EXHIBIT 10.1
OCCIDENTAL PETROLEUM CORPORATION
1987 STOCK OPTION PLAN
(AS AMENDED THROUGH SEPTEMBER 12, 2002)
1. PURPOSE. The purpose of this Stock Option Plan (the "Plan") is to
enhance the value of the stockholders' investment in Occidental Petroleum
Corporation (the "Company") by encouraging key employees, upon whose performance
the Company and its subsidiaries is largely dependent for the successful conduct
of its operations, to acquire and retain a financial interest in the Company. In
addition, the Plan is intended to enable the Company and its subsidiaries to
compete effectively for and retain the services of such employees.
It is intended that incentive stock options ("ISOs") (as defined by
Section 422A of the Internal Revenue Code of 1986, as amended or superseded (the
"Code")), other stock options, and stock appreciation rights ("SARs") may be
granted under this Plan.
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by a committee (the "Option
Committee") which shall be constituted so as to permit the Plan to continue to
comply with Rule 16b-3, as currently in effect or as hereafter modified or
amended, promulgated under the Securities Exchange Act of 1934, as amended. The
interpretation and construction of any provision of the Plan or any option or
right granted hereunder and all determinations by the Option Committee in each
case shall be final, binding and conclusive with respect to all interested
parties, unless otherwise determined by the board of directors. No member of the
Option Committee shall be personally liable for any action, failure to act,
determination, interpretation or construction made in good faith with respect to
the Plan or any option or right or transaction thereunder.
(b) The Option Committee shall have full power and authority in its
discretion, subject to and not inconsistent with the express provisions of the
Plan, to take any and all action required or permitted to be taken under the
Plan. Such full power and authority shall include, without limitation, the
selection of participants to whom stock options or stock appreciation rights may
be granted pursuant to the Plan; the determination of the number of shares of
Common Stock which may be covered by stock options or stock appreciation rights
granted to any such participant of the Plan and the purchase price thereof; the
granting of options and related rights; the right to interpret and construct any
provision of the Plan or any option or right granted hereunder; the making of
all required or appropriate determinations under the Plan or any option or right
granted hereunder; the fixing and determining of the terms, provisions,
conditions and restrictions of all option instruments or agreements (and any
related rights), which need not be identical, entered into or issued in
connection with grants under the Plan; and the adoption, amendment and
rescission of such rules and regulations relating to the Plan as the Option
Committee shall determine in its discretion subject to the express provisions of
the Plan.
(c) Notwithstanding the provisions of Section 5 regarding the term of
this Plan, all authority of the Board and the Option Committee with respect to
options granted hereunder, including (subject to share limits) the authority to
amend outstanding options, shall continue after
the term of this Plan, so long as any option remains outstanding. The Option
Committee shall have the authority to amend options to allow a deferred payment
in respect of such option under any deferred compensation plan of the Company,
consistent with Section 6(l). Any such settlement or deferral shall not be
deemed a new grant hereunder so long as all shares issuable under this Plan in
respect thereof do not exceed the aggregate number of shares subject to the
options so paid thereby. If the delivery of shares has been deferred in
accordance with the foregoing or Section 6(l), such shares shall be charged
against the share limits of this Plan and shall not again become available for
other purposes under this Plan, regardless of whether such deferred shares are
eventually issued under a Company deferred compensation plan. The authority of
the Committee shall continue in respect of any deferral so authorized.
3. PARTICIPANTS. Participants in the Plan shall be key employees of the
Company or its subsidiaries selected as hereinafter provided. Key employees may
include officers of the Company or its subsidiaries who are also directors of
the Company but not directors who are not employees of the Company or its
subsidiaries. Nothing contained in this Plan, nor in any option or right granted
pursuant to the Plan, shall confer upon any employee any right to continue in
the employ of the Company or any subsidiary nor limit in any way the right of
the Company or any subsidiary to terminate his employment at any time.
