EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the
11th day of September, 1997, by and between OCCIDENTAL PETROLEUM
CORPORATION, a Delaware Corporation ("COMPANY"), and XX. XXXX X.
XXXXXXXX ("EMPLOYEE").
W I T N E S S E T H:
WHEREAS, EMPLOYEE, since September 1, 1984, has served
as an officer of COMPANY, most recently as COMPANY's President
and Senior Operating Officer pursuant to an agreement between
EMPLOYEE and COMPANY dated September 16, 1993 (the "Prior
Agreement"); and
WHEREAS, COMPANY desires to obtain the benefit of
continued services by EMPLOYEE as President and Senior Operating
Officer, and EMPLOYEE desires to continue to render services to
COMPANY; and
WHEREAS, the Board of Directors of COMPANY (the
"Board") has determined that it is in COMPANY's best interest and
that of its stockholders to recognize the substantial
contribution that EMPLOYEE has made and is expected to continue
to make to COMPANY's business and to retain his services in the
future; and
WHEREAS, COMPANY and EMPLOYEE desire to set forth in
this Agreement the terms and conditions of EMPLOYEE's continued
employment with COMPANY which Agreement represents and
constitutes an amendment and restatement of the Prior Agreement;
NOW, THEREFORE, in consideration of the mutual promises
and covenants herein contained, the parties hereto agree as
follows:
1. Term. This Agreement shall be in effect for a
period of time (the "Term") commencing on September 11, 1997 (the
"Effective Date") and expiring on the fifth anniversary of the
Effective Date, unless earlier terminated in accordance with the
provisions hereof. COMPANY shall employ EMPLOYEE, and EMPLOYEE
shall serve COMPANY, in accordance with the provisions hereof,
throughout the Term, unless such employment is earlier terminated
in accordance with the provisions hereof.
2. Specific Position; Duties and Responsibilities.
Subject to the provisions of this Agreement, COMPANY shall employ
EMPLOYEE as President and Senior Operating Officer, and EMPLOYEE
shall serve COMPANY as President and Senior Operating Officer and
as a member of the Board. EMPLOYEE's principal business address
shall during such period be at COMPANY's principal executive
offices in Southern California or with EMPLOYEE's consent in such
other place as such offices are relocated. EMPLOYEE's duties
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hereunder shall be the usual and customary duties of the offices
in which he shall serve. EMPLOYEE shall have such executive
power and authority as shall reasonably be required to enable him
to discharge his duties in the offices which he may hold.
3. Services and Exclusivity of Services. During the
term of this Agreement, EMPLOYEE, except as otherwise expressly
provided in this Section 3, shall devote his full business time
and energy to the business affairs and interests of COMPANY and
its subsidiaries, and shall use his best efforts and abilities to
promote COMPANY's and its subsidiaries' interests.
EMPLOYEE may serve as a director or in any other
capacity of any business enterprise, including an enterprise
whose activities may involve or relate to the business of
COMPANY, provided that such service is expressly approved by the
Board. EMPLOYEE may make and manage personal business
investments of his choice and serve in any capacity with any
civic, educational or charitable organization, or any
governmental entity or trade association, without seeking or
obtaining approval by the Board, provided such activities and
services do not materially interfere or conflict with the
performance of his duties hereunder.
4. Salary. Commencing as of the Effective Date of
this Agreement, COMPANY shall pay EMPLOYEE an annual salary at
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the minimum rate of $950,000, which shall be payable in
semimonthly installments in conformity with COMPANY's policy
relating to salaried employees. EMPLOYEE's salary shall be
subject to annual increase (and, as part of across the board
reductions for other officers of COMPANY, decrease) at the
reasonable discretion of the Board and its Compensation
Committee.
5. Bonus. EMPLOYEE shall be entitled to an annual
cash bonus in an amount to be determined at the reasonable
discretion of the Board and its Compensation Committee.
6. Deferred Compensation. In advance of the annual
period for which it is earned, EMPLOYEE shall have the right to
defer all or any portion of his salary and all or any portion of
his bonus to a specified date or to a specified event. Any such
deferred compensation shall not be forfeitable and shall bear
interest at a rate no less favorable than the highest rate then
made available to any other senior officer who is provided with
the right to defer compensation under the COMPANY's 1988 Deferred
Compensation Plan.
