<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------------- ----------------------
Commission file number 0-25821
--------------------
STATIA TERMINALS GROUP N.V.
(Exact name of registrant as specified in its charter)
Netherlands Antilles 52-2003016
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Tumbledown Dick Bay
St. Eustatius, Netherlands Antilles
(011) 5993-82300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No X *
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. As of May 13, 1999,
7,600,000 common shares of the issuer were outstanding.
_____________________
* The Registrant has not been subject to the filing requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934 for the past 90 days. The
Registrant filed a Form 8A and became subject to such requirements on April 22,
1999.
<PAGE>
Statia Terminals Group N.V.
Quarterly Report on Form 10-Q
March 31, 1999
Table of Contents
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets 1
Consolidated Condensed Statements of Income (Loss) 2
Consolidated Condensed Statements of Cash Flows 3
Notes to Consolidated Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
This Quarterly Report on Form 10-Q (this "Report") contains forward-looking
statements within the meaning of 27A of the Securities Act of 1933. Discussions
containing such forward-looking statements may be found in Items 1, 2 and 3 of
Part I hereof, as well as within this Report generally. In addition, when used
in this Report, the words "may", "will", "believe," "anticipate," "expect",
"estimate" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to a number of risks and uncertainties.
Actual results in the future could differ materially from those described in the
forward-looking statements as a result of fluctuations in the supply of and
demand for crude oil and other petroleum products, changes in the petroleum
terminaling industry, added costs due to changes in government regulations
affecting the petroleum industry, the loss of a major customer, the financial
condition of the Company's customers, interruption of our operations caused by
adverse weather conditions, the condition of the United States economy, risks
associated with our efforts to comply with the Y2K requirement, and other
factors included in this Report and the Company's Registration Statement on Form
S-1 (File No. 333-72317). The Company does not undertake any obligation to
publicly release the results of any revisions to these forward-looking
statements that may be made to reflect any future events or circumstances.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1998 1999
----------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 14,061 $ 20,474
Accounts receivable-
Trade, net 7,562 8,897
Other 2,328 1,611
Inventory, net 4,528 1,449
Prepaid expenses 1,417 1,645
--------- ---------
Total current assets 29,896 34,076
PROPERTY AND EQUIPMENT, net 209,970 209,202
OTHER NONCURRENT ASSETS, net 5,744 6,324
--------- ---------
Total assets $ 245,610 $ 249,602
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 9,306 $ 8,956
Accrued interest payable 2,027 5,984
Dividends payable 7,440 9,161
Other accrued expenses 8,506 8,708
--------- ---------
Total current liabilities 27,279 32,809
LONG-TERM DEBT 135,000 135,000
--------- ---------
Total liabilities 162,279 167,809
REDEEMABLE PREFERRED STOCK - SERIES A, B and C 40,000 40,000
STOCKHOLDERS' EQUITY:
Preferred stock - Series D and E 54,824 54,824
Notes receivable from stockholders (1,474) (1,474)
Common stock 4 4
Additional paid-in-capital 363 480
Accumulated deficit (10,386) (12,041)
--------- ---------
Total stockholders' equity 43,331 41,793
--------- ---------
Total liabilities and stockholders' equity $ 245,610 $ 249,602
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
Page 1
<PAGE>
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
-------------------------
1998 1999
---------- ----------
<S> <C> <C>
REVENUES $ 30,364 $ 37,415
COSTS OF SERVICES AND PRODUCTS SOLD 25,120 28,600
-------- --------
Gross profit 5,244 8,815
ADMINISTRATIVE EXPENSES 2,245 2,535
SPECIAL COMPENSATION EXPENSE -- 1,947
-------- --------
Operating income 2,999 4,333
INTEREST EXPENSE 4,227 4,202
INTEREST INCOME 125 189
-------- --------
Income (loss) before provision for income taxes
and preferred stock dividends (1,103) 320
PROVISION FOR INCOME TAXES 205 254
-------- --------
Income (loss) before preferred stock dividends (1,308) 66
PREFERRED STOCK DIVIDENDS 925 1,721
-------- --------
Net loss available to common stockholders $ (2,233) $ (1,655)
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
Page 2
<PAGE>
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
-----------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 1998 1999
--------- --------
<S> <C> <C>
Income (loss) before preferred stock dividends $ (1,308) $ 66
Adjustments to reconcile net income (loss) before preferred stock dividends
to net cash provided by operating activities:
Depreciation, amortization and non-cash charges 2,906 3,106
(Increase) decrease in accounts receivable-trade 3,118 (1,335)
(Increase) decrease in other receivables (496) 717
(Increase) decrease in inventory (615) 3,079
Increase in prepaid expenses (1,451) (228)
(Increase) decrease in other non-current assets 1 (44)
Increase (decrease) in accounts payable 132 (408)
Increase in accrued expenses 4,340 4,019
-------- --------
Net cash provided by operating activities 6,627 8,972
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (2,449) (2,008)
Proceeds from sale of property and equipment -- 15
-------- --------
Net cash used in investing activities (2,449) (1,993)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of direct costs of initial public offering of equity -- (566)
-------- --------
Net cash used in financing activities -- (566)
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 4,178 6,413
CASH AND CASH EQUIVALENTS, beginning of period 6,113 14,061
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 10,291 $ 20,474
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 104 $ 188
======== ========
Cash paid for interest $ 42 $ 18
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
Page 3
<PAGE>
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1999
(Dollars in thousands except share amounts)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited consolidated condensed financial statements of Statia
Terminals Group N.V. ("Group") and its subsidiaries (together with Group, the
"Company") have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. Significant accounting policies followed by
the Company were disclosed in the Notes to the Consolidated Financial Statements
for the year ended December 31, 1998 included in the Company's Registration
Statement on Form S-1 (File No. 333-72317) related to its initial public
offering of equity (the "Registration Statement"). In the opinion of the
Company's management, the accompanying consolidated condensed financial
statements contain adjustments, consisting of normal recurring accruals,
necessary to present fairly the financial position of the Company at March 31,
1999 and the results of operations and cash flows for the three months ended
March 31, 1998 and 1999. Operating results for the three months ended March 31,
1999 are not necessarily indicative of the results that may be expected for the
year ending December 31, 1999. Additionally, the Company's initial public
offering of equity will impact the Company's results of operations and financial
condition. These financial statements should be read in conjunction with the
Registration Statement.
2. SEGMENT INFORMATION
The Company is organized around several different segments, the two most
significant of which are products and services, and geographic location. The
Company's primary products and services are bunker and bulk product sales, and
terminaling services (consisting of storage, throughput, dock charges, emergency
response fees and other terminal charges).
The primary measures of profit and loss utilized by the Company's
management to make decisions about resources to be allocated to each segment are
earnings before interest expense, interest income, income taxes, depreciation,
amortization and certain unallocated income and expenses ("Internal EBITDA") and
earnings before interest expense, interest income, income taxes and certain
unallocated income and expenses ("Internal EBIT").
Page 4
<PAGE>
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1999
(Dollars in thousands)
2. SEGMENT INFORMATION--(CONTINUED)
The following information is provided for the Company's bunker and bulk
products sales and terminaling services segments:
For the Three Months Ended
March 31,
--------------------
1998 1999
------- -------
REVENUES:
Terminaling services $14,182 $16,628
Bunker and bulk product sales 16,182 20,787
------- -------
Total $30,364 $37,415
======= =======
INTERNAL EBITDA:
Terminaling services $ 5,283 $ 8,105
Bunker and bulk product sales 913 1,274
------- -------
Total $ 6,196 $ 9,379
======= =======
DEPRECIATION AND AMORTIZATION EXPENSE:
Terminaling services $ 2,781 $ 2,823
Bunker and bulk product sales 125 133
------- -------
Total $ 2,906 $ 2,956
======= =======
INTERNAL EBIT:
Terminaling services $ 2,502 $ 5,282
Bunker and bulk product sales 788 1,141
------- -------
Total $ 3,290 $ 6,423
======= =======
A reconciliation of Internal EBIT to the Company's income (loss) before
provision for income taxes and preferred stock dividends is as follows:
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
------------------------------
1998 1999
------------- -------------
<S> <C> <C>
Internal EBIT $ 3,290 $ 6,423
Unallocated operating and administrative expenses (519) (370)
Special management bonus - (1,947)
Interest expense excluding debt cost amortization expense (3,999) (3,975)
Interest income 125 189
------------- -------------
Income (loss) before provision for income taxes and preferred stock dividends $ (1,103) $ 320
============= =============
</TABLE>
Page 5
<PAGE>
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1999
(Dollars in thousands)
3. INITIAL PUBLIC OFFERING OF EQUITY
On April 28, 1999, Group completed its initial public equity offering
of 7.6 million common shares. The offering price was $20 per share raising gross
proceeds of $152,000. The gross proceeds of the offering were used primarily to
redeem all of Group's outstanding preferred stock and accrued dividends, pay
underwriters' discounts and fees, and pay certain other costs directly
associated with the offering. The remaining proceeds of approximately $37,700
have been invested and will be utilized during the second quarter of 1999 to
redeem or acquire $33,750 of the 11 3/4% mortgage notes co-issued by two of
Group's subsidiaries.
During the three months ended March 31, 1999, the Company recorded
as special compensation expense a bonus in the amount of $1,947 for particular
members of the Company's management. The purpose of this special management
bonus was to partially reimburse these individuals with respect to adverse tax
consequences that resulted from the offering and other past compensation
arrangements.
During the three months ended March 31, 1999, the Company recorded $764 of
deferred costs in the line item other noncurrent assets consisting primarily of
legal, accounting and printing costs directly associated with the offering of
which $566 had been paid as of March 31, 1999. During the second quarter of
1999, all such direct costs of the offering will be recorded as a reduction of
stockholders' equity.
As more fully discussed in the Registration Statement, in connection with
the offering, certain previously granted stock options became fully vested, were
exercised and became subordinated shares. In accordance with APB 25, the Company
was amortizing as compensation expense the difference between the estimated fair
value of the options at the date of grant and the exercise price over the
vesting period of five years. On April 28, 1999, the remaining unamortized
compensation expense associated with these options of $2,152 will be recorded as
a non-cash special compensation expense and credited to additional paid-in
capital.
Page 6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
For purposes of the discussion below, reference is made to the
unaudited Consolidated Condensed Financial Statements and Notes thereto of
Statia Terminals Group N.V. and Subsidiaries as of March 31, 1999 and the three
month periods ended March 31, 1999 and 1998 included herein. Reference should
also be made to the Company's Registration Statement on Form S-1 (File No.
333-72317) that includes the Company's Consolidated Financial Statements as of
and for the year ended December 31, 1998. You should note that we sold our
Brownsville, Texas, facility on July 29, 1998, and the figures below and our
consolidated condensed financial statements for the three months ended March 31,
1998 include the Brownsville facility.
Results of Operations
The following table sets forth, for the periods indicated, the
percentage of revenues represented by certain items in our consolidated
condensed income statements.
Results of Operations
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
-------------------------------------------
1998 1999
------------------- -------------------
% of % of
Dollars Revenues Dollars Revenues
------- -------- ------- --------
<S> <C> <C> <C> <C>
Revenues:
Terminaling services $ 14,182 46.7% $ 16,628 44.4%
Bunker and bulk product sales 16,182 53.3% 20,787 55.6%
-------- ------ -------- -------
Total revenues 30,364 100.0% 37,415 100.0%
Cost of services and products sold 25,120 82.7% 28,600 76.4%
-------- ------ -------- -------
Gross profit 5,244 17.3% 8,815 23.6%
Administrative expenses 2,245 7.4% 2,535 6.8%
Special compensation expense - - 1,947 5.2%
-------- --------- -------- -------
Operating income 2,999 9.9% 4,333 11.6%
Interest expense 4,227 13.9% 4,202 11.2%
Interest income 125 0.4% 189 0.5%
-------- ------ -------- -------
Income (loss) before income taxes and preferred stock
dividends (1,103) (3.6)% 320 0.9%
Provision for income taxes 205 0.7% 254 0.7%
Preferred stock dividends 925 3.0% 1,721 4.6%
-------- ------ -------- -------
Net loss available to common stockholders $ (2,233) (7.3)% $ (1,655) (4.4)%
========= ======= ======== ========
</TABLE>
Page 7
<PAGE>
The following tables set forth, for the periods indicated (a) the total
revenues and total operating income (loss), after allocation of administrative
expenses, at each of our operating locations and (b) the percentage such revenue
and operating income (loss) relate to our total revenue and operating income.
Revenues by Location
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
-----------------------------------------
1998 1999
---------------- ------------------
% of % of
Dollars Total Dollars Total
------- ----- ------- -----
<S> <C> <C> <C> <C>
Netherlands Antilles and the Caribbean $ 25,269 83.2% $ 32,296 86.3%
Canada 4,358 14.4% 5,119 13.7%
Brownsville, Texas facility 737 2.4% - -
--------- ------- --------- -------
Total $ 30,364 100.0% $ 37,415 100.0%
======== ======= ========= =======
</TABLE>
Operating Income (Loss) by Location
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
-----------------------------------------
1998 1999
------------------ ------------------
% of % of
Dollars Total Dollars Total
------- ----- ------- -----
<S> <C> <C> <C> <C>
Netherlands Antilles and the Caribbean $ 2,568 85.6% $ 3,559 82.1%
Canada 755 25.2% 774 17.9%
Brownsville, Texas facility (324) (10.8)% - -
------- ------- -------- -------
Total $ 2,999 100.0% $ 4,333 100.0%
======= ======= ======== =======
</TABLE>
The following table sets forth for the periods indicated total
capacity, capacity leased, throughput and vessel calls for each of our operating
locations. "Total capacity" represents the average storage capacity available
for lease for a period. "Capacity leased" represents the storage capacity leased
to third parties weighted for the number of days leased in the month divided by
the capacity available for lease. "Throughput" volume is the total number of
inbound barrels discharged from a vessel, tank, rail car or tanker truck, not
including across-the-dock or tank-to-tank transfers. A "vessel call" occurs when
a vessel docks or anchors at one of our terminal locations in order to load
and/or discharge cargo and/or to take on bunker fuel. Such dockage or anchorage
is counted as one vessel call regardless of the number of activities carried on
by the vessel. A vessel call also occurs when we sell and deliver bunker fuel to
a vessel not calling at our terminals for the above purposes. Each of these
statistics is a measure of the utilization of our facilities.
Page 8
<PAGE>
Capacity, Capacity Leased, Throughput and Vessel Calls by Location
(Capacity and throughput in thousands of barrels)
For the Three Months Ended March 31,
------------------------------------
1998 1999
------------- ------------
Netherlands Antilles and the
Caribbean
Total capacity 11,334 11,334
Capacity leased 85% 95%
Throughput 15,296 16,208
Vessel calls 195 262
Canada
Total capacity 7,404 7,404
Capacity leased 86% 96%
Throughput 15,585 6,924
Vessel calls 31 17
Texas (1)
Total capacity 1,649 N/A
Capacity leased 42% N/A
Throughput 863 N/A
Vessel calls 27 N/A
All locations (1)
Total capacity 20,387 18,738
Capacity leased 82% 95%
Throughput 31,744 23,132
Vessel calls 253 279
(1) The Brownsville, Texas facility was sold on July 29, 1998. The statistics
above for the three months ended March 31, 1998 include the operations of
the Brownsville facility.
N/A Not applicable due to the sale of the Brownsville facility.
Comparability
On July 29, 1998, we sold Statia Terminals Southwest to an unrelated
third-party. Our consolidated condensed financial statements for the three
months ended March 31, 1998 include the operations of Statia Terminals
Southwest. The operating results of Statia Terminals Southwest for the three
months ended March 31, 1998 were not significant.
Page 9
<PAGE>
Revenues
Total revenues for the three months ended March 31, 1999 were $37.4
million compared to $30.4 million for the same period of 1998, an increase of
$7.0 million, or 23.2%.
Revenues from terminaling services, which consist of storage,
throughput, dock charges, emergency response fees and other terminal charges,
for the three months ended March 31, 1999 were $16.6 million compared to $14.2
million for the same period of 1998, an increase of $2.4 million, or 17.2%. The
improvement in terminaling services revenue for the three months ended March 31,
1999 compared to the same period in 1998 was principally due to:
o our ability to attract additional long term customers who use our facilities
as part of their strategic distribution networks; and
o additional vessel calls at St. Eustatius resulting in higher dock charges
and emergency response fees.
Revenues from terminaling services at St. Eustatius increased
approximately $2.5 million, or 27.2%, during the three months ended March 31,
1999, as compared to the same period of 1998, due to higher capacity leased,
additional throughput and more vessel calls. Total throughput increased from
15.3 million barrels during the three months ended March 31, 1998 to 16.2
million barrels during the same period of 1999 due primarily to higher
throughput of crude oil and petroleum products, and was partially offset by
reduced throughput of fuel oil. Sixty-seven more vessels called at the St.
Eustatius facility during the three months ended March 31, 1999 than during the
same period of 1998, resulting in higher revenues from dock charges and stand-by
emergency response fees. For the three months ended March 31, 1999, the overall
percentage of capacity leased at this facility was 95% compared to 85% for the
same period of 1998, reflecting increases in the percentage of capacity leased
for fuel oil tankage and petroleum products.
Revenues from terminaling services at Point Tupper increased $0.6
million, or 12.9% during the three months ended March 31, 1999 as compared to
same period of 1998 due to higher capacity leased partially offset by reduced
throughput and vessel calls. The percentage of tank capacity leased at Point
Tupper increased from 86% for the three months ended March 31, 1998 to 96% for
the same period of 1999. This increase was primarily the result of additional
crude oil and clean petroleum products tankage leased during the three months
ended March 31, 1999 as compared to the same period of 1998. Fewer vessel calls
led to lower port charge revenues at this facility during the three months ended
March 31, 1999 as compared to the same period of 1998.
Revenues from bunker and bulk product sales were $20.8 million for the
three months ended March 31, 1999 compared to $16.2 million for the same period
in 1998, an increase of $4.6 million, or 28.5%. The increase was primarily due
to an increase in the volume of bunkers and bulk product sold. Metric tons of
bunkers and bulk product sold increased 58.1% during the three months ended
March 31, 1999 as compared to the same period of 1998. However, average selling
prices decreased 18.8% when comparing the three months ended March 31, 1999 with
the same period of 1998.
Gross Profit
Gross profit for the three months ended March 31, 1999 was $8.8 million
compared to $5.2 million for the same period of 1998, representing an increase
of $3.6 million, or 68.1%. The increase in gross profit is primarily the result
of the increased terminaling services revenue produced at a small incremental
cost. Additionally, we realized higher gross margins on bunker sales during the
three months ended March 31, 1999 as compared to the same period of 1998 due to
higher volumes of bunker fuels delivered.
Page 10
<PAGE>
Gross profits from terminaling services are generally higher than gross
profits from bunker and bulk product sales. Our operating costs for terminaling
services are relatively fixed and generally do not change significantly with
changes in capacity leased. Additions or reductions in storage, throughput and
ancillary revenues directly impact our gross profit. Costs for the procurement
of bunker fuels and bulk petroleum products are variable and linked to global
oil prices. Our bunker and bulk product costs are also impacted by market supply
conditions, types of products sold and volumes delivered.
Administrative Expenses
Administrative expenses were $2.5 million for the three months ended
March 31, 1999 as compared to $2.2 million for the same period of 1998,
representing an increase of $0.3 million, or 12.9%. The increase during the
three months ended March 31, 1999, as compared to the same period of 1998, is
primarily the result of higher personnel costs and professional fees.
Special Compensation Expense
As more fully discussed in note 3 of notes to the consolidated
condensed financial statements included in Part I, Item 1 of this Report, we
recorded a special management bonus during the three months ended March 31, 1999
of approximately $1.9 million.
Interest Expense
During the three months ended March 31, 1999 and 1998, we incurred $4.2
million of interest expense from interest accrued on our mortgage notes due in
2003, amortization expense related to deferred financing costs and certain bank
charges.
Preferred Stock Dividends
Preferred stock dividends were $1.7 million for the three months ended
March 31, 1999 as compared to $0.9 million for the same period of 1998,
representing an increase of $0.8 million, or 86.1%. The increase during the
three months ended March 31, 1999 as compared to the same period of 1998 is the
result of the increasing balance of dividends payable and a rate increase.
Net Loss
Net loss available to common stockholders was $1.7 million for the
three months ended March 31, 1999, as compared to a net loss of $2.2 million for
the same period of 1998, an improvement of $0.5 million. The decrease in the net
loss is attributable to the net effect of the factors discussed above.
Liquidity and Capital Resources
During the three months ended March 31, 1999, no significant changes
occurred in our debt and equity financing arrangements. No draws have occurred
on the $17.5 million revolving credit facility secured by our accounts
receivable and oil inventory. The revolving credit facility is available for
working capital needs and letter of credit financing, and it permits us to
borrow in accordance with our available borrowing base, which was estimated at
$8.1 million at March 31, 1999. The revolving credit facility bears interest at
the prime rate plus 0.50% per annum (8.25% at March 31, 1999) and will expire on
November 27, 1999.
At March 31, 1999, we had cash and cash equivalents on hand of $20.5
million compared to $14.1 million at December 31, 1998.
Page 11
<PAGE>
On April 28, 1999, Group completed its initial equity offering of 7.6
million common shares. The offering price was $20 per share, raising gross
proceeds of $152 million. The gross proceeds of the offering were used primarily
to redeem all of Group's outstanding preferred stock and pay accrued dividends,
pay underwriters' discounts and fees, and pay certain other costs directly
associated with the offering. Such underwriters' discounts and fees, and costs
directly associated with the offering are expected to total $15.0 million, of
which approximately $5.2 million will be funded from our cash on hand prior to
the offering. The remaining proceeds of approximately $37.7 million have been
invested and will be utilized during the second quarter of 1999 to redeem or
acquire $33.8 million of the 11 3/4% mortgage notes co-issued by two of Group's
subsidiaries.
We currently believe that cash on hand, cash flow generated by
operations, and amounts available under the revolving credit facility will be
sufficient to fund working capital needs, to service debt, to make capital
expenditures and meet other operating requirements, including any expenditures
required by applicable environmental laws and regulations. Our operating
performance and ability to service or refinance the mortgage notes and to extend
or refinance the revolving credit facility will be subject to future economic
conditions and to financial, business and other factors, many of which are
beyond our control. We can give no assurances that our future operating
performance will be sufficient to service our indebtedness or that we will be
able to repay at maturity or refinance our indebtedness in whole or in part.
Under our Articles of Incorporation we are required to distribute all
of our "available cash" (as defined therein) to our shareholders. "Available
cash" as defined generally includes cash from various sources after deducting
such reserves as our Board of Directors may deem necessary or appropriate to
provide for the proper conduct of our business, including future capital
expenditures and anticipated credit needs, and to comply with debt obligations.
Cash Flow from Operating Activities
Net cash provided by operating activities was $9.0 million and $6.6
million for the three months ended March 31, 1999 and 1998, respectively. Cash
flow from operations has been our primary source of liquidity during these
periods. Differences between net losses and positive operating cash flow have
resulted primarily from depreciation and amortization burdens and changes in
various asset and liability accounts.
Cash Flow from Investing Activities
Net cash used in investing activities was $2.0 million and $2.4 million
for the three months ended March 31, 1999 and 1998, respectively. Investing
activities during the three months ended March 31, 1999 and 1998 included
purchases of property and equipment of $2.0 million and $2.4 million,
respectively.
Cash Flow from Financing Activities
During the three months ended March 31, 1999, the Company paid $0.6
million of legal, accounting and printing costs directly associated with its
initial public offering of equity. Upon completion of the offering in the second
quarter of 1999, all such direct costs of the offering will be recorded as
a reduction of stockholders' equity.
Page 12
<PAGE>
Capital Expenditures
Our capital expenditure budget for 1999 is $7.3 million for maintenance
capital expenditures and $1.8 million for producing incremental revenues.
Additional spending is contingent upon the addition of incremental terminaling
business.
The following table sets forth capital expenditures and separates such
expenditures into those which produce, or have the potential to produce,
incremental revenue, and those which represent maintenance capital expenditures.
Summary of Capital Expenditures by Type
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
-----------------------------------------
1998 1999
------------------ ------------------
% of % of
Dollars Total Dollars Total
------- ----- ------- -----
<S> <C> <C> <C> <C>
Produce incremental revenues $ 151 6.2% $ 121 6.0%
Maintenance capital expenditures 2,298 93.8% 1,887 94.0%
-------- ------- -------- -------
Total $ 2,449 100.0% $ 2,008 100.0%
======== ======= ======== =======
</TABLE>
Information Technology and the Year 2000
Some computer software and hardware applications and embedded
microprocessor, microcontroller or other processing technology applications and
systems use only two digits to refer to a year rather than four digits. As a
result, these applications could fail or create erroneous results in dealing
with certain dates and especially if the applications recognize "00" as the year
1900 rather than the year 2000. During 1997, we developed a Year 2000 plan to
upgrade our key information systems and simultaneously address the potential
disruption to both operating and accounting systems that might be caused by the
Year 2000 problem. The Year 2000 plan also provides for the evaluations of the
systems of customers, vendors, and other third-party service providers and
evaluations of our non-information technology systems, which include embedded
technologies such as microcontrollers and is also referred to as non-traditional
information technology.
We have substantially completed the assessment phase of the Year 2000
plan as it relates to both traditional and non-traditional technology
applications and systems. We are currently in the process of testing new Year
2000 compliant terminal operations software at our facilities. We anticipate
that the Year 2000 compliant terminal operations systems will be fully
implemented in the third quarter of 1999. We recently selected a fully
integrated Year 2000 compliant finance, accounting, and human resources system
and expect to have the new system operational by the third quarter of 1999.
We have identified some components of our control systems at our two
terminals as not being Year 2000 compliant. These systems measure, regulate,
control, and maintain crude oil and petroleum product flow and fire protection
equipment at the terminals. We are currently evaluating the best means to
mitigate the possible adverse effects resulting from the potential failure of
these systems including repair or replacement and, in most cases, have already
installed and successfully tested replacements of non-compliant components.
However, we believe that in a worst case scenario, existing manual overrides
would prevent the failure of these systems from having a material adverse effect
on our operations.
Page 13
<PAGE>
In accordance with our Year 2000 plan, we have initiated a formal
communications process with other companies with which our systems interface or
rely on to determine the extent to which those companies are addressing their
Year 2000 compliance. In connection with this process, we have sent numerous
letters and questionnaires to third parties and are evaluating those responses
as they are received. Where necessary, we will be working with those companies
that are not yet Year 2000 compliant to mitigate any material adverse effect
such non-compliance may have on us. Based upon information we have received and
reviewed of our possible existing relationships with third parties, we do not
currently anticipate that any third-party non-compliance would have a material
adverse effect on our business, results of operations, or financial condition.
In 1998, we spent $1.1 million related to our Year 2000 remediation
efforts of which we have capitalized $1.0 million and expensed $0.1 million.
During the three months ended March 31, 1999 we spent $0.3 million related to
these efforts of which substantially all was capitalized. During the remainder
of 1999, we anticipate spending an additional $0.6 million to complete these
efforts of which we anticipate capitalizing $0.5 million and expensing $0.1
million. However, we cannot guarantee that these estimates will be met and
actual expenditures could differ materially from these estimates.
Based upon information currently available to us, we believe our
efforts will succeed in preventing the Year 2000 issue from having a material
adverse effect on us. However, the pervasive nature of the Year 2000 issue may
prevent us from fully assessing and rectifying all systems that could have an
effect on our business, results of operations, or financial condition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We periodically purchase refined petroleum products from our customers
and others for resale as bunker fuel, for small volume sales to commercial
interests and to maintain an inventory of blend stocks for our customers.
Petroleum product inventories are held for short periods, generally not
exceeding ninety days. We do not presently have any derivative positions to
hedge our inventory of petroleum products. The following table indicates the
aggregate carrying value of our petroleum products, which are sensitive to
changes in commodity prices, on hand at March 31, 1999 computed at average
costs, net of any lower of cost or market valuation provisions, and the
estimated fair value of such products.
On Balance Sheet Commodity Position
(Dollars in thousands)
As of March 31, 1999
---------------------------------
Carrying Amount Fair Value
--------------- ----------
Petroleum Inventory:
Statia Terminals N.V. $ 1,164 $ 1,410
Statia Terminals Canada 285 285
--------- --------
Total $ 1,449 $ 1,695
========= ========
Except for minor local operating expenses in Canadian dollars and
Netherlands Antilles guilders, all of our transactions are in U.S. dollars.
Therefore, we believe we are not significantly exposed to exchange rate
fluctuations. As all of our present debt obligations carry a fixed rate of
interest, except for the undrawn revolving credit facility which varies with
changes in the lender's prime lending rate, we believe our exposure to interest
rate fluctuations is minimal.
Page 14
<PAGE>
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to the Legal Proceedings section of Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the Company's amended Registration Statement on Form S-1 (File No.
333-72317). There have been no material developments in the Company's legal
proceedings since the amended Registration Statement was filed.
Item 2. Changes in Securities and Use of Proceeds.
