<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ATLANTIC RICHFIELD COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ATLANTIC RICHFIELD COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the contrary pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing:
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
PRELIMINARY PROXY
FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION
ON FEBRUARY 28, 1994.
[ARCO LOGO]
ATLANTIC RICHFIELD COMPANY
NOTICE OF 1994
ANNUAL MEETING
OF STOCKHOLDERS
AND PROXY STATEMENT
--------------------------------------
PLEASE COMPLETE, SIGN, DATE AND RETURN
YOUR PROXY PROMPTLY
--------------------------------------
MONDAY, MAY 2, 1994
AT 10:00 A.M.
SHERATON GRANDE HOTEL
333 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA
<PAGE>
[ARCO LOGO]
ATLANTIC RICHFIELD COMPANY
515 South Flower Street
Los Angeles, California 90071
March 14, 1994
Dear Stockholder:
It is a pleasure to invite you to join us at the 1994 Annual Meeting of
Stockholders in Los Angeles on May 2.
It is important that your shares be voted whether or not you plan to be present
at the meeting. Please complete, sign, date and return the enclosed form of
proxy promptly. If you attend the meeting and wish to vote your shares
personally, you may revoke your proxy.
This booklet includes the notice of the meeting and the Proxy Statement, which
contains information about the formal business to be acted upon by the
stockholders. The meeting will also feature a report on the operations of your
Company, followed by a question and discussion period. A post-meeting report
will be made available to stockholders.
Sincerely,
[SIGNATURE OF LODWRICK M. COOK]
Chairman of the Board and
Chief Executive Officer
[SIGNATURE OF MIKE R. BOWLIN]
President and Chief Operating Officer
<PAGE>
[ARCO LOGO]
ATLANTIC RICHFIELD COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 1994
The Annual Meeting of Stockholders of Atlantic Richfield Company will be held
in the Grande Ballroom of the Sheraton Grande Hotel, 333 South Figueroa Street,
Los Angeles, California, on Monday, May 2, 1994, at 10:00 a.m., local time, for
the following purposes:
(1) To elect six directors to hold office for a three-year term;
(2) To amend the Certificate of Incorporation to provide for the annual
election of Directors;
(3) To amend the Annual Incentive Plan to comply with new tax laws;
(4) To adopt the 1994 Special Incentive Plan;
(5) To approve the appointment of Coopers & Lybrand as independent auditors for
the year 1994;
(6) If properly presented, to consider and act upon the stockholders' proposals
set forth on pages 23 through 30, which are opposed by the Board of
Directors; and
(7) To transact such other business as may properly come before the meeting.
Stockholders entitled to vote at the meeting are holders of record of the
Preference Stocks and of the Common Stock at the close of business on March 7,
1994.
IT WILL BE HELPFUL TO US IF YOU WILL READ THE PROXY STATEMENT, THEN COMPLETE,
SIGN AND DATE THE FORM OF PROXY AND RETURN IT IN THE ENCLOSED SELF-ADDRESSED
POSTPAID ENVELOPE.
Each stockholder of record will receive a single form of proxy pertaining to
all classes of voting stock registered in his or her name. Each participant in
any of the various employee benefit plans will also receive a form of proxy
pertaining to shares credited to his or her accounts in all plans.
[SIGNATURE OF HOWARD L. EDWARDS]
HOWARD L. EDWARDS Los Angeles, California
Corporate Secretary March 14, 1994
<PAGE>
ATLANTIC RICHFIELD COMPANY
515 SOUTH FLOWER STREET
LOS ANGELES, CALIFORNIA 90071
----------------
PROXY STATEMENT
MARCH 14, 1994
----------------
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of Atlantic
Richfield Company ("ARCO" or the "Company") for the Annual Meeting of
Stockholders. The proxy may be revoked by the stockholder at any time prior to
the time it is voted by giving notice of such revocation either personally or
in writing to the Corporate Secretary of ARCO. When a proxy is returned
properly dated and signed, the shares represented thereby will be voted by the
persons named as proxies in accordance with each stockholder's directions.
Stockholders may specify their choices by marking the appropriate boxes on the
enclosed proxy. If a proxy is dated, signed and returned without specifying
choices, the shares will be voted as recommended by the directors of the
Company. As to other items of business which may come before the meeting, the
directors will vote in accordance with their best judgment. ARCO has adopted a
policy of confidential voting. All proxies, ballots and voting tabulations that
identify stockholders shall be kept secret by the independent third party
tabulator except in very limited specified circumstances where it is important
to protect the interests of the Company and its stockholders.
VOTING SECURITIES
All stockholders of record at the close of business on March 7, 1994 are
entitled to vote on all business of the meeting. The Company's $3.00 Preference
Stock ("$3.00 Preference Stock") is entitled to eight votes per share; the
Company's $2.80 Preference Stock ("$2.80 Preference Stock") is entitled to two
votes per share; and the Company's Common Stock ("Common Stock") is entitled to
one vote per share, all shares voting together as one class. The Company had
shares of $3.00 Preference Stock, shares of $2.80 Preference
Stock and shares of Common Stock outstanding on such record date.
Fractional shares will not be voted. The presence, in person or by proxy, of
stockholders entitled to cast at least a majority of the votes which all
stockholders are entitled to cast shall constitute a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following is the only group known by the Company to own beneficially more
than five percent of any class of the Company's voting securities as of the
record date:
<TABLE>
<CAPTION>
Title of
Class Name and Address Number of Shares Percent of Class
-------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
Common Stock The Capital Group, Inc. 8,299,050(a) 5.19%
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
- --------
(a) According to Schedule 13G dated February 11, 1994 and filed with the
Company on February 14, 1994, certain operating subsidiaries of The Capital
Group, Inc., exercised investment discretion over various institutional
accounts which held as of December 31, 1993, 8,299,050 shares of the
issuer. Capital Guardian Trust Company, a bank, and one of such operating
companies, exercised investment discretion over 2,557,850 of said shares.
Capital Research and Management Company and Capital International, Inc.,
registered investment advisers, and Capital International Limited and
Capital International, S.A., other operating subsidiaries, had investment
discretion with respect to 5,612,000; 5,100; 92,600 and 31,500 shares,
respectively, of the above shares.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of Common Stock and the
number of shares of common stock of ARCO Chemical Company ("ARCO Chemical
Stock") owned beneficially as of February 1, 1994 by each director or nominee
and by all directors and executive officers as a group. ARCO Chemical Company
("ARCO Chemical") was a wholly owned subsidiary of ARCO prior to the initial
public offering by ARCO Chemical of its common stock in October 1987. At
February 1, 1994, ARCO owned 80,000,001 shares of ARCO Chemical Stock, which
represented 83.3% of the outstanding ARCO Chemical Stock. None of the directors
or nominees, or directors and executive officers as a group, owned any other
equity securities of the Company or of ARCO Chemical, except as disclosed in
footnotes to the table. As of February 1, 1994, the percentage of shares of any
class of equity securities of the Company or of ARCO Chemical beneficially
owned by any director or nominee, or by all directors and executive officers as
a group, did not exceed 1% of the class so owned. Unless otherwise noted, each
individual has sole voting and investment power for the shares indicated below.
<TABLE>
<CAPTION>
Shares of Arco
Shares of Common Stock Chemical Stock owned
owned beneficially as of beneficially as of
NAME February 1, 1994(a)(b) February 1, 1994
- -------------------------------------------------------------------------------------
<S> <C> <C>
Ronald J. Arnault.................. 83,389 500
Frank D. Boren..................... 3,000 --
Mike R. Bowlin..................... 66,826(c) --
Lodwrick M. Cook................... 140,153(d) 1,000
Richard H. Deihl................... 3,000 --
John Gavin......................... 2,000 --
Hanna H. Gray...................... 1,100 --
Philip M. Hawley................... 1,400 --
William F. Kieschnick.............. 27,202 --
Kent Kresa......................... 2,000(d)(e) --
David T. McLaughlin................ 1,100 --
James A. Middleton................. 92,382 1,000
John B. Slaughter.................. 1,000 --
William E. Wade, Jr. .............. 53,562 --
Hicks B. Waldron................... 3,070 --
Henry Wendt........................ 2,656 --
All directors and executive offi-
cers as a group(f)................ 843,887(g) 4,692
- -------------------------------------------------------------------------------------
</TABLE>
(a) Includes shares held by the trustees under the Atlantic Richfield Capital
Accumulation Plan II and the Atlantic Richfield Savings Plan II for the
accounts of participants.
(b) The amounts shown include shares that may be acquired within 60 days
following February 1, 1994 through the exercise of stock options, as
follows: Mr. Arnault, 78,298; Mr. Bowlin, 54,922; Mr. Cook, 132,100; Mr.
Middleton, 84,700; Mr. Wade, 50,935; and all directors and executive
officers as a group, including those just named, 738,407. These amounts
include shares subject to options granted pursuant to the 1985 Executive
Long-Term Incentive Plan (the "1985 Plan") and pursuant to the Stock Option
Plan for Outside Directors. See "Compensation--Compensation of Executive
Officers" and "Compensation--Compensation of Directors."
(c) Includes 10,000 shares of restricted Common Stock granted in June 1992
pursuant to the 1985 Plan. Restricted stock includes voting rights and the
rights to receive dividends.
(d) Includes 5,817 shares of Common Stock purchased by Mr. Cook on February 16,
1994 and 1,000 shares of Common Stock purchased by Mr. Kresa on February
11, 1994.
(e) Includes options to purchase 1,000 shares of ARCO Common Stock granted on
November 1, 1993 at an exercise price of $110.25 per share pursuant to the
Stock Option Plan for Outside Directors. While these options became
exercisable on December 1, 1993, under the short-swing profit rules a
director is precluded from exercising options for a period of six months
from date of grant.
(Footnotes continued on following page)
2
<PAGE>
(f) As of February 1, 1994, Mr. Bowlin owned 2,000 shares and Mr. Wade owned
1,000 shares of common stock of Lyondell Petrochemical Company
("Lyondell"), and all directors and executive officers as a group owned a
total of 4,301 shares. Prior to ARCO's sale of a majority interest in
Lyondell in January 1989, Lyondell was a wholly owned subsidiary of ARCO;
at February 1, 1994, ARCO owned 39,921,400 shares of common stock of
Lyondell, which represented 49.9% of the outstanding common stock.
(g) Includes 37,216 shares owned jointly by spouses which are subject to shared
voting and investment power and 2,135 shares owned beneficially by a spouse
or family members. Does not include 722 shares owned by spouses or
relatives, as to which shares beneficial ownership is disclaimed.
ELECTION OF DIRECTORS
Item 1 on Proxy Card
The Board of Directors is currently classified into three classes, each class
to be elected for a three-year term. Pursuant to the Certificate of
Incorporation as currently in effect, at each annual meeting of stockholders,
directors are elected for a three-year term to succeed those directors whose
term of office expires at that annual meeting. The Board of Directors has
adopted amendments to the Certificate of Incorporation authorizing the annual
election of directors, subject to the approval of stockholders as further
described on page 18 of this Proxy Statement.
At the request of the Board of Directors, Mr. Cook has agreed to serve as
Chairman of the Board until June 1995, two years past the date on which he
would normally retire. Mr. James S. Morrison and Mr. Robert E. Wycoff retired
June 1, 1993. Mr. William E. Wade, Jr. was elected a director by the Board of
Directors on June 28, 1993, effective on that date, for the remainder of Mr.
Wycoff's term expiring in 1994. Mr. Kent Kresa was elected a director by the
Board of Directors effective on November 1, 1993, for the remainder of Mr.
Donald M. Kendall's term expiring in 1994.
Effective at the date hereof, the number of directors constituting the whole
Board is fixed at sixteen. The Board of Directors has selected the following
nominees recommended by the Nominating Committee for election to a term of
three years.
Frank D. Boren
John Gavin
Kent Kresa
James A. Middleton
John B. Slaughter
William E. Wade, Jr.
Directors are to be elected at the annual meeting to hold office for the term
specified and until their successors are elected and qualified. Unless
authority to vote for directors is withheld in the proxy, the persons named in
the accompanying proxy intend to vote for the election of the six nominees
listed above.
All nominees have indicated a willingness to serve as directors, but if any of
them should decline or be unable to act as a director, the persons named in the
proxy will vote for the election of another person or persons as the Board of
Directors recommends. Messrs. Boren, Gavin, Middleton and Slaughter were most
recently elected as directors at the annual meeting of stockholders of ARCO in
1991, and Messrs. Wade and Kresa were elected as directors on June 28,1993 and
November 1, 1993, respectively.
3
<PAGE>
- --------------------------------------------------------------------------------
The following biographical information is furnished with respect to each of the
six nominees for election at the annual meeting and for each of the other 10
directors whose terms will continue after the meeting. The information includes
age as of the date of the meeting, present position, if any, with ARCO, period
served as director, expiration of term as director, and other business
experience during the past five years. Unless otherwise indicated, the
description of offices held by the persons below refer to offices with ARCO.
LODWRICK M. COOK, 65
Chairman of the Board and Chief Executive Officer
Director's term expires 1996
Director since 1980. Chief Executive Officer since October 1985
and Chairman of the Board since January 1986. President (October
1985-December 1985), Chief Operating Officer--Products (May
1984-October 1985) and Executive Vice President (June 1980-May
1984). Officer of ARCO since 1970. Director of H. F. Ahmanson &
Company and its subsidiary, Home Savings of America, Lockheed
Corporation and Chairman of the Board of ARCO Chemical Company.
RONALD J. ARNAULT, 50
Executive Vice President and Chief Financial Officer
Director's term expires 1995
Director since 1987. Executive Vice President since October
1987, Chief Financial Officer (June 1984-July 1990 and July
1992-Present) and Senior Vice President (June 1980-October
1987). Officer of ARCO since 1977. Director of ARCO Chemical
Company and SunAmerica, Inc.
FRANK D. BOREN, 59
Nominee for Director
Director since 1990. President of Sustainable Conservation since
June 1992. President, The Nature Conservancy (January 1987-
January 1990), Partner, McNeill Enterprises (real estate) (1980-
1986 and January 1990-Present) and Partner in the law firm of
Paul, Hastings, Janofsky & Walker (1968-1980).
