Document:

Exhibit

ALASKA AIR GROUP PERFORMANCE BASED PAY PLAN
 (Amended and Restated June 19, 2015)

The Board of Directors (the “Board”) of Alaska Air Group, Inc. (the “Company”) has adopted the Performance-Based Pay Plan (the “Plan”) to reward employees of Alaska Airlines, Inc. (“Alaska”) and Horizon Air Industries, Inc. (“Horizon”).  The Board has delegated authority to the Compensation and Leadership Development Committee (the “Committee”) to administer the Plan.  The Performance Based Pay Award (“Award”) of each eligible Plan Participant will depend upon the degree to which the Company, Alaska, and Horizon achieve the performance goals and, if applicable, an award modifier, set by the Committee for each calendar year (a “Plan Year”) and upon the discretion of the Committee as explained below.  

At the beginning of each Plan Year, the Committee will determine the elected officers and employees of Alaska and Horizon to whom Awards will be granted for that Plan Year that are intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code (“Section 162(m)”).  Such Awards (“Section 162(m) Awards”) will be granted pursuant to, and subject to the limitations and requirements of Section 5.1.4 and 5.2 of the Alaska Air Group, Inc. 2008 Performance Incentive Plan (the “2008 PIP”), as last approved by the Company’s stockholders on May 17, 2011 (including the limit on the maximum per-person Award of $1 million per year, established by Section 5.2.3 of the 2008 PIP).

This Amended and Restated Plan is effective beginning with the 2015 Plan Year and each year thereafter until amended, restated or terminated, pursuant to Paragraph 8. 

		
	1.
	ELIGIBILITY

Eligibility to participate in the Plan during a Plan Year is limited to U.S. and Canadian employees, and Mexico management employees, of Alaska and Horizon (“Eligible Employees”) who:

(a) are employees of Alaska or Horizon on December 31 of the Plan Year for which the Award is being paid, or

(b) were employees during a portion of the Plan Year for which the Award is being paid but were not employees on December 31 because their employment ended due to retirement, disability or death.  (For example, if an employee retires from Alaska or Horizon and his/her last day of employment is on or between January 1 and December 31, 2014, he/she would be eligible for an award for the 2014 Plan Year, but would not be eligible for an Award for the 2015 Plan Year because he/she was not an employee during any part of the 2015 Plan Year, even though his/her first day of retirement might be January 1, 2015.)

Eligible Employees who are on temporary medical leave, military leave, furlough, or company-approved leave of absence as of December 31 of the Plan Year shall remain eligible under the Plan.  Unless otherwise provided in a separate agreement, an individual whose employment with Alaska or Horizon ends prior to December 31 of the Plan Year for any reason not set forth above, for example, resignation or termination (with or without cause), forfeits any Award under this Plan.  In addition, employees terminated for cause, as determined by Alaska or Horizon, shall forfeit any Award under this Plan, regardless of their employment status on December 31 of the Plan Year.  Notwithstanding the foregoing, contract employees or independent contractors as classified by Alaska or Horizon, shall be excluded from participation hereunder, regardless of whether an agency or court subsequently re-classifies such individuals as employees of Alaska or Horizon. An Eligible Employee who meets all the requirements for an Award is a “Plan Participant” for such Plan Year.  Participation in the Plan does not guarantee that any Award will be paid if applicable performance goals specified for the Plan Year are not achieved for the year.

		
	2.
	CALCULATION OF THE AWARD

The size of the Award earned for a Plan Year will depend upon the extent to which the performance goals and, if applicable, an award modifier have been achieved during that Plan Year, and upon the discretion of the Committee.  Separate performance weighting has been established for each performance goal.  

A Plan Participant’s Award is determined by the following formula:  Eligible Earnings X Participation Rate X Payout Award Percentage.  

 “Eligible Earnings” means the aggregate wages or salary paid during the Plan Year to the Plan Participant for services performed for Alaska or Horizon, including cash received for vacation payouts in connection with the Plan Participant’s transfer between Alaska and Horizon or in connection with retirement, death or disability, amounts that the Plan Participant could have received in cash had the Plan Participant not elected to contribute the amount to an employee benefit plan 

maintained by the Company or an affiliate and any other voluntary payment the Plan Participant makes which reduces his/her compensation (such as the Plan Participant’s voluntary contribution to an Internal Revenue Code (“Code”) Section 401(k) Plan, Code Section 125 medical account, dependent day care spending account, or charitable gift), but excluding commissions, all bonuses (including any payment received under this Plan), and all other forms of incentive or other supplemental pay, employee benefits paid by the employer (such as employer contributions to a Code Section 401(k) Plan), worker’s compensation payments, disability payments, cash and non-cash fringe benefits and perquisites (such as per diems, auto expense reimbursement, relocation reimbursement or travel reimbursement).  

“Participation Rate” shall mean the percentage level communicated to each Eligible Employee or class of Eligible Employee.

“Payout Award Percentage” means the sum of the weighted payout of each performance goal, calculated in the manner specified by Paragraph 3, herein.  However, in the case of an elected officer of Alaska or Horizon, the Plan Participant’s Award under this Plan, is limited to three times the elected officer’s Eligible Earnings for the Plan Year, and is further limited as set forth in Paragraph 6 hereof.  Awards may be paid in cash only.

All calculations will be performed by the Finance Department of Alaska and will be subject to approval by the Committee (such approval by the Committee to be in writing in the case of Section 162(m) Awards consistent with the requirements of Section 162(m)).  Once approved by the Committee, such calculations shall be conclusively presumed to be accurate.

		
	3.
	PERFORMANCE WEIGHTING

In order for any Award to be payable as to a particular performance goal, a “Threshold” performance level for that goal must be achieved.  The payout percentage for a particular performance goal will be 25% if the “Threshold” level is reached, 100% if the “Target” level is reached, and 200% if the “Maximum” level is achieved.  This determination applies to each goal individually.  If performance for a particular goal is between the Threshold and Target levels, or between the Target and Maximum levels, the payout percentage for that goal will be determined by linear interpolation between those two levels. The payout percentage for each goal as so determined will then be multiplied by the weighting factor for that goal, as specified in Annex 1 Performance-Based Pay Plan Goals and Measures described in Paragraph 4 for the applicable Plan Year (the “weighted payout percentages”).   

		
	4.
	PERFORMANCE GOALS AND APPLICABLE PERFORMANCE WEIGHTING FACTORS

The Committee will establish the performance goals and, if applicable, an award modifier for each Plan Year during the life of this Plan, and will annually approve an Annex 1 Performance-Based Pay Plan Goals and Measures to this Plan that outlines the performance goals, award modifiers and the weighting factors and an Annex 2 Performance-Based Pay Plan Participation Rates.  

