Exhibit 10.2(E)

 

UNOCAL EMPLOYMENT AGREEMENT

 

This employment agreement (the “Agreement”) is made effective as of March 12,
2003 by and between Unocal Corporation, a Delaware corporation (the “Company”)
and Randolph L. Howard (“Employee”).

 

In consideration of the mutual promises and agreements set forth herein, the
Company and Employee agree as follows:

 

1. Term.

 

1.1 The term of this Agreement (the “Term”) shall commence on March 12, 2003 and
shall be for two (2) years, subject to earlier termination in accordance with
the provisions of Section 4 hereinbelow. If the Agreement has not been subject
to early termination in accordance with the provisions of Section 4 hereinbelow,
beginning on March 12, 2003 and on each day thereafter, the Term shall
automatically be extended for an additional day unless the Company notifies
Employee in writing that it does not wish to further extend the Term.
Notwithstanding the foregoing, this Agreement shall end automatically and
without additional notice on the date of the Company’s Annual Meeting of
Shareholders that next follows the date of Employee’s sixty-fifth (65th)
birthday.

 

2. Position and Title.

 

2.1 The Company on behalf of itself and its affiliates and subsidiaries hereby
employs Employee as Vice President, International Energy Operations hereby
accepts such employment.

 

2.2 Employee shall devote substantially all of his efforts on a full time basis
to the business and affairs of the Company and shall not engage in any business
or perform any services in any capacity whatsoever adverse to the interests of
the Company.

 

2.3 Employee shall at all times faithfully, industriously, and to the best of
his ability, experience, and talents, perform all of the duties of his position.

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3. Compensation.

 

3.1 As of the date of this Agreement, Employee’s annual base salary is $340,608
Employee’s base salary and performance shall be reviewed periodically at
intervals approved by the Management Development and Compensation Committee of
the Board of Directors of the Company (the “Committee”), and Employee’s base
salary may be increased from time to time based on merit or such other
consideration as the Committee may deem appropriate.

 

3.2 During the Term, Employee shall participate in all of the Company’s
incentive plans, benefit plans and perquisites, and in any new or successor
incentive plans, benefit plans and perquisites, that are generally provided to
executives of the Company with a level of responsibility and stature comparable
to Employee. Performance goals, award opportunity, benefit levels, and
administrative guidelines for such plans shall be subject to review and approval
by the Committee.

 

4. Termination of Employment.

 

4.1 During the Term, the Company may terminate Employee’s employment herein at
any time for Cause or as a result of a material breach by Employee of his
obligations under this Agreement, provided however that, except in the case of
conviction of a felony, the Company shall provide Employee with not less than
sixty (60) days prior written notice describing the behavior or conduct which is
alleged by the Company to constitute Cause, and Employee shall be provided with
reasonable opportunity to correct such behavior or conduct within the notice
period. For purposes of this Agreement, Cause shall be defined as any or all of
the following:

 

  (1) Conduct or action by Employee which, in the opinion of a majority of the
Board of Directors, is materially harmful to the Company;

 

  (2) Willful failure by Employee to follow an order of the Board, except in
such case where the Employee believes in good faith that following such order
would be materially detrimental to the interests of the Company;

 

  (3) Employee’s conviction of a felony.

 

4.2 In the event that Employee’s employment is terminated by the Company for any
reason other than those set forth in Paragraph 4.1 hereinabove, or, (a)
Employee’s annual base salary is reduced below the amount stated in Paragraph
3.1 hereinabove (unless such reduction is part of an across the board reduction
affecting all Company executives with a comparable level of responsibility,
title or stature), or (b) Employee is removed from or denied

 

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participation in incentive plans, benefit plans, or perquisites generally
provided by the Company to other executives with a comparable level of
responsibility, title or stature, or (c) Employee’s target incentive
opportunity, benefits or perquisites are reduced relative to other executives
with comparable responsibility, title or stature, or (d) Employee is assigned
duties or obligations inconsistent with his position with the Company or (e)
There is a significant change in the nature and scope of Employee’s authority or
his overall working environment, or (f) Employee’s work location following a
Change In Control would result in an increase in his or her one way commute by
at least 50 miles from the existing residence, such event shall be considered a
Termination Without Cause.

