Exhibit
3.(ii)
[As Amended October 13,
2010]
BY-LAWS
OF
OCCIDENTAL PETROLEUM CORPORATION
(hereinafter called the “Corporation”)
ARTICLE I
OFFICES
SECTION 1.
Registered Office
. The registered office of the Corporation
shall be in the State of Delaware.
SECTION 2.
Other Offices.
The Corporation may also have
offices at such other places both within and without the State of Delaware as
the Board of Directors may from time to time determine.
ARTICLE II
MEETING OF STOCKHOLDERS
SECTION 1.
Place and Conduct of
Meetings.
Meetings of the
stockholders for the election of directors or for the transaction of only such
other business as may properly be brought before the meeting in accordance with
these By-laws shall be held at such time and place, either within or without
the State of Delaware, as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting or in a duly executed waiver
of notice thereof. The Chairman of such
meetings shall have plenary power and authority with respect to all matters
relating to the conduct thereof including, without limitation, the authority to
limit the amount of time which may be taken by any stockholder or stockholders,
the authority to appoint and be advised by a parliamentarian, and the authority
to appoint and to instruct a sergeant or sergeants at arms.
SECTION 2.
Annual Meetings.
The Annual Meetings of
Stockholders shall be held on such date and at such time as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting, for the purpose of electing directors and for the transaction of only
such other business as may properly be brought before the meeting in accordance
with these By-laws.
To
be properly brought before the Annual Meeting, business must be either (a) specified
in the notice of Annual Meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (b) otherwise properly brought before
the Annual Meeting by or at the direction of the Board of Directors, or (c) otherwise
properly brought before the Annual Meeting by a stockholder of the Corporation (i) who
is a stockholder of record on the date of the giving of the notice provided for
in this
Section 2
and on the record date
for the determination of stockholders entitled to vote at such Annual Meeting
and (ii) who complies with the notice procedures set forth in this
Section 2
.
In
addition to any other applicable requirements, for business to be properly
brought before an Annual Meeting by a stockholder, the stockholder must have
given timely notice thereof in proper written form to the Secretary of the
Corporation.
To
be timely, a stockholder’s notice must be delivered to or mailed to and
received at the principal executive offices of the Corporation, not less than
seventy (70) days nor more than ninety (90) days prior to the anniversary date
of the immediately preceding Annual Meeting;
provided,
however,
that in the event that the Annual Meeting is called for a
date that is not within thirty (30) days before or after such anniversary date,
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth (10
th
) day following the day on which such notice of the
date of the Annual Meeting was mailed or such public disclosure was made,
whichever first occurs. In no event
shall the public
announcement
of an adjournment of an Annual Meeting commence a new time period for the
giving of a stockholder’s notice as described above.
To
be in proper written form, a stockholder’s notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the Annual
Meeting (i) a brief description of the business desired to be brought
before the Annual Meeting, the reasons for conducting such business at the
Annual Meeting and any material interest in such business of the stockholder
and the beneficial owner, if any, on whose behalf the proposal is made, (ii) the
name and record address of the stockholder proposing such business, (iii) the
class, series and number of shares of the Corporation which are beneficially
owned by the stockholder, (iv) a description of all arrangements or
understandings between the stockholder and any other person or persons
(including their names) in connection with such business, (v) whether the
stockholder or the beneficial owner, if any, intends or is part of a group
which intends to distribute proxy materials, and (vi) a representation
that the stockholder intends to appear, in person or by another person authorized
in accordance with the General Corporation Law of the State of Delaware to act
as proxy for the stockholder, at the Annual Meeting to present such business.
Notwithstanding
anything in the By-laws to the contrary, no business shall be conducted at the
Annual Meeting except in accordance with the procedures set forth in this
Section 2; provided, however,
that nothing in this
Section 2
shall be deemed to preclude discussion by any
stockholder of any business properly brought before the Annual Meeting.
The
Chairman of an Annual Meeting shall, if the facts warrant, determine and
declare to the Annual Meeting that business was not properly brought before the
Annual Meeting in accordance with the provisions of this
Section 2
,
and if he should so determine, he shall so declare to the Annual Meeting and
any such business not properly brought before the Annual Meeting shall not be
transacted.
Written
notice of the Annual Meeting stating the place, date and hour of the Annual
Meeting shall be given to each stockholder entitled to vote at such meeting not
less than ten (10) nor more than sixty (60) days before the date of the
meeting.
SECTION 3.
Special Meetings
. Unless otherwise prescribed by law or by the
Certificate of Incorporation, Special Meetings of Stockholders, for any purpose
or purposes, may be called by the Board of Directors or the Chairman of the
Board. Subject to subsections (a) -
(d) of this Article II, Section 3, a Special Meeting of
Stockholders shall be called by the Secretary upon the written request of the
record holders of at least 25% of the outstanding common stock of the
Corporation (the “Requisite Percent”).
Written notice of a Special Meeting stating the place, date and hour of
the meeting and the purpose or purposes for which the meeting is called shall
be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting.
(a)
In order for a
Stockholder Requested Special Meeting (as defined in this By-law) to be called,
one or more requests for a Special Meeting must be signed by the Requisite
Percent of record holders (or their duly authorized agents) and delivered to
the Secretary (each, a “Special Meeting Request,” collectively, the “Special
Meeting Requests”). The Special Meeting
Request(s) shall be sent to the Secretary at the principal executive
offices of the Corporation by registered mail, return receipt requested. The Special Meeting Request(s) shall (i) set
forth a statement of the specific purpose(s) of the meeting, the matters
proposed to be acted on at the meeting and the reasons for conducting such
business at the Special Meeting, (ii) bear the date of signature of each
such stockholder (or duly authorized agent) signing the Special Meeting
Request(s), (iii) set forth (A) the name and address, as they appear
in the Corporation’s stock ledger, of each stockholder signing such request (or
on whose behalf the Special Meeting Request is signed), and (B) the class,
if applicable, and number of shares of stock of the Corporation that are owned
of record and beneficially by each such stockholder, (iv) set forth any
material interest of each stockholder in the business desired to be brought
before the Special Meeting, (v) set forth all information relating to each
such stockholder that must be disclosed in solicitations of proxies for
election of directors in an election contest (even if an election contest is
not involved), or is otherwise required, in each case pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended (the
2
“Exchange Act”), and Rule 14a-11 thereunder and (vi) contain
the information, if applicable, which shall be set forth in a stockholder’s
notice as required by Article II, Section 2 of these By-laws. A stockholder may revoke his, her or its
request for a Special Meeting at any time by written revocation delivered to
the Secretary.
(b)
The Secretary
shall not be required to call a Special Meeting upon stockholder request (a “Stockholder
Requested Special Meeting”) if (i) the Special Meeting Request(s) relates
to an item of business that is not a proper subject for stockholder action
under applicable law, or (ii) the Board of Directors has called or calls
for an annual or special meeting of stockholders to be held not later than
ninety (90) days after the Secretary’s receipt of the Special Meeting Request(s) and
the purpose(s) of such meeting include the purpose(s) specified in
the Special Meeting Request(s), with such determination being made in good
faith by the Board of Directors.
(c)
A Stockholder
Requested Special Meeting shall be held at such date, time and place within or
without the State of Delaware as may be fixed by the Board of Directors;
provided, however, that the date of any Stockholder Requested Special Meeting
shall be not more than ninety (90) days after the Secretary’s receipt of the
properly submitted Special Meeting Request(s).
(d)
Business
transacted at any Stockholder Requested Special Meeting shall be limited to the
purpose(s) stated in the Special Meeting Request(s); provided, however,
that nothing herein shall prohibit the Board from submitting matters to the
stockholders at any Stockholder Requested Special Meeting.
SECTION 4.
Quorum.
Except as otherwise provided by
law or by the Certificate of Incorporation, the holders of a majority of the
capital stock issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at all meetings of
the stockholders for the transaction of business. If, however, such quorum shall not be present
or represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might
have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder
entitled to vote at the meeting.
SECTION 5.
Voting.
Unless otherwise required by law,
the Certificate of Incorporation or these By-laws, any question brought before
any meeting of stockholders shall be decided by the affirmative vote of a majority
of the shares present in person or by proxy at the meeting for the purposes of
determining the presence of a quorum at such meeting. Unless otherwise provided in the Certificate
of Incorporation, each stockholder represented at a meeting of stockholders
shall be entitled to cast one vote for each share of the capital stock entitled
to vote thereat held by such stockholder.
Such votes may be cast in person or by proxy but no proxy shall be voted
on or after three years from its date, unless such proxy provides for a longer
period. No vote at any meeting of
stockholders need be by written ballot unless the Board of Directors, in its
discretion, or the officer of the Corporation presiding at the meeting, in his
discretion, specifically directs the use of a written ballot.
SECTION 6.
List of Stockholders
Entitled to Vote.
The officer
of the Corporation who has charge of the stock ledger of the Corporation shall
prepare and make, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall
be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
of the Corporation who is present.
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SECTION 7.
Stock Ledger.
The stock ledger of the
Corporation shall be the only evidence as to who are the stockholders entitled
to examine the stock ledger, the list required by
Section
6
of this
Article II
or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
SECTION 8.
Voting Procedures and
Inspectors of Election.
The
corporation shall, in advance of any meeting of stockholders, appoint one or
more inspectors to act at the meeting and make a written report thereof. The corporation may designate one or more
persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act
at a meeting of stockholders, the person presiding at the meeting shall appoint
one or more inspectors to act at the meeting.
Each inspector, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his ability.
The
inspectors shall (i) ascertain the number of shares outstanding and the
voting power of each, (ii) determine the shares represented at a meeting
and the validity of proxies and ballots, (iii) count all votes and
ballots, (iv) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors, and (v) certify
their determination of the number of shares represented at the meeting, and
their count of all votes and ballots.
The inspectors may appoint or retain other persons or entities to assist
the inspectors in the performance of the duties of the inspectors.
The
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote at a meeting shall be announced at the
meeting.
ARTICLE III
DIRECTORS
SECTION 1.
Number and Election of
Directors
. Subject to the
rights, if any, of holders of preferred stock issued by the Corporation to
elect directors of the Corporation, the Board of Directors shall consist of one
or more directors, the number of which shall be fourteen (14) until changed by
resolution duly adopted by the Board of Directors from time to time. Except as provided in Section 3 of this Article III
and subject to Section 12 of this Article III, directors shall be
elected by a majority of the votes cast at Annual Meetings of Stockholders and
each director so elected shall hold office until his successor is duly elected
and qualified, or until his earlier death, disqualification, resignation or
removal. No person shall be eligible for
election as a director of the Corporation who shall have reached the age of
seventy-five (75) at the date of such election, unless such requirement shall
have been unanimously waived by the members of the Corporate Governance,
Nominating and Social Responsibility Committee and such Committee’s action
shall have been ratified and approved by a majority of the disinterested
directors on the Board of Directors.
Directors need not be stockholders.
SECTION 2.
Nominations of
Directors.
Only persons who
are nominated in accordance with the following procedures shall be eligible for
election as directors, except as may be otherwise provided in the Certificate
of Incorporation of the Corporation with respect to the right of holders of
preferred stock of the Corporation to nominate and elect a specified number of
directors in certain circumstances.
Nominations of persons for election to the Board of Directors of the
Corporation may be made at any Annual Meeting (a) by or at the direction
of the Board of Directors (or any duly authorized committee thereof) or (b) by
any stockholder of the Corporation (i) who is a stockholder of record on
the date of the giving of the notice provided for in this
Section 2
and on the record date for the determination of stockholders entitled to vote
at the Annual Meeting and (ii) who complies with the notice procedures set
forth in this
Section 2
.
In
addition to any other applicable requirements, for a nomination to be made by a
stockholder, the stockholder must have given timely notice thereof in proper
written form to the Secretary of the Corporation.
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To
be timely, a stockholder’s notice to the Secretary must be delivered to or
mailed and received at the principal executive offices of the Corporation
between September 1 and November 30 of the year preceding the Annual
Meeting. To be in proper written form, a
stockholder’s notice to the Secretary must set forth (a) as to each person
whom the stockholder proposes to nominate for election or re-election as a
director, (i) the name, age, business address and residence address of the
person, (ii) principal occupation or employment of the person, (iii) the
class or series and number of shares of capital stock of the Corporation which
are owned beneficially or of record by the person, and (iv) any other
information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to the Rules and
Regulations of the Securities and Exchange Commission under Section 14 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (b) as
to the stockholder giving the notice, (i) the name and record address of
such stockholder, (ii) the class or series and number of shares of capital
stock of the Corporation which are beneficially owned by the stockholder, (iii) a
description of all arrangements or understandings between the stockholder or
the beneficial owner, if any, on whose behalf the nomination is made and each
proposed nominee and any other person or persons (including their names)
pursuant to which the nominations are to be made by such stockholder, (iv) whether
the stockholder or the beneficial owner, if any, intends or is part of a group
which intends to distribute proxy materials, (v) a representation that the
stockholder intends to appear, in person or by another person authorized in
accordance with the General Corporation Law of the State of Delaware to act as
proxy for the stockholder, at the Annual Meeting to nominate the persons named
in the stockholder’s notice, and (vi) any other information relating to
the person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to the Rules and Regulations of the
Securities and Exchange Commission under Section 14 of the Exchange
Act. Such notice must be accompanied by
a written consent of each proposed nominee to being named as a nominee and to
serve as a director if elected.
No
person shall be eligible for election as a director of the Corporation unless
nominated in accordance with the procedures set forth in this
Section 2
. If
the Chairman of the Annual Meeting determines that a nomination was not made in
accordance with the foregoing procedure, the Chairman shall declare to the
meeting that the nomination was defective and the defective nomination shall be
disregarded.
SECTION 3.
Vacancies.
Any newly created directorship resulting
from an increase in the number of directors or any other vacancy on the Board
of Directors may be filled by a majority of the Board of Directors then in
office, even if less than a quorum, or by a sole remaining director. Any director elected to fill a newly created
directorship resulting from an increase in the number of directors or any other
vacancy shall hold office for a term that shall
expire at the next Annual Meeting of Stockholders.
SECTION 4.
Duties and Powers.
The business of the Corporation
shall be managed by or under the direction of the Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
By-laws directed or required to be exercised or done by the stockholders.
SECTION 5.
Meetings.
The Board of Directors of the
Corporation may hold meetings, both regular and special, either within or
without the State of Delaware. Regular
meetings of the Board of Directors may be held without notice at such time and
at such place as may from time to time be determined by the Board of
Directors. Special meetings of the Board
of Directors may be called by the Chairman, if there be one, the President, or
any three directors. Notice thereof
stating the place, date and hour of the meeting shall be given to each director
either by mail not less than forty-eight hours before the date of the meeting,
by telephone, telegram or telecopy on twenty-four hours notice, or on such
shorter notice as the person or persons calling such meeting may deem necessary
or appropriate in the circumstances.
SECTION 6.
Quorum.
Except as may be otherwise
specifically provided by law, at all meetings of the Board of Directors or of
any committee thereof, a majority of the members of the entire Board of
Directors or of the said committee shall constitute a quorum for the
transaction of business; and the act of a majority of the directors or members
of the committee present at any meeting at which there is a quorum shall be the
act of the Board of Directors or of the said committee, as the case may
be. A meeting at which a quorum is
initially present may continue to transact business notwithstanding the withdrawal
of directors
5
or
members of the committee if any action taken is approved by at least a majority
of the required quorum for that meeting.
If a quorum shall not be present at any meeting of the Board of
Directors or of any committee thereof, the directors or members of the
committee present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
SECTION 7.
Actions of Board.
Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee
thereof may be taken without a meeting, if all the members of the Board of
Directors or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors or committee.
SECTION 8.
Meetings by Means of
Conference Telephone.
Members
of the Board of Directors of the Corporation, or any committee designated by
the Board of Directors, may participate in a meeting of the Board of Directors
or such committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this
Section
8 shall constitute presence in person at such
meeting.
SECTION 9.
Committees.
The Board of Directors may
designate one or more committees, each committee to consist of one or more of
the directors of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of any such committee. In the absence or
disqualification of a member of a committee, and in the absence of a designation
by the Board of Directors of an alternate member to replace the absent or
disqualified member, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any absent or disqualified member. Any committee, to the extent allowed by law
and provided in the resolution establishing such committee, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation. Meetings of any committee may be called by
the Chairman of such committee, if there be one, or by any two members thereof
other than such Chairman. Notice thereof
stating the place, date and hour of the meeting shall be given to each member
by mail not less than forty-eight hours before the date of the meeting; by
telephone, telegram or telecopy on twenty-four hours notice; or on such shorter
notice as the person or persons calling such meeting may deem necessary or
appropriate in the circumstances. Each
committee shall keep regular minutes and report to the Board of Directors when
required.
