EXHIBIT 10.22
RETENTION AGREEMENT
This Retention Agreement (this "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").
WITNESSETH:
WHEREAS, Employee is currently employed by the Company as President
and Chief Executive Officer of the Company; and
WHEREAS, the Board of Directors of the Company has determined that it
would be in the best interests of the Company to provide for certain benefits
for the Employee to encourage Employee's continued employment with the Company;
and
WHEREAS, the Company and Employee desire to set forth in this
Agreement the obligations of the Company upon certain termination events of
Employee's employment with the Company.
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, the Company and Employee agree as follows:
(1) Definitions. For purposes of this Agreement, the following terms shall
have the meanings provided below:
"Board of Directors" shall mean the Board of Directors of the Company.
"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 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.
"Effective Date" shall mean the date of this Agreement first written
above.
"Employment" shall mean employment with the Company.
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"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 Effective Date; or (iii) comply with the material provisions of this
Agreement and such failure is not cured by the Company within ten days
after Employee's written notice to the Company of such failure to comply.
"Termination Date" shall mean the date the Employee's Employment with
the Company is terminated.
"Waiver and Release" means the waiver and release of claims document,
in the form attached hereto as Exhibit A or such other form as may be
prescribed by the Company, in which the Employee, in exchange for the
benefits described in this Agreement, among other things, releases the
Company, its parents, subsidiaries and affiliates, and their officers,
directors, agents, servants, employees, successors, assigns and insurers,
and any and all other persons, firms, organizations and corporations from
liability and damages in any way related to the Employee's employment with
or termination of employment with the Company.
(2) Benefits. If, at any time after the Effective Date, Employee's
Employment is terminated prior to his attainment of age 65 by the Company
without Cause, by the Employee for Good Reason or due to Employee's death or
disability (as determined by the Board of Directors, in its sole discretion),
Employee shall be entitled to receive the following benefits:
(a) Long Term Incentive Programs. All outstanding awards as of the
Termination Date granted to Employee under any of the Company's long term
incentive programs shall be prorated by multiplying each such award by a
fraction, the numerator of which is the number of complete calendar months
elapsing between January 1 of the initial year of the award and the date
that is two years from Employee's Termination Date and the denominator of
which is 36. Such prorated awards shall be paid to Employee (or his estate
in the case of his death) as soon as practicable after the end of each such
award's three-year performance period based on the actual months of the
award cycle.
(b) Conditional and Restricted Stock Awards. All outstanding
Conditional and Restricted Stock Awards as of the Termination Date granted
to Employee shall be prorated by multiplying each such award by a fraction,
the numerator of which is the number of complete calendar months elapsing
between January 1 of the initial year of the award and Employee's
Termination Date and the denominator of which is 60. Such prorated awards
shall be paid to Employee (or his estate in the case of his death) as soon
as practicable after Employee's Termination Date.
(c) Stock Options. All outstanding stock options as of the Termination
Date granted to Employee under any of the Company's stock option plans
shall continue to vest during the two year period following Employee's
Termination Date or, if earlier, until the options' expiration dates, as if
Employee had remained employed by the
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Company during such two-year period. Each such option, to the extent it is
vested or becomes vested during such two-year period, shall be exercisable
until the earlier of (1) the 90th day following the end of such two-year
period or (2) the option's expiration date. Thereafter, to the extent not
exercised, each such option shall expire and be of no further force and
effect.
(3) Noncompetition and Nonsolicitation Agreements. In return for any
benefit payments under Paragraph 3 of this Agreement, Employee hereby agrees
that, during the period commencing as of the Effective Date and ending as of the
third anniversary of Employee's Termination Date, Employee will not (i) accept
employment or render service to any person that is engaged in a business
directly competitive with the business then engaged in by the Company or any of
its subsidiaries or affiliates; (ii) enter into or take part in or lend his name
as principal, director, officer, executive, independent contractor, partner or
advisor, or accept employment for any purpose that would be competitive with the
business of the Company or any of its affiliates (all of the foregoing
activities are collectively referred to as the "Prohibited Activity"); or (iii)
directly or indirectly, on behalf of Employee or any other person, solicit for
employment or employ any person who, at any time during the six-month period
preceding the date of such solicitation or employment, was an employee of the
Company or any of its subsidiaries or affiliates. The foregoing notwithstanding,
if Employee violates a provision of this Paragraph 3, all benefit payments under
Paragraph 2 of this Agreement shall immediately cease.
