Exhibit 10.1
 

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May 15, 2017

Samuel J. Mitchell, Jr.
300 Culpepper Road
Lexington, KY 40502

Dear Sam:

RE: Change in Control Agreement

Valvoline Inc. (“Valvoline”) considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing the best
interests of the Company (as defined below) and its shareholders. In this
regard, the Company recognizes that, as is the case with many publicly-held
corporations, the possibility of a Change in Control of the Company (as defined
below) does exist and that such possibility, and the uncertainty and questions
which a Change in Control of the Company may raise among management, may result
in the departure or distraction of management personnel to the detriment of the
Company and its shareholders. In addition, difficulties in attracting and
retaining new senior management personnel may be experienced. Accordingly, on
the basis of the recommendation of the Compensation Committee of the Board (as
defined below), the Board has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of certain
members of the Company's management, including you, to their assigned duties
without distraction in the face of the potentially disruptive circumstances
arising from the possibility of a Change in Control of the Company.

In order to encourage you to remain in the employ of the Company, this Agreement
sets forth those benefits which the Company will provide to you in the event
your employment with the Company terminates after or as a result of a Change in
Control of the Company under the circumstances specified in this Agreement.

SECTION A. DEFINITIONS

1.                 "Agreement" shall mean this letter agreement, which is a
complete, entire and immediate substitute for any prior agreement you may have
had with the Company addressing the benefits you would receive in the event of
your termination from employment with the Company as a result of a Change in
Control of the Company, including your Change in Control Agreement with Ashland
Inc. dated October 12, 2015.

2.                 "Board" shall mean the Company's Board of Directors.

3.                 "Cause" shall occur hereunder only upon:

(a)       the willful and continued failure by you to substantially perform your
duties with the Company (other than any such failure resulting from your
incapacity due to
 
 

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physical or mental illness or injury) after a written demand for substantial
performance is delivered to you by the Board which specifically identifies the
manner in which the Board believes that you have not substantially performed
your duties;
 
(b)     the willful engaging by you in gross misconduct materially and
demonstrably injurious to the Company after a written demand to cease such
misconduct is delivered to you by the Board; or

(c)     your conviction of or the entering of a plea of nolo contendre to the
commission of a felony involving moral turpitude.

For purposes of this paragraph 3, no act, or failure to act, on your part shall
be considered "willful" unless done, or omitted to be done, by you not in good
faith and without reasonable belief that your action or omission was in the best
interest of the Company. Notwithstanding the foregoing, you shall not be deemed
to have been terminated for Cause unless and until there shall have been
delivered to you 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 called and held for such purpose, alone or in conjunction with any
other purpose, (after at least 20 days prior notice to you and an opportunity
for you, together with your counsel, to be heard before the Board), finding that
in the good faith opinion of the Board you failed to perform your duties or
engaged in misconduct as set forth above in subparagraph (a) or (b) of this
paragraph, and that you did not correct such failure or cease such misconduct
after being requested to do so by the Board, or as set forth in subparagraph (c)
of this paragraph, finding that you have been convicted of or have entered a
plea of nolo contendre to the commission of a felony involving moral turpitude.

4.                "Change in Control of the Company" shall be deemed to have
occurred if:

(a)     there shall be consummated:

(i)       any consolidation or merger of the Company (a "Business Combination"),
other than a consolidation or merger of the Company into or with a direct or
indirect wholly-owned subsidiary, in which the shareholders of the Company own,
directly or indirectly, less than 50% of the then outstanding shares of common
stock of the Business Combination that are entitled to vote generally for the
election of directors of the Business Combination or pursuant to which shares of
the Company's Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's Common Stock immediately prior to the merger have substantially the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger; or

(ii)      any sale, lease, exchange or transfer (in one transaction or a series
of related transactions) of all or substantially all the assets of the Company,
provided, however, that no sale, lease, exchange or other transfer of all or
 
 
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substantially all the assets of the Company shall be deemed to occur unless
assets constituting 80% of the total assets of the Company are transferred
pursuant to such sale, lease, exchange or other transfer;
 
