SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [x]
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[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Occidental Petroleum Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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[OXY LOGO]
OCCIDENTAL PETROLEUM CORPORATION
[ NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS and PROXY STATEMENT ]
2001
March 12, 2001
Dear Stockholders:
On behalf of the Board of Directors, it is my
pleasure to invite you to Occidental's 2001
Annual Meeting of Stockholders, which will be
held on Friday, April 20, 2001, at the
Starlight Ballroom, Fairmont Miramar Hotel,
101 Wilshire Boulevard, Santa Monica,
California.
Attached is the Notice of Meeting and the
Proxy Statement, which describes in detail the
matters on which you are being asked to vote.
These matters include electing the directors,
ratifying the selection of independent public
accountants, approving Occidental's 2001
Incentive Compensation Plan and transacting
any other business that properly comes before
the meeting, including any stockholder
proposals.
Also enclosed are a Report to Stockholders, in
which senior management discusses highlights
of the year, and Occidental's Annual Report on
Form 10-K. As in the past, at the meeting FRIDAY, APRIL 20, 2001
there will be a report on operations and an Starlight Ballroom
opportunity to ask questions. Fairmont Miramar Hotel
101 Wilshire Boulevard
Whether you plan to attend the meeting or not, Santa Monica, California
I encourage you to vote promptly so that your
shares will be represented and properly voted
at the meeting. MEETING HOURS
Registration Begins 9:30 A.M.
Sincerely yours, Meeting 10:30 A.M.
/s/ RAY R. IRANI
ADMISSION TICKET OR
Ray R. Irani, Chairman and Chief Executive CURRENT BROKERAGE STATEMENT
Officer REQUIRED FOR ADMISSION
OCCIDENTAL PETROLEUM CORPORATION
10889 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90024
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
o o o
March 12, 2001
To Our Stockholders:
Occidental's 2001 Annual Meeting of Stockholders will be held at 10:30 a.m.
on Friday, April 20, 2001, at the Starlight Ballroom, Fairmont Miramar Hotel,
101 Wilshire Boulevard, Santa Monica, California. This year, instead of lunch,
coffee and rolls will be provided before the meeting begins.
At the meeting, stockholders will act on the following matters:
1. Election of directors;
2. Ratification of independent public accountants;
3. Approval of the 2001 Incentive Compensation Plan; and
4. Consideration of other matters properly brought before the meeting,
including stockholder proposals. The Board of Directors knows of two
stockholder proposals that may be presented.
These matters are described in detail in the Proxy Statement. The Board of
Directors recommends a vote FOR Items 1, 2 and 3 and AGAINST Items 4, and 5 as
listed on the proxy card.
Stockholders of record at the close of business on March 2, 2001, are
entitled to receive notice of, to attend and to vote at, the meeting.
Whether you plan to attend or not, it is important that you read the Proxy
Statement and follow the instructions on your proxy card to vote by mail,
telephone or Internet. This will ensure that your shares are represented and
will save Occidental additional expenses of soliciting proxies.
Sincerely,
/s/ DONALD P. DE BRIER
Donald P. de Brier
Executive Vice President,
General Counsel and Secretary
PROXY STATEMENT
TABLE OF CONTENTS
o o o
GENERAL INFORMATION............................................................1
ELECTION OF DIRECTORS..........................................................2
Information Regarding the Board of
Directors and its Committees................................................5
Certain Relations and Related Transactions..................................6
Section 16(a) Beneficial Ownership
Reporting Compliance........................................................6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT..........................................................7
EXECUTIVE COMPENSATION.........................................................8
Compensation Tables.........................................................8
Employment Agreements......................................................11
Report of the Compensation Committee.......................................13
Performance Graph..........................................................16
REPORT OF THE AUDIT COMMITTEE.................................................17
AUDIT AND OTHER FEES..........................................................17
RATIFICATION OF THE SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS............................................................17
APPROVAL OF THE 2001 INCENTIVE COMPENSATION PLAN..............................17
STOCKHOLDER PROPOSALS.........................................................21
STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL
MEETING OF STOCKHOLDERS.......................................................23
CORPORATE GOVERNANCE POLICIES.................................................23
ANNUAL REPORT.................................................................24
EXHIBIT A-- AUDIT COMMITTEE CHARTER..........................................A-1
EXHIBIT B--2001 INCENTIVE COMPENSATION PLAN..................................B-1
OCCIDENTAL PETROLEUM CORPORATION
10889 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90024
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PROXY STATEMENT
o o o
GENERAL INFORMATION
o o o
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Occidental Petroleum Corporation, a
Delaware corporation, for use at the Annual Meeting of Stockholders on April 20,
2001, and at any adjournment of the meeting.
ADMISSION TO MEETING
Attendance is limited to stockholders and one guest per stockholder. If you
plan to attend the meeting in person and you are a stockholder of record, you
must bring the admission ticket attached to your proxy or information card. If
your shares are held in the name of a bank, broker or other holder of record,
you will be admitted only if you have proof of ownership on the record date,
such as a bank or brokerage account statement. In addition to your admission
ticket or account statement, you may be asked to present valid picture
identification, such as a driver's license or passport.
VOTING RIGHTS
This Proxy Statement and accompanying proxy card are being mailed beginning
on or about March 12, 2001, to each stockholder of record as of March 2, 2001,
which is the record date for the determination of stockholders entitled to
receive notice of, to attend and to vote at, the meeting. As of the record date,
Occidental had outstanding and entitled to vote 370,268,371 shares of common
stock. A majority of outstanding shares must be represented at the meeting, in
person or by proxy, to constitute a quorum and to transact business. The record
holder of each share of common stock entitled to vote at the meeting will have
one vote for each share held. Stockholders may not cumulate their votes.
VOTE REQUIRED
Directors are elected by a plurality of votes cast, excluding broker
nonvotes. A majority of the shares of common stock represented at the meeting
and entitled to vote must vote for to approve all other matters. Abstentions and
broker nonvotes have the same effect as votes against on matters other than the
election of directors and the approval of the 2001 Incentive Compensation Plan.
With respect to such plan, abstentions will have the same effect as votes
against the proposal and broker non-votes will be disregarded.
VOTING OF PROXIES
The Board of Directors has designated Drs. Ray R. Irani and Dale R.
Laurance and Mr. Aziz D. Syriani, and each of them, with the full power of
substitution, to vote shares represented by all properly executed proxies. The
shares will be voted in accordance with the instructions on the proxy card. If
no instructions are specified on the proxy card, the shares will be voted:
o FOR all nominees for directors (see page 2);
o FOR the ratification of the independent accountants (see page 17);
o FOR the Approval of the 2001 Incentive Compensation Plan (see page
17); and
o AGAINST each of the stockholder proposals (see page 21).
In the absence of instructions to the contrary, proxies will be voted in
accordance with the judgment of the person exercising the proxy on any other
matter presented at the meeting in accordance with Occidental's By-laws.
CONFIDENTIAL VOTING
All proxies, ballots and other voting materials are kept confidential,
unless disclosure is required by applicable law or expressly requested by you,
you write comments on the proxy forms, or the proxy solicitation is contested.
REVOKING A PROXY
You may revoke your proxy or change your vote before the meeting by filing
a revocation with the Secretary of Occidental, by delivering to Occidental a
valid proxy bearing a later date or by attending the meeting and voting in
person.
SOLICITATION EXPENSES
Expense of this solicitation will be paid by Occidental. Georgeson
Shareholder Communications Inc. has been retained to solicit proxies and assist
in distribution and collection of proxy material for a fee estimated at $15,000
plus reimbursement of out-of-pocket expenses. Occidental also will reimburse
banks, brokers, nominees and related fiduciaries for the expense of forwarding
soliciting material to beneficial owners of the common stock. In addition,
Occidental's officers, directors and regular employees may solicit proxies but
will receive no additional or special compensation for such work.
1
ELECTION OF DIRECTORS
o o o
Unless otherwise specified on the proxy card, proxies received will be
voted FOR Ronald W. Burkle, John S. Chalsty, Edward P. Djerejian, John E. Feick,
J. Roger Hirl, Dr. Ray R. Irani, Dr. Dale R. Laurance, Irvin W. Maloney, Rodolfo
Segovia, Aziz D. Syriani and Rosemary Tomich to serve for a one-year term ending
at the 2001 annual meeting, but, in any event, until his or her successor is
elected and qualified, unless ended earlier due to death, resignation,
disqualification or removal from office. In the event any nominee should be
unavailable at the time of the meeting, the proxies may be voted for a
substitute nominee selected by the Board of Directors.
The following biographical information is furnished with respect to each of
the nominees for election at the 2001 annual meeting.
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[PHOTOGRAPH] RONALD W. BURKLE, 48
Mr. Burkle is the managing partner and majority owner of The
Yucaipa Companies, a private investment firm that invests
primarily its own capital. He is also the largest
shareholder of Golden State Foods, the largest supplier of
food products to McDonald's and is Trustee of the John F.
Kennedy Center for the Performing Arts, Trustee of the J.
Paul Getty Trust and a member of the Board of the Carter
Center. Mr. Burkle is also a director of KB Home.
Director since 1999
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[PHOTOGRAPH] JOHN S. CHALSTY, 67
Mr. Chalsty has been Senior Advisor to Credit Suisse First
Boston since 2001. He was Chairman of Donaldson, Lufkin &
Jenrette, Inc., an investment banking firm, from 1996
through 2000 and served as President and Chief Executive
Officer from 1986 to 1996. He is also a director of AXA
Financial, Inc., Sappi, Ltd. and IBP, inc.
Director since 1996
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[PHOTOGRAPH] EDWARD P. DJEREJIAN, 62
Ambassador Djerejian has been founding Director of the James
A. Baker III Institute for Public Policy at Rice University
since 1994. Before that, he had a career in foreign service
that included serving as United States Ambassador to Israel
from 1993 to 1994, as Assistant Secretary of State for Near
Eastern Affairs from 1991 to 1993 and as U.S. Ambassador to
the Syrian Arab Republic from 1988 to 1991. Ambassador
Djerejian is also a director of GLG Universal Investments
and Global Industries, Ltd.
Director since 1996
2
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[PHOTOGRAPH] JOHN E. FEICK, 57
Since 1995, Mr. Feick has been President, Chief Executive
Officer and a major stockholder of Matrix Solutions Inc., a
provider of environmental remediation and reclamation
services. He is also chairman and a partner in Kemex
Engineering Services, Ltd., which offers engineering and
design services to the petrochemical, refining and gas
processing industries. He was president and chief operating
officer of Novacor Chemicals, a subsidiary of Nova
Corporation, from 1984 to 1994. Mr. Feick is also a director
of Fort Chicago Energy Partners L.P.
Director since 1998
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[PHOTOGRAPH] J. ROGER HIRL, 69
Mr. Hirl has been President and Chief Operating Officer of
Occidental Chemical Corporation since 1983, its Chief
Executive Officer since 1991 and an Executive Vice President
of Occidental since 1984. He is also a director of the
Armand Products Company.
Director since 1988
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[PHOTOGRAPH] DR. RAY R. IRANI, 66
Dr. Irani has been Chairman and Chief Executive Officer of
Occidental since 1990 and a director since 1984. He served
as President from 1984 until July 1996. He was Chief
Operating Officer from 1984 to 1990. He was Chairman of the
Board of Directors of Canadian Occidental Petroleum Ltd.
(now Nexen Inc.) from 1987 to 1999, and was Honorary
Chairman of the Board from 1999 to 2000. Dr. Irani is also a
director of Cedars Bank, Health Net, ICN Pharmaceuticals,
Inc. and KB Home.
Director since 1984
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[PHOTOGRAPH] DR. DALE R. LAURANCE, 55
Dr. Laurance has been President of Occidental since 1996 and
a director of Occidental since 1990. Since 1999, he has been
Chairman of the Board, President and Chief Executive Officer
of Occidental Oil and Gas Corporation. He is also a director
of Jacobs Engineering Group Inc.
Director since 1990
3
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[PHOTOGRAPH] IRVIN W. MALONEY, 70
From 1992 until his retirement in 1998, Mr. Maloney was
President and Chief Executive Officer of Dataproducts
Corporation, which designs, manufactures and markets
printers and supplies for computers.
Director since 1994
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[PHOTOGRAPH] RODOLFO SEGOVIA, 64
Mr. Segovia is on the Executive Committee of Inversiones
Sanford, a diversified investment group with emphasis in
petrochemicals, specialty chemicals and plastics. A former
president of the Colombian national oil company (Ecopetrol)
as well as Minister and Senator of the Republic of Colombia,
he has been president and CEO of Sanford's PVC company and,
from 1996 to 1998, of its polypropylene venture. In 1999, he
was visiting Professor of Management at Lehigh University.
Director since 1994
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[PHOTOGRAPH] AZIZ D. SYRIANI, 58
Mr. Syriani has served since 1978 as the President and Chief
Operating Officer of The Olayan Group, a diversified
trading, services and investment organization with
activities and interests in the Middle East and elsewhere.
Mr. Syriani is also a director of The Credit Suisse Group.
Director since 1983
Lead Independent Director since 1999
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[PHOTOGRAPH] ROSEMARY TOMICH, 63
Miss Tomich has been owner of the Hope Cattle Company since
1958 and the A. S. Tomich Construction Company since 1970.
She is also Chairman of the Board of Directors and Chief
Executive Officer, Livestock Clearing, Inc. and a director
of ICN Pharmaceuticals, Inc. and was a Founding Director of
the Palm Springs Savings Bank. Miss Tomich is also on the
Advisory Board of the University of Southern California
School of Business Administration, the Board of Councillors
for the School of Letters and Sciences at the University of
Southern California and the UCLA Foundation Board of
Councillors.
Director since 1980
4
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
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LEAD INDEPENDENT DIRECTOR COMPENSATION COMMITTEE
Aziz D. Syriani Ronald W. Burkle
John S. Chalsty
Irvin W. Maloney (chairman)
EXECUTIVE COMMITTEE Rosemary Tomich
Dr. Ray R. Irani (chairman)
Dr. Dale R. Laurance NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
Irvin W. Maloney Edward P. Djerejian
Aziz D. Syriani Aziz D. Syriani (chairman)
Rosemary Tomich Rosemary Tomich
AUDIT COMMITTEE ENVIRONMENTAL, HEALTH AND SAFETY COMMITTEE
Irvin W. Maloney Edward P Djerejian
Aziz D. Syriani John E. Feick
Rosemary Tomich (chairman) Rodolfo Segovia (chairman)
Rosemary Tomich
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The Board of Directors held 6 regular meetings during 2000. Each director
attended at least 75 percent of the meetings of the Board of Directors and the
committees of which he or she was a member.
In 2000, the Board of Directors had a Lead Independent Director and five
standing committees: Executive; Audit; Compensation; Nominating and Corporate
Governance; and Environmental, Health and Safety. The general duties of the Lead
Independent Director and the committees are described below. From time to time,
the Board of Directors delegates additional duties to the standing committees.
The Lead Independent Director coordinates the activities of the independent
directors, advises the Chairman on the schedule and agenda for Board meetings,
assists in assuring compliance with Occidental's corporate governance policies,
assists the Compensation Committee in evaluating the Chairman's performance and
recommends to the Chairman membership of the various Board committees.
The Executive Committee, to the extent permitted by law, exercises the
powers of the Board of Directors with respect to the management of the business
and affairs of Occidental between meetings of the Board of Directors. The
Executive Committee did not act during 2000.
The Audit Committee recommends the firm of independent public accountants
to audit the consolidated financial statements, books, records and accounts of
Occidental and its subsidiaries; discusses the scope and results of the audit
with the independent public accountants; discusses Occidental's financial
accounting and reporting principles and the adequacy of Occidental's internal
accounting, financial and operating controls with the accountants and with
management; reviews all reports of internal audits submitted to the Audit
Committee and management's responses thereto; reviews the appointment of the
senior internal auditing executive; and oversees all matters relating to
Occidental's compliance program. The complete charter of the Audit Committee is
set forth in Exhibit A. All of the members of the Audit Committee meet the
independence standards of Section 303.01(b)(2) and (3) of the New York Stock
Exchange's listing standards. The Audit Committee held 6 meetings in 2000. The
Audit Committee Report with respect to Occidental's financial statements begins
on page 17.
The Compensation Committee administers Occidental's stock-based incentive
compensation plans, including selecting participants, making grants and setting
performance targets; periodically reviews the performance of the plans and their
rules; reviews and approves the annual salaries, bonuses and other benefits of
all executive officers; reviews new executive compensation programs; and
periodically reviews the operation of existing executive compensation programs
as well as policies for the administration of executive compensation. The
Compensation Committee held 7 meetings in 2000. The Compensation Committee's
report on executive compensation begins at page 13.
The Nominating and Corporate Governance Committee recommends candidates for
election to the Board and, in addition, is responsible for compliance with
Occidental's Governance Policies. The Nominating and Corporate Governance
Committee will consider nominees recommended by stockholders if the stockholder
recommendations are forwarded to the Secretary of Occidental and are otherwise
in compliance with Occidental's By-laws. Under Occidental's By-laws, nominations
for directors, other than those made by the Board of Directors, must be received
70 to 90 days prior to the anniversary date of the prior year's annual meeting.
If the meeting date is not within 30 days of the anniversary
5
date, the nomination must be received not later than the tenth day following the
earlier of the day on which the notice of the meeting date was mailed or the day
public disclosure of the new date was made. The stockholder's nomination must
include the information required by the By-laws. The Nominating and Corporate
Governance Committee held 4 meetings in 2000.
The Environmental, Health and Safety Committee reviews and discusses with
management the status of health, environment and safety issues, including
compliance with applicable laws and regulations, the results of internal
compliance reviews and remediation projects; and reports periodically to the
Board on environmental, health and safety matters affecting Occidental and its
subsidiaries. The Environmental, Health and Safety Committee held 6 meetings in
2000.
COMPENSATION OF DIRECTORS
For the term expiring at the 2001 Annual Meeting, non-employee directors
were paid a retainer of $30,000 per year, plus $1,000 for each meeting of the
Board of Directors or of its committees they attend and, pursuant to the 1996
Restricted Stock Plan for Non-Employee Directors, received an annual grant of
2,500 shares of Common Stock, plus an additional 200 shares of Common Stock for
each committee he or she chairs. The retainer and attendance fee will increase
after the Annual Meeting to $35,000 per year and $1,250 per meeting,
respectively. In addition, Occidental reimburses directors for expenses related
to service on the Board, pays the premiums for one non-employee director who
participates in the Occidental Petroleum Corporation Insured Medical Plan and,
subject to availability, permits directors to make use of company aircraft. One
director also received $1,000 for each meeting of the directors of the
Occidental Petroleum Charitable Foundation, Inc. she attended. The Foundation
held one meeting in 2000. Employee directors do not receive compensation for
serving as directors.
CERTAIN RELATIONS AND RELATED
TRANSACTIONS
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Occidental from time to time uses the services of various investment
banking firms, including Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), of which
Mr. Chalsty was Chairman. The compensation paid to DLJ for services rendered to
Occidental during 2000 did not exceed five percent of DLJ's consolidated gross
revenues for its last full fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules issued thereunder, Occidental's executive officers, directors and any
beneficial owner of more than 10 percent of any class of Occidental's equity
securities are required to file with the Securities and Exchange Commission and
the New York Stock Exchange reports of ownership and changes in ownership of
common stock. Copies of such reports are required to be furnished to Occidental.
