<PAGE>
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-52053
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 25, 1998)
$270,000,000
[LOGO OF OCCIDENTAL PETROLEUM CORPORATION]
EXTENDIBLE NOTES DUE OCTOBER 3, 2008
---------------
Occidental Petroleum Corporation (the "Company" or "Occidental") is hereby
offering $270,000,000 aggregate principal amount of Extendible Notes due
October 3, 2008 (the "Notes").
DURING THE PERIOD (THE "INITIAL SPREAD PERIOD") FROM AND INCLUDING OCTOBER
2, 1998 TO BUT EXCLUDING APRIL 3, 2000 (THE INITIAL REMARKETING RESET DATE),
THE INTEREST RATE ON THE NOTES WILL BE RESET AND PAYABLE QUARTERLY AT A RATE
EQUAL TO LIBOR PLUS THE APPLICABLE SPREAD (AS DEFINED HEREIN). THE SPREAD
DURING THE INITIAL SPREAD PERIOD WILL BE .70%. After the Initial Spread
Period, the character and duration of the interest rate on the Notes will be
agreed to by the Company and the Remarketing Agent (as defined herein) on each
applicable Duration/Mode Determination Date (as defined herein) and the Spread
will be as determined by the Remarketing Agent and agreed to by the Company on
the corresponding Spread Determination Date (as defined herein). If the
Company and the Remarketing Agent are unable to agree on the Spread with
respect to any Subsequent Spread Period (as defined herein), the Company is
required to unconditionally repurchase and retire all of the Notes on the
Remarketing Reset Date (as defined herein) for such Subsequent Spread Period
at a price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest, if any, thereon to such Remarketing Reset Date.
IF THE COMPANY AND THE REMARKETING AGENT AGREE ON THE SPREAD WITH RESPECT TO
ANY SUBSEQUENT SPREAD PERIOD, EACH NOTE WILL BE AUTOMATICALLY TENDERED, OR
DEEMED TENDERED, ON THE APPLICABLE REMARKETING RESET DATE TO THE REMARKETING
AGENT FROM EACH HOLDER OF THE NOTES (EACH, A "NOTEHOLDER") FOR PURCHASE AT
100% OF ITS PRINCIPAL AMOUNT AND FOR REMARKETING BY THE REMARKETING AGENT ON
SUCH REMARKETING RESET DATE, UNLESS SUCH NOTEHOLDER AFFIRMATIVELY ELECTS NOT
TO TENDER, ALL AS DESCRIBED BELOW. In the case of the Initial Spread Period,
the Notes will be subject to tender on April 3, 2000. Notice of a Noteholder's
election not to tender Notes to the Remarketing Agent must be received by the
Remarketing Agent during the period beginning at 3:00 p.m., New York City
time, on the relevant Spread Determination Date and ending at 12:00 noon, New
York City time, on the second Business Day following the relevant Spread
Determination Date. The Remarketing Agent will attempt, on a reasonable
efforts basis, to remarket the tendered Notes at a price equal to 100% of the
aggregate principal amount so tendered. There is no assurance that the
Remarketing Agent will be able to remarket the entire principal amount of
Notes tendered in a remarketing. The obligations, if any, of the Remarketing
Agent will be subject to certain conditions and termination events customary
in the Company's offerings of debt securities. If the Remarketing Agent is
unable to remarket some or all of the tendered Notes and, in its sole
discretion, chooses not to purchase such tendered Notes, the Company is
obligated unconditionally to repurchase and retire on the Remarketing Reset
Date the remaining unsold tendered Notes at a price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, thereon to
the applicable Remarketing Reset Date. No beneficial owner of any Note shall
have any rights or claims against the Remarketing Agent as a result of the
Remarketing Agent not purchasing such Notes. See "Description of the Notes--
Tender of Notes; Remarketing Agency Agreement" herein.
(continued on next page)
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
The Notes will be sold to the public at varying prices to be determined by
the Underwriter (as defined herein) at the time of each sale. The net proceeds
to the Company, before deducting expenses payable by the Company (estimated to
be approximately $375,000), will be 99.80% of the principal amount of the
Notes sold and the aggregate net proceeds will be $269,460,000. For further
information with respect to the plan of distribution and any discounts,
commissions or profits on resales of Notes that may be deemed underwriting
discounts or commissions, see "Plan of Distribution" herein.
The Notes are offered by the Underwriter, subject to prior sale, when, as
and if issued by the Company and delivered to and accepted by the Underwriter
and subject to certain other conditions. The Underwriter reserves the right to
withdraw, cancel or modify such offer and to reject orders in whole or in
part. It is expected that delivery of the Notes will be made in book-entry
form through the facilities of DTC in New York, New York on or about
October 2, 1998.
---------------
MERRILL LYNCH & CO.
---------------
The date of this Prospectus Supplement is September 25, 1998.
<PAGE>
(continued from front cover)
Interest on the Notes during each Subsequent Spread Period shall accrue and
be payable, as applicable, either (i) at a floating interest rate (such Notes
being in the "Floating Rate Mode" and such interest rate being a "Floating
Rate") or (ii) at a fixed interest rate (such Notes being in the "Fixed Rate
Mode" and such interest rate being a "Fixed Rate"), in each case as determined
by the Company and the Remarketing Agent in accordance with a Remarketing
Agency Agreement between the Company and the Remarketing Agent (the
"Remarketing Agency Agreement").
The Notes will not be redeemable prior to April 3, 2000. Thereafter, the
Notes will be redeemable, at the option of the Company, on such date, on each
Remarketing Reset Date and on those Interest Payment Dates that are specified
as redemption dates by the Company on the applicable Duration/Mode
Determination Date, in whole or in part, upon notice thereof given at any time
during the 30 calendar day period ending on the tenth Business Day prior to
the redemption date, in accordance with the redemption type selected on the
Duration/Mode Determination Date. Unless previously redeemed, the Notes will
mature on October 3, 2008. See "Description of the Notes--Redemption of the
Notes" herein.
The Notes will be represented by one or more Global Notes registered in the
name of The Depository Trust Company ("DTC") or its nominee. Beneficial
interests in each Global Note will be shown on, and transfers thereof will be
effected only through, records maintained by DTC and its participants. Except
as described elsewhere herein, Notes in certificated form will not be issued.
Beneficial interests in the Notes may be acquired, or subsequently
transferred, only in denominations of $1,000 and integral multiples of $1,000
in excess thereof. See "Description of the Notes--Form, Denomination and
Registration" herein.
THE UNDERWRITER MAY ENGAGE IN TRANSACTIONS THAT MAINTAIN OR OTHERWISE AFFECT
THE PRICE OF THE NOTES. SUCH TRANSACTIONS MAY INCLUDE OVER-ALLOTMENT
TRANSACTIONS AND THE PURCHASE OF NOTES TO COVER THE UNDERWRITER'S SHORT
POSITIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION"
HEREIN.
----------------
This Prospectus Supplement and the information incorporated by reference
herein contain various "forward-looking statements," within the meaning of
Federal and state securities laws, including those identified by the words
"believes," "anticipates," "expects" and similar expressions. These forward-
looking statements reflect management's expectations and are based upon data
available at the time the statements were made; however, actual results are
subject to future events and uncertainties, which could materially impact
actual performance. Factors that can cause actual results to differ include,
but are not limited to, global commodity pricing fluctuations; competitive
pricing pressures; higher than expected costs including feedstocks; the
supply/demand considerations for Occidental's products; any general economic
recession domestically or internationally; and not successfully completing any
expansion, capital expenditure, acquisition or divestiture.
<PAGE>
OCCIDENTAL PETROLEUM CORPORATION
Occidental Petroleum Corporation, a Delaware corporation ("Occidental"),
explores for, develops, produces and markets crude oil and natural gas; and
manufactures and markets a variety of chlorovinyls (including basic chemicals
and polymers and plastics), specialty chemicals and petrochemicals. Occidental
conducts its principal operations through two subsidiaries, Occidental Oil and
Gas Corporation and Occidental Chemical Corporation, and its 29.5% interest in
the Equistar Chemicals, LP petrochemicals partnership.
Occidental was organized in April 1986 and, as the result of a
reorganization effective May 21, 1986, became the successor to a California
corporation of the same name organized in 1920. As used herein, the term
"Occidental" refers to Occidental alone or together with one or more of its
subsidiaries.
RECENT DEVELOPMENTS
Liquidity. Cash used by operating and investing activities in the first six
months of 1998 resulted in a net cash shortfall, which was funded by
additional borrowings. Operating cash flow decreased primarily due to the
impact of lower worldwide crude oil prices, lower chemical prices and the
repurchase of previously sold accounts receivable of Occidental's former
subsidiary MidCon Corp. and of the petrochemical business contributed to
Equistar. In addition, cash proceeds from Occidental's program to sell
nonstrategic assets did not totally offset cash expenditures for the February
1998 acquisition of its interest in Elk Hills Naval Petroleum Reserve and the
Common Stock repurchase program.
For 1998 Occidental anticipates a net cash shortfall, which it expects can
be funded without substantial additional borrowings over the levels at June
30, 1998. Occidental believes that cash generated from operations and
available borrowing capacity will be adequate to meet its anticipated
operating requirements, capital spending and dividend payments for the next 12
months, assuming oil and gas prices remain in their current range. However,
Occidental continually evaluates possible acquisitions or other extraordinary
transactions, which may, singularly or in the aggregate, affect Occidental's
cash requirements. Without giving effect to the proposed sale of the Notes
offered hereby, Occidental expects to have available, but unused, lines of
committed credit totaling approximately $1.1 billion at September 30, 1998.
Completion of Shell Swap. In September 1998, Occidental and the Royal
Dutch/Shell Group consummated the exchange of Occidental's oil and gas
interests in the Philippines and Malaysia for the Royal Dutch/Shell Group's
oil and gas interests in Yemen and its interests in the Cravo Norte, Samore,
Soapaga and Rondon association contracts in Colombia.
S-2
<PAGE>
USE OF PROCEEDS
Occidental intends to use the net proceeds from the sale of the Notes
(estimated to be approximately $269 million) for general corporate purposes,
primarily the retirement of outstanding indebtedness.
CAPITALIZATION
The following table sets forth the consolidated short-term debt and
consolidated capitalization of Occidental at June 30, 1998 (i) on a historical
basis, (ii) as adjusted to reflect the impact of the following transactions
that occurred subsequent to June 30, 1998: the repurchase through September
25, 1998 of approximately 8.9 million shares of common stock under
Occidental's common stock repurchase program and the issuance of approximately
$193 million of commercial paper in connection with such repurchase; the
reduction in debt of approximately $263 million from the sale of the stock of
Occidental Netherlands, Inc.; and the issuance of approximately $107 million
of commercial paper in connection with an exchange of oil and gas interests
with the Royal Dutch/Shell Group and (iii) as further adjusted to reflect the
sale of the Notes offered hereby and the application of the estimated net
proceeds therefrom to repay commercial paper (which is classified as long-term
debt). See "Recent Developments."
