UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM __________TO __________
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Commission file number: 001-32567
ALON USA ENERGY, INC.
(Exact name of Registrant as specified in its charter)
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Delaware
(State of incorporation)
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74-2966572
(I.R.S. Employer Identification No.)
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12700 Park Central Dr., Suite 1600, Dallas, Texas
(Address of principal executive offices)
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75251
(Zip Code)
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Registrant’s telephone number, including area code: (972) 367-3600
Securities registered pursuant to Section 12 (b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value
$0.01 per share
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New York Stock Exchange
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Securities registered pursuant to Section 12 (g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
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No
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
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No
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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
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No
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes
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No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
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No
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The aggregate market value for the registrant’s common stock held by non-affiliates as of June 30, 2016, the last day of the registrant’s most recently completed second fiscal quarter was $201,820,455 based on the closing price of Alon USA Energy, Inc.’s common stock as reported on the New York Stock Exchange of $6.48.
The number of shares of the Registrant’s common stock, par value $0.01 per share, outstanding as of April 21, 2017, was 71,877,464.
EXPLANATORY NOTE
Alon USA Energy, Inc. (the “Company,” “Alon,” “we,” “us,” or “our”) is filing this Amendment No. 1 on Form 10-K/A (“Amendment No. 1”) to amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (“Original Filing”), filed with the U.S. Securities and Exchange Commission (“SEC”) on February 27, 2017. The sole purpose of this Amendment No. 1 is to include the information required by Part III of Form 10-K. This information was previously omitted from the Original Filing in reliance upon General Instruction G(3) to Form 10-K, which permits the information required by Part III of Form 10-K to be incorporated by reference from our definitive proxy statement if such statement is filed with the SEC no later than 120 days after the fiscal year-end covered by the Form 10-K. We are filing this Amendment No. 1 to include information required by Part III of Form 10-K because we may not file a definitive proxy statement containing such information within 120 days after the end of the fiscal year-end covered by the Original Filing. The reference on the cover of the Original Filing to the incorporation by reference to portions of our definitive proxy statement into Part III of the Original Filing is hereby deleted.
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), Part III and exhibits under Part IV, Item 15 of the Original Filing are hereby amended and restated in their entirety. This Amendment No. 1 does not amend, modify, or otherwise update any other information in the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing. In addition, this Amendment No. 1 does not reflect events that may have occurred subsequent to the Original Filing date.
Pursuant to Rule 12b-15 under the Exchange Act, this Amendment No. 1 also contains new certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, which are attached hereto. Because no financial statements are included in this Amendment No. 1 and this Amendment No. 1 does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4, and 5 of the certifications have been omitted.
TABLE OF CONTENTS
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Certain information concerning our executive officers is disclosed under the heading “Business and Properties — Executive Officers of the Registrant” in Items 1. and 2. of our Original Filing, which is incorporated herein by reference.
The Board of Directors
At the date of this Amendment No. 1 to our Annual Report on Form 10-K, the Board of Directors, or the Board, consists of eleven members.
During 2016, the Board held 11 meetings. Each director attended at least 75% of the total number of meetings of the Board and committees on which he or she served. Two of our directors attended Alon’s annual meeting of stockholders held in 2016. Under Alon’s Corporate Governance Guidelines, each director is expected to devote the time necessary to appropriately discharge his or her responsibilities and to rigorously prepare for, and attend and participate in, Board meetings and meetings of Board committees on which he or she serves. Each director is expected to ensure that other commitments do not materially interfere with his or her service on the Board of Alon.
The age, principal occupation, board qualifications and certain other information for each director are set forth below:
Ezra Uzi Yemin
, 48, has served as a director of the Company and was elected Chairman of the Board in May 2015. Mr. Yemin has served as the Chairman of the Board of Delek US Holdings, Inc. (“Delek”) since December 2012, as Delek’s Chief Executive Officer since June 2004 and as Delek’s president and a director since April 2001. Mr. Yemin also served as Delek’s treasurer from April 2001 to November 2003 and as Delek’s secretary from May 2001 to August 2005. Mr. Yemin’s duties with Delek include the formulation of its policies and direction, oversight of its executive officers, and overall responsibility for Delek’s operation and performance. Mr. Yemin has also served as the chairman of the board of directors and chief executive officer of Delek Logistics GP, LLC since April 2012. The Board has concluded that Mr. Yemin’s executive positions within the refining industry and financial expertise qualify him to serve as a member of the Board.
Ilan Cohen
, 58, has served as a director of the Company since May 2014. Mr. Cohen has served as the Chief Executive Officer of Ilan Cohen Investments since 2006. From 2009 until February 2017, Mr. Cohen has also served on the board of Israel Discount Bank and Edmond de Rothschield, Israel, or EDRIS, and currently serves as vice chairman of EDRIS. From 2006 until 2013, Mr. Cohen served as the Executive Chairman and a Partner in Insuline, a medical device company listed on the Tel Aviv Stock Exchange (“TASE”). Mr. Cohen was also the co-founder of POC Management Consulting, and served as its senior partner and CEO from 1985 until 1990, and from 1991 through 2004. From 2004 until 2006, Mr. Cohen worked as the director general in the office of the Prime Minister of Israel. Mr. Cohen holds a B.A. from Tel-Aviv University, where he graduated Cum Laude and an M.B.A. from INSEAD in Fontainebleau, France, with distinction. The Board has concluded that Mr. Cohen’s financial education and expertise, directorship and executive experience, and distinguished government experience qualify him to serve as member of the Board.
Assaf Ginzburg
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has served as a director of the Company since May 2015. Mr. Ginzburg has served as Delek’s Chief Financial Officer since January 2013, a Delek Executive Vice President since May 2009 and as a Delek Vice President since February 2005. Mr. Ginzburg has also served as a member of the board of directors and an Executive Vice President of Delek Logistics GP, LLC since April 2012, and as its Chief Financial Officer since January 2013. Mr. Ginzburg has been a member of the Israel Institute of Certified Public Accountants since 2001. The Board has concluded that Mr. Ginzburg’s executive positions within the refining industry and financial expertise qualify him to serve as a member of the Board.
Frederec Green
, 51, has served as a director of the Company since May 2015. Mr. Green has served as Delek’s Chief Operating Officer since November 2016, a Delek Executive Vice President since May 2009 and as the primary operational officer for Delek’s refining operations from January 2005 until December 2016. Mr. Green has also served as a member of the board of directors and an Executive Vice President of Delek Logistics GP, LLC since April 2012. Mr. Green has more than 25 years of experience in the refining industry, including 14 years at Murphy Oil USA, Inc. where he served as a Senior Vice President during his last six years. Mr. Green has experience ranging from crude oil and feedstock supply, through all aspects of managing a refining business to product trading, transportation and sales. The Board has concluded that Mr. Green’s past executive positions within the refining industry and expertise qualify him to serve as a member of the Board.
Ron W. Haddock
, 76, has served as a director of the Company since December 2000. Mr. Haddock also served as Chairman & CEO of AEI Services, LLC, an international power generation and distribution, and natural gas transmission distribution company since 2003. Mr. Haddock has also served as a director of Petron Corporation, a Philippine oil refining and marketing company, since 2009. From January 1989 to July 2000, Mr. Haddock served as Chief Executive Officer of Fina, Inc. Mr. Haddock also served on the Boards of Safety-Kleen Systems, Inc., a waste management, oil recycling and refining company, from 2003 to 2012, and Trinity Industries, Inc., a diversified transportation, industrial and construction company,
from 2007 to 2013, as well as eight other corporate boards. The Board has concluded that Mr. Haddock’s extensive directorship experience, past executive positions within the refining industry, financial reporting background and expertise qualify him to serve as a member of the Board.
William J. Kacal
, 68, has served as a director of the Company since May 2016. Mr. Kacal currently serves as a director and Chairman of the Audit Committee of U.S. Silica Holdings, Inc., as a director of Integrity Bancshares, Inc., located in Houston, Texas, and its wholly-owned subsidiary, Integrity Bank SSB (“Integrity Bank”), the National Association of Corporate Directors - Texas Tri-Cities Chapter, and Goodwill Industries of Houston (“Goodwill Houston”). Mr. Kacal serves on the Audit Committee of Integrity Bank, and previously served as the Chairman of the Audit Committee of Boy Scouts of America - Sam Houston Area Council, Goodwill Industries International, and Goodwill Houston. Mr. Kacal has over 40 years of accounting and management experience with Deloitte & Touche LLP (“Deloitte”), most recently serving as a partner from 1981 until his retirement in May 2011, and prior to that serving as a member of the audit staff from 1970 to 1981. Mr. Kacal also served as a member of the board of directors of Deloitte from 2004 to May 2011 and as a member of the executive committee from 2004 to 2008. During his time with Deloitte, Mr. Kacal worked extensively with companies in the oil and natural gas industry. Mr. Kacal earned a B.B.A. in Accounting from Texas A&M University, is a licensed Certified Public Accountant in Texas and is a National Association of Corporate Directors (NACD) Board Leadership Fellow. As a result of these and other professional experiences, Mr. Kacal possesses particular knowledge and experience in accounting, finance and capital structure, strategic planning and leadership of complex organizations, and board practices of other entities that strengthen the Board’s collective qualifications, skills and experience.
Zalman Segal
, 80, has served as a director of the Company since July 2005. Dr. Segal is a director of Union Bank Israel, an Israeli bank listed on the TASE, a position he has held since February 2010. Dr. Segal has also served as Chairman of the board of directors of Bank Leumi Romania, a financial services company, from August 2006 through August 2008. Dr. Segal served from 1989 through 2004 as Vice Chairman of the Board of directors of Bank Leumi USA and its subsidiary, Leumi Investment Services, and as a director of Bank Leumi USA from 2005 to 2006. Dr. Segal served from 1989 through 2004 as Chief Executive Officer of Bank Leumi USA, where he was responsible for the commercial banking business of Bank Leumi USA in the Western Hemisphere. The Board has concluded that Dr. Segal’s extensive financial education and expertise, including his PhD in banking and marketing from New York University, combined with his management and directorship experiences in financial and banking companies, qualify him to serve as a member of the Board.
Mark D. Smith
, 49, has served as a director of the Company since May 2015. Mr. Smith has served as Delek’s Executive Vice President since May 2014 and as a Delek Partners’ Executive Vice President since 2014. Prior to 2014, Mr. Smith spent nine years as a Vice President with Tesoro Refining and Marketing and Tesoro Companies, Inc. (collectively “Tesoro”). From March 2010 until May 2014, Mr. Smith served as the Vice President - Development Supply and Logistics where he was responsible for Tesoro’s strategic supply, trading, and logistics activities. From 2008 through March 2010, Mr. Smith served as Vice President - Trading and Risk Management where he led Tesoro’s trading and risk management activities. Prior to 2005, Mr. Smith work for Chevron USA leading their North American physical supply and trading activities. The Board has concluded that Mr. Smith’s past executive positions within the refining industry and expertise qualify him to serve as a member of the Board.
Avigal Soreq
, 39, has served as a director of the Company since May 2015. Mr. Soreq has served as Delek’s Chief Commercial Officer since November 2016. Mr. Soreq joined Delek in October 2011 and has served as a Vice President from December 2012 to August 2015, and Executive Vice President from August 2015 until November 2016. Prior to beginning his work for Delek, Mr. Soreq worked in business development for SunPower Corp., which designs and manufactures high efficiency crystalline silicon photovoltaic cells, roof tiles and solar panels. Prior to joining SunPower Corp., Mr. Soreq worked as a Senior Finance and Business Consultant for Trabelsy & Co. and as a consultant for KPMG in its Tel-Aviv office in the Corporate Finance department. From 1996 to 2004, Mr. Soreq served in the Israeli Air Force in various roles and reached the rank of Major. Mr. Soreq is certified as a Certified Public Accountant in Israel. The Board has concluded that Mr. Soreq’s past executive positions within the refining industry and financial expertise qualify him to serve as a member of the Board.
Franklin R. Wheeler
, 60, has served as a director of the Company since May 2016. Mr. Wheeler has held numerous positions in the refining industry since 1979, including operations, engineer, plant manager, and refinery manager for Texaco. Mr. Wheeler most recently held the titles of Vice President (operations) and Senior Vice President (refining) for Tesoro from 2010 until his retirement in 2014. The Board has concluded that Mr. Wheeler’s past executive positions within the refining industry and expertise qualify him to serve as a member of the Board.
David Wiessman
, 62, served as Executive Chairman of the Company’s Board of Directors from July 2000 until May 2015 and served as President and Chief Executive Officer of the Company from its formation in 2000 until May 2005. Mr. Wiessman has also served as the Chairman of the board of directors of the general partner of Alon USA Partners, LP (the “Partnership”) since August 2012. Mr. Wiessman has over 30 years of oil industry and marketing experience. From 1994 to 2015, Mr. Wiessman served as a director of Alon Israel Oil Company, Ltd., or Alon Israel, and served as its Chief Executive
Officer and President from 1994 to 2014. Mr. Wiessman served as Executive Chairman of the Board of Directors of Alon Blue Square-Israel, Ltd., which is listed on the NYSE and the Tel Aviv Stock Exchange, from 2003 to 2013. Mr. Wiessman is the father of Snir Wiessman, who is also a member of the board of directors of the general partner of the Partnership.
Committees of the Board
The Board has a standing Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. Currently, Messrs. Segal, Haddock, Cohen and Kacal serve on the Audit Committee, Messrs. Haddock and Segal serve on the Compensation Committee, and Messrs. Segal, Haddock and Cohen serve on the Nominating and Corporate Governance Committee.
Audit Committee.
The purposes of the Audit Committee are to assist the Board in its oversight of (i) the integrity of Alon’s financial statements, (ii) Alon’s compliance with legal and regulatory requirements, (iii) the independent auditor’s qualifications and independence, and (iv) the performance of Alon’s internal audit function, as well as to prepare an audit committee report for inclusion in Alon’s annual proxy statement. The Audit Committee met five times during 2016. The Audit Committee Charter, which, among other things, sets forth the Audit Committee’s responsibilities, is available in the “Corporate Governance” section of the “Investors” section of Alon’s website (www.alonusa.com).
The Board has determined that (i) each of Messrs. Segal, Haddock, Cohen and Kacal meet the audit committee independence criteria specified in the rules promulgated by the Securities and Exchange Commission, or SEC, and the NYSE’s listing standards, (ii) each of Messrs. Segal, Haddock, Cohen and Kacal has a basic understanding of finance and accounting and is able to read and understand fundamental financial statements, (iii) each of Messrs. Segal, Haddock, Cohen and Kacal has accounting or related financial management expertise, and (iv) Dr. Segal, the Chairman of the Audit Committee, is an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K.
Compensation Committee.
The purpose of the Compensation Committee is to establish and administer Alon’s policies, programs and procedures for determining compensation for Alon’s executive officers and Board members. The Compensation Committee reviews and reports to the Board on matters related to compensation strategies, policies and programs, including management development, incentive compensation and employee benefit programs. For further information regarding the Compensation Committee’s processes and procedures for consideration of executive compensation, see “Compensation Discussion and Analysis” below.
The Compensation Committee consists of Messrs. Haddock and Segal. The Compensation Committee met seven times during 2016. The Compensation Committee Charter, which, among other things, sets forth Compensation Committee’s responsibilities, is available in the “Corporate Governance” section of the “Investors” section of Alon’s website (www.alonusa.com).
Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance Committee (“NCG Committee”) consists of Messrs. Cohen, Haddock and Segal. The purposes of the NCG Committee are (i) advise the Board and make recommendations regarding appropriate corporate governance practices and assist the Board in implementing those practices; (ii) assist the Board by identifying individuals qualified to become members of the Board, consistent with the criteria developed by the NCG Committee and approved of by the Board, and recommending director nominees to the Board for election at the annual meeting of stockholders or for appointment to fill vacancies on the Board; (iii) recommend to the Board director nominees for each committee; and (iv) lead the Board in the annual performance evaluation of the Board and its overall corporate governance. These responsibilities are set forth in the NCG Committee’s charter, available in the “Corporate Governance” section of the “Investors” section of Alon’s website (www.alonusa.com).
Recommendations for directors that are received from the Company’s stockholders are treated by the NCG Committee equally with recommendations received from any other source; provided, however, that in order for such stockholder recommendations to be considered, the recommendations must comply with the procedures outlined in the Company’s proxy statement for its annual meeting of stockholders.
Corporate Governance Guidelines, Code of Business Conduct and Ethics and Committee Charters
The full texts of Alon’s Corporate Governance Guidelines and Code of Business Conduct and Ethics, as well as the charters for the Audit Committee, Compensation Committee and NCG Committee, are available in the “Corporate Governance” section of the “Investors” section of Alon’s website (www.alonusa.com). Alon intends to post any amendment to or waiver of its Code of Business Conduct and Ethics (to the extent such waiver is applicable to its directors or executive officers) at this location on its website within four days of such amendment or waiver.
Board Leadership Structure
At this time the Board has elected to separate the Chief Executive Officer and Chairman of the Board positions of Alon. While the Board recognizes that these positions have overlapping roles and duties, the Board believes that given the distinctive talents, expertise and experience of Mr. Alan Moret, Alon’s present Interim Chief Executive Officer, and Mr. Yemin, Alon’s present Chairman of the Board, it is advantageous to separate the positions and utilize each in different roles. The Board believes that Mr. Moret’s expertise in the refining and marketing industry and management experience are best utilized in allowing him to focus on strategic and operational decisions affecting Alon’s refining and marketing business as our Chief Executive Officer. Given Mr. Yemin’s experience in energy, marketing and financial markets and in leading other public companies, the Board believes he best serves Alon in a role that allows him to lead the Board and represent stockholder interests as our Chairman of the Board.
Board’s Role in Risk Management
The Board, through the Audit Committee, conducts periodic assessments of the risks facing Alon. As a result of these assessments, the Board determines the appropriate course of action to be taken to mitigate perceived risks. In response to Alon’s exposure to commodity price risk resulting from its significant inventory holdings, the Board established a Risk Management Committee comprised of senior management to oversee inventory risk management and trading activities. The Risk Management Committee acts pursuant to procedures established in Alon’s Risk Management Policy, which was initially approved by the Board. The Risk Management Committee reports quarterly to the Audit Committee regarding risk management positions, including hedging or other risk mitigation steps that have been taken. Alon’s Risk Management Policy is reviewed by the Audit Committee annually and updated as appropriate.
The Board, through the Compensation Committee, considers, in establishing and reviewing Alon’s executive compensation program, whether the program encourages unnecessary or excessive risk taking. The Compensation Committee, in reviewing the current executive compensation program, analyzed Alon’s short- and long-term compensation programs, including the key components of each program, the performance factors for each program, the target awards of each program and the administrative oversight of each program. Based on the foregoing review, the Compensation Committee believes that Alon’s executive compensation program does not encourage unnecessary or excessive risk taking.
Base salaries are fixed in amount and thus do not encourage risk taking. While a portion of the annual cash bonuses paid to the executives focuses on individual performance and contributions and on the financial performance of Alon’s refineries, and such bonus system may encourage the taking of short-term risks, the Compensation Committee believes that the bonus program appropriately balances risk and the desire to focus employees on specific short-term goals important to Alon’s success, and that it does not encourage unnecessary or excessive risk taking. Furthermore, a significant portion of the annual cash bonuses paid to our executives focuses on the achievement of safety and environmental objectives of our refineries, which does not encourage risk taking. The executive officers also receive long-term equity awards that are designed to align executive and stockholder long-term interests by creating a strong and direct link between executive compensation and stockholder return. The Compensation Committee believes that these awards do not encourage unnecessary or excessive risk taking since the ultimate value of the awards is tied to the Company’s stock price.
Based on the foregoing, the Compensation Committee concluded that Alon’s executive compensation program is not reasonably likely to have a material adverse effect on Alon.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act and regulations of the SEC thereunder require Alon’s executive officers and directors and persons who own more than ten percent of Alon’s common stock, as well as certain affiliates of such persons, to file initial reports of ownership and changes in ownership with the SEC. Executive officers, directors and persons owning more than ten percent of Alon’s common stock are required by SEC regulations to furnish Alon with copies of all Section 16(a) reports they file. Based solely on its review of the copies of such reports received by it and written representations that no other reports were required for those persons, Alon believes that, during the year ended December 31, 2016 all filing requirements applicable to its executive officers, directors and owners of more than ten percent of Alon’s common stock were satisfied on a timely basis.
Presiding Director
The NYSE’s listing standards require Alon’s non-management directors to meet at regularly scheduled executive sessions without management. Alon’s non-management directors met four times in such executive sessions in 2016. Dr. Segal presided over each such session.
Communication with Directors
Any stockholder or other interested party who wishes to communicate directly with the Board or any committee thereof, or any member or group of members of the Board or any committee thereof, may do so by writing to the Board or the applicable committee thereof (or one or more named individuals) in care of the Secretary of Alon USA Energy, Inc., 12700 Park Central Dr., Suite 1600, Dallas, Texas 75251. All communications received will be collected by the Secretary of Alon and forwarded to the appropriate director or directors.
ITEM 11. EXECUTIVE COMPENSATION.
Compensation Discussion and Analysis
Introduction
The Compensation Discussion and Analysis provides a description of the objectives of Alon’s executive compensation policies, a description of the Compensation Committee and a discussion of the material elements of the compensation of each of the executive officers listed below, who are referred to as Alon’s named executive officers:
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Name
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Title
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Paul Eisman
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Former President and Chief Executive Officer
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Shai Even
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Senior Vice President and Chief Financial Officer
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Jeff Morris
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Special Advisor; Vice Chairman of the Board of Directors of the general partner of the Partnership
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Jimmy Crosby
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Senior Vice President of Refining
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James Ranspot
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Senior Vice President & General Counsel
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Objectives of Compensation Policies
The objectives of Alon’s compensation policies are to attract, motivate and retain qualified management and personnel who are highly talented while ensuring that executive officers and other employees are compensated in a manner that advances both the short and long-term interests of stockholders. In pursuing these objectives, the Compensation Committee believes that compensation should reward executive officers and other employees for both their personal performance and Alon’s performance. In determining compensation levels for Alon’s executive officers, the Compensation Committee considers the scope of an individual’s responsibilities, external competitiveness of total compensation, an individual’s performance, prior experience and current and prior compensation, the performance of Alon and the attainment of financial and strategic objectives.
Alon’s management provides compensation recommendations to the Compensation Committee; however, the final determination of a compensation package for the named executive officers is made solely by the Compensation Committee. Alon does not currently engage any consultants relating to executive and/or director compensation practices. The Compensation Committee may consider the compensation practices of other companies when making a determination; however, Alon does not benchmark its compensation packages to any particular company or group of companies.
Compensation Program Elements
Alon compensates its employees and named executive officers through a combination of base salary, annual bonuses and awards granted pursuant to the 2005 Incentive Compensation Plan. The Compensation Committee considers each element of Alon’s overall compensation program applicable to an employee or named executive officer when making any decision affecting that employee’s or named executive officer’s compensation. The particular elements of Alon’s compensation program are explained below.
Base Salaries.
Base salary levels are designed to attract and retain highly qualified individuals. Each executive officer is eligible to participate with Alon’s other employees in an annual program for merit increases to the executive’s base salary. Pursuant to this program, each officer’s performance is evaluated annually utilizing a number of factors divided into three categories: (i) individual performance objectives and results, (ii) competencies in core skills and knowledge, and (iii) professional development. Each executive officer reviews his evaluation with the Chief Executive Officer and individualized performance objectives for the following year are established. The Compensation Committee considers the results of these evaluations when determining any increase in base compensation. The precise amount of any increase in base compensation varies based on the executive’s current level of compensation when compared to others in the Company at the same pay grade and the results of the annual evaluation. The Compensation Committee may also consider available information on prevailing compensation levels for executive-level employees at comparable companies in Alon’s industry.
The 2016 salaries of the named executive officers of Alon are reflected in the “Summary Compensation Table,” included below.
During 2016 Messrs. Eisman, Even, Morris, Crosby and Ranspot received a base salary increase as a result of the annual review process. Base salaries for Alon’s named executive officers in 2016 and the amount of base salary increase from 2015 were as follows:
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Name
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Amount of Base
Salary Increase
from 2015
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2016
Base Salary
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Paul Eisman
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$
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10,000
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$
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560,000
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Shai Even
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6,800
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348,300
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Jeff Morris
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3,300
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166,300
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Jimmy Crosby
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6,000
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304,000
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James Ranspot
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6,000
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303,500
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Bonus Plans.
