CONSULTING AGREEMENT
Exhibit 10.1
EXECUTION COPY
THIS CONSULTING AGREEMENT (the “Agreement”), is made as of the 2nd day of May, 2008 by
and between CVR Energy, Inc. (the “Company”) and ▇▇▇▇▇▇ ▇▇▇▇▇ (the “Consultant”).
WHEREAS, the Consultant is a valued member of the Board of Directors of the Company (the
“Board”);
WHEREAS, the Consultant has informed the Company that he is unable to stand for reelection to
the Board in 2008 and, as a result, effective as of the Company’s 2008 annual meeting (the
“Resignation Date”), he will no longer serve as a member of the Board; and
WHEREAS, the Company desires to retain the Consultant to provide consulting services to the
Company, and the Consultant is willing to provide such services to the Company, in each case on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Retention as a Consultant. Effective as of the Resignation Date, the Company shall
retain the Consultant, and the Consultant shall serve the Company as a consultant, on the terms and
conditions set forth herein.
(a) Term.
(i) The Consultant shall provide consulting services hereunder for the period commencing as of
the Resignation Date and ending on the 2nd anniversary of the Resignation Date, unless such period
ends earlier as provided in Section 1(a)(ii) hereof (the “Consulting Term”).
(ii) The Consulting Term may be terminated by the Company effective immediately following the
occurrence of an event constituting Cause. In addition, the Consultant may terminate the
Consulting Term upon thirty (30) days notice to the Company. For purposes of this Agreement,
“Cause” shall mean (i) an act by the Consultant that constitutes willful misconduct or
gross negligence relating to the Company or any of its affiliates; or (ii) indictment of the
Consultant for, or a plea by the Consultant of guilty or no contest to, a felony or any crime
(whether or not a felony) involving fraud, dishonesty or breach of fiduciary duty. This Agreement
also terminates upon the death of the Consultant.
(b) Duties. During the Consulting Term the Consultant agrees to render such
consulting and advisory services to the Company as the Board may reasonably request provided (i)
such services are consistent with the Consultant’s status and experience and (ii) the Consultant
will not be required to provide services in any calendar month in excess of eight (8) hours.
During the Consulting Term, the Consultant agrees to make himself reasonably available
to render consulting and advisory services, subject to such other employment commitments the Consultant may
have during the Consulting Term.
(c) Compensation and Related Matters.
(i) Consulting Fees. At the beginning of each month during the Consulting Term, the
Company shall pay the Consultant a $2,000 retainer. In the event that the Consultant provides
services pursuant to the Agreement in excess of eight (8) hours during any calendar month (“Excess
Fee”), the Company shall pay the Consultant an amount equal to $400 for each such hour in excess of
eight (8). Payments of this Excess Fee shall be made monthly in arrears upon receipt by the
Secretary of the Company of an invoice for services rendered, together with such supporting
documentation therefore as the Company may reasonably request.
(ii) In addition, the Company shall reimburse the Consultant for reasonable business expenses
incurred in the performance of his duties hereunder upon submission of reasonably satisfactory
documentation in accordance with the general policies of the Company.
2. Forfeiture of Performance Points. The Consultant and the Company acknowledge that
effective upon the Consultant’s ceasing to serve on the Board, his Phantom Performance Points (the
“Performance Points”) and Phantom Service Points (the “Service Points”) (together,
the “Phantom Points”), as defined in both the Coffeyville Resources, LLC Phantom Unit
Appreciation Plan (Plan I) and the Coffeyville Resources, LLC Phantom Unit Appreciation Plan (Plan
II) (together the “Plans”), will be forfeited.
3. Additional Consideration. As additional consideration for entering into and
performing under this Agreement, the Company agrees to provide the Consultant with the following
additional compensation:
(a) On the “Payment Date” (as defined below) the Company shall pay to the Consultant,
in cash, an amount determined as follows:
(i) If the Payment Date is December 1, 2010 and a “Transaction” (as defined below) has
not occurred, the amount to be paid will be the sum of (1) the amounts that would have been
distributed to the Consultant in respect of 65% of his Phantom Points during the period commencing
on the date hereof and ending on such Payment Date (the “Applicable Period”) had he
remained on the Board during that period and not forfeited such Phantom Points and (2) an amount
equal to the “Final Value” (as defined below); or
(ii) If the Payment Date is the date of a Transaction (as defined below) or January 15, 2009
the amount to be paid will be sum of (1) the amounts that would have been distributed to the
Consultant in respect of 65% of his Phantom Points during the period
commencing on the date hereof and ending on the Payment Date had he remained on the Board
during that period and not forfeited his Phantom Points and (2) the amount that would have been
paid to the Consultant in respect of 65% of his Phantom Points in connection with the Transaction
had he remained on the Board through the date of the Transaction and not forfeited such Phantom
Points.
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(b) For purposes of this Agreement:
(i) “Final Value” means (1) the amount that would have been paid to the Consultant on
the Payment Date in respect of 65% of his Phantom Points assuming that (A) the Consultant remained
on the Board during the Applicable Period and did not forfeit such Phantom Points, (2) all of the
Common Stock of the Company then held by Coffeyville Acquisition LLC (“CA”) and Coffeyville
Acquisition II LLC (“CA II”) was sold by each of them at the closing price of the Company’s
Common Stock on the New York Stock Exchange on such Payment Date and (iii) the proceeds were
distributed to the members of CA and CA II on that day pursuant to the CA LLC Agreement and the CA
II LLC Agreement, respectively.
