SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
Amendment No. 2
Lyondell Chemical Company
------------------------------------------------------------
(Name of Issuer)
Common Stock
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(Title of Class of Securities)
552078
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(CUSIP Number)
Donald P. de Brier, Esq.
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
(310) 208-8800
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 7, 2003
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(e), 13d-1(f) or 13d-1(g), check the following box
[ ]
Page 1 of 14 Pages
CUSIP No. 552078
------
(1) Names of reporting persons. Occidental Petroleum Corporation
I.R.S. Identification Nos. of above persons (entities 95-4035997
only).
(2) Check the appropriate box if a member of a group (a)
(see instructions) (b)
(3) SEC use only.
(4) Source of funds (see instructions). OO, WC
(5) Check if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e).
(6) Citizenship or place of organization. Delaware
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power. 0
(8) Shared voting power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(9) Sole dispositive power. 0
(10) Shared dispositive power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(11) Aggregate amount beneficially owned by each 44,010,972 (including 2,700,000 shares of
reporting person regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
(13) Percent of class represented by amount in Row 24.2%
(11).
(14) Type of reporting person (see instructions). CO
Page 2 of 14 Pages
CUSIP No. 552078
------
(1) Names of reporting persons. Occidental Petroleum Investment Co.
I.R.S. Identification Nos. of above persons (entities 95-2584267
only).
(2) Check the appropriate box if a member of a group (a)
(see instructions) (b)
(3) SEC use only.
(4) Source of funds (see instructions). OO, WC
(5) Check if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e).
(6) Citizenship or place of organization. California
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power. 0
(8) Shared voting power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(9) Sole dispositive power. 0
(10) Shared dispositive power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(11) Aggregate amount beneficially owned by each 44,010,972 (including 2,700,000 shares of
reporting person regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
(13) Percent of class represented by amount in Row 24.2%
(11).
(14) Type of reporting person (see instructions). CO
Page 3 of 14 Pages
CUSIP No. 552078
------
(1) Names of reporting persons. Occidental Chemical Holding Corporation
I.R.S. Identification Nos. of above persons (entities 95-2865897
only).
(2) Check the appropriate box if a member of a group (a)
(see instructions) (b)
(3) SEC use only.
(4) Source of funds (see instructions). OO, WC
(5) Check if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e).
(6) Citizenship or place of organization. California
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power. 0
(8) Shared voting power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(9) Sole dispositive power. 0
(10) Shared dispositive power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(11) Aggregate amount beneficially owned by each 44,010,972 (including 2,700,000 shares of
reporting person regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
(13) Percent of class represented by amount in Row 24.2%
(11).
(14) Type of reporting person (see instructions). CO
Page 4 of 14 Pages
ITEM 1. SECURITY AND ISSUER.
Title of class of equity security: Series B Common Stock
Common Stock
Issuer: Lyondell Chemical Company
Address of principal executive offices: 1221 McKinney Street, Suite 700
Houston, Texas 77010
This Schedule relates to the regular Common Stock of Lyondell, the Series B
Common Stock of Lyondell, and a warrant to acquire shares of the regular Common
Stock of Lyondell. For reporting purposes, the Reporting Person has treated the
Series B Common Stock of Lyondell as being part of the same class under Section
12 of the 1934 Act as the regular Common Stock of Lyondell.
ITEM 2. IDENTITY AND BACKGROUND.
