EXHIBIT 10.5
AGREEMENT
This Employment Agreement is made as of the 13th day of January, 2005 by
and between Occidental Petroleum Corporation, a Delaware Corporation
(hereinafter referred to as "Employer", and Stephen I. Chazen (hereinafter
referred to as "Employee").
WITNESSETH
WHEREAS, Employee, since May 1, 1994, has served as an officer of Company,
most recently pursuant to an agreement between Employee and Company dated
November 17, 2000 (the "Prior Agreement"), and is currently the Company's Senior
Executive Vice President and Chief Financial Officer, and also head of Corporate
Development; and
WHEREAS, the parties now desire to provide for a continuation of Employee's
employment by Employer, and to specify the rights and obligations of the parties
during such continued employment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein, Employer and Employee hereby agree to continue such employment upon the
following terms and conditions:
1. Duties. Employee shall perform the duties of Senior Executive Vice
President and Chief Financial Officer, and also head of Corporate Development or
shall serve in such other capacity and with such other duties for Employer as
the chief executive officer of Employer may direct. In performing such duties,
Employee will comply with Employer's Code of Business Conduct and Corporate
Policies, as the same may be amended from time to time.
2. Term of Employment. The term of employment shall be for a period of
five (5) years, commencing on January 13, 2005, and ending midnight January 12,
2010, unless terminated prior thereto in accordance with the provisions of this
Agreement, or unless extended by mutual agreement in accordance with Paragraph 8
hereof.
3. Compensation. For the services to be performed hereunder, Employee
shall be compensated by Employer at the rate of not less than seven hundred
twenty thousand dollars ($720,000) per annum, payable semi-monthly. The minimum
salary hereunder shall be automatically adjusted to the level of any increase in
annual compensation as the Employer may determine during the term of this
Agreement. Salary increases may be paid, at the discretion of the Compensation
Committee, in cash or common stock (or restricted stock units) of the Company,
or a combination thereof.
Participation in Benefit and Executive Programs. Employee shall be eligible to
participate in all benefit programs and under the same terms and conditions as
are generally applicable to salaried employees and senior executives of Employer
during the term of this Agreement. Employee will be entitled to one membership
in a private club of his choosing paid for by Employer, provided that the Chief
Executive Officer of Employer has approved the selection of the specific club.
Employee shall also be eligible to participate in (i) Employer's Executive
Incentive Compensation Plan and (ii) Employer's 2001 Incentive Compensation Plan
and any successor or replacement plans, as long as Employer continues such plans
during the term of this Agreement, and to receive awards or grants under such
Plans at Employer's sole discretion. Employee shall be entitled to a total of
six (6) weeks of paid vacation in each contract year. Bonus awards may be paid,
at the discretion of the Compensation Committee, in cash or common stock (or
restricted stock units) of the Company, or a combination thereof.
During any period following Employee's retirement or termination from
employment with Company, Employee and his spouse shall be eligible to
participate in the Occidental Petroleum Corporation Medical Care Plan.
5. 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.
6. Termination.
(a) Voluntary Resignation. Employee may voluntarily resign, and such
resignation shall not be deemed to be a breach of this Agreement, so long as
Employer is provided at least sixty (60) days' notice of any resignation.
(b) Cause. Notwithstanding the term of this Agreement, Employer may
discharge Employee and terminate this Agreement without severance or other pay
upon thirty (30) days' written notice or pay in lieu of such notice for material
cause, including without limitation, (i) failure to satisfactorily perform his
duties or responsibilities hereunder or negligence in complying with Employer's
legal obligations, (ii) refusal to carry out any lawful order of Employer, (iii)
breach of any legal duty to Employer, (iv) breach of Paragraph 5 of the
Agreement, or (v) conduct constituting moral turpitude or conviction of a crime
which may diminish Employee's ability to effectively act on the Employer's
behalf or with or on behalf of others, or (vi) death. In the case of events (i)
through (v) above, Employer shall give Employee notice of such cause and
Employee shall have thirty (30) days to cure such breach. In the event of death,
Employer will provide the estate of the deceased Employee a payment in addition
to any other payment due and payable, equivalent to a pro-rata bonus for the
year of death.