4. THE STOCK. The shares of stock available for the grant of options
(with or without a related SAR) under this Plan shall consist of 9,000,000
shares of Common Stock, par value $.20 per share (the "Common Stock"), of the
Company, subject to adjustment as provided in Section 8 hereof. Such number of
shares may be set aside out of the authorized but unissued Common Stock of the
Company not reserved for any purpose or out of Common Stock held in or acquired
for the treasury of the Company. Should an option be terminated for any reason
without being exercised or cancelled in whole or in part, the shares subject to
the portion of the option not so exercised, but which is cancelled, shall be
available for subsequent grants under this Plan; provided, however, that if such
option or part thereof is surrendered by the optionee by reason of the exercise
of a related SAR or other rights granted hereunder, then the shares represented
by such option or part shall not be available for subsequent grants under this
Plan. If "Rights" (as such term is defined in that certain Rights Agreement,
dated as of October 17, 1986, between the Company and Manufacturers Hanover
Trust Company as successor Rights Agent, as such Rights Agreement may be
supplemented or amended (the "Rights Agreement")) would be issuable in
connection with issuances of Common Stock at the time of exercise of an option
under this Plan, then such option shall also entitle the optionee to receive
Rights to the extent set forth in the Rights Agreement.
5. EFFECTIVE DATE AND TERMINATION OF PLAN. The Plan shall become
effective on May 21, 1987 subject to ratification and approval of the Plan by
the affirmative vote of the holders of a majority of the securities of the
Company present, either in person or by proxy and entitled to vote thereat, at a
duly held meeting held within twelve (12) months of the adoption of the Plan by
the board of directors. This Plan shall terminate upon the earlier of (i) May
20, 1997; or (ii) the date on which all shares available for issuance under the
Plan have been issued pursuant to the exercise of options granted hereunder or
with respect to which payments have been made upon the exercise of a related SAR
or other rights; or (iii) the determination of the board of directors
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that the Plan shall terminate. No options may be granted under the Plan after
the termination date, provided that the options granted and outstanding on such
date shall continue to have force and effect in accordance with the provisions
of the instruments evidencing such options.
6. GRANT, TERMS AND CONDITIONS OF OPTIONS. Options may be granted at any
time and from time to time prior to the termination of the Plan to such eligible
employees and on such terms and conditions as determined by the Option
Committee. All options shall be granted under the Plan by execution of
instruments in writing in the form approved by the Option Committee.
Notwithstanding any contrary provision of this Plan other than Section 9 hereof,
with respect to any ISOs granted under any plan of the Company or its
subsidiaries or any parent, the aggregate fair market value (determined at the
time the option is granted) of the shares with respect to which such ISOs are
exercisable for the first time by an optionee during any calendar year (under
all such plans of the Company and its subsidiaries and any parent) shall not
exceed One Hundred Thousand Dollars ($100,000.00).
All options granted pursuant to the Plan shall be subject to the
following terms and conditions and such other terms and conditions determined by
the Option Committee which are not inconsistent therewith:
(a) Price. The option exercise price per share of each option shall be
determined by the Option Committee, provided that in no instance shall such
price be less than the fair market value of a share of Common Stock (as defined
by subsection (j) hereof) on the date the option is granted. The option exercise
price shall be subject to adjustment only as provided in Section 8 hereof.
(b) Term of Options. Options other than ISOs may be granted for terms of
up to but not exceeding ten (10) years and one (1) month from the date the
particular option is granted. ISOs may be granted for terms up to but not
exceeding ten (10) years from the date the particular option is granted. Each
such option shall be subject to earlier termination as provided in subsection
(f) of this Section 6.
(c) Exercise of Options. Each option granted under this Plan shall be
exercisable on such date or dates and during such period and for such number of
shares as shall be determined pursuant to the provisions of the instrument
evidencing such option. An option may not be exercised as to less than ten (10)
shares at any one time, unless the remaining shares then purchasable under the
option are less than ten (10) shares, in which case the optionee must purchase
all unpurchased shares. No fractional shares shall be issued, and fractional
shares remaining in any option shall be rounded down to the nearest whole number
of shares.
