SCHEDULE 14A
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TEXACO INC.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
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[TEXACO]
[LOGO]
Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
NOTICE OF ANNUAL MEETING
Dear Stockholder:
Your Board of Directors and your management cordially invite you to attend
the Annual Meeting of the Stockholders of Texaco Inc. which will be held in the
Imperial Ballroom of the Hyatt Regency Houston, 1200 Louisiana Street, Houston,
Texas on Tuesday, May 14, 1996, at 10:00 a.m. for the purpose of transacting
such business as may properly come before the meeting.
The management intends to present for action at this meeting (1) the
election of six directors and (2) the approval of the appointment of auditors
for the year 1996. In addition, certain stockholders have notified the company
that they intend to present to the meeting proposals regarding corporate conduct
guidelines, operations in Burma (Myanmar), and an advisory committee.
The Board of Directors has fixed March 15, 1996, as the record date for
determination of the stockholders entitled to notice of, and to vote at, this
meeting. Whether or not you plan to attend the meeting, to assure your
representation, please complete, sign and mail promptly the enclosed proxy card
which is being solicited on behalf of the management. A return envelope which
requires no postage is enclosed for that purpose.
Because of the large stockholder population in the Houston area, many
stockholders are expected to attend the meeting. Accordingly, in fairness to all
stockholders wishing to attend, admittance to the meeting will be restricted to
stockholders or their properly identified proxies holding validated admission
tickets. Therefore, if you plan to attend the meeting, it is important for you
to mark the appropriate box provided on the accompanying proxy card.
Carl B. Davidson
Vice President and Secretary
March 28, 1996
PROXY STATEMENT
This proxy statement and accompanying proxy card are first being mailed to
stockholders on or about March 28, 1996. The proxies are being solicited by
order of the Board of Directors of Texaco Inc. and all expenses incident thereto
will be borne by the company. Proxies may be solicited by mail, telephone,
telegram, facsimile, or in person. The company will request persons holding
stock in their names for others, or in the names of nominees for others, to
obtain voting instructions from the beneficial owner, and the company will
reimburse such persons for their reasonable out-of-pocket expenses in obtaining
voting instructions. D. F. King & Co., Inc. has been retained to assist in
soliciting proxies at a fee not to exceed $17,500, plus reasonable out-of-pocket
expenses. A copy of the Annual Report for 1995, including audited financial
statements, is being sent to stockholders with this Proxy Statement. It is not
to be regarded as proxy soliciting material.
Vote Required for Approval
The affirmative vote of a majority of the voting power of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the subject matter is required for approval of matters presented to the meeting,
except for the election of directors, which requires a plurality of the votes of
the shares present in person or represented by proxy at the meeting and entitled
to vote on the election of directors. Your executed proxy will be voted at the
meeting, unless you revoke it at any time before the vote by filing with the
Secretary of the company an instrument revoking it, duly executing a proxy card
bearing a later date, or appearing at the meeting and voting in person.
Signed, unmarked proxy cards are voted in accordance with management's
recommendations. The number of shares abstaining on each proposal are counted
and reported as a separate total. Abstentions are included in the tally of
shares represented, but are not included in the determination of the number of
votes cast for or against a particular item. Therefore, abstentions have the
effect of a vote cast against a particular item. Shares not voted simply as a
consequence of brokers voting less than all of their entitlement on
non-discretionary items under the provisions of New York Stock Exchange Rule 452
are not included in the tally of the number of shares cast for, against or
abstained from any proposal, and will, therefore, have the effect of reducing
the number of shares needed to approve any item.
It is the policy of the company that all voted proxies and ballots be
handled in a manner that protects employee and individual stockholder voting
privacy, and no such vote shall be disclosed except: as necessary to meet any
legal requirements; in limited circumstances such as a proxy contest in
opposition to the Board of Directors; to permit independent Inspectors of
Election to tabulate and certify the vote; and to respond to stockholders who
have written comments on their proxy cards.
Unless otherwise indicated on any proxy card, the persons named as your
proxies in the proxy card intend to vote the shares it represents FOR all the
nominees for director, FOR Item 2, and AGAINST Items 3, 4 and 5.
1
THE BOARD OF DIRECTORS
GOVERNANCE, COMMITTEES AND COMPENSATION
Governance
The company believes that the cornerstone of good governance is the
integrity and quality of management - the Board of Directors and those whom the
Board chooses to lead the company. In furtherance of this historical belief, the
company has in effect the following policies and practices.
-- The preponderance of the Board consists of outside, independent
directors, currently 12 of 15, and the Committee of Non-Management Directors,
Audit, Compensation, Pension and Public Responsibility Committees, and the
Committee on Directors and Board Governance are composed entirely of outside
directors.
-- The Board, working with management, has established a series of
procedures to assure a flow of information about the company's business. New
directors participate in orientation programs, which include visits to company
facilities and discussions with management personnel. Pre-meeting materials
include supporting data and write-ups of items coming before the Board, as well
as operational and financial information. Senior officers routinely attend at
least a portion of every Board meeting, and they and other members of management
frequently brief the Board. Board members take these and other opportunities to
discuss company business with these officers.
-- Under the company's total quality program, the Board and management
discuss and define quality guidelines for each. Those for the Board include
loyalty to and pride in Texaco and its reputation; independence and integrity;
representation of the total stockholder constituency; good understanding of the
business; study and understanding of Board issues; active, objective and
constructive participation at meetings of the Board and its committees;
collective breadth of experience; appraisal of executive management; management
succession planning and review; assistance in representing Texaco to the outside
world; and individual availability for consultation on corporate issues.
-- Texaco has a policy of open communication with institutional investors,
other stockholders and the press, in annual public sessions and in smaller
sessions.
-- Texaco's Board periodically evaluates its effectiveness and has
identified the following nine areas of Board involvement and responsibility
as benchmarks for their focus on the creation and protection of value for
the stockholders:
1. The review and approval of Texaco's tactical plans, monitoring
their accomplishment and comparing Texaco's competitive positioning.
2. The review of Texaco's strategic plan and its long range goals, the
evaluation of Texaco's performance against such plan and goals and the
competition, and the evaluation of the desirability, as appropriate, of
modifications to such plans and goals.
3. The oversight of Texaco's financial health.
4. The monitoring of such activities of Texaco as pose significant risks and
of the company's programs to respond to and contain such risks.
5. The review of the performance of the Chief Executive Officer and other
senior officers and their compensation relative to performance.
2
6. The review of Texaco's adherence to its corporate "Vision and
Values" which include its responsibilities to its stockholders, employees,
customers and the community.
7. Preparedness for the selection of a successor Chief Executive
Officer, and the monitoring of the company's development and selection of
key personnel.
8. The selection process for Board membership and the overall quality
and preparedness of its members.
9. The availability of the information which the Board and management
believe is needed for the Board to perform its duties effectively.
-- The by-laws provide for stockholder nominations of director candidates.
This process includes discussion with stockholders and the adoption of,
publication and distribution to stockholders of guidelines and qualifications
for directors with the highest personal and professional ethics, integrity and
values; education and breadth of experience to understand business problems and
evaluate and postulate solutions; personality to work well with others with
depth and wide perspective in dealing with people and situations; respect for
the views of others and not rigid in approach to problems; a reasoned and
balanced commitment to the social responsibilities of the company; an interest
and availability of time to be involved with the company and its employees over
a sustained period; stature to represent the company before the public,
stockholders and the other various individuals and groups that affect the
company; the willingness to objectively appraise management performance in the
interest of the stockholders; an open mind on all policy issues and areas of
activity affecting overall interests of the company and its stockholders; and
involvement only in other activities or interests that do not create a conflict
with the director's responsibilities to the company and its stockholders.
-- Each Committee of Texaco's Board annually assesses its performance
to confirm that it is meeting its responsibilities under its charter. Some
of the items which Board committees consider in their self-evaluation are:
the appropriateness of the scope of its charter; appropriateness of matters
presented for information and for approval; sufficiency of time for
consideration of agenda items; frequency of meetings; length of meetings;
quality and length of written materials; and quality of oral presentations.
Committees
Texaco's Board is organized so that a significant portion of its business
is conducted through its committees. The composition and function of each
committee of the Board is as follows:
The Committee of Non-Management Directors, of which Mr. Murphy is
Chairman, was established in 1949. Among other responsibilities, the Chairman
leads the personal performance appraisals of the Chief Executive Officer and
also serves as a contact point on Board issues. This committee is composed of
all of the non-employee directors and is responsible for interpreting and
administering company incentive plans and reviewing the Compensation Committee's
recommendations for awards made under these plans, the handling of compensation
for employee directors, and the company's organization, personnel development,
and key management replacement programs with special focus on Chief Executive
succession. This committee held three meetings in 1995 and provides a forum for
the non-management directors to privately discuss the performance of management.
3
The Public Responsibility Committee met three times in 1995. The
members are Dr. Brademas (Chairman), Mr. Hawley, Dr. Jenifer, Mrs. Smith and
Mr. Steere. The committee reviews and makes recommendations regarding the
policies and procedures affecting the company's role as a responsible
corporate citizen, including those related to equal employment opportunity,
health, environmental and safety matters, the company's relationship with its
several constituencies and the company's philanthropic programs.