It shall not be considered a violation of this Agreement for Employee to be
a passive investor in any enterprise that might be viewed as a competitor of the
Company.
Employee acknowledges, agrees and stipulates that: (i) the terms and
provisions of this Agreement are reasonable and constitute an otherwise
enforceable agreement to which the terms and provisions of this paragraph are
ancillary or a part of as contemplated by TEX. BUS. & COM. CODE XXX. Sections
15.50-15.52, or any successor provisions; (ii) the consideration provided by the
Company under this Agreement is not illusory; and (iii) the consideration given
by the Company under this Agreement, gives rise to the Company's interest in
restraining and prohibiting Employee from engaging in the Prohibited Activity as
provided under this Paragraph 3, and Employee's covenant not to engage in the
Prohibited Activity pursuant to this Paragraph 3 is designed to enforce
Employee's consideration (or return promises).
(4) Confidentiality Agreement. The Employee agrees to hold for the benefit
of the Company all secret or confidential information, knowledge or data
relating to the Company or any of its affiliates, and their respective
businesses, which shall have been obtained by the Employee during his employment
with the Company or any of its affiliates and which shall not be or become
public knowledge (other than acts by the Employee or his representatives in
violation of this Agreement or the other terms and conditions of the Employee's
employment with the Company). The Employee acknowledges that he has received, is
currently receiving and will receive Company confidential information and that
it is critical to the Company that such information be provided to the Employee
and held in confidence by the Employee in order to xxxxxx success of the
Company's business. The Employee agrees that he will not, without the prior
written consent of the Company or as may be otherwise required by law or legal
process, communicate or divulge any such secret or confidential information,
knowledge or data relating
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to the Company or any of its affiliates and their respective businesses to
anyone other than the Company and those designated by it.
(5) Waiver and Release. Notwithstanding any provision herein to the
contrary, the Employee hereby acknowledges and accepts that the payment or
receipt of any benefits under this Agreement shall be contingent upon, and
subject to, the Employee's timely and valid execution and return of the Waiver
and Release, and the expiration of the Waiver and Release's seven-day revocation
period without the Employee's revocation of such Waiver and Release during such
revocation period.
(6) Withholding. The Company may withhold from any benefits payable under
this Agreement all federal, state, city or other taxes and any other withholding
as may be required pursuant to any law or governmental regulation or ruling.
(7) No Employment Agreement. Nothing in this Agreement shall give Employee
any rights to (or impose any obligations for) continued Employment by the
Company or successor thereto, nor shall it give Employee any rights (or impose
any obligations) with respect to continued performance of duties by Employee.
(8) No Assignment; Successors. Employee's right to receive payments or
benefits hereunder shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, whether voluntary, involuntary, by
operation of law or otherwise, other than a transfer by will or by the laws of
descent or distribution, and in the event of any attempted assignment or
transfer contrary to this Paragraph 6, the Company shall have no liability to
pay any amount so attempted to be assigned or transferred. This Agreement shall
inure to the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
This Agreement shall be binding upon and inure to the benefit of the
Company, its successors and assigns including, without limitation, any company
into or with which the Company may merge or consolidate by operation of law or
otherwise.
(9) Entire Agreement. This Agreement represents the entire agreement
between the Company and Employee with respect to the subject matter hereof, and
supersedes and is in full substitution for any and all prior agreements or
understandings, whether oral or written, relating to the subject matter hereof.
(10) Modification of Agreement. Any modification of this Agreement shall be
binding only if evidenced in writing and signed by an authorized representative
of the Company.
(11) Applicable Law. This agreement is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas.
(12) Severability. If a court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement and all other provisions
shall remain in full force and effect.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and Employee has hereunto set his hand
as of the date first above written.
