Document:

exv10w14

 

Exhibit 10.14

RHC HOLDINGS, L.P.

LONG-TERM EQUITY APPRECIATION RIGHTS AWARD

     THIS RIGHTS AWARD (“Agreement”) is entered into as August 25, 2003 (the “Grant Date”) by and
between the Participant and RHC HOLDINGS, L.P., a Texas limited partnership (the “Company”).

     WHEREAS, the Company maintains its Long-Term Equity Appreciation Rights Plan (the “Plan”),
which is incorporated into, forms a part of, and is attached hereto as Exhibit A this
Agreement, and the Participant has been selected by the committee administering the Plan (the
“Committee”) to receive an award of Rights under the Plan.

     NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant, as follows:

     1. Award. This Agreement specifies the terms of the Rights awarded to the Participant
under the Plan. A Rights Award under this Plan shall be in the form of an equity appreciation right
(“Right”) entitling the Participant to receive, with respect to each of his or her Vested Rights,
cash or Notes, at the Company’s option, in an amount equal to the excess of (a) the Fair Market
Value of such Right at the date of exercise over (b) the Issue Price of such Right.

     2. Terms of Award. The terms of Rights awarded to the Participant under this
Agreement are as follows:

     (a) The “Participant” is Gary R. Dalke

     (b) The “Vesting Date” is June 1, 2003

     (c) The number of Rights awarded to Participant is 1,000

     (d) The “Issue Price” of each Right is $865.74

     (e) The “Exercise Period” for Rights awarded to a Participant under this Agreement
shall be the second quarter of each fiscal year of the Company, subject to the terms and
conditions herein. Exercise of a Right shall not be effective until the Committee receives
written notice of exercise.

     (f) The “Fair Market Value” of a Right as of any date shall be Value multiplied by
        .001% on the applicable date. “Value” means four times the average annual EBITDA of Western
Refining Company, LP (“Western”) for the prior thirty-six (36) months ended the end of its
fiscal year immediately preceding the date for which the calculation is made plus its Cash
minus its Debt at the end of such fiscal year.

     (g) “EBITDA” for any period shall be the sum of Western’s net income (excluding
nonrecurring income or gain), interest expense, taxes on income, depreciation and
amortization (to the extent deducted in the determination of net income and without
duplication).

 

 

     Other defined terms used in this Agreement are the same as the definitions used in the Plan.

     3. Date of Exercise. Subject to the limitations of this Agreement, thirty-three
percent (33.0%) of the total number of Rights awarded to Participant under this Plan shall vest and
become exercisable on each anniversary of the Vesting Date. Unvested Rights shall not vest and
become exercisable on the otherwise applicable Vesting Date if the Participant’s Separation occurs
on or before such Vesting Date. Notwithstanding the foregoing provisions of this Section 3, Rights
awarded under this Agreement shall fully vest and become exercisable as follows:

     (a) Upon the Participant’s Separation due to Disability or death.

     (b) Upon the date of a Change in Control, if the Participant’s Separation does not
occur on or before the Change in Control.

     4. Expiration. Rights awarded under this Agreement shall not be exercisable after the
Company’s close of business on the Expiration Date. The “Expiration Date” shall be earliest to
occur of:

     (c) the ten-year anniversary of the Grant Date unless the Committee extends the term of
such Rights;

     (d) if the Participant’s Separation occurs by reason of Disability, ninety (90) days
after the date of Separation;

     (e) if the Participant’s Separation occurs by reason of death, ninety (90) days after
the date of the Participant’s death; or

     (f) if the Participant’s Separation occurs for any reason other than death or
Disability sixty (60) days after the date of Participant’s Separation.