		
	5.
	DISCRETIONARY FACTOR

In the case of a Plan Participant described in Paragraph 1 who retired, terminated employment due to disability, or died during the year, or a Plan Participant who took a leave of absence or worked a reduced schedule during any portion of the year, the Committee retains absolute discretionary authority to adjust the Award to such Plan Participant based upon the Committee’s determination of such Plan Participant’s contribution to the Company or its affiliates or any other factors as the Committee may determine appropriate.  However, in the case of Awards to any elected officer of Alaska or Horizon, the Award cannot be increased above the amount authorized in the original grant; and, in the case of Section 162(m) Awards payable after retirement or any other termination of employment (other than due to the Plan Participant’s death or disability), the Committee has discretion only to reduce (but not increase) the amount that would otherwise be payable under the Award based on achievement of the applicable performance goals.  Moreover, the amount of any Award payable for the Plan Year to any elected officer whose Award might potentially be subject to the deduction limitations of Code Section 162(m) cannot exceed the maximum limit on any such individual’s Award of $1 million per year, established by Section 5.2.3 of the 2008 PIP.

		
	6.
	TIMING OF AWARDS

Payment of Awards for a Plan Year will be made no later than March 15 of the following year.  A deceased Plan Participant's Award will be paid to the beneficiary designated by the Participant for purposes of the Company's or its affiliates’ group term life insurance plans covering the deceased Participant, and in the absence of any designation, will be paid or distributed to the Participant’s estate.

7.    PLAN PARTICIPANT TRANSFERS BETWEEN ALASKA AND HORIZON
If a Plan Participant transfers between Alaska and Horizon, the Plan Participant’s Award under this Plan, and any payment in respect of such Award, shall be separately determined by the Committee based on Eligible Earnings, Participation Rate 

and Payout Award Percentage attributable to each entity.  This will result in a separate Award based on Alaska service and performance and a separate Award based on Horizon service and performance.

		
	8.
	AMENDMENT

The Board, acting on its own or through the Committee, retains the right to modify the Plan at any time in any manner that it deems appropriate, provided that (a) no amendment that adversely affects the rights of Plan Participants or their beneficiaries shall be effective for a Plan Year that ended prior to the Plan Year in which the amendment was adopted, and (b) it will not terminate the Plan for any Plan Year during that Plan Year unless it is clear that Plan Participants will not receive any payment with respect to Awards granted for that Plan Year.  

9.    CLAWBACK POLICY.
The Award is subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require forfeiture of the Award and repayment or forfeiture of any cash received with respect to the Award.

10.    MISCELLANEOUS
		
	a.
	This Plan, including its attachments, constitutes the entire understanding relating to an Award to any employee of Alaska or Horizon, and supersedes all prior oral or written agreements, representations or commitments relating to such Awards. 

		
	b.
	This Plan is not a commitment of the Company, Alaska or Horizon, to any officer or employee of such company, to continue that individual in its employ in order to qualify for an Award.  Nothing contained in this Plan may be considered to be a promise of continued employment.  Any employee who shall file suit against his or her employer for wrongful termination shall automatically cease to be a Plan Participant.

		
	c.
	This Plan and the rights and obligations provided for herein shall be construed and interpreted in accordance with the law of the state of Washington, excluding its conflicts of law rules.

		
	d.
	No unpaid Award will be subject to the debts, liabilities, contracts or engagements of any Plan Participant, and may not be alienated, pledged, garnished or sold, and any attempt to do so shall be void.

		
	e.
	All Awards are subject to applicable federal, state, and local deductions.

		
	f.
	This Plan is intended to be an exception to, or otherwise be in compliance with, Section 409A of the Internal Revenue Code of 1986, as amended.  This Plan shall be interpreted to comply with Section 409A.  Further, it is the intent of the Company that, in the case of Section 162(m) Awards, this Plan, each such Award, any amounts paid with respect to such Awards, shall qualify as performance-based compensation or will otherwise be exempt from deductibility limitations under Section 162(m).  Any provision, application or interpretation of this Plan inconsistent with this intent to satisfy the standards in Section 162(m) as to the Section 162(m) Awards shall be disregarded.

Dated:   June 19, 2015        
Alaska Air Group, Inc.

______________________________
J. Kenneth Thompson
Chairman
Compensation and Leadership Development Committee

 ANNEX 1

PERFORMANCE BASED PAY PLAN GOALS AND MEASURES FOR 2016

This Annex sets forth the goals for the Alaska Air Group Performance Based Pay Plan for the 2016 Plan year.

The performance goals for 2016 are divided into two groups: Operational Performance and Financial Performance.  The Operational Performance goals, which are based on safety, employee engagement and cost per available seat mile (CASM) measures, represent 30% of the total weight.  The Financial Performance goal is based on the Company’s profitability and represents 70% of the total weight. 

		
	a.
	Operational Performance.  Operational Performance is equally divided into three categories:

		
	1.
	Safety (10%)

No award for Safety will be earned by any Alaska or Horizon employee if there is an on-the-job employee fatality or operation-related passenger fatality.  The Compensation and Leadership Development Committee retains discretion to determine whether a passenger fatality is operation-related.

A Safety payout requires the attainment of stated goals for “Level 3” safety events during the Plan year.

For Alaska:
		
	Threshold 
	     4 or fewer “Level 3” safety events

		
	Target 
	     3 or fewer “Level 3” safety events

		
	Maximum 
	     1 or fewer “Level 3” safety events

For Horizon:
		
	Threshold 
	     4 or fewer “Level 3” safety events

		
	Target 
	     3 or fewer “Level 3” safety events

Maximum         1 or fewer “Level 3” safety events

2.    Employee Engagement/Customer Satisfaction (10%)

Employee Engagement/Customer Satisfaction will be measured by the number of times each airline meets or exceeds the monthly Operational Performance Rewards (OPR) Customer Satisfaction goal. The OPR goal is measured through online surveys of recent customers and is based 50% on employee attitude, courtesy and helpfulness, 25% on satisfaction on the most recent flight, and 25% on satisfaction over the past 12 months. 

For Alaska:
		
	Threshold 
	Total of 6 months with OPR score of 85% or higher  

		
	Target
	Total of 8 months with OPR score of 85% or higher 

		
	Maximum
	Total of 11 months with OPR score of 85% or higher 

            
For Horizon:
		
	Threshold 
	Total of 6 months with OPR score of 85% or higher 

        
		
	Target
	Total of 8 months with OPR score of 85% or higher 

		
	Maximum
	Total of 11 months with OPR score of 85% or higher 

		
	3.
	CASM (cost per available seat mile) ex. fuel (10%). 

CASM calculations exclude fuel costs and may be adjusted for certain Excluded Items and Alternative Accounting Treatments (as defined below), as appropriate at the discretion of the Compensation Committee.  

Alaska CASM ex. fuel:
Threshold          7.45¢
Target             7.35¢ 
Maximum         7.25¢ 

Horizon CASMxx*:
Threshold          13.15¢
Target             12.95¢
Maximum         12.75¢ 

*CASM ex. Fuel (pre-Capacity Purchase Agreement) and excluding one-time transition items related to Horizon Air restructuring

		
	b.
	Financial Performance.  (70% of the total)  

Financial Performance is measured by the Company’s Profitability.  

Alaska Air Group Profitability (70% of the total).  