Occidental Petroleum Corporation ("Occidental"):
- ------------------------------------------------
state of organization: Delaware
principal business: engaged, through its subsidiaries and
affiliates, in the production, development
and marketing of natural resources and
chemicals
principal business address: 10889 Wilshire Boulevard
Los Angeles, California 90024
Occidental Petroleum Investment Co. ("OPIC"):
- ---------------------------------------------
state of organization: California
principal business: holding company
principal business address: 10889 Wilshire Boulevard
Los Angeles, California 90024
Occidental Chemical Holding Corporation ("OCHC"):
- -------------------------------------------------
state of organization: California
principal business: holding company
principal business address: 10889 Wilshire Boulevard
Los Angeles, California 90024
Page 5 of 14 Pages
The name, business address, and current principal occupation or employment
of each of the executive officers and directors of Occidental, OPIC and OCHC
(collectively, the "Companies") are set forth below. Unless otherwise indicated,
the business address of each such person is 10889 Wilshire Boulevard, Los
Angeles, California 90024. All such persons listed below are citizens of the
United States except Mr. Syriani, who is a citizen of Lebanon; Dr. Segovia, who
is a citizen of Colombia; and Mr. Feick, who is a citizen of Canada. Directors
of Occidental are identified by an asterisk (*).
Name and Business Address Present Principal Occupation or Employment
- ------------------------- ------------------------------------------
Ray R. Irani* Chairman of the Board and Chief Executive Officer of
Occidental
Ronald W. Burkle* Managing Partner and majority owner of The Yucaipa
9130 West Sunset Boulevard Companies
Los Angeles, California 90069
John S. Chalsty* Chairman, Muirfield Capital Management, LLC
10 Rockefeller Center, 8th Floor
New York, New York 10020
Stephen I. Chazen Chief Financial Officer and Executive Vice President -
Corporate Development of Occidental
Donald P. de Brier Executive Vice President, Secretary and General
Counsel of Occidental
Edward P. Djerejian* Director, James A. Baker III Institute for Public Policy
Rice University, MS-40
6100 Main Street
Houston, Texas 77005-1892
S. P. Dominick, Jr. (1)(2) Vice President and Controller of Occidental; President
of OPIC
R. Chad Dreier* President and Chief Executive Officer, The Ryland
24025 Park Sorrento, Suite 400 Group
Calabasas, California 91302
John E. Feick* President and Chief Executive Officer of Matrix
230, 319-2nd Avenue, SW Solutions, Inc.
Calgary, Alberta, Canada T2P OC5
Richard W. Hallock Executive Vice President - Human Resources of
Occidental
J. R. Havert (1)(2) Vice President and Treasurer of Occidental; Vice
President and Treasurer of OPIC; Vice President and
Treasurer of OCHC
Page 6 of 14 Pages
Name and Business Address Present Principal Occupation or Employment
- ------------------------- ------------------------------------------
Kenneth J. Huffman Vice President - Investor Relations of Occidental
Scott A. King (2) Vice President and General Counsel of OCHC
5005 LBJ Freeway
Dallas, Texas 75244
Dale R. Laurance* President of Occidental
Anthony R. Leach Vice President - Finance of Occidental; Executive Vice
President of OCHC
Irvin W. Maloney* Retired Chairman and Chief Executive Officer,
Dataproducts Corporation
Robert M. McGee Vice President of Occidental
Lawrence P. Meriage Vice President - Communications and Public Affairs of
Occidental
Donald L. Moore Vice President and Chief Information Officer of
5 East Greenway Plaza Occidental
Houston, Texas 77046-0504
John W. Morgan Executive Vice President - Operations of Occidental;
Vice President of OPIC
R. Casey Olson Vice President of Occidental
5 East Greenway Plaza
Houston, Texas 77046-0504
Linda S. Peterson (1) Assistant Secretary of Occidental; Vice President and
Secretary of OPIC; Vice President and Assistant
Secretary of OCHC
Rodolfo Segovia* Member of Executive Committee of Inversiones
Carrera 9A No. 99-02 OF. 1001 Sanford
Santafe de Bogota, D.C. Colombia
Richard A. Swan Vice President - Health, Environment and Safety of
Occidental
Aziz D. Syriani* President and Chief Operating Officer of The Olayan
505 Park Avenue - 11th Floor Group
New York, New York 10022
Page 7 of 14 Pages
Name and Business Address Present Principal Occupation or Employment
- ------------------------- ------------------------------------------
Rosemary Tomich* Owner of the Hope Cattle Company and the A.S.