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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EXHIBIT A
WAIVER AND RELEASE
In connection with the termination of employment of the undersigned,
Xxxxx X. Xxxxx (the "Employee"), with Pennzoil-Quaker State Company (the
"Company"), the Employee is eligible for severance benefits under the Agreement
dated September , 2001 (the "Agreement").
In consideration of the Company's agreement to provide the Employee
the benefits, payments and other items described in the Agreement, some of which
are in addition to anything to which he is already entitled and the receipt and
sufficiency of which are hereby acknowledged, the Employee hereby knowingly and
voluntarily releases and forever discharges the Company and its parents,
subsidiaries and affiliates, and their officers, directors, agents, servants,
employees, successors, assigns and insurers, and any and all persons, firms,
organizations, and corporations from any and all damages, losses, causes of
action, expenses, demands, liabilities, and claims on behalf of the Employee,
the Employee's heirs, executors, administrators, and assigns with respect to all
matters relating to Company and its parents, subsidiaries and affiliates, and
the Employee hereby accepts the cash payments, benefits, and other items
described in the Agreement in full settlement of all such damages, losses,
causes of action, expenses, demands, liabilities and claims the Employee now has
or may have with respect to such matters (except the Employee shall retain all
rights to (i) coverage, if any, under directors' and officers' fiduciary errors
and omissions and other liability insurance policies of the Company that by
their terms would apply to the Employee's acts and omissions while serving the
Company, subsidiaries and affiliates, and their respective officers, directors,
agents, servants, employees and their successors and assigns, (ii) any
indemnification arrangements with the Company (including pursuant to the
Company's Bylaws) that apply to the Employee's service with the Company, its
subsidiaries and affiliates and (iii) claims arising from a breach of the
Agreement), as evidenced by the Employee's execution of this release and waiver
of claims agreement (this "Release").
This Release includes, but is not limited to, claims arising under the
Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in
Employment Act, as amended; the Older Workers' Benefit Protection Act of 1990,
as amended; the Civil Rights Act of 1866, as amended; the Civil Rights Act of
1991; the Rehabilitation Act of 1973, as amended; the Americans with
Disabilities Act of 1990; the Worker Adjustment and Retraining Notification Act
of 1988; the Pregnancy Discrimination Act of 1978; the Equal Pay Act; the
Employee Retirement Income Security Act of 1974, as amended; the Family and
Medical Leave Act of 1993; the Fair Labor Standards Act; the Occupational Health
and Safety Act; the Texas Commission on Human Rights Act; the Texas Labor Code;
and any claims for breach of contract, tort, including, but not limited to,
fraudulent inducement or misrepresentation, defamation, slander, wrongful
termination or other retaliation claims in connection with workers' compensation
claims or whistleblower status or any claim under any other state or federal
statute or regulation, in equity or at common law.
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Further, by accepting the severance payments described in the
Agreement, the Employee agrees not to xxx Company or the related persons and
entities described above. The Employee affirms and agrees that his employment
relationship has ended and waives all rights in connection with such
relationship except to vested benefits and the payments and benefits described
in this Release. The Employee acknowledges that Company has not promised him
continued employment nor represented that the Employee will be rehired in the
future. In addition, in signing this Release, the Employee expressly represents
that no promise or agreement which is not expressed in this Release has been
made to him and that the Employee is relying on his own judgment in signing this
Release and is not relying on any statement or representation of Company, its
affiliates or any of their agents. The Employee acknowledges that the Employee
is signing with full knowledge and consent which was not procured through fraud,
duress or mistake and that this Release has not had the effect of misleading or
failing to inform the Employee.
The Employee shall have twenty-one (21) days to decide whether to sign
this Release and be bound by its terms. The Employee shall have the right to
revoke or cancel this Release within seven (7) days after the Employee has
signed it. This cancellation or revocation can be accomplished by delivery of a
written notification to Company. In the event that this Release is canceled or
revoked, Company shall have no obligation to furnish the payments described in
this Release. THE EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE HAS BEEN ADVISED IN
WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS RELEASE AND HAS HAD AN
ADEQUATE OPPORTUNITY TO SEEK ADVICE OF HIS OWN CHOOSING. The Employee
acknowledges that he has read this Release, has had an opportunity to ask
questions and have it explained to him and that the Employee understands that
this Release will have the effect of knowingly and voluntarily waiving any
action the Employee might pursue, including breach of contract, personal injury,
retaliation, discrimination on the basis of race, age, gender, national origin,
or disability and any other claims arising prior to the date of this Release.
