EX-10.16



 



Exhibit 10.16

AMENDMENT NUMBER 1

TO EMPLOYMENT AGREEMENT



     AMENDMENT NUMBER 1 TO EMPLOYMENT AGREEMENT, dated as of December 13, 2006,
by and between Coffeyville Resources, LLC, a Delaware limited liability company
(the “Company”), and Robert W. Haugen (the “Executive”).


     WHEREAS, the Company and the Executive entered into an employment
agreement dated as of July 12, 2005 (the “Employment Agreement”); and


     WHEREAS, the Company and the Executive desire to amend the Employment
Agreement with respect to the Executive’s target Annual Bonus beginning with
the 2007 fiscal year.


     NOW THEREFORE, the parties hereby agree to amend the Employment Agreement
as follows:


     1.     Section 2.2 is hereby deleted in its entirety and replaced with the
following:



		
	 	2.2. Annual Bonus. For each completed fiscal year occurring
during the Term, the Executive shall be eligible to receive an
annual cash bonus (the “Annual Bonus”). Commencing with fiscal
year 2007, the target Annual Bonus shall be 120% of the Executive’s
Base Salary as in effect at the beginning of such fiscal year 2007
and at the beginning of each such fiscal year thereafter during the
Term, the actual Annual Bonus to be based upon such individual
and/or Company performance criteria established for each such
fiscal year by the Board.



     2.     In all other respects the Employment Agreement shall remain in effect
and is hereby confirmed by the parties.


COFFEYVILLE RESOURCES, LLC




				
	/s/   Robert W. Haugen	 	By:	/s/   John J. Lipinski
	Robert W. Haugen	 	 	Name:   John J. Lipinski
	 	 	 	Title:    CEO












 


EMPLOYMENT AGREEMENT



     EMPLOYMENT
AGREEMENT, dated as of July 12, 2005 (the “Employment
Agreement”), by and between Coffeyville Resources, LLC, a Delaware limited
liability company (the “Company”), and Robert W.
Haugen (the “Executive”).


     WHEREAS, pursuant to the Stock Purchase Agreement, dated as of May 15,
2005 (the “Stock Purchase Agreement”), between Coffeyville Group Holdings, LLC,
a Delaware limited liability company (“Seller”) and Coffeyville Acquisition
LLC, a Delaware limited liability company (“Buyer”), Buyer purchased from
Seller all of the issued and outstanding shares of capital stock of Coffeyville
Pipeline, Inc., Coffeyville Refining & Marketing, Inc., Coffeyville Nitrogen
Fertilizers, Inc., Coffeyville Crude Transportation, Inc. and Coffeyville
Terminal, Inc.; and


     WHEREAS, the Company and the Executive desire to, effective as of the
consummation of the transactions contemplated in the Stock Purchase Agreement,
enter into this Employment Agreement.


     NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other valid consideration the sufficiency of which is acknowledged, the
parties hereto agree as follows:


Section 1.  Employment.


     1.1.
Term. The Company agrees to employ the Executive, and the Executive
agrees to be employed by the Company, in each case pursuant to this Employment
Agreement, for a period commencing on the “Closing Date” (as such term is
defined in the Stock Purchase Agreement) and ending on the earlier of (i) the
third (3rd) anniversary of the Closing Date and (ii) the termination of the
Executive’s employment in accordance with Section 3 hereof
(the “Term”).


     1.2.
Duties. During the Term, the Executive shall serve as Executive Vice
President — Engineering and Construction of the Company and such other
positions as an officer or director of the Company and such affiliates of the
Company as the Executive and the board of directors of the Company (the
“Board”) shall mutually agree from time to time. In such positions, the
Executive shall perform such duties, functions and responsibilities during the
Term commensurate with the Executive’s positions as reasonably directed by the
Board.



