TERMINATION AGREEMENT AND GENERAL RELEASE
This Termination Agreement and General Release ("Agreement"), executed
this 30th day of May, 2000 by and between Xxxxxx Xxxxx Xxxxx, Xx. (hereinafter
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referred to as "Employee"), and Union Oil Company of California (hereinafter
referred to as "Company").
WHEREAS, Employee is covered under an Employment Agreement dated as of
July 28, 1998 a copy of which is attached hereto as Exhibit A.
WHEREAS, Company and Employee wish to resolve all issues under said
Employment Agreement and in connection with Employee's severance from employment
with Company.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, the sufficiency of which are hereby acknowledged, Company and
Employee agree as follows:
1. Employee shall continue as Group Vice-President, Diversified Business
Group and an Executive Officer of the corporation through July 31, 2000.
2. Employee shall subsequently continue on the payroll as an employee of
the Company for twelve calendar months ending on July 31, 2001 as a "Consulting
Employee". During such twelve month period Employee will be paid his current
base salary and continue to be eligible for the Company's benefit plans and
policies generally applicable to its employees in his employment category of
Group Vice President, Diversified Business Group. Thereafter, Employee and his
dependents shall be eligible to receive all retiree health and welfare benefits
generally applicable to a Company employee in Employee's employment category.
Employee shall report to Xxxxx X. Beach during this period. Notwithstanding any
writings, obligations or requirements to the contrary, this period of employment
shall apply to vesting and accruals under the 1998 Unocal Management Incentive
Program. Employee's participation and coverage shall be subject to the rules and
procedures generally applicable to employees under said plans.
3. Employee shall be eligible for one year of outplacement services to be
paid by Company up to a maximum of $35,000.
4. Employee shall be paid by the Company the sum of $998,412 (Nine Hundred
and Ninety-Eight Thousand, Four Hundred and Twelve Dollars) due under the
aforesaid Employment Agreement. Said payment to be made by September 1, 2000.
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5. Employee shall receive by September 1, 2000 the additional sum of
$25,000 (twenty-five thousand dollars) in lieu of the two years of benefit
coverage under the Employment Agreement referenced above. With the exception of
any conversion or benefit continuation rights, payment of the amount under this
Section 5 and Section 4 above shall be in lieu of and a full settlement of all
Employee's rights under the Employment Agreement referenced above.
6. Employee shall be eligible for Unocal's executive financial consulting
program through December 31, 2001 in accordance with the terms of said program.
7. Notwithstanding any writings, obligations, or requirements to the
contrary, Employee will continue to "time vest" in his Performance Stock Options
during the period he continues as a Consulting Employee. Employee was granted
300,000 Performance Stock Options in 1998 and such options will be 100% vested
on March 31, 2001. In the event that Employee's Performance Stock Options
granted under the 1998 Management Incentive Program fail to become exercisable
solely because the performance requirements necessary for them to become
exercisable have not been met, the Company shall pay to Employee not later than
September 1, 2001 a lump sum cash settlement amount, determined in accordance
with the terms of the Unocal Retirement Plan, equal to the difference between
(1) the "Unocal retirement benefits" that would be payable to him as of August
1, 2001 if two years were added to his age and benefit service and (2) the
amount of "Unocal retirement benefits" actually payable to him as of said date.
If Employee retires or dies prior to August 1, 2001, the calculation shall be
made as of such earlier applicable date. For purposes of the above calculation,
"Unocal retirement benefits" include the benefits payable under the Unocal
Retirement Plan, the Unocal Supplementary Compensation Plan, and the Unocal
Retirement Supplementary Retirement Plan for Key Management Personnel. For
purposes of the above calculation, "includable compensation" under the Unocal
Supplementary Retirement Plan for Key Management Personnel and the Unocal
Supplementary Compensation Plan shall not be subject to any Internal Revenue
Code limitations.
8. Employee shall be eligible to receive his Revised Incentive Compensation
Plan (`RICP") Award for the entire 2000 calendar year payable, on or about April
1, 2001. Such Award shall be paid in accordance with the normal operation of the
RICP but shall not be modified by individual or business unit performance.
Employee's "target award" 50% of base annual salary shall be adjusted only for
Company's comparative and absolute performance.
9. During the period of Employee's employment as a "Consulting Employee"
from August 1, 2000 through July 31, 2001 Employee may perform services for
others so long as (1) such services do not create a conflict of interest with
respect to Company and (2) such duties do not unduly interfere with his ability
to conduct consulting activities for the Company. Should employee elect
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to sever his employment as a Consulting Employee (in which case the preceding
sentence restricting Employee's providing services for others shall not apply),
his status as a Consulting Employee of the Company will be terminated and a lump
sum payment will be made of his base salary payable for the term of the
consulting period. Retirement age and years of service under paragraph 12 will
be reduced accordingly and he shall no longer accrue service under the Company's
benefit plans, policies, 1998 Long-Term Incentive Plan and Performance Stock
Option.
