Exhibit 10.12
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FORM OF
CHANGE-IN-CONTROL, RETENTION
AND SEVERANCE AGREEMENT
This Change-In-Control, Retention And Severance Agreement (the
"Agreement") is made and entered into by and between Premcor Inc. (the
"Company") and ______________ (the "Executive") on this ___ day of __________,
2000.
WHEREAS, the Executive is currently employed by The Premcor Refining
Group Inc. ("PRG"), an indirect wholly-owned subsidiary of the Company, and the
Company recognizes the Executive's unique skills and abilities in serving the
Company's business in such capacity;
WHEREAS, the Company desires the Executive to continue serving PRG and
is willing to provide certain rights and benefits to Executive to assure such
continuation;
WHEREAS, the Company also wishes to assure that it will have
Executive's continued dedication, notwithstanding any uncertainties regarding
Executive's status as a result of a potential change in control of the Company.
WHEREAS, the Company believes it is imperative to diminish the
inevitable distraction by virtue of the personal uncertainties and risks created
by a potential change in ownership or control, to encourage Executive's full
attention and dedication to the Company's business, and to provide Executive
with reasonable protection from the risks of a change in ownership or control of
the Company.
WHEREAS, in consideration of the following the Company and Executive
have determined that it is reasonable for the Company to ask Executive to
refrain from competing with the Company for a period of time following a
termination of employment pursuant to this Agreement.
THEREFORE, the Company and Executive agree as follows:
1. DEFINITIONS
(a) "Board" shall mean the Company's Board of Directors.
(b) "Cause" shall mean:
(i) the willful and continuous failure by Executive to
substantially perform Executive's duties with the Company (other than any
such failure resulting from Executive's incapacity due to physical or
mental illness) after a written demand for substantial performance is
delivered to Executive by the Board which specifically identifies the
manner in which the Board believes that Executive has not substantially
performed Executive's duties,
(ii) gross misconduct or gross negligence by Executive, or
(iii) Executive's conviction of or the entering of a plea of
guilty or nolo contendere to the commission of a felony.
For purposes of this definition, no act, or failure to act, on
Executive's part shall be considered "willful" unless done, or omitted to
be done, by Executive not in good faith and without reasonable belief that
Executive's action or omission was in the best interest of the Company.
Notwithstanding the foregoing, after a Change in Control, Executive shall
not be deemed to have been terminated for Cause unless and until there
shall have been delivered to Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board (after at least 20 days
prior written notice to Executive and an opportunity for Executive,
together with Executive's counsel, to be heard before the Board), finding
that (A) in the good faith opinion of the Board, Executive has failed to
perform Executive's duties as set forth in subsection (i) of this Section
1(b) and Executive did not correct such failure within a reasonable period
of time after being requested by the Board to do so, or Executive has
engaged in gross misconduct or gross negligence as set forth above in
subsection (ii) of this Section 1(b), or (B) as set forth in subsection
(iii) of this Section 1(b), Executive has been convicted of or has entered
a plea of guilty or nolo contendere to the commission of a felony.
(c) "Change in Control" of the Company shall mean:
(i) the consummation of (A) any consolidation, reorganization,
merger or similar transaction involving the Company, other than a
consolidation, reorganization, merger or similar transaction in which the
shareholders immediately prior to such transaction own more than 50% of the
combined voting power of the voting securities of the surviving
corporation, (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Company, or (C) the liquidation or dissolution of
the Company;
(ii) when any Person, other than an employee benefit plan or
trust maintained by the Company or any of its Subsidiaries, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than 25% of the voting power of the Company
outstanding at the time (in one or more related or unrelated
transactions)(a "Significant Interest"), but only if at such time such
interest is greater than The Blackstone Group's beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of the voting power of the
Company ("Blackstone's Interest");
(iii) when, during any period of 24 months or less, the
individuals who constituted the Board at the beginning of such period shall
cease for any reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Company's shareholders, as
the case may be, of each new director during such period was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period.
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(d) "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation
Act, as amended.
(e) "Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company.
(f) "Company" shall mean Premcor Inc. and any successor to its
securities, business and/or assets which executes and delivers the agreement
provided for in Section 6(a), hereof or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
(g) "Competitive Activity" shall have the meaning set forth in Section
3(b)(i).
(h) "Competitive Operation" shall have the meaning set forth in Section
3(b)(i).
