form8k.htm
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): February 11, 2010 (February
5, 2010)
GENESIS
ENERGY, L.P.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-12295
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76-0513049
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(State
or other jurisdiction of incorporation or organization)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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919
Milam, Suite 2100, Houston, Texas
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77002
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(Address
of principal executive offices)
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(Zip
Code)
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(713)
860-2500
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240-14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240-14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240-13e-4(c))
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Item 1.01.
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Entry
into a Material Definitive
Agreement
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Registration Rights
Agreement
On
February 5, 2010, affiliates of Quintana Capital Group II, L.P., an
energy-focused private equity firm (“Quintana”),
members of the Davison family, and members of the senior executive management
team of Genesis Energy, L.P. (“Genesis”)
purchased all of the Class A membership interests in its general partner,
Genesis Energy, LLC from Denbury Resources Inc. (“Denbury”). In
connection with this transaction, which is referred to herein as the “GP
Transaction,” Genesis entered into a Registration Rights Agreement, dated
February 5, 2010 (the “Registration
Rights Agreement”), with Denbury and two of its affiliates, Denbury
Gathering & Marketing, Inc. (“DGM”) and
Denbury Onshore, L.L.C (collectively with Denbury, the “Denbury
Parties”). The Registration Rights Agreement provides
registration rights with respect to all of the common units owned by the Denbury
Parties. Pursuant to the Registration Rights Agreement, Genesis
has agreed to file a shelf registration statement on Form S-3 within 90 days
after the date thereof, and to use its commercially reasonable best efforts to
cause such registration statement to be declared effective no later than 150
days after the date thereof. Additionally, the Denbury Parties have
certain rights to demand registrations of their units, in the form of an
underwritten offering, as well as piggyback registration rights.
The
description above is qualified in its entirety by the Registration Rights
Agreement, which is filed as Exhibit 4.1 to this Current Report on Form
8-K.
Second Amendment to First
Amended and Restated Credit Agreement
In
connection with the GP Transaction, Genesis entered into the Second Amendment to
First Amended and Restated Credit Agreement, dated February 5, 2010 (the “Credit Agreement
Amendment”), by and among Genesis, Genesis Crude Oil, L.P., and a
syndicate of lenders.
The
Credit Agreement Amendment amended, among other things, the definition of
“Change in Control” to permit the GP Transaction and the ownership structure
described in item 5.01 below.
The
description above is qualified in its entirety by the Second Amendment to First
Amended and Restated Credit Agreement, which is filed as Exhibit 10.1 to this
Current Report on Form 8-K.
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Item
5.01.
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Changes
in Control of Registrant
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On
February 5, 2010, affiliates of Quintana, along with members of the Davison
family and members of the senior executive management team of Genesis, EIV
Capital Fund LP, a Delaware limited partnership (“EIV”), and
other investors (collectively, the “New Owner
Group”), acquired control of our general partner. Prior to
Quintana’s investment, Denbury controlled our general partner and owned 10.2% of
the outstanding common units of Genesis. The New Owner Group acquired
the Class A membership interest in our general partner for
consideration of $100 million, net of a deduction of $13.1 million for
settlement of obligations of Denbury to members of our senior executive
management team. The net cash purchase price of $86.9 million was
obtained from the New Owner Group.
In
connection with the GP Transaction, Quintana, members of the Davison family and
EIV also acquired the right to appoint directors to the board of directors of
our general partner as more fully described in item 5.02 below.
The
Amended and Restated Limited Liability Company Agreement of our general partner
contains a number of restrictions and other provisions regarding the transfer of
general partner units, including a right of first refusal with respect to Series
A units held by management following the Merger (defined below), a drag along
right in favor of Quintana requiring other members to consent to a sale of all
or substantially all of our general partner’s assets and similar business
combinations, and tag along rights in favor of other holders of Series A units
in certain instances.
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Item
5.02.
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers
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Pursuant
to our general partner’s Amended and Restated Limited Liability Company
Agreement, Quintana has the right to designate and appoint six members to the
board of directors of our general partner, at least two of which designees must
be independent. On February 5, 2010, Quintana appointed four members
to the board of directors of our general partner as follows:
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Robert
C. “Bo” Sturdivant serves as Chairman of the Board of Directors of our
general partner. Mr. Sturdivant currently serves as Vice
President – Finance of Quintana, and has served in various roles with
Quintana since 1974.