10. Employee acknowledges that he acquired certain confidential information
concerning the operation of the Company during his employment with the Company
and in connection with the Employee's work hereunder. Employee agrees that he
will not at any time, whether during or after his employment hereunder, (1)
knowingly use for improper personal benefit any confidential information that he
may learn or has learned by reason of his employment with the Company, or (2)
disclose any such confidential information to any person except (a) in the
performance of his obligations to the Company hereunder, (b) as required by
applicable law, (c) in connection with the enforcement of his rights under this
Agreement, (d) in connection with any disagreement, dispute or litigation
(pending or threatened) between Employee and the Company, or (e) with the prior
written consent of the Company. "Confidential Information" includes information
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with respect to the Company's products, facilities and methods, research and
development and trade secrets and other intellectual properties, systems,
patents and patent applications, procedures, manuals, confidential reports,
business plans, prospects or opportunities; provided, however, that such terms
shall not include any information that (X) is or becomes generally known or
available other than as a result of disclosure by Employee or (Y) is or becomes
known or available to Employee on a non-confidential basis from a source which
to Employee's knowledge is not prohibited from disclosing such information to
Employee by a legal, contractual, fiduciary or other obligation to the Company.
If Employee is unclear as to the requirements of the foregoing, he may ask for
clarification as to a specific situation by contacting the Company's Chief Legal
Officer in writing. Employee's obligations under this paragraph shall survive
termination of this Agreement.
11. Unocal shall pay Employee his accrued vacation "bank balance" within
two weeks of his ceasing to be the Group Vice-President, Diversified Business
Group. Employee shall accrue vacation during the period he is a Consulting
Employee.
12. Employee's termination of employment hereunder, including at his
election under Section 9 above shall be treated as "at the convenience of the
Company" pursuant to the Long Term Incentive Plans of 1991 and 1998, the
Performance Stock Option Plan, and under the Revised Incentive Compensation
Plan. Therefore, Employee shall be entitled to the delivery of shares of
Restricted Stock, payment of Performance Shares and the extended period to
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exercise vested stock options applicable under the terms of said Plans upon a
termination of employment at the convenience of the Company.
During the period as a Consulting Employee, Employee shall be entitled to
participate in all Benefit Plans and fringe benefit and payroll practices of the
Company on the same terms and conditions as would be applicable to a full time
employee of his level and salary grade.
Employee shall continue to accrue Benefit Service under Unocal's defined
benefit and defined contribution plans under which he is currently covered. Any
amendment to the Unocal Retirement Plan or any of the Non-Qualified Retirement
Plans which would adversely affect the Employee's benefit thereunder shall be of
no force and effect with respect to the Employee except where such amendment
also adversely affects the benefit with respect to the Company's most senior
executives in a substantially identical manner.
Company hereby acknowledges and agree that Employee shall continue to be
eligible, during all periods following the termination of his employment, to
participate in those Benefit Plans providing retirement health benefits in
accordance with the terms thereof as applicable to similarly situated former
employees.
For purposes of calculating the Unocal Retirement Plan and Unocal's
Non-Qualified Retirement Plans benefits, the Company shall (I) credit Employee
with 59 years .5 months of age and 36 years 10 months of service, (ii) use
Employee's "includable compensation" in effect as of July 31, 2001, (iii) take
into account any increases in IRC Section 415 limits taking effect as of or
prior to July 31, 2001, and (iv) take into account any changes in the terms of
Company's Retirement Plan taking effect as of, or prior to July 31, 2001 that
would result in a greater benefit becoming payable to employee, to the extent
allowable by law and applicable regulations.
13. Employee shall not be entitled to any other termination-type benefits
except as specifically noted above. Employee hereby waives any benefits or
payments under the Company's Termination Allowance Plan and Employee
Redeployment Program. Employee shall not be eligible for any future grants or
awards under the Long-Term Incentive Plan of 1998 or the RICP, for calendar year
2001 or any portion thereof.
14. All payments hereunder to Employee shall be reduced for any applicable
withholding.