<TABLE>
<CAPTION>
JUNE 30, 1998(1)
(IN MILLIONS)
(UNAUDITED)
------------------------------
AS AS FURTHER
HISTORICAL ADJUSTED ADJUSTED
---------- -------- ----------
<S> <C> <C> <C>
Short-term debt:
Current maturities of long-term debt and
capital lease liabilities.................... $1,401 $1,401 $1,401
Notes payable to banks and other financial
institutions................................. 31 31 31
------ ------ ------
Total short-term debt....................... $1,432 $1,432 $1,432
====== ====== ======
Long-term debt, net of current maturities and
unamortized discount........................... $5,608 $5,645 $5,375
Notes offered hereby............................ -- -- 270
------ ------ ------
Capital lease liabilities, net of current
portion........................................ 30 30 30
------ ------ ------
Minority equity in subsidiaries and
partnerships................................... 1 1 1
------ ------ ------
Stockholders' equity:
Nonredeemable preferred stock, $1.00 par
value........................................ 294 294 294
Common Stock, $.20 par value; authorized, 500
million shares............................... 71 69 69
Other stockholders' equity.................... 3,369 3,178 3,178
------ ------ ------
Total stockholders' equity.................. 3,734 3,541 3,541
------ ------ ------
Total capitalization........................ $9,373 $9,217 $9,217
====== ====== ======
</TABLE>
- --------
(1) Does not give effect to the anticipated application by Occidental of the
proceeds from a note in the original principal amount of $1.4 billion,
maturing on January 4, 1999, received from K N Energy, Inc., in connection
with Occidental's sale of MidCon Corp.
S-3
<PAGE>
DESCRIPTION OF THE NOTES
The Notes are to be issued as a separate series of senior debt securities
under an Indenture, dated as of April 1, 1998 (as amended, modified or
supplemented from time to time, the "Indenture"), between the Company and The
Bank of New York, as trustee (the "Trustee"). The following summary of certain
provisions of the Notes and of the Indenture does not purport to be complete
and is qualified in its entirety by reference to the Indenture, a copy of
which has been filed as an exhibit to the Registration Statement referred to
in the accompanying Prospectus. Capitalized terms used but not defined herein
or in the accompanying Prospectus have the meanings given to them in the
Indenture. This description of the particular terms of the Notes supplements,
and, to the extent inconsistent therewith, replaces, the description of the
general terms and provisions of the Debt Securities and the Indenture set
forth in the accompanying Prospectus under the heading "Description of the
Debt Securities," to which description reference is hereby made. The Notes are
"Debt Securities" as that term is used in the accompanying Prospectus and are
also referred to therein as the "Offered Securities." The term "Securities,"
as used under this caption, refers to all Debt Securities issuable from time
to time under the Indenture and includes the Notes.
GENERAL
All Securities, including the Notes, to be issued under the Indenture will
be senior unsecured obligations of Occidental and will rank pari passu with
all other senior unsecured indebtedness of Occidental from time to time
outstanding. The Indenture does not limit the aggregate principal amount of
Securities which may be issued thereunder, and Securities may be issued
thereunder from time to time as a single series or in two or more separate
series up to the aggregate principal amount from time to time authorized by
Occidental for each series. Occidental may, from time to time, without the
consent of the Noteholders, provide for the issuance of Notes or other
Securities under the Indenture in addition to the Notes offered hereby. As of
the date of this Prospectus Supplement, $900,000,000 aggregate principal
amount of Securities is outstanding.
The Securities will be senior unsecured obligations of Occidental. However,
substantially all of Occidental's operations are conducted through
subsidiaries, and any right of Occidental to receive assets of any of its
subsidiaries upon the liquidation or recapitalization of any such subsidiary
(and the consequent right of Holders of the Securities to participate in those
assets) will be subject to the claims of such subsidiary's creditors, except
to the extent that Occidental is itself recognized as a creditor of such
subsidiary. Even if Occidental is recognized as a creditor of a subsidiary,
Occidental's claims would still be subject to any security interests in the
assets of such subsidiary securing another creditor of such subsidiary and
would be subject to any indebtedness or other liability of such subsidiary
senior to Occidental's claims. Accordingly, by operation of the foregoing
principles, the Securities will be effectively subordinated to all
indebtedness and other liabilities, including trade accounts payable, of
Occidental's subsidiaries. As of June 30, 1998, the total amount of
indebtedness and other liabilities of such subsidiaries that would have been
senior to the Holders' rights under the Securities within the meaning of the
two preceding sentences was approximately $2.7 billion (excluding interest).
The Notes will be limited initially to $270,000,000 in aggregate principal
amount, and the Notes will mature, unless previously redeemed, on October 3,
2008 ("Stated Maturity"). The Company may "reopen" the Notes series and issue
additional Notes. Each Note will bear interest as described below for the
Initial Spread Period and any Subsequent Spread Period. Interest on each Note
will be payable on each Interest Payment Date specified for the Initial Spread
Period and any Subsequent Spread Period, in each case to the person in whose
name such Note is registered at the close of business on the 15th calendar day
(whether or not a Business Day) next preceding such Interest Payment Date.
Interest payable on any Interest Payment Date or Stated Maturity or date of
earlier redemption will be the amount of interest accrued from and including
the date of original issuance or from the most recent Interest Payment Date on
which interest has been paid to but excluding such Interest Payment Date or
Stated Maturity or date of earlier redemption, as the case may be. Principal
of and interest on the Notes will be payable, and the transfer of Notes will
be registrable, at the Corporate Trust Office of the Trustee or at any other
office or agency designated by Occidental for such purpose.
The Notes will be issued only in fully registered, book-entry form. See "--
Form, Denomination and Registration" below.
S-4
<PAGE>
On and after the initial Remarketing Reset Date, the Notes are subject to
mandatory or optional redemption by the Company, in whole or in part, in the
circumstances and at the redemption prices described below. See "--Redemption
of the Notes" below. The Notes will not be subject to a sinking fund.
INITIAL SPREAD PERIOD
The "Initial Spread Period" will be the period from and including the date
of original issuance of the Notes to but excluding the initial "Remarketing
Reset Date" for the Notes. The initial Remarketing Reset Date will be April 3,
2000.
During the Initial Spread Period for the Notes, interest on the Notes will
be payable quarterly in arrears, on each January 3, April 3, July 3 and
October 3 (each such date an "Interest Payment Date" in respect of the Initial
Spread Period), commencing January 3, 1999, except as described below. The
interest rate on the Notes will be reset quarterly effective on each January
3, April 3, July 3 and October 3 (each, an "Interest Reset Date" in respect of
the Initial Spread Period) and the Notes will bear interest at a per annum
rate (computed on the basis of the actual number of days elapsed over a 360-
day year) equal to LIBOR (as defined below) for the applicable Interest Reset
Period (as defined below), plus the Initial Spread (as defined below). The
"Initial Interest Reset Period" will be the period from and including the date
of original issuance of the Notes to but excluding January 3, 1999.
Thereafter, each "Interest Reset Period" during the Initial Spread Period will
be the quarterly period from and including the most recent Interest Reset Date
to but excluding the next succeeding Interest Reset Date.
The Spread applicable to the Notes during the Initial Spread Period will be
.70% (the "Initial Spread"), and the interest rate mode used for the Initial
Spread Period will be the Floating Rate Mode. Thus, the interest rate per
annum for the Notes during the Initial Interest Reset Period will be equal to
LIBOR, determined as of September 30, 1998, plus .70%. The interest rate per
annum for each succeeding Interest Reset Period during the Initial Spread
Period will equal LIBOR for such Interest Reset Period plus the Initial
Spread, calculated as described below under "--Subsequent Spread Periods--
Floating Rate Mode."
If, during the Initial Spread Period, any Interest Payment Date, redemption
date, Interest Reset Date or Remarketing Reset Date would otherwise be a day
that is not a Business Day, such Interest Payment Date, redemption date,
Interest Reset Date or Remarketing Reset Date will be postponed to the next
succeeding day that is a Business Day, except that if such Business Day is in
the next succeeding calendar month, such Interest Payment Date, redemption
date, Interest Reset Date or Remarketing Reset Date shall be the next
preceding Business Day.
SUBSEQUENT SPREAD PERIODS
The Spread will be determined in the manner described below under "--
Additional Terms of the Notes" for each period from and including each
Remarketing Reset Date to but excluding each next succeeding Remarketing Reset
Date (a "Subsequent Spread Period"), which will be one or more periods of at
least six months and not more than the period remaining to the Stated Maturity
of the Notes (or any integral multiple of six months therein), designated by
the Company, commencing on April 3 or October 3 (or as otherwise specified by
the Company and the Remarketing Agent on the applicable Duration/Mode
Determination Date in connection with the establishment of each Subsequent
Spread Period), as applicable (each such date, a "Remarketing Reset Date"),
through and including October 3, 2008 (no Subsequent Spread Period may end
after October 3, 2008).
Floating Rate Mode
If the Notes are to be reset to the Floating Rate Mode, as agreed to by the
Company and the Remarketing Agent on a Duration/Mode Determination Date, then
during the corresponding Subsequent Spread Period, (i) the interest rate on
the Notes will be reset monthly, quarterly or semiannually (each, an "Interest
Reset Period" during the Subsequent Spread Periods) and the Notes will bear
interest at a per annum rate (computed on the basis of the actual number of
days elapsed over a 360-day year) equal to LIBOR for the applicable Interest
Reset
S-5
<PAGE>
Period, plus the applicable Spread and (ii) interest on such Notes for each
Subsequent Spread Period will be payable either monthly, quarterly or
semiannually on such dates (each such date, an "Interest Payment Date" in
respect of the Subsequent Spread Period) as specified by the Company and the
Remarketing Agent on the applicable Duration/Mode Determination Date. Unless
otherwise specified on the applicable Duration/Mode Determination Date for
Notes in the Floating Rate Mode, interest on such Notes will be payable, in
the case of Notes which reset (i) monthly, on the third day of each month;
(ii) quarterly, on the third day of each January, April, July and October; and
(iii) semiannually, on the third day of each April and October. The first day
of an Interest Reset Period is referred to herein as an "Interest Reset Date"
in respect of the Subsequent Spread Period and, unless otherwise specified on
the applicable Duration/Mode Determination Date, will be, in the case of Notes
which reset (i) monthly, on the third day of each month; (ii) quarterly, on
the third day of each January, April, July and October; and (iii)
semiannually, on the third day of each April and October.
The interest rate in effect on each day will be (i) if such day is an
Interest Reset Date, the interest rate determined as of the Floating Rate
Determination Date (as defined below) immediately preceding such Interest
Reset Date or (ii) if such day is not an Interest Reset Date, the interest
rate determined as of the Floating Rate Determination Date immediately
preceding the most recent Interest Reset Date.
