UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1995
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 1-7627
WAINOCO OIL CORPORATION
(Exact name of registrant as specified in its charter)
Wyoming 74-1895085
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1200 Smith Street, Suite 2100 77002-4367
Houston, Texas (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (713) 658-9900
Not Applicable
---------------------------------------------------
Former name, former address and former fiscal year, if
changed since last report.
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 X No . . .
Registrant's number of common shares outstanding as of July 28, 1995:
27,256,002
WAINOCO OIL CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1995
INDEX
Page
Part I - Financial Information
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II - Other Information 13
Definitions of Terms
mcf = one thousand cubic feet
mmcf = one million cubic feet
mmcfpd = one million cubic feet per day
bbl(s) = barrel(s)
bpd = one barrel per day
mbbls = one thousand barrels
mmcfe = one million cubic feet equivalent
Equivalent information is based on British Thermal Units at a ratio of six
mcf of natural gas to one bbl of oil. All dollar amounts are expressed in
United States dollars unless otherwise indicated as Canadian dollars (C$).
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
WAINOCO OIL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share)
Six Months Ended Three Months Ended
June 30 June 30
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Refined products $156,960 $142,046 $ 89,018 $ 79,748
Oil and gas sales 14,280 19,820 6,582 10,422
Other 6,474 930 4,766 420
-------- -------- -------- --------
177,714 162,796 100,366 90,590
-------- -------- -------- --------
Costs and Expenses:
Refining operating costs 153,516 124,654 83,909 70,990
Oil and gas operating costs 5,426 6,375 2,404 3,142
Selling and general expenses 5,786 5,848 2,703 2,861
Depreciation, depletion and amortization 11,384 12,590 5,269 6,632
-------- -------- -------- --------
176,112 149,467 94,285 83,625
-------- -------- -------- --------
Operating Income 1,602 13,329 6,081 6,965
Interest Expense, Net 10,071 10,241 4,990 5,180
-------- -------- -------- --------
Income (Loss) Before Income Taxes (8,469) 3,088 1,091 1,785
Provision (Benefit) for Income Taxes 68 (388) 37 (216)
-------- -------- -------- --------
Net Income (Loss) $ (8,537) $ 3,476 $ 1,054 $ 2,001
======== ======== ======== ========
Income (Loss) Per Share $ (.31) $ .13 $ .04 $ .07
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
WAINOCO OIL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands except shares)
June 30, 1995 and December 31, 1994 1995 1994
- ------------------------------------ -------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash, including cash equivalents of
$295 in 1995 and $467 in 1994 $ 3,411 $ 5,831
Trade receivables 18,722 17,990
Joint operators and other receivables 2,505 3,209
Inventory of crude oil, products and other 24,270 23,618
Other current assets 862 1,129
-------- --------
Total current assets 49,770 51,777
-------- --------
Property and Equipment, at cost:
Oil and gas properties, on a full-cost basis 214,358 454,559
Refinery and pipeline 135,621 132,872
Furniture, fixtures and other equipment 5,388 5,505
-------- --------
355,367 592,936
Less - Accumulated depreciation, depletion and amortization 150,470 372,937
-------- --------
204,897 219,999
Other Assets 5,587 5,760
-------- --------
$260,254 $277,536
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 31,499 $ 32,991
Oil and gas proceeds payable 3,026 3,421
Accrued interest 5,587 5,602
Accrued turnaround cost 1,722 2,245
Accrued liabilities and other 4,343 5,986
-------- --------
Total current liabilities 46,177 50,245
-------- --------
Long-Term Debt
Revolving credit facilities 7,300 15,000
12% Senior Notes 100,000 100,000
7 3/4% Convertible Subordinated Debentures 46,000 46,000
10 3/4% Subordinated Debentures 9,831 9,797
-------- --------
163,131 170,797
-------- --------
Deferred Credits and Other 6,016 4,627
Deferred Income Taxes 2,418 2,418
Commitments and Contingencies
Shareholders' Equity:
Preferred stock, $100 par value, 500,000 shares authorized,
no shares issued 0 0
Common stock, no par, 50,000,000 shares authorized,
27,313,502 shares and 27,310,842 shares issued in
1995 and 1994, respectively 57,172 57,172
Paid-in capital 81,767 81,758
Retained earnings (deficit) (87,441) (78,904)
Cumulative translation adjustment (8,727) (10,307)
Treasury stock, 57,500 and 60,000 shares
in 1995 and 1994, respectively (259) (270)
-------- --------
Total Shareholders' Equity 42,512 49,449
-------- --------
$260,254 $277,536
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
WAINOCO OIL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
For the six months ended June 30, 1995 1994
- -------------------------------- -------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (8,537) $ 3,476
Depreciation, depletion and amortization 11,384 12,590
Gain on sale of interest in gas marketing company (1,780) 0
Deferred credits and other 547 (960)
-------- --------
1,614 15,106
Change in working capital from operations (224) (5,108)
-------- --------
Net cash provided by operating activities 1,390 9,998
INVESTING ACTIVITIES
Additions to property and equipment (11,287) (13,919)
Sales of oil and gas properties 13,761 810
Sale of interest in gas marketing company 1,824 0
Net cash distributed as operator of properties and other (93) (247)
-------- --------
Net cash (used in) provided by investing activities 4,205 (13,356)
FINANCING ACTIVITIES
Long-term bank borrowings 26,300 11,264
Payments of long-term bank debt (34,000) (7,664)
Other (254) (144)
-------- --------
Net cash provided by financing activities (7,954) 3,456
Effect of exchange rate changes on cash (61) 0
-------- --------
Increase (Decrease) in Cash and Cash Equivalents (2,420) 98
Cash and Cash Equivalents, beginning of period 5,831 3,770
-------- --------
Cash and Cash Equivalents, end of period $ 3,411 $ 3,868
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
WAINOCO OIL CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM FINANCIAL STATEMENTS
June 30, 1995
(Unaudited)
1. Financial statement presentation and earnings per share
Financial statement presentation
The condensed consolidated financial statements include the accounts
of Wainoco Oil Corporation, a Wyoming Corporation, and its wholly owned
subsidiaries, including Frontier Holdings Inc. (Frontier) and Wainoco Oil &
Gas Company, collectively referred to as Wainoco or the Company. These
financial statements have been prepared by the registrant without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC) and include all adjustments (comprised of only normal
recurring adjustments) which are, in the opinion of management, necessary
for a fair presentation. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although Wainoco believes that the
disclosures are adequate to make the information presented not misleading.
It is suggested that the financial statements included herein be read in
conjunction with the financial statements and the notes thereto included in
Wainoco's annual report on Form 10-K for the year ended December 31, 1994.
Earnings per share
Primary and fully diluted earnings per share have been computed on the
weighted average number of common shares outstanding and assume the
exercise of stock option shares for the three months ended June 30, 1995
and the three months and six months ended June 30, 1994. The effect of
dilution for the fully diluted computation was immaterial. No effect was
given for the addition of dilutive stock options for the six months ended
June 30, 1995 as a loss was incurred. The primary and fully diluted
average shares outstanding for the three months and six months ended June
30, 1995 were 27,319,328 and 27,251,760 and in 1994 were 27,404,724 and
27,367,539, respectively.
2. Schedule of major components of inventory
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
------------ ------------
(in thousands)
<S> <C> <C>
Crude oil and raw materials $ 3,385 $ 6,135
Unfinished products 4,169 3,489
Finished products 10,234 7,737
Chemicals and in-transit inventory 1,110 1,277
Repairs and maintenance supplies and other 5,372 4,980
-------- --------
$ 24,270 $ 23,618
======== ========
</TABLE>
3. Accounting policy for oil and gas properties
Wainoco follows the accounting policy (commonly referred to as "full-
cost" accounting) of capitalizing costs incurred in the acquisition,
exploration and development of oil and gas reserves. No gains or losses
are recognized upon the sale or disposition of oil and gas properties,
except for significant transactions.
Wainoco computes the provision for depreciation, depletion and
amortization of oil and gas properties, by country, on a quarterly basis
using the composite unit-of-production method based on future gross revenue
attributable to proved reserves.
4. Restructuring of operations
In the second quarter, Wainoco closed the last of the anticipated
sales of United States properties realizing proceeds of $12,908,000. A
loss was accrued for these sales in the fourth quarter of 1994. The sale
of the Conroe field is not contemplated.
Wainoco recorded income from these properties until the property sales
were closed. During the six months and three months ended June 30, 1995,
the Company recorded the following for the properties sold:
<TABLE>
<CAPTION>
June 30, 1995
--------------------------------------
Six Months Ended Three Months Ended
------------------ ------------------
<S> <C> <C>
Financial information (in thousands)
Oil and gas revenue $ 2,733 $ 695
Operating costs 1,394 448
DD&A 1,173 194
Production volumes
Oil (bbls) 119,000 24,000
Gas (mmcf) 489 146
</TABLE>
5. Nonrecurring transactions
In the first quarter of 1995 the Company received $856,000 in
settlement of a Frontier contract dispute. During the second quarter of
1995 the Company's Canadian operations sold its 9.9% interest in a Canadian
gas marketing company for a net gain of $1,780,000. Additionally, during
the second quarter of 1995 the Company's United States oil and gas
operations recorded $2,206,000 resulting from the settlement of a breach of
contract claim against a former gas purchaser. All such amounts have been
classified as other revenues in the Consolidated Statement of Operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Six months ended June 30, 1995 compared with the same period in 1994
A 37% decrease in refined product spread caused a significant decrease
in refining operating results. This resulted in the Company incurring a
net loss for the six months ended June 30, 1995 of $8,537,000, or $.31 per
share, compared to net income of $3,476,000, or $.13 per share, for the
same period in 1994.
Refining operating income decreased $13,111,000 to a refining
operating loss of $1,377,000 for the six months ended June 30, 1995 due to
extremely poor margins on light refined products, primarily gasoline and
diesel. During the first half of 1995, refined product spread was $3.83
per barrel compared with $6.07 per barrel for the same period in 1994.
Mild winter weather caused excessive nationwide inventory levels of
distillate fuels. Further, nationwide refinery margins in the first
quarter of 1995 were the lowest in several years. Although second quarter
margins improved, continued high refinery output nationwide and increased
product pipeline deliveries into Frontier's marketing area, kept margins
lower than in 1994.
Refined product revenues increased 10% resulting from a 7% increase in
average product sales prices, primarily reflecting an increase in the cost
of crude oil, and a 3% increase in sales volumes. During the first quarter
of 1995, Frontier settled a contract dispute for $856,000 which is included
in other revenues.
Crude oil input averaged 34,410 barrels per day, a 5% increase from
1994 with yields of gasoline and distillate up by 7% and 3%, respectively.
The sweet/sour spread declined to $3.04 per barrel in 1995 from $3.79 per
barrel for the same period in 1994, a result of the increased competition
for heavy crude oils. Refining material costs increased 25% per barrel in
1995 due to higher crude oil prices. Refining operating expenses decreased
5% per barrel reflecting the increase in product sales.
On February 21, 1995, a distributor's natural gas pipeline near the
refinery developed a leak which caused underground migration of the gas and
a subsequent explosion in the electrical area of the diesel hydrotreating
unit. All units, with the exception of the delayed coking unit, were
impacted by the electrical interruption and subsequent repairs. The diesel
hydrotreater was down 18 days causing lower distillate yields than
otherwise achievable. The repair cost for the utility incident totaled
$1.2 million in the first quarter of 1995 and is included in operating
expenses. We are aggressively pursuing the responsible party for
reimbursement of physical damages and lost throughput.
Oil and gas exploration and production segment operating income
increased $1,318,000 to $4,225,000 during the first six months of 1995
compared to the prior year period. Excluding the impact of the gain on the
sale of Canada's interest in a gas marketing company and the contract
settlement gain in the United States, segment income decreased $2,672,000.
The decrease in segment operating income primarily results from lower gas
prices.
Canadian oil and gas revenues decreased 22% primarily the result of a
30% decrease in gas sales as the average price for natural gas declined 37%
to $.89/mcf from $1.42/mcf in the prior year period. In response to the
significant decline in gas prices in 1995, the Company curtailed Canadian
gas production by approximately 4 mmcfpd in February and 5 mmcfpd in March
while continuing to supply certain existing purchasers by acquiring like
replacement gas volumes in the spot market. Canadian oil sales increased
34% as a result of a 25% average oil price increase and an 8% increase in
production volume. In Canada, operating costs increased 5% due to placing
newly discovered areas on stream and adding compression at various mature
areas to maintain or increase gas production levels, subsequent to June 30,
1994.
Canadian depreciation, depletion and amortization (DD&A) increased
slightly in the 1995 first half period as compared to the same period in
1994. However, as a percentage of oil and gas sales, the Canadian oil and
gas DD&A rate increased to 54% from 41%, primarily due to the impact of the
lower 1995 gas prices.
United States oil and gas exploration and production operations have
been significantly curtailed through sales of producing properties.
Excluding the revenues and operating costs applicable to properties sold
and the contract settlement gain, the first half 1995 operating margin
would have been $1,096,000 compared to $653,000 (pro forma results of
properties retained) in the 1994 first half period. This increase results
from both higher oil prices and volumes at the Conroe field.
The provision for income taxes increased as the Alberta Royalty Tax
Credit (ARTC), beginning in 1995, is classified as oil and gas revenue
whereas it was classified as a tax benefit in prior years. The credits
were $307,000 and $501,000 during the first six months of 1995 and 1994,
respectively.
Three months ended June 30, 1995 compared with the same period in 1994
The Company had net income for the three months ended June 30, 1995 of
$1,054,000, or $.04 per share, compared to net income of $2,001,000, or
$.07 per share, for the same period in 1994.
Revenues increased 11% as compared to the same period in 1994,
primarily the result of refined product revenues increasing 12%. The
increase in refined product revenues results from a 6% increase in average
product sales prices, primarily reflecting an increase in the cost of crude
oil, and a 5% increase in sales volumes.
Refining operating income decreased $3,480,000 to $2,438,000 for the
three months ended June 30, 1995. This decrease is the result of the
refined product spread decreasing to $4.32 per barrel in 1995 as compared
to $5.64 in 1994. Although refined product margins improved in the second
quarter of 1995 from the first quarter, they were still lower than the
second quarter of 1994. Increased product availability in Frontier's
market areas kept continued downward pressure on wholesale product prices.
High nationwide refinery output and increased deliveries from product
pipelines into our marketing area kept margins lower. The pressure on
margins in our marketing area has continued into the second half of 1995.
Frontier's operating performance continues to improve as crude oil
input averaged 37,163 bpd, a 10% increase from 1994 with yields of gasoline
and distillate up by 18% and 17%, respectively. Refining material costs
increased 16% per barrel in 1995 due to higher crude oil prices. Refinery
operating expenses decreased 8% per barrel reflecting the increase in
product sales. The sweet/sour spread declined to $2.86 in 1995 from $3.59
per barrel for the same period in 1994, a result of the increased
competition for heavy crude oils.
Oil and gas exploration and production segment operating income
increased $2,569,000 to $4,267,000 during the second quarter of 1995
compared to the prior year period. Excluding the impact of the gain on the
sale of Canada's interest in a gas marketing company and the contract
settlement gain in the United States, segment income decreased $1,417,000.
The decrease in segment operating income primarily results from lower gas
prices.
Canadian oil and gas revenues decreased 22% compared to the prior year
second quarter primarily the result of a 30% decrease in gas sales as the
average price for natural gas declined 38% to $.86/mcf from $1.39/mcf in
the prior year period. Canadian oil sales increased 34% a result of a 15%
average oil price increase and an 16% increase in production volume.
Canadian depreciation, depletion and amortization increased slightly
in the 1995 second quarter period as compared to the same period in 1994.
However, as a percentage of oil and gas sales, the Canadian oil and gas
DD&A rate increased to 51% from 40%, primarily the impact of the lower
second quarter 1995 gas prices.
United States oil and gas exploration and production operations have
been significantly curtailed through sales of producing properties.
Excluding the revenues and operating costs applicable to properties sold
and the contract settlement gain, the second quarter 1995 operating margin
would have been $592,000 compared to $429,000 (pro forma results of
properties retained) in the 1994 second quarter. This increase results
from both higher oil prices and volumes at the Conroe field, the only
significant property retained.
The provision for income taxes increased as the Alberta Royalty Tax
Credit, beginning in 1995, is classified as oil and gas revenue whereas it
was classified as a tax benefit in prior years. The credits were $153,000
and $251,000 during the first quarters of 1995 and 1994, respectively.
OPERATING EARNINGS BY SEGMENT
The following (in thousands) presents the operating income (loss) by
operating segment, by country for the six months and three months ended
June 30, 1995 and 1994. Operating income (loss) is income (loss) before
net interest expense and provision for income taxes and does not include
unallocated net corporate expense of $1,246,000 and $1,312,000 in the six
months ended June 30, 1995 and 1994, respectively, and $624,000 and
$651,000 in the three months ended June 30, 1995 and 1994, respectively.
<TABLE>
<CAPTION>
Oil and Gas
Exploration and Production
----------------------------
United
States
Refining and Other Canada Total
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Six Months Ended June 30,
1995 - Operating margin $ 5,110 $ 4,831 $ 8,831 $ 13,662
Selling and general expenses 2,344 1,060 1,136 2,196
Depreciation, depletion
and amortization 4,143 2,231 5,010 7,241
-------- -------- -------- --------
Operating income (loss) $ (1,377) $ 1,540 $ 2,685 $ 4,225
======== ======== ======== ========
1994 - Operating margin $ 17,681 $ 4,246 $ 9,840 $ 14,086
Selling and general expenses 2,248 1,077 1,211 2,288
Depreciation, depletion
and amortization 3,699 3,983 4,908 8,891
-------- -------- -------- --------
Operating income (loss) $ 11,734 $ (814) $ 3,721 $ 2,907
======== ======== ======== ========
Oil and Gas
Exploration and Production
----------------------------
United
States
Refining and Other Canada Total
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Three Months Ended June 30,
1995 - Operating margin $ 5,658 $ 3,042 $ 5,353 $ 8,395
Selling and general expenses 1,130 447 502 949
Depreciation, depletion
and amortization 2,090 761 2,418 3,179
-------- -------- -------- --------
Operating income $ 2,438 $ 1,834 $ 2,433 $ 4,267
======== ======== ======== ========
1994 - Operating margin $ 8,902 $ 2,613 $ 4,943 $ 7,556
Selling and general expenses 1,120 484 606 1,090
Depreciation, depletion
and amortization 1,864 2,330 2,438 4,768
-------- -------- -------- --------
Operating income (loss) $ 5,918 $ (201) $ 1,899 $ 1,698
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
REFINING OPERATING STATISTICAL INFORMATION
Six Months Ended Three Months Ended
June 30 June 30
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Raw material input (bpd)
Sweet crude 5,631 6,815 6,265 6,746
Sour crude 28,779 25,941 30,898 26,967
Other feed and blend stocks 5,047 3,530 5,239 2,420
-------- -------- -------- --------
Total 39,457 36,286 42,402 36,133
Manufactured product yields (bpd)
Gasoline 17,061 15,875 18,485 15,723
Distillates 13,513 13,094 15,573 13,325
Asphalt and other 7,430 5,812 6,754 5,418
-------- -------- -------- --------
Total 38,004 34,781 40,812 34,466
Total product sales (bpd)
Gasoline 20,462 19,017 21,534 19,457
Distillates 12,959 12,783 14,176 13,302
Asphalt and other 5,770 6,137 6,554 7,307
-------- -------- -------- --------
Total 39,191 37,937 42,264 40,066
Operating margin information (per sales bbl)
Average sales price $ 22.13 $ 20.69 $ 23.15 $ 21.87
Material costs
(under FIFO inventory accounting) 18.30 14.62 18.83 16.23
Product spread 3.83 6.07 4.32 5.64
Operating expenses excluding depreciation 3.35 3.53 2.99 3.24
Depreciation .57 .52 .53 .50
-------- -------- -------- --------
Operating margin $ (.09) $ 2.02 $ .80 $ 1.90
Manufactured product margin
before depreciation (per bbl) $ .49 $ 2.54 $ 1.33 $ 2.42
Purchase product margin
(per purchased product bbl) $ (.23) $ 1.58 $ 0 $ 1.58
Sweet/sour spread (per bbl) $ 3.04 $ 3.79 $ 2.86 $ 3.59
Average sales price (per sales bbl)
Gasoline $ 25.12 $ 23.09 $ 26.77 $ 24.38
Distillates 22.62 22.06 23.24 23.11
Asphalts and other 10.38 10.38 11.03 12.94
</TABLE>
<TABLE>
<CAPTION>
OIL AND GAS EXPLORATION AND PRODUCTION STATISTICAL INFORMATION
Six Months Ended Three Months Ended
June 30 June 30
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Oil and gas revenue (in thousands)
Net oil and condensate sales
Canada $ 1,833 $ 1,364 $ 989 $ 740
United States 4,228 5,060 1,626 2,909
-------- -------- -------- --------
6,061 6,424 2,615 3,649
-------- -------- -------- --------
Net gas sales
Canada 7,409 10,557 3,703 5,256
United States 810 2,839 264 1,517
-------- -------- -------- --------
8,219 13,396 3,967 6,773
-------- -------- -------- --------
$ 14,280 $ 19,820 $ 6,582 $ 10,422
======== ======== ======== ========
Production
Net oil and condensate (bbls)
Canada 125,000 116,000 65,000 56,000
United States 259,000 362,000 96,000 190,000
-------- -------- -------- --------
384,000 478,000 161,000 246,000
======== ======== ======== ========
Net gas (mmcf)
Canada 8,316 7,454 4,312 3,777
United States 496 1,370 150 763
-------- -------- -------- --------
8,812 8,824 4,462 4,540
======== ======== ======== ========
Price
Average oil and condensate sales (per bbl)
before deduction for production taxes
Canada $ 14.68 $ 11.78 $ 15.27 $ 13.33
United States 16.31 13.98 16.98 15.31
Weighted average 15.78 13.45 16.29 14.86
Average gas sales (per mcf) before
deduction for production taxes
Canada $ .89 $ 1.42 $ .86 $ 1.39
United States 1.63 2.07 1.76 1.99
Weighted average .93 1.52 .89 1.49
Canada in Canadian dollars C$ 1.24 C$ 1.93 C$ 1.18 C$ 1.92
</TABLE>
The following presents Canadian production information which is
equivalent to reporting used by other Canadian oil and gas companies.
Gross volumes represent the Company's working interest plus associated
freehold, provincial and other royalties.
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
------------------ ------------------
1995 1994* 1995 1994*
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Gross volume
Oil (bbls) 141,000 139,000 75,000 68,000
Gas (mmcf) 9,469 8,826 4,848 4,419
Royalty
ARTC oil (bbls) 7,000 0 3,000 0
ARTC gas (mmcf) 206 0 103 0
Other (mmcfe) (1,251) (1,510) (600) (719)
Net volume
Oil (bbls) 125,000 116,000 65,000 56,000
Gas (mmcf) 8,316 7,454 4,312 3,777
Gross revenue
Oil $ 2,075 $ 1,630 $ 1,143 $ 907
Gas 8,365 12,520 4,150 6,161
Royalty
ARTC 307 0 153 0
Other (1,505) (2,229) (754) (1,072)
-------- -------- -------- --------
Net revenue
Oil $ 1,833 $ 1,364 $ 989 $ 740
Gas 7,409 10,557 3,703 5,256
-------- -------- -------- --------
$ 9,242 $ 11,921 $ 4,692 $ 5,996
======== ======== ======== ========
</TABLE>
*ARTC was accounted for as a tax credit in 1994, and it was excluded from
net volume and net revenue computations. The 1994 ARTC oil and gas royalty
volumes were 7,000 bbls and 206 mmcf, respectively, for the six-month
period and 3,000 bbls and 103 mmcf, respectively, for the three-month
period.
Wainoco is in the process of selling all of its United States oil and
gas properties, except for its Conroe field reserves and certain other
minor properties. The oil and gas revenues, operating costs and production
for the three months and six months ended June 30, 1995 and 1994 related to
the United States properties to be retained are as follows:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Oil and gas revenues (in thousands)
Net oil and condensate sales $ 2,296 $ 1,784 $ 1,190 $ 1,048
Net gas sales 9 16 5 7
-------- -------- -------- --------
2,305 1,800 1,195 1,055
Operating costs 1,209 1,147 603 626
-------- -------- -------- --------
Operating margin $ 1,096 $ 653 $ 592 $ 429
======== ======== ======== ========
Production
Net oil and condensate (bbls) 140,000 122,000 72,000 69,000
Net gas (mmcf) 7 9 4 3
Price
Average oil and condensate sales (per bbl)
before deduction for production taxes $ 16.39 $ 14.62 $ 16.55 $ 15.17
Average gas sales (per mcf) before
deduction for production taxes 1.33 1.78 1.42 1.64
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $1,390,000 for the six
months ended June 30, 1995. In the first six months of 1994, $9,998,000 of
cash flows were provided by operating activities reflecting the stronger
1994 operating results. In the first six months of 1995, the Company
reduced reserved-based borrowings $9,000,000 and increased borrowings under
the Frontier working capital facility by $1,300,000. Reserve-based
borrowing reductions were provided by proceeds from property sales.
During the first six months of 1994, the Company's bank debt increased
$3,600,000.
