Occidental Petroleum 2002 Annual Report Download - page 78

Occidental has authorized 50,000,000 shares of preferred stock with a par
value of $1.00 per share. At December 31, 2002, 2001 and 2000, Occidental had no
outstanding shares of preferred stock.
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STOCK INCENTIVE PLANS
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The 1987 Stock Plan, as amended, provided for the grant of incentive stock
options (ISOs), nonqualified stock options (NQSOs) and stock appreciation rights
(SARs) to the executive officers and other key employees of Occidental and its
subsidiaries. An aggregate of 9,000,000 shares of common stock was reserved for
issuance upon exercise of ISOs, NQSOs or SARs granted. Options granted under the
plan were granted at an exercise price not less than the fair market value on
the date of grant and the price may not be changed except to reflect a change in
capitalization. The 1987 Plan provides that outstanding options and SARs will be
accelerated if Occidental enters into one or more agreements to dispose of
substantially all the assets or 50 percent, or more of the capital stock, of
Occidental by sale, merger, reorganization or liquidation in one transaction or
a related series of transactions. In an acceleration event, optionees subject to
Section 16 of the Securities Exchange Act of 1934 (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 or persons who have agreed to become salaried employees.
An aggregate of 25,000,000 shares of common stock were reserved for issuance in
connection with awards under the 1995 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 1995 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.
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 were initially
reserved for issuance under the 2001 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 acquiring more than 20
percent of the voting power of Occidental or a significant change in
Occidental's Board of Directors 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 2001 Plan or the
number of securities that may be issued or would materially modify the
requirements for eligibility. No awards may be made under the 2001 Plan after