EXHIBIT 10.20

Occidental Petroleum Corporation

Supplemental Retirement Plan II

Effective as of January 1, 2005

Contents

 

Article 1. Introduction

1

1.1 Establishment and Purpose

1

1.2 Status of the Plan

1

1.3 Application of the Plan

2

Article 2. Definitions

3

2.1 Definitions

3

Article 3. Participation

9

3.1 Effective Date of Participation

9

Article 4. Benefits

10

4.1 Allocations Relating to the Retirement Plan

10

4.2 Allocations Relating to the Savings Plan

11

4.3 Allocations Relating to the Deferred Compensation Plan

12

4.4 Maintenance of Accounts

12

4.5 Vesting and Forfeiture

13

Article 5. Payments

14

5.1 Earliest Time for Distributions

14

5.2 Election of Time and Form of Payment

14

5.3 No Acceleration of Payments

15

5.4 Death

16

5.5 Tax Withholding

16

Article 6. Administration

17

6.1 The Administrative Committee

17

6.2 Compensation and Expenses

17

6.3 Manner of Action

17

6.4 Chairman, Secretary, and Employment of Specialists

17

6.5 Subcommittees

17

6.6 Other Agents

18

6.7 Records

18

6.8 Rules

18

i

6.9 Powers and Duties

18

6.10 Decisions Conclusive

18

6.11 Fiduciaries

19

6.12 Notice of Address

19

6.13 Data

19

6.14 Adjustments

19

6.15 Member’s Own Participation

20

6.16 Indemnification

20

Article 7. Amendment and Termination

22

7.1 Amendment and Termination

22

7.2 Reorganization of Employer

22

7.3 Protected Benefits

22

Article 8. Claims and Appeals Procedures

23

8.1 Application for Benefits

23

8.2 Claims Procedure for Benefits

23

8.3 Limitations on Actions

24

Article 9. General Provisions

26

9.1 Unsecured General Creditor

26

9.2 Trust Fund

26

9.3 Nonassignability

26

9.4 Release from Liability to Participant

26

9.5 Employment Not Guaranteed

27

9.6 Gender, Singular & Plural

27

9.7 Captions

27

9.8 Validity

27

9.9 Notice

27

9.10 Applicable Law

27

ii

Article 1. Introduction

1.1 Establishment and Purpose

Occidental Petroleum Corporation (the “Company”) hereby establishes the
Occidental Petroleum Corporation Supplemental Retirement Plan II (the “Plan”)
effective as of January 1, 2005. It is the purpose of this Plan to provide
eligible Employees with benefits that will compensate them for maximums imposed
by law upon contributions to qualified plans. The portion of the Plan reflecting
credits to compensate for the maximum limits imposed by Code section 415 is
intended to constitute an “excess plan” as defined in ERISA section 3(36). The
remaining portion of the Plan is intended to constitute a plan which is unfunded
and maintained primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees and is intended to
meet the exemptions provided in ERISA sections 201(2), 301(a)(3), and 401(a)(1),
as well as the requirements of Department of Labor Regulation
section 2520.104-23. The Plan shall be administered and interpreted so as to
meet the requirements of these exemptions and the regulation.

1.2 Status of the Plan

(a)

Nonqualified Plan. The Plan is not qualified within the meaning of Code
section 401(a). The Plan is intended to provide an unfunded and unsecured
promise to pay money in the future and thus not to involve, pursuant to Treasury
Regulation section 1.83-3(e), the transfer of “property” for purposes of Code
section 83. Likewise, allocations under this Plan to the account maintained for
a Participant, and earnings credited thereon, are not intended to confer an
economic benefit upon the Participant nor is the right to the receipt of future
benefits under the Plan intended to result in any Participant, Beneficiary or
Alternate Payee being in constructive receipt of any amount so as to result in
any benefit due under the Plan being includible in the gross income of any
Participant, Beneficiary or Alternate Payee in advance of the date on which
payment of any benefit due under the Plan is actually made.

(b)

Compliance with Code Section 409A. This Plan is intended to comply with Code
section 409A and related regulatory guidance. Therefore, notwithstanding any
other provision of this Plan, for allocations under this Plan and earnings
credited on such amounts, no Participant, Beneficiary or Alternate Payee shall
have a right to receive a payment if that payment would result in making any
portion of the Plan benefit subject to federal income tax under Code
section 409A before payment of that benefit has actually been made to the
Participant, Beneficiary or Alternate Payee. Consistent with the terms of the
Plan, the Administrative Committee shall establish rules regarding distribution
options that are designed to avoid making any portion of the Plan benefit
subject to federal income tax under Code section 409A before payment of that
benefit has actually been made.

(c)

No Guarantees of Intended Tax Treatment. The Plan shall be administered and
interpreted so as to satisfy the requirements for the intended tax treatment
under the Code described in this section. However, the treatment of benefits
earned under and

1

 

benefits received from this Plan, for purposes of the Code and other applicable
tax laws (such as state income and employment tax laws), shall be determined
under the Code and other applicable tax laws and no guarantee or commitment is
made to any Participant, Beneficiary or Alternate Payee with respect to the
treatment of accruals under or benefits payable from the Plan for purposes of
the Code and other applicable tax laws.

1.3 Application of the Plan

The terms of the Plan are applicable to eligible Employees employed by an
Employer on or after January 1, 2005. All distributions and distribution
elections made on or after January 1, 2005 shall be made in accordance with the
provisions of this Plan, as amended from time to time.

2

Article 2. Definitions

2.1 Definitions

Whenever the following words and phrases are used in the Plan with the first
letter capitalized, they shall have the meanings specified below, unless the
context clearly indicates otherwise:

(a)

“Administrative Committee” means the committee with authority to administer the
Plan as provided under section 6.1.