Tomich Construction Company; Chairman of the Board
of Directors and Chief Executive Officer, Livestock
Clearing, Inc.
Aurmond A. Watkins, Jr. Vice President - Tax of Occidental; Vice President of
OCHC
Walter L. Weisman* Past Chairman and Chief Executive Officer of
P.O. Box 18017 American Medical International, Inc.
Beverly Hills, California 90209
- ------------------
(1) Director of OPIC
(2) Director of OCHC
During the last five years, none of the Companies or the natural persons
named above (a) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) was a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Occidental will pay Credit Suisse First Boston ("CSFB") $33,480,000 in cash
to consummate its purchase of 2,700,000 shares of Lyondell's regular Common
Stock. The transaction's expected closing date is October 14, 2003. The source
of these funds is the working capital of Occidental and its subsidiaries.
Occidental did not transfer any funds in exchange for the 594,180 shares of
Series B Common Stock of Lyondell described in Item 5(c), below. The securities
constituted stock dividends.
On August 22, 2002, Occidental paid Lyondell $440 million pursuant to a
Securities Purchase Agreement, dated as of July 8, 2002, between Lyondell and
OCHC (the "Securities Purchase Agreement") and received 34 million shares of
Series B Common Stock and 5,000,000 shares of regular common stock issuable upon
exercise of the Warrant for the Purchase of Shares of Common Stock (the
"Warrant"). 1
- --------------------------
1 The $440 million came from general corporate funds received when
Occidental sold to Lyondell three of its affiliates, which owned a 29.5%
interest in Equistar Chemicals, LP.
Page 8 of 14 Pages
ITEM 4. PURPOSE OF TRANSACTION.
As described in Item 5(c), (i) Occidental agreed to purchase 2,700,000
million shares of Lyondell's regular Common Stock from CSFB as part of a public
offering of those shares and (ii) Occidental received 594,180 shares of Series B
Common Stock of Lyondell as a dividend in place of a cash dividend. Pursuant to
Lyondell's Certificate of Incorporation, Lyondell has the right to elect to pay
dividends on its Series B Common Stock with additional shares of Series B Common
Stock rather than cash.
Directly and through OPIC and OCHC, Occidental currently holds its Lyondell
shares for investment purposes only with a view toward maximizing long-term
shareholder value for Occidental's shareholders and not for the purpose of
controlling Lyondell.
Other than as set forth above or in Item 6 of this Schedule 13D, Occidental
currently has no plans that relate to, or would result in, any of the actions
listed in clauses (a) through (j) of Item 4 of Schedule 13D. However, Occidental
continuously reviews and analyzes its investments in each of its subsidiaries
and other operations, including the Lyondell shares, in order to determine
whether value for Occidental's shareholders is best served by holding those
investments, increasing, disposing of, or monetizing those investments, or
recapitalizing or otherwise restructuring those investments. With respect to the
Lyondell shares, these reviews and analyses depend on a variety of factors,
including without limitation, the price of, and other market conditions relating
to, the Lyondell shares, the investment return on the Lyondell shares,
Lyondell's business and prospects, other investment and business opportunities
available to Occidental, general stock market and economic conditions, tax
considerations, and other factors deemed relevant.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Occidental: aggregate number of shares held: 44,010,972*
----------- percentage of class: 24.2%
OPIC: aggregate number of shares held: 44,010,972*
----- percentage of class: 24.2%
OCHC: aggregate number of shares held: 44,010,972*
----- percentage of class: 24.2%
None of the directors or executive officers listed in Item 2 above is the
beneficial owner of Lyondell common stock, except Ray R. Irani and Stephen I.
Chazen, each of whom holds 1,780 shares of restricted common stock, 1,780 shares
of phantom stock (to be settled for cash upon vesting of the restricted common
stock), and 1,044.6028 deferred stock units (to be settled
- --------------------------
* This number includes 2,700,000 shares of regular Common Stock, 36,310,972
shares of Series B Common Stock and 5,000,000 shares of regular Common Stock
issuable upon exercise of the Warrant.
