Delaware (State or other jurisdiction of incorporation or organization) | 95-4035997 (I.R.S. Employer Identification No.) | |
5 Greenway Plaza, Suite 110 Houston, Texas (Address of principal executive offices) | 77046 (Zip Code) |
Class | Outstanding at June 30, 2015 | |||
Common stock $.20 par value | 763,951,136 |
PAGE | ||||
Part I | Financial Information | |||
Item 1. | ||||
June 30, 2015 and December 31, 2014 | ||||
Three and six months ended June 30, 2015 and 2014 | ||||
Three and six months ended June 30, 2015 and 2014 | ||||
Six months ended June 30, 2015 and 2014 | ||||
Item 2. | ||||
Item 3. | ||||
Item 4. | ||||
Part II | Other Information | |||
Item 1. | ||||
Item 2. | ||||
Item 6. |
Item 1. | Financial Statements (unaudited) |
2015 | 2014 | ||||||||
ASSETS | |||||||||
CURRENT ASSETS | |||||||||
Cash and cash equivalents | $ | 2,756 | $ | 3,789 | |||||
Restricted cash | 2,382 | 4,019 | |||||||
Trade receivables, net | 3,973 | 4,206 | |||||||
Inventories | 1,120 | 1,052 | |||||||
Other current assets | 777 | 807 | |||||||
Total current assets | 11,008 | 13,873 | |||||||
INVESTMENTS | |||||||||
Investment in unconsolidated entities | 1,330 | 1,171 | |||||||
Available for sale investment | 432 | 394 | |||||||
Total investments | 1,762 | 1,565 | |||||||
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation, depletion and amortization of $36,897 at June 30, 2015 and $34,785 at December 31, 2014 | 40,478 | 39,730 | |||||||
LONG-TERM RECEIVABLES AND OTHER ASSETS, NET | 1,121 | 1,091 | |||||||
TOTAL ASSETS | $ | 54,369 | $ | 56,259 | |||||
The accompanying notes are an integral part of these consolidated financial statements. |
2015 | 2014 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
CURRENT LIABILITIES | |||||||||
Current maturities of long-term debt | $ | 1,450 | $ | — | |||||
Accounts payable | 4,145 | 5,229 | |||||||
Accrued liabilities | 2,230 | 2,601 | |||||||
Domestic and foreign income taxes | — | 414 | |||||||
Total current liabilities | 7,825 | 8,244 | |||||||
LONG-TERM DEBT, NET | 6,880 | 6,838 | |||||||
DEFERRED CREDITS AND OTHER LIABILITIES | |||||||||
Deferred domestic and foreign income taxes | 3,153 | 3,015 | |||||||
Other | 3,209 | 3,203 | |||||||
6,362 | 6,218 | ||||||||
STOCKHOLDERS' EQUITY | |||||||||
Common stock, at par value (890,872,794 shares at June 30, 2015 and 890,557,537 shares December 31, 2014) | 178 | 178 | |||||||
Treasury stock (127,471,658 shares at June 30, 2015 and 119,951,199 shares at December 31, 2014) | (9,107 | ) | (8,528 | ) | |||||
Additional paid-in capital | 7,651 | 7,599 | |||||||
Retained earnings | 34,896 | 36,067 | |||||||
Accumulated other comprehensive loss | (316 | ) | (357 | ) | |||||
Total stockholders’ equity | 33,302 | 34,959 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 54,369 | $ | 56,259 | |||||
The accompanying notes are an integral part of these consolidated financial statements. |
Three months ended June 30 | Six months ended June 30 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
REVENUES AND OTHER INCOME | ||||||||||||||||
Net sales | $ | 3,469 | $ | 5,133 | $ | 6,558 | $ | 10,101 | ||||||||
Interest, dividends and other income | 26 | 47 | 57 | 77 | ||||||||||||
Gain (loss) on sale of assets, net | 19 | 525 | (5 | ) | 525 | |||||||||||
3,514 | 5,705 | 6,610 | 10,703 | |||||||||||||
COSTS AND OTHER DEDUCTIONS | ||||||||||||||||
Cost of sales | 1,480 | 1,691 | 3,037 | 3,334 | ||||||||||||
Selling, general and administrative and other operating expenses | 347 | 429 | 658 | 746 | ||||||||||||
Depreciation, depletion and amortization | 1,116 | 1,024 | 2,145 | 2,001 | ||||||||||||
Asset impairments and related items | — | 471 | 324 | 471 | ||||||||||||
Taxes other than on income | 107 | 144 | 214 | 295 | ||||||||||||
Exploration expense | 10 | 39 | 18 | 63 | ||||||||||||
Interest and debt expense, net | 8 | 20 | 38 | 42 | ||||||||||||
3,068 | 3,818 | 6,434 | 6,952 | |||||||||||||
Income before income taxes and other items | 446 | 1,887 | 176 | 3,751 | ||||||||||||
Provision for domestic and foreign income taxes | (324 | ) | (809 | ) | (305 | ) | (1,603 | ) | ||||||||
Income from equity investments | 58 | 83 | 94 | 150 | ||||||||||||
Income (loss) from continuing operations | 180 | 1,161 | (35 | ) | 2,298 | |||||||||||
Discontinued operations, net | (4 | ) | 273 | (7 | ) | 528 | ||||||||||
Net income (loss) | 176 | 1,434 | (42 | ) | 2,826 | |||||||||||
Less: Net income attributable to noncontrolling interest | — | (3 | ) | — | (5 | ) | ||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK | $ | 176 | $ | 1,431 | $ | (42 | ) | $ | 2,821 | |||||||
BASIC EARNINGS PER COMMON SHARE (attributable to common stock) | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.23 | $ | 1.48 | $ | (0.04 | ) | $ | 2.91 | |||||||
Discontinued operations, net | — | 0.35 | (0.01 | ) | 0.67 | |||||||||||
BASIC EARNINGS PER COMMON SHARE | $ | 0.23 | $ | 1.83 | $ | (0.05 | ) | $ | 3.58 | |||||||
DILUTED EARNINGS PER COMMON SHARE (attributable to common stock) | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.23 | $ | 1.47 | $ | (0.04 | ) | $ | 2.91 | |||||||
Discontinued operations, net | — | 0.35 | (0.01 | ) | 0.67 | |||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.23 | $ | 1.82 | $ | (0.05 | ) | $ | 3.58 | |||||||
DIVIDENDS PER COMMON SHARE | $ | 0.75 | $ | 0.72 | $ | 1.47 | $ | 1.44 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements. |
Three months ended June 30 | Six months ended June 30 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income (loss) attributable to common stock | $ | 176 | $ | 1,431 | $ | (42 | ) | $ | 2,821 | |||||||
Other comprehensive income (loss) items: | ||||||||||||||||
Foreign currency translation loss | — | — | (1 | ) | — | |||||||||||
Unrealized (loss) gain on available for sale investment | (112 | ) | — | 38 | — | |||||||||||
Unrealized loss on derivatives (a) | — | — | — | (5 | ) | |||||||||||
Pension and postretirement gain (b) | 2 | 5 | 4 | 9 | ||||||||||||
Reclassification to income of realized loss on derivatives (c) | — | — | — | 8 | ||||||||||||
Other comprehensive (loss) income, net of tax (d) | (110 | ) | 5 | 41 | 12 | |||||||||||
Comprehensive income (loss) | $ | 66 | $ | 1,436 | $ | (1 | ) | $ | 2,833 |
(a) | Net of tax of $3 for the six months ended June 30, 2014. |
(b) | Net of tax of $(1) and $(3) for the three months ended June 30, 2015 and 2014, respectively, and $(2) and $(5) for the six months ended June 30, 2015 and 2014. |
(c) | Net of tax of $(5) for the six months ended June 30, 2014. |
(d) | There were no other comprehensive income (loss) items related to noncontrolling interests in the three and six months ended 2015 and 2014, respectively. |
2015 | 2014 | ||||||||
CASH FLOW FROM OPERATING ACTIVITIES | |||||||||
Net income (loss) | $ | (42 | ) | $ | 2,826 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||
Discontinued operations, net | 7 | (528 | ) | ||||||
Depreciation, depletion and amortization of assets | 2,145 | 2,001 | |||||||
Deferred income tax provision (benefit) | 139 | (57 | ) | ||||||
Other noncash charges to income | 145 | 143 | |||||||
Asset impairments and related items | 236 | 471 | |||||||
Loss (gain) on sale of assets, net | 5 | (525 | ) | ||||||
Dry hole expenses | 3 | 33 | |||||||
Changes in operating assets and liabilities, net | (954 | ) | (48 | ) | |||||
Other operating, net | (307 | ) | — | ||||||
Operating cash flow from continuing operations | 1,377 | 4,316 | |||||||
Operating cash flow from discontinued operations | (11 | ) | 1,248 | ||||||
Net cash provided by operating activities | 1,366 | 5,564 | |||||||
CASH FLOW FROM INVESTING ACTIVITIES | |||||||||
Capital expenditures | (3,065 | ) | (3,924 | ) | |||||
Change in capital accrual | (585 | ) | — | ||||||
Payments for purchases of assets and businesses | (43 | ) | (307 | ) | |||||
Sale of assets, net | 58 | 1,371 | |||||||
Other, net | (254 | ) | (186 | ) | |||||
Investing cash flow from continuing operations | (3,889 | ) | (3,046 | ) | |||||
Investing cash flow from discontinued operations | — | (1,042 | ) | ||||||
Net cash used by investing activities | (3,889 | ) | (4,088 | ) | |||||
CASH FLOW FROM FINANCING ACTIVITIES | |||||||||
Change in restricted cash | 1,637 | — | |||||||
Payment of long-term debt | — | (107 | ) | ||||||
Proceeds from long-term debt, net | 1,478 | — | |||||||
Proceeds from issuance of common stock | 23 | 16 | |||||||
Purchases of treasury stock | (536 | ) | (1,576 | ) | |||||
Cash dividends paid | (1,113 | ) | (1,084 | ) | |||||
Contributions from noncontrolling interest | — | 272 | |||||||
Other, net | 1 | 1 | |||||||
Net cash provided (used by) financing activities | 1,490 | (2,478 | ) | ||||||
Decrease in cash and cash equivalents | (1,033 | ) | (1,002 | ) | |||||
Cash and cash equivalents — beginning of period | 3,789 | 3,393 | |||||||
Cash and cash equivalents — end of period | $ | 2,756 | $ | 2,391 | |||||
The accompanying notes are an integral part of these consolidated financial statements. |
Three months ended June 30 | Six months ended June 30 | |||||||
Sales and other operating revenue from discontinued operations | $ | 1,141 | $ | 2,261 | ||||
Income from discontinued operations before-tax | $ | 422 | $ | 812 | ||||
Income tax expense | (148 | ) | (286 | ) | ||||
Income from discontinued operations | $ | 274 | $ | 526 |
2015 | 2014 | ||||||||
Raw materials | $ | 74 | $ | 71 | |||||
Materials and supplies | 638 | 585 | |||||||
Finished goods | 497 | 485 | |||||||
1,209 | 1,141 | ||||||||
Revaluation to LIFO | (89 | ) | (89 | ) | |||||
Total | $ | 1,120 | $ | 1,052 |
Number of Sites | Reserve Balance (in millions) | |||||||
NPL sites | 32 | $ | 22 | |||||
Third-party sites | 65 | 92 | ||||||
Occidental-operated sites | 18 | 108 | ||||||
Closed or non-operated Occidental sites | 32 | 94 | ||||||
Total | 147 | $ | 316 |
Three months ended June 30 | 2015 | 2014 | ||||||||||||||
Net Periodic Benefit Costs | Pension Benefit | Post-retirement Benefit | Pension Benefit | Post-retirement Benefit | ||||||||||||
Service cost | $ | 2 | $ | 7 | $ | 3 | $ | 6 | ||||||||
Interest cost | 5 | 10 | 6 | 12 | ||||||||||||
Expected return on plan assets | (7 | ) | — | (9 | ) | — | ||||||||||
Recognized actuarial loss | 2 | 7 | 2 | 6 | ||||||||||||
Total | $ | 2 | $ | 24 | $ | 2 | $ | 24 |
Six months ended June 30 | 2015 | 2014 | ||||||||||||||
Net Periodic Benefit Costs | Pension Benefit | Post-retirement Benefit | Pension Benefit | Post-retirement Benefit | ||||||||||||
Service cost | $ | 4 | $ | 14 | $ | 6 | $ | 12 | ||||||||
Interest cost | 10 | 20 | 12 | 24 | ||||||||||||
Expected return on plan assets | (14 | ) | — | (17 | ) | — | ||||||||||
Recognized actuarial loss | 4 | 14 | 3 | 12 | ||||||||||||
Total | $ | 4 | $ | 48 | $ | 4 | $ | 48 |
Ø | Occidental values exchange-cleared commodity derivatives using closing prices provided by the exchange as of the balance sheet date. Those derivatives are classified as Level 1. Over-the-Counter (OTC) bilateral financial commodity contracts, foreign exchange contracts, options and physical commodity forward purchase and sale contracts are generally classified as Level 2 and are generally valued using quotations provided by brokers or industry-standard models that consider various inputs, including quoted forward prices for commodities, time value, volatility factors, credit risk and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument, and can be derived from observable data or are supported by observable prices at which transactions are executed in the marketplace. |
Ø | Occidental values commodity derivatives based on a market approach that considers various assumptions, including quoted forward commodity prices and market yield curves. The assumptions used include inputs |
Ø | Occidental values its available for sale investment in California Resources based on the closing share price of California Resources' common stock as of the balance sheet date. This investment is classified as Level 1. At June 30, 2015, Occidental had approximately 71.5 million shares of common stock of California Resources, which are recorded as a $432 million available for sale investment. |
Fair Value Measurements at June 30, 2015: | ||||||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Netting and Collateral | Total Fair Value | |||||||||||||||
Assets: | ||||||||||||||||||||
Commodity derivatives | $ | 139 | $ | 35 | $ | — | $ | (139 | ) | $ | 35 | |||||||||
Available for sale investment | $ | 432 | $ | — | $ | — | $ | — | $ | 432 | ||||||||||
Liabilities: | ||||||||||||||||||||
Commodity derivatives | $ | 130 | $ | 162 | $ | — | $ | (127 | ) | $ | 165 |
Fair Value Measurements at December 31, 2014: | ||||||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Netting and Collateral | Total Fair Value | |||||||||||||||
Assets: | ||||||||||||||||||||
Commodity derivatives | $ | 712 | $ | 127 | $ | — | $ | (742 | ) | $ | 97 | |||||||||
Available for sale investment | $ | 394 | $ | — | $ | — | $ | — | $ | 394 | ||||||||||
Liabilities: | ||||||||||||||||||||
Commodity derivatives | $ | 750 | $ | 246 | $ | — | $ | (756 | ) | $ | 240 |
Net Outstanding Position | |||||||
Long / (Short) | |||||||
Commodity | 2015 | 2014 | |||||
Oil (million barrels) | 76 | (9 | ) | ||||
Natural gas (billion cubic feet) | (33 | ) | (32 | ) | |||
Carbon dioxide (billion cubic feet) | 612 | 621 |
Asset Derivatives | Liability Derivatives | |||||||||||
June 30, 2015 | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives not designated as hedging instruments (a) | ||||||||||||
Commodity contracts | Other current assets | 166 | Accrued liabilities | 159 | ||||||||
Long-term receivables and other assets, net | 8 | Deferred credits and other liabilities | 133 | |||||||||
174 | 292 | |||||||||||
Total gross fair value | 174 | 292 | ||||||||||
Less: counterparty netting and cash collateral (b,d) | (139 | ) | (127 | ) | ||||||||
Total net fair value of derivatives | $ | 35 | $ | 165 |
Asset Derivatives | Liability Derivatives | |||||||||||
December 31, 2014 | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives not designated as hedging instruments (a) | ||||||||||||
Commodity contracts | Other current assets | 828 | Accrued liabilities | 886 | ||||||||
Long-term receivables and other assets, net | 11 | Deferred credits and other liabilities | 110 | |||||||||
839 | 996 | |||||||||||
Total gross fair value | 839 | 996 | ||||||||||
Less: counterparty netting and cash collateral (c,d) | (742 | ) | (756 | ) | ||||||||
Total net fair value of derivatives | $ | 97 | $ | 240 |
(a) | Fair values are presented at gross amounts, including when the derivatives are subject to master netting arrangements and presented on a net basis in the consolidated balance sheets. |
(b) | As of June 30, 2015, collateral received of $15 million has been netted against the derivative assets and collateral paid of $3 million has been netted against derivative liabilities. |
(c) | As of December 31, 2014, no collateral was received against the derivative assets and collateral paid of $8 million has been netted against derivative liabilities. |
(d) | Select clearinghouses and brokers require Occidental to post an initial margin deposit. Collateral, mainly for initial margin, of $7 million and $44 million deposited by Occidental has not been reflected in these derivative fair value tables as of June 30, 2015 and December 31, 2014, respectively. This collateral is included in other current assets in the consolidated balance sheets as of June 30, 2015 and December 31, 2014, respectively. |
Oil | Midstream | Corporate | ||||||||||||||||||
and | and | and | ||||||||||||||||||
Gas | Chemical | Marketing | Eliminations | Total | ||||||||||||||||
Three months ended June 30, 2015 | ||||||||||||||||||||
Net sales | $ | 2,342 | $ | 1,030 | $ | 294 | $ | (197 | ) | $ | 3,469 | |||||||||
Pre-tax operating profit (loss) | $ | 355 | $ | 136 | $ | 87 | $ | (74 | ) | (b) | $ | 504 | ||||||||
Income taxes | — | — | — | (324 | ) | (c) | (324 | ) | ||||||||||||
Discontinued operations, net | — | — | — | (4 | ) | (4 | ) | |||||||||||||
Net income (loss) attributable to common stock | $ | 355 | $ | 136 | $ | 87 | $ | (402 | ) | $ | 176 | |||||||||
Three months ended June 30, 2014 | ||||||||||||||||||||
Net sales | $ | 3,703 | $ | 1,242 | $ | 440 | $ | (252 | ) | $ | 5,133 | |||||||||
Pre-tax operating profit (loss) | $ | 1,767 | $ | 133 | $ | 211 | $ | (141 | ) | (b) | $ | 1,970 | ||||||||
Income taxes | — | — | — | (809 | ) | (c) | (809 | ) | ||||||||||||
Discontinued operations, net | — | — | — | 273 | 273 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | (3 | ) | — | (3 | ) | |||||||||||||
Net income (loss) attributable to common stock | $ | 1,767 | $ | 133 | $ | 208 | $ | (677 | ) | $ | 1,431 |
Oil | Midstream | Corporate | ||||||||||||||||||
and | and | and | ||||||||||||||||||
Gas | Chemical | Marketing | Eliminations | Total | ||||||||||||||||
Six months ended June 30, 2015 | ||||||||||||||||||||
Net sales | $ | 4,351 | $ | 2,030 | $ | 491 | $ | (314 | ) | $ | 6,558 | |||||||||
Pre-tax operating profit (loss) | $ | 89 | (a) | $ | 275 | $ | 72 | $ | (166 | ) | (a,b) | $ | 270 | |||||||
Income taxes | — | — | — | (305 | ) | (c) | (305 | ) | ||||||||||||
Discontinued operations, net | — | — | — | (7 | ) | (7 | ) | |||||||||||||
Net income (loss) attributable to common stock | $ | 89 | $ | 275 | $ | 72 | $ | (478 | ) | $ | (42 | ) | ||||||||
Six months ended June 30, 2014 | ||||||||||||||||||||
Net sales | $ | 7,305 | $ | 2,462 | $ | 780 | $ | (446 | ) | $ | 10,101 | |||||||||
Pre-tax operating profit (loss) | $ | 3,486 | $ | 269 | $ | 375 | $ | (229 | ) | (b) | $ | 3,901 | ||||||||
Income taxes | — | — | — | (1,603 | ) | (c) | (1,603 | ) | ||||||||||||
Discontinued operations, net | — | — | — | 528 | 528 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | (5 | ) | — | (5 | ) | |||||||||||||
Net income (loss) attributable to common stock | $ | 3,486 | $ | 269 | $ | 370 | $ | (1,304 | ) | $ | 2,821 |
Three months ended June 30 | Six months ended June 30 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Basic EPS | ||||||||||||||||
Income (loss) from continuing operations | 180 | $ | 1,161 | $ | (35 | ) | $ | 2,298 | ||||||||
Less: Income from continuing operations attributable to noncontrolling interest | — | (3 | ) | — | (5 | ) | ||||||||||
Income (loss) from continuing operations attributable to common stock | 180 | 1,158 | (35 | ) | 2,293 | |||||||||||
Discontinued operations, net | (4 | ) | 273 | (7 | ) | 528 | ||||||||||
Net income (loss) | 176 | 1,431 | (42 | ) | 2,821 | |||||||||||
Less: Net income allocated to participating securities | — | (3 | ) | — | (4 | ) | ||||||||||
Net income (loss), net of participating securities | 176 | 1,428 | (42 | ) | 2,817 | |||||||||||
Weighted average number of basic shares | 766.4 | 782.6 | 768.0 | 786.9 | ||||||||||||
Basic EPS | $ | 0.23 | $ | 1.83 | $ | (0.05 | ) | $ | 3.58 | |||||||
Diluted EPS | ||||||||||||||||
Net income (loss), net of participating securities | $ | 176 | $ | 1,428 | $ | (42 | ) | $ | 2,817 | |||||||
Weighted average number of basic shares | 766.4 | 782.6 | 768.0 | 786.9 | ||||||||||||
Dilutive effect of potentially dilutive securities | 0.2 | 0.3 | — | 0.3 | ||||||||||||
Total diluted weighted average common shares | 766.6 | 782.9 | 768.0 | 787.2 | ||||||||||||
Diluted EPS | $ | 0.23 | $ | 1.82 | $ | (0.05 | ) | $ | 3.58 |
Three months ended June 30 | Six months ended June 30 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net Sales (a) | ||||||||||||||||
Oil and Gas | $ | 2,342 | $ | 3,703 | $ | 4,351 | $ | 7,305 | ||||||||
Chemical | 1,030 | 1,242 | 2,030 | 2,462 | ||||||||||||
Midstream and Marketing | 294 | 440 | 491 | 780 | ||||||||||||
Eliminations | (197 | ) | (252 | ) | (314 | ) | (446 | ) | ||||||||
$ | 3,469 | $ | 5,133 | $ | 6,558 | $ | 10,101 | |||||||||
Segment Earnings (b) | ||||||||||||||||
Oil and Gas | $ | 355 | $ | 1,767 | $ | 89 | $ | 3,486 | ||||||||
Chemical | 136 | 133 | 275 | 269 | ||||||||||||
Midstream and Marketing (c) | 87 | 208 | 72 | 370 | ||||||||||||
578 | 2,108 | 436 | 4,125 | |||||||||||||
Unallocated Corporate Items (b) | ||||||||||||||||
Interest expense, net | (7 | ) | (18 | ) | (35 | ) | (38 | ) | ||||||||
Income taxes | (324 | ) | (809 | ) | (305 | ) | (1,603 | ) | ||||||||
Other expense, net | (67 | ) | (123 | ) | (131 | ) | (191 | ) | ||||||||
Income (loss) from continuing operations (c) | 180 | 1,158 | (35 | ) | 2,293 | |||||||||||
Discontinued operations, net | (4 | ) | 273 | (7 | ) | 528 | ||||||||||
Net income (loss) attributable to common stock (c) | $ | 176 | $ | 1,431 | $ | (42 | ) | $ | 2,821 |
Three months ended June 30 | Six months ended June 30 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Oil and Gas | ||||||||||||||||
Hugoton sale gain and adjustments | $ | (1 | ) | $ | 535 | $ | (1 | ) | $ | 535 | ||||||
Asset impairments and related items - Domestic | 14 | (471 | ) | (250 | ) | (471 | ) | |||||||||
