EXHIBIT 10(iii)(k)
SEPARATION AGREEMENT AND GENERAL RELEASE
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Texaco Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, its affiliates, subsidiaries, divisions, successors and assigns, and the
current and former employees, officers, directors, and agents thereof
(referenced herein as "Texaco" except as otherwise specified), and ▇▇. ▇▇▇▇▇ ▇.
▇▇▇▇▇ (referenced herein as "▇▇. ▇▇▇▇▇") state that:
WHEREAS, ▇▇. ▇▇▇▇▇ held the position of Chairman of the Board
and Chief Executive Officer of Texaco Inc.; and
WHEREAS, ▇▇. ▇▇▇▇▇ submitted a letter resigning his positions
with Texaco on February 3, 2001; and
WHEREAS, the Texaco Board of Directors accepted ▇▇. ▇▇▇▇▇'▇
resignation on February 4, 2001; and
WHEREAS, ▇▇. ▇▇▇▇▇ and Texaco each desire to reach accord on
a final separation package for ▇▇. ▇▇▇▇▇,
IT IS NOW THEREFORE AGREED TO BY AND BETWEEN ▇▇. ▇▇▇▇▇ and
Texaco, that:
1. Consideration. In consideration for ▇▇. ▇▇▇▇▇'▇ signing
this Separation Agreement and General Release (referenced herein as
"Agreement"), his compliance with the promises made herein, and in settlement of
all claims ▇▇. ▇▇▇▇▇ had, has or may have against Texaco, including but not
limited to those arising from ▇▇. ▇▇▇▇▇'▇ resignation, Texaco agrees:
a. to consider ▇▇. ▇▇▇▇▇ as a retiree of Texaco Inc.
for the purposes of any applicable benefit plans (including the Retirement Plan,
the Supplemental Pension Plan (Supplement 1), the Supplemental Bonus Retirement
Plan (Supplement 3), the Stock Incentive Plan, the Employees Thrift Plan, the
Incentive Compensation Plan, the Comprehensive Medical Plan, the Dental
Assistance Plan, the Term Life Insurance Plan and the Director and Employee
Deferral Plan), and for the purposes of determining the disposition of grants of
stock, restricted stock, stock options and units made prior to the date of this
Agreement pursuant and subject to the provisions and restrictions provided for
in the applicable Texaco Inc. Stock Incentive Plan document and in ▇▇. ▇▇▇▇▇'▇
Texaco Inc. Stock Incentive Agreements and Incentive Compensation Agreements.
The Compensation Committee of the Board of Directors of Texaco Inc. (referenced
herein as "Compensation Committee") agrees neither to vest, impose conditions,
nor forfeit any options and/or restricted stock or units under the
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discretion granted to it by the Stock Incentive Plan and/or ▇▇. ▇▇▇▇▇'▇ Stock
Incentive Agreements;
b. to pay ▇▇. ▇▇▇▇▇ the sum of nine hundred sixty
thousand dollars and no cents ($960,000.00), minus all applicable taxes and
withholdings. This nine hundred sixty thousand dollars and no cents
($960,000.00), minus all applicable taxes and withholdings, shall be paid in
installments as follows: three hundred sixty thousand dollars and no cents
($360,000.00), minus all applicable taxes and withholdings, will be paid on the
30th day of the calendar month after ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ receives a letter from
▇▇. ▇▇▇▇▇ in the form attached to this Agreement as Exhibit A, dated and signed
by ▇▇. ▇▇▇▇▇ eight (8) days or more after he dates and signs this Agreement, and
thereafter six installments of one hundred thousand dollars and no cents
($100,000.00), minus all applicable taxes and withholdings, shall be made on the
30th day of each successive calendar month (or the next business day where the
30th is a Saturday or Sunday) thereafter until six such payments are made;
c. to pay ▇▇. ▇▇▇▇▇ seven million dollars and no cents
($7,000,000.00), minus all applicable taxes and withholdings, on December 29,
2001. This payment will be made in accordance with the deferral arrangements
provided by ▇▇. ▇▇▇▇▇ pursuant to the provisions of Texaco Inc.'s Director and
Employee Deferral Plan. ▇▇. ▇▇▇▇▇ shall make his deferral election under the
terms of the Texaco Inc. Director and Employee Deferral Plan by May 31, 2001;
d. if it is finally determined that the payment(s) set
forth in subparagraph(s) b. and/or c. of this Paragraph 1 or under any other
agreement, plan, program or policy sponsored by Texaco are subject to an excise
tax pursuant to Internal Revenue Code Section 4999, to pay ▇▇. ▇▇▇▇▇ that amount
which is necessary to reimburse him on an after-tax basis (including income,
FICA and excise taxes) for any excise tax that is so imposed, provided however,
that (i) immediately upon being notified by any taxing authority there is a
question whether such an excise tax is due, ▇▇. ▇▇▇▇▇ will notify the General
