EXHIBIT 10.18
EXECUTIVE SEVERANCE AGREEMENT,
Dated as of December 1, 1997,
between
LYONDELL PETROCHEMICAL COMPANY,
a Delaware corporation (the "Company"),
and
JOSEPH M. PUTZ ("Executive")
TABLE OF CONTENTS
Section 1. Termination Following Employment by Partnership.............. 1
Section 2. Rights and Benefits upon Termination......................... 2
(a) Stock Options............................................ 2
(b) Salary and Other Payment at Termination.................. 3
(c) Crediting of Additional Pension Benefit.................. 3
(d) Executive Deferral Plan.................................. 4
(e) Insurance and Other Benefits............................. 4
(f) Financial Counseling..................................... 5
(g) Outplacement............................................. 5
(h) No Duty to Mitigate...................................... 5
Section 3. Other Benefit Plans.......................................... 5
Section 4. Payment Obligations Absolute................................. 6
Section 5. Combined Gross-up Payment.................................... 6
Section 6. Confidentiality and Cooperation.............................. 7
(a) Cooperation.............................................. 7
(b) Release of Liability..................................... 7
Section 7. Term of Agreement............................................ 7
Section 8. Arbitration.................................................. 8
(a) Arbitrable Matters....................................... 8
(b) Submission to Arbitration................................ 8
(c) Arbitration Procedures................................... 8
(d) Compliance with Decisions................................ 9
(e) Costs and Expenses....................................... 9
Section 9. Notices...................................................... 9
Section 10. Miscellaneous................................................ 10
(a) Assignment............................................... 10
(b) Construction of Agreement................................ 10
(c) Amendment................................................ 11
(d) Waiver................................................... 11
(e) Severability............................................. 11
(f) Successors............................................... 11
(g) Taxes.................................................... 11
(h) Governing Law............................................ 11
(i) Entire Agreement......................................... 12
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EXECUTIVE SEVERANCE AGREEMENT
THIS EXECUTIVE SEVERANCE AGREEMENT, is made and entered into this 1st
day of December, 1997, by and between LYONDELL PETROCHEMICAL COMPANY, a Delaware
corporation (hereinafter referred to as "Company"), and JOSEPH M. PUTZ, an
individual (hereinafter referred to as "Executive").
WITNESSETH:
WHEREAS, the Compensation Committee of the Board of Directors of the
Company (the "Compensation Committee") has authorized the Company to enter into
a severance agreement in the form hereof with Executive;
WHEREAS, Executive has been offered a position, anticipated to be
effective on or about January 1, 1998, with Equistar Chemicals L.P.
("Equistar") and it is in the best interest of the Company that Executive accept
this position without concern that Executive be distracted by personal
uncertainties and risks created by this new assignment;
NOW, THEREFORE, to assure the Company that it will have the continued
dedication of Executive and the availability to Executive's advice and counsel
prior to Executive's employment with Equistar, to induce Executive to remain in
the employ of the Company until employment by Equistar, and further, to accept
employment with Equistar and for other good and valuable consideration, the
parties agree as follows:
Section 1. Termination Following Employment by Partnership.
Company will provide or cause to be provided to Executive the rights and
benefits described in Section 2 of this Agreement in the event Executive's
employment with Equistar is terminated by Equistar or at Executive's
comtemplated resignation on December 31, 1999.
Termination also shall include termination by reason of Executive's
death, permanent disability or termination of employment by Executive within
ninety (90) days following the occurrence of any event which shall constitute a
"Constructive Termination for Good Reason."
