Document:

Exhibit 10.3

 

VALVOLINE CHANGE IN CONTROL SEVERANCE PLAN

 

 

 

 

 

TABLE OF CONTENTS

 

	
SECTION 1.

	
PURPOSE

	
1

	
SECTION 2.

	
ADMINISTRATION

	
1

	
SECTION 3.

	
ELIGIBILITY

	
1

	
SECTION 4.

	
CERTAIN DEFINED TERMS

	
1

	
SECTION 5.

	
CONDITIONS FOR SEVERANCE PAYMENTS AND BENEFITS

	
5

	
SECTION 6.

	
AMOUNT OF SEVERANCE PAYMENTS AND BENEFITS AND TIMING OF PAYMENTS

	
6

	
SECTION 7.

	
CLAWBACK

	
8

	
SECTION 8.

	
SECTION 280G

	
9

	
SECTION 9.

	
CLAIMS PROCEDURE

	
9

	
SECTION 10.

	
AMENDMENTS AND TERMINATIONS

	
10

	
SECTION 11.

	
SUCCESSORS; BINDING AGREEMENT

	
11

	
SECTION 12.

	
WITHHOLDING TAXES

	
11

	
SECTION 13.

	
GOVERNING LAW

	
11

	
SECTION 14.

	
SECTION 409A

	
11

	
SECTION 15.

	
NO RIGHT TO CONTINUED EMPLOYMENT

	
12

 

VALVOLINE CHANGE IN CONTROL SEVERANCE PLAN

 (effective as of May 15, 2017)

The Valvoline Change in Control Severance Plan (the “Plan”) is effective as of May 15, 2017. Capitalized terms used but not otherwise defined herein have the meanings set forth in Section 4.

The Plan is an employee benefit plan that provides participating employees of Valvoline Inc. (“Valvoline”) and its majority-owned subsidiaries (collectively referred to herein as the “Company”) with certain severance payments and benefits if the individual’s employment with the Company is terminated under defined circumstances prior to or following a Change in Control.  The details and purpose of the Plan are more fully explained below.

This Plan will govern in the event of a Change in Control, in lieu of the Non-CIC Severance Plan (as defined below), except as otherwise provided in Section 6 with respect to Participants whose Qualifying Termination occurs under circumstances described in clause (ii) of such defined term.

SECTION 1. PURPOSE

The purpose of the Plan is to reduce participating employees’ concerns about the possibility of a Change in Control.  It is important that each participating employee be able to focus his or her full attention and energy toward the goals and objectives of the Company.  The Plan is also designed to permit the Company to retain its participating employees by increasing stability and improving morale and productivity.  In addition, the Plan will allow the company to attract and retain new qualified employees.

SECTION 2. ADMINISTRATION

The Plan shall be administered by the Plan Administrator.  The Plan Administrator shall have full authority to select Participants, to construe and interpret the Plan, to establish, amend and rescind rules and regulations relating to the administration of the Plan, and to take all such actions and make all such determinations in connection with the administration of the Plan as it may deem necessary or desirable.  All determinations made by the Plan Administrator shall be final and binding on all interested persons.  Additionally, Valvoline shall be the named fiduciary for purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”).

SECTION 3. ELIGIBILITY

No employee may participate in the Plan unless and until the Plan Administrator designates them a Participant and the Participant executes and returns to the Company a participation agreement prepared by appropriate Company legal counsel.  The Plan Administrator reserves the right to amend the classes of employees who shall participate in the Plan in its discretion at any time prior to a Change in Control, subject to Section 10.

SECTION 4. CERTAIN DEFINED TERMS

(a)  “Annual Base Salary” means a Participant’s annual base salary (as determined by the Plan Administrator in accordance with the Company’s customary procedures) as in effect as of 

 

 

 

the date of the Participant’s Qualifying Termination or, if greater, as in effect as of the date of the Change in Control.

 

(b)  “Benefit Continuation Period” means (i) 36 months in the case of the Chief Executive Officer of the Company (the “CEO”), if the CEO is a Participant, and (ii) 24 months in the case of all other Participants.

(c)  “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.

(d)  “Cause” means (i) the willful and continued failure of an employee to substantially perform his or her duties with the Company (other than any such failure resulting from the Participant’s incapacity due to physical or mental illness), (ii) the willful engaging by the Participant in gross misconduct materially injurious to the Company or (iii) the Participant’s conviction of or the entering of a plea of nolo contendere (or similar plea under the law of a jurisdiction outside the United States) to the commission of a felony (or a similar crime or offense under the law of a jurisdiction outside the United States).

(e)  “Change in Control” shall be deemed to have occurred if:

(1) there shall be consummated (A) 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, as a result of which the shareholders of the Company own (directly or indirectly), immediately after the Business Combination, less than 50% of the then outstanding shares of common stock that are entitled to vote generally for the election of directors of the corporation resulting from such 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 Business Combination in which the holders of the Company’s common stock immediately prior to the Business Combination have substantially the same proportionate ownership of common stock of the surviving corporation immediately after the Business Combination or (B) any sale, lease, exchange or transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; provided, however, that no sale, lease, exchange or other transfer of all or substantially all of the assets of the Company shall be deemed to occur unless assets constituting at least 80% of the total assets of the Company are transferred pursuant to such sale, lease, exchange or other transfer;

(2) the shareholders of the Company shall approve any plan or proposal for the liquidation or dissolution of the Company;

(3) any Person shall become the Beneficial Owner 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 of directors of Valvoline; or

 

Valvoline Change in Control Severance Plan

2

  

(4) at any time during a period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of Valvoline 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.

Notwithstanding the foregoing, a “Change in Control” 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 Company’s common stock 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 the Company’s common stock or other securities pursuant to a tender or exchange offer or (iii) the Valvoline Stock Distribution.

(f)  “Code” means the Internal Revenue Code of 1986, as amended.

(g)  “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(h)  “Good Reason” means

(1)  a significant diminution of the Participant’s positions, duties, responsibilities or status with the Company as in effect immediately prior to the Change in Control;

(2)  an aggregate reduction of fifteen percent or more of the sum of (A) the Participant’s annual base salary as in effect as of immediately prior to the Change in Control plus (B) the Participant’s target annual bonus opportunity as in effect as of immediately prior to the Change in Control;

(3)  a relocation following the Change in Control of the Participant’s principal place of business to a location that is outside a 50-mile radius from the Participant’s principal place of business immediately prior to the Change in Control, except for required travel on the Company’s business to an extent substantially consistent with the Participant’s business travel obligations as of immediately prior to the Change in Control;

(4)  the failure by the Company to continue in effect any cash-based 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 cash-based performance awards and similar incentive compensation benefits) in which the Participant is participating as of immediately prior to the Change in Control (or to substitute and continue other plans or arrangements that provide the Participant with substantially similar benefits), except as otherwise required by the terms of such plans or arrangements as in effect as of immediately prior to the Change in Control, or the taking of any action by the Company which would adversely affect the Participant’s participation in or materially reduce the Participant’s benefits under any such plan or arrangement; provided that the acceleration of a payment under 

 

Valvoline Change in Control Severance Plan

3

 

any such cash-based incentive plan or arrangement shall not by itself constitute a failure to continue such plan or arrangement or an action that affects the Participant’s participation in such plan or arrangement; or

(5)  the failure by the Company to grant the Participant following the Change in Control new awards under any equity or equity-based compensation plan or arrangement of the Company (including, without limitation, any plan or arrangement to receive grants of stock options, stock appreciation rights, restricted stock, restricted stock units or similar awards) in which the Participant is participating as of immediately prior to the Change in Control (or under other plans or arrangements that provide the Participant with substantially similar benefits), except as otherwise required by the terms of such plans or arrangements as in effect as of immediately prior to the Change in Control, or the taking of any action by the Company which would adversely affect the Participant’s participation in or materially reduce the Participant’s benefits under any such plan or arrangement.