Asset impairments and related items - International | (1 | ) | — | (47 | ) | — | ||||||||||
Asset sales gain | 19 | — | 6 | — | ||||||||||||
Total Oil and Gas | $ | 31 | $ | 64 | $ | (292 | ) | $ | 64 | |||||||
Chemical | ||||||||||||||||
No significant items affecting earnings | $ | — | $ | — | $ | — | $ | — | ||||||||
Total Chemical | $ | — | $ | — | $ | — | $ | — | ||||||||
Midstream and Marketing | ||||||||||||||||
Asset Impairments and related items | $ | 3 | $ | 78 | $ | (7 | ) | $ | 144 | |||||||
Total Midstream and Marketing | $ | 3 | $ | 78 | $ | (7 | ) | $ | 144 | |||||||
Corporate | ||||||||||||||||
Asset sales loss | $ | — | $ | — | $ | (11 | ) | $ | — | |||||||
Spin-off costs and related items | (6 | ) | (16 | ) | (20 | ) | (16 | ) | ||||||||
Tax effect of pre-tax adjustments | (13 | ) | (50 | ) | 99 | (76 | ) | |||||||||
Discontinued operations, net* | (4 | ) | 273 | (7 | ) | 528 | ||||||||||
Total Corporate | $ | (23 | ) | $ | 207 | $ | 61 | $ | 436 | |||||||
Total | $ | 11 | $ | 349 | $ | (238 | ) | $ | 644 |
Three months ended June 30 | Six months ended June 30 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Oil and Gas earnings | $ | 355 | $ | 1,767 | $ | 89 | $ | 3,486 | ||||||||
Chemical earnings | 136 | 133 | 275 | 269 | ||||||||||||
Midstream and Marketing earnings | 87 | 208 | 72 | 370 | ||||||||||||
Unallocated corporate items | (74 | ) | (141 | ) | (166 | ) | (229 | ) | ||||||||
Pre-tax income | 504 | 1,967 | 270 | 3,896 | ||||||||||||
Income tax expense (benefit) | ||||||||||||||||
Federal and state | (47 | ) | 278 | (172 | ) | 519 | ||||||||||
Foreign | 371 | 531 | 477 | 1,084 | ||||||||||||
Total | 324 | 809 | 305 | 1,603 | ||||||||||||
Income (loss) from continuing operations (a) | $ | 180 | $ | 1,158 | $ | (35 | ) | $ | 2,293 | |||||||
Worldwide effective tax rate | 64 | % | 41 | % | 113 | % | 41 | % |
Three months ended June 30 | Six months ended June 30 | |||||||||||
Production per Day | 2015 | 2014 | 2015 | 2014 | ||||||||
Oil (MBBL) | ||||||||||||
United States (a) | 205 | 179 | 201 | 175 | ||||||||
Middle East/North Africa | 188 | 174 | 189 | 169 | ||||||||
Latin America | 40 | 19 | 39 | 24 | ||||||||
NGLs (MBBL) | ||||||||||||
United States (a) | 55 | 53 | 55 | 54 | ||||||||
Middle East/North Africa | 12 | 7 | 11 | 7 | ||||||||
Natural Gas (MMCF) | ||||||||||||
United States (a) | 437 | 459 | 441 | 460 | ||||||||
Middle East/North Africa | 498 | 420 | 488 | 412 | ||||||||
Latin America | 10 | 12 | 11 | 12 | ||||||||
Total production (MBOE) (a,b) | 658 | 580 | 652 | 576 | ||||||||
Three months ended June 30 | Six months ended June 30 | |||||||||||
Sales Volumes per Day | 2015 | 2014 | 2015 | 2014 | ||||||||
Oil (MBBL) | ||||||||||||
United States (a) | 205 | 179 | 201 | 175 | ||||||||
Middle East/North Africa | 192 | 168 | 188 | 160 | ||||||||
Latin America | 35 | 24 | 35 | 28 | ||||||||
NGLs (MBBL) | ||||||||||||
United States (a) | 55 | 53 | 55 | 54 | ||||||||
Middle East/North Africa | 12 | 7 | 11 | 7 | ||||||||
Natural Gas (MMCF) | ||||||||||||
United States (a) | 437 | 459 | 441 | 460 | ||||||||
Middle East/North Africa | 498 | 420 | 488 | 412 | ||||||||
Latin America | 10 | 12 | 11 | 12 | ||||||||
Total sales volumes (MBOE) (a,b) | 657 | 579 | 647 | 571 |
Three months ended June 30 | Six months ended June 30 | |||||||||||||||
Average Realized Prices | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Oil ($/BBL) | ||||||||||||||||
United States | $ | 52.64 | $ | 93.70 | $ | 48.25 | $ | 93.14 | ||||||||
Middle East/North Africa | $ | 56.48 | $ | 105.15 | $ | 55.27 | $ | 104.91 | ||||||||
Latin America | $ | 55.19 | $ | 101.30 | $ | 51.43 | $ | 99.73 | ||||||||
Total Worldwide | $ | 54.55 | $ | 99.30 | $ | 51.60 | $ | 98.73 | ||||||||
NGLs ($/BBL) | ||||||||||||||||
United States | $ | 17.32 | $ | 42.17 | $ | 17.32 | $ | 42.12 | ||||||||
Middle East/North Africa | $ | 21.38 | $ | 32.00 | $ | 21.46 | $ | 34.94 | ||||||||
Total Worldwide | $ | 18.06 | $ | 40.98 | $ | 18.01 | $ | 41.34 | ||||||||
Natural Gas ($/MCF) | ||||||||||||||||
United States | $ | 2.09 | $ | 4.15 | $ | 2.29 | $ | 4.28 | ||||||||
Latin America | $ | 5.49 | $ | 10.99 | $ | 4.98 | $ | 10.90 | ||||||||
Total Worldwide | $ | 1.48 | $ | 2.68 | $ | 1.57 | $ | 2.79 |
Three months ended June 30 | Six months ended June 30 | |||||||||||||||
Average Index Prices | 2015 | 2014 | 2015 | 2014 | ||||||||||||
WTI oil ($/BBL) | $ | 57.94 | $ | 102.99 | $ | 53.29 | $ | 100.84 | ||||||||
Brent oil ($/BBL) | $ | 63.50 | $ | 109.77 | $ | 59.33 | $ | 108.83 | ||||||||
NYMEX gas ($/MCF) | $ | 2.73 | $ | 4.55 | $ | 2.90 | $ | 4.61 |
Average Realized Prices as Percentage of Average Index Prices | Three months ended June 30 | Six months ended June 30 | ||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Worldwide oil as a percentage of average WTI | 94 | % | 96 | % | 97 | % | 98 | % | ||||
Worldwide oil as a percentage of average Brent | 86 | % | 90 | % | 87 | % | 91 | % | ||||
Worldwide NGLs as a percentage of average WTI | 31 | % | 40 | % | 34 | % | 41 | % | ||||
Domestic natural gas as a percentage of average NYMEX | 77 | % | 91 | % | 79 | % | 93 | % |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (a) | |||||||||
First Quarter 2015 | 2,750,835 | (b) | $ | 75.07 | 2,650,000 | ||||||||
April 1 - 30, 2015 | — | $ | — | — | |||||||||
May 1 - 31, 2015 | 1,533,000 | $ | 76.94 | 1,533,000 | |||||||||
June 1 - 30, 2015 | 3,236,624 | $ | 78.58 | 3,236,624 | |||||||||
Second Quarter 2015 | 4,769,624 | $ | 78.05 | 4,769,624 | |||||||||
Total | 7,520,459 | $ | 76.96 | 7,419,624 | 63,756,544 |
(a) | Represents the total number of shares remaining at June 30, 2015 under Occidental's share repurchase program of 185 million shares. The program was initially announced in 2005. The program does not obligate Occidental to acquire any specific number of shares and may be discontinued at any time. |
(b) | Includes purchases from the trustee of Occidental's defined contribution savings plan that are not part of publicly announced plans or programs. |
4.1* | Indenture, dated as of August 18, 2011, between Occidental and The Bank of New York Mellon Trust Company, N.A. (filed as Exhibit 4.1 to the Current Report on Form 8-K of Occidental dated August 15, 2011 (date of earliest event reported), filed August 19, 2011, File No. 1-9210). |
4.2* | Officers’ Certificate of Occidental Petroleum Corporation dated June 23, 2015 establishing the 3.500% Senior Notes due 2025 and the 4.625% Senior Notes due 2045 (filed as Exhibit 4.2 to the Current Report on Form 8-K of Occidental dated June 18, 2015 (date of earliest event reported), filed June 23, 2015, File No. 1-9210). |
4.3* | Form of 3.500% Senior Notes due 2025 (included as Exhibit A to Exhibit 4.2) (filed as Exhibit 4.3 to the Current Report on Form 8-K of Occidental dated June 18, 2015 (date of earliest event reported), filed June 23, 2015, File No. 1-9210). |
4.4* | Form of 4.625% Senior Notes due 2045 (included as Exhibit B to Exhibit 4.2) (filed as Exhibit 4.4 to the Current Report on Form 8-K of Occidental dated June 18, 2015 (date of earliest event reported), filed June 23, 2015, File No. 1-9210). |
10.1 | Form of Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Common Stock Unit Award For Non-Employee Directors Grant Agreement. |
10.2 | Form of Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Common Stock Award For Non-Employee Directors Grant Agreement. |
10.3 | Separation Agreement by and between Occidental Petroleum Corporation and W.C.W (Willie) Chiang, dated June 10, 2015. |
10.4 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Restricted Stock Unit Incentive Award. |
10.5 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Performance Retention Incentive Award. |
10.6 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Return on Assets Incentive Award (MENA). |
10.7 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Return on Assets Incentive Award (Total). |
10.8 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Return on Capital Employed Incentive Award. |
10.9 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Total Shareholder Return Incentive Award. |
10.10 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Notice of Grant of Return on Capital Employed Incentive Award for Stephen I. Chazen. |
10.11 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Notice of Grant of Performance Retention Incentive Award for Stephen I. Chazen. |
12 | Statement regarding the computation of total enterprise ratios of earnings to fixed charges for the three months ended June 30, 2015 and 2014, and for each of the five years in the period ended December 31, 2014. |
31.1 | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certifications of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema Document. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
OCCIDENTAL PETROLEUM CORPORATION |
DATE: | August 4, 2015 | /s/ Jennifer M. Kirk | |
Jennifer M. Kirk | |||
Vice President, Controller and | |||
Principal Accounting Officer |
4.1* | Indenture, dated as of August 18, 2011, between Occidental and The Bank of New York Mellon Trust Company, N.A. (filed as Exhibit 4.1 to the Current Report on Form 8-K of Occidental dated August 15, 2011 (date of earliest event reported), filed August 19, 2011, File No. 1-9210). |
4.2* | Officers’ Certificate of Occidental Petroleum Corporation dated June 23, 2015 establishing the 3.500% Senior Notes due 2025 and the 4.625% Senior Notes due 2045 (filed as Exhibit 4.2 to the Current Report on Form 8-K of Occidental dated June 18, 2015 (date of earliest event reported), filed June 23, 2015, File No. 1-9210). |
4.3* | Form of 3.500% Senior Notes due 2025 (included as Exhibit A to Exhibit 4.2) (filed as Exhibit 4.3 to the Current Report on Form 8-K of Occidental dated June 18, 2015 (date of earliest event reported), filed June 23, 2015, File No. 1-9210). |
4.4* | Form of 4.625% Senior Notes due 2045 (included as Exhibit B to Exhibit 4.2) (filed as Exhibit 4.4 to the Current Report on Form 8-K of Occidental dated June 18, 2015 (date of earliest event reported), filed June 23, 2015, File No. 1-9210). |
10.1 | Form of Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Common Stock Unit Award For Non-Employee Directors Grant Agreement. |
10.2 | Form of Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Common Stock Award For Non-Employee Directors Grant Agreement. |
10.3 | Separation Agreement by and between Occidental Petroleum Corporation and W.C.W (Willie) Chiang, dated June 10, 2015. |
10.4 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Restricted Stock Unit Incentive Award. |
10.5 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Performance Retention Incentive Award. |
10.6 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Return on Assets Incentive Award (MENA). |
10.7 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Return on Assets Incentive Award (Total). |
10.8 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Return on Capital Employed Incentive Award. |
10.9 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Form of Notice of Grant of Total Shareholder Return Incentive Award. |
10.10 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Notice of Grant of Return on Capital Employed Incentive Award for Stephen I. Chazen. |
10.11 | Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Notice of Grant of Performance Retention Incentive Award for Stephen I. Chazen. |
12 | Statement regarding the computation of total enterprise ratios of earnings to fixed charges for the three months ended June 30, 2015 and 2014, and for each of the five years in the period ended December 31, 2014. |
31.1 | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certifications of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema Document. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
A. | You previously entered into an offer letter with Employer dated April 19, 2012, setting forth certain terms and conditions of employment (your “Offer Letter”); |
B. | You have been employed as a full-time employee of Employer or its subsidiaries or affiliates (collectively, “OPC”) since June 11, 2012; and |
1. | Effective Date of Agreement: This Agreement will take effect immediately at the time you sign this Agreement and return it to Employer (the “Effective Date”). |
2. | Separation and Separation Date: Your employment by Employer will end at 11:59 p.m. on June 10, 2015 (your “Separation Date”), which is prior to the third anniversary of your date of hire. You have requested, and Employer has agreed, that you will be deemed to have retired with the consent of Employer and your rights under award agreements or other benefit plans and programs will be determined accordingly, except as expressly provided in Paragraphs 3, 4 or 5. |
3. | Separation Payments: If this Agreement becomes effective as provided in Paragraph 1, Employer shall provide you with separation payments (your “Separation Pay”) in accordance with the terms of your Offer Letter as follows: |
(a) | You will receive separation pay for the twelve-month period that begins at 12:00 a.m. on June 11, 2015 and concludes at 11:59 p.m. on June 10, 2016 (the “Separation Pay Period”). |
(b) | Your Separation Pay will be comprised of 24 semimonthly payments each equal to twenty six thousand, forty-one dollars and sixty-six cents ($26,041.66), reduced by appropriate deductions for applicable taxes and any medical and dental coverage provided pursuant to Paragraph 4 below. Your Separation Pay will be paid to you on your regular payday, commencing on the first regular payday occurring on or after the Effective Date, by using your choice of direct deposit or by check mailed to the address on file or to another address that you identify in Paragraph 18. |
(c) | Notwithstanding the foregoing, no amount of the Separation Pay shall be paid to you before the date (the “Delayed Payment Date”) which is the first day of the seventh month after the Separation Date or, if earlier, the date of your death following the Separation Date. All such amounts that would, but for the preceding sentence, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date. No interest will be paid by Employer with respect to any such delayed payments. |
4. | Medical and Dental Benefits: Any benefits provided pursuant to this Paragraph 4 will be subject to the terms and conditions governing the applicable medical or dental plan, including, without limitation, the right of OPC to modify, amend, change or terminate such plan at any time. |
(a) | Medical Coverage: Provided that you are a participant in the medical plan on your Separation Date, you and any eligible enrolled dependents may continue to participate during the period that commences at 12:00 a.m. on June 11, 2015 and concludes at 11:59 p.m. on April 10, 2016 (the “Medical Coverage Period”). During the Medical Coverage Period, you and any eligible enrolled dependents may continue to participate in the medical plan at the active participant rate, but on an after-tax basis, for the same coverage then in effect or as changed in the future for active participants. At the end of the Medical Coverage Period, if you are then enrolled in the plan, you will be eligible for COBRA coverage, at your sole expense, for the period established by COBRA. |
(b) | Dental Coverage: Provided that you are a participant in the dental plan on your Separation Date, you and any eligible enrolled dependents may continue to participate during the Medical Coverage Period at the active participant rate, but on an after-tax basis, for the same coverage then in effect or as changed in the future for active plan participants. At the end of the Medical Coverage Period, if you are then enrolled in the plan, you will be eligible for COBRA coverage, at your sole expense, for the period established by COBRA. |
5. | Other Benefit Plans and Programs: Except as expressly provided in Paragraphs 3 or 4 and this Paragraph 5, commencing the first day after your Separation Date, you will cease to be eligible to participate in any employee benefit or compensation plans or programs offered by OPC. Any benefits or compensation will be subject to the terms and conditions governing the applicable benefit or compensation plan, including, without limitation, the right of OPC to modify, amend, change or terminate such plan at any time. |
(a) | Executive Incentive Compensation Plan (the “EICP”): In accordance with the terms of your Offer Letter: |
(b) | 2005 Long-Term Incentive Plan (the “2005 LTIP”): |
(c) | Occidental Petroleum Corporation Savings Plan (the “PSA”) and Occidental Petroleum Corporation Savings Retirement Plan (the “PRA”): After your Separation Date: (i) you will be eligible to receive distributions or make withdrawals from the PSA and PRA in accordance with the terms of such plan, and; (ii) you will not be eligible to make or receive contributions to either the PSA or the PRA. |
(d) | Supplemental Retirement Plan (“SRP II”): You previously elected to receive your distribution from the SRP II as a lump sum distribution following your separation from service. You will receive a lump sum distribution of your SRP II account balance in March of 2016. After your Separation Date, you will not be eligible to make or receive further contributions to SRP II. |
(e) | Health Savings Account (“HSA”): If you participate in a high deductible health plan and you also elect to contribute to an HSA, Employer contributions and automatic payroll deductions for your HSA will cease as of your Separation Date. After your Separation Date, you may contribute directly to your HSA provider. |
(f) | Flexible Spending Account (“FSA”): If you contribute to a Health Care Spending Account or a Dependent Care Spending Account, or both, your automatic pre-tax payroll contributions will cease as of your Separation Date. Eligible expenses incurred through your Separation Date up to the balance in your account with respect to dependent care expenses and up to the amount you elected for the year for eligible health care expenses may be submitted for reimbursement. After your Separation Date, you will be eligible to continue participation in the Health Care FSA through COBRA coverage, on an after-tax basis, for the period established by COBRA. |
(g) | Sign on Long Term Incentives: Under the terms of your Offer Letter, you were awarded restricted shares with an initial value based on the closing price of Employer stock on the date of the award. These restricted shares were vested at grant and, pursuant to the terms of the award, as of June 11, 2015, the requirement to hold not less than 50% of the net after-tax shares received will lapse. |
(h) | Accrued Paid Time Off: Pursuant to OPC common practice, you will be paid all accrued paid time off without regard to your retirement. |
(i) | No Other Separation Benefits: Notwithstanding anything in this Agreement to the contrary, you hereby acknowledge and agree that this Agreement is in lieu of and automatically disqualifies you from participating in all plans, programs or arrangements of separation, severance, termination or pay continuation announced or maintained heretofore or hereafter by OPC, except as expressly provided in this Agreement. |
6. | Restrictive Covenants: Employer has provided you access to confidential information for use only during your employment with OPC and you have during your employment been entrusted, in a unique and special capacity, with developing the goodwill of OPC, and in consideration thereof and in consideration of Employer providing you with access to confidential information, you have voluntarily agreed to the covenants set forth in this Paragraph. You further agree and acknowledge that the limitations and restrictions set forth herein, including geographical and temporal restrictions on certain competitive activities, are reasonable in all respects and not oppressive, will not cause you undue hardship, and are material and substantial parts of this Agreement intended and necessary to prevent unfair competition and to protect OPC’s confidential information, goodwill and substantial and legitimate business interests. |
(a) | Solicitation of Employees: For two years following your Separation Date, you will not hire, solicit or encourage any employee, consultant or contractor of OPC to terminate his or her relationship with OPC, or to enter into any employment or other similar business relationship with any other person or entity (including but not limited to you or any competitor of OPC). |
