EXHIBIT 10.2(d)
2001 INCENTIVE PLAN OF PENNZOIL-QUAKER STATE COMPANY
NONQUALIFIED STOCK OPTION AGREEMENT
PENNZOIL-QUAKER STATE COMPANY (the "Company") hereby grants on
____________, to ________________________________ (the "Optionee"), an employee
of the Company or one of its subsidiaries, the Nonqualified Option to purchase
from the Company up to, but not exceeding in the aggregate, _______________
shares of common stock, $0.10 par value per share, of the Company ("Stock") at
$___________ per share, such number of shares and such price per share being
subject to adjustment as provided in Section 15 of the 2001 Incentive Plan of
Pennzoil-Quaker State Company, as amended from time to time (the "Plan"), and
further subject to the following terms and conditions:
1. This Option is issued in accordance with and subject to all
of the terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by the Compensation
Committee (the "Committee") and are in effect on the date hereof. Except as
otherwise defined herein, capitalized terms shall have the same meanings
ascribed to them under the Plan.
2. (a) This Option shall not be exercisable until after 12
months of continued employment with the Company or any parent or
subsidiary of the Company immediately following the date this Option is
granted, and thereafter shall be exercisable as follows:
(i) After 12 months of such continued employment,
this Option shall be exercisable for any number of shares up
to and including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(ii) After two years of such continued employment,
this Option shall be exercisable for any number of shares up
to and including, but not in excess of, 66-2/3% of the
aggregate number of shares subject to this Option; and
(iii) After three years of continued employment, this
Option shall be fully exercisable;
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provided that the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of shares
theretofore purchased pursuant to the terms hereof.
(b) Notwithstanding the provisions of subparagraph
(a) of this paragraph 2, this Option may be exercised to the extent
then unexercised, irrespective of the 12-month, 33-1/3% and 66-2/3%
limitations set forth in subparagraph (a) above, in the event of:
(i) Death of the Optionee while in the employment of
the Company or any parent or subsidiary of the Company;
(ii) Termination of employment of the Optionee by
reason of total and permanent disability, as determined by the
Committee ("Disability"); or
(iii) Termination of the Optionee's employment by
retirement on or after age 55 under or in accordance with the
retirement plan of the Company or any parent or subsidiary of
the Company in which he/she is then participating after
completion, as of the date of such retirement, of not less
than five years of employment with the Company or any parent
or subsidiary of the Company ("Retirement") or termination of
employment for such other reasons as may be approved in
writing by the Committee; provided, however, that this Option
shall not be exercisable for a period of six months
immediately following the date this Option is granted,
notwithstanding any such earlier retirement.
(c) In the event of termination of employment for any
reason other than specified above in subparagraph (b) of this paragraph
2, this Option may be exercised during the remainder of its term only
with respect to the number of shares exercisable at the date of such
termination.
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3. The Option hereby granted shall terminate and be of no
force and effect with respect to any shares of Stock not previously acquired by
exercise by the Optionee upon the first to occur of:
(i) the expiration of ten years from the date of the grant of
this Option; or
(ii) the expiration of 90 days after the termination of
employment of the Optionee with the Company and any parent or
subsidiary of the Company for reasons other than death, Disability or
Retirement; provided, however, that if death of the Optionee occurs
within 90 days of termination of employment, this clause (ii) shall be
inapplicable; or
(iii) the expiration of three years after the termination of
employment of the Optionee with the Company and any parent or
subsidiary of the Company for reason of Retirement; provided, however,
that if death of the Optionee occurs within 90 days of termination of
employment, this clause (iii) shall be inapplicable.
This Option shall not be assignable or otherwise transferable
except by will or the laws of descent and distribution.