Any election to defer compensation shall not be taken
into account in the calculation of those of EMPLOYEE's rights and
benefits under this Agreement that are based upon EMPLOYEE's
salary or bonus or the sum thereof.
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7. Employee Benefits. EMPLOYEE shall be entitled
during his employment hereunder, to all rights and benefits for
which he is otherwise eligible under any group life insurance,
medical care (including coverage for EMPLOYEE's spouse and
children), disability, retirement, personal savings account, and
other plans or benefits which COMPANY or its subsidiaries may
provide for him (collectively, "Employee Benefits").
If EMPLOYEE's employment is terminated hereunder, pursuant to
Section 11(b), 11(c), or 11(d) hereof, and EMPLOYEE is entitled
to but is no longer eligible for Employee Benefits because of
such termination, EMPLOYEE shall be entitled to and COMPANY shall
provide, to the extent provided in this Agreement, benefits
substantially equivalent to the Employee Benefits to which
EMPLOYEE was entitled immediately prior to such termination and
shall do so for the period during which he remains entitled to
receive such Employee Benefits as provided in this Agreement.
With respect to the continuation of such benefits, EMPLOYEE shall
also be paid by COMPANY an amount which, after taxes on such
amount, shall reimburse EMPLOYEE for any additional tax
liabilities incurred by EMPLOYEE by reason of the receipt of such
benefits after the termination of, rather than during the term
of, this Agreement, upon the assumption that the amount to which
EMPLOYEE shall be so entitled shall be subject to the maximum
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combined Federal and state tax rate applicable to individuals
in respect of such payments.
8. Supplemental Benefits.
(a) Retirement. COMPANY shall cause EMPLOYEE to
be an eligible participant in COMPANY's qualified and
nonqualified retirement and deferred compensation plans
applicable to employees of COMPANY as of the effective date of
this Agreement.
(b) Life Insurance. During the period prior to
his retirement, COMPANY shall provide EMPLOYEE with life
insurance which, when added to the coverage provided as part of
his Employee Benefits, shall provide coverage at a minimum level
equal to three (3) times his highest career annual salary at any
time during his employment by COMPANY.
During any period following EMPLOYEE's
retirement or termination from employment with COMPANY, COMPANY
shall provide EMPLOYEE with life insurance at a minimum level
equal to two (2) times his rate of highest career annual salary
at any time during his employment by COMPANY.
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(c) Post-Retirement Benefits.
(i) During any period following EMPLOYEE's
retirement or termination from employment with COMPANY, EMPLOYEE
shall be entitled to medical benefits of a kind and to an extent
no less favorable than the medical benefits provided by COMPANY
to EMPLOYEE prior to his retirement or termination.
(ii) During any period following EMPLOYEE's
retirement or termination from employment with COMPANY, EMPLOYEE
shall be entitled to continue to receive personal tax and
financial planning services (currently provided by Xxxxxx
Xxxxxxxx & Co.).
(d) Spousal Benefits. EMPLOYEE's surviving
spouse shall also be entitled to continuation of medical benefits
included within the Employee Benefits for the remainder of her
life.
(e) Legal Fees. COMPANY shall provide to or for
EMPLOYEE all legal fees for services and costs excepting only for
matters of a purely personal nature. COMPANY's obligation
pursuant to this Section 8(e) shall survive the Term of this
Agreement.
9. Perquisites and Vacation. During his employment
hereunder, EMPLOYEE shall continue to be entitled to the minimum
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perquisites to which he was entitled in accordance with the
practice immediately prior to the Effective Date.
10. Long-Term Incentives.
(a) Restricted Stock. During his employment
hereunder, EMPLOYEE shall be entitled to participate in COMPANY's
long term incentive compensation program, with any award to be
related to the performance of COMPANY and determined at the
discretion of the Board or its Compensation Committee.
(b) Stock Options. During his employment
hereunder, EMPLOYEE shall be considered annually for the grant of
stock options under then existing COMPANY stock option plans.
(c) Performance Plans. If, during EMPLOYEE's
employment hereunder, COMPANY adopts any other long-term
incentive plans, EMPLOYEE shall be treated under each of those
plans in a manner no less favorable than the treatment afforded
other key executives of COMPANY.
