1
EXHIBIT 10.10
AGREEMENT
THIS AGREEMENT by and between Pennzoil-Quaker State Company, a Delaware
corporation (hereinafter called the "Company"), and _________________________
(hereinafter called "Employee") dated as of the __th day of ______, 1998, and to
be effective as of the Distribution Date as defined in the Agreement and Plan of
Merger, dated as of April 14, 1998, among Pennzoil Company, Pennzoil Products
Company, Downstream Merger Company and Quaker State Corporation ("Merger
Agreement");
W I T N E S S E T H:
WHEREAS, Employee has previously entered into an agreement with
Pennzoil Company, the former parent of the Company, which agreement (the "Prior
Agreement") provides certain medical and retirement benefits as additional
compensation for past and future services rendered and to be rendered by
Employee (a copy of which is attached hereto); and
WHEREAS, pursuant to the Merger Agreement, the Company will assume
certain employee benefit obligations of Pennzoil Company in connection with the
merger, and
WHEREAS, the Company desires to enter into an arrangement with the
Employee to provide certain medical and retirement benefits as additional
compensation for past and future services rendered and to be rendered by
Employee to the Company; and
WHEREAS, Employee desires to enter into an arrangement with the Company
to provide certain medical and retirement benefits as additional compensation
for past and future services rendered and to be rendered by Employee to the
Company;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter contained, the parties hereto agree as follows:
2
1. Status of Agreement: This Agreement supersedes the Prior Agreement
between Employee and Pennzoil Company and Employee waives the benefits and
contracts under the Prior Agreement in exchange for this Agreement. The
liability, if any, for benefits earned under the Prior Agreement is assumed by
the Company pursuant to the Merger Agreement, and such benefits are included
under this Agreement. No benefits will be paid to Employee (or Employee's spouse
or dependents) by Pennzoil Company under the Prior Agreement.
2. Change in Control: For purposes of this Agreement, a Change in
Control of the Company shall conclusively be deemed to have occurred (i) if the
Board of Directors of the Company determines by resolution that a change in
control which has the reasonable likelihood of depriving key employees of
benefits they otherwise would have earned, by depriving key employees of the
opportunity to fulfill applicable service and age prerequisites to benefits or
otherwise has occurred, or (ii) upon the occurrence of an event specified for
such purposes as a change in control which has the reasonable likelihood of
depriving key employees of benefits they otherwise would have earned, by
depriving key employees of the opportunity to fulfill applicable service and age
prerequisites to benefits or otherwise, by resolution of the Board of Directors
adopted not more than 60 days prior to the occurrence of such event. The
Effective Date of a Change in Control shall be (x) in the case of such a Change
in Control described as specified in clause (i) of the preceding sentence, the
date (not more than 30 days prior to the date on which the Board of Directors
makes the determination) the Board of Directors determines as the date on which
the Change in Control has occurred, or (y) in the case of such a Change in
Control determined as specified in clause (ii) of the preceding sentence, the
date of occurrence of the event specified by the Board of Directors as
constituting such Change in Control.
-2
3
3. Disability: For purposes of this Agreement, "Disability" shall have
the meaning set forth in the Company's Supplemental Long Term Disability Plan.
4. Termination of Employment:
(a) By the Company for Due Cause. If Employee is terminated by the
Company for Due Cause, he shall be entitled to no benefits under this
Agreement. The term "Due Cause" as used herein, shall mean (x) Employee has
committed a willful serious act, such as embezzlement, against the Company
intending to enrich himself at the expense of the Company or has been
convicted of a felony involving moral turpitude or (y) Employee, in
carrying out his duties hereunder, has been guilty of (i) willful, gross
neglect or (ii) willful, gross misconduct resulting in either case in
material harm to the Company; provided, in any event, Employee shall be
given written notice by a majority of the Board of Directors of the Company
that it intends to terminate Employee's employment for Due Cause under this
Paragraph 4(a), which notice shall specify the act, or acts, on the basis
of which the majority of the Board of Directors of the Company intends so
to terminate Employee's employment, and Employee shall then be given the
opportunity, within fifteen days of his receipt of such notice, to have a
meeting with the Board of Directors of the Company to discuss such act, or
acts. If the basis of such written notice is an act, or acts, other than an
act, or acts, described in clause (i), above, the employee shall be given
seven days after such meeting within which to cease, or correct, the
performance (or nonperformance) giving rise to such written notice, and
upon failure of Employee within such seven days to cease, or correct, such
performance (or nonperformance), Employee's employment by the Company shall
automatically be terminated hereunder for Due Cause.
