EXHIBIT 10.63

OCCIDENTAL PETROLEUM CORPORATION

2005 LONG-TERM INCENTIVE PLAN

PERFORMANCE-BASED STOCK AWARD TERMS AND CONDITIONS

(deferred issuance of shares)

 

 

DATE OF GRANT:

January 1, 2006

TARGET PERFORMANCE SHARES:

See “Shares Granted/Awarded”

(Grant Acknowledgment screen)

PERFORMANCE PERIOD:

January 1, 2006 through December 31, 2009

 

 

These 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
Grantee.

 

1.       GRANT OF TARGET PERFORMANCE SHARES. 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 right to receive in Common
Shares and cash up to 200% of the number/value of Target Performance Shares. For
the purposes of these Terms and Conditions, “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.       RESTRICTIONS ON TRANSFER. Neither these Terms and Conditions nor any
right to receive Common Shares or 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 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.       PERFORMANCE GOALS. 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 of December 2005 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 of 2009. In addition to the Company, the peer companies
are: Amerada Hess Corporation, Anadarko Petroleum Corporation, Apache
Corporation, Chevron Corporation, ConocoPhillips, Devon Energy Corporation,
Exxon Mobil Corporation and Kerr-McGee Corporation. 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 these Terms and Conditions 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.       VESTING AND FORFEITURE OF TARGET PERFORMANCE SHARES. (a) The Grantee
must remain in the continuous employ of the Company through the last day of the
Performance

 

ex1063-200510k.htm

 

 

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.

 

(b)     The Grantee's right to receive payment of this award in an amount not to
exceed 200% 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)     For the purposes of Section 4(b), if prior to the end of the Performance
Period, the Grantee transfers his employment among the Company and its
affiliates, the amount of the award attained by the Grantee shall be determined
by assessing the level of achievement of the Performance Goals certified by the
Administrator for each employing entity and multiplying the number of Target
Performance Shares attainable at such level by a fraction equal to the number of
months in the Performance Period that the Grantee worked for the entity divided
by the total number of months in the Performance Period.

 

(d)     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 Common
Shares equal to the number of Target Performance Shares (as adjusted for any
Forfeiture Event pursuant to Section 4(a)) will become nonforfeitable. The right
to receive cash in excess of the number of Target Performance Shares (as
adjusted for any Forfeiture Event pursuant to Section 4(a)) will be forfeited.

 

5.       PAYMENT OF AWARDS; ELECTIVE DEFERRAL. Up to and including 100% of the
Target Performance Shares as adjusted pursuant to Sections 4 and 7 of these
Terms and Conditions will be settled in Common Shares and the amount, if any,
above 100% of the Target Performance Shares as so adjusted will be settled 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 and will
be paid as promptly as possible after such date. The Common Shares covered by
these Terms and Conditions 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. Notwithstanding the foregoing, the Grantee may elect pursuant
to the Occidental Petroleum Corporation 2005 Deferred Stock Program and the
Occidental Petroleum Corporation 2005 Deferred Compensation Plan to defer
receipt of any Common Shares and cash to which Grantee may be entitled following
certification of the attainment of the Performance Goals.

 

6.       CREDITING AND PAYMENT OF DIVIDEND EQUIVALENTS. 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 during the period beginning on the Date
of Grant and ending with respect to any portion of the Target

 

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Performance Shares 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.

 

7.       ADJUSTMENTS. (a)    The number or kind of shares of stock covered by
these Terms and Conditions may be adjusted as the Administrator determines
pursuant to Section 6.2 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 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 4.2.3 of the Plan.

 

8.       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.

 