11. Termination.
(a) Death. This Agreement shall terminate upon
EMPLOYEE's death. EMPLOYEE's estate or other designated
beneficiary, if any, shall be entitled to the rights and benefits
as prescribed by applicable COMPANY plans and as prescribed by
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Section 8(b) hereof. The rights and benefits to which EMPLOYEE's
estate or other designated beneficiary shall be entitled upon his
death shall be payable to such person or persons as EMPLOYEE
shall have directed in writing or, in the absence of a
designation, to his estate.
(b) Disability. In the event that EMPLOYEE shall
be unable, because of illness, injury or similar incapacity
("disability"), to perform his duties hereunder for an aggregate
of six (6) months within any one eighteen (18) month period,
EMPLOYEE's employment hereunder may be terminated by written
notice of termination from COMPANY to EMPLOYEE. In the event of
a termination pursuant to this Section 11(b), EMPLOYEE shall be
entitled to receive payments described in Section 11(c) hereof
offset by the amount of any disability benefits to which EMPLOYEE
shall become entitled under any COMPANY sponsored disability
plan. In the event of a termination pursuant to this Section
11(b), EMPLOYEE shall also be entitled, until his death, to the
medical and welfare benefits included within the Employee
Benefits and to the life insurance benefits enumerated in the
first paragraph of Section 8(b) hereof.
(c) Termination by COMPANY. The Board shall have
the right, at its election to be made in writing and delivered to
EMPLOYEE not less than sixty (60) days prior to the effective
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date thereof, to terminate EMPLOYEE's employment under this
Agreement for any reason. In the event of a termination pursuant
to this Section 11(c) on or prior to September 11, 2000, EMPLOYEE
shall be entitled to three (3) times EMPLOYEE's highest annual
salary and bonus paid to EMPLOYEE at any time in respect of any
single calendar year during the Term of this Agreement, subject
to the last two sentences of this paragraph, such amount payable
in equal monthly installments over three (3) years. In the event
of a termination pursuant to this Section 11(c) after
September 11, 2000, but on or before September 11, 2002, EMPLOYEE
shall be entitled to two (2) times EMPLOYEE's highest annual
salary and bonus paid to EMPLOYEE at any time in respect of any
single calendar year during the Term of this Agreement, subject
to the last two sentences of this paragraph, such amount payable
in equal monthly installments over two (2) years. Should
EMPLOYEE be terminated prior to a date on which any bonus has
been paid subsequent to September 11, 1997, for purposes of this
Section 11(c) only, EMPLOYEE shall be deemed to have been paid a
bonus of $700,000 for the purpose of calculating the amount due
under this Section 11(c). Once a bonus is paid to the EMPLOYEE
in the normal bonus cycle (other than the $700,000 deemed bonus),
that bonus and all subsequent bonuses shall be used for the
required calculations under this Section 11(c).
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EMPLOYEE shall also be entitled to the following:
(i) Medical and welfare benefits included
within the Employee Benefits where permissible under applicable
plans, and the provision of comparable supplemental benefits
where continuation of such benefits is impermissible under
applicable plans;
(ii) The life insurance benefits provided in
Section 8(b) hereof; and
(iii) Full and immediate vesting of
restricted stock, stock options and any other then provided long-
term incentive benefits; provided, EMPLOYEE shall be able to
exercise any outstanding options or stock appreciation rights as
if he were eligible to retire and did retire on the date of
termination.
In the event of a termination pursuant to
this Section 11(c), EMPLOYEE shall have no duty to mitigate
COMPANY's obligations by seeking other employment or by becoming
self-employed, and COMPANY shall have no right to offset against
its obligations any consideration received by EMPLOYEE from any
subsequent employment or subsequent self-employment.
(d) Constructive Termination. EMPLOYEE shall
have the right, at his election to be made in writing and
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delivered to COMPANY within sixty (60) days after such event, to
terminate his employment under this Agreement if a material
breach of this Agreement by COMPANY occurs which COMPANY fails to
cure within fifteen (15) days after receipt of notice of such
breach. In the event of a termination under this Section 11(d),
EMPLOYEE shall be entitled to treat such termination as though it
were a termination pursuant to Section 11(c) hereof.