The Profitability measure is the Adjusted Pre-Tax Profit of the Company, as defined below.
Threshold     $ 450 million
Target         $ 775 million 
Maximum    $ 1.7 billion

“Adjusted Pretax Profit” means the net income of Alaska Air Group, Inc. as computed under Generally Accepted Accounting Principles (GAAP), adjusted for Excluded Items and Alternative Accounting Treatments and for fuel expense variances from budget greater than $100 million resulting from jet fuel price volatility.   “Excluded Items” means (a) income taxes, (b) pretax expense under any Alaska Air Group (or subsidiary) performance-based pay, operational performance rewards, or similar such programs as determined in the discretion of the Compensation Committee, and (c) special income or expense items that, in the discretion of the Compensation Committee, should be excluded because recognizing them would not appropriately serve the goals of the Plan. These may include, without limitation, gain or loss on disposition of capital assets, impairments or other fleet exit costs, expenses from voluntary or involuntary severance programs, significant curtailment gains or losses from retirement plans, the impact of changes in accounting principle, government refunds or assistance and cumulative effect of accounting changes.  “Alternative Accounting Treatments” means expense or income items that, for purposes of calculating Adjusted Pretax Profit, the Company (or any subsidiary) will account for based on non-GAAP methods because, in the discretion of the Compensation Committee, using GAAP accounting methods would not appropriately serve the goals of the Plan.  These may include, without limitation, fuel hedge accounting on an “as settled” basis.

ANNEX 2
PERFORMANCE BASED PAY PLAN PARTICIPATION RATES

This Annex sets forth Participation Rates in connection with the Performance-Based Pay Plan, effective with the beginning of the 2016 Play Year.

	
		
	Pay Group/Position
	Participation
Rate

	ALASKA CHIEF EXECUTIVE OFFICER
	120%

	ALASKA PRESIDENT
	90%

	ALASKA EXECUTIVE VICE PRESIDENTS
	85%

	ALASKA SENIOR VICE PRESIDENTS
	75%

	HORIZON AIR PRESIDENT
	75%

	ALASKA VICE PRESIDENTS SERVING ON MANAGEMENT’S EXECUTIVE COMMITTEE
	65%

	ALASKA AND HORIZON VICE PRESIDENTS
	50%

	ALASKA AND HORIZON MANAGING DIRECTORS
	35%

	ALASKA AND HORIZON DIRECTORS
	15%

	ALASKA AND HORIZON MANAGERS AND SUPERVISORS*
	7.5%

	OTHER ALASKA AND HORIZON PARTICIPANTS
	5%

	*Includes managers and supervisors with direct reports, employees in Grade Level I (Alaska) or Level 117 (Horizon) and above, and managers and supervisors whose core responsibility is leading vendor/contractor teams in their daily work. 

Approved by the Compensation and Leadership Development Committee 5/12/16
Supersedes and replaces the rates approved on 3/24/16Exhibit

Exhibit 10.24

Separation Agreement

This Separation Agreement (the “Agreement”) is entered into between CST Brands, Inc. (“CST” or “Company”) and _________________, __________________ of CST (“___________” or “Executive”) effective as of the 1st day of March, 2016 (the “Effective Date”). 
		
	1)
	Purpose. The purpose of this Separation Agreement (this “Agreement”) is to retain the services of ___________ and to reinforce and encourage the continuing attention, dedication and loyalty of __________________ without the distraction of concern over the possibility of involuntary or constructive termination of employment resulting from unforeseen developments, by providing income continuity and separation benefits for a limited period. 

This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the regulations thereunder and related guidance issued by the Internal Revenue Service (“IRS”). If necessary in order to ensure such compliance, this Agreement may be reformed consistent with guidance issued by the Internal Revenue Service.  In no event shall the Company be liable for any additional tax, interest or penalties that may be imposed on Participant under Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.
		
	2)
	Definitions. Unless the context otherwise requires, the following terms shall have the meanings respectively indicated: 

		
	a)
	“2013 Plan” shall mean the Amended and Restated 2013 Omnibus Stock and Incentive Plan, and any updates, amendments or modifications as from time to time may come into effect. 

		
	b)
	“Annual Base Salary” means annual base salary in effect on the Date of Termination, disregarding any reduction occurring after a Change in Control. 

		
	c)
	“Annual Target Bonus” means the annual target bonus for the fiscal year for which the annual bonus is awarded under the Short Term Incentive Plan as if the performance goals established pursuant to such annual bonus were achieved at the target level attributable to Executive in effect at the time the Notice of Termination is given, disregarding any reduction occurring after a Change in Control. 

		
	d)
	“Award” or “Awards” means the grant of any Incentive Stock Options, Non-qualified Stock Options, SARs, Restricted Stock, Restricted Stock Units, Stock Unit Awards, Market Stock Units, Performance Shares, Performance Units, Performance Cash, (including any associated Dividend Equivalents) or any other right or interest relating to stock or cash incentives, whether granted separately from, singly under, in combination with or in tandem to a Long Term Incentive Award made under the 2013 Plan or by Company pursuant to applicable guidelines. 

		
	e)
	“Board” shall mean the board of directors of CST. 

		
	f)
	“Cause” shall mean (i) the willful and continued failure by Executive substantially to perform Executive’s duties with the Company (other than any such failure resulting from Executive’s incapacity due to physical or mental illness), more than 60 days after a written demand for substantial performance is delivered to Executive by the Company that specifically identifies the manner in which the Company believes that Executive has not substantially performed Executive’s duties, or (ii) the willful engaging by Executive in conduct demonstrably and materially injurious to the 

1

Company, or (iii) a conviction of, a plea of nolo contendere, a guilty plea, or confession by Executive to, an act of fraud, misappropriation or embezzlement or any crime punishable as a felony or any other crime that involves moral turpitude.  For purposes of this definition, any act, or failure to act, on the part of Executive is considered “willful” if, and only if, it is done, or omitted to be done, by Executive without reasonable belief that Executive’s action or omission was (A) in the best interests of the Company and (B) lawful.  
		
	g)
	“Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the effective date of any of the following events:

		
	i)
	Acquisition of Stock by Third Party.  Any Person is or becomes the Beneficial Owner (as such term is defined in Section 13(d) of the Securities Exchange Act of 1934, as amended, and any rules and regulations promulgated thereunder), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding shares of capital stock; 

		
	ii)
	Change in Board.  During any period of two consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board and any New Directors cease for any reason to constitute at least a majority of the members of the Board. “New Director” means any individual who was either (1) elected by the Board or (2) nominated for election by the Company’s stockholders and approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously elected or approved under (1) or (2) of this paragraph.  However, the term New Director does not include any director who was designated by any person who has (A) effected a transaction described in subparagraph (i) of this paragraph and (B) become a Beneficial Owner without the consent of the Board;

		
	iii)
	Corporate Transactions.  The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than a majority of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation, which such shares give the holder(s) thereof the power to elect at least a majority of the board or other governing body of such surviving entity;

		
	iv)
	Liquidation.  The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or

		
	v)
	Other Events.  There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Act (as defined below), whether or not the Company is then subject to such reporting requirement.

		
	h)
	“Compensation Committee” shall mean the Compensation Committee as constituted from time to time of the Board, or such other body as shall have similar authority and responsibility. 

		
	i)
	“Date of Termination” shall mean (i) if the Services of Executive are terminated by death, the date of Executive’s death, (ii) if Executive retires, the date of Executive’s retirement, (iii) if such Services are terminated other than for Cause or other than as a result of Disability, the date specified in the Notice of Termination, (iv) if Services are terminated for Disability, the date of Executive’s Disability, 