(d) Alternate Exercise in Case of Hardship. In the case of options other
than ISOs, in the event of either:
(i) the death of the optionee (subject to Section 6(f)(ii)
hereof), or
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(ii) the imminent expiration of the option where the optionee is
absent from the United States or is otherwise subject to a hardship which
renders exercise of the option by such optionee unreasonable or impossible prior
to its expiration date, the Option Committee in its sole and absolute discretion
may issue or cause to have issued to the optionee or his estate (in lieu of the
exercise of said option) the number of shares which represent the difference (if
any) between the aggregate option exercise price and the aggregate fair market
value of the shares of Common Stock with respect to which the option is then
exercisable, determined as of the date of issuance of said shares. In such event
the option shall be deemed fully exercised for all purposes hereof and all
shares represented by said option (whether or not issued under this subsection
(d)) shall not be available for future grant or issuance under this Plan.
Without limiting the generality of the foregoing or subsection (c) of this
Section 6, no fractional shares shall be issued, and any fractional shares
remaining shall be rounded down to the nearest whole number of shares.
(e) Notice of Exercise and Payment. To the extent that the option is then
exercisable, an option shall be exercised by oral or written notice to the
Company, stating the number of shares with respect to which the option is being
exercised and the intended manner of payment. The date of the notice shall be
the exercise date. Any oral notice of exercise shall be confirmed in writing in
all cases to the Company no later than concurrently with payment for the shares
as required herein. Payment for the shares purchased shall be made in full to
the Company within ten (10) business days after the exercise date in cash or
check payable to the order of the Company equal to the option price for the
shares being purchased , in whole shares of Common Stock of the Company owned by
the optionee having a fair market value on the exercise date (as define by
subsection (j) hereof) equal to the option price for the shares being purchased,
or a combination of Common Stock and cash or check payable to the order of the
Company, equal in the aggregate to the option price for the shares being
purchased. Payment of Common Stock shall be made either (a) by delivery of stock
certificates properly endorsed for transfer in negotiable form or (b) by
attestation pursuant to procedures established by the Option Committee. If other
than the optionee, the person or persons exercising the option shall be required
to furnish to the Company appropriate documentation that such person or persons
have the full legal right and power to exercise the option on behalf of and for
the optionee.
(f) Termination of Employment. Upon the termination of the employment of
an optionee his rights to exercise any option then held by him shall be as
follows:
(i) Retirement or Disability. If the employment is terminated
because of retirement under any pension or retirement plan of the Company or its
subsidiaries, or because of disability or for any other reason as approved in
the sole discretion of the Option Committee, each option other than an ISO then
held by the optionee shall terminate on the earlier of (a) eighteen (18) months
after termination of employment or (b) the fixed expiration date of said option.
In the case of ISOs, if the employment of the optionee terminates by reason of
retirement (as defined herein) or disability, each ISO then held by the optionee
shall terminate on the earlier of (a) three (3) months after termination of
employment or (b) the fixed expiration date of said option; provided further
that if such termination of employment occurs by reason of disability within the
meaning of Section 422A(c)(7) of the Code said three (3) month period shall be
extended to one (1) year.
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(ii) Death. If the employment of the optionee is terminated by
reason of death, each option held by the optionee on the date of his death shall
be exercisable by his estate and shall terminate on the earlier of (a) twelve
(12) months after the date of death or (b) the fixed expiration date of said
option. For purposes hereof, the estate of an optionee shall be defined to
include the legal representatives thereof of any other person who has acquired
the right to exercise an option by reason of the death of the optionee.
(iii) Terminations without Cause. If the employment of the
optionee is terminated without cause for any reason other than provided in
subpart (i) or (ii) of this subsection and other than by voluntary resignation,
each option then held by the optionee shall terminate on the earlier of (a)
thirty (30) days after termination of employment or (b) the fixed expiration
date of said option.
