EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is entered into as of the 10th day of February,
2005, by and between OCCIDENTAL PETROLEUM CORPORATION, a Delaware Corporation
("COMPANY"), and XX. XXX X. XXXXX ("EMPLOYEE").
W I T N E S S E T H:
- - - - - - - - - - -
WHEREAS, EMPLOYEE, since June 16, 1983, has served as an officer of
COMPANY, most recently as COMPANY's Chairman and Chief Executive Officer
pursuant to an agreement between EMPLOYEE and COMPANY dated November 17, 2000
(the "Prior Agreement") ; and
WHEREAS, COMPANY desires to obtain the benefit of continued services by
EMPLOYEE as Chairman and Chief Executive 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;
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NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Term. This Agreement shall extend for a period of time (the "Term")
which commenced on the date of the Prior Agreement, November 30, 2000 (the
"Effective Date") and shall expire on the earlier of the date of COMPANY's 2010
stockholder meeting or May 30, 2010, 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 Chairman and
Chief Executive Officer, and EMPLOYEE shall serve COMPANY as Chairman and Chief
Executive Officer and as a member of the Board. EMPLOYEE's principal business:
address shall during such period be at COMPANY's executive offices in Southern
California or with EMPLOYEE's consent in such other place as such offices are
relocated. EMPLOYEE's duties 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, 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.
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4. Salary. COMPANY shall pay EMPLOYEE an annual salary at the minimum
rate of $1,300,000, 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 Executive Compensation and Human Resources Committee
("Compensation Committee"). Salary increases may be paid, at the discretion of
the Compensation Committee, in cash or common stock of the Company, or a
combination thereof.
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. Bonus awards may be paid, at the discretion of the Compensation
Committee, in cash or common stock of the Company, or a combination thereof.
6. Deferred Compensation. In the event, and to the extent, that EMPLOYEE
has in the past, or may in the future, elect to participate in any
Company-sponsored deferred compensation plan, it is intended that 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, and, to the extent such deferred
amounts are taken into account, Employee shall be appropriately compensated.
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 and dental care (including coverage for
EMPLOYEE's spouse and children), disability, retirement, personal savings
account, deferred compensation and other plans or benefits which COMPANY or its
subsidiaries may provide for employees and other senior executives
(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
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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 combined Federal
and state tax rate applicable to individuals in respect of such payments.
8. Supplemental Benefits.
(a) Retirement. COMPANY shall allow 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.
(b) Life Insurance. During the Term and thereafter until the death of
EMPLOYEE, 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. To the extent that
assignability for estate planning purposes is not already provided for in the
underlying plans which relate to the foregoing coverages, all life insurance is
to be assignable at the option of EMPLOYEE.
(c) Post-Retirement Benefits.
(i) During any period following EMPLOYEE's retirement or
termination from employment with COMPANY, EMPLOYEE shall be entitled to medical
and dental benefits of a kind and to an extent no less favorable than the
medical and dental 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 existing perquisites, including without limitation personal tax,
accounting and financial planning services currently provided to EMPLOYEE at
COMPANY's expense.
(iii) Upon retirement, notwithstanding any contrary provision of
the applicable grants, all of EMPLOYEE's unvested stock options will become
fully vested immediately and exercisable. In addition, all of EMPLOYEE's
unvested restricted stock will become fully vested immediately and all of
EMPLOYEE's unvested performance stock will become fully vested immediately and
payable in accordance with the applicable awards as if EMPLOYEE continued to be
employed by COMPANY.
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(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.
9. Perquisites and Vacation. During his employment hereunder, EMPLOYEE
shall continue to be entitled to the minimum perquisites to which he was
entitled in accordance with the practice immediately prior to the Effective
Date.
EMPLOYEE shall continue to be entitled to six (6) weeks paid vacation
during each calendar year of employment, prorated for any period which is less
than one (1) calendar year. Vacation time shall accrue during each calendar
year, and, upon termination of this Agreement for any reason and in addition to
any other rights granted to EMPLOYEE by this Agreement, EMPLOYEE shall be
entitled to be paid an amount based upon his salary at the rate applicable
immediately prior to such termination for any accrued but unused vacation time.
