SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Occidental Petroleum Corporation
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(Name of Registrant as Specified In Its Charter)
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[OXY LOGO]
2002
OCCIDENTAL PETROLEUM CORPORATION
o Notice of Annual Meeting of Stockholders and Proxy Statement o
| March 19, 2002
|
FRIDAY, MAY 3, 2002 | Dear Stockholders:
Grand Ballroom |
The St. Regis | On behalf of the Board of Directors, it is
2055 Avenue of the Stars | my pleasure to invite you to Occidental's
Los Angeles, California | 2002 Annual Meeting of Stockholders, which
| will be held on Friday, May 3, 2002, at the
MEETING HOURS | Grand Ballroom, The St. Regis, 2055 Avenue
Registration Begins 9:30 A.M. | of the Stars, Los Angeles, California.
Meeting 10:30 A.M. |
| Attached is the Notice of Meeting and the
| Proxy Statement, which describes in detail
ADMISSION TICKET OR | the matters on which you are being asked to
CURRENT BROKERAGE STATEMENT | vote. These matters include electing the
REQUIRED FOR ADMISSION | directors and transacting any other business
| that properly comes before the meeting,
| including any stockholder proposals.
|
| Also enclosed are a Report to Stockholders,
| in which senior management discusses
| highlights of the year, and Occidental's
| Annual Report on Form 10-K. As in the past,
| at the meeting there will be a report on
| operations and an opportunity to ask
| questions.
|
| Whether you plan to attend the meeting or
| not, I encourage you to vote promptly so
| that your shares will be represented and
| properly voted at the meeting.
|
| Sincerely yours,
|
| /s/ RAY R. IRANI
|
| Ray R. Irani, Chairman and Chief Executive
| Officer
OCCIDENTAL PETROLEUM CORPORATION
10889 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90024
================================================================================
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 19, 2001
To Our Stockholders:
Occidental's 2002 Annual Meeting of Stockholders will be held at 10:30 a.m.
on Friday, May 3, 2002, at the Grand Ballroom, The St. Regis, 2055 Avenue of the
Stars, Los Angeles, California.
At the meeting, stockholders will act on the following matters:
1. Election of directors; and
2. Consideration of other matters properly brought before the meeting,
including stockholder proposals. The Board of Directors knows of two
stockholder proposals that may be presented.
These matters are described in detail in the Proxy Statement. The Board of
Directors recommends a vote FOR Proposal 1 and AGAINST Proposals 2 and 3.
Stockholders of record at the close of business on March 8, 2002, are
entitled to receive notice of, to attend and to vote at the meeting.
Whether you plan to attend or not, it is important that you read the Proxy
Statement and follow the instructions on your proxy card to vote by mail,
telephone or Internet. This will ensure that your shares are represented and
will save Occidental additional expenses of soliciting proxies.
Sincerely,
/s/ DONALD P. DE BRIER
Donald P. de Brier
Executive Vice President,
General Counsel and Secretary
PROXY STATEMENT
TABLE OF CONTENTS
GENERAL INFORMATION......................................................... 1
PROPOSAL 1: ELECTION OF DIRECTORS.......................................... 2
Information Regarding the Board of
Directors and its Committees............................................. 5
Compensation of Directors................................................ 6
Section 16(a) Beneficial Ownership
Reporting Compliance..................................................... 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT....................................................... 7
EXECUTIVE COMPENSATION...................................................... 9
Compensation Tables...................................................... 9
Employment Agreements.................................................... 13
Report of the Executive Compensation
and Human Resources Committee............................................ 15
Performance Graph........................................................ 19
AUDIT AND OTHER FEES........................................................ 20
REPORT OF THE AUDIT COMMITTEE............................................... 20
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS................................. 21
STOCKHOLDER PROPOSALS....................................................... 21
Proposal 2: Policy on Poison Pills...................................... 21
Proposal 3: Report on Global Warming
Emissions................................................................ 23
STOCKHOLDER PROPOSALS FOR THE 2003 ANNUAL
MEETING OF STOCKHOLDERS..................................................... 24
NOMINATIONS FOR DIRECTORS FOR TERM
EXPIRING IN 2004............................................................ 25
CORPORATE GOVERNANCE POLICIES............................................... 25
ANNUAL REPORT............................................................... 25
PROXY STATEMENT
GENERAL INFORMATION
------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Occidental Petroleum Corporation, a
Delaware corporation, for use at the Annual Meeting of Stockholders on May 3,
2002, and at any adjournment of the meeting.
ADMISSION TO MEETING
Attendance is limited to stockholders and one guest per stockholder. If you
plan to attend the meeting in person and you are a stockholder of record, you
must bring the admission ticket attached to your proxy or information card. If
your shares are held in the name of a bank, broker or other holder of record,
you will be admitted only if you have proof of ownership on the record date,
such as a bank or brokerage account statement. In addition to your admission
ticket or account statement, you may be asked to present valid picture
identification, such as a driver's license or passport.
VOTING RIGHTS
This Proxy Statement and accompanying proxy card are being mailed beginning
on or about March 19, 2002, to each stockholder of record as of March 8, 2002,
which is the record date for the determination of stockholders entitled to
receive notice of, to attend and to vote at, the meeting. As of the record date,
Occidental had outstanding and entitled to vote 374,698,972 shares of common
stock. A majority of outstanding shares must be represented at the meeting, in
person or by proxy, to constitute a quorum and to transact business. The record
holder of each share of common stock entitled to vote at the meeting will have
one vote for each share held. Stockholders may not cumulate their votes.
VOTE REQUIRED
Directors are elected by a plurality of votes cast, excluding broker
nonvotes. A majority of the shares of common stock represented at the meeting
and entitled to vote must vote for to approve all other matters. Abstentions and
broker nonvotes have the same effect as votes AGAINST on matters other than the
election of directors.
VOTING OF PROXIES
The Board of Directors has designated Drs. Ray R. Irani and Dale R.
Laurance and Mr. Aziz D. Syriani, and each of them, with the full power of
substitution, to vote shares represented by all properly executed proxies. The
shares will be voted in accordance with the instructions on the proxy card. If
no instructions are specified on the proxy card, the shares will be voted:
o FOR all nominees for directors (see page 2); and
o AGAINST proposals 2 and 3 (see pages 21 to 24).
In the absence of instructions to the contrary, proxies will be voted in
accordance with the judgment of the person exercising the proxy on any other
matter presented at the meeting in accordance with Occidental's By-laws.
CONFIDENTIAL VOTING
All proxies, ballots and other voting materials are kept confidential,
unless disclosure is required by applicable law or expressly requested by you,
you write comments on the proxy forms, or the proxy solicitation is contested.
1
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REVOKING A PROXY
You may revoke your proxy or change your vote before the meeting by filing
a revocation with the Secretary of Occidental, by delivering to Occidental a
valid proxy bearing a later date or by attending the meeting and voting in
person.
SOLICITATION EXPENSES
Expense of this solicitation will be paid by Occidental. Georgeson
Shareholder Communications Inc. has been retained to solicit proxies and assist
in distribution and collection of proxy material for a fee estimated at $15,000
plus reimbursement of out-of-pocket expenses. Occidental also will reimburse
banks, brokers, nominees and related fiduciaries for the expense of forwarding
soliciting material to beneficial owners of the common stock. In addition,
Occidental's officers, directors and regular employees may solicit proxies but
will receive no additional or special compensation for such work.
PROPOSAL 1
ELECTION OF DIRECTORS
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Unless you specify differently on the proxy card, proxies received will be
voted FOR Ronald W. Burkle, John S. Chalsty, Edward P. Djerejian, John E. Feick,
Dr. Ray R. Irani, Dr. Dale R. Laurance, Irvin W. Maloney, Rodolfo Segovia, Aziz
D. Syriani and Rosemary Tomich to serve until the 2003 annual meeting unless
ended earlier due to his or her death, resignation, disqualification or removal
from office. In the event any nominee should be unavailable at the time of the
meeting, the proxies may be voted for a substitute nominee selected by the Board
of Directors.
The following biographical information is furnished with respect to each of
the nominees for election at the 2002 annual meeting. Roger W. Hirl has retired
as the President and Chief Executive Officer of Occidental Chemical Corporation
and is not standing for reelection as a director.
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[PHOTO] RONALD W. BURKLE, 49
Mr. Burkle is the managing partner and majority
owner of The Yucaipa Companies, a private
investment firm that invests primarily its own
capital. He is the controlling shareholder of
Golden State Foods, the largest supplier of food
products to McDonald's and is trustee of The
John F. Kennedy Center for the Performing Arts,
trustee of The J. Paul Getty Trust and a member
of the Board of The Carter Center. Mr. Burkle is
also a director of KB Home and Yahoo!.
Director since 1999
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[PHOTO] JOHN S. CHALSTY, 68
Mr. Chalsty was Chairman of Donaldson, Lufkin &
Jenrette, Inc., an investment banking firm, from
1996 through 2000 and served as President and
Chief Executive Officer from 1986 to 1996. He is
also a director of AXA Financial, Inc., Sappi,
Ltd. and Metromedia Companies.
Director since 1996
2
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[PHOTO] EDWARD P. DJEREJIAN, 63
Ambassador Djerejian has been founding Director
of the James A. Baker III Institute for Public
Policy at Rice University since 1994. Before
that, he had a career in foreign service that
included serving as United States Ambassador to
Israel from 1993 to 1994, as Assistant Secretary
of State for Near Eastern Affairs from 1991 to
1993 and as U.S. Ambassador to the Syrian Arab
Republic from 1988 to 1991. Ambassador Djerejian
is also a director of Baker Hughes, Inc. and
Global Industries, Ltd.
Director since 1996
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[PHOTO] JOHN E. FEICK, 58
Since 1995, Mr. Feick has been President, Chief
Executive Officer and a major stockholder of
Matrix Solutions Inc., a provider of
environmental remediation and reclamation
services. He is also chairman and a partner in
Kemex Engineering Services, Ltd., which offers
engineering and design services to the
petrochemical, refining and gas processing
industries. He was president and chief operating
officer of Novacor Chemicals, a subsidiary of
Nova Corporation, from 1984 to 1994. Mr. Feick
is also a director of Fort Chicago Energy
Partners LP.
Director since 1998
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[PHOTO] DR. RAY R. IRANI, 67
Dr. Irani has been Chairman and Chief Executive
Officer of Occidental since 1990 and a director
since 1984. He served as President from 1984
until July 1996. He was Chief Operating Officer
from 1984 to 1990. He was Chairman of the Board
of Directors of Canadian Occidental Petroleum
Ltd. (now Nexen Inc.) from 1987 to 1999, and was
Honorary Chairman of the Board from 1999 to
2000. Dr. Irani is also a director of Cedars
Bank, Health Net and KB Home.
Director since 1984
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[PHOTO] DR. DALE R. LAURANCE, 56
Dr. Laurance has been President of Occidental
since 1996 and a director of Occidental since
1990. Since 1999, he has been Chairman of the
Board, President and Chief Executive Officer of
Occidental Oil and Gas Corporation. He is also a
director of Jacobs Engineering Group Inc. and
Ingram Micro, Inc.
Director since 1990
3
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[PHOTO] IRVIN W. MALONEY, 71
From 1992 until his retirement in 1998, Mr.
Maloney was President and Chief Executive
Officer of Dataproducts Corporation, which
designs, manufactures and markets printers and
supplies for computers.