However, Good Reason shall not exist unless and until the Participant provides the Company with written notice of the act(s) alleged to constitute Good Reason within 90 days of the Participant’s knowledge of the occurrence of such acts(s), and the Company fails to cure such acts within 30 days of receipt of such notice. Further, if the Company fails to cure such act(s) within this 30-day period, then the Participant must exercise the right to terminate his or her employment for Good Reason within 60 days thereafter, in writing, in order for the termination to be for Good Reason.

(i)  Non-CIC Severance Amount” means the amount of severance (if any) that a Participant would have been entitled to receive under the Non-CIC Severance Plan had the Participant’s termination of employment entitled the Participant to receive severance payments under such plan that would have been considered “deferred compensation” for purposes of Section 409A.  For the avoidance of doubt, in the event the Participant’s Qualifying Termination occurs under circumstances described in clause (ii) of such defined term, any severance that the Participant is entitled to receive under the Non‐CIC Severance Plan in connection with such Qualifying Termination shall not be considered a “Non‐CIC Severance Amount” for purposes of this Plan.

(j)  “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.

(k)  “Plan Administrator” means the board of directors of Valvoline or any committee thereof duly authorized by the board of directors of Valvoline to administer the Plan.

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

(m)  “Qualifying Termination” means (i) the termination of a Participant’s employment during the two-year period immediately following a Change in Control either by the Company without Cause or by the Participant for Good Reason or (ii) the termination of a Participant’s employment during the six-month period immediately preceding a Change in Control under circumstances that entitle the Participant to receive severance payments and benefits under the 

 

Valvoline Change in Control Severance Plan

4

 

Non-CIC Severance Plan.  A Qualifying Termination described in clause (ii) of the immediately preceding sentence shall be deemed to occur upon the occurrence of the Change in Control for purposes of the Plan.

(n)  “Release Period” means the later of (i) the 14th day following the Participant’s Qualifying Termination and (ii) the expiration of any applicable consideration and revocation periods under the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act, but in any event no later than the 55th day following the Participant’s Qualifying Termination.

(o)  “Section 409A” means Section 409A of the Code.

(p)  “Severance Agreement and General Release” means a severance agreement prepared by appropriate Company legal counsel that includes, without limitation, (i) a general release of claims in favor of the Company, its affiliates and their respective officers and directors, (ii) non-competition, non-solicitation and non-interference, non-disparagement, confidentiality and further cooperation provisions substantially similar to those provided in Appendix A hereto. The Severance Agreement and General Release may also provide that the Participant’s severance payments and benefits under the Plan will be reduced by any amounts the Participant owes to the Company, to the extent permitted under Section 409A. The Severance Agreement and General Release may encompass other matters in addition to addressing the severance payments and benefits payable under the Plan. Additionally, the Severance Agreement and General Release may be changed for each termination covered by the Plan.

(q)  “Severance Multiplier” means (i) three in the case of the CEO, if the CEO is a Participant, and (ii) two in the case of all other Participants.

(r)  “Target Annual Bonus” means the Participant’s target annual cash bonus for the year in which the Participant’s Qualifying Termination occurs or, if greater, for the year in which a Change in Control occurs.

(s)  Valvoline Stock Distribution” shall mean the transaction or series of transactions initially approved by the Board of Directors of Ashland Inc. on September 16, 2015 intended to separate the Valvoline business from Ashland Inc.’s specialty chemical business and create two independent, publicly-traded companies.

SECTION 5. CONDITIONS FOR SEVERANCE PAYMENTS AND BENEFITS

A Participant’s entitlement to any severance payments and benefits described in Section 6 shall be subject to:

(a)  the Participant experiencing a Qualifying Termination; and

(b)  the Participant executing and delivering to the Company a Severance Agreement and General Release and the Severance Agreement and General Release becoming effective and irrevocable by the expiration of the applicable Release Period.

 

Valvoline Change in Control Severance Plan

5

  

SECTION 6. AMOUNT OF SEVERANCE PAYMENTS AND BENEFITS AND TIMING OF PAYMENTS

If a Participant has a Qualifying Termination, then, subject to Section 5, the Company will provide the Participant with the following:

(a)  Severance Payment.  An amount equal to the product of (i) the Participant’s Severance Multiplier multiplied by (ii) the sum of (A) the Participant’s Annual Base Salary plus (B) the Participant’s Target Annual Bonus; and

(b)  Pro-Rata Severance Bonus.  A pro-rata severance bonus (in lieu of any payment under the applicable annual cash bonus or annual incentive plan in which the Participant participates at the time of his or her termination (if any)) in an amount equal to (i) the Participant’s Target Annual Bonus multiplied by (ii) a fraction, the numerator of which is the number of full months the Participant worked during the applicable plan year prior to the date of the Participant’s Qualifying Termination and the denominator of which is 12.

(c)  Continued Coverage Under Group Health Plans.  Participant’s then-existing coverage under the Company’s group health plans (and, if applicable, the then-existing group health plan coverage for the Participant’s eligible dependents) will end on the date of the Participant’s Qualifying Termination.  The Participant and his or her eligible dependents may then be eligible to elect temporary coverage under the Company’s group health plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  If the Participant elects COBRA continuation coverage, then the Participant and his or her eligible dependents will continue to be covered under the Company’s group health plans, and the Company will pay the premiums for such coverage, to the extent it is available, during the duration of the Participant’s Benefit Continuation Period.  After such period of employer-paid coverage, the Participant may continue COBRA coverage, to the extent it is available, at the Participant’s own expense in accordance with COBRA.  No provision of this Plan will affect the continuation coverage rules under COBRA or the length of time during which COBRA coverage will be made available to the Participant, and all of the Participant’s other rights and obligations under COBRA will be applied in the same manner that such rules would apply in the absence of this Plan.  Notwithstanding any of the foregoing, the Company, in its sole discretion, may amend or terminate any of its group health plans prior to or following a Participant’s Qualifying Termination in accordance with the terms and provisions of its group health plans.

(d)  Legal Fees.  Reimbursement of any reasonable legal fees or expenses incurred by the Participant during the Participant’s lifetime to enforce the payment of amounts under this Plan, as soon as practicable following the Participant’s presentation of reasonable documentation of such fees to the Company, and otherwise in accordance with the provisions of Section 14 paragraph (c) herein.

(e)  Outplacement Services.  Up to $25,000 in outplacement services with a firm to be selected and approved by the Company, for a period of no more than 24 consecutive months following the date of the Participant’s Qualifying Termination.  The Company will make such payment directly to the outplacement firm.

 

Valvoline Change in Control Severance Plan

6

  

A Participant’s long-term equity incentive awards shall be treated in accordance with the terms of the applicable plan and award agreement.

Participants shall be entitled to receive any pension, disability, workers’ compensation, other Company benefit plan distributions, payment for vacation accrued but not taken, statutory employment termination benefit, or any other compensation plan payment otherwise independently due; however, except as otherwise provided in this Section 6, in no event shall a Participant who receives benefits under the Plan be entitled to additional severance payment pursuant to any other existing severance policy or plan of the Company.