SECTION 10.
Compensation.
The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of
Directors and/or a stated annual fee as a director. No such payment shall preclude any director
from serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
SECTION 11.
Interested Directors.
No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose if (i) the material facts as to his or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the
Board of Directors or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or (ii) the
material facts as to his or their relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified by the Board of Directors, a committee thereof or the
stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting
of the Board of Directors or of a committee which authorizes the contract or
transaction.
6
SECTION 12.
Resignation of Directors
. In an uncontested election, any nominee for
director who receives a greater number of votes “against” from his or her
election than votes “for” such election (a “Majority Against Vote”) shall
promptly tender his or her resignation following certification of the
stockholder vote by the Inspector of Elections. Unless accepted earlier by the
Board of Directors, such resignation shall become effective on October 31
st
of the year of the election.
Notwithstanding
the obligation to resign for a Majority Against Vote, any director may resign
at any time for any other reason. In
such instance, the resignation shall be effective upon giving written notice to
the Secretary, unless the notice specifies a later time for such resignation to
become effective, and no action shall be required by the Board of Directors for
the resignation to become effective. If
the resignation of a director is effective at a future time, the Board of
Directors may elect a successor prior to such effective time to take office
when such resignation becomes effective.
ARTICLE IV
OFFICERS
SECTION 1.
General.
The
officers of this Corporation shall be chosen by the Board of Directors and
shall be a Chairman of the Board, who shall be the Chief Executive Officer, any
number of Vice Chairmen, a President, a Senior Operating Officer, any number of
Executive Vice Presidents, one or more of whom may be designated Senior
Executive Vice President, any number of Vice Presidents with such rank as the
Board of Directors may designate, a Secretary, any number of Assistant
Secretaries, a Treasurer, and any number of Assistant Treasurers. One of such Executive Vice Presidents or Vice
Presidents shall be designated Chief Financial Officer and shall have
responsibility, subject to the direction of the Board of Directors, the
Chairman of the Board and the President, for the management of the Corporation’s
financial affairs. Any number of offices
may be held by the same person, unless otherwise prohibited by law, the Certificate
of Incorporation or these By-laws. The
officers of the Corporation need not be stockholders of the Corporation nor,
except in the case of the Chairman of the Board of Directors, need such
officers be directors of the Corporation.
SECTION 2.
Election.
The Board of Directors at its
first meeting held after each Annual Meeting of Stockholders shall elect the
officers of the Corporation who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the Corporation
shall hold office until their successors are chosen and qualified, or until
their earlier resignation or removal.
Any officer elected by the Board of Directors may be removed at any time
by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in an office of the
Corporation shall be filled by the Board of Directors.
SECTION 3.
Remuneration.
The Board of Directors shall have
the power to fix and determine the salaries and other remuneration, and the
terms and conditions thereof, of all executive officers of the Corporation.
SECTION 4.
Chairman of the Board of
Directors.
The Chairman of
the Board of Directors shall preside at all meetings of the stockholders and of
the Board of Directors and the Executive Committee, if any, shall have general
and active management of the business and affairs of the Corporation, shall
have plenary power to issue orders and instructions to all officers and
employees of the Corporation, and shall see that all orders and resolutions of
the Board of Directors and the Executive Committee, if any, are carried into
effect. He shall be the Chief Executive
Officer of the Corporation, and except where by law the signature of the
President is required, the Chairman of the Board of Directors shall possess the
power to enter into and sign all contracts, certificates and other instruments
of the Corporation, and shall have the power to delegate any portion of his authority
under these By-laws to any other officer of the Corporation. During the absence or disability of the
President, the Chairman of the Board of Directors shall exercise all the powers
and discharge all the duties of the President.
The Chairman of the Board of Directors shall also
7
perform
such other duties and may exercise such other powers as from time to time may
be assigned to him by these By-laws or by the Board of Directors.
SECTION 5.
Vice Chairmen of the Board
of Directors.
The Vice
Chairman of the Board of Directors or Vice Chairmen of the Board of Directors,
if there is more than one (in the order designated by the Board of Directors),
shall perform such duties and may exercise such powers as from time to time may
be assigned to him by the Board of Directors or the Chairman of the Board of
Directors.
SECTION 6.
President.
The President shall perform such
duties and have such powers as the Board of Directors or the Chairman of the
Board may from time to time prescribe.
In the absence or disability of the Chairman of the Board of Directors,
or if there be none, the President shall preside at all meetings of the
stockholders and the Board of Directors.
If there be no Chairman of the Board of Directors, the President shall
be the Chief Executive Officer of the Corporation. The President shall also perform such other
duties and may exercise such other powers as from time to time may be assigned
to him by these By-laws, by the Board of Directors or by the Chairman of the
Board of Directors.
SECTION 7.
Senior Operating
Officer.
The Senior Operating
Officer shall perform such duties and have such powers as are prescribed for
Executive Vice Presidents and Vice Presidents under these By-laws and under any
resolution of the Board of Directors and shall perform such additional duties
and have such additional powers as the Board of Directors or the Chairman of
the Board of Directors may from time to time prescribe. The Senior Operating Officer shall also
perform such other duties and may exercise such other powers as from time to
time may be assigned to him by these By-laws, by the Board of Directors, or by
the Chairman of the Board of Directors.
SECTION 8.
Executive Vice Presidents
and Vice Presidents.
At the
request of the President or in his absence or in the event of his inability or
refusal to act (and if there be no Chairman of the Board of Directors), the
Executive Vice Presidents and Vice Presidents (in the order designated by the
Board of Directors) shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions
upon the President. Each Vice President
shall perform such other duties and have such other powers as the Board of
Directors or the Chairman of the Board of Directors from time to time may
prescribe. If there be no Chairman of
the Board of Directors and no Vice President, the Board of Directors shall
designate the officer of the Corporation who, in the absence of the President
or in the event of the inability or refusal of the President to act, shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President.
SECTION 9.
Secretary.
The Secretary shall attend all
meetings of the Board of Directors and all meetings of stockholders and record
all the proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees of the
Board of Directors when required. The
Secretary shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors or the
Chairman of the Board of Directors, under whose supervision he shall be. If the Secretary shall be unable or shall
refuse to cause to be given notice of all meetings of the stockholders and special
meetings of the Board of Directors, and if there be no Assistant Secretary,
then either the Board of Directors or the President may choose another officer
to cause such notice to be given. The
Secretary shall have custody of the seal of the Corporation and the Secretary
or any Assistant Secretary, if there be any, shall have authority to affix the
same to any instrument requiring it, and when so affixed, it may be attested by
the signature of the Secretary or by the signature of any such Assistant
Secretary. The Board of Directors may give
general authority to any other officer to affix the seal of the Corporation and
to attest the affixing by his signature.
The Secretary shall see that all books, reports, statements,
certificates and other documents and records required by law to be kept or
filed are properly kept or filed, as the case may be.
SECTION 10.
Treasurer.
Subject to the direction of the
Chief Financial Officer, the Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated
8
by
the Board of Directors. The Treasurer
shall disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the Chairman of the Board and the Board of Directors, at its regular meetings,
or when the Board of Directors so requires, an account of all his transactions
as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the
Treasurer shall give the Corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
SECTION 11.
Assistant
Secretaries.
Except as may be
otherwise provided in these By-laws, Assistant Secretaries, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the Chairman of the Board of
Directors, the President, any Vice President, if there be any, or the
Secretary, and in the absence of the Secretary or in the event of his
disability or refusal to act, shall perform the duties of the Secretary, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Secretary.
SECTION 12.
Assistant Treasurers.
Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the Chairman of the Board of
Directors, the President, any Vice President, if there be any, or the
Treasurer, and in the absence of the Treasurer or in the event of his
disability or refusal to act, shall perform the duties of the Treasurer, and
when so acting, shall have all the powers of and be subject to all the restrictions
upon the Treasurer. If required by the
Board of Directors, an Assistant Treasurer shall give the Corporation a bond in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of his office and for
the restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the Corporation.
SECTION 13.
Other Officers.
Such other officers as the Board
of Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any
other officer of the Corporation the power to choose such other officers and to
prescribe their respective duties and powers.
SECTION 14.
Officers of
Divisions.
The officers of
divisions of the Corporation shall perform such duties and may exercise such
powers as the Chairman of the Board may from time to time prescribe.
ARTICLE V
STOCK
SECTION 1.
Uncertificated
Shares.
Effective April 25,
2003, the shares of Common Stock of the Corporation shall be
uncertificated. Notwithstanding that the
shares of Common Stock of the corporation shall be uncertificated, every holder
of stock of any class or series in the Corporation shall be entitled to have a
certificate signed by, or in the name of the Corporation (i) by the
Chairman or Vice Chairman of the Board of Directors, or the President, an
Executive Vice President or a Vice President and (ii) by the Treasurer or
an Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation, representing the number of shares registered in certificate form.
SECTION 2.
Signatures.
Where a certificate is
countersigned by (i) a transfer agent other than the Corporation or its
employee, or (ii) a registrar other than the Corporation or its employee,
any other signature on the certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
9
SECTION 3.
Lost, Stolen
or
Destroyed
Certificates.
The Board of
Directors may direct a new certificate to be issued in accordance with Section 1
of this Article V in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When
authorizing such issue of a new certificate, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate, or his legal
representative, to advertise the same in such manner as the Board of Directors
shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
SECTION 4.
Transfers.
Stock of the Corporation shall be
transferable in the manner prescribed by law and in these By-laws. Transfers of stock shall be made on the books
of the Corporation (i) in the case of uncertificated shares, only by the
person named in the stock register of the Corporation, by an attorney lawfully
constituted in writing by such person or by any other representative of such person
acceptable to the Corporation, and (ii) in the case of shares registered
in certificate form, only by the person named in the certificate, by an
attorney lawfully constituted in writing by such person or by any other
representative of such person acceptable to the Corporation and upon the
surrender of the certificate therefor, which shall be cancelled before a new
certificate shall be issued in accordance with Section 1 of this Article V.
SECTION 5.
Record Date.
In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than sixty days nor less than ten days
before the date of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting, provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
SECTION 6.
Beneficial Owners.
The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by law.
ARTICLE VI
NOTICES
SECTION 1.
Notices.
Whenever
written notice is required by law, the Certificate of Incorporation or these
By-laws, to be given to any director, member of a committee or stockholder,
such notice may be given by mail, addressed to such director, member of a
committee or stockholder, at his address as it appears on the records of the
Corporation, with postage thereon prepaid, and such notice shall be deemed to
be given at the time when the same shall be deposited in the United States
mail. Written notice may also be given
personally or by telegram, telex or cable or by facsimile or other electronic
transmission. Notice given by any such
means shall be deemed to have been given at the time delivered, sent or
transmitted.
SECTION 2.
Waivers of Notice.
Whenever any notice is required by
law, the Certificate of Incorporation or these By-laws, to be given to any
director, member of a committee or stockholder, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent thereto.
10
ARTICLE VII
GENERAL PROVISIONS
SECTION 1.
Dividends.
Dividends upon the capital stock
of the Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors at any regular
or special meeting, and may be paid in cash, in property, or in shares of the
capital stock. Before payment of any
dividend, there may be set aside out of any funds of the Corporation available
for dividends such sum or sums as the Board of Directors from time to time, in
its absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve.
SECTION 2.
Disbursements.
All checks or demands for money
and notes of the Corporation shall be signed by such officer or officers or
such other person or persons as the Board of Directors may from time to time
designate.
SECTION 3.
Fiscal Year.
The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
SECTION 4.
Corporate Seal.
The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
“Corporate Seal, Delaware”. The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
SECTION 5.
Stock Held by
Corporation.
Powers of
attorney, proxies, waivers of meeting, consents and other instruments relating
to securities owned by the Corporation may be executed in the name and on
behalf of the Corporation by the Chairman of the Board, or such other officer
or officers as the Board of Directors or the Chairman of the Board may
designate, and any such officer shall have full power and authority on behalf
of the Corporation, in person or by proxy, to attend, and to act and vote at,
any meeting of stockholders of any corporation in which the Corporation may
hold securities, and at any such meeting shall possess, and may exercise, any
and all of the rights and powers incident to the ownership of such securities.
ARTICLE VIII
INDEMNIFICATION
SECTION 1.
Power to Indemnify in
Actions, Suits or Proceedings other than Those by or in the Right of the
Corporation.
Subject to
Section 3
of this
Article VIII,
the
Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the Corporation) by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere
or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 2.
Power to Indemnify in
Actions, Suits or Proceedings by or in the Right of the Corporation.
Subject to
Section 3
of this
Article VIII,
the
Corporation shall indemnify any person who was
11
or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys’ fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation; except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.
SECTION 3.
Authorization of
Indemnification.
Any
indemnification under this
Article VIII
(unless
ordered by a court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in
Section 1
or
Section 2
of this
Article VIII,
as the case may be. Such determination shall be made (i) by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or (ii) if such a
quorum is not obtainable, or, even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or (iii) by
the stockholders. To the extent,
however, that a director, officer, employee or agent of the Corporation has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in
Section 1
or
Section 2
of this
Article VIII,
or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys’
fees) actually and reasonably incurred by him in connection therewith, without
the necessity of authorization in the specific case.
SECTION 4.
Good Faith Defined.
For purposes of any determination
under
Section 3
of this
Article VIII,
a person shall be deemed to have acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, or, with respect to any criminal action
or proceeding, to have had no reasonable cause to believe his conduct was
unlawful, if his action is based on the records or books of account of the
Corporation or another enterprise, or on information, opinions, reports or
statements supplied to him by the officers or employees of the Corporation or
another enterprise in the course of their duties, or by a committee of the
Board of Directors of the Corporation, or on the advice of legal counsel for
the Corporation or another enterprise or on information or records given or
reports or statements made to the Corporation or another enterprise by an
independent certified public accountant, by an appraiser or by another person
selected with reasonable care by or on behalf of the Corporation or another
enterprise as to matters such person reasonably believes are within such
certified public accountant’s, appraiser’s, or other person’s professional or
expert competence. The term “another
enterprise” as used in this
Section 4
shall
mean any other corporation or any partnership, joint venture, trust or other
enterprise of which such person is or was serving at the request of the
Corporation as a director, officer, employee or agent. The provisions of this
Section 4
shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the applicable
standard of conduct set forth in
Sections 1
or
2
of this
Article VIII
,
as the case may be.
SECTION 5.
Indemnification by a
Court.
Notwithstanding any
contrary determination in the specific case under
Section 3
of this
Article VIII
, and notwithstanding
the absence of any determination thereunder, any director, officer, employee or
agent may apply to any court of competent jurisdiction in the State of Delaware
for indemnification to the extent otherwise permissible under
Sections 1
and
2
of this
Article VIII.
The basis of such indemnification by a court shall be a determination by
such court that indemnification of the director, officer, employee or agent is
proper in the circumstances because he has met the applicable standards of
conduct set forth in
Sections 1
or
2
of this
Article VIII
,
as the case may be.
12
Notice
of any application for indemnification pursuant to this
Section 5
shall be given to the Corporation promptly upon the filing of such application.
SECTION 6.
Expenses Payable in
Advance.
Expenses incurred in
defending or investigating a threatened or pending action, suit or proceeding
may be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
the director, officer, employee or agent to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this
Article VIII.
SECTION 7.
Non-exclusivity and
Survival of Indemnification.
The
indemnification and advancement of expenses provided by this
Article VIII
shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any By-law, agreement, contract, vote of stockholders or
disinterested directors or pursuant to the direction (howsoever embodied) of
any court of competent jurisdiction or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, it being the policy of the Corporation that indemnification of the
persons specified in
Sections 1
and
2
of this
Article VIII
shall be made to the fullest extent permitted by law. The provisions of this
Article VIII
shall not be deemed to preclude the indemnification of any person who is not
specified in
Sections 1
or
2
of this
Article VIII
but
whom the Corporation has the power or obligation to indemnify under the
provisions of the General Corporation Law of the State of Delaware, or otherwise. The indemnification and advancement of
expenses provided by this
Article VIII
shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such person.
SECTION 8.
Insurance.
The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power or the obligation to indemnify him against such liability under the
provisions of this
Article VIII.
SECTION 9.
Meaning of “Corporation”
for Purposes of Article VIII.
For
purposes of this
Article VIII,
references to “the
Corporation” shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
Article VIII
with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if
its separate existence had continued.
