RHC HOLDINGS, L.P. LONG-TERM EQUITY APPRECIATION RIGHTS AWARD
Exhibit 10.14
RHC HOLDINGS, L.P.
LONG-TERM EQUITY APPRECIATION RIGHTS AWARD
LONG-TERM EQUITY APPRECIATION RIGHTS AWARD
THIS RIGHTS AWARD (“Agreement”) is entered into as August 25, 2003 (the “Grant Date”) by and
between the Participant and RHC HOLDINGS, L.P., a Texas limited partnership (the “Company”).
WHEREAS, the Company maintains its Long-Term Equity Appreciation Rights Plan (the “Plan”),
which is incorporated into, forms a part of, and is attached hereto as Exhibit A this
Agreement, and the Participant has been selected by the committee administering the Plan (the
“Committee”) to receive an award of Rights under the Plan.
NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant, as follows:
1. Award. This Agreement specifies the terms of the Rights awarded to the Participant
under the Plan. A Rights Award under this Plan shall be in the form of an equity appreciation right
(“Right”) entitling the Participant to receive, with respect to each of his or her Vested Rights,
cash or Notes, at the Company’s option, in an amount equal to the excess of (a) the Fair Market
Value of such Right at the date of exercise over (b) the Issue Price of such Right.
2. Terms of Award. The terms of Rights awarded to the Participant under this
Agreement are as follows:
(a) The “Participant” is Xxxx X. Xxxxx
(b) The “Vesting Date” is June 1, 2003
(c) The number of Rights awarded to Participant is 1,000
(d) The “Issue Price” of each Right is $865.74
(e) The “Exercise Period” for Rights awarded to a Participant under this Agreement
shall be the second quarter of each fiscal year of the Company, subject to the terms and
conditions herein. Exercise of a Right shall not be effective until the Committee receives
written notice of exercise.
(f) The “Fair Market Value” of a Right as of any date shall be Value multiplied by
.001% on the applicable date. “Value” means four times the average annual EBITDA of Western
Refining Company, LP (“Western”) for the prior thirty-six (36) months ended the end of its
fiscal year immediately preceding the date for which the calculation is made plus its Cash
minus its Debt at the end of such fiscal year.
(g) “EBITDA” for any period shall be the sum of Western’s net income (excluding
nonrecurring income or gain), interest expense, taxes on income, depreciation and
amortization (to the extent deducted in the determination of net income and without
duplication).
Other defined terms used in this Agreement are the same as the definitions used in the Plan.
3. Date of Exercise. Subject to the limitations of this Agreement, thirty-three
percent (33.0%) of the total number of Rights awarded to Participant under this Plan shall vest and
become exercisable on each anniversary of the Vesting Date. Unvested Rights shall not vest and
become exercisable on the otherwise applicable Vesting Date if the Participant’s Separation occurs
on or before such Vesting Date. Notwithstanding the foregoing provisions of this Section 3, Rights
awarded under this Agreement shall fully vest and become exercisable as follows:
(a) Upon the Participant’s Separation due to Disability or death.
(b) Upon the date of a Change in Control, if the Participant’s Separation does not
occur on or before the Change in Control.
4. Expiration. Rights awarded under this Agreement shall not be exercisable after the
Company’s close of business on the Expiration Date. The “Expiration Date” shall be earliest to
occur of:
(c) the ten-year anniversary of the Grant Date unless the Committee extends the term of
such Rights;
(d) if the Participant’s Separation occurs by reason of Disability, ninety (90) days
after the date of Separation;
(e) if the Participant’s Separation occurs by reason of death, ninety (90) days after
the date of the Participant’s death; or
(f) if the Participant’s Separation occurs for any reason other than death or
Disability sixty (60) days after the date of Participant’s Separation.
5. Exercise. Rights granted hereby may be exercised by filing a written notice, in
the form attached hereto as Exhibit B, with the General Partner of the Company at its
principal executive headquarters prior to the Company’s close of business on the Expiration Date.
Such notice shall specify the number of Rights hereunder which the Participant elects to exercise.
Upon the exercise of Rights, the Participant shall receive cash or a Note in an amount equal to the
excess of (a) the Fair Market Value of each Vested Right on the date of exercise over (b) the Issue
Price of such Right (the “Company Obligation”). The Note shall not be for more than a ten (10)
year term, bearing interest at the prime rate as reported in the Wall Street Journal from time to
time with principal and interest payments being payable quarterly. The foregoing notwithstanding,
the unpaid Company Obligation shall be paid at the same time of a Change in Control, to the extent
possible, that the selling partners receive consideration for the sale of their interests in the
Company. If at any time the Participant breaches any agreement with the Company or any of its
Affiliates (including without limitation this Agreement or any non-competition agreement or
confidentiality agreement) all obligations of the Company to make payments to the Participant under
this Agreement shall cease and the Participant shall be obligated to return to the Company all
payments made by it hereunder. Notwithstanding the
EQUITY
APPRECIATION RIGHTS PLAN AWARD— Page 2
foregoing, if a payment under the Plan or Note will cause the Company or any of its Affiliates
to violate any provisions of applicable law, their respective organizational documents, or any
agreement to which they are a party, such payment shall be delayed until such time as the payment
can be made. The amount of any payment that is so delayed shall earn interest as provided above
until such time as the payment is made. Such payment shall be made as soon as practicable after the
restriction is removed or otherwise eliminated.
6. Payments. Payments and payment obligations with respect to any Rights granted
under this Plan shall be made only from the general assets of the Company. The Plan shall not be a
“funded” plan for purposes of ERISA or the Code. The Company intends for its obligations under the
Plan to be unfunded, unsecured promises on the part of the Company to pay in the future.