(b)

“Affiliate” means:

(1)

Any corporation or other business organization while it is controlled by or
under common control with the Company within the meaning of Code sections 414
and 1563;

(2)

Any member of an affiliated service group within the meaning of Code
section 414(m) of which the Company or any Affiliate is a member;

(3)

Any entity which, pursuant to Code section 414(o) and related Treasury
regulations, must be aggregated with the Company or any Affiliate for plan
qualification purposes; or

(4)

Any corporation, trade or business which is more than 50 percent owned, directly
or indirectly, by the Company and which is designated by the Board or, if
authorized by the Board, the Administrative Committee as an Affiliate.

(c)

“Alternate Payee” means a former spouse of a Participant who is recognized by a
Divorce Order as having a right to receive all, or a portion of, the benefits
payable under this Plan with respect to the Participant.

(d)

“Base Pay of Record” means the base salary of an Employee as stated in the
payroll records of his Employer, excluding any amounts paid for bonuses, income
realized upon exercise of stock options, and any other special pay which the
Employer pays to the Employee during the Plan Year, prior to reduction for any
deferral of base salary under the Savings Plan, the Deferred Compensation Plan
or any other qualified or non-qualified deferred compensation plan or agreement
maintained by the Company or Employer and any pretax contributions for welfare
and spending account benefits under any plan maintained by the Company or
Employer.

 

In the case of an LTD Participant, Base Pay of Record means the Participant’s
base salary as described above in effect at the time he became disabled, as
defined in the Long-Term Disability Plan.

(e)

“Base Pay Paid” means the Employee Base Pay of Record, reduced for any deferral
of base salary under the Deferred Compensation Plan.

3

(f)

“Beneficiary” means the person(s) entitled to receive the Participant’s benefits
under the Retirement Plan in the event of the Participant’s death.

 

Notwithstanding the foregoing, where an Employee becomes a Participant through
merger of another plan into this Plan, “Beneficiary” means the person or persons
so designated under such other plan until a new Beneficiary designation is
effected under the Retirement Plan by such Employee.

(g)

“Board” means the Board of Directors of the Company.

(h)

“Code” means the Internal Revenue Code of 1986, as amended.

(i)

“Company” means Occidental Petroleum Corporation and any successor thereto.

(j)

“Controlled Group” means each Employer and all entities that must be aggregated
with that Employer pursuant to Code sections 414(b), (c), (m), or (o).

(k)

“Divorce Order” means any judgment, decree, or order (including judicial
approval of a property settlement agreement) that relates to the settlement of
marital property rights between a Participant and his former spouse pursuant to
a state domestic relations law (including, without limitation and if applicable,
community property law).

(l)

“Deferred Compensation Plan” means the Occidental Petroleum Corporation 2005
Deferred Compensation Plan, as amended from time to time.

(m)

“Employee” means any person who is an Eligible Employee, as defined in the
Retirement Plan, or a Transition Eligible Employee, as defined in section 1.34
the Oxy Permian Cash Balance Retirement Plan, as in effect on July 1, 2000.

 

Notwithstanding the foregoing, no individual shall be considered an Employee if
such individual is not classified as a common-law employee in the employment
records of the Employer, without regard to whether the individual is
subsequently determined to have been a common-law employee of the Employer. The
persons excluded by this paragraph from being Employees are to be interpreted
broadly to include and to have at all times included individuals engaged by the
Employer to perform services for such entity in a relationship that the entity
characterizes as other than an employment relationship, such as where the
Employer engages the individual to perform services as an independent contractor
or leases the individual’s services from a third party. The exclusion of the
individual from being an Employee shall apply even if a determination is
subsequently made by the Internal Revenue Service, another governmental agency,
a court or other tribunal, after the individual is engaged to perform such
services, that the individual is an employee of the Employer for purposes of
pertinent Code sections or for any other purpose.

(n)

“Employer” means the Company and any Affiliate which is designated by the Board
or the Administrative Committee and which adopts the Plan.

4

 

The Board or, if authorized by the Board, the Administrative Committee may
designate any Affiliate as an Employer under this Plan. The Affiliate shall
become an Employer and a party to this Plan upon acceptance of such designation
effective as of the date specified by the Board or Administrative Committee.

 

By accepting such designation or continuing as a party to the Plan, each
Employer acknowledges that:

(A)

It is bound by such terms and conditions relating to the Plan as the Company or
the Administrative Committee may reasonably require;

(B)

It hereby acknowledges the authority of the Company and the Administrative
Committee to review the Affiliate’s compliance procedures and to require changes
in such procedures to protect the Plan;

(C)

It has authorized the Company and the Administrative Committee to act on its
behalf with respect to Employer matters pertaining to the Plan;

(D)

It will cooperate fully with Plan officials and their agents by providing such
information and taking such other actions as they deem appropriate for the
efficient administration of the Plan; and

(E)

Its status as an Employer under the Plan is expressly conditioned on its being
and continuing to be an Affiliate of the Company.

 

Subject to the concurrence of the Board or Administrative Committee, any
Affiliate may withdraw from the Plan, and end its status as an Employer
hereunder, by communicating to the Administrative Committee its desire to
withdraw. Upon withdrawal, which shall be effective as of the date agreed to by
the Board or Administrative Committee, as the case may be, and the Affiliate,
the Plan shall be considered frozen as to Employees of such Affiliate.

(o)

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(p)

“Key Employee” means an Employee described in Code section 416(i), but only
while such Employee is treated as a “specified employee” under regulatory
guidance for purposes of Code section 409A(a)(2)(B)(i).

(q)

“LTD Participant” means an Employee:

(1)

Who became disabled under the terms of the Long-Term Disability Plan prior to
October 1, 1995; and

(2)

Who, during the Plan Year, is receiving benefits under the Long-Term Disability
Plan and who was a highly-compensated employee (as defined in Code
section 414(q)) in the year of his commencement of benefits under the Long-Term
Disability Plan.

5

(r)

“Long-Term Disability Plan” means the Occidental Petroleum Corporation Long-Term
Disability Plan or, as appropriate to the LTD Participant or context, the Oxy
Vinyls, LP Long-Term Disability Plan.