     5. Exercise. Rights granted hereby may be exercised by filing a written notice, in
the form attached hereto as Exhibit B, with the General Partner of the Company at its
principal executive headquarters prior to the Company’s close of business on the Expiration Date.
Such notice shall specify the number of Rights hereunder which the Participant elects to exercise.
Upon the exercise of Rights, the Participant shall receive cash or a Note in an amount equal to the
excess of (a) the Fair Market Value of each Vested Right on the date of exercise over (b) the Issue
Price of such Right (the “Company Obligation”). The Note shall not be for more than a ten (10)
year term, bearing interest at the prime rate as reported in the Wall Street Journal from time to
time with principal and interest payments being payable quarterly. The foregoing notwithstanding,
the unpaid Company Obligation shall be paid at the same time of a Change in Control, to the extent
possible, that the selling partners receive consideration for the sale of their interests in the
Company. If at any time the Participant breaches any agreement with the Company or any of its
Affiliates (including without limitation this Agreement or any non-competition agreement or
confidentiality agreement) all obligations of the Company to make payments to the Participant under
this Agreement shall cease and the Participant shall be obligated to return to the Company all
payments made by it hereunder. Notwithstanding the

EQUITY
APPRECIATION RIGHTS PLAN AWARD— Page 2

 

 

foregoing, if a payment under the Plan or Note will cause the Company or any of its Affiliates
to violate any provisions of applicable law, their respective organizational documents, or any
agreement to which they are a party, such payment shall be delayed until such time as the payment
can be made. The amount of any payment that is so delayed shall earn interest as provided above
until such time as the payment is made. Such payment shall be made as soon as practicable after the
restriction is removed or otherwise eliminated.

     6. Payments. Payments and payment obligations with respect to any Rights granted
under this Plan shall be made only from the general assets of the Company. The Plan shall not be a
“funded” plan for purposes of ERISA or the Code. The Company intends for its obligations under the
Plan to be unfunded, unsecured promises on the part of the Company to pay in the future.

     7. Withholding. All distributions of cash under this Agreement are subject to
withholding and the Company shall withhold all applicable taxes with respect to distributions under
this Agreement.

     8. Transferability. Except as otherwise provided in this Section 7, each Right
awarded under this Agreement is not transferable other than as provided in Section 8 below.

     9. Heirs and Successors. This Agreement shall be binding upon, and inure to the
benefit of, the Company, its Affiliates, and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially
all of the Company’s assets and business. If any Rights awarded to the Participant under this
Agreement have not been exercised or delivered, respectively, at the time of the Participant’s
death, such Rights shall be exercisable by the Designated Beneficiary, and such benefits shall be
delivered to the Designated Beneficiary, in accordance with the provisions of this Agreement and
the Plan. The “Designated Beneficiary” shall be the beneficiary or beneficiaries designated by the
Participant in a writing filed with the Committee in the form attached hereto as Exhibit C,
and at such time as the Committee shall require. If a deceased Participant fails to designate a
beneficiary, or if the Designated Beneficiary does not survive such Participant, any Rights awarded
to such Participant and any benefits distributable to such Participant shall be exercised by or
distributed to the legal representative of the estate of such Participant. If a deceased
Participant designates a beneficiary but the Designated Beneficiary dies before the Designated
Beneficiary’s exercise of all Rights awarded under this Agreement or before the complete
distribution of benefits to the Designated Beneficiary under this Agreement, then any Rights that
would have been exercisable by the Designated Beneficiary shall be exercised by the legal
representative of the estate of the Designated Beneficiary, and any benefits distributable to the
Designated Beneficiary shall be distributed to the legal representative of the estate of the
Designated Beneficiary.

     10. Plan Governs. Notwithstanding anything in this Agreement to the contrary, the
terms of this Agreement shall be subject to the terms of the Plan and is subject to all
interpretations, amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan.

EQUITY
APPRECIATION RIGHTS PLAN AWARD— Page 3

 

 

     11. Not an Employment or Similar Contract. This Agreement will not confer on the
Participant any right with respect to continuance of employment or other service with the Company
or any of its Affiliates nor will it interfere with or prevent in any way the right of the Company
or any of its Affiliates would otherwise have to terminate or modify the terms of such
Participant’s employment or other service at any time. The foregoing shall apply even if it is
alleged or proven that any such termination was to avoid benefits otherwise available to the
Participant under this Agreement.