Page 9 of 14 Pages
for cash upon retirement). Each of Dr. Irani's and Mr. Chazen's holdings
constitute less than one percent of Lyondell's common stock.
(b) Occidental: sole power to vote or direct the vote: 0
----------- shared power to vote or direct the vote: 44,010,972*
sole power to dispose or direct the disposition: 0
shared power to dispose or direct the disposition: 44,010,972*
OPIC: sole power to vote or direct the vote: 0
----- shared power to vote or direct the vote: 44,010,972*
sole power to dispose or direct the disposition: 0
shared power to dispose or direct the disposition: 44,010,972*
OCHC: sole power to vote or direct the vote: 0
----- shared power to vote or direct the vote: 44,010,972*
sole power to dispose or direct the disposition: 0
shared power to dispose or direct the disposition: 44,010,972*
None of the directors or executive officers listed in Item 2 above is the
beneficial owner of Lyondell common stock, except Ray R. Irani and Stephen I.
Chazen, each of whom holds 1,780 shares of restricted common stock, 1,780 shares
of phantom stock (to be settled for cash upon vesting of the restricted common
stock), and 1,044.6028 deferred stock units (to be settled for cash upon
retirement). Each of Dr. Irani's and Mr. Chazen's holdings constitute less than
one percent of Lyondell's common stock.
(c) On October 7, 2003, Occidental entered into a letter agreement with CSFB
(the "Letter Agreement") that obligates Occidental or one of its affiliates to
purchase 2,700,000 shares of Lyondell regular Common Stock at $12.40 per share.
Occidental will pay CSFB $33,480,000 in cash to consummate this transaction,
which is expected to close on October 14, 2003. On September 30, 2003,
Occidental received a stock dividend of 594,180 shares of Series B Common Stock
of Lyondell.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Pursuant to the Letter Agreement, in addition to agreeing to purchase the
2,700,000 shares of Lyondell regular Common Stock, Occidental agreed not to
dispose of, or request registration of, any of its Lyondell shares for ninety
days from the public offering date stated in
- --------------------------
* This number includes 2,700,000 shares of regular Common Stock, 36,310,972
shares of Series B Common Stock and 5,000,000 shares of regular Common Stock
issuable upon exercise of the Warrant.
Page 10 of 14 Pages
the prospectus for Lyondell's public offering (the "Lock-Up Period"). The two
Occidental officers who serve on Lyondell's board of directors (as described in
more detail below) entered into separate agreements with CSFB that provided that
they would not dispose of any of their Lyondell shares during the Lock-Up
Period. Also in connection with the Letter Agreement, Occidental and Lyondell
entered into a First Amendment to Stockholder's Agreement, dated as of October
7, 2003 (the "Amendment"). The Amendment provided a specific waiver of
Occidental's obligations (stated in the Stockholder's Agreement) that it would
not acquire, or agree to acquire, any Lyondell securities.
Pursuant to the Securities Purchase Agreement, OCHC purchased from Lyondell
a total of 34,000,000 shares of Lyondell's newly created Series B common stock.
Pursuant to the Warrant, OCHC also received warrants to purchase an additional 5
million shares (the "Warrant Shares") of Lyondell's regular common stock for $25
per share. In exchange for the Lyondell securities, Occidental paid $440,000,000
in cash.
As additional consideration for the transaction, Occidental will receive
from Lyondell a contingent payment equal to 7.38% of cash distributions from
Equistar for 2002 and 2003 up to a total of $35 million, to be paid either in
cash or in Lyondell regular Common Stock or Series B Common Stock.