For purposes of this Agreement, Constructive Termination for Good Reason
means:
(i) the Executive is assigned to any duties or responsibilities
that are not comparable to Executive's position, offices, duties,
responsibilities or status with Equistar at the time of Equistar
employment, or the Executive's reporting responsibilities or titles are
changed and the change results in a reduction of Executive's
responsibilities or position at Equistar;
(ii) the level of benefits or compensation provided to Executive
is reduced below the comparable level of benefits or compensation
payable to similarly situated Executives at Equistar; or
(iii) the Executive is actually transferred, or offered a
proposed transfer, as evidenced in a written communication from Equistar
to Executive, to another location other than the location at which he
was primarily employed immediately preceding his initial employment with
Equistar, unless that new location is a major operating unit or facility
of the Company or Equistar that is located within 50 miles of
Executive's primary location as of the date immediately preceding a
transfer; provided, however, (1) Executive, within thirty (30) days from
the date that he is given written notice of such actual or proposed
transfer, shall provide the Compensation Committee or the Partnership
Governance Committee of Equistar ("Partnership Governance Committee")
with written notice that the transfer shall constitute a Constructive
Termination for Good Reason, (2) Equistar, within twenty (20) days of
receipt of the notice, fails to provide Executive with written notice
rescinding the actual or proposed transfer and (3) if the Equistar does
not rescind the transfer, Executive must terminate his employment due to
Constructive Termination for Good Reason within forty (40) days
following expiration of the 20-day period so that in any event Executive
shall have terminated his employment with Equistar within 90 days after
Executive first receives written notice from Equistar of such actual or
proposed transfer.
Section 2. Rights and Benefits upon Termination. In the event Executive
is entitled to receive the rights and benefits described in this Section as a
result of the termination or Constructive Termination for Good Reason of
Executive's employment as described in Section 1 (collectively referred to as
"Termination"), Company agrees to provide or cause to be provided to Executive
these rights or benefits when Executive's employment terminates on or before
December 31, 1999.
(a) Stock Options. With respect to any stock options granted to
Executive under the Company's Executive Long-Term Incentive Plan (the "Stock
Option Plan"), notwithstanding any provision of the Stock Option Plan or
Executive's associated stock option agreement, if any, to the contrary, all
non-vested options shall become 100% vested and fully exercisable as of the last
business day immediately preceding Executive's Termination.
If Company experiences a Change in Control and no longer offers any
publicly traded securities prior to Executive's Termination, Company shall also
pay or cause to be paid to Executive a cash lump sum payment for all outstanding
dividend share credits associated with stock options granted under the Stock
Option Plan. This lump sum payment shall be paid within forty-five (45) calendar
days from the date of the Change in control.
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For purposes of this Section, the value of the outstanding dividend
share credits shall be calculated by SCA Consultants, or any other compensation
consultant that is mutually agreeable to the parties (the "Compensation
Consultant"). In preparing its valuation, the Compensation Consultant in its
good faith discretion shall be responsible for designating reasonable and
customary parameters for the methodology used in its calculation. Company shall
deliver to Executive the determination of the value of his dividend share
credits with the payment therefore.
All stock options owned by Executive shall be freely exercisable
following Termination for the remainder of their existing terms without regard
to any earlier date that may be specified therein including, without limitation,
an earlier expiration date specified with respect to Executive's termination of
employment.
(b) Salary and Other Payment at Termination. Company shall pay of shall
cause Equistar to pay to Executive not later than thirty (30) days following
Termination a lump-sum payment in cash in the amount of three (3) times
Executive's "Applicable Annual Earnings" (as defined below).
For purposes of this Agreement, "Applicable Annual Earnings" shall mean
the sum of Executive's annual base salary in effect on the last day of
employment with Company and Executive's Average Award (whether or not paid) for
personal services on behalf of the Company prior to Equistar employment. Amounts
used to determine Applicable Annual Earnings are shown in Exhibit A, attached.
The Average Award shall be the average, determined over the three year period
immediately prior to Executive's employment by Equistar, of the cash amount of
an Executive's annual award payable under the Company's Value Share Plan (but
not deferred cash associated with any grant of restricted stock or any
additional amount paid to Executive which represents pro rata awards for
outstanding performance cycles). Applicable Annual Earnings shall include
Executive's annual base salary and Average Award whether or not paid on a
deferred basis, including without limitation, amounts contributed by or on
behalf of Executive under a Company-sponsored plan, such as (i) a plan described
in Section 125 or 401(k) of the Internal Revenue Code of 1986, as amended, or
(ii) the Company's Executive Deferral Plan or an "excess benefit plan" as
defined in the Employee Retirement Income Security Act of 1974, as amended.
