EXHIBIT 10
AGREEMENT AND GENERAL RELEASE
-----------------------------
This AGREEMENT AND GENERAL RELEASE, executed this 6th day of November, 2002, by
and between Dennis P.R. Codon (hereinafter referred to as "Employee"), and Union
Oil Company of California (hereinafter referred to as "Company") and Unocal
Corporation (hereinafter referred to as "Unocal").
WHEREAS, Employee is currently employed by Company and located in El
Segundo, California and is an officer of Company and Unocal;
WHEREAS, Employee, Company and Unocal wish to end his employment with
Company and his status as an officer of Unocal and Company if certain conditions
are satisfied.
WHEREAS, Employee, Company and Unocal have determined they wish to resolve
all issues regarding Employee's employment and termination thereof.
NOW, THEREFORE, in consideration of the mutual promises contained in this
AGREEMENT AND GENERAL RELEASE, the sufficiency of which are hereby acknowledged,
Company, Unocal and Employee agree as follows:
1. Employee shall resign as an officer of Unocal and Company
effective December 31, 2002 or such earlier date as is mutually
acceptable to the parties.
2. Employee shall be a "Consulting Employee" for the period January
1, 2003 (or the effective date following his resignation under
paragraph if earlier) through September 30, 2003 (the "Employment
Period") reporting to the Chief Executive Officer of Unocal. As a
Consulting -- Employee, Employee shall continue to be an Employee
for all purposes. During the Employment Period Employee will
continue to be paid his current base salary, accrue benefit
service under the Unocal Retirement Plan and otherwise continue
to be eligible for the Company's benefit plans such as 401k
contributions, health insurance, vacation pay, etc. that are
generally applicable to full time employees at his current salary
grade. 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. During the Employment Period, Employee shall not be
adversely affected by an amendment to retiree or retiree medical
benefits, including without limitation the amount of Employee's
Pension Bonus Service under the Unocal Retirement Plan, except
where such amendment would also apply to senior Company
executives.
3. Employee shall be paid his accrued but untaken vacation in the
approximate amount of $62,000 (Sixty-two Thousand Dollars) less
applicable withholding on or before January 15, 2003. Employee
shall accrue additional vacation while a Consulting Employee,
which shall be paid on or before October 15, 2003.
4. Employee shall be eligible to receive financial counseling
services at Company expense through December 31, 2003 in
accordance with existing Company policies,
5. Employee shall be eligible to receive a Revised Incentive
Compensation Plan Award for calendar year 2002. Said award shall
be determined based on the percentage of target awards payable to
corporate department employees of Company in salary grade X-08
based on Company performance but without any adjustment for
individual performance.
6. For Calendar year 2003 Employee shall be entitled to the greater
of (a) 75% (seventy-five) percent of the Revised Incentive
Compensation Award that would be payable to corporate department
employee in salary grade X-08 based on Company performance but
without any adjustment for individual performance or (b) 75%
(seventy-five percent) of the target Revised Incentive
Compensation Plan Award for an employee in salary grade X-08
without adjustment for Company or individual performance.
7. During the Employment Period Employee may perform services for
others so long as Employee remains reasonably available for
telephonic consulting and such services do not conflict with the
obligations of paragraph 16 below. Employee agrees that he will
resign as a Consulting Employee in the event he becomes employed
by a company in the business of oil and gas exploration and
production or by a government body that regulates or otherwise
has oversight over the activities of the Company. In the event
Employee resigns as a Consulting Employee or dies during the
Employment Period, he shall be paid the remaining portion of his
base salary for said period in a single sum within 30 days of
such resignation.
8. Employee shall terminate his employment with the Company
effective October 1, 2003, unless he has resigned prior to such
date.
9. Employee shall receive the sum of $1,415,522 (One Million, four
Hundred fifteen Thousand Five Hundred and Twenty-two Dollars)
less applicable withholding on or before March 30, 2003.
10. Employee's termination of employment shall not be deemed
"Voluntary" or "For Cause" under that Promissory Note dated as of
March 16, 2000. Therefore, the acceleration of the payment due
date under said Promissory Note to 60 days following termination
of employment shall not be applicable to Employee.
