Exhibit 10.7
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
AGREEMENT by and between PRO GP CORP. (“BECLP
GP”), BREITBURN MANAGEMENT COMPANY, LLC (“Manageco),
BreitBurn GP, LLC (the “MLP GP”), and HALBERT WASHBURN
(the “Executive”), dated as of October 10, 2006 (the
“Agreement”).
WHEREAS , the Executive currently is an employee of
BreitBurn Energy Company L.P. (the
“Partnership”);
WHEREAS , certain assets of the Partnership will be
contributed to BreitBurn Energy Partners L.P. (the
“MLP”) and the employees of the Partnership, including
the Executive, will be transferred to Manageco, all effective upon
the date of completion of the initial public offering of common
units of the MLP (the “IPO Date”); and
WHEREAS , in conjunction with the foregoing, the parties
wish to amend and restate that certain Employment Agreement between
the Executive and the Partnership dated June 15, 2004 (the
“Prior Agreement”) to provide for the employment of the
Executive in the capacities and on the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, IT IS HEREBY
AGREED AS FOLLOWS:
1.
Definitions . All capitalized terms not defined herein shall
have the meanings set forth in Appendix A hereto.
2.
Employment Period . The Employer hereby agrees to employ the
Executive, and the Executive hereby agrees to remain in the employ
of the Employer, subject to the terms and conditions of this
Agreement during the period (the “Employment Period”)
beginning on the date of this Agreement and ending on December 31,
2008; provided, however, that commencing on December 31, 2008 (and
each December 31 thereafter), the term of this Agreement shall
automatically be extended for one (1) additional year, unless at
least ninety (90) days prior to such date, the Employer or the
Executive gives written notice to the other party that it or he, as
the case may be, does not wish to so extend the term of this
Agreement.
3.
Terms of Employment .
(a)
Position and Duties .
(i)
During the Employment Period, (A) the Executive shall serve as
Co-Chief Executive Officer of the Employer, with the usual and
customary duties of such office, and shall report to the Board or a
nominee designated by the Board, (B) except as limited by
applicable law or the Partnership Agreement, and subject to the
direction of the Board or its nominee, the Executive shall have
full authority, together with the Employer’s other Co-Chief
Executive Officer, to operate the day to day business affairs of
the Employer and (C) the Executive shall be appointed to and serve
as a member of the Board.
(ii)
During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive
agrees to
devote such attention and time
during normal business hours to the business and affairs of the
Employer as necessary to perform his duties under the
Agreement. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) carry on other
non-competitive business ventures with the consent of the Board or
its nominee (not to be unreasonably withheld), (B) serve on the
boards or committees of such ventures or trade associations or
civic or charitable organizations, provided, however, the Executive
may not serve at the same time on more than two boards or
committees of “for profit” entities unless requested to
do so by the Employer, which request shall be subject to the prior
approval of the Board, (C) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (D) manage
personal investments, so long as such activities do not
significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Employer
in accordance with this Agreement.
(iii)
The Executive’s services shall be performed at the
headquarters of the Employer, and such location shall be in the
Greater Los Angeles metropolitan area.
(b)
Compensation .
(i)
Base Salary . During the Employment Period, the Executive
shall receive a base salary (the “Base Salary”) at an
annual rate of $275,000, as the same may be increased thereafter in
the discretion of the Board. The Base Salary shall be paid at such
intervals as the Employer pays executive salaries generally. During
the Employment Period, the Base Salary shall be reviewed by the
Board annually for possible increase. Any increase in the Base
Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. The Base Salary shall not be
reduced after any such increase, and the term Base Salary as
utilized in this Agreement shall refer to the Base Salary as so
increased.
(ii)
Annual Bonus . In addition to the Base Salary, the Executive
shall be eligible to earn, for each fiscal year of the Employer
ending during the Employment Period, an annual cash bonus of up to
one hundred percent (100%) of the Base Salary based upon
performance parameters as approved by the Board based upon the
Employer’s Short Term Incentive Plan (the “Annual
Bonus”).
(iii)
Phantom Options . Effective as of the first (1st) day of
each fiscal year of the Employer during the Employment Period, the
Executive shall be granted a Phantom Option (the “Phantom
Option”) on the terms and conditions set forth in Appendix B
hereto.