(b)     the shareholders of the Company shall approve any plan or proposal for
the liquidation or dissolution of the Company;

(c)     any Person, other than the Company or a Subsidiary thereof or any
employee benefit plan sponsored by the Company or a Subsidiary thereof, shall
become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of securities of the Company representing 20% or more of the combined
voting power of the Company's then outstanding securities ordinarily (and apart
from rights accruing in special circumstances) having the right to vote in the
election of directors, as a result of a tender or exchange offer, open market
purchases, privately-negotiated purchases or otherwise, without the approval of
the Board; or

(d)     at any time during a period of two (2) consecutive years, individuals
who at the beginning of such period constituted the Board 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 of each new director
during such two-year 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
two-year period.

(e)     Notwithstanding the foregoing, a “Change in Control of the Company”
shall not be deemed to have occurred by virtue of:

(i)                the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the Common Stock
of the Company immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions;

(ii)              the repurchase by the Company of outstanding shares of Common
Stock or other securities pursuant to a tender or exchange offer; or

(iii)            the consummation of the transaction, or series of transactions,
initially approved in principle by the Ashland Inc. Board of Directors on
September 16, 2015, intended to separate the Valvoline business from Ashland
Inc.’s specialty chemicals business and create two independent, publicly traded
companies. 

5.               "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act, as amended.
 
 
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6.               "Common Stock" shall mean the common stock, par value $.01 per
share, of the Company.

7.               "Company" shall mean Valvoline and any successor to its
business and/or assets which executes and delivers the agreement provided for in
Section D, paragraph 1 hereof or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.

8.               "Competitive Activity" shall have the meaning as set forth in
Section C, paragraph 4.

9.               "Competitive Operation" shall have the meaning as set forth in
Section C, paragraph 4.

10.           "Confidential Information" shall mean 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.

11.          "Cutback" shall have the meaning as set forth in Section D,
paragraph 18.

12.          "Date of Termination" shall mean:

(a)     if this Agreement is terminated for Disability, thirty (30) days after
the Notice of Termination is given by the Company to you (provided that you
shall not have returned to the performance of your duties on a full-time basis
during such thirty (30) day period);

(b)     if your employment is terminated for Good Reason by you, the date
specified in the Notice of Termination you provide to the Company, which must be
no more than 90 days after the date on which notice of your intent to terminate
your employment for Good Reason is provided to the Company, as provided in
Section A paragraph 15, and Section C, paragraph 2(b) herein; or

(c)     if your employment is terminated for any other reason, the date on which
a Notice of Termination is received by you unless a later date is specified.

For purposes of applying the provisions of this paragraph 12, except in the case
of Disability, your employment is terminated when you stop performing active
service for the Company, which shall be deemed to occur when it is reasonably
anticipated that your services to the Company will permanently decrease to 20%
or less of the average amount of services you performed for the Company during
the immediately preceding 36 month period (or your total employment if less than
36 months).
 
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13.          "Disability" shall occur when: if, as a result of your incapacity
due to physical or mental illness or injury, you shall have been absent from
your duties with the Company for six (6) consecutive months and shall not have
returned to full-time performance of your duties within thirty (30) days after
written notice is given to you by the Company.

14.          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

15.          "Good Reason" shall mean the occurrence of any of the following
without your express written consent:

 (a)            a significant diminution of your positions, duties,
responsibilities or status with the Company as in effect immediately prior to a
Change in Control of the Company, or a diminution in your titles or offices as
in effect immediately prior to a Change in Control of the Company or any removal
of you from, or any failure to reelect you to, any of such positions following a
Change in Control of the Company;

 (b)            a reduction of fifteen (15) percent or more to your base salary
in effect immediately prior to a Change in Control of the Company;

 (c)            the failure by the Company to continue in effect any incentive
plan or arrangement (including without limitation, the Company's Incentive
Compensation plan, annual bonus and contingent bonus arrangements and credits
and the right to receive performance awards and similar incentive compensation
benefits) in which you are participating at the time of a Change in Control of
the Company (or to substitute and continue other plans or arrangements providing
you with substantially similar benefits), except as otherwise required by the
terms of such plans as in effect at the time of any Change in Control of the
Company, or the taking of any action by the Company which would adversely affect
your participation in or materially reduce your benefits under any such plan;