MIKE R. BOWLIN, 51
President and Chief Operating Officer
Director's term expires 1995
Director since June 1992. President and Chief Operating Officer
since June 1993, Executive Vice President (June 1992-May 1993)
and Senior Vice President (July 1985-June 1992). Officer of ARCO
since 1984.
RICHARD H. DEIHL, 65
Director's term expires 1995
Director since 1987. Chairman of the Board since 1986, Chief
Executive Officer (1983-1993) and President (1983-1986) of H. F.
Ahmanson & Company (bank holding company). Chairman of the Board
(1983-1993), Chief Executive Officer (1967-1993) and President
(1967-1983) of Home Savings of America (bank).
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
JOHN GAVIN, 63
Nominee for Director
Director since 1989. Chairman of Gamma Services International
(international consulting services) since January 1990.
President of Univisa Satellite Communications (May 1987-December
1989). Vice President of ARCO (May 1986-May 1987). United States
Ambassador to Mexico (April 1981-May 1986). Director of Dresser
Industries and Pinkerton, Inc.
HANNA H. GRAY, 63
Director's term expires 1996
Director since 1982. President Emeritus and Harry Pratt Judson
Distinguished Professor of History of the University of Chicago
since July 1993, President and Professor of History (1978-1993).
Director of American Information Technologies (Ameritech),
Cummins Engine Company, J. P. Morgan & Company and Morgan
Guaranty Trust Company of New York.
PHILIP M. HAWLEY, 68
Director's term expires 1996
Director since 1975. Private consultant since his retirement
from Carter Hawley Hale Stores, Inc. (department stores) in
April 1993. Chairman and Chief Executive Officer (1983-1993) and
President (1977-1983). Director of American Telephone &
Telegraph Company, BankAmerica Corp. and its subsidiary Bank of
America, N.T.&S.A., Carter Hawley Hale Stores, Inc., Johnson &
Johnson and Weyerhaeuser Company.
WILLIAM F. KIESCHNICK, 71
Director's term expires 1996
Director since 1973. Private consultant since his retirement
from ARCO on November 1, 1985. President (January 1981-October
1985) and Chief Executive Officer (May 1982-October 1985) of
ARCO. Director of First Interstate Bancorp and Pacific Mutual
Life Insurance Company.
KENT KRESA, 56
Nominee for Director
Director since November 1, 1993. Chairman, President and Chief
Executive Officer of Northrop Corporation (aerospace) since
1990, President and Chief Operating Officer (1987-1990).
Director of Chrysler Corporation.
DAVID T. MCLAUGHLIN, 62
Director's term expires 1995
Director since February 22, 1993. President and Chief Executive
Officer of The Aspen Institute (not-for-profit institute) since
May 1988. Chairman of The Aspen Institute (1987-1988), President
of Dartmouth College (1981-1987). Director of The Chase
Manhattan Corporation and its subsidiary Chase Manhattan Bank,
N.A., Standard Fusee Corporation and Westinghouse Electric
Corporation.
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
JAMES A. MIDDLETON, 58
Executive Vice President
Nominee for Director
Director since 1987. Executive Vice President since October 1987
and Senior Vice President (June 1981-October 1987). Officer of
ARCO since 1980. Director of ARCO Chemical Company and Texas
Utilities Company.
JOHN B. SLAUGHTER, 60
Nominee for Director
Director since 1989. President of Occidental College since 1988.
Chancellor, University of Maryland (1982-1988). Director of
International Business Machines Corporation, Monsanto Company,
Avery Dennison Corporation and Northrop Corporation.
WILLIAM E. WADE, JR., 51
Executive Vice President
Nominee for Director
Director since June 1993. Executive Vice President since June
1993 and Senior Vice President (May 1987-May 1993). Officer of
ARCO since 1985. Director of Lyondell Petrochemical Company.
HICKS B. WALDRON, 70
Director's term expires 1995
Director since 1986. Retired as Chairman and Chief Executive
Officer of Avon Products, Inc. (cosmetics, jewelry, health care
services) on December 31, 1988. Chairman of the Board and Chief
Executive Officer (1984-1988), President and Chief Executive
Officer (1983-1988), and Director (1980-1988). Director of CIGNA
Corporation, Hewlett-Packard Company and Ryder System, Inc.
HENRY WENDT, 60
Director's term expires 1996
Director since 1987. Chairman of the Board of SmithKline
Beecham, PLC and its USA subsidiary SmithKline Beecham
Corporation (health care products) since July 1989. Chairman of
the Board and Chief Executive Officer of SmithKline Beckman
Corporation (1987-July 1989), President and Chief Executive
Officer (1982-1987), and President and Chief Operating Officer
(1976-1982). Director of Beckman Instruments, Inc. and Allergan,
Inc.
- --------------------------------------------------------------------------------
6
<PAGE>
COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
------------------
Annual Compensation Awards
-------------------------------- ------------------
Other Restricted All
Annual Stock Other
Salary Bonus Compensation Awards Options Compensation
Name & Position Year ($) ($) ($) ($) (#) ($)
--------------- ---- ---------- -------- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
(a)(b) (c) (d) (a)(e)
Lodwrick M. Cook 1993 $1,147,740 $560,000 $129,258 36,000 $131,156
Chairman of the Board 1992 $1,102,032 $700,000 $ 67,575 42,100 $133,833
Chief Executive Officer 1991 $1,043,870 $600,000 39,000
Mike R. Bowlin 1993 $ 584,000 $440,000 $ 80,473 48,800 $ 69,290
President 1992 $ 411,621 $350,000 $212,860 $1,135,625 11,248 $ 48,817
Chief Operating Officer 1991 $ 354,616 $177,500 7,901
James A. Middleton 1993 $ 650,780 $320,000 $ 38,039 20,000 $ 83,544
Executive Vice President 1992 $ 624,864 $400,000 $ 37,910 24,100 $ 72,023
1991 $ 591,885 $350,000 19,600
Ronald J. Arnault 1993 $ 650,780 $320,000 $ 32,228 20,000 $ 94,942
Executive Vice President 1992 $ 624,864 $400,000 $ 20,231 24,100 $ 81,249
Chief Financial Officer 1991 $ 591,885 $350,000 19,600
William E. Wade, Jr. 1993 $ 480,164 $250,000 $257,797 27,310 $ 58,781
Executive Vice President 1992 $ 406,500 $204,750 $ 18,998 12,250 $ 49,395
1991 $ 386,154 $193,000 9,266
- -----------------------------------------------------------------------------------------------
</TABLE>
(a) In accordance with the transition provisions applicable to the revised
Proxy Rules covering disclosure of executive compensation adopted under the
Securities Exchange Act of 1934 (the "Proxy Rules"), amounts of Other
Annual Compensation and All Other Compensation are excluded for the
Company's 1991 fiscal year.
(b) Includes imputed income in respect of the Long-Term Disability Plan and in
respect of interest on relocation loans, tax gross-ups in respect of
relocation expense and financial counseling reimbursements and other
miscellaneous items, and the amount of incremental interest accrued under
the Executive Deferral Plan that exceeds 120% of a specified IRS rate. The
relocation expense and financial counseling reimbursements are increased by
an amount to cover the state and federal income tax obligations of the
recipient associated with the reimbursements, including an additional
amount, based on maximum applicable federal and state income tax rates.
(c) In connection with his election as an Executive Vice President, Mr. Bowlin
was awarded 10,000 shares of restricted stock on June 22, 1992, which vest
on June 22, 1997. The dollar amount shown equals the number of shares of
restricted stock multiplied by the fair market value of the Common Stock
("FMV") of $113.5625 per share on the date of grant. As of December 31,
1993, Mr. Bowlin held 10,000 shares of restricted stock, valued at
$1,052,500, based on a closing price of $105.25 for Common Stock on such
date. Neither of these valuations gives effect to the diminution of value
attributable to the restrictions on such stock. Dividends are paid on the
restricted stock reported in this column at the same rate as on
unrestricted shares.
(d) The Company's 1985 Executive Long-Term Incentive Plan (the "LTIP") provides
for the award of stock options and a cash payment in respect of dividend
share credits as described in this footnote.
(Footnotes continued on following page)
7
<PAGE>
Includes option grants under the LTIP made in February 1993, 1992 and 1991,
respectively, based on the Company's performance for 1992, 1991 and 1990,
respectively. Also includes additional option grants made in June 1993 to
Mr. Bowlin and Mr. Wade upon the occasion of their election to the offices
of President and Executive Vice President, respectively. Dividend share
credits are allocated to an optionee's account whenever dividends are
declared on shares of Common Stock. The number of dividend share credits to
be allocated on each record date to an optionee's account is computed by
multiplying the dividend subject rate per share of Common Stock by the sum
of (i) the number of shares subject to outstanding options and (ii) the
number of dividend share credits then credited to the optionee's account and
dividing the resulting figure by the FMV on such dividend record date.
Subject to certain exceptions, when stock options are exercised, surrendered
or cancelled, the optionee may receive a cash payment equal to the value of
the dividend share credits (FMV of a share of Common Stock on the exercise
date multiplied by the number of dividend share credits) allocated to such
options. In no event do dividend share credits have any ascertainable market
value until the date on which the options in respect of which such credits
have been allocated are exercised. Dividend share credits are cancelled upon
an optionee's termination of employment under certain specified
circumstances.
(e) Includes contributions to the Executive Supplementary Savings Plan,
incremental executive medical plan premiums, financial counseling
reimbursements and certain amounts in respect of the Executive Life
Insurance Plan, as follows:
<TABLE>
<CAPTION>
MR. MR. MR. MR. MR.
YEAR COOK BOWLIN MIDDLETON ARNAULT WADE
---- ------- ------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Executive Supplementary 1993 $91,819 $46,671 $52,062 $52,062 $38,383
Savings Plan 1992 $88,163 $32,930 $49,989 $49,989 $32,520
Incremental Executive 1993 $6,780 $6,780 $6,780 $6,780 $6,780
Medical Plan
premiums 1992 $6,355 $6,355 $6,355 $6,355 $6,355
Financial Counseling 1993 $16,854 $10,441 $11,891 $12,250 $8,700
reimbursements 1992 $25,180 $7,175 $8,770 $6,900 $7,310
Executive Life Insurance
Plan 1993 $15,703 $5,398 $12,811 $23,850 $4,918
1992 $14,135 $2,357 $ 6,909 $18,005 $3,210
</TABLE>
In 1993 a revised methodology was adopted to calculate certain amounts in
respect of the Executive Life Insurance Plan; accordingly, 1992 amounts
have been restated to reflect this methodology.
In addition to the dollar amounts shown in the column, dividend share
credits accrued to the accounts of the named executives during 1993 and
1992, respectively, are as follows: Mr. Cook: 7,310; 5,442; Mr. Bowlin:
3,923; 2,333; Mr. Middleton: 4,720; 3,672; Mr. Arnault: 5,044; 3,994; and
Mr. Wade: 3,386; 2,563.
8
<PAGE>
OPTION GRANTS DURING 1993
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed
annual rates of stock price
Individual Grants(a) appreciation for option term(b)
-------------------------------------------------- -------------------------------
% of Total
Options Options Granted Exercise
Granted to Employees Price Expiration
Name (#) in 1993 ($/Sh) Date 5% 10%
---- ------- --------------- -------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Lodwrick M. Cook 36,000 6.3% $117.625 February 22, 2003 $2,663,100 $6,748,740
Mike R. Bowlin 20,000 3.5% $117.625 February 22, 2003 $1,479,500 $3,749,300
28,800 5.0% $116.750 June 28, 2003 $2,114,496 $5,358,816
James A. Middleton 20,000 3.5% $117.625 February 22, 2003 $1,479,500 $3,749,300
Ronald J. Arnault 20,000 3.5% $117.625 February 22, 2003 $1,479,500 $3,749,300
William E. Wade, Jr. 8,110 1.4% $117.625 February 22, 2003 $ 599,937 $1,520,341
19,200 3.4% $116.750 June 28, 2003 $1,409,664 $3,572,544
Stock Price
2/22/93 Grant(c) $191.60 $305.09
6/28/93 Grant(d) $190.17 $302.82
All Stockholders(c) $11,833,000,000 $29,986,000,000
(d) $11,744,000,000 $29,763,000,000
</TABLE>
- -------
(a) The ten-year options were granted on February 22, 1993 pursuant to the LTIP
at an exercise price equal to the FMV on date of grant. These option grants
were awarded based on Company and individual performance in 1992. Each
option became exercisable as to 50% of the total shares granted on February
22, 1994; the remaining 50% will become exercisable on February 22, 1995.
Additionally, ten year options were granted on June 28, 1993 to Messrs.
Bowlin and Wade at an exercise price equal to the FMV on date of grant.
Options become exercisable as to 50% of the total shares granted on June
28, 1994; the remaining 50% will become exercisable on June 28, 1995.
Options and the dividend share credits associated with such options are
cancelled upon an optionee's termination of employment under certain
specified circumstances. The Compensation Committee has the right, in its
sole discretion, to accelerate exercisability of options upon a change of
control. See footnotes (d) and (e) to the Summary Compensation Table.
(b) These columns present hypothetical future values of the stock obtainable
upon exercise of the options net of the option's exercise price, assuming
that the market price of the Company's common stock appreciates at a five
and ten percent compound annual rate over the ten year term of the options.
The five and ten percent rates of stock price appreciation are presented as
examples pursuant to the Proxy Rules and do not necessarily reflect
management's assessment of the Company's future stock price performance.
The potential realizable values presented are not intended to indicate the
value of the options and are exclusive of the value, if any, that might be
realized in the future in respect of dividend share credits.
(c) Based on total number of common shares outstanding on December 31, 1993 of
159,953,980 and purchase price of $117.625.
(d) Based on total number of common shares outstanding on December 31, 1993 of
159,953,980 and purchase price of $116.750.