The Company at June 30, 1995 has $18,047,000 available under its oil
and gas lines of credit and $13,700,000 under the Frontier line of credit.
Effective July 1, 1995, $5 million of available borrowing capacity was
added under the Frontier facility as described in the following paragraph.
The Company had working capital of $3,593,000 at June 30, 1995 compared
with $1,532,000 at December 31, 1994. The estimated five-year maturities
of long-term debt are $2,500,000 in 1996 and 1997 and $5,000,000 in 1998
assuming that the oil and gas reserve-based credit facilities are extended
during the five-year period.
Effective July 1, 1995, the Company amended its Frontier working
capital facility, which extended its revolving period to April 2, 1997,
increased the maximum cash borrowing limit from $15 million to $20 million,
decreased the quarterly commitment fee of .425 of 1% to .4 of 1%, reduced
the standby letters-of-credit issued fee from one and one-half percent to
one and one-quarter percent annually and lowered the interest rate on
borrowings at the Company's option from one and one-quarter percent over
the agent bank's prime rate or two and one-quarter percent over the
reserve-adjusted LIBOR rate to seven-eighths percent over the agent bank's
prime rate or two percent over the reserve-adjusted LIBOR rate.
Additionally, during the quarter the Company received revised borrowing
base amounts of C$33 million and $4 million for its Canadian and U.S.
facilities, respectively.
Investing activities include proceeds from the sale of oil and gas
producing properties and the sale of an interest in a gas marketing company
of $15,585,000 for the six months ended June 30, 1995. Accrued additions
to property and equipment in the first half of 1995 decreased $3,861,000
from the same period in 1994 primarily the result of reduced capital
spending at Frontier. Capital expenditures of approximately $17,200,000
are currently budgeted for 1995, of which $9,120,000 had been accrued as of
June 30, 1995.
In conjunction with the Company's intent to cease all exploration in
the United States and to sell certain of its United States oil and gas
assets, exploration and development activities are now focused in Canada.
Canadian accrued capital expenditures increased from $4,730,000 in the
first half of 1994 to $6,094,000 in the first half of 1995.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings -
None, which in the opinion of management would have a material
impact on the registrant.
ITEM 2. Changes in Securities -
There have been no changes in the constituent instruments
defining the rights of the holders of any class of registered securities
during the current quarter.
ITEM 3. Defaults Upon Senior Securities -
None.
ITEM 4. Submission of Matters to a Vote of Security Holders -
The annual meeting of the registrant was held May 18, 1995 with
no significant proposals brought to a vote of the shareholders.
ITEM 5. Other Information -
None.
ITEM 6. Exhibits and Reports on Form 8-K -
10.01 - First Amending Agreement dated March 31, 1995 to Restated
Credit Agreement dated June 29, 1994 with certain banks and Morgan Bank of
Canada.
10.02 - Amendment No. 1 dated March 15, 1995 to Amended and
Restated Credit Guaranty Agreement dated May 31, 1994 with certain banks
and Morgan Guaranty Trust Company of New York.
10.03 - Letter agreement dated June 8, 1995 to Amended and
Restated Credit Agreement dated June 29, 1994 with certain banks and Morgan
Bank of Canada.
10.04 - Fifth Amendment dated July 1, 1995 to Loan Agreement
dated August 10, 1992 with certain banks and Union Bank.
10.05 - First Amendment to Guaranty dated October 18, 1992, to
Loan Agreement dated August 10, 1992 with certain banks and Union Bank.
10.06 - Second Amendment to Guaranty dated December 31, 1993, to
Loan Agreement dated August 10, 1992 with certain banks and Union Bank.
10.07 - Third Amendment to Guaranty dated July 6, 1994, to Loan
Agreement dated August 10, 1992 with certain banks and Union Bank.
10.08 - Fourth Amendment to Guaranty dated July 1, 1995, to Loan
Agreement dated August 10, 1992 with certain banks and Union Bank.
10.09 - Executive Employment Agreement dated April 3, 1995
between The Company and James R. Gibbs.
10.10 - Executive Employment Agreement dated April 3, 1995
between The Company and Julie H. Edwards.
10.11 - Executive Employment Agreement dated April 3, 1995
between The Company and S. Clark Johnson.
10.12 - Executive Employment Agreement dated April 3, 1995
between The Company and Robert D. Jones.
10.13 - Executive Employment Agreement dated April 3, 1995
between The Company and George E. Aldrich.
10.14 - 1995 Stock Grant Plan for Non-employee Directors.
27 - Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
WAINOCO OIL CORPORATION
By: /s/ George E. Aldrich
- ------------------------------------
George E. Aldrich
Vice President - Controller
Date: August 3, 1995
FIRST AMENDING AGREEMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT DATED JUNE 29, 1994
THIS AGREEMENT made as of the 31st day of March, 1995
BETWEEN
WAINOCO OIL CORPORATION, a body corporate having office
in the City of Houston, in the State of Texas
- and -
MORGAN BANK OF CANADA, a Canadian chartered bank with
offices in the city of Toronto, in the Province of Ontario (in
its own capacity and in its capacity as Agent)
- and -
PARIBAS BANK OF CANADA, a Canadian chartered bank with
offices in the City of Toronto, in the Province of Ontario
- and -
THE BANK OF TOKYO CANADA , a Canadian chartered bank
with offices in the City of Vancouver, in the Province of British
Columbia
WHEREAS parties hereto have entered into an Amended and
Restated Credit Agreement dated June 29, 1994 (the "Credit
Agreement") which provides for a revolving term facility in the
maximum principal amount of Cdn. $34,000,000;
AND WHEREAS the parties hereto wish to amend the Credit
Agreement as hereinafter provided;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in
consideration of the sum of one dollar ($1.00) and other good and
valuable consideration, receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Definitions
Capitalized terms used herein shall, unless otherwise
defined, have the meanings given to them in the Credit Agreement.
2. Amendments
The Credit Agreement is hereby amended as follows:
(a) the definition of "Fixed Charges" contained in Section
1.1 of the Credit Agreement is amended by deleting therefrom "20
quarterly installments" and substituting therefor "16 quarterly
installments";
(b) the definition of "Termination Date" in Section 1.1 of
the Credit Agreement is amended by deleting therefrom "December,
1995" and substituting therefor "December, 1996"; and
(c) Section 2.4(a) of the Credit Agreement is amended by
deleting therefrom "one-twentieth (1/20th)" and substituting
therefor "one-sixteenth (1/16th)".
3. Counterpart Execution
This Agreement may be executed in any number of
counterparts and all executed counterparts shall be read together
and shall form one and the same instrument.
4. Ratification
The Credit Agreement is hereby ratified and confirmed
as being in full force and effected as amended hereby.
5. Enurement
Subject to Section 9.6 of the Credit Agreement, this
Agreement shall enure to the benefit of and be binding upon each
of the parties hereto and its permitted successors and assigns.
WAINOCO OIL CORPORATION
Per: /s/ Julie H. Edwards
-------------------------
MORGAN BANK OF CANADA, as Agent
Per: /s/ Andrew Shelton
-------------------------
MORGAN BANK OF CANADA
Per: /s/ Andrew Shelton
-------------------------
THE BANK OF TOKYO CANADA
Per: /s/ Y. Tagawa
-------------------------
Executive Vice President &
General Manager
PARIBAS BANK OF CANADA
Per: /s/ James Goodall
-------------------------
Group Vice President
EXECUTION COPY
AMENDMENT NO. 1 TO AMENDED AND
RESTATED CREDIT AND GUARANTY AGREEMENT
AMENDMENT dated as of March 15, 1995 among WAINOCO OIL &
GAS COMPANY (the "Borrower"), WAINOCO OIL CORPORATION ("Wainoco"),
the BANKS listed on the signature pages hereof (the "Banks") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into
an Amended and Restated Credit and Guaranty Agreement dated as of
May 31, 1994 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement
in the manner set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless
otherwise specifically defined herein, each term used herein which
is defined in the Agreement shall have the meaning assigned to such
term in the Agreement. Each reference to "hereof", "hereunder",
"herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof
refer to the Agreement as amended hereby.
SECTION 2. Amendment of Section 1.01 of the Agreement.
(A) The definition of the term "Termination Date" is amended by
the substitution of "December, 1996" for "December, 1995".
(B) The definition of the term "Fixed Charges" is
amended by the substitution of "16 quarterly installments" for "20
quarterly installments" in clause (ii) of such definition.
SECTION 3. Amendment of Section 2.04 of the Agreement.
Section 2.04 is amended by the substitution of "one-sixteenth
(1/16th)" for "one-twentieth (1/20th)" in clause (a) of Section
2.04.
SECTION 4. Effectiveness of this Amendment. This
Amendment shall become effective on the date that the Agent shall
have received duly executed counterparts hereof signed by the
Borrower and the Required Banks (or, in the case of any party as to
which an executed counterpart shall not have been received, the
Agent shall have received telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof
by such party).
SECTION 5. Governing Law. This Amendment shall be
governed by and construed in accordance with the laws of the State
of New York.
SECTION 6. Counterparts. This Amendment may be signed
in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were
upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
WAINOCO OIL & GAS COMPANY
By /s/ Julie H. Edwards
-------------------------
Title: Senior Vice President - Finance
& Chief Financial Officer
WAINOCO OIL CORPORATION
By /s/ Julie H. Edwards
-------------------------
Title: Senior Vice President - Finance
& Chief Financial Officer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Philip W. McNeal
-------------------------
Title: Vice President
BANQUE PARIBAS
By /s/ Mark M. Green
-------------------------
Title: Vice President
By /s/ Mel Wan-Tong
-------------------------
Title: Group Vice President
UNION BANK
By /s/ Richard P. DeGrey
-------------------------
Title: Vice President
By /s/ Yolande C. Hollis
-------------------------
Title: Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Philip W. McNeal
------------------------
Title: Vice President
JP MORGAN
Memorandum
Morgan Guaranty
Trust Company
To: The Bank Participating in the Subject Credit Facilities
From: Philip W. McNeal /s/ PWM
Date: June 8, 1995
Subject: Borrowing Base Redetermination for the C$34 million
Amended and Restated Credit Agreement dated as of June
29, 1994 and the $20 million Amended and Restated
Credit and Guaranty Agreement dated as of May 31, 1994.
- -----------------------------------------------------------------
On behalf of Morgan Bank of Canada and Morgan Guaranty Trust
Company of New York and pursuant to Sections 2.1 (b) and 2.01
(b), respectively, of the above referenced credit agreements this
letter seeks your approval of a Borrowing Base of C$33 million
for the Canadian facility and $4 million for the U.S. facility.
In accordance with Section 2.07 (a), Wainoco Oil and Gas will
reduce commitments under their credit facility to $4 million
effective June 13, 1995. The Wainoco Oil Corporation commitment
will be reduced to C$33 million effective June 19, 1995.
Please sign below to acknowledge your approval, as appropriate,
for one or both of the proposed Borrowing Bases and return a copy
of this letter to me at your earliest convenience via fax at
(212) 648-5014.
/s/ P. W. McNeal
- --------------------------
Name: Philip W. McNeal
Title: Vice President
Bank Name: Morgan Guaranty Trust Company of New York
/s/ Mark Green
- --------------------------
Name: Mark Green
Title: Vice President
Bank Name: Banque Paribas
/s/ Ivan J. Hopkins
- --------------------------
Name: I. Hopkins
Title: Vice President
Bank Name: The Bank of Tokyo Canada
/s/ John Plant
- --------------------------
Name: John Plant
Title: Vice President Oil & Gas
Bank Name: Paribas Bank of Canada
/s/ Richard P. DeGrey
- --------------------------
Name: Richard P. DeGrey
Title: VP
Bank Name: Union Bank
FIFTH AMENDMENT
TO
REVOLVING CREDIT AND LETTER OF CREDIT AGREEMENT
This Amendment, dated as of July 1, 1995, is entered into by
(1) FRONTIER OIL AND REFINING COMPANY, a Delaware corporation
(the "Borrower"), (2) the banks parties to the Credit Agreement
referred to below (the "Banks") and (3) UNION BANK, a California
banking corporation, as agent (the "Agent") for the Banks.
Recitals
A. The Borrower, the Banks and the Agent have entered into
a Revolving Credit and Letter of Credit Agreement dated as of
August 10, 1992, as amended by a letter of waiver and amendment
dated March 17, 1993, a Second Amendment to Revolving Credit and
Letter of Credit Agreement dated as of April 30, 1993, a Third
Amendment to Revolving Credit and Letter of Credit Agreement
dated as of December 31, 1993 and a Fourth Amendment to Revolving
Credit and Letter of Credit Agreement dated as of July 6, 1994
(said Agreement, as so amended, herein called the "Credit
Agreement"). Terms defined in the Credit Agreement and not
otherwise defined herein have the same respective meanings when
used herein, and the rules of interpretation set forth in
Sections 1.2 and 1.3 of the Credit Agreement are incorporated
herein by reference.
B. The Borrower, the Banks and the Agent hereby agree as
set forth below.
Section 1. Amendments to Credit Agreement. Effective as of
the date first set forth above and subject to satisfaction of the
conditions precedent set forth in Section 2, the Credit Agreement
is hereby amended as follows:
(a) The definition of "Commitment Termination Date" in
Section 1.1 of the Credit Agreement is amended in full to read as
follows:
"'Commitment Termination Date' means April 2, 1997;
provided, however, that, upon (a) written request by the Borrower
not later than May 15, 1996 and (b) notice of such extension by
the Agent to the Borrower not later than July 15, 1996, the
Commitment Termination Date may be extended by the Agent and the
Banks, in their sole and absolute discretion, for up to an
additional year; and further provided, however, that the Agent's
failure to notify the Borrower of any such extension by the
applicable date referred to above shall constitute a denial of
such extension."
(b) Sections 2.1(a) and 2.7(b) of the Credit Agreement
are amended by deleting the words and figures "fifteen million
dollars ($15,000,000)" in each such section and substituting the
words and figures "twenty million dollars ($20,000,000)" in each
instance.
(c) Section 2.2(a) of the Credit Agreement is amended
by deleting the words and figures "four hundred twenty-five
thousandths percent (.425%)" and substituting the words and
figures "four-tenths percent (0.4%)."
(d) Section 2.6(a) of the Credit Agreement is amended
by deleting the words and figures "one and one-quarter percent
(1.25%)" in clause (i) thereof and "two and one-quarter percent
(2.25%)" in clause (ii) thereof and substituting the words and
figures "seven-eighths percent (0.875%)" and "two percent
(2.00%)," respectively.
(e) Section 2.12(a) of the Credit Agreement is amended
by deleting the words and figures "one and one-half percent
(1.50%)" and substituting the words and figures "one and one-
quarter percent (1.25%)."
(f) Schedule 3 to the Credit Agreement is deleted and
replaced by Schedule 3 to this Amendment.
Section 2. Conditions to Effectiveness. This Amendment
shall become effective as of the date first set forth above when
the Agent has received a renewal fee of $125,000 for the account
of the Banks and all of the following documents, each dated on or
before the date hereof, in form and substance satisfactory to the
Agent and in the number of originals requested by the Agent:
(a) this Amendment, duly executed by the Borrower and
the Banks;
(b) an amendment to the FOC Guaranty with respect to
the liquidity coverage covenant contained in Section 7.2(k)
thereof, duly executed by FOC and the Banks, together with the
other documents required to be delivered to the Agent as
conditions precedent to the effectiveness of such amendment;
(c) an amendment and restatement of the Agent's Fee
Letter;
(d) a consent to this Amendment, duly executed by
Wainoco and the Guarantors;
(e) copies of the resolutions of the Board of Directors
of the Borrower approving this Amendment and any documents
delivered by the Borrower pursuant hereto, certified by the
Secretary or an Assistant Secretary of the Borrower to be correct
and complete and in full force and effect as of the date of
execution, and as of the effective date, of this Amendment;
(f) a certificate of the Secretary or an Assistant
Secretary of the Borrower as to the incumbency, and setting forth
a specimen signature, of each of the persons who has signed this
Amendment or any document delivered by the Borrower pursuant
hereto;
(g) a certificate of the Borrower, signed on behalf of
the Borrower by its President or a Vice President and its
Secretary or any Assistant Secretary, certifying as to (A) the
absence of any amendments to the charter documents or bylaws of
the Borrower on or after August 18, 1992, (B) the truthfulness in
all material respects of the representations and warranties
contained in the Credit Documents as though made on and as of the
effective date of this Amendment and (C) the absence of any event
occurring and continuing, or resulting from the effectiveness of
this Amendment, that constitutes a Default or an Event of
Default; and
(h) such other approvals, opinions and documents as the
Agent may reasonably request.
Section 3. Representations and Warranties of Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware.
(b) The execution, delivery and performance by the
Borrower of this Amendment and the Credit Documents, as amended
hereby, to which it is or is to be a party are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action and do not (i) contravene the
Borrower's charter documents or bylaws, (ii) contravene any
Governmental Rule or contractual restriction binding on or
affecting the Borrower or (iii) result in or require the creation
or imposition of any Lien or preferential arrangement of any
nature (other than any created by the Credit Documents) upon or
with respect to any of the properties now owned or hereafter
acquired by the Borrower.
(c) No Governmental Action is required for the due
execution, delivery or performance by the Borrower of this
Amendment or any of the Credit Documents, as amended hereby, to
which the Borrower is or is to be a party.
(d) This Amendment and each of the Credit Documents, as
amended hereby, to which the Borrower is a party constitute
legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms.
(e) The Security Agreement, the Account Pledge Agreement
and the Note Pledge Agreement constitute valid and perfected
first-priority Liens on the Collateral covered thereby,
enforceable against all third parties in all jurisdictions, and
secure the payment of all obligations of the Borrower under the
Credit Documents, as amended hereby; and the execution, delivery
and performance of this Amendment do not adversely affect the
Lien of the Security Agreement, the Account Pledge Agreement or
the Note Pledge Agreement.
(f) The consolidated balance sheet of FOC and its
Subsidiaries as of December 31, 1994 and the related consolidated
statements of income, retained earnings and cash flows of FOC and
its Subsidiaries for the fiscal year then ended, certified by
Arthur Andersen & Co., independent public accountants, and the
report as of April 30, 1995 referred to in Section 7.1(j)(i) of
the FOC Guaranty, certified by the chief financial officer or
chief accounting officer of FOC, fairly present the consolidated
financial condition of FOC and its Subsidiaries as of such dates
and the consolidated results of the operations of FOC and its
Subsidiaries for the fiscal periods ended on such dates, all in
accordance with generally accepted accounting principles applied
on a consistent basis. Since April 30, 1995 there has been no
material adverse change in the business, condition (financial or
otherwise), operations, performance, properties or prospects of
FOC or any of its Subsidiaries. FOC and its Subsidiaries have no
material contingent liabilities except as disclosed in such
financial statements or the notes thereto.
(g) There is no pending or, to the knowledge of the
Borrower, threatened action or proceeding affecting FOC or any
its Subsidiaries before any Governmental Person or arbitrator
that may materially and adversely affect the financial condition
or operations of FOC or any of its Subsidiaries or that purports
to affect the legality, validity or enforceability of this
Amendment or any of the Credit Documents, as amended hereby.
Section 4. Reference to and Effect on Credit Documents.
(a) On and after the effective date of this Amendment,
each reference in the Credit Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or any other expression of like
import referring to the Credit Agreement, and each reference in
the other Credit Documents to "the Credit Agreement,"
"thereunder," "thereof," "therein" or any other expression of
like import referring to the Credit Agreement, shall mean and be
a reference to the Credit Agreement as amended by this Amendment.
(b) Except as specifically amended or referred to above,
the Credit Agreement and the other Credit Documents shall remain
in full force and effect and are hereby ratified and confirmed.
Without limiting the generality of the foregoing, the Security
Agreement, the Account Pledge Agreement and the Note Pledge
Agreement, and all of the Collateral described therein, do and
shall continue to secure the payment of all obligations of the
Borrower under the Credit Documents, as amended hereby.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate
as a waiver of any right, power or remedy of any Bank or the
Agent under any of the Credit Documents or constitute a waiver of
any provision of any of the Credit Documents.
Section 5. Costs, Expenses and Taxes. The Borrower agrees
to pay on demand all costs and expenses of the Agent in
connection with the preparation, execution and delivery of this
Amendment and the other instruments and documents to be delivered
hereunder, including the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect thereto and with
respect to advising the Agent as to its rights and
responsibilities hereunder and thereunder. In addition, the
Borrower shall pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and
delivery of this Amendment and the other instruments and
documents to be delivered hereunder, and the Borrower agrees to
save the Agent and each Bank harmless from and against any and
all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes.
Section 6. Execution in Counterparts. This Amendment may
be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed
and delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
Section 7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE
STATE OF CALIFORNIA.
FRONTIER OIL AND REFINING COMPANY
By: /s/ Jon D. Galvin
------------------------------
Jon D. Galvin
Vice President and
Chief Financial Officer
UNION BANK, as Agent and
as a Bank
By: /s/ Richard P. DeGrey, Jr.
------------------------------
Richard P. DeGrey, Jr.
Vice President
BANQUE PARIBAS
By: /s/ Mark M. Green
------------------------------
Name: Mark M. Green
Title: Vice President
By: /s/ Barton D. Schouest
------------------------------
Name: Barton D. Schouest
Title: Group Vice President
DEN NORSKE BANK AS
By: /s/ Theodore S. Jadick, Jr.
------------------------------
Name: Theodore S. Jadick, Jr.
Title: Senior Vice President
By: /s/ Fran Meyers
------------------------------
Name: Fran Meyers
Title: Vice President
SCHEDULE 3
METHODS OF CALCULATION OF FAIR MARKET VALUE OF INVENTORY
In determining market value of Inventory, the actual
Eligible Inventory volumes shall be multiplied by the prices
determined below for each category of Inventory. Each price
derived from the independent sources described below shall be the
price for the relevant Inventory type published on the effective
date, or published most recently before the effective date, of
the Borrowing base Certificate concerned.
Inventory Type Method of Determining Prices
- ---------------------------- ---------------------------------
Sweet Wyoming Crude Average of Texaco's and Conoco's
posted price, less gravity
adjustment ("ATCPPLGA"), for 40-
degree Sweet Wyoming Crude, plus
$2.20/barrel.
General Wyoming Sour Crude ATCPPLGA for 24-degree General
Wyoming Sour Crude, plus
$3.30/barrel.
Wyoming Asphaltic Sour ATCPPLGA for 21-degree Wyoming
Sour Crude Asphaltic Sour Crude, plus
$2.00/barrel.
Canadian Sour Crude (MSO) New York Mercantile Exchange near
month contract closing price for
West Texas Intermediate Crude,
less gravity adjustment if pro-
vided for in crude purchase
contract terms ("NYMEXWTILGA"),
minus $1.20/barrel.
Bow River Sour Crude NYMEXWTILGA, minus $1.60/barrel.
Mixed Monty Sour ATCPPLGA for Sweet Wyoming Crude.
Finished Gasoline 70% times Denver OPIS Low*,
less $.014/gal.
+30% times Cheyenne OPIS Los*,
less $.01/gal.
Diesel 60% times Denver OPIS Low*,
less $.015/gal.
+40% times Cheyenne OPIS Low*,
less $.01/gal.
Asphalt For volumes of Asphalt that have
been committed for sale under a
binding sales contract, the
contract price (converted to a
price per barrel by dividing the
contract short-ton price by 5.6).
For all other Asphalt volumes,
the average of the high and low
Asphalt Cement dollars/ton price
(divided by 5.6 to convert the
short-ton price to a price per
barrel), as established in the
category ASPHALT SELLING PRICES
Area Barge for MID-CONTINENT/MID-
WEST in Asphalt Weekly Monitor,
published by Poten & Partners (in
the absence of this source of
pricing information, such price
as determined by the Agent).
Gas Oil 70% times the Unleaded Regular
Gasoline Net Price
+30% times the #2 Diesel net
price, less $.10/gal.
Sulfur Frontier's net-back price, based
on Frontier's most recent sale to
an independent third party.
Coke $0.00/ton
Propane Conway, Kansas OPIS wholesale
Propane price, plus $.05/gal.
Normal Butane Same methodology as Propane
except use Butane price.
Field Butane Same as Normal Butane price.
Iso Butane Same methodology as Propane
except use Iso Butane price.
Olefins Same net price used for Premium
Unleaded Gasoline, less
$.156/gal.
- -----------------------
* As the price applies to each grade of gasoline (Unleaded
Regular, Unleaded Mid-Grade, Unleaded Premium and Leaded Regular)
or diesel (#1 Diesel (0.05% sulfur), #1 Diesel (0.5% sulfur), #2
Diesel (0.05% sulfur) and #2 Diesel (0.5% sulfur)).
Light Straight Run Same as net price used for
Unleaded Regular Gasoline.
Reformate Same as net price used for
Unleaded Regular Gasoline.
Cat Gas Same as net price used for
Premium Unleaded Gasoline.
Naphtha and Raffinate Same as net price used for
Unleaded Regular Gasoline,
less $.04/gal.
MTBE Most recent price the Borrower
paid to an independent third
party for MTBE.
Ethanol Most recent price the Borrower
paid to an independent third
party for Ethanol.
Natural Gasoline Conway, Kansas OPIS wholesale
price of Natural Gasoline, plus
$.05/gal.