     12. Notices. Any written notices provided for in this Agreement shall be in writing
and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight
courier, or by postage paid first class mail. Notices sent by mail shall be deemed received three
business days after mailed but in no event later than the date of actual receipt. Notices shall be
directed, if to the Participant, at the Participant’s address indicated by the Company’s records,
or if to the Company, at the Company’s principal executive office.

     13. Amendment. This Agreement may be amended by written agreement of the Participant
and the Company, without the consent of any other person.

     14. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflict of law provisions of any
state or other jurisdiction.

     IN WITNESS WHEREOF, the Participant has executed this Agreement, and the Company has caused
this Agreement to be executed in its name and on its behalf, all as of the Grant Date.

	 	 	 	 	 
	 

	 	THE PARTICIPANT:	 	 
	 
	 	 	 	 
	 

	 	     /s/ Gary R. Dalke
 

	 	 
	 

	 	Name: Gary R. Dalke	 	 

	 	 	 	 	 	 	 
	 	 	THE COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	RHC HOLDINGS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	WRC Refining Company, its

General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	 By:
	 	/s/ Paul Foster
 

Name: Paul Foster
	 	 
	 

	 	 	 	Title: President	 	 

EQUITY
APPRECIATION RIGHTS PLAN AWARD— Page 4

 

 

EXHIBIT A

THE PLAN

EQUITY APPRECIATION RIGHTS PLAN — Page 1

 

 

EXHIBIT B

RHC HOLDINGS, L.P.

LONG-TERM EQUITY APPRECIATION RIGHTS PLAN

NOTICE OF EXERCISE

     The undersigned hereby elects to exercise the Rights Award as described below:

1. Date on which Rights were awarded to Participant:                                                             

2. Number of Rights being exercised:                                                             

3. Issue Price of each Right: $                                                             

	 	 	 	 	 	 	 
	 	 	OPTION HOLDER:
	 
	 	 	 	 	 	 
	 	 	By:
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	SSN:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 
	 

	 	 	 	 	 	 

EQUITY
APPRECIATION RIGHTS PLAN EXCERCISE NOTICE— Page 1

 

 

EXHIBIT C

RHC HOLDINGS, L.P.

LONG-TERM EQUITY APPRECIATION RIGHTS PLAN

BENEFICIARY DESIGNATION

     I wish to designate the following person(s) as my beneficiary(ies) to exercise any outstanding
Rights and to receive any benefits under the RHC Holdings, L.P. Long-Term Equity Appreciation
Rights Plan (the “Plan”) in the event of my death. I reserve the right to change this designation
with the understanding that this designation, and any change thereof, will be effective only upon
delivery of a written statement thereof to RHC Holdings, L.P. The right to exercise my outstanding
Rights and to receive benefits under the Plan will be transferred to my primary beneficiaries who
survive me, and to my secondary beneficiaries who survive me only if none of my primary
beneficiaries survive me.

1. PRIMARY BENEFICIARY

	 	 	 	 	 
	Name of Beneficiary
	 	Percentage
	 	Relationship

2. SECONDARY BENEFICIARY

	 	 	 	 	 
	Name of Beneficiary
	 	Percentage
	 	Relationship

     I acknowledge that execution of this form and delivery thereof to RHC Holdings, L.P. revokes
all prior beneficiary designations I have made with respect to my outstanding awards under the
Plan.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Participant’s signature
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Participant’s Printed Name

	 	 	 	 

Date
	 	 

EQUITY
APPRECIATION RIGHTS PLAN BENEFICIARY DESIGNATION— Page 1exv10w16

 