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·
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Corbin
J. Robertson III has served as Managing Director, Coal and Downstream for
Quintana since 2006, and is a principal in that
organization. Prior to joining Quintana, Mr. Robertson was a
Managing Director of Spring Street Partners, a hedge fund focused on
undervalued small cap securities, a position he held from 2002 to 2007.
Prior to joining Spring Street, Mr. Robertson worked for three years as a
Vice President of Sandefer Capital Partners LLC, a private investment
partnership focused on energy related investments, and two years as a
management consultant for Deloitte and Touche
LLP.
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·
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William
K. Robertson has served as a Managing Director for Quintana since 2005,
and is a principal in that
organization.
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Donald
L. Evans has served as a President of The Don Evans Group since 2005 and
served as the 34th Secretary of the U.S. Department of Commerce from 2001
to 2005. Since 2007, Mr. Evans has also served as the
non-executive chairman of the board of directors of Energy Future Holdings
Corp.
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The
members of the Davison family have the right to designate and appoint up to
three directors, one of whom must be independent, as long as members of the
Davison family hold at least 75% of the Series A units of our general partner
that they hold as of the effective date of the Amended and Restated Limited
Liability Company Agreement (the “Effective
Date”). If members of the Davison family hold less than 75%
but more than 50% of the Series A units of our general partner that they held on
the Effective Date, they have the right to appoint two directors and if they
hold less than 50%, they have the right appoint one director. The
members of the Davison family designated and appointed James E. Davison and
James E Davison, Jr. to continue to serve as directors of our general
partner. They waived their right to appoint a third director until a
position on the board of directors is available. EIV, which has the
right to designate one director under the Amended and Restated Limited Liability
Company Agreement of our general partner as long as it holds at least 75% of the
Series A units of our general partner that its hold as of the Effective Date,
also waived its right to appoint a director until a position on the board of
directors is available. Grant E. Sims, Chief Executive Officer, will continue as
a director of our general partner.
Effective
February 5, 2010, in conjunction with the GP Transaction and the appointment of
new directors described above, Mark C. Allen, Ronald T. Evans, and Phil Rykhoek
resigned as directors of our general partner.
In
connection with the GP Transaction, the employment of Joseph A. Blount, Jr.,
President and Chief Operating Officer of our general partner, was terminated
effective February 10, 2010. In connection with such termination, Mr.
Blount will receive a severance package consisting of payment of his base salary
for a period of 36 months, and health and welfare benefits for a period of 18
months.
In
connection with the GP Transaction and the Merger, all of the Class B membership
interests in our general partner held by the top three existing senior executive
officers of Genesis (Grant E. Sims, Chief Executive Officer, Mr.
Blount, and Robert V. Deere, Chief Financial Officer) were either (i) converted
into Series A units of our general partner or (ii) or redeemed by our general
partner in accordance with certain Class B Agreements (as defined below) and/or
our general partner’s existing limited liability company agreement; the deferred
compensation plan to which certain executive officers were parties and the
deferred compensation grants under such plan were terminated and the obligations
thereunder were fulfilled; certain employment agreements were amended; and new
equity interests in our general partner were granted to the senior executive
management team of Genesis.
Our
general partner was required to redeem the individual Class B membership
interests under our general partner’s existing limited liability company
agreement as a result of the change of control effected by the GP
Transaction. Pursuant to Class B Agreements among each of the top
three senior executive officers of Genesis and Denbury, DGM and our general
partner, the parties agreed to amend our general partner’s existing limited
liability company agreement to provide for the conversion of the Class B
membership interest into Series A units in the GP Transaction and subsequent
merger of the Quintana acquisition vehicle into our general partner (the “Merger”),
rather than for the redemption of the Class B membership interests upon a change
of control, and/or to confirm the amount such executive would receive upon
redemption. Pursuant to a Class B Agreement dated February 5, 2010
among Mr. Sims, Denbury, DGM and our general partner and an agreement with the
Quintana acquisition vehicle used to acquire our general partner, a portion of
Mr. Sims’ individual Class B membership interests in our general partner were
converted into Series A units in our general partner following the Merger and
his remaining Class B membership interests were redeemed for $221,868 in
cash. Mr. Deere also entered into a Class B Agreement dated February
5, 2010 with Denbury, DGM and our general partner and an agreement with the
Quintana acquisition vehicle used to acquire our general partner pursuant to
which a portion of his individual Class B membership interests were converted
into Series A units in our general partner following the Merger and his
remaining Class B membership interests were redeemed for $431,684 in
cash. Such agreements are referred to herein as the “Class B
Agreements.”
