EXHIBIT 10.12
CHANGE IN CONTROL AGREEMENT
This change in control agreement (the "Agreement") is made effective as of
December 8, 1997 by and between Unocal Corporation, a Delaware corporation (the
"Company") and _____________________________________. ("Employee").
WITNESSETH
WHEREAS, if certain corporate transactions were proposed or pending, such
potential transactions could result in distractions to Employee's performance at
a critical period; and
WHEREAS, Employee and Company wish to enter into this agreement in order to
provide security to Employee as a means of maintaining performance under such
circumstances.
THEREFORE, in consideration of the mutual promises and agreements set forth
herein, the Company and Employee agree as follows:
1. TERM.
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1.1 The term of this Agreement (the "Term") shall commence on December 8,
1997 and shall be for two years, subject to earlier termination in accordance
with the provisions of Section 4 hereinbelow. Beginning on December 9, 1997 and
on each day thereafter, the Term shall automatically be extended for an
additional day unless the Company notifies Employee in writing that it does not
wish to further extend the Term.
2. POSITION AND TITLE.
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2.1 The Company on behalf of itself and its affiliates and subsidiaries
currently employs Employee as ___________________.
2.2 Employee shall devote substantially all of his efforts on a full time
basis to the business and affairs of the Company and shall not engage in any
business or perform any services in any capacity whatsoever adverse to the
interests of the Company.
2.3 Employee shall at all times faithfully, industriously, and to the best
of his ability, experience, and talents, perform all of the duties of his
position.
3. COMPENSATION.
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3.1 As of the date of this Agreement, Employee's annual base salary is
___________. Employee's base salary and performance shall be reviewed
periodically at intervals approved by the Management Development and
Compensation Committee of the Board of Directors of the Company (the
"Committee"), and Employee's base salary may be increased from time to time
based on merit or such other consideration as the Committee may deem
appropriate.
4. TERMINATION OF EMPLOYMENT.
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Employee is an at-will employee of the Company. However, for purpose of
this Agreement only, a Termination Without Cause shall exist if Employee is
terminated by Company for any reason except:
(1) Intentional conduct or action by Employee which, in the opinion of
a majority of the Board of Directors, is materially harmful to the Company.
(2) Willful failure by Employee to follow an order of the Board or a
direct supervisor except in such case where the Employee believes in good
faith that following such order would be materially detrimental to the
interests of the Company; or
(3) Employee's conviction of a felony.
Additionally, if (a) Employee's annual base salary is reduced below the
amount stated in Paragraph 3.1 hereinabove (unless such reduction is part of an
across the board reduction affecting all Company executives with a comparable
level of responsibility, title or stature), or (b) Employee is removed from or
denied participation in incentive plans, benefit plans, or perquisites generally
provided by the Company to other executives with a comparable level of
responsibility, title or stature, or (c) Employee's target incentive
opportunity, benefits or perquisites are reduced relative to other executives
with comparable responsibility, title or stature, or (d) Employee is assigned
duties or obligations inconsistent with his position with the Company or (e)
Employee is required to relocate to an area outside the Metropolitan Los Angeles
area or (f) There is a significant change in the nature and scope of Employee's
authority or his overall working environment, such event shall be considered a
Termination Without Cause.
5. CHANGE OF CONTROL.
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5.1 In the event of a Change of Control of the Company at any time during
the Term of this Agreement, and Employee's Termination Without Cause within a
period of twenty-four (24) months following the date of a Change of Control,
Employee shall be entitled to the following benefits:
(1) The Company shall pay Employee a lump-sum severance amount within thirty
(30) days following Termination Without Cause equal to two (2) times the sum of
(a) the higher of the Employee's annual base salary at the time of Termination
Without Cause or the annual base salary stated in Paragraph 3.1 hereinabove,
and (b) the average annual Bonus earned by Employee (whether paid in cash or
deferred) for the two completed fiscal years immediately prior to Termination
Without Cause, reduced by the amount of any Unocal Employee Redeployment
Program and/or Unocal Termination Allowance benefits payable to Employee.
(2) The Company shall provide for Employee to receive medical, dental, life,
and disability insurance coverage for two (2) years following Termination
Without Cause at levels and a net cost to Employee comparable to that
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provided to Employee immediately prior to Employee's Termination Without Cause.
(3) The Company shall pay Employee an additional lump-sum severance amount
within thirty (30) days following Employee's Termination Without Cause equal to
two (2) times the base salary used to determine the lump-sum severance benefit
in paragraph 4.3(1) hereinabove, multiplied by 6% (.06).
5.2 Notwithstanding any other provisions in this Agreement or any other
agreement, plan or arrangement, if any payment or benefit received or to be
received by Employee, whether under the terms of this Agreement or any other
agreement, plan or arrangement with the Company or an affiliate of the Company
(all such payments and benefits being hereinafter referred to a "Total
Payments") would be subject, in whole or in part, to taxes imposed by IRC
Section 4999, then the Total Payments shall be reduced to the extent necessary
so that no portion of the Total Payments shall be subject to the parachute
excise tax (the "Excise Tax") imposed by IRC Section 4999 (after taking into
account any reduction in the Total Payments provided by reason of IRC Section
280G in any other plan, arrangement or agreement). Total payments shall not
include any amounts which are not considered a "parachute payments" under IRC
Section 280G in the opinion of suitable experts selected by the Company's Board
of Directors. The Company shall provide Employee with the calculation of the
foregoing amounts and any supporting materials reasonably necessary for Employee
to evaluate the calculations.
