<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
Commission file number 1-13018
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PETRO STOPPING CENTERS, L.P.
(Exact name of the registrant as specified in its charter)
DELAWARE 74-2628339
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6080 SURETY DR.
El Paso, Texas 79905
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (915) 779-4711
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__
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PETRO STOPPING CENTERS, L.P.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1998 1999
--------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,183 $ 11,762
Trade accounts receivable, net 10,631 11,900
Inventories, net 16,459 18,176
Other current assets 2,892 2,324
Due from affiliates 1,163 1,204
-------- --------
Total current assets 44,328 45,366
Property and equipment, net 162,274 161,992
Deferred debt issuance costs, net 11,229 10,841
Other assets 9,168 10,195
-------- --------
Total assets $226,999 $228,394
======== ========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current liabilities:
Current portion of long-term debt $ 4,967 $ 5,225
Trade accounts payable 4,214 7,564
Accrued expenses and other liabilities 21,439 15,409
Due to affiliates 16,768 21,307
-------- --------
Total current liabilities 47,388 49,505
Long-term debt, excluding current portion 176,361 174,864
-------- --------
Total liabilities 223,749 224,369
-------- --------
Commitments and contingencies
Mandatorily redeemable preferred partnership interests 23,172 23,686
Partners' capital (deficit):
General partners (915) (910)
Limited partners (19,007) (18,751)
-------- --------
Total partners' capital (deficit) (19,922) (19,661)
-------- --------
Total liabilities and partners' capital (deficit) $226,999 $228,394
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
1
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PETRO STOPPING CENTERS, L.P.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1999
------------------ ------------------
<S> <C> <C>
Net revenues (including motor fuel taxes):
Fuel $ 119,032 $ 106,881
Non-fuel 30,933 33,556
Restaurant 12,967 13,136
---------------- ----------------
Total net revenues 162,932 153,573
---------------- ----------------
Costs and expenses:
Cost of sales (including motor fuel taxes) 126,771 116,341
Operating expenses 22,610 23,405
General and administrative 4,626 4,823
Depreciation and amortization 3,706 3,267
---------------- ----------------
Total costs and expenses 157,713 147,836
---------------- ----------------
Operating income 5,219 5,737
Interest expense, net 5,017 4,962
---------------- ----------------
Net income $ 202 $ 775
================ ================
</TABLE>
See accompanying notes to unaudited consolidated financial statements
2
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PETRO STOPPING CENTERS, L.P.
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
For the Three Months Ended March 31, 1999
(in thousands)
<TABLE>
<CAPTION>
Total
Partners'
General Limited Capital
Partners Partners (Deficit)
---------------------- ------------------- --------------------
<S> <C> <C> <C>
Balances, December 31, 1998 $ (915) $ (19,007) $ (19,922)
Accrual of preferred return on mandatorily (11) (503)
redeemable preferred partnership interests (514)
Net income 16 759 775
--------------------- ------------------ -------------------
Balances, March 31, 1999 $ (910) $ (18,751) $ (19,661)
===================== ================== ===================
</TABLE>
See accompanying notes to unaudited consolidated financial statements
3
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PETRO STOPPING CENTERS, L.P.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1999
----------- -----------
<S> <C> <C>
Cash flows provided by operating activities:
Net income $ 202 $ 775
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 3,706 3,267
Deferred debt issuance cost amortization 396 418
Bad debt expense 55 61
Increase (decrease) from changes in:
Trade accounts receivable (1,368) (1,330)
Inventories 272 (1,717)
Other current assets 264 568
Due from affiliates 170 (41)
Due to affiliates 70 4,539
Trade accounts payable (1,667) 3,350
Accrued expenses and other liabilities (8,336) (6,030)
-------- --------
Net cash provided by (used in) operating activities (6,236) 3,860
-------- --------
Cash flows used in investing activities:
Purchases of property and equipment, net (3,303) (2,958)
Increase in other assets, net (812) (1,084)
-------- --------
Net cash used in investing activities (4,115) (4,042)
-------- --------
Cash flows provided by (used in) financing activities:
Repayments of long-term debt and capital lease (750) (1,239)
-------- --------
Net cash used in financing activities (750) (1,239)
-------- --------
Net decrease in cash and cash equivalents (11,101) (1,421)
Cash and cash equivalents, beginning of period 24,796 13,183
-------- --------
Cash and cash equivalents, end of period $ 13,695 $ 11,762
======== ========
- ---------------------------------------------------------------------------------------------------------------------------------
Supplemental cash flow information -
Interest paid during the period $ 7,962 $ 7,932
Non-cash financing activities:
Preferred return on mandatorily redeemable
preferred partnership interests 503 514
</TABLE>
See accompanying notes to unaudited consolidated financial statements
4
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PETRO STOPPING CENTERS, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1) Basis of Presentation
The accompanying unaudited consolidated financial statements, which
include the accounts of Petro Stopping Centers, L.P. and its subsidiaries (the
"Company"), have been prepared in accordance with the instructions to Form 10-Q
and, therefore, certain financial information has been condensed and certain
footnote disclosures have been omitted. Such information and disclosures are
normally included in the financial statements prepared in accordance with
generally accepted accounting principles.
These condensed financial statements should be read in conjunction
with the financial statements and notes thereto in the Annual Report of the
Company on Form 10-K for the year ended December 31, 1998 ("1998 Form 10-K").
Capitalized terms used in this report and not defined herein have the meanings
ascribed to such terms in the 1998 Form 10-K. In the opinion of management of
the Company, the accompanying financial statements contain all adjustments
necessary to present fairly the financial position of the Company at December
31, 1998 and March 31, 1999, the results of operations for the three months
ended March 31, 1998 and 1999 and cash flows for the three months ended March
31, 1998 and 1999. The results of operations for the three months ended March
31, 1999 are not necessarily indicative of the results to be expected for the
full calendar year.
2) Segments
The Company operates large, multi-service truck stops in the United
States. The Company's facilities, which are known as Petro Stopping Centers,
offer a broad range of products, services and amenities, including diesel fuel,
gasoline, home-style restaurants, truck preventive maintenance centers and
retail merchandise stores to the highway motorist. The Company has two
reportable operating segments, its corporate truck stops and its franchise
operations. The Company has aggregated its corporate truck stop operations into
one reportable operating segment based on the distribution of products and
services under one common site facility, classified as a multi-service truck
stop.
In addition to corporate truck stop operations, the Company is a
franchisor to 22 Petro Stopping Center locations as of April 1999. The Company
collects royalties and fees in exchange for the use of its name and for certain
services provided to the franchisees. During the three months ended March 31,
1998 and 1999, the revenues generated from the Company's franchise operations
were $961,000, and $1,046,000, respectively. These revenues are included in non-
fuel revenues reported on the accompanying consolidated statements of
operations. The Company does not allocate any expenses or assets in measuring
this segment's profit and loss.
5
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information contained in this Item 2 updates, and should be read in
conjunction with, the information set forth in Part II, Item 7 of the Company's
1998 Form 10-K.
Certain sections of this Form 10-Q, including "Management's Discussion
and Analysis of Financial Condition and Results of Operations," contain various
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 which represent the Company's expectations or beliefs
concerning future events that involve risks and uncertainties. All statements
other than statements of historical facts included in this Form 10-Q may be
considered forward-looking statements. The Company cautions that these
statements are further qualified by important factors that could cause actual
results to differ materially from those in the forward-looking statements. Such
factors include without limitation, general economic change, legislative
regulation and market change.
The forward-looking statements are included in, without limitation, "--
Operations", "--Liquidity and Capital Resources", "--Year 2000" and "--
Environmental". The Company, in the preparation of its financial statements,
also makes various estimates and assumptions that are forward-looking
statements.
Recapitalization
On January 30, 1997, the Company consummated a transaction entered into
in October 1996, under which Chartwell and Mobil Long Haul invested $20,700,000
and $15,000,000, respectively, to directly acquire the partnership interests of
the Company owned by the Fremont Partners for approximately $25,600,000 and
invest approximately $10,100,000 in the Company. The Cardwell Group maintained
its capital investment in the Company. Kirschner Investments, a Company
franchisee, invested $1,000,000 in the Company. Following the Equity Investment
and the Kirschner Investment, the common partnership interests of the Company
are owned by Chartwell (approximately 50.6%), the Cardwell Group (approximately
39.7%), Mobil Long Haul (approximately 7.3%), and Kirschner (approximately
2.4%), and the preferred partnership interests are owned by Mobil Long Haul
($12,000,000) and the Cardwell Group ($7,600,000). Chartwell and the Cardwell
Group own both general and limited partnership interests and Mobil Long Haul and
Kirschner own only limited partnership interests. Mobil Oil Company and the
Company also entered into certain supply and marketing agreements.
As part of the Recapitalization, the Company issued $135,000,000 of 10
1/2% Senior Notes ("New Notes") due 2007, and repurchased approximately 94% of
its 12 1/2% Senior Notes due 2002 and approximately 100% of the outstanding Debt
Warrants. In connection with the issuance of the New Notes, the Company
capitalized approximately $14,500,000 of debt issuance costs and wrote off, as
an extraordinary item, $12,745,000 of debt restructuring costs associated with
the retired debt.
The Company also amended its senior collateralized credit facility (the
"Old Credit Agreement" and, as amended, the "New Credit Agreement") at the time
of Recapitalization. The New Credit Agreement consists of a $25,000,000
revolving credit facility, a $14,000,000 Term Loan A, a $30,000,000 Term Loan B
and a $40,000,000 Expansion Facility.
Business Developments
In March 1999, the Company, certain of its Partners and Volvo Trucks
North America, Inc. ("Volvo") entered into letters of intent wherein Volvo
agreed in principle to acquire an interest in the Company. As part of the
transactions, it is contemplated that Chartwell, the Company's majority partner,
interest in Petro will be repurchased. Closing of the transactions are subject
to, among other matters, negotiation of definitive agreements, obtaining
additional financing, obtaining a new bank facility, obtaining amendments to the
New Notes Indenture (and a to be determined minimum percentage of the New Notes
holders waiving the change of control provisions of the indenture), and receipt
of regulatory approvals. Closing of the transactions are anticipated in June
1999, however, there can be no assurance that the transaction will occur by such
date or at all.
6
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Operations
The following table sets forth the development of the Company's Stopping
Center network since 1995.
<TABLE>
<CAPTION>
As of March 31,
----------------
1995 1996 1997 1998 1999
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Company-operated Stopping Centers......... 25 26 26 28 28
Franchised................................ 14 15 16 20 21
Independently operated.................... 1 - - - -
---- ---- ---- ---- ----
Total Stopping Centers.................. 40 41 42 48 49
==== ==== ==== ==== ====
</TABLE>
The following table sets forth information on Stopping Centers opened since
March 31, 1995, all but two of which are full-sized facilities.
Location Date Opened
-------- -----------
Company-operated Stopping Centers:
Ocala, Florida June 1995
North Baltimore, Ohio August 1997
North Little Rock, Arkansas September 1997
Franchised:
York, Nebraska December 1996
Scranton, Pennsylvania May 1997
Claysville, Pennsylvania November 1997
Breezewood, Pennsylvania February 1998
Milton, Pennsylvania March 1998
Monee, Illinois April 1998
In addition to the two full-sized facilities opened in 1997, the Company
opened Petro:Lubes at its Beaumont and Medford locations in January 1995 and
April 1996, respectively. In August and November of 1998, the Company purchased
land in Mebane, North Carolina and Glendale, Kentucky, respectively, for the
future construction of two new Stopping Centers. At March 31, 1999, the Company
had sites in various stages of development with no new Stopping Centers under
construction, with the exception of the facility being built in Southern
California pursuant to the Company's operating agreement with Tejon Development
Corporation ("Tejon").
In April 1999, the Company opened a franchise location at Lowell, Indiana
and the Company believes it will add additional franchise locations during 1999.
All franchises are operated under franchise agreements which, with the
exception of one, are for an initial ten-year term and are automatically renewed
for two consecutive five-year terms subject to the satisfaction of certain
conditions, unless the franchisee gives a termination notice at least 12 months
prior to the expiration of its franchise agreement with the Company. One
franchise agreement has been amended so that its initial term is approximately
15 years (expiring on December 2001), and such agreement provides for only one
five-year renewal thereof. The Company is currently in the process of
negotiating renewal franchise agreements for all of its franchises.
The Company operates large, multi-service truck stops in the United States.
The Company's facilities, which are known as Petro Stopping Centers, offer a
broad range of products, services and amenities, including diesel fuel,
gasoline, home-style restaurants, truck preventive maintenance centers and
retail merchandise stores to the highway motorist. The Company has two
reportable operating segments, its corporate truck stops and its franchise
operations. The Company has aggregated its corporate truck stop operations into
one reportable operating segment based on the distribution of products and
services under one common site facility, classified as a multi-service truck
stop.
In addition to corporate truck stop operations, the Company is a franchisor
to 22 Petro Stopping Center locations as of April 1999. The Company collects
royalties and fees in exchange for the use of its name and for certain services
provided to the franchisees. During the three months ended March 31, 1998 and
1999, the revenues generated from the Company's franchise operations were
$961,000, and $1,178,000, respectively. These revenues are included in non-fuel
revenues reported on the accompanying consolidated statements of operations.
The Company does not allocate any expenses or assets in measuring this segment's
profit and loss.
7
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The Company derives its revenues from (i) the sale of fuels, diesel and
gasoline; (ii) non-fuel items including the sale of merchandise and offering of
services including truck tire sales and preventative maintenance, weighing
scales, showers, laundry, video games and other operations, and (iii) restaurant
operations which include Iron Skillet and certain fast-food operations. The
presentation allows management to focus more closely on the major sources of
revenues of the business. The other operations included in non-fuel revenue
include franchise royalties and rental revenue from video poker operations in
Louisiana.
The Company's fuel revenues and cost of sales include significant amounts
of federal and state motor fuel taxes. Such taxes were $51,773,000 and
$51,792,000 for the three-month periods ended March 31, 1998 and 1999,
respectively.
Taxes. No provision for income taxes is reflected in the accompanying
financial statements as the Company is a partnership for which taxable income
and tax deductions are passed through to the individual partners.
Results of Operations
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998
Overview. The Company's net revenues of $153,573,000 fell below the net
revenues in the prior year quarter by 5.7% or $9,359,000. The decrease of 10.2%
in fuel revenues versus the prior year is a result of a 10.5% decline in the
average retail-selling price per gallon. The decrease in fuel revenues was
partially offset by an 8.5% and 1.3% increase in non-fuel and restaurant sales,
respectively, over the prior year. Operating expenses increased 3.5% from the
prior year due mainly to employee related costs. General and administrative
expenses increased 4.3% to approximately $4,823,000 compared to $4,626,000 in
the prior year. This increase was due principally to employee related costs
from the Company's expanding operations during the current year. Even though
net revenues fell below prior year, the Company's operating income increased
9.9% from the prior year, as a result of the diversified income stream.
Fuel. Revenues decreased 10.2% overall to $106,881,000 compared to
$119,032,000 in 1998. Fuel revenues decreased primarily due to reductions in
pump prices stemming from lower fuel costs compared to 1998. Gross margin on
fuel was $9,258,000 for the three months ended March 31, 1999, compared to
$9,926,000 for the prior year period. On a per gallon basis, margins declined
approximately 6.9% compared to the prior year.
Non-Fuel. Revenues increased 8.5% overall to $33,556,000 from $30,933,000
in the prior year quarter. The increase in non-fuel revenues is primarily due to
increased oil, tire and repair part sales and sales at the Company's retail
stores. Gross margins increased 9.9% to $18,534,000 in 1999 from $16,870,000 in
1998. Management believes the improved margins reflect continued focus on
improving the profitability in those areas.
Restaurant. Revenues increased 1.3% overall to $13,136,000, compared to
$12,967,000 in 1998. Management believes revenues were enhanced by changes in
the core menu including featured meal specials. Gross margins in the
restaurants increased $74,000 over the prior year quarter.
Costs and Expenses. Total costs and expenses were 6.3% below the prior
year quarter primarily due to the reduction in cost of sales. Cost of sales
decreased 8.2% or $10,430,000 compared to prior year mainly due to the reduced
fuel costs experienced during the current year. Operating expenses increased
$795,000, or 3.5%, to $23,405,000. The increase is mainly due to employee
related expenses. General and administrative expenses increased 4.3% or
$197,000 principally due to employee related expenses from the Company's
expanding operations.
Interest Expense, net. Interest expense decreased $55,000 to $4,962,000
during the first quarter of 1999 due primarily to lower debt levels as a result
of principal payments and a .25% per annum decrease in interest rates on Term
Loans A and B beginning March 31, 1998.
8
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Liquidity and Capital Resources
Capital expenditures through the first three months totaled $3,303,000 for
1998 and $2,958,000 for 1999. Included in capital expenditures for both 1998 and
1999 were funds spent on new and existing facilities, in addition to information
systems projects.