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15. General Release
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In consideration for this Agreement, and with the exception of claims for
breach of this Agreement, Employee hereby releases and forever discharges
Company and Unocal Corporation and their respective predecessors, successors,
partners, assigns, employees, shareholders, owners, officers, directors, agents,
attorneys, subsidiaries, divisions, and affiliates (jointly referred to as
"Released Parties") from any and all claims, demands, causes of action,
obligations, damages, attorneys' fees, costs and liabilities of any nature
whatsoever, whether or not now known, suspected or asserted, which Employee may
have or claim to have against the Released Parties relating in any manner to
Employee's employment with the Company and/or the termination of such
employment, and hereby convenants not to assert such claims through a lawsuit,
an administrative proceeding or otherwise. This General Release includes, but is
not limited to, claims arising under federal, state or local laws prohibiting
employment discrimination or claims arising out of any legal restrictions on the
Company's rights to terminate its employees, including without limitation of the
Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act
of 1964, and the Civil Rights Act of 1991.
This Agreement shall not apply to Employee's rights to any indemnification
insurance, defense or hold harmless protection that would otherwise apply in the
absence of this Release. Except as specifically provided herein, nothing in this
Agreement shall affect in any way, apply to, increase, or diminish, any rights
which Employee has with respect to retirement benefits or with respect to any
previously established policy or plans of the Company outside of this Agreement.
16. Waiver
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Employee waives all rights under Section 1542 of the Civil Code of
California. That section reads as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor."
Notwithstanding the provisions of Section 1542 or any similar law of any other
state, and to provide a full and complete release of Released Parties, Employee
expressly acknowledges that this Termination Agreement and General Release is
intended to include, without limitation, all claims which Employee does not know
or suspect to exist in his favor at the time of execution of this document, and
that the settlement agreed upon completely extinguishes all such claims.
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17. This Agreement is a full and complete expression of the intent of the
parties with respect to the subject matter of this Agreement. No other agreement
or representation, express or implied, has been made by either party with
respect to the subject matter of this Agreement.
18. This Agreement may not be modified except by a written agreement signed
by both Employee and by a Vice President of Union Oil Company of California.
19. This Agreement shall be interpreted to be valid to the full extent
possible under the laws of the State of California.
20. Employee warrants and represents that he has not assigned or in any way
transferred any claim related to the subject matter of this Agreement and that
he will not allow or assist in such transfer or assignment in the future.
21. This Agreement shall not constitute an admission by any Related Party
of any wrongful action or inaction whatsoever.
22. Employee agrees that this Agreement is understood by Employee and is
voluntarily entered into by the Employee.
23. Employee may file a written beneficiary designation for any payments in
the event of his death prior to receipt of the amounts due under this Agreement
in the form of Attachment A. The last such designation received by Company prior
to his death shall control any such payments.
24. In addition to any indemnification obligations Company has or may have
under applicable law, Company shall indemnify Employee for any and all costs,
expenses, awards, claims, judgments, attorneys' fees or any other damages or
injury to Employee for Employee's actual or alleged actions or failure to act
during his employment with Company including Employee's employment as a
Consulting Employee, unless Company under its standard policy on such matters
would not have so indemnified Employee for such actions or failure to act were
he still actively employed at his current salary level and position.
25. This Agreement shall bind any successors, purchasers, subsidiaries,
affiliates or assigns of the Company.
26. Company shall pay 90% (ninety percent) of Employee's out-of-pocket
litigation expenses, including reasonable attorney's fees, in connection with
any judicial proceeding to enforce this Agreement or construe or determine the
validity of this Agreement, if the Employee is substantially successful in such
proceeding.
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27. Employee's Right to Review Agreement
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Employee has twenty-two (22) days from the date of Employee's receipt of
this Agreement to consider whether or not to sign this Agreement .
28. This Agreement shall not be effective until eight (8) days from the
date of execution of this Agreement by Employee. During such period, Employee
may notify Company in writing of his revocation of this Agreement.
29. Employee's Right to Consult Counsel
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Employee is advised to consult with Employee's attorney before deciding
whether or not to sign this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed in duplicate originals.
UNION OIL COMPANY OF CALIFORNIA EMPLOYEE
By: /s/XXXX X. XxXXXXX /s/XXXXXX X. XXXXX
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Signature
XXXX X. XxXXXXX XXXXXX X. XXXXX
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Print Name Print Name
5-23-2000 5-30-2000
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Date Date
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ATTACHMENT A TO TERMINATION AGREEMENT AND
GENERAL RELEASE
BENEFICIARY DESIGNATION
I, Xxxxxx X. Xxxxx, (Employee) hereby designate the following person(s) as
Beneficiary for any payments due at the time of my death under my Termination
Agreement and General Release with Union Oil Company of California, dba Unocal.
Name: ____Jane Hill Scott______________
Address: ____330 N. San Xxxxxx Ave._______
____Pasadena, CA 91105__________
Relationship: ____Spouse_______________________
Interest (%): ____100%_________________________
Name: _________________________________
Address: _________________________________
Relationship: _________________________________
Interest (%): _________________________________
