<PAGE> 1
As filed pursuant to Rule 424(b)(3)
under the Securities Act of 1933
Registration No. 333-79541
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 30, 1999)
$1,000,000,000
[OXY LOGO]
OCCIDENTAL PETROLEUM CORPORATION
MEDIUM-TERM SENIOR NOTES, SERIES C
MEDIUM-TERM SUBORDINATED NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
-------------------------
- - We will offer notes from time to time and specify the terms and conditions of
each issue of notes in a pricing supplement.
- - The notes will be senior or subordinated unsecured debt securities of
Occidental.
- - The notes will have stated maturities of nine months or more from the date
they are originally issued.
- - We will pay amounts due on the notes in U.S. dollars or any other
consideration described in the applicable pricing supplement.
- - The notes will be issued in minimum denominations of $1,000, increased in
multiples of $1,000, or other denominations specified in the applicable
pricing supplement.
- - The notes may bear interest at fixed or floating rates or may not bear any
interest. If the notes bear interest at a floating rate, the floating rate may
be based on one or more indices or formulas plus or minus a fixed amount or
multiplied by a factor.
- - We will specify whether the notes can be redeemed or repaid before their
maturity and whether they are subject to mandatory redemption, redemption at
our option or repayment at the option of the holder of the notes.
INVESTING IN THE NOTES INVOLVES CERTAIN RISKS.
SEE "RISK FACTORS" ON PAGE S-4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement, the accompanying prospectus or any pricing supplement is
truthful or complete. Any representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
AGENTS' DISCOUNTS PROCEEDS, BEFORE EXPENSES,
PUBLIC OFFERING PRICE AND COMMISSIONS TO OCCIDENTAL
--------------------- ---------------------- ----------------------------
<S> <C> <C> <C>
Per note............. 100% 0.125%--0.750% 99.875%--99.25%
Total (1)............ 1$,000,000,000 $1,250,000--$7,500,000 $992,500,000--$998,750,000
</TABLE>
- -------------------------
(1) Or the equivalent in one or more foreign currencies.
We may sell notes to the agents referred to below as principal for resale at
varying or fixed offering prices or through the agents as agents using their
reasonable best efforts on our behalf. We may also sell notes without the
assistance of the agents, whether acting as principal or as agent.
If we sell other securities referred to in the accompanying prospectus, the
amount of notes that we may offer and sell under this prospectus supplement will
be reduced appropriately.
-------------------------
CHASE SECURITIES
CREDIT SUISSE FIRST BOSTON
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
-------------------------
The date of this prospectus supplement is June 30, 1999.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
About This Prospectus Supplement; Pricing Supplements....... S-3
Risk Factors................................................ S-4
Description of the Notes.................................... S-7
Certain United States Federal Tax Considerations............ S-37
Plan of Distribution........................................ S-44
</TABLE>
PAGE
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PROSPECTUS
Forward-Looking Statements.................................. 2
About This Prospectus....................................... 3
Where You Can Find More Information......................... 4
Occidental.................................................. 5
The Trusts.................................................. 5
Use of Proceeds............................................. 6
Ratios of Earnings to Fixed Charges and Earnings to Combined
Fixed Charges and Preferred Stock Dividends............... 6
Description of Securities................................... 6
Description of Senior Debt Securities....................... 7
Description of Subordinated Debt Securities................. 16
Description of Preferred Stock.............................. 24
Description of Depositary Shares............................ 26
Description of Preferred Securities......................... 29
Description of Preferred Securities Guarantees.............. 35
Relationship Among Preferred Securities, Preferred
Securities Guarantees and Subordinated Debt Securities
Held by Each Trust........................................ 37
Plan of Distribution........................................ 38
Legal Opinions.............................................. 39
Experts..................................................... 39
References in this prospectus supplement to "Occidental", "we", "us" and
"our" are to Occidental Petroleum Corporation and not to any of our subsidiaries
or any agents.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying prospectus and any
pricing supplement. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. The
information contained or incorporated by reference in this prospectus
supplement, the accompanying prospectus and any pricing supplement is accurate
only as of the date of this prospectus supplement, the date of the accompanying
prospectus and the date of the applicable pricing supplement. Our business,
financial condition, results of operations and prospects may have changed since
those dates.