(s)

“Participant”\ means a person meeting the requirements to participate in the
Plan set forth in Article 3.

(t)

“Plan Year” means the calendar year.

(u)

“Qualified Divorce Order”means a Divorce Order that:

(1)

Creates or recognizes the existence of an Alternate Payee’s right to, or assigns
to an Alternate Payee the right to, receive all or a portion of the benefits
payable to a Participant under this Plan;

(2)

Clearly specifies:

(A)

The name and the last known mailing address of the Participant and the name and
mailing address of the Alternate Payee covered by the order;

(B)

The amount or percentage of the Participant’s benefits to be paid by this Plan
to the Alternate Payee, or the manner in which such amount or percentage is to
be determined;

(C)

The number of payments or period to which such order applies; and

(D)

That it applies to this Plan; and

(3)

Does not:

(A)

Require this Plan to provide any type or form of benefit, or any option, not
otherwise provided under the Plan;

(B)

Require this Plan to provide increased benefits;

(C)

Require the payment of benefits to an Alternate Payee that are required to be
paid to another Alternate Payee under another Divorce Order previously
determined to be a Qualified Divorce Order; or

(D)

Require the payment of benefits under this Plan at a time or in a manner that
would cause the Plan to fail to satisfy the requirements of Code section 409A
(or other applicable section) and any regulations promulgated thereunder or that
would otherwise jeopardize the deferred taxation treatment of any amounts under
this Plan.

(v)

“Retirement Plan” means the Occidental Petroleum Corporation Retirement Plan, as
amended from time to time.

6

(w)

“Savings Plan” means the Occidental Petroleum Corporation Savings Plan, as
amended from time to time.

(x)

“Separation from Service” means a termination of the employment relationship
that meets the requirements for a separation from service under regulatory
guidance issued pursuant to Code section 409A(a)(2)(A). Pending the issuance of
such regulatory guidance, a Participant will be deemed to have a Separation from
Service under this Plan if the Participant ceases to be an employee of all of
the following:

(1)

An Employer;

(2)

An Affiliate, regardless of whether the Affiliate is an Employer; or

(3)

Any other entity, whether or not incorporated, in which the Company has an
ownership interest, and the Administrative Committee has designated that the
Participant’s commencement of employment with such entity upon the Participant’s
ceasing to be an employee of an entity described in (1) or (2) above will not be
deemed to be a Separation from Service for purposes of this Plan, provided that
such designation shall be made in writing by the Administrative Committee and
shall be communicated to the Participant prior to his commencement of employment
with the entity so designated.

 

For purposes of the preceding provisions, a Participant who ceases to be an
employee of an entity described in (1), (2) or (3) above shall not be deemed to
have a Separation from Service if such cessation of employment is followed
immediately by his commencement of employment with another entity described in
(1), (2) or (3) above.

(y)

“Supplemental Retirement Plan” means the Occidental Petroleum Corporation
Supplemental Retirement Plan in effect on December 31, 2004 and as amended from
time to time.

(z)

“Threshold Amount” means the amount determined by the Company and communicated
to Employees in advance of the Plan Year as the level of annualized Base Pay of
Record at which the sum of the following amounts would exceed the dollar limit
in effect for the Plan Year under Code section 415(c)(1)(A):

(1)

The Plan Limit, determined under Appendix II of the Savings Plan (or any
successor provision), for the Plan Year for a highly compensated employee as
defined under Code section 414(q), times the annualized Base Pay of Record;

(2)

6 percent of the annualized Base Pay Paid; and

(3)

The annual employer contributions for the Plan Year that would be made to the
Retirement Plan based on the Employee’s annualized Base Pay of Record assuming
that the Employee has attained age 35 as of the last day of the Plan Year.

7

(aa)

“Wage Base” means the dollar amount of wages, within the meaning set forth in
Code section 3121(a), upon which the Employer must pay Social Security Old Age,
Survivors and Disability taxes for a Plan Year.

8

Article 3. Participation

3.1 Effective Date of Participation

An Employee shall become a Participant in this Plan, on or after January 1,
2005, on the earliest date that the Employee is described in one or more of the
following subsections:

(a)

Any Employee who was a Participant in the Supplemental Retirement Plan and whose
account in that plan was not fully vested on December 31, 2004 shall become a
Participant in this Plan on January 1, 2005. The nonvested account of such a
Participant shall be transferred to and become the account maintained for the
Participant under this Plan, as of January 1, 2005.

(b)

Any Employee whose annualized Base Pay of Record exceeds the Threshold Amount
for an Employee who will have attained age 35 by the end of the Plan Year shall
become a Participant on the first day of the Plan Year or, if later, the first
day of the payroll period that the Employee’s annualized Base Pay of Record
exceeds the Threshold Amount.

(c)

Any Employee whose annualized Base Pay of Record for the Plan Year exceeds the
amount specified in Code section 401(a)(17) as adjusted and in effect for the
Plan Year shall become a Participant on the first day of such Plan Year or, if
later, the first day of the payroll period that the Employee’s annualized Base
Pay of Record exceeds the amount specified in Code section 401(a)(17) as
adjusted and in effect for the Plan Year.

(d)

Any Employee shall become a Participant on the date that:

(1)

The Employee is eligible to participate in both the Retirement Plan and the
Deferred Compensation Plan, and

(2)

The Employee is eligible to receive a bonus granted under any management
incentive compensation plan of an Employer.

(e)

An individual who is an LTD Participant shall become a Participant on January 1,
2005.

Notwithstanding anything contained herein, any Employee who is entitled to
receive supplemental retirement benefits upon his retirement pursuant to a
written contract of employment between the Employee and the Company or an
Affiliate shall be ineligible to be a Participant effective as of the first day
of the Plan Year following the effective date of such contractual provision.

9

Article 4. Benefits

4.1 Allocations Relating to the Retirement Plan

(a)

Eligibility. The following Employees who become Participants shall be provided
the allocation for the Plan Year specified in subsection (b):

(1)

An Employee:

(A)

Who is eligible to participate in the Savings Plan and the Retirement Plan for
the Plan Year, and

(B)

Whose annualized Base Pay of Record exceeds the Threshold Amount applicable to
the Employee for the Plan Year.