Director since 1994
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[PHOTO] RODOLFO SEGOVIA, 65
Mr. Segovia is on the Executive Committee of
Inversiones Sanford, a diversified investment
group with emphasis in petrochemicals, specialty
chemicals and plastics. A former president of
the Colombian national oil company (Ecopetrol)
as well as Minister and Senator of the Republic
of Colombia, he has been president and CEO of
Sanford's PVC company and, from 1996 to 1998, of
its polypropylene venture. In 1999, he was
visiting Professor of Management at Lehigh
University.
Director since 1994
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[PHOTO] AZIZ D. SYRIANI, 59
Mr. Syriani has served since 1978 as the
President and Chief Operating Officer of The
Olayan Group, a diversified trading, services
and investment organization with activities and
interests in the Middle East and elsewhere. Mr.
Syriani is also a director of The Credit Suisse
Group.
Director since 1983
Lead Independent Director since 1999
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[PHOTO] ROSEMARY TOMICH, 64
Miss Tomich has been owner of the Hope Cattle
Company since 1958 and the A. S. Tomich
Construction Company since 1970. She is also
Chairman of the Board of Directors and Chief
Executive Officer, Livestock Clearing, Inc. and
a director of ICN Pharmaceuticals, Inc. and was
a Founding Director of the Palm Springs Savings
Bank. Miss Tomich is also on the Advisory Board
of the University of Southern California School
of Business Administration, the Board of
Councillors for the School of Letters and
Sciences at the University of Southern
California and the UCLA Foundation Board of
Councillors.
Director since 1980
4
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INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held 5 regular meetings during 2001. Each director
attended at least 75 percent of the meetings of the Board of Directors and the
committees of which he or she was a member. In 2001, the Board of Directors had
a Lead Independent Director and five standing committees: Executive; Audit;
Executive Compensation and Human Resources; Nominating and Corporate Governance;
and Environmental, Health and Safety. The general duties of the Lead Independent
Director and the committees are described below. From time to time, the Board of
Directors delegates additional duties to the standing committees.
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NAME OF COMMITTEE MEETINGS OR WRITTEN
AND MEMBERS COMMITTEE RESPONSIBILITIES ACTIONS IN 2001
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LEAD INDEPENDENT DIRECTOR o coordinates the activities of the independent directors
o advises the Chairman on the schedule and agenda for
Aziz D. Syriani Board meetings
o assists in assuring compliance with Occidental's
corporate governance policies
o assists the Executive Compensation and Human Resources
Committee in evaluating the Chairman's performance
o recommends to the Chairman membership of the various
Board committees
EXECUTIVE COMMITTEE o exercises the powers of the Board of Directors with 1 unanimous written
respect to the management of the business and affairs of consent in lieu of
Dr. Ray R. Irani (chairman) Occidental between meetings of the Board of Directors a meeting
Dr. Dale R. Laurance
Irvin W. Maloney
Aziz D. Syriani
Rosemary Tomich
AUDIT COMMITTEE All of the members of the Audit Committee meet the 6 meetings
independence standards of Section 303.01(b)(2) and (3) of
Irvin W. Maloney the New York Stock Exchange's listing standards. The Audit
Aziz D. Syriani Committee Report with respect to Occidental's financial
Rosemary Tomich (chairman) statements is on page 20.
The duties of the Audit Committee are set forth in a
written charter. The following are its primary
responsibilities:
o recommends the firm of independent public accountants to
audit the consolidated financial statements, books,
records and accounts of Occidental and its subsidiaries
o discusses the scope and results of the audit with the
independent public accountants
o discusses Occidental's financial accounting and
reporting principles and the adequacy of Occidental's
internal accounting, financial and operating controls
with the accountants and with management
o reviews all reports of internal audits submitted to the
Audit Committee and management's responses thereto
o reviews the appointment of the senior internal auditing
executive
o oversees all matters relating to Occidental's compliance
program
5
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NAME OF COMMITTEE MEETINGS OR WRITTEN
AND MEMBERS COMMITTEE RESPONSIBILITIES ACTIONS IN 2001
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EXECUTIVE COMPENSATION AND HUMAN o administers Occidental's stock-based incentive 5 meetings
RESOURCES COMMITTEE compensation plans, including selecting participants,
making grants and setting performance targets
Ronald W. Burkle o periodically reviews the performance of the plans and
John S. Chalsty their rules
Irvin W. Maloney (chairman) o reviews and approves the annual salaries, bonuses and
Rosemary Tomich other benefits of all executive officers
o reviews new executive compensation programs; and
o periodically reviews the operation of existing executive
compensation programs as well as policies for the
administration of executive compensation
The Executive Compensation and Human Resources Committee's
report on executive compensation begins on page 15.
NOMINATING AND CORPORATE GOVERNANCE o recommends candidates for election to the Board 2 meetings
COMMITTEE o is responsible for compliance with Occidental's
Governance Policies
Edward P. Djerejian
Aziz D. Syriani (chairman) See page 25 for instructions on how to recommend nominees
Rosemary Tomich for the Board.
ENVIRONMENTAL, HEALTH AND SAFETY o reviews and discusses with management the status of 5 meetings
COMMITTEE health, environment and safety issues, including
compliance with applicable laws and regulations
Edward P. Djerejian o reviews the results of internal compliance reviews and
John E. Feick remediation projects
Rodolfo Segovia (chairman) o reports periodically to the Board on environmental,
Rosemary Tomich health and safety matters affecting Occidental and its
subsidiaries
COMPENSATION OF DIRECTORS
For the term expiring at the 2002 Annual Meeting, non-employee directors
were paid a retainer of $35,000 per year, plus $1,250 for each meeting of the
Board of Directors or of its committees they attend and, pursuant to the 1996
Restricted Stock Plan for Non-Employee Directors, received an annual grant of
2,500 shares of Common Stock, plus an additional 200 shares of Common Stock for
each committee he or she chairs. In addition, Occidental reimburses non-employee
directors for expenses related to service on the Board, pays the premiums for
one non-employee director who participates in the Occidental Petroleum
Corporation Insured Medical Plan and, subject to availability, permits
non-employee directors to make use of company aircraft and office space. One
non-employee director also received an aggregate of $2,250 for attending the two
meetings of the directors of the Occidental Petroleum Charitable Foundation. The
Foundation held two meetings in 2001.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules issued thereunder, Occidental's executive officers, directors and any
beneficial owner of more than 10 percent of any class of Occidental's equity
securities are required to file with the Securities and Exchange Commission and
the New York Stock Exchange reports of ownership and changes in ownership of
common stock. Copies of such reports are required to be furnished to Occidental.
Based solely on its review of the copies of the reports furnished to Occidental,
or written representations that no reports were required, Occidental believes
that, during 2001, all persons required to report complied with the Section
16(a) requirements, except Mr. Casey Olson, Vice President, whose initial Form 3
was filed late.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------
At the close of business on March 8, 2002, the beneficial owners of common
stock shown below were the only persons known to Occidental to be the beneficial
owners of five percent or more of the outstanding voting securities of
Occidental.
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PERCENT OF
NUMBER OF OUTSTANDING SOLE SHARED SOLE SHARED
SHARES COMMON VOTING VOTING INVESTMENT INVESTMENT
NAME AND ADDRESS OWNED STOCK SHARES SHARES SHARES SHARES
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AXA Financial Inc. 49,101,623(1) 13.10%(1) 22,327,498(1) 7,720,889(1) 48,746,723(1) 354,900(1)
1290 Avenue of the Americas
New York, New York 10104
Barrow, Hanley, Mewhinney & Strauss, Inc 30,727,810(2) 8.22%(2) 7,247,346(2) 23,480,464(2) 30,727,810(2) 0(2)
One McKinney Plaza
3232 McKinney Avenue, 15th Floor
Dallas, Texas 75024-2429.
Dodge & Cox 21,365,759(3) 5.70%(3) 20,032,209(3) 236,900(3) 21,365,759(3) 0(3)
One Sansome Street, 35th Floor
San Francisco, California 94104
Barclays Global Investors, N.A. 26,719,264(4) 7.15%(4) 25,509,342(4) 0(4) 26,719(4) 0(4)
45 Fremont Street
San Francisco, California 94105
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(1) Pursuant to Amendment No. 2 to Schedule 13G, filed as of February 12,
2002 with the Securities and Exchange Commission.
(2) Pursuant to Schedule 13G, filed as of February 8, 2002 with the
Securities and Exchange Commission. Occidental has been advised that 20,323,900
of the shares (5.44%) of the class are held by Barrow, Hanley as manager of
Vanguard Windsor Funds - Vanguard Windsor II Fund.
(3) Pursuant to Amendment No. 1 to Schedule 13G, filed as of February 7,
2002 with the Securities and Exchange Commission.
(4) Pursuant to Schedule 13G, filed as of February 14, 2002 with the
Securities and Exchange Commission.
7
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The following table sets forth certain information regarding the beneficial
ownership of common stock as of February 28, 2002, by each of the named
executive officers, the directors of Occidental and all executive officers and
directors as a group.
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SOLE VOTING PERCENT OF
AND TOTAL SHARES OUTSTANDING PERFORMANCE DEFERRED
INVESTMENT RESTRICTED EXERCISABLE BENEFICIALLY COMMON STOCK STOCK
NAME SHARES(1) SHARES(2) OPTIONS(3) OWNED(4) STOCK(5) UNITS(6) UNITS(7)
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Ronald W. Burkle 10,000 7,000 N/A 17,000 N/A N/A
John S. Chalsty 5,000 4,920 N/A 9,920 N/A N/A
Stephen I. Chazen 14,550 107,023 1,061,668 1,183,241 73,238 40,045
Donald P. de Brier 18,648 69,909 768,334 856,891 68,342 22,979
Edward P. Djerejian 346 7,606 N/A 7,952 N/A N/A
John E. Feick 1,000 7,000 N/A 8,000 N/A N/A
J. Roger Hirl 50,449 12,025 951,667 1,014,141 82,695 27,716
Ray R. Irani 655,422 215,085 3,064,887 3,935,394 1.47% 332,790 63,863
Dale R. Laurance 117,514 109,244 1,645,000 1,871,758 185,503 64,213
Irvin W. Maloney 3,445 8,350 N/A 11,795 N/A N/A
Rodolfo Segovia(8) 6,626 8,235 N/A 14,861 N/A N/A
Aziz D. Syriani 1,000 9,550 N/A 10,550 N/A N/A
Rosemary Tomich 4,500 8,950 N/A 13,450 N/A N/A
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All executive officers 1,100,138(8) 600,897 10,509,060 12,210,095 4.57% 1,044,604 297,038
and directors as a
group (25 persons)
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(1) Includes shares held through the Occidental Petroleum Corporation
Savings Plan. Does not include shares acquired after December 31, 2001 pursuant
to the Occidental Petroleum Corporation Dividend Reinvestment Plan.
(2) For non-employee directors, includes shares for which investment
authority has not vested under the 1996 Restricted Stock Plan. For executive
officers, includes shares for which investment authority has not vested pursuant
to either the 1995 Incentive Stock Plan or the 2001 Incentive Compensation Plan.
(3) Includes options which will be exercisable within 60 days.
(4) Total is the sum of the first three columns.
(5) Unless otherwise indicated, less than one percent.
