EXHIBIT 10.2
OCCIDENTAL PETROLEUM CORPORATION
2005 DEFERRED STOCK PROGRAM
OCCIDENTAL PETROLEUM CORPORATION
DEFERRED STOCK PROGRAM
TABLE OF CONTENTS
PAGE
2005 DEFERRED STOCK PROGRAM....................................................................... 1
ARTICLE I PURPOSES AND AUTHORIZED SHARES.......................................................... 2
1.1 Purposes..................................................................................... 2
1.2 Shares Available............................................................................. 2
1.3 Relationship to Plans........................................................................ 2
ARTICLE II DEFINITIONS............................................................................. 3
ARTICLE III DEFERRAL OF STOCK AWARDS................................................................ 9
3.1 Elective Deferral Awards..................................................................... 9
3.2 Mandatory Deferral Awards.................................................................... 9
ARTICLE IV DEFERRED SHARE ACCOUNTS................................................................. 10
4.1 Crediting of Deferred Shares................................................................. 10
4.2 Dividend Equivalents......................................................................... 10
4.3 Vesting...................................................................................... 11
4.4 Distribution of Benefits..................................................................... 11
4.5 Adjustments in Case of Changes in Common Stock............................................... 14
4.6 Company's Right to Withhold.................................................................. 14
4.7 Termination of Employment.................................................................... 14
ARTICLE V ADMINISTRATION.......................................................................... 16
5.1 The Administrator............................................................................ 16
5.2 Committee Action............................................................................. 16
5.3 Rights And Duties............................................................................ 16
5.4 Indemnity and Liability...................................................................... 17
ARTICLE VI CLAIMS PROCEDURE........................................................................ 18
6.1 Applications for Benefits.................................................................... 18
6.2 Claims Procedures for Benefits other than Disability Benefits................................ 18
6.3 Claims Procedures for Disability Benefits.................................................... 19
6.4 Limitations on Actions....................................................................... 21
ARTICLE VII AMENDMENT AND TERMINATION OF PROGRAM.................................................... 22
7.1 Amendment.................................................................................... 22
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OCCIDENTAL PETROLEUM CORPORATION
2005 DEFERRED STOCK PROGRAM
TABLE OF CONTENTS
(CONTINUED)
PAGE
7.2 Term......................................................................................... 22
ARTICLE VIII MISCELLANEOUS........................................................................... 23
8.1 Limitation on Participant's Rights........................................................... 23
8.2 Beneficiary Designation...................................................................... 23
8.3 Payments to Minors or Persons Under Incapacity............................................... 23
8.4 Receipt and Release.......................................................................... 24
8.5 Deferred Shares and Other Benefits Not Assignable; Obligations Binding Upon Successors....... 24
8.6 Employment Taxes............................................................................. 24
8.7 Governing Law; Severability.................................................................. 24
8.8 Compliance with Laws......................................................................... 25
8.9 Program Construction......................................................................... 25
8.10 Compliance with Tax Laws to Preserve Tax Deferral............................................ 25
8.11 Headings Not Part of Program................................................................. 25
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OCCIDENTAL PETROLEUM CORPORATION
2005 DEFERRED STOCK PROGRAM
This document sets forth the terms of the Occidental Petroleum
Corporation 2005 Deferred Stock Program (the "Program"), effective January 1,
2005.
This Program is intended to be an unfunded program maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees as described in Section 201(2),
301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974,
as amended.
This Program is intended to satisfy the requirements of Section 409A
(or other applicable section) of the Internal Revenue Code, and any regulations
promulgated thereunder, so that the taxation to Participants or Beneficiaries of
any compensation deferred under this Program is deferred.
ARTICLE I
PURPOSES AND AUTHORIZED SHARES
1.1 Purposes. The purposes of the Program are to promote the ownership and
retention of shares of common stock of Occidental Petroleum Corporation by its
executives and to allow executives to accumulate additional retirement income
through deferrals of receipt of common stock of Occidental Petroleum Corporation
under its 2001 Plan.
1.2 Shares Available. The number of Shares that may be issued under the
2001 Plan as part of this Program is limited to the aggregate number of Shares
subject to Qualifying Stock Awards granted under the 2001 Plan that are deferred
in the form of Deferred Shares under this Program. Deferred Shares credited to
Participants' Deferred Share Accounts under this Program may accrue Dividend
Equivalents that may be credited in the form of additional Deferred Shares and
paid to Participants under this Program in the form of Shares. If the number of
Shares payable under this Program would exceed the limit described in the
preceding sentence because of the accumulation of Deferred Shares in respect of
Dividend Equivalents, such excess Shares shall be issued and charged against the
Share limits under the 2001 Plan. If insufficient Shares remain under the 2001
Plan for the accumulation of Dividend Equivalents, Dividend Equivalents may be
paid (in the sole discretion of the Committee) in cash.
1.3 Relationship to Plans. This Program constitutes a deferred
compensation plan providing alternative settlements under and as contemplated by
the 2001 Plan in respect of Qualifying Stock Awards granted thereunder. This
Program also contemplates the grant of Deferred Shares under and as contemplated
by the 2001 Plan. This Program and all rights under it are provided and shall be
subject to and construed consistently with the other terms of the 2001 Plan.
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ARTICLE II
DEFINITIONS
Whenever the following words and phrases are used in this Program with
the first letter capitalized, they shall have the meanings specified below:
Affiliate. "Affiliate" means: (a) any corporation that is a member of
a controlled group of corporations (within the meaning of Code Section 1563(a),
determined without regard to Code Sections 1563(a)(4) and (e)(3)(C), and with
the phrase "more than 50%" substituted for the phrase "at least 80%" each place
it appears in Code Section 1563(a)) of which Occidental Petroleum Corporation is
a component member, or (b) any entity (whether or not incorporated) that is
under common control with Occidental Petroleum Corporation (as defined in Code
Section 414(c) and the Treasury Regulations thereunder, and with the phrase
"more than 50%" substituted for the phrase "at least 80%" each place it appears
in the Treasury Regulations under Code Section 414(c)).
Beneficiary. "Beneficiary" means the person or persons designated as
such in accordance with Section 8.2.
Board. "Board" means the Board of Directors of the Corporation.