The Board has approved three annual bonus plans pursuant to the 2005 Incentive Compensation Plan (collectively, the “Bonus Plans”). Annual cash bonuses under the Bonus Plans are distributed to eligible employees each year based on the previous year’s performance. Bonuses were paid to certain eligible employees in the second quarter of 2016 based on performance during Alon’s 2015 fiscal year and if bonuses are payable based on performance during Alon’s 2016 fiscal year, we expect such bonuses to be paid in the second quarter of 2017. Each of the Bonus Plans contains the same plan elements, which are described below. Participation in the Bonus Plans is based on the location of each employee as follows: (i) Big Spring refinery employees are eligible to participate in one plan based primarily on the performance of Alon’s Big Spring refinery, (ii) the employees at Alon’s California refineries are eligible to participate in a second plan based primarily on the performance of Alon’s California refineries, and (iii) the employees at the Krotz Springs refinery are eligible to participate in the third plan based primarily on the performance of Alon’s Krotz Springs refinery. Under each of the Bonus Plans, bonus payments are based 33% on meeting or exceeding target reliability measures, 34% on meeting or exceeding target free cash flow measures and 33% on meeting or exceeding target safety and environmental objectives. The bonus potential for Alon’s corporate employees, including the named executive officers, is based on a combination of the bonus plans for Alon’s Big Spring, California and Krotz Springs refineries. Bonus payments are subject to the approval of the Board. The bonus potential for Alon’s named executive officers ranges from 65% to 100% of the respective executive officer’s base salary, as established in each executive officer’s employment agreement or by the Compensation Committee.
The Compensation Committee believes that the Bonus Plans provide motivation for the eligible employees to attain Alon’s financial objectives as well as refinery reliability and environmental and safety objectives, which have been designed to benefit Alon in both the long and short term.
Annual Bonuses.
While the Bonus Plans are the primary means through which the Compensation Committee awards annual incentive compensation, executive officers and key employees may be awarded bonuses outside of the Bonus Plans based on individual performance and contributions. Specifically, the Compensation Committee may award cash bonuses from time to time to recognize exemplary results achieved by employees, including the named executive officers. The amount of any such cash bonus is determined based on the recipient’s pay grade, contribution to the project or result and the benefit to Alon from the recipient’s efforts.
2005 Incentive Compensation Plan.
In July 2005, the Board approved the Alon USA Energy, Inc. 2005 Incentive Compensation Plan, and the stockholders approved such plan at Alon’s 2006 annual meeting of stockholders. In 2010, the Board approved an amendment and restatement to such plan and the stockholders approved such amendment and restatement at Alon’s 2010 annual meeting of stockholders. In 2012, the Board approved a further amendment to such plan and this amendment was approved by the stockholders at Alon’s 2012 annual meeting of stockholders. Alon refers to such plan, as so amended, as the 2005 Incentive Compensation Plan. The 2005 Incentive Compensation Plan is a component of Alon’s overall executive incentive compensation program. The 2005 Incentive Compensation Plan permits the granting of awards in the form of options to purchase common stock, stock appreciation rights, restricted shares of common stock, restricted stock units, performance shares, performance units and senior executive plan bonuses to Alon’s directors, officers and key employees. The Compensation Committee believes that the award of equity-based compensation pursuant to the 2005 Incentive Compensation Plan aligns executive and stockholder long-term interests by creating a strong and direct link between executive compensation and stockholder return.
The Compensation Committee also utilizes equity-based compensation with multi-year vesting periods for purposes of executive officer retention. The specific amount of equity-based grants is determined by the Compensation Committee primarily by reference to an employee’s level of authority within Alon. Typically, all executive officers of the same level receive awards that are comparable in amount. The grant of restricted shares of common stock and similar equity-based awards also allows Alon’s directors, officers and key employees to develop and maintain a long-term ownership position in Alon. The 2005 Incentive Compensation Plan is currently administered, in the case of awards to participants subject to Section 16 of the
Exchange Act, by the Board and, in all other cases, by the Compensation Committee. Subject to the terms of the 2005 Incentive Compensation Plan, the Compensation Committee and the Board have the full authority to select participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the 2005 Incentive Compensation Plan. Awards may be made under the 2005 Incentive Compensation Plan to eligible directors, officers and employees of Alon and its subsidiaries, provided that awards qualifying as incentive stock options, as defined under the Internal Revenue Code of 1986, as amended (“the Code”) may be granted only to employees.
Perquisites.
During 2016, Mr. Even received a vehicle allowance and Messrs. Eisman, Even and Ranspot received reimbursement for a de minimis amount of health club costs. Alon’s use of perquisites as an element of compensation is limited in scope and amount. Alon does not view perquisites as a significant element of compensation but does believe that in certain circumstances they can be used in conjunction with other elements to attract, motivate and retain qualified management and personnel in a competitive environment.
Retirement Benefits.
Retirement benefits to Alon’s senior management, including Alon’s named executive officers, are currently provided through one of Alon’s 401(k) plans and Alon’s pension plan, both of which are available to most Alon employees, and the Alon USA Energy, Inc. Benefits Restoration Plan (“Benefits Restoration Plan”), which provides additional pension benefits to Alon’s highly compensated employees. Non-represented employees, including senior management, are eligible to receive company matching of employee contributions into the 401(k) plan in which they participate of up to 3.0% of the employee’s base salary. Alon’s pension plans and the Benefits Restoration Plan are discussed more fully in the “2016 Pension Benefits” table included below.
Employment Agreements
As discussed more fully below in “Employment Agreements and Change of Control Arrangements,” Alon has entered into employment agreements with each of its named executive officers. Alon’s decision to enter into employment agreements and the terms of those agreements were based on the facts and circumstances at the time and an analysis of competitive market practices.
Methodology of Establishing Compensation Packages
The Compensation Committee does not adhere to any specified formula for determining the apportionment of executive compensation between cash and non-cash awards. The Compensation Committee attempts to design each compensation package to provide incentive to achieve Alon’s performance objectives, appropriately compensate individuals for their experience and contributions and secure the retention of qualified employees. This is accomplished through a combination of the compensation program elements and, in certain instances, through specific incentives not generally available to all Alon employees.
Chief Executive Officer Compensation
The annual compensation of Alon’s Chief Executive Officer is determined by the Compensation Committee based on the compensation principles and programs described above. All cash compensation paid, and equity-based awards granted, to Mr. Eisman in 2016 is reflected in the “Summary Compensation Table” included below.
Stock Ownership Policy
Alon does not require its directors or executive officers to own shares of Alon stock.
Section 162(m)
Under Section 162(m) of the Code, compensation paid to the Chief Executive Officer or any of the other four most highly compensated individuals in excess of $1,000,000 may not be deducted by Alon in determining its taxable income. This deduction limitation does not apply to certain “performance based” compensation. The Board did award non-performance based compensation to Mr. Eisman in excess of $1,000,000 in 2016 as described in footnote 6 to the Summary Compensation Table. The Board may award levels of non-performance based compensation that would exceed $1,000,000 in the future if it determines that such compensation is in the best interest of Alon and its stockholders.
Compensation Committee Interlocks and Insider Participation
Alon’s Compensation Committee consists of Zalman Segal and Ron W. Haddock. Messrs. Segal and Haddock have served on the Board since 2005 and 2000, respectively, and also sit on the Audit Committee and NCG Committee. Mr. Haddock serves as the chairman of the Compensation Committee.
Compensation for Alon’s executive officers is determined by the Compensation Committee.
None of Alon’s executive officers serve as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving as a member of the Board.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is responsible for establishing and administering Alon’s policies, programs and procedures for determining compensation for its executive officers and Board members. The Compensation Committee has reviewed and discussed with management the contents of the Compensation Discussion and Analysis. Based on this review and discussion, all of the members of the Compensation Committee, whose names are listed below, have recommended to the Board that the Compensation Discussion and Analysis be included in this Amendment No. 1 to our Annual Report on Form 10-K.
Members of the Compensation Committee
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Zalman Segal
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Ron W. Haddock
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The foregoing report was submitted by the Compensation Committee and shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18 of the Exchange Act.
Summary Compensation Table
The following table provides a summary of the compensation awarded to, earned by or paid in 2016 to (i) Mr. Eisman, Alon’s former President and Chief Executive Officer and principal executive officer (PEO), (ii) Mr. Even, Alon’s principal financial officer (PFO), and (iii) Messrs. Morris, Crosby and Ranspot, Alon’s three other most highly-compensated executive officers. Alon refers to these five individuals as its named executive officers.
2016 SUMMARY COMPENSATION TABLE
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Name and Principal
Position
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Year
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Salary
($)
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Bonus
($)(1)
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Stock
Awards
($)(2)
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Option
Awards
($)
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Non-Equity
Incentive
Plan
Compensation
($)(3)
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Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(4)
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All Other
Compensation
($)
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Total
($)
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Paul Eisman (5)
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2016
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$
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567,308
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$
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1,952,445
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(6)
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$
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1,195,414
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$
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—
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$
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—
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$
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35,362
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$
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447,300
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(7)
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$
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4,197,829
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Former Chief Executive
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2015
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533,267
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400,000
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1,882,000
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—
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469,764
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64,353
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8,396
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3,357,780
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Officer (PEO)
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2014
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507,664
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—
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11,750
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—
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393,440
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109,693
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220,150
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1,242,697
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Shai Even
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2016
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345,946
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—
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214,399
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—
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—
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96,434
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9,174
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(8)
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665,953
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Senior Vice President
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2015
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338,200
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—
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829,500
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—
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298,235
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(8,624
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)
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9,187
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1,466,498
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and Chief Financial
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2014
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328,622
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—
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755,500
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—
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254,682
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146,557
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8,958
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1,494,319
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Officer (PFO)
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Jeff Morris
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2016
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165,158
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—
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—
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—
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1,172,678
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(9)
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(10,393
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7,950
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(10)
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1,335,393
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Vice Chairman - Alon
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2015
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161,433
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—
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—
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—
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2,085,644
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(300,945
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)
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14,050
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1,960,182
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USA Partners, LP
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2014
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156,868
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—
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—
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—
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1,852,949
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417,040
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19,319
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2,446,176
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Jimmy Crosby (11)
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2016
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301,923
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—
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289,467
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—
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—
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175,582
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7,950
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(12)
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774,922
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Senior Vice President
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2015
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295,100
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—
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805,140
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—
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260,227
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51,605
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7,950
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1,420,022
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of Refining
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2014
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286,699
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—
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523,341
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—
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222,192
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244,899
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7,800
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1,284,931
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James Ranspot (11)
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2016
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301,423
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—
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238,882
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—
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—
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61,952
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8,112
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(13)
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610,369
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Senior Vice President &
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2015
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294,600
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—
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664,440
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—
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259,785
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6,190
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7,950
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1,232,965
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General Counsel
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2014
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286,199
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—
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431,886
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—
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221,804
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92,717
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7,800
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1,040,406
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_______________________________________________________________________________
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(1)
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This column reflects performance based bonuses awarded to the named executive officers for the fiscal year in which such amounts are earned, regardless of when paid.
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(2)
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This column reflects the value of the awards based on aggregate grant date fair value determined in accordance with Financial Accounting Standards Board, Accounting Standard Codification 718,
Stock Compensation
(“FASB ASC Topic 718”) without regard to the effects of estimated forfeitures and does not reflect amounts the named executive officer has actually realized during the fiscal year.
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On May 31, 2016, Alon made a grant of 100,000 shares of restricted stock to Mr. Eisman pursuant to the terms of his employment agreement however, as described below, Mr. Eisman returned those shares to us at our request. Due to SEC reporting rules, we are required to disclose the full value of this award even though the shares were returned and Mr. Eisman received a cash payment (reported in the “Bonus” column of this Summary Compensation Table) instead. Consequently, Mr. Eisman’s 2016 compensation is overstated in this column and the “Total” column with respect to this award by $755,000. The fair market value of this award is based on the closing price of our stock on the date of grant, which was $7.55 per share. See also Note (6) to this Summary Compensation Table.
On May 31, 2016, Alon made a grant of 58,333 shares of restricted stock to Mr. Eisman. The restricted stock was subject to a restriction on transfer and Mr. Eisman was not entitled to receive dividends on, or vote, the restricted stock until the shares vest; however, as described in Note (6) below, Mr. Eisman voluntarily forfeited 8,333 of the shares of restricted stock. Due to SEC reporting rules, we are required to disclose the full value of this award even though the shares were returned and Mr. Eisman received a cash payment (reported in the “Bonus” column of this Summary Compensation Table) instead. Consequently, Mr. Eisman’s 2016 compensation is overstated in this column and the “Total” column with respect to this award by $62,914. The shares of restricted stock fully vested on December 31, 2016. The fair market value of this award is based on the closing price of our stock on the date of grant, which was $7.55 per share. See also Note (6) to this Summary Compensation Table.
On July 14, 2016, Alon made a grant of 32,192 shares of restricted stock to Mr. Even. The restricted stock was subject to a restriction on transfer and Mr. Even was not entitled to receive dividends on, or vote, the restricted stock until the shares vest. The shares of restricted stock fully vested on January 3, 2017. The fair market value of this award is based on the closing price of our stock on the date of grant, which was $6.66 per share.
On August 8, 2016, Alon made grants of 38,340 shares of restricted stock to Mr. Crosby and 31,640 shares of restricted stock to Mr. Ranspot. The restricted stock is subject to a restriction on transfer and the holders are not entitled to receive dividends on, or vote, the restricted stock until the shares vest. One-half of the shares of restricted stock fully vest on the anniversary of the date of grant and the remaining one-half of the shares of restricted stock fully vest on August 6, 2019. The fair market value of this award is based on the closing price of our stock on the date of grant, which was $7.55 per share.
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(3)
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The amounts in this column reflect awards to the named executive officers pursuant to the terms of the Bonus Plans for the fiscal year in which such amounts are earned, regardless of when paid. Amounts awarded under the Bonus Plans are generally paid during the second quarter of the fiscal year following the end of the fiscal year in which they are earned. The amount of bonuses to be paid under the Bonus Plans to the named executive officers as a result of Alon’s performance in 2016, if any, cannot presently be determined. It is expected that such determination will be made in the second quarter of 2017, at which time the bonus amounts, if any, will be disclosed by Alon in a Current Report on Form 8-K.
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(4)
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Reflects the aggregate change in actuarial present value of the named executive officer’s accumulated benefit under the Alon USA GP, LLC Pension Plan and Benefits Restoration Plan calculated by (a) assuming mortality rates as of 2012 from SOA RP-2014 study with Mortality Improvement: RPEC_2014_v2016 model beyond 2012 and (b) applying a discount rate of 4.15% per annum to determine the actuarial present value of the accumulated benefit at December 31, 2016, of 4.45% per annum to determine the actuarial present value of the accumulated benefit at December 31, 2015, and of 3.95% per annum to determine the actuarial present value of the accumulated benefit at December 31, 2014.
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(5)
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On December 31, 2016, Mr. Eisman’s employment agreement with us terminated pursuant to its terms and he ceased serving as our Chief Executive Officer on that date.
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(6)
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Reflects a cash bonus of $560,000 paid to Mr. Eisman in connection with the execution of his employment agreement in May 2016. Reflects a cash bonus of $1,392,445 awarded to Mr. Eisman to provide him with benefits to which he was entitled pursuant to the terms of his employment Agreement with Alon. In May 2015, pursuant to the terms of an employment agreement, Mr. Eisman was granted 100,000 shares of restricted stock, at a grant date price of $18.82. In May 2016, Alon granted awards totaling 158,333 shares of restricted stock to Mr. Eisman at a grant date price of $7.55 per share. The 2015 award and 100,000 shares of the 2016 award vested in May 2016 while the remaining 58,333 were scheduled to vest in December 2016. In the third quarter of 2016, it was determined that awards made in 2015 and 2016 exceeded the individual annual limit set forth in the 2005 Incentive Compensation Plan. As a result, we requested that Mr. Eisman agree to return the net shares received upon the vesting of 150,000 shares of restricted stock (50,000 shares from the 2015 grant and 100,000 from the 2016 grant), and that he agree to reduce the outstanding award of 58,333 restricted shares remaining in the 2016 grant to 50,000. In order to provide Mr. Eisman with the value to which he was entitled pursuant to the terms of his employment agreement, the Board of Directors, acting through the Compensation Committee, approved the cash bonus of $1,392,445. Mr. Eisman then used the cash bonus to purchase shares of stock pursuant to the terms of the Alon USA Energy, Inc. 2016 Fair Market Value Stock Purchase Plan.
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(7)
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Reflects $7,950 of 401(k) matching contribution, $350 in health club cost reimbursement and $439,000 in retention bonus that Mr. Eisman earned in 2016 but the payment of which will be made in 2017 to comply with tax regulations.
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(8)
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Reflects $7,950 of 401(k) matching contribution, $874 of a vehicle allowance and $350 in health club cost reimbursement.
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(9)
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On June 20, 2012, Alon Assets, Inc., Alon Operating, Inc. (collectively, the “Subsidiaries”), Alon and Mr. Morris entered into an agreement whereby Alon agreed to exchange shares of non-voting stock of the Subsidiaries held by Mr. Morris (the “Subsidiary Shares”) for shares of Alon’s common stock. The Subsidiary Shares held by Mr. Morris are exchanged in equal quarterly installments. The amount shown in the Summary Compensation Table is equal to the income attributable to Mr. Morris as a result of such exchanges in the period presented, which income is determined by the difference between the fair market value of the shares of Alon common stock issued and the fair market value of the Subsidiary Shares exchanged, with the fair market value of the Subsidiary Shares reflecting the value attributed by an independent appraisal.
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(10)
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Reflects $7,950 of 401(k) matching contribution.
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(11)
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While Messrs. Crosby and Ranspot were Alon employees in prior years, 2016 is the first year they have been Named Executive Officers of Alon.
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(12)
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Reflects $7,950 of 401(k) matching contribution.
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(13)
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Reflects $7,950 of 401(k) matching contribution and $162 in health club cost reimbursement.
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Grants of Plan-Based Awards
The following table provides a summary of the grants of plan-based awards made to the named executive officers during the last completed fiscal year.
2016 GRANTS OF PLAN-BASED AWARDS
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Name
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Grant Date
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All Other Stock Awards:
Number of Shares of Stock
or Units
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Grant Date Fair
Value of Stock and
Option Awards
($)(4)
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Paul Eisman
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May 31, 2016
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100,000
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(1)
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$
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755,000
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May 31, 2016
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58,333
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(2)
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440,414
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Shai Even
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July 14, 2016
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32,192
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(3)
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214,399
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Jimmy Crosby
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August 8, 2016
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38,340
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(3)
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289,467
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James Ranspot
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August 8, 2016
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31,640
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(3)
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238,882
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_______________________________________________________________________________
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(1)
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Reflects shares of restricted stock granted pursuant to the 2005 Incentive Compensation Plan pursuant to the terms of Mr. Eisman’s employment agreement. As more fully described in Note 6 to the “Summary Compensation Table”, Mr. Eisman surrendered these shares to Alon on December 31, 2016.
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(2)
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Reflects shares of restricted stock granted pursuant to the 2005 Incentive Compensation Plan pursuant to the terms of Mr. Eisman’s employment agreement. As more fully described in Note 6 to the “Summary Compensation Table”, Mr. Eisman agreed to reduce the number of shares of restricted stock pursuant to this award to 50,000 effective as of December 31, 2016.
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(3)
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Reflects shares of restricted stock granted pursuant to the 2005 Incentive Compensation Plan to Messrs. Even, Crosby and Ranspot, as more fully described in Note 2 to the “Summary Compensation Table” above.
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(4)
|
This column reflects the aggregate grant date fair value of the restricted stock awards determined in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures, as required by SEC regulations and does not reflect the actual value that may be recognized by each Named Executive Officer. The grant date fair value reflected here was based on the closing price of our common stock on the date of grant, which was $7.55 (May 31, 2016), $6.66 (July 14, 2016) and $7.55 (August 8, 2016).
|
Employment Agreements and Change of Control Arrangements
Paul Eisman.
Alon was a party to a Management Employment Agreement with Paul Eisman, the initial term of which was amended in May 2016 to extend through December 31, 2016, on which date it expired in accordance with its terms. As of that date, Mr. Eisman had a base salary of $560,000 per year. Under his employment agreement, as amended, Mr. Eisman was entitled to participate in Alon’s annual cash bonus plans, pension plan and the Benefits Restoration Plan. Additionally, Alon was required to provide Mr. Eisman with additional benefits to the extent such benefits are made available to other employees, including disability, hospitalization, medical and retiree health benefits and life insurance. Mr. Eisman was also subject to a covenant not to compete during the term of his employment. This agreement also prohibited Mr. Eisman from disclosing Alon’s proprietary information received through his employment.
Shai Even.
Alon is a party to an Executive Employment Agreement with Shai Even, the initial term of which was through August 1, 2006, and the term of which automatically renews for one-year terms unless terminated by either party. Mr. Even currently receives a base salary of $348,300 per year and is eligible for annual merit increases. Under his employment agreement, Mr. Even is entitled to participate in Alon’s annual cash bonus plans, pension plan and the Benefits Restoration Plan. Additionally, Alon is required to provide Mr. Even with additional benefits to the extent such benefits are made available to other employees, including disability, hospitalization, medical and retiree health benefits and life insurance. Pursuant to the terms of Mr. Even’s employment agreement, if Mr. Even is terminated without Cause (as defined below), resigns upon at least 30 days’ prior written notice for Good Reason (as defined below), or, if upon a change in control his employment agreement is not assumed by the acquiring person or is terminated at his election following the change in control, he will be entitled to receive his base salary through the termination date, a prorated share of his annual bonus and a severance payment equal to three years’ base salary. The agreement makes Mr. Even subject to a covenant not to compete during the term of his employment, which covenant would have continued post-employment, but terminated after Mr. Even’s fifth year of employment with Alon, and a covenant not to interfere with employment relationships during the term of his employment and for one year following the termination of his employment. The agreement also prohibits Mr. Even from disclosing Alon’s proprietary information received through his employment.
For purposes of Mr. Even’s employment agreement, the following terms are generally defined as follows:
|
|
|
|
•
|
“Cause” means, as to Mr. Even, his (i) conviction of a felony or misdemeanor where imprisonment is imposed for more than 30 days; (ii) commission of any act of theft, fraud, dishonesty, or falsification of any records of Alon or any employment records; (iii) improper disclosure of confidential information; (iv) any intentional action that has a material detrimental effect on Alon’s reputation or business; (v) any material breach of Mr. Even’s employment that is not cured within 10 business days following receipt by Mr. Even of written notice of such breach; or (vi) unlawful appropriation of a corporate opportunity; (vii) intentional misconduct in connection with the performance of his duties.
|
|
|
|
|
•
|
“Good Reason” means, as to Mr. Even, the occurrence of one of the following: (i) without Mr. Even's prior written consent, the reduction of Mr. Even’s base compensation or the percentage of his base compensation established as his maximum target bonus percentage for purposes of the annual cash bonus plan; (ii) any material breach of the employment agreement that is not cured within 10 business days following receipt by Alon of written notice of such breach; (iii) Alon requires Mr. Even to be based at an office or location that is more than thirty-five miles from the location at which he was based as of the commencement date of his employment, other than in connection with reasonable travel requirements of Alon’s business; (iv) the delivery of written notice that Alon does not wish to automatically renew Mr. Even’s employment; or (v) at any time on or after the date that is 90 calendar days following the closing of a “Fundamental Transaction.”
|
|
|
|
|
•
|
“Fundamental Transaction” means, as to Mr. Even, a transaction in which (i) Alon shall, directly or indirectly, in one or more related transactions, (A) consolidate or merge with or into (whether or not Alon is the surviving corporation) another person or persons, (B) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of Alon to another person, (C) allow another person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding voting stock of Alon (not including any shares of voting stock of Alon held by the person or persons making or party to, or associated or affiliated with the persons making or party to, such purchase, tender or exchange offer), (D) consummate a securities purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person whereby such other person acquires more than the 50% of the outstanding share of voting stock of Alon (not including any shares of voting stock of Alon held by the Person or Persons making or party to, or associated or affiliated with the persons making or party to, such securities purchase agreement or other business combination), or (E) reorganize, recapitalize or reclassify its common stock, or (ii) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by the issued and outstanding common stock and any corporate functions or groups of personnel (i.e., treasury, credit, tax, legal, information technology, supply) are relocated or transferred from or to such person’s corporate offices.
|
Jeff Morris
. Alon is a party to an Executive Employment Agreement with Jeff Morris, the initial term of which was through May 3, 2014, and the term of which automatically renews for one-year terms unless terminated by either party upon at least thirty days’ written notice. Mr. Morris currently receives a base salary of $166,300 per year and is eligible for annual merit increases. Under his employment agreement, Mr. Morris is entitled to participate in Alon’s annual cash bonus plans, pension plan and the Benefits Restoration Plan. Additionally, Alon is required to provide Mr. Morris with additional benefits to the extent such benefits are made available to other employees, including disability, hospitalization, medical and retiree health benefits and life insurance. Mr. Morris is subject to covenants not to compete and not to interfere with employment relationships during and for nine months and one year following the term of his employment, respectively. This agreement also prohibits Mr. Morris from disclosing Alon’s proprietary information received through his employment.