A Participant shall be entitled to interest on the amount of any payments due under the Plan (but not timely paid) in an amount equivalent to the prime rate of interest (quoted by Citibank, N.A. as its prime commercial lending rate) on the latest date practicable prior to the date such payments should have been made, to and including the date it is made; provided, however, that such payment, including the applicable interest, shall be made no later than March 15 of the calendar year following the calendar year in which the Participant’s Qualifying Termination occurs.

The amounts described in Sections 6(a) and 6(b) (the aggregate amount of such payments, the “CIC Cash Severance”) shall be paid to the Participant as follows:

(1)  a portion of the CIC Cash Severance equal to the Participant’s Non-CIC Severance Amount shall be paid as follows:

(A)  if the Change in Control is not considered a “change in control event” within the meaning of Section 409A, 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 (including any provisions relating to the timing of the Participant’s release of claims); or

(B)  if the Change in Control is considered a “change in control event” within the meaning of Section 409A, then such Non-CIC Severance Amount shall be paid in a single lump-sum cash payment within the 60-day period following the Participant’s Qualifying Termination, so long as the Participant’s Severance Agreement and General Release becomes effective and irrevocable in accordance with its terms prior to the expiration of the applicable Release Period; and

(2)  the remainder of the CIC Cash Severance shall be paid in a single lump-sum cash payment within the 60-day period following the Participant’s Qualifying Termination, so long as the Participant’s Severance Agreement and General Release becomes effective and irrevocable in accordance with its terms prior to the expiration of the applicable Release Period.

Notwithstanding the foregoing, if the Participant is a “specified employee” as determined under the Company’s policy for determining specified employees as of the date of the Participant’s Qualifying Termination, then a portion of the CIC Cash Severance equal to the Participant’s 

 

Valvoline Change in Control Severance Plan

7

 

Non-CIC Severance Amount shall be subject to the six-month delay described in Section 14 herein.

In addition, in the event the Participant’s Qualifying Termination occurs under circumstances described in clause (ii) of such defined term, then any severance that the Participant is entitled to receive under the Non CIC Severance Plan in connection with such Qualifying Termination shall be paid in accordance with the Non CIC Severance Plan (including any provisions relating to the timing of the Participant’s release of claims, and such payment shall be subject to the six month delay described in the Non-CIC Severance Plan to the extent required thereunder).  Solely the remainder of the Participant’s CIC Cash Severance shall be payable hereunder, and such amount shall be paid in a single lump-sum cash payment within the 60-day period following the Participant’s Qualifying Termination, so long as the Participant’s Severance Agreement and General Release becomes effective and irrevocable in accordance with its terms prior to the expiration of the applicable Release Period.

SECTION 7. CLAWBACK

The severance payments and benefits under the Plan are subject to any policy (whether in existence as of the effective date of the Plan or later adopted) established by the Company providing for clawback or recovery of amounts that were paid to the Participant.  In addition, if within 24 months following a Participant’s Qualifying Termination, the Company discovers that circumstances existed at the time of the Participant’s termination of employment such that the Participant’s termination of employment would not have constituted a Qualifying Termination, or that the Participant violated a restrictive covenant agreement between the Participant and the Company or any restrictive covenant contained in the Participant’s Severance Agreement and General Release, then:

(i)  the Participant’s right to receive any further severance payments or benefits under the Plan shall be immediately forfeited;

(ii)  the Company may eliminate or reduce the amount of any compensation, benefit, or payment otherwise payable by the Company (either directly or under any employee benefit or compensation plan, agreement, or arrangement) to or on behalf of the Participant in an amount up to the total amount paid or payable to the Participant under the Plan (except to the extent such compensation, benefit or payment constitutes deferred compensation under Section 409A and such elimination or reduction would trigger a tax or penalty under Section 409A); and

(iii)  the Company may require the Participant to pay to the Company an amount up to the total amount paid to the Participant under the Plan;

in the case of each of clauses (ii) and (iii), together with the amount of the Company’s and its Subsidiary’s court costs, attorney fees and other costs and expenses incurred in connection therewith.

 

Valvoline Change in Control Severance Plan

8

  

SECTION 8. SECTION 280G

In the event that a Participant becomes entitled to receive severance payments and benefits under the Plan, or a Participant becomes entitled to receive any other amounts in the “nature of compensation” (within the meaning of Section 280G of the Code and the regulations promulgated thereunder (“Section 280G”)) pursuant to any other plan, arrangement or agreement with the Company, with any person whose actions result in a change of ownership or effective control covered by Section 280G(b)(2) of the Code or with any person affiliated with the Company or such person, in each case 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 imposed by Section 4999 of the Code (the “Excise Tax”), then the Company Payments will 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, the net amount retained by the Participant would be greater in the event of such reduction in Company Payments than if such reduction in Company Payments did not occur, as determined by the Plan Administrator.  To the extent the Cutback applies, the Company Payments will be reduced in the following order: first, the reduction of cash payments not attributable to long-term incentive awards which vest on an accelerated basis; second, the cancelation of accelerated vesting of long-term incentive awards, third, the reduction of employee benefits; and fourth, any other “parachute payments” (as defined in Section 280G). The Participant will be solely liable for any Excise Tax.

SECTION 9. CLAIMS PROCEDURE

(a)  Following a Qualifying Termination, the severance payments and benefits described in Section 6 of the Plan shall be paid as described therein without any required action on the part of such Participant.

(b)  If any Participant believes that he or she is entitled to severance payments or benefits provided under the Plan and has not received such severance payments or benefits within the time prescribed by the Plan, such Participant may submit a written claim for payment of such severance payments and benefits to the Company.  If such claim is wholly or partially denied, the Company shall, within 30 business days after receipt of the claim, notify the Participant of the denial of the claim. Such notice of denial (i) shall be in writing, (ii) shall be written in a manner calculated to be understood by the Participant, and (iii) shall contain (A) the specific reason or reasons for denial of the claim, (B) a specific reference to the pertinent Plan provisions upon which the denial is based, (C) a description of any additional material or information necessary to perfect the claim, along with an explanation of why such material or information is necessary, and (D) an explanation of the claim review procedure, in accordance with the provisions of this Section 9.  It will also provide that the Participant may file a civil action under Section 502 of ERISA (§29 U.S.C. 1132).  The Participant may complete the Plan’s appeal procedure before filing a civil action in court or the Participant may proceed directly with filing a civil action in a court of competent jurisdiction in Fayette County, Kentucky.

 

 

Valvoline Change in Control Severance Plan

9

  

(c)  Within 60 business days after the receipt by the Participant of a written notice of denial of the claim, or such later time as shall be deemed reasonable taking into account the nature of the benefit subject to the claim and any other attendant circumstances, the Participant may file a written request with the Company that it conduct a full and fair review of the denial of the claim for benefits.  As a part of such full and fair review, the Participant (or such Participant’s duly authorized representative) may review and photocopy pertinent documents (including but not limited to the Participant’s personal history file) and submit issues and comments to the Company in writing.  The Participant may also submit materials supporting his or her appeal that will be considered by the Company, even if they were not part of the initial claim review.  The Company shall make its determination in accordance with the documents governing the Plan insofar as such documents are consistent with the provisions of ERISA.

