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EXHIBIT 10.9
INDEMNIFICATION AGREEMENT
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This Agreement is made and entered into as of February 12,
1998 between Xxxxxxx X. Xxxxxx ("Indemnitee") and Occidental
Petroleum Corporation, a Delaware corporation (the "Company").
WHEREAS, it is essential to the Company that it retain and
attract as directors and officers the most capable persons
available;
WHEREAS, Indemnitee is an officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the
increased risk of litigation and other claims being asserted
against directors and officers of public companies in today's
environment;
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance
Indemnitee's continued service to the Company in an effective
manner, and in part to provide Indemnitee with specific
contractual assurance that the indemnification protection
provided by the By-Laws of the Company will be available to
Indemnitee (regardless of, among other things, any amendment to
or revocation of such By-Laws or any change in the composition of
the Company's Board of Directors or any acquisition transaction
relating to the Company), and in order to induce Indemnitee to
continue to provide services to the Company as a director or
officer thereof, the Company wishes to provide in this Agreement
for the indemnification of and the advancing of expenses to
Indemnitee to the fullest extent (whether partial or complete)
permitted by law and as set forth in this Agreement, and, to the
extent insurance is maintained, for the continued coverage of
Indemnitee under the Company's directors' and officers' liability
insurance policies (the "D&O Insurance");
NOW, THEREFORE, in consideration of the premises and of
Indemnitee continuing to serve the Company directly or, at its
request, with another enterprise, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Certain Definitions.
(a) Change in Control: shall be deemed to have occurred if
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other
than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a corporation owned
directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of
the Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 25% or more of the total voting power
represented by the Company's then outstanding Voting Securities,
or (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by
the Board of Directors or nomination for election by the
Company's stockholders was approved by a vote of at least two-
thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of
the total voting power represented by the Voting Securities of
the Company or such surviving entity outstanding immediately
after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially
all the Company's assets.
(b) Claim: any threatened, pending or completed action,
suit, proceeding or alternate dispute resolution mechanism or any
inquiry, hearing or investigation, whether conducted by the
Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any such action,
suit or proceeding or alternate dispute resolution mechanism,
whether civil, criminal, administrative, investigative or other.
(c) Expenses: include attorneys' fees and all other
costs, travel expenses, fees of experts, transcript costs, filing
fees, witness fees, telephone charges, postage, delivery service
fees, expenses and obligations of any nature whatsoever paid or
incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in any Claim
relating to any Indemnifiable Event.
(d) Indemnifiable Event: any event or occurrence
related to the fact that Indemnitee is or was a director,
officer, employee, agent or fiduciary of the Company, or is or
was serving at the request of the Company as a director, officer,
employee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise,
or related to anything done or not done by Indemnitee in any such
capacity.
(e) Potential Change in Control: shall be deemed to have
occurred if (i) the Company enters into an agreement or
arrangement, the consummation of which would result in the
occurrence of a Change in Control; (ii) any person (including the
Company) publicly announces an intention to take or to consider
taking actions which if consummated would constitute a Change in
Control; or (iii) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in
Control has occurred.
(f) Reviewing Party: any appropriate person or body
consisting of a member or members of the Company's Board of
Directors or any other person or body appointed by the Board who
is not a party to the particular Claim for which Indemnitee is
seeking indemnification, or Independent Legal Counsel.
(g) Independent Legal Counsel: Independent Legal
Counsel shall refer to an attorney, selected in accordance with
the provisions of Section 3 hereof, who shall not have otherwise
performed services for the Company or Indemnitee within the last
five years (other than in connection with seeking indemnification
under this Agreement). Independent Legal Counsel shall not be
any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to
determine Indemnitee's rights under this Agreement, nor shall
Independent Legal Counsel be any person who has been sanctioned
or censored for ethical violations of applicable standards of
professional conduct.
(h) Voting Securities: any securities of the Company
which vote generally in the election of directors.
