EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT executed as of the 3rd day of April, 1995, by
and between Wainoco Oil Corporation, a Wyoming corporation (the
"Company"), and James R. Gibbs (the "Executive").
W I T N E S S E T H:
WHEREAS the Executive is a principal officer of the Company
and an integral part of its management;
WHEREAS, the Company wishes to assure both itself and the
Executive of continuity of management in the event of any actual
or threatened change in control of the Company;
WHEREAS, this Agreement is not intended to alter materially
the compensation and benefits that the Executive could reasonably
expect in the absence of a change in control of the Company and,
accordingly, this Agreement will be operative only upon a change
in control of the Company, as that term is hereafter defined.
NOW, THEREFORE, in consideration of the premises and
covenants herein contained and other good, valuable and binding
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed by and between the parties as
follows:
1. Operation of Agreement.
1.01 This Agreement shall be binding immediately upon
its execution by the parties hereto, but, anything in this
Agreement to the contrary notwithstanding, neither the Agreement
nor any provision thereof shall be operative unless and until
there has been a Change in Control of the Company as defined in
paragraph 1.02 below. Upon the date of such a Change in Control
of the Company (the "Effective Date"), this Agreement and all
provisions thereof shall become operative immediately, without
the necessity of any further action on the part of either party
hereto.
1.02 For the purpose of this Agreement, the term
"Change in Control of the Company" shall mean a change in control
of a nature that would be required to be disclosed in a proxy
statement, governed by the rules of the Securities and Exchange
Commission as in effect on the date of this Agreement; provided
that, without limitation, such a change in control shall be
deemed to have occurred if and when (a) any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) is or becomes a beneficial owner, directly
or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then
outstanding securities, (b) during any period of 24 consecutive
months, commencing before or after the date of this Agreement,
individuals who at the beginning of such 24 month period were
directors of the Company for whom the Executive shall have voted
cease for any reason to constitute at least a majority of the
Board of Directors of the Company, or (c) during any period after
the date of this Agreement, any event of the nature or type
described in Section 7.03(b)(v).
1.03 This Agreement shall terminate forthwith, and
without more, in the event that Executive ceases to be an
executive officer of the Company at any time prior to the
Effective Date whether by reason of his death, Disability,
discharge, resignation or otherwise; except that either party
wishing to do so terminate such employment, other than by reason
of death, Disability or discharge for Cause, hereby agrees to
give the other party at least 60 days' prior written notice.
Notwithstanding the foregoing, following the commencement of any
discussions with any third party that ultimately result in the
occurrence of a Change of Control, the Company shall not at the
instance or upon the suggestion of such third party terminate the
employment or reduce the compensation of Executive. This
Agreement shall terminate three years from the date hereof;
provided, however, that this Agreement shall be continued in full
force and effect for an additional period of three years
following such term, unless the Company elects to terminate this
Agreement at the end of such term by at least 30 days' prior
written notice to Executive; and provided, further, following the
commencement of any discussions with any third party that
ultimately result in the occurrence of a Change of Control, the
Company shall not make such election to terminate at the instance
or upon the suggestion of such third party.
1.04 Except as provided in paragraph 1.03 above,
nothing expressed or implied herein shall create any right or
duty (on the part of the Company or Executive) to have Executive
remain in the employment of the Company at any time prior to the
Effective Date, each reserving all rights to terminate the
employment relationship at any time (subject to the notice
requirement contained in paragraph 1.03 above) prior to the
Effective Date with or without Cause.
2. Employment; Period of Employment.
2.01 The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to
remain in the employ of the Company, or subject to the terms of
this Agreement, such other corporate profit center as shall then
be the principal successor to the business, assets and properties
of the Company, for the period set forth in paragraph 2.02 below
(the "Period of Employment") in the position and with the duties
and responsibilities set forth in Section 3 below, and upon the
other terms and conditions hereinafter stated.
2.02 The Period of Employment, subject only to the
provisions of Section 6 below relating to death or Disability,
shall continue for a period of three years from the Effective
Date.
