EXHIBIT 10.7
EMPLOYMENT AGREEMENT
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This Agreement is made as of May 13, 1997, by and between Occidental
Petroleum Corporation, a Delaware corporation (hereinafter referred to as
"Employer"), and Xxxxx X. Xxxxxxxxx (hereinafter referred to as "Employee").
WITNESSETH
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Employer hereby agrees to employ Employee, and Employee agrees to perform
services and to work for Employer, upon the following terms and conditions:
1. Duties - Employee shall serve in the capacity of Executive Vice
President, Occidental Petroleum Corporation, and Chairman and Chief Executive
Officer, Occidental Oil and Gas Corporation, or shall serve in such other
capacity and with such other duties for Employer or any of the subsidiaries of
Employer or any corporation affiliated with Employer (any such subsidiary or
affiliated corporation hereafter to be deemed Employer under this Agreement) as
may be designated by Employer.
In performing his duties, Employee agrees to observe and follow the
policies and procedures established by the Employer, which are subject to change
by the Employer from time to time.
2. Term of Employment - The term of employment shall be at the discretion
of the Employer, but for a minimum of two (2) years, unless terminated prior
thereto in accordance with the provisions of this Agreement, commencing on June
1, 1997, and ending on May 31, 1999.
3. Compensation - In consideration for his services to be performed under
this Agreement, Employee shall receive, in addition to all other benefits
provided in this Agreement, an aggregate salary of six hundred fifty thousand
dollars ($650,000) per year, or such higher amount as Employer may approve from
time to time, payable by Employer in equal semimonthly installments or on such
basis as is generally established for principal executives of Employer from time
to time.
4. Participation in Benefit Programs - During the term of this Agreement,
Employee shall be entitled to participate
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in all benefit programs generally applicable to salaried employees of employer
in force or adopted by Employer from time to time, excluding Employer's
Retirement Plan (PRA), Savings Plan (PSA), Senior Executive Supplemental
Retirement Plan, and Supplemental Retirement Plan. Employee will be eligible to
participate in Employer's Senior Executive Survivor Benefit Plan. Employee will
be required to participate in the tax preparation program conducted by Xxxxxx
Xxxxxxxx LLP.
5. Compensation Plans - Employee shall be: i) eligible to participate in
Employer's Executive Incentive Compensation Plan according to its terms, and
shall receive a bonus under such Plan for the year 1997 of no less than three
hundred twenty-five thousand dollars ($325,000) payable in the first quarter of
1998; (ii) eligible to receive annual stock option grants under Employer's 1995
Incentive Stock Plan and, at such time as this Agreement is executed on behalf
of Employer, Employer's Compensation Committee shall have approved an option
grant to Employee of one hundred thirty thousand (130,000) fully vested shares
under such plan after Employee's execution of this Agreement and the
commencement of services pursuant to this Agreement as full and final
reimbursement to Employee for the loss of options held with his current
employer, (iii) at such
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time as this Agreement is executed on behalf of Employer, Employer's
Compensation Committee shall have approved a grant of restricted ($117,000) and
performance shares ($240,500) to Employee of an aggregate date of award value of
three hundred fifty-seven thousand five hundred dollars ($357,500) in January,
1998, under such Plan, and (iv) a signing bonus of one hundred thousand dollars
($100,000) payable on or before Employee's first day of employment. Employee's
participation in each of the foregoing Plans shall be in accordance with and
subject to all of the terms and conditions of such Plans.
6. Supplemental Retirement Payments - The following supplemental
retirement payment provisions are intended as full and final reimbursement to
Employee for his loss of a pension entitlement with his present employer and in
lieu of participation in Employer's qualified and unqualified retirement and
savings plans. Employee will have the opportunity to earn supplemental lifetime
retirement payments of $33,333 for each year of service completed (pro-rated by
month for partial years) to a maximum annual payment of $100,000. Any payments
earned will commence upon the retirement of Employee and, in the event payments
have commenced and Employee dies, payments will continue
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to his spouse, if then living, for the remainder of her life at 60% of the
amount paid to Employee.
7. Exclusivity of Services - Employee agrees to devote his full-time,
exclusive services to Employer hereunder, except for such time as Employee may
require in connection with his personal investments, which shall be minimal.
8. Vacation - Employee shall be entitled to a total of six (6) weeks of
paid vacation in each contract year. Employee agrees to follow Employer's
relevant policies and procedures for scheduling and taking such vacations.