(d)  The Company shall promptly deliver to the Participant its written decision on the claim (in no event later than 30 business days after the receipt of the aforesaid request for review, except that if there are special circumstances (such as a conference with the Participant or his or her representative) which require an extension of time, the aforesaid 30 business day period shall be extended to a reasonable period of time not to exceed 60 business days).  Such decision shall (i) be written in a manner calculated to be understood by the Participant, (ii) include the specific reason or reasons for the decision, (iii) contain a specific reference to the pertinent Plan provisions upon which the decision is based, (iv) a statement that the Participant may receive free of charge reasonable access to or copies of documents, records and other information relevant to the claim, and (v) a statement that the Participant may file a civil action under Section 502 of ERISA (§29 U.S.C. 1132).  If the decision on review is not furnished within the time prescribed by this Section 9(c), the claim shall be deemed granted on review.

SECTION 10. AMENDMENTS AND TERMINATIONS

The Plan Administrator shall have plenary authority to amend, modify, or terminate the Plan in such respects as it shall deem advisable at any time prior to a Change in Control or following the second anniversary of a Change in Control.  Notwithstanding the foregoing, no such amendment, modification or termination that has the effect of adversely affecting any Participant who experienced a Qualifying Termination prior to, or who experiences a Qualifying Termination within the six-month period following, such amendment, modification or termination will be effective without the written consent of such Participant.  For the avoidance of doubt, if an individual’s employment is terminated under circumstances that entitle the individual to receive severance payments and benefits under the Non-CIC Severance Plan and the individual participated in the Plan as of immediately prior to such termination, then such individual shall continue to be treated as a Participant for no less than the six-month period immediately following such termination.  No amendment, modification, or termination of the Plan at any time following a Change in Control and prior to the second anniversary thereof that has the effect of adversely affecting any Participant will be effective without the written consent of such Participant.

 

Valvoline Change in Control Severance Plan

10

  

SECTION 11. SUCCESSORS; BINDING AGREEMENT

(a)  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance reasonably satisfactory to Participants, expressly to assume and agree to provide severance payments and benefits pursuant to the Plan in the same manner and to the same extent that the Company would be required to perform its obligations under the Plan if no such succession had taken place.  As used in the Plan, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 11 or which otherwise becomes bound by all the terms and provisions of the Plan by operation of law.

(b)  The Plan shall inure to the benefit of and be enforceable by a Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.  If a Participant should die while any amounts would still be payable to him or her hereunder if he or she had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of the Plan to such Participant’s devisee, legatee, or other designee or, if there be no such designee, to his or her estate.

SECTION 12. WITHHOLDING TAXES

The Company is authorized to withhold any tax required to be withheld from the amounts payable to a Participant pursuant to the Plan which are considered taxable compensation to the Participant.

SECTION 13. GOVERNING LAW

The Plan shall be governed by the laws of the Commonwealth of Kentucky, to the extent not preempted by federal law.

SECTION 14. SECTION 409A

(a)  It is intended that the severance payments and benefits provided under Section 6 of the Plan shall be exempt from, or comply with, the requirements of Section 409A.  The Plan shall be construed, administered and governed in a manner that affects such intent, and the Company shall not take any action that would be inconsistent with such intent.  Specifically, any taxable benefits or payments provided under the Plan are intended to be separate payments that qualify for the “short-term deferral” exception to Section 409A to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the separation pay exceptions to Section 409A, to the maximum extent possible.  To the extent that none of these exceptions (or any other available exception) applies, then notwithstanding anything contained herein to the contrary, and to the extent required to comply with Section 409A, if a Participant is a “specified employee,” as determined under the Company’s policy for identifying specified employees on his or her date of termination, then all amounts due under the Plan that constitute a “deferral of compensation” within the meaning of Section 409A, that are provided as a result of a “separation from service” within the meaning of Section 409A, and that would otherwise be paid or provided 

 

Valvoline Change in Control Severance Plan

11

during the first six months following the Participant’s 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 the Participant’s separation from service (or, if the Participant dies during such six-month period, within 30 calendar days after the Participant’s death).

(b)  A termination of employment shall not be deemed to have occurred for purposes of any provision of the Plan providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and the Participant is no longer providing services (at a level that would preclude the occurrence of a “separation from service” within the meaning of Section 409A) to the Company as an employee or consultant, and for purposes of any such provision of the Plan, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” within the meaning of Section 409A.

(c)  With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) 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 (iii) such payments shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder.

SECTION 15. NO RIGHT TO CONTINUED EMPLOYMENT

Participation in the Plan does not create a contract of employment between the Company and any Participant.  The Company reserves the right to terminate Participants at any time for any reason, just as Participants have the right to terminate their employment at any time for any reason.

Valvoline Change in Control Severance Plan

12

Appendix A

Post-Termination Obligations

1.    Competitive Activity.  During the [24]1[36]2-month period immediately following the date of your Qualifying Termination (the “Restricted Period”), you shall not, directly or indirectly:

		(a)	
participate in the management of any business operation of any enterprise that engages in direct competition with any business operation actively conducted by the Company or its divisions and Subsidiaries as of the date of the Participant’s termination of employment.

		(b)	
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;

		(c)	
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

		(d)	
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.

Notwithstanding the foregoing, this Section 1 shall not be violated solely as a result of your mere ownership of securities in any enterprise.

2.    Confidentiality.  All Confidential Information (as defined below) which you acquire or have acquired in connection with or as a result of the performance of services for the Company shall be kept secret and confidential by you for so long as the information you acquire or have acquired remains Confidential Information, unless (a) the Company otherwise consents, (b) you are legally required to disclose such Confidential Information by a court of competent jurisdiction, (c) you disclose such Confidential Information to the United States Securities and Exchange Commission, to the extent necessary to report suspected or actual violations of United States securities laws or (d) 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 (c) or (d) above, you are not required to inform the Company, in advance or otherwise, that you have made such disclosure(s), and nothing herein 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.  “Confidential Information” shall mean information relating to the Company’s, its divisions’ and 

 

 

1 In the case of all Participants other than the CEO.

2 In the case of the CEO.

 

A-1

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.

3.    Non-disparagement.  You agree that you will not at any time make any oral or written defamatory or disparaging remarks, comments or statements concerning the Company or any of its subsidiaries or affiliates, or any of their directors, officers or employees; provided, however, that nothing herein shall prevent you from (i) making truthful remarks, comments or statements in good faith in response to any governmental or regulatory inquiry or in any judicial, administrative or other proceeding or governmental investigation or (ii) providing any information that may be required by law)._This paragraph is not intended to, and shall be interpreted in a manner that does not, limit or restrict you from exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the Exchange Act). Specifically, nothing in this paragraph shall prohibit you from (A) filing and, as provided under Section 21F of the Exchange Act, maintaining the confidentiality of, a claim with any governmental agency that is responsible for enforcing a law, (B) making any oral or written remarks, comments or statements to the extent required by law or legal process or permitted by Section 21F of the Exchange Act or (C) cooperating, participating or assisting in any governmental or regulatory entity investigation or proceeding,

4.    Cooperation.  If reasonably requested by the Company, you shall cooperate with the Company in connection with any investigations, arbitrations, litigations or similar matters that may arise out of your service to the Company.  The Company shall make reasonable efforts to minimize disruption to your other activities and will reimburse you for reasonable expenses incurred in connection with such cooperation.