(i) "Confidential Information" shall mean all non-public information
relating to the Company's, its divisions' and Subsidiaries' and their
successors' business practices and business interests, including, but not
limited to, customer and supplier lists, business forecasts, business and
strategic plans, financial and sales information, information relating to
products, process, equipment, operations, marketing programs, research, or
product development, engineering records, computer systems and software,
personnel records or legal records.
(j) "Date of Termination" shall mean: (A) if Executive's employment is
terminated by the Company due to Executive's Disability, the date thirty (30)
days after the Notice of Termination is given by the Company to Executive;
provided, however, that such notice shall have no effect if Executive resumes
the performance of Executive's duties on a full-time basis during such thirty
(30) day period, (B) if Executive's employment is terminated by the Company for
any reason other than Disability, the date on which the Executive receives the
Notice of Termination, unless a later date is specified in such notice and (C)
if Executive's employment is terminated by Executive, the date specified in the
Notice of Termination; provided; however, that such date shall be at least
thirty (30) days after such notice is provided to the Company.
(k) "Disability" shall occur when: if, as a result of Executive's
incapacity due to physical or mental illness, Executive shall have been absent
from Executive's duties with the Company for six (6) consecutive months.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(m) "Excise Tax" shall have the meaning set forth in Section 5(a).
(n) "Good Reason" shall mean, except as otherwise set forth herein,
the occurrence of any of the following:
(i) without Executive's express written consent, a material
diminution of Executive's position, duties or responsibilities with the
Company, a diminution in
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Executive's titles or offices with the Company or any removal of Executive
from, or any failure to reelect Executive to, any of such positions, but
only if any such diminution, removal or failure occurs after a Change in
Control or upon the request of a Person effectuating a transaction which
results in a Change in Control;
(ii) a reduction by the Company in Executive's Base Salary or
target incentive opportunity; unless such reduction is part of a general
salary reduction affecting at least the majority of the Company's salaried
employees or as a result of a change in the annual incentive plan
opportunity affecting the majority of similar situated employees and such
reduction occurs prior to a Change in Control (notwithstanding the
foregoing, any such reduction made upon the request of a Person
effectuating a transaction which results in a Change in Control shall
constitute "Good Reason");
(iii) the material reduction, in the aggregate, of the benefits
provided under employee benefit plans (as described in Section 3(3) of
ERISA, and including, but not limited to, thrift, pension, life insurance,
health, dental, vision and accident or disability plans) in which Executive
is participating or is eligible to participate (or substitute plans
providing Executive with substantially similar benefits);
(iv) without Executive's express written consent, the relocation
of Executive's current principal place of business to a location that is
more than thirty-five (35) miles from Executive's current location, but
only if such relocation occurs after a Change in Control (required travel
on the Company's business to an extent substantially consistent with
Executive's present business travel obligations shall not constitute "Good
Reason");
(v) any breach by the Company of any material provision of this
Agreement; or
(vi) any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company.
For purposes of subsections (i) through (iii) above, the applicable date
for determining whether an event gives rise to "Good Reason" prior to a Change
in Control shall be the date of this Agreement. For purposes of subsections (i)
through (iii) above, the applicable date for determining whether an event gives
rise to "Good Reason" after a Change in Control shall be the date immediately
prior to such Change in Control.
Notwithstanding anything in this Section 1(n) to the contrary, Executive
shall not be deemed to have "Good Reason" unless and until (x) Executive
provides the Company with a notice (which may or may not be a Notice of
Termination) containing the particulars of the event giving rise to Good Reason
not later than two (2) months following such event and (y) the Company fails to
cure or resolve the behavior otherwise constituting Good Reason within thirty
(30) days after receipt of such notice. Unless the Company agrees otherwise,
the effective date of Executive's Notice of Termination for Good Reason shall be
no later than two (2) months following the expiration of such thirty-day period.
(o) "Gross-up Payment" shall have the meaning as set forth in Section
5(a).
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(p) "Noncompete Period" shall have the meaning as set forth in Section
3(b)(i).
(q) "Notice of Termination" shall mean a written 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 Executive's employment under the provision so
indicated.
(r) "Payment" shall have the meaning as set forth in Section 5(a).
(s) "Person" shall have the meaning as set forth in Sections 13(d) and
14(d)(2) of the Exchange Act.