 

If the Employee’s annualized Base Pay of Record increases during the Plan Year
such that it exceeds the Threshold Amount, then the Employee will be eligible
for the allocation specified in subsection (b) as of the first payroll period
for which the Employee’s annualized Based Pay of Record exceeds the Threshold
Amount. If the Employee’s annualized Base Pay of Record decreases during the
Plan Year such that it no longer exceeds the Threshold Amount, then the Employee
shall cease to be eligible for the allocation specified in subsection (b) as of
the first payroll period for which the Employee’s annualized Based Pay of Record
falls below the Threshold Amount.

(2)

An individual who is an LTD Participant for the Plan Year.

(b)

Allocation Amount.

(1)

Contingent Credit. A credit shall be made as of the last day of each month to a
contingent account maintained for each Participant described in subsection (a).
The amount of the credit for the month shall be:

(A)

For a Participant who will not attain age 35 as of the last day of the Plan
Year, the sum of:

(i)

4 percent of Base Pay of Record for the calendar month below the Wage Base; plus

(ii)

8 percent of Base Pay of Record for the calendar month above the Wage Base.

(B)

For a Participant who will have attained age 35 as of the last day of the Plan
Year, the sum of:

(i)

7 percent of Base Pay of Record for the calendar month below the Wage Base; plus

10

(ii)

12 percent of Base Pay of Record for the calendar month above the Wage Base.

 

For purposes of calculating contingent allocations under this section, an
Employee will have Base Pay of Record above the Wage Base for a calendar month
only to the extent that the Employee’s Base Pay of Record for the Plan Year,
determined as of the last day of such pay period, is in excess of the Wage Base.

(2)

Reduction Amount. The amounts contingently credited to the account maintained
for the Participant during the Plan Year under paragraph (1) shall be reduced as
of the last day of the Plan Year, but not below zero, by the amount determined
under this paragraph. The reduction amount is intended to be equal to the
Employee’s allocation under the Retirement Plan for the Plan Year. After the
reduction described in this paragraph, the remaining amount shall be permanently
credited to the account maintained for the Participant.

(A)

No reduction shall apply to the account maintained for any Participant,
including an LTD Participant, who is not an Employee on the last day of the Plan
Year.

(B)

The reduction amount for other Participants shall be equal to the dollar limit
in effect for the Plan Year under Code section 415(c)(1)(A) minus sum of the
following:

(i)

The Plan Limit, determined under Appendix II of the Savings Plan (or any
successor provision) times the Participant’s Base Pay Paid for the Plan Year,
and

(ii)

6 percent times the Participant’s Base Pay Paid for the Plan Year.

 

For purposes of determining the reduction under this subparagraph, no portion of
the Participant’s Base Pay Paid for the Plan Year in excess of the amount
specified in Code section 401(a)(17) in effect for the Plan Year shall be taken
into account. The reduction amount shall not be less than zero.

(3)

Earnings Allocation. The Employer shall also permanently credit earnings on the
monthly allocations under paragraph (1) for the Plan Year as if such allocations
shared in earnings at the rate and in the manner described in section 4.4. The
earning allocation under this paragraph shall not be subject to reduction under
paragraph (2).

4.2 Allocations Relating to the Savings Plan

(a)

Eligibility. An Employee who is eligible to participate in the Savings Plan for
the Plan Year and whose Base Pay Paid for the Plan Year exceeds the amount
specified

11

 

in Code section 401(a)(17) as adjusted and in effect for the Plan Year shall be
provided the allocation for the Plan Year specified in subsection (b):

(b)

Allocation Amount. The amount to be allocated as of the last day of the Plan
Year under this Plan with respect to a Participant described in subsection (a)
above for the Plan Year shall equal the sum of:

(1)

6 percent of the Employee’s Base Pay Paid in excess of the amount specified in
Code section 401(a)(17) as adjusted and in effect for the Plan Year; and

(2)

5 percent of the amount allocated under paragraph (1) which shall be allocated
to the account maintained for the Participant in lieu of interest on such amount
for the Plan Year.

4.3 Allocations Relating to the Deferred Compensation Plan

(a)

Eligibility. An Employee who is a participant in the Retirement Plan and
eligible to participate in the Deferred Compensation Plan for the Plan Year
shall be provided the allocation for the Plan Year specified in subsection (b).

(b)

Allocation Amount. The amount to be allocated in a Plan Year under this Plan
with respect to a Participant described in subsection (a) above for the Plan
Year shall equal that Participant’s applicable percentage multiplied by the
amount of the bonus the Participant is entitled to elect to defer for that plan
year of the Deferred Compensation Plan. This allocation shall be made
irrespective of whether such Participant elects to defer under the Deferred
Compensation Plan all or any part of any bonus to which he might be entitled.
Notwithstanding the preceding sentence, no allocation shall be made to the
account of a Participant who is not an Employee on the date that any such bonus
is awarded.

 

For purposes of this subsection, the term “applicable percentage” shall mean
12 percent in the case of a Participant who shall have attained age 35 prior to
the end of the Plan Year in which the allocation is made and 8 percent in the
case of a Participant who shall not have attained age 35 prior to the end of the
Plan Year in which the allocation is made. The allocation described in this
section shall be made to the account of each Participant effective as of the
date on which the Participant is awarded the bonus he is entitled to defer under
the Deferred Compensation Plan.

4.4 Maintenance of Accounts

(a)

Each Employer shall establish and maintain, in the name of each Participant
employed by that Employer, an individual account which shall consist of all
amounts credited to the Participant. As of the end of each month, the
Administrative Committee shall increase the balance, if any, of the
Participant’s individual account as of the last day of the preceding month, by
multiplying such amount by a number equal to one plus .167% plus the monthly
yield on 5-Year Treasury Constant Maturities for the monthly processing period.