Based solely on its review of the copies of the reports furnished to Occidental,
or written representations that no reports were required, Occidental believes
that, during 2000, all persons required to report complied with the Section
16(a) requirements, except for Dr. Ray R. Irani and Lawrence P. Meriage, Vice
President Communications and Public Relations. With respect to Dr. Irani, one
report failed to reflect shares withheld to satisfy taxes on vested restricted
stock. With respect to Mr. Meriage, his initial Form 3 was filed late.
6
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
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At the close of business on March 2, 2001, the beneficial owners of common
stock shown below were the only persons known to Occidental to be the beneficial
owners of five percent or more of the outstanding voting securities of
Occidental.
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PERCENT OF
OUTSTANDING
NUMBER OF COMMON
NAME AND ADDRESS SHARES OWNED STOCK
- ------------------------------------- ------------ -----------
AXA Financial Inc. 52,643,200(1) 14.3%
1290 Avenue of the Americas
New York, New York 10104
Barrow, Hanley, Mewhinney & 30,772,714(2) 8.3%
Strauss, Inc.
One McKinney Plaza
3232 McKinney Avenue, 15th Floor
Dallas, Texas 75024-2429.
Dodge & Cox 18,722,309(3) 5.1%
One Sansome Street, 35th Floor
San Francisco, California 94104
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(1) Pursuant to the Schedule 13G filed as of February 12, 2001, with the
Securities and Exchange Commission ("SEC"), AXA Financial, Inc. and the group of
companies identified therein, have sole voting power for 26,320,812 shares,
shared voting power for 6,641,196, sole investment power for 52,632,000 of the
shares, and shared investment power for 11,200 shares. In October 2000, AXA
Financial Inc., through its subsidiary Alliance Capital Management L.P.,
acquired beneficial ownership of the shares that were formerly owned by Sanford
C. Bernstein & Co.
(2) Pursuant to the Schedule 13G filed as of February 12, 2001, with the
SEC, Barrow, Hanley, Mewhinney & Strauss, Inc. has sole voting power for
7,366,250 shares, shared voting power for 23,406,464 shares and sole investment
power for all of the shares. Occidental has been advised that 20,333,900 of the
shares (5.1% of the class) are held by Barrow, Hanley as manager of Vanguard
Windsor Funds - Vanguard Windsor II Fund.
(3) Pursuant to the Schedule 13G filed with the SEC as of February 14,
2001, Dodge & Cox has sole voting power for 17,467,909 shares and sole
investment power for all of the shares.
The following table sets forth certain information regarding the beneficial
ownership of common stock as of February 28, 2001, by each of the named
executive officers, the directors of Occidental and all executive officers and
directors as a group.
- ---------------------- ---------------- ---------------
PERCENT OF
NUMBER OF SHARES OUTSTANDING
NAME OWNED(1) COMMON STOCK(2)
- ---------------------- ---------------- ---------------
Ronald W. Burkle 14,500
John S. Chalsty 8,280
Stephen I. Chazen 474,396
Donald P. de Brier 380,197
Edward P. Djerejian 5,306
John E. Feick 5,500
J. Roger Hirl 474,554
Ray R. Irani 2,542,496
Dale R. Laurance 897,841
Irvin W. Maloney 8,694
Rodolfo Segovia 6,774(3)
Aziz D. Syriani 7,650
Rosemary Tomich 10,750
- ---------------------- ---------------- ---------------
All executive officers
and directors as a
group (24 persons) 6,415,344(4) 1.7%
- ---------------------- ---------------- ---------------
(1) Does not include share units or shares acquired after December 31,
2000, under the Occidental Petroleum Corporation Savings Plan (the "Savings
Plan") or the Dividend Reinvestment Plan, respectively. Each executive officer
and director possesses sole voting and investment power with respect to the
shares listed, except for 129,178 shares held by Dr. Irani, 61,269 shares held
by Dr. Laurance, 4,930 shares held by Mr. Hirl, 72,602 shares held by Mr. Chazen
and 52,646 shares held by Mr. de Brier, for which investment power had not
vested pursuant to the Occidental Petroleum Corporation 1995 Incentive Stock
Plan and 4,500 shares held by Mr. Burkle, 3,280 shares held by Mr. Chalsty,
5,106 shares held by Mr. Djerejian, 4,500 shares held by Mr. Feick, 5,650 shares
held by Mr. Maloney, 5,576 shares held by Mr. Segovia, 6,650 shares held by Mr.
Syriani and 6,250 shares held by Miss Tomich, for which investment power has not
vested under the 1996 Restricted Stock Plan for Non-Employee Directors. Shares
shown also include the following shares subject to options exercisable on
February 28, 2001, or becoming exercisable within 60 days thereafter: Dr. Irani,
1,783,334 shares; Dr. Laurance, 626,667 shares; Mr. Hirl, 420,001 shares; Mr.
Chazen, 373,334 shares and Mr. de Brier, 310,001 shares.
(2) Less than one percent for each person listed.
(3) Holdings include 5,000 shares held by Mr. Segovia as trustee for the
benefit of his children.
(4) Holdings include 3,513,337 shares that certain executive officers and
directors could acquire upon the exercise of options exercisable on February 28,
2001, or becoming exercisable within 60 days thereafter, as well as 320,625
shares issued pursuant to the 1995 Incentive Stock Plan for which investment
power had not vested.
7
EXECUTIVE COMPENSATION
o o o
COMPENSATION TABLES
Set forth below are tables showing: (1) in summary form, the compensation
paid, for the years shown in the table, to Dr. Irani and the four other
highest-paid executive officers of Occidental serving as executive officers on
December 31, 2000; (2) the options and stock appreciation rights granted to such
executives in 2000; (3) exercise and year-end value information pertaining to
stock options and stock appreciation rights granted to such executives; and (4)
long-term incentive plan awards granted and paid to such executives with respect
to their performance through 2000.
SUMMARY COMPENSATION TABLE
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Annual Compensation Long-Term Compensation
-------------------------------------- ---------------------------------------
Awards Payouts
-------------------------- ----------
Other Restricted Securities
Annual(1) Stock Underlying LTIP All Other
Name and Salary Bonus Compensation Award(s)(2) Options/SARs Payouts(3) Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
- -------------------- ---- ---------- ---------- ------------ ----------- ------------ ---------- ------------
Ray R. Irani, 2000 $1,250,000 $2,125,000 $ 202,575(4) $ 596,000 750,000 $ 0 $ 332,250(5)
Chairman and Chief 1999 $1,200,000 $1,620,000 $ 636,800(4) $ 2,057,998 800,000 $ 0 $ 389,634(5)
Executive Officer 1998 $1,200,000 $ 0 $ 0 $ 479,992 325,000 $ 0 $ 307,212(5)
Dale R. Laurance, 2000 $ 990,000 $1,386,000 $ 94,844(6) $ 199,660 375,000 $ 451,268 $ 246,964(7)
President 1999 $ 950,000 $1,026,000 $ 88,868(6) $ 1,045,994 430,000 $ 331,836 $ 253,878(7)
1998 $ 950,000 $ 0 $ 71,146(6) $ 237,490 150,000 $ 0 $ 217,383(7)
J. Roger Hirl, 2000 $ 640,000 $ 250,000 $ 90,198(8) $ 95,956 200,000 $ 216,868 $ 159,966(9)
Executive Vice 1999 $ 615,000 $ 316,000 $ 91,160(8) $ 0 265,000 $ 204,010 $ 141,670(9)
President 1998 $ 615,000 $ 0 $ 91,047(8) $ 106,199 100,000 $ 0 $ 103,286(9)
Stephen I. Chazen, 2000 $ 572,000 $ 687,000 $ 0 $ 939,535 500,000 $ 145,864 $ 149,272(10)
EVP and Chief 1999 $ 520,000 $ 468,000 $ 0 $ 499,998 290,000 $ 136,627 $ 118,706(10)
Financial Officer 1998 $ 520,000 $ 0 $ 0 $ 86,413 100,000 $ 0 $ 82,380(10)
Donald P. de Brier 2000 $ 530,000 $ 530,000 $ 0 $ 78,124 175,000 $ 176,564 $ 88,560(11)
EVP, General Counsel 1999 $ 500,000 $ 450,000 $ 0 $ 999,996 220,000 $ 164,696 $ 79,635(11)
and Secretary 1998 $ 500,000 $ 0 $ 0 $ 86,413 80,000 $ 0 $ 79,079(11)
- -------------------- ---- ---------- ---------- ------------ ----------- ------------ ---------- ------------
(1) "0" indicates that, for the year indicated, the executive officer
listed did not receive perquisites or other personal benefits, securities or
property that exceeded the lesser of $50,000 or 10 percent of the salary and
bonus for such officer.
(2) Includes awards made in February 2001 to each of the executive officers
listed pursuant to the Occidental Petroleum Corporation 1995 Incentive Stock
Plan, subject to a three year restricted period and an award in April 2000 to
Mr. Chazen which is subject to a four year restricted period. As of December 31,
2000, Dr. Irani held 235,889 shares of restricted stock, having a value of
$5,720,708; Dr. Laurance 68,276 shares, having a value of $1,165,693; Mr. Hirl
7,974 shares, having a value of $193,370; Mr. Chazen 89,560 shares, having a
value of $2,171,630; and Mr. de Brier 55,122 shares, having a value of
$1,336,709.
(3) The payout was determined based on a peer company comparison of total
stockholder return. See "Report of the Compensation Committee" at page 13 for
information concerning the modification of the awards to adjust for peer group
companies that have merged or ceased to exist during the Performance Period. "0"
indicates that the executive officer listed did not receive an award and
therefore was not eligible for a payout.
(4) Includes for 2000 and 1999, respectively, unless otherwise noted:
$25,000 and $54,882 for club dues; $177,575 and $95,000 for tax preparation
services and $486,918 of reimbursements (1999 only), pursuant to Dr. Irani's
employment agreement prior to its 1997 amendment, for state income tax
expenditures for periods prior to 1997.
(5) Includes for 2000, 1999 and 1998, respectively, unless otherwise noted:
$13,144, $122,472 and $123,065 of director's fees paid by an equity investee of
Occidental; $8,925, $7,200 and $7,200 credited pursuant to the Occidental
Petroleum Corporation Savings Plan (the "Savings Plan"); $10,875, $13,200 and
$13,200 credited pursuant to the Occidental Petroleum Corporation Retirement
Plan (the "Retirement Plan"), a tax-qualified, defined contribution plan that
provides retirement benefits for salaried employees of Occidental and certain of
its subsidiaries; $143,170, $133,785 and $133,680 credited pursuant to the
Occidental Petroleum Corporation Supplemental Retirement Plan (the "Supplemental
Retirement Plan"), a nonqualified plan that was established to provide
designated senior executives of Occidental and its subsidiaries with benefits
that will compensate them for certain limitations imposed by federal law on
contributions that may be made pursuant to the Retirement Plan and Savings Plan;
and $156,136, $112,977 and $30,067 of accrued interest on deferred compensation.
8
(6) Includes for 2000, 1999 and 1998, respectively, unless otherwise noted,
$31,388, $34,999 and $11,001 for club membership and dues; $43,162; $48,795 and
$59,145 for personal use of company aircraft; and $20,294, $5,074 and $1,000 for
tax preparation services.
(7) Includes for 2000, 1999 and 1998, respectively, unless otherwise noted:
$17,288, $67,872 and $58,956 of director's fees paid by an equity investee of
Occidental; $8,925, $7,200 and $7,200 credited pursuant to the Savings Plan;
$10,875, $13,200 and $13,200 credited pursuant to the Retirement Plan; $149,317,
$134,497 and $132,930 credited pursuant to Supplemental Retirement Plan;
$60,559, $31,109 and $5,097 of accrued interest on deferred compensation.
(8) Includes for 2000, 1999 and 1998, respectively, unless otherwise noted:
$56,479, $48,011 and $53,077 for personal use of company aircraft; $3,300,
$3,300 and $10,251 for tax and financial planning services; $27,975, $36,360 and
$25,434 for club dues and; $2,444, $3,489 and $2,285 for automobile maintenance.
(9) Includes for 2000, 1999, and 1998, respectively, unless otherwise
noted: $8,925, $7,200 and $7,200 credited pursuant to the Savings Plan; $10,875,
$11,600 and $11,600 credited pursuant to the Retirement Plan; $88,024, $80,068
and $79,255 credited pursuant to the Supplemental Retirement Plan; and $52,142
$42,802 and $5,231 of accrued interest on deferred compensation.
(10) Includes for 2000, 1999 and 1998, respectively, unless otherwise
noted: $8,925, $7,200 and $7,200 credited pursuant to the Savings Plan; $10,875,
$13,200 and $13,200 credited pursuant to the Retirement Plan; $76,115, $62,580
and $61,980 credited pursuant to the Supplemental Retirement Plan; and $53,357,
and 35,726 of accrued interest on deferred compensation (2000 and 1999 only).
(11) Includes for 2000, 1999 and 1998 respectively, unless otherwise noted:
$8,925; $7,200 and $7,200 credited pursuant to the Savings Plan; $10,875,
$13,200 and $13,200 credited pursuant to the Retirement Plan; and $68,760,
$59,235 and $58,679 credited pursuant to the Supplemental Retirement Plan.
OPTION/SAR GRANTS IN 2000
- ------------------------------------------------------------------------------------------------------------------
Number Percent of Potential Realizable Value
of Securities Total at Assumed Annual Rates
Underlying Options/SARs of Stock Price Appreciation
Options/SARs Granted to Exercise or for Option Term(4)
Granted(1) Employees in Base Price(2) Expiration ---------------------------
Name (#) 2000 ($/Share) Date(3) 5% 10%
- ------------------ ------------- ------------ ------------- ---------- ----------- ------------
Ray R. Irani 4,980 0.09% $20.0625 07/19/10 $ 62,834 $ 159,233
745,020 13.36% $20.0625 07/19/10 $ 9,400,065 $ 23,821,611
Dale R. Laurance 4,980 0.09% $20.0625 07/19/10 $ 62,834 $ 159,233
370,020 6.63% $20.0625 07/19/10 $ 4,668,616 $ 11,831,189
J. Roger Hirl 4,980 0.09% $20.0625 07/19/10 $ 62,834 $ 159,233
195,020 3.50% $20.0625 07/19/10 $ 2,460,606 $ 6,235,659
Stephen I. Chazen 250,000 4.48% $21.8750 05/01/10 $ 3,439,267 $ 8,715,779
4,980 0.09% $20.0625 07/19/10 $ 62,834 $ 159,233
245,020 4.39% $20.0625 07/19/10 $ 3,091,466 $ 7,834,382
Donald P. de Brier 4,980 0.09% $20.0625 07/19/10 $ 62,834 $ 159,233
170,020 3.05% $20.0625 07/19/10 $ 2,145,176 $ 5,436,297
- ------------------ ------------- ------------ ------------- ---------- ----------- ------------
(1) In May 2000, Mr. Chazen received a grant of non-qualified stock options
("NQSs") and, in July 2000, each of the named executive officers received a
simultaneous grant of Incentive Stock Options ("ISOs") and NQSOs. The ISOs are
listed first in the foregoing table and the NQSOs are listed second, except Mr.
Chazen's ISO's are listed second. The ISOs and NQSOs were granted subject to a
three-year vesting period, with approximately one-third of the options granted
becoming exercisable each year commencing on the first anniversary of the grant
date and ending on the third anniversary. The vesting and exercisability of the
options will be accelerated in the event of a Change of Control (as defined in
the 1995 Incentive Stock Plan). No stock appreciation rights were granted in
2000.
(2) Options are granted at market price on the day of the grant. The
exercise price and tax withholding obligations related to exercise may be paid
by delivery of already owned shares or by offset of the underlying shares,
subject to certain conditions.
(3) The options were granted for terms of 10 years, in each case subject to
earlier termination upon the termination of an optionee's employment; after
which termination, the options that have vested remain exercisable (depending on
the cause of termination) for a period of up to the remaining term of each
option in the case of ISOs and NQSOs. However, under the provisions of his
respective employment agreements the options granted to Dr. Irani become fully
vested immediately in the event of termination by Occidental or his retirement
and are then exercisable for the remaining term of the option. Under the terms
of his employment agreement, the options granted to Dr. Laurance become fully
vested immediately in the event of termination by Occidental and are exercisable
for the remaining term of the option. Under the terms of their respective
employment agreements, the options granted to Messrs. Hirl, Chazen and de Brier
continue to vest and are exercisable for the remaining term of the agreement.
See "Employment Agreements" below.
9
(4) The dollar amounts in these columns are the result of calculations at
the 5% and 10% annual appreciation rates for the term of the options (10 years)
as required by the Securities and Exchange Commission, and therefore are not
intended to predict future appreciation, if any, in the price of Occidental
common stock.
AGGREGATED OPTIONS/SAR EXERCISES IN 2000
AND DECEMBER 31, 2000 OPTION/SAR VALUES
- ----------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Shares Options/SARs at 12/31/00 at 12/31/00(2)
Acquired Value ---------------------------- ----------------------------
on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
- ------------------ ----------- ----------- ----------- ------------- ----------- -------------
Ray R. Irani 0 $0 1,683,334 2,191,666 4,618,751 6,265,614
Dale R. Laurance 0 $0 583,334 1,361,666 1,347,506 3,132,806
J. Roger Hirl 0 $0 390,001 734,999 916,878 1,837,498
Stephen I. Chazen 0 $0 343,334 1,051,666 890,001 2,703,124
Donald P. de Brier 0 $0 286,668 598,332 615,006 1,545,306
- ------------------ ----------- ----------- ----------- ------------- ----------- -------------
(1) Represents the difference between the closing price of the common stock
on the New York Stock Exchange on the exercise date and the option exercise
price.
(2) The value of unexercised in-the-money options is calculated by
multiplying the number of underlying shares by the difference between the
closing price of the common stock on the New York Stock Exchange at 12/31/00 and
the option exercise price.
LONG-TERM INCENTIVE PLAN -- AWARDS IN 2000(1)
- -------------------------------------------------------------------------------------------------------------------
Estimated Future Payouts Under
Number of Shares, Performance or Non-Stock Price-Based Plans
Units or Other Period -------------------------------------------------
Other Rights Until Maturation Threshold Target Maximum
Name (#) or Payout (# of shares) (# of shares) (# of shares)
- ------------------ ----------------- ---------------- ------------- ------------- -------------
Ray R. Irani 84,680 4 years(2) 0 84,680 169,360
Dale R. Laurance 47,908 4 years(3) 0 47,908 95,816
J. Roger Hirl 20,717 4 years(4) 0 20,717 41,434
Stephen I. Chazen 18,516 4 years(4) 0 18,516 37,032
Donald P. de Brier 17,156 4 years(4) 0 17,156 34,312
- ------------------ ----------------- ---------------- ------------- ------------- -------------
(1) Performance Stock Awards were made in January 2000 pursuant to the 1995
Incentive Stock Plan. The number of shares received at the end of the
performance period will depend on the attainment of performance objectives based
on a peer company comparison of total stockholder return. Depending on
Occidental's ranking among its peers and subject to the grantee remaining
employed throughout the performance period, the grantee receives shares of
common stock in an amount ranging from 0% to 200% of the Target Share Award;
provided, however, if the grantee dies, becomes disabled, retires or is
terminated for the convenience of the company during the performance period,
then the grantee will forfeit the right to receive a pro rata portion of the pay
out based on the days remaining in the performance period after such event.
During the performance period, dividend equivalents are credited on the Target
Shares in an amount equal to the per share dividend declared per share of common
stock and cash equal to the dividend equivalent is paid to the grantees. In the
event of a Change of Control (as defined in the 1995 Incentive Stock Plan), the
grantee's right to receive the number of Target Shares becomes nonforfeitable.