The Audit Committee, which was established in 1939, 38 years before the
New York Stock Exchange imposed this requirement on listed companies, has been
composed of non-management directors since its formation. It held two meetings
in 1995. Its members are Mr. Vanderslice (Chairman), Mr. Murphy, Mrs. Smith, and
Drs. Brademas and Jenifer. Depending on the nature of the matters under review,
the outside auditors, and such officers and other employees as necessary, attend
all or part of the meetings of the committee. The committee reviews and
evaluates the scope of the audit, accounting policies and reporting practices,
internal auditing, internal controls, security procedures and other matters
deemed appropriate. The committee also reviews the performance by Arthur
Andersen LLP in their audit of the company's financial statements and evaluates
their independence and professional competence. It reserves time at each meeting
to meet separately with outside auditors to discuss issues of importance,
including the sufficiency of management cooperation.
The Compensation Committee, which met three times in 1995, is composed of
Messrs. Beck (Chairman), Butcher, Carpenter, Price and Vanderslice. This
committee has the responsibility of reviewing the company's compensation
structure. To this end, along with other studies including the use of outside
consultants, the committee surveys and reviews compensation practices in
industry to make certain that the company remains competitive and able to
recruit and retain highly qualified personnel, and that the company's
compensation structure incorporates programs which reflect financial
performance, motivate performance which will best serve the stockholders'
interest and are in full compliance with Texaco's "Vision and Values." The
committee establishes the criteria for bonus and other executive compensation
packages.
The Finance Committee consists of Messrs. DeCrane (Chairman), Beck, Bijur,
Butcher, Carpenter, Price and Wrigley. It met three times in 1995. The committee
reviews and makes recommendations to the Board concerning the company's
financial strategies, policies and structure including: the current and
projected financial position and capital structure; the obtaining of funds
necessary for general operation; the guaranty of financial obligations of third
parties; cash management activities, such as investment guidelines, short-term
borrowing programs, the investment portfolio and cash mobilization systems;
exposure to fluctuation in foreign currency exchange rates and interest rates;
and changes in dividend policy.
The Committee on Directors and Board Governance, consisting of Messrs.
Butcher (Chairman), Beck, Murphy, Vanderslice and Wrigley, met four times in
1995. This committee maintains oversight of Board operation and effectiveness,
reviews the size and composition of the Board, reviews qualifications of
possible candidates for Board membership and recommends candidates to the Board
as nominees for election as directors. Candidates are selected on the basis of
the contributions such individuals can make in providing advice and guidance to
the Board and management. The Board is committed to a membership composed of
outstanding persons irrespective of gender or
4
race. The criteria for director candidates detailed above, which were
developed in consultation with individual and institutional holders and
published by the company to its stockholders, continue to be the guidelines for
the committee. The Committee on Directors and Board Governance also will
consider proposals for nomination from stockholders of record which are made in
writing to the Secretary, are timely, contain sufficient background information
concerning the nominee to enable a proper judgment to be made as to his or her
qualifications and include a written consent of the proposed nominee to stand
for election if nominated and to serve if elected. The requirements for making
nominations are set forth in the company's by-laws.
The Pension Committee met three times in 1995. The members are Messrs.
Wrigley (Chairman), Murphy, Price and Steere. The committee approves
investment policy and guidelines, reviews investment performance, and appoints
and retains Trustees, insurance carriers and investment managers for funds
allocated to the company's retirement plans.
The Board of Directors also has an Executive Committee, which may exercise
all of the powers of the Board in the management and direction of the business
and affairs of the company, except those which by statute are reserved to the
Board of Directors. This committee, consisting of Messrs. DeCrane (Chairman),
Bijur, Butcher, Carpenter, Krowe, Murphy and Vanderslice, and Mrs. Smith, met
once in 1995.
The Board of Directors held twelve meetings in 1995. Normally, one of the
meetings each year is held as part of a visit to a company facility to review
operations and meet field personnel. Overall attendance by directors at meetings
of the Board and its committees on which the directors served exceeded 95%.
Compensation
Employee directors receive no compensation for service on the Board or its
committees. Non-employee directors receive an annual retainer of $30,000, and
$1,250 for each Board and committee meeting attended, as well as an annual fee
awarded in restricted stock-equivalent units. Committee Chairmen receive annual
retainers of $7,000. One half of the annual retainers are paid in Texaco Common
Stock or restricted stock-equivalent units. Directors may elect to receive all
or any part of the remaining retainers and fees in Texaco Common Stock and to
defer payment of fees, in cash, in Common Stock or in restricted
stock-equivalent units.
A retirement plan for directors was terminated effective October 31, 1995,
and no further benefits will accrue under the plan after that date. Benefits
that accrued before the plan was terminated have vested and will be paid in
accordance with the terms of the plan.
Effective November 1, 1995, non-employee directors' compensation includes
an annual fee of 450 restricted stock-equivalent units, each unit having a value
equal to a share of Common Stock. These units have significant vesting and
transferability restrictions. A partial annual fee of 225 units was awarded for
the period from November 1, 1995 to the date of the 1996 Annual Meeting. This
fee in restricted stock-equivalent units is intended to confirm the mutuality of
interest among all stockholders, including the directors, and maintain director
compensation at competitive levels which may be adjusted as appropriate. In
general, the restricted stock-equivalent units vest only if the director serves
at least five years on the Board, with payment at the later of the director's
retirement from the Board or the director's sixty-fifth birthday, unless the
director elects to further defer payment. The units may vest sooner under
certain
5
circumstances, such as the director's death or disability or in a "change in
control" of the company. If a non-employee director retires from the Board
before the units vest, any units which have not then vested are cancelled, and
if a retired director engages in conduct which is adverse to the interests of
the company before the units are paid, any units which have not then been paid
are cancelled. Prior to payment, directors are prohibited from transferring the
restricted units. Directors will either receive or may elect to defer dividend
equivalents paid on the restricted units. Restricted units have no voting
rights.
Directors may participate in a group personal liability and property
damage insurance program administered and partially funded by the company.
As part of its corporate-wide effort to encourage charitable giving, the
company has established a directors' gift program. Institutions that are
qualified recipients of matching gifts under the Texaco Foundation gift program,
generally available to employees and retirees of the company, are the only
institutions that may qualify as recipients of gifts under the directors'
program. Upon the death of a director, the company will donate up to a total of
one million dollars to one or more qualifying charitable organizations
designated by the director. The directors' program is funded entirely by
insurance policies on the life of each director. The company owns the policies,
pays the premiums for such insurance ($669,862 for 1995) and is entitled to all
tax deductions resulting from such contributions to charitable organizations.
Individual directors derive no financial benefit from this program.
Voting Securities
Excluding 10,178,946 shares of the company's Common Stock held in the
company's treasury, there were outstanding, at March 15, 1996, the following
series of voting securities: 264,114,471 shares of Common Stock, 741,822.21
shares of Series B ESOP Convertible Preferred Stock and 59,709.02 shares of
Series F ESOP Convertible Preferred Stock. Each outstanding share of Common
Stock is entitled to one vote, each outstanding share of Series B Preferred
Stock is entitled to 12.9 votes and each outstanding share of Series F Preferred
Stock is entitled to ten votes on all matters properly brought before the
meeting. All the shares of the Series B and Series F Preferred Stock are voted
by State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02104-1389, the independent Trustee of the company's Employee
Stock Ownership Plans. State Street Bank and Trust Company filed a Schedule 13G
disclosing that, as of December 31, 1995, it had voting and dispositive power
over 14,045,351 shares, or approximately 5.1% of the company's outstanding
voting securities, as Trustee of the foregoing plans (as well as various
collective investment funds and personal trust accounts). Under the terms of
these plans, State Street Bank and Trust Company is required to vote shares
attributable to any participant in accordance with confidential instructions
received from the participant and to vote all shares for which it shall not have
received instructions in the same ratio as the shares with respect to which
instructions were received.
The company has established a grantor trust and contributed to such trust
4,000,000 shares of Common Stock to be held as a reserve for the discharge of
the company's obligations under certain nonqualified deferred compensation plans
and arrangements. These shares are voted by the Trustee in accordance with
written
6
instructions received from the beneficiaries of the trust. Shares for
which no instructions are received are voted in the same ratio as the shares
with respect to which instructions are received.
Other Relationships
Payments of $3,241,495 for advertising were made to broadcasting entities
and publications owned by Capital Cities/ABC, Inc., of which Mr.
Murphy was Chairman and Chief Executive Officer.
These transactions were effected in the ordinary course of business on
terms at least as favorable to the company as those obtainable in similar
transactions with unaffiliated parties.
Security Ownership of Directors and
Management
The table below sets forth, as of January 1, 1996, information with
respect to the company's voting securities and non-voting stock-equivalent
restricted units beneficially owned by directors, executive officers included in
the "Summary Compensation Table" on page 23 and all directors and executive
officers of the company as a group. The total beneficial ownership of voting
securities of all directors and executive officers as a group represents less
than 1% of each class of shares outstanding.
Number of Shares or Units
-------------------------
Stock-Equivalent
Series B Restricted
Names of Beneficial Owners Common Stock Preferred Units
-------------------------- ------------ --------- -----
Robert A. Beck 4,672 -- 227
Peter I. Bijur 32,657 157 --
C. Robert Black 31,258 153 --
John Brademas 1,349 -- 227
Willard C. Butcher 2,001(1) -- 227
Edmund M. Carpenter 352 -- 1,447
Alfred C. DeCrane, Jr. 160,752 370 --
James L. Dunlap 49,329 159 --
Michael C. Hawley 200 -- 311
Franklyn G. Jenifer 100 -- 740
Allen J. Krowe 61,475 286 --
Thomas S. Murphy 19,924 -- 227
Charles H. Price, II 1,711(2) -- 2,488
Robin B. Smith 300 -- 1,095
William C. Steere, Jr. 700 -- 2,866
Thomas A. Vanderslice 10,941 -- 5,379
William Wrigley 29,606(3) -- 227
Directors and Executive
Officers as a group 712,407 3,167 15,461
(1) Does not include 21 shares held by Mr. Butcher's wife as custodian for
their minor son, as to which Mr. Butcher disclaims beneficial interest.
