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EXHIBIT 15
AGREEMENT
THIS AGREEMENT made as of the 30th day of June, 1997, by and
between Pennzoil Company, a Delaware corporation (hereinafter called the
"Company"), and Xxxxx X. Xxxxxxx (hereinafter called "Employee");
W I T N E S S E T H:
WHEREAS, the Company desires to enter into an arrangement with
the Employee to provide certain medical and retirement benefits as additional
compensation for past and future services rendered and to be rendered by
Employee to the Company; and
WHEREAS, Employee desires to enter into an arrangement with
the Company to provide certain medical and retirement benefits as additional
compensation for past and future services rendered and to be rendered by
Employee to the Company;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter contained, the parties hereto agree as follows:
1. Change in Control: For purposes of this Agreement, a
Change in Control of the Company shall conclusively be deemed to have occurred
(i) if the Board of Directors of the Company 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 (ii) 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
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prerequisites to benefits or otherwise, by resolution of the Board of Directors
adopted not more than 60 days prior to the occurrence of such event. The
Effective Date of a Change in Control shall be (x) in the case of such a Change
in Control described as specified in clause (i) of the preceding sentence, the
date (not more than 30 days prior to the date on which the Board of Directors
makes the determination) the Board of Directors determines as the date on which
the Change in Control has occurred, or (y) in the case of such a Change in
Control determined as specified in clause (ii) of the preceding sentence, the
date of occurrence of the event specified by the Board of Directors as
constituting such Change in Control.
2. Disability: For purposes of this Agreement,
"Disability" shall have the meaning set forth in the Company's Supplemental
Long Term Disability Plan.
3. Termination of Employment:
(a) By the Company for Due Cause. If Employee is
terminated by the Company for Due Cause, he shall be entitled to no
benefits under this Agreement. The term "Due Cause" as used herein,
shall mean (x) Employee has committed a willful serious act, such as
embezzlement, against the Company intending to enrich himself at the
expense of the Company or has been convicted of a felony involving
moral turpitude or (y) Employee, in carrying out his duties hereunder,
has been guilty of (i) willful, gross neglect or (ii) willful, gross
misconduct resulting in either case in material harm to the Company;
provided, in any event, Employee shall be given written notice by a
majority of the Board of Directors of the Company that it intends to
terminate the Employee's employment for Due Cause under this Paragraph
3(a), which notice shall specify the act, or acts, on the basis of
which the majority
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of the Board of Directors of the Company intends so to terminate
Employee's employment, and Employee shall then be given the
opportunity, within fifteen days of his receipt of such notice, to
have a meeting with the Board of Directors of the Company to discuss
such act, or acts. If the basis of such written notice is an act, or
acts, other than an act, or acts, described in clause (i), above, the
employee shall be given seven days after such meeting within which to
cease, or correct, the performance (or nonperformance) giving rise to
such written notice, and upon failure of Employee within such seven
days to cease, or correct, such performance (or nonperformance), the
Employee's employment by the Company shall automatically be terminated
hereunder for Due Cause.
(b) By Death or Disability. In the event of the Death of
Employee or Disability while employed by the Company, Employee shall
be entitled to receive supplemental retirement benefits provided in
Paragraph 4 and the additional medical benefits provided in Paragraph
5.
(c) Voluntarily By Employee. If Employee terminates his
employment voluntarily and without Good Reason and prior to the
Effective Date of a Change in Control, he shall be entitled to no
benefits under this Agreement.
(d) By Company Other Than For Due Cause. If Employee's
employment with the Company is terminated by the Company for any
reason other than as provided in Paragraph 3(a) hereof, the Company
shall provide to Employee supplemental retirement benefits provided in
Paragraph 4 and the additional medical benefits provided in Paragraph
5.
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(e) By Employee For Good Reason. If the Company: (i)
demotes the Employee to a lesser position than he occupies as of the
date of the Agreement; (ii) causes a material change in the nature or
scope of the authorities, powers, functions, duties, or
responsibilities attached to the Employee's position as provided in
clause (i); (iii) decreases the Employee's salary below the level
provided as of the date of this Agreement or if greater the level
provided at any subsequent date; or (iv) materially reduces the
Employee's benefits under any employee benefit plan, program, or
arrangement of the Company (other than a change that affects all
employees similarly situated) from the level in effect upon the date
of this Agreement, then, such action (or inaction) by the Company,
unless consented to in writing by Employee, shall constitute a
termination of Employee's employment by the Company pursuant to
Paragraph 3(d).
(f) Following Change In Control of the Company. If
Employee's employment is terminated following the Effective Date of a
Change in Control of the Company for reasons other than Death,
Disability or Due Cause, such termination shall be treated as a
termination of employment by Company pursuant to Paragraph 3(d).
(g) Effect on Agreement. Termination of employment shall
not constitute termination of this Agreement.
4. Retirement Benefits: The employee shall be entitled
to supplemental retirement benefits, payable at such time or times as benefits
are received under the Company's tax qualified defined benefit plan, determined
as the excess of (i) the benefit to which he would have been entitled if his
active service with the Company under the Company's tax qualified defined
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benefit plan and excess benefit arrangement between Employee and the Company,
as in effect on the date hereof but taking into account any benefit
improvements hereafter, had continued until age 55, assuming that (x) his
salary in effect on the date immediately prior to a Change in Control, or if
higher, that in effect at any later date, plus a 5% increase for each 12 months
following termination of employment, had continued uninterrupted until age 55
and (y) that he received in each calendar year, including the calendar year of
termination, a bonus equal to the greater of (A) his highest annual incentive
bonus earned during the 12 months preceding termination of employment or (B)
the highest annual incentive bonus earned by the Employee in the three-year
period preceding a Change in Control over (ii) the benefit he actually receives
from such tax qualified defined benefit plan and the excess benefit arrangement
between Employee and the Company.
5. Medical Benefits: The Company shall provide to
Employee additional medical benefits and medical benefits coverages following
termination of employment on terms and conditions and at benefit levels
(including any required employer contributions) no less favorable than those
applicable to Employee as of the date hereof for the period prior to his
attainment of age 55 and thereafter no less favorable than those provided as of
the date hereof to retired executives of the Company with more than 20 years of
service (disregarding any benefits provided a retired Company employee under a
Deferred Compensation Agreement). This medical benefit coverage shall include
spouse and dependent coverage both during and after the life of Employee.
6. No Offsets: The benefits provided under Paragraphs 4
and 5 hereunder shall not be subject to an offset or reduction by reason of any
benefits or payments made by or under any other Company plan, program, practice
or arrangement or a plan, program, practice or arrangement
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maintained by any other employer or otherwise, except for actual medical
benefits, denominated as such, provided by the Company.
7. Prohibition Against Assignment: The right of
Employee to benefits under this Agreement shall not be assigned, transferred,
pledged or encumbered in any way and any attempt at assignment, transfer,
pledge, encumbrance or other disposition of such benefits shall be null and
void and without effect.
8. Binding Effect: This Agreement shall be binding upon
and enure to the benefit of the Company, its successors and assigns, and
Employee, his heirs, executors, administrators and legal representatives.
9. Governing Law: This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas.
10. Severability: The invalidity or unenforceability of
any provision hereof shall in no way affect the validity or enforceability of
any other provision.
11. Amendment or Termination: This Agreement may be
amended only by mutual consent of the parties hereto evidenced in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement
(in multiple copies).
PENNZOIL COMPANY
/s/ XXXXX X. XXXXXXX By /s/ XXXXX X. XXXX
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Xxxxx X. Xxxxxxx Xxxxx X. Xxxx
Chairman of the Board
Chief Executive Officer
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