Notwithstanding the preceding provisions of this paragraph, Applicable Annual
Earnings does not include any income attributable to stock options, stock
appreciation rights, performance awards other than awards under an executive
bonus plan described above, dividend credits, and restricted stock granted
under, and dividends on shares acquired pursuant to, any stock option plan,
restricted stock plan or performance unit plan.
(c) Crediting of Additional Pension Benefit. Company shall cause
Executive to be credited with an additional five (5) years of (i) age and (ii)
service with the Company, under the Company's Supplementary Executive Retirement
Plan (or its successor) for
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purposes of determining his accrued benefits thereunder. Such benefits shall be
determined on the basis of Executive's age and compensation as of his
termination date.
If the method to calculate a retirement benefit under Company's
qualified retirement plan and Supplementary Executive Retirement Plan is
changed, then the Executive shall be entitled to an amount under the new plan
formula that is the equivalent of the amount that would have been payable if
the Executive had been credited as described above. Payments attributable to
this enhanced retirement benefit shall be payable under Company's non-qualified
retirement plan for executives.
(d) Executive Deferral Plan. The provisions of this Section 2(d) shall
apply notwithstanding any provisions of the Company's Executive Deferral Plan
(the "Deferral Plan") or the initial paragraph of Section 2 hereof to the
contrary.
If Executive experiences a Termination of employment with Equistar then,
notwithstanding any other provision of this Agreement, the full amount of
contributions and earnings accrued or credited to Executive's account balances
under the Deferral Plan (as of the date immediately preceding the Termination)
shall be immediately distributed to Executive in a cash lump-sum payment.
Upon distribution of his accounts, Executive shall be entitled to an
Income Tax Gross-up on the full amount of contributions plus earnings accrued or
credited to Executive's account in the Company's Deferral Plan as of September
1, 1996, which amount is $697,997.40. The Income Tax Gross-up shall be equal to
66% of the amount necessary so that after payment of any federal, state and
local income or employment tax by Executive on the distribution of that amount
under the Company's Deferral Plan and the Income Tax Gross-up, the net amount
Executive retains shall be the full amount accrued to his account balance under
the Company's Deferral Plan as of September 1, 1996.
For purposes of determining the amount of the Income Tax Gross-up,
Executive shall be deemed (i) to pay federal income taxes at the highest stated
rate of federal income taxation (including surtaxes, if any) for the calendar
year in which the Income Tax Gross-up is to be made and (ii) to pay any
applicable state and local income taxes at the highest stated rate of taxation
(including surtaxes, if any) for the calendar year in which the Income Tax
Gross-up is to be made. Any Income Tax Gross-up required hereunder shall be paid
by the Company to the Executive at the same time that any payment made under the
Deferral Plans which is subject to income tax is paid or deemed received by
Executive.
(e) Insurance and other Benefits. To the extent that Executive is
eligible thereunder, then for a period of twenty-four (24) months following
Termination. Executive (and his dependents, as applicable) shall continue to be
covered at the Company's expense by Equistar's life insurance, medical, dental,
accident and disability plans or any successor to a plan or program in effect at
Termination for employees in the
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same class or category as Executive (hereafter individually and collectively
referred to as "Welfare Plan"), subject to the terms of the Welfare Plan and to
Executive's making any required contributions thereto which contributions shall
not exceed those charged to employees in the same class or category in which
Executive was employed by Equistar. In the event that Executive is ineligible to
continue to be so covered under the terms of any Welfare Plan, or in the event
that Executive is eligible but the benefits applicable to Executive (and his
dependents, as applicable) are not substantially equivalent to such benefits
immediately prior to Termination, then, for a period of twenty-four (24) months
following Termination, Company, at its expense, shall provide to Executive (and
his dependents, as applicable) through other sources such benefits as may be
necessary to make the benefits applicable to Executive (and his dependents, as
applicable) substantially equivalent to those in effect immediately prior to
Termination. Continuation coverage provided pursuant to any group health plan
maintained by Equistar shall be credited against, and not in addition to, any
continuation coverage required under the Consolidated Omnibus Budget
Reconciliation Act of 1985 as amended ("COBRA"). Any retiree coverage provided
to Executive by Equistar shall be on the same terms and conditions, including
bridging of coverage, as that provided to executives in the same class or
category in which Equistar employed Executive.