Jimmy Crosby
. Alon is a party to a Management Employment Agreement with Jimmy Crosby, the initial term of which ends on March 1, 2018, and the term of which automatically renews for one-year terms unless terminated by either party. Mr. Crosby currently receives a base salary of $304,000 per year and is eligible for annual merit increases. Under his employment agreement, Mr. Crosby is entitled to participate in Alon’s annual cash bonus plans, pension plan and the Benefits Restoration Plan. Additionally, Alon is required to provide Mr. Crosby with additional benefits to the extent such benefits are made available to other employees, including disability, hospitalization, medical and retiree health benefits and life insurance. Pursuant to the terms of Mr. Crosby’s employment agreement, if Mr. Crosby is terminated without Cause (as defined below) or resigns upon at least 30 days’ prior written notice for Good Reason (as defined below), he will be entitled to receive his base salary through the termination date, a prorated share of his annual bonus and a severance payment equal to nine months’ base salary. The agreement makes Mr. Crosby subject to a covenant not to compete during the term of his employment and for nine months following the termination of his employment, and a covenant not to interfere with employment relationships during the term of his employment and for one year following the termination of his employment. The agreement also prohibits Mr. Crosby from disclosing Alon’s proprietary information received through his employment.
For purposes of Mr. Crosby’s employment agreement, the following terms are generally defined as follows:
|
|
|
|
•
|
“Cause” means, as to Mr. Crosby, his (i) conviction of a felony or misdemeanor where imprisonment is imposed for more than 30 days; (ii) commission of any act of theft, fraud, dishonesty, or falsification of any records of Alon or any employment records; (iii) improper disclosure of confidential information; (iv) any intentional action that has a material detrimental effect on Alon’s reputation or business; (v) any material breach of Mr. Crosby’s employment that is not cured within 10 business days following receipt by Mr. Crosby of written notice of such breach; or (vi) unlawful appropriation of a corporate opportunity; (vii) intentional misconduct in connection with the performance of his duties.
|
|
|
|
|
•
|
“Good Reason” means, as to Mr. Crosby, the occurrence of one of the following: (i) without Mr. Crosby’s prior written consent, the reduction of Mr. Crosby’s base compensation or the percentage of his base compensation established as his maximum target bonus percentage for purposes of the annual cash bonus plan; (ii) any material breach of the employment agreement that is not cured within 10 business days following receipt by Alon of written notice of such breach; or (iii) the delivery of written notice that Alon does not wish to automatically renew Mr. Crosby’s employment.
|
James Ranspot.
Alon is a party to a Management Employment Agreement with James Ranspot, the initial term of which ends on November 18, 2018, and the term of which automatically renews for one-year terms unless terminated by either party. Mr. Ranspot currently receives a base salary of $303,500 per year and is eligible for annual merit increases. Under his employment agreement, Mr. Ranspot is entitled to participate in Alon’s annual cash bonus plans, pension plan and the Benefits Restoration Plan. Additionally, Alon is required to provide Mr. Ranspot with additional benefits to the extent such benefits are made available to other employees, including disability, hospitalization, medical and retiree health benefits and life insurance. Pursuant to the terms of Mr. Ranspot’s employment agreement, if Mr. Ranspot is terminated without Cause (as defined below), resigns upon at least 30 days’ prior written notice for Good Reason (as defined below), or, if upon a change in control his employment agreement is not assumed by the acquiring person or is terminated at his election following the change in control, he will be entitled to receive his base salary through the termination date, a prorated share of his annual bonus and a severance payment equal to two years’ base salary. The agreement makes Mr. Ranspot subject to a covenant not to compete during the term of his employment, which covenant would have continued post-employment, but terminated after Mr. Ranspot’s fifth year of employment with Alon, and a covenant not to interfere with employment relationships during the term of his employment and for one year following the termination of his employment. The agreement also prohibits Mr. Ranspot from disclosing Alon’s proprietary information received through his employment.
For purposes of Mr. Ranspot’s employment agreement, the following terms are generally defined as follows:
|
|
|
|
•
|
“Cause” means, as to Mr. Ranspot, his (i) conviction of a felony or misdemeanor where imprisonment is imposed for more than 30 days; (ii) commission of any act of theft, fraud, dishonesty, or falsification of any records of Alon or any employment records; (iii) improper disclosure of confidential information; (iv) any intentional action that has a material detrimental effect on Alon’s reputation or business; (v) any material breach of Mr. Ranspot’s employment that is not cured within 10 business days following receipt by Mr. Ranspot of written notice of such breach; or (vi) unlawful appropriation of a corporate opportunity; (vii) intentional misconduct in connection with the performance of his duties.
|
|
|
|
|
•
|
“Good Reason” means, as to Mr. Ranspot, the occurrence of one of the following: (i) without Mr. Ranspot's prior written consent, the reduction of Mr. Ranspot’s base compensation or the percentage of his base compensation established as his maximum target bonus percentage for purposes of the annual cash bonus plan; (ii) any material breach of the employment agreement that is not cured within 10 business days following receipt by Alon of written notice of such breach; (iii) Alon requires Mr. Ranspot to be based at an office or location that is more than thirty-five miles from the location at which he was based as of the commencement date of his employment, other than in connection with reasonable travel requirements of Alon’s business; (iv) the delivery of written notice that Alon does not wish to automatically renew Mr. Ranspot’s employment; or (v) at any time on or after the date that is 90 calendar days following the closing of a “Fundamental Transaction.”
|
|
|
|
|
•
|
“Fundamental Transaction” means, as to Mr. Ranspot, a transaction in which (i) Alon shall, directly or indirectly, in one or more related transactions, (A) consolidate or merge with or into (whether or not Alon is the surviving corporation) another person or persons, (B) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of Alon to another person, (C) allow another person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding voting stock of Alon (not including any shares of voting stock of Alon held by the person or persons making or party to, or associated or affiliated with the persons making or party to, such purchase, tender or exchange offer), (D) consummate a securities purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person whereby such other person acquires more than the 50% of the
|
outstanding share of voting stock of Alon (not including any shares of voting stock of Alon held by the Person or Persons making or party to, or associated or affiliated with the persons making or party to, such securities purchase agreement or other business combination), or (E) reorganize, recapitalize or reclassify its common stock, or (ii) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by the issued and outstanding common stock and any corporate functions or groups of personnel (i.e., treasury, credit, tax, legal, information technology, supply) are relocated or transferred from or to such person’s corporate offices.
The following table sets forth the payments that each of the named executive officers could receive upon the occurrence of any of the events described below. The payments set forth in the table are based on the assumption that the event occurred on December 30, 2016, Alon’s last business day in 2016. The amounts shown in the table do not include payments and benefits, such as accrued salary, accrued vacation, employee retention programs and insurance and pension benefits, to the extent that they are provided on a non-discriminatory basis to salaried employees generally upon termination of employment.
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Event
|
|
Cash Severance
($)
|
|
Paul Eisman
|
|
Death or Disability
|
|
$
|
—
|
|
|
|
|
|
Termination, Resignation or Change of Control
|
|
—
|
|
(1)
|
|
Shai Even
|
|
Death or Disability
|
|
—
|
|
|
|
|
|
Termination, Resignation or Change of Control
|
|
1,044,900
|
|
(2)
|
|
Jeff Morris
|
|
Death or Disability
|
|
—
|
|
|
|
|
|
Termination, Resignation or Change of Control
|
|
—
|
|
|
|
Jimmy Crosby
|
|
Death or Disability
|
|
—
|
|
|
|
|
|
Termination, Resignation or Change of Control
|
|
228,000
|
|
(3)
|
|
James Ranspot
|
|
Death or Disability
|
|
—
|
|
|
|
|
|
Termination, Resignation or Change of Control
|
|
607,000
|
|
(4)
|
_______________________________________________________________________________
|
|
|
|
(1)
|
Mr. Eisman’s employment agreement expired in accordance with its terms on December 31, 2016.
|
|
|
|
|
(2)
|
Pursuant to Mr. Even’s employment agreement, in the event that he is terminated without Cause (as defined above), resigns for Good Reason (as defined above) or, if upon a change in control his employment agreement is not assumed by the acquiring person or at his election, he will be entitled to receive a severance payment equal to three years’ base salary.
|
|
|
|
|
(3)
|
Pursuant to Mr. Crosby’s employment agreement, in the event that he is terminated without Cause (as defined above), resigns for Good Reason (as defined above) or, if upon a change in control his employment agreement is not assumed by the acquiring person, he will be entitled to receive a severance payment equal to nine months’ base salary.
|
|
|
|
|
(4)
|
Pursuant to Mr. Ranspot’s employment agreement, in the event that he is terminated without Cause (as defined above), resigns for Good Reason (as defined above) or, if upon a change in control his employment agreement is not assumed by the acquiring person or at his election, he will be entitled to receive a severance payment equal to two years’ base salary.
|
Outstanding Equity Awards at Fiscal Year-End 2016
The following table provides a summary of equity awards granted to the named executive officers that were outstanding at the end of Alon’s last completed fiscal year, and includes, if applicable, any unexercised options, stock that has not vested and equity incentive plan awards.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested
($) (1)
|
|
Paul Eisman
|
|
—
|
|
|
|
$
|
—
|
|
|
Shai Even
|
|
32,192
|
|
(2)
|
|
366,345
|
|
|
Jeff Morris
|
|
—
|
|
|
|
—
|
|
|
Jimmy Crosby
|
|
76,680
|
|
(3)
|
|
872,618
|
|
|
James Ranspot
|
|
63,280
|
|
(3)
|
|
720,126
|
|
_______________________________________________________________________________
|
|
|
|
(1)
|
This column reflects the value of the awards based on the closing market price of Alon’s common stock on the NYSE on December 30, 2016 (the last trading day of the year), which was $11.38.
|
|
|
|
|
(2)
|
Pursuant to the 2005 Incentive Compensation Plan, on July 14, 2016 Alon entered into an award agreement with Mr. Even granting him 32,192 shares of restricted stock which vested on December 31, 2016, which vesting was effected on January 3, 2017 as a result of the New Year’s Day holidays.
|
|
|
|
|
(3)
|
Pursuant to the 2005 Incentive Compensation Plan, on August 6, 2014 Alon entered into award agreements with Messrs. Crosby and Ranspot. Pursuant to such agreements, Alon agreed to grant a total of (a) 191,700 shares of restricted stock to Mr. Crosby and (b) 158,200 shares of restricted stock to Mr. Ranspot, each over a 5-year period. Once granted, the restricted stock is subject to a restriction on transfer and the holders are not entitled to receive dividends on, or vote, the restricted stock until the shares vest pursuant to the award agreements. As of December 31, 2016, 60% of the shares contemplated by these agreements to be awarded had been granted and 20% percent had vested, as detailed in the “Number of Shares or Units of Stock that Have Not Vested” column of this table.
|
Stock Vested in 2016
The following table provides a summary of equity awards previously granted to the named executive officers that vested during 2016.
STOCK VESTED IN 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares Acquired on Vesting
(#) (1)
|
|
Value of Shares Realized on Vesting
($) (2)
|
|
Paul Eisman (3)
|
|
150,000
|
|
|
$
|
1,335,750
|
|
|
Shai Even
|
|
150,000
|
|
|
1,315,500
|
|
|
Jeff Morris
|
|
—
|
|
|
—
|
|
|
Jimmy Crosby
|
|
19,170
|
|
|
144,829
|
|
|
James Ranspot
|
|
15,820
|
|
|
119,520
|
|
_______________________________________________________________________________
|
|
|
|
(1)
|
This column reflects the gross number of shares acquired upon vesting of restricted stock awards during 2016, without reduction for any shares withheld to satisfy applicable tax obligations.
|
|
|
|
|
(2)
|
This column reflects the value of shares of restricted stock that vested during 2016, calculated by multiplying the number of shares of restricted stock that vested by the mean of the high and low sales prices of our common stock on the applicable vesting date, or if the vesting date is not a trading day on the NYSE, the previous trading day.
|
|
|
|
|
(3)
|
As described in Note (2) to the Summary Compensation Table, Mr. Eisman received a grant of 100,000 shares of restricted stock in May 2016 which were surrendered by Mr. Eisman in December 2016. The number reflected in the table above includes the 100,000 shares of restricted stock that vested in 2016 and were later surrendered.
|
Pension Benefits
The following table provides a summary of each plan that provides for payments or other benefits at, following, or in connection with retirement, with respect to our named executive officers.
2016 PENSION BENEFITS
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Number of Years
Credited Service
(#)
|
|
Present Value of
Accumulated
Benefit
($)
|
|
Paul Eisman
|
|
Alon Pension Plan
|
|
6.8
|
|
$
|
176,385
|
|
|
|
|
Benefits Restoration Plan
|
|
6.8
|
|
246,888
|
|
|
Shai Even
|
|
Alon Pension Plan
|
|
13.4
|
|
361,161
|
|
|
|
|
Benefits Restoration Plan
|
|
13.4
|
|
215,204
|
|
|
Jeff Morris
|
|
Alon Pension Plan
|
|
42.7
|
|
1,952,489
|
|
|
|
|
Benefits Restoration Plan
|
|
42.7
|
|
2,935,140
|
|
|
Jimmy Crosby
|
|
Alon Pension Plan
|
|
18.7
|
|
811,448
|
|
|
|
|
Benefits Restoration Plan
|
|
20.7
|
|
465,139
|
|
|
James Ranspot
|
|
Alon Pension Plan
|
|
10.5
|
|
240,893
|
|
|
|
|
Benefits Restoration Plan
|
|
10.5
|
|
87,672
|
|
Employees who participate in Alon’s Pension Plan make no contributions to the pension plan. A participating employee becomes vested in the Alon Pension Plan once that employee has completed five full years of employment, assuming a minimum of 1,000 hours of service per year. After becoming vested, a participating employee has a non-forfeitable right to his vested retirement benefit. A participant’s compensation for purposes of determining benefits under the Alon Pension Plan includes salary, bonus and overtime pay. The normal retirement age under the Alon Pension Plan is 65.
Alon also provides additional pension benefits to Alon’s highly-compensated employees through Alon’s Benefits Restoration Plan. If an employee is a participant in the Alon Pension Plan and is subject to the limitation on compensation pursuant to Section 401(a)(17) or 415 of the Code, then the employee can participate in the Benefits Restoration Plan and is eligible for a benefit equal to the benefit that would be payable under the Alon Pension Plan but for the limitations on compensation less the benefit actually payable under the Alon Pension Plan. The Benefits Restoration Plan is unfunded and vests on the same schedule as the Alon Pension Plan.
The compensation covered by the Alon Pension Plan and the credited years of service with respect to Messrs. Eisman, Even, Morris, Crosby and Ranspot as of December 31, 2016 are set forth in the table below, assuming retirement at the normal retirement age under the Alon Pension Plan.
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Compensation
Covered by the
Pension Plan
($)
|
|
Number of Years
Credited Service
(#)
|
|
Paul Eisman
|
|
$
|
638,828
|
|
|
6.8
|
|
Shai Even
|
|
410,011
|
|
|
13.4
|
|
Jeff Morris
|
|
374,908
|
|
|
42.7
|
|
Jimmy Crosby
|
|
356,899
|
|
|
18.7
|
|
James Ranspot
|
|
357,077
|
|
|
10.5
|
Compensation of Directors
Non-employee directors receive an annual fee of $50,000 and receive an additional fee of $1,500 per meeting attended ($900 per telephonic meeting attended). The chairperson of each of the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee receives an additional annual fee of $10,000, and each committee member receives an additional fee of $1,500 per committee meeting attended ($900 per telephonic meeting attended). In addition, each independent director receives $25,000 per year in restricted stock which vests in three equal installments on each of the first, second and third anniversaries of the grant date. During 2016, Messrs. Yemin, Ginzburg, Green, Smith and Soreq did not receive any compensation for their service on the Board.
Mr. Wiessman and Alon were parties to an Agreement of Principles of Employment, effective January 1, 2010, pursuant to which he served as Alon’s Executive Chairman of the Board. The term of this agreement ended on January 1, 2015. The Board has determined to continue to compensate and provide the benefits of this agreement to Mr. Wiessman until a more formal agreement can be negotiated. Pursuant to this agreement, Mr. Wiessman is entitled to participate in the pension plans or non-qualified retirement arrangements, bonus plans and any equity plans of Alon Energy and its subsidiaries (except for the Alon Assets, Inc. 2000 Stock Option Plan and Alon Operating, Inc. 2000 Stock Option Plan) at the same level as other executives. Mr. Wiessman was entitled to a 5% fee increase at the end of each of the first, second, third and fourth year of the agreement, which has resulted in the current fee of $35,461 per month. Alon also pays the maintenance and utility costs associated with Mr. Wiessman’s Dallas, Texas residence, provides medical insurance benefits to Mr. Wiessman and reimburses Mr. Wiessman for airfare incurred to transport his family members between Israel and the United States (up to a maximum of eight tickets per year).
Mr. Morris served as a director of Alon until May 2016. For a description of Mr. Morris’ compensation, see “Summary Compensation Table” and “Employment Agreements and Change of Control Arrangements” above.
The following table provides a summary of the compensation awarded to, earned by or paid to the directors of Alon, other than Messrs. Wiessman and Morris, during the last completed fiscal year.
2016 DIRECTOR COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned
($)
|
|
Stock Awards
($)
|
|
Total
($)
|
|
Zalman Segal (1)
|
|
$
|
110,400
|
|
|
$
|
25,000
|
|
|
$
|
135,400
|
|
|
Ron W. Haddock (1)
|
|
117,000
|
|
|
25,000
|
|
|
142,000
|
|
|
Ilan Cohen (1)
|
|
96,800
|
|
|
25,000
|
|
|
121,800
|
|
|
Franklin Wheeler (1)
|
|
58,233
|
|
|
25,000
|
|
|
83,233
|
|
|
William Kacal (1)
|
|
65,433
|
|
|
25,000
|
|
|
90,433
|
|
|
Yeshayahu Pery (2)
|
|
23,267
|
|
|
—
|
|
|
23,267
|
|
|
Ezra Uzi Yemin
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Assaf Ginzburg
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Frederec Green
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Mark D. Smith
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Avigal Soreq
|
|
—
|
|
|
—
|
|
|
—
|
|
_______________________________________________________________________________
|
|
|
|
(1)
|
As discussed above, each independent director receives $25,000 per year in restricted stock which vests in three equal installments on each of the first, second and third anniversaries of the grant date. The Board has determined that each of Messrs. Cohen, Haddock, Kacal, Segal and Wheeler is independent of Alon and its management under the NYSE’s listing standards.
|
Amounts in the stock awards column reflect the aggregate grant date fair value of 2,800 restricted shares of common stock granted to each of our independent directors on May 10, 2016, determined in accordance with FASB ASC Topic 718. At December 31, 2016, each of Messrs. Cohen, Haddock and Segal had 4,356 and Messrs. Wheeler and Kacal had 2,800 unvested shares of restricted stock.
|
|
|
|
(2)
|
Mr. Pery retired from the Board in May 2016.
|
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The following table presents information regarding the number of shares of Alon common stock beneficially owned as of April 17, 2017 by each of Alon’s directors, each executive officer of Alon named in the Summary Compensation Table, and all directors and executive officers of Alon as a group. In addition, the table presents information about each person known by Alon to beneficially own more than 5% of Alon’s outstanding common stock. Unless otherwise indicated by footnote, the beneficial owner exercises sole voting and investment power over the shares. Additionally, unless otherwise indicated by footnote, the percentage of outstanding shares is calculated on the basis of 71,877,464 shares of Alon common stock outstanding as of April 17, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial Share Ownership
|
|
Directors, Executive Officers and 5% Stockholders
|
|
Number of
Shares
|
|
Percent of
Outstanding
Shares
|
|
Directors and Executive Officers:
|
|
|
|
|
|
Ezra Uzi Yemin
|
|
—
|
|
|
—
|
|
|
Assaf Ginzburg
|
|
—
|
|
|
—
|
|
|
Frederec Green
|
|
—
|
|
|
—
|
|
|
Mark D. Smith
|
|
—
|
|
|
—
|
|
|
Avigal Soreq
|
|
—
|
|
|
—
|
|
|
Ilan Cohen
|
|
5,962
|
|
|
*
|
|
|
Ron W. Haddock
|
|
34,756
|
|
|
*
|
|
|
Zalman Segal
|
|
22,256
|
|
|
*
|
|
|
Franklin R. Wheeler
|
|
4,800
|
|
|
*
|
|
|
William J. Kacal
|
|
2,800
|
|
|
*
|
|
|
David Wiessman (1)
|
|
2,510,541
|
|
|
3.5
|
%
|
|
Jeff D. Morris
|
|
1,902,041
|
|
|
2.6
|
%
|
|
Jimmy Crosby
|
|
112,777
|
|
|
*
|
|
|
Paul Eisman
|
|
488,067
|
|
|
*
|
|
|
Shai Even
|
|
163,014
|
|
|
*
|
|
|
Claire Hart
|
|
569,449
|
|
|
*
|
|
|
Kyle McKeen
|
|
97,638
|
|
|
*
|
|
|
Alan Moret
|
|
198,881
|
|
|
*
|
|
|
Michael Oster
|
|
61,943
|
|
|
*
|
|
|
James Ranspot
|
|
90,824
|
|
|
*
|
|
|
All directors and executive officers as a group (20 persons)
|
|
6,265,749
|
|
|
8.7
|
%
|
|
More than 5% Stockholders:
|
|
|
|
|
|
Delek US Holdings, Inc. (2)
|
|
33,691,292
|
|
|
46.9
|
%
|
|
Dimensional Fund Advisors LP (3)
|
|
6,033,200
|
|
|
8.4
|
%
|
_______________________________________________________________________________
|
|
|
|
(1)
|
Shares beneficially owned by Mr. Wiessman include 2,335,441 shares held by D.B.W. Holdings (2005) Ltd. and 175,100 shares held directly.
|
|
|
|
|
(2)
|
Shares beneficially owned are based on Schedule 13D/A filed with the SEC on January 3, 2017 by Delek US Holdings, Inc. (“Delek”). Delek’s address is 7102 Commerce Way, Brentwood, Tennessee 37027.
|
|
|
|
|
(3)
|
Shares beneficially owned are based on Schedule 13G/A filed with the SEC on February 9, 2017 by Dimensional Fund Advisors LP. Dimensional Fund Advisors LP’s address is 6300 Bee Cave Road, Austin, TX 78746. Dimensional Fund serves as an investment advisor to four investment companies and serves as investment manager or sub-advisor to certain other comingled funds, group trusts and separate accounts (collectively, the “funds”). In its role as investment advisor, sub-advisor and/or manager, Dimensional Fund may be deemed the beneficial owner of all shares held by the funds; however, all such shares are owned by the funds. The funds have the right to receive or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such securities in their respective accounts. None of the four funds are known to have such rights or powers with respect to more than five percent of Alon’s common stock.
|
2016 EQUITY COMPENSATION PLAN INFORMATION
As of December 31, 2016, the 2005 Incentive Compensation Plan was the only compensation plan under which our securities were authorized for issuance. The table below provides information as of December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of shares of
common stock to
be issued upon
exercise of
outstanding
options, warrants
and rights
|
|
Weighted-average exercise
price of outstanding
options, warrants
and rights
|
|
Number of shares of common
stock remaining available for
future issuance under equity
compensation plans
(excluding securities reflected
in column (a))
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
Equity compensation plans approved by stockholders
|
|
—
|
|
|
$
|
—
|
|
|
3,280,371
|
|
|
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
—
|
|
|
$
|
—
|
|
|
3,280,371
|
|
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
Independent Directors
Under the NYSE’s listing standards, a director will not be deemed independent unless the Board affirmatively determines that the director has no material relationship with Alon. Based upon information requested from and provided by each director concerning their background, employment and affiliations, including commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, the Board has determined that each of Messrs. Cohen, Ginzburg, Green, Haddock, Kacal, Segal, Smith, Soreq, Wheeler and Yemin, has no material relationship with Alon, either directly or as a partner, stockholder or officer of an organization that has a relationship with Alon, and is therefore independent of Alon and its management under the NYSE’s listing standards.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Review, Approval or Ratification of Transactions with Related Persons
Alon’s Corporate Governance Guidelines, which were adopted by the Board on July 7, 2005, require that the Board exercise appropriate oversight with respect to all related-party transactions, including significant business dealings with directors or their affiliates, substantial charitable contributions to organizations with which a director is affiliated, consulting contracts with, or other indirect forms of compensation to, a director, and extension of credit to directors and executive officers. The Board has not adopted specific policies or procedures for review or approval of related-party transactions or potential conflicts of interest. The Board considers any related-party transaction or potential conflict of interest on a case by case basis and in a manner consistent with its fiduciary obligations under applicable Delaware law and related party transactions are submitted to a committee of disinterested directors for approval. The Board and the respective disinterested directors believe that the following transactions and relationships during 2016 were reasonable and in the best interest of Alon.
Transactions with Management and Others
Registration Rights Agreement.
Pursuant to the terms of a Registration Rights Agreement with Alon Israel Oil Company Ltd. (“Alon Israel”), Alon provided Alon Israel with registration rights, including demand registration rights and “piggy-back” registration rights, with respect to Alon common stock owned by Alon Israel. In connection with Alon Israel’s sale of Alon’s common stock to Delek in May 2015, Alon Israel assigned its rights under the Registration Rights Agreement to Delek. Alon’s obligations are subject to limitations relating to a minimum amount of common stock required for registration, the timing of registration and other similar matters. Alon is obligated to pay all expenses incidental to such registration, excluding underwriters’ discounts and commissions and certain legal fees and expenses.