(6) Includes the target award under performance stock grants made pursuant
to the 1995 Incentive Stock Plan and 2001 Incentive Compensation Plan. Until the
performance period ends and the awards are certified, no shares of common stock
are issued. However, grant recipients receive dividend equivalents on the target
share amount during the performance period.
(7) Includes shares earned under restricted stock and performance stock
awards that were deferred at the end of the restricted or performance period, as
applicable. During the deferral period, dividend equivalents are paid in cash or
accrued as additional stock units depending on the participant's deferral
election.
(8) Holdings include 5,000 shares held by Mr. Segovia as trustee for the
benefit of his children.
8
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EXECUTIVE COMPENSATION
------------
COMPENSATION TABLES
Set forth below are tables showing: (1) in summary form, the compensation
paid, for the years shown in the table, to Dr. Irani and the four other
highest-paid executive officers of Occidental serving as executive officers on
December 31, 2001; (2) the options and stock appreciation rights granted to such
executives in 2001; (3) exercise and year-end value information pertaining to
stock options and stock appreciation rights granted to such executives; and (4)
long-term incentive plan awards granted and paid to such executives with respect
to their performance through 2001.
SUMMARY COMPENSATION TABLE
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Annual Compensation Long-Term Compensation
------------------------------------ ----------------------------------
Awards Payouts
-------------------- ---------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Salary Bonus Compensation Award(s)(1) Options/SARs Payouts(2) Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
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Ray R. Irani, 2001 $ 1,300,000 $ 2,600,000 $ 772,696(3) $ 2,225,700 1,300,000 $ 1,259,857 $ 775,325(4)
Chairman and Chief 2000 $ 1,250,000 $ 2,125,000 $ 695,387(3) $ 596,000 750,000 $ 0 $ 559,150(4)
Executive Officer 1999 $ 1,200,000 $ 1,620,000 $ 1,154,067(3) $ 2,057,998 800,000 $ 0 $ 422,134(4)
Dale R. Laurance, 2001 $ 1,030,000 $ 1,640,000 $ 356,798(5) $ 1,236,500 450,000 $ 748,066 $ 470,012(6)
President 2000 $ 990,000 $ 1,386,000 $ 308,122(5) $ 199,660 375,000 $ 451,268 $ 374,134(6)
1999 $ 950,000 $ 1,026,000 $ 235,604(5) $ 1,045,994 430,000 $ 331,836 $ 257,928(6)
J. Roger Hirl, 2001 $ 660,000 $ 400,000 $ 133,506(7) $ 197,840 250,000 $ 286,497 $ 225,357(8)
Executive Vice 2000 $ 640,000 $ 250,000 $ 164,254(7) $ 95,956 200,000 $ 216,868 $ 212,174(8)
President 1999 $ 615,000 $ 316,000 $ 162,886(7) $ 0 265,000 $ 204,010 $ 153,936(8)
Stephen I. Chazen, 2001 $ 600,000 $ 720,000 $ 145,176(9) $ 989,200 325,000 $ 233,093 $ 268,747(10)
EVP and Chief 2000 $ 572,000 $ 687,000 $ 122,837(9) $ 939,535 500,000 $ 145,864 $ 205,432(10)
Financial Officer 1999 $ 520,000 $ 468,000 $ 70,160(9) $ 499,998 290,000 $ 136,627 $ 118,706(10)
Donald P. de Brier 2001 $ 551,000 $ 550,000 $ 110,377(11) $ 445,140 200,000 $ 233,093 $ 161,778(12)
EVP, General Counsel 2000 $ 530,000 $ 530,000 $ 108,986(11) $ 78,124 175,000 $ 176,564 $ 144,435(12)
and Secretary 1999 $ 500,000 $ 450,000 $ 57,787(11) $ 999,996 220,000 $ 164,696 $ 81,510(12)
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Includes awards made in December 2001 to each of the executive
officers listed pursuant to the Occidental Petroleum Corporation 2001 Incentive
Compensation Plan, subject to a three year restricted period. As of December 31,
2001, Dr. Irani held 231,460 shares of restricted stock, having a value of
$6,140,634; Dr. Laurance 117,346 shares, having a value of $3,113,189; Mr. Hirl
15,648 shares, having a value of $415,141; Mr. Chazen 129,341 shares, having a
value of $3,431,417; and Mr. de Brier 72,857 shares, having a value of
$1,932,896.
(2) The payout was determined based on a peer company comparison of total
stockholder return. See "Report of the Executive Compensation and Human
Resources Committee" at page 15 for information concerning the modification of
the awards to adjust for peer group companies that have merged or ceased to
exist during the Performance Period. "0" indicates that the executive officer
listed did not receive an award and therefore was not eligible for a payout.
(3) Includes for 2001, 2000 and 1999 respectively, unless otherwise noted:
$32,885, $25,000 and $54,882 for club dues; $313,750, $177,575 and $95,000 for
tax preparation and financial planning services; and $426,061, $492,812 and
$517,267 in dividends and dividend equivalents paid on restricted and
performance stock awards; and $486,918 of reimbursements (1999 only), pursuant
to Dr. Irani's employment agreement prior to its 1997 amendment, for state
income tax expenditures for periods prior to 1997.
(4) Includes for 2001, 2000 and 1999 respectively, unless otherwise noted:
$13,144 and $122,472 (2000 and 1999 only) of director's fees paid by an equity
investee of Occidental; $10,200, $8,925, and $7,200 credited pursuant to the
Occidental Petroleum Corporation Savings Plan (the "Savings Plan"); $14,600,
$10,875 and $13,200 credited pursuant to the Occidental Petroleum Corporation
Retirement Plan (the "Retirement Plan"), a tax-qualified, defined contribution
plan that provides retirement benefits for salaried employees of Occidental and
certain of its subsidiaries; $463,570, $337,570 and, $133,785 credited pursuant
to the Occidental Petroleum Corporation Supplemental Retirement Plan (the
"Supplemental Retirement Plan"), a nonqualified plan that was established to
provide designated senior executives of Occidental and its subsidiaries with
benefits that will compensate them for certain limitations imposed by federal
law on contributions that may be made pursuant to the Retirement Plan and
Savings Plan; $254,455, $156,136 and $112,977 of accrued interest on deferred
compensation; and $32,500, $32,500 and $32,500 for term life insurance premiums.
9
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(5) Includes for 2001, 2000 and 1999 respectively, unless otherwise noted,
$45,538, $31,388 and $34,999 for club membership and dues; $43,432, $43,162 and
$48,795 for personal use of company aircraft; $40,000, $20,294 and, $5,074 for
tax preparation and financial planning services; and $227,828, $213,278, and
$146,736 in dividends and dividend equivalents paid on restricted and
performance stock awards.
(6) Includes for 2001, 2000, 1999 respectively, unless otherwise noted:,
$17,288 and, $67,872 (2000 and 1999 only) of director's fees paid by an equity
investee of Occidental; $10,200, $8,925 and $7,200 credited pursuant to the
Savings Plan; $14,600, $10,875 and $13,200 credited pursuant to the Retirement
Plan; $325,480, $272,437 and $134,497 credited pursuant to Supplemental
Retirement Plan; $115,682, $60,559 and $31,109 of accrued interest on deferred
compensation; and $4,050, $4,050 and $4,050 for term life insurance premiums.
(7) Includes for 2001, 2000 and 1999 respectively, unless otherwise noted:
$26,219, $56,479 and $48,011 for personal use of company aircraft; $3,300,
$3,300 and $3,300 for tax and financial planning services; $21,436, $27,975 and
$36,360 for club dues; $4,066, $2,444 and $3,489 for automobile maintenance; and
$78,485, $74,056 and $71,726 in dividends and dividend equivalents on restricted
and performance stock awards.
(8) Includes for 2001, 2000 and 1999 respectively, unless otherwise noted:
$10,200, $8,925 and $7,200 credited pursuant to the Savings Plan; $12,900,
$10,875 and $11,600 credited pursuant to the Retirement Plan; $123,150, $125,944
and $80,068 credited pursuant to the Supplemental Retirement Plan; $62,275,
$52,142 and $42,802 of accrued interest on deferred compensation; and $16,832,
$14,288 and $12,266 for term life insurance premiums.
(9) Includes for 2001, 2000 and 1999, respectively, $145,176, $122,837 and
$70,160 in dividends and dividend equivalents on restricted and performance
stock awards. Mr. Chazen did not receive perquisites or other personal benefits,
securities or property exceeding $50,000, in any of the years.
(10) Includes for 2001, 2000 and 1999 respectively, unless otherwise noted:
$10,200, $8,925 and $7,200 credited pursuant to the Savings Plan; $14,600,
$10,875 and $13,200 credited pursuant to the Retirement Plan; $162,910, $132,275
and $62,580 credited pursuant to the Supplemental Retirement Plan; and $81,037,
$53,357 and $35,726 of accrued interest on deferred compensation.
(11) Includes for 2001, 2000 and 1999, respectively, $110,377, $108,986 and
$57,787 in dividends and dividend equivalents on restricted and performance
stock awards. Mr. de Brier did not receive perquisites or other personal
benefits, securities or property exceeding $50,000, in any of the years.
(12) Includes for 2001, 2000 and 1999 respectively, unless otherwise noted:
$10,200, $8,925 and $7,200 credited pursuant to the Savings Plan; $14,600,
$10,875 and $13,200 credited pursuant to the Retirement Plan; $135,103, $122,760
and $59,235 credited pursuant to the Supplemental Retirement Plan; and $1,875,
$1,875 and $1,875 for term life insurance premiums.
10
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OPTION/SAR GRANTS IN 2001
- --------------------------------------------------------------------------------------------------------------------------
Number Potential Realizable Value
of Securities Percent of Total at Assumed Annual Rates
Underlying Options/SARs of Stock Price Appreciation
Options/SARs Granted to Exercise or for Option Term(4)
Granted(1) Employees in Base Price(2) Expiration ---------------------------
Name (#) 2001 ($/Share) Date(3) 5% 10%
- --------------------------------------------------------------------------------------------------------------------------
Ray R. Irani 3,741 0.24% $ 26.75 7/11/11 $ 62,935 $ 159,489
1,296,259 26.95% $ 26.75 7/11/11 $ 21,806,876 $ 55,262,905
Dale R. Laurance 3,741 0.24% $ 26.75 7/11/11 $ 62,935 $ 159,489
446,259 9.28% $ 26.75 7/11/11 $ 7,507,384 $ 19,025,186
J. Roger Hirl 3,741 0.24% $ 26.75 7/11/11 $ 62,935 $ 159,489
246,259 5.12% $ 26.75 7/11/11 $ 4,142,798 $ 10,498,664
Stephen I. Chazen 3,741 0.24% $ 26.75 7/11/11 $ 62,935 $ 159,489
321,259 6.68% $ 26.75 7/11/11 $ 5,404,518 $ 13,696,110
Donald P. de Brier 3,741 0.24% $ 26.75 7/11/11 $ 62,935 $ 159,489
196,259 4.08% $ 26.75 7/11/11 $ 3,301,652 $ 8,367,034
- --------------------------------------------------------------------------------------------------------------------------
(1) In July 2001, each of the named executive officers received a
simultaneous grant of Incentive Stock Options ("ISOs") and Non-qualified Stock
Options ("NQSOs"). The ISOs are listed first in the foregoing table and the
NQSOs are listed second. The ISOs and NQSOs were granted subject to a three-year
vesting period, with approximately one-third of the options granted becoming
exercisable each year commencing on the first anniversary of the grant date and
ending on the third anniversary. The vesting and exercisability of the options
will be accelerated in the event of a Change of Control (as defined in the 2001
Incentive Compensation Plan). No stock appreciation rights were granted in 2001.