(d)            the failure by the Company to continue in effect any plan or
arrangement to receive securities of the Company (including, without limitation,
any plan or arrangement to receive and exercise stock options, stock
appreciation rights, restricted stock or grants thereof or to acquire stock or
other securities of the Company) in which you are participating at the time of a
Change in Control of the Company (or to substitute and continue plans or
arrangements providing you with substantially similar benefits), except as
otherwise required by the terms of such plans as in effect at the time of any
Change in Control of the Company; or the taking of any action by the Company
which would adversely affect your participation in or materially reduce your
benefits under any such plan;

(e)            the relocation after a Change in Control of the Company of your
principal place of business to a location that exceeds a 50 mile radius from
your principal place of business before the Change in Control of the Company,
except for required travel on
 
 
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the Company's business to an extent substantially consistent with your business
travel obligations as of immediately prior to such Change in Control of the
Company;
 
(f)              any breach by the Company of any material provision of this
Agreement; or

(g)            any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company as described in Section D,
paragraph 1.

Provided that the Company and Employee agree that Good Reason shall not exist
unless and until Employee provides the Company with written notice of the act(s)
alleged to constitute Good Reason within ninety (90) days of Employee's
knowledge of the occurrence of such act(s), as provided under Section C,
paragraph 2(a) herein, and the Company fails to cure such acts within thirty
(30) days of receipt of such notice. Further, if the Company fails to cure such
act(s) within this thirty (30) day period, then Employee must exercise the right
to terminate Employee’s employment for Good Reason within sixty (60) days
thereafter, in order for the termination to be for Good Reason.

16.           "Notice of Good Reason" shall mean a written notice which shall
indicate the specific  provision(s) in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of your employment for “Good Reason” under the
provision(s) so indicated.

17.           "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 your employment under the provision so
indicated. For purposes of applying the provisions of this paragraph 17, the
determination of when your employment is terminated shall be made consistent
with the Section 409A Provisions and the provisions of Section A, paragraph 12.

18.           "Person" shall have the meaning as set forth in the Sections 13(d)
and 14(d)(2) of the Exchange Act.

19.           "Qualifying Termination" shall mean the termination of your
employment after a Change in Control of the Company while this Agreement is in
effect, unless such termination is (a) by reason of your death or Disability,
(b) by the Company for Cause, or (c) by you other than for Good Reason.

20.           "Section 409A Provisions" shall mean those statutory provisions of
the Internal Revenue Code of 1986 (as amended) contained in §409A thereof and
the guidance promulgated by the U.S. Department of Treasury or any subdivision
thereof interpreting §409A.

21.           "Subsidiary" shall mean any corporation of which more than 20% of
the outstanding capital stock having ordinary voting power to elect a majority
of the board of
 
 
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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.
 
SECTION B. TERM AND BENEFITS

This Agreement shall be in effect for two (2) years from the date you accept
this Agreement and shall automatically renew for successive one (1) year periods
on the first day of each month. This Agreement may be terminated by either party
provided that at least fifteen (15) days advance written notice is given by
either party to the other party hereto prior to the commencement of the next
succeeding one (1) year period, in which case the Agreement shall terminate at
the end of such next succeeding one (1) year period. During the term of
employment hereunder, you agree to devote your full business time and attention
to the business and affairs of the Company and to use your best efforts, skills
and abilities to promote its interests.

This Agreement shall automatically terminate, without additional notice, in the
event of your death, Disability, or upon the effective date of your retirement
in the event you retire at your election or in accordance with the Company's
generally applicable retirement policies, as in effect from time to time.
Notwithstanding the first sentence of this paragraph and the first and second
sentences of this Section B, if a Change in Control of the Company should occur
while you are 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 two years. No benefits shall be
payable hereunder unless there shall have been a Change in Control of the
Company and your employment by the Company shall thereafter terminate in
accordance with Section C hereof.