11. Employee's termination of employment, shall be treated as "at the
convenience of the Company" pursuant to the Long-Term Incentive
Plan of 1991, the Long-Term Incentive Plan of 1998 and 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 exercise vested
stock options applicable under the terms of said Plans upon a
termination of employment at the convenience of the Company. The
amount of the Employee's vested stock options, performance shares
and restricted stock, as well as a pro-ration of such awards
resulting from his termination are indicated in Attachment A,
assuming he remains a Consulting Employee through the Employment
Period. Other than the calendar year 2002 Revised Incentive
Compensation Plan Award, Employee shall not receive awards of
grants under the Long-Term Incentive Plan of 1998, the Revised
Incentive Compensation Plan, the Annual Incentive Plan or similar
plan of the Company after December 31, 2002. This shall not
affect his rights with respect to awards granted prior thereto.
12. Employee shall be paid the account balances under the
Supplemental Savings Plan as indicated on Section I of Attachment
A, including accrued interest to December 31, 2002 and the
deferred cash portion of the Revised Incentive Compensation Plan
("ICP") awards as indicated in Attachment A.
13. In the event a transaction is publicly announced that if
completed would constitute a "Change of Control" of Unocal (as
defined in the Long-Term Incentive Plan of 1998) prior to October
1, 2003 and a Change of Control of Unocal is consummated by any
party or parties prior to October 1, 2005 then Employee shall
receive the sum of $911,970 (Nine Hundred and Eleven Thousand,
Nine Hundred and Seventy Thousand Dollars), less applicable
withholding, payable within 60 days of said Change of Control.
14. Employee shall not be entitled to any other severance-type
benefits, including without limitation, Unocal Redeployment
Program or Unocal Termination Allowance Plan benefits, except as
specifically noted above. Employee shall not be entitled to any
payments under the Unocal Employee Agreement dated July 28, 1998
by and between Employee and Unocal Corporation. The parties
understand that this Agreement and General Release is a full
settlement of all of Employee's rights under said Employment
Agreement.
15. Employee has been granted a Performance Bonus Award pursuant to
the Long-Term Incentive Plan of 1998 and as a recipient of a
Unocal 2000 Executive Stock Purchase Program Award. Employee's
termination will be treated thereunder as other than a "Voluntary
Termination" or a "Termination for Cause". Therefore, Employee
will be entitled to payment of a Performance Bonus as if he had
remained in employment during the full Award Period, including
without limitation any payment under the Change Of Control
provisions thereof. He shall be treated in the same manner as any
other recipient of a Performance Bonus Award who did not
terminate employment during the Award Period. Notwithstanding the
above, Employee shall be treated no less favorably with respect
to the Unocal 2000 Executive Stock Purchase Program, including
the loan thereunder, as any other employee who participated in
the program.
16. All technical, business or other information, including all
documents, material and intellectual and tangible work product,
which is developed or received by Employee in connection with
Employee's work hereunder, or which is or has been otherwise
disclosed to Employee by Company either orally or in writing, is
the exclusive property of Company, and Employee agrees to
maintain such information in strict confidence and not to use
such information other than in work for Company. The foregoing
shall not apply to information which Employee can show either (i)
is already known to Employee other than as a result of work
performed hereunder or from prior work for the Company (ii) is or
becomes part of the public domain, other than by Employee's fault
or (iii) is required to be disclosed by applicable law.
Employee's obligations under this paragraph shall survive
termination of this Agreement.
17. GENERAL RELEASE
---------------
Except for the rights of Employee hereunder, in consideration for
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
covenants 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.
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.
This Agreement shall not in any way limit Employee's right to
assert claims, including through a lawsuit, for the actions of
the Released Parties that occur subsequent to the date this
Agreement is executed by the parties, except to the extent such
actions of Released Parties are expressly provided for in this
Agreement.
18. Waiver
------
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
Retention 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.
19. Employee shall not disclose the terms of this Agreement to any
third party, including current or former employees of the
Company, except for those employees who are involved in
administering matters related to or arising in connection with
this Agreement. In the event of any unauthorized disclosure,
Company may immediately terminate Employee's employment without
any penalty or any obligation under this Agreement. The Company
will only invoke this provision on compelling evidence that
Employee has intentionally breached the foregoing provision. At
the time of execution of this Agreement, Company agrees that it
has no knowledge of any unauthorized disclosure by Employee as
such disclosure is referred to in this paragraph.
