8-KLeadership ChangesExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Executive Changes (Apr 18, 2019)

Filed April 18, 2019For Securities:EPDEPDU

Summary

This 8-K filing by Enterprise Products Partners L.P. (EPD) announces the execution of retention bonus agreements with four key senior executives: A. James Teague (CEO), W. Randall Fowler (President and CFO), Graham W. Bacon (Executive Vice President), and Brent B. Secrest (Senior Vice President). These agreements are designed to incentivize continued high-level performance and commitment through specific retention periods, ending in May 2022 for Mr. Teague and May 2023 for the other three executives. The retention payments are substantial, with $5 million for Messrs. Teague and Fowler, and $1 million for Messrs. Bacon and Secrest. These payments are contingent upon the executives completing their respective retention periods while performing their duties in a highly effective manner, as determined by EPCO executives. The agreements also outline provisions for pro-rata payments in the event of a qualifying termination, such as death, disability, or termination by EPCO without cause, provided performance targets were met up to the termination date. While these agreements are with EPCO, a privately held affiliate, the associated compensation costs may be allocated to the Partnership under an existing administrative services agreement.

Key Highlights

  • 1Four senior executives, including CEO and CFO, have entered into retention bonus agreements.
  • 2Retention bonuses range from $1 million to $5 million, contingent on continued employment and performance.
  • 3Retention periods extend to May 31, 2022 (CEO) and May 31, 2023 (others).
  • 4Agreements include provisions for pro-rata payments upon qualifying terminations (death, disability, termination without cause).
  • 5Performance requirement for payouts is 'highly effective manner' as determined by EPCO executives.
  • 6Compensation costs may be allocated to EPD via an existing administrative services agreement with EPCO.

Frequently Asked Questions

The primary purpose is to retain key senior executives and incentivize them to continue performing their duties effectively through specific dates. This helps ensure leadership stability and continued operational focus for the company during critical periods.

The payments are contingent upon the executives completing their specified retention periods while performing their duties in a 'highly effective manner,' as determined by EPCO executives. Pro-rata payments are possible in case of a qualifying termination, provided performance was met up to that point.

The agreements are directly with Enterprise Products Company (EPCO), a privately held affiliate. However, under an existing administrative services agreement, all or a portion of these compensation costs may be allocated to Enterprise Products Partners L.P. (EPD).

A Qualifying Termination includes termination due to the employee's death or disability, or termination by EPCO for reasons other than 'Cause' (as defined in the agreement). The termination must also meet the definition of a 'separation from service' under IRS regulations.