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Unocal Digs for Treasures in Gandpa
- Subject: Unocal Digs for Treasures in Gandpa
- From: ktint@xxxxxxxxxxxxx
- Date: Mon, 01 Jun 1998 22:04:00
Company Press Release
SOURCE: Unocal Corporation
Unocal Stockholders Elect Directors, Approve New Premium Option Plan for
Senior Officers
EL SEGUNDO, Calif., June 1 /PRNewswire/ -- Unocal Corporation
stockholders today elected three directors at the company's annual
stockholders' meeting and approved a new management incentive program
that includes an innovative premium option plan for the company's top
officers.
Stockholders also ratified the appointment of Coopers & Lybrand L.L.P.,
as independent accountants for 1998 and overwhelmingly rejected three
stockholder proposals, two of which had been defeated by wide margins at
last year's annual meeting.
Election of Directors At the meeting, Frank C. Herringer, chairman,
president and chief executive officer of Transamerica Corporation, John
F. Imle, Jr., president, Unocal Corporation, and Marina v.N. Whitman,
professor of business administration and public policy, University of
Michigan, were re-elected as directors for three-year terms expiring in
2001.
The Unocal board of directors has nine members, of which seven are non-
employee directors.
1998 Management Incentive Program Stockholders also approved the 1998
Management Incentive Program, which includes a Performance Stock Option
Plan (PSOP). The PSOP provides premium options to certain senior company
officers to further align the interests of senior management with those
of the stockholders.
Premium options are options granted at an exercise price that is higher
than the current stock price. ``We believe that this innovative plan
sends a strong message that Unocal is serious about creating value for
the company's stockholders,'' said Roger C. Beach, Unocal chairman and
chief executive officer. ``It is a high risk plan that offers high
potential rewards if the company meets certain stock price or stockholder
return performance conditions.''
Unocal is one of the first companies in the petroleum industry to adopt
such a premium option plan. The premium option grants replace annual
grants of market-priced stock options to participants for 1998 through
2000. Options for 3 million shares have been granted under the plan.
Options for an additional 500,000 may be granted in the future at a
premium of at least 25 percent over the fair market value on the date of
the grant.
The price for the initial premium options granted under the new plan is
$51.012. This is one-third higher than the average share price during the
period of Jan. 26 to May 29, 1998, and 43 percent higher than the closing
price on Friday.
The options will be forfeited unless one of the two following conditions
are met:
1. The option price of $51.012 per share is maintained for at least 10
out of 20 consecutive trading days within three years of the grant date
(March 30, 1998)
2. Unocal's comparative return to stockholders places the company in the
top quartile of the peer group companies for the three-year period. The
other parts of the Management Incentive Program approved by stockholders
include a Revised Incentive Compensation Plan and a Long-Term Incentive
Plan, which replace similar plans that were in existence in 1997.
Stockholder Proposals
Stockholders overwhelmingly rejected three stockholder proposals.
The first proposal, which was rejected by 92.1 percent of the votes cast
at the meeting, asked the board to prepare a report on executive
compensation.
Stockholders also rejected by more than 94.5 percent of the votes cast a
proposal requesting an investigation into the financial operations of a
state- owned energy company involved in the Yadana natural gas
development project. This was the second year that stockholders had
rejected this proposal.
The third proposal requested a report on the actual and potential
economic and public relations costs to Unocal of opposition to the
company's investments in Myanmar. This proposal, which had been defeated
at the 1997 annual meeting, was rejected by 94 percent of the votes cast
at the meeting. Unocal is a leading global oil and gas exploration and
production company with significant pipeline and power plant project
developments worldwide.
Note: An audio broadcast and transcript of the annual meeting remarks by
Roger C. Beach, Unocal chairman and chief executive officer, will be
available on Unocal's web site, www.unocal.com.