(b) | Non-Compete: For one year following your Separation Date, you will not, without the prior written approval of Employer, directly or indirectly, for yourself or on behalf of or in conjunction with any other person or entity of whatever nature, engage or participate within the Market Area in competition with OPC in any aspect of the exploration and production (E&P) sector (which, for the avoidance of doubt, does not include the downstream or midstream sectors) (“Business”), which such prohibition shall prevent you, among other things, from directly or indirectly owning, managing, operating, joining, becoming an officer, director, employee or consultant of, or loaning money to or selling or leasing equipment or real estate to or otherwise being affiliated with any person or entity primarily engaged in, or planning to primarily engage in, such Business in competition, or anticipated competition, in the Market Area, with OPC. For these purposes, “Market Area” means (i) any state in the United States where, as of the Separation Date, OPC conducts business and (ii) any other location within 75 miles of any location where, as of the Separation Date, OPC conducts business or has material plans to conduct business of which you are aware. Notwithstanding the foregoing provisions, you may, directly or indirectly own, solely as an investment, securities of any person engaged in the Business that are publicly traded on a national or regional stock exchange or quotation system or on the over-the-counter market if you (A) are not a controlling person of, or a member of a group which controls, such person and (B) do not, directly or indirectly, own 2% or more of any class of securities of such person. |
7. | Confidential Information: You agree that you will continue to comply after your Separation Date with any existing agreement with or for the benefit of OPC or between OPC and any third party for the benefit of the third party regarding confidential or proprietary information, including trade secrets and patents. Additionally, you agree that you will not divulge to any person, business, firm, corporation or government entity, nor use to the detriment of OPC, nor use in any business, venture, or any organization of any kind, or in any process of manufacture, production or mining, at any time during the term of this Agreement or anytime thereafter: |
(a) | Any trade secrets of OPC, in any form, including, without limitation, all graphic material, forms, documents, data and information; and |
(b) | Any confidential information of OPC, in any form, including, without limitation, inventions, discoveries, improvements, methods, technology, business plans, environmental plans, procedures and practices, enterprises, manufacturing information, purchasing information, negotiations with any third parties, plant design or operation, financial results, medical records or information, or any other confidential information of OPC affecting or concerning any aspect of the business or operations of OPC or any of its directors, officers or employees, developed, acquired, used by, disclosed to or discovered by you during your employment by OPC. |
8. | Return of Property: You agree to return to Employer on or before the Separation Date, all originals, copies, and all electronic or digitally created or stored originals and copies of OPC’s directories, policies, procedures, manuals, reports, organization charts, documents, records and files, including without limitation all information of the type described in Paragraphs 7(a) and (b). |
9. | Disclosure and Non-Disparagement: You will not disclose the terms and conditions of this Agreement to anyone other than your immediate family, accountant, or attorney or as required by law, regulation, court order, subpoena or other judicial or administrative process. You will not make any derogatory, defamatory or negative statement about OPC or any of its officers, directors, or employees to the press, electronic media, to any part of the investment community, to the public, or to any person connected with, employed by or having a relationship to any of them. |
10. | Waiver and Release: You absolutely and forever release and discharge OPC and its past and present parent entities, subsidiaries and affiliated entities and each of their shareholders, officers, directors, employees, insurance carriers, predecessors and successors, assigns, agents, attorneys, representatives, heirs, benefit plans, and administrators (referred to collectively as “Employer Releasees”) and each of them from all your claims for relief, causes of action, liabilities, debts, liens, expenses, damages, judgments, attorneys’ fees and costs of whatever kind or nature whatsoever, whether arising in law or equity, whether currently known or unknown, or later discovered by you, that you have, may have or claim to have against Employer Releasees, individually or collectively, arising out of, relating to, or resulting from any acts or omissions occurring prior to the execution of this Agreement, including without limitation, such acts or omissions arising out of, relating to or resulting from your employment, termination of employment or any compensation, benefits or any other terms or conditions of that employment with OPC or its past and present parent entities, subsidiaries and affiliated entities (referred to collectively as your “Released Claims”). You represent that you are unaware of any workers’ compensation claim brought on your behalf or any facts on which such a claim could be brought. |
(a) | Your Released Claims include but are not limited to all claims arising out of any express or implied agreement, or any California, Texas, New York, or other state, municipal, local, Federal or foreign constitution, statute, regulation or ordinance, order, public policy or common law, examples of which include, without limitation: Title VII of the Civil Rights Act of 1964; Civil Rights Act of 1991; Civil Rights Act of 1866; Equal Pay Act; Age Discrimination in Employment Act of 1967; Employee Retirement Income Security Act of 1974; Americans with Disabilities Act; Family and Medical Leave Act of 1993; United States Executive Orders 11246 and 11375; Regulations of the Office of Federal Contract Compliance Program; Rehabilitation Act of 1973; Worker Adjustment Retraining and Notification Act; New York Human Rights Laws; Texas Commission on Human Rights Act; Texas Labor Code Section 21.001 et seq.; California Government Code Section 12900 et seq.; all provisions of the California Labor Code; Orders of the California Industrial Welfare Commission; and all of the foregoing as they may have been amended. |
(b) | This Agreement does not waive claims you could make, if available, for unemployment compensation or worker’s compensation benefits, and this Agreement does not release any claims the law does not permit you to release. You understand that you do not waive your right to file a charge with a government administrative agency (“agency”) enforcing the civil rights laws, the National Labor Relations Board, or any other state or federal agency, or to participate in any investigation or proceeding conducted by such agency, nor shall any provision in this Agreement adversely affect your right to engage in such conduct. However, you agree to waive your right to obtain any monetary relief or other recovery, including without limitation reinstatement, as a result of or with regard to the matters alleged in any charge or complaint or to collect any monies or compensation as a result of filing or participating in such a charge or complaint. |
(c) | Your Released Claims do not include obligations created by this Agreement or any existing rights to indemnity pursuant to statute, contractual indemnity, or By-law provisions of OPC. |
11. | Laws With Respect to Releases: There are laws that may invalidate releases of claims that are unknown to the releasing party. By signing this Agreement, you agree to waive any protection to which you may otherwise be entitled against any Employer Releasees by virtue of any such law. In particular, and not by way of limitation, you represent and acknowledge that you are familiar with Section 1542 of the California Civil Code, which provides as follows: |
12. | Entire Agreement: This Agreement, together with the Outstanding 2005 LTIP Award Agreements, the PSA, the PRA and the agreements referred to in Paragraph 7, contains the entire agreement and understanding between the parties concerning the subject matters of this Agreement. Each party represents to the other that this Agreement is executed without reliance on any inducement or representation by anyone except as stated in this Agreement. Any other existing employment or consulting agreement, including for the avoidance of doubt, your Offer Letter, or any plan, program or arrangement of separation, severance, termination, or pay continuation, oral, written or implied, between you and OPC shall be deemed to be terminated and of no further force or effect as of your Separation Date, and you further acknowledge that satisfaction of Employer’s obligations under this Agreement fully satisfy all its obligations under the Offer Letter. This Agreement can only be modified by a writing, signed by you and Employer. |
13. | Dispute Resolution: Any claim or controversy that arises between you and OPC shall be decided exclusively by final and binding arbitration, including without limitation, any claims arising out of or relating to the interpretation, enforcement, alleged breach, or the subject matters of this Agreement, claims by you against any Employer Releasees, and to the full extent permitted by law, any claims arising out of local, state, federal and foreign common law, statutes and ordinances. In exchange for the benefits of mutual and binding arbitration, you and Employer are waiving the right to bring a claim against the other in a court that would be tried before a judge or jury. You and Employer retain whatever rights to injunctive relief that may be available under applicable laws. Notwithstanding the foregoing, any dispute or claim in connection with the receipt of benefits under any OPC‑sponsored benefit plans shall be governed exclusively by the claims procedures under the applicable plan. |
(a) | Commencing Arbitration: The National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA”) will apply. The party seeking arbitration will provide written notice, respectively, to the General Counsel of Employer or to you stating the issues to be arbitrated and a summary of the facts on which the claims are based. The parties will attempt to select a mutually acceptable arbitrator within 21 days after receipt of the written notice. If they are unable to agree, the arbitrator will be selected from a list of nine potential arbitrators recommended by AAA at the request of either party. The arbitrator will be an attorney with experience in the employment field or a retired judge. |
(b) | Power of the Arbitrator: The arbitrator may award any form of remedy or relief (including injunctive relief) that would otherwise be available in court. Any award pursuant to said arbitration shall be accompanied by a written opinion of the arbitrator setting forth the reasons for the award. The award rendered by the arbitrator shall be conclusive and binding upon the parties hereto, and judgment upon the award may be entered, and enforcement may be sought in, any court of competent jurisdiction. |
(c) | Expense of Arbitration: To the extent required under applicable law, your responsibility for payment of the neutral arbitrator’s fees and expenses shall be limited to an amount equal to the filing fee that would be required for a state trial court action and Employer shall pay all remaining fees and expenses of the arbitrator. Unless otherwise required under applicable law, the expenses of the arbitrator (including compensation) shall be borne equally by the parties and each party shall pay its own expenses of arbitration. Any controversy regarding the payment of fees and expenses under this arbitration provision shall be decided by the arbitrator. Payment of any fees or expenses by Employer that is required under this Paragraph 13(c) and that is not exempt from Section 409A shall comply with Section 409A’s requirements for reimbursement or in-kind benefit plans, as set forth in regulation section 1.409A-3(i)(1)(iv) (or any successor provision). For purposes of satisfying such requirements under Section 409A, the following rules shall apply but only to the extent that the payment under this Paragraph 13(c) is subject to Section 409A, (i) any payment by Employer that is otherwise required by Paragraph 13(c) shall be made during the period not longer than 2 years, (ii) the amount of payments made during one taxable year for you shall not affect the amount of such payments in any other taxable year; (iii) a payment shall be made by the last day of your taxable year following the taxable year in which the expense was incurred and (iv) your right to payments by Employer under this Paragraph 13(c) shall not be subject to liquidation or exchange for any other benefit. |
14. | Acknowledgment With Respect to Releases: You acknowledge and agree that the releases given above include a waiver and release of any and all claims which you have or may have against Employer and Employer Releasees, individually and collectively. The waivers and releases above are given only in exchange for consideration (something of value) in addition to anything of value to which you are otherwise already entitled. The waiver and releases set forth above do not waive rights or claims that may arise after the date on which you sign this Agreement. You acknowledge that: |
(a) | You have carefully read and fully understand all of the terms and provisions of this Agreement; |
(b) | This Agreement is written in a manner calculated to be and is understood by you; |
(c) | You knowingly and voluntarily waive and release your rights and claims and agree to all of the terms and provisions of this Agreement; |
(d) | You knowingly and voluntarily intend to be legally bound by all of the terms and provisions of this Agreement; and |
(e) | You were previously advised, and are hereby advised in writing to consult with an attorney of your choice before executing this Agreement. |
15. | Severability: If any part of this Agreement, with the exception of Paragraphs 2, 3, 4, 5, 10, 11 and 14, is held by any tribunal of appropriate jurisdiction to be invalid or unenforceable, that part shall be stricken from this Agreement and all other terms of this Agreement shall remain in full force and effect to the full extent permitted by law. Paragraphs 2, 3, 4, 5, 10, 11 and 14 are the essence of this Agreement and should any part of these paragraphs be deemed invalid or unenforceable, this Agreement shall be null and void and any consideration received under this Agreement shall be returned to Employer. |
16. | Successors: This Agreement shall be binding upon you, your heirs, executors and assigns and upon Employer, and all of its successors and assigns. |
17. | Governing Law/Compliance with Law: This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without giving effect to any choice of law rules or principles thereof, and shall be construed according to its ordinary meaning and not for or against either party. Notwithstanding the foregoing, this Agreement shall be interpreted in accordance with all applicable requirements of Section 409A, and any distribution, acceleration or election feature of this Agreement subject to Section 409A that could result in the early inclusion in gross income shall be deemed restricted or limited to the extent necessary to avoid such result. |
18. | Address for Communications: You shall keep Employer informed of (i) your official residence address for purposes of communications pursuant to this Agreement and under benefit plans and (ii) your designated bank account if you choose to receive payments pursuant to this Agreement through direct deposit. Your current designated address is: [ADDRESS]. |
19. | No Admission of Liability: This Agreement does not constitute an admission by any party hereto of wrongdoing or liability and it shall not be construed as such. |
20. | No Attorneys’ Fees or Costs: Each party to this Agreement shall bear its own attorney fees and costs of any kind incurred in connection with the negotiation, review and finalization of this Agreement. |
21. | Return of Incorrect Payments: If you receive Separation Pay, benefit award amounts (in cash or equity), distributions of deferred amounts or other property or compensation from OPC to which you are not entitled hereunder or which otherwise should have been withheld for taxes or otherwise, then, and in such event, you shall hold such Separation Pay, benefit award amounts, distributions or other property or compensation in trust for the benefit of, and shall immediately pay over or deliver such property to, Employer. If Employer has continuing payment obligations under this Agreement at the time such error in payment is discovered, Employer may offset such payment obligations against your obligations under this Section 21. |
Forfeited Total Shareholder Return Incentive Awards | |
2012 TSRI | 1,456 |
2014 TSRI | 9,562 |
Forfeited Restricted Stock Incentive Awards | |
2012 RSI-PB | 546 |
2013 RSI-PB | 5,744 |
2014 RSI-PB | 9,664 |
Forfeited Return on Capital Employed Incentive Award | |
2014 ROCE | 15,872 |
Date of Grant: | July 8, 2015 |
Award Type and Description: | Restricted Stock Units granted pursuant to Section 6(e) of the Plan, which Award is a bookkeeping entry that represents the right to receive a number of shares of Stock up to the number indicated below under “Number of Shares,” subject to the terms and conditions of the Award Agreement. The Grantee’s right to receive payment of this Award shall vest and become earned and nonforfeitable upon the Grantee’s satisfaction of the continued service requirements described below under “Vesting Schedule and Forfeiture.” |
Number of Shares: | See Morgan Stanley “StockPlan Connect/Stock-Based Awards/ Awarded” for the total number of Restricted Stock Units subject to the Award. |
Vesting Schedule and Forfeiture: | Vesting Date. The Grantee must remain in the continuous employ of the Company from the Date of Grant through each applicable vesting date (each, a “Vesting Date”), in accordance with the schedule below, to be eligible to receive payment of this Award, which is divided into designated tranches (each, a “Tranche”). The continuous employment of the Grantee will not be deemed to have been interrupted by reason of the transfer of the Grantee’s employment among the Company and its affiliates or an approved leave of absence. Termination of Employment. Notwithstanding the foregoing, if, prior to any Vesting Date, the Grantee (i) dies, or (ii) becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (iii) retires with the consent of the Company, or (iv) is terminated by the Company without Cause (each of the foregoing, a “Forfeiture Event”), then the number of unvested Restricted Stock Units subject to any Tranche will be reduced on a pro rata basis to the number obtained by (A) multiplying the total number of Restricted Stock Units subject to such Tranche by a fraction, the numerator of which is the number of days between the Date of Grant and the Forfeiture Event and the denominator of which is the number of days between the Date of Grant and Vesting Date on which such Tranche was scheduled to vest, and (B) subtracting from the product the number of Restricted Stock Units that previously vested, if any. Such remaining pro rata unvested Restricted Stock Units subject to any such Tranche shall immediately vest and become nonforfeitable on the date of the Forfeiture Event, and all other Restricted Stock Units that have not previously vested shall be immediately forfeited. If the Grantee terminates employment voluntarily or is terminated for Cause before any Vesting Date, then the Award will terminate automatically on the date of the Grantee’s termination and the Grantee shall immediately forfeit all unvested Restricted Stock Units. Change in Control. If a Forfeiture Event has not occurred and a Change in Control occurs prior to the final Vesting Date and the Grantee’s employment is terminated by the Company without Cause or by the Grantee for Good Reason, in either case within 12 months following the date of such Change in Control, then the number of unvested Restricted Stock Units subject to any Tranche will be reduced on a pro rata basis to the number obtained by (i) multiplying the total number of Restricted Stock Units subject to such Tranche by a fraction, the numerator of which is the number of days between the Date of Grant and the date the Grantee’s employment was so terminated (such date, the “CIC Related Vesting Date”), and the denominator of which is the number of days between the Date of Grant and the Vesting Date on which such Tranche was scheduled to vest, and (ii) subtracting from the product the number of Restricted Stock Units that previously vested, if any. In addition, the Grantee shall be deemed to have a CIC Related Vesting Date such that the treatment in the preceding sentence shall apply (A) on the date at any time following the occurrence of a Change in Control and prior to any Vesting Date on which the Grantee dies, becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or retires with the consent of the Company, or (B) if the Grantee has accrued 12 months of continuous employment with the Company following the Change in Control, on the date following the 12 month anniversary of the Change in Control date and prior to any Vesting Date on which the Grantee’s employment is terminated by the Company without Cause. For the avoidance of doubt, the occurrence of a Change in Control is not intended to change the protections provided to the Grantee in the event of the Grantee’s death, permanent disability, or retirement with consent of the Company occurring prior to the a Change in Control. Such remaining pro rata unvested Restricted Stock Units shall immediately vest and become nonforfeitable on the CIC Related Vesting Date, unless, prior to the occurrence of the Change in Control, the Committee determines in its discretion that such event will not accelerate vesting of any of the Restricted Stock Units covered by this Award. Any such determination by the Committee is binding on the Grantee. |