(2) Options are granted at market price on the day of the grant. The
exercise price and tax withholding obligations related to exercise may be paid
by delivery of already owned shares or by offset of the underlying shares,
subject to certain conditions.
(3) The options were granted for terms of 10 years. Upon the termination
of an optionee's employment, the options continue to vest and remain exercisable
(depending on the cause of termination) for a period of up to the remaining term
of each option. However, under the provisions of his employment agreement, the
options granted to Dr. Irani become fully vested immediately in the event of
termination by Occidental or his retirement and are then exercisable for the
remaining term of the option. Under the terms of his employment agreement, the
options granted to Dr. Laurance become fully vested immediately in the event of
termination by Occidental and are exercisable for the remaining term of the
option. Under the terms of their respective employment agreements, the options
granted to Messrs. Hirl, Chazen and de Brier continue to vest and are
exercisable for the remaining term of the agreement. See "Employment Agreements"
below.
(4) The dollar amounts in these columns are the result of calculations at
the 5% and 10% annual appreciation rates for the term of the options (10 years)
as required by the Securities and Exchange Commission, and therefore are not
intended to predict future appreciation, if any, in the price of Occidental
common stock.
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AGGREGATED OPTIONS/SAR EXERCISES IN 2001
AND DECEMBER 31, 2001 OPTION/SAR VALUES
- --------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Shares Options/SARs at 12/31/01 at 12/31/01(2)
Acquired Value ----------------------------- -----------------------------
on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
- --------------------------------------------------------------------------------------------------------------------
Ray R. Irani 160,113 $ 1,656,196 3,114,887 1,900,000 $12,295,203 $ 4,399,250
Dale R. Laurance 25,000 $ 255,750 1,626,667 743,333 $ 5,475,366 $ 2,121,921
J. Roger Hirl 20,000 $ 212,000 941,667 413,333 $ 3,321,169 $ 1,211,981
Stephen I. Chazen 0 0 1,031,668 688,332 $ 3,957,207 $ 2,203,393
Donald P. de Brier 0 0 745,001 339,999 $ 2,669,129 $ 1,026,483
- --------------------------------------------------------------------------------------------------------------------
(1) Represents the difference between the closing price of the common
stock on the New York Stock Exchange on the exercise date and the option
exercise price.
(2) The value of unexercised in-the-money options is calculated by
multiplying the number of underlying shares by the difference between the
closing price of the common stock on the New York Stock Exchange at 12/31/01 and
the option exercise price.
LONG-TERM INCENTIVE PLAN -- AWARDS IN 2001(1)
- ---------------------------------------------------------------------------------------------------------------------------
Estimated Future Payouts Under
Performance or Non-Stock Price-Based Plans
Number of Shares, Other Period -------------------------------------------------
Units or Until Maturation or Threshold Target Maximum
Name Other Rights (#) Payout (# of shares) (# of shares) (# of shares)
- ---------------------------------------------------------------------------------------------------------------------------
Ray R. Irani 75,052 4 years(2) 0 75,052 150,104
Dale R. Laurance 42,475 4 years(3) 0 42,475 84,950
J. Roger Hirl 19,052 4 years(4) 0 19,052 38,104
Stephen I. Chazen 17,320 4 years(4) 0 17,320 34,640
Donald P. de Brier 15,906 4 years(4) 0 15,906 31,812
- ---------------------------------------------------------------------------------------------------------------------------
(1) Performance Stock Awards were made in January 2001 pursuant to the
1995 Incentive Stock Plan. The number of shares received at the end of the
performance period will depend on the attainment of performance objectives based
on a peer company comparison of total stockholder return. Depending on
Occidental's ranking among its peers and subject to the grantee remaining
employed throughout the performance period, the grantee receives shares of
common stock in an amount ranging from 0% to 200% of the Target Share Award;
provided, however, if the grantee dies, becomes disabled, retires or is
terminated for the convenience of the company during the performance period,
then the grantee will forfeit the right to receive a pro rata portion of the pay
out based on the days remaining in the performance period after such event.
During the performance period, dividend equivalents are credited on the Target
Shares in an amount equal to the per share dividend declared per share of common
stock and cash equal to the dividend equivalent is paid to the grantees. In the
event of a Change of Control (as defined in the 1995 Incentive Stock Plan), the
grantee's right to receive the number of Target Shares becomes nonforfeitable.
(2) Under the terms of his employment agreement, any long-term incentive
awards granted to Dr. Irani become fully vested immediately in the event of
termination by Occidental or his retirement. See "Employment Agreements" below.
(3) Under the terms of his employment agreement, any long-term incentive
awards granted to Dr. Laurance become fully vested immediately in the event of
termination by Occidental. See "Employment Agreements" below.
(4) Under the terms of their respective employment agreements, the
performance period for the entire award granted to Messrs. Hirl, Chazen and de
Brier continues in the event of termination without cause for the remaining term
of the agreement. See "Employment Agreements" below.
12
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EMPLOYMENT AGREEMENTS
The following are summaries of the employment agreements between Occidental
and the executive officers named in the Compensation Tables. Copies of the
agreements are available as exhibits to Occidental's periodic reports filed with
the Securities and Exchange Commission.
DR. IRANI
On November 17, 2000, Dr. Irani entered into an amended and restated
employment agreement with Occidental. The agreement, as amended, is for a term
expiring on the earlier of Occidental's 2007 Annual Meeting of Stockholders or
May 30, 2007 with an annual salary at a minimum rate of $1,250,000, subject to
annual increase (and, as part of across-the-board reductions for other officers,
decrease) at the reasonable discretion of the Board of Directors and the
Executive Compensation and Human Resources Committee. In addition, Dr. Irani is
eligible for a discretionary annual cash bonus and to participate in
Occidental's qualified and nonqualified retirement plans, its incentive stock
plan, deferred compensation plan and any future performance plans adopted by
Occidental as well as any group life insurance, medical care (including coverage
for his wife and children), disability and other plans or benefits which
Occidental may provide for him. Prior to his retirement, Dr. Irani will receive
life insurance at least equal to three times his highest career annual salary,
which life insurance shall be assignable at Dr. Irani's option. During the term
of his employment, Dr. Irani will receive six weeks paid vacation each calendar
year (which will accrue and for which he will be entitled to be paid for any
accrued but unused vacation time upon termination of the agreement) and the
minimum perquisites to which he was entitled prior to the effective date of his
agreement. See also footnote (3) to the Compensation Table on page 9.
Following his retirement or upon the termination of his employment by
Occidental, Dr. Irani will continue to receive life insurance equal to twice his
highest career annual salary, medical benefits and the personal tax, accounting
and financial planning services currently provided to him. Upon retirement,
notwithstanding the provisions of the award agreements, all of Dr. Irani's
unvested stock options and restricted stock awards will immediately vest and his
performance stock awards will become immediately vested and fully payable. If
the agreement is terminated due to Dr. Irani's death, Dr. Irani's estate will be
entitled to a pro-rata portion of any bonus he was eligible to receive for the
year of his death. If Dr. Irani is married at the time of his death, his wife
will be entitled, for the remainder of her life, to continuation of medical
benefits throughout her life. If Dr. Irani is terminated by Occidental for any
reason, or if Dr. Irani terminates employment because Occidental materially
breaches the agreement, Dr. Irani is entitled to receive three times his highest
annual salary and bonus for any calendar year commencing with January 1, 2000
(subject to certain offsets of disability benefits in the case of termination
due to disability), without obligation to mitigate, payable, at Dr. Irani's
option, in equal monthly installments over three years or in an undiscounted
lump sum. In such event of termination, Dr. Irani is also entitled to receive
his medical, welfare and life insurance benefits; and if such termination is not
due to death or disability, his existing perquisites and the full and immediate
vesting of his restricted stock, stock options and any other long-term incentive
benefits; provided that the options or stock appreciation rights shall be
exercisable as if he had retired on such date and that nothing in his employment
agreement affects his existing grant agreements. If after termination of his
employment Dr. Irani is not eligible to participate in Occidental's benefit
plans as contemplated by his employment agreement, then Occidental will provide
Dr. Irani with substantially equivalent benefits and will reimburse him for any
additional tax liabilities incurred by him as a result of his receipt of such
benefits.
If Occidental materially breaches the agreement and does not cure the
breach after notice thereof, Dr. Irani may terminate his employment and treat
such occurrence as if it were a termination by Occidental; provided that it
shall not be a material breach if, following the merger or sale of Occidental or
substantially all of its assets, Dr. Irani continues to have substantially the
same executive duties and reports to the acquirer's board of directors. The
agreement also holds Dr. Irani harmless from the effects of any excise or other
taxes payable under or as a result of Sections 280G and 4999 of the Internal
Revenue Code of 1986 or comparable state law by reason of a change of control,
including taxes payable on any amounts paid pursuant to this hold harmless
provision. During and after the term of the agreement, Dr. Irani is entitled to
the payment of all legal fees other than those of a purely personal nature. In
addition, the agreement provides for additional indemnification for Dr. Irani to
the fullest extent permitted by applicable law and for Occidental to maintain
Directors' and Officers' liability insurance
13
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with policy limits aggregating not less than $100 million, insuring Dr. Irani
against occurrences which occur during the term of the agreement.
DR. LAURANCE
On November 17, 2000, Dr. Laurance entered into an amended and restated
employment agreement with Occidental. The agreement, as amended, is for a
five-year term with an annual salary at a minimum rate of $990,000, subject to
annual increase (and, as part of across-the-board reductions for other officers,
decrease) at the reasonable discretion of the Board of Directors and the
Executive Compensation and Human Resources Committee. In addition, Dr. Laurance
is eligible for a discretionary annual cash bonus and to participate in
Occidental's qualified and nonqualified retirement plans, its incentive stock
plan, deferred compensation plan and any future performance plans adopted by
Occidental as well as any group life insurance, medical care (including coverage
for his wife and children), disability and other plans or benefits which
Occidental may provide for him. Prior to his retirement, Dr. Laurance will
receive life insurance at least equal to three times his highest career annual
salary, which insurance shall be assignable at Dr. Laurance's option. During the
term of his employment, Dr. Laurance will receive the minimum perquisites to
which he was entitled prior to the effective date of his agreement. See also
footnote (5) to the Compensation Table on page 10.
Following his retirement or upon the termination of his employment by
Occidental, Dr. Laurance will continue to receive life insurance equal to twice
his highest career annual salary, medical benefits no less favorable than those
provided to Dr. Laurance prior to such retirement or termination, and the
personal tax, accounting and financial planning services he currently receives.