Reference is made to the Company's amended Registration Statement on
Form S-1 (File No. 333-72317) for such changes occurring as a result of the
Company's initial public offering of equity which was completed on April 28,
1999.
On April 22, 1999, the U.S. Securities and Exchange Commission declared
the Registration Statement on Form S-1 (File No. 333-72317) of Group effective
for an initial public offering of equity of 7.6 million common shares. The
common shares began trading on the NASDAQ National Market system under the
symbol "STNV" on April 23, 1999. The offering, for which Bear Stearns & Co. Inc.
and Morgan Stanley Dean Witter, among others, acted as the underwriters, closed
on April 28, 1999 at $20.00 per share, yielding gross proceeds of $152 million.
The underwriters may exercise an over-allotment option that would allow them to
purchase an additional 760,000 common shares at $20.00 per share through May 22,
1999.
During the three months ended March 31, 1999, the Company recorded
$764,000 of deferred costs in the line item other noncurrent assets consisting
primarily of legal, accounting and printing costs directly associated with the
offering of which $566,000 has been paid as of March 31, 1999. The total direct
costs of the offering, including underwriters' discounts of $9.9 million, are
expected to total $15.0 million, resulting in net proceeds of $137.0 million to
Group. Approximately $5.2 million of these direct costs will be funded from cash
on hand prior to the offering. To date, net proceeds of the offering totaling
$104.5 million were used primarily to redeem all of Group's outstanding
preferred stock and pay accrued dividends. The remaining net proceeds of
approximately $37.7 million have been invested and will be utilized during the
second quarter of 1999 to redeem or acquire $33.8 million of the 11 3/4%
mortgage notes co-issued by two of Group's subsidiaries.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter has been submitted to a vote of security holders subsequent
to the Company's initial public offering of equity which was completed on April
28, 1999.
Page 15
<PAGE>
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
3.1 Articles of Incorporation of Statia Terminals Group N.V. (for
electronic filing only)
4.1 Fourth Amendment of Indenture and Consent Under Securities
Pledge Agreement, dated April 26, 1999. (for electronic
filing only)
10.1 Amended and restated Employment Agreement effective April 28,
1999, between Statia Terminals Group N.V., Statia Terminals,
Inc. and James G. Cameron. (for electronic filing only)
10.2 Amended and restated Employment Agreement, effective April
28, 1999, between Statia Terminals Group N.V., Statia
Terminals, Inc. and Thomas M. Thompson, Jr. (for electronic
filing only)
10.3 Amended and restated Employment Agreement, effective April
28, 1999, between Statia Terminals Group N.V., Statia
Terminals, Inc. and Robert R. Russo. (for electronic
filing only)
10.4 Amended and restated Employment Agreement, effective April
28, 1999, between Statia Terminals Group N.V., Statia
Terminals, Inc. and Jack R. Pine. (for electronic filing
only)
10.5 Amended and restated Employment Agreement, effective April
28, 1999, between Statia Terminals Group N.V., Statia
Terminals, Inc. and John D. Franklin. (for electronic
filing only)
10.6 Amended and restated Employment Agreement, effective April
28, 1999, between Statia Terminals Group N.V., Statia
Terminals, Inc. and James F. Brenner. (for electronic
filing only)
27.1 Financial Data Schedule for Statia Terminals Group N.V. (for
electronic filing only)
(b) Reports on Form 8-K.
None.
Page 16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Statia Terminals Group N.V.
(Registrant)
Date: May 13, 1999
By: /s/ James G. Cameron
-------------------------------------
James G. Cameron
Director
(As Authorized Officer)
By: /s/ James F. Brenner
-------------------------------------
James F. Brenner
Vice President and Treasurer
(As Authorized Officer and
Principal Finance and Accounting
Officer)
Page S-1
<PAGE>
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
STATIA TERMINALS GROUP N.V.
NAME, SEAT AND DURATION
ARTICLE 1
1.1 Name. The name of the company is: Statia Terminals Group N.V.
1.2 Statutory seat, branches and branch offices. The company has its
statutory seat at Curacao, Netherlands Antilles. The company may have
one or more branches and/or branch offices outside of Curacao,
Netherlands Antilles.
1.3 Transfer of statutory seat. The company may transfer its statutory seat
to another country and assume the status of a legal entity formed under
the laws of that country in accordance with the Netherlands Antilles
Ordinance on transfer of seat to third countries, pursuant to a
resolution to that effect adopted by the Board of Directors (as defined
in of article 10.1 hereof), but only if it deems such transfer of seat
in the best interests of the company.
1.4 Duration. The company has been constituted for an indefinite period of
time.
OBJECTS
ARTICLE 2
2.1 Objects. The objects of the company are to incorporate, participate in,
hold, manage, operate and finance entities, legal or otherwise,
directly or indirectly, belonging to the Statia group of companies
engaged in the business of marine terminaling in St. Eustatius, and
Point Tupper, Nova Scotia, Canada, as well as (a) to participate in any
other venture or company, (b) to invest its assets in securities,
including shares and other certificates of participation and bonds, as
well as other claims for interest bearing debts however denominated,
and (c) to guarantee or otherwise secure, and to transfer in ownership,
to mortgage, pledge or otherwise to encumber assets as security for the
obligations of the company and for the obligations of third parties,
with or without consideration.
2.2 Related activities. The company is entitled to do all that may be
useful or necessary for the attainment of its objects or that is
connected therewith in the widest sense.
<PAGE>
CAPITAL AND SHARES
ARTICLE 3
3.1 Authorized capital (amount). The authorized capital of the company
amounts to Three Hundred Thousand United States Dollars (US
$300,000.00).
3.2 Authorized capital (shares). The authorized capital consists of thirty
million (30,000,000) shares, each with a par value of One United States
Cent (US $0.01), and is divided into twenty million (20,000,000) class
A common shares (the "class A shares" or the "common shares"), seven
million eight hundred thousand (7,800,000) class B subordinated shares
(the "class B shares" or the "subordinated shares"), and two million
two hundred thousand (2,200,000) class C shares (the "class C shares"
or the "incentive shares"). The class A shares shall be numbered A1
through A20.000.000, the class B shares shall be numbered B1 through
B7.800.000, and the class C shares shall be numbered C1 through
C2.200.000. The class A shares and the class B shares have full voting
rights, whilst the class C shares shall be non-voting. At the date of
this amendment (the "Initial Issue Date"), at least twenty percent of
the authorized capital is issued and outstanding in the form of voting
shares with third parties, consisting of at least 7,600,000 common
shares issued in connection with the initial public offering of such
shares at the Initial Issue Date and 3,800,000 subordinated shares.
3.3 Definitions of "shares", "shareholders". In these articles of
incorporation, unless specifically stated otherwise herein, the term
"shares" means class A shares, class B shares and class C shares, and
the term "shareholders" means holders of shares of class A shares,
class B shares and class C shares.
3.4 Repurchase of shares. The company is entitled to repurchase fully paid
up shares in its own capital for valuable consideration, provided that
at all times at least twenty percent of the authorized capital of the
company in the form of voting shares remains outstanding with third
parties.
3.5 Treatment of treasury shares. The company may not derive any rights
from its treasury shares. For the purpose of determining its issued and
outstanding capital, such shares shall not be included as part of such
capital.
3.6 Cancellation of shares. The Board of Directors may, without instruction
or authorization of the General Meeting (as defined in article 13.1
hereof), cancel shares which are in the possession of the company.
1
<PAGE>
FORM OF SHARES; ISSUANCE OF SHARES
ARTICLE 4
4.1 Registered form. The shares shall be issued in registered form only.
4.2 Consideration; fractional shares. Shares shall be issued at or above
par. Fractional shares may be issued. Payments on shares may be made in
cash and/or in kind, and in such currency as the Board of Directors
deems fit.
4.3 Terms and conditions of issuance. Subject to the terms of these
articles of incorporation, shares may be issued at such times, for such
considerations and on such terms as may be established from time to
time by the Board of Directors in its sole discretion without the
approval of the shareholders, except as set forth in the next sentence.
During the Subordination Period (as defined in article 5) with respect
to the subordinated shares, the Board of Directors may not issue (i)
more than 4,000,000 common shares, in addition to the common shares
issued on the Initial Issue Date, excluding any common shares issued
upon any exercise of the overallotment option by one or more
underwriters of the common shares, or (ii) any equity securities
ranking senior to the common shares on distribution of dividends (as
set out in article 17) or on any distribution upon dissolution and
liquidation of the company (as set forth in article 18), without the
approval of the holders of a majority of the outstanding common shares,
not including those common shares held by the holder(s) of incentive
shares and their affiliates, if any. For purposes of the foregoing, an
"affiliate" shall mean a holder of shares of the company that is (i)
directly, or indirectly, through one or more intermediaries controlled
by or under control or "common control" (as such terms are further
described in the United States Securities Exchange Act of 1934) with,
the company including but not limited to, any holder of the
subordinated shares and/or incentive shares at the Initial Issue Date,
or (ii) an officer or director of the company or of an affiliate of the
company.
4.4 Exception to restriction on issuance. The restriction set forth in
article 4.3 on issuance of additional common shares shall, however, not
apply to the following issuances: (a) upon exercise of the
over-allotment option by any underwriter of common shares, (b) upon
conversion of any subordinated shares, (c) pursuant to one or more
employee benefit plans of the company, (d) in the event of a
combination or subdivision of any common shares, or (e) in connection
with an acquisition or capital improvement by or of the company that
would have resulted in an increase in Adjusted Operating Surplus (as
defined in article 17) on a per common share and subordinated share,
pro forma basis for the preceding four-quarter period (or within 365
days of the closing of such an acquisition or the completion of such a
capital improvement and the net proceeds from such issuance are used to
repay debt, if any, incurred in connection therewith).
4.5 Company may not subscribe for shares. When issuing shares, the company
shall not be entitled to subscribe for its own shares.
2
<PAGE>
4.6 Pre-emption. No shareholder shall have any right of pre-emption in
connection with any issuance of shares in the capital of the company or
other equity securities that may be issued by the company.
CLASS B CONVERSION
ARTICLE 5
5.1 Class B shares conversion - general. If, at any time during or after
the Subordination Period (as defined below), any subordinated shares
are outstanding, all of such subordinated shares will convert into
common shares in the manner set forth in this article: (i) if the tests
for ending subordination (as set out below) have been met for any
quarter ending on or after June 30, 2002, one quarter of the aggregate
number of subordinated shares outstanding on the Initial Issue Date
(being 950,000 subordinated shares) will convert into common shares and
(ii) if the tests for ending subordination have been met for any
quarter ending on or after June 30, 2003, an additional quarter of the
aggregate number of subordinated shares outstanding on the Initial
Issue Date (being 950,000 subordinated shares) will convert into common
shares, provided that such conversion of the second one-quarter of the
subordinated shares may not occur until at least one calendar year
following the conversion of the first one-quarter of the subordinated
shares as described above. The Board of Directors shall for the purpose
of such conversion be authorized in its sole discretion to take any and
all necessary steps in connection therewith, including, without
limitation, the determination of the applicable shares, numbered from
B1 onwards representing a quarter of all outstanding subordinated
shares, at each time of a conversion. For the purpose hereof, the
"Subordination Period" shall mean the period from the Initial Issue
Date until the tests set forth below in (a) through (c), inclusive,
have been met for any quarter ending on or after June 30, 2004 for
which:
(a) distributions (in the form of dividends or otherwise) of
Available Cash from Operating Surplus (as such terms are
defined in article 17) on the common and subordinated shares
with respect to each of the three consecutive non-overlapping
four-quarter periods immediately preceding the date of
determination that equaled or exceeded the sum of the Target
Quarterly Distribution (as defined in article 17) on all of
the outstanding common and subordinated shares during such
periods;
3
<PAGE>
(b) the Adjusted Operating Surplus generated by the company during
each of the three consecutive non-overlapping four-quarter
periods immediately preceding the date of determination
equaled or exceeded the sum of the Target Quarterly
Distribution on all of the common and subordinated shares that
were outstanding on a fully diluted basis (i.e. after assuming
the exercise of all warrants, vested stock options and
conversion of subordinated shares) during those periods; and
(c) there are no outstanding Common Share Arrearages (as defined
in article 17).
For purpose of the determination of any conversion as set out above for
any quarter (as further described above), the tests for ending
subordination shall be met for any quarter for which:
(d) distributions (in the form of dividends or otherwise) of
Available Cash from Operating Surplus on the common and
subordinated shares with respect to each of the three
consecutive non-overlapping four-quarter periods immediately
preceding the date of determination equaled or exceeded the
sum of the Target Quarterly Distribution on all the
outstanding common and subordinated shares during such
periods;
(e) the Adjusted Operating Surplus generated by the company during
each of the three consecutive non-overlapping four-quarter
periods immediately preceding the date of determination
equaled or exceeded the sum of the Target Quarterly
Distribution on all of the common and subordinated shares that
were outstanding on a fully diluted basis during those
periods; and
(f) there are no outstanding Common Share Arrearages.
5.2 Conversion of subordinated shares on expiration of the Subordination
Period. Upon the expiration of the Subordination Period all outstanding
subordinated shares will convert into common shares. Subject to
paragraph 1 of this article, in each conversion, the relevant
subordinated shares outstanding will convert on a one-for-one basis,
into common shares, and will thereafter participate, among other
things, pro rata with the other common shares then outstanding in
distributions (in the form of dividends or otherwise) of Available Cash
with due observance of the dividend and other distribution rights of
the holders of incentive shares (as described in article 17) in
Available Cash.
4
<PAGE>
5.3 Effect of surrender and conversion. Upon conversion of the appropriate
number of subordinated shares in accordance with the foregoing
provisions, the Board of Directors may upon request, issue one or more
share certificates representing the common shares upon conversion of
the subordinated shares, all in accordance with the provisions of
article 6 of these articles of incorporation. All rights relating to
the subordinated shares converted into common shares shall cease and
such subordinated shares shall no longer be outstanding.
SHARE CERTIFICATES FOR SHARES
ARTICLE 6
6.1 Share certificates. Share certificates may be issued for shares.
6.2 Number of shares represented by certificates. Share certificates may be
issued to represent more than one share, or, in the event of the
issuance of a (temporary) global share certificate representing all
common shares issued and outstanding at the Initial Issue Date. If
shares held by a shareholder are represented by one share certificate,
and if such shareholder disposes of part of his or her shares, such
shareholder shall be entitled to request the issuance of a share
certificate representing such shareholder's remaining shares.
6.3 Form and manner of issuance. Share certificates, if any, which shall
include duplicates of share certificates as referred to in article 7
hereof, shall be issued and signed on behalf of the company by or on
behalf of the Board of Directors or by one or more persons or entities
appointed as transfer agent and/or registrar. All costs and expenses of
the company associated with the issuance of share certificates
(including any duplicates) at the request of a shareholder, may be
charged to such requesting shareholder, unless provided otherwise in
these articles of incorporation. Share certificates shall bear such
legend or legends as the Board of Directors deems fit and appropriate
in connection with the issuance of shares or restrictions on transfer
of shares. The reverse side of any certificates issued shall contain a
printed form of an instrument of transfer that can be used by the
holders of the shares represented by such certificates to transfer such
shares, or a portion thereof, to a transferee, which may include the
company in accordance with the provisions of these articles of
incorporation.
5
<PAGE>
LOST AND MUTILATED CERTIFICATES
ARTICLE 7
Lost and mutilated share certificates. If any shareholder can prove to
the satisfaction of the Board of Directors or any transfer agent or
registrar of the company, that any share certificate has been
mutilated, mislaid or destroyed, then, at such shareholder's written
request, a duplicate may be issued by the Board of Directors or any
transfer agent or registrar of the company on such terms and conditions
as the Board of Directors may deem fit. Upon the issuance of the
duplicate share certificate (on which it shall be noted that such
certificate is a duplicate), the original share certificate shall be
null and void vis-a-vis the company. A mutilated share certificate may
be exchanged for a duplicate certificate upon delivery of the mutilated
certificate to the Board of Directors or any transfer agent or
registrar of the company.
SHAREHOLDERS REGISTER; TRANSFER OF SHARES; NOTICES
ARTICLE 8
8.1 Shareholders register. The Board of Directors, or registrar or transfer
agent designated pursuant to article 8.5, shall keep a shareholders
register (the "Register") in which the names and addresses of all
shareholders shall be registered, along with the shares issued to, and
the payment thereon by, the shareholders. The Board of Directors shall
regularly maintain the Register, including the registration in the
Register of any issue, transfer and cancellation of shares.
8.2 Registration of other persons. The Board of Directors shall also
register in the Register the names and addresses of those persons who
have a right of usufruct (vruchtgebruik) or pledge (pand) on the
shares.
8.3 Addresses to be furnished, etc. Each shareholder, and holder of a right
of usufruct or pledge on shares is required to provide his or her
address to the company. The company shall be entitled for all purposes
to rely on the name and address of the aforementioned persons as
entered in the Register. Such person may at any time change his or her
address as entered in the Register by means of a written notification
to the company at its principal office, or any transfer agent or
registrar of the company.
8.4 Access to register. At the request of a shareholder, or a holder of a
right of usufruct or pledge on shares, the Board of Directors shall
furnish an extract of the Register, free of charge, insofar as it
relates to such person's interest in a share.
8.5 Location of register. The Register shall be kept by the Board of
Directors at the company's principal office, or by a registrar or
transfer agent designated thereto by the Board of Directors at such
other location as it may deem fit. In case the Register is kept at any
location other than the company's principal office, then the registrar
or transfer agent shall be obligated to send to the principal office of
the company a copy thereof from time to time. In case a registrar or
transfer agent is appointed by the Board of Directors, then such
registrar or transfer agent shall
6
<PAGE>
be authorized and, as the case may be, obligated to exercise the rights
and fulfill the obligations set out in this article with respect to the
Register.
8.6 Transfer of shares--general. With due observance of the provisions of
article 9 hereof, the transfer of shares, including any limited rights
thereon, shall be effected (i) by serving upon the company in the
manner prescribed by law, an instrument of transfer, or (ii) by written
acknowledgment by the company of the transfer, which acknowledgment
shall be signed on behalf of the company by or on behalf of the Board
of Directors or by the registrar or transfer agent of the company. In
case a share certificate is outstanding, the written acknowledgment by
the company of the transfer of a share, including any limited rights
thereon, can only be made by an endorsement of the transfer on such
share certificate. In that case, the transferor or transferee of a
share shall present such share certificate to the company, or its
registrar or transfer agent, for acknowledgment of the transfer on
behalf of the company to be made thereon. In case no share certificate
has been issued, the registration of the transfer of a share in the
Register shall have the effect of a written acknowledgment by the
company of such transfer of a share. This paragraph shall also apply in
the case of an allocation of shares resulting from a division and
partition of any community property.
8.7 Certain repurchase procedures. With due observance of article 3.4
hereof, in case of any repurchase of shares by the company, the holder
shall surrender each certificate or certificates representing such
shares, if any, to the company in the manner and at a place designated
therefor by the company, with the reverse side of the certificate or
certificates duly executed for the purpose of the transfer of such
shares to the company. Such manner shall include personal delivery,
registered mail or overnight delivery service of recognized standing.
8.8 Effect of surrender and repurchase. Upon surrender of the shares for
repurchase by the company, each surrendered certificate shall be
canceled, all rights of the holders of such shares as such shall cease
with respect to such shares, and such shares shall no longer be deemed
to be outstanding for any purpose whatsoever.
7
<PAGE>
8.9 Transfer of shares--assignment of voting rights of common shares. If a
common share is encumbered with a right of usufruct or pledge, then the
voting right of such common share, can not be assigned to the holder of
the right of usufruct or pledge.
PROHIBITED OWNERSHIP/RESTRICTION ON TRANSFER
ARTICLE 9
9.1 Prohibition on percentage of ownership - general. Primarily to prevent
the company from becoming, or minimize the duration of its
classification as, a "controlled foreign corporation" or "CFC" (as
defined below) and also to prevent any ownership or transfer of the
common shares which may result in such a classification, the ownership
by a holder of common shares, directly, indirectly, actually or
constructively (within the meaning of section 958 of the United States
Internal Revenue Code of 1986, as amended (the "Code")), of more than
9.9% of all of the common and subordinated shares issued and
outstanding (the "Ownership Limit") is prohibited, except as otherwise
provided in this article 9 below. For the purpose of the foregoing
Ownership Limit, ownership of common shares and/or subordinated shares
shall be understood to include the holding of voting rights or voting
power relating to such shares by law, agreement or otherwise, in
whatever form.
9.2 Restriction on transfer. In order to further the purposes set forth in
article 9.1, any sale, transfer, or other disposition of any common
shares by a holder of common shares (a "Sale") or any other event
relating to any common shares held by such a holder that would result
in a Violation of the Ownership Limit (as defined below) is null and
void to the extent it causes a Violation of the Ownership Limit. The
restriction in the preceding sentence shall not apply to and the
definition of the term "Sale" does not include (i) the conversion of
subordinated shares into common shares, (ii) any subsequent transfer of
the common shares resulting from such conversion, (iii) any pledge,
encumbrance, transfer by operation of law, gift, inheritance or marital
law of any interest in or right to any common shares, as well as any
sale, transfer, or other disposition (other than a Sale) of any
beneficial, as opposed to legal (registered) interest in or right to
any common shares, or (iv) acquisition of any common shares pursuant to
the exercise of compensatory stock options or to an employee benefit
plan of the company or its subsidiaries or affiliates or any subsequent
transfer of any such common shares.
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9.3 Definition CFC - ownership limit. For purposes of this article, a
non-United States corporation will be classified as a "controlled
foreign corporation" or "CFC" for United States federal income tax
purposes in any taxable year of such corporation in which more than 50%
of either (i) the total combined voting power of all of its classes of
stock entitled to vote or (ii) the total value of its stock is owned or
considered owned (after applying certain attribution rules), on any day
during a taxable year, by United States persons (as such term is
defined in Section 7701 (a) (30) of the Code) who own or are considered
to own 10% or more of the total combined voting power of all of its
classes of stock entitled to vote. For purposes of this article, a
"Violation of the Ownership Limit" occurs when (1) any person would own
or would be considered to own by virtue of the attribution provisions
of section 958 of the Code and the United States Treasury Regulations
issued thereunder, or (2) any person together with its "affiliates" and
"associates" (as defined in Rule 12b-2 under the United States
Securities Exchange Act of 1934) and any group (within the meaning of
Section 13(d)(3) of such Securities Exchange Act) of which such person
is a part would own or would be considered to own by virtue of the
beneficial ownership provisions of Rule 13d-3 under such Securities
Exchange Act, in either case more than the Ownership Limit.
9.4 Prohibition on ownership and/or transfers other than by Sale. With due
observance of the provisions of foregoing paragraphs of this article,
including the restrictions contained therein, any pledge, encumbrance,
transfer by operation of law, gift, inheritance or marital law of any
legal (registered) or beneficial interest in or right to any common
shares, as well as any sale, transfer, or other disposition (other than
a Sale) of any beneficial, as opposed to any interest in or right to
any common shares (other than the conversion of subordinated shares
into common shares, any subsequent transfer of the common shares
resulting from such conversion or the acquisition of any common shares
pursuant to the exercise of compensatory stock options or to an
employee benefit plan of the company or its subsidiaries or affiliates
or any subsequent transfer of any such common shares) (a "Gift") that
would result in a Violation of the Ownership Limit is prohibited to the
extent that such Gift causes a Violation of the Ownership Limit.
9.5 Waiver/declaration of non-applicability. The restrictions on transfer
and ownership described in this article may be waived, or declared not
applicable, and an exemption may be granted from time to time by the
Board of Directors, in its sole discretion, provided the same is
irrevocable with respect to a Transfer (as defined in article 9.6
below) or any other event described in this article relating to
ownership by a holder of common shares above the Ownership Limit. The
Board of Directors may, in its sole discretion set the terms and
conditions for the issuance of such waiver, declaration of
non-applicability and/or exemption.
9.6 Restrictive measures for benefit of the company. In order for the
company to determine, or verify compliance with the restrictions set
out above in this article, the following shall apply: (a) any person
who acquires or attempts or intends to acquire ownership (direct,
indirect, actual or constructive ownership within the meaning of
section 958 of the Code) of common shares that will or may violate the
foregoing restrictions on transferability and
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ownership is required to give notice immediately to the company thereof
and to provide the company and the Board of Directors with such other
reasonable information as it may request in order to determine the
effect of a Sale, Gift (a Sale and/or a Gift to be referred to as a
"Transfer") or event on the classification of the company as a CFC or
for any other related purpose, (b) the company shall not recognize a
person in the capacity as shareholder of common shares until its common
shares have been issued in the name of such person (or in the case of a
Transfer, until the common shares so transferred have been registered
by or on behalf of the Board of Directors in the name of such
transferee in the register); until such recognition by or on behalf of
the company in the manner as aforementioned, the voting rights,
dividend rights and/or other distribution rights relating to such
shares shall be suspended and may not be exercised by the purported
holder thereof, (c) upon the occurrence of a Gift resulting in a
Violation of the Ownership Limit, the acquiror or transferee shall be
required to dispose of the number of common shares that exceeds the
Ownership Limit (the "Excess Common Shares") to a person whose
ownership of any such shares would not violate the Ownership Limit (a
"Qualified Person") within 15 days of the date of the prohibited Gift.
The acquiror or transferee of Excess Common Shares pursuant to a
prohibited Gift (the "Prohibited Transferee") shall be required to
notify the company in writing of its compliance with the requirement in
the preceding sentence within 5 days of any such compliance (a
"Compliance Notice"). If the Prohibited Transferee fails to provide
such a Compliance Notice to the company within 20 days of the date of
the prohibited Gift, the company shall be irrevocably and exclusively
authorized to sell and transfer on behalf of the Prohibited Transferee
the Excess Common Shares to a Qualified Person, at a price for such
shares of no less than the fair market value and to take all necessary
steps in connection therewith. In the event of a Gift, the acquiror or
transferee shall by acceptance or receipt of the relevant share
certificate(s), if any, representing any Excess Common Shares be deemed
to have agreed to the foregoing provisions set out in (c) above.
9.7 Notices, etc. Notices and other communications provided for herein
shall be in writing, shall be delivered by hand or overnight courier
services of recognized standing or sent by telecopy, shall be deemed
given when actually received and shall be addressed as follows: if to a
shareholder's address, as shown in the Register of the company; and if
to the company, to the company's principal office or its registered
agent, attention: Secretary.
9.8 Applicability on issue of common shares or subordinated shares. For the
purpose of this article, acquisition by holders of common shares of
common shares or subordinated shares by virtue of an issue or
distribution of such shares to a holder of common shares shall be
equated to a transfer; for the purposes of determining the amount of
the issued capital, the shares to be issued or distributed shall be
included therein.
MANAGEMENT
ARTICLE 10
10.1 Board of directors--general. The management of all the affairs,
property and business of the company shall be vested in a Board of
Directors (the "Board of Directors"), who shall
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have and may exercise all powers except such as are exclusively
conferred upon the shareholders by law or by these articles of
incorporation, as from time to time amended.
10.2 Board of directors--number of members/class of members. The number of
persons constituting the Board of Directors shall be not less than
three or more than fifteen, as fixed from time to time by the General
Meeting. The number of persons constituting the Board of Directors
shall, until changed at any succeeding General Meeting, be the number
so fixed. The Board of Directors shall be divided into three classes,
being class A directors (the "A director(s)"), class B directors (the
"B director(s)") and class C directors (the "C director (s)"), the
designation of which shall be determined by the General Meeting. Each
director shall be so designated by the General Meeting upon appointment
or reappointment, as the case may be, in case of a vacancy (as defined
in article 10.4).
10.3 Board of directors--term. Each director shall serve, subject to the
provisions of this article 10.6, as director, with due observance of
the following terms: the A directors shall initially serve - as of the
Initial Issue Date - for a period of two years, and thereafter for
six-year periods; the B directors shall initially serve - as of the
Initial Issue Date - for a period of four years, and thereafter for
six-year periods; and the C directors shall serve - as of the Initial
Issue Date - for six-year periods.
10.4 Board of directors--appointment. Each director shall be appointed by
the General Meeting, with due observance of the following provisions.
In case of a vacancy, upon the expiration of a director's term or
otherwise (each, a "vacancy"), the Board of Directors shall be
authorized pursuant to a duly adopted resolution to nominate for such
vacancy a director for appointment by the General Meeting. Such Board
of Directors' resolution shall list at least two names for each such
vacancy, which may include a former director whose term has lapsed. The
resolutions to nominate directors shall be non-binding on the General
Meeting; the General Meeting is free to appoint, by a duly adopted
shareholders resolution in accordance with the provisions of article
14.8, the directors so nominated, or reject nomination. In case the
nominated director(s) are not appointed by the General Meeting, the
Board of Directors must convene within seven days of the date of the
General Meeting, a new meeting, with due observance of the provision of
article 14 below, at which the vacancy or vacancies shall be filled. At
such subsequent General Meeting, the Board of Directors may, again,
nominate - by non-binding resolution - two directors for each such
vacancy for appointment by the General Meeting. Notwithstanding the
foregoing sentence, at such subsequent General Meeting, the
shareholders shall be free to appoint any person or entity for each
vacancy as they deem fit upon rejection of the persons nominated by the
Board of Directors. In the event the Board of Directors wishes to
exercise its right to nominate directors, it shall in the convening of
a General Meeting to appoint directors state the persons so nominated
for each such vacancy by the Board of Directors.