(f) Financial Counseling. For a period of one year following
Termination, Executive shall continue to be covered at Company's expense under
Equistar's financial counseling program, or any successor program, in effect at
Termination for employees in the same class or category as Executive, subject to
the terms of such program. In the event that benefits available to Executive
under that financial counseling program are not substantially equivalent to the
benefits available to Executive at Termination, Company, at its expense ,shall
provide to Executive through other sources such benefits as may be necessary to
make the benefits available to Executive substantially equivalent to those in
effect at Termination.
(g) Outplacement. Company shall cause Equistar to provide to Executive,
at Company's expense but not to exceed $40,000.00, outplacement assistance for
Executive from a professional outplacement assistance firm, which is reasonably
suitable to Executive.
(h) No Duty to Mitigate. Executive's entitlement to benefits hereunder
shall not be governed by any duty to mitigate Executive's damages by seeking
further employment nor offset by any compensation which Executive may receive
from future employment.
Section 3. Other Benefit Plans. The specific arrangements referred to
in this Agreement are not intended (i) to exclude or limit Executive's
participation in other benefit plans or programs in which Executive currently
participates or may participate including, without limitation, retiree benefits,
or benefits which are available to executive personnel generally in the same
class or category as Executive (excluding only the Company's Special Termination
Plan and the special supplemental retirement benefit
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authorized by the Compensation Committee on September 13, 1991) or, (ii) to
preclude or limit other compensation or benefits as may be authorized by the
Compensation Committee or the Partnership Governance Committee of Equistar
("Partnership Governance Committee") from time to time. To the extent not
otherwise paid or provided, Company shall pay or provide or shall cause to be
paid or provided to the Executive and/or the Executive's dependents any other
amounts or benefits required to be paid or provided or which the Executive or
the Executive's dependents are eligible to receive pursuant to this Agreement
and under any plan program, policy or practice or contract or agreement of
Equistar as in effect and applicable generally to executive personnel in the
same class or category of Executive.
Section 4. Payment Obligations Absolute. Company's obligation to pay or
provide or cause to be paid or provided to Executive the amounts and benefits
and to make the arrangements provided in this Agreement shall be absolute and
unconditional and shall not be affected by any circumstances (including, without
limitation, any setoff, claim, counterclaim, recoupment, defense or other right,
which the Company may have against Executive or anyone else). All amounts
payable by or on behalf of the Company hereunder shall be paid without notice or
demand. Each and every payment made hereunder shall be final and the Company
and its subsidiaries or affiliates for any reason whatsoever, shall not seek to
recover all or any part of such payment from Executive or from whomever shall be
entitled thereto. In no event shall an asserted violation of any provision of
this Agreement constitute a basis for deferring or withholding any amount
payable to, or on behalf of, Executive under this Agreement.