Transactions with Delek
On May 14, 2015, Delek acquired 33.7 million of the Company’s common stock from Alon Israel. The consideration paid by Delek to Alon Israel consisted of a combination of shares of restricted Delek common stock, an unsecured promissory note and cash. The approximate value of the total consideration to be paid by Delek to Alon Israel was $572.4 million (based upon a closing price of $37.90 per share of common stock of Delek on April 14, 2015).
On January 2, 2017, Alon and Delek entered into a definitive agreement under which Delek will acquire all of the outstanding shares of Alon common stock which Delek does not already own in an all-stock transaction. Under terms of the agreement, the owners of our remaining outstanding shares that Delek does not currently own will receive a fixed exchange ratio of 0.5040 of Delek shares for each share of Alon. The transaction is expected to close in the first half of 2017, subject to customary closing conditions, including regulatory approval and approval by Delek shareholders and Alon shareholders.
We also have transactions with Delek that occur in the ordinary course of business. Including amounts prior to the transaction, we purchased refined products from Delek of $3.1 million, $15.3 million and $5.5 million for the years ended December 31, 2016, 2015 and 2014, respectively.
SCS Beverage
On February 29, 2004, Alon sold 17 licenses for the sale of alcoholic beverages at 17 stores in New Mexico to SCS Beverage, Inc., a corporation treated as a pass-through entity that is wholly owned by Jeff D. Morris, Vice Chairman of the Board of Directors of Alon USA Partners GP, LLC (the “General Partner”), a wholly-owned subsidiary of Alon. Under rules and regulations of the New Mexico Alcohol and Gaming Division, a holder of a license to sell alcoholic beverages in New Mexico must provide substantial documentation in the application for and annual renewal of the license, including detailed questionnaires and fingerprints of the officers and directors of each entity beneficially owning 10% or more of the holder of the license. Alon engaged in this transaction to expedite the process of renewing the licenses by limiting the required disclosures to
one individual stockholder. The purchase price paid by SCS Beverage consisted of approximately $2.6 million for the 17 licenses and approximately $0.2 million for the inventory of alcoholic beverages on the closing date. The purchase price was paid by SCS Beverage issuing to Alon a demand promissory note in the amount of $2.8 million. The demand note is payable solely by transferring the licenses and inventory existing at the time of payment back to Alon. The demand note is secured by a pledge of the licenses and the inventory and a pledge of 100% of the stock of SCS Beverage. Pursuant to the purchase and sale agreement, SCS Beverage granted Alon an option to re-acquire the licenses at any time at a purchase price equal to the same purchase price paid by SCS Beverage to acquire the licenses.
As the holder of the New Mexico licenses, SCS Beverage is the only party entitled to purchase alcoholic beverages to be sold at the locations covered by the licenses and to receive revenues from the sale of alcoholic beverages at those locations. Simultaneously with the transfer of the licenses, SCS Beverage entered into a premises lease with Alon to lease space at each of the locations covered by the licenses for the purpose of conducting the alcoholic beverages concessions. The total annual payments by SCS Beverage to Alon under this premises lease agreement have averaged approximately $1.4 million over the last three fiscal years and are subject to adjustment by Alon based on the volume of sales of alcoholic beverages at the locations covered by the licenses. To date, the profits realized by SCS Beverage from the sale of alcoholic beverages at these locations have not exceeded lease payments by SCS Beverage to Alon and it anticipates that this will continue to be the case in the future. As a result, Mr. Morris has not received any economic benefit from the ownership of SCS Beverage, and Alon does not anticipate that Mr. Morris will derive any economic benefit from his ownership of SCS Beverage in the future.
Alon Assets Dividends
In connection with dividend payments by Alon to its stockholders in 2016, Mr. Morris was paid dividends on the shares held by him in Alon Assets. The total dividends paid to Mr. Morris in 2016 from Alon Assets was $0.4 million.
Alon USA Partners, LP
In November 2013 Alon USA Partners, LP (the “Partnership”) completed an initial public offering of 11,500,000 common units representing limited partner interests. As of December 31, 2016 the common units held by the public represent 18.4% of the Partnership’s common units outstanding. Alon owns the remaining 81.6% of the Partnership’s common units and the General Partner owns 100% of the general partner interest in the Partnership, which is a non-economic interest. In connection with the public offering, Alon, through its subsidiaries, entered into agreements to maintain certain supply arrangements and to allocate expenses between Alon and the Partnership. A brief description of these agreements is provided below.
Omnibus Agreement
Under the terms of the Omnibus Agreement between the Partnership and Alon, the Partnership has the right of first refusal if Alon or any of its controlled affiliates has the opportunity to acquire a controlling interest in any refinery and related crude oil and refined product logistic assets, including non-retail transportation terminal sales, and that operate in Arizona, Arkansas, Colorado, Kansas, New Mexico, Oklahoma or Texas. In addition, pursuant to the terms of the omnibus agreement, the Partnership has a 60-day exclusive right of negotiation if Alon or any of its controlled affiliates decide to attempt to sell any refinery and related crude oil and refined product logistic assets, including non-retail transportation terminal sales, that operate in Arizona, Arkansas, Colorado, Kansas, New Mexico, Oklahoma or Texas.
Services Agreement
The Services Agreement among the Partnership, the General Partner and Alon addresses certain aspects of the Partnership’s relationship with the General Partner and Alon, including the provision of certain general and administrative services by Alon to the Partnership and the Partnership’s agreement to reimburse Alon for such services; and the provision by Alon to the Partnership of such employees as may be necessary to operate and manage the Partnership’s business, and its agreement to reimburse Alon for the expenses associated with such employees.
Pursuant to the Services Agreement, the Partnership has agreed to reimburse Alon for (i) all reasonable direct and indirect costs and expenses incurred by it in connection with the performance of these services and (ii) all other reasonable expenses allocable to the Partnership or the General Partner or otherwise incurred by Alon in connection with the operation of the Partnership’s business.
Equipment Lease Agreements
In June 2014, an Alon subsidiary entered into six-year lease agreements with the Partnership to lease equipment at the Big Spring refinery. The lease agreements were effective July 1, 2014, and require fixed monthly payments amounting to $4.9 million annually.
Tax Sharing Agreement
Under the terms of the Tax Sharing Agreement between the Partnership and Alon, the Partnership must reimburse Alon for the Partnership’s share of state and local income and other taxes borne by Alon as a result of the Partnership’s financial results being included in a combined or consolidated tax return filed by Alon.
Fuel Supply Agreement
Pursuant to the terms of the 20-year Fuel Supply Agreement between the Partnership and Southwest Convenience Stores, LLC (“Southwest”), a subsidiary of Alon, the Partnership supplies substantially all of the motor fuel requirements of Southwest’s retail convenience stores. The volume of motor fuels sold under the Fuel Supply Agreement is determined monthly based upon Southwest’s estimated requirements. Southwest purchases such motor fuels at a price equal to the market price per unit in effect at the time of delivery less applicable terminal discounts plus all applicable freight, taxes, pipeline tariff and delivery place differentials.
The Fuel Supply Agreement additionally provides for (i) Southwest’s mandatory participation in the Partnership’s credit card payment network, (ii) Southwest’s use of the “Alon” trade name and related marks in connection with the use of the credit card payment network and the resale of the motor fuels purchased pursuant to the Fuel Supply Agreement, and (iii) marketing services for the benefit of Southwest (at an additional cost).
Asphalt Supply Agreement
The Partnership also entered into a 20-year Asphalt Supply Agreement with Paramount Petroleum Corporation (“Paramount”), a subsidiary of Alon, under which Paramount purchases all of the asphalt produced by the Partnership. The volume of asphalt sold pursuant to the Asphalt Supply Agreement is based upon actual production, but the Partnership is required to provide good faith non-binding forecasts of its monthly production estimates for each contract year.
Products are sold under the Asphalt Supply Agreement at prices equal to the three day average price for such product, determined by reference to the value derived from the pricing formula set forth in the Asphalt Supply Agreement for such product on the day of delivery or lifting and for the two business days prior to the date of delivery or lifting. Products with a contract term exceeding one year require the parties to meet annually to reexamine the price for such product.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees.
The aggregate fees billed or expected to be billed by KPMG for professional services rendered for the audit of Alon’s annual financial statements, the review of the financial statements to be included in Alon’s annual reports on Form 10-K and quarterly reports on Form 10-Q were $1,725,750 and $1,485,000 for the years ended December 31, 2016 and 2015, respectively.
Audit-Related Fees.
The aggregate fees billed or expected to be billed by KPMG for assurance and related services related to the performance of audits or review of Alon’s financial statements and not described above under “Audit Fees” were $533,000 and $630,000 for the years ended December 31, 2016 and 2015, respectively.
Tax Fees.
No fees were billed or are expected to be billed by KPMG for professional services rendered for tax compliance, tax advice and tax planning in 2016 and 2015.
All Other Fees.
No fees were billed or are expected to be billed by KPMG for products and services not described above in 2016 and 2015.
Pre-Approval Policies and Procedures.
In general, all engagements of Alon’s outside auditors, whether for auditing or non-auditing services, must be pre-approved by the Audit Committee. During 2016, all of the services performed for Alon by KPMG were pre-approved by the Audit Committee. The Audit Committee has considered the compatibility of non-audit services with KPMG’s independence and believes the provision of such non-audit services is compatible with KPMG maintaining its independence.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as part of this report:
|
|
|
|
|
Reports of Independent Registered Public Accounting Firm*
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015*
|
|
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014*
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014*
|
|
Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2016, 2015 and 2014*
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014*
|
|
Notes to Consolidated Financial Statements*
|
* Previously filed with our Annual Report on Form 10-K filed with the SEC on February 27, 2017, which is being amended hereby.
|
|
|
|
2.
|
Financial Statement Schedules and Other Financial Information.
All financial statement schedules are omitted because either they are not applicable or the required information is included in the consolidated financial statements or notes referenced above.
|
|
|
|
|
3.
|
Exhibits.
The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description of Exhibit
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of January 2, 2017, by and among Alon USA Energy, Inc., Delek US Holdings, Inc., Dione Mergeco, Inc., Astro Mergeco, Inc., and Delek Holdco, Inc. (incorporated by reference to Exhibit 2.1 to Form 8-K filed by the Company on January 3, 2017, SEC File No. 001-32567).
|
|
2.2
|
|
First Amendment to Agreement and Plan of Merger, dated as of February 27, 2017, by and among Alon USA Energy, Inc., Delek US Holdings, Inc., Dione Mergeco, Inc., Astro Mergeco, Inc., and Delek Holdco, Inc. (incorporated by reference to Exhibit 2.2 to Form 10-K, filed by the Company on February 27, 2017, SEC File No. 001-32567).
|
|
3.1
|
|
Second Amended and Restated Certificate of Incorporation of Alon USA Energy, Inc. (incorporated by reference to Exhibit 3.1 to Form 10-Q, filed by the Company on May 9, 2012, SEC File No. 001-32567).
|
|
3.2
|
|
Amended and Restated Bylaws of Alon USA Energy, Inc. (incorporated by reference to Exhibit 3.1 to Form 8-K, filed by the Company on February 4, 2016, SEC File No. 333-124797).
|
|
4.1
|
|
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Form S-1/A, filed by the Company on June 17, 2005, SEC File No. 333-124797).
|
|
4.2
|
|
Specimen 8.50% Series A Convertible Preferred Stock Certificate (incorporated by reference to Exhibit 4.4 to Form 10-Q, filed by the Company on November 9, 2010, SEC File No. 001-32567).
|
|
4.3
|
|
Indenture related to the 3.00% Convertible Senior Notes due 2018, dated as of September 16, 2013, among Alon USA Energy, Inc. and U.S. Bank National Association, as trustee (including form of 3.00% Convertible Senior Note due 2018) (incorporated by reference to Exhibit 4.1 to Form 8-K, filed by the Company on September 16, 2013, SEC File No. 001-32567).
|
|
4.4
|
|
Form of Certificate of Designation of the 8.5% Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.3 to Form 10-Q filed by the Company on November 9, 2010, SEC File No. 001-32567).
|
|
4.5
|
|
Form of Certificate of Designation of the 8.5% Series B Convertible Preferred Stock (incorporated by reference to Exhibit 4.5 to Form 10-K, filed by the Company on March 13, 2012 SEC File No. 001-32567).
|
|
10.1
|
|
Pipeline Lease Agreement, dated as of December 12, 2007, between Plains Pipeline, L.P. and Alon USA, LP (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on February 5, 2008, SEC File No. 001-32567).
|
|
10.2
|
|
Pipeline Lease Agreement, dated as of February 21, 1997, between Navajo Pipeline Company and American Petrofina Pipe Line Company (incorporated by reference to Exhibit 10.6 to Form S-1, filed by the Company on May 11, 2005, SEC File No. 333-124797).
|
|
10.3
|
|
Amendment and Supplement to Pipeline Lease Agreement, dated as of August 31, 2007, by and between HEP Pipeline Assets, Limited Partnership and Alon USA, LP (incorporated by reference to Exhibit 10.1 to Form 10-Q, filed by the Company on November 8, 2007, SEC File No. 001-32567).
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description of Exhibit
|
|
10.4
|
|
Pipelines and Terminals Agreement, dated as of February 28, 2005, between Alon USA, LP and Holly Energy Partners, L.P. (incorporated by reference to Exhibit 10.8 to Form S-1, filed by the Company on May 11, 2005, SEC File No. 333-124797).
|
|
10.5
|
|
Premises Lease, dated as of May 12, 2003, between Southwest Convenience Stores, LLC and SCS Beverage, Inc. (incorporated by reference to Exhibit 10.35 to Form S-1/A, filed by the Company on June 17, 2005, SEC File No. 333-124797).
|
|
10.6
|
|
Registration Rights Agreement, dated as of July 6, 2005, between Alon USA Energy, Inc. and Alon Israel Oil Company, Ltd. (incorporated by reference to Exhibit 10.22 to Form S-1/A, filed by the Company on July 7, 2005, SEC File No. 333-124797).
|
|
10.7
|
|
Form of Registration Rights Agreement among the Company and Subsidiary Shareholders (incorporated by reference to Exhibit 10.3 to Form 8-K, filed by the Company on June 26, 2012, SEC File No. 001-32567).
|
|
10.8
|
|
Second Amended and Restated Credit Agreement, dated as of March 14, 2014, among Southwest Convenience Stores, LLC, Skinny’s, LLC, as the Borrowers, Alon Brands, Inc., as a Guarantor, the lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender, LC Issuer, Syndication Agent and Sole Lead Arranger (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on March 26, 2014, SEC File No. 001-32567).
|
|
10.9
|
|
Credit and Guaranty Agreement, dated as of November 26, 2012, among Alon USA Partners, LP, Alon USA Partners GP, LLC and certain subsidiaries of Alon USA Partners, LP, as Guarantors, the lenders party thereto and Credit Suisse AG, as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on November 30, 2012, SEC File No. 001-32567).
|
|
10.10*
|
|
Executive Employment Agreement between Jeff Morris and Alon USA Energy, Inc., dated May 3, 2011, (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on May 6, 2011, SEC File No. 001-32567).
|
|
10.11*
|
|
Executive Employment Agreement, dated as of July 31, 2000, between Claire A. Hart and Alon USA GP, Inc., as amended by the Amendment to Executive/Management Employment Agreement, dated May 1, 2005 (incorporated by reference to Exhibit 10.24 to Form S-1, filed by the Company on May 11, 2005, SEC File No. 333-124797).
|
|
10.12*
|
|
Second Amendment to Executive Employment Agreement, dated as of November 4, 2008, between Claire A. Hart and Alon USA GP, LLC (incorporated by reference to Exhibit 10.10 to Form 10-Q, filed by the Company on November 7, 2008, SEC File No. 001-32567).
|
|
10.13*
|
|
Executive Employment Agreement, dated as of August 1, 2003, between Shai Even and Alon USA GP, LLC (incorporated by reference to Exhibit 10.49 to Form 10-K, filed by the Company on March 15, 2007, SEC File No. 001-32567).
|
|
10.14*
|
|
Amendment to Executive Employment Agreement, dated as of November 4, 2008, between Shai Even and Alon USA GP, LLC (incorporated by reference to Exhibit 10.14 to Form 10-Q, filed by the Company on November 7, 2008, SEC File No. 001-32567).
|
|
10.15*
|
|
Second Amendment to Executive Employment Agreement, dated as of July 23, 2015, between Shai Even and Alon USA GP, LLC (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on July 30, 2015, SEC File No. 001-32567).
|
|
10.16*
|
|
Management Employment Agreement, dated as of October 30, 2008, between Michael Oster and Alon USA GP, LLC (incorporated by reference to Exhibit 10.71 to Form 10-K, filed by the Company on April 10, 2009, SEC File No. 001-32567).
|
|
10.17*
|
|
Agreement of Principles of Employment, dated as of December 22, 2009, between David Wiessman and the Company (incorporated by reference to Exhibit 10.44 to Form 10-K, filed by the Company on March 13, 2012 SEC File No. 001-32567).
|
|
10.18*
|
|
Amended and Restated Employment Agreement by and between Paramount Petroleum Corporation and Alan P. Moret, dated July 8, 2011 (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on July 13, 2011, SEC File No. 001-32567).
|
|
10.19*
|
|
First Amendment to Amended and Restated Employment Agreement dated May 12, 2015 between Alan P. Moret and Alon USA GP, LLC, dated May 11, 2015 (incorporated by reference to Exhibit 10.4 to Form 8-K filed by the Company on May 15, 2015, SEC File No. 001-32567).
|
|
10.20*
|
|
Management Employment Agreement, dated as of May 1, 2008, between Kyle C. McKeen and Alon USA GP, LLC (incorporated by reference to Exhibit 10.47 to Form 10-K, filed by the Company on March 14, 2013 SEC File No. 001-32567).
|
|
10.21*
|
|
Management Employment Agreement, dated as of November 18, 2013, between James A. Ranspot and Alon USA GP, LLC.
|
|
10.22*
|
|
First Amendment to Management Employment Agreement, dated as of July 22, 2015, between James A. Ranspot and Alon USA GP, LLC.
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description of Exhibit
|
|
10.23*
|
|
Management Employment Agreement, dated as of March 1, 2013, between Jimmy C. Crosby and Alon USA GP, LLC.
|
|
10.24*
|
|
Description of Annual Bonus Plans (incorporated by reference to Exhibit 10.56 to Form 10-K, filed by the Company on March 15, 2011 SEC File No. 001-32567).
|
|
10.25*
|
|
Change of Control Incentive Bonus Program (incorporated by reference to Exhibit 10.29 to Form S-1, filed by the Company on May 11, 2005, SEC File No. 333-124797).
|
|
10.26*
|
|
Description of Director Compensation (incorporated by reference to Exhibit 10.30 to Form S-1, filed by the Company on May 11, 2005, SEC File No. 333-124797).
|
|
10.27*
|
|
Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.31 to Form S-1, filed by the Company on May 11, 2005, SEC File No. 333-124797).
|
|
10.28*
|
|
Form of Officer Indemnification Agreement (incorporated by reference to Exhibit 10.32 to Form S-1, filed by the Company on May 11, 2005, SEC File No. 333-124797).
|
|
10.29*
|
|
Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.33 to Form S-1, filed by the Company on May 11, 2005, SEC File No. 333-124797).
|
|
10.30*
|
|
Alon Assets, Inc. 2000 Stock Option Plan (incorporated by reference to Exhibit 10.36 to Form S-1/A, filed by the Company on June 17, 2005, SEC File No. 333-124797).
|
|
10.31*
|
|
Alon USA Operating, Inc. 2000 Stock Option Plan (incorporated by reference to Exhibit 10.37 to Form S-1/A, filed by the Company on June 17, 2005, SEC File No. 333-124797).
|
|
10.32*
|
|
Incentive Stock Option Agreement, dated as of July 31, 2000, between Alon Assets, Inc. and Jeff D. Morris, as amended by the Amendment to the Incentive Stock Option Agreement, dated June 30, 2002 (incorporated by reference to Exhibit 10.38 to Form S-1/A, filed by the Company on June 17, 2005, SEC File No. 333-124797).
|
|
10.33†
|
|
Second Amendment to Incentive Stock Option Agreement, dated as of November 4, 2008, between Jeff D. Morris and Alon Assets, Inc. (incorporated by reference to Exhibit 10.15 to Form 10-Q, filed by the Company on November 7, 2008, SEC File No. 001-32567).
|
|
10.34*
|
|
Shareholder Agreement, dated as of July 31, 2000, between Alon Assets, Inc. and Jeff D. Morris, as amended by the Amendment to the Shareholder Agreement, dated June 30, 2002 (incorporated by reference to Exhibit 10.39 to Form S-1/A, filed by the Company on June 17, 2005, SEC File No. 333-124797).
|
|
10.35*
|
|
Second Amendment to Shareholder Agreement, dated May 12, 201 5 among Alon USA Energy, Inc., Alon Assets, Inc., Jeff Morris and Jeff Morris/IRA (incorporated by reference to Exhibit 10.1 to Form 8-K filed by the Company on May 15, 2015, SEC File No. 001-32567).
|
|
10.36*
|
|
Incentive Stock Option Agreement, dated as of July 31, 2000, between Alon USA Operating, Inc. and Jeff D. Morris, as amended by the Amendment to the Incentive Stock Option Agreement, dated June 30, 2002 (incorporated by reference to Exhibit 10.40 to Form S-1/A, filed by the Company on June 17, 2005, SEC File No. 333-124797).
|
|
10.37*
|
|
Second Amendment to Incentive Stock Option Agreement, dated as of November 4, 2008, between Jeff D. Morris and Alon USA Operating, Inc. (incorporated by reference to Exhibit 10.16 to Form 10-Q, filed by the Company on November 7, 2008, SEC File No. 001-32567).
|
|
10.38*
|
|
Shareholder Agreement, dated as of July 31, 2000, between Alon USA Operating, Inc. and Jeff D. Morris, as amended by the Amendment to the Shareholder Agreement, dated June 30, 2002 (incorporated by reference to Exhibit 10.41 to Form S-1/A, filed by the Company on June 17, 2005, SEC File No. 333-124797).
|
|
10.39*
|
|
Amendment to Shareholder Agreements among the Company, Alon Assets, Inc., Alon Operating, Inc., Jeff Morris and Jeff Morris/IRA, dated June 20, 2012 (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on June 26, 2012, SEC File No. 001-32567).
|
|
10.40*
|
|
Agreement, dated as of July 6, 2005, among Alon USA Energy, Inc., Alon USA, Inc., Alon USA Capital, Inc., Alon USA Operating, Inc., Alon Assets, Inc., Jeff D. Morris, Claire A. Hart and Joseph A. Concienne, III (incorporated by reference to Exhibit 10.52 to Form S-1/A, filed by the Company on July 7, 2005, SEC File No. 333-124797).
|
|
10.41*
|
|
Alon USA Energy, Inc. Second Amended and Restated 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to Form 10-Q, filed by the Company on May 9, 2012, SEC File No. 001-32567).
|
|
10.42*
|
|
Form of Restricted Stock Award Agreement relating to Director Grants pursuant to Section 12 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on August 5, 2005, SEC File No. 001-32567).
|
|
10.43*
|
|
Form of Restricted Stock Award Agreement relating to Participant Grants pursuant to Section 8 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on August 23, 2005, SEC File No. 001-32567).
|
|
10.44*
|
|
Form II of Restricted Stock Award Agreement relating to Participant Grants pursuant to Section 8 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.3 to Form 8-K, filed by the Company on November 8, 2005, SEC File No. 001-32567).