9
<PAGE>
AGGREGATED OPTION EXERCISES IN 1993 AND YEAR-END OPTION VALUES
(AS OF DECEMBER 31, 1993)
<TABLE>
<CAPTION>
Value of In-the-Money
Number of Unexercised Unexercised Options at
Options at Year-End(a) Year-End(b)(c)
------------------------- -------------------------
Shares
Acquired Value
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lodwrick M. Cook 0 0 93,050 57,050 $52,625 $52,625
Mike R. Bowlin 0 0 39,298 54,424 $402,283 $14,060
James A. Middleton 0 0 62,650 32,050 $320,625 $30,125
Ronald J. Arnault 0 0 67,173 32,050 $514,074 $30,125
William E. Wade, Jr. 2,152 $136,247 40,755 33,435 $396,599 $15,313
</TABLE>
- --------
(a) Each option carries with it the right to dividend share credits, as
described in footnote (d) to the Summary Compensation Table.
(b) FMV of ARCO Common Stock on December 31, 1993 was $105.25.
(c) Set forth below are the amounts that would have been paid in respect of
dividend share credits allocable to in-the-money options held at year end:
<TABLE>
<CAPTION>
Year-End Dividend Share Credit Values
-----------------------------------------
Exercisable Options Unexercisable Options
------------------- ---------------------
<S> <C> <C>
Mr. Cook $194,676 $194,676
Mr. Bowlin $590,371 $52,012
Mr. Middleton $468,373 $111,441
Mr. Arnault $727,394 $111,441
Mr. Wade $576,175 $56,646
</TABLE>
10
<PAGE>
PERFORMANCE GRAPH*
The graph below compares the cumulative total stockholder return of the Company
with the cumulative total return on the S&P 500 Stock Index and a group of
eight other peer companies.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN**
ARCO Common, S&P Composite-500 and Peer Group***
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period [COMPANY S&P
(Fiscal Year Covered) NAME HERE] 500 INDEX Peer Group
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-12/31/88 $100 $100 $100
FYE 12/31/89 $144.5 $135.7 $131.6
FYE 12/31/90 $166.9 $140.3 $127.5
FYE 12/31/91 $151.1 $156.5 $166.3
FYE 12/31/92 $170.6 $162.7 $179.0
FYE 12/31/93 $164.3 $188.1 $197.0
</TABLE>
- --------
* Pursuant to the Proxy Rules, this section of the proxy statement is not
deemed "filed" with the SEC and is not incorporated by reference into the
Company's Report on Form 10-K.
** Assumes the value of the investment in ARCO Common Stock and each index was
$100 on December 31, 1988 and that all dividends were reinvested.
*** Peer group includes Amoco, Occidental, Phillips, Unocal, Chevron, Exxon,
Mobil and Texaco, weighted for market capitalization as of the beginning of
each year of the five-year period.
11
<PAGE>
REPORT OF COMPENSATION COMMITTEE*
The Compensation Committee of ARCO's Board of Directors ("the Committee")
administers ARCO's executive compensation program. At the meeting held on
February 28, 1994, the Committee was composed of the nine non-employee
directors listed below, none of whom have ever served as officers of the
Company.
Compensation Philosophy
ARCO's executive compensation program is designed to facilitate the long-term
success and growth of the Company through the attraction, motivation and
retention of outstanding executives. As part of this goal, ARCO seeks to align
its compensation programs for senior management with the Company's performance.
The Committee has conducted a full review of ARCO's executive compensation
program. The Committee considers various qualitative and quantitative
indicators of corporate and individual performance in determining the level of
compensation for ARCO's Chief Executive Officer ("CEO") and its other executive
officers. The review has included an evaluation of ARCO's performance both on a
short and long-term basis. The Committee's review contained an analysis of
quantitative measures, such as total return to stockholders, return on
stockholders' equity and percent change in operating and net income. The
Committee also considered qualitative measures such as leadership, experience,
strategic direction, community representation and social responsibility. The
Committee has been sensitive to management's maintaining a balance between
actions to foster long-term value creation, as well as short-term performance.
The Committee also evaluates total executive compensation in light of the
compensation practices and corporate financial performance of an oil industry
peer group ("Peer Group"). The Peer Group, composed of a group of eight
integrated major oil companies that the Committee believes are comparable to
the Company, is the same peer group used in the Performance Graph on page 11 of
the Proxy Statement. Depending on the Company's performance relative to the
Peer Group and individual performance, the Committee determines appropriate
base salary, annual incentive award and long-term incentive award levels for
the Company's executives. The Committee does not, however, apply any specific
quantitative formulae in arriving at its compensation decisions.
Components of Executive Compensation
Base salaries are set at levels considered appropriate in light of the scope of
responsibilities of each executive officer's position. Base salaries are
reviewed each year and generally are adjusted relative to individual
performance and competitive salaries within the Peer Group.
The CEO and the other executive officers receive incentive compensation awards
under the Company's Annual Incentive Plan ("AIP") and the ARCO 1985 Executive
Long-Term Incentive Plan ("LTIP"). Awards under the AIP are generally made in
February of each year. In accordance with the AIP, bonus award levels are based
primarily on ARCO's performance versus that of the Peer Group over the short
and long-term. Specific factors taken into consideration included total return
to stockholders, change in adjusted net income, return on stockholders' equity
and return on capital employed.
The LTIP authorizes the Committee to make awards of stock options with dividend
share credits. Annual stock option awards are granted each February at an
exercise price equal to the fair market value of Common Stock on the date of
grant. Dividend share credits are based on Common Stock dividend payments. See
footnote (d) to the Summary Compensation Table. The Committee
- --------
*Pursuant to the Proxy Rules, this section of the proxy statement is not deemed
"filed" with the SEC and is not incorporated by reference into the Company's
Report on Form 10-K.
12
<PAGE>
believes stock options with dividend share credits are an effective long-term
award instrument because they focus management's attention on total return to
stockholders through share price appreciation and dividend payments. The
Committee determines stock option awards based on Company and individual
performance. The LTIP also authorizes awards of restricted stock. Although the
Committee made one award of restricted stock in 1992, as described in the
Summary Compensation Table, it has made no awards of restricted stock since
then.
Each year an independent compensation consultant reviews the Company's
executive compensation program. The review includes an assessment of the
Company's executive compensation recommendations with regard to compensation
levels and Company performance relative to the Peer Group. After reviewing the
1993 program, the consultant concluded that ARCO's 1993 executive compensation
program was reasonable in view of the Company's short and long-term
performance.
Compensation of Chief Executive Officer
In evaluating the compensation of Lodwrick M. Cook, the Company's Chairman of
the Board and CEO for the year ended December 31, 1993, the Committee
recognized that many of the Company's 1993 goals and objectives were achieved.
ARCO's return on stockholders' equity and return on capital employed for 1993
exceeded the Peer Group average and have been number one among the Peer Group
for the past five years. However, given the trend of declining crude oil prices
in 1993 and ARCO's high leverage relative to crude oil prices compared to the
Peer Group, ARCO's net income performance and total return to stockholders
trailed the Peer Group average in 1993. ARCO also believes that a significant
factor in its below average total return to stockholders over the five year
period depicted on page 11 of this Proxy relates to the decline in West Texas
Intermediate crude oil price from $17.18 on December 31, 1988 to $14.19 on
December 31, 1993. The results of the Company's 1993 exploration program in
Alaska were also disappointing.
Based on the Company's performance and compensation philosophy and the
uncertain outlook for crude oil prices, in February 1994, the Board approved
the following compensation program for Mr. Cook and guidelines for the other
named executive officers listed in the Summary Compensation Table (the "NEOs"):
- No salary increases will be given for 1994. Mr. Cook's annual salary
will remain at $1,155,000.
- Cash bonus awards will be reduced 20% from last year's awards. Mr. Cook
was awarded a cash bonus of $560,000, a reduction of $140,000 from last
year.
- Stock option awards are targeted at the middle of the Peer Group's long-
term incentive awards. Mr. Cook was awarded 35,900 stock options.* This
award level has a lower economic value than the 1993 award.
The Compensation Committee also approved the compensation of ARCO's other
executive officers for 1993, following the principles and procedures outlined
in this report and specific guidelines for 1994 calling for no salary
increases, 20% bonus reductions and reduced LTIP awards. Exceptions are made
for individual executives who are promoted.
Omnibus Budget Reconciliation Act of 1993
Section 162(m) of the Internal Revenue Code (the "Code") enacted pursuant to
the Omnibus Budget Reconciliation Act of 1993 (the "1993 Act") limits the
deductibility to the Company of cash compensation in excess of $1 million paid
to the Company's NEOs during any fiscal year, beginning with 1994, unless such
compensation meets certain requirements. Following a review of the Company's
executive compensation program in light of the requirements of the 1993 Act,
the Board approved certain changes in the program in order to provide for the
deductibility of awards under the AIP.
- --------
*This number is an estimate; the final number will be furnished as soon as it
is available.
13
<PAGE>
The Board has adopted, subject to approval by stockholders, an amendment to the
AIP, effective for awards made in 1995 for performance during 1994. The
amendment establishes strictly quantitative performance criteria that must be
met before bonus payments will be made. The Committee believes that such
criteria for the NEOs will provide clear and objective incentives for ARCO's
management. A detailed description of the proposed amendment to the AIP is
described at page 20 of this Proxy Statement.
The Committee also believes it should retain flexibility to reward executive
officers and other key employees for extraordinary contributions which cannot
be properly recognized under the highly quantitative terms of the AIP, as
amended. As a result, the Board of Directors has adopted a special cash
incentive plan (the "1994 Plan"). It is not the intention of the Committee to
use the 1994 Plan frequently. The Committee also recognizes that any bonus
awards made under the 1994 Plan will be subject to Section 162(m) of the Code
and thus not deductible to the extent that they relate to the NEOs and
constitute cash compensation in excess of $1 million. Because the Board
believes the 1994 Plan is an integral part of its executive compensation
program, it will submit the 1994 Plan to stockholders for their approval, as
described at page 21 of this Proxy Statement, although there is no requirement
to do so.
Should stockholders approve the amendment to the AIP and the 1994 Plan, the
Company will have, with its LTIP, an executive compensation incentive program
that more directly and quantitatively links executive compensation with Company
and individual performance. The Committee believes the AIP, as amended, and the
LTIP (which has been amended to comply with the technical requirements of
Section 162(m)) will also comply with Section 162(m), allowing the Company to
deduct compensation paid to executives under these two plans.
Henry Wendt, Chairman Hanna H. Gray David T. McLaughlin
Frank D. Boren Philip M. Hawley John B. Slaughter
Richard H. Deihl Kent Kresa Hicks B. Waldron
February 28, 1994
14
<PAGE>
Estimated Retirement Benefits
The following table shows estimated annual pension benefits payable to officers
and other key employees upon retirement on January 1, 1994 at age 65 under the
provisions of the Atlantic Richfield Retirement Plan II and the Supplementary
Executive Retirement Plan currently in effect.
<TABLE>
<CAPTION>
Average Final Earnings
(Average of Highest Three Approximate Annual Benefit for Years of
Consecutive Years of Base Membership Service Indicated(a)(b)
Salary Plus Annual --------------------------------------------------
Incentive Plan Awards) 20 Years 25 Years 30 Years 35 Years 40 Years
- ------------------------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$2,250,000 $692,000 $864,000 $1,037,000 $1,210,000 $1,373,000
2,000,000 615,000 768,000 922,000 1,075,000 1,220,000
1,750,000 538,000 672,000 806,000 941,000 1,068,000
1,500,000 461,000 576,000 691,000 806,000 915,000
1,250,000 384,000 479,000 575,000 671,000 762,000
1,000,000 307,000 383,000 460,000 536,000 609,000
750,000 230,000 287,000 344,000 402,000 456,000
500,000 153,000 191,000 229,000 267,000 303,000
250,000 76,000 94,000 113,000 132,000 150,000
</TABLE>
- --------
(a) The amounts shown in the above table are necessarily based upon certain
assumptions, including retirement of the employee on January 1, 1994 and
payment of the benefit under the basic form of allowance provided under the
Retirement Plan (payment for the life of the employee only with a
guaranteed minimum payment period of 60 months). The amounts will change if
the payment is made under any other form of allowance permitted by the
Retirement Plan, or if an employee's retirement occurs after January 1,
1994, because the Social Security Integration Level of such employees (one
of the factors used in computing the annual retirement benefits) may change
during the employee's subsequent years of membership service. The benefits
shown are not subject to deduction for Social Security benefits or other
offset amounts.
(b) As of December 31, 1993, the credited years of service under the Retirement
Plan for the five most highly compensated executive officers were: Mr.
Cook, 36.916; Mr. Bowlin, 25; Mr. Middleton, 34.166; Mr. Arnault, 24.666;
and Mr. Wade, 25.583.
15
<PAGE>
COMPENSATION OF DIRECTORS
Directors' Fees
Directors who are employees of the Company are not paid any fees or additional
compensation for service as members of the Board or any Board committee.
Directors who are not employees of ARCO, including former officers of ARCO who
are directors, receive an annual fee of $40,000 and $1,000 for each Board or
committee meeting attended. In addition, the Chairmen of the Audit,
Compensation and Environment, Health and Safety Committees each receive $18,000
per year and the Chairman of the Nominating Committee receives $5,000 per year.
Directors' fees may be deferred pursuant to the Outside Directors' Deferral
Plan described below.
Retirement Plan for Outside Directors
The Atlantic Richfield Company Retirement Plan for Outside Directors (the
"Outside Directors' Retirement Plan") is an unfunded, non-qualified retirement
plan for directors who are not employees of ARCO. They are eligible to
participate after serving three years as a member of the Board of Directors.
The annual retirement benefit is equal to the director's annual retainer fee
immediately preceding the participant's retirement from the Board. The benefit
is payable for the period equal to the time the director served on the Board.
However, if a director has served for at least 15 years as a member of the
Board, the benefit will be paid for the greater of the period described in the
preceding sentence or until death. Retired officers of ARCO who are directors
participate in the Outside Directors' Retirement Plan commencing three years
after their retirement.
Stock Option Plan for Outside Directors
The Atlantic Richfield Company Stock Option Plan for Outside Directors (the
"Outside Directors' Plan") provided that in December 1990, when the plan was
adopted, ten-year nonqualified stock options to purchase 1,000 shares of Common
Stock were granted to each outside director at an exercise price per share
equal to the fair market value of Common Stock on the date of grant.
