EXHIBIT 10.3
OCCIDENTAL PETROLEUM CORPORATION
2001 INCENTIVE COMPENSATION PLAN
STOCK APPRECIATION RIGHTS (SARs)
TERMS AND CONDITIONS
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Date of Grant:
Number of SARs: See "Shares Granted/Awarded" (Grant Acknowledgement screen)
Grant Price:
Expiration Date:
Vesting Schedule: 1st Anniversary 33 1/3 Percent of Number of SARs
2nd Anniversary 33 1/3 Percent of Number of SARs
3rd Anniversary 33 1/3 Percent of Number of SARs
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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 grant (the "Grantee").
1. STOCK APPRECIATION RIGHTS. For the purposes of these Terms and Conditions,
a Stock Appreciation Right ("SAR") is the right to receive in cash the excess,
if any, of the fair market value of one share of Occidental Common Stock at the
date and time of exercise over the Fair Market Value of one share of Occidental
Common Stock on the Date of Grant (the "Grant Price").
2. GRANT OF SARS. As of the Date of Grant, Occidental grants to the Grantee
the Number of SARs indicated, at the Grant Price. All SARs may be exercised in
accordance with these Terms and Conditions and the Occidental Petroleum
Corporation 2001 Incentive Compensation Plan, as amended from time to time (the
"Plan"). This Grant shall not be an option to purchase Occidental Common Stock
and shall confer no stockholder rights upon the Grantee.
3. TERM OF SARS. The term of these SARs begins on the Date of Grant and
expires on the tenth anniversary of the Date of Grant (the "Expiration Date")
unless they are terminated earlier as provided in Section 7.
4. RIGHT TO EXERCISE. Unless these SARs have expired, terminated, or
accelerated, on each anniversary of the Date of Grant, the amount of SARs
indicated above in the Vesting Schedule for such anniversary will become
exercisable on a cumulative basis until all of the SARs are fully exercisable.
In the event that the Vesting Schedule results in fractional SARs, the
fractional SARs will be rounded to the nearest whole SAR as follows: for SARs
vesting on the first anniversary, the fraction will be rounded up to the nearest
whole number; for SARs vesting on the third anniversary date, SARs will be
rounded down to the nearest whole number; and for SARs vesting
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on the second anniversary, the fraction will be rounded up or down to the
nearest whole number as necessary so that the sum of the three tranches of SARs
will equal the Number of SARs granted. SARs may be exercised, in whole or in
part, only for the amount of SARs that are vested on the date of exercise. The
last date to exercise these SARs is the New York Stock Exchange trading day
prior to the earlier of the date these SARs terminate and the Expiration Date.
5. SAR NONTRANSFERABLE. These SARs may not be transferred nor assigned by the
Grantee other than to a beneficiary designated on a form approved by the Company
or by will. If the Grantee dies without designating a beneficiary and without a
valid will, the Grantee's SARs will be assigned by the laws of descent and
distribution. During the Grantee's lifetime, only the Grantee, or in the event
of his or her legal incapacity, a properly appointed guardian or legal
representative may exercise these SARs.
6. NOTICE OF EXERCISE.
(a) To exercise these SARs, the Grantee must give oral or written notice
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 amount of SARs
the Grantee wishes to exercise. The date the notice is received is the exercise
date unless limit orders are permitted by the Administrator or any agent
designated by Occidental and the notice contains a limit order in accordance
with the procedures established by the Administrator or the agent, in which case
the exercise date is the trading date on the New York Stock Exchange during the
limit order period on which the price of the Common Stock traded on the New York
Stock Exchange reaches the price specified in the notice. The fair market value
used to determine the proceeds will be the value indicated as such by the
Administrator or the agent on the exercise date unless (i) notice is received
after the close of trading on the New York Stock Exchange, in which case it will
be the closing price of the Common Stock on the New York Stock Exchange for that
day, or (ii) notice is received on a day which is not a New York Stock Exchange
trading day, or on a day which is a New York Stock Exchange trading day after 12
AM Eastern Time and before the opening of the New York Stock Exchange on such
day, in which case the fair market value will be the closing price of the Common
Stock on the New York Stock Exchange for the trading day that immediately
preceded the notice. If requested, 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) At exercise, Grantee will be paid with respect to each SAR exercised
the difference between the Grant Price and the fair market value of one share of
Occidental Common Stock at the date and time of exercise, unless otherwise
required by the administrator. The Grantee will be obligated to pay transaction
fees imposed by Occidental's agent, if one is designated, and any applicable
taxes on the Grantee's profits.
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7. TERMINATION OF RIGHT TO EXERCISE. The right to exercise these SARs
terminates automatically and without further notice on the date the Grantee
ceases to be an employee of the Company for any reason whatsoever, except as
follows:
(a) IF THE GRANTEE DIES, the SARs will vest immediately as of the date of
the Grantee's death for the full Number of SARs. All SARs may be exercised up to
the Expiration Date by a transferee acceptable under Section 5.