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description of Exhibit
|
|
10.45*
|
|
Alon USA Energy, Inc. Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on January 12, 2017).
|
|
10.46*
|
|
Form of Appreciation Rights Award Agreement relating to Participant Grants pursuant to Section 7 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on March 12, 2007, SEC File No. 001-32567).
|
|
10.47*
|
|
Form of Amendment to Appreciation Rights Award Agreement relating to Participant Grants pursuant to Section 7 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to Form 8-K, filed by the Company on January 27, 2010, SEC File No. 001-32567).
|
|
10.48*
|
|
Form II of Appreciation Rights Award Agreement relating to Participant Grants pursuant to Section 7 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on January 27, 2010, SEC File No. 001-32567).
|
|
10.49
|
|
Form of Award Agreement relating to Executive Officer Restricted Stock Grants pursuant to the Alon USA Energy, Inc. 2005 Amended and Restated Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to Form 8-K, filed by the Company on May 9, 2011, SEC File No. 001-32567).
|
|
10.50*
|
|
Restricted Stock Award Agreement, dated August 6, 2014, between Alon USA Energy, Inc. and James A. Ranspot.
|
|
10.51*
|
|
First Amendment to Restricted Stock Award Agreement between Alon USA Energy, Inc. and James A. Ranspot.
|
|
10.52*
|
|
Second Amendment to Restricted Stock Award Agreement between Alon USA Energy, Inc. and James A. Ranspot.
|
|
10.53*
|
|
Third Amendment to Restricted Stock Award Agreement between Alon USA Energy, Inc. and James A. Ranspot.
|
|
10.54*
|
|
Restricted Stock Award Agreement, dated August 6, 2014, between Alon USA Energy, Inc. and Jimmy C. Crosby.
|
|
10.55*
|
|
First Amendment to Restricted Stock Award Agreement between Alon USA Energy, Inc. and Jimmy C. Crosby.
|
|
10.56*
|
|
Second Amendment to Restricted Stock Award Agreement between Alon USA Energy, Inc. and Jimmy C. Crosby.
|
|
10.57*
|
|
Third Amendment to Restricted Stock Award Agreement between Alon USA Energy, Inc. and Jimmy C. Crosby.
|
|
10.58
|
|
Stock Purchase Agreement, dated as of April 28, 2006, among Alon USA Energy, Inc., The Craig C. Barto and Gisele M. Barto Living Trust, Dated April 5, 1991, The Jerrel C. Barto and Janice D. Barto Living Trust, Dated March 18, 1991, W. Scott Lovejoy, III and Mark R. Milano (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on May 2, 2006, SEC File No. 001-32567).
|
|
10.59
|
|
First Amendment to Stock Purchase Agreement, dated as of June 30, 2006, among Alon USA Energy, Inc., The Craig C. Barto and Gisele M. Barto Living Trust, Dated April 5, 1991, The Jerrel C. Barto and Janice D. Barto Living Trust, Dated March 18, 1991, W. Scott Lovejoy III and Mark R. Milano (incorporated by reference to Exhibit 10.1 to Form 10-Q, filed by the Company on November 14, 2006, SEC File No. 001-32567).
|
|
10.60
|
|
Second Amendment to Stock Purchase Agreement, dated as of July 31, 2006, among Alon USA Energy, Inc., The Craig C. Barto and Gisele M. Barto Living Trust, Dated April 5, 1991, The Jerrel C. Barto and Janice D. Barto Living Trust, Dated March 18, 1991, W. Scott Lovejoy III and Mark R. Milano (incorporated by reference to Exhibit 10.2 to Form 10-Q, filed by the Company on November 14, 2006, SEC File No. 001-32567).
|
|
10.61
|
|
Stock Purchase Agreement, dated May 7, 2008, between Valero Refining and Marketing Company and Alon Refining Krotz Springs, Inc. (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on May 13, 2008, SEC File No. 001-32567).
|
|
10.62
|
|
First Amendment to Stock Purchase Agreement, dated as of July 3, 2008, by and among Valero Refining and Marketing Company, Alon Refining Krotz Springs, Inc. and Valero Refining Company-Louisiana (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on July 10, 2008, SEC File No. 001-32567).
|
|
10.63†
|
|
Second Amended and Restated Supply and Offtake Agreement, dated February 1, 2015 by and between Alon Refining Krotz Springs, Inc. and J. Aron & Company (incorporated by reference to Exhibit 10.3 to Form 10-Q, filed by the Company on May 8, 2015, SEC File No. 001-32567).
|
|
10.64
|
|
Amendment to Second Amended and Restated Supply and Offtake Agreement, dated as of January 13, 2017, between Alon Refining Krotz Springs, Inc. and J. Aron & Company. (incorporated by reference to Exhibit 10.53 to Form 10-K, filed by the Company on February 27, 2017, SEC File No. 001-32567).
|
|
10.65†
|
|
Second Amended and Restated Supply and Offtake Agreement by and between Alon USA, LP and J. Aron & Company, dated February 1, 2015 (incorporated by reference to Exhibit 10.1 to Form 10-Q, filed by the Company on May 8, 2015, SEC File No. 001-32567).
|
|
10.66†
|
|
Amended and Restated Supply and Offtake Agreement by and between J. Aron & Company and Alon Supply, Inc., dated February 1, 2015 (incorporated by reference to Exhibit 10.2 to Form 10-Q, filed by the Company on May 8, 2015, SEC File No. 001-32567).
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description of Exhibit
|
|
10.67
|
|
Form of Series A Convertible Preferred Stock Purchase Agreement (incorporated by reference to Exhibit 10.105 to Form S-1/A, filed by the Company on October 22, 2010, SEC File No. 333-169583).
|
|
10.68
|
|
Form of Series B Convertible Preferred Stock Purchase Agreement (incorporated by reference to Exhibit 10.106 to Form 10-K, filed by the Company on March 13, 2012 SEC File No. 001-32567).
|
|
10.69
|
|
Omnibus Agreement by and among Alon USA Partners, LP, Alon USA Partners GP, LLC, Alon Assets, Inc. and Alon Energy, Inc., dated November 26, 2012 (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on November 26, 2012, SEC File No. 001-32567).
|
|
10.70
|
|
Services Agreement by and among Alon USA Partners, LP, Alon USA Partners GP, LLC by and Alon Energy, Inc., dated November 26, 2012 (incorporated by reference to Exhibit 10.2 to Form 8-K, filed by the Company on November 26, 2012, SEC File No. 001-32567).
|
|
10.71
|
|
Tax Sharing Agreement by and among Alon USA Partners, LP and Alon USA Energy, Inc., dated November 26, 2012 (incorporated by reference to Exhibit 10.3 to Form 8-K, filed by the Company on November 26, 2012, SEC File No. 001-32567).
|
|
10.72
|
|
Distributor Sales Agreement by and among Alon USA Partners, LP and Southwest Convenience Stores, LLC, dated November 26, 2012 (incorporated by reference to Exhibit 10.4 to Form 8-K, filed by the Company on November 26, 2012, SEC File No. 001-32567).
|
|
10.73
|
|
Offtake Agreement by and among Alon USA, LP and Paramount Petroleum Corporation, dated November 26, 2012 (incorporated by reference to Exhibit 10.5 to Form 8-K, filed by the Company on November 26, 2012, SEC File No. 001-32567).
|
|
10.74
|
|
Contribution, Conveyance and Assumption Agreement by and among Alon Assets, Inc., Alon USA Partners GP, LLC, Alon USA Partners, LP, Alon USA Energy, Inc., Alon USA Refining, LLC, Alon USA Operating, Inc., Alon USA, LP and Alon USA GP, LLC, dated November 26, 2012 (incorporated by reference to Exhibit 10.6 to Form 8-K, filed by the Company on November 26, 2012, SEC File No. 001-32567).
|
|
10.75
|
|
Second Amended Revolving Credit Agreement, dated as of May 23, 2013, by and among Alon USA, LP, Israel Discount Bank of New York, Bank Leumi USA and certain other guarantor companies and financial institutions from time to time named therein (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on May 24, 2013, SEC File No. 001-32567).
|
|
10.76
|
|
Second Amendment to Second Amended and Restated Revolving Credit Agreement, dated May 6, 2015, by and among Alon USA, LP, Israel Discount Bank of New York, Bank Leumi USA and certain other guarantor companies and financial institutions from time to time named therein (incorporated by reference to Exhibit 10.4 to Form 10-Q filed by the Company on May 8, 2015, SEC File No. 001-32567).
|
|
10.77
|
|
Base Bond Hedge Confirmation dated as of September 10, 2013, by and between Alon USA Energy, Inc. and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.1 to Form 8-K, filed by the Company on September 16, 2013, SEC File No. 001-32567).
|
|
10.78
|
|
Base Bond Hedge Confirmation dated as of September 10, 2013, by and between Alon USA Energy, Inc. and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.2 to Form 8-K, filed by the Company on September 16, 2013, SEC File No. 001-32567).
|
|
10.79
|
|
Additional Bond Hedge Confirmation dated as of September 11, 2013, by and between Alon USA Energy, Inc. and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.3 to Form 8-K, filed by the Company on September 16, 2013, SEC File No. 001-32567).
|
|
10.80
|
|
Additional Bond Hedge Confirmation dated as of September 11, 2013, by and between Alon USA Energy, Inc. and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.4 to Form 8-K, filed by the Company on September 16, 2013, SEC File No. 001-32567).
|
|
10.81
|
|
Base Warrant Confirmation dated as of September 10, 2013, by and between Alon USA Energy, Inc. and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.5 to Form 8-K, filed by the Company on September 16, 2013, SEC File No. 001-32567).
|
|
10.82
|
|
Base Warrant Confirmation dated as of September 10, 2013, by and between Alon USA Energy, Inc. and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.6 to Form 8-K, filed by the Company on September 16, 2013, SEC File No. 001-32567).
|
|
10.83
|
|
Additional Warrant Confirmation dated as of September 11, 2013, by and between Alon USA Energy, Inc. and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.7 to Form 8-K, filed by the Company on September 16, 2013, SEC File No. 001-32567).
|
|
10.84
|
|
Additional Warrant Confirmation dated as of September 11, 2013, by and between Alon USA Energy, Inc. and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.8 to Form 8-K, filed by the Company on September 16, 2013, SEC File No. 001-32567).
|
|
21.1
|
|
Subsidiaries of Alon USA Energy, Inc. (incorporated by reference to Exhibit 21.1 to Form 10-K, filed by the Company on February 27, 2017, SEC File No. 001-32567).
|
|
23.1
|
|
Consent of KPMG LLP. (incorporated by reference to Exhibit 23.1 to Form 10-K, filed by the Company on February 27, 2017, SEC File No. 001-32567).
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description of Exhibit
|
|
31.1
|
|
Certifications of Chief Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002. (incorporated by reference to Exhibit 31.1 to Form 10-K, filed by the Company on February 27, 2017, SEC File No. 001-32567).
|
|
31.2
|
|
Certifications of Chief Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002. (incorporated by reference to Exhibit 31.2 to Form 10-K, filed by the Company on February 27, 2017, SEC File No. 001-32567).
|
|
31.3
|
|
Certifications of Chief Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
|
31.4
|
|
Certifications of Chief Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002. (incorporated by reference to Exhibit 32.1 to Form 10-K, filed by the Company on February 27, 2017, SEC File No. 001-32567).
|
|
101
|
|
The following financial information from Alon USA Energy, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statement of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements. (incorporated by reference to Exhibit 101 to Form 10-K, filed by the Company on February 27, 2017, SEC File No. 001-32567).
|
________________________
|
|
|
|
*
|
Identifies management contracts and compensatory plans or arrangements.
|
|
|
|
|
†
|
Filed under confidential treatment request.
|
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
|
|
Date:
|
April 28, 2017
|
By:
|
/s/ Alan Moret
|
|
|
|
|
Alan Moret
|
|
|
|
|
Interim Chief Executive Officer
|
MANAGEMENT EMPLOYMENT AGREEMENT
This Agreement is entered into between James A. Ranspot ("Manager") and Alon USA GP, LLC, a Delaware limited liability company ("Employer" or "Company"), on November 18
,
2013, who, in return for the mutual promises set forth herein, agree as follows:
1.
Position/Term.
(a) The term of the Manager's employment hereunder shall be deemed to have commenced as of November 18, 2013.
(b) Throughout the term of this Agreement, Employer shall employ Manager and Manager shall render services to Employer in the capacity and with the title of Senior Vice President, General Counsel and Secretary of Alon USA Energy, Inc. and its subsidiaries, or such other title as may be established by Employer from time to time. Manager shall devote his full time and best effort to the successful functioning of the business of Employer and shall faithfully and industriously perform all duties pertaining to his position, including such additional duties as may be assigned from time to time, to the best of Manager's ability, experience and talent. Manager shall be subject at all times during the term hereof to the direction and control of Employer in respect of the work to be done.
(c) Manager's employment hereunder shall be for an initial term of five years. Thereafter, the term shall renew automatically each year for a term of one year, unless either party provides the other with written notice at least 30 days prior to the expiration of the term.
2.
Compensation.
(a) Manager's salary ("Base Compensation") shall be $281,900 per year, payable bi-weekly (unless the payroll practice of the Company changes to monthly or semi-monthly) in arrears and subject to change only with the mutual written consent of Employer and Manager. The Company maintains guidelines for annual merit increases for salaries of all salaried employees/management, including Manager.
(b) Manager shall be entitled to participate in the Alon USA Annual Cash Bonus Plan which will be subject to modification in the sole discretion of the Company without advanced notice from time to time as set forth therein. For purposes of determining the Manager's Target Bonus Amount under such plan, the Manager shall participate up to an amount equal to one-hundred percent (100%) of base compensation.
3.
Fringe Benefits; Reimbursement of Expenses.
Employer shall make available, or cause to be made available to Manager, throughout the period of his employment hereunder, such benefits, including any disability, hospitalization, medical benefits, life insurance, pension plan or other benefits or policy, as may be put into effect from time to time by Employer generally for other management members at the level of Manager. The Company expressly reserves the right to modify such benefits at any time.
Manager will be reimbursed for all reasonable out-of-pocket business, business entertainment and travel expenses paid by the Manager, in accordance with and subject to applicable Company expense incurrence and reimbursement policies. Any expense reimbursements required to be made under this Agreement will be for expenses incurred by Manager during the term of this Agreement, and such reimbursements will be made not later
than December 31st of the year following the year in which Manager incurs the expense; provided, that in no event will the amount of expenses eligible for payment or reimbursement in one calendar year affect the amount of expenses to be paid or reimbursed in any other calendar year. Manager's right to expense reimbursement will not be subject to liquidation or exchange for another benefit.
4.
Vacation.
The number of vacation days to which Manager shall be entitled each year shall be based on the years of service of the Manager for Employer as follows - 15 days up to 10 years, 20 days after 10 years, 25 days after 20 years, and 30 days after 30 years. Unless otherwise agreed, vacation may not be carried over into a new calendar year. Vacation time shall be taken only after providing reasonable notice to the person to whom the Manager reports.
5.
Compliance With Employer Policies.
Manager shall comply with and abide by all employment policies and directives of Employer. Employer may, in its sole discretion, change, modify or adopt new policies and directives affecting Manager's employment. In the event of any conflict between the terms of this Agreement and Employer's employment policies and directives, the terms of this Agreement will be controlling.
6.
Restrictive Covenant.
In consideration of the confidential business information that Employer promises to provide Manager access or exposure to during the term of employment as described in paragraph 7 of the Agreement, Manager agrees to the following restrictive covenants:
(a) Manager agrees that during the term of Manager's employment with Employer and for a period of one year following any termination of Manager's employment, if the Manager terminates employment during the first two years of Manager's employment, or nine months, if the Manager terminates employment after the first two years of employment and before the completion of five years of employment (the ''Non-Compete Period"), Manager will not, without the prior written consent of Employer, directly or indirectly, either as an individual or as an employee, officer, director, shareholder, partner, sole proprietor, independent contractor, consultant or in any other capacity conduct any business, or assist any person in conducting any business, that is in competition with the business of Employer or its Affiliates (as defined below).
(b) In addition to any other covenants or agreements to which Manager may be subject, during the Non-Compete Period, Manager will not, directly or indirectly, either as an individual or as an employee, officer, director, shareholder, partner, sole proprietor, independent contractor, consultant or in any other capacity whatsoever approach or solicit any customer or vendor of Employer with whom the Manager had contact or received information about during the course of employment for the purpose of causing, directly or indirectly, any such customer or vendor to cease doing business with Employer or its Affiliates.
For the purposes of this Agreement, the "business of Employer or its Affiliates" means the business of refining petroleum distillates and the wholesale distribution of such products in the Territory. The term "Affiliates" means all subsidiaries of Employer and each person or entity that controls, is controlled by, or is under common control with Employer. The "Territory" means the states of Texas, New Mexico, Arizona, California, Oregon, Washington and Nevada. It is understood and agreed that the scope of each of the covenants contained in this Section 6 is
reasonable as to time, area, and persons and is necessary to protect the legitimate business interest of Employer. It is further agreed that such covenants will be regarded as divisible and will be operative as to time, area and persons to the extent that they may be so operative. The terms of this Section 6 shall not apply to the ownership by Manager of less than 5% of a class of equity securities of an entity, which securities are publicly traded on the New York Stock Exchange, the American Stock Exchange, or the National Market System of the National Association of Securities Dealers Automated Quotation System. The provisions of this Section 6 will survive any termination or expiration of this Agreement.
7.
Confidentiality.
(a) During the course of employment, Employer promises to provide Manager with access or exposure to information or ideas of a confidential or proprietary nature which pertain to an area of Employer's business, financial, legal, marketing, administrative, personnel, technical or other functions or which constitute trade secrets (including, but not limited to, as examples specifications, designs, plans, drawings, software, data, prototypes, the identity of sources and markets, marketing information and strategies; business and financial plans and strategies, methods of doing business; data processing and management information and technical systems, programs and practices; customers and users and their needs, sales history; and financial strength), and such information of third parties which has been provided to Employer in confidence ("Confidential Information"). All such information is deemed "confidential" or "proprietary'' whether or not it is so marked, provided that it is maintained as confidential by the Company. Information will not be considered to be Confidential Information to the extent that it is generally available to the public. Nothing in this Section 7 will prohibit the use or disclosure by Manager of knowledge that is in general use in the industry or general business knowledge.
(b)
Manager shall hold Confidential Information in confidence, use it only in connection with the performance of duties on behalf of Employer, and restrict its disclosure to those directors, employees or independent contractors of Employer having a need to know.
(c)
Manager shall not disclose, copy or use Confidential Information for the benefit of anyone other than Employer without Employer's prior written consent.
(d)
Manager shall, upon Employer's request or Manager's termination of employment, return to Employer any and all written documents containing Confidential Information in Manager's possession, custody or control.
8.
Non-Interference with Employment Relationships.
In consideration of the confidential business information that Employer promises to provide Manager access or exposure to during the term of employment as described in paragraph 7 of this Agreement, Manager promises that during the term of his/her employment with Employer, and for a period of one (1) year thereafter, Manager shall not, without Employer's prior written consent, directly or indirectly: (a) induce or attempt to induce any employee to leave the Employer's employ; or (b) interfere with or disrupt the Employer's relationship with any of its employees or independent contractors.
9.
Copyright, Inventions, Patents.
Employer shall have all right, title and interest to all features (including, but not limited to, graphic designs, copyrights, trademarks and patents) created during the course of or resulting from Manager's employment with Employer. Manager
hereby assigns to Employer all copyright ownership and rights to any work developed by Manager and reduced to practice for or on behalf of Employer or which relate to Employer's business during the course of the employment relationship. At Employer's expense, Manager shall do all other things including, but not limited to, the giving of evidence in suits and proceedings, and the furnishing and/or assigning of all documentation and other materials relative to Employer's intellectual property rights, necessary or appropriate for Employer to obtain, maintain, and assert its rights in such work.
10.
Termination of Employment.
(a) Employer may terminate Manager's employment hereunder at any time for Cause. For purposes hereof, Cause shall mean: (i) conviction of a felony or a misdemeanor where imprisonment is imposed for more than 30 days; (ii) commission of any act of theft, fraud, dishonesty, or falsification of any employment or Employer records; (iii) improper disclosure of Confidential Information; (iv) any intentional action by the Manager having a material detrimental effect on the Company's reputation or business; (v) any material breach of this Agreement, which breach is not cured within ten (10) business days following receipt by Manager of written notice of such breach; (vi) unlawful appropriation of a corporate opportunity; or (vii) intentional misconduct in connection with the performance of any of Manager's duties, including, without limitation, misappropriation of funds or property of the Company, securing or attempting to secure to the detriment of the Company any profit in connection with any transaction entered into on behalf of the Company, any material misrepresentation to the Company, or any knowing violation of law or regulations to which the Company is subject. Upon termination of Manager's employment with the Company for Cause, the Company shall be under no further obligation to Manager, except to pay all earned but unpaid Base Compensation and all accrued benefits and vacation to the date of termination (and to the extent required by law).
(b)
Employer may terminate Manager's employment hereunder without Cause, or Manager may terminate his employment hereunder for Good Reason, upon not less than thirty (30) days prior written notice. In the event of any such termination, Manager shall be entitled to receive his Base Compensation through the termination date and any annual bonus entitlement, prorated for the number of months of employment for the fiscal year in question, all accrued benefits and vacation to the date of termination (and to the extent required by law), plus, during the first two years of Manager's employment hereunder, an amount of severance payment equal to one year's Base Compensation as in effect immediately before any notice of termination, or, after the first two years of Manager's employment hereunder, an amount of severance payment equal to nine months' Base Compensation as in effect immediately before any notice of termination. "Good Reason" means (i) without the Manager's prior written consent, the Employer reduces Manager's Base Compensation or the percentage of Manager's Base Compensation established as Manager's maximum target bonus percentage for purposes of Employer's annual cash bonus plan, (ii) any material breach of this Agreement, which breach is not cured within ten ( 10) business days following receipt by Employer of written notice of such breach; and (iii) the delivery by Employer of notice pursuant to Section 1 (c) of this Agreement that it does not wish this Agreement to automatically renew for any subsequent year.
(c)
Manager may terminate the employment relationship hereunder with not less than thirty (30) days prior written notice. Upon any such termination of Manager's employment, other than for Good Reason, the Company shall be under no further obligation to Manager, except to
pay all earned but unpaid Base Compensation and all accrued benefits and vacation to the date of termination (and to the extent required by law).
(d)
To the extent that a payment becomes due to Manager under this Section 10 by reason of Manager's termination of employment, (i) the term "termination of employment" will have the same meaning as "separation from service" under Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) except as provided in Section 10(e) below, all such payments will be made in a single lump sum no later than 60 days after the date on which Manager terminates employment.
(e)
If the Company makes a good faith determination that a payment under this Agreement (i) constitutes a deferral of compensation for purposes of Section 409A of the Code, (ii) is made to Manager by reason of his separation from service and (iii) at the time such payment would otherwise be made Manager is a "specified employee" as hereinafter defined, the payment will be delayed until the first day of the seventh month following the date of such termination of employment and will bear interest at the prime rate of interest as published in the Wall Street Journal on the first business day following the date of Manager's termination of employment. For purposes of this Section 10, a specified employee is an officer of Alon USA Energy, Inc. with annual compensation in excess of $150,000 (as adjusted for years after 2008), provided that only the 50 highest paid officers of Alon USA Energy, Inc. may constitute "specified employees" for any 12-month period. An individual who is identified as a one of the 50 highest paid officers during any portion of a calendar year will be a specified employee for purposes of the Agreement during the 12-month period beginning on April 1 of the following calendar year.
(f)
The provisions of Sections 6, 7, 8 and 9 of this Agreement will continue in effect notwithstanding any termination of Manager's employment.
11.
Mediation and Arbitration.
(a) Employer and Manager hereby state their mutual desire for any dispute concerning a legally cognizable claim arising out of this Agreement or in connection with the employment of Manager by Employer, including, but not limited to, claims of breach of contract, fraud, unlawful termination, discrimination, harassment, workers' compensation retaliation, defamation, tortious infliction of emotional distress, unfair competition, and conversion ("Legal Dispute"), to be resolved amicably, if possible, and without the need for litigation.
(b)
Based on this mutual desire, in the event a Legal Dispute arises, the parties shall utilize the following protocol:
(i) The parties shall first submit the Legal Dispute to mediation under the auspices of the American Arbitration Association ("AAA") and pursuant to the mediation rules and procedures promulgated by the AAA.
(ii) In the event mediation is unsuccessful in fully resolving the Legal Dispute, binding arbitration shall be the method of final resolution of the Legal Dispute. The parties expressly waive their rights to bring action against one another in a court of law, except as expressly provided in subsection (d). The parties hereto acknowledge that failure to comply with this provision shall entitle the non-breaching party not only to damages, but also to
injunctive relief to enjoin the actions of the breaching party. Any Legal Dispute submitted to Arbitration shall be under the auspices of the AAA and pursuant to the "National Rules for the Resolution of Employment Disputes," or any similar identified rules promulgated at such time the Legal Dispute is submitted for resolution. All mediation and arbitration hearings shall take place in Dallas, Texas.
(c)
Notice of submission of any Legal Dispute to mediation shall be provided no later than three hundred sixty-five (365) calendar days following the date the submitting party became aware of the conduct constituting the alleged claims. Failure to do so shall result in the irrevocable waiver of the claim made in the Legal Dispute.
(d)
Notwithstanding that mediation and arbitration are established as the exclusive procedures for resolution of any Legal Dispute, (i) either party may apply to an appropriate judicial or administrative forum for injunctive relief and (ii) claims by Employer arising in connection with paragraphs 6, 7, 8 or 9 may be brought in any court of competent jurisdiction.
(e)
Each party acknowledges that a remedy at law for any breach or attempted breach of paragraphs 6, 7, 8 or 9 of this Agreement will be inadequate, agrees that Employer will be entitled to specific performance and injunctive and other equitable relief in case of any breach or attempted breach, and agrees not to use as a defense that any party has an adequate remedy at law. This Agreement shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate injunctive relief may be applied for and granted in connection herewith. Such remedy shall not be exclusive and shall be in addition to any other remedies now or hereafter existing at law or in equity, by statute or otherwise. Except as provided in subsection (c) no delay or omission in exercising any right or remedy set forth in this Agreement shall operate as a waiver thereof or of any other right or remedy and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
12.