5.    Injunctive Relief.  In the event of a breach or threatened breach of any covenant contained herein, you agree that the Company shall be entitled to injunctive relief in a court of appropriate jurisdiction to remedy any such breach or threatened breach, and that damages would be inadequate and insufficient.  You shall not, and hereby waive and release any rights or claims to, contest or challenge the reasonableness, validity or enforceability of the restrictions contained in this Plan, whether in court, arbitration or otherwise.

 

A-2Exhibit 10.4

VALVOLINE SEVERANCE PAY PLAN

 

 

VALVOLINE SEVERANCE PAY PLAN

(bands 20, EG01, EG02 and UNG)

 TABLE OF CONTENTS

 

	
INTRODUCTION

	
1

	
PLAN INFORMATION

	
1

	 	
Eligibility

	
1

	 	
Exclusions from Eligibility

	
1

	 	
Conditions of Severance Payments and Benefits

	
2

	 	 	
Good Reason

	
3

	 	
Amount of Severance Payments and Benefits

	
3

	 	 	
Method of Payment

	
5

	 	
Clawback

	
5

	 	
Payments to Specified Employees

	
6

	 	
Duplication of Payments

	
7

	 	 	
Continuous Service

	
7

	 	
Terminations Not Covered

	
7

	 	
Section 280G Cutback

	
8

	 	
Deferred Terminations

	
9

	
CLAIM PROCEDURES

	
9

	 	
How to Apply for Benefits

	
9

	 	
Notice of Claim Denial/Right of Appeal

	
9

	 	 	
Initial Claim - Notice of Denial

	
9

	 	 	
Appeal of Denied Claim

	
10

	 	
Plan Sponsor/Administrator

	
11

	 	
Plan Identification

	
12

	 	
Plan Year

	
12

	 	
Legal Service

	
12

	 	
Method of Funding

	
12

	 	
Your Rights

	
12

	 	
Plan Interpretations/Administration

	
13

	 	
Plan Documents

	
14

	 	
Section 409A

	
14

	 	
Non-Assignments of Benefits

	
14

	 	
Plan Amendment/Termination

	
14

 

 

 

 

	 	
Successors

	
15

	 	
Authority to Delegate

	
15

	 	
Elections and Notices

	
15

	 	
Applicable Law

	
15

 

 

INTRODUCTION

This booklet describes the Valvoline Severance Pay Plan as applied to employees of the company in bands 20, EG01, EG02 and band UNG (the “Designated Groups”).  The plan may provide compensation to you if your active employment is terminated under certain circumstances.  This booklet describes the plan as in effect on May 15, 2017.

If you have questions about the plan, please contact your local Human Resources Representative.

No provision of the plan: (1) gives any employee the right to continued employment; (2) affects the company’s right to terminate or discharge an employee at any time; (3) gives the company the right to require any employee to remain employed; or (4) affects any employee’s right to terminate employment.

References to “Valvoline” or the “company” refer to Valvoline Inc., its subsidiaries, its commercial units and its divisions.  References to the “plan sponsor” or “plan administrator” refer to Valvoline Inc.

PLAN INFORMATION

Eligibility

You are eligible to participate in this plan if you are a regular, full-time employee of the company in a Designated Group as of immediately prior to your termination of employment.

Exclusions from Eligibility

Notwithstanding the foregoing, you are not eligible to participate in the plan if:

		·	
You are covered by a collective bargaining agreement, unless the collective bargaining agreement provides you are eligible for the plan;

		·	
You are party to an employment agreement or other agreement with the company that provides severance payments or benefits, other than an employment agreement or other agreement with the company that provides severance payments or benefits solely in connection with a “Change in Control” of the Company;

		·	
You are in a classification of one or more employees designated in advance by the plan sponsor as exempted from participating in the plan (e.g., you became employed with the company as part of a purchase of a business and the plan sponsor determines that the group of employees of which you are a part is not eligible to participate in the plan);

		·	
You are employed by a non-U.S. subsidiary of the company (unless you are a U.S. employee on expatriate assignment); or

 

 

 

		·	
You reside and work outside of the United States and you are subject to a statutory severance or similar obligation required under the law of the foreign jurisdiction in which you work.

Conditions of Severance Payments and Benefits

If you are eligible to participate in the plan, you will be entitled to receive severance payments and benefits under the plan if the plan administrator determines that your termination occurs as a direct result of:

		1.	
the permanent closing of a location or plant;

		2.	
job discontinuance;

		3.	
resignation for Good Reason (as defined below); or

		4.	
any circumstances in which your active employment is terminated at the company’s initiative for reasons not excluded under the plan.  (See the Terminations Not Covered section for limitations.)

However, for severance payments and benefits to become payable, you must satisfy the terms and conditions contained in the plan, including the following:

		1.	
If you are given advance notice, you must continue to work until you are officially released by the company; and

		2.	
You must sign and execute a Severance Agreement and General Release prepared by appropriate company legal counsel, and the Severance Agreement and General Release must become effective and irrevocable in accordance with its terms by the later of (i) the 14th day following your termination of employment and (ii) the expiration of any applicable consideration and revocation periods under the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act, but in any event no later than the 55th day following your termination of employment (the applicable “Review Period”).

The Severance Agreement and General Release will include a general release of claims in favor of the company, its affiliates and their respective officers and directors, and may include provisions regarding non-competition, non-solicitation, non-interference, non-disparagement, confidentiality and further cooperation.  The Severance Agreement and General Release may be changed for each termination covered by this plan.

Your Human Resources representative will coordinate the preparation and execution of the Severance Agreement and General Release and provide you with a copy for your file.  You will be responsible for obtaining any legal advice you determine to be necessary.

 

  

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

2

 

Good Reason

“Good Reason” means the occurrence of any of the following without your consent:

		·	
an aggregate reduction of 15 percent or more to the sum of (i) your annual base salary, plus (ii) your target annual bonus opportunity: or

		·	
the relocation of your principal place of business by more than 50 miles.

Good Reason will not exist unless and until you provide the company with written notice of the act(s) alleged to constitute Good Reason within 90 days of your knowledge of the occurrence of such act(s), and the company fails to cure such acts within 30 days of receipt of such notice.  Further, if the company fails to cure such act(s) within this 30-day period, then you must exercise the right to terminate your employment for Good Reason within 60 days thereafter, in order for the termination to be for Good Reason.

Amount of Severance Payments and Benefits

If you are eligible to participate in the plan and you satisfy the conditions for severance payments and benefits, you will be entitled to receive the severance payments and benefits described below.  See the Duplication of Payments and Deferred Terminations sections for limitations.

 

	1.	
Severance Payments.  You will be entitled to receive severance payments in an aggregate amount equal to the following number of weeks of your base rate of pay (such number of weeks, your “Severance Period”).  See the Method of Payment section for payment procedures.  Your base rate of pay will be determined by the plan administrator in accordance with the company’s customary procedures.

 

	
Position/Band

	
Severance Period

	
Chief Executive Officer

	
104 weeks of base rate of pay

	
Other Band UNG

	
78 weeks of base rate of pay

	
Band EG02

	
52 weeks of base rate of pay

	
Bands 20 and EG01

	
2 weeks of base rate of pay for each completed year of Continuous Service (as described below), but in any case no less than 4 weeks and no more than 52 weeks.

