Exhibit 10.5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated June 1, 2002 by and
between Premcor Inc. (the "Company") and Xxxxxx X. Xxxxx (the "Executive").
WHEREAS, Executive became Executive Vice President of the Company
on March 1, 2000, and on that date Executive and the Company entered into an
employment agreement; and
WHEREAS, Executive and the Company desire to terminate such
agreement and enter into a new agreement.
NOW, THEREFORE Executive and the Company agree as follows:
1. Term of Employment. Subject to the provisions of Section 8,
Executive shall be employed by the Company for a period commencing on June 1,
2002 ("Start Date") and ending on June 1, 2005 (the "Employment Term") on the
terms and subject to the conditions set forth in this Agreement. However,
commencing on June 1, 2005 and on each June 1 thereafter (each an "Extension
Date"), the Employment Term shall be automatically extended for an additional
one-year period, unless the Company or Executive provides the other party hereto
not less than 60 days prior written notice before the next Extension Date that
the Employment Term shall not be so extended.
2. Position.
a. During the Employment Term, Executive shall serve as
the Executive Vice President, Secretary and General Counsel of the Company. In
such position, Executive shall have such duties and authority as shall be
determined from time to time by the Chief Executive Officer and/or Board of
Directors of the Company (the "Board").
b. During the Employment Term, Executive shall devote
Executive's full business time and best efforts to the performance of
Executive's duties hereunder and shall not engage in any other business,
profession or occupation for compensation or otherwise which would conflict or
interfere with the rendition of such services either directly or indirectly,
without the prior written consent of the Board; provided that nothing herein
shall preclude Executive (i) from continuing to serve on any board of directors
or trustees of any business corporation or any charitable organization and (ii)
subject to the prior written approval of the Board, which approval shall not be
unreasonably withheld, from accepting appointment to any board of directors or
trustees of any business corporation or any charitable organization; provided in
each case, and in the aggregate, that such activities do not materially conflict
or interfere with the performance of Executive's duties hereunder or conflict
with Section 9.
3. Base Salary. During the Employment Term, the Company shall pay
Executive a base salary at the annual rate of $250,000, payable in regular
installments in accordance with the Company's usual payment practices. Executive
shall be entitled to such increases in Executive's base salary, if any, as may
be determined from time to time in the sole
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discretion of the Board. Executive's annual rate of base salary, as in effect
from time to time, is hereinafter referred to as the "Base Salary."
4. Annual Bonus. With respect to each fiscal year of the Company
ending during the Employment Term, Executive shall be eligible to earn an annual
bonus award (an "Annual Bonus") if net earnings per share to common shareholders
of the Company, calculated on a fully diluted basis and according to GAAP, as
determined by the Company's outside auditors, excluding the after-tax impact of
any extraordinary or special items that the Board determines in good faith are
not appropriately includable in the Annual Bonus calculation because such items
do not accurately reflect the operating performance of the Company, such as
inventory write ups and write downs, LIFO adjustments, asset purchase or
sale-related gains or losses and acquisition-related write downs ("Adjusted
EPS"), is at least equal to $2.50. Upon achievement of an Adjusted EPS of $2.50,
the Annual Bonus shall equal fifty percent (50%) of Executive's Base Salary (the
"Base Bonus"). For each $0.01 increase in the applicable fiscal year's Adjusted
EPS above $2.50, the Annual Bonus shall be increased by an amount equal to one
percent of Executive's Base Salary, provided that in no event shall the Annual
Bonus be greater than three times Executive's Base Salary. The Annual Bonus
shall be paid to Executive within fifteen business days after the outside
auditors approve the Company's year-end earnings release. Executive's Annual
Bonus for 2002 shall be calculated based on earnings from January 1, 2002, so
long as Executive is employed hereunder as of December 31, 2002. Annual Bonuses
for subsequent full years during which Executive is employed hereunder will
reflect the full year (January 1 through December 31).
