EXHIBIT 10.4
OCCIDENTAL PETROLEUM
CORPORATION
2005 LONG-TERM INCENTIVE
PLAN
OCCIDENTAL OIL AND GAS
CORPORATION
RETURN ON ASSETS INCENTIVE AWARD
AGREEMENT
(Cash-based, Cash-settled
Award)
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GRANTEE:
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[Name]
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DATE OF GRANT:
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TARGET INCENTIVE AMOUNT:
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$_____________
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PERFORMANCE PERIOD:
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January 1, 2010 through December 31,
2013
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THIS AGREEMENT
is made as of the Date of Grant
between OCCIDENTAL PETROLEUM CORPORATION, a Delaware corporation
(“Occidental” and, with its subsidiaries, the
“Company”), and Grantee.
1. GRANT OF RETURN ON
ASSETS INCENTIVE AWARD. In accordance with this Agreement 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 right to receive in cash up to 200% of the
Target Incentive Amount.
2. RESTRICTIONS ON
TRANSFER. Neither this Agreement nor any right to receive cash
pursuant to this Agreement 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. PERFORMANCE
GOAL. The Performance Goal for the Performance Period is based
on the attainment of at least a minimum Return on Assets, as set
forth on Exhibit 1. Return on Assets for the purposes of Exhibit 1
shall be the percentage obtained by dividing (i) the sum of
after-tax earnings for the Oil and Gas Segment for each year in the
Performance Period, as reported in the preliminary year-end
financial statements of the Company, by (ii) the sum of the Oil and
Gas Assets as of December 31 st for each year in the Performance Period. For the
purpose of the foregoing sentence, “Assets” will
reflect all acquisitions, divestures and write downs during the
Performance Period unless the Chief Financial Officer of Occidental
recommends exclusion and the Committee agrees.
4. VESTING AND
FORFEITURE OF RETURN ON ASSETS INCENTIVE AWARD. (a) If the
Grantee fails to accept this award prior to the next record date
for the payment of dividends on Occidental 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
Company receives a copy of this Agreement signed by the
Grantee.
(b) The Grantee must remain in the
continuous employ of the Company through the last day of the
Performance Period to receive payment of this award. 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 the end of the Performance Period, the
Grantee dies, 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 Target Incentive Amount
upon which the Grantee's award is based will be reduced on a pro
rata basis based upon the number of days remaining in the
Performance Period following the date of the Forfeiture Event. If
the Grantee terminates employment voluntarily or is terminated for
cause before the end of the Performance Period, then this Agreement
will terminate automatically on the date of the Grantee’s
termination and the Grantee shall forfeit the right to receive any
cash hereunder.
(c) The Grantee's right to receive
payment in cash of this award in an amount not to exceed 200% of
the Target Incentive Amount will be based on, and become
nonforfeitable upon the Committee’s certification of, the
attainment of the Performance Goal.
(d) For the purposes of Section
4(c), if prior to the end of the Performance Period, the Grantee
transfers his employment among the Company and its affiliates, the
amount of the award attained by the Grantee shall be determined by
assessing the level of achievement of the Performance Goals, if
any, certified by the Committee for each entity which employed the
Grantee during the Performance Period and multiplying the Target
Incentive Amount attainable at such level by a fraction equal to
the number of days in the Performance Period that the Grantee
worked for the entity divided by the total number of days in the
Performance Period. If employees of the entity to which the Grantee
transfers did not receive substantially similar Return on Asset
Incentive Awards, then the amount of the award attained by the
Grantee shall be determined as if the Grantee had not transferred
but had remained with Grantee’s original employer.
(e) Notwithstanding Section 4(c), if
a Change in Control event occurs prior to the end of the
Performance Period, the Grantee's right to receive cash equal to
the Target Incentive Amount (as adjusted for any Forfeiture Event
pursuant to Section 4(b)) will become nonforfeitable.
5. PAYMENT OF
AWARDS. Up to and including 200% of the Target Incentive
Amount, as adjusted pursuant to Sections 4 and 6 of this Agreement,
will be settled in cash only. Payment will be made to the Grantee
as promptly as practicable after the Committee’s
certification of the attainment of the Performance Goal or the
Change in Control event, as the case may be, which, in the case of
payment upon attainment of the Performance Goal, shall be made no
later than the 15 th day of the third month following the end of the
first taxable year in which the award is no longer subject to a
substantial risk of forfeiture.
6. ADJUSTMENTS.
The Committee may adjust the Performance Goal or other features of
this Grant as permitted by Section 5.2.3 of the Plan.
7. NO EMPLOYMENT
CONTRACT. Nothing in this Agreement 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
2 of 10
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 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 Return on Assets Incentive
Award, including the grant or vesting of the Return on Assets
Incentive Award; and (ii) does not commit to and is under no
obligation to structure the terms of the grant or any aspect of the
Return on Assets 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 Return on Assets Incentive Award, 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 Grantee’s receipt of this Return on Assets
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 applicable federal, state and non-U.S. laws. 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 this
Agreement 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 Return on Assets 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 long-service awards. The grant of this Return on Assets
Incentive Award does not create any contractual or other right to
receive future grants of Return on Assets Incentive Awards or
benefits in lieu of Return on Assets Incentive Awards, even if
Grantee has a history of receiving Return on Assets Incentive
Awards, or other cash or stock awards.
11. AMENDMENTS.
The Plan may be modified, amended, suspended or terminated by the
Board at any time, as provided in the Plan. Any amendment to the
Plan will be deemed to be an amendment to this Agreement to the
extent it is applicable to this Agreement; however, no amendment
will adversely affect the rights of the Grantee un