	2.	
Prorated Severance Bonus.  You will be entitled to receive a prorated severance bonus in lieu of any payment under the applicable annual cash bonus or annual incentive plan in which you participate at the time of your termination (if any).  The amount of such pro-rata severance bonus will be based on the amount you would have received under the plan had you remained employed through the date required to receive a payment for the plan year in which your termination date occurs, based on the company’s actual performance for the plan year as

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

3

 

		
determined by the company.  This amount will be pro-rated based on a fraction, the numerator of which is the number of full months you worked during the applicable plan year prior to the date of your termination and the denominator of which is 12.  The pro-rata severance bonus will be paid to you in cash at the time payments are otherwise made under the applicable annual cash bonus or annual incentive plan, but in no event later than the date required to qualify such payment as a “short-term deferral” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code” and “Section 409A”).

 

	3.	
Outplacement Services.  You will be entitled to receive up to the following aggregate amount in outplacement services with a firm to be selected and approved by the company, for a period of no more than 24 consecutive months following your termination date.  The company will make such payment directly to the outplacement firm.

 

	
Position/Band

	
Severance Period

	
Chief Executive Officer and Other Band UNG

	
$25,000

	
Band EG02

	
$15,000

	
Band EG01

	
$10,000

	
Band 20

	
$7,500

 

	4.	
Continued Coverage Under Group Health Plans.  Your then-existing coverage under the company’s group health plans (and, if applicable, the then-existing group health plan coverage for your eligible dependents) will end on the date on which your employment terminates.  You and your eligible dependents may then be eligible to elect temporary coverage under the company’s group health plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  If you elect COBRA continuation coverage, then you and your eligible dependents will continue to be covered under the company’s group health plans, and the company will pay the premiums for such coverage, to the extent it is available, during the duration of your Severance Period.  After such period of employer-paid coverage, you may continue COBRA coverage, to the extent it is available, at your own expense in accordance with COBRA.  No provision of the plan will affect the continuation coverage rules under COBRA or the length of time during which COBRA coverage will be made available to you, and all your other rights and obligations under COBRA will be applied in the same manner that such rules would apply in the absence of the plan.  Notwithstanding any of the foregoing, the company, in its sole discretion, may amend or terminate any of its group health plans prior to or following your termination date in accordance with the terms and provisions of its group health plans.

Your long-term equity incentive awards will be treated in accordance with the terms of the applicable plan and award agreement.

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

4

 

Method of Payment

Severance payments will be made in equal installments during your Severance Period in accordance with the company’s normal payroll practices (e.g., every two weeks), beginning with the first company payroll date that occurs after your termination of employment, so long as your Severance Agreement and General Release has become effective and irrevocable in accordance with its terms.  Any amounts that would otherwise be paid before your Severance Agreement and General Release has become effective and irrevocable in accordance with its terms will be delayed and will be paid in a single lump sum on the first company payroll date that occurs after your Severance Agreement and General Release becomes effective and irrevocable in accordance with its terms, so long as your Severance Agreement and General Release becomes effective and irrevocable in accordance with its terms prior to the expiration of the applicable Review Period.  If, however, (i) a portion of your benefits exceeds the threshold amount set forth below in the Payments to Specified Employees section (regardless of whether you qualify for Specified Employee status at the time of your termination), and (ii) the applicable Review Period (as defined herein) spans two calendar years, the first payment shall commence on the first company payroll date that occurs in the second calendar year and after the Severance Agreement and General Release has become effective and irrevocable in accordance with its terms (and such first installment shall include all installment payments that would otherwise have been paid prior to such date if this provision did not apply), except as otherwise provided in the Payments to Specified Employees section.  Payments to Specified Employees are subject to special limits and certain severance payments to Specified Employees may be delayed as described in the Payments to Specified Employees section.  Notwithstanding anything contained herein to the contrary, the plan sponsor reserves the right to determine the method of payment of any severance payment or benefit, in its sole discretion, to the extent the payment or benefit does not constitute deferred compensation under Section 409A.

Severance payments under this plan cannot be contingent upon your retirement and the amount thereof cannot exceed twice your annual compensation during the preceding year.  For this purpose, “annual compensation” means the total amount that was paid or would have been paid to you if you had been employed with the company during all of the preceding calendar year, as determined by the plan sponsor.

Severance payments and benefits under this plan are subject to all applicable federal and state tax withholding, including FICA.

Any election before your termination to defer salary to the Valvoline Deferred Compensation Plan stops at your termination of active employment.

Clawback

The severance payments and benefits under this plan are subject to any policy (whether in existence as of the effective date of this plan or later adopted) established by the company providing for clawback or recovery of amounts that were paid to you.  In addition, if within 24 months following the termination of your employment, the company discovers

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

5

 

that circumstances existed at the time of your termination such that your termination would be a termination in which you were not eligible to receive severance (refer to the section entitled Terminations Not Covered), or that you violated the terms of any agreement between you and the company, including any restrictive covenant contained in your Severance Agreement and General Release, then:

 

(i)              your right to receive any further severance payments or benefits under this plan shall be immediately forfeited;

 

(ii)           the company may eliminate or reduce the amount of any compensation, benefit, or payment otherwise payable by the company (either directly or under any employee benefit or compensation plan, agreement, or arrangement) to you or on your behalf in an amount up to the total amount paid or payable to you under this plan (except to the extent such compensation, benefit or payment constitutes deferred compensation under Section 409A and such elimination or reduction would trigger a tax or penalty under Section 409A); and

(iii)          the company may require you to pay to the company an amount up to the total amount paid to you under this plan;

in the case of each of clauses (ii) and (iii), together with the amount of the company’s court costs, attorney fees, and other costs and expenses incurred in connection therewith.

Payments to Specified Employees

“Specified Employee” status is determined by the plan sponsor as of December 31 of each year and is then effective for the 12-month period beginning on January 1 of the next calendar year.

Severance payments to a Specified Employee that exceed a specified threshold amount are subject to a six-month delay of payment.  The threshold amount is equal to the sum of (i) the amount of your severance that is considered a “short-term deferral” for purposes of Section 409A, plus (ii) the lesser of the following amounts (to the extent the amounts described in this clause (ii) are paid no later than the last day of the Specified Employee’s second tax year following the tax year in which his or her termination occurs):

		·	
Two times your annual base pay for the prior calendar year (adjusted for any increase that occurred during that year and that was expected to last indefinitely, but for the termination); and

		·	
Two times the maximum limit under Section 401(a)(17) of the Code for the year of the termination ($540,000 in 2017, which is two times the 2017 limit of $270,000).

The excess of the total amount of severance payments over the threshold amount is considered “deferred compensation” for purposes of Section 409A and, if that excess would otherwise be paid to a Specified Employee within six months of his or her termination, it cannot be paid until the first payroll date of the seventh month following

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

6

 

the Specified Employee’s termination.  The amount that must be delayed, as determined by the plan administrator, would be paid in a single lump sum in the seventh month following the Specified Employee’s termination, unadjusted for any earnings.

Duplication of Payments

There will be no duplication of severance payments or benefits for the same period of Continuous Service (as described below).  For example, to the extent permitted by Section 409A, you will not receive severance payments or benefits under this plan to the extent you previously received payments or benefits under this plan, or you received or are entitled to receive any other payment in the nature of a severance payment or benefit, with respect to the same period of Continuous Service.

Continuous Service

“Continuous Service” is your period of employment, generally ending on the date of your termination and beginning with the latest of:

		·	
your hire date;

		·	
your rehire date; or

		·	
your adjusted service date, as determined by the plan administrator in accordance with the company’s customary procedures.