Payment of Award | Payment for vested Restricted Stock Units will be made solely in shares of Stock, which will be issued to the Grantee as promptly as practicable after the Vesting Date, Forfeiture Event or CIC Related Vesting Date, as applicable (the “Payment Trigger Date”), and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Restricted Stock Units are no longer subject to a substantial risk of forfeiture. Notwithstanding the foregoing, in the event the Award is determined to be subject to Nonqualified Deferred Compensation Rules, payment will be made no later than the end of the year in which the Payment Trigger Date occurs, except to the extent Section 9(n) of the Plan requires payment on the Grantee’s Section 409A Payment Date. |
Dividends, Voting and Other Rights: | Restricted Stock Units are not shares of Stock and have no voting rights or, except as described in this paragraph, dividend rights. With respect to each Restricted Stock Unit subject to this Award, the Grantee is also awarded Dividend Equivalents with respect to one share of Stock, which means that, in the event that Occidental declares and pays a cash dividend on its outstanding Stock and, on the record date for such dividend, the Grantee holds Restricted Stock Units that have not been settled or forfeited pursuant to the terms of the Award Agreement, then the Grantee will be credited on the books and records of Occidental with an amount equal to the amount per share of any such cash dividend for each outstanding Restricted Stock Unit. The Grantee will be credited with such Dividend Equivalents for the period beginning on the Date of Grant and ending on the applicable Payment Trigger Date or, if earlier, the date the Grantee forfeits his rights with respect to the Restricted Stock Units. Occidental will pay in cash to the Grantee an amount equal to the Dividend Equivalents credited to such Grantee as promptly as may be practicable on or after the time the cash dividends to which such Dividend Equivalents relate are paid by Occidental to its stockholders generally, and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Dividend Equivalents are no longer subject to a substantial risk of forfeiture. |
Date of Grant: | July 8, 2015 |
Award Type and Description: | Restricted Stock Units granted pursuant to Section 6(e) of the Plan that have been designated as a Retention Award within the meaning of Section 2(cc) of the Plan and a Performance Award under Section 6(k) of the Plan (referred to herein as “Performance Shares”), which Award is a bookkeeping entry that represents the right to receive a number of shares of Stock up to the number indicated below under “Number of Shares,” subject to the terms and conditions of the Award Agreement. This Award is also intended to constitute a Section 162(m) Award granted under Section 6(k)(i) of the Plan (even if the Grantee is not a Covered Employee on the Date of Grant but is likely to be a Covered Employee at the time the applicable Performance Goal (as defined below) is certified). The Grantee’s right to receive payment of this Award, or any Tranche (as defined below) thereof, shall vest and become earned and nonforfeitable upon (i) the Grantee’s satisfaction of the continued service requirements described below under “Vesting Schedule and Forfeiture” and (ii) the Committee’s certification of the attainment of the applicable Performance Goal (defined below). Performance Shares actually earned upon satisfaction of the foregoing requirements are referred to herein as “Earned Performance Shares.” |
Number of Shares: | See Morgan Stanley “StockPlan Connect/Stock-Based Awards/Awarded” for the total number of Performance Shares subject to the Award, which are divided into the following designated tranches (each, a “Tranche”): |
Performance Period: | Each Tranche of the Award has a unique “Performance Period” as follows: |
* The “Cumulative Performance Period” for each Tranche shall commence on the first day of the applicable Performance Period for such Tranche and continue through June 30, 2022. | |
Vesting Schedule and Forfeiture: | Vesting Date. The Grantee must remain in the continuous employ of the Company from the Date of Grant (and each applicable vesting start date) through each applicable vesting end date (each such vesting end date, a “Vesting Date”), in accordance with the schedule below, to be eligible to receive payment of this Award, subject to attainment of the Performance Goal. The continuous employment of the Grantee will not be deemed to have been interrupted by reason of the transfer of the Grantee’s employment among the Company and its affiliates or an approved leave of absence. Termination of Employment. Notwithstanding the foregoing, if, prior to any Vesting Date, the Grantee (i) dies, or (ii) becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (iii) retires with the consent of the Company, or (iv) is terminated by the Company without Cause (each of the foregoing, a “Forfeiture Event”), then the number of Performance Shares subject to any Tranche with respect to which the continued service requirements have not been met will be reduced on a pro rata basis to the number obtained by multiplying the total number of Performance Shares subject to such Tranche by a fraction, the numerator of which is the number of days between the Date of Grant and the date of the Forfeiture Event and the denominator of which is the number of days between the Date of Grant and the Vesting Date on which such Tranche was scheduled to vest. Such remaining pro rata unvested Performance Shares subject to any such Tranche (along with any Performance Shares subject to a Tranche with respect to which the continued service requirements have previously been met but for which the applicable Performance Goal has not yet been satisfied) shall remain eligible for payment following the Forfeiture Event, subject to attainment of the applicable Performance Goal or the occurrence of a Change in Control, and all other Performance Shares with respect to which the continued service requirements have not previously been met shall be immediately forfeited. If the Grantee terminates employment voluntarily or is terminated for Cause before any Vesting Date, then the Award will terminate automatically on the date of the Grantee’s termination and the Grantee shall immediately forfeit all unvested Performance Shares. Change in Control. If a Change in Control occurs following a Forfeiture Event, then the unvested Performance Shares, as reduced as a result of the Forfeiture Event, (along with any Performance Shares subject to a Tranche with respect to which the continued service requirements have previously been met but for which the applicable Performance Goal has not yet been satisfied) shall become immediately vested and nonforfeitable and deemed to be Earned Performance Shares as of the date of the Change in Control (without regard to whether the applicable Performance Goal has been attained). For the avoidance of doubt, Performance Shares previously forfeited as a result of the Forfeiture Event shall not become vested pursuant to this paragraph. If a Forfeiture Event has not occurred and a Change in Control occurs prior to the final Vesting Date, then all unvested Performance Shares with respect to which the continued service requirements have not been met will be deemed Earned Performance Shares and will automatically convert into the same number of shares of Restricted Stock. The shares of Restricted Stock may not be transferred, assigned, sold, pledged, exchanged or otherwise encumbered or disposed of by the Grantee, except as provided for within the Plan, and are subject to a risk of forfeiture. In order for restrictions to lapse and the shares of Restricted Stock to become vested and nonforfeitable, the Grantee must remain in the continuous employ of the Company from the date of the Change in Control through the earlier to occur of (i) the applicable Vesting Date on which such Tranche to which the shares of Restricted Stock relate was originally scheduled to vest or (ii) the date within 12 months following the date of the Change in Control on which the Grantee’s employment is terminated by the Company without Cause or by the Grantee for Good Reason (the “CIC Related Vesting Date”); provided, that, for the avoidance of doubt, vesting of the Restricted Stock shall not be subject to attainment of the applicable Performance Goal, which shall be waived upon occurrence of the Change in Control. In addition, the Grantee shall be deemed to have a CIC Related Vesting Date (A) on the date at any time following the occurrence of a Change in Control and prior to any Vesting Date on which the Grantee dies or becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (B) if the Grantee has accrued 12 months of continuous employment with the Company following the Change in Control, on the date following the 12 month anniversary of the Change in Control date and prior to any Vesting Date on which the Grantee's employment is terminated by the Company without Cause or the Grantee retires with the consent of the Company; provided, that in the case of clause (A) or (B) of this sentence, the number of shares of Restricted Stock which shall become vested and nonforfeitable on the applicable CIC Related Vesting Date shall equal the total number of shares of Restricted Stock subject to any such Tranche with respect to which the continued service requirements have not been met multiplied by a fraction, the numerator of which is the number of days between the Date of Grant and the CIC Related Vesting Date and the denominator of which is the total number of days between the Date of Grant and the Vesting Date on which such Tranche was scheduled to vest. For the avoidance of doubt, the occurrence of a Change in Control is not intended to change the protections provided to the Grantee in the event of the Grantee's death or permanent disability occurring prior to a Change in Control, other than waiver of any level of attainment of the Performance Goal. Except as otherwise provided in the Award Agreement, the Grantee shall have all of the rights of a stockholder with respect to the shares of Restricted Stock received upon conversion of Earned Performance Shares pursuant to this paragraph, including the right to vote such shares and, subject to the terms and conditions described below under “Dividends, Voting and Other Rights,” to receive any dividends that may be paid thereon; provided, that any and all such dividends shall be subject to the same restrictions as the underlying shares of Restricted Stock. In addition, upon the occurrence of a Change in Control, any Performance Shares subject to a Tranche with respect to which the continued service requirements have previously been met but for which the applicable Performance Goal has not yet been satisfied, shall become immediately vested and nonforfeitable and deemed to be Earned Performance Shares. The foregoing provisions shall not apply if, prior to the occurrence of the Change in Control, the Committee determines in its discretion that such event will not accelerate vesting of this Award. Any such determination by the Committee is binding on the Grantee. |
Performance Goal: | The “Performance Goal” for each Tranche of the Award is either (i) the attainment of positive earnings per share (“EPS”) of Occidental during the Tranche’s applicable Performance Period; or (ii) attainment of positive EPS, on a cumulative basis, during the period commencing on the first day of the Tranche’s applicable Performance Period and ending on any June 30 during the Tranche's Cumulative Performance Period. By way of example, the Performance Goal will be attained for Tranche 3 if either: (i) the EPS for Tranche 3’s Performance Period (ending June 30, 2018) is positive, or (ii) the EPS is positive, on a cumulative basis, for the 2-year period ending June 30, 2019, the 3-year period ending June 30, 2020, the 4-year period ending June 30, 2021, or the 5-year period ending June 30, 2022. Otherwise, all unvested Performance Shares subject to such Tranche will be forfeited. The Committee may certify attainment of the Performance Goal for a Tranche only on or after the Vesting Date for such Tranche. The Committee may adjust the Performance Goal as permitted by the Plan. |
Payment of Award | Payment for Earned Performance Shares will be made solely in shares of Stock (in shares of Restricted Stock, in the case of the occurrence of a Change in Control with respect to any Tranche for which the continued services requirements have not been previously met), which will be issued to the Grantee as promptly as practicable after the Committee’s certification of attainment of the applicable Performance Goal for the Tranche to which the Earned Performance Shares relate (which such payment and certification shall occur no later than 70 days following the end of the Performance Period for such Tranche) or the occurrence of a Change in Control (which such payment shall occur no later than 70 days following the date of the Change in Control), as applicable (the “Payment Trigger Date”), and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Performance Shares are no longer subject to a substantial risk of forfeiture. |
Dividends, Voting and Other Rights: | Performance Shares are not shares of Stock and have no voting rights or, except as described in this paragraph, dividend rights. With respect to each Performance Share subject to this Award, the Grantee is also awarded Dividend Equivalents with respect to one share of Stock, which means that, in the event that Occidental declares and pays a cash dividend on its outstanding Stock and, on the record date for such dividend, the Grantee holds Performance Shares that have not been settled (including settlement through conversion into Restricted Stock) or forfeited pursuant to the terms of the Award Agreement, then the Grantee will be credited on the books and records of Occidental with an amount equal to the amount per share of any such cash dividend for each outstanding Performance Share. The Grantee will be credited with such Dividend Equivalents for the period beginning on the Date of Grant and ending on the applicable Payment Trigger Date or, if earlier, the date the Grantee forfeits his rights with respect to the Performance Shares. Occidental will pay in cash to the Grantee an amount equal to (i) the Dividend Equivalents credited to such Grantee with respect to any Earned Performance Shares, plus (ii) if applicable, the amount of any cash dividends accumulated with respect to any shares of Restricted Stock received as described above under “Vesting Schedule and Forfeiture—Change in Control,” as promptly as may be practicable after (A) the Committee certifies the attainment of the Performance Goal, or (B) if a Change in Control has occurred, the earlier to occur of the Vesting Date and the CIC Related Vesting Date, as applicable, and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Dividend Equivalents and/or dividends, as applicable, are no longer subject to a substantial risk of forfeiture. Notwithstanding the foregoing, in the event the Award is determined to be subject to Nonqualified Deferred Compensation Rules, payment will be made no later than the end of the year in which the Payment Trigger Date occurs, except to the extent Section 9(n) of the Plan requires payment on the Grantee's Section 409A Payment Date. For purposes of clarity, if Performance Shares or shares of Restricted Stock are forfeited by the Grantee, then the Grantee shall also forfeit the Dividend Equivalents and/or dividends, if any, accrued with respect to such Performance Shares and/or shares of Restricted Stock. The Grantee expressly authorizes the Company to withhold, based on applicable minimum statutory withholding rates as determined by the Committee, all applicable Tax Related Items (as defined in the Terms and Conditions) legally payable by the Grantee in connection with the payment for Earned Performance Shares or the vesting of any shares of Restricted Stock first from any Dividend Equivalents or cash dividends payable pursuant to the Award. |
Date of Grant: | July 8, 2015 |
Award Type and Description: | Restricted Stock Units granted pursuant to Section 6(e) of the Plan that have been designated as a Performance Award under Section 6(k) of the Plan (referred to herein as “Performance Shares”), which Award is a bookkeeping entry that represents the right to receive a number of shares of Stock up to 200% of the Target Performance Shares (defined below), subject to the terms and conditions of the Award Agreement. This Award is also intended to constitute a Section 162(m) Award granted under Section 6(k)(i) of the Plan (even if the Grantee is not a Covered Employee on the Date of Grant). The Grantee’s right to receive payment of this Award in an amount ranging from 0% to 200% of the number of Target Performance Shares, rounded up to the nearest whole share, shall vest and become earned and nonforfeitable upon (i) the Grantee’s satisfaction of the continued service requirements described below under “Vesting Schedule and Forfeiture” and (ii) the Committee’s certification of the level of achievement of the Performance Goal (defined below). The number of Performance Shares actually earned upon satisfaction of the foregoing requirements are referred to herein as the “Earned Performance Shares.” |
Target Number of Shares: | See Morgan Stanley “StockPlan Connect/Stock-Based Awards/Awarded” for the target number of Performance Shares subject to the Award (the “Target Performance Shares”). |
Performance Period: | January 1, 2016 through December 31, 2018. |