Change in Control. "Change in Control" means any of the following:
(a) Approval by the stockholders of the Company (or, if no
stockholder approval is required, by the Board) 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 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 (a
"Business Combination"), unless (i) as a result of the Business
Combination, more than 50% of the outstanding voting power of the surviving
or resulting entity or a parent thereof (the "Successor Entity")
immediately after the Business Combination is, or will be, owned, directly
or indirectly, by holders of the Company's voting securities immediately
before the Business Combination; (ii) no "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
from time (the "Exchange Act")), excluding the Successor Entity or 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 (an "Excluded Person"), beneficially owns, directly or
indirectly, more than 20% 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 (iii) at least 50%
of the members of the board of directors of the entity resulting from the
Business Combination were members of the Board at the time of the
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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% or
more of the combined voting power of the Company's then outstanding voting
securities, other than as a result of (i) an acquisition directly from the
Company; (ii) an acquisition by the Company; or (iii) 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 Board
member was approved by a vote of at least two-thirds (2/3) of the Board
members then still in office who were Board members 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.
(e) Notwithstanding the foregoing, a Change in Control shall not
occur if, prior to the Change in Control, the Executive Compensation and
Human Resources Committee of the Board deems such an event to not be a
Change in Control for the purposes of this Program.
(f) Notwithstanding the foregoing, to the extent that any event
or occurrence described in subsections (a) through (d) does not constitute
"a change in the ownership or effective control" as defined under Section
409A (or other applicable section) of the Code, or any regulations
promulgated thereunder, such event or occurrence shall not constitute a
Change in Control for purposes of this Program.
Code. "Code" means the Internal Revenue Code of 1986, as amended.
Committee. "Committee" means the administrative committee appointed to
administer the Program pursuant to Article V.
Common Stock. "Common Stock" means the Corporation's common stock, par
value $.20 per share, subject to adjustment pursuant to Section 4.5 of this
Program.
Company. "Company" means the Corporation and any Affiliates.
Corporation. "Corporation" means Occidental Petroleum Corporation, a
Delaware corporation, and any successor corporation.
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Current Dividend Equivalent. "Current Dividend Equivalent" means a
Dividend Equivalent paid to the Participant in the form of cash at the same time
as dividends are paid on Shares to the Corporation's shareholders.
Deferral Election. "Deferral Election" means an election by an
Eligible Person pursuant to Section 3.1 of this Program (i) to delay the
delivery of Shares upon the vesting of a Qualifying Performance Stock Award with
Elective Deferral or a Qualifying Restricted Share Unit Award with Elective
Deferral, as the case may be or (ii) to exchange restricted Shares subject to a
Qualifying Restricted Stock Award with Elective Deferral for Deferred Shares
under this Program upon the vesting of such Qualifying Restricted Stock Award.
Deferred Dividend Equivalent. "Deferred Dividend Equivalent" means a
Dividend Equivalent credited to a Participant's Deferred Share Account in the
form of additional Deferred Shares (rounded to four decimal places) and paid to
the Participant in the form of Shares at the same time that the other Deferred
Shares credited to the Participant's Deferred Share Account are distributed in
the form of Shares to the Participant.
Deferred Share. "Deferred Share" means a non-voting unit of
measurement which is deemed solely for bookkeeping purposes to be equivalent to
one outstanding Share (subject to Section 4.5) solely for purposes of this
Program.
Deferred Share Account. "Deferred Share Account" means the bookkeeping
account maintained by the Company on behalf of each Participant that is credited
with Deferred Shares in accordance with Sections 4.1(a) and Dividend Equivalents
thereon in accordance with Section 4.2.
Disability. "Disability" means a condition under which a Participant
either (i) is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months or (ii) is, by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, receiving income
replacement benefits and has received such payments for a period of at least 6
months under the Company's disability plan.
Distribution Election Form. "Distribution Election Form" means an
election form provided by the Committee on which a Participant may elect an
alternative form of distribution, which election will be effective only if the
Participant's termination of employment with the Company occurs on or after
becoming eligible for Retirement, as provided in Section 4.4(c), and the
Participant's election satisfies the other requirements set forth in Section
4.4(c).
Dividend Equivalent. "Dividend Equivalent" means the amount of cash
dividends or other cash distributions paid by the Corporation on that number of
Shares equal to the number of Deferred Shares credited to a Participant's
Deferred Share Account as of the applicable record date for the dividend or
other distribution, which amount shall be either credited as a Deferred Dividend
Equivalent to the Deferred Share Account of the Participant or
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paid to the Participant as a Current Dividend Equivalent in accordance with the
terms of Section 4.2.
Effective Date. "Effective Date" means January 1, 2005.
Elective Deferral Award. "Elective Deferral Award" means either a
Qualifying Performance Stock Award with Elective Deferral, a Qualifying
Restricted Share Unit Award with Elective Deferral, or a Qualifying Restricted
Stock Award with Elective Deferral.
Eligible Person. "Eligible Person" means any employee of the Company
who holds a Qualifying Stock Award granted under the 2001 Plan.
Exchange Act. "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
Fair Market Value. "Fair Market Value" has the meaning given to such
term in the 2001 Plan.
Key Employee. "Key Employee" means an employee of the Company who is a
"key employee" as defined in Section 416(i) of the Code.
Mandatory Deferral Award. "Mandatory Deferral Award" means either a
Qualifying Performance Stock Award with Mandatory Deferral, a Qualifying
Restricted Share Unit Award with Mandatory Deferral, or a Qualifying Restricted
Stock Award with Mandatory Deferral.
Participant. "Participant" means any person who has Deferred Shares
credited to a Deferred Share Account under this Program.
Performance Stock Award. "Performance Stock Award" means a
"Performance-Based Award" under and as defined in the 2001 Plan.
Program. "Program" means this Occidental Petroleum Corporation 2005
Deferred Stock Program, as it may be amended from time to time.
Qualifying Performance Stock Award. "Qualifying Performance Stock
Award" means either a Qualifying Performance Stock Award with Elective Deferral
or a Qualifying Performance Stock Award with Mandatory Deferral.
Qualifying Performance Stock Award with Elective Deferral. "Qualifying
Performance Stock Award with Elective Deferral" means any Performance Stock
Award other than a Qualifying Performance Stock Award with Mandatory Deferral
that either (i) is outstanding on the Effective Date, (ii) by its terms permits
the holder to elect to delay the delivery of Shares subject thereto beyond the
vesting date, or (iii) is otherwise designated by the Committee as eligible for
deferral of the delivery of the Shares beyond the vesting date under this
Program.
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Qualifying Performance Stock Award with Mandatory Deferral.
"Qualifying Performance Stock Award with Mandatory Deferral" means any
Performance Stock Award that, by its terms, delays the delivery of Shares
subject thereto beyond the vesting date.