(iv)
Benefit Plans and Policies . During the Employment Period,
the Executive and/or the Executive’s eligible dependents, as
the case may be, shall be entitled to participate in and shall
receive all benefits, at levels suitable for executives, under the
Employer’s savings and retirement plans and policies, welfare
plans and policies and fringe benefit plans and policies (with
the
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automobile lease allowance not to
exceed one thousand dollars ($1000) per month), which plans and
policies shall be consistent with those maintained by the Employer
for similarly situated employees, but in no event shall be inferior
to the plans and policies maintained by the Employer as of the date
of this Agreement.
(v)
Expenses . During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive on behalf of or in furtherance
of the business of the Employer.
(vi)
Vacation . During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the
Employer’s vacation policy, but in no event less than five
(5) weeks per year.
4.
Termination of Employment .
(a)
Death or Disability . The Executive’s employment shall
terminate automatically upon the Executive’s death during the
Employment Period. If the Employer determines in good faith that
the Disability of the Executive has occurred during the Employment
Period, it may give to the Executive written notice in accordance
with Section 11(b) hereof of its intention to terminate the
Executive’s employment. In such event, the Executive’s
employment with the Employer shall terminate effective on the
thirtieth (30th) day after receipt of such notice by the Executive
(the “Disability Effective Date”); provided, that
within thirty (30) days after such receipt, the Executive shall not
have returned to full-time performance of the Executive’s
duties.
(b)
Cause . The Employer may terminate the Executive’s
employment during the Employment Period for Cause or without
Cause.
(c)
Good Reason . The Executive’s employment may be
terminated by the Executive during the Employment Period for Good
Reason or without Good Reason.
(d)
Notice of Termination . Any termination by the Employer or
the Executive shall be communicated by a Notice of Termination to
the other parties hereto given in accordance with Section 11(b)
hereof. The failure by the Executive or the Employer to set forth
in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Employer, respectively, hereunder
or preclude the Executive or the Employer, respectively, from
asserting such fact or circumstance in enforcing the
Executive’s or the Employer’s rights
hereunder.
5.
Obligations of the Employer upon Termination .
(a)
Good Reason; Other Than for Cause, Death or Disability . If,
during the Employment Period, the Employer shall terminate the
Executive’s employment without Cause (other than as a
consequence of death or Disability, which shall have the effects
set forth in Section 5(c) below), or the Executive shall terminate
employment for Good Reason:
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(i)
The Executive shall be paid, in a single lump sum payment within
thirty (30) days after the Date of Termination, the aggregate
amount of (A) the Executive’s earned but unpaid Base Salary
and accrued but unpaid vacation pay, if any, through the Date of
Termination, any Annual Bonus required to be paid to the Executive
pursuant to Section 3(b)(ii) hereof for any fiscal year that ends
on or before the Date of Termination and payment with respect to
Phantom Options required to be paid to the Executive pursuant to
Section 3(b)(iii) hereof for any fiscal year that ends on or before
the Date of Termination to the extent not previously paid (the
“Accrued Obligations”), plus (B) the present value
(using the prime rate of the Employer’s banker at such time)
of all employee benefits referred to in Section 3(b)(iv) hereof,
other than group medical, drug and dental benefits, as referred to
in Section 5(a)(ii) hereof (which would have been available to the
Executive for a period of twenty-four (24) months from the Date of
Termination), plus (C) two (2) times the sum of (X) the
Executive’s Base Salary as in effect immediately prior to the
Date of Termination and (Y) the average of his Annual Bonuses for
the two (2) years immediately preceding the Date of
Termination;
(ii)
For a period of two (2) years following the Date of Termination,
the Executive and/or the Executive’s eligible dependents
shall continue to be provided with medical, prescription and dental
benefits at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies
if the Executive’s employment had not been terminated.