5. Equity Arrangements. During the month of January in each of
the years 2003, 2004, and 2005 Executive shall receive a grant of options to
purchase not less than 25,000 shares of Company common stock at an exercise
price per share equal to Fair Market Value (as defined in the Plan) on the date
of grant (the "Annual Options"). Subject to Executive's continued employment
with the Company, such Annual Options will vest in equal installments on each of
the first three anniversaries of the date of grant, and will become fully vested
upon the occurrence of a Change in Control of the Company. Other terms and
conditions of the Annual Options shall be as set forth herein, in the Plan and
an option agreement between the Company and Executive. If the Company should,
prior to any Annual Option grant, be involved in any merger, reorganization,
stock split or spinoff or other similar event, the number of shares subject to
the Annual Options yet to be granted, as provided above, shall be adjusted on a
pro rata basis.
6. Benefits. During the Employment Term, Executive shall be
entitled to participate in the Company's employee benefit plans (which term does
not include bonus or incentive compensation plans), other than any severance pay
plan, as in effect from time to time (collectively "Employee Benefits"), on the
same basis as those benefits are generally made available to other senior
executives of the Company. Executive shall also be a participant in the Premcor
Senior Executive Retirement Plan as approved by the Board of Directors of the
Company on April 2, 2002.
7. Business Expenses. During the Employment Term, reasonable
business expenses incurred by Executive in the performance of Executive's duties
hereunder shall be reimbursed by the Company following presentation by Executive
of proof of such expenses, as and when reasonably required by the Company.
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8. Termination. The Employment Term and Executive's employment
hereunder may be terminated by the Company at any time and for any reason or by
Executive for Good Reason. Notwithstanding any other provision of this Agreement
(other than Section 13(h)), the provisions of this Section 8 shall exclusively
govern Executive's rights upon termination of employment with the Company and
its affiliates.
a. By the Company For Cause or By Executive Resignation
Without Good Reason.
(i) If Executive's employment is terminated by the Company
for Cause, or if Executive resigns without Good Reason, Executive shall be
entitled to receive:
(A) the Base Salary through the date of termination;
(B) any Annual Bonus earned but unpaid as of the date of
termination for any previously completed fiscal year (including, if
applicable, 2002);
(C) reimbursement for any unreimbursed business expenses
properly incurred by Executive in accordance with this Agreement prior
to the date of Executive's termination;
(D) such Employee Benefits, if any, as to which Executive
may be entitled under the employee benefit plans of the Company (the
amounts described in clauses (A) through (D) hereof being referred to
as the "Accrued Rights"); and
(E) any vested benefits as provided pursuant to the Premcor
Senior Executive Retirement Plan, accrued in respect to any prior
fiscal year.
Following such termination of Executive's employment by the
Company for Cause or resignation by Executive without Good Reason, except as set
forth in this Section 8(a)(i), in the Plan and any applicable option agreement,
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.
(ii) For purposes of this Agreement, "Cause" shall mean (A)
Executive's continued failure substantially to perform Executive's duties
hereunder (other than as a result of total or partial incapacity due to physical
or mental illness) for a period of 20 days following written notice by the
Company to Executive of such failure, (B) Executive's conviction of, or plea of
nolo contendere to a crime constituting (x) a felony under the laws of the
United States or any state thereof or (y) a misdemeanor involving moral
turpitude, (C) Executive's willful malfeasance or willful misconduct in
connection with Executive's duties hereunder or any act or omission which is
injurious to the financial condition or business reputation of the Company or
any of its subsidiaries or affiliates, other than an act or omission that was
committed or omitted by Executive in the good faith belief that it was in the
best interest of the Company or (D) Executive's breach of the provisions of
Sections 9 or 10 of this Agreement.
b. Disability or Death.
(i) The Employment Term and Executive's employment hereunder
shall terminate upon Executive's death and may be terminated by the Company if
Executive becomes
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physically or mentally incapacitated and is therefore unable for a period of six
(6) consecutive months or for an aggregate of nine (9) months in any twenty-four
(24) consecutive month period to perform Executive's duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to the existence of
the Disability of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the
Agreement.
