Document:

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         1995 INCENTIVE STOCK PLAN, AS AMENDED THROUGH FEBRUARY 9, 2000

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     1.   PURPOSE. The purpose of this Occidental Petroleum Corporation 1995
Incentive Stock Plan is to permit Occidental Petroleum Corporation
("Occidental") and its subsidiaries to attract and retain top-quality employees
and to provide such employees with an incentive to enhance stockholder return.
Additionally, it is intended that by providing more compensation that is
stock-based, the Plan will encourage employees to view Occidental from the
perspective of its stockholders.

     2.   COMMON STOCK AUTHORIZED UNDER THE PLAN.

          (a)  Subject to adjustment as provided in Section 9 the number of
shares of Common Stock issued or transferred under this Plan shall not in the
aggregate exceed 25,000,000 shares, which may be Common Stock of original
issuance or Common Stock held in treasury or a combination thereof. For the
purposes of this Section 2(a):

               (i)   Upon payment in cash of the benefit provided by any Award,
any shares of Common Stock that were covered by that Award shall again be
available for issuance or transfer under this Plan.

               (ii)  Upon the full or partial payment of any Option Price by the
transfer to the Company of shares of Common Stock or upon satisfaction of tax
withholding obligations in connection with any such exercise or any other
payment made or benefit realized under this Plan by the transfer or
relinquishment of Common Stock, there shall be deemed to have been issued or
transferred under this Plan only the number of shares of Common Stock actually
issued or transferred by Occidental less the number of Common Stock so
transferred or relinquished.

          (b)  Notwithstanding anything in Section 2(a) or elsewhere in this
Plan to the contrary, the number of shares of Common Stock issued or transferred
as Restricted Stock and Performance Stock that become nonforfeitable without the
achievement of Performance Objectives shall not in the aggregate exceed
5,000,000 shares, subject to adjustment as provided in Section 9.

          (c)  Notwithstanding anything in Section 2(a) or elsewhere in this
Plan to the contrary, the aggregate number of shares of Common Stock which may
be issued by the Company upon the exercise of Incentive Stock Options shall not
exceed 25,000,000 shares of Common Stock, subject to adjustment as provided in
Section 9.

          (d)  Subject to adjustment as provided in Section 9, no Participant
shall be granted Stock Options, SARs, Restricted Stock, Performance Stock and
any other Award paid in Common Stock, in the aggregate, for more than 5,000,000
shares.

     3.   AWARDS. The Committee shall determine the type of Award(s) to be made
to a Participant. Awards may be granted singly, in combination or in tandem.
Awards also may be made in combination or in tandem with, in replacement of or
as alternatives to or as the payment form for grants or rights under any other
compensation plan or individual contract or agreement with the Company. The
types of Awards that may be granted are set forth in Sections 4, 5, 6 and 7.
Each Award shall be evidenced by a written agreement signed by the Company and
the Participant. The following terms and conditions shall apply to all Awards:

          (a)  An Award may provide for the payment to the Participant of
dividends or dividend equivalents, in cash or Common Stock on a current,
deferred or contingent basis.

          (b)  Any Award may provide for earlier exercise, vesting or
termination in the event of a Change of Control.

          (c)  Successive Awards may be made to the same Participant regardless
of whether any outstanding Award remains unexercised or subject to the
expiration of restrictions or the satisfaction of Performance Objectives.
<PAGE>

     4.   STOCK OPTIONS. The Committee may from time to time authorize grants to
Participants of options to purchase Common Stock upon such terms and conditions
as the Committee may determine in accordance with the following provisions:

          (a)  Each grant shall specify the number of shares of Common Stock to
which it pertains.

          (b)  Each grant shall specify an Option Price, which may be either
fixed or based on an index, but which, in any case, shall be not less than the
Fair Market Value per Share on the Date of Grant.