Qualifying Restricted Share Unit Award. "Qualifying Restricted Share
Unit Award" means either a Qualifying Restricted Share Unit Award with Elective
Deferral or a Qualifying Restricted Share Unit Award with Mandatory Deferral.
Qualifying Restricted Share Unit Award with Elective Deferral.
"Qualifying Restricted Share Unit Award with Elective Deferral" means a
Restricted Share Unit Award other than a Qualifying Restricted Share Unit Award
with Mandatory Deferral that either (i) by its terms permits the holder to elect
to delay the delivery of Shares subject thereto beyond the vesting date or (ii)
is otherwise designated by the Committee as eligible for deferral of the
delivery of the Shares beyond the vesting date under this Program.
Qualifying Restricted Share Unit Award with Mandatory Deferral.
"Qualifying Restricted Share Unit Award with Mandatory Deferral" means a
Restricted Share Unit Award that, by its terms, delays the delivery of Shares
subject thereto beyond the vesting date.
Qualifying Restricted Stock Award. "Qualifying Restricted Stock Award"
means either a Qualifying Restricted Stock Award with Elective Deferral or a
Qualifying Restricted Stock Award with Mandatory Deferral.
Qualifying Restricted Stock Award with Elective Deferral. "Qualifying
Restricted Stock Award with Elective Deferral" means a Restricted Stock Award
other than a Qualifying Restricted Stock Award with Mandatory Deferral that
either (i) by its terms permits the holder to make a Deferral Election with
respect thereto or (ii) is otherwise designated by the Committee as an award
with respect to which a Deferral Election may be made.
Qualifying Restricted Stock Award with Mandatory Deferral. "Qualifying
Restricted Stock Award with Mandatory Deferral" means a Restricted Stock Award
that, by its terms, delays the delivery of the Shares subject thereto beyond the
vesting date.
Qualifying Stock Award. "Qualifying Stock Award" means a Qualifying
Restricted Stock Award, a Qualifying Performance Stock Award or a Qualifying
Restricted Share Unit Award.
Restricted Share Unit Award. "Restricted Share Unit Award" means a
grant of restricted units, with each such unit representing the right to receive
one Share under the 2001 Plan.
Restricted Stock Award. "Restricted Stock Award" means a grant of
restricted stock under the 2001 Plan.
Retires. "Retires" means terminates employment on or after qualifying
for Retirement.
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Retirement. "Retirement" means (a) the termination a Participant's
employment with the Company for reasons other than Disability or death after the
Participant attains age 65, (b) the termination of a Participant's employment
with the Company for reasons other than Disability or death after the
Participant attains age 55 and completes five (5) Years of Service or (c) the
Participant's attainment of age 55 following the Participant's termination of
employment with the Company for reasons other than Disability or death prior to
age 55 if the Participant qualifies for retiree medical coverage under the
Occidental Petroleum Corporation Medical Plan on the date of the Participant's
termination of employment.
Retirement Plan. "Retirement Plan" means the Occidental Petroleum
Corporation Retirement Plan, as amended from time to time.
Rule 16b-3. "Rule 16b-3" means Rule 16b-3 promulgated under the
Exchange Act.
Section 16 Officer. "Section 16 Officer" means an officer of the
Corporation as defined in Rule 16a-1(f) promulgated under the Exchange Act.
Share. "Share" means a share of Common Stock.
2001 Plan. "2001 Plan" means the Occidental Petroleum Corporation 2001
Incentive Compensation Plan, as amended from time to time.
Years of Service. "Years of Service" means the number of full years
credited to the Participant under the Retirement Plan for vesting purposes.
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ARTICLE III
DEFERRAL OF STOCK AWARDS
3.1 Elective Deferral Awards.
(a) Participation. An Eligible Person may make an advance Deferral
Election in respect of an Elective Deferral Award in order to receive a credit
of Deferred Shares under this Program. Any such Deferral Election must apply to
all Shares or share units, as the case may be, subject to the Elective Deferral
Award.
(b) Manner and Timing of Deferral Election. A Deferral Election may
be made only by an Eligible Person by completing a Deferral Election form
provided by the Committee and delivering that Deferral Election form to the
Committee at least twelve (12) months before any Shares or share units, as the
case may be, that are subject to the Elective Deferral Award become vested. Any
Deferral Election form received by the Committee within twelve (12) months of
the vesting of any Shares or share units, as the case may be, under an Elective
Deferral Award will be considered void and shall have no force or effect.
Notwithstanding the foregoing, if applicable law requires that a Deferral
Election be made at an earlier date in order to defer taxation with respect to
such Shares or share units, as the case may be, the Committee shall require
Deferral Elections to be filed by such earlier date, and any Deferral Election
received by the Committee after such date shall be considered void and shall
have no force or effect.
(c) Election Irrevocable. A Deferral Election made in accordance with
this Section 3.1 for a credit of Deferred Shares under this Program shall be
irrevocable once it is received by the Committee.
3.2 Mandatory Deferral Awards. Shares or share units, as the case may be,
that become vested under a Mandatory Deferral Award granted on or after the
Effective Date shall automatically be subject to the terms of this Program and
be credited as Deferred Shares as provided in Section 4.1(a).
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ARTICLE IV
DEFERRED SHARE ACCOUNTS
4.1 Crediting of Deferred Shares.
(a) Vesting of Qualifying Stock Awards. As of the date that all or
any portion of an Elective Deferral Award that is subject to a Deferral Election
under Section 3.1 becomes vested, no Shares shall be issued to (or, in the case
of a Restricted Stock Award, the restricted Shares shall be forfeited by) the
Eligible Person. Instead (or in exchange therefor), as of the date that all or
any portion of an Elective Deferral Award becomes vested, the Eligible Person's
Deferred Share Account shall be credited with the number of Deferred Shares that
is equal to the number of share units or Shares, as the case may be, that first
became vested as of that date.
(b) Limitations on Rights Associated with Deferred Shares. A
Participant's Deferred Share Account shall be a memorandum account on the books
of the Corporation. The Deferred Shares credited to a Participant's Deferred
Share Account shall be used solely as a device for the determination of the
number of Shares to be eventually issued to such Participant in accordance with
this Program. The Deferred Shares shall not be treated as property or as a trust
fund of any kind. No Participant shall be entitled to any voting or other
shareholder rights with respect to Deferred Shares granted or credited under
this Program. The number of Deferred Shares credited (and the Shares to which
the Participant is entitled under this Program) shall be subject to adjustment
in accordance with Section 4.5 of this Program.