2

(v) if Services are terminated by Executive for Good Reason, the date specified in the Notice of Termination, (vi) if Executive’s Services are terminated following a Change in Control, the date in the Notice of Termination, and (vii) otherwise shall be the last day Executive provides Services to the Company. 
		
	j)
	“Disability” shall mean that Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. 

		
	k)
	“Good Reason”.  For purposes of this Agreement, “Good Reason” shall mean, if within 24 months following a Change in Control: 

		
	i)
	The assignment to Executive of any duties inconsistent with Executive’s position (including offices, titles and reporting requirements), authority, duties or responsibilities as in effect immediately prior to the Change in Control, or any other action by Company that results in a diminution in such position, authority, duties or responsibilities (excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith); 

		
	ii)
	any requirement that Executive be based at any office or location more than 50 miles from their office or location prior to the Change in Control; 

		
	iii)
	a material diminution in Participant’s Annual Base Salary and/or Annual Target Bonus;

		
	iv)
	any failure by Company to continue in effect any cash or stock-based long and/or short term incentive plans, retirement plan, welfare benefit plan or other compensation, retirement or benefit plan and policy, unless the aggregate value (as computed by an independent benefits consultant selected by Company and reasonably acceptable to Executive or Executive’s legal representative) of all such compensation, retirement or benefit plans and policies provided Executive following a Change in Control is not materially less than the aggregate value as in effect at any time during the 120 day period immediately preceding a Change in Control or, if more favorable to Executive than those provided prior to a Change in Control, is not materially less than those provided generally at any time after the Change in Control to other peer employees of Executive at the Company and its affiliated companies; 

		
	v)
	in the event of a pending Change in Control, Company and Executive have not received written notice at least five business days prior to the anticipated closing date of the transaction giving rise to the Change in Control from the successor to all or a substantial portion of the Company’s business and/or assets that such successor is willing as of the closing to assume and agree to perform Company’s obligations under this Agreement in the same manner and to the same extent that Company is hereby required to perform. 

		
	vi)
	Executive must provide written notice to Company of the existence of the condition(s) described in Sections (i) through (iv) above within 90 days of Executive’s discovery of the initial existence of the condition(s). Company shall have 30 days after such notice is given during which to remedy the condition(s), and such occurrence shall not be deemed to constitute Good Reason if such condition(s), event(s) or circumstance(s) has (have) been fully corrected by Company within the 30 day cure period and Executive has been reasonably compensated for monetary losses or damages resulting therefrom.   

		
	l)
	“Notice of Termination” shall mean a notice that indicates the specific basis for termination of the Services of Executive and shall set forth in reasonable detail the facts and circumstances claimed to provide such basis.  The Notice of Termination shall also include the date of termination. 

3

		
	m)
	“Prospective Change in Control” shall mean (i) any offer presented, directly or indirectly, to the Board that, if consummated, would constitute a Change in Control, or (ii) any negotiation with the Board or any committee or representative thereof to make such an offer (including the unilateral announcement of the terms on which such an offer would be made). 

		
	n)
	“Services” shall mean employment with the Company. 

		
	o)
	“Short Term Incentive Plan” means the existing system of annual bonuses payable to Executive, pursuant to which Annual Target Bonuses are established based upon job levels and payments of bonuses as a percentage of such targets are made based upon Company and/or individual performance.   

4

		
	3)
	 Separation Payments and Vesting. 

		
	a)
	Termination without Cause.  Executive shall be entitled to receive Separation Payments under this Agreement upon termination of Executive’s Services, unless such termination is (a) because of Executive’s death, Disability or retirement, (b) by the Company for Cause, or (c) by Executive for any reason (other than for Good Reason). For all purposes of this Agreement, Executive shall be considered to have terminated his Services with the Company when Executive incurs a “separation from service” with the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code and applicable administrative guidance issued thereunder. Except as otherwise provided in Section 3(b) of this Agreement, upon the termination of Executive the Company shall pay Executive the following:

		
	i)
	Cash Severance in an amount equal to the sum of _____ times Executive’s Annual Base Salary, plus one time Executive’s Annual Target Bonus, and 

		
	ii)
	any unvested Awards made to Executive shall continue to vest per their original terms. 

		
	b)
	Termination for Good Reason or without Cause upon a Change in Control. Upon the termination of Executive’s Services within 24 months following a Change in Control, either  pursuant to a Notice of Termination given by Company after, or in connection with, a Change in Control or Notice of Termination given by Executive for Good Reason  the , the Company shall pay to Executive the following:

		
	i)
	Cash Severance in an amount equal to ______ times the sum of the Executive’s Annual Base Salary and the Executive’s Annual Target Bonus, plus

		
	ii)
	prorated Short Term Incentive in an amount equal to that portion of 100% of the Executive’s Annual Target Bonus prorated through the last day of the month of the Date of Termination,

		
	iii)
	notwithstanding any provision to the contrary in any Award agreement, any unvested Awards made to Executive shall fully vest.

		
	c)
	All payments under subsections (a)(i) and (b)(i) - (ii) of this Section 3 of this Agreement shall be paid only upon, and on the first pay date of the second month following the timely execution by Executive of the Severance Agreement attached hereto as Exhibit “A”, subject to Section 13 below. If the period during which Executive is required to execute the Severance Agreement spans two taxable years, any payments conditioned upon the execution of the Severance Agreement shall not be paid earlier than the first day of the second taxable year.

		
	4)
	 Other Payments. In addition to the payments provided for in Section 3 of this Agreement, upon termination of Executive’s services, the Company shall pay and/or advance to Executive: 

		
	a)
	All relocation payments incurred in connection with a move back to the original job or work location of Executive prior to a Change in Control,  and all legal fees and expenses incurred by Executive as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Sections 409A or 4999 of the Code to any payment or benefit provided hereunder; and 

		
	b)
	During the period of one year following the Date of Termination, all reasonable expenses incurred by Executive in seeking comparable employment with another employer to the extent not otherwise reimbursed to Executive, including, without limitation, the fees and expenses of a reputable out placement organization, and reasonable travel, telephone and office expenses. 

5

		
	c)
	Any payments pursuant to this Section 4 shall be made by the Company upon or as soon as practicable following receipt of supporting documentation reasonably satisfactory to the Company.  In no event shall any payment be made to Executive for fees and expenses incurred after the close of Executive’s second taxable year following the taxable year in which the Date of Termination occurs.

		
	5)
	 Maintenance of Other Benefit Plans. For a period of three years (one year if not in connection with a Change in Control) following Executive’s Date of Termination, the Company shall maintain, or cause to be maintained, in full force and effect, for the continued benefit of Executive, comprehensive medical, dental, vision insurance, group life insurance, and disability coverage  on the same basis as such Executive participated immediately prior to the Date of Termination, unless Executive’s continued participation is not permitted under the general terms and provisions of such plans and programs or applicable law, in which case the Executive shall be entitled to a lump sum payment equal to the value of the Company’s contribution for such coverage consistent with plan benefits immediately prior to the Date of Termination or Change in Control, whichever is greater.  Continued benefits provided pursuant to the preceding sentence shall be subject to the following requirements: (a) continued benefits provided during one taxable year of Executive shall not affect the continued benefits provided during any other taxable year of Executive, (b) any reimbursement of an eligible expense with respect to a continued benefit shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense was incurred and (c) the right to a continued benefit shall not be subject to liquidation or exchange for another benefit.