          (c)  Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price, which may include (i) cash in the form of
currency or check or other cash equivalent acceptable to the Company, (ii)
unrestricted Common Stock already owned by the Optionee, (iii) any other legal
consideration that the Committee may deem appropriate on such basis as the
Committee may determine in accordance with this Plan and (iv) any combination of
the foregoing or (v) the delivering of an exercise notice together with a copy
of irrevocable instructions to a broker to promptly deliver to the company the
amount of sale or loan proceeds from the Common Stock underlying the stock
option.

          (d)  Each grant shall specify the period or periods of continuous
employment of the Optionee by the Company that are necessary before the Stock
Options or installments thereof become exercisable.

          (e)  Stock Options granted pursuant to this Section 4 may be
Nonqualified Options or Tax-qualified Options or combinations thereof.

          (f)  Any grant of Stock Options may specify Performance Objectives
that, if achieved, will result in exercisability or early exercisability of such
Stock Option.

          (g)  No Stock Option granted pursuant to this Section 4 may be
exercised more than 10 years from the Date of Grant.

     5.   STOCK APPRECIATION RIGHTS ("SARS"). The Committee may also authorize
grants to Participants of SARs. A SAR shall be a right of the Participant to
receive from the Company an amount, which shall be determined by the Committee
and shall be expressed as a percentage (not exceeding 100 percent) of the Spread
at the time of the exercise of a SAR. Any grant of SARs shall be upon such terms
and conditions as the Committee may determine in accordance with the following
provisions:

          (a)  Any grant may specify that the amount payable upon the exercise
of a SAR may be paid by the Company in cash, Common Stock or any combination
thereof and may (i) either grant to the Participant or reserve to the Committee
the right to elect among those alternatives or (ii) preclude the right of the
Participant to receive and the Company to issue Common Stock or other equity
securities in lieu of cash.

          (b)  Any grant may specify that the amount payable upon the exercise
of a SAR shall not exceed a maximum specified by the Committee on the Date of
Grant.

          (c)  Any grant may specify (i) a waiting period or periods before SARs
shall become exercisable and (ii) permissible dates or periods on or during
which SARs shall be exercisable.

          (d)  Any grant of SARs may specify Performance Objectives that, if
achieved, will result in exercisability or early exercisability of such SARs.

          (e)  Any SAR may be granted in tandem with a Stock Option. Each tandem
grant shall provide that a SAR may be exercised only (i) if the related Stock
Option is exercisable and (ii) by surrender of the related Stock Option for
cancellation.

          (f)  Regarding freestanding SARs only:

               (i)   Each grant shall specify in respect of each freestanding
SAR a Base Price, which shall be not less than the Fair Market Value per Share
on the Date of Grant.
<PAGE>

               (ii)  Each grant shall specify the period or periods of
continuous employment of the Participant by the Company that are necessary
before the freestanding SAR or installments thereof shall become exercisable.

               (iii) No freestanding SAR granted may be exercised more than 10
years from the Date of Grant.

     6.   RESTRICTED STOCK. The Committee may also authorize grants or sales to
Participants of Restricted Stock upon such terms and conditions as the Committee
may determine in accordance with the following provisions:

          (a)  Each grant or sale shall specify the number of shares of
Restricted Stock to which it relates.

          (b)  Each grant or sale may be made without additional consideration
from the Participant or in consideration of a payment by the Participant that is
less than the Fair Market Value per Share on the Date of Grant.

          (c)  Each grant or sale shall provide that the Restricted Stock
covered thereby shall be subject to a "substantial risk of forfeiture" within
the meaning of Section 83 of the Code for a period of at least three years as
determined by the Committee.

          (d)  Each grant or sale shall provide that, during the Restricted
Period, the transferability of the Restricted Stock shall be prohibited or
restricted in the manner and to the extent prescribed by the Committee.