(2) During the preparation of Form 5 filings with respect to directors' and
executive officers' stockholdings at year end 1995, it was discovered that
500 shares of Common Stock held in Mr. Price's IRA Trust Account and 500
shares held in the Charles H. and Carol Price Foundation, both included
herein, had not been reported previously.
(3) Does not include 124,796 shares owned of record by the Wm. Wrigley Jr.
Company Foundation, of which Mr. Wrigley is Chairman of the Board and
among the officers authorized to vote the shares held by the
Foundation, or 1,000 shares held in a trust, of which Mr. Wrigley is
the trustee with sole voting and investment power, for the benefit of
his son. Mr. Wrigley disclaims any beneficial interest in such shares.
7
Item 1-Election of Directors
The Board is divided into three classes of directors. At each annual
meeting of stockholders, members of one of the classes, on a rotating basis, are
elected for a three-year term.
In accordance with the company's Restated Certificate of Incorporation and
by-laws, the Board of Directors by resolution fixed the total number of
directors at 15.
The Board has designated six persons as nominees for election as directors
at the Annual Meeting. Messrs. Hawley, Krowe, Steere and Wrigley and Mrs. Smith
are standing for three-year terms expiring in 1999. In order to balance the size
of the three classes, Mr. Bijur has been designated a nominee for a two-year
term expiring in 1998. It is the policy of the Board that officers who serve as
Directors of the company retire from the Board on the date they retire as
employees. Mr. Krowe's normal retirement date as an employee is July 1, 1997,
and he is scheduled to retire from the Board on that date, prior to the
expiration of his three-year term. Upon his retirement the Board could reduce
the number of members or nominate another candidate. All of the nominees are
currently directors and, except for Mr. Hawley and Mr. Bijur, were previously
elected by the stockholders.
The company has no reason to believe that any of the nominees will be
disqualified or unable or unwilling to serve if elected. However, if any nominee
should become unavailable for any reason, proxies may be voted for another
person nominated by the present Board of Directors to fill the vacancy, or the
size of the Board may be reduced.
Following is certain biographical information concerning the nominees, as
well as those directors whose terms of office are continuing after the
meeting.
8
NOMINEES FOR THREE-YEAR TERM EXPIRING
AT THE 1999 ANNUAL MEETING
Michael C. Hawley, 58, President and Chief Operating Officer and
Director of The Gillette Company since April 1995, was elected a
director on July 28, 1995. After joining Gillette in 1961, he
held management positions of increasing responsibility in a
[PICTURE] variety of countries and returned to Boston in 1985 when he was
appointed Vice President, Operations Services, and elected a
corporate Vice President. In 1989 he was elected President of
Oral-B Laboratories, a Gillette subsidiary, and in 1993 was
elected Executive Vice President, International Group. He is also
a director of John Hancock Mutual Life Insurance Co.
Allen J. Krowe, 63, Vice Chairman of the Board of Texaco
Inc., has been a director since 1993. He joined Texaco in 1988 as
Senior Vice President and Chief Financial Officer after having
[PICTURE] served as Executive Vice President and a director of IBM
Corporation. Mr. Krowe is a director of PPG Industries, Inc., IBJ
Schroder Bank & Trust Company and the University of Maryland
Foundation.
Robin B. Smith, 56, President of Publishers Clearing House
since 1981 and also Chief Executive Officer since 1988, was
elected a director in 1992. Prior to joining Publishers Clearing
House, Mrs. Smith concluded her sixteen year career with
[PICTURE] Doubleday & Co., Inc. as President and General Manager of its
Dell Publishing subsidiary. She is a director of Springs
Industries, Inc., BellSouth Corporation, Omnicom Group, Inc. and
several Prudential mutual funds, and is a member of the Visiting
Committee of the Harvard Board of Overseers to the Harvard
Business School.
William C. Steere, Jr., 59, Chairman and Chief Executive
Officer of Pfizer, Inc., was elected a director in 1992. Mr.
Steere began his career with Pfizer, a diversified health care
company with global operations, and attained the positions of
[PICTURE] President of Pfizer Pharmaceutical Group and President and Chief
Executive Officer before elevation to his present position in
1992. He is a director of the Federal Reserve Bank of New York,
the New York Botanical Garden, Minerals Technologies, Inc.,
WNET-Thirteen, the Business Council, the Business Roundtable and
the New York University Medical Center. He is also past chairman
of the Board of Directors of the Pharmaceutical Manufacturers
Association.
William Wrigley, 63, President, Chief Executive Officer and
a director of Wm. Wrigley Jr. Company, has been a director since
1974. He is Chairman of the Board, Chairman of the Executive
Committee and a director of Santa Catalina Island Company, and a
[PICTURE] director of American Home Products Corporation, Wrigley Memorial
Garden Foundation and Grocery Manufacturers of America, Inc. He
also serves as a Trustee of the University of Southern California
and is a Benefactor and Life Member of the Santa Catalina Island
Conservancy.
9
NOMINEE FOR A TWO-YEAR TERM EXPIRING
AT THE 1998 ANNUAL MEETING
Peter I. Bijur, 53, Vice Chairman of the Board of Texaco
Inc., was elected a director on January 29, 1996 and will succeed
Mr. DeCrane as Chairman and Chief Executive Officer upon Mr.
DeCrane's retirement this July. He joined the company in 1966 and
was elected a Vice President in 1983. In 1991 he was appointed
[PICTURE] President of Texaco Europe. He was elected a Senior Vice
President of Texaco Inc. in 1992. He is a Trustee of Middlebury
College and is a member of the INROADS, Inc. National Honorary
Board of Directors. He also is a Fellow both of the Institute of
Petroleum and of the Royal Society of Arts in London.
DIRECTORS CONTINUING IN OFFICE UNTIL
THE 1998 ANNUAL MEETING
John Brademas, 69, President Emeritus of New York
University, became a director in 1989. He served eleven terms in
Congress as a Representative from Indiana, the last two as
Majority Whip. He is a graduate of Harvard and Oxford
Universities, where he was a Rhodes Scholar. He is a director of
[PICTURE] Loews Corporation, Scholastic, Inc. and NYNEX Corporation,
Chairman of the President's Committee on the Arts and Humanities,
and is active in numerous academic and philanthropic
organizations.
Alfred C. DeCrane, Jr., 64, Chairman of the Board and Chief
Executive Officer of Texaco Inc., has had 37 years of service
with the company and has been a director since 1977. Mr. DeCrane
assumed the position of Chief Executive Officer in 1993 and has
served as Chairman of the Board since January 1, 1987. Prior to
[PICTURE] that he had been President since March 1, 1983. He is a Trustee
of the Committee for Economic Development and The Conference
Board, a director of CIGNA Corporation, CPC International Inc.,
Dean Witter, Discover & Co., the American Petroleum Institute,
and a member of the Board of Trustees of the University of Notre
Dame.
Thomas S. Murphy, 70, former Chairman of the Board and Chief
Executive Officer of Capital Cities/ABC, Inc., has been a
director since 1977. He is Chairman of the New York University
[PICTURE] Medical Center Board of Trustees, a member of the Board of
Overseers of Harvard College and a director of Johnson & Johnson
and Walt Disney Co.
Charles H. Price, II, 65, Chairman, Mercantile Bank of
Kansas City and former United States Ambassador to the United
Kingdom (1983-1989) and Belgium (1981-1983), became a director in
1989. He is a director of the Mercantile Bancorporation, Inc.,
[PICTURE] 360 Degrees Communications Co., The New York Times Company,
Hanson PLC and U.S. Industries, Inc. Prior to service as a
United States Ambassador, he had been Chairman of the Board of
the Price Candy Company, American Bancorporation and American
Bank and Trust Company.
10
DIRECTORS CONTINUING IN OFFICE UNTIL
THE 1997 ANNUAL MEETING
Robert A. Beck, 70, Chairman Emeritus since 1987 and former
Chairman of the Board and Chief Executive Officer of The
Prudential Insurance Company of America, has been a director
[PICTURE] Since 1984. He Joined Prudential in 1951, was elected President
in 1974 and Chairman and Chief Executive Officer in 1978. He is a
director of Xerox Corporation and The Boeing Company, and is a
Trustee of Syracuse University.
Willard C. Butcher, 69, former Chairman and Chief Executive
Officer of the Chase Manhattan Bank, N.A. has been a director
since 1981. He is a director of ASARCO, Incorporated,
International Paper Co., M.I.M. Holdings, Ltd. (Australia), and
Olympia & York Companies (U.S.A.). He is a member of The Business
Council, the International Advisory Board for Banca Nazionale del
[PICTURE] Lavoro, and vice chairman of the International Advisory Committee
for the Chase Manhattan Bank, and vice chairman of Lincoln Center
for the Performing Arts, Inc. He is a Trustee emeritus of the
American Enterprise Institute for Public Policy Research and a
fellow emeritus of Brown University and a Trustee of Business
Committee for the Arts, Inc.
Edmund M. Carpenter, 54, former Chairman and Chief Executive
Officer of General Signal Corporation from 1988 to 1995, was
elected a director in 1991. Prior to serving with General Signal,
[PICTURE] Mr. Carpenter was President, Chief Operating Officer and a
director of ITT Corporation. He is a director of Campbell Soup
Company and Dana Corporation.