Pursuant to a Stockholders Agreement, dated as of August 22, 2002 (the
"Stockholders Agreement"), Lyondell has appointed to its board of directors two
of Occidental's executive officers, Dr. Ray R. Irani (who also is an Occidental
director) and Mr. Stephen I. Chazen. Unless Occidental obtains Lyondell's
consent, the Stockholders Agreement prevents Occidental (a) from selling its
Series B common stock or the Warrant Shares and (b) from converting its Series B
common stock into regular Lyondell common stock for at least two years. In
addition, the Stockholders Agreement generally requires Occidental to vote its
Lyondell common stock in favor of the slate of directors proposed by Lyondell's
management. The Stockholders Agreement will be effective as long as Occidental
owns 17 million or more shares of Lyondell common stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Agreement Pursuant to Rule 13d-1(k)
Exhibit 2 Securities Purchase Agreement, dated as of July 8, 2002, by
and between Lyondell Chemical Company and Occidental
Chemical Holding Corporation*
Exhibit 3 Warrant for the Purchase of Shares of Common Stock, issued
August 22, 2002*
Exhibit 4 Stockholders Agreement, dated as of August 22, 2002, by and
among Lyondell Chemical Company and the Stockholders as
defined therein*
- --------
* Previously filed.
Page 11 of 14 Pages
Exhibit 5 Letter Agreement dated as of October 7, 2003
Exhibit 6 First Amendment to Stockholders Agreement, dated as of
October 7, 2003
Page 12 of 14 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
October 10, 2003 OCCIDENTAL PETROLEUM CORPORATION
By: /s/ J. R. HAVERT
------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
OCCIDENTAL PETROLEUM INVESTMENT CO.
By: /s/ J. R. HAVERT
------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
OCCIDENTAL CHEMICAL HOLDING CORPORATION
By: /s/ J. R. HAVERT
------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
Page 13 of 14 Pages
EXHIBIT 1
AGREEMENT
Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of
1934, as amended, the undersigned agree that the Schedule 13D to which this
Agreement is attached as Exhibit 1 is filed on behalf of each of us. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
Dated: October 10, 2003 OCCIDENTAL PETROLEUM CORPORATION
By: /s/ J. R. HAVERT
------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
OCCIDENTAL PETROLEUM INVESTMENT CO.
By: /s/ J. R. HAVERT
------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
OCCIDENTAL CHEMICAL HOLDING CORPORATION
By: /s/ J. R. HAVERT
------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
Page 14 of 14 Pages
OCCIDENTAL PETROLEUM CORPORATION
October 7, 2003
Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, New York 10010-3629
Ladies and Gentlemen:
This letter agreement (the "AGREEMENT") is being executed in order to
document our understanding regarding the purchase by us or one of our affiliates
from you in a public offering (the "PUBLIC OFFERING") of registered shares of
common stock, par value $1.00 per share (the "ORIGINAL COMMON STOCK"), of
Lyondell Chemical Company, a Delaware corporation (the "COMPANY").
The Company proposes to issue and sell to you, and you propose to offer, an
aggregate of 12,000,000 shares (the "UNDERWRITTEN SHARES") and, at your
election, up to 1,800,000 additional shares (the "OPTION SHARES" and together
with the Underwritten Shares, the "SHARES") of Original Common Stock, pursuant
to an underwriting agreement, between the Company and you entered into
concurrently with this Agreement (the "UNDERWRITING Agreement"). As of the date
of this Agreement, excluding 5,000,000 shares of Original Common Stock issuable
upon exercise of a warrant, we beneficially own 36,310,792 shares of the
Company's Series B common stock (the "SERIES B COMMON STOCK", and together with
the Original Common Stock, the "COMMON STOCK"), which represents approximately
22% of the Company's common equity. Unless otherwise provided herein,
capitalized terms used and not defined herein shall have the meanings ascribed
to them in the Underwriting Agreement.
Subject to the terms and conditions of this Agreement and the closing of
the sale of the Underwritten Shares on the Closing Date, we agree to purchase
from you, in the Public Offering, 2,700,000 shares of Original Common Stock (the
"OXY SHARES") on the Closing Date at the Purchase Price per share specified in
the Underwriting Agreement. Notwithstanding the foregoing, you shall have no
obligation to sell to us any Oxy Shares in the event the Underwriting Agreement
is terminated (for any reason) or in the event the Company fails to deliver such
shares to you, it being understood that the Company shall not be deemed to have
delivered any Oxy Shares on the Closing Date until the Company shall have first
delivered 9,300,000 Underwritten Shares on the Closing Date.