 

4.3 In the event of Employee’s Termination Without Cause at any time during the
Term of this Agreement, then:

 

  (1) The Company shall pay Employee a lump-sum severance amount within thirty
(30) days following Termination Without Cause equal to two (2) times the sum of
(a) the higher of the Employee’s annual base salary at the time of Termination
Without Cause or the annual base salary stated in Paragraph 3.1 hereinabove, and
(b) the annual target Bonus applicable to Employee as of the beginning of the
calendar year in which such Termination Without Cause occurs. Such sum shall be
reduced by the amount of any Unocal Employee Redeployment Program and Unocal
Termination Allowance benefits payable to Employee; and further reduced by any
Change of Control enhancements (determined by the increase in the lump sum
amounts payable to Employee) under the Unocal Retirement Plan and the
non-qualified retirement plans of the Company.

 

  (2) The Company shall provide for Employee to receive medical, dental, life,
and disability insurance coverage for two (2) years following Termination
Without Cause at levels and a net cost to Employee comparable to that provided
to Employee immediately prior to Employee’s Termination Without Cause. In lieu
of the foregoing continued benefits, the Company in its sole discretion may
elect to pay the Employee the sum of $25,000 (twenty-five thousand U.S.
Dollars).

 

  (3) The Company shall pay Employee an additional lump-sum severance amount
within thirty (30) days following Employee’s Termination Without Cause equal to
two (2) times the base salary used to determine the lump-sum severance benefit
in paragraph 4.3(1) hereinabove, multiplied by 6% (.06).

 

4.4 In the event that during the Term of this Agreement Employee should
voluntarily resign from the Company, should terminate employment with the
Company due to death, permanent disability or incapacitation, or is

 

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terminated by the Company for Cause or for a material breach by Employee of his
obligations under this Agreement, then Employee shall not be entitled to any of
the termination benefits provided for in Paragraph 4.3 hereinabove, and the Term
of the Agreement shall immediately end.

 

4.5 Employee shall not be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to Employee under any
provisions of this Agreement.

 

5. Change of Control.

 

5.1 In the event of a Change of Control of the Company at any time during the
Term of this Agreement, then:

 

  (1) In the event of Employee’s Termination Without Cause within a period of
twenty-four (24) months following the date of a Change of Control, Employee
shall be entitled to the termination benefits described in Paragraph 4.3
hereinabove plus the benefit described in Section 5.1(2) below.

 

  (2) The Employee shall be entitled to an amount equal to the increase in the
lump sum value of Employee’s Unocal Retirement Plan and non-qualified retirement
plans of the Company if three years were added to Employee’s benefit service and
age thereunder. Such amount shall be payable hereunder notwithstanding Section
4.3(1) above.

 

5.2 For the purpose of this Agreement, a “Change of Control” shall mean:

 

(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)(a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the
then outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “outstanding Company Voting Securities”); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 5.2; or

 

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(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

 

(c) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the
acquisition of assets of another corporation (a “Business Combination”), in each
case, unless, following such Business Combination, (i) all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

 

(d) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

 

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5.3 Certain Additional Payments by the Company may be due as follows:

 

(a) Anything in this Agreement to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any payment or
distribution by the Company or its affiliates to or for the benefit of the
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise but determined without regard to any
additional payments required under this Section 5.3), (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Employee with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then the Employee shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by the Employee of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 5.3, if it shall be
determined that the Employee is entitled to a Gross-Up Payment, but that the
Payments do not exceed 110% of the greatest amount (the “Reduced Amount”) that
could be paid to the Employee such that the receipt of Payments would not give
rise to any Excise Tax, then no Gross-Up Payment shall be made to the Employee
and the Payments, in the aggregate, shall be reduced to the Reduced Amount.

 

(b) Subject to the provisions of Section 5.3(c), all determinations required to
be made under this Section 5.3, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst and Young or
such other certified public accounting firm as may be designated by the Employee
(the “Accounting Firm”) which shall provide detailed supporting calculations
both to the Company and the Employee within 15 business days of the receipt of
notice from the Employee that there has been a Payment, or such earlier time as
is requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Employee shall appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 5.3, shall be paid by the Company to the
Employee within five days of the receipt of the Accounting Firm’s determination.
Any determination by the Accounting Firm shall be binding upon the Company and
the Employee. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should

 

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have been made (“Underpayment”), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its remedies pursuant to
Section 5.3(c) and the Employee thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee.

