EXHIBIT 10(iii)(b)
December 30, 1997
Xx. Xxxx X. X'Xxxxxx
Dear Xxxx:
We are delighted that you are joining us at Texaco Inc. ("Texaco"). This letter
sets forth terms and conditions which you and Texaco have agreed to in
connection with your employment by Texaco.
1. Term of Employment.
Your employment under this Agreement shall be effective January 1, 1998 and
shall continue until terminated in accordance with Section 4 below.
Notwithstanding the foregoing, your continuous service date for the following
Texaco benefit plans: Vacation, Short Term Disability, Long Term Disability and
Separation Pay will be January 1, 1978.
2. Duties and Responsibilities.
(a) Texaco will employ you initially as Senior Vice President & President
of Worldwide Exploration & Production. In such capacity, you shall
perform the customary duties and have the customary responsibilities of
such position in the employ of Texaco and such other duties as may be
assigned to you from time to time by the Chief Executive Officer or his
designee.
(b) You agree to faithfully serve Texaco, devote your full working time,
attention and energies to the business of Texaco, its subsidiaries and
affiliated entities, and perform the duties under this Agreement to the
best of your abilities. You may also perform inconsequential services
without direct compensation in connection with charitable or civic
organizations.
(c) You agree (i) to comply with all applicable laws, rules and
regulations, and all requirements of all applicable regulatory,
self-regulatory, and administrative bodies; (ii) to comply with
Texaco's rules, procedures, policies, requirements, and directions; and
(iii) not to engage in any other business or employment without the
written consent of Texaco except as otherwise specifically provided
herein.
3. Compensation and Benefits.
(a) Base Salary. Texaco will pay you a base salary at the initial annual
rate of $450,000 per year ("Base Salary"), which will be payable in
accordance with Texaco's standard practice for elected officers.
Thereafter, modifications, if any, to your Base Salary will be
determined by the
Compensation Committee of the Board of Directors, or any body or
person authorized to do so, at such times and in such manner as is
consistent with Texaco's standard practice for elected officers.
(b) Benefit Plans and Fringe Benefits. Except as otherwise provided
herein, during your employment with Texaco, you shall participate in
each of Texaco's existing executive and employee benefit plans,
policies or arrangements pursuant to their terms, including the
Relocation Plan when you decide to move your family from Virginia, and
any such plans, policies or arrangements that Texaco may maintain or
establish during your period of employment (in addition to or in
substitution for any existing plan) and to receive all fringe benefits
for which your position grade makes you eligible in accordance with
Texaco's usual policies and in accordance with the terms and
provisions of each such plan, policy, or arrangement, including,
without limitation, those listed on Appendix A attached to this
Agreement. Any modifications, deletions or additions to any of these
plans will apply to you as they apply to all executives in the same
position grade as you.
(c) Expense Reimbursement. Texaco shall promptly pay, or reimburse you for,
all reasonable and necessary business expenses incurred by you in the
performance of your duties hereunder, provided that you properly
account for them in accordance with Texaco's standard policy for
officers.
(d) Stock Incentive Plan. Texaco believes that ownership of the common
stock by officers and other employees having substantial
responsibilities as to the conduct and development of Texaco's
business is important for the welfare of the stockholders. Texaco
common stock provides officers and other employees with: an alignment
with the interests of stockholders; and a significant incentive to use
their best efforts for Texaco's long-term success. Accordingly, on the
date of your employment, you will be granted 37,996 Stock Options and
5,428 Performance Restricted Shares. These options and shares will be
subject to the terms and conditions of the Stock Incentive Plan and an
agreement to that effect will be executed by you and Texaco to
evidence this grant.
4. Termination of Employment.
Your employment hereunder may be terminated under the following circumstances:
(a) Death or Total Disability. Your employment hereunder shall terminate
upon your death or your becoming Totally Disabled. For purposes of this
Agreement, you shall be "Totally Disabled" as of the date you become
entitled to receive disability benefits under Texaco's long-term
disability plan.
(b) Termination by Texaco for Cause. Texaco may terminate your employment
hereunder for "Cause" at any time by providing written notice to you.