If the agreement terminates due to Dr. Laurance's death, Dr. Laurance's estate
will be entitled to a pro-rata portion of any bonus he was entitled to have
received for the year of his death. If Dr. Laurance is married at the time of
his death, his wife will be entitled, for the remainder of her life, to
continuation of medical benefits throughout her life. If Dr. Laurance is
terminated by Occidental for any reason, or if Dr. Laurance terminates
employment because Occidental materially breaches the agreement, Dr. Laurance is
entitled to receive three times his highest annual salary and bonus for any
calendar year commencing with January 1, 2000 (subject to certain offsets of
disability benefits in the case of termination due to disability) without
obligation to mitigate, payable, at Dr. Laurance's option, in equal monthly
installments over three years or in an undiscounted lump sum. In such event of
termination, Dr. Laurance is also entitled to receive his medical, welfare and
life insurance benefits; and if such termination is not due to death or
disability, the full and immediate vesting of his restricted stock, stock
options and any other long-term incentive benefits; provided that the options or
stock appreciation rights shall be exercisable as if he had retired on such date
and that nothing in his employment agreement affects his existing grant
agreements. If after termination of his employment Dr. Laurance is not eligible
to participate in Occidental's benefit plans as contemplated by his employment
agreement, then Occidental will provide Dr. Laurance with substantially
equivalent benefits and will reimburse him for any additional tax liabilities
incurred by him as a result of his receipt of such benefits.
If Occidental materially breaches the agreement and does not cure the
breach after notice thereof, Dr. Laurance may terminate his employment and treat
such occurrence as if it were a termination by Occidental; provided that it
shall not be a material breach if, following the merger or sale of Occidental or
substantially all of its assets, Dr. Laurance continues to have substantially
the same executive duties and reporting relationships. The agreement also holds
Dr. Laurance harmless from the effects of any excise or other taxes payable
under or as a result of Sections 280G and 4999 of the Internal Revenue Code of
1986 or comparable state law by reason of a change of control, including taxes
payable on any amounts paid pursuant to this hold harmless provision. During and
after the term of the agreement, Dr. Laurance is entitled to the payment of all
legal fees other than those of a purely personal nature. In addition, the
agreement provides for additional indemnification for Dr. Laurance to the
fullest extent permitted by applicable law and for Occidental to maintain
Directors' and Officers' liability insurance with policy limits aggregating not
less than $100 million, insuring Dr. Laurance against occurrences which occur
during the term of the agreement.
14
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MR. HIRL
On December 13, 2001, Mr. Hirl entered into a new employment agreement with
Occidental to reflect Mr. Hirl's desire to begin phased retirement. Under his
agreement, Mr. Hirl continued to serve as the President and Chief Executive
Officer of Occidental Chemical Corporation through December 31, 2001. From
January 1, 2002 until his retirement on June 30, 2003, he will continue to serve
as an Executive Vice President of Occidental. During the term of the agreement,
Mr. Hirl will receive an annual salary of not less than $660,000. If Mr. Hirl's
employment is terminated as a result of incapacity and he is a participant in
and qualifies for benefits under Occidental's Long-Term Disability Plan,
Occidental will pay Mr. Hirl the difference between 60 percent of his annual
salary and the maximum annual disability benefit, for so long as he remains
eligible to receive disability benefits. In the event he is terminated without
cause, Mr. Hirl will receive his then current base salary rate for the remaining
term of his agreement and will continue to be eligible to participate in all
employee benefit plans available to salaried employees and senior executives and
to exercise options previously granted him that are or become exercisable.
Following his retirement and if he executes the consulting agreement annexed to
his agreement, Mr. Hirl will continue as a consultant to Occidental until June
30, 2005, at an annual salary of $200,000.
MR. CHAZEN
Mr. Chazen has an employment agreement with Occidental for a term expiring
in October 2005, providing for an annual salary of not less than $572,000. If
Mr. Chazen's employment is terminated as a result of incapacity and he is a
participant in and qualifies for benefits under Occidental's Long-Term
Disability Plan, Occidental will pay Mr. Chazen the difference between 60
percent of his annual salary and the maximum annual disability benefit, for so
long as he remains eligible to receive disability benefits. In the event he is
terminated without cause, Mr. Chazen will receive an amount equal to twice the
sum of his highest base salary and annual cash bonus target, which amount is
payable over a two-year compensation period. During the compensation period, Mr.
Chazen will continue to be eligible to participate in all employee benefit plans
available to salaried employees and senior executives and to exercise options
previously granted him that are or become exercisable. Following the
compensation period, Mr. Chazen will continue as a consultant to Occidental
until October 2005, at an annual salary of $50,000. During the compensation
period and any consultancy period, any stock awards granted prior to Mr.
Chazen's termination will continue to vest in the same manner and in the same
amounts as if he continued as a full-time employee. Mr. Chazen may terminate the
agreement at any time upon 60 days prior written notice.
MR. DE BRIER
Mr. de Brier has an employment agreement with Occidental for a term
expiring in May 2003, providing for an annual salary of not less than $530,000.
If Mr. de Brier's employment is terminated as a result of incapacity and he is a
participant in and qualifies for benefits under Occidental's Long-Term
Disability Plan, Occidental will pay Mr. de Brier the difference between 60
percent of his annual salary and the maximum annual disability benefit, for so
long as he remains eligible to receive disability benefits. In the event he is
terminated without cause, Mr. de Brier will receive an amount equal to twice the
sum of his highest base salary and annual cash bonus target, which amount is
payable in equal monthly installments over a two year compensation period.
During the compensation period, Mr. de Brier will continue to be eligible to
participate in all employee benefit plans available to salaried employees and
senior executives and to exercise options previously granted him that are or
become exercisable. During the compensation period, any stock awards granted
prior to Mr. de Brier's termination will continue to vest in the same manner and
in the same amounts as if he continued as a full-time employee.
REPORT OF THE EXECUTIVE COMPENSATION AND HUMAN RESOURCES COMMITTEE
The Executive Compensation and Human Resources Committee of the Board of
Directors is responsible for Occidental's executive compensation programs. The
Committee is selected from members of the Board of Directors who are Independent
Directors as defined under Occidental's Corporate Governance Policies. This
report is provided by the Committee to assist stockholders in understanding the
philosophy and objectives underlying the compensation of Occidental's senior
executives.
15
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PHILOSOPHY
Occidental's executive compensation programs are designed to attract and
retain top quality executive talent and also to provide incentives for them to
enhance stockholder value. The Committee is guided by the following principles
that are included in Occidental's Corporate Governance Policies:
o Compensation arrangements shall focus on pay for performance to
encourage the retention of employees who make significant
contributions to Occidental's performance;
o Compensation arrangements shall encourage executive stock ownership to
align the interests of management and stockholders;
o Compensation arrangements shall maintain an appropriate balance
between base salary and annual and long-term incentive opportunities;
o Decisions concerning the compensation of individual executives shall
take into consideration compensation history, including any special
compensation payments.
o The Committee shall link pay to the achievement of financial goals set
in advance for any senior management cash incentive compensation
plans;
o The Committee shall set annual and long-term performance goals for the
Chairman of the Board and Chief Executive Officer and evaluate his
performance against such goals and the performance of Occidental's
peer companies; and
o The Committee shall hold an executive session at least once a year at
which employee directors are not present.
Occidental is committed to the principle of pay-for-performance. The
compensation programs described below link executive compensation to business
performance that in turn enhances stockholder value.
EXECUTIVE COMPENSATION PROGRAMS
Occidental's executive compensation programs are composed of three main
elements:
o Base salary
o Annual cash incentives
o Long-term incentives
Base salary and annual cash incentives are designed to attract and retain
top quality executives and to recognize individual performance and the
achievement of business objectives each year. The value of long-term incentives
is directly linked to the performance of the common stock and, therefore, to
total stockholder return. Long-term incentives have been granted in the form of
stock options, performance stock and restricted stock.
In evaluating Occidental's executive compensation programs, the Committee
solicits the services of outside compensation consultants and Occidental's
compensation staff regarding plan design and industry pay practices. Occidental
participates in several compensation surveys each year that are conducted by
third-party compensation consulting firms. A number of these surveys are focused
primarily on major U.S. oil and chemical companies (including companies within
the peer groups selected for the graph presented under the subheading
"Performance Graph").
CASH COMPENSATION
In determining base salary levels, Occidental maintains an administrative
framework of job levels into which positions are assigned based on internal
comparability and external market data. Base salaries and the other components
of compensation are reviewed annually and adjusted as appropriate to reward
performance and maintain our competitive position. From time to time, other
forms of compensation may be utilized in lieu of an annual adjustment.
16
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Since 1995, cash incentive awards have been granted under the Occidental
Petroleum Corporation Executive Incentive Compensation Plan. Participation is
determined by job level and is intended to reward individuals who have a
significant impact on business performance. Under the Executive Incentive
Compensation Plan, 60 percent of a participant's award is based on the
attainment of predetermined financial objectives by Occidental and its
subsidiaries and 40 percent is based on a subjective assessment of the
participant's achievement of predetermined individual performance objectives and
the participant's response to unanticipated challenges during the plan year.
LONG-TERM INCENTIVES
The Committee grants long-term incentive awards, generally in the form of
stock options, restricted stock or performance stock grants, based on its
assessment of an executive's contributions and potential to influence
Occidental's future performance. The Committee believes that long-term awards
should create a long-term incentive to increase stockholder value and provide a
retention vehicle for key executives. The Committee also believes that such
stock-based compensation encourages executives to view Occidental from the
stockholders' perspective.
EMPLOYMENT AGREEMENTS
Occidental offers employment agreements to key executives only when it is
in the best interest of Occidental and its stockholders to attract and retain
such key executives and to ensure continuity and stability of management. In
accordance with a policy adopted by the Board of Directors in September 1992, no
employment agreements with new executives will contain provisions, commonly
referred to as "golden parachutes," that provide for additional severance
benefits in the event of a change in control. For a summary of the employment
agreements for the named executive officers, see "Employment Agreements"
beginning at page 13.
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code limits the deduction of
compensation paid to the chief executive officer and other named executive
officers to the extent the compensation of a particular executive exceeds $1
million, unless such compensation is based upon stock price appreciation over
market value at the date of grant (in the case of stock options) or
predetermined quantifiable performance goals (in the case of other incentive
compensation) or paid pursuant to a written contract that was in effect on
February 17, 1993. Although the Committee considers the tax consequences of its
compensation decisions, it is not the policy of the Committee to pay only
deductible compensation, rather the Committee gives priority to other objectives
in circumstances it deems appropriate.
2001 COMPENSATION DECISIONS
In December 2000, the Executive Compensation and Human Resources Committee
approved, effective January 1, 2001, industry-competitive salary increases for
the named executive officers to acknowledge personal accomplishments and
excellent performance during 2000. Dr. Irani received a 4% salary increase. The
Committee also increased bonus targets for performance during 2001 for two of
the named executive officers to reflect competitive practice for senior
executive officers in peer companies in the oil and chemical industries. Dr.
Irani's bonus target was increased from 85% to 100% of his base salary.
Also in December 2000, the Committee granted, effective January 1, 2001,
performance stock awards under the 1995 Incentive Stock Plan. In granting awards
to the named executives, the Committee considered overall contributions,
competitive practices among peer companies in the oil industry, and each
executive's potential to affect Occidental's future performance. The performance
stock award for Dr. Irani, in the amount of 75,052 shares, is consistent with
awards to similarly compensated executive officers of peer companies in the oil
industry.
In addition, in December 2000, the Committee established primary
performance goals for Dr. Irani for 2001. The goals included key financial
objectives, the enhancement of the long-term value of Occidental's portfolio of
assets, the improvement of earnings through on-going business growth, decreased
operating and overhead
17
[OXY LOGO]----------------------------------------------------------------------
costs, debt reduction, and cash generation from certain business segments, and
the maintenance of a high performing organization through continued emphasis on
corporate-wide leadership training and enhanced communications.