          (e)  For grants or sales for which forfeitable shares of Common Stock
are issued at the time of grant or sale:

               (i)   Each such grant or sale shall constitute a transfer of
ownership of Restricted Stock to the Participant in consideration of the
performance of services, entitling such Participant to dividend, voting and
other ownership rights, subject to the substantial risk of forfeiture and
restrictions on transfer provided above in Section 6(c).

               (ii)  Unless otherwise directed by the Committee, all
certificates representing Restricted Stock, together with a stock power endorsed
in blank by the Participant, shall be held in custody by the Company until all
restrictions on such Stock lapse.

          (f)  For grants for which forfeitable shares of Common Stock are not
issued at the time of grant, each grant shall specify the time and manner of
payment of Restricted Stock that shall have ceased to be forfeitable, and any
grant may specify that any such amount may be paid by the Company in cash,
Common Stock or any combination thereof and may either grant to the Participant
or reserve to the Committee the right to elect among those alternatives.

     7.   PERFORMANCE STOCK. The Committee may also authorize grants of
Performance Stock, which shall become either nonforfeitable or payable to the
Participant upon the achievement of specified Performance Objectives, upon such
terms and conditions as the Committee may determine in accordance with the
following provisions:

          (a)  Each grant shall specify the number of shares of Performance
Stock to which it pertains, which may be subject to adjustment to reflect
changes in compensation or other factors.

          (b)  The Performance Period with respect to each grant of Performance
Stock shall be determined by the Committee.

          (c)  Each grant shall specify the Performance Objectives that are to
be achieved and a minimum acceptable level of achievement below which no payment
will be made or grant of Performance Stock shall be nonforfeitable and shall set
forth a formula for determining the amount of any payment to be made or amount
of Performance Stock to be nonforfeitable if performance is at or above the
minimum acceptable level but falls short of full achievement of the Performance
Objectives.
<PAGE>

          (d)  For grants for which forfeitable shares of Common Stock are not
issued at the time of grant, each grant shall specify the time and manner of
payment of Performance Stock that shall have been earned, and any grant may
specify that any such amount may be paid by the Company in cash, Common Stock or
any combination thereof and may either grant to the Participant or reserve to
the Committee the right to elect among those alternatives.

          (e)  Any grant of Performance Stock may specify that the amount
payable with respect thereto may not exceed a maximum specified by the Committee
on the Date of Grant.

     8.   TRANSFERABILITY.

          (a)  Any Award may provide that all or any part of the Common Stock
that is to be issued or transferred by Occidental upon the exercise of Stock
Options or SARs or in payment of Performance Stock or that, in the case of
Restricted Stock or Performance Stock, is no longer subject to substantial risk
of forfeiture and restrictions on transfer shall be subject to further
restrictions upon transfer.

          (b)  No Stock Option or other derivative security (as that term is
used in Rule 16b-3) granted under this Plan may be transferred by a Participant
except by will or the laws of descent and distribution. Notwithstanding the
foregoing, the Committee, at its sole discretion, may provide for the
transferability of particular Awards under the Plan.

     9.   ADJUSTMENTS.

          (a)  The Committee may make or provide for such adjustments in the
number of shares of Common Stock covered by outstanding Stock Options, SARs and
Performance Stock granted under this Plan, the Option Prices or Base Prices
applicable to any such Stock Options and SARs and the kind of shares (including
shares of another issuer) covered thereby, as the Committee may in good faith
determine to be required in order to prevent dilution or expansion of the rights
of Participants that otherwise would result from (i) any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Company or (ii) any merger, consolidation, spin-off, spin-out,
split-off, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of warrants or other rights to purchase
securities or any other corporate transaction or event having an effect similar
to any of the foregoing. In the event of any such transaction or event, the
Committee may provide in substitution for any or all outstanding Awards under
this Plan such alternative consideration as it may in good faith determine to be
appropriate under the circumstances and may require the surrender of all Awards
so replaced. Moreover, the Committee may on or after the Date of Grant provide
in the agreement evidencing any Award that the holder of the Award may elect to
receive an equivalent Award in respect of securities of the surviving entity of
any merger, consolidation or other transaction or event having a similar effect,
or the Committee may provide that the holder will automatically be entitled to
receive such an equivalent Award. The Committee may also make or provide for
such adjustments in the maximum number of shares of Common Stock specified in
Sections 2(a), 2(b), 2(c) and 2(d) as the Committee may in good faith determine
to be appropriate in order to reflect any transaction or event described in this
Section 9. Notwithstanding anything in the foregoing to the contrary, with
respect to any outstanding Stock Option that was intended to qualify as a
Tax-qualified Option, the Committee shall not, without the consent of the
affected Participant, make any adjustment that would prevent such Stock Option
from so qualifying.