Raw Distillate Oil If the Borrower is selling #2
Diesel (0.5% sulfur), then the
net price for #2 Diesel (0.5%
sulfur), less $.02/gal. If the
Borrower is selling #2 Diesel
(0.05% sulfur), then the net
price for #2 Diesel (0.05%
sulfur), less $.02/gal.
Coker Distillate Oil Same as Raw Distillate Oil net
price.
JP-4 Same net price used for Naphtha.
Heavy Fuel Same as Wyoming Sour Crude Oil
net price times 60%.
Cutter Stock Same price as Heavy Fuel.
Slurry Platt's Gulf Coast Resid, less
$6.00/barrel.
Vac Bottoms Same average net price used for
Asphalt.
HP Vac Bottoms Same average net price used for
Asphalt.
Unfinished Gasoline Same price as Unleaded Regular
Gasoline, less $.025/gal.
As used in this schedule, "net price" means the reference price
less the specified adjustment amount.
The Agent reserves the right to adjust any of the above
methodologies for determining market value if any of the sources
of price information is no longer representative of market
prices.<PAGE>
July 1, 1995
Frontier Oil Corporation
1700 Lincoln, Suite 2100
Denver, Colorado 80203
Attention: Mr. Jon D. Galvin
Vice President and Chief
Financial Officer
Re: Fourth Amendment to Guaranty
Gentlemen:
We refer to the Guaranty made by Frontier Oil Corporation
(the "Guarantor") as of August 18, 1992, as amended by a First
Amendment to Guaranty dated as of October 8, 1992, a letter of
waiver and amendment dated March 17, 1993, a Second Amendment to
Guaranty dated July 6, 1994 (said Guaranty, as so amended, herein
called the "Guaranty"), in favor of (1) Union Bank, Banque
Paribas and Den norske Bank AS (the "Banks") and (2) Union Bank,
as agent (the "Agent") for the Banks. Unless otherwise defined
herein, terms defined in or pursuant to the Guaranty are used
herein as therein defined.
The Guarantor has requested that Section 7.2(k) of the
Guaranty (concerning liquidity coverage) be amended as set forth
below, and the Banks are willing to do so. Accordingly, the
parties hereby agree that, effective as of May 1, 1995, Section
7.2(k) of the Guaranty is amended in full to read as follows:
"(k) Maintenance of Liquidity Coverage Ratio. The
Guarantor will not permit the consolidated Liquidity Coverage
Ratio of it and its Subsidiaries as of the end of any calendar
month to be less than 1.08 to 1.0."
On and after the effective date of this letter amendment,
each reference in the Guaranty to "this Guaranty," "hereunder,"
"Hereof," "herein" or words of like import referring to the
Guaranty, and each reference in the other Credit Documents to
"the FOC Guaranty," "thereunder," "thereof," "therein" or words
of like import referring to the Guaranty, shall mean and be a
reference to the Guaranty as amended by this letter amendment.
The Guaranty, as amended by this letter amendment, is and shall
continue to be in full force and effect and is hereby ratified
and confirmed in all respects.
This letter amendment may be executed in any number of
counterparts and by any combination of the parties hereto in
separate counterparts, each of which counterparts shall be an
original and all of which taken together shall constitute one and
the same letter amendment.
If you agree to the terms and provisions hereof, please
evidence your agreement by executing and returning five
counterparts of this letter amendment to the Agent. This letter
amendment shall become effective as described above when it has
been executed and delivered by all of the parties hereto and when
the Agent has received the following documents from the
Guarantor, in form and substance satisfactory to the Agent: (1)
copies of the resolutions of the Board of Directors of the
Guarantor approving this letter amendment and any documents
delivered by the Guarantor in connection herewith, certified by
the Secretary or an Assistant Secretary of the Guarantor to be
correct and complete and in full force and effect as of the date
of execution, and as of the effective date, of this letter
amendment; and (2) a certificate of the Secretary or an Assistant
Secretary of the Guarantor as to the incumbency, and setting
forth a specimen signature, of each of the persons who has signed
this letter amendment or any document delivered by the Guarantor
in connection herewith.
Very truly yours,
UNION BANK, as Agent and as a Bank
By: /s/ Richard P. DeGrey, Jr.
--------------------------
Richard P. DeGrey, Jr.
Vice President
Agreed as of the date
first written above:
FRONTIER OIL CORPORATION
By: /s/ Jon D. Galvin
-----------------
Jon D. Galvin
Vice President and
Chief Financial Officer
BANQUE PARIBAS
By: /s/ Mark M. Green
-----------------
Name: Mark M. Green
Title: Vice President
By: /s/ Barton D. Schouest
----------------------
Name: Barton D. Schouest
Title: Group Vice President
DEN NORSKE BANK AS
By: /s/ Theodore S. Jadick, Jr.
---------------------------
Name: Theodore S. Jadick, Jr.
Title: Senior Vice President
By: /s/ Fran Meyers
---------------
Name: Fran Meyers
Title: Vice President
FIRST AMENDMENT TO GUARANTY
This Amendment, dated as of October 8, 1992, is entered
into by FRONTIER OIL CORPORATION, a Delaware corporation (the
"Guarantor"), the banks (the "Banks") parties to the Credit
Agreement (as hereinafter defined) and UNION BANK, a California
banking corporation, as agent (the "Agent") for the Banks.
Recitals
A. The Banks and the Agent have entered into a Revolving
Credit and Letter of Credit Agreement dated as of August 10, 1992
(said Agreement, as it may hereafter be amended or otherwise
modified from time to time, herein called the "Credit Agreement")
with Frontier Oil and Refining Company, a Delaware corporation
(the "Borrower"). Terms defined in the Credit Agreement and not
otherwise defined herein have the same respective meanings when
used herein, and the rules of interpretation set forth in
Sections 1.2 and 1.3 of the Credit Agreement are incorporated by
reference herein.
B. The Guarantor, as the legal and beneficial owner of all
of the outstanding capital stock of the Borrower, has executed a
Guaranty dated as of August 18, 1992 (said Guaranty, as it may
hereafter be amended or otherwise modified from time to time,
herein called the "Guaranty") in favor of the Banks and the
Agent, guaranteeing all of the obligations of the Borrower under
the Credit Agreement and the other Credit Documents.
C. The Banks, the Agent and Guarantor wish to amend the
Guaranty to require written consent of all of the Banks in order
for waivers of certain covenants of the Guarantor set forth in
the Guaranty to be effective.
Section 1. Amendment to Guaranty. Effective as of the
date hereof and subject to satisfaction of the conditions
precedent set forth in Section 2, the first sentence of Section 7
of the Guaranty is amended in full to read as follows:
"Section 7. Covenants. The Guarantor covenants and
agrees that, so long as any part of the Guaranteed Obligations
remains unpaid, any Bank has any Commitment or any Letter of
Credit remains outstanding, the Guarantor will, unless the
Majority Banks (or, with respect to Sections 7.2(a) and (b) only,
all of the Banks) otherwise consent in writing, comply with all
of the covenants set forth below."
Section 2. Conditions to Effectiveness. This
Amendment shall be become effective as of the date first written
above when all of the parties hereto have executed this Amendment
and the Borrower, Wainoco, FHI, FRI, FPLI and FPI have consented
to this Amendment.
Section 3. Representations and Warranties of
Guarantor. The Guarantor represents and warrants as follows:
(a) The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware.
(b) The execution, delivery and performance by
the Guarantor of this Amendment and the Credit Documents, as
amended hereby, to which it is or is to be a party are within the
Guarantor's corporate powers, have been duly authorized by all
necessary corporate action and do not (i) contravene the
Guarantor's charter documents or bylaws, (ii) contravene any
Governmental Rule or contractual restriction binding on or
affective the Guarantor or (iii) result in or require the
creation or imposition of any Lien or preferential arrangement of
any nature (other than any created by the Credit Documents) upon
or with respect to any of the properties now owned or hereafter
acquired by the Guarantor.
(c) No Governmental Action is required for the
due execution, delivery and performance by the Guarantor of this
Amendment or any of the Credit Documents, as amended hereby, to
which the Guarantor is or is to be a party.
(d) This Amendment and each of the other Credit
Documents, as amended hereby, to which the Guarantor is a party
constitute legal, valid and binding obligations of the Guarantor
enforceable against the Guarantor in accordance with their
respective terms.
(e) The Stock Pledge Agreement constitutes a
valid and perfected a first-priority Lien on the Collateral
covered thereby, enforceable against all third parties in all
jurisdictions, and secures the payment of all obligations of the
Guarantor under the Guaranty, as amended hereby; and the
execution, delivery and performance of this Amendment do not
adversely affect the Lien of the Stock Pledge Agreement.
(f) The consolidated balance sheet of the
Guarantor and its Subsidiaries as of August 31, 1992 and the
related consolidated statements of income and cash flows from
operations of the Guarantor and its Subsidiaries for the month
then ended, certified by the chief financial officer or chief
accounting officer of the Guarantor as being true and correct and
copies of which have been furnished to the Banks, fairly present
the consolidated financial condition of the Guarantor and its
Subsidiaries as of such date and the consolidated results of the
operations of the Guarantor and its Subsidiaries for the month
ended on such date, all in accordance with generally accepted
accounting principles applied on a consistent basis. Since
August 31, 1992 there has been no material adverse change in the
business, condition (financial or otherwise), operations,
performance, properties or prospects of the Guarantor or any of
its Subsidiaries. The Guarantor and its Subsidiaries have no
material contingent liabilities except as disclosed in such
consolidated balance sheet or the notes thereto.
(g) There is no pending or, to the knowledge of
the Guarantor, threatened action or proceeding affecting the
Guarantor or any its Subsidiaries before any Governmental Person
or arbitrator that may materially and adversely affect the
financial condition or operations of the Guarantor or any of its
Subsidiaries or that purports to affect the legality, validity or
enforceability of this Amendment or any of the other Credit
Documents, as amended hereby, to which the Guarantor is a party.
Section 4. Reference to and Effect on Credit
Documents.
(a) On and after the effective date of this
Amendment, each reference in the Guaranty to "this Guaranty,"
"hereunder," "hereof" or any other expression of like import
referring to the Guaranty, and each reference in the other Credit
Documents to "the Guaranty," "thereunder," "thereof" or any other
expression of like import referring to the Guaranty, shall mean
and be a reference to the Guaranty as amended by this Amendment.
(b) Except as specifically amended above, the
Guaranty and the other Credit Documents shall remain in full
force and effect and are hereby ratified and confirmed. Without
limiting the generality of the foregoing, the Stock Pledge
Agreement and all of the Collateral described therein do and
shall continue to secure the payment of all obligations of the
Guarantor under the Guaranty, as amended hereby.
(c) The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Bank or
the Agent under any of the Credit Documents or constitute a
waiver of any provision of any of the Credit Documents.
Section 5. Costs, Expenses and Taxes. The Guarantor
agrees to pay on demand all costs and expenses of the Agent in
connection with the preparation, execution and delivery of this
Amendment and the other instruments and documents to be delivered
hereunder, including the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect thereto and with
respect to advising the Agent as to its rights and
responsibilities hereunder and thereunder. In addition, the
Guarantor shall pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and
delivery of this Amendment and the other instruments and
documents to be delivered hereunder, and the Guarantor agrees to
save the Agent and each Bank harmless from and against any and
all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes.
Section 6. Execution in Counterparts. This Amendment
may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed
and delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
Section 7. Governing Law. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THE STATE OF CALIFORNIA.
FRONTIER OIL CORPORATION
By: /s/ Jon D. Galvin
- ------------------------------
Jon D. Galvin
Vice President and Chief Financial Officer
UNION BANK, as Agent and as a Bank
By: /s/ Richard P. DeGrey, Jr.
- ------------------------------
Richard P. DeGrey, Jr.
Vice President
By: /s/ John M. Edmonston
- ------------------------------
Name: John M. Edmonston
Title: Vice President
Each of the undersigned hereby consents to
the foregoing Amendment as of the date
first written above:
FRONTIER OIL AND REFINING COMPANY
By: /s/ Jon D. Galvin
- ------------------------------
Jon D. Galvin
Vice President and Chief Financial Officer
WAINOCO OIL CORPORATION
By: /s/ Julie H. Edwards
- ------------------------------
Julie H. Edwards
Vice President, Secretary and Treasurer
FRONTIER HOLDINGS INC.
By: /s/ Jon D. Galvin
- ------------------------------
Jon D. Galvin
Vice President and Chief Financial Officer
FRONTIER REFINING INC.
By: /s/ Jon D. Galvin
- ------------------------------
Jon D. Galvin
Vice President and Chief Financial Officer
FRONTIER PIPELINE INC.
By: /s/ Jon D. Galvin
- ------------------------------
Jon D. Galvin
Vice President
FRONTIER PRODUCTS INC.
By: /s/ Jon D. Galvin
- ------------------------------
Jon D. Galvin
Vice President
SECOND AMENDMENT TO GUARANTY
This Amendment, dated as of December 31, 1993, is entered
into by (1) FRONTIER OIL CORPORATION, a Delaware corporation (the
"Guarantor"), (2) the banks (the "Banks") parties to the Credit
Agreement (as hereinafter defined) and (3) UNION BANK, a
California banking corporation, as agent (the "Agent") for the
Banks.
Recitals
A. Frontier Oil and Refining Company, a Delaware
corporation (the "Borrower"), the Banks and the Agent have
entered into a Revolving Credit and Letter of Credit Agreement
dated as of August 10, 1992, as amended by a letter of waiver and
amendment dated March 17, 1993 and a Second Amendment to
Revolving Credit and Letter of Credit Agreement dated as of April
30, 1993 (said Agreement, as so amended, herein called the
"Credit Agreement"). Terms defined in the Credit Agreement and
not otherwise defined herein have the same respective meanings
when used herein, and the rules of interpretation set forth in
Sections 1.2 and 1.3 of the Credit Agreement are incorporated
herein by reference.
B. The Guarantor has executed a Guaranty dated as of August
18, 1992, as amended by a First Amendment to Guaranty dated as of
October 8, 1992 and a letter of waiver and amendment dated March
17, 1993 (said Guaranty, as so amended, herein called the
"Guaranty"), in favor of the Banks and the Agent, guaranteeing
all of the obligations of the Borrower under the Credit Agreement
and the other Credit Documents.
C. The Banks, the Agent and the Guarantor wish (1) to amend
the Guaranty to change the terms of certain of the covenants
contained therein and (2) to provide for the temporary waiver of
the requirements of another such covenant, and they accordingly
thereby agree as set forth below.
Section 1. Amendments to Guaranty. Effective as of
November 23, 1993 and subject to satisfaction of the conditions
precedent set forth in Section 2, the Guaranty is hereby amended
as follows:
(a) Section 7.2(b) of the Guaranty is amended by
deleting the word "and" at the end of subsection (iv), deleting
the period at the end of subsection (v) and substituting "; and"
and adding the following new subsection (vi):
"(vi) the guaranty by the Guarantor of the
obligations of FRI to Indeck Power Equipment Company under the
Lease dated November 23, 1993 between those two parties,
concerning the lease of two steam boilers."
(b) Section 7.2(c) of the Guaranty is amended by
deleting the figure "$3,000,000" therein and substituting the
figure "$8,000,000."
(c) Section 7.2(j) of the Guaranty is amended by
deleting the figure "$25,000,000" therein and substituting the
figure "$30,000,000."
Section 2. Conditions to Effectiveness. This Amendment
shall become effective when the Agent has received all of the
following documents, each dated the date hereof, in form and
substance satisfactory to the Agent and in the number of
originals requested by the Agent:
(a) this Amendment duly executed by the Guarantor and
the Banks;
(b) a consent to this Amendment duly executed by
Wainoco and the Guarantors other than Frontier Oil Corporation;
(c) copies of the resolutions of the Board of
Directors of the Guarantor approving this Amendment and any
documents delivered by the Guarantor pursuant hereto, certified
by the Secretary or an Assistant Secretary of the Guarantor to be
correct and complete and in full force and effect as of the date
of execution, and as of the effective date, of this Amendment;
(d) a certificate of the Secretary or an Assistant
Secretary of the Guarantor as to the incumbency, and setting
forth a specimen signature, of each of the persons who has signed
this Amendment or any document delivered by the Guarantor
pursuant hereto;
(e) a certificate of the Guarantor, signed on behalf
of the Guarantor by its President or a Vice President and its
Secretary or any Assistant Secretary, certifying as to (A) the
absence of any amendments to the charter documents or bylaws of
the Guarantor on or after August 18, 1992, (B) the truthfulness
in all material respects of the representations and warranties
contained in the Credit Documents as though made on and as of the
effective date of this Amendment and (C) the absence of any event
occurring and continuing, or resulting from the effectiveness of
this Amendment, that Constitutes a Default or an Event of
Default; and
(f) such other approvals, opinions and documents as
the Agent may reasonably request.
Section 3. Representations and Warranties of Guarantor.
The Guarantor represents and warrants as follows:
(a) The Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware.
(b) The execution, delivery and performance by the
Guarantor of this Amendment and the Credit Documents, as amended
hereby, to which it is or is to be a party are within the
Guarantor's corporate powers, have been duly authorized by all
necessary corporate action and do not (i) contravene the
Guarantor's charter documents or bylaws, (ii) contravene any
Governmental Rule or contractual restriction binding on or
affecting the Guarantor or (iii) result in or require the
creation or imposition of any Lien or preferential arrangement of
any nature (other than any created by the Credit Documents) upon
or with respect to any of the properties now owned or hereafter
acquired by the Guarantor.
(c) No Governmental Action is required for the due
execution, delivery and performance by the Guarantor of this
Amendment or any of the Credit Documents, as amended hereby, to
which the Guarantor is or is to be a party.
(d) This Amendment and each of the other Credit
Documents, as amended hereby, to which the Guarantor is a party
constitute legal, valid and binding obligations of the Guarantor
enforceable against the Guarantor in accordance with their
respective terms.
(e) The Stock Pledge Agreement constitutes a valid and
perfected a first-priority Lien on the Collateral covered
thereby, enforceable against all third parties in all
jurisdictions, and secures the payment of all obligations of the
Guarantor under the Guaranty, as amended hereby; and the
execution, delivery and performance of this Amendment do not
adversely affect the Lien of the Stock Pledge Agreement.
(f) The consolidated balance sheet of the Guarantor
and its Subsidiaries as of December 31, 1992 and the related
consolidated statements of income, retained earnings and cash
flows of the Guarantor and its Subsidiaries for the fiscal year
then ended, certified by Arthur Andersen & Co., independent
public accountants, and the report as of October 31, 1993
referred to in Section 7.1(j) (i) of the Guaranty, certified by
the chief financial officer or chief accounting officer of the
Guarantor, fairly present the consolidated financial condition of
the Guarantor and its Subsidiaries as of such dates and the
consolidated results of the operations of the Guarantor and its
Subsidiaries for the fiscal periods ended on such dates, all in
accordance with generally accepted accounting principles applied
on a consistent basis. Since October 31, 1993 there has been no
material adverse change in the business, condition (financial or
otherwise), operations, performance, properties or prospects of
the Guarantor or any of its Subsidiaries. The Guarantor and its
Subsidiaries have no material contingent liabilities except as
disclosed in such financial statements or the notes thereto.
(g) There is no pending or, to the knowledge of the
Guarantor, threatened action or proceeding affecting the
Guarantor or any its Subsidiaries before any Governmental Person
or arbitrator that may materially and adversely affect the
financial condition or operations of the Guarantor or any of its
Subsidiaries or that purports to affect the legality, validity or
enforceability of this Amendment or any of the other Credit
Documents, as amended hereby, to which the Guarantor is a party.
Section 4. Waiver. The Banks hereby waive the requirements
of Section 7.2(a) of the Guaranty during the period from December
31, 1993 to June 30, 1994, but only to the extent that such
requirements are violated by Liens now existing in favor of Petro
Engineering and Construction, Inc. and certain union workers, as
disclosed in the letter dated December 10, 1993 from Jon D.
Galvin of the Guarantor to Richard P. DeGrey, Jr. of the Agent,
copies of which letter (including attachments) have been
delivered to the Banks. The effectiveness of this waiver is
conditioned upon the accuracy of the information contained in the
aforementioned letter (including attachments), and any material
adverse change or material inaccuracy in such information shall
cause this waiver to be of no further force or effect.
Section 5. Reference to and Effect on Credit Documents.
(a) On and after the effective date of this Amendment,
each reference in the Guaranty to "this Guaranty," "hereunder,"
"hereof," "herein" or any other expression of like import
referring to the Guaranty, and each reference in the other Credit
Documents to "the FOC Guaranty," "thereunder," "thereof,"
"therein" or any other expression of like import referring to the
Guaranty, shall mean and be a reference to the Guaranty as
amended by this Amendment.
(b) Except as specifically amended above and except
for an amendment to the Credit Agreement entered into
simultaneously herewith, the Guaranty and the other Credit
Documents shall remain in full force and effect and are hereby
ratified and confirmed. Without limiting the generality of the
foregoing, the Stock Pledge Agreement and all of the Collateral
described therein do and shall continue to secure the payment of
all obligations of the Guarantor under the Guaranty, as amended
hereby.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate
as a waiver of any right, power or remedy of any Bank or the
Agent under any of the Credit Documents or constitute a waiver of
any provision of any of the Credit Documents.
Section 6. Costs, Expenses and Taxes. The Guarantor agrees
to pay on demand all costs and expenses of the Agent in
connection with the preparation, execution and delivery of this
Amendment and the other instruments and documents to be delivered
hereunder, including the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect thereto and with
respect to advising the Agent as to its rights and
responsibilities hereunder and thereunder. In addition, the
Guarantor shall pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and
delivery of this Amendment and the other instruments and
documents to be delivered hereunder, and the Guarantor agrees to
save the Agent and each Bank harmless from and against any and
all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes.
Section 7. Execution in Counterparts. This Amendment may
be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed
and delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
Section 8. Governing Law. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE
STATE OF CALIFORNIA.
FRONTIER OIL CORPORATION
By: /s/ Jon D. Galvin
- -------------------------
Jon D. Galvin
Vice President and
Chief Financial Officer
UNION BANK, as Agent and as a Bank
By: /s/ Richard P. DeGrey, Jr.
- -------------------------
Richard P. DeGrey, Jr.
Vice President
By: /s/ Walter M. Roth
- -------------------------
Name: Walter M. Roth
Title: Vice President
BANQUE PARIBAS
By: /s/ Edward K. Chin
- -------------------------
Name: Edward K. Chin
Title: Vice President
By: /s/ Philippe De Gentile
- -------------------------
Name: Philippe De Gentile
Title: DGM
DEN NORSKE BANK AS
By: /s/ Nelvin Farstad
- -------------------------
Name: Nelvin Farstad
Title: Senior Vice President, New York Branch
By: /s/ Philip F. Kurpiewski
- -------------------------
Name: Philip F. Kurpiewski
Title: Vice President, New York Branch
July 6, 1994
Frontier Oil Corporation
1700 Lincoln, Suite 2100
Denver, Colorado 80203
Attention: Mr. Jon D. Galvin
Vice President and Chief Financial Officer
Re: Third Amendment to Guaranty
Gentlemen:
We refer to the Guaranty made by Frontier Oil Corporation
(the "Guarantor") as of August 18, 1992, as amended by a First
Amendment to Guaranty dated as of October 8, 1992, a letter of
waiver and amendment dated March 17, 1993 and a Second Amendment
to Guaranty dated as of December 31, 1993 (said Guaranty, as so
amended, herein called the "Guaranty"), in favor of (1) Union
Bank, Banque Paribas and Den norske Bank AS (the "Banks") and (2)
Union Bank, as agent (the "Agent") for the Banks. Unless
otherwise defined herein, terms defined in or pursuant to the
Guaranty are used herein as therein defined.
The Banks wish to establish limitations on capital
expenditures by the Guarantor and its Subsidiaries for calendar
year 1994 and subsequent years. Accordingly, the parties hereby
agree that, effective as of the date first set forth above,
Section 7.2(j) of the Guaranty is amended in full to read as
follows:
"(j) Capital Expenditures. The Guarantor will not
make, or permit any of its Subsidiaries to make, any expenditure
for fixed or capital assets that would cause the aggregate of all
such expenditures made by the Guarantor and its Subsidiaries to
exceed $15,000,000 in any calendar year, commencing with calendar
year 1994."
On and after the effective date of this letter amendment,
each reference in the Guaranty to "this Guaranty," "hereunder,"
"hereof," "herein" or words of like import referring to the
Guaranty, and each reference in the other Credit Documents to
"the FOC Guaranty," "thereunder," "thereof," "therein" or words
of like import referring to the Guaranty, shall mean and be a
reference to the Guaranty as amended by this letter amendment.
The Guaranty, as amended by this letter amendment, is and shall
continue to be in full force and effect and is hereby ratified
and confirmed in all respects.
This letter amendment may be executed in any number of
counterparts and by any combination of the parties hereto in
separate counterparts, each of which counterparts shall be an
original and all of which taken together shall constitute one and
the same letter amendment.
If you agree to the terms and provisions hereof, please
evidence your agreement by executing and returning five
counterparts of this letter amendment to the Agent. This letter
amendment shall become effective as of the date first set forth
above when it has been executed and delivered by all of the
parties hereto and when the Agent has received the following
documents from the Guarantor, in form and substance satisfactory
to the Agent: (1) copies of the resolutions of the Board of
Directors of the Guarantor approving this letter amendment and
any documents delivered by the Guarantor in connection herewith,
certified by the Secretary or an Assistant Secretary of the
Guarantor to be correct and complete and in full force and effect
as of the date of execution, and as of the effective date, of
this letter amendment; and (2) a certificate of the Secretary or
an Assistant Secretary of the Guarantor as to the incumbency, and
setting forth a specimen signature, of each of the persons who
has signed this letter amendment or any document delivered by the
Guarantor in connection herewith.