Vesting Schedule and Forfeiture: | Vesting Date. The Grantee must remain in the continuous employ of the Company from the Date of Grant through the last day of the Performance Period (the “Vesting Date”) to be eligible to receive payment of this Award, subject to the level of achievement of the Performance Goal. The continuous employment of the Grantee will not be deemed to have been interrupted by reason of the transfer of the Grantee’s employment among the Company and its affiliates or an approved leave of absence. Termination of Employment. Notwithstanding the foregoing, if, prior to the Vesting Date, the Grantee (i) dies, or (ii) becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (iii) retires with the consent of the Company less than 12 months after the Date of Grant, or (iv) is terminated by the Company without Cause (each of the foregoing, a “Forfeiture Event”), then the number of Target Performance Shares will be reduced on a pro rata basis to the number obtained by multiplying the total number of Target Performance Shares granted by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the Forfeiture Event and the denominator of which is the total number of days in the Performance Period. Such remaining pro rata unvested Target Performance Shares shall remain eligible for payment following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period or the occurrence of a Change in Control, and all other Target Performance Shares shall be immediately forfeited. If the Grantee retires with the consent of the Company 12 months or more after the Date of Grant but prior to the Vesting Date, then none of the Target Performance Shares will be reduced or forfeited and the Grantee will remain eligible to receive payment with respect to all Target Performance Shares following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period. If the Grantee terminates employment for any reason prior to the first day of the Performance Period or terminates employment voluntarily or is terminated for Cause before the Vesting Date, then the Award will terminate automatically on the date of the Grantee’s termination and the Grantee shall immediately forfeit all Target Performance Shares. Change in Control. If a Change in Control occurs following a Forfeiture Event, then the unvested Target Performance Shares (as reduced as a result of the Forfeiture Event) shall become immediately vested and nonforfeitable and deemed to be Earned Performance Shares as of the date of the Change in Control (without regard to the level of achievement of the Performance Goal). For the avoidance of doubt, Target Performance Shares previously forfeited as a result of the Forfeiture Event shall not become vested pursuant to this paragraph. If a Forfeiture Event has not occurred and a Change in Control occurs prior to the Vesting Date, then 100% of the Target Performance Shares will be deemed to be Earned Performance Shares and will automatically convert into the same number of shares of Restricted Stock. The shares of Restricted Stock may not be transferred, assigned, sold, pledged, exchanged or otherwise encumbered or disposed of by the Grantee, except as provided for within the Plan, and are subject to a risk of forfeiture. In order for restrictions to lapse and the shares of Restricted Stock to become vested and nonforfeitable, the Grantee must remain in the continuous employ of the Company from the date of the Change in Control through the earlier to occur of (i) the Vesting Date or (ii) the date within 12 months following the date of the Change in Control on which the Grantee’s employment is terminated by the Company without Cause or by the Grantee for Good Reason (the “CIC Related Vesting Date”); provided, that, for the avoidance of doubt, vesting of the shares of Restricted Stock shall not be subject to any level of attainment of the Performance Goal, which shall be waived upon occurrence of the Change in Control. In addition, the Grantee shall be deemed to have a CIC Related Vesting Date (A) on the date at any time following the occurrence of a Change in Control and prior to the Vesting Date on which the Grantee dies or becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (B) if the Grantee has accrued 12 months of continuous employment with the Company following the Change in Control, on the date following the 12 month anniversary of the Change in Control date and prior to the Vesting Date on which the Grantee's employment is terminated by the Company without Cause or the Grantee retires with the consent of the Company; provided, that in the case of clause (A) or (B) of this sentence, the number of shares of Restricted Stock which shall become vested and nonforfeitable on the applicable CIC Related Vesting Date shall equal the total number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the CIC Related Vesting Date and the denominator of which is the total number of days in the Performance Period. For the avoidance of doubt, the occurrence of a Change in Control is not intended to change the protections provided to the Grantee in the event of the Grantee's death or permanent disability occurring prior to a Change in Control, other than waiver of any level of attainment of the Performance Goal. Except as otherwise provided in the Award Agreement, the Grantee shall have all of the rights of a stockholder with respect to the shares of Restricted Stock received upon conversion of Earned Performance Shares pursuant to this paragraph, including the right to vote such shares and, subject to the terms and conditions described below under “Dividends, Voting and Other Rights,” to receive any dividends that may be paid thereon; provided, that any and all such dividends shall be subject to the same restrictions as the underlying shares of Restricted Stock. The foregoing provisions shall not apply if, prior to the occurrence of the Change in Control, the Committee determines in its discretion that such event will not accelerate vesting of this Award. Any such determination by the Committee is binding on the Grantee. |
Performance Goal: | The “Performance Goal” for the Performance Period is based on the attainment of at least a minimum level of Return on Assets (defined below) as described herein. For purposes of this Award, (i) “Return on Assets” shall be the percentage obtained by dividing (A) the sum of the Net Income for the Oil and Gas Segment (Middle East/North Africa) for each year in the Performance Period by (B) the sum of the Assets for the Oil and Gas Segment (Middle East/North Africa) for each year in the Performance Period; (ii) “Net Income” shall be Results of Operations for the Oil and Gas Segment (Middle East/North Africa) for the applicable year; and (iii) “Assets” shall be the Net Capitalized Costs (Middle East/North Africa) for the applicable year; in each case, as reported in the Supplemental Oil and Gas Information contained in Occidental’s Annual Report on Form 10-K; provided, that “Assets” shall reflect all acquisitions, divestures and write downs during the Performance Period unless the senior management of Occidental recommends exclusion and the Committee agrees; provided further, that, the immediately preceding proviso shall not apply in the event that the Award is intended to constitute a Section 162(m) Award granted under Section 6(k)(i) of the Plan. The Committee may adjust the Performance Goal as permitted by the Plan. * Specified thresholds will be adjusted up or down by 0.002% for every $0.01 change in the actual average WTI price at the end of the Performance Period as compared to the three-year average forward strip WTI prices as of the Date of Grant; provided, however, that any adjustment will not result in a minimum threshold of less than 2%. For these purposes, (i) three-year average forward strip WTI prices shall be the average of the monthly futures contract prices, as of the relevant date, for West Texas Intermediate Crude Oil, Cushing Delivery on the New York Mercantile Exchange (NYMEX:CL), and (ii) actual average WTI price shall be the daily average closing price for West Texas Intermediate Crude Oil, Cushing Delivery on the New York Mercantile Exchange (NYMEX:CL), as of the relevant date. All prices shall be as reported at www.bloomberg.com or other equivalent site. ** Payment percentages for other values between the values in the table will be linearly interpolated between the values in the table. Impact of Transfer of Employment. At the discretion of the Committee, if, prior to the end of the Performance Period, the Grantee transfers his employment among the Company, its subdivisions or its affiliates, the amount of the Award attained by the Grantee may be determined by assessing the level of achievement of the Performance Goals, if any, certified by the Committee for each entity that employed the Grantee during the Performance Period and multiplying the Target Performance Shares attainable at such level by a fraction, the numerator of which is the number of days during the Performance Period that the Grantee worked for the entity and the denominator of which is the total number of days in the Performance Period. If employees of the entity to which the Grantee transfers did not receive substantially similar Return on Asset Incentive Awards or Return on Capital Employed Incentive Awards, then the amount of the Award attained by the Grantee shall be determined as if the Grantee had not transferred but had remained with the Grantee’s original employer. |
Payment of Award: | Payment for Earned Performance Shares will be made solely in shares of Stock (in shares of Restricted Stock, in the case of the occurrence of a Change in Control), which will be issued to the Grantee as promptly as practicable after the Committee’s certification of attainment of the Performance Goal (which such payment and certification shall occur no later than 70 days following the end of the Performance Period) or the occurrence of a Change in Control (which such payment shall occur no later than 70 days following the date of the Change in Control), as applicable (the “Payment Trigger Date”), and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Performance Shares are no longer subject to a substantial risk of forfeiture. |
Dividends, Voting and Other Rights: | Performance Shares are not shares of Stock and have no voting rights or, except as described in this paragraph, dividend rights. With respect to each Performance Share subject to this Award, the Grantee is also awarded Dividend Equivalents with respect to one share of Stock, which means that, in the event that Occidental declares and pays a cash dividend on its outstanding Stock and, on the record date for such dividend, the Grantee holds Performance Shares that have not been settled (including settlement through conversion into Restricted Stock) or forfeited pursuant to the terms of the Award Agreement, then the Grantee will be credited on the books and records of Occidental with an amount equal to the amount per share of any such cash dividend for each outstanding Performance Share. The Grantee will be credited with such Dividend Equivalents for the period beginning on the Date of Grant and ending on the applicable Payment Trigger Date or, if earlier, the date the Grantee forfeits his rights with respect to the Performance Shares. Occidental will pay in cash to the Grantee an amount equal to (i) the Dividend Equivalents credited to such Grantee, adjusted as necessary to reflect the number of Earned Performance Shares, plus (ii) if applicable, the amount of any cash dividends accumulated with respect to any shares of Restricted Stock received as described above under “Vesting Schedule and Forfeiture—Change in Control,” as promptly as may be practicable after (A) the Committee certifies the attainment of the Performance Goal, or (B) if a Change in Control has occurred, the earlier to occur of the Vesting Date and the CIC Related Vesting Date, as applicable, and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Dividend Equivalents or dividends, as applicable, are no longer subject to a substantial risk of forfeiture. Notwithstanding the foregoing, in the event the Award is determined to be subject to Nonqualified Deferred Compensation Rules, payment will be made no later than the end of the year in which the Payment Trigger Date occurs, except to the extent Section 9(n) of the Plan requires payment on the Grantee’s Section 409A Payment Date. For purposes of clarity, if Performance Shares or shares of Restricted Stock are forfeited by the Grantee, then the Grantee shall also forfeit the Dividend Equivalents and/or dividends, if any, accrued with respect to such Performance Shares and/or shares of Restricted Stock. |
Date of Grant: | July 8, 2015 |
Award Type and Description: | Restricted Stock Units granted pursuant to Section 6(e) of the Plan that have been designated as a Performance Award under Section 6(k) of the Plan (referred to herein as “Performance Shares”), which Award is a bookkeeping entry that represents the right to receive a number of shares of Stock up to 200% of the Target Performance Shares (defined below), subject to the terms and conditions of the Award Agreement. This Award is also intended to constitute a Section 162(m) Award granted under Section 6(k)(i) of the Plan (even if the Grantee is not a Covered Employee on the Date of Grant). The Grantee’s right to receive payment of this Award in an amount ranging from 0% to 200% of the number of Target Performance Shares, rounded up to the nearest whole share, shall vest and become earned and nonforfeitable upon (i) the Grantee’s satisfaction of the continued service requirements described below under “Vesting Schedule and Forfeiture” and (ii) the Committee’s certification of the level of achievement of the Performance Goal (defined below). The number of Performance Shares actually earned upon satisfaction of the foregoing requirements are referred to herein as the “Earned Performance Shares.” |
Target Number of Shares: | See Morgan Stanley “StockPlan Connect/Stock-Based Awards/Awarded” for the target number of Performance Shares subject to the Award (the “Target Performance Shares”). |
Performance Period: | January 1, 2016 through December 31, 2018. |
Vesting Schedule and Forfeiture: | Vesting Date. The Grantee must remain in the continuous employ of the Company from the Date of Grant through the last day of the Performance Period (the “Vesting Date”) to be eligible to receive payment of this Award, subject to the level of achievement of the Performance Goal. The continuous employment of the Grantee will not be deemed to have been interrupted by reason of the transfer of the Grantee’s employment among the Company and its affiliates or an approved leave of absence. Termination of Employment. Notwithstanding the foregoing, if, prior to the Vesting Date, the Grantee (i) dies, or (ii) becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (iii) retires with the consent of the Company less than 12 months after the Date of Grant, or (iv) is terminated by the Company without Cause (each of the foregoing, a “Forfeiture Event”), then the number of Target Performance Shares will be reduced on a pro rata basis to the number obtained by multiplying the total number of Target Performance Shares granted by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the Forfeiture Event and the denominator of which is the total number of days in the Performance Period. Such remaining pro rata unvested Target Performance Shares shall remain eligible for payment following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period or the occurrence of a Change in Control, and all other Target Performance Shares shall be immediately forfeited. If the Grantee retires with the consent of the Company 12 months or more after the Date of Grant but prior to the Vesting Date, then none of the Target Performance Shares will be reduced or forfeited and the Grantee will remain eligible to receive payment with respect to all Target Performance Shares following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period. If the Grantee terminates employment for any reason prior to the first day of the Performance Period or terminates employment voluntarily or is terminated for Cause before the Vesting Date, then the Award will terminate automatically on the date of the Grantee’s termination and the Grantee shall immediately forfeit all Target Performance Shares. Change in Control. If a Change in Control occurs following a Forfeiture Event, then the unvested Target Performance Shares (as reduced as a result of the Forfeiture Event) shall become immediately vested and nonforfeitable and deemed to be Earned Performance Shares as of the date of the Change in Control (without regard to the level of achievement of the Performance Goal). For the avoidance of doubt, Target Performance Shares previously forfeited as a result of the Forfeiture Event shall not become vested pursuant to this paragraph. If a Forfeiture Event has not occurred and a Change in Control occurs prior to the Vesting Date, then 100% of the Target Performance Shares will be deemed to be Earned Performance Shares and will automatically convert into the same number of shares of Restricted Stock. The shares of Restricted Stock may not be transferred, assigned, sold, pledged, exchanged or otherwise encumbered or disposed of by the Grantee, except as provided for within the Plan, and are subject to a risk of forfeiture. In order for restrictions to lapse and the shares of Restricted Stock to become vested and nonforfeitable, the Grantee must remain in the continuous employ of the Company from the date of the Change in Control through the earlier to occur of (i) the Vesting Date or (ii) the date within 12 months following the date of the Change in Control on which the Grantee’s employment is terminated by the Company without Cause or by the Grantee for Good Reason (the “CIC Related Vesting Date”); provided, that, for the avoidance of doubt, vesting of the shares of Restricted Stock shall not be subject to any level of attainment of the Performance Goal, which shall be waived upon occurrence of the Change in Control. In addition, the Grantee shall be deemed to have a CIC Related Vesting Date (A) on the date at any time following the occurrence of a Change in Control and prior to the Vesting Date on which the Grantee dies or becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (B) if the Grantee has accrued 12 months of continuous employment with the Company following the Change in Control, on the date following the 12 month anniversary of the Change in Control date and prior to the Vesting Date on which the Grantee's employment is terminated by the Company without Cause or the Grantee retires with the consent of the Company; provided, that in the case of clause (A) or (B) of this sentence, the number of shares of Restricted Stock which shall become vested and nonforfeitable on the applicable CIC Related Vesting Date shall equal the total number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the CIC Related Vesting Date and the denominator of which is the total number of days in the Performance Period. For the avoidance of doubt, the occurrence of a Change in Control is not intended to change the protections provided to the Grantee in the event of the Grantee's death or permanent disability occurring prior to a Change in Control, other than waiver of any level of attainment of the Performance Goal. Except as otherwise provided in the Award Agreement, the Grantee shall have all of the rights of a stockholder with respect to the shares of Restricted Stock received upon conversion of Earned Performance Shares pursuant to this paragraph, including the right to vote such shares and, subject to the terms and conditions described below under “Dividends, Voting and Other Rights,” to receive any dividends that may be paid thereon; provided, that any and all such dividends shall be subject to the same restrictions as the underlying shares of Restricted Stock. The foregoing provisions shall not apply if, prior to the occurrence of the Change in Control, the Committee determines in its discretion that such event will not accelerate vesting of this Award. Any such determination by the Committee is binding on the Grantee. |
Performance Goal: | The “Performance Goal” for the Performance Period is based on the attainment of at least a minimum level of Return on Assets (defined below) as described herein. For purposes of this Award, (i) “Return on Assets” shall be the percentage obtained by dividing (A) the sum of the Net Income for the Oil and Gas Segment (Total) for each year in the Performance Period by (B) the sum of the Assets for the Oil and Gas Segment (Total) for each year in the Performance Period; (ii) “Net Income” shall be Results of Operations for the Oil and Gas Segment (Total) for the applicable year; and (iii) “Assets” shall be the Net Capitalized Costs (Total) for the applicable year; in each case, as reported in the Supplemental Oil and Gas Information contained in Occidental’s Annual Report on Form 10-K; provided, that “Assets” shall reflect all acquisitions, divestures and write downs during the Performance Period unless the senior management of Occidental recommends exclusion and the Committee agrees; provided further, that, the immediately preceding proviso shall not apply in the event that the Award is intended to constitute a Section 162(m) Award granted under Section 6(k)(i) of the Plan. The Committee may adjust the Performance Goal as permitted by the Plan. * Specified thresholds will be adjusted up or down by 0.002% for every $0.01 change in the actual average WTI price at the end of the Performance Period as compared to the three-year average forward strip WTI prices as of the Date of Grant; provided, however, that any adjustment will not result in a minimum threshold of less than 2%. For these purposes, (i) three-year average forward strip WTI prices shall be the average of the monthly futures contract prices, as of the relevant date, for West Texas Intermediate Crude Oil, Cushing Delivery on the New York Mercantile Exchange (NYMEX:CL), and (ii) actual average WTI price shall be the daily average closing price for West Texas Intermediate Crude Oil, Cushing Delivery on the New York Mercantile Exchange (NYMEX:CL), as of the relevant date. All prices shall be as reported at www.bloomberg.com or other equivalent site. ** Payment percentages for other values between the values in the table will be linearly interpolated between the values in the table. Impact of Transfer of Employment. At the discretion of the Committee, if, prior to the end of the Performance Period, the Grantee transfers his employment among the Company, its subdivisions or its affiliates, the amount of the Award attained by the Grantee may be determined by assessing the level of achievement of the Performance Goals, if any, certified by the Committee for each entity that employed the Grantee during the Performance Period and multiplying the Target Performance Shares attainable at such level by a fraction, the numerator of which is the number of days during the Performance Period that the Grantee worked for the entity and the denominator of which is the total number of days in the Performance Period. If employees of the entity to which the Grantee transfers did not receive substantially similar Return on Asset Incentive Awards or Return on Capital Employed Incentive Awards, then the amount of the Award attained by the Grantee shall be determined as if the Grantee had not transferred but had remained with the Grantee’s original employer. |