Notwithstanding the foregoing, the Executive shall cease to receive
such medical, prescription and dental benefits on the date the
Executive is eligible to receive such benefits under another
employer-provided group plan. Such health benefits shall be
provided to the Executive in a manner that neither the coverage nor
the benefits are includible in the Executive’s taxable gross
income. If the Employer is unable to provide such coverage or
benefits to the Executive on that basis, then the Employer shall
pay the Executive such additional amounts as necessary to make the
Executive “whole” on a net after-tax basis for the
receipt of such coverage or benefits;
(iii)
The Executive’s Phantom Options shall vest as of the Date of
Termination and shall be payable as set forth in Appendix B hereto;
and
(iv)
To the extent not theretofore paid or provided, the Employer shall
timely pay or provide to the Executive any accrued benefits and
other amounts or benefits required to be paid or provided or which
the Executive is eligible to receive prior to the Date of
Termination under any plan, program, policy or practice or contract
or agreement of the Employer and its affiliates according to their
terms (such other amounts and benefits shall be hereinafter
referred to as the “Other Benefits”).
(b)
Cause; Other than for Good Reason . If the Executive’s
employment shall be terminated by the Employer for Cause or by the
Executive other than for Good Reason during the Employment Period,
the Employer shall pay to the Executive the Accrued
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Obligations in cash within thirty
(30) days after the Date of Termination and shall provide any Other
Benefits which have accrued during the Employment
Period.
(c)
Death or Disability . If the Executive’s employment is
terminated by reason of the Executive’s death or Disability
during the Employment Period:
(i)
The Accrued Obligations shall be paid to the Executive’s
estate or beneficiaries or to the Executive, as applicable, in cash
within thirty (30) days of the Date of Termination;
(ii)
At the time when annual bonuses are paid to other peer executives
of the Employer for the fiscal year in which the Date of
Termination occurs, the Executive’s estate or beneficiaries
or the Executive, as applicable, shall be paid an amount equal to
the product of (A) the amount of the Annual Bonus to which the
Executive would have been entitled, if the Executive’s
employment had not been terminated, and (B) a fraction, the
numerator of which shall be the number of days in such fiscal year
through the Date of Termination and the denominator of which shall
be 365, to the extent not theretofore paid;
(iii)
The Executive’s Phantom Options shall vest as of the Date of
Termination and shall be payable as set forth in Appendix B hereto;
and
(iv)
The Other Benefits shall be paid or provided to the
Executive’s estate or beneficiaries or to the Executive, as
applicable, on a timely basis; and
(v)
Through the remainder of the Employment Period, or such longer
period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Executive and/or the
Executive’s eligible dependents shall continue to be provided
with medical, prescription and dental benefits as if the
Executive’s employment had not been terminated. Such
health benefits shall be provided to the eligible dependents in a
manner that neither the coverage nor the benefits are includible in
the eligible dependent’s taxable gross income. If the
Employer is unable to provide such coverage or benefits to the
eligible dependent on that basis, then the Employer shall pay the
eligible dependent such additional amounts as necessary to make the
eligible dependent “whole” on a net after-tax basis for
the receipt of such coverage or benefits;
6.
Non-exclusivity of Rights . Nothing in this Agreement shall
prevent or limit the Executive’s continuing or future
participation in any plan, program, policy or practice provided by
the Employer (other than policies relating to severance payments or
obligations on termination of employment for any reason) and for
which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any
contract or agreement with the Employer. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of or any contract or
agreement with the Employer at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement.
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7.
Full Settlement . The Employer’s obligation to make
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or
action which the Employer may have against the Executive or others.
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, and, except as provided in Section 5(a)(ii) hereof,
such amounts shall not be reduced whether or not the Executive
obtains other employment.
8.
Executive’s Covenants .
(a)
The Executive shall hold in a fiduciary capacity for the benefit of
the Employer all secret or confidential information, knowledge or
data relating to the Employer, and its respective businesses, which
shall have been obtained by the Executive during the
Executive’s employment by the Employer and which shall not be
or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement).
After termination of the Executive’s employment with the
Employer, the Executive shall not, directly or indirectly, without
the prior written consent of the Employer or as may otherwise be
required by law or legal process, use for his own benefit such
information, knowledge or data, or communicate or divulge any such
information, knowledge or data to anyone other than the Employer
and those designated by it; provided, that if the Executive
receives actual notice that the Executive is or may be required by
law or legal process to communicate or divulge any such
information, knowledge or data, the Executive shall promptly so
notify the Employer.