If any Interest Payment Date (other than at Stated Maturity), redemption
date, Interest Reset Date or Remarketing Reset Date in the Floating Rate Mode
would otherwise be a day that is not a Business Day, such Interest Payment
Date, redemption date, Interest Reset Date or Remarketing Reset Date will be
postponed to the next succeeding day that is a Business Day, except that if
such Business Day is in the next succeeding calendar month, such Interest
Payment Date, redemption date, Interest Reset Date or Remarketing Reset Date
shall be the next preceding Business Day.
The interest rate applicable to each Interest Reset Period commencing on the
related Interest Reset Date will be the rate determined as of the applicable
Floating Rate Determination Date. The "Floating Rate Determination Date" will
be the second London Business Day immediately preceding the applicable
Interest Reset Date.
For the Initial Spread Period and if the Notes are reset to the Floating
Rate Mode for a Subsequent Spread Period, LIBOR will be determined by the Rate
Agent (as defined under "--Tender of Notes; Remarketing Agency Agreement"
below) as of the applicable Floating Rate Determination Date in accordance
with the following provisions:
(i) LIBOR will be determined on the basis of the offered rates for
deposits in U.S. dollars of not less than U.S. $1,000,000 of the applicable
Index Maturity, commencing on the second London Business Day immediately
following such Floating Rate Determination Date, which appears on Telerate
Page 3750 (as defined below) as of approximately 11:00 a.m., London time,
on such Floating Rate Determination Date. "Telerate Page 3750" means the
display designated on page "3750" on Bridge Telerate, Inc. (or such other
page as may replace the 3750 page on that service, any successor service or
such other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates
for U.S. dollar deposits). If no rate appears on Telerate Page 3750, LIBOR
for such Floating Rate Determination Date will be determined in accordance
with the provisions of paragraph (ii) below.
(ii) With respect to a Floating Rate Determination Date on which no rate
appears on Telerate Page 3750 as of approximately 11:00 a.m., London time,
on such Floating Rate Determination Date, the Rate Agent shall request the
principal London offices of each of four major reference banks in the
London interbank market selected by the Rate Agent to provide the Rate
Agent with a quotation of the rate at which deposits of the applicable
Index Maturity in U.S. dollars, commencing on the second London Business
Day immediately following such Floating Rate Determination Date, are
offered by it to prime banks in the London interbank market as of
approximately 11:00 a.m., London time, on such Floating Rate Determination
Date in a principal amount equal to an amount of not less than U.S.
$1,000,000 that is representative for a single transaction in such market
at such time. If at least two such quotations are
S-6
<PAGE>
provided, LIBOR for such Floating Rate Determination Date will be the
arithmetic mean of such quotations as calculated by the Rate Agent. If
fewer than two quotations are provided, LIBOR for such Floating Rate
Determination Date will be the arithmetic mean of the rates quoted as of
approximately 11:00 a.m., New York City time, on such Floating Rate
Determination Date by three major banks in The City of New York selected by
the Rate Agent (after consultation with the Company) for loans in U.S.
dollars to leading European banks of the applicable Index Maturity
commencing on the second London Business Day immediately following such
Floating Rate Determination Date and in a principal amount equal to an
amount of not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Rate Agent are not quoting as mentioned
in this sentence, LIBOR for such Floating Rate Determination Date will be
LIBOR determined with respect to the immediately preceding Floating Rate
Determination Date, or in the case of the first Floating Rate Determination
Date, LIBOR for the Initial Interest Reset Period.
The Index Maturity applicable to Notes in the Floating Rate Mode will be, in
the case of Notes resetting (i) monthly, one month; (ii) quarterly, three
months; and (iii) semiannually, six months.
Fixed Rate Mode
If the Notes are to be reset to the Fixed Rate Mode, as agreed to by the
Company and the Remarketing Agent on a Duration/Mode Determination Date, then
the applicable Fixed Rate for the corresponding Subsequent Spread Period will
be determined by 1:00 p.m., New York City time, on the third Business Day
prior to the Remarketing Reset Date for such Subsequent Spread Period (the
"Fixed Rate Determination Date"), in accordance with the following provisions:
the Fixed Rate will be determined by (i) adding the applicable Spread (as
determined by the Remarketing Agent and agreed to by the Company on the
preceding Spread Determination Date) to (ii) the yield to maturity determined
by 1:00 p.m., New York City time, on the Fixed Rate Determination Date
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the applicable United States
Treasury security, selected by the Rate Agent after consultation with the
Remarketing Agent, as having a maturity comparable to the duration selected
for the following Subsequent Spread Period, which would be used in accordance
with customary financial practice in pricing new issues of corporate debt
securities of comparable maturity to the duration selected for the following
Subsequent Spread Period.
Interest in the Fixed Rate Mode will be computed on the basis of a 360-day
year of twelve 30-day months. Such interest will be payable semiannually in
arrears on the Interest Payment Dates (i.e., April 3 and October 3, unless
otherwise specified by the Company and the Remarketing Agent on the applicable
Duration/Mode Determination Date) at the applicable Fixed Rate, as determined
by the Company and the Remarketing Agent on the Fixed Rate Determination Date,
beginning on the applicable Remarketing Reset Date and continuing for the
duration of the relevant Subsequent Spread Period.
If any Interest Payment Date or any redemption date in the Fixed Rate Mode
would otherwise be a day that is not a Business Day (in either case, other
than any Interest Payment Date or redemption date that falls on a Remarketing
Reset Date, in which case such date will be postponed to the next day that is
a Business Day), the related payment of principal and interest will be made on
the next succeeding Business Day as if it were made on the date such payment
was due, and no interest will accrue on the amounts so payable for the period
from and after such date to the next succeeding Business Day.
ADDITIONAL TERMS OF THE NOTES
The "Spread" that will be applicable to the Notes during each Subsequent
Spread Period will be the percentage (a) recommended by the Remarketing Agent
so as to result in a rate that, in the opinion of the Remarketing Agent, will
enable tendered Notes to be remarketed by the Remarketing Agent at 100% of the
principal amount thereof, as described under "--Tender of Notes; Remarketing
Agency Agreement" below, and (b) agreed to by the Company. The interest rate
mode applicable to each Subsequent Spread Period shall be either the Floating
Rate Mode or the Fixed Rate Mode, as determined by the Company and the
Remarketing Agent.
S-7
<PAGE>
If the Stated Maturity (or redemption date) for the Notes falls on a day
that is not a Business Day, the related payment of principal and interest will
be made on the next succeeding Business Day as if it were made on the date
such payment was due, and no interest will accrue on the amounts so payable
for the period from and after such date to the next succeeding Business Day.
Unless notice of redemption of the Notes as a whole has been given, the
duration, redemption dates, redemption type (i.e., par, premium or make-
whole), redemption prices (if applicable), Remarketing Reset Date, Interest
Reset Dates, Interest Payment Dates, interest rate mode (i.e., Fixed Rate Mode
or Floating Rate Mode), and any other relevant terms for each Subsequent
Spread Period will be established by 3:00 p.m., New York City time, on the
tenth Business Day prior to the Remarketing Reset Date which commences such
Subsequent Spread Period (the "Duration/Mode Determination Date"). In
addition, the Spread for each Subsequent Spread Period will be established by
1:00 p.m., New York City time, on the fifth Business Day prior to the
Remarketing Reset Date commencing such Subsequent Spread Period (the "Spread
Determination Date"). The Company will, not less than ten nor more than twenty
days prior to any Spread Determination Date, (i) inform DTC that the Notes are
subject to automatic tender on the Remarketing Reset Date (subject to the
right to elect not to tender) and (ii) request that DTC notify its
participants (as defined herein) of such Spread Determination Date and of the
procedures that must be followed if any beneficial owner of a Note wishes not
to tender such Note as described under "--Tender of Notes; Remarketing Agency
Agreement" below. In the event that DTC or its nominee is no longer the holder
of record of the Notes, the Company will notify the Noteholders of such
information within such period of time. This will be the only notice given by
the Company or the Remarketing Agent with respect to such Spread Determination
Date and procedures for electing not to tender Notes.
The term "Business Day" means any day other than a Saturday or Sunday or a
day on which banking institutions in The City of New York are required or
authorized to close and, in the case of Notes in the Floating Rate Mode, that
is also a London Business Day. The term "London Business Day" means any day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
In the event that the Company and Remarketing Agent do not agree on the
Spread for any Subsequent Spread Period, then the Company is required
unconditionally to repurchase and retire all of the Notes on the Remarketing
Reset Date at a price equal to 100% of the principal amount of the Notes,
together with accrued and unpaid interest, if any, thereon to the Remarketing
Reset Date.
All percentages resulting from any calculation of any interest rate for the
Notes will be rounded, if necessary, to the nearest one hundred thousandth of
a percentage point, with five one millionths of a percentage point rounded
upward and all dollar amounts will be rounded to the nearest cent, with one-
half cent being rounded upward.
TENDER OF NOTES; REMARKETING AGENCY AGREEMENT
The Company and the Remarketing Agent are entering into a Remarketing
Agreement with respect to remarketing of the Notes (the "Remarketing
Agreement"). In the event the Company and the Remarketing Agent agree on the
Spread on the Spread Determination Date with respect to any Subsequent Spread
Period, the Company and the Remarketing Agent will enter into a Remarketing
Agency Agreement (the "Remarketing Agency Agreement") on such Spread
Determination Date. On the Remarketing Reset Date which commences such
Subsequent Spread Period, each Note will be automatically tendered, or deemed
tendered, to the Remarketing Agent for remarketing by the Remarketing Agent on
the Remarketing Reset Date at 100% of the principal amount thereof (the
"Purchase Price") unless the beneficial owner of such Note, at such owner's
option, upon giving notice as provided below (the "Hold Notice"), elects not
to tender such Note. Subject to the second succeeding paragraph, the Purchase
Price will be paid by the Remarketing Agent in accordance with the standard
procedures of DTC, which currently provide for payments in same-day funds.
Interest accrued on such Notes with respect to the preceding interest period
will be paid in the manner described under "--Form, Denomination and
Registration" and "--Additional Terms of the Notes." If such beneficial owner
has an account at the Remarketing Agent and tenders such Note through such
account, such beneficial owner will not
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be required to pay any fee or commission to the Remarketing Agent. If such
Note is tendered through a broker, dealer, commercial bank, trust company or
other institution, other than the Remarketing Agent, such holder may be
required to pay fees or commissions to such other institution. It is currently
anticipated that Notes so purchased by the Remarketing Agent will be
remarketed by it.