3. Position, Duties, Responsibilities.
3.01 It is contemplated that at all times during the
Period of Employment the Executive shall continue to serve as a
principal officer of the Company with the office and title of
President and Chief Executive Officer of the Company and continue
to have duties and responsibilities commensurate with those
duties and responsibilities imposed on the Executive immediately
prior to the Effective Date.
3.02 During the Period of Employment the Executive
shall also serve and continue to serve, if and when elected and
reelected, as an officer or director, or both, of any subsidiary,
division or affiliate of the Company.
3.03 Throughout the Period of Employment the Executive
shall devote his full time and undivided attention during normal
business hours to the business and affairs of the Company, except
for reasonable vacations and except for illness or incapacity,
but nothing in this Agreement shall preclude the Executive from
devoting reasonable periods required for serving as a director or
member of a committee of any organization involving no conflict
of interest with the interests of the Company, from engaging in
charitable and community activities, and from managing his
personal investments, provided that such activities do not
materially interfere with the regular performance of his duties
and responsibilities under this Agreement.
3.04 The office of the Executive shall be located at
the principal executive offices of the Company. The Executive
shall not be required to change the current situs of his
employment or residence. The Executive also shall not be
required to be absent therefrom on travel status or otherwise
more than a total of 60 working days in any calendar year nor
more than 20 consecutive days at any one time.
4. Compensation, Compensation Plans, Perquisites.
4.01(a) For all services rendered by the Executive in
any capacity during the Period of Employment, including, without
limitation, services as an executive, officer, director or member
of any committee of the Company or of any subsidiary, division or
affiliate thereof, the Executive shall be paid as compensation:
(i) A base salary at no less than the rate in
effect immediately prior to the Effective Date, with increases
(if any) as shall be made from time to time in accordance with
the Employer's regular salary administration practices;
(ii) An annual performance bonus in an amount
no less than the amount of 50% of the base salary determined
pursuant to subparagraph 4.01(a)(i).
(b) Any increase in salary pursuant to clause (i)
of subparagraph 4.01(a) or in bonus or other compensation shall
in no way diminish any other obligation of the Company under this
Agreement.
4.02 During the Period of Employment the Executive
shall be and continue to be a full participant in the Company's
applicable stock option plans and any other compensation plans in
which the Executive participates immediately prior to the
Effective Date, or equivalent successor plans that may be adopted
by the Company, with at least the same reward opportunities to
Executive that have heretofore been provided. Nothing in this
Agreement shall preclude improvement of reward opportunities in
such plans or other plans in accordance with the present practice
of the Company.
4.03 During the Period of Employment, the Executive
shall be entitled to perquisites, including, without limitation,
an office, secretarial and clerical staff, and to fringe
benefits, including, without limitation, the payment or
reimbursement of club dues, in each case at least equal to those
attached to his office immediately prior to the Effective Time,
as well as to reimbursement, upon proper accounting, of
reasonable expenses and disbursements incurred by him in the
course of his duties.
5. Employee Benefit Plans.
5.01 The compensation, together with other matters
provided for in Section 4 above, is in addition to the benefits
provided for in this Section 5.
5.02 The Executive, his dependents and beneficiaries
shall be entitled to all payments and benefits and service
credit, for benefits during the Period of Employment to which
officers of the Company, their dependents and beneficiaries are
entitled as a result of the employment of such officers under the
terms of employee plans and practices of the Company in effect
immediately prior to the Effective Time, including, without
limitation, the Company's retirement program (consisting of the
Wainoco Retirement Savings Plan, the Wainoco Pension Plan, and
the Wainoco Deferred Compensation Plan), the Company's stock
purchase and savings, thrift and investment plans, if any, the
Wainoco Oil Corporation Executive Life Insurance Plan, its group
life insurance plan, its accidental death and dismemberment
insurance, its business travel insurance, its long term
disability, medical, dental and health and welfare plans and
other present or successor plans and practices of the Company,
its subsidiaries and divisions, for which officers, their
dependents and beneficiaries are eligible, and to all payments or
other benefits under any such plan or practice after the Period
of Employment as a result of participation in such plan or
practice during the Period of Employment.