Assignment.
This Agreement shall not be assignable by either party except that upon any sale or transfer of all or substantially all of its business by Employer, Employer may assign this Agreement to its successor; any failure to make such an assignment will be considered to constitute the termination of Manager's employment without cause effective upon the closing of the referenced transaction.
13.
No Inducement, Agreement Voluntary.
Manager represents that (a) he has not been pressured, misled, or induced to enter into this Agreement based upon any representation by Employer or its agents not contained herein, (b) he has entered into this Agreement voluntarily, after having the opportunity to consult with representatives of his own choosing and that (c) his agreement is freely given.
14.
Interpretation and Severability.
Any paragraph, phrase or other provision of this Agreement that is determined by a court, arbitrator or arbitration panel of competent jurisdiction to be unreasonable or in conflict with any applicable statute or rule, shall be deemed, if possible, to be modified or altered so that it is not unreasonable or in conflict or, if that is not possible, then it shall be deemed omitted from this Agreement. The invalidity of any portion of this Agreement shall not affect the validity of the remaining portions. Further, should any
clause, sentence, provision, paragraph, or part of this Agreement be adjudged by any court of competent jurisdiction, or be held by any other competent governmental authority having jurisdiction, to be illegal, invalid, or unenforceable, such judgment or holding shall not affect, impair, or invalidate the remainder of the Agreement, but shall be confined to the greatest extent possible in its operation to the particular clause, sentence, provision, paragraph, or part of the agreement directly involved, and the remainder of the Agreement shall remain in full force and effect.
15.
Prior Agreements Superseded; Amendments.
This Agreement revokes and supersedes all prior agreements, written and oral, and represents the entire agreement between the parties in relation to the employment of the Manager by the Company after the Commencement Date and, except as provided in Section 17 below, shall not be subject to modification or amendment by any oral representation, or any written statement by either party, except for a dated writing signed by the Manager and the Employer.
16.
Section 409A of the Code.
To the extent that any payment made under this Agreement constitutes a deferral of compensation subject to Section 409A of the Code, the time of such payment may not be accelerated except to the extent permitted by Section 409A of the Code. Where Section 409A of the Code permits a payment or benefit that constitutes a deferral of compensation to be accelerated, the payment or benefit may be accelerated in the sole discretion of the Company. Notwithstanding any provision of this Agreement to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Agreement as the Company deems necessary or desirable solely to avoid the imposition of taxes or penalties under Section 409A of the Code.
17.
Notices.
All notices, demands and requests of any kind to be delivered in connection with this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by nationally-recognized overnight courier or by registered or certified mail, return receipt requested and postage prepaid, addressed as follows:
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(a)
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if to the Company,to:
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Alon USA GP, LLC
Attention: Human Resources
12700 Park Central Dr., Suite 1600
Dallas, TX 75251
Telecopy number: (972) 367-3724
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(b)
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if to Manager, to the address of Manager set forth on the signature page hereto;
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or to such other address as the party to whom notice is to be given may have furnished to the other in writing in accordance with the provisions of this Section 17. Any such notice or communication shall be deemed to have been received: (i) in the case of personal delivery, on the date of such delivery; (ii) in the case of nationally-recognized overnight courier, on the next business day after the date sent; and (iii) if by registered or certified mail, on the third business day following the date postmarked.
18.
Applicable Law. This
Agreement shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to principles of conflicts of law.
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MANAGER:
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EMPLOYER:
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James A. Ranspot
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ALON USA GP, LLC
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/s/ James Ranspot
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By:
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/s/ Paul Eisman
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Name:
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Paul Eisman
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Title:
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Chief Executive Officer
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Address for notices:
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9321 Waterview Road
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Dallas, Texas 75218
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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement (this "Amendment") is entered into effective as of July 22, 2015 (the "Effective Date") by and between James Ranspot ("Manager") and Alon USA GP, LLC, a Delaware limited liability company ("Employer" or the "Company"). Employer and Manager are sometimes referred to herein individually as a "Party" or collectively as the "Parties."
WHEREAS, the Parties entered into that certain Employment Agreement effective November 18, 2013 (the "Agreement"), which set forth the terms of Manager's employment as Senior Vice President, General Counsel and Secretary of Alon USA Energy, Inc. and its subsidiaries;
WHEREAS, the Company and Manager desire to enter into this Amendment in order to modify the severance benefits thereunder;
NOW, THEREFORE, in consideration of the mutual promises and covenants, and agreements, and subject to the terms and conditions, herein contained, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, intending to be legally bound, the Parties hereby agree as follows:
1.
A new Section l(c) is hereby added to the Agreement as follows:
"(c) Manager shall be entitled to participate in and receive any additional cash payment made, or other consideration given, as a result of the consummation of a Fundamental Transaction, if any, in an amount or manner comparable to such consideration received by other executive officers of the Company."
2.
Sections 10(a)-(c) of the Agreement are hereby amended and restated in their entirety as follows:
"10.
Termination of Employment.
(a) Employer may terminate Manager's employment hereunder at any for Cause immediately, or without Cause upon not less than thirty (30) days' prior written notice. Upon termination of Manager's employment with the Company for Cause or without Cause, Manager shall be entitled to receive his Base Compensation through the termination date and any annual bonus entitlement, prorated for the number of months of employment for the fiscal year in question, all accrued benefits and vacation to the date of termination (and to the extent required by law), plus an additional amount of severance payment equal to two years' Base Compensation as in effect immediately before any notice of termination. For purposes hereof, "Cause" shall mean: (i) conviction of a felony or a misdemeanor where imprisonment is imposed for more than 30 days; (ii) commission of any act of theft, fraud, dishonesty, or falsification of any employment or Employer records; (iii) improper disclosure of Confidential Information; (iv) any intentional action by the Manager having a material detrimental effect on the Company's reputation or business; (v) any material breach of this Agreement, which breach is not cured within ten (10) business days following receipt by Manager of written notice of such breach; (vi) unlawful appropriation of a corporate opportunity; or (vii) intentional misconduct in connection with the performance of any of
Manager's duties, including, without limitation, misappropriation of funds or property of the Company, securing or attempting to secure to the detriment of the Company any profit in connection with any transaction entered into on behalf of the Company, any material misrepresentation to the Company, or any knowing violation of law or regulations to which the Company is subject.
(b)
Manager may terminate his employment hereunder for Good Reason upon not less than thirty (30) days prior written notice. In the event of any such termination, Manager shall be entitled to receive his Base Compensation through the termination date and any annual bonus entitlement, prorated for the number of months of employment for the fiscal year in question, all accrued benefits and vacation to the date of termination (and to the extent required by law), plus an additional amount of severance payment equal to two years' Base Compensation as in effect immediately before any notice of termination. "Good Reason" means (i) without the Manager's prior written consent, the Employer changes Manager's title, reduces his current responsibilities, reduces Manager's Base Compensation or the percentage of Manager's Base Compensation established as Manager's maximum target bonus percentage for purposes of Employer's annual cash bonus plan, or fails to continue in effect defined benefit pension plans having vesting and benefit terms substantially similar to those of the defined benefit plans maintained by the Company for the benefit of Manager prior to the Commencement Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan providing the Manager with substantially similar benefits) has been made with respect to such plan; (ii) any material breach of this Agreement, which breach is not cured within ten (10) business days following receipt by Employer of written notice of such breach; (iii) Employer requires Manager to be based at an office or location that is more than thirty-five (35) miles from the location at which Manager was based as of the Commencement Date, other than in connection with reasonable travel requirements of Employer's business; (iv) the delivery by Employer of notice pursuant to Section 1 (c) of this Agreement that it does not wish this Agreement to automatically renew for any subsequent year or (v) any time on or after the Transition Date.
(c)
Manager may submit his resignation other than for Good Reason, upon not less than thirty (30) days prior written notice. In the event of any such resignation, Manager shall be entitled to receive his Base Compensation through the termination date and any accrued benefits and vacation to the date of termination (and to the extent required by law).
"Transition Date"
shall mean the date that is the 90th calendar day following the closing of a Fundamental Transaction.
"Fundamental Transaction"
means that (A) Alon USA Energy, Inc. ("Alon Energy") shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not Alon Energy is the surviving corporation) another person or persons, (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of Alon Energy to another person, (iii) allow another person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of voting stock of Alon Energy (not including any shares of voting stock of Alon Energy held by the Person or Persons making or party to, or associated or affiliated with the persons making or party to, such purchase, tender or exchange offer), (iv) consummate a securities purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person whereby such other person acquires more than the 50% of the outstanding shares of
voting stock of Alon Energy (not including any shares of voting stock of Alon Energy held by the other person or other persons making or party to, or associated or affiliated with the other persons making or party to, such securities purchase agreement or other business combination), or (v) reorganize, recapitalize or reclassify its Common Stock or (B) any "person" or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by the issued and outstanding Common Stock and any corporate functions or groups of personnel (i.e., treasury, credit, tax, legal, information technology, supply) are relocated or transferred from or to such person's corporate offices."
Except as set forth in this Amendment, the Agreement is unaffected and shall continue in full force and effect in accordance with its terms.
If
there is any conflict between this Amendment and the Agreement, the terms of this Amendment shall prevail.
This Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Amendment effective as of the Effective Date.
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MANAGER:
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EMPLOYER:
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James A. Ranspot
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ALON USA GP, LLC
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/s/ James Ranspot
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By:
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/s/ Paul Eisman
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Name:
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Paul Eisman
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Title:
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Chief Executive Officer
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MANAGEMENT EMPLOYMENT AGREEMENT
This Agreement is entered into between Jimmy C. Crosby ("Manager") and Alon USA GP, LLC, a Delaware limited liability company ("Employer" or "Company"), on March 1, 2013, who, in return for the mutual promises set forth herein, agree as follows:
1.
Position/Term.
(a) The term of the Manager's employment hereunder shall be deemed to have commenced as of March 1, 2013.
(b) Throughout the term of this Agreement, Employer shall employ Manager and Manager shall render services to Employer in the capacity and with the title of Senior Vice President - Refining of Alon USA Energy, Inc., or such other title as may be established by Employer from time to time. Manager shall devote his full time and best effort to the successful functioning of the business of Employer and shall faithfully and industriously perform all duties pertaining to his position, including such additional duties as may be assigned from time to time, to the best of Manager's ability, experience and talent. Manager shall be subject at all times during the term hereof to the direction and control of Employer in respect of the work to be done.
(c) Manager's employment hereunder shall be for an initial term of five years. Thereafter, the term shall renew automatically each year for a term of one year, unless either party provides the other with written notice at least 30 days prior to the expiration of the term.
2.
Compensation.
(a) Manager's salary ("Base Compensation") shall be $275,000 per year, payable bi-weekly (unless the payroll practice of the Company changes to monthly or semi-monthly) in arrears and subject to change only with the mutual written consent of Employer and Manager. The Company maintains guidelines for annual merit increases for salaries of all salaried employees/management, including Manager.
(b) Manager shall be entitled to participate in the Alon USA Annual Cash Bonus Plan which will be subject to modification in the sole discretion of the Company without advanced notice from time to time as set forth therein. For purposes of determining the Manager's Target Bonus Amount under such plan, the Manager shall participate up to an amount equal to one-hundred percent (100%) of base compensation.
3.
Fringe Benefits; Reimbursement of Expenses.
Employer shall make available, or cause to be made available to Manager, throughout the period of his employment hereunder, such benefits, including any disability, hospitalization, medical benefits, life insurance, pension plan or other benefits or policy, as may be put into effect from time to time by Employer generally for other management members at the level of Manager. The Company expressly reserves the right to modify such benefits at any time.
Manager will be reimbursed for all reasonable out-of-pocket business, business entertainment and travel expenses paid by the Manager, in accordance with and subject to applicable Company expense incurrence and reimbursement policies. Any expense reimbursements required to be made under this Agreement will be for expenses incurred by Manager during the term of this Agreement, and such reimbursements will be made not later than December 31st of the year following the year in which Manager incurs the expense;
provided, that in no event will the amount of expenses eligible for payment or reimbursement in one calendar year affect the amount of expenses to be paid or reimbursed in any other calendar year. Manager's right to expense reimbursement will not be subject to liquidation or exchange for another benefit.
4.
Vacation.
The number of vacation days to which Manager shall be entitled each year shall be based on the years of service of the Manager for Employer as follows - 15 days up to 10 years, 20 days after 10 years, 25 days after 20 years, and 30 days after 30 years. Unless otherwise agreed, vacation may not be carried over into a new calendar year. Vacation time shall be taken only after providing reasonable notice to the person to whom the Manager reports.
5.
Compliance With Employer Policies.
Manager shall comply with and abide by all employment policies and directives of Employer. Employer may, in its sole discretion, change, modify or adopt new policies and directives affecting Manager's employment. In the event of any conflict between the terms of this Agreement and Employer's employment policies and directives, the terms of this Agreement will be controlling.
6.
Restrictive Covenant.
In consideration of the confidential business information that Employer promises to provide Manager access or exposure to during the term of employment as described in paragraph 7 of the Agreement, Manager agrees to the following restrictive covenants:
(a)
Manager agrees that during the term of Manager's employment with Employer and for a period of one year following any termination of Manager's employment, if the Manager terminates employment during the first two years of Manager's employment, or nine months, if the Manager terminates employment after the first two years of employment and before the completion of five years of employment (the "Non-Compete Period"), Manager will not, without the prior written consent of Employer, directly or indirectly, either as an individual or as an employee, officer, director, shareholder, partner, sole proprietor, independent contractor, consultant or in any other capacity conduct any business, or assist any person in conducting any business, that is in competition with the business of Employer or its Affiliates (as defined below).
(b)
In addition to any other covenants or agreements to which Manager may be subject, during the Non-Compete Period, Manager will not, directly or indirectly, either as an individual or as an employee, officer, director, shareholder, partner, sole proprietor, independent contractor, consultant or in any other capacity whatsoever approach or solicit any customer or vendor of Employer with whom the Manager had contact or received information about during the course of employment for the purpose of causing, directly or indirectly, any such customer or vendor to cease doing business with Employer or its Affiliates.
For the purposes of this Agreement, the "business of Employer or its Affiliates" means the business of refining petroleum distillates and the wholesale distribution of such products in the Territory. The term "Affiliates" means all subsidiaries of Employer and each person or entity that controls, is controlled by, or is under common control with Employer. The "Territory" means the states of Texas, New Mexico, Arizona, California, Oregon, Washington and Nevada.
It
is understood and agreed that the scope of each of the covenants contained in this Section 6 is reasonable as to time, area, and persons and is necessary to protect the legitimate business
interest of Employer.
It
is further agreed that such covenants will be regarded as divisible and will be operative as to time, area and persons to the extent that they may be so operative. The terms of this Section 6 shall not apply to the ownership by Manager of less than 5% of a class of equity securities of an entity, which securities are publicly traded on the New York Stock Exchange, the American Stock Exchange, or the National Market System of the National Association of Securities Dealers Automated Quotation System. The provisions of this Section 6 will survive any termination or expiration of this Agreement.
7.
Confidentiality.
(a) During the course of employment, Employer promises to provide Manager with access or exposure to information or ideas of a confidential or proprietary nature which pertain to an area of Employer's business, financial, legal, marketing, administrative, personnel, technical or other functions or which constitute trade secrets (including, but not limited to, as examples specifications, designs, plans, drawings, software, data, prototypes, the identity of sources and markets, marketing information and strategies; business and financial plans and strategies, methods of doing business; data processing and management information and technical systems, programs and practices; customers and users and their needs, sales history; and financial strength), and such information of third parties which has been provided to Employer in confidence ("Confidential Information"). All such information is deemed "confidential" or "proprietary" whether or not it is so marked, provided that it is maintained as confidential by the Company. Information will not be considered to be Confidential Information to the extent that it is generally available to the public. Nothing in this Section 7 will prohibit the use or disclosure by Manager of knowledge that is in general use in the industry or general business knowledge.
(b)
Manager shall hold Confidential Information in confidence, use it only in connection with the performance of duties on behalf of Employer, and restrict its disclosure to those directors, employees or independent contractors of Employer having a need to know.
(c)
Manager shall not disclose, copy or use Confidential Information for the benefit of anyone other than Employer without Employer's prior written consent.
(d)
Manager shall, upon Employer's request or Manager's termination of employment, return to Employer any and all written documents containing Confidential Information in Manager's possession, custody or control.
8.
Non-Interference with Employment Relationships.
In consideration of the confidential business information that Employer promises to provide Manager access or exposure to during the term of employment as described in paragraph 7 of this Agreement, Manager promises that during the term of his/her employment with Employer, and for a period of one (1) year thereafter, Manager shall not, without Employer's prior written consent, directly or indirectly: (a) induce or attempt to induce any employee to leave the Employer's employ; or (b) interfere with or disrupt the Employer's relationship with any of its employees or independent contractors.
9.
Copyright, Inventions, Patents.
Employer shall have all right, title and interest to all features (including, but not limited to, graphic designs, copyrights, trademarks and patents) created during the course of or resulting from Manager's employment with Employer. Manager hereby assigns to Employer all copyright ownership and rights to any work developed by
Manager and reduced to practice for or on behalf of Employer or which relate to Employer's business during the course of the employment relationship. At Employer's expense, Manager shall do all other things including, but not limited to, the giving of evidence in suits and proceedings, and the furnishing and/or assigning of all documentation and other materials relative to Employer's intellectual property rights, necessary or appropriate for Employer to obtain, maintain, and assert its rights in such work.
10.
Termination of Employment.
(a) Employer may terminate Manager's employment hereunder at any time for Cause. For purposes hereof, Cause shall mean: (i) conviction of a felony or a misdemeanor where imprisonment is imposed for more than 30 days;(ii) commission of any act of theft, fraud, dishonesty, or falsification of any employment or Employer records; (iii) improper disclosure of Confidential Information; (iv) any intentional action by the Manager having a material detrimental effect on the Company's reputation or business; (v) any material breach of this Agreement, which breach is not cured within ten (10) business days following receipt by Manager of written notice of such breach; (vi) unlawful appropriation of a corporate opportunity; or (vii) intentional misconduct in connection with the performance of any of Manager's duties, including, without limitation, misappropriation of funds or property of the Company, securing or attempting to secure to the detriment of the Company any profit in connection with any transaction entered into on behalf of the Company, any material misrepresentation to the Company, or any knowing violation of law or regulations to which the Company is subject. Upon termination of Manager's employment with the Company for Cause, the Company shall be under no further obligation to Manager, except to pay all earned but unpaid Base Compensation and all accrued benefits and vacation to the date of termination (and to the extent required by law).
(b) Employer may terminate Manager’s employment hereunder without Cause, or Manager may terminate his employment hereunder for Good Reason, upon not less than thirty (30) days prior written notice. In the event of any such termination, Manager shall be entitled to receive his Base Compensation through the termination date and any annual bonus entitlement, prorated for the number of months of employment for the fiscal year in question, all accrued benefits and vacation to the date of termination (and to the extent required by law), plus, during the first two years of Manager's employment hereunder, an amount of severance payment equal to one year's Base Compensation as in effect immediately before any notice of termination, or, after the first two years of Manager's employment hereunder, an amount of severance payment equal to nine months' Base Compensation as in effect immediately before any notice of termination. "Good Reason" means (i) without the Manager's prior written consent, the Employer reduces Manager's Base Compensation or the percentage of Manager's Base Compensation established as Manager's maximum target bonus percentage for purposes of Employer's annual cash bonus plan, (ii) any material breach of this Agreement, which breach is not cured within ten (10) business days following receipt by Employer of written notice of such breach; and (iii) the delivery by Employer of notice pursuant to Section 1 (c) of this Agreement that it does not wish this Agreement to automatically renew for any subsequent year.
(c) Manager may terminate the employment relationship hereunder with not less than thirty (30) days prior written notice. Upon any such termination of Manager's employment, other than for Good Reason, the Company shall be under no further obligation to Manager, except to pay all earned but unpaid Base Compensation and all accrued benefits and vacation to the date of termination (and to the extent required by law).
(d) To the extent that a payment becomes due to Manager under this Section 10 by reason of Manager's termination of employment, (i) the term "termination of employment" will have the same meaning as "separation from service" under Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) except as provided in Section l 0(e) below, all such payments will be made in a single lump sum no later than 60 days after the date on which Manager terminates employment.
(e)
If
the Company makes a good faith determination that a payment under this Agreement (i) constitutes a deferral of compensation for purposes of Section 409A of the Code, (ii) is made to Manager by reason of his separation from service and (iii) at the time such payment would otherwise be made Manager is a "specified employee" as hereinafter defined, the payment will be delayed until the first day of the seventh month following the date of such termination of employment and will bear interest at the prime rate of interest as published in the Wall Street Journal on the first business day following the date of Manager's termination of employment. For purposes of this Section 10, a specified employee is an officer of Alon USA Energy, Inc. with annual compensation in excess of $150,000 (as adjusted for years after 2008), provided that only the 50 highest paid officers of Alon USA Energy, Inc. may constitute "specified employees" for any 12-month period. An individual who is identified as a one of the 50 highest paid officers during any portion of a calendar year will be a specified employee for purposes of the Agreement during the 12-month period beginning on April 1 of the following calendar year.
(f) The provisions of Sections 6, 7, 8 and 9 of this Agreement will continue in effect notwithstanding any termination of Manager's employment.
11.
Mediation and Arbitration.
(a) Employer and Manager hereby state their mutual desire for any dispute concerning a legally cognizable claim arising out of this Agreement or in connection with the employment of Manager by Employer, including, but not limited to, claims of breach of contract, fraud, unlawful termination, discrimination, harassment, workers' compensation retaliation, defamation, tortious infliction of emotional distress, unfair competition, and conversion ("Legal Dispute"), to be resolved amicably, if possible, and without the need for litigation.
(b) Based on this mutual desire, in the event a Legal Dispute arises, the parties shall utilize the following protocol:
(i) The parties shall first submit the Legal Dispute to mediation under the auspices of the American Arbitration Association ("AAA") and pursuant to the mediation rules and procedures promulgated by the AAA.
(ii) In the event mediation is unsuccessful in fully resolving the Legal Dispute, binding arbitration shall be the method of final resolution of the Legal Dispute. The parties expressly waive their rights to bring action against one another in a court of law, except as expressly provided in subsection (d). The parties hereto acknowledge that failure to comply with this provision shall entitle the non-breaching party not only to damages, but also to injunctive relief to enjoin the actions of the breaching party. Any Legal Dispute submitted to Arbitration shall be under the auspices of the AAA and pursuant to the "National Rules for the
Resolution of Employment Disputes," or any similar identified rules promulgated at such time the Legal Dispute is submitted for resolution. All mediation and arbitration hearings shall take place in Dallas, Texas.
(c) Notice of submission of any Legal Dispute to mediation shall be provided no later than three hundred sixty-five (365) calendar days following the date the submitting party became aware of the conduct constituting the alleged claims. Failure to do so shall result in the irrevocable waiver of the claim made in the Legal Dispute.
(d)
Notwithstanding that mediation and arbitration are established as the exclusive procedures for resolution of any Legal Dispute, (i) either party may apply to an appropriate judicial or administrative forum for injunctive relief and (ii) claims by Employer arising in connection with paragraphs 6, 7, 8 or 9 may be brought in any court of competent jurisdiction.
(e)
Each party acknowledges that a remedy at law for any breach or attempted breach of paragraphs 6, 7, 8 or 9 of this Agreement will be inadequate, agrees that Employer will be entitled to specific performance and injunctive and other equitable relief in case of any breach or attempted breach, and agrees not to use as a defense that any party has an adequate remedy at law. This Agreement shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate injunctive relief may be applied for and granted in connection herewith. Such remedy shall not be exclusive and shall be in addition to any other remedies now or hereafter existing at law or in equity, by statute or otherwise. Except as provided in subsection (c) no delay or omission in exercising any right or remedy set forth in this Agreement shall operate as a waiver thereof or of any other right or remedy and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
12.
Assignment.
This Agreement shall not be assignable by either party except that upon any sale or transfer of all or substantially all of its business by Employer, Employer may assign this Agreement to its successor; any failure to make such an assignment will be considered to constitute the termination of Manager's employment without cause effective upon the closing of the referenced transaction.
13.
No
Inducement, Agreement Voluntary.
Manager represents that (a) he has not been pressured, misled, or induced to enter into this Agreement based upon any representation by Employer or its agents not contained herein, (b) he has entered into this Agreement voluntarily, after having the opportunity to consult with representatives of his own choosing and that (c) his agreement is freely given.
14.
Interpretation and Severability.
Any paragraph, phrase or other provision of this Agreement that is determined by a court, arbitrator or arbitration panel of competent jurisdiction to be unreasonable or in conflict with any applicable statute or rule, shall be deemed, if possible, to be modified or altered so that it is not unreasonable or in conflict or, if that is not possible, then it shall be deemed omitted from this Agreement. The invalidity of any portion of this Agreement shall not affect the validity of the remaining portions. Further, should any clause, sentence, provision, paragraph, or part of this Agreement be adjudged by any court of competent jurisdiction, or be held by any other competent governmental authority having
jurisdiction, to be illegal, invalid, or unenforceable, such judgment or holding shall not affect, impair, or invalidate the remainder of the Agreement, but shall be confined to the greatest extent possible in its operation to the particular clause, sentence, provision, paragraph, or part of the agreement directly involved, and the remainder of the Agreement shall remain in full force and effect.
