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EXHIBIT 10 (P)
EMPLOYMENT CONTINUATION AGREEMENT
THIS AGREEMENT between Quaker State Corporation, a Delaware
corporation (the "Company"), and _____________________________________ (the
"Executive"), dated as of this _______ day of ____________________________,
19____.
W I T N E S S E T H:
WHEREAS, the Company has employed the Executive in an officer position
and has determined that the Executive holds an important position with the
Company;
WHEREAS, the Company believes that, in the event it is confronted
with a situation that could result in a change in ownership or control of the
Company, continuity of management will be essential to its ability to evaluate
and respond to such situation in the best interests of shareholders;
WHEREAS, the Company understands that any such situation will present
significant concerns for the Executive with respect to his financial and job
security;
WHEREAS, the Company desires to assure itself of the Executive's
services during the period in which it is confronting such a situation, and to
provide the Executive certain financial assurances to enable the Executive to
perform the responsibilities of his position without undue distraction and to
exercise his judgment without bias due to his personal circumstances;
WHEREAS, to achieve these objectives, the Company and the Executive
desire to enter into an agreement providing the Company and the Executive with
certain rights and obligations upon the occurrence of a Change of Control or
Potential Change of Control (as defined in Section 2);
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:
1. Operation of Agreement. (a) Effective Date. The effective date
of this Agreement shall be the date on which a Change of Control occurs (the
"Effective Date"), provided that, except as provided in Section 1 (b), if the
Executive is not employed by the Company on the Effective Date, this Agreement
shall be void and without effect.
(b) Termination of Employment Following a Potential Change of
Control. Notwithstanding Section 1 (a), if (i) the
Executive's employment is terminated by the Company Without
Cause (as defined in Section 6(c)) after the occurrence of a
Potential Change of Control and prior to the occurrence of a
Change of Control and (ii) a Change of Control occurs within
one year of such termination, the Executive shall be deemed,
solely
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for purposes of determining his rights under this Agreement to
have remained employed until the date such Change of Control
occurs and to have been terminated by the Company Without
Cause immediately after this Agreement becomes effective.
2. Definitions. (a) Change of Control. For the purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred if:
(i) any Person (as defined below) has acquired,
"beneficial ownership" (within the meaning of Rule
13d-3, as promulgated under Section 13(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of securities of the Company
representing 30% or more of the combined Voting Power
(as defined below) of the Company's securities;
(ii) as a result of a solicitation subject to Rule 14a-11
under the Exchange Act (or any successor rule
thereto), the persons who were directors of the
Company immediately before such solicitation shall
cease to constitute at least a majority of the Board
or the board of directors of any successor to the
Company; or
(iii) the stockholders of the Company approve a merger,
consolidation, share exchange, division, sale or
other disposition of the assets of the Company (a
"Corporate Event"), as a result of which the
shareholders of the Company immediately prior to such
Corporate Event shall not hold, directly or
indirectly, immediately following such Corporate
Event a majority of the Voting Power of (x) in the
case of a merger or consolidation, the surviving or
resulting corporation, (y) in the case of a share
exchange, the acquiring corporation or (z) in the
case of a division or a sale or other disposition of
assets, each surviving, resulting or acquiring
corporation which, immediately following the relevant
Corporate Event, holds more than 10% of the
consolidated assets of the Company immediately prior
to such Event.
(b) Potential Change of Control. For the purposes of this
Agreement, a Potential Change of Control shall be deemed to
have occurred if:
(i) a Person commences a tender offer (with adequate
financing) for securities representing at least 20%
of the Voting Power of the Company's securities;
(ii) the Company enters into an agreement the consummation
of which would constitute a Change of Control;
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(iii) proxies for the election of directors of the Company
are solicited by anyone other than the Company; or
(iv) any other event occurs which is deemed to be a
Potential Change of Control by the Board.
(c) Person Defined. For purposes of this Section 2, "Person"
shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act, as supplemented by Section
13(d)(3) of the Exchange Act; provided, however, that Person
shall not include (i) the Company or any subsidiary of the
Company or (ii) any employee benefit plan sponsored by the
Company or any subsidiary of the Company.