Exhibit 10.16

PROMISSORY NOTE

	 	 	 	 	 
	El Paso, Texas
	 	June 24, 2005
	 	$2,000,000.00

     For value received, the undersigned (whether one or more, the “Borrower”) promises to pay to
the order of WESTERN REFINING COMPANY, L.P. a Delaware limited partnership (whether one or more,
the “Noteholder”), at its offices at 6500 Trowbridge, El Paso, Texas 79905 the sum of TWO MILLION
AND NO/100 DOLLARS ($2,000,000,00), or so much thereof as may be advanced, in legal tender money of
the United States, with interest thereon from date until maturity at the rate or rates set forth
below. Interest from the date hereof on the principal balance from time to time remaining unpaid
prior to maturity shall be payable at the Prime Rate (as hereinafter defined) in effect from day
today. Interest shall be computed as if each year consisted of 365 days or 366 days, as applicable.

     All past due principal and interest on this Note shall bear interest after maturity (whether
by acceleration or otherwise) until paid at an interest rate per annum which, from day to day,
shall be equal to the lesser of (a) the highest interest rate permitted by applicable law (the
“Maximum Rate”) or, (b) the rate of twelve percent (12%) per annum, computed on the basis of a 365
day or 366 day year, as the case may be.

     As used herein, Prime Rate shall mean the rate of interest per annum quoted on a daily basis
in The Wall Street Journal (Southwest Edition) as the base rate on corporate loans at large
U.S. Money Center Commercial Banks (or as “Prime Rate” may be similarly therein defined). In the
event more than one rate is quoted, or if a range or “spread” of rates is quoted, then, in such
case, the highest rate quoted shall be the “Prime Rate” for the purposes thereof. Such Prime Rate
is currently quoted under the “Money Rates” column for the prior business day; provided, however,
for the purpose of this Note, the quoted Prime Rate shall be effective as of and for the date of
publication of the issue of The Wall Street Journal in which the Prime Rate is quoted, and
not such prior business day, and shall remain in effect until the Prime Rate is reset in accordance
with the foregoing. If The Wall Street Journal should cease quoting such Prime Rate, then
Lender may refer to another similar source that identifies the Prime Rate. THE PRIME RATE IS USED
AS A DEVICE TO SET THE RATE OF INTEREST ONLY; IN NO EVENT IS IT TO BE CONSTRUED AS A WARRANTY OR
REPRESENTATION OF FAVORABILITY OF RATE OR A REPRESENTATION THAT LOANS WILL NOT BE MADE TO OTHER
BORROWERS AT LOWER RATES.

     This Note is secured by a Deed of Trust lien covering Lot 13, Block 17 and Lot 20, Block 7,
Womble Addition, an addition to the City of El Paso, El Paso County, Texas, according to the map
thereof on file in Volume 13, Page 32, Plat Records of El Paso County, Texas and is to be secured
by deeds of trust liens covering additional properties acquired by Borrower with the proceeds of
advances by Noteholder to Borrower made at the sole discretion of Noteholder.

     Accrued interest only shall be due and payable quarterly, with the first such quarterly
payment of accrued interest being due and payable on September 1, 2005 and thereafter on the same
day of each and every third month until June 1, 2010, at which time the entire unpaid balance of
principal plus accrued interest shall be due and payable.

1

 

     THIS LOAN IS PAYABLE IN FULL AT MATURITY. YOU MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE
LOAN AND UNPAID INTEREST THEN DUE. THE NOTEHOLDER IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT
THAT TIME. YOU WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS THAT YOU MAY OWN,
OR YOU WILL HAVE TO FIND A NOTEHOLDER, WHICH MAYBE THE NOTEHOLDER YOU HAVE THIS LOAN WITH, WILLING
TO LEND YOU THE MONEY. IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL OF
THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING FROM THE SAME
NOTEHOLDER.