SECTION C. TERMINATION FOLLOWING CHANGE IN CONTROL

1.               Qualifying Termination. If your termination is a Qualifying
Termination, you shall be entitled to receive the payments and benefits provided
in this Section.

2.               Required Notices.

(a)            Notice of Good Reason. Notice of Good Reason following a Change
in Control of the Company, as provided for in Section A, paragraphs 15 and 16,
shall be communicated by written Notice of Good Reason to the Company within the
time limits provided in Section A, paragraph 15, and shall not be effective
without such timely Notice of Good Reason.

(b)            Notice of Termination. Any termination of your 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 be
effective without such Notice of Termination.
 
 
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3.               Compensation Upon Termination After a Change in Control.

(a)            If your termination is a Qualifying Termination, then as
consideration for and subject to your obligation to abide by the provisions
contained in Section C, paragraph 4 (a) and (b) of this Agreement following a
Qualifying Termination, the Company shall pay to you as severance pay (and
without regard to the provisions of any benefit or incentive plan) an amount
equal to three (3) times the sum of (i) your highest annual base compensation
plus (ii) the highest target annual incentive compensation (expressed as a
percentage of base compensation for all applicable incentive compensation plans)
in respect of the three (3) fiscal years preceding the fiscal year in which your
Date of Termination occurs.

(b)            If your termination is a Qualifying Termination, the Company
shall, in addition to the payments required by the preceding paragraph:

(i)                provide for continuation of your and your eligible
dependents' participation at regular employee rates, in effect from time to
time, in all of the Company's medical, dental and group life plans or programs
in which you were participating immediately prior to your Date of Termination
for a period ending on the December 31 of the third calendar year following the
calendar year in which your Date of Termination occurred and any entitlement to
COBRA continuation coverage under the medical and dental plans shall run
concurrently with said period; provided, however, that said continuation of
coverage in the medical and dental plans during all or part of such period shall
be charged at the full cost for such coverage (meaning the active employee
contribution and the Company's contribution) if the charging of active employee
rates for such coverage during all or part of such period would result in a
violation of the Section 409A Provisions. In the event that your continued
participation in any such plan or program is for whatever reason impossible, the
Company shall at that time, or at the earliest time permitted that will not
trigger a tax or penalty under the Section 409A Provisions, arrange upon
comparable terms to provide you with benefits substantially equivalent on an
after-tax basis to those which you and your eligible dependents are, or become,
entitled to receive under such plans and programs;

(ii)              provide for payment in cash of any performance unit/share
awards in existence on your Date of Termination, calculated at target
performance, less any amounts paid to you under the applicable performance
unit/share plan upon a Change in Control of the Company pursuant to the
provisions of such plan;

(iii)            provide for payment in cash of any incentive compensation (a)
earned for the fiscal year during which the Change in Control of the Company
occurred and any prior fiscal years for which you have not yet received payment,
and (b) payment of the pro-rata portion (through your Date of Termination) of
any incentive compensation for the fiscal year in which your Date of Termination
 
 
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occurs calculated on the basis of the target bonus percentage of base
compensation in the applicable incentive compensation plan (or plans);
 
(iv)            provide benefits or compensation under any compensation plan,
arrangement or agreement not in existence as of the date hereof but which may be
established by the Company prior to your Date of Termination at such time as
payments are made thereunder to the same extent as if you had been a full-time
employee on the date such payments would otherwise have been made or benefits
vested;

(v)             for one (1) year after your Date of Termination, provide and pay
for outplacement services, by a firm reasonably acceptable to you, consistent
with those that have historically been offered to displaced employees generally
by the Company under substantially the same terms and fee structure (but limited
in an amount not to exceed fifteen (15) percent of your annual base compensation
for the year in which your Date of Termination occurs or fifteen (15) percent of
your annual base compensation as of immediately before the Change in Control of
the Company, if greater) as is consistent with an employee in your then current
position (or, if higher, your position immediately prior to the Change in
Control of the Company);