Franklyn G. Jenifer, 56, President of the University of
Texas at Dallas, has been a Director since 1993. Following an
academic career as a professor of biology, Dr. Jenifer was
President of Howard University from 1990 to 1994. Prior to that
he was Chancellor of the Massachusetts Board of Regents of Higher
Education, and from 1979 to 1986, Vice Chancellor of the New
Jersey Department of Higher Education. He is Immediate Past Chair
of the American Council on Education and serves on the Board of
Visitors of the John F. Kennedy School of Government of Harvard
[PICTURE] University, the Corporation of Woods Hole Oceanographic
Institution, the National Foundation for Biomedical Research, the
Board of Trustees of Universities Research Association, Inc., the
Board of Directors of the United Way of Metropolitan Dallas, and
the Monitoring Committee for the Louisiana Desegregation
Settlement Agreement.
Thomas A. Vanderslice, 64, President, TAV Associates, has
been a director since 1980. He was formerly Chairman of the
Board, President and Chief Executive Officer of M/A-COM, Inc.,
Chairman and Chief Executive Officer of Apollo Computer, Inc.,
[PICTURE] President and Chief Operating Officer of GTE Corporation, and an
officer of General Electric Company. He is a member of the Board
of Trustees of Boston College and of the Board of Directors of W.
R. Grace & Co., the National Academy of Engineering, the American
Chemical Society, and the American Institute of Physics, and
Chairman of the Massachusetts High Technology Council.
11
Item 2-Approval of Auditors
The following resolution concerning the appointment of independent
auditors will be offered at the meeting:
"RESOLVED, that the appointment by the Board of Directors of the company
of Arthur Andersen LLP to audit the accounts of the company and its subsidiaries
for the fiscal year 1996 is hereby ratified and approved."
Arthur Andersen LLP has been auditing the accounts of the company and its
subsidiaries for many years. In recommending the approval by the stockholders of
the appointment of that firm, the Board of Directors is acting upon the
recommendation of the Audit Committee, which has satisfied itself as to the
firm's professional competence and standing.
Representatives of Arthur Andersen LLP will be present at the meeting with
the opportunity to make a statement and to respond to appropriate questions.
Stockholder Proposals
The company is not responsible for the content of the stockholder
proposals contained in Items 3, 4 and 5 which are printed as they were
submitted. The names, addresses and shareholdings of the proponents may be
obtained upon oral or written request to the Secretary of the company.
Item 3-Stockholder Proposal Relating to
Corporate Conduct Guidelines
WHEREAS: Texaco's Corporate Conduct Guidelines function as the company's
statement of policy governing business internationally. In it, Texaco states
our company:
- cooperates with federal, state and local governments in analyzing
emerging environmental issues, finding solutions to environmental
problems and developing cost-effective, scientifically based
environmental standards.
- promotes employee safety and health, both on and off the job.
- demonstrates commitment to environment, health and safety
matters by scheduling auditing/compliance assurance visits
developed annually.
- believes a work environment which reflects diversity and
is free of all forms of discrimination, intimidation and
harassment is essential for a productive and efficient work force.
- respects each employee's right to engage in or refrain from engaging
in activities associated with representation by a labor organization.
We commend Texaco for creating such forward looking guidelines. However,
we believe these guidelines fall short in vitally important areas and that,
in fact, Texaco's international conduct, at times, is in direct conflict with
the company's own guidelines.
For example, take the case of Texaco's expanding involvement in the police
state of Burma, one of the world's most repressive countries, as confirmed by
Amnesty International and the U.S. State Department. Human rights monitors
agree the July, 1995 release of Burma leader, Aung San Suu Kyi,
12
has not lessened human rights violations against her or against the Burmese
people. Many human rights groups believe Texaco's controversial connection
with the illegitimate military junta in fact hurts our reputation more than
it builds respect in the world community. Furthermore, a clear case can be
made that Texaco's Burma involvement strengthens the repressive military
government through the payment of tens of millions of dollars as payment for
exploration rights, goods and services now and in the future. We believe
Texaco also provides legitimacy to an ostracized government by investing there
and portrays the country in a positive light which helps counter growing
international criticism.
But Burma is only one example. Texaco also does business in other
countries with controversial human rights records: Indonesia, China and
Thailand.
Thus, we believe that Texaco's principles need significant expansion.
Entirely absent from the present guidelines, for example, are clear human rights
criteria. For example, Levi Strauss, in its Guidelines for Country Selection,
states, "We should not initiate or renew contractual relationships in countries
where there are pervasive violations of human rights."
RESOLVED: The shareholders request the Board of Directors to
review and update the Texaco Corporate Conduct Guidelines and report
their revisions to shareholders and employees by September 1996. In
its review, the Board shall include a section with guidelines on
maintaining investments in or withdrawing from countries where there
is a pattern of on-going and systematic violation of human rights,
where a government is illegitimate or where there is a call by human
rights advocates, pro-democracy organizations or legitimately elected
representatives for economic sanctions against their country.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE
FOLLOWING REASONS:
Many of the concerns noted by the proponents are addressed in the
company's Corporate Conduct Guidelines, along with our Guiding Principles and
Objectives. In these, we have set the standards we have followed for decades and
still follow today in doing business worldwide, that is "to adhere to the
highest ethical standards in the conduct of our business."
The additional standards, suggested by the proponents, for determining
whether business should be conducted in a particular country would put the
company in the business of making political decisions. We are being asked to
determine and investigate whether there is "a systematic violation of human
rights" and decide whether "a government is illegitimate." We believe these are
decisions to be made by governmental authorities and quasi-governmental units,
not individual persons or companies. Consistent with our Guidelines, in those
instances where the United States government has, for human rights or other
reasons, mandated that U.S. companies refrain from commerce with or in various
countries, the company has scrupulously complied - oftentimes at a significant
exposure or loss of property and earnings.
But, we do not believe the company should be required to terminate
operations in a particular locale or country because a self-designated human
rights advocate calls for sanctions against a particular country. The imprudence
of this position is evidenced by circumstances such as:
- Some reputable groups such as the Association of South East Asian
Nations have recognized the State Law and Order
13
Restoration Council (SLORC) in Myanmar as the legitimate government there. Other
groups condemn SLORC. Myanmar maintains diplomatic relations with the United
States and is a full member of the United Nations.
- Some groups allege that the United States systematically violates human
rights by imposing the death penalty. Clearly, it is not intended that the
company be barred from doing business in the United States.
- Member countries of the United Nations in a number of well publicized
circumstances have been unable to agree upon a standard to apply in assessing
whether violations of human rights are occurring and the level of action which
should be taken if such violations are found.
The company does not believe that it is appropriate for it to define a
specific set of "rights" which must be adhered to politically, administratively
and culturally by a country, that it would apply before entry into any
particular country. The company strives to ensure that its conduct throughout
the world is in full compliance with the high standards set forth in its
Corporate Conduct Guidelines, and believes that this can and is being done in
ways more practicable than any effort to delineate specific rights which must
exist in every society, political situation, or cultural circumstance before the
company will become active there.
Importantly, the very nature of our investments in exploration and
development, gasification and power generation, refining and licensing can have
a lasting, positive impact through exchange of cultural, economic and
technological information, exposure to other social practices and values and
access to world markets. In addition to plants and technology, Texaco also
invests in people by providing tangible benefits through competitive wages,
advanced training and other personnel support and advancement programs.
Texaco's investment policy is, of course, aimed primarily at enhancing the
competitive position and value of the company for its shareholders. In doing so,
the company remains committed to enhancing the welfare of those in the nations
in which it operates by adhering to its policy of respect for human dignity.
Over 94% of the company's stockholders agreed with this approach when the
same proposal was put before them last year.
Therefore, the Board of Directors recommends a vote AGAINST this proposal.
Item 4-Stockholder Proposal Relating
to Burma
WHEREAS the illegitimate government of Burma (Myanmar), which calls itself
the State Law and Order Restoration Council (SLORC), brutally suppresses the
Burmese people's movement toward democracy and has massacred or imprisoned
thousands of human rights demonstrators.
WHEREAS in July, 1995, SLORC released from six years of house arrest Aung
San Suu Kyi, whose party, the National League for Democracy, won a landslide
victory in 1990 elections. SLORC still refuses to permit the elected Parliament
to meet. Further, human rights monitors agree Aung San Suu Kyi's release has not
lessened human rights violations against her or against the Burmese people.
Reports by human rights observers and organizations regularly report forced
relocations of villagers, forced labor, political prisoners estimated at 1,000,
and other human rights violations.
WHEREAS SLORC gains political legitimacy and maintains financial
solvency,
14
in part, through partnerships with foreign oil companies. When Texaco
explorations are successful, SLORC will be paid significant amounts of money and
may exercise its option to own 15 percent of the production. SLORC will be a
corporate partner in this operation with Texaco.
WHEREAS Texaco will not state publicly that internationally recognized
standards of human rights are being violated in Burma and publicly urge that
political prisoners be released and political power transferred to the
democratically elected government of Burma.
RESOLVED the shareholders request the Board of Directors to adopt as
policy: Texaco shall terminate operations in Burma until political prisoners are
released and political power transferred to the democratically elected
government of Burma (Myanmar).
