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ITEM 14(a)3, EXHIBIT 10(t)
TESORO PETROLEUM CORPORATION
Non-Employee Director Retirement Plan
(Effective December 8, 1994)
To promote the interest of Tesoro Petroleum Corporation (the
"Company") and to assist the Company in obtaining and retaining qualified
persons to act as directors of the Company, the Company has adopted the
following Non-Employee Director Retirement Plan (the "Plan").
1. ADMINISTRATION. The Plan shall be administered by the Company's Board
of Directors or by a committee consisting of directors of the Company
appointed by the Board of Directors (the "Committee"). The Committee
shall make all determinations which may be necessary or advisable for
the administration of the Plan and is granted all powers and
discretion granted in Section 7.3 and 7.4 of the Tesoro Petroleum
Corporation Board of Directors Deferred Compensation Plan.
2. ELIGIBILITY. Each person, other than full-time employees of the
Company, serving, on or after the Effective Date of this Plan, as a
director subject to reelection by the holders of capital stock of the
Company entitled to vote in the elections of directors shall be
entitled to elect to participate in this Plan. Each director electing
to participate shall be entitled to benefits or the terms and
conditions set forth below.
3. RETIREMENT BENEFIT. Any eligible director who elects to participate
in this Plan and has served on the Board of Directors of the Company
for at least an aggregate of three full years (excluding service while
a full-time employee of the Company) shall be entitled to a retirement
payment beginning the later of the director's sixty-fifth birthday or
such later date that the individual's service as a director ends (the
"Retirement Date"), as provided herein. Subject to Sections 4 and 5
below, the Company shall pay to the director annually a sum (the
"Retirement Amount") equal to the base annual director retainer fee
paid at the time the person ends service as a director of the Company.
The base annual director retainer fee shall not include fees paid for
attendance at meetings or other purposes. After a director's
Retirement Date, the Retirement Amount shall be paid in monthly
installments beginning on the first day of the month following the
director's Retirement Date. The obligations of the Company under this
Plan shall be subject to such provisions as it may deem appropriate
for the withholding of any taxes which the Company determines is
required to be withheld in connection with any payment under this
Plan.
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4. TERMINATION OF PAYMENT. The Company shall pay the Retirement Amount
annually for a period equal to the aggregate length of time (the
"Benefit Period") the director served on the Board of Directors
(excluding any period during which the director was a full-time
employee of the Company), such period to be rounded up to the next
full year; provided that the Company's obligation to pay the
Retirement Amount shall terminate upon the death of the director.
Notwithstanding the preceding sentence, in the event of death of a
director after age 65, the Company shall pay an amount equal to 50
percent of the Retirement Amount to such director's spouse for the
shorter of the remaining term of the Benefit Period or until the date
of death of such spouse. In the event of death of a director during a
year, the amount paid the surviving spouse shall be prorated based on
the director's date of death. If a director does not have a spouse at
the time of his death, no further benefits shall be paid.
5. SPECIAL RETIREMENT PAYMENT. In addition to the benefit provided in
Section 3 above, if an electing director was the Chairman of the Board
or the Chairman of any committee of the Company's Board (the "Board")
at the time the director's service ends, the Company shall pay such
person a one-time payment equal to the fee paid the prior calendar
year by the Company for such individual's service as Chairman of the
Board and/or Chairman of any committee of the Board. This payment is
to be made within 30 days of the date the director's service ends. In
the event of death of a director while serving as Chairman of the
Board or Chairman of any committee of the Board, this payment shall be
made to such director's spouse if living, otherwise to his estate.
6. CONSULTATION. At any time payments are being made to a person
pursuant to this Plan, such person agrees to be available to consult
with and advise the Board of Directors of the Company from time to
time upon reasonable notice; provided that the Company shall pay all
out-of-pocket expenses of such person, such person shall not be
obligated to travel and such consultations shall not require more of
such person's time than that required when he served as a director.
7. MEDIATION-ARBITRATION. A director and the Company will attempt in
good faith to resolve any controversy or claim arising out of or
relating to this agreement by mediation in accordance with the Center
for Public Resources Model Procedure for Mediation of Business
Disputes.