13
Exhibit 10.1
OCCIDENTAL PETROLEUM CORPORATION
2005 LONG-TERM INCENTIVE PLAN
(AS AMENDED THROUGH OCTOBER 13,
2010)
1. PURPOSE
The
purposes of this Plan are (i) to furnish a significant incentive to the
employees and non-employee Directors of the Company and its subsidiaries by
making available to them the benefits of increased ownership of Shares (ii) to
promote the alignment of the interests of employees and non-employee Directors
on the one hand and stockholders on the other hand and (iii) to assist in the
recruitment and retention of employees and non-employee Directors.
2. DEFINITIONS
“Board”
means the Board of Directors of the Company.
“Business
Combination”
means a merger, consolidation, or other
reorganization, with or into, or the sale of all or substantially all of the
Company’s business and/or assets as an entirety to, one or more entities that
are not subsidiaries or other affiliates of the Company.
“Change
in Control”
means the occurrence of any of the following
events:
(a) Approval by the stockholders of the Company
of the dissolution or liquidation of the Company, other than in the context of
a transaction that does not constitute a Change in Control under clause (b)
below;
(b) Consummation of a Business Combination,
unless
(1) as a result of the Business Combination, more than 50 percent of the
outstanding voting power of the Successor Entity immediately after the
reorganization is, or will be, owned, directly or indirectly, by persons who
were holders of the Company’s voting securities immediately before the Business
Combination; (2) no “
person
” (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act),
excluding the Successor Entity or an Excluded Person, beneficially owns,
directly or indirectly, more than 20 percent of the outstanding shares or the
combined voting power of the outstanding voting securities of the Successor
Entity, after giving effect to the Business Combination, except to the extent
that such ownership existed prior to the Business Combination; and (3) at least
50 percent of the members of the board of directors of the entity resulting
from the Business Combination were Directors at the time of the execution of
the initial agreement or of the action of the Board approving the Business
Combination;
(c) Any
“
person
”
(as such term is used in Sections 13(d) and 14(d) of the
Exchange Act, but excluding any Excluded Person) is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20 percent or more of the
combined voting power of the Company’s then outstanding voting securities,
other than as a result of (1) an acquisition directly from the Company; (2) an
acquisition by the Company; or (3) an acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or a Successor
Entity; or
(d) During any period not longer than two
consecutive years, individuals who at the beginning of such period constituted
the Board cease to constitute at least a majority thereof, unless the election,
or the nomination for election by the Company’s stockholders, of each new
Director was approved by a vote of at least two-thirds (2/3) of the Directors
then still in office who were Directors at the beginning of such period
(including for these purposes, new members whose election or nomination was so
approved), but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of Directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person
other than the Board.
“Code”
means the
Internal Revenue Code of 1986, as amended from time to time.
“Committee”
means the Executive Compensation and Human Resources Committee of the
Board or its successor, which shall be composed of not less than two members of
the Board, each of whom shall be a “non-employee director” within the meaning
of Rule 16b-3 and an “outside director” within the meaning of Section 162(m).
“Company”
means Occidental Petroleum Corporation, a Delaware corporation.
“Director”
means a member of the Board.
“Disability”
means
permanent and total disability as defined in Section 22(e)(3) of the Code.
1
“Effective
Date”
means May 6, 2005, or such later date as this Plan is approved by the
stockholders of the Company.
“Eligible
Person”
means any person who is an officer or employee of
the Company or any of its subsidiaries and any person who is a non-employee
Director; provided, however that a non-employee Director shall not be an
Eligible Person for purposes of awarding of ISOs.
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended from time to
time.
“Excluded
Person”
means any employee benefit plan of the Company and
any trustee or other fiduciary holding securities under a Company employee
benefit plan or any person described in and satisfying the conditions of Rule
13d-1(b)(i) of the Exchange Act.
“Fair
Market Value”
means the last reported sale price of a share of
Common Share on the New York Stock Exchange — Composite Transactions on the
relevant date or, if there are no reported sales on such date, then the last
reported sales price on the next preceding day on which such a sale is
transacted.
“ISO”
means an
incentive stock option qualified under Section 422 of the Code.
“Performance-Based
Award”
means an award whose grant, vesting, exercisability or payment depends
upon on any one or more of the Performance Objectives, in each case relative to
Performance Goals, on an absolute or relative basis (including comparisons to
peer companies) or ratio with other Performance Objectives, either as reported
currency or constant currency, pre-tax or after-tax, before or after special
charges, for the Company on a consolidated basis or for one or more
subsidiaries, segments, divisions or business units, or any combination of the
foregoing. The applicable performance
period may range from one to seven years.
“Performance
Goal”
means a preestablished targeted level or levels of any one or more
Performance Objectives.
“Performance
Objectives”
mean any one or more of the following business
criteria: A/R day sales outstanding, A/R to sales, debt, debt to debt plus
stockholder equity, debt to EBIT or EBITDA, EBIT, EBITDA, EPS, EVA, expense
reduction, interest coverage, inventory to sales, inventory turns, net income,
operating cash flow, pre-tax margin, return on assets, return on capital employed,
return on equity, sales, stock price appreciation, and total stockholder return
(TSR), each as defined further in Appendix A.
These terms are used as applied under generally accepted accounting
principles (if applicable) and in the Company’s financial reporting.
“Plan”
means this
Occidental Petroleum Corporation 2005 Long-Term Incentive Plan, as amended from
time to time.
“Qualifying
Options”
mean options and stock appreciation rights granted
with an exercise price not less than Fair Market Value on the date of
grant. Qualifying Options are
Performance-Based Awards.
“Rule
16b-3”
means Rule 16b-3 under Section 16 of the Exchange Act.
“Section
162(m)”
means Section 162(m) of the Code and the applicable
regulations and interpretations thereunder.
“Section
162(m) Award”
means a Performance-Based Award intended to satisfy
the requirements for “performance-based compensation” within the meaning of
Section 162(m).
“Share
Limit”
means the maximum number of Shares, as adjusted, that may be delivered
pursuant to all awards granted under this Plan.
“Shares”
mean the Company’s Common Stock, par value $0.20 per share.
“Successor
Entity”
means the surviving or resulting entity or a parent
thereof of a Business Combination.
3. SHARES SUBJECT TO THE
PLAN
3.1 AGGREGATE SHARE
LIMIT -
Subject to adjustment as
provided in or pursuant to this Section 3 or Section 7, a total of sixty-six
million (66,000,000) Shares shall be authorized for issuance pursuant to awards
granted under this Plan. Any Shares
issued in connection with awards other than options and stock appreciation
rights shall be counted against the limit described above as three (3) Shares
for every one Share issued in connection with such award or by which the award
is valued by reference as three (3) Shares.
2
3.2 INDIVIDUAL
LIMIT -
No individual shall be
granted options, stock appreciation rights or other awards in any 36-month
period covering more than eight million (8,000,000) Shares, and in the case of
ISOs granted to any individual who owns more than ten percent of the
outstanding stock of the Company within the meaning of Section 422 of the Code
the maximum term may not exceed five (5) years and the minimum exercise price
may not be less than 110 percent of Fair Market Value on the date of grant.
3.3 REISSUE OF
AWARDS AND SHARES -
Awards payable in cash or
payable in cash or Shares, including restricted shares, that are forfeited,
cancelled, or for any reason do not vest under this Plan, and Shares that are
subject to awards that expire or for any reason are terminated, cancelled or
fail to vest shall be available for subsequent awards under this Plan. If an award under this Plan is or may be
settled only in cash, such award need not be counted against any of the share
limits under this Section 3, except as may be required to preserve the status
of an award as “performance-based compensation” under Section 162(m). Shares subject to options or stock
appreciation rights that are exercised shall not be available for subsequent
awards. The following transactions involving
Shares will not result in additional Shares becoming available for subsequent
awards under this Plan: (i) Shares
tendered in payment of an option; (ii) Shares withheld for taxes; and (iii)
Shares repurchased by the Company using option proceeds.
4. PLAN ADMINISTRATION
This
Plan shall be administered by the Committee.
4.1
POWERS OF THE COMMITTEE -
Subject to the express
provisions of this Plan, the Committee shall be authorized and empowered to do
all things necessary or desirable in connection with the authorization of
awards and the administration of this Plan within its delegated authority,
including, without limitation, the authority to:
(a) adopt, amend and rescind
rules, regulations and procedures relating to this Plan and its administration
or the awards granted under this Plan and determine the forms of awards;
(b) determine who is an
Eligible Person and to which Eligible Persons, if any, awards will be granted
under this Plan;
(c) grant awards to Eligible
Persons and determine the terms and conditions of such awards, including but
not limited to the number and value of Shares issuable pursuant thereto, the
times (subject to Section 5.5) at which and conditions upon which awards become
exercisable or vest or shall expire or terminate, and (subject to applicable
law) the consideration, if any, to be paid upon receipt, exercise or vesting of
awards;
(d) determine the date of
grant of an award, which may be a designated date after but not before the date
of the Committee’s action;
(e) determine whether, and the
extent to which, adjustments are required pursuant to Section 7 hereof;
(f) interpret and construe
this Plan and the terms and conditions of any award granted hereunder, whether
before or after the date set forth in Section 5;
(g) determine the
circumstances under which, consistent with the provisions of Section 8.2, any
outstanding award may be amended and make any amendments thereto that the
Committee determines are necessary or appropriate; and
(h) acquire or settle rights
under options, stock appreciation rights or other awards in cash, stock of
equivalent value, or other consideration.
All
authority granted herein (except as provided in Section 6) shall remain in
effect so long as any award remains outstanding under this Plan.
4.2
SPECIFIC COMMITTEE RESPONSIBILITY AND DISCRETION REGARDING AWARDS -
Subject to the express provisions of this Plan, the Committee, in its
sole and absolute discretion, shall determine all of the terms and conditions
of each award granted under this Plan, which terms and conditions may include,
subject to such limitations as the Committee may from time to time impose,
among other things, provisions that:
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(a) permit the recipient of
such award to pay the purchase price of the Shares or other property issuable
pursuant to such award, or any applicable tax withholding obligation upon such
issuance or in respect of such award or Shares, in whole or in part, by any one
or more of the following:
(i) cash, cash equivalent, or
electronic funds transfer,
(ii) the delivery of previously
owned shares of capital stock of the Company (including shares acquired as or
pursuant to awards) or other property,
(iii) a reduction in the amount
of Shares or other property otherwise issuable pursuant to such award,
(iv) a cashless exercise, or
(v) any other legal
consideration the Committee deems appropriate;
(b) qualify such award as an
ISO;
(c) accelerate the receipt of
benefits pursuant to an award or adjust the exercisability, term (subject to
other limits) or vesting schedule of any or all outstanding awards, adjust the
number of Shares subject to any award, adjust the price of any or all
outstanding awards or otherwise change previously imposed terms and conditions,
pursuant to a termination of employment or an event referenced in Section 7 (in
which case the Committee’s discretion shall be exercised in a manner consistent
with Section 7) or in other circumstances or upon the occurrence of other
events as deemed appropriate by the Committee, by amendment of an outstanding
award, by substitution of an outstanding award, by waiver or by other legally
valid means (which may result, among other changes, in a greater or lesser
number of shares subject to the award, a shorter or longer vesting or exercise
period, or, except as provided below, an exercise or purchase price that is
higher or lower than the original or prior award), in each case subject to
Sections 3 and 8.2; provided, however, that in no case (other than an
adjustment contemplated by Section 7.2) shall the exercise price of any option or
stock appreciation right be reduced by an amendment to the award or a
cancellation and re-grant of the award to effect a repricing of the award to a
price below the Fair Market Value of the underlying Shares on the grant date of
the original option or stock appreciation right unless specific stockholder
consent is obtained;
(d) authorize (subject to
Sections 7, 8, and 10) the conversion, succession or substitution of one or
more outstanding awards upon the occurrence of an event of the type described
in Section 7 or in other circumstances or upon the occurrence of other events
as deemed appropriate by the Committee; and
(e) determine the value of and
acquire or otherwise settle awards upon termination of employment, upon such
terms as the Committee (subject to Sections 7, 8 and 10) deems
appropriate.
4.3
DELEGATION -
Subject to Section 4.5, the Board may
delegate different levels of authority to different committees with
administrative and grant authority under this Plan, provided that each
designated committee granting any awards hereunder shall consist exclusively of
a member or members of the Board. A
majority of the members of the acting committee shall constitute a quorum. The vote of a majority of the members present
assuming the presence of a quorum or the unanimous written consent of the
Committee shall constitute action by the committee. The Committee may delegate authority to grant
awards under this Plan for new employees to an officer of the Company who is
also a director and may delegate ministerial, non-discretionary functions to
individuals who are officers or employees of the Company or a subsidiary or to
third parties.
4.4
BIFURCATION -
Notwithstanding anything to
the contrary in this Plan, the provisions of this Plan may at any time be bifurcated
by the Board or the Committee in any manner so that provisions of any award
agreement (or this Plan) intended or required in order to satisfy the
applicable requirements of Rule 16b-3, Section 162(m) or other applicable law,
to the extent permitted thereby, are applicable only to persons subject to
those provisions and to those awards to those persons intended to satisfy the
requirements of the applicable legal restriction.
4.5
AWARDS TO NON-EMPLOYEE DIRECTORS -
Notwithstanding any
provision in this Plan to the contrary and without being subject to management
discretion, the Board, acting through the non-employee Directors only, shall
have the authority, in its sole and absolute discretion, to select non-employee
Directors to receive awards other than ISOs under this Plan. The Board, acting through the non-employee
Directors only shall set the terms of any such awards in its sole and absolute
discretion, and the Board, acting through the non-employee
4
Directors
only, shall be responsible for administering and construing such awards in
substantially the same manner that the Committee administers and construes
awards to other Eligible Persons.
5. AWARDS
5.1 TYPE AND FORM OF AWARDS
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All awards shall be evidenced in writing (including
electronic form), substantially in the form approved by the Committee. The types of awards that the Committee may
grant include, but are not limited to, any of the following, on an immediate or
deferred basis, either singly, or in tandem or in combination with or in
substitution for, other awards of the same or another type: (i) Shares, (ii) options (ISOs or
nonqualified stock options), stock appreciation rights (including limited stock
appreciation rights), restricted stock (which shall vest over a period of not
less than three years), stock units, or similar rights to purchase or acquire
shares, whether at a fixed or variable price or ratio related to the Shares,
upon the passage of time, the occurrence of one or more events, or the
satisfaction of Performance Goals or other conditions, or any combination
thereof, (iii) any similar securities with a value derived from the value of or
related to the Shares or other securities of the Company and/or returns
thereon, or (iv) cash. Share-based
awards may include (without limitation) stock options, stock purchase rights,
stock bonuses, stock units, stock appreciation rights, limited stock
appreciation rights, phantom stock, dividend equivalents (independently or in
tandem with any form of stock grant), dividend rights (independently or in
tandem with any form of stock grant), Shares, any of which may be payable in
Shares or cash, and may consist of one or more of such features in any
combination.
5.2 PERFORMANCE-BASED AWARDS
-
Any of the types of awards listed in Section 5.1 may
be granted as Performance-Based Awards.
5.2.1 Section 162(m)
Awards.
The Committee has discretion to determine if any
Performance-Based Award is intended to be a Section 162(m) Award. The specific Performance Goals in respect of
Section 162(m) Awards, other than Qualifying Options, must be approved by the
Committee in advance of any applicable deadlines under Section 162(m) and while
the performance relating to those goals remains substantially uncertain within
the meaning thereof. The persons
eligible for Section 162(m) Awards shall be executive officers of the Company
and its subsidiaries and, in the discretion of the Committee, other employees
of the Company or its subsidiaries who are designated by the Committee to
receive a Section 162(m) Award because they may be executive officers of the
Company or its subsidiaries by the time their awards are exercised, vested or
paid. Except as otherwise permitted
under Section 162(m), before any Section 162(m) Award is paid, the Committee
must certify that the Performance Goal and any other material terms of the
Section 162(m) Award were in fact satisfied.
5.2.2 Reservation of
Discretion -
The Committee shall have discretion to determine the
conditions, restrictions or other limitations, in accordance with the terms of
this Plan and, in the case of Section 162(m) Awards, the limitations of Section
162(m), on the payment of individual Performance-Based Awards under this
Section 5.2.