(2) Under the terms of his employment agreement, any long-term incentive
awards granted to Dr. Irani become fully vested immediately in the event of
termination by Occidental or his retirement. See "Employment Agreements" below.
(3) Under the terms of his employment agreement, any long-term incentive
awards granted to Dr. Laurance become fully vested immediately in the event of
termination by Occidental. See "Employment Agreements" below.
(4) Under the terms of their respective employment agreements, the
performance period for the entire award granted to Messrs. Hirl, Chazen and de
Brier continues in the event of termination without cause for the remaining term
of the agreement. See "Employment Agreements" below.
10
EMPLOYMENT AGREEMENTS
- --------------------------------------------------------------------------------
The following are summaries of the employment agreements between Occidental
and the executive officers named in the Compensation Tables. Copies of the
agreements are available as exhibits to Occidental's periodic reports filed with
the Securities and Exchange Commission.
DR. IRANI
On November 17, 2000, Dr. Irani entered into an amended and restated
employment agreement with Occidental. The agreement, as amended, is for a term
expiring on the earlier of Occidental's 2007 Annual Meeting of Stockholders or
May 30, 2007 with an annual salary at a minimum rate of $1,250,000, subject to
annual increase (and, as part of across-the-board reductions for other officers,
decrease) at the reasonable discretion of the Board of Directors and the
Compensation Committee. In addition, Dr. Irani is eligible for a discretionary
annual cash bonus and to participate in Occidental's qualified and nonqualified
retirement plans, its incentive stock plan, deferred compensation plan and any
future performance plans adopted by Occidental as well as any group life
insurance, medical care (including coverage for his wife and children),
disability and other plans or benefits which Occidental may provide for him.
Prior to his retirement, Dr. Irani will receive life insurance at least equal to
three times his highest career annual salary, which life insurance shall be
assignable at Dr. Irani's option. During the term of his employment, Dr. Irani
will receive six weeks paid vacation each calendar year (which will accrue and
for which he will be entitled to be paid for any accrued but unused vacation
time upon termination of the agreement) and the minimum perquisites to which he
was entitled prior to the effective date of his agreement. See also footnote (4)
to the Compensation Table on page 8.
Following his retirement or upon the termination of his employment by
Occidental, Dr. Irani will continue to receive life insurance equal to twice his
highest career annual salary, medical benefits and the personal tax, accounting
and financial planning services currently provided to him. Upon retirement,
notwithstanding the provisions of the award agreements, all of Dr. Irani's
unvested stock options and restricted stock awards will immediately vest and his
performance stock awards will become immediately vested and fully payable. If
the agreement is terminated due to Dr. Irani's death, Dr. Irani's estate will be
entitled to a pro-rata portion of any bonus he was eligible to receive for the
year of his death. If Dr. Irani is married at the time of his death, his wife
will be entitled, for the remainder of her life, to continuation of medical
benefits throughout her life. If Dr. Irani is terminated by Occidental for any
reason, or if Dr. Irani terminates employment because Occidental materially
breaches the agreement, Dr. Irani is entitled to receive three times his highest
annual salary and bonus for any calendar year commencing with January 1, 2000
(subject to certain offsets of disability benefits in the case of termination
due to disability), without obligation to mitigate, payable, at Dr. Irani's
option, in equal monthly installments over three years or in an undiscounted
lump sum. In such event of termination, Dr. Irani is also entitled to receive
his medical, welfare and life insurance benefits; and if such termination is not
due to death or disability, his existing perquisites and the full and immediate
vesting of his restricted stock, stock options and any other long-term incentive
benefits; provided that the options or stock appreciation rights shall be
exercisable as if he had retired on such date and that nothing in his employment
agreement affects his existing grant agreements. If after termination of his
employment Dr. Irani is not eligible to participate in Occidental's benefit
plans as contemplated by his employment agreement, then Occidental will provide
Dr. Irani with substantially equivalent benefits and will reimburse him for any
additional tax liabilities incurred by him as a result of his receipt of such
benefits.
If Occidental materially breaches the agreement and does not cure the
breach after notice thereof, Dr. Irani may terminate his employment and treat
such occurrence as if it were a termination by Occidental; provided that it
shall not be a material breach if, following the merger or sale of Occidental or
substantially all of its assets, Dr. Irani continues to have substantially the
same executive duties and reports to the acquirer's board of directors. The
agreement also holds Dr. Irani harmless from the effects of any excise or other
taxes payable under or as a result of Sections 280G and 4999 of the Internal
Revenue Code of 1986 or comparable state law by reason of a change of control,
including taxes payable on any amounts paid pursuant to this hold harmless
provision. During and after the term of the agreement, Dr. Irani is entitled to
the payment of all legal fees other than those of a purely personal nature. In
addition, the agreement provides for additional indemnification for Dr. Irani to
the fullest extent permitted by applicable law and for Occidental to maintain
Directors' and Officers' liability insurance with policy limits aggregating not
less than $100 million, insuring Dr. Irani against occurrences which occur
during the term of the agreement.
DR. LAURANCE
On November 17, 2000, Dr. Laurance entered into an amended and restated
employment agreement with Occidental. The agreement, as amended, is for a
five-year term with an annual salary at a minimum rate of $990,000, subject to
annual increase (and, as part of across-the-board reductions for other officers,
decrease) at the reasonable discretion of the Board of Directors and the
Compensation Committee. In addition, Dr. Laurance is eligible for a
discretionary annual cash bonus and to
11
participate in Occidental's qualified and nonqualified retirement plans, its
incentive stock plan, deferred compensation plan and any future performance
plans adopted by Occidental as well as any group life insurance, medical care
(including coverage for his wife and children), disability and other plans or
benefits which Occidental may provide for him. Prior to his retirement, Dr.
Laurance will receive life insurance at least equal to three times his highest
career annual salary, which insurance shall be assignable at Dr. Laurance's
option. During the term of his employment, Dr. Laurance will receive the minimum
perquisites to which he was entitled prior to the effective date of his
agreement. See also footnote (6) to the Compensation Table on page 8.
Following his retirement or upon the termination of his employment by
Occidental, Dr. Laurance will continue to receive life insurance equal to twice
his highest career annual salary, medical benefits no less favorable than those
provided to Dr. Laurance prior to such retirement or termination, and the
personal tax, accounting and financial planning services he currently receives.
If the Agreement terminates due to Dr. Laurance's death, Dr. Laurance's estate
will be entitled to a pro-rata portion of any bonus he was entitled to have
received for the year of his death. If Dr. Laurance is married at the time of
his death, his wife will be entitled, for the remainder of her life, to
continuation of medical benefits throughout her life. If Dr. Laurance is
terminated by Occidental for any reason, or if Dr. Laurance terminates
employment because Occidental materially breaches the agreement, Dr. Laurance is
entitled to receive three times his highest annual salary and bonus for any
calendar year commencing with January 1, 2000 (subject to certain offsets of
disability benefits in the case of termination due to disability) without
obligation to mitigate, payable, at Dr. Laurance's option, in equal monthly
installments over three years or in an undiscounted lump sum. In such event of
termination, Dr. Laurance is also entitled to receive his medical, welfare and
life insurance benefits; and if such termination is not due to death or
disability, the full and immediate vesting of his restricted stock, stock
options and any other long-term incentive benefits; provided that the options or
stock appreciation rights shall be exercisable as if he had retired on such date
and that nothing in his employment agreement affects his existing grant
agreements. If after termination of his employment Dr. Laurance is not eligible
to participate in Occidental's benefit plans as contemplated by his employment
agreement, then Occidental will provide Dr. Laurance with substantially
equivalent benefits and will reimburse him for any additional tax liabilities
incurred by him as a result of his receipt of such benefits.
If Occidental materially breaches the agreement and does not cure the
breach after notice thereof, Dr. Laurance may terminate his employment and treat
such occurrence as if it were a termination by Occidental; provided that it
shall not be a material breach if, following the merger or sale of Occidental or
substantially all of its assets, Dr. Laurance continues to have substantially
the same executive duties and reporting relationships. The agreement also holds
Dr. Laurance harmless from the effects of any excise or other taxes payable
under or as a result of Sections 280G and 4999 of the Internal Revenue Code of
1986 or comparable state law by reason of a change of control, including taxes
payable on any amounts paid pursuant to this hold harmless provision. During and
after the term of the agreement, Dr. Laurance is entitled to the payment of all
legal fees other than those of a purely personal nature. In addition, the
agreement provides for additional indemnification for Dr. Laurance to the
fullest extent permitted by applicable law and for Occidental to maintain
Directors' and Officers' liability insurance with policy limits aggregating not
less than $100 million, insuring Dr. Laurance against occurrences which occur
during the term of the agreement.
MR. HIRL
Mr. Hirl has an employment agreement with Occidental for a term expiring in
May 2002, providing for an annual salary of not less than $640,000. If Mr.
Hirl's employment is terminated as a result of incapacity and he is a
participant in and qualifies for benefits under Occidental's Long-Term
Disability Plan, Occidental will pay Mr. Hirl the difference between 60 percent
of his annual salary and the maximum annual disability benefit, for so long as
he remains eligible to receive disability benefits. In the event he is
terminated without cause, Mr. Hirl will receive his then current base salary
rate for a compensation period equal to the shorter of two years or the
remaining term of his agreement with Occidental. During the compensation period,
Mr. Hirl will continue to be eligible to participate in all employee benefit
plans available to salaried employees and senior executives and to exercise
options previously granted him that are or become exercisable. Following the
compensation period, Mr. Hirl will continue as a consultant to Occidental until
May 2002, at an annual salary of $50,000. During the compensation period and any
consulting period, any stock awards granted prior to Mr. Hirl's termination will
continue to vest in the same manner and in the same amounts as if he continued
as a full-time employee.
MR. CHAZEN
Mr. Chazen has an employment agreement with Occidental for a term expiring
in October 2005, providing for an annual salary of not less than $572,000. If
Mr. Chazen's employment is terminated as a result of incapacity and he is a
participant in and qualifies for benefits under Occidental's Long-Term
Disability Plan, Occidental will pay Mr. Chazen the difference between 60
percent of his annual salary and the maximum annual
12
disability benefit, for so long as he remains eligible to receive disability
benefits. In the event he is terminated without cause, Mr. Chazen will receive
an amount equal to twice the sum of his highest base salary and annual cash
bonus target, which amount is payable over a two-year compensation period.
During the compensation period, Mr. Chazen will continue to be eligible to
participate in all employee benefit plans available to salaried employees and
senior executives and to exercise options previously granted him that are or
become exercisable. Following the compensation period, Mr. Chazen will continue
as a consultant to Occidental until October 2003, at an annual salary of
$50,000. During the compensation period and any consultancy period, any stock
awards granted prior to Mr. Chazen's termination will continue to vest in the
same manner and in the same amounts as if he continued as a full-time employee.
Mr. Chazen may terminate the agreement at any time upon 60 days prior written
notice.
MR. DE BRIER
Mr. de Brier has an employment agreement with Occidental for a term
expiring in May 2003, providing for an annual salary of not less than $530,000.
If Mr. de Brier's employment is terminated as a result of incapacity and he is a
participant in and qualifies for benefits under Occidental's Long-Term
Disability Plan, Occidental will pay Mr. de Brier the difference between 60
percent of his annual salary and the maximum annual disability benefit, for so
long as he remains eligible to receive disability benefits. In the event he is
terminated without cause, Mr. de Brier will receive an amount equal to twice the
sum of his highest base salary and annual cash bonus target, which amount is
payable in equal monthly installments over a two year compensation period.
During the compensation period, Mr. de Brier will continue to be eligible to
participate in all employee benefit plans available to salaried employees and
senior executives and to exercise options previously granted him that are or
become exercisable. During the compensation period, any stock awards granted
prior to Mr. de Brier's termination will continue to vest in the same manner and
in the same amounts as if he continued as a full-time employee.
REPORT OF THE COMPENSATION COMMITTEE
- --------------------------------------------------------------------------------
The Compensation Committee of the Board of Directors is responsible for
Occidental's executive compensation programs. The Committee is selected from
members of the Board of Directors who are Independent Directors as defined under
Occidental's Corporate Governance Policies. This report is provided by the
Committee to assist stockholders in understanding the philosophy and objectives
underlying the compensation of Occidental's senior executives.
PHILOSOPHY
Occidental's executive compensation programs are designed to attract and
retain top quality executive talent and also to provide incentives for them to
enhance stockholder value. The Compensation Committee is guided by the following
principles that are included in Occidental's Corporate Governance Policies:
o Compensation arrangements shall focus on pay for performance to
encourage the retention of employees who make significant
contributions to Occidental's performance;
o Compensation arrangements shall encourage executive stock ownership to
align the interests of management and stockholders;
o Compensation arrangements shall maintain an appropriate balance
between base salary and annual and long-term incentive opportunities;
o Decisions concerning the compensation of individual executives shall
take into consideration compensation history, including any special
compensation payments.
o The Compensation Committee shall link pay to the achievement of
financial goals set in advance for any senior management cash
incentive compensation plans;
o The Compensation Committee shall set annual and long-term performance
goals for the Chairman of the Board and Chief Executive Officer and
evaluate his performance against such goals and the performance of
Occidental's peer companies; and
o The Compensation Committee shall hold an executive session at least
once a year at which employee directors are not present.
Occidental is committed to the principle of pay-for-performance. The
compensation programs described below link executive compensation to business
performance that in turn enhances stockholder value.
EXECUTIVE COMPENSATION PROGRAMS
Occidental's executive compensation programs are composed of three main
elements:
o Base salary
o Annual cash incentives
o Long-term incentives
13
Base salary and annual cash incentives are designed to attract and retain
top quality executives and to recognize individual performance and the
achievement of business objectives each year. The value of long-term incentives
is directly linked to the performance of the common stock and, therefore, to
total stockholder return. Long-term incentives have been granted in the form of
stock options, performance stock and restricted stock.
In evaluating Occidental's executive compensation programs, the
Compensation Committee solicits the services of outside compensation consultants
and Occidental's compensation staff regarding plan design and industry pay
practices. Occidental participates in several compensation surveys each year
that are conducted by third-party compensation consulting firms. A number of
these surveys are focused primarily on major U.S. oil and chemical companies
(including companies within the peer groups selected for the graph presented
under the subheading "Performance Graphs").
CASH COMPENSATION
In determining base salary levels, Occidental maintains an administrative
framework of job levels into which positions are assigned based on internal
comparability and external market data. Base salaries and the other components
of compensation are reviewed annually and adjusted as appropriate to reward
performance and maintain our competitive position.
Since 1995, cash incentive awards have been granted under the Occidental
Petroleum Corporation Executive Incentive Compensation Plan. Participation is
determined by job level and is intended to reward individuals who have a
significant impact on business performance. Under the Executive Incentive
Compensation Plan, 60 percent of a participant's award is based on the
attainment of predetermined financial objectives by Occidental and its
subsidiaries and 40 percent is based on a subjective assessment of the
participant's achievement of predetermined individual performance objectives and
the participant's response to unanticipated challenges during the plan year.
LONG-TERM INCENTIVES
The Compensation Committee grants long-term incentive awards, generally in
the form of stock options, restricted stock or performance stock grants, based
on its assessment of an executive's potential to influence Occidental's future
performance. The Committee believes that long-term awards should create a
long-term incentive to increase stockholder value and provide a retention
vehicle for key executives. The Committee also believes that such stock-based
compensation encourages executives to view Occidental from the stockholders'
perspective. For a summary of the type of awards that will be available for
grant by the Compensation Committee if the 2001 Incentive Compensation Plan is
approved by the Stockholders, see the description of that plan beginning at page
17.
EMPLOYMENT AGREEMENTS
Occidental offers employment agreements to key executives only when it is
in the best interest of Occidental and its stockholders to attract and retain
such key executives and to ensure continuity and stability of management. In
accordance with a policy adopted by the Board of Directors in September 1992, no
employment agreements with new executives will contain provisions, commonly
referred to as "golden parachutes," that provide for additional severance
benefits in the event of a change in control. For a summary of the employment
agreements for the named executive officers, see "Employment Agreements" at page
11.
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code limits the deduction of
compensation paid to the chief executive officer and other named executive
officers to the extent the compensation of a particular executive exceeds $1
million, unless such compensation is based upon stock price appreciation over
market value at the date of grant (in the case of stock options) or
predetermined quantifiable performance goals (in the case of other incentive
compensation) or paid pursuant to a written contract that was in effect on
February 17, 1993. Although the Compensation Committee considers the tax
consequences of its compensation decisions, it is not the policy of the
Committee to pay only deductible compensation, rather the Committee gives
priority to other objectives in circumstances it deems appropriate.
2000 COMPENSATION DECISIONS
In December 1999, the Compensation Committee approved, effective January 1,
2000, industry competitive salary increases for the named executive officers to
reflect the improvement in Occidental's business results during the last half of
1999. Dr. Irani received an approximately 4% salary increase. The Committee also
increased bonus targets, one of the factors used to compute bonuses, during 2000
for some of the named executive officers to reflect competitive practice for
senior executive officers in peer companies in the oil and chemical industries.
Dr. Irani's bonus target was increased from 75% to 85%.
Also in December 1999, the Committee granted, effective January 1, 2000,
performance stock awards under the 1995 Incentive Stock Plan. In granting awards
to the named executives, the Committee considered
14
historical competitive practices among peer companies in the oil industry and
each executive's potential to affect Occidental's future performance. The
performance stock award for Dr. Irani, in the amount of 84,680 shares, is
consistent with awards to similarly compensated executive officers of peer
companies in the oil industry.
In February 2000, the Compensation Committee established primary
performance goals for Dr. Irani for 2000. The goals included key financial
objectives, the enhancement of the long-term value of Occidental's portfolio of
assets, the improvement of earnings through on-going cost reduction and asset
restructuring, and the maintenance of a high performing organization through
continued emphasis on corporate-wide leadership training and enhanced
communications.
In April 2000, the Committee granted a special award of stock options and
restricted stock to Mr. Chazen in recognition of his role in completing the
successful acquisition of Altura Energy. The Committee also authorized
executives to defer the receipt of restricted stock awards and performance stock
awards prior to vesting. In addition, the Committee reviewed the arrangements
for providing financial counseling, accounting and tax preparation services for
some executive officers and agreed that for the next year, aggregate fees for
such services for Dr. Irani and Dr. Laurance should not exceed a specified
maximum.
In July 2000, the Compensation Committee reviewed and approved the annual
stock option grants under the 1995 Incentive Stock Plan. Grants were based on
competitive practices in the oil and chemical industries, as well as a
subjective assessment of each executive's individual performance and potential
to contribute to Occidental's future performance. The Committee approved a grant
of non-qualified and qualified stock options to Dr. Irani in the amount of
750,000 shares based on the average value of stock option grants to other chief
executive officers of peer companies in the oil and chemical industries.
In September 2000, the Committee reviewed plans to conduct a study of
employment contracts. In October 2000, the Committee reviewed amendments to the
employment contracts for Dr. Irani and Dr. Laurance. In November 2000, based
upon the recommendation of the Compensation Committee, as well as the
recommendation of the Nominating and Corporate Governance Committee, the Board
of Directors approved the amendment and restatement of the contracts for Dr.
Irani and Dr. Laurance to, among other things, adjust the termination
provisions, extend the term and clarify ambiguities. A summary of the employment
contracts is set forth on page 11.
In December 2000, the Compensation Committee and the Lead Independent
Director reviewed Dr. Irani's performance goals and objectives for 2000 and
noted Dr. Irani's significant accomplishments during 2000 in improving corporate
earnings, reducing debt and overhead costs, and expanding leadership training
throughout the organization.