Your period of employments with Ashland Global Holdings Inc. or any of its subsidiaries prior to the initial public offering of the company’s common stock will count towards your Continuous Service for purposes of this plan.

Terminations Not Covered

Except as otherwise determined by the plan sponsor, the following are circumstances when termination of active employment with the company would not result in the payment of severance benefits under this plan:

 

		1.	
Refusal to sign, or revocation of, the Severance Agreement and General Release provided by the company;

		2.	
Discharge for less than effective performance, absenteeism or misconduct;

		3.	
Voluntary resignations without Good Reason (as defined herein);

		4.	
Declining an offer by the company or a purchaser or successor of the company of equivalent employment as an alternative to termination, provided that a transfer to a new geographic location shall not be considered to be “equivalent employment”;

		5.	
Accepting an offer of employment by the company of non-equivalent employment;

		6.	
The sale, exchange or transfer of company property to another employer who assumes the operations of a company facility or business, unless such sale, exchange or transfer results in unemployment caused by reasons

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

7

 

			
other than the employee’s refusal to accept or continue employment with the new employer, as determined by the plan sponsor;

		7.	
Terminations following (but not prior to) a “Change in Control” of the Company if the employee is a party to an employment agreement or other agreement with the Company that provides for severance payments or benefits in connection with such event, or if the employee is a participant in the “Valvoline Change in Control Severance Plan”;

		8.	
Death;

		9.	
Retirement;

		10.	
Entitlement to severance payments or benefits under an employment agreement or other agreement with the company that provides for severance payments or benefits, other than an employment agreement or other agreement with the company that provides for severance payments or benefits solely in connection with a “Change in Control” of the Company;

		11.	
Terminations while on a personal unpaid leave of absence when reinstatement attempts following the expiration of any leave guaranteed by law are unsuccessful; and

		12.	
Subject to certain terminations (refer to the section entitled Deferred Terminations), when an employee is able but does not return to work following a period of disability.

Section 280G Cutback

In the event that you become entitled to receive severance payments and benefits under this plan, or you become entitled to receive any other amounts in the “nature of compensation” (within the meaning of Section 280G of the Code and the regulations promulgated thereunder (“Section 280G”)) pursuant to 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 Code or any person affiliated with the company or such person, in each case 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 imposed by Section 4999 of the Code (the “Excise Tax”), then the Company Payments will 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, 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, as determined by the plan sponsor.  To the extent the Cutback applies, the Company Payments will be reduced in the following order: first, the reduction of cash payments not attributable to equity awards which vest on an accelerated basis; second, the cancelation of accelerated vesting of equity awards, third, the reduction of employee benefits; and fourth, any other “parachute payments” (as defined in Section 280G).  You will be solely liable for any Excise Tax.

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

8

 

Deferred Terminations

If, at the time of your scheduled termination for reasons covered under this plan, you are absent from work and on a company-provided leave of absence due to your own illness or injury, then you may be eligible to file a claim for benefits under the company’s long-term disability plan (“LTD”).  If you elect to file a claim for LTD benefits, your scheduled termination will be deferred pending a decision on your LTD claim.  During this time, your eligibility to continue to receive paid and/or unpaid leave under the company’s regular plans and policies will not be impacted.  If your LTD claim is denied, your termination will then be processed retroactively and you will be eligible to receive benefits under this plan.  If your LTD claim is approved, you will be treated as any disabled individual in accordance with the applicable company policies and benefit plans; however, any severance payments and benefits you are eligible to receive under this plan will be reduced by any pay you receive during your Severance Period pursuant to your LTD claim.

CLAIM PROCEDURES

How to Apply for Benefits

If you believe you are entitled to plan benefits, contact the Employee Benefits Department or your local Human Resources Representative.

Notice of Claim Denial/Right of Appeal

Initial Claim - Notice of Denial

Written notification of a denied claim will be delivered to the claimant in a reasonable period, but not later than 90 days after the claim is received.  The 90-day period can be extended under special circumstances.  If special circumstances apply, the claimant will be notified before the end of the 90-day period after the claim was received.  The notice will identify the special circumstances.  It will also specify the expected date of the decision.  When special circumstances apply, the claimant must be notified of the decision not later than 180 days after the claim is received.

The written decision will include:

		·	
The reasons for the denial.

		·	
Reference to the plan provisions on which the denial is based.  The reference need not be to page numbers or to section headings or titles.  The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.

		·	
A description of additional materials or information needed to process the claim.  It will also explain why those materials or information are needed.

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

9

 

		·	
A description of the procedure to appeal the denial, including the time limits applicable to those procedures.  It will also state that the claimant may file a civil action under Section 502 of the Employee Retirement Income Security Act of 1974 (“ERISA”) (§29 U.S.C. 1132).  The claimant must complete the plan’s appeal procedure before filing a civil action in court.

 

If the claimant does not receive notice of the decision on the claim within the prescribed time periods, the claim is deemed denied.  In that event the claimant may proceed with the appeal procedure described below.

Appeal of Denied Claim

The claimant may file a written appeal of a denied claim with the plan administrator in Lexington, Kentucky.  Valvoline Inc. is the named fiduciary under ERISA for purposes of the appeal of the denied claim.  Valvoline Inc. has delegated its authority to the Valvoline Inc. Benefit Appeals Panel (the “Panel”).  The Panel has authority to further delegate some of its authority.  The appeal must be sent at least 60 days after the claimant received the denial of the initial claim.  If the appeal is not sent within this time, then the right to appeal the denial is waived.

The claimant may submit materials and other information relating to the claim.  The Panel (or its delegate) will appropriately consider these materials and other information, even if they were not part of the initial claim submission.  The claimant will also be given reasonable and free access to, or copies of documents, records and other information relevant to the claim.

Written notification of the decision on the appeal will be delivered to the claimant in a reasonable period, but not later than 60 days after the appeal is received.  The 60-day period can be extended under special circumstances.  If special circumstances apply, the claimant will be notified before the end of the 60-day period after the appeal was received.  The notice will identify the special circumstances.  It will also specify the expected date of the decision.  When special circumstances apply, the claimant must be notified of the decision not later than 120 days after the appeal is received.

Special rules apply if the company or the Panel designates a committee as the appropriate named fiduciary for purposes of deciding appeals of denied claims.  For the special rules to apply, the committee (or the Panel if it functions as such a committee) must meet regularly on at least a quarterly basis.

When the special rules for committee meetings apply, the decision on the appeal must be made not later than the date of the committee meeting immediately following the receipt of the appeal.  If the appeal is received within 30 days of the next meeting, then the decision must be made not later than the date of the second committee meeting following the receipt of the appeal.

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

10

 

The period for making the decision on the appeal can be extended under special circumstances.  If special circumstances apply, the claimant will be notified by the committee or its delegate before the end of the otherwise applicable period within which to make a decision.  The notice will identify the special circumstances.  It will also specify the expected date of the decision.  When special circumstances apply, the claimant must be notified of the decision not later than the date of the third committee meeting after the appeal is received.

In any event, the claimant will be provided written notice of the decision within a reasonable period, but not later than five days, after the meeting at which the decision is made.

Whether the decision on the appeal is made by a committee or not, a denial of the appeal will include:

		·	
The reasons for the denial.

		·	
Reference to the plan provisions on which the denial is based.  The reference need not be to page numbers or to section headings or titles.  The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.