The Company had negative working capital of $3,060,000 at December 31, 1998
and $4,139,000 at March 31, 1999. Negative working capital is normal in the
truckstop industry. Diesel fuel inventory turns every two to three days, which
is significantly faster than payment is required. A substantial majority of the
Company's sales are cash (or the equivalent in the case of credit card sales or
sales paid for by check on a daily basis by third-party billing companies).
During the quarter ended March 31, 1999, the Company made principal
payments on its Term Loans A and B of $1,000,000 and $125,000, respectively.
In accordance with the New Credit Agreement, the interest rate the Company
is required to pay on its Term Loans A and B was reduced .25% per annum,
effective March 31, 1998, due to the Company's improved leverage ratio.
At March 31, 1999, the Company had standby letters of credit issued for
approximately $2,413,000, resulting in availability of approximately $22,587,000
on the Revolving Credit Facility. As of March 31, 1999, there were no
borrowings on the Revolving Credit Facility or the Expansion Facility.
Accrual of dividends on mandatorily redeemable preferred partnership
interests amounted to $514,000 for the three months ended March 31, 1999. The
dividends are only payable in cash if permitted by the Company's then existing
debt instruments. The New Notes and the New Credit Agreement restrict payment
of dividends on mandatorily redeemable preferred partnership interests.
The Company, within certain limits, pays its own workers' compensation and
general liability claims. During the first quarter of 1999, the Company paid
claims aggregating $508,000 and $864,000 relating to workers' compensation and
general liability, respectively. The Company believes it provides an accrual
adequate to cover both reported and incurred but not reported claims.
The Company's Board of Directors has approved the construction of five new
Stopping Centers to occur between the second quarter of 1999 and the end of the
year 2000. The Company currently expects to invest approximately $70,000,000
and $90,000,000 during the years ended 1999 and 2000, respectively, on capital
expenditures. These amounts include regular maintenance and new site
expenditures.
Management of the Company believes that internally generated funds,
together with amounts available under the Revolving Credit Facility, will be
sufficient to satisfy its cash requirements for operations through 1999 and the
foreseeable future thereafter. The Company also expects that current and future
expansion and acquisitions will be financed from funds generated from
operations, borrowings under the Revolving Credit Facility and the Expansion
Facility and additional financings.
Impact of the Year 2000 Issue
The Company is aware of the complexity and the significance of the "Year
2000" issue. The Year 2000 issue is a result of computer programs being written
using two digits, rather than four, to define the applicable year. Any of the
Company's systems that utilize date-sensitive software may recognize a date
using "00" as the year 1900 rather than as the year 2000. This could result in a
system failure or miscalculations causing disruptions of operations, including,
among other things, a temporary inability to process transactions, send
invoices, or engage in similar normal business activities.
The Company's sales, accounts receivable, inventory management, accounts
payable, general ledger, payroll and Electronic Data Interchange systems
comprise its critical information technology ("IT") systems. The Company
9
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has assessed its Year 2000 readiness with regard to critical IT systems and is
currently replacing, upgrading and testing its computer systems and
applications. The Company continues to evaluate surveys with software vendors,
hardware vendors, banks, utilities, fuel suppliers, merchandise suppliers,
customers, partners, franchisees, service contract suppliers, and insurance
companies with which it does significant business to determine the extent to
which the Company is vulnerable to those third parties' failure to remedy their
own Year 2000 issues. The Company has received responses from 60% of suppliers,
partners, franchisees and vendors surveyed of which approximately 98% have
indicated that they will be compliant by the end of 1999. The Company has
received responses from 57% of its major customers of which approximately 98%
have indicated that they will be compliant by the end of 1999. The Company has
assumed non-responsive third parties will be non-compliant for the purpose of
risk assessment. The Company has received communications from its key financial
and insurance service providers indicating they are actively working to resolve
their Year 2000 service issues. The Company does not believe there has been or
will be a significant disruption of the Company's business due to its Year 2000
remediation efforts. The Company is 70% complete regarding readiness testing to
bring all of its critical IT systems into Year 2000 readiness by October 1999.
Telecommunication and office automation systems that facilitate operations
of the Company's locations and corporate headquarters, comprise the Company's
primary non-IT systems. The Company has assessed 100% of the Year 2000
readiness of its non-IT systems and has begun compliance testing to bring them
into readiness by October 1999.
The Company is using a mixture of internal and external resources to
address Year 2000 issues. The total costs of achieving Year 2000 readiness is
estimated to be approximately $9,000,000, which includes the costs of software
upgrades and replacements the Company is currently making. The Company has
incurred $5,055,000 in costs attributable to projects that address the Year 2000
issue through the first quarter of 1999 and expects to incur $3,945,000 in such
costs in the remainder of fiscal year 1999.
Although the Company has day-to-day operational contingency plans,
management is in the process of updating these plans for possible Year 2000
specific operational requirements. To facilitate the completion of these plans,
the Company has formed a committee to handle business interruption scenarios
with respect to the Year 2000 issue. The Company intends to complete its
determination of business interruption scenarios after it has received and
analyzed responses to substantially all of its inquiries made of third parties.
The Company is in the process of establishing contingency plans for situations
relating to the Year 2000 issues that may arise in its dealings with key third
parties and the Company's IT and non-IT systems. The anticipated completion of
such contingency plans is by October 1999. There can be no assurance that
either the Company or its trading partners will not experience Year 2000
readiness difficulties which could have a material adverse effect on the
Company's business, results of operations and financial condition. The costs
and expenses associated with such failure are not presently estimatable.
ENVIRONMENTAL
Accruals for environmental matters are recorded in operating expenses when
it is probable that a liability has been incurred and the amount of the
liability can be reasonably estimated. The measurement of environmental
liabilities is based on an evaluation of currently available facts with respect
to each individual site and considers factors such as existing technology,
presently enacted laws and regulations and prior experience in remediation of
contaminated sites. Accrued liabilities are exclusive of claims against third
parties and are not discounted.
The Company is subject to contingencies pursuant to environmental laws and
regulations that in the future may require the Company to take action to correct
the effects on the environment of prior disposal practices or releases of
chemical or petroleum substances by the Company or other parties. The Company
has accrued for certain environmental remediation activities consistent with the
policy set forth in the notes to the consolidated financial statements of the
Company's 1998 Form 10-K. At March 31, 1999, such accrual amounted to
approximately $250,000 and, in management's opinion, is appropriate based on
existing facts and circumstances. Under the most adverse circumstances,
however, this potential liability could be significantly higher. In the event
that future remediation expenditures are in excess of amounts accrued,
management does not anticipate that they will have a material adverse effect on
the consolidated financial position or results of operations of the Company.
At March 31, 1999, the Company has recognized approximately $162,000 in the
consolidated balance sheet related to recoveries of certain remediation costs
from third parties.
10
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in various litigation incidental to the business
for which estimates of losses have been accrued, when appropriate. In the
opinion of management, such proceedings will not have a material adverse effect
on the Company's financial position or results of operations.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.57 - Employment Agreement, dated February 10, 1999, by and
between James A. Cardwell, Sr. and the Company.
Exhibit 10.58 - Employment Agreement, dated February 10, 1999, by and
between James A. Cardwell, Jr. and the Company.
Exhibit 10.59 - Employment Agreement, dated February 10, 1999, by and
between Larry Zine and the Company.
Exhibit 10.60 - Employment Agreement, dated March 1, 1999, by and
between Evan Brudahl and the Company.
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
The Registrant filed no reports on Form 8-K during the quarter ended
March 31, 1999.
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PETRO STOPPING CENTERS, L.P.
(Registrant)
Date: May 14, 1999 /s/ David A. Appleby
-------------------------
David A. Appleby
Vice President of Finance
(Chief Accounting Officer)
12
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EXHIBIT INDEX
Exhibit No. Exhibit Description
- ----------- -------------------
Exhibit 10.57* Employment Agreement, dated February
10, 1999, by and between James A.
Cardwell, Sr. and the Company.
Exhibit 10.58* Employment Agreement, dated February
10, 1999, by and between James A.
Cardwell, Jr. and the Company.
Exhibit 10.59* Employment Agreement, dated February
10, 1999, by and between Larry Zine
and the Company.
Exhibit 10.60* Employment Agreement, dated March 1,
1999, by and between Evan Brudahl and
the Company.
27* Financial Data Schedule
* Filed herewith.
13
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Exhibit 10.57
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of February 10, 1999, by and between Petro
Stopping Centers, L.P., a Delaware limited partnership (the "Company") and James
A. Cardwell ("Executive").
IN CONSIDERATION of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive as
----------
Chairman, Chief Executive Officer and of the Company, and Executive hereby
accepts such employment, on the terms and conditions hereinafter set forth.
2. Term. The period of employment of Executive by the Company
----
hereunder (the "Employment Period") shall commence on February 10, 1999 (the
"Commencement Date") and shall end on the third anniversary thereof, provided,
--------
that, commencing on the third anniversary hereof, and on each anniversary
- ----
thereafter, the Employment Period shall automatically be extended for one (1)
additional year unless either party gives written notice not to extend this
Agreement not more than three (3) months before such extension would be
effectuated. The Employment Period may be sooner terminated by either party in
accordance with Section 6 of this Agreement.
3. Position and Duties. During the Employment Period, Executive
-------------------
shall serve as Chairman and Chief Executive Officer of the Company, and shall
report directly to the Board of Directors of the Company (the "Board"). Subject
to the supervisory powers of the Board, Executive shall have those powers and
duties normally associated with the position of Chairman and Chief Executive
Officer and such other powers and duties as may be prescribed by the Board and
the Third Amended and Restated Limited Partnership Agreement of the Company (the
"Partnership Agreement"), provided, that, such other powers and duties are
--------- ----
consistent with Executive's position as Chairman and Chief Executive Officer of
the Company. Executive shall devote substantially all of his working time,
attention and energies during normal business hours (other than absences due to
illness or vacation) to the performance of his duties for the Company.
Notwithstanding the above, Executive shall be permitted, to the extent such
activities do not substantially interfere with the performance by Executive of
his duties and responsibilities hereunder or violate Section 10 of this
Agreement, to (i) manage Executive's personal, financial and legal affairs, and
(ii) to serve on civic or charitable boards or committees (it being expressly
understood and agreed that Executive's continuing to serve on any such board
and/or committees on which Executive is serving, or with which Executive is
otherwise associated, as of the Commencement Date (each of which has been
disclosed to the Company prior to the execution of this Agreement or will be
disclosed promptly thereafter), shall be deemed not to interfere with the
performance by Executive of his duties and responsibilities under this
Agreement).
<PAGE>
4. Place of Performance. The principal place of employment of
--------------------
Executive shall be at the Company's principal executive offices in El Paso,
Texas or such other place as the Board may determine.
5. Compensation and Related Matters.
--------------------------------
(a) Base Salary. During the Employment Period, the Company shall
-----------
pay Executive a base salary at the rate of not less than $420,000 per year
("Base Salary"). Executive's Base Salary shall be paid in approximately equal
installments in accordance with the Company's customary payroll practices.
Executive's Base Salary shall be subject to annual review by the compensation
committee of the Board for possible increase. If Executive's Base Salary is
increased by the Company, such increased Base Salary shall then constitute the
Base Salary for all purposes of this Agreement. Executive's Base Salary shall
not be decreased at any time during the Employment Period without his direct
written consent.
(b) Incentive Compensation.
----------------------
(i) Beginning with calendar year 1999, Executive shall
annually be eligible to receive a bonus (the "Bonus") pursuant to a
schedule to be mutually agreed upon between the Company and Executive,
provided, that, the amount of such Bonus and the performance criteria
-------- ----
relating thereto shall be no less favorable than those set forth on
Schedule A hereof, and provided, further, that Executive's eligibility for,
-------- -------
and the amount of, the Bonus is subject to the level of activity spent by
Executive with respect to the performance of his duties hereunder, all as
determined in the Board's sole discretion.
(ii) Each Bonus shall be paid 10 days following the
rendering of audited financial statements for the relevant calendar year
(the "Payment Date").
(c) Car. The Company will provide Executive with an automobile
---
during the Employment Period.
(d) Expenses. The Company shall promptly reimburse Executive for all
--------
reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified
with respect to all senior executive officers of the Company.
(e) Vacation.
--------
(i) Executive shall be entitled to four (4) weeks vacation
per year;
(ii) Unused vacation time may be carried forward from one
year to the next; and
(iii) Upon the termination of the Employment Period or non-
renewal of this Agreement, Executive shall be entitled to receive
compensation for all earned but unused vacation days to the extent
permitted by the Company's then current policy with respect to all senior
executive officers of the Company, with the exception that the
2
<PAGE>
Executive shall be allowed to carry forward and receive compensation upon
termination of up to four weeks of unused vacation from the previous year
(i.e. be paid on termination a maximum of eight weeks of unused vacation
----
upon termination.)
(f) Services Furnished. During the Employment Period, the Company
------------------
shall furnish Executive with office space, stenographic and secretarial
assistance and such other facilities and services comparable to those provided
to the Company's other senior executive officers.
(g) Welfare, Pension and Incentive Benefit Plan. During the
-------------------------------------------
Employment Period, Executive (and his spouse and dependents to the extent
provided therein) shall be entitled to participate in and be covered under all
the welfare benefit plans or programs maintained by the Company from time to
time for the benefit of its senior executives, including, without limitation,
the executive medical program, and all medical, hospitalization, dental,
disability, accidental death and dismemberment and travel accident insurance
plans and programs In addition, during the Employment Period, Executive shall be
eligible to participate in all pension, retirement, savings and other employee
benefit plans and programs maintained from time to time by the Company for the
benefit of its senior executives.
(h) Other Benefits. During the Employment Period, the Company shall
--------------
provide Executive with the benefits described below:
(i) Life insurance for the Executive;
(ii) Tax preparation and financial planning assistance up
to a maximum of $20,000 value per year; and
(iii) Membership dues for membership at a country club of
Executive's choosing.
6. Termination. Executive's employment hereunder shall terminate
-----------
upon the expiration of the Employment Period and may be terminated during the
Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon
-----
his death.
(b) Disability. If, as a result of Executive's incapacity due to
----------
physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an entire period of four (4) months or more
during any six (6) consecutive month period, and within thirty (30) days after
written Notice of Termination is given after such six (6) month period,
Executive shall not have returned to the substantial performance of his duties
on a fulltime basis, the Company shall have the right to terminate Executive's
employment hereunder for "Disability", and such termination in and of itself
shall not be, nor shall it be deemed to be, a breach of this Agreement.
(c) Cause. The Company shall have the right to terminate Executive's
-----
employment for Cause, and such termination in and of itself shall not be, nor
shall it be deemed
3
<PAGE>
to be, a breach of this Agreement. For purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment upon Executive's:
(i) Conviction of, or plea of guilty or nolo contendere to,
a felony; or
(ii) Continued failure to use reasonable best efforts to
substantially perform his duties hereunder (other than such failure
resulting from Executive's incapacity due to physical or mental illness)
after demand for substantial performance is delivered by the Company in
writing that specifically identifies the manner in which the Company
believes Executive has not used reasonable best efforts to substantially
perform his duties; or
(iii) Misconduct (including, but not limited to, a breach of
the provisions of Section 10) that is materially economically injurious to
the Company or to any entity in control of, controlled by or under common
control with the Company ("Affiliates").
Cause shall not exist under paragraph (ii) or (iii) above unless and until the
Company has delivered to Executive a copy of a resolution duly adopted by a
majority of the Board (excluding Executive for purposes of determining such
majority) at a meeting of the Board called and held for such purpose (after
reasonable (but in no event less than thirty (30) days) notice to Executive and
an opportunity for Executive, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, Executive was
guilty of the conduct set forth in paragraph (ii) or (iii) and specifying the
particulars thereof in detail. This Section 6(c) shall not prevent Executive
from challenging in any court of competent jurisdiction the Board's
determination that Cause exists or that Executive has failed to cure any act (or
failure to act) that purportedly formed the basis for the Board's determination.
(d) Without Cause. The Company shall have the right to terminate
-------------
Executive's employment hereunder without Cause by providing Executive with a
Notice of Termination sixty (60) days prior to the date of termination of
employment, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement.
(e) Termination by Executive. Executive shall have the right to
------------------------
terminate his employment hereunder by providing the Company with a Notice of
Termination sixty (60) days prior to the date of termination of employment, and
such termination shall not in and of itself be, nor shall it be deemed to be, a
breach of this Agreement.
7. Termination Procedure.
---------------------
(a) Notice of Termination. Any termination of Executive's employment
---------------------
by the Company or by Executive during the Employment Period (other than
termination pursuant to Section 6(a)) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 14. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
4
<PAGE>
(b) Date of Termination. "Date of Termination" shall mean (i) if
-------------------
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 6(b), thirty (30)
days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability. In the event
--------------------------------------------------
Executive is disabled or his employment terminates during the Employment Period,
the Company shall provide Executive with the payments and benefits set forth
below. Executive acknowledges and agrees that the payments set forth in this
Section 8 constitute liquidated damages for termination of his employment during
the Employment Period.