(i) For purposes of this Agreement, the term "Cause" shall mean any of
the following:
(A) the transfer by you of confidential business
information of any type concerning Texaco to a
competitor of Texaco for compensation;
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(B) commission of an act by you in the course of your
employment with Texaco which constitutes dishonesty,
or conduct adverse to the best interests of the
Company or its subsidiaries and affiliates, or
conduct in violation of Company policy and causes
material harm to Texaco;
(C) any conduct for which you are convicted of
intentionally and knowingly committing a crime
against Texaco under federal law or the law of the
state in which such action occurred;
(D) conviction of a crime (including conviction on a nolo
contendere plea) involving a felony;
(E) deliberate and continual refusal to perform
employment duties reasonably requested by Texaco or
an affiliate after thirty (30) days' written notice
by certified mail of such failure to perform,
specifying that the failure constitutes Cause (other
than as a result of vacation, sickness, illness or
injury);
(F) fraud or embezzlement determined in accordance with
Texaco's normal, internal audit procedures;
(G) gross misconduct or gross negligence in connection
with the business of Texaco or any affiliate which
has substantial effect on Texaco or the affiliate; or
(H) breach of any of the covenants set forth in Section
6 below.
(ii) You will be considered to have been terminated for Cause if
Texaco determines that you engaged in an act constituting
Cause. Any such determination shall be made by the Chief
Executive Officer.
(c) Termination by Texaco without Cause. Texaco may terminate your
employment hereunder without Cause at any time after providing thirty
(30) days written notice to you.
(d) Voluntary Termination by You. You may terminate employment hereunder at
any time after providing thirty (30) days written notice to Texaco.
5. Compensation Following Termination of Employment.
(a) Upon termination of employment for any reason, you (or your beneficiary
or estate, as the case may be) will be entitled to receive (i) any
accrued but unpaid Base Salary for services rendered to the date of
termination as determined pursuant to Section 3(a), (ii) any incurred
but unpaid expenses required to be reimbursed pursuant to Section 3(c),
and (iii) any vacation accrued but unused to the date of termination.
The benefits to which you may be entitled upon termination pursuant to
the plans, policies, and arrangements referred to in Section 3(b)
hereof shall be determined and paid in accordance with the terms of
such plans, policies, and arrangements.
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(b) Except as otherwise provided in this Agreement, or under the terms of
any incentive compensation, employee benefit, or fringe benefit plan
applicable to you at the time of your termination or resignation of
employment, you shall have no right to receive any other compensation,
or to participate in any other plan, arrangement or benefit, with
respect to future periods after such termination or resignation.
Texaco shall have the right to discontinue any or all remaining payment and/or
benefits if Texaco determines that there were actions on your part which would
have warranted termination for Cause under this Agreement.
6. Restrictive Covenants.
(a) Protected Information. You recognize and acknowledge that you will
have access to various confidential or proprietary information
concerning Texaco and entities affiliated with Texaco of a special and
unique value which may include, without limitation, (i) books and
records relating to operation, finance, accounting, sales, personnel
and management, (ii) policies and matters relating particularly to
operations such as exploration and producing, customer service
requirements, costs of providing service and equipment, operating
costs and pricing matters, and (iii) various trade or business
secrets, including business opportunities, marketing or business
diversification plans, business development and bidding techniques,
methods and processes, financial data and the like (collectively, the
"Protected Information"). You therefore covenant and agree that you
will not at any time, either while employed by Texaco or afterwards,
knowingly make any independent use of, or knowingly disclose to any
other person or organization (except as authorized by Texaco) any of
the Protected Information.
(b) Competitive Activity. You covenant and agree that at all times during
your period of employment with Texaco, you will not, directly or
indirectly, engage in, assist, or have any active interest or
involvement [whether as an employee, agent, consultant, creditor,
advisor, officer, director, stockholder (excluding holding of less than
1% of the stock of a public company), partner, proprietor or any type
of principal whatsoever] in any person, firm, or business entity which,
directly or indirectly, is engaged in the same business as that
conducted and carried on by Texaco, without Texaco's specific written
consent to do so.
(c) Non-Solicitation. You covenant and agree that for a period of one
year following termination of employment for any reason, you will not
directly or indirectly (i) induce any suppliers and/or customers of
Texaco or corporations affiliated with Texaco to provide services to
or patronize any similar business which competes with any material
business of Texaco; (ii) canvass, solicit or accept any similar
business from any supplier and/or customer of Texaco or corporations
affiliated with Texaco; (iii) directly or indirectly request or advise
any customers of Texaco or corporations affiliated with Texaco to
withdraw, curtail or cancel their business with Texaco; (iv) directly
or indirectly disclose to any other person, firm or corporation the
names or addresses of any of the suppliers and/or customers of Texaco
or corporations affiliated with Texaco; or (v) directly or indirectly
solicit or induce or assist others in soliciting or inducing any
employee of Texaco to terminate his/her employment with Texaco.