S-2
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ABOUT THIS PROSPECTUS SUPPLEMENT;
PRICING SUPPLEMENTS
We may use this prospectus supplement, together with the attached
prospectus and a pricing supplement, to offer from time to time our Medium-Term
Senior Notes, Series C or our Medium-Term Subordinated Notes, Series A. The
total initial public offering price of notes that may be offered by this
prospectus supplement is $1,000,000,000 (or the equivalent in foreign
currencies). If we or Oxy Capital Trust II or Oxy Capital Trust III sell other
securities referred to in the accompanying prospectus, that amount will be
reduced appropriately.
This prospectus supplement sets forth certain terms of the notes that we
may offer. It supplements the description of the senior debt securities and
subordinated debt securities contained in the attached prospectus. If
information in this prospectus supplement is inconsistent with the prospectus,
this prospectus supplement will apply and will supersede the information in the
prospectus.
Each time we issue notes we will deliver a pricing supplement with this
prospectus supplement. The pricing supplement will contain the specific
description of the notes being offered and the terms of the offering. The
pricing supplement may also add, update or change information in this prospectus
supplement and the attached prospectus. Any information in the pricing
supplement, including any changes in the method of calculating interest on any
note, that is inconsistent with this prospectus supplement or the accompanying
prospectus will apply and will supersede the information in this prospectus
supplement or in the accompanying prospectus.
It is important for you to read and consider all information contained in
this prospectus supplement, the attached prospectus and the applicable pricing
supplement in making your investment decision. You should also read and consider
the information in the documents we have referred you to in "Where You Can Find
More Information" on page 4 of the attached prospectus.
S-3
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RISK FACTORS
Your investment in the notes involves certain risks. In consultation with
your financial and legal advisers, you should carefully consider, among other
matters, the following discussion of risks before deciding whether an investment
in the notes is suitable for you. The notes are not an appropriate investment
for you if you are unsophisticated with respect to the significant components of
the notes or financial matters generally.
PRINCIPAL AND INTEREST PAYMENTS ON NOTES INDEXED TO INTEREST RATE, CURRENCY OR
OTHER INDICES OR FORMULAS MAY VARY SUBSTANTIALLY
If you invest in notes indexed to one or more interest rate, currency or
other indices or formulas, there will be significant risks not associated with a
conventional fixed rate or floating rate debt security. These risks include, but
are not limited to, the possibility of:
- significant changes in the prices of the assets underlying the index, and
- significant changes in economic or other measures making up the relevant
index.
These changes would result in fluctuation of the indices or formulas and a
possibility that you will receive a lower or no amount of principal, premium or
interest and at different times than you expected. We have no control over a
number of matters, including economic, financial and political events, that are
important in determining the existence, magnitude and longevity of these risks
and their results. In addition, if an index or formula used to determine any
amounts payable in respect of the notes contains a multiplier or leverage
factor, the effect of any change in that index or formula will be magnified
accordingly. In recent years, values of certain indices and formulas have been
volatile and volatility in those and other indices and formulas may be expected
in the future. In considering whether to purchase indexed notes, you should be
aware that the calculation of amounts payable on indexed notes may involve
reference to prices that are published solely by third parties or entities which
are not regulated by the laws of the United States. The risk of loss from
linking principal or interest on indexed notes to an index may be substantial.
You should consult your financial and legal advisers as to the risks of an
investment in indexed notes.
An investment in an indexed note, on which all or a part of any payment due
is based on a currency other than U.S. dollars, has significant risks that are
not associated with a similar investment in non-indexed notes. These risks
include, but are not limited to, the possibility of:
- significant market changes in rates of exchange between U.S. dollars and
the specified currency,
- significant changes in rates of exchange between U.S. dollars and the
specified currency resulting from official redenomination relating to the
specified currency, and
- the imposition or modification of foreign exchange controls by either the
United States or foreign governments.
In addition, depreciation of the specified currency against U.S. dollars would
result in a decrease in the effective yield of a foreign currency note indexed
to the specified currency below its coupon rate and may result in a substantial
loss to you on a U.S. dollar basis.