4.2 Dividend Equivalents.
(a) Election of Current or Deferred Dividend Equivalents. An
individual who becomes an Eligible Person under this Program shall make a
one-time irrevocable election as to whether Dividend Equivalents under this
Program will be paid in the form of Current Dividend Equivalents or Deferred
Dividend Equivalents no later than the earlier of (i) the date that the Eligible
Person first makes a Deferral Election under Section 3.1 of this Program or (ii)
the date that a Mandatory Deferral Award is first granted to such Eligible
Person. Any such election shall be on a form provided by and delivered to the
Committee. If an Eligible Person fails to make such an election at the time
required hereunder, he shall be deemed to have elected the Current Dividend
Equivalents. Any such election shall apply with respect to all Dividend
Equivalents attributable to all Deferred Shares credited to such Participant
under this Program. A Participant may not change his Dividend Equivalent
election.
(b) Deferred Dividend Equivalents Credits to Deferred Share Accounts.
As of any applicable dividend or distribution payment date, the Deferred Share
Account of each Participant who has elected Deferred Dividend Equivalents shall
be credited with additional Deferred Shares in an amount equal to the amount of
the Dividend Equivalents divided by the Fair Market Value of a Share as of the
applicable dividend or distribution payment date. If the limit on the number of
Shares available under this Program in respect of Dividend Equivalents is
reached, the Company may in its discretion pay such Dividend Equivalents to
Participants as Current Dividend Equivalents.
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(c) Payment of Current Dividend Equivalents. At the time that the
Corporation distributes dividend payments to its shareholders, the Company shall
pay to each Participant who has elected Current Dividend Equivalents a cash
payment in an amount equal to the amount of the Dividend Equivalents
attributable to the Deferred Shares credited to his Deferred Share Account.
4.3 Vesting. All Deferred Shares (including Deferred Shares credited as
Dividend Equivalents) credited to a Participant's Deferred Share Account shall
be at all times fully vested and nonforfeitable.
4.4 Distribution of Benefits.
(a) Form of Distribution. Deferred Shares credited to a Participant's
Deferred Share Account shall be distributed in an equivalent whole number of
Shares. Fractional share interests shall be settled in cash. The Committee, in
its sole discretion, may pay Deferred Shares credited as Dividend Equivalents in
cash in lieu of Shares.
(b) Timing of Distribution of Benefits. Benefits in respect of the
Deferred Shares credited to a Participant's Deferred Share Account shall be
distributed to the Participant (or his Beneficiary in the case of death) within
the first ninety (90) days of the year following the Participant's termination
of employment with the Company for any reason (including, without limitation,
Retirement, death, Disability, resignation or termination by the Company). If a
Participant's benefits are paid in annual installments under Section 4.4(c),
each annual installment shall be paid within the first ninety (90) days of each
calendar year. Notwithstanding anything herein to the contrary, in the event
that a Participant who is a Key Employee is entitled to a distribution from the
Program upon or by virtue of such Participant's termination of employment for a
reason other than death or Disability, such Participant shall not receive any
distribution from the Program until at least six months after the date of such
Participant's termination of employment.
(c) Manner of Distribution.
(i) General Rules. Distribution will generally be in the form
of lump sum payment. However, if a Participant terminates
employment on or after becoming eligible for Retirement,
his Deferred Shares may instead be paid in annual
installments over two (2) to twenty (20) years or in a
combination of an initial lump sum payment followed by
annual installments over the subsequent one (1) to twenty
(20) years. The number of Shares to be distributed in each
annual distribution shall be equal to the number of Shares
then credited to the Participant's Deferred Share Account
divided by the number of remaining annual installments.
Such number shall be adjusted downward to the nearest whole
number of Shares so that no fractional Shares interests are
distributed until the last annual installment distribution.
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(ii) Retirement Distribution Election. An individual who becomes
an Eligible Person under this Program shall make an
election as to his form of distribution no later than the
earlier of (A) the date that the Eligible Person first
makes a Deferral Election under Section 3.1 of this Program
or (B) the date that a Mandatory Deferral Award is first
granted to such Eligible Person. An election made under
this subsection (ii) shall be made on a Distribution
Election Form provided by and delivered to the Committee,
and such election shall apply to all Deferred Shares
credited under this Program. A Participant who fails to
make an election in accordance with this subsection (ii)
regarding the form of distribution upon or following
Retirement will be deemed to have elected a lump sum.
(iii) Changes to Retirement Distribution Election. A Participant
may not change his election as to the form of Retirement
distribution under this Program unless and until the
Program is amended to provide for changes that comply with
the requirements for such changes under Section 409A (or
other applicable section) of the Code. Any change of
election as to the form of retirement distribution under
any other deferral plan or program of the Company made by
an Eligible Person after such Eligible Person's first
Deferral Election under this Program shall have no effect
on such Eligible Person's form of Retirement distribution
under this Program.
(iv) Override of Retirement Distribution Election.
Notwithstanding the foregoing, the Committee may, in its
sole discretion:
(A) distribute the benefits in a single lump sum if the sum
of Shares to be distributed to the Participant is less
than or equal to 1,000, or
(B) reduce the number of installments elected by the
Participant to produce an annual distribution of at
least 100 Shares;
provided, however, that if this provision would cause
amounts deferred under this Program to be included in the
income of Participants prior to the date of distribution,
this provision shall not apply and distributions to the
Participant shall be in accordance with his election under
this Program.
(d) Survivor Benefits. If the Participant dies at any time before or
after termination of employment with the Company while there are Deferred Shares
credited to his Deferred Share Account, the Committee shall distribute the
benefits in respect of such remaining Deferred Shares to the Participant's
Beneficiary in a lump sum during the first ninety (90) days of the calendar year
following the year in which the Participant's death occurred.
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(e) Effect of Change of Control. In the event of a Change in Control,
the following rules shall apply:
(i) All Participants shall continue to have a fully vested,
nonforfeitable interest in their Deferred Share Account
balances.
(ii) All payments in respect of Deferred Share Accounts
following a Change in Control shall be made as follows:
(A) Payments that have already commenced shall continue to
be made no less rapidly than under the schedule in
effect just prior to the Change in Control.
(B) Payments that have not yet commenced shall be made (in
the form of Shares unless the Committee provides
otherwise) in a lump sum at the earliest possible
payment date under the normal rules for benefit
commencement pursuant to Section 4.4(b) as in effect on
the day before the day of the Change in Control.