(c) Incapacity. If, during the term of this Agreement, Employee is
incapacitated from performing the essential functions of his job pursuant to
this Agreement by reason of illness, injury, or disability, Employer may
terminate this Agreement by at least one week's written notice to Employee, but
only in the event that
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such conditions shall aggregate not less than one-hundred eighty (180) days
during any twelve (12) month period. In the event Employee shall (i) continue to
be incapacitated subsequent to termination for incapacity pursuant to this
Paragraph 6(c), and (ii) be a participant in and shall qualify for benefits
under Employer's Long Term Disability Plan ("LTD"), then Employer will continue
to compensate Employee, for so long as Employee remains eligible to receive LTD
benefits, in an amount equal to the difference between sixty percent (60%) of
Employer's annual compensation as set forth in Paragraph 3 hereof and the
maximum annual benefit under the LTD, payable monthly on a pro rated basis.
(d) Without Cause. Employer may at any time terminate the employment
of Employee without cause or designate a termination for cause as a termination
without cause, and in such event Employer shall, in lieu of continued
employment, compensate Employee in an amount equal to two (2) times the sum of
Employee's highest annual base salary and annual cash bonus target, such amount
payable in equal monthly installments over two (2) years (the "Compensation
Period"). In the event that Employee dies during the Compensation Period, any
remaining payments due will be made to Employee's estate.
During the Compensation Period, Employee shall continue to be
eligible to (i) participate in all employee benefit plans of Employer, in which
he is participating at the time of the notice and so long as such plans are
available to salaried employees and senior executives, and (ii) exercise all
stock options and SARs previously granted to Employee under Employer's equity
based plans, which options or SARs are or become exercisable under the
provisions of such Plans.
Following the Compensation Period, Employee's employment shall
continue (as a consultant to Employer) for an additional period until January
12, 2010 (the "Consultancy Period"), during which additional period Employee
will receive a salary at the annual rate of fifty thousand dollars ($50,000)
payable semi-monthly. During both the Compensation Period and the Consultancy
Period, any award(s) to Employee pursuant to Employer's equity based plans,
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.
7. 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 or process of manufacture competitive with
or similar to any business or process of manufacture of Employer or any of its
affiliates or subsidiaries, at any time during employment by Employer or
thereafter, any trade secrets or 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
credit cards, notes, notebooks, memoranda, documents and, in general, any and
all material relating to Employer's business, including copies therefor, whether
in paper or electronic format.
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8. Modification. This Agreement, and the related indemnification
agreement between Employee and Employer, contain all the terms and conditions
agreed upon by the parties hereto, and no other agreements, oral 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
subsequent writing signed by both parties.
9. Prior Agreement. This Agreement supersedes and replaces any and all
previous employment agreements between the parties.
10. Severability. If any provision of this Agreement is illegal and
unenforceable in whole or in part, the remainder of this Agreement shall remain
enforceable to the extent permitted by law.
11. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of California. In the event that any
ambiguity or questions of intent or interpretation arise, no presumption or
binder of proof shall arise favoring or disfavoring the Employer by virtue of
authorship of this Agreement and the terms and provisions of this Agreement
shall be given their meaning under law.
12. Assignment. This Agreement shall be binding upon Employee, his heirs,
executors and assigns and upon Employer, its successors and assigns.