In February 2001, the Committee reviewed annual bonus awards for 2000. As
described above, awards under the Executive Incentive Compensation Plan to the
named executive officers, including Dr. Irani, are based on the achievement of
predetermined financial goals (60%), including earnings per share, and the
achievement of predetermined individual goals (40%). Because of the achievement
in 2000 of the Company's financial goals and his individual goals as noted
above, Dr. Irani received a cash bonus award of $2,125,000.
In February 2001, the Committee also certified the payouts to be made under
the 1995 Incentive Stock Plan for performance stock awards granted in January
1997, for which the performance period ended December 31, 2000. In certifying
the awards, the Compensation Committee modified the awards to adjust for the
fact that certain of the peer group companies listed in the award agreements had
merged or ceased to exist by the end of the performance period. The awards to
"covered employees" are reflected in the Summary Compensation Table on page 8.
Dr. Irani did not receive a performance stock award in January 1997 and
therefore was not considered in the Committee's decision.
In February 2001, the Committee also made awards of restricted stock under
the 1995 Incentive Stock Plan to each of the named executive officers. The
awards were granted in recognition of Occidental's exceptional performance in
2000. Dr. Irani received an award of 25,000 shares.
Respectfully submitted,
COMPENSATION COMMITTEE
Irvin W. Maloney (chairman)
Ronald W. Burkle
John S. Chalsty
Rosemary Tomich
15
PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The following graph compares the yearly percentage change in the cumulative
total return of the common stock with the cumulative total return of the
Standard & Poor's 500 Stock Index and with that of the original peer group and
the revised peer group over the five-year period ending on December 31, 2000.
The graph assumes that $100 was invested in Occidental common stock, in the
stock of the companies in the Standard & Poor's 500 Index and in the stocks of
the peer group companies just prior to the commencement of the period (December
31, 1995) and that all dividends received within a quarter were reinvested in
that quarter. The original peer group companies are Anadarko Petroleum
Corporation, Burlington Resources Inc., Georgia Gulf Corporation, Kerr-McGee
Corporation, Lyondell Petrochemical Company, Occidental, Phillips Petroleum
Corporation, Union Carbide Corporation, and Unocal Corporation. The revised peer
group companies are Anadarko Petroleum Corporation, Burlington Resources Inc.,
Conoco Inc., Georgia Gulf Corporation, Kerr-McGee Corporation, Lyondell
Petrochemical Corporation, Occidental, Phillips Petroleum Corporation and Unocal
Corporation. Occidental revised the peer group to substitute Conoco Inc. for
Union Carbide Corporation which is in the process of being acquired by Dow
Chemical Co. In addition, Union Pacific Resources was eliminated from the
original peer group because of its merger in July 2000 with Anadarko Petroleum
Corporation.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
OF OCCIDENTAL COMMON STOCK, THE S&P 500 INDEX AND SELECTED PEER GROUPS
(The table below is a tabular representation of graphic materials)
Year Occidental Revised Peer Group Original Peer Group S&P 500
1995 100 100 100 100
1996 114 118 117 123
1997 148 125 124 164
1998 89 93 97 211
1999 120 113 121 255
2000 141 146 146 232
16
REPORT OF THE AUDIT COMMITTEE
o o o
The Audit Committee has reviewed and discussed Occidental's audited
financial statements for the fiscal year ended December 31, 2000 with
management. In addition, the Audit Committee has discussed with Arthur Andersen
LLP, Occidental's independent public accountants, the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended and as currently in effect. The Audit Committee received
from Arthur Andersen LLP written disclosures and the letter regarding its
independence as required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, as amended and as currently in
effect. The Audit Committee has also considered whether the provision of
non-audit services provided by Arthur Andersen LLP to Occidental is compatible
with maintaining their independence and has discussed with the auditors the
auditors' independence.
Based upon the reports and discussions described in this report, the Audit
Committee recommended to the Board that the audited financial statements be
included in Occidental's Annual Report on Form 10-K for the year ended December
31, 2000, to be filed with the Securities and Exchange Commission.
Respectfully submitted,
THE AUDIT COMMITTEE
Rosemary Tomich (chairman)
Irvin W. Maloney
Aziz D. Syriani
AUDIT AND OTHER FEES
o o o
AUDIT FEES
- --------------------------------------------------------------------------------
The aggregate fees incurred for professional services rendered by Arthur
Anderson LLP for the audit of Occidental's annual financial statement for the
fiscal year ended December 31, 2000 and for the reviews of the financial
statements included in Occidental's Quarterly Reports on Form 10-Q for that
fiscal year were $3,886,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION
- --------------------------------------------------------------------------------
No fees were incurred for professional services rendered by Arthur Andersen
LLP for information technology services relating to financial information system
design and implementation for the fiscal year ended December 31, 2000.
ALL OTHER FEES
- --------------------------------------------------------------------------------
The aggregate fees incurred for services rendered by Arthur Andersen LLP to
Occidental, other than the services described above under "Audit Fees" and
"Financial Information System Design and Implementation Fees", for the fiscal
year ended December 31, 2000, were $6,725,308.
RATIFICATION OF THE
SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
o o o
The Audit Committee of the Board of Directors of Occidental has selected
Arthur Andersen LLP as independent public accountants to audit the consolidated
financial statements of Occidental and its subsidiaries for the year ending
December 31, 2001. Arthur Andersen LLP has audited Occidental's financial
statements annually since 1961. A member of that firm will be present at the
annual meeting, will have an opportunity to make a statement if so desired and
will be available to respond to appropriate questions. If the stockholders do
not ratify the selection of Arthur Andersen LLP, if it should decline to act or
otherwise become incapable of acting or if its employment is discontinued, the
Audit Committee will appoint independent public accountants for 2001.
The Board of Directors recommends that you vote FOR the proposal to ratify
the selection of Arthur Andersen LLP as independent public accountants for 2001.
Your proxy will be so voted unless you specify otherwise.
APPROVAL OF THE
2001 INCENTIVE COMPENSATION PLAN
o o o
The Board of Directors of the Company believes that incentives and
stock-based awards focus employees on the objectives of creating stockholder
value and promoting the success of the Company. On February 9, 2001, the Board
adopted the Occidental Petroleum Corporation 2001 Incentive Compensation Plan
(the "2001 Plan"), subject to the receipt of stockholder approval at the Annual
Meeting. The purpose of the 2001 Plan is to enable the Company to attract and
retain top quality employees and to provide such employees with an incentive to
enhance stockholder return. The Board
17
believes that the 2001 Plan will promote the interests of the Company and its
stockholders by providing incentives based on the attainment of corporate
objectives and increases in stockholder value. By providing compensation that is
stock-based, the 2001 Plan should encourage employees to view the Company as
stockholders.
The Company currently maintains the Occidental Petroleum Corporation 1995
Incentive Stock Plan (the "1995 Plan"). The Compensation Committee of the Board
recommended adoption of the 2001 Plan to the Board (and the Board approved the
2001 Plan) based, in part, on the belief that an insufficient number of shares
remained available under the limits of the 1995 Plan to adequately provide for
future incentives. If the 2001 Plan is approved, the 1995 Plan will be
terminated with respect to any additional awards. As of February 28, 2001,
approximately 905,487 Common Shares remained available for additional awards
under the 1995 Plan.
If the stockholders approve the 2001 Plan, it will be effective on the
first day immediately following the date on which it is approved and will
continue for 10 years. The principal features of the 2001 Plan are summarized
below. The following summary is qualified in its entirety by the full text of
the 2001 Plan, a copy of which is attached as Exhibit B to this Proxy Statement.
Capitalized terms used in the summary are used as defined in the 2001 Plan.
SUMMARY DESCRIPTION OF THE 2001 PLAN
AWARDS. The 2001 Plan authorizes stock options, stock units, restricted
stock, stock bonuses, stock appreciation rights, Performance-Based Awards,
dividend equivalents, dividend rights, Common Shares, as well as other awards
(described in Section 4 of the 2001 Plan) responsive to changing developments in
management compensation. The 2001 Plan provides the flexibility to offer
competitive incentives and to tailor benefits to specific needs and
circumstances. Generally, an option or stock appreciation right will expire, or
other award will vest, not more than 10 years after the date of grant.
SHARES AVAILABLE. Under the 2001 Plan, the aggregate share limit is
17,000,000 Common Shares. A maximum of 8,500,000 Common Shares may be delivered
pursuant to all awards other than stock options. A maximum of 850,000 Common
Shares may be delivered pursuant to all awards for which payment or vesting is
not based upon the passage of time, stock price appreciation or the satisfaction
of Performance Goals. No single individual may be granted awards in the
aggregate for more than 4,000,000 shares during any three consecutive calendar
years. Awards payable only in cash and not related to shares made to any one
individual during any calendar year are limited to $10,000,000.
As is customary in incentive plans of this nature, to prevent dilution or
expansion of participants' rights, the number and kind of shares available under
the 2001 Plan and then outstanding stock-based awards, as well as exercise or
purchase prices, Performance Goals and share limits are subject to adjustment in
the event of certain reorganizations, mergers, combinations, consolidations,
recapitalizations, reclassifications, stock splits, stock dividends, asset sales
or other similar events, or extraordinary dividends or distributions of property
to stockholders.
If an award is forfeited, cancelled, does not vest or is paid in cash, any
unissued Common Shares allocated to such award, as well as any Common Shares
reacquired pursuant to the terms of an award are available for subsequent awards
under the 2001 Plan.
The Common Stock is traded on the New York Stock Exchange, and on March 2,
2001, the closing price was $24.65. Occidental intends to register the shares
issuable under the 2001 Plan under the Securities Act of 1933 after it receives
stockholder approval.
ELIGIBILITY. Persons eligible to receive awards under the 2001 Plan include
present and future officers or employees of the Company or any of its
subsidiaries. Non-employee directors are ineligible. Occidental has
approximately 8,790 employees (16 of whom are executive officers).
ADMINISTRATION. The 2001 Plan will be administered by one or more
committees appointed by the Board (the appropriate acting body is referred to as
the "Administrator"). The Company's Compensation Committee will initially
administer the 2001 Plan. The Administrator consists of at least two directors
of the Company, each of whom is a "disinterested person" within the meaning of
Rule 16b-3 under the Exchange Act and an "outside director" within the meaning
of Section 162(m) of the Code.
The Administrator determines the number of shares that are to be subject to
awards and the terms and conditions of such awards, including, subject to
certain restrictions, the price (if any) to be paid for the shares or the award.
Subject to the other provisions of the 2001 Plan, the Administrator has the
authority (a) to permit the recipient of any award to pay the purchase price of
Common Shares or the award in cash, the delivery of previously owned Common
Shares, a reduction in the number of Common Shares or other property otherwise
issuable to the participant, a cashless exercise, or the cancellation of
indebtedness or conversion of other
18
securities; (b) to accelerate the receipt or vesting of benefits pursuant to an
award; and (c) to make certain adjustments to an outstanding award and authorize
the conversion, succession or substitution of an award pursuant to Sections 3.2
of the 2001 Plan, respectively.
STOCK OPTIONS. An option is the right to purchase Common Shares at a future
date at a specified price (the "Option Price"). The Option Price per share may
be no less than the Fair Market Value of a share on the date of grant. An option
may either be an incentive stock option or a nonqualified stock option.
Incentive stock options are taxed differently from nonqualified stock options,
as described under "Federal Income Tax Consequences" below. Incentive stock
options are also subject to more restrictive terms and are limited in amount by
the Code. Full payment for shares purchased on the exercise of any option must
be made at the time of such exercise in a manner approved by the Administrator.
STOCK APPRECIATION RIGHTS. A stock appreciation right is the right to
receive payment of an amount equal to the excess of the Fair Market Value of a
Common Share on the date of exercise of the stock appreciation right over the
base price of the stock appreciation right. The base price will be established
by the Administrator at the time of grant of the stock appreciation right, but
will not be less than the Fair Market Value of a share on the date of grant.
Stock appreciation rights may be granted independently or in connection with
other awards.
RESTRICTED STOCK AWARDS. Typically, a restricted stock award is an award
for a fixed number of Common Shares subject to restrictions. The Administrator
specifies the price, if any, the participant must pay for such shares and the
restrictions (which may include, for example, continued service) imposed on such
shares. Restricted stock may not vest over a period of less than three years.
PERFORMANCE-BASED AWARDS. Performance-Based Awards are awards whose grant,
vesting, exercisability or payment depends upon the satisfaction of any one or
more Performance Goals. Performance-Based Awards may be stock-based (payable in
stock only or in cash or stock) or may be cash-only awards. The performance
period may range from one to five years.
Section 162(m) Awards are a type of Performance-Based Award designed to
satisfy the requirements for deductibility under Section 162(m) of the Code.
These awards are earned and payable only if a participant reaches specific
preestablished Performance Goals approved by the Administrator in advance of
applicable deadlines under the Code and while the performance relating to the
Performance Goals remains substantially uncertain.
Upon a change in the business or operations of the Company or other events
or circumstances, the Administrator may modify the terms of a Performance-Based
Award or adjust a Performance Goal; provided however that in the case of Section
162(m) Awards any such modification or adjustment may not violate the
limitations imposed by Section 162(m). The Performance Objectives on which
Performance Goals will be established are listed and defined in Exhibit A to the
2001 Plan.
STOCK BONUSES. The Administrator may grant a stock bonus to any eligible
person to reward exceptional or special services, contributions or achievements
in the manner and on such terms and conditions (including any restrictions on
such shares) as determined from time to time by the Administrator. The number of
shares so awarded shall be determined by the Administrator and may be granted
independently or in lieu of a cash bonus.
STOCK UNITS. Stock units represent a fictitious share of Company stock and
are generally credited to a recordkeeping account. Typically, the value of a
stock unit is based upon the value of an actual share of Company stock.
DIVIDEND EQUIVALENTS; DIVIDEND RIGHTS. Dividend rights or equivalents are
amounts payable in cash or stock (or additional stock units that may be paid in
stock or cash) equal to the amount of dividends that would have been paid on
shares had the shares been outstanding from the date the stock-based award was
granted.
SETTLEMENTS AND DEFERRALS. The Administrator may permit payment of awards
under the 2001 Plan in the form of cash, Common Stock or any combination
thereof. The Administrator also may require or permit participants to elect to
defer the issuance of Common Stock or the settlement of awards in cash. The
Administrator may provide that deferred settlements include the payment or
crediting of interest on deferral amounts or the payment or crediting of
dividend rights or equivalents if deferral amounts are denominated in stock.
TRANSFER RESTRICTIONS. Subject to exceptions contained in Section 4.7 of
the 2001 Plan or as otherwise permitted by law or in the applicable award
agreement, awards under the 2001 Plan are not transferable by the recipient
other than by will or the laws of descent and distribution and are generally
exercisable, during the recipient's lifetime, only by him or her. Any amounts
payable or shares issuable pursuant to an award will be
19
paid only to the recipient or the recipient's beneficiary or representative.
CHANGE OF CONTROL. Unless before a Change in Control Event the
Administrator determines that, upon its occurrence, benefits will not be
accelerated, then generally upon the Change in Control Event each option and
stock appreciation right will become immediately exercisable, restricted stock
will vest, cash and Performance-Based Awards and stock units will become payable
and any other rights of a participant under any other award will be accelerated
to give the participant the benefit intended under any such award. A Change in
Control Event under the 2001 Plan generally includes a 20% or more change in
ownership, certain changes in a majority of the Board, certain mergers or
consolidations, or a liquidation of the Company or sale of substantially all of
the Company's assets.
AMENDMENTS. The Board may amend or terminate the 2001 Plan. However, no
amendment or termination may impair the rights of a participant under an
outstanding award without such participant's consent. Stockholder approval is
required for any Plan amendment that would (a) materially increase the benefits
accruing to participants; (b) materially increase the number of securities which
may be issued; or (c) materially modify the requirements as to eligibility for
participation. Additionally, the exercise price of stock options and stock
appreciation rights may not be reduced without stockholder approval.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of some of the federal income tax
consequences of common transactions under the 2001 Plan based on federal income
tax laws in effect on January 1, 2001. This summary is not intended to be
exhaustive and, among other considerations, does not describe state, local, or
international tax consequences.
With respect to nonqualified stock options, the Company is generally
entitled to deduct (and the optionee recognizes taxable income in) an amount
equal to the difference between the option exercise price and the fair market
value of the shares at the time of exercise. With respect to incentive stock
options, the Company is generally not entitled to a deduction nor does the
participant recognize income at the time of exercise. The current federal income
tax consequences of other awards authorized under the 2001 Plan generally follow
basic patterns: stock appreciation rights are taxed and deductible in
substantially the same manner as nonqualified stock options; nontransferable
restricted stock subject to a substantial risk of forfeiture results in income
recognition equal to the excess of the fair market value over the price paid (if
any) only at the time the restrictions lapse (unless the recipient elects to
accelerate recognition as of the date of grant); bonuses, Performance-Based
Awards and dividend rights or equivalents are generally subject to tax at the
time of payment; cash-based awards are generally subject to tax at the time of
payment; and compensation otherwise effectively deferred is taxed when paid. In
each of the foregoing cases, the Company will generally have a corresponding
deduction at the time the participant recognizes income.
If an award is accelerated under the 2001 Plan in connection with a change
in control (as this term is used under the Code), the Company may not be
permitted to deduct the portion of the compensation attributable to the
acceleration ("parachute payments") if it exceeds threshold limits under the
Code (and certain related excise taxes may be triggered). Furthermore, if the
compensation attributable to awards is not "performance-based" within the
meaning of Section 162(m) of the Code, the Company may not be permitted to
deduct the aggregate non performance-based compensation in excess of $1,000,000
in some circumstances.
SPECIFIC BENEFITS
For information regarding options and restricted stock awards granted to
executive officers of the Company, see the material under "Executive
Compensation" beginning at page 8.
The number, amount and type of awards to be received by or allocated to
eligible persons under the 2001 Plan cannot be determined at this time. The
Administrator has not yet considered any specific awards under the 2001 Plan. If
the 2001 Plan had been in effect in 2000, the Company expects that the grants
would not have been substantially different from those described in the Summary
Compensation Table above.
RECOMMENDATION OF THE BOARD "FOR" THIS PROPOSAL
The Board believes that the 2001 Plan will promote the interests of the
Company and its stockholders by enabling the Company to continue to attract,
retain and reward persons important to the Company's success and to provide
incentives based on the attainment of corporate objectives and increases in
stockholder value.
The Board of Directors has approved and recommends that you vote "FOR" the
2001 Plan. Your proxy will be so voted unless you specify otherwise.
20
STOCKHOLDER PROPOSALS
o o o
Occidental has been advised by four holders of common stock of their
intention to introduce at the annual meeting the following proposals and
supporting statements. The Board of Directors disclaims any responsibility for
the content of the proposals and for the statements made in support thereof,
which are presented as received from the stockholders.
STOCKHOLDER PROPOSAL REGARDING NOMINEE REPORTS TO STOCKHOLDERS
- --------------------------------------------------------------------------------
Mr. Carl Olson of Woodland Hills, California, the owner of 110 shares of
common stock, has notified Occidental that he intends to present the following
proposal at the 2001 annual meeting.
"Be it resolved by the stockowners to recommend to the board that each
nominee for director nominated by the Board shall have the right to include a
report to the stockowners in the proxy statement, such report not to exceed 1000
words. Any such nominee who does not submit such a report shall have this
omission mentioned next to his/her biographical information in the proxy
statement.