     1.3.
Exclusivity. During the Term, the Executive shall devote
substantially all of his working time and attention to the business and affairs
of the Company, shall faithfully serve the Company, and shall in all material
respects conform to and comply with the lawful and reasonable directions and
instructions given to him by the Board, consistent with Section 1.2 hereof.
During the Term, the Executive shall use his best efforts during his working
time to promote and serve the interests of the Company and shall not engage in
any other business activity, whether or not such activity shall be engaged in
for pecuniary profit. The provisions of this Section 1.3 shall not be
construed to prevent the Executive from investing his personal, private assets
as a passive investor in such form or manner as will not require any active
services on the part of the Executive in the management or operation of the
affairs of the


1







 


companies, partnerships, or other business entities in which any such
passive investments are made. Notwithstanding the foregoing, during the Term
the Executive shall not engage in any activity related to the construction or
operation of ammonia, urea ammonium nitrate or fertilizer plants or facilities
anywhere outside of the United States.


Section 2.  Compensation.


     2.1.
Salary. As compensation for the performance of the Executive’s
services hereunder, during the Term, the Company shall pay to the Executive a
salary at an annual rate of Two Hundred Twenty-Five Thousand Dollars
($225,000), payable in accordance with the Company’s standard payroll policies,
as may be adjusted upward by the Board in its discretion (as adjusted, the
“Base Salary”).


     2.2.
Bonus.


     (a) 
Annual Bonus. For each completed fiscal year occurring during the
Term, the Executive shall be eligible to receive an annual cash bonus (the
“Annual Bonus”). The target Annual Bonus shall be 52% of the Executive’s Base
Salary as in effect at the beginning of such fiscal year, the actual Annual
Bonus to be based upon such individual and/or Company performance criteria
established for each such fiscal year by the Board. For 2005, the Executive
will be eligible to receive an Annual Bonus under the 2005 Coffeyville
Resources, LLC and Affiliated Companies Performance Based Income Sharing Plan
(the “2005 Plan”) with appropriate adjustments to the performance criteria
thereunder to reflect the impact, if any, of the transactions contemplated in
the Stock Purchase Agreement. Notwithstanding the foregoing, the Executive
shall not be eligible for any pro rata bonus upon termination of the
Executive’s employment under the 2005 Plan (or any successor plan).


     (b) 
Special Bonus. The Executive shall be eligible to participate in any
special bonus program that the Board may implement to reward senior management
for extraordinary performance on terms and conditions established by the Board.


     2.3.
Employee Benefits. During the Term, the Executive shall be eligible
to participate in such health, insurance, retirement, and other employee
benefit plans and programs of the Company as in effect from time to time on the
same basis as other senior executives of the Company.


     2.4.
Vacation. During the Term, the Executive shall be entitled to paid
vacation in accordance with the Company’s vacation policy as in effect on the
date hereof.


     2.5.
Business Expenses. The Company shall pay or reimburse the Executive
for all commercially reasonable business out-of-pocket expenses that the
Executive incurs during the Term in performing his duties under this Employment
Agreement upon presentation of documentation and in accordance with the expense
reimbursement policy of the Company as approved by the Board and in effect from
time to time.


Section 3.  Employment
Termination.


2






 


     3.1.
Termination of Employment. The Company may terminate the Executive’s
employment for any reason during the Term, and the Executive may voluntarily
terminate his employment for any reason during the Term, in each case (other
than a termination by the Company for Cause) at any time upon not less than
thirty (30) days’ notice to the other party. Upon the termination of the
Executive’s employment with the Company for any reason (whether during the Term
or thereafter), the Executive shall be entitled to any Base Salary earned but
unpaid through the date of termination, any earned but unpaid Annual Bonus for
completed fiscal years, and any unreimbursed expenses in accordance with
Section 2.5 hereof (collectively, the “Accrued Amounts”).


