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EXHIBIT 10.10
PENNZOIL-QUAKER STATE COMPANY EXECUTIVE SEVERANCE PLAN
(AS AMENDED AND RESTATED EFFECTIVE JUNE 1, 2000)
I. PURPOSES OF PLAN AND DEFINITIONS
1.1 Purposes. This Pennzoil-Quaker State Company Executive Severance
Plan, as amended and restated effective June 1, 2000 (the "Plan"), for selected
senior management employees is intended to provide greater incentives to attain
and maintain the high standards of performance, to retain executives of
outstanding competence and ability, to reward such executives for outstanding
performance and to provide protection for loss of salary in the event of certain
changes in control of the Company (as defined herein).
1.2 Definitions.
(a) "Company" means Pennzoil-Quaker State Company or any
successor.
(b) "Subsidiary" means any corporation in which the Company
owns, directly or indirectly, stock possessing 50% or more of the total
combined voting power of all classes of stock or any affiliated company
which is controlled by the Company by reason of a management contract
and stock ownership.
(c) "Board" means the Board of Directors of the Company.
(d) "Compensation Committee" means the Compensation Committee
of the Board.
(e) "Employee" means any employee of the Company or any
Subsidiary (whether or not he is also a director thereof), who is
compensated for employment of the Company or any Subsidiary by a
regular salary and who is considered by the Compensation Committee to
be a senior management employee.
(f) "Participant" means an Employee who has been selected by
the Compensation Committee to participate in the Plan.
II. ADMINISTRATION OF THE PLAN - COMPENSATION COMMITTEE
2.1 Interpretations. The Compensation Committee shall have full power
and authority to interpret, construe and administer this Plan.
2.2 Compensation Committee Determinations Conclusive. All
determinations by the Compensation Committee as to which Employees shall be
offered the opportunity to participate herein shall be final, binding and
conclusive upon all persons. The interpretation adopted by the Compensation
Committee with respect to any provision of the Plan and the effect thereof shall
be final, binding and conclusive upon all persons.
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III. ELIGIBILITY OF EMPLOYEES
3.1 Eligibility Requirements. The Compensation Committee shall in its
sole discretion from time to time designate those Employees who are to
participate herein. The foregoing notwithstanding, subject to Section 3.3, an
Employee who is a Participant immediately preceding the effective date of this
amendment and restatement of the Plan shall continue to be a Participant in this
Plan as of such effective date.
3.2 Notification of Participation. Each Employee who is denominated a
Participant herein by the Compensation Committee shall be provided an agreement
in writing specifying that the Employee is a Participant in this Plan together
with a copy of the Plan.
3.3 Termination of Participation. An Employee's status as a Participant
shall terminate at such time as may be determined by the Compensation Committee;
provided, however, that in the case of an Employee who is a Participant
immediately prior to the Effective Date of a change in control of the Company
(as defined herein) and who is designated by the Board or the Compensation
Committee as described in Section 4.1 hereof as likely to be adversely impacted
by such change in control of the Company, such Participant's coverage by this
Plan may not be terminated without the consent of the Participant within two
years of the Effective Date of such change in control of the Company.
IV. EXECUTIVE SEVERANCE BENEFITS
4.1 Cash Severance Payment. A Participant shall be entitled to the
severance benefits described herein upon termination following a change in
control of the Company only if the Board, in acting to determine that a change
in control has or might occur or the Compensation Committee acting thereafter,
designates the Participant, by name or by descriptive employment category, as
likely to be adversely affected by the particular change in control it being
intended that the Board or the Compensation Committee may determine that certain
Participants herein will not be entitled to severance benefits upon a
termination of employment following a change in control of the Company but only
if such determination is made coincident with or prior to the date the Board
acts under Section 4.2 with respect to such change in control of the Company.