Notwithstanding the foregoing, COMPANY shall not be in material
breach if EMPLOYEE's duties and responsibilities are reduced
solely by virtue of the fact that COMPANY is (or substantially
all of its assets are) sold to, or combined with, another entity
provided that EMPLOYEE shall continue to have substantially the
same executive duties with respect to COMPANY's business as of
the Effective Date and EMPLOYEE shall report directly to the
chief executive officer, to Xx. Xxx X. Xxxxx, and/or to the board
of directors of any entity (or individual) that acquires COMPANY
or its assets.
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12. Change in Control.
COMPANY shall hold EMPLOYEE harmless against and
shall insulate EMPLOYEE from all of the effects of any excise or
other tax payable by EMPLOYEE under or as a result of
Sections 280G and 4999 of the Internal Revenue Code of 1986 or
comparable state law, or any successor thereto, by reason of a
change in control. COMPANY's obligation in this regard shall
include a gross-up obligation, to hold EMPLOYEE harmless from and
to insulate EMPLOYEE from all of the effects of any income and
excise tax liability.
13. Miscellaneous.
(a) Working Facilities. During his employment
hereunder, EMPLOYEE shall continue to be furnished with office
facilities and services at least substantially equivalent to
those which have been provided him immediately prior to the
Effective Date.
(b) Waiver of Breach. If COMPANY breaches any
provision of this Agreement, EMPLOYEE shall not be deemed under
any circumstances to have waived any of his rights attributable
to such breach unless he has specifically consented to such
waiver in writing. Any such waiver by EMPLOYEE of a breach of
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any provision of this Agreement by COMPANY shall not operate or
be construed as a waiver of any subsequent breach by COMPANY.
If EMPLOYEE breaches any provision of this
Agreement, COMPANY shall not be deemed under any circumstances to
have waived any of its rights attributable to such breach unless
it has specifically consented to such waiver in writing. Any
such waiver by COMPANY of a breach of any provision of this
Agreement by EMPLOYEE shall not operate or be construed as a
waiver of any subsequent breach by EMPLOYEE.
(c) Notices. Any notice required or permitted to
be given under this Agreement shall be sufficient if in writing
and if sent by registered or certified mail (return receipt
requested) to the following addresses: If to COMPANY, at 00000
Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
General Counsel, with a copy to the Chairman of the Compensation
Committee of the Board at the same address, or to such other
address as COMPANY, may from time to time in writing designate,
and if to EMPLOYEE, at such address as he may from time to time
in writing designate (or his business address of record in the
absence of such designation). All notices shall be deemed to
have been given two (2) business days after they have been
deposited in the United States mail.
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(d) Amendments. Any provision contained in this
Agreement or in any renewal or extension hereof upon the same or
different terms and conditions may be amended at any time or from
time to time by mutual agreement of EMPLOYEE and COMPANY without
the consent of any other person named or described in this
Agreement as a beneficiary of any of its provisions.
(e) Assignment. During the Term, COMPANY shall
not merge, consolidate or otherwise combine with any other entity
unless COMPANY shall be the surviving corporation or the
surviving corporation shall have assumed all COMPANY's
obligations under this Agreement. The obligations of COMPANY
under this Agreement shall be binding upon the surviving
corporation upon the merger, consolidation or combination of
COMPANY with such corporation. This Agreement shall inure to the
benefit of COMPANY and its successors and assigns and of EMPLOYEE
and his heirs and personal representatives.
(f) Entire Agreement. This Agreement constitutes
the entire agreement between COMPANY and EMPLOYEE with respect to
the subject matter hereof, amends and supersedes the Prior
Agreement and specifically does not affect those certain
agreements identified on Exhibit A hereto, and may not be changed
orally but only by an instrument in writing signed by the party
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against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
(g) Severability. The invalidity of any term of
this Agreement shall not invalidate or otherwise affect any other
term of this Agreement.
(h) Applicable Law. (i) Subject to Section
13(j), this agreement shall be governed by and construed under
and in accordance with the laws of the State of Delaware
applicable to contracts made and to be wholly performed within
the State of Delaware, without regard to principles of conflicts
of laws; and the laws of that state shall govern all of the
rights, remedies, liabilities, powers and duties of the parties
under this Agreement and of any arbitrator or arbitrators to whom
any matter hereunder may be submitted for resolution by the
parties hereto, as contemplated by and pursuant to Title 6,
Section 2708 of the Delaware Code.
