Exhibit 10.05
This Restricted Unit Agreement (the
“Agreement”) dated October 21, 2004 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
138,350 “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: 46,117 on October 21,
2005; 46,117 on October 21, 2006; and 46,116 on
October 21, 2007 (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) (hereafter, as applicable, 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. |
| 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: |
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(a) |
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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; |
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(b) |
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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; |
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(c) |
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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; |
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(d) |
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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) |
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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 |
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(f) |
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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: |
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(a) |
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provide
for the acceleration of any vesting periods relating to the Restricted
Units to a date or dates determined by the Compensation Committee; |
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(b) |
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adjust
any unvested Restricted Units as the Compensation Committee deems
appropriate to reflect a Change of Control; or |
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(c) |
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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). |
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(a) |
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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. |
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(b) |
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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. |
| 13. |
Governing Law. The validity, construction, and effect of
this Agreement shall be determined in accordance with the laws of the State of
Texas. |
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VALERO ENERGY CORPORATION
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By:/s/ Xxxxx X. Xxxxx |
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Xxxxx X. Xxxxx |
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Executive Vice President and |
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Chief Administrative Officer |
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/s/ Xxxxxxx X. Xxxxxxx |
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XXXXXXX X. XXXXXXX |
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