          (b)  If another corporation is merged into the Company or the Company
otherwise acquires another corporation, the Committee may elect to assume under
this Plan any or all outstanding stock options or other awards granted by such
corporation under any stock option or other plan adopted by it prior to such
acquisition. Such assumptions shall be on such terms and conditions as the
Committee may determine; provided, however, that the awards as so assumed do not
contain any terms, conditions or rights that are inconsistent with the terms of
this Plan. Unless otherwise determined by the Committee, such awards shall not
be taken into account for purposes of the limitations contained in Section 2 of
this Plan.

     10.  FRACTIONAL SHARES. The Company shall not be required to issue any
fractional shares of Common Stock pursuant to this Plan. The Committee may
provide for the elimination of fractions or for the settlement thereof in cash.
<PAGE>

     11.  WITHHOLDING TAXES. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, it
shall be a condition to the receipt of any such payment or the realization of
any such benefit that the Participant or such other person make arrangements
satisfactory to the Company for payment of any taxes required to be withheld. At
the discretion of the Committee, any such arrangements may without limitation
include relinquishment of a portion of any such payment or benefit or the
surrender of outstanding Common Stock, and any agreement pertaining to an Award
may make such relinquishment the mandatory form of satisfying such taxes. The
Committee may also make similar arrangements with respect to the payment of any
taxes with respect to which withholding is not required.

     12.  TERMINATION OF EMPLOYMENT, HARDSHIP AND APPROVED LEAVES OF ABSENCE.
Notwithstanding any other provision of this Plan to the contrary, in the event
of termination of employment for any reason, leave of absence approved by the
Company, or in the event of hardship or other special circumstances, of a
Participant who holds a Stock Option or SAR that is not immediately and fully
exercisable, any Restricted Stock as to which the substantial risks of
forfeiture or the prohibition or restriction on transfer has not lapsed, any
Performance Stock that has not been fully earned or is subject to forfeiture or
any Common Stock that is subject to any transfer restriction pursuant to Section
8(a) of this Plan, the Committee may take any action that it deems to be
appropriate under the circumstances or in the best interests of the Company,
including without limitation waiving or modifying any limitation or requirement
with respect to any Award.

     13.  FOREIGN PARTICIPANTS. In order to facilitate the making of an Award,
the Committee may provide for such special terms for Awards to Participants who
are foreign nationals, or who are employed by the Company outside of the United
States of America, as the Committee may consider necessary or appropriate to
accommodate differences in local law, tax policy or custom. Moreover, the
Committee may approve such supplements to, or amendments, restatements or
alternative versions of, this Plan as it may consider necessary or appropriate
for such purposes without thereby affecting the terms of this Plan as in effect
for any other purpose, and the Secretary or other appropriate officer of
Occidental may certify any such document as having been approved and adopted in
the same manner as this Plan; provided, however, that no such supplements,
amendments, restatements or alternative versions shall include any provisions
that are inconsistent with the terms of this Plan, as then in effect, unless
this Plan could have been amended to eliminate the inconsistency without further
approval by the stockholders of Occidental.