SUPPORTING STATEMENT
We stockowners don't hear enough from our individual directors. As a matter
of fact, reports to stockowners usually are from only one director (the
chairman). Even at the annual meetings, we usually don't hear from any of the
directors present (other than the chairman). In my experiences of attending
annual meetings, individual directors almost never speak to the assembled
stockowners even if questions are directed to one or another of them.
A report from our group of directors would provide us very valuable input.
It could include the director's opinions on the direction of the company, the
product quality and sources, any stock buyback plans, any poison pill
provisions, and so on. It is hard to believe that ALL directors think the same
as ALL other directors on ALL matters before the board.
We deserve to have the directors earn some of their fees by providing a
short statement to us in the annual proxy statement."
THE BOARD OF DIRECTORS' STATEMENT IN OPPOSITION
The business and affairs of a Delaware corporation, such as Occidental, are
required to be managed by its Board of Directors. In reaching decisions,
directors do not always initially agree with each other or management. Instead,
they confer, debate and resolve their differences through compromise, or by
reliance upon the expertise of their colleagues or other qualified persons. The
differences brought to the decision making process by the directors in their
business backgrounds and experiences and ethnic and social diversity help to
ensure that Board decisions are well informed. The Board of Directors believes
that the proponent's proposal would have a chilling effect on the exchange of
independent views and thus seriously undermine the ability of the Board to
function in an open and democratic manner reaching decisions that reflect a
consensus of the opinions expressed by all of the Directors.
In addition, the Board of Directors is concerned that such reports would
spawn litigation. The individual director reports, unlike the reports by the
Compensation and Audit Committees, would be filed materials for the purposes of
the Federal securities laws and as such would expose Occidental and the
directors to liability for the content of such reports. It is foreseeable that
the members of the legal profession who specialize in securities class action
lawsuits could use such reports to find grounds to start litigation. This
additional threat of litigation could also serve to make it more difficult to
retain existing directors and to recruit new directors.
For a serious disagreement between board members, there is a mechanism for
airing the disagreement. Generally, a person serving as a director of a public
company who has major disagreements with the management and other directors of
that company will resign from the board. In that case, if the resigning director
expresses his disagreements with the company in his letter of resignation, the
Securities and Exchange Commission's rules and regulations require the company
to summarize the director's disagreements in a Current Report on Form 8-K and to
file the letter as an exhibit to the report.
Finally, the amount of information required to be included in proxy
statements has grown significantly in recent years resulting in longer
documents, which are rarely read in their entirety. If each of this year's
nominees for director submitted a report of 1000 words, this proxy statement
would be about 15 pages longer. The Board of Directors believes that, rather
than encouraging greater stockholder interest, the receipt of an even longer
proxy statement will discourage more stockholders from reading their proxy
statements and returning their proxy cards.
Accordingly, the Board of Directors recommends a vote AGAINST the foregoing
stockholder proposal. Proxies solicited by the Board of Directors will be so
voted unless you specify otherwise.
21
STOCKHOLDER PROPOSAL REGARDING REPORT ON OPERATIONS IN NORTHEASTERN COLOMBIA
- --------------------------------------------------------------------------------
Walden Asset Management, 40 Court Street, Boston, Massachusetts 02108, the
owner of 1100 shares of common stock, The Sinsinawa Dominicans, 7200 W. Division
Street, River Forest, Illinois 60305, the owner of 100 shares of common stock,
and Atossa Soltani, 115 S. Topanga Boulevard, Suite E, Topanga, California 90290
the owner of 100 shares of common stock, have each notified Occidental that they
intend to present the following proposal at the 2001 annual meeting.
"WHEREAS: Opposition from the peaceful U'wa tribe to Occidental Petroleum's
Samore oil project in Colombia on land to which the tribe claims legal title has
generated significant press coverage damaging to the company's public image. The
U'wa have expressed their willingness to die to stop Occidental's project
including threatening to commit mass-suicide due to their religious and cultural
objections to the removal of oil from their sacred land.
Fidelity Investments (FMR), formerly the largest investor in Occidental,
was the target of some 75 protests because of its Occidental holdings. During
the two quarters ended in September, 2000, it divested itself of approximately
13,734,000 shares of Occidental (some 66% of its holdings). Although Fidelity
publicly states that there was no connection between its divestment and the U'wa
situation, the proponents of this proposal believe that there is such a
connection.
Occidental's security expenses have increased in response to Colombia's
civil war. Occidental's installations are frequent targets for guerilla
bombings. Between January and November 2000, Cano Limon pipeline, owned 50% by
Occidental and 50% by an agency of the Colombian government was bombed 86 times;
costing an estimated $2.5 million each day the pipeline was down. Since 1986, it
has spilled an estimated 2.1 million barrels of crude.
BE IT RESOLVED that:
The shareholders request the Board of Directors to prepare a report,
omitting proprietary information and made available to shareholders by September
2001, on the financial and legal risks and liabilities of Occidental's
operations in Northeastern Colombia. The report should include an analysis of:
a. Adverse effects on Occidental's public image, and potential effects on
stock price resulting from the U'wa people's opposition to the Samore project;
b. Financial risks of operating in the midst of Colombia's civil war
including increase in security costs and pipeline shut-downs and potential
liabilities for clean up costs associated with oil spills; and
c. Legal liabilities, including the possibility of criminal or civil
liability, should members of the U'wa tribe or their allies protesting
Occidental's oil project, or innocent bystanders, be injured or killed as a
result of actions by security or military forces acting on behalf of Occidental.
SUPPORTING STATEMENT
Since 1992, the 5,000-member U'wa tribe has repeatedly voiced opposition to
oil drilling on their ancestral land.
The U'wa have expressed concern over the growing military presence and
violence in their region since Occidental began well construction. The tribe
reported that Occidental moved in its drilling rig escorted by several thousand
Colombian soldiers.
Several thousand people have peacefully blockaded roads near Occidental's
drill-site periodically since January 2000. Amnesty International issued an
urgent Action Appeal in March expressing concern that on 11 February 2000, three
indigenous children drowned and others were injured when "some 500 Army and
Police reportedly used tear gas, riot sticks and bulldozers to evict around 450
U'wa people from Las Canoas."
Testifying before the U.S. Congress in February 2000, Occidental executive
Larry Meriage stated that Occidental's employees are "regularly shaken down" and
"required to pay a 'war tax' to both of the guerilla groups or they will not be
able to work."
Shareholders concerned with long-term profitability of the company should
vote yes for this resolution.
THE BOARD OF DIRECTORS' STATEMENT IN OPPOSITION
In August 1999, the Colombian Government, after consultations with the
U'wa, more than tripled the size of the U'wa reservation. As a result the U'wa
control more than one-half million acres in Northeastern Colombia. Occidental's
Gibraltar drill site was not in the U'wa territory before it was expanded and is
not in the significantly expanded U'wa reservation.
Both Occidental and the Colombian Government have continued to try to work
with the U'wa. In August, 2000, a technical working group comprised of senior
members of the Colombian Ministries of Environment and Interior, as well as an
advisor to the U'wa, reported
22
that Occidental and the Colombian Government were complying with all applicable
regulations. However, in September 2000, the U'wa broke off talks with the
Colombian government.
Unwilling to negotiate with the Colombian Government and having exhausted
all judicial appeals in Colombia, the U'wa and their supporters have attempted
to convince Occidental's large institutional holders to divest themselves of
their Occidental holdings as a way of putting pressure on Occidental. When a
holder such as Fidelity denies the effectiveness of these tactics, the
proponents refuse to accept the denial and coyly state their disbelief.
For three consecutive years, the proponents have submitted substantially
the same proposal on the risks involved in Occidental's operations in Colombia
and, in particular, the U'wa's claims. This has given the proponents the
opportunity to expound in the proxy statement and at great length before, during
and after each of the last two Annual Meetings on their view of the risks faced
by Occidental. On each occasion Occidental has responded in a thoughtful manner
to the concerns expressed by the proponents. However, these responses have been
completely disregarded by supporters of the proponents whose disruptive behavior
has interfered with efforts by Occidental spokespersons to explain the company's
position. Similar to their dismissal of the response by a Fidelity spokesperson
that the U'wa issue had no bearing on Fidelity's investment decisions, the
proponents are unwilling to accept any response that disagrees with their
expressed opinions.
Evaluating and reporting on the risks attendant to its foreign operations
are among Occidental's obligations as a public company. As required by the rules
of the Securities and Exchange Commission, in its Annual Report on Form 10-K for
the year ended December 31, 2000 as well as in prior years, Occidental explains
that portions of its oil and gas assets are located in countries outside North
America and discusses the risks of doing business in such countries, including
Colombia. The result is that between Occidental's annual and quarterly reports
filed with the Securities and Exchange Commission and the proxy materials,
Occidental's stockholders have had for the last two years, and have again this
year, a wealth of information on the issues. Since it is unlikely that the
proponents will ever believe a report that disagrees in any way with their
positions, the Board of Directors does not believe that a report of the type
requested by the proposal would add significantly to the debate.
Accordingly, the Board of Directors recommends a vote AGAINST the foregoing
stockholder proposal. Proxies solicited by the Board of Directors will be so
voted unless you specify otherwise.
STOCKHOLDER PROPOSALS FOR THE
2002 ANNUAL MEETING OF STOCKHOLDERS
o o o
Stockholders interested in submitting a proposal for inclusion in the proxy
statement and proxy card relating to the 2002 Annual Meeting of Stockholders may
do so by following the procedures in Rule 14a-8 under the Securities Exchange
Act of 1934. To be eligible for inclusion, stockholder proposals must be
received at Occidental's executive offices at 10889 Wilshire Boulevard, Los
Angeles, California 90024, addressed to the attention of the Secretary, no later
than November 12, 2001.
Under Occidental's By-laws, stockholders must follow certain procedures to
introduce an item of business at an annual meeting that is not included in the
proxy materials. These procedures provide that an item of business to be
introduced at an annual meeting must be submitted in writing to the Secretary at
10889 Wilshire Boulevard, Los Angeles, California 90024. Notice of the proposed
item of business must be received not less than 70 or more than 90 days in
advance of the anniversary date of the prior year's meeting. If the meeting date
is not within 30 days of the anniversary date, the item of business must be
received not later than the tenth day following the earlier of the day notice of
the meeting date was mailed or the day public disclosure of the new date was
made. Notice of the proposed item of business must include the information
required by Occidental's By-laws.
The chairman of the meeting may refuse to allow the transaction of any item
of business not presented in compliance with Occidental's By-laws. In addition,
the proxies solicited on behalf of the Board of Directors will have
discretionary authority to vote against any such item of business.
CORPORATE GOVERNANCE
POLICIES
o o o
A copy of Occidental's corporate governance policies or Occidental's Code
of Business Conduct is available upon request by writing to Occidental.
23
ANNUAL REPORT
o o o
Occidental's 2000 Annual Report on Form 10-K is concurrently being mailed
to stockholders. The Annual Report contains consolidated financial statements of
Occidental and its subsidiaries and the report thereon of Arthur Andersen LLP,
independent public accountants.
Sincerely,
/s/ DONALD P. DE BRIER
Donald P. de Brier
Secretary
Los Angeles, California
March 12, 2001
o o o
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. PLEASE COMPLETE, SIGN,
DATE AND RETURN THE ACCOMPANYING FORM OR FORMS OF PROXY IN THE ENCLOSED ENVELOPE
OR FOLLOW THE PROCEDURES OUTLINED ON THE CARD TO VOTE BY TELEPHONE OR INTERNET.
24
EXHIBIT A
AUDIT COMMITTEE CHARTER
The Audit Committee of Occidental Petroleum Corporation shall henceforth have
the responsibilities, powers, duties and authority specified in this Charter.
I. SCOPE OF GENERAL AUDIT RESPONSIBILITIES. The Audit Committee shall:
(A) Discuss with the Company's independent public accountants, and with the
management of the Company, the Company's financial accounting and reporting
principles, policies and practices, including any major changes and other
questions of judgment involving appropriate auditing and accounting principles;
(B) Review and discuss with such independent public accountants the
Company's annual financial statements, including the scope and results of their
audit and the matters to be discussed, as required by Statement on Accounting
Standards No. 61, "Communication with Audit Committees," including any
significant disputes between management and such independent public accountants;
(C) Based on its review and discussion with the independent public
accountants, decide whether to recommend to the Board that the financial
statements be included in the Company's Annual Report on Form 10-K;
(D) Discuss with such independent public accountants, the internal auditors
and the management of the Company, the adequacy of the Company's internal
accounting, financial and operating controls;
(E) Review all reports submitted to the Committee by the Company's internal
audit department and management's responses to such reports;
(F) Review the appointment and replacement of the senior internal auditing
executive and the annual internal audit plan of work for such year; and
(G) Report to the Board with respect to the foregoing.
II. STRUCTURE, PROCESSES AND MEMBERSHIP REQUIREMENTS. The Audit Committee shall:
(A) Consist of at least three Directors;
(B) Satisfy the independence and expertise requirements of the New York
Stock Exchange; or
(C) Meet at least four times each year, and, at such meetings, discuss such
audit matters as the Committee deems appropriate with the senior accounting
officers of the Company and representatives of the Company's independent public
accountants, discuss such internal audit matters as the Committee deems
appropriate with the Company's internal auditors and discuss such corporate
compliance matters as the Committee deems appropriate with the Chief Compliance
Officer.
III. SPECIFIC RESPONSIBILITIES WITH RESPECT TO THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS. The Company's independent public accountants are ultimately
accountable to the Board and Audit Committee, and the Audit Committee and the
Board have the ultimate authority and responsibility to select, evaluate and,
where appropriate, replace the Company's independent public accountants (or to
nominate such firm to be proposed for shareholder approval in any proxy
statement). In furtherance of these responsibilities, the Audit Committee shall:
(A) Recommend to the Board the firm of independent public accountants to be
nominated by the Board to audit the books, records and accounts of the Company
and its consolidated subsidiaries and whether to terminate such relationship;
(B) Review the compensation and terms of engagement of such firm;
(C) Periodically review information from the independent public accountants
pertaining to such firm's independence and discuss such information with such
firm;
A-1
(D) Ensure that the Company's independent public accountants submit
periodically a formal written statement delineating all relationships between
the Company's independent public accountants and the Company;
(E) Engage in an active dialogue with the Company's independent public
accountants with respect to any disclosed relationships or services that may
impact the objectivity and independence of such firm and recommend that the
Board take appropriate action in response to such firm's report to satisfy
itself of the independence of such firm; and
(F) Report to the Board with respect to the foregoing.
IV. ADDITIONAL POWERS, DUTIES AND AUTHORITY. The Audit Committee shall also:
(A) Oversee all matters relating to the Company's Compliance Program and
Code of Business Conduct;
(B) Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement;
(C) Review with the Company's General Counsel legal matters that may have a
material impact on the financial statements, the Company's compliance policies
and any material reports or inquiries received from regulators or governmental
agencies;
(D) Retain such special legal, accounting or other consultants as the
Committee may, from time to time or at any time, deem appropriate to advise the
Committee, which advisors and consultants shall report directly to the
Committee;
(E) Request any officer or employee of the Company or the Company's outside
counsel or independent public accountants, which it deems appropriate, to attend
a meeting of the Committee or to meet with any members of, or consultants to,
the Committee;
(F) Review the Charter annually and recommend any proposed changes to the
Board for approval; and
(G) Report to the Board with respect to the foregoing.
A-2
EXHIBIT B
2001 INCENTIVE COMPENSATION PLAN
1. PURPOSE OF PLAN. The purpose of this Plan is to provide incentives and
stock-based awards to promote the success of the Company and the interests of
its stockholders and to align the interests of the Company's stockholders,
officers and employees.
2. SHARE LIMITS. Subject to the provisions of Section 6, the capital stock
that may be delivered under this Plan will be Common Shares. Subject to
adjustment as provided in or pursuant to this Section 2 or Section 6:
2.1 AGGREGATE SHARE LIMITS. The maximum number of Common Shares that
may be delivered pursuant to all awards granted under this Plan shall equal
17,000,0000 shares. The maximum number of Common Shares that may be delivered
pursuant to all awards other than stock options granted under this Plan shall
equal 8,500,000 shares. The maximum number of Common Shares that may be
delivered pursuant to all awards for which payment or vesting is not based upon
the passage of time, stock price appreciation or the satisfaction of Performance
Goals shall equal 850,000 shares.
2.2 INDIVIDUAL LIMITS. The aggregate number of Common Shares subject
to all awards granted under this Plan to any one individual during any three
consecutive calendar years shall be limited to 4,000,000 shares. Awards payable
only in cash and not related to shares made to any one individual during any
calendar year shall be limited to $10,000,000. Awards that are cancelled during
the fiscal year shall be counted against these limits only to the extent
required by Section 162(m).
2.3 REISSUE OF AWARDS AND SHARES. Awards payable in cash or payable
in cash or Common Shares, including restricted shares, that are forfeited,
cancelled, or for any reason do not vest or are not paid under this Plan, and
Common Shares that are subject to awards that expire or for any reason are
terminated, cancelled, fail to vest or are otherwise settled and are not issued,
as well as Common Shares reacquired pursuant to the terms of an award, shall be
available for subsequent awards under this Plan. If an award under this Plan is
or may be settled only in cash, such award need not be counted against any of
the share limits under this Section 2, except as may be required by Section
162(m) to the extent required to preserve the status of an award as
"performance-based compensation" under Section 162(m).
3. ADMINISTRATOR OF PLAN. This Plan shall be administered by the
Administrator.
3.1 POWERS OF THE ADMINISTRATOR. Subject to the express provisions
of this Plan, the Administrator shall be authorized and empowered to do all
things necessary or desirable in connection with the authorization of awards and
the administration of this Plan within its delegated authority, including,
without limitation, the authority to:
(a) adopt, amend and rescind rules, regulations and
procedures relating to this Plan and its administration or the awards granted
under this Plan and determine the forms of awards;
(b) determine who is an Eligible Person and to which
Eligible Persons, if any, awards will be granted under this Plan;
(c) grant awards to Eligible Persons and determine the terms
and conditions of such awards, including but not limited to the number and value
of Common Shares issuable pursuant thereto, the times (subject to Section 4.6)
at which and conditions upon which awards become exercisable or vest or shall
expire or terminate, and (subject to applicable law) the consideration, if any,
to be paid upon receipt, exercise or vesting of awards;
(d) determine the date of grant of an award, which may be a
designated date after but not before the date of the Administrator's action;
(e) determine whether, and the extent to which, adjustments
are required pursuant to Section 6 hereof;
(f) interpret and construe this Plan and the terms and
conditions of any award granted hereunder, whether before or after the date set
forth in Section 5;
(g) determine the circumstances under which, consistent with
the provisions of Section 7.2, any outstanding award may be amended and make any
amendments thereto that the Administrator determines are necessary or
appropriate; and
(h) acquire or settle rights under options, stock
appreciation rights or other awards in cash, stock of equivalent value, or other
consideration.
All authority granted herein (except as provided in Section 5) shall remain in
effect so long as any award remains outstanding under this Plan.
B-1
3.2 SPECIFIC ADMINISTRATOR RESPONSIBILITY AND DISCRETION REGARDING
AWARDS. Subject to the express provisions of this Plan, the Administrator, in
its sole and absolute discretion, shall determine all of the terms and
conditions of each award granted under this Plan, which terms and conditions may
include, subject to such limitations as the Administrator may from time to time
impose, among other things, provisions that:
(a) permit the recipient of such award to pay the purchase
price of the Common Shares or other property issuable pursuant to such award, or
any applicable tax withholding obligation upon such issuance or in respect of
such award or Common Shares, in whole or in part, by any one or more of the
following:
(i) cash, cash equivalent, or electronic funds
transfer,
(ii) the delivery of previously owned shares of
capital stock of the Company (including shares acquired as or pursuant to
awards) or other property,
(iii) a reduction in the amount of Common Shares or
other property otherwise issuable pursuant to such award,
(iv) a cashless exercise, or
(v) any other legal consideration the Administrator
deems appropriate.