Counsel of Texaco or any successor corporation, in writing, by certified mail
return receipt requested, that such an issue has been raised; (ii) ▇▇. ▇▇▇▇▇
fully cooperates with Texaco or any successor corporation, should such
corporation decide to challenge the imposition of such an excise tax before any
taxing authority or a court; and (iii) no payment shall be made under this
subparagraph d, and this subparagraph d. shall not apply, in respect of the
accelerated vesting of nonqualified stock options or restricted stock issued by
Texaco if such payment or such application is the sole reason precluding the use
by Texaco of the pooling of interests method of accounting and this subparagraph
d. cannot be modified or delayed to allow payment hereunder without precluding
the use of the pooling of interests method of accounting, as determined by
Texaco's independent auditors. Texaco will make best efforts to alter, modify or
delay the payment so the gross up can be made. If such a payment is to be made,
it shall be calculated based upon the assumption that ▇▇. ▇▇▇▇▇ pays state and
local income taxes at the highest marginal rate of taxation imposed by
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the state and locality in which ▇▇. ▇▇▇▇▇ resides or New York (or both, with
application of appropriate credits) in the calendar year in which payment is to
be made and pays FICA taxes on wages earned. It also shall be assumed that ▇▇.
▇▇▇▇▇'▇ income tax rate will be computed based upon the maximum effective
marginal federal, state, and local income tax rates (including FICA taxes) on
earned income; with such maximum effective federal rate to be computed with
regard to IRC section 68, and applying any available deduction of state and
local income taxes for federal income tax purposes. All such calculations shall
be made by the public accounting firm or party specified by Texaco Inc. If
Texaco or any successor corporation elects to challenge the imposition of such
excise tax, the cost of doing so shall be borne by the corporation;
e. to pay ▇▇. ▇▇▇▇▇ fifteen thousand dollars and no
cents ($15,000.00), minus all applicable taxes and withholdings, in lieu of
outplacement, such payment to be made at the same time as the first payment
provided for in subparagraph b. of this Paragraph 1 is to be made;
f. to provide ▇▇. ▇▇▇▇▇ the cost of an office and
secretary for the earlier of seven (7) years from February 4, 2001, or until ▇▇.
▇▇▇▇▇ obtains employment, such cost not to exceed the total amount of one
hundred seventy-five thousand dollars and no cents ($175,000.00) per year;
g. to provide ▇▇. ▇▇▇▇▇ with the financial/accounting
services (pursuant to the Tax Assistance Plan) ordinarily made available to
Texaco executives for the calendar years 2001, 2002, 2003 and 2004;
h. to pay ▇▇. ▇▇▇▇▇'▇ actual legal fees and
disbursements up to a maximum of seventy-five thousand dollars and no cents
($75,000.00), incurred in connection with his representation by Cadwalader,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ("Cadwalader") with regard to his consideration, negotiation
and execution (without revocation of this Agreement or any part thereof) of this
Agreement. Said legal fees shall be paid to Cadwalader within thirty (30) days
of receipt by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. of an invoice from Cadwalader detailing
their actual fees for services rendered to ▇▇. ▇▇▇▇▇ with regard to his
consideration, negotiation and execution of this Agreement, provided however,
that no such payment shall be owed or paid until a letter in form attached
hereto as Exhibit A, dated and signed by ▇▇. ▇▇▇▇▇ eight (8) or more days after
he dates and signs this Agreement is received by ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; Jackson,
Lewis, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇; and
Provided further, in the case of the consideration payable under subparagraphs
b., c., d. and h. of this Paragraph 1, that ▇▇. ▇▇▇▇▇ does not exercise his
right to revoke his waiver of his rights under the Age Discrimination in
Employment Act of 1967, as amended, as is described in Paragraph 4 of this
Agreement and a letter in the form attached hereto as Exhibit A, dated and
signed by ▇▇. ▇▇▇▇▇ eight (8) or more days after
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he dates and signs this Agreement, is received by ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Jackson,
Lewis, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇-▇▇▇▇.