Very truly yours,
UNION BANK, as Agent and as a Bank
By: /s/ Richard P. DeGrey, Jr.
- -------------------------------
Richard P. DeGrey, Jr.
Vice President
By: /s/ Walter M. Roth
- -------------------------------
Name: Walter M. Roth
Title: Vice President
Agreed as of the date
first written above:
FRONTIER OIL CORPORATION
By: /s/ Jon D. Galvin
- -------------------------------
Jon D. Galvin
Vice President and
Chief Financial Officer
BANQUE PARIBAS
By: Marian Livingston
- -------------------------------
Name: Marian Livingston
Title: Vice President
By: /s/ J. Wehner
- ------------------------------
Name: J. Wehner
Title: Senior Vice President
DEN NORSKE BANK AS
By: /s/ Theodore S. Jadick, Jr.
- ------------------------------
Name: Theodore S. Jadick, Jr.
Title: Senior Vice President
By: /s/ Jairo Jimenez
- ------------------------------
Name: Jairo Jimenez
Title: Assistant Treasurer
July 1, 1995
Frontier Oil Corporation
1700 Lincoln, Suite 2100
Denver, Colorado 80203
Attention: Mr. Jon D. Galvin
Vice President and Chief Financial Officer
Re: Fourth Amendment to Guaranty
Gentlemen:
We refer to the Guaranty made by Frontier Oil Corporation
(the "Guarantor") as of August 18, 1992, as amended by a First
Amendment to Guaranty dated as of October 8, 1992, a letter of
waiver and amendment dated March 17, 1993, a Second Amendment to
Guaranty dated as of December 31, 1993 and a Third Amendment to
Guaranty dated July 6, 1994 (said Guaranty, as so amended, herein
called the "Guaranty"), in favor of (1) Union Bank, Banque
Paribas and Den norske Bank AS (the "Banks") and (2) Union Bank,
as agent (the "Agent") for the Banks. Unless otherwise defined
herein, terms defined in or pursuant to the Guaranty are used
herein as therein defined.
The Guarantor has requested that Section 7.2(k) of the
Guaranty (concerning liquidity coverage) be amended as set forth
below, and the Banks are willing to do so. Accordingly, the
parties hereby agree that, effective as of May 1, 1995, Section
7.2(k) of the Guaranty is amended in full to read as follows:
"(k) Maintenance of Liquidity Coverage Ratio. The
Guarantor will not permit the consolidated Liquidity Coverage
Ratio of it and its Subsidiaries as of the end of any calendar
month to be less than 1.08 to 1.0."
On and after the effective date of this letter amendment,
each reference in the Guaranty to "this Guaranty," "hereunder,"
"hereof," "herein" or words of like import referring to the
Guaranty, and each reference in the other Credit Documents to
"the FOC Guaranty," "thereunder," "thereof," "therein" or words
of like import referring to the Guaranty, shall mean and be a
reference to the Guaranty as amended by this letter amendment.
The Guaranty, as amended by this letter amendment, is and shall
continue to be in full force and effect and is hereby ratified
and confirmed in all respects.
This letter amendment may be executed in any number of
counterparts and by any combination of the parties hereto in
separate counterparts, each of which counterparts shall be an
original and all of which taken together shall constitute one and
the same letter amendment.
If you agree to the terms and provisions hereof, please
evidence your agreement by executing and returning five
counterparts of this letter amendment to the Agent. This letter
amendment shall become effective as described above when it has
been executed and delivered by all of the parties hereto and when
the Agent has received the following documents from the
Guarantor, in form and substance satisfactory to the Agent: (1)
copies of the resolutions of the Board of Directors of the
Guarantor approving this letter amendment and any documents
delivered by the Guarantor in connection herewith, certified by
the Secretary or an Assistant Secretary of the Guarantor to be
correct and complete and in full force and effect as of the date
of execution, and as of the effective date, of this letter
amendment; and (2) a certificate of the Secretary or an Assistant
Secretary of the Guarantor as to the incumbency, and setting
forth a specimen signature, of each of the persons who has signed
this letter amendment or any document delivered by the Guarantor
in connection herewith.
Very truly yours,
UNION BANK, as Agent and as a Bank
By: /s/ Richard P. DeGrey, Jr.
- -------------------------------
Richard P. DeGrey, Jr.
Vice President
Agreed as of the date first written above:
FRONTIER OIL CORPORATION
By: /s/ Jon D. Galvin
- -------------------------------
Jon D. Galvin
Vice President and Chief Financial Officer
BANQUE PARIBAS
By: /s/ Mark M. Green
- -------------------------------
Name: Mark M. Green
Title: Vice President
By: /s/ Barton D. Schouest
- -------------------------------
Name: Barton D. Schouest
Title: Group Vice President
DEN NORSKE BANK AS
By: /s/ Theodore S. Jadick, Jr.
- -------------------------------
Name: Theodore S. Jadick, Jr.
Title: Senior Vice President
By: /s/ Fran Meyers
- -------------------------------
Name: Fran Meyers
Title: Vice President
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT executed as of the 3rd day of April, 1995, by
and between Wainoco Oil Corporation, a Wyoming corporation (the
"Company"), and James R. Gibbs (the "Executive").
W I T N E S S E T H:
WHEREAS the Executive is a principal officer of the Company
and an integral part of its management;
WHEREAS, the Company wishes to assure both itself and the
Executive of continuity of management in the event of any actual
or threatened change in control of the Company;
WHEREAS, this Agreement is not intended to alter materially
the compensation and benefits that the Executive could reasonably
expect in the absence of a change in control of the Company and,
accordingly, this Agreement will be operative only upon a change
in control of the Company, as that term is hereafter defined.
NOW, THEREFORE, in consideration of the premises and
covenants herein contained and other good, valuable and binding
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed by and between the parties as
follows:
1. Operation of Agreement.
1.01 This Agreement shall be binding immediately upon
its execution by the parties hereto, but, anything in this
Agreement to the contrary notwithstanding, neither the Agreement
nor any provision thereof shall be operative unless and until
there has been a Change in Control of the Company as defined in
paragraph 1.02 below. Upon the date of such a Change in Control
of the Company (the "Effective Date"), this Agreement and all
provisions thereof shall become operative immediately, without
the necessity of any further action on the part of either party
hereto.
1.02 For the purpose of this Agreement, the term
"Change in Control of the Company" shall mean a change in control
of a nature that would be required to be disclosed in a proxy
statement, governed by the rules of the Securities and Exchange
Commission as in effect on the date of this Agreement; provided
that, without limitation, such a change in control shall be
deemed to have occurred if and when (a) any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) is or becomes a beneficial owner, directly
or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then
outstanding securities, (b) during any period of 24 consecutive
months, commencing before or after the date of this Agreement,
individuals who at the beginning of such 24 month period were
directors of the Company for whom the Executive shall have voted
cease for any reason to constitute at least a majority of the
Board of Directors of the Company, or (c) during any period after
the date of this Agreement, any event of the nature or type
described in Section 7.03(b)(v).
1.03 This Agreement shall terminate forthwith, and
without more, in the event that Executive ceases to be an
executive officer of the Company at any time prior to the
Effective Date whether by reason of his death, Disability,
discharge, resignation or otherwise; except that either party
wishing to do so terminate such employment, other than by reason
of death, Disability or discharge for Cause, hereby agrees to
give the other party at least 60 days' prior written notice.
Notwithstanding the foregoing, following the commencement of any
discussions with any third party that ultimately result in the
occurrence of a Change of Control, the Company shall not at the
instance or upon the suggestion of such third party terminate the
employment or reduce the compensation of Executive. This
Agreement shall terminate three years from the date hereof;
provided, however, that this Agreement shall be continued in full
force and effect for an additional period of three years
following such term, unless the Company elects to terminate this
Agreement at the end of such term by at least 30 days' prior
written notice to Executive; and provided, further, following the
commencement of any discussions with any third party that
ultimately result in the occurrence of a Change of Control, the
Company shall not make such election to terminate at the instance
or upon the suggestion of such third party.
1.04 Except as provided in paragraph 1.03 above,
nothing expressed or implied herein shall create any right or
duty (on the part of the Company or Executive) to have Executive
remain in the employment of the Company at any time prior to the
Effective Date, each reserving all rights to terminate the
employment relationship at any time (subject to the notice
requirement contained in paragraph 1.03 above) prior to the
Effective Date with or without Cause.
2. Employment; Period of Employment.
2.01 The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to
remain in the employ of the Company, or subject to the terms of
this Agreement, such other corporate profit center as shall then
be the principal successor to the business, assets and properties
of the Company, for the period set forth in paragraph 2.02 below
(the "Period of Employment") in the position and with the duties
and responsibilities set forth in Section 3 below, and upon the
other terms and conditions hereinafter stated.
2.02 The Period of Employment, subject only to the
provisions of Section 6 below relating to death or Disability,
shall continue for a period of three years from the Effective
Date.
3. Position, Duties, Responsibilities.
3.01 It is contemplated that at all times during the
Period of Employment the Executive shall continue to serve as a
principal officer of the Company with the office and title of
President and Chief Executive Officer of the Company and continue
to have duties and responsibilities commensurate with those
duties and responsibilities imposed on the Executive immediately
prior to the Effective Date.
3.02 During the Period of Employment the Executive
shall also serve and continue to serve, if and when elected and
reelected, as an officer or director, or both, of any subsidiary,
division or affiliate of the Company.
3.03 Throughout the Period of Employment the Executive
shall devote his full time and undivided attention during normal
business hours to the business and affairs of the Company, except
for reasonable vacations and except for illness or incapacity,
but nothing in this Agreement shall preclude the Executive from
devoting reasonable periods required for serving as a director or
member of a committee of any organization involving no conflict
of interest with the interests of the Company, from engaging in
charitable and community activities, and from managing his
personal investments, provided that such activities do not
materially interfere with the regular performance of his duties
and responsibilities under this Agreement.
3.04 The office of the Executive shall be located at
the principal executive offices of the Company. The Executive
shall not be required to change the current situs of his
employment or residence. The Executive also shall not be
required to be absent therefrom on travel status or otherwise
more than a total of 60 working days in any calendar year nor
more than 20 consecutive days at any one time.
4. Compensation, Compensation Plans, Perquisites.
4.01(a) For all services rendered by the Executive in
any capacity during the Period of Employment, including, without
limitation, services as an executive, officer, director or member
of any committee of the Company or of any subsidiary, division or
affiliate thereof, the Executive shall be paid as compensation:
(i) A base salary at no less than the rate in
effect immediately prior to the Effective Date, with increases
(if any) as shall be made from time to time in accordance with
the Employer's regular salary administration practices;
(ii) An annual performance bonus in an amount
no less than the amount of 50% of the base salary determined
pursuant to subparagraph 4.01(a)(i).
(b) Any increase in salary pursuant to clause (i)
of subparagraph 4.01(a) or in bonus or other compensation shall
in no way diminish any other obligation of the Company under this
Agreement.
4.02 During the Period of Employment the Executive
shall be and continue to be a full participant in the Company's
applicable stock option plans and any other compensation plans in
which the Executive participates immediately prior to the
Effective Date, or equivalent successor plans that may be adopted
by the Company, with at least the same reward opportunities to
Executive that have heretofore been provided. Nothing in this
Agreement shall preclude improvement of reward opportunities in
such plans or other plans in accordance with the present practice
of the Company.
4.03 During the Period of Employment, the Executive
shall be entitled to perquisites, including, without limitation,
an office, secretarial and clerical staff, and to fringe
benefits, including, without limitation, the payment or
reimbursement of club dues, in each case at least equal to those
attached to his office immediately prior to the Effective Time,
as well as to reimbursement, upon proper accounting, of
reasonable expenses and disbursements incurred by him in the
course of his duties.
5. Employee Benefit Plans.
5.01 The compensation, together with other matters
provided for in Section 4 above, is in addition to the benefits
provided for in this Section 5.
5.02 The Executive, his dependents and beneficiaries
shall be entitled to all payments and benefits and service
credit, for benefits during the Period of Employment to which
officers of the Company, their dependents and beneficiaries are
entitled as a result of the employment of such officers under the
terms of employee plans and practices of the Company in effect
immediately prior to the Effective Time, including, without
limitation, the Company's retirement program (consisting of the
Wainoco Retirement Savings Plan, the Wainoco Pension Plan, and
the Wainoco Deferred Compensation Plan), the Company's stock
purchase and savings, thrift and investment plans, if any, the
Wainoco Oil Corporation Executive Life Insurance Plan, its group
life insurance plan, its accidental death and dismemberment
insurance, its business travel insurance, its long term
disability, medical, dental and health and welfare plans and
other present or successor plans and practices of the Company,
its subsidiaries and divisions, for which officers, their
dependents and beneficiaries are eligible, and to all payments or
other benefits under any such plan or practice after the Period
of Employment as a result of participation in such plan or
practice during the Period of Employment.
5.03 Nothing in this Agreement shall preclude the
Company from amending or terminating any employee benefit plan or
practice but, it being the intent of the parties that the
Executive shall continue to be entitled during the period of
Employment to perquisites as set forth in paragraph 4.03 above
and to benefits and service credit for benefits under paragraph
5.02 above at least equal to those attached to his position
immediately prior to the Effective Date, nothing in this
Agreement shall operate as, or be construed to reduce or
authorize reduction without the Executive's written consent in
the level of such perquisites, benefits or service credit for
benefits. In the event of any such reduction by amendment or
termination of any plan or practice or otherwise, the Executive,
his dependents and beneficiaries shall continue to be entitled to
perquisites, benefits and service credit for benefits at least
equal to the perquisites and to benefits and service credit for
benefits under such plans or practices that he or his dependents
and beneficiaries would have received if such reduction had not
taken place.
6. Effect of Death or Disability.
6.01 In the event of the death of the Executive during
the Period of Employment, the legal representative of the
Executive shall be entitled to the compensation provided for in
paragraph 4.01 during the balance of the Period of Employment.
The Period of Employment shall be deemed to have ended as of the
close of business on the last day of the twelfth month following
the month in which death shall have occurred but without
prejudice to any other payments due in respect of the Executive's
death hereunder or pursuant to any other agreements or
arrangements with the Company.
6.02 The term "Disability," as used in this Agreement,
shall mean an illness or accident which prevents the Executive
from performing his duties under this Agreement for a period of
six consecutive months. In the event of the Disability of the
Executive during the Period of Employment, the Executive shall be
entitled to the full compensation provided for in this Agreement
for the period of such Disability (i.e., commencing on the date
on which the Disability occurred) but not in excess of six
months. The Period of Employment shall be deemed to have ended
as of the close of business on the last day of such six months'
period but without prejudice to any payments due to the Executive
in respect of disability or any short term illness or accident
which prevents the Executive from performing his duties for a
period of less than six months.
7. Termination.
7.01 In the event of a Termination, as defined in
paragraph 7.03 below, during the Period of Employment, the
provisions of this Section 7 shall apply.
7.02 In the event of a Termination the Company shall,
as liquidated damages or severance pay, or both, pay to the
Executive and provide him, his dependents, beneficiaries and
estate, with the following:
(a) The Company shall continue to pay the
Executive the base salary compensation provided in paragraph
4.01(a)(i) above at the rate in effect at the time of Termination
(which in accordance with the terms of this Agreement shall be no
less than the rate of base salary in effect immediately prior to
the Effective Date). Such base salary shall be paid no less often
than monthly beginning at the end of the month in which
Termination occurred and continuing during the remainder of the
Period of Employment.
(b) The Company shall also continue to pay the
Executive the annual performance bonus provided in paragraph
4.01(a)(ii) above. Such annual performance bonus compensation
shall be paid on an annual basis, so that a payment will be made
in each of the three years of the Employment Period.
(c) During the Employment Period the Executive,
his dependents, beneficiaries and estate, shall continue to be
entitled to all benefits and service credit for benefits under
employee benefit plans of the Company as if still employed during
such period under this Agreement and, if and to the extent that
such benefits or service credit for benefits shall not be payable
or provided under any such plans to the Executive, his
dependents, beneficiaries and estate, by reason of his no longer
being an employee of the Company as the result of Termination,
the Company shall itself pay or provide for payment of such
benefits and the equivalent of service credit for benefits to the
Executive, his dependents, beneficiaries and estate.
(d) The entire Period of Employment shall be
considered service with the Company for the purpose (i) of
continued credits under the Company's retirement programs, as
each plan or program was in effect immediately prior to
Termination and (ii) of all other benefit plans of the Company as
in effect immediately prior to Termination.
(e) In the event that the Executive shall at the
time of Termination hold an outstanding and unexercised (whether
or not exercisable at the time) option or options theretofore
granted by the Company, the Company shall, in addition to the
amounts provided for above, pay to the Executive in a lump sum an
amount equal to the excess above the option price under each such
option of the Fair Market Value at the time of Termination of the
shares subject to each such option. Solely for the purpose of
this subparagraph (e), Fair Market Value at the time of
Termination shall be deemed to mean the higher of (i) the average
of the reported closing prices of the Common Shares of the
Company, as reported on the New York Stock Exchange - Composite
Transactions, on the last trading day prior to the Termination
and on the last trading day of each of the two preceding thirty-
day periods, and (ii) in the event that a Change in Control, as
defined in paragraph 1.02 above, prior to Termination shall have
taken place as the result of a tender offer and such Change in
Control was consummated within twelve months of Termination, the
price paid for a majority of the Common Shares of the Company in
the course of such tender offer.
(f) At the Company's option, the Company may pay
Executive the total of all amounts payable to Executive for the
balance of the Term of Employment pursuant to subparagraphs (a)
and (b) of this Section 7.02 in a lump sum payment. Executive
may also elect, at any time during the remaining Term of
Employment, to receive all amounts payable to him for the balance
of the Term of Employment pursuant to subparagraphs (a) and (b)
of this Section 7.02 in a lump sum payment by providing written
notice of such election to the Company. The Company agrees to
make a lump sum payment of the total of such amounts within 30
days of Executive's notice of election to receive lump sum
payment. It is acknowledged and agreed that no lump sum payment
will shorten the Term of Employment of Executive, or modify or
obviate any obligations of the Company other than the payments
otherwise due during the Term of Employment pursuant to
subparagraphs (a) and (b) above.
7.03 The word "Termination," for the purpose of this
Section 7 and any other provisions of this Agreement, shall mean:
(a) Termination by the Company of the employment
of the Executive by the Company and its subsidiaries for any
reason other than for Cause as defined in paragraph 7.04 below or
for Disability as defined in subparagraph 6.02 above; or
(b) Termination by the Executive of his
employment by the Company and its subsidiaries upon the
occurrence of any of the following events:
(i) Failure to elect or reelect the
Executive to, or removal of the Executive from, the office set
forth in paragraph 3.01 above.
(ii) A significant change in the nature or
scope of the authorities, powers, functions or duties of
Executive as contemplated by paragraph 3.01 above, or a reduction
in compensation, which is not remedied within 30 days after
receipt by the Company of written notice from the Executive.
(iii) A determination by the Executive made
in good faith that as a result of a Change in Control of the
Company, as defined in paragraph 1.02 above, and a change in
circumstances thereafter and since the date of this Agreement
significantly affecting his position, he is unable to carry out
the authorities, powers, functions or duties attached to his
position and contemplated by Section 3 of this Agreement and the
situation is not remedied within 30 days after receipt by the
Company of written notice from the Executive of such
determination.
(iv) A breach by the Company of any
provision of this Agreement not embraced within the foregoing
clauses (i), (ii) and (iii) of this subparagraph 7.03(b) which is
not remedied within 30 days after receipt by the Company of
written notice from the Executive.
(v) The liquidation, dissolution,
consolidation or merger of the Company or transfer of all or
substantially all of its assets unless a successor or successors
(by merger, consolidation or otherwise) to which all or a
significant portion of its assets have been transferred shall
have assumed all duties and obligations of the Company under this
Agreement.
An election by the Executive to terminate his employment
given under the provisions of this paragraph 7.03 shall not be
deemed a voluntary termination of employment by the Executive for
the purpose of this Agreement or any plan or practice of the
Company.
7.04 For the purpose of any provision of this
Agreement, the termination of the Executive's employment shall be
deemed to have been for "Cause" only if:
(a) termination of his employment shall have
been the result of an act or acts of dishonesty on the part of
the Executive constituting a felony and resulting or intended to
result directly or indirectly in gain or personal enrichment at
the expense of the Company, or
(b) there has been a breach by the Executive
during the Period of Employment of the provisions of paragraph
3.03 above, relating to the time to be devoted to the affairs of
the Company, or of Section 8, relating to confidential
information, and such breach results in demonstrably material
injury to the Company, and with respect to any alleged breach of
paragraph 3.03 hereof, the Executive shall have either failed to
remedy such alleged breach within thirty days from his receipt of
written notice by the Secretary of the Company pursuant to
resolution duly adopted by the Board of Directors of the Company
after notice to the Executive and an opportunity to be heard
demanding that he remedy such alleged breach, or shall have
failed to take all reasonable steps to that end during such
thirty-day period and thereafter; provided that there shall have
been delivered to the Executive a certified copy of a resolution
of the Board of Directors of the Company adopted by the
affirmative vote of not less than three-fourths of the entire
membership of the Board of Directors called and held for that
purpose and at which the Executive was given an opportunity to be
heard, finding that the Executive was guilty of conduct set forth
in subparagraphs (a) or (b) above, specifying the particulars
thereof in detail.
Anything in this paragraph 7.04 or elsewhere in this
Agreement to the contrary notwithstanding, the employment of the
Executive shall in no event be considered to have been terminated
by the Company for Cause if termination of his employment took
place (a) as the result of bad judgment or negligence on the part
of the Executive, or (b) as the result of an act or omission
without intent of gaining therefrom directly or indirectly a
profit to which the Executive was not legally entitled, or (c)
because of an act or omission believed by the Executive in good
faith to have been in or not opposed to the interest of the
Company, or (d) for any act or omission in respect of which a
determination could properly be made that the Executive met the
applicable standard of conduct prescribed for indemnification or
reimbursement or payment of expenses under the Code of
Regulations of the Company or the laws of the State of Wyoming or
the directors' and officers' liability insurance of the Company,
in each case as in effect at the time of such act or omission, or
(e) as the result of an act or omission which occurred more than
twelve calendar months prior to the Executive's having been given
notice of the termination of his employment for such act or
omission unless the commission of such act or such omission could
not at the time of such commission or omission have been known to
a member of the Board of Directors of the Company (other than the
Executive, if he is then a member of the Board of Directors), in
which case more than twelve calendar months from the date that
the commission of such act or such omission was or could
reasonably have been so known, or (f) as the result of a
continuing course of action which commenced and was or could
reasonably have been known to a member of the Board of Directors
of the Company (other than the Executive) more than twelve
calendar months prior to notice having been given to the
Executive of the termination of his employment.
7.05 In the event that the Executive's employment
shall be terminated by the Company during the Period of
Employment and such termination is alleged to be for Cause, or
the Executive's right to terminate his employment under paragraph
7.03(b) above shall be questioned by the Company or for any other
reason, the Executive shall have the right, in addition to all
other rights and remedies provided by law, at his election either
to seek arbitration in Harris County, Texas under the rules of
the American Arbitration Association by serving a notice to
arbitrate upon the Company or to institute a judicial proceeding,
in either case within ninety days after having received notice of
termination of his employment or notice in any form that the
termination of his employment under paragraph 7.03(b) is subject
to question or that the Company is withholding or proposes to
withhold payments or provision of benefits or within such longer
period as may reasonably be necessary for the Executive to take
action in the event that his illness or incapacity should
preclude his taking such action within such ninety-day period.
8. Confidential Information
8.01 The Executive agrees not to disclose, either
while in the Company's employ or at any time thereafter, to any
person not employed by the Company, or not engaged to render
services to the Company, any confidential information obtained by
him while in the employ of the Company, including, without
limitation, any of the Company's inventions, processes, methods
of distribution or customers or trade secrets; provided, however,
that this provision shall not preclude the Executive from use or
disclosure of information known generally to the public or of
information not considered confidential by persons engaged in the
business conducted by the Company or from disclosure required by
law or Court order.
8.02 The Executive also agrees that upon leaving the
Company's employ he will not take with him, without the prior
written consent of an officer authorized to act in the matter by
the Board of Directors of the Company, any drawing, blueprint,
specification or other document of the Company, its subsidiaries,
affiliates and divisions, which is of a confidential nature
relating to the Company, its subsidiaries, affiliates and
divisions, or without limitation, relating to its or their
methods of distribution, or any description of any formulae or
secret processes.
9. Notices
All notices, requests, demands and other communications
provided for by this Agreement shall be deemed to have been duly
given if and when mailed in the continental United States by
registered or certified mail, return receipt requested, postage
prepaid, or personally delivered or sent by telex or other
telegraphic means to the party entitled thereto at the address
stated below or to such changed address as the addressee may have
given by a similar notice:
To the Company: Wainoco Oil Corporation
1200 Smith Street, Suite 2100
Houston, Texas 77002
Attention: Chairman, Compensation Committee
To the Executive: James R. Gibbs
------------------------
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10. General Provisions
10.01 There shall be no right of set-off or
counterclaim in respect of any claim, debt or obligation, against
any payments to the Executive, his dependents, beneficiaries or
estate provided for in this Agreement.