9. Termination -
a. Cause - Notwithstanding the term of this Agreement, Employer may
discharge Employee and terminate this Agreement for cause, upon written notice,
in the event that Employee (i) shall willfully breach this Agreement, or (ii)
shall refuse to carry out any lawful order of Employer, or (iii) act in a
disloyal manner inimical to Employer. In any such event, Employer shall give
Employee notice of such cause and Employee
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shall have ten (10) days to cure such breach to the reasonable satisfaction of
Employer. Failing such cure, Employee shall thereupon not be entitled to any
further compensation from Employer other than any earned supplemental pension as
defined in Section 6.
b. Incapacity Or Other Inability To Perform - If, during the term of
this Agreement, Employee is prevented from fully performing his material duties
pursuant to this Agreement by reason of illness, disability or other incapacity
(unless incurred as a direct result of his assignments hereunder) or by reason
of any statute, law, ordinance, regulation, order, judgment or decree, Employer
may terminate this Agreement without liability (except as specified in Section
6) by written notice to Employee, but only in the event that such incapacity or
inability to perform shall aggregate not less than one hundred eighty (180) days
during any one contract year of the term of employment. Base salary will be
continued during any period of disability or inability to perform up to and
including one hundred eighty (180) days. Beyond one hundred eighty (180) days,
if Employee is unable to perform his material duties by reason of illness or
disability or other physical or mental incapacity, the Employee
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will be eligible for a disability payment of sixty percent (60%) of base pay
minus one hundred twenty thousand dollars ($120,000) per year through the
two-year minimum term of this Agreement.
c. Without Cause -
(1) Either party may terminate this Agreement without cause at
any time, by giving the other party not less than three (3) months prior written
notice of termination. Employer may terminate the employment of Employee without
cause at any time (including a time during such notice period); and in such
event, Employer shall compensate Employee (in lieu of said notice and continued
employment and, except for benefits specified in Section 6 and Subsection (2) of
this paragraph (c), in complete satisfaction of all of its obligations under
this Agreement) at his then current base salary rate and in the manner provided
in Section 3 for a period after termination equivalent to the lesser of
twenty-four (24) months or the remaining term of this Agreement.
(2) During the period Employee is entitled to compensation
pursuant to Subsection (1) of this paragraph (c),
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Employee shall continue to be eligible to (i) participate in all employee
benefit plans of Employer (except the short and long-term disability plans
unless Employee has already become eligible under such plans) in which he is
participating at the time of the notice, provided, however, Employee will not
accrue any additional supplemental retirement payments pursuant to Section 6,
and (ii) exercise all stock options previously granted to Employee under
Employer's 1995 Incentive Stock Plan, which options are or become exercisable
under the provisions of such Plan as though he were still a full time employee.
During the period, any award(s) to Employee under the 1995 Incentive Stock Plan
shall continue to vest in the same manner and in the same amounts as such
award(s) would have vested if Employee had continued as a full-time employee.
However, this employee benefits participation and stock plan vesting will
immediately cease if Employee accepts a full-time position with another company.
In the event any stock awards have not yet vested at the end of the period of
compensation and if not employed in a full-time position with another company,
then Employee will serve as a consultant at an annual compensation rate of
$75,000 for a period of time not to exceed that necessary to allow all stock
awards to vest. Employee understands and acknowledges that his
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receipt of stock under performance stock awards depends upon the company's
attainment of specified performance objectives and not merely the passage of
time.
10. Initial Relocation - Employee's relocation to Bakersfield, California,
shall be covered by and subject to Employer's existing written relocation policy
to the extent not already reimbursed by Employee's previous employer. This will
include the movement of household goods, plus any additional relocation benefits
as approved by the President and Senior Operating Officer. In the event Employee
relocates from Bakersfield at the request of Employer and has a loss on the
equity of his Bakersfield home, he will be reimbursed for any equity loss up to
a maximum of two hundred thousand dollars ($200,000).
11. Confidential Information - Employee agrees that he will not divulge to
any person, nor use to the detriment of Employer or any of its affiliates or
subsidiaries, nor use in any business competitive with or similar to any
business of Employer or any of its affiliates or subsidiaries, at any time
during employment by Employer or thereafter, any trade secrets or
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confidential information obtained during the course of his employment with
Employer, without first obtaining the written permission of Employer.
Employee agrees that, at the time of leaving the employ of Employer, he
will deliver to Employer and not keep or deliver to anyone else any and all
notes, notebooks, memoranda, documents and, in general, any and all material
relating to Employer's business.
12. Entire Agreement; Modification - This Agreement constitutes the entire
agreement of the parties relating to the subject matter hereof, and supersedes
all previous agreements, arrangements, and understandings, whether express or
implied, relating to the subject matter hereof. No other agreements, oral,
implied or otherwise, regarding the subject matter of this Agreement shall be
deemed to exist or bind either of the parties hereto. This Agreement cannot be
modified except by a writing signed by both parties.