Statement of Support
Representatives of the religious shareholders, filers of this resolution,
met with management to raise human rights concerns about our company's
operations in Burma. While we understand that Texaco cannot simply move its
operations to another location as other companies have done, nonetheless, we
believe it must not do business with a government that flagrantly violates
common standards of human dignity without at least protesting that injustice.
Indeed, the SLORC justifies its forced labor by cleverly manipulating statements
about Asian cultures and merit gained, according to the tenets of the Buddhist
religion, by laboring "voluntarily."
Texaco and other corporations claim political neutrality in Burma. At the
same time Texaco is striving mightily to distance itself and its operations from
Burma's military regime and its policies. However, doing business within a
repressive regime is inherently political, and SLORC is such a regime. We
believe the facts associated with Burma and the release of Aung San Suu Kyi call
for a dramatic public statement of support for an end to human rights violations
against Burmese students, daily laborers, ethnic minorities, peasants, refugees
in camps along both sides of the borders.
If you are concerned about Texaco's presence in Burma, please vote "yes"
for this resolution.
The Board of Directors recommends
a vote AGAINST this proposal for the following reasons:
Texaco's business is exploring for and developing hydrocarbon reserves
where they can be found to exist in the world and providing quality petroleum
products and related services to the world's people. In the pursuit of this
business, we operate in more than 140 countries and encounter a variety of
political climates. Unlike many other industries that often can choose sites for
their operations, the oil industry must go where hydrocarbon deposits lie or are
expected to lie. Texaco believes that potentially significant natural gas
reserves lie off the coast of Myanmar.
We are aware of the charges directed from a number of sources and toward
the present Myanmar government concerning human rights abuses. We abhor
violations of basic human rights where they occur. We have reviewed our policies
and guidelines, which require that Texaco apply high ethical and moral standards
in everything we do, with officials at the highest levels of the Myanmar
government, and we have been assured by them that our proposed activities there
can be carried out consistent with our guidelines.
In those instances where the United States government has, for human
rights or other reasons, mandated that U.S. companies refrain from commerce with
or in various
15
countries, the company has scrupulously complied with these directives -
oftentimes at a significant exposure or loss of property and earnings - and
would do so in Myanmar should the U.S. government take such action.
In addition, should we elect to move forward with our development plans
in Myanmar, we fully intend to back up our words with actions that clearly
demonstrate Texaco's high level of respect for the individual. We believe
that our presence there could help build economic conditions that encourage
human rights advancement through the creation of jobs, the transfer of
technology and the establishment of essential social services. We believe we
would also provide a positive influence there by respecting the rights of
individuals and by conducting our operations under the same high ethical
standards that we employ throughout the world.
If we were to leave Myanmar, prior experience indicates that other
international petroleum companies, including quite possibly our current
partners, would simply assume our role. And there is no guarantee that these
companies would represent as positive a force for economic and social change or
uphold the same high ethical standards in business that Texaco traditionally
practices. We believe that constructive engagement, which is advocated by the
Association of Southeast Asian Nations and nearly all its Western partners, will
encourage Myanmar to further open its economy and establish links with regional
and international economies. We also believe a number of positive and responsive
steps have been taken in the country as a result of its opening itself to
international commercial activity.
In the final analysis, we have no disagreement with the general objectives
of the proponents. We do, however, have a different outlook on how to effect
change in what is reported to be happening in some areas. We believe U.S.
companies such as Texaco can support the people of Myanmar by staying there and
working with them to build their economy and, over time, their society.
Therefore, the Board of Directors recommends a vote AGAINST this proposal.
Item 5-Stockholder Proposal Relating to a Shareholder's Advisory Committee
RESOLVED, that the Company shall be requested to establish a Shareholder's
Advisory Committee. The Committee will provide non-binding recommendations to
the Board of Directors pertaining to Shareholders' interests on policy matters
relevant to the Company and its business, such as major acquisitions,
restructurings, executive compensation, ethical issues, mergers and other
significant matters on which the Board is to consult with the Committee. The
Board shall insure the effective operation of this Committee and will give
consideration to its recommendations. This resolution shall in no way limit or
otherwise restrict the ability of the Board to take any action it deems in the
Company's best interest.
Members of the Committee shall serve without compensation, except for the
reimbursement of reasonable expenses. The Committee will have a minimum of
fifteen (15) members and the Board shall develop procedures for the selection of
members willing to serve, provided that the following apply:
1. Members will be the beneficial owner of at least 500 shares of the
Company's voting stock for the entire period of membership.
2. At least
seven (7) members shall be selected from the 1,000 largest
16
beneficial owners of the Company's voting shares.
3. Members will have no present affiliation with the Company, other than as
a Shareholder.
4. The term of each member shall be for two (2) years and in no instance can
a member serve more than two (2) consecutive terms.
Supporting Statement
Although it may be argued that procedures are in place to communicate with
Shareholders, many view management's periodic overviews as insufficient. The
proposed committees personnel composition has the potential to make a
significant contribution and will be neither costly to maintain or bureaucratic.
As an advisory group, the Committee by definition cannot impede the
decision-making process and it's quality will be such that confidentiality will
be maintained. The Committee would also assist in assuring that ethical
standards are enforced and applied to all employees, regardless of position, in
a uniform and fair manner.
The formation of the Committee will act as a valuable resource and will
benefit the company by strengthening confidence between Shareholders and Board
representatives.
The Board of Directors recommends a vote AGAINST this proposal for the following
reasons:
As more fully described on pages 2 through 5 of this Proxy Statement,
Texaco's Board, as a whole and through its Committees, already performs the
functions described in the proposal. Among its many functions, the Board reviews
and approves the company's strategies and plans; it oversees the company's
financial and competitive positions; it reviews operations and activities that
pose risk to the company; and it reviews the company's adherence to its vision
and values.
The Board's legal and fiduciary obligations include gathering all the
information it deems necessary, from whatever sources, including the officers
and managers of the company, outside experts, and others in order to make
decisions that are in the best interest of the company and its stockholders.
Although this proposal is couched in language implying it is "advisory" and
cannot impede the Board's decision making or restrict the Board's ability to act
in the stockholders' best interest, it provides that on stated issues the Board
"is to consult with the committee" and "give consideration to its
recommendations." Thus the proposal would make mandatory that before taking
action the Board call together this committee, wait while the committee gathers
its consultants or advisors, and not act before it has had the opportunity to
consider the committee's recommendations.
Accordingly, the proposal would impair the company's ability to quickly
take advantage of business opportunities. The requirement that the Board consult
with the committee on an open-ended list of matters, along with the logistical
complexity of consulting with a 15-member body, would certainly slow the Board's
ability to act, thus impeding its ability to manage the business and affairs of
the company for the benefit of all stockholders. For example, the delay inherent
in noticing and convening the Advisory Committee, and in waiting for its advice,
may be fatal to a proposed transaction, such as an acquisition or new business
opportunity. Furthermore, the other party to the transaction may, for legitimate
business reasons, object to confidential information involving the transaction
being spread beyond directors and officers of the corporation. Nevertheless, if
the Proposal were in place, the hands of the
17
directors would be tied; they would be required to seek committee input, even if
doing so would interfere with an action the Board considered to be in the best
interest of the company.
Nor would the addition of this committee be without cost. The proposal
requires the company to pay the committee members' expenses, including personal
travel, out of the corporate treasury and to pay for the committee to obtain
separate expert advice from lawyers, investment bankers, compensation
consultants and others, even if the board has already paid for such advice. This
doubling up of expenses will serve no function.
The company's dedication to maintaining open channels for the exchange of
views with all stockholders is a hallmark of the company. The proposal would
effect a fundamental change in that communication process - one that could lead
to communication with a more limited group of stockholders - and would unfairly
favor the 7% of the company's stockholders owning 500 or more shares over the
remaining 93% of its stockholders who would be denied access to participate on
the committee. Large stockholders should not be treated preferentially over
small stockholders.
The Board believes that the creation of a shareholder's committee would
provide no benefit to the company or to its stockholders. Instead, the committee
would only add an unnecessary, time consuming and expensive layer of
bureaucracy.
Therefore, the Board of Directors recommends a vote AGAINST this proposal.
18
EXECUTIVE COMPENSATION
Compensation Committee Report
The Compensation Committee of the Board of Directors is composed entirely
of independent outside directors. The Committee is responsible for establishing
and administering the compensation policies applicable to the company's officers
and senior personnel.
In 1988 the Committee commissioned an independent outside consulting firm
to undertake a comprehensive review of Texaco's total executive compensation
program. Management had advised the Committee of its desire to have the
compensation package more directly tied to corporate performance, including
earnings, return on stockholders' equity, return on capital employed and total
stockholder return. This compensation review, and the compensation program which
resulted from it, were designed to produce a performance- oriented result and
have, in fact, done so.
As part of the compensation program, each year the company and the
Committee test Texaco's performance since its restructuring (one of the
earliest in industry) against the results of its competitors. That
comparison is reflected in the graphs on page 26.
The company's management pay structure and award opportunities are
targeted to be competitive in the mid-range with a mixed group of twenty oil and
non-oil companies (the "Comparable Companies"). The Comparable Companies were
selected based on size, complexity and operational challenge in relation to
Texaco. All of the Comparable Companies, except for the U.S. subsidiary of one
foreign based oil company, are included in the S&P 500 Index, and four of these
companies are also included in the S&P 500 Integrated International Oil Index,
both of which are used in the comparison graphs on page 26.