12

(b)

The individual account of each Participant shall represent a liability, payable
when due under this Plan, out of the general assets of the Company, or from the
assets of any trust, custodial account or escrow arrangement which the Company
may establish for the purpose of assuring availability of funds sufficient to
pay benefits under this Plan. The money and any other assets in any such trust
or account shall at all times remain the property of the Company, and neither
this Plan nor any Participant shall have any beneficial ownership interest in
the assets thereof. No property or assets of the Company shall be pledged,
encumbered, or otherwise subjected to a lien or security interest for payment of
benefits hereunder. Accounting for this Plan shall be based on generally
accepted accounting principles.

4.5 Vesting and Forfeiture

Notwithstanding any other Plan provision, all benefits under this Plan shall be
contingent and forfeitable and no Participant shall have a vested interest in
any benefit unless, while he is still employed by an Employer, he becomes fully
vested in his benefit under the Retirement Plan (or would have become vested if
he were a participant in the Retirement Plan). A person who terminates
employment with an Employer for any reason prior to becoming vested hereunder
shall not receive a benefit, provided that, upon rehire by an Employer, any
amounts forfeited by a Participant at the time of his termination of employment
shall be restored, without interest, to his account.

13

Article 5. Payments

5.1 Earliest Time for Distributions

(a)

General Rules. A Participant’s vested account under this Plan may not be
distributed earlier than:

(1)

The Participant’s Separation from Service;

(2)

The Participant’s death.

(b)

Special Rules. Notwithstanding the foregoing:

(1)

In the case of a Participant who is a Key Employee, a distribution made on
account of Separation from Service may not be made before a date that is at
least six months after the Participant’s Separation from Service.

(2)

No LTD Participant shall be entitled to a distribution of benefits under this
Plan prior to the time long-term disability payments cease.

5.2 Election of Time and Form of Payment

(a)

General Rules. All elections as to the time and form of payment under this Plan
shall be made only in accordance with the provisions of this Plan and the rules
and procedures established by the Administrative Committee for the time and
manner of making elections. If a Participant fails to make a valid and timely
election, the vested account, if any, maintained for the Participant shall be
paid as a single sum as soon as administratively practicable. In addition,
notwithstanding any election made by the Participant under this section, if the
balance of the vested account, if any, maintained for the Participant is less
than $50,000 when the amount first becomes payable under section 5.1, the
balance shall be paid in a single sum as soon as administratively practicable.

(b)

Available Times and Forms of Payment. Subject to the provisions of this Article,
the Participant may elect to have his account paid out as follows:

(1)

As single sum during the first calendar quarter following the calendar year in
which occurs the distribution event specified in section 5.1, except death, or

(2)

Annual installment payments over 5, 10, 15, or 20 years, as elected by the
Participant, commencing during the first calendar quarter following the calendar
year in which occurs the distribution event specified in section 5.1, except
death, and continuing each year thereafter until the final installment is paid
or, if earlier, the Participant dies. While benefits are to be paid in
installments, the Participant’s account will continue to be adjusted as provided
in section 4.4(a) until the series of installments has been completed. The
amount of each annual installment while the Participant is alive shall equal the
amount credited to the account as of January 31 of the year in which the
installment is to be paid, multiplied by a fraction, the numerator of which is
1,

14

 

and the denominator of which is the number of installments (including the
current one) which remain to be paid. Each installment shall be paid as soon as
administratively possible after January 31 of the calendar year. If the
Participant dies while installments remain to be paid, the remaining account
credited to the Participant shall be paid to the Beneficiary as soon as
practicable following the Participant’s death.

(c)

Transition Rule. If the Employee is a Participant during the 2005 Plan Year, the
Participant shall make an election with respect to the time and form of payment
of the account maintained for the Participant upon the earlier of the
Participant’s Separation from Service or the 60th day after this Plan is adopted
by the Board, but in no event later than December 31, 2005.

(d)

New Participants. Any Employee who becomes a Participant after December 31, 2005
shall make an election with respect to the time and form of payment of the
account maintained for the Participant no later than the 30th day after the
Employee first becomes a Participant.

(e)

Change of Elections. A Participant shall not be permitted to change his election
as to the time and form of payment, regardless of whether the Participant made
an affirmative initial election or the election was defaulted to a single sum
because of the Participant’s failure to make a valid and timely election, except
as provided in this section.

(1)

Except as provided in section 5.3, no election shall be permitted which
accelerates the time of any payment.

(2)

Any change in election resulting in a delay or change in the form of payment
shall not take effect until the one-year anniversary of the date the changed
election is properly made.

(3)

In the case of a payment on account of the Participant’s Separation from
Service, the first payment under the changed election must result in a deferral
for a period of at least 5 years from the date the first payment would have been
made under the initial election.

5.3 No Acceleration of Payments

The Administrative Committee shall not permit the acceleration of the time or
schedule of payments except as provided in this section.

As of January 1, 2005, acceleration of the time or schedule of payments shall be
permitted only in the following instances:

(a)

A payment to an Alternate Payee to the extent necessary to fulfill a Qualified
Divorce Order;

(b)

A payment that is necessary to comply with a certificate of divestiture as
defined in Code section 1043(b)(2); or

15

(c)

A payment to pay the Federal Insurance Contributions Act (FICA) tax imposed
under Code sections 3101 and 3121(v)(2) on amounts held by the Plan as well as a
payment to pay any income tax at source on wages imposed under Code section 3401
(i.e., wage withholding) on the FICA tax amount and any income tax at source
attributable to the pyramiding wages and taxes. The total payment under this
subsection may not exceed the aggregate FICA tax amount and the income tax
withholding related to such FICA tax amount.

5.4 Death

The account or, if benefits have commenced, the remaining account of a
Participant who dies shall be paid in a single sum to the Participant’s
Beneficiary as soon as administratively possible following the date of the
Participant’s death.