(b) accelerate the receipt and/or vesting of benefits
pursuant to the award upon or in connection with (whether before, at the time of
or after) the occurrence of a specified event or events, including, without
limitation, a termination of employment, an event of a personal nature, an event
referenced in Section 6 (in which case the Administrator's discretion shall be
exercised in a manner consistent with Section 6), or otherwise, in any case as
deemed appropriate by the Administrator;
(c) qualify such award as an ISO;
(d) adjust the exercisability, term (subject to other
limits) or vesting schedule of any or all outstanding awards, adjust the number
of Common Shares subject to any award, adjust the price of any or all
outstanding awards or otherwise change previously imposed terms and conditions,
in the circumstances referenced in clause (b) above or in other circumstances or
upon the occurrence of other events (including events of a personal nature) as
deemed appropriate by the Administrator, by amendment of an outstanding award,
by substitution of an outstanding award, by waiver or by other legally valid
means (which may result, among other changes, in a greater or lesser number of
shares subject to the award, a shorter or longer vesting or exercise period, or,
except as provided below, an exercise or purchase price that is higher or lower
than the original or prior award), in each case subject to Sections 2 and 7.2,
and in no case shall the exercise price of any option or related stock
appreciation right be reduced to a price below the Fair Market Value of the
underlying Common Shares on the grant date of such option or stock appreciation
right unless specific stockholder consent is obtained;
(e) authorize (subject to Sections 6, 7, and 9) the
conversion, succession or substitution of one or more outstanding awards upon
the occurrence of an event of the type described in Section 6 or in other
circumstances or upon the occurrence of other events as deemed appropriate by
the Administrator; and/or
(f) determine the value of and acquire or otherwise settle
awards upon termination of employment, upon such terms as the Administrator
(subject to Sections 6, 7 and 9) deems appropriate.
3.3 DECISIONS IN GOOD FAITH; RELIANCE ON EXPERTS. In making any
determination or in taking or not taking any action under this Plan, the
Administrator may obtain and may rely upon the advice of experts, including
employees of and professional advisors to the Company. No director, officer or
agent of the Company shall be liable for any such action or determination taken
or made or omitted under this Plan in good faith. Any action taken by, or
inaction of, the Administrator relating to or pursuant to this Plan shall be
within the absolute discretion of that entity or body and shall be conclusive
and binding on all persons.
3.4 DELEGATION. The Board may delegate different levels of authority
to different committees with administrative and grant authority under this Plan,
provided that each designated committee granting any awards hereunder shall
consist exclusively of a member or members of the Board. A majority of the
members of the acting committee shall constitute a quorum. The vote of a
majority of the members present assuming the presence of a quorum or the
unanimous written consent of the committee shall constitute action by the
committee. The Administrator may delegate authority to grant awards under this
Plan for new employees to an officer of the Company who is also a director and
may delegate ministerial, non-discretionary functions to individuals who are
officers or employees of the Company or a subsidiary or to third parties.
3.5 BIFURCATION. Notwithstanding anything to the contrary in this
Plan, the provisions of this Plan may at any time be bifurcated by the Board or
the Administrator in any manner so that provisions of any award agreement (or
this Plan)
B-2
intended or required in order to satisfy the applicable requirements of Rule
16b-3 or Section 162(m), to the extent permitted thereby, are applicable only to
persons subject to those provisions and to those awards to those persons
intended to satisfy the requirements of the applicable legal restriction.
4. AWARDS.
4.1 TYPE AND FORM OF AWARDS. All awards shall be evidenced in
writing (including electronic form), substantially in the form approved by the
Administrator, and executed on behalf of the Company and, if required by the
Administrator, by the recipient of the award. The Administrator may authorize
any officer (other than the particular recipient) to execute any or all
agreements memorializing any grant of an award by the Administrator under this
Plan. The types of awards that the Administrator may grant include, but are not
limited to, any of the following, on an immediate or deferred basis, either
singly, or in tandem or in combination with or in substitution for, other awards
of the same or another type: (i) Common Shares, (ii) options, stock appreciation
rights (including limited stock appreciation rights), restricted stock (which
shall vest over a period of not less than 3 years), stock units, or similar
rights to purchase or acquire shares, whether at a fixed or variable price or
ratio related to the Common Shares, upon the passage of time, the occurrence of
one or more events, or the satisfaction of Performance Goals or other
conditions, or any combination thereof, (iii) any similar securities with a
value derived from the value of or related to the Common Shares or other
securities of the Company and/or returns thereon, or (iv) cash. Share-based
awards may include (without limitation) stock options, stock purchase rights,
stock bonuses, stock units (or deferred compensation accounts), stock
appreciation rights, limited stock appreciation rights, phantom stock, dividend
equivalents (independently or in tandem with any form of stock grant), dividend
rights (independently or in tandem with any form of stock grant), Common Shares,
any of which may be payable in Common Shares or cash, and may consist of one or
more of such features in any combination.
4.2 PERFORMANCE-BASED AWARDS. Any of the types of awards listed in
Section 4.1 may be granted as Performance-Based Awards.
4.2.1 SECTION 162(M) AWARDS. The Administrator has discretion
to determine if any Performance-Based Award is intended to be a Section 162(m)
Award. Section 162(m) Awards shall be subject to the following rules and
restrictions:
(a) Performance Goals. The specific Performance
Goals in respect of Section 162(m) Awards, other than Qualifying Options, must
be approved by the Administrator in advance of any applicable deadlines under
Section 162(m) and while the performance relating to those goals remains
substantially uncertain within the meaning thereof;
(b) Class. The eligible class of persons for Section
162(m) Awards shall be executive officers of the Company and its subsidiaries
and, in the discretion of the Administrator, other employees of the Company or
its subsidiaries who are designated by the Administrator to receive a Section
162(m) Award because they may be executive officers of the Company or its
subsidiaries by the time their awards are exercised, vested or paid.
(c) Certification of Payment. Except as otherwise
permitted under Section 162(m), before any Section 162(m) Award is paid, the
Administrator must certify that the Performance Goal and any other material
terms of the Section 162(m) Award were in fact satisfied.
4.2.2 RESERVATION OF DISCRETION. The Administrator shall have
discretion to determine the conditions, restrictions or other limitations, in
accordance with the terms of this Plan and, in the case of Section 162(m)
Awards, the limitations of Section 162(m), on the payment of individual
Performance-Based Awards under this Section 4.2. The Administrator may reserve
by express provision in any award agreement the right to reduce the amount
payable in accordance with any standards or on any other basis (including the
Administrator's discretion), as the Administrator may impose.
4.2.3 ADJUSTMENTS. Performance Goals or other features of an
award under this Section 4.2 may be (i) adjusted to reflect a change in
corporate capitalization, a corporate transaction (such as a reorganization,
combination, separation, merger, acquisition, or any combination of the
foregoing) or a complete or partial corporate liquidation, or (ii) calculated
either without regard for or to reflect any change in accounting policies or
practices affecting the Company and/or the Performance Objectives or Performance
Goals, or (iii) adjusted for any other circumstances or event, or (iv) any
combination of (i) through (iii), but only to the extent in each case that such
adjustment or determination in respect of Section 162(m) Awards would be
consistent with the requirements of Section 162(m) to qualify as
performance-based compensation.
4.3 CONSIDERATION FOR SHARES. Common Shares may be issued pursuant
to an award for any lawful consideration as determined by the Administrator,
including, without limitation, services rendered by the recipient of such award,
but shall not be issued for less than the minimum lawful consideration. Awards
may be payable in cash, stock or other
B-3
consideration or any combination thereof, as the Administrator shall designate
in or (except as required by Section 4.2) by amendment to the award agreement.
4.4 LIMITED RIGHTS. Except as otherwise expressly authorized by the
Administrator or this Plan or in the applicable award agreement, a participant
will not be entitled to any privilege of stock ownership as to any Common Shares
not actually delivered to and held of record by the participant. No adjustment
will be made for dividends or other rights as a stockholder for which a record
date is prior to such date of delivery.
4.5 OPTION/STOCK APPRECIATION RIGHT PRICING LIMITS. The purchase
price per share of the Common Shares covered by any option or the base price of
any stock appreciation right shall be determined by the Administrator at the
time of the grant, but shall not be less than 100% of the Fair Market Value of
the Common Shares on the date of grant.
4.6 TERM LIMITS. Any option, stock appreciation right, warrant or
similar right shall expire and any other award shall vest not more than 10 years
after the date of grant. An award may be converted or convertible,
notwithstanding the foregoing limits, into or payable in, Common Shares or
another award that otherwise satisfies the requirements of this Plan.
4.7 TRANSFER RESTRICTIONS. Unless otherwise expressly provided in or
permitted by this Section 4.7, by applicable law or by the award agreement, as
the same may be amended, (i) all awards are non-transferable and shall not be
subject in any manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge; (ii) awards shall be exercised only by the
holder; and (iii) amounts payable or shares issuable pursuant to an award shall
be delivered only to (or for the account of) the holder.
4.7.1 EXCEPTIONS BY ADMINISTRATOR ACTION. The Administrator,
in its sole discretion, may permit an award to be transferred to, exercised by
and paid to certain persons or entities related to the participant, including
but not limited to members of the participant's family, or trusts or other
entities whose beneficiaries or beneficial owners are members of the
participant's family, or to such other persons or entities as may be expressly
approved by the Administrator, pursuant to such conditions and procedures as the
Administrator may establish. Any permitted transfer shall be subject to the
condition that the Administrator receive evidence satisfactory to it that the
transfer is being made for estate and/or tax planning purposes and on a basis
consistent with the Company's lawful issue of securities and the incentive
purposes of the award and this Plan. Notwithstanding the foregoing, awards
intended as ISOs or restricted stock awards for purposes of the Code shall be
subject to any and all additional transfer restrictions necessary to preserve
their status as ISOs or restricted shares, as the case may be, under the Code.
4.7.2 EXCLUSIONS. The exercise and transfer restrictions in
this Section 4.7 shall not apply to:
(a) transfers to the Company,
(b) the designation of a beneficiary to receive
benefits in the event of the participant's death or, if the participant has
died, transfers to or exercise by the participant's beneficiary, or, in the
absence of a validly designated beneficiary, transfers by will or the laws of
descent and distribution,
(c) transfers pursuant to a domestic relations order
(if approved or ratified by the Administrator), if (in the case of ISOs)
permitted by the Code,
(d) if the participant has suffered a disability,
permitted transfers to or exercises on behalf of the holder by his or her legal
representative, or
(e) the authorization by the Administrator of
"cashless exercise" procedures with third parties who finance or who otherwise
facilitate the exercise of awards consistent with applicable laws and the
express authorization of the Administrator.
4.8 TAX WITHHOLDING. Upon any exercise, vesting, or payment of any
award, the Company shall:
(a) require the recipient (or his or her heirs,
personal representatives or beneficiaries, as the case may be) to pay or provide
for payment of the amount of any taxes which the Company or any subsidiary may
be required to withhold with respect to such transaction; or
(b) deduct from any amount payable in cash the
amount of any taxes that the Company or any subsidiary may be required to
withhold with respect to such cash amount.
4.8.1 POSSIBLE SHARE OFFSET. In any case where a tax is
required to be withheld in connection with the delivery of Common Shares under
this Plan, the Administrator may require or may permit (either at the time of
the award or thereafter) the holder the right to offset, pursuant to such rules
and subject to such conditions as the Administrator may
B-4
establish, the number of shares to be delivered by (or otherwise reacquire) the
appropriate number of shares valued at their then Fair Market Value, to satisfy
such withholding obligation.
4.9 CASH AWARDS. The Administrator shall have the express authority
to pay awards in cash under this Plan, whether in lieu of, in addition to or as
part of another award.
5. TERM OF PLAN. No award shall be granted under this Plan after the tenth
anniversary of the Effective Date of this Plan. After that date, this Plan shall
continue in effect as to then outstanding awards. Any then outstanding award may
be amended thereafter in any manner that would have been permitted earlier,
except that no such amendment shall increase the number of shares subject to,
comprising or referenced in the award or reduce the exercise or base price of an
option or stock appreciation right or permit cash payments in an amount that
exceeds the limits of Section 2 (as adjusted pursuant to Section 6.2
6. ADJUSTMENTS; CHANGE IN CONTROL.
6.1 CHANGE IN CONTROL; ACCELERATION AND TERMINATION OF AWARDS.
Unless prior to a Change in Control Event, the Administrator determines that,
upon its occurrence, benefits under any or all awards will not accelerate or
determines that only certain or limited benefits under any or all awards will be
accelerated and the extent to which they will be accelerated, and/or establishes
a different time in respect of such Change in Control Event for such
acceleration, then upon the occurrence of a Change in Control Event:
(a) each option and stock appreciation right shall become
immediately exercisable,
(b) restricted stock shall immediately vest free of
restrictions,
(c) each award under Section 4.2 shall become payable to
the participant,
(d) the number of shares covered by each stock unit account
shall be issued to the participant, and
(e) any other rights of a participant under any other award
will be accelerated to give the participant the benefit intended under any such
award.
In the case of a transaction intended to be accounted for as a
pooling of interests transaction, the Administrator will have no discretion with
respect to these events if the exercise of such discretion would cause the
transaction to no longer be accounted for as a pooling of interests transaction.
The Administrator may override the limitations on acceleration
in this Section 6.1 by express provision in the award agreement and may accord
any Eligible Person a right to refuse any acceleration, whether pursuant to the
award agreement or otherwise, in such circumstances as the Administrator may
approve. Any acceleration of awards shall comply with applicable legal and
regulatory requirements. Without limiting the generality of the foregoing, the
Administrator may deem an acceleration to occur immediately prior to or up to 30
days before the applicable event and/or reinstate the original terms of an award
if an event giving rise to an acceleration does not occur.
If any option or other right to acquire Common Shares under
this Plan has been fully accelerated as required or permitted by this Plan but
is not exercised prior to (i) a dissolution of the Company, or (ii) an event
described in this Section 6.1 that the Company does not survive, or (iii) the
consummation of an event described in Section 6.2 involving a Change in Control
Event approved by the Board, such option or right will terminate, subject to any
provision that has been expressly made by the Administrator or the Board through
a plan of reorganization approved by the Board or otherwise for the survival,
substitution, assumption, exchange or other settlement of such option or right.
6.2 ADJUSTMENTS. The following provisions will apply if any
extraordinary dividend or other extraordinary distribution occurs in respect of
the Common Shares (whether in the form of cash, Common Shares, other securities,
or other property), or any reclassification, recapitalization, stock split
(including a stock split in the form of a stock dividend), reverse stock split,
reorganization, merger, combination, consolidation, split-up, spin-off,
repurchase, or exchange of Common Shares or other securities of the Company, or
any similar, unusual or extraordinary corporate transaction (or event in respect
of the Common Shares) or a sale of substantially all the assets of the Company
as an entirety occurs. The Administrator will, in such manner and to such extent
(if any) as it deems appropriate and equitable:
(a) proportionately adjust any or all of (i) the number and
type of shares of Common Shares (or other securities) that thereafter may be
made the subject of awards (including the specific maxima and numbers of shares
set forth elsewhere in this Plan), (ii) the number, amount and type of shares of
Common Shares (or other securities or property) subject to any or all
outstanding awards, (iii) the grant, purchase, or exercise price of any or all
outstanding awards, (iv) the securities, cash or other property deliverable upon
exercise of any outstanding awards, or (v) the Performance Goals or Performance
Objectives appropriate to any outstanding awards, or
B-5
(b) in the case of an extraordinary dividend or other
distribution, recapitalization, reclassification, merger, reorganization,
consolidation, combination, sale of assets, split up, exchange, or spin off,
make provision for a cash payment or for the substitution or exchange of any or
all outstanding awards or the cash, securities or property deliverable to the
holder of any or all outstanding awards based upon the distribution or
consideration payable to holders of the Common Shares of the Company upon or in
respect of such event.
In each case, with respect to awards of ISOs, no such adjustment will be made
that would cause this Plan to violate Section 422 or 424 of the Code or any
successor provisions without the written consent of holders materially adversely
affected thereby. In any of such events, the Administrator may take such action
sufficiently prior to such event if necessary or deemed appropriate to permit
the participant to realize the benefits intended to be conveyed with respect to
the underlying shares in the same manner as is available to stockholders
generally.
7. PLAN AMENDMENT AND TERMINATION.
7.1 AUTHORITY OF THE BOARD. Subject to Sections 7.2 and 7.3, the
Board may amend or terminate this Plan at any time and in any manner.
7.2 RESTRICTIONS. No amendment or termination of this Plan or change
in or affecting any outstanding award shall deprive in any material respect the
holder, without the consent of the holder, of any of his or her rights or
benefits under or with respect to the award. Adjustments contemplated by Section
6 shall not be deemed to constitute a change requiring such consent.
7.3 STOCKHOLDER APPROVAL. Stockholder approval shall be required for
any amendment to this Plan that would:
(a) materially increase the benefits accruing to
participants under this Plan,
(b) materially increase the number of securities which may
be issued under this Plan, or
(c) materially modify the requirements as to eligibility for
participation in this Plan.
8. EFFECTIVE DATE. This Plan shall be effective as of the date of the
Company's 2001 annual meeting of stockholders, subject to the approval of this
Plan by the requisite vote of stockholders at that meeting.
9. LEGAL MATTERS.
9.1 COMPLIANCE AND CHOICE OF LAW; SEVERABILITY. This Plan, the
granting and vesting of awards under this Plan and the issuance and delivery of
Common Shares and/or the payment of money under this Plan or under awards
granted hereunder are subject to compliance with all applicable federal and
state laws, rules and regulations (including but not limited to state and
federal securities and banking laws) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Company, be necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such restrictions as the Company
may deem necessary or desirable to assure compliance with all applicable legal
requirements. This Plan, the awards, all documents evidencing awards and all
other related documents shall be governed by, and construed in accordance with
the laws of the state of Delaware. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining provisions
of this Plan shall continue in effect.
9.2 NON-EXCLUSIVITY OF PLAN. Nothing in this Plan shall limit or be
deemed to limit the authority of the Board or the Administrator to grant awards
or authorize any other compensation, with or without reference to the Common
Shares, under any other plan or authority.
9.3 NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in
any other documents relating to this Plan or to any award) shall confer upon any
Eligible Person or other participant any right to continue in the employ or
other service of the Company or any subsidiary or constitute any contract or
agreement of employment or other service, nor shall interfere in any way with
the right of the Company or any subsidiary to change such person's compensation
or other benefits or to terminate the employment of such person, with or without
cause.
10. MISCELLANEOUS.
10.1 UNFUNDED PLAN. Unless otherwise determined by the Administrator,
this Plan shall be unfunded and shall not create (or be construed to create) a
trust or a separate fund or funds. This Plan shall not establish any fiduciary
relationship between the Company or any subsidiary and any participant or other
person. To the extent any person holds any rights by virtue of awards granted
under this Plan, such rights (unless otherwise determined by the Administrator)
shall be no greater than the rights of an unsecured general creditor of the
Company.
B-6
10.2 AWARDS NOT COMPENSATION. Unless otherwise determined by the
Administrator, settlements of awards received by participants under this Plan
shall not be deemed a part of a participant's regular, recurring compensation
for purposes of calculating payments or benefits from any Company benefit plan,
severance program or severance pay law of any country. Further, the Company may
adopt other compensation programs, plans or arrangements as it deems appropriate
or necessary.