(t) "Qualifying Termination" shall mean the termination of Executive's
employment by the Company or the Executive if such termination occurs either
after a Change in Control of the Company or in the case of a termination by the
Company, prior to a Change in Control but upon the request of a Person
effectuating a transaction which results in a Change in Control, unless the
Executive's termination is (a) by reason of Executive's death or Disability, (b)
by the Company for Cause, or (c) by Executive other than for Good Reason.
(u) "Salary Continuation Period'' shall have the meaning set forth in
Section 3(a)(i).
(v) "Subsidiary" shall mean any corporation of which more than 50% of
the outstanding capital stock having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether or not at
the time capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency) is at the
time directly or indirectly owned by the Company, by the Company and one or more
other Subsidiaries, or by one or more other Subsidiaries.
(w) "The Blackstone Group" shall mean Blackstone Capital Partners III
Merchant Banking Fund L.P., Blackstone Family Investment Partners III L.P.,
Blackstone Offshore Capital Partners III L.P. and each of their affiliates.
2. TERM AND BENEFITS
This Agreement shall be in effect for three years from the date hereof
(the "Term"); provided, that the Term will be automatically renewed for
successive two (2) year periods thereafter unless at least twelve (12) months
advance written notice that the Term shall not be renewed is given by either
party to the other party hereto prior to the commencement of the next succeeding
two (2) year period. During the Term, Executive agrees to devote Executive's
full business time and attention to the business and affairs of the Company and
to use Executive's best efforts, skills and abilities to promote its interests.
Notwithstanding the foregoing, if a Change in Control of the Company should
occur while Executive is still an employee of the Company and while this
Agreement is in effect, then this Agreement shall continue in effect from the
date of such Change in Control of the Company for a period of not less than two
years.
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In the event of Executive's retirement, at Executive's election in
accordance with the Company's generally applicable retirement policies, as in
effect from time to time, this Agreement shall automatically terminate, without
additional notice to Executive, as of the effective date of Executive's
retirement.
3. TERMINATION PRIOR TO CHANGE IN CONTROL
(a) Compensation Prior to a Change in Control. In the event Executive
is terminated prior to a Change in Control either by the Company without Cause
or by the Executive for Good Reason, Executive shall be entitled to receive
(unless such termination constitutes a Qualifying Termination, in which case the
Executive shall be entitled to receive the payments and benefits provided in
Section 4):
(i) a continuation of the payment, in accordance with the
Company's generally applicable payroll practices, of Executive's annual
base salary ("Base Salary") as of the Executive's Date of Termination, for
a period of one (1) year after Executive's Date of Termination ("Salary
Continuation Period");
(ii) continuation of Executive's and Executive's eligible
dependents' existing participation at regular employee rates, in effect
from time to time, in all of the Company's medical, dental, vision and
group life plans or other welfare benefit programs in which Executive was
participating immediately prior to Executive's Date of Termination until
the earlier of (A) the end of the Salary Continuation Period (after which
time Executive and Executive's eligible dependents will be eligible for
coverage under COBRA) or (B) the date that Executive and Executive's
eligible dependents commence coverage under benefit plans of a new
employer. In the event that Executive's continued participation in any such
plan or program is prohibited by applicable laws, the Company shall
arrange, upon comparable terms, to provide Executive with benefits
substantially equivalent, on an after-tax basis, to those which Executive
and Executive's eligible dependents are, or become, entitled to receive
under such plans and programs, until the earlier of the occurrence of (A)
or (B), above;
(iii) when payments are made, payment in cash of any pro-rata
portion (through Executive's Date of Termination) of Executive's target
annual incentive compensation for the year in which the Date of Termination
occurred;
(iv) payment in cash of any incentive compensation earned by
Executive for any prior years for which Executive has not yet received
payment;
(v) for one (1) year after Executive's Date of Termination,
outplacement services historically offered to displaced employees by the
Company under substantially the same terms and fee structure as is
consistent with an employee in Executive's position; and
(vi) payment in cash of an amount equal to the value of all
unused, earned and accrued vacation as of Executive's Date of Termination.
However, in the event Executive's employment with the Company is terminated
prior to
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a Change in Control of the Company and such termination is not a Qualifying
Termination or a termination without Cause or a resignation for Good Reason
(including, without limitation, termination by reason of Executive's voluntary
termination, retirement, death, or Disability, or the termination of Executive's
employment for Cause), Executive shall not be entitled to receive any benefits
under this Agreement.