     3.2.
Certain Terminations.


     (a) 
Termination by the Company Other Than For Cause or Disability;
Termination by the Executive for Good Reason. If (i) the Executive’s
employment is terminated by the Company during the Term other than for Cause or
Disability or (ii) the Executive resigns for Good Reason, in addition to the
Accrued Amounts the Executive shall be entitled to the following payments and
benefits: (x) the continuation of his Base Salary at the rate in effect
immediately prior to the date of termination for a period of twelve (12) months
and (y) the continuation on the same terms as an active employee of medical
benefits the Executive would otherwise be eligible to receive as an active
employee of the Company for twelve (12) months or until such time as the
Executive becomes eligible for medical benefits from a subsequent employer
(such payments, the “Severance Payments”). The Company’s obligations to make
the Severance Payments shall be conditioned upon: (i) the Executive’s continued
compliance with his obligations under Section 4 of this Employment Agreement
and (ii) the Executive’s execution, delivery and non-revocation of a valid and
enforceable release of claims arising in connection with the Executive’s
employment and termination of employment with the Company and its affiliates
(the “Release”) in a form reasonably acceptable to the Company and the
Executive. In the event that the Executive breaches any of the covenants set
forth in Section 4 of this Employment Agreement, the Executive will immediately
return to the Company any portion of the Severance Payments that have been paid
to the Executive pursuant to this Section 3.2(a). Subject to Section 3.2(c),
the Severance Payments will commence to be paid to the Executive as soon as
practicable following the effectiveness of the Release.


     (b) 
Definitions. For purposes of this Section 3.2, the following terms
shall have the following meanings:


     (1) 
A termination for “Good Reason” shall mean a termination by the
Executive within thirty (30) days following the date on which the Company has
engaged in any of the following: (i) the assignment of duties or
responsibilities to the Executive that reflect a material diminution of the
Executive’s position with the Company; (ii) a relocation of the Executive’s
principal place of employment that increases the Executive’s commute by more
than fifty (50) miles; or (iii) a reduction in the Executive’s Base Salary,
other than across-the-board reductions applicable to similarly situated
employees of the Company; provided, however, that the Executive must provide
the Company with notice promptly following the occurrence of any of foregoing
and at least ten (10) business days to cure.


     (2)
“Cause” shall mean that the Executive has engaged


3






 



in any of the following: (i) willful misconduct or breach of fiduciary
duty; (ii) intentional failure or refusal to perform reasonably assigned duties
after written notice of such willful failure or refusal and the failure or
refusal is not corrected within ten (10) business days; (iii) the indictment
for, conviction of or entering a plea of guilty or nolo contendere to a crime
constituting a felony (other than a traffic violation or other offense or
violation outside of the course of employment which does not adversely affect
the Company and its affiliates or their reputation or the ability of the
Executive to perform his employment-related duties or to represent the
Company); provided, however, that (A) if the Executive is terminated for Cause
by reason of his indictment pursuant to this clause (iii) and the indictment is
subsequently dismissed or withdrawn or the Executive is found to be not guilty
in a court of law in connection with such indictment, then the Executive’s
termination shall be treated for purposes of this Employment Agreement as a
termination by the Company other than for Cause, and the Executive will be
entitled to receive (without duplication of benefits and to the extent
permitted by law and the terms of the then-applicable medical benefit plans)
the payments and benefits set forth in Section 3.2(a) following such dismissal,
withdrawal or finding, payable in the manner and subject to the conditions set
forth in such Section and (B) if such indictment relates to environmental
matters and does not allege that the Executive was directly involved in or
directly supervised the action(s) forming the basis of the indictment, Cause
shall not be deemed to exist under this Employment Agreement by reason of such
indictment until the Executive is convicted or enters a plea of guilty or nolo
contendere in connection with such indictment; or (iv) material breach of the
Executive’s covenants in Section 4 of this Employment Agreement or any material
written policy of the Company after written notice of such breach and failure
by the Executive to correct such breach within ten (10) business
days, provided
that no notice of, nor opportunity to correct, such breach shall be required
hereunder if such breach cannot be cured by the Executive.



     (3) 
“Disability” shall mean the Executive’s inability, due to physical or
mental ill health, to perform the essential functions of the Executive’s job,
with or without a reasonable accommodation, for 180 days during any 365 day
period irrespective of whether such days are consecutive.