(d) Voting Power Defined. A specified percentage of "Voting
Power" of a company shall mean such number of the Voting
Securities as shall enable the holders thereof to cast such
percentage of all the votes which could be cast in an annual
election of directors (without consideration of the rights of
any class of stock other than the common stock of the company
to elect directors by a separate class vote); and "Voting
Securities" shall mean all securities of a company entitling
the holders thereof to vote in an annual election of directors
(without consideration of the rights of any class of stock
other than the common stock of the company to elect directors
by a separate class vote).
3. Employment Period. Subject to Section 6 of this Agreement, the
Company agrees to continue the Executive in its employ, and the Executive
agrees to remain in the employ of the Company, for the period (the "Employment
Period") commencing on the Effective Date and ending on the second anniversary
of the Effective Date. Notwithstanding the foregoing, if, prior to the
Effective Date, the Executive is demoted to a lower position than the position
held on the date first set forth above, the Board may declare that this
Agreement shall be without force and effect by written notice delivered to the
Executive (i) within 30 days following such demotion and (ii) prior to the
occurrence of a Potential Change of Control or a Change of Control.
4. Position and Duties. (a) No Reduction in Position. During the
Employment Period, the Executive's position (including titles), authority and
responsibilities shall be at least commensurate with those held, exercised and
assigned immediately prior to the Effective Date. It is understood that, for
purposes of this Agreement, such position, authority and responsibilities shall
not be regarded as not commensurate merely by virtue of the fact that a
successor shall have acquired all or substantially all of the business and/or
assets of the Company as contemplated by Section 12(b) of this Agreement. The
Executive's services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date.
(b) Business Time. From and after the Effective Date, the
Executive agrees to devote his full attention during normal
business hours to the business and
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affairs of the Company and to use his best efforts to perform
faithfully and efficiently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such
responsibilities, except for (i) time spent in managing his
personal, financial and legal affairs and serving on
corporate, civic or charitable boards or committees, in each
case only if and to the extent not substantially interfering
with the performance of such responsibilities, and (ii)
periods of vacation and sick leave to which he is entitled. It
is expressly understood and agreed that the Executive's
continuing to serve on any boards and committees on which he
is serving or with which he is otherwise associated
immediately preceding the Effective Date shall not be deemed
to interfere with the performance of the Executive's services
to the Company.
5. Compensation. (a) Base Salary. During the Employment Period,
the Executive shall receive a base salary at a monthly rate at least equal to
the monthly salary paid to the Executive by the Company and any of its
affiliated companies immediately prior to the Effective Date. The base salary
shall be reviewed at least once each year after the Effective Date, and may be
increased (but not decreased) at any time and from time to time by action of
the Board or any committee thereof or any individual having authority to take
such action in accordance with the Company's regular practices. The Executive's
base salary, as it may be increased from time to time, shall hereafter be
referred to as "Base Salary". Neither the Base Salary nor any increase in Base
Salary after the Effective Date shall serve to limit or reduce any other
obligation of the Company hereunder.
(b) Annual Bonus. During the Employment Period, in addition to
the Base Salary, for each fiscal year of the Company ending
during the Employment Period, the Executive shall be afforded
the opportunity to receive an annual bonus on terms and
conditions no less favorable to the Executive (taking into
account reasonable changes in the Company's goals and
objectives) than the annual bonus opportunity that had been
made available to the Executive for the fiscal year ended
immediately prior to the Effective Date (the "Annual Bonus
Opportunity"). Any amount payable in respect of the Annual
Bonus Opportunity shall be paid as soon as practicable
following the year for which the amount (or prorated portion)
is earned or awarded, unless electively deferred by the
Executive pursuant to any deferral programs or arrangements
that the Company may make available to the Executive.
