SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) December 3, 2004
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UNOCAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8483 95-3825062
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(Commission File Number) (I.R.S. Employer Identification No.)
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
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(Address of Principal Executive Offices) (Zip Code)
(310) 726-7600
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(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
Item 1.01. Entry into a Material Definitive Agreement.
Increase in Annual Cash Retainer for Vice Chairman of the Board
At its December 3, 2004 meeting, the Board of Directors of Unocal Corporation
("Unocal") approved the increase in the annual cash retainer payable to a
director serving as the Vice Chairman of the Board from $48,000 to $100,000.
This increase is effective January 1, 2005. The Vice Chairman retainer is in
addition to the annual cash retainer paid to all directors for their service on
the Board. Mr. John W. Creighton, Jr., an independent director, currently serves
as the Vice Chairman of the Board.
Revisions to Change of Control Severance Program
On December 3, 2004, the Boards of Directors of Unocal and its wholly-owned
subsidiary Union Oil Company of California ("Union Oil") each approved revisions
to and continuation of the enhanced change of control severance program approved
in December 2000, most of the provisions of which were set to expire on December
31, 2004.
Unocal is not currently holding discussions with anyone concerning a change of
control of Unocal. The severance program is designed to ensure that employees
will be treated fairly if a change of control of Unocal were to occur in the
future, thus assisting Unocal in retaining and attracting key employees.
The severance program is for U.S. payroll employees not represented by
collective bargaining agents in the event they lose their jobs through a change
of control of Unocal. In the event of a "change of control," as defined in
Unocal's Long-Term Incentive Plan of 2004 (please see exhibit 10.1 to this
report for the definition), the program provides for the immediate vesting of
accrued benefits of all U.S. payroll non-represented employees in the Unocal
Retirement Plan and immediate vesting of company contributions of all such
employees in the Unocal Savings Plan and the immediate availability of payment
to such employees in cash of bonuses under Unocal's annual incentive
compensation plans.
Additional provisions of the program become operative in the event of an
eligible employee's involuntary termination of employment (other than for death,
disability or misconduct) or constructive discharge within two years following a
change of control, including (1) increased severance payments, (2) a "tax
gross-up" arrangement for employees subject to the excise tax provided for by
Section 280G of the Internal Revenue Code, (3) subsidized COBRA medical and
dental coverage for 18 months, (4) a "three plus three" enhancement to criteria
for determining eligibility and contributions under Unocal's retiree and special
continuation medical coverages and for determining eligibility under its retiree
life and voluntary AD&D insurance plans, and (5) a "three plus three"
enhancement to retirement plan benefits and immediate eligibility for retirement
plan distributions, as well as certain other benefits. "Constructive discharge"
includes an employee's resignation within 60 days following certain reductions
in pay, benefits and/or perquisites, or as a result of certain work location
changes. Under the terms of the severance program, executive officers who have
individual employment agreements, such as Messrs. Williamson, Dallas, Bryant,
Gillespie and Howard, would be entitled to the enhanced benefit of additional
credit for service years if they agree to its offset against the
change-of-control benefits already provided under their employment agreements.
For further details on the original severance program, please see pages 15 and
16 of Unocal's 2004 proxy statement filed with the Securities and Exchange
Commission.
The December 2004 revisions to the change of control severance program include
(1) a revised definition of "change of control" and (2) a revised duration of
the severance program. "Change of control" was previously defined in Unocal's
Long-Term Incentive Plan of 1998 and now is defined in Unocal's Long-Term
Incentive Plan of 2004 (please see exhibit 10.1 to this report for the new
definition). Originally, the change of control that triggered the enhanced
severance program had to occur prior to December 31, 2004. The revised change of
control severance program now provides that such change of control must occur
prior to any effective termination of the program by the Unocal Board of
Directors; provided, however, that if a change of control occurs within one year
after the Board of Directors terminates the program, then such termination will
not be effective with regard to employees who suffer a termination of employment
within two years following the change of control and who would have otherwise
been eligible to receive benefits under the program.
In light of certain uncertainties under the recently enacted American Jobs
Creation Act of 2004, the December 2004 revisions did not extend the change of
control provisions of Unocal's nonqualified pension plans or supplemental
savings plan. Provided that anticipated regulations pursuant to the Jobs Act
permit, the Boards of Unocal and Union Oil currently intend to similarly extend
those change of control provisions at a future date.
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Item 9.01 Financial Statements & Exhibits.
(c) Exhibit 10.1 - Excerpt from Long-Term Incentive Plan of 2004
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNOCAL CORPORATION
(Registrant)
Date: December 6, 2004 By: /s/Joe D. Cecil
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Joe D. Cecil
Vice President and Comptroller
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