4. The Optionee shall have the right to relinquish, subject to
Committee approval, any then exercisable portion of the Option hereby granted
for shares of Stock upon the following terms and conditions:
(a) The Optionee, his/her heirs or other legal
representatives, to the extent entitled to exercise the Option under
the terms hereof, in lieu of purchasing the entire number of shares
subject to purchase hereunder, shall have the right to relinquish all
or any part of the unexercised portion of the Option (to the extent
exercisable as provided in subparagraph (d) below) for a number of
shares of the Stock of the Company and an amount of cash to be
determined as follows:
(i) The written notice of exercise of such right of
relinquishment, provided for in subparagraph (b) below, shall
state the percentage, if any, of the Appreciated Value,
hereinafter defined, which such holder elects to receive in
cash (which percentage is called the "Cash Percentage"), such
Cash Percentage to
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be in increments of ten percent (10%) of such Appreciated
Value up to (but not to exceed) fifty percent (50%) thereof;
(ii) The number of shares of Stock of the Company
issuable pursuant to such relinquishment shall be the number
of such shares, rounded to the next greater number of full
shares, as shall be equal to: one hundred percent (100%) less
the Cash Percentage, times the excess of (1) the aggregate
current market value of the shares of such Stock covered by
this Option or the portion thereof so relinquished over (2)
the aggregate purchase price for such shares specified above
(which excess is called the "Appreciated Value"), divided by
the then-current market value per share of such Stock; and
(iii) The amount of cash payable pursuant to such
relinquishment shall be an amount equal to the Appreciated
Value less the aggregate current market value of the issued
shares, which cash shall be paid by the Company subject to
such conditions as are deemed advisable by the Committee to
permit compliance by the Company with the withholding
provisions applicable to employers, including withholding
under the Code and applicable State law. If no cash payment is
to be made, or if the required tax withholding exceeds the
amount of the cash payment to be made, the amount of any such
required tax not so withheld from a cash payment must be
delivered by the Optionee to the Company with the notice
provided for in subparagraph (b), or the Optionee must make
other arrangements satisfactory to the Company for payment of
such withholding tax.
(b) Such right of relinquishment may be exercised
only upon receipt by the Company (at the address provided in
subparagraph (g) below) of a written notice of such relinquishment,
which shall be dated the date of election to make such relinquishment.
For purposes of the Plan, such date of election shall be deemed to be
the date when such notice is sent by registered or certified United
States mail (postage prepaid), if by mail, or when receipt is
acknowledged by the Company, if mailed by other than registered or
certified United States mail (postage prepaid), or if delivered by hand
or by any telegraphic communications equipment of the sender or
otherwise delivered.
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Nothing contained in this subparagraph (b) shall limit the discretion
of the Committee to disapprove any election by the Optionee to exercise
a right of relinquishment.
(c) For purposes of this paragraph 4, the "current
market value" of a share of the Stock of the Company shall be its Fair
Market Value on the day on which written notice of relinquishment is
received by the Company.
(d) The Option hereby granted, or any portion
thereof, may be relinquished only to the extent that (i) it is
exercisable on the date written notice of relinquishment is received by
the Company and (ii) the Committee, subject to the provisions of
subparagraph (e) below, shall consent to the election of the Optionee
to relinquish the Option as set forth in such written notice of
relinquishment.
(e) The Committee shall have sole discretion to
consent to or disapprove any election by the Optionee or his/her heirs
or other legal representatives to relinquish such Option for Stock of
the Company and cash as provided in subparagraph (a) above. Neither the
Committee nor the Company shall be under any liability to any person by
reason of the Committee's disapproval of any election pursuant to this
paragraph 4.
(f) Neither this Option nor any right to relinquish
the same to the Company as contemplated by subparagraph (a) above,
shall be assignable or otherwise transferable except by will or the
laws of descent and distribution.
(g) Subject to the limitations set forth elsewhere
herein, the right of relinquishment granted hereby may be exercised by
written notice delivered by the holder to PENNZOIL-QUAKER STATE
COMPANY, PENNZOIL PLACE, P. O. BOX 2967, HOUSTON, TEXAS 77252-2967,
which notice shall state the number of shares of Stock purchasable for
cash under the Option or the portion thereof being relinquished by such
holder in consideration of shares of Stock pursuant to the terms hereof
together with any Cash Percentage elected by such holder.
(h) Upon relinquishment of the Option or any portion
thereof for shares of Stock as provided herein, this Option or the
portion hereof so relinquished shall
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thereupon terminate and be of no further force or effect, and the
Company shall have no further obligation to issue and deliver shares of
its Stock pursuant hereto.