(vi)            for one (1) year after your Date of Termination, provide and pay
for financial planning services, by a firm reasonably acceptable to you, that
have historically been offered to you under substantially the same terms and fee
structure as is consistent with an employee in your then current position (or,
if higher, your position immediately prior to the Change in Control of the
Company);

(vii)          pay to you an amount equal to the value of all unused, earned and
accrued vacation as of your Date of Termination pursuant to the company's
policies in effect immediately prior to the Change in Control of the Company;
and

(viii)         provide for the immediate vesting of all stock options,
restricted stock, restricted stock units and stock appreciation rights held by
you, as of your Date of Termination, under any Company incentive compensation
plan or other stock option plan and stock appreciation rights plan, and all such
stock options and stock appreciation rights shall be exercisable for the
remaining terms of the said options and rights. In the event such immediate
vesting is not permitted under law or the applicable benefit plan or award
agreement, the Company shall provide a payment to you in cash of an amount equal
to the value of the equity-based compensation awards that would otherwise be
forfeited as a result of your Qualifying Termination, based on the closing price
of the Company’s stock on your Date of Termination.

Provided, that nothing in this Section C, paragraph 3(b) shall require the
continued vesting, acceleration, or payment in cash in lieu of the value of the
Performance-Based
 
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Restricted Stock Award provided to you under the Executive Performance Incentive
& Retention Program approved by the Personnel & Compensation Committee of the
Board on October 5, 2015, which is intended to be granted to you on November 18,
2015, your rights to which shall be governed exclusively by the applicable plan
as modified by the Performance-Based Restricted Stock Award agreement.
 
(c)           Unless otherwise provided in this Agreement or in the applicable
compensation or stock option plan or program, all payments shall be made to you
within thirty (30) days after your Date of Termination.  Notwithstanding the
foregoing, the amounts described in Section C, paragraphs 3(a) and 3(b)(iii)
(the aggregate amount of such payments, the “CIC Cash Severance”) shall be paid
as follows:

(i)                a portion of the CIC Cash Severance equal to your “Non-CIC
Severance Amount” (as defined below) shall be paid as follows:

(A) if the Change in Control of the Company is not considered a “change in
control event” within the meaning of the Section 409A Provisions, then such
Non-CIC Severance Amount shall be paid in accordance with the same payment
schedule that would have applied to such amount had such amount been payable
under the Company’s Non-CIC Severance Plan (as defined below); or

(B) if the Change in Control of the Company is considered a “change in control
event” within the meaning of the Section 409A Provisions, then such Non-CIC
Severance Amount shall be paid within thirty (30) days after your Date of
Termination; and

(ii)              the remainder of the CIC Cash Severance shall be paid within
thirty (30) days after your Date of Termination.

Notwithstanding the foregoing, if you are a “specified employee” as determined
under the Company’s policy for determining specified employees as of the date of
your Qualifying Termination, then a portion of the CIC Cash Severance equal to
your Non-CIC Severance Amount shall be subject to the six-month delay described
in Section D, paragraph 14.

For purposes of this Agreement,

“Non-CIC Severance Amount” means the amount of severance (if any) that you would
have been entitled to receive under the Non-CIC Severance Plan had your
termination of employment entitled you to receive severance payments under such
plan that would have been considered “deferred compensation” for purposes of the
Section 409A Provisions; and
 
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“Non-CIC Severance Plan” means the Company’s Severance Pay Plan for base salary
bands 20, EG01, EG02 and UNG, effective as of May 15, 2017, as amended from time
to time.

(d)         The benefits in this Agreement are in addition to all accrued and
vested benefits to which you are entitled under any of the Company's plans and
arrangements (to the extent accrued and vested benefits are relevant under the
particular plan or arrangement), including but not limited to, the accrued
vested benefits you are eligible 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 your Date of Termination hereunder. For these
purposes, accrued and vested benefits shall include any extra, special or
additional benefits under such qualified and nonqualified benefit or retirement
plans that become due because of the Change in Control of the Company.

