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

 

 

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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 long-service awards. The grant of this Long-Term
Incentive Award does not create any contractual or other right to receive future
grants of Long-Term Incentive Awards or benefits in lieu of Long-Term Incentive
Awards, even if Grantee has a history of receiving Long-Term 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 these Terms and Conditions to the extent it is
applicable to these Terms and Conditions; however, no amendment will adversely
affect the rights of the Grantee under these Terms and Conditions without the
Grantee's consent.

 

12.  SEVERABILITY. If one or more of the provisions of these Terms and
Conditions is invalidated for any reason by a court of competent jurisdiction,
the invalidated provisions shall be deemed to be separable from the other
provisions of these Terms and Conditions, and the remaining provisions of these
Terms and Conditions will continue to be valid and fully enforceable.

 

 

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13.  ENTIRE AGREEMENT; RELATION TO PLAN; INTERPRETATION. Except as specifically
provided in this Section, these Terms and Conditions and the Attachments
incorporated in these Terms and Conditions constitute the entire agreement
between the Company and the Grantee with respect to this Long-Term Incentive
Award. These Terms and Conditions are subject to the terms and conditions of the
Plan. In the event of any inconsistent provisions between these Terms and
Conditions and the Plan, the provisions of the Plan control. Capitalized terms
used in these Terms and Conditions without definitions have the meanings
assigned to them in the Plan. References to Sections and Attachments are to
Sections of, and Attachments incorporated in, these Terms and Conditions unless
otherwise noted.

 

14.  SUCCESSORS AND ASSIGNS. Subject to Sections 2 and 3, the provisions of
these Terms and Conditions shall be for the benefit of, and be binding upon, the
successors, administrators, heirs, legal representatives and assigns of the
Grantee, and the successors and assigns of the Company.

 

15.  GOVERNING LAW. The laws of the State of Delaware govern the interpretation,
performance, and enforcement of these Terms and Conditions.

 

16.  PRIVACY RIGHTS. By accepting this Long-Term Incentive Award, the Grantee
explicitly and unambiguously consents to the collection, use and transfer, in
electronic or other form, of the Grantee’s personal data as described in these
Terms and Conditions by and among, as applicable, the Company and its affiliates
for the exclusive purpose of implementing, administering and managing the
Grantee’s participation in the Plan. The Grantee understands that the Company
holds, or may receive from any agent designated by the Company, certain personal
information about the Grantee, including, but not limited to, the Grantee’s
name, home address and telephone number, date of birth, social insurance number
or other identification number, salary, nationality, job title, any shares of
stock or directorships held in the Company, details of this Long-Term Incentive
Award or any other entitlement to cash or shares of stock awarded, canceled,
exercised, vested, unvested or outstanding in the Grantee’s favor, for the
purpose of implementing, administering and managing the Plan, including
complying with applicable tax and securities laws (“Data”). Data may be
transferred to any third parties assisting in the implementation, administration
and management of the Plan. These recipients may be located in the Grantee’s
country or elsewhere, and may have different data privacy laws and protections
than the Grantee’s country. By accepting these Terms and Conditions, the Grantee
authorizes the recipients to receive, possess, use, retain and transfer the
Data, in electronic or other form, for the purposes described above. The Grantee
may, at any time, view Data, request additional information about the storage
and processing of Data, require any necessary amendments to Data or refuse or
withdraw the consents herein, in any case without cost, by contacting the
Committee in writing. Refusing or withdrawing consent may affect the Grantee’s
ability to participate in the Plan.

 

17.  ELECTRONIC DELIVERY AND ACCEPTANCE. The Company may, in its sole
discretion, decide to deliver any documents related to this Long-Term Incentive
Award granted under the Plan or future awards that may be granted under the Plan
(if any) by electronic means or to request the Grantee’s consent to participate
in the Plan by electronic means. The Grantee hereby consents to receive such
documents by electronic delivery and, if requested, to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.

