EXHIBIT 10.3
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is entered into as of the 17th day of November,
2000, by and between OCCIDENTAL PETROLEUM CORPORATION, a Delaware Corporation
("COMPANY"), and ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("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 pursuant to an agreement between
EMPLOYEE and COMPANY dated September 11, 1997 (the "Prior Agreement"); and
WHEREAS, COMPANY desires to obtain the benefit of continued services by
EMPLOYEE as President, 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
-1-
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 November 9, 2000 (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
EMPLOYEE shall serve COMPANY as President 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 hereunder
shall be the usual and
-2-
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 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.
-3-
4. Salary. Commencing as of the Effective Date of this Agreement, COMPANY
shall pay EMPLOYEE an annual salary at the minimum rate of $990,000, 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.
-4-
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.
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 accounts, 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
-5-
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 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. To
the extent that assignability for estate planning
-6-
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
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, accounting and financial planning services currently
provided to EMPLOYEE at COMPANY's expense.
(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.
-7-
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.
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 the 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
-8-
benefits as prescribed by applicable COMPANY plans and as prescribed by Section
8(b) hereof. 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 such 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.
-9-
(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
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 equal monthly installments over three
(3) years, or in an undiscounted lump sum at the option of EMPLOYEE.
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
-10-
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 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
-11-
chief executive officer, to ▇▇. ▇▇▇ ▇. ▇▇▇▇▇, and/or 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 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
-12-
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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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.
-13-
(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 or 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 against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
-14-
(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 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
-15-
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 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
-16-
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, settlement, 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 or 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 indeminification. 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
-17-
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 executes this Agreement as of the date
first above written.
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Title: Chairman and CEO
EMPLOYEE:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-18-
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
List of Special Agreements (Exhibit A)
o Indemnification Agreement Between EMPLOYEE and COMPANY or any affiliates.
o Split-Dollar Life Insurance Agreement, dated September 6, 1994.
Other Agreements:
o Restricted Stock Agreement Letters for grants made under the 1977 Executive
Long-Term Stock Purchase Plan and the 1995 Incentive Stock Plan.
o Stock Option Agreement Letters for grants made under the 1987 Stock Option
Plan.
o Performance Stock Agreement Letters for grants made under the 1995
Incentive Stock Plan.
o Performance Stock Option Agreement Letter for award made July 2, 1997 under
the 1995 Incentive Stock Plan.
o Enrollment Agreement under Senior Executive Deferred Compensation Plan.
o Elections pursuant to Occidental Petroleum Corporation Deferred
Compensation Plan.