This Agreement is made in reliance upon our representations and warranties
to you contained in this Agreement. We hereby represent and warrant to you that
the Oxy Shares to be acquired by us will be acquired for investment for our own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that in connection with the Public
Offering, we will comply with the provisions of Regulation M under the
Securities Exchange Act of 1934, as amended. By executing this Agreement, we
further represent and warrant to you that we do not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person with respect to, any of the
Oxy Shares.
We hereby agree on behalf of ourselves and our direct and indirect
subsidiaries (collectively, the "RESTRICTED PARTIES"), that from the date hereof
and until 90 days after the public offering date set forth in the final
prospectus used to sell the Shares (the "PUBLIC OFFERING DATE") pursuant to the
Underwriting Agreement, the Restricted Parties will not offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any shares of
Common Stock or securities convertible into or exchangeable or exercisable for
any shares of Common Stock, enter into a transaction which would have the same
effect, or enter into any swap, hedge or other arrangement that disposes of, in
whole or in part, any of the economic consequences of ownership of shares of
Common Stock, whether any such aforementioned transaction is to be settled by
delivery of shares of Common Stock or such other securities, in cash or
otherwise, or publicly disclose the intention to make any such offer, sale,
pledge or disposition, or to enter into any such transaction, swap, hedge or
other arrangement, without, in each case, your prior written consent; provided,
however, that the foregoing restrictions shall not prevent Occidental from
making public statements concerning its long term expectations for its
investment in the Company so long as Occidental does not state any specific plan
or proposal to sell. In addition, we agree that, without your prior written
consent, the Restricted Parties will not, during the period commencing on the
date hereof and ending 90 days after the Public Offering Date, make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for
shares of Common Stock. Any shares of Common Stock received upon exercise of
warrants or the payment of in-kind dividends will also be subject to the
foregoing restrictions of this paragraph. The foregoing restrictions of this
paragraph shall not apply to our purchase of shares of Original Common Stock in
open market transactions after the Closing Date pursuant to Section 2.2(b) of
the Stockholders Agreement among the Company and the Stockholders named therein,
dated August 22, 2002.
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Common Stock if such transfer would constitute a violation or breach of this
Agreement.
If the Underwriting Agreement is terminated for any reason, this Agreement
(including, without limitation, our obligations in the second immediately
preceding paragraph) shall also terminate at the time of such termination. You
shall have no liability to the undersigned arising out of any termination of the
Underwriting Agreement or the failure to consummate the transaction contemplated
therein and the undersigned acknowledges that you have the right to terminate
the Underwriting Agreement and/or to decline to consummate the transaction
contemplated therein under certain circumstances. This Agreement shall be
binding on us and our successors and assigns.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CHOICE OF LAW RULES
THEREOF).
Very truly yours,
OCCIDENTAL PETROLEUM CORPORATION
/s/ STEPHEN I. CHAZEN
--------------------------------
Name: Stephen I. Chazen
Title: Chief Financial Officer and
Executive Vice President -
Corporate Development
Accepted as of the date hereof:
CREDIT SUISSE FIRST BOSTON LLC
/s/ DAVID P. FARIS
- ------------------------------
Name: David P. Faris
Title: Director
FIRST AMENDMENT
TO
STOCKHOLDERS AGREEMENT
This First Amendment to Stockholders Agreement (this "Amendment") is
made as of October 7, 2003 by and among Lyondell Chemical Company, a Delaware
corporation (the "Company"), Occidental Chemical Holding Corporation, a
California corporation ("OCHC"), and Occidental Petroleum Corporation, a
Delaware corporation ("Occidental"). The Company, OCHC and Occidental are
sometimes collectively referred to herein as the "Parties" and each individually
referred to as a "Party."