(i) The obligation of the Company to issue and
deliver shares pursuant to the relinquishment of this Option shall be
subject to all applicable laws, rules and regulations and to such
filings with or approvals by any governmental agencies or national
securities exchanges as may be required and the Optionee agrees that
he/she will not exercise the right of relinquishment granted hereby,
and that the Company will have no obligation hereunder to effect such
relinquishment, if the exercise of such right or the consummation of
such relinquishment would constitute a violation by the Optionee or the
Company of any applicable law or regulation.
(j) Notwithstanding any provision of this paragraph 4
to the contrary, this Option shall terminate and be of no force or
effect after the date specified by paragraph 3 hereof.
(k) Rights of relinquishment may not be exercised
unless the Appreciated Value exceeds zero.
5. Subject to the limitations set forth herein and in the
Plan, this Option may be exercised by written notice delivered (i) by registered
or certified United States mail (postage prepaid), which shall be effective as
of the date mailed, or (ii) by hand or by any telegraphic communications
equipment of the sender, which shall be effective as of the date receipt is
acknowledged by the Company, to PENNZOIL-QUAKER STATE COMPANY, PENNZOIL PLACE,
P. O. BOX 2967, HOUSTON, TEXAS 77252-2967, or by any other procedure that may be
established and approved by the Committee. In addition to any information
required by paragraph 4 to exercise a right of relinquishment hereunder, such
written notice shall (1) state the number of shares with respect to which the
Option is being exercised, and (2) be accompanied by a check, cash or money
order payable to PENNZOIL-QUAKER STATE COMPANY in the full amount of the
purchase price for any shares being acquired other than pursuant to a right of
relinquishment or, at the option of the Optionee, accompanied by Stock
theretofore owned by such Optionee equal in value to the full amount of the
purchase price (or any combination of cash, check or such Stock). For purposes
of determining the amount, if any, of the purchase price satisfied by payment in
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Stock, such Stock shall be valued at its Fair Market Value on the date of
exercise. Any Stock delivered in satisfaction of all or a portion of the
purchase price shall be appropriately endorsed for transfer and assignment to
the Company. In addition, whether or not the options and shares covered by the
Plan have been registered pursuant to the Securities Act of 1933, the Company
may at its election require the Optionee to give a representation in writing
that he/she is acquiring such shares for his/her own account for investment and
not with a view to, or for sale in connection with, the distribution of any part
thereof.
If any law or regulation requires the Company to take any
action with respect to the shares specified in such notice, the time for
delivery thereof, which would otherwise be as promptly as possible, shall be
postponed for the period of time necessary to take such action.
6. (a) The Optionee agrees that, at any time prior to the
exercise of the Option and for a period of 12 months after the later of
(i) the last date the Optionee exercises all or a portion of this
Option or exercises all or a portion of the rights of relinquishment
under the Option or (ii) termination of the Optionee's employment with
the Company or any parent or subsidiary of the Company for any reason,
including, but not limited to, by reason of Disability or Retirement,
the Optionee shall not engage in any of the following activities
(collectively, "Prohibited Activities") anywhere in the United States
of America:
(i) Optionee shall not, directly or indirectly, (A)
accept any employment, assignment, position or responsibility
or provide any services or (B) acquire any ownership interest,
that involves the Optionee's Participation (as defined in
subparagraph (c) herein) in an entity's business that is
related to automotive and marine consumer products and
services, including: (1) motor oils, transmission fluids, gear
lubricants and greases and specialty lubricants; (2)
carburetor and fuel injector cleaners; (3) automotive filters,
including oil filters, transmission fluid filters and air
filters; (4) oil and fuel additives and treatments; (5) fast
lubrication, fluid maintenance and automotive preventative
maintenance services; (6) tire treatments, inflators and
sealants; (7) automotive appearance and accessory products,
including polishes and waxes, car wash products and cleaners,
window shades, sun blockers, car covers, seat and steering
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wheel covers, floormats, glass treatments and other automotive
accessories; (8) air fresheners; and (9) any product, service,
person, firm, corporation, or event if, in the reasonable
opinion of the Committee, association therewith competes with
the Company (collectively, "Competitive Activity"), unless
such Competitive Activity is not in any way, as determined by
the Committee, competing with the Company or its parent or any
of its subsidiaries or affiliates (collectively, the Company
for purposes of this subparagraph (a)).