     (c) 
Section 409A. Any payments under Section 2.2 of this Employment
Agreement shall be made no later than two and one-half months after the later
of the end of the Company’s fiscal year in which all conditions entitling the
Executive to such payments have been satisfied or the calendar year in which
all conditions entitling the Executive to such payments have been satisfied.
If the Executive is a “specified employee” for purposes of Section 409A of the
Code and the regulations thereunder, any Severance Payments required to be made
pursuant to Section 3.2(a) which are subject to Section 409A shall not commence
until six (6) months from the date of termination, with the first payment
equaling six (6) months of his Base Salary at the rate in effect immediately
prior to the date of termination.


     3.3.
Exclusive Remedy. The foregoing payments upon termination of the
Executive’s employment shall constitute the exclusive severance payments due
the Executive upon a termination of his employment under this Employment
Agreement.


     3.4.
Resignation from All Positions. Upon the termination of the
Executive’s employment with the Company for any reason, the Executive shall be
deemed to have resigned, as of the date of such termination, from all positions
he then holds as an officer,


4






 


director, employee and member of the board (and any committee thereof) of
the Company and any of its direct or indirect subsidiaries (collectively, the
“Subsidiaries”).



     3.5.
Cooperation. For one (1) year following the termination of the
Executive’s employment with the Company for any reason, the Executive agrees to
reasonably cooperate with the Company upon reasonable request of the Board and
to be reasonably available to the Company with respect to matters arising out
of the Executive’s services to the Company and its Subsidiaries. The Company
shall reimburse the Executive for expenses reasonably incurred in connection
with such matters as agreed by the Executive and the Board and the Company
shall compensate the Executive for such cooperation at an hourly rate based on
the Executive’s most recent base salary rate assuming two thousand (2,000)
working hours per year; provided, that if the Executive is required to spend
more than forty (40) hours in any month on Company matters pursuant to this
Section 3.5, the Executive and the Board shall mutually agree to an appropriate
rate of compensation for the Executive’s time over such forty (40) hour
threshold.


Section 4. Unauthorized Disclosure; Non-Solicitation; Non-Competition;
Proprietary Rights.


     4.1.
Unauthorized Disclosure. The Executive agrees and understands that
in the Executive’s position with the Company, the Executive has been and will
be exposed to and has and will receive information relating to the confidential
affairs of the Company and its affiliates, including, without limitation,
technical information, intellectual property, business and marketing plans,
strategies, customer information, software, other information concerning the
products, promotions, development, financing, expansion plans, business
policies and practices of the Company and its affiliates and other forms of
information considered by the Company and its affiliates to be confidential and
in the nature of trade secrets (including, without limitation, ideas, research
and development, know-how, formulas, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information and
business and marketing plans and proposals) (collectively, the
“Confidential
Information”); provided, however, that Confidential Information shall not
include information which (i) is or becomes generally available to the public
not in violation of this Employment Agreement or any written policy of the
Company; or (ii) was in the Executive’s possession or knowledge on a
non-confidential basis prior to such disclosure. The Executive agrees that at
all times during the Executive’s employment with the Company and thereafter,
the Executive shall not disclose such Confidential Information, either directly
or indirectly, to any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof
(each a “Person”) without the prior written consent of the Company and shall
not use or attempt to use any such information in any manner other than in
connection with his employment with the Company, unless required by law to
disclose such information, in which case the Executive shall provide the
Company with written notice of such requirement as far in advance of such
anticipated disclosure as possible. This confidentiality covenant has no
temporal, geographical or territorial restriction. Upon termination of the
Executive’s employment with the Company, the Executive shall promptly supply to
the Company all property, keys, notes, memoranda, writings, lists, files,
reports, customer lists, correspondence, tapes, disks, cards, surveys, maps,
logs, machines, technical data and any other tangible product or document which
has been produced by, received


5






 



by or otherwise submitted to the Executive during or prior to the
Executive’s employment with the Company, and any copies thereof in his (or
capable of being reduced to his) possession.