2. No Obligations Absent Execution of this Agreement. ▇▇.
▇▇▇▇▇ acknowledges and agrees that the payments provided in this Agreement are
not otherwise due or owing to him under any Texaco employment agreement (oral or
written), or Texaco policy or practice, that the payments would not be made or
owing absent his execution of this Agreement and the fulfillment of the promises
contained herein, and that the payments to be provided are not intended to, and
shall not constitute, a severance plan, and shall confer no benefit on anyone
other than the parties hereto. ▇▇. ▇▇▇▇▇ further acknowledges that except for
the specific financial and other consideration set forth in this Agreement, he
is not and shall not in the future be entitled to any other compensation
including, without limitation, other wages, commissions, bonuses, stock option
grants, restricted stock awards, holiday pay, change of control benefits, or any
other form of compensation or benefit, and that no financial or other
consideration set forth in this Agreement shall be applied for any purpose under
any compensation or benefit plan of Texaco.
3. General Release of Claims.
a. ▇▇. ▇▇▇▇▇, on behalf of himself, his heirs,
executors, administrators, successors, and assigns, knowingly and voluntarily
releases and forever discharges Texaco and Chevron Corporation ("Chevron"),
their respective affiliates, subsidiaries, and/or divisions, and their current
or former employees, officers, directors and/or agents, of and from any and all
claims, demands and/or causes of action, known and unknown, which ▇▇. ▇▇▇▇▇ had,
has or may have against Texaco and/or Chevron as of the date of execution of
this Agreement, including, but not limited to, any alleged violation of and/or
any claim pursuant to:
o The National Labor Relations Act, as amended;
o Title VII of the Civil Rights Act of 1964, as amended;
o Sections 1981 through 1988 of Title 42 of the United States Code, as
amended;
o The Employee Retirement Income Security Act of 1974, as amended;
o The Immigration Reform Control Act, as amended;
o The Americans with Disabilities Act of 1990, as amended;
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o The Age Discrimination in Employment Act of 1967, as amended;
o The Fair Labor Standards Act, as amended;
o The Occupational Safety and Health Act, as amended;
o The Family and Medical Leave Act of 1993;
o The New York Equal Pay Law, as amended;
o The New York Human Rights Law, as amended;
o The New York Civil Rights Act, as amended;
o The New York Occupational Safety and Health Laws, as amended;
o The New York State Wage and Hour Laws, as amended;
o The New York Whistleblower Law, as amended;
o any other federal, state or local civil or human rights law or any
other local, state or federal law, regulation or ordinance;
o any contract, agreement and/or plan, including, but not limited to any
rights ▇▇. ▇▇▇▇▇ had, has or may have pursuant to or by reason of:
i. the Agreement and Plan of Merger dated as of October 15, 2000
among Texaco Inc., Chevron Corporation and Keepep Inc. (referenced
herein as the "Merger Agreement");
ii. the December 17, 1998 Severance Agreement between Texaco Inc. and
▇▇▇▇▇ ▇. ▇▇▇▇▇;
iii. the Texaco Inc. 1997 Stock Incentive Plan;
iv. any and all compensation agreements between Texaco Inc. and ▇▇▇▇▇
▇. ▇▇▇▇▇;
v. any and all qualified and unqualified Texaco Inc. benefit plans
under which ▇▇. ▇▇▇▇▇ enjoys participation, except to
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the extent ▇▇. ▇▇▇▇▇ has vested rights and/or entitlements as a
retiree of Texaco;
o any public policy, tort, or common law; and
o any allegation for costs, fees, or other expenses including attorneys'
fees incurred in these matters (except for payment of the attorneys'
fees provided for in this Agreement).
b. Nothing contained in this release shall constitute a
waiver by ▇▇. ▇▇▇▇▇ of any rights to enforce the terms of this Agreement or
rights to defense or indemnity he may have under state law or the articles of
incorporation or by-laws of Texaco Inc. or the Merger Agreement.
c. Texaco Inc. on behalf of itself and its subsidiaries
and divisions, knowingly and voluntarily releases and forever discharges ▇▇.
▇▇▇▇▇ of and from any and all claims, demands and/or causes of action, known and
unknown, which Texaco Inc. had, has or may have against ▇▇. ▇▇▇▇▇ as of the date
of execution of this Agreement.
4. ▇▇. ▇▇▇▇▇'▇ Older Workers Benefit Protection Act Rights.
▇▇. ▇▇▇▇▇ fully understands that in Paragraph 3 of this Agreement, ▇▇. ▇▇▇▇▇
waives any claims he has or may have under the Age Discrimination In Employment
Act of 1967, as amended (referenced herein as "ADEA"). In accordance with ▇▇.
