Sample Business Contracts


Employment Agreement - Unocal Corp. and John W. Schanck

Employment Forms

  • Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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                           UNOCAL EMPLOYMENT AGREEMENT

         This  employment  agreement (the  "Agreement")  is made effective as of
July 28, 1998 by and between Unocal  Corporation,  a Delaware  corporation  (the
"Company") and John W. Schanck, Group Vice President & President,  Spirit Energy
76 ("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 July 28,
1998 and shall be for two 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 July 28, 1998 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 Group Vice President & President,  Spirit Energy 76,
and Employee 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.

3.       Compensation.

         3.1 As of the date of this Agreement,  Employee's annual base salary is
$365,004.  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;


<PAGE>
         (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
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,  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 average  annual Bonus earned by
                  Employee  (whether  paid  in  cash  or  deferred)  for the two
                  completed  fiscal  years   immediately  prior  to  Termination
                  Without  Cause,  reduced by the amount of any Unocal  Employee
                  Redeployment  Program  and/or  Unocal  Termination   Allowance
                  benefits payable to Employee.

         (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.

         (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 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:

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<PAGE>
         (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;
                  provided that the lump-sum   severance amount paid to Employee
                  under  this Paragraph  5.1(1),  which  is calculated  based on
                  Paragraphs  4.3(1)  and  4.3(3)  hereinabove,    shall  be (a)
                  reduced  to  equal the present value, determined in accordance
                  with Section  280G(d)(4)  of the Internal    Revenue Code (the
                  "IRC"),  of  the  lump-sum   severance  amount  which    would
                  otherwise be payable under   Paragraphs 4.3(1) and 4.3(3), and
                  (b) reduced to offset  compensation  and   other earned income
                  by Employee   in the manner provided for in Paragraphs  5.1(2)
                  and 5.1(3) below.

         (2)      The  lump-sum  severance  amounts  payable to  Employee  under
                  Paragraphs  4.3(1) and 4.3(3)  shall be reduced by one hundred
                  percent  (100%) of any  compensation  and other earned  income
                  (within the meaning of Section  911(d)(2)(A) of the IRC) which
                  is earned by  Employee  for  services  rendered  to persons or
                  entities other than the Company or its  affiliates  during the
                  three  years  immediately  following  Employee's   Termination
                  Without Cause.

         (3)      Not less  frequently  than  annually  beginning  on the  first
                  anniversary  following  Employee's  Termination Without Cause,
                  Employee  shall  account to the  Company  with  respect to all
                  compensation  and other earned income earned by Employee which
                  is  required  hereunder  to be  offset  against  the  lump-sum
                  severance  amount  received by Employee from the Company under
                  Paragraphs  5.1(1)  and  5.1(2).  If the  Company  has  paid a
                  lump-sum  severance  amount in  excess of the  amount to which
                  Employee  is  entitled  (after  giving  effect to the  offsets
                  provided for above),  Employee shall reimburse the Company for
                  such excess  within thirty (30) days of the  determination  of
                  such excess.  The  requirements  imposed under this  Paragraph
                  5.1(3) shall terminate thirty (30) days immediately  following
                  the  second  anniversary  of  Employee's  Termination  Without
                  Cause.

         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

         (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

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<PAGE>
         (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.

         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 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.

                                       4
<PAGE>
        (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  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.

         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.

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<PAGE>
         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.

         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.

         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.

         7.10 This  Agreement  succeeds  and  replaces  that  Unocal  Employment
Agreement which was effective December 8, 1997 between Company and Employee.


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

BY:
         Chairman of the Management Development and
         Compensation Committee of the Unocal
         Board of Directors

BY:
         EMPLOYEE

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