2. Basic Indemnification Arrangement.
(a) In the event Indemnitee was, is or becomes a party to
or witness or other participant in, or is threatened to be made a
party to or witness or other participant in, a Claim by reason of
(or arising in part out of) an Indemnifiable Event, the Company
shall indemnify Indemnitee to the fullest extent permitted by law
as soon as practicable but in any event no later than thirty days
after written demand is presented to the Company, against any and
all Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such
Expenses, judgments, fines, penalties or amounts paid in
settlement) of such Claim and any federal, state, local or
foreign taxes (net of the value to Indemnitee of any tax benefits
resulting from tax deductions or otherwise) imposed on the
Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement (including the creation of the
trust referred to in Section 4 hereof). If so requested by
Indemnitee, the Company shall advance (within two business days
of such request) any and all Expenses to Indemnitee (an "Expense
Advance"). Notwithstanding anything in this Agreement or in the
By-Laws of the Company to the contrary and except as provided in
Section 5, prior to a Change in Control Indemnitee shall not be
entitled to indemnification pursuant to this Agreement in
connection with any Claim initiated by Indemnitee against the
Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such
Claim.
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(b) Notwithstanding the foregoing, (i) the obligations of
the Company under Section 2(a) shall be subject to the condition
that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the Independent Legal Counsel
referred to in Section 3 hereof is involved) that Indemnitee
would not be permitted to be indemnified under applicable law,
and (ii) the obligation of the Company to make an Expense Advance
pursuant to Section 2(a) shall be subject to the condition that,
if, when and to the extent that the Reviewing party determines
that Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if
Indemnitee has commenced legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee
should be indemnified under applicable law, any determination
made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial
determination is made with respect thereto (as to which all
rights of appeal therefrom have been exhausted or lapsed).
Indemnitee's obligation to reimburse the Company for Expense
Advances shall be unsecured and no interest shall be charged
thereon. If there has not been a Change in Control, the
Reviewing Party shall be selected by the Board of Directors, and
if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company's
Board of Directors who were directors immediately prior to such
Change in Control), the reviewing Party shall be the Independent
Legal Counsel referred to in Section 3 hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted
to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in any
court in the State of Delaware having subject matter jurisdiction
thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination
by the Reviewing Party or any aspect thereof, or the legal or
factual bases therefor and the Company hereby consents to service
of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.
3. Change in Control. The Company agrees that if there
is a Change in Control of the Company (other than a Change in
Control which has been approved by a majority of the Company's
Board of Directors who were directors immediately prior to such
Change in Control) then Independent Legal Counsel shall be
selected by Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld), and such
Independent Legal Counsel shall determine whether Indemnitee is
entitled to indemnity payments and Expense Advances under this
Agreement or any other agreement or under the Certificate of
Incorporation or By-Laws of the Company now or hereafter in
effect relating to Claims for Indemnifiable Events. Such
Independent Legal Counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and
to what extent the Indemnitee will be permitted to be
indemnified. The Company agrees to pay the reasonable fees of
the Independent legal Counsel and to indemnify fully such
Independent Legal Counsel against any and all expenses (including
attorneys' fees), claims, liabilities and damages arising out of
or relating to this Agreement the engagement of Independent Legal
Counsel pursuant hereto.