The compensation program is composed of three elements: salary at a
competitive level to attract and retain the highest caliber of employees;
performance bonus; and long- term stock-based incentives. The bonus is
performance-based, and the long-term awards are tied to stock price performance
and total stockholder return. This mix of compensation elements places more of
total compensation at risk and emphasizes performance. Both the bonus and stock
elements of the plan were presented to and approved by stockholders in 1989, and
the stock-based incentives were approved by the stockholders again in 1993.
As a person's level of responsibility in the company increases, a greater
portion of potential total compensation opportunity is shifted from salary to
performance incentives and to greater reliance on the value of the company's
Common Stock through stock-based awards. This increasingly aligns the long-term
interests of these managers with the interests of stockholders. The total of
salary and bonus is intended to provide cash compensation which is to be
competitive in a mid-range when performance meets goals.
The overall salary range structure including midpoints and progression
between grade levels is maintained at a mid-range competitive level to attract
and retain the highest caliber of employees. Individual salary rates are based
on the salary range for the position as well as the length of service in grade
and the quality of performance in that position.
The performance-based bonus program is funded only to the extent earnings
generate sufficient funds to establish an Incentive Bonus Reserve. The annual
reserve is an
19
amount equal to not more than 1% of the consolidated net income of the company
up to a 6% return on the company's equity, plus 3% of the consolidated net
income of the company in excess of a 6% return on the company's equity. The
unawarded portion of the calculated reserve may be used in future years at the
discretion of the Committee.
Competitive target bonus opportunities are established for each position
grade level. The level of each plan participant's bonus is based on achievement
for that year of corporate and/or divisional objectives established each year by
the Committee which the Committee believes underpin stockholder value and which
support the strategic goals of the company. The objectives for corporate
officers, including the five individuals listed in the compensation table on
page 23, include: change in year-to-year earnings and return on capital employed
versus eight companies in the integrated oil industry which are also included in
the Comparable Companies; performance versus the annual plan of operating and
financial objectives approved each year by the Board of Directors; and
performance versus the prior year's results. There is also a subjective element
in the bonus formula under which participants are rated with respect to
initiative, managerial ability, overall contribution to corporate and/or unit
performance, fostering the company's "Vision and Values" and compliance with the
Corporate Conduct Guidelines. While performance against financial objectives is
a major determinant of incentive-based compensation, the successful Texaco
manager must perform effectively in many areas which are not measured
specifically by financial results. Performance is also assessed against
standards of business conduct reflecting social values and the expectations of
the company's key constituencies including its employees and stockholders, the
consumers of its products, suppliers and customers, the communities in which it
operates and the countries where it does business. Among the corporate values
and elements of the Corporate Conduct Guidelines considered are those which
promote equal employment opportunity and diversity, safeguarding of the
environment and protection of the health and safety of the company's employees.
Adherence to these high standards is understood to have direct effect on the
company's profitability, and the performance of the company's managers is
appraised in this regard.
The long-term incentive program consists of stock options and performance
restricted shares (which vest based on meeting goals targeted to the performance
of the company's competitors), emphasizes total return to stockholders,
motivates stock ownership by the management by requiring that vested benefits be
received in stock and not cash, and encourages retention and continuity of
management. While the company has no obligatory levels for equity holdings by
management personnel, long-term incentive awards are designed and administered
to encourage share ownership and have done so. The Committee reviews the
ownership by officers each year. In general, the officers have stock holdings in
excess of typical target or mandatory levels where they have been established by
some companies in industry. The five officers named in the table on page 23 had
on average holdings in Texaco stock of 8 1/2 times salary as of December 31,
1995. The values of the packages of long-term incentive award targets comprised
of performance shares and options at each grade level are established by the
Committee and are intended to be fully competitive with the programs offered by
the Comparable Companies. Generally, the number of options and performance
shares awarded to any participant are determined by a competitive position
grading and by the level of performance. There is no relationship to awards in
prior years.
20
The compensation of the Chief Executive Officer and any other
officer/director is established by the Committee and reviewed with and approved
by the Committee of Non-Management Directors which consists of all the outside
directors and is chaired by Mr. Murphy. The compensation for Mr. DeCrane for
1995 was determined by the Compensation Committee in the same general manner as
for other members of the management team. Mr. DeCrane's annual salary rate was
increased in 1995. The interval of time between increases was consistent with
the general practice applicable to all non-represented employees and the gross
annualized amount was within the established guidelines for merit compensation
actions throughout the company. Reference was also made to the salary rate of
chief executive officers of the Comparable Companies and his salary was at
approximately the mid-range of that group. Mr. DeCrane's bonus for 1995 was
determined by the performance of the company with respect to the established
Incentive Bonus Plan objectives as applied to the target level for his position
grade. His bonus and those for the other named executives were less than 58% of
the maximum possible had all corporate stretch objectives been exceeded, which
they were not, and were some 45% above the prior year. Long-term awards granted
were based on the standard established by the Compensation Committee for all
members of the management team, as noted above. In establishing the overall
compensation for Mr. DeCrane, the Committee compared Texaco's performance with
the Comparable Companies and with the specific objectives set and considering a
range of performance factors including normalized earnings, return on capital
employed, return on average stockholders' equity, total return to stockholders,
net income per share, and worldwide reserve replacement without assigning any
particular weight to any of these factors. His total compensation reflected his
success in: meeting objectives, formulating corporate strategies, and
implementing the company's Plan for Growth and the disposition of non-core
assets.
In 1992, the Committee commissioned a second independent study of the
company's executive compensation programs by a nationally-known compensation
consulting firm different from the one which helped design the program in 1988.
In connection with this further review the consultant was asked to answer four
specific questions:
1. Is the overall reward program reasonable, and are the individual pay
elements that make up the total program also reasonable?
2. Are the risk/reward relationships in all of the variable pay elements
appropriate and fair?
3. Are variable pay elements sufficiently responsive to changes in
performance, both on the upside and downside?
4. Is the pay package sufficiently sensitive to stockholder interests and
supportive of Texaco's strategic plan?
The consultant answered: "Our examination of all the executive pay data
covering several years for Texaco and its group of peer companies leads us to
conclude that with respect to each of the specific questions posed by the
Committee, Texaco's overall compensation program is designed and administered to
achieve its objectives." The Committee continues to administer the compensation
programs to maintain these standards. To this end it receives from outside
independent consultants, at least annually, information on compensation and
other data at competitor and comparable sized companies.
On December 20, 1995, the Internal Revenue Service issued final
regulations
21
pursuant to Internal Revenue Code section 162(m), which was added to the Code by
the Omnibus Budget Reconciliation Act of 1993. Section 162(m) limits the amount
of compensation a corporation may deduct as a business expense. That limit,
which applies to the Chief Executive Officer and the four next most highly
compensated executives, as listed in the table on page 23, is $1 million per
individual per year, subject to certain specified exceptions. One of these
exceptions is compensation which is "performance-based." Texaco's incentive
bonus and stock incentive plans are deemed to be performance-based plans. All
compensation paid in 1995 is fully deductible.
Conclusion
The Committee believes that the quality and motivation of all of Texaco's
employees, including its managers, make a significant difference in the
long-term performance of the company. The Committee also believes that
compensation programs which reward performance that meets or exceeds high
standards also benefit the stockholders, so long as there is an appropriate
downside risk element to compensation when performance falls short of such
standards and that the Committee has appropriate flexibility in administering
the program to achieve the objectives of the program. The Committee is of the
opinion that Texaco's management compensation programs meet these requirements,
have contributed to the company's success and are deserving of stockholder
support.
/s/ Robert A. Beck /s/ Willard C.Butcher
Robert A. Beck Willard C. Butcher
Chairman
/s/ Edmund M. Carpenter /s/ Charles H. Price, II
Edmund M. Carpenter Charles H. Price, II
/s/ Thomas A. Vanderslice
Thomas A. Vanderslice
22
The following compensation information is furnished for service performed
by the company's Chief Executive Officer and its four other most highly
compensated Executive Officers for the three years indicated.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
--------------------------------------------- ----------------------
Awards
-------------------------
Securities
Other Restricted Underlying All
Name and Principal Annual Stock Options/ Other
Position Year Salary($) Bonus($) Compensation($) Awards($)(1) SARs(#) Compensation($)(2)
- -------- ---- --------- -------- --------------- ------------ ------- ------------------
A.C. DeCrane, Jr. 1995 977,500 862,764 10,063 777,514 277,615 61,500
Chairman of 1994 927,500 595,135 9,818 769,107 149,859 57,834
the Board/CEO 1993 875,000 807,008 12,127 762,976 75,099 55,317
P.I. Bijur 1995 405,333 263,038 3,518 200,330 65,576 27,200
Vice Chairman 1994 382,500 140,879 3,351 154,063 21,481 25,134
1993 355,000 201,984 4,010 159,219 41,353 25,888
A.J. Krowe 1995 672,000 566,403 4,166 453,710 144,021 171,091
Vice Chairman 1994 633,000 390,705 8,865 534,964 71,068 168,751
1993 588,750 528,815 4,031 534,657 86,609 166,096
C.R. Black 1995 390,000 204,232 12,623 162,267 52,163 28,408
Senior Vice 1994 373,333 140,879 12,294 154,063 26,792 35,150
President 1993 355,000 192,844 44,411 159,219 29,913 74,478
J.L. Dunlap 1995 425,000 228,699 51,876 200,330 74,914 206,795
Senior Vice 1994 408,333 173,390 27,889 199,357 37,093 61,665
President 1993 383,333 216,966 2,055 206,029 36,038 25,817
(1) Messrs. DeCrane, Bijur, Krowe, Black and Dunlap had restricted
stockholdings of 94,556; 18,186; 54,467; 19,884; and 15,386 shares,
respectively, as of December 31, 1995. The shares had a market value of
$7,422,646; $1,427,601; $4,275,660; $1,560,894; and $1,207,801,
respectively, at December 31, 1995, based on a value of $78.50 per share.