10.5 Board of directors--vacancies in general. If one or more directors are
prevented from or are incapable of acting as a director, the remaining
directors may appoint one or more persons to fill such vacancy or
vacancies with the same qualifications, if any, as determined
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by the General Meeting to serve until the immediately following General
Meeting.
10.6 Board of directors--removal. Directors may be removed or suspended at
any time by the General Meeting. At any General Meeting at which action
is taken to remove a director, or at any subsequent General Meeting,
any vacancy or vacancies created by such action may be filled with due
observance of article 10.2.
10.7 Board of directors--vacancies in connection with certain reductions. If
at any time the number of directors in office shall be reduced to less
than three, the remaining director(s) shall forthwith call and convene
a General Meeting for the purpose of filling the vacancies in the Board
of Directors, and in the event that all of the directors are prevented
from or are incapable of acting as directors, the company shall be
temporarily managed by any person or persons previously appointed by
the General Meeting to so act, who in turn shall forthwith call and
convene a General Meeting for the purpose of appointing three or more
directors. If no such General Meeting shall be called, or if no such
person shall have been appointed, any person or persons holding in the
aggregate at least ten percent of the issued and outstanding voting
shares may call and convene a General Meeting for the purpose of
appointing the directors.
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10.8 Board of directors--meetings/notice. Meetings of the Board of Directors
shall be held regularly at such place and at such time as the Board of
Directors may from time to time determine. Special meetings of the
Board of Directors shall be held as often as any two directors or the
Chairman deems necessary, who shall be authorized to call the same.
Notice of the time and place of a meeting of the Board of Directors
shall be given:
(a) not less than ninety-six hours before such meeting, by written
notice mailed to each director, or
(b) not later than the day immediately preceding the date of such
meeting, by personal delivery, or by telephone call or by
sending a telegram or telefax or other means of written
notification to each director, receipt of which has been
confirmed.
A waiver of notice of any meeting of the Board of Directors signed by
all of the non attending directors, whether before, at, or after the
time of such meeting, shall be deemed equivalent to notice of the
meeting. If all the directors are present at the meeting, notice shall
be deemed to have been duly given.
10.9 Board of directors--quorum. A majority of the members of the Board of
Directors shall constitute a quorum. The resolution of the majority of
the directors present, in person or by proxy as hereinafter provided,
at a meeting at which a quorum is so present, shall constitute the
decision of the Board of Directors. In the absence of a quorum, any
director may adjourn any meeting from time to time until a quorum shall
be present.
10.10 Board of directors--adoption of resolutions. All resolutions to be
adopted at a meeting of the Board of Directors shall be adopted by
majority of the votes cast, provided that in the event of an equality
of votes, the vote(s) cast by the Chairman shall be decisive.
10.11 Board of directors--meetings by telephone, etc. Meetings of the Board
of Directors may be held through conference telephone calls or other
communication equipment allowing all persons participating in the
meeting to hear each other or through any other device permitted by
law, and participation in a meeting through any such lawful device or
arrangement shall constitute presence at such meeting.
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10.12 Board of directors--action by written consent. When action by the Board
of Directors is required or permitted to be taken, action at a meeting
may be dispensed with if all the directors shall consent in writing to
such action taken or being taken.
10.13 Board of directors--proxies. Directors may by telegram, telefax or
other written instrument appoint a proxy to act on their behalf at any
designated meeting or meetings of the Board of Directors. Such proxy
can only be another director of the company.
10.14 Committees of the Board of Directors. The Board of Directors shall have
the power and authority to create and disband committees of the Board
of Directors, and each such committee shall have the authority and
power as may from time to time be delegated to it by the Board of
Directors and shall operate under the ultimate responsibility of the
Board of Directors.
OFFICERS AND REPRESENTATIVES
ARTICLE 11
11.1 Chairman and other officers and agents. The Board of Directors may
designate a Chairman (the "Chairman") from among the directors. The
Board of Directors may further from time to time elect a president, one
or more vice-presidents (including executive or senior
vice-presidents), a controller, one or more assistant controllers, a
treasurer, one or more assistant treasurers, a secretary, one or more
assistant secretaries and any such other officers and agents as it
determines proper, all of whom shall hold office at the pleasure of the
Board of Directors. The same person may hold any two or more of the
aforesaid offices but no officer shall execute, acknowledge or verify
an instrument in more than one capacity if such instrument is required
by law or by these articles of incorporation to be executed,
acknowledged or verified by two or more officers. The Chairman must be
a director, but the other officers of the company need not be members
of the Board of Directors.
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11.2 Representation of the company. The company shall be represented at law
and otherwise, and shall be bound with respect to third parties, by (i)
any two directors acting jointly, (ii) any director together with any
of the following persons listed in (i) through (vi) below, acting
jointly, or (iii) any two of the following persons acting jointly,
provided such persons are authorized by the Board of Directors to
represent the company with the following titles:
(i) Chairman;
(ii) president;
(iii) vice-presidents (including any executive vice-presidents or
senior vice-presidents);
(iv) treasurer or assistant treasurer;
(v) officer;
(vi) secretary or assistant secretary;
(vi) controller or assistant controller.
The Board of Directors may also from time to time authorize other
persons, who may or may not be directors, to represent the company, who
shall have such other titles as the Board of Directors may determine,
provided that at all times any two of such persons can only represent
the company acting jointly.
11.3 Additional power and authority of representatives. The persons holding
the above mentioned titles which the Board of Directors may from time
to time authorize as herein provided, shall have such power and
authority as the Board of Directors may from time to time grant each of
them respectively.
11.4 Additional rules and regulations. The Board of Directors may adopt and
may amend and repeal such rules, regulations and resolutions as it may
deem appropriate for the conduct of the affairs and the management of
the company, including rules, regulations and resolutions setting forth
the specific powers and duties of the holders of the above-mentioned
titles (not being directors of the company), other persons and
committees of the Board of Directors authorized by the Board of
Directors to represent the company. Such rules, regulations and
resolutions must be consistent with these articles of incorporation.
Any restrictions of the powers of representation of the holders of the
above-mentioned titles (other than any director) will take effect on
the day after the resolutions, rules or regulations containing such
restrictions have been filed at the Commercial Register of the Chamber
of Commerce and Industry in Curacao, and such other places in the
Netherlands Antilles where the company conducts its business.
11.5 Compensation of representatives. The directors, the holders of the
above-mentioned titles
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and any other persons authorized by the Board of Directors to represent
the company shall receive such compensation as the General Meeting (in
the case of the directors) may from time to time determine or approve
and the Board of Directors (in the case of all other persons not being
directors) may from time to time determine.
INDEMNIFICATION, ADVANCEMENT OF EXPENSES AND INSURANCE
ARTICLE 12
12.1 Indemnification not in connection with actions by or in right of the
company. The company shall have the power to indemnify, and shall
indemnify to the fullest extent permitted by applicable law, any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the company) by reason of the fact that such
person is or was a director, officer, employee or agent of the company,
or is or was serving at the request of the company as a director,
officer, employee or agent of another company, partnership, joint
venture, trust or other enterprise or entity, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if he acted in good
faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the company and with respect to any
criminal action or proceeding, had no reasonable cause to believe that
its conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which was reasonably believed to be in or not opposed to the best
interests of the company.
12.2 Indemnification in connection with actions by or in right of the
company. The company shall have the power to indemnify, and shall
indemnify to the fullest extent permitted by applicable law, any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of
the company to procure a judgment in its favor by reason of the fact
that such person is or was a director, officer, employee or agent of
the company or is or was serving at the request of the company as a
director, officer, employee or agent of another company, partnership,
joint venture, trust or other enterprise or entity, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the company and except
that no indemnification shall be made in respect of any claim, issue or
matters as to which such person shall have been finally adjudged to be
liable to the company for improper conduct unless and only to the
extent that the court in which such action or suit was brought or any
other court having appropriate jurisdiction shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses, judgments, fines and amounts
paid in settlement which the court in which the action or suit was
brought
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or such other court having appropriate jurisdiction shall deem proper.
12.3 Related expenses. To the extent that a director, officer, employee or
agent of the company has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in article 12.1
and 12.2, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection
therewith.
12.4 Certain limitations on indemnification. Any indemnification under
article 12.1 and 12.2 (unless ordered by a court) shall be made by the
company only as authorized by contract approved, or resolution or other
action adopted or taken, by the Board of Directors or by the
shareholders.
12.5 Advancement of expenses. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the company in
advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of the applicable
director, officer, employee or agent to repay such amount if it shall
ultimately be determined that such person is not entitled to be
indemnified by the company as authorized by this article 12.
12.6 Indemnification and advancement of expenses not exclusive. The
indemnification and advancement of expenses provided by or granted
pursuant to the other paragraphs of this article 12 shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any law, agreement, vote
of shareholders or disinterested directors, or otherwise, both as to
action in its official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
12.7 Insurance. The company shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the company or is or was serving at the request of
the company as a director, officer, employee or agent of another
company, partnership, joint venture, trust or other enterprise against
any liability asserted against him or her and incurred by him or her in
any such capacity, or arising out of his or her status as such, whether
or not the company would have the power to indemnify him or her against
such liability under the provisions of this article 12.
GENERAL MEETINGS OF SHAREHOLDERS
ARTICLE 13
13.1 General. All general meetings of shareholders (each, a "General
Meeting") shall be held on any one of the Islands of the Netherlands
Antilles.
13.2 Timing. The annual General Meeting shall be held as early as reasonably
practicable, and in any event not later than the first day of June,
after the close of the company's preceding
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financial year.
13.3 Actions to be taken. At the annual General Meeting:
a. the Board of Directors shall render a report on the business
of the company and the conduct of its affairs during the
preceding financial year;
b. the balance sheet and the profit and loss account shall be
determined, set and adopted after having been submitted
together with an explanatory statement (together, the "annual
accounts"), stating by which standards the movable and
immovable property of the company have been appraised;
c. the person or persons referred to in paragraph 5 of article 10
hereof shall be appointed;
d. the appropriation of profits shall be made; and
e. such other proposals included in the agenda specified in the
notice of the meeting shall be dealt with.
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GENERAL MEETINGS--PLACE, CONVOCATION AND VOTING
ARTICLE 14
14.1 Timing of other General Meetings. Other than the annual General
Meeting, all General Meetings shall be held as often as the Board of
Directors shall deem necessary.
14.2 Convening by Board of Directors. With due observance of article 14.3,
all General Meetings shall be exclusively convened by the Board of
Directors.
14.3 Request by shareholders to convene. Shareholders representing in the
aggregate at least one tenth of the outstanding capital of the company
may request the Board of Directors to convene a General Meeting,
stating the subjects to be discussed. If the Board of Directors has not
convened a meeting within four weeks after the request, the person(s)
who requested the convening of the meeting shall be authorized to
petition the competent courts of the Netherlands Antilles for
authorization to convene such meeting, but only in accordance with, and
subject to, the provisions of Article 82 of the Commercial Code of the
Netherlands Antilles. A copy of the notice to convene such meeting
shall be sent to the company at its principal office, and shall be
given to the Board of Directors.
14.4 Method of convocation and notification. All convocations of General
Meetings and all notifications to shareholders shall be made by letter
mailed to the addresses of shareholders appearing in the Register.
14.5 Timing of convocation -record date. The convocation shall take place no
later than ten days prior to the date of the meeting, excluding the
date of the sending of the notice and the date of the meeting. The
Board of Directors may set a record date for any General Meeting which
shall be no less than seven days and no more than sixty days prior to
the date of the meeting, to verify the eligibility of shareholders to
vote, as well as to verify the ownership level of any shareholders
under the provisions of article 9 of these articles of incorporation.
14.6 Agenda. The agenda for the meeting shall be specified in the
convocation of the meeting or it shall be stated that the shareholders
may take cognizance thereof at the principal office of the company.
14.7 Person presiding. General meetings shall be presided over by the
Chairman or any other director, or, in their absence at such meeting,
by a person designated thereto by the meeting.
14.8 Majority votes - quorum. All resolutions of General Meetings shall be
taken by an absolute majority of votes, for which meeting a quorum
exists of at least one-third of the aggregate outstanding voting shares
in the capital of the company present or represented thereat, except
where otherwise provided in these articles of incorporation.
14.9 Proxies. Shareholders may be represented at the meeting by a proxy
authorized in writing,
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which shall include any message transmitted by telegram or telefax or
other means of written communication.
14.10 Vote per share. At a General Meeting, one vote may be cast for each
class A share and one vote may be cast for each class B share. Holders
of class C shares shall not be entitled to vote, other than in the case
of, and subject to the provisions of, Article 93a of the Commercial
Code of the Netherlands Antilles, in which case one vote may be cast
for each class C share.
14.11 Interested votes; abstentions and invalidly cast votes. Valid votes may
also be cast for the shares of those who, other than as shareholders of
the company, would acquire any right or be discharged from any
obligation towards the company by the resolution to be adopted.
Abstentions and invalidly cast votes shall not be counted as votes at a
General Meeting.
14.12 Validity of certain resolutions as a result of unanimous actions.
Provided and as long as the entire issued share capital is represented
at any General Meeting, valid resolutions may be adopted, even when the
provisions of these articles of incorporation with respect to
convocation and specification of the agenda have not or have only
partially been observed, provided that such resolutions are unanimously
adopted.
14.13 Participations of directors. Each director shall in his or her capacity
be entitled to attend, address and advise the General Meeting.
FINANCIAL YEAR
ARTICLE 15
Term of financial year. The financial year of the company shall run
from the first day of January of each year up to and including the last
day of December of such year.
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ANNUAL ACCOUNTS; BOOKS AND RECORDS
ARTICLE 16
16.1 Annual accounts--timing and manner of submission. Within five (5)
months after the close of the company's financial year, the annual
accounts shall be submitted to the shareholders by the Board of
Directors. Each director shall sign the annual accounts; if the
signature of any director is lacking, then this shall be stated therein
together with the reason thereof.
16.2 Maintenance of books and records and annual accounts. The company shall
maintain its books and records, as well as the annual accounts by which
the profit is determined, on the basis of generally accepted accounting
principles in effect in the United States of America ("US GAAP").
16.3 Annual accounts--adoption by annual General Meeting. The annual
accounts shall be adopted by the annual General Meeting.
DEFINITIONS/ GENERAL PROVISION ON PROFIT AND RESERVES;
PAYMENT OF MINIMUM QUARTERLY DISTRIBUTION
AND OTHER AMOUNTS TO SHAREHOLDERS
ARTICLE 17
17.1 Definitions. For the purpose of the payment by the company of
distributions on its shares by dividend or otherwise, the following
definitions are used. For purposes of this article 17, for accounting
purposes and otherwise, the term "company" shall be deemed to include
Statia Terminals Group N.V. and its subsidiaries on a consolidated
basis in accordance with U.S. GAAP.
(i) Acquisition: Acquisition manes any transaction in which the company
acquires (through an asset acquisition, merger, stock acquisition or
other form of investment) control over all or a portion of the assets,
properties or business of another person for the purpose of increasing
the operating capacity or revenues of the company over the operating
capacity or revenues of the company existing immediately prior to such
transaction.
(ii) Adjusted Operating Surplus: For any period, Adjusted Operating
Surplus means:
(1) the Operating Surplus generated during that period,
as adjusted to:
(a) decrease Operating Surplus by:
(1) any net increase in Working Capital Borrowings during that
period, and
(2) any net reduction in cash reserves for Operating Expenditures
during that period not relating to an Operating Expenditure
made during that period; and
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(b) increase Operating Surplus by:
(1) any net decrease in Working Capital Borrowings during that
period, and
(2) any net increase in cash reserves for Operating Expenditures
during that period required by any debt instrument for the
repayment of principal, interest or premium.
Adjusted Operating Surplus does not include that portion of Operating
Surplus included in clause (a) (1) of the definition of Operating
Surplus.
(iii) Available Cash: For any calendar quarter prior to the dissolution
and liquidation of the company, Available Cash means:
(a) the sum of:
(1) all of the company's cash and cash equivalents on
hand at the end of that quarter, and
(2) all of the company's additional cash and cash
equivalents on hand on the date of determination of
Available Cash for that quarter resulting from
Working Capital Borrowings made after the end of that
quarter;
less
(b) the amount of any cash reserves necessary or appropriate in
the reasonable discretion of the Board of Directors to:
(1) provide for the proper conduct of the company's
business, including reserves for future capital
expenditures and for the company's anticipated future
credit needs, after that quarter,
(2) provide funds for Target Quarterly Distributions
and cumulative Common Share Arrearages (as defined
below) for any one or more of the next four quarters,
or
(3) comply with applicable law or any loan agreement,
security agreement, mortgage, debt instrument or
other agreement or obligation to which the company is
a party or by which the company or any of its
subsidiaries is bound or to which any of their
respective assets are subject.
With respect to Available Cash, the Board of Directors may not
establish cash reserves pursuant to (b) (2) above if the effect of
those reserves would be that the company is unable to distribute the
Target Quarterly Distribution on all common shares, plus any cumulative
Common Share Arrearage for that quarter; and disbursements made by the
company or cash
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reserves established, increased or reduced after the end of that
quarter but on or before the date of determination of Available Cash
for that quarter shall be deemed to have been made, established,
increased or reduced for purposes of determining Available Cash within
that quarter if the Board of Directors so determines. However,
Available Cash for the quarter in which the dissolution and liquidation
of the company occurs and any quarter after that will equal zero.
(iv) Capital Improvements: Additions or improvements to the capital
assets owned by the company or the acquisition of existing, or the
construction of new, capital assets (including terminaling and storage
facilities and related assets), in each case made to increase the
operating capacity or revenue of the Company existing immediately prior
to such addition, improvement, acquisition or construction.
(v) Common Share Arrearages: Common Share Arrearages means the amount
by which the Target Quarterly Distribution in any quarter during the
Subordination Period exceeds the distribution of Available Cash from
Operating Surplus actually made for that quarter on all common shares
issued and outstanding on or after the Initial Issue Date, cumulative
for that quarter and all prior quarters during the Subordination
Period; provided that the Common Share Arrearages will not accrue
interest.
(vi) Interim Capital Transactions: The following transactions, if they
occur prior to the dissolution and liquidation of the company, are
Interim Capital Transactions:
(i) any of the company's borrowings, refinancings of indebtedness
and sales of debt securities (other than Working Capital
Borrowings and other than for items purchased on open account
in the ordinary course of business);
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(ii) sales by the company of equity interests (other than any
common shares issued and sold to any of the company's
underwriters of the initial public offering of the common
shares for the exercise of their over-allotment option at the
time of the company's initial public offering); and
(iii) sales or other voluntary or involuntary dispositions of the
company's assets, except for sales or other dispositions of:
(a) inventory in the ordinary course of business,
(b) accounts receivable and other assets in the ordinary
course of business, and
(c) assets as a part of normal retirements or
replacements.
(vii) Operating Expenditures: All expenditures, including but not
limited to, taxes, debt service payments and capital expenditures, are
Operating Expenditures, except the following:
(a) payments or prepayments of principal and premium on
indebtedness:
(1) required in connection with the sale or other
disposition of assets; or
(2) made in connection with the refinancing or refunding
of indebtedness with the proceeds from new
indebtedness or from the sale of equity interests.
For the purpose hereof, at the election and in the reasonable
discretion of the Board of Directors, any payment of principal or
premium will be deemed to be refunded or refinanced by any indebtedness
incurred or to be incurred by the company within 180 days before or
after that payment to the extent of the principal amount of that
indebtedness.
(b) (1) capital expenditures made for Acquisitions or for
Capital Improvements;
(2) payment of transaction expenses relating to Interim
Capital Transactions; or
(3) distribution(s) to shareholders, in the form of
dividend or otherwise.
For the purpose hereof, where capital expenditures are made partially
for Acquisitions or Capital Improvements and partially for other
purposes, the Board of Directors' allocation as made in good faith
between the amounts paid for each will be deemed conclusive.
(viii) Operating Surplus: For any period prior to the date of
dissolution and liquidation of the company on a cumulative basis,
Operating Surplus is:
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(a) the sum of:
(1) US$7.5 million,
(2) any net positive working capital on hand as of the
close of business on the Initial Issue Date,
(3) all cash receipts for the period beginning on the
Initial Issue Date and ending on the last day of that
period, other than cash receipts from Interim Capital
Transactions, and
(4) all cash receipts after the end of that period but on
or before the date of determination of Operating
Surplus for that period resulting from Working
Capital Borrowings;
less
(b) the sum of:
(1) Operating Expenditures for the period beginning on
the Initial Issue Date and ending with the last day
of that period, and
(2) the amount of cash reserves that is necessary or
advisable to be kept in the reasonable discretion of
the Board of Directors to provide funds for future
Operating Expenditures.
For the purposes hereof, disbursements made or cash reserves
established, increased or reduced after the end of this period but on
or before the date of determination of Available Cash for this period
will be deemed to have been made, established, increased or reduced for
purposes of determining Operating Surplus within this period if the
Board of Directors so determines. However, Operating Surplus for the
quarter in which the company's dissolution and liquidation occurs and
any subsequent quarter will be equal to zero.
(ix) Unrecovered Initial Price: At any time, the Unrecovered Initial
Price is the initial public offering price per common share issued on
the Initial Issue Date (the "Initial Price"), after:
(1) subtracting all distributions on or after the Initial Issue
Date to shareholders, in the form of dividend or otherwise,
from Interim Capital Transactions;
(2) subtracting any distributions of cash on or after the Initial
Issue Date in connection with the company's dissolution and
liquidation; and
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(3) adjusting this price as the Board of Directors determined is
needed to reflect any distribution, subdivision or combination
of the common and/or subordinated shares on or after the
Initial Issue Date.
(x) Working Capital Borrowings: Working Capital Borrowings are
borrowings made by the company exclusively for working capital purposes
and made pursuant to a credit facility or other arrangement that
requires all borrowings under that arrangement to be reduced to a
relatively small amount each year for an economically meaningful period
of time, all in the reasonable judgment of the Board of Directors.
17.2 Definition and determination of profit. The profit of any financial
year, by which term is meant the net profit according to the adopted
annual accounts of the company for such year, shall be determined by
the annual General Meeting.
17.3 Authority - distribution dividend/reserves. The Board of Directors is
the corporate body authorized to distribute and/or reserve profit of
the company, as established, from time to time in the form of dividends
by the General Meeting. In addition, the Board of Directors may set up,
cancel, and distribute from time to time from one or more reserves to,
or for the benefit of, its shareholders. Distributions shall be paid in
cash unless the Board of Directors has authorized a distribution in
kind.
17.4 Authority - distribution interim-dividend. If and to the extent that
the Board of Directors has the reasonable expectation that sufficient
profit shall be made for the relevant financial year, it may declare
and pay from time to time during a calendar quarter one or more interim
distributions on any class of shares in the form of interim-dividend.
At the time of a declaration and payment of interim dividends, the
Board of Directors may, by a duly adopted resolution thereto, qualify
any amounts payable or paid, which cannot ultimately be covered by the
profit for the relevant financial year, as payment out of freely
distributable reserves, including, but not limited to, capital surplus
reserves, insofar as available.
17.5 Certain effects of losses. In the event that the profit and loss
account shows a loss for any given year, which loss cannot be covered
by the reserves or compensated in another manner, no profit can be
distributed in any subsequent year, until such loss has been recovered
or otherwise offset by reserves.
17.6 Payment of Available Cash/Target Quarterly Distribution.
17.6.1 General. The company shall pay, from legally available funds therefore,
on a quarterly basis, all of its Available Cash, in the manner as set
out in this article 17.6. For the purpose of this article 17.6,
whenever reference is made to a distribution of Available Cash, out of
Operating Surplus or Interim Capital Transactions, such distributions
shall be, with due observance of the provisions of article 17.6.2
through 17.6.5, made by or on behalf of the company in cash as a
distribution from profit, as a dividend or interim-dividend, as the
case may be, or from freely distributable reserves, including capital
surplus reserves, to and for
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the benefit of its shareholders.
17.6.2 Target Quarterly Distribution - common shares. The company shall, out
of Available Cash, pay an amount equal to US$0.45 per common share per
calendar quarter (hereinafter referred to as the "Target Quarterly
Distribution") or US$1.80 per common share on an annual basis, plus any
Common Share Arrearages from any prior quarters, prior to any
distributions on the subordinated shares in the manner set forth below
in this article.
17.6.3 Target Quarterly Distribution - subordinated shares. Only after the
common shares have received the Target Quarterly Distribution plus any
Common Share Arrearages thereon, the company shall, out of Available
Cash, pay on each subordinated share an amount equal to the Target
Quarterly Distribution per calendar quarter, provided however, that no
subordinated share shall be entitled to any arrearages.
17.6.4 Sources of funds. For the purpose of a distribution by the company to
pay the Target Quarterly Distribution and such other amounts as set out
in this article to its shareholders, the company shall use as source of
funds for payment of Available Cash funds from Operating Surplus and/or
from Interim Capital Transactions, with due observance of the
limitation set out in this article and article 17.6.8 in particular. In
this respect, for accounting purposes or otherwise, all Available Cash
paid as a distribution to shareholders from any source will be treated
as a distribution from Operating Surplus until the sum of all Available
Cash paid as a distribution since the Initial Issue Date equals the
Operating Surplus as of the end of the quarter prior to that
distribution. Any Available Cash in excess of that amount (regardless
of its source) will be deemed to be from Interim Capital Transactions
and paid accordingly. If Available Cash from Interim Capital
Transactions is paid as a distribution for each common share in an
aggregate amount per common share equal to the Initial Price of that
common share, plus any Common Share Arrearages, the distinction between
Operating Surplus and Interim Capital Transactions will cease, and all
distributions of Available Cash will be treated as if they were made
from Operating Surplus.
17.6.5 Dividend and other distributions. With due observance of the foregoing
article 17.6.1 through 17.6.4, the company shall pay on each common
share, each subordinated share and each incentive share the following
amounts out of Available Cash:
17.6.5.1 Distributions from Operating Surplus during Subordination Period.
Distributions of Available Cash from Operating Surplus, if any, for any
quarter during the Subordination Period will be made in the following
manner:
(a) First, 100% to the common shares, pro rata, until each outstanding
common share has been paid an amount equal to the Target Quarterly
Distribution for that quarter;
(b) Second, 100% to the common shares, pro rata, until each outstanding
common share has been paid an amount equal to any Common Share
Arrearages accrued and unpaid for any prior quarters during the
Subordination Period;
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(c) Third, 100% to the subordinated shares, pro rata, until each
outstanding subordinated share has been paid an amount equal to the
Target Quarterly Distribution for that quarter; and
(d) Thereafter, any Available Cash from Operating Surplus for that
quarter will be paid among the holders of common shares and
subordinated shares and the holders of incentive shares in the
following manner:
(1) First, 85% to all common and subordinated shares, pro rata, and 15%
to the incentive shares, pro rata, until the common shares and
subordinated shares have received (including the Target Quarterly
Distribution) a total of $0.495 for that quarter to each outstanding
common share and subordinated share (the "first additional
distribution");
(2) Second, 75% to all common shares and subordinated shares, pro rata,
and 25% to the incentive shares, until the common and subordinated
shares have received (including the Target Quarterly Distribution) a
total of $0.675 for that quarter to each outstanding common share and
subordinated share (the "second additional distribution");
(3) Thereafter, 50% to all common shares and subordinated shares, pro
rata, and 50% to the incentive shares, pro rata.
17.6.5.2 Distribution from Operating Surplus after Subordination Period.
Distributions paid out Available Cash from Operating Surplus, if any,
for any quarter after the Subordination Period will be made in the
following manner:
(a) First, 100% to all common shares, pro rata, until each share has
been paid an amount equal to the Target Quarterly Distribution for that
quarter; and
(b) Thereafter, in the manner set forth in article 17.6.5.1, section
(d) (1) through (3) set forth above, with due observance of the fact
that no subordinated shares shall be outstanding after the
Subordination Period.
17.6.5.3 Distributions from Interim Capital Transactions. Distributions of
Available Cash from Interim Capital Transactions for any quarter during
or after the Subordination Period will be made in the following manner:
(a) First, 100% to the common shares and subordinated shares, if any,
pro rata until each outstanding common share has been paid Available
Cash from Interim Capital Transactions in an aggregate amount per
common share equal to the Initial Price;
(b) Second, 100% to the common shares until each outstanding common
share has been paid Available Cash from Interim Capital Transactions in
an aggregate amount equal to any unpaid Common Share Arrearages; and
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(c) Thereafter, all distributions of Available Cash from Interim
Capital Transactions will be made as if they were from Operating
Surplus, in the manner of article 17.6.5.1 and 17.6.5.2, as applicable.
