Exhibit 10.22
RESTRICTED UNIT AGREEMENT
This Restricted Unit Agreement (the "Agreement"), dated OCTOBER 29, 2003, is by
and between VALERO ENERGY CORPORATION, a Delaware corporation ("Valero"), and
XXXXXXX X. XXXXXXX, Chief Executive Officer of Valero ("Greehey").
1. GRANT OF RESTRICTED UNITS. Valero hereby grants to Greehey 275,000
"Restricted Units" representing the right to receive certain cash
payments from Valero on the Vesting Dates set forth below. The amount
of cash payable to Greehey on each Vesting Date will be equal to the
product of: (a) the number of Restricted Units vesting on that date,
multiplied by (b) the fair market value on that date of one share of
Valero common stock, $.01 par value ("Common Stock"). For purposes of
this Agreement, "fair market value" means the average of the "high" and
"low" reported sales price per share of Common Stock as reported on the
New York Stock Exchange as of the relevant measuring date, or if there
are no sales on the NYSE on that measuring date, then as of the next
following day on which there were sales.
2. DIVIDEND RIGHTS. In addition to the right to receive cash on each
Vesting Date as described in Section 1 above, Greehey will be entitled
to receive periodic cash payments in relation to dividends that are
paid on Valero's common stock (the "Dividend Rights"). For purposes of
the settlement of Greehey's Dividend Rights under this Agreement,
Greehey will be deemed to be a holder of one share of Valero Common
Stock for each unvested Restricted Unit held by Greehey. As and when
dividends are declared on Valero's Common Stock, in settlement of the
Dividend Rights granted hereunder Greehey will be entitled to receive a
cash payment equal to the product of: (a) the declared dividend per
share on Valero's Common Stock, multiplied by (b) the number of
unvested Restricted Units held by Greehey on the dividend record date.
3. VESTING. The Restricted Units will vest in the following increments on
the following dates: 91,667 on OCTOBER 29, 2004; 91,667 on OCTOBER 29,
2005; and 91,666 on OCTOBER 29, 2006 (each a "Vesting Date").
4. TERMINATION OF EMPLOYMENT. If Greehey's employment with Valero is
terminated by Greehey (whether through retirement, death, disability or
otherwise), or is terminated by Valero without "cause" (as defined per
the Employment Agreement then in effect between Valero and Greehey, or
if none, then the Employment Agreement presently in effect on the date
hereof, as amended) (as applicable, hereafter the "Employment
Agreement"), then any Restricted Units that have not vested as of the
date of termination of Greehey's employment shall not be forfeited and
shall continue to vest in accordance with the vesting schedule set
forth in Section 3 above. If, however, Greehey's employment is
terminated by Valero for "cause" (as defined per the Employment
Agreement), then those Restricted Units that have not yet vested on the
date of termination of Greehey's employment shall be forfeited as of
that date and Greehey shall not be entitled to Dividend Rights or any
other payments with respect thereto.
5. WITHHOLDING. Valero is hereby authorized to withhold from any
settlement of the Restricted Units or Dividend Rights the amount of any
applicable withholding taxes with respect to such settlement, and to
take any other action necessary to satisfy all obligations for the
payment of the taxes.
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6. REORGANIZATION EVENT. In the event of any stock dividend, rights
distribution, split-up, recapitalization, share exchange, merger,
consolidation, stock acquisition, spin-off, separation, reorganization,
liquidation or other similar event (any one of which being hereafter
referred to as a "Reorganization Event"), as a result of which (i)
shares or other securities of any class or rights shall be issued in
respect of outstanding shares of Common Stock, or (ii) shares of Common
Stock shall be changed into the same or a different number of shares of
the same or another class or classes or other securities, then the
Restricted Units granted under this Agreement shall be affected as
follows. Upon the closing of the Reorganization Event, each unvested
Restricted Unit shall be treated as one share of Common Stock for
purposes of determining the number of unvested Restricted Units owned
by Greehey immediately following the Reorganization Event.
