EXHIBIT 10.4
March 5, 2002
Mr. James J. Postl
President and Chief Executive Officer
Pennzoil-Quaker State Company
P. O. Box 2967
Houston, Texas 77252-2967
Dear Jim:
In order to take advantage of your substantial expertise, we
propose the following Agreement to be effective as of March 18, 2002,
concerning the provision by you of consulting services to Pennzoil-Quaker State
Company for the three-year period commencing on the date of termination of your
employment with Pennzoil-Quaker State Company (the "Consulting Term").
In consideration of the mutual promises and understanding
contained in this Agreement, you and Pennzoil-Quaker State Company agree as
follows:
1. You will perform consulting and advisory services on behalf
of Pennzoil-Quaker State Company. Such services shall be
performed at the request of the Board of Directors of
Pennzoil-Quaker State Company, and in connection with your
consulting and advisory duties, you will report to the Board
of Directors of Pennzoil-Quaker State Company.
2. Your services will be rendered primarily in the
Pennzoil-Quaker State Company offices in Houston, Texas, and
you may travel from time to time upon request by
Pennzoil-Quaker State Company.
3. In the performance of your services hereunder, the hours you
are scheduled to work on any given day will be by mutual
agreement with the Board of Directors of Pennzoil-Quaker
State Company and Pennzoil-Quaker State Company will rely
upon you to accommodate such number of hours as is reasonably
necessary to fulfill the spirit and purpose of this
Agreement.
4. Office and secretarial support will be furnished in Houston
as described in Exhibit A to this Agreement. Pennzoil-Quaker
State Company cars and aircraft may be utilized as described
in Exhibit A to this Agreement.
5. During the term of this Agreement, you will not, without the
prior written consent of Pennzoil-Quaker State Company,
engage directly or indirectly in any business or endeavor
(financially as an individual, investor or lenders or as an
employee, director, officer, partner, independent contractor,
consultant or owner or in any other capacity calling for the
rendition of personal services or acts of management,
operation or control) which is in competition or inconsistent
with, or adverse to or opposed to, the interests of
Pennzoil-Quaker State Company. You should contact the Chief
Executive Officer of Pennzoil-Quaker State
Company to request such written consent prior to determining
it is appropriate to engage in any particular business or
endeavor. Notwithstanding the above, you are not prohibited
from investing or trading on your own behalf in publicly
traded securities of other companies.
6. During the Consulting Term, Pennzoil-Quaker State Company
will pay you at the annual rate of $500,000, but in equal
monthly amounts of $41,666.66 (except that the last payment
shall be $41,666.90) on the first day of the month,
commencing upon the date of your termination of employment
with Pennzoil-Quaker State Company and continuing each month
thereafter with the last payment payable on the first day of
the month during which the Consulting Term ends. In addition,
Pennzoil-Quaker State Company will reimburse you for all
reasonable and necessary travel expenses incurred in
performing services under this Agreement as described in
Exhibit A to this Agreement. In the event of your death or
disability, any amount unpaid under the terms hereof shall be
paid to your spouse, if living, or to your estate, on the
same terms as provided hereunder for payment, or, in the sole
discretion of the Board of Directors of Pennzoil-Quaker State
Company, at such earlier date as determined by the Board of
Directors of Pennzoil-Quaker State Company.
7. Your Tax Protection Agreement dated as of December 30, 1998,
will continue in effect.
8. Neither you, nor your spouse or other beneficiaries shall
have the right to assign any part of your or their rights
under this Agreement. This Agreement contains the entire
understanding between Pennzoil-Quaker State Company and you
regarding this matter and supersedes any prior agreement
between the parties.
9. This Agreement may not be changed or otherwise amended except
by mutual consent evidenced in writing and executed by both
parties to this Agreement.
10. This Agreement is governed by the laws of the State of Texas.
Very truly yours,
/s/ JAMES L. PATE
-----------------------------
James L. Pate
Chairman of the Board
Pennzoil-Quaker State Company
Accepted and agreed to as of the
5th day of March, 2002.
/s/ JAMES J. POSTL
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James J. Postl
EXHIBIT A TO AGREEMENT DATED MARCH 5, 2002
SUPPORT AND EXPENSES
The following are the support and expenses obligations of
Pennzoil-Quaker State Company (the "Company") to James J. Postl ("Mr. Postl")
during the Consulting Term:
1. Company cars and aircraft may be utilized under the same
terms and conditions as have been applicable during your
employment immediately prior to the date of the Agreement,
with any personal use of aircraft subject to IRS imputed
income requirements.
2. Expenses incurred by Mr. Postl in furtherance of the
Company's business shall be reimbursed in accordance with
customary Company practices and procedures regarding expense
reimbursements as in effect immediately prior to the date of
this Agreement.
The following are the Company's obligations with respect to
retired chief executive officers and will continue throughout Mr. Postl's
retirement and beyond the Consulting Term if upon such retirement Mr. Postl is
entitled to immediate commencement of benefits under the Deferred Compensation
Agreement, dated October 4, 2001, between the Company and Mr. Postl:
1. Office space, furniture and equipment appropriate to the
status of a retired chief executive officer of a
publicly-held company will be provided.
2. Company will employ an executive assistant, acceptable to Mr.
Postl, who will be an employee of the Company with full
participation in the Company's employee benefit plans,
programs and practices. The executive assistant will report
to Mr. Postl and the duties and compensation of that
assistant will be determined by Mr. Postl (within the
parameters of overall Company guidelines and policy).
3. Mr. Postl and his executive assistant will be provided with
parking spaces acceptable to Mr. Postl.
4. Full reimbursement for cost of private ground transportation
service used in lieu of a Company chauffeured car.