These share numbers and values include the awards since the last proxy
statement which are reported in the "Restricted Stock Awards" column above.
Dividends are paid on the restricted stock at the same time and rate as
dividends paid to holders of unrestricted stock.
(2) Matching contributions to the qualified and nonqualified Employees Thrift
Plans and moving expenses associated with job reassignment are provided on
the same basis for all employees. Mr. Krowe became entitled to Texaco
retirement benefits commencing in July 1992, the month after he attained
age 60, for the period October 1988 through June 1992, which are no less
than he would have been entitled to under his previous employer's
retirement plan, reduced by the amount actually received from that previous
employer's plan. Included in the amounts shown for Mr. Krowe is $130,771
received pursuant to the aforementioned arrangement in 1995.
23
OPTION GRANTS IN 1995
Individual Grants of Options and Restored Options
- ----------------------------------------------------------------------------------------------------
Number
of
Securities
Underlying % of Total Exercise or Grant Date
Options Options Base Expiration Present
Name Date Granted(#) Granted Price($/Sh.) Date Value $**
- ---- ---- ---------- ------- ------------ ---- ---------
A.C. DeCrane, Jr. 02/24/95 23,960 0.83% 63.8750 02/24/2005 171,554
04/26/95 15,490* 0.54% 68.5625 06/28/2001 119,893
04/26/95 27,821* 0.97% 68.5625 06/25/2003 215,335
06/23/95 82,075 2.85% 66.3125 06/23/2005 541,695
07/28/95 28,338* 0.98% 67.3125 06/25/2003 200,066
07/28/95 27,420* 0.95% 67.3125 06/24/2004 193,585
07/28/95 1,146* 0.04% 67.3125 07/22/2004 8,091
11/10/95 14,860* 0.52% 69.2500 06/22/2000 104,763
11/10/95 18,620* 0.65% 69.2500 06/26/2002 131,271
11/22/95 11,634* 0.40% 71.9375 05/09/1999 86,906
11/22/95 14,526* 0.50% 71.9375 06/22/2000 108,509
12/26/95 11,725* 0.41% 77.8750 05/09/1999 96,849
P.I. Bijur 02/24/95 5,000 0.17% 63.8750 02/24/2005 35,800
03/15/95 5,874* 0.20% 65.3750 06/26/2002 42,880
04/26/95 2,685* 0.09% 68.5625 01/02/2000 20,782
04/26/95 447* 0.02% 68.5625 06/22/2000 3,460
04/26/95 6,017* 0.21% 68.5625 06/25/2003 46,572
06/23/95 21,147 0.73% 66.3125 06/23/2005 139,570
06/30/95 5,792* 0.20% 66.5000 06/24/2004 39,212
10/26/95 5,811* 0.20% 68.5000 06/25/2003 40,619
12/15/95 6,105* 0.21% 79.9375 05/09/1999 53,052
12/15/95 3,004* 0.10% 79.9375 06/22/2000 26,105
12/15/95 673* 0.02% 79.9375 06/28/2001 5,848
12/26/95 3,021* 0.10% 77.8750 06/22/2000 24,953
A.J. Krowe 02/24/95 16,790 0.58% 63.8750 02/24/2005 120,216
04/26/95 4,727* 0.16% 68.5625 06/22/2000 36,587
04/26/95 19,496* 0.68% 68.5625 06/25/2003 150,899
06/23/95 47,894 1.66% 66.3125 06/23/2005 316,100
07/28/95 19,215* 0.67% 67.3125 06/24/2004 135,658
10/26/95 19,513* 0.68% 68.5000 06/25/2003 136,396
10/26/95 644* 0.02% 68.5000 07/22/2004 4,502
11/10/95 8,900* 0.31% 69.2500 06/28/2001 62,745
12/26/95 2,919* 0.10% 77.8750 05/09/1999 24,111
12/26/95 3,923* 0.14% 77.8750 06/22/2000 32,404
C.R. Black 02/24/95 5,000 0.17% 63.8750 02/24/2005 35,800
04/26/95 3,967* 0.14% 68.5625 06/28/2001 30,705
04/26/95 6,017* 0.21% 68.5625 06/25/2003 46,572
06/23/95 17,129 0.59% 66.3125 06/23/2005 113,051
07/14/95 5,820* 0.20% 66.1875 06/24/2004 38,703
10/26/95 876* 0.03% 68.5000 06/22/2000 6,123
10/26/95 3,475* 0.12% 68.5000 06/28/2001 24,290
10/26/95 5,811* 0.20% 68.5000 06/25/2003 40,619
11/03/95 1,273* 0.04% 68.6250 06/22/2000 8,771
11/03/95 348* 0.01% 68.6250 06/28/2001 2,398
12/26/95 2,159* 0.07% 77.8750 06/22/2000 17,833
12/26/95 288* 0.01% 77.8750 06/26/2002 2,379
J.L. Dunlap 02/24/95 6,470 0.22% 63.8750 02/24/2005 46,325
04/03/95 6,253* 0.22% 65.8750 06/28/2001 46,397
04/03/95 7,948* 0.28% 65.8750 06/25/2003 58,974
06/23/95 21,147 0.73% 66.3125 06/23/2005 139,570
07/28/95 7,734* 0.27% 67.3125 06/24/2004 54,602
10/26/95 7,730* 0.27% 68.5000 06/25/2003 54,033
11/22/95 8,423* 0.29% 71.9375 05/09/1999 62,920
11/22/95 5,970* 0.21% 71.9375 06/28/2001 44,596
12/26/95 755* 0.03% 77.8750 05/09/1999 6,236
12/26/95 2,484* 0.09% 77.8750 06/26/2002 20,518
* Restored Options. Restoration of options originally granted and
reported between 1989 and 1994. All options include a restoration feature,
by which options are granted to replace shares that are exchanged by
24
participants as full or partial payment to the company of the purchase
price of shares being acquired through the exercise of a stock option or
withheld by the company in satisfaction of tax withholding obligations.
Since restored options are granted at an exercise price which is equal to
the market price of the company's Common Stock on the day of grant, they
are issued at an exercise price which is at a higher price than the
exercise price of the original grant. Options vest 50% after one year and
are fully exercisable after two years. Restored options are fully
exercisable after six months and retain the expiration date of the original
grant.
** Valuation. All options are granted at an exercise price equal to
the market value of the company's Common Stock on the date of grant.
Therefore, if there is no appreciation in that market value, no value will
be realizable. In accordance with Securities and Exchange Commission rules,
the Black-Scholes option pricing model was chosen to estimate the grant
date present value of the options set forth in this table. The company's
use of this model should not be construed as an endorsement of its accuracy
at valuing options. All stock option valuation models, including the
Black-Scholes model, require a prediction about the future movement of the
stock price. The following assumptions were made for purposes of
calculating the Grant Date Present Value: for all grants the option term is
assumed to be three years, volatility at 15%, dividend of $3.20 per share
and interest rates of 5.33% to 6.97%. The real value of the options in this
table depends solely upon the actual performance of the company's stock
during the applicable period.
AGGREGATED OPTION EXERCISES IN 1995 AND YEAR-END
OPTION VALUES
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired Options at Year-End(#)* at Year-End($)**
on Value ----------------------------- ---------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ----------- -------------
A.C. DeCrane, Jr. 13,892 976,445 114,738 265,479 1,266,940 3,000,481
P.I. Bijur 4,822 359,719 40,192 51,011 443,333 496,321
A.J. Krowe 7,035 493,116 88,825 141,485 1,009,741 1,697,450
C.R. Black 2,541 178,018 40,293 48,429 471,441 578,169
J.L. Dunlap 3,824 270,559 51,899 68,800 618,438 749,124
* Includes options reported in the chart entitled "Option Grants in 1995".
** Based on year-end price of $78.50.
Performance Graphs
The two graphs on the following page compare the cumulative total
stockholder return on Texaco's Common Stock with the cumulative total return of
the Standard & Poor's 500 Stock Index and the Standard & Poor's Integrated
International Oil Index during five-year and eight-year periods. The measurement
period in the first graph begins on December 31, 1990, and the second graph
begins three years earlier on December 31, 1987. The second graph reflects the
market performance of the company's stock over the full period from the
commencement of the extensive restructuring initiated by the company in 1988.
25
Five-Year Comparison
Cumulative Return to Shareholders
(Price Appreciation and the Reinvestment of Dividends)
Texaco vs. S&P Indices
DOLLARS (END-OF-PERIOD)
Total Return
Annual Growth
1990 1991 1992 1993 1994 1995 Rate
---- ---- ---- ---- ---- ---- ----
Texaco $100.00 $106.57 $109.55 $124.69 $121.50 $166.88 10.8%
S&P 500 $100.00 $130.34 $140.25 $154.32 $156.42 $214.99 16.5%
S&P 500 Oils $100.00 $115.27 $118.17 $141.72 $150.52 $202.02 15.1%
Eight-Year Comparison
Cumulative Return to Shareholders
(Price Appreciation and the Reinvestment of Dividends)
Texaco vs. S&P Indices
DOLLARS (END-OF-PERIOD)
Total Return
Annual Growth
1987 1988 1989 1990 1991 1992 1993 1994 1995 Rate
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Texaco $100.00 $143.84 $204.05 $220.68 $235.17 $241.75 $275.18 $268.12 $368.26 17.7%
S&P 500 $100.00 $116.50 $153.30 $148.52 $193.58 $208.31 $229.20 $232.31 $319.30 15.6%
S&P 500 Oils $100.00 $119.41 $160.99 $172.18 $198.47 $203.47 $244.01 $259.18 $347.84 16.9%
26
Retirement Plan
Over 13,300 employees of the company and its subsidiaries, including the
22 elected officers, are eligible to participate in the Retirement Plan. The
plan is a qualified plan under the Internal Revenue Code and provides benefits
funded by company contributions. In addition, participants have the option of
making contributions to the plan and receiving greater pension benefits.