 

(c) The Employee shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Employee is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Employee
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Employee in writing prior to the expiration of such
period that it desires to contest such claim, the Employee shall:

 

  (i) give the Company any information reasonably requested by the Company
relating to such claim,

 

  (ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company,

 

  (iii) cooperate with the Company in good faith in order effectively to contest
such claim, and

 

  (iv) permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Employee harmless,
on an after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 5.3(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Employee agrees to prosecute such
contest to a determination before any administrative

 

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tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Employee to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Employee, on an interest-free basis
and shall indemnify and hold the Employee harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to the such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Employee with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company’s control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

 

  (d) If, after the receipt by the Employee of an amount advanced by the Company
pursuant to Section 5.3(c), the Employee becomes entitled to receive any refund
with respect to such claim, the Employee shall (subject to the Company’s
employing with the requirements of Section 5.3 promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section 5.3(c), a determination is made that
the Employee shall not be entitled to any refund with respect to such claim and
the Company does not notify the Employee in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

 

6. Covenants.

 

6.1 Employee agrees that any and all confidential knowledge or information,
including but not limited to customer lists, books, records, data, formulae,
specifications, inventions, processes and methods, and developments and
improvements, which have been or may be obtained or learned by Employee in the
course of his employment with the Company, will be held confidential by
Employee, and that Employee shall not disclose the same to any person outside of
the Company either during his employment with the Company or after his
employment by the Company has terminated.

 

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6.2 Employee agrees that upon termination of his employment with the Company he
will immediately surrender and turn over to the Company all books, records,
forms, specifications, formulae, data, and all papers and writings relating to
the business of the Company and all other property belonging to the Company, it
being understood and agreed that the same are the sole property of the Company
and that Employee shall not make or retain any copies thereof.

 

6.3 Employee agrees that all inventions, developments or improvements which he
has made or may make, conceive, invent, discover or otherwise acquire during his
employment with the Company in the scope of his responsibilities or otherwise
shall become the sole property of the Company.

 

6.4 Employee agrees to provide a release of any claims with respect to
termination of his or her employment on such form as requested by the Company
upon payment of the sums provided in Section 4.3 above.

 

7. Miscellaneous Provisions.

 

7.1 All terms and conditions of this Agreement are set forth herein, and there
are no warranties, agreements or understandings, express or implied, except
those expressly set forth herein.

 

7.2 Any modification to this Agreement shall be binding only if evidenced in
writing signed by all parties hereto. This Agreement replaces and supercedes
that Unocal Employment Agreement between Company and Employee dated July 28,
1998 in its entirety.

 

7.3 Any notice or other communication required or permitted to be given
hereunder shall be deemed properly given if personally delivered or deposited in
the United States mail, registered or certified and postage prepaid, addressed
to the Company at 2141 Rosecrans Ave., Suite 4000, El Segundo, CA (Attention:
General Counsel), or to Employee at his or her most recent home address on file
with Company, or at other such addresses as may from time to time be designated
in writing by the respective parties.

 

7.4 The laws of the State of California shall govern the validity of this
Agreement, the construction of its terms, and the interpretation of the rights
and duties of the parties involved.

 

7.5 In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable,
the same shall not affect any other provision of this Agreement, but this
Agreement shall be construed as if such invalid, illegal or unenforceable
provisions had never been contained herein.

 

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7.6 This Agreement shall be binding upon, and inure to the benefit of, the
successors and assigns of the Company and the personal representatives, heirs
and legatees of Employee.

 

7.7 “Bonus” refers to the Unocal Incentive Compensation Plan and any replacement
or successor plan thereof.

 

7.8 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, whether or not the Employee is successful in such
proceeding.

 

7.9 The term “Company” shall include with respect to employment hereunder, any
subsidiary or affiliate of the Company, as well as any successor employer
following a Change in Control.

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first above written.

 

BY:

 

/s/ CHARLES R. WILLIAMSON

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    Charles R. Williamson for the Management Development and Compensation
Committee of the Unocal Board of Directors

BY:

 

/s/ RANDOLPH L. HOWARD

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EMPLOYEE

 

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