(b)
While employed by the Employer and for a period of two (2) years
following the Date of Termination, regardless of the reason for the
termination, the Executive shall not, without the prior consent of
the Employer (which consent shall not be unreasonably withheld),
directly or indirectly (i) solicit, induce, or encourage any
employee of the Employer who is employed at any time within six (6)
months of the time of termination to terminate his or her
employment with the Employer or (ii) hire any such employee within
six (6) months after that employee’s termination of
employment with the Employer.
(c)
While employed by the Employer and for a period of two (2) years
following the Date of Termination, regardless of the reason for the
termination, the Executive shall not, without the prior consent of
the Employer, be employed by, provide consultative service to (with
or without pay), own, manage, operate, join, control, participate
in, or be connected with (as a stockholder, partner, or otherwise),
any business, individual, partner, firm, corporation, or other
entity that is a Competitor of the Employer; provided, however,
that the “beneficial ownership” by the Executive,
either individually or as a member of a “group,” as
such terms are used in Rule 13d of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended,
of not more than two percent (2%) of the voting stock of any
publicly held corporation shall not be a violation of this
Agreement.
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(d)
In no event shall an asserted violation of the provisions of this
Section 8 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
However, in recognition of the facts that irreparable injury will
result to the Employer in the event of a breach by the Executive of
his obligations under Sections 8(a), 8(b) and 8(c) above, that
monetary damages for such breach would not be readily calculable,
and that the Employer would not have an adequate remedy at law
therefor, the Executive acknowledges, consents and agrees that in
the event of such breach, or the threat thereof, the Employer shall
be entitled, in addition to any other legal remedies and damages
available, to specific performance thereof and to temporary and
permanent injunctive relief (without the necessity of posting a
bond) to restrain the violation or threatened violation of such
obligations by the Executive.
(e)
Upon the termination of Executive’s employment with the
Employer for any reason, Executive shall immediately return and
deliver to the Employer any and all papers, books, records,
documents, memoranda and manuals, e-mail, electronic or
magnetic recordings or data, including all copies thereof,
belonging to the Employer or relating to its business, in
Executive’s possession, whether prepared by Executive or
others. If at any time after the Employment Period, Executive
determines that he has any secret or confidential information in
his possession or control, Executive shall immediately return to
the Employer all such information, including all copies and
portions thereof.
9.
Successors .
(a)
This Agreement is personal to the Executive and without the prior
written consent of the Employer shall not be assignable by the
Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal
representatives.
(b)
This Agreement shall inure to the benefit of and be binding upon
the Employer and its successors and assigns.
(c)
The Employer shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Employer
to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Employer would be required
to perform it if no such succession had taken place. As used in
this Agreement, “Employer” shall mean the Employer as
defined in this Agreement and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law or otherwise.
10.
Indemnification and Directors’ and Officers’
Insurance.
(a)
During the Employment Period and thereafter, the Employer shall
indemnify the Executive to the fullest extent permitted under law
from and against any expenses (including but not limited to
attorneys’ fees, expenses of investigation and preparation
and fees and disbursements of the Executive’s accountants or
other experts),
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judgments, fines, penalties and
amounts paid in settlement actually and reasonably incurred by the
Executive in connection with any proceeding in which the Executive
was or is made party or was or is involved (for example, as a
witness) by reason of the fact the Executive was or is employed by
the Employer. Such indemnification shall continue as to the
Executive during the Employment Period and for at least six (6)
years from the Date of Termination with respect to acts or
omissions which occurred prior to his cessation of employment with
the Employer and shall inure to the benefit of the
Executive’s heirs, executors and administrators. The Employer
shall advance to the Executive all costs and expenses incurred by
him in connection with any proceeding covered by this provision
within twenty (20) calendar days after receipt by the Employer of a
written request for such advance. Such request shall include an
undertaking by the Executive to repay the amount of such advance if
it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.
(b)
The Employer agrees to maintain directors’ and
officers’ liability insurance policies covering the Executive
which shall provide him with coverage that is at least as favorable
to the Executive as the