(e)         You shall not be required to mitigate the amount of any payment
provided for in this Section by seeking other employment or otherwise, nor shall
the amount of any payment provided for in this Section be reduced by any
compensation earned by you as the result of employment by another employer after
your Date of Termination, or otherwise. Except as provided herein, the Company
shall have no right to set off against any amount owing hereunder any claim
which it may have against you.

4.               Certain Restrictions

(a)          Competitive Activity. In consideration of the foregoing, you agree
that if your termination from employment is a Qualifying Termination, then
during a period ending 36 months following your Date of Termination (the
“Non-Compete Period”) you shall not, directly or indirectly, engage in any
Competitive Activity. If you engage in any Competitive Activity during the
Non-Compete Period, the Company shall be entitled to recover any benefits paid
to you under paragraph 3(a) of this Section C. For purposes of this Agreement,
"Competitive Activity" shall mean your participation, without the written
consent of the General Counsel of the Company, in the management of any business
operation of any enterprise if such business 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
your Date of Termination. For purposes of this paragraph, a business operation
shall be considered a Competitive Operation if such business sells a competitive
product or service which constitutes (i) 15% of that business's total sales, or
(ii) 15% of the total sales of any individual subsidiary or division of that
business and, in either event, the Company's sales of a similar product or
service constitutes either 15% of the total sales of the Company or 15% of the
total sales of any individual Subsidiary or division of the Company.
Notwithstanding the foregoing, a “Competitive Activity” shall not include the
mere ownership of securities in any enterprise, or participation in the
management of any enterprise or any business operation thereof, other than in
connection with a Competitive Operation of such enterprise.
 
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(b)          Non-Solicitation and Non-Interference. In consideration of the
foregoing, you agree that if your termination from employment is a Qualifying
Termination, then during a period ending 36 months following your Date of
Termination (the “Non-Solicitation and Non-Interference Period”) you shall not,
without the prior written consent of the General Counsel of the Company,
directly or indirectly:

(i)               solicit for employment (which shall include services as an
employee, independent contractor or in any other like capacity) any person
employed by the Company or its affiliated companies as of the date of such
solicitation; or

(ii)              solicit any customer or other person with a business
relationship with the Company or any of its affiliated companies to terminate,
curtail or otherwise limit such business relationship; or

(iii)            in any other manner interfere in the business relationship the
Company or any of its affiliated companies have with any customer or any third
party service provider or other vendor.

If you engage in any such solicitation or interference during the
Non-Solicitation and Non-Interference Period, the Company shall be entitled to
recover any and all amounts paid to you under paragraph 3(a) of this Section C.

(c)           Injunctive Relief. In the event of a breach or threatened breach
of this paragraph 4 of this Section C, each party agrees that the non-breaching
party shall be entitled to injunctive relief in a court of appropriate
jurisdiction to remedy any such breach or threatened breach, the parties
acknowledging that damages would be inadequate and insufficient.

SECTION D. MISCELLANEOUS

1.               Assumption of Agreement. The Company will require any successor
in interest: (a) to all or substantially all of the business and/or assets of
the Company (whether direct or indirect, by purchase, merger, consolidation,
share exchange or otherwise); or (b) to any portion of the business or assets of
the Company to which your services relate, as a result of the creation of an
independent company through the sale or distribution of new shares of an
existing business or other unit of the Company; in each case, by agreement in
form and substance satisfactory to you, 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.

2.               Confidentiality. All Confidential Information which you acquire
or have acquired in connection with or as a result of the performance of
services for the Company, whether under
 
 
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this Agreement or prior to the effective date of this Agreement, shall be kept
secret and confidential by you unless:
 
(a)         the Company otherwise consents;

(b)         the Company breaches any material provision of this Agreement, in
which case you shall be entitled to make limited disclosure of Confidential
Information only to the extent necessary to seek legal relief for such breach;

(c)          you are legally required to disclose such Confidential Information
by a court of competent jurisdiction;

(d)         you disclose such Confidential Information to the Securities and
Exchange Commission, to the extent necessary to report suspected or actual
violations of U.S. securities laws; or

(e)          your disclosure of Confidential Information is protected under the
whistleblower provisions of any other state or federal laws or regulations.