-3-
4
(b) By Death or Disability. In the event of the Death of Employee or
Disability while employed by the Company, Employee shall be entitled to
receive supplemental retirement benefits provided in Paragraph 5 and the
additional medical benefits provided in Paragraph 6.
(c) Voluntarily By Employee. If Employee terminates his employment
voluntarily and without Good Reason and prior to the Effective Date of a
Change in Control, he shall be entitled to no benefits under this
Agreement.
(d) By Company Other Than For Due Cause. If Employee's employment with
the Company is terminated by the Company for any reason other than as
provided in Paragraph 4(a) hereof, the Company shall provide to Employee
supplemental retirement benefits provided in Paragraph 5 and the additional
medical benefits provided in Paragraph 6.
(e) By Employee For Good Reason. If the Company: (i) demotes the
Employee to a lesser position than he occupies as of the date of the
Agreement; (ii) causes a material change in the nature or scope of the
authorities, powers, functions, duties, or responsibilities attached to
Employee's position as provided in clause (i); (iii) decreases Employee's
salary below the level provided as of the date of this Agreement or if
greater the level provided at any subsequent date; or (iv) materially
reduces Employee's benefits under any employee benefit plan, program, or
arrangement of the Company (other than a change that affects all employees
similarly situated) from the level in effect upon the date of this
Agreement, then, such action (or inaction) by the Company, unless consented
to in writing by Employee, shall constitute a termination of Employee's
employment by the Company pursuant to Paragraph 4(d).
-4-
5
(f) Following Change In Control of the Company. If Employee's
employment is terminated following the Effective Date of a Change in
Control of the Company for reasons other than Death, Disability or Due
Cause, such termination shall be treated as a termination of employment by
Company pursuant to Paragraph 4(d).
(g) Effect on Agreement. Termination of employment shall not
constitute termination of this Agreement.
5. Retirement Benefits: The employee shall be entitled to supplemental
retirement benefits, payable at such time or times as benefits are received
under the Company's tax qualified defined benefit plan, determined as the excess
of (i) the benefit to which he would have been entitled if his active service
with the Company under the Company's tax qualified defined benefit plan and
excess benefit arrangement between Employee and the Company, as in effect on the
date hereof but taking into account any benefit improvements hereafter, had
continued until age 55, assuming that (x) his salary in effect on the date of
termination of employment but, if a Change in Control has occurred, not less
than his salary in effect immediately prior to a Change in Control, or if
higher, that in effect at any later date, plus in any case a 5% increase in such
salary for each 12 months following termination of employment, has continued
uninterrupted until age 55 and (y) that he received in each calendar year,
including the calendar year of termination, a bonus equal to the greater of (A)
his highest annual incentive bonus earned during the 12 months preceding
termination of employment or (B) the highest annual incentive bonus earned by
the Employee in the three-year period preceding a Change in Control over (ii)
the benefit he actually receives from such tax
-5-
6
qualified defined benefit plan and the excess benefit arrangement between
Employee and the Company.
6. Medical Benefits: The Company shall provide to Employee additional
medical benefits and medical benefits coverages following termination of
employment on terms and conditions and at benefit levels (including any required
employer contributions) no less favorable than those applicable to Employee as
of the date hereof for the period prior to his attainment of age 55 and
thereafter no less favorable than those provided as of the date hereof to
retired executives of the Company with more than 20 years of service
(disregarding any benefits provided a retired Company employee under a Deferred
Compensation Agreement). This medical benefit coverage shall include spouse and
dependent coverage both during and after the life of Employee.
7. No Offsets: The benefits provided under Paragraphs 5 and 6 hereunder
shall not be subject to an offset or reduction by reason of any benefits or
payments made by or under any other Company plan, program, practice or
arrangement or a plan, program, practice or arrangement maintained by any other
employer or otherwise, except for actual medical benefits, denominated as such,
provided by the Company.
8. Prohibition Against Assignment: The right of Employee to benefits
under this Agreement shall not be assigned, transferred, pledged or encumbered
in any way and any attempt at assignment, transfer, pledge, encumbrance or other
disposition of such benefits shall be null and void and without effect.
9. Binding Effect: This Agreement shall be binding upon and enure to
the benefit of the Company, its successors and assigns, and Employee, his heirs,
executors, administrators and legal representatives.
-6-
7
10. Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
11. Severability: The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
12. Amendment or Termination: This Agreement may be amended only by
mutual consent of the parties hereto evidenced in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement (in
multiple copies). PENNZOIL-QUAKER STATE COMPANY
------------------------------------ By
----------------------------------
Xxxxx X. Xxxx
Chairman of the Board
Chief Executive Officer
-7-