(iv) Terminations for Cause or by Voluntary Resignation. If the
employment of the optionee is terminated for cause or by voluntary resignation,
any and all options held by the optionee shall immediately terminate without
regard to services rendered on or prior to the date of termination or any other
payments or benefits made or transferred to the optionee as a result of or
related to said termination. For purposes hereof, termination of employment for
cause shall be deemed to occur upon receipt by the optionee of notice or advice
(whether written or oral) that his employment is terminated.
(v) Other Restrictions. Notwithstanding any contrary provision
hereof, no option shall be exercisable after the fixed expiration date provided
in the option, nor for any number of shares in excess of the number of shares
for which the option is then exercisable on the date of termination of
employment; provided that the Option Committee in its discretion may permit the
full exercise of any option other than an ISO which is held by an optionee who
has terminated employment other than for cause or by voluntary resignation.
Without limiting the generality of Section 2 hereof, the Option Committee in
each case shall have the authority to determine the reason for and date of
termination of employment, which determination shall be final, binding and
conclusive on all interested parties.
(g) Transferability of Options. Any option granted hereunder shall be
transferable only by will or the laws of descent and distribution and shall be
exercisable during the lifetime of the optionee only by him.
(h) Other Terms and Conditions. Options may contain such other terms,
conditions or provisions, which shall not be inconsistent with this Plan, as the
Option Committee shall deem appropriate.
(i) Tax Withholding. Any option (and related SAR or other right, if any)
granted hereunder shall provided as determined by the Option Committee for
appropriate arrangements for the satisfaction by the Company and the optionee of
all federal, state, local or other income, excise or employment taxes or tax
withholding requirements applicable to the exercise of the option or any related
SAR or other right or payment or the later disposition of the shares of
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Common Stock or other property thereby acquired and all such additional taxes or
amounts as determined by the Option Committee in its discretion, including
without limitation the right of the Company or any subsidiary thereof to deduct
or withhold in the form of cash or shares from any transfer or payment to an
optionee or to receive transfers of shares of Common Stock or other property
from the optionee, in such amount or amounts deemed required or appropriate by
the Option Committee in its discretion.
(j) Fair Market Value. The "fair market value" of a share of Common Stock
on any relevant date for purposes of any provision of this Plan shall be the
last reported sales price of a share of Common Stock on the New York Stock
Exchange--Composite Transactions on such 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.
(k) Cancellation of Option. The Option Committee shall have the authority
to effect, at any time and from time to time, with the consent of the affected
optionee or optionees, the cancellation of any or all outstanding options
granted under the Plan and the grant in substitution therefor of new options
under the Plan (subject to the limitations hereof) covering the same or
different numbers of shares of Common Stock at an option price per share in all
events not less than fair market value on the new grant date (as determined
under subsection (j) of this Section 6).
(l) The Option Committee may allow the delayed payment or delivery of
shares of Common Stock that may become due under this Plan. Without limiting the
generality of the foregoing, the deferral of any shares of Common Stock
distributable upon the exercise of a nonqualified stock option may be in the
form of deferred shares under the Occidental Petroleum Corporation Deferred
Stock Program.
7. STOCK APPRECIATION RIGHTS. Any option granted or to be granted under
this plan may, in the sole and absolute discretion of the Option Committee,
include a related stock appreciation right ("SAR") with respect to all or part
of the shares of Common Stock subject to said option as determined by the Option
Committee. Said SAR may be granted at the time said option is granted or (in the
case of options other than ISOs) at a later date with respect to any existing
option. Optionees granted an SAR may exercise the SAR by oral or written notice
to the Company, stating the number of shares with respect to which the SAR is
being exercised, to the extent that said SAR is then exercisable. Any oral
notice of exercise of said SAR shall be confirmed in writing in all cases no
later than the date of payment to the optionee. In the event of the exercise of
an SAR, the obligation of the Company in respect of the option to which the SAR
relates (or such portion thereof) shall be discharged by payment of the SAR so
exercised.