If the matter has not been resolved pursuant to the aforesaid
mediation procedure within 60 days of the commencement of such
procedure (which period may be extended by mutual agreement), or if
either party will not participate in a mediation, the controversy
shall be settled by arbitration in accordance with the Center for
Public Resources Rules for Non-Administered
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Arbitration of Business Disputes, by a sole arbitrator. The
arbitration shall be governed by the United States Arbitration Act, 9
U.S.C. Section 1-16, and judgment upon the award rendered by the
Arbitrator(s) may be entered by any court having jurisdiction thereof.
The place of arbitration shall be San Antonio, Texas. The arbitrators
are not empowered to award damages in excess of actual damages,
including punitive damages.
8. EFFECTIVE DATE. This Plan shall be effective on December 8, 1994, and
shall remain in effect until termination by a resolution of the Board
of Directors of the Company. Upon termination of this Plan, no person
who has not retired shall be entitled to any benefits hereunder.
However, the benefits payable to all then-retired directors shall
continue in accordance with this Plan.
9. AMENDMENT OR TERMINATION OF THE PLAN. The members of the Board of
Directors may amend or terminate this Plan at any time by an
instrument in writing. Neither Plan termination nor amendment will
affect the rights of any director to the benefits which would then be
payable if such individual were then age 65 and ended his service
immediately before such amendment or termination. Any such benefits
shall be based upon the director fee schedule then in place.
10. PAYMENTS UNDER THIS AGREEMENT ARE THE OBLIGATIONS OF COMPANY. Company
will pay the benefits due under this Plan from the general assets of
the Company.
11. LIMITATION OF RIGHTS. Nothing in this Plan will be construed:
(a) To give any member of the Board of Directors any right to be
designated a participant in the Plan;
(b) To limit in any way the right of Company to remove an
individual from the Board of Directors at any time; or
(c) To evidence any agreement or understanding, expressed or
implied, that Company will retain an individual as a member of
the Board of Directors for any particular remuneration or any
terms of years.
12. DISTRIBUTIONS TO INCOMPETENTS. Should a director or spouse of a
deceased director become incompetent, the Committee is authorized to
pay the funds due directly to the incompetent or to apply those funds
for the benefit of the incompetent in any manner the Committee
determines in its sole discretion.
13. NONALIENATION OF BENEFITS. No right or benefit provided in this Plan
will be transferable by the individual. No right or benefit under
this Plan will be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge,
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and any attempt to anticipate, alienate, sell, assign, pledge,
encumber, or charge the same will be void. No right or benefit under
this Plan will in any manner be liable for or subject to any debts,
contracts, liabilities or torts of the person entitled to such
benefits. If any director or spouse of a deceased director becomes
bankrupt or attempts to anticipate, alienate, sell, assign, pledge,
encumber or charge any right or benefit under this Plan, that right or
benefit will, in the discretion of the Committee, cease. In that
event, the Committee may have Company hold or apply the right or
benefit or any part of it to the benefit of such individual or his or
her spouse in any manner the Committee believes to be proper in its
sole and absolute discretion, but is not required to do so.
14. SEVERABILITY. If any term, provision, covenant or condition of the
Plan is held to be invalid, void or otherwise unenforceable, the rest
of the Plan will remain in full force and effect and will in no way be
affected, impaired or invalidated.
15. NOTICE. Any notice or filing required or permitted to be given to the
Committee or a director or spouse of a deceased director will be
sufficient if in writing and hand delivered or sent by U.S. mail to
the principal office of Company or to the last known residential
mailing address of such individual. Notice will be deemed to be given
as of the date of hand delivery or if delivery is by mail, as of the
date shown on the postmark.
16. GENDER AND NUMBER. Words used in this Plan of one gender are to be
construed as though they were also used in another gender in all cases
where they would so apply and likewise words in the singular or plural
are to be construed as though they also included the other in all
cases where they would so apply.
17. GOVERNING LAW. The Plan will be construed, administered and governed
in all respects by the laws of the state of Texas.
IN WITNESS WHEREOF, the Company has executed this document effective
the 8th day of December 1994.
TESORO PETROLEUM CORPORATION
By /s/ WILLIAM T. VAN KLEEF
William T. Van Kleef
Vice President, Treasurer