S-4
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THE UNAVAILABILITY OF CURRENCIES MAY RESULT IN A SUBSTANTIAL LOSS TO YOU AS A
RESULT OF CURRENCY FLUCTUATIONS
Except as set forth below or in the applicable pricing supplement, if
payment on a note is required to be made in a specified currency other than U.S.
dollars and that currency is:
- unavailable due to the imposition of exchange controls or other
circumstances beyond Occidental's control,
- no longer used by the government of the country issuing that currency, or
- no longer used for the settlement of transactions by public institutions
of the international banking community,
then all payments on that note shall be made in U.S. dollars until that currency
is again available or so used. The amounts so payable on any date in that
currency shall be converted in U.S. dollars on the basis of the most recently
available market exchange rate for that currency or as otherwise indicated in
the applicable pricing supplement. Exchange rates can vary substantially from
time to time. Any payment on that note made under those circumstances in U.S.
dollars will not constitute an event of default under the indenture under which
that note was issued.
The notes will not provide for any adjustment to any amount payable by
Occidental under those notes as a result of a change in the value of the
specified currency of those notes relative to any other currency due solely to
fluctuations in exchange rates or any redenomination of any component currency.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into foreign currencies, and vice versa. In addition, banks do
not generally offer non-U.S. dollar-denominated checking or savings account
facilities in the United States. Accordingly, payments on notes made in a
currency other than U.S. dollars will be made from an account at a bank located
outside the United States, unless otherwise specified in the applicable pricing
supplement.
JUDGMENTS IN A FOREIGN CURRENCY MAY RESULT IN A SUBSTANTIAL LOSS TO YOU
The notes will be governed by, and construed in accordance with, the laws
of the State of New York. Courts in the United States customarily have not
rendered judgments for money damages denominated in any currency other than the
U.S. dollar. A 1987 amendment to the Judiciary Law of the State of New York
provides, however, that an action based upon an obligation denominated in a
currency other than U.S. dollars will be rendered in the foreign currency of the
underlying obligation. Any judgment awarded in that type of action will be
converted into U.S. dollars at the rate of exchange prevailing on the date of
the entry of the judgment or decree. Exchange rates can vary substantially from
time to time.
REDEMPTION MAY ADVERSELY AFFECT YOUR RETURN ON YOUR INVESTMENT
If your notes are redeemable at our option or are otherwise subject to
mandatory redemption, we may choose to redeem your notes for any reason,
including at times when prevailing interest rates are relatively low.
Accordingly, in that event you generally would
S-5
<PAGE> 6
not be able to reinvest the redemption proceeds in a comparable security at an
effective interest rate as high as that of the notes.
THERE MAY BE AN UNCERTAIN TRADING MARKET FOR YOUR NOTES; MANY FACTORS AFFECT THE
TRADING VALUE OF YOUR NOTES
We cannot assure you that a trading market for your notes will ever develop
or be maintained. Many factors independent of our creditworthiness may affect
the trading value of your notes. These factors include:
- the complexity and volatility of the index or formula applicable to the
notes,
- the method of calculating the principal, premium and interest in respect
of the notes,
- the time remaining to the maturity of the notes,
- the outstanding amount of the notes,
- the redemption features of the notes,
- the amount of other securities linked to the index or formula applicable
to the notes, and
- the level, direction and volatility of market interest rates generally.
In addition, because some notes may be designed for specific investment
objectives or strategies, these notes will have a more limited trading market
and experience more price volatility. There may be a limited number of buyers
for these notes. This may affect the price you receive for these notes or your
ability to sell these notes at all. You should not purchase notes unless you
understand and know you can bear the related investment risks.
OUR CREDIT RATINGS DO NOT REFLECT ALL RISKS OF AN INVESTMENT IN THE NOTES
Our credit ratings are an assessment of our ability to pay our obligations.
Consequently, real or anticipated changes in our credit ratings will generally
affect the market value of your notes. Our credit ratings, however, do not
reflect the potential impact of risks related to structure, market or other
factors discussed above on the value of your notes.
S-6
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DESCRIPTION OF THE NOTES
We may issue the notes as a series of senior debt securities (the "senior
notes") under the Indenture, dated as of April 1, 1998, between Occidental and
The Bank of New York, as trustee (the "senior indenture") or as a series of
subordinated debt securities (the "subordinated notes" and together with the
senior notes, the "notes") under the Indenture, dated as of January 20, 1999,
between Occidental and The Bank of New York, as trustee (the "subordinated
indenture" and together with the senior indenture, the "indentures").
