Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of Chief Financial Officer
On April 9, 2020, Delek Logistics Partners, LP (the "Partnership") announced the
appointment of Reuven Spiegel, age 63, as Executive Vice President and Chief
Financial Officer of the Partnership and of Delek US Holdings, Inc. ("Delek
US"). His appointment as Chief Financial Officer will be effective on May 8,
2020, after the filing with the Securities and Exchange Commission of the
Partnership's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020
(the "First Quarter 10-Q"). He will succeed Assaf Ginzburg, who had previously
advised the Partnership that he would be leaving to pursue other opportunities.
Mr. Ginzburg will remain the Partnership's Chief Financial Officer until the
filing of the First Quarter 10-Q, at which time he will also cease to be a
director of Delek Logistics GP, LLC, the general partner (the "General Partner")
of the Partnership.
Mr. Spiegel has served as a member of the Board of Directors of the General
Partner since July 2014, and as its lead independent director since 2018. As a
member of the Board of Directors of the General Partner, Mr. Spiegel served as a
member of the Audit Committee and the Conflicts Committee since September 2014
and as a member of the EHS Committee since its inception in October 2016. Since
2019, Mr. Spiegel has served as a member of the board of directors of Sapir Corp
Ltd., a Tel Aviv Stock Exchange ("TASE")-listed company (TASE: SPIR), which
develops and manages real estate projects in the United States. Prior to joining
the Board of the General Partner, Mr. Spiegel served as the chief executive
officer of Israel Discount Bank Ltd. (TASE: DSCT), the third largest commercial
bank in Israel, from 2011 to 2014, after having served as the chief executive
officer of IDB Bank in New York from 2006 to 2010 and as executive vice
president of Israel Discount Bank Ltd. from 2001 to 2005. He also has experience
as an executive in the real estate industry. Mr. Spiegel will continue to serve
as a director of the General Partner, but he will no longer serve on any of its
standing committees. Mr. Spiegel has not had any related party transactions with
the Partnership.
In connection with Mr. Spiegel's appointment, Delek US and Mr. Spiegel executed
an offer letter dated April 6, 2020 (the "Offer Letter") which has a term
beginning April 13, 2020 and terminating April 13, 2021. Among other things, the
Offer Letter provides for an annual base salary of $500,000, a cash bonus
opportunity of $500,000, and a grant of phantom units under the Partnership 2012
Long-Term Incentive Plan with a grant date fair value of $100,000 on June 10,
2020, which grant will vest semi-annually over a one-year period following the
date of grant. In the event Mr. Spiegel is terminated without cause (as defined
in the Offer Letter) or if, at any time, a change of control occurs (as defined
in the Delek US 2016 Long-Term Incentive Plan), Mr. Spiegel would be entitled to
receive an amount equal to (i) his annualized base salary for one year plus (ii)
$500,000, less amounts Mr. Spiegel has received as base salary or bonus under
the Offer Letter during the Term, subject to Mr. Spiegel executing a release of
claims in favor of Delek US. In addition to benefits available to Delek US's
senior executive officers generally, during the term of the Offer Letter Delek
US will provide Mr. Spiegel housing in the Brentwood, Tennessee area and a
company-provided automobile.
The Offer Letter includes a noncompetition clause which provides that Mr.
Spiegel will not compete with Delek US, directly or indirectly, during the term
of the Offer Letter and for one year thereafter. The Offer Letter also includes
non-solicitation provisions with respect to the customers and employees of Delek
US during the term of the Offer Letter and for one year thereafter.
The above description of the Offer Letter does not purport to be complete and is
qualified in its entirety by reference to the Offer Letter itself, a copy of
which is filed with this report as Exhibit 10.1 and is incorporated herein in
its entirety by reference.
Appointment of Chief Operating Officer
On April 9, 2020, the Partnership also announced the appointment of Avigal
Soreq, age 42, as Executive Vice President and Chief Operating Officer of the
Partnership and of Delek US, effective as of April 6, 2020. He succeeds Frederec
C. Green, who remains with the Partnership as Executive Vice President of
Corporate Development, also effective as of April 6, 2020.
Mr. Soreq has served as Executive Vice President of the Partnership since
October 2015 and as a Vice President since December 2012. He also served as the
chief commercial officer of Delek US since November 2016, as an executive vice
president since August 2015 and as a vice president since December 2012. He
served as a member of the board of directors of Alon USA Energy, Inc. from May
2015 until its merger with a subsidiary of Delek US in July 2017. Prior to
joining us in October 2011, Mr. Soreq worked in business development for
SunPower Corporation (NASDAQ: SPWR), an American energy company that designs and
manufactures solar panels. Prior to joining SunPower Corporation, Mr. Soreq
worked as a senior finance and business consultant for Trabelsy & Co. and as a
consultant in the corporate finance department for KPMG's Tel-Aviv office. Mr.