5.5 Tax Withholding

Any federal, state or local taxes, including FICA tax amounts, required by law
to be withheld with respect to benefits earned and vested under this Plan or any
other compensation arrangement may be withheld from the Participant’s benefit,
salary, wages or other amounts paid by the Company or any Employer and
reasonably available for withholding. Prior to making or authorizing any benefit
payment under this Plan, the Company may require such documents from any taxing
authority, or may require such indemnities or a surety bond from any Participant
or Beneficiary, as the Company shall reasonably consider necessary for its
protection.

16

Article 6. Administration

6.1 The Administrative Committee

The Plan shall be administered by an Administrative Committee appointed by the
Board. The Administrative Committee shall be composed of as many members as the
Board may appoint from time to time, but not fewer than three members, and shall
hold office at the discretion of the Board. Such members may, but need not, be
Employees of the Company.

Any member of the Administrative Committee may resign by delivering his written
resignation to the Board and to the Administrative Committee Secretary. Such
resignation shall be effective no earlier than the date of the written notice.

Vacancies in the Administrative Committee arising by resignation, death,
removal, or otherwise, shall be filled by the Board.

6.2 Compensation and Expenses

The members of the Administrative Committee who are Employees shall serve
without compensation for services as a member. Any member may receive
reimbursement by the Company of expenses properly and actually incurred. All
expenses of the Administrative Committee shall be paid directly by the Company.
Such expenses may include any expenses incident to the functioning of the
Administrative Committee, including, but not limited to, fees of the Plan’s
accountants, outside counsel and other specialists and other costs of
administering the Plan.

6.3 Manner of Action

A majority of the members of the Administrative Committee at the time in office
shall constitute a quorum for the transaction of business. All resolutions
adopted, and other actions taken by the Administrative Committee at any meeting
shall be by the vote of a majority of those present at any such meeting.

Upon obtaining the written consent of a majority of the members at the time in
office, action of the Administrative Committee may be taken otherwise than at a
meeting.

6.4 Chairman, Secretary, and Employment of Specialists

The members of the Administrative Committee shall elect one of their number as
Chairman and shall elect a Secretary who may, but need not, be a member. They
may authorize one or more of their number or any agent to execute or deliver any
instrument or instruments on their behalf, and may employ such counsel,
auditors, and other specialists and such other services as they may require in
carrying out the provisions of the Plan.

6.5 Subcommittees

The Administrative Committee may appoint one or more subcommittees and delegate
such of its power and duties as it deems desirable to any such subcommittee, in
which case every reference herein made to the Administrative Committee shall be
deemed to mean or include the subcommittees as to matters within their
jurisdiction. The members of any such

17

subcommittee shall consist of such officers or other employees of the Company
and such other persons as the Administrative Committee may appoint.

6.6 Other Agents

The Administrative Committee may also appoint one or more persons or agents to
aid it in carrying out its duties as a fiduciary, and delegate such of its
powers and duties as it deems desirable to such person or agents.

6.7 Records

All resolutions, proceedings, acts, and determinations of each Committee shall
be recorded by the Secretary thereof or under his supervision, and all such
records, together with such documents and instruments as may be necessary for
the administration of the Plan, shall be preserved in the custody of the
Secretary.

6.8 Rules

Subject to the limitations contained in the Plan, the Administrative Committee
shall be empowered from time to time in its discretion to adopt by-laws and
establish rules for the conduct of its affairs and the exercise of the duties
imposed upon it under the Plan.

6.9 Powers and Duties

The Administrative Committee shall have responsibility for the general
administration of the Plan and for carrying out its provisions. The
Administrative Committee shall have such powers and duties as may be necessary
to discharge its functions hereunder, including, but not limited to, the
following:

(a)

To construe and interpret the Plan, to supply all omissions from, correct
deficiencies in and resolve ambiguities in the language of the Plan; to decide
all questions of eligibility and determine the amount, manner, and time of
payment of any benefits hereunder;

(b)

To make a determination as to the right of any person to an allocation, and the
amount thereof;

(c)

To obtain from the Employees such information as shall be necessary for the
proper administration of the Plan and, when appropriate, to furnish such
information promptly to other persons entitled thereto;

(d)

To prepare and distribute, in such manner as the Company determines to be
appropriate, information explaining the Plan; and

(e)

To establish and maintain such accounts in the name of each Participant as are
necessary.

6.10 Decisions Conclusive

The Administrative Committee shall exercise their powers hereunder in a uniform
and nondiscriminatory manner. Any and all disputes with respect to the Plan
which may arise involving Participants or their Beneficiaries shall be referred
to the Administrative

18

Committee and its decision shall be final, conclusive, and binding. Furthermore,
if any question arises as to the meaning, interpretation, or application of any
provision hereof, the decision of the Administrative Committee with respect
thereto shall be final.

6.11 Fiduciaries

The fiduciaries named in this Article shall have only those specific powers,
duties, responsibilities, and obligations as are specifically given them under
this Plan. The Company shall have the sole authority to amend or terminate, in
whole or in part, this Plan. The Administrative Committee shall be a fiduciary
under the Plan and shall have the sole responsibility for the administration of
this Plan. The officers and Employees of the Company shall have the
responsibility of implementing the Plan and carrying out its provisions as the
Administrative Committee shall direct. A fiduciary may rely upon any direction,
information, or action of another fiduciary as being proper under this Plan, and
is not required under this Plan to inquire into the propriety of any such
direction, information, or action. It is intended under this Plan that each
fiduciary shall be responsible for the proper exercise of his own powers,
duties, responsibilities, and obligations under this Plan and shall not be
responsible for any act or failure to act of another fiduciary. No fiduciary
guarantees in any manner the payment of benefits from this Plan. Any party may
serve in more than one fiduciary capacity with respect to the Plan.

6.12 Notice of Address

Each person entitled to benefits from the Plan must file with the Administrative
Committee or its agent, in writing, his mailing address and each change of his
mailing address. Any communication, statement, or notice addressed to such a
person at his latest reported mailing address will be binding upon him for all
purposes of the Plan, and neither the Administrative Committee nor the Company
shall be obliged to search for or ascertain his whereabouts.