10. Long-Term Incentives.
(a) Restricted Stock. During his employment hereunder, EMPLOYEE shall
be entitled to participate in COMPANY's long term incentive compensation
programs, 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 and/or SAR's 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.
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11. Termination.
(a) Death. This Agreement shall terminate upon EMPLOYEE's death;
provided however that (a) the following provisions of this Agreement shall
remain applicable: Clause 8(b) Life Insurance; Clause 8(d) Spousal Benefits;
and, Section 13 Miscellaneous (except Clause (a)); (b) 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 Section
8(b) hereof; and (c) the rights and benefits to which EMPLOYEE's estate or other
designated beneficiary shall be entitled upon his death, including a pro-rata
portion of the bonus described in Section 5 above for the year of 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 of
employment 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 of employment 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, to the life
insurance benefits enumerated in the first paragraph of Section 8(b) hereof, and
to the rights enumerated under Clause 8(c).
(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 date thereof, to terminate EMPLOYEE's
employment under this Agreement for any reason. In the event of a termination of
employment pursuant to this Section 11(c), EMPLOYEE shall be entitled to three
(3) times EMPLOYEE's highest annual salary and bonus paid to EMPLOYEE at any
time in respect of a single calendar year commencing with the calendar year
January 1, 2000, and such amount shall be payable in an undiscounted lump sum
not later than two and one-half months from the end of the calendar year in
which the termination of employment occurs.
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EMPLOYEE shall also be entitled to the following:
(i) Medical, dental 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;
(iii) Existing perquisites and other rights specified under
Clause 8(c); and
(iv) 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 had retired on the date of termination.
In the event of a termination of employment 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 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 board of directors of any entity
(or individual) that acquires COMPANY or its assets.
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
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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
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, except as provided in subsections 11(c)
and 13(j), 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 against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
(g) Severability and Survival of Certain Provisions. The invalidity
of any term of this Agreement shall not invalidate or otherwise affect any other
term of this Agreement. The following provisions of this Agreement shall survive
any expiration of the Term of the Agreement: Section 7 Employee Benefits;
Section 8 Supplemental Benefits; Section 11 (the benefits described in Section
11(c), clauses (i) through (iv) and Section 13 Miscellaneous (except Clause
(a)).
(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
California applicable to contracts made and to be wholly performed within the
State of California, 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.
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(ii) Subject to Section 13 (j), any legal action or proceeding
with respect to this Agreement shall be brought exclusively in the federal or
state courts of the State of California, 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 based on the grounds of forum non
conveniens, which either may now or hereafter have to the 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 and EMPLOYEE's employment by COMPANY, including claims of
wrongful discharge, discrimination, harassment and any injury to EMPLOYEE's
physical, mental or economic interests shall be settled by binding arbitration
in California, in accordance with the Employment Dispute Resolution rules of the
JAMS/Endispute. The only disputes between EMPLOYEE and COMPANY not covered by
this Agreement are claims for unemployment insurance or workers compensation and
claims for benefits under any employee benefit plan, which benefit claims shall
be resolved pursuant to the claims procedures under the applicable plan. The
demand for arbitration must be made within two years 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 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 California. The arbitrator(s) shall be authorized to
award reasonable attorneys' fees and other arbitration-related costs to the
prevailing party.
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(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
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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
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Executive Vice President
EMPLOYEE
By: /s/ XXX X. XXXXX
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Xx. Xxx X. Xxxxx
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Dr. Xxx Xxxxx
List of Special Agreements (Exhibit A)
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o Indemnification Agreements, dated May 21, 1987 and August 22, 2002, between
EMPLOYEE and COMPANY or any affiliates.
o Split-Dollar Life Insurance Agreement, dated October 31, 1994.
Other Agreements:
o Any and all applicable and current Stock Options, Restricted Stock, and
Performance Stock Option Agreements, Plans and letters.
o Any and all applicable and current Enrollment Agreements under Senior
Executive Deferred Compensation Plans.
o Insurance Agreement under Senior Executive Survivor Benefit Plan, dated
January 1, 1986.
o Elections pursuant to Occidental Petroleum Corporation Deferred
Compensation Plan
EXHIBIT A
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