(b) Competitive Activity. If prior to a Change in Control of the
Company, Executive's employment is either terminated by the Executive without
Good Reason or by the Company for Cause, then:
(i) during the six (6) month period following Executive's Date of
Termination (the "NonCompete Period"), Executive shall not engage in any
Competitive Activity; provided, Executive shall not be subject to the
foregoing obligation if the Company breaches a material provision of this
Agreement. If Executive chooses to engage in any Competitive Activity
during the NonCompete Period, the Company shall be entitled to recover (in
addition to any other available remedies), any benefits paid to Executive
under this Agreement. For purposes of this Agreement, "Competitive
Activity" shall mean (A) Executive's participation, without the written
consent of the Chief Executive Officer of the Company, in the management
of, or (B) Executive's acquisition of a financial interest (that is other
than insignificant or de minimis) in, any business operation of any
enterprise if such operation (a "Competitive Operation") engages in
substantial and direct competition with any business operation actively
conducted by the Company or its divisions and Subsidiaries on Executive's
Date of Termination. For purposes of this Agreement, a business operation
shall be considered a Competitive Operation if such business sells a
competitive product or service which constitutes (I) at least 15% of that
business's total sales or (II) at least 15% of the total sales of any
individual Subsidiary or division of that business and, in either event,
the Company's sales of a competitive product or service constitutes at
least 15% of the total sales of the Company or at least 15% of the total
sales of any individual Subsidiary or division of the Company. Competitive
Activity shall not include the mere ownership of one percent or less of the
voting securities of any publicly traded enterprise; or
(ii) during the two (2) year period following Executive's Date of
Termination, Executive shall not, without the written consent of the Chief
Executive Officer of the Company, on Executive's own behalf or on behalf of
any person, firm or company, directly or indirectly, solicit or offer
employment to any person who has been employed by the Company, its
Subsidiaries, or The Blackstone Group in an executive or management
capacity at any time during the 12 months immediately preceding such
solicitation.
(c) Release. Upon request by the Company, Executive agrees, as a
condition to receiving the payments and benefits hereunder, to execute and
deliver a release of the Company, its Subsidiaries, affiliated entities,
directors, officers, employees and shareholders in form and substance reasonably
satisfactory to the Company, further effectuating the release set forth herein.
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4. TERMINATION FOLLOWING CHANGE IN CONTROL
(a) Qualifying Termination. If Executive's termination is a Qualifying
Termination, Executive shall be entitled to receive the payments and benefits
provided in this Section 4.
(b) Compensation Upon Termination After a Change in Control.
(i) The Company shall pay to Executive, as severance pay (and
without regard to the provisions of any other employee benefit or incentive
plan), in a lump sum cash payment, not later than on the tenth (10th)
business day following Executive's Date of Termination, an amount equal to
the sum of (A) the product of two times the sum of (I) the higher of
Executive's Base Salary on the Date of Termination or Executive's Base
Salary as in effect immediately prior to the Change in Control of the
Company, plus (II) the higher of Executive's annual target bonus on the
Date of Termination or Executive's annual target bonus as in effect
immediately prior to the Change in Control of the Company under any annual
incentive compensation plan maintained by the Company at such times, and
(B) a pro rata amount of the target bonus under any annual incentive
compensation plan of the Company for the fiscal year in which Executive's
Date of Termination occurs.
(ii) In addition to the payments required by the preceding
Section 4(b)(i), the Company shall:
(A) provide for continuation of Executive's and Executive's
eligible dependents' existing participation at the regular employee
rates, as in effect from time to time, in all of the Company's
medical, dental, vision and group life plans or other welfare benefit
programs in which Executive was participating immediately prior to
Executive's Date of Termination until the earlier of (A) 24 months
from Executive's Date of Termination (after which time Executive and
Executive's eligible dependents will be eligible for coverage under
COBRA) or (B) the date that Executive and Executive's eligible
dependents commence coverage under benefits plans of a new employer.
In the event that Executive's continued participation in any such plan
or program is prohibited by applicable laws, the Company shall
arrange, upon comparable terms, to provide Executive with benefits
substantially equivalent, on an after-tax basis, to those which
Executive and Executive's eligible dependents are, or become, entitled
to receive under such plans and programs, until the earlier of the
occurrence of (A) or (B) above;
(B) provide for full payment in cash of any unpaid
performance unit/share awards in existence on Executive's Date of
Termination (such awards shall vest in accordance with the applicable
employee plans);
(C) provide for payment in cash of any incentive
compensation earned by Executive for any prior years for which
Executive has not yet received payment;
(D) for one (1) year after Executive's Date of Termination,
provide and pay for outplacement services that have historically been
offered to displaced
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employees generally by the Company under substantially the same terms
and fee structure as is consistent with an employee in Executive's
then current position (or, if higher, Executive's position immediately
prior to the Change in Control of the Company); and
(E) pay to Executive an amount equal to the value of all
unused, earned and accrued vacation as of Executive's Date of
Termination pursuant to the Company's policies in effect immediately
prior to the Change in Control of the Company.