(iii) A Participant's termination of employment for purposes of
this Program shall be deemed to include (but shall not be
limited to) any event (such as a constructive discharge)
giving the Participant the right to receive salary
continuation or other severance benefits following a Change
in Control, as determined under any plan, program, or
agreement covering the Participant that is in effect at the
time of the Change in Control.
(iv) Notwithstanding anything to the contrary in this Section
4.4(e), a Participant who had previously elected a form of
Retirement distribution other than a single lump sum may
receive an accelerated lump sum distribution from the
Program under Section 4.4(e)(ii)(B) only to the extent
allowed under Section 409A (or other applicable section) of
the Code or any regulations promulgated thereunder.
(f) Section 162(m) Limitation. Notwithstanding the foregoing, if the
Committee determines in good faith that there is a reasonable likelihood that
any benefits payable to a Participant for a taxable year of the Company would
not be deductible by the Company solely by reason of the limitation under Code
Section 162(m), then to the extent reasonably deemed necessary by the Committee
to ensure that the entire amount of any distribution to the Participant pursuant
to this Program is deductible, the Committee may defer all or any portion of a
distribution under this Program. The amounts so deferred shall be distributed to
the Participant or his Beneficiary (in the event of the Participant's death) at
the earliest possible date, as determined by the Committee in good faith, on
which the deductibility of compensation paid or payable to the Participant for
the taxable year of the Company during which the distribution is made will not
be limited by Code Section 162(m).
13
4.5 Adjustments in Case of Changes in Common Stock.
(a) If the outstanding Shares are increased, decreased, or exchanged
for a different number or kind of securities, or if additional shares or new or
different shares or other securities are distributed with respect to such Shares
or other securities, through merger, consolidation, sale of all or substantially
all of the assets of the Company, reorganization, recapitalization, stock
dividend, stock split, reverse stock split or similar change in capitalization
or any other distribution with respect to such Shares or other securities,
proportionate and equitable adjustments consistent with the effect of such event
on stockholders generally (but without duplication of benefits if Dividend
Equivalents are credited) shall be made in the number and type of Shares or
other securities, property and/or rights contemplated hereunder and of rights in
respect of Deferred Shares and Deferred Share Accounts credited under this
Program so as to preserve the benefits intended. The provisions of Section 6.2
of the 2001 Plan shall also apply to the related Deferred Shares granted under
the 2001 Plan in accordance with this Program.
(b) If the event results in any rights of shareholders to receive
cash (other than cash dividends and cash distributions), a corresponding amount
of cash shall be paid to each Participant as soon as practicable following the
date the cash is paid in respect of outstanding Shares.
4.6 Company's Right to Withhold. The Company (including its Affiliates)
may satisfy any state or federal tax withholding obligation arising upon a
distribution of Shares and any cash with respect to a Participant's Deferred
Share Account by reducing the number of Shares or cash otherwise deliverable to
the Participant. The appropriate number of Shares required to satisfy such tax
withholding obligation in the case of Deferred Shares will be based on the Fair
Market Value of a Share on the date of distribution. If the Company (including
its Affiliates), for any reason, elects not to (or cannot) satisfy the
withholding obligation in accordance with the preceding sentence, the
Participant shall pay or provide for payment in cash of the amount of any taxes
which the Company (including its Affiliates) may be required to withhold with
respect to the benefits hereunder, before any such benefits are paid.
4.7 Termination of Employment. For the purpose of this Article IV, a
Participant will be deemed to have terminated employment if the Participant
ceases to be an employee of any of the following:
(a) the Company;
(b) an Affiliate; or
(c) any other entity, whether or not incorporated, in which the
Company has an ownership interest, and the Committee has designated that
the Participant's commencement of employment with such entity upon
Participant's ceasing to be an employee of an entity described in (a) or
(b) above will not be deemed to be a termination of employment for purposes
of this Program, provided that such designation shall be made in writing by
the Committee and shall be communicated to the Participant prior to his
commencement of employment with the entity so designated.
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Notwithstanding anything contained herein to the contrary, a termination of
employment shall not be deemed to have occurred for any purpose under this
Program unless such termination of employment constitutes "a separation from
service" as defined under Section 409A (or other applicable section) of the Code
or any regulations promulgated thereunder governing nonqualified deferred
compensation plans. For the purposes of the preceding provisions, a Participant
who ceases to be an employee of an entity described in (a), (b) or (c) above
shall not be deemed to have terminated employment if such cessation of
employment is followed immediately by his commencement of employment with
another entity described in (a), (b) or (c) above.
15
ARTICLE V
ADMINISTRATION
5.1 The Administrator. The Committee hereunder shall consist of (i) the
members of the Executive Compensation and Human Resources Committee of the Board
who are Non-Employee Directors within the meaning of Rule 16b-3 and "outside
directors" for purposes of Section 162(m) of the Code, or (ii) such other
committee of the Board, each participating member of which is a Non-Employee
Director (as defined in Rule 16b-3) and each member of which is an "outside
director" for purposes of Section 162(m) of the Code, as may hereafter be
appointed by the Board to serve as administrator of this Program. Any member of
the Committee may resign by delivering a written resignation to the Board.
Members of the Committee shall not receive any additional compensation for
administration of this Program.
5.2 Committee Action. Action of the Committee with respect to the
administration of this Program shall be taken pursuant to a majority vote or by
unanimous written consent of its members.
5.3 Rights And Duties.
(a) Subject to the limitations of this Program, the Committee shall
be charged with the general administration of this Program and the
responsibility for carrying out its provisions, and shall have powers necessary
to accomplish those purposes, including, but not by way of limitation, the
following:
(i) To construe and interpret this Program;
(ii) To resolve any questions concerning the amount of benefits
payable to a Participant;
(iii) To make all other determinations required by this Program,
including adjustments under Section 4.5;
(iv) To maintain all the necessary records for the
administration of this Program and provide statements of
Deferred Share Accounts to Participants on an annual or
more frequent basis;
(v) To make and publish forms, rules and procedures for the
administration of this Program; and
(vi) To administer the claims procedures set forth in Article VI
for presentation of claims by Participants and
Beneficiaries for benefits under this Program, including
consideration of such claims, review of claim denials and
issuance of a decision on review.