In April 2001, the Committee reviewed and approved a restatement of
Occidental's Executive Incentive Compensation Plan, the annual bonus plan for
executives. The restatement covers eligibility for participation; the
establishment of target awards, payout ranges, and performance measures; the
payment of awards; and required approvals. The Committee also approved
amendments to Occidental's Deferred Compensation Plan and Supplemental
Retirement Plan. In addition, the Committee approved an amendment to the 2001
Incentive Compensation Plan to clarify and confirm that any stock options
granted by Occidental will not be repriced, replaced, or regranted through
cancellation, or by lowering the option exercise price of a previously granted
award, without shareholder approval.
In July 2001, the Committee reviewed and approved annual stock option
grants under the 2001 Incentive Compensation Plan. Grants were based on
competitive practices in the oil and chemical industries, as well as a
subjective assessment of each executive's individual performance and potential
to contribute to Occidental's future performance. The Committee approved a grant
of non-qualified and qualified stock options to Dr. Irani in the amount of
1,300,000 shares, in recognition of Dr. Irani's leadership role in sustaining
Occidental's high performance levels.
In November 2001, the Committee reviewed and approved a new employment
agreement for Mr. Hirl, whereby Mr. Hirl agreed to serve as Executive Vice
President of Occidental Petroleum through June 30, 2003, after which Mr. Hirl
will retire from Occidental and serve as a consultant to the Company through
June 30, 2005. A summary of the employment contract is set forth on page 15.
In December 2001, the Committee and the Lead Independent Director reviewed
Dr. Irani's performance goals and objectives for 2001 and noted Dr. Irani's
significant accomplishments during 2001 in improving corporate earnings and
reducing debt and overhead costs. The Committee also considered salary increases
for the named executive officers for 2002 and decided that restricted stock
awards should be granted, effective December 12, 2001, in lieu of salary
increases. The approved awards reflected individual contributions, Occidental's
outstanding business results, competitive survey data, and the impact of the
forfeited salary increase on annual bonus opportunities, retirement and savings
plan contributions, performance stock incentives, and other benefits. Dr. Irani
was awarded a restricted stock award of 90,000 shares.
In February 2002, the Committee reviewed annual bonus awards for 2001. As
described above, awards under the Executive Incentive Compensation Plan to the
named executive officers, including Dr. Irani, are based on the achievement of
predetermined financial goals (60%), including earnings per share, and the
achievement of predetermined individual goals (40%). Because of the achievement
in 2001 of the Company's financial goals and his individual goals as noted
above, Dr. Irani received a cash bonus award of $2,600,000.
In February 2002, the Committee also certified the payouts to be made under
the 1995 Incentive Stock Plan for performance stock awards granted in January
1998, for which the performance period ended December 31, 2001. In certifying
the awards, the Committee modified the awards to adjust for the fact that
certain of the peer group companies listed in the award agreements had merged or
ceased to exist by the end of the performance period. The awards to "covered
employees" are reflected in the Summary Compensation Table on page 9. Dr. Irani
received a payment of 47,488 shares of stock from his 1998 performance stock
award.
Respectfully submitted,
EXECUTIVE COMPENSATION AND HUMAN RESOURCES COMMITTEE
Irvin W. Maloney (chairman)
Ronald W. Burkle
John S. Chalsty
Rosemary Tomich
18
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PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total return of the common stock with the cumulative total return of the
Standard & Poor's 500 Stock Index and with that of the original peer group and
the revised peer group over the five-year period ending on December 31, 2001.
The graph assumes that $100 was invested in Occidental common stock, in the
stock of the companies in the Standard & Poor's 500 Index and in the stocks of
the peer group companies just prior to the commencement of the period (December
31, 1996) and that all dividends received within a quarter were reinvested in
that quarter. The original peer group companies are Anadarko Petroleum
Corporation, Burlington Resources Inc., Conoco Inc., Georgia Gulf Corporation,
Kerr-McGee Corporation, Lyondell Petrochemical Corporation, Occidental, Phillips
Petroleum Corporation and Unocal Corporation. The revised peer group companies
are Amerada Hess Corporation, Anadarko Petroleum Corporation, Burlington
Resources Corporation, Georgia Gulf Corporation, Kerr McGee Corporation,
Lyondell Petrochemical Corporation, Occidental, Phillips Petroleum Corporation
and Unocal Corporation. Occidental revised the peer group to substitute Amerada
Hess Corporation for Conoco, Inc. which is in the process of merging with
Phillips Petroleum Corporation.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
OF OCCIDENTAL COMMON STOCK, THE S&P 500 INDEX AND SELECTED PEER GROUPS
[graphic omitted]
[the table below is a tabular representation of graphical materials]
12/31/96 12/31/97 12/31/98 12/31/99 12/29/00 12/31/01
-------- -------- -------- -------- -------- --------
Occidental $ 100 $ 130 $ 78 $ 105 $ 124 $ 141
Revised Peer Group 100 106 80 96 121 113
Current Peer Group 100 107 78 97 123 116
S&P 500 100 133 171 208 189 166
19
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AUDIT AND OTHER FEES
------------
AUDIT FEES
The aggregate fees incurred for professional services rendered by Arthur
Andersen LLP for the audit of Occidental's annual financial statements for the
fiscal year ended December 31, 2001 and for the reviews of the financial
statements included in Occidental's Quarterly Reports on Form 10-Q for that
fiscal year were $3,906,000.
AUDIT RELATED FEES
Fees of $1,164,000 were incurred for professional services rendered by
Arthur Andersen LLP for the fiscal year ended December 31, 2001, for audit
related services, including statutory and subsidiary audits, employee benefit
plan audits, and accounting research assistance and structure review on proposed
transactions such as financings and acquisitions.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
No fees were incurred for professional services rendered by Arthur Andersen
LLP for information technology services relating to financial information system
design and implementation for the fiscal year ended December 31, 2001.
ALL OTHER FEES
The aggregate fees incurred for services rendered by Arthur Andersen LLP to
Occidental, other than the services described above under "Audit Fees", "Audit
Related Fees" and "Financial Information System Design and Implementation Fees",
for the fiscal year ended December 31, 2001 were $4,885,000, which includes
$2,000,000 for internal audit assistance and $1,000,000 for assistance in
integrating operations following an acquisition in April 2000 and the balance
primarily for tax related services. Occidental will use Ernst & Young LLP
instead of Arthur Andersen LLP for internal audit assistance beginning in 2002.
REPORT OF THE AUDIT COMMITTEE
------------
The Audit Committee has reviewed and discussed Occidental's audited
financial statements for the fiscal year ended December 31, 2001 with
management. In addition, the Audit Committee has discussed with Arthur Andersen
LLP, Occidental's independent public accountants, the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended and as currently in effect. The Audit Committee received
from Arthur Andersen LLP written disclosures and the letter regarding its
independence as required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, as amended and as currently in
effect. The Audit Committee has also considered whether the provision of
non-audit services provided by Arthur Andersen LLP to Occidental is compatible
with maintaining their independence and has discussed with the auditors the
auditors' independence.
Based upon the reports and discussions described in this report, the Audit
Committee recommended to the Board that the audited financial statements be
included in Occidental's Annual Report on Form 10-K for the year ended December
31, 2001, to be filed with the Securities and Exchange Commission.
Respectfully submitted,
THE AUDIT COMMITTEE
Rosemary Tomich (chairman)
Irvin W. Maloney
Aziz D. Syriani
20
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SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
------------
The Audit Committee of the Board of Directors of Occidental is reviewing
the selection of independent public accountants to audit the consolidated
financial statements of Occidental and its subsidiaries for the year ending
December 31, 2002, in light of the recent indictment of Arthur Andersen LLP.
Arthur Andersen LLP has audited Occidental's financial statements annually since
1961. A member of that firm is expected to be present at the annual meeting,
will have an opportunity to make a statement if so desired and will be available
to respond to appropriate questions.
STOCKHOLDER PROPOSALS
------------
Occidental has been advised by four holders of common stock of their
intention to introduce at the annual meeting the following proposals and
supporting statements. The Board of Directors disclaims any responsibility for
the content of the proposals and for the statements made in support thereof,
which are presented as received from the stockholders.
PROPOSAL 2: POLICY ON POISON PILLS
Mr. Emil Rossi of Boonville, California, the owner of 415 shares of common
stock, has notified Occidental that he intends to present the following proposal
at the 2002 annual meeting.
"Occidental shareholders request that our Board of Directors adopt a
meaningful shareholder vote policy on poison pills. This consistent single
policy includes a shareholder vote prior to adopting any poison pill and also
redemption or termination of any pill now in effect unless it has been approved
by a shareholder vote at the next shareholder meeting.
The poison pill is an important issue for shareholder vote even if our
company does not now have a poison pill or plan to adopt a poison pill in the
future. Currently our Board can adopt a poison pill and/or redeem a current
poison pill and adopt a new poison pill: 1) At any time 2) In a short period of
time 3) Without shareholder approval
NEGATIVE EFFECTS OF POISON PILLS ON SHAREHOLDER VALUE
A study by the Securities and Exchange Commission found evidence that the
negative effect of poison pills to deter profitable takeover bids outweigh
benefits.
Source: Office of the Chief Economist, Securities and Exchange Commission,
The Effect of Poison Pills on the Wealth of Target Shareholders, October 23,
1986.
ADDITIONAL SUPPORT FOR THIS PROPOSAL TOPIC:
o Pills adversely affect shareholder value.
"Even though [the pills] are designed as protection and not intended ever
to be triggered, the pills are poison, indeed. The basic function of pills is,
simply stated, to confront a hostile purchaser with immediate and unacceptable
dilution of the value of his investment. The pill is a `doomsday device,' with
such potent wealth destroying characteristics ..."
Power and Accountability
Robert Monks and Nell Minow
Chapter 2, page 49 after "1,000 Poison Pills" heading.
Source: www.thecorporatelibrary.com/power
21
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o The Council of Institutional Investors
www.ciiorg/ciicentral/policies.htm & www.cii.org
recommends shareholder approval of all poison pills.
INSTITUTIONAL INVESTOR SUPPORT
Many institutional investors believe poison pills should be submitted for a
vote by shareholders. Institutional investors include:
1. Teachers Insurance and Annuity Association College Retirement Equities
Fund (TIAA-CREF) Source: TIAA-CREF Policy Statement on Corporate
Governance
2. California Public Employees Retirement System (CalPERS) Source:
CalPERS U.S. Corporate Governance Principles. IV. Governance
Guidelines, D. Shareholder Rights.
A poison pill is such a powerful tool that shareholders should be able to
vote on whether it is appropriate. We believe a shareholder vote on poison pills
will avoid an unbalanced concentration of power in our directors who could focus
on narrow interests at the expense of the vast majority of shareholders.
INSTITUTIONAL INVESTOR SUPPORT IS HIGH-CALIBER SUPPORT
Additional evidence of significant institutional support is the sponsorship
by institutional investors such as TIAA-CREF, Gamco Investors and the New York
State Retirement Fund of their own proposals on this same topic. Shareholder
right to vote on poison pill resolutions achieved a 57% average yes-vote from
shareholders at 26 major companies in 2000.
Source: IRRC /Average Voting Results, 9/27/00.
Institutional investor support is high-caliber support. Institutional
investors have the advantage of a specialized staff and resources, long-term
focus, fiduciary duty and independent perspective to thoroughly study the issues
involved in this proposal topic.