		
	6)
	 No Mitigation. Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment so provided for be reduced by any compensation earned by Executive as the result of employment by another employer, by retirement benefits or be offset against any amount claimed to be owed by Executive to the Company. 

		
	7)
	 Covenants. 

		
	a)
	Confidentiality of Records/Non-Disclosure.  Executive acknowledges and agrees that in working as Chairman of the Board, President and Chief Executive Officer of the Company, Executive will receive specialized knowledge and experience and Company will provide to Executive Confidential Information of Company, which is of great value to Company and that it has developed at its significant expense.  “Confidential Information” shall include, but is not limited to, all non-public information regarding Company’s business strategies and practices, sales and marketing strategies and practices, methods of operation, pricing information, cost information, hiring and training methods, investment policies, business manuals, Company financial information, Company contracts and/or forms and any other confidential, proprietary and/or trade secret information concerning Employer.  Executive further acknowledges and agrees that both during the term of his or her employment with Company and continuing after termination of this Agreement, Executive shall not disclose Company’s Confidential Information.  

		
	b)
	Non-Solicitation and Non-Competition.  Throughout the Executive’s employment with Company and for a period of 12 months following the termination of Executive’s employment without cause or for Good Reason, Executive agrees to the following: 

		
	i)
	that she will not entice or encourage any employee of Company to terminate his or her employment with Company; and 

		
	ii)
	that she shall not compete with Company, on her own behalf, on behalf of any other person, or as an officer, director, agency representative, employee or shareholder of any other entity 

6

competitive with Company in Bexar County and any adjacent counties as well as any other geographic areas in which Company conducts business as of the date of the Executive’s termination of employment.  
		
	8)
	Successors. The Company will require any successor or assign (whether direct or indirect, by purchase, merger, consolidation, operation of law or otherwise) to all or substantially all of the business and assets of the Company, by written agreement, to expressly assume and agree to carry out the provisions of this Agreement in the same manner and to the same extent that the Company would be required to carry them out if no such Change in Control had occurred; however, nothing herein will in any way diminish such assumption of these obligations by operation of law. 

		
	9)
	Notice. Any notice expressly provided for under this Agreement shall be in writing, shall be given either manually or by certified and registered mail, carrier service or by personal service, and shall be deemed sufficiently given, if and when received by the Company at its offices at One Valero Way, Building D, San Antonio, TX 78249 (if prior to September 1, 2016) or 19500 Bulverde Road, San Antonio, TX 78259 (if after September 1, 2016), Attention: General Counsel, or by Executive at the address on the records of the Company for Executive, or if and when mailed by registered mail, postage prepaid, return receipt requested, addressed to the Company or Executive to be notified at such address.  Either the Company or Executive may, by notice to the other, change its address for receiving notices. 

		
	10)
	Amendment and Termination. 

		
	a)
	This Agreement may be terminated at any time by the Company; however, 

		
	b)
	no amendment or termination made within one year before a Change in Control and made while a Prospective Change in Control is pending may adversely affect any benefit that might at any time be or become owing hereunder to Executive, immediately prior to the commencement of such Prospective Change in Control, without the consent of Executive. 

		
	11)
	Venue and Governing Law.  The parties must first attempt to resolve any claims under this Agreement with negotiations in good faith between Executive and the Chairman of the Board or Lead Director of the Board (if any) and the Compensation Committee of the Board, which must occur as soon as practical after written notice of a dispute hereunder.  Should that fail to result in an amicable resolution, the Company and Executive agree that the sole and exclusive venue for any disputes related to, regarding or arising out of this Agreement shall be the state or federal courts of Bexar County, Texas.  The validity, construction, interpretation, and administration of this Agreement shall be controlled and governed by the substantive laws of the State of Texas  

		
	12)
	Certain Excise Taxes.  Notwithstanding anything to the contrary in this Agreement, if Executive is a “disqualified individual” (as defined in section 280G(c) of the Code), and the payments and benefits provided for under this Agreement, together with any other payments and benefits which Executive has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in section 280G(b)(2) of the Code), then the payments and benefits provided for under this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by Executive from the Company and its affiliates will be one dollar ($1.00) less than three times Executive’s “base amount” (as defined in section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by Executive shall be subject to the excise tax imposed by section 4999 of the Code, or (b) paid in full, whichever produces the better net after-tax position to Executive (taking into account any applicable excise tax under section 4999 of the Code and any other applicable taxes).  The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in 

7

time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order.  The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith.  If a reduced payment or benefit is made or provided, and through error or otherwise, that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times Executive’s base amount, then Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made.  Nothing in this Section 14 shall require the Company to be responsible for, or have any liability or obligation with respect to, Executive’s excise tax liabilities under section 4999 of the Code.
		
	13)
	Code Section 409A.   

		
	a)
	Six-Month Delay for Specified Employees.  If any payment, compensation or other benefit provided to Executive in connection with his employment termination is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Code Section 409A and Executive is a “specified employee” as defined in Code Section 409A(2)(B)(i), no part of such payments shall be paid before the day that is six months plus one day after Executive’s separation from service (the “New Payment Date”).  The aggregate of any payments that otherwise would have been paid to Executive during the period between the date of separation from service and the New Payment Date shall be paid to Executive in a lump sum on such New Payment Date.  Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement.  Notwithstanding the foregoing, to the extent that the foregoing applies to the provision of any ongoing welfare benefits to Executive that would not be required to be delayed if the premiums therefore were paid by Executive, Executive shall pay the full cost of premiums for such welfare benefits during the six-month period and the Company shall pay Executive an amount equal to the amount of such premiums paid by Executive during such six-month period promptly after its conclusion.

		
	b)
	Payments for Reimbursements and In-Kind Benefits.  Any reimbursements for costs and expenses under the Agreement shall be paid in no event later than the end of the calendar year following the calendar year in which Executive incurs such expense.  With regard to any provision under the Agreement that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursements 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, provided, however, that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.  

		
	c)
	Installments as Separate Payment.  If under the Agreement, an amount is paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment.

		
	14)
	Tax Withholding.  The Company may withhold from any amounts payable under this Agreement or otherwise payable to Executive any taxes the Company determines to be required under applicable law or regulation and may report all such amounts payable to such authority as is required by any applicable law or regulation.

8

		
	15)
	Entire Agreement.  This Agreement and the documents expressly referred to herein contain the entire understanding of the Company and Executive with respect to the matters set forth herein, including severance or benefits in relation to a Change in Control of the Company, but do not supersede any non-qualified deferred compensation plan(s) sponsored by the Company and any agreements and plans related to Awards except as expressly set forth herein. 