 

18.  GRANTEE'S REPRESENTATIONS AND RELEASES. By accepting this Long-Term
Incentive Award, the Grantee acknowledges that the Grantee has read these Terms
and Conditions and understands that (i) the grant of this Long-Term Incentive
Award is made voluntarily by

 

 

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Occidental in its discretion with no liability on the part of any of its direct
or indirect subsidiaries and that, if the Grantee is not an employee of
Occidental, the Grantee is not, and will not be considered, an employee of
Occidental but the Grantee is a third party (employee of a subsidiary) to whom
this Long-Term Incentive Award is granted; (ii) all decisions with respect to
future awards, if any, will be at the sole discretion of Occidental; (iii) the
Grantee’s participation in the Plan is voluntary; (iv) this Long-Term Incentive
Award is an extraordinary item that does not constitute a regular and recurring
item of base compensation; (v) the future amount of any cash payment pursuant to
this Long-Term Incentive Award cannot be predicted and Occidental does not
assume liability in the event this Long-Term Incentive Award has no value in the
future; (vi) subject to the terms of any tax equalization agreement between the
Grantee and the entity employing the Grantee, the Grantee will be solely
responsible for the payment or nonpayment of taxes imposed or threatened to be
imposed by any authority of any jurisdiction; and (vii) Occidental is not
providing any tax, legal or financial advice with respect to this Long-Term
Incentive Award or the Grantee’s participation in the Plan.

 

In consideration of the grant of this Long-Term Incentive Award, no claim or
entitlement to compensation or damages shall arise from termination of this
Long-Term Incentive Award or diminution in value of this Long-Term Incentive
Award resulting from termination of the Grantee’s employment by the Company (for
any reason whatsoever) and, to the extent permitted by law, the Grantee
irrevocably releases the Company from any such claim that may arise; if,
notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen, then, by accepting this Long-Term Incentive Award,
the Grantee shall be deemed irrevocably to have waived his or her entitlement to
pursue such claim.

 

By accepting this Long-Term Incentive Award, the Grantee agrees, to the extent
not contrary to applicable law, to the General Terms of Employment set out on
Attachment 1 and the Arbitration Provisions set out on Attachment 2, which, in
each case, are incorporated in these Terms and Conditions by reference.

 

19.  IMPOSITION OF OTHER REQUIREMENTS. Occidental reserves the right to impose
other requirements on the Grantee’s participation in the Plan and on the
Long-Term Incentive Award, to the extent Occidental determines it is necessary
or advisable in order to comply with local law or facilitate the administration
of the Plan, and to require the Grantee to sign any additional agreements or
undertakings that may be necessary to accomplish the foregoing.

 

20.  COMPLIANCE WITH SECTION 409A OF THE CODE. Notwithstanding anything to the
contrary contained in these Terms and Conditions, to the extent that the Board
determines that the Plan or this award is subject to Section 409A of the U.S.
Internal Revenue Code (the “Code”) and fails to comply with the requirements of
Section 409A of the Code, the Board reserves the right (without any obligation
to do so) to amend or terminate the Plan and/or amend, restructure, terminate or
replace this award in order to cause this award to either not be subject to
Section 409A of the Code or to comply with the applicable provisions of such
section.

 

 

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Attachment 1

 

General Terms of Employment

 

 

 

A.  Except as otherwise required by law or legal process, the Grantee will not
publish or divulge to any person, firm, corporation or institution and will not
use to the detriment of Occidental, or any of its subsidiaries or other
affiliates, or any of their respective officers, directors, employees or
stockholders (collectively, “Occidental Parties”), at any time during or after
the Grantee’s employment by any of them, any trade secrets or confidential
information of any of them (whether generated by them or as a result of any of
their business relationships), including such information as described in
Occidental’s Code of Business Conduct and other corporate policies, without
first obtaining the written permission of an officer of the Company.

 

B.  At the time of leaving employment with the Company, the Grantee will deliver
to the Company, and not keep or deliver to anyone else, any and all credit
cards, drawings, blueprints, specifications, devices, notes, notebooks,
memoranda, reports, studies, correspondence and other documents, and, in
general, any and all materials relating to the Occidental Parties (whether
generated by them or as a result of their business relationships), including any
copies (whether in paper or electronic form), that the Grantee has in the
Grantee’s possession or control.

 

C.  The Grantee will, during the Grantee’s employment by the Company, comply
with the provisions of Occidental’s Code of Business Conduct.

