EXHIBIT 10.5
OCCIDENTAL PETROLEUM
CORPORATION
2005 LONG-TERM INCENTIVE
PLAN
LONG-TERM INCENTIVE
AWARD
TERMS AND
CONDITIONS
(Equity-based, Cash-settled
Award)
|
GRANTEE:
|
[Name]
|
|
DATE OF GRANT:
|
See “Grants &Awards”
Tab
|
|
|
|
|
VESTING DATE SCHEDULE:
|
1/3 of Long-Term Incentive Units on July 14,
2010
|
|
|
1/3 of Long-Term Incentive Units on July 14,
2011
|
|
|
1/3 of Long-Term Incentive Units on July 14,
2012
|
The following Terms and
Conditions (these “Terms and Conditions”) are set
forth as of the Date of Grant between OCCIDENTAL PETROLEUM
CORPORATION, a Delaware corporation (“Occidental” and,
with its subsidiaries, the “Company”), and the Eligible
Employee receiving this award (the
“Grantee”).
1. GRANT OF LONG-TERM
INCENTIVE AWARD. In accordance with these Terms and Conditions
and the Occidental Petroleum Corporation 2005 Long-Term Incentive
Plan, as the same may be amended from time to time (the
“Plan”), Occidental grants to the Grantee as of the
Date of Grant, the number of Long-Term Incentive Units (“LTI
Units”) set forth above, subject to adjustment under the Plan
and Section 6 of these Terms and Conditions. An LTI Unit represents
the right to receive in cash, upon vesting, as set forth in Section
3, the Long-Term Incentive Value of one share of Occidental Common
Stock, $0.20 par value (the “Common Stock”). LTI Units
are not Common Stock and have no voting rights or, except as stated
in Section 5, dividend rights. “Long-Term Incentive
Value” means the last reported sale price of a share of
Common Stock on the New York Stock Exchange Composite Transactions
on the applicable scheduled Vesting Date, date of death or Change
in Control event.
2. RESTRICTIONS ON
TRANSFER. Neither these Terms and Conditions nor any right to
receive cash pursuant to these Terms and Conditions may be
transferred or assigned by the Grantee other than (i) to a
beneficiary designated on a form approved by the Company (if
enforceable under local law), by will or, if the Grantee dies
without designating a beneficiary of a valid will, by the laws of
descent and distribution, or (ii) pursuant to a domestic relations
order, if applicable, (if approved or ratified by the
Committee).
3. VESTING AND
FORFEITURE OF LONG-TERM INCENTIVE AWARD. (a) If the Grantee
fails to accept this award prior to the next record date for the
payment of dividends on the Common Stock subsequent to the Date of
Grant, then, notwithstanding any other provision of this award, the
Grantee shall forfeit all rights under this award and this award
will become null and void. For purposes of this section, acceptance
of the award shall occur on the date the Grantee accepts this
Long-Term Incentive Award through the on-line system designated by
the Company.
(b) The Grantee must remain in the
continuous employ of the Company through the applicable Vesting
Date to receive payment of this award in the number of LTI Units
shown for such Vesting Date. The continuous employment of the
Grantee will not be deemed to have been interrupted by reason of
the transfer of the Grantee’s employment among the Company
and its affiliates or an approved leave of absence. However, if,
prior to any Vesting Date, the Grantee becomes permanently disabled
while in the employ of the Company and terminates employment as a
result thereof, retires with the consent of the Company, or
terminates
employment for the convenience of
the Company (each of the foregoing, a “Forfeiture
Event”), then the number of unvested LTI Units will be
reduced on a pro rata basis based upon the number of days remaining
until the final Vesting Date following the date of the Forfeiture
Event. If the Grantee terminates employment voluntarily or is
terminated for cause before any Vesting Date, then these Terms and
Conditions will terminate automatically on the date of the
Grantee’s termination and the Grantee shall forfeit the right
to receive any unvested LTI Units. If the Grantee dies while in the
employ of the Company before any Vesting Date, all of the unvested
LTI Units will vest as of the date of death and become immediately
payable.
(c) If a Change in Control event
occurs prior to the last scheduled Vesting Date, all unvested LTI
Units shall immediately vest and become nonforfeitable unless,
prior to the occurrence of the Change in Control event, the
Committee, as provided in Section 7.1 of the Plan, determines that
such event will not accelerate vesting of any of these LTI Units.
Any such determination by the Committee is binding on the
Grantee.