     14.  ADMINISTRATION OF THE PLAN.

          (a)  This Plan shall be administered by the Compensation Committee of
the Board, which shall be composed of not less than two members of the Board,
each of whom shall be a "disinterested person" within the meaning of Rule 16b-3
and an "outside director" within the meaning of Section 162(m) of the Code.

          (b)  The interpretation and construction by the Committee of any
provision of this Plan or any agreement, notification or document evidencing the
grant of Stock Option, SARs, Restricted Stock or Performance Stock, and any
determination by the Committee pursuant to any provision of this Plan or any
such agreement, notification or document, shall be final and conclusive. No
member of the Committee shall be liable for any such action taken or
determination made in good faith.

     15.  AMENDMENTS AND OTHER MATTERS.

          (a)  The Committee may amend, alter or discontinue this Plan, but no
amendment, alteration or discontinuation shall be made that would impair the
rights of a Participant under any outstanding Award without such Participant's
consent, or that without the approval of the stockholders of Occidental (as
described below) would (i) except as provided in Section 9, increase the total
number of shares of Common Stock reserved for the purpose of the Plan; (ii)
extend the maximum period provided in Section 4(g) for exercising Stock Options;
or (iii) extend the maximum period provided in Section 5(f)(iii) for SARs.
Notwithstanding the foregoing, stockholder approval under this Section 15 shall
be required only at such time and under such circumstances as stockholder
approval would be required under Rule 16b-3 with respect to any material
amendment to any employee benefit plan of the Company.
<PAGE>

          (b)  The Committee shall not, without the approval of the stockholders
of Occidental, authorize the amendment of any outstanding Stock Option to reduce
the Option Price or authorize the amendment of any outstanding SAR to reduce the
Base Price. Furthermore, no Stock Options or SARs shall be canceled and replaced
with Awards having a lower Option Price or Base Price without the further
approval of the stockholders of Occidental.

          (c)  The Committee may condition the grant of any Award authorized
under this Plan on the surrender or deferral by the Participant of his or her
right to receive a cash bonus or other compensation otherwise payable by the
Company to the Participant.

          (d)  This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Company and shall
not interfere in any way with any right that the Company would otherwise have to
terminate any Participant's employment or other service at any time.

          (e)  (i)   To the extent that any provision of this Plan would prevent
any Stock Option that was intended to qualify as a Tax-qualified Option from so
qualifying, any such provision shall be null and void with respect to any such
Stock Option; provided, however, that any such provision shall remain in effect
with respect to other Stock Options, and there shall be no further effect on any
provision of this Plan.

               (ii)  Any Award that may be made pursuant to an amendment to this
Plan that shall have been adopted without the approval of the stockholders of
Occidental shall be null and void as to persons subject to Section 16(a) of the
Act if it is subsequently determined that such approval was required in order
for this Plan to continue to satisfy the applicable conditions of Rule 16b-3.

          (f)  The Committee may require or permit Participants to elect to
defer the issuance of Common Stock or the settlement of Awards in cash under
such rules and procedures as it may establish under the Plan. It also may
provide that deferred settlements include the payment or crediting of interest
on the deferral amounts, or the payment or crediting of dividend equivalents
where the deferral amounts are denominated in Stock.

          (g)  Unless otherwise determined by the Committee, settlements of
Awards received by Participants under the Plan shall not be deemed a part of a
Participant's regular, recurring compensation for purposes of calculating
payments or benefits from any Company benefit plan, severance program or
severance pay law of any country. Further, the Company may adopt other
compensation programs, plans or arrangements as it deems appropriate or
necessary.

          (h)  Unless otherwise determined by the Committee, the Plan shall be
unfunded and shall not create (or be construed to create) a trust or a separate
fund or funds. The Plan shall not establish any fiduciary relationship between
the Company and any Participant or other person. To the extent any person holds
any rights by virtue of an Award granted under the Plan, such rights (unless
otherwise determined by the Committee) shall be no greater than the rights of an
unsecured general creditor of the Company.

