|
Exhibit 10.2
The Board of Directors of Unocal Corporation reserves the
right
to change the definition of "Change of Control" and
other provisions of this Agreement to comply with the
American Jobs Creation Act of 2004.
UNOCAL CORPORATION
LONG-TERM INCENTIVE PLAN OF 2004
PERFORMANCE SHARE AWARD AGREEMENT
AWARD AGREEMENT effective as of ____________, between UNOCAL
CORPORATION
(hereinafter called the "Company") and ______________
(hereinafter called the
"Participant").
1. Award Grant. The Company hereby awards to Participant
______________
Performance Share Units (each unit shall be deemed to be the
equivalent of one
share of Common Stock of the Company). Such Performance Share
Units will be
credited to the Performance Share account maintained for
Participant under the
Long-Term Incentive Plan of 2004.
2. Rights to Payment of Performance Share Units. It is
understood that the
amount of the foregoing award earned and paid will be
established by the
Management Development and Compensation Committee of the Board
of Directors of
the Company (the "Committee") based on the Company's percentile
ranking with
respect to a group of companies (the "Peer Group Companies")
during the
three-year Award Period which ends on ____________________. The
percentile
ranking will be the weighted average of the Company's percentile
ranking with
respect to the Peer Group Companies as to five measures,
weighted as indicated:
(a) Comparative Return to Shareholders (50%)
(b) Discretionary Cash Flow per Debt Adjusted Share (12.5%)
(c) Production Growth per Debt Adjusted Share (12.5%)
(d) Finding and Development Cost per BOE Added (12.5%)
(e) Production and G&A Cost per Unit Production (12.5%)
"Return to Stockholders" is the sum of cash dividends and share
price
appreciation expressed as a percentage of the beginning share
price. The actual
payment of the Performance Share Units awarded will be
determined in accordance
with the following:
<TABLE>
-----------------------------------------
-----------------------------
Percentile Rank Payout Percentage
-----------------------------------------
-----------------------------
<C> <C>
100% 200%
-----------------------------------------
-----------------------------
95% 190%
90% 180%
85% 170%
-----------------------------------------
-----------------------------
80% 160%
-----------------------------------------
-----------------------------
75% 150%
70% 140%
65% 130%
-----------------------------------------
-----------------------------
60% 120%
-----------------------------------------
-----------------------------
55% 110%
50% 100%
45% 83%
40% 67%
-----------------------------------------
-----------------------------
35% 50%
-----------------------------------------
-----------------------------
30% 0%
25% 0%
15% 0%
10% 0%
5% 0%
0% 0%
-----------------------------------------
-----------------------------
</TABLE>
-1-
<PAGE>
Under the foregoing formula, Participant will be entitled to
payment of 100% of
the Performance Share Units awarded if the Company's weighted
average ranking is
at the 50th percentile. However, in no event shall the
Participant receive in
excess of 200% of the Units awarded, and payment is further
subject to the
limitation contained in Section 3 below. Notwithstanding
anything to the
contrary stated above, the Committee may reduce the payment
based on other
factors at the discretion of the Committee unless a Change of
Control has
occurred.
The Committee has determined the Peer Group Companies to be used
for
purposes of the comparison of Return to Stockholders. During the
Award Period no
changes will be made by the Committee to the Peer Group
Companies, except as
required because of merger, dissolution or similar circumstance
with respect to
such companies.
3. Payment of Awards. Payments made hereunder shall be equal in
amount to the
Fair Market Value on the Valuation Date of the number of shares
of Common Stock
equivalent to the number of Performance Share Units earned and
payable to
Participant pursuant to paragraph 2 above, subject to a maximum
Fair Market
Value of not more than 400% of the Fair Market Value of such
Performance Share
Units at the time of granting the Performance Share Units.
Payments shall be
made on ________________ or as soon as practicable thereafter.
The Committee
will determine the form of payout, which will normally be
partially in cash and
partially in shares of the Company's Common Stock.
Upon the occurrence of a Change in Control (as such term is
defined below),
each Performance Share Unit will become payable to the
Participant (such
Performance Share Award to be paid by the Company), solely in
cash, as if the
Award Period ended as of the occurrence of such Change in
Control. The Committee
may estimate average shareholder returns or other performance
measures for any
such period for which reports are not yet available. However,
upon a Change of
Control, participant shall receive not less than the number of
Performance Share
Units awarded, subject to limits indicated in the above
paragraph. As used
herein, "Change in Control" means any of the following:
(a) The acquisition by any individual, entity or group (within
the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as
amended (the "Exchange Act")(a "Person") of beneficial ownership
(within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of
either (i) the then outstanding shares of common stock of the
Company (the
"Outstanding Company Common Stock") or (ii) the combined voting
power of the
then outstanding voting securities of the Company entitled to
vote generally in
the election of di
| 