13. Severability; Interpretation - If any provision of this Agreement is
illegal and unenforceable in whole or in part,
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the remainder of this Agreement shall remain enforceable to the extent permitted
by law. All references in this Agreement to Sections are to the sections of this
Agreement.
14. Governing Law - This Agreement shall be construed and enforced in
accordance with the laws of the State of California.
15. Assignment - This Agreement shall be binding upon Employee, his heirs,
and executors and upon Employer, its successors and assigns.
16. Sole Contract - Employee represents and warrants to Employer that he
is not barred by or subject to any contractual or other obligation that would be
violated by the execution or performance of this Agreement.
17. No Waiver - The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver nor
deprive that party of the right to insist upon adherence to that term or any
other term of
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this Agreement. Any waiver or amendment to this Agreement must be in writing.
18. Withholdings - All compensation provided by Employer under this
Agreement is subject to any and all withholding by Employer as required by
applicable law.
19. Arbitration - All disputes between Employee (and his attorneys,
successors and assigns) and Employer (and its affiliates, stockholders,
directors, officers, employees, agents, successors and assigns) relating in any
manner whatsoever to the employment or termination of Employee, including all
contract and tort claims, claims based on applicable federal, state or local law
and claims under this Agreement other than claims under applicable workers'
compensation law and unemployment insurance claims ("Arbitrable Claims"), shall
be submitted to binding arbitration and judgment under the Commercial
Arbitration Rules of the American Arbitration Association for resolution.
Arbitration shall be final and binding upon the parties and shall be the
exclusive remedy for all Arbitrable Claims, except, that Employer may seek
injunctive relief and damages for any breach of Section 11. Should the
arbitrator rule in Employee's favor on
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any dispute, Employer's maximum liability for any breach of this Agreement,
including, but not limited to, termination without cause and/or notice, shall be
no more than twenty-four (24) months compensation plus the benefits specified in
Section 6 and Subsection (2) of Section 9c at the rate set forth above. The
judgment on the award may be entered in any court having jurisdiction. The
parties to any arbitration under this paragraph shall bear the cost of the
arbitration and the fee of the neutral arbitrator in such manner as determined
by the arbitrator.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
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By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
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00000 XXXXXXXX XXXXXXXXX
(LOGO) OCCIDENTAL PETROLEUM CORPORATION XXX XXXXXXX, XXXXXXXXXX 00000
TELEPHONE (000) 000-0000
FACSIMILE (000) 000-0000
XXXXXXX X. XXXXXXX
EXECUTIVE VICE PRESIDENT
HUMAN RESOURCES
February 25, 1999
Xx. Xxxxx X. Xxxxxxxxx
0000 Xxxxx Xxxxxxxx, Xxxx 0000
Xxxxx, XX 00000
Re: Employment Agreement, dated as of May 13, 1997, between
Xxxxx X. Xxxxxxxxx and Occidental Petroleum Corporation
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Dear Xxxx:
The purpose of this letter is to confirm certain matters concerning your
employment by Occidental.
Pursuant to Paragraph 2 of your Employment Agreement, the term of your
employment is at the discretion of Occidental, but, in any event, for a minimum
term of two years, ending on May 31, 1999. In its discretion, Occidental has
decided to extend the term of your Agreement through December 31, 1999. However,
pursuant to Paragraph 9(c)(1) of your Agreement, you are hereby notified that
your Agreement will terminate at the close of business on December 31, 1999.
Pursuant to Paragraph 1 of your Employment Agreement, your employer for the
remaining term of your employment will be OXY USA Inc. in Tulsa, Oklahoma. It is
anticipated that this assignment will require you to relocate to Tulsa. This
relocation will be covered by the equity loss provision of Paragraph 10 of your
Employment Agreement.
Following the termination of your employment on December 31, 1999, you will
be eligible to begin collecting supplemental retirement payments in accordance
with Paragraph 6 of your Employment Agreement. In addition, as provided in
Paragraph 9(c)(2) of your Employment Agreement, you will serve as a consultant
to the company from the date of your termination until any stock awards that
have not vested as of December 31, 1998 vest. For your services as a consultant,
you will receive $5,000 for each day you provide services; but, in any event,
not less than $75,000 per year.
Xx. Xxxxx X. Xxxxxxxxx
February 25, 1999
Page 2
Please indicate your concurrence in the extension of the term of your
Employment Agreement and acknowledge receipt of the termination notice contained
in this letter by signing the enclosed duplicate original of this letter and
returning it to me. Except as provided above all other terms and conditions of
your Employment Agreement remain in full force and effect.
Best regards,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
RWH:hpa
Enclosure
AGREED AND ACKNOWLEDGED
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
Date: March 8, 1999
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