(a) Without Cause, Cause or By Executive. If Executive's employment
------------------------------------
is terminated by the Company without Cause, for Cause or by Executive:
(i) The Company shall pay Executive his Base Salary and,
to the extent required by law or the Company's vacation policy, his accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination; and
(ii) The Company shall reimburse Executive pursuant to
Section 5(d) for reasonable expenses incurred, but not paid prior to such
termination of employment, unless such termination resulted from a
misappropriation of Company funds; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(b) Disability. During any period that Executive fails to perform
----------
his duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), Executive shall continue to receive his full Base Salary
set forth in Section 5(a) until his employment is terminated pursuant to Section
6(b); provided, however, that Executive's Base Salary shall be off-set on a
-------- -------
dollar for dollar basis for each dollar Executive receives from Company provided
disability insurance benefits. In the event Executive's employment is terminated
for Disability pursuant to Section 6(b):
(i) The Company shall pay to Executive his Base Salary and
accrued vacation pay through the Date of Termination, as soon as
practicable following the Date of Termination provided, however, that
-------- -------
Executive's Base Salary shall be off-set on a dollar for dollar basis for
each dollar Executive receives from Company provided disability insurance
benefits; and
(ii) The Company shall reimburse Executive pursuant to
Section 5(d), for reasonable expenses incurred, but not paid prior to such
termination of employment; and
5
<PAGE>
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(c) Death. If Executive's employment is terminated by his death:
-----
(i) The Company shall pay in a lump sum to Executive's
beneficiary(ies), legal representative(s) or estate, as the case may be,
Executive's Base Salary through the Date of Termination and Executive's
beneficiary(ies), legal representative(s) or estate shall be entitled to
the Bonus, determined in accordance with Section 5(b), for the year in
which employment is terminated that Executive would have received had he
remained employed through the Payment Date for such Bonus, pro-rated to the
Date of Termination; and
(ii) The Company shall reimburse Executive's
beneficiary(ies), legal representative(s), or estate, as the case may be,
pursuant to Section 5(d), for reasonable expenses incurred, but not paid
prior to such termination of employment; and
(iii) Executive's beneficiary(ies), legal representative(s)
or estate, as the case may be, shall be entitled to any other rights,
compensation and benefits as may be due to any such persons or estate in
accordance with the terms and provisions of any agreements, plans or
programs of the Company.
9. Mitigation. Executive shall not be required to mitigate amounts
----------
payable under this Agreement by seeking other employment or otherwise, and there
shall be no offset against amounts due Executive under this Agreement on account
of subsequent employment except as specifically provided herein.
10. Confidential Information, Ownership of Documents, Non-
------------------------------------------------------
Competition.
- -----------
(a) Confidential Information. Executive shall hold in a fiduciary
------------------------
capacity for the benefit of the Company all trade secrets and confidential
information, knowledge or data relating to the Company and its businesses and
investments, which shall have been obtained by Executive during Executive's
employment by the Company and which is not generally available public knowledge
(other than by acts by Executive in violation of this Agreement). Except as may
be required or appropriate in connection with his carrying out his duties under
this Agreement, Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or any legal process, or as is
necessary in connection with any adversarial proceeding against the Company (in
which case Executive shall use his reasonable best efforts in cooperating with
the Company in obtaining a protective order against disclosure by a court of
competent jurisdiction), communicate or divulge any such trade secrets,
information, knowledge or data to anyone other than the Company and those
designated by the Company or on behalf of the Company in the furtherance of its
business or to perform duties hereunder.
(b) Removal of Documents: Rights to Product. All records, files,
----------------------------------------
drawings, documents, models, equipment, and the like relating to the Company's
business, which Executive has control over shall not be removed from the
Company's premises without its written consent,
6
<PAGE>
unless such removal is in the furtherance of the Company's business or is
in connection with Executive's carrying out his duties under this Agreement
and, if so removed, shall be returned to the Company promptly after
termination of Executive's employment hereunder, or otherwise promptly
after removal if such removal occurs following termination of employment.
Executive shall assign to the Company all rights to trade secrets and other
products relating to the Company's business developed by him alone or in
conjunction with others at any time while employed by the Company.
(c) Non-Competition. During the employment of Executive with the
---------------
Company pursuant to this Agreement and for the greater of (i) a one year
period following the termination of his employment for any reason or (ii)
the period of time set forth in the Partnership Agreement with respect to
the non-competition and non-solicitation provisions contained therein ((i)
and (ii) collectively referred to as the "Restricted Period"), Executive
agrees that without the Company's prior written consent, which may be
withheld in its absolute discretion, he will not, except as otherwise
permitted in the Partnership Agreement, enter into, be engaged or
interested in, as a principal, stockholder, director, trustee, partner,
officer, agent, employee, consultant, independent contractor, or otherwise,
any business or undertaking which directly compete with the truck stop
business of the Company, its affiliates or their successors within any
county where any of the Company, its affiliates, or their successors are
doing business, or has made definite plans for and has taken steps
preparatory to doing business; provided, however, that Employee's ownership
-------- -------
of five percent (5%) or less of the capital stock of a public company that
competes with the Company shall not be prohibited by this covenant.
(d) Non-Solicitation. During the employment of Executive with the
----------------
Company pursuant to this Agreement and during the Restricted Period,
Executive agrees that without the Company's prior written consent, which
may be withheld in its absolute discretion, he will not except as otherwise
permitted in the Partnership Agreement, (i) call upon any person who is, at
that time, an employee of the Company, any of its affiliates or their
successors in a managerial capacity for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company, any
of its affiliates or their successors, or (ii) solicit business from any
person or entity which is at that time a customer of the Company, any of
its affiliates or their successors.
(e) Injunctive Relief. In the event of a breach or threatened
-----------------
breach of this Section 10, Executive agrees that the Company shall be
entitled to injunctive relief in a court of appropriate jurisdiction to
remedy any such breach or threatened breach, Executive acknowledging that
damages would be inadequate and insufficient.
(f) Continuing Operation. Except as specifically provided in this
--------------------
Section 10, the termination of Executive's employment or of this Agreement
shall have no effect on the continuing operation of this Section 10.
(g) Reformation. In the event that any of the provisions of this
-----------
Section 10 are not enforceable in accordance with their terms, Executive
and the Company agree that such Section shall be reformed to make such
Section enforceable in a manner which provides the Company the maximum
rights permitted by law.
7
<PAGE>
11. Indemnification.
---------------
(a) General. The Company shall, to the extent provided in the
-------
Partnership Agreement, and to the maximum extent permitted by law, indemnify and
hold harmless Executive from any and all losses, damages, claims or expenses
that may be asserted against Executive at any time in connection with his
services for the Company, his employment hereunder or that may otherwise derive
from Executive's employment as contemplated hereby.
(b) Insurance. The Company may, but shall not be required to,
---------
maintain such insurance for the protection of its officers and directors as is
appropriate for entities engaged in the Company's business.
12. Legal Fees and Expenses. If any contest or dispute shall arise
-----------------------
between the Company and Executive regarding any provision of this Agreement, the
Company shall reimburse Executive for all legal fees and expenses reasonably
incurred by Executive in connection with such contest or dispute, but only if
Executive is successful in respect of substantially all of Executive's claims
brought and pursued in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the resolution of
such contest or dispute (whether or not appealed) to the extent the Company
receives reasonable written evidence of such fees and expenses.
13. Successors: Binding Agreement.
-------------------------------
(a) Company's Successors. No rights or obligations of the Company
--------------------
under this Agreement may be assigned or transferred except that the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as herein before defined and any successor to
its business and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) Executive's Successors. No rights or obligations of Executive
----------------------
under this Agreement may be assigned or transferred by Executive other than his
rights to payments or benefits hereunder, which may be transferred only by will
or the laws of descent and distribution. Upon Executive's death, this Agreement
and all rights of Executive hereunder shall inure to the benefit of and be
enforceable by Executive's beneficiary or beneficiaries, personal or legal
representatives, or estate, to the extent any such person succeeds to
Executive's interests under this Agreement. Executive shall be entitled to
select and change a beneficiary or beneficiaries to receive any benefit or
compensation payable hereunder following Executive's death by giving the Company
written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary(ies), estate or
other legal representative(s). If Executive should die following his Date of
Termination while any amounts would still be payable to him hereunder if
8
<PAGE>
he had continued to live, all such amounts unless otherwise provided herein
shall be paid in accordance with the terms of this Agreement to such person or
persons so appointed in writing by Executive, or otherwise to his legal
representative(s) or estate.
14. Notice. For the purposes of this Agreement, notices, demands
------
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered either personally or
by United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
James A. Cardwell
6080 Surety Drive
El Paso, Texas
79905
If to the Company:
Petro Stopping Centers, L.P.
Attention: General Counsel
6080 Surety Drive
El Paso, Texas
79905
with a copy to:
Andrew L. Gaines
Akin, Gump, Strauss, Hauer & Feld
590 Madison Avenue
New York, New York 10022-4616
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be amended,
-------------
modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time 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 similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The respective rights
and obligations of the parties hereunder of this Agreement shall survive
Executive's termination of employment and the termination of this Agreement to
the extent necessary for the intended preservation of such rights and
obligations.
9
<PAGE>
16. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. Entire Agreement. This Agreement, set forth the entire agreement
----------------
of the parties hereto in respect of the subject matter contained herein and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of such
subject matter. Except as otherwise provided herein, any prior agreement of the
parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled, including, but not limited to, your current employment
agreement with the Company, if any.
18. Withholding. All payments hereunder shall be subject to any
-----------
required withholding of Federal, state and local taxes pursuant to any
applicable law or regulation.
19. Noncontravention. The Company represents that the Company is
----------------
not prevented from entering into, or performing this Agreement by the terms of
any law, order, rule or regulation, its by-laws or declaration of trust, or any
agreement to which it is a party, other than which would not have a material
adverse effect on the Company's ability to enter into or perform this Agreement.
20. Section Headings. The section headings in this Employment
----------------
Agreement are for convenience of reference only, and they form no part of this
Agreement and shall not affect its interpretation.
21. Severability. If this Agreement or any portion thereof is, or
------------
the transactions contemplated hereby are, found to be inconsistent or contrary
to any valid applicable laws or official orders, rules and regulations, the
inconsistent or contrary provision shall be null and void and such laws, orders,
rules and regulations shall control and, as so modified, this Agreement shall
continue in full force and effect; provided, however, that nothing herein
-------- -------
contained shall be construed as a waiver of any right to question or contest any
such law, order, rule or regulation in any forum having jurisdiction.
22. Governing Law. The provisions of this Agreement shall be
-------------
construed in accordance with the laws of the State of Texas without regard to
its conflict of law principles.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
PETRO STOPPING CENTERS, L.P.
By:
---------------------------------
--------------------------------------
James A. Cardwell
11
<PAGE>
SCHEDULE A
Incentive Compensation.
- ----------------------
(a) The Bonus shall be paid as a percent of Base Salary (as defined
in Section 5(a) of the Employment Agreement), based upon the achievements of
Target EBITDA, as provided in accordance with the following table:
<TABLE>
<CAPTION>
TARGET EBITDA BONUS
------------- -----
- ------------------------------------ -------------------------------------
<S> <C>
90% 20%
- ------------------------------------ -------------------------------------
95% 40%
- ------------------------------------ -------------------------------------
100% 60%
- ------------------------------------ -------------------------------------
105% 90%
- ------------------------------------ -------------------------------------
110% 120%
- ------------------------------------ -------------------------------------
</TABLE>
In accordance with the above table, if EBITDA achieved for any calendar year
exceeds 90% Target EBITDA, but is less than 100% Target EBITDA, the Bonus shall
be such percentage of Base Salary between 20% and 60%, calculated on a straight-
line basis, as corresponds to the relative achievement of EBITDA, with 20%
corresponding to 90% Target EBITDA and 60% corresponding to 100% Target EBITDA.
If EBITDA achieved for any calendar year exceeds 100% Target EBITDA, but is less
than 110% Target EBITDA, the Bonus shall be such percentage of Base Salary
between 60% and 120%, calculated on a straight-line basis, as corresponds to the
relative achievement of EBITDA, with 60% corresponding to 100% Target EBITDA and
120% corresponding to 110% Target EBITDA. Notwithstanding the foregoing, if
greater than 110% Target EBITDA is achieved, the Board shall award an additional
Bonus beyond the formula Bonus provided above, in an amount that it shall
determine in its sole discretion.
(b) Target EBITDA shall be established annually by the Board, or, at
the discretion of the Board, by the Compensation Committee and in either event,
with the concurrence of Executive as to the amount of Target EBITDA thereby
established. In the event of an acquisition, disposition or other similar
extraordinary corporate event which would significantly alter the Target EBITDA
established for that year, the parties shall negotiate in good faith to set new
levels of Target EBITDA.
12
<PAGE>
Exhibit 10.58
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of February 10, 1999, by and between Petro
Stopping Centers, L.P., a Delaware limited partnership (the "Company") and James
A. Cardwell, Jr. ("Executive").
IN CONSIDERATION of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive as
----------
Senior Vice President of the Company, and Executive hereby accepts such
employment, on the terms and conditions hereinafter set forth.
2. Term. The period of employment of Executive by the Company
----
hereunder (the "Employment Period") shall commence on February 10, 1999 (the
"Commencement Date") and shall end on the third anniversary thereof. The
Employment Period may be sooner terminated by either party in accordance with
Section 6 of this Agreement.
3. Position and Duties. During the Employment Period, Executive
-------------------
shall serve as an executive of the Company, and shall report directly to the
President of the Company. Executive shall devote substantially all of his
working time, attention and energies during normal business hours (other than
absences due to illness or vacation) to the performance of his duties for the
Company. Notwithstanding the above, Executive shall be permitted, to the extent
such activities do not substantially interfere with the performance by Executive
of his duties and responsibilities hereunder or violate Section 10 of this
Agreement, to (i) manage Executive's personal, financial and legal affairs, and
(ii) to serve on civic or charitable boards or committees (it being expressly
understood and agreed that Executive's continuing to serve on any such board
and/or committees on which Executive is serving, or with which Executive is
otherwise associated, as of the Commencement Date (each of which has been
disclosed to the Company prior to the execution of this Agreement or will be
disclosed promptly thereafter), shall be deemed not to interfere with the
performance by Executive of his duties and responsibilities under this
Agreement).
4. Place of Performance. The principal place of employment of
--------------------
Executive shall be at the Company's principal executive offices in El Paso,
Texas or such other place as the Board of Directors of the Company (the "Board")
may determine.
<PAGE>
5. Compensation and Related Matters.
--------------------------------
(a) Base Salary. During the Employment Period, the Company shall pay
-----------
Executive a base salary at the rate of not less than $180,000 per year ("Base
Salary"). Executive's Base Salary shall be paid in approximately equal
installments in accordance with the Company's customary payroll practices.
Executive's Base Salary shall be subject to annual review by the compensation
committee of the Board for possible increase. If Executive's Base Salary is
increased by the Company, such increased Base Salary shall then constitute the
Base Salary for all purposes of this Agreement. Executive's Base Salary shall
not be decreased at any time during the Employment Period without his direct
written consent.
(b) Incentive Compensation.
----------------------
(i) Beginning with calendar year 1999, Executive shall annually be
eligible to receive a bonus (the "Bonus") pursuant to a schedule to be
mutually agreed upon between the Company and Executive, provided, that, the
-------- ----
amount of such Bonus and the performance criteria relating thereto shall be
no less favorable than those set forth on Schedule A hereof.
(ii) Each Bonus shall be paid 10 days following the rendering of
audited financial statements for the relevant calendar year (the "Payment
Date").
(c) Expenses. The Company shall promptly reimburse Executive for all
--------
reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company.
(d) Vacation.
--------
(i) Executive shall be entitled to four (4) weeks vacation per year;
(ii) Unused vacation time may be carried forward from one year to the
next; and
(iii) Upon the termination of the Employment Period or non-renewal of
this Agreement, Executive shall be entitled to receive compensation for all
earned but unused vacation days to the extent permitted by the Company's
then current policy with respect to all senior executive officers of the
Company.
(e) Services Furnished. During the Employment Period, the Company shall
------------------
furnish Executive with office space, stenographic and secretarial assistance and
such other facilities and services comparable to those provided to the Company's
other senior executive officers.
(f) Welfare, Pension and Incentive Benefit Plan. During the Employment
-------------------------------------------
Period, Executive (and his spouse and dependents to the extent provided therein)
shall be entitled to
2
<PAGE>
participate in and be covered under all the welfare benefit plans or programs
maintained by the Company from time to time for the benefit of its senior
executives, including, without limitation, the executive medical program, and
all medical, hospitalization, dental, disability, accidental death and
dismemberment and travel accident insurance plans and programs In addition,
during the Employment Period, Executive shall be eligible to participate in all
pension, retirement, savings and other employee benefit plans and programs
maintained from time to time by the Company for the benefit of its senior
executives.
(g) Other Benefits. During the Employment Period, the Company shall
--------------
provide Executive with the benefits described below:
(i) The Company will pay Executive's portable life and disability
insurance;
(ii) Executive will participate in any other Company equity incentive
plan adopted by the Company during the term of this Agreement; and
(iii) Membership dues for membership at a country club of Executive's
choosing in an amount not to exceed $4,000 annually.