7. Withholding. All distributions of cash under this Agreement are subject to
withholding and the Company shall withhold all applicable taxes with respect to distributions under
this Agreement.
8. Transferability. Except as otherwise provided in this Section 7, each Right
awarded under this Agreement is not transferable other than as provided in Section 8 below.
9. Heirs and Successors. This Agreement shall be binding upon, and inure to the
benefit of, the Company, its Affiliates, and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially
all of the Company’s assets and business. If any Rights awarded to the Participant under this
Agreement have not been exercised or delivered, respectively, at the time of the Participant’s
death, such Rights shall be exercisable by the Designated Beneficiary, and such benefits shall be
delivered to the Designated Beneficiary, in accordance with the provisions of this Agreement and
the Plan. The “Designated Beneficiary” shall be the beneficiary or beneficiaries designated by the
Participant in a writing filed with the Committee in the form attached hereto as Exhibit C,
and at such time as the Committee shall require. If a deceased Participant fails to designate a
beneficiary, or if the Designated Beneficiary does not survive such Participant, any Rights awarded
to such Participant and any benefits distributable to such Participant shall be exercised by or
distributed to the legal representative of the estate of such Participant. If a deceased
Participant designates a beneficiary but the Designated Beneficiary dies before the Designated
Beneficiary’s exercise of all Rights awarded under this Agreement or before the complete
distribution of benefits to the Designated Beneficiary under this Agreement, then any Rights that
would have been exercisable by the Designated Beneficiary shall be exercised by the legal
representative of the estate of the Designated Beneficiary, and any benefits distributable to the
Designated Beneficiary shall be distributed to the legal representative of the estate of the
Designated Beneficiary.
10. Plan Governs. Notwithstanding anything in this Agreement to the contrary, the
terms of this Agreement shall be subject to the terms of the Plan and is subject to all
interpretations, amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan.
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APPRECIATION RIGHTS PLAN AWARD— Page 3
11. Not an Employment or Similar Contract. This Agreement will not confer on the
Participant any right with respect to continuance of employment or other service with the Company
or any of its Affiliates nor will it interfere with or prevent in any way the right of the Company
or any of its Affiliates would otherwise have to terminate or modify the terms of such
Participant’s employment or other service at any time. The foregoing shall apply even if it is
alleged or proven that any such termination was to avoid benefits otherwise available to the
Participant under this Agreement.
12. Notices. Any written notices provided for in this Agreement shall be in writing
and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight
courier, or by postage paid first class mail. Notices sent by mail shall be deemed received three
business days after mailed but in no event later than the date of actual receipt. Notices shall be
directed, if to the Participant, at the Participant’s address indicated by the Company’s records,
or if to the Company, at the Company’s principal executive office.
13. Amendment. This Agreement may be amended by written agreement of the Participant
and the Company, without the consent of any other person.
14. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflict of law provisions of any
state or other jurisdiction.
IN WITNESS WHEREOF, the Participant has executed this Agreement, and the Company has caused
this Agreement to be executed in its name and on its behalf, all as of the Grant Date.
| THE PARTICIPANT: | ||||
| /s/ Xxxx X. Xxxxx
|
||||
| Name: Xxxx X. Xxxxx |
| THE COMPANY: | ||||||
| RHC HOLDINGS, L.P. | ||||||
| By: | ||||||
| WRC Refining Company, its General Partner |
||||||
| By: | /s/ Xxxx Xxxxxx
|
|||||
| Title: President | ||||||
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APPRECIATION RIGHTS PLAN AWARD— Page 4
EXHIBIT A
THE PLAN
EQUITY APPRECIATION RIGHTS PLAN — Page 1
EXHIBIT B
RHC HOLDINGS, L.P.
LONG-TERM EQUITY APPRECIATION RIGHTS PLAN
LONG-TERM EQUITY APPRECIATION RIGHTS PLAN
NOTICE OF EXERCISE
The undersigned hereby elects to exercise the Rights Award as described below:
1. Date on which Rights were awarded to Participant:
2. Number of Rights being exercised:
3. Issue Price of each Right: $
| OPTION HOLDER: | ||||||
| By: | ||||||
| Name: | ||||||
| SSN: | ||||||
| Date: | ||||||
EQUITY
APPRECIATION RIGHTS PLAN EXCERCISE NOTICE— Page 1
EXHIBIT C
RHC HOLDINGS, L.P.
LONG-TERM EQUITY APPRECIATION RIGHTS PLAN
LONG-TERM EQUITY APPRECIATION RIGHTS PLAN
BENEFICIARY DESIGNATION
I wish to designate the following person(s) as my beneficiary(ies) to exercise any outstanding
Rights and to receive any benefits under the RHC Holdings, L.P. Long-Term Equity Appreciation
Rights Plan (the “Plan”) in the event of my death. I reserve the right to change this designation
with the understanding that this designation, and any change thereof, will be effective only upon
delivery of a written statement thereof to RHC Holdings, L.P. The right to exercise my outstanding
Rights and to receive benefits under the Plan will be transferred to my primary beneficiaries who
survive me, and to my secondary beneficiaries who survive me only if none of my primary
beneficiaries survive me.
1. PRIMARY BENEFICIARY
| Name of Beneficiary | Percentage | Relationship |
2. SECONDARY BENEFICIARY
| Name of Beneficiary | Percentage | Relationship |
I acknowledge that execution of this form and delivery thereof to RHC Holdings, L.P. revokes
all prior beneficiary designations I have made with respect to my outstanding awards under the
Plan.
EQUITY
APPRECIATION RIGHTS PLAN BENEFICIARY DESIGNATION— Page 1