The following summary of certain terms of the notes and of each of the
indentures is not complete and is qualified in its entirety by reference to the
indentures. Copies of the indentures are incorporated by reference to certain of
our filings with the SEC as exhibits to the registration statement of which this
prospectus supplement and the accompanying prospectus are a part. The summary
supplements, and, to the extent it is inconsistent, replaces the description of
the senior debt securities, the subordinated debt securities and the indentures
in the accompanying prospectus. The senior notes are referred to as "senior debt
securities" in the accompanying prospectus and the senior indenture is referred
to as the "Senior Indenture". The subordinated notes are referred to as
subordinated debt securities in the accompanying prospectus and the subordinated
indenture is referred to as the "Subordinated Indenture".
THE FOLLOWING DESCRIPTION OF NOTES WILL APPLY UNLESS OTHERWISE SPECIFIED IN
AN APPLICABLE PRICING SUPPLEMENT.
TERMS OF THE NOTES
The senior notes will be unsecured general obligations of Occidental and
will rank equally with all other unsecured and unsubordinated indebtedness of
Occidental from time to time outstanding. The subordinated notes will be
unsecured general obligations of Occidental and will be subordinate and junior
to all of Occidental's Senior Indebtedness (as defined in the subordinated
indenture) and certain of Occidental's other indebtedness to the extent
described in a pricing supplement. Substantially all of our operations are
conducted through subsidiaries. As a result, our right to receive assets upon
the liquidation or recapitalization of any of our subsidiaries (and your
consequent right to participate in those assets) is subject to the claims of
that subsidiary's creditors. Even if we are recognized as a creditor of one or
more of our subsidiaries, our claims would still be subject to any security
interests in the assets of that subsidiary and to any indebtedness or other
liabilities of that subsidiary senior to our claims. Accordingly, both the
senior notes and subordinated notes are effectively subordinated to all
indebtedness and other liabilities, including trade payables, of our
subsidiaries. As of May 31, 1999, the total amount of that indebtedness and
other liabilities of our subsidiaries that would have been effectively senior to
the notes was approximately $2.8 billion (excluding interest).
Occidental may, from time to time, without the consent of the holders of
any series of the notes, provide for the issuance of notes, other senior debt
securities or other subordinated debt securities under the indentures in
addition to the $1,000,000,000 aggregate principal amount of notes offered by
this prospectus supplement. The indentures do not limit the amount of notes or
other debt securities that may be issued thereunder. The aggregate principal
amount of notes which may be offered and sold by this prospectus supplement will
be reduced if Occidental or either of the trusts sell other securities under the
registration statement of which this prospectus supplement and the accompanying
prospectus are a part.
S-7
<PAGE> 8
The notes will be offered on a continuing basis and will mature on a day
nine months or more from the date of issue, as selected by the purchaser and
agreed to by Occidental. Interest-bearing notes will bear interest at either
fixed or floating rates as specified in the applicable pricing supplement. Notes
may be issued at significant discounts from their principal amount payable at
stated maturity, or on any date before the stated maturity date on which the
principal or an installment of principal of a note becomes due and payable,
whether by the declaration of acceleration, call for redemption at the option of
Occidental, repayment at the option of the holder or otherwise (the stated
maturity date or any prior date, as the case may be, is referred to as a
"Maturity"). Some notes may not bear interest.
Unless otherwise indicated in a note and in the applicable pricing
supplement, the notes will be denominated in United States dollars and
Occidental will make payments of principal of, and premium, if any, and interest
on, the notes in United States dollars.
Interest rates, interest rate formulae and other variable terms of the
notes are subject to change by Occidental from time to time, but no change will
affect any note already issued or as to which Occidental has accepted an offer
to purchase.
We will issue each note in fully registered book-entry form or certificated
form, in denominations of $1,000 and integral multiples of $1,000, unless
otherwise specified in the applicable pricing supplement. Notes in book-entry
form may be transferred or exchanged only through a participating member of The
Depository Trust Company, also known as DTC, or any other depositary as is
identified in an applicable pricing supplement. See "-- Book-Entry Notes".