4. PAYMENT OF
AWARDS. Payment of the Long-Term Incentive Value for each LTI
Unit, as adjusted pursuant to Sections 3 and 6 of these Terms and
Conditions, will be settled in cash only. Payment will be made to
the Grantee as promptly as practicable after the applicable
scheduled Vesting Date, date of death or the Change in Control
event, as the case may be.
5. CREDITING AND
PAYMENT OF DIVIDEND EQUIVALENTS . With respect to the number of
LTI Units listed above, the Grantee will be credited on the books
and records of Occidental with an amount (the "Dividend
Equivalent") equal to the amount per share of any cash dividends
declared by the Board on the outstanding Common Stock as and when
declared with a record date during the period beginning on the Date
of Grant and ending, with respect to any portion of the LTI Units
covered by these Terms and Conditions, on the date on which the
Grantee's right to receive such portion becomes nonforfeitable, or,
if earlier, the date on which the Grantee forfeits the right to
receive such portion. Occidental will pay in cash to the Grantee an
amount equal to the Dividend Equivalents credited to such Grantee
as promptly as may be practicable after the Grantee has been
credited with a Dividend Equivalent.
6. ADJUSTMENTS .
The number of LTI Units covered by this Grant may be adjusted as
the Committee determines, pursuant to Section 7.2 of the Plan, in
order to prevent dilution or expansion of the Grantee’s
rights under these Terms and Conditions as a result of events such
as stock dividends, stock splits, or other 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.
7. NO EMPLOYMENT
CONTRACT. Nothing in these Terms and Conditions confers upon
the Grantee any right with respect to continued employment by the
Company, nor limits in any manner the right of the Company to
terminate the employment or adjust the compensation of the Grantee.
Unless otherwise agreed in a writing signed by the Grantee and an
authorized representative of the Company, the Grantee’s
employment with the Company is at will and may be terminated at any
time by the Grantee or the Company.
8. TAXES AND
WITHHOLDING. Regardless of any action the Company takes with
respect to any or all income tax (including U.S. federal, state and
local tax and non-U.S. tax), social insurance, payroll tax, payment
on account or other tax-related items related to the
Grantee’s participation in the Plan and legally applicable to
the Grantee (“Tax-Related Items”), the Grantee
acknowledges that the ultimate liability for all Tax-Related Items
is and remains the Grantee’s responsibility and may exceed
the amount actually withheld by the Company. The Grantee
2
further acknowledges that the
Company (i) makes no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of
this Long-Term Incentive Award, including the grant or vesting of
the Long-Term Incentive Award and the receipt of Dividend
Equivalents; and (ii) does not commit to and is under no obligation
to structure the terms of the grant or any aspect of the Long-Term
Incentive Award to reduce or eliminate the Grantee’s
liability for Tax-Related Items or achieve any particular tax
result. Further, if the Grantee has become subject to tax in more
than one jurisdiction between the Date of Grant and the date of any
relevant taxable event, the Grantee acknowledges that the Company
may be required to withhold or account for Tax-Related Items in
more than one jurisdiction.
Prior to the relevant taxable event,
the Grantee shall pay or make adequate arrangements satisfactory to
the Company to satisfy all Tax-Related Items. In this regard, the
Grantee authorizes the Company to withhold all applicable
Tax-Related Items legally payable by the Grantee first from the
cash payable pursuant to this Long-Term Incentive Award (including
Dividend Equivalents) and, if not sufficient, from the
Grantee’s wages or other cash compensation. The Grantee shall
pay to the Company any amount of Tax-Related Items that the Company
may be required to withhold as a result of the Grantee’s
receipt of this Long-Term Incentive Award that cannot be satisfied
by the means previously described.
9. COMPLIANCE WITH
LAW. The Company will make reasonable efforts to comply with
all federal, state and non-U.S. laws applicable to awards of this
type. However, if it is not feasible for the Company to comply with
these laws with respect to the grant or settlement of these awards,
then the awards may be cancelled without any compensation or
additional benefits provided to Grantee as a result of the
cancellation.
10. RELATION TO OTHER
BENEFITS. The benefits received by the Grantee under these
Terms and Conditions will not be taken into account in determining
any benefits to which the Grantee may be entitled under any profit
sharing, retirement or other benefit or compensation plan
maintained by the Company, including the amount of any life
insurance coverage available to any beneficiary of the Grantee
under any life insurance plan covering employees of the Company.
Additionally, this Long-Term Incentive Award is not part of normal
or expected compensation or salary for any purposes, including, but
not limited to calculation of any severance, resignation,
termination, redundancy, end of service payments, bonuses
or