(ii) Upon termination of Executive's employment hereunder for
either Disability or death, Executive or Executive's estate (as the case may be)
shall be entitled to receive:
(A) the Accrued Rights;
(B) a pro rata portion of any Annual Bonus, if any, that
Executive would have been entitled to receive pursuant to Section 4
hereof in such year based upon the percentage of the fiscal year that
shall have elapsed through the date of Executive's termination of
employment, payable when such Annual Bonus would have otherwise been
payable had Executive's employment not terminated; and
(C) any vested benefits as provided in the Premcor Senior
Executive Retirement Plan, accrued to the date of termination of
employment.
Following Executive's termination of employment due to death or
Disability, except as set forth in this Section 8(b)(ii), in the Plan and any
applicable option agreement, Executive shall have no further rights to any
compensation or any other benefits under this Agreement.
c. By the Company Without Cause or Resignation by
Executive for Good Reason.
(i) If Executive's employment is terminated by the Company
without Cause (other than by reason of death or Disability) or if Executive
resigns for Good Reason, Executive shall be entitled to receive:
(A) the Accrued Rights;
(B) subject to Executive's continued compliance with the
provisions of Sections 9 and 10, payment, within 60 days of the date
of termination of Executive's employment, of a lump sum equal to three
times the sum of Executive's Base Salary and Base Bonus, provided,
however, that such amount shall in no case be less than One Million
Two Hundred Thousand Dollars ($1,200,000) or if such termination shall
occur after or in connection with a change-in-control of the Company,
not less than One Million Eight Hundred Thousand Dollars ($1,800,000);
and
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(C) the benefits as provided in the Premcor Senior Executive
Retirement Plan, whether or not previously vested.
Following Executive's termination of employment by the Company
without Cause (other than by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as set forth in this Section
8(c)(i), in the Plan and any applicable option agreement, Executive shall have
no further rights to any compensation or any other benefits under this
Agreement.
(ii) For purposes of this Agreement, "Good Reason" shall mean,
without Executive's consent, (A) the failure of the Company to pay or cause to
be paid Executive's Base Salary or Annual Bonus, when due hereunder, (B) any
substantial and sustained diminution in Executive's authority or
responsibilities from those described in Section 2 hereof or (C) relocation of
Executive's principal place of business by more than 30 miles, provided that
relocation to St. Louis, MO or Greenwich, CT shall not constitute Good Reason;
provided that the events described in clauses (A), (B) and (C) of this Section
8(c)(ii) shall constitute Good Reason only if the Company fails to cure such
event within 20 days after receipt from Executive of written notice of the event
which constitutes Good Reason; provided, further, that "Good Reason" shall cease
to exist for an event on the 90th day following the later of its occurrence or
Executive's knowledge thereof, unless Executive has given the Company written
notice thereof prior to such date.
(iii) For the purposes of this Agreement, "Change-In-Control"
shall mean any transaction, the result of which is that any Person (an
"Acquiring Person") other than (i) Blackstone (defined below) or (ii) any
Person, a majority of whose voting equity is owned by Blackstone, becomes the
beneficial owner, directly or indirectly, of shares of stock of the Company
entitling such Acquiring Person to exercise 50% or more of the total voting
power of all classes of stock of the Company entitled to vote in elections of
directors. For purposes hereof, "Blackstone" shall mean, collectively, The
Blackstone Group, Blackstone Capital Partners III Merchant Banking Fund L.P.,
and their affiliates (other than the Company and its subsidiaries) and "Person"
shall mean a "person" as such term is used for purposes of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended.
d. Expiration of Employment Term.
(i) Election Not to Extend the Employment Term. In the event
either party elects not to extend the Employment Term pursuant to Section 1,
unless Executive's employment is earlier terminated pursuant to paragraphs (a),
(b) or (c) of this Section 8, Executive's termination of employment hereunder
(whether or not Executive continues as an employee of the Company thereafter)
shall be deemed to occur on the close of business on the day immediately
preceding the next scheduled Extension Date. If Executive provides the Company
notice of non-extension of the Employment Term pursuant to Section 1, Executive
shall be entitled to receive the Accrued Rights. If the Company provides
Executive notice of non-extension of the Employment Term pursuant to Section 1,
Executive shall be entitled to receive the benefits provided in Sections
8(c)(i)(A) - (C), above.