(b) The Committee shall have full discretion to construe and
interpret the terms and provisions of this Program (but not to increase amounts
payable hereunder) and to
16
resolve any disputed question or controversy, which interpretation or
construction or resolution, including decisions with respect to adjustments
under Section 4.5, shall be final and binding on all parties, including but not
limited to the Company and any Eligible Person, Participant or Beneficiary,
except as otherwise required by law. The Committee shall administer such terms
and provisions in a nondiscriminatory manner and in full accordance with any and
all laws applicable to this Program. In performing its duties, the Committee
shall be entitled to rely on information, opinions, reports or statements
prepared or presented by: (i) officers or employees of the Company whom the
Committee believes to be reliable and competent as to such matters; and (ii)
counsel (who may be employees of the Company), independent accountants and other
persons as to matters which the Committee believes to be within such persons'
professional or expert competence. The Committee shall be fully protected with
respect to any action taken or omitted by it in good faith pursuant to the
advice of such persons. The Committee may appoint a program administrator or any
other agent, and delegate to them such powers and duties in connection with the
administration of this Program as the Committee may from time to time prescribe.
5.4 Indemnity and Liability. All expenses of the Committee shall be paid
by the Company and the Company shall furnish the Committee with such clerical
and other assistance as is necessary in the performance of its duties. No member
of the Committee shall be liable for any act or omission of any other member of
the Committee nor for any act or omission on his own part. To the extent
permitted by law, the Company shall indemnify and save harmless each member of
the Committee against any and all expenses and liabilities arising out of his
membership on the Committee.
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ARTICLE VI
CLAIMS PROCEDURE
6.1 Applications for Benefits. All applications for benefits under the
Program shall be submitted to: Occidental Petroleum Corporation, Attention:
Corporate Secretary, 10889 Wilshire Blvd., Los Angeles, CA 90024. Applications
for benefits must be in writing on the forms prescribed by the Committee and
must be signed by the Participant, or in the case of a death benefit, by the
Beneficiary or legal representative of the deceased Participant.
6.2 Claims Procedures for Benefits other than Disability Benefits.
(a) Within a reasonable period of time, but not later than 90 days
after receipt of a claim for benefits (other than Disability benefits), the
Committee or its delegate shall notify the claimant of any adverse benefit
determination on the claim, unless special circumstances require an extension of
time for processing the claim. In no event may the extension period exceed 90
days from the end of the initial 90-day period. If an extension is necessary,
the Committee or its delegate shall provide the claimant with a written notice
to this effect prior to the expiration of the initial 90-day period. The notice
shall describe the special circumstances requiring the extension and the date by
which the Committee or its delegate expects to render a determination on the
claim.
(b) In the case of an adverse benefit determination, the Committee or
its delegate shall provide to the claimant written or electronic notification
setting forth in a manner calculated to be understood by the claimant: (i) the
specific reason or reasons for the adverse benefit determination; (ii) reference
to the specific Program provisions on which the adverse benefit determination is
based; (iii) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why the material or
information is necessary; and (iv) a description of the Program's claim review
procedures and the time limits applicable to such procedures, including a
statement of the claimant's right to bring a civil action under Section 502(a)
of ERISA following an adverse final benefit determination on review and in
accordance with Section 6.4.
(c) Within 60 days after receipt by the claimant of notification of
the adverse benefit determination, the claimant or his duly authorized
representative, upon written application to the Committee, may request that the
Committee fully and fairly review the adverse benefit determination. On review
of an adverse benefit determination, upon request and free of charge, the
claimant shall have reasonable access to, and copies of, all documents, records
and other information relevant to the claimant's claim for benefits. The
claimant shall have the opportunity to submit written comments, documents,
records, and other information relating to the claim for benefits. The
Committee's (or delegate's) review shall take into account all comments,
documents, records, and other information submitted regardless of whether the
information was previously considered in the initial adverse benefit
determination.
(d) Within a reasonable period of time, but not later than 60 days
after receipt of such request for review, the Committee or its delegate shall
notify the claimant of any final benefit determination on the claim, unless
special circumstances require an extension of time for
18
processing the claim. In no event may the extension period exceed 60 days from
the end of the initial 60-day period. If an extension is necessary, the
Committee or its delegate shall provide the claimant with a written notice to
this effect prior to the expiration of the initial 60-day period. The notice
shall describe the special circumstances requiring the extension and the date by
which the Committee or its delegate expects to render a final determination on
the request for review. In the case of an adverse final benefit determination,
the Committee or its delegate shall provide to the claimant written or
electronic notification setting forth in a manner calculated to be understood by
the claimant: (i) the specific reason or reasons for the adverse final benefit
determination; (ii) reference to the specific Program provisions on which the
adverse final benefit determination is based; (iii) a statement that the
claimant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
to the claimant's claim for benefits; and (iv) a statement of the claimant's
right to bring a civil action under Section 502(a) of ERISA following an adverse
final benefit determination on review and in accordance with Section 6.4.
6.3 Claims Procedures for Disability Benefits.
(a) Within a reasonable period of time, but not later than 45 days
after receipt of a claim for Disability benefits, the Committee or its delegate
shall notify the claimant of any adverse benefit determination on the claim,
unless circumstances beyond the Program's control require an extension of time
for processing the claim. In no event may the extension period exceed 30 days
from the end of the initial 45-day period. If an extension is necessary, the
Committee or its delegate shall provide the claimant with a written notice to
this effect prior to the expiration of the initial 45-day period. The notice
shall describe the circumstances requiring the extension and the date by which
the Committee or its delegate expects to render a determination on the claim.
If, prior to the end of the first 30-day extension period, the Committee or its
delegate determines that, due to circumstances beyond the control of the
Program, a decision cannot be rendered within that extension period, the period
for making the determination may be extended for an additional 30 days, so long
as the Committee or its delegate notifies the claimant, prior to the expiration
of the first 30-day extension period, of the circumstances requiring the
extension and the date as of which the Committee or its delegate expects to
render a decision. This notice of extension shall specifically describe the
standards on which entitlement to a benefit is based, the unresolved issues that
prevent a decision on the claim, and the additional information needed to
resolve those issues, and that the claimant has at least 45 days within which to
provide the specified information.
(b) In the case of an adverse benefit determination, the Committee or
its delegate shall provide to the claimant written or electronic notification
setting forth in a manner calculated to be understood by the claimant: (i) the
specific reason or reasons for the adverse benefit determination; (ii) reference
to the specific Program provisions on which the adverse benefit determination is
based; (iii) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why the material or
information is necessary; (iv) a description of the Program's claim review
procedures and the time limits applicable to such procedures, including a
statement of the claimant's right to bring a civil action under Section 502(a)
of ERISA following an adverse final benefit determination on review and in
accordance with Section 6.4; (v) if an internal rule, guideline, protocol or
similar criterion ("internal standard") was relied upon in making the
determination, a copy of the
19
internal standard or a statement that the internal standard was relied upon and
that a copy of the internal standard shall be provided to the claimant free of
charge upon request; and (vi) if the determination is based on a medical
necessity or experimental treatment or similar exclusion or limit, an
explanation of the scientific or clinical judgment for the determination or a
statement that such explanation shall be provided free of charge upon request.