▇▇▇▇▇'▇ rights under the Older Workers Benefit Protection Act, Texaco is hereby
notifying ▇▇. ▇▇▇▇▇ that (1) he has at least twenty-one (21) days from his
receipt of this Agreement to consider the waiver of his rights under the ADEA;
(2) he should consult with an attorney of his choosing prior to waiving his ADEA
rights by executing this Agreement; and (3) he has seven (7) days after he
executes this Agreement to revoke his waiver of his rights under the ADEA. Any
revocation of ▇▇. ▇▇▇▇▇'▇ waiver of his rights under the ADEA must be submitted
in writing to ▇▇▇▇▇▇ ▇. ▇▇▇▇, Senior Counsel, or his successor as designated by
Texaco or a representative of any corporate successor, at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Any such revocation of ▇▇. ▇▇▇▇▇'▇ waiver
of his rights under the ADEA must state, "I hereby revoke my waiver of my rights
under the Age Discrimination in Employment Act of 1967, as amended, that I
waived in the Separation Agreement and General Release between Texaco and me."
5. Representations by ▇▇. ▇▇▇▇▇. ▇▇. ▇▇▇▇▇ hereby represents,
with the knowledge and intent that Texaco will rely upon such representations in
entering into this Agreement, that:
a. Claims. ▇▇. ▇▇▇▇▇ has no claim, charge, complaint or
action against Texaco pending in any forum or form. In the event that any such
claim, charge, complaint or action has been filed, ▇▇. ▇▇▇▇▇ shall not be
entitled to recover any monies or other relief therefrom; and
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b. Company Property. ▇▇. ▇▇▇▇▇ acknowledges and agrees
that he is not, nor will he become, entitled to the use of any company property
after his resignation, including but not limited to, any documents, equipment,
services, materials, aircraft, apartments or housing, without the express
permission of the Chief Executive Officer of Texaco, provided however, ▇▇. ▇▇▇▇▇
shall be permitted to retain the computer and all related hardware and software
currently kept at ▇▇. ▇▇▇▇▇'▇ residence.
6. Representations by Texaco. Texaco represents that it has
no claims, charge, complaint or action against ▇▇. ▇▇▇▇▇ pending in any forum or
form. In the event that any such claim, charge, complaint or action has been
filed, Texaco shall not be entitled to recover any monies or other relief
therefrom.
7. Cooperation. ▇▇. ▇▇▇▇▇ agrees to cooperate with Texaco in
defending any action or proceeding including, but not limited to, any
administrative agency claims, charges or complaints and/or any lawsuit against
Texaco. ▇▇. ▇▇▇▇▇ also agrees to cooperate with Texaco as reasonably requested
to assist obtaining approvals and closing the pending merger between Chevron and
Texaco. ▇▇. ▇▇▇▇▇ further agrees to be available on reasonable notice to consult
on merger-related matters with Texaco. Texaco will reimburse ▇▇. ▇▇▇▇▇ for his
reasonable out-of-pocket expenses related to his compliance with this Paragraph
7.
8. No Use of Information. ▇▇. ▇▇▇▇▇ shall not use, publish,
or provide information for, or in any way cooperate with any other person in
using or publishing any confidential information learned by ▇▇. ▇▇▇▇▇ while he
was employed by Texaco. ▇▇. ▇▇▇▇▇ shall keep any such information confidential,
and shall promptly return any confidential materials obtained in the course of
his employment. The prohibitions of this paragraph apply to both written and
oral publications.
9. Confidentiality. ▇▇. ▇▇▇▇▇ agrees not to disclose any
information regarding the existence or substance of this Agreement, except to an
attorney and financial advisor with whom ▇▇. ▇▇▇▇▇ chooses to consult regarding
his consideration of this Agreement and to his spouse, as long as each such
person agrees to keep the existence and/or substance of this Agreement
confidential. Texaco agrees not to disclose any information regarding the
existence or substance of this Agreement except to the extent Texaco deems it
necessary for business purposes.
10. No Disparagement. ▇▇. ▇▇▇▇▇ agrees not to make any
statement nor to engage in any conduct that is professionally or personally
disparaging about, or adverse to, the interests of Texaco, Chevron or their
respective officers, directors, managers or supervisors, including, but not
limited to, any statements that disparage any such person or any product,
service, finances, financial condition, capability or any other aspect of the
business or reputation of Texaco or Chevron. Truthful testimony by
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▇▇. ▇▇▇▇▇ in connection with any litigation shall in no event be considered a
violation of this Paragraph 10. Notwithstanding the foregoing, if any senior
executive officer, director or former director of Texaco or Chevron makes any
statement or engages in any conduct that is professionally or personally
disparaging about ▇▇. ▇▇▇▇▇, then ▇▇. ▇▇▇▇▇ shall be released from his
obligations under this Paragraph 10 to the extent necessary to respond to such
statement or conduct.