Registration of transfer of notes in certificated form will be made at the
corporate trust office of the trustee. There will be no service charge for any
registration of transfer or exchange of notes, but Occidental may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection with any transfer or exchange, other than exchanges
pursuant to the indentures not involving any transfer.
Occidental will make payments of principal of, and premium and interest, if
any, on notes in book-entry form through the trustee to the depositary or its
nominee. See "-- Book-Entry Notes". Unless otherwise specified in the applicable
pricing supplement, a beneficial owner of notes in book-entry form that are
denominated in a currency other than United States dollars (a "Specified
Currency") electing to receive payments of principal or any premium or interest
in that Specified Currency must notify the participant of DTC through which its
interest is held on or before the applicable regular record date, in the case of
a payment of interest, and on or before the sixteenth day, whether or not a
Business Day, as defined below, before its stated maturity, in the case of
principal or premium, of the beneficial owner's election to receive all or a
portion of any payment in a Specified Currency. The participant must notify the
depositary of any election on or before the third Business Day after the regular
record date. The depositary will notify the paying agent of the election on or
before the fifth Business Day after the regular record date. If complete
instructions are received by the participant and forwarded to the depositary,
and forwarded by the depositary to the paying agent, on or before the relevant
dates, the beneficial owner of the notes in book-entry form will receive
payments in the Specified Currency.
In the case of notes in certificated form, Occidental will make payment of
principal or premium, if any, at the Maturity of each note in immediately
available funds upon presentation of the note and, in the case of any repayment
on an optional repayment date,
S-8
<PAGE> 9
upon submission of a duly completed election form if and as required by the
provisions described below, at the corporate trust office of the trustee in the
Borough of Manhattan, The City of New York, or at any other place as Occidental
may designate. Payment of interest due at Maturity will be made to the person to
whom payment of the principal of the note in certificated form will be made.
Payment of interest due on notes in certificated form other than at Maturity
will be made at the corporate trust office of the trustee or, at the option of
Occidental, may be made by check mailed to the address of the person entitled to
receive payment as the address shall appear in the security register.
Notwithstanding the immediately preceding sentence, a holder of $1,000,000 or
more in aggregate principal amount of notes in certificated form, whether having
identical or different terms and provisions, having the same interest payment
dates will, at the option of Occidental, be entitled to receive interest
payments, other than at Maturity, by wire transfer of immediately available
funds if appropriate wire transfer instructions have been received in writing by
the trustee not less than 15 days prior to the applicable interest payment date.
Any wire instructions received by the trustee shall remain in effect until
revoked by the holder.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York;
provided, however, that, with respect to foreign currency notes, the day is also
not a day on which commercial banks are authorized or required by law,
regulation or executive order to close in the Principal Financial Center (as
defined below) of the country issuing the Specified Currency or, if the
Specified Currency is Euro, the day is also a day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open;
provided, further, that, with respect to notes as to which LIBOR is an
applicable Interest Rate Basis, the day is also a London Business Day. "London
Business Day" means a day on which commercial banks are open for business,
including dealings in the LIBOR Currency (as defined below) in London.
"Principal Financial Center" means, unless otherwise specified in the
applicable pricing supplement,
(1) the capital city of the country issuing the Specified Currency, except
that with respect to United States dollars, Australian dollars,
Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, South
African rand and Swiss francs, the "Principal Financial Center" will be
The City of New York, Sydney and Melbourne, Toronto, Frankfurt,
Amsterdam, Milan, Johannesburg and Zurich, respectively, or
(2) the capital city of the country to which the LIBOR Currency relates,
except that with respect to United States dollars, Australian dollars,
Canadian dollars, Deutsche marks, Dutch guilders, Italian lire,
Portuguese escudos, South African rand and Swiss francs, the "Principal
Financial Center" will be The City of New York, Sydney, Toronto,
Frankfurt, Amsterdam, Milan, London, Johannesburg and Zurich,
respectively.
DIFFERING TERMS
Occidental may offer notes with differing interest rates depending upon,
among other things, the aggregate principal amount of notes purchased in any
transaction. Occidental may concurrently offer notes with similar variable terms
but different interest rates at any
S-9
<PAGE> 10
time. Occidental may also concurrently offer notes having different variable
terms to the same or different investors.