You understand that if you make a disclosure of Confidential Information that is
covered under subparagraph (d) or (e) above, you are not required to inform the
Company, in advance or otherwise, that you have made such disclosure(s), and
nothing in this Agreement shall prohibit you from maintaining the
confidentiality of a claim with a governmental agency that is responsible for
enforcing a law, or cooperating, participating or assisting in any governmental
or regulatory entity investigation or proceeding. This covenant of
confidentiality shall extend beyond the term of this Agreement and shall survive
the termination of this Agreement for any reason and shall continue for so long
as the information you have acquired remains Confidential Information. If you
breach this covenant of confidentiality, the Company shall be entitled to
recover from any benefits paid to you under this Agreement its damages resulting
from such breach.

3.               Employment. You agree to be bound by the terms and conditions
of this Agreement and to remain in the employ of the Company during any period
following any public announcement by any person of any proposed transaction or
transactions which, if effected, would result in a Change in Control of the
Company until a Change in Control of the Company has taken place. However,
nothing contained in this Agreement shall impair or interfere in any way with
the right of the Company to terminate your employment prior to a Change in
Control of the Company.

4.               Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled exclusively
by arbitration in accordance with the Center for Public Resources' Model ADR
Procedures and Practices, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, the Company shall not be restricted from seeking
equitable relief, including injunctive relief as set forth in paragraph 5 of
this Section, in the appropriate
 
 
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forum. Any cost of arbitration will be paid by the Company. In the event of a
dispute over the existence of Good Reason or Cause after a Change in Control of
the Company, the Company shall continue to pay your salary, bonuses and plan
benefits pending resolution of the dispute. If you prevail in the arbitration,
the amounts due to you under this Agreement are to be immediately paid to you.
 
5.               Injunctive Relief. You acknowledge and agree that the remedy of
the Company at law for any breach of the covenants and agreements contained in
paragraph 2 of this Section D and in Section C, paragraph 4 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. You represent
and agree that such injunctive relief shall not prohibit you from earning a
livelihood acceptable to you.

6.               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 delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement, 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.

7.               Indemnification. The Company will indemnify you to the fullest
extent permitted by the laws of the Commonwealth of Kentucky and the existing
By-laws of the Company, in respect of all your services rendered to the Company
and its divisions and Subsidiaries prior to your Date of Termination. You shall
be entitled to the protection of any insurance policies the Company now or
hereafter maintains generally for the benefit of its directors, officers and
employees (but only to the extent of the coverage afforded by the existing
provisions of such policies) to protect against all costs, charges and expenses
whatsoever incurred or sustained by you in connection with any action, suit or
proceeding to which you may be made a party by reason of your being or having
been a director, officer or employee of the Company or any of its divisions or
Subsidiaries during your employment therewith.

8.               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.

9.               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 you and 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 or
implied, with respect to the
 
 
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subject matter hereof have been made by either party, which are not set forth
expressly in this Agreement.
 
10.          Termination of other Agreements. Upon execution by both parties,
this Agreement shall terminate all prior employment and severance agreements,
between you and the Company and its divisions or Subsidiaries.

11.          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.

12.          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.

13.           Legal Fees And Expenses. Any other provision of this Agreement
notwithstanding, the Company shall pay all legal fees and expenses which you may
incur as a result of the Company's unsuccessful contesting of the validity,
enforceability or your interpretation of, or determinations under, any part of
this Agreement.