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17.6.6.1 Adjustment of Target Quarterly Distribution - additional distribution
levels. Upon a distribution of Available Cash from Interim Capital
Transactions, the Target Quarterly Distribution and the additional
distribution levels as referred to in article 17.6.2 and 17.6.5.1 (d)
(1) through (3), respectively, will be adjusted by the Board of
Directors downward by multiplying each such amount by a fraction equal
to:
(1) the Unrecovered Initial Price;
divided by
(2) the Initial Price, or the Unrecovered Initial Price, as the case
may be, of the common shares immediately prior to that distribution of
Available Cash from Interim Capital Transactions.
17.6.6.2 Additional adjustments. In addition to the provisions of article
17.6.6.1 above, in the event of any combination or subdivision of
common shares (whether effected by a distribution by way of dividend or
otherwise payable in common shares or otherwise) but not by reason of
the issuance of additional common shares for cash or property, the
following amounts will be proportionately adjusted upward or downward,
as appropriate, by the Board of Directors:
(a) the Target Quarterly Distribution;
(b) the additional distribution levels;
(c) the Unrecovered Initial Price;
(d) the number of additional common shares issuable during the
Subordination Period without a shareholder vote pursuant to the
provision of article 4.3 of these articles of incorporation;
(e) the number of common shares outstanding upon conversion of
subordinated shares; and
(f) other amounts calculated on a per common share and/or
subordinated share basis.
17.6.7 Payment of Available Cash; holders of record entitled thereto. Each
distribution from Available Cash shall be made by the company to the
holders of record as they appear in the Register on such record date,
approximately forty-five days after the end of each calendar quarter,
commencing with the calendar quarter ending June 30, 1999, as shall be
fixed by the Board of Directors from time to time. Any distribution of
the Target Quarterly Distribution or of amounts of the additional
distribution levels as referred to in article 17.6.2 and 17.6.5.1,
respectively, for the period from the Initial Issue Date through June
30, 1999 will be adjusted downward by the Board of Directors based on
the actual length of such period.
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17.6.8 Amount of distributable Available Cash as dividends or otherwise -
indenture limitation - senior notes indenture. If on any distribution
date, being a date as set by the Board of Directors to pay the Target
Quarterly Distribution out of Available Cash and/or such or other
amounts on the shares as set out in this article, during or after the
Subordinated Period, an Indenture Limitation (as defined below) is in
effect, the Board of Directors shall determine the amount, if any, of
dividends or other distributions out of Available Cash on the shares
that the company shall be permitted to pay in cash to its shareholders
consistent with the Indenture Limitation. For the purpose hereof, an
"Indenture Limitation" shall be deemed to be in effect on any date to
the extent that on such date any section of the Indenture shall
prohibit or make impossible the payment of cash dividends by the
company's subsidiaries to the company on such date. The "Indenture"
means (i) that certain indenture dated as of November 27, 1996, as
amended, pursuant to which the 113/4Mortgage Notes Due 2003 have been
issued by Statia Terminals International N.V., a Netherlands Antilles
company, and Statia Terminals Canada, Incorporated, a Nova Scotia,
Canada company and as subsidiaries of the company, as in effect from
time to time and (ii) any successor indenture pursuant to which debt
obligations have been issued refinancing the debt obligation referred
to in clause (i) above.
17.6.9 Deferral of payment on subordinated shares. The company shall with
respect to any payment of Available Cash on the subordinated shares,
defer the payment of the first US$ 6.8 million (being the amount equal
to the aggregate Target Quarterly Distribution on the subordinated
shares for one year) in the form of cash distributions, by dividend or
otherwise, until the end of the Deferral Period (as defined below), but
the same will be deemed paid for purposes of determining Available
Cash, Operating Surplus, Adjusted Operating Surplus, additional
distribution levels, early conversion rights and the expiration of the
Subordinated Period. For the purpose hereof, the Deferral Period shall
mean the period from the Initial Issue Date until the tests set forth
below have been met for any quarter ending on or after June 30, 2001
for which:
1) distributions (by dividend or otherwise) of Available Cash
from Operating Surplus on the common shares and subordinated
shares (including deferred distributions) for each of the two
consecutive non-overlapping four-quarter periods immediately
preceding the date of determination that equaled or exceeded
the sum of the Target Quarterly Distribution on all of the
outstanding common shares and subordinated shares during such
periods;
2) the Adjusted Operating Surplus generated during each of the
two consecutive non-overlapping four-quarter periods
immediately preceding the date of determination that equaled
or exceeded the sum of the Target Quarterly Distribution on
all of the common and subordinated shares that were
outstanding on a fully diluted basis during those periods; and
3) there are no outstanding Common Share Arrearages.
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17.6.10 Payment after deferral period. After the Deferral Period, the company
will pay on the subordinated shares until the deferred distributions
have been paid in full all Available Cash from Operating Surplus
remaining after all Common Share Arrearages and the Target Quarterly
Distributions have been paid on all common shares and subordinated
shares prior to any further distribution under the provisions of this
article.
AMENDMENT OF THE ARTICLES OF INCORPORATION; DISSOLUTION
AND LIQUIDATION OF THE COMPANY/DISTRIBUTION OF LIQUIDATION
PROCEEDS/PROHIBITION AGAINST CERTAIN ACTIONS ADVERSE
TO CERTAIN CLASSES OF SHARES
ARTICLE 18
18.1 Resolutions to amend the articles of incorporation, to dissolve the
company or to sell its assets. Resolutions to amend the articles of
incorporation, to dissolve the company or to sell all or substantially
all of the assets of the company, may only be taken in a General
Meeting by at least a sixty-six and two thirds percent majority of
votes cast at which meeting at least one-half of the outstanding voting
capital is represented.
18.2 Second meeting in certain circumstances. If the required capital is not
represented at the meeting referred to in article 18.1, a second
meeting shall be convened, to be held within one month after the first
meeting, at which (second) meeting valid resolutions may then be taken
with an absolute majority of votes cast, irrespective of the issued and
outstanding voting capital represented.
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18.3 Prohibition against certain actions adverse to incentive shares. In
accordance with the provisions of Article 93a of the Commercial Code of
the Netherlands Antilles, the General Meeting shall not, without the
vote of the absolute majority of holders of incentive shares then
outstanding, amend, alter or repeal any of the provisions of these
articles of incorporation so as to affect adversely the rights or
powers of such incentive shares.
18.4 Procedures for liquidation. In the event of a dissolution of the
company, the liquidation shall take place under such provisions as the
General Meeting shall determine with due observance of (i) the
remaining paragraphs of this article 18, and (ii) the provisions of
applicable law on dissolution and liquidation of Netherlands Antilles
companies.
18.5 Allocation of profits. If the profit and loss account covering the
financial year closing per the date of the dissolution of the company
shows a profit, this profit shall be allocated in conformity with the
provisions of article 17 hereof.
18.6 Liquidation Event--definition and allocation to shares. In case of any
dissolution, liquidation or winding up of the affairs of the company,
whether voluntary or otherwise (a "Liquidation Event"), after
satisfaction of all the company's creditors in the order of priority as
set out by or under applicable law, proceeds of such liquidation will
be distributed to the holders of common and subordinated shares and the
holders of incentive shares in accordance with their respective
priorities as described below, provided however, that the holders of
common shares shall be entitled to receive, out of the assets of the
company available for distribution to its shareholders, in cash, (i)
their Unrecovered Initial Price, (ii) the amount of the Target
Quarterly Distribution due on each such share, plus (iii) any
arrearages, before any distribution shall be made to the holders of any
other class of shares, as further described below. If the company is
dissolved and liquidated before the end of the Subordination Period,
any distribution will be made as follows:
(a) First, 100% to the common shares, pro rata, until each common
share receives an amount equal to the sum of:
(1) the Unrecovered Initial Price of such common share;
(2) the amount of the Target Quarterly Distribution for the
quarter(s) during which the company's liquidation occurs; and
(3) any Unpaid Common Share Arrearages on that common share;
(b) Second, 100% to the subordinated shares, pro rata, until each
subordinated share receives an amount equal to the sum of:
(1) the Unrecovered Initial Price of that subordinated share;
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(2) the amount of the Target Quarterly Distribution for the
quarter(s) during which the company's liquidation occurs; and
(3) any unpaid deferred distributions on that subordinated share;
(c) Third, 85% to the common shares and subordinated shares, pro rata,
and 15% to the incentive shares, pro rata, until there has been
allocated under this paragraph (c) an amount per common share and
subordinated share equal to:
(1) the cumulative excess of the first additional distribution
over the Target Quarterly Distribution for all common shares
and subordinated shares for each quarter of the company's
existence as from the Initial Issue Date,
less
(2) the cumulative amount per share of any prior distributions (by
dividend or otherwise) of Available Cash from Operating
Surplus in excess of the Target Quarterly Distribution that
the company paid 85% to the common shares and subordinated
shares, pro rata, and 15% to the incentive shares, pro rata,
for each quarter of the company's existence as from the
Initial Issue Date;
(d) Fourth, 75% to the common shares and subordinated shares, pro rata,
and 25% to the incentive shares, pro rata, until there has been
allocated under this paragraph (d) an amount per common share and
subordinated share equal to:
(1) the cumulative excess of the second additional distribution
over the first additional distribution for each quarter of the
company's existence as from the Initial Issue Date,
less
(2) the cumulative amount per share of any distributions of
Available Cash from Operating Surplus in excess of the first
target distribution that the company paid 75% to the common
shares and subordinated shares, pro rata, and 15% to the
incentive shares, pro rata, for each quarter of the company's
existence as from the Initial Issue Date; and
(e) Thereafter, 50% to all common shares and subordinated shares, pro
rata, and 50% to the incentive shares, pro rata.
18.7 If the dissolution and liquidation of the company occurs after the
Subordination Period so as a result of which only common shares and
incentive shares, if any, are outstanding, all of paragraph (b) above
will no longer be applicable, and any reference to distribution on
subordinated shares need no longer be followed.
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18.8 Liquidation event--maintenance of books and records. During a period of
ten years after the end of the liquidation relating to any Liquidation
Event, the books and records of the company shall remain in the custody
of the person designated for that purpose by the General Meeting.
SEPARATE MEETINGS OF CLASSES OF SHARES/
ACTION BY WRITTEN CONSENT
ARTICLE 19
19.1 General. Separate meetings of the holders of any class of shares shall
be held and may be convened by the Board of Directors at the request of
the holders of the respective classes of shares, being the holders of
common shares, subordinated shares or incentive shares, by the holders
of ten percent of any shares of such class issued and outstanding (each
a "class meeting").
19.2 Convocation. A convocation of such class meeting shall be given by
means of a written notice mailed not fewer than ten days and no more
than thirty days prior to the date of the meeting to the address of
each holder of a class of shares, appearing in the Register.
19.3 Agenda. The notice shall contain the agenda of the meeting or shall
state that it may be examined by the holders of such class of shares
for inspection at the registered office of the company.
19.4 Separate meeting as determined by board of directors. Separate meetings
may also be held as often as the Board of Directors deems necessary.
19.5 Resolutions outside meetings by written consent for a class of shares
only; records. Resolutions of holders of a class of shares may also be
adopted by written consent (without recourse to a separate meeting of
holders of a class as provided herein), provided (i) all holders of
shares of such class have had an opportunity to express themselves in
connection with such action by written consent and (ii) such expression
is made in writing. The Board of Directors shall keep a record of the
resolutions thus made by written consent.
19.6 Application of provisions of articles of incorporation and laws. All
the provisions of these articles of incorporation and the laws of the
Netherlands Antilles as to General Meetings, in as far as possible,
apply to separate meetings, except as otherwise specifically provided
in this article 19.
Final declaration
At the time of the execution of the notarial deed of amendment, containing the
aforementioned amendment to the articles of incorporation, the following actions
shall, among others, take place and shall be deemed to take place
simultaneously: (a) the company will issue at least 7,600,000
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Common Shares and with the proceeds therefrom redeem all outstanding shares of
Preferred Stock, (b) the company will reclassify the 47,119 shares of its
outstanding Common Stock as 471,190 subordinated shares, (c) the company will
issue an additional 3,328,810 subordinated shares plus 38,000 incentive rights,
and (d) each of Messrs. Jonathan R. Spicehandler, and Ernest Voges shall be
classified as a Class A director, each of Messrs. Justin B. Wender, Francis
Jungers, and James L. Holloway III shall be classified as a Class B director and
each of Messrs. John K. Castle, James G. Cameron and David B. Pittaway shall be
classified as a Class C director.
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FOURTH AMENDMENT TO INDENTURE
AND
CONSENT UNDER SECURITIES PLEDGE AGREEMENTS
FOURTH AMENDMENT TO INDENTURE AND CONSENT UNDER SECURITIES
PLEDGE AGREEMENTS (the "Amendment and Consent"), dated as of April 26, 1999, to
the Indenture (as heretofore amended, the "Indenture"), dated as of November
27, 1996, among Statia Terminals International N.V., a Netherlands Antilles
corporation ("Statia"), Statia Terminals Canada, Incorporated, a corporation
organized under the laws of Nova Scotia ("Statia Canada; and together with
Statia, the "Issuers"), the Subsidiary Guarantors named therein (the "Subsidiary
Guarantors") and HSBC Bank USA (formerly known as Marine Midland Bank) (the
"Trustee"). All capitalized terms used herein and not otherwise defined shall
have the respective meanings provided such terms in the Indenture.
W I T N E S S E T H :
WHEREAS, in order to take advantage of certain tax benefits,
Statia is proposing to (i) transfer ownership of the stock of certain Restricted
Subsidiaries to itself or to other Restricted Subsidiaries, (ii) incorporate one
new Restricted Subsidiary which will become a Subsidiary Guarantor and the stock
of which will be held by Statia, (iii) issue additional stock of certain
Restricted Subsidiaries to be held by other Restricted Subsidiaries and (iv)
ensure that all of such stock so transferred or issued, and all of the stock of
the new Restricted Subsidiary, will be pledged pursuant to Securities Pledge
Agreements to secure the Securities;
WHEREAS, as a result of the foregoing, all of the stock of all
of the Restricted Subsidiaries, including the new Restricted Subsidiary, will
continue to be pledged to secure the Securities and therefore such transactions
will not adversely affect the holders of the Securities;
WHEREAS, neither the Indenture nor the Securities Pledge
Agreements specifically authorize the release of the Pledged Shares of the
Restricted Subsidiaries from the Lien of the Securities Pledge Agreement under
which they are currently pledged even though they will be subjected to the Lien
of another Securities Pledge Agreement; and
WHEREAS, Section 5.1 of the Securities Pledge Agreements
prohibits the voting of the Pledged Shares in favor of the amendment of the
Articles of Association of the issuer of such Pledged Shares without the consent
of the Pledgee; and
WHEREAS, Section 6.2 of the Securities Pledge Agreements
prohibits the issuance of additional shares of the issuer of the Pledged Shares
to anyone other than the Pledgor; and
<PAGE>
WHEREAS, Section 9.01 of the Indenture permits the amendment
of the Indenture and the amendment of the Security Documents (which include the
Securities Pledge Agreements) without the consent of any holder of the
Securities in order to make any change that does not adversely affect the rights
of any holders of Securities;
WHEREAS, the parties hereto desire to amend the Indenture
pursuant to 9.01 of the Indenture and to obtain the consent of the Pledgee under
certain Securities Pledge Agreements in order to enable the foregoing
transactions to be accomplished;
NOW, THEREFORE, the parties hereto agree as follows for the
benefit of each other party and for the equal and ratable benefit of the Holders
of the Securities:
1. Amendment. The Indenture is hereby amended by adding
a new Section 11.15 to read as follows:
Section 11.15 Transfer of Shares of Restricted Subsidiaries to
Statia or Other Restricted Subsidiaries
The shares of capital stock of Saba Trust Company N.V.,
Bicen Development Corporation N.V. and Statia Terminals N.V. may be
transferred by Statia Terminals Corporation N.V. to Statia Terminals
International N.V. and thereafter to Statia Terminals Antilles N.V.,
provided that: (i) Statia Terminals Antilles N.V. is a Restricted
Subsidiary, (ii) promptly after such transfer Statia Terminals Antilles
N.V. executes a Guarantee and a Securities Pledge Agreement pursuant to
which all of the shares so transferred are pledged to secure the
Securities and delivers to the Trustee all documents required by the
Indenture or such Securities Pledge Agreement in connection therewith
and such other documents as the Trustee may request to evidence the
effectiveness of such pledge; and (iii) the existing Lien on the shares
so transferred is not released until the Lien pursuant to the
Securities Pledge Agreement referred to in clause (ii) above becomes
effective.
2. Consent. The Trustee, as Pledgee under the Securities
Pledge Agreements, hereby consents to the following actions and
waives the provisions of the Securities Pledge Agreements to the extent
necessary to permit such actions:
(a) the transfer of the shares of capital stock referred
to in Section 1 above;
(b) the voting of the shares of capital stock of Statia
Terminals N.V. and Statia Terminals Corporation N.V. in favor of
amendments to the respective Articles of Association of such
corporations to authorize the creation of preferred stock and the
conversion of certain outstanding preferred stock into another type of
preferred stock, and the issuance of such preferred stock, provided
that (i) such shares of preferred stock are issued only to Restricted
Subsidiaries, (ii) such shares of preferred stock are promptly pledged
pursuant a Securities Pledge
-2-
<PAGE>
Agreement and (iii) all documentation required in connection therewith
by the Indenture or any Securities Pledge Agreement is submitted to the
Trustee or Pledgee.
3. TIA Controls. If any provision of this Amendment and
Consent limits or conflicts with another provision which is required to be
included in this Amendment and Consent by the TIA, the required provision shall
control.
4. Governing Law. THIS AMENDMENT AND CONSENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
5. Counterparts. This Amendment and Consent may be executed
and agreed in any number of counterparts and by the parties hereto on separate
counterparts, each of which counterparts when executed and delivered shall be an
original, but all of which shall together constitute one and the same agreement.
A complete set of counterparts shall be lodged with the signatories hereto.
6. Indenture Not Otherwise Amended. The terms and provisions
of the Indenture not amended hereby shall continue to remain in full force and
effect.
7. References. From and after the date hereof, all references
in the Indenture shall be deemed to be references to the Indenture as amended
hereby.
8. The Trustee. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Amendment and Consent or for or in respect of the recitals contained herein, all
of which recitals are made solely by Issuers and the Subsidiary Guarantors.
* * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of this 26th day of April, 1999.
STATIA TERMINALS INTERNATIONAL N.V.
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: Managing Director
STATIA TERMINALS CANADA, INCORPORATED
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President
HSBC BANK USA,
as Trustee
By: /s/ Frank J. Godino
-------------------------------------
Name: Frank J. Godino
Title: Vice President
<PAGE>
IN WITNESS WHEREOF, each of the undersigned Subsidiary
Guarantors has caused this Amendment to be duly executed as of this ___day of
April, 1999.
STATIA TERMINALS CORPORATION N.V.
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: Managing Director
STATIA TERMINALS DELAWARE, INC.
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President
STATIA TERMINALS, INC.
By: /s/ James F. Brenner
--------------------------------------
Name: James F. Brenner
Title: Vice President
STATIA TERMINALS N.V.
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President
<PAGE>
STATIA DELAWARE HOLDCO II, INC.
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President
SABA TRUST COMPANY N.V.
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President
BICEN DEVELOPMENT CORPORATION N.V.
By: /s/ James F. Brenner
--------------------------------------
Name: James F. Brenner
Title: Vice President
W.P. COMPANY, INC.
By: /s/ James F. Brenner
--------------------------------------------
Name: James F. Brenner
Title: Vice President
<PAGE>
SEVEN SEAS STEAMSHIP COMPANY, INC.
By: /s/ Victor M. Lopez, Jr.
---------------------------------------------
Name: Victor M. Lopez, Jr.
Title: Treasurer and Assistant Secretary
STATIA TUGS N.V.
By: /s/ James G. Cameron
-----------------------------------------------
Name: James G. Cameron
Title: Managing Director
SEVEN SEAS STEAMSHIP COMPANY (SINT EUSTATIUS) N.V.
By: /s/ Victor M. Lopez, Jr.
-----------------------------------------------
Name: Victor M. Lopez, Jr.
Title: Treasurer and Assistant Secretary
POINT TUPPER MARINE SERVICES LIMITED
By: /s/ James F. Brenner
-----------------------------------------------
Name: James F. Brenner
Title: Vice President
STATIA LABORATORY SERVICES, N.V.
By: /s/ James F. Brenner
-----------------------------------------------
Name: James F. Brenner
Title: Vice President
STATIA TERMINALS NEW JERSEY, INC.
By: /s/ James F. Brenner
-----------------------------------------------
Name: James F. Brenner
Title: Vice President
<PAGE>
EMPLOYMENT AGREEMENT
--------------------
This Agreement, originally made as of the 27th day of
November, 1996 between Statia Terminals Group N. V., a Netherlands Antilles
corporation, having a registered office at L.B. Smithplein 3, Curacao,
Netherlands Antilles (the "Company"); Statia Terminals, Inc., a Delaware
corporation, with offices at 800 Fairway Drive, Suite 295, Deerfield Beach,
Florida 33441 (the "Subsidiary"); and JAMES G. CAMERON, an individual with an
address of 12060 Eagle Trace Blvd. North, Coral Springs, Florida 33071 (the
"Employee"), is hereby amended and restated, effective April 28, 1999.
R E C I T A L S
---------------
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company acquired, directly or indirectly, all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary and is presently serving as President and Chief Executive
Officer of the Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods
and personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as President and Chief
Executive Officer of the Subsidiary and the Subsidiary hereby agrees to employ
and continue to employ the Employee as President and Chief Executive Officer,
and the Employee accepts such employment for the term of the employment
specified in Section 3 hereof (the "Employment Term"). During the Employment
Term, the Employee shall serve as the President and Chief Executive Officer of
the Subsidiary, performing such duties and having such authority as shall be
reasonably required of an executive-level employee of the Subsidiary, reporting
only to the Board of Directors of the Subsidiary (the "Board"), and shall have
such other powers and perform such other additional executive duties as may
from time to time be assigned to him by the Board. Such duties being performed
and such authority being exercised shall be at least commensurate with the
duties being performed and authority being exercised by the Employee
immediately prior to the date of this Agreement.
<PAGE>
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all of
his time, energy, experience and talents during regular business hours and as
otherwise reasonably necessary to such employment, to the exclusion of all
other business activities; provided however, that such exclusion shall not
prohibit the Employee from attending to the Employee's personal matters and/or
financial and investment affairs (which financial or investment affairs shall
not conflict with the business of the Subsidiary or the Company and is subject
to the provisions of Section 12 hereof) during regular business hours as may
from time to time be reasonably necessary so long as attendance to such matters
and affairs does not interfere with the performance of the Employee's duties
hereunder.
3. Employment Term. Subject to earlier termination pursuant
to Section 7 hereof the Employment Term shall begin on March 31, 1999, and
continue until March 31, 2002; provided, however, that beginning on March 31,
2000, and on each anniversary of such date, the Employment Term shall
automatically renew for an additional one year beyond the end of the then
current term, unless, at least 90 days before March 31, 2000, or March 31 of
any succeeding year, either party gives notice to the other of his or its
desire to terminate this Agreement, in which case the Employment Term shall
terminate as of March 31, 2002, or the end of the then-current three-year term,
as applicable.
4. Compensation.
(a) Salary. During the Employment Term, the Company
shall cause the Subsidiary to pay the Employee a base salary, payable in equal
bi-weekly installments, subject to withholding and other applicable taxes, at
an annual amount of not less than two hundred ninety thousand U.S. Dollars
($290,000). Such base salary shall be reviewed by the Board in January, 2000,
and at least annually thereafter, and shall be increased annually, effective
January 1 of the applicable year, but may not be reduced, from the amount in
effect for the immediately preceding year, at an annual rate not less than the
annual rate of increase in the Consumer Price Index as measured by the United
States Department of Labor, Bureau of Labor Statistics (the "BLS"), All Items,
Consumer Price Index for All Urban Consumers (the "CPI-U"), and any such
increased base salary shall be the Employee's "base salary" for purposes of
this Agreement. In determining the rate of such annual increase, the base shall
be the CPI-U for the first day of the calendar year preceding the year for
which the base salary increase is being calculated and such base shall be
compared with the CPI-U as of the last day of such year. If the CPI-U is no
longer published in substantially its current form by the BLS, then a successor
index shall be substituted by mutual agreement of the Company and the Employee.
(b) Cash Incentive Bonus. For the calendar year 1999
and for each subsequent calendar year, or portion thereof, during the
Employment Term, a reasonable target EBITDA (as defined below) for each
calendar year and a target bonus for the Employee for such calendar year shall
be submitted to the Board by the chief executive officer, or the highest
ranking officer then in service, of the Subsidiary (the "CEO") and agreed to by
the Board and the CEO, and as soon as practicable after the end of each such
calendar year as the actual EBITDA achieved for such calendar year has been
determined, the Company shall cause the Subsidiary to pay to the Employee a
lump-sum bonus determined as described in this Section 4(b). No portion
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<PAGE>
of such bonus will be paid if less than 85% of the target EBITDA is achieved in
the applicable calendar year. Payment of 85% of the target bonus would be made
if 85% of the target EBITDA is achieved, and if the actual EBITDA for the
applicable calendar year exceeds 85% of the target EBITDA for such year, the
percentage of the target bonus paid shall be the percentage of the target
EBITDA so achieved in such year. For example, if 92% of the target EBITDA is
achieved in a calendar year, 92% of the target bonus would be paid for such
year, or if 160% of the target EBITDA is achieved in a calendar year, 160% of
the target bonus would be paid for such year. If during the course of any
calendar year, the Company shall sell or otherwise dispose of five percent (5%)
or more of the total assets of the Company and its subsidiaries, the CEO and
the Board shall establish a revised EBITDA target for such calendar year after
receiving management's recommendation.
"EBITDA" shall mean for any period, the (a) net income (or
net loss) of the Company and its subsidiaries plus (b) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, (v) extraordinary or unusual losses deducted in calculating net income
(or net loss), and (vi) other non-cash charges less (c) extraordinary or
unusual gains and other non-cash income items added in calculating net income
(or net loss), in each case determined in accordance with generally accepted
accounting principles at the end of each such calendar year for the Company and
its subsidiaries on a consolidated basis, and plus (d) any fees paid to or
expenses incurred by the Company pursuant to any management or similar
agreement between the Company and any stockholder holding 50 percent or more of
the capital stock of the Company or an Affiliate thereof.
(c) Employee Benefits. The Employee shall be
entitled to and shall receive employee benefits or participate in plans and
programs maintained by or on behalf of the Company or the Subsidiary which are
otherwise made available to employees of the Subsidiary, including but not
limited to, medical, health, accident and disability plan, cafeteria plan,
retirement plan and 401(k) plan.
(d) Additional Benefits. In addition to the other
compensation payable to the Employee hereunder, during the Employment Term, the
Company shall cause the Subsidiary to furnish at its expense an automobile, or
a reasonable allowance in lieu thereof at the option of the Subsidiary, office,
reasonable secretarial services, club membership, professional association
dues, continuing professional education expenses and such other supplies,
equipment, facilities, services and emoluments appropriate to such Employee's
position. Also, the Subsidiary has purchased from The CBI Industries Inc.
Supplemental Survivors' Benefit, Executive Life Insurance and Benefit
Restoration Trust at cash surrender value the collateral assignment of the
Executive Life Insurance Policy on the Employee, and the Subsidiary shall pay
the premiums on such policy during the Employment Term pursuant to a separate
agreement dated the date hereof between the Employee and the Subsidiary
relating to such policy.
(e) Paid Time Off. Employee shall be entitled to
paid vacation, holidays, and sick leave during each calendar year of employment
in accordance with policies of the Subsidiary. Vacation may only be taken at
times mutually convenient for the Subsidiary and the Employee. The Subsidiary
may elect to pay out all accrued and unused vacation time as of
-3-
<PAGE>
December 31 of any calendar year in January of the following calendar year.
Such pay out will be at the prevailing rate of annual compensation at the end
of the immediately preceding calendar year. No more than four weeks vacation
time may be accrued at any time.
5. Expenses. The Employee shall be entitled to be reimbursed
by the Subsidiary for all reasonable expenses incurred by him in connection
with the performance of his duties hereunder in accordance with policies
established by the Board from time to time and upon receipt of appropriate
documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only
to the extent required, after prompt notice to both the Company and the
Subsidiary of any such order), directly or indirectly, other than in the
regular and proper course of business of the Company and/or the Subsidiary, any
confidential knowledge or information with respect to the operations or
finances of the Subsidiary or the Company or any of their subsidiaries or
Affiliates, or with respect to confidential or secret processes, services,
techniques, customers or plans with respect to the Company and/or the
Subsidiary, and (b) the Employee will not use, directly or indirectly, any
confidential information for the benefit of anyone other than the Company
and/or the Subsidiary; provided, however, that the Employee has no obligation,
express or implied, to refrain from using or disclosing to others any such
knowledge or information which is or hereafter shall become available to the
public other than through disclosure by the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. ss. 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company
may deem necessary or appropriate to vest complete title and ownership of any
Work Product, and all rights therein, exclusively in the Subsidiary.