		·	
A statement that the claimant may receive free of charge reasonable access to, or copies of, documents, records and other information relevant to the claim.

		·	
A description of any voluntary procedure for an additional appeal, if there is such a procedure.  It will also state that the claimant may file a civil action under Section 502 of ERISA (§29 U.S.C. 1132).

If the claimant does not receive notice of the decision on the appeal within the prescribed time periods, the appeal is deemed denied.  In that event, the claimant may file a civil action in court in Fayette County, Kentucky.

GENERAL INFORMATION

 

Plan Sponsor/Administrator

Valvoline Inc., 100 Valvoline Way, Lexington, Kentucky 40509 (telephone: 1-859-357-7777) is both the plan administrator and the plan sponsor.  The plan sponsor is the named fiduciary under the plan.  The plan administrator has the overall responsibility for the operation of the plan.  Participants and beneficiaries may receive from the plan administrator, upon written request, information as to whether a particular employer maintains the plan and, if so, the employer’s address.

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

11

 

Plan Identification

The Valvoline Inc. Severance Pay Plan is a welfare plan.  It is identified by the following numbers under IRS rules:

		·	
The Employer Identification Number assigned by the IRS to Valvoline Inc. is 30-0939371.

		·	
The plan number assigned to the plan is 501.

Plan Year

For recordkeeping purposes, the plan year is January 1 to December 31.

Legal Service

Service of legal process may be made upon the Secretary of Valvoline Inc., 100 Valvoline Way, Lexington, Kentucky 40509 (1-859-357-7777).

Method of Funding

The plan is funded from the company’s general assets, on a pay as you go basis.  There is no trust from which benefits are paid and no assets are set aside in advance of the time plan benefits are paid.

Your Rights

As a participant in the plan, you are entitled to certain rights and protections under ERISA.  ERISA provides that all Plan participants shall be entitled to:

		·	
Examine, without charge, at the plan administrator’s office and at various work sites, all plan documents, including insurance contracts, collective bargaining agreements, and copies of all documents filed by the plan with the U.S. Department of Labor, such as annual reports and plan descriptions.

		·	
Obtain copies of all plan documents and other plan information upon written request to the plan administrator.  There will be a charge for these documents, and you will be required to furnish a personal check payable to Valvoline Inc. covering the photocopying cost before receiving any copies.

		·	
Receive a summary of the plan’s annual financial report.  The plan administrator is required by law to furnish each participant with a copy of this summary financial report.

		·	
File suit in federal court, if any materials requested are not received within 30 days of your request, unless the materials were not sent because of

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

12

 

			
matters beyond the control of the plan administrator.  The court may require the plan administrator to pay you up to $110 for each day’s delay until the materials are received.

 

In addition to creating rights for plan participants, ERISA imposes obligations upon the persons who are responsible for the operation of the plan.  These persons are referred to as “fiduciaries” under the law.  Fiduciaries must act solely in the interest of plan participants, and they must exercise prudence in the performance of their plan duties.  Fiduciaries who violate ERISA may be removed and required to make good any losses they have caused the plan.

Your employer may not fire you or discriminate against you to prevent you from obtaining benefits or exercising your rights under ERISA.  If your claim for a benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial.  You have the right to have your claim reviewed and reconsidered.

If you are improperly denied a benefit in full or in part, you have a right to file suit in a federal or state court in Fayette County, Kentucky.  If plan fiduciaries are misusing the plan’s money, you have a right to file suit in a federal court or request assistance from the U.S. Department of Labor.  If you are successful in your lawsuit, the court may, if it so decides, require the other party to pay your legal costs, including attorney’s fees.

If you have any questions about this statement or your rights under ERISA, you should contact the plan administrator or the nearest Office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210.

Plan Interpretations/Administration

The plan administrator and plan sponsor have all necessary, appropriate, discretionary and convenient power and authority to interpret, administer and apply the provisions of the plan with respect to all persons having or claiming to have any rights, benefits, entitlements or obligations under the plan.  This includes, without limitation, the ability to make factual determinations, construe and interpret provisions of the plan, determine who is eligible and compute benefits, reconcile any inconsistencies between provisions in the plan or between provisions of the plan and any other statement concerning the plan, whether oral or written, supply any omissions to the plan or any document associated with the plan, and to correct any defect in the plan or in any document associated with the plan.  All such factual determinations and interpretations of the plan and documents associated with the plan and questions concerning its administration and application as determined by the plan administrator or plan sponsor shall be binding on all persons having an interest under the plan.

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

13

 

Plan Documents

This document constitutes the summary plan description and the plan document of the Valvoline Severance Pay Plan.  References to “plan” herein include all amendments that have been made to it.  The plan sponsor has the right to modify plan provisions for a particular severance program for one or more eligible employees.  In that event, the descriptions of that particular program produced by the plan sponsor control over the terms of this document to the extent they are inconsistent with each other.

Section 409A

It is intended that the severance payments and benefits provided under this plan will be exempt from, or comply with, the requirements of Section 409A, and the plan shall be construed, administered and governed in a manner that affects such intent.  Each payment under this plan will be treated as a separate payment under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code” and “Section 409A”).  With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) 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 (iii) such payments shall be made on or before the last day of the participant’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder.  Any payments subject to Section 409A to be made under the plan upon a termination of employment shall only be made upon a “separation from service” within the meaning of Section 409A.

Non-Assignments of Benefits

You may not anticipate, assign, pledge, alienate or encumber benefits to which you are entitled under this plan.  If you are entitled to plan benefits paid as installments, then you may continue to have contributions deducted from them to pay for company benefits that you are still eligible to maintain, as determined by the plan sponsor.  To the extent you have any right to receive plan benefits you are an unsecured creditor of the company.  You have no other right, title or interest in the assets of the company because of this plan.

Plan Amendment/Termination

The plan sponsor, by action of its board of directors or the board’s delegate (pursuant to resolution, by-law, or otherwise), reserves the right, in its sole discretion, to amend, suspend, modify, interpret, terminate or otherwise discontinue the plan or change the funding method at any time without the requirement to give cause or consideration to any individual; provided, however, that no amendment, suspension, modification, interpretation, termination or other discontinuance that has the effect of adversely affecting any participant who becomes entitled to receive payments and benefits under the plan prior to, or within six months after, the date of such action shall be effective without the written consent of such participant.

 

 

 

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

14

 

Successors

The company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the company expressly to assume and agree to provide severance payments and benefits pursuant to the plan in the same manner and to the same extent that the company would be required to perform its obligations under the plan if no such succession had taken place.

Authority to Delegate

The plan administrator or plan sponsor may employ one or more persons to render advice with respect to its fiduciary responsibilities.  The plan administrator or plan sponsor may also delegate fiduciary responsibilities to one or more persons who shall have the rights to employ one or more persons to render advice with respect to its fiduciary duties.  There is no restriction on any person serving in more than one fiduciary capacity under the plan.

Elections and Notices

An election, designation, notice or other correspondence made regarding coverage or benefits under the plan shall not be effective unless it is made both in writing and received by the plan administrator (or its delegate), except as otherwise provided under the terms of the plan or by the plan administrator.

Applicable Law

This plan shall be construed and enforced according to Kentucky state law, to the extent that Kentucky state law is not preempted by federal law.

Valvoline Inc.

100 Valvoline Way

 Lexington, Kentucky 40509

 

  

Valvoline Severance Pay Plan (base salary bands 20, EG01, EG02 and UNG)

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}]]