Unocal board approves enhanced change-of-control severance program for U.S. employees
El Segundo, Calif., Dec. 5, 2000 -- Unocal Corporation (NYSE: UCL) today said its board of directors has approved an enhanced severance program for non-represented U.S. payroll employees in the event of a change of control of the corporation.
"This is a prudent business step that is consistent with industry practice," said Roger C. Beach, Unocal chairman and chief executive officer. "We are not holding discussions with anyone concerning a sale, merger or other acquisition of the company. This program is important, though, in helping us to retain and attract talented employees in the current competitive labor market and ensure that employees are treated fairly in case a change of control of the corporation should ever occur."
The majority of the costs of the enhancements approved by the board, over and above the costs of existing severance plans and change-of-control arrangements, would be funded from the surplus available under the company's qualified retirement plan.
The company is also reviewing existing severance programs that apply to employees of Unocal's international business units. Recommendations for any enhancements or changes to these programs will be made in line with local laws and competitive practices.
The change-of-control program provides for immediate vesting of accrued benefits and/or accounts of all covered employees under the company's retirement and savings plans and an immediate cash payment of bonuses to such employees under its annual incentive compensations plans. Comparable provisions already exist in Unocal's stock-based compensation plans.
In addition, the new program provides additional benefits to employees who are involuntarily terminated or resign under certain conditions within two years after the change of control. These enhancements include continuation of base pay for four months, subsidized medical and dental benefits for 18 months, additional credit for service and age under the company's retirement plans (for employees with at least 5 years of service), immediate distribution or rollover of total retirement benefits (at the employee's election), and a cash payment in most circumstances.
Additional information on the enhanced severance plan is outlined in a Form 8-K report filed with the U.S. Securities and Exchange Commission.
Updated: December 2000