13. Arbitration. In consideration for entering into this Agreement and for
the position, compensation, benefits and other promises provided hereunder, the
Employee and Employer agree to be bound by the arbitration provisions attached
hereto as Attachment 1 and incorporated herein by this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ RAY R. IRANI
------------------------------------
Dr. Ray R. Irani
Chairman of the Board and Chief
Executive Officer
EMPLOYEE:
/s/ STEPHEN I. CHAZEN
----------------------------------------
Stephen I. Chazen
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ATTACHMENT 1
ARBITRATION PROVISIONS ("Provisions")
Incorporated by Reference into and Made a Part of the
Agreement, dated January 13, 2005 (the "Agreement"), between
Occidental Petroleum Corporation (the "Employer")
and Stephen I. Chazen (the "Employee")
In recognition of the fact that differences may arise between the Employer
and the Employee arising out of or relating to certain aspects of the Employee's
employment with the Employer or the termination of that employment, and in
recognition of the fact that resolution of any differences in the courts is
rarely timely or cost-effective for either party, the Employer and Employee have
agreed to the incorporation of the Provisions into the Agreement in order to
establish and gain the benefits of a speedy, impartial and cost-effective
dispute resolution procedure. By so doing, the Employer and the Employee
mutually agree to arbitrate Claims (as defined below) and each knowingly and
voluntarily waive their rights before a jury. Each party's promise to resolve
Claims (as defined below) by arbitration in accordance with these Provisions is
consideration for the other party's like promise, in addition to any other
consideration.
1. Claims
1.1 Except as provided in paragraph 1.2 below, "Claims" (collectively
called "Claim" or "Claims" in these Provisions) means all claims or
controversies between the Employer and Employee or between the Employee and
others arising out of, or relating to or concerning the Employee's employment
with the Employer or termination thereof for which a state or federal court
otherwise would be authorized to grant relief, including, but not limited to,
claims based on any purported breach of contract, tort, state or federal statute
or ordinance, common law, constitution or public policy, claims for wages or
other compensation, or of discrimination, or violation of public policy of any
type. Claims expressly include the Employee's Claims against the Employer, and
any subsidiary and related or affiliated entity, successor or assign, and any of
their officers, directors, employees, managers, representatives, attorneys or
agents, and Claims against others arising out of, relating to or concerning the
Employee's employment with the Employer or termination thereof.
1.2 These Provisions do not apply to or cover: claims for workers'
compensation benefits, claims for unemployment compensation benefits, or claims
for which the National Labor Relations Board has exclusive jurisdiction; claims
by the Employer for injunctive and/or other equitable relief for intellectual
property, unfair competition and/or the use and/or unauthorized disclosure of
trade secrets or confidential information; and claims based upon an employee
pension or benefit plan the terms of which contain an arbitration or other non
judicial resolution procedure, in which case the provisions of such plan shall
apply. Employee shall further retain the right to seek injunctive and/or other
equitable relief expressly made available by a statute which forms the basis of
a Claim which is subject to arbitration under these Provisions. Where one or
more of the included Claims in a dispute are covered under these Provisions and
one or more of the included Claims in the dispute are not covered under these
Provisions, such covered and non-covered claims shall be separated and shall be
heard separately in the appropriate forum for each claim.
2. Agreement to Arbitrate All Claims
2.1 Except for claims excluded from these Provisions by paragraph 1.2
above and as otherwise provided in paragraph 1.2 and 4.1, the Employer and the
Employee hereby agree to the resolution by exclusive, final and binding
arbitration of all Claims.
2.2 The parties further agree that any issue or dispute concerning the
formation, applicability, interpretation, or enforceability of these Provisions,
including any claim or contention that all or any part of these Provisions is
void or voidable, shall be subject to arbitration as provided herein. The
arbitrator, and not any federal, state or local court or agency, shall have
authority to decide any such issue or dispute.
3. Governing Law
3.1 Except as modified by these Provisions, the arbitration shall be
conducted pursuant to the rules set forth in the California Arbitration Act,
California Civil Code or Procedure Section 1281, et. seq.
3.2 The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the State of California, or federal law, or both, as
applicable to the Claims asserted.
4. Binding Effect
4.1 The arbitration Award (see Section 10, herein) shall be final and
binding on the parties except that both parties shall have the right to appeal
to the appropriate court any errors of law in the decision rendered by the
Arbitrator.
4.2 The Award may be entered as a judgment in any court of competent
jurisdiction and shall serve as a bar to any court action for any Claim or
allegation which was, or could have been, raised in Arbitration.
4.3 For Claims covered by these Provisions, Arbitration is the exclusive
remedy, except as provided by paragraph 1.2. The parties shall be precluded from
bringing or raising in court or before any other forum any dispute which could
have been brought or raised pursuant to Arbitration.