Section 5. Combined Gross-up Payment. In the event that any payment
under this Agreement, including an increase in pension benefits and vesting of
an option or other non-cash benefit or property, is determined to be a
"parachute payment" as defined in the Internal Revenue Code and the payment is
or becomes subject to the tax imposed by section 4999 of the Internal Revenue
Code, as amended, or such similar tax that may be hereafter imposed ("Excise
Tax"), Company shall pay to Executive an additional cash amount ("Combined
Gross-up Payment") such that the net amount retained Executive after reduction
for (i) any Excise Tax on the payment and (ii) any federal, state, and local
income or employment tax and Excise Tax payable with respect to the Combined
Gross-up Payment, shall equal the payments under this Agreement determined to be
parachute payments. For purposes of determining the amount of the Combined
Gross-up Payment, Executive shall be deemed (i) to pay federal income tax at the
highest stated rate of federal income taxation (including surtaxes, if any) for
the calendar year in which the Combined Gross-up Payment is to be made and (ii)
to pay any applicable state and local income taxes at the highest stated rate of
taxation (including surtaxes, if any) for the calendar year in which the
Combined Gross-up Payment is to be made. Any Combined Gross-up Payment required
under this Agreement shall be made to Executive at the same time any payment is
determined to be subject to the Excise Tax.
If, in connection with the examination of Executive's tax return, the
Internal Revenue Service asserts that any amount payable or benefit provided
hereunder is a
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"parachute payment" as defined in the Code and such amount or benefit was not
treated as a parachute payment for purposes of determining the Combined Gross-up
Payment (as defined above), Company at its cost shall assume the defense of any
controversy involving such issue and shall indemnify and hold Executive harmless
for all liabilities, costs, taxes, interest and penalties attributable to such
issue and shall to the extent necessary (without duplication) increase the
Combined Gross-up Payment to give effect to any additional amount or benefit
determined to be a parachute payment. Executive shall cooperate with Company so
that Company will be able to challenge any adverse determination by the
Internal Revenue Service through administrative proceedings and, if determined
by Company, through litigation.
Section 6. Confidentiality and Cooperation.
(a) Cooperation. Executive agrees that, at all times following
Termination, Executive will furnish such information and render such assistance
and cooperation as may reasonably be requested in connection with any litigation
or legal proceedings concerning the Company, any of its subsidiaries or
affiliates or Equistar (other than any legal proceedings arising out of or
concerning Executive's employment or its Termination). In connection with such
cooperation, Company will pay or reimburse Executive for reasonable expenses.
(b) Release of Liability. Executive hereby represents and covenants that
prior to the time he is eligible to receive any payments provided for in Section
2 of this Agreement, he will execute and deliver to the Company, on a form
reasonably satisfactory to the Company and the Executive, a separate release and
waiver, which, without limiting the generality of the foregoing, shall include a
release and discharge of the Company and its subsidiaries and affiliates, and
Equistar, and its and their directors, Partnership Governance Committee,
officers, employees, owners, agents, successors and assigns from any and all
suits, causes of action, demands, claims, charges, complaints, liabilities,
costs, losses, damages, injuries, bonds, judgments, attorneys' fees and
expenses, in any form whatsoever, in law or in equity, whether known or unknown,
whether suspected or unsuspected, arising out of Executive's employment with
Company or with Equistar through his Termination, including, without limitation,
claims arising under any federal, state or local law for breach of an implied
covenant of good faith and fair dealing, breach of contract, defamation,
slander, negligent misrepresentation, fraud, intentional or negligent
interference with business relations, and employment discrimination, including,
but not limited to, claims under the Age Discrimination in Employment Act,
the Americans with Disabilities Act and the Texas Commission on Human Rights
Act.
Section 7. Term of Agreement. This Agreement shall remain in effect
until January 1, 2000. It is the Company's intention to provide or cause to be
provided to Executive the benefits set forth herein if Executive is terminated
from employment by Equistar on or before December 31, 1999 or resigns from
Equistar employment on December 31, 1999 and the other applicable conditions are
satisfied.
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Section 8. Arbitration.
(a) Arbitrable Matters. Any dispute under this Agreement arising
between the parties shall be settled by binding arbitration. In the event of any
dispute between Executive and the Company or Equistar hereunder, either party
shall be entitled to submit the dispute to arbitration. The arbitration
proceeding shall be held in Houston, Texas (unless otherwise mutually agreed by
the parties), and shall be conducted in accordance with the Center for Public
Resources ("CPR") Rules for Non-Administered Arbitration of Business Disputes.