Following such termination of Executive's employment hereunder as
a result either party's election not to extend the Employment Term, except as
set forth in this Section
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8(d)(i), Executive shall have no further rights to any compensation or any other
benefits under this Agreement.
e. Notice of Termination. Any purported termination of
employment by the Company or by Executive (other than due to Executive's death)
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 13(g) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.
f. Board/Committee Resignation. Upon termination of
Executive's employment for any reason, Executive agrees to resign, as of the
date of such termination and to the extent applicable, from the Board (and any
committees thereof) and the Board of Directors (and any committees thereof) of
any of the Company's affiliates.
9. Non-Solicitation; Non-Competition.
a. Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its affiliates and
accordingly agrees as follows:
(1) While Executive is employed by the Company and for
six months following the date Executive ceases to be employed by the Company
(the "Restricted Period"), Executive shall not, whether on Executive's own
behalf or on behalf of or in conjunction with any person, company, business
entity or other organization whatsoever, directly or indirectly
(i) solicit, or assist in soliciting, in competition with
the Company, the potential acquisition of refining
assets in the United States;
(ii) solicit or encourage any employee of the Company or
its affiliates to leave the employment of the Company
or its affiliates;
(iii) hire any such person who was employed by the Company
or its affiliates as of the date of Executive's
termination of employment with the Company or whose
employment with the Company terminated within six
months prior to the date of such hire (other than any
such person whose employment was terminated by the
Company without cause); or
(iv) solicit or encourage to cease to work with the
Company or its affiliates any consultant then under
contract with the Company or its affiliates.
(2) While Executive is employed by the Company and,
following termination of employment by the Company for Cause or by Executive
without Good Reason, for the remainder of the Employment Term (without regard to
Executive's termination of employment), Executive shall not directly or
indirectly:
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(i) engage in the business of petroleum refining or oil
product wholesaling in the United States
(ii) engage in any other business in which the Company or
its affiliates is engaged at the time of the
termination of Executive's employment, provided such
other business is contributing more than 10% of the
Company's consolidated annual revenues or net income
at the time of the termination of Executive's
employment (any of the businesses described in the
preceding subparagraph (i) and this subparagraph (ii)
being referred to as a "Competitive Business");
(iii) enter the employ of, or render any services to, any
entity (or any division, affiliate, business unit or
segment of any entity) which engages in a Competitive
Business; provided that, notwithstanding the
foregoing, it shall not be a breach of Section
9(a)(2) for Executive to provide services to any
division, affiliate, business unit or segment of any
entity so long as (x) such division, affiliate,
business unit or segment does not itself engage in a
Competitive Business and (y) Executive does not,
directly or indirectly, provide services or advice to
any division, affiliate, business unit or segment of
the entity that does engage in a Competitive
Business;
(iv) acquire a financial interest in (other than a passive
investment acquired through a hedge fund or similar
vehicle), or otherwise become actively involved with,
any Competitive Business, directly or indirectly, as
an individual, partner, shareholder, officer,
director, principal, agent, trustee or consultant; or
(v) interfere with, or attempt to interfere with,
business relationships (whether formed before, on or
after the date of this Agreement) between the Company
or any of its affiliates and their customers, clients
or suppliers in connection with or on behalf of a
Competitive Business.
(3) Notwithstanding anything to the contrary in this
Agreement, Executive may, directly or indirectly own, solely as an investment,
securities of any person engaged in the business of the Company or its
affiliates which are publicly traded on a national or regional stock exchange or
on the over-the-counter market if Executive (i) is not a controlling person of,
or a member of a group which controls, such person and (ii) does not, directly
or indirectly, own 5% or more of any class of securities of such person.
b. It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in this Section 9
to be reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against Executive,
the provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of
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competent jurisdiction finds that any restriction contained in this Agreement is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
10. Confidentiality. Executive agrees to hold all Company
information confidential ("Confidential Information") and shall not at any time
disclose, retain, or use such Confidential Information for Executive's own
benefit or the benefit of any other person, without the written authorization of
the Board; provided that the foregoing shall not apply to the extent that
information is required to be disclosed by law. Executive agrees that upon
termination of Executive's employment with the Company for any reason, he shall
return to the Company immediately all Confidential Information and all copies
thereof or therefrom, in any way relating to the business of the Company.