4.4 Nothing in these Provisions shall prevent a party from pursuing any
legal right to bring an action to vacate or enforce an Award or to compel
arbitration pursuant to applicable California law.
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5. Initiating Arbitration
To initiate the arbitration process, the aggrieved party must provide the
other party or parties with: a written request to arbitrate any covered Claims
which states the Claim or Claims for which arbitration is sought. The written
request to arbitrate must be received within the limitations periods applicable
under the law to such Claims.
6. Selection of the Arbitrator
6.1 All Claims shall be decided by a single neutral decision-maker, called
the "Arbitrator."
6.2 To be qualified to serve, the Arbitrator must be an attorney in good
standing with at least seven years experience in employment law or a retired
judge and be available to hear the matter within sixty (60) days of selection
and on consecutive days.
6.3 Within fifteen calendar days after receipt of the written request to
arbitrate, the parties will attempt to agree on the selection of a qualified
Arbitrator pursuant to paragraph 6.2 above. If the parties fail to agree on the
selection of an Arbitrator within that fifteen calendar day period, the Employer
will designate an alternate dispute resolution service (by way of example,
American Arbitration Association, National Arbitration Forum, Judicial
Arbitration and Mediation Services/Endispute) which has the capacity of
providing the parties with a list of potential qualified arbitrators. The
parties shall request that designated alternate dispute resolution service to
provide them with a list of nine persons who meet the requirements of paragraph
6.2 above. Each party shall rate the nine names by giving the most preferred
arbitrator the number nine and using descending successive numbers to rate the
remaining choices in descending order of that party's preference and returning
the list to the alternate dispute resolution service for calculation. The
arbitrator candidate with the highest combined rating will be the Arbitrator.
The functions of the alternate dispute resolution service shall be strictly
limited to providing the list of arbitrator candidates and tallying the
respective parties' ratings of the candidates in accordance with this Section 6
and no rules of that service shall otherwise apply.
7. Arbitration Procedures:
7.1 All parties may be represented by counsel throughout the arbitration
process, including without limitation, at the arbitration hearing.
7.2 The Arbitrator shall afford each party a full and fair opportunity to
present relevant and material proof, to call and cross-examine witnesses, and to
present its argument.
7.3 The Arbitrator shall not be bound by any formal rules of evidence with
the exception of applicable law regarding the attorney-client privilege and work
product doctrine, and any applicable state or federal law regarding
confidentiality of documents and other information (including, without
limitation, pursuant to rights of privacy).
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7.4 The Arbitrator shall decide the relevance of any evidence offered, and
the Arbitrator's decision on any question of evidence or argument shall be final
and binding.
7.5 The Arbitrator may receive and consider the evidence of witnesses by
affidavit and shall give it such weight as the Arbitrator deems appropriate
after consideration of any objection made to its admission.
7.6 Either party, at its expense, may arrange and pay for the cost of a
court reporter to provide a stenographic record of the proceedings. The other
party may obtain a copy of the recording by paying the reporter's normal fee for
such copy. If both parties agree to utilize the services of a court reporter,
the parties shall share the expense equally and shall be billed and responsible
for payment individually.
7.7 Either party shall have the right to file an pre- or post-hearing
brief. The time for filing such briefs shall be set by the Arbitrator.
7.8 The Arbitrator has authority to entertain a written or oral motion to
dismiss and motion for summary judgment, dispositive of all or part of any
Claim, to which the Arbitrator shall apply the standards governing such motions
under the Federal Rules of Civil Procedure.
8. Discovery
8.1 Discovery shall be governed by this paragraph 8, notwithstanding Code
of Civil Procedure Section 1283.05 to the contrary.
8.2 Discovery shall be conducted in the most expeditious and
cost-effective manner possible, and shall be limited to that which is relevant
and for which the party seeking it has substantial, demonstrable need.