10.02 The Company and the Executive recognize that
each party will have no adequate remedy at law for breach by the
other of any of the agreements contained herein and, in the event
of any such breach, the Company and the Executive hereby agree
and consent that the other shall be entitled to a decree of
specific performance, mandamus or other appropriate remedy to
enforce performance of such agreements.
10.03 No right or interest to or in any payments shall
be assignable by the Executive; provided, however, that this
provision shall not preclude him from designating one or more
beneficiaries to receive any amount that may be payable after his
death and shall not preclude the legal representative of his
estate from assigning any right hereunder to the person or
persons entitled thereto under his will or, in the case of
intestacy, to the person or persons entitled thereto under the
laws of intestacy applicable to his estate. The term "benefi-
ciaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount or, if no
beneficiary has been so designated, the legal representative of
the Executive's estate.
10.04 No right, benefit or interest hereunder, shall
be subject to anticipation, alienation, sale, assignment,
encumbrance, charge, pledge, hypothecation, or set-off in respect
of any claim, debt or obligation, or to execution, attachment,
levy or similar process, or assignment by operation of law. Any
attempt, voluntary or involuntary, to effect any action specified
in the immediately preceding sentence shall, to the full extent
permitted by law, be null, void and of no effect.
10.05 In the event of the Executive's death or a
judicial determination of his incompetence, reference in this
Agreement to the Executive shall be deemed, where appropriate, to
refer to his legal representative or, where appropriate, to his
beneficiary or beneficiaries.
10.06 The titles to sections in this Agreement are
intended solely for convenience and no provision of this
Agreement is to be construed by reference to the title of any
section.
10.07 No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver
shall be authorized by the Board of Directors of the Company or
any authorized committee of the Board of Directors and shall be
agreed to in writing, signed by the Executive and by an officer
of the Company thereunto duly authorized.
10.08 Except as otherwise specifically provided in
this Agreement, no waiver by either party hereto of any breach by
the other party hereto of any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of a subsequent breach of such condition or provision or a
waiver of a similar or dissimilar provision or condition at the
same or at any prior or subsequent time.
10.09 In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable
for any reason, the remaining provisions and portions of this
Agreement shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law.
10.10 Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the assets of the Company
whether by merger, consolidation, sale or otherwise (and such
successor shall thereafter be deemed "the Company" for the
purposes of this Agreement), but shall not otherwise be
assignable by the Company.
10.11 This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
(other than the choice of law principles thereof).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
WAINOCO OIL CORPORATION
By: /s/ James S. Palmer
ATTEST:
/s/ Julie H. Edwards
Secretary
/s/ J. R. Gibbs
James R. Gibbs
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT executed as of the 3rd day of April, 1995, by and
between Wainoco Oil Corporation, a Wyoming corporation (the "Company"), and
Julie H. Edwards (the "Executive").
W I T N E S S E T H:
WHEREAS the Executive is a principal officer of the Company and an
integral part of its management;
WHEREAS, the Company wishes to assure both itself and the Executive of
continuity of management in the event of any actual or threatened change in
control of the Company;
WHEREAS, this Agreement is not intended to alter materially the
compensation and benefits that the Executive could reasonably expect in the
absence of a change in control of the Company and, accordingly, this
Agreement will be operative only upon a change in control of the Company,
as that term is hereafter defined.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained and other good, valuable and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, it is hereby agreed by
and between the parties as follows:
1. Operation of Agreement.
1.01 This Agreement shall be binding immediately upon its
execution by the parties hereto, but, anything in this Agreement to the
contrary notwithstanding, neither the Agreement nor any provision thereof
shall be operative unless and until there has been a Change in Control of
the Company as defined in paragraph 1.02 below. Upon the date of such a
Change in Control of the Company (the "Effective Date"), this Agreement and
all provisions thereof shall become operative immediately, without the
necessity of any further action on the part of either party hereto.
1.02 For the purpose of this Agreement, the term "Change in
Control of the Company" shall mean a change in control of a nature that
would be required to be disclosed in a proxy statement, governed by the
rules of the Securities and Exchange Commission as in effect on the date of
this Agreement; provided that, without limitation, such a change in control
shall be deemed to have occurred if and when (a) any "person" (as such term
is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934) is or becomes a beneficial owner, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities, (b) during any period
of 24 consecutive months, commencing before or after the date of this
Agreement, individuals who at the beginning of such 24 month period were
directors of the Company for whom the Executive shall have voted cease for
any reason to constitute at least a majority of the Board of Directors of
the Company, or (c) during any period after the date of this Agreement, any
event of the nature or type described in Section 7.03(b)(v).
1.03 This Agreement shall terminate forthwith, and without
more, in the event that Executive ceases to be an executive officer of the
Company at any time prior to the Effective Date whether by reason of her
death, Disability, discharge, resignation or otherwise; except that either
party wishing to do so terminate such employment, other than by reason of
death, Disability or discharge for Cause, hereby agrees to give the other
party at least 60 days' prior written notice. Notwithstanding the
foregoing, following the commencement of any discussions with any third
party that ultimately result in the occurrence of a Change of Control, the
Company shall not at the instance or upon the suggestion of such third
party terminate the employment or reduce the compensation of Executive.
This Agreement shall terminate three years from the date hereof; provided,
however, that this Agreement shall be continued in full force and effect
for an additional period of three years following such term, unless the
Company elects to terminate this Agreement at the end of such term by at
least 30 days' prior written notice to Executive; and provided, further,
following the commencement of any discussions with any third party that
ultimately result in the occurrence of a Change of Control, the Company
shall not make such election to terminate at the instance or upon the
suggestion of such third party.
1.04 Except as provided in paragraph 1.03 above, nothing
expressed or implied herein shall create any right or duty (on the part of
the Company or Executive) to have Executive remain in the employment of the
Company at any time prior to the Effective Date, each reserving all rights
to terminate the employment relationship at any time (subject to the notice
requirement contained in paragraph 1.03 above) prior to the Effective Date
with or without Cause.
2. Employment; Period of Employment.
2.01 The Company hereby agrees to continue the Executive in its
employ, and the Executive hereby agrees to remain in the employ of the
Company, or subject to the terms of this Agreement, such other corporate
profit center as shall then be the principal successor to the business,
assets and properties of the Company, for the period set forth in paragraph
2.02 below (the "Period of Employment") in the position and with the duties
and responsibilities set forth in Section 3 below, and upon the other terms
and conditions hereinafter stated.
2.02 The Period of Employment, subject only to the provisions
of Section 6 below relating to death or Disability, shall continue for a
period of three years from the Effective Date.
3. Position, Duties, Responsibilities.
3.01 It is contemplated that at all times during the Period of
Employment the Executive shall continue to serve as a principal officer of
the Company with the office and title of Senior Vice President - Finance
and Chief Financial Officer of the Company and continue to have duties and
responsibilities commensurate with those duties and responsibilities
imposed on the Executive immediately prior to the Effective Date.
3.02 During the Period of Employment the Executive shall also
serve and continue to serve, if and when elected and reelected, as an
officer or director, or both, of any subsidiary, division or affiliate of
the Company.
3.03 Throughout the Period of Employment the Executive shall
devote her full time and undivided attention during normal business hours
to the business and affairs of the Company, except for reasonable vacations
and except for illness or incapacity, but nothing in this Agreement shall
preclude the Executive from devoting reasonable periods required for
serving as a director or member of a committee of any organization
involving no conflict of interest with the interests of the Company, from
engaging in charitable and community activities, and from managing her
personal investments, provided that such activities do not materially
interfere with the regular performance of her duties and responsibilities
under this Agreement.
3.04 The office of the Executive shall be located at the
principal executive offices of the Company. The Executive shall not be
required to change the current situs of her employment or residence. The
Executive also shall not be required to be absent therefrom on travel
status or otherwise more than a total of 60 working days in any calendar
year nor more than 20 consecutive days at any one time.
4. Compensation, Compensation Plans, Perquisites.
4.01(a) For all services rendered by the Executive in any
capacity during the Period of Employment, including, without limitation,
services as an executive, officer, director or member of any committee of
the Company or of any subsidiary, division or affiliate thereof, the
Executive shall be paid as compensation:
(i) A base salary at no less than the rate in effect
immediately prior to the Effective Date, with increases (if any) as shall
be made from time to time in accordance with the Employer's regular salary
administration practices;
(ii) An annual performance bonus in an amount no less than
the amount of 35% of the base salary determined pursuant to subparagraph
4.01(a)(i).
(b) Any increase in salary pursuant to clause (i) of
subparagraph 4.01(a) or in bonus or other compensation shall in no way
diminish any other obligation of the Company under this Agreement.
4.02 During the Period of Employment the Executive shall be and
continue to be a full participant in the Company's applicable stock option
plans and any other compensation plans in which the Executive participates
immediately prior to the Effective Date, or equivalent successor plans that
may be adopted by the Company, with at least the same reward opportunities
to Executive that have heretofore been provided. Nothing in this Agreement
shall preclude improvement of reward opportunities in such plans or other
plans in accordance with the present practice of the Company.
4.03 During the Period of Employment, the Executive shall be
entitled to perquisites, including, without limitation, an office,
secretarial and clerical staff, and to fringe benefits, including, without
limitation, the payment or reimbursement of club dues, in each case at
least equal to those attached to her office immediately prior to the
Effective Time, as well as to reimbursement, upon proper accounting, of
reasonable expenses and disbursements incurred by her in the course of her
duties.
5. Employee Benefit Plans.
5.01 The compensation, together with other matters provided for
in Section 4 above, is in addition to the benefits provided for in this
Section 5.
5.02 The Executive, her dependents and beneficiaries shall be
entitled to all payments and benefits and service credit, for benefits
during the Period of Employment to which officers of the Company, their
dependents and beneficiaries are entitled as a result of the employment of
such officers under the terms of employee plans and practices of the
Company in effect immediately prior to the Effective Time, including,
without limitation, the Company's retirement program (consisting of the
Wainoco Retirement Savings Plan, the Wainoco Pension Plan, and the Wainoco
Deferred Compensation Plan), the Company's stock purchase and savings,
thrift and investment plans, if any, the Wainoco Oil Corporation Executive
Life Insurance Plan, its group life insurance plan, its accidental death
and dismemberment insurance, its business travel insurance, its long term
disability, medical, dental and health and welfare plans and other present
or successor plans and practices of the Company, its subsidiaries and
divisions, for which officers, their dependents and beneficiaries are
eligible, and to all payments or other benefits under any such plan or
practice after the Period of Employment as a result of participation in
such plan or practice during the Period of Employment.
5.03 Nothing in this Agreement shall preclude the Company from
amending or terminating any employee benefit plan or practice but, it being
the intent of the parties that the Executive shall continue to be entitled
during the period of Employment to perquisites as set forth in paragraph
4.03 above and to benefits and service credit for benefits under paragraph
5.02 above at least equal to those attached to her position immediately
prior to the Effective Date, nothing in this Agreement shall operate as, or
be construed to reduce or authorize reduction without the Executive's
written consent in the level of such perquisites, benefits or service
credit for benefits. In the event of any such reduction by amendment or
termination of any plan or practice or otherwise, the Executive, her
dependents and beneficiaries shall continue to be entitled to perquisites,
benefits and service credit for benefits at least equal to the perquisites
and to benefits and service credit for benefits under such plans or
practices that she or her dependents and beneficiaries would have received
if such reduction had not taken place.
6. Effect of Death or Disability.
6.01 In the event of the death of the Executive during the
Period of Employment, the legal representative of the Executive shall be
entitled to the compensation provided for in paragraph 4.01 during the
balance of the Period of Employment. The Period of Employment shall be
deemed to have ended as of the close of business on the last day of the
twelfth month following the month in which death shall have occurred but
without prejudice to any other payments due in respect of the Executive's
death hereunder or pursuant to any other agreements or arrangements with
the Company.
6.02 The term "Disability," as used in this Agreement, shall
mean an illness or accident which prevents the Executive from performing
her duties under this Agreement for a period of six consecutive months. In
the event of the Disability of the Executive during the Period of
Employment, the Executive shall be entitled to the full compensation
provided for in this Agreement for the period of such Disability (i.e.,
commencing on the date on which the Disability occurred) but not in excess
of six months. The Period of Employment shall be deemed to have ended as
of the close of business on the last day of such six months' period but
without prejudice to any payments due to the Executive in respect of
disability or any short term illness or accident which prevents the
Executive from performing her duties for a period of less than six months.
7. Termination.
7.01 In the event of a Termination, as defined in paragraph
7.03 below, during the Period of Employment, the provisions of this
Section 7 shall apply.
7.02 In the event of a Termination the Company shall, as
liquidated damages or severance pay, or both, pay to the Executive and
provide her, her dependents, beneficiaries and estate, with the following:
(a) The Company shall continue to pay the Executive the
base salary compensation provided in paragraph 4.01(a)(i) above at the rate
in effect at the time of Termination (which in accordance with the terms of
this Agreement shall be no less than the rate of base salary in effect
immediately prior to the Effective Date). Such base salary shall be paid no
less often than monthly beginning at the end of the month in which
Termination occurred and continuing during the remainder of the Period of
Employment.
(b) The Company shall also continue to pay the Executive
the annual performance bonus provided in paragraph 4.01(a)(ii) above. Such
annual performance bonus compensation shall be paid on an annual basis, so
that a payment will be made in each of the three years of the Employment
Period.
(c) During the Employment Period the Executive, her
dependents, beneficiaries and estate, shall continue to be entitled to all
benefits and service credit for benefits under employee benefit plans of
the Company as if still employed during such period under this Agreement
and, if and to the extent that such benefits or service credit for benefits
shall not be payable or provided under any such plans to the Executive, her
dependents, beneficiaries and estate, by reason of her no longer being an
employee of the Company as the result of Termination, the Company shall
itself pay or provide for payment of such benefits and the equivalent of
service credit for benefits to the Executive, her dependents, beneficiaries
and estate.
(d) The entire Period of Employment shall be considered
service with the Company for the purpose (i) of continued credits under the
Company's retirement programs, as each plan or program was in effect
immediately prior to Termination and (ii) of all other benefit plans of the
Company as in effect immediately prior to Termination.
(e) In the event that the Executive shall at the time of
Termination hold an outstanding and unexercised (whether or not exercisable
at the time) option or options theretofore granted by the Company, the
Company shall, in addition to the amounts provided for above, pay to the
Executive in a lump sum an amount equal to the excess above the option
price under each such option of the Fair Market Value at the time of
Termination of the shares subject to each such option. Solely for the
purpose of this subparagraph (e), Fair Market Value at the time of
Termination shall be deemed to mean the higher of (i) the average of the
reported closing prices of the Common Shares of the Company, as reported on
the New York Stock Exchange - Composite Transactions, on the last trading
day prior to the Termination and on the last trading day of each of the two
preceding thirty-day periods, and (ii) in the event that a Change in
Control, as defined in paragraph 1.02 above, prior to Termination shall
have taken place as the result of a tender offer and such Change in Control
was consummated within twelve months of Termination, the price paid for a
majority of the Common Shares of the Company in the course of such tender
offer.
(f) At the Company's option, the Company may pay
Executive the total of all amounts payable to Executive for the balance of
the Term of Employment pursuant to subparagraphs (a) and (b) of this
Section 7.02 in a lump sum payment. Executive may also elect, at any time
during the remaining Term of Employment, to receive all amounts payable to
her for the balance of the Term of Employment pursuant to subparagraphs (a)
and (b) of this Section 7.02 in a lump sum payment by providing written
notice of such election to the Company. The Company agrees to make a lump
sum payment of the total of such amounts within 30 days of Executive's
notice of election to receive lump sum payment. It is acknowledged and
agreed that no lump sum payment will shorten the Term of Employment of
Executive, or modify or obviate any obligations of the Company other than
the payments otherwise due during the Term of Employment pursuant to
subparagraphs (a) and (b) above.
7.03 The word "Termination," for the purpose of this Section 7
and any other provisions of this Agreement, shall mean:
(a) Termination by the Company of the employment of the
Executive by the Company and its subsidiaries for any reason other than for
Cause as defined in paragraph 7.04 below or for Disability as defined in
subparagraph 6.02 above; or
(b) Termination by the Executive of her employment by
the Company and its subsidiaries upon the occurrence of any of the
following events:
(i) Failure to elect or reelect the Executive to,
or removal of the Executive from, the office set forth in paragraph 3.01
above.
(ii) A significant change in the nature or scope of
the authorities, powers, functions or duties of Executive as contemplated
by paragraph 3.01 above, or a reduction in compensation, which is not
remedied within 30 days after receipt by the Company of written notice from
the Executive.
(iii) A determination by the Executive made in good
faith that as a result of a Change in Control of the Company, as defined in
paragraph 1.02 above, and a change in circumstances thereafter and since
the date of this Agreement significantly affecting her position, she is
unable to carry out the authorities, powers, functions or duties attached
to her position and contemplated by Section 3 of this Agreement and the
situation is not remedied within 30 days after receipt by the Company of
written notice from the Executive of such determination.
(iv) A breach by the Company of any provision of
this Agreement not embraced within the foregoing clauses (i), (ii) and
(iii) of this subparagraph 7.03(b) which is not remedied within 30 days
after receipt by the Company of written notice from the Executive.
(v) The liquidation, dissolution, consolidation or
merger of the Company or transfer of all or substantially all of its assets
unless a successor or successors (by merger, consolidation or otherwise) to
which all or a significant portion of its assets have been transferred
shall have assumed all duties and obligations of the Company under this
Agreement.
An election by the Executive to terminate her employment given under
the provisions of this paragraph 7.03 shall not be deemed a voluntary
termination of employment by the Executive for the purpose of this
Agreement or any plan or practice of the Company.
7.04 For the purpose of any provision of this Agreement, the
termination of the Executive's employment shall be deemed to have been for
"Cause" only if:
(a) termination of her employment shall have been the
result of an act or acts of dishonesty on the part of the Executive
constituting a felony and resulting or intended to result directly or
indirectly in gain or personal enrichment at the expense of the Company, or
(b) there has been a breach by the Executive during the
Period of Employment of the provisions of paragraph 3.03 above, relating to
the time to be devoted to the affairs of the Company, or of Section 8,
relating to confidential information, and such breach results in
demonstrably material injury to the Company, and with respect to any
alleged breach of paragraph 3.03 hereof, the Executive shall have either
failed to remedy such alleged breach within thirty days from her receipt of
written notice by the Secretary of the Company pursuant to resolution duly
adopted by the Board of Directors of the Company after notice to the
Executive and an opportunity to be heard demanding that she remedy such
alleged breach, or shall have failed to take all reasonable steps to that
end during such thirty-day period and thereafter; provided that there shall
have been delivered to the Executive a certified copy of a resolution of
the Board of Directors of the Company adopted by the affirmative vote of
not less than three-fourths of the entire membership of the Board of
Directors called and held for that purpose and at which the Executive was
given an opportunity to be heard, finding that the Executive was guilty of
conduct set forth in subparagraphs (a) or (b) above, specifying the
particulars thereof in detail.
Anything in this paragraph 7.04 or elsewhere in this Agreement to the
contrary notwithstanding, the employment of the Executive shall in no event
be considered to have been terminated by the Company for Cause if
termination of her employment took place (a) as the result of bad judgment
or negligence on the part of the Executive, or (b) as the result of an act
or omission without intent of gaining therefrom directly or indirectly a
profit to which the Executive was not legally entitled, or (c) because of
an act or omission believed by the Executive in good faith to have been in
or not opposed to the interest of the Company, or (d) for any act or
omission in respect of which a determination could properly be made that
the Executive met the applicable standard of conduct prescribed for
indemnification or reimbursement or payment of expenses under the Code of
Regulations of the Company or the laws of the State of Wyoming or the
directors' and officers' liability insurance of the Company, in each case
as in effect at the time of such act or omission, or (e) as the result of
an act or omission which occurred more than twelve calendar months prior to
the Executive's having been given notice of the termination of her
employment for such act or omission unless the commission of such act or
such omission could not at the time of such commission or omission have
been known to a member of the Board of Directors of the Company (other than
the Executive, if she is then a member of the Board of Directors), in which
case more than twelve calendar months from the date that the commission of
such act or such omission was or could reasonably have been so known, or
(f) as the result of a continuing course of action which commenced and was
or could reasonably have been known to a member of the Board of Directors
of the Company (other than the Executive) more than twelve calendar months
prior to notice having been given to the Executive of the termination of
her employment.
7.05 In the event that the Executive's employment shall be
terminated by the Company during the Period of Employment and such
termination is alleged to be for Cause, or the Executive's right to
terminate her employment under paragraph 7.03(b) above shall be questioned
by the Company or for any other reason, the Executive shall have the right,
in addition to all other rights and remedies provided by law, at her
election either to seek arbitration in Harris County, Texas under the rules
of the American Arbitration Association by serving a notice to arbitrate
upon the Company or to institute a judicial proceeding, in either case
within ninety days after having received notice of termination of her
employment or notice in any form that the termination of her employment
under paragraph 7.03(b) is subject to question or that the Company is
withholding or proposes to withhold payments or provision of benefits or
within such longer period as may reasonably be necessary for the Executive
to take action in the event that her illness or incapacity should preclude
her taking such action within such ninety-day period.
8. Confidential Information
8.01 The Executive agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not employed by
the Company, or not engaged to render services to the Company, any
confidential information obtained by her while in the employ of the
Company, including, without limitation, any of the Company's inventions,
processes, methods of distribution or customers or trade secrets; provided,
however, that this provision shall not preclude the Executive from use or
disclosure of information known generally to the public or of information
not considered confidential by persons engaged in the business conducted by
the Company or from disclosure required by law or Court order.
8.02 The Executive also agrees that upon leaving the Company's
employ she will not take with her, without the prior written consent of an
officer authorized to act in the matter by the Board of Directors of the
Company, any drawing, blueprint, specification or other document of the
Company, its subsidiaries, affiliates and divisions, which is of a
confidential nature relating to the Company, its subsidiaries, affiliates
and divisions, or without limitation, relating to its or their methods of
distribution, or any description of any formulae or secret processes.
9. Notices
All notices, requests, demands and other communications provided
for by this Agreement shall be deemed to have been duly given if and when
mailed in the continental United States by registered or certified mail,
return receipt requested, postage prepaid, or personally delivered or sent
by telex or other telegraphic means to the party entitled thereto at the
address stated below or to such changed address as the addressee may have
given by a similar notice:
To the Company: Wainoco Oil Corporation
1200 Smith Street, Suite 2100
Houston, Texas 77002
Attention: Chairman, Compensation Committee
To the Executive: Julie H. Edwards
----------------------------
----------------------------
10. General Provisions
10.01 There shall be no right of set-off or counterclaim in
respect of any claim, debt or obligation, against any payments to the
Executive, her dependents, beneficiaries or estate provided for in this
Agreement.
10.02 The Company and the Executive recognize that each party
will have no adequate remedy at law for breach by the other of any of the
agreements contained herein and, in the event of any such breach, the
Company and the Executive hereby agree and consent that the other shall be
entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of such agreements.
10.03 No right or interest to or in any payments shall be
assignable by the Executive; provided, however, that this provision shall
not preclude her from designating one or more beneficiaries to receive any
amount that may be payable after her death and shall not preclude the legal
representative of her estate from assigning any right hereunder to the
person or persons entitled thereto under her will or, in the case of
intestacy, to the person or persons entitled thereto under the laws of
intestacy applicable to her estate. The term "beneficiaries" as used in
this Agreement shall mean a beneficiary or beneficiaries so designated to
receive any such amount or, if no beneficiary has been so designated, the
legal representative of the Executive's estate.
10.04 No right, benefit or interest hereunder, shall be subject
to anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation, or set-off in respect of any claim, debt or obligation, or
to execution, attachment, levy or similar process, or assignment by
operation of law. Any attempt, voluntary or involuntary, to effect any
action specified in the immediately preceding sentence shall, to the full
extent permitted by law, be null, void and of no effect.
10.05 In the event of the Executive's death or a judicial
determination of her incompetence, reference in this Agreement to the
Executive shall be deemed, where appropriate, to refer to her legal
representative or, where appropriate, to her beneficiary or beneficiaries.
10.06 The titles to sections in this Agreement are intended
solely for convenience and no provision of this Agreement is to be con-
strued by reference to the title of any section.
10.07 No provision of this Agreement may be amended, modified
or waived unless such amendment, modification or waiver shall be authorized
by the Board of Directors of the Company or any authorized committee of the
Board of Directors and shall be agreed to in writing, signed by the
Executive and by an officer of the Company thereunto duly authorized.
10.08 Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the other
party hereto of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of a subsequent
breach of such condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any prior or subsequent
time.
10.09 In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions and portions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
10.10 Except as otherwise provided herein, this Agreement shall
be binding upon and inure to the benefit of the Company and any successor
of the Company, including, without limitation, any corporation or
corporations acquiring directly or indirectly all or substantially all of
the assets of the Company whether by merger, consolidation, sale or
otherwise (and such successor shall thereafter be deemed "the Company" for
the purposes of this Agreement), but shall not otherwise be assignable by
the Company.