Payment of Award: | Payment for Earned Performance Shares will be made solely in shares of Stock (in shares of Restricted Stock, in the case of the occurrence of a Change in Control), which will be issued to the Grantee as promptly as practicable after the Committee’s certification of attainment of the Performance Goal (which such payment and certification shall occur no later than 70 days following the end of the Performance Period) or the occurrence of a Change in Control (which such payment shall occur no later than 70 days following the date of the Change in Control), as applicable (the “Payment Trigger Date”), and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Performance Shares are no longer subject to a substantial risk of forfeiture. |
Dividends, Voting and Other Rights: | Performance Shares are not shares of Stock and have no voting rights or, except as described in this paragraph, dividend rights. With respect to each Performance Share subject to this Award, the Grantee is also awarded Dividend Equivalents with respect to one share of Stock, which means that, in the event that Occidental declares and pays a cash dividend on its outstanding Stock and, on the record date for such dividend, the Grantee holds Performance Shares that have not been settled (including settlement through conversion into Restricted Stock) or forfeited pursuant to the terms of the Award Agreement, then the Grantee will be credited on the books and records of Occidental with an amount equal to the amount per share of any such cash dividend for each outstanding Performance Share. The Grantee will be credited with such Dividend Equivalents for the period beginning on the Date of Grant and ending on the applicable Payment Trigger Date or, if earlier, the date the Grantee forfeits his rights with respect to the Performance Shares. Occidental will pay in cash to the Grantee an amount equal to (i) the Dividend Equivalents credited to such Grantee, adjusted as necessary to reflect the number of Earned Performance Shares, plus (ii) if applicable, the amount of any cash dividends accumulated with respect to any shares of Restricted Stock received as described above under “Vesting Schedule and Forfeiture—Change in Control,” as promptly as may be practicable after (A) the Committee certifies the attainment of the Performance Goal, or (B) if a Change in Control has occurred, the earlier to occur of the Vesting Date and the CIC Related Vesting Date, as applicable, and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Dividend Equivalents or dividends, as applicable, are no longer subject to a substantial risk of forfeiture. Notwithstanding the foregoing, in the event the Award is determined to be subject to Nonqualified Deferred Compensation Rules, payment will be made no later than the end of the year in which the Payment Trigger Date occurs, except to the extent Section 9(n) of the Plan requires payment on the Grantee’s Section 409A Payment Date. For purposes of clarity, if Performance Shares or shares of Restricted Stock are forfeited by the Grantee, then the Grantee shall also forfeit the Dividend Equivalents and/or dividends, if any, accrued with respect to such Performance Shares and/or shares of Restricted Stock. |
Date of Grant: | July 8, 2015 |
Award Type and Description: | Restricted Stock Units granted pursuant to Section 6(e) of the Plan that have been designated as a Performance Award under Section 6(k) of the Plan (referred to herein as “Performance Shares”), which Award is a bookkeeping entry that represents the right to receive a number of shares of Stock up to 200% of the Target Performance Shares (defined below), subject to the terms and conditions of the Award Agreement. This Award is also intended to constitute a Section 162(m) Award granted under Section 6(k)(i) of the Plan (even if the Grantee is not a Covered Employee on the Date of Grant). The Grantee’s right to receive payment of this Award in an amount ranging from 0% to 200% of the number of Target Performance Shares, rounded up to the nearest whole share, shall vest and become earned and nonforfeitable upon (i) the Grantee’s satisfaction of the continued service requirements described below under “Vesting Schedule and Forfeiture” and (ii) the Committee’s certification of the level of achievement of the Performance Goal (defined below). The number of Performance Shares actually earned upon satisfaction of the foregoing requirements are referred to herein as the “Earned Performance Shares.” |
Target Number of Shares: | See Morgan Stanley “StockPlan Connect/Stock-Based Awards/Awarded” for the target number of Performance Shares subject to the Award (the “Target Performance Shares”). |
Performance Period: | January 1, 2016 through December 31, 2018. |
Vesting Schedule and Forfeiture: | Vesting Date. The Grantee must remain in the continuous employ of the Company from the Date of Grant through the last day of the Performance Period (the “Vesting Date”) to be eligible to receive payment of this Award, subject to the level of achievement of the Performance Goal. The continuous employment of the Grantee will not be deemed to have been interrupted by reason of the transfer of the Grantee’s employment among the Company and its affiliates or an approved leave of absence. Termination of Employment. Notwithstanding the foregoing, if, prior to the Vesting Date, the Grantee (i) dies, or (ii) becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (iii) retires with the consent of the Company less than 12 months after the Date of Grant, or (iv) is terminated by the Company without Cause (each of the foregoing, a “Forfeiture Event”), then the number of Target Performance Shares will be reduced on a pro rata basis to the number obtained by multiplying the total number of Target Performance Shares granted by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the Forfeiture Event and the denominator of which is the total number of days in the Performance Period. Such remaining pro rata unvested Target Performance Shares shall remain eligible for payment following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period or the occurrence of a Change in Control, and all other Target Performance Shares shall be immediately forfeited. If the Grantee retires with the consent of the Company 12 months or more after the Date of Grant but prior to the Vesting Date, then none of the Target Performance Shares will be reduced or forfeited and the Grantee will remain eligible to receive payment with respect to all Target Performance Shares following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period. If the Grantee terminates employment for any reason prior to the first day of the Performance Period or terminates employment voluntarily or is terminated for Cause before the Vesting Date, then the Award will terminate automatically on the date of the Grantee’s termination and the Grantee shall immediately forfeit all Target Performance Shares. Change in Control. If a Change in Control occurs following a Forfeiture Event, then the unvested Target Performance Shares (as reduced as a result of the Forfeiture Event) shall become immediately vested and nonforfeitable and deemed to be Earned Performance Shares as of the date of the Change in Control (without regard to the level of achievement of the Performance Goal). For the avoidance of doubt, Target Performance Shares previously forfeited as a result of the Forfeiture Event shall not become vested pursuant to this paragraph. If a Forfeiture Event has not occurred and a Change in Control occurs prior to the Vesting Date, then 100% of the Target Performance Shares will be deemed to be Earned Performance Shares and will automatically convert into the same number of shares of Restricted Stock. The shares of Restricted Stock may not be transferred, assigned, sold, pledged, exchanged or otherwise encumbered or disposed of by the Grantee, except as provided for within the Plan, and are subject to a risk of forfeiture. In order for restrictions to lapse and the shares of Restricted Stock to become vested and nonforfeitable, the Grantee must remain in the continuous employ of the Company from the date of the Change in Control through the earlier to occur of (i) the Vesting Date or (ii) the date within 12 months following the date of the Change in Control on which the Grantee’s employment is terminated by the Company without Cause or by the Grantee for Good Reason (the “CIC Related Vesting Date”); provided, that, for the avoidance of doubt, vesting of the shares of Restricted Stock shall not be subject to any level of attainment of the Performance Goal, which shall be waived upon occurrence of the Change in Control. In addition, the Grantee shall be deemed to have a CIC Related Vesting Date (A) on the date at any time following the occurrence of a Change in Control and prior to the Vesting Date on which the Grantee dies or becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (B) if the Grantee has accrued 12 months of continuous employment with the Company following the Change in Control, on the date following the 12 month anniversary of the Change in Control date and prior to the Vesting Date on which the Grantee's employment is terminated by the Company without Cause or the Grantee retires with the consent of the Company; provided, that in the case of clause (A) or (B) of this sentence, the number of shares of Restricted Stock which shall become vested and nonforfeitable on the applicable CIC Related Vesting Date shall equal the total number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the CIC Related Vesting Date and the denominator of which is the total number of days in the Performance Period. For the avoidance of doubt, the occurrence of a Change in Control is not intended to change the protections provided to the Grantee in the event of the Grantee's death or permanent disability occurring prior to a Change in Control, other than waiver of any level of attainment of the Performance Goal. Except as otherwise provided in the Award Agreement, the Grantee shall have all of the rights of a stockholder with respect to the shares of Restricted Stock received upon conversion of Earned Performance Shares pursuant to this paragraph, including the right to vote such shares and, subject to the terms and conditions described below under “Dividends, Voting and Other Rights,” to receive any dividends that may be paid thereon; provided, that any and all such dividends shall be subject to the same restrictions as the underlying shares of Restricted Stock. The foregoing provisions shall not apply if, prior to the occurrence of the Change in Control, the Committee determines in its discretion that such event will not accelerate vesting of this Award. Any such determination by the Committee is binding on the Grantee. |
Performance Goal: | The “Performance Goal” for the Performance Period is based on the attainment of at least a minimum level of Return on Capital Employed (defined below) as described herein. For purposes of this Award, “Return on Capital Employed” shall be the percentage obtained by dividing (i) the sum of annual net income attributable to Stock, after adding back after-tax interest expense, for each year in the Performance Period, by (ii) the average capital employed (long-term debt plus stockholders’ equity) for each year in the Performance Period; in each case, as reported in Occidental’s Annual Report on Form 10-K. The Committee may adjust the Performance Goal as permitted by the Plan. * Specified thresholds will be adjusted up or down by 0.002% for every $0.01 change in the actual average WTI price at the end of the Performance Period as compared to the three-year average forward strip WTI prices as of the Date of Grant; provided, however, that any adjustment will not result in a minimum threshold of less than 2%. For these purposes, (i) three-year average forward strip WTI prices shall be the average of the monthly futures contract prices, as of the relevant date, for West Texas Intermediate Crude Oil, Cushing Delivery on the New York Mercantile Exchange (NYMEX:CL), and (ii) actual average WTI price shall be the daily average closing price for West Texas Intermediate Crude Oil, Cushing Delivery on the New York Mercantile Exchange (NYMEX:CL), as of the relevant date. All prices shall be as reported at www.bloomberg.com or other equivalent site. ** Payment percentages for other values between the values in the table will be linearly interpolated between the values in the table. Impact of Transfer of Employment. At the discretion of the Committee, if, prior to the end of the Performance Period, the Grantee transfers his employment among the Company, its subdivisions or its affiliates, the amount of the Award attained by the Grantee may be determined by assessing the level of achievement of the Performance Goals, if any, certified by the Committee for each entity that employed the Grantee during the Performance Period and multiplying the Target Performance Shares attainable at such level by a fraction, the numerator of which is the number of days during the Performance Period that the Grantee worked for the entity and the denominator of which is the total number of days in the Performance Period. If employees of the entity to which the Grantee transfers did not receive substantially similar Return on Asset Incentive Awards or Return on Capital Employed Incentive Awards, then the amount of the Award attained by the Grantee shall be determined as if the Grantee had not transferred but had remained with the Grantee’s original employer. |
Payment of Award: | Payment for Earned Performance Shares will be made solely in shares of Stock (in shares of Restricted Stock, in the case of the occurrence of a Change in Control), which will be issued to the Grantee as promptly as practicable after the Committee’s certification of attainment of the Performance Goal (which such payment and certification shall occur no later than 70 days following the end of the Performance Period) or the occurrence of a Change in Control (which such payment shall occur no later than 70 days following the date of the Change in Control), as applicable (the “Payment Trigger Date”), and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Performance Shares are no longer subject to a substantial risk of forfeiture. |
Dividends, Voting and Other Rights: | Performance Shares are not shares of Stock and have no voting rights or, except as described in this paragraph, dividend rights. With respect to each Performance Share subject to this Award, the Grantee is also awarded Dividend Equivalents with respect to one share of Stock, which means that, in the event that Occidental declares and pays a cash dividend on its outstanding Stock and, on the record date for such dividend, the Grantee holds Performance Shares that have not been settled (including settlement through conversion into Restricted Stock) or forfeited pursuant to the terms of the Award Agreement, then the Grantee will be credited on the books and records of Occidental with an amount equal to the amount per share of any such cash dividend for each outstanding Performance Share. The Grantee will be credited with such Dividend Equivalents for the period beginning on the Date of Grant and ending on the applicable Payment Trigger Date or, if earlier, the date the Grantee forfeits his rights with respect to the Performance Shares. Occidental will pay in cash to the Grantee an amount equal to (i) the Dividend Equivalents credited to such Grantee, adjusted as necessary to reflect the number of Earned Performance Shares, plus (ii) if applicable, the amount of any cash dividends accumulated with respect to any shares of Restricted Stock received as described above under “Vesting Schedule and Forfeiture—Change in Control,” as promptly as may be practicable after (A) the Committee certifies the attainment of the Performance Goal, or (B) if a Change in Control has occurred, the earlier to occur of the Vesting Date and the CIC Related Vesting Date, as applicable, and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Dividend Equivalents or dividends, as applicable, are no longer subject to a substantial risk of forfeiture. Notwithstanding the foregoing, in the event the Award is determined to be subject to Nonqualified Deferred Compensation Rules, payment will be made no later than the end of the year in which the Payment Trigger Date occurs, except to the extent Section 9(n) of the Plan requires payment on the Grantee’s Section 409A Payment Date. For purposes of clarity, if Performance Shares or shares of Restricted Stock are forfeited by the Grantee, then the Grantee shall also forfeit the Dividend Equivalents and/or dividends, if any, accrued with respect to such Performance Shares and/or shares of Restricted Stock. |
Date of Grant: | July 8, 2015 |
Award Type and Description: | Restricted Stock Units granted pursuant to Section 6(e) of the Plan that have been designated as a Performance Award under Section 6(k) of the Plan (referred to herein as “Performance Shares”), which Award is a bookkeeping entry that represents the right to receive a number of shares of Stock up to 200% of the Target Performance Shares (defined below), subject to the terms and conditions of the Award Agreement. This Award is also intended to constitute a Section 162(m) Award granted under Section 6(k)(i) of the Plan (even if the Grantee is not a Covered Employee on the Date of Grant). The Grantee’s right to receive payment of this Award in an amount ranging from 0% to 200% of the number of Target Performance Shares, rounded up to the nearest whole share, shall vest and become earned and nonforfeitable upon (i) the Grantee’s satisfaction of the continued service requirements described below under “Vesting Schedule and Forfeiture” and (ii) the Committee’s certification of the level of achievement of the Performance Goal (defined below). The number of Performance Shares actually earned upon satisfaction of the foregoing requirements are referred to herein as the “Earned Performance Shares.” |
Target Number of Shares: | See Morgan Stanley “StockPlan Connect/Stock-Based Awards/Awarded” for the target number of Performance Shares subject to the Award (the “Target Performance Shares”). |
Performance Period: | July 1, 2015 through June 30, 2018. |