The Hold Notice must be received by the Remarketing Agent during the period
commencing at 3:00 p.m., New York City time, on the Spread Determination Date
and ending at 12:00 noon, New York City time, on the second Business Day
following such Spread Determination Date for such Subsequent Spread Period
(the "Notice Date"). In order to ensure that a Hold Notice is received on a
particular day, the beneficial owner of Notes must direct his broker or other
designated participant or indirect participant (as defined herein) to give
such Hold Notice before the broker's cut-off time for accepting instructions
for that day. Different firms may have different cut-off times for accepting
instructions from their customers. Accordingly, beneficial owners should
consult the brokers or other participants or indirect participants through
which they own their interests in the Notes for the cut-off times for such
brokers, other participants or indirect participants. See "--Form,
Denomination and Registration" below. Except as otherwise provided below, a
Hold Notice shall be irrevocable. If a Hold Notice is not received for any
reason by the Remarketing Agent with respect to any Note by 12:00 noon, New
York City time, on the Notice Date, the beneficial owner of such Note shall be
deemed to have elected to tender such Note for purchase by the Remarketing
Agent. All of the Notes, whether or not tendered, shall bear interest upon the
same terms.
The Remarketing Agent will attempt, on a reasonable efforts basis, to
remarket the tendered Notes at a price equal to 100% of the aggregate
principal amount so tendered. There is no assurance that the Remarketing Agent
will be able to remarket the entire principal amount of Notes tendered in a
remarketing. The obligations, if any, of the Remarketing Agent will be subject
to certain conditions and termination events customary in the Company's
offerings of debt securities, including a condition that no material adverse
change in the consolidated financial condition of the Company and its
subsidiaries, taken as a whole, shall have occurred since the Spread
Determination Date. In the event that the Remarketing Agent is unable to
remarket some or all of the tendered Notes and, in its sole discretion,
chooses not to purchase such tendered Notes, the Company is obligated
unconditionally to purchase and retire on the Remarketing Reset Date the
remaining unsold tendered Notes at a price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, thereon to the
applicable Remarketing Reset Date.
No beneficial owner of any Note shall have any rights or claims against the
Remarketing Agent as a result of the Remarketing Agent not purchasing such
Notes.
Notwithstanding anything to the contrary contained herein, the Remarketing
Agent shall have the option, but not the obligation, to purchase any Notes
tendered to it that it is not able to remarket. If the Remarketing Agent is
unable to remarket the entire principal amount of all Notes tendered on any
Remarketing Reset Date and, in its sole discretion, the Remarketing Agent
chooses not to purchase such tendered Notes, it will promptly notify the
Company and the Trustee.
The term "Remarketing Agent" means the nationally recognized broker-dealer
selected by the Company to act as Remarketing Agent. Pursuant to the
Remarketing Agreement, Merrill Lynch, Pierce, Fenner & Smith Incorporated has
agreed to act as Remarketing Agent. The term "Rate Agent" means the entity
selected by the Company as its agent to determine (i) LIBOR and the interest
rate on the Notes for any Interest Reset Period and/or (ii) the yield to
maturity on the applicable United States Treasury security that is used in
connection with the determination of the applicable Fixed Rate, and the
ensuing applicable Fixed Rate. Pursuant to the Remarketing Agreement, Merrill
Lynch, Pierce, Fenner & Smith Incorporated has agreed to act as Rate Agent in
respect of any Fixed Rate Mode, and pursuant to a Calculation Agency
Agreement, The Bank of New York has agreed to act as the Rate Agent in respect
of any Floating Rate Mode. The Company, in its sole discretion, may change the
Remarketing Agent and the Rate Agent for any Subsequent Spread Period at any
time on or prior to 3:00 p.m., New York City time, on the Duration/Mode
Determination Date relating thereto.
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Each of the Rate Agents and the Remarketing Agent, in its individual or any
other capacity, may buy, sell, hold and deal in any of the Notes. Either of
such parties may exercise any vote or join in any action which any beneficial
owner of Notes may be entitled to exercise or take with like effect as if it
did not act in any capacity under the Remarketing Agency Agreement. Either of
such parties, in its individual capacity, either as principal or agent, may
also engage in or have an interest in any financial or other transaction with
the Company as freely as if it did not act in any capacity under the
Remarketing Agency Agreement or the Calculation Agency Agreement, as the case
may be.
REDEMPTION OF THE NOTES
The Notes may not be redeemed prior to the initial Remarketing Reset Date. On
each Remarketing Reset Date (including the initial Remarketing Reset Date) and
on those Interest Payment Dates specified as redemption dates by the Company on
the Duration/Mode Determination Date in connection with any Subsequent Spread
Period, the Notes may be redeemed, at the option of the Company, in whole or in
part, upon notice thereof given at any time during the 30 calendar day period
ending on the tenth Business Day prior to the redemption date, in accordance
with the redemption type selected on the Duration/Mode Determination Date. The
Notes are also subject to redemption in whole or in part as provided under "--
Additional Terms of the Notes" and "--Tender of Notes; Remarketing Agency
Agreement" above. In the event that less than all of the outstanding Notes are
to be redeemed, the Notes to be redeemed shall be selected by such method as
the Company shall deem fair and appropriate. So long as DTC or its nominee is
the record holder of the Notes, the Company will give notice to DTC, and DTC
will determine the principal amount to be redeemed from the account of each
participant in accordance with its rules and procedures. A participant may
determine to redeem from some beneficial owners (which may include a
participant holding Notes for its own account) without redeeming from the
accounts of other beneficial owners.
The redemption type to be chosen by the Company and the Remarketing Agent on
the Duration/Mode Determination Date with respect to any Subsequent Spread
Period may be one of the following as defined herein: (i) Par Redemption; (ii)
Premium Redemption; or (iii) Make-Whole Redemption. "Par Redemption" means
redemption at a redemption price equal to 100% of the principal amount thereof,
plus unpaid interest thereon, if any, accrued to the redemption date. "Premium
Redemption" means redemption at a redemption price or prices greater than 100%
of the principal amount thereof, plus unpaid interest thereon, if any, accrued
to the redemption date, as determined on the Duration/Mode Determination Date.
"Make-Whole Redemption" means redemption at a redemption price equal to the
Make-Whole Amount (as defined below) with respect to such Notes. Unless
otherwise specified by the Company and the Remarketing Agent on any
Duration/Mode Determination Date, the redemption type will be Par Redemption.
"Make-Whole Amount" means, in connection with any optional redemption of any
Note, an amount equal to the greater of (i) 100% of its principal amount plus
accrued interest, if any, thereon to the date of redemption and (ii) the sum of
the present values of the remaining scheduled payments of principal and
interest thereon discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Yield plus the Reinvestment Spread.
"Treasury Yield" means, with respect to any redemption date applicable to any
of the Notes, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
applicable Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means, with respect to the Notes subject to
redemption, the United States Treasury security selected by the Remarketing
Agent as having a maturity comparable to the remaining term of the Notes that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Notes.
"Comparable Treasury Price" means, with respect to any redemption date
applicable to the Notes subject to redemption, (i) the average of the
applicable Reference Treasury Dealer Quotations for such redemption date,
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after excluding the highest and lowest of such applicable Reference Treasury
Dealer Quotations, or (ii) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Quotations, or
(iii) if only one Reference Treasury Dealer Quotation is received, such
Quotation. "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date for the Notes subject to
redemption, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue for the Notes (expressed in each case
as a percentage of its principal amount) quoted in writing to the Trustee by
such Reference Treasury Dealer at 3:30 p.m. on the third business day preceding
such redemption date.
"Reference Treasury Dealer" means, with respect to the Notes subject to
redemption, at least four primary U.S. Government securities dealers in New
York City as the Company shall select, which may include the Remarketing Agent
or an affiliate thereof.
"Reinvestment Spread" means, with respect to the Notes subject to redemption,
a number, expressed as a number of basis points or as a percentage, selected by
the Company and agreed to by the Remarketing Agent on the Duration/Mode
Determination Date.
FORM, DENOMINATION AND REGISTRATION
The Notes will be issued only in fully registered form, without coupons, in
minimum denominations of $1,000 and any integral multiple of $1,000 in excess
thereof. The Notes will be deposited with, or on behalf of, DTC. The Notes will
be represented by one or more Global Notes registered in the name of Cede &
Co., as nominee of DTC. The interests of beneficial owners in the Global Notes
will be represented through financial institutions acting on their behalf as
direct or indirect participants in DTC.
Ownership of beneficial interests in a Global Note will be limited to persons
who have accounts with DTC ("participants") or persons who hold interests
through participants. Ownership of beneficial interests in the Global Notes
will be shown on, and the transfer of these ownership interests will be
effected only through, records maintained by DTC or its nominee (with respect
to interests of participants) and the records of participants (with respect to
interests of persons other than participants).
So long as DTC, or its nominee, is the registered owner or holder of a Global
Note, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by such Global Note for all purposes
under the Indenture and the Notes. In addition, no beneficial owner of an
interest in a Global Note will be able to transfer that interest except in
accordance with DTC's applicable procedures (in addition to those under the
Indenture referred to herein).
Payments on Global Notes will be made to DTC or its nominee, as the
registered owner thereof. Neither the Company, the Trustee nor any paying agent
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
the Global Notes or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company expects that DTC or its nominee will credit direct participants'
accounts on the payable date with payments in respect of a Global Note in
amounts proportionate to their respective beneficial interest in the principal
amount of such Global Note as shown on the records of DTC or its nominee,
unless DTC has reason to believe that it will not receive payment on the
payable date. The Company also expects that payments by participants to owners
of beneficial interests in such Global Note held through such participants will
be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers registered in "street
name." Such payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in accordance with DTC
rules. The laws of some states require that certain persons take physical
delivery of securities in definitive form. Consequently, the ability
to transfer beneficial interests in a Global Note to such persons may be
limited. Because DTC can only act on
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behalf of participants, who in turn act on behalf of indirect participants and
certain banks, the ability of a person having a beneficial interest in a Global
Note to pledge such interest to persons or entities that do not participate in
the DTC system, or otherwise take actions in respect of such interest, may be
affected by the lack of a physical certificate of such interest.
The Company believes that it is the policy of DTC that it will take any
action permitted to be taken by a holder of Notes only at the direction of one
or more participants to whose account interests in the Global Notes are
credited and only in respect of such portion of the aggregate principal amount
of the Notes as to which such participant or participants has or have given
such direction.
The Indenture provides that if (i) the Depository notifies the Company that
it is unwilling or unable to continue as Depository or if the Depository ceases
to be eligible under the Indenture and a successor depository is not appointed
by the Company within 90 days or (ii) an Event of Default with respect to the
Notes shall have occurred and be continuing, the Global Notes will be exchanged
for Notes in definitive form of like tenor and of an equal aggregate principal
amount, in authorized denominations. Such definitive Notes shall be registered
in such name or names as the Depository shall instruct the Trustee. It is
expected that such instructions may be based upon directions received by the
Depository from participants with respect to ownership of beneficial interests
in Global Notes.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC holds securities that its participants
deposit with DTC and facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. DTC is owned
by a number of its direct participants, including the Underwriter, and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
direct participant, either directly or indirectly ("indirect participants").