10.3 FRACTIONAL SHARES. The Company shall not be required to issue
any fractional Common Shares pursuant to this Plan. The Administrator may
provide for the elimination of fractions or for the settlement thereof in cash.
10.4 FOREIGN PARTICIPANTS. No award shall be made to a participant
who is a foreign national or who is employed by the Company or any subsidiary
outside the United States of America if such award would violate applicable
local law. In order to facilitate the making of an award, the Administrator may
provide for such special terms for awards to participants who are foreign
nationals, or who are employed by the Company or any subsidiary outside of the
United States of America, as the Administrator may consider necessary or
appropriate to accommodate differences in local law, tax policy or custom.
Moreover, the Administrator may approve such supplements to or amendments to
this Plan as it may consider necessary or appropriate for such purposes unless
stockholder approval for any such change would be required in accordance with
the provisions of Section 7.
10.5 DEFERRAL. The Administrator may authorize, subject to such
requirements or restrictions as it may impose, the deferral of any payment of
cash or delivery of Common Shares or other property that may become due or
payable under this Plan.
11. DEFINITIONS.
"ADMINISTRATOR" means the Compensation Committee of the Board or its
successor, which shall be composed of not less than two members of the Board,
each of whom shall be a "disinterested person" within the meaning of Rule 16b-3
and an "outside director" within the meaning of Section 162(m).
"BOARD" means the Board of Directors of the Company.
"BUSINESS COMBINATION" means a merger, consolidation, or other
reorganization, with or into, or the sale of all or substantially all of the
Company's business and/or assets as an entirety to, one or more entities that
are not subsidiaries or other affiliates of the Company.
"CHANGE IN CONTROL EVENT" means any of the following:
(a) Approval by the stockholders of the Company (or, if no
stockholder approval is required, by the Board) of the dissolution or
liquidation of the Company, other than in the context of a transaction that does
not constitute a Change in Control Event under clause (b) below;
(b) Consummation of a Business Combination, unless (1) as a
result of the Business Combination, more than 50% of the outstanding voting
power of the Successor Entity immediately after the reorganization is, or will
be, owned, directly or indirectly, by holders of the Company's voting securities
immediately before the Business Combination; (2) no "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), excluding the Successor
Entity or an Excluded Person, beneficially owns, directly or indirectly, more
than 20% of the outstanding shares or the combined voting power of the
outstanding voting securities of the Successor Entity, after giving effect to
the Business Combination, except to the extent that such ownership existed prior
to the Business Combination; and (3) at least 50% of the members of the board of
directors of the entity resulting from the Business Combination were members of
the Board at the time of the execution of the initial agreement or of the action
of the Board approving the Business Combination;
(c) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act, but excluding any Excluded Person) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding voting securities, other
than as a result of (1) an acquisition directly from the Company; (2) an
acquisition by the Company; or (3) an acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or a Successor Entity;
or
(d) During any period not longer than two consecutive years,
individuals who at the beginning of such period constituted the Board cease to
constitute at least a majority thereof, unless the election, or the nomination
for election by the Company's stockholders, of each new Board member was
approved by a vote of at least two-thirds (2/3) of the Board members then still
in office who were Board members at the beginning of such period (including for
these purposes, new members whose election or nomination was so approved), but
excluding, for this purpose, any such individual whose initial
B-7
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMON SHARES" mean the Company's Common Stock, par value $0.20 per
share.
"COMPANY" means Occidental Petroleum Corporation, a Delaware
corporation.
"EFFECTIVE DATE" means the date this Plan shall become effective, as set
forth in Section 9 herein.
"ELIGIBLE PERSON" means any person who is an officer or employee of the
Company or any of its subsidiaries.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"EXCLUDED PERSON" means any employee benefit plan of the Company and any
trustee or other fiduciary holding securities under a Company employee benefit
plan or any person described in and satisfying the conditions of Rule
13d-1(b)(i) of the Exchange Act.
"FAIR MARKET VALUE" means the last reported sales price of a share of
Common Share on the New York Stock Exchange - Composite Transactions on the
relevant date or, if there are no reported sales on such date, then the last
reported sales price on the next preceding day on which such a sale is
transacted.
"ISO" means an incentive stock option qualified under Section 422 of the
Code.
"PERFORMANCE-BASED AWARD" means an award whose grant, vesting,
exercisability or payment depends upon on any one or more of the Performance
Objectives, in each case relative to Performance Goals, on an absolute or
relative basis (including comparisons to peer companies) or ratio with other
Performance Objectives, either as reported currency or constant currency,
pre-tax or after-tax, before or after special charges, for the Company on a
consolidated basis or for one or more subsidiaries, segments, divisions or
business units, or any combination of the foregoing. The applicable performance
period may range from one to five years.
"PERFORMANCE GOAL" means a preestablished targeted level or levels of
any one or more Performance Objectives.
"PERFORMANCE OBJECTIVES" mean any one or more of the following business
criteria: A/R day sales outstanding, A/R to sales, debt, debt to debt plus
stockholder equity, debt to EBIT or EBITDA, EBIT, EBITDA, EPS, EVA, expense
reduction, interest coverage, inventory to sales, inventory turns, net income,
operating cash flow, pre-tax margin, return on assets, return on capital
employed, return on equity, sales, stock price appreciation, and total
stockholder return (TSR), as defined further in Appendix A. These terms are used
as applied under generally accepted accounting principles (if applicable) and in
the Company's financial reporting.
"PLAN" means this Occidental Petroleum Corporation 2001 Incentive
Compensation Plan, as it may hereafter be amended from time to time.
"QUALIFYING OPTIONS" mean options and stock appreciation rights granted
with an exercise price not less than Fair Market Value on the date of grant.
Qualifying Options are Performance Based-Awards.
"RULE 16B-3" means Rule 16b-3 under Section 16 of the Exchange Act.
"SECTION 162(M)" means Section 162(m) of the Code and the applicable
regulations and interpretations thereunder.
"SECTION 162(M) AWARD" means a Performance-Based Award intended to
satisfy the requirements for "performance-based compensation" within the meaning
of Section 162(m).
"SHARE LIMIT" means the maximum number of Common Shares, as adjusted,
that may be delivered pursuant to all awards granted under this Plan.
"SUCCESSOR ENTITY" means the surviving or resulting entity or a parent
thereof of a Business Combination.
B-8
APPENDIX A TO 2001 INCENTIVE COMPENSATION PLAN
PERFORMANCE OBJECTIVES
The Performance Objectives shall have the meanings set forth below, in each
case as reported in the financial statements of the Company or applicable
subsidiary, division, segment, or unit ("financial statements").
A/R DAY SALES OUTSTANDING means trade accounts receivable (A/R)(net of
reserves) divided by latest historical day Sales.
A/R TO SALES means the ratio of accounts receivable to Sales.
DEBT means all accounts classified as such in the financial statements.
DEBT TO DEBT PLUS STOCKHOLDER EQUITY means the ratio of Debt to Debt plus
stockholder equity.
DEBT TO EBIT OR EBITDA means the ratio of Debt to EBIT or EBITDA.
EBIT means Net Income before interest expense and taxes, which may be
adjusted for special charges, if any.
EBITDA means Net Income before interest expense, taxes, depreciation and
amortization, which may be adjusted for special charges, if any.
EPS means Net Income divided by the weighted average number of Common
Shares outstanding. The shares outstanding may be adjusted to include the
dilutive effect of stock options, restricted stock and other dilutive financial
instruments as required by generally accepted accounting principles.
EVA means operating profit after tax (OPAT) (which is defined as Net Income
after tax but before tax adjusted interest income and expense and goodwill
amortization), less a charge for the use of capital (average total capital as
such term is used below under "Return on Capital Employed"). Net Income may be
adjusted for special charges and acquisition activity costs, if any. The charge
for capital is the percentage cost of capital times the average total capital.
The cost of capital is the weighted average cost of capital as calculated for
the Company.
EXPENSE REDUCTION means reduction in actual expense or an improvement in
the expense to Sales ratio compared to a target or prior year actual expense to
Sales ratio, which may be adjusted for special charges, if any.
INTEREST COVERAGE means the ratio of EBIT or EBITDA to interest expense.
Net Income may be adjusted for special charges.
INVENTORY TO SALES means the ratio of total inventory to Sales.
INVENTORY TURNS means the ratio of total cost of goods sold on a historical
basis to average net inventory. This ratio may be adjusted for special charges,
if any.
NET INCOME means the difference between total Sales plus other revenues and
net total costs and expenses, including income taxes.
OPERATING CASH FLOW means the net cash provided by operating activities
less net cash used by operations and investing activities as shown on the
statement of cash flows. The numbers relating to the foregoing may be adjusted
for special charges, if any.
PRE-TAX MARGIN means the ratio of earnings before income taxes to Sales.
Earnings may be adjusted for special charges, if any.
RETURN ON ASSETS means the ratio of Net Income to total average assets
including goodwill. Earnings may be adjusted for special charges and goodwill
amortization for comparative purposes.
RETURN ON CAPITAL EMPLOYED means the ratio of Net Income plus tax-effected
interest expense to long-term Debt plus stockholder equity.
RETURN ON EQUITY means the ratio of Net Income to stockholder equity.
SALES means sales, service and rental income from third parties net of
discounts, returns and allowances.
STOCK PRICE APPRECIATION means an increase, or an average annualized
increase, in the stock price or market value of the Common Shares of the Company
after purchase of, or the date of grant of, an award or above a specified stock
price.
TOTAL STOCKHOLDER RETURN OR TSR means the appreciation in the price of a
Common Share plus reinvested dividends over a specified period of time.
B-9
(PROXY CARD)
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
OCCIDENTAL PETROLEUM CORPORATION
DR. RAY R. IRANI, DR. DALE R. LAURANCE and AZIZ D. SYRIANI, and each of
them, with full power of substitution, are hereby authorized to represent and to
vote the shares of the undersigned in OCCIDENTAL PETROLEUM CORPORATION as
directed on the reverse side of this card and, in their discretion, on all other
matters which may properly come before the Annual Meeting of Stockholders to be
held on April 20, 2001, and at any adjournment, as if the undersigned were
present and voting at the meeting.
The shares represented by this proxy will be voted as directed on the
reverse side of this card. Where no direction is given, such shares will be
voted FOR Items 1, 2 and 3 and AGAINST Items 4 and 5. In the event any of the
nominees named on the reverse side of this card is unavailable for election or
unable to serve, the shares represented by this proxy may be voted for a
substitute nominee selected by the Board of Directors.
Your proxy will be kept confidential in accordance with the Confidential
Voting Policy described on page 1 of the Proxy Statement.
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
VOTE BY INTERNET, TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
INTERNET
HTTP://WWW.EPROXY.COM/OXY
Use the Internet to vote your proxy.
Have your proxy card in hand when you
access the web site. You will be prompted
to enter your control number, located in
the box on the reverse side, to create and
submit an electronic ballot.
OR
TELEPHONE
1-800-840-1208
Use any touch-tone telephone to
vote your proxy. Have your proxy card
in hand when you call. You will be
prompted to enter your control number,
located in the box on the reverse side,
and then follow the directions given.
OR
MAIL
Mark, sign and date your proxy card and
return it in the enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
DIRECTIONS TO FAIRMONT MIRAMAR HOTEL
AND PARKING FOR STOCKHOLDERS
o From the I-10 West (Santa Monica Freeway)
o Take 4th Street Exit, veer right and proceed to Colorado Blvd.
o Turn Left onto Colorado and proceed to Ocean Ave.
o Turn Right onto Ocean Ave and proceed 1/2 BLOCK PAST Wilshire Blvd.
o Please note that the address to the hotel is on Wilshire Blvd. PARKING IS
NORTH OF WILSHIRE ON OCEAN AVE. (Parking will not be permitted at the
Wilshire Blvd. entrance.)
o Enter Hotel Valet Parking driveway on Ocean Ave.
THE PARKING FEE AT THE FAIRMONT MIRAMAR HOTEL WILL BE PAID BY OCCIDENTAL
PETROLEUM CORPORATION
(REVERSE SIDE OF PROXY CARD)
he shares represented by this proxy card will be voted as directed below. WHERE
NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR ITEMS 1, 2 AND 3 AND
AGAINST ITEMS 4 AND 5. THIS PROXY CARD WILL BE KEPT CONFIDENTIAL IN ACCORDANCE
WITH THE CONFIDENTIAL VOTING POLICY DESCRIBED ON PAGE 1 OF THE PROXY STATEMENT.
Please mark
[ X ] your votes
as this
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEMS 1, 2 AND 3. FOR WITHHELD
ALL FOR ALL
ITEM 1 The election as directors of the
following nominees: [ ] [ ]
(1) Ronald W. Burkle (7) Dale R. Laurance
(2) John S. Chalsty (8) Irvin W. Maloney
(3) Edward P. Djerejian (9) Rodolfo Segovia
(4) John E. Feick (10) Aziz D. Syriani
(5) J. Roger Hirl (11) Rosemary Tomich
(6) Ray R. Irani
(To withhold authority to vote for any nominee(s), mark For all and write
nominee(s) name(s) in the space provided below.)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2 The ratification of the selection [ ] [ ] [ ]
of Arthur Andersen LLP as independent
public accountants.
ITEM 3 The approval of the 2001 [ ] [ ] [ ]
Incentive Compensation Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4 AND 5.
FOR AGAINST ABSTAIN
ITEM 4 The stockholder [ ] [ ] [ ]
proposal regarding
nominee reports.
ITEM 5 The stockholder [ ] [ ] [ ]
proposal regarding
operations in Colombia.
IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW
Please sign your name exactly as it appears printed hereon. When shares are held
by joint tenants, both should sign. Executors, administrators, guardians,
officers of corporations and others signing in a fiduciary capacity should sign
their full title as such.
Signature Date
------------------------------------------ -----------------------
Signature Date
------------------------------------------ -----------------------
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
VOTE BY INTERNET, TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
INTERNET
HTTP://WWW.EPROXY.COM/OXY
Use the Internet to vote your proxy.
Have your proxy card in hand when you
access the web site. You will be prompted
to enter your control number, located in
the box below, to create and submit an
electronic ballot.
OR
TELEPHONE
1-800-840-1208
Use any touch-tone telephone to
vote your proxy. Have your proxy card
in hand when you call. You will be
prompted to enter your control number,
located in the box below, and then follow
the directions given.
OR
MAIL
Mark, sign and date your proxy card and
return it in the enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
Bring this admission ticket with you to the meeting on April 20. Do not mail.
[OXY LOGO] OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
This admission ticket admits you and ONE guest to the meeting. You will NOT be
let in to the meeting without an admission ticket or other proof of stock
ownership as of March 2, 2001, the record date.
STARLIGHT BALLROOM MEETING HOURS
Fairmont Miramar Hotel Registration begins 9:30 A.M.
101 Wilshire Boulevard Refreshments from 9:30 to 10:30 A.M.
Santa Monica Meeting starts at 10:30 A.M.
ADMISSION TICKET
Please see the back of this card for parking instructions.
1265-A (SOR)
(VOTING INSTRUCTION CARD FOR THE OCCIDENTAL PETROLEUM CORPORATION SAVINGS PLAN)
OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO THE TRUSTEE OF THE OCCIDENTAL PETROLEUM CORPORATION SAVINGS PLAN:
I acknowledge receipt of the Notice of Annual Meeting of Stockholders of
Occidental Petroleum Corporation to be held on April 20, 2001, and the Proxy
Statement furnished in connection with the solicitation of proxies by
Occidental's Board of Directors. You are directed to vote the shares which are
held for my account pursuant to the Occidental Petroleum Corporation Savings
Plan in the manner indicated on the reverse side of this card and, in your
discretion, on all other matters which may properly come before such meeting and
at any adjournment.
My vote for the election of directors is indicated on the reverse side.
Nominees are: Dr. Ray R. Irani, Dr. Dale R. Laurance, Messrs. Ronald W. Burkle,
John S. Chalsty, Edward P. Djerejian, John E. Feick, J. Roger Hirl, Irvin W.
Maloney, Rodolfo Segovia, and Aziz D. Syriani and Miss Rosemary Tomich. In the
event any of the foregoing nominees is unavailable for election or unable to
serve, shares represented by this card may be voted for a substitute nominee
selected by the Board of Directors.
I UNDERSTAND THAT IN THE EVENT THAT I DO NOT RETURN THIS CARD, ANY SHARES
HELD FOR MY ACCOUNT IN THE OCCIDENTAL PETROLEUM CORPORATION SAVINGS PLAN WILL BE
VOTED BY YOU IN ACCORDANCE WITH THE DIRECTION OF THE PLAN'S ADMINISTRATIVE
COMMITTEE.
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
[OXY LOGO]
YOUR VOTE WILL BE KEPT CONFIDENTIAL IN ACCORDANCE WITH THE CONFIDENTIAL VOTING
POLICY DESCRIBED ON PAGE 1 OF THE PROXY STATEMENT.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
DIRECTIONS TO FAIRMONT MIRAMAR HOTEL
AND PARKING FOR STOCKHOLDERS
o From the I-10 West (Santa Monica Freeway)
o Take 4th Street Exit, veer right and proceed to Colorado Blvd.
o Turn Left onto Colorado and proceed to Ocean Ave.
o Turn Right onto Ocean Ave and proceed 1/2 BLOCK PAST Wilshire Blvd.
o Please note that the address to the hotel is on Wilshire Blvd. PARKING IS
NORTH OF WILSHIRE ON OCEAN AVE. (Parking will not be permitted at the
Wilshire Blvd. entrance.)
o Enter Hotel Valet Parking driveway on Ocean Ave.
THE PARKING FEE AT THE FAIRMONT MIRAMAR HOTEL WILL BE PAID BY OCCIDENTAL
PETROLEUM CORPORATION
(REVERSE SIDE OF VOTING INSTRUCTION CARD)
The shares represented by this voting instruction card will be voted as directed
below. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR ITEMS 1, 2 AND
3 AND AGAINST ITEMS 4 AND 5. THIS PROXY CARD WILL BE KEPT CONFIDENTIAL IN
ACCORDANCE WITH THE CONFIDENTIAL VOTING POLICY DESCRIBED ON PAGE 1 OF THE PROXY
STATEMENT.
Please mark
[ X ] your votes
as this
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEMS 1, 2 AND 3. FOR WITHHELD
ALL FOR ALL
ITEM 1 The election as directors of the
following nominees: [ ] [ ]
(1) Ronald W. Burkle (7) Dale R. Laurance
(2) John S. Chalsty (8) Irvin W. Maloney
(3) Edward P. Djerejian (9) Rodolfo Segovia
(4) John E. Feick (10) Aziz D. Syriani
(5) J. Roger Hirl (11) Rosemary Tomich
(6) Ray R. Irani
(To withhold authority to vote for any nominee(s), mark For all and write
nominee(s) name(s) in the space provided below.)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2 The ratification of the selection [ ] [ ] [ ]
of Arthur Andersen LLP as independent
public accountants.
ITEM 3 The approval of the 2001 [ ] [ ] [ ]
Incentive Compensation Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4 AND 5.
FOR AGAINST ABSTAIN
ITEM 4 The stockholder [ ] [ ] [ ]
proposal regarding
nominee reports.
ITEM 5 The stockholder [ ] [ ] [ ]
proposal regarding
operations in Colombia.
IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW
Please sign your name exactly as it appears printed hereon. When shares are held
by joint tenants, both should sign. Executors, administrators, guardians,
officers of corporations and others signing in a fiduciary capacity should sign
their full title as such.
