Petron — PEA-NATU SIGNS New CBA - The First of Its Kind in the Company's History

December 17, 1999 PSE CIRCULAR FOR BROKERS NO. 3220-99 December 15, 1999 PETRON PEA-NATU SIGNS NEW CBA - THE FIRST OF ITS KIND IN THE COMPANY'S HISTORY Petron Corporation and the Petron Employees Association National Association of Trade Unions or PEA-NATU formally signed their new Collective Bargaining Agreement (CBA) last December 6, 1999 at the Executive Lounge of the Petron MegaPlaza. In fact, the agreement was the first of its kind in the history of Petron Corporation. After ten-meetings in more than two months of arduous negotiations, the Petron management panel and the union panel finally came to terms on the provisions of the special CBA. In addition to the across-the-board system wherein PEA-NATU members are entitled to an increase of 16 percent for the first 16 months (Sept. 1, 1999 to December 31, 2000), .the agreement also covers two years, from 2001 to 2002, where they will be part of the Company's Salary Administration Program or SALAD as well as its Variable Pay Program, known as REAP which stands for Rewarding Excellence through Alternative Pay. These special provisions in the CBA mark a shift in the thinking of the rank & file employees towards performance based rewards. It eliminates the inequitable distribution of increases where good performers will no longer be subsidizing poor performers. In a brief ceremony that preceded the actual signing of the CBA, Petron Chairman and CEO Jose A. Syjuco Jr: congratulated PEA-NATU officers and members alike for the successful conclusion of the negotiations. He said, "This agreement sets a precedent in the sense that it is the first time ever that members of a Company's union will become part of its Salary Administration and REAP programs." Syjuco also stressed that it was a proof of renewed mutual trust and respect among officers and members of the management and-union panels. On the other hand, Petron President Khalid A. Al-Falih said the agreement "ensures a fair and equitable reward system inasmuch as it gives everyone what he deserves." He continued "Your being part of the REAP affirms the commitment you have to the Company, not just as its employees but as its part-owners as well." prcd The new CBA will stimulate teamwork and group accountability among all sectors of the Company. It will provide more motivation and opportunities for rank & file to work as a team. Moreover, it also signifies confidence of rank and file employees in the future of the Company as they join hands with Management in sharing in the Company's goals and business risks. PEA-NATU Chairman Alfonso D. San Juan Jr., from Gasul Operations, said "We believe in the system and we hope for a meaningful and deeper partnership as we work together for the Company." LibLex