(iii) Unless otherwise provided in this Agreement or in the
applicable compensation or stock option plan or program, all payments shall
be made to Executive within ten (10) business days after Executive's Date
of Termination. These benefits are in addition to all accrued and vested
benefits to which Executive is entitled to under any of the Company's plans
and arrangements, including but not limited to, the accrued vested benefits
to which Executive is eligible for and entitled to receive under any of the
Company's qualified and non-qualified benefit or retirement plans, or any
successor plans in effect on Executive's Date of Termination.
(iv) In addition to the foregoing and notwithstanding any
provision in any Company stock plan or option agreement to the contrary, in
the event of a Change in Control of the Company, all stock options and
other equity awards held by Executive as of the date thereof shall
immediately vest and become exercisable (time vesting options shall fully
vest and performance vesting options shall vest if and only if the
applicable performance goals have been satisfied).
(c) Competitive Activity. If after a Change in Control of the Company,
Executive's employment is either terminated by the Executive without Good Reason
or by the Company for Cause, then:
(i) during the NonCompete Period, Executive shall not engage in
any Competitive Activity; provided, Executive shall not be subject to the
foregoing obligation if the Company breaches a material provision of this
Agreement. If Executive chooses to engage in any Competitive Activity
during the NonCompete Period, the Company shall be entitled to recover (in
addition to any other available remedies), any benefits paid to Executive
under this Agreement.
(ii) during the two (2) year period following Executive's Date of
Termination, Executive shall not, without the written consent of the Chief
Executive Officer of the Company, on Executive's own behalf or on behalf of
any person, firm or company, directly or indirectly, solicit or offer
employment to any person who has been employed by the Company, its
Subsidiaries, or The Blackstone Group in an executive or management
capacity at any time during the 12 months immediately preceding such
solicitation.
(d) Notice of Termination. Except as provided in Section 6(a), any
termination of Executive's employment following a Change in Control of the
Company shall be communicated by written Notice of Termination to the other
party hereto. No termination shall
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be effective without such Notice of Termination.
5. ADDITIONAL PAYMENTS BY THE COMPANY
(a) Notwithstanding anything to the contrary in this Agreement, in the
event that any payment or distribution by the Company to or for Executive's
benefit, whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise (a "Payment"), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest or penalties, are hereinafter
collectively referred to as the "Excise Tax"), the Company shall pay to
Executive an additional payment (a "Gross-up Payment") in an amount such that
after payment by Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income,
employment and Excise Tax imposed on any Gross-up Payment, Executive retains an
amount of the Gross-up Payment equal to the Excise Tax imposed upon the
Payments. An independent, nationally recognized accounting firm (the "Accounting
Firm"), shall determine whether and when a Gross-up Payment is required and the
amount of the Gross-up Payment. The Company shall pay all expenses associated
with these determinations.
(b) All fees and expenses of the Accounting Firm shall be borne solely
by the Company. Any Gross-Up Payment, as determined pursuant to this Section 5,
shall be paid by the Company to Executive (or to the appropriate taxing
authority on Executive's behalf) when due. If the Accounting Firm determines
that no Excise Tax is payable by Executive, it shall so indicate to Executive in
writing. Any determination by the Accounting Firm shall be binding upon the
Company and Executive. As a result of the uncertainty in the application of
Section 4999 of the Code, it is possible that the amount of the Gross-Up Payment
determined by the Accounting Firm to be due to (or on behalf of) Executive was
lower than the amount actually due ("Underpayment"). In the event that the
Company exhausts its remedies pursuant to Section 5(c) and Executive thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Executive.
