Exhibit 10.4(E)(4)
UNOCAL
CORPORATION
Long-Term Incentive Plan of
1998
Performance Share
Award
AGREEMENT
AGREEMENT effective as of January
1, 2003 , between UNOCAL CORPORATION (hereinafter called the
“Company”) and Name (hereinafter called the
“Participant”).
1. Award Grant. The Company
hereby awards to Participant Shares 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 1998.
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 how
the Company’s Return to Stockholders compares to that of a
group of companies (the “Peer Group Companies”) during
the four-year Award Period which ends on December 31, 2006 .
“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:
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Percentile Rank
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Payout Percentage
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100%
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200%
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95%
90%
85%
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188%
175%
163%
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80%
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150%
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75%
70%
65%
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138%
125%
113%
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60%
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100%
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55%
50%
45%
40%
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90%
80%
70%
60%
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35%
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50%
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30%
25%
15%
10%
5%
0%
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0%
0%
0%
0%
0%
0%
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In the case of a percentile ranking falling
between those indicated, payout percentage shall be determined
using straight-line interpolation.
Under the foregoing formula, Participant will be
entitled to payment of 100% of the Performance Share Units awarded
if the Company’s Return to Stockholders is at the 60th
percentile of the Return to Stockholders of the Peer Group
Companies. 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.
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 December 31,
2006 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 Event (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
Event. 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 Event”
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 directors (the “outstanding
Company Voting Securities”); provided, however, that for
purposes of this subsection (a), the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly
from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this Section 3;
or
(b) Individuals who, as of the date
hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the
Board; provided however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the
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Company’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a
result of an actual or threatened