68% VOTE AT A MAJOR COMPANY
This proposal won 68% of the yes-no vote at the Burlington Northern Santa
Fe (BNI) 2001 annual meeting. The text of the BNI proposal and 68%-vote data is
available at the Securities and Exchange Commission website under EDGAR
Archives: BNI 2001 reports DEF 14 and 10-Q.
SHAREHOLDER VOTE PRECEDENT SET BY OTHER COMPANIES
In recent years, various companies have given shareholders a meaningful
vote on this topic. Our company should do so as well.
In the interest of shareholder value vote yes:
SHAREHOLDER VOTE ON POISON PILLS
YES ON 2
THE BOARD OF DIRECTORS' STATEMENT IN OPPOSITION
Occidental does not currently have a poison pill. However, the Board of
Directors feels that it is in the best interests of Occidental and its
stockholders that the Board of Directors retain the flexibility to adopt an
anti-takeover provision if and when necessary.
A study by Georgeson Shareholder Communications Inc showed that between
1992 and 1996, stockholders of companies with "poison pills" received
significantly higher value than companies without them. (Georgeson Shareholder
Communications Inc., "Mergers & Acquisitions: Poison Pills and Shareholder
Value/1992-1996," 1997). Rather than harm shareholder value, as has been
suggested by the proponent, the ability to adopt an anti-takeover provision
would give Occidental a better position from which to bargain with a potential
buyer. This better bargaining position should lead to a higher value for
stockholders.
The Board of Directors has a fiduciary duty to act in the best interests of
Occidental and its stockholders. Any decision to adopt an anti-takeover
provision, such as a poison pill, would be made only after deliberation by the
22
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Board. The Board is in the best and most informed position to evaluate and
consider whether circumstances call for the adoption of an anti-takeover
provision in order to protect Occidental and its stockholders.
Accordingly, the Board of Directors recommends a vote AGAINST Proposal 2.
Proxies solicited by the Board of Directors will be so voted unless stockholders
specify otherwise in the proxy card.
PROPOSAL 3: REPORT ON GLOBAL WARMING EMISSIONS
Walden/BBT Domestic Social Index Fund, 40 Court Street, Boston,
Massachusetts 02108, the owner of 1100 shares of common stock, The Sinsinawa
Dominicans, 7200 W. Division Street, River Forest, Illinois 60305, the owner of
100 shares of common stock, and The Needmor Fund, 275 South Main Street, Suite
206, Longmont, Colorado 80501 the owner of 1100 shares of common stock, have
each notified Occidental that they intend to present the following proposal at
the 2002 annual meeting.
"WHEREAS:
o The Intergovernmental Panel on Climate Change has found "new and stronger
evidence that most of the warming observed over the last 50 years is
attributed to human activity." (See www.ipcc.ch/Climate Change 2001: The
Scientific Basis/Summary for Policymakers)
o Growing evidence indicates that environmental damage from fossil fuel
burning will be major and worldwide. Threats to human health and habitats
include (See www.ipcc.ch/Climate Change 2001: Impacts, Adaptations and
Vulnerability/Summary for Policymakers)
o widespread increase in the risk of floods inundating the homes of tens
of millions of people, resulting in increased drowning, disease and,
in developing countries, hunger; increases, in some geographic areas,
in droughts, floods, landslides, storms, and incidences of water-borne
(cholera) and vector-borne (malaria) diseases; and irreversible damage
to vulnerable ecosystems, with increased risk of extinction of more
vulnerable species and loss of biodiversity.
o In July 2001, 178 nations signed the Bonn agreement, requiring
industrialized nations to reduce greenhouse emissions to 5.2% less than
1990 levels, by 2008. (Wall Street Journal, 7/24/01)
o Dupont's CEO stated, "We are preparing our company for a long journey to a
more climate- friendly...global economy. We have already reduced our global
greenhouse gases by nearly 60%, [and are] committed to...setting new goals
for 2010: reducing global carbon-equivalent greenhouse gas emissions by 65%
[from 1990 levels]; holding total energy use flat [at 1990 levels]; and
using renewable resources for 10% of our global energy use." (11/00)
o Major automakers are developing alternative non-combustion engines and
technologies to reduce vehicles' fossil fuel demands. Ford's Chairman has
said, "We are committed to an improvement in fuel economy for all of our
vehicles... [and] a reduction in carbon dioxide emissions. We know
greenhouse gases and global temperatures are increasing." (4/14/00)
o Royal Dutch/Shell and BP have invested in renewables for years. Royal
Dutch/Shell added a penalty of $5/ton of carbon produced when evaluating
investment returns on new projects, anticipating more stringent
carbon-related regulatory regimes. (Financial Times, 9/12/00)
o Companies with top-rated environmental records are faring significantly
better financially than those with worse records. From 1997-2000, they had
3.53% higher annual returns on investment than a broader universe of
companies, and 7.80% higher annual returns than companies with low-rated'
environmental records. (QED International, 2001)
o Thirty-nine top religious leaders stated, "... global warming is a
scientific fact .... More investment in renewable energy and fuel
efficiency is now a moral imperative, especially because these are
technologically feasible and economically viable." (National Council of
Churches, 5/21/01)
23
[OXY LOGO]----------------------------------------------------------------------
o We believe that good stewardship of our resources requires that we reduce
polluting emissions when possible and prudent.
RESOLVED: That the Company report to shareholders (at reasonable cost and
omitting proprietary information) by August 2002 on (a) total annual greenhouse
gas emissions (i) from our company's own operations and (ii) from its products
(as best as the Company can estimate); and (b) an estimate of the feasibility
and cost of substantially reducing these emissions, together with an evaluation
of whether our Company would need such changes to be made on an industry-wide
basis and, if so, how that could be accomplished."
THE BOARD OF DIRECTORS' STATEMENT IN OPPOSITION
Occidental makes available to its stockholders an Annual Report on Health,
Environment and Safety (the "HES Report"). In the HES Report for 2000,
Occidental explained that it is monitoring the global warming issue, provided an
estimate of Occidental's carbon dioxide emissions from its worldwide operations
and described some of the measures that the Company has implemented to improve
the energy efficiency of its operations. To the extent that there are
legislative changes related to the global warming issue that materially impact
how Occidental conducts its business or the products it sells, Occidental will
discuss those impacts either in its annual HES report or in its annual and
quarterly reports filed with the Securities and Exchange Commission. An
additional report of the type requested by the proponent would be duplicative
and unnecessary.
Moreover, the Board believes that, given the lack of consensus within the
scientific community regarding the climate change issue and the lack of
economically viable substitutes for fossil fuels to satisfy the world's energy
needs, any special report attempting to quantify potential financial effects on
Occidental would be entirely speculative and, consequently, of little, if any,
value. Occidental is not in a position to assess the costs of compliance with
legislation that has not been enacted, or potential damages to as yet unknown
parties.
Accordingly, the Board of Directors recommends a vote AGAINST Proposal 3.
Proxies solicited by the Board of Directors will be so voted unless stockholders
specify otherwise in the proxy card.
STOCKHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING OF STOCKHOLDERS
------------
Stockholders interested in submitting a proposal for inclusion in the proxy
statement and proxy card relating to the 2003 Annual Meeting of Stockholders may
do so by following the procedures in Rule 14a-8 under the Securities Exchange
Act of 1934. To be eligible for inclusion, stockholder proposals must be
addressed to Occidental's Secretary at 10889 Wilshire Boulevard, Los Angeles,
California 90024, and be received no later than November 19, 2002.
Under Occidental's By-laws, stockholders must follow certain procedures to
introduce an item of business at an annual meeting that is not included in the
proxy materials. These procedures provide that an item of business to be
introduced at an annual meeting must be submitted in writing to the Secretary at
10889 Wilshire Boulevard, Los Angeles, California 90024. Notice of the proposed
item of business must be received no later than January 31, 2003. Notice of the
proposed item of business must include the information required by Occidental's
By-laws.
In either case, the stockholder submitting the proposal or a representative
of the stockholder must present the proposal in person at the meeting.
The chairman of the meeting may refuse to allow the transaction of any item
of business not presented in compliance with Occidental's By-laws. In addition,
the proxies solicited on behalf of the Board of Directors will have
discretionary authority to vote against any such item of business.
24
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NOMINATIONS FOR DIRECTORS FOR TERM EXPIRING 2004
------------
The Nominating and Corporate Governance Committee will consider nominees
recommended by stockholders if the stockholder recommendations are forwarded to
the Secretary of Occidental and are otherwise in compliance with Occidental's
By-laws. Under Occidental's By-laws, nominations for directors, other than those
made by the Board of Directors, must be received 70 to 90 days prior to the
anniversary date of the prior year's annual meeting. If the meeting date is not
within 30 days of the anniversary date, the nomination must be received not
later than the tenth day following the earlier of the day on which the notice of
the meeting date was mailed or the day public disclosure of the new date was
made. The stockholder's nomination must include the information required by the
By-laws.
CORPORATE GOVERNANCE POLICIES
------------
A copy of Occidental's corporate governance policies or Occidental's Code of
Business Conduct is available upon request by writing to Occidental.
ANNUAL REPORT
------------
Occidental's 2001 Annual Report on Form 10-K is concurrently being mailed
to stockholders. The Annual Report contains consolidated financial statements of
Occidental and its subsidiaries and the report thereon of Arthur Andersen LLP,
independent public accountants.
Sincerely,
/s/ DONALD P. DE BRIER
Donald P. de Brier
Secretary
Los Angeles, California
March 19, 2002
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. PLEASE COMPLETE, SIGN, DATE
AND RETURN THE ACCOMPANYING FORM OR FORMS OF PROXY IN THE ENCLOSED ENVELOPE OR
FOLLOW THE PROCEDURES OUTLINED ON THE CARD TO VOTE BY TELEPHONE OR INTERNET.
25
(PROXY CARD)
The shares represented by this proxy card will be voted as directed below. WHERE
NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSAL 1 AND AGAINST
PROPOSALS 2 AND 3. THIS PROXY CARD WILL BE KEPT CONFIDENTIAL IN ACCORDANCE WITH
THE CONFIDENTIAL VOTING POLICY DESCRIBED ON PAGE 1 OF THE PROXY STATEMENT.
Please mark
[ X ] your votes
as this
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR PROPOSAL 1. FOR WITHHELD
ALL FOR ALL
PROPOSAL 1 The election as directors of the
following nominees: [ ] [ ]
(01) Ronald W. Burkle (06) Dale R. Laurance
(02) John S. Chalsty (07) Irvin W. Maloney
(03) Edward P. Djerejian (08) Rodolfo Segovia
(04) John E. Feick (09) Aziz D. Syriani
(05) Ray R. Irani (10) Rosemary Tomich
(To withhold authority to vote for any nominee(s), mark For all and write
nominee(s) name(s) in the space provided below.)
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 2 AND 3.
FOR AGAINST ABSTAIN
PROPOSAL 2 Policy on [ ] [ ] [ ]
poison pills.
PROPOSAL 3 Report on [ ] [ ] [ ]
global warming emissions.
IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW
Please sign your name exactly as it appears printed hereon. When shares are held
by joint tenants, both should sign. Executors, administrators, guardians,
officers of corporations and others signing in a fiduciary capacity should sign
their full title as such.
