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EXHIBIT 10.3
OCCIDENTAL PETROLEUM CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
Name of Optionee: ___________________________________________________
Date of Grant: ______________________________________________________
Number of Optioned Shares: __________________________________________
Option Price: _______________________________________________________
Vesting Percentage: ________________ Percent
AGREEMENT (the "Agreement") made as of the Date of Grant by and between
OCCIDENTAL PETROLEUM CORPORATION, a Delaware corporation (hereinafter called
"Occidental," and, collectively with its Subsidiaries, the "Company"), and
Optionee.
1. GRANT OF STOCK OPTION. Subject to and upon the terms, conditions, and
restrictions set forth in this Agreement and in the Occidental Petroleum
Corporation 1995 Incentive Stock Plan (the "Plan"), Occidental hereby grants to
the Optionee as of the Date of Grant a stock option (the "Option") to purchase
up to the number of Optioned Shares. The Option may be exercised from time to
time in accordance with the terms of this Agreement. The Option is intended to
be a nonqualified stock option and shall not be treated as an "incentive stock
option" within the meaning of that term under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any successor provision
thereto.
2. TERM OF OPTION. The term of the Option shall commence on the Date of
Grant and, unless earlier terminated in accordance with Section 6 hereof, shall
expire ten (10) years from the Date of Grant.
3. RIGHT TO EXERCISE. Subject to the expiration or earlier termination of
the Option, on each anniversary of the Date of Grant the number of Optioned
Shares equal to the Vesting Percentage multiplied by the initial number of
Optioned Shares specified in this Agreement shall become exercisable on a
cumulative basis until the Option is fully exercisable. To the extent the Option
is exercisable, it may be exercised in whole or in part.
4. OPTION NONTRANSFERABLE. The Option granted hereby shall be neither
transferable nor assignable by the Optionee other than by will or by the laws of
descent
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and distribution and may be exercised, during the lifetime of the Optionee, only
by the Optionee, or in the event of his or her legal incapacity, by his or her
guardian or legal representative acting on behalf of the Optionee in a fiduciary
capacity under state law and court supervision.
5. NOTICE OF EXERCISE; PAYMENT. To the extent then exercisable, the
Option shall be exercised by oral or written notice to Occidental stating the
number of Optioned Shares for which the Option is being exercised and the
intended manner of payment. Payment equal to the aggregate Option Price of the
Optioned Shares shall be (a) in cash in the form of currency or check or other
cash equivalent acceptable to Occidental, (b) by actual or constructive transfer
to Occidental of nonforfeitable, nonrestricted shares of Common Stock that have
been owned by the Optionee for (i) more than one year prior to the date of
exercise and for more than two years from the date on which the option was
granted, if they were originally acquired by the Optionee pursuant to the
exercise of an incentive stock option, or (ii) more than six months prior to the
date of exercise, if they were originally acquired by the Optionee other than
pursuant to the exercise of an incentive stock option, or (c) by any combination
of the foregoing methods of payment. Nonforfeitable, nonrestricted shares of
Common Stock that are transferred by the Optionee in payment of all or any part
of the Option Price shall be valued on the basis of their Fair Market Value per
Share. The requirement of payment in cash shall be deemed satisfied if the
Optionee makes arrangements that are satisfactory to Occidental with a broker
that is a member of the National Association of Securities Dealers, Inc. to sell
a sufficient number of the shares of Common Stock, which are being purchased
pursuant to the exercise, so that the net proceeds of the sale transaction will
at least equal the amount of the aggregate Option Price, and pursuant to which
the broker undertakes to deliver to Occidental the amount of the aggregate
Option Price not later than the date on which the sale transaction will settle
in the ordinary course of business. The date of such notice shall be the
exercise date. Any oral notice of exercise shall be confirmed in writing to
Occidental before the close of business the same day.
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.
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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.
7. ACCELERATION OF OPTION. In the event of a Change of Control, the
Option granted hereby shall become immediately exercisable in full. For purposes
of this Agreement, "Change of Control" means the occurrence of any of the
following events:
(a) any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange 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 of the Plan (the
"Effective Date") the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange 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;
(b) 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 (a), (c), or (d) 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;
(c) the stockholders of Occidental approve a merger or consolidation
of Occidental with any other corporation, other than (i) 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
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consolidation or (ii) 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
(d) 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 (a) through (d) above, the Board may determine that such event shall
not constitute a Change of Control for purposes of this Agreement.
8. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement shall
confer upon the Optionee any right with respect to continuance of employment by
the Company, nor limit or affect in any manner the right of the Company to
terminate the employment or adjust the compensation of the Optionee.
9. TAXES AND WITHHOLDING. If the Company shall be required to withhold
any federal, state, local or foreign tax in connection with the exercise of the
Option, the Optionee shall pay the tax or make provisions that are satisfactory
to the Company for the payment thereof. The Optionee may elect to satisfy all or
any part of any such withholding obligation by surrendering to the Company a
portion of the shares of Common Stock that are issued or transferred to the
Optionee upon the exercise of the Option, and the shares of Common Stock so
surrendered by the Optionee shall be credited against any such withholding
obligation at the Fair Market Value per Share of such shares on the date of such
surrender; provided, however, if the Optionee is subject to Section 16 of the
Exchange Act, such election shall be made in accordance with Rule 16b-3 and
subject to approval by the Committee if such approval is then required by Rule
16b-3.
10. COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Option shall not be
exercisable if the exercise thereof would result in a violation of any such law.
11. ADJUSTMENTS. The Committee shall make such adjustments in the Option
Price and the number or kind of shares of stock covered by the Option that the
Committee may in good faith determine to be required in order to prevent
dilution or expansion of the Optionee's rights under this Agreement that
otherwise would result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, or (b) 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 all or any
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portion of the Optionee's rights under this Agreement such alternative
consideration as the Committee may in good faith determine to be appropriate
under the circumstances and may require the surrender of all rights so replaced.
12. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Optionee under this Agreement shall not be taken into account in determining any
benefits to which the Optionee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Company and
shall not affect the amount of any life insurance coverage available to any
beneficiary under any life insurance plan covering employees of the Company.
13. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment shall adversely affect the rights
of the Optionee under this Agreement without the Optionee's consent.
14. SEVERABILITY. In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
15. RELATION TO PLAN. This Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistent provisions between this
Agreement and the Plan, the Plan shall govern. Capitalized terms used herein
without definition shall have the meanings assigned to them in the Plan.
16. SUCCESSORS AND ASSIGNS. Without limiting Section 4 hereof, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the successors, administrators, heirs, legal representatives and assigns of the
Optionee, and the successors and assigns of the Company.
17. GOVERNING LAW. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of Delaware.
18. NOTICES. Any notice to the Company provided for herein shall be given
to its Secretary at 00000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, and
any notice to the Optionee shall be addressed to said Optionee at his or her
address currently on file with the Company. Except as otherwise provided herein,
any written notice shall be deemed to be duly given if and when delivered
personally or deposited in the United States mail, first class registered mail,
postage and fees prepaid, and addressed as aforesaid. Any party may change the
address to which notices are to be given hereunder by written notice to the
other party as herein specified (provided that for this purpose any mailed
notice shall be deemed given on the third business day following deposit on the
same in the United States mail).
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer and Optionee has also executed this
Agreement in duplicate, as of the day and year first above written.
OCCIDENTAL PETROLEUM CORPORATION
By:
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Optionee
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