Notwithstanding the foregoing, Employee may disclose this
Agreement to his attorney, accountant, tax advisor, spouse or
spouse's attorney (after first instructing them and obtaining
their agreement to not disclose this Agreement to others except
as required by law or professional rules) as well as to taxation
authorities and as required by law.
20. 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.
21. 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.
22. This AGREEMENT AND GENERAL RELEASE 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.
23. This AGREEMENT AND GENERAL RELEASE may not be modified except by
a written agreement signed by both Employee and by a Vice
President of Union Oil Company of California.
24. This AGREEMENT AND GENERAL RELEASE shall be interpreted to be
valid to the full extent possible under the laws of the State of
California.
25. 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 GENERAL RELEASE and that he will not allow or
assist in such transfer or assignment in the future.
26. This AGREEMENT AND GENERAL RELEASE shall not constitute an
admission by any Released Party of any wrongful action or
inaction whatsoever.
27. Company may not assign this Agreement, except that Company's
obligations hereunder shall be binding legal obligations of
Company and Unocal Corporation and any successor to all or
substantially all their business by sale, merger, consolidation
or otherwise.
28. Employee agrees that this AGREEMENT AND GENERAL RELEASE is
understood by Employee and is voluntarily entered into by the
Employee.
29. The payments and benefit provided under paragraphs 3, 7, 9 and 13
shall be payable even in the event of Employee's death prior to
receipt thereof. Employee may file a written beneficiary
designation for any such payments in the form of Attachment C.
The last such designation received by Company prior to his death
shall control any such payments. In the absence of a valid
election, payments shall be made to Employee's estate or legal
representative.
30. Employee acknowledges that he has been advised of his right to
consult with an attorney regarding the effect of this Agreement
prior to signing it. Employee has been advised of his right to
take at least twenty-one (21) days to study and review this
Agreement before signing. Employee also understands he has the
right to revoke this Agreement for seven (7) days after signing
it. If signed by both parties, this Agreement will become
effective upon the end of said seven (7) day period.
31. This Agreement shall be construed as a whole according to its
fair meaning. It shall not be construed strictly for or against
Employee, Company or any Release. This Agreement shall be
governed by the statutes and common law of the State of
California.
IN WITNESS WHEREOF, this AGREEMENT AND GENERAL RELEASE has been executed in
duplicate originals.
UNION OIL COMPANY OF CALIFORNIA
AND UNOCAL CORPORATION
By: /S/Timothy Ling
------------
/s/ Dennis P.R. Codon
-----------------
Signature
Dennis P.R. Codon
Timothy Ling -----------------
- ------------ Print Name
Print Name
November 6, 2002
November 6, 2002 ----------------
- ---------------- Date
Date
ATTACHMENT A TO AGREEMENT AND GENERAL RELEASE
I. ICP Cash Deferred
-----------------
$ 10,000.00 1998 ICP Deferral
$ 2,880.35 Interest Earned thru 9/30/02
------------
$ 12,880.35 Balance as of 9/30/02
$140,000.00 2001 ICP Deferral
$ 15,814.97 2002 Salary Deferred to Date
$ 7,675.62 Interest Earned thru 9/30/02
------------
$163,490.59 Balance as of 9/30/02
-----------
$176,370.94 Total
II. Supplemental Savings Plan
-------------------------
Balance
Accrued Accrued Co. Accrued through Cycle
Year Principal Contribution Interest 2002-21
1997 $ 6,460.00 $ 0.00
1998 $ 7,400.16 $ 635.09
1999 $ 8,200.32 $1,105.34
2000 $ 9,900.24 $2,221.87
2001 $ 12,150.24 $2,905.45
2002 $ 6,356.07 $621.88 $3,091.65 ___________
----------- ------- ---------
Total $ 50,467.03 $621.88 $9,959.40 $61,048.31
ATTACHMENT C TO AGREEMENT AND GENERAL RELEASE
BENEFICIARY DESIGNATION
-----------------------
I, Dennis P.R.Codon, (Employee) hereby designate the following person(s) as
Beneficiary for any payments due at the time of my death under Sections 2, 4, 5,
6, 8 and 11 of my AGREEMENT AND GENERAL RELEASE with Union Oil Company of
California, dba Unocal.
Name: __________________________
Address: __________________________
Relationship: __________________________
Interest (%): __________________________
Name: _______________________________
Address: _______________________________
Relationship: _______________________________
Interest (%): _______________________________
codonagrmt.doc