Award Agreement - Unocal Corp. and Timothy H. Ling
UNOCAL CORPORATION
2000 EXECUTIVE STOCK PURCHASE PROGRAM
THIS AWARD AGREEMENT (this "Agreement") dated March 16, 2000 is between
Unocal Corporation, a Delaware corporation (the "Company"), and the Participant
named below and constitutes the agreement of the parties as follows: the Company
agrees to loan to the Participant the amount set forth below (the "Loan") to
purchase and pay for shares of Common Stock of the Company (the "Common Stock")
in the open market, such purchase to commence on the date set forth below,
subject to the terms and conditions hereof (this "Award"). This Award is granted
pursuant to and subject to the terms of the Unocal Corporation 2000 Executive
Stock Purchase Program (the "Program"), attached hereto as Exhibit A, and any
rules or guides to administration adopted from time to time by the Management
Development and Compensation Committee or any successor committee appointed by
the Company's Board of Directors to administer the Program (the "Committee").
The Participant's obligation to repay the Loan shall be evidenced by a full
recourse note, in the form attached hereto as Exhibit B, executed by the
Participant and delivered to the Company on the Purchase Date. A signed
facsimile shall be deemed acceptable delivery.
Participant: Timothy H. Ling
Loan Amount: $5,000,000
Purchase Date(s)
Commencement: March 16, 2000
The Participant represents, warrants and agrees as follows:
1. The proceeds of the Loan will be used solely for the business purpose of
purchasing shares of the Common Stock;
2. The Loan is not being taken for personal, family or household purposes;
3. The taking and repayment of the Loan will not violate any other
agreement to which the Participant is a party or by which the Participant is
bound;
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4. The Participant is not in possession of any undisclosed information
concerning the Company which, if disclosed, would be material to investors in
the Common Stock; and
The Participant understands that purchases, sales and ownership of the
Common Stock are subject to the requirements of the Securities Act of 1933 and
the Securities Exchange Act of 1934 and agrees to comply with such laws and the
rules and regulations thereunder, including without limitation, restrictions on
the ability of affiliates of the Company to sell the Common Stock and the
reporting requirements of Section 16 of the Securities Exchange Act of 1934.
UNOCAL CORPORATION AGREED AND ACKNOWLEDGED:
(a Delaware corporation)
By: /s/FRANK C. HERRINGER /s/TIMOTHY H. LING
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Its: Chairman of the Management Development and Participant's Signature
Compensation Committee of the Unocal
Board of Directors
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EXHIBIT B
FULL RECOURSE
PROMISSORY NOTE
DUE MARCH 16, 2008
$5,000,000 March 16, 2000
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FOR VALUE RECEIVED, Timothy H. Ling, an individual ("Maker"),
unconditionally promises to pay to Unocal Corporation, a Delaware corporation
(together with any successor or assignee by operation of law or otherwise,
"Payee"), on the earlier of March 16, 2008 or such other date as provided
herein, in the manner and at the place hereinafter provided, the unpaid
principal amount of all advances made by Payee to Maker for the purposes of
Maker's purchase of common stock of Payee pursuant to the terms of the Unocal
Corporation 2000 Executive Stock Purchase Program (the "Program"). All advances
made under this Note shall be noted hereon; provided, however, that the failure
to make a notation shall not limit or otherwise affect the obligations of Maker
hereunder with respect to payments of principal or interest on this Note.
The initial principal amount of this Note is five million dollars
($5,000,000). Such principal amount shall be increased by an amount equal to any
accrued but unpaid interest as set forth in the next paragraph of this note and
decreased by any of the funds not used to purchase shares under the Program and
by any repayments of principal. The principal amount outstanding on March 16,
2005, shall be payable in three equal annual installments on the March 16, 2006,
March 16, 2007 and at maturity.
Maker also promises to pay interest on the unpaid principal amount of this
Note from the date such principal is advanced until such principal is paid in
full at a rate per annum equal to the lesser of: (i) the maximum amount
allowable pursuant to applicable law; or (ii) 6.8%. Interest on this Note shall
be computed on the basis of a 365-day year, based on the actual number of days
elapsed. Interest shall be payable in arrears [annually] on the sixteenth (16th)
day of each March (an "Interest Payment Date"), commencing on March 16, 2001,
upon any prepayment of this Note (to the extent accrued on the amount being
prepaid) and at maturity; provided that, prior to March 17, 2005, interest shall
be payable only in an amount equal to dividends paid on the shares of Common
Stock of Payee purchased for Maker under the Program, subject to proportionate
adjustment in the event of a stock split, stock dividend or other change in
capitalization. All interest accrued and unpaid as of any Interest Payment Date
shall be added to principal and accrue interest from such Interest Payment Date.