(c) Long-term Incentive Compensation Programs. During the
Employment Period, the Executive shall participate in all
long-term incentive compensation programs for key executives
at a level that is commensurate with the Executive's
participation in such plans immediately prior to the Effective
Date, or, if more favorable to the Executive, at the level
made available to the Executive or other similarly situated
officers at any time thereafter.
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(d) Benefit Plans. During the Employment Period, the Executive
(and, to the extent applicable, his dependents) shall be
entitled to participate in or be covered under all pension,
retirement, deferred compensation, savings, medical, dental,
health, disability, group life, accidental death and travel
accident insurance plans and programs of the Company and its
affiliated companies at a level that is commensurate with the
Executive's participation in such plans immediately prior to
the Effective Date, or, if more favorable to the Executive, at
the level made available to the Executive or other similarly
situated officers at any time thereafter.
(e) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the
policies and procedures of the Company as in effect
immediately prior to the Effective Date. Notwithstanding the
foregoing, the Company may apply the policies and procedures
in effect after the Effective Date to the Executive, if such
policies and procedures are more favorable to the Executive
than those in effect immediately prior to the Effective Date.
(f) Vacation and Fringe Benefits. During the Employment Period,
the Executive shall be entitled to paid vacation and fringe
benefits at a level that is commensurate with the paid
vacation and fringe benefits available to the Executive
immediately prior to the Effective Date, or, if more favorable
to the Executive, at the level made available from time to
time to the Executive or other similarly situated officers at
any time thereafter.
(g) Indemnification. During and after the Employment Period, the
Company shall indemnify the Executive and hold the Executive
harmless from and against any claim, loss or cause of action
arising from or out of the Executive's performance as an
officer, director or employee of the Company or any of its
Subsidiaries or in any other capacity, including any fiduciary
capacity, in which the Executive serves at the request of the
Company to the maximum extent permitted by applicable law and
the Company's Certificate of Incorporation and By-Laws (the
"Governing Documents"), provided that in no event shall the
protection afforded to the Executive hereunder be less than
that afforded under the Governing Documents as in effect
immediately prior to the Effective Date.
(h) Office and Support Staff. The Executive shall be entitled to
an office with furnishings and other appointments, and to
secretarial and other assistance, at a level that is at least
commensurate with the foregoing provided to other similarly
situated officers.
6. Termination. (a) Death, Disability or Retirement. Subject to
the provisions of Section 1 hereof, this Agreement shall terminate
automatically upon the Executive's death, termination due to "Disability" (as
defined below) or voluntary
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retirement under any of the Company's retirement plans as in effect from time
to time. For purposes of this Agreement, Disability shall mean the Executive's
inability to perform the duties of his position, as determined in accordance
with the policies and procedures applicable with respect to the Company's
long-term disability plan, as in effect immediately prior to the Effective
Date.
(b) Voluntary Termination. Notwithstanding anything in this
Agreement to the contrary, following a Change of Control the
Executive may, upon not less than 30 days' written notice to
the Company, voluntarily terminate employment for any reason
(including early retirement under the terms of any of the
Company's retirement plans as in effect from time to time),
provided that any termination by the Executive pursuant to
Section 6(d) on account of Good Reason (as defined therein)
shall not be treated as a voluntary termination under this
Section 6(b).
(c) Cause. The Company may terminate the Executive's employment
for Cause. For purposes of this Agreement, "Cause" means (i)
the Executive's conviction or plea of nolo contendere to a
felony; (ii) an act or acts of dishonesty or gross misconduct
on the Executive's part which result or are intended to result
in material damage to the Company's business or reputation; or
(iii) repeated material violations by the Executive of his
obligations under Section 4 of this Agreement, which
violations are demonstrably willful and deliberate on the
Executive's part and which result in material damage to the
Company's business or reputation.
(d) Good Reason. Following the occurrence of a Change of Control,
the Executive may terminate his employment for Good Reason.
