EXHIBIT 10.29
CHANGE OF CONTROL INCENTIVE BONUS PROGRAM
If prior to the earlier of 10 years from the date of this Agreement or the
vesting of ail shares of Common Stock available for vesting under the Incentive
Stock Option Agreements (the "ISO Agreements") dated July 31, 2000, between
Executive and each of Alon USA Operating, Inc. and Alon Assets, Inc. (each, a
"Parent Company"), and while Executive remains employed pursuant to this
Agreement, or following his termination by the Company without Cause or by
Executive for Good Reason, Xxxx Xxxxxx Oil Company, Ltd. sells, transfers or
otherwise disposes of a majority of the amount of its ownership of the Parent
Companies as of the date of this Agreement to a person not its affiliate in a
transaction that is subject to Section 6 of the Shareholder Agreements of even
date between Executive and each of the Parent Companies, and Executive's actual
and contingent ownership of equity securities of the Parent Companies are
included in such transaction (a "Covered Transaction"), Executive will receive a
bonus upon the closing of the Covered Transaction based upon the implied
valuation given to the Parent Companies which is in excess of the value of
Executive's equity ownership of the Parent Companies, provided that the value
placed upon the Parent Companies, in the aggregate exceeds the amount for the
year of sale specified in the table below. The actual bonus to Executive will be
calculated on the following basis:
Bonus = ((Implied Equity Value of Parent Companies(1) - $20 million) *8%(2)) -
Amount Realized by Executive from Actual and Contingent Ownership(3): If the
amount realized with respect to the Parent Companies in any year does not exceed
the amount specified in the second column of the following table, no bonus will
be payable.
If the Amount Realized by Executive from actual and contingent ownership of the
Parent Companies in a Covered Transaction that occurs on or before July 31, 2003
is less than $3 million, the Executive will receive a cash bonus payment under
this program equal to $3 million minus the amount realized by Executive from
such transaction from actual and contingent ownership of the Parent Companies.
Minimum Equity Value Given
Year of Covered Transaction to Parent Companies
--------------------------- --------------------------
Prior to 7/31/01 $ 30,000,000
8/01/01 to 7/31/02 37,500,000
8/01/02 to 7/31/03 46,875,000
8/01/03 to 7/31/04 58,593,750
8/01/04 to 7/31/05 73,242,187
8/01/05 to 7/31/06 91,552,734
8/01/06 to 7/31/07 114,440,917
----------
(1) Pre tax value of Parent Companies in the transaction to holders of all
equity securities, including amounts paid for subordinated debt (limited
together with equity at inception to $20,000,000) payable to holders of Parent
Company equity securities.
(2) The 8% factor shall be reduced by the percentage of shares of Common Stock
subject to the ISO Agreements that either (i) were vested and exercisable but
not exercised or(ii) had lapsed and were not available for exercise pursuant to
the ISO Agreement.
(3) Represents proceeds to Executive with respect to equity securities owned by
Executive plus the value of contingent securities realized by Executive in such
transaction, such as options issued to Executive.
