Occidental Petroleum 2003 Annual Report Download - page 73

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Unrealized gains on securities 89 65
---------- ----------
TOTAL $ 50 $ (27)
================================================================================ ========== ==========
NOTE 12 STOCK INCENTIVE PLANS
--------------------------------------------------------------------------------
Occidental applies APB No. 25 and related interpretations in accounting for
its stock incentive plans (Plans), which are described below. The pro-forma
effect on net income and earnings per share, had Occidental applied the
fair-value recognition provisions of SFAS No. 123, are shown in Note 1.
The company has established several stock incentive plans offering certain
employees and management stock options, restricted stock, stock appreciation
rights and performance stock awards. These awards are granted under the 1995 and
2001 Incentive Stock Plans. The 1995 Plan was terminated, for the purposes of
further award grants, upon the effective date of the 2001 Plan; however, certain
1995 Plan award grants are outstanding at December 31, 2003. An aggregate of
27,000,000 share-based awards are reserved for issuance under the 2001 Plan and
at December 31, 2003, approximately 7,574,285 share-based awards were available
for future awards. The company has also established the 1996 Restricted Stock
Plan for non-employee directors, where non-employee directors receive awards of
restricted stock as additional compensation for their services as members of the
Board of Directors. A maximum of 150,000 shares of stock may be awarded under
the Directors Plan and at December 31, 2003, 34,572 shares of common stock were
available for future grants.
56
STOCK OPTION PLANS
Under the stock option plans, certain employees and executives are granted
stock options with an exercise price equal to the fair value of the company's
stock on the date of grant. Generally, the options vest over three years with a
maximum term of ten years and one month. Under certain conditions, the option
awards are forfeitable.
The following is a summary of stock option transactions during 2003, 2002
and 2001:
2003 2002 2001
------------------------ ------------------------ ------------------------
WEIGHTED Weighted Weighted
AVERAGE Average Average
(shares in thousands) OPTIONS EXERCISE PRICE Options Exercise Price Options Exercise Price
===================================== ======= ============== ======= ============== ======= ==============
BEGINNING BALANCE 26,972 $ 24.22 25,390 $ 23.40 18,217 $ 21.53
Granted or issued 5,191 $ 31.13 4,904 $ 26.43 11,039 $ 26.17
Exercised (8,999) $ 22.30 (3,097) $ 21.12 (3,395) $ 22.40
Forfeited or expired (152) $ 24.96 (225) $ 22.52 (471) $ 23.50
------- ------- -------
ENDING BALANCE 23,012 $ 26.53 26,972 $ 24.22 25,390 $ 23.40
OPTIONS EXERCISABLE AT YEAR END 12,535 $ 24.62 16,186 $ 23.33 15,023 $ 22.95
------------------------------------- ------- -------------- ------- -------------- ------- --------------
The following is a summary of stock options outstanding at December 31,
2003:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------- -------------------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
RANGE OF REMAINING EXERCISE EXERCISE
EXERCISE PRICES OUTSTANDING CONTRACTUAL LIFE PRICE EXERCISABLE PRICE
================ ============ ================ ================ ================ ================