4. Establishment of Trust. In the event of a Potential
Change in Control, the Company shall, upon written request by
Indemnitee, create a trust for the benefit of Indemnitee and from
time to time upon written request of Indemnitee shall fund such
trust in an amount (the "Trust Fund Amount") which is the lesser
of (a) the total of all sums sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request
to be incurred in connection with investigating, preparing for
and in connection with investigation, preparing for and defending
any Claim relating to an Indemnifiable Event, plus amounts of any
and all Claims relating to an Indemnifiable Event from time to
time actually paid or claimed, reasonably anticipated or proposed
to be paid, or (b) Five Million Dollars ($5,000,000). The Trust
Fund Amount shall be determined by the Company's Board of
Directors provided that no Change in Control shall have occurred
but shall be determined by the Independent Legal Counsel after
the occurrence of a Change in Control. The Company shall
maintain funds in the trust account in the Trust Fund Amount,
depositing such additional amounts as may be appropriate as a
result of disbursements from the account or increases which, from
time to time, may occur in the Trust Fund Amount. The terms of
the trust shall provide that upon a Change in Control (i) the
trust shall not be revoked or the principal thereof invaded,
without the written consent of the Indemnitee, (ii) the trustee
shall advance, within two
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business days of a request by Indemnitee, any and all Expenses to
Indemnitee (and Indemnitee hereby agrees to reimburse the trust
under the circumstances under which the Indemnitee would be
required to reimburse the Company under Section 2(b) of this
Agreement), (iii), the trust shall continue to be funded by the
Company in accordance with the funding obligation set forth
above, (iv) the trustee shall promptly pay to Indemnitee all
amounts for which Indemnitee shall be entitled to indemnification
pursuant to this Agreement or otherwise, and (v) all unexpended
funds in such trust shall revert to the Company upon a final
determination by the Reviewing Party or a court of competent
jurisdiction, as the case may be, that the Indemnitee has been
fully indemnified under the terms of this Agreement. The trustee
shall be chosen by Indemnitee. Nothing in this Section 4 shall
relieve the Company of any of its obligations under this
Agreement. All income earned on the assets held in the trust
shall be reported as income by the Company for federal, state,
local and foreign tax purposes.
5. Indemnification for Additional Expenses. The
Company shall indemnify Indemnitee against any and all expenses
(including attorneys' fees) and, if requested by Indemnitee,
shall (within two business days of such request) advance such
expenses to Indemnitee, which are incurred by Indemnitee in
connection with any Claim asserted against Indemnitee or which
are incurred in connection with any action brought by Indemnitee
for (i) indemnification or advance payment of expenses by the
Company under this Agreement or any other agreement or under the
Certificate of Incorporation or By-Laws of the Company now or
hereafter in effect relating to Claims for Indemnifiable Events
and/or (ii) recovery under any directors' and officers' liability
insurance policies maintained by the Company, regardless of
whether Indemnitee ultimately determined to be entitled to such
indemnification, advance expense payment or insurance recovery,
as the case may be.
6. Partial Indemnity, Etc. If Indemnitee is entitled
under any provision of this Agreement to indemnification by the
Company for some or a portion of the Expenses, judgments, fines,
penalties and amounts paid in settlement of a Claim but not,
however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled. Moreover, notwithstanding any
other provision of this Agreement, to the extent that Indemnitee
has been successful on the merits or otherwise in defense of any
or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith. In
connection with any determination by the reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to
establish that Indemnitee is not so entitled.
7. No Presumption. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by
judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere or its
equivalent, shall not create a presumption that Indemnitee did
not meet any particular standard of conduct or have any
particular belief or that a court has determined that
indemnification is not permitted by applicable law.
8. Non-exclusivity, Etc. The rights of the Indemnitee
hereunder shall be in addition to any other rights Indemnitee may
have under the Certificate of Incorporation or By-Laws of the
Company or the Delaware General Corporation Law or otherwise. To
the extent that a change in the Delaware General Corporation Law
(whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently
under the Certificate of Incorporation and By-Laws of the Company
and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greatest benefits so
afforded by such change.
9. No Construction as Employment Agreement. Nothing
contained herein shall be construed as giving Indemnitee any
right to be retained in the employ of the Company or any of its
subsidiaries.
10. Liability Insurance. To the extent the Company
maintains an insurance policy or policies providing directors'
and officers' liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms,
to the maximum extent of the coverage provided for any Company
director or officer.
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11. Period of Limitations. No legal action shall be
brought and no cause of action shall be asserted by or in the
right of the Company or any affiliate of the Company against
Indemnitee, Indemnitee's spouse, heirs, executors, administrators
or personal or legal representatives after the expiration of two
years from the date of accrual of such cause of action, and any
claim or cause of action of the Company or its affiliates shall
be extinguished and deemed released unless asserted by the timely
filing of a legal action within such two-year period; provided,
however, that if any shorter period of limitations is otherwise
applicable to any such cause of action such shorter period shall
govern.
