Occidental Petroleum 2001 Annual Report Download - page 66

Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act") will
receive a cash payment equal to the difference between the fair market value of
the shares subject to the option and the exercise price. The 1987 Plan was
terminated for the purposes of further grants upon the effective date of the
1995 Incentive Stock Plan.
The 1995 Incentive Stock Plan, as amended, provided for the grant of awards
in the form of options, SARs, performance stock or restricted stock to salaried
employees of Occidental and its subsidiaries or persons who have agreed to
become salaried employees. An aggregate of 25,000,000 shares of common stock was
reserved for issuance in connection with awards under the plan. Adjustments to
the number of shares covered by an award or the option or base price of an
option or SAR may be made by the Committee in order to prevent the dilution or
expansion in participants rights due to a change in capitalization, merger,
consolidation, reorganization or similar corporate transaction. Stockholder
approval is required to extend the maximum period for exercising stock options
or SARs (10 years from the date of grant), to reduce the option price or base
price of any outstanding options or SARs, or for any material amendment of the
Plan as defined in Rule 16b-3 of the Exchange Act. The 1995 Incentive Stock Plan
was terminated for the purposes of further grants upon the effective date of the
2001 Incentive Stock Plan.
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The 2001 Incentive Compensation Plan, as amended, provides for the grant of
awards in the form of common stock, options, SARs, restricted stock, stock units
or similar rights to purchase shares. Any of the awards may be granted as
performance-based awards. An aggregate of 17,000,000 shares was initially
reserved for issuance under the plan. The plan administrator will
proportionately adjust outstanding awards in the event of an extraordinary
dividend or distribution or any reclassification, recapitalization,
reorganization, merger or other extraordinary corporate transaction, or a sale
of substantially all of the assets of Occidental as a whole. In such events, an
adjustment may be made to the number and type of shares subject to an award, the
grant, purchase or exercise price of outstanding awards; the securities, cash or
property deliverable upon exercise of an outstanding award or the performance
goals or objectives applicable to an outstanding award. Upon the occurrence of a
change of control event (the dissolution or liquidation of Occidental,
consummation of a business combination, any person acquires more than 20 percent
of the voting power of Occidental or, a significant change in Board composition)
and unless the Administrator determines to the contrary, options and SARs become
immediately exercisable, restricted stock immediately vests, performance based
awards become immediately payable and any rights of a participant under any
other award are accelerated to give the participant the benefit of the award.
Stockholder approval is required for any reduction in the exercise price of any
option or SAR below the fair market value on the date of grant and for any
amendment to the plan that would materially increase the benefits to
participants under the Plan or the number of securities which may be issued or
materially modify the requirements for eligibility. No awards may be made under
the plan after April 20, 2011. At December 31, 2001, 10,421,184 shares were
available for future awards under this plan, all of which were available to
issue stock options, SARs, restricted stock and performance stock awards.
Options to purchase common stock of Occidental have been granted to
officers and employees under stock option plans adopted in 1987, 1995 and 2001,
as discussed above. During 2001, options for 10,380,946 shares became
exercisable, and options for 15,023,102 shares were exercisable at December 31,
2001 at a weighted-average exercise price of $22.95. Generally, these options
vest over three years with a maximum term of ten years and one month. At
December 31, 2001, options with SARs for 235,000 shares were outstanding, all of
which were exercisable.
The following is a summary of stock option transactions during 2001, 2000
and 1999 (shares in thousands):
2001 2000 1999
------------------------ ------------------------ ------------------------
WEIGHTED Weighted Weighted
AVERAGE Average Average
SHARES EXERCISE PRICE Shares Exercise Price Shares Exercise Price
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