The rules applicable to DTC and its participants are on file with the
Commission.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Notes among participants of DTC, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Company nor the Trustee
will have any responsibility for the performance by DTC or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a summary of certain United States federal income tax
consequences of the purchase, ownership and disposition of the Notes by
holders acquiring the Notes on their original issue at the initial issue
price. This summary is based upon existing United States federal income tax
law, which is subject to change, possibly retroactively. This summary does not
address all aspects of United States federal income taxation which may be
important to particular holders in light of their individual investment
circumstances, such as Notes held by investors subject to special tax rules
(e.g., financial institutions, insurance companies, regulated investment
companies, real estate investment trusts, broker-dealers, and tax exempt
organizations) or to persons that will hold the Notes as part of a straddle,
hedge, or synthetic security transaction for United States federal income tax
purposes, all of whom may be subject to tax rules that differ significantly
from those summarized below. In addition, this summary does not discuss any
foreign, state, or local tax considerations. This summary assumes that
investors will hold their Notes as "capital assets" (generally, property held
for investment) under the Internal Revenue Code of 1986, as amended (the
"Code"). Prospective investors are urged to consult their tax advisors
regarding the Federal, state, local and foreign income tax consequences of the
purchase, ownership and disposition of the Notes.
Although the matter is not completely free from doubt, the Notes should be
treated for United States federal income tax purposes as variable rate debt
instruments that mature on the Remarketing Reset Date for purposes of
computing yield and maturity. Based on this treatment, a holder would be
subject to tax on the interest payable with respect to the Notes as ordinary
interest income at the time such payments are accrued or received in
accordance with such holder's method of accounting for United States federal
income tax purposes. Upon the sale, exchange, redemption or other disposition
by a holder of the Notes, the holder should recognize capital gain or loss
equal to the difference between the amount realized on the disposition of such
Notes (exclusive of amounts attributable to the payment of accrued interest
not previously included in income) and the holder's adjusted tax basis in such
Notes. It is possible, however, that the Internal Revenue Service may assert
that the Notes are subject to the Treasury Regulations dealing with contingent
debt obligations, which could result in less favorable tax consequences to
holders of the Notes.
Consequences to Non-tendering Holders
A holder who does not tender his Notes to the Remarketing Agent on the
Remarketing Reset Date will continue to be subject to tax on the interest
payable with respect to such Notes as described above. It is unclear whether,
for United States federal income tax purposes, a holder who does not tender
his Notes to the Remarketing Agent on the Remarketing Reset Date has a deemed
exchange of "new" or modified notes for original Notes on the Remarketing
Reset Date. Even if there is a deemed exchange, a holder who acquired the
Notes at original issuance at the initial issue price should not recognize any
gain or loss on such deemed disposition because his adjusted tax basis in
Notes will equal the Purchase Price. A holder may, however, start a new
holding period with respect to the "new" or modified Notes received in the
deemed exchange.
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PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Underwriting Agreement
(the "Underwriting Agreement") between the Company and Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Underwriter"), the Company has agreed to
sell to the Underwriter, and the Underwriter has agreed to purchase from the
Company, the principal amount of Notes set forth on the cover of this
Prospectus Supplement at a price equal to 99.80% of the principal amount
thereof.
The Underwriter has advised the Company that it proposes to offer the Notes
from time to time for sale in negotiated transactions or otherwise, at prices
related to prevailing market prices determined at the time of sale. The
Underwriter may effect such transactions by selling Notes to or through
dealers and such dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the Underwriter and any purchasers
of the Notes for whom they may act as agent.
The Underwriter is permitted to engage in certain transactions that maintain
or otherwise affect the price of the Notes. Such transactions may include
over-allotment transactions and purchases to cover short positions created by
the Underwriter in connection with the offering. If the Underwriter creates a
short position in the Notes in connection with the offering, i.e., if it sells
more Notes than set forth on the cover page of this Prospectus Supplement, the
Underwriter may reduce that short position by purchasing Notes in the open
market. In general, purchases of a security to reduce a short position could
cause the price of the security to be higher than it might be in the absence
of such purchases.
Neither the Company nor the Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Notes. In addition,
neither the Company nor the Underwriter makes any representation that the
Underwriter will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
The Underwriting Agreement provides that the obligation of the Underwriter
to pay for and accept delivery of the Notes is subject to certain conditions,
including delivery of certain legal opinions by counsel for the Underwriter.
The Underwriting Agreement provides that the Company will indemnify the
Underwriter against certain liabilities under the Securities Act of 1933, as
amended, or will contribute to payments the Underwriter may be required to
make in respect thereof.
The Notes will be a new issue of securities for which there currently is no
market. Although the Underwriter has informed the Company that it currently
intends to make a market in the Notes as permitted by applicable laws and
regulations, it is not obligated to do so, and any such market making may be
discontinued at any time at the sole discretion of the Underwriter and without
notice. Accordingly, there can be no assurance as to the development or
liquidity of any market for the Notes. The Company does not intend to apply
for listing of the Notes on any securities exchange or for quotation through
the National Association of Securities Dealers Automated Quotation System.
The Underwriter and its affiliates have performed various investment banking
and other services for the Company and its affiliates in the past and may do
so from time to time in the future.
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LEGAL MATTERS
Certain matters with respect to the legality of the securities being offered
hereby will be passed upon for Occidental by Robert E. Sawyer, Esq., Associate
General Counsel of Occidental, and by Skadden, Arps, Slate, Meagher & Flom
LLP, Los Angeles, California. Mr. Sawyer beneficially owns, and has rights to
acquire under employee stock options, an aggregate of less than 1% of the
outstanding common stock of Occidental. Skadden, Arps, Slate, Meagher & Flom
LLP has represented the Underwriter from time to time on various unrelated
legal matters. Brown & Wood LLP, Los Angeles, California will act as counsel
for the Underwriter.
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PROSPECTUS
OCCIDENTAL PETROLEUM CORPORATION
[LOGO OF OCCIDENTAL PERTROLEUM CORPORATION]
SENIOR DEBT SECURITIES
----------------
Occidental Petroleum Corporation ("Occidental") may offer from time to time
pursuant to this Prospectus its senior unsecured debt securities consisting of
notes, debentures or other evidences of indebtedness (the "Debt Securities").
The Debt Securities will be limited to $800,000,000 aggregate public offering
price (or, if applicable, the equivalent thereof in any foreign currency or
composite currency or currency unit, based on the applicable exchange rate in
effect at the time of the sale of such Debt Securities). The Debt Securities
may be offered as a single series or as two or more separate series in
amounts, at prices and on terms to be determined in light of market conditions
at the time of sale and to be set forth in one or more Prospectus Supplements.
The terms of each series of Debt Securities, including, where applicable,
the specific designation, the aggregate principal amount, the authorized
denominations, the maturity, the rate or rates and the time or times of
payment of any interest, any terms for optional or mandatory redemption or
payment of additional amounts or any sinking fund provisions, the initial
public offering price, the proceeds to Occidental and any other specific terms
in connection with the offering and sale of such series will be set forth in
one or more Prospectus Supplements. As used herein, Debt Securities shall
include securities denominated in United States dollars or, at the option of
Occidental if so specified in an applicable Prospectus Supplement, in any
other currency or in composite currencies or currency units or in amounts
determined by reference to an index. This Prospectus may not be used to
consummate sales of Debt Securities unless accompanied by a Prospectus
Supplement.
The Debt Securities may be sold to or through one or more underwriters or
dealers, directly by Occidental, or through one or more agents designated from
time to time. See "Plan of Distribution." If any underwriter or agent of
Occidental is involved in the sale of any Debt Securities in respect of which
this Prospectus is being delivered, the name of such underwriter or agent and
any applicable commission or discount will be set forth in a Prospectus
Supplement. The net proceeds to Occidental from such sale also will be set
forth in such Prospectus Supplement.
The Debt Securities may be issued in registered form or bearer form or both.
Debt Securities issued in bearer form may be offered only to non-United States
persons and to offices located outside the United States of certain United
States financial institutions. If the Debt Securities of any series are
issuable in bearer form, certain limitations on such issuance will be set
forth in an applicable Prospectus Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is September 25, 1998.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY OCCIDENTAL
OR ANY UNDERWRITER OR AGENT. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS
SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THEIR RESPECTIVE DATES.
AVAILABLE INFORMATION
Occidental has filed a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with the Securities and Exchange Commission (the "Commission") with
respect to the Debt Securities. This Prospectus does not contain all the
information set forth in the Registration Statement, certain items of which
are omitted in accordance with the rules and regulations of the Commission.
For further information regarding the Debt Securities offered hereby,
reference is made to the Registration Statement and exhibits thereto, which
may be inspected without charge at the offices of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of
which may be obtained from the Commission at prescribed rates.
Occidental is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information may be
inspected at, and, upon payment of the Commission's customary charges, copies
may be obtained from, the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and should also be available for inspection and copying at the
regional offices of the Commission located at 7 World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials can also be obtained from
the Public Reference Section of the Commission at the above Washington, D.C.
address at prescribed rates. In addition, the Commission maintains a site on
the World Wide Web that contains reports, proxy statements and other
information filed electronically with the Commission. The address of such Web
site is http://www.sec.gov. Such material should also be available for
inspection at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York and the Pacific Exchange, 115 Sansome Street, Suite 1104, San
Francisco, California.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by Occidental with the
Commission, are hereby incorporated by reference in this Prospectus:
(i) Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
(ii) Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31, 1998 and June 30, 1998; and
(iii) Current Reports on Form 8-K, dated January 26, 1998, January 30,
1998, January 31, 1998, February 10, 1998, February 11, 1998, February 12,
1998, April 1, 1998, April 20, 1998, May 15, 1998, May 15, 1998 and July
20, 1998.
All documents filed by Occidental pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Debt Securities shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof from
the respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any supplement hereto, or in
any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
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Occidental will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any documents incorporated by reference
herein, except for exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should
be directed to Occidental Petroleum Corporation, 10889 Wilshire Boulevard, Los
Angeles, California 90024, Attention: David C. Yen, Vice President and
Treasurer (telephone (310) 208-8800).
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars,"
"U.S. dollars" or "U.S.$").
OCCIDENTAL PETROLEUM CORPORATION
Occidental, a Delaware corporation, explores for, develops, produces and
markets crude oil and natural gas and manufactures and markets a variety of
chlorovinyls (including basic chemicals and polymers and plastics), specialty
chemicals and petrochemicals. Occidental conducts its principal operations
through two subsidiaries, Occidental Oil and Gas Corporation and Occidental
Chemical Corporation, and its 29.5% interest in the Equistar Chemicals, LP
petrochemicals partnership. Occidental's executive offices are located at
10889 Wilshire Boulevard, Los Angeles, California 90024; telephone (310) 208-
8800.