5.2.3 Adjustments -
Performance Goals or other
features of an award under this Section 5.2 may be (i) adjusted to reflect a
change in corporate capitalization, a corporate transaction (such as a
reorganization, combination, separation, merger, acquisition, or any
combination of the foregoing) or a complete or partial corporate liquidation,
or (ii) calculated either without regard for or to reflect any change in
accounting policies or practices affecting the Company and/or the Performance
Objectives or Performance Goals, or (iii) adjusted for any other circumstances
or event, or (iv) any combination of (i) through (iii), but only to the extent
in each case that such adjustment or determination in respect of Section 162(m)
Awards would be consistent with the requirements of Section 162(m) to qualify
as performance-based compensation.
5.3 CONSIDERATION FOR SHARES
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Shares may be issued pursuant to an award for any lawful consideration
as determined by the Committee, including, without limitation, services
rendered by the recipient of such award, but shall not be issued for less than
the minimum lawful consideration. Awards
may be payable in cash, stock or other consideration or any combination
thereof, as the Committee shall designate in or (except as required by Section
5.2) by amendment to the terms and conditions governing such award.
5.4 LIMITED RIGHTS -
Except as
otherwise expressly authorized by the Committee or this Plan or in the
applicable award terms and conditions, a participant will not be entitled to
any privilege of stock ownership as to
5
any
Shares not actually delivered to and held of record by the participant. No adjustment will be made for dividends or
other rights as a stockholder for which a record date is prior to such date of
delivery.
5.5 OPTION/STOCK APPRECIATION
RIGHT PRICING AND TERM LIMITS -
The purchase price per share
of the Shares covered by any option or the base price of any stock appreciation
right shall be determined by the Committee at the time of the grant, but shall
not be less than 100 percent of the Fair Market Value of the Shares on the date
of grant. Any option, stock appreciation
right, warrant or similar right shall expire and any other award shall vest not
more than 10 years after the date of grant.
An award may be converted or convertible, notwithstanding the foregoing
limits, into or payable in, Shares or another award that otherwise satisfies
the requirements of this Plan.
5.6 TRANSFER RESTRICTIONS
-
Unless otherwise expressly provided in or permitted
by this Section 5.6, by applicable law or by the award terms and conditions (i)
all awards are nontransferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance or charge;
(ii) awards shall be exercised only by the holder; and (iii) amounts payable or
shares issuable pursuant to an award shall be delivered only to (or for the
account of) the holder.
5.6.1
Exceptions by Committee Action -
The Committee, in its
sole discretion, may permit an award to be transferred for estate and/or tax
planning purposes and on a basis consistent with the Company’s lawful issue of
securities and the incentive purposes of the award and this Plan.
Notwithstanding the foregoing, awards intended as ISOs or restricted stock
awards for purposes of the Code shall be subject to any and all additional
transfer restrictions necessary to preserve their status as ISOs or restricted
shares, as the case may be, under the Code.
5.6.2
Exclusions -
The exercise and transfer restrictions in
this Section 5.6 shall not apply to:
(a) transfers to the
Company,
(b) the designation
of a beneficiary to receive benefits in the event of the participant’s death
or, if the participant has died, transfers to or exercise by the participant’s
beneficiary, or, in the absence of a validly designated beneficiary, transfers
by will or the laws of descent and distribution,
(c) transfers
pursuant to a domestic relations order (if approved or ratified by the
Committee), if (in the case of ISOs) permitted by the Code,
(d) if the
participant has suffered a Disability, permitted transfers to or exercises on
behalf of the holder by his or her legal representative, or
(e) the
authorization by the Committee of “cashless exercise” procedures with third
parties who finance or who otherwise facilitate the exercise of awards
consistent with applicable laws and the express authorization of the Committee.
5.7 TAX WITHHOLDING -
Upon any
exercise, vesting, or payment of any award, the Company shall:
(a) require the recipient (or his or
her heirs, personal representatives or beneficiaries, as the case may be) to
pay or provide for payment of the amount of any taxes which the Company or any
subsidiary may be required to withhold with respect to such transaction; or
(b) deduct from any amount payable in
cash the amount of any taxes that the Company or any subsidiary may be required
to withhold with respect to such cash amount.
5.8 POSSIBLE SHARE OFFSET
-
In any case where a tax is required to be withheld
in connection with the delivery of Shares under this Plan, the Committee may
require or may permit the holder the right to offset, pursuant to such rules
and subject to such conditions as the Committee may establish, the number of
shares to be delivered by (or otherwise reacquire) the appropriate number of
shares valued at their then Fair Market Value, to satisfy the minimum statutory
withholding taxes with respect thereto.
5.9 CASH AWARDS -
The Committee
shall have the express authority to pay awards in cash under this Plan, whether
in lieu of, in addition to or as part of another award.
5.10
TERMINATION
OF EMPLOYMENT OR SERVICE -
If an Eligible Person’s
employment with or service to the Company or to any parent or subsidiary
terminates for any reason, his or her outstanding awards may
6
thereafter
be exercised (if at all) to the extent provided in the agreement evidencing
such award, or as otherwise determined by the Committee.
6. TERM OF PLAN
No
award shall be granted under this Plan after the tenth anniversary of the
Effective Date of this Plan. After that
date, this Plan shall continue in effect as to then outstanding awards. Any then outstanding award may be amended
thereafter in any manner that would have been permitted earlier, except that no
such amendment shall increase the number of Shares subject to, comprising or
referenced in the award or reduce the exercise or base price of an option or
stock appreciation right or permit cash payments in an amount that exceeds the
limits of Section 3 (as adjusted pursuant to Section 7.2).
7. ADJUSTMENTS; CHANGE IN
CONTROL
7.1 CHANGE IN CONTROL;
ACCELERATION AND TERMINATION OF AWARDS -
Unless prior to a Change in
Control, the Committee determines that, upon its occurrence, benefits under any
or all awards will not accelerate or determines that only certain or limited
benefits under any or all awards will be accelerated and the extent to which
they will be accelerated, or establishes a different time in respect of such
Change in Control for such acceleration, then upon the occurrence of a Change
in Control:
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(a)
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each
option and stock appreciation right shall become immediately exercisable,
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(b)
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restricted
stock shall immediately vest free of restrictions,
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(c)
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each
award under Section 5.2 shall become payable to the participant,
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(d)
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the
number of Shares covered by each stock unit account shall be issued to the
participant, and
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(e)
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any
other rights of a participant under any other award will be accelerated to
give the participant the benefit intended under any such award.
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The
Committee may override the limitations on acceleration in this Section 7.1 by
express provision in the award agreement and may accord any Eligible Person a
right to refuse any acceleration, whether pursuant to the award agreement or
otherwise, in such circumstances as the Committee may approve. Any acceleration
of awards shall comply with applicable legal and regulatory requirements.
Without limiting the generality of the foregoing, the Committee may deem an
acceleration to occur immediately prior to or up to 30 days before the
applicable event and/or reinstate the original terms of an award if an event
giving rise to an acceleration does not occur.
If
any option or other right to acquire Shares under this Plan has been fully
accelerated as required or permitted by this Plan but is not exercised prior to
(i) a dissolution of the Company, or (ii) an event described in this Section
7.1 that the Company does not survive, or (iii) the consummation of an event
described in Section 7.2 involving a Change in Control approved by the Board,
such option or right will terminate, subject to any provision that has been
expressly made by the Committee or the Board through a plan of reorganization
approved by the Board or otherwise for the survival, substitution, assumption,
exchange or other settlement of such option or right.
7.2
ADJUSTMENTS
-
The following provisions will apply if any
extraordinary dividend or other extraordinary distribution occurs in respect of
the Shares (whether in the form of cash, Shares, other securities, or other
property), or any reclassification, recapitalization, stock split (including a
stock split in the form of a stock dividend), reverse stock split,
reorganization, merger, combination, consolidation, split-up, spin-off,
repurchase, or exchange of Shares or other securities of the Company, or any similar,
unusual or extraordinary corporate transaction (or event in respect of the
Shares) or a sale of substantially all the assets of the Company as an entirety
occurs. The Committee will, in such manner and to such extent (if any) as it
deems appropriate and equitable:
(a) proportionately adjust any
or all of (i) the number and type of Shares (or other securities) that
thereafter may be made the subject of awards (including the specific maxima and
numbers of shares set forth elsewhere in this Plan), (ii) the number, amount
and type of shares (or other securities or property) subject to any or all
outstanding awards, (iii) the grant, purchase, or exercise price of any or all
outstanding awards, (iv) the securities, cash or other property deliverable
upon exercise of any
7
outstanding awards, or (v) the Performance Goals or Performance
Objectives appropriate to any outstanding awards, or
(b) in the case of an
extraordinary dividend or other distribution, recapitalization,
reclassification, merger, reorganization, consolidation, combination, sale of
assets, split-up, exchange, or spin-off, make provision for a cash payment or
for the substitution or exchange of any or all outstanding awards or the cash,
securities or property deliverable to the holder of any or all outstanding
awards based upon the distribution or consideration payable to holders of the
Shares of the Company upon or in respect of such event.
In
each case, with respect to awards of ISOs, no such adjustment will be made that
would cause this Plan to violate Section 422 or 424 of the Code or any
successor provisions without the written consent of holders materially
adversely affected thereby. In any of such events, the Committee may take such
action sufficiently prior to such event if necessary or deemed appropriate to
permit the participant to realize the benefits intended to be conveyed with
respect to the underlying shares in the same manner as is available to
stockholders generally.
8. PLAN AMENDMENT AND
TERMINATION
8.1 AUTHORITY OF THE BOARD -
Subject to Sections 8.2 and 8.3 and New York Stock Exchange Rules
applicable to companies listed on such Exchange, the Board may amend or
terminate this Plan at any time and in any manner.
8.2 RESTRICTIONS -
No amendment or
termination of this Plan or change in or affecting any outstanding award shall
deprive in any material respect the holder, without the consent of the holder,
of any of his or her rights or benefits under or with respect to the award.
Adjustments contemplated by Section 7 shall not be deemed to constitute a
change requiring such consent.
8.3 STOCKHOLDER APPROVAL
-
Stockholder approval shall be required for any
amendment to this Plan that would:
(a) materially increase the
benefits accruing to participants under this Plan,
(b) materially increase the
number of securities which may be issued under this Plan, or
(c) materially modify the
requirements as to eligibility for participation in this Plan.
9. LEGAL MATTERS
9.1 COMPLIANCE AND CHOICE OF
LAW; SEVERABILITY -
This Plan, the granting and
vesting of awards under this Plan and the issuance and delivery of Shares
and/or the payment of money under this Plan or under awards granted hereunder
are subject to compliance with all applicable federal and state laws, rules and
regulations and to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith. This
Plan, the awards, all documents evidencing awards and all other related documents
shall be governed by, and construed in accordance with the laws of the state of
Delaware. If any provision shall be held by a court of competent jurisdiction
to be invalid and unenforceable, the remaining provisions of this Plan shall
continue in effect.
9.2 NON-EXCLUSIVITY OF PLAN
-
Nothing in this Plan shall limit or be deemed to
limit the authority of the Board or the Committee to grant awards or authorize
any other compensation, with or without reference to the Shares, under any
other plan or authority.
9.3 NO EMPLOYMENT CONTRACT
-
Nothing contained in this Plan (or in any other
documents relating to this Plan or to any award) shall confer upon any Eligible
Person or other participant any right to continue in the employ or other
service of the Company or any subsidiary or constitute any contract or
agreement of employment or other service, nor shall interfere in any way with
the right of the Company or any subsidiary to change such person’s compensation
or other benefits or to terminate the employment of such person, with or
without cause.
10. MISCELLANEOUS
10.1 UNFUNDED PLAN -
Unless
otherwise determined by the Committee, this Plan shall be unfunded and shall
not create (or be construed to create) a trust or a separate fund or funds.
This Plan shall not establish any
8
fiduciary
relationship between the Company or any subsidiary and any participant or other
person. To the extent any person holds any rights by virtue of awards granted
under this Plan, such rights shall be no greater than the rights of an
unsecured general creditor of the Company.
10.2 AWARDS NOT COMPENSATION
-
Unless otherwise determined by the Committee,
settlements of awards received by participants under this Plan shall not be deemed
a part of a participant’s regular, recurring compensation for purposes of
calculating payments or benefits from any Company benefit plan, severance
program or severance pay law of any country.
10.3 FRACTIONAL SHARES -
The Company
shall not be required to issue any fractional Shares pursuant to this Plan. The
Committee may provide for the elimination of fractions or for the settlement
thereof in cash.
10.4 FOREIGN PARTICIPANTS
-
No award shall be made to a participant who is a
foreign national or who is employed by the Company or any subsidiary outside
the United States of America if such award would violate applicable local law.
In order to facilitate the making of an award, the Committee may provide for
such special terms for awards to participants who are foreign nationals, or who
are employed by the Company or any subsidiary outside of the United States of
America, as the Committee may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom.
Moreover, the Committee may approve such supplements to or amendments to
this Plan as it may consider necessary or appropriate for such purposes unless
stockholder approval for any such change would be required in accordance with
the provisions of Section 8.
APPENDIX A TO 2005 LONG-TERM
INCENTIVE PLAN
PERFORMANCE OBJECTIVES
The
Performance Objectives shall have the meanings set forth below, in each case as
reported in the financial statements of the Company or applicable subsidiary,
division, segment, or unit (“financial statements”).
“A/R
Day Sales Outstanding”
means trade accounts receivable (A/R)(net of
reserves) divided by latest historical day Sales.
“A/R to
Sales”
means the ratio of accounts receivable to Sales.
“Debt”
means all
accounts classified as such in the financial statements.
“Debt
to Debt plus stockholder equity”
means the ratio of Debt to
Debt plus stockholder equity.
“Debt
to EBIT or EBITDA”
means the ratio of Debt to EBIT or EBITDA.
“EBIT”
means Net
Income before interest expense and taxes, which may be adjusted for special
charges, if any.
“EBITDA”
means Net
Income before interest expense, taxes, depreciation and amortization, which may
be adjusted for special charges, if any.
“EPS”
means Net
Income divided by the weighted average number of Shares outstanding. The Shares
outstanding may be adjusted to include the dilutive effect of stock options,
restricted stock and other dilutive financial instruments as required by
generally accepted accounting principles.
“EVA”
means operating
profit after tax (OPAT) (which is defined as Net Income after tax but before
tax adjusted interest income and expense and goodwill amortization), less a
charge for the use of capital (average total capital as such term is used below
under “Return on Capital Employed”). Net Income may be adjusted for special
charges and acquisition activity costs, if any. The charge for capital is the
percentage cost of capital times the average total capital. The cost of capital
is the weighted average cost of capital as calculated for the Company.
“Expense
Reduction”
means reduction in actual expense or an improvement
in the expense to Sales ratio compared to a target or prior year actual expense
to Sales ratio, which may be adjusted for special charges, if any.
9
“Interest
Coverage”
means the ratio of EBIT or EBITDA to interest
expense. Net Income may be adjusted for special charges.
“Inventory
to Sales”
means the ratio of total inventory to Sales.
“Inventory
Turns”
means the ratio of total cost of goods sold on a historical basis to
average net inventory. This ratio may be adjusted for special charges, if any.
“Net
Income”
means the difference between total Sales plus other revenues and net
total costs and expenses, including income taxes.
“Operating
Cash Flow”
means the net cash provided by operating activities
less net cash used by operations and investing activities as shown on the
statement of cash flows. The numbers relating to the foregoing may be adjusted
for special charges, if any.
“Pre-Tax
Margin”
means the ratio of earnings before income taxes to Sales. Earnings may
be adjusted for special charges, if any.
“Return
on Assets”
means the ratio of Net Income to total average
assets including goodwill. Earnings may be adjusted for special charges and
goodwill amortization for comparative purposes.
“Return
on Capital Employed”
means the ratio of Net Income plus tax-effected
interest expense to long-term Debt plus stockholder equity.
“Return
on Equity”
means the ratio of Net Income to stockholder
equity.
“Sales”
means sales, service and rental income from third parties net of
discounts, returns and allowances.
“Stock
Price Appreciation”
means an increase, or an average annualized
increase, in the stock price or market value of the Shares of the Company after
purchase of, or the date of grant of, an award or above a specified stock
price.
“Total
Stockholder Return or TSR”
means the appreciation in
the price of a Common Share plus reinvested dividends over a specified period
of time.
10
Exhibit
10.2
OCCIDENTAL
PETROLEUM CORPORATION
2005
LONG-TERM INCENTIVE PLAN
RESTRICTED
STOCK INCENTIVE AWARD TERMS AND CONDITIONS
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DATE
OF GRANT:
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October 13,
2010
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SHARES
OF RESTRICTED STOCK:
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See
Morgan Stanley Smith Barney Benefit Access “Other Awards/My Awards/Awarded”
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VESTING
DATE:
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October 12,
2013
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The
following
Terms and Conditions
(these “Terms and
Conditions”) are set forth as of the Date of Grant between OCCIDENTAL PETROLEUM
CORPORATION, a Delaware corporation (“Occidental” and, with its subsidiaries,
the “Company”), and the Eligible Employee receiving this award (the “Grantee”).