For purposes of this Agreement, "Good Reason" means the
occurrence of any of the following, without the express
written consent of the Executive, after the occurrence of a
Change of Control:
(i) (A) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the
Executive's position, authority or responsibilities
as contemplated by Section 4 of this Agreement, or
(B) any other material adverse change in such
position, including title, authority or
responsibilities;
(ii) any failure by the Company to comply with any of the
provisions of Section 5 of this Agreement, other than
an insubstantial or inadvertent failure remedied by
the Company promptly after receipt of notice thereof
given by the Executive;
(iii) the Company's requiring the Executive to be based at
any office or location more than 50 miles (or such
other distance as shall be set forth in the Company's
relocation policy as in effect at the Effective Time)
from that location at which he performed his services
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specified under the provisions of Section 4
immediately prior to the Change of Control, except for
travel reasonably required in the performance of the
Executive's responsibilities; or
(iv) any failure by the Company to obtain the assumption
and agreement to perform this Agreement by a
successor as contemplated by Section 12(b).
In no event shall the mere occurrence of a Change of Control, absent any
further impact on the Executive, be deemed to constitute Good Reason.
(e) Notice of Termination. Any termination by the Company for
Cause or by the Executive for Good Reason shall be
communicated by Notice of Termination to the other party
hereto given in accordance with Section 13(e). For purposes of
this Agreement, a "Notice of Termination" means a written
notice given, in the case of a termination for Cause, within
10 business days of the Company's having actual knowledge of
the events giving rise to such termination, and in the case of
a termination for Good Reason, within 180 days of the
Executive's having actual knowledge of the events giving rise
to such termination, and which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such
notice, specifies the termination date (which date shall be
not more than 15 days after the giving of such notice). The
failure by the Executive to set forth in the Notice of
Termination any fact or circumstance which contributes to a
showing of Good Reason shall not waive any right of the
Executive hereunder or preclude the Executive from asserting
such fact or circumstance in enforcing his rights hereunder.
(f) Date of Termination. For the purpose of this Agreement, the
term "Date of Termination" means (i) in the case of a
termination for which a Notice of Termination is required, the
date of receipt of such Notice of Termination or, if later,
the date specified therein, as the case may be, and (ii) in
all other cases, the actual date on which the Executive's
employment terminates during the Employment Period.
7. Obligations of the Company upon Termination. (a) Death or
disability. If the Executive's employment is terminated during the Employment
Period by reason of the Executive's death or Disability, this Agreement shall
terminate without further obligations to the Executive or the Executive's legal
representatives under this Agreement other than those obligations accrued
hereunder at the Date of Termination, and the Company shall pay to the
Executive (or his beneficiary or estate) (i) the Executive's full Base Salary
through the Date of Termination (the "Earned Salary"), (ii) any vested amounts
or benefits owing to the Executive under the Company's otherwise applicable
employee benefit plans
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and programs, including any compensation previously deferred by the Executive
(together with any accrued earnings thereon) and not yet paid by the Company
and any accrued vacation pay not yet paid by the Company (the "Accrued
Obligations"), and (iii) any other benefits payable due to the Executive's
death or Disability under the Company's plans, policies or programs (the
"Additional Benefits").
Any Earned Salary shall be paid in cash in a single lump sum as soon
as practicable, but in no event more than 30 days (or at such earlier date
required b, law), following the Date of Termination. Accrued Obligations and
Additional Benefits shall be paid in accordance with the terms of the
applicable plan, program or arrangement.
(b) Cause and Voluntary Termination. If, during the Employment
Period, the Executive's employment shall be terminated for
Cause or voluntarily terminated by the Executive (other than
on account of Good Reason following a Change of Control), the
Company shall pay the Executive (i) the Earned Salary in cash
in a single lump sum as soon as practicable, but in no event
more than 10 days, following the Date of Termination, and (ii)
the Accrued Obligations in accordance with the terms of the
applicable plan, program or arrangement.
(c) Termination by the Company other than for Cause and
Termination by the Executive for Good Reason.
