EXHIBIT 10.2
OCCIDENTAL PETROLEUM CORPORATION
2001 INCENTIVE COMPENSATION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
NAME OF OPTIONEE:
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DATE OF GRANT:
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NUMBER OF OPTIONED SHARES:
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OPTION PRICE:
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VESTING SCHEDULE: 1ST ANNIVERSARY OPTIONED SHARES
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2ND ANNIVERSARY OPTIONED SHARES
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3RD ANNIVERSARY OPTIONED SHARES
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EXPIRATION DATE:
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AGREEMENT (this "Agreement") made as of the Date of Grant between OCCIDENTAL
PETROLEUM CORPORATION, a Delaware corporation ("Occidental") and, with its
subsidiaries, (the "Company"), and Optionee.
1. GRANT OF STOCK OPTION. Occidental grants to the Optionee as of the Date of
Grant a stock option (this "Option") to purchase up to the number of Optioned
Shares at the Option Price, from time to time, in accordance with the terms of
this Agreement and the Occidental Petroleum Corporation 2001 Incentive
Compensation Plan, as amended from time to time (the "Plan"). This Option shall
not be an "incentive stock option" within the meaning of that term under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), or any
successor provision thereto.
2. TERM OF OPTION. The term of this Option begins on the Date of Grant and
expires on the tenth anniversary of the Date of Grant (the "Expiration Date")
unless it is terminated earlier as provided in Section 6.
3. RIGHT TO EXERCISE. Unless this Option has expired, terminated, or
accelerated, on each anniversary of the Date of Grant the number of Optioned
Shares indicated above in the Vesting Schedule for such anniversary will become
exercisable on a cumulative basis until this Option is fully exercisable. This
Option may be exercised, in whole or in part, only for the number of Optioned
Shares that are vested on the date the Optionee gives notice of exercise. The
last date to exercise this Option is the New York Stock Exchange trading day
prior to the earlier of the date this Option terminates and the Expiration Date.
4. OPTION NONTRANSFERABLE. This Option may not be transferred nor assigned by
the Optionee other than to a beneficiary designated on a form approved by the
Company, by will or, if the Optionee dies without designating a beneficiary or a
valid will, by the laws of descent and distribution. During the Optionee's
lifetime, only the Optionee, or in the event of his or her legal incapacity, a
properly appointed guardian or legal representative, may exercise this Option.
5. NOTICE OF EXERCISE; PAYMENT.
(a) To exercise this Option, the Optionee must give oral or written notice
on a day that the New York Stock Exchange is open for trading to Occidental or
any agent designated by Occidental to administer grants made under the Plan. If
Occidental has designated an agent, notice must be given to the agent to be
effective. The notice of exercise must state the number of Optioned Shares for
which this Option is being exercised and the manner of payment. The date the
notice is received is the exercise date unless notice is received after the
close of trading on the New York Stock Exchange, in which case the
exercise date is the next trading day on the New York Stock Exchange. Any oral
notice of exercise shall be confirmed in writing the same day before the close
of trading on the New York Stock Exchange.
(b) Payment equal to the aggregate Option Price of the Optioned Shares
must be:
(i) in cash in the form of a certified or cashiers check or wire
transfer,
(ii) by actual or constructive transfer to Occidental of
nonforfeitable, nonrestricted Common Shares acquired by the
Optionee more than six (6) months prior to the date of exercise,
or
(iii) by any combination of the foregoing methods of payment.
Common Shares that are transferred by the Optionee in payment of all or any part
of the Option Price shall be valued on the basis of their Fair Market Value on
the date of exercise. The requirement to pay cash shall be satisfied if the
Optionee makes arrangements with a broker that is a member of the National
Association of Securities Dealers, Inc. to sell a sufficient number of the
Optioned Shares, so that the net proceeds of the sale transaction will at least
equal the amount of the aggregate Option Price plus the amount of any taxes
required to be withheld, and pursuant to which the broker undertakes to deliver
the amount of the aggregate Option Price plus the amount of any taxes required
to be withheld, not later than the date on which the sale transaction will
settle in the ordinary course of business.
6. TERMINATION OF AGREEMENT AND RIGHT TO EXERCISE. This Agreement and the
right to exercise this Option terminate automatically and without further notice
on the date the Optionee ceases to be an employee of the Company for any reason
whatsoever, except as follows:
(a) IF THE OPTIONEE DIES, the Optioned Shares will vest immediately as of
the date of the Optionee's death for the full number of Optioned Shares and this
Option may be exercised up to the Expiration Date by a transferee acceptable
under Section 4.
(b) IF THE OPTIONEE BECOMES PERMANENTLY AND TOTALLY DISABLED, the Optioned
Shares will continue to vest in accordance with the Vesting Schedule and this
Option may be exercised up to the Expiration Date. For purposes of this
Agreement, "to be permanently and totally disabled" means to be unable to engage
in any substantial gainful activity by reason of an impairment which can be
expected to result in death or which has lasted, or can be expected to last for
a continuous period of at least twelve (12) months.
(c) IF THE OPTIONEE RETIRES, the Optioned Shares will continue to vest in
accordance with the Vesting Schedule and this Option may be exercised up to the
Expiration Date. For purposes of this Agreement, "retire" means to retire either
under a Company-sponsored retirement plan or with the consent of the Company.