USE OF PROCEEDS
Unless otherwise indicated in an applicable Prospectus Supplement,
Occidental intends to use the net proceeds from the sale of the Debt
Securities for general corporate purposes, primarily the retirement of
outstanding indebtedness.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are Occidental's total enterprise ratios of earnings to fixed
charges for each of the periods indicated:
<TABLE>
<CAPTION>
JUNE YEARS ENDED DECEMBER 31,
30, --------------------------------------------------------
1998 1997 1996 1995 1994 1993
---- ---- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
2.61 1.55 2.08 1.75 (a) (a)
</TABLE>
- --------
(a) Earnings were inadequate to cover fixed charges by $298 million in 1994
and $224 million in 1993.
Earnings are based on Occidental's consolidated income from continuing
operations, before taxes on income (other than foreign oil and gas taxes) and
before fixed charges. Fixed charges consist of interest and debt expense,
including the proportionate share of interest and debt expense of 50-percent-
owned equity investments, the portion of lease rentals representative of the
interest factor and preferred dividends to minority stockholders of
subsidiaries adjusted to a pretax basis.
DESCRIPTION OF THE DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Securities") and the extent
to which such general provisions may apply to the Offered Securities will be
described in a Prospectus Supplement relating to such Offered Securities.
The Debt Securities will be issued under an Indenture, dated as of April 1,
1998 (the "Indenture"), between Occidental and The Bank of New York, as
trustee (the "Trustee"). The terms of the Debt Securities include
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those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and holders of the Debt Securities are referred to the Indenture and
the Trust Indenture Act for a statement thereof. The following summary of
certain provisions of the Debt Securities and of the Indenture does not
purport to be complete and is qualified in its entirety by reference to the
Indenture, which has been filed as an exhibit to the Registration Statement.
Capitalized terms used but not defined herein have the meanings given to them
in the Indenture. The term "Securities," as used under this caption, refers to
all securities issued or issuable from time to time under the Indenture and
includes the Debt Securities.
GENERAL
The Indenture will not limit the aggregate principal amount of Securities
that may be issued thereunder, and Securities may be issued thereunder from
time to time as a single series or in two or more separate series. Occidental
has authorized the issuance of Securities under the Indenture in addition to
the $800,000,000 aggregate public offering price of the Debt Securities
registered pursuant to the Registration Statement of which this Prospectus is
a part. As of the date of this Prospectus, $900,000,000 aggregate public
offering price of Securities are outstanding under the Indenture. The
Indenture will not limit the ability of Occidental or its subsidiaries to
incur additional unsecured indebtedness.
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for a description of the specific terms of the Offered Securities
to which such Prospectus Supplement relates, including, without limitation:
(i) the title of the Offered Securities; (ii) any limit on the aggregate
principal amount of the Offered Securities; (iii) whether the Offered
Securities are to be issuable as Registered Securities, Bearer Securities or
both, whether the Offered Securities may be represented by a Security in
temporary or definitive global form, and, if so, the initial Depositary with
respect to such temporary or definitive global Security, and, if other than as
provided in Section 304 or Section 305 of the Indenture, as applicable,
whether, and the circumstances under which, beneficial owners of interests in
any such temporary or definitive global Security may exchange such interests
for Securities of such series of like tenor and of any authorized form and
denomination; (iv) the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which the Offered Securities will be
issued; (v) the date or dates on which the principal of the Offered Securities
is payable or the method of determination thereof; (vi) the rate or rates
(which may be fixed or variable) at which the Offered Securities will bear
interest, if any, or the method of calculating such rate or rates and the date
or dates from which such interest, if any, will accrue; (vii) the Interest
Payment Dates on which such interest, if any, on the Offered Securities will
be payable and the Regular Record Date for any interest payable on any Offered
Securities that are Registered Securities on any Interest Payment Date; (viii)
the person to whom any interest will be payable on any Offered Security that
is a Registered Security, if other than the person in whose name the Offered
Security is registered at the close of business on the Regular Record Date for
the payment of such interest; (ix) the manner in which, or the person to whom,
any interest on any Offered Security that is a Bearer Security will be
payable, if other than upon presentation and surrender of the coupons
appertaining thereto, and the extent to which, and the manner in which, any
interest payable on a temporary or definitive global Security on an Interest
Payment Date will be paid; (x) any mandatory or optional sinking fund or
analogous provisions and any provisions for the remarketing of the Offered
Securities; (xi) each office or agency where, subject to the terms of the
Indenture as described below under "Payment and Paying Agents," the principal
of and interest, if any, on the Offered Securities will be payable and each
office or agency where, subject to the terms of the Indenture as described
below under "Form, Exchange, Registration and Transfer," the Offered
Securities may be presented for exchange and Offered Securities that are
Registered Securities may be presented for registration of transfer; (xii) the
date, if any, after or on which, and the price or prices at which, the Offered
Securities may, pursuant to any optional or mandatory redemption provisions,
be redeemed, in whole or in part, and the other detailed terms and provisions
of any such optional or mandatory redemption provisions; (xiii) the
denominations in which any Offered Securities that are Registered Securities
will be issuable, if other than the denomination of $1,000 and any integral
multiple thereof, and the denominations in which any Offered Securities that
are Bearer Securities will be issuable, if other than denominations of $5,000
and $100,000; (xiv) the currency or currencies, including
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composite currencies or currency units, for which the Offered Securities may
be purchased or in which the Offered Securities may be denominated, and/or in
which the payment of principal of and interest, if any, on the Offered
Securities shall be payable, if other than U.S. dollars, and, if other than
U.S. dollars, whether the Offered Securities may be satisfied and discharged
other than as provided in Article Four of the Indenture; (xv) if the amounts
of payments of principal of and interest, if any, on the Offered Securities
are to be determined by reference to an index, formula or other method, or
based on a coin or currency other than that in which the Offered Securities
are stated to be payable, the manner in which such amounts shall be determined
and the calculation agent, if any, with respect thereto; (xvi) if other than
the principal amount thereof, the portion of the principal amount of the
Offered Securities that will be payable upon declaration of acceleration of
the Maturity thereof pursuant to an Event of Default; (xvii) if other than as
defined in the Indenture, the meaning of "Business Day" when used with respect
to the Offered Securities; (xviii) if the Offered Securities may be issued or
delivered (whether upon original issuance or upon exchange of a temporary
Security of such series or otherwise), or any installment of principal or
interest is payable, only upon receipt of certain certificates or other
documents or satisfaction of other conditions in addition to those specified
in the Indenture, the forms and terms of such certificates, documents or
conditions; (xix) any addition to, or modification or deletion of, any Event
of Default, covenant of Occidental or other term or provision specified in the
Indenture with respect to the Offered Securities; and (xx) any other terms of
the Offered Securities whether or not consistent with the provisions of the
Indenture. Any such Prospectus Supplement also will describe any special
provisions for the payment of additional amounts with respect to the Offered
Securities. The variable terms of the Securities are subject to change from
time to time, but no such change will affect any Security already issued or as
to which an offer to purchase has been accepted by Occidental.
Securities may be issued as Discount Securities, which may be sold at a
discount below their principal amount. Special United States Federal income
tax considerations applicable to Securities issued at an original issue
discount, including Discount Securities, may be described in any applicable
Prospectus Supplement. Special United States Federal tax considerations and
other restrictions or terms applicable to any Offered Securities that are
(i) issuable in bearer form, (ii) offered exclusively to Non-United States
Holders (as defined in the Indenture) or (iii) denominated in a currency other
than United States dollars will be set forth in a Prospectus Supplement
relating thereto.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
The Securities of a series may be issued solely as Registered Securities,
solely as Bearer Securities (with or without coupons attached) or as both
Registered Securities and Bearer Securities. Securities of a series may be
issuable in whole or part in the form of one or more global Securities, as
described below under "Global Securities."
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor. In addition, if Securities of
any series are issuable as both Registered Securities and as Bearer
Securities, at the option of the Holder, subject to the terms of the
Indenture, Bearer Securities (accompanied by all unmatured coupons, except as
provided below, and all matured coupons in default) of such series will be
exchangeable for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Unless
otherwise indicated in an applicable Prospectus Supplement, any Bearer
Security surrendered in exchange for a Registered Security between a Regular
Record Date or a Special Record Date and the relevant date for payment of
interest will be surrendered without the coupon relating to such date for
payment of interest and such interest will not be payable in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
terms of the Indenture. Bearer Securities will not be issued in exchange for
Registered Securities.
Securities may be presented for exchange as provided above, and, unless
otherwise indicated in an applicable Prospectus Supplement, Registered
Securities may be presented for registration of transfer (duly endorsed or
accompanied by a duly executed written instrument of transfer), at the office
of the Security Registrar
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or at the office of any transfer agent designated by Occidental for such
purpose with respect to any series of Securities and referred to in an
applicable Prospectus Supplement, without service charge and upon payment of
any taxes and other governmental charges as described in the Indenture. Such
exchange or transfer, as the case may be, will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. Occidental
has initially appointed the Trustee as Security Registrar. If a Prospectus
Supplement refers to any transfer agent (in addition to the Security
Registrar) designated by Occidental with respect to any series of Securities,
Occidental may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent
acts, except that, if Securities of a series are issuable only as Registered
Securities, Occidental will be required to maintain a transfer agent in each
Place of Payment for such series, and, if Securities of a series are issuable
as Bearer Securities, Occidental will be required to maintain a transfer agent
in New York City and in a Place of Payment for such series located outside the
United States. Occidental may at any time designate additional transfer agents
with respect to any series of Securities.
Occidental will not be required to (i) issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending (subject to certain exceptions) at the close of business
on (a) if Securities of the series are issuable only as Registered Securities,
the day of mailing of the relevant notice of redemption and (b) if Securities
of the series are issuable as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if Securities of the
series are also issuable as Registered Securities and there is no publication,
the mailing of the relevant notice of redemption; (ii) register the transfer
of or exchange any Registered Security, or portion thereof, called for
redemption, except the unredeemed portion of any Registered Security being
redeemed in part; or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of that
series and of like tenor and principal amount that is immediately surrendered
for redemption.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest, if any, on Registered Securities will be made at
the office of such Paying Agent or Paying Agents as Occidental may designate
from time to time, except that, at the option of Occidental, payment of any
interest may be made (i) by check mailed to the address of the Person entitled
thereto, as such address shall appear in the Security Register, or (ii) by
wire transfer to an account maintained by the Person entitled thereto, as
specified in the Security Register. Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on a
Registered Security will be made to the Person in whose name such Registered
Security is registered at the close of business on the Regular Record Date for
such interest installment.