     4.2.
Non-Competition. By and in consideration of the Company’s entering
into this Employment Agreement and the payments to be made and benefits to be
provided by the Company hereunder, and in further consideration of the
Executive’s exposure to the Confidential Information of the Company and its
affiliates, the Executive agrees that the Executive shall not, during the
Executive’s employment with the Company (whether during the Term or thereafter)
and for a period of twelve (12) months thereafter (the
“Restriction Period”),
directly or indirectly, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of, or be
connected in any manner with, including, without limitation, holding any
position as a stockholder, director, officer, consultant, independent
contractor, employee, partner, or investor in, any Restricted Enterprise (as
defined below); provided, that in no event shall ownership of one percent (1%)
or less of the outstanding securities of any class of any issuer whose
securities are registered under the Securities Exchange Act of 1934, as
amended, standing alone, be prohibited by this Section 4.2, so long as the
Executive does not have, or exercise, any rights to manage or operate the
business of such issuer other than rights as a stockholder thereof. For
purposes of this paragraph, “Restricted Enterprise” shall mean any Person that
is actively engaged in any business which is either (i) in competition with the
business of the Company or any of its Subsidiaries conducted during the
preceding twelve (12) months (or following the Executive’s termination of
employment, the twelve (12) months preceding the date of termination of the
Executive’s employment with the Company) or (ii) proposed to be conducted by
the Company or any of its Subsidiaries in the Company’s business plan as in
effect at that time (or following the Executive’s termination of employment,
the business plan as in effect as of the date of termination of the Executive’s
employment with the Company); provided, that (x) with respect to any Person
that is actively engaged in the refinery business, a Restricted Enterprise
shall only include such a Person that operates or markets in any geographic
area in which the Company or any of its Subsidiaries operates or markets with
respect to its refinery business and (y) with respect to any Person that is
actively engaged in the fertilizer business, a Restricted Enterprise shall only
include such a Person that operates or markets in any geographic area in which
the Company or any of its Subsidiaries operates or markets with respect to its
fertilizer business. During the Restriction Period, upon request of the
Company, the Executive shall notify the Company of the Executive’s then-current
employment status. For the avoidance of doubt, a Restricted Enterprise shall
not include any Person or division thereof that is engaged in the business of
supplying (but not refining) crude oil or natural gas.



     4.3.
Non-Solicitation of Employees. During the Restriction Period, the
Executive shall not directly or indirectly contact, induce or solicit (or
assist any Person to contact, induce or solicit) for employment any person who
is, or within twelve (12) months prior to the date of such solicitation was, an
employee of the Company or any of its Subsidiaries.


     4.4.
Non-Solicitation of Customers/Suppliers. During the Restriction
Period, the Executive shall not (i) contact, induce or solicit (or assist any
Person to contact, induce or solicit) any Person which has a business
relationship with the Company or of any of its Subsidiaries in order to
terminate, curtail or otherwise interfere with such business relationship or
(ii) solicit, other than on behalf of the Company and its Subsidiaries, any
Person that the


6






 


Executive knows or should have known (x) is a current customer of the
Company or any of its Subsidiaries in any geographic area in which the Company
or any of its Subsidiaries operates or markets or (y) is a Person in any
geographic area in which the Company or any of its Subsidiaries operates or
markets with respect to which the Company or any of its Subsidiaries has,
within the twelve (12) months prior to the date of such solicitation, devoted
more than de minimis resources in an effort to cause such Person to become a
customer of the Company or any of its Subsidiaries in that geographic area.
For the avoidance of doubt, the foregoing does not preclude the Executive from
soliciting, outside of the geographic areas in which the Company or any of its
Subsidiaries operates or markets, any Person that is a customer or potential
customer of the Company or any of its Subsidiaries in the geographic areas in
which it operates or markets.


     4.5.
Extension of Restriction Period. The Restriction Period shall be
tolled for any period during which the Executive is in breach of any of
Sections 4.2, 4.3 or 4.4 hereof.