(c) Within 180 days after receipt by the claimant of notification of
the adverse benefit determination, the claimant or his duly authorized
representative, upon written application to the Committee, may request that the
Committee fully and fairly review the adverse benefit determination. On review
of an adverse benefit determination, upon request and free of charge, the
claimant shall have reasonable access to, and copies of, all documents, records
and other information relevant to the claimant's claim for benefits. The
claimant shall have the opportunity to submit written comments, documents,
records, and other information relating to the claim for benefits. The
Committee's (or delegate's) review: (i) shall take into account all comments,
documents, records, and other information submitted regardless of whether the
information was previously considered in the initial adverse benefit
determination; (ii) shall not afford deference to the initial adverse benefit
determination; (iii) shall be conducted by an appropriate named fiduciary of the
Program who is neither an individual who made the initial adverse benefit
determination nor a subordinate of such individual; (iv) if the adverse benefit
determination was based in whole or in part on a medical judgment, shall
identify medical and vocational experts whose advice was obtained on behalf of
the Program in connection with the initial adverse benefit determination; and
(v) shall consult an appropriate health care professional who has appropriate
training and experience in the relevant field of medicine and who or whose
subordinate was not consulted in the initial adverse benefit determination.
(d) Within a reasonable period of time, but not later than 45 days
after receipt of such request for review, the Committee or its delegate shall
notify the claimant of any final benefit determination on the claim, unless
special circumstances require an extension of time for processing the claim. In
no event may the extension period exceed 45 days from the end of the initial
45-day period. If an extension is necessary, the Committee or its delegate shall
provide the claimant with a written notice to this effect prior to the
expiration of the initial 45-day period. The notice shall describe the special
circumstances requiring the extension and the date by which the Committee or its
delegate expects to render a final determination on the request for review. In
the case of an adverse final benefit determination, the Committee or its
delegate shall provide to the claimant written or electronic notification
setting forth in a manner calculated to be understood by the claimant: (i) the
specific reason or reasons for the adverse final benefit determination; (ii)
reference to the specific Program provisions on which the adverse final benefit
determination is based; (iii) a statement that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant to the claimant's claim
for benefits; (iv) a statement of the claimant's right to bring a civil action
under Section 502(a) of ERISA following an adverse final benefit determination
on review and in accordance with Section 6.4; (v) if an internal standard was
relied upon in making the determination, a copy of the internal standard or a
statement that the internal standard was relied upon and that a copy of the
internal standard shall be provided to the claimant free of charge upon request;
(vi) if the determination is based on a medical necessity or experimental
treatment or similar exclusion or limit, an explanation of the scientific or
clinical judgment for the determination or a statement that such explanation
shall be provided free of
20
charge upon request; and (vii) the following statement: "You and your plan may
have other voluntary alternative dispute resolution options, such as mediation.
One way to find out what may be available is to contact your local U.S.
Department of Labor Office and your State insurance regulatory agency."
6.4 Limitations on Actions. No legal action may be commenced prior to the
completion of the benefit claims procedure described herein. In addition, no
legal action may be commenced after the later of (a) 180 days after receiving
the written response of the Committee to an appeal, or (b) 365 days after an
applicant's original application for benefits.
21
ARTICLE VII
AMENDMENT AND TERMINATION OF PROGRAM
7.1 Amendment. The Board may amend this Program in whole or in part at any
time or may at any time suspend or terminate this Program. The Executive
Compensation and Human Resources Committee of the Board may amend this Program
to (a) ensure that this Program complies with the provisions of Section 409A of
the Code for the deferral of taxation on amounts deferred hereunder until the
time of distribution and (b) add provisions for changes to Deferral Elections
and elections as to time and manner of distributions and other changes that
comply with the requirements of Section 409A of the Code for the deferral of
taxation on deferred compensation until the time of distribution.
Notwithstanding the foregoing, no amendment shall reduce the number of Deferred
Shares and Dividend Equivalents credited to any Participant's Deferred Share
Account or cancel any Participant's right to receive Dividend Equivalents (and
any cash that may become payable pursuant to Section 4.5(b)) without the consent
of the affected Participant. Any amendments authorized hereby shall be stated in
an instrument in writing and all Eligible Persons shall be bound thereby upon
receipt of written notice thereof. Adjustments pursuant to Section 4.5 hereof
shall not be deemed amendments to this Program, the Deferred Share Accounts or
the rights of Participants.
7.2 Term. It is the current expectation of the Company that this Program
shall be continued indefinitely, but continuance of this Program is not assumed
as a contractual obligation of the Company. In the event that the Board decides
to discontinue or terminate this Program, it shall notify the Committee and
Participants in this Program of its action in writing, and this Program shall be
terminated at the time therein set forth. All Participants shall be bound
thereby. In connection with the termination of this Program, the Committee may,
in its sole discretion, elect to accelerate the distribution date for all
Deferred Share Accounts (including Deferred Share Accounts being paid in or
otherwise to be paid in the form of installments) and make a lump sum
distribution in respect thereof; provided, however, that if the foregoing
provision would cause the amounts deferred under this Program to be included in
the income of Participants prior to the date of distribution, such provision
shall not apply and distributions to the Participants or their Beneficiaries
shall be made on the dates on which the Participants or their Beneficiaries
would receive benefits hereunder without regard to the termination of the
Program.
22
ARTICLE VIII
MISCELLANEOUS
8.1 Limitation on Participant's Rights. Participation in this Program
shall not give any person the right to continued employment or service or any
rights or interests other than as herein provided. No Participant shall have any
right to any payment or benefit hereunder except to the extent provided in this
Program. This Program creates no fiduciary duty to Participants and shall create
only a contractual obligation on the part of the Company as to such amounts;
this Program shall not be construed as creating a trust. This Program, in and of
itself, has no assets. Participants shall have rights no greater than the right
to receive the Common Stock (and any cash as expressly provided herein) or the
value thereof as a general unsecured creditor in respect of their Deferred Share
Accounts.