     16.  TERM. This Plan shall be effective on the first day immediately
following the date on which the Plan is first approved by the stockholders of
Occidental and shall continue in effect for 10 years from that date.

     17.  DEFINITIONS. As used in this Plan,

          "ACT" means the Securities Exchange Act of 1934, as amended.

          "AWARD" means any grant of Stock Options, SARs or Performance Stock or
grant or sale of Restricted Stock under this Plan.

          "BASE PRICE" means the price to be used as the basis for determining
the Spread upon the exercise of a freestanding SAR.

          "BOARD" means the Board of Directors of Occidental.
<PAGE>

          "CHANGE OF CONTROL" means the occurrence of any of the following
events:

               (i)   any "person," as such term is used in Sections 13(d) and
14(d) of the Act (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any company owned,
directly or indirectly, by the stockholders of Occidental in substantially the
same proportions as their ownership of the Common Stock of Occidental), is or
becomes after the effective date of the Plan as provided in Section 16 (the
"Effective Date") the "beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of Occidental (not including in the
securities beneficially owned by such person any securities acquired directly
from Occidental or its affiliates) representing 50 percent or more of the
combined voting power of Occidental's then-outstanding securities;

               (ii)  during any period of two consecutive years (not including
any period prior to the Effective Date), individuals who at the beginning of
such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (i), (iii), or (iv) of this definition)
whose election by the Board or nomination for election by Occidental's
stockholders was approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority of the Board; or

               (iii) the stockholders of Occidental approve a merger or
consolidation of Occidental with any other corporation, other than (A) a merger
or consolidation that would result in the voting securities of Occidental
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least 50 percent of the combined voting power of the voting securities of
Occidental or such surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
acquires more than 50 percent of the combined voting power of Occidental's
then-outstanding securities; or

               (iv)  the stockholders of Occidental approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition of all or
substantially all of the Company's assets;

provided, however, that prior to the occurrence of any of the events described
in clauses (i) through (iv) above, the Board may determine that such event shall
not constitute a Change of Control for purposes of this Plan.

          "CODE" means the Internal Revenue Code of 1986, as amended from time
to time.

          "COMMITTEE" means the Committee described in Section 14(a) of this
Plan.

          "COMMON STOCK" means (i) shares of the Common Stock, $0.20 par value,
of Occidental and (ii) any security into which Common Stock may be converted by
reason of any transaction or event of the type referred to in Section 9.

          "COMPANY" means Occidental and its Subsidiaries, collectively.

          "DATE OF GRANT" means the date specified by the Committee on which an
Award shall become effective, which shall not be earlier than the date on which
the Committee takes action with respect thereto.

          "FAIR MARKET VALUE PER SHARE" means the last reported sales price of a
share of Common Stock on the New York Stock Exchange - Composite Transactions on
the relevant date or, if there are no reported sales on such date, then the last
reported sales price on the next preceding day on which such a sale is
transacted.

          "INCENTIVE STOCK OPTION" means a Stock Option that is intended to
qualify as an "incentive stock option" under Section 422 of the Code or any
successor provision thereto.
<PAGE>

          "NONQUALIFIED OPTION" means a Stock Option that is not intended to
qualify as a Tax-qualified Option.

          "OCCIDENTAL" means Occidental Petroleum Corporation, a Delaware
corporation.

          "OPTIONEE" means the person so designated in an agreement evidencing
an outstanding Stock Option.

          "OPTION PRICE" means the purchase price payable upon the exercise of a
Stock Option.

          "PARTICIPANT" means (i) a salaried employee of the Company who is
selected by the Committee to receive benefits under this Plan or (ii) a person
who has agreed to commence salaried employment with the Company.