12. Amendments, Etc. No supplement, modification or
amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver.
13. Subrogation. In the event of payment under this
Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution of such
documents as may be necessary to enable the Company effectively
to bring suit to enforce such rights.
14. No Duplication of Payments. The Company shall not be
liable under this Agreement to make any payment in connection
with any claim made against Indemnitee to the extent Indemnitee
has otherwise actually received payment (under any insurance
policy, the Certificate of Incorporation or the By-Laws of the
Company or otherwise) of the amounts otherwise Indemnifiable
hereunder.
15. Indemnification Procedures.
(a) Promptly after receipt by Indemnitee of notice of the
commencement of or the threat of commencement of any action, suit
or proceeding, Indemnitee shall notify the Company of the
commencement or threat thereof; but the omission so to notify or
delay in notifying the Company will not relieve the Company from
any liability which it may have to Indemnitee except to the
extent that the Company is actually prejudiced by any such
omission or delay.
(b) The Company shall give prompt notice of the
commencement of such action, suit or proceeding to the insurers
on the D&O Insurance, if any, in accordance with the procedures
set forth in the respective policies in favor of Indemnitee. The
Company shall thereafter take all necessary or desirable action
to cause such insurers to pay, on behalf of Indemnitee, all
amounts payable as a result of such action, suit or proceeding in
accordance with the terms of such policies.
(c) In the event such action, suit or proceeding is other
than by or in the right of the Company, Indemnitee may, at his
option, either control the defense thereof himself, require the
Company to defend him or accept the defense provided under the
D&O Insurance; provided, however, that Indemnitee may not control
the defense himself or require the Company to defend him if such
decision would jeopardize the coverage provided by the D&O
Insurance to the Company and/or the other directors and officers
covered thereby. In the event that Indemnitee requires the
Company to defend him, or in the event that Indemnitee proceeds
under the D&O Insurance but Indemnitee determines that such
insurers under the D&O Insurance are unable or unwilling to
adequately defend, contest and protect Indemnitee against any
such action, suit or proceeding, the Company shall promptly
undertake to defend any such action, suit or proceeding, at the
Company's sole cost and expense, utilizing counsel of
Indemnitee's choice who has been approved by the Company. If
appropriate, the Company shall have the right to participate in
the defense of such action, suit or proceeding.
(d) In the event such action, suit or proceeding is by or
in the right of the Company, Indemnitee, at his option, may
either control the defense thereof himself or accept the
defense provided under the D&O Insurance; provided, however,
that Indemnitee may not control the defense himself if such
decision would jeopardize the coverage provided by the D&O
Insurance, if any, to the Company and/or the other directors
and officers covered thereby.
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(e) In the event the Company shall fail timely to defend,
contest or otherwise protect Indemnitee against any such action,
suit or proceeding which is not by or in the right of the
Company, Indemnitee shall have the right to do so, including
without limitation, the right to make any compromise or
settlement thereof, and to recover from the Company all
attorneys' fees, reimbursements and all amounts paid as a result
thereof.
16. Binding Effect, Etc. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by
the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, spouses, heirs, and
personal and legal representatives. The Company shall require
and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all, or
a substantial part, of the business and/or assets of the Company,
by written agreement in form and substance satisfactory to
Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had
taken place. This agreement shall continue in effect regardless
of whether Indemnitee continues to serve as a director and
officer of the Company or of any other enterprise at the
Company's request.
17. Severability. The provisions of this Agreement
shall be severable. In the event that any of the provisions
hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, the
remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent
possible, the provisions of this Agreement (including, without
limitation, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be
construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
18. Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the
State of Delaware applicable to contracts made and to be
performed in such state without giving effect to the principles
of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have duly executed
and delivered this Agreement as of the day and year first written
above.
XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
OCCIDENTAL PETROLEUM CORPORATION
By: XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
President and Senior Operating
Officer
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