Thereafter, each newly elected outside director will be granted ten-year
options to purchase 1,000 shares of Common Stock. The number of shares of
Common Stock reserved for issuance under the Outside Directors' Plan is 40,000.
No options may be granted after December 31, 2000. Dividend share credits are
allocated in respect of outstanding options on the same terms on which they are
allocated under the LTIP. See "Compensation of Executive Officers--Summary
Compensation Table," footnote (d). The Outside Directors' Plan is administered
by the Outside Director Stock Option Plan Committee appointed by the Board of
Directors. No member of the Board of Directors serves on this committee.
Deferral Plan for Outside Directors
The Atlantic Richfield Company Deferral Plan for Outside Directors (the
"Outside Directors' Deferral Plan") was adopted in 1990 to permit outside
directors to defer up to 100% of their annual retainer and meeting fees to
which they are entitled. In 1993 the outside directors with deferral accounts
and the amount of accrued interest exceeding 120% of a specified IRS rate were:
Mr. Gavin: $5,112; Mr. Kresa: $20; Mr. McLaughlin: $648; and Mr. Wendt: $6,963.
16
<PAGE>
BOARD OF DIRECTORS
DIRECTORS' MEETINGS
The Board of Directors met ten times during 1993. All of ARCO's directors
attended 75% or more of the aggregate of all meetings of the Board of Directors
and committees on which they served during 1993.
EXECUTIVE COMMITTEE
The Executive Committee has and may exercise all the authority of the Board of
Directors in the management of the business of ARCO in the interim between
meetings of the Board of Directors. The Committee met one time in 1993.
The Executive Committee presently consists of Mr. Cook, Chairman, and Messrs.
Arnault, Bowlin, Deihl, Hawley, Middleton and Wade.
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors reviews and approves
compensation plans and such other benefits as it deems advisable, makes
recommendations to the Board as to management succession plans and administers
the following executive benefit plans of ARCO: the LTIP, the AIP, the
Supplementary Executive Retirement Plan and the Executive Supplementary Savings
Plan. No member of the Committee is an officer or employee of the Company or a
former officer of the Company and no member is eligible to participate in any
benefit plan of the Company that is administered by the Committee. The
Committee met four times during 1993.
The Compensation Committee presently consists of Mr. Wendt, Chairman, Mrs. Gray
and Messrs. Boren, Deihl, Hawley, Kresa, McLaughlin, Slaughter and Waldron.
NOMINATING COMMITTEE
The Nominating Committee of the Board of Directors considers and makes
recommendations to the Board as to the number of directors to constitute the
whole Board, the names of persons whom it concludes should be considered for
Board membership, and makes recommendations as to the selection, tenure and
retirement of directors. The Committee met four times during 1993. The
Committee will consider nominees recommended by stockholders. Such
recommendations should be submitted to the Corporate Secretary.
The Nominating Committee presently consists of Mr. Hawley, Chairman, and
Messrs. Cook, Kieschnick and Waldron.
AUDIT COMMITTEE
The objectives of the Audit Committee are to assist the Board of Directors in
fulfilling its fiduciary responsibilities relating to the Company's financial
reporting standards and practices, to determine the adequacy of and promote the
Company's continued emphasis on managerial and financial control systems, to
maintain open, continuing and direct communication between the Board of
Directors and both the Company's independent public accountants and its
internal auditors, and to instigate any special investigations of conflicts of
interest and compliance with federal, state and local laws and regulations,
including the Foreign Corrupt Practices Act, as may be warranted. The
independent accountants and the internal auditors have full and free access to
the Audit Committee and meet with
17
<PAGE>
it, with and without management being present, to discuss all appropriate
matters. No member of the Committee is an officer or employee of the Company.
The Committee met three times in 1993.
The Audit Committee presently consists of Mr. Deihl, Chairman, Mrs. Gray and
Messrs. Gavin, Hawley and McLaughlin.
ENVIRONMENT, HEALTH AND SAFETY COMMITTEE
The Environment, Health and Safety Committee of the Board of Directors reviews
and assesses the Company's policies, procedures and practices relating to (i)
the protection of the environment and the health and safety of employees,
customers, contractors and the public, (ii) compliance with applicable laws and
regulations and (iii) development of Company environmental, health and safety
goals and objectives. The Committee also makes recommendations to the Board as
to such policies, procedures and practices. No member of the Committee is an
officer or director of the Company. The Committee met three times in 1993.
The Environment, Health and Safety Committee presently consists of Mr.
Kieschnick, Chairman, and Messrs. Boren, Kresa, Slaughter, Waldron and Wendt.
PROPOSAL FOR ADOPTION OF AMENDMENTS TO THE CERTIFICATE OF INCORPORATION--ANNUAL
ELECTION OF THE BOARD OF DIRECTORS
Item 2 on Proxy Card
The Board of Directors has adopted a resolution declaring the advisability of
an amendment to the Certificate of Incorporation of the Company to authorize
the annual election of the Board of Directors. The Certificate currently
divides the Board into three classes of directors. Directors are elected for
three year terms with one class elected each year. As amended, the Certificate
will provide that in future years, as directors' terms expire, all directors
will be elected each year at the Annual Meeting of Stockholders. The proposed
amendment is attached hereto as Appendix A. The discussion hereunder is
qualified in its entirety by reference to Appendix A.
In 1985, the Company changed its state of incorporation from Pennsylvania to
Delaware. The new state of incorporation provided for classifying the Board
into three classes. At the time the stockholders were asked to approve the re-
incorporation, the Board stated that "a classified Board will help to ensure
the continuity and stability of the Company's management and policies in the
future, since a majority of the directors at any given time will ordinarily
have prior experience as directors of the Company."
In 1993, the stockholders voted on a stockholder proposal urging that the Board
take the necessary steps to declassify the Board. The Board of Directors
recommended a vote against the proposal, and stated the following reasons in
support of its recommendation.
"A classified board guarantees that a significant majority of the Board
will have experience with the business affairs and operations of the
Company. A classified board permits the Company to attract and retain
prominent and well-qualified individuals who are able to commit the time
and resources to understand the Company and its operations. The continuity
and quality of leadership that results from the classified board creates
long-term value for the stockholders.
18
<PAGE>
A classified board reduces the possibility of a sudden and surprise change
in majority control of the Board. The provision also has the effect of
impeding disruptive and inequitable tactics that have become relatively
common corporate takeover practices. In the event of a hostile takeover
attempt, the fact that approximately two-thirds of the Board members have
tenure for more than a year permits bargaining for the best terms and the
highest value of the stock of the Company."
At the 1993 Annual Meeting of Stockholders, 34.6 percent of the votes cast were
in favor of the stockholder proposal to declassify the Board.
This stockholder proposal was refiled for inclusion in the 1994 Proxy. The
proponents have agreed to withdraw their proposal if the ARCO Board agrees to
recommend the annual election of directors. In their supporting statement, the
proponents stated:
"The Board of Directors of ARCO is divided into three classes serving
staggered three-year terms. It is our belief that the classification of the
Board of Directors is not in the best interests of the Company and its
shareholders. The elimination of the staggered board would require each
director to stand for election annually. This procedure would allow
shareholders an opportunity to annually register their views on the
performance of the board collectively and each director individually.
Concerns that the annual election of all directors would leave the Company
without experienced board members in the event that all incumbents are
voted out is unfounded. If the owners should choose to replace the entire
board, it would be obvious that the incumbent directors' contributions were
not valued."
The Board is of the opinion that the advantages of a classified board set out
in its earlier statements still exist. However, the Board also acknowledges
that a significant number of stockholders voted last year to declassify the
Board, and recognizes that many institutional stockholders now believe that
annual election of all directors is appropriate. The Board does not believe
that the advantages of a classified board are sufficient to offset the
disadvantages of being at odds with a large percentage of stockholders. The
Board believes that the issue should be decided by the stockholders. Delaware
law provides that before an amendment to the Certificate of Incorporation may
be submitted to the stockholders for their vote, the Board of Directors must
declare the advisability of the amendment. In discharge of this requirement,
the Board has passed the necessary resolution and formally recommends an
affirmative vote.
Adoption of the proposed amendment to the Certificate of Incorporation will
require the affirmative vote of two-thirds of the outstanding shares of Common
Stock together with the holders of the Preference Stocks, voting together as
one class, entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS
SPECIFY OTHERWISE.
19
<PAGE>
PROPOSAL TO AMEND THE COMPANY'S ANNUAL INCENTIVE PLAN
Item 3 on Proxy Card
The 1993 Act applies to cash bonus plans such as the AIP, in respect of the tax
deductibility by a company of compensation expense that exceeds $1 million for
the NEOs. In order to qualify as deductible compensation expense, a cash bonus
plan must include objective rather than subjective performance standards.
Following adoption of the 1993 Act, the Compensation Committee of the Board
determined it was in the best interests of the Company to amend the AIP to
include performance standards that meet the requirements of the 1993 Act and
recommended such action to the Board. In February 1994, the Board amended the
AIP, subject to stockholder approval, commencing with awards that will be made
in February 1995 for performance in fiscal year 1994. Accordingly, the Board of
Directors is requesting the stockholders to approve this amendment. Following
is a summary of this amendment, which summary is qualified in its entirety by
reference to Appendix B.
Prior to adoption of this amendment, the AIP required the Compensation
Committee to compare selected performance criteria to that of a peer group. The
Compensation Committee retained discretion to select the criteria, to determine
the size of the awards and to weigh the factors used. The Committee considered
various quantitative and qualitative indicators of corporate performance in
determining bonus awards.
In accordance with the requirements of the 1993 Act, the AIP, as amended,
establishes a specific performance measure and a formula for establishing the
maximum size of the bonus awards for the NEOs. Maximum target award levels are
set for each participant, expressed as a percentage of base salary, at
approximately the 50th percentile of the Peer Group's bonus awards. The Peer
Group, made up of Amoco, Chevron, Exxon, Mobil, Occidental, Texaco, Phillips
and UNOCAL, is the same group of comparable companies used by the Compensation
Committee in determining executive compensation. The performance measure
selected is ARCO's three-year simple average return on stockholders' equity
("ROSE"). A three-year simple average ROSE recognizes the long-term investment
structure of the oil industry and also mitigates the effects of sharp swings in
year-to-year results.
ARCO's three-year ROSE will be compared to the simple average of the three-year
ROSE of the Peer Group ("Peer Group ROSE"). To the extent ARCO's ROSE exceeds
the Peer Group ROSE, the percentage of the target award level earned will be
adjusted proportionally upward; to the extent ARCO's ROSE is less than the Peer
Group ROSE, the maximum award level earned will be reduced proportionally; in
the event ARCO's ROSE is less than 75% of the Peer Group ROSE, no awards will
be paid out. For example, if ARCO's ROSE is 12% and the Peer Group ROSE is 10%,
then 120% of the target award levels will be paid out; on the other hand, if
ARCO's ROSE is 8% and the Peer Group ROSE is 10%, then 80% of the target levels
will be paid out. If ARCO's ROSE is 7.4% and the Peer Group ROSE is 10%, then
no bonus payments will be made.
Maximum total award payouts will also be adjusted based on the size of the
funding pool. The funding pool will be limited by the AIP to 2% of adjusted net
income. Adjusted net income is defined as after tax operating income as
adjusted to exclude non-routine or "special" items.
After the maximum award payouts have been calculated according to the above
methodology, the Compensation Committee will review the amounts in light of
Company and individual performance. The Compensation Committee will have no
discretion to increase award payouts to NEOs, above the maximum amounts, but
will retain discretion to lower award payouts to NEOs following this review.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS
SPECIFY OTHERWISE.
20
<PAGE>
PROPOSAL TO ADOPT 1994 SPECIAL INCENTIVE PLAN
Item 4 on Proxy Card
As previously described in the Report of Compensation Committee at page 12 of
the Proxy Statement, the Compensation Committee has recommended to the Board of
Directors, and the Board has adopted, subject to stockholder approval, the 1994
Special Incentive Plan (the "1994 Plan"), applicable to awards made in 1995 and
thereafter for fiscal years 1994 and thereafter. Accordingly, the Board of
Directors is requesting the stockholders to approve the 1994 Plan. Following is
a summary of the 1994 Plan, which summary is qualified in its entirety by
reference to Appendix C.
The Board has determined to submit the 1994 Plan to stockholders for their
approval, even though such approval is not required. The Committee believes it
should have the flexibility to make bonus awards to executive officers and
other key employees to recognize individual performance. The Committee
recognizes that any award made to an NEO whose total annual compensation
exceeded $1 million might not be deductible as a compensation expense for tax
purposes. It is not the intention of the Committee to use the 1994 Plan
frequently to make awards to NEOs.
The Committee has also proposed amending the AIP to provide that bonuses paid
thereunder are performance-based, as described at page 20 of this Proxy
Statement. The Committee intends to make annual bonus awards pursuant to the
performance-based program contained in the AIP, as amended. The Committee
believes, however, the 1994 Plan is necessary to allow it to reward individual
performance that cannot be recognized adequately under the terms of the
strictly quantitative performance-based bonus program alone.
The 1994 Plan is subject to an annual funding limit of $3.5 million. To the
extent that awards made in any year do not exceed the funding limit, any funds
allocated to the pool will revert to general corporate funds.
The Board believes that these guidelines and limits will protect against abuse
of the Committee discretion in making awards under the 1994 Plan. The Committee
also believes that adoption of the 1994 Plan is appropriate in connection with
adoption of the performance-based formula amendments to the AIP. Finally, the
Board believes the existence of the 1994 Plan will provide added incentive for
executive performance beneficial to the stockholders.
REQUIRED VOTE
The amendment will be approved if it receives the affirmative vote of a
majority of the shares of Common Stock and Preference Stock of the Company
represented in person or by proxy at the meeting voting together as one class.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE ADOPTION OF
THE 1994 PLAN. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED
UNLESS STOCKHOLDERS SPECIFY OTHERWISE.