7. CHANGE OF CONTROL. Defined. A "Change of Control" shall be deemed to
occur when:
(a) the stockholders of Valero approve any agreement or
transaction pursuant to which: (i) Valero will merge or
consolidate with any other entity (other than a wholly owned
subsidiary of Valero) and will not be the surviving entity (or
in which Valero survives only as the subsidiary of another
entity); (ii) Valero will sell all or substantially all of its
assets to any other person or entity (other than a wholly
owned subsidiary of Valero); or (iii) Valero will be
liquidated or dissolved;
(b) any "person" or "group" (as these terms are used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934) other
than Valero, any subsidiary of Valero, any employee benefit
plan of Valero or its subsidiaries, or any entity holding
shares of Common Stock for or pursuant to the terms of such
employee benefit plans, is or becomes an "Acquiring Person" as
defined in the Rights Agreement dated June 18, 1997 between
Valero and Computershare Investor Services, L.L.C., as
successor Rights Agent to Xxxxxx Trust and Savings Bank, as
amended (or any successor Rights Agreement), or, if no Rights
Agreement is then in effect, such person or group acquires or
holds such number of shares as, under the terms and conditions
of the most recent such Rights Agreement to be in force and
effect, would have caused such person or group to be an
"Acquiring Person" thereunder;
(c) any "person" or "group" shall commence a tender offer or
exchange offer for 15% or more of the shares of Common Stock
then outstanding, or for any number or amount of shares of
Common Stock which, if the tender or exchange offer were to be
fully subscribed and all shares of Common Stock for which the
tender or exchange offer is made were to be purchased or
exchanged pursuant to the offer, would result in the acquiring
person or group directly or indirectly beneficially owning 50%
or more of the shares of Common Stock then outstanding;
(d) individuals who, as of any date, constitute Valero's Board of
Directors (the "Incumbent Board") thereafter cease for any
reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a
director whose election, or nomination for election by
Valero's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or
on behalf of a person or group other than the Board of
Directors;
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(e) the occurrence of the Distribution Date (as defined in the
Rights Agreement dated June 18, 1997 between Valero and
Computershare Investor Services, L.L.C., as successor Rights
Agent to Xxxxxx Trust and Savings Bank, as amended); or
(f) any other event determined by Valero's Board of Directors or
the Compensation Committee thereof to constitute a "Change of
Control" hereunder.
8. ACTIONS OF COMPENSATION COMMITTEE. The Compensation Committee, as
constituted before a Change of Control, is hereby authorized, and has
sole discretion to take any one or more of the following actions,
whether in connection with a Change of Control or otherwise:
(a) provide for the acceleration of any vesting periods relating
to the Restricted Units to a date or dates determined by the
Compensation Committee;
(b) adjust any unvested Restricted Units as the Compensation
Committee deems appropriate to reflect a Change of Control; or
(c) cause any unvested Restricted Units to be assumed, or new
rights substituted therefor, by the acquiring or surviving
corporation after a Change of Control. The Compensation
Committee may in its discretion include other provisions and
limitations in any amended Restricted Unit Agreement as it may
deem equitable and in the best interests of Valero.
9. RIGHTS AS STOCKHOLDER. Except for the Dividend Rights described above,
neither Greehey nor any person claiming by, through or under Greehey
with respect to the Restricted Units shall have any rights as a
stockholder of Valero (including, without limitation, voting rights).
10. ASSIGNMENT.
(a) This Agreement and Greehey's interest in the Restricted Units
and Dividend Rights granted by this Agreement are of a
personal nature, and, except as expressly provided below,
Greehey's rights with respect thereto may not be sold,
mortgaged, pledged, assigned, transferred, conveyed or
disposed of in any manner by Greehey. Any such attempted sale,
mortgage, pledge, assignment, transfer, conveyance or
disposition shall be void, and Valero shall not be bound
thereby.
(b) Cash payments upon settlement of the Restricted Units and
Dividend Rights may be made only to Greehey, during his
lifetime, or to his beneficiary(ies) after his death. After
Greehey's death, any cash settlements with respect to
Restricted Units or Dividend Rights will be made to Greehey's
beneficiary(ies) as designated under Greehey's Valero Energy
Corporation Beneficiary Designation Form, or if there is no
such designation, to the beneficiary(ies) designated in
Greehey's last will and testament.
11. SUCCESSORS. This Agreement shall be binding upon any successors of
Valero and upon the beneficiaries, legatees, heirs, administrators,
executors and legal representatives of Greehey.
12. NO TRUST FUND. This Agreement shall not create or be construed to
create a trust or separate fund of any kind or any fiduciary
relationship between Valero and Greehey or any other person with
respect to the Restricted Units and Dividend Rights. To the extent that
any person acquires a right to receive payments from Valero under this
Agreement, such right shall be no greater than the right of any
unsecured general creditor of Valero.
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13. GOVERNING LAW. The validity, construction, and effect of this Agreement
shall be determined in accordance with the laws of the State of Texas.
VALERO ENERGY CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Executive Vice President and
Chief Administrative Officer
/s/ Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX
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