          "PERFORMANCE OBJECTIVES" means performance objectives adopted by the
Committee pursuant to this Plan for Participants who have received grants of
Performance Stock or, when so determined by the Committee, Stock Options, SARs
or Restricted Stock. With respect to any Award to a Participant who is, or is
determined by the Committee to be likely to become, a "covered employee" within
the meaning of Section 162(m) of the Code (or any successor provision), the
Performance Objectives shall be limited to specified levels of growth in or peer
company comparisons based on (i) Total Stockholder Return, (ii) return on assets
or (iii) book value per share, as the Committee may determine, and the
attainment of such Performance Objective shall not be deemed to have occurred
until certified by the Committee. If the Committee determines that a change in
the business, operations, corporate structure or capital structure of the
Company, or the manner in which it conducts its business, or other events or
circumstances render the Performance Objectives to be unsuitable, the Committee
may modify such Performance Objectives or the related minimum acceptable level
of achievement, in whole or in part, as the Committee deems appropriate, except
in the case of a covered employee where such action would, in the opinion of
counsel to the Company, result in the loss of the otherwise available exemption
of the Award under Section 162(m) of the Internal Revenue Code.

          "PERFORMANCE PERIOD" means, in respect of Performance Stock, the
period of time within which the Performance Objectives are to be achieved, which
period shall not be less than three years.

          "PERFORMANCE STOCK" means (i) a grant pursuant to Section 7 of shares
of Common Stock, which shares are subject to forfeiture in the event the
Performance Objectives are not achieved, or (ii) a bookkeeping entry that
records the equivalent of one share of Common Stock awarded pursuant to Section
7 that is payable upon achievement of the Performance Objectives.

          "PLAN" means this Occidental Petroleum Corporation 1995 Incentive
Stock Plan.

          "RESTRICTED PERIOD" means, in respect of Restricted Stock, the period
determined by the Committee pursuant to Section 6(c).

          "RESTRICTED STOCK" means (i) a grant pursuant to Section 6 of shares
of Common Stock, which shares are subject to a substantial risk of forfeiture
and restrictions on transfer, or (ii) a bookkeeping entry that records the
equivalent of one share of Common Stock awarded pursuant to Section 6 that is
payable upon expiration of the Restricted Period.

          "RULE 16B-3" means Rule 16b-3, as promulgated and amended from time to
time by the Securities and Exchange Commission under the Securities Exchange Act
of 1934, or any successor rule to the same effect.

          "SAR" means a stock appreciation right granted pursuant to Section 5.

          "SPREAD" means, in the case of a freestanding SAR, the amount by which
the Fair Market Value per Share on the date when the SAR is exercised exceeds
the Base Price specified therein or, in the case of a tandem SAR, the amount by
which the Fair Market Value per Share on the date when the SAR is exercised
exceeds the Option Price for the related Stock Option.

          "STOCK OPTION" means a Nonqualified Option or a Tax-qualified Option,
or both, as the case may be.
<PAGE>

          "SUBSIDIARY" means a corporation, partnership, joint venture,
unincorporated association or other entity directly or indirectly controlled by
the Company or in which the Company has a direct or indirect ownership or other
equity interest; provided, however, for purposes of determining whether any
person may be a Participant for purposes of any grant of Incentive Stock
Options, "Subsidiary" means any corporation in which the Company owns or
controls directly or indirectly more than 50 percent of the total combined
voting power represented by all classes of stock issued by such corporation at
the time of the grant.

          "TAX-QUALIFIED OPTION" means a Stock Option that is intended to
qualify under particular provisions of the Code, including without limitation an
Incentive Stock Option.

          "TOTAL STOCKHOLDER RETURN" means the appreciation in the price of a
share of Common Stock plus reinvested dividends over a specified period of time.

     18.  GOVERNING LAW AND CONSTRUCTION.

          (a)  The validity, construction and effect of the Plan and any actions
taken or relating to the Plan shall be determined in accordance with the laws of
the State of Delaware and applicable federal law.