The arbitration shall be conducted by a sole arbitrator appointed in accordance
with the rules established by CPR (the "Arbitrator").
Any arbitration between Executive and the Company or Equistar pursuant
to this Agreement shall be governed by the United States Arbitration Act, 9
U.S.C. (SS)1-16 (or its successor). If the United States Arbitration Act is
determined by the Arbitrator not to apply to this type of employer/employee
agreement based on precedential legal authority, the parties agree to arbitrate
any dispute under the Texas General Arbitration Act, V.A.T.S. Art. 238-6 et.
seq. (or its successor).
(b) Submission to Arbitration. The party submitting any matter arising
out of this Agreement to arbitration (the "demanding party") shall do so by
delivering written notice thereof (the "arbitration notice") to the other party
(the "noticed party"). In addition to indicating the demanding party's intention
to commence arbitration proceedings, the arbitration notice shall state the
nature, with reasonable detail, of the dispute and the demanding party's claim
or claims, the question or questions to be submitted for decision or award by
arbitration and the relief or remedy sought. A copy of the arbitration notice
shall be concurrently provided to CPR, along with a copy of this Agreement and a
request to appoint an Arbitrator. Either party may bring an action in any court
of competent jurisdiction to compel arbitration under the Agreement.
(c) Arbitration Procedures. The Arbitrator shall apply the substantive
law (and the law of remedies, if applicable) of the State of Texas as applicable
to the claim asserted. The Federal Rules of Evidence shall apply. The Arbitrator
shall have no authority to change this Agreement unless otherwise agreed by both
parties. The Arbitrator shall have no authority to change this Agreement unless
otherwise agreed by both parties. The Arbitrator, and not any federal, state, or
local court or agency, shall have exclusive authority to resolve any dispute
relating to the interpretation, applicability, enforceability or formation of
this Agreement, including but not limited to any claim that all or any part of
this Agreement is void or voidable. Any party may be represented by an attorney
or other representative selected by the party.
The Arbitrator shall have jurisdiction to hear and rule on pre-hearing
disputes and is authorized to hold pre-hearing conferences by telephone or in
person, as the Arbitrator deems necessary. The Arbitrator shall have the
authority to entertain a motion to dismiss
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and/or a motion for summary judgment by any party and shall apply the standards
governing such motions under the Federal Rules of Civil Procedure.
At any time after the date of receipt of the arbitration notice, each
party can make discovery requests of the other in any form permitted under the
Federal Rules of Civil Procedure. The recipient of a discovery request shall
have 20 days after the receipt of such request to object to any or all portions
of such request, and shall respond to any portions of such request not so
objected to within 30 days of the receipt of such request. All objections shall
be in writing and shall indicate the reasons for such objections. The objecting
party shall insure that all objections and responses are received by other
parties within the above time periods. Any party seeking to compel discovery
following receipt of an objection shall file with the other party and the
Arbitrator a motion to compel, including a copy of the initial request and the
objection. The Arbitrator shall allow 10 days for responses to the motion to
compel before ruling. Claims of privilege and other objections shall be
determined as they would in federal court in a case applying Texas law.
At least 30 days before the arbitration, the parties must exchange lists
of witnesses, including any expert witnesses, and copies of all exhibits
intended to be used at the arbitration. Each party shall have the right to
subpoena witnesses and documents for the arbitration. Either party may arrange
for a court reporter to provide a stenographic record of proceedings. The cost
of the court reporter will be paid by the Company or Equistar.
(d) Compliance with Decisions. To the extent permissible under
applicable law, the parties agree that the award of the Arbitrator shall be
final and binding and shall be subject only to the judicial review permitted by
the United States Arbitration Act or other applicable arbitration law pursuant
to Section 10(a) hereof. Judgment on the arbitration award may be entered and
enforced in any court having jurisdiction over the parties or their assets. It
is the intent of the parties that the arbitration provisions hereof be enforced
to the fullest extent permitted by applicable law.