6.13 Data

All persons entitled to benefits from the Plan must furnish to the
Administrative Committee such documents, evidence, or information, including
information concerning marital status, as the Administrative Committee considers
necessary or desirable for the purpose of administering the Plan. It shall be an
express condition of the Plan that each such person must furnish such
information and sign such documents as the Administrative Committee may require
before any benefits become payable from the Plan. The Administrative Committee
shall be entitled to distribute to a non-spouse Beneficiary in reliance upon the
signed statement of the Participant that he is unmarried without any further
liability to a spouse if such statement is false.

6.14 Adjustments

The Administrative Committee may adjust benefits under the Plan or make such
other adjustments with respect to a Participant or Beneficiary as are required
to correct administrative errors or provide uniform treatment in a manner
consistent with the intent and purposes of the Plan.

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6.15 Member’s Own Participation

No member of the Administrative Committee may act, vote or otherwise influence a
decision specifically relating to his own participation under the Plan.

6.16 Indemnification

(a)

To the extent permitted by the Company’s bylaws and applicable law, the Company
shall indemnify and hold harmless each of the following persons (“Indemnified
Persons”) under the terms and conditions of this section:

(1)

The Administrative Committee and each of its members which, for purposes of this
section, includes any Employee to whom the Administrative Committee has
delegated fiduciary or other duties.

(2)

The Board and each member of the Board of Directors of the Corporation and any
Employer who has responsibility (whether by delegation from another person, an
allocation of responsibilities under the terms of this Plan document, or
otherwise) for a fiduciary duty, a nonfiduciary settlor function (such as
deciding whether to approve a plan amendment), or a nonfiduciary administrative
task relating to the Plan.

(b)

The Company shall indemnify and hold harmless each Indemnified Person against
any and all claims, losses, damages, and expenses, including reasonable
attorney’s fees and court costs, incurred by that person on account of his or
her good faith actions or failures to act with respect to his or her
responsibilities relating to the Plan. The Company’s indemnification shall
include payment of any amounts due under a settlement of any lawsuit or
investigation, but only if the Company agrees to the settlement.

(1)

An Indemnified Person shall be indemnified under this section only if he or she
notifies an Appropriate Person at the Company of any claim asserted against or
any investigation of the Indemnified Person that relates to the Indemnified
Person’s responsibilities with respect to the Plan.

(A)

A person is an “Appropriate Person” to receive notice of the claim or
investigation if a reasonable person would believe that the person notified
would initiate action to protect the interests of the Company in response to the
Indemnified Person’s notice.

(B)

The notice may be provided orally or in writing. The notice must be provided to
the Appropriate Person promptly after the Indemnified Person becomes aware of
the claim or investigation. No indemnification shall be provided under this
section to the extent that the Company is materially prejudiced by the
unreasonable delay of the Indemnified Person in notifying an Appropriate Person
of the claim or investigation.

(2)

An Indemnified Person shall be indemnified under this section with respect to
attorney’s fees, court costs or other litigation expenses or any settlement of

20

 

such litigation only if the Indemnified Person agrees to permit the Company to
select counsel and to conduct the defense of the lawsuit.

(3)

No Indemnified Person shall be indemnified under this section with respect to
any action or failure to act that is judicially determined to constitute or be
attributable to the willful misconduct of the Indemnified Person.

(4)

Payments of any indemnity under this section shall be made only from insurance
or other assets of the Company. The provisions of this section shall not
preclude such further indemnities as may be available under insurance purchased
by the Company or as may be provided by the Company under any by-law, agreement
or otherwise, provided that no expense shall be indemnified under this section
that is otherwise indemnified by the Company or by an insurance contract
purchased by the Company.

21

Article 7. Amendment and Termination

7.1 Amendment and Termination

The Company expects the Plan to be permanent, but since future conditions
affecting the Company or any Employer cannot be anticipated or foreseen, the
Company must necessarily and does hereby reserve the right to amend, modify, or
terminate the Plan at any time by action of the Board, except that no amendment
shall reduce the dollar amount permanently credited to a Participant’s account
and any such termination or amendment shall apply uniformly to all Participants.
The Administrative Committee, in its discretion, may amend the Plan if it finds
that such amendment does not significantly increase or decrease benefits or
costs. Notwithstanding the foregoing, the Board or the Administrative Committee
may amend the Plan to:

(a)

Ensure that this Plan complies with the requirements of Code section 409A for
deferral of taxation on compensation deferred hereunder until the time of
distribution; and

(b)

Add provisions for changes to elections as to time and manner of distributions
and other changes that comply with the requirements of Code section 409A for the
deferral of taxation on deferred compensation until the time of distribution.

7.2 Reorganization of Employer

In the event of a merger or consolidation of the Employer, or the transfer of
substantially all of the assets of the Employer to another corporation, such
continuing, resulting or transferee corporation shall have the right to continue
and carry on the Plan and to assume all liabilities of the Employer hereunder
without obtaining the consent of any Participant or Beneficiary. If such
successor shall assume the liabilities of the Employer hereunder, then the
Employer shall be relieved of all such liability, and no Participant or
Beneficiary shall have the right to assert any claim against the Employer for
benefits under or in connection with the Plan.

7.3 Protected Benefits

If the Plan is terminated or amended so as to prevent further earnings
adjustments, or if liabilities accrued hereunder up to the date of an event
specified in section 7.2 are not assumed by the successor to the Employer, then
the dollar amount in the account of each Participant or Beneficiary (whether or
not vested) shall be paid in cash to such Participant or Beneficiary in a single
sum on the last day of the second month following the month in which the
amendment or termination occurs.

22

Article 8. Claims and Appeals Procedures

8.1 Application for Benefits

All applications for benefits under the Plan shall be submitted to: Occidental
Petroleum Corporation, Attention: Administrative Committee, 10889 Wilshire
Blvd., Los Angeles, CA 90024. Applications for benefits must be in writing on
the forms prescribed by the Administrative Committee and must be signed by the
Participant, Beneficiary, spouse, Alternate Payee, or other person claiming
benefits under this Plan (each of which may be “Claimant”).