		
	16)
	Severability.  If any one or more Sections or other portions of this Agreement are declared by any court or governmental authority to be unlawful, invalid, void or unenforceable, such unlawfulness, invalidity or unenforceability shall not serve to invalidate any Section or other portion not so declared to be unlawful, invalid, void or unenforceable.  Any Section or other portion so declared to be unlawful, invalid, void or unenforceable shall be construed so as to effectuate the terms of such Section or other portion to the fullest extent possible while remaining lawful and valid.  To the extent that any provision of this Agreement is adjudicated to be unlawful, invalid, void or unenforceable because it is overbroad, that provision shall not be void but rather shall be limited only to the extent required by applicable law and enforced as so limited.  The parties expressly acknowledge and agree that this Section is reasonable in view of the parties’ respective interests.

		
	17)
	Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument.  

 By:     CST Brands, Inc.

/s/ Kimberly S. Lubel                                
Kimberly S. Lubel
Chief Executive Officer and President
    
    

By:    __________________________________
Name:    
Title:     
Date:    _________________________

9

EXHIBIT A

SEVERANCE AGREEMENT
AND GENERAL RELEASE OF CLAIMS

This Severance Agreement and General Release of Claims (the “Agreement”) is made and entered into between _______________________ (“I” or “me”) and CST Brands, Inc., a Delaware corporation (“CST”), dated effective the __th day of _______.1 

		
	1.
	CONSIDERATION, RELEASE AND AGREEMENTS

  
I will no longer be a full-time employee of CST [as well as any position as officer or director with CST, and its subsidiaries and affiliates] effective __________________ (“Termination Date”).  Accordingly, my signature below evidences my resignation of each position I may hold with CST, as well as all positions I may hold with any of CST’s subsidiaries and affiliates, effective as of the Termination Date.  This Agreement is made on behalf of myself, my heirs, executors, administrators, legal representatives, successors, and assigns.  CST and I wish to confirm through this Agreement the payments and benefits that will be provided to me in full settlement of all matters relating to my employment with CST and any of its subsidiaries and affiliates and my separation therefrom.

In consideration of the payments and/or benefits listed below, I make the following agreements and RELEASE AND FOREVER DISCHARGE the persons and organizations specified in Section 3 herein; I acknowledge that the Consideration is in addition to anything of value to which I am already entitled.  

CST will pay me “Consideration" in the amount of:

		
	(a)
	 [Severance amount (___dollars and ___ cents)], less applicable taxes as severance benefits;      

		
	(b)
	Provided I timely elect to continue health insurance coverage under the Company-sponsored welfare benefit plan after the Termination Date pursuant to the federal COBRA law, reimbursement for a period of _____months following the Termination Date for continued group medical, dental and vision coverage for me and/or my eligible dependents at the same coverage levels as in effect immediately prior to my Termination Date or Change in Control, whichever is greater. This period of coverage satisfies the obligation to offer and shall be considered COBRA continuation coverage under Section 4980B of the Internal Revenue Code of 1986, as amended; and

		
	(c)
	For a period of _______months_ following the Termination Date, CST shall provide life insurance coverage for my continued benefit on the same basis as I participated in the Company-sponsored plan immediately prior to the Termination Date, unless such continued participation is not permitted under the general terms and provisions of such plans and programs or applicable law, in which case I will be entitled to a lump sum payment equal to the value of the Company’s contribution for such coverage consistent with plan benefits immediately prior to the Termination Date or Change in Control, whichever is greater.  I acknowledge and agree that the right to such continued benefit shall not be subject to liquidation or exchange for another benefit.

                
1 Capitalized terms used but not defined herein have the meanings assigned to them in that certain Separation Agreement entered into between CST and ___________ on the ___day of _____, 2016 (the “Separation Agreement”), to which this Exhibit A is attached and of which it forms a part.

10

		
	(d)
	I will be reimbursed for (1) the actual charges of my relocation payments incurred in connection with my move back to the original job or work location prior to a Change in Control,  (2) all legal fees and expenses incurred by me as a result of this termination, and (3) any fees and expenses incurred in contesting or disputing this termination or in seeking to obtain or enforce any right or benefit provided by the Separation Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Sections 409A or 4999 of the Code to any payment or benefit provided under the Separation Agreement, within 30 days after I  present to CST appropriate documentation evidencing such fees and/or expenses. The charges for relocation and other items provided for herein must be incurred and the invoices received by CST no later than ___________, 20__ in order to be eligible for reimbursement.  If I do not seek reimbursement for the relocation charges or do not otherwise incur the other fees and expenses referenced herein, no compensation will be paid to me in lieu thereof.; and 

		
	(e)
	I will be reimbursed for actual charges I incur in seeking comparable employment, including without limitation, outplacement services, reasonable travel, and telephone/office expenses, within 30 days after I present appropriate documentation to CST evidencing such fees and/or expenses.  The actual charges referenced herein must be incurred and the invoice received no later than ______________, 20__.  If I do not incur charges as contemplated herein, no compensation will be paid to me in lieu thereof.

    
The parties acknowledge and agree that grants awarded to me under the terms of the ________________(as it may be amended), dated ______ (“___ Grant”) and __________ (“____ Grant”), [included additional if necessary] shall remain subject to the terms and conditions of the ________________ and applicable award agreement [OR shall fully vest notwithstanding any provision to the contrary in any Award agreement].  For clarification, [lay out relevant information for Executive’s specific awards].    

I understand that if any of the following events occurs, this Agreement will not be effective and I will not be entitled to the Consideration mentioned above: (1) I fail to deliver a copy of this Agreement with my original, notarized signature to CST on or before the date that is  21 days from _________, as further addressed in Section 20, or (2) I revoke my acceptance of this Agreement within seven days after my acceptance in accordance with Section 21 below.  This Agreement may also be terminated by the Company in the event I fail to fulfill any of the other terms and conditions of this Agreement.     

		
	2.
	TIMING AND DELIVERY OF PAYMENTS 

Unless this Agreement is terminated, and subject to my fulfilling the terms set forth herein, the payment of the Consideration provided in Section 1(a) above will be made on CST’s next regularly scheduled pay date following the second month after the full execution and receipt by Company of this Agreement, subject to Section 17 of the Separation Agreement, and only if I have not revoked this Agreement.  If the period during which execution of this Agreement and payment of the Consideration provided in Section 1(a) hereunder spans two taxable years, any payments conditioned upon the execution of this Agreement shall not be paid earlier than the first day of the second taxable year.  
 
		
	3.
	PERSONS AND ORGANIZATIONS RELEASED

I release CST and all of its past, present, and future parent, subsidiary, or otherwise affiliated companies, successors, and assigns, and all of their respective past, present, and future officers, directors, agents, administrators, trustees, insurers, successors, employees, fiduciaries, and employee benefit plans.  Collectively, these persons and organizations are referred to in this Agreement as “the Company.” 

11

4.    MATTERS RELEASED 

I affirm that I have not filed, caused to be filed, and/or I am not presently a party to any claim, complaint or action against the Company in any forum or form.  In addition, I affirm that upon execution of this Agreement, I will have been paid all applicable wages, bonuses, and other compensation owed to me relating to or resulting from my employment with the Company [other than the Consideration provided under this Agreement].  I further affirm that I have no known workplace injuries or occupational diseases.

In exchange for the Consideration provided above, I hereby release and waive any and all claims, rights, demands, actions, obligations and causes of action of any and every kind, nature, and character, whether known or unknown, that I may now have or have ever had up to and including the Termination Date against the Company. This release includes, without limitation, all claims concerning the terms and conditions of my employment, concerning anything that happened to me or arose while I was an employee, or concerning my separation from employment.