(ii) “Payment Date” means the earlier of (i) December 1, 2010 or (ii) the date of
consummation of an Exit Event (as defined in the CA LLC Agreement and the CA II LLC Agreement, as
applicable) provided such Exit Event also constitutes a change in control or effective control of
the Company or a change in ownership of a substantial portion of its assets, in each case within
the meaning of Section 409A of the Code (a “Transaction”); provided, that if the Exit Event
occurs during calendar year 2008 then the Payment Date shall be January 15, 2009.
(c) The Board shall in good faith make all of the determinations that are required to
implement the provisions of this Section 3, including, if applicable, determination of the value of
any non-cash consideration distributed to members of CA or CA II in connection with any
Transaction.
(d) The provisions of this Section 3 shall survive any termination or cessation of this
Agreement other than a termination for Cause.
4. Independent Contractor. The parties acknowledge and agree that the Consultant is
an independent contractor and that he is not an employee of the Company. As such, Consultant
acknowledges and agrees that he has no right to participate, and shall not participate, in any
employee, fringe benefit or other similar plan of the Company or any of its affiliates; nor shall
Consultant have any authority to act on behalf of or bind the Company with respect to any matter
and shall not represent to any third party that he has any such authority or is acting on behalf of
the Company.
5. Withholding. The Consultant acknowledges that since he is not an employee (or
person of similar status) of the Company or any of its affiliates for purposes of the Internal
Revenue Code of 1986, as amended (the “Code”), the amounts paid to him pursuant to this
agreement are not “wages” for purposes of the Code and that the Company shall not withhold with
respect to any such amounts, except to the extent required by law. The Consultant
acknowledges that he be solely responsible for all taxes imposed on him by reason of any
compensation, benefits or other amounts payable hereunder.
6. Unauthorized Disclosure. The Consultant agrees and understands that in his position
with the Company and any affiliates, he has been exposed to and has received 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
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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 any written policy of the Company or (ii) was in the Consultant’s possession or knowledge on a
non-confidential basis prior to such disclosure. The Consultant agrees that at all times during his
employment with the Company and thereafter, he 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 service to the Company, unless required by law to disclose
such information, in which case he shall provide the Company with written notice of such
requirement as far in advance of such anticipated disclosure as possible.
7. Mutual Release. Except for the obligations of the parties set forth in this
Agreement, (i) the Consultant hereby releases the Company and its affiliates, and the officers,
directors, partners, employees, shareholders, agents and employees of each of the foregoing, from
all any and all legal and equitable claims, causes of action, contracts, obligations, debts,
damages, demands, agreements, promises, liabilities, costs, expenses, attorneys’ fees and losses of
any kind whatsoever, foreseen or unforeseen, matured or unmatured, known or unknown, accrued or not
accrued, existing now or to be created in the future, based upon all facts, transactions and events
through the date of this Agreement; provided, that such release shall not extend to rights to
indemnification and/or coverage under any directors and officers liability insurance policy the
Consultant may have with respect to services to the Company and its affiliates, and (ii) the
Company hereby releases the Consultant from any and all legal and equitable claims, causes of
action, contracts, obligations, debts, damages, demands, agreements, promises, liabilities, costs,
expenses, attorneys’ fees and losses of any kind whatsoever, foreseen or unforeseen, matured or
unmatured, known or unknown, accrued or not accrued, existing now or to be created in the future,
based upon all facts, transactions and events through the date first written above.
8. Notices. Unless otherwise provided herein, all communications under this Agreement
shall be in writing. Any written communication shall be sent by (i) personal delivery or
overnight delivery service or (ii) facsimile during normal business hours, with confirmation of
receipt, to the following:
If to the Consultant:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Associates
▇.▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Associates
▇.▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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If to the Company:
CVR Energy, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
All such written communications shall be deemed to have been given when received. Any party may
change its facsimile number or its address to which communications hereunder are to be delivered by
giving the other parties hereto notice in the manner then set forth.
8. Modification of Agreement; Governing Law. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the parties hereto. No waiver by either party hereto at any time of any
breach by the other party hereto, or compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of the state of
Delaware without regard to its conflicts of law principles.
9. Severability. If any provision of this Agreement, or any application thereof to
any circumstances, is invalid, in whole or in part, such provision or application shall to that
extent be severable and shall not affect other provisions or applications of this Agreement.
10. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together will constitute one and the same
instrument.
11. Entire Agreement. As of the Resignation Date, without any further action by the
parties, this Agreement shall supersede all prior agreements and understandings between the
Consultant and the Company, whether oral or written, and shall set forth the entire understanding
between the parties hereto with respect to the subject matter hereof.
12. Headings. The headings contained herein are solely for the purpose of reference,
are not part of this Agreement and shall not in any way affect the meaning or interpretation of
this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first
above written.
| CVR ENERGY, INC. | ||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
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| Title: Chief Executive Officer | ||||||
| ▇▇▇▇▇▇ ▇▇▇▇▇ | ||||||
| /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | ||||||
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