Soreq served in the Israeli Air Force in various roles between 1996 and 2004 and
reached the rank of Major. Mr. Soreq is a certified public accountant in Israel.
Mr. Soreq has not had any related party transactions with the Partnership.
In connection with Mr. Soreq's appointment, Delek US and Mr. Soreq entered into
an amended and restated employment agreement dated April 6, 2020 (the
"Employment Agreement") which, among other things, provides for the following:
an annual base salary of $600,000; an annual
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bonus opportunity with a target amount of 85% of base salary and a maximum
payout opportunity of 200% of the target amount; a promotional grant under the
Delek US 2016 Long-Term Incentive Plan on June 10, 2020, in an amount of
$250,000 split evenly between time-vesting restricted stock units ("RSUs") and
performance-based RSUs, with the time-vesting RSUs vesting over three years from
the date of grant, and the performance-based RSUs having a three-year
performance period; and, beginning in 2021, annual grants under the Delek US
2016 Long-Term Incentive Plan in an amount of $1,000,000 per year split evenly
between time-vesting RSUs and performance-based RSUs. The Employment Agreement
has a term expiring April 6, 2024.
In the event Mr. Soreq is terminated without cause (as defined in the Employment
Agreement) or terminates his employment with good reason (as defined in the
Employment Agreement), Mr. Soreq would be entitled to (i) an amount equal to the
sum of his then-current base salary and target annual bonus as in effect
immediately before any notice of termination, (ii) the costs of continuing
family health insurance coverage for 12 months following termination of
employment, (iii) any annual bonus Mr. Soreq would have otherwise been entitled
to if his employment had continued through the end of the bonus year based upon
the actual performance of Delek US, prorated for the period of actual employment
during the bonus year, and paid upon the payment of the annual bonuses to senior
executives of Delek US pursuant to Delek US's annual bonus programs, and (iv)
the immediate vesting of all unvested equity awards as follows: (A) for unvested
performance awards, on a prorated basis through the termination of employment
based on actual results evaluated after the close of the applicable performance
period and payable in a lump sum at the same time as performance awards are paid
to executives of Delek US generally and (B) for full value equity awards (e.g.,
restricted stock, restricted stock units and phantom units) and appreciation
equity awards (e.g., non-qualified stock options and stock appreciation rights),
only to the extent that such awards would have vested if Mr. Soreq's employment
had continued during a period equal to the lesser of six months following
termination of employment or the balance of the term of the Employment
Agreement.
If Mr. Soreq terminates his employment for any reason, other than with good
reason or upon his death or disability, and provides at least three months'
advance written notice of termination, Mr. Soreq would be entitled to an amount
equal to 50% of his annual base salary at the time notice is delivered, plus the
costs of continuing family health insurance coverage for 12 months following the
termination of his employment.
If, within two years of a change in control of Delek US (as defined in the
Employment Agreement), Mr. Soreq's employment is terminated by Delek US without
cause or he terminates his employment for good reason, Mr. Soreq would be
entitled to receive (i) an amount equal to two times the sum of his then-current
base salary and target annual bonus as in effect immediately before any notice
of termination, (ii) the costs of continuing family health insurance coverage
for 12 months following termination of employment, (iii) any annual bonus Mr.
Soreq would have otherwise been entitled if his employment had continued through
the end of the bonus year based upon the actual performance of Delek US,
prorated for the period of actual employment during the bonus year, and paid
upon the payment of the annual bonuses to senior executives of Delek US pursuant
. . .
Item 7.01 Regulation FD Disclosure.
On April 9, 2020, the Partnership issued a press release announcing the
management changes discussed above. A copy of the press release is attached as
Exhibit 99.1.
The information in this Item 7.01 is being furnished, not filed, pursuant to
Regulation FD. Accordingly, the information in Item 7.01 of this report will not
be incorporated by reference into any registration statement filed by the
Partnership under the Securities Act of 1933, as amended, unless specifically
identified therein as being incorporated therein by reference. The furnishing of
the information in this report is not intended to, and does not, constitute a
determination or admission by the Partnership that the information in this
report is material or complete, or that investors should consider this
information before making an investment decision with respect to any security of
the Partnership or any of its affiliates.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Offer Letter, dated April 6, 2020, between Delek US Holdings, Inc. and
10.1 Reuven Spiegel.
Amended and Restated Executive Employment Agreement, dated April 6, 2020,
10.2 between Delek US Holdings, Inc. and Avigal Soreq.
99.1 Press release issued April 9, 2020.
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