Specifically, it is intended that an employee will not be considered to have a
termination of employment if the employee is separated from service with the
Company, but continues to be employed by and in connection with any part of the
Company's business that is spun-off to the Company's shareholders which spin-off
occurs at a time when the Company's stock is widely held and no individual or
group of shareholders (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) owns (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) twenty
percent or more of the Company's stock. In the event of the termination of a
designated Participant's employment with the Company and any Subsidiary within
two years following a change in control of the Company (as herein defined) for
any reason other than cause (as herein defined), the Company shall pay to such a
Participant who has been designated by the Board or Compensation Committee
pursuant to this Section 4.1 as likely to be adversely affected by such change
in control forthwith an amount in cash equal to the product of (a) three times
the sum of (i) the participant's annual
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salary (at a rate equal to the higher of the rate of salary in effect on the
date immediately prior to the Effective Date of the change in control of the
Company or the annual rate of salary in effect on the date of termination of
employment) and (ii) the greater of (x) the Participant's highest annual
incentive bonus earned during the 12 months preceding termination of employment
or (y) the average annual incentive bonus earned by the Participant during the
three year period preceding the Effective Date of the change in control of the
Company multiplied by (b) a fraction (not to exceed one) the numerator of which
is the number of days between the date of the Participant's termination of
employment and the date the Participant will attain age 65 and the denominator
of which is 1095.
4.2 Change in Control. For purposes of this Plan, a change in control
of the Company shall conclusively be deemed to have occurred (a) if the Board
determines by resolution that a change in control which has the reasonable
likelihood of depriving key employees of benefits they otherwise would have
earned, by depriving key employees of the opportunity to fulfill applicable
service and age prerequisites to benefits or otherwise, has occurred, or (b)
upon the occurrence of an event specified for such purposes as a change in
control which has the reasonable likelihood of depriving key employees of
benefits they otherwise would have earned, by depriving key employees of the
opportunity to fulfill applicable service and age prerequisites to benefits or
otherwise, by resolution of the Board adopted not more than 60 days prior to the
occurrence of such event.
4.3 Effective Date of a Change in Control. The Effective Date of a
change in control of the Company shall be (a), in the case of such a change in
control determined as specified in Section 4.2(a), the date (not more than 30
days prior to the date on which the Board makes the determination) the Board
determines as the date on which such change in control has occurred, or (b), in
the case of such a change in control determined as specified in Section 4.2(b),
the date of occurrence of the event specified by the Board as constituting such
change in control.
4.4 Termination for Cause. For purposes of this Plan, a termination of
employment for cause shall be considered to have occurred only as specifically
described in this Section 4.4 and shall include termination of employment only
if termination of the Participant's employment is as a result of an act or acts
of dishonesty on the part of the Participant constituting a felony and resulting
or intended to result directly or indirectly in gain or personal enrichment at
the expense of the Company.
4.5 Medical Benefits Continuation. Any Participant entitled to benefits
under this Plan shall be entitled to receive for the 12 months following
termination of employment continued coverage under the Company's medical
benefits plan in which the Participant is participating as of the Effective Date
at a rate no less favorable than that in effect on the Effective Date of the
change in control of the Company.
V. RIGHTS OF PARTICIPANTS
5.1 Limitation of Rights. Nothing in this Plan shall be construed to:
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(a) Give any Employee of the Company or a Subsidiary any right
to participate in this Plan;
(b) Limit in any way the right of the Company or any
Subsidiary to terminate a Participant's employment with the Company or
any Subsidiary at any time;
(c) Give a Participant or any spouse of a deceased Participant
any interest in any fund or any specific asset or assets of the Company
or any Subsidiary; or
(d) Be evidence of any agreement or understanding, express or
implied, that the Company or any Subsidiary will employ a participant
in any particular position or at any particular rate of remuneration.
5.2 Non-alienation of Benefits. No right or benefit under this Plan
shall be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge the same will be void. No right or benefit hereunder
shall in any manner be liable for or subject to any debts, contracts,
liabilities or torts of the person entitled to such benefits.
5.3 Prerequisites to Benefits. No Participant, or any person claiming
through a Participant shall have any right or interest in the Plan, or any
benefits hereunder unless and until all of the terms, conditions and provisions
of the Plan which affect such Participant or such other person shall have been
complied with as specified herein.
VI. MISCELLANEOUS
6.1 Amendment or Termination of the Plan. The Board may amend or
terminate this Plan at any time; provided, however, that the terms of the Plan
as in effect upon a change in control of the Company may not be changed in a
manner which would adversely affect the rights of any Employee who, as of the
date immediately prior to the date the Board acts under Section 4.2 of the Plan
with respect to determination of the Effective Date of a change in control of
the Company, is a Participant in the Plan and who has been designated by the
Board or the Compensation Committee as likely to be adversely affected by the
change in control.
6.2 Applicable Laws. This Plan shall be construed, administered and
governed in all respects under the laws of the State of Texas.
PENNZOIL-QUAKER STATE COMPANY
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