holidays shall be
carried over from year to year, if at all, in accordance with the
written policies then in effect for executive officers of the
Company generally.
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(f)
Holidays. Executive shall further be entitled to paid
holidays, personal days, and sick days consistent with the written
policies then applicable to executive officers.
(g) Reimbursement
of Expenses. The Company shall reimburse Executive for
all business expenses incurred by Executive while performing his
duties under this Agreement, which shall include dues in
professional societies and organizations. The amount of
any expense reimbursement provided during one taxable year of the
Executive shall not affect the amount of the reimbursement provided
in any other taxable year.
(h) Employment
Taxes and Withholding. The Company acknowledges that,
upon Executive’s acquisition of an Individual Class B
Interest (as that term is defined in the LLC Agreement) in the
Company, for income and employment tax purposes, insofar as
Executive receives Base Salary, Discretionary Bonus and benefits
pursuant to this Article 3, he will be treated as a self-employed
partner receiving guaranteed payments. The Company shall
make a quarterly tax equalization payments to reimburse Executive
for any federal, state and local income, self employment or other
taxes incurred by Executive on Base Salary, Discretionary Bonus and
benefits paid or provided to Executive by Company pursuant to this
Article 3 (but not amounts which Executive receives pursuant to the
LLC Agreement by virtue of owning an Individual Class B Interest),
to the extent of the difference in the tax burden imposed on
Executive as a result of his status as a member of the Company in
comparison to the tax treatment that would be available to
Executive if he was characterized as a common law employee for tax
purposes. If the Company adopts any additional policies
intended to address tax treatment associated with the
self-employment status of members of the Company, Executive shall
be eligible for any such benefits on the same basis as all other
similarly situated executives of the Company. To the
extent Executive is not required to be treated as a self-employed
partner, any amounts payable pursuant to this Agreement shall be
subject to applicable tax withholding requirements.
4.
Termination. This Agreement may be terminated by the
Company or Executive, or may automatically terminate, as provided
in this Article 4.
(a) Termination
by the Company without Cause or for Cause. The Company
may terminate this Agreement at any time either without Cause or
for Cause. “Cause” means any of the
following:
(i)
Executive’s commission of willful fraud against, or willful
theft of any assets or property of, the Company, the Partnership or
their respective Affiliates, suppliers or customers;
(ii)
Executive’s conviction (or plea of nolo contendere) for
any felony or any crime which involves moral turpitude;
(iii) Executive’s
material violation of the non-disclosure or confidentiality
provisions of this Agreement; Executive’s substantial
non-performance of his duties and obligations, whether pursuant to
this Agreement or otherwise (other than due to death or
disability); Executive’s gross negligence; or
Executive’s willful misconduct in performing his duties;
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(iv) Executive
willfully engaging in conduct that is demonstrably and materially
injurious, monetarily or otherwise, to the Company, the
Partnership, or their respective Affiliates; or
(v)
Executive’s willful violation of material written
rules, regulations or policies of the Company or the Partnership,
or failure to follow reasonable written instructions or directions
both from a majority of the Company’s Audit Committee (the
“Audit Committee”) and from the Company’s Class A
Member (the “Class A Member”) to Executive that
Executive’s failure to follow such instructions or directions
could reasonably be expected to be materially injurious, monetarily
or otherwise, to the Company or the Partnership, or their
respective Affiliates.
Termination of this Agreement by the Company without Cause or for
Cause may be effected only by written notice thereof from the
Company to Executive (“Termination Notice”), which in
the case of termination for Cause both identifies in sufficient
detail the reasons therefor and is recommended both by a majority
of the Audit Committee and by the Class A
Member. Termination without Cause and termination
pursuant to clauses (i) or (ii) above will be effective on the date
that the Termination Notice is deemed given and
received. Termination pursuant to clauses (iii), (iv)
and (v) above shall only become effective thirty (30) days after
Termination Notice is deemed given and received and
Executive’s failure (within thirty (30) days of the date that
Termination Notice is deemed given and received) to cure the
reasons for such termination for Cause or to cease the conduct
constituting the basis of such termination for Cause; provided
further, that prior to such termination for Cause under clauses
(iii), (iv) and (v) above becoming effective, the Company shall
provide an opportunity for Executive to be heard by the Audit
Committee. No act, nor failure to act, on
Executive’s part, shall be considered “willful”
unless he has acted or failed to act with an absence of good faith
and without a reasonable belief that his action or failure to act
was in the best interest of the Company and/or the Partnership.