5.03 Nothing in this Agreement shall preclude the
Company from amending or terminating any employee benefit plan or
practice but, it being the intent of the parties that the
Executive shall continue to be entitled during the period of
Employment to perquisites as set forth in paragraph 4.03 above
and to benefits and service credit for benefits under paragraph
5.02 above at least equal to those attached to his position
immediately prior to the Effective Date, nothing in this
Agreement shall operate as, or be construed to reduce or
authorize reduction without the Executive's written consent in
the level of such perquisites, benefits or service credit for
benefits. In the event of any such reduction by amendment or
termination of any plan or practice or otherwise, the Executive,
his dependents and beneficiaries shall continue to be entitled to
perquisites, benefits and service credit for benefits at least
equal to the perquisites and to benefits and service credit for
benefits under such plans or practices that he or his dependents
and beneficiaries would have received if such reduction had not
taken place.
6. Effect of Death or Disability.
6.01 In the event of the death of the Executive during
the Period of Employment, the legal representative of the
Executive shall be entitled to the compensation provided for in
paragraph 4.01 during the balance of the Period of Employment.
The Period of Employment shall be deemed to have ended as of the
close of business on the last day of the twelfth month following
the month in which death shall have occurred but without
prejudice to any other payments due in respect of the Executive's
death hereunder or pursuant to any other agreements or
arrangements with the Company.
6.02 The term "Disability," as used in this Agreement,
shall mean an illness or accident which prevents the Executive
from performing his duties under this Agreement for a period of
six consecutive months. In the event of the Disability of the
Executive during the Period of Employment, the Executive shall be
entitled to the full compensation provided for in this Agreement
for the period of such Disability (i.e., commencing on the date
on which the Disability occurred) but not in excess of six
months. The Period of Employment shall be deemed to have ended
as of the close of business on the last day of such six months'
period but without prejudice to any payments due to the Executive
in respect of disability or any short term illness or accident
which prevents the Executive from performing his duties for a
period of less than six months.
7. Termination.
7.01 In the event of a Termination, as defined in
paragraph 7.03 below, during the Period of Employment, the
provisions of this Section 7 shall apply.
7.02 In the event of a Termination the Company shall,
as liquidated damages or severance pay, or both, pay to the
Executive and provide him, his dependents, beneficiaries and
estate, with the following:
(a) The Company shall continue to pay the
Executive the base salary compensation provided in paragraph
4.01(a)(i) above at the rate in effect at the time of Termination
(which in accordance with the terms of this Agreement shall be no
less than the rate of base salary in effect immediately prior to
the Effective Date). Such base salary shall be paid no less often
than monthly beginning at the end of the month in which
Termination occurred and continuing during the remainder of the
Period of Employment.
(b) The Company shall also continue to pay the
Executive the annual performance bonus provided in paragraph
4.01(a)(ii) above. Such annual performance bonus compensation
shall be paid on an annual basis, so that a payment will be made
in each of the three years of the Employment Period.
(c) During the Employment Period the Executive,
his dependents, beneficiaries and estate, shall continue to be
entitled to all benefits and service credit for benefits under
employee benefit plans of the Company as if still employed during
such period under this Agreement and, if and to the extent that
such benefits or service credit for benefits shall not be payable
or provided under any such plans to the Executive, his
dependents, beneficiaries and estate, by reason of his no longer
being an employee of the Company as the result of Termination,
the Company shall itself pay or provide for payment of such
benefits and the equivalent of service credit for benefits to the
Executive, his dependents, beneficiaries and estate.
(d) The entire Period of Employment shall be
considered service with the Company for the purpose (i) of
continued credits under the Company's retirement programs, as
each plan or program was in effect immediately prior to
Termination and (ii) of all other benefit plans of the Company as
in effect immediately prior to Termination.