During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the Subsidiary or to commit any other action
that injures or hinders the business relationships of the Company and/or the
Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
-4-
<PAGE>
7. Termination.
(a) Mutual Agreement. The employment of the Employee
hereunder may be terminated at any time by the mutual agreement of the parties
hereto.
(b) Termination for Substantial Cause. The
Subsidiary may at any time upon thirty (30) days prior written notice to the
Employee, terminate the employment of the Employee for Substantial Cause (as
hereinafter defined).
(c) Termination by the Employee The Employee shall
be entitled to terminate his employment without being in violation of any
provision of this Agreement upon 30 days prior written notice to the Subsidiary
(i) for Good Reason; (ii) upon "normal retirement" under any then-effective
plan or policy of the Subsidiary, or, in the absence of any such plan or
policy, under the terms of the CBI Pension Plan, as amended effective August 1,
1996, as if the Employee participated in such plan (whether or not he actually
so participated); or (iii) at any time and for any reason after the Employee
has attained the age of sixty (60) years.
(d) Termination by Death or Disability. The
employment of the Employee shall terminate upon the death of the Employee or
the inability of the Employee to perform his duties as a result of physical or
mental disability for an aggregate of 90 days in any 180 day period, as
determined in good faith by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of owning,
leasing or operating petroleum and other bulk liquid blending, trans-shipment,
storage or processing facilities or providing related terminaling services such
as supply of bunker fuel for vessels, emergency and spill response services;
brokering of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime
constituting a felony in the jurisdiction in which
committed, or for any other criminal act against the
Subsidiary or the Company involving dishonesty or willful
misconduct intended to injure the Subsidiary or the Company
or any Affiliate of either of them in any substantial way
(whether or not a felony and whether or not criminal
proceedings are initiated);
(ii) Failure or refusal of the Employee in any
material respect to perform his obligations under this
Agreement or the duties of his employment or to follow the
lawful and proper directives of the Board, other than by
reason of a Disability provided such duties or directives
are consistent with this Agreement, and such failure or
refusal continues uncured for a period of thirty (30) days
after written notice thereof from the Subsidiary to the
Employee which specifies (i) the nature of such failure or
refusal, and (ii) the reasonable action of the Employee
necessary for cure; or
-5-
<PAGE>
(iii) Any willful or intentional misconduct of
the Employee (A) in violation of any written policy of the
Subsidiary providing for termination of employment in the
event of violation of such policy or (B) committed for the
purpose, or having the reasonably foreseeable effect, of
injuring in a substantial way the Company, the Subsidiary,
or any Affiliate of either of them, or their respective
businesses or reputations, including, without limitation,
causing the Subsidiary or any of its Affiliates to violate a
state or federal law relating to the workplace environment.
(c) "Good Reason" shall mean:
(i) a significant reduction in the authorities,
duties, or responsibilities of Employee;
(ii) assignment to an office location which is
more than 100 miles from the office location of the Employee
as of the date of this Agreement;
(iii) material breach of this Agreement by the
Subsidiary or the Company which is not cured within thirty
(30) days after written notice of such breach is given by
the Employee to the Company and the Subsidiary; or
(iv) any failure of any successor to all or
substantially all of the assets or business of the Company
or the Subsidiary, by purchase, merger, consolidation or
otherwise, to fully assume the obligations of the Company or
the Subsidiary, as applicable, under this Agreement.
As applied to the Employee, the parties hereto agree that any position other
than President and Chief Executive Officer of the Subsidiary, reporting only to
the Board, and to whom all other employees report, directly or indirectly,
would constitute a significant reduction in the authorities, duties or
responsibilities of the Employee.
(d) "Change in Control" shall mean the occurrence of
the following: Castle Harlan Partners II L.P. and its Affiliates and their
partners ("CHP") cease to own or control at least fifty percent (50%) of the
aggregate number of the Company's outstanding class A common shares and class B
subordinated shares owned or controlled, directly or indirectly, by such
Persons as of the effective date of the amendment and restatement of this
Agreement; provided, however, that, the foregoing to the contrary
notwithstanding, in no event shall any Change in Control be deemed to occur,
for purposes of this Agreement, as the direct or indirect result of (i) the
occurrence of any of the transactions contemplated under the Purchase and Sale
Agreement, (ii) a public distribution of any such Company shares owned by CHP
(including any distribution of such shares to the partners of Castle Harlan
Partners II L.P.), or (iii) a sale or other distribution to any Competing
Entity, in one or more transactions, by CHP of not more than seven percent (7%)
of the aggregate number of the Company's outstanding class A common shares and
class B subordinated shares (provided, however, that a sale or distribution of
more than seven percent (7%) of such shares to a Competing Entity will be
deemed to be a Change in Control).
-6-
<PAGE>
(e) "Affiliate" shall mean, with respect to any
Person, any entity that directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such
Person.
(f) "Person" shall mean any corporation,
partnership, limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization or other entity or organization.
(g) "Work Product" shall mean work product,
property, data documentation or information of any kind relating to the
Business, prepared, conceived, discovered, developed or created by the Employee
for the Subsidiary or any of the Subsidiary's Affiliates, clients or customers
while the Employee is employed by the Subsidiary.
(h) "Disability" shall have the meaning specified in
Section 7(d) hereof.
9. Insurance and Indemnification.
(a) Life Insurance. The Subsidiary may purchase
insurance on the life of the Employee, and if it does so, the Employee shall
cooperate fully by performing all the requirements of the life insurer which
are necessary conditions precedent to the issuance of the life insurance policy
issued by it.
(b) Directors and Officers Insurance and
Indemnification. The Subsidiary shall provide directors and officers insurance
covering the Employee for events occurring during the Employment Term on terms
at least as favorable as coverage for Directors of the Company, and the
Subsidiary shall provide indemnification to the Employee to the full extent
allowed by the law of its jurisdiction of incorporation.
10. Severance
(a) If the Employee's employment is terminated by
the Subsidiary without Substantial Cause (including, without limitation, upon
termination of this Agreement following notice thereof by the Company or the
Subsidiary pursuant to Section 3 hereof) or by the Employee for Good Reason,
then, without further liability of the Subsidiary or the Company, except for
their obligations pursuant to this Section 10(a) and such rights and benefits
of participation of or in respect of the Employee under employee benefits
plans, programs and arrangements of the Company, the Subsidiary and their
Affiliates, in accordance with the terms and provisions of such plans, programs
and arrangements, the Employee shall be entitled to (i) medical and dental
benefits as provided immediately prior to the date of termination which shall
continue for the Severance Period (as hereinafter defined) (which shall be
terminated sooner to the extent provided by another employer) and (ii)
severance compensation for the Severance Period following any such termination,
payable in equal monthly installments, subject to withholding and other
applicable taxes, at an annual rate equal to the Employee's base salary for the
year of termination. In addition, the Employee will be entitled to a pro rata
portion of the bonus compensation referred to in Section 4(b) hereof for the
year of termination only as and
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<PAGE>
when ordinarily determined for such year. For the purposes of this Agreement,
"Severance Period" shall mean a period commencing on the date of any such
termination and ending on the expiration of the Employment Term (determined as
of the date of such termination without giving effect to such termination);
provided, however, that the Severance Period shall not be less than one year.
(b) If the Employee's employment is terminated for
any other reason, then without further liability of the Subsidiary or the
Company, the Employee shall be entitled to the salary, expenses and benefits
accrued to the termination date; provided, however, the Employee shall be
entitled to the bonus referred to in Section 4(b) hereof only in the case of
termination by the Employee of his employment pursuant to Section 7(c) hereof.
11. Notice. Any notices required or permitted hereunder shall
be in writing, signed and shall be deemed to have been given when personally
delivered or when mailed, certified or registered mail, postage prepaid, to the
following addresses:
If to the Employee:
James G. Cameron
12060 Eagle Trade Blvd. North
Coral Springs, FL 33071
If to the Subsidiary:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
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If to the Company:
Statia Terminals Group N. V.
c/o Statia Terminals Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address as for purposes of this Section by sending notice to the
other parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of twelve months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory
or other capacity for, any Competing Entity which conducts its business within
the Territory (as the terms Competing Entity and Territory are hereinafter
defined); provided, however, that notwithstanding the foregoing, the Employee
may make solely passive investments in any Competing Entity the common stock of
which is publicly held and of which the Employee shall not own or control,
directly or indirectly, in the aggregate securities which constitute 5% or more
of the voting rights or equity ownership of such Competing Entity; or (b)
solicit or divert any business or any customer from the Subsidiary or any
Affiliate of the Subsidiary or assist any person, firm or corporation in doing
so or attempting to do so; or (c) cause or seek to cause any person, firm or
corporation to refrain from dealing or doing business with the Subsidiary or
any Affiliate of the Subsidiary or assist any person, firm or corporation in
doing so. Notwithstanding any other provision of this Agreement to the
contrary, if the Employee's employment hereunder terminates under any
circumstances and there occurs a Change in Control (whether before or after
such termination of employment), the Employee shall thereupon automatically
cease to be bound by any covenants set forth in this Section 12.
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<PAGE>
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof is materially engaged in the Business; and (ii) the term "Territory"
shall mean the Caribbean and the area within a three hundred mile radius of (a)
the terminal facility operated by an Affiliate of the Subsidiary at Point
Tupper, Nova Scotia, and (b) any terminal hereafter operated by the Subsidiary
or any Affiliate of the Subsidiary.
13. General.
(a) Governing Law; Captions. The terms of this
Agreement shall be governed by and construed under the laws of the State of
Florida. Paragraph and Section captions used herein are for convenience of
reference only, and shall not in any way affect the meaning or interpretation
of this Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights and obligations of the Subsidiary hereunder shall
inure to the benefit of and bind the assignee or any person, firm or
corporation succeeding to all or substantially all of the business or assets of
the Subsidiary by purchase, merger or consolidation.
(c) Dispute Resolution. With the exception of the
Company's or the Subsidiary's right to elect to seek injunctive relief pursuant
to paragraph (g) of this Section 13, in the event of any dispute between either
the Company or the Subsidiary and the Employee arising out of or relating to
this Agreement or its termination or any other aspect of Employee's employment,
the parties hereby agree to submit such dispute to a non-binding mediation
under the American Arbitration Association's National Rules for the Resolution
of Employment Disputes; Arbitration and Mediation Rules (the "Rules") within
sixty (60) days of notice from any one of the parties to another. Unless the
parties can agree on a mediator within thirty (30) days of such notice,
mediation shall proceed pursuant to the Rules. In the event any such dispute is
not resolved by mediation, any party hereto may initiate an action or claim to
enforce any provision or term of this Agreement. Each party shall bear its or
his own costs and expenses (including attorney's fees) associated with any
mediation, action, or claim.
(d) Binding Effect. This Agreement is for the
employment of Employee, personally, and the services to be rendered by him must
be rendered by him and no other person. This Agreement shall be binding upon
and inure to the benefit of the Company, the Subsidiary, and the Employee and,
as the case may be, their respective successors and assigns, personal
representatives, heirs and legatees.
(e) Entire Agreement; Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
(f) Duration. Notwithstanding the Employment Term
hereunder, this Agreement shall continue for so long as any obligations remain
under this Agreement, including
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<PAGE>
without limitation any obligations of the Company or the Subsidiary under
Sections 9(b), 10 or 13 of this Agreement.
(g) Survival. The covenants set forth in Sections 6
and 12 of this Agreement shall survive and shall continue to be binding upon
Employee notwithstanding the termination of this Agreement for any reason
whatsoever. The covenants set forth in Section 6 and Section 12 of this
Agreement shall be deemed and construed as separate agreements independent of
any other provision of this Agreement. The existence of any claim or cause of
action by Employee against Company and/or Subsidiary, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by Company or Subsidiary of any or all covenants. It is expressly agreed that
the remedy at law for the breach of any such covenant is inadequate and that
injunctive relief shall be available to prevent the breach or any threatened
breach thereof.
(h) Severability. In case any provision in this
Agreement shall be held invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof will not in any
way be affected or impaired thereby and the parties shall in good faith agree
on a modification of the invalid, illegal or unenforceable provision which
renders it valid, legal or enforceable (as the case may be) and which as
closely as possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby
unconditionally guarantees to Employee the full and timely performance by
Subsidiary of its obligations under this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ Jack R. Pine
-----------------------------------
Name: Jack R. Pine
Title:
Statia Terminals Group N.V.
By: /s/ Jack R. Pine
-----------------------------------
Name: Jack R. Pine
Title:
By: /s/ James F. Brenner
-----------------------------------
Name: James F. Brenner
Title:
EMPLOYEE
/s/ James G. Cameron
--------------------------------------
James G. Cameron
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<PAGE>
EMPLOYMENT AGREEMENT
--------------------
This Agreement, originally made as of the 27th day of
November, 1996 between Statia Terminals Group N. V., a Netherlands Antilles
corporation, having a registered office at L.B. Smithplein 3, Curacao,
Netherlands Antilles (the "Company"); Statia Terminals, Inc., a Delaware
corporation, with offices at 800 Fairway Drive, Suite 295, Deerfield Beach,
Florida 33441 (the "Subsidiary"); and THOMAS M. THOMPSON, JR., an individual
with an address of 638 Middle River Drive, Ft. Lauderdale, Florida 33034 (the
"Employee"), is hereby amended and restated, effective April 28, 1999.
R E C I T A L S
---------------
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company acquired, directly or indirectly, all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary and is presently serving as Executive Vice President of the
Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods
and personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as Executive Vice
President of the Subsidiary and the Subsidiary hereby agrees to employ and
continue to employ the Employee as Executive Vice President, and the Employee
accepts such employment for the term of the employment specified in Section 3
hereof (the "Employment Term"). During the Employment Term, the Employee shall
serve as the Executive Vice President of the Subsidiary, performing such duties
and having such authority as shall be reasonably required of an executive-level
employee of the Subsidiary, reporting only to the Subsidiary's President and
Chief Executive Officer and the Board of Directors of the Subsidiary (the
"Board"), and shall have such other powers and perform such other additional
executive duties as may from time to time be assigned to him by such President
and Chief Executive Officer or the Board. Such duties being performed and such
authority being exercised shall be at least commensurate with the duties being
performed and authority being exercised by the Employee immediately prior to
the date of this Agreement.
<PAGE>
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all of
his time, energy, experience and talents during regular business hours and as
otherwise reasonably necessary to such employment, to the exclusion of all
other business activities; provided however, that such exclusion shall not
prohibit the Employee from attending to the Employee's personal matters and/or
financial and investment affairs (which financial or investment affairs shall
not conflict with the business of the Subsidiary or the Company and is subject
to the provisions of Section 12 hereof) during regular business hours as may
from time to time be reasonably necessary so long as attendance to such matters
and affairs does not interfere with the performance of the Employee's duties
hereunder.
3. Employment Term. Subject to earlier termination pursuant
to Section 7 hereof the Employment Term shall begin on March 31, 1999, and
continue until March 31, 2002; provided, however, that beginning on March 31,
2000, and on each anniversary of such date, the Employment Term shall
automatically renew for an additional one year beyond the end of the then
current term, unless, at least 90 days before March 31, 2000, or March 31 of
any succeeding year, either party gives notice to the other of his or its
desire to terminate this Agreement, in which case the Employment Term shall
terminate as of March 31, 2002, or the end of the then-current three-year term,
as applicable.
4. Compensation.
(a) Salary. During the Employment Term, the Company shall
cause the Subsidiary to pay the Employee a base salary, payable in equal
bi-weekly installments, subject to withholding and other applicable taxes, at
an annual amount of not less than two hundred forty-five thousand U.S. Dollars
($245,000). Such base salary shall be reviewed by the Board in January, 2000,
and at least annually thereafter, and shall be increased annually, effective
January 1 of the applicable year, but may not be reduced, from the amount in
effect for the immediately preceding year, at an annual rate not less than the
annual rate of increase in the Consumer Price Index as measured by the United
States Department of Labor, Bureau of Labor Statistics (the "BLS"), All Items,
Consumer Price Index for All Urban Consumers (the "CPI-U"), and any such
increased base salary shall be the Employee's "base salary" for purposes of
this Agreement. In determining the rate of such annual increase, the base shall
be the CPI-U for the first day of the calendar year preceding the year for
which the base salary increase is being calculated and such base shall be
compared with the CPI-U as of the last day of such year. If the CPI-U is no
longer published in substantially its current form by the BLS, then a successor
index shall be substituted by mutual agreement of the Company and the Employee.
(b) Cash Incentive Bonus. For the calendar year 1999 and
for each subsequent calendar year, or portion thereof, during the Employment
Term, a reasonable target EBITDA (as defined below) for each calendar year and
a target bonus for the Employee for such calendar year shall be submitted to
the Board by the chief executive officer, or the highest ranking officer then
in service, of the Subsidiary (the "CEO") and agreed to by the Board and the
CEO, and as soon as practicable after the end of each such calendar year as the
actual EBITDA achieved for such calendar year has been determined, the Company
shall cause the Subsidiary to pay to the Employee a lump-sum bonus determined
as described in this Section 4(b). No portion
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of such bonus will be paid if less than 85% of the target EBITDA is achieved in
the applicable calendar year. Payment of 85% of the target bonus would be made
if 85% of the target EBITDA is achieved, and if the actual EBITDA for the
applicable calendar year exceeds 85% of the target EBITDA for such year, the
percentage of the target bonus paid shall be the percentage of the target
EBITDA so achieved in such year. For example, if 92% of the target EBITDA is
achieved in a calendar year, 92% of the target bonus would be paid for such
year, or if 160% of the target EBITDA is achieved in a calendar year, 160% of
the target bonus would be paid for such year. If during the course of any
calendar year, the Company shall sell or otherwise dispose of five percent (5%)
or more of the total assets of the Company and its subsidiaries, the CEO and
the Board shall establish a revised EBITDA target for such calendar year after
receiving management's recommendation.
"EBITDA" shall mean for any period, the (a) net income (or
net loss) of the Company and its subsidiaries plus (b) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, (v) extraordinary or unusual losses deducted in calculating net income
(or net loss), and (vi) other non-cash charges less (c) extraordinary or
unusual gains and other non-cash income items added in calculating net income
(or net loss), in each case determined in accordance with generally accepted
accounting principles at the end of each such calendar year for the Company and
its subsidiaries on a consolidated basis, and plus (d) any fees paid to or
expenses incurred by the Company pursuant to any management or similar
agreement between the Company and any stockholder holding 50 percent or more of
the capital stock of the Company or an Affiliate thereof.
(c) Employee Benefits. The Employee shall be
entitled to and shall receive employee benefits or participate in plans and
programs maintained by or on behalf of the Company or the Subsidiary which are
otherwise made available to employees of the Subsidiary, including but not
limited to, medical, health, accident and disability plan, cafeteria plan,
retirement plan and 401(k) plan.
(d) Additional Benefits. In addition to the other
compensation payable to the Employee hereunder, during the Employment Term, the
Company shall cause the Subsidiary to furnish at its expense an automobile, or
a reasonable allowance in lieu thereof at the option of the Subsidiary, office,
reasonable secretarial services, professional association dues, continuing
professional education expenses and such other supplies, equipment, facilities,
services and emoluments appropriate to such Employee's position.
(e) Paid Time Off. Employee shall be entitled to
paid vacation, holidays, and sick leave during each calendar year of employment
in accordance with policies of the Subsidiary. Vacation may only be taken at
times mutually convenient for the Subsidiary and the Employee. The Subsidiary
may elect to pay out all accrued and unused vacation time as of December 31 of
any calendar year in January of the following calendar year. Such pay out will
be at the prevailing rate of annual compensation at the end of the immediately
preceding calendar year. No more than four weeks vacation time may be accrued
at any time.
5. Expenses. The Employee shall be entitled to be reimbursed
by the Subsidiary for all reasonable expenses incurred by him in connection
with the performance of his
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<PAGE>
duties hereunder in accordance with policies established by the Board from time
to time and upon receipt of appropriate documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only
to the extent required, after prompt notice to both the Company and the
Subsidiary of any such order), directly or indirectly, other than in the
regular and proper course of business of the Company and/or the Subsidiary, any
confidential knowledge or information with respect to the operations or
finances of the Subsidiary or the Company or any of their subsidiaries or
Affiliates, or with respect to confidential or secret processes, services,
techniques, customers or plans with respect to the Company and/or the
Subsidiary, and (b) the Employee will not use, directly or indirectly, any
confidential information for the benefit of anyone other than the Company
and/or the Subsidiary; provided, however, that the Employee has no obligation,
express or implied, to refrain from using or disclosing to others any such
knowledge or information which is or hereafter shall become available to the
public other than through disclosure by the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. ss. 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company
may deem necessary or appropriate to vest complete title and ownership of any
Work Product, and all rights therein, exclusively in the Subsidiary.
During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the Subsidiary or to commit any other action
that injures or hinders the business relationships of the Company and/or the
Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
7. Termination.
(a) Mutual Agreement. The employment of the Employee
hereunder may be terminated at any time by the mutual agreement of the parties
hereto.
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<PAGE>
(b) Termination for Substantial Cause. The Subsidiary may
at any time upon thirty (30) days prior written notice to the Employee,
terminate the employment of the Employee for Substantial Cause (as hereinafter
defined).
(c) Termination by the Employee The Employee shall be
entitled to terminate his employment without being in violation of any
provision of this Agreement upon 30 days prior written notice to the Subsidiary
(i) for Good Reason; (ii) upon "normal retirement" under any then-effective
plan or policy of the Subsidiary, or, in the absence of any such plan or
policy, under the terms of the CBI Pension Plan, as amended effective August 1,
1996, as if the Employee participated in such plan (whether or not he actually
so participated); or (iii) at any time and for any reason after the Employee
has attained the age of sixty (60) years.
(d) Termination by Death or Disability. The employment of
the Employee shall terminate upon the death of the Employee or the inability of
the Employee to perform his duties as a result of physical or mental disability
for an aggregate of 90 days in any 180 day period, as determined in good faith
by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of owning, leasing
or operating petroleum and other bulk liquid blending, trans-shipment, storage
or processing facilities or providing related terminaling services such as
supply of bunker fuel for vessels, emergency and spill response services;
brokering of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime
constituting a felony in the jurisdiction in which committed,
or for any other criminal act against the Subsidiary or the
Company involving dishonesty or willful misconduct intended
to injure the Subsidiary or the Company or any Affiliate of
either of them in any substantial way (whether or not a
felony and whether or not criminal proceedings are
initiated);
(ii) Failure or refusal of the Employee in
any material respect to perform his obligations under this
Agreement or the duties of his employment or to follow the
lawful and proper directives of the Board, other than by
reason of a Disability provided such duties or directives are
consistent with this Agreement, and such failure or refusal
continues uncured for a period of thirty (30) days after
written notice thereof from the Subsidiary to the Employee
which specifies (i) the nature of such failure or refusal,
and (ii) the reasonable action of the Employee necessary for
cure; or
(iii) Any willful or intentional misconduct
of the Employee (A) in violation of any written policy of the
Subsidiary providing for termination of employment in the
event of violation of such policy or (B) committed for the
purpose, or having the reasonably foreseeable effect, of
injuring in a substantial
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<PAGE>
way the Company, the Subsidiary, or any Affiliate of either
of them, or their respective businesses or reputations,
including, without limitation, causing the Subsidiary or any
of its Affiliates to violate a state or federal law relating
to the workplace environment.
(c) "Good Reason" shall mean:
(i) a significant reduction in the
authorities, duties, or responsibilities of Employee;
(ii) assignment to an office location which
is more than 100 miles from the office location of the
Employee as of the date of this Agreement;
(iii) material breach of this Agreement by
the Subsidiary or the Company which is not cured within
thirty (30) days after written notice of such breach is given
by the Employee to the Company and the Subsidiary; or
(iv) any failure of any successor to all or
substantially all of the assets or business of the Company or
the Subsidiary, by purchase, merger, consolidation or
otherwise, to fully assume the obligations of the Company or
the Subsidiary, as applicable, under this Agreement.
As applied to the Employee, the parties hereto agree that any position other
than Executive Vice President of the Subsidiary, or other than any superior
position with the Subsidiary, would constitute a significant reduction in the
authorities, duties or responsibilities of the Employee.
(d) "Change in Control" shall mean the occurrence of
the following: Castle Harlan Partners II L.P. and its Affiliates and their
partners ("CHP") cease to own or control at least fifty percent (50%) of the
aggregate number of the Company's outstanding class A common shares and class B
subordinated shares owned or controlled, directly or indirectly, by such
Persons as of the effective date of the amendment and restatement of this
Agreement; provided, however, that, the foregoing to the contrary
notwithstanding, in no event shall any Change in Control be deemed to occur,
for purposes of this Agreement, as the direct or indirect result of (i) the
occurrence of any of the transactions contemplated under the Purchase and Sale
Agreement, (ii) a public distribution of any such Company shares owned by CHP
(including any distribution of such shares to the partners of Castle Harlan
Partners II L.P.), or (iii) a sale or other distribution to any Competing
Entity, in one or more transactions, by CHP of not more than seven percent (7%)
of the aggregate number of the Company's outstanding class A common shares and
class B subordinated shares (provided, however, that a sale or distribution of
more than seven percent (7%) of such shares to a Competing Entity will be
deemed to be a Change in Control).
(e) "Affiliate" shall mean, with respect to any
Person, any entity that directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such
Person.
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<PAGE>
(f) "Person" shall mean any corporation,
partnership, limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization or other entity or organization.
(g) "Work Product" shall mean work product,
property, data documentation or information of any kind relating to the
Business, prepared, conceived, discovered, developed or created by the Employee
for the Subsidiary or any of the Subsidiary's Affiliates, clients or customers
while the Employee is employed by the Subsidiary.
(h) "Disability" shall have the meaning specified in
Section 7(d) hereof.
9. Insurance and Indemnification.
(a) Life Insurance. The Subsidiary may purchase
insurance on the life of the Employee, and if it does so, the Employee shall
cooperate fully by performing all the requirements of the life insurer which
are necessary conditions precedent to the issuance of the life insurance policy
issued by it.
(b) Directors and Officers Insurance and
Indemnification. The Subsidiary shall provide directors and officers insurance
covering the Employee for events occurring during the Employment Term on terms
at least as favorable as coverage for Directors of the Company, and the
Subsidiary shall provide indemnification to the Employee to the full extent
allowed by the law of its jurisdiction of incorporation.
10. Severance
(a) If the Employee's employment is terminated by the
Subsidiary without Substantial Cause (including, without limitation, upon
termination of this Agreement following notice thereof by the Company or the
Subsidiary pursuant to Section 3 hereof) or by the Employee for Good Reason,
then, without further liability of the Subsidiary or the Company, except for
their obligations pursuant to this Section 10(a) and such rights and benefits
of participation of or in respect of the Employee under employee benefits
plans, programs and arrangements of the Company, the Subsidiary and their
Affiliates, in accordance with the terms and provisions of such plans, programs
and arrangements, the Employee shall be entitled to (i) medical and dental
benefits as provided immediately prior to the date of termination which shall
continue for the Severance Period (as hereinafter defined) (which shall be
terminated sooner to the extent provided by another employer) and (ii)
severance compensation for the Severance Period following any such termination,
payable in equal monthly installments, subject to withholding and other
applicable taxes, at an annual rate equal to the Employee's base salary for the
year of termination. In addition, the Employee will be entitled to a pro rata
portion of the bonus compensation referred to in Section 4(b) hereof for the
year of termination only as and when ordinarily determined for such year. For
the purposes of this Agreement, "Severance Period" shall mean a period
commencing on the date of any such termination and ending on the expiration of
the Employment Term (determined as of the date of such termination without
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giving effect to such termination); provided, however, that the Severance
Period shall not be less than one year.
(b) If the Employee's employment is terminated for any
other reason, then without further liability of the Subsidiary or the Company,
the Employee shall be entitled to the salary, expenses and benefits accrued to
the termination date; provided, however, the Employee shall be entitled to the
bonus referred to in Section 4(b) hereof only in the case of termination by the
Employee of his employment pursuant to Section 7(c) hereof.
11. Notice. Any notices required or permitted hereunder
shall be in writing, signed and shall be deemed to have been given when
personally delivered or when mailed, certified or registered mail, postage
prepaid, to the following addresses:
If to the Employee:
Thomas M. Thompson, Jr.
638 Middle River Drive
Ft. Lauderdale, Florida 33304
If to the Subsidiary:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
If to the Company:
Statia Terminals Group N. V.
c/o Statia Terminals Inc.