5.3 Any reduction in the Total Payments in accordance with Paragraph 5.2
hereinafter shall be made in the following order:
(1) The payments under Paragraph 4.3(3) of this Agreement shall first be
reduced (if necessary, to zero);
(2) The payments under Paragraph 4.3(1) of this Agreement shall next be reduced
(if necessary, to zero);
(3) The payments (or calculated value) of the benefits under Paragraph 4.3(2)
of this Agreement shall next be reduced (if necessary, to zero);
(4) Any additional termination payments or benefits provided outside of this
Agreement shall then be reduced as necessary.
5.4 As used herein, the term "Change of Control" means either (a) the
dissolution or liquidation of the Company, (b) a reorganization, merger or
consolidation of the Company with one or more entities as a result of which the
Company is not the surviving entity, (c) approval by the stockholders of the
Company of any sale, lease, exchange or other transfer (in one or a series of
transactions) of all or substantially all of the assets of the Company, (d)
approval by the stockholders of the Company of any merger or consolidation of
the Company in which the holders of voting stock of the Company immediately
before the merger or consolidation will not own fifty percent (50%) or more of
the outstanding voting shares of the continuing or surviving entity immediately
after such merger or consolidation, (e) a change of 25% or more (rounded to the
next whole person) in the membership of the Board of Directors of the Company
within a
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12-month period, unless the election or nomination for election by stockholders
of each new director within such period was approved by the vote of at least 85%
(rounded to the next whole person) of the directors then still in office who
were in office at the beginning of the 12-month period, or (f) the occurrence of
a "Distribution Date" under the Unocal Rights Agreement.
5.5 Employee shall not be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to Employee under any
provisions of this Agreement.
6. COVENANTS.
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6.1 Employee agrees that any and all confidential knowledge or information,
including but not limited to customer lists, books, records, data, formulae,
specifications, inventions, processes and methods, and developments and
improvements, which have been or may be obtained or learned by Employee in the
course of his employment with the Company, will be held confidential by
Employee, and that Employee shall not disclose the same to any person outside of
the Company either during his employment with the Company or after his
employment by the Company has terminated.
6.2 Employee agrees that upon termination of his employment with the
Company he will immediately surrender and turn over to the Company all books,
records, forms, specifications, formulae, data, and all papers and writings
relating to the business of the Company and all other property belonging to the
Company, it being understood and agreed that the same are the sole property of
the Company and that Employee shall not make or retain any copies thereof.
6.3 Employee agrees that all inventions, developments or improvements which
he has made or may make, conceive, invent, discover or otherwise acquire during
his employment with the Company in the scope of his responsibilities or
otherwise shall become the sole property of the Company.
6.4 Employee agrees to provide a release of any claims with respect to
termination of his or her employment on such form as requested by the Company
upon payment of the sums provided in Section 4.3 above.
7. MISCELLANEOUS PROVISIONS.
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7.1 All terms and conditions of this Agreement are set forth herein, and
there are no warranties, agreements or understandings, express or implied,
except those expressly set forth herein.
7.2 Any modification to this Agreement shall be binding only if evidenced
in writing signed by all parties hereto.
7.3 Any notice or other communication required or permitted to be given
hereunder shall be deemed properly given if personally delivered or deposited in
the United States mail, registered or certified and postage prepaid, addressed
to the Company at 0000 Xxxxxxxxx Xxx., Xxxxx 0000, Xx Xxxxxxx, XX or to Employee
at his or her most recent home address on file with the Company, or at other
such addresses as may from time to time be designated in writing by the
respective parties.
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7.4 The laws of the State of California shall govern the validity of this
Agreement, the construction of its terms, and the interpretation of the rights
and duties of the parties involved.
7.5 In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable,
the same shall not affect any other provision of this Agreement, but this
Agreement shall be construed as if such invalid, illegal or unenforceable
provisions had never been contained herein.
7.6 This Agreement shall be binding upon, and inure to the benefit of, the
successors and assigns of the Company and the personal representatives, heirs
and legatees of Employee.
7.7 "Bonus" refers to the Unocal Incentive Compensation Plan and any
replacement or successor plan thereof.
7.8 Company shall pay 90% (ninety percent) of Employee's out-of-pocket
litigation expenses, including reasonable attorney's fees, in connection with
any judicial proceeding to enforce this Agreement or construe or determine the
validity of this Agreement, whether or not the Employee is successful in such
proceeding.
7.9 The term "Company" shall include with respect to employment hereunder,
any subsidiary or affiliate of the Company, as well as any successor employer
following a Change In Control.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first above written.
BY: /s/
_______________________________________________
Chairman of the Management Development and
Compensation Committee of the Board of Directors
BY: /s/
_______________________________________________
EMPLOYEE
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