8.2 Beneficiary Designation. Upon forms provided by and subject to
conditions imposed by the Company, each Participant may designate in writing the
Beneficiary or Beneficiaries whom such Participant desires to receive any Shares
or amounts payable under this Program after his death. A Participant may from
time to time change his designated Beneficiary or Beneficiaries without the
consent of such Beneficiary or Beneficiaries by filing a new designation with
the Committee. However, if a married Participant wishes to designate a person
other than his spouse as Beneficiary, such designation shall be consented to in
writing by the spouse, which consent shall acknowledge the effect of the
designation. The Participant may change any election designating a Beneficiary
or Beneficiaries without any requirement of further spousal consent if the
spouse's consent so provides. Notwithstanding the foregoing, spousal consent
shall be unnecessary if it is established (to the satisfaction of the Committee
or a Committee representative) that there is no spouse or that the required
consent cannot be obtained because the spouse cannot be located. The Company and
the Committee may rely on the Participant's designation of a Beneficiary or
Beneficiaries last filed in accordance with the terms of this Program.
Notwithstanding the foregoing, if a Participant has completed a beneficiary
designation form for deferred Shares under any other plan or program of the
Company, such prior designation shall be the Beneficiary designation under this
Program and apply to all benefits of the Participant hereunder unless changed in
accordance with this Section 8.2.
If a Participant fails to designate a Beneficiary as provided above,
or if all designated Beneficiaries predecease the Participant, any benefits
remaining unpaid shall be paid in accordance with the Participant's Beneficiary
designation under the Company's Retirement Program, and if there is no such
valid Beneficiary designation, to the Participant's then surviving spouse, or if
none, to the Participant's estate, unless directed otherwise by the court that
has jurisdiction over the assets belonging to the Participant's probate estate.
8.3 Payments to Minors or Persons Under Incapacity. Every person receiving
or claiming benefits under this Program shall be conclusively presumed to be
mentally competent and of age until the date on which the Committee receives a
written notice, in a form and manner acceptable to the Committee, that such
person is incompetent or a minor, for whom a guardian or other person legally
vested with the care of his person or estate has been appointed; provided,
however, that if the Committee finds that any person to whom a benefit is
payable under this Program is unable to care for his affairs because of
incompetency, or because he is a minor, any
23
payment due (unless a prior claim therefor shall have been made by a duly
appointed legal representative) may be paid to the spouse, a child, a parent, a
brother or sister, or to any person or institution considered by the Committee
to have incurred expense for such person otherwise entitled to payment. To the
extent permitted by law, any such payment so made shall be a complete discharge
of liability therefor under this Program.
If a guardian of the estate of any person receiving or claiming benefits
under this Program is appointed by a court of competent jurisdiction, benefit
payments may be made to such guardian provided that proper proof of appointment
and continuing qualification is furnished in a form and manner acceptable to the
Committee. In the event a person claiming or receiving benefits under this
Program is a minor, payment may be made to the custodian of an account for such
person under the Uniform Gifts to Minors Act. To the extent permitted by law,
any such payment so made shall be a complete discharge of any liability therefor
under this Program.
8.4 Receipt and Release. Any payment to a Participant or the Participant's
Beneficiary in accordance with the provisions of this Program shall, to the
extent thereof, be in full satisfaction of all claims against the Board, the
Committee, and the Company. The Committee may require such Participant or
Beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect.
8.5 Deferred Shares and Other Benefits Not Assignable; Obligations Binding
Upon Successors. Deferred Shares and other benefits of a Participant under this
Program shall not be assignable or transferable and any purported transfer,
assignment, pledge or other encumbrance or attachment of any payments or
benefits under this Program, or any interest therein, other than by operation of
law or pursuant to Section 8.2, shall not be permitted or recognized.
Obligations of the Company under this Program shall be binding upon successors
of the Company.
8.6 Employment Taxes. The Company (including its Affiliates) may satisfy
any state or federal employment tax withholding obligation arising from a
deferral of a Qualifying Stock Award under this Program by deducting such amount
from any amount of compensation payable to the Participant. Alternatively, the
Company (including its Affiliates) may require the Participant to deliver to it
the amount of any such withholding obligation as a condition to the deferral of
the Qualifying Stock Award. The Company (including its Affiliates) may instead
satisfy any such withholding obligation by reducing the number of Deferred
Shares that would otherwise be credited to the Participant's Deferred Share
Account as a result of the deferral, provided that the Company (or the
applicable Affiliate) and the Participant make appropriate arrangements to
satisfy all additional income and employment tax withholding obligations that
arise as a result of using this Deferred Share credit reduction method to
satisfy the original employment tax withholding obligation.
8.7 Governing Law; Severability. The validity of this Program or any of
its provisions shall be construed, administered and governed in all respects
under and by the laws of the State of Delaware to the extent such laws are not
preempted by the Employee Retirement Income Security Act of 1974, as amended. If
any provisions of this instrument shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.
24
8.8 Compliance with Laws. This Program, the Company's issuance of Deferred
Shares, and the offer, issuance and delivery of Shares and/or the payment in
Shares through the deferral of compensation under this Program are subject to
compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law) and to such
approvals by any listing, agency or any regulatory or governmental authority as
may, in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities delivered under this Program shall be
subject to such restrictions, and the person acquiring such securities shall, if
requested by the Company, provide such assurances and representations to the
Company as the Company may deem necessary or desirable to assure compliance with
all applicable legal requirements.
8.9 Program Construction. It is the intent of the Company that
transactions pursuant to this Program, with respect to Eligible Persons or
Participants who are subject to Section 16 of the Exchange Act, satisfy and be
interpreted in a manner that satisfies the applicable requirements of Rule 16b-3
so that to the extent elections are timely made, the crediting of Deferred
Shares and the distribution of Shares with respect to Deferred Shares under this
Program will be entitled to the benefits of Rule 16b-3 or other exemptive rules
under Section 16 of the Exchange Act and will not be subjected to avoidable
liability thereunder.
8.10 Compliance with Tax Laws to Preserve Tax Deferral. This Program shall
be construed, administered, and governed in a manner that is consistent with,
and that satisfies the requirements of, Section 409A (or other applicable
section) of the Code and any regulations promulgated thereunder, so that the
taxation to Participants or Beneficiaries of any compensation deferred under
this Program is deferred until distribution as expressly provided under this
Program.
8.11 Headings Not Part of Program. Headings and subheadings in this Program
are inserted for reference only and are not to be considered in the construction
of the provisions hereof.
IN WITNESS WHEREOF, the Company has caused its duly authorized officer
to execute this document this ___ day of _______________, 2004.
OCCIDENTAL PETROLEUM CORPORATION
By
-----------------------------------------
Richard W. Hallock
Executive Vice-President, Human Resources
25