15.
Prior Agreements Superseded; Amendments.
This Agreement revokes and supersedes all prior agreements, written and oral, and represents the entire agreement between the parties in relation to the employment of the Manager by the Company after the Commencement Date and, except as provided in Section 17 below, shall not be subject to modification or amendment by any oral representation, or any written statement by either party, except for a dated writing signed by the Manager and the Employer.
16.
Section 409A of the Code.
To the extent that any payment made under this Agreement constitutes a deferral of compensation subject to Section 409A of the Code, the time of such payment may not be accelerated except to the extent permitted by Section 409A of the Code. Where Section 409A of the Code permits a payment or benefit that constitutes a deferral of compensation to be accelerated, the payment or benefit may be accelerated in the sole discretion of the Company. Notwithstanding any provision of this Agreement to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Agreement as the Company deems necessary or desirable solely to avoid the imposition of taxes or penalties under Section 409A of the Code.
17.
Notices.
All notices, demands and requests of any kind to be delivered in connection with this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by nationally-recognized overnight courier or by registered or certified mail, return receipt requested and postage prepaid, addressed as follows:
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(a)
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if to the Company,to:
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Alon USA GP, LLC
Attention: Human Resources
12700 Park Central Dr., Suite 1600
Dallas, TX 75251
Telecopy number: (972) 367-3724
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(b)
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if to Manager, to the address of Manager set forth on the signature page hereto;
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or to such other address as the party to whom notice is to be given may have furnished to the other in writing in accordance with the provisions of this Section 17. Any such notice or communication shall be deemed to have been received: (i) in the case of personal delivery, on the date of such delivery; (ii) in the case of nationally-recognized overnight courier, on the next business day after the date sent; and (iii) if by registered or certified mail, on the third business day following the date postmarked.
18.
Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to principles of conflicts of law.
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MANAGER:
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EMPLOYER:
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Jimmy C. Crosby
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ALON USA GP, LLC
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/s/ Jimmy C. Crosby
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By:
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/s/ Paul Eisman
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Name:
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Paul Eisman
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Title:
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Chief Executive Officer
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Address for notices:
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ALON USA ENERGY, INC.
RESTRICTED STOCK AWARD AGREEMENT
WHEREAS, James A. Ranspot (the "Participant") is an employee of Alon USA Energy, Inc., a Delaware corporation (the "Company") or one of its Subsidiaries, and a Participant within the meaning of the Alon USA Energy, Inc. Amended and Restated 2005 Incentive Compensation Plan (the "Plan");
WHEREAS, the grant of restricted shares evidenced by this agreement (the "Agreement") was authorized by a resolution of the Board of Directors of the Company (the "Board").
NOW, THEREFORE, subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, a copy of which is attached hereto and incorporated herein by reference, the Company hereby agrees, provided the Participant remains continuously employed by the Company and its Subsidiaries until such date, to grant to the Participant restricted shares of Common Stock (upon the effectiveness of each such grant, the "Restricted Shares") in accordance with the following schedule on the respective dates of grant (each a "Date of Grant"):
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Number of Restricted
Shares Granted
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Date of Grant
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31,640
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August 6, 2014
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31,640
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August 6, 2015
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31,640
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August 5, 2016
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31,640
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August 7, 2017
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31,640
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August 6, 2018
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Terms not defined in this Agreement have the meanings set
forth
in the Plan.
1.
Rights of Grantee.
(a)
The Restricted Shares will be fully paid and nonassessable and will be represented by a certificate or certificates registered in the name of the Participant and bearing a legend referring to the restrictions hereinafter set forth. Except as otherwise provided herein, the Participant will have all of the rights of a stockholder with respect to the Restricted Shares; provided, however, that any additional shares of Common Stock or other securities that the Participant may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company will be subject to the same restrictions as the Restricted Shares. In order to reflect the effect of any such event. appropriate adjustments will be made to the number and/or class of shares which Participant is eligible to receive pursuant to this Agreement.
(b)
The Participant will not be entitled to vote the Restricted Shares or to receive dividends with respect to the Restricted Shares. For purposes of this Agreement, the
continuous employment of the Participant with the Company and its Subsidiaries will not be deemed to have been interrupted, and the Participant will not be deemed to have ceased to be an employee of the Company and its Subsidiaries, by reason of the transfer of the Participant's employment among the Company and its Subsidiaries or a leave of absence approved by the Company's Executive Chairman of the Board.
2.
Restrictions on Transfe
r.
The Restricted Shares and the right to receive future grants of Restricted Shares may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by the Participant, except to the
Company
, until the Restricted Shares become vested in accordance with Section 3 below; provided, however, that (i) the Participant's interest in the Restricted Shares may be transferred by will or the laws of descent and distribution and (ii) upon the Vesting Date, the Company shall have the option to repurchase the Restricted Shares in accordance with Section 3(d) below. Any purported transfer,
encumbrance
or other disposition of the Restricted Shares before they become vested will be null and void, and the other party to any such purported transaction will not obtain any rights to or interest in the Restricted Shares.
3.
Vesting of Restricted
Shares
.
(a)
Vesting
. The Participant will acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section l(b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, Restricted Shares in accordance with the schedule set forth below (each date being referred to as a "Vesting Date"), subject to the Participant' s remaining in the continuous employ of the Company and its Subsidiaries during the period from the Date of Grant to the Vesting Date. Notwithstanding the foregoing, if the Participant is subject to the Alon USA Energy, Inc. Securities Trading Policy (the "Policy'') on the Vesting Date and the Vesting Date is not a trading date under the Policy, the Restricted Shares will vest on the first day following the Vesting Date that is a trading date under the Policy, provided the Participant remains continuously employed by the Company and its Subsidiaries until such date.
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Number of Restricted
Shares Vested
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Vesting Date
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15,820 Restricted Shares originally granted on August 6, 2014
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August 6, 2015
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15,820 Restricted Shares originally granted on August 6, 2015
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August 5, 2016
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15,820 Restricted Shares originally granted on August 5, 2016
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August 7, 2017
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15,820 Restricted Shares originally granted on August 7, 2017
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August 6, 2018
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94,920 (all remaining Restricted Shares)
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August 6, 2019
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(b)
Full Vesting Upon Certain Events
. Notwithstanding the provisions of Section 3(a), the Participant will acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section 1(b) and the restrictions on transfer set forth
in
Section 2 will lapse with respect to, all of the granted but nonvested Restricted Shares in the event of (i) the involuntary termination (including disability or death) of the Participant’s employment with the Company and its Subsidiaries for a reason other than Cause or (ii) the Participant's termination of employment with the Company and its Subsidiaries by the Participant for Good Reason, in each case within the 24-month period following the occurrence of a Change in Control.
(c)
Forfeiture
. In the event the Participant terminates employment with the Company and its Subsidiaries for any reason other than disability, death, involuntary termination by the Company other than for Cause or termination by the Participant for Good Reason, the unvested Restricted Shares will be forfeited immediately and the certificate(s) representing the unvested Restricted Shares will be canceled as well as any right to grants that are not yet effective.
(d)
Repurchase
. Upon the Vesting Date, the Company shall have the option, with four (4) days' prior notice to Participant, to repurchase the Restricted Shares with a cash payment to Participant on the Vesting Date calculated using the closing price of the Company's Common Stock on the trading day immediately preceding the Vesting Date, less any amount withheld for taxes in accordance with Section 6 below.
4.
Participant's Put Right.
If
at any time there is no longer a regular public trading market for the Common Stock, the Participant will have the right to require the Company to purchase any or all of the vested Restricted Shares in accordance with this Section 4, provided the Participant has held such shares for at least six months. The Participant's right to require the Company to purchase vested Restricted Shares may
be
exercised by delivering a written notice (the "Put Notice") to the Company that sets forth the Participant's irrevocable undertaking to sell to the Company the number of vested Restricted Shares stated in such Put Notice. The purchase price per share to be paid for the Participant's vested Restricted Shares will be the Market Value per Share on the closing date of the purchase and sale contemplated by this Section 4, which will occur on the
30th
day following delivery of the Put Notice or such earlier date as may be agreed to by the parties. At such closing, the Company will deliver the aggregate purchase price to the Participant in cash, against delivery by the Participant of certificates representing the vested Restricted Shares being purchased, free and clear of all liens, claims and encumbrances and endorsed in good form for transfer.
5.
Retention of Stock Certificates
by
the Company.
The certificates representing the Restricted Shares will be held
in
custody by the Secretary of the Company, together with a stock power endorsed in blank by the Participant, until the Restricted Shares vest in accordance with this Agreement. In order for this Agreement to be effective, the Participant must sign and return such stock power to the attention of the Secretary of the Company.
6.
Taxes and Withholding
.
To the extent that the Company is required to withhold any federal, state, local or foreign taxes in connection with the issuance or vesting of any restricted or nonrestricted Common Shares or other securities pursuant to this Agreement, and
the amounts available to the Company for such withholding are insufficient, it will be a condition to the issuance or vesting of the Common Shares, as the case may be, that the Participant will pay such taxes or make provisions that are satisfactory to the Company for the payment thereof. The Participant may elect to satisfy all or any part of any such withholding obligation by retention by the Company of a portion of the nonforfeitable Common Shares that are issued or transferred to the Participant hereunder, and the Common Shares so retained will be credited against any such withholding obligation at the Market Value per Share on the date of such issuance or transfer. However, in no event may the Participant elect to have a number of Common Shares withheld in excess of the number of Common Shares required to satisfy the Company's minimum statutory tax withholding obligation.
7.
Compliance with Law.
The Company will make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any restricted or nonrestricted Common Shares or other securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law.
8.
Definitions.
For purposes of this Agreement, the terms set forth below will have the following meanings:
(a)
"Cause" means (i) the Participant's conviction of a felony or a misdemeanor where imprisonment is imposed for more than 30 days; (ii) the Participant' s commission of any act of theft, fraud, dishonesty, or falsification of any employment or Company records; (iii) the Participant's improper disclosure of confidential information of the Company; (iv) any intentional action by
the
Participant having a material detrimental effect on the Company's reputation or business;(v) any material breach by the Participant of this Agreement or the Participant's employment agreement with the Company or one of its Subsidiaries, which breach is not cured within ten
(I
0) business days following receipt by the Participant of written notice of such breach; (vi) the Participant's unlawful appropriation of a corporate opportunity; or (vii) the Participant's intentional misconduct in connection with the performance of any of the Participant' s duties, including, without limitation, misappropriation of funds or property of the Company, securing or attempting to secure to the detriment of the Company any profit in connection with any transaction entered into on behalf of the Company, any material misrepresentation to the Company, or any knowing violation of law or regulations to which the Company is subject.
(b)
"Change in Control" means the occurrence after the date of this Agreement of any of the following events:
(i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (i) such person will be deemed to have ''beneficial ownership" of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Company; or
(ii)
individuals who on the date hereof constituted the Board (together with any new directors whose election by the Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors on the date hereof or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board then in office; or
(iii) the merger or consolidation of the Company with or into another person or the merger of another person with or into the Company, or the sale of all or substantially all the assets of the Company (determined on a consolidated basis) to another person (other than, in all such cases, a person that is controlled by the Permitted Holders), other than a transaction following which (A) in the case of a merger or consolidation transaction, (1) holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving person in such merger or consolidation transaction immediately after such transaction and in substantially the same proportion to each other as before the transaction or (2) immediately after such transaction the Permitted Holders beneficially own, directly or indirectly, at least a majority of the voting power of the Voting Stock of the surviving person in such merger or consolidation transaction immediately after such transaction and (B) in the case of a sale of assets transaction, the transferee assumes the obligations of the Company under this Agreement-and either (1) is or becomes a Subsidiary of the transferor of such assets or (2) is or becomes a person a majority of the total voting power of the Voting Stock of which is beneficially owned, directly or indirectly, by the Permitted Holders; or
(iv) the adoption of a plan relating to the liquidation or dissolution of the Company.
(c)
"Good Reason" means (i) without the Participant's prior written consent, the Company reduces Participant's base compensation or the percentage of the Participant's base compensation established as the Participant' s maximum target bonus percentage for purposes of the Company's annual cash bonus plan, (ii) any material breach by the Company or its Subsidiaries of this Agreement or the Participant' s employment agreement with the Company or one of its Subsidiaries, which breach is not cured within ten (10) business days following receipt by the Company of written notice of such breach; and (iii) without the Participant' s prior written consent, the Company requires the Participant to be based at an office or location that is more than 35 miles from the location at which the Participant was based on the date hereof, other than in connection with reasonable travel requirements of the Company's business.
(d)
"Market Value per Share" means, at any date, the closing sale price of the Common Stock on that date (or, if there are no sales on the date, the last preceding date on which there was a sale) on the principal national securities exchange or in the principal market on or in which the Common Stock is traded. If there is no regular public trading market for the Common Stock, the Market Value per Share will be the fair market value of a share of Common Stock
,
without discount for minority interest, illiquidity or restrictions on transfer, as determined in good faith by agreement of the Participant and the Board; provided that if no agreement is reached within 30 days, the fair market value of a share of Common Stock shall be determined by an independent, recognized investment bank, accounting firm or business valuation company
mutually agreed to by the parties (the "Appraiser") and whose determination of Market Value per Share shall be conclusive and binding. The costs of the Appraiser will be borne equally by the Participant and the Company.
(e)
"Permitted Holders" means Alon Israel Oil Company, Ltd., Bielsol Investments (1987) Ltd
.
, and Tabris Investments Inc
.
9.
General
Provisions
.
(a)
The Company may assign any of its rights and obligations under this Agreement. Any assignment of rights and obligations by the Participant requires the Company's prior written consent. This Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.
(b) Any and all notices required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed to provide such party sufficient notice under this Agreement on the earliest of the following
:
(i)at the time of personal delivery, if delivery is in person; (ii) at the time of transmission by facsimile, addressed to the other party at its facsimile number specified herein (or hereafter modified by subsequent notice to the parties hereto), with confirmation of receipt made by both telephone and printed confirmation sheet verifying successful transmission of the facsimile; (iii) one business day after deposit with an express overnight courier for United States deliveries, or two business days after such deposit for deliveries outside of the United States; or (iv) three business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries. All notices for delivery outside the United States will be sent by facsimile or by express courier
.
All notices not delivered personally or by facsimile will be sent with postage
.
and/or other charges prepaid and properly addressed to the party to be notified at the address or facsimile number set forth below the signature lines of this Agreement or at such other address or facsimile number as such other party may designate by one of the indicated means of notice herein to the other party hereto
.
Notices by facsimile will be machine verified as received.
(c)
The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.
(d)
The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to "sections" and "exhibits" will mean "sections" and "exhibits to this Agreement.
(e)
This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together will constitute one and the same agreement.
(f)
Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect the validity, legality or enforceability of any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction in such manner as will effect as nearly as lawfully possible the purposes and intent of such invalid, illegal or unenforceable provision.
(g)
This
Agreement
may be executed and delivered by facsimile and upon such delivery the facsimile
signature will
be deemed to have the same effect as if the original signature had been delivered to the other party.
(h)
Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no amendment will adversely affect the rights of the Participant under this Agreement without the Participant's consent. No amendment of or waiver of, or modification of any obligation under this Agreement will be enforceable unless set forth in a writing signed by the party against which enforcement
is
sought. Any amendment effected in accordance with this section will be binding upon all parties hereto and each of their respective successors and assigns. No delay or failure to require performance of any provision of this Agreement will constitute a waiver of that provision as to that or any other instance
.
No waiver granted under this Agreement as to any one provision herein will constitute a subsequent waiver of such provision or of any other provision herein, nor will it constitute the waiver of any performance other than the actual performance specifically waived.
(i)
It is intended that that any amounts payable under this Agreement and the Board's, or the Compensation Committee's, as applicable, exercise of authority or discretion hereunder comply with the provisions of Code Section 409A and the Treasury regulations relating thereto so as not to subject the Participant to the payment of the additional tax, interest and any tax penalty which may be imposed under Code Section 409A. Reference to Code Section 409A will also include any proposed, temporary or final regulations, or any other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service. Notwithstanding the foregoing, no particular tax result for the Participant with respect to any income recognized by the Participant in connection with this Agreement is guaranteed, and the Participant will be responsible for any taxes, penalties and interest imposed on the Participant in connection with this Agreement.
10.
Entire Agreement.
This Agreement and the documents referred to herein constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.
[Remainder of page intentionally left blank]
The Participant hereby accepts and agrees to be bound by all the terms and conditions of the Plan and this Agreement. The Board or the Compensation Committee, as constituted from time to time, will, except as expressly provided otherwise herein, have the right to determine any questions that arise in connection with this Agreement.
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ALON USA ENERGY, INC.
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ACCEPTED:
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/s/ James A. Ranspot
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By:
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/s/ Paul Eisman
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Signature of Participant
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Name:
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Paul Eisman
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Title:
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Chief Executive Officer
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FIRST AMENDMENT TO
ALON USA ENERGY, INC
.
RESTRICTED STOCK AWARD AGREEMENT
WHEREAS, James A
.
Ranspot (the "
Participant
") is an employee of Alon USA Energy, Inc
.
, a Delaware corporation (the "Company") or one of its Subsidiaries, and a Participant within the meaning of the Alon USA Energy, Inc. Amended and Restated 2005 Incentive Compensation Plan (the "Plan");
WHEREAS, a grant of restricted shares evidenced by that certain Restricted Stock Award Agreement by and between the Company
and
Participant, dated August 6, 2014 (the "Agreement");
WHEREAS, the Company and
Participant
hereby agree to amend the Agreement as follows
:
1.
Terms not defined in this First
Amendment
to Restricted Stock Award Agreement (this "First Amendment") have the meanings set forth in the Agreement.
2.
Section 3(b) of the
Agreement
is hereby amended and restated in its entirety as follows
:
(b)
Full Vesting Upon Certain Events
. Notwithstanding the provisions of Section 3(a), the Participant will acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section 1(b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, all of the granted but nonvested Restricted Shares in the event of (i) the involuntary
termination
(including disability or death) of the Participant's employment with the Company and its Subsidiaries for a reason other than Cause, (ii) the voluntary termination of employment with the Company and its Subsidiaries by the Participant for Good Reason, within the 24-month period following the occurrence of a Change in Control meeting the definition thereof set forth in Sections 8(b)(i) - 8(b)(iv); or (ii) the voluntary termination of employment with the Company and its Subsidiaries by the Participant, with or without Good Reason, within the six-month period following the occurrence of a Change in Control meeting the definition thereof set forth in Section 8(b)(v).
3.
Section 8(b)(iv) of the Agreement is hereby
amended
and restated in its entirety as follows:
(iv)
the adoption of a plan relating
to the
liquidation or dissolution of the Company; or
4.
A new Section 8(b)(v) is hereby
added
to the Agreement as follows
:
(v)
the
involuntary
removal of Paul Eisman, in his capacity as President and Chief Executive Officer of the
Company
, or the removal or resignation of David Wiessman, in his capacity as Chairman of the Board of the Company.
5.
Except as may be specifically modified herein, the terms and conditions of the Agreement remain in full force and effect, unaffected by the execution and delivery of this First Amendment.
The Participant hereby accepts and agrees to be bound by all the terms and conditions of the Plan and the Agreement, as amended by this
First
Amendment. The Committee, as constituted from time to time, will, except as expressly provided otherwise herein, have the right to determine any questions that arise in connection with the Agreement as amended hereby
.
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ALON USA ENERGY, INC.
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ACCEPTED:
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/s/ James A. Ranspot
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By:
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/s/ Paul Eisman
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Signature of Participant
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Name:
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Paul Eisman
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Title:
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President
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SECOND AMENDMENT TO
ALON USA ENERGY, INC.
RESTRICTED STOCK AWARD AGREEMENT
WHEREAS, James A. Ranspot (the "Participant") is an employee of Alon USA Energy, Inc., a Delaware corporation (the "Company'') or one of its Subsidiaries, and a Participant within the meaning of the Alon USA Energy, Inc. Amended and Restated 2005 Incentive Compensation Plan (the "Plan");
WHEREAS, a grant of restricted shares was evidenced by that certain Restricted Stock Award Agreement by and between the Company and Participant, dated August 6, 2014 (as previously amended, the "Agreement");
WHEREAS, the Company and Participant hereby agree to further amend the Agreement as follows
:
1.
Terms not defined in this Second Amendment to Restricted Stock Award Agreement (this "Second Amendment") have the meanings set forth in the Agreement.
2.
Section 3(b) of the Agreement is hereby amended and restated in its entirety as follows
:
(b)
Full Vesting Upon Certain Events
. Notwithstanding the provisions of Section 3(a) and the granting schedule set forth in the Recitals hereto, the Participant will (i) be granted all Restricted Shares set forth in the granting schedule that have not previously been granted and, immediately thereafter, (ii) acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section 1(b) and the restrictions on transfer set forth
in
Section 2 will lapse with respect to, all nonvested Restricted Shares in the event of(A) the involuntary termination (including disability or death) of the Participant’s employment with the Company and its Subsidiaries for a reason other than Cause, or (B) the voluntary termination of employment with the Company and its Subsidiaries by the Participant for Good Reason, within the 60-month period following the occurrence of a Change in Control meeting the definition thereof set forth in Sections 8(b)(i) - 8(b)(iv)
.
Notwithstanding the provisions of Section 3(a) and the granting schedule set forth in the Recitals hereto, the Participant will (i) be granted all Restricted Shares set forth in the granting schedule that have not previously been granted and, immediately thereafter, (ii) acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section l (b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, all nonvested Restricted Shares in the event of the voluntary termination of employment with the Company and its Subsidiaries by the Participant, with or without Good Reason, within the six-month period following the occurrence of a Change in Control meeting the definition thereof set forth in Section 8(b)(v).
3.
Section 3(c) of the Agreement is hereby amended and restated in its entirety as follows:
(c)
Forfeiture
. Except as set forth in Section 3(b), in the event
the
Participant terminates employment with the Company and its
Subsidiaries
for any reason other than disability, death, involuntary termination by the Company other than for Cause or termination by the Participant
for Good Reason, the unvested Restricted Shares will be forfeited immediately and the certificate(s) representing the unvested Restricted Shares will be canceled as well as any right to grants that are not yet effective.
4. Except as may be specifically modified herein, the terms and conditions of the Agreement, as previously amended, remain in full force and effect, unaffected by the execution and delivery of this Second Amendment.
The Participant hereby accepts and agrees to be bound by all the terms and conditions of the Plan and the Agreement as amended The Committee. as constituted from time to time, will, except as expressly provided otherwise herein, have the right to determine any questions that arise in connection with the Agreement as amended hereby.
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ALON USA ENERGY, INC.
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ACCEPTED:
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/s/ James A. Ranspot
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By:
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/s/ Paul Eisman
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Signature of Participant
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Name:
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Paul Eisman
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Title:
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President
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THIRD AMENDMENT TO
ALON USA ENERGY, INC.
RESTRICTED STOCK AWARD AGREEMENT
WHEREAS, James Ranspot (the "Participant") is an employee of Alon USA Energy, Inc., a Delaware corporation (the "Company") or one of its Subsidiaries, and a Participant within the meaning of the Alon USA
Energy
, Inc. Amended and Restated 2005 Incentive Compensation Plan (the "Plan");
WHEREAS, a grant of restricted shares
evidenced
by that certain Restricted Stock Award Agreement by and between the Company and Participant, dated August 6, 2014 (as previously amended, the "Agreement");
WHEREAS, a Change of Control (as
defined
in the Agreement) has occurred and pursuant to Section 3(b), Participant has the right to resign within the 6-month period thereafter and cause the immediate vesting of all nonvested Restricted Shares;
WHEREAS, the Company and Participant hereby agree to further amend th
e
Agreement as follows:
Terms not defined in this Third
Amendment
to Restricted Stock Award Agreement (this "Third Amendment") have the meanings set forth in the Agreement.
l. Section 3(b) of the
Agreement
is hereby amended and restated in
its
entirety as follows:
(b)
Full Vesting Upon Certain Events
. Notwithstanding the provisions of Section 3(a) and the granting schedule set forth in the Recitals thereto, the Participant will (i) be granted all Restricted Shares set forth in the granting schedule that have not previously been granted and, immediately thereafter, acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section l(b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, all such Restricted Shares in the event of (i) the involuntary termination (including disability
or
death) of the Participant' s employment with the Company and its Subsidiaries for any reason, including for Cause, or (ii) the voluntary termination of the Participant' s employment with the Company and its Subsidiaries by the Participant for Good Reason. Notwithstanding the provisions of Section 3(a), the Participant will acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section 1(b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, all nonvested Restricted Shares in the event of the voluntary termination of the Participant' s employment with the Company and its Subsidiaries by the Participant other than for Good Reason.