Vesting Schedule and Forfeiture: | Vesting Date. The Grantee must remain in the continuous employ of the Company from the Date of Grant through the last day of the Performance Period (the “Vesting Date”) to be eligible to receive payment of this Award, subject to the level of achievement of the Performance Goal. The continuous employment of the Grantee will not be deemed to have been interrupted by reason of the transfer of the Grantee’s employment among the Company and its affiliates or an approved leave of absence. Termination of Employment. Notwithstanding the foregoing, if, prior to the Vesting Date, the Grantee (i) dies, or (ii) becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (iii) retires with the consent of the Company less than 12 months after the Date of Grant, or (iv) is terminated by the Company without Cause (each of the foregoing, a “Forfeiture Event”), then the number of Target Performance Shares will be reduced on a pro rata basis to the number obtained by multiplying the total number of Target Performance Shares granted by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the Forfeiture Event and the denominator of which is the total number of days in the Performance Period. Such remaining pro rata unvested Target Performance Shares shall remain eligible for payment following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period or the occurrence of a Change in Control, and all other Target Performance Shares shall be immediately forfeited. If the Grantee retires with the consent of the Company 12 months or more after the Date of Grant but prior to the Vesting Date, then none of the Target Performance Shares will be reduced or forfeited and the Grantee will remain eligible to receive payment with respect to all Target Performance Shares following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period. If the Grantee terminates employment voluntarily or is terminated for Cause before the Vesting Date, then the Award will terminate automatically on the date of the Grantee’s termination and the Grantee shall immediately forfeit all Target Performance Shares. Change in Control. If a Change in Control occurs following a Forfeiture Event, then the unvested Target Performance Shares (as reduced as a result of the Forfeiture Event) shall become immediately vested and nonforfeitable and deemed to be Earned Performance Shares as of the date of the Change in Control (without regard to the level of achievement of the Performance Goal). For the avoidance of doubt, Target Performance Shares previously forfeited as a result of the Forfeiture Event shall not become vested pursuant to this paragraph. If a Forfeiture Event has not occurred and a Change in Control occurs prior to the Vesting Date, then 100% of the Target Performance Shares will be deemed to be Earned Performance Shares and will automatically convert into the same number of shares of Restricted Stock. The shares of Restricted Stock may not be transferred, assigned, sold, pledged, exchanged or otherwise encumbered or disposed of by the Grantee, except as provided for within the Plan, and are subject to a risk of forfeiture. In order for restrictions to lapse and the shares of Restricted Stock to become vested and nonforfeitable, the Grantee must remain in the continuous employ of the Company from the date of the Change in Control through the earlier to occur of (i) the Vesting Date or (ii) the date within 12 months following the date of the Change in Control on which the Grantee’s employment is terminated by the Company without Cause or by the Grantee for Good Reason (the “CIC Related Vesting Date”); provided, that, for the avoidance of doubt, vesting of the shares of Restricted Stock shall not be subject to any level of attainment of the Performance Goal, which shall be waived upon occurrence of the Change in Control. In addition, the Grantee shall be deemed to have a CIC Related Vesting Date (A) on the date at any time following the occurrence of a Change in Control and prior to the Vesting Date on which the Grantee dies or becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (B) if the Grantee has accrued 12 months of continuous employment with the Company following the Change in Control, on the date following the 12 month anniversary of the Change in Control date and prior to the Vesting Date on which the Grantee's employment is terminated by the Company without Cause or the Grantee retires with the consent of the Company; provided, that in the case of clause (A) or (B) of this sentence, the number of shares of Restricted Stock which shall become vested and nonforfeitable on the applicable CIC Related Vesting Date shall equal the total number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the CIC Related Vesting Date and the denominator of which is the total number of days in the Performance Period. For the avoidance of doubt, the occurrence of a Change in Control is not intended to change the protections provided to the Grantee in the event of the Grantee's death or permanent disability occurring prior to a Change in Control, other than waiver of any level of attainment of the Performance Goal. Except as otherwise provided in the Award Agreement, the Grantee shall have all of the rights of a stockholder with respect to the shares of Restricted Stock received upon conversion of Earned Performance Shares pursuant to this paragraph, including the right to vote such shares and, subject to the terms and conditions described below under “Dividends, Voting and Other Rights,” to receive any dividends that may be paid thereon; provided, that any and all such dividends shall be subject to the same restrictions as the underlying shares of Restricted Stock. The foregoing provisions shall not apply if, prior to the occurrence of the Change in Control, the Committee determines in its discretion that such event will not accelerate vesting of this Award. Any such determination by the Committee is binding on the Grantee. |
Performance Goal: | The “Performance Goal” for the Performance Period is based on relative total shareholder return (referred to as “total stockholder return” in the Plan) (“TSR”) of the Peer Companies (defined below) and the Standard & Poor’s 500 Stock Index, as described herein. The Committee may adjust the Performance Goal as permitted by the Plan. Peer Companies. In addition to Occidental, the “Peer Companies” are Anadarko Petroleum Corporation, Apache Corporation, Canadian Natural Resources Limited, Chevron Corporation, ConocoPhillips, Devon Energy Corporation, EOG Resources, Inc., ExxonMobil Corporation, Hess Corporation, Marathon Oil Corporation, and Total S.A. Consistent with Section 162(m) of the Code, if at any time during the Performance Period, a Peer Company is acquired, ceases to exist, ceases to be a publicly-traded company, files for bankruptcy, spins off 25% or more of its assets, or sells all or substantially all of its assets, then such company will be removed and treated as if it had never been a Peer Company and the achievement of the Performance Goal will be determined with respect to the remaining Peer Companies. Calculation of TSR. TSR shall be calculated for each Peer Company using (i) the average of its last reported sale price per share of common stock on the New York Stock Exchange (“NYSE”)—Composite Transactions for each trading day during the 30 calendar days beginning with the first day of the Performance Period and (ii) the average of its last reported sale price per share of common stock on the NYSE-Composite Transactions for each trading day during the 30 calendar days ending with the last day of the Performance Period. At the end of the Performance Period, the TSR of each Peer Company shall be calculated by the Committee in its good faith discretion, and the ranking of Occidental’s TSR compared to the TSR of each other Peer Company shall determine the percentage of the Target Performance Shares that may become Earned Performance Shares as follows: If Occidental’s TSR is negative or does not exceed the TSR of the Standard & Poor’s 500 Stock Index for the Performance Period, the number of Earned Performance Shares will be limited to the Target Performance Shares. At the end of the Performance Period, the TSR of Occidental shall be calculated by the Committee in its good faith discretion using (i) the average of Occidental’s last reported sale price per share of Stock on the NYSE—Composite Transactions for each trading day during the 30 calendar days beginning with the first day of the Performance Period and (ii) the average of Occidental’s last reported sale price per share of Stock on the NYSE-Composite Transactions for each trading day during the 30 calendar days ending with the last day of the Performance Period. |
Payment of Award: | Payment for Earned Performance Shares will be made solely in shares of Stock (in shares of Restricted Stock, in the case of the occurrence of a Change in Control), which will be issued to the Grantee as promptly as practicable after the Committee’s certification of attainment of the Performance Goal (which such payment and certification shall occur no later than 70 days following the end of the Performance Period) or the occurrence of a Change in Control (which such payment shall occur no later than 70 days following the date of the Change in Control), as applicable (the “Payment Trigger Date”), and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Performance Shares are no longer subject to a substantial risk of forfeiture. |
Dividends, Voting and Other Rights: | Performance Shares are not shares of Stock and have no voting rights or, except as described in this paragraph, dividend rights. With respect to each Performance Share subject to this Award, the Grantee is also awarded Dividend Equivalents with respect to one share of Stock, which means that, in the event that Occidental declares and pays a cash dividend on its outstanding Stock and, on the record date for such dividend, the Grantee holds Performance Shares that have not been settled (including settlement through conversion into Restricted Stock) or forfeited pursuant to the terms of the Award Agreement, then the Grantee will be credited on the books and records of Occidental with an amount equal to the amount per share of any such cash dividend for each outstanding Performance Share. The Grantee will be credited with such Dividend Equivalents for the period beginning on the Date of Grant and ending on the applicable Payment Trigger Date or, if earlier, the date the Grantee forfeits his rights with respect to the Performance Shares. Occidental will pay in cash to the Grantee an amount equal to (i) the Dividend Equivalents credited to such Grantee, adjusted as necessary to reflect the number of Earned Performance Shares, plus (ii) if applicable, the amount of any cash dividends accumulated with respect to any shares of Restricted Stock received as described above under “Vesting Schedule and Forfeiture—Change in Control,” as promptly as may be practicable after (A) the Committee certifies the attainment of the Performance Goal, or (B) if a Change in Control has occurred, the earlier to occur of the Vesting Date and the CIC Related Vesting Date, as applicable, and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Dividend Equivalents or dividends, as applicable, are no longer subject to a substantial risk of forfeiture. Notwithstanding the foregoing, in the event the Award is determined to be subject to Nonqualified Deferred Compensation Rules, payment will be made no later than the end of the year in which the Payment Trigger Date occurs, except to the extent Section 9(n) of the Plan requires payment on the Grantee’s Section 409A Payment Date. For purposes of clarity, if Performance Shares or shares of Restricted Stock are forfeited by the Grantee, then the Grantee shall also forfeit the Dividend Equivalents and/or dividends, if any, accrued with respect to such Performance Shares and/or shares of Restricted Stock. |
Date of Grant: | July 8, 2015 |
Award Type and Description: | Restricted Stock Units granted pursuant to Section 6(e) of the Plan that have been designated as a Performance Award under Section 6(k) of the Plan (referred to herein as “Performance Shares”), which Award is a bookkeeping entry that represents the right to receive a number of shares of Stock up to 200% of the Target Performance Shares (defined below), subject to the terms and conditions of the Award Agreement. This Award is also intended to constitute a Section 162(m) Award granted under Section 6(k)(i) of the Plan (even if the Grantee is not a Covered Employee on the Date of Grant). The Grantee’s right to receive payment of this Award in an amount ranging from 0% to 200% of the number of Target Performance Shares, rounded up to the nearest whole share, shall vest and become earned and nonforfeitable upon (i) the Grantee’s satisfaction of the continued service requirements described below under “Vesting Schedule and Forfeiture” and (ii) the Committee’s certification of the level of achievement of the Performance Goal (defined below). The number of Performance Shares actually earned upon satisfaction of the foregoing requirements are referred to herein as the “Earned Performance Shares.” |
Target Number of Shares: | See Morgan Stanley “StockPlan Connect/Stock-Based Awards/Awarded” for the target number of Performance Shares subject to the Award (the “Target Performance Shares”). |
Performance Period: | January 1, 2016 through December 31, 2018. |
Vesting Schedule and Forfeiture: | Vesting Date. The Grantee must remain in the continuous employ of the Company from the Date of Grant through the last day of the Performance Period (the “Vesting Date”) to be eligible to receive payment of this Award, subject to the level of achievement of the Performance Goal. The continuous employment of the Grantee will not be deemed to have been interrupted by reason of the transfer of the Grantee’s employment among the Company and its affiliates or an approved leave of absence. Termination of Employment. Notwithstanding the foregoing, if, prior to the Vesting Date, the Grantee (i) dies, or (ii) becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (iii) retires with the consent of the Company less than 12 months after the Date of Grant, or (iv) is terminated by the Company without Cause (each of the foregoing, a “Forfeiture Event”), then the number of Target Performance Shares will be reduced on a pro rata basis to the number obtained by multiplying the total number of Target Performance Shares granted by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the Forfeiture Event and the denominator of which is the total number of days in the Performance Period. Such remaining pro rata unvested Target Performance Shares shall remain eligible for payment following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period or the occurrence of a Change in Control, and all other Target Performance Shares shall be immediately forfeited. If the Grantee retires with the consent of the Company 12 months or more after the Date of Grant but prior to the Vesting Date, then none of the Target Performance Shares will be reduced or forfeited and the Grantee will remain eligible to receive payment with respect to all Target Performance Shares following the date of the Forfeiture Event, subject to the level of achievement of the Performance Goal at the end of the Performance Period. If the Grantee terminates employment for any reason prior to the first day of the Performance Period or terminates employment voluntarily or is terminated for Cause before the Vesting Date, then the Award will terminate automatically on the date of the Grantee’s termination and the Grantee shall immediately forfeit all Target Performance Shares. Notwithstanding anything to the contrary herein, if the Grantee retires with the consent of the Company, then the Target Performance Shares will not be reduced or forfeited and shall remain eligible for payment following the date of the Forfeiture Event, subject to attainment of the applicable Performance Goal or the occurrence of a Change in Control. Change in Control. If a Change in Control occurs following a Forfeiture Event, then the unvested Target Performance Shares (as reduced as a result of the Forfeiture Event) shall become immediately vested and nonforfeitable and deemed to be Earned Performance Shares as of the date of the Change in Control (without regard to the level of achievement of the Performance Goal). For the avoidance of doubt, Target Performance Shares previously forfeited as a result of the Forfeiture Event shall not become vested pursuant to this paragraph. If a Forfeiture Event has not occurred and a Change in Control occurs prior to the Vesting Date, then 100% of the Target Performance Shares will be deemed to be Earned Performance Shares and will automatically convert into the same number of shares of Restricted Stock. The shares of Restricted Stock may not be transferred, assigned, sold, pledged, exchanged or otherwise encumbered or disposed of by the Grantee, except as provided for within the Plan, and are subject to a risk of forfeiture. In order for restrictions to lapse and the shares of Restricted Stock to become vested and nonforfeitable, the Grantee must remain in the continuous employ of the Company from the date of the Change in Control through the earlier to occur of (i) the Vesting Date or (ii) the date within 12 months following the date of the Change in Control on which the Grantee’s employment is terminated by the Company without Cause or by the Grantee for Good Reason (the “CIC Related Vesting Date”); provided, that, for the avoidance of doubt, vesting of the shares of Restricted Stock shall not be subject to any level of attainment of the Performance Goal, which shall be waived upon occurrence of the Change in Control. In addition, the Grantee shall be deemed to have a CIC Related Vesting Date (A) on the date at any time following the occurrence of a Change in Control and prior to the Vesting Date on which the Grantee dies or becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (B) if the Grantee has accrued 12 months of continuous employment with the Company following the Change in Control, on the date following the 12 month anniversary of the Change in Control date and prior to the Vesting Date on which the Grantee's employment is terminated by the Company without Cause or the Grantee retires with the consent of the Company; provided, that in the case of clause (A) or (B) of this sentence, the number of shares of Restricted Stock which shall become vested and nonforfeitable on the applicable CIC Related Vesting Date shall equal the total number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of days between the first day of the Performance Period and the CIC Related Vesting Date and the denominator of which is the total number of days in the Performance Period. For the avoidance of doubt, the occurrence of a Change in Control is not intended to change the protections provided to the Grantee in the event of the Grantee's death or permanent disability occurring prior to a Change in Control, other than waiver of any level of attainment of the Performance Goal. Except as otherwise provided in the Award Agreement, the Grantee shall have all of the rights of a stockholder with respect to the shares of Restricted Stock received upon conversion of Earned Performance Shares pursuant to this paragraph, including the right to vote such shares and, subject to the terms and conditions described below under “Dividends, Voting and Other Rights,” to receive any dividends that may be paid thereon; provided, that any and all such dividends shall be subject to the same restrictions as the underlying shares of Restricted Stock. The foregoing provisions shall not apply if, prior to the occurrence of the Change in Control, the Committee determines in its discretion that such event will not accelerate vesting of this Award. Any such determination by the Committee is binding on the Grantee. |
Performance Goal: | The “Performance Goal” for the Performance Period is based on the attainment of at least a minimum level of Return on Capital Employed (defined below) as described herein. For purposes of this Award, “Return on Capital Employed” shall be the percentage obtained by dividing (i) the sum of annual net income attributable to Stock, after adding back after-tax interest expense, for each year in the Performance Period, by (ii) the average capital employed (long-term debt plus stockholders’ equity) for each year in the Performance Period; in each case, as reported in Occidental’s Annual Report on Form 10-K. The Committee may adjust the Performance Goal as permitted by the Plan. * Specified thresholds will be adjusted up or down by 0.002% for every $0.01 change in the actual average WTI price at the end of the Performance Period as compared to the three-year average forward strip WTI prices as of the Date of Grant; provided, however, that any adjustment will not result in a minimum threshold of less than 2%. For these purposes, (i) three-year average forward strip WTI prices shall be the average of the monthly futures contract prices, as of the relevant date, for West Texas Intermediate Crude Oil, Cushing Delivery on the New York Mercantile Exchange (NYMEX:CL), and (ii) actual average WTI price shall be the daily average closing price for West Texas Intermediate Crude Oil, Cushing Delivery on the New York Mercantile Exchange (NYMEX:CL), as of the relevant date. All prices shall be as reported at www.bloomberg.com or other equivalent site. ** Payment percentages for other values between the values in the table will be linearly interpolated between the values in the table. Impact of Transfer of Employment. At the discretion of the Committee, if, prior to the end of the Performance Period, the Grantee transfers his employment among the Company, its subdivisions or its affiliates, the amount of the Award attained by the Grantee may be determined by assessing the level of achievement of the Performance Goals, if any, certified by the Committee for each entity that employed the Grantee during the Performance Period and multiplying the Target Performance Shares attainable at such level by a fraction, the numerator of which is the number of days during the Performance Period that the Grantee worked for the entity and the denominator of which is the total number of days in the Performance Period. If employees of the entity to which the Grantee transfers did not receive substantially similar Return on Asset Incentive Awards or Return on Capital Employed Incentive Awards, then the amount of the Award attained by the Grantee shall be determined as if the Grantee had not transferred but had remained with the Grantee’s original employer. |