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(d) Non-Disparagement. You covenant and agree that during the course of
your employment by Texaco or at any time thereafter, you shall not,
directly or indirectly, in public or private, deprecate, impugn,
disparage, or make any remarks written or verbal that would tend to or
be construed to tend to defame Texaco or any of its officers or
employees, members of its board of directors or agents, nor shall you
assist any other person, firm or company in so doing.
(e) Return of Documents and Other Materials. You shall promptly deliver to
Texaco, upon termination of your employment, or at any other time as
Texaco may so request, all customer lists, leads and refunds, data
processing programs and documentation, employee information, memoranda,
notes, records, reports, tapes, manuals, drawings, blueprints,
programs, and any other documents and other materials (and all copies
thereof) relating to Texaco's business (including but not limited to
exploration or producing operations activities, etc.) or that of its
customers, and all property associated therewith, which you may then
possess or have under your control.
7. Enforcement of Covenants.
(a) Termination of Employment and Forfeiture of Compensation. You agree
that in the event that Texaco determines that you have breached any of
the covenants set forth in Section 6 hereof during your employment,
Texaco shall have the right to terminate your employment for Cause.
Such termination of employment or discontinuance of benefits shall be
in addition to and shall not limit any and all other rights and
remedies that Texaco may have against you.
(b) Right to Injunction. You acknowledge that a breach of the covenants
set forth in Section 6 thereof will cause irreparable damage to Texaco
with respect to which Texaco's remedy at law for damages will be
inadequate. Therefore, in the event of breach or anticipatory breach
of the covenants set forth in this section by you, you and Texaco
agree that Texaco shall be entitled to the following particular forms
of relief, in addition to remedies otherwise available to it at law or
equity: (i) injunctions, both preliminary and permanent, enjoining or
retraining such breach or anticipatory breach and you hereby consent
to the issuance thereof forthwith and without bond by any court of
competent jurisdiction; and (ii) recovery of all reasonable sums
expended and costs, including reasonable attorney's fees, incurred by
Texaco to enforce the covenants set forth in this section.
(c) Separability of Covenants. The covenants contained in Section 6 hereof
constitute a series of separate covenants, one for each applicable
State in the United States and the District of Columbia, and one for
each applicable foreign country. If in any judicial proceeding, a
court shall hold that any of the covenants set forth in Section 6
exceed the time, geographic, or occupational limitations permitted by
applicable laws, you and Texaco agree that such provisions shall and
are hereby reformed to the maximum time, geographic, or occupational
limitations permitted by such laws. Further, in the event a court
shall hold unenforceable any of the separate covenants deemed included
herein, then such unenforceable covenant or covenants shall be deemed
eliminated from the provisions of this Agreement for the purpose of
such proceeding to the extent necessary to permit the remaining
separate covenants to be enforced in such proceeding. You and Texaco
further agree that the covenants in Section 6 shall each be construed
as a separate agreement independent of any other provisions of this
Agreement, and
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the existence o any claim or cause of action by you against Texaco
whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Texaco of any of the
covenants of Section 6.
8. Arbitration of Disputes.
In the event of any dispute or disagreement arising out of or in connection with
this Agreement, you and Texaco agree to submit any such dispute or disagreement
or arbitration under the Employment Dispute Arbitration Rules of the American
Arbitration Association. The dispute or disagreement will be submitted to a
mutually agreed upon retired federal judge, or failing such agreement, to a
retired federal judge appointed by the Chief Judge of the United States District
Court for the Southern District of New York. The arbitration will be held in
White Plains, NY. Any decision or award of said arbitrator shall be final and
binding on you and Texaco. Each party will pay its own legal fees and expenses
for such arbitration and share the fees and expenses of the arbitrator unless
otherwise allocated by the arbitrator in the decision or award. The above shall
supercede and be in lieu of any other arbitration process provided by the
Company including "Solutions".