     4.6.
Proprietary Rights. The Executive shall disclose promptly to the
Company any and all inventions, discoveries, and improvements (whether or not
patentable or registrable under copyright or similar statutes), and all
patentable or copyrightable works, initiated, conceived, discovered, reduced to
practice, or made by him, either alone or in conjunction with others, during
the Executive’s employment with the Company and related to the business or
activities of the Company and its affiliates (the
“Developments”). Except to
the extent any rights in any Developments constitute a work made for hire under
the U.S. Copyright Act, 17 U.S.C. § 101 et seq. that are owned ab initio by the
Company and/or its applicable affiliate, the Executive assigns all of his
right, title and interest in all Developments (including all intellectual
property rights therein) to the Company or its nominee without further
compensation, including all rights or benefits therefor, including without
limitation the right to sue and recover for past and future infringement. The
Executive acknowledges that any rights in any developments constituting a work
made for hire under the U.S. Copyright Act, 17 U.S.C. § 101 et seq. are owned
upon creation by the Company and/or its applicable affiliate as the Executive’s
employer. Whenever requested to do so by the Company, the Executive shall
execute any and all applications, assignments or other instruments which the
Company shall deem necessary to apply for and obtain trademarks, patents or
copyrights of the United States or any foreign country or otherwise protect the
interests of the Company and its affiliates therein. These obligations shall
continue beyond the end of the Executive’s employment with the Company with
respect to inventions, discoveries, improvements or copyrightable works
initiated, conceived or made by the Executive while employed by the Company,
and shall be binding upon the Executive’s employers, assigns, executors,
administrators and other legal representatives. In connection with his
execution of this Employment Agreement, the Executive has informed the Company
in writing of any interest in any inventions or intellectual property rights
that he holds as of the date hereof. If the Company is unable for any reason,
after reasonable effort, to obtain the Executive’s signature on any document
needed in connection with the actions described in this Section 4.6, the
Executive hereby irrevocably designates and appoints the Company and its duly
authorized officers and agents as the Executive’s agent and attorney in fact to
act for and in the Executive’s behalf to execute, verify and file any such
documents and to do all other lawfully permitted acts to further the purposes
of this section with the same legal force and effect as if executed by the
Executive.


7






 



     4.7.
Confidentiality of Agreement. Other than with respect to information
required to be disclosed by applicable law, the parties hereto agree not to
disclose the terms of this Employment Agreement to any Person; provided the
Executive may disclose this Employment Agreement and/or any of its terms to the
Executive’s immediate family, financial advisors and attorneys.
Notwithstanding anything in this Section 4.7 to the contrary, the parties
hereto (and each of their respective employees, representatives, or other
agents) may disclose to any and all Persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Employment Agreement, and all materials of any kind (including opinions or
other tax analyses) related to such tax treatment and tax structure; provided
that this sentence shall not permit any Person to disclose the name of, or
other information that would identify, any party to such transactions or to
disclose confidential commercial information regarding such transactions.


     4.8.
Remedies. The Executive agrees that any breach of the terms of this
Section 4 would result in irreparable injury and damage to the Company for
which the Company would have no adequate remedy at law; the Executive therefore
also agrees that in the event of said breach or any threat of breach, the
Company shall be entitled to an immediate injunction and restraining order to
prevent such breach and/or threatened breach and/or continued breach by the
Executive and/or any and all Persons acting for and/or with the Executive,
without having to prove damages, in addition to any other remedies to which the
Company may be entitled at law or in equity, including, without limitation, the
obligation of the Executive to return any Severance Payments made by the
Company to the Company. The terms of this paragraph shall not prevent the
Company from pursuing any other available remedies for any breach or threatened
breach hereof, including, without limitation, the recovery of damages from the
Executive. The Executive and the Company further agree that the provisions of
the covenants contained in this Section 4 are reasonable and necessary to
protect the businesses of the Company and its affiliates because of the
Executive’s access to Confidential Information and his material participation
in the operation of such businesses.


Section 5. Representation.


     The Executive represents and warrants that (i) he is not subject to any
contract, arrangement, policy or understanding, or to any statute, governmental
rule or regulation, that in any way limits his ability to enter into and fully
perform his obligations under this Employment Agreement and (ii) he is not
otherwise unable to enter into and fully perform his obligations under this
Employment Agreement.


Section 6. Withholding.


     All amounts paid to the Executive under this Employment Agreement during
or following the Term shall be subject to withholding and other employment
taxes imposed by applicable law.


Section 7. Effect of
Section 280G of the Internal Revenue Code.