(ii) Optionee shall not in any way, directly or
indirectly, including, but not limited to, through another
person or entity acting on the Optionee's recommendation,
suggestion, identification or advice, solicit any employee of
the Company to leave the Company's employment or accept any
position with any other entity.
(iii) Optionee shall not use or disclose to anyone
any Confidential Information (as defined in subparagraph (c)
herein) regarding the Company other than as necessary in the
Optionee's position with the Company.
(iv) Optionee shall not engage in any acts which are
considered to be contrary to the best interests of the
Company, including, but not limited to, violating any of the
Company's employment and other policies and practices,
engaging in the unlawful trading in the securities of the
Company or of any other company based on information gained as
a result of the Optionee's employment with the Company or
engaging in any other activity that constitutes gross
misconduct.
(b) In the event the Committee determines, in its
sole discretion, that the Optionee has engaged in any Prohibited
Activity, in addition to any other remedies the Company may have
available to it, the Company may, in its sole discretion:
(i) cancel the unexercised portion of the Option; and
(ii) require the Optionee to pay to the Company any
and all gains realized from the exercise of any portion of the
Option within the 12-month
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period immediately preceding the date the Optionee engaged in
such Prohibited Activities, as determined by the Committee, in
its sole discretion.
(c) As used in this paragraph 6, the following terms
shall have the meanings set forth below:
(i) "Confidential Information" shall mean
proprietary, confidential or other non-public information or
documents related to the business and affairs of the Company
and its worldwide business, whether or not in writing,
including, but not limited to, information regarding the
Company's earnings, costs, profits, expenses, material
sources, equipment sources, existing and prospective
customers, business plans, strategies, practices and
procedures, prospective and executed contracts, maps, computer
files, business arrangements, possible acquisitions or
divestitures, potential new products or markets, personnel,
know-how, formulae, processes, equipment, discoveries,
inventions, research, technical or scientific information and
other data and interpretations that are not accessible to the
public, none of which is part of general knowledge of the
industry. Moreover, all records, papers, reports, computer
programs, strategies, documents (including, without
limitation, memoranda, notes, files and correspondence),
opinions, evaluations, inventions, ideas, technical data,
products, services, processes, procedures, and interpretations
that are, or have been, produced by the Optionee or any other
employee, officer, director, agent, contractor, or
representative of the Company, whether or not in writing, all
shall comprise Confidential Information.
(ii) "Participation" shall be construed broadly to
include, without limitation: (A) serving as a director,
officer, executive, principal, employee, advisor, consultant
or contractor with respect to such a business entity; (B)
providing input, advice, guidance or suggestions to such a
business entity; or (C) providing a recommendation or
testimonial on behalf of such a business entity or one or more
products it transports, markets, sells, distributes, or
produces.
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7. The Optionee's rights under the Plan and this Nonqualified
Stock Option Agreement are personal and this Option is exercisable during the
Optionee's lifetime only by the Optionee. No assignment or transfer of the
Optionee's rights under and interest in this Option may be made by the Optionee
otherwise than by will or by the laws of descent and distribution.
8. In any judicial action or proceedings between the parties
to enforce any of the provisions of this Agreement, to seek damages on account
of the breach hereof, to seek a judicial determination of the rights or
obligations of any party hereto or in which this Agreement is raised as a
defense, regardless or whether the action or proceeding is prosecuted to
judgment and in addition to any other remedy, the unsuccessful party shall pay
the successful party all costs and expenses, including reasonable attorneys'
fees, incurred therein by the successful party.
9. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it determines is required in
connection with this Option or rights of relinquishment granted under the Plan.
However, the Optionee may pay all or any portion of the taxes required to be
withheld by the Company or paid by the Optionee in connection with the exercise
of all or any portion of this Option (including an exercise through
relinquishment) by electing to have the Company withhold shares of Stock, or by
delivering previously owned shares of Stock, having a Fair Market Value equal to
the amount required to be withheld or paid.
Dated: PENNZOIL-QUAKER STATE COMPANY
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This Option has been accepted as of
the above date by the undersigned,
subject to the terms and provisions
of the Plan and administrative
interpretations thereof referred to
above.
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Optionee
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