9.       TAXES AND WITHHOLDING. The Grantee is responsible for any federal,
state, local or foreign tax, including income tax, social insurance, payroll
tax, payment on account or other tax-related withholding with respect to the
grant of Target Performance Shares (including the grant, the vesting, the
receipt of Common Shares or cash, the sale of Common Shares and the receipt of
dividends or dividend equivalents, if any). If the Company must withhold any tax
in connection with the issuance of any Common Shares or the payment of cash or
any other consideration pursuant to the grant of Target Performance Shares
(other than the payment of Dividend Equivalents), the Grantee shall satisfy all
or any part of any such withholding obligation first from any cash amount
payable under these Terms and Conditions and, second by surrendering to the
Company a portion of the Common Shares that are issued or transferred to the
Grantee pursuant to these Terms and Conditions. Any Common Shares so surrendered
by the Grantee shall be credited against the Grantee’s withholding obligation at
their Certification Date Value. If the Company must withhold any tax in
connection with granting or vesting of Target Performance Shares (including
those for which receipt of the payout is deferred under a company-sponsored
deferral program for cash or stock) or the payment of Dividend Equivalents
pursuant to this grant of Target Performance Shares, the Grantee by
acknowledging these Terms and Conditions agrees that, so long as the Grantee is
an employee of the Company for tax purposes, all or any part of any such
withholding obligation shall be deducted from the Grantee’s wages or other cash
compensation (including regular pay). The Grantee shall pay to the Company any
amount that cannot be satisfied by the means previously described.

 

10.     COMPLIANCE WITH LAW. The Company will make reasonable efforts to comply
with all applicable federal, state and foreign securities laws; however, the
Company will not issue any Common Shares or other securities pursuant to these
Terms and Conditions if their issuance would result in a violation of any such
law.

 

11.     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

 

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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, the Target
Performance Shares are 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. This grant of Target Performance Shares does not create any
contractual or other right to receive future grants of Target Performance
Shares, or benefits in lieu of Target Performance Shares, even if Grantee has a
history of receiving Target Performance Shares or other stock awards.

 

12.     AMENDMENTS. The Plan may be modified, amended, suspended or terminated
by the Company 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.

 

13.     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.

 

14.     RELATION TO PLAN; INTERPRETATION. 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
definition have the meanings assigned to them in the Plan. References to
Sections are to Sections of these Terms and Conditions unless otherwise noted.

 

15.     SUCCESSORS AND ASSIGNS. Subject to Sections 2 and 4, 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.

 

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

 

17.       PRIVACY RIGHTS. By accepting this 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 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
Occidental, details of this Target Performance Share award or any other
entitlement to 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

 

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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
Administrator in writing. Refusing or withdrawing consent may affect the
Grantee’s ability to participate in the Plan.

 

18.     ELECTRONIC DELIVERY. The Company may, in its sole discretion, decide to
deliver any documents related to this Target Performance Share 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.

 

19.     GRANTEE’S REPRESENTATIONS AND RELEASES. By accepting this award, the
Grantee acknowledges that the Grantee has read these Terms and Conditions and
understands that (i) the grant of this Target Performance Share award is made
voluntarily by 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 Target Performance Share award is granted; (ii) the
Grantee’s participation in the Plan is voluntary; (iii) the future value of any
Common shares issued pursuant to this Target Performance Share award cannot be
predicted and Occidental does not assume liability in the event such Common
Shares have no value in the future; and, (iv) 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.

 

In consideration of the grant of this Target Performance Share award, no claim
or entitlement to compensation or damages shall arise from termination of this
Target Performance Share award or diminution in value of this Target Performance
Share award or Common Shares issued pursuant to this Target Performance Share
award resulting from termination of the Grantee’s employment by the Company (for
any reason whatsoever and whether or not in breach of local labor laws) and 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 these Terms and Conditions, the
Grantee shall be deemed irrevocably to have waived his or her entitlement to
pursue such claim.

 

 

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EXHIBIT 1

2005 Long-Term Incentive Plan

 

2006 Grant to OPC Participants

 

Performance up to and at target pays in shares; performance over target pays in
cash

 

(% of Number of Target Shares of Performance Stock that become Nonforfeitable
based on Comparison of Total Shareholder Return for the Peer Companies for the
Performance Period)

 

Ranking

9 Cos.

8 Cos.

7 Cos.

6 Cos.

5 Cos.

4 Cos.

3 Cos.

2 Cos.

1 Co.

1

200%

200%

200%

200%

200%

200%

200%

*

*

2

175%

167%

167%

150%

150%

133%

100%

*

 

3

150%

133%

133%

100%

100%

67%

0%

 

 

4

125%

100%

100%

100%

50%

0%

 

 

 

5

100%

100%

67%

50%

0%

 

 

 

 

6

75%

67%

33%

0%

 

 

 

 

 

7

50%

33%

0%

 

 

 

 

 

 

8

25%

0%

 

 

 

 

 

 

 

9

0%

 

 

 

 

 

 

 

 

 

 

*Committee discretion

 

 

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