6. Termination. Executive's employment hereunder shall terminate upon
-----------
the expiration of the Employment Period and may be terminated during the
Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his
-----
death.
(b) Disability. If, as a result of Executive's incapacity due to physical
----------
or mental illness, Executive shall have been substantially unable to perform his
duties hereunder for an entire period of four (4) months or more during any six
(6) consecutive month period, and within thirty (30) days after written Notice
of Termination is given after such six (6) month period, Executive shall not
have returned to the substantial performance of his duties on a fulltime basis,
the Company shall have the right to terminate Executive's employment hereunder
for "Disability", and such termination in and of itself shall not be, nor shall
it be deemed to be, a breach of this Agreement.
(c) Cause. The Company shall have the right to terminate Executive's
-----
employment for Cause, and such termination in and of itself shall not be, nor
shall it be deemed to be, a breach of this Agreement. For purposes of this
Agreement, the Company shall have "Cause" to terminate Executive's employment
upon Executive's:
(i) Conviction of, or plea of guilty or nolo contendere to, a felony;
or
(ii) Continued failure to use reasonable best efforts to substantially
perform his duties hereunder (other than such failure resulting from
Executive's incapacity due to physical or mental illness or subsequent to
the issuance of a Notice of Termination by Executive for Good Reason) after
demand for substantial performance is delivered by the Company in writing
that specifically identifies the manner in which the
3
<PAGE>
Company believes Executive has not used reasonable best efforts to
substantially perform his duties; or
(iii) Misconduct (including, but not limited to, a breach of the
provisions of Section 10) that is materially economically injurious to the
Company or to any entity in control of, controlled by or under common
control with the Company ("Affiliates").
(d) Good Reason. Executive may terminate his employment for "Good Reason"
-----------
within one hundred and twenty (120) days after Executive has actual knowledge of
the occurrence, without the written consent of Executive, of one of the
following events that has not been cured within thirty (30) days after written
notice thereof has been given by Executive to the Company:
(i) A reduction by the Company in Executive's Base Salary or a
failure by the Company to pay any such amounts when due;
(ii) The Company's failure to provide the benefits set forth in
Section 5 or the failure of the Company to substantially provide any
material employee benefits due to be provided to Executive (other than any
such failure not inconsistent with any express provisions contained herein
which failure affects all senior executive officers); or
(iii) The Company's failure to provide in all material respects the
indemnification set forth in Section 11 of this Agreement.
Executive's right to terminate his employment hereunder for Good Reason shall
not be affected by his incapacity due to physical or mental illness.
Executive's continued employment during the one hundred and twenty (120) day
period referred to above in this paragraph (d) shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
(e) Without Cause. The Company shall have the right to terminate
-------------
Executive's employment hereunder without Cause by providing Executive with a
Notice of Termination sixty (60) days prior to the date of termination of
employment, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement.
(f) Without Good Reason. Executive shall have the right to terminate his
-------------------
employment hereunder without Good Reason by providing the Company with a Notice
of Termination sixty (60) days prior to the date of termination of employment,
and such termination shall not in and of itself be, nor shall it be deemed to
be, a breach of this Agreement.
7. Termination Procedure.
---------------------
(a) Notice of Termination. Any termination of Executive's employment by
---------------------
the Company or by Executive during the Employment Period (other than termination
pursuant to Section 6(a)) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 14. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied
4
<PAGE>
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under the
provision so indicated.
(b) Date of Termination. "Date of Termination" shall mean (i) if
-------------------
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 6(b), thirty (30)
days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability. In the event
--------------------------------------------------
Executive is disabled or his employment terminates during the Employment Period,
the Company shall provide Executive with the payments and benefits set forth
below. Executive acknowledges and agrees that the payments set forth in this
Section 8 constitute liquidated damages for termination of his employment during
the Employment Period.
(a) Termination By Company without Cause or by Executive for Good Reason.
--------------------------------------------------------------------
If Executive's employment is terminated by the Company without Cause or by
Executive for Good Reason:
(i) The Company shall pay to Executive (A) his Base Salary and
accrued vacation pay through the Date of Termination, as soon as
practicable following the Date of Termination, and (B) an amount equal to
one (1) times Executive's current Base Salary; and
(ii) The Company shall maintain in full force and effect, for the
continued benefit of Executive, his spouse and his dependents for a period
of twelve (12) months following the Date of Termination the medical,
hospitalization, dental, and life insurance programs in which Executive,
his spouse and his dependents were participating immediately prior to the
Date of Termination at the level in effect and upon substantially the same
terms and conditions (including without limitation contributions required
by Executive for such benefits) as existed immediately prior to the Date of
Termination; provided, that, if Executive, his spouse or his dependents
-------- ----
cannot continue to participate in the Company programs providing such
benefits, the Company shall arrange to provide Executive, his spouse and
his dependents with the economic equivalent of such benefits which they
otherwise would have been entitled to receive under such plans and programs
("Continued Benefits"), provided, that, such Continued Benefits shall
-------- ----
terminate on the date or dates Executive receives equivalent coverage and
benefits, without waiting period or pre-existing condition limitations,
under the plans and programs of a subsequent employer (such coverage and
benefits to be determined on a coverage by coverage or benefit by benefit,
basis); and
(iii) The Company shall reimburse Executive pursuant to Section 5(c),
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
5
<PAGE>
(iv) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company; and
(v) Executive shall be entitled to the Bonus, determined in
accordance with Section 5(b), for the year in which employment is
terminated that Executive would have received had he remained employed
through the Payment Date for such Bonus, pro rated to the Date of
Termination.
(b) Cause or By Executive Without Good Reason. If Executive's employment
-----------------------------------------
is terminated by the Company for Cause or by Executive (other than for Good
Reason):
(i) The Company shall pay Executive his Base Salary and, to the
extent required by law or the Company's vacation policy, his accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination; and
(ii) The Company shall reimburse Executive pursuant to Section 5(c),
for reasonable expenses incurred, but not paid prior to such termination of
employment, unless such termination resulted from a misappropriation of
Company funds; and
(iii) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company.
(c) Disability. During any period that Executive fails to perform his
----------
duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), Executive shall continue to receive his full Base Salary
set forth in Section 5(a) until his employment is terminated pursuant to Section
6(b); provided, however, that Executive's Base Salary shall be off-set on a
-------- -------
dollar for dollar basis for each dollar Executive receives from Company provided
disability insurance benefits. In the event Executive's employment is terminated
for Disability pursuant to Section 6(b):
(i) The Company shall pay to Executive his Base Salary and accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination; provided, however, that Executive's Base
-------- -------
Salary shall be off-set on a dollar for dollar basis for each dollar
Executive receives from Company provided disability insurance benefits; and
(ii) The Company shall reimburse Executive pursuant to Section 5(c),
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company.
(d) Death. If Executive's employment is terminated by his death:
-----
6
<PAGE>
(i) The Company shall pay in a lump sum to Executive's
beneficiary(ies), legal representative(s) or estate, as the case may be,
Executive's Base Salary through the Date of Termination and Executive's
beneficiary(ies), legal representative(s) or estate shall be entitled to
the Bonus, determined in accordance with Section 5(b), for the year in
which employment is terminated that Executive would have received had he
remained employed through the Payment Date for such Bonus, pro-rated to the
Date of Termination; and
(ii) The Company shall reimburse Executive's beneficiary(ies), legal
representative(s), or estate, as the case may be, pursuant to Section 5(c),
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive's beneficiary(ies), legal representative(s) or estate,
as the case may be, shall be entitled to any other rights, compensation and
benefits as may be due to any such persons or estate in accordance with the
terms and provisions of any agreements, plans or programs of the Company.
9. Mitigation. Executive shall not be required to mitigate amounts
----------
payable under this Agreement by seeking other employment or otherwise, and there
shall be no offset against amounts due Executive under this Agreement on account
of subsequent employment except as specifically provided herein.
10. Confidential Information, Ownership of Documents, Non-Competition.
-----------------------------------------------------------------
(a) Confidential Information. Executive shall hold in a fiduciary
------------------------
capacity for the benefit of the Company all trade secrets and confidential
information, knowledge or data relating to the Company and its businesses and
investments, which shall have been obtained by Executive during Executive's
employment by the Company and which is not generally available public knowledge
(other than by acts by Executive in violation of this Agreement). Except as may
be required or appropriate in connection with his carrying out his duties under
this Agreement, Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or any legal process, or as is
necessary in connection with any adversarial proceeding against the Company (in
which case Executive shall use his reasonable best efforts in cooperating with
the Company in obtaining a protective order against disclosure by a court of
competent jurisdiction), communicate or divulge any such trade secrets,
information, knowledge or data to anyone other than the Company and those
designated by the Company or on behalf of the Company in the furtherance of its
business or to perform duties hereunder.
(b) Removal of Documents: Rights to Product. All records, files,
----------------------------------------
drawings, documents, models, equipment, and the like relating to the Company's
business, which Executive has control over shall not be removed from the
Company's premises without its written consent, unless such removal is in the
furtherance of the Company's business or is in connection with Executive's
carrying out his duties under this Agreement and, if so removed, shall be
returned to the Company promptly after termination of Executive's employment
hereunder, or otherwise promptly after removal if such removal occurs following
termination of employment. Executive shall assign to the Company all rights to
trade secrets and other products relating to the
7
<PAGE>
Company's business developed by him alone or in conjunction with others at any
time while employed by the Company.
(c) Non-Competition. During the employment of Executive with the Company
---------------
pursuant to this Agreement and for the greater of (i) a one year period
following the termination of his employment for any reason or (ii) the period of
time set forth in the Partnership Agreement (as defined below) with respect to
the non-competition and non-solicitation provisions contained therein ((i) and
(ii) collectively referred to as the "Restricted Period"), Executive agrees that
without the Company's prior written consent, which may be withheld in its
absolute discretion, he will not, except as otherwise permitted in the
Partnership Agreement, enter into, be engaged or interested in, as a principal,
stockholder, director, trustee, partner, officer, agent, employee, consultant,
independent contractor, or otherwise, any business or undertaking which directly
compete with the truck stop business of the Company, its affiliates or their
successors within any county where any of the Company, its affiliates, or their
successors are doing business, or has made definite plans for and has taken
steps preparatory to doing business; provided, however, that Employee's
-------- -------
ownership of five percent (5%) or less of the capital stock of a public company
that competes with the Company shall not be prohibited by this covenant.
(d) Non-Solicitation. During the employment of Executive with the Company
----------------
pursuant to this Agreement and during the Restricted Period, Executive agrees
that without the Company's prior written consent, which may be withheld in its
absolute discretion, he will not, except as otherwise permitted in the
Partnership Agreement, (i) call upon any person who is, at that time, an
employee of the Company, any of its affiliates or their successors in a
managerial capacity for the purpose or with the intent of enticing such employee
away from or out of the employ of the Company, any of its affiliates or their
successors, or (ii) solicit business from any person or entity which is at that
time a customer of the Company, any of its affiliates or their successors.
(e) Injunctive Relief. In the event of a breach or threatened breach of
-----------------
this Section 10, Executive agrees that the Company shall be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, Executive acknowledging that damages would be
inadequate and insufficient.
(f) Continuing Operation. Except as specifically provided in this Section
--------------------
10, the termination of Executive's employment or of this Agreement shall have no
effect on the continuing operation of this Section 10.
(g) Reformation. In the event that any of the provisions of this Section
-----------
10 are not enforceable in accordance with their terms, Executive and the Company
agree that such Section shall be reformed to make such Section enforceable in a
manner which provides the Company the maximum rights permitted by law.
11. Indemnification.
---------------
(a) General. The Company shall, to the extent provided in the Third
-------
Amended and Restated Limited Partnership Agreement of the Company dated as of
the Closing (the "Partnership Agreement"), and to the maximum extent permitted
by law, indemnify and hold
8
<PAGE>
harmless Executive from any and all losses, damages, claims or expenses that may
be asserted against Executive at any time in connection with his services for
the Company, his employment hereunder or that may otherwise derive from
Executive's employment as contemplated hereby.
(b) Insurance. The Company may, but shall not be required to, maintain
---------
such insurance for the protection of its officers and directors as is
appropriate for entities engaged in the Company's business.
12. Legal Fees and Expenses. If any contest or dispute shall arise
-----------------------
between the Company and Executive regarding any provision of this Agreement, the
Company shall reimburse Executive for all legal fees and expenses reasonably
incurred by Executive in connection with such contest or dispute, but only if
Executive is successful in respect of substantially all of Executive's claims
brought and pursued in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the resolution of
such contest or dispute (whether or not appealed) to the extent the Company
receives reasonable written evidence of such fees and expenses.
13. Successors: Binding Agreement.
-------------------------------
(a) Company's Successors. No rights or obligations of the Company under
--------------------
this Agreement may be assigned or transferred except that the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as herein before defined and any successor to
its business and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) Executive's Successors. No rights or obligations of Executive under
----------------------
this Agreement may be assigned or transferred by Executive other than his rights
to payments or benefits hereunder, which may be transferred only by will or the
laws of descent and distribution. Upon Executive's death, this Agreement and all
rights of Executive hereunder shall inure to the benefit of and be enforceable
by Executive's beneficiary or beneficiaries, personal or legal representatives,
or estate, to the extent any such person succeeds to Executive's interests under
this Agreement. Executive shall be entitled to select and change a beneficiary
or beneficiaries to receive any benefit or compensation payable hereunder
following Executive's death by giving the Company written notice thereof. In the
event of Executive's death or a judicial determination of his incompetence,
reference in this Agreement to Executive shall be deemed, where appropriate, to
refer to his beneficiary(ies), estate or other legal representative(s). If
Executive should die following his Date of Termination while any amounts would
still be payable to him hereunder if he had continued to live, all such amounts
unless otherwise provided herein shall be paid in accordance with the terms of
this Agreement to such person or persons so appointed in writing by Executive,
or otherwise to his legal representative(s) or estate.
9
<PAGE>
14. Notice. For the purposes of this Agreement, notices, demands and all
------
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered either personally or by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
James A. Cardwell, Jr.
6080 Surety Drive
El Paso, Texas
79905
If to the Company:
Petro Stopping Centers, L.P.
Attention: General Counsel
6080 Surety Drive
El Paso, Texas
79905
with a copy to:
Andrew L. Gaines
Akin, Gump, Strauss, Hauer & Feld
590 Madison Avenue
New York, New York 10022-4616
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be amended,
-------------
modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time 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 similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The respective rights
and obligations of the parties hereunder of this Agreement shall survive
Executive's termination of employment and the termination of this Agreement to
the extent necessary for the intended preservation of such rights and
obligations.
16. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10
<PAGE>
17. Entire Agreement. This Agreement, set forth the entire agreement of
----------------
the parties hereto in respect of the subject matter contained herein and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of such
subject matter. Except as otherwise provided herein, any prior agreement of the
parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled, including, but not limited to, your current employment
agreement with the Company, if any.
18. Withholding. All payments hereunder shall be subject to any required
-----------
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
19. Noncontravention. The Company represents that the Company is not
----------------
prevented from entering into, or performing this Agreement by the terms of any
law, order, rule or regulation, its by-laws or declaration of trust, or any
agreement to which it is a party, other than which would not have a material
adverse effect on the Company's ability to enter into or perform this Agreement.
20. Section Headings. The section headings in this Employment Agreement
----------------
are for convenience of reference only, and they form no part of this Agreement
and shall not affect its interpretation.
21. Severability. If this Agreement or any portion thereof is, or the
------------
transactions contemplated hereby are, found to be inconsistent or contrary to
any valid applicable laws or official orders, rules and regulations, the
inconsistent or contrary provision shall be null and void and such laws, orders,
rules and regulations shall control and, as so modified, this Agreement shall
continue in full force and effect; provided, however, that nothing herein
-------- -------
contained shall be construed as a waiver of any right to question or contest any
such law, order, rule or regulation in any forum having jurisdiction.
22. Governing Law. The provisions of this Agreement shall be construed in
-------------
accordance with the laws of the State of Texas without regard to its conflict of
law principles.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
PETRO STOPPING CENTERS, L.P.
By:
---------------------------------------
------------------------------------------
James A. Cardwell, Jr.
12
<PAGE>
SCHEDULE A
Incentive Compensation.
- ----------------------
(a) The Bonus shall be paid as a percent of Base Salary (as defined in
Section 5(a) of the Employment Agreement), based upon the achievements of Target
EBITDA, as provided in accordance with the following table:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TARGET EBITDA BONUS
------------- -----
<S> <C>
- --------------------------------------------------------------------------------
90% 20%
- --------------------------------------------------------------------------------
95% 40%
- --------------------------------------------------------------------------------
100% 60%
- --------------------------------------------------------------------------------
105% 90%
- --------------------------------------------------------------------------------
110% 120%
- --------------------------------------------------------------------------------
</TABLE>
In accordance with the above table, if EBITDA achieved for any calendar year
exceeds 90% Target EBITDA, but is less than 100% Target EBITDA, the Bonus shall
be such percentage of Base Salary between 20% and 60%, calculated on a straight-
line basis, as corresponds to the relative achievement of EBITDA, with 20%
corresponding to 90% Target EBITDA and 60% corresponding to 100% Target EBITDA.