In
connection with the closing of the GP Transaction and the Merger and pursuant to
restricted unit agreements entered into with our general partner, Mr. Sims,
along with other members of the senior executive management team of Genesis,
including Mr. Deere and Karen N. Pape, Senior Vice President and Controller,
received an aggregate of 767 Series B-1 units in our general partner that vest
as follows: (i) 25% vest on the first anniversary of the issuance,
(ii) 33 1/3% of the remaining unvested units vest on the second anniversary of
the issuance, (iii) 50% of the remaining unvested units vest on the third
anniversary of the issuance and (iv) 100% of the remaining unvested units vest
on the fourth anniversary of the issuance. Under the terms of the
restricted unit agreements, in the event of certain public offerings, a change
of control or similar transaction, the executive’s unvested units will become
fully vested. In the event of death or disability, the executive’s employment
date will be deemed extended through to the next anniversary date for vesting
purposes. If the executive is terminated for “cause” or he or she
leaves without “good reason” (as such terms are defined in the restricted unit
agreements), he or she will forfeit all of his or her units, whether vested or
unvested. If the executive is terminated without “cause,” by death or
disability, or by the executive for “good reason,” then he or she will forfeit
all unvested units and our general partner will have the right to repurchase or
redeem any vested units. Subject to the rights of the holders of
Series A units to receive distributions up to certain threshold amounts, holders
of Series B-1 units, upon vesting, have the right to receive quarterly
distributions and certain tax distributions in accordance with the Amended and
Restated Limited Liability Company Agreement of our general
partner. Messrs. Sims and Deere and Ms. Pape received 367, 67 and 33
Series B-1 units in our general partner, respectively.
Messrs.
Sims and Deere each also entered into a waiver agreement (collectively, the
“Waiver
Agreements”), which amended the terms of their respective employment
agreements waiving certain change of control and severance payment rights and
agreed to a form of employment agreement and related release that our general
partner may require each to execute in the future.
The
description above is qualified in its entirety by the Amended and Restated
Limited Liability Company Agreement, Class B Agreements, Waiver Agreements and
restricted unit agreements, which are filed as Exhibits 3.1 and 10.2 through
10.9 to this Current Report on Form 8-K.
In
connection with the GP Transaction and the Merger, effective February 5, 2010,
the limited liability company agreement of our general partner was amended and
restated.
The
description above is qualified in its entirety by the Amended and Restated
Limited Liability Company Agreement, which is filed as Exhibit 3.1 to this
Current Report on Form 8-K.
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Item
9.01.
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Financial
Statements and Exhibits
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(d) Exhibits
The
following materials are filed as exhibits to this Current Report on Form
8-K.
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Exhibits.
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Amended
and Restated Limited Liability Company Agreement of Genesis Energy, LLC
dated February 5, 2010.
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Registration
Rights Agreement, dated as of February 5, 2010, among Genesis Energy,
L.P., Denbury Resources Inc., Denbury Gathering & Marketing, Inc., and
Denbury Onshore, L.L.C.
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Second
Amendment to First Amended and Restated Credit Agreement, dated as of
February 5,
2010, among Genesis Crude Oil, L.P., Genesis Energy, L.P., the lenders
party thereto, Fortis Capital Corp. and Deutsche Bank Securities
Inc.
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Class
B Agreement (Sims), dated February 5, 2010.
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Class
B Agreement (Blount), dated February 5, 2010.
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Class
B Agreement (Deere), dated February 5, 2010.
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Waiver
Agreement (Sims), dated February 5, 2010.
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Waiver
Agreement (Deere), dated February 5, 2010.
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Restricted
Unit Agreement (Sims), dated February 5, 2010.
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Restricted
Unit Agreement (Deere), dated February 5, 2010.
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Restricted
Unit Agreement (Pape), dated February 5,
2010.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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GENESIS
ENERGY, L.P.
(a
Delaware limited partnership)
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By:
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GENESIS
ENERGY, LLC, as its sole
general
partner
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Date: February
11, 2010
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By:
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/s/ Robert V.
Deere
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Robert V. Deere
Chief Financial Officer
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