     7.1.
Payment Reduction. Notwithstanding anything contained in this
Employment Agreement to the contrary, to the extent that any payment or
distribution of any


8






 



type to or for the Executive by the Company, any affiliate of the Company,
any Person who acquires ownership or effective control of the Company or
ownership of a substantial portion of the Company’s assets (within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”)
and the regulations thereunder), or any affiliate of such Person, whether paid
or payable or distributed or distributable pursuant to the terms of this
Employment Agreement or otherwise (the “Payments”) is or will be subject to the
excise tax imposed under Section 4999 of the Code (the
“Excise Tax”), then the
Payments shall be reduced (but not below zero) if and to the extent necessary
so that no Payments to be made or benefit to be provided to the Executive shall
be subject to the Excise Tax; provided, however, that the Company shall use its
reasonable best efforts to obtain shareholder approval of the Payments provided
for in this Employment Agreement in a manner intended to satisfy requirements
of the “shareholder approval” exception to Section 280G of the Code and the
regulations promulgated thereunder, such that payment may be made to the
Executive of such Payments without the application of an Excise Tax. Unless
the Executive shall have given prior written notice to the Company specifying a
different order by which to effectuate the reduction, the Company shall reduce
or eliminate the Payments (x) by first reducing or eliminating the portion of
the Payments which are not payable in cash (other than that portion of the
Payments subject to clause (z) hereof), (y) then by reducing or eliminating
cash payments (other than that portion of the Payments subject to clause (z)
hereof) and (z) then by reducing or eliminating the portion of the Payments
(whether payable in cash or not payable in cash) to which Treasury Regulation §
1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse
order beginning with payments or benefits which are to be paid the farthest in
time. Any notice given by the Executive pursuant to the preceding sentence
shall take precedence over the provisions of any other plan, arrangement or
agreement governing the Executive’s rights and entitlements to any benefits or
compensation.


     7.2.
Determination of Amount of Reduction. The determination of whether
the Payments shall be reduced as provided in Section 7.1 and the amount of such
reduction shall be made at the Company’s expense by an accounting firm selected
by the Company from among the four (4) largest accounting firms in the United
States (the “Accounting Firm”). The Accounting Firm shall provide its
determination (the “Determination”), together with detailed supporting
calculations and documentation, to the Company and the Executive within ten
(10) days after the Executive’s final day of employment. If the Accounting
Firm determines that no Excise Tax is payable by the Executive with respect to
the Payments, it shall furnish the Executive with an opinion reasonably
acceptable to the Executive that no Excise Tax will be imposed with respect to
any such payments and, absent manifest error, such Determination shall be
binding, final and conclusive upon the Company and the Executive.


Section 8. Miscellaneous.


     8.1.
Amendments and Waivers. This Employment Agreement and any of the
provisions hereof may be amended, waived (either generally or in a particular
instance and either retroactively or prospectively), modified or supplemented,
in whole or in part, only by written agreement signed by the parties hereto;
provided, that, the observance of any provision of this Employment Agreement
may be waived in writing by the party that will lose the benefit of such
provision as a result of such waiver. The waiver by any party hereto of a
breach of any provision of this Employment Agreement shall not operate or be
construed as a further or


9






 


continuing waiver of such breach or as a waiver of any other or subsequent
breach, except as otherwise explicitly provided for in such waiver. Except as
otherwise expressly provided herein, no failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder, or
otherwise available in respect hereof at law or in equity, shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power
or remedy by such party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.


     8.2.
Indemnification. To the extent provided in the Amended and Restated
Limited Liability Company Agreement of Coffeyville Acquisition LLC, dated as of
June 24, 2005, as in effect from time to time, the Company shall indemnify the
Executive for losses or damages incurred by the Executive as a result of causes
of action arising from the Executive’s performance of duties for the benefit of
the Company, whether or not the claim is asserted during the Term.


     8.3.
Assignment. This Employment Agreement, and the Executive’s rights
and obligations hereunder, may not be assigned by the Executive, and any
purported assignment by the Executive in violation hereof shall be null and
void.