(ii) Subject to Section 13(j), any legal action of
proceeding with respect to this Agreement shall be brought
exclusively in the federal or state courts of the State of
Delaware, and by execution and delivery of this Agreement,
EMPLOYEE and COMPANY irrevocably consent to the jurisdiction of
those courts. EMPLOYEE and COMPANY irrevocably waive any
objection, including any objection to the laying of venue or
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based on the grounds of forum non conveniens,
which either may now or hereafter have to bringing of any action
or proceeding in such jurisdiction in respect of this Agreement
or any transaction related hereto. EMPLOYEE and COMPANY
acknowledge and agree that any service of legal process by mail
in the manner provided for notices under this Agreement
constitutes proper legal service of process under applicable law
in any action or proceeding under or in respect of this
Agreement.
(i) Administration. The Board, or such committee
of the Board as it may by resolution specifically designate,
shall administer this Agreement on behalf of COMPANY and take any
action and exercise any discretion required or permitted to be
taken or exercised by COMPANY pursuant to the provisions hereof.
(j) Arbitration. Any controversy or claim
arising out of or relating to this Agreement shall be settled by
binding arbitration in Delaware, in accordance with the
commercial arbitration rules of the American Arbitration
Association. The demand for arbitration must be made within one
year after the controversy or claim arises; failure to do so
shall constitute an absolute bar to the institution of any such
proceeding and shall forever constitute a waiver respecting any
such controversy or claim. Any award pursuant to such
arbitration shall be included in a written decision which shall
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state the legal and factual reasons upon which the
award was based, including all the elements involved in the
calculation of any award of damages. Any such award shall be
deemed final and binding and may be entered and enforced in any
state or federal court of competent jurisdiction. The
arbitrator(s) shall interpret the Agreement in accordance with
the laws of Delaware. The arbitrator(s) shall be authorized to
award reasonable attorneys' fees and other arbitration-related
costs to the prevailing party.
(k) Indemnity and Insurance. In any situation
where under applicable law the COMPANY has the power to indemnify
EMPLOYEE in respect of any judgments, fines, settlements, loss,
cost or expense (including attorneys' fees) of any nature related
to or arising out of EMPLOYEE's activities as an agent, employee,
officer or director of COMPANY or in any other capacity on behalf
of or at the request of COMPANY, COMPANY agrees that it will
indemnify EMPLOYEE to the fullest extent permitted by applicable
law, including but not limited to making such findings and
determinations and taking any and all such actions as COMPANY
may, under applicable law, be permitted to have the discretion to
take so as to effectuate such indemnification. COMPANY further
agrees to furnish EMPLOYEE for the remainder of his life with
Directors' and Officers' liability insurance insuring EMPLOYEE,
against occurrences which occur during the term of this
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Agreement, such insurance to have policy limits aggregating not
less than $100 million, and otherwise to be in substantially the
same form and to contain substantially the same terms, conditions
and exceptions as the liability insurance policies provided for
officers and directors of COMPANY in force from time to time.
COMPANY's obligation pursuant to this Section 13(k) shall survive
the Term of this Agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
OCCIDENTAL PETROLEUM CORPORATION
By: Xxxxxxx X. Xxxxxxx
--------------------------------
Title:
EMPLOYEE:
Xxxx X. Xxxxxxxx
--------------------------------
Xx. Xxxx X. Xxxxxxxx
LT972510.165/13+
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Xx. Xxxx X. Xxxxxxxx
List of Special Agreements (Exhibit A)
* Indemnification Agreement between EMPLOYEE and COMPANY
or any affiliates.
* Split-Dollar Life Insurance Agreement, dated
September 6, 1994.
Other Agreements:
* Restricted Stock Agreement Letters for grants made
under the 1977 Executive Long-Term Stock Purchase Plan
and the 1995 Incentive Stock Plan.
* Stock Option Agreement Letters for grants made under
the 1987 Stock Option Plan.
* Performance Stock Agreement Letters for grants made
under the 1995 Incentive Stock Plan.
* Performance Stock Option Agreement letter for award
made July 2, 1997 under the 1995 Incentive Stock Plan.
* Enrollment Agreement under Senior Executive Deferred
Compensation Plan.
* Insurance Agreement under Senior Executive Survivor
Benefit Plan.
Exhibit A