(a) SAR Payment. Any SAR granted hereunder shall set forth the method of
computation and form of payment of the SAR and such other terms and conditions
as determined by the Option Committee in its discretion or as otherwise required
by this Plan, provided that no SAR shall exceed the difference between 100
percent of the then fair market value on the date of exercise of the shares of
Common Stock subject to the option or portion thereof surrendered by the
optionee, and the aggregate option exercise price of such shares. Without
limiting the
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generality of the foregoing, the Option Committee may provide for the payment of
said SAR in cash or in shares of Common Stock valued at fair market value as of
the date of exercise, or in any combination thereof as determined by the Option
Committee.
(b) Other Provisions. Not withstanding any contrary provision hereof: (i)
All SARs shall expire upon expiration of the option to which such SAR relates,
and all SARs shall be exercisable only to the extent the option to which such
SAR relates is then exercisable (further subject to such additional conditions
and restrictions as may be imposed by the Option Committee), and (ii) in the
case of any SAR related to an ISO grant hereunder said SAR shall be exercisable
only when the then fair market value of the shares of Common Stock subject to
the option (or portion thereof) surrendered by the optionee exceeds the exercise
price of such option (or such portion thereof).
(c) "Option". References in this Plan to the term "option" shall, where
appropriate, include an SAR.
8. ADJUSTMENT AND CHANGES IN THE COMMON STOCK.
(a) In the event that the shares of Common Stock as presently constitute
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Company or of another corporation (whether by
reason of merger, consolidation, recapitalization, reclassification, split-up,
combination of shares or otherwise) or if the number of such shares of stock
shall be increased through the payment of a stock dividend, then unless such
change results in the termination of all outstanding options pursuant to the
provisions of Section 9 hereof, there shall be substituted for or added to each
share of stock of the Company theretofore appropriated or thereafter subject or
which may become subject to an option under this Plan, the number and kind of
shares of stock or other securities into which each outstanding share of stock
of the Company shall be so changed, or for which each such share shall be
exchanged, or to which each such share shall be entitled, as the case may be.
Outstanding options shall also be appropriately amended as to price and other
terms as may be necessary to reflect the foregoing events. In the event there
shall be any other change in the number or kind of the outstanding shares of the
stock of the Company, or of any stock or other securities into which such stock
shall have been changed, or for which it shall have been exchanged, then if the
Option Committee shall, in its sole discretion, determine that such change
equitably requires an adjustment in any option theretofore granted or which may
be granted under the Plan, such adjustment shall be made in accordance with such
determination. Fractional shares resulting from any adjustment in options
pursuant to this Section 8 shall be rounded down to the nearest whole number of
shares.
(b) Notwithstanding the foregoing, any and all adjustments in connection
with an ISO shall comply in all respects with Sections 422A and 425 of the Code
and the regulations thereunder.
(c) Notice of any adjustment shall be given by the Company to each holder
of an option which shall have been so adjusted, provided that such adjustment
(whether or not such notice is
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given) shall be effective and binding for all purposes of the Plan and any
instrument or agreement issued thereunder.