Unless otherwise indicated in an applicable Prospectus Supplement, interest
shall be computed on the basis of a 360-day year comprised of twelve 30-day
months.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest, if any, on Bearer Securities will be made,
subject to any applicable laws and regulations, at the offices of such Paying
Agent or Paying Agents outside the United States as Occidental may designate
from time to time, or by check mailed to an address or by transfer to an
account maintained by the payee outside the United States. Unless otherwise
indicated in an applicable Prospectus Supplement, any payment of an
installment of interest on any Bearer Security will be made only against
surrender of the coupon relating to such interest installment.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee, acting through its Corporate Trust Office, will be designated as
Occidental's sole Paying Agent for payments with respect to Securities that
are issuable solely as Registered Securities and as Occidental's Paying Agent
in the Borough of Manhattan, The City of New York, for payments with respect
to Securities (subject to any limitations described in any applicable
Prospectus Supplement) that are issuable as Bearer Securities. Any Paying
Agent outside the United States and any other Paying Agent in the United
States initially designated by Occidental for the Offered
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Securities will be named in an applicable Prospectus Supplement. Occidental
may at any time designate one or more additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through
which any Paying Agent acts, except that, if Securities of a series are
issuable only as Registered Securities, Occidental will be required to
maintain a Paying Agent in each Place of Payment for such series, and, if
Securities of a series are issuable as Bearer Securities, Occidental will be
required to maintain (i) a Paying Agent in the Borough of Manhattan, The City
of New York, for payments with respect to any Registered Securities of the
series (and for payments with respect to Bearer Securities of the series in
the circumstances described in the Indenture, but not otherwise) and (ii) a
Paying Agent in a Place of Payment located outside the United States where
Securities of such series and any related coupons may be presented and
surrendered for payment; provided, however, that if the Securities of such
series are listed on The London Stock Exchange or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and
such stock exchange shall so require, Occidental will maintain a Paying Agent
in London, Luxembourg or any other required city located outside the United
States, as the case may be, for the Securities of such series.
All moneys paid by Occidental to a Paying Agent for the payment of principal
of or interest, if any, on any Security that remain unclaimed at the end of
two years after such principal or interest shall have become due and payable
will be repaid to Occidental, and the Holder of such Security or any coupon
will thereafter look only to Occidental for payment thereof.
GLOBAL SECURITIES
The Securities of a series may be issued in whole or in part in global form.
A Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable Prospectus Supplement. A
global Security may be issued in either registered or bearer form and in
either temporary or definitive form. A Security in global form may not be
transferred, except as a whole by the Depositary for such Security to a
nominee of such Depositary, or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary, or by such Depositary or any
such nominee to a successor of such Depositary or a nominee of such successor.
If any Securities of a series are issuable in global form, the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such global Security may exchange such
interests for definitive Securities of such series and of like tenor and
principal amount in any authorized form and denomination, the manner of
payment of principal of and interest, if any, on any such global Security and
the specific terms of the depositary arrangement with respect to any such
global Security.
CERTAIN COVENANTS OF OCCIDENTAL
Limitation on Liens. Occidental will not, nor will it permit any
Consolidated Subsidiary (as defined below) to, incur, create, assume,
guarantee or otherwise become liable with respect to any Secured Debt (as
defined below), unless the Securities are secured equally and ratably with (or
prior to) such Secured Debt. This covenant will not apply to: (i) Liens (as
defined below) existing on the date of the Indenture; (ii) Liens existing on
property of, or on any shares of stock or Indebtedness of, any corporation at
the time such corporation becomes a Consolidated Subsidiary; (iii) Liens in
favor of Occidental or a Consolidated Subsidiary; (iv) Liens in favor of
governmental bodies to secure progress, advance or other payments; (v) Liens
existing on property, shares of stock or Indebtedness at the time of
acquisition thereof (including acquisition through merger or consolidation) or
Liens to secure the payment of all or any part of the purchase price thereof
or the cost of construction, installation, renovation, improvement or
development thereon or thereof or to secure any Indebtedness incurred prior
to, at the time of, or within 360 days after the later of the acquisition,
completion of such construction, installation, renovation, improvement or
development or the commencement of full operation of such property or within
360 days after the acquisition of such shares or Indebtedness for the purpose
of financing all or any part of the purchase price or cost thereof; and (vi)
any extension, renewal or refunding of any Liens referred to in the foregoing
clauses (i) through (v). Notwithstanding the foregoing, Occidental and one or
more Consolidated Subsidiaries may incur, create, assume, guarantee or
otherwise become liable with respect to Secured Debt that would otherwise be
subject to the foregoing restrictions if, after giving effect thereto, the
aggregate amount of
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all Secured Debt, together with all Discounted Rental Value (as defined below)
in respect of sale and leaseback transactions subject to the restrictions
discussed in the following paragraph (excluding sale and leaseback
transactions exempted from such restrictions pursuant to clause (i) or (ii) of
the last sentence of such paragraph), would not exceed 10% of consolidated Net
Tangible Assets (as defined below) of Occidental and its consolidated
subsidiaries.
Limitation on Sale and Leaseback Transactions. Occidental will not nor will
it permit any Consolidated Subsidiary to sell and lease back any Principal
Domestic Property (as defined below) unless: (i) the transaction is one in
which the sale has occurred within 360 days after the later of the
acquisition, completion of construction or commencement of full operations of
the Principal Domestic Property; (ii) Occidental or such Consolidated
Subsidiary could subject such Principal Domestic Property to a Lien pursuant
to the provisions described above under "Limitation on Liens" in an amount
equal to the Discounted Rental Value with respect to the sale and leaseback
transaction without equally and ratably securing the Securities; or (iii)
Occidental or such Consolidated Subsidiary, within 120 days after such sale,
applies or causes to be applied to the retirement of its Funded Debt (as
defined below) an amount (subject to credits for certain voluntary retirements
of Funded Debt) not less than the greater of (a) the net proceeds of the sale
of the Principal Domestic Property leased pursuant to such arrangement or (b)
the fair value (as determined in any manner approved by the Board of Directors
of Occidental) of the Principal Domestic Property so leased. This restriction
will not apply to any sale and leaseback transaction (i) between Occidental
and a Consolidated Subsidiary or between Consolidated Subsidiaries or (ii)
involving the taking back of a lease for a period, including renewals, of not
more than three years.
Other than the limitations in the Indenture on Liens and sale and leaseback
transactions described above, the provisions of the Indenture do not afford
Holders of the Debt Securities protection in the event of a highly leveraged
transaction, reorganization, restructuring, change in control, merger or
similar transaction involving Occidental that may adversely affect Holders of
the Debt Securities.
CERTAIN DEFINITIONS
"Consolidated Subsidiary" means any Subsidiary included in the financial
statements of Occidental and its Subsidiaries prepared on a consolidated basis
in accordance with generally accepted accounting principles.
"Discounted Rental Value" means, as to any particular lease under which any
Person is at the time liable and at any date as of which the amount thereof is
to be determined, the total net amount of rent (after deducting the amount of
rent to be received by such Person under noncancelable subleases) required to
be paid by such Person under such lease during the remaining noncancelable
term thereof (including any such period for which such lease has been extended
or may, at the option of the lessor, be extended), discounted from the
respective due dates thereof to such date at a rate per annum of 11 3/4%. The
net amount of rent required to be paid under any such lease for any such
period shall be the aggregate amount of the rent payable by the lessee with
respect to such period, after excluding amounts required to be paid on account
of maintenance and repairs, insurance, taxes, water rates and similar charges.
In the case of any lease which is terminable by the lessee upon the payment of
a penalty, such net amount shall also include the amount of such penalty, but
no rent shall be considered as required to be paid under such lease subsequent
to the first date upon which it may be so terminated. If and to the extent the
amount of any rent during any future period is not definitely determinable
under the lease in question, the amount of such rent shall be estimated in
such reasonable manner as the Board of Directors of Occidental may in good
faith determine.
"Funded Debt" means all Indebtedness maturing one year or more from the date
of the creation thereof, all Indebtedness directly or indirectly renewable or
extendible, at the option of the debtor, by its terms or by the terms of any
instrument or agreement relating thereto, to a date one year or more from the
date of the creation thereof, and all Indebtedness under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of one year or more, even though such Indebtedness may also conform to
the definition of Short-Term Borrowing.
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"Lien" means and includes any mortgage, pledge, lien, security interest,
conditional sale or other title retention agreement or other similar
encumbrance to secure Indebtedness for borrowed money but excluding any
security interest which a lessor may be deemed to have under a lease and any
lien which may be deemed to exist under a Production Payment or under any
subordination arrangement. "Production Payment" means any economic interest in
oil, gas or mineral reserves which (i) entitles the holder thereof to a
specified share of future production from such reserves, free of the costs and
expenses of such production and (ii) terminates when a specified quantity of
such share of future production from such reserves has been delivered or a
specified sum has been realized from the sale of such share of future
production from such reserves.
"Net Tangible Assets" of any specified Person means the total of all assets
properly appearing on a balance sheet of such Person prepared in accordance
with generally accepted accounting principles, after deducting from such
total, without duplication of deductions, (i) all Current Liabilities of such
Person; (ii) that portion of the book amount of all such assets which would be
treated as intangibles under generally accepted accounting principles,
including, without limitation, all such items as goodwill, trademarks, trade
names, brands, copyrights, patents, licenses and rights with respect to the
foregoing and unamortized debt discount and expense; and (iii) the amount, if
any, at which any stock of such Person appears on the asset side of such
balance sheet.
"Principal Domestic Property" means any (i) developed oil or gas producing
property or (ii) processing or manufacturing plant, in each case which as of
the date of the Indenture is or thereafter is owned or leased by Occidental or
any Consolidated Subsidiary and which is located in the continental United
States (provided, however, that any such property or plant declared by the
Board of Directors by Board Resolution not to be of material importance to the
business of Occidental and its Consolidated Subsidiaries taken as a whole will
be excluded from the foregoing definition).
"Secured Debt" means any Indebtedness of Occidental or any Consolidated
Subsidiary, secured by a Lien on any Principal Domestic Property or on any
shares of stock or on any Indebtedness of any Consolidated Subsidiary which
owns any Principal Domestic Property.
MERGER AND CONSOLIDATION
Occidental may consolidate with or merge into any other corporation, and
Occidental may convey, transfer or lease its properties and assets
substantially as an entirety to any Person, provided that: (i) the corporation
formed by such consolidation or into which Occidental is merged, or the Person
that acquires by conveyance or transfer or which leases the properties and
assets of Occidental substantially as an entirety, shall be organized and
existing under the laws of the United States, any State thereof or the
District of Columbia and shall expressly assume the payment of the principal
of and interest on the Securities and the performance of every covenant of the
Indenture and the Securities on the part of Occidental to be performed or
observed; and (ii) immediately after giving effect to such transaction, no
Event of Default (as described below), and no event which, after notice or
lapse of time, or both, would become an Event of Default, shall have happened
and be continuing.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to each
series of Securities individually: (i) default in the payment of any
installment of interest on any Security of such series when due, continued for
30 days; or (ii) default in the payment of the principal of any Security of
such series when due; or (iii) default in the performance, or breach, of any
other covenant or warranty of Occidental in the Indenture (other than a
covenant or warranty that is solely for the benefit of other series of the
Securities), continued for 60 days after written notice by the Trustee or the
Holders of at least 25% in principal amount of the Outstanding Securities of
such series; or (iv) acceleration of any indebtedness for money borrowed by
Occidental under the terms of the instrument under which such indebtedness is
or may be outstanding, if such indebtedness is not discharged or such
acceleration is not annulled or rescinded within 20 days after written notice
by the Trustee or the Holders of at least 25% in principal amount of the
Outstanding Securities of such series (provided, that no Event of Default
under this clause (iv) shall be deemed to exist as a result of an acceleration
of any such
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<PAGE>
indebtedness if the principal of and interest on such indebtedness, when added
to the principal of and interest on all other such indebtedness which has been
accelerated as aforesaid (excluding any such indebtedness which has been
discharged or as to which the acceleration has been duly rescinded or
annulled), shall not exceed $50,000,000); or (v) certain events of bankruptcy,
insolvency or reorganization of Occidental; or (vi) any other event designated
in the relevant Prospectus Supplement as an "Event of Default" with respect to
the Securities of such series. If an Event of Default with respect to the
Securities of any series occurs and is continuing, the Trustee or Holders of
not less than 25% in principal amount of the Outstanding Securities of such
series may declare the principal amount (or, if any of the Securities of such
series are Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) of all of the Securities
of such series to be due and payable immediately. Under certain circumstances,
the Holders of a majority in principal amount of the Outstanding Securities of
such series may rescind such a declaration.