If EBITDA achieved for any calendar year exceeds 100% Target EBITDA, but is less
than 110% Target EBITDA, the Bonus shall be such percentage of Base Salary
between 60% and 120%, calculated on a straight-line basis, as corresponds to the
relative achievement of EBITDA, with 60% corresponding to 100% Target EBITDA and
120% corresponding to 110% Target EBITDA. Notwithstanding the foregoing, if
greater than 110% Target EBITDA is achieved, the Board shall award an additional
Bonus beyond the formula Bonus provided above, in an amount that it shall
determine in its sole discretion.
(b) Target EBITDA shall be established annually by the Board, or, at the
discretion of the Board, by the Compensation Committee and in either event, with
the concurrence of Executive as to the amount of Target EBITDA thereby
established. In the event of an acquisition, disposition or other similar
extraordinary corporate event which would significantly alter the Target EBITDA
established for that year, the parties shall negotiate in good faith to set new
levels of Target EBITDA.
13
<PAGE>
Exhibit 10.59
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of February 10, 1999, by and between Petro Stopping
Centers, L.P., a Delaware limited partnership (the "Company") and Larry Zine
("Executive").
IN CONSIDERATION of the premises and the mutual covenants set forth below,
the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive as the
----------
President and Chief Financial Officer of the Company, and Executive hereby
accepts such employment, on the terms and conditions hereinafter set forth.
2. Term. The period of employment of Executive by the Company hereunder
----
(the "Employment Period") shall commence on February 10, 1999 (the "Commencement
Date") and shall end on the third anniversary thereof, provided, that,
-------- ----
commencing on the second anniversary hereof, and on each anniversary thereafter,
the Employment Period shall automatically be extended for one (1) additional
year unless either party gives written notice not to extend this Agreement not
more than three (3) months before such extension would be effectuated. The
Employment Period may be sooner terminated by either party in accordance with
Section 6 of this Agreement.
3. Position and Duties. During the Employment Period, Executive shall
-------------------
serve on the Board of Directors of the Company (the "Board"), and shall serve as
President and Chief Financial Officer of the Company, and shall report solely
and directly to the Board and the Chief Executive Officer of the Company.
Subject to the supervisory powers of Chief Executive Officer of the Company and
Board only, Executive shall have those powers and duties normally associated
with the position of President and Chief Financial Officer and such other powers
and duties as may be prescribed by the Chief Executive Officer of the Company
and the Board only, provided, that, such other powers and duties are consistent
-------- ----
with Executive's position as President and Chief Financial Officer of the
Company. Executive shall serve on the Board for no additional compensation.
Executive shall devote substantially all of his working time, attention and
energies during normal business hours (other than absences due to illness or
vacation) to the performance of his duties for the Company. Notwithstanding the
above, Executive shall be permitted, to the extent such activities do not
substantially interfere with the performance by Executive of his duties and
responsibilities hereunder or violate Section 10 of this Agreement, to (i)
manage Executive's personal, financial and legal affairs, and (ii) to serve on
civic or charitable boards or committees (it being expressly understood and
agreed that Executive's continuing to serve on any such board and/or committees
on which Executive is serving, or with which Executive is otherwise associated,
as of the Commencement Date (each of which has been disclosed to the Company
prior to the execution of this Agreement or will be disclosed promptly
thereafter), shall be deemed not to interfere with the performance by Executive
of his duties and responsibilities under this Agreement).
<PAGE>
4. Place of Performance. The principal place of employment of Executive
--------------------
shall be at the Company's principal executive offices in El Paso, Texas or such
other place as determined by the Board.
5. Compensation and Related Matters.
--------------------------------
(a) Base Salary. During the Employment Period, the Company shall pay
-----------
Executive a base salary at the rate of not less than $350,000 per year ("Base
Salary"). Executive's Base Salary shall be paid in approximately equal
installments in accordance with the Company's customary payroll practices.
Executive's Base Salary shall be subject to annual review by the compensation
committee of the Board for possible increase. If Executive's Base Salary is
increased by the Company, such increased Base Salary shall then constitute the
Base Salary for all purposes of this Agreement. Executive's Base Salary shall
not be decreased at any time during the Employment Period without his direct
written consent.
(b) Equity. Concurrently with the closing of the transactions
------
outlined in the Omnibus Agreement dated as of October 18, 1996 (the "Closing"),
Executive received options to purchase 2.75% of the common partnership interests
(or appreciation rights with respect thereto) of the Company (the "Option"),
fully diluted as of the date of the Closing, at a per 1% common partnership
interest exercise price equal to the per 1% common partnership price to be paid
by affiliates of Chartwell Investments at the Closing. The terms and conditions
of the Option were set forth in an Option/SAR Agreement mutually agreed upon
prior to the Closing which provided among other things that the Option shall
become exercisable with respect to 25% thereof on each of December 31, 1997,
1998, 1999 and 2000 unless there is a Change of Control (as defined below) of
the Company, in which case the Option shall immediately become exercisable with
respect to 100% thereof. This Agreement shall have no effect with respect to
such Options and notwithstanding any other provision contained herein, the terms
and conditions of such Options will be governed under the agreements setting
forth such terms and conditions as they existed prior to the date hereof;
provided, that, Executive's right to put his interests in the Company to the
- -------- ----
Company for Fair Market Value (as defined below) shall exist (if permitted under
the Company's existing debt instruments) upon his termination of employment by
the Company without Cause (as defined below) or upon Executive's termination of
employment for Good Reason (as defined below). For purposes of this Agreement,
Fair Market Value means the value determined by a nationally recognized
investment banker selected by the Company (the "Company Appraiser") unless
Executive disagrees with such valuation, in which event the Fair Market Value
means the average of the values determined by the Company Appraiser and a
nationally recognized investment banker selected by Executive.
(c) Incentive Compensation.
----------------------
(i) Beginning with calendar year 1999, Executive shall
annually be eligible to receive a bonus (the "Bonus") pursuant to a
schedule to be mutually agreed upon between the Company and Executive;
provided, that, the amount of such Bonus and the performance criteria
-------- ----
relating thereto shall be no less favorable than those set forth on
Schedule A hereof.
2
<PAGE>
(ii) Each Bonus shall be paid 10 days following the rendering of
audited financial statements for the relevant calendar year (the "Payment
Date").
(d) Car Allowance. The Company will provide Executive with an
-------------
automobile allowance of at least $800 per month in accordance with the Company's
policies and procedures now in force or as such policies and procedures may be
modified with respect to all senior executive officers of the Company.
(e) Expenses. The Company shall promptly reimburse Executive for:
--------
(i) All reasonable business expenses upon the presentation of
reasonably itemized statements of such expenses in accordance with the
Company's policies and procedures now in force or as such policies and
procedures may be modified with respect to all senior executive officers of
the Company;
(ii) Customary expenses (other than points) associated with
selling one of Executive's houses in Arizona; and
(iii) A tax "gross-up amount" with respect to the item in
Section 5(e)(ii) above to the extent necessary to make the Executive whole
with respect thereto.
(f) Vacation.
--------
(i) Executive shall be entitled to four (4) weeks vacation
per year;
(ii) Unused vacation time may be carried forward from one
year to the next; and
(iii) Upon the termination of the Employment Period or non-
renewal of this Agreement, Executive shall be entitled to receive
compensation for all earned but unused vacation days to the extent
permitted by the Company's then current policy with respect to all senior
executive officers of the Company, with the exception that the Executive
shall be allowed to carry forward and receive compensation upon termination
of up to four weeks of unused vacation from the previous year (i.e. be paid
---
on termination a maximum of eight weeks of unused vacation upon
termination.)
(g) Services Furnished. During the Employment Period, the Company
------------------
shall furnish Executive with office space, stenographic and secretarial
assistance and such other facilities and services comparable to those provided
to the Company's other senior executive officers.
(h) Welfare, Pension and Incentive Benefit Plan. During the
-------------------------------------------
Employment Period, Executive (and his spouse and dependents to the extent
provided therein) shall be entitled to participate in and be covered under all
the welfare benefit plans or programs maintained by the Company from time to
time for the benefit of its senior executives including, without limitation, the
executive medical program, and all medical, hospitalization, dental, disability,
accidental death and dismemberment and travel accident insurance plans and
programs. In addition, during the Employment Period, Executive shall be eligible
to participate in all pension, retirement,
3
<PAGE>
savings and other employee benefit plans and programs maintained from time to
time by the Company for the benefit of its senior executives.
(i) Other Benefits. During the Employment Period, the Company shall
--------------
provide Executive with the benefits described below:
(i) The Company shall pay Executive's portable life and
disability insurance;
(ii) Executive shall participate in any other Company equity
incentive plan adopted by the Company during the term of this Agreement;
(iii) Tax preparation and financial planning assistance up
to a maximum of $5,000 value per year; and
(iv) Membership dues for membership at a country club of
Executive's choosing in an amount not to exceed $5,000 annually.
6. Termination. Executive's employment hereunder shall terminate upon
-----------
the expiration of the Employment Period and may be terminated during the
Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon
-----
his death.
(b) Disability. If, as a result of Executive's incapacity due to
----------
physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an entire period of four (4) months or more
during any six (6) consecutive month period, and within thirty (30) days after
written Notice of Termination is given after such six (6) month period,
Executive shall not have returned to the substantial performance of his duties
on a fulltime basis, the Company shall have the right to terminate Executive's
employment hereunder for "Disability", and such termination in and of itself
shall not be, nor shall it be deemed to be, a breach of this Agreement.
(c) Cause. The Company shall have the right to terminate Executive's
-----
employment for Cause, and such termination in and of itself shall not be, nor
shall it be deemed to be, a breach of this Agreement. For purposes of this
Agreement, the Company shall have "Cause" to terminate Executive's employment
upon Executive's:
(i) Conviction of, or plea of guilty or nolo contendere to, a
felony; or
(ii) Continued failure to use reasonable best efforts to
substantially perform his duties hereunder (other than such failure
resulting from Executive's incapacity due to physical or mental illness or
subsequent to the issuance of a Notice of Termination by Executive for Good
Reason) after demand for substantial performance is delivered by the
Company in writing that specifically identifies the manner in which the
Company believes Executive has not used reasonable best efforts to
substantially perform his duties; or
4
<PAGE>
(iii) Misconduct (including, but not limited to, a breach of
the provisions of Section 10) that is materially economically injurious to
the Company or to any entity in control of, controlled by or under common
control with the Company ("Affiliates").
Cause shall not exist under paragraph (ii) or (iii) above unless and until the
Company has delivered to Executive a copy of a resolution duly adopted by a
majority of the Board (excluding Executive for purposes of determining such
majority) at a meeting of the Board called and held for such purpose (after
reasonable (but in no event less than thirty (30) days) notice to Executive and
an opportunity for Executive, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, Executive was
guilty of the conduct set forth in paragraph (ii) or (iii) and specifying the
particulars thereof in detail. This Section 6(c) shall not prevent Executive
from challenging in any court of competent jurisdiction the Board's
determination that Cause exists or that Executive has failed to cure any act (or
failure to act) that purportedly formed the basis for the Board's determination.
(d) Good Reason. Executive may terminate his employment for "Good
-----------
Reason" within one hundred and twenty (120) days after Executive has actual
knowledge of the occurrence, without the written consent of Executive, of one of
the following events that has not been cured within thirty (30) days after
written notice thereof has been given by Executive to the Company:
(i) The failure of Executive to be appointed to the position set
forth in Section 3;
(ii) The assignment to Executive of duties materially and
adversely inconsistent with Executive's status as President and Chief
Financial Officer of the Company or a material and adverse alteration in
the nature of Executive's duties and/or responsibilities, reporting
obligations, titles or authority;
(iii) A reduction by the Company in Executive's Base Salary or a
failure by the Company to pay any such amounts when due;
(iv) Any purported termination of Executive's employment for
Cause which is not effected pursuant to the procedures of Section 6(c) (and
for purposes of this Agreement, no such purported termination shall be
effective);
(v) The Company's material breach of the Option/SAR Agreement;
(vi) The Company's failure to provide the benefits set forth
in Section 5 or the failure of the Company to substantially provide any
material employee benefits due to be provided to Executive (other than any
such failure not inconsistent with any express provisions contained herein
which failure affects all senior executive officers);
(vii) The Company's failure to provide in all material respects
the indemnification set forth in Section 11 of this Agreement; or
5
<PAGE>
(viii) A termination of employment by Executive for any
reason or no reason that occurs within ninety (90) days following the first
anniversary of a Change in Control.
Executive's right to terminate his employment hereunder for Good Reason shall
not be affected by his incapacity due to physical or mental illness.
Executive's continued employment during the one hundred and twenty (120) day
period referred to above in this paragraph (d) shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
(e) Without Cause. The Company shall have the right to terminate
-------------
Executive's employment hereunder without Cause by providing Executive with a
Notice of Termination sixty (60) days prior to the date of termination of
employment, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement.
(f) Without Good Reason. Executive shall have the right to terminate
-------------------
his employment hereunder without Good Reason by providing the Company with a
Notice of Termination sixty (60) days prior to the date of termination of
employment, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement.
For purposes of this Agreement, a "Change in Control" of the Company means any
person, other than the partners of January 30, 1997 (the "Closing") acquiring
more than 50% of the common partnership interests in the Company, or Petro
Holdings GP Corporation and Petro Holdings LP Corporation transferring more than
50% of their equity interests in the Company held as of the Closing to an
unrelated third party, or the replacement of the Company's Chief Executive
Officer other than pursuant to Section 6.5 of the Third Amended and Restated
Limited Partnership Agreement of the Company (the "Partnership Agreement").
7. Termination Procedure.
---------------------
(a) Notice of Termination. Any termination of Executive's employment
---------------------
by the Company or by Executive during the Employment Period (other than
termination pursuant to Section 6(a)) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 14. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
(b) Date of Termination. "Date of Termination" shall mean (i) if
-------------------
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 6(b), thirty (30)
days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability. In the event
--------------------------------------------------
Executive is disabled or his employment terminates during the Employment Period,
the
6
<PAGE>
Company shall provide Executive with the payments and benefits set forth below.
Executive acknowledges and agrees that the payments set forth in this Section 8
constitute liquidated damages for termination of his employment during the
Employment Period.
(a) Termination by the Company without Cause or by Executive for Good
-----------------------------------------------------------------
Reason, or because of the Company's failure to renew the Agreement pursuant to
- ------------------------------------------------------------------------------
Section 2.
- ---------
(i) If Executive's employment is terminated by the Company
without Cause or by Executive for Good Reason, the Company shall pay to
Executive (A) his Base Salary and accrued vacation pay through the Date of
Termination, as soon as practicable following the Date of Termination, and
(B) an amount equal to three (3) times Executive's then current Base
Salary, payable in a lump sum within ten (10) days after the Date of
Termination, or as soon as practicable thereafter; or
(ii) If Executive's employment is terminated because of the
Company's failure to renew the Agreement pursuant to Section 2, the Company
shall pay to Executive (A) his Base Salary and accrued vacation pay through
a date to be mutually agreed on by the Company and the Executive (the
"Mutually Agreed Termination Date"), as soon as practicable following the
Mutually Agreed Termination Date, and (B) an amount equal to two (2) times
Executive's then current Base Salary, payable in a lump sum within ten (10)
days after the Mutually Agreed Termination Date, or as soon as practicable
thereafter; and
(iii) If Executive's employment is terminated such that
Section 8(a)(i) or Section 8(a)(ii) shall apply, then the Company shall
maintain in full force and effect, for the continued benefit of Executive,
his spouse and his dependents for a period of twelve (12) months following
the Date of Termination the medical, hospitalization, dental, and life
insurance programs in which Executive, his spouse and his dependents were
participating immediately prior to the Date of Termination at the level in
effect and upon substantially the same terms and conditions (including,
without limitation, contributions required by Executive for such benefits)
as existed immediately prior to the Date of Termination, provided, that, if
-------- ----
Executive, his spouse or his dependents cannot continue to participate in
the Company programs providing such benefits, the Company shall arrange to
provide Executive, his spouse and his dependents with the economic
equivalent of such benefits which they otherwise would have been entitled
to receive under such plans and programs ("Continued Benefits"), provided,
--------
that, such Continued Benefits shall terminate on the date or dates
----
Executive receives equivalent coverage and benefits, without waiting period
or pre-existing condition limitations, under the plans and programs of a
subsequent employer (such coverage and benefits to be determined on a
coverage by coverage or benefit by benefit, basis); and
(iv) The Company shall reimburse Executive pursuant to
Section 5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment; and
7
<PAGE>
(v) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company; and
(vi) Executive shall be entitled to the Bonus, determined in
accordance with Section 5(c), for the year in which employment is
terminated that Executive would have received had he remained employed
through the Payment Date for such Bonus, pro rated to the Date of
Termination.