Signature Date
------------------------------------------ -----------------------
Signature Date
------------------------------------------ -----------------------
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
VOTE BY INTERNET, TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
INTERNET
HTTP://WWW.EPROXY.COM/OXY
Use the Internet to vote your proxy.
Have your proxy card in hand when you
access the web site. You will be prompted
to enter your control number, located in
the box below, to create and submit an
electronic ballot.
OR
TELEPHONE
1-800-840-1208
Use any touch-tone telephone to
vote your proxy. Have your proxy card
in hand when you call. You will be
prompted to enter your control number,
located in the box below, and then follow
the directions given.
OR
MAIL
Mark, sign and date your proxy card and
return it in the enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
Bring this admission ticket with you to the meeting on April 20. Do not mail.
[OXY LOGO] OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
This admission ticket admits you and ONE guest to the meeting. You will NOT be
let in to the meeting without an admission ticket or other proof of stock
ownership as of March 2, 2001, the record date.
STARLIGHT BALLROOM MEETING HOURS
Fairmont Miramar Hotel Registration begins 9:30 A.M.
101 Wilshire Boulevard Refreshments from 9:30 to 10:30 A.M.
Santa Monica Meeting starts at 10:30 A.M.
ADMISSION TICKET
Please see the back of this card for parking instructions.
1265-B (PSA)
(VOTING INSTRUCTION CARD FOR THE OCCIDENTAL CHEMICAL CORPORATION SAVINGS AND
INVESTMENT PLAN)
OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO THE TRUSTEE OF OCCIDENTAL CHEMICAL CORPORATION
SAVINGS AND INVESTMENT PLAN:
I acknowledge receipt of the Notice of Annual Meeting of Stockholders of
Occidental Petroleum Corporation to be held on April 20, 2001, and the Proxy
Statement furnished in connection with the solicitation of proxies by
Occidental's Board of Directors. You are directed to vote the shares which are
held for my account pursuant to the Occidental Chemical Corporation Savings and
Investment Plan in the manner indicated on the reverse side of this card and, in
your discretion, on all other matters which may properly come before such
meeting and at any adjournment.
My vote for the election of directors is indicated on the reverse side.
Nominees are: Dr. Ray R. Irani, Dr. Dale R. Laurance, Messrs. Ronald W. Burkle,
John S. Chalsty, Edward P. Djerejian, John E. Feick, J. Roger Hirl, Irvin W.
Maloney, Rodolfo Segovia, and Aziz D. Syriani and Miss Rosemary Tomich. In the
event any of the foregoing nominees is unavailable for election or unable to
serve, shares represented by this card may be voted for a substitute nominee
selected by the Board of Directors.
I UNDERSTAND THAT IN THE EVENT THAT I DO NOT RETURN THIS CARD, ANY SHARES
HELD FOR MY ACCOUNT IN THE OCCIDENTAL CHEMICAL CORPORATION SAVINGS AND
INVESTMENT PLAN WILL BE VOTED BY YOU IN ACCORDANCE WITH THE DIRECTION OF THE
PLAN'S ADMINISTRATIVE COMMITTEE.
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
[OXY LOGO]
YOUR VOTE WILL BE KEPT CONFIDENTIAL IN ACCORDANCE WITH THE CONFIDENTIAL VOTING
POLICY DESCRIBED ON PAGE 1 OF THE PROXY STATEMENT.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
DIRECTIONS TO FAIRMONT MIRAMAR HOTEL
AND PARKING FOR STOCKHOLDERS
o From the I-10 West (Santa Monica Freeway)
o Take 4th Street Exit, veer right and proceed to Colorado Blvd.
o Turn Left onto Colorado and proceed to Ocean Ave.
o Turn Right onto Ocean Ave and proceed 1/2 BLOCK PAST Wilshire Blvd.
o Please note that the address to the hotel is on Wilshire Blvd. PARKING IS
NORTH OF WILSHIRE ON OCEAN AVE. (Parking will not be permitted at the
Wilshire Blvd. entrance.)
o Enter Hotel Valet Parking driveway on Ocean Ave.
THE PARKING FEE AT THE FAIRMONT MIRAMAR HOTEL WILL BE PAID BY OCCIDENTAL
PETROLEUM CORPORATION
(REVERSE SIDE OF VOTING INSTRUCTION CARD)
The shares represented by this voting instruction card will be voted as directed
below. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR ITEMS 1, 2 AND
3 AND AGAINST ITEMS 4 AND 5. THIS PROXY CARD WILL BE KEPT CONFIDENTIAL IN
ACCORDANCE WITH THE CONFIDENTIAL VOTING POLICY DESCRIBED ON PAGE 1 OF THE PROXY
STATEMENT.
Please mark
[ X ] your votes
as this
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEMS 1, 2 AND 3. FOR WITHHELD
ALL FOR ALL
ITEM 1 The election as directors of the
following nominees: [ ] [ ]
(1) Ronald W. Burkle (7) Dale R. Laurance
(2) John S. Chalsty (8) Irvin W. Maloney
(3) Edward P. Djerejian (9) Rodolfo Segovia
(4) John E. Feick (10) Aziz D. Syriani
(5) J. Roger Hirl (11) Rosemary Tomich
(6) Ray R. Irani
(To withhold authority to vote for any nominee(s), mark For all and write
nominee(s) name(s) in the space provided below.)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2 The ratification of the selection [ ] [ ] [ ]
of Arthur Andersen LLP as independent
public accountants.
ITEM 3 The approval of the 2001 [ ] [ ] [ ]
Incentive Compensation Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4 AND 5.
FOR AGAINST ABSTAIN
ITEM 4 The stockholder [ ] [ ] [ ]
proposal regarding
nominee reports.
ITEM 5 The stockholder [ ] [ ] [ ]
proposal regarding
operations in Colombia.
IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW
Please sign your name exactly as it appears printed hereon. When shares are held
by joint tenants, both should sign. Executors, administrators, guardians,
officers of corporations and others signing in a fiduciary capacity should sign
their full title as such.
Signature Date
------------------------------------------ -----------------------
Signature Date
------------------------------------------ -----------------------
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
VOTE BY INTERNET, TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
INTERNET
HTTP://WWW.EPROXY.COM/OXY
Use the Internet to vote your proxy.
Have your proxy card in hand when you
access the web site. You will be prompted
to enter your control number, located in
the box below, to create and submit an
electronic ballot.
OR
TELEPHONE
1-800-840-1208
Use any touch-tone telephone to
vote your proxy. Have your proxy card
in hand when you call. You will be
prompted to enter your control number,
located in the box below, and then follow
the directions given.
OR
MAIL
Mark, sign and date your proxy card and
return it in the enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
Bring this admission ticket with you to the meeting on April 20. Do not mail.
[OXY LOGO] OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
This admission ticket admits you and ONE guest to the meeting. You will NOT be
let in to the meeting without an admission ticket or other proof of stock
ownership as of March 2, 2001, the record date.
STARLIGHT BALLROOM MEETING HOURS
Fairmont Miramar Hotel Registration begins 9:30 A.M.
101 Wilshire Boulevard Refreshments from 9:30 to 10:30 A.M.
Santa Monica Meeting starts at 10:30 A.M.
ADMISSION TICKET
Please see the back of this card for parking instructions.
1265-C (SIP)
(VOTING INSTRUCTION CARD FOR THE OXY VINYLS, L.P. SAVINGS PLAN)
OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO THE TRUSTEE OF THE OXY VINYLS, L.P. SAVINGS PLAN:
I acknowledge receipt of the Notice of Annual Meeting of Stockholders of
Occidental Petroleum Corporation to be held on April 20, 2001, and the Proxy
Statement furnished in connection with the solicitation of proxies by
Occidental's Board of Directors. You are directed to vote the shares which are
held for my account pursuant to the Oxy Vinyls, L.P. Savings Plan in the manner
indicated on the reverse side of this card and, in your discretion, on all other
matters which may properly come before such meeting and at any adjournment.
My vote for the election of directors is indicated on the reverse side.
Nominees are: Dr. Ray R. Irani, Dr. Dale R. Laurance, Messrs. Ronald W. Burkle,
John S. Chalsty, Edward P. Djerejian, John E. Feick, J. Roger Hirl, Irvin W.
Maloney, Rodolfo Segovia, and Aziz D. Syriani and Miss Rosemary Tomich. In the
event any of the foregoing nominees is unavailable for election or unable to
serve, shares represented by this card may be voted for a substitute nominee
selected by the Board of Directors.
I UNDERSTAND THAT IN THE EVENT THAT I DO NOT RETURN THIS CARD, ANY SHARES
HELD FOR MY ACCOUNT IN THE OXY VINYLS, L.P. SAVINGS PLAN WILL BE VOTED BY YOU IN
ACCORDANCE WITH THE DIRECTION OF THE PLAN'S ADMINISTRATIVE COMMITTEE.
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
[OXY LOGO]
YOUR VOTE WILL BE KEPT CONFIDENTIAL IN ACCORDANCE WITH THE CONFIDENTIAL VOTING
POLICY DESCRIBED ON PAGE 1 OF THE PROXY STATEMENT.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
DIRECTIONS TO FAIRMONT MIRAMAR HOTEL
AND PARKING FOR STOCKHOLDERS
o From the I-10 West (Santa Monica Freeway)
o Take 4th Street Exit, veer right and proceed to Colorado Blvd.
o Turn Left onto Colorado and proceed to Ocean Ave.
o Turn Right onto Ocean Ave and proceed 1/2 BLOCK PAST Wilshire Blvd.
o Please note that the address to the hotel is on Wilshire Blvd. PARKING IS
NORTH OF WILSHIRE ON OCEAN AVE. (Parking will not be permitted at the
Wilshire Blvd. entrance.)
o Enter Hotel Valet Parking driveway on Ocean Ave.
THE PARKING FEE AT THE FAIRMONT MIRAMAR HOTEL WILL BE PAID BY OCCIDENTAL
PETROLEUM CORPORATION
(REVERSE SIDE OF VOTING INSTRUCTION CARD)
The shares represented by this voting instruction card will be voted as directed
below. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR ITEMS 1, 2 AND
3 AND AGAINST ITEMS 4 AND 5. THIS PROXY CARD WILL BE KEPT CONFIDENTIAL IN
ACCORDANCE WITH THE CONFIDENTIAL VOTING POLICY DESCRIBED ON PAGE 1 OF THE PROXY
STATEMENT.
Please mark
[ X ] your votes
as this
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEMS 1, 2 AND 3. FOR WITHHELD
ALL FOR ALL
ITEM 1 The election as directors of the
following nominees: [ ] [ ]
(1) Ronald W. Burkle (7) Dale R. Laurance
(2) John S. Chalsty (8) Irvin W. Maloney
(3) Edward P. Djerejian (9) Rodolfo Segovia
(4) John E. Feick (10) Aziz D. Syriani
(5) J. Roger Hirl (11) Rosemary Tomich
(6) Ray R. Irani
(To withhold authority to vote for any nominee(s), mark For all and write
nominee(s) name(s) in the space provided below.)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2 The ratification of the selection [ ] [ ] [ ]
of Arthur Andersen LLP as independent
public accountants.
ITEM 3 The approval of the 2001 [ ] [ ] [ ]
Incentive Compensation Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4 AND 5.
FOR AGAINST ABSTAIN
ITEM 4 The stockholder [ ] [ ] [ ]
proposal regarding
nominee reports.
ITEM 5 The stockholder [ ] [ ] [ ]
proposal regarding
operations in Colombia.
IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW
Please sign your name exactly as it appears printed hereon. When shares are held
by joint tenants, both should sign. Executors, administrators, guardians,
officers of corporations and others signing in a fiduciary capacity should sign
their full title as such.
Signature Date
------------------------------------------ -----------------------
Signature Date
------------------------------------------ -----------------------
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
VOTE BY INTERNET, TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
INTERNET
HTTP://WWW.EPROXY.COM/OXY
Use the Internet to vote your proxy.
Have your proxy card in hand when you
access the web site. You will be prompted
to enter your control number, located in
the box below, to create and submit an
electronic ballot.
OR
TELEPHONE
1-800-840-1208
Use any touch-tone telephone to
vote your proxy. Have your proxy card
in hand when you call. You will be
prompted to enter your control number,
located in the box below, and then follow
the directions given.
OR
MAIL
Mark, sign and date your proxy card and
return it in the enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
Bring this admission ticket with you to the meeting on April 20. Do not mail.
[OXY LOGO] OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
This admission ticket admits you and ONE guest to the meeting. You will NOT be
let in to the meeting without an admission ticket or other proof of stock
ownership as of March 2, 2001, the record date.
STARLIGHT BALLROOM MEETING HOURS
Fairmont Miramar Hotel Registration begins 9:30 A.M.
101 Wilshire Boulevard Refreshments from 9:30 to 10:30 A.M.
Santa Monica Meeting starts at 10:30 A.M.
ADMISSION TICKET
Please see the back of this card for parking instructions.
1265-D (OSA)
(PROXY CARD - BROKER)
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
OCCIDENTAL PETROLEUM CORPORATION
DR. RAY R. IRANI, DR. DALE R. LAURANCE and AZIZ D. SYRIANI, and each of
them, with full power of substitution, are hereby authorized to represent and to
vote the shares of the undersigned in OCCIDENTAL PETROLEUM CORPORATION as
directed on the reverse side of this card and, in their discretion, on all other
matters which may properly come before the Annual Meeting of Stockholders to be
held on April 20, 2001, and at any adjournment, as if the undersigned were
present and voting at the meeting.
The shares represented by this proxy will be voted as directed on the
reverse side of this card. Where no direction is given, such shares will be
voted FOR Items 1, 2 and 3 and AGAINST Items 4 and 5. In the event any of the
nominees named on the reverse side of this card is unavailable for election or
unable to serve, the shares represented by this proxy may be voted for a
substitute nominee selected by the Board of Directors.
If you wish to attend the Annual Meeting, you must bring proof of stock
ownership as of March 2, 2001, the record date, such as a bank or brokerage
statement or this proxy card.
1265-E (BRO)
(REVERSE SIDE OF PROXY CARD)
The shares represented by this voting instruction card will be voted as directed
below. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR ITEMS 1, 2 AND
3 AND AGAINST ITEMS 4 AND 5. THIS PROXY CARD WILL BE KEPT CONFIDENTIAL IN
ACCORDANCE WITH THE CONFIDENTIAL VOTING POLICY DESCRIBED ON PAGE 1 OF THE PROXY
STATEMENT.
Please mark
[ X ] your votes
as this
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEMS 1, 2 AND 3. FOR WITHHELD
ALL FOR ALL
ITEM 1 The election as directors of the
following nominees: [ ] [ ]
(1) Ronald W. Burkle (7) Dale R. Laurance
(2) John S. Chalsty (8) Irvin W. Maloney
(3) Edward P. Djerejian (9) Rodolfo Segovia
(4) John E. Feick (10) Aziz D. Syriani
(5) J. Roger Hirl (11) Rosemary Tomich
(6) Ray R. Irani
(To withhold authority to vote for any nominee(s), mark For all and write
nominee(s) name(s) in the space provided below.)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2 The ratification of the selection [ ] [ ] [ ]
of Arthur Andersen LLP as independent
public accountants.
ITEM 3 The approval of the 2001 [ ] [ ] [ ]
Incentive Compensation Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4 AND 5.
FOR AGAINST ABSTAIN
ITEM 4 The stockholder [ ] [ ] [ ]
proposal regarding
nominee reports.
ITEM 5 The stockholder [ ] [ ] [ ]
proposal regarding
operations in Colombia.
Please sign your name exactly as it appears printed hereon. Executors,
administrators, guardians, officers of corporations and others signing in a
fiduciary capacity should sign their full title as such.
Signature Date
------------------------------------------ -----------------------
Signature Date
------------------------------------------ -----------------------
(VOTING INSTRUCTION CARD FOR THE EMPLOYEES THRIFT PLAN OF OXY USA INC.)
OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO THE TRUSTEE OF THE EMPLOYEES THRIFT PLAN OF OXY USA INC.:
I acknowledge receipt of the Notice of Annual Meeting of Stockholders of
Occidental Petroleum Corporation to be held on April 20, 2001, and the Proxy
Statement furnished in connection with the solicitation of proxies by
Occidental's Board of Directors. You are directed to vote the shares which are
held for my account pursuant to the Employees Thrift Plan of OXY USA Inc. in the
manner indicated on the reverse side of this card and, in your discretion, on
all other matters which may properly come before such meeting and at any
adjournment.
My vote for the election of directors is indicated on the reverse side.
Nominees are: Dr. Ray R. Irani, Dr. Dale R. Laurance, Messrs. Ronald W. Burkle,
John S. Chalsty, Edward P. Djerejian, John E. Feick, J. Roger Hirl, Irvin W.
Maloney, Rodolfo Segovia, and Aziz D. Syriani and Miss Rosemary Tomich. In the
event any of the foregoing nominees is unavailable for election or unable to
serve, shares represented by this card may be voted for a substitute nominee
selected by the Board of Directors.
I UNDERSTAND THAT IN THE EVENT THAT I DO NOT RETURN THIS CARD, ANY SHARES
HELD FOR MY ACCOUNT IN THE EMPLOYEES THRIFT PLAN OF OXY USA INC. WILL BE VOTED
BY YOU IN ACCORDANCE WITH THE DIRECTION OF THE PLAN'S ADMINISTRATIVE COMMITTEE.
IF YOU WISH TO ATTEND THE ANNUAL MEETING, YOU MUST BRING PROOF OF STOCK
OWNERSHIP AS OF MARCH 2, 2001, THE RECORD, DATE SUCH AS A PLAN STATEMENT OR THIS
VOTING INSTRUCTION CARD.
1265-F (TUL)
(REVERSE SIDE OF VOTING INSTRUCTION CARD)
The shares represented by this voting instruction card will be voted as directed
below. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR ITEMS 1, 2 AND
3 AND AGAINST ITEMS 4 AND 5. THIS PROXY CARD WILL BE KEPT CONFIDENTIAL IN
ACCORDANCE WITH THE CONFIDENTIAL VOTING POLICY DESCRIBED ON PAGE 1 OF THE PROXY
STATEMENT.
Please mark
[ X ] your votes
as this
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEMS 1, 2 AND 3. FOR WITHHELD
ALL FOR ALL
ITEM 1 The election as directors of the
following nominees: [ ] [ ]
(1) Ronald W. Burkle (7) Dale R. Laurance
(2) John S. Chalsty (8) Irvin W. Maloney
(3) Edward P. Djerejian (9) Rodolfo Segovia
(4) John E. Feick (10) Aziz D. Syriani
(5) J. Roger Hirl (11) Rosemary Tomich
(6) Ray R. Irani
(To withhold authority to vote for any nominee(s), mark For all and write
nominee(s) name(s) in the space provided below.)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2 The ratification of the selection [ ] [ ] [ ]
of Arthur Andersen LLP as independent
public accountants.
ITEM 3 The approval of the 2001 [ ] [ ] [ ]
Incentive Compensation Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4 AND 5.
FOR AGAINST ABSTAIN
ITEM 4 The stockholder [ ] [ ] [ ]
proposal regarding
nominee reports.
ITEM 5 The stockholder [ ] [ ] [ ]
proposal regarding
operations in Colombia.
Please sign your name exactly as it appears printed hereon. Executors,
administrators, guardians, officers of corporations and others signing in a
fiduciary capacity should sign their full title as such.
Signature Date
------------------------------------------ -----------------------
Signature Date
------------------------------------------ -----------------------