1
.
GRANT OF RESTRICTED STOCK INCENTIVE AWARD.
In accordance with these Terms and Conditions
and the Occidental Petroleum Corporation 2005 Long-Term Incentive Plan, as the
same may be amended from time to time (the “Plan”), Occidental grants to the
Grantee as of the Date of Grant, the number of shares of Restricted Stock set
forth above. The Restricted Stock shall be fully paid and nonassessable and
shall be represented by a book-entry account registered in the name of the
Grantee with Occidental’s registrar and stock transfer agent that will be
subject to the restrictions hereinafter set forth until those shares have
become transferable in accordance with Section 2.
2
.
RESTRICTIONS ON TRANSFER.
(a) Until the Vesting Date and the
certification by the Committee of the attainment on or after September 30,
2013 of the Performance Goal, the shares of Restricted Stock may not be
transferred, assigned sold, pledged, exchanged, or otherwise encumbered or
disposed of by the Grantee, except to Occidental or pursuant to a domestic
relations order, if applicable, (if approved or ratified by the Committee);
provided that the Grantee may designate from time to time a beneficiary or
beneficiaries on a form approved by the Company (if enforceable under local
law). If the Grantee dies without a
beneficiary designation on file with Occidental at the time of death, the
Grantee’s interest in the Restricted Stock will be transferred by will or by
the laws of descent and distribution.
(b) Further,
if the Grantee was a Named Executive Officer during the last completed fiscal
year prior to vesting
,
then such
Grantee shall retain Beneficial Ownership of Shares equal to not less than 50%
of the net after-tax Shares received under these Terms and Conditions until the
third anniversary date of the vesting of the Restricted Stock under this Award
(the “Beneficial Ownership Period”). Compliance with the foregoing requirement
shall be determined by reference to the reports filed by the Grantee on Forms
3, 4, and 5, as applicable, pursuant to Section 16(a) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and the aggregate number
of Shares reported as Beneficially Owned during the Beneficial Ownership Period
shall be not less than the sum of the number of Shares then required to be so
owned pursuant to these Terms and Conditions and the terms and conditions of
any other grant containing this or
1
a
similar requirement. For purposes of
these Terms and Conditions, “Beneficial Ownership” has the meaning ascribed in Rule 16a-1(2) under
the Exchange Act, and “Named Executive Officer” has the meaning ascribed
thereto pursuant to Item 402 of Regulation S-K under the Exchange Act.
3.
PERFORMANCE GOAL.
In order for the Grantee to retain the Restricted Stock, the Company must
achieve cumulative reported Net Income (as defined in the Plan) of ten billion
dollars ($10,000,000,000), during the period beginning October 1, 2010 and
ending September 30, 2017. Reported
Net Income shall be cumulative and shall be the sum of the net income and net
losses reported in Occidental’s Annual and Quarterly Reports filed with the
Securities and Exchange Commission. The
Committee may certify attainment of the Performance Goal effective at any time
on or after the Vesting Date (the “Certification Date”).
4.
VESTING AND
FORFEITURE OF RESTRICTED STOCK INCENTIVE AWARD.
(a) If the Grantee fails to accept this award prior to
the next record date for the payment of dividends on the Common Stock
subsequent to the Date of Grant, then, notwithstanding any other provision of
this award, the Grantee shall forfeit the shares of Restricted Stock and all
rights under this award and this award will become null and void. For purposes of this section, acceptance of
the award shall occur on the date the Grantee accepts this Restricted Stock
Incentive Award through Morgan Stanley Smith Barney Benefit Access or any
replacement on-line system designated by the Company.
(b) The Grantee must remain in the continuous employ of the
Company through the Vesting Date. The
continuous employment of the Grantee will not be deemed to have been
interrupted by reason of the transfer of the Grantee’s employment among the
Company and its affiliates or an approved leave of absence. However, if, prior to the Vesting Date, the
Grantee dies, becomes permanently disabled while in the employ of the Company
and terminates employment as a result thereof, retires with the consent of the
Company, or terminates employment for the convenience of the Company (each of
the foregoing, a “Forfeiture Event”), then the number of shares of Restricted
Stock will be reduced on a pro rata basis based upon the number of days
remaining until the Vesting Date following the date of the Forfeiture
Event. If the Grantee terminates
employment voluntarily or is terminated for cause before the Vesting Date, then
these Terms and Conditions will terminate automatically on the date of the
Grantee’s termination and the Grantee shall forfeit the Restricted Stock.
(c) If a Change in
Control event occurs prior to the Vesting Date, the number of shares of
Restricted Stock will be reduced on a pro rata basis based upon the number of
days remaining until the Vesting Date following the date of the Change in
Control and become nonforfeitable unless, prior to the occurrence of the Change
in Control event, the Committee, as provided in Section 7.1 of the Plan,
determines that such event will not accelerate vesting of any of these
Restricted Stock. Any such determination
by the Committee is binding on the Grantee.
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(d) If a Change in
Control event occurs on or after the Vesting Date but prior to the
Certification Date, the shares of Restricted Stock will become nonforfeitable
unless, prior to the occurrence of the Change in Control event, the Committee,
as provided in Section 7.1 of the Plan, determines that such event will
not accelerate vesting of any of these Restricted Stock. Any such determination by the Committee is
binding on the Grantee.
(e) Notwithstanding Section 4(b), if the Company does not
meet the Performance Goal on or before September 30, 2017 the Grantee or
any permitted assignee will forfeit the Restricted Stock. If the Company meets the Performance Goal on
or before September 30, 2017, the Restricted Stock (as may be adjusted
pursuant to Section 4(b)), will become nonforfeitable on the Certification
Date.
5.
DIVIDEND,
VOTING AND OTHER RIGHTS.
Except as otherwise provided herein, the
Grantee shall have all of the rights of a stockholder with respect to the
shares of Restricted Stock, including the right to vote such shares and receive
any dividends that may be paid thereon; provided, however, that any additional
shares of Common Stock or other securities that the Grantee may become entitled
to receive pursuant to a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, separation or reorganization or any
other change in the capital structure of Occidental shall be subject to the
same restrictions as the shares of Restricted Stock.
6.
NO EMPLOYMENT
CONTRACT.
Nothing in these
Terms and Conditions confers upon the Grantee any right with respect to
continued employment by the Company, nor limits in any manner the right of the
Company to terminate the employment or adjust the compensation of the
Grantee. Unless otherwise agreed in a
writing signed by the Grantee and an authorized representative of the Company,
the Grantee’s employment with the Company is at will and may be terminated at
any time by the Grantee or the Company.
7.
TAXES AND
WITHHOLDING.
Regardless of
any action the Company takes with respect to any or all income tax (including
U.S. federal, state and local tax and non-U.S. tax), social insurance, payroll
tax, payment on account or other tax-related items related to the Grantee’s
participation in the Plan and legally applicable to the Grantee (“Tax-Related
Items”), the Grantee acknowledges that the ultimate liability for all
Tax-Related Items is and remains the Grantee’s responsibility and may exceed
the amount actually withheld by the Company.
The Grantee further acknowledges that the Company (i) makes no
representations or undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of this Restricted Stock Incentive Award,
including the grant or vesting of the Restricted Stock Incentive Award and the
receipt of dividends; and (ii) does not commit to and is under no
obligation to structure the terms of the grant or any aspect of the Restricted
Stock Incentive Award to reduce or eliminate the Grantee’s liability for
Tax-Related Items or achieve any particular tax result. Further, if the Grantee has become subject to
tax in more than one jurisdiction between the Date of Grant and the date of any
relevant taxable event, the Grantee
3
acknowledges
that the Company may be required to withhold or account for Tax-Related Items
in more than one jurisdiction.
Prior
to the relevant taxable event, the Grantee shall pay or make adequate
arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, the Grantee authorizes the
Company to withhold all applicable Tax-Related Items legally payable by the
Grantee first from the shares pursuant to this Restricted Stock Incentive Award
and, if not sufficient, from the Grantee’s wages or other cash
compensation. The Grantee shall pay to
the Company any amount of Tax-Related Items that the Company may be required to
withhold as a result of the Grantees receipt of this Restricted Stock Incentive
Award that cannot be satisfied by the means previously described.
Notwithstanding
its availability, the Grantee expressly agrees not to make an election pursuant
to Section 83(b) of the U.S. Internal Revenue Code with respect to
the shares of Restricted Stock granted pursuant to these Terms and Conditions.
8.
COMPLIANCE
WITH LAW.
The Company will make
reasonable efforts to comply with all federal, state and non-U.S. laws
applicable to awards of this type.
However, if it is not feasible for the Company to comply with these laws
with respect to the grant or settlement of these awards, then the awards may be
cancelled without any compensation or additional benefits provided to Grantee
as a result of the cancellation.
9.
RELATION TO OTHER
BENEFITS.
The benefits
received by the Grantee under these Terms and Conditions will not be taken into
account in determining any benefits to which the Grantee may be entitled under
any profit sharing, retirement or other benefit or compensation plan maintained
by the Company, including the amount of any life insurance coverage available
to any beneficiary of the Grantee under any life insurance plan covering
employees of the Company. Additionally,
this Restricted Stock Incentive Award is not part of normal or expected
compensation or salary for any purposes, including, but not limited to
calculation of any severance, resignation, termination, redundancy, end of
service payments, bonuses or long-service awards. The grant of this Restricted Stock Incentive
Award does not create any contractual or other right to receive future grants
of Restricted Stock Incentive Awards or benefits in lieu of Restricted Stock
Incentive Awards, even if Grantee has a history of receiving Restricted Stock
Incentive Awards or other cash or stock awards.
10.
AMENDMENTS.
The Plan may be modified, amended, suspended
or terminated by the Board at any time, as provided in the Plan. Any amendment to the Plan will be deemed to
be an amendment to these Terms and Conditions to the extent it is applicable to
these Terms and Conditions; however, no amendment will adversely affect the
rights of the Grantee under these Terms and Conditions without the Grantee’s
consent.
11.
SEVERABILITY.
If one or more of the provisions of these
Terms and Conditions is invalidated for any reason by a court of competent
jurisdiction, the invalidated provisions
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shall
be deemed to be separable from the other provisions of these Terms and
Conditions, and the remaining provisions of these Terms and Conditions will
continue to be valid and fully enforceable.
12.
ENTIRE AGREEMENT;
RELATION TO PLAN; INTERPRETATION.
Except as specifically provided in this Section, these Terms and
Conditions and the Attachments incorporated in these Terms and Conditions
constitute the entire agreement between the Company and the Grantee with respect
to this Restricted Stock Incentive Award.
These Terms and Conditions are subject to the terms and conditions of
the Plan. In the event of any
inconsistent provisions between these Terms and Conditions and the Plan, the
provisions of the Plan control.
Capitalized terms used in these Terms and Conditions without definitions
have the meanings assigned to them in the Plan.
References to Sections and Attachments are to Sections of, and
Attachments incorporated in, these Terms and Conditions unless otherwise noted.
13.
SUCCESSORS AND ASSIGNS.
Subject to Sections 2 and 3, the provisions
of these Terms and Conditions shall be for the benefit of, and be binding upon,
the successors, administrators, heirs, legal representatives and assigns of the
Grantee, and the successors and assigns of the Company.
14.
GOVERNING LAW.
The laws of the State of Delaware govern the
interpretation, performance, and enforcement of these Terms and Conditions.
15.
PRIVACY RIGHTS.
By accepting this Restricted Stock Incentive Award, the Grantee explicitly and unambiguously
consents to the collection, use and transfer, in electronic or other form, of
the Grantee’s personal data as described in these Terms and Conditions by and
among, as applicable, the Company and its affiliates for the exclusive purpose
of implementing, administering and managing the Grantee’s participation in the
Plan. The Grantee understands
that the Company holds, or may receive from any agent designated by the
Company, certain personal information about the Grantee, including, but not
limited to, the Grantee’s name, home address and telephone number, date of
birth, social insurance number or other identification number, salary,
nationality, job title, any shares of stock or directorships held in the
Company, details of this Restricted Stock Incentive Award or any other
entitlement to cash or shares of stock awarded, canceled, exercised, vested,
unvested or outstanding in the Grantee’s favor, for the purpose of
implementing, administering and managing the Plan, including complying with
applicable tax and securities laws (“Data”).
Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan. These recipients may be located in the
Grantee’s country or elsewhere, and may have different data privacy laws and
protections than the Grantee’s country.
By accepting these Terms and Conditions, the Grantee authorizes the
recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes described above. The Grantee may, at any time, view Data,
request additional information about the storage and processing of Data,
require any necessary amendments to Data or refuse or withdraw the consents
herein, in any case without
5
cost,
by contacting the Committee in writing.
Refusing or withdrawing consent may affect the Grantee’s ability to
participate in the Plan.
16.
ELECTRONIC DELIVERY AND
ACCEPTANCE.
The Company may,
in its sole discretion, decide to deliver any documents related to this
Restricted Stock Incentive Award granted under the Plan or future awards that
may be granted under the Plan (if any) by electronic means or to request the
Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such
documents by electronic delivery and, if requested, to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.
17.
GRANTEE’S REPRESENTATIONS
AND RELEASES.
By accepting
this Restricted Stock Incentive Award, the Grantee acknowledges that the
Grantee has read these Terms and Conditions and understands that (i) the
grant of this Restricted Stock Incentive Award is made voluntarily by
Occidental in its discretion with no liability on the part of any of its direct
or indirect subsidiaries and that, if the Grantee is not an employee of
Occidental, the Grantee is not, and will not be considered, an employee of
Occidental but the Grantee is a third party (employee of a subsidiary) to whom
this Restricted Stock Incentive Award is granted; (ii) all decisions with
respect to future awards, if any, will be at the sole discretion of Occidental;
(iii) the Grantee’s participation in the Plan is voluntary; (iv) this
Restricted Stock Incentive Award is an extraordinary item that does not
constitute a regular and recurring item of base compensation; (v) the
future value of any Shares issued pursuant to this Restricted Stock Incentive
Award cannot be predicted and Occidental does not assume liability in the event
this Restricted Stock Incentive Award has no value in the future; (vi) subject
to the terms of any tax equalization agreement between the Grantee and the
entity employing the Grantee, the Grantee will be solely responsible for the
payment or nonpayment of taxes imposed or threatened to be imposed by any
authority of any jurisdiction; and (vii) Occidental is not providing any
tax, legal or financial advice with respect to this Restricted Stock Incentive
Award or the Grantee’s participation in the Plan.
In
consideration of the grant of this Restricted Stock Incentive Award, no claim
or entitlement to compensation or damages shall arise from termination of this
Restricted Stock Incentive Award or diminution in value of this Restricted
Stock Incentive Award resulting from termination of the Grantee’s employment by
the Company (for any reason whatsoever) and, to the extent permitted by law,
the Grantee irrevocably releases the Company from any such claim that may
arise; if, notwithstanding the foregoing, any such claim is found by a court of
competent jurisdiction to have arisen, then, by accepting this Restricted Stock
Incentive Award, the Grantee shall be deemed irrevocably to have waived his or
her entitlement to pursue such claim.
By
accepting this Restricted Stock Incentive Award, the Grantee agrees, to the
extent not contrary to applicable law, to the General Terms of Employment set
out on Attachment 1 and the Arbitration Provisions set out on Attachment 2,
which, in each case, are incorporated in these Terms and Conditions by
reference.
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18.
IMPOSITION OF OTHER
REQUIREMENTS.
Occidental
reserves the right to impose other requirements on the Grantee’s participation
in the Plan and on the Restricted Stock Incentive Award, to the extent
Occidental determines it is necessary or advisable in order to comply with
local law or facilitate the administration of the Plan, and to require the
Grantee to sign any additional agreements or undertakings that may be necessary
to accomplish the foregoing.
19.
COMPLIANCE
WITH SECTION 409A OF THE CODE.
This award is intended to be exempt from Section 409A of the U.S.
Internal Revenue Code (“Section 409A”) under Treas. Reg. § 1.409A-1(b)(6) (or
any successor provision). Notwithstanding the foregoing, to the extent that the
Board determines that the Plan or this award is subject to Section 409A,
these Terms and Conditions shall be interpreted and administered in such a way
as to comply with the applicable provisions of Section 409A to the maximum
extent possible. To the extent that the
Board determines that the Plan or this award is subject to Section 409A
and fails to comply with the requirements of Section 409A, the Board
reserves the right (without any obligation to do so) to amend or terminate the
Plan and/or amend, restructure, terminate or replace this award in order to
cause this award to either not be subject to Section 409A or to comply
with the applicable provisions of such section.