11. Specific Performance. Executive acknowledges and agrees that
the Company's remedies at law for a breach or threatened breach of any of the
provisions of Section 9 or Section 10 would be inadequate and the Company would
suffer irreparable damages as a result of such breach or threatened breach. In
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to cease making any payments or providing
any benefit otherwise required by this Agreement and obtain equitable relief in
the form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available.
12. Gross-Up Payment.
a. If it shall be determined that any amount, right or
benefit paid, distributed or treated as paid or distributed by the Company or
any of its affiliates to or for Executive's benefit (other than any amounts
payable pursuant to this Section 12) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986 (the
"Code"), or any interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties,
collectively, the "Excise Tax"), then Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount equal to the amount
necessary such that after payment by Executive of all federal, state and local
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
b. All determinations required to be made under this
Section 12, including whether and when a Gross-Up Payment is required, the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by the Company's independent auditors (the
"Auditor"). The Auditor shall provide detailed supporting calculations to both
the Company and Executive within 15 business days of the receipt of notice from
Executive or the Company that there has been a Payment, or such earlier time as
is requested by the Company. All fees and expenses of the Auditor shall be paid
by the Company. Any Gross-Up Payment, as determined pursuant to this Section 12,
shall be paid by the Company to Executive (or to the Internal Revenue Service or
other applicable taxing authority on Executive's behalf) within 5 days of the
receipt of the Auditor's determination. All
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determinations made by the Auditor shall be binding upon the Company and
Executive; provided that following any payment of a Gross-Up Payment to
Executive (or to the Internal Revenue Service or other applicable taxing
authority on Executive's behalf), the Company may require Executive to xxx for a
refund of all or any portion of the Excise Taxes paid on Executive's behalf, in
which event the provisions of Section 12(c) below shall apply. As a result of
uncertainty regarding the application of Section 4999 of the Code hereunder, it
is possible that the Internal Revenue Service may assert that Excise Taxes are
due that were not included in the Auditor's calculation of the Gross-Up Payments
(an Underpayment"). In the event that the Company exhausts its remedies pursuant
to this Section 12 and Executive thereafter is required to make a payment of any
Excise Tax, the Auditor shall determine the amount of the Underpayment that has
occurred and any additional Gross-Up Payments that are due as a result thereof
shall be promptly paid by the Company to Executive (or to the Internal Revenue
Service or other applicable taxing authority on Executive's behalf).
c. Executive shall notify the Company in writing of any
claim that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no
later than 10 business days after Executive receives written notification of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. Executive shall not pay such
claim prior to the expiration of the 30 day period following the date on which
it gives such notice to the Company) (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If the Company
notifies Executive in writing prior to the expiration of such period that it
desires to contest such claim, Executive shall: (i) give the Company all
information reasonably requested by the Company relating to such claim; (ii)
take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company and ceasing all efforts to contest such
claim; (iii) cooperate with the Company in good faith in order to effectively
contest such claim; and (iv) permit the Company to participate in any proceeding
relating to such claim; provided, however, that the Company shall bear and pay
directly all reasonable costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expense. Without limiting the
foregoing provisions of this Section 12, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and xxx for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine and direct; provided, however that if the Company
directs the Executive to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free basis,
and shall indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for Executive's taxable
year with respect to which such contested amount is claimed to be due is limited
solely to such contested amount.