REDEMPTION AT THE OPTION OF OCCIDENTAL
Unless otherwise specified in the applicable pricing supplement, the notes
will not be subject to any sinking fund. Occidental may redeem the notes at its
option prior to their stated maturity only if an initial redemption date is
specified in the applicable notes and the related pricing supplement. If so
indicated in the applicable pricing supplement, Occidental may redeem the
related notes at its option on any date on and after the initial redemption date
specified in the pricing supplement. On and after the initial redemption date,
if any, Occidental may redeem the related notes at any time in whole or from
time to time in part at its option at a redemption price described below
together with interest on the principal of the applicable notes payable to the
redemption date. Unless otherwise specified in the applicable pricing
supplement, notice of any redemption shall be not more than 60 nor less than 30
calendar days before the redemption date. Unless otherwise specified in the
applicable pricing supplement, Occidental will redeem the notes in increments of
$1,000, provided that any remaining principal amount will be an authorized
denomination of the applicable note. Unless otherwise specified in the
applicable pricing supplement, the redemption price of a note will initially
mean a percentage, the "initial redemption percentage", of the principal amount
of the note to be redeemed specified in the applicable pricing supplement and
shall decline at each anniversary of the initial redemption date by a
percentage, specified in that pricing supplement, of the principal amount to be
redeemed until the redemption price is 100 percent of the unpaid principal
amount to be redeemed.
REPAYMENT AT THE OPTION OF THE HOLDER
If so indicated in the applicable pricing supplement, Occidental will repay
the related notes in whole or in part at the option of the holders of the notes
on any optional repayment date specified in the pricing supplement. If no
optional repayment date is indicated with respect to a note, it will not be
repayable at the option of the holder before its stated maturity. Unless
specified in the applicable pricing supplement, any repayment in part will be in
an amount equal to $1,000 or integral multiples of $1,000, provided that any
remaining principal amount will be an authorized denomination of the applicable
note. The repurchase price for any note so repurchased will be equal to the
applicable purchase price specified in the Pricing Supplement, together with
interest on the principal of the applicable note payable to, but not including,
the date of repayment. For any note to be repaid, the trustee must receive, at
its office maintained for that purpose in the Borough of Manhattan, The City of
New York, currently the corporate trust office of the trustee located at 101
Barclay Street, 21 West, New York, New York 10286, Attn: Corporate Trust
Administration, not more than 60 nor less than 30 days before the optional
repayment date:
- in the case of a note in certificated form, the note and the form
entitled "Option to Elect Repayment" duly completed, or
- in the case of a note in book-entry form, instructions to that effect
from the applicable beneficial owner of the note to the depositary,
forwarded by the depositary.
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Notices of elections from a holder to exercise the repayment option must be
received by the trustee by 5:00 p.m., New York City time, on the last day for
giving notice. Exercise of the repayment option by the holder of a note will be
irrevocable.
Only the depositary may exercise the repayment option in respect of global
securities representing notes in book-entry form. Accordingly, beneficial owners
of global securities that desire to have all or any portion of the notes in
book-entry form represented by global securities repaid must instruct the
participant through which they own their interest to direct the depositary to
exercise the repayment option on their behalf by forwarding the repayment
instructions to the trustee as discussed above. By doing so, each beneficial
owner will cause the participant through which it owns its interest to transfer
its interest in the global securities representing the related notes in
book-entry form, on the depositary's records, to the trustee. In order to ensure
that the instructions are received by the trustee on a particular day, the
applicable beneficial owner must so instruct the participant through which it
owns its interest before that participant's deadline for accepting instructions
for that day. Different participants may have different deadlines for accepting
instructions from their customers. Accordingly, beneficial owners of notes in
book-entry form should consult the participants through which they own their
interest for the respective deadlines. All instructions given to participants
from beneficial owners of notes in book-entry form relating to the option to
elect repayment will be irrevocable. See "-- Book-Entry Notes".