800 Fairway Drive
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Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address as for purposes of this Section by sending notice to the
other parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of twelve months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory
or other capacity for, any Competing Entity which conducts its business within
the Territory (as the terms Competing Entity and Territory are hereinafter
defined); provided, however, that notwithstanding the foregoing, the Employee
may make solely passive investments in any Competing Entity the common stock of
which is publicly held and of which the Employee shall not own or control,
directly or indirectly, in the aggregate securities which constitute 5% or more
of the voting rights or equity ownership of such Competing Entity; or (b)
solicit or divert any business or any customer from the Subsidiary or any
Affiliate of the Subsidiary or assist any person, firm or corporation in doing
so or attempting to do so; or (c) cause or seek to cause any person, firm or
corporation to refrain from dealing or doing business with the Subsidiary or
any Affiliate of the Subsidiary or assist any person, firm or corporation in
doing so. Notwithstanding any other provision of this Agreement to the
contrary, if the Employee's employment hereunder terminates under any
circumstances and there occurs a Change in Control (whether before or after
such termination of employment), the Employee shall thereupon automatically
cease to be bound by any covenants set forth in this Section 12.
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof is materially engaged in the Business; and (ii) the term "Territory"
shall mean the Caribbean and the area within a three hundred mile radius of (a)
the terminal facility operated by an Affiliate of the Subsidiary at Point
Tupper, Nova
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<PAGE>
Scotia, and (b) any terminal hereafter operated by the Subsidiary or any
Affiliate of the Subsidiary.
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<PAGE>
13. General.
(a) Governing Law; Captions. The terms of this Agreement
shall be governed by and construed under the laws of the State of Florida.
Paragraph and Section captions used herein are for convenience of reference
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights and obligations of the Subsidiary hereunder shall
inure to the benefit of and bind the assignee or any person, firm or
corporation succeeding to all or substantially all of the business or assets of
the Subsidiary by purchase, merger or consolidation.
(c) Dispute Resolution. With the exception of the
Company's or the Subsidiary's right to elect to seek injunctive relief pursuant
to paragraph (g) of this Section 13, in the event of any dispute between either
the Company or the Subsidiary and the Employee arising out of or relating to
this Agreement or its termination or any other aspect of Employee's employment,
the parties hereby agree to submit such dispute to a non-binding mediation
under the American Arbitration Association's National Rules for the Resolution
of Employment Disputes; Arbitration and Mediation Rules (the "Rules") within
sixty (60) days of notice from any one of the parties to another. Unless the
parties can agree on a mediator within thirty (30) days of such notice,
mediation shall proceed pursuant to the Rules. In the event any such dispute is
not resolved by mediation, any party hereto may initiate an action or claim to
enforce any provision or term of this Agreement. Each party shall bear its or
his own costs and expenses (including attorney's fees) associated with any
mediation, action, or claim.
(d) Binding Effect. This Agreement is for the employment
of Employee, personally, and the services to be rendered by him must be
rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company, the Subsidiary, and the Employee and, as
the case may be, their respective successors and assigns, personal
representatives, heirs and legatees.
(e) Entire Agreement; Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
(f) Duration. Notwithstanding the Employment Term
hereunder, this Agreement shall continue for so long as any obligations remain
under this Agreement, including without limitation any obligations of the
Company or the Subsidiary under Sections 9(b), 10 or 13 of this Agreement.
(g) Survival. The covenants set forth in Sections 6 and
12 of this Agreement shall survive and shall continue to be binding
upon Employee notwithstanding the termination of this Agreement for any reason
whatsoever. The covenants set forth in Section 6 and Section 12 of this
Agreement shall be deemed and construed as separate agreements
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<PAGE>
independent of any other provision of this Agreement. The existence of any
claim or cause of action by Employee against Company and/or Subsidiary, whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement by Company or Subsidiary of any or all covenants. It is
expressly agreed that the remedy at law for the breach of any such covenant is
inadequate and that injunctive relief shall be available to prevent the breach
or any threatened breach thereof.
(h) Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby and the parties shall in good faith agree on a
modification of the invalid, illegal or unenforceable provision which renders
it valid, legal or enforceable (as the case may be) and which as closely as
possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby
unconditionally guarantees to Employee the full and timely performance by
Subsidiary of its obligations under this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ Jack R. Pine
-----------------------------------
Name: Jack R. Pine
Title:
Statia Terminals Group N.V.
By: /s/ Jack R. Pine
-----------------------------------
Name: Jack R. Pine
Title:
By: /s/ James G. Cameron
-----------------------------------
Name: James G. Cameron
Title:
EMPLOYEE
/s/ Thomas M. Thompson, Jr.
-----------------------------------------
Thomas M. Thompson, Jr.
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<PAGE>
EMPLOYMENT AGREEMENT
--------------------
This Agreement, originally made as of the 27th day of
November, 1996 between Statia Terminals Group N. V., a Netherlands Antilles
corporation, having a registered office at L.B. Smithplein 3, Curacao,
Netherlands Antilles (the "Company"); Statia Terminals, Inc., a Delaware
corporation, with offices at 800 Fairway Drive, Suite 295, Deerfield Beach,
Florida 33441 (the "Subsidiary"); and ROBERT R. RUSSO, an individual with an
address of 13205 S.W. 72nd Avenue, South Miami, Florida 33156 (the "Employee"),
is hereby amended and restated, effective April 28, 1999.
R E C I T A L S
---------------
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company acquired, directly or indirectly, all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary and is presently serving as Senior Vice President of the
Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods
and personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as Senior Vice
President of the Subsidiary and the Subsidiary hereby agrees to employ and
continue to employ the Employee as Senior Vice President, and the Employee
accepts such employment for the term of the employment specified in Section 3
hereof (the "Employment Term"). During the Employment Term, the Employee shall
serve as the Senior Vice President of the Subsidiary, performing such duties
and having such authority as shall be reasonably required of an executive-level
employee of the Subsidiary, reporting only to the Subsidiary's President and
Chief Executive Officer and the Board of Directors of the Subsidiary (the
"Board"), and shall have such other powers and perform such other additional
executive duties as may from time to time be assigned to him by such President
and Chief Executive Officer or the Board. Such duties being performed and such
authority being exercised shall be at least commensurate with the duties being
performed and authority being exercised by the Employee immediately prior to
the date of this Agreement.
<PAGE>
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all of
his time, energy, experience and talents during regular business hours and as
otherwise reasonably necessary to such employment, to the exclusion of all
other business activities; provided however, that such exclusion shall not
prohibit the Employee from attending to the Employee's personal matters and/or
financial and investment affairs (which financial or investment affairs shall
not conflict with the business of the Subsidiary or the Company and is subject
to the provisions of Section 12 hereof) during regular business hours as may
from time to time be reasonably necessary so long as attendance to such matters
and affairs does not interfere with the performance of the Employee's duties
hereunder.
3. Employment Term. Subject to earlier termination pursuant
to Section 7 hereof the Employment Term shall begin on March 31, 1999, and
continue until March 31, 2002; provided, however, that beginning on March 31,
2000, and on each anniversary of such date, the Employment Term shall
automatically renew for an additional one year beyond the end of the then
current term, unless, at least 90 days before March 31, 2000, or March 31 of
any succeeding year, either party gives notice to the other of his or its
desire to terminate this Agreement, in which case the Employment Term shall
terminate as of March 31, 2002, or the end of the then-current three-year term,
as applicable.
4. Compensation.
(a) Salary. During the Employment Term, the Company shall
cause the Subsidiary to pay the Employee a base salary, payable in equal
bi-weekly installments, subject to withholding and other applicable taxes, at
an annual amount of not less than two hundred thirty thousand U.S. Dollars
($230,000). Such base salary shall be reviewed by the Board in January, 2000,
and at least annually thereafter, and shall be increased annually, effective
January 1 of the applicable year, but may not be reduced, from the amount in
effect for the immediately preceding year, at an annual rate not less than the
annual rate of increase in the Consumer Price Index as measured by the United
States Department of Labor, Bureau of Labor Statistics (the "BLS"), All Items,
Consumer Price Index for All Urban Consumers (the "CPI-U"), and any such
increased base salary shall be the Employee's "base salary" for purposes of
this Agreement. In determining the rate of such annual increase, the base shall
be the CPI-U for the first day of the calendar year preceding the year for
which the base salary increase is being calculated and such base shall be
compared with the CPI-U as of the last day of such year. If the CPI-U is no
longer published in substantially its current form by the BLS, then a successor
index shall be substituted by mutual agreement of the Company and the Employee.
(b) Cash Incentive Bonus. For the calendar year 1999 and
for each subsequent calendar year, or portion thereof, during the Employment
Term, a reasonable target EBITDA (as defined below) for each calendar year and
a target bonus for the Employee for such calendar year shall be submitted to
the Board by the chief executive officer, or the highest ranking officer then
in service, of the Subsidiary (the "CEO") and agreed to by the Board and the
CEO, and as soon as practicable after the end of each such calendar year as the
actual EBITDA achieved for such calendar year has been determined, the Company
shall cause the Subsidiary to pay to the Employee a lump-sum bonus determined
as described in this Section 4(b). No portion
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<PAGE>
of such bonus will be paid if less than 85% of the target EBITDA is achieved in
the applicable calendar year. Payment of 85% of the target bonus would be made
if 85% of the target EBITDA is achieved, and if the actual EBITDA for the
applicable calendar year exceeds 85% of the target EBITDA for such year, the
percentage of the target bonus paid shall be the percentage of the target
EBITDA so achieved in such year. For example, if 92% of the target EBITDA is
achieved in a calendar year, 92% of the target bonus would be paid for such
year, or if 160% of the target EBITDA is achieved in a calendar year, 160% of
the target bonus would be paid for such year. If during the course of any
calendar year, the Company shall sell or otherwise dispose of five percent (5%)
or more of the total assets of the Company and its subsidiaries, the CEO and
the Board shall establish a revised EBITDA target for such calendar year after
receiving management's recommendation.
"EBITDA" shall mean for any period, the (a) net income (or
net loss) of the Company and its subsidiaries plus (b) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, (v) extraordinary or unusual losses deducted in calculating net income
(or net loss), and (vi) other non-cash charges less (c) extraordinary or
unusual gains and other non-cash income items added in calculating net income
(or net loss), in each case determined in accordance with generally accepted
accounting principles at the end of each such calendar year for the Company and
its subsidiaries on a consolidated basis, and plus (d) any fees paid to or
expenses incurred by the Company pursuant to any management or similar
agreement between the Company and any stockholder holding 50 percent or more of
the capital stock of the Company or an Affiliate thereof.
(c) Employee Benefits. The Employee shall be
entitled to and shall receive employee benefits or participate in plans and
programs maintained by or on behalf of the Company or the Subsidiary which are
otherwise made available to employees of the Subsidiary, including but not
limited to, medical, health, accident and disability plan, cafeteria plan,
retirement plan and 401(k) plan.
(d) Additional Benefits. In addition to the other
compensation payable to the Employee hereunder, during the Employment Term, the
Company shall cause the Subsidiary to furnish at its expense an automobile, or
a reasonable allowance in lieu thereof at the option of the Subsidiary, office,
reasonable secretarial services, professional association dues, continuing
professional education expenses and such other supplies, equipment, facilities,
services and emoluments appropriate to such Employee's position.
(e) Paid Time Off. Employee shall be entitled to
paid vacation, holidays, and sick leave during each calendar year of employment
in accordance with policies of the Subsidiary. Vacation may only be taken at
times mutually convenient for the Subsidiary and the Employee. The Subsidiary
may elect to pay out all accrued and unused vacation time as of December 31 of
any calendar year in January of the following calendar year. Such pay out will
be at the prevailing rate of annual compensation at the end of the immediately
preceding calendar year. No more than four weeks vacation time may be accrued
at any time.
5. Expenses. The Employee shall be entitled to be reimbursed
by the Subsidiary for all reasonable expenses incurred by him in connection
with the performance of his
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<PAGE>
duties hereunder in accordance with policies established by the Board from time
to time and upon receipt of appropriate documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only
to the extent required, after prompt notice to both the Company and the
Subsidiary of any such order), directly or indirectly, other than in the
regular and proper course of business of the Company and/or the Subsidiary, any
confidential knowledge or information with respect to the operations or
finances of the Subsidiary or the Company or any of their subsidiaries or
Affiliates, or with respect to confidential or secret processes, services,
techniques, customers or plans with respect to the Company and/or the
Subsidiary, and (b) the Employee will not use, directly or indirectly, any
confidential information for the benefit of anyone other than the Company
and/or the Subsidiary; provided, however, that the Employee has no obligation,
express or implied, to refrain from using or disclosing to others any such
knowledge or information which is or hereafter shall become available to the
public other than through disclosure by the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. ss. 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company
may deem necessary or appropriate to vest complete title and ownership of any
Work Product, and all rights therein, exclusively in the Subsidiary.
During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the Subsidiary or to commit any other action
that injures or hinders the business relationships of the Company and/or the
Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
7. Termination.
(a) Mutual Agreement. The employment of the Employee
hereunder may be terminated at any time by the mutual agreement of the parties
hereto.
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<PAGE>
(b) Termination for Substantial Cause. The Subsidiary may
at any time upon thirty (30) days prior written notice to the Employee,
terminate the employment of the Employee for Substantial Cause (as hereinafter
defined).
(c) Termination by the Employee The Employee shall be
entitled to terminate his employment without being in violation of any
provision of this Agreement upon 30 days prior written notice to the Subsidiary
(i) for Good Reason; (ii) upon "normal retirement" under any then-effective
plan or policy of the Subsidiary, or, in the absence of any such plan or
policy, under the terms of the CBI Pension Plan, as amended effective August 1,
1996, as if the Employee participated in such plan (whether or not he actually
so participated); or (iii) at any time and for any reason after the Employee
has attained the age of sixty (60) years.
(d) Termination by Death or Disability. The employment of
the Employee shall terminate upon the death of the Employee or the inability of
the Employee to perform his duties as a result of physical or mental disability
for an aggregate of 90 days in any 180 day period, as determined in good faith
by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of owning, leasing
or operating petroleum and other bulk liquid blending, trans-shipment, storage
or processing facilities or providing related terminaling services such as
supply of bunker fuel for vessels, emergency and spill response services;
brokering of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime constituting
a felony in the jurisdiction in which committed, or for any
other criminal act against the Subsidiary or the Company
involving dishonesty or willful misconduct intended to injure
the Subsidiary or the Company or any Affiliate of either of
them in any substantial way (whether or not a felony and
whether or not criminal proceedings are initiated);
(ii) Failure or refusal of the Employee in any
material respect to perform his obligations under this
Agreement or the duties of his employment or to follow the
lawful and proper directives of the Board, other than by
reason of a Disability provided such duties or directives are
consistent with this Agreement, and such failure or refusal
continues uncured for a period of thirty (30) days after
written notice thereof from the Subsidiary to the Employee
which specifies (i) the nature of such failure or refusal,
and (ii) the reasonable action of the Employee necessary for
cure; or
(iii) Any willful or intentional misconduct of the
Employee (A) in violation of any written policy of the
Subsidiary providing for termination of employment in the
event of violation of such policy or (B) committed for the
purpose, or having the reasonably foreseeable effect, of
injuring in a substantial
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<PAGE>
way the Company, the Subsidiary, or any Affiliate of either
of them, or their respective businesses or reputations,
including, without limitation, causing the Subsidiary or any
of its Affiliates to violate a state or federal law relating
to the workplace environment.
(c) "Good Reason" shall mean:
(i) a significant reduction in the authorities,
duties, or responsibilities of Employee;
(ii) assignment to an office location which is more
than 100 miles from the office location of the Employee as of
the date of this Agreement;
(iii) material breach of this Agreement by the
Subsidiary or the Company which is not cured within thirty
(30) days after written notice of such breach is given by the
Employee to the Company and the Subsidiary; or
(iv) any failure of any successor to all or
substantially all of the assets or business of the Company or
the Subsidiary, by purchase, merger, consolidation or
otherwise, to fully assume the obligations of the Company or
the Subsidiary, as applicable, under this Agreement.
As applied to the Employee, the parties hereto agree that any position other
than Senior Vice President of the Subsidiary, or other than any superior
position with the Subsidiary, would constitute a significant reduction in the
authorities, duties or responsibilities of the Employee.
(d) "Change in Control" shall mean the occurrence of
the following: Castle Harlan Partners II L.P. and its Affiliates and their
partners ("CHP") cease to own or control at least fifty percent (50%) of the
aggregate number of the Company's outstanding class A common shares and class B
subordinated shares owned or controlled, directly or indirectly, by such
Persons as of the effective date of the amendment and restatement of this
Agreement; provided, however, that, the foregoing to the contrary
notwithstanding, in no event shall any Change in Control be deemed to occur,
for purposes of this Agreement, as the direct or indirect result of (i) the
occurrence of any of the transactions contemplated under the Purchase and Sale
Agreement, (ii) a public distribution of any such Company shares owned by CHP
(including any distribution of such shares to the partners of Castle Harlan
Partners II L.P.), or (iii) a sale or other distribution to any Competing
Entity, in one or more transactions, by CHP of not more than seven percent (7%)
of the aggregate number of the Company's outstanding class A common shares and
class B subordinated shares (provided, however, that a sale or distribution of
more than seven percent (7%) of such shares to a Competing Entity will be
deemed to be a Change in Control).
(e) "Affiliate" shall mean, with respect to any
Person, any entity that directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such
Person.
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<PAGE>
(f) "Person" shall mean any corporation,
partnership, limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization or other entity or organization.
(g) "Work Product" shall mean work product,
property, data documentation or information of any kind relating to the
Business, prepared, conceived, discovered, developed or created by the Employee
for the Subsidiary or any of the Subsidiary's Affiliates, clients or customers
while the Employee is employed by the Subsidiary.
(h) "Disability" shall have the meaning specified in
Section 7(d) hereof.
9. Insurance and Indemnification.
(a) Life Insurance. The Subsidiary may purchase
insurance on the life of the Employee, and if it does so, the Employee shall
cooperate fully by performing all the requirements of the life insurer which
are necessary conditions precedent to the issuance of the life insurance policy
issued by it.
(b) Directors and Officers Insurance and
Indemnification. The Subsidiary shall provide directors and officers insurance
covering the Employee for events occurring during the Employment Term on terms
at least as favorable as coverage for Directors of the Company, and the
Subsidiary shall provide indemnification to the Employee to the full extent
allowed by the law of its jurisdiction of incorporation.
10. Severance
(a) If the Employee's employment is terminated by the
Subsidiary without Substantial Cause (including, without limitation, upon
termination of this Agreement following notice thereof by the Company or the
Subsidiary pursuant to Section 3 hereof) or by the Employee for Good Reason,
then, without further liability of the Subsidiary or the Company, except for
their obligations pursuant to this Section 10(a) and such rights and benefits
of participation of or in respect of the Employee under employee benefits
plans, programs and arrangements of the Company, the Subsidiary and their
Affiliates, in accordance with the terms and provisions of such plans, programs
and arrangements, the Employee shall be entitled to (i) medical and dental
benefits as provided immediately prior to the date of termination which shall
continue for the Severance Period (as hereinafter defined) (which shall be
terminated sooner to the extent provided by another employer) and (ii)
severance compensation for the Severance Period following any such termination,
payable in equal monthly installments, subject to withholding and other
applicable taxes, at an annual rate equal to the Employee's base salary for the
year of termination. In addition, the Employee will be entitled to a pro rata
portion of the bonus compensation referred to in Section 4(b) hereof for the
year of termination only as and when ordinarily determined for such year. For
the purposes of this Agreement, "Severance Period" shall mean a period
commencing on the date of any such termination and ending on the expiration of
the Employment Term (determined as of the date of such termination without
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<PAGE>
giving effect to such termination); provided, however, that the Severance
Period shall not be less than one year.
(b) If the Employee's employment is terminated for any
other reason, then without further liability of the Subsidiary or the Company,
the Employee shall be entitled to the salary, expenses and benefits accrued to
the termination date; provided, however, the Employee shall be entitled to the
bonus referred to in Section 4(b) hereof only in the case of termination by the
Employee of his employment pursuant to Section 7(c) hereof.
11. Notice. Any notices required or permitted hereunder shall
be in writing, signed and shall be deemed to have been given when personally
delivered or when mailed, certified or registered mail, postage prepaid, to the
following addresses:
If to the Employee:
Robert R. Russo
13205 S.W. 72nd Avenue
South Miami, Florida 33156
If to the Subsidiary:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
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<PAGE>
If to the Company:
Statia Terminals Group N. V.
c/o Statia Terminals Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address as for purposes of this Section by sending notice to the
other parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of twelve months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory
or other capacity for, any Competing Entity which conducts its business within
the Territory (as the terms Competing Entity and Territory are hereinafter
defined); provided, however, that notwithstanding the foregoing, the Employee
may make solely passive investments in any Competing Entity the common stock of
which is publicly held and of which the Employee shall not own or control,
directly or indirectly, in the aggregate securities which constitute 5% or more
of the voting rights or equity ownership of such Competing Entity; or (b)
solicit or divert any business or any customer from the Subsidiary or any
Affiliate of the Subsidiary or assist any person, firm or corporation in doing
so or attempting to do so; or (c) cause or seek to cause any person, firm or
corporation to refrain from dealing or doing business with the Subsidiary or
any Affiliate of the Subsidiary or assist any person, firm or corporation in
doing so. Notwithstanding any other provision of this Agreement to the
contrary, if the Employee's employment hereunder terminates under any
circumstances and there occurs a
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<PAGE>
Change in Control (whether before or after such termination of employment), the
Employee shall thereupon automatically cease to be bound by any covenants set
forth in this Section 12.
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof is materially engaged in the Business; and (ii) the term "Territory"
shall mean the Caribbean and the area within a three hundred mile radius of (a)
the terminal facility operated by an Affiliate of the Subsidiary at Point
Tupper, Nova Scotia, and (b) any terminal hereafter operated by the Subsidiary
or any Affiliate of the Subsidiary.
13. General.
(a) Governing Law; Captions. The terms of this Agreement
shall be governed by and construed under the laws of the State of Florida.
Paragraph and Section captions used herein are for convenience of reference
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights and obligations of the Subsidiary hereunder shall
inure to the benefit of and bind the assignee or any person, firm or
corporation succeeding to all or substantially all of the business or assets of
the Subsidiary by purchase, merger or consolidation.
(c) Dispute Resolution. With the exception of the
Company's or the Subsidiary's right to elect to seek injunctive relief pursuant
to paragraph (g) of this Section 13, in the event of any dispute between either
the Company or the Subsidiary and the Employee arising out of or relating to
this Agreement or its termination or any other aspect of Employee's employment,
the parties hereby agree to submit such dispute to a non-binding mediation
under the American Arbitration Association's National Rules for the Resolution
of Employment Disputes; Arbitration and Mediation Rules (the "Rules") within
sixty (60) days of notice from any one of the parties to another. Unless the
parties can agree on a mediator within thirty (30) days of such notice,
mediation shall proceed pursuant to the Rules. In the event any such dispute is
not resolved by mediation, any party hereto may initiate an action or claim to
enforce any provision or term of this Agreement. Each party shall bear its or
his own costs and expenses (including attorney's fees) associated with any
mediation, action, or claim.
(d) Binding Effect. This Agreement is for the employment
of Employee, personally, and the services to be rendered by him must be
rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company, the Subsidiary, and the Employee and, as
the case may be, their respective successors and assigns, personal
representatives, heirs and legatees.
(e) Entire Agreement; Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
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<PAGE>
(f) Duration. Notwithstanding the Employment Term
hereunder, this Agreement shall continue for so long as any obligations remain
under this Agreement, including without limitation any obligations of the
Company or the Subsidiary under Sections 9(b), 10 or 13 of this Agreement.
(g) Survival. The covenants set forth in Sections 6 and
12 of this Agreement shall survive and shall continue to be binding upon
Employee notwithstanding the termination of this Agreement for any reason
whatsoever. The covenants set forth in Section 6 and Section 12 of this
Agreement shall be deemed and construed as separate agreements independent of
any other provision of this Agreement. The existence of any claim or cause of
action by Employee against Company and/or Subsidiary, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by Company or Subsidiary of any or all covenants. It is expressly agreed that
the remedy at law for the breach of any such covenant is inadequate and that
injunctive relief shall be available to prevent the breach or any threatened
breach thereof.
(h) Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby and the parties shall in good faith agree on a
modification of the invalid, illegal or unenforceable provision which renders
it valid, legal or enforceable (as the case may be) and which as closely as
possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby
unconditionally guarantees to Employee the full and timely performance by
Subsidiary of its obligations under this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ Jack R. Pine
--------------------------------------
Name: Jack R. Pine
Title:
Statia Terminals Group N.V.
By: /s/ Jack R. Pine
--------------------------------------
Name: Jack R. Pine
Title:
By: /s/ James G. Cameron
--------------------------------------
Name: James G. Cameron
Title:
EMPLOYEE
/s/ Robert R. Russo
-----------------------------------------
Robert R. Russo
<PAGE>
EMPLOYMENT AGREEMENT
--------------------
This Agreement, originally made as of the 27th day of
November, 1996 between Statia Terminals Group N. V., a Netherlands Antilles
corporation, having a registered office at L.B. Smithplein 3, Curacao,
Netherlands Antilles (the "Company"); Statia Terminals, Inc., a Delaware
corporation, with offices at 800 Fairway Drive, Suite 295, Deerfield Beach,
Florida 33441 (the "Subsidiary"); and JACK R. PINE, an individual with an
address of 4525 Middaugh Avenue, Downers Grove, Illinois 60515 (the
"Employee"), is hereby amended and restated, effective April 28, 1999.
R E C I T A L S
---------------
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company acquired, directly or indirectly, all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary and is presently serving as Senior Vice President, General
Counsel and Secretary of the Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods
and personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as Senior Vice
President, General Counsel and Secretary of the Subsidiary and the Subsidiary
hereby agrees to employ and continue to employ the Employee as Senior Vice
President, General Counsel and Secretary, and the Employee accepts such
employment for the term of the employment specified in Section 3 hereof (the
"Employment Term"). During the Employment Term, the Employee shall serve as the
Senior Vice President, General Counsel and Secretary of the Subsidiary,
performing such duties and having such authority as shall be reasonably
required of an executive-level employee of the Subsidiary, reporting only to
the Subsidiary's President and Chief Executive Officer and the Board of
Directors of the Subsidiary (the "Board"), and shall have such other powers and
perform such other additional executive duties as may from time to time be
assigned to him by such President and Chief Executive Officer or the Board.
Such duties being performed and such
<PAGE>
authority being exercised shall be at least commensurate with the duties being
performed and authority being exercised by the Employee immediately prior to
the date of this Agreement.
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all of
his time, energy, experience and talents during regular business hours and as
otherwise reasonably necessary to such employment, to the exclusion of all
other business activities; provided however, that such exclusion shall not
prohibit the Employee from attending to the Employee's personal matters and/or
financial and investment affairs (which financial or investment affairs shall
not conflict with the business of the Subsidiary or the Company and is subject
to the provisions of Section 12 hereof) during regular business hours as may
from time to time be reasonably necessary so long as attendance to such matters
and affairs does not interfere with the performance of the Employee's duties
hereunder.
3. Employment Term. Subject to earlier termination pursuant to
Section 7 hereof the Employment Term shall begin on March 31, 1999, and
continue until March 31, 2002; provided, however, that beginning on March 31,
2000, and on each anniversary of such date, the Employment Term shall
automatically renew for an additional one year beyond the end of the then
current term, unless, at least 90 days before March 31, 2000, or March 31 of
any succeeding year, either party gives notice to the other of his or its
desire to terminate this Agreement, in which case the Employment Term shall
terminate as of March 31, 2002, or the end of the then-current three-year term,
as applicable.
4. Compensation.
(a) Salary. During the Employment Term, the Company shall
cause the Subsidiary to pay the Employee a base salary, payable in equal
bi-weekly installments, subject to withholding and other applicable taxes, at
an annual amount of not less than one hundred fifty thousand U.S. Dollars
($150,000). Such base salary shall be reviewed by the Board in January, 2000,
and at least annually thereafter, and shall be increased annually, effective
January 1 of the applicable year, but may not be reduced, from the amount in
effect for the immediately preceding year, at an annual rate not less than the
annual rate of increase in the Consumer Price Index as measured by the United
States Department of Labor, Bureau of Labor Statistics (the "BLS"), All Items,
Consumer Price Index for All Urban Consumers (the "CPI-U"), and any such
increased base salary shall be the Employee's "base salary" for purposes of
this Agreement. In determining the rate of such annual increase, the base shall
be the CPI-U for the first day of the calendar year preceding the year for
which the base salary increase is being calculated and such base shall be
compared with the CPI-U as of the last day of such year. If the CPI-U is no
longer published in substantially its current form by the BLS, then a successor
index shall be substituted by mutual agreement of the Company and the Employee.
(b) Cash Incentive Bonus. For the calendar year 1999 and
for each subsequent calendar year, or portion thereof, during the Employment
Term, a reasonable target EBITDA (as defined below) for each calendar year and
a target bonus for the Employee for such calendar year shall be submitted to
the Board by the chief executive officer, or the highest ranking officer then
in service, of the Subsidiary (the "CEO") and agreed to by the Board and the
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<PAGE>
CEO, and as soon as practicable after the end of each such calendar year as the
actual EBITDA achieved for such calendar year has been determined, the Company
shall cause the Subsidiary to pay to the Employee a lump-sum bonus determined
as described in this Section 4(b). No portion of such bonus will be paid if
less than 85% of the target EBITDA is achieved in the applicable calendar year.