Signature Date
------------------------------------------ -----------------------
Signature Date
------------------------------------------ -----------------------
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
VOTE BY INTERNET, TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
INTERNET
HTTP://WWW.EPROXY.COM/OXY
Use the Internet to vote your proxy.
Have your proxy card in hand when you
access the web site. You will be prompted
to enter your control number, located in
the box below, to create and submit an
electronic ballot.
OR
TELEPHONE
1-800-435-6710
Use any touch-tone telephone to
vote your proxy. Have your proxy card
in hand when you call. You will be
prompted to enter your control number,
located in the box below, and then follow
the directions given.
OR
MAIL
Mark, sign and date your proxy card and
return it in the enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
Bring this admission ticket with you to the meeting on May 3. Do not mail.
[OXY LOGO] OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
This admission ticket admits you and ONE guest to the meeting. You will NOT be
let in to the meeting without an admission ticket or other proof of stock
ownership as of March 8, 2002, the record date.
GRAND BALLROOM MEETING HOURS
The St. Regis Hotel Registration begins 9:30 A.M.
2055 Avenue of the Stars Refreshments from 9:30 to 10:30 A.M.
Los Angeles, California Meeting starts at 10:30 A.M.
ADMISSION TICKET
Please see the back of this card for parking instructions.
1265-A (SOR)
(REVERSE SIDE OF PROXY CARD)
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
OCCIDENTAL PETROLEUM CORPORATION
DR. RAY R. IRANI, DR. DALE R. LAURANCE and AZIZ D. SYRIANI, and each of
them, with full power of substitution, are hereby authorized to represent and to
vote the shares of the undersigned in OCCIDENTAL PETROLEUM CORPORATION as
directed on the reverse side of this card and, in their discretion, on all other
matters which may properly come before the Annual Meeting of Stockholders to be
held on May 3, 2002, and at any adjournment, as if the undersigned were present
and voting at the meeting.
The shares represented by this proxy will be voted as directed on the
reverse side of this card. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE
VOTED FOR PROPOSAL 1 AND AGAINST PROPOSALS 2 AND 3. In the event any of the
nominees named on the reverse side of this card is unavailable for election or
unable to serve, the shares represented by this proxy may be voted for a
substitute nominee selected by the Board of Directors.
Your proxy will be kept confidential in accordance with the Confidential
Voting Policy described on page 1 of the Proxy Statement.
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
VOTE BY INTERNET, TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
INTERNET
HTTP://WWW.EPROXY.COM/OXY
Use the Internet to vote your proxy.
Have your proxy card in hand when you
access the web site. You will be prompted
to enter your control number, located in
the box on the reverse side, to create and
submit an electronic ballot.
OR
TELEPHONE
1-800-435-6710
Use any touch-tone telephone to
vote your proxy. Have your proxy card
in hand when you call. You will be
prompted to enter your control number,
located in the box on the reverse side,
and then follow the directions given.
OR
MAIL
Mark, sign and date your proxy card and
return it in the enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
DIRECTIONS TO THE ST. REGIS HOTEL
AND PARKING FOR STOCKHOLDERS
o From either direction on the 405 (San Diego Freeway),
take the Santa Monica Boulevard exit East.
o Proceed to Avenue of the Stars and turn right.
o Continue on Avenue of the Stars. Hotel will be on the
right at Olympic Way.
o Enter Hotel parking driveway.
THE PARKING FEE AT THE ST. REGIS HOTEL WILL BE
PAID BY OCCIDENTAL PETROLEUM CORPORATION.
(VOTING INSTRUCTION CARD - OCCIDENTAL PETROLEUM CORPORATION SAVINGS PLAN)
The shares represented by this voting instruction card will be voted as directed
below. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSAL 1 AND
AGAINST PROPOSALS 2 AND 3. IN ACCORDANCE WITH THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, YOUR VOTE MUST BE KEPT CONFIDENTIAL BY THE TRUSTEE.
Please mark
[ X ] your votes
as this
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEM 1. FOR WITHHELD
ALL FOR ALL
PROPOSAL 1 The election as directors of the
following nominees: [ ] [ ]
(01) Ronald W. Burkle (06) Dale R. Laurance
(02) John S. Chalsty (07) Irvin W. Maloney
(03) Edward P. Djerejian (08) Rodolfo Segovia
(04) John E. Feick (09) Aziz D. Syriani
(05) Ray R. Irani (10) Rosemary Tomich
(To withhold authority to vote for any nominee(s), mark For all and write
nominee(s) name(s) in the space provided below.)
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 2 AND 3.
FOR AGAINST ABSTAIN
PROPOSAL 2 Policy on [ ] [ ] [ ]
poison pills.
PROPOSAL 3 Report on [ ] [ ] [ ]
global warming emissions.
IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW
Please sign your name exactly as it appears printed hereon. Executors,
administrators, guardians, officers of corporations and others signing in a
fiduciary capacity should sign their full title as such.
Signature Date
------------------------------------------ -----------------------
Signature Date
------------------------------------------ -----------------------
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
VOTE BY INTERNET, TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
INTERNET
HTTP://WWW.EPROXY.COM/OXY
Use the Internet to vote your proxy.
Have your proxy card in hand when you
access the web site. You will be prompted
to enter your control number, located in
the box below, to create and submit an
electronic ballot.
OR
TELEPHONE
1-800-435-6710
Use any touch-tone telephone to
vote your proxy. Have your proxy card
in hand when you call. You will be
prompted to enter your control number,
located in the box below, and then follow
the directions given.
OR
MAIL
Mark, sign and date your proxy card and
return it in the enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
Bring this admission ticket with you to the meeting on May 3. Do not mail.
[OXY LOGO] OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
This admission ticket admits you and ONE guest to the meeting. You will NOT be
let in to the meeting without an admission ticket or other proof of stock
ownership as of March 8, 2002, the record date.
GRAND BALLROOM MEETING HOURS
The St. Regis Hotel Registration begins 9:30 A.M.
2055 Avenue of the Stars Refreshments from 9:30 to 10:30 A.M.
Los Angeles, California Meeting starts at 10:30 A.M.
ADMISSION TICKET
Please see the back of this card for parking instructions.
1265-B (PSA)
(REVERSE SIDE OF VOTING INSTRUCTION CARD)
OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO THE TRUSTEE OF THE OCCIDENTAL PETROLEUM CORPORATION SAVINGS PLAN:
I acknowledge receipt of the Notice of Annual Meeting of Stockholders of
Occidental Petroleum Corporation to be held on May 3, 2002, and the Proxy
Statement furnished in connection with the solicitation of proxies by
Occidental's Board of Directors. You are directed to vote the shares which are
held for my account pursuant to the Occidental Petroleum Corporation Savings
Plan in the manner indicated on the reverse side of this card and, in your
discretion, on all other matters which may properly come before such meeting and
at any adjournment.
My vote for the election of directors is indicated on the reverse side.
Nominees are: Dr. Ray R. Irani, Dr. Dale R. Laurance, Messrs. Ronald W.
Burkle,, John S. Chalsty, Edward P. Djerejian, John E. Feick, Irvin W. Maloney,
Rodolfo Segovia, and Aziz D. Syriani and Miss Rosemary Tomich. In the event any
of the foregoing nominees is unavailable for election or unable to serve, shares
represented by this card may be voted for a substitute nominee selected by the
Board of Directors.
I UNDERSTAND THAT IN THE EVENT THAT I DO NOT RETURN THIS CARD, ANY SHARES
HELD FOR MY ACCOUNT IN THE OCCIDENTAL PETROLEUM CORPORATION SAVINGS PLAN WILL BE
VOTED BY YOU IN ACCORDANCE WITH THE DIRECTION OF THE PLAN'S ADMINISTRATIVE
COMMITTEE.
- --------------------------------------------------------------------------------
/\ SIGN, DETACH AND RETURN /\
[OXY LOGO]
IN ACCORDANCE WITH THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, YOUR VOTE MUST BE
KEPT CONFIDENTIAL BY THE TRUSTEE.
\/ DETACH AND BRING TO ANNUAL MEETING \/
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
DIRECTIONS TO THE ST. REGIS HOTEL
AND PARKING FOR STOCKHOLDERS
o From either direction on the 405 (San Diego Freeway),
take the Santa Monica Boulevard exit East.
o Proceed to Avenue of the Stars and turn right.
o Continue on Avenue of the Stars. Hotel will be on the
right at Olympic Way.
o Enter Hotel parking driveway.
THE PARKING FEE AT THE ST. REGIS HOTEL WILL BE
PAID BY OCCIDENTAL PETROLEUM CORPORATION.
(VOTING INSTRUCTION CARD - BROKER)
The shares represented by this voting instruction card will be voted as directed
below. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSAL 1 AND
AGAINST PROPOSALS 2 AND 3. THIS VOTING INSTRUCTION CARD WILL BE KEPT
CONFIDENTIAL IN ACCORDANCE WITH THE CONFIDENTIAL VOTING POLICY DESCRIBED ON PAGE
1 OF THE PROXY STATEMENT.
Please mark
[ X ] your votes
as this
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR PROPOSAL 1. FOR WITHHELD
ALL FOR ALL
PROPOSAL 1 The election as directors of the
following nominees: [ ] [ ]
(01) Ronald W. Burkle (06) Dale R. Laurance
(02) John S. Chalsty (07) Irvin W. Maloney
(03) Edward P. Djerejian (08) Rodolfo Segovia
(04) John E. Feick (09) Aziz D. Syriani
(05) Ray R. Irani (10) Rosemary Tomich
(To withhold authority to vote for any nominee(s), mark For all and write
nominee(s) name(s) in the space provided below.)
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 2 AND 3.
FOR AGAINST ABSTAIN
PROPOSAL 2 Policy on [ ] [ ] [ ]
poison pills.
PROPOSAL 3 Report on [ ] [ ] [ ]
global warming emissions.
Please sign your name exactly as it appears printed hereon. When shares are held
by joint tenants, both should sign. Executors, administrators, guardians,
officers of corporations and others signing in a fiduciary capacity should sign
their full title as such.
Signature Date
------------------------------------------ -----------------------
Signature Date
------------------------------------------ -----------------------
(REVERSE SIDE OF VOTING INSTRUCTION CARD)
VOTING INSTRUCTION CARD
THIS VOTING INSTRUCTION CARD IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
OCCIDENTAL PETROLEUM CORPORATION
DR. RAY R. IRANI, DR. DALE R. LAURANCE and AZIZ D. SYRIANI, and each of
them, with full power of substitution, are hereby authorized to represent and to
vote the shares of the undersigned in OCCIDENTAL PETROLEUM CORPORATION as
directed on the reverse side of this card and, in their discretion, on all other
matters which may properly come before the Annual Meeting of Stockholders to be
held on May 3, 2002, and at any adjournment, as if the undersigned were present
and voting at the meeting.
The shares represented by this voting instruction card will be voted as
directed on the reverse side of this card. WHERE NO DIRECTION IS GIVEN, SUCH
SHARES WILL BE VOTED FOR PROPOSAL 1 AND AGAINST PROPOSALS 2 AND 3. In the event
any of the nominees named on the reverse side of this card is unavailable for
election or unable to serve, the shares represented by this proxy may be voted
for a substitute nominee selected by the Board of Directors.
If you wish to attend the Annual Meeting, you must bring proof of stock
ownership as of March 8, 2002, the record date, such as a bank or brokerage
statement or this voting instruction card.
1265-E (BRO)