21
<PAGE>
PROPOSAL TO APPROVE THE APPOINTMENT OF INDEPENDENT AUDITORS
Item 5 on Proxy Card
The Board of Directors has appointed Coopers & Lybrand, Certified Public
Accountants, to audit the financial statements of ARCO and its consolidated
subsidiaries for the year 1994. Coopers & Lybrand has acted in this capacity
for many years. Since June 1987 Coopers & Lybrand has also acted as the
independent auditor for ARCO Chemical. In addition, since July 1988 Coopers &
Lybrand has acted as the independent auditor for Lyondell and since October
1993 of the Company's wholly-owned subsidiary, Vastar Resources, Inc. From time
to time Coopers & Lybrand also performs consulting work for ARCO and its
subsidiaries. The firm has no other relationship with ARCO or any of its
subsidiaries except the existing professional relationships of Certified Public
Accountants.
Representatives of Coopers & Lybrand will be present at the meeting and will
have the opportunity to make a statement if they desire to do so. These
representatives will also be available to respond to appropriate questions.
The proposal will be approved if it receives the affirmative vote of a majority
of votes of the shares represented at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE APPOINTMENT
OF COOPERS & LYBRAND. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE.
22
<PAGE>
STOCKHOLDERS' PROPOSALS
Item 6 on Proxy Card
The following stockholder proposals have been submitted for a vote of the
stockholders at the Annual Meeting. The proposals and proponents' statements in
support thereof are set forth on the following pages along with the Company's
reasons for recommending a vote AGAINST each proposal. To be adopted, each
proposal must be approved by the affirmative vote of the majority of shares
present in person or represented by proxy at the Annual Meeting.
PROPOSAL A
Item 6A on Proxy Card
PUBLIC ENVIRONMENTAL REPORTING
Management has been advised that the American Baptist Home Mission Society,
Valley Forge, Pennsylvania, the owner of 2,500 shares, and seven co-filers
consisting of six religious organizations holding 35,744 shares and one
foundation holding 2,000 shares intend to submit the following proposal at the
meeting:
WHEREAS WE BELIEVE: The responsible implementation of sound environmental
policy increases long-term shareholder value by increasing efficiency,
decreasing clean-up costs, reducing litigation, and enhancing public image and
product attractiveness;
Adherence to public standards for environmental performance gives a company
greater public credibility than is achieved by following standards created by
industry alone for itself. In order to maximize public credibility and
usefulness, such standards also need to reflect what investors and other
stockholders want to know about the environmental records of their companies;
Standardized environmental reports will provide shareholders with useful
information which allows comparisons of performance against uniform standards
and comparisons of progress over time. Companies can also attract new capital
from investors seeking investments that are environmentally responsible,
responsive, progressive, and which minimize the risk of environmental
liability.
AND WHEREAS: The Coalition for Environmentally Responsible Economies (CERES) --
which comprises large institutional investors with $150 billion in
stockholdings (including shareholders of this Company), public interest
representatives, and environmental experts -- consulted with dozens of
corporations and produced comprehensive public standards for both environmental
performance and reporting. Over 50 companies have endorsed the CERES Principles
- -- including the Sun Company, a Fortune 500 company -- to demonstrate their
commitment to public environmental accountability.
In endorsing the CERES Principles, a company commits to work toward:
1. Protection of the biosphere
2. Sustainable use of natural resources
3. Waste reduction & disposal
4. Energy conservation
5. Risk reduction
6. Safe products and services
7. Environmental restoration
8. Informing the public
9. Management commitment
10. Audits and reports
23
<PAGE>
The full text of the CERES Principles and the accompanying CERES Report Form
are available from CERES, 711 Atlantic Avenue, Boston MA 02110, tel: 617/451-
0927.
Concerned investors are asking the Company to be publicly accountable for its
environmental impact, including collaboration with this corporate,
environmental, investor, and community coalition to develop (a) standards for
environmental performance and disclosure; (b) appropriate goals relative to
these standards; (c) evaluation methods and tools for measurement of progress
toward these goals; and (d) a format for public reporting of this progress.
We believe this request is consistent with regulation adopted by the European
Community for companies' voluntary participation in verified and publicly-
reported eco-management and auditing.
RESOLVED: Shareholders request the Company to prepare a report at reasonable
cost and omitting proprietary information, describing company programs,
progress, and future plans relative to the CERES Principles, and using the
standard CERES Report Form as a guide.
STATEMENT OF PROPOSING STOCKHOLDER
We believe that investors and customers are expecting comprehensive and
impartial environmental reports by business, as a sign of corporate commitment
to environmental excellence. Without this public scrutiny, corporate
environmental policies and reports lack the critical component of adherence to
standards set not only by management but also by other stakeholders.
Shareholders are invited to support this resolution, to encourage our Company
to demonstrate environmental leadership and account for its environmental
impact.
RECOMMENDATION OF DIRECTORS AGAINST THE PROPOSAL
THE BOARD OF DIRECTORS ASKS THAT YOU VOTE NO ON THIS PROPOSAL. The proposal is
substantially similar to proposals included in the Company's 1990, 1991, 1992
and 1993 proxy statements which were overwhelmingly rejected each year.
CERES, as distinct from some of its members, including the five co-filers of
this proposal, is not an ARCO stockholder. CERES, as an entity, has no
financial or ownership interest in ARCO, but would nonetheless seek
comprehensive oversight of reports that ARCO might make to the public and
review of ARCO activities and operations. CERES seeks from ARCO extensive data
which it could then use or publicize without regard to the wishes of other
stockholders or management. Should ARCO accede to the proposal, it would be
required to embark on a complex reporting regimen generally not required of its
competitors or other companies. The Company believes that the CERES reporting
format is unduly complex, lengthy, not individualized in any way, and rigid.
The Company also believes the reporting requirements proposed by CERES are
totally inappropriate. The format is long, complicated, ambiguous and makes no
allowance for variations in individual businesses like ARCO. Moreover, only the
small number of publicly owned companies that have entered into agreements with
CERES are required to report. The Company views the CERES proposal as
discriminatory and completely unacceptable.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE
PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY OTHERWISE.
24
<PAGE>
PROPOSAL B
Item 6B on Proxy Card
ENVIRONMENTAL LIABILITY DISCLOSURE
Management has been advised that Nancy Aries and Elliott Sclar, holding 50
shares, intend to submit the following proposal on behalf of Friends of the
Earth at the meeting:
Whereas, the U.S. Securities and Exchange Commission ("SEC") requires publicly-
held corporations to disclose potential environmental liabilities to
shareholders;
Whereas, ARCO, in its SEC reports, lists instances of potential environmental
liability that may accrue to the company in pollution and toxic waste cleanup
activities, proposed government actions, fines, and litigation;
Whereas, it is unclear how much additional environmental liability, cleanup
responsibility, and remediation costs may exist at ARCO facilities beyond those
presently reported; Therefore, be it
RESOLVED: That the shareholders of ARCO, assembled in annual meeting in person
and by proxy, request that the Board of Directors prepare a brief report
explaining ARCO policy on SEC environmental reporting, also explaining how the
company now determines which environmental liabilities, cleanup
responsibilities, and remediation costs to disclose to shareholders.
REASONS: A Price Waterhouse survey of securities issuers in 1992 found that as
many as 62% of the responding companies had known environmental liability
exposures that were not yet recorded in financial statements. In addition, in
the U.S. oil industry, there have been recent disclosures of leaking petroleum
and petrochemical facilities nationwide.
Government regulators and some industry officials now state that underground
hydrocarbon plumes, petrochemical pollution, and related leakage are likely to
be found throughout the U.S. petroleum industry. In some cases, groundwater
contamination and long-term cleanup may be involved, public health concerns may
arise, and extensive compensation or real estate buy outs may also be required.
ARCO, for example, has been implicated in a number of hydrocarbon clean-up
cases.
STATEMENT OF PROPOSING STOCKHOLDER
In E. Chicago, Indiana, at a former ARCO refinery, ARCO is engaged in a cleanup
of millions of gallons of leaked petroleum floating on groundwater beneath the
280-acre former refinery. In Los Angeles, ARCO is one of five oil companies
negotiating with the LAX Fuel Corporation at the Los Angeles International
Airport over clean-up costs for a leaked underground petroleum plume at a fuel
terminal previously operated by the oil companies.
In 1993 litigation over responsibility for hydrocarbon plumes beneath East
Coast facilities formerly owned by ARCO, memoranda and internal documents
surfaced in court which showed that ARCO knew about certain underground leaks
and plumes for some years but did not disclose such information to shareholders
or public officials.
While the financial sums involved in individual cases such as these may not be
of a magnitude in themselves to affect the financial soundness of the company,
in the aggregate, such cases may add up to significant liabilities over time
that shareholders should be informed about. There are also other potential
costs and consequences arising from such cases--either individually or
collectively--that may affect the economic future of the company, such as
negative public opinion, potential loss of market share, and erosion of stock
value resulting from one or more long-term exposure.
25
<PAGE>
ARCO shareholders, in evaluating the company's operations and its continued
economic prospects, need to receive the best possible information on the
company's current assets and liabilities, including prospective environmental
liabilities, as reasonably as these can be assembled and forecast.
For these reasons and others, it is imperative that management issue a brief
report explaining the company policy and methodology for reporting
environmental liabilities--including, but not limited to--those required by the
SEC, as well as others which cumulatively could effect the company's asset-to-
liability ratio, its public reputation, its stock performance, and its market
value.
If you AGREE, please mark your proxy FOR this resolution.
RECOMMENDATION OF DIRECTORS AGAINST THE PROPOSAL
THE BOARD OF DIRECTORS ASKS THAT YOU VOTE NO ON THIS PROPOSAL. The SEC has had
in place for a number of years extensive and detailed regulations governing the
disclosure of liabilities, including environmental liabilities, cleanup
responsibilities and remediation costs to a registrant's stockholders in the
annual and quarterly reports required to be filed with the SEC ("SEC Reports").
In recent years the SEC has taken actions and issued interpretative releases
that have resulted in expanded environmental disclosures by publicly reporting
companies. These expanded disclosures include quantification of effects on the
registrant's future financial condition or results of operations of its being
designated a "potentially responsible party" ("PRP") at a Superfund site
(Release No. 33-6835 (the "Release")) and expanded disclosure of certain
environmental expenditures that can be anticipated in the future, although not
presently required (Staff Accounting Bulletin No. 92 ("SAB 92")). In addition
to this interpretative guidance, the SEC has also had in place a program to
review disclosures in the "Management's Discussion and Analysis" section
("MD&A") of the SEC Reports. Most recently, this review program has focused on
MD&A disclosures contained in the routine filings of SEC Reports, including
those filed by ARCO; previously, the review had targeted specific industries or
specific filings made in connection with equity or debt financings.
ARCO, in response to the actions of the SEC described above, expanded the
environmental disclosures included in its 1993 SEC Reports and its audited
financial statements for the year ended December 31, 1993 ("1993 Financials")
to include a number of additional disclosures regarding environmental
liabilities. This expanded disclosure is included in the 1993 Annual Report to
Stockholders being sent to stockholders along with this Proxy Statement. ARCO's
policy has always been to comply with all SEC disclosure rules regarding
environmental liability, and the Company believes that its 1993 Financials,
along with other disclosures regarding environmental liabilities included in
its Report on Form 10-K for the year ended December 31, 1993 ("1993 10-K"),
fully comply with the SEC's disclosure rules, as interpreted by the Release and
SAB 92. The Company believes that the disclosures included in the 1993 10-K and
1993 Financials provide the information that stockholders require to evaluate
the Company's environmental liabilities.
Some of proponents' concerns, as expressed, contain factual inaccuracies. The
Company does not believe, however, that this Proxy Statement is the appropriate
forum for correcting these inaccuracies; rather, the Company refers its
stockholders to the 1993 Annual Report to Stockholders and the 1993 10-K for an
accurate picture of the Company's environmental liabilities and obligations.
Furthermore, the Company believes that the SEC's rules and regulations
regarding environmental liabilities and obligations of registrants, when
implemented in SEC Reports, provide thorough and adequate disclosure to a
Company's stockholders, enabling them to evaluate a Company's operations and
continued economic prospects.
For these reasons, the Company recommends a vote of NO on this proposal.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE
PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY OTHERWISE.
26
<PAGE>
PROPOSAL C
Item 6C on Proxy Card
HEALTH AND SAFETY REPORTING
Management has been advised that the Tri-State Carpenters and Joiners Pension
Trust Fund, holding 3,800 shares, intends to submit the following proposal at
the meeting:
WHEREAS: Increased investor concerns over company track records on corporate
responsibility has led individual and institutional investors to develop
performance criteria on health and safety, the environment and other matters;
WHEREAS: The responsible implementation of policies which enhance health &
safety increases long-term shareholder value by increasing productivity,
decreasing clean-up and downtime costs from accidents, reducing litigation,
enhancing public image and product attractiveness, and attracting new capital
from socially conscious investors;
WHEREAS: Standardized reporting of health & safety policies, the degree to
which those policies have been achieved and the impact of those policies on the
Company's long-term financial performance, employees and surrounding
communities, will provide shareholders with useful information which allows
comparisons of performance against uniform standards and comparisons of
progress over time.
THEREFORE BE IT RESOLVED: That the shareholders of Atlantic Richfield Company
("Company") advise the Board of Directors of the Company to develop and publish
a sound, comprehensive health & safety policy, consistent with applicable laws
and regulations, that addresses the concerns of shareholders, employees and
communities. The health & safety policy should be accompanied by a report
analyzing the long-term impact of the health & safety policy on the Company's
competitiveness and shareholder value, employees and surrounding communities.
This report shall not reveal any proprietary information and shall be prepared
at reasonable cost. Both the health & safety policy and the accompanying report
shall be presented to the shareholders no later than the 1995 annual meeting of
shareholders.
STATEMENT OF PROPOSING STOCKHOLDER
The Company itself experienced a major industrial accident in 1990 when an
explosion and fire ripped through ARCO Chemical's Channelview, Texas plant.
Seventeen workers were killed in the accident. The Occupational Safety and
Health Administration charged ARCO with over 300 "willful violations" and fined
the Company $3.5 million.