(i) Lump Sum Payments. If, during the Employment Period,
the Company terminates the Executive's employment
other than for Cause, or following a Change of
Control the Executive terminates his employment for
Good Reason, the Company shall pay to the Executive
the following amounts:
(A) the Executive's Earned Salary;
(B) a cash amount (the "Severance Amount") equal
to three times the sum of
(1) the Executive's annual Base Salary;
and
(2) the average of the bonuses payable
to the Executive for the three
fiscal years of the Company ending
immediately prior to the Effective
Date;
(C) a cash amount (the "Incremental Retirement
Benefit") equal to the present value,
calculated using a discount rate equal to the
then prevailing applicable Federal rate as
determined under Section 1274(d) of the
Internal Revenue Code of 1986, as amended
(the "Code"), of the additional retirement
benefits (including, without limitation, any
pension, retiree
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life or retiree medical benefits) that would
have been payable or available to the
Executive under any employee benefit plan
qualified (a "Qualified Plan") under Section
401(a) of the Code and under any supplemental
retirement plan based on (x) the age and
service the Executive would have attained or
completed had the Executive continued in the
Company's employ until the expiration of the
Employment Period and (y) where compensation
is a relevant factor, his pensionable
compensation at the Date of Termination;
(D) the Accrued Obligations.
The Earned Salary, Severance Amount and Incremental Retirement Benefit shall be
paid in cash in a single lump sum as soon as practicable, but in no event more
than 30 days (or at such earlier date required by law), following the Date of
Termination. Accrued Obligations shall be paid in accordance with the terms of
the applicable plan, program or arrangement.
(ii) Continuation of Benefits. If, during the Employment
Period, the Company terminates the Executive's
employment other than for Cause, or following a
Change of Control the Executive terminates his
employment for Good Reason, the Executive (and, to
the extent applicable, his dependents) shall be
entitled, after the Date of Termination until the
earlier of (1) the second anniversary of the Date of
Termination (the "End Date") and (2) the date the
Executive becomes eligible for comparable benefits
under a similar plan, policy or program of a
subsequent employer, to continue participation in all
of the Company's employee and executive welfare and
fringe benefit plans (the "Benefit Plans"). To the
extent any such benefits cannot be provided under the
terms of the applicable plan, policy or program, the
Company shall provide a comparable benefit under
another plan or from the Company's general assets.
The Executive's participation in the Benefit Plans
will be on the same terms and conditions that would
have applied had the Executive continued to be
employed by the Company through the End Date.
(d) Discharge of the Company's Obligations. Except as expressly
provided in the last sentence of this Section 7(d), the
amounts payable to the Executive pursuant to this Section 7
(whether or not reduced pursuant to Section 7(e)) following
termination of his employment shall be in full and complete
satisfaction of the Executive's rights under this Agreement
and any other claims he may have in respect of his employment
by the Company or any of its Subsidiaries. Such amounts shall
constitute liquidated damages with respect to any and all such
rights and claims and, upon the Executive's
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receipt of such amounts, the Company shall be released and
discharged from any and all liability to the Executive in
connection with this Agreement or otherwise in connection with
the Executive's employment with the Company and its
Subsidiaries. Nothing in this Section 7(d) shall be construed
to release the Company from its commitment to indemnify the
Executive and hold the Executive harmless from and against any
claim, loss or cause of action arising from or out of the
Executive's performance as an officer, director or employee of
the Company or any of its Subsidiaries or in any other
capacity, including any fiduciary capacity, in which the
Executive served at the request of the Company to the maximum
extent permitted by applicable law and the Governing
Documents.
(e) Limit on Payments by the Company.
(i) Application of Section 7(e). In the event that any
amount or benefit paid or distributed to the
Executive pursuant to this Agreement, taken together
with any amounts or benefits otherwise paid or
distributed to the Executive by the Company or any
affiliated company (collectively, the "Covered
Payments"), would be an "excess parachute payment" as
defined in Section 280G of the Code and would thereby
subject the Executive to the tax (the "Excise Tax")
imposed under Section 4999 of the Code (or any
similar tax that may hereafter be imposed), the
provisions of this Section 7(e) shall apply to
determine the amounts payable to Executive pursuant
to this Agreement.