9. Waiver of Jury Trial.
In the event any controversy or claim arising out of your employment or the
termination of your employment is found by a court of competent jurisdiction not
to be subject to final and binding arbitration, you and Texaco agree to try such
claim or controversy to the Court, without use of a jury or advisory jury. Any
action shall be brought in the Supreme Court, State of New York, Westchester
County or in the United States District Court for the South District of New
York, White Plains Division.
10. Non-Disclosure of Agreement Terms.
You agree that you will not disclose the terms of this Agreement to any third
party other than your immediate family, attorney or accountants, except as may
be required by law. In the event disclosure is sought from you in response to
any subpoena, or other legal process, you shall give the company reasonable
notice under the circumstances in order to afford the company an opportunity to
evaluate its legal rights and take such action as may be appropriate to protect
the interests of the company.
11. Assignment.
Except as otherwise provided in this Section, this Agreement shall inure to the
benefit of and be binding upon Texaco, its successors and assigns, and to you
and your heirs, executors, administrators and legal representatives. This
Agreement shall not be assignable by you, and, without your consent, shall be
assignable by Texaco only to any corporation or other entity resulting from the
reorganization, merger or consolidation of Texaco with any other corporation or
entity or any corporation or entity to which Texaco may sell or otherwise
dispose or transfer all or substantially all of its business and/or assets.
Texaco will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of its business
and/or assets, by agreement in form and substance satisfactory to you to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that Texaco would be required to perform it if no such
succession had taken place. As used in this Agreement, "Texaco" shall mean
Texaco and any successor to its business and/or assets as
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aforesaid which executes and delivers the agreement provided for in this Section
or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
12. Entire Agreement; Amendment.
This Agreement shall supersede any and all existing agreements, understandings
and arrangements between you and Texaco relating to the terms and your
employment; provided, however, that this Agreement shall not supersede or in any
way reduce your right to receive (or Texaco's obligation to pay) benefits under
any employee benefit plan, program or arrangement maintained by Texaco,
including, without limitation, those plans, programs and arrangements described
in Section 3 hereof. This Agreement may not be amended except by a written
agreement signed by both parties.
13. Governing Law and Forum.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed in that
State, without regard to its conflict of laws provisions. Any action regarding
this Agreement or any term or condition of employment or employment action shall
be subject to arbitration as specified in paragraph 9 of this Agreement.
14. Notices.
Any notice, consent or other communication made or given in connection with this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered by United States registered or certified mail, return receipt
requested, to the parties at the following addresses or at such other address as
a party may specify by notice to the other:
To You:
Xxxx X. X'Xxxxxx
Texaco Inc.
0000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
To Texaco:
Xxxxxxx Xxxxxxxxxx
Texaco Inc.
0000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
15. Miscellaneous.
(a) The failure of you or Texaco to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
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(b) Section headings are used herein for convenience of reference only and
shall not affect the meanings of any provision of this Agreement.
(c) If any provision of this Agreement is invalid or unenforceable, the
balance of the Agreement shall remain in effect, and if any provision
is inapplicable to any circumstances, it shall nevertheless remain
applicable to all other circumstances.
Since your execution of this Agreement provides for mandatory arbitration of
issues arising from your employment or termination of employment and/or waiving
of the right to a trial by jury, you may have at least twenty-one (21) days to
consider its meaning and effect and to determine whether you wish to enter into
it. During that time, you are advised to consult with anyone of your choosing,
including an attorney, prior to executing this Agreement.
If you agree that this letter accurately sets forth your agreement with Texaco,
please sign and date each copy of this letter in the space provided below and
return one to me.
Once you have signed this Agreement, you may choose to revoke your execution
within seven (7) days. Any revocation of this Agreement must be in writing and
personally delivered to me, or if mailed, postmarked within seven (7) days of
the date upon which it was signed by you. Texaco will not employ you pursuant to
this Agreement until after the seven (7) day period expires without any
revocation by you.
Sincerely,
TEXACO INC.
By: /s/ Xxxx X. Xxxxxxxx
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Accepted and Agreed to this
5th day of January 1998.
/s/ Xxxx X. X'Xxxxxx
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Xxxx X. X'Xxxxxx
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APPENDIX A
List of Executive Incentive Plans
Section 3(b) of the Agreement
1. Comprehensive Personal Liability Insurance Program
2. Tax Assistance Plan
3. Country Club Membership
4. Annual Executive Medical Examination