(b) Termination
by Executive without Good Reason or for Good
Reason. Executive may terminate this Agreement at any
time either without Good Reason or for Good
Reason. “Good Reason” means any of the
following:
(i)
The material diminution of Executive’s duties and
responsibilities (including no longer serving as a Director of the
Company), a material reduction of his base salary, or a material
reduction of his benefits, other than as a result of termination
for Cause, without Good Reason or by virtue of his death or
disability;
(ii)
The relocation of the Company’s principal executive offices
outside the metropolitan Houston, Texas area without
Executive’s consent;
(iii) The
Company requiring that Executive be based anywhere other than the
Company’s principal executive offices without
Executive’s consent;
(iv) The
Company’s failure to make any material payment to Executive
required to be made under the terms of this Agreement;
(v) The
Company’s non-performance of any material provision (other
than those described in (iv) above) of this Agreement, or
non-performance of Denbury (or its Affiliates or any of their
successors or assigns) of any material provision of any Transaction
Document (italicized terms in this subsection 4(b) and its
subsections are defined as provided in the LLC Agreement), in each
such case; or
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(vi) Any
action by the Company, Denbury or its Affiliates or any of their
successors or assigns, the Class A Member or its Affiliates or any
of their successors or assigns, the Board, the general partner of
the Partnership (if it is not the Company), or the Partnership or
any of its successors or assigns that either (i) amends, alters,
changes, repeals or replaces the IDRs or the Class B Ownership
Interests in a manner that in any material way adversely affects
the Distributions or Redemption Amount payable to Executive, or
(ii) except as required by a change in the law or a final, binding
and non-appealable judgment, or except to the extent the IRS or any
other federal tax authority has asserted a claim to the contrary
and the Person taking a tax reporting position reasonably and in
good faith believes that such authority is more likely than not to
be successful in adjudicating such claim, takes a federal tax
reporting position inconsistent with that specified in Section
7.10(b) of the LLC Agreement that materially and adversely affects
the Executive, provided that the following actions shall not
constitute Good Reason:
(a) any
action that will result in Executive receiving his Redemption
Amount (or having an election to receive his Redemption Amount
under the provisions of Section 5.05(c) of the LLC Agreement);
(b) a
waiver by the Company of receipt from the Partnership of an
Incentive Distribution for any period(s) as contemplated by Section
3.02(c)(5) of the LLC Agreement;
(c) any
Conversion Event; or
(d) any
amendment to the LLC Agreement permitted by Section 5.05(b) of the
LLC Agreement.
Termination of this Agreement by Executive without Good Reason or
for Good Reason may be effected by Executive only by his providing
written notice thereof, which in the case of termination for Good
Reason is given within 90 days of the initial existence of and
identifies in sufficient detail the reasons therefor, to both the
Audit Committee and the Class A Member. Termination
without Good Reason will be effective thirty (30) days after such
notice is deemed given and received. Termination for
Good Reason shall only become effective thirty (30) days after such
notice is deemed given and received and the failure by the Company
or Denbury (or its Affiliates) to cure the reasons therefor.
(c) Disability. If
the Board determines that the Company should do so, the Company may
terminate this Agreement at any time that Executive has sustained a
“disability.” Such termination will be
effective on the date that written notice thereof is deemed given
and received. For purposes of this Agreement, Executive
will have sustained a “disability” if (i) Executive has
been absent from his duties with the Company on a full-time basis
for 180 out of any 220 consecutive calendar days as a result of
incapacity due to mental or physical illness or injury which is
determined to be total and permanent by a physician selected by the
Company or its insurers and reasonably acceptable to the Executive
or his legal representatives, or (ii) Executive is determined to be
totally disabled by the Social Security
Administration. Executive must submit to a reasonable
number of examinations, to be paid for by the Company, by the
physician making the determination regarding disability under this
Section 4(c), and Executive hereby authorizes the disclosure and
release to the Company of such determination and all supporting
medical records. If Executive is not legally competent,
Executive’s legal guardian or duly authorized
attorney-in-fact will act in Executive’s stead under this
Section 4(c), for the purposes of submitting Executive to the
examinations, and for the purpose of providing the authorization of
disclosure, required under this Section 4(c).
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(d) Death. This
Agreement will terminate automatically effective upon
Executive’s death.
(e) Benefits
Continuation. The Company will continue to pay for the
continued coverage of the Executive and any of his family members
covered on the date that termination of this Agreement is effective
(“Covered Dependents”) under the health and medical
benefit plans of the Company, including, among others, prescription
drug, dental and vision coverage, as applicable (the “Medical
Plan”), for the period commencing on the date of
Executive’s “separation from service” as defined
in Code Section 409A and Treasury Regulations Section 1.409A-1(h)
(the “Service Separation Date”) and ending on the
earlier of the date Executive becomes eligible for substantially
similar coverage under the health and medical benefit plans of
another employer, or eighteen (18) months after the Service
Separation Date (the “Continuation Period”), at the
same level of Company contribution applicable to similarly situated
active employees of the Company during such period. In
addition, it is agreed that this continued health and medical
coverage is provided in conjunction with and not in addition to,
and will be, the continued coverage in accordance with Code Section
4980B, commonly referred to as “COBRA coverage.”
Notwithstanding anything in this Agreement to the contrary, at such
time (if ever) during the Continuation Period as it becomes
administratively impracticable for the Company to provide Executive
and/or his Covered Dependents with full coverage under the Medical
Plan, during the remainder of the Continuation Period the Company
shall pay on Executive’s behalf the costs of any similar
individual health and medical coverage providing comparable
benefits for Executive and/or such Covered Dependents, up to a
maximum of the applicable premiums which would have been paid by
the Company during the remainder of the Continuation Period with
respect to the lost coverage portion of the Medical Plan, such
payment to be made upon Executive’s submission of proof of
his prior payment of the premiums for such coverage.
(f)
Life Insurance. Upon termination of this Agreement
for any reason other than death, Company shall immediately, and
without imposition of any charge, fee or cost of any sort other
than proper reporting of any income tax consequence, transfer
ownership of all policies of insurance on the life of Executive
owned by the Company, if any, to Executive free and clear of all
claims, liens and encumbrances whatsoever.
(g) Employment. Upon
termination of this Agreement for any reason, including expiration
of the Term or a termination for a reason specified in this Section
4, Executive’s employment shall also terminate and cease, and
if he is a member thereof Executive shall be deemed to have
voluntarily resigned from the Board.
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(h) &nb
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