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EXHIBIT
10.2
OCCIDENTAL PETROLEUM
CORPORATION
2005 LONG-TERM
INCENTIVE PLAN
TOTAL SHAREHOLDER
RETURN INCENTIVE AWARD AGREEMENT
(Equity-based, Equity
and Cash-Settled Award)
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GRANTEE:
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[Name]
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DATE OF
GRANT:
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July 18,
2007
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TARGET PERFORMANCE
SHARES:
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PERFORMANCE
PERIOD:
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July 18, 2007 through
July 17, 2011
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THIS AGREEMENT
(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.
G RANT OF T ARGET P
ERFORMANCE S HARES . 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
one-half in Common Shares and one-half in cash up to 150% of the
number/value of Target Performance Shares. For the purposes of this
Agreement, “Target Performance Shares” means a
bookkeeping entry that records the equivalent of Common Shares
awarded pursuant to Section 4.2 of the Plan that is payable upon
the achievement of the Performance Goals. Target Performance Shares
are not Common Shares and have no voting rights or, except as
stated in Section 6, dividend rights.
2.
R ESTRICTIONS ON T RANSFER .
Neither this Agreement nor any right to receive Common Shares or
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 permitted by 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 Administrator).
3.
P ERFORMANCE G OALS . The
Performance Goal for the Performance Period is a peer company
comparison based on Total Shareholder Return, as set forth on
Exhibit 1. Total Shareholder Return shall be calculated for each
peer company using the average of its last reported sale price per
share of common stock on the New York Stock Exchange - Composite
Transactions for the last ten trading days preceding July 18, 2007
and the average of its last reported sale price per share of common
stock on the New York Stock Exchange - Composite Transactions for
the last ten trading days preceding July 17, 2011. The peer
companies are: Anadarko Petroleum Corporation, Apache Corporation,
BP p.l.c., Chevron Corporation, ConocoPhillips, Devon Energy
Corporation, ExxonMobil Corporation and Royal Dutch Shell plc. If a
peer company ceases to be a publicly-traded company at any time
during the Performance Period or the Administrator determines
pursuant to Section 7 of this Agreement to reflect a change in
circumstances with respect to any peer company, then such company
will be removed as a peer company and the achievement of the
Performance Goal will be determined with respect to the remaining
peer companies as set forth on Exhibit 1.
4.
V ESTING AND F ORFEITURE OF T
ARGET P ERFORMANCE S
HARES . (a) 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 or becomes permanently disabled while in
the employ of the Company, 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 Target Performance Shares 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 Grantee’s termination and
Grantee shall forfeit the right to receive any Common Shares or
cash hereunder.
(b) The Grantee’s
right to receive payment of this award in an amount not to exceed
150% of the Target Performance Shares, rounded up to the nearest
whole share, will be based and become nonforfeitable upon the
Administrator’s certification of the attainment of the
Performance Goals.
(c) Notwithstanding
Section 4(b), if a Change in Control Event occurs prior to the end
of the Performance Period, the Grantee’s right to receive
payment at the Target Performance Share level (as adjusted for any
Forfeiture Event pursuant to Section 4(a)) will become
nonforfeitable. The right to receive shares and cash in excess of
the Target Performance Share level (as adjusted for any Forfeiture
Event pursuant to Section 4(a)) will be forfeited.
5.
P AYMENT OF A WARDS . The
Target Performance Shares as adjusted pursuant to Sections 4 and 7
of this Agreement will be settled 50% in Common Shares and 50% in
cash. The cash payment will equal the closing price of the Common
Shares on the New York Stock Exchange on the date of the
Administrator’s certification (the “Certification Date
Value”) of the attainment of the Performance Goals multiplied
by 50% of the Target Performance Shares earned at the Performance
Goal level attained and will be paid as promptly as possible after
such date. The Common Shares covered by this Agreement or any
prorated portion thereof shall be issued to the Grantee as promptly
as practicable after the Administrator’s certification of the
attainment of the Performance Goals or the Change in Control Event,
as the case may be. Each of the cash payment and the Common Shares
shall in any event be made no later than the 15th 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.
C REDITING AND P AYMENT OF D
IVIDEND E QUIVALENTS . With
respect to the number of Target Performance Shares 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 Shares as and when declared during the period
beginning on the Date of Grant and ending with respect to any
portion of the Target Performance Shares covered by this Agreement
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.
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7.
A DJUSTMENTS . (a) The number or kind of
shares of stock covered by this Agreement shall be adjusted as the
Administrator determines pursuant to Section 7.2 of the Plan in
order to prevent dilution or expansion of the Grantee’s
rights under this Agreement as a result of events such as stock
dividends, stock splits or other changes in the capital structure
of Occidental, or any merger, consolidation, spin-off, liquidation
or other corporate transaction having a similar effect. If any such
adjustment occurs, the Company will give the Grantee written notice
of the adjustment.
(b) In addition, the
Administrator may adjust the Performance Goal or other features of
this Grant as permitted by Section 5.2.3 of the Plan.
8.
N O E MPLOYMENT C
ONTRACT . 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
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