I understand that the claims released include, without limitation, whether based on federal, state or local law, claims for breach of any implied contract, quasi contract, express contract or covenant; claims for promissory estoppel; claims of entitlement to any pay (other than the Consideration); claims of wrongful denial of insurance and employee benefits or wages; claims for wrongful termination, public policy violations, unfair business practices, negligence, defamation, invasion of privacy, fraud, misrepresentation, emotional distress or other common law or tort causes of action; wage and hour claims; claims of harassment, retaliation or discrimination under federal, state, or local law; claims based on any federal, state or other governmental statute, regulation or ordinance, including, without limitation, the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964 (and as amended in 1991), the Fair Credit Reporting Act, the Employee Retirement Income Security Act (as amended), the Consolidated Omnibus Budget Reconciliation Act of 1985, the Worker Adjustment and Retraining Act; the Family and Medical Leave Act, the Equal Pay Act, the Genetic Information Nondiscrimination Act of 2008, the Lilly Ledbetter Fair Pay Act of 2009, the Fair Labor Standards Act, the Texas Commission on Human Rights Act, the Texas Labor Code, and any other federal, state or local laws prohibiting employment or wage discrimination and/or retaliation, including workers’ compensation retaliation; the National Labor Relations Act, the Labor Management Relations Act; all claims or causes of action that are known or unknown, suspected or unsuspected, concealed or hidden, or whether developed or undeveloped, up through and including the Termination Date; and any liability for damages, affirmative or equitable relief, judgments, or attorneys’ fees therefore. 

I further acknowledge that I am knowingly and voluntarily waiving and releasing any and all rights I may have under the Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), I also acknowledge that Consideration given for the above waiver and release is in addition to anything of value to which I am already entitled.  I further acknowledge that I have been advised by this writing, as required by the ADEA, that:  (a) my waiver and release do not apply to any rights or claims that may arise after the date this Agreement is signed; (b) I have been advised hereby that I have the right to consult with an attorney prior to executing this Agreement; (c) I have 21 days to consider this Agreement; and (d) I have seven days following my execution of this Agreement to revoke the Agreement and that, if I do so,  the Agreement shall be of no force or effect and I will not be entitled to receive the Consideration. 

Nothing in this Agreement precludes me from filing a charge with or participating in an investigation of the Equal Employment Opportunity Commission or similar state agency; however, I agree not to accept any monetary relief whatsoever as a result of such charge or investigation.  

12

5.    TAXES

I understand and agree to be solely responsible for the payment of all income and other taxes due, or that may become due, as a result of the Consideration received by me as described in this Agreement, including, but not limited to, those imposed by federal, state, county, and municipal jurisdictions, and I hereby agree to indemnify and hold the Company harmless against any taxes, interest, penalties or other charges assessed by any federal, state or local taxing authority in connection with the Consideration.  Notwithstanding the forgoing, the Company may withhold from amounts payable under this Agreement all federal, state, local, and foreign taxes that the Company is required to withhold by applicable laws or regulations.

6.    NO ADMISSION OF LIABILITY

Neither the payment of any Consideration nor any agreements made or referenced in this Agreement are to be understood as an admission of wrongdoing or liability by the Company or me.

		
	7.
	CONFIDENTIALITY AND NON-DISPARAGEMENT 

I understand that this Agreement is confidential, and I agree I have not, may not, and will not disclose the terms of this Agreement (including the Consideration) to any third party; provided, however, that the terms and existence of this Agreement may be disclosed as required by law upon advice of counsel to CST.  I understand I may disclose the terms of this Agreement to my spouse, personal attorney, accountant, or tax advisor, provided I instruct such person that the information is confidential and not to be disclosed.  Subject to the foregoing, this confidentiality provision applies to and expressly prohibits all communications to any person or entity including, without limitation, communications to any present, former, or future Company employees.  

I also agree not to, directly or indirectly, engage in communications or conduct that disparages the Company or any of it officers, directors, representatives, or employees or make any negative statements about the business, products, employees, or employment/compensation/benefit practices of the Company.  In addition, I agree not to help, encourage, or voluntarily participate in asserting or filing of any claims or suits related to the employment, or separation thereof, of any individual from the Company, except as required by law.

I agree that the Company shall be entitled to injunctive or other equitable relief enjoining and restraining any actual or threatened breaches of the provisions of this Section.  Nothing herein, however, shall be construed as prohibiting the Company from pursuing any other remedies available to the Company for such breach or threatened breach, including but not limited to, the recovery of damages (both actual and punitive) from me.

If the Company is asked to provide a prospective employer a reference regarding my employment with the Company, I will direct that employer to the Company’s employment verification line for verification of the dates of employment and position(s) held.  If the Company is contacted by any prospective employer, the Company will confirm dates of employment and position(s) held. 

8.    COOPERATION

I understand that I have material knowledge of various existing matters, or matters that may arise in future, arising out of or related to the Company’s business or operations, and that the Company may require my assistance in order to address, respond to, resolve, or defend against such matters.  I agree to cooperate with the Company and its affiliated entities and their respective counsel in the handling or defense of such 

13

matters and any related legal or other proceedings until such matters are fully and finally resolved.  Such cooperation shall include, but is not limited to, providing information to counsel for the Company, assistance in locating and/or reviewing relevant documents, participating in interviews, and providing testimony in deposition or in court.  Except as may be required by law, I agree to communicate with any party adverse to the Company, or with a representative, agent or legal counsel for any such party, concerning any such pending or future claims or litigation or administrative hearing solely through legal counsel for the Company.  This requirement is not intended to and does not preclude me from giving testimony or providing information as a witness in a judicial, administrative, or grievance proceeding or restrict my communications with my attorney or spouse. I agree to promptly advise the Company if I receive a request, order, or notice seeking to obtain my testimony or seeking information in connection with any proceeding or potential proceeding involving the Company.  The Company agrees to reimburse me for any reasonable costs actually incurred by me as a result of any travel or other expenses relating to my cooperation with the Company under this Section so long as appropriate documentation is provided, with reimbursement to be made within 30 days of receipt of such documentation.  Any expenses for which reimbursement is to be requested will be approved in advance by an appropriate representative of the Company before they are incurred.  

9.    PROPRIETARY INFORMATION AND TRADE SECRETS 
I acknowledge and agree that I shall not disclose Company’s Confidential Information.  
10.     NON-SOLICITATION, NON-INTERFERENCE AND NON-COMPETE

I agree that for the period of 12 months following my Termination Date, I will not: 

		
	(a)
	entice or encourage any employee of Company to terminate his or her employment with Company; and 

		
	(b)
	compete with Company, on my own behalf, on behalf of any other person, or as an officer, director, agency representative, employee or shareholder of any other entity competitive with Company in Bexar County and any adjacent counties as well as any other geographic areas in which Company conducts business as of the date of my termination of employment.  