     8.4.
Notices. Unless otherwise provided herein, all notices, requests,
demands, claims and other communications provided for under the terms of this
Employment Agreement shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be sent by (i) personal delivery
(including receipted courier service) or overnight delivery service, (ii)
facsimile during normal business hours, with confirmation of receipt, to the
number indicated, (iii) reputable commercial overnight delivery service courier
or (iv) registered or certified mail, return receipt requested, postage prepaid
and addressed to the intended recipient as set forth below:



If to the Company:


Coffeyville
Resources, LLC

10 E. Cambridge Circle, Suite 250

Kansas City, KS 66103

Attention: General Counsel

Facsimile: (913) 981-0000




with a copy to:


Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004

Attention: Donald P. Carleen, Esq.

Facsimile: (212) 859-4000



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If to the Executive:


Robert W. Haugen

5610 Lone Cedar Drive

Kingwood, TX 77478



     All such notices, requests, consents and other communications shall be
deemed to have been given when received. Any party may change its facsimile
number or its address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties hereto
notice in the manner then set forth.


     8.5.
Governing Law. This Employment Agreement shall be construed and
enforced in accordance with, and the rights and obligations of the parties
hereto shall be governed by, the laws of the State of Kansas, without giving
effect to the conflicts of law principles thereof. Each of the parties hereto
irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of Kansas (collectively, the “Selected Courts”) for
any action or proceeding relating to this Employment Agreement, agrees not to
commence any action or proceeding relating thereto except in the Selected
Courts, and waives any forum or venue objections to the Selected Courts.


     8.6.
Severability. Whenever possible, each provision or portion of any
provision of this Employment Agreement, including those contained in Section 4
hereof, will be interpreted in such manner as to be effective and valid under
applicable law but the invalidity or unenforceability of any provision or
portion of any provision of this Employment Agreement in any jurisdiction shall
not affect the validity or enforceability of the remainder of this Employment
Agreement in that jurisdiction or the validity or enforceability of this
Employment Agreement, including that provision or portion of any provision, in
any other jurisdiction. In addition, should a court or arbitrator determine
that any provision or portion of any provision of this Employment Agreement,
including those contained in Section 4 hereof, is not reasonable or valid,
either in period of time, geographical area, or otherwise, the parties hereto
agree that such provision should be interpreted and enforced to the maximum
extent which such court or arbitrator deems reasonable or valid.


     8.7.
Entire Agreement. From and after the Closing Date, this Employment
Agreement constitutes the entire agreement between the parties hereto, and
supersedes all prior representations, agreements and understandings (including
any prior course of dealings), both written and oral, between the parties
hereto with respect to the subject matter hereof.


     8.8.
Counterparts. This Employment Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.


     8.9.
Binding Effect. This Employment Agreement shall inure to the benefit
of, and be binding on, the successors and assigns of each of the parties,
including,


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without limitation, the Executive’s heirs and the personal representatives
of the Executive’s estate and any successor to all or substantially all of the
business and/or assets of the Company.


     8.10.
General Interpretive Principles. The name assigned this Employment
Agreement and headings of the sections, paragraphs, subparagraphs, clauses and
subclauses of this Employment Agreement are for convenience of reference only
and shall not in any way affect the meaning or interpretation of any of the
provisions hereof. Words of inclusion shall not be construed as terms of
limitation herein, so that references to “include”, “includes” and “including”
shall not be limiting and shall be regarded as references to non-exclusive and
non-characterizing illustrations.


     8.11.
Mitigation. Notwithstanding any other provision of this Employment
Agreement, (a) the Executive will have no obligation to mitigate damages for
any breach or termination of this Employment Agreement by the Company, whether
by seeking employment or otherwise and (b) except for medical benefits provided
pursuant to Section 3.2(a), the amount of any payment or benefit due the
Executive after the date of such breach or termination will not be reduced or
offset by any payment or benefit that the Executive may receive from any other
source.


[signature page follows]



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     IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the date first written above.





				
	/s/   Robert W. Haugen	 	By:	/s/   John J. Lipinski
	Robert W. Haugen	 	 	Name:   John J. Lipinski
	 	 	 	Title:    CEO






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