Payment of 85% of the target bonus would be made if 85% of the target EBITDA is
achieved, and if the actual EBITDA for the applicable calendar year exceeds 85%
of the target EBITDA for such year, the percentage of the target bonus paid
shall be the percentage of the target EBITDA so achieved in such year. For
example, if 92% of the target EBITDA is achieved in a calendar year, 92% of the
target bonus would be paid for such year, or if 160% of the target EBITDA is
achieved in a calendar year, 160% of the target bonus would be paid for such
year. If during the course of any calendar year, the Company shall sell or
otherwise dispose of five percent (5%) or more of the total assets of the
Company and its subsidiaries, the CEO and the Board shall establish a revised
EBITDA target for such calendar year after receiving management's
recommendation.
"EBITDA" shall mean for any period, the (a) net income (or
net loss) of the Company and its subsidiaries plus (b) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, (v) extraordinary or unusual losses deducted in calculating net income
(or net loss), and (vi) other non-cash charges less (c) extraordinary or
unusual gains and other non-cash income items added in calculating net income
(or net loss), in each case determined in accordance with generally accepted
accounting principles at the end of each such calendar year for the Company and
its subsidiaries on a consolidated basis, and plus (d) any fees paid to or
expenses incurred by the Company pursuant to any management or similar
agreement between the Company and any stockholder holding 50 percent or more of
the capital stock of the Company or an Affiliate thereof.
(c) Employee Benefits. The Employee shall be
entitled to and shall receive employee benefits or participate in plans and
programs maintained by or on behalf of the Company or the Subsidiary which are
otherwise made available to employees of the Subsidiary, including but not
limited to, medical, health, accident and disability plan, cafeteria plan,
retirement plan and 401(k) plan.
(d) Additional Benefits. In addition to the other
compensation payable to the Employee hereunder, during the Employment Term, the
Company shall cause the Subsidiary to furnish at its expense an automobile, or
a reasonable allowance in lieu thereof at the option of the Subsidiary, office,
reasonable secretarial services, professional association dues, continuing
professional education expenses and such other supplies, equipment, facilities,
services and emoluments appropriate to such Employee's position.
(e) Paid Time Off. Employee shall be entitled to
paid vacation, holidays, and sick leave during each calendar year of employment
in accordance with policies of the Subsidiary. Vacation may only be taken at
times mutually convenient for the Subsidiary and the Employee. The Subsidiary
may elect to pay out all accrued and unused vacation time as of December 31 of
any calendar year in January of the following calendar year. Such pay out will
be at the prevailing rate of annual compensation at the end of the immediately
preceding calendar year. No more than four weeks vacation time may be accrued
at any time.
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<PAGE>
5. Expenses. The Employee shall be entitled to be reimbursed
by the Subsidiary for all reasonable expenses incurred by him in connection
with the performance of his duties hereunder in accordance with policies
established by the Board from time to time and upon receipt of appropriate
documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only
to the extent required, after prompt notice to both the Company and the
Subsidiary of any such order), directly or indirectly, other than in the
regular and proper course of business of the Company and/or the Subsidiary, any
confidential knowledge or information with respect to the operations or
finances of the Subsidiary or the Company or any of their subsidiaries or
Affiliates, or with respect to confidential or secret processes, services,
techniques, customers or plans with respect to the Company and/or the
Subsidiary, and (b) the Employee will not use, directly or indirectly, any
confidential information for the benefit of anyone other than the Company
and/or the Subsidiary; provided, however, that the Employee has no obligation,
express or implied, to refrain from using or disclosing to others any such
knowledge or information which is or hereafter shall become available to the
public other than through disclosure by the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. ss. 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company
may deem necessary or appropriate to vest complete title and ownership of any
Work Product, and all rights therein, exclusively in the Subsidiary.
During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the Subsidiary or to commit any other action
that injures or hinders the business relationships of the Company and/or the
Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
7. Termination.
(a) Mutual Agreement. The employment of the Employee
hereunder may be terminated at any time by the mutual agreement of the parties
hereto.
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<PAGE>
(b) Termination for Substantial Cause. The Subsidiary may
at any time upon thirty (30) days prior written notice to the Employee,
terminate the employment of the Employee for Substantial Cause (as hereinafter
defined).
(c) Termination by the Employee. The Employee shall be
entitled to terminate his employment without being in violation of any
provision of this Agreement upon 30 days prior written notice to the Subsidiary
(i) for Good Reason; (ii) upon "normal retirement" under any then-effective
plan or policy of the Subsidiary, or, in the absence of any such plan or
policy, under the terms of the CBI Pension Plan, as amended effective August 1,
1996, as if the Employee participated in such plan (whether or not he actually
so participated); or (iii) at any time and for any reason after the Employee
has attained the age of sixty (60) years.
(d) Termination by Death or Disability. The employment of
the Employee shall terminate upon the death of the Employee or the inability of
the Employee to perform his duties as a result of physical or mental disability
for an aggregate of 90 days in any 180 day period, as determined in good faith
by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of owning, leasing
or operating petroleum and other bulk liquid blending,
trans-shipment, storage or processing facilities or providing
related terminaling services such as supply of bunker fuel
for vessels, emergency and spill response services; brokering
of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime constituting
a felony in the jurisdiction in which committed, or for any
other criminal act against the Subsidiary or the Company
involving dishonesty or willful misconduct intended to injure
the Subsidiary or the Company or any Affiliate of either of
them in any substantial way (whether or not a felony and
whether or not criminal proceedings are initiated);
(ii) Failure or refusal of the Employee in any
material respect to perform his obligations under this
Agreement or the duties of his employment or to follow the
lawful and proper directives of the Board, other than by
reason of a Disability provided such duties or directives are
consistent with this Agreement, and such failure or refusal
continues uncured for a period of thirty (30) days after
written notice thereof from the Subsidiary to the Employee
which specifies (i) the nature of such failure or refusal,
and (ii) the reasonable action of the Employee necessary for
cure; or
(iii) Any willful or intentional misconduct of the
Employee (A) in violation of any written policy of the
Subsidiary providing for termination of employment in the
event of violation of such policy or (B) committed for the
purpose, or having the reasonably foreseeable effect, of
injuring in a substantial
-5-
<PAGE>
way the Company, the Subsidiary, or any Affiliate of either of
them, or their respective businesses or reputations,
including, without limitation, causing the Subsidiary or any
of its Affiliates to violate a state or federal law relating
to the workplace environment.
(c) "Good Reason" shall mean:
(i) a significant reduction in the authorities,
duties, or responsibilities of Employee;
(ii) assignment to an office location which is more
than 100 miles from the office location of the Employee as of
the date of this Agreement;
(iii) material breach of this Agreement by the
Subsidiary or the Company which is not cured within thirty
(30) days after written notice of such breach is given by the
Employee to the Company and the Subsidiary; or
(iv) any failure of any successor to all or
substantially all of the assets or business of the Company or
the Subsidiary, by purchase, merger, consolidation or
otherwise, to fully assume the obligations of the Company or
the Subsidiary, as applicable, under this Agreement.
As applied to the Employee, the parties hereto agree that any position other
than Senior Vice President, General Counsel and Secretary of the Subsidiary, or
other than any superior position with the Subsidiary, would constitute a
significant reduction in the authorities, duties or responsibilities of the
Employee.
(d) "Change in Control" shall mean the occurrence of the
following: Castle Harlan Partners II L.P. and its Affiliates and their partners
("CHP") cease to own or control at least fifty percent (50%) of the aggregate
number of the Company's outstanding class A common shares and class B
subordinated shares owned or controlled, directly or indirectly, by such
Persons as of the effective date of the amendment and restatement of this
Agreement; provided, however, that, the foregoing to the contrary
notwithstanding, in no event shall any Change in Control be deemed to occur,
for purposes of this Agreement, as the direct or indirect result of (i) the
occurrence of any of the transactions contemplated under the Purchase and Sale
Agreement, (ii) a public distribution of any such Company shares owned by CHP
(including any distribution of such shares to the partners of Castle Harlan
Partners II L.P.), or (iii) a sale or other distribution to any Competing
Entity, in one or more transactions, by CHP of not more than seven percent (7%)
of the aggregate number of the Company's outstanding class A common shares and
class B subordinated shares (provided, however, that a sale or distribution of
more than seven percent (7%) of such shares to a Competing Entity will be
deemed to be a Change in Control).
(e) "Affiliate" shall mean, with respect to any Person,
any entity that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with such Person.
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<PAGE>
(f) "Person" shall mean any corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or other entity or organization.
(g) "Work Product" shall mean work product, property, data
documentation or information of any kind relating to the Business, prepared,
conceived, discovered, developed or created by the Employee for the Subsidiary
or any of the Subsidiary's Affiliates, clients or customers while the Employee
is employed by the Subsidiary.
(h) "Disability" shall have the meaning specified in
Section 7(d) hereof.
9. Insurance and Indemnification.
(a) Life Insurance. The Subsidiary may purchase insurance
on the life of the Employee, and if it does so, the Employee shall cooperate
fully by performing all the requirements of the life insurer which are
necessary conditions precedent to the issuance of the life insurance policy
issued by it.
(b) Directors and Officers Insurance and Indemnification.
The Subsidiary shall provide directors and officers insurance covering the
Employee for events occurring during the Employment Term on terms at least as
favorable as coverage for Directors of the Company, and the Subsidiary shall
provide indemnification to the Employee to the full extent allowed by the law
of its jurisdiction of incorporation.
10. Severance
(a) If the Employee's employment is terminated by the
Subsidiary without Substantial Cause (including, without limitation, upon
termination of this Agreement following notice thereof by the Company or the
Subsidiary pursuant to Section 3 hereof) or by the Employee for Good Reason,
then, without further liability of the Subsidiary or the Company, except for
their obligations pursuant to this Section 10(a) and such rights and benefits
of participation of or in respect of the Employee under employee benefits
plans, programs and arrangements of the Company, the Subsidiary and their
Affiliates, in accordance with the terms and provisions of such plans, programs
and arrangements, the Employee shall be entitled to (i) medical and dental
benefits as provided immediately prior to the date of termination which shall
continue for the Severance Period (as hereinafter defined) (which shall be
terminated sooner to the extent provided by another employer) and (ii)
severance compensation for the Severance Period following any such termination,
payable in equal monthly installments, subject to withholding and other
applicable taxes, at an annual rate equal to the Employee's base salary for the
year of termination. In addition, the Employee will be entitled to a pro rata
portion of the bonus compensation referred to in Section 4(b) hereof for the
year of termination only as and when ordinarily determined for such year. For
the purposes of this Agreement, "Severance Period" shall mean a period
commencing on the date of any such termination and ending on the expiration of
the Employment Term (determined as of the date of such termination without
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<PAGE>
giving effect to such termination); provided, however, that the Severance Period
shall not be less than one year.
(b) If the Employee's employment is terminated for any
other reason, then without further liability of the Subsidiary or the Company,
the Employee shall be entitled to the salary, expenses and benefits accrued to
the termination date; provided, however, the Employee shall be entitled to the
bonus referred to in Section 4(b) hereof only in the case of termination by the
Employee of his employment pursuant to Section 7(c) hereof.
11. Notice. Any notices required or permitted hereunder shall
be in writing, signed and shall be deemed to have been given when personally
delivered or when mailed, certified or registered mail, postage prepaid, to the
following addresses:
If to the Employee:
Jack R. Pine
4525 Middaugh Avenue
Downers Grove, Illinois 60515
If to the Subsidiary:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
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<PAGE>
If to the Company:
Statia Terminals Group N. V.
c/o Statia Terminals Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address as for purposes of this Section by sending notice to the
other parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of twelve months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory
or other capacity for, any Competing Entity which conducts its business within
the Territory (as the terms Competing Entity and Territory are hereinafter
defined); provided, however, that notwithstanding the foregoing, the Employee
may make solely passive investments in any Competing Entity the common stock of
which is publicly held and of which the Employee shall not own or control,
directly or indirectly, in the aggregate securities which constitute 5% or more
of the voting rights or equity ownership of such Competing Entity; or (b)
solicit or divert any business or any customer from the Subsidiary or any
Affiliate of the Subsidiary or assist any person, firm or corporation in doing
so or attempting to do so; or (c) cause or seek to cause any person, firm or
corporation to refrain from dealing or doing business with the Subsidiary or
any Affiliate of the Subsidiary or assist any person, firm or corporation in
doing so. Notwithstanding any other provision of this Agreement to the
contrary, if the Employee's employment hereunder terminates under any
circumstances and there occurs a Change in Control (whether before or after
such termination of employment), the Employee shall thereupon automatically
cease to be bound by any covenants set forth in this Section 12.
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<PAGE>
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof is materially engaged in the Business; and (ii) the term "Territory"
shall mean the Caribbean and the area within a three hundred mile radius of (a)
the terminal facility operated by an Affiliate of the Subsidiary at Point
Tupper, Nova Scotia, and (b) any terminal hereafter operated by the Subsidiary
or any Affiliate of the Subsidiary.
13. General.
(a) Governing Law; Captions. The terms of this Agreement
shall be governed by and construed under the laws of the State of Florida.
Paragraph and Section captions used herein are for convenience of reference
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights and obligations of the Subsidiary hereunder shall
inure to the benefit of and bind the assignee or any person, firm or
corporation succeeding to all or substantially all of the business or assets of
the Subsidiary by purchase, merger or consolidation.
(c) Dispute Resolution. With the exception of the
Company's or the Subsidiary's right to elect to seek injunctive relief pursuant
to paragraph (g) of this Section 13, in the event of any dispute between either
the Company or the Subsidiary and the Employee arising out of or relating to
this Agreement or its termination or any other aspect of Employee's employment,
the parties hereby agree to submit such dispute to a non-binding mediation
under the American Arbitration Association's National Rules for the Resolution
of Employment Disputes; Arbitration and Mediation Rules (the "Rules") within
sixty (60) days of notice from any one of the parties to another. Unless the
parties can agree on a mediator within thirty (30) days of such notice,
mediation shall proceed pursuant to the Rules. In the event any such dispute is
not resolved by mediation, any party hereto may initiate an action or claim to
enforce any provision or term of this Agreement. Each party shall bear its or
his own costs and expenses (including attorney's fees) associated with any
mediation, action, or claim.
(d) Binding Effect. This Agreement is for the employment
of Employee, personally, and the services to be rendered by him must be
rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company, the Subsidiary, and the Employee and, as
the case may be, their respective successors and assigns, personal
representatives, heirs and legatees.
(e) Entire Agreement; Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
(f) Duration. Notwithstanding the Employment Term
hereunder, this Agreement shall continue for so long as any obligations remain
under this Agreement, including
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<PAGE>
without limitation any obligations of the Company or the Subsidiary under
Sections 9(b), 10 or 13 of this Agreement.
(g) Survival. The covenants set forth in Sections 6 and
12 of this Agreement shall survive and shall continue to be binding
upon Employee notwithstanding the termination of this Agreement for any reason
whatsoever. The covenants set forth in Section 6 and Section 12 of this
Agreement shall be deemed and construed as separate agreements independent of
any other provision of this Agreement. The existence of any claim or cause of
action by Employee against Company and/or Subsidiary, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by Company or Subsidiary of any or all covenants. It is expressly agreed that
the remedy at law for the breach of any such covenant is inadequate and that
injunctive relief shall be available to prevent the breach or any threatened
breach thereof.
(h) Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby and the parties shall in good faith agree on a
modification of the invalid, illegal or unenforceable provision which renders
it valid, legal or enforceable (as the case may be) and which as closely as
possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby
unconditionally guarantees to Employee the full and timely performance by
Subsidiary of its obligations under this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ James G. Cameron
--------------------------------------
Name: James G. Cameron
Title:
Statia Terminals Group N.V.
By: /s/ David B. Pittaway
--------------------------------------
Name: David B. Pittaway
Title:
By: /s/ James G. Cameron
--------------------------------------
Name: James G. Cameron
Title:
EMPLOYEE
/s/ Jack R. Pine
-----------------------------------------
Jack R. Pine
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<PAGE>
EMPLOYMENT AGREEMENT
--------------------
This Agreement, originally made as of the 27th day of
November, 1996 between Statia Terminals Group N. V., a Netherlands Antilles
corporation, having a registered office at L.B. Smithplein 3, Curacao,
Netherlands Antilles (the "Company"); Statia Terminals, Inc., a Delaware
corporation, with offices at 800 Fairway Drive, Suite 295, Deerfield Beach,
Florida 33441 (the "Subsidiary"); and JOHN D. FRANKLIN, an individual with an
address of 9601 Orange Drive, Ft. Lauderdale, Florida 33328 (the "Employee"),
is hereby amended and restated, effective April 28, 1999.
R E C I T A L S
---------------
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company acquired, directly or indirectly, all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary and is presently serving as Vice President--Marine Fuel Sales
of the Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods
and personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as Vice
President--Marine Fuel Sales of the Subsidiary and the Subsidiary hereby agrees
to employ and continue to employ the Employee as Vice President--Marine Fuel
Sales, and the Employee accepts such employment for the term of the employment
specified in Section 3 hereof (the "Employment Term"). During the Employment
Term, the Employee shall serve as the Vice President--Marine Fuel Sales of the
Subsidiary, performing such duties and having such authority as shall be
reasonably required of an executive-level employee of the Subsidiary, reporting
only to the Subsidiary's President and Chief Executive Officer and the Board of
Directors of the Subsidiary (the "Board"), and shall have such other powers and
perform such other additional executive duties as may from time to time be
assigned to him by such President and Chief Executive Officer or the Board.
Such duties being performed and such authority being exercised shall be at
least commensurate with the
<PAGE>
duties being performed and authority being exercised by the Employee immediately
prior to the date of this Agreement.
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all of
his time, energy, experience and talents during regular business hours and as
otherwise reasonably necessary to such employment, to the exclusion of all
other business activities; provided however, that such exclusion shall not
prohibit the Employee from attending to the Employee's personal matters and/or
financial and investment affairs (which financial or investment affairs shall
not conflict with the business of the Subsidiary or the Company and is subject
to the provisions of Section 12 hereof) during regular business hours as may
from time to time be reasonably necessary so long as attendance to such matters
and affairs does not interfere with the performance of the Employee's duties
hereunder.
3. Employment Term. Subject to earlier termination pursuant
to Section 7 hereof the Employment Term shall begin on March 31, 1999, and
continue until March 31, 2002; provided, however, that beginning on March 31,
2000, and on each anniversary of such date, the Employment Term shall
automatically renew for an additional one year beyond the end of the then
current term, unless, at least 90 days before March 31, 2000, or March 31 of
any succeeding year, either party gives notice to the other of his or its
desire to terminate this Agreement, in which case the Employment Term shall
terminate as of March 31, 2002, or the end of the then-current three-year term,
as applicable.
4. Compensation.
(a) Salary. During the Employment Term, the Company shall
cause the Subsidiary to pay the Employee a base salary, payable in equal
bi-weekly installments, subject to withholding and other applicable taxes, at
an annual amount of not less than one hundred fifty thousand U.S. Dollars
($150,000). Such base salary shall be reviewed by the Board in January, 2000,
and at least annually thereafter, and shall be increased annually, effective
January 1 of the applicable year, but may not be reduced, from the amount in
effect for the immediately preceding year, at an annual rate not less than the
annual rate of increase in the Consumer Price Index as measured by the United
States Department of Labor, Bureau of Labor Statistics (the "BLS"), All Items,
Consumer Price Index for All Urban Consumers (the "CPI-U"), and any such
increased base salary shall be the Employee's "base salary" for purposes of
this Agreement. In determining the rate of such annual increase, the base shall
be the CPI-U for the first day of the calendar year preceding the year for
which the base salary increase is being calculated and such base shall be
compared with the CPI-U as of the last day of such year. If the CPI-U is no
longer published in substantially its current form by the BLS, then a successor
index shall be substituted by mutual agreement of the Company and the Employee.
(b) Cash Incentive Bonus. For the calendar year 1999 and
for each subsequent calendar year, or portion thereof, during the Employment
Term, a reasonable target EBITDA (as defined below) for each calendar year and
a target bonus for the Employee for such calendar year shall be submitted to
the Board by the chief executive officer, or the highest ranking officer then
in service, of the Subsidiary (the "CEO") and agreed to by the Board and the
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<PAGE>
CEO, and as soon as practicable after the end of each such calendar year as the
actual EBITDA achieved for such calendar year has been determined, the Company
shall cause the Subsidiary to pay to the Employee a lump-sum bonus determined
as described in this Section 4(b). No portion of such bonus will be paid if
less than 85% of the target EBITDA is achieved in the applicable calendar year.
Payment of 85% of the target bonus would be made if 85% of the target EBITDA is
achieved, and if the actual EBITDA for the applicable calendar year exceeds 85%
of the target EBITDA for such year, the percentage of the target bonus paid
shall be the percentage of the target EBITDA so achieved in such year. For
example, if 92% of the target EBITDA is achieved in a calendar year, 92% of the
target bonus would be paid for such year, or if 160% of the target EBITDA is
achieved in a calendar year, 160% of the target bonus would be paid for such
year. If during the course of any calendar year, the Company shall sell or
otherwise dispose of five percent (5%) or more of the total assets of the
Company and its subsidiaries, the CEO and the Board shall establish a revised
EBITDA target for such calendar year after receiving management's
recommendation.
"EBITDA" shall mean for any period, the (a) net income (or
net loss) of the Company and its subsidiaries plus (b) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, (v) extraordinary or unusual losses deducted in calculating net income
(or net loss), and (vi) other non-cash charges less (c) extraordinary or
unusual gains and other non-cash income items added in calculating net income
(or net loss), in each case determined in accordance with generally accepted
accounting principles at the end of each such calendar year for the Company and
its subsidiaries on a consolidated basis, and plus (d) any fees paid to or
expenses incurred by the Company pursuant to any management or similar
agreement between the Company and any stockholder holding 50 percent or more of
the capital stock of the Company or an Affiliate thereof.
(c) Employee Benefits. The Employee shall be entitled to
and shall receive employee benefits or participate in plans and programs
maintained by or on behalf of the Company or the Subsidiary which are otherwise
made available to employees of the Subsidiary, including but not limited to,
medical, health, accident and disability plan, cafeteria plan, retirement plan
and 401(k) plan.
(d) Additional Benefits. In addition to the other
compensation payable to the Employee hereunder, during the Employment Term, the
Company shall cause the Subsidiary to furnish at its expense an automobile, or
a reasonable allowance in lieu thereof at the option of the Subsidiary, office,
reasonable secretarial services, professional association dues, continuing
professional education expenses and such other supplies, equipment, facilities,
services and emoluments appropriate to such Employee's position.
(e) Paid Time Off. Employee shall be entitled to paid
vacation, holidays, and sick leave during each calendar year of employment in
accordance with policies of the Subsidiary. Vacation may only be taken at times
mutually convenient for the Subsidiary and the Employee. The Subsidiary may
elect to pay out all accrued and unused vacation time as of December 31 of any
calendar year in January of the following calendar year. Such pay out will be
at the prevailing rate of annual compensation at the end of the immediately
preceding calendar year. No more than four weeks vacation time may be accrued
at any time.
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<PAGE>
5. Expenses. The Employee shall be entitled to be
reimbursed by the Subsidiary for all reasonable expenses incurred by him in
connection with the performance of his duties hereunder in accordance with
policies established by the Board from time to time and upon receipt of
appropriate documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only
to the extent required, after prompt notice to both the Company and the
Subsidiary of any such order), directly or indirectly, other than in the
regular and proper course of business of the Company and/or the Subsidiary, any
confidential knowledge or information with respect to the operations or
finances of the Subsidiary or the Company or any of their subsidiaries or
Affiliates, or with respect to confidential or secret processes, services,
techniques, customers or plans with respect to the Company and/or the
Subsidiary, and (b) the Employee will not use, directly or indirectly, any
confidential information for the benefit of anyone other than the Company
and/or the Subsidiary; provided, however, that the Employee has no obligation,
express or implied, to refrain from using or disclosing to others any such
knowledge or information which is or hereafter shall become available to the
public other than through disclosure by the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. ss. 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company
may deem necessary or appropriate to vest complete title and ownership of any
Work Product, and all rights therein, exclusively in the Subsidiary.
During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the Subsidiary or to commit any other action
that injures or hinders the business relationships of the Company and/or the
Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
7. Termination.
(a) Mutual Agreement. The employment of the Employee
hereunder may be terminated at any time by the mutual agreement of the parties
hereto.
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<PAGE>
(b) Termination for Substantial Cause. The Subsidiary may
at any time upon thirty (30) days prior written notice to the Employee,
terminate the employment of the Employee for Substantial Cause (as hereinafter
defined).
(c) Termination by the Employee. The Employee shall be
entitled to terminate his employment without being in violation of any
provision of this Agreement upon 30 days prior written notice to the Subsidiary
(i) for Good Reason; (ii) upon "normal retirement" under any then-effective
plan or policy of the Subsidiary, or, in the absence of any such plan or
policy, under the terms of the CBI Pension Plan, as amended effective August 1,
1996, as if the Employee participated in such plan (whether or not he actually
so participated); or (iii) at any time and for any reason after the Employee
has attained the age of sixty (60) years.
(d) Termination by Death or Disability. The employment of
the Employee shall terminate upon the death of the Employee or the inability of
the Employee to perform his duties as a result of physical or mental disability
for an aggregate of 90 days in any 180 day period, as determined in good faith
by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of owning, leasing
or operating petroleum and other bulk liquid blending, trans-shipment, storage
or processing facilities or providing related terminaling services such as
supply of bunker fuel for vessels, emergency and spill response services;
brokering of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime constituting
a felony in the jurisdiction in which committed, or for any
other criminal act against the Subsidiary or the Company
involving dishonesty or willful misconduct intended to injure
the Subsidiary or the Company or any Affiliate of either of
them in any substantial way (whether or not a felony and
whether or not criminal proceedings are initiated);
(ii) Failure or refusal of the Employee in any
material respect to perform his obligations under this
Agreement or the duties of his employment or to follow the
lawful and proper directives of the Board, other than by
reason of a Disability provided such duties or directives are
consistent with this Agreement, and such failure or refusal
continues uncured for a period of thirty (30) days after
written notice thereof from the Subsidiary to the Employee
which specifies (i) the nature of such failure or refusal,
and (ii) the reasonable action of the Employee necessary for
cure; or
(iii)Any willful or intentional misconduct of the
Employee (A) in violation of any written policy of the
Subsidiary providing for termination of employment in the
event of violation of such policy or (B) committed for the
purpose, or having the reasonably foreseeable effect, of
injuring in a substantial
-5-
<PAGE>
way the Company, the Subsidiary, or any Affiliate of either
of them, or their respective businesses or reputations,
including, without limitation, causing the Subsidiary or any
of its Affiliates to violate a state or federal law relating
to the workplace environment.
c) "Good Reason" shall mean:
(i) a significant reduction in the authorities,
duties, or responsibilities of Employee;
(ii) assignment to an office location which is more
than 100 miles from the office location of the Employee as of
the date of this Agreement;
(iii) material breach of this Agreement by the
Subsidiary or the Company which is not cured within thirty
(30) days after written notice of such breach is given by the
Employee to the Company and the Subsidiary; or
(iv) any failure of any successor to all or
substantially all of the assets or business of the Company or
the Subsidiary, by purchase, merger, consolidation or
otherwise, to fully assume the obligations of the Company or
the Subsidiary, as applicable, under this Agreement.
As applied to the Employee, the parties hereto agree that any position other
than Vice President--Marine Fuel Sales of the Subsidiary, or other than any
superior position with the Subsidiary, would constitute a significant reduction
in the authorities, duties or responsibilities of the Employee.
(d) "Change in Control" shall mean the occurrence of the
following: Castle Harlan Partners II L.P. and its Affiliates and their partners
("CHP") cease to own or control at least fifty percent (50%) of the aggregate
number of the Company's outstanding class A common shares and class B
subordinated shares owned or controlled, directly or indirectly, by such
Persons as of the effective date of the amendment and restatement of this
Agreement; provided, however, that, the foregoing to the contrary
notwithstanding, in no event shall any Change in Control be deemed to occur,
for purposes of this Agreement, as the direct or indirect result of (i) the
occurrence of any of the transactions contemplated under the Purchase and Sale
Agreement, (ii) a public distribution of any such Company shares owned by CHP
(including any distribution of such shares to the partners of Castle Harlan
Partners II L.P.), or (iii) a sale or other distribution to any Competing
Entity, in one or more transactions, by CHP of not more than seven percent (7%)
of the aggregate number of the Company's outstanding class A common shares and
class B subordinated shares (provided, however, that a sale or distribution of
more than seven percent (7%) of such shares to a Competing Entity will be
deemed to be a Change in Control).
(e) "Affiliate" shall mean, with respect to any Person,
any entity that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with such Person.
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<PAGE>
(f) "Person" shall mean any corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or other entity or organization.