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Attachment 1
General Terms of Employment
A. Except as otherwise required by law
or legal process, the Grantee will not publish or divulge to any person, firm,
corporation or institution and will not use to the detriment of Occidental, or
any of its subsidiaries or other affiliates, or any of their respective
officers, directors, employees or stockholders (collectively, “Occidental
Parties”), at any time during or after the Grantee’s employment by any of them,
any trade secrets or confidential information of any of them (whether generated
by them or as a result of any of their business relationships), including such
information as described in Occidental’s Code of Business Conduct and other
corporate policies, without first obtaining the written permission of an
officer of the Company.
B. At the time of leaving employment
with the Company, the Grantee will deliver to the Company, and not keep or
deliver to anyone else, any and all credit cards, drawings, blueprints,
specifications, devices, notes, notebooks, memoranda, reports, studies,
correspondence and other documents, and, in general, any and all materials
relating to the Occidental Parties (whether generated by them or as a result of
their business relationships), including any copies (whether in paper or
electronic form), that the Grantee has in the Grantee’s possession or control.
C. The Grantee will, during the Grantee’s
employment by the Company, comply with the provisions of Occidental’s Code of
Business Conduct.
D. Except as otherwise required by the
Grantee’s job or permitted by law, the Grantee will not make statements about
any Occidental Parties (1) to the press, electronic media, to any part of
the investment community, to the public, or to any person connected with,
employed by or having a relationship with any of them without permission of an
officer of the Company or (2) that are derogatory, defamatory or negative. Nothing herein, however, shall prevent
Grantee from making a good faith report or complaint to appropriate
governmental authorities. To the fullest
extent permitted by law, Grantee will not interfere with or disrupt any of the
Company’s operations or otherwise take actions intended directly to harm any of
the Occidental Parties.
E. All inventions, developments,
designs, improvements, discoveries and ideas that the Grantee makes or
conceives in the course of employment by the Company, whether or not during
regular working hours, relating to any design, article of manufacture, machine,
apparatus, process, method, composition of matter, product or any improvement
or component thereof, that are manufactured, sold, leased, used or under
development by, or pertain to the present or possible future business of the
Company shall be a work-for-hire and become and remain the property of
Occidental, its successors and assigns.
The
provisions of this Section do not apply to an invention that qualifies
fully under the provisions of Section 2870 of the California Labor Code,
which provides in
8
substance
that provisions in an employment agreement providing that an employee
shall assign or offer to assign rights in an invention to his or her employer
do not apply to an invention for which no equipment, supplies, facilities, or
trade secret information of the employer was used and which was developed
entirely on the employee’s own time, except for those inventions that either
(a) relate, at the time of conception or reduction to practice of the
invention, (1) to the business of the employer or (2) to the employer’s
actual or demonstrably anticipated research or development, or (b) result
from any work performed by the employee for the employer.
F. The foregoing General Terms of
Employment are not intended to be an exclusive list of the employment terms and
conditions that apply to the Grantee.
The Company, in its sole discretion, may at any time amend or supplement
the foregoing terms. The Grantee’s
breach of the foregoing General Terms of Employment will entitle the Company to
take appropriate disciplinary action, including, without limitation, reduction
of the Restricted Stock Incentive Award granted pursuant to these Terms and
Conditions and termination of employment.
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Attachment 2
Arbitration Provisions
Any dispute arising out of or in any way related to the Grantee’s
employment with the Company, or the termination of that employment, will be
decided exclusively by final and binding arbitration pursuant to any procedures
required by applicable law. To the
extent not inconsistent with applicable law, any arbitration will be submitted
to American Arbitration Association (“AAA”) and subject to AAA Employment
Arbitration Rules and Mediation Procedures in effect at the time of filing
of the demand for arbitration. Only the
following claims are excluded from these Terms and Conditions: (1) claims
for workers’ compensation, unemployment compensation, or state disability
benefits, and claims based upon any pension or welfare benefit plan the terms
of which contain an arbitration or other non-judicial dispute resolution
procedure, (2) to the extent permitted by applicable law, claims for
provisional remedies to maintain the status quo pending the outcome of
arbitration, (3) claims based on compensation award agreements and
incentive plans and (4) claims which are not permitted by applicable law
to be subject to a binding pre-dispute arbitration agreement.
Any controversy regarding whether a particular dispute is subject to
arbitration under this Section shall be decided by the arbitrator.
To the extent required under applicable law, the Grantee’s
responsibility for payment of the neutral arbitrator’s fees and expenses shall
be limited to an amount equal to the filing fee that would be required for a
state trial court action and the Company shall pay all remaining fees and
expenses of the arbitrator. Unless otherwise
required under applicable law, the parties shall each pay their pro rata share
of the neutral arbitrator’s expenses and fees.
Any controversy regarding the payment of fees and expenses under this
arbitration provision shall be decided by the arbitrator.
The arbitrator may award any form of remedy or relief (including
injunctive relief) that would otherwise be available in court. Any award pursuant to said arbitration shall
be accompanied by a written opinion of the arbitrator setting forth the reason
for the award. The award rendered by the
arbitrator shall be conclusive and binding upon the parties hereto, and
judgment upon the award may be entered, and enforcement may be sought in, any
court of competent jurisdiction. To the extent not inconsistent with applicable
laws, the arbitrator will have the authority to hear and grant motions.
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Exhibit 10.3
OCCIDENTAL
PETROLEUM CORPORATION
2005
LONG-TERM INCENTIVE PLAN
TOTAL
SHAREHOLDER RETURN INCENTIVE AWARD
TERMS AND CONDITIONS
(Equity-based, Equity and
Cash-settled Award)
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DATE OF GRANT:
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October 13,
2010
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PERFORMANCE SHARES:
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See
Morgan Stanley Smith Barney Benefit Access “Other Awards/ My Awards/Awarded”
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PERFORMANCE PERIOD:
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October 13, 2010 through October 12, 2013
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The following
Terms
and Conditions
(these “Terms and Conditions”)
are set forth
as of the Date of Grant between OCCIDENTAL PETROLEUM CORPORATION, a Delaware
corporation (“Occidental” and, with its subsidiaries, the “Company”), and the
Eligible Employee receiving this award (the “Grantee”).
1.
GRANT
OF PERFORMANCE SHARES
.
In accordance with these Terms and Conditions
and the Occidental Petroleum Corporation 2005 Long-Term Incentive Plan, as the
same may be amended from time to time (the “Plan”), Occidental grants to the
Grantee as of the Date of Grant, the right to receive 50% in Shares and 50% in
cash up to the number/value of Performance Shares. For the purposes of these Terms and
Conditions, “Performance Shares” means a bookkeeping entry that records the
equivalent of Shares awarded pursuant to Sections 4.2 and, to the extent
applicable, 5.2 of the Plan that is payable upon the achievement of the
Performance Goal. Performance Shares are not Shares and have no voting rights
or, except as stated in Section 6, dividend rights.
2.
RESTRICTIONS
ON TRANSFER.
(a) Neither
these Terms and Conditions nor any right to receive Shares or cash pursuant to
these Terms and Conditions may be transferred or assigned by the Grantee other
than (i) to a beneficiary designated on a form approved by the Company (if
enforceable under local law), by will or, if the Grantee dies without designating
a beneficiary of a valid will, by the laws of descent and distribution, or (ii) pursuant
to a domestic relations order, if applicable, (if approved or ratified by the
Committee).
(b) Further,
if the Grantee was a Named Executive Officer during the last completed fiscal
year prior to vesting, then such Grantee shall retain Beneficial Ownership of
Shares equal to not less than 50% of the net after-tax Shares received under
these Terms and Conditions until the third anniversary date of the vesting of the
Shares under this Award (the “Beneficial Ownership Period”). Compliance with
the foregoing requirement shall be determined by reference to the reports filed
by the Grantee on Forms 3, 4, and 5, as applicable, pursuant to Section 16(a) of
the Securities Exchange Act of 1934 (the “Exchange Act”) and the aggregate
number of Shares reported as Beneficially Owned during the Beneficial Ownership
Period shall be not less than the sum of the number of Shares then required to
be so owned pursuant to these Terms and Conditions and the terms and conditions
of any other grant containing this or a similar requirement. For purposes of these Terms and Conditions, “Beneficial
Ownership” has the meaning ascribed in Rule 16a-1(2) under the
Exchange Act and “Named Executive Officer” has the meaning ascribed thereto
pursuant to Item 402 of Regulation S-K under the Exchange Act.
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3.
PERFORMANCE
GOAL.
The Performance Goal
for the Performance Period is based on Total Shareholder Return (defined as
Total Stockholder Return in the Plan) of the peer companies listed below and
the S&P 500 Index, as set forth on Exhibit 1. Total Shareholder Return shall be calculated
for each peer company using the average of its last reported sale price per
share of common stock on the New York Stock Exchange - Composite Transactions
for the last ten trading days preceding October 13, 2010 and the average
of its last reported sale price per share of common stock on the New York Stock
Exchange - Composite Transactions for the last ten trading days preceding October 12,
2013. In addition to Occidental, the
peer companies are: Anadarko Petroleum Corporation, Apache Corporation,
Canadian Natural Resources Limited, Chevron Corporation, ConocoPhillips, Devon
Energy Corporation, EOG Resources, Inc., ExxonMobil Corporation, Hess
Corporation, Marathon Oil Corporation and Royal Dutch Shell plc. If a peer company ceases to be a
publicly-traded company at any time during the Performance Period, then such
company will be removed as a peer company and the achievement of the
Performance Goal will be determined with respect to the remaining peer
companies as set forth on Exhibit 1.
4.
VESTING
AND FORFEITURE OF PERFORMANCE SHARES
.
(a) If the Grantee fails to accept this
award prior to the next record date for the payment of dividends on the Common
Stock subsequent to the Date of Grant, then, notwithstanding any other
provision of this award, the Grantee shall forfeit all rights under this award
and this award will become null and void.
For purposes of this section, acceptance of the award shall occur on the
date the Grantee accepts this Total Shareholder Return Incentive Award through
Morgan Stanley Smith Barney Benefit Access or any replacement online system
designated by the Company.
(b) The
Grantee must remain in the continuous employ of the Company through the last
day of the Performance Period to receive payment of this award. The continuous employment of the Grantee will
not be deemed to have been interrupted by reason of the transfer of the Grantee’s
employment among the Company and its affiliates or an approved leave of
absence. However, if, prior to the end
of the Performance Period, the Grantee dies or becomes permanently disabled
while in the employ of the Company and terminates as a result thereof, retires
with the consent of the Company, or terminates employment for the convenience
of the Company (each of the foregoing, a “Forfeiture Event”), then the number
of Performance Shares upon which the Grantee’s award is based will be reduced
on a pro rata basis based upon the number of days remaining in the Performance
Period following the date of the Forfeiture Event. If the Grantee terminates employment
voluntarily or is terminated for cause before the end of the Performance
Period, then these Terms and Conditions will terminate automatically on the
date of Grantee’s termination and Grantee shall forfeit the right to receive
any Shares or cash hereunder.
(c) The
Grantee’s right to receive payment of this award in an amount not to exceed the
Performance Shares, rounded up to the nearest whole share, will be based on,
and become nonforfeitable upon the Committee’s certification of, the attainment
of the Performance Goal.
(d) Notwithstanding
Section 4(c), if a Change in Control event occurs prior to the end of the
Performance Period, the Grantee’s right to receive payment at 50% of the
Performance Share level (as adjusted for any Forfeiture Event pursuant to Section 4(b))
will become nonforfeitable. The right to
receive Shares and cash in excess of 50% of the Performance Share level (as
adjusted for any Forfeiture Event pursuant to Section 4(b)) will be
forfeited.
(e) Notwithstanding
Section 4(c), if Occidental’s Total Shareholder Return does not exceed the
Total Shareholder Return of the Standard & Poor’s 500 Stock Index
(S&P 500
2
Index)
for the same period, the Grantee’s right to receive Shares and cash in excess
of 50% of the Performance Share level will be forfeited. This comparison shall be calculated using
Occidental’s Total Shareholder Return as defined under Section 3, and by
using the average of the closing S&P 500 Index value for the last ten
trading days preceding October 13, 2010 and the average of the closing
S&P 500 Index value for the last ten trading days preceding October 12,
2013 to calculate the Total Shareholder Return for the S&P 500 Index.
5.
PAYMENT
OF AWARDS.
The Performance
Shares as adjusted pursuant to Sections 4 and 7 of these Terms and Conditions
will be settled 50% in Shares and 50% in cash.
The cash payment will equal the closing price of the Shares on the New
York Stock Exchange on the date of the Committee’s certification (the “Certification
Date Value”) of the attainment of the Performance Goal multiplied by 50% of the
Performance Shares earned at the Performance Goal level attained and will be
paid as promptly as practicable after such date. The Shares covered by these Terms and Conditions
or any prorated portion thereof shall be issued to the Grantee as promptly as
practicable after the Committee’s certification of the attainment of the
Performance Goal or the Change in Control event, as the case may be. Each of the cash payment and the Share
issuance shall in any event be made no later than the 15
th
day of the third month following the end of
the first taxable year in which the award is no longer subject to a substantial
risk of forfeiture.
6.
CREDITING
AND PAYMENT OF DIVIDEND EQUIVALENTS
.
With respect to the number of Performance
Shares listed above, the Grantee will be credited on the books and records of
Occidental with an amount (the “Dividend Equivalent”) equal to the amount per
share of any cash dividends declared by the Board on the outstanding Shares as
and when declared with a record date during the period beginning on the Date of
Grant and ending with respect to any portion of the Performance Shares covered
by these Terms and Conditions on the date on which the Committee certifies the
attainment of the Performance Goal or the Change in Control event, as the case
may be, or, if earlier, the date on which the Grantee forfeits the right to
receive such portion. Occidental will
pay in cash to the Grantee an amount equal to the Dividend Equivalents credited
to such Grantee, adjusted, if appropriate, to reflect the same payment
percentage that is used to determine the payment of the Performance Shares
following certification of the attainment of the Performance Goal or the Change
in control event, as the case may be, as promptly as may be practicable
following such certification or Change in control event, but, in any event, no
later than the 15
th
day of the third month following the end of
the first taxable year in which the award is no longer subject to a substantial
risk of forfeiture.
7.
ADJUSTMENTS
.
(a) The number
of Performance Shares or kind of shares of stock covered by these Terms and
Conditions shall be adjusted as the Committee determines pursuant to Section 7.2
of the Plan in order to prevent dilution or expansion of the Grantee’s rights
under these Terms and Conditions as a result of events such as stock dividends,
stock splits or other changes in the capital structure of Occidental, or any
merger, consolidation, spin-off, liquidation or other corporate transaction
having a similar effect. If any such
adjustment occurs, the Company will give the Grantee written notice of the
adjustment.
(b) In
addition, the Committee may adjust the Performance Goal or other features of
this Grant as permitted by Section 5.2.3 of the Plan.
8.
NO
EMPLOYMENT CONTRACT.
Nothing
in these Terms and Conditions confers upon the Grantee any right with respect
to continued employment by the Company, nor limits in any manner the right of
the Company to terminate the employment or adjust the compensation of the
Grantee. Unless otherwise agreed in a
writing signed by the Grantee and an authorized
3
representative
of the Company, the Grantee’s employment with the Company is at will and may be
terminated at any time by the Grantee or the Company.
9.
TAXES
AND WITHHOLDING.
Regardless
of any action the Company takes with respect to any or all income tax
(including U.S. federal, state and local tax and non-U.S. tax), social
insurance, payroll tax, payment on account or other tax-related items related
to the Grantee’s participation in the Plan and legally applicable to the
Grantee (“Tax-Related Items”), the Grantee acknowledges that the ultimate
liability for all Tax-Related Items is and remains the Grantee’s responsibility
and may exceed the amount actually withheld by the Company. The Grantee further acknowledges that the
Company (i) makes no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of this Total
Shareholder Return Incentive Award, including the grant or vesting of the Total
Shareholder Return Incentive Award and the receipt of Dividend Equivalents; and
(ii) does not commit to and is under no obligation to structure the terms
of the grant or any aspect of the Total Shareholder Return Incentive Award to
reduce or eliminate the Grantee’s liability for Tax-Related Items or achieve
any particular tax result. Further, if
the Grantee has become subject to tax in more than one jurisdiction between the
Date of Grant and the date of any relevant taxable event, the Grantee
acknowledges that the Company may be required to withhold or account for
Tax-Related Items in more than one jurisdiction.