(e) In the event that the Executive shall at the
time of Termination hold an outstanding and unexercised (whether
or not exercisable at the time) option or options theretofore
granted by the Company, the Company shall, in addition to the
amounts provided for above, pay to the Executive in a lump sum an
amount equal to the excess above the option price under each such
option of the Fair Market Value at the time of Termination of the
shares subject to each such option. Solely for the purpose of
this subparagraph (e), Fair Market Value at the time of
Termination shall be deemed to mean the higher of (i) the average
of the reported closing prices of the Common Shares of the
Company, as reported on the New York Stock Exchange - Composite
Transactions, on the last trading day prior to the Termination
and on the last trading day of each of the two preceding thirty-
day periods, and (ii) in the event that a Change in Control, as
defined in paragraph 1.02 above, prior to Termination shall have
taken place as the result of a tender offer and such Change in
Control was consummated within twelve months of Termination, the
price paid for a majority of the Common Shares of the Company in
the course of such tender offer.
(f) At the Company's option, the Company may pay
Executive the total of all amounts payable to Executive for the
balance of the Term of Employment pursuant to subparagraphs (a)
and (b) of this Section 7.02 in a lump sum payment. Executive
may also elect, at any time during the remaining Term of
Employment, to receive all amounts payable to him for the balance
of the Term of Employment pursuant to subparagraphs (a) and (b)
of this Section 7.02 in a lump sum payment by providing written
notice of such election to the Company. The Company agrees to
make a lump sum payment of the total of such amounts within 30
days of Executive's notice of election to receive lump sum
payment. It is acknowledged and agreed that no lump sum payment
will shorten the Term of Employment of Executive, or modify or
obviate any obligations of the Company other than the payments
otherwise due during the Term of Employment pursuant to
subparagraphs (a) and (b) above.
7.03 The word "Termination," for the purpose of this
Section 7 and any other provisions of this Agreement, shall mean:
(a) Termination by the Company of the employment
of the Executive by the Company and its subsidiaries for any
reason other than for Cause as defined in paragraph 7.04 below or
for Disability as defined in subparagraph 6.02 above; or
(b) Termination by the Executive of his
employment by the Company and its subsidiaries upon the
occurrence of any of the following events:
(i) Failure to elect or reelect the
Executive to, or removal of the Executive from, the office set
forth in paragraph 3.01 above.
(ii) A significant change in the nature or
scope of the authorities, powers, functions or duties of
Executive as contemplated by paragraph 3.01 above, or a reduction
in compensation, which is not remedied within 30 days after
receipt by the Company of written notice from the Executive.
(iii) A determination by the Executive made
in good faith that as a result of a Change in Control of the
Company, as defined in paragraph 1.02 above, and a change in
circumstances thereafter and since the date of this Agreement
significantly affecting his position, he is unable to carry out
the authorities, powers, functions or duties attached to his
position and contemplated by Section 3 of this Agreement and the
situation is not remedied within 30 days after receipt by the
Company of written notice from the Executive of such
determination.
(iv) A breach by the Company of any
provision of this Agreement not embraced within the foregoing
clauses (i), (ii) and (iii) of this subparagraph 7.03(b) which is
not remedied within 30 days after receipt by the Company of
written notice from the Executive.
(v) The liquidation, dissolution,
consolidation or merger of the Company or transfer of all or
substantially all of its assets unless a successor or successors
(by merger, consolidation or otherwise) to which all or a
significant portion of its assets have been transferred shall
have assumed all duties and obligations of the Company under this
Agreement.
An election by the Executive to terminate his employment
given under the provisions of this paragraph 7.03 shall not be
deemed a voluntary termination of employment by the Executive for
the purpose of this Agreement or any plan or practice of the
Company.