(g) "Work Product" shall mean work product, property,
data documentation or information of any kind relating to the Business,
prepared, conceived, discovered, developed or created by the Employee for the
Subsidiary or any of the Subsidiary's Affiliates, clients or customers while
the Employee is employed by the Subsidiary.
(h) "Disability" shall have the meaning specified in
Section 7(d) hereof.
9. Insurance and Indemnification.
(a) Life Insurance. The Subsidiary may purchase insurance
on the life of the Employee, and if it does so, the Employee shall cooperate
fully by performing all the requirements of the life insurer which are
necessary conditions precedent to the issuance of the life insurance policy
issued by it.
(b) Directors and Officers Insurance and Indemnification.
The Subsidiary shall provide directors and officers insurance covering the
Employee for events occurring during the Employment Term on terms at least as
favorable as coverage for Directors of the Company, and the Subsidiary shall
provide indemnification to the Employee to the full extent allowed by the law
of its jurisdiction of incorporation.
10. Severance
(a) If the Employee's employment is terminated by the
Subsidiary without Substantial Cause (including, without limitation, upon
termination of this Agreement following notice thereof by the Company or the
Subsidiary pursuant to Section 3 hereof) or by the Employee for Good Reason,
then, without further liability of the Subsidiary or the Company, except for
their obligations pursuant to this Section 10(a) and such rights and benefits
of participation of or in respect of the Employee under employee benefits
plans, programs and arrangements of the Company, the Subsidiary and their
Affiliates, in accordance with the terms and provisions of such plans, programs
and arrangements, the Employee shall be entitled to (i) medical and dental
benefits as provided immediately prior to the date of termination which shall
continue for the Severance Period (as hereinafter defined) (which shall be
terminated sooner to the extent provided by another employer) and (ii)
severance compensation for the Severance Period following any such termination,
payable in equal monthly installments, subject to withholding and other
applicable taxes, at an annual rate equal to the Employee's base salary for the
year of termination. In addition, the Employee will be entitled to a pro rata
portion of the bonus compensation referred to in Section 4(b) hereof for the
year of termination only as and when ordinarily determined for such year. For
the purposes of this Agreement, "Severance Period" shall mean a period
commencing on the date of any such termination and ending on the expiration of
the Employment Term (determined as of the date of such termination without
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<PAGE>
giving effect to such termination); provided, however, that the Severance
Period shall not be less than one year.
(b) If the Employee's employment is terminated for any
other reason, then without further liability of the Subsidiary or the Company,
the Employee shall be entitled to the salary, expenses and benefits accrued to
the termination date; provided, however, the Employee shall be entitled to the
bonus referred to in Section 4(b) hereof only in the case of termination by the
Employee of his employment pursuant to Section 7(c) hereof.
11. Notice. Any notices required or
permitted hereunder shall be in writing, signed and shall be deemed to have
been given when personally delivered or when mailed, certified or registered
mail, postage prepaid, to the following addresses:
If to the Employee:
John D. Franklin
9601 Orange Drive
Ft. Lauderdale, Florida 33328
If to the Subsidiary:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
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<PAGE>
If to the Company:
Statia Terminals Group N. V.
c/o Statia Terminals Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address as for purposes of this Section by sending notice to the
other parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of twelve months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory
or other capacity for, any Competing Entity which conducts its business within
the Territory (as the terms Competing Entity and Territory are hereinafter
defined); provided, however, that notwithstanding the foregoing, the Employee
may make solely passive investments in any Competing Entity the common stock of
which is publicly held and of which the Employee shall not own or control,
directly or indirectly, in the aggregate securities which constitute 5% or more
of the voting rights or equity ownership of such Competing Entity; or (b)
solicit or divert any business or any customer from the Subsidiary or any
Affiliate of the Subsidiary or assist any person, firm or corporation in doing
so or attempting to do so; or (c) cause or seek to cause any person, firm or
corporation to refrain from dealing or doing business with the Subsidiary or
any Affiliate of the Subsidiary or assist any person, firm or corporation in
doing so. Notwithstanding any other provision of this Agreement to the
contrary, if the Employee's employment hereunder terminates under any
circumstances and there occurs a Change in Control (whether before or after
such termination of employment), the Employee shall thereupon automatically
cease to be bound by any covenants set forth in this Section 12.
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<PAGE>
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof is materially engaged in the Business; and (ii) the term "Territory"
shall mean the Caribbean and the area within a three hundred mile radius of (a)
the terminal facility operated by an Affiliate of the Subsidiary at Point
Tupper, Nova Scotia, and (b) any terminal hereafter operated by the Subsidiary
or any Affiliate of the Subsidiary.
13. General.
(a) Governing Law; Captions. The terms of this Agreement
shall be governed by and construed under the laws of the State of Florida.
Paragraph and Section captions used herein are for convenience of reference
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights and obligations of the Subsidiary hereunder shall
inure to the benefit of and bind the assignee or any person, firm or
corporation succeeding to all or substantially all of the business or assets of
the Subsidiary by purchase, merger or consolidation.
(c) Dispute Resolution. With the exception of the
Company's or the Subsidiary's right to elect to seek injunctive relief pursuant
to paragraph (g) of this Section 13, in the event of any dispute between either
the Company or the Subsidiary and the Employee arising out of or relating to
this Agreement or its termination or any other aspect of Employee's employment,
the parties hereby agree to submit such dispute to a non-binding mediation
under the American Arbitration Association's National Rules for the Resolution
of Employment Disputes; Arbitration and Mediation Rules (the "Rules") within
sixty (60) days of notice from any one of the parties to another. Unless the
parties can agree on a mediator within thirty (30) days of such notice,
mediation shall proceed pursuant to the Rules. In the event any such dispute is
not resolved by mediation, any party hereto may initiate an action or claim to
enforce any provision or term of this Agreement. Each party shall bear its or
his own costs and expenses (including attorney's fees) associated with any
mediation, action, or claim.
(d) Binding Effect. This Agreement is for the employment
of Employee, personally, and the services to be rendered by him must be
rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company, the Subsidiary, and the Employee and, as
the case may be, their respective successors and assigns, personal
representatives, heirs and legatees.
(e) Entire Agreement; Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
(f) Duration. Notwithstanding the Employment Term
hereunder, this Agreement shall continue for so long as any obligations remain
under this Agreement, including
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<PAGE>
without limitation any obligations of the Company or the Subsidiary under
Sections 9(b), 10 or 13 of this Agreement.
(g) Survival. The covenants set forth in Sections 6 and 12
of this Agreement shall survive and shall continue to be binding upon Employee
notwithstanding the termination of this Agreement for any reason whatsoever.
The covenants set forth in Section 6 and Section 12 of this Agreement shall be
deemed and construed as separate agreements independent of any other provision
of this Agreement. The existence of any claim or cause of action by Employee
against Company and/or Subsidiary, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Company or
Subsidiary of any or all covenants. It is expressly agreed that the remedy at
law for the breach of any such covenant is inadequate and that injunctive
relief shall be available to prevent the breach or any threatened breach
thereof.
(h) Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby and the parties shall in good faith agree on a
modification of the invalid, illegal or unenforceable provision which renders
it valid, legal or enforceable (as the case may be) and which as closely as
possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby
unconditionally guarantees to Employee the full and timely performance by
Subsidiary of its obligations under this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ Jack R. Pine
--------------------------------------
Name: Jack R. Pine
Title:
Statia Terminals Group N.V.
By: /s/ Jack R. Pine
--------------------------------------
Name: Jack R. Pine
Title:
By: /s/ James G. Cameron
--------------------------------------
Name: James G. Cameron
Title:
EMPLOYEE
/s/ John D. Franklin
-----------------------------------------
John D. Franklin
12
<PAGE>
EMPLOYMENT AGREEMENT
--------------------
This Agreement, originally made as of the 27th day of
November, 1996 between Statia Terminals Group N. V., a Netherlands Antilles
corporation, having a registered office at L.B. Smithplein 3, Curacao,
Netherlands Antilles (the "Company"); Statia Terminals, Inc., a Delaware
corporation, with offices at 800 Fairway Drive, Suite 295, Deerfield Beach,
Florida 33441 (the "Subsidiary"); and JAMES F. BRENNER, an individual with an
address of 14510 West Palomino Drive, Ft. Lauderdale, Florida 33330 (the
"Employee"), is hereby amended and restated, effective April 28, 1999.
R E C I T A L S
---------------
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company acquired, directly or indirectly, all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary and is presently serving as Vice President--Finance,
Treasurer and Assistant Secretary of the Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods
and personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as Vice
President--Finance, Treasurer and Assistant Secretary of the Subsidiary and the
Subsidiary hereby agrees to employ and continue to employ the Employee as Vice
President--Finance, Treasurer and Assistant Secretary, and the Employee accepts
such employment for the term of the employment specified in Section 3 hereof
(the "Employment Term"). During the Employment Term, the Employee shall serve
as the Vice President--Finance, Treasurer and Assistant Secretary of the
Subsidiary, performing such duties and having such authority as shall be
reasonably required of an executive-level employee of the Subsidiary, reporting
only to the Subsidiary's President and Chief Executive Officer and the Board of
Directors of the Subsidiary (the "Board"), and shall have such other powers and
perform such other additional executive duties as may from time to time be
assigned to him by such President and Chief Executive Officer or the Board.
Such duties being performed and such
<PAGE>
authority being exercised shall be at least commensurate with the duties being
performed and authority being exercised by the Employee immediately prior to the
date of this Agreement.
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all of
his time, energy, experience and talents during regular business hours and as
otherwise reasonably necessary to such employment, to the exclusion of all
other business activities; provided however, that such exclusion shall not
prohibit the Employee from attending to the Employee's personal matters and/or
financial and investment affairs (which financial or investment affairs shall
not conflict with the business of the Subsidiary or the Company and is subject
to the provisions of Section 12 hereof) during regular business hours as may
from time to time be reasonably necessary so long as attendance to such matters
and affairs does not interfere with the performance of the Employee's duties
hereunder.
3. Employment Term. Subject to earlier termination pursuant
to Section 7 hereof the Employment Term shall begin on March 31, 1999, and
continue until March 31, 2002; provided, however, that beginning on March 31,
2000, and on each anniversary of such date, the Employment Term shall
automatically renew for an additional one year beyond the end of the then
current term, unless, at least 90 days before March 31, 2000, or March 31 of
any succeeding year, either party gives notice to the other of his or its
desire to terminate this Agreement, in which case the Employment Term shall
terminate as of March 31, 2002, or the end of the then-current three-year term,
as applicable.
4. Compensation.
(a) Salary. During the Employment Term, the Company shall
cause the Subsidiary to pay the Employee a base salary, payable in equal
bi-weekly installments, subject to withholding and other applicable taxes, at
an annual amount of not less than one hundred fifty thousand U.S. Dollars
($150,000). Such base salary shall be reviewed by the Board in January, 2000,
and at least annually thereafter, and shall be increased annually, effective
January 1 of the applicable year, but may not be reduced, from the amount in
effect for the immediately preceding year, at an annual rate not less than the
annual rate of increase in the Consumer Price Index as measured by the United
States Department of Labor, Bureau of Labor Statistics (the "BLS"), All Items,
Consumer Price Index for All Urban Consumers (the "CPI-U"), and any such
increased base salary shall be the Employee's "base salary" for purposes of
this Agreement. In determining the rate of such annual increase, the base shall
be the CPI-U for the first day of the calendar year preceding the year for
which the base salary increase is being calculated and such base shall be
compared with the CPI-U as of the last day of such year. If the CPI-U is no
longer published in substantially its current form by the BLS, then a successor
index shall be substituted by mutual agreement of the Company and the Employee.
(b) Cash Incentive Bonus. For the calendar year 1999 and
for each subsequent calendar year, or portion thereof, during the Employment
Term, a reasonable target EBITDA (as defined below) for each calendar year and
a target bonus for the Employee for such calendar year shall be submitted to
the Board by the chief executive officer, or the highest ranking officer then
in service, of the Subsidiary (the "CEO") and agreed to by the Board and the
-2-
<PAGE>
CEO, and as soon as practicable after the end of each such calendar year as the
actual EBITDA achieved for such calendar year has been determined, the Company
shall cause the Subsidiary to pay to the Employee a lump-sum bonus determined
as described in this Section 4(b). No portion of such bonus will be paid if
less than 85% of the target EBITDA is achieved in the applicable calendar year.
Payment of 85% of the target bonus would be made if 85% of the target EBITDA is
achieved, and if the actual EBITDA for the applicable calendar year exceeds 85%
of the target EBITDA for such year, the percentage of the target bonus paid
shall be the percentage of the target EBITDA so achieved in such year. For
example, if 92% of the target EBITDA is achieved in a calendar year, 92% of the
target bonus would be paid for such year, or if 160% of the target EBITDA is
achieved in a calendar year, 160% of the target bonus would be paid for such
year. If during the course of any calendar year, the Company shall sell or
otherwise dispose of five percent (5%) or more of the total assets of the
Company and its subsidiaries, the CEO and the Board shall establish a revised
EBITDA target for such calendar year after receiving management's
recommendation.
"EBITDA" shall mean for any period, the (a) net income (or
net loss) of the Company and its subsidiaries plus (b) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, (v) extraordinary or unusual losses deducted in calculating net income
(or net loss), and (vi) other non-cash charges less (c) extraordinary or
unusual gains and other non-cash income items added in calculating net income
(or net loss), in each case determined in accordance with generally accepted
accounting principles at the end of each such calendar year for the Company and
its subsidiaries on a consolidated basis, and plus (d) any fees paid to or
expenses incurred by the Company pursuant to any management or similar
agreement between the Company and any stockholder holding 50 percent or more of
the capital stock of the Company or an Affiliate thereof.
(c) Employee Benefits. The Employee shall be entitled to
and shall receive employee benefits or participate in plans and programs
maintained by or on behalf of the Company or the Subsidiary which are otherwise
made available to employees of the Subsidiary, including but not limited to,
medical, health, accident and disability plan, cafeteria plan, retirement plan
and 401(k) plan.
(d) Additional Benefits. In addition to the other
compensation payable to the Employee hereunder, during the Employment Term, the
Company shall cause the Subsidiary to furnish at its expense an automobile, or
a reasonable allowance in lieu thereof at the option of the Subsidiary, office,
reasonable secretarial services, professional association dues, continuing
professional educational expenses and such other supplies, equipment,
facilities, services and emoluments appropriate to such Employee's position.
(e) Paid Time Off. Employee shall be entitled to paid
vacation, holidays, and sick leave during each calendar year of employment in
accordance with policies of the Subsidiary. Vacation may only be taken at times
mutually convenient for the Subsidiary and the Employee. The Subsidiary may
elect to pay out all accrued and unused vacation time as of December 31 of any
calendar year in January of the following calendar year. Such pay out will be
at the prevailing rate of annual compensation at the end of the immediately
preceding calendar year. No more than four weeks vacation time may be accrued
at any time.
-3-
<PAGE>
5. Expenses. The Employee shall be entitled to be reimbursed
by the Subsidiary for all reasonable expenses incurred by him in connection
with the performance of his duties hereunder in accordance with policies
established by the Board from time to time and upon receipt of appropriate
documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only
to the extent required, after prompt notice to both the Company and the
Subsidiary of any such order), directly or indirectly, other than in the
regular and proper course of business of the Company and/or the Subsidiary, any
confidential knowledge or information with respect to the operations or
finances of the Subsidiary or the Company or any of their subsidiaries or
Affiliates, or with respect to confidential or secret processes, services,
techniques, customers or plans with respect to the Company and/or the
Subsidiary, and (b) the Employee will not use, directly or indirectly, any
confidential information for the benefit of anyone other than the Company
and/or the Subsidiary; provided, however, that the Employee has no obligation,
express or implied, to refrain from using or disclosing to others any such
knowledge or information which is or hereafter shall become available to the
public other than through disclosure by the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. ss. 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company
may deem necessary or appropriate to vest complete title and ownership of any
Work Product, and all rights therein, exclusively in the Subsidiary.
During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the Subsidiary or to commit any other action
that injures or hinders the business relationships of the Company and/or the
Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
7. Termination.
(a) Mutual Agreement. The employment of the Employee
hereunder may be terminated at any time by the mutual agreement of the parties
hereto.
-4-
<PAGE>
(b) Termination for Substantial Cause. The Subsidiary may
at any time upon thirty (30) days prior written notice to the Employee,
terminate the employment of the Employee for Substantial Cause (as hereinafter
defined).
(c) Termination by the Employee The Employee shall be
entitled to terminate his employment without being in violation of any
provision of this Agreement upon 30 days prior written notice to the Subsidiary
(i) for Good Reason; (ii) upon "normal retirement" under any then-effective
plan or policy of the Subsidiary, or, in the absence of any such plan or
policy, under the terms of the CBI Pension Plan, as amended effective August 1,
1996, as if the Employee participated in such plan (whether or not he actually
so participated); or (iii) at any time and for any reason after the Employee
has attained the age of sixty (60) years.
(d) Termination by Death or Disability. The employment of
the Employee shall terminate upon the death of the Employee or the inability of
the Employee to perform his duties as a result of physical or mental disability
for an aggregate of 90 days in any 180 day period, as determined in good faith
by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of owning, leasing
or operating petroleum and other bulk liquid blending, trans-shipment, storage
or processing facilities or providing related terminaling services such as
supply of bunker fuel for vessels, emergency and spill response services;
brokering of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime constituting
a felony in the jurisdiction in which committed, or for any
other criminal act against the Subsidiary or the Company
involving dishonesty or willful misconduct intended to injure
the Subsidiary or the Company or any Affiliate of either of
them in any substantial way (whether or not a felony and
whether or not criminal proceedings are initiated);
(ii) Failure or refusal of the Employee in any
material respect to perform his obligations under this
Agreement or the duties of his employment or to follow the
lawful and proper directives of the Board, other than by
reason of a Disability provided such duties or directives are
consistent with this Agreement, and such failure or refusal
continues uncured for a period of thirty (30) days after
written notice thereof from the Subsidiary to the Employee
which specifies (i) the nature of such failure or refusal,
and (ii) the reasonable action of the Employee necessary for
cure; or
(iii) Any willful or intentional misconduct of the
Employee (A) in violation of any written policy of the
Subsidiary providing for termination of employment in the
event of violation of such policy or (B) committed for the
purpose, or having the reasonably foreseeable effect, of
injuring in a substantial
-5-
<PAGE>
way the Company, the Subsidiary, or any Affiliate of either
of them, or their respective businesses or reputations,
including, without limitation, causing the Subsidiary or any
of its Affiliates to violate a state or federal law relating
to the workplace environment.
(c) "Good Reason" shall mean:
(i) a significant reduction in the authorities,
duties, or responsibilities of Employee;
(ii) assignment to an office location which is more
than 100 miles from the office location of the Employee as of
the date of this Agreement;
(iii) material breach of this Agreement by the
Subsidiary or the Company which is not cured within thirty
(30) days after written notice of such breach is given by the
Employee to the Company and the Subsidiary; or
(iv) any failure of any successor to all or
substantially all of the assets or business of the Company or
the Subsidiary, by purchase, merger, consolidation or
otherwise, to fully assume the obligations of the Company or
the Subsidiary, as applicable, under this Agreement.
As applied to the Employee, the parties hereto agree that any position other
than Vice President--Finance, Treasurer and Assistant Secretary of the
Subsidiary, or other than any superior position with the Subsidiary, would
constitute a significant reduction in the authorities, duties or
responsibilities of the Employee.
(d) "Change in Control" shall mean the occurrence of the
following: Castle Harlan Partners II L.P. and its Affiliates and their partners
("CHP") cease to own or control at least fifty percent (50%) of the aggregate
number of the Company's outstanding class A common shares and class B
subordinated shares owned or controlled, directly or indirectly, by such
Persons as of the effective date of the amendment and restatement of this
Agreement; provided, however, that, the foregoing to the contrary
notwithstanding, in no event shall any Change in Control be deemed to occur,
for purposes of this Agreement, as the direct or indirect result of (i) the
occurrence of any of the transactions contemplated under the Purchase and Sale
Agreement, (ii) a public distribution of any such Company shares owned by CHP
(including any distribution of such shares to the partners of Castle Harlan
Partners II L.P.), or (iii) a sale or other distribution to any Competing
Entity, in one or more transactions, by CHP of not more than seven percent (7%)
of the aggregate number of the Company's outstanding class A common shares and
class B subordinated shares (provided, however, that a sale or distribution of
more than seven percent (7%) of such shares to a Competing Entity will be
deemed to be a Change in Control).
(e) "Affiliate" shall mean, with respect to any Person,
any entity that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with such Person.
-6-
<PAGE>
(f) "Person" shall mean any corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or other entity or organization.
(g) "Work Product" shall mean work product, property, data
documentation or information of any kind relating to the Business, prepared,
conceived, discovered, developed or created by the Employee for the Subsidiary
or any of the Subsidiary's Affiliates, clients or customers while the Employee
is employed by the Subsidiary.
(h) "Disability" shall have the meaning specified in
Section 7(d) hereof.
9. Insurance and Indemnification.
(a) Life Insurance. The Subsidiary may purchase insurance
on the life of the Employee, and if it does so, the Employee shall cooperate
fully by performing all the requirements of the life insurer which are
necessary conditions precedent to the issuance of the life insurance policy
issued by it.
(b) Directors and Officers Insurance and Indemnification.
The Subsidiary shall provide directors and officers insurance covering the
Employee for events occurring during the Employment Term on terms at least as
favorable as coverage for Directors of the Company, and the Subsidiary shall
provide indemnification to the Employee to the full extent allowed by the law
of its jurisdiction of incorporation.
10. Severance
(a) If the Employee's employment is terminated by the
Subsidiary without Substantial Cause (including, without limitation, upon
termination of this Agreement following notice thereof by the Company or the
Subsidiary pursuant to Section 3 hereof) or by the Employee for Good Reason,
then, without further liability of the Subsidiary or the Company, except for
their obligations pursuant to this Section 10(a) and such rights and benefits
of participation of or in respect of the Employee under employee benefits
plans, programs and arrangements of the Company, the Subsidiary and their
Affiliates, in accordance with the terms and provisions of such plans, programs
and arrangements, the Employee shall be entitled to (i) medical and dental
benefits as provided immediately prior to the date of termination which shall
continue for the Severance Period (as hereinafter defined) (which shall be
terminated sooner to the extent provided by another employer) and (ii)
severance compensation for the Severance Period following any such termination,
payable in equal monthly installments, subject to withholding and other
applicable taxes, at an annual rate equal to the Employee's base salary for the
year of termination. In addition, the Employee will be entitled to a pro rata
portion of the bonus compensation referred to in Section 4(b) hereof for the
year of termination only as and when ordinarily determined for such year. For
the purposes of this Agreement, "Severance Period" shall mean a period
commencing on the date of any such termination and ending on the expiration of
the Employment Term (determined as of the date of such termination without
-7-
<PAGE>
giving effect to such termination); provided, however, that the Severance
Period shall not be less than one year.
(b) If the Employee's employment is terminated for any
other reason, then without further liability of the Subsidiary or the Company,
the Employee shall be entitled to the salary, expenses and benefits accrued to
the termination date; provided, however, the Employee shall be entitled to the
bonus referred to in Section 4(b) hereof only in the case of termination by the
Employee of his employment pursuant to Section 7(c) hereof.
11. Notice. Any notices required or permitted hereunder shall
be in writing, signed and shall be deemed to have been given when personally
delivered or when mailed, certified or registered mail, postage prepaid, to the
following addresses:
If to the Employee:
James F. Brenner
14510 W. Palomino Drive
Ft. Lauderdale, Florida 33330
If to the Subsidiary:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
If to the Company:
Statia Terminals Group N. V.
c/o Statia Terminals Inc.
800 Fairway Drive
-8-
<PAGE>
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Schulte Roth & Zabel LLP
900 3rd Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address as for purposes of this Section by sending notice to the
other parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of twelve months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory
or other capacity for, any Competing Entity which conducts its business within
the Territory (as the terms Competing Entity and Territory are hereinafter
defined); provided, however, that notwithstanding the foregoing, the Employee
may make solely passive investments in any Competing Entity the common stock of
which is publicly held and of which the Employee shall not own or control,
directly or indirectly, in the aggregate securities which constitute 5% or more
of the voting rights or equity ownership of such Competing Entity; or (b)
solicit or divert any business or any customer from the Subsidiary or any
Affiliate of the Subsidiary or assist any person, firm or corporation in doing
so or attempting to do so; or (c) cause or seek to cause any person, firm or
corporation to refrain from dealing or doing business with the Subsidiary or
any Affiliate of the Subsidiary or assist any person, firm or corporation in
doing so. Notwithstanding any other provision of this Agreement to the
contrary, if the Employee's employment hereunder terminates under any
circumstances and there occurs a Change in Control (whether before or after
such termination of employment), the Employee shall thereupon automatically
cease to be bound by any covenants set forth in this Section 12.
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof is materially engaged in the Business; and (ii) the term "Territory"
shall mean the Caribbean and the area within a three hundred mile radius of (a)
the terminal facility operated by an Affiliate of the Subsidiary at Point
Tupper, Nova
-9-
<PAGE>
Scotia, and (b) any terminal hereafter operated by the Subsidiary
or any Affiliate of the Subsidiary.
-10-
<PAGE>
13. General.
(a) Governing Law; Captions. The terms of this Agreement
shall be governed by and construed under the laws of the State of Florida.
Paragraph and Section captions used herein are for convenience of reference
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights and obligations of the Subsidiary hereunder shall
inure to the benefit of and bind the assignee or any person, firm or
corporation succeeding to all or substantially all of the business or assets of
the Subsidiary by purchase, merger or consolidation.
(c) Dispute Resolution. With the exception of the
Company's or the Subsidiary's right to elect to seek injunctive relief pursuant
to paragraph (g) of this Section 13, in the event of any dispute between either
the Company or the Subsidiary and the Employee arising out of or relating to
this Agreement or its termination or any other aspect of Employee's employment,
the parties hereby agree to submit such dispute to a non-binding mediation
under the American Arbitration Association's National Rules for the Resolution
of Employment Disputes; Arbitration and Mediation Rules (the "Rules") within
sixty (60) days of notice from any one of the parties to another. Unless the
parties can agree on a mediator within thirty (30) days of such notice,
mediation shall proceed pursuant to the Rules. In the event any such dispute is
not resolved by mediation, any party hereto may initiate an action or claim to
enforce any provision or term of this Agreement. Each party shall bear its or
his own costs and expenses (including attorney's fees) associated with any
mediation, action, or claim.
(d) Binding Effect. This Agreement is for the employment
of Employee, personally, and the services to be rendered by him must be
rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company, the Subsidiary, and the Employee and, as
the case may be, their respective successors and assigns, personal
representatives, heirs and legatees.
(e) Entire Agreement; Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
(f) Duration. Notwithstanding the Employment Term
hereunder, this Agreement shall continue for so long as any obligations remain
under this Agreement, including without limitation any obligations of the
Company or the Subsidiary under Sections 9(b), 10 or 13 of this Agreement.
(g) Survival. The covenants set forth in Sections 6 and
12 of this Agreement shall survive and shall continue to be binding
upon Employee notwithstanding the termination of this Agreement for any reason
whatsoever. The covenants set forth in Section 6 and Section 12 of this
Agreement shall be deemed and construed as separate agreements
-11-
<PAGE>
independent of any other provision of this Agreement. The existence of any
claim or cause of action by Employee against Company and/or Subsidiary, whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement by Company or Subsidiary of any or all covenants. It is
expressly agreed that the remedy at law for the breach of any such covenant is
inadequate and that injunctive relief shall be available to prevent the breach
or any threatened breach thereof.
(h) Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby and the parties shall in good faith agree on a
modification of the invalid, illegal or unenforceable provision which renders
it valid, legal or enforceable (as the case may be) and which as closely as
possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby
unconditionally guarantees to Employee the full and timely performance by
Subsidiary of its obligations under this Agreement.
-12-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ Jack R. Pine
-------------------------------------
Name: Jack R. Pine
Title:
Statia Terminals Group N.V.
By: /s/ Jack R. Pine
-------------------------------------
Name: Jack R. Pine
Title:
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title:
EMPLOYEE
/s/ James F. Brenner
-----------------------------------------
James F. Brenner
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATIA
TERMINALS GROUP N.V.'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1999, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 20,474
<SECURITIES> 0
<RECEIVABLES> 11,292
<ALLOWANCES> 784
<INVENTORY> 1,449
<CURRENT-ASSETS> 34,076
<PP&E> 231,747
<DEPRECIATION> 22,545
<TOTAL-ASSETS> 249,602
<CURRENT-LIABILITIES> 32,809
<BONDS> 135,000
40,000
53,350
<COMMON> 4
<OTHER-SE> (11,561)
<TOTAL-LIABILITY-AND-EQUITY> 249,602
<SALES> 20,787
<TOTAL-REVENUES> 37,415
<CGS> 17,946
<TOTAL-COSTS> 28,600
<OTHER-EXPENSES> 4,482
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,202
<INCOME-PRETAX> 320
<INCOME-TAX> 254
<INCOME-CONTINUING> (1,655)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,655)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
