EXHIBIT 10.20(c)
SECOND AMENDMENT TO DEFERRED
COMPENSATION AGREEMENT
THIS SECOND AMENDMENT to Deferred Compensation Agreement made this
20th day of September, 2001, by and between Pennzoil-Quaker State Company, a
Delaware corporation (the "Company"), and Xxxxx X. Xxxxx ("Employee").
RECITALS:
WHEREAS, the Company and Employee have previously entered into that
certain Deferred Compensation Agreement made the 4th day of May, 2000 ("Deferred
Compensation Agreement");
WHEREAS, the Deferred Compensation Agreement was amended by that
certain First Amendment to Deferred Compensation Agreement, dated July 13, 2000
(the "First Amendment");
WHEREAS, the Board of Directors of the Company has authorized this
Second Amendment of the Deferred Compensation Agreement and Employee agrees to
this amendment;
WHEREAS, the Company and Employee have previously entered into that
certain employment agreement, dated October 12, 1998, as amended by that certain
letter agreement entered into by the Company and Employee, dated June 28, 2001
(the "Employment Agreement");
WHEREAS, pursuant to Paragraph 26 of the Employment Agreement, the
Employment Agreement may be amended by the mutual consent of the Company and
Employee in writing; and
WHEREAS, the Company and Employee desire, intend and agree that the
terms and conditions of the Deferred Compensation Agreement, as amended by the
First Amendment and this Second Amendment, shall supercede and replace in its
entirety the benefits provided under, and the terms and conditions of, the
Employment Agreement, including, but not limited to, Paragraph 18 of the
Employment Agreement regarding the consequences of Employee's termination of
employment, and the Employment Agreement shall be terminated and of no further
force and effect.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, effective as of the date first written above,
the Company and Employee agree as follows:
1. The benefits provided Employee under the Deferred Compensation
Agreement, as amended, shall supercede and replace in their entirety the
benefits provided under, and the terms and conditions of, the Employment
Agreement, including, but not limited to, the consequences resulting from
Employee's termination of employment under Paragraph 18 of the Employment
Agreement, and the Employment Agreement shall be deemed terminated and shall
have no further force and effect.
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2. Paragraph 3 of the Deferred Compensation Agreement is hereby amended in
its entirety to read as follows:
"(3) Benefit.
(a) Monthly Deferred Compensation Benefit. If Employee's employment
with the Company is terminated (1) prior to October 12, 2003, by the
Company other than for reason of "Cause" or disability (as determined by
the Board of Directors, in its sole discretion), or by Employee for "Good
Reason" (as each of Cause and Good Reason is defined below in subparagraph
(b)); or (2) on or after October 12, 2003, for any reason other than death,
then Employee shall be entitled to monthly payments of deferred
compensation for the remainder of his life equal to the excess of:
(i) "X%" (as defined below) of the sum of (A) Employee's monthly
salary as in effect on the date of his termination of employment
and (B) one-twelfth (1/12th) of the target annual bonus for
Employee for the calendar year in which his termination of
employment occurs; over
(ii) the total of the monthly amounts payable to Employee during each
applicable month from the Retirement Plan, the U.S. Social
Security Act, the Company's Short-Term Disability Plan, the
Company's Long-Term Disability Plan, the Company's Supplemental
Disability Plan, and from any retirement plan with a former
employer (whether or not received in the form of monthly
payments).
For purposes of this paragraph (3), "X%" shall be equal to the applicable
percentage based on the age of Employee as of his termination date, as
follows:
If Employee's Age as of Then "X%" Shall
Termination Date Is: Be Equal To:
----------------------- ---------------
55 28.50%
56 32.56%
57 36.63%
58 40.70%
59 44.77%
60 48.84%
61 52.91%
62 or greater 57%
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If Employee's employment with the Company is terminated prior to
October 12, 2003 for any reason other than (x) by the Company without Cause
or (y) by Employee for Good Reason, then Employee shall not be entitled to
any benefit under this paragraph (3).
(b) Definitions. For purposes of this paragraph (3):
"Cause" shall mean any of the following: (i) Employee's material
breach of his agreements, duties or obligations under this Agreement and
Employee's failure to cure such breach within ten (10) days after the
Company's written notice to Employee of such material breach; (ii)
Employee's willful failure to carry out a material directive of the Board
of Directors and/or the Chairman of the Board of Directors; (iii)
Employee's embezzlement or conversion to his own use of any funds of the
Company or any of its subsidiaries or affiliates or any client or customer
of the Company or any of its subsidiaries or affiliates; (iv) Employee's
conversion to his own use or destruction of any property of the Company or
any of its subsidiaries or affiliates having a significant value; or (v)
Employee's material violation of any of the policies and/or procedures of
the Company as identified in any Company employee manual or handbook; and
"Good Reason" shall mean the Company's failure to (i) maintain
Employee's total compensation package at a level competitive with
comparative Company practices; (ii) maintain Employee's employment without
materially changing Employee's duties and responsibilities as they exist as
of the date first written above; or (iii) comply with the material
provisions of this Agreement and such failure is not cured by the Company
within ten (10) days after Employee's written notice to the Company of such
failure to comply."
3. Paragraph (4) of the Deferred Compensation Agreement is hereby amended
in its entirety to read as follows:
"(4) Death Prior to Termination of Employment or After Commencement of
Benefits. In the event of Employee's death on or after the date hereof,
while in the employment of the Company or after Employee's commencement of
benefits under this Agreement, his spouse shall be entitled to receive for
her lifetime a monthly spouse death benefit equal to one-half of the
benefit payable to Employee under clause (i) of paragraph (3)(a) above,
less the total of the monthly amounts payable to the spouse during each
applicable month from the Retirement Plan, the U.S. Social Security Act,
the Company's Salary Continuation Plan, as defined benefits under the
Excess Benefit Agreement between the Company and Employee, and from any
other retirement plan with a former employer (whether or not received in
the form of monthly payments) of Employee."
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IN WITNESS WHEREOF, the Company and Employee have executed this Second
Amendment to Deferred Compensation Agreement as of the date first written above.
PENNZOIL-QUAKER STATE COMPANY
By: /s/ XXXXX X. XXXX
Xxxxx X. Xxxx
Chairman of the Board
Accepted and agreed to by:
/s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
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