10.11 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (other than the choice of
law principles thereof).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WAINOCO OIL CORPORATION
By: /s/ J. R. Gibbs
------------------
ATTEST:
/s/ Julie H. Edwards
- --------------------
Secretary
/s/ Julie H. Edwards
- --------------------
Julie H. Edwards
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT executed as of the 3rd day of April, 1995, by
and between Wainoco Oil Corporation, a Wyoming corporation (the
"Company"), and S. Clark Johnson (the "Executive").
W I T N E S S E T H:
WHEREAS the Executive is a principal officer of the Company
and an integral part of its management;
WHEREAS, the Executive is the President of Frontier Oil
Company, a principal subsidiary of the Company;
WHEREAS, the Company wishes to assure both itself and the
Executive of continuity of management in the event of any actual
or threatened change in control of the Company;
WHEREAS, this Agreement is not intended to alter materially
the compensation and benefits that the Executive could reasonably
expect in the absence of a change in control of the Company and,
accordingly, this Agreement will be operative only upon a change
in control of the Company, as that term is hereafter defined.
NOW, THEREFORE, in consideration of the premises and
covenants herein contained and other good, valuable and binding
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed by and between the parties as
follows:
1. Operation of Agreement.
1.01 This Agreement shall be binding immediately upon
its execution by the parties hereto, but, anything in this
Agreement to the contrary notwithstanding, neither the Agreement
nor any provision thereof shall be operative unless and until
there has been a Change in Control of the Company as defined in
paragraph 1.02 below. Upon the date of such a Change in Control
of the Company (the "Effective Date"), this Agreement and all
provisions thereof shall become operative immediately, without
the necessity of any further action on the part of either party
hereto.
1.02 For the purpose of this Agreement, the term
"Change in Control of the Company" shall mean a change in control
of a nature that would be required to be disclosed in a proxy
statement, governed by the rules of the Securities and Exchange
Commission as in effect on the date of this Agreement; provided
that, without limitation, such a change in control shall be
deemed to have occurred if and when (a) any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) is or becomes a beneficial owner, directly
or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then
outstanding securities, (b) during any period of 24 consecutive
months, commencing before or after the date of this Agreement,
individuals who at the beginning of such 24 month period were
directors of the Company for whom the Executive shall have voted
cease for any reason to constitute at least a majority of the
Board of Directors of the Company, (c) during any period after
the date of this Agreement, any event of the nature or type
described in Section 7.03(b)(v), or (d) during any period after
the date of this Agreement, any event of the nature or type
described in 7.03(b)(vi).
1.03 This Agreement shall terminate forthwith, and
without more, in the event that Executive ceases to be an
executive officer of the Company at any time prior to the
Effective Date whether by reason of his death, Disability,
discharge, resignation or otherwise; except that either party
wishing to do so terminate such employment, other than by reason
of death, Disability or discharge for Cause, hereby agrees to
give the other party at least 60 days' prior written notice.
Notwithstanding the foregoing, following the commencement of any
discussions with any third party that ultimately result in the
occurrence of a Change of Control, the Company shall not at the
instance or upon the suggestion of such third party terminate the
employment or reduce the compensation of Executive. This
Agreement shall terminate three years from the date hereof;
provided, however, that this Agreement shall be continued in full
force and effect for an additional period of three years
following such term, unless the Company elects to terminate this
Agreement at the end of such term by at least 30 days' prior
written notice to Executive; and provided, further, following the
commencement of any discussions with any third party that
ultimately result in the occurrence of a Change of Control, the
Company shall not make such election to terminate at the instance
or upon the suggestion of such third party.
1.04 Except as provided in paragraph 1.03 above,
nothing expressed or implied herein shall create any right or
duty (on the part of the Company or Executive) to have Executive
remain in the employment of the Company at any time prior to the
Effective Date, each reserving all rights to terminate the
employment relationship at any time (subject to the notice
requirement contained in paragraph 1.03 above) prior to the
Effective Date with or without Cause.
2. Employment; Period of Employment.
2.01 The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to
remain in the employ of the Company, or subject to the terms of
this Agreement, such other corporate profit center as shall then
be the principal successor to the business, assets and properties
of the Company, for the period set forth in paragraph 2.02 below
(the "Period of Employment") in the position and with the duties
and responsibilities set forth in Section 3 below, and upon the
other terms and conditions hereinafter stated.
2.02 The Period of Employment, subject only to the
provisions of Section 6 below relating to death or Disability,
shall continue for a period of three years from the Effective
Date.
3. Position, Duties, Responsibilities.
3.01 It is contemplated that at all times during the
Period of Employment the Executive shall continue to serve as a
principal officer of the Company with the office and title of
Senior Vice President - Refining Operations of the Company and
continue to have duties and responsibilities commensurate with
those duties and responsibilities imposed on the Executive
immediately prior to the Effective Date.
3.02 During the Period of Employment the Executive
shall also serve and continue to serve, if and when elected and
reelected, as an officer or director, or both, of any subsidiary,
division or affiliate of the Company.
3.03 Throughout the Period of Employment the Executive
shall devote his full time and undivided attention during normal
business hours to the business and affairs of the Company, except
for reasonable vacations and except for illness or incapacity,
but nothing in this Agreement shall preclude the Executive from
devoting reasonable periods required for serving as a director or
member of a committee of any organization involving no conflict
of interest with the interests of the Company, from engaging in
charitable and community activities, and from managing his
personal investments, provided that such activities do not
materially interfere with the regular performance of his duties
and responsibilities under this Agreement.
3.04 The office of the Executive shall be located at
the principal executive offices of the Company. The Executive
shall not be required to change the current situs of his
employment or residence. The Executive also shall not be
required to be absent therefrom on travel status or otherwise
more than a total of 60 working days in any calendar year nor
more than 20 consecutive days at any one time.
4. Compensation, Compensation Plans, Perquisites.
4.01(a) For all services rendered by the Executive in
any capacity during the Period of Employment, including, without
limitation, services as an executive, officer, director or member
of any committee of the Company or of any subsidiary, division or
affiliate thereof, the Executive shall be paid as compensation:
(i) A base salary at no less than the rate in
effect immediately prior to the Effective Date, with increases
(if any) as shall be made from time to time in accordance with
the Employer's regular salary administration practices;
(ii) An annual performance bonus in an amount
no less than the amount of 35% of the base salary determined
pursuant to subparagraph 4.01(a)(i).
(b) Any increase in salary pursuant to clause (i)
of subparagraph 4.01(a) or in bonus or other compensation shall
in no way diminish any other obligation of the Company under this
Agreement.
(c) The amounts otherwise due Executive pursuant to
subparagraphs 4.01(a) and (b) shall be reduced by the amount of
any other salary or performance bonus payments made to Executive
by the Company during the Period of Employment pursuant to any
other employment agreement between Executive and the Company to
the extent that such payments are attributable to the Period of
Employment.
4.02 During the Period of Employment the Executive
shall be and continue to be a full participant in the Company's
applicable stock option plans and any other compensation plans in
which the Executive participates immediately prior to the
Effective Date, or equivalent successor plans that may be adopted
by the Company, with at least the same reward opportunities to
Executive that have heretofore been provided. Nothing in this
Agreement shall preclude improvement of reward opportunities in
such plans or other plans in accordance with the present practice
of the Company.
4.03 During the Period of Employment, the Executive
shall be entitled to perquisites, including, without limitation,
an office, secretarial and clerical staff, and to fringe
benefits, including, without limitation, the payment or
reimbursement of club dues, in each case at least equal to those
attached to his office immediately prior to the Effective Time,
as well as to reimbursement, upon proper accounting, of
reasonable expenses and disbursements incurred by him in the
course of his duties.
5. Employee Benefit Plans.
5.01 The compensation, together with other matters
provided for in Section 4 above, is in addition to the benefits
provided for in this Section 5.
5.02 The Executive, his dependents and beneficiaries
shall be entitled to all payments and benefits and service
credit, for benefits during the Period of Employment to which
officers of the Company, their dependents and beneficiaries are
entitled as a result of the employment of such officers under the
terms of employee plans and practices of the Company in effect
immediately prior to the Effective Time, including, without
limitation, the Company's retirement program (consisting of the
Wainoco Retirement Savings Plan, the Wainoco Pension Plan, and
the Wainoco Deferred Compensation Plan), the Company's stock
purchase and savings, thrift and investment plans, if any, the
Wainoco Oil Corporation Executive Life Insurance Plan, its group
life insurance plan, its accidental death and dismemberment
insurance, its business travel insurance, its long term
disability, medical, dental and health and welfare plans and
other present or successor plans and practices of the Company,
its subsidiaries and divisions, for which officers, their
dependents and beneficiaries are eligible, and to all payments or
other benefits under any such plan or practice after the Period
of Employment as a result of participation in such plan or
practice during the Period of Employment.
5.03 Nothing in this Agreement shall preclude the
Company from amending or terminating any employee benefit plan or
practice but, it being the intent of the parties that the
Executive shall continue to be entitled during the period of
Employment to perquisites as set forth in paragraph 4.03 above
and to benefits and service credit for benefits under paragraph
5.02 above at least equal to those attached to his position
immediately prior to the Effective Date, nothing in this
Agreement shall operate as, or be construed to reduce or
authorize reduction without the Executive's written consent in
the level of such perquisites, benefits or service credit for
benefits. In the event of any such reduction by amendment or
termination of any plan or practice or otherwise, the Executive,
his dependents and beneficiaries shall continue to be entitled to
perquisites, benefits and service credit for benefits at least
equal to the perquisites and to benefits and service credit for
benefits under such plans or practices that he or his dependents
and beneficiaries would have received if such reduction had not
taken place.
6. Effect of Death or Disability.
6.01 In the event of the death of the Executive during
the Period of Employment, the legal representative of the
Executive shall be entitled to the compensation provided for in
paragraph 4.01 during the balance of the Period of Employment.
The Period of Employment shall be deemed to have ended as of the
close of business on the last day of the twelfth month following
the month in which death shall have occurred but without
prejudice to any other payments due in respect of the Executive's
death hereunder or pursuant to any other agreements or
arrangements with the Company.
6.02 The term "Disability," as used in this Agreement,
shall mean an illness or accident which prevents the Executive
from performing his duties under this Agreement for a period of
six consecutive months. In the event of the Disability of the
Executive during the Period of Employment, the Executive shall be
entitled to the full compensation provided for in this Agreement
for the period of such Disability (i.e., commencing on the date
on which the Disability occurred) but not in excess of six
months. The Period of Employment shall be deemed to have ended
as of the close of business on the last day of such six months'
period but without prejudice to any payments due to the Executive
in respect of disability or any short term illness or accident
which prevents the Executive from performing his duties for a
period of less than six months.
7. Termination.
7.01 In the event of a Termination, as defined in
paragraph 7.03 below, during the Period of Employment, the
provisions of this Section 7 shall apply.
7.02 In the event of a Termination the Company shall,
as liquidated damages or severance pay, or both, pay to the
Executive and provide him, his dependents, beneficiaries and
estate, with the following:
(a) The Company shall continue to pay the
Executive the base salary compensation provided in paragraph
4.01(a)(i) above at the rate in effect at the time of Termination
(which in accordance with the terms of this Agreement shall be no
less than the rate of base salary in effect immediately prior to
the Effective Date), subject to any reduction pursuant to
paragraph 4.01(c). Such base salary shall be paid no less often
than monthly beginning at the end of the month in which
Termination occurred and continuing during the remainder of the
Period of Employment.
(b) The Company shall also continue to pay the
Executive the annual performance bonus provided in paragraph
4.01(a)(ii) above, subject to any reduction pursuant to paragraph
4.01(c). Such annual performance bonus compensation shall be
paid on an annual basis, so that a payment will be made in each
of the three years of the Employment Period.
(c) During the Employment Period the Executive,
his dependents, beneficiaries and estate, shall continue to be
entitled to all benefits and service credit for benefits under
employee benefit plans of the Company as if still employed during
such period under this Agreement and, if and to the extent that
such benefits or service credit for benefits shall not be payable
or provided under any such plans to the Executive, his
dependents, beneficiaries and estate, by reason of his no longer
being an employee of the Company as the result of Termination,
the Company shall itself pay or provide for payment of such
benefits and the equivalent of service credit for benefits to the
Executive, his dependents, beneficiaries and estate.
(d) The entire Period of Employment shall be
considered service with the Company for the purpose (i) of
continued credits under the Company's retirement programs, as
each plan or program was in effect immediately prior to
Termination and (ii) of all other benefit plans of the Company as
in effect immediately prior to Termination.
(e) In the event that the Executive shall at the
time of Termination hold an outstanding and unexercised (whether
or not exercisable at the time) option or options theretofore
granted by the Company, the Company shall, in addition to the
amounts provided for above, pay to the Executive in a lump sum an
amount equal to the excess above the option price under each such
option of the Fair Market Value at the time of Termination of the
shares subject to each such option. Solely for the purpose of
this subparagraph (e), Fair Market Value at the time of
Termination shall be deemed to mean the higher of (i) the average
of the reported closing prices of the Common Shares of the
Company, as reported on the New York Stock Exchange - Composite
Transactions, on the last trading day prior to the Termination
and on the last trading day of each of the two preceding thirty-
day periods, and (ii) in the event that a Change in Control, as
defined in paragraph 1.02 above, prior to Termination shall have
taken place as the result of a tender offer and such Change in
Control was consummated within twelve months of Termination, the
price paid for a majority of the Common Shares of the Company in
the course of such tender offer.
(f) At the Company's option, the Company may pay
Executive the total of all amounts payable to Executive for the
balance of the Term of Employment pursuant to subparagraphs (a)
and (b) of this Section 7.02 in a lump sum payment. Executive
may also elect, at any time during the remaining Term of
Employment, to receive all amounts payable to him for the balance
of the Term of Employment pursuant to subparagraphs (a) and (b)
of this Section 7.02 in a lump sum payment by providing written
notice of such election to the Company. The Company agrees to
make a lump sum payment of the total of such amounts within 30
days of Executive's notice of election to receive lump sum
payment. It is acknowledged and agreed that no lump sum payment
will shorten the Term of Employment of Executive, or modify or
obviate any obligations of the Company other than the payments
otherwise due during the Term of Employment pursuant to
subparagraphs (a) and (b) above.
7.03 The word "Termination," for the purpose of this
Section 7 and any other provisions of this Agreement, shall mean:
(a) Termination by the Company of the employment
of the Executive by the Company and its subsidiaries for any
reason other than for Cause as defined in paragraph 7.04 below or
for Disability as defined in subparagraph 6.02 above; or
(b) Termination by the Executive of his
employment by the Company and its subsidiaries upon the
occurrence of any of the following events:
(i) Failure to elect or reelect the
Executive to, or removal of the Executive from, the office set
forth in paragraph 3.01 above.
(ii) A significant change in the nature or
scope of the authorities, powers, functions or duties of
Executive as contemplated by paragraph 3.01 above, or a reduction
in compensation, which is not remedied within 30 days after
receipt by the Company of written notice from the Executive.
(iii) A determination by the Executive made
in good faith that as a result of a Change in Control of the
Company, as defined in paragraph 1.02 above, and a change in
circumstances thereafter and since the date of this Agreement
significantly affecting his position, he is unable to carry out
the authorities, powers, functions or duties attached to his
position and contemplated by Section 3 of this Agreement and the
situation is not remedied within 30 days after receipt by the
Company of written notice from the Executive of such
determination.
(iv) A breach by the Company of any
provision of this Agreement not embraced within the foregoing
clauses (i), (ii) and (iii) of this subparagraph 7.03(b) which is
not remedied within 30 days after receipt by the Company of
written notice from the Executive.
(v) The liquidation, dissolution,
consolidation or merger of the Company or transfer of all or
substantially all of its assets unless a successor or successors
(by merger, consolidation or otherwise) to which all or a
significant portion of its assets have been transferred shall
have assumed all duties and obligations of the Company under this
Agreement.
(vi) The liquidation, dissolution,
consolidation or merger of Frontier Oil Company or transfer of
all or substantially all of its assets unless Wainoco Oil
Corporation remains the ultimate parent of Frontier Oil Company.
An election by the Executive to terminate his employment
given under the provisions of this paragraph 7.03 shall not be
deemed a voluntary termination of employment by the Executive for
the purpose of this Agreement or any plan or practice of the
Company.
7.04 For the purpose of any provision of this
Agreement, the termination of the Executive's employment shall be
deemed to have been for "Cause" only if:
(a) termination of his employment shall have
been the result of an act or acts of dishonesty on the part of
the Executive constituting a felony and resulting or intended to
result directly or indirectly in gain or personal enrichment at
the expense of the Company, or
(b) there has been a breach by the Executive
during the Period of Employment of the provisions of paragraph
3.03 above, relating to the time to be devoted to the affairs of
the Company, or of Section 8, relating to confidential
information, and such breach results in demonstrably material
injury to the Company, and with respect to any alleged breach of
paragraph 3.03 hereof, the Executive shall have either failed to
remedy such alleged breach within thirty days from his receipt of
written notice by the Secretary of the Company pursuant to
resolution duly adopted by the Board of Directors of the Company
after notice to the Executive and an opportunity to be heard
demanding that he remedy such alleged breach, or shall have
failed to take all reasonable steps to that end during such
thirty-day period and thereafter; provided that there shall have
been delivered to the Executive a certified copy of a resolution
of the Board of Directors of the Company adopted by the
affirmative vote of not less than three-fourths of the entire
membership of the Board of Directors called and held for that
purpose and at which the Executive was given an opportunity to be
heard, finding that the Executive was guilty of conduct set forth
in subparagraphs (a) or (b) above, specifying the particulars
thereof in detail.
Anything in this paragraph 7.04 or elsewhere in this
Agreement to the contrary notwithstanding, the employment of the
Executive shall in no event be considered to have been terminated
by the Company for Cause if termination of his employment took
place (a) as the result of bad judgment or negligence on the part
of the Executive, or (b) as the result of an act or omission
without intent of gaining therefrom directly or indirectly a
profit to which the Executive was not legally entitled, or (c)
because of an act or omission believed by the Executive in good
faith to have been in or not opposed to the interest of the
Company, or (d) for any act or omission in respect of which a
determination could properly be made that the Executive met the
applicable standard of conduct prescribed for indemnification or
reimbursement or payment of expenses under the Code of
Regulations of the Company or the laws of the State of Wyoming or
the directors' and officers' liability insurance of the Company,
in each case as in effect at the time of such act or omission, or
(e) as the result of an act or omission which occurred more than
twelve calendar months prior to the Executive's having been given
notice of the termination of his employment for such act or
omission unless the commission of such act or such omission could
not at the time of such commission or omission have been known to
a member of the Board of Directors of the Company (other than the
Executive, if he is then a member of the Board of Directors), in
which case more than twelve calendar months from the date that
the commission of such act or such omission was or could
reasonably have been so known, or (f) as the result of a
continuing course of action which commenced and was or could
reasonably have been known to a member of the Board of Directors
of the Company (other than the Executive) more than twelve
calendar months prior to notice having been given to the
Executive of the termination of his employment.
7.05 In the event that the Executive's employment
shall be terminated by the Company during the Period of
Employment and such termination is alleged to be for Cause, or
the Executive's right to terminate his employment under paragraph
7.03(b) above shall be questioned by the Company or for any other
reason, the Executive shall have the right, in addition to all
other rights and remedies provided by law, at his election either
to seek arbitration in Harris County, Texas under the rules of
the American Arbitration Association by serving a notice to
arbitrate upon the Company or to institute a judicial proceeding,
in either case within ninety days after having received notice of
termination of his employment or notice in any form that the
termination of his employment under paragraph 7.03(b) is subject
to question or that the Company is withholding or proposes to
withhold payments or provision of benefits or within such longer
period as may reasonably be necessary for the Executive to take
action in the event that his illness or incapacity should
preclude his taking such action within such ninety-day period.
8. Confidential Information
8.01 The Executive agrees not to disclose, either
while in the Company's employ or at any time thereafter, to any
person not employed by the Company, or not engaged to render
services to the Company, any confidential information obtained by
him while in the employ of the Company, including, without
limitation, any of the Company's inventions, processes, methods
of distribution or customers or trade secrets; provided, however,
that this provision shall not preclude the Executive from use or
disclosure of information known generally to the public or of
information not considered confidential by persons engaged in the
business conducted by the Company or from disclosure required by
law or Court order.
8.02 The Executive also agrees that upon leaving the
Company's employ he will not take with him, without the prior
written consent of an officer authorized to act in the matter by
the Board of Directors of the Company, any drawing, blueprint,
specification or other document of the Company, its subsidiaries,
affiliates and divisions, which is of a confidential nature
relating to the Company, its subsidiaries, affiliates and
divisions, or without limitation, relating to its or their
methods of distribution, or any description of any formulae or
secret processes.
9. Notices
All notices, requests, demands and other communications
provided for by this Agreement shall be deemed to have been duly
given if and when mailed in the continental United States by
registered or certified mail, return receipt requested, postage
prepaid, or personally delivered or sent by telex or other
telegraphic means to the party entitled thereto at the address
stated below or to such changed address as the addressee may have
given by a similar notice:
To the Company: Wainoco Oil Corporation
1200 Smith Street, Suite 2100
Houston, Texas 77002
Attention: Chairman, Compensation Committee
To the Executive: S. Clark Johnson
------------------------
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10. General Provisions
10.01 There shall be no right of set-off or
counterclaim in respect of any claim, debt or obligation, against
any payments to the Executive, his dependents, beneficiaries or
estate provided for in this Agreement.
10.02 The Company and the Executive recognize that
each party will have no adequate remedy at law for breach by the
other of any of the agreements contained herein and, in the event
of any such breach, the Company and the Executive hereby agree
and consent that the other shall be entitled to a decree of
specific performance, mandamus or other appropriate remedy to
enforce performance of such agreements.
10.03 No right or interest to or in any payments shall
be assignable by the Executive; provided, however, that this
provision shall not preclude him from designating one or more
beneficiaries to receive any amount that may be payable after his
death and shall not preclude the legal representative of his
estate from assigning any right hereunder to the person or
persons entitled thereto under his will or, in the case of
intestacy, to the person or persons entitled thereto under the
laws of intestacy applicable to his estate. The term "benefi-
ciaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount or, if no
beneficiary has been so designated, the legal representative of
the Executive's estate.
10.04 No right, benefit or interest hereunder, shall
be subject to anticipation, alienation, sale, assignment,
encumbrance, charge, pledge, hypothecation, or set-off in respect
of any claim, debt or obligation, or to execution, attachment,
levy or similar process, or assignment by operation of law. Any
attempt, voluntary or involuntary, to effect any action specified
in the immediately preceding sentence shall, to the full extent
permitted by law, be null, void and of no effect.
10.05 In the event of the Executive's death or a
judicial determination of his incompetence, reference in this
Agreement to the Executive shall be deemed, where appropriate, to
refer to his legal representative or, where appropriate, to his
beneficiary or beneficiaries.
10.06 The titles to sections in this Agreement are
intended solely for convenience and no provision of this
Agreement is to be construed by reference to the title of any
section.
10.07 No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver
shall be authorized by the Board of Directors of the Company or
any authorized committee of the Board of Directors and shall be
agreed to in writing, signed by the Executive and by an officer
of the Company thereunto duly authorized.
10.08 Except as otherwise specifically provided in
this Agreement, no waiver by either party hereto of any breach by
the other party hereto of any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of a subsequent breach of such condition or provision or a
waiver of a similar or dissimilar provision or condition at the
same or at any prior or subsequent time.
10.09 In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable
for any reason, the remaining provisions and portions of this
Agreement shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law.
10.10 Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the assets of the Company
whether by merger, consolidation, sale or otherwise (and such
successor shall thereafter be deemed "the Company" for the
purposes of this Agreement), but shall not otherwise be
assignable by the Company.
10.11 This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
(other than the choice of law principles thereof).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
WAINOCO OIL CORPORATION
By: /s/ J. R. Gibbs
------------------
ATTEST:
/s/ Julie H. Edwards
- --------------------
Secretary
/s/ S. Clark Johnson
- --------------------
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT executed as of the 3rd day of April, 1995, by
and between Wainoco Oil Corporation, a Wyoming corporation (the
"Company"), and Robert D. Jones (the "Executive").
W I T N E S S E T H:
WHEREAS the Executive is a principal officer of the Company
and an integral part of its management;
WHEREAS, the Executive is the Manager of Wainoco Oil
Corporation Canada, a principal division of the Company ("Wainoco
Canada");
WHEREAS, the Company wishes to assure both itself and the
Executive of continuity of management in the event of any actual
or threatened change in control of the Company;
WHEREAS, this Agreement is not intended to alter materially
the compensation and benefits that the Executive could reasonably
expect in the absence of a change in control of the Company and,
accordingly, this Agreement will be operative only upon a change
in control of the Company, as that term is hereafter defined.
NOW, THEREFORE, in consideration of the premises and
covenants herein contained and other good, valuable and binding
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed by and between the parties as
follows:
1. Operation of Agreement.
1.01 This Agreement shall be binding immediately upon
its execution by the parties hereto, but, anything in this
Agreement to the contrary notwithstanding, neither the Agreement
nor any provision thereof shall be operative unless and until
there has been a Change in Control of the Company as defined in
paragraph 1.02 below. Upon the date of such a Change in Control
of the Company (the "Effective Date"), this Agreement and all
provisions thereof shall become operative immediately, without
the necessity of any further action on the part of either party
hereto.