11.     RETURN OF COMPANY MATERIALS, DISPOSITION OF PERSONAL     BELONGINGS 

On or before ____________, I will : (1) return all Company property (keys, credit cards, identifications, security access cards, computers, etc.) and information, including manuals or other materials created by the Company, any related company or entity, or any customer, which directly or indirectly relates to the business of the Company; and (2) remove all of my personal belongings from the workplace.  

		
	12.
	CONSULTATION WITH AN ATTORNEY; UNDERSTANDING OF AGREEMENT

I have been advised to consult with an attorney prior to executing this Agreement.  In signing this Agreement, I have relied on my own judgment and/or the advice of my attorney, and not on any statement or representation of the Company.  I understand the terms and conditions of this Agreement, agree to abide by it, and voluntarily execute it without any reservation.  I understand this Agreement is a full and final release of any and all claims that I may have against the Company.

14

13.    NON-ASSIGNMENT

I represent I have not assigned, pledged, sold, transferred, or otherwise conveyed any right, claim, or interest that I may have in any matters released herein.

14.    VENUE AND GOVERNING LAW

The Parties must first attempt to resolve any claims under this Agreement with negotiations in good faith between Executive and the Chairman of the Board or Lead Director of the Board (if any) and the Compensation Committee of the Board, which must occur as soon as practical after written notice of a dispute hereunder.  Should that fail to result in an amicable resolution, the Company and I agree that the sole and exclusive venue for any disputes related to, regarding or arising out of this Agreement shall be the state or federal courts of Bexar County, Texas.  The validity, construction, interpretation, and administration of this Agreement shall be controlled and governed by the substantive laws of the State of Texas.   

15.    Agreement to Be Construed Fairly  
This Agreement is to be construed fairly and not in favor of or against either party, regardless of which party drafted or participated in the drafting of its terms.  Any rule of construction that a document is to be construed against the drafting party shall not be applicable to this Agreement.
16.    Severability/ Headings  
If any word, clause, phrase, sentence, or paragraph of this Agreement is declared void or unenforceable, such portion shall be considered independent of, and severable from, the remainder, the validity of which shall remain unaffected.  The various headings used in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of the Agreement or any provision of it. 
17.    SECTION 409A
The Parties agree that this Agreement is intended to comply, and shall be administered consistently, in all respects, with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), and the regulations and additional guidance promulgated thereunder, to the extent applicable.  If necessary in order to ensure such compliance, this Agreement may be reformed consistent with guidance issued by the Internal Revenue Service.  CST shall have authority to take any action, or refrain from taking any action, with respect to this Agreement that is reasonably necessary to ensure compliance with Section 409A (provided that the Company shall choose the action that best preserves the value of the payments and benefits provided to the me under this Agreement that is consistent with Section 409A) and the parties agree that this Agreement shall be interpreted in a manner that is consistent with Section 409A, to the extent applicable.  In no event shall the Company be liable for any additional tax, interest or penalties that may be imposed on me under Section 409A o or any damages for failing to comply with Section 409A.
In furtherance, but not in limitation of the foregoing: (a) in no event may I designate, directly or indirectly, the calendar year of any payment to be made hereunder; (b) in the event that I am a “specified employee” within the meaning of Section 409A, payments which constitute a “deferral of compensation” under Section 409A and which would otherwise become due during the first six months following my Separation Date shall be delayed and all such delayed payments shall be paid in full in the seventh month after my termination of employment, or if earlier, upon my death, provided that the above delay shall not apply to any payment that is excepted from coverage by Section 409A, such as a payment covered by the short-term deferral exception described in Treasury Regulations Section 1.409A-1(b)(4); (c) notwithstanding any other provision of this Agreement, a termination, resignation or retirement of my employment hereunder, 

15

shall mean, and be interpreted consistent with, a “separation from service” within the meaning of Section 409A, and “Separation Date,” for purposes of determining the date that any payment or benefit is required to be provided hereunder, shall be deemed to mean the date of my separation from service within the meaning of Section 409A; (d) with respect to any reimbursement of fees and expenses, or similar payments or any in-kind benefits, the following shall apply: (i) unless a specific time period during which such expense reimbursements and payments may be incurred is provided for herein, such time period shall be deemed to be my lifetime; (ii) the amount of expenses eligible for reimbursement hereunder, or in-kind benefits to which I am entitled hereunder, in any particular year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other year; (iii) the right to reimbursement of expenses or in-kind benefits shall not be subject to liquidation or exchange for any other benefit; (iv) the reimbursement of an eligible expense or a payment shall be made on or before the last day of the calendar year following the calendar year in which the expense was incurred or the payment was remitted, as the case may be.
Wherever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A.
18.    ENTIRE AGREEMENT
I agree this Agreement, together with the Separation Agreement, constitute the entire agreement, covenant, and consideration with the Company except as modified by Section 19. I have not relied upon any other consideration, covenant, promise, or agreement not contained in this Agreement or the Separation Agreement.  Any amendment to this Agreement shall be in writing and signed by duly authorized representatives of the parties hereto and stating the intent of the parties to amend this Agreement. 
19.    POST-EMPLOYMENT OBLIGATIONS
Notwithstanding anything to the contrary herein, this Agreement shall not alter or terminate any post-employment obligations previously agreed to by me or the Company (including, but without limitation, confidentiality, non-competition, non-solicitation), which I agree shall survive the termination of my employment.

20.    ACCEPTANCE OF THE AGREEMENT
I understand I may take up to 21 days from receipt of this Agreement on _____________, to decide whether to accept it.  I may accept this Agreement within the 21 day period by voluntarily signing the Agreement but I am not required to do so and in no event may I sign it before my last day worked (_______).  I further understand that if I fail to deliver an original executed copy of this Agreement to: 
If prior to September 1, 2016:
CST Brands, Inc. 
Attn: General Counsel
One Valero Way
Building D, Suite 200
San Antonio, Texas, 78249 

If on or after September 1, 2016:
CST Brands, Inc. 
Attn: General Counsel
19500 Bulverde Road
San Antonio, Texas, 78259

16

within this 21 day period, the Agreement will not be considered or accepted by the Company and I will not be entitled to the Consideration set forth above.  

21.    REVOCATION OF THE AGREEMENT

I understand I may revoke this Agreement within seven days after I execute it by delivering a written notice of revocation to the appropriate recipient reflected in Section 19 prior to the expiration of such seven day revocation period.  I understand that if I revoke this Agreement, the Agreement shall be of no force or effect and I will not be entitled to receive the Consideration.  If, after the seven day revocation period, I have not revoked the Agreement, I understand the Agreement will be effective and enforceable, provided that I have satisfied all other conditions stated in this Agreement.

[Intentionally left blank. Signature Page Following]

17

EXECUTED on the ____ day of _________________, 201_.

By _________________________________
                                

THE STATE OF TEXAS                §
                        
COUNTY OF BEXAR                §

BEFORE ME, the undersigned authority, on this day appeared ___________________ personally known by me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that she executed the same for the purposes and consideration therein expressed.

SUBSCRIBED AND SWORN TO before me on _________________________, 20__.

(SEAL)

                            
Notary Public in and for
The State of Texas

                                
Printed Name of Notary

My Commission Expires:

ACCEPTED on the ___ day of _______________, 20___.

CST Brands, Inc.

________________________________
By: 
Its: 

18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00267-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00267-of-00352.parquet"}]]