7.04 For the purpose of any provision of this
Agreement, the termination of the Executive's employment shall be
deemed to have been for "Cause" only if:
(a) termination of his employment shall have
been the result of an act or acts of dishonesty on the part of
the Executive constituting a felony and resulting or intended to
result directly or indirectly in gain or personal enrichment at
the expense of the Company, or
(b) there has been a breach by the Executive
during the Period of Employment of the provisions of paragraph
3.03 above, relating to the time to be devoted to the affairs of
the Company, or of Section 8, relating to confidential
information, and such breach results in demonstrably material
injury to the Company, and with respect to any alleged breach of
paragraph 3.03 hereof, the Executive shall have either failed to
remedy such alleged breach within thirty days from his receipt of
written notice by the Secretary of the Company pursuant to
resolution duly adopted by the Board of Directors of the Company
after notice to the Executive and an opportunity to be heard
demanding that he remedy such alleged breach, or shall have
failed to take all reasonable steps to that end during such
thirty-day period and thereafter; provided that there shall have
been delivered to the Executive a certified copy of a resolution
of the Board of Directors of the Company adopted by the
affirmative vote of not less than three-fourths of the entire
membership of the Board of Directors called and held for that
purpose and at which the Executive was given an opportunity to be
heard, finding that the Executive was guilty of conduct set forth
in subparagraphs (a) or (b) above, specifying the particulars
thereof in detail.
Anything in this paragraph 7.04 or elsewhere in this
Agreement to the contrary notwithstanding, the employment of the
Executive shall in no event be considered to have been terminated
by the Company for Cause if termination of his employment took
place (a) as the result of bad judgment or negligence on the part
of the Executive, or (b) as the result of an act or omission
without intent of gaining therefrom directly or indirectly a
profit to which the Executive was not legally entitled, or (c)
because of an act or omission believed by the Executive in good
faith to have been in or not opposed to the interest of the
Company, or (d) for any act or omission in respect of which a
determination could properly be made that the Executive met the
applicable standard of conduct prescribed for indemnification or
reimbursement or payment of expenses under the Code of
Regulations of the Company or the laws of the State of Wyoming or
the directors' and officers' liability insurance of the Company,
in each case as in effect at the time of such act or omission, or
(e) as the result of an act or omission which occurred more than
twelve calendar months prior to the Executive's having been given
notice of the termination of his employment for such act or
omission unless the commission of such act or such omission could
not at the time of such commission or omission have been known to
a member of the Board of Directors of the Company (other than the
Executive, if he is then a member of the Board of Directors), in
which case more than twelve calendar months from the date that
the commission of such act or such omission was or could
reasonably have been so known, or (f) as the result of a
continuing course of action which commenced and was or could
reasonably have been known to a member of the Board of Directors
of the Company (other than the Executive) more than twelve
calendar months prior to notice having been given to the
Executive of the termination of his employment.
7.05 In the event that the Executive's employment
shall be terminated by the Company during the Period of
Employment and such termination is alleged to be for Cause, or
the Executive's right to terminate his employment under paragraph
7.03(b) above shall be questioned by the Company or for any other
reason, the Executive shall have the right, in addition to all
other rights and remedies provided by law, at his election either
to seek arbitration in Harris County, Texas under the rules of
the American Arbitration Association by serving a notice to
arbitrate upon the Company or to institute a judicial proceeding,
in either case within ninety days after having received notice of
termination of his employment or notice in any form that the
termination of his employment under paragraph 7.03(b) is subject
to question or that the Company is withholding or proposes to
withhold payments or provision of benefits or within such longer
period as may reasonably be necessary for the Executive to take
action in the event that his illness or incapacity should
preclude his taking such action within such ninety-day period.
8. Confidential Information
8.01 The Executive agrees not to disclose, either
while in the Company's employ or at any time thereafter, to any
person not employed by the Company, or not engaged to render
services to the Company, any confidential information obtained by
him while in the employ of the Company, including, without
limitation, any of the Company's inventions, processes, methods
of distribution or customers or trade secrets; provided, however,
that this provision shall not preclude the Executive from use or
disclosure of information known generally to the public or of
information not considered confidential by persons engaged in the
business conducted by the Company or from disclosure required by
law or Court order.