(e) Costs and Expenses. Company shall promptly pay or reimburse
Executive for all costs and expenses, including, without limitation, attorneys'
fees and witnesses' fees, incurred by Executive as a result of any arbitration
(regardless of the outcome thereof) arising out of this Agreement. All expenses
of such arbitration, including the reasonable fees and expenses of legal counsel
for Executive and the costs and expenses incurred by the Arbitrator, shall be
borne by the Company.
Section 9. Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder (hereinafter referred
to as "notices") shall be in writing and shall be deemed to have been duly given
if delivered by-hand, given by prepaid telecopy, telex or telegram, or mailed
via certified or registered U.S. mail, to the
9
party to receive such notice at such party's address set forth below; provided
that either party may change its address for notice by giving to the other party
written notice of such change.
If to Company:
Lyondell Petrochemical Company
1221 McKinney, Suite 1600
Houston, Texas 77002
Attn: Chairman of the Board of Directors
If to Equistar:
Equistar Chemicals, L.P.
1221 McKinney, Suite 1600
Houston, Texas 77002
Attn: Partnership Governance Committee
If to Executive:
Joseph M. Putz
13435 Belhaven
Houston, Texas 77069
Any notice given pursuant to this Agreement shall be deemed received (i)
if delivered by-hand, when delivered; (ii) if sent by telecopy, telex or
telegram, 24 hours after sending; and (iii) if mailed, when delivered.
Section 10. Miscellaneous.
(a) Assignment. No right, benefit or interest hereunder shall be
subject to assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation or set-off in respect of any claim, debt or obligation, or
to execution, attachment, levy or similar process; provided, however, that
Executive may assign any right, benefit or interest hereunder if such assignment
is permitted under the terms of any plan or policy of insurance, or annuity
contract governing such right, benefit or interest.
(b) Construction of Agreement. Nothing in this Agreement shall be
construed to amend any provision of any plan or policy of the Company or
Equistar except as otherwise expressly noted herein. This Agreement is not, and
nothing herein shall be deemed to create, a commitment of continued employment
of Executive by the Company or any of its subsidiaries or by Equistar. The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect. Whenever the context of this Agreement so requires, the
masculine gender includes the feminine gender, and words used in the singular or
plural will include the other. The words "herein" "hereunder,"
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and other similar compounds of the word "here" refer to the entire Agreement and
not to any particular, section or provision.
(c) Amendment. This Agreement may not be amended, modified or canceled
except by written agreement of the parties or their respective successors and
legal representatives.
(d) Waiver. No provision of this Agreement may be waived except by a
writing signed by the party to be bound thereby.
(e) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect to
the fullest extent permitted by law.
(f) Successors. This Agreement is personal to Executive and without the
prior written consent of the Company or Equistar shall not be assignable by
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
This Agreement shall be binding upon and inure to the benefit of the
Company, Equistar and any successor organization or organizations which shall
succeed to substantially all of the business and/or assets of the Company
(whether direct or indirect by means of merger, consolidation, acquisition of
substantially all the assets of the Company, or otherwise, including by
operation of law).
(g) Taxes. Any payment or delivery required under this Agreement shall
be subject to all requirements of the law with regard to withholding of taxes,
filing, making of reports and the like.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ITS
CONFLICTS OF LAW PRINCIPLES.
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(i) Entire Agreement. Except as otherwise provided in Section 4 or
Section 12(b) hereof, this Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
28 day of January, 1998.
LYONDELL PETROCHEMICAL COMPANY
By: /s/ Dan F. Smith
-----------------------------------
Name: Dan F. Smith
Title: President and Chief Executive Officer
EXECUTIVE
By: /s/ Joseph M. Putz
-----------------------------------
Name: Joseph M. Putz
Title: Vice President and Controller
EXHIBIT A
Applicable Annual Earnings
VSP Annual Cash Award:
March, 1996 $ 83,433
March, 1997 54,435
December, 1997 109,670
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247,538
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Average Award 82,513
Annual Base Salary 201,188
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Applicable Annual Earnings $283,701
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