9. ACCELERATION OF OPTIONS.
(a) In the event that the Company enters into one or more agreements to
dispose of all or substantially all of the assets of the Company or the
Company's stockholders dispose of or become obligated to dispose of 50% or more
of the outstanding capital stock of the company other than to the Company or a
subsidiary of the Company, in either case by means of sale (whether as a result
of a tender offer or otherwise), merger, reorganization or liquidation in one or
a series of related transactions ("Acceleration Event"), then each option
outstanding under the Plan shall become exercisable during the fifteen (15) days
immediately prior to the scheduled consummation of the Acceleration Event with
respect to the full number of shares for which such option has been granted;
provided, however, that no such Acceleration Event shall occur in the event that
(i) the primary purpose of the transaction is to change the Company's domicile
solely within the United States, (ii) the terms of the agreement(s) require as a
prerequisite for the consummation of the transaction that each such option shall
either be assumed by the successor corporation or parent thereof or be replaced
with a comparable option to purchase shares of capital stock of the successor
corporation or parent thereof, and (iii) the transaction is approved by a
majority of the members of the board of directors of the Company who had either
been in office for more than twelve months prior to such transaction or had been
elected, or nominated for election by the Company's stockholders, by the vote of
three-fourths of the directors then still in office who were directors at the
beginning of such twelve-month period; and provided further that any such
exercise of an option during such fifteen (15) day period shall be conditioned
upon the consummation of such transaction and shall be effective only
immediately before such consummation, except to the extent that an optionee may
indicate, in writing, that such exercise is unconditional with regard to all or
part of the unaccelerated portion of the option. Upon consummation of the
Acceleration Event contemplated by said agreement, all outstanding options,
whether or not accelerated, shall terminate and cease to be exercisable, unless
assumed by the successor corporation or parent thereof.
(b) In the event of the occurrence of an Acceleration Event (as defined
by subsection (a) of this Section 7), any optionee who is subject to the filing
requirements imposed under Section 16(a) of the Securities Exchange Act of 1934
with respect to the Company shall receive a payment of cash equal to the
difference between the aggregate Fair Value of the share of Common Stock subject
to such accelerated option and the aggregate option exercise price of such
shares. For this purpose, "Fair Value" shall mean the highest aggregate fair
market value of the subject shares of Common Stock during the 60-day period
immediately preceding the date of the consummation of the Acceleration Event (as
determined under Section 6(j) hereof). Payment of said cash shall be made within
10 days after said consummation of the Acceleration Event. The foregoing
payments under this subsection (b) shall be made in lieu of and in full
discharge of any and all obligations of the Company in respect of all subject
options and any related SARs of the optionee. Notwithstanding any of the
foregoing, the provisions of this subsection (b) shall not be applicable to ISOs
granted under this Plan.
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(c) The grant of options (or related rights) under this Plan shall in no
way affect the right of the Company to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
10. LISTING AND REGULATORY REQUIREMENTS. No option granted pursuant to
this Plan shall be exercisable in whole or in part if at any time the Option
Committee shall determine in its discretion that the listing, registration or
qualification of the shares of Common Stock subject to such option on any
securities exchange or under any applicable law, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a condition of,
or in connection with, the granting of such option or the issue of shares
thereunder, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Option Committee.
11. AMENDMENT OF THE PLAN. The board of directors may from time to time
amend or modify or make such changes in and additions to this Plan as it may
deem desirable, without further action on the part of the stockholders of the
Company; provided, however, that unless the holders of a majority of the
securities of the Company present or represented and entitled to vote at a duly
held meeting shall have first given their approval, then (a) the maximum number
of shares of Common Stock issuable under the Plan shall not be increased (except
for permissible adjustments under Section 8 hereof), (b) the benefits accruing
to the participants in the Plan shall not be materially increased, and (c) the
requirements as to eligibility for participation in the Plan shall not be
modified. Subject to and without limiting the generality of the foregoing, the
board of directors may amend or modify the Plan and any outstanding options
under the Plan to the extent necessary to qualify any or all of such options or
future options to be granted for such beneficial federal income tax treatment as
may be afforded employee stock options under the Code or any amendments thereto
or other statutes or regulations or rules (or any interpretations thereof by any
applicable governmental agency or entity) which become effective after the
effective date of the Plan (including without limitation any proposed or final
Treasury regulations).
12. STOCKHOLDER RIGHTS. An optionee shall have none of the rights of a
stockholder of the Company with respect to any shares subject to any option
granted hereunder until such individual shall have exercised the option and been
issued shares therefor.
13. USE OF PROCEEDS. The proceeds received by the Company from the sale
of shares pursuant to the options granted under this Plan shall be used for
general corporate purposes.
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