(ii) Calculation of Benefits. Immediately following
delivery of any Notice of Termination, the Company
shall notify the Executive of the aggregate present
value of all termination benefits to which he would
be entitled under this Agreement and any other plan,
program or arrangement as of the projected Date of
Termination, together with the projected maximum
payments, determined as of such projected Date of
Termination, that could be paid without the Executive
being subject to the Excise Tax.
(iii) Imposition of Payment Cap. If (x) the aggregate value
of all compensation payments or benefits to be paid
or provided to the Executive under this Agreement and
any other plan, agreement or arrangement with the
Company exceeds the amount which can be paid to the
Executive without the Executive incurring an Excise
Tax and (y) the Executive would receive a greater
net-after-tax amount (taking into account all
applicable taxes payable by the Executive, including
any Excise Tax) by applying the limitation contained
in this Section 7(e)(iii), then the amounts payable
to the Executive under this Section 7 shall be
reduced (but not
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below zero) to the maximum amount which may be paid
hereunder without the Executive becoming subject to
such an Excise Tax (such reduced payments to be
referred to as the "Payment Cap"). In the event that
Executive receives reduced payments and benefits
hereunder, Executive shall have the right to
designate which of the payments and benefits
otherwise provided for in this Agreement that he will
receive in connection with the application of the
Payment Cap.
(iv) Application of Section 280G. For purposes of
determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such
Excise Tax,
(A) such Covered Payments will be treated as
"parachute payments" within the meaning of
Section 280G of the Code, and all "parachute
payments" in excess of the "base amount" (as
defined under Section 280G(b)(3) of the Code)
shall be treated as subject to the Excise
Tax, unless, and except to the extent that,
in the good faith judgment of the Company's
independent certified public accountants
appointed prior to the Effective Date or tax
counsel selected by such Accountants (the
"Accountants"), the Company has a reasonable
basis to conclude that such Covered Payments
(in whole or in part) either do not
constitute "parachute payments" or represent
reasonable compensation for personal services
actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess
of the "base amount," or such "parachute
payments" are otherwise not subject to such
Excise Tax, and
(B) the value of any non-cash benefits or any
deferred payment or benefit shall be
determined by the Accountants in accordance
with the principles of Section 280G of the
Code.
(v) Applicable Tax Rates. For purposes of determining
whether the Executive would receive a greater
net-after-tax benefit were the amounts payable under
this Agreement reduced in accordance with Paragraph
7(e)(iii), the Executive shall be deemed to pay:
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(A) Federal income taxes at the highest
applicable marginal rate of Federal income
taxation for the calendar year in which the
first amounts are to be paid hereunder, and
(B) any applicable state and local income taxes
at the highest applicable marginal rate of
taxation for such calendar year, net of the
maximum reduction in Federal income taxes
which could be obtained from the deduction of
such state or local taxes if paid in such
year; provided, however, that the Executive
may request that such determination be made
based on his individual tax circumstances,
which shall govern such determination so long
as the Executive provides to the Accountants
such information and documents as the
Accountants shall reasonably request to
determine such individual circumstances.
