Item 1.01. Entry into a Material Definitive Agreement
On March 25, 2020, Occidental Petroleum Corporation (“Occidental” or the “Company”) entered into a Director Appointment and Nomination Agreement (the “Agreement”) with Carl
C. Icahn, Andrew Langham, Nicholas Graziano, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Enterprises G.P. Inc., Icahn Enterprises Holdings L.P., IPH GP LLC, Icahn
Capital LP, Icahn Onshore LP, Icahn Offshore LP and Beckton Corp. (collectively, the “Icahn Group”) and, solely with respect to the provisions applicable to the New
Independent Director, Margarita Paláu-Hernández (the “New Independent Director”), pursuant to which Occidental (i) increased the size of the board of directors of Occidental
(the “Board”) to fifteen directors and (ii) appointed Nicholas Graziano and Andrew N. Langham (collectively, the “Icahn Designees”) and the New Independent Director to the Board to fill the resulting vacancies, with such appointments effective immediately. Existing directors Spencer Abraham, Eugene L. Batchelder, Margaret M. Foran and
Elisse B. Walter will not stand for re-election at the 2020 annual meeting of stockholders of Occidental (the “2020 Annual Meeting”) and accordingly will retire from the
Board at the 2020 Annual Meeting. In addition, Occidental has agreed to include each of the Icahn Designees and the New Independent Director as part of Occidental’s slate of nominees for election to the Board at the 2020 Annual Meeting, which will
consist of Stephen Chazen, each of the Icahn Designees, the New Independent Director and the following existing Occidental directors: Andrew F. Gould, Carlos M. Gutierrez, Vicki A. Hollub, William R. Klesse, Jack B. Moore, Avedick B. Poladian and
Robert M. Shearer, in each case subject to the applicable rights of the Icahn Group and Occidental to designate replacements in certain circumstances as set forth in the Agreement.
From and after the date of the Agreement, so long as an Icahn Designee is a member of the Board, without the approval of the Icahn Designees who are then members of the
Board, the Board will not increase the size of the Board above (i) prior to opening of the polls at the 2020 Annual Meeting, fifteen (15) directors and (ii) from and after the opening of the polls at the 2020 Annual Meeting, eleven (11) directors, in
each case with each such director having one vote on all matters. In addition, the Icahn Group will be entitled, in the event any Icahn Designee or the New Independent Director resigns or for any reason fails to serve or is not serving as a director
(subject to exceptions set forth in the Agreement, including as a result of such director not being nominated by the Company to stand for election at an annual meeting subsequent to the 2020 Annual Meeting or the termination of the Icahn Group’s
designation rights with respect to such director in accordance with the Agreement), to designate a replacement for appointment to the Board on the terms set forth in the Agreement.
Until such time as one or more of the Icahn Designees are required to tender their resignations from the Board under the Agreement, the Icahn Designees then on the Board
must approve (such approval not to be unreasonably withheld, delayed or conditioned) any new Chairman, except that in no event will the Icahn Designees condition any such approval on any of the following individuals being named as the new Chairman:
(i) any Icahn Designee, (ii) the New Independent Director or (iii) certain individuals with material relationships with the Icahn Group or any controlled affiliate thereof.
On the date of the Agreement, (i) Mr. Graziano was appointed to an oversight committee (the “Oversight
Committee”) of the Board, to be formed as promptly as practicable following the date of the Agreement, and the Audit Committee of the Board, (ii) Mr. Langham was appointed to the Oversight Committee and the Corporate Governance and
Nominating Committee and (iii) Ms. Paláu-Hernández was appointed to the Executive Compensation Committee and the Environmental, Health and Safety Committee of the Board. So long as an Icahn Designee is a member of the Board, the Icahn Group will also
have certain rights with respect to newly created committees as set forth in the Agreement. In addition, any Board consideration of appointment and employment of executive officers, mergers, acquisitions of material assets, dispositions of material
assets, or other extraordinary transactions, such consideration, and voting with respect thereto, will take place only at the full Board level or in committees of which one of the Icahn Designees is a member.
The Icahn Group has withdrawn its slate of director nominees and stockholder proposals previously submitted to Occidental in connection with the 2020 Annual Meeting. In
addition, the Icahn Group has agreed, by no later than March 26, 2020, to (i) withdraw and not renew its demand (the “220 Demand”) for books and records and other materials
pursuant to Section 220 of the Delaware General Corporation Law (“DGCL”) and (ii) stipulate to the dismissal with prejudice of the appeal, and use reasonable best efforts to
obtain Court approval of such stipulation of dismissal, of its pending appeal of the ligation before the Supreme Court of the State of Delaware relating to the 220 Demand.
If at any time the Icahn Group ceases to hold a “net long position”, as defined in the Agreement, in at least (i) 44,313,635 shares of the Company’s common stock, one of
the Icahn Designees will, and the Icahn Group will cause one Icahn Designee to, promptly resign from the Board; and (ii) 22,156,817 shares of the Company’s common stock, (A) each of the Icahn Designees will, and the Icahn Group will cause each such
Icahn Designee to, promptly resign from the Board and (B) the Icahn Group’s replacement rights with respect to the New Independent Director will terminate. Occidental is not required to include the Icahn Designees or the New Independent Director on
its slate of director nominees at any annual meeting following the 2020 Annual Meeting.
Other than the Rights Agreement, dated as of March 12, 2020 between the Company and Equiniti Trust Company, as Rights Agent, so long as the Icahn Group holds “a net long
position”, as defined in the Agreement, in at least 44,313,635 shares of the Company’s common stock, the Company will not adopt a Rights Plan, as defined in the Agreement, (i) with an “Acquiring Person” beneficial ownership threshold below 20.0% of
the then-outstanding shares of the Company’s common shares and (ii) unless such Rights Plan provides that, if such Rights Plan is not ratified by the Company’s stockholders within one year of such Rights Plan being adopted, such Rights Plan will
automatically expire.
In connection with the entry into the Agreement, Occidental amended and restated the By-laws (as defined below), effective immediately, as described under Item 5.03 of this
report, which is incorporated by reference herein. The Company also agreed to recommend, and the Icahn Group agreed to vote in favor of, the adoption by Occidental stockholders at the 2020 Annual Meeting of certain amendments to the Charter (as
defined below), as described under Item 5.03 of this report, which is incorporated by reference herein.
The Agreement also includes other customary voting, standstill and non-disparagement provisions. Absent an uncured breach of a material provision of the Agreement by
Occidental, the standstill restrictions on the Icahn Group will remain in effect until the later of (i) the end of the 2020 Annual Meeting and (ii) such date as no Icahn Designee is on the Board and the Icahn Group no longer has any right to
designate a replacement (including if the Icahn Group has irrevocably waived such right in writing).
Pursuant to the Company’s compensation program for non-employee directors, each of the Icahn Designees and the New Independent Director will receive (i) a pro rata portion
of the 2019-2020 common stock equity award granted to non-employee directors and (ii) a pro rata portion of the 2019-2020 retainer paid to non-employee directors, in each case after giving effect to a 15% reduction in all remaining 2019-2020
non-employee director compensation that has been adopted by the Board.
The foregoing description is qualified in its entirety by reference to the full text of the Agreement, a copy of which is attached hereto as Exhibit 10.1 and is
incorporated by reference herein.
In connection with the entry into the Agreement, the Company and the Icahn Group have also entered into a Confidentiality Agreement, the form of which is included as
Exhibit C to the Agreement, which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.