Prior
to the relevant taxable event, the Grantee shall pay or make adequate
arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, the Grantee authorizes the
Company to withhold all applicable Tax-Related Items legally payable by the
Grantee (A) in connection with the issuance of any Shares or the payment
of cash or any other consideration pursuant to this Total Shareholder Return
Incentive Award (other than the payment of Dividend Equivalents), 50% from any
cash amount payable under these Terms and Conditions and 50% from the Shares
that are issued or transferred to the Grantee pursuant to these Terms and
Conditions, unless the Grantee otherwise instructs the Company in writing not
less than thirty (30) days prior to the end of the Performance Period, or (B) in
connection with the granting of Performance Shares or the payment of Dividend
Equivalents pursuant to this grant of Performance Shares, from the Grantee’s
wages or other cash compensation (including Dividend Equivalents). The Grantee shall pay to the Company any
amount of Tax-Related Items that the Company may be required to withhold as a
result of the Grantee’s receipt of this Total Shareholder Return Incentive
Award that cannot be satisfied by the means previously described.
10.
COMPLIANCE
WITH LAW.
The Company will
make reasonable efforts to comply with all applicable federal, state and
non-U.S. securities laws; however, the Company will not issue any Shares or
other securities pursuant to these Terms and Conditions if their issuance would
result in a violation of any such law.
However, if it is not feasible for the Company to comply with such laws
with respect to the grant or settlement of these awards, then the awards may be
cancelled without any compensation or additional benefits provided to Grantee
as a result of the cancellation.
11.
RELATION
TO OTHER BENEFITS.
The
benefits received by the Grantee under these Terms and Conditions will not be
taken into account in determining any benefits to which the Grantee may be
entitled under any profit sharing, retirement or other benefit or compensation
plan maintained by the Company, including the amount of any life insurance
coverage available to any beneficiary of the Grantee under any life insurance
plan covering employees of the Company.
Additionally, the Performance Shares are not part of normal or expected
compensation or salary for any purposes, including, but not limited to
calculation of any
4
severance,
resignation, termination, redundancy, end of service payments, bonuses or
long-service awards. This grant of
Performance Shares does not create any contractual or other right to receive
future grants of Performance Shares, or benefits in lieu of Performance Shares,
even if Grantee has a history of receiving Performance Shares or other stock or
cash awards.
12.
AMENDMENTS.
The Plan may be modified, amended, suspended
or terminated by the Board at any time, as provided in the Plan. Any amendment to the Plan will be deemed to
be an amendment to these Terms and Conditions to the extent it is applicable to
these Terms and Conditions; however, no amendment will adversely affect the
rights of the Grantee under these Terms and Conditions without the Grantee’s
consent.
13.
SEVERABILITY.
If one or more of the provisions of these
Terms and Conditions is invalidated for any reason by a court of competent
jurisdiction, the invalidated provisions shall be deemed to be separable from
the other provisions of these Terms and Conditions, and the remaining provisions
of these Terms and Conditions will continue to be valid and fully enforceable.
14.
ENTIRE AGREEMENT
;
RELATION TO PLAN; INTERPRETATION.
Except as specifically provided in this
Section, these Terms and Conditions, the Exhibit and the Attachments
incorporated in these Terms and Conditions constitute the entire agreement
between the Company and the Grantee with respect to this Total Shareholder
Return Incentive Award. These Terms and
Conditions are subject to the terms and conditions of the Plan. In the event of any inconsistent provisions
between these Terms and Conditions and the Plan, the provisions of the Plan
control. Capitalized terms used in these
Terms and Conditions without definition have the meanings assigned to them in
the Plan. References to Sections,
Exhibits and Attachments are to Sections and Exhibits of, and Attachments
incorporated in, these Terms and Conditions unless otherwise noted.
15.
SUCCESSORS
AND ASSIGNS.
Subject to
Sections 2 and 4, the provisions of these Terms and Conditions shall be for the
benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of the Grantee, and the successors and assigns of
the Company.
16.
GOVERNING
LAW.
The laws of the State of
Delaware govern the interpretation, performance, and enforcement of these Terms
and Conditions.
17.
PRIVACY
RIGHTS.
By accepting this
Total Shareholder Return Incentive Award, the Grantee explicitly and
unambiguously consents to the collection, use and transfer, in electronic or
other form, of the Grantee’s personal data as described in these Terms and
Conditions by and among, as applicable, the Company and its affiliates for the
exclusive purpose of implementing, administering and managing the Grantee’s
participation in the Plan. The Grantee
understands that the Company holds or may receive from any agent designated by
the Company certain personal information about the Grantee, including, but not
limited to, the Grantee’s name, home address and telephone number, date of
birth, social insurance number or other identification number, salary,
nationality, job title, any shares of stock or directorships held in the
Company, details of this Total Shareholder Return Incentive Award or any other
entitlement to shares of stock awarded, canceled, exercised, vested, unvested
or outstanding in the Grantee’s favor, for the purpose of implementing,
administering and managing the Plan, including complying with applicable tax
and securities laws (“Data”). Data may
be transferred to any third parties assisting in the implementation,
administration and management of the Plan.
These recipients may be located in the Grantee’s country or elsewhere,
and may have different
5
data
privacy laws and protections than the Grantee’s country. By accepting these Terms and Conditions, the
Grantee authorizes the recipients to receive, possess, use, retain and transfer
the Data, in electronic or other form, for the purposes described above. The Grantee may, at any time, view Data,
request additional information about the storage and processing of Data,
require any necessary amendments to Data or refuse or withdraw the consents
herein, in any case without cost, by contacting the Committee in writing. Refusing or withdrawing consent may affect
the Grantee’s ability to participate in the Plan.
18.
ELECTRONIC
DELIVERY AND ACCEPTANCE.
The
Company may, in its sole discretion, decide to deliver any documents related to
this Total Shareholder Return Incentive Award granted under the Plan or future
awards that may be granted under the Plan (if any) by electronic means or to
request the Grantee’s consent to participate in the Plan by electronic
means. The Grantee hereby consents to
receive such documents by electronic delivery and, if requested, to participate
in the Plan through an on-line or electronic system established and maintained
by the Company or another third party designated by the Company.
19.
GRANTEE’S
REPRESENTATIONS AND RELEASES.
By accepting this Total Shareholder Return Incentive Award, the Grantee
acknowledges that the Grantee has read these Terms and Conditions and
understands that (i) the grant of this Total Shareholder Return Incentive
Award is made voluntarily by Occidental in its discretion with no liability on
the part of any of its direct or indirect subsidiaries and that, if the Grantee
is not an employee of Occidental, the Grantee is not, and will not be
considered, an employee of Occidental but the Grantee is a third party
(employee of a subsidiary) to whom this Total Shareholder Return Incentive
Award is granted; (ii) all decisions with respect to future awards, if
any, will be at the sole discretion of Occidental; (iii) the Grantee’s
participation in the Plan is voluntary; (iv) this Total Shareholder Return
Incentive Award is an extraordinary item that does not constitute a regular and
recurring item of base compensation; (v) the future value of any Shares
issued pursuant to this Total Shareholder Return Incentive Award cannot be
predicted and Occidental does not assume liability in the event such Shares
have no value in the future; (vi) subject to the terms of any tax
equalization agreement between the Grantee and the entity employing the
Grantee, the Grantee will be solely responsible for the payment or nonpayment
of taxes imposed or threatened to be imposed by any authority of any
jurisdiction; and (vii) Occidental is not providing any tax, legal or
financial advice with respect to this Total Shareholder Return Incentive Award
or the Grantee’s participation in the Plan.
In
consideration of the grant of this Total Shareholder Return Incentive Award, no
claim or entitlement to compensation or damages shall arise from termination of
this Total Shareholder Return Incentive Award or diminution in value of this
Total Shareholder Return Incentive Award or Shares issued pursuant to this
Total Shareholder Return Incentive Award resulting from termination of the
Grantee’s employment by the Company (for any reason whatsoever) and, to the
extent permitted by law, the Grantee irrevocably releases the Company from any
such claim that may arise; if, notwithstanding the foregoing, any such claim is
found by a court of competent jurisdiction to have arisen, then, by accepting
these Terms and Conditions, the Grantee shall be deemed irrevocably to have
waived his or her entitlement to pursue such claim.
By
accepting this Total Shareholder Return Incentive Award, the Grantee agrees, to
the extent not contrary to applicable law, to the General Terms of Employment
set out on Attachment 1 and the Arbitration Provisions set out on Attachment 2,
which, in each case, are incorporated in these Terms and Conditions by
reference.
6
20.
RELATION
TO EMPLOYMENT AGREEMENT.
In
the event of any inconsistent provisions between these Terms and Conditions and
any employment agreement between the Grantee and the Company, the provisions of
these Terms and Conditions control except with respect to Attachment 2
Arbitration Provisions.
21.
IMPOSITION OF OTHER
REQUIREMENTS.
Occidental
reserves the right to impose other requirements on the Grantee’s participation
in the Plan and on the Total Shareholder Return Incentive Award, to the extent
Occidental determines it is necessary or advisable in order to comply with
local law or facilitate the administration of the Plan, and to require the
Grantee to sign any additional agreements or undertakings that may be necessary
to accomplish the foregoing.
22.
COMPLIANCE
WITH SECTION 409A OF THE INTERNAL REVENUE CODE.
All amounts payable under these Terms and
Conditions are intended to comply with the “short term deferral” exception from
Section 409A of the U.S. Internal Revenue Code (“Section 409A”)
specified in Treas. Reg. § 1.409A-1(b)(4) (or any successor provision).
Notwithstanding the foregoing, to the extent that the Board determines that the
Plan or this award is subject to Section 409A, these Terms and Conditions
shall be interpreted and administered in such a way as to comply with the applicable
provisions of Section 409A to the maximum extent possible. To the extent that the Board determines that
the Plan or this award is subject to Section 409A and fails to comply with
the requirements of Section 409A, the Board reserves the right (without
any obligation to do so) to amend or terminate the Plan and/or amend,
restructure, terminate or replace this award in order to cause this award to
either not be subject to Section 409A or to comply with the applicable
provisions of such section.
7
EXHIBIT 1
2005 Long-Term Incentive Plan
2010 Total Shareholder Return Incentive Award
Total Shareholder Return Payout Schedule
|
TSR Ranking
|
|
Payout as a
% of Maximum
|
|
|
1
st
|
|
100%
|
|
|
2
nd
|
|
85%
|
|
|
3
rd
|
|
70%
|
|
|
4
th
|
|
60%
|
|
|
5
th
|
|
50%
|
|
|
6
th
|
|
40%
|
|
|
7
th
|
|
30%
|
|
|
8
th
|
|
20%
|
|
|
9
th
|
|
10%
|
|
|
10
th
|
|
0%
|
|
|
11
th
|
|
0%
|
|
|
12
th
|
|
0%
|
|
If
any of the Peer Companies ceases to be a publicly-traded company during the
Performance Period, such company shall be removed as a Peer Company. The
remaining Peer Companies shall be ranked from first to last and the payout
percentage for the award shall be determined under the above schedule based on
the Company’s ranking among the remaining Peer Companies, provided, that (1) the
Committee may use its negative discretion to reduce the payout percentage
associated with the Company’s ranking, and (2) if the Company ranks last
among the remaining Peer Companies, the payout percentage shall be 0%.
8
Attachment 1
General Terms of
Employment
A.
Except as
otherwise required by law or legal process, the Grantee will not publish or
divulge to any person, firm, corporation or institution and will not use to the
detriment of Occidental, or any of its subsidiaries or other affiliates, or any
of their respective officers, directors, employees or stockholders
(collectively, “Occidental Parties”), at any time during or after the Grantee’s
employment by any of them, any trade secrets or confidential information of any
of them (whether generated by them or as a result of any of their business
relationships), including such information as described in Occidental’s Code of
Business Conduct and other corporate policies, without first obtaining the
written permission of an officer of the Company.
B.
At the time of
leaving employment with the Company, the Grantee will deliver to the Company,
and not keep or deliver to anyone else, any and all credit cards, drawings,
blueprints, specifications, devices, notes, notebooks, memoranda, reports,
studies, correspondence and other documents, and, in general, any and all
materials relating to the Occidental Parties (whether generated by them or as a
result of their business relationships), including any copies (whether in paper
or electronic form), that the Grantee has in the Grantee’s possession or
control.
C.
The Grantee
will, during the Grantee’s employment by the Company, comply with the
provisions of Occidental’s Code of Business Conduct.
D.
Except as
otherwise required by the Grantee’s job or permitted by law, the Grantee will
not make statements about any Occidental Parties (1) to the press,
electronic media, to any part of the investment community, to the public, or to
any person connected with, employed by or having a relationship with any of
them without permission of an officer of the Company or (2) that are
derogatory, defamatory or negative.
Nothing herein, however, shall prevent Grantee from making a good faith
report or complaint to appropriate governmental authorities. To the fullest extent permitted by law,
Grantee will not interfere with or disrupt any of the Company’s operations or
otherwise take actions intended directly to harm any of the Occidental Parties.
E.
All inventions,
developments, designs, improvements, discoveries and ideas that the Grantee
makes or conceives in the course of employment by the Company, whether or not
during regular working hours, relating to any design, article of manufacture,
machine, apparatus, process, method, composition of matter, product or any
improvement or component thereof, that are manufactured, sold, leased, used or
under development by, or pertain to the present or possible future business of
the Company shall be a work-for-hire and become and remain the property of
Occidental, its successors and assigns.
The
provisions of this Section do not apply to an invention that qualifies
fully under the provisions of Section 2870 of the California Labor Code,
which provides in substance that provisions in an employment agreement
providing that an employee shall assign or offer to assign rights in an
invention to his or her employer do not apply to an invention for which no
equipment, supplies, facilities, or trade secret information of the employer
was used and which was developed entirely on the employee’s own time,
except for those inventions that either (a) relate, at the time of
conception or reduction to practice of the invention, (1) to the business
of the employer or (2) to the employer’s actual or demonstrably
anticipated research or development, or (b) result from any work performed
by the employee for the employer.
9
F. The foregoing General Terms of
Employment are not intended to be an exclusive list of the employment terms and
conditions that apply to the Grantee.
The Company, in its sole discretion, may at any time amend or supplement
the foregoing terms. The Grantee’s
breach of the foregoing General Terms of Employment will entitle the Company to
take appropriate disciplinary action, including, without limitation, reduction
of the Total Shareholder Return Incentive Award granted pursuant to these Terms
and Conditions and termination of employment.
10
Attachment 2
Arbitration Provisions
Any dispute arising out of or in any way related to the Grantee’s
employment with the Company, or the termination of that employment, will be
decided exclusively by final and binding arbitration pursuant to any procedures
required by applicable law. To the
extent not inconsistent with applicable law, any arbitration will be submitted
to American Arbitration Association (“AAA”) and subject to AAA Employment
Arbitration Rules and Mediation Procedures in effect at the time of filing
of the demand for arbitration. Only the
following claims are excluded from these Terms and Conditions: (1) claims
for workers’ compensation, unemployment compensation, or state disability
benefits, and claims based upon any pension or welfare benefit plan the terms
of which contain an arbitration or other non-judicial dispute resolution
procedure, (2) to the extent permitted by applicable law, claims for
provisional remedies to maintain the status quo pending the outcome of
arbitration, (3) claims based on compensation award agreements and
incentive plans and (4) claims which are not permitted by applicable law
to be subject to a binding pre-dispute arbitration agreement.
Any controversy regarding whether a particular dispute is subject to
arbitration under this Section shall be decided by the arbitrator.
To the extent required under applicable law, the Grantee’s
responsibility for payment of the neutral arbitrator’s fees and expenses shall
be limited to an amount equal to the filing fee that would be required for a
state trial court action and the Company shall pay all remaining fees and
expenses of the arbitrator. Unless
otherwise required under applicable law, the parties shall each pay their pro
rata share of the neutral arbitrator’s expenses and fees. Any controversy regarding the payment of fees
and expenses under this arbitration provision shall be decided by the
arbitrator.
The arbitrator may award any form of remedy or relief (including
injunctive relief) that would otherwise be available in court. Any award pursuant to said arbitration shall
be accompanied by a written opinion of the arbitrator setting forth the reason
for the award. The award rendered by the
arbitrator shall be conclusive and binding upon the parties hereto, and
judgment upon the award may be entered, and enforcement may be sought in, any
court of competent jurisdiction. To the extent not inconsistent with applicable
laws, the arbitrator will have the authority to hear and grant motions.