8.02 The Executive also agrees that upon leaving the
Company's employ he will not take with him, without the prior
written consent of an officer authorized to act in the matter by
the Board of Directors of the Company, any drawing, blueprint,
specification or other document of the Company, its subsidiaries,
affiliates and divisions, which is of a confidential nature
relating to the Company, its subsidiaries, affiliates and
divisions, or without limitation, relating to its or their
methods of distribution, or any description of any formulae or
secret processes.
9. Notices
All notices, requests, demands and other communications
provided for by this Agreement shall be deemed to have been duly
given if and when mailed in the continental United States by
registered or certified mail, return receipt requested, postage
prepaid, or personally delivered or sent by telex or other
telegraphic means to the party entitled thereto at the address
stated below or to such changed address as the addressee may have
given by a similar notice:
To the Company: Wainoco Oil Corporation
1200 Smith Street, Suite 2100
Houston, Texas 77002
Attention: Chairman, Compensation Committee
To the Executive: James R. Gibbs
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10. General Provisions
10.01 There shall be no right of set-off or
counterclaim in respect of any claim, debt or obligation, against
any payments to the Executive, his dependents, beneficiaries or
estate provided for in this Agreement.
10.02 The Company and the Executive recognize that
each party will have no adequate remedy at law for breach by the
other of any of the agreements contained herein and, in the event
of any such breach, the Company and the Executive hereby agree
and consent that the other shall be entitled to a decree of
specific performance, mandamus or other appropriate remedy to
enforce performance of such agreements.
10.03 No right or interest to or in any payments shall
be assignable by the Executive; provided, however, that this
provision shall not preclude him from designating one or more
beneficiaries to receive any amount that may be payable after his
death and shall not preclude the legal representative of his
estate from assigning any right hereunder to the person or
persons entitled thereto under his will or, in the case of
intestacy, to the person or persons entitled thereto under the
laws of intestacy applicable to his estate. The term "benefi-
ciaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount or, if no
beneficiary has been so designated, the legal representative of
the Executive's estate.
10.04 No right, benefit or interest hereunder, shall
be subject to anticipation, alienation, sale, assignment,
encumbrance, charge, pledge, hypothecation, or set-off in respect
of any claim, debt or obligation, or to execution, attachment,
levy or similar process, or assignment by operation of law. Any
attempt, voluntary or involuntary, to effect any action specified
in the immediately preceding sentence shall, to the full extent
permitted by law, be null, void and of no effect.
10.05 In the event of the Executive's death or a
judicial determination of his incompetence, reference in this
Agreement to the Executive shall be deemed, where appropriate, to
refer to his legal representative or, where appropriate, to his
beneficiary or beneficiaries.
10.06 The titles to sections in this Agreement are
intended solely for convenience and no provision of this
Agreement is to be construed by reference to the title of any
section.
10.07 No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver
shall be authorized by the Board of Directors of the Company or
any authorized committee of the Board of Directors and shall be
agreed to in writing, signed by the Executive and by an officer
of the Company thereunto duly authorized.
10.08 Except as otherwise specifically provided in
this Agreement, no waiver by either party hereto of any breach by
the other party hereto of any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of a subsequent breach of such condition or provision or a
waiver of a similar or dissimilar provision or condition at the
same or at any prior or subsequent time.
10.09 In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable
for any reason, the remaining provisions and portions of this
Agreement shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law.
10.10 Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the assets of the Company
whether by merger, consolidation, sale or otherwise (and such
successor shall thereafter be deemed "the Company" for the
purposes of this Agreement), but shall not otherwise be
assignable by the Company.
10.11 This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
(other than the choice of law principles thereof).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
WAINOCO OIL CORPORATION
By: /s/ James S. Palmer
ATTEST:
/s/ Julie H. Edwards
Secretary
/s/ J. R. Gibbs
James R. Gibbs