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Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.
d. If, after the Executive's receipt of an amount
advanced by the Company pursuant to this Section 12, the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
Executive's receipt of an amount advanced by the Company pursuant to this
Section 12, a determination is made that the Executive shall not be entitled to
any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after the Company's receipt of notice of such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
13. Miscellaneous.
a. Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to conflicts of laws principles thereof. Any suit, action or
proceeding related to this Agreement, or any judgment entered by any court
related to this Agreement, may be brought only in any court of competent
jurisdiction in the State of New York, and the parties hereby submit to the
exclusive jurisdiction of such courts. The parties (and any affiliates of the
Company or beneficiary or permitted transferee of Executive) irrevocably waive
any objections which they may now or hereafter have to the laying of venue of
any suit, action or proceeding brought in any court of competent jurisdiction in
the State of New York, and hereby irrevocably waive any claim that any such
action, suit or proceeding has been brought in an inconvenient forum.
b. Entire Agreement; Amendments. This Agreement contains
the entire understanding of the parties with respect to the matters herein
(including, without limitation, Executive's compensation, benefits and
severance). There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein. This Agreement may not be
altered, modified, or amended except by written instrument signed by the parties
hereto.
c. No Waiver. The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
d. Severability. In the event that any one or more of
the provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
e. Assignment. This Agreement shall not be assignable by
Executive. This Agreement may be assigned by the Company, with Executive's
consent, such
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consent not to be unreasonably withheld, to a person or entity that is a
successor in interest to substantially all of the business operations of the
Company. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such affiliate or successor
person or entity.
f. Successors; Binding Agreement. This Agreement shall
inure to the benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributes, devises and legatees
of the Executive.
g. Notice. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered by hand or overnight
courier or five days after it has been mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth below Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
If to the Company:
Premcor Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Executive Officer
If to Executive:
Xxxxxx X. Xxxxx
000 Xxxxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
h. Release. As a condition of receipt of the benefits
described in Section 8, Executive will be required to enter into a full and
complete release of the Company from any and all claims which Executive may then
have for whatever reason or cause in connection with Executive's employment and
the termination thereof (including, without limitation, any rights under an
employment agreement which may then be in effect), other than those obligations
specifically set out in this Agreement, the Plan, indemnification provisions in
the Company's by-laws and obligations of the Company to the extent that the
documents providing for such obligations specifically provide that the
obligations are in addition to obligations under this Agreement.
i. Disputes. Any dispute with regard to the enforcement
of this Agreement or any matter relating to the employment of Executive by the
Company including but not limited to disputes relating to claims of employment
discrimination, alleged torts or any violation of law other than the seeking of
equitable relief in accordance with applicable law under Section 11 hereof,
shall be exclusively resolved by a single experienced arbitrator licensed to
practice law in New York, selected in accordance with the American Arbitration
Association rules and procedures, at an arbitration to be conducted in New York
City pursuant to the
12
National Rules for the Resolution of Employment Disputes rules of the American
Arbitration Association ("AAA") with the arbitrator applying the substantive law
of the State of New York as provided for under Section 13(a) hereof. The AAA
shall provide the parties hereto with lists for the selection of arbitrators
composed entirely of arbitrators who are members of the National Academy of
Arbitrators and who have prior experience in the arbitration of disputes between
employers and senior executives. The determination of the arbitrator shall be
final and binding on the parties hereto and judgment therein may be entered in
any court of competent jurisdiction in accordance with Section 13(a). Each party
shall pay its own attorneys fees and disbursements and other costs of the
arbitration.
j. Executive Representation. Executive hereby represents
to the Company that the execution and delivery of this Agreement by Executive
and the Company and the performance by Executive of Executive's duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
employment agreement or other agreement or policy to which Executive is a party
or otherwise bound.
k. Cooperation. Executive shall provide his reasonable
cooperation in connection with any action or proceeding (or any appeal from any
action or proceeding) that relates to events occurring during Executive's
employment hereunder. The Company shall provide Executive with a reasonable
stipend and shall reimburse Executive for reasonable expenses incurred as a
result of Executive's cooperation with the Company. This provision shall survive
any termination of this Agreement.
l. Withholding Taxes. The Company may withhold from any
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.
m. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
PREMCOR INC.
/s/ Xxxxxx X. X'Xxxxxx /s/ Xxxxxx X. Xxxxx
-------------------------------------------- ---------------------------
By: XXXXXX X. X'XXXXXX XXXXXX X. XXXXX
Title: Chairman and Chief Executive Officer