14.          Section 409A Provisions And Compliance.  The intent of the parties
is that this agreement comply with the Section 409A Provisions or is exempt
therefrom, and accordingly, to the maximum extent permitted, this Agreement
shall be interpreted to be in accordance therewith.  Notwithstanding any other
provision of this Agreement to the contrary, the parties shall in good faith
amend this Agreement to the limited extent necessary to comply with the
requirements of the Section 409A Provisions in order to ensure that any amounts
paid or payable hereunder are not subject to the additional 20% income tax
thereunder while maintaining to the maximum extent practicable the original
intent of this Agreement. With regard to any provision herein that provides for
reimbursement of costs and expenses or in-kind benefits, except as permitted by
the Section 409A Provisions: (a) the right to reimbursement or in-kind benefits
shall not be subject to liquidation or exchange for another benefit, (b) the
amount of expenses eligible for reimbursement, or in-kind benefits, provided
during any taxable year shall not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year,
and (c) such payments shall be made on or before the last business day of your
taxable year following the taxable year in which the expense occurred, or such
earlier date as required hereunder.  To the extent required to comply with the
409A Provisions, if you are a “specified employee”, as determined under the
Company’s policy for identifying specified employees on the date of your
Qualifying Termination, then all amounts due under this Agreement that
constitute a “deferral of compensation” within the meaning of the 409A
Provisions, that are provided as a result of a “separation from service” within
the meaning of the 409A Provisions, and that would otherwise be paid or provided
during the first six months following your separation from service, shall be
accumulated through and paid or provided on the first business day that is more
than six months after the date of your separation from service (of, if you die
during such six-month period, within 30 calendar days after your death).
 
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15.          Governing Law. This Agreement shall be governed in all respects by
the laws of the Commonwealth of Kentucky.

16.          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 your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If you
should die while any amounts would still be payable to you hereunder if you had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee, legatee, or
other designee or, if there be no such designee, to your estate.

17.          Headings. All Headings are inserted for convenience only and shall
not affect any construction or interpretation of this Agreement.

18.          Tax Cutback.  In the event that you shall become entitled to
payments and/or benefits provided by this Agreement or any other amounts in the
“nature of compensation” (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any person whose actions
result in a change of ownership or effective control covered by Section
280G(b)(2) of the Internal Revenue Code (“Code”) or any person affiliated with
the Company or such person) as a result of such change in ownership or effective
control (collectively the “Company Payments”), and such Company Payments will be
subject to the tax (“Excise Tax”) imposed by Section 4999 of the Code, the
Company Payments shall be reduced (such reduction the “Cutback”) to one dollar
less than the amount which would result in such Company Payments being subject
to the Excise Tax if after taking into account the Excise Tax and all U.S.
federal, state, and local income and payroll tax upon the Company Payments if
the net amount retained by you would be greater in the event of such reduction
in Company Payments then if such reduction in Company Payments did not occur. 
To the extent the Cutback applies, the Company Payments shall be reduced in the
following order: (a) payments under Section C, paragraph 3(a); (b) payments
under Section C, paragraph 3(b)(ii), and lastly (c) the remaining payments under
Section C on a pro-rata basis.  Notwithstanding anything in this provision or
Agreement to the contrary, you shall be solely liable for the Excise Tax, and
shall hold the Company harmless for any liability, not including penalties and
interest on such liability, for the Excise Tax including, but not limited to,
for failing to withhold or pay over any Excise Tax.  If the Cutback applies but
for any reason you pay the Excise Tax, including any applicable interest and
penalties, then the Company shall pay you an amount equal to the Cutback, plus
interest on the Cutback amount at a reasonable market rate, plus any interest
and penalties relating to the Excise Tax paid by you (plus a tax gross-up only
on the Excise Tax interest and penalties).  If the Cutback applies but for any
reason the Company pays the Excise Tax, including any applicable interest and
penalties, then the Company shall offset any amounts due from you, under this
provision or otherwise, by an amount equal to the Cutback, plus interest on the
Cutback amount at a reasonable market rate.

 
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If this Agreement correctly sets forth our agreement on the subject matter
hereof, please sign and return to the Company the enclosed copy of this
Agreement which will then constitute our agreement on this matter.

 
Sincerely,
          
VALVOLINE INC.
         
 
By:
                   

 

Accepted this _____ day of                   ________________, 2017            
     
 
   
 
 
Samuel J. Mitchell, Jr.
   
 
 
 
   
 
 

 
 
 
 
 
 
 
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