8.2 Claims Procedure for Benefits

(a)

If a Claimant believes he is entitled to a benefit, or a benefit different from
the one received, then the Claimant may file a claim for the benefit by writing
a letter to the Administrative Committee or its authorized delegate.

(b)

Within a reasonable period of time, but not later than 90 days after receipt of
a claim for benefits, the Administrative 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 Administrative 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
Administrative Committee or its delegate expects to render a determination on
the claim.

(c)

In the case of an adverse benefit determination, the Administrative 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:

(1)

The specific reason or reasons for the adverse benefit determination;

(2)

Reference to the specific Plan provisions on which the adverse benefit
determination is based;

(3)

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

(4)

A description of the Plan’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 8.3.

(d)

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 Administrative Committee, may request that the
Administrative

23

 

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
Administrative 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.

(e)

Within a reasonable period of time, but not later than 60 days after receipt of
such request for review, the Administrative 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 60 days from the end of the initial
60-day period. If an extension is necessary, the Administrative 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
Administrative 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 Administrative 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:

(1)

The specific reason or reasons for the adverse final benefit determination;

(2)

Reference to the specific Plan provisions on which the adverse final benefit
determination is based;

(3)

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

(4)

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 8.3.

8.3 Limitations on Actions

All decisions made under the procedure set out in this Article shall be final
and there shall be no further right of appeal. No person may initiate a lawsuit
before fully exhausting the claims procedures set out in this Article, including
appeal. To provide for an expeditious resolution of any dispute concerning a
claim for benefits that has been denied and to ensure that all evidence
pertinent to such claim is available, no lawsuit may be brought contesting a
denial of benefits more than the later of:

(a)

180 days after receiving the written response of the Administrative Committee to
an appeal; or

24

(b)

365 days after an applicant’s original application for benefits.

25

Article 9. General Provisions

9.1 Unsecured General Creditor

The rights of a Participant, Beneficiary, Alternate Payee or their heirs,
successors, and assigns, as relates to any Company or Employer promises
hereunder, shall not be secured by any specific assets of the Company or any
Employer, nor shall any assets of the Company or any Employer be designated as
attributable or allocated to the satisfaction of such promises.

9.2 Trust Fund

The Company shall be responsible for the payment of all benefits provided under
the Plan. At its discretion, the Company may establish one or more trusts, with
such trustees as the Board or Administrative Committee may approve, for the
purpose of providing for the payment of such benefits. Such trust or trusts may
be irrevocable, but the assets thereof shall be subject to the claims of the
Company’s creditors. To the extent any benefits provided under the Plan are
actually paid from any such trust, the Company shall have no further obligation
with respect thereto, but to the extent not so paid, such benefits shall remain
the obligation of, and shall be paid by, the Company.

9.3 Nonassignability

(a)

Neither a Participant nor any other person shall have any right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
hypothecate or convey in advance of actual receipt the amount, if any, payable
hereunder, or any part thereof, or interest therein which are, and all rights to
which are, expressly declared to be unassignable and non-transferable. No part
of the amounts payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by
operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency.

(b)

Notwithstanding subsection (a), the right to benefits payable with respect to a
Participant pursuant to a Qualified Divorce Order may be created, assigned, or
recognized. The Administrative Committee shall establish appropriate policies
and procedures to determine whether a Divorce Order presented to the
Administrative Committee constitutes a qualified Divorce Order under this Plan,
and to administer distributions pursuant to the terms of Qualified Divorce
Orders. In the event that a Qualified Divorce Order exists with respect to
benefits payable under the Plan, such benefits otherwise payable to the
Participant specified in the Qualified Divorce Order shall be payable to the
Alternate Payee specified in such Qualified Divorce Order.

9.4 Release from Liability to Participant

A Participant’s right to receive benefits under the Plan shall be reduced to the
extent that any portion of account maintained for the Participant has been paid
or set aside for payment to an Alternate Payee pursuant to a Qualified Divorce
Order or to the extent that the Company or the Plan is otherwise subject to a
binding judgment, decree, or order for the attachment, garnishment or execution
of any portion of the account maintained for the Participant or of

26

any distributions therefrom. The Participant shall be deemed to have released
the Company and the Plan from any claim with respect to such amounts in any case
in which:

(a)

The Company, the Plan, or any Plan representative has been served with legal
process or otherwise joined in a proceeding relating to such amounts; and

(b)

The Participant fails to obtain an order of the court in the proceeding
relieving the Company and the Plan from the obligation to comply with the
judgment, decree or order.

9.5 Employment Not Guaranteed

Nothing contained in this Plan nor any action taken hereunder shall be construed
as a contract of employment or as giving any Participant any right to be
retained in employment with the Company or any Employer. Accordingly, subject to
the terms of any written employment agreement to the contrary, the Company and
Employer shall have the right to terminate or change the terms of employment of
a Participant at any time and for any reason whatsoever, with or without cause.

9.6 Gender, Singular & Plural

All pronouns and any variations thereof shall be deemed to refer to the
masculine or feminine as the identity of the person or persons may require. As
the context may require, the singular may be read as the plural and the plural
as the singular.

9.7 Captions

The captions of the articles, sections, and paragraphs of the Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.

9.8 Validity

In the event any provision of this Plan is held invalid, void, or unenforceable,
the same shall not affect, in any respect whatsoever, the validity of any other
provision of this Plan.

9.9 Notice

Any notice or filing required or permitted to be given to the Administrative
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the principal office of the Company.
Such notice shall be deemed given as to the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

9.10 Applicable Law

The Plan shall be governed by and construed in accordance with Code section 409A
(or other applicable section), and any regulations promulgated thereunder, and
the laws of the State of California to the extent such laws are not preempted by
ERISA.

27