Cause is narrowly defined to mean that a court of competent jurisdiction has entered a final, non-appealable judgment finding the general partner liable for actual fraud, gross negligence, or willful or wanton misconduct in its capacity as the general partner.
Withdrawal or removal of the general partner of NuStar Energy also constitutes withdrawal or removal of the general partner of the Operating Partnership.
In addition, NuStar Energy will be required to reimburse the departing general partner for all amounts due the departing general partner, including, without limitation, all employee-related liabilities, including severance liabilities, incurred for the termination of any employees employed by the departing general partner for the benefit of NuStar Energy.
Transfer of General Partner Interests
NuStar Energys general partner may transfer all or any part of its general partner interest in NuStar Energy without unitholder approval.
No transfer by NuStar Energys general partner of all or any part of its general partner interest is permitted unless (1) the transferee agrees to assume the rights and duties of the general partner and be bound by the partnership agreement, (2) NuStar Energy receives an opinion of counsel regarding limited liability and tax matters and (3) such transferee agrees to purchase all of the partnership interests of the general partner as the general partner of the Operating Partnership and any of NuStar Energys or the Operating Partnerships subsidiaries.
Change of Management Provisions
NuStar Energys partnership agreement contains specific provisions that are intended to discourage a person or group from attempting to remove NuStar Energys general partner or otherwise change management, including the following:
| ||•||with certain limited exceptions, any partnership securities held by a person that owns 20% or more of any class of partnership securities then outstanding, other than NuStar Energy’s general partner and its affiliates, cannot be voted on any matter; provided, however that such restriction generally does not apply to any Series D Preferred Units held by a person who acquired such Series D Preferred Units pursuant to the Series D Cumulative Convertible Preferred Unit Purchase Agreement, dated as of June 26, 2018, among NuStar Energy L.P. and the purchasers party thereto; |
| ||•||limiting the ability of unitholders to replace members of the board of directors of NuStar GP, LLC (the board) by having staggered elections where each director is elected for a three-year term and providing that directors may only be removed for cause; and|
| ||•||limiting the ability of unitholders to call meetings or to acquire information about NuStar Energy’s operations, as well as other provisions limiting the unitholders’ ability to influence the manner or direction of management.|
An annual meeting of the limited partners for the election of directors to the board, and other matters that NuStar Energys general partner submits to a vote of the limited partners, will be held in April of each year or on such other date as determined by NuStar Energys general partner. Special meetings of the limited partners may be called by NuStar Energys general partner or by limited partners owning 20% or more of the outstanding limited partner interests of the class or classes for which a meeting is proposed.
For the purpose of determining the limited partners entitled to notice of or to vote at any meeting or to give approvals without a meeting, NuStar Energys general partner may set a record date, which date for purposes of notice of a meeting shall not be less than 10 days nor more than 60 days before the date of the meeting.
Each record holder of limited partner interests has a vote according to his percentage interest in NuStar Energy. Limited partner interests held for a persons account by another person (such as a broker, dealer or bank), in whose name such limited partner interests are registered, will be voted by such other person in favor of, and at the direction of, the beneficial owner unless the arrangement between such persons provides otherwise. Representation in person or by proxy of a majority of the outstanding limited partner interests of the class or classes for which a meeting has