In response to an unacceptable level of industrial accidents in the
petrochemical industry, the U.S. Department of Labor commissioned a study of
the problem and issued final rules on process safety management on February 24,
1992. These new regulations are applicable to the Company's operations and
require changes in the manner in which plants are operated.
The manner in which new OSHA requirements for employee training, certification
of such training and employee input into process safety management are
implemented will have a profound impact on the degree to which health & safety
is increased. In turn, improved health & safety increases long-term shareholder
value by raising productivity, decreasing clean-up and downtime costs from
accidents, reducing litigation, enhancing public image and product
attractiveness, and attracting new capital from socially conscious investors.
Investor concerns over the level of industrial accidents in the industry, the
impact of new OSHA regulations, and the importance of health and safety
performance on the financial performance of the Company justifies the adoption
of a sound, comprehensive health & safety policy accompanied by an explanatory
report. We urge your support for this proposal.
27
<PAGE>
RECOMMENDATION OF DIRECTORS AGAINST THE PROPOSAL
THE BOARD OF DIRECTORS ASKS THAT YOU VOTE NO ON THIS PROPOSAL. The proponents
seek to impose standardized reporting of health and safety policies, the degree
to which those policies have been achieved, and the impact of those policies.
The Company's policy is to comply with the numerous federal, state and local
regulations regarding health and safety that are applicable to the Company's
operations. Moreover, the Company believes that an emphasis on health and
safety, in the words of the proponents, "rais[es] productivity, decreas[es]
cleanup and downtime costs from accidents, reduc[es] litigation [and]
enhanc[es] public image." Proponents imply, by requiring the Company to
"develop and publish a sound, comprehensive health & safety policy, consistent
with applicable laws and regulations," that the Company does not have any such
policies. Because the Company has had health and safety policies in place for
the past 20 years and believes that these policies are sound, comprehensive and
consistent with all applicable laws and regulations, it believes it would be
duplicative and unnecessary for stockholders to approve proponents' proposal.
Proponents' reference to the 1990 explosion and fire at ARCO Chemical's plant
in Channelview, Texas implies that they continue to have concerns that the
Company has not sufficiently addressed. The Company believes it has taken
appropriate actions in response to the accident and summarized them in the 1992
Annual Report at page 25: "ARCO's concern for matters of health and safety
underwent a revitalization in 1991 and 1992 because of management's concern
that overall safety performance was not measuring up to ARCO standards.... In
1992, the company increased its emphasis on contractor safety programs." The
Company went on to describe its increased process safety management in all
operations.
As described in this Proxy Statement, the Company has, and has had since 1990,
an Environment, Health and Safety Committee of its Board of Directors (the
"EH&S Committee") that oversees and reviews the Company's health and safety
policies. The Company also conducts audits to look at both management systems
and compliance with health and safety laws and regulations; results of these
audits are reviewed with the EH&S Committee. For a number of years, the Company
has included in its Annual Report a section devoted to reporting on its health
and safety policies and issues; it is included at page 20 of the 1993 Annual
Report to Stockholders that accompanies this Proxy Statement.
For these reasons, the Company believes it adequately reports to its
stockholders on its health and safety policies and that any additional report
is unnecessary.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE
PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY OTHERWISE.
28
<PAGE>
PROPOSAL D
Item 6D on Proxy Card
EQUAL EMPLOYMENT OPPORTUNITY REPORTING
Management has been advised that Franklin Research and Development Corporation,
holding 157 shares, intends to submit the following proposal at the meeting:
We believe there is a strong need for corporate commitment to equal employment
opportunity. We also believe a clear policy of opposing all forms of
discrimination is a sign of a socially responsible corporation. Since a
substandard Equal Employment Opportunity record leaves a company open to
expensive legal action, poor employee morale and even the loss of certain
business, it is in the company's and shareholder's interests to have
information on our company's equal employment record available. By publicizing
our standards, we serve as an example to companies with whom we do business;
We share the concerns of the 1991 United States Congressional Civil Rights and
Glass Ceiling Acts that "...additional remedies under Federal law are needed to
deter harassment and intentional discrimination in the workplace...women and
minorities remain underrepresented in management and decision making positions
in business." We support the statement, "We continue to find that if the CEO is
committed to ensuring diversity, it can happen," as published in the U.S. Labor
Department's report "Pipelines of Progress".
We believe issues related to Equal Employment Opportunity and Affirmative
Action are important to shareholder value. Our goal is to encourage our Board
of Directors and Chief Executive Officer to improve our corporation's Equal
Employment record and that of their industry.
As a major employer we are in a position to take the lead in ensuring that
women and minority employees receive fair employment opportunities and
promotions. We believe a report containing the basic information requested in
this resolution keeps the issue high on management's agenda and reaffirms our
public commitment to Equal Employment Opportunity and programs responsive to
the concerns of women and minorities.
The report requested asks for information already gathered for the purpose of
complying with government regulations. The format of the report requested is
not the central question. Different companies use different styles in telling
their story to shareholders. Capital Cities/American Broadcasting Company,
Bristol-Myers and Travellers produced a substantial magazine style report.
Campbell Soup produced a straightforward four page document.
RESOLVED: The shareholders request the Board to prepare a report at reasonable
cost, available to shareholders and employees reporting on the following
issues. This report, which may omit confidential information, shall be
available by September 1994.
1. A chart identifying employees according to their sex and race in each of the
nine major Equal Employment Opportunity Commission defined job categories
for 1991, 1992, 1993 listing either numbers or percentages in each category.
2. A summary description of any Affirmative Action policies and programs to
improve performances, including job categories where women and minorities
are underutilized.
3. A description of any policies and programs oriented specifically toward
increasing the number of managers, who are qualified females and/or belong
to minorities.
4. A general description of how our company publicizes our company's
affirmative action policies and programs to merchandise suppliers and
service providers.
5. A description of any policies and programs utilizing the purchase of goods
and services from minority- and/or female-owned business enterprises.
29
<PAGE>
STATEMENT OF PROPOSING STOCKHOLDER
Proponents did not furnish any statement supporting their proposal.
RECOMMENDATION OF DIRECTORS AGAINST THE PROPOSAL
THE BOARD OF DIRECTORS ASKS THAT YOU VOTE NO ON THIS PROPOSAL. Proponents
request a report covering five items regarding affirmative action reporting. At
the same time, proponents acknowledge that "The report requested asks for
information already gathered for the purpose of complying with government
regulations." The Company does not believe that a request for a report
duplicative of reports required by law--and so acknowledged by the proponents--
should be approved by stockholders. Furthermore, the Company's policy is to
comply with all applicable governmental regulations, including the compiling
and filing of mandated reports. As part of this duplicative report, proponents
seek a description of certain affirmative action policies adopted by the
Company, apparently in order to "keep the issue [of affirmative action] high on
management's agenda." The Company already has made a public commitment to
programs "responsive to the concerns of women and minorities." The Company has
for a number of years included statements evidencing its commitment to
affirmative action issues in its Annual Report. In its 1992 Annual Report to
Stockholders, the Company stated at page 27:
"Along with ARCO's investments in minority education and drive to increase
purchases from minority and women-owned businesses, ARCO works to shape a
future work force that is reflective of the population. In hiring and
promotion programs, the company seeks out qualified female and minority
candidates. In addition, the company is committed to ensuring that no
individual will be discriminated against on the basis of a disability.
Increasing the number of women and minorities in mid-to-senior levels of
management is also stressed throughout the company."
Moreover, in the 1993 Annual Report to Stockholders, which accompanies this
Proxy Statement, the Company reaffirms its public commitment to affirmative
action concerns and issues such as those specifically described by proponents.
At page 19 the Company states:
"ARCO has also continued its community efforts through a drive to increase
purchases from minority and women-owned businesses. Despite tightened
budgets, ARCO has maintained a strong emphasis on these business-based
programs.... Along with working through its hiring programs to shape a
diverse work force that is reflective of the population, ARCO is increasing
diversity awareness through training programs, starting with managers....
ARCO has long sought qualified female and minority candidates in its hiring
and promotional programs. In addition, the company is committed to ensuring
that no individual will be discriminated against on the basis of a
disability."
Accordingly, because the Company believes it already complies with proponents'
request for affirmative action reports, the Company does not think it
appropriate or necessary for stockholders to approve this proposal requiring
duplicative reports.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE
PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY OTHERWISE.
30
<PAGE>
OTHER BUSINESS
The Board of Directors is not aware of any other matters to be presented at the
meeting. If any other matters should properly come before the meeting, the
persons named in the enclosed proxy form will vote the proxies in accordance
with their best judgment.
VOTING PROCEDURES
The vote required for the election of directors is the affirmative vote of the
plurality of votes of the shares represented at the meeting. Unless authority
to vote for any director is withheld in the proxy, votes will be cast in favor
of election of the nominees. Votes withheld from election of directors are
counted as votes "against" election of directors. The vote required for
amendment to the Certificate of Incorporation is two-thirds of the outstanding
shares entitled to vote at the meeting. The vote required for the approval of
the amendment to the AIP, the adoption of the 1994 Plan and the approval of
stockholders' proposals is the affirmative vote of a majority of votes of the
shares represented at the meeting. If no vote is marked with respect to any
matter, the shares will be voted in accordance with the Board of Directors'
recommendations. Broker non-votes, if any, will not be counted as shares
present at the meeting in respect of each matter voted upon. The percent of
votes cast as to each matter is calculated by dividing the number of each of
the votes "for," "against," and "abstaining" by the total number of shares
represented at the meeting. All shares of Common Stock and Preference Stocks
vote together as one class.
Certain of ARCO's employee benefit plans, including the CAP Plan II and the
Savings Plan II, in which officers have account balances, permit plan
participants to direct the plan trustees how to vote the Common Stock allocated
to their accounts. The trustee for each such plan will vote all shares of
Common Stock for which no participant directions are received in the same
proportion as all those shares of Common Stock for which directions are
received. As to shares formerly held in the ARCO PAYSOP and currently held
under one of the capital accumulation plans of ARCO, of ARCO Chemical or of
Lyondell, the trustee will not vote those shares of Common Stock for which
participant voting instructions are not received unless instructed as to how to
vote such shares by the Company, ARCO Chemical, or Lyondell, as the case may
be.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities, if any, to file with the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange
initial reports of ownership and reports of changes in ownership of equity
securities of the Company. Such persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, during the fiscal year ended December 31, 1993, the
Company's officers and directors complied with all applicable Section 16(a)
filing requirements. These statements are based solely on a review of the
copies of such reports furnished to the Company by its officers and directors
and their written representations that such reports accurately reflect all
reportable transactions and holdings.
PROXY SOLICITATION
The expense of soliciting proxies will be paid by ARCO. The Company has
retained Hill and Knowlton, Inc. to solicit proxies at an estimated fee of
$20,000, plus expenses. Some of the officers and other employees of ARCO also
may solicit proxies personally, by telephone and by mail, if deemed
appropriate.
31
<PAGE>
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Stockholder proposals intended to be presented at the 1995 Annual Meeting must
be received by November 14, 1994. Such proposals should be addressed to the
Corporate Secretary.
ADDITIONAL INFORMATION AVAILABLE
The Company files an Annual Report on Form 10-K with the Securities and Exchange
Commission. Stockholders may obtain a copy of this report (without exhibits),
without charge, by writing to the Investor Relations Department, 515 South
Flower Street, Los Angeles, CA 90071 (Telephone (213) 486-3710).
By order of the Board of Directors
[SIGNATURE OF HOWARD L. EDWARDS]
Howard L. Edwards
Corporate Secretary
Los Angeles, California
March 14, 1994
32
<PAGE>
APPENDIX A
AMENDMENT OF CERTIFICATE OF INCORPORATION
TO PROVIDE FOR THE ANNUAL ELECTION OF
MEMBERS OF THE BOARD OF DIRECTORS
It is proposed that Section A of Article VI, entitled "Directors" is hereby
amended to eliminate the requirement to classify the Board of Directors into
three classes with each director to be elected for three year terms and to
substitute a provision requiring all Directors to be elected annually, so said
Section A shall read as follows:
"A. Except as otherwise fixed by or pursuant to the provisions of Article
IV relating to the rights of the holders of any class or series of stock
having a preference over the Common Stock, the number of directors of the
Company shall be fixed from time to time by or pursuant to the By-Laws of
the Company. Each director elected prior to 1994 shall hold office for the
term of years for which that director was elected, and each director
elected after January 1, 1994 shall hold office until the next annual
meeting of stockholders and until that director's successor is elected and
qualified or until that director's earlier resignation or removal."
<PAGE>
APPENDIX B
AMENDMENT NO. 1
TO
ATLANTIC RICHFIELD COMPANY
ANNUAL INCENTIVE PLAN
----------------
Pursuant to authority contained in resolutions adopted by the Board of
Directors on February 28, 1994 and subject to the approval of the holders of
the majority of the shares of the Company at the next regularly scheduled
meeting of the stockholders of the Company, the following amendment is hereby
made to the Atlantic Richfield Company Annual Incentive Plan (the "Plan") with
respect to plan years commencing on and after January 1, 1994.
1. Subparagraphs (n), (o), (p), (q), (r), (s) and (t) shall be added to
Section 2 of the Plan to read as follows:
"(n) "Average Shareholders' Equity" means, for a corporation, the average
of shareholders equity at the end of the year in question and at the
end of the immediately preceding year.
(o) "Adjusted Net Income" means after-tax income as adjusted to exclude
the following non-routine or "special" items:
.Accounting changes, extraordinary items, gain or loss on disposal of a
discontinued operation and/or unusual items as reported under
Accounting Principles Board Opinion No. 30
.LIFO profits and/or the elimination of inter-division profits
.Gains or losses from the issuance or retirement of financial
instruments
.Gains or losses from the sale and/or write-down or write-off of assets
.Legal settlements, judgments, and/or tax audit claims
.Deferred tax effect of statutory tax rate changes
.Environmental remediation costs associated with nonoperating sites
.Reorganization or restructuring charges
.Out-of-period adjustments in excess of $5 million (after-tax)
.Other non-routine items having a cumulative income impact of $1
million or more for the year (after-tax)
(p) "Return on Shareholders' Equity or ROSE" means, with respect to a
corporation, the percentage computed by dividing Adjusted Net Income
by Average Shareholders' Equity.