Further, Company agrees to Release the Employee from all claims arising out of
his employment with Company.
The Employee acknowledges that payment by the Company of severance
benefits under the Agreement is not an admission by Company or its officers,
directors, agents, servants, and employees, their successors, assigns, and
insurers, and their parents, subsidiaries and affiliates, that they engaged in
any wrongful or unlawful act or violated any federal or state law or regulation.
Should any of the provisions set forth in this Release be determined
to be invalid by a court, agency or other tribunal of competent jurisdiction, it
is agreed such determination shall not affect the enforceability of other
provisions of this Release.
The Employee acknowledges that this Release sets forth the entire
understanding and agreement between the Employee and Company concerning the
subject matter of this Release and supersedes any prior or contemporaneous oral
and/or written agreements or representations, if any, between the Employee and
Company.
The purpose of the arrangements described in this Release is to arrive
at a mutually agreeable and amicable basis upon which to terminate the
Employee's employment
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with Company. The Employee and Company agree to refrain from any criticisms or
disparaging comments about each other or in any way relating to the Employee's
employment with or termination of employment with the Company.
Furthermore, the Employee agrees that he has returned or will return
immediately, and will maintain in strictest confidence and not use in any way,
any proprietary, confidential, or other nonpublic information or documents
relating to the business and affairs of Company and its affiliates. For the
purposes of this Release, "proprietary, confidential or other nonpublic
information" shall mean any information concerning Company or its affiliates
which the Employee developed or learned through his employment and which is not
generally known or available outside of Company. Such information, without
limitation, includes information, written or otherwise, regarding Company's
earnings, expenses, material sources, equipment sources, customers and
prospective customers, business plans, strategies, practices and procedures,
prospective and executed contracts, maps, computer files and other business
arrangements. The Employee acknowledges and agrees that 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 Employee or any
other employee, officer, director, agent, contractor, or representative of
Company whether provided in written or printed form, or orally, all comprise
confidential and proprietary business information. The Employee understands and
agrees that in the event of any breach of this provision, or threatened breach,
by the Employee, Company may, in its discretion, discontinue any or all payments
provided for in the Agreement and recover any and all payments already made and
Company shall be entitled to apply to a court of competent jurisdiction for such
relief by way of specific performance, restraining order, injunction or
otherwise as may be appropriate to ensure compliance with this provision.
The Employee further agrees that the existence and all terms of this
Release shall be kept strictly confidential and that any disclosure to anyone
for any purpose whatsoever (save and except disclosure to the Employee's spouse,
financial advisors or institutions for financial statement purposes, attorney,
or as required by law) by the Employee or his agents, representatives, heirs,
children, spouse, employees or spokespersons shall be a breach of this Release
and Company may elect either to cease performance hereunder or enforce this
Release; provided, however, in the event Company believes a breach of
confidentiality has occurred, the Employee will be given notice and thirty (30)
days to respond.
Should the Employee be contacted or served with legal process seeking
to compel the Employee to disclose any such information, the Employee agrees to
notify Company's General Counsel immediately, in order that Company may seek to
resist such process if it so chooses. If the Employee is called upon to serve as
a witness or consultant in or with respect to any potential litigation,
litigation, or regulatory proceeding, the Employee agrees to cooperate with
Company to the full extent permitted by law, and Company agrees that any such
call shall be with reasonable notice, shall not unnecessarily interfere with the
Employee's later employment, and shall provide for payment for the Employee's
time and costs expended in such matters.
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This Release shall be governed by and construed in accordance with the
laws of the State of Texas, and where applicable, the laws of the United States.
----------------------------------- ------------------------------------
Xxxxx X. Xxxxx Company Representative
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Date Signed Date Signed
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