(b) Cause or By Executive Without Good Reason. If Executive's
-----------------------------------------
employment is terminated by the Company for Cause or by Executive (other than
for Good Reason):
(i) The Company shall pay Executive his Base Salary and, to the
extent required by law or the Company's vacation policy, his accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination; and
(ii) The Company shall reimburse Executive pursuant to
Section 5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment, unless such termination resulted from a
misappropriation of Company funds; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(c) Disability. During any period that Executive fails to perform his
----------
duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), Executive shall continue to receive his full Base Salary
set forth in Section 5(a) until his employment is terminated pursuant to Section
6(b); provided, however, that Executive's Base Salary shall be off-set on a
-------- -------
dollar for dollar basis for each dollar Executive receives from Company provided
disability insurance benefits. In the event Executive's employment is terminated
for Disability pursuant to Section 6(b):
(i) The Company shall pay to Executive his Base Salary and
accrued vacation pay through the Date of Termination, as soon as
practicable following the Date of Termination, provided, however, that
-------- -------
Executive's Base Salary shall be off-set on a dollar for dollar basis for
each dollar Executive receives from Company provided disability insurance
benefits; and
(ii) The Company shall reimburse Executive pursuant to Section
5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with the
terms and provisions of any agreements, plans or programs of the Company.
(d) Death. If Executive's employment is terminated by his death:
-----
8
<PAGE>
(i) The Company shall pay in a lump sum to Executive's
beneficiary, legal representative(s) or estate, as the case may be,
Executive's Base Salary through the Date of Termination and Executive's
beneficiary, legal representatives or estate shall be entitled to the
Bonus, determined in accordance with Section 5(c), for the year in which
employment is terminated that Executive would have received had he remained
employed through the Payment Date for such Bonus, pro-rated to the Date of
Termination; and
(ii) The Company shall reimburse Executive's beneficiary, legal
representative(s), or estate, as the case may be, pursuant to Section 5(e),
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive's beneficiary(ies), legal representative(s) or
estate, as the case may be, shall be entitled to any other rights,
compensation and benefits as may be due to any such persons or estate in
accordance with the terms and provisions of any agreements, plans or
programs of the Company.
(e) Certain Additional Payments By the Company. In the event of a
------------------------------------------
Change of Control, if the Company is unable to satisfy the exemption for small
business corporations, as set forth in Section 280G(b)(5) of the Internal
Revenue Code of 1986, as amended (the "Code") and the applicable regulations
thereunder, and amounts payable under this Agreement constitute "excess
parachute payments" under Section 280G(b) of the Code and applicable
regulations, the following shall apply:
(i) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment, award, benefit or
distribution (or any acceleration of any payment, award, benefit or
distribution) by the Company or any entity which effectuates a change in
control to or for the benefit of Executive (the "Payments") would be
subject to the excise tax imposed by Section 4999 of the Code, or any
interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Company
shall pay to Executive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by Executive of all taxes (including any
Excise Tax) imposed upon the Gross-Up Payment, Executive retains an amount
of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon
the Payments and (y) the product of any deductions disallowed because of
the inclusion of the Gross-Up Payment in Executive's adjusted gross income
and the highest applicable marginal rate of federal income taxation for the
calendar year in which the Gross-Up Payment is to be made. For purposes of
determining the amount of the Gross-Up Payment, Executive shall be deemed
to (i) pay federal income taxes at the highest marginal rates of federal
income taxes at the highest marginal rate of taxation for the calendar year
in which the Gross-Up Payment is to be made, (ii) pay applicable state and
local income taxes at the highest marginal rate of taxation for the
calendar year in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes and (iii) have otherwise allowable
deductions for federal income tax purposes at least equal to those which
could be disallowed because of the inclusion of the Gross-Up Payment in
9
<PAGE>
Executive's adjusted gross income. Notwithstanding the foregoing provisions
of this Section 8(e)(i), if it shall be determined that Executive is
entitled to a Gross-Up Payment, but that the Payments would not be subject
to the Excise Tax if the Payments were reduced by an amount that is less
than 10% of the portion of the Payments that would be treated as "parachute
payments" under Section 280G of the Code, then the amounts payable to
Executive under this Agreement shall be reduced (but not below zero) to the
maximum amount that could be paid to Executive without giving rise to the
Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made
to Executive. The reduction of the amounts payable hereunder, if
applicable, shall be made by reducing first the payments under Section
8(a)(i) or 8(a)(ii), as the case may be, unless an alternative method of
reduction is elected by Executive. For purposes of reducing the Payments to
the Safe Harbor Cap, only amounts payable under this Agreement (and no
other Payments) shall be reduced. If the reduction of the amounts payable
hereunder would not result in a reduction of the Payments to the Safe
Harbor Cap, no amounts payable under this Agreement shall be reduced
pursuant to this provision.
(ii) Subject to the provisions of Section 8(e)(i), all
determinations required to be made under this Section 8(e), including
whether and when a Gross-Up Payment is required, the amount of such Gross-
Up Payment and the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that is
retained by the Company as of the date immediately prior to the Change in
Control (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and Executive within fifteen (15) business
days of the receipt of notice from the Company or Executive that there has
been a Payment, or such earlier time as is requested by the Company
(collectively, the "Determination"). In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, Executive may appoint another nationally
recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm
shall be borne solely by the Company and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the
performance of the services hereunder. The Gross-Up Payment under this
Section 8(e) with respect to any Payments made to Executive shall be made
no later than thirty (30) days following such Payment. If the Accounting
Firm determines that no Excise Tax is payable by Executive, it shall
furnish Executive with a written opinion to such effect, and to the effect
that failure to report the Excise Tax, if any, on Executive's applicable
federal income tax return will not result in the imposition of a negligence
or similar penalty. In the event the Accounting Firm determineds that the
Payments shall be reduced to the Safe Harbor Cap, it shall furnish
Executive with a written opinion to such effect. The Determination by the
Accounting Firm shall be binding upon the Company and Executive.
(iii) As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the Determination, it is possible
that Gross-Up Payments which will not have been made by the Company should
have been made ("Underpayment") or Gross-Up Payments are made by the
Company which should not have been made ("Overpayment"), consistent with
the calculations required to be made hereunder. In the
10
<PAGE>
event that Executive thereafter is required to make payment of any Excise
Tax or additional Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment
(together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code) shall be promptly paid by the Company to or for the benefit of
Executive. In the event the amount of the Gross-Up Payment exceeds the
amount necessary to reimburse Executive for his Excise Tax, the Accounting
Firm shall determine the amount of the Overpayment that has been made and
any such Overpayment (together with interest at the rate provided in
Section 1274(b)(2) of the Code) shall be promptly paid by Executive (to the
extent he has received a refund if the applicable Excise Tax has been paid
to the Internal Revenue Service) to or for the benefit of the Company.
Executive shall cooperate, to the extent his expenses are reimbursed by the
Company, with any reasonable requests by the Company in connection with any
conteest or disputes with the Internal Revenue Service in connection with
the Excise Tax.
9. Mitigation. Executive shall not be required to mitigate amounts
----------
payable under this Agreement by seeking other employment or otherwise, and there
shall be no offset against amounts due Executive under this Agreement on account
of subsequent employment except as specifically provided herein.
10. Confidential Information, Ownership of Documents, Non-Competition.
-----------------------------------------------------------------
(a) Confidential Information. Executive shall hold in a fiduciary
------------------------
capacity for the benefit of the Company all trade secrets and confidential
information, knowledge or data relating to the Company and its businesses and
investments, which shall have been obtained by Executive during Executive's
employment by the Company and which is not generally available public knowledge
(other than by acts by Executive in violation of this Agreement). Except as may
be required or appropriate in connection with his carrying out his duties under
this Agreement, Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or any legal process, or as is
necessary in connection with any adversarial proceeding against the Company (in
which case Executive shall use his reasonable best efforts in cooperating with
the Company in obtaining a protective order against disclosure by a court of
competent jurisdiction), communicate or divulge any such trade secrets,
information, knowledge or data to anyone other than the Company and those
designated by the Company or on behalf of the Company in the furtherance of its
business or to perform duties hereunder.
(b) Removal of Documents: Rights to Product. All records, files,
----------------------------------------
drawings, documents, models, equipment, and the like relating to the Company's
business, which Executive has control over shall not be removed from the
Company's premises without its written consent, unless such removal is in the
furtherance of the Company's business or is in connection with Executive's
carrying out his duties under this Agreement and, if so removed, shall be
returned to the Company promptly after termination of Executive's employment
hereunder, or otherwise promptly after removal if such removal occurs following
termination of employment. Executive shall assign to the Company all rights to
trade secrets and other products relating to the Company's business developed by
him alone or in conjunction with others at any time while employed by the
Company.
11
<PAGE>
(c) Non-Competition. During the employment of Executive with the
---------------
Company pursuant to this Agreement and during any time within (i) a three year
period, if Executive receives the compensation provided for in Section 8(a)(i),
(ii) a two year period, if Executive receives the compensation provided for in
Section 8(a)(ii), or (iii) a one year period, if Executive's employment is
terminated for any other reason, after the date of his termination of employment
in accordance with this Agreement, Executive agrees that without the Company's
prior written consent, which may be withheld in its absolute discretion, he will
not, except as otherwise permitted in the Partnership Agreement, enter into, be
engaged or interested in, as a principal, stockholder, director, trustee,
partner, officer, agent, employee, consultant, independent contractor, or
otherwise, any business or undertaking which directly compete with the truck
stop business of the Company, its affiliates or their successors within any
county where any of the Company, its affiliates, or their successors are doing
business, or has made definite plans for and has taken steps preparatory to
doing business; provided, however, that Employee's ownership of five percent
-------- ------- ----
(5%) or less of the capital stock of a public company that competes with
the Company shall not be prohibited by this covenant.
(d) Non-Solicitation. During the employment of Executive with the
----------------
Company pursuant to this Agreement and during any time within (i) a three year
period, if Executive receives the compensation provided for in Section 8(a)(i),
(ii) a two year period, if Executive receives the compensation provided for in
Section 8(a)(ii), or (iii) a one year period, if Executive's employment is
terminated for any other reason, after the date of his termination of employment
in accordance with this Agreement, Executive agrees that without the Company's
prior written consent, which may be withheld in its absolute discretion, he will
not, except as otherwise permitted in the Partnership Agreement, (A) call upon
any person who is, at that time, an employee of the Company, any of its
affiliates or their successors in a managerial capacity for the purpose or with
the intent of enticing such employee away from or out of the employ of the
Company, any of its affiliates or their successors, or (B) solicit business from
any person or entity which is at that time a customer of the Company, any of its
affiliates or their successors.
(e) Injunctive Relief. In the event of a breach or threatened breach
-----------------
of this Section 10, Executive agrees that the Company shall be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, Executive acknowledging that damages would be
inadequate and insufficient.
(f) Continuing Operation. Except as specifically provided in this
--------------------
Section 10, the termination of Executive's employment or of this Agreement shall
have no effect on the continuing operation of this Section 10.
(g) Reformation. In the event that any of the provisions of this
-----------
Section 10 are not enforceable in accordance with their terms, Executive and the
Company agree that such Section shall be reformed to make such Section
enforceable in a manner which provides the Company the maximum rights permitted
by law.
11. Indemnification.
---------------
(a) General. The Company shall, to the extent provided in the
-------
Partnership Agreement, and to the maximum extent permitted by law, indemnify and
hold harmless
12
<PAGE>
Executive from any and all losses, damages, claims or expenses that may be
asserted against Executive at any time in connection with his services for the
Company, his employment hereunder or that may otherwise derive from Executive's
employment as contemplated hereby.
(b) Insurance. The Company may, but shall not be required to,
---------
maintain such insurance for the protection of its officers and directors as is
appropriate for entities engaged in the Company's business.
12. Legal Fees and Expenses. If any contest or dispute shall arise
-----------------------
between the Company and Executive regarding any provision of this Agreement, the
Company shall reimburse Executive for all legal fees and expenses reasonably
incurred by Executive in connection with such contest or dispute, but only if
Executive is successful in respect of substantially all of Executive's claims
brought and pursued in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the resolution of
such contest or dispute (whether or not appealed) to the extent the Company
receives reasonable written evidence of such fees and expenses.
13. Successors: Binding Agreement.
-------------------------------
(a) Company's Successors. No rights or obligations of the Company
--------------------
under this Agreement may be assigned or transferred except that the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as herein before defined and any successor to
its business and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) Executive's Successors. No rights or obligations of Executive
----------------------
under this Agreement may be assigned or transferred by Executive other than his
rights to payments or benefits hereunder, which may be transferred only by will
or the laws of descent and distribution. Upon Executive's death, this Agreement
and all rights of Executive hereunder shall inure to the benefit of and be
enforceable by Executive's beneficiary or beneficiaries, personal or legal
representatives, or estate, to the extent any such person succeeds to
Executive's interests under this Agreement. Executive shall be entitled to
select and change a beneficiary or beneficiaries to receive any benefit or
compensation payable hereunder following Executive's death by giving the Company
written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary(ies), estate or
other legal representative(s). If Executive should die following his Date of
Termination while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts unless otherwise provided herein shall be
paid in accordance with the terms of this Agreement to such person or persons so
appointed in writing by Executive, or otherwise to his legal representative(s)
or estate.
13
<PAGE>
14. Notice. For the purposes of this Agreement, notices, demands and all
------
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered either personally or by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
Larry Zine
6080 Surety Drive
El Paso, Texas
79905
If to the Company:
Petro Stopping Centers, L.P.
Attention: General Counsel
6080 Surety Drive
El Paso, Texas
79905
with a copy to:
Andrew L. Gaines
Akin, Gump, Strauss, Hauer & Feld
590 Madison Avenue
New York, New York 10022-4616
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be amended,
-------------
modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time 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 similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The respective rights
and obligations of the parties hereunder of this Agreement shall survive
Executive's termination of employment and the termination of this Agreement to
the extent necessary for the intended preservation of such rights and
obligations.
16. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14
<PAGE>
17. Entire Agreement. This Agreement, set forth the entire agreement of
----------------
the parties hereto in respect of the subject matter contained herein and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of such
subject matter. Except as otherwise provided herein, any prior agreement of the
parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled, including, but not limited to, the Employment
Agreement, by and between the Company and Executive, dated as of December 15,
1996.
18. Withholding. All payments hereunder shall be subject to any required
-----------
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
19. Noncontravention. The Company represents that the Company is not
----------------
prevented from entering into, or performing this Agreement by the terms of any
law, order, rule or regulation, its by-laws or declaration of trust, or any
agreement to which it is a party, other than which would not have a material
adverse effect on the Company's ability to enter into or perform this Agreement.
20. Section Headings. The section headings in this Employment Agreement
----------------
are for convenience of reference only, and they form no part of this Agreement
and shall not affect its interpretation.
21. Severability. If this Agreement or any portion thereof is, or the
------------
transactions contemplated hereby are, found to be inconsistent or contrary to
any valid applicable laws or official orders, rules and regulations, the
inconsistent or contrary provision shall be null and void and such laws, orders,
rules and regulations shall control and, as so modified, this Agreement shall
continue in full force and effect; provided, however, that nothing herein
-------- -------
contained shall be construed as a waiver of any right to question or contest any
such law, order, rule or regulation in any forum having jurisdiction.
22. Governing Law. The provisions of this Agreement shall be construed in
-------------
accordance with the laws of the State of Texas without regard to its conflict of
law principles.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
PETRO STOPPING CENTERS, L.P.
By:________________________________________
___________________________________________
Larry Zine
16
<PAGE>
SCHEDULE A
Incentive Compensation.
- ----------------------
(a) The Bonus shall be paid as a percent of Base Salary (as defined in
Section 5(a) of the Employment Agreement), based upon the achievements of Target
EBITDA, as provided in accordance with the following table:
- --------------------------------------------------------------------------------
TARGET EBITDA BONUS
- --------------------------------------------------------------------------------
90% 20%
- --------------------------------------------------------------------------------
95% 40%
- --------------------------------------------------------------------------------
100% 60%
- --------------------------------------------------------------------------------
105% 90%
- --------------------------------------------------------------------------------
110% 120%
- --------------------------------------------------------------------------------
In accordance with the above table, if EBITDA achieved for any calendar year
exceeds 90% Target EBITDA, but is less than 100% Target EBITDA, the Bonus shall
be such percentage of Base Salary between 20% and 60%, calculated on a straight-
line basis, as corresponds to the relative achievement of EBITDA, with 20%
corresponding to 90% Target EBITDA and 60% corresponding to 100% Target EBITDA.
If EBITDA achieved for any calendar year exceeds 100% Target EBITDA, but is less
than 110% Target EBITDA, the Bonus shall be such percentage of Base Salary
between 60% and 120%, calculated on a straight-line basis, as corresponds to the
relative achievement of EBITDA, with 60% corresponding to 100% Target EBITDA and
120% corresponding to 110% Target EBITDA. Notwithstanding the foregoing, if
greater than 110% Target EBITDA is achieved, the Board shall award an additional
Bonus beyond the formula Bonus provided above, in an amount that it shall
determine in its sole discretion.