8.3 All parties shall be entitled to receive, reasonably prior to the
hearing, copies of relevant documents which are requested in writing, clearly
described and governed by paragraph 8.2 above, and sought with reasonable
advance notice given the nature of the requests. Upon request, Employee shall
also be entitled to a true copy of his or her personnel file kept in the
ordinary course of business and pursuant to the Employer policy. Any other
requests for documents shall be made by subpoena as provided for in Section 9
herein.
8.4 Except as mutually agreed by the parties, all parties shall be
entitled to submit no more than twenty interrogatories (including subparts) and
twenty requests for admission (including subparts), on each of the other
parties, which are requested in writing, clearly described and governed by
paragraph 8.2 above, and sought with reasonable advance notice given the nature
of the requests.
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8.5 Upon reasonable request and scheduling, each party shall be entitled
to take three depositions in total of relevant parties, representative of the
opposing party, or third parties, of up to two days duration each.
8.6 Physical and/or mental examinations may be conducted in accordance
with the standards established by the Federal Rules of Civil Procedure.
8.7 At a mutually agreeable date, the parties will exchange lists of
experts who will testify at the arbitration. Each party may depose the other
party's experts and obtain documents they reviewed and relied upon and these
depositions will not be charged against the party's limit of three depositions.
8.8 Any disputes relative to discovery or requests for discovery other
than specifically provided for herein, shall be presented to the Arbitrator who
shall make final and binding decisions in accordance with paragraphs 8.1 and 8.2
herein.
9. Subpoenas
9.1 Subject to formal request and a determination of both need and
relevance by the Arbitrator in accordance with paragraphs 8.1 and 8.2 above,
each party may issue a subpoena for production of documents or persons (other
than those provided for in Sections 8.3, 8.5 and 8.7) relevant to the procedure.
The Arbitrator's decision regarding relevance and the need for subpoenas shall
be final and binding.
9.2 The Arbitrator is empowered to subpoena witnesses or documents to the
extent permitted in a judicial proceeding, upon his or her own initiative or at
the request of a party.
9.3 The party requesting the production of any witness or proof shall bear
the costs of such production.
10. The Award
10.1 The Arbitrator shall render his or her decision and award
(collectively the "Award") based solely on the evidence and authorities
presented, the applicable policies of the Employer, any applicable written
employment agreement, the applicable law argued by the parties, and these
Provisions as interpreted by the Arbitrator.
10.2 The Award shall be made promptly by the Arbitrator, and unless
otherwise agreed by the parties, not later than sixty (60) days from the closing
of the hearing, or the date post-hearing briefs are filed, whichever is later.
10.3 The Award shall be in writing and signed and dated by the Arbitrator.
The Award shall decide all issues submitted, shall contain express findings of
fact and law (including findings on each issue of fact and law raised by a
party), and provide the reasons supporting the decision including applicable
law. The Arbitrator shall give signed and duplicate original copies of the Award
to all parties at the same time.
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11. Damages and Relief
11.1 The Arbitrator shall have the same authority to award remedies and
damages as provided to a judge and/or jury under applicable state or federal
laws, where the aggrieved party has met his or her burden of proof
11.2 Both parties have a duty to mitigate their damages by all reasonable
means. The Arbitrator shall take a party's failure to mitigate into account in
granting relief in accordance with applicable state and federal law.
11.3 Arbitration of damages or other remedies may be conducted in a
bifurcated proceeding.
12. Fees and Expenses
12.1 All parties shall share equally the fees of the Arbitrator. Each party
will deposit funds or post other appropriate security for its share of the
Arbitrator's fee, in an amount and manner determined by the Arbitrator, at least
ten (10) days before the first day of hearing. Additionally, each party shall
pay for its own expenses associated with the arbitration process and attorneys'
fees, if any. If any party prevails on a statutory claim which entitles the
prevailing party to attorneys' fees, or if there is a written agreement
providing for fees, the Arbitrator may award reasonable fees to the prevailing
party in accordance with such statute or agreement.
12.2 The Arbitrator may additionally award either party its reasonable
attorneys' fees and costs, including reasonable expenses associated with
production of witnesses or proof, upon a finding that the other party (a)
engaged in unreasonable delay, or (b) failed to comply with the Arbitrator's
discovery order.
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