(c) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of any Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after Executive is informed in
writing 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 thirty 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 any
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, (iii) cooperate with the Company in good
faith in order to effectively contest such claim and (iv) permit the Company to
participate in any proceedings relating to such claim; provided, however, that
the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred
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in connection with such contest and shall indemnify and hold Executive harmless,
on an after-tax basis, for 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 expenses. Without limitation on the foregoing provisions of
this Section 5(c), 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 sue 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; provided, further, that if the Company directs Executive to pay such
claim and sue for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify and hold 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; provided,
further, that if Executive is required to extend the statute of limitations to
enable the Company to contest such claim, Executive may limit this extension
solely to such contested amount. 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 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 receipt by Executive of an amount paid or advanced
by the Company pursuant to this Section 5, Executive receives any refund with
respect to a Gross-Up Payment, Executive shall, subject to the Company's
complying with the requirements of Section 5(c), promptly pay to the Company the
amount of such refund received (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Executive of
an amount advanced by the Company pursuant to Section 5(c), a determination is
made that Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty days after 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 the Gross-Up Payment required to be paid.
6. MISCELLANEOUS
(a) Assumption of Agreement. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization,
share exchange or otherwise) to all or substantially all of the securities,
business and/or assets of the Company, by agreement in form and substance
reasonably satisfactory to Executive, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of a material provision of this Agreement and shall
entitle Executive to compensation in the same amount and on the same terms as
Executive would be entitled pursuant to Section 4, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed Executive's Date of Termination without a Notice of
Termination being given.
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(b) Confidentiality. All Confidential Information which Executive
acquires or has acquired in connection with or as a result of the performance of
services for the Company, whether under this Agreement or prior to the effective
date of this Agreement, shall be kept secret and confidential by Executive
unless (a) the Company otherwise consents or (b) Executive is legally required
to disclose such Confidential Information by a court of competent jurisdiction.
This covenant of confidentiality shall extend beyond the Term of this Agreement
and shall survive the termination of this Agreement for any reason. If Executive
breaches this covenant of confidentiality, the Company shall be entitled to
recover from any benefits paid to Executive under this Agreement its damages
resulting from such breach.
(c) Employment. Executive agrees to be bound by the terms and
conditions of this Agreement. However, nothing contained in this Agreement shall
impair or interfere in any way with the right of the Company to terminate
Executive's employment prior to or after a Change in Control of the Company,
subject to the terms of this Agreement.
(d) Injunctive Relief. Executive acknowledges and agrees that the
remedy of the Company at law for any breach of the covenants and agreements
contained in Sections 6(b), 3(b) or 4(c) will be inadequate, and that the
Company will be entitled to injunctive relief against any such breach or any
threatened, imminent, probable or possible breach. Executive represents and
agrees that such injunctive relief shall not prohibit Executive from earning a
livelihood acceptable to Executive.
(e) Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth below, provided that all notices to the Company shall be directed to
the attention of the General Counsel of the Company, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
Premcor Inc. (Executive Name)
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8182 Maryland Avenue Address
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Suite 600 City, State Zip
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St. Louis, Missouri 63105-3721
Attention: General Counsel
(f) Further Assurances. Each party hereto agrees to furnish and
execute such additional forms and documents, and to take such further action, as
shall be reasonably and customarily required in connection with the performance
of this Agreement or the payment of benefits hereunder.
(g) Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Executive and, on behalf of the Company, such officer(s) as
may be specifically designated by the Board. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express
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or implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
(h) Termination of other Agreements; Entire Agreement. Upon execution
by both parties, this Agreement shall terminate all prior employment and
severance agreements between Executive and the Company and its divisions or
Subsidiaries, and this Agreement shall constitute the entire agreement between
the parties, except as expressly provided herein, concerning the effect of a
Change in Control on the employment relationship between the Company and
Executive.
(i) Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
(j) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
(k) Mitigation. Executive shall not be required to mitigate the amount
of any payment provided for in Section 3 or 4 of this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
such Sections be reduced by any compensation earned by Executive as the result
of employment by another employer after Executive's Date of Termination, or
otherwise. Except as provided in the Agreement, the Company shall have no right
to set off against any amount owing hereunder any claim which it may have
against Executive.
(l) Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Missouri, without regard to conflicts of laws
principles.
(m) Agreement Binding on Successors. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive should die while any accrued but unpaid amounts would still be payable
to Executive hereunder if Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to Executive's devisee, legatee, or other designee or, if there
be no such designee, to Executive's estate.
(n) Headings. All headings are inserted for convenience only and shall
not affect any construction or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PREMCOR INC.
By:
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Title:
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Name:
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EXECUTIVE:
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Name:
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Title:
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