11
Exhibit
99.5
MEMORANDUM OF UNDERSTANDING
The
undersigned parties to the shareholder action entitled
Resnik v.
Abraham, et al.
, Case No. 1:10-cv-00390-RK (the “Action”), now
pending in the United States District Court for the District of Delaware (the “Court”),
have reached an agreement in principle providing for the settlement of this
action on the terms and subject to the conditions set forth below.
WHEREAS,
the plaintiff in the Action is Ruby Resnik (“Plaintiff) and the defendants in
the Action are Spencer Abraham (“Abraham”), William Albrecht (“Albrecht”),
Donald P. de Brier (“de Brier”), John S. Chalsty (“Chalsty”), Stephen I. Chazen
(“Chazen”), Edward P. Djerejian (“Djerejian”), John E. Feick (“Feick”), Carlos
M. Gutierrez (“Gutierrez”), Ray R. Irani (“Irani”), Irwin W. Maloney (“Maloney”),
R. Casey Olsen (“Olsen”), Avedick Poladian (“Poladian”), Rodolfo Segovia (“Segovia”),
Aziz D. Syriani (“Syriani”), Rosemary Tomich (“Tomich”), Walter L. Weisman (“Weisman”),
Pearl Meyer & Partners, LLC (“Pearl Meyer”), and Occidental Petroleum
Corporation (“Occidental” or the “Company”) (collectively, the “Defendants”);
WHEREAS,
the Action seeks relief both directly against the Defendants and on behalf of
defendant Occidental based on, among other things, alleged violations of
Section 14(a) of the Securities Exchange Act of 1934, breaches of fiduciary
duties, and corporate waste;
WHEREAS,
Plaintiff alleges, more specifically, that:
(i) the compensation paid to the individual Defendants in 2009 was
excessive and unreasonable; (ii) Occidental’s March 23, 2010 proxy statement
(the “Proxy”) was false and misleading in representing to shareholders that
certain incentive compensation awards paid under the Company’s Long Term
Incentive Plan (the “LTIP”) could be tax deductible; and (iii) the Proxy was
MEMORANDUM OF
UNDERSTANDING
1
false
and misleading in representing to shareholders that the Company adheres to “pay-for-performance”
principles in awarding executive compensation;
WHEREAS,
following the advisory vote on executive compensation at the Company’s annual
meeting on Friday, May 7, 2010, the Compensation Committee of Occidental’s
Board of Directors (the “Compensation Committee”) discussed the need to
reevaluate the Company’s executive compensation philosophy and practices;
WHEREAS,
the Action was filed on Monday, May 10, 2010 and an amended complaint was filed
on August 9, 2010 (the “Amended Complaint) challenging the Company’s executive
compensation philosophy and practices;
WHEREAS,
on September 8, 2010, Defendants filed motions to dismiss that, if granted,
would dispose of the Action in its entirety;
WHEREAS,
the parties had a preliminary settlement meeting, at which Plaintiff’s counsel
made recommendations about proposed changes to the Company’s corporate
governance, executive compensation and shareholder disclosures;
WHEREAS,
following that meeting, Plaintiff’s counsel
made a written demand for a meeting with a representative of the Compensation
Committee to discuss Plaintiff’s proposals;
WHEREAS,
with defense counsel present the Chairman of the Compensation Committee
participated in a telephonic meeting with Plaintiff’s counsel, during which
counsel made a presentation regarding Plaintiff’s complaint and changes to the
Company’s corporate governance, executive compensation, and shareholder
disclosures that could serve as the basis for a potential resolution;
WHEREAS,
the Chairman of the Compensation Committee reported back to the Compensation
Committee on the substance of Plaintiff’s counsel’s presentation and the
Committee agreed to take Plaintiff’s proposals into account in its evaluation
of the
MEMORANDUM OF
UNDERSTANDING
2
Company’s
executive compensation philosophy and practices, and shareholder disclosures;
WHEREAS, the parties continued to discuss and
negotiate possible changes to the Company’s corporate governance, executive
compensation and shareholder disclosures, including in at least one additional
in-person meeting among counsel for the parties, until they finally reached an
agreement in principle providing for the proposed settlement of the Action (the
“Settlement”) on the terms and conditions set forth in this Memorandum of
Understanding (“MOU”);
WHEREAS,
Defendants deny the allegations and all other charges of wrongdoing or
liability arising out of any conduct, statements, acts or omissions relating to
Occidental’s executive compensation system, the Proxy, or any other alleged
wrongdoing that was contained or could have been contained in the Amended
Complaint;
WHEREAS, Plaintiff acknowledges and agrees that
the execution of this MOU by the Defendants is not an admission on the part of
any of the Defendants that they have in any way committed or attempted to
commit any violation of law or breach of fiduciary duty, including a breach of
any duty to Occidental, its shareholders or otherwise acted in any improper
manner;
WHEREAS, Defendants acknowledge and agree that
the execution of this MOU by Plaintiff is not an admission on the part of the
Plaintiff that the amended complaint lacks merit, is not sufficient, or
otherwise does not assert viable and triable claims as alleged; and
WHEREAS, the parties believe that the proposed
Settlement is in the best interests of Occidental and its shareholders.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND
AGREED, subject to approval of Occidental’s Board and the Court, by and among
the parties hereto, as follows:
MEMORANDUM OF
UNDERSTANDING
3
1.
Changes To
Executive Compensation, Corporate Governance, And Shareholder Disclosures
. In connection with the Settlement, Occidental
will implement the following changes:
(a)
Executive Compensation
. For compensation awarded after the date of
this Settlement:
(i)
The Occidental Board shall
reduce the dollar value of targeted and maximum compensation awards of the
Company’s Chief Executive Officer to levels commensurate with peer group chief
executives.
(ii)
Executive Chairman
compensation shall be commensurate with comparable positions taking into
account responsibilities and value added, but in no event shall exceed the Chief
Executive Officer’s compensation through the tenure of the Executive Chairman
position.
(iii)
In an effort to reduce the
level of executive compensation awards, the Compensation Committee shall cease
granting Return on Equity Incentive Awards, which were based on the Company’s
cumulative return on equity over a three-year period. The Compensation Committee shall continue to
award Total Stockholder Return Incentives (“TSRIs”), but will broaden the peer
group of oil and gas companies to 12 peer companies including Occidental (up
from the prior group of nine peer companies).
The Compensation Committee shall also grant restricted stock awarded
which will vest no earlier than three years from the date of the grant and will
be subject to attainment of a cumulative reported net income target.
(iv)
The Occidental Board shall
continue the current policy of having the substantial majority of executive pay
be performance based.
(v)
Nothing in this Settlement
shall preclude the Compensation Committee from regularly reviewing the
structure and metrics used in executive
MEMORANDUM OF
UNDERSTANDING
4
compensation
awards and making any changes in the future that it believes, in its business
judgment, are appropriate and desirable.
(b)
Corporate Governance
(i)
The Occidental Board shall
create a new position of Executive Chairman of the Board. The Board shall
delineate the duties of the Executive Chairman as contrasted from the duties of
the Chief Executive Officer.
(ii)
The Board shall appoint a
new Chief Executive Officer of the Company in 2011. The Board currently intends to appoint Irani
as Executive Chairman and Chazen as Chief Executive Officer.
(iii)
Irani shall continue to
serve as Executive Chairman at the discretion of the Occidental Board, but in
any event no longer than the date of his retirement from the Board on December
31, 2014. Upon retirement from the Board
and as Executive Chairman, Irani shall receive all of the benefits and
perquisites to which he is entitled under his employment agreement, dated
October 9, 2008.
(iv)
On a going forward basis,
waivers of the age limit of 75 for directors shall be granted only to Weisman
(through 2011) and Irani (through 2014).
(v)
Effective at the May 2015 annual
meeting of the Company, the Occidental Board shall enforce the mandatory
retirement age policy to require that no person 75 or older shall be nominated
as a director.
(vi)
The Occidental Board shall
adopt majority voting in elections of directors, but any incumbent director who
fails to receive a majority vote may serve until October 31 of the year of such
election (to allow the Board time to find a replacement director).
(vii)
The Occidental Board shall
eliminate the Executive Committee, with the Executive Committee’s prior
function becoming the responsibility of the entire Board.
MEMORANDUM OF
UNDERSTANDING
5
(viii)
The Company’s shareholders
shall be given an opportunity at the May 2014 Annual Meeting to vote for or
against a bylaw amendment splitting the Chief Executive Officer and Chairman
roles. The Company will take a neutral
or positive position on the issue.
(ix)
Nothing in this Settlement
shall preclude the Board from regularly reviewing the Company’s corporate
governance structure and making any changes in the future, including the
appointment, termination or repositioning of executives, that it believes, in
its business judgment, are appropriate and desirable.
(c)
Disclosures
(i)
The Occidental Board shall
clearly explain to shareholders how and why it sets specific compensation
targets.
(ii)
Proxy statements issued to
shareholders shall explain the meaning of “at risk” in describing the Company’s
“at risk, long term” incentive based approach to executive compensation.
(iii)
Proxy statements shall
delineate for shareholders what executive compensation awards are expected to
be tax deductible under Section 162(m) of the Internal Revenue Code (“Section
162(m)”) and those awards that are not expected to be tax deductible.
(iv)
Any proxy statements that
solicit shareholder reapproval of the material terms of the LTIP shall include
as an exhibit the LTIP in its entirety.
2.
Settlement
Documentation
. The parties
to the Action will attempt in good faith to agree upon and execute an
appropriate Stipulation of Settlement (the “Stipulation”) and such other
documentation as may be required to obtain final approval of the Settlement and
dismissal of the Action upon the terms outlined in this MOU (collectively, the “Settlement
Documents”). The Stipulation will
expressly provide for, among other things: (i) notice of the Settlement to be
given to shareholders on the
MEMORANDUM OF
UNDERSTANDING
6
Company’s
website and published in a national publication such as
USA Today
or such other notice as the Court may require (with such notice to be paid for
by, or on behalf of, Defendants); (ii) entry of a judgment of dismissal with
prejudice in the Action; (iii) a release and settlement of all known and
unknown claims for damages, injunctive relief, or any other remedies against
Plaintiff, their attorneys, respective predecessors, successors, parents,
subsidiaries, affiliates and agents based upon, arising from, or related to the
subject matter of the Action; and (iv) a release and settlement of all known
and unknown claims for damages, injunctive relief, or any other remedies
against all of the Defendants, their respective predecessors, successors,
parents, subsidiaries, affiliates, attorneys, and agents which have been or
could have been asserted by Plaintiff or derivatively on behalf of Occidental
based upon, arising from, or related to the subject matter of the Action (the “Released
Claims”). Should the parties be unable
to reach agreement on a Stipulation, then this MOU shall become final and
binding, subject to the conditions set forth in Section 6 below.
3.
Waiver Of
California Civil Code Section 1542 And Similar Provisions.
The Stipulation shall include a waiver of the
provisions of California Civil Code section 1542 and any similar provision
of the law of any other jurisdiction concerning all known and unknown claims
which have been or could have been asserted in the Action.
4.
Settlement
Approval
. The
Settlement is subject to final approval by the Court and dismissal of the
Action with prejudice and without awarding costs to any party (except as
provided in Section 5 below). The
parties shall submit the Settlement Documents first to the Court and then, upon
preliminary approval, provide notice to shareholders of the proposed
Settlement.
5.
Attorneys’ Fees
. Subject to Court approval, Occidental, its
insurers, or their respective successors in interest shall pay Plaintiff
attorneys’ fees in the amount of $525,000.00 and documented expenses not to
exceed $30,000.00 (the “Fees and Expenses”).
The Fees and Expenses shall be paid to Barrack, Rodos & Bacine
within
MEMORANDUM OF
UNDERSTANDING
7
fifteen
(15) business days after the date on which Defendants receive notice of the
entry of the Court’s Order and Final Judgment in the Action. Payment shall be subject to Plaintiff’s
counsel’s joint and several obligations to make appropriate refunds or
repayments to the Company if, as a result of any appeal and/or further
proceedings on remand, or successful collateral attack, the amount of Fees and
Expenses is reduced. Except as expressly
provided herein, Plaintiff and Plaintiff’s counsel shall bear their own fees,
costs and expenses, and no defendant shall assert any claim for expenses, costs
and fees against Plaintiff, or Plaintiff’s counsel. The Settlement is not in any way conditioned
upon the Court’s awarding of attorneys’ fees in any amount.
6.
Conditions of
Settlement
. The
Settlement shall not become effective until the first date all of the following
conditions have been satisfied, unless one or more of the conditions is
expressly waived in writing by counsel for each of the parties:
(a)
Approval by the Occidental
Board of this MOU;
(b)
Occidental has adopted or
agreed to adopt the changes outlined in Section 1 above;
(c)
The entry of judgment by the
Court in the Action approving the Settlement and dismissing with prejudice the
Action without awarding costs to any party, except as provided herein;
(d)
The judgment referred to in
subsection (c) above shall have become final and no longer subject to review,
either by the expiration of the time for appeals therefrom with no appeals
having been taken or, if an appeal is taken and not dismissed, by the
determination of the appeal by the highest court to which such appeal may be
taken in such a manner as to permit the consummation of the Settlement in
accordance with the terms and conditions of the Stipulation. The finality of the judgment shall not be
affected by an appeal solely of any fee award to Plaintiff’s counsel.
7.
Failure To Satisfy
Conditions
. This MOU
shall be null and void and of no force and effect if any of the conditions set
forth in Section 6 are not met. If the
MEMORANDUM OF
UNDERSTANDING
8
Settlement
outlined in this MOU is terminated or does not become effective, then this MOU
shall not be deemed to prejudice in any way the positions of the parties with
respect to the Action, or to constitute an admission of fact by any party, and
shall not entitle any party to recover any costs or expenses incurred in
connection with the implementation of this MOU, except as provided herein.
8.
Counterparts
. This MOU may be executed in counterparts,
including by signature transmitted by facsimile. Each counterpart when so executed shall be
deemed to be an original, and all such counterparts together shall constitute
the same instrument. The undersigned
signatories represent that they have authority from their clients to execute
this MOU.
9.
Governing Law
. Occidental is a Delaware corporation governed
by Delaware law. This MOU and the
Settlement contemplated by it shall be governed by, and construed in accordance
with, the laws of the State of Delaware without regard to conflict of laws
principles.
10.
Successors And Assigns
. Except as otherwise provided herein, this MOU
shall be binding upon and shall inure to the benefit of the parties and their
respective agents, successors, executors, heirs and assigns.
11.
Modification
. This MOU may be modified or amended only by a
writing signed by all of the signatories hereto.
12.
Best Efforts
. The parties agree to take all reasonable and
necessary steps to expeditiously implement the terms of this MOU and to
complete the Settlement in an expeditious manner.
13.
No Admission Of Liability
. Neither the existence of this MOU nor the
provisions contained herein shall be deemed a presumption, concession or
admission by Occidental or any of the Defendants of any breach of duty,
liability, default or wrongdoing as to any facts or claims alleged or asserted
in the Action, or in any other actions or proceedings, and shall not be
interpreted, construed, deemed, invoked, offered
MEMORANDUM OF
UNDERSTANDING
9
or
received in evidence or otherwise used in the Action or any other action or
proceeding of any nature whatsoever.
IT
IS HEREBY AGREED by the undersigned as dated below.
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DATED: October 13, 2010
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BARRACK, RODOS & BACINE
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By:
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/s/ A. Arnold Gershon
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A. ARNOLD GERSHON
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Attorneys for Plaintiff
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DATED: October 13, 2010
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SKADDEN, ARPS,
SLATE, MEAGHER & FLOM LLP
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By:
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/s/ Eric Waxman
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ERIC S. WAXMAN
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Attorneys for Defendants William Albrecht,
Donald P. de Brier, Stephen I. Chazen, Ray R. Irani, R. Casey Olsen, and
Nominal Defendant Occidental Petroleum Corporation
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DATED: October 13, 2010
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RICHARDS, LAYTON & FINGER LLP
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By:
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/s/ Allen M. Terrell
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ALLEN TERRELL
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Attorneys for Defendants Spencer Abraham, John S. Chalsty, Edward P.
Djerejian, John E. Feick, Carlos M. Gutierrez, Irvin W. Maloney, Avedick
Poladian, Rodolfo Segovia, Aziz D. Syriani, Rosemary Tomich, and Walter L.
Weisman
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DATED: October 13, 2010
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FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
LLP
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By:
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/s/ Peter L. Simmons
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PETER L. SIMMONS
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Attorneys for Defendant Pearl Meyer &
Partners, LLC
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MEMORANDUM OF
UNDERSTANDING
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