1.02 For the purpose of this Agreement, the term
"Change in Control of the Company" shall mean a change in control
of a nature that would be required to be disclosed in a proxy
statement, governed by the rules of the Securities and Exchange
Commission as in effect on the date of this Agreement; provided
that, without limitation, such a change in control shall be
deemed to have occurred if and when (a) any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) is or becomes a beneficial owner, directly
or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then
outstanding securities, (b) during any period of 24 consecutive
months, commencing before or after the date of this Agreement,
individuals who at the beginning of such 24 month period were
directors of the Company for whom the Executive shall have voted
cease for any reason to constitute at least a majority of the
Board of Directors of the Company, (c) during any period after
the date of this Agreement, any event of the nature or type
described in Section 7.03(b)(v), or (d) during any period after
the date of this Agreement, any event of the nature or type
described in 7.03(b)(vi).
1.03 This Agreement shall terminate forthwith, and
without more, in the event that Executive ceases to be an
executive officer of the Company at any time prior to the
Effective Date whether by reason of his death, Disability,
discharge, resignation or otherwise; except that either party
wishing to do so terminate such employment, other than by reason
of death, Disability or discharge for Cause, hereby agrees to
give the other party at least 60 days' prior written notice.
Notwithstanding the foregoing, following the commencement of any
discussions with any third party that ultimately result in the
occurrence of a Change of Control, the Company shall not at the
instance or upon the suggestion of such third party terminate the
employment or reduce the compensation of Executive. This
Agreement shall terminate three years from the date hereof;
provided, however, that this Agreement shall be continued in full
force and effect for an additional period of three years
following such term, unless the Company elects to terminate this
Agreement at the end of such term by at least 30 days' prior
written notice to Executive; and provided, further, following the
commencement of any discussions with any third party that
ultimately result in the occurrence of a Change of Control, the
Company shall not make such election to terminate at the instance
or upon the suggestion of such third party.
1.04 Except as provided in paragraph 1.03 above,
nothing expressed or implied herein shall create any right or
duty (on the part of the Company or Executive) to have Executive
remain in the employment of the Company at any time prior to the
Effective Date, each reserving all rights to terminate the
employment relationship at any time (subject to the notice
requirement contained in paragraph 1.03 above) prior to the
Effective Date with or without Cause.
2. Employment; Period of Employment.
2.01 The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to
remain in the employ of the Company, or subject to the terms of
this Agreement, such other corporate profit center as shall then
be the principal successor to the business, assets and properties
of the Company, for the period set forth in paragraph 2.02 below
(the "Period of Employment") in the position and with the duties
and responsibilities set forth in Section 3 below, and upon the
other terms and conditions hereinafter stated.
2.02 The Period of Employment, subject only to the
provisions of Section 6 below relating to death or Disability,
shall continue for a period of three years from the Effective
Date.
3. Position, Duties, Responsibilities.
3.01 It is contemplated that at all times during the
Period of Employment the Executive shall continue to serve as a
principal officer of the Company with the office and title of
Senior Vice President - Canadian Oil and Gas Operations of the
Company and continue to have duties and responsibilities
commensurate with those duties and responsibilities imposed on
the Executive immediately prior to the Effective Date.
3.02 During the Period of Employment the Executive
shall also serve and continue to serve, if and when elected and
reelected, as an officer or director, or both, of any subsidiary,
division or affiliate of the Company.
3.03 Throughout the Period of Employment the Executive
shall devote his full time and undivided attention during normal
business hours to the business and affairs of the Company, except
for reasonable vacations and except for illness or incapacity,
but nothing in this Agreement shall preclude the Executive from
devoting reasonable periods required for serving as a director or
member of a committee of any organization involving no conflict
of interest with the interests of the Company, from engaging in
charitable and community activities, and from managing his
personal investments, provided that such activities do not
materially interfere with the regular performance of his duties
and responsibilities under this Agreement.
3.04 The office of the Executive shall be located at
the principal executive offices of the Company. The Executive
shall not be required to change the current situs of his
employment or residence. The Executive also shall not be
required to be absent therefrom on travel status or otherwise
more than a total of 60 working days in any calendar year nor
more than 20 consecutive days at any one time.
4. Compensation, Compensation Plans, Perquisites.
4.01(a) For all services rendered by the Executive in
any capacity during the Period of Employment, including, without
limitation, services as an executive, officer, director or member
of any committee of the Company or of any subsidiary, division or
affiliate thereof, the Executive shall be paid as compensation:
(i) A base salary at no less than the rate in
effect immediately prior to the Effective Date, with increases
(if any) as shall be made from time to time in accordance with
the Employer's regular salary administration practices;
(ii) An annual performance bonus in an amount
no less than the amount of 35% of the base salary determined
pursuant to subparagraph 4.01(a)(i).
(b) Any increase in salary pursuant to clause (i)
of subparagraph 4.01(a) or in bonus or other compensation shall
in no way diminish any other obligation of the Company under this
Agreement.
4.02 During the Period of Employment the Executive
shall be and continue to be a full participant in the Company's
applicable stock option plans and any other compensation plans in
which the Executive participates immediately prior to the
Effective Date, or equivalent successor plans that may be adopted
by the Company, with at least the same reward opportunities to
Executive that have heretofore been provided. Nothing in this
Agreement shall preclude improvement of reward opportunities in
such plans or other plans in accordance with the present practice
of the Company.
4.03 During the Period of Employment, the Executive
shall be entitled to perquisites, including, without limitation,
an office, secretarial and clerical staff, and to fringe
benefits, including, without limitation, the payment or
reimbursement of club dues, in each case at least equal to those
attached to his office immediately prior to the Effective Time,
as well as to reimbursement, upon proper accounting, of
reasonable expenses and disbursements incurred by him in the
course of his duties.
5. Employee Benefit Plans.
5.01 The compensation, together with other matters
provided for in Section 4 above, is in addition to the benefits
provided for in this Section 5.
5.02 The Executive, his dependents and beneficiaries
shall be entitled to all payments and benefits and service
credit, for benefits during the Period of Employment to which
officers of the Company, their dependents and beneficiaries are
entitled as a result of the employment of such officers under the
terms of employee plans and practices of the Company in effect
immediately prior to the Effective Time, including, without
limitation, the Company's retirement program for officers of
Wainoco Canada (consisting of the Wainoco Capital Appreciation
Plan for Canadian employees), the Company's stock purchase and
savings, thrift and investment plans, if any, its group life
insurance plan, its accidental death and dismemberment insurance
and its business travel insurance plans for which officers of
Wainoco Canada, their dependents and beneficiaries are eligible,
and to all payments or other benefits under any such plan or
practice after the Period of Employment as a result of
participation in such plan or practice during the Period of
Employment.
5.03 Nothing in this Agreement shall preclude the
Company from amending or terminating any employee benefit plan or
practice but, it being the intent of the parties that the
Executive shall continue to be entitled during the period of
Employment to perquisites as set forth in paragraph 4.03 above
and to benefits and service credit for benefits under paragraph
5.02 above at least equal to those attached to his position
immediately prior to the Effective Date, nothing in this
Agreement shall operate as, or be construed to reduce or
authorize reduction without the Executive's written consent in
the level of such perquisites, benefits or service credit for
benefits. In the event of any such reduction by amendment or
termination of any plan or practice or otherwise, the Executive,
his dependents and beneficiaries shall continue to be entitled to
perquisites, benefits and service credit for benefits at least
equal to the perquisites and to benefits and service credit for
benefits under such plans or practices that he or his dependents
and beneficiaries would have received if such reduction had not
taken place.
6. Effect of Death or Disability.
6.01 In the event of the death of the Executive during
the Period of Employment, the legal representative of the
Executive shall be entitled to the compensation provided for in
paragraph 4.01 during the balance of the Period of Employment.
The Period of Employment shall be deemed to have ended as of the
close of business on the last day of the twelfth month following
the month in which death shall have occurred but without
prejudice to any other payments due in respect of the Executive's
death hereunder or pursuant to any other agreements or
arrangements with the Company.
6.02 The term "Disability," as used in this Agreement,
shall mean an illness or accident which prevents the Executive
from performing his duties under this Agreement for a period of
six consecutive months. In the event of the Disability of the
Executive during the Period of Employment, the Executive shall be
entitled to the full compensation provided for in this Agreement
for the period of such Disability (i.e., commencing on the date
on which the Disability occurred) but not in excess of six
months. The Period of Employment shall be deemed to have ended
as of the close of business on the last day of such six months'
period but without prejudice to any payments due to the Executive
in respect of disability or any short term illness or accident
which prevents the Executive from performing his duties for a
period of less than six months.
7. Termination.
7.01 In the event of a Termination, as defined in
paragraph 7.03 below, during the Period of Employment, the
provisions of this Section 7 shall apply.
7.02 In the event of a Termination the Company shall,
as liquidated damages or severance pay, or both, pay to the
Executive and provide him, his dependents, beneficiaries and
estate, with the following:
(a) The Company shall continue to pay the
Executive the base salary compensation provided in paragraph
4.01(a)(i) above at the rate in effect at the time of Termination
(which in accordance with the terms of this Agreement shall be no
less than the rate of base salary in effect immediately prior to
the Effective Date). Such base salary shall be paid no less often
than monthly beginning at the end of the month in which
Termination occurred and continuing during the remainder of the
Period of Employment.
(b) The Company shall also continue to pay the
Executive the annual performance bonus provided in paragraph
4.01(a)(ii) above. Such annual performance bonus compensation
shall be paid on an annual basis, so that a payment will be made
in each of the three years of the Employment Period.
(c) During the Employment Period the Executive,
his dependents, beneficiaries and estate, shall continue to be
entitled to all benefits and service credit for benefits under
employee benefit plans of the Company as if still employed during
such period under this Agreement and, if and to the extent that
such benefits or service credit for benefits shall not be payable
or provided under any such plans to the Executive, his
dependents, beneficiaries and estate, by reason of his no longer
being an employee of the Company as the result of Termination,
the Company shall itself pay or provide for payment of such
benefits and the equivalent of service credit for benefits to the
Executive, his dependents, beneficiaries and estate.
(d) The entire Period of Employment shall be
considered service with the Company for the purpose (i) of
continued credits under the Company's retirement programs, as
each plan or program was in effect immediately prior to
Termination and (ii) of all other benefit plans of the Company as
in effect immediately prior to Termination.
(e) In the event that the Executive shall at the
time of Termination hold an outstanding and unexercised (whether
or not exercisable at the time) option or options theretofore
granted by the Company, the Company shall, in addition to the
amounts provided for above, pay to the Executive in a lump sum an
amount equal to the excess above the option price under each such
option of the Fair Market Value at the time of Termination of the
shares subject to each such option. Solely for the purpose of
this subparagraph (e), Fair Market Value at the time of
Termination shall be deemed to mean the higher of (i) the average
of the reported closing prices of the Common Shares of the
Company, as reported on the New York Stock Exchange - Composite
Transactions, on the last trading day prior to the Termination
and on the last trading day of each of the two preceding thirty-
day periods, and (ii) in the event that a Change in Control, as
defined in paragraph 1.02 above, prior to Termination shall have
taken place as the result of a tender offer and such Change in
Control was consummated within twelve months of Termination, the
price paid for a majority of the Common Shares of the Company in
the course of such tender offer.
(f) At the Company's option, the Company may pay
Executive the total of all amounts payable to Executive for the
balance of the Term of Employment pursuant to subparagraphs (a)
and (b) of this Section 7.02 in a lump sum payment. Executive
may also elect, at any time during the remaining Term of
Employment, to receive all amounts payable to him for the balance
of the Term of Employment pursuant to subparagraphs (a) and (b)
of this Section 7.02 in a lump sum payment by providing written
notice of such election to the Company. The Company agrees to
make a lump sum payment of the total of such amounts within 30
days of Executive's notice of election to receive lump sum
payment. It is acknowledged and agreed that no lump sum payment
will shorten the Term of Employment of Executive, or modify or
obviate any obligations of the Company other than the payments
otherwise due during the Term of Employment pursuant to
subparagraphs (a) and (b) above.
7.03 The word "Termination," for the purpose of this
Section 7 and any other provisions of this Agreement, shall mean:
(a) Termination by the Company of the employment
of the Executive by the Company and its subsidiaries for any
reason other than for Cause as defined in paragraph 7.04 below or
for Disability as defined in subparagraph 6.02 above; or
(b) Termination by the Executive of his
employment by the Company and its subsidiaries upon the
occurrence of any of the following events:
(i) Failure to elect or reelect the
Executive to, or removal of the Executive from, the office set
forth in paragraph 3.01 above.
(ii) A significant change in the nature or
scope of the authorities, powers, functions or duties of
Executive as contemplated by paragraph 3.01 above, or a reduction
in compensation, which is not remedied within 30 days after
receipt by the Company of written notice from the Executive.
(iii) A determination by the Executive made
in good faith that as a result of a Change in Control of the
Company, as defined in paragraph 1.02 above, and a change in
circumstances thereafter and since the date of this Agreement
significantly affecting his position, he is unable to carry out
the authorities, powers, functions or duties attached to his
position and contemplated by Section 3 of this Agreement and the
situation is not remedied within 30 days after receipt by the
Company of written notice from the Executive of such
determination.
(iv) A breach by the Company of any
provision of this Agreement not embraced within the foregoing
clauses (i), (ii) and (iii) of this subparagraph 7.03(b) which is
not remedied within 30 days after receipt by the Company of
written notice from the Executive.
(v) The liquidation, dissolution,
consolidation or merger of the Company or transfer of all or
substantially all of its assets unless a successor or successors
(by merger, consolidation or otherwise) to which all or a
significant portion of its assets have been transferred shall
have assumed all duties and obligations of the Company under this
Agreement.
(vi) The liquidation or transfer of all or
substantially all of the Company's assets in Canada.
An election by the Executive to terminate his employment
given under the provisions of this paragraph 7.03 shall not be
deemed a voluntary termination of employment by the Executive for
the purpose of this Agreement or any plan or practice of the
Company.
7.04 For the purpose of any provision of this
Agreement, the termination of the Executive's employment shall be
deemed to have been for "Cause" only if:
(a) termination of his employment shall have
been the result of an act or acts of dishonesty on the part of
the Executive constituting a felony and resulting or intended to
result directly or indirectly in gain or personal enrichment at
the expense of the Company, or
(b) there has been a breach by the Executive
during the Period of Employment of the provisions of paragraph
3.03 above, relating to the time to be devoted to the affairs of
the Company, or of Section 8, relating to confidential
information, and such breach results in demonstrably material
injury to the Company, and with respect to any alleged breach of
paragraph 3.03 hereof, the Executive shall have either failed to
remedy such alleged breach within thirty days from his receipt of
written notice by the Secretary of the Company pursuant to
resolution duly adopted by the Board of Directors of the Company
after notice to the Executive and an opportunity to be heard
demanding that he remedy such alleged breach, or shall have
failed to take all reasonable steps to that end during such
thirty-day period and thereafter; provided that there shall have
been delivered to the Executive a certified copy of a resolution
of the Board of Directors of the Company adopted by the
affirmative vote of not less than three-fourths of the entire
membership of the Board of Directors called and held for that
purpose and at which the Executive was given an opportunity to be
heard, finding that the Executive was guilty of conduct set forth
in subparagraphs (a) or (b) above, specifying the particulars
thereof in detail.
Anything in this paragraph 7.04 or elsewhere in this
Agreement to the contrary notwithstanding, the employment of the
Executive shall in no event be considered to have been terminated
by the Company for Cause if termination of his employment took
place (a) as the result of bad judgment or negligence on the part
of the Executive, or (b) as the result of an act or omission
without intent of gaining therefrom directly or indirectly a
profit to which the Executive was not legally entitled, or (c)
because of an act or omission believed by the Executive in good
faith to have been in or not opposed to the interest of the
Company, or (d) for any act or omission in respect of which a
determination could properly be made that the Executive met the
applicable standard of conduct prescribed for indemnification or
reimbursement or payment of expenses under the Code of
Regulations of the Company or the laws of the State of Wyoming or
the directors' and officers' liability insurance of the Company,
in each case as in effect at the time of such act or omission, or
(e) as the result of an act or omission which occurred more than
twelve calendar months prior to the Executive's having been given
notice of the termination of his employment for such act or
omission unless the commission of such act or such omission could
not at the time of such commission or omission have been known to
a member of the Board of Directors of the Company (other than the
Executive, if he is then a member of the Board of Directors), in
which case more than twelve calendar months from the date that
the commission of such act or such omission was or could
reasonably have been so known, or (f) as the result of a
continuing course of action which commenced and was or could
reasonably have been known to a member of the Board of Directors
of the Company (other than the Executive) more than twelve
calendar months prior to notice having been given to the
Executive of the termination of his employment.
7.05 In the event that the Executive's employment
shall be terminated by the Company during the Period of
Employment and such termination is alleged to be for Cause, or
the Executive's right to terminate his employment under paragraph
7.03(b) above shall be questioned by the Company or for any other
reason, the Executive shall have the right, in addition to all
other rights and remedies provided by law, at his election either
to seek arbitration in Harris County, Texas under the rules of
the American Arbitration Association by serving a notice to
arbitrate upon the Company or to institute a judicial proceeding,
in either case within ninety days after having received notice of
termination of his employment or notice in any form that the
termination of his employment under paragraph 7.03(b) is subject
to question or that the Company is withholding or proposes to
withhold payments or provision of benefits or within such longer
period as may reasonably be necessary for the Executive to take
action in the event that his illness or incapacity should
preclude his taking such action within such ninety-day period.
8. Confidential Information
8.01 The Executive agrees not to disclose, either
while in the Company's employ or at any time thereafter, to any
person not employed by the Company, or not engaged to render
services to the Company, any confidential information obtained by
him while in the employ of the Company, including, without
limitation, any of the Company's inventions, processes, methods
of distribution or customers or trade secrets; provided, however,
that this provision shall not preclude the Executive from use or
disclosure of information known generally to the public or of
information not considered confidential by persons engaged in the
business conducted by the Company or from disclosure required by
law or Court order.
8.02 The Executive also agrees that upon leaving the
Company's employ he will not take with him, without the prior
written consent of an officer authorized to act in the matter by
the Board of Directors of the Company, any drawing, blueprint,
specification or other document of the Company, its subsidiaries,
affiliates and divisions, which is of a confidential nature
relating to the Company, its subsidiaries, affiliates and
divisions, or without limitation, relating to its or their
methods of distribution, or any description of any formulae or
secret processes.
9. Notices
All notices, requests, demands and other communications
provided for by this Agreement shall be deemed to have been duly
given if and when mailed in the continental United States by
registered or certified mail, return receipt requested, postage
prepaid, or personally delivered or sent by telex or other
telegraphic means to the party entitled thereto at the address
stated below or to such changed address as the addressee may have
given by a similar notice:
To the Company: Wainoco Oil Corporation
1200 Smith Street, Suite 2100
Houston, Texas 77002
Attention: Chairman, Compensation Committee
To the Executive: Robert D. Jones
81 Sunset Way S.E.
Calgary, Alberta T2X 3C1
10. General Provisions
10.01 There shall be no right of set-off or
counterclaim in respect of any claim, debt or obligation, against
any payments to the Executive, his dependents, beneficiaries or
estate provided for in this Agreement.
10.02 The Company and the Executive recognize that
each party will have no adequate remedy at law for breach by the
other of any of the agreements contained herein and, in the event
of any such breach, the Company and the Executive hereby agree
and consent that the other shall be entitled to a decree of
specific performance, mandamus or other appropriate remedy to
enforce performance of such agreements.
10.03 No right or interest to or in any payments shall
be assignable by the Executive; provided, however, that this
provision shall not preclude him from designating one or more
beneficiaries to receive any amount that may be payable after his
death and shall not preclude the legal representative of his
estate from assigning any right hereunder to the person or
persons entitled thereto under his will or, in the case of
intestacy, to the person or persons entitled thereto under the
laws of intestacy applicable to his estate. The term "benefi-
ciaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount or, if no
beneficiary has been so designated, the legal representative of
the Executive's estate.
10.04 No right, benefit or interest hereunder, shall
be subject to anticipation, alienation, sale, assignment,
encumbrance, charge, pledge, hypothecation, or set-off in respect
of any claim, debt or obligation, or to execution, attachment,
levy or similar process, or assignment by operation of law. Any
attempt, voluntary or involuntary, to effect any action specified
in the immediately preceding sentence shall, to the full extent
permitted by law, be null, void and of no effect.
10.05 In the event of the Executive's death or a
judicial determination of his incompetence, reference in this
Agreement to the Executive shall be deemed, where appropriate, to
refer to his legal representative or, where appropriate, to his
beneficiary or beneficiaries.
10.06 The titles to sections in this Agreement are
intended solely for convenience and no provision of this
Agreement is to be construed by reference to the title of any
section.
10.07 No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver
shall be authorized by the Board of Directors of the Company or
any authorized committee of the Board of Directors and shall be
agreed to in writing, signed by the Executive and by an officer
of the Company thereunto duly authorized.
10.08 Except as otherwise specifically provided in
this Agreement, no waiver by either party hereto of any breach by
the other party hereto of any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of a subsequent breach of such condition or provision or a
waiver of a similar or dissimilar provision or condition at the
same or at any prior or subsequent time.
10.09 In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable
for any reason, the remaining provisions and portions of this
Agreement shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law.
10.10 Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, including, without
limitation, any corporation or corporations acquiring directly or
indirectly all or substantially all of the assets of the Company
whether by merger, consolidation, sale or otherwise (and such
successor shall thereafter be deemed "the Company" for the
purposes of this Agreement), but shall not otherwise be
assignable by the Company.
10.11 This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
(other than the choice of law principles thereof).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
WAINOCO OIL CORPORATION
By: /s/ J. R. Gibbs
------------------
ATTEST:
/s/ Julie H. Edwards
- --------------------
Secretary
/s/ Robert D. Jones
- -------------------
Robert D. Jones
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT executed as of the 3rd day of April, 1995, by and
between Wainoco Oil Corporation, a Wyoming corporation (the "Company"), and
George E. Aldrich (the "Executive").
W I T N E S S E T H:
WHEREAS the Executive is a principal officer of the Company and an
integral part of its management;
WHEREAS, the Company wishes to assure both itself and the Executive of
continuity of management in the event of any actual or threatened change in
control of the Company;
WHEREAS, this Agreement is not intended to alter materially the
compensation and benefits that the Executive could reasonably expect in the
absence of a change in control of the Company and, accordingly, this
Agreement will be operative only upon a change in control of the Company,
as that term is hereafter defined.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained and other good, valuable and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, it is hereby agreed by
and between the parties as follows:
1. Operation of Agreement.
1.01 This Agreement shall be binding immediately upon its
execution by the parties hereto, but, anything in this Agreement to the
contrary notwithstanding, neither the Agreement nor any provision thereof
shall be operative unless and until there has been a Change in Control of
the Company as defined in paragraph 1.02 below. Upon the date of such a
Change in Control of the Company (the "Effective Date"), this Agreement and
all provisions thereof shall become operative immediately, without the
necessity of any further action on the part of either party hereto.
1.02 For the purpose of this Agreement, the term "Change in
Control of the Company" shall mean a change in control of a nature that
would be required to be disclosed in a proxy statement, governed by the
rules of the Securities and Exchange Commission as in effect on the date of
this Agreement; provided that, without limitation, such a change in control
shall be deemed to have occurred if and when (a) any "person" (as such term
is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934) is or becomes a beneficial owner, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities, (b) during any period
of 24 consecutive months, commencing before or after the date of this
Agreement, individuals who at the beginning of such 24 month period were
directors of the Company for whom the Executive shall have voted cease for
any reason to constitute at least a majority of the Board of Directors of
the Company, or (c) during any period after the date of this Agreement, any
event of the nature or type described in Section 7.03(b)(v).
1.03 This Agreement shall terminate forthwith, and without
more, in the event that Executive ceases to be an executive officer of the
Company at any time prior to the Effective Date whether by reason of his
death, Disability, discharge, resignation or otherwise; except that either
party wishing to do so terminate such employment, other than by reason of
death, Disability or discharge for Cause, hereby agrees to give the other
party at least 60 days' prior written notice. Notwithstanding the
foregoing, following the commencement of any discussions with any third
party that ultimately result in the occurrence of a Change of Control, the
Company shall not at the instance or upon the suggestion of such third
party terminate the employment or reduce the compensation of Executive.
This Agreement shall terminate three years from the date hereof; provided,
however, that this Agreement shall be continued in full force and effect
for an additional period of three years following such term, unless the
Company elects to terminate this Agreement at the end of such term by at
least 30 days' prior written notice to Executive; and provided, further,
following the commencement of any discussions with any third party that
ultimately result in the occurrence of a Change of Control, the Company
shall not make such election to terminate at the instance or upon the
suggestion of such third party.
1.04 Except as provided in paragraph 1.03 above, nothing
expressed or implied herein shall create any right or duty (on the part of
the Company or Executive) to have Executive remain in the employment of the
Company at any time prior to the Effective Date, each reserving all rights
to terminate the employment relationship at any time (subject to the notice
requirement contained in paragraph 1.03 above) prior to the Effective Date
with or without Cause.