(q) "Average Return on Shareholders' Equity or Average ROSE" means the
simple average of a corporation's Return on Shareholders' Equity
during the immediately three preceding fiscal years.
(r) "Comparison Corporations or Comparison Group" means AMOCO Corporation,
Chevron Corporation, Exxon Corporation, Mobil Corporation, Occidental
Corporation, Phillips Petroleum Company, Texaco Inc. and Unocal
Corporation.
(s) "Comparison Group Average Return on Shareholders' Equity or Comparison
Group Average ROSE" means the simple average of the Average Return on
Shareholders' Equity for each member of the group of Comparison
Corporations during the immediately three preceding fiscal years.
(t) "Base Salary" means the annualized amount of a Participant's regular
biweekly wages, effective as of December 31 of the year immediately
preceding the calendar year immediately prior to the calendar year in
which the Award Date occurs, paid by the
B-1
<PAGE>
Company for the Participant's personal service, excluding all extra pay
such as overtime, premiums, bonuses and other allowances."
2. Section 5 of the Plan shall be amended to read as follows:
"SECTION 5. DETERMINATION OF AWARDS FUND
(a) CORPORATE PERFORMANCE CRITERIA. As soon as possible following the close
of each Plan Year the Committee shall compare the Company's Average ROSE with
the Comparison Group Average ROSE for the Plan Year. Subject to the additional
performance criteria described under Subparagraphs (b) and (c), awards
described under the schedule in Subparagraph (b)(2) shall be paid as follows:
(1) If the Company's Average ROSE equals the Comparison Group Average
ROSE, an Award equal to the percentage of Base Salary described in
Subparagraph (b)(2), under the column entitled "Applicable Percentage"
shall be paid to each executive in the grade level described in
Subparagraph (b)(2), under the column entitled "Salary Grade" opposite such
percentage.
(2) If the Company's Average ROSE exceeds the Comparison Group Average
ROSE, the Award determined under Subparagraph (1) of this paragraph shall
be increased by an amount equal to the percent by which the ARCO Average
ROSE exceeds the Comparison Group Average ROSE.
(3) If the Company's Average ROSE is less than the Comparison Group
Average ROSE but at least seventy-five percent (75%) of the Comparison
Group Average ROSE, the Award determined under Subparagraph (1) of this
paragraph shall be decreased by an amount equal to the percent by which the
Comparison Group Average ROSE exceeds the Company's Average ROSE.
(4) If the Company's Average ROSE is less than seventy-five percent (75%)
of the Comparison Group Average ROSE, no awards will be payable under the
Plan with respect to that Plan Year.
(b) INDIVIDUAL AWARD LEVELS:
(1) Subject to any modifications pursuant to Subparagraphs (a), (c)
and/or (d), each participant shall be granted an Award equal to the percent
of Base Salary listed opposite the Salary Grade Level which he or she
holds, as described under the Schedule of Award Levels under Subparagraph
(2) of this paragraph.
(2) Schedule of Award Levels:
<TABLE>
<CAPTION>
SALARY GRADE APPLICABLE PERCENTAGE
------------ ---------------------
<S> <C>
Chief Executive Officer (E0) 65%
Chief Operating Officer (E0) 60%
Executive Vice President (E1) 55%
E2 35%
E3 25%
E4 20%
10 15%
9 15%
</TABLE>
(3) Award Levels as determined in Subparagraph (2) of this paragraph are
based upon the 50th percentile of bonuses paid by the Comparison
Corporations. The Applicable Percentage will be modified, as necessary, to
achieve this objective.
B-2
<PAGE>
(c) AWARDS FUND LIMITATION. In no event may the aggregate dollar amount of
Awards granted during a Plan Year exceed two percent (2%) of the Company's
Adjusted Net Income for the immediately preceding Plan Year. To the extent that
the determination of Awards under Subparagraphs (a) and (b) would result in an
amount exceeding two percent (2%) of the Company's Adjusted Net Income, each
individual Award shall be reduced proportionately, with the result that the
total Awards Fund shall be an amount equal to two percent (2%) of Adjusted Net
Income.
(d) INDIVIDUAL AWARD MODIFICATIONS:
(1) In addition to reductions resulting from the application of
Subparagraphs (a) and/or (c), the Award of any Participant may be reduced
from the amount determined under the Applicable Percentage described in
Subparagraph (b)(2), as determined to be appropriate by the Committee based
on the individual's performance or any other criteria deemed relevant by
the Committee. The amount of any such reduction shall be forfeited to the
Company.
(2) The Award of each named executive officer in the Summary Compensation
Table of the Company's Proxy Statement relating to the immediately
preceding calendar year may not exceed the amount determined pursuant to
Subparagraph (b), as limited by application of Subparagraphs (a) and/or
(c).
(3) The Award of any Participant other than a Participant described under
Subparagraph (2) of this paragraph may be increased, in the sole discretion
of the Committee, from the amount determined pursuant to Subparagraph (b),
as limited by application of Subparagraphs (a) and/or (c).
(4) In no event may the Award of any Participant exceed an amount equal
to two hundred percent (200%) of the amount determined by application of
the Schedule of Award levels under Subparagraph (b)(2).
(e) BASIS FOR CALCULATIONS. All calculations described in this Section 5
shall be based on the audited financial statements of each of the Comparison
Corporations, to the extent these are publically available, or on the income
statement and balance sheet and dividend payments as reported to stockholders,
or otherwise publicly available."
3. Section 6 of the Plan shall be amended to read as follows:
"(a) All Awards shall be paid in cash in a single payment in the year in
which granted, except as provided in the following subparagraph.
(b) Prior to the commencement of each Plan Year, prospective
Participants shall be afforded the right to elect irrevocably to
defer all or a portion or portions of the payment of their Awards
for the Plan Year pursuant to the terms and conditions of the
Atlantic Richfield Executive Deferral Plan."
Executed this day of , 1994.
ATTEST ATLANTIC RICHFIELD COMPANY
By:__________________________________ By:__________________________________
John H. Kelly
Vice President
Human Resources
B-3
<PAGE>
APPENDIX C
SPECIAL INCENTIVE PLAN
SECTION 1. PURPOSE
The purpose of this Plan is to provide annual cash awards to those executives
who have made a significant individual contribution or achievement which
furthers the success of the Company.
SECTION 2. DEFINITIONS
When used in the Plan, the following terms shall have the following meanings:
(a) AWARD means an award to a participant pursuant to Section 6 of the
Plan.
(b) AWARDS FUND means the aggregate amount of money available for Awards
under the Plan for a Plan Year pursuant to Section 5 of the Plan.
(c) BOARD means the Board of Directors of Atlantic Richfield Company.
(d) COMMITTEE means the Compensation Committee of the Board of Directors
of the Company.
(e) COMPANY means Atlantic Richfield Company, its successors and assigns,
and its Subsidiaries.
(f) EMPLOYEE means an employee of the Company.
(g) PARTICIPANT means, with respect to a Plan Year, an Employee who has
been granted an Award under the Plan for such Plan Year.
(h) PLAN means the Special Incentive Plan as set forth herein and as may
be amended from time to time.
(i) PLAN YEAR means the calendar year ending December 31, 1994, and each
subsequent calendar year during the continuance of the Plan.
(j) SUBSIDIARY means any corporation, the majority of the voting stock of
which, or any partnership or joint venture, the majority of the profits
interest or capital interest of which, is owned directly or indirectly by
the Company.
SECTION 3. ADMINISTRATION
(a) The Committee shall have full power and authority to construe, interpret
and administer the Plan and to make rules and regulations subject to the
provisions of the Plan. All decisions, actions, determinations, or
interpretations of the Committee shall be made in its sole discretion and shall
be final, conclusive and binding on all parties. No officer, employee or
beneficiary shall have any right to participate in the Plan or to receive
payment of any Award, or portion of an Award, except, and subject to such terms
and conditions, as the Committee may have determined in accordance with the
provisions of the Plan.
(b) The Committee shall consist of at least three members, each of whom shall
be appointed by, and remain in office for the term specified by, the Board. Any
member of the Committee may resign at any time.
(c) No member of the Committee shall be personally liable by reason of any
contract or other instrument executed by him, or on his behalf, in his capacity
as a member of the Committee nor for any mistake of judgment made in good
faith, and the Company shall indemnify and hold harmless each member of the
Committee, and each other officer, employee or director of the Company to whom
any duty or power relating to the administration or interpretation of the Plan
has been
C-1
<PAGE>
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the approval of the
Committee) arising out of any act or omission in connection with the Plan
unless arising out of such person's own fraud or bad faith.
SECTION 4. ELIGIBILITY FOR PARTICIPATION
(a) Any Employee who has served as a director, officer or in another key
position at any time during a Plan Year is eligible for selection by the
Committee to receive an Award with respect to that Plan Year. No member of the
Committee may be selected to receive an Award under the Plan.
(b) All questions regarding eligibility shall be resolved by the Committee in
its sole discretion.
(c) The Committee may make an Award to an Employee (or his or her beneficiary
or estate) who has terminated service with the Company prior to the end of a
Plan Year if the Committee determines that such Employee has made an
outstanding contribution to the Company during the Plan Year.
SECTION 5. DETERMINATION OF AWARDS FUND
There shall be a fund of $3.5 million available for payment of Awards during
1994 and each Plan Year thereafter. There shall be no carryover of unused funds
from one Plan Year to another Plan Year.
SECTION 6. ALLOCATION AND GRANTING OF AWARDS
(a) All Awards shall be paid in cash in a single payment in the year in which
granted, except as provided in the following paragraph.
(b) Prior to the commencement of each Plan Year, any prospective Participant
shall be afforded the right to elect irrevocably to defer all or a portion or
portions of the payment of any Award he or she may receive during the Plan
Year, subject to the terms and conditions of the Atlantic Richfield Executive
Deferral Plan.
SECTION 7. NON-ASSIGNABILITY AND FORFEITURE
All Awards are contingent in nature until paid and shall not be assignable or
transferable voluntarily or by operation of law.
SECTION 8. GENERAL PROVISIONS
(a) The Company intends to establish a grantor trust to aid in accumulating
the amounts necessary to pay any amount awarded to any Participant for any Plan
Year, or any Award deferred pursuant to Section 6 or any interest credited
thereon. All Awards, and any interest credited thereon, shall be paid from the
general funds of the Company to the extent not paid from the grantor trust.
Under no circumstances shall a Participant or other person have any interest
whatsoever in any particular property or assets of the Company as a result of
this Plan or any Award made thereunder.
(b) Nothing in this Plan shall confer upon an Employee any right to continue
in the employ of the Company or shall interfere with or restrict in any way the
right of the Company to discharge an Employee at any time for any reason
whatsoever, with or without good cause.
(c) Awards will not be considered as compensation for the purpose of any
other benefit plans maintained by the Company, except as provided in the
Atlantic Richfield Supplementary Executive Retirement Plan and the Atlantic
Richfield Executive Long Term Disability Plan.
C-2
<PAGE>
(d) The Company shall have the right to withhold from salary or otherwise,
any Federal, State, local or foreign taxes required to be withheld with respect
to payment of any Award or interest credited thereon.
SECTION 9. AMENDMENT, SUSPENSION OR TERMINATION
The Board may suspend, terminate or amend the Plan. Amendment, suspension or
termination of the Plan shall not alter the amount or payment of any Award made
prior to such amendment, suspension or termination.
SECTION 10. EFFECTIVE DATE
The effective date of the Plan is February 28, 1994, subject to approval of
the holders of the majority of the shares of the Company at the next regularly
scheduled meeting of the stockholders of the Company.
C-3
<PAGE>
GRAPHIC MATERIAL CROSS-REFERENCE PAGE
Photos of the Directors and Nominees for Directors appearing to the left of each
respective name and description of offices held are shown on pages 4 through 6.
<PAGE>
(INITIAL MAILING OF PROXY STATEMENT AND PROXY CARD
TO RECORD STOCKHOLDERS AND EMPLOYEES)
- --------------------------------------------------------------------------------
0184
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF
DIRECTORS, FOR PROPOSALS 2, 3, 4 AND 5 AND AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 2, 3, 4 AND 5.
- --------------------------------------------------------------------------------
1. Election of Directors.
(see reverse) FOR WITHHELD
[_] [_]
For, except vote withheld from the following nominee(s):
- -----------------------------------------------------------
2. Authorize Annual Election FOR AGAINST ABSTAIN
of Directors. [_] [_] [_]
3. Amend Annual Incentive Plan.
[_] [_] [_]
4. Authorize 1994 Special FOR AGAINST ABSTAIN
Incentive Plan. [_] [_] [_]
5. Approval of appointment of
Coopers & Lybrand as [_] [_] [_]
independent auditors.
===============================================================================
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- -------------------------------------------------------------------------------
6A. Public Environmental FOR AGAINST ABSTAIN
Reporting [_] [_] [_]
6B. Environmental
Liability Disclosure [_] [_] [_]
6C. Health and Safety
Reporting [_] [_] [_]
6D. Equal Employment
Opportunity Reporting [_] [_] [_]
- -------------------------------------------------------------------------------
SIGNATURE(S)_______________________DATE____
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Change of Address/ Comments on Reverse Side. [_]
- -------------------------------------------------------------------------------
Please carefully detach here and return this proxy
in the enclosed reply envelope.
THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
[ARCO LOGO]
DEAR STOCKHOLDER:
The annual meeting of stockholders of Atlantic Richfield Company will be
held on May 2, 1994. We urge you to promptly sign, date and return the
proxy card in the envelope provided.
<PAGE>
- --------------------------------------------------------------------------------
[ARCO LOGO]
PROXY
ATLANTIC RICHFIELD COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING MAY 2, 1994
The undersigned hereby constitutes and appoints Ronald J. Arnault, Mike R. Bow-
lin and Francis X. McCormack, and each of them, true and lawful agents and
proxies with full power of substitution in each, to represent the undersigned
at the Annual Meeting of Stockholders of ATLANTIC RICHFIELD COMPANY to be held
at the Sheraton Grande Hotel, 333 South Figueroa Street, Los Angeles, Califor-
nia on Monday, May 2, 1994, and at any adjournments thereof, on all matters
coming before said meeting, including (1) the election of six directors, (2)
the approval to amend the Certificate of Incorporation to provide for the an-
nual election of Directors, (3) the approval to amend the Annual Incentive
Plan, (4) the approval to adopt the 1994 Special Incentive Plan, (5) the ap-
proval of the appointment of Coopers & Lybrand as independent auditors for the
year 1994 and (6) the consideration of the stockholders' proposals.