RECITALS
WHEREAS, the Company and the Stockholders entered into a Stockholders
Agreement, dated as of August 22, 2002, by and among the Company and the
Stockholders (the "Stockholders Agreement"), which restricts Occidental and its
Wholly Owned Affiliates from, among other things, acquiring, agreeing to acquire
or making any proposal to acquire, directly or indirectly, any securities of the
Company;
WHEREAS, the Company desires to sell to Occidental or one or more of
its Wholly Owned Affiliates, and Occidental or one or more of its Wholly Owned
Affiliates desires to purchase, shares of Original Common Stock in the Company's
equity offering pursuant to the Underwriting Agreement dated as of October 7,
2003 between the Company and Credit Suisse First Boston LLC (the "Offering") in
an amount that will be sufficient to maintain Occidental's approximate pro rata
share ownership of the Company's outstanding equity as of the date of
commencement of the Offering (which is approximately 22%);
WHEREAS, the Parties desire to document the correction of a
typographical error in the text of Section 3.3(b) to the Stockholders Agreement;
WHEREAS, pursuant to Section 7.11 of the Stockholders Agreement,
Occidental and the Company now desire to amend the Stockholders Agreement as set
forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
of the Parties, the Parties hereby agree as follows:
Section 1. Defined Terms. The definitions of capitalized terms
used and not otherwise defined herein shall have the meanings given such terms
in the Stockholders Agreement.
Section 2. Amendment to Section 2.2 of the Stockholders Agreement.
The Parties hereby agree that Section 2.2 of the Stockholders Agreement shall be
amended by inserting the following text as new subsection (d) to Section 2.2:
"(d) Section 2.1 shall not be applicable to the purchase,
directly or indirectly, by Occidental or one or more of its Wholly Owned
Affiliates of up to 2.7 million shares of Original Common Stock (such amount is
intended to be sufficient to permit Occidental to maintain its approximate pro
rata share of ownership of the Company's outstanding equity as of
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the date of the commencement of the Company's equity offering pursuant to the
Underwriting Agreement dated as of October 7, 2003 between the Company and
Credit Suisse First Boston LLC, which is approximately 22%) in the Offering, so
long as after giving effect to such purchase, Occidental and its Wholly Owned
Affiliates will beneficially own in the aggregate, directly or indirectly, a
lower ownership percentage in the Company than the Occidental Rights Trigger
Amount (as defined in the Securities Purchase Agreement). Occidental hereby
agrees, and shall cause its Wholly Owned Affiliates, to promptly notify the
Company of any purchase of such Original Common Stock."
Section 3. Amendment to Section 3.3(b) of the Stockholders
Agreement. The Parties hereby agree that Section 3.3(b) of the Stockholders
Agreement shall be amended and restated in its entirety to read as follows:
"'The Company shall exercise all authority under applicable law to
cause any slate of directors presented to the stockholders of the Company for
election to the Board of Directors to include both Dr. Ray Irani and Stephen I.
Chazen, so long as they are qualified to serve, until Occidental and its
Subsidiaries beneficially own in the aggregate, directly or indirectly, less
than 34 million shares of Common Stock (excluding for purposes of this Section
(3.3(b), shares to be issued to OCHC or its Wholly Owned Affiliates upon
exercise of a Warrant), from which time until the Termination Date for
Occidental and its Wholly Owned Affiliates only one of such individuals (to be
determined in the sole discretion of the Company) shall be entitled to a seat on
the Board of Directors."
Section 4. Effectiveness of Stockholders Agreement. Except as
amended by this Amendment, all terms and conditions of the Stockholders
Agreement shall remain in full force and effect among the Parties thereto.
Section 5. Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall constitute an original. All signatures
need not be on the same counterpart.
Section 6. Governing Law. The laws of the State of Delaware shall
govern the construction, interpretation and effect of this Amendment without
giving effect to any conflicts of law principles.