2. Employment; Period of Employment.
2.01 The Company hereby agrees to continue the Executive in its
employ, and the Executive hereby agrees to remain in the employ of the
Company, or subject to the terms of this Agreement, such other corporate
profit center as shall then be the principal successor to the business,
assets and properties of the Company, for the period set forth in paragraph
2.02 below (the "Period of Employment") in the position and with the duties
and responsibilities set forth in Section 3 below, and upon the other terms
and conditions hereinafter stated.
2.02 The Period of Employment, subject only to the provisions
of Section 6 below relating to death or Disability, shall continue for a
period of three years from the Effective Date.
3. Position, Duties, Responsibilities.
3.01 It is contemplated that at all times during the Period of
Employment the Executive shall continue to serve as a principal officer of
the Company with the office and title of Vice President - Controller of the
Company and continue to have duties and responsibilities commensurate with
those duties and responsibilities imposed on the Executive immediately
prior to the Effective Date.
3.02 During the Period of Employment the Executive shall also
serve and continue to serve, if and when elected and reelected, as an
officer or director, or both, of any subsidiary, division or affiliate of
the Company.
3.03 Throughout the Period of Employment the Executive shall
devote his full time and undivided attention during normal business hours
to the business and affairs of the Company, except for reasonable vacations
and except for illness or incapacity, but nothing in this Agreement shall
preclude the Executive from devoting reasonable periods required for
serving as a director or member of a committee of any organization
involving no conflict of interest with the interests of the Company, from
engaging in charitable and community activities, and from managing his
personal investments, provided that such activities do not materially
interfere with the regular performance of his duties and responsibilities
under this Agreement.
3.04 The office of the Executive shall be located at the
principal executive offices of the Company. The Executive shall not be
required to change the current situs of his employment or residence. The
Executive also shall not be required to be absent therefrom on travel
status or otherwise more than a total of 60 working days in any calendar
year nor more than 20 consecutive days at any one time.
4. Compensation, Compensation Plans, Perquisites.
4.01(a) For all services rendered by the Executive in any
capacity during the Period of Employment, including, without limitation,
services as an executive, officer, director or member of any committee of
the Company or of any subsidiary, division or affiliate thereof, the
Executive shall be paid as compensation:
(i) A base salary at no less than the rate in effect
immediately prior to the Effective Date, with increases (if any) as shall
be made from time to time in accordance with the Employer's regular salary
administration practices;
(ii) An annual performance bonus in an amount no less than
the amount of 30% of the base salary determined pursuant to subparagraph
4.01(a)(i).
(b) Any increase in salary pursuant to clause (i) of
subparagraph 4.01(a) or in bonus or other compensation shall in no way
diminish any other obligation of the Company under this Agreement.
4.02 During the Period of Employment the Executive shall be and
continue to be a full participant in the Company's applicable stock option
plans and any other compensation plans in which the Executive participates
immediately prior to the Effective Date, or equivalent successor plans that
may be adopted by the Company, with at least the same reward opportunities
to Executive that have heretofore been provided. Nothing in this Agreement
shall preclude improvement of reward opportunities in such plans or other
plans in accordance with the present practice of the Company.
4.03 During the Period of Employment, the Executive shall be
entitled to perquisites, including, without limitation, an office,
secretarial and clerical staff, and to fringe benefits, including, without
limitation, the payment or reimbursement of club dues, in each case at
least equal to those attached to his office immediately prior to the
Effective Time, as well as to reimbursement, upon proper accounting, of
reasonable expenses and disbursements incurred by him in the course of his
duties.
5. Employee Benefit Plans.
5.01 The compensation, together with other matters provided for
in Section 4 above, is in addition to the benefits provided for in this
Section 5.
5.02 The Executive, his dependents and beneficiaries shall be
entitled to all payments and benefits and service credit, for benefits
during the Period of Employment to which officers of the Company, their
dependents and beneficiaries are entitled as a result of the employment of
such officers under the terms of employee plans and practices of the
Company in effect immediately prior to the Effective Time, including,
without limitation, the Company's retirement program (consisting of the
Wainoco Retirement Savings Plan, the Wainoco Pension Plan, and the Wainoco
Deferred Compensation Plan), the Company's stock purchase and savings,
thrift and investment plans, if any, the Wainoco Oil Corporation Executive
Life Insurance Plan, its group life insurance plan, its accidental death
and dismemberment insurance, its business travel insurance, its long term
disability, medical, dental and health and welfare plans and other present
or successor plans and practices of the Company, its subsidiaries and
divisions, for which officers, their dependents and beneficiaries are
eligible, and to all payments or other benefits under any such plan or
practice after the Period of Employment as a result of participation in
such plan or practice during the Period of Employment.
5.03 Nothing in this Agreement shall preclude the Company from
amending or terminating any employee benefit plan or practice but, it being
the intent of the parties that the Executive shall continue to be entitled
during the period of Employment to perquisites as set forth in paragraph
4.03 above and to benefits and service credit for benefits under paragraph
5.02 above at least equal to those attached to his position immediately
prior to the Effective Date, nothing in this Agreement shall operate as, or
be construed to reduce or authorize reduction without the Executive's
written consent in the level of such perquisites, benefits or service
credit for benefits. In the event of any such reduction by amendment or
termination of any plan or practice or otherwise, the Executive, his
dependents and beneficiaries shall continue to be entitled to perquisites,
benefits and service credit for benefits at least equal to the perquisites
and to benefits and service credit for benefits under such plans or
practices that he or his dependents and beneficiaries would have received
if such reduction had not taken place.
6. Effect of Death or Disability.
6.01 In the event of the death of the Executive during the
Period of Employment, the legal representative of the Executive shall be
entitled to the compensation provided for in paragraph 4.01 during the
balance of the Period of Employment. The Period of Employment shall be
deemed to have ended as of the close of business on the last day of the
twelfth month following the month in which death shall have occurred but
without prejudice to any other payments due in respect of the Executive's
death hereunder or pursuant to any other agreements or arrangements with
the Company.
6.02 The term "Disability," as used in this Agreement, shall
mean an illness or accident which prevents the Executive from performing
his duties under this Agreement for a period of six consecutive months. In
the event of the Disability of the Executive during the Period of
Employment, the Executive shall be entitled to the full compensation
provided for in this Agreement for the period of such Disability (i.e.,
commencing on the date on which the Disability occurred) but not in excess
of six months. The Period of Employment shall be deemed to have ended as
of the close of business on the last day of such six months' period but
without prejudice to any payments due to the Executive in respect of
disability or any short term illness or accident which prevents the
Executive from performing his duties for a period of less than six months.
7. Termination.
7.01 In the event of a Termination, as defined in paragraph
7.03 below, during the Period of Employment, the provisions of this
Section 7 shall apply.
7.02 In the event of a Termination the Company shall, as
liquidated damages or severance pay, or both, pay to the Executive and
provide him, his dependents, beneficiaries and estate, with the following:
(a) The Company shall continue to pay the Executive the
base salary compensation provided in paragraph 4.01(a)(i) above at the rate
in effect at the time of Termination (which in accordance with the terms of
this Agreement shall be no less than the rate of base salary in effect
immediately prior to the Effective Date). Such base salary shall be paid no
less often than monthly beginning at the end of the month in which
Termination occurred and continuing during the remainder of the Period of
Employment.
(b) The Company shall also continue to pay the Executive
the annual performance bonus provided in paragraph 4.01(a)(ii) above. Such
annual performance bonus compensation shall be paid on an annual basis, so
that a payment will be made in each of the three years of the Employment
Period.
(c) During the Employment Period the Executive, his
dependents, beneficiaries and estate, shall continue to be entitled to all
benefits and service credit for benefits under employee benefit plans of
the Company as if still employed during such period under this Agreement
and, if and to the extent that such benefits or service credit for benefits
shall not be payable or provided under any such plans to the Executive, his
dependents, beneficiaries and estate, by reason of his no longer being an
employee of the Company as the result of Termination, the Company shall
itself pay or provide for payment of such benefits and the equivalent of
service credit for benefits to the Executive, his dependents, beneficiaries
and estate.
(d) The entire Period of Employment shall be considered
service with the Company for the purpose (i) of continued credits under the
Company's retirement programs, as each plan or program was in effect
immediately prior to Termination and (ii) of all other benefit plans of the
Company as in effect immediately prior to Termination.
(e) In the event that the Executive shall at the time of
Termination hold an outstanding and unexercised (whether or not exercisable
at the time) option or options theretofore granted by the Company, the
Company shall, in addition to the amounts provided for above, pay to the
Executive in a lump sum an amount equal to the excess above the option
price under each such option of the Fair Market Value at the time of
Termination of the shares subject to each such option. Solely for the
purpose of this subparagraph (e), Fair Market Value at the time of
Termination shall be deemed to mean the higher of (i) the average of the
reported closing prices of the Common Shares of the Company, as reported on
the New York Stock Exchange - Composite Transactions, on the last trading
day prior to the Termination and on the last trading day of each of the two
preceding thirty-day periods, and (ii) in the event that a Change in
Control, as defined in paragraph 1.02 above, prior to Termination shall
have taken place as the result of a tender offer and such Change in Control
was consummated within twelve months of Termination, the price paid for a
majority of the Common Shares of the Company in the course of such tender
offer.
(f) At the Company's option, the Company may pay
Executive the total of all amounts payable to Executive for the balance of
the Term of Employment pursuant to subparagraphs (a) and (b) of this
Section 7.02 in a lump sum payment. Executive may also elect, at any time
during the remaining Term of Employment, to receive all amounts payable to
him for the balance of the Term of Employment pursuant to subparagraphs (a)
and (b) of this Section 7.02 in a lump sum payment by providing written
notice of such election to the Company. The Company agrees to make a lump
sum payment of the total of such amounts within 30 days of Executive's
notice of election to receive lump sum payment. It is acknowledged and
agreed that no lump sum payment will shorten the Term of Employment of
Executive, or modify or obviate any obligations of the Company other than
the payments otherwise due during the Term of Employment pursuant to
subparagraphs (a) and (b) above.
7.03 The word "Termination," for the purpose of this Section 7
and any other provisions of this Agreement, shall mean:
(a) Termination by the Company of the employment of the
Executive by the Company and its subsidiaries for any reason other than for
Cause as defined in paragraph 7.04 below or for Disability as defined in
subparagraph 6.02 above; or
(b) Termination by the Executive of his employment by
the Company and its subsidiaries upon the occurrence of any of the
following events:
(i) Failure to elect or reelect the Executive to,
or removal of the Executive from, the office set forth in paragraph 3.01
above.
(ii) A significant change in the nature or scope of
the authorities, powers, functions or duties of Executive as contemplated
by paragraph 3.01 above, or a reduction in compensation, which is not
remedied within 30 days after receipt by the Company of written notice from
the Executive.
(iii) A determination by the Executive made in good
faith that as a result of a Change in Control of the Company, as defined in
paragraph 1.02 above, and a change in circumstances thereafter and since
the date of this Agreement significantly affecting his position, he is
unable to carry out the authorities, powers, functions or duties attached
to his position and contemplated by Section 3 of this Agreement and the
situation is not remedied within 30 days after receipt by the Company of
written notice from the Executive of such determination.
(iv) A breach by the Company of any provision of
this Agreement not embraced within the foregoing clauses (i), (ii) and
(iii) of this subparagraph 7.03(b) which is not remedied within 30 days
after receipt by the Company of written notice from the Executive.
(v) The liquidation, dissolution, consolidation or
merger of the Company or transfer of all or substantially all of its assets
unless a successor or successors (by merger, consolidation or otherwise) to
which all or a significant portion of its assets have been transferred
shall have assumed all duties and obligations of the Company under this
Agreement.
An election by the Executive to terminate his employment given under
the provisions of this paragraph 7.03 shall not be deemed a voluntary
termination of employment by the Executive for the purpose of this
Agreement or any plan or practice of the Company.
7.04 For the purpose of any provision of this Agreement, the
termination of the Executive's employment shall be deemed to have been for
"Cause" only if:
(a) termination of his employment shall have been the
result of an act or acts of dishonesty on the part of the Executive
constituting a felony and resulting or intended to result directly or
indirectly in gain or personal enrichment at the expense of the Company, or
(b) there has been a breach by the Executive during the
Period of Employment of the provisions of paragraph 3.03 above, relating to
the time to be devoted to the affairs of the Company, or of Section 8,
relating to confidential information, and such breach results in
demonstrably material injury to the Company, and with respect to any
alleged breach of paragraph 3.03 hereof, the Executive shall have either
failed to remedy such alleged breach within thirty days from his receipt of
written notice by the Secretary of the Company pursuant to resolution duly
adopted by the Board of Directors of the Company after notice to the
Executive and an opportunity to be heard demanding that he remedy such
alleged breach, or shall have failed to take all reasonable steps to that
end during such thirty-day period and thereafter; provided that there shall
have been delivered to the Executive a certified copy of a resolution of
the Board of Directors of the Company adopted by the affirmative vote of
not less than three-fourths of the entire membership of the Board of
Directors called and held for that purpose and at which the Executive was
given an opportunity to be heard, finding that the Executive was guilty of
conduct set forth in subparagraphs (a) or (b) above, specifying the
particulars thereof in detail.
Anything in this paragraph 7.04 or elsewhere in this Agreement to the
contrary notwithstanding, the employment of the Executive shall in no event
be considered to have been terminated by the Company for Cause if
termination of his employment took place (a) as the result of bad judgment
or negligence on the part of the Executive, or (b) as the result of an act
or omission without intent of gaining therefrom directly or indirectly a
profit to which the Executive was not legally entitled, or (c) because of
an act or omission believed by the Executive in good faith to have been in
or not opposed to the interest of the Company, or (d) for any act or
omission in respect of which a determination could properly be made that
the Executive met the applicable standard of conduct prescribed for
indemnification or reimbursement or payment of expenses under the Code of
Regulations of the Company or the laws of the State of Wyoming or the
directors' and officers' liability insurance of the Company, in each case
as in effect at the time of such act or omission, or (e) as the result of
an act or omission which occurred more than twelve calendar months prior to
the Executive's having been given notice of the termination of his
employment for such act or omission unless the commission of such act or
such omission could not at the time of such commission or omission have
been known to a member of the Board of Directors of the Company (other than
the Executive, if he is then a member of the Board of Directors), in which
case more than twelve calendar months from the date that the commission of
such act or such omission was or could reasonably have been so known, or
(f) as the result of a continuing course of action which commenced and was
or could reasonably have been known to a member of the Board of Directors
of the Company (other than the Executive) more than twelve calendar months
prior to notice having been given to the Executive of the termination of
his employment.
7.05 In the event that the Executive's employment shall be
terminated by the Company during the Period of Employment and such
termination is alleged to be for Cause, or the Executive's right to
terminate his employment under paragraph 7.03(b) above shall be questioned
by the Company or for any other reason, the Executive shall have the right,
in addition to all other rights and remedies provided by law, at his
election either to seek arbitration in Harris County, Texas under the rules
of the American Arbitration Association by serving a notice to arbitrate
upon the Company or to institute a judicial proceeding, in either case
within ninety days after having received notice of termination of his
employment or notice in any form that the termination of his employment
under paragraph 7.03(b) is subject to question or that the Company is
withholding or proposes to withhold payments or provision of benefits or
within such longer period as may reasonably be necessary for the Executive
to take action in the event that his illness or incapacity should preclude
his taking such action within such ninety-day period.
8. Confidential Information
8.01 The Executive agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not employed by
the Company, or not engaged to render services to the Company, any
confidential information obtained by him while in the employ of the
Company, including, without limitation, any of the Company's inventions,
processes, methods of distribution or customers or trade secrets; provided,
however, that this provision shall not preclude the Executive from use or
disclosure of information known generally to the public or of information
not considered confidential by persons engaged in the business conducted by
the Company or from disclosure required by law or Court order.
8.02 The Executive also agrees that upon leaving the Company's
employ he will not take with him, without the prior written consent of an
officer authorized to act in the matter by the Board of Directors of the
Company, any drawing, blueprint, specification or other document of the
Company, its subsidiaries, affiliates and divisions, which is of a
confidential nature relating to the Company, its subsidiaries, affiliates
and divisions, or without limitation, relating to its or their methods of
distribution, or any description of any formulae or secret processes.
9. Notices
All notices, requests, demands and other communications provided
for by this Agreement shall be deemed to have been duly given if and when
mailed in the continental United States by registered or certified mail,
return receipt requested, postage prepaid, or personally delivered or sent
by telex or other telegraphic means to the party entitled thereto at the
address stated below or to such changed address as the addressee may have
given by a similar notice:
To the Company: Wainoco Oil Corporation
1200 Smith Street, Suite 2100
Houston, Texas 77002
Attention: Chairman, Compensation Committee
To the Executive: George E. Aldrich
------------------------------
------------------------------
10. General Provisions
10.01 There shall be no right of set-off or counterclaim in
respect of any claim, debt or obligation, against any payments to the
Executive, his dependents, beneficiaries or estate provided for in this
Agreement.
10.02 The Company and the Executive recognize that each party
will have no adequate remedy at law for breach by the other of any of the
agreements contained herein and, in the event of any such breach, the
Company and the Executive hereby agree and consent that the other shall be
entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of such agreements.
10.03 No right or interest to or in any payments shall be
assignable by the Executive; provided, however, that this provision shall
not preclude him from designating one or more beneficiaries to receive any
amount that may be payable after his death and shall not preclude the legal
representative of his estate from assigning any right hereunder to the
person or persons entitled thereto under his will or, in the case of
intestacy, to the person or persons entitled thereto under the laws of
intestacy applicable to his estate. The term "beneficiaries" as used in
this Agreement shall mean a beneficiary or beneficiaries so designated to
receive any such amount or, if no beneficiary has been so designated, the
legal representative of the Executive's estate.
10.04 No right, benefit or interest hereunder, shall be subject
to anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation, or set-off in respect of any claim, debt or obligation, or
to execution, attachment, levy or similar process, or assignment by
operation of law. Any attempt, voluntary or involuntary, to effect any
action specified in the immediately preceding sentence shall, to the full
extent permitted by law, be null, void and of no effect.
10.05 In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the
Executive shall be deemed, where appropriate, to refer to his legal
representative or, where appropriate, to his beneficiary or beneficiaries.
10.06 The titles to sections in this Agreement are intended
solely for convenience and no provision of this Agreement is to be con-
strued by reference to the title of any section.
10.07 No provision of this Agreement may be amended, modified
or waived unless such amendment, modification or waiver shall be authorized
by the Board of Directors of the Company or any authorized committee of the
Board of Directors and shall be agreed to in writing, signed by the
Executive and by an officer of the Company thereunto duly authorized.
10.08 Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the other
party hereto of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of a subsequent
breach of such condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any prior or subsequent
time.
10.09 In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions and portions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
10.10 Except as otherwise provided herein, this Agreement shall
be binding upon and inure to the benefit of the Company and any successor
of the Company, including, without limitation, any corporation or
corporations acquiring directly or indirectly all or substantially all of
the assets of the Company whether by merger, consolidation, sale or
otherwise (and such successor shall thereafter be deemed "the Company" for
the purposes of this Agreement), but shall not otherwise be assignable by
the Company.
10.11 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (other than the choice of
law principles thereof).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WAINOCO OIL CORPORATION
By: /s/ J. R. Gibbs
-----------
ATTEST:
/s/ Julie H. Edwards
- --------------------
Secretary
/s/ George E. Aldrich
- ---------------------
George E. Aldrich
WAINOCO OIL CORPORATION
1995 STOCK GRANT PLAN FOR NON-EMPLOYEE DIRECTORS
1. Purposes.
The 1995 Stock Grant Plan for Non-Employee Directors (the
"Plan") is established to attract, retain and compensate highly
qualified individuals who are not employees of Wainoco Oil
Corporation (the "Company") for service as members of the Board
of Directors ("Non-Employee Directors") and to provide them with
an ownership interest in the Company's common stock. The Plan
will be beneficial to the Company and its stockholders by
allowing these Non-Employee Directors to have a personal
financial stake in the Company through an ownership interest in
the Company's common stock, in addition to underscoring their
common interest with stockholders in increasing the value of the
Company's stock over the long term.
2. Effective Date.
The Plan shall be effective as of the date it is adopted by
the Board of Directors of the Company.
3. Administration of the Plan.
The Plan shall be administered by a committee consisting of
the Directors who are not eligible to participate in the Plan
(the "Committee"). Subject to the provisions of the Plan, the
Committee shall be authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating
to the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan; provided, however,
that the Committee shall have no discretion with respect to the
eligibility or selection of Non-Employee Directors to receive
stock grants under the Plan, the number of shares of stock
subject to the Plan; and provided further, that the Committee
shall not have the authority to take any action or make any
determination that would materially increase the benefits
accruing to participants under the Plan. The Committee's
interpretation of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers
vested in it hereunder, shall be conclusive and binding upon all
parties concerned including the Company, its stockholders and
persons granted options under the Plan. The Chief Executive
Officer of the Company shall be authorized to implement the Plan
in accordance with its terms and to take or cause to be taken
such actions of a ministerial nature as shall be necessary to
effectuate the intent and purposes thereof.
4. Participation in the Plan.
All active members of the Company's Board of Directors who
are not as of the date of any stock grant employees of the
Company or any of its subsidiaries or affiliates shall be
eligible to participate in the Plan. Directors emeritus shall
not be eligible to participate.
5. Stock Grant Dates.
Five hundred shares of Stock (as adjusted pursuant to
Section 8) shall be automatically granted to each eligible Non-
Employee Director on the first day of every 15th month (or the
first succeeding business day thereafter on which the Company's
common stock is traded on the principal securities exchange on
which it is listed) commencing April 1, 1995.
6. Shares of Stock Subject to the Plan.
The shares that may be granted under the Plan shall not
exceed an aggregate of 60,000 shares of Company common stock (as
adjusted pursuant to Section 8).
7. Dilution and Other Adjustment.
In the event of any change in the outstanding shares of
Company stock by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, combination or exchange
of shares or other similar corporate change, such equitable
adjustments shall be made in the Plan and the grants thereunder,
as the Committee determines are necessary or appropriate,
including, if necessary, any adjustments in the maximum number of
shares referred to in Section 7 of the Plan. Such adjustment
shall be conclusive and binding for all purposes of the Plan.
8. Miscellaneous Provisions.
(a) Rights as Stockholder. A participant under the Plan
shall have no rights as a holder of Company common stock unless
and until certificates for shares of such stock are issued to the
participant.
(b) Compliance with Legal Regulations. During the term of
the Plan, the Company shall at all times reserve and keep
available such number of shares as may be issuable under the
Plan, and shall seek to obtain from any regulatory body having
jurisdiction, any requisite authority required in the opinion of
counsel for the Company in order to grant shares of Company
common stock. If in the opinion of counsel for the Company the
transfer, issue or sale of any shares of its stock under the Plan
shall not be lawful for any reason, including the inability of
the Company to obtain from an regulatory body have jurisdiction
authority deemed by such counsel to be necessary to such
transfer, issuance or sale, the Company shall not be obligated to
transfer, issue or sell any such shares. In any event, the
Company shall not obligated to transfer, issue or sell any shares
to any participant unless a registration statement which complies
with the provisions of the Securities Act of 1933, as amended
(the "Securities Act"), is in effect at the time with respect to
such shares or other appropriate action has been taken under and
pursuant to the terms and provisions of the Securities Act, or
the Company receives evidence satisfactory to the Committee that
the transfer, issuance or sale of such shares, in the absence of
an effective registration statement or other appropriate action,
would not constitute a violation of the terms and provisions of
the Securities Act. The Company's obligation to issue shares
granted under the Plan shall in any case be subject to the
Company being satisfied that the shares purchased are being
purchased for investment and not with a view to the distribution
thereof, if at the time of such exercise a resale of such shares
would otherwise violate the Securities Act in the absence of an
effective registration statement relating to such shares.
(c) Costs and Expenses. The costs and expenses of
administering the Plan shall be borne by the Company and not
charged to any option or to any Non-Employee Director receiving
an option.
9. Amendment and Termination of the Plan.
(a) Amendments. The Committee may from time to time amend
the Plan in whole or in part; provided, that no such action shall
adversely affect any rights or obligations with respect to any
shares of stock theretofore granted under the Plan, and provided
further, that the provisions of Sections 4 and 6 hereof may not
be amended more than once every six months, other than to comport
with change in the Internal Revenue Code or regulations
thereunder.
(b) Termination. The Committee may terminate the Plan at
any time. The Plan shall in any event terminate on, and no stock
shall be granted after December 31, 2004.
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,411
<SECURITIES> 0
<RECEIVABLES> 21,227
<ALLOWANCES> 0
<INVENTORY> 24,270
<CURRENT-ASSETS> 49,770
<PP&E> 355,367
<DEPRECIATION> 150,470
<TOTAL-ASSETS> 260,254
<CURRENT-LIABILITIES> 46,177
<BONDS> 155,831
<COMMON> 57,172
0
0
<OTHER-SE> (14,660)
<TOTAL-LIABILITY-AND-EQUITY> 260,254
<SALES> 171,240
<TOTAL-REVENUES> 177,714
<CGS> 170,326
<TOTAL-COSTS> 170,326
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,071
<INCOME-PRETAX> (8,469)
<INCOME-TAX> 68
<INCOME-CONTINUING> (8,537)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,537)
<EPS-PRIMARY> (0.31)
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