Contributions are paid to a Master Trustee and to insurance companies for
investment.
For purposes of calculating pension benefits for the named executive
officers, the plan recognizes salary and bonus only and does not take into
account other forms of compensation. For the named executive officers, salary
and bonus for the last three years are shown in the salary and bonus columns of
the Summary Compensation Table. Effective January 1, 1995, IRS regulations
provide that covered remuneration cannot exceed $150,000 per year (as indexed
for inflation) for purposes of this plan. The amount of an employee's pension is
the greater of a benefit based upon a final pay formula (applicable in most
cases), a career average formula, or a minimum retirement benefit.
PENSION PLAN TABLE
YEARS OF BENEFIT SERVICE
COVERED REMUNERATION* 15 20 25 30 35 40 45
- -------------------- -------- -------- -------- --------- -------- -------- ---------
$ 100,000 $ 22,500 $ 30,000 $ 37,250 $ 44,250 $ 51,250 $ 58,250 $ 65,250
200,000 45,000 60,000 74,500 88,500 102,500 116,500 130,500
400,000 90,000 120,000 149,000 177,000 205,000 233,000 261,000
600,000 135,000 180,000 223,500 265,500 307,500 349,500 391,500
800,000 180,000 240,000 298,000 354,000 410,000 466,000 522,000
1,000,000 225,000 300,000 372,500 442,500 512,500 582,500 652,500
1,200,000 270,000 360,000 447,000 531,000 615,000 699,000 783,000
1,400,000 315,000 420,000 521,500 619,500 717,500 815,500 913,500
1,600,000 360,000 480,000 596,000 708,000 820,000 932,000 1,044,000
1,800,000 405,000 540,000 670,500 796,500 922,500 1,048,500 1,174,500
2,000,000 450,000 600,000 745,000 885,000 1,025,000 1,165,000 1,305,000
* "Covered Remuneration" means the highest three-year average salary
and bonus, if any, during the last ten years of employment. The years of
benefit service for the following individuals are: Mr. DeCrane, 37; Mr.
Bijur, 29; Mr. Krowe, 7; Mr. Black, 38; and Mr. Dunlap, 33. With respect to
the plan, annual pension benefits are based on the non-contributory final
pay formula (up to 1.5% of final average pay times benefit service) and
assume the participant retires at age 65 and has been a non-contributory
member of the plan throughout the period of service. These amounts,
however, do not reflect a reduction for Social Security benefits pursuant
to the provisions of the plan. They do include those additional sums, if
any, payable under a Supplemental Pension Plan to compensate those
employees who have earned annual pension benefits payable under the plan
but which are limited by Section 415 of the Internal Revenue Code.
27
Stockholder Proposals
Stockholders may present proposals to be considered for inclusion in the
1997 Proxy Statement, provided they are received at the company's principal
executive office no later than November 29, 1996, and are in compliance with
applicable laws and Securities and Exchange Commission regulations. Any such
proposals should be addressed to: Secretary, Texaco Inc., 2000 Westchester
Avenue, White Plains, New York 10650.
Other Business
The management is not aware of any matters, other than those indicated
above, that will be presented for action at the meeting. If other proper matters
are introduced, the persons named in the accompanying proxy will vote the shares
they represent in accordance with their judgment.
By order of the Board of Directors.
/s/ Carl B. Davidson
CARL B. DAVIDSON
Vice President and Secretary.
March 28, 1996
28
[TEXACO]
[LOGO]
Dear Texaco Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
to be held in the Imperial Ballroom of the Hyatt Regency Houston at 1200
Louisiana Street in Houston, Texas, on Tuesday, May 14, 1996, at 10:00 a.m. If
you plan to attend, please carry the attached admission ticket with you to the
meeting.
Please keep in mind that your vote is important. Whether or not you are
able to attend the meeting in person, PLEASE MARK THE ATTACHED PROXY TO INDICATE
YOUR VOTING PREFERENCES AND SIGN, DETACH AND RETURN THE PROXY CARD IN THE
ACCOMPANYING POSTAGE PAID ENVELOPE.
I also welcome any comments or questions you have concerning the
Company's activities. For your convenience in providing such comments, space is
provided on the reverse side of this card, which you can enclose and return with
your signed proxy. In view of the large number of comments and questions we
generally receive, IT WILL NOT BE POSSIBLE TO RESPOND TO THEM INDIVIDUALLY.
However, I assure you that each one will be read and that subjects of general
interest will be covered at the meeting or in other information from the
Company.
/s/ A.C. DeCrane, Jr.
A.C. DeCrane, Jr.
Chairman of the Board &
Chief Executive Officer
ADMISSION TICKET
to
Texaco's 1996 Annual Meeting of Stockholders
This is your admission ticket to gain access to Texaco's 1996 Annual
Meeting of Stockholders to be held in the Imperial Ballroom of the Hyatt
Regency Houston at 1200 Louisiana Street in Houston, Texas, on Tuesday,
May 14, 1996, at 10:00 a.m. Please present this Admission Ticket to one of
the registration stations where YOU WILL BE ASKED TO DISPLAY SOME FORM OF
PERSONAL IDENTIFICATION.
This ticket is not transferable
(DETACH AND RETURN IN THE ENCLOSED ENVELOPE)
----------------------------------------------------------------------------
Please specify your choices by clearly marking the appropriate boxes.
Unless specified, this proxy will be voted FOR items 1 and 2, AGAINST
items 3, 4 and 5 and will be voted in the discretion of the proxies on
such other matters as may properly come before the meeting or any
adjournment thereof.
----------------------------------------------------------------------------
1. Election of Directors for the terms indicated in the
Proxy Statement:
Nominees are: P.I. Bijur, M.C. Hawley, A.J. Krowe,
P DIRECTORS R.B. Smith, W.C. Steere, Jr., W. Wrigley
RECOMMEND
R A VOTE FOR [ ] FOR all listed nominees
ITEMS 1 & 2 [ ] WITHHOLD vote from all listed nominees
O [ ] WITHHOLD vote only from _________
X 2. Approval of Arthur Andersen LLP as Auditors for the
year 1996
Y FOR AGAINST ABSTAIN
[ ] [ ] [ ]
----------------------------------------------------------------------------
DIRECTORS
RECOMMEND 3. Stockholder proposal relating to corporate conduct
A VOTE guidelines
AGAINST FOR AGAINST ABSTAIN
ITEMS 3, [ ] [ ] [ ]
4 & 5
4. Stockholder proposal relating to Burma (Myanmar)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Stockholder proposal relating to an advisory committee
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
----------------------------------------------------------------------------
ACCOUNT NO. PROXY NO.
----------- ---------
CUSIP 881694 10 3
SEE REVERSE SIDE
PLEASE SIGN,
DATE, AND RETURN ________________________________ Date _____________, 1996
(Sign exactly as name appears, indicating
position or representative capacity, where applicable)
29
For your comments...
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
As part of the Company's continuing efforts to eliminate unnecessary expenses,
we are attempting to stop duplicate mailing of Annual Reports to the same family
residence. If more than one member of your household is receiving copies of the
Annual Report, please help us economize by completing the following
authorization:
[ ] Discontinue mailing the Annual Report to my account because I have a copy
available to me from another source.
Name: _________________________________________________________________________
Signature: _____________________________________________________________________
Account Number (shown on face of proxy card):
_________________________________________________________________________
(DETACH AND RETURN WITH YOUR PROXY CARD IN THE ENCLOSED ENVELOPE)
IMPORTANT NOTICE
- ----------------
Please note that a large number of stockholders are expected to attend the
meeting. In fairness to all stockholders wishing to attend, stockholders will be
admitted to the meeting room on a first-come, first-served basis. Accordingly,
you are strongly encouraged to arrive early. Late arrivals to the meeting may
be seated in another room equipped with video and audio facilities. Limited
parking is available at the hotel for a nominal fee.
(DETACH AND RETURN IN THE ENCLOSED ENVELOPE)
[TEXACO]
[LOGO] THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TEXACO INC.
2000 Westchester Ave.
White Plains, NY 10650
R.A. Beck, W.C. Butcher, E.M. Carpenter, F.G. Jenifer, T.A. Vanderslice,
and each of them, as proxies, with full power of substitution, are hereby
authorized to represent and to vote, as designated on the reverse side, all
Common Stock of Texaco Inc. held of record by the undersigned on March 15,
1996, at the Annual Meeting of Stockholders to be held in the Imperial Ballroom
of the Hyatt Regency Houston at 1200 Louisiana Street in Houston, Texas, on
Tuesday May 14, 1996, at 10:00 a.m.
If you plan to attend the Annual Meeting, please check the appropriate
box below. If you and a family member are attending, please provide Texaco with
the family member's name.
[ ] Stockholder will attend the Annual Meeting
[ ] Stockholder and a family member will attend the Annual Meeting
_______________________________________________
Family member's name (Please Print)
30