1. Payments; Voluntary Prepayment. All payments of principal and interest
in respect of this Note shall be made in lawful money of the United States of
America. Each payment made hereunder shall be credited first to interest then
due and the remainder of such payment shall be credited to principal, and
interest shall thereupon cease to accrue upon the principal so credited. Maker
shall have the right at any time and from time to time to prepay the principal
of this Note in whole or in part, without premium or penalty, such prepayment
hereunder being accompanied by interest on the principal amount of the Note
being prepaid to the date of prepayment. All voluntary prepayments shall be
applied to the remaining principal payments in chronological order of maturity.
2. Mandatory Prepayment.
(a) If there shall occur a termination for Cause or Voluntary Termination
(as such terms are defined in the Program) of Maker, the unpaid principal amount
of this Note together with accrued interest thereon shall become due and payable
on the 60th business day after such termination.
(b) If the Program is not approved by Payee's stockholders on or before
June 22, 2000, the unpaid principal of and all accrued and unpaid interest on
this Note shall become immediately due and payable.
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3. Full Recourse Note. This Note is a full recourse Note and Maker shall be
liable for the full payment of the principal of and interest on this Note.
4. Events of Default. Each of the following shall constitute an Event of
Default:
(a) The failure by Maker to pay any principal under this Note when due,
whether at stated maturity, by acceleration, or otherwise, or the failure to pay
any interest or other amount due under this Note within five (5) days after the
date due;
(b) any challenge, or institution of any proceedings to challenge by Maker
of the validity, binding effect or enforceability of this Note or any
endorsement of this Note;
(c) any default by Maker of any other obligation under this Note; or
(d) The initiation of any proceeding relating to Maker under any
bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of
debt or receivership law or statute, whether filed by or against Maker, or the
assignment for the benefit of creditors by Maker.
Upon an Event of Default set forth in clauses (a) and (d) above, the
principal amount of this Note together with accrued interest thereon shall
become immediately due and payable, without presentment, demand, notice, protest
or other requirements of any kind (all of which are hereby expressly waived by
Maker). Upon any other Event of Default, Payee may, by written notice to Maker,
declare the principal amount of this Note together with accrued interest thereon
to be due and payable, and the principal amount of this Note together with such
interest shall thereupon immediately become due and payable without presentment,
further notice, protest or other requirements of any kind (all of which are
hereby expressly waived by Maker).
5. Set-Off. Payee shall be entitled to set-off against this Note any and
all amounts owed by Payee to Maker as and when such amounts become due and
payable, whether presently existing or hereafter incurred, to the maximum extent
allowable under applicable laws. To the extent that Maker's consent to the
set-off is required, this Note constitutes Maker's consent.
6. Miscellaneous.
(a) All notices and other communications provided for hereunder shall be in
writing (including facsimile or e-mail communication) and hand-delivered,
mailed, or telecopied as follows: if to Maker, at Maker's address specified
opposite Maker's signature below; and if to Payee, at 2141 Rosecrans Avenue,
Suite 4000, CA 90245; or in each case at such other address as shall be
designated by Payee or Maker. All such notices and communications shall, when
hand-delivered, mailed, or telecopied (with answer-back confirmation) be
effective when deposited in the mails, delivered or sent by telecopier.
(b) No failure or delay on the part of Payee or any other holder of this
Note to exercise any right, power or privilege under this Note and no course of
dealing between Maker and Payee shall impair such right, power or privilege or
operate as a waiver of any default or an acquiescence therein, nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies expressly provided in this Note are
cumulative to, and not exclusive of, any rights or remedies that Payee would
otherwise have. No notice to or demand on Maker in any case shall entitle Maker
to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of Payee to any other or further action in any
circumstances without notice or demand.
(c) Maker and any endorser of this Note hereby consent to renewals and
extensions of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind and, to
the full extent permitted by law, the right to plead any statute of
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limitations as a defense to any demand hereunder. To the fullest extent
permitted by law, the obligations of Maker hereunder shall not be subject to any
counterclaim, set-off, deduction, diminution, abatement, recoupment, deferment,
suspension, reduction or defense (other than the full and strict compliance by
Maker with those obligations) based on any claim that Maker may have against
Payee or any other person.
(d) No provision of this Note may be waived, modified or discharged orally,
but only by an agreement signed by the party against whom enforcement is sought.
(e) If any provision in or obligation under this Note shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
(f) This note and the rights and obligations of maker and payee hereunder
shall be governed by, and shall be construed and enforced in accordance with the
laws of the State of California except for such matters as are subject to the
General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the
day and year and at the place first above written.
MAKER
TIMOTHY H. LING
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Print Name
/s/TIMOTHY H. LING
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Signature
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TRANSACTIONS ON PROMISSORY NOTE
Amount of Outstanding
Amount of Principal Repaid on this Principal Balance on
Loan Made Date this Date
Date on this Date
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