(vi) Adjustments in Respect of the Payment Cap. If the
Executive receives reduced payments and benefits
under this Section 7(e) (or this Section 7(e) is
determined not to be applicable to the Executive
because the Accountants conclude that Executive is
not subject to any Excise Tax) and it is established
pursuant to a final determination of a court or an
Internal Revenue Service proceeding (a "Final
Determination") that, notwithstanding the good faith
of the Executive and the Company in applying the
terms of this Agreement, the aggregate "parachute
payments" within the meaning of Section 280G of the
Code paid to the Executive or for his benefit are in
an amount that would result in the Executive's being
subject an Excise Tax, then the amount equal to such
excess parachute payments shall be deemed for all
purposes to be a loan to the Executive made on the
date of receipt of such excess payments, which the
Executive shall have an obligation to repay to the
Company on demand, together with interest on such
amount at the applicable Federal rate (as defined in
Section 1274(d) of the Code) from the date of the
payment hereunder to the date of repayment by the
Executive. If this Section 7(e) is not applied to
reduce the Executive's entitlements under this
Section 7 because the Accountants determine that the
Executive would not receive a greater net-after-tax
benefit by applying this Section 7(e) and it is
established pursuant to a Final Determination that,
notwithstanding the good faith of the Executive and
the Company in applying the terms of this Agreement,
the Executive would have received a greater
net-after-tax benefit by subjecting his payments and
benefits hereunder to the Payment Cap, then the
aggregate "parachute payments" paid to the Executive
or for his benefit in excess of the Payment Cap shall
be deemed for all purposes a loan to the
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Executive made on the date of receipt of such excess
payments, which the Executive shall have an
obligation to repay to the Company on demand,
together with interest on such amount at the
applicable Federal rate (as defined in Section
1274(d) of the Code) from the date of the payment
hereunder to the date of repayment by the Executive.
If the Executive receives reduced payments and
benefits by reason of this Section 7(e) and it is
established pursuant to a Final Determination that
the Executive could have received a greater amount
without exceeding the Payment Cap, then the Company
shall promptly thereafter pay the Executive the
aggregate additional amount which could have been
paid without exceeding the Payment Cap, together with
interest on such amount at the applicable Federal
rate (as defined in Section 1274(d) of the Code) from
the original payment due date to the date of actual
payment by the Company.
8. Non-Exclusivity of Rights. Except as expressly provided
herein, nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any of its affiliated companies and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company or any of its affiliated companies, including
employment agreements or stock option agreements. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan
or program of the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan or
program.
9. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against the Executive or others whether by
reason of the subsequent employment of the Executive or otherwise. In the event
that the Executive shall in good faith give a Notice of Termination for Good
Reason and it shall thereafter be determined that Good Reason did not exist,
the employment of the Executive shall, unless the Company and the Executive
shall otherwise mutually agree, be deemed to have terminated, at the date of
giving such purported Notice of Termination, by mutual consent of the Company
and the Executive and, except as provided in the last preceding sentence, the
Executive shall be entitled to receive only those payments and benefits which
he would have been entitled to receive upon a voluntary termination, including
his Earned Salary and the Accrued Obligations.
10. Legal Fees and Expenses. If the Executive asserts any claim in
any contest (whether initiated by the Executive or by the Company) as to the
validity, enforceability or interpretation of any provision of this Agreement,
the Company shall pay the Executive's legal expenses (or cause such expenses to
be paid) including, without limitation, his reasonable attorneys' fees, on a
quarterly basis, upon presentation of proof of such expenses in a form
acceptable to the Company, provided that the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the 90-day United
States Treasury Xxxx rate as in effect
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from time to time, compounded annually, if the Executive shall not prevail, in
whole or in part, as to any material issue as to the validity, enforceability
or interpretation of any provision of this Agreement.
11. Confidential Information; Company Property. For and in
consideration of the salary and benefits to be provided by the Company
hereunder, including the severance arrangements set forth herein, the Executive
agrees that:
(a) Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret
or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their
respective businesses, (i) obtained by the Executive during
his employment by the Company or any of its affiliated
companies and (ii) not otherwise public knowledge (other than
by reason of an unauthorized act by the Executive). After
termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of
the Company, unless compelled pursuant to an order of a court
or other body having jurisdiction over such matter,
communicate or divulge any such information, knowledge or data
to anyone other than the Company and those designated by it.
(b) Company Property. Except as expressly provided herein,
promptly following the Executive's termination of employment,
the Executive shall return to the Company all property of the
Company and all copies thereof in the Executive's possession
or under his control.