 

D.  Except as otherwise required by the Grantee’s job or permitted by law, the
Grantee will not make statements about any Occidental Parties (1) to the press,
electronic media, to any part of the investment community, to the public, or to
any person connected with, employed by or having a relationship with any of them
without permission of an officer of the Company or (2) that are derogatory,
defamatory or negative. Nothing herein, however, shall prevent Grantee from
making a good faith report or complaint to appropriate governmental authorities.
To the fullest extent permitted by law, Grantee will not interfere with or
disrupt any of the Company’s operations or otherwise take actions intended
directly to harm any of the Occidental Parties.

 

E.  All inventions, developments, designs, improvements, discoveries and ideas
that the Grantee makes or conceives in the course of employment by the Company,
whether or not during regular working hours, relating to any design, article of
manufacture, machine, apparatus, process, method, composition of matter, product
or any improvement or component thereof, that are manufactured, sold, leased,
used or under development by, or pertain to the present or possible future
business of the Company shall be a work-for-hire and become and remain the
property of Occidental, its successors and assigns.

 

The provisions of this Section do not apply to an invention that qualifies fully
under the provisions of Section 2870 of the California Labor Code, which
provides in substance that provisions in an employment agreement providing that
an employee shall assign or offer to assign rights in an invention to his or her
employer do not apply to an invention for which no equipment, supplies,
facilities, or trade secret information of the employer was used and which was
developed entirely on the employee’s own time, except for those inventions that
either (a) relate, at the time of conception or reduction to practice of the
invention, (1) to the business of the employer or (2) to the employer’s actual
or demonstrably anticipated research or development, or (b) result from any work
performed by the employee for the employer.

F.  The foregoing General Terms of Employment are not intended to be an
exclusive list of the employment terms and conditions that apply to the Grantee.
The Company, in its sole discretion, may at any time amend or supplement the
foregoing terms. The Grantee’s breach of the foregoing General Terms of
Employment will entitle the Company to take appropriate disciplinary action,
including, without limitation, reduction of the Long-Term Incentive Award
granted pursuant to these Terms and Conditions and termination of employment.

Attachment 2

 

Arbitration Provisions

 

 

 

Any dispute arising out of or in any way related to the Grantee’s employment
with the Company, or the termination of that employment, will be decided
exclusively by final and binding arbitration pursuant to any procedures required
by applicable law. To the extent not inconsistent with applicable law, any
arbitration will be submitted to American Arbitration Association (“AAA”) and
subject to AAA Employment Arbitration Rules and Mediation Procedures in effect
at the time of filing of the demand for arbitration. Only the following claims
are excluded from these Terms and Conditions: (1) claims for workers’
compensation, unemployment compensation, or state disability benefits, and
claims based upon any pension or welfare benefit plan the terms of which contain
an arbitration or other non-judicial dispute resolution procedure, (2) to the
extent permitted by applicable law, claims for provisional remedies to maintain
the status quo pending the outcome of arbitration, (3) claims based on
compensation award agreements and incentive plans and (4) claims which are not
permitted by applicable law to be subject to a binding pre-dispute arbitration
agreement.

 

Any controversy regarding whether a particular dispute is subject to arbitration
under this Section shall be decided by the arbitrator.

 

To the extent required under applicable law, the Grantee’s responsibility for
payment of the neutral arbitrator’s fees and expenses shall be limited to an
amount equal to the filing fee that would be required for a state trial court
action and the Company shall pay all remaining fees and expenses of the
arbitrator. Unless otherwise required under applicable law, the parties shall
each pay their pro rata share of the neutral arbitrator's expenses and fees. Any
controversy regarding the payment of fees and expenses under this arbitration
provision shall be decided by the arbitrator.

 

The arbitrator may award any form of remedy or relief (including injunctive
relief) that would otherwise be available in court. Any award pursuant to said
arbitration shall be accompanied by a written opinion of the arbitrator setting
forth the reason for the award. The award rendered by the arbitrator shall be
conclusive and binding upon the parties hereto, and judgment upon the award may
be entered, and enforcement may be sought in, any court of competent
jurisdiction. To the extent not inconsistent with applicable laws, the
arbitrator will have the authority to hear and grant motions.