Texaco Task Force On Equality and Fairness Issues Second Annual Report to U.S. District Court; Positive Achievements Noted, Despite Difficult Business Conditions.

WASHINGTON--(BUSINESS WIRE)--Aug. 2, 1999--

The Texaco Equality and Fairness Task Force ("Task Force"), in its second annual report, today commended Texaco for sustaining and expanding its commitment to equal opportunity and diversity initiatives over the past year despite deteriorating business conditions in the petroleum industry. The report, which will be filed today with Judge Charles L. Brieant of the U.S. District Court in White Plains, N.Y., characterizes Texaco's performance in the area of human resources and diversity as "quite favorable." The report praises the company for showing that increased diversity and improved operational effectiveness as a business are "fully compatible goals."

The independent Task Force was created in June 1997 as a component of the Settlement Agreement in the Roberts, et al. v. Texaco Inc. employment discrimination lawsuit. The mission of the Task Force is to oversee Texaco's implementation of a comprehensive human resources program that ensures fairness and equal opportunity for all employees of Texaco.

In its report, the Task Force noted that the company experienced nearly double the anticipated workforce reduction in 1998 due to industry pressures caused by sustained low prices for crude oil. Despite these circumstances, Texaco increased the combined representation of women and minorities among its "Officials and Managers" to 24.2 percent -- just short of its 25 percent goal.

Thomas S. Williamson, Jr., Chairman of the Task Force and a partner in the Washington, D.C., law firm of Covington & Burling, stated, "Texaco's comprehensive approach demonstrates that the pursuit of ambitious equal opportunity and affirmative action goals is fully consistent with successfully meeting the challenges of a difficult business environment. In fact, Texaco's hiring and promoting strategy has increased competitiveness for the limited positions available, thereby enhancing opportunities for selecting the most talented candidates."

The Task Force also applauded Texaco's reform of its compensation monitoring program, under which U.S. employees' salaries are analyzed annually to identify and address inappropriate disparities. Industry peers and government regulators have recognized this effort as an innovative and effective method for assessing possible pay equity issues before complaints arise.

While progress in these and other programs was noted, both the Task Force and Texaco acknowledge that important challenges remain. Because many of the programs are still in the early stages of implementation, continued monitoring will be necessary to evaluate their ongoing effectiveness and make adjustments as needed. Additionally, the Task Force identified the need to continue to reinforce to all employees how fostering diversity and inclusiveness strengthens Texaco as a global business.

Other members of the Task Force include the Honorable John J. Gibbons, Dr. Jeffalyn Johnson, Allen J. Krowe, Professor Mari J. Matsuda and Luis G. Nogales. The Task Force is also charged with evaluating Texaco programs for employment selection, performance management, succession planning, management compensation, ombuds, mentoring, diversity training, job posting and the company's Affirmative Action Plans.

A copy of the complete Task Force Report can be found at: http://www.texaco.com/asp/frameit.asp?tn=au_3bt_nav.html&bn=au_3bb_nav .html&cn=/aboutus/where/docs/tf_report99.html

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SELECTED HIGHLIGHTS OF SECOND ANNUAL

REPORT OF TEXACO TASK FORCE

ON EQUALITY AND FAIRNESS

-- Texaco nearly achieved its goals for increasing representation of

minorities and women in the workforce despite unanticipated

reductions because of the decline in oil prices. (Employment

Selection and Performance Management - pp. 64-68)

-- Bonus compensation of Texaco's top executives is directly tied to

the company's performance in achieving diversity goals. (Measure

and Reward Diversity - pp. 25-30)

-- Texaco strengthens its proactive strategy for identifying and

correcting potential disparities in the salaries of similarly

qualified and experienced employees. (Employment Selection and

Performance Management - pp. 69-71)

-- Expanding recruitment to include colleges that produce

significant numbers of technically qualified women and minorities

has facilitated more diverse hiring. (Affirmative Action Plans -

pp.35-38)

-- Ombuds Program is being utilized extensively by employees while

administrative and legal complaints about discrimination and

retaliation have significantly declined. (Minimizing Fear of

Retaliation - pp. 56-60 and Ombuds Program - 61-63)