EXHIBIT 99.2
OCCIDENTAL PETROLEUM CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
Name of Optionee: _______________________________________
Date of Grant: __________________________________________
Number of Optioned Shares: ______________________________
Option Price:1 __________________________________________
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 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; this Agreement shall be construed
in a manner that will enable this Option to be so
qualified.
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 _____ (__)2 years from the Date of Grant.
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1 Not less than the Fair Market Value per Share on
the Date of Grant. If the Option Price is based upon
an index, (i) specify the index and the method for
applying the index to the initial Option Price, and
(ii) specify that in no event will the Option price
be less than the Fair Market Value per Share on the
Date of the Grant.
2 Not greater than 10 years.
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 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, plus interest at the "applicable
Federal rate" within the meaning of that term under
Section 1274 of the Code, or any successor provision
thereto, for the period from the date of exercise
to the date of payment, 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:
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(a) Eighteen months after the Optionee
ceases to be an employee of the Company by reason of
(i) termination of employment under circumstances
(other than retirement as described in (d)(ii) below)
determined by the Board to be for the convenience of
the Company or (ii) the Optionee's permanent
disability, if the Optionee becomes permanently
disabled while an employee of the Company;
(b) One year after the death of the Optionee
if the Optionee dies while an employee of the Company;
(c) Immediately upon the voluntary
resignation of the Optionee other than in connection
with retirement as provided in (d)(ii) below;
(d) Thirty calendar days after the
Optionee ceases to be an employee of the Company for any
reason other than (i) as described in Section 6(a),
6(b) or 6(c) hereof or (ii) the Grantee's 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; or
(e) 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 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
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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 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
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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; provided, however, that no
adjustment may be made without the prior written consent
of the Optionee if the adjustment would
constitute a "modification" within the meaning of
Section 424(h) of the Code or any successor provision
thereto. In the event of any such transaction or
event, the Committee may provide in substitution for
all or any 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. MANDATORY NOTICE OF DISQUALIFYING
DISPOSITION. Without limiting any other provision
hereof, the Optionee hereby agrees that if the
Optionee disposes (whether by sale, exchange, gift or
otherwise) of any of the Optioned Shares within two (2)
years of the Date of Grant or within one (1) year after
the transfer of such share or shares to the Optionee, the
Optionee shall notify Occidental of such disposition in
writing within thirty (30) days from the date of such
disposition. Such written notice shall state the
principal terms of such disposition, including
without limitation the date of such disposition and
the type and amount of the consideration received
for such share or shares by the Optionee in
connection therewith.
13. 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.
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14. 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.
15. 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.
16. 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.
17. 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.
18. GOVERNING LAW. The interpretation,
performance, and enforcement of this Agreement shall be
governed by the laws of the State of Delaware.
19. 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).
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: __________________________
______________________________
Optionee
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