(b) Target EBITDA shall be established annually by the Board, or, at the
discretion of the Board, by the Compensation Committee and in either event, with
the concurrence of Executive as to the amount of Target EBITDA thereby
established. In the event of an acquisition, disposition or other similar
extraordinary corporate event which would significantly alter the Target EBITDA
established for that year, the parties shall negotiate in good faith to set new
levels of Target EBITDA.
17
<PAGE>
Exhibit 10.60
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of March 1 1999, by and between Petro Stopping
Centers, L.P., a Delaware limited partnership (the "Company") and Evan Brudahl
("Executive").
IN CONSIDERATION of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive and
----------
Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
2. Term. The period of employment of Executive by the Company
----
hereunder (the "Employment Period") shall commence on April 1, 1999 (the
"Commencement Date") and shall end on the last date of the fourth calendar year
following the Commencement Date. The Employment Period may be sooner terminated
by either party in accordance with Section 6 of this Agreement.
3. Position and Duties. During the Employment Period, Executive's
-------------------
duties and responsibilities shall be consistent with the position of Senior Vice
President of Operations or with a similar position of equivalent responsibility
and shall include those that are assigned to Executive by the Chief Executive
Officer or President of the Company during the Employment Period.
Notwithstanding the foregoing, if the individual serving as President of the
Company, as of the date hereof (the "Current President"), ceases to serve in
such capacity during the Employment Period and another individual (other than
Executive) is selected to serve in that capacity, then Executive shall promptly
be promoted to the position of Executive Vice President and shall have such
duties and responsibilities as are customary for someone of that position.
Executive shall devote substantially all of his working time, attention and
energies during normal business hours (other than absences due to illness or
vacation) to the performance of his duties for the Company.
4. Place of Performance. The principal place of employment of
--------------------
Executive shall be at the Company's principal executive offices in El Paso,
Texas or at such other place as the Board of Directors of the Company (the
"Board") shall determine the principal executive offices to be.
5. Compensation and Related Matters.
--------------------------------
(a) Base Salary. During the Employment Period, the Company shall pay
-----------
Executive a base salary at the rate of not less than $189,600 per year ("Base
Salary"). Executive's Base Salary shall be paid in approximately equal
installments in accordance with the Company's customary payroll practices.
Executive's Base Salary shall be subject to annual review by the compensation
committee of the Board for possible increase. If Executive's Base Salary is
increased by the Company, such increased Base Salary shall then constitute the
Base
<PAGE>
Salary for all purposes of this Agreement. Executive's Base Salary shall not be
decreased at any time during the Employment Period without his direct written
consent.
(b) Equity.
------
(i) Prior to the date hereof, Executive received options to
purchase common partnership interests of the Company ("Options") under
terms and conditions as set forth in the option agreement(s) by and between
the Company and Executive (the "Option Agreement"). Except as set forth is
clause (ii) below, this Agreement shall have no effect with respect to such
Options and the terms and conditions of such Options will be governed under
the Option Agreement.
(ii) If James A. Cardwell (the "Cardwell") receives a bona
fide offer from a third party to transfer any of his interests in the
Company (the "Offered Units") which Cardwell desires to accept, then
Cardwell must first give notice in writing to such effect (a "Tag-Along
Notice") to Executive. The Tag-Along Notice shall set forth the name and
address of the proposed purchaser, the number of Offered Units Cardwell
desires to sell, the purchase price per unit, and any other material terms
and conditions of the third party offer. Upon receipt of the Tag-Along
Notice, Executive shall have the right, exercisable by written notice to
Cardwell within thirty (30) days after receipt of the Tag-Along Notice, to
elect to participate in the proposed sale of the Offered Units to the third
party. If Executive so elects, he shall have the right to sell in the
proposed sale that number of units owned by him equal to the product
obtained by multiplying (A) the number of units owned by Executive by (B) a
fraction, the numerator of which is the number of units to be sold by
Cardwell in the proposed sale and the denominator of which is the number of
units owned by Cardwell. Such sale shall be made at the highest price per
unit and on the same terms and conditions specified in the Tag-Along
Notice. Failure of the Executive to respond within such 30-day period shall
be deemed an election by Executive not to participate in the proposed sale.
Notwithstanding any other provision contained herein, Executive
acknowledges and agrees that the duties and obligations set forth in this
clause (ii) are that of Cardwell and Executive, and the Company shall have
no liability with respect to any of the acts (or failures to act) that may
occur under this clause (ii).
(c) Signing Bonus. Upon execution of this agreement, Executive shall
-------------
be entitled to a bonus (the "Signing Bonus") of twenty-five thousand dollars
($25,000). The Company shall pay to the Executive an additional amount such that
the net amount retained by the Executive, after deduction of any federal, state
or local tax, shall be equal to twenty-five thousand dollars ($25,000). The
Signing Bonus will be paid in a lump sum upon execution of this Agreement or as
soon as practicable thereafter.
(d) Incentive Compensation.
----------------------
(i) Beginning with calendar year 1999, Executive shall annually
be eligible to receive a bonus (the "Bonus") pursuant to a schedule to be
mutually agreed upon between the Company and Executive; provided, that, the
-------- ----
amount of such Bonus and
2
<PAGE>
the performance criteria relating thereto shall be no less
favorable than those set forth on Schedule A hereof.
(ii) Each Bonus shall be paid 10 days following the rendering of
audited financial statements for the relevant calendar year (the "Payment
Date").
(e) Expenses. The Company shall promptly reimburse Executive for all
--------
reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company.
(f) Vacation. Executive shall be entitled to four (4) weeks vacation
--------
per year for every year during the Employment Period.
(g) Welfare, Pension and Incentive Benefit Plan. During the Employment
-------------------------------------------
Period, Executive shall be entitled to participate in and be covered under all
the welfare benefit plans or programs maintained by the Company from time to
time for the benefit of its senior executives, including, without limitation,
the executive medical program, and all medical, hospitalization, dental,
disability, accidental death and dismemberment and travel accident insurance
plans and programs In addition, during the Employment Period, Executive shall be
eligible to participate in all pension, retirement, savings and other employee
benefit plans and programs maintained from time to time by the Company for the
benefit of its senior executives. Notwithstanding the foregoing, the Company
will provide a matching contribution of 50% of the first 4% of Executive's
compensation contributed to the Company's deferred compensation plan for senior
executive officers of the Company.
(h) Country Club. During the Employment Period, the Company shall pay
------------
Executive's membership dues for membership at a country club of Executive's
choosing in an amount not to exceed $4,000 per year.
(i) Additional Equity Compensation. Executive shall participate in any
------------------------------
other Company equity incentive plan consistent with his position that may be
adopted by the Company during the term of this Agreement;
(j) Disability Insurance. The Company shall provide Executive with
--------------------
long-term disability insurance coverage with benefits at a rate of 66-2/3% of
Base Salary through age sixty-five (65), less any disability benefits paid under
any group long-term disability plan of the Company.
6. Termination. Executive's employment hereunder shall terminate upon
-----------
the expiration of the Employment Period and may be terminated during the
Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his
-----
death.
(b) Disability. If, as a result of Executive's incapacity due to
----------
physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an
3
<PAGE>
entire period of four (4) months or more during any six (6) consecutive month
period, and within thirty (30) days after written Notice of Termination is given
after such six (6) month period, Executive shall not have returned to the
substantial performance of his duties on a fulltime basis, the Company shall
have the right to terminate Executive's employment hereunder for "Disability",
and such termination in and of itself shall not be, nor shall it be deemed to
be, a breach of this Agreement.
(c) Cause. The Company shall have the right to terminate Executive's
-----
employment for Cause, and such termination in and of itself shall not be, nor
shall it be deemed to be, a breach of this Agreement. For purposes of this
Agreement, the Company shall have "Cause" to terminate Executive's employment
upon Executive's:
(i) Conviction of, or plea of guilty or nolo contendere to,
a felony; or
(ii) Willful and continued failure to use reasonable best
efforts to substantially perform his duties hereunder or to devote
substantially all of his working time, attention and energies during normal
business hours (other than absences due to illness or vacation) to the
performance of his duties hereunder (other than such failure resulting from
Executive's incapacity due to physical or mental illness or subsequent to
the issuance of a Notice of Termination by Executive for Good Reason) after
demand for substantial performance is delivered by the Company in writing
that specifically identifies the manner in which the Company believes
Executive has not used reasonable best efforts to substantially perform his
duties and Executive has not cured such failure to use reasonable best
efforts to substantially perform his duties within thirty (30) days of
receipt of the Company's written demand; or
(iii) Misconduct (including, but not limited to, a breach of the
provisions of Section 10) that is materially economically injurious to the
Company or to any entity in control of, controlled by or under common
control with the Company ("Affiliates").
(d) Good Reason. Executive may terminate his employment for "Good
-----------
Reason" within one hundred and twenty (120) days after Executive has actual
knowledge of the occurrence, without the written consent of Executive, of one
of the following events that has not been cured within thirty (30) days after
written notice thereof has been given by Executive to the Company:
(i) A reduction by the Company in Executive's Base Salary or a
failure by the Company to pay any such amounts when due;
(ii) The failure of the Company to substantially provide any
material employee benefits or incentive compensation due to be provided to
Executive (other than any such failure not inconsistent with any express
provisions contained herein which failure affects all senior executive
officers);
(iii) The Company's failure to provide in all material respects
the indemnification set forth in Section 11 of this Agreement;
4
<PAGE>
(iv) A termination of employment by Executive for any reason or
no reason that occurs within ninety (90) days following the first
anniversary of a Change in Control;
(v) The failure of Executive to be appointed to the position
set forth in Section 3 or the assignment to Executive of duties materially
and adversely inconsistent with Executive's status as Senior Vice President
of Operations of the Company (or Executive Vice President of the Company,
if he is then serving in such capacity as provided for in Section 3 hereof)
or a material and adverse alteration in the nature of Executive's duties
and/or responsibilities, reporting obligations, titles, or authority; or
(vi) If the Current President ceases to serve in such capacity
and another individual (other than Executive), who is an employee of the
Company as of the date of this Agreement, is appointed to the position of
President of the Company.
Executive's right to terminate his employment hereunder for Good Reason shall
not be affected by his incapacity due to physical or mental illness.
Executive's continued employment during the one hundred and twenty (120) day
period referred to above in this paragraph (d) shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
(e) Without Cause. The Company shall have the right to terminate
-------------
Executive's employment hereunder without Cause by providing Executive with a
Notice of Termination sixty (60) days prior to the date of termination of
employment, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement.
(f) Without Good Reason. Executive shall have the right to terminate
-------------------
his employment hereunder without Good Reason by providing the Company with a
Notice of Termination sixty (60) days prior to the date of termination of
employment, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement.
For purposes of this Agreement, a "Change in Control" of the Company means any
person, other than the partners as of January 30, 1997 (the "Closing") acquiring
more than 50% of the common partnership interests in the Company, or Petro
Holdings GP Corporation and Petro Holdings LP Corporation transferring more than
50% of their equity interests in the Company held as of the Closing to an
unrelated third party.
7. Termination Procedure.
---------------------
(a) Notice of Termination. Any termination of Executive's employment
---------------------
by the Company or by Executive during the Employment Period (other than
termination pursuant to Section 6(a)) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 14. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
5
<PAGE>
(b) Date of Termination. "Date of Termination" shall mean (i) if
-------------------
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 6(b), thirty (30)
days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability. In the event
--------------------------------------------------
Executive is disabled or his employment terminates during the Employment Period,
the Company shall provide Executive with the payments and benefits set forth
below. Executive acknowledges and agrees that the payments set forth in this
Section 8 constitute liquidated damages for termination of his employment during
the Employment Period.
(a) Termination by the Company without Cause or by Executive for Good
-----------------------------------------------------------------
Reason or failure by the Company to negotiate in good faith to renew the
- ------------------------------------------------------------------------
Agreement upon its expiration.
- -----------------------------
(i) If Executive's employment is terminated by the Company without
Cause or by Executive for Good Reason, the Company shall pay to Executive
(A) his Base Salary and accrued vacation pay through the Date of
Termination, as soon as practicable following the Date of Termination; (B)
an amount equal to two (2) times Executive's then current Base Salary,
payable in a lump sum within ten (10) days after the Date of Termination,
or as soon as practicable thereafter; and (C) fifty thousand dollars
($50,000), payable in a lump sum within ten (10) days after the Date of
Termination, or as soon as practicable thereafter; or
(ii) If the Company fails to negotiate in good faith with
Executive to renew this Agreement upon its expiration and Executive's
employment is terminated because of such failure by the Company, then
Company shall pay to Executive (A) his Base Salary and accrued vacation pay
through the Date of Termination, as soon as practicable following a date to
be mutually agreed upon between the Company and Executive (the "Mutually
Agreed Termination Date"); (B) an amount equal to one (1) times Executive's
then current Base Salary, payable in a lump sum within ten (10) days after
the Mutual Agreed Termination Date, or as soon as practicable thereafter;
and (c) fifty thousand dollars ($50,000), payable in a lump sum within ten
(10) days after the Mutually Agreed Termination Date, or as soon as
practicable thereafter; and
(iii) If Executive's employment is terminated such that Section
8(a)(i) or Section 8(a)(ii) shall apply, then the Company shall maintain in
full force and effect, for the continued benefit of Executive, his spouse
and his dependents for a period of twelve (12) months following the Date of
Termination the medical, hospitalization, dental, and life insurance
programs in which Executive, his spouse and his dependents were
participating immediately prior to the Date of Termination at the level in
effect and upon substantially the same terms and conditions (including,
without limitation, contributions required by Executive for such benefits)
as existed immediately prior to the Date of Termination, provided, that, if
--------------
Executive, his spouse or his dependents cannot continue to
participate in the Company programs providing such benefits, the Company
6
<PAGE>
shall arrange to provide Executive, his spouse and his dependents with the
economic equivalent of such benefits which they otherwise would have been
entitled to receive under such plans and programs ("Continued Benefits"),
provided, that, such Continued Benefits shall terminate on the date or
-------- ----
dates Executive receives equivalent coverage and benefits, without waiting
period or pre-existing condition limitations, under the plans and programs
of a subsequent employer (such coverage and benefits to be determined on a
coverage by coverage or benefit by benefit, basis); and
(iv) The Company shall reimburse Executive pursuant to Section
5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(v) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company; and
(vi) Executive shall be entitled to the Bonus, determined in
accordance with Section 5(d), for the year in which employment is
terminated that Executive would have received had he remained employed
through the Payment Date for such Bonus, pro rated to the Date of
Termination.
(b) Cause or By Executive Without Good Reason. If Executive's
-----------------------------------------
employment is terminated by the Company for Cause or by Executive (other than
for Good Reason):
(i) The Company shall pay Executive his Base Salary and, to the
extent required by law or the Company's vacation policy, his accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination; and
(ii) The Company shall reimburse Executive pursuant to Section
5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment, unless such termination resulted from a
misappropriation of Company funds; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(c) Disability. During any period that Executive fails to perform his
----------
duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), Executive shall continue to receive his full Base Salary
set forth in Section 5(a) until his employment is terminated pursuant to Section
6(b), provided, however, that Executive's Base Salary shall be off-set on a
-------- -------
dollar for dollar basis for each dollar Executive receives from Company provided
disability benefits. In the event Executive's employment is terminated for
Disability pursuant to Section 6(b):
(i) The Company shall pay to Executive his Base Salary and accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination, provided, however, that Executive's Base
-------- -------
Salary shall be off-set on a
7
<PAGE>
dollar for dollar basis for each dollar Executive receives
from Company provided disability benefits; and
(ii) The Company shall reimburse Executive pursuant to Section
5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(d) Death. If Executive's employment is terminated by his death:
-----
(i) The Company shall reimburse Executive's beneficiary(ies),
legal representative(s), or estate, as the case may be, pursuant to Section
5(e), for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(ii) The Company shall pay in a lump sum to Executive's
beneficiary(ies), legal representatives or estate, as the case may be,
Executive's Base Salary through the Date of Termination and Executive's
beneficiary(ies), legal representative(s) or estate shall be entitled to
the Bonus, determined in accordance with Section 5(d), for the year in
which employment is terminated that Executive would have received had he
remained employed through the Payment Date for such Bonus, pro-rated to the
Date of Termination; and
(iii) The Company shall pay Executive's beneficiary(ies), legal
representative(s), or estate, as the case may be, a death benefit equal to
two (2) times his Base Salary; provided, that, such amount shall be off-set
-------- ----
on a dollar for dollar basis (but not below zero) for each dollar
Executive's beneficiary(ies), legal representatives, or estate receive from
Company provided life insurance benefits covering Executive's life; and
(iv) Executive's beneficiary(ies), legal representative(s) or
estate, as the case may be, shall be entitled to any other rights,
compensation and benefits as may be due to any such persons or estate in
accordance with the terms and provisions of any agreements, plans or
programs of the Company.
