EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT executed as of the 1st day of April, 1996, by and
between Wainoco Oil Corporation, a Wyoming corporation (the "Company"), and
Joel M. Mann (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 Vice President - Controller 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 30% 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 Canada
350 7th Avenue, SW #1700
Calgary, Alberta
Canada T2P 3N9
Attention: Chairman, Compensation Committee
To the Executive: Joel M. Mann
440 Willowpark Drive S.E.
Calgary, Alberta
Canada T2J 0L2
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 "beneficiaries" 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 con-
strued 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/ J. R. Gibbs
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ATTEST:
/s/ Julie H. Edwards
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Secretary
/s/ Joel M. Mann
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Joel M. Mann