11. Court Order Or Subpoena. The prohibitions imposed on ▇▇.
▇▇▇▇▇ by Paragraphs 8, 9 and 10 above shall not supercede the requirements of a
court order or subpoena. If ▇▇. ▇▇▇▇▇ receives a subpoena which in any way may
require him to act contrary to the prohibitions of Paragraphs 8, 9 and 10 above,
he will immediately contact Texaco by telephoning ▇▇▇▇▇▇ ▇▇▇▇, Esq. at (914)
253-7206, or his successor as designated by Texaco or a representative of any
corporate successor and will immediately forward the subpoena to Mr. Moan by
overnight mail to Texaco Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ or such other address as may be appropriately designated. ▇▇. ▇▇▇▇▇ will
cooperate fully with Texaco in any lawful effort it may make to quash any such
subpoena unless such cooperation would be detrimental to ▇▇. ▇▇▇▇▇ in any action
in which ▇▇. ▇▇▇▇▇ is a defendant.
12. Breach of Covenants. ▇▇. ▇▇▇▇▇ agrees that a material
breach of any of his covenants in this Agreement which causes harm to Texaco
shall relieve Texaco of any further obligations hereunder and, in addition to
any other legal or equitable remedy available to Texaco, shall entitle it to
recover any payments already paid to ▇▇. ▇▇▇▇▇ pursuant to Paragraph 1 of this
Agreement.
13. Governing Law and Interpretation. This Agreement shall be
governed and conformed in accordance with the laws of the State of New York
without regard to New York's conflict of laws provision. Should any provision of
this Agreement be declared illegal or unenforceable by any court of competent
jurisdiction and cannot be modified to be enforceable, excluding the general
release language, such provision shall immediately become null and void, leaving
the remainder of this Agreement in full force and effect. However, if any
portion of the general release language were ruled to be unenforceable for any
reason based upon any action taken by ▇▇. ▇▇▇▇▇ or on his behalf, ▇▇. ▇▇▇▇▇
shall return to Texaco all payments made to him pursuant to Paragraph 1 of this
Agreement.
14. No Admission of Wrongdoing. ▇▇. ▇▇▇▇▇ agrees that neither
this Agreement nor the furnishing of the consideration for this Agreement shall
be deemed or construed at any time for any purpose as an admission by Texaco of
any liability or unlawful conduct of any kind.
15. No Obligation to Mitigate. In no event shall ▇▇. ▇▇▇▇▇ be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to ▇▇. ▇▇▇▇▇ under any of the provisions of this
Agreement, and, except as
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specifically provided in this Agreement, such amounts shall not be reduced
whether or not ▇▇. ▇▇▇▇▇ obtains other employment.
16. Enforceability. This Agreement shall inure to the benefit
of and be enforceable by ▇▇. ▇▇▇▇▇'▇ personal or legal representatives,
executors, administrators, heirs, distributees, devisees and legatees. If ▇▇.
▇▇▇▇▇ should die while any amount is still payable hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to ▇▇. ▇▇▇▇▇'▇ devisee, legatees or other designee or, if there
is no such designee, to his or her estate.
17. Amendment. This Agreement may not be modified, altered or
changed except upon express written consent of both Parties wherein specific
reference is made to this Agreement.
18. Entire Agreement. This Agreement sets forth the entire
agreement between the parties hereto, and fully supersedes and extinguishes any
prior agreements, contracts or understandings between the parties. ▇▇. ▇▇▇▇▇
acknowledges that he has not relied on any representations, promises or
agreements of any kind made to him in connection with his decision to sign this
Agreement, except for those set forth in this Agreement. Notwithstanding the
foregoing, all of the terms of the applicable Texaco benefit plans and Texaco
Stock Incentive Plans will continue in full force and effect, except that the
Compensation Committee agrees neither to vest, impose conditions, nor forfeit
any options and/or restricted stock or units under the discretion granted to it
by the Stock Incentive Plan and/or ▇▇. ▇▇▇▇▇'▇ Stock Incentive Agreements.
IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this
Separation Agreement and General Release as of the date set forth below:
TEXACO INC. ▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
By: _____________________________ ________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Acting General Counsel
/s/ /s/
_______________________ ________________________
Witness Witness
5/2/01 5/1/01
Date: _____________________________ Date: _____________________________
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