Payment of Award: | Payment for Earned Performance Shares will be made solely in shares of Stock (in shares of Restricted Stock, in the case of the occurrence of a Change in Control), which will be issued to the Grantee as promptly as practicable after the Committee’s certification of attainment of the Performance Goal (which such payment and certification shall occur no later than 70 days following the end of the Performance Period) or the occurrence of a Change in Control (which such payment shall occur no later than 70 days following the date of the Change in Control), as applicable (the “Payment Trigger Date”), and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Performance Shares are no longer subject to a substantial risk of forfeiture. |
Dividends, Voting and Other Rights: | Performance Shares are not shares of Stock and have no voting rights or, except as described in this paragraph, dividend rights. With respect to each Performance Share subject to this Award, the Grantee is also awarded Dividend Equivalents with respect to one share of Stock, which means that, in the event that Occidental declares and pays a cash dividend on its outstanding Stock and, on the record date for such dividend, the Grantee holds Performance Shares that have not been settled (including settlement through conversion into Restricted Stock) or forfeited pursuant to the terms of the Award Agreement, then the Grantee will be credited on the books and records of Occidental with an amount equal to the amount per share of any such cash dividend for each outstanding Performance Share. The Grantee will be credited with such Dividend Equivalents for the period beginning on the Date of Grant and ending on the applicable Payment Trigger Date or, if earlier, the date the Grantee forfeits his rights with respect to the Performance Shares. Occidental will pay in cash to the Grantee an amount equal to (i) the Dividend Equivalents credited to such Grantee, adjusted as necessary to reflect the number of Earned Performance Shares, plus (ii) if applicable, the amount of any cash dividends accumulated with respect to any shares of Restricted Stock received as described above under “Vesting Schedule and Forfeiture—Change in Control,” as promptly as may be practicable after (A) the Committee certifies the attainment of the Performance Goal, or (B) if a Change in Control has occurred, the earlier to occur of the Vesting Date and the CIC Related Vesting Date, as applicable, and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Dividend Equivalents or dividends, as applicable, are no longer subject to a substantial risk of forfeiture. Notwithstanding the foregoing, in the event the Award is determined to be subject to Nonqualified Deferred Compensation Rules, payment will be made no later than the end of the year in which the Payment Trigger Date occurs, except to the extent Section 9(n) of the Plan requires payment on the Grantee’s Section 409A Payment Date. For purposes of clarity, if Performance Shares or shares of Restricted Stock are forfeited by the Grantee, then the Grantee shall also forfeit the Dividend Equivalents and/or dividends, if any, accrued with respect to such Performance Shares and/or shares of Restricted Stock. |
Date of Grant: | July 8, 2015 |
Award Type and Description: | Restricted Stock Units granted pursuant to Section 6(e) of the Plan that have been designated as a Retention Award within the meaning of Section 2(cc) of the Plan and a Performance Award under Section 6(k) of the Plan (referred to herein as “Performance Shares”), which Award is a bookkeeping entry that represents the right to receive a number of shares of Stock up to the number indicated below under “Number of Shares,” subject to the terms and conditions of the Award Agreement. This Award is also intended to constitute a Section 162(m) Award granted under Section 6(k)(i) of the Plan (even if the Grantee is not a Covered Employee on the Date of Grant but is likely to be a Covered Employee at the time the applicable Performance Goal (as defined below) is certified). The Grantee’s right to receive payment of this Award, or any Tranche (as defined below) thereof, shall vest and become earned and nonforfeitable upon (i) the Grantee’s satisfaction of the continued service requirements described below under “Vesting Schedule and Forfeiture” and (ii) the Committee’s certification of the attainment of the applicable Performance Goal (defined below). Performance Shares actually earned upon satisfaction of the foregoing requirements are referred to herein as “Earned Performance Shares.” |
Number of Shares: | See Morgan Stanley “StockPlan Connect/Stock-Based Awards/Awarded” for the total number of Performance Shares subject to the Award, which are divided into the following designated tranches (each, a “Tranche”): |
Performance Period: | Each Tranche of the Award has a unique “Performance Period” as follows: |
* The “Cumulative Performance Period” for each Tranche shall commence on the first day of the applicable Performance Period for such Tranche and continue through June 30, 2022. | |
Vesting Schedule and Forfeiture: | Vesting Date. The Grantee must remain in the continuous employ of the Company from the Date of Grant (and each applicable vesting start date) through each applicable vesting end date (each such vesting end date, a “Vesting Date”), in accordance with the schedule below, to be eligible to receive payment of this Award, subject to attainment of the Performance Goal. The continuous employment of the Grantee will not be deemed to have been interrupted by reason of the transfer of the Grantee’s employment among the Company and its affiliates or an approved leave of absence. Termination of Employment. Notwithstanding the foregoing, if, prior to any Vesting Date, the Grantee (i) dies, or (ii) becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (iii) retires with the consent of the Company, or (iv) is terminated by the Company without Cause (each of the foregoing, a “Forfeiture Event”), then the number of Performance Shares subject to any Tranche with respect to which the continued service requirements have not been met will be reduced on a pro rata basis to the number obtained by multiplying the total number of Performance Shares subject to such Tranche by a fraction, the numerator of which is the number of days between the Date of Grant and the date of the Forfeiture Event and the denominator of which is the number of days between the Date of Grant and the Vesting Date on which such Tranche was scheduled to vest. Such remaining pro rata unvested Performance Shares subject to any such Tranche (along with any Performance Shares subject to a Tranche with respect to which the continued service requirements have previously been met but for which the applicable Performance Goal has not yet been satisfied) shall remain eligible for payment following the Forfeiture Event, subject to attainment of the applicable Performance Goal or the occurrence of a Change in Control, and all other Performance Shares with respect to which the continued service requirements have not previously been met shall be immediately forfeited. Notwithstanding anything to the contrary herein, if the Grantee retires with the consent of the Company, then the number of Performance Shares will not be reduced or forfeited and shall remain eligible for payment following the date of the Forfeiture Event, subject to attainment of the applicable Performance Goal or the occurrence of a Change in Control. If the Grantee terminates employment voluntarily or is terminated for Cause before any Vesting Date, then the Award will terminate automatically on the date of the Grantee’s termination and the Grantee shall immediately forfeit all unvested Performance Shares. Change in Control. If a Change in Control occurs following a Forfeiture Event, then the unvested Performance Shares, as reduced as a result of the Forfeiture Event, (along with any Performance Shares subject to a Tranche with respect to which the continued service requirements have previously been met but for which the applicable Performance Goal has not yet been satisfied) shall become immediately vested and nonforfeitable and deemed to be Earned Performance Shares as of the date of the Change in Control (without regard to whether the applicable Performance Goal has been attained). For the avoidance of doubt, Performance Shares previously forfeited as a result of the Forfeiture Event shall not become vested pursuant to this paragraph. If a Forfeiture Event has not occurred and a Change in Control occurs prior to the final Vesting Date, then all unvested Performance Shares with respect to which the continued service requirements have not been met will be deemed Earned Performance Shares and will automatically convert into the same number of shares of Restricted Stock. The shares of Restricted Stock may not be transferred, assigned, sold, pledged, exchanged or otherwise encumbered or disposed of by the Grantee, except as provided for within the Plan, and are subject to a risk of forfeiture. In order for restrictions to lapse and the shares of Restricted Stock to become vested and nonforfeitable, the Grantee must remain in the continuous employ of the Company from the date of the Change in Control through the earlier to occur of (i) the applicable Vesting Date on which such Tranche to which the shares of Restricted Stock relate was originally scheduled to vest or (ii) the date within 12 months following the date of the Change in Control on which the Grantee’s employment is terminated by the Company without Cause or by the Grantee for Good Reason (the “CIC Related Vesting Date”); provided, that, for the avoidance of doubt, vesting of the Restricted Stock shall not be subject to attainment of the applicable Performance Goal, which shall be waived upon occurrence of the Change in Control. In addition, the Grantee shall be deemed to have a CIC Related Vesting Date (A) on the date at any time following the occurrence of a Change in Control and prior to any Vesting Date on which the Grantee dies or becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, or (B) if the Grantee has accrued 12 months of continuous employment with the Company following the Change in Control, on the date following the 12 month anniversary of the Change in Control date and prior to any Vesting Date on which the Grantee's employment is terminated by the Company without Cause or the Grantee retires with the consent of the Company; provided, that in the case of clause (A) or (B) of this sentence, the number of shares of Restricted Stock which shall become vested and nonforfeitable on the applicable CIC Related Vesting Date shall equal the total number of shares of Restricted Stock subject to any such Tranche with respect to which the continued service requirements have not been met multiplied by a fraction, the numerator of which is the number of days between the Date of Grant and the CIC Related Vesting Date and the denominator of which is the total number of days between the Date of Grant and the Vesting Date on which such Tranche was scheduled to vest. For the avoidance of doubt, the occurrence of a Change in Control is not intended to change the protections provided to the Grantee in the event of the Grantee's death or permanent disability occurring prior to a Change in Control, other than waiver of any level of attainment of the Performance Goal. Except as otherwise provided in the Award Agreement, the Grantee shall have all of the rights of a stockholder with respect to the shares of Restricted Stock received upon conversion of Earned Performance Shares pursuant to this paragraph, including the right to vote such shares and, subject to the terms and conditions described below under “Dividends, Voting and Other Rights,” to receive any dividends that may be paid thereon; provided, that any and all such dividends shall be subject to the same restrictions as the underlying shares of Restricted Stock. In addition, upon the occurrence of a Change in Control, any Performance Shares subject to a Tranche with respect to which the continued service requirements have previously been met but for which the applicable Performance Goal has not yet been satisfied, shall become immediately vested and nonforfeitable and deemed to be Earned Performance Shares. The foregoing provisions shall not apply if, prior to the occurrence of the Change in Control, the Committee determines in its discretion that such event will not accelerate vesting of this Award. Any such determination by the Committee is binding on the Grantee. |
Performance Goal: | The “Performance Goal” for each Tranche of the Award is either (i) the attainment of positive earnings per share (“EPS”) of Occidental during the Tranche’ applicable Performance Period; or (ii) attainment of positive EPS, on a cumulative basis, during the period commencing on the first day of the Tranche’s applicable Performance Period and ending on any June 30 during the Tranche's Cumulative Performance Period. By way of example, the Performance Goal will be attained for Tranche 3 if either: (i) the EPS for Tranche 3’s Performance Period (ending June 30, 2018) is positive, or (ii) the EPS is positive, on a cumulative basis, for the 2-year period ending June 30, 2019, the 3-year period ending June 30, 2020, the 4-year period ending June 30, 2021, or 5-year period ending June 30, 2022. Otherwise, all unvested Performance Shares subject to such Tranche will be forfeited. The Committee may certify attainment of the Performance Goal for a Tranche only on or after the Vesting Date for such Tranche. The Committee may adjust the Performance Goal as permitted by the Plan. |
Payment of Award | Payment for Earned Performance Shares will be made solely in shares of Stock (in shares of Restricted Stock, in the case of the occurrence of a Change in Control with respect to any Tranche for which the continued services requirements have not been previously met), which will be issued to the Grantee as promptly as practicable after the Committee’s certification of attainment of the applicable Performance Goal for the Tranche to which the Earned Performance Shares relate (which such payment and certification shall occur no later than 70 days following the end of the Performance Period for such Tranche) or the occurrence of a Change in Control (which such payment shall occur no later than 70 days following the date of the Change in Control), as applicable (the “Payment Trigger Date”), and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Performance Shares are no longer subject to a substantial risk of forfeiture. |
Dividends, Voting and Other Rights: | Performance Shares are not shares of Stock and have no voting rights or, except as described in this paragraph, dividend rights. With respect to each Performance Share subject to this Award, the Grantee is also awarded Dividend Equivalents with respect to one share of Stock, which means that, in the event that Occidental declares and pays a cash dividend on its outstanding Stock and, on the record date for such dividend, the Grantee holds Performance Shares that have not been settled (including settlement through conversion into Restricted Stock) or forfeited pursuant to the terms of the Award Agreement, then the Grantee will be credited on the books and records of Occidental with an amount equal to the amount per share of any such cash dividend for each outstanding Performance Share. The Grantee will be credited with such Dividend Equivalents for the period beginning on the Date of Grant and ending on the applicable Payment Trigger Date or, if earlier, the date the Grantee forfeits his rights with respect to the Performance Shares. Occidental will pay in cash to the Grantee an amount equal to (i) the Dividend Equivalents credited to such Grantee with respect to any Earned Performance Shares, plus (ii) if applicable, the amount of any cash dividends accumulated with respect to any shares of Restricted Stock received as described above under “Vesting Schedule and Forfeiture—Change in Control,” as promptly as may be practicable after (A) the Committee certifies the attainment of the Performance Goal, or (B) if a Change in Control has occurred, the earlier to occur of the Vesting Date and the CIC Related Vesting Date, as applicable, and in any event no later than the 15th day of the third month following the end of the first taxable year in which the Dividend Equivalents and/or dividends, as applicable, are no longer subject to a substantial risk of forfeiture. Notwithstanding the foregoing, in the event the Award is determined to be subject to Nonqualified Deferred Compensation Rules, payment will be made no later than the end of the year in which the Payment Trigger Date occurs, except to the extent Section 9(n) of the Plan requires payment on the Grantee's Section 409A Payment Date. For purposes of clarity, if Performance Shares or shares of Restricted Stock are forfeited by the Grantee, then the Grantee shall also forfeit the Dividend Equivalents and/or dividends, if any, accrued with respect to such Performance Shares and/or shares of Restricted Stock. The Grantee expressly authorizes the Company to withhold, based on applicable minimum statutory withholding rates as determined by the Committee, all applicable Tax Related Items (as defined in the Terms and Conditions) legally payable by the Grantee in connection with the payment for Earned Performance Shares or the vesting of any shares of Restricted Stock first from any Dividend Equivalents or cash dividends payable pursuant to the Award. |
EXHIBIT 12 |
Six Months Ended June 30 | Year Ended December 31 | |||||||||||||||||||||||||||
2015 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||||
Income from continuing operations (a) | $ | (35 | ) | $ | 2,298 | $ | (130 | ) | $ | 4,932 | $ | 3,829 | $ | 5,527 | $ | 3,851 | ||||||||||||
Add/(Subtract): | ||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | — | (5 | ) | (14 | ) | — | — | — | (72 | ) | ||||||||||||||||||
Adjusted income from equity investments (b) | (17 | ) | (1 | ) | 64 | 52 | 163 | (33 | ) | (60 | ) | |||||||||||||||||
(52 | ) | 2,292 | (80 | ) | 4,984 | 3,992 | 5,494 | 3,719 | ||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||
Provision for taxes on income (other than foreign oil and gas taxes) | (127 | ) | 655 | (280 | ) | 1,353 | 249 | 1,167 | 671 | |||||||||||||||||||
Interest and debt expense | 38 | 42 | 77 | 132 | 149 | 313 | (c) | 133 | ||||||||||||||||||||
Portion of lease rentals representative of the interest factor | 31 | 28 | 52 | 60 | 58 | 57 | 55 | |||||||||||||||||||||
(58 | ) | 725 | (151 | ) | 1,545 | 456 | 1,537 | 859 | ||||||||||||||||||||
Earnings before fixed charges | $ | (110 | ) | $ | 3,017 | $ | (231 | ) | $ | 6,529 | $ | 4,448 | $ | 7,031 | $ | 4,578 | ||||||||||||
Fixed charges: | ||||||||||||||||||||||||||||
Interest and debt expense including capitalized interest | $ | 129 | $ | 128 | $ | 257 | $ | 269 | $ | 254 | (c) | $ | 384 | $ | 204 | |||||||||||||
Portion of lease rentals representative of the interest factor | 31 | 28 | 52 | 30 | 58 | 57 | 55 | |||||||||||||||||||||
Total fixed charges | $ | 160 | $ | 156 | $ | 309 | $ | 299 | $ | 312 | $ | 441 | $ | 259 | ||||||||||||||
Ratio of earnings to fixed charges | (0.69 | ) | 19.30 | (0.75 | ) | 19.83 | 14.26 | 15.93 | 17.65 | |||||||||||||||||||
Insufficient coverage | (270 | ) | (d) | (540 | ) |
Note: Results of California Resources Corporation have been reflected as discontinued operations for all periods presented. | ||
(a) | The 2015 amounts includes a $177 million dollar after-tax charge for domestic asset impairments and other related items for the first quarter 2015, a $47 million dollar after-tax charge for foreign asset impairments and other related items, a $2 million dollar charge related to Phibro operation results, and a $25 million dollar charge for cost associated with the California Resources Corporation spin-off and other charges. | |
(b) | Represents adjustments to arrive at distributed income from equity investees. | |
(c) | Excludes a pre-tax charge of $163 million for the early redemption of debt. | |
(d) | The 2015 second quarter ratio of earnings to fixed charges excluding certain items (a) is 0.88 |
1. | I have reviewed this quarterly report on Form 10-Q of Occidental Petroleum Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Stephen I. Chazen | ||
Stephen I. Chazen | ||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Occidental Petroleum Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Christopher G. Stavros | ||
Christopher G. Stavros | ||
Senior Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Stephen I. Chazen | ||
Name: | Stephen I. Chazen | |
Title: | President and Chief Executive Officer | |
Date: | August 4, 2015 |
/s/ Christopher G. Stavros | ||
Name: | Christopher G. Stavros | |
Title: | Senior Vice President and Chief Financial Officer | |
Date: | August 4, 2015 |
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