(c) Injunctive Relief and Other Remedies with Respect to
Covenants. The Executive acknowledges and agrees that the
covenants and obligations of the Executive with respect to
confidentiality and Company property relate to special, unique
and extraordinary matters and that a violation of any of the
terms of such covenants and obligations will cause the Company
irreparable injury for which adequate remedies are not
available at law. Therefore, the Executive agrees that the
Company shall (i) be entitled to an injunction, restraining
order or such other equitable relief (without the requirement
to post bond) restraining Executive from committing any
violation of the covenants and obligations contained in this
Section 11 and (ii) have no further obligation to make any
payments to the Executive hereunder following any finding by a
court or an arbitrator that the Executive has engaged in a
material violation of the covenants and obligations contained
in this Section 11. These remedies are cumulative and are in
addition to any other rights and remedies the Company may have
at law or in equity. In no event shall an asserted violation
of the provisions of this Section 11 constitute a basis for
deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
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12. Successors. (a) This Agreement is personal to the Executive
and, without the prior written consent of the Company, shall not be assignable
by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors. The Company shall require
any successor to all or substantially all of the business
and/or assets of the Company, whether direct or indirect, by
purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory
to the Executive, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as
the Company would be required to perform if no such succession
had taken place.
13. Miscellaneous. (a) Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
applied without reference to principles of conflict of laws.
(b) Arbitration. Except to the extent provided in Section 11 (c),
any dispute or controversy arising under or in connection with
this Agreement shall be resolved by binding arbitration. The
arbitration shall be held in the city of Dallas, Texas and
except to the extent inconsistent with this Agreement, shall
be conducted in accordance with the Expedited Employment
Arbitration Rules of the American Arbitration Association then
in effect at the time of the arbitration, and otherwise in
accordance with principles which would be applied by a court
of law or equity. The arbitrator shall be acceptable to both
the Company and the Executive. If the parties cannot agree on
an acceptable arbitrator, the dispute shall be heard by a
panel of three arbitrators, one appointed by each of the
parties and the third appointed by the other two arbitrators.
(c) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties
hereto or their respective successors and legal
representatives.
(d) Entire Agreement. This Agreement (as supplemented in
accordance with Section 1(b)) constitutes the entire agreement
between the parties hereto with respect to the matters
referred to herein. No other agreement relating to the terms
of the Executive's employment by the Company, oral or
otherwise, shall be binding between the parties unless it is
in writing and signed by the party against whom enforcement is
sought. There are no promises, representations, inducements or
statements between the parties other than those that are
expressly contained herein. The Executive acknowledges that he
is entering into this Agreement of his own free will and
accord, and with no duress, that he has read this Agreement
and that he understands it and its legal consequences.
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(e) Notices. All notices and other communications hereunder shall
be in writing and shall be given by hand-delivery to the other
party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: at the home address of the
Executive noted on the records
of the Company
If to the Company: Quaker State Corporation
000 X. Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn.: Secretary
with a copy to: Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(f) Tax Withholding. The Company shall withhold from any amounts
payable under this Agreement such Federal, state or local
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(g) Severability; Reformation. In the event that one or more of
the provisions of this Agreement shall become invalid, illegal
or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
shall not be affected thereby. In the event that any of the
provisions of Section 11(a) is not enforceable in accordance
with its terms, the Executive and the Company agree that such
Section shall be reformed to make such Section enforceable in
a manner which provides the Company the maximum rights
permitted at law.
(h) Waiver. Waiver by any party hereto of any breach or default
by the other party of any of the terms of this Agreement shall
not operate as a waiver of any other breach or default,
whether similar to or different from the breach or default
waived. No waiver of any provision of this Agreement shall be
implied from any course of dealing between the parties hereto
or from any failure by either party hereto to assert its or
his rights hereunder on any occasion or series of occasions.
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(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(j) Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, and
its corporate seal to be hereunto affixed and attested by its Secretary, all as
of the day and year first above written.
QUAKER STATE CORPORATION
-----------------------------------
Xxxxxxx X. Xxxx
Title: Chairman and Chief
Executive Officer
[SEAL]
WITNESSED:
-----------------------------------
EXECUTIVE:
-----------------------------------
WITNESSED:
-----------------------------------
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