(e) Certain Additional Payments By the Company. In the event of a
--- ------------------------------------------
Change of Control, if the Company is unable to satisfy the exemption for small
business corporations, as set forth in Section 280G(b)(5) of the Internal
Revenue Code of 1986, as amended (the "Code") and the applicable regulations
thereunder, and amounts payable under this Agreement constitute "excess
parachute payments" under Section 280G(b) of the Code and applicable
regulations, the following shall apply:
(i) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment, award, benefit or
distribution (or any acceleration of any payment, award, benefit or
distribution) by the Company or any entity which effectuates a change in
control to or for the benefit of Executive (the "Payments")
8
<PAGE>
would be subject to the excise tax imposed by Section 4999 of the Code, or
any interest or penalties are incurred by Executive with respect to such
excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then the
Company shall pay to Executive an additional payment (a "Gross-Up Payment")
in an amount such that after payment by Executive of all taxes (including
any Excise Tax) imposed upon the Gross-Up Payment, Executive retains an
amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax
imposed upon the Payments and (y) the product of any deductions disallowed
because of the inclusion of the Gross-Up Payment in Executive's adjusted
gross income and the highest applicable marginal rate of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made.
For purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to (i) pay federal income taxes at the highest marginal
rates of federal income taxes at the highest marginal rate of taxation for
the calendar year in which the Gross-Up Payment is to be made, (ii) pay
applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be made,
net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes and (iii) have
otherwise allowable deductions for federal income tax purposes at least
equal to those which could be disallowed because of the inclusion of the
Gross-Up Payment in Executive's adjusted gross income. Notwithstanding the
foregoing provisions of this Section 8(e)(i), if it shall be determined
that Executive is entitled to a Gross-Up Payment, but that the Payments
would not be subject to the Excise Tax if the Payments were reduced by an
amount that is less than 20% of the portion of the Payments that would be
treated as "parachute payments" under Section 280G of the Code, then the
amounts payable to Executive under this Agreement shall be reduced (but not
below zero) to the maximum amount that could be paid to Executive without
giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up
Payment shall be made to Executive. The reduction of the amounts payable
hereunder, if applicable, shall be made by reducing first the payments
under Section 8(a)(i) or Section 8(a)(ii), as the case may be, unless an
alternative method of reduction is elected by Executive. For purposes of
reducing the Payments to the Safe Harbor Cap, only amounts payable under
this Agreement (and no other Payments) shall be reduced. If the reduction
of the amounts payable hereunder would not result in a reduction of the
Payments to the Safe Harbor Cap, no amounts payable under this Agreement
shall be reduced pursuant to this provision.
(ii) Subject to the provisions of Section 8(e)(i), all
determinations required to be made under this Section 8(e), including
whether and when a Gross-Up Payment is required, the amount of such Gross-
Up Payment and the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that is
retained by the Company as of the date immediately prior to the Change in
Control (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and Executive within fifteen (15) business
days of the receipt of notice from the Company or Executive that there has
been a Payment, or such earlier time as is requested by the Company
(collectively, the "Determination"). In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, Executive may appoint another nationally
recognized public accounting firm to make the determinations required
hereunder (which accounting
9
<PAGE>
firm shall then be referred to as the Accounting Firm hereunder). All fees
and expenses of the Accounting Firm shall be borne solely by the Company
and the Company shall enter into any agreement requested by the Accounting
Firm in connection with the performance of the services hereunder. The
Gross-Up Payment under this Section 8(e) with respect to any Payments made
to Executive shall be made no later than thirty (30) days following such
Payment. If the Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with a written opinion to such
effect, and to the effect that failure to report the Excise Tax, if any, on
Executive's applicable federal income tax return will not result in the
imposition of a negligence or similar penalty. In the event the Accounting
Firm determineds that the Payments shall be reduced to the Safe Harbor Cap,
it shall furnish Executive with a written opinion to such effect. The
Determination by the Accounting Firm shall be binding upon the Company and
Executive.
(iii) As a result of the uncertainty in the application of Section
4999 of the Code at the time of the Determination, it is possible that
Gross-Up Payments which will not have been made by the Company should have
been made ("Underpayment") or Gross-Up Payments are made by the Company
which should not have been made ("Overpayment"), consistent with the
calculations required to be made hereunder. In the event that Executive
thereafter is required to make payment of any Excise Tax or additional
Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall
be promptly paid by the Company to or for the benefit of Executive. In the
event the amount of the Gross-Up Payment exceeds the amount necessary to
reimburse Executive for his Excise Tax, the Accounting Firm shall determine
the amount of the Overpayment that has been made and any such Overpayment
(together with interest at the rate provided in Section 1274(b)(2) of the
Code) shall be promptly paid by Executive (to the extent he has received a
refund if the applicable Excise Tax has been paid to the Internal Revenue
Service) to or for the benefit of the Company. Executive shall cooperate,
to the extent his expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contest or
disputes with the Internal Revenue Service in connection with the Excise
Tax.
9. Mitigation. Executive shall not be required to mitigate amounts
----------
payable under this Agreement by seeking other employment or otherwise, and there
shall be no offset against amounts due Executive under this Agreement on account
of subsequent employment except as specifically provided herein.
10. Confidential Information, Ownership of Documents, Non-Competition.
-----------------------------------------------------------------
(a) Confidential Information. Executive shall hold in a fiduciary
------------------------
capacity for the benefit of the Company all trade secrets and confidential
information, knowledge or data relating to the Company and its businesses and
investments, which shall have been obtained by Executive during Executive's
employment by the Company and which is not generally available public knowledge
(other than by acts by Executive in violation of this Agreement). Except as may
be required or appropriate in connection with his carrying out his duties under
this
10
<PAGE>
Agreement, Executive shall not, without the prior written consent of the Company
or as may otherwise be required by law or any legal process, or as is necessary
in connection with any adversarial proceeding against the Company (in which case
Executive shall use his reasonable best efforts in cooperating with the Company
in obtaining a protective order against disclosure by a court of competent
jurisdiction), communicate or divulge any such trade secrets, information,
knowledge or data to anyone other than the Company and those designated by the
Company or on behalf of the Company in the furtherance of its business or to
perform duties hereunder.
(b) Removal of Documents: Rights to Product. All records, files,
---------------------------------------
drawings, documents, models, equipment, and the like relating to the Company's
business, which Executive has control over shall not be removed from the
Company's premises without its written consent, unless such removal is in the
furtherance of the Company's business or is in connection with Executive's
carrying out his duties under this Agreement and, if so removed, shall be
returned to the Company promptly after termination of Executive's employment
hereunder, or otherwise promptly after removal if such removal occurs following
termination of employment. Executive shall assign to the Company all rights to
trade secrets and other products relating to the Company's business developed by
him alone or in conjunction with others at any time while employed by the
Company.
(c) Non-Competition. During the employment of Executive with the
---------------
Company pursuant to this Agreement and during any time within (I) a two year
period, if Executive receives the compensation provided for in Section 8(a)(i)
or (II) a one year period, if Executive's employment is terminated for any other
reason, including, but not limited to, as a result of a failure by the Company
to negotiate in good faith to renew the Agreement upon its expiration, after the
date of his termination of employment in accordance with this Agreement,
Executive agrees that without the Company's prior written consent, which may be
withheld in its absolute discretion, he will not, except as otherwise permitted
in the Partnership Agreement (as defined below), enter into, be engaged or
interested in, as a principal, stockholder, director, trustee, partner, officer,
agent, employee, consultant, independent contractor, or otherwise, any business
or undertaking which directly competes with the truck stop business in its
entirety, (i.e., it is acknowledged that if Executive undertakes employment
- -
with a component business of the truck stop business, that such employment will
not constitute competitive activity) of the Company, its affiliates or their
successors within any county where any of the Company, its affiliates, or their
successors are doing business, or has made definite plans for and has taken
steps preparatory to doing business, provided, however, that Employee's
-------- -------
ownership of five percent (5%) or less of the capital stock of a public
company that competes with the Company shall not be prohibited by this covenant.
(d) Non-Solicitation. During the employment of Executive with the
----------------
Company pursuant to this Agreement and during any time within (I) a two year
period, if Executive receives the compensation provided for in Section 8(a) (i)
or (II) a one year period, if Executive's employment is terminated for any other
reason, including, but not limited to, as a result of a failure by the Company
to negotiate in good faith to renew the Agreement upon its expiration, after the
date of his termination of employment in accordance with this Agreement,
Executive agrees that without the Company's prior written consent, which may be
withheld in its absolute discretion, he will not, except as otherwise permitted
in the Partnership Agreement, (A)
11
<PAGE>
call upon any person who is, at that time, an employee of the Company, any of
its affiliates or their successors in a managerial capacity for the purpose or
with the intent of enticing such employee away from or out of the employ of the
Company, any of its affiliates or their successors, or (B) solicit business from
any person or entity which is at that time a customer of the Company, any of its
affiliates or their successors.
(e) Injunctive Relief. In the event of a breach or threatened breach
-----------------
of this Section 10, Executive agrees that the Company shall be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, Executive acknowledging that damages would be
inadequate and insufficient.
(f) Continuing Operation. Except as specifically provided in this
--------------------
Section 10, the termination of Executive's employment or of this Agreement shall
have no effect on the continuing operation of this Section 10.
(g) Reformation. In the event that any of the provisions of this
-----------
Section 10 are not enforceable in accordance with their terms, Executive and the
Company agree that such Section shall be reformed to make such Section
enforceable in a manner which provides the Company the maximum rights permitted
by law.
11. Indemnification.
---------------
(a) General. The Company shall, to the extent provided in the Third
-------
Amended and Restated Limited Partnership Agreement of the Company dated as of
the Closing (the "Partnership Agreement"), and to the maximum extent permitted
by law, indemnify and hold harmless Executive from any and all losses, damages,
claims or expenses that may be asserted against Executive at any time in
connection with his services for the Company, his employment hereunder or that
may otherwise derive from Executive's employment as contemplated hereby.
(b) Insurance. The Company may, but shall not be required to,
---------
maintain such insurance for the protection of its officers and directors as is
appropriate for entities engaged in the Company's business.
12. Legal Fees and Expenses. If any contest or dispute shall arise
-----------------------
between the Company and Executive regarding any provision of this Agreement, the
Company shall reimburse Executive for all legal fees and expenses reasonably
incurred by Executive in connection with such contest or dispute, but only if
Executive is successful in respect of substantially all of Executive's claims
brought and pursued in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the resolution of
such contest or dispute (whether or not appealed) to the extent the Company
receives reasonable written evidence of such fees and expenses.
13. Successors: Binding Agreement.
-----------------------------
(a) Company's Successors. No rights or obligations of the Company
--------------------
under this Agreement may be assigned or transferred except that the Company
will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or
12
<PAGE>
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as herein before defined and any successor to its business
and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) Executive's Successors. No rights or obligations of Executive
----------------------
under this Agreement may be assigned or transferred by Executive other than
his rights to payments or benefits hereunder, which may be transferred only
by will or the laws of descent and distribution. Upon Executive's death,
this Agreement and all rights of Executive hereunder shall inure to the
benefit of and be enforceable by Executive's beneficiary or beneficiaries,
personal or legal representatives, or estate, to the extent any such person
succeeds to Executive's interests under this Agreement. Executive shall be
entitled to select and change a beneficiary or beneficiaries to receive any
benefit or compensation payable hereunder following Executive's death by
giving the Company written notice thereof. In the event of Executive's
death or a judicial determination of his incompetence, reference in this
Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary(ies), estate or other legal representative(s). If Executive
should die following his Date of Termination while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts
unless otherwise provided herein shall be paid in accordance with the terms
of this Agreement to such person or persons so appointed in writing by
Executive, or otherwise to his legal representative(s) or estate.
14. Notice. For the purposes of this Agreement, notices, demands
------
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered either personally or
by United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
Evan Brudahl
6080 Surety Drive
El Paso, Texas
79905
If to the Company:
Petro Stopping Centers, L.P.
Attention: General Counsel
6080 Surety Drive
El Paso, Texas
79905
with a copy to:
Andrew L. Gaines
13
<PAGE>
Akin, Gump, Strauss, Hauer & Feld
590 Madison Avenue
New York, New York 10022-4616
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be amended,
-------------
modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time 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 similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The respective rights
and obligations of the parties hereunder of this Agreement shall survive
Executive's termination of employment and the termination of this Agreement to
the extent necessary for the intended preservation of such rights and
obligations.
16. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. Entire Agreement. This Agreement, set forth the entire agreement
----------------
the parties hereto in respect of the subject matter contained herein and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of such
subject matter. Except as otherwise provided herein, any prior agreement of the
parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled.
18. Withholding. All payments hereunder shall be subject to any
-----------
required withholding of Federal, state and local taxes pursuant to any
applicable law or regulation.
19. Noncontravention. The Company represents that the Company is
----------------
not prevented from entering into, or performing this Agreement by the terms of
any law, order, rule or regulation, its by-laws or declaration of trust, or any
agreement to which it is a party, other than which would not have a material
adverse effect on the Company's ability to enter into or perform this Agreement.
20. Section Headings. The section headings in this Employment
----------------
Agreement are for convenience of reference only, and they form no part of this
Agreement and shall not affect its interpretation.
21. Severability. If this Agreement or any portion thereof is, or
------------
the transactions contemplated hereby are, found to be inconsistent or contrary
to any valid applicable laws or official orders, rules and regulations, the
inconsistent or contrary provision shall be null and void and such laws, orders,
rules and regulations shall control and, as so modified, this Agreement shall
continue in full force and effect; provided, however, that nothing herein
-------- -------
contained shall be
14
<PAGE>
construed as a waiver of any right to question or contest any
such law, order, rule or regulation in any forum having jurisdiction.
22. Governing Law. The provisions of this Agreement shall be
-------------
construed in accordance with the laws of the State of Texas without regard to
its conflict of law principles.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
PETRO STOPPING CENTERS, L.P.
By:
--------------------------------
------------------------------------
Evan Brudahl
With respect to Section 5(b)(ii) only:
- ---------------------------------
James A. Cardwell
16
<PAGE>
SCHEDULE A
Incentive Compensation.
- ----------------------
(a) The Bonus shall be paid as a percent of Base Salary (as defined in Section
5(a) of the Employment Agreement), based upon the achievements of Target
EBITDA, as provided in accordance with the following table:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TARGET EBITDA BONUS
------------- -----
- --------------------------------------------------------------------------------
<S> <C>
90% 20%
- --------------------------------------------------------------------------------
95% 40%
- --------------------------------------------------------------------------------
100% 60%
- --------------------------------------------------------------------------------
105% 90%
- --------------------------------------------------------------------------------
110% 120%
- --------------------------------------------------------------------------------
</TABLE>
In accordance with the above table, if EBITDA achieved for any calendar year
exceeds 90% Target EBITDA, but is less than 100% Target EBITDA, the Bonus shall
be such percentage of Base Salary between 20% and 60%, calculated on a straight-
line basis, as corresponds to the relative achievement of EBITDA, with 20%
corresponding to 90% Target EBITDA and 60% corresponding to 100% Target EBITDA.
If EBITDA achieved for any calendar year exceeds 100% Target EBITDA, but is less
than 110% Target EBITDA, the Bonus shall be such percentage of Base Salary
between 60% and 120%, calculated on a straight-line basis, as corresponds to the
relative achievement of EBITDA, with 60% corresponding to 100% Target EBITDA and
120% corresponding to 110% Target EBITDA. Notwithstanding the foregoing, if
greater than 110% Target EBITDA is achieved, the Board shall award an additional
Bonus beyond the formula Bonus provided above, in an amount that it shall
determine in its sole discretion.
(b) Target EBITDA shall be established annually by the Board, or, at
the discretion of the Board, by the Compensation Committee and in either event,
with the concurrence of Executive as to the amount of Target EBITDA thereby
established. In the event of an acquisition, disposition or other similar
extraordinary corporate event which would significantly alter the Target EBITDA
established for that year, the parties shall negotiate in good faith to set new
levels of Target EBITDA
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 11,762
<SECURITIES> 0
<RECEIVABLES> 12,626
<ALLOWANCES> 726
<INVENTORY> 18,176
<CURRENT-ASSETS> 45,366
<PP&E> 219,049
<DEPRECIATION> 57,057
<TOTAL-ASSETS> 228,394
<CURRENT-LIABILITIES> 49,505
<BONDS> 0<F1>
23,686
0
<COMMON> 0
<OTHER-SE> (19,661)
<TOTAL-LIABILITY-AND-EQUITY> 228,394
<SALES> 0
<TOTAL-REVENUES> 153,573
<CGS> 116,341
<TOTAL-COSTS> 147,836
<OTHER-EXPENSES> 8,090
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 4,962
<INCOME-PRETAX> 775
<INCOME-TAX> 0
<INCOME-CONTINUING> 775
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 775
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>NOT SEPARATELY IDENTIFIED IN THE CURRENT FINANCIAL STATEMENTS OR ACCOMPANYING
NOTES THERETO.
</FN>
</TABLE>