Section 7. Specific Performance. Each Party agrees that the other
Parties would be irreparably damaged if for any reason such Party fails to
perform any of such Party's obligations under this Amendment, and that the other
Parties would not have an adequate remedy at law for money damages in such
event. Accordingly, the other Parties shall be entitled to seek specific
performance and injunctive and other equitable relief to enforce the performance
of this Amendment by such Party. This provision is without prejudice to any
other rights that the Parties may have against any other Party for any failure
to perform its obligations under this Amendment.
Section 8. Jurisdiction; Consent to Service of Process; Waiver.
ANY JUDICIAL PROCEEDING BROUGHT AGAINST ANY PARTY OR ANY DISPUTE UNDER, ARISING
OUT OF OR IN CONNECTION WITH THIS AMENDMENT SHALL BE
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BROUGHT IN THE FEDERAL OR STATE COURTS OF THE STATE OF DELAWARE, AND, BY
EXECUTION AND DELIVERY OF THIS AMENDMENT, EACH OF THE PARTIES ACCEPTS THE
EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT (AS FINALLY ADJUDICATED) RENDERED THEREBY IN CONNECTION WITH THIS
AMENDMENT. EACH OF THE PARTIES SHALL APPOINT THE CORPORATION TRUST COMPANY, THE
PRENTICE-HALL CORPORATION SYSTEM, INC. OR A SIMILAR ENTITY (THE "AGENT") AS
AGENT TO RECEIVE ON ITS BEHALF SERVICE OF PROCESS IN ANY PROCEEDING IN ANY SUCH
COURT IN THE STATE OF DELAWARE, AND EACH OF THE PARTIES SHALL MAINTAIN THE
APPOINTMENT OF SUCH AGENT (OR A SUBSTITUTE AGENT) FROM THE DATE HEREOF UNTIL THE
TERMINATION OF THE STOCKHOLDERS AGREEMENT AND SATISFACTION OF ALL OBLIGATIONS
HEREUNDER AND THEREUNDER. THE FOREGOING CONSENTS TO JURISDICTION AND
APPOINTMENTS OF AGENT TO RECEIVE SERVICE OF PROCESS SHALL NOT CONSTITUTE GENERAL
CONSENTS TO SERVICE OF PROCESS IN THE STATE OF DELAWARE FOR ANY PURPOSE EXCEPT
AS PROVIDED ABOVE AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON ANY PERSON OTHER
THAN THE PARTIES. EACH PARTY HEREBY WAIVES ANY OBJECTION IT MAY HAVE BASED ON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON-CONVENIENS.
Section 9. Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY AND
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING UNDER, ARISING OUT OF OR IN CONNECTION WITH THIS AMENDMENT
AND FOR ANY COUNTERCLAIM THEREIN.
Section 10. Cooperation for Rule 144 Resales. The Company hereby
agrees that it will file the reports required to be filed by it under the
Securities Act of 1933, as amended (the "Securities Act"), and the Securities
Exchange Act of 1934, as amended, and the rules and regulations adopted by the
Securities Exchange Commission ("SEC") thereunder (or, if the Company is not
required to file such reports, it will, upon the request of Occidental, make
publicly available other non-confidential information so long as necessary to
permit sales under Rule 144 under the Securities Act of shares of Original
Common Stock Occidental purchases in the Offering), and it will take such other
action as Occidental may reasonably request, all to the extent required from
time to time to enable Occidental to sell shares it purchases in the Offering
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act or (b) any similar
rule or regulation hereafter adopted by the SEC.
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IN WITNESS WHEREOF, this Amendment has been executed on behalf of each
of the Parties by their respective officers thereunto duly authorized, effective
as of the date first written above.
LYONDELL CHEMICAL COMPANY
By: /s/ DAN F. SMITH
------------------------------------------
Name: Dan F. Smith
Title: President and Chief Executive Officer
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ STEPHEN I. CHAZEN
------------------------------------------
Name: Stephen I. Chazen
Title: Chief Financial Officer and Executive
Vice President - Corporate Development
OCCIDENTAL CHEMICAL HOLDING CORPORATION
By: /s/ J. R. HAVERT
------------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
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