     Lender may disburse the principal of this Note to Borrower in one or more advances from time
to time so long as the outstanding principal balance hereof never at any time exceeds the principal
sum of $2,000,000,00, and Borrower shall be entitled to prepay the principal or interest owing on
this Note from time to time and at any time, in whole or in part, down to a minimum of $100.00,
without penalty. Thereafter, prior to the final maturity date of this Note, if no conditions for
accelerations have occurred and are continuing, and if Borrower requests, Lender, at its option may
make additional advances of principal hereunder. All prepayments shall be applied first to
interest then accrued and the balance in reduction of principal, and this Note shall not be deemed
to be terminated or cancelled prior to the maturity date hereof even though the entire principal
balance hereof may from time to time be paid in full.

     It is understood and agreed that failure to pay any installment of principal or interest on
this Note when due, or a default under the terms of any of the collateral documents securing
repayment hereof, shall at the election of the holder hereof mature without notice, demand or
presentment, the entire principal balance of this Note then unpaid. If Noteholder requires the
services of an attorney to enforce the payment of this Note or the performance of the other
collateral documents, or if this Note is collected through any law suit, probate, bankruptcy, or
other judicial proceeding, Borrower agrees to pay Noteholder all court costs, reasonable attorney’s
fees and expenses, and other collection costs incurred by Noteholder.

     The extension of time of payment of any installment(s) due hereon, or the entire Note, at any
time or times shall not operate to release the security for this obligation or any person liable
hereon in any manner. All makers, signers, guarantors, sureties and endorsers severally waive (to
the extent permitted by law) diligence, demand, notice, presentment, notice of intention to
accelerate, notice of acceleration, protest, and notice of dishonor. Failure of the holder of this
Note to exercise any right given to it hereunder shall not be deemed laches or a waiver thereof,
but any such right shall be exercised by the holder thereof at any time after default by any person
hereon and against any security or person liable hereon.

     Borrower and Noteholder intend to conform strictly to the applicable federal or state usury
laws now or hereafter in force with respect to this Note. To such end: (i) the aggregate of all
interest and other charges constituting interest under such applicable usury laws and contracted
for, chargeable or receivable under all documents and instruments now or hereafter executed in
connection with this Note, including this Note (collectively the “Loan Documents”),

2

 

shall never exceed the maximum amount of interest, nor produce a rate in excess of the maximum
contract rate of interest that Noteholder is authorized to charge Borrower under such applicable
usury laws; (ii) if any excess interest is provided for, it shall be deemed a mistake, and the
excess shall, at the option of Noteholder, either be refunded to Borrower or credited on the unpaid
principal balance of this Note, and the Loan Documents shall be automatically reformed to permit
for only the collection of the maximum legal contract rate and the maximum amount of interest;
(iii) in determining the maximum amount of interest that Noteholder may charge to Borrower, all
interest shall be amortized, prorated, allocated and spread over the entire term of this Note to
the full extent permitted by applicable federal or state law; and (iv) in the event that this Note
is prepaid or the maturity as accelerated, unearned interest shall be cancelled and, if theretofore
paid, shall at the option of Noteholder, either be refunded to Borrower or credited on the unpaid
balance of this Note.

     This Note has been executed and delivered in Texas, and shall be construed in accordance with
the applicable laws of the State of Texas and the laws of the United States of America applicable
to transactions in Texas; provided, however, it is understood that the loan evidenced by this Note
is not made pursuant to Chapter 342 or Chapter 343 of the Texas Finance Code, and that Chapter 346
of the Texas Finance Code relating to certain revolving credit loan accounts and tri-party accounts
is not applicable to this Note. The applicable rate ceiling under Texas law shall be the indicated
“weekly” rate ceiling from time to time in effect as provided in Chapter 303 of the Texas Finance
Code,

	 	 	 	 	 	 	 
	 	 	ASCARATE GROUP LLP, a Texas limited liability

partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Scott Weaver
 

Scott Weaver
	 	 
	 

	 	Title:
	 	Designated Representative	 	 

3

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