Nominees for election as director: COMMENTS OR CHANGE OF ADDRESS
Frank D. Boren --------------------------------------
John Gavin
Kent Kresa --------------------------------------
James A. Middleton
John B. Slaughter --------------------------------------
William E. Wade, Jr.
--------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THIS PROXY CANNOT BE
VOTED UNLESS YOU SIGN AND RETURN IT.
-----------
SEE REVERSE
SIDE
-----------
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
CCUL--WHITE--H-H
<PAGE>
(FOLLOW-UP MAILING TO RECORD STOCKHOLDERS)
- --------------------------------------------------------------------------------
0184
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF
DIRECTORS, FOR PROPOSALS 2, 3, 4 AND 5 AND AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 2, 3, 4 AND 5.
- --------------------------------------------------------------------------------
1. Election of Directors. FOR WITHHELD
(see reverse) [_] [_]
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------
2. Authorize Annual Election FOR AGAINST ABSTAIN
of Directors. [_] [_] [_]
3. Amend Annual Incentive Plan.
[_] [_] [_]
4. Authorize 1994 Special FOR AGAINST ABSTAIN
Incentive Plan. [_] [_] [_]
5. Approval of appointment of
Coopers & Lybrand as
independent auditors. [_] [_] [_]
===============================================================================
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- --------------------------------------------------------------------------------
6A. Public Environmental FOR AGAINST ABSTAIN
Reporting [_] [_] [_]
6B. Environmental
Liability Disclosure [_] [_] [_]
6C. Health and Safety
Reporting [_] [_] [_]
6D. Equal Employment
Opportunity Reporting [_] [_] [_]
- -------------------------------------------------------------------------------
SIGNATURE(S)_______________________DATE____
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Change of Address/ Comments on Reverse Side. [_]
- -------------------------------------------------------------------------------
Please carefully detach here and return this proxy
in the enclosed reply envelope.
THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
[ARCO LOGO]
DEAR STOCKHOLDER:
The annual meeting of stockholders of Atlantic Richfield Company will be
held on May 2, 1994 and the time before the meeting is short.
Several important proposals are being voted on, and we strongly
encourage the participation of all our stockholders at the meeting.
If you have not voted, we urge you to promptly sign, date and return the
duplicate proxy card in the envelope provided.
<PAGE>
- --------------------------------------------------------------------------------
[ARCO LOGO]
PROXY
ATLANTIC RICHFIELD COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING MAY 2, 1994
The undersigned hereby constitutes and appoints Ronald J. Arnault, Mike R. Bow-
lin and Francis X. McCormack, and each of them, true and lawful agents and
proxies with full power of substitution in each, to represent the undersigned
at the Annual Meeting of Stockholders of ATLANTIC RICHFIELD COMPANY to be held
at the Sheraton Grande Hotel, 333 South Figueroa Street, Los Angeles, Califor-
nia on Monday, May 2, 1994, and at any adjournments thereof, on all matters
coming before said meeting, including (1) the election of six directors, (2)
the approval to amend the Certificate of Incorporation to provide for the an-
nual election of Directors, (3) the approval to amend the Annual Incentive
Plan, (4) the approval to adopt the 1994 Special Incentive Plan, (5) the ap-
proval of the appointment of Coopers & Lybrand as independent auditors for the
year 1994 and (6) the consideration of the stockholders' proposals.
Nominees for election as director: COMMENTS OR CHANGE OF ADDRESS
Frank D. Boren
John Gavin --------------------------------------
Kent Kresa
James A. Middleton --------------------------------------
John B. Slaughter
William E. Wade, Jr. --------------------------------------
--------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THIS PROXY CANNOT BE
VOTED UNLESS YOU SIGN AND RETURN IT.
-----------
SEE REVERSE
SIDE
-----------
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
BROKERS $2.80 CUMULATIVE CONVERTIBLE PREFERENCE STOCK (BLUE)
- -------------------------------------------------------------------------------
[ARCO LOGO]
PROXY
ATLANTIC RICHFIELD COMPANY
$2.80 CUMULATIVE CONVERTIBLE PREFERENCE STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING MAY 2, 1994
The undersigned hereby constitutes and appoints Ronald J. Arnault, Mike R. Bow-
lin, Francis X. McCormack, and each of them, true and lawful agents and proxies
with full power of substitution in each, to represent the undersigned at the
Annual Meeting of Stockholders of ATLANTIC RICHFIELD COMPANY to be held at the
Sheraton Grande Hotel, 333 South Figueroa Street, Los Angeles, California on
Monday, May 2, 1994, and at any adjournments thereof, on all matters coming be-
fore said meeting, including (1) the election of six directors, (2) the ap-
proval to amend the Certificate of Incorporation to provide for the annual
election of Directors, (3) the approval to amend the Annual Incentive Plan, (4)
the approval to adopt the 1994 Special Incentive Plan, (5) the approval of the
appointment of Coopers & Lybrand as independent auditors for the year 1994 and
(6) the consideration of the stockholders' proposals.
Nominees for election as director: COMMENTS OR CHANGE OF ADDRESS
Frank D. Boren
John Gavin -------------------------------------
Kent Kresa
James A. Middleton -------------------------------------
John B. Slaughter
William E. Wade, Jr. -------------------------------------
-------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THIS PROXY CANNOT BE
VOTED UNLESS YOU SIGN AND RETURN IT.
-----------
SEE REVERSE
SIDE
-----------
- -------------------------------------------------------------------------------
CCUL--BLUE--H-H
- -------------------------------------------------------------------------------
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF
DIRECTORS, FOR PROPOSALS 2, 3, 4 AND 5 AND AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 2, 3, 4 AND 5.
- -------------------------------------------------------------------------------
1. Election of Directors. FOR WITHHELD
(see reverse) [_] [_]
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------
2. Authorize Annual FOR AGAINST ABSTAIN
Election of Directors. [_] [_] [_]
3. Amend Annual Incentive Plan. [_] [_] [_]
4. Authorize 1994 Special FOR AGAINST ABSTAIN
Incentive Plan. [_] [_] [_]
5. Approval of appointment of
Coopers & Lybrand as [_] [_] [_]
independent auditors.
===============================================================================
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- --------------------------------------------------------------------------------
6A. Public Environmental FOR AGAINST ABSTAIN
Reporting [_] [_] [_]
6B. Environmental
Liability Disclosure [_] [_] [_]
6C. Health and Safety
Reporting [_] [_] [_]
6D. Equal Employment
Opportunity Reporting [_] [_] [_]
- -------------------------------------------------------------------------------
SIGNATURE(S)________________________DATE____
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Change of Address/ Comments on Reverse Side. [_]
- -------------------------------------------------------------------------------
<PAGE>
BROKER'S COMMON STOCK (GRAY)
- -------------------------------------------------------------------------------
[ARCO LOGO]
PROXY
ATLANTIC RICHFIELD COMPANY--COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING MAY 2, 1994
The undersigned hereby constitutes and appoints Ronald J. Arnault, Mike R. Bow-
lin and Francis X. McCormack, and each of them, true and lawful agents and
proxies with full power of substitution in each, to represent the undersigned
at the Annual Meeting of Stockholders of ATLANTIC RICHFIELD COMPANY to be held
at the Sheraton Grande Hotel, 333 South Figueroa Street, Los Angeles, Califor-
nia on Monday, May 2, 1994, and at any adjournments thereof, on all matters
coming before said meeting, including (1) the election of six directors, (2)
the approval to amend the Certificate of Incorporation to provide for the an-
nual election of Directors, (3) the approval to amend the Annual Incentive
Plan, (4) the approval to adopt the 1994 Special Incentive Plan, (5) the ap-
proval of the appointment of Coopers & Lybrand as independent auditors for the
year 1994 and (6) the consideration of the stockholders' proposals.
Nominees for election as director: COMMENTS OR CHANGE OF ADDRESS
Frank D. Boren
John Gavin -------------------------------------
Kent Kresa
James A. Middleton -------------------------------------
John B. Slaughter
William E. Wade, Jr. -------------------------------------
-------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THIS PROXY CANNOT BE
VOTED UNLESS YOU SIGN AND RETURN IT.
-----------
SEE REVERSE
SIDE
-----------
- -------------------------------------------------------------------------------
CCUL--GRAY--H-H
- -------------------------------------------------------------------------------
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF
DIRECTORS, FOR PROPOSALS 2, 3, 4 AND 5 AND AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 2, 3, 4 AND 5.
- -------------------------------------------------------------------------------
1. Election of Directors. FOR WITHHELD
(see reverse) [_] [_]
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------
2. Authorize Annual FOR AGAINST ABSTAIN
Election of Directors. [_] [_] [_]
3. Amend Annual Incentive Plan. [_] [_] [_]
4. Authorize 1994 Special FOR AGAINST ABSTAIN
Incentive Plan [_] [_] [_]
5. Approval of appointment of
Coopers & Lybrand as
independent auditors. [_] [_] [_]
===============================================================================
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- --------------------------------------------------------------------------------
6A. Public Environmental FOR AGAINST ABSTAIN
Reporting [_] [_] [_]
6B. Environmental
Liability Disclosure [_] [_] [_]
6C. Health and Safety
Reporting [_] [_] [_]
6D. Equal Employment
Opportunity Reporting [_] [_] [_]
- -------------------------------------------------------------------------------
SIGNATURE(S)________________________DATE____
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Change of Address/ Comments on Reverse Side. [_]
- -------------------------------------------------------------------------------
<PAGE>
BROKERS $3.00 CUMULATIVE CONVERTIBLE PREFERENCE STOCK (GREEN)
- -------------------------------------------------------------------------------
[ARCO LOGO]
PROXY
ATLANTIC RICHFIELD COMPANY
$3.00 CUMULATIVE CONVERTIBLE PREFERENCE STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING MAY 2, 1994
The undersigned hereby constitutes and appoints Ronald J. Arnault, Mike R. Bow-
lin and Francis X. McCormack, and each of them, true and lawful agents and
proxies with full power of substitution in each, to represent the undersigned
at the Annual Meeting of Stockholders of ATLANTIC RICHFIELD COMPANY to be held
at the Sheraton Grande Hotel, 333 South Figueroa Street, Los Angeles, Califor-
nia on Monday, May 2, 1994, and at any adjournments thereof, on all matters
coming before said meeting, including (1) the election of six directors, (2)
the approval to amend the Certificate of Incorporation to provide for the an-
nual election of Directors, (3) the approval to amend the Annual Incentive
Plan, (4) the approval to adopt the 1994 Special Incentive Plan, (5) the ap-
proval of the appointment of Coopers & Lybrand as independent auditors for the
year 1994 and (6) the consideration of the stockholders' proposals.
Nominees for election as director: COMMENTS OR CHANGE OF ADDRESS
Frank D. Boren
John Gavin -------------------------------------
Kent Kresa
James A. Middleton -------------------------------------
John B. Slaughter
William E. Wade, Jr. -------------------------------------
-------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THIS PROXY CANNOT BE
VOTED UNLESS YOU SIGN AND RETURN IT.
-----------
SEE REVERSE
SIDE
-----------
- -------------------------------------------------------------------------------
CCUL--GREEN--H-H
- -------------------------------------------------------------------------------
[_] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF
DIRECTORS, FOR PROPOSALS 2, 3, 4 AND 5 AND AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 2, 3, 4 AND 5.
- -------------------------------------------------------------------------------
1. Election of Directors. FOR WITHHELD
(see reverse) [_] [_]
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------
2. Authorize Annual FOR AGAINST ABSTAIN
Election of Directors. [_] [_] [_]
3. Amend Annual Incentive Plan. [_] [_] [_]
4. Authorize 1994 Special FOR AGAINST ABSTAIN
Incentive Plan. [_] [_] [_]
5. Approval of appointment of
Coopers & Lybrand as [_] [_] [_]
independent auditors.
===============================================================================
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST PROPOSALS 6A, 6B, 6C AND 6D.
- --------------------------------------------------------------------------------
6A. Public Environmental FOR AGAINST ABSTAIN
Reporting [_] [_] [_]
6B. Environmental
Liability Disclosure [_] [_] [_]
6C. Health and Safety
Reporting [_] [_] [_]
6D. Equal Employment
Opportunity Reporting [_] [_] [_]
- -------------------------------------------------------------------------------
SIGNATURE(S)________________________DATE____
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Change of Address/ Comments on Reverse Side. [_]
- -------------------------------------------------------------------------------
<PAGE>
TO BE MAILED IN INITIAL MAILING OF PROXY STATEMENT AND PROXY CARD TO BANKS AND
BROKERS
- -------------------------------------------------------------------------------
[ARCO LOGO]
Dear Stockholder:
The annual meeting of stockholders of Atlantic Richfield Company
will be held on May 2, 1994.
Several important proposals are being voted on, and we strongly
encourage the participation of all our stockholders at this meeting.
We urge you to promptly sign, date and return the enclosed proxy
card in the envelope provided.
1
- -------------------------------------------------------------------------------
<PAGE>
FOLLOW-UP MAILING TO BANKS AND BROKERS.
- -------------------------------------------------------------------------------
[ARCO LOGO]
Dear Stockholder:
Time is short. . .
The annual meeting of stockholders of Atlantic Richfield Company will
be held on May 2, 1994 and the time before the meeting is short.
Several important proposals are being voted on, and we strongly
encourage the participation of all our stockholders at this meeting.
Because your shares are held in the name of your broker or bank we
have no way of knowing whether you have already voted your shares. If
you have not yet voted, we ask you to please take time now to sign,
date and mail the enclosed proxy card. A postage-paid envelope has
been provided for your convenience.
2
- -------------------------------------------------------------------------------