The Holders of a majority in principal amount of the Outstanding Securities
of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that, among other things, such direction is not in conflict with any
rule of law or the Indenture. In case an Event of Default occurs (and is not
cured), the Trustee is required to exercise such of its rights and powers
under the Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs. Subject to such provisions, the Trustee is
under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders of the Securities
of any series, unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might
be incurred by it in compliance with any such request or direction.
MODIFICATION AND WAIVER
Occidental and the Trustee may execute a supplemental indenture, without the
consent of the Holders of the Securities or any related coupons: (i) to add to
the covenants, agreements and obligations of Occidental for the benefit of the
Holders of all the Securities of any series or to surrender any right or power
conferred in the Indenture upon Occidental; (ii) to evidence the succession of
another person to Occidental and the assumption by it of the covenants of
Occidental in the Indenture and the Securities; (iii) to provide that Bearer
Securities may be registrable as to principal, to change or eliminate any
restrictions on the payment of principal of or interest, if any, on Bearer
Securities, to permit Bearer Securities to be issued in exchange for
Registered Securities, to permit Bearer Securities to be issued in exchange
for Bearer Securities of other authorized denominations or to permit the
issuance of Securities in uncertificated form, provided that any such action
shall not adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect; (iv) to establish the
form or terms of Securities of any series and any related coupons as permitted
by Sections 201 and 301 of the Indenture; (v) to provide for the acceptance of
appointment under the Indenture of a successor Trustee with respect to the
Securities of one or more series and to add to or change any provisions of the
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts by more than one Trustee; (vi) to cure any
ambiguity or correct any inconsistency in the Indenture or make other changes,
provided that no such action shall adversely affect the interests of the
Holders of the Securities; (vii) to add to, change or eliminate any provisions
(which addition, change or elimination may apply to one or more series of
Securities), provided that any such addition, change or elimination neither
(a) applies to any Security of any series created prior to the execution of
such supplemental indenture that is entitled to the benefit of such provision
nor (b) modifies the rights of the Holder of any such Security with respect to
such provision; or (viii) to secure the Securities.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of the series affected by such
supplemental indenture, Occidental and the Trustee also may execute a
supplemental indenture to add provisions to, or change in any manner or
eliminate any provisions of, the Indenture with respect to such series of
Securities or modify in any manner the rights of the holders of the Securities
of such series and any related coupons under the Indenture, provided that no
such supplemental indenture will, without the consent of the Holder of each
Outstanding Security affected thereby: (i) change the
10
<PAGE>
stated maturity of the principal of, or any installment of principal or
interest on, any such Security, or reduce the amount of principal of any such
Discount Security that would be due and payable upon declaration of
acceleration of maturity thereof; (ii) reduce the principal amount of, or the
rate of interest on, or any premium payable on, any such Security; (iii)
change the place or currency of payment of principal or interest, if any, on
any such Security; (iv) impair the right to institute suit for the enforcement
of any payment on or with respect to any such Security; (v) reduce the above-
stated percentage of Holders of Securities of any series necessary to modify
or amend the Indenture; or (vi) modify the foregoing requirements or reduce
the percentage in principal amount of Outstanding Securities of any series
necessary to waive any covenant or past default. Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may
waive certain past defaults and may waive compliance by Occidental with
certain of the restrictive covenants in the Indenture (including the
restrictive covenants described above under "Certain Covenants of Occidental")
with respect to the Securities of such series.
DISCHARGE
Unless otherwise indicated in an applicable Prospectus Supplement,
Occidental may terminate at any time its obligations under the Indenture with
respect to the Securities of any series by (i)(a) delivering all Outstanding
Securities of such series to the Trustee for cancellation or (b) depositing
with the Trustee funds or non-callable United States government obligations
sufficient to pay all remaining principal and interest on the Securities of
such series and (ii) complying with certain other provisions of the Indenture.
If Occidental exercises its right to satisfy and discharge its obligations
under the Indenture with respect to any series of the Debt Securities prior to
its maturity by depositing funds or non-callable United States government
obligations in trust for holders of outstanding Debt Securities of that
series, such satisfaction and discharge ("discharge"), under present law, is
likely to be treated as a redemption of the Debt Securities of that series
prior to maturity in exchange for the property deposited in trust. In such
event, each holder would generally recognize, at the time of discharge, gain
or loss measured by the difference between (i) the sum of (a) the amount of
any cash and (b) the fair market value of any property deposited in trust
deemed received by the holder (except to the extent attributable to accrued
interest) and (ii) the holder's tax basis in the Debt Securities deemed
surrendered. Thereafter, each holder would be treated as if it held an
undivided interest in the cash (or investments made therewith) and the
property held in trust. Each holder would generally be subject to tax
liability in respect of interest income and original issue discount, if
applicable, thereon and would recognize any gain or loss upon any disposition,
including redemption, of the assets held in trust. Although tax might be owed,
the holder of a discharged Debt Security would not receive cash (except for
current payments of interest on such Debt Security) until the maturity or
earlier redemption of such Debt Security. Such tax treatment could affect the
purchase price that a holder would receive upon the sale of the Debt
Securities.
REPORTS
Occidental is required to furnish to the Trustee annually (i) a statement as
to the fulfillment by Occidental of all of its covenants under the Indenture
and (ii) within 20 days after the occurrence thereof, notice of each
acceleration which, with the giving of notice and the lapse of time, would be
an Event of Default, as described above in clause (iv) under "Events of
Default."
THE TRUSTEE
The Trustee is a New York banking corporation. The Trustee is a
participating lender under a revolving credit agreement of Occidental and
provides commercial banking services to Occidental and certain of its
subsidiaries. The Indenture contains certain limitations on the rights of the
Trustee, as a creditor of Occidental, to obtain payment of claims in certain
cases or to realize on certain property received in respect of any such claim
as security or otherwise. The Trustee will be permitted to engage in other
transactions with Occidental and its subsidiaries; provided, however, that if
the Trustee acquires any conflicting interest at such time as a default is
pending under the Indenture, it must (with certain exceptions) eliminate such
conflict or resign.
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PLAN OF DISTRIBUTION
Occidental may sell Debt Securities to one or more underwriters for public
offering and sale by them or may sell Debt Securities to investors directly or
through agents or dealers. Any such underwriter, agent or dealer involved in
the offer and sale of the Debt Securities will be named in the applicable
Prospectus Supplement. Occidental may also sell Offered Securities to an agent
as principal.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Occidental also may, from time to time, authorize
underwriters acting as its agents to offer and sell the Offered Securities
upon the terms and conditions set forth in any Prospectus Supplement. In
connection with the sale of Offered Securities, underwriters may be deemed to
have received compensation from Occidental in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
Offered Securities for whom they may act as agent. Underwriters may sell
Offered Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions (which may be changed from time to time) from
the purchasers for whom they may act as agent.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, Occidental will sell such Offered
Securities to such dealer, as principal. The dealer may then resell such
Offered Securities to the public at varying prices to be determined by such
dealer at the time of resale.
Any underwriting compensation paid by Occidental to underwriters or agents
in connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters,
dealers and agents participating in the distribution of the Offered Securities
may be deemed to be underwriters under the Securities Act, and any discounts
and commissions received by them and any profit realized by them on resale of
the Offered Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters, dealers and agents may be
entitled under agreements with Occidental to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act, and to reimbursement by Occidental for certain expenses.
If so indicated in an applicable Prospectus Supplement, Occidental will
authorize dealers acting as its agents to solicit offers by certain
institutions to purchase Offered Securities from Occidental at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the
date or dates stated in such Prospectus Supplement. Each Contract will be for
an amount not less than, and the aggregate principal amount or offering price
of Offered Securities sold pursuant to Contracts shall not be less nor more
than, the respective amounts stated in such Prospectus Supplement.
Institutions with whom Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions, but
will in all cases be subject to the approval of Occidental.
Offered Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for Occidental. Any remarketing firm will
be identified and the terms of its agreement, if any, with Occidental and its
compensation will be described in the Prospectus Supplement. Remarketing firms
may be deemed to be underwriters in connection with the Offered Securities
remarketed thereby. Remarketing firms may be entitled under agreements which
may be entered into with Occidental to indemnification by Occidental against
certain liabilities, including liabilities under the Securities Act.
The Debt Securities may or may not be listed on a national securities
exchange or a foreign securities exchange. No assurances can be given that
there will be a market for any of the Debt Securities.
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LEGAL MATTERS
Certain legal matters with respect to the legality of the Debt Securities
being offered hereby will be passed upon for Occidental by Robert E. Sawyer,
Esq., Associate General Counsel of Occidental, and by Skadden, Arps, Slate,
Meagher & Flom LLP, Los Angeles, California. Mr. Sawyer beneficially owns, and
has rights to acquire under employee stock options, an aggregate of less than
1% of the outstanding common stock of Occidental.
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY OCCIDENTAL OR THE UNDERWRITER.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF OCCIDENTAL SINCE
THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Occidental Petroleum Corporation........................................... S-2
Recent Developments........................................................ S-2
Use of Proceeds............................................................ S-3
Capitalization............................................................. S-3
Description of the Notes................................................... S-4
Certain United States Federal Tax Considerations........................... S-13
Plan of Distribution....................................................... S-14
Legal Matters.............................................................. S-15
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Occidental Petroleum Corporation .......................................... 3
Use of Proceeds............................................................ 3
Ratios of Earnings to Fixed Charges........................................ 3
Description of the Debt Securities......................................... 3
Plan of Distribution....................................................... 12
Legal Matters.............................................................. 13
</TABLE>
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$270,000,000
[LOGO OF OCCIDENTAL PETROLEUM CORPORATION]
OCCIDENTAL
PETROLEUM CORPORATION
EXTENDIBLE NOTES DUE
OCTOBER 3, 2008
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
SEPTEMBER 25, 1998
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