          (b)  All references to Sections in this Plan are to the Sections of
the Plan. The singular includes the plural and the plural the singular.<PAGE>   1

[LOGO] OCCIDENTAL PETROLEUM CORPORATION            10889 WILSHIRE BOULEVARD
                                                   LOS ANGELES, CALIFORNIA 90024
         RICHARD W. HALLOCK                        TELEPHONE (310) 208-8800
      EXECUTIVE VICE PRESIDENT                     FACSIMILE (310) 443-6690
          HUMAN RESOURCES

July 22, 1999

[Optionee]
[Address]

RE: PERFORMANCE STOCK OPTION AGREEMENT, DATED JULY 2, 1997

Dear [Optionee]

On July 14, 1999, the Compensation Committee of the Board of Occidental
Petroleum Corporation, as the administrator of the 1995 Incentive Stock Option
Plan, as amended, approved the amendment of the subject award to improve the
vesting schedule and to conform the provisions with respect to termination of
the Agreement and the Option to the provisions in more recent awards. As a
result, paragraphs 3 and 6 of your Performance Stock Option Agreement are
deleted in their entirety and the paragraphs on Exhibit A to this letter are
substituted in their place.

Please acknowledge your receipt of this amendment by signing the duplicate copy
of this letter in the space provided and returning it in the enclosed envelope
to Elizabeth Bellamy.

Sincerely,

/s/ R. W. Hallock

R. W. Hallock

RWH:hpa
Attachment

RECEIPT ACKNOWLEDGED:

-------------------------
Date:
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<PAGE>
                                                                       EXHIBIT A

                 AMENDED PARAGRAPHS TO PERFORMANCE STOCK OPTION
                          AGREEMENT, DATED JULY 2, 1997

AMENDED PARAGRAPH 3:

          "3. RIGHT TO EXERCISE. Subject to the expiration or earlier
     termination of the Option, the Optionee shall become fully vested in and
     entitled to exercise the entire Option on the earlier of (i) the fifth
     anniversary Date of the Grant or (ii) the date the Common Stock attains the
     performance target described hereafter: If, (i) at any time prior to the
     fifth anniversary of the Date of Grant, the Fair Market Value per Share for
     twenty consecutive trading days is twenty-five dollars ($25.00) or more,
     then, on the first trading day following such twenty day period, the
     Optionee's rights in and to the Option shall become fully vested and the
     Option shall become fully exercisable. For the purposes of this paragraph
     3, "trading day" means any day on which securities trading is conducted on
     the New York Stock Exchange. To the extent the Option is exercisable, it
     may be exercised in whole or in part."

AMENDED PARAGRAPH 6:

          "6. TERMINATION OF AGREEMENT. The Agreement and the Option granted
     hereby shall terminate automatically and without further notice on the
     earliest of the following dates:

                (a) The remaining term of the Option after the date the Optionee
     ceases to be an employee of the Company by reason of the Optionee's (i)
     death, (ii) permanent disability or (iii) retirement under a retirement
     plan of the Company at or after the earliest voluntary retirement age
     provided for in such retirement plan or retirement at an earlier age with
     the consent of the Board;

                (b) Immediately upon the voluntary or involuntary resignation of
     the Optionee other than in connection with retirement as provided in
     6(a)(iii) above; or

                (c) Ten years from the Date of Grant.

     In the event that the Optionee commits an act that the Committee determines
     to have been intentionally committed and materially inimical to the
     interests of the Company, the Agreement shall terminate at the time of that
     determination notwithstanding any other provision of this Agreement. This
     Agreement shall not be exercisable for any number of Optioned Shares in
     excess of the number of Optioned Shares for which this Agreement is then
     exercisable on the date of termination of employment. For the purposes of
     this Agreement, the continuous employment of the Optionee with the Company
     shall not be deemed to have been interrupted, and the Optionee shall not be
     deemed to have ceased to be an employee of the Company, by reason of the
     transfer of his or her employment among the Company and its Subsidiaries or
     an approved leave of absence."

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