2.
Section 3(c) of the Agreement is hereby deleted
in
its entirety.
3.
The definition of "Good Reason" as set forth in Section 8(c) of the Agreement is hereby amended and restated in its entirety as follows:
"Good Reason'' has the meaning as set forth in the Management Employment Agreement between Participant and Alon USA GP, LLC, as may be amended from time to time."
Except as may be specifically modified herein, the terms and conditions of the Agreement remain in full force and effect, unaffected by the execution and delivery of this Third Amendment.
[Signature page follows]
The Participant hereby accepts and
agrees
to be bound by all the terms and conditions of the Plan and the Agreement, as amended by this Third Amendment, such amendment to become effective this July 22, 2015.
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ALON USA ENERGY, INC.
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ACCEPTED:
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/s/ James A. Ranspot
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By:
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/s/ Paul Eisman
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Signature of Participant
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Name:
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Paul Eisman
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Title:
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President
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ALON USA ENERGY, INC.
RESTRICTED STOCK AWARD AGREEMENT
WHEREAS, Jimmy C. Crosby (the
"Participant")
is an employee of Alon USA Energy, Inc., a Delaware corporation (the "Company") or one of its Subsidiaries, and a Participant within
the meaning of the Alon USA Energy, Inc. Amended and Restated 2005 Incentive Compensation Plan (the "Plan");
WHEREAS, the grant of restricted shares evidenced by this agreement (the "Agreement") was authorized by a resolution of the Board of Directors of the Company (the "Board").
NOW, THEREFORE, subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, a copy of which is attached hereto and incorporated herein by reference, the Company hereby agrees, provided the Participant remains continuously employed by the Company and its Subsidiaries until such date, to grant to
the Participant restricted shares of Common Stock (upon the effectiveness of each such grant, the "Restricted Shares") in accordance with the following schedule on the respective dates of grant (each a "Date of Grant"):
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Number of Restricted
Shares Granted
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Date of Grant
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38,340
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August 6, 2014
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38,340
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August 6, 2015
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38,340
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August 5, 2016
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38,340
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August 7, 2017
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38,340
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August 6, 2018
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Terms not defined in this Agreement have the meanings set forth in the Plan.
1.
Rights of Grantee
.
(a)
The Restricted Shares will be fully paid and nonassessable and will be represented by a certificate or certificates registered in the name of the Participant and bearing a legend referring to the restrictions hereinafter set forth. Except as otherwise provided herein, the Participant will have all of the rights of a stockholder with respect to the Restricted Shares; provided, however, that any additional shares of Common Stock or other securities that the Participant may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company will be subject to the same restrictions as the Restricted Shares. In order to reflect the effect of any such event, appropriate adjustments will be made to the number and/or class of shares which Participant is eligible to receive pursuant to this Agreement.
(b)
The Participant will not be entitled to vote the Restricted Shares or to receive dividends with respect to the Restricted Shares
.
For purposes of this Agreement, the
continuous employment of the Participant with the Company and its Subsidiaries will not be deemed to have been interrupted, and the Participant will not be deemed to have ceased to be an employee of the Company and its Subsidiaries, by reason of the transfer of the Participant’s employment among the Company and its Subsidiaries or a leave of absence approved by the Company's Executive Chairman of the Board
.
2.
Restrictions
on Transfer.
The Restricted Shares and the right to receive future grants of Restricted Shares may not be transferred. sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by the Participant, except to the Company, until the Restricted Shares become vested in accordance with Section 3 below; provided, however, that (i) the Participant’s interest in the Restricted Shares may be transferred by will or the laws of descent and distribution and (ii) upon the Vesting Date, the Company shall have the option to repurchase the Restricted Shares in accordance with Section 3(d) below. Any purported transfer, encumbrance or other disposition of the Restricted Shares before they become vested will be null and void, and the other party to any such purported transaction will not obtain any rights to or interest in the Restricted Shares.
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3.
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Vesting of Restricted Shares
.
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(a)
Vesting.
The Participant will acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section l(b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, Restricted Shares in accordance with the schedule set forth below (each date being referred to as a "Vesting Date"), subject to the Participant's remaining in the continuous employ of the Company and its Subsidiaries during the period from the Date of Grant to the Vesting Date. Notwithstanding the foregoing, if the Participant is subject to the Alon USA Energy, Inc. Securities Trading Policy (the "Policy") on the Vesting Date and the Vesting Date is not a trading date under the Policy, the Restricted Shares will vest on the first day following the Vesting Date that is a trading date under the Policy, provided the Participant remains continuously employed by the Company and its Subsidiaries until such date.
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Number of Restricted
Shares Vested
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Vesting Date
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19,170 Restricted Shares originally granted on August 6, 2014
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August 6, 2015
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19,170 Restricted Shares originally granted on August 6, 2015
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August 5, 2016
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19,170 Restricted Shares originally granted on August 5, 2016
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August 7, 2017
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19,170 Restricted Shares originally granted on August 7, 2017
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August 6, 2018
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115,020 (all remaining Restricted Shares)
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August 6, 2019
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(b)
Full Vesting Upon Certain Events
. Notwithstanding the provisions of Section 3(a), the Participant will acquire a vested interest in
,
and the restrictions on voting and the right to receive dividends set forth in Section 1(b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, all of the granted but nonvested Restricted Shares in the event of (i) the involuntary termination (including disability or death) of the Participant's employment with the Company and its Subsidiaries for a reason other than Cause or (ii) the Participant' s termination of employment with the Company and its Subsidiaries by the Participant for Good Reason
,
in each case within the 24-month period following the occurrence of a Change in Control.
(c)
Forfeiture.
In the event the Participant terminates employment with the Company and its Subsidiaries for any reason other than disability, death, involuntary termination by the Company other than for Cause or termination by the Participant for Good Reason, the unvested Restricted Shares will be forfeited immediately and the certificate(s) representing the unvested Restricted Shares will be canceled as well as any right to grants that are not yet effective
.
(d)
Repurchase.
Upon the Vesting Date, the Company shall have the option, with four (4) days' prior notice to Participant, to repurchase the Restricted Shares with a cash payment to Participant on the Vesting Date calculated using the closing price of the Company's Common Stock on the trading day immediately preceding the Vesting Date, less any amount withheld for taxes in accordance with Section 6 below.
4.
Participant's Put Right
.
If at any time there is no longer a regular public trading market for the Common Stock, the Participant will have the right to require the Company to purchase any or all of the vested Restricted Shares in accordance with this Section 4, provided the Participant has held such shares for at least s
i
x months. The Participant' s right to requ
i
re the Company to purchase vested Restricted Shares may be exercised by delivering a written notice (the "Put Notice") to the Company that sets forth the Participant's irrevocable undertaking to sell to the Company the number of vested Restricted Shares stated in such Put Notice
.
The purchase price per share to be paid for the Partic
i
pant's vested Restricted Shares will be the Market Value per Share on the closing date of the purchase and sale contemplated by this Section 4
,
which will occur on the 30
th
day following delivery of the Put Notice or such earlier date as may be agreed to by the parties. At such closing, the Company will deliver the aggregate purchase price to the Participant in cash, against delivery by the Participant of certificates representing the vested Restricted Shares being purchased, free and clear of all liens, claims and encumbrances and endorsed in good form for transfer
.
5.
Retention of Stock Certificates by the Company
. The certificates representing the Restricted Shares will be held in custody by the Secretary of the Company, together with a stock power endorsed in blank by the Participant, until the Restricted Shares vest in accordance with this Agreement In order for this Agreement to be effective, the Participant must sign and return such stock power to the attention of the Secretary of the Company.
6.
Taxes and Withholding
.
To the extent that the Company is required to withhold any federal, state, local or foreign taxes in connection with the issuance or vesting of any restricted or nonrestricted Common Shares or other securities pursuant to this Agreement, and
the amounts available to the Company for such withholding are insufficient, it will be a condition to the issuance or vesting of the Common Shares, as the case may be, that the Participant will pay such taxes or make provisions that are satisfactory to the Company for the payment thereof. The Participant may elect to satisfy all or any part of any such withholding obligation by retention by the Company of a portion of the nonforfeitable Common Shares that are issued or transferred to the Participant hereunder, and the Common Shares so retained will be credited against any such withholding obligation at the Market Value per Share on the date of such issuance or transfer. However, in no event may the Participant elect to have a number of Common Shares withheld in excess of the number of Common Shares required to satisfy the Company's minimum statutory tax withholding obligation.
7.
Compliance with Law
.
The Company will make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any restricted or nonrestricted Common Shares or other securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law.
8.
Definitions
. For purposes of this Agreement, the terms set forth below will have
the following meanings:
(a)
"Cause"means (i) the Participant's conviction of a felony or a misdemeanor where imprisonment is imposed for more than 30 days; (ii) the Participant's commission of any act of theft, fraud, dishonesty, or falsification of any employment or Company records; (iii) the Participant' s improper disclosure of confidential information of the Company; (iv) any intentional action by the Participant having a material detrimental effect on the Company's reputation or business; (v) any material breach by the Participant of this Agreement or the Participant’s employment agreement with the Company or one of its Subsidiaries, which breach is not cured within ten (10) business days following receipt by the Participant of written notice of such breach; (vi) the Participant's unlawful appropriation of a corporate opportunity; or (vii) the Participant' s intentional misconduct in connection with the performance of any of the Participant's duties, including, without limitation, misappropriation of funds or property of the Company, securing or attempting to secure to the detriment of the Company any profit in connection with any transaction entered into on behalf of the Company, any material misrepresentation to the Company, or any knowing violation of law or regulations to which the Company is subject.
(b)
"Change in Control" means the occurrence after the date of this Agreement of any of the following events:
(i)
any "person"(as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (i) such person will be deemed to have "beneficial ownership" of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power: of the Voting Stock of the Company; or
(ii) individuals who on
·
the date hereof constituted the Board (together with any new directors whose election by the Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors on the date hereof or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board then in office; or
(iii) the merger or consolidation of the Company with or into another person or the merger of another person with or
into
the Company, or the sale of all or substantially all the assets of the Company (determined on a consolidated basis) to another person (other than, in all such cases, a person that is controlled by the Permitted Holders), other than a transaction following which (A) in the case of a merger or consolidation transaction,(1) holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving person in such merger or consolidation transaction immediately after such transaction and in substantially the same proportion to each other as before the transaction or (2) immediately after such transaction the Permitted Holders beneficially own, directly or indirectly, at least a majority of the voting power of the Voting Stock of the surviving person in such merger or consolidation transaction immediately after such transaction and (B) in the case of a sale of assets transaction, the transferee assumes the obligations of the Company under this Agreement and either (1) is or becomes a Subsidiary of the transferor of such assets or (2) is or becomes a person a majority of
·
the total voting power of the Voting Stock of which is beneficially owned, directly or
indirectly,
by the Permitted Holders; or
(iv) the adoption of a plan relating to the liquidation or dissolution of
.
the Company.
(c)
"Good Reason" means (i) without the Participant’s prior written consent, the Company reduces Participant's base compensation or the percentage of the Participant' s base compensation established as the Participant's maximum target bonus percentage for purposes of
·
the Company's annual cash bonus plan, (ii) any material breach by the Company or its Subsidiaries of this Agreement or the Participant's employment agreement with the Company or one of its Subsidiaries, which breach is not cured within ten (10) business days following receipt by the Company of written notice of such breach; and (iii) without the Participant's prior written consent, the Company requires the Participant to be based at an office or location that is more than 35 miles from the location at which the Participant
was
based on the date hereof, other than in connection with reasonable travel requirements of the Company's business.
(d)
"Market Value per Share" means, at any date, the closing sale price of the Common Stock on that date (or,
if
there are no sales on the date, the last preceding date on which there was a sale) on the principal national securities exchange or in the principal market on or in which the Common Stock is traded. If there is no regular public trading market for the Common Stock, the Market Value per Share will be the fair market value of a share of Common Stock, without discount for minority interest. illiquidity or restrictions on transfer, as determined
in
good faith by agreement of the Participant and the Board; provided that if no agreement is reached within 30 days, the fair market value of a share of Common Stock shall be determined by an independent, recognized investment bank, accounting firm or business valuation company
mutually agreed to by the parties (the "Appraiser”) and whose determination of Market Value per Share shall be conclusive and binding. The costs of the Appraiser will be borne equally by the Participant and the Company
.
(e) "Permitted Holders" means Alon Israel Oil Company, Ltd., Bielsol Investments (1987) Ltd
.
, and Tabris Investments Inc.
9.
General Provisions.
(a)
The Company may assign any of its rights and obligations under this Agreement. Any assignment of rights and obligations by the Participant requires the Company's prior written consent. This Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.
(b)
Any and all notices required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed to provide such party sufficient notice under this Agreement on the earliest of the following: (i) at the time of personal delivery, if delivery is in person; (ii) at the time of transmission by facsimile, addressed to the other party at its facsimile number specified herein (or hereafter modified by subsequent notice to the parties hereto). with confirmation of receipt made by both telephone and printed confirmation sheet verifying successful transmission of the facsimile;(iii) one business day after deposit with an express overnight courier for United States deliveries, or two business days after such deposit for deliveries outside of the United States; or (iv) three business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries. All notices for delivery outside the United States will be sent by facsimile or by express courier. All notices not delivered personally or by facsimile will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address or facsimile number set forth below the signature lines of this Agreement or at such other address or facsimile number as such other party may designate by one of the indicated means of notice herein to the other party hereto. Notices by facsimile will be machine verified as received.
(c)
The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.
(d)
The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to "sections"and "exhibits"will mean "sections"and "exhibits" to this Agreement.
(e)
This Agreement may be executed in any number of counterparts, each of
'
which when so executed and delivered will be deemed an original, and all of which together will constitute one and the same agreement.
(f)
Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement
is
held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any jurisdiction,such invalidity, illegality or unenforceability will not affect the validity, legality or enforceability of any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction in such manner as will effect as nearly as lawfully possible the purposes and intent of such invalid, illegal or unenforceable provision.
(g)
This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.
(h)
Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no amendment will adversely affect the rights of the Participant under this Agreement without the Participant' s consent No amendment of or waiver of, or modification of any obligation under this Agreement will be enforceable unless set forth in a writing signed by the party against which enforcement is sought. Any amendment effected in accordance with this section will be binding upon all parties hereto and each of their respective successors and assigns. No delay or failure to require performance of any provision of this Agreement will constitute a waiver of that provision as to that or any other
instance.
No waiver granted under this Agreement as to any one provision herein will constitute a subsequent waiver of such provision or of any other provision herein, nor will it constitute the waiver of any performance other than the actual performance specifically waived.
(i)
It is intended that that any amounts payable under this Agreement and the Board's, or the Compensation Committee' s, as applicable, exercise of authority or discretion hereunder comply with the provisions of Code Section 409A and the Treasury regulations relating thereto so as not to subject the Participant to the payment of the additional tax, interest and any tax penalty which may be imposed under Code Section 409A. Reference to Code Section 409A will also include any proposed, temporary or final regulations, or any other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service. Notwithstanding the foregoing, no particular tax result for the Participant with respect to any income recognized by the Participant in connection with this Agreement is guaranteed, and the Participant will be responsible for any taxes, penalties and interest imposed on the Participant in connection with this Agreement.
10.
Entire Agreement.
This Agreement and the documents referred to herein constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.
[Remainder of page intentionally left blank]
The Participant hereby accepts and agrees to be bound by all the terms and conditions of the Plan and this Agreement. The Board or the Compensation Committee, as constituted from time to time, will, except as expressly provided otherwise herein, have the right to determine any questions that arise in connection with this Agreement.
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ALON USA ENERGY, INC.
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ACCEPTED:
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/s/ Jimmy C. Crosby
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By:
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/s/ Paul Eisman
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Signature of Participant
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Name:
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Paul Eisman
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Title:
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Chief Executive Officer
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FIRST AMENDMENT TO
ALON USA ENERGY, INC.
RESTRICTED STOCK AWARD AGREEMENT
WHEREAS, Jimmy C. Crosby (the "Participant") is an employee of Alon USA Energy, Inc
.
, a Delaware corporation (the
"Company")
or one of its Subsidiaries, and a Participant within the meaning of the Alon USA Energy, Inc. Amended and Restated 2005 Incentive Compensation Plan (the "Plan");
WHEREAS, a grant of restricted shares evidenced by that certain Restricted Stock Award Agreement by and between the Company and Participant, dated August 6, 2014 (the "Agreement”);
WHEREAS, the Company and Participant hereby agree to amend the Agreement as follows:
1.
Terms not defined in this First Amendment to Restricted Stock Award Agreement (this "First Amendment") have the meanings set forth in the Agreement.
2.
Section 3(b) of the Agreement is hereby amended and restated in its entirety as follows:
(b)
Full Vesting Upon Certain Events
. Notwithstanding the provisions of Section 3(a), the Participant will acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section l(b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, all of the granted but nonvested Restricted Shares in the event of (i) the involuntary termination (including disability or death) of the Participant's employment with the Company and its Subsidiaries for a reason other than Cause, (ii) the voluntary termination of employment with the Company and its Subsidiaries by the Participant for Good Reason, within the 24-month period following the occurrence of a Change in Control meeting the definition thereof set forth in Sections 8(b)(i) -8(b)(iv); or (ii) the voluntary termination of employment with the Company and its Subsidiaries by the Participant, with or without Good Reason, within the six-month period following the occurrence of a Change in Control meeting the definition thereof set forth in Section 8(b)(v).
3.
Section 8(b)(iv) of the Agreement is hereby amended and restated in its entirety as follows:
(iv)
the adoption of a plan relating to the liquidation or dissolution of the Company; or
4.
A new Section 8(b)(v) is hereby added to the Agreement as follows:
(v)
the involuntary removal of Paul Eisman, in his capacity as President and Chief Executive Officer of the Company, or the removal or resignation of David Wiessman, in his capacity as Chairman of the Board of the Company.
5.
Except as may be specifically modified herein, the terms and conditions of the Agreement remain in full force and effect, unaffected by the execution and delivery of this First Amendment.
The Participant hereby accepts and agrees to be bound by all the terms and conditions of the Plan and the Agreement, as amended by this First Amendment. The Committee, as constituted from time to time, will, except as expressly provided otherwise herein, have the right to determine any questions that arise in connection with the Agreement as amended hereby.
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ALON USA ENERGY, INC.
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ACCEPTED:
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/s/ Jimmy C. Crosby
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By:
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/s/ Paul Eisman
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Signature of Participant
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Name:
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Paul Eisman
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Title:
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President
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SECOND AMENDMENT TO
ALON USA ENERGY, INC.
RESTRICTED STOCK AWARD AGREEMENT
WHEREAS, Jimmy C. Crosby (the "Participant'') is an employee of Alon USA Energy, Inc., a Delaware corporation ( the “Company'') or one of its Subsidiaries, and a Participant within the meaning of the Alon USA Energy, Inc.Amended and Restated 2005 Incentive Compensation Plan (the "Plan");
WHEREAS, a grant of restricted shares was evidenced by that certain Restricted Stock Award Agreement by and between the Company and Participant, dated August 6, 2014 (as previously amended, the "Agreement'');
WHEREAS, the Company and Participant hereby agree to further amend the Agreement as follows:
1.
Terms not defined in this
Second
Amendment to Restricted Stock Award Agreement (this "Second Amendment") have the meanings set forth in the Agreement.
2.
Section 3(b) of the Agreement is hereby amended and restated in its entirety as follows
:
(b)
Full Vesting Upon Certain Events
. Notwithstanding the
provisions
of Section 3(a) and the granting schedule set forth in the Recitals hereto, the Participant will (i) be granted all Restricted Shares set forth in the granting schedule that have not previously been granted and, immediately thereafter, (ii) acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section1 (b) and the restrictions on transfer set forth in Section 2 will lapse with respect to,all nonvested Restricted Shares in the event of (A) the involuntary termination (including disability or death) of the Participant’s employment with the Company and its Subsidiaries for a reason other than Cause, or (B) the voluntary termination of employment with the Company and its Subsidiaries by the Participant for Good Reason, within the 60-month period following the occurrence of a Change in Control meeting the definition thereof set forth in Sections 8(b)(i)
-
8(b)(iv)
.
Notwithstanding the provis
i
ons of Section 3(a) and the granting schedule set forth in the Recitals hereto, the Participant will (i) be granted all Restricted Shares set forth in the granting schedule that have not previously been granted and, immediately thereafter, (ii) acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section I(b)and the restrictions on transfer set forth in Section 2 will lapse with respect to,all nonvested Restricted Shares in the event of the voluntary termination of employment with the Company and its Subsidiaries by the Participant, with or without Good Reason, within the six-month period following the occurrence of a Change in Control meeting the definition thereof set forth in Section 8(b)(v)
.
3.
Section 3(c) of the Agreement
is
hereby amended and restated
i
n its entirety as
follows
:
(c)
Forfeiture
.
Except as set forth in Section 3(b), in the event the Participant terminates employment with the Company and its Subsidiaries for any reason other than disability, death, involuntary termination by the Company other than for Cause or termination by the Participant
for Good Reason. the unvested Restricted Shares will be forfeited immediately and the certificate(s) representing the unvested Restricted Shares will be canceled as well as any right to grants that are not yet effective.
4. Except as may be specifically modified herein, the terms and conditions of the Agreement, as previously amended, remain in full force and effect, unaffected by the execution and delivery of this Second Amendment.
The Participant hereby accepts and agrees to be bound by all the terms and conditions of the Plan and the Agreement, as amended. The Committee, as constituted from time to time, will, except as expressly provided otherwise herein, have the right to determine any questions that arise in connection with the Agreement as amended hereby.
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ALON USA ENERGY, INC.
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ACCEPTED:
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/s/ Jimmy C. Crosby
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By:
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/s/ Paul Eisman
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Signature of Participant
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Name:
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Paul Eisman
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Title:
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President
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THIRD AMENDMENT TO
ALON USA ENERGY, INC.
RESTRICTED STOCK AWARD AGREEMENT
WHEREAS
, Jimmy Crosby (the "Participant") is an employee of Alon USA Energy,
Inc., a Delaware corporation (the "Company") or one of its Subsidiaries, and a Participant within the meaning of the Alon USA Energy, Inc. Amended and Restated 2005 Incentive Compensation Plan (the "Plan");
WHEREAS, Participant received a grant of restricted shares evidenced by that certain Restricted Stock Award Agreement by and between the Company and Participant, dated August 6, 2014 (as previously amended, the "Agreement");
WHEREAS, a Change of Control (as defined in the Agreement) has occurred and pursuant to Section 3(b), Participant has the right to resign within the 6-month period thereafter and cause the immediate vesting of all nonvested Restricted Shares;
WHEREAS, the Company and Participant hereby agree to further amend the Agreement as follows:
Terms not defined in this Third Amendment to Restricted Stock Award Agreement (this "Third Amendment") have the meanings set forth in the Agreement.
1.
Section 3(b) of the Agreement is hereby amended and restated in its entirety as follows:
“(b)
Full Vesting Upon Certain Events
.
Notwithstanding the provisions of Section 3(a) and the granting schedule set forth in the Recitals thereto, the Participant will (i) be granted all Restricted Shares set forth in the granting schedule that have not previously been granted and, immediately thereafter, acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section 1(b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, all such Restricted Shares in the event of (i) the involuntary termination (including disability or death) of the Participant's employment with the Company and its Subsidiaries for any reason, including for Cause, or (ii) the voluntary termination of the Participant's employment with the Company and its Subsidiaries by the Participant for Good Reason. Notwithstanding the provisions of Section 3(a), the Participant will acquire a vested interest in, and the restrictions on voting and the right to receive dividends set forth in Section l(b) and the restrictions on transfer set forth in Section 2 will lapse with respect to, all nonvested Restricted Shares in the event of the voluntary termination of the Participant's employment with the Company and its Subsidiaries by the Participant other than for Good Reason."
2.
Section 3(c) of the Agreement is hereby deleted in its entirety.
3. Except as may be specifically modified herein, the terms and conditions of the Agreement remain in full force and effect, unaffected by the execution and delivery of this Third Amendment.
The Participant hereby accepts and agrees to be bound by all the terms and conditions of the Plan and the Agreement, as amended by this Third Amendment, such amendment to become effective this August 21, 2015.
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ALON USA ENERGY, INC.
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ACCEPTED:
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/s/ Jimmy C. Crosby
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By:
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/s/ Paul Eisman
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Signature of Participant
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Name:
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Paul Eisman
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Title:
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President
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Exhibit 31.3
CERTIFICATIONS
I, Alan Moret, certify that:
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1.
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I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of Alon USA Energy, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
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Date:
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April 28, 2017
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By:
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/s/ Alan Moret
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Alan Moret
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Interim Chief Executive Officer
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Exhibit 31.4
CERTIFICATIONS
I, Shai Even, certify that:
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1.
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I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of Alon USA Energy, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
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Date:
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April 28, 2017
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By:
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/s/ Shai Even
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Shai Even
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Senior Vice President and Chief Financial Officer
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