(d) IF THE OPTIONEE TERMINATES EMPLOYMENT WITH THE COMPANY FOR ANY REASON
OTHER THAN DEATH, PERMANENT AND TOTAL DISABILITY, RETIREMENT OR CAUSE, the
Optioned Shares will cease to vest as of the close of business on the last day
of Optionee's employment and this Option may be exercised up to the sooner of
(i) three (3) months following the last day of Optionee's employment and (ii)
the Expiration Date but only for the number of Optioned Shares exercisable as of
the Optionee's last day of employment pursuant to the Vesting Schedule. For the
purposes of this Agreement, "cause" means the Optionee's (w) failure to
satisfactorily perform the duties of his or her job or negligence in carrying
out the Company's legal obligations, (x) refusal to carry out any lawful order
of the Company, (y) breach of any legal duty to the Company; or (z) conduct
constituting moral turpitude or conviction of a crime which may diminish
Optionee's ability to effectively act on the Company's behalf or with or on
behalf of others.
For the purposes of this Agreement, the continuous employment of the Optionee
with the Company will not be interrupted, and the Optionee will not be deemed to
cease to be an employee of the Company, by
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reason of the transfer of his or her employment among the Company and its
affiliates or an approved leave of absence.
7. ACCELERATION OF OPTION. If a Change in Control Event as defined in the Plan
occurs, this Option shall become immediately exercisable for the full number of
Optioned Shares unless prior to the occurrence of the Change in Control Event,
the Administrator, as provided in Section 6.1 of the Plan, determines that such
Event will not accelerate this Option or that acceleration will occur for only
part of this Option or at a different time. Any such determination by the
Administrator is binding on the Optionee.
8. NO EMPLOYMENT CONTRACT. Nothing in this Agreement confers upon the Optionee
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 Optionee.
9. TAXES AND WITHHOLDING. If the Company must withhold any federal, state,
local or foreign tax in connection with the exercise of the Option, the Optionee
must pay the tax or make provisions that are satisfactory to the Company for the
payment thereof. The Optionee may satisfy all or any part of any such
withholding obligation by surrendering to the Company Common Shares that satisfy
the requirements of Section 5(b)(ii) or a portion of the Common Shares that are
issued to the Optionee upon the exercise of the Option. Any Common Shares so
surrendered by the Optionee shall be credited against the Optionee's withholding
obligation at their Fair Market Value on the date of exercise.
10. COMPLIANCE WITH LAW. The Company will make reasonable efforts to comply
with all applicable federal and state securities laws; however, this Option is
not exercisable if its exercise would result in a violation of any such law.
11. ADJUSTMENTS. The Option Price and the number or kind of shares of stock
covered by this Option may be adjusted as the Administrator determines pursuant
to Section 6.2 of the Plan in order to prevent dilution or expansion of the
Optionee's rights under this Agreement as a result of events such as stock
dividends, stock splits, or other change in the capital structure of Occidental,
or any merger, consolidation, spin-off, liquidation or other corporate
transaction or event having a similar effect. If any such adjustment occurs, the
Company will give the Optionee written notice of the adjustment containing an
explanation of the nature of the adjustment.
12. RELATION TO OTHER BENEFITS. The benefits received by the Optionee under
this Agreement will not be taken into account in determining any benefits to
which the Optionee 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 Optionee under
any life insurance plan covering employees of the Company.
13. AMENDMENTS. Any amendment to the Plan will be deemed to be an amendment to
this Agreement to the extent it is applicable to this Agreement; however, no
amendment will adversely affect the rights of the Optionee under this Agreement
without the Optionee's consent.
14. SEVERABILITY. If one or more of the provisions of this Agreement 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 this
Agreement, and the remaining provisions of this Agreement will continue to be
valid and fully enforceable.
15. RELATION TO PLAN; INTERPRETATION. This Agreement is subject to the terms
and conditions of the Plan. In the event of any inconsistent provisions between
this Agreement and the Plan, the provisions of the Plan control. Capitalized
terms used in this Agreement without definition have the meanings assigned to
them in the Plan. References to Sections are to Sections of this Agreement
unless otherwise noted.
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16. ADMINISTRATIVE PROCEDURES. The Administrator, directly or through its
Agent, reserves the right to adopt procedures with respect to the exercise of
this Option. In the event of any inconsistent provisions between such
procedures, this Agreement and the Plan, the provisions of the Plan control.
17. SUCCESSORS AND ASSIGNS. Subject to Section 4, the provisions of this
Agreement shall be for the benefit of, and be binding upon, the successors,
administrators, heirs, legal representatives and assigns of the Optionee, and
the successors and assigns of the Company.
18. GOVERNING LAW. The laws of the State of Delaware govern the interpretation,
performance, and enforcement of this Agreement.
19. NOTICES. Except as the Company may otherwise direct for exercise notices,
any notice to the Company provided for in this Agreement will be given to its
Secretary at 10889 Wilshire Boulevard, Los Angeles, California 90024, and any
notice to the Optionee will be addressed to the Optionee at his or her address
currently on file with the Company. Except as provided in Section 5 for exercise
notices, any written notice will be deemed to be duly given when received if
delivered personally or sent by telecopy, e-mail, or the United States mail,
first class registered mail, postage and fees prepaid, and addressed as provided
in this paragraph. Any party may change the address to which notices are to be
given by written notice to the other party as specified in the preceding
sentence.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer and Optionee has also executed this
Agreement in duplicate, effective as of the Date of Grant.
OCCIDENTAL PETROLEUM CORPORATION
By:
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Optionee
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