(b) IF THE GRANTEE BECOMES PERMANENTLY AND TOTALLY DISABLED, the SARs will
continue to vest in accordance with the Vesting Schedule, and they may be
exercised up to the Expiration Date. For purposes of these Terms and Conditions,
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 GRANTEE RETIRES, the SARs will continue to vest in accordance
with the Vesting Schedule, and they may be exercised up to the Expiration Date.
For purposes of these Terms and Conditions, "retire" means to retire either
under a Company-sponsored retirement plan or with the consent of the Company.
(d) IF THE GRANTEE TERMINATES EMPLOYMENT WITH THE COMPANY FOR ANY REASON
OTHER THAN DEATH, PERMANENT AND TOTAL DISABILITY, RETIREMENT OR CAUSE (WHETHER
OR NOT IN BREACH OF LOCAL LABOR LAWS), the SARs will cease to vest as of the
close of business on the last day of the Grantee's active employment. Any vested
SARs may be exercised up to the sooner of (i) three (3) months following the
last day of the Grantee's active employment and (ii) the Expiration Date. Only
the amount of SARs exercisable as of the Grantee's last day of employment
pursuant to the Vesting Schedule may be exercised. For the purposes of these
Terms and Conditions, "cause" means the Grantee'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 the Grantee's ability to
effectively act on the Company's behalf or with or on behalf of others.
For the purposes of these Terms and Conditions, the continuous employment of the
Grantee with the Company will not be interrupted, and the Grantee will not be
deemed to cease to be an employee of the Company, by reason of the transfer of
his or her employment among the Company and its affiliates or an approved leave
of absence. The Administrator shall have the exclusive discretion to determine
when the Grantee is no longer actively employed for purposes of this SAR grant.
8. ACCELERATION OF SAR. If a Change in Control Event as defined in the Plan
occurs, all SARs shall become immediately exercisable unless, prior to the
occurrence of the Change in Control Event, the Administrator, as provided in
Section 6.1 of the
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Plan, determines that such Event will not accelerate these SARs or that
acceleration will occur for only part of the SARs granted or at a different
time. Any such determination by the Administrator is binding on the Grantee.
9. 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.
10. TAXES AND WITHHOLDING. If the Company must withhold any federal, state,
local or foreign tax in connection with the exercise of these SARs, the
Administrator or any agent designated by Occidental will deduct the amount due
from the proceeds payable to the Grantee.
11. COMPLIANCE WITH LAW. The Company will make reasonable efforts to comply
with all applicable federal, state and foreign securities laws; however, these
SARs are not exercisable if their exercise would result in a violation of any
such law.
12. ADJUSTMENTS. The Grant Price and the Number of SARs covered by this Grant
may be adjusted as the Administrator determines pursuant to Section 6.2 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 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 Grantee written notice of the adjustment containing an explanation of the
nature of the adjustment.
13. 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.
The grant of these SARs does not create any contractual or other right to
receive future grants of SARs, or benefits in lieu of SARs, even if the Grantee
has a history of receiving SARs, options or other stock awards.
14. AMENDMENTS. 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.
15. 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
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Conditions, and the remaining provisions of these Terms and Conditions will
continue to be valid and fully enforceable.
16. RELATION TO PLAN; INTERPRETATION. 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 are to Sections of these Terms and Conditions unless otherwise noted.
17. ADMINISTRATIVE PROCEDURES. The Administrator, directly or through its
agent, reserves the right to adopt procedures with respect to the exercise of
these SARs. In the event of any inconsistent provisions between such procedures,
these Terms and Conditions and the Plan, the provisions of the Plan control.
18. SUCCESSORS AND ASSIGNS. Subject to Section 5, 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.
19. GOVERNING LAW. The laws of the State of Delaware govern the interpretation,
performance, and enforcement of these Terms and Conditions.
20. NOTICES. Except as the Company may otherwise direct for exercise notices,
any notice to the Company provided for in these Terms and Conditions will be
given to its Secretary at 10889 Wilshire Boulevard, Los Angeles, California
90024, and any notice to the Grantee will be addressed to the Grantee at his or
her address currently on file with the Company. Except as provided in Section 6
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.
21. PRIVACY RIGHTS. The Company and the Grantee's employer hold 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 Occidental, details of all SARs, options 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 data privacy laws and
protections than the Grantee's country. By accepting these
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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 Administrator in writing. Refusing or
withdrawing consent may affect the Grantee's ability to participate in the Plan.
22. ELECTRONIC DELIVERY. The Company may, in its sole discretion, decide to
deliver any documents related to these SARs or any future grants that may be
issued 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.
23. GRANTEE'S REPRESENTATIONS AND RELEASES. By accepting the grant, the Grantee
acknowledges that the Grantee has read these Terms and Conditions and
understands that the (i) grant of these SARs 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 these SARs are
granted; (ii) the future value of the SARs cannot be predicted and Occidental
does not assume liability in the event the SARs have no value in the future;
and, (iii) 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.
In consideration of the grant of these SARs, no claim or entitlement to
compensation or damages shall arise from termination of these SARs or diminution
in value of these SARs resulting from termination of the Grantee's employment by
the Company or the Grantee's employer (for any reason whatsoever and whether or
not in breach of local labor laws). The Grantee irrevocably releases the Company
and, if not Occidental, the Grantee's employer 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.
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