Occidental will not be required to (1) issue, register the transfer of or
exchange any note with an optional repayment date during a period beginning at
the opening of business 15 days before the first date any notice to exercise a
repayment option may be delivered to the trustee and ending at the close of
business on the last date a notice to exercise a repayment option may be
delivered to the trustee or (2) register the transfer of or exchange any note
for which, in whole or part, a notice to exercise a repayment option has been
delivered to the trustee, except the portion of any such note for which the
notice to exercise a repayment option has not been delivered to the trustee.
If applicable, Occidental will comply with the requirements of Section
14(e) of the Exchange Act and the rules promulgated thereunder and any other
securities laws or regulations in connection with any repayment at the option of
the holder.
Occidental may at any time purchase notes at any price or prices in the
open market or otherwise. Notes so purchased by Occidental may, at the
discretion of Occidental, be held, resold or surrendered to the trustee for
cancellation.
INTEREST
Each note will bear interest from the date of issue at the rate per annum
or, in the case of a floating rate note, pursuant to the interest rate formula
stated in the applicable note and in the related pricing supplement until the
principal of the note is paid or made available for payment. Interest will be
payable in arrears on each interest payment date specified in the applicable
pricing supplement on which an installment of interest is due and payable and at
Maturity. The first payment of interest on any note originally issued between a
regular record date and the related interest payment date will be made on the
interest payment date immediately following the next succeeding regular record
date to the registered holder on that succeeding regular record date. Each
regular record date will be the fifteenth calendar day, whether or not a
Business Day, immediately preceding the related interest payment date.
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FIXED RATE NOTES
Unless otherwise specified in an applicable pricing supplement, each fixed
rate note will bear interest from, and including, the date of issue, at the rate
per annum stated on the face of the note until the principal amount of the note
is paid or made available for payment. Interest payments on fixed rate notes
will equal the amount of interest accrued from and including:
(1) the immediately preceding interest payment date on which interest was
paid, or duly provided for, or,
(2) if no interest has been paid, or duly provided for, on the fixed rate
notes, the date of issue,
to, but excluding, the related interest payment date or Maturity, as the case
may be. Unless otherwise specified in the applicable pricing supplement,
interest on fixed rate notes will be computed on the basis of a 360-day year of
twelve 30-day months.
Unless otherwise specified in the applicable pricing supplement, interest
on fixed rate notes will be payable semiannually on May 15 and November 15 of
each year and at Maturity. If any interest payment date or the Maturity of a
fixed rate note falls on a day that is not a Business Day, the related payment
of principal, premium, if any, or interest will be made on the next succeeding
Business Day as if made on the date the applicable payment was due, and no
interest will accrue on the amount payable for the period from and after the
interest payment date or Maturity, as the case may be.
FLOATING RATE AND INDEX RATE NOTES
Interest on floating rate notes will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may be one or more
of:
- the CD Rate,
- the CMT Rate,
- the Commercial Paper Rate,
- the Eleventh District Cost of Funds Rate,
- the Federal Funds Rate,
- LIBOR,
- the Prime Rate,
- the Treasury Rate,
- an index which may be based on:
- prices, changes in prices, or differences between prices, of
securities, currencies, intangibles, goods, articles or
commodities, or
- the application of a formula, as described in the applicable
pricing supplement,
- an index which shall be an objective price, economic or other measure as
described in the applicable pricing supplement, or
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- any other Interest Rate Basis or interest rate formula that is specified
in the applicable pricing supplement.
A floating rate note may bear interest with respect to more than one
Interest Rate Basis.
TERMS. Each applicable pricing supplement will specify the terms of the
floating rate note being delivered, including:
- whether the floating rate note is:
- a "Regular Floating Rate Note",
- an "Inverse Floating Rate Note", or
- a "Floating Rate/Fixed Rate Note",
- the Interest Rate Basis or Bases,
- the Initial Interest Rate, if any,
- the Interest Reset Dates,
- the Optional Reset Dates, if any,
- the interest payment dates,
- the period to maturity of the instrument or obligation with respect to
which the Interest Rate Basis or Bases will be calculated (the "Index
Maturity"),
- the Maximum Interest Rate and/or Minimum Interest Rate, if any,
- the number of basis points to be added to or subtracted from the related
Interest Rate Basis or Bases (the "Spread"),
- the percentage of the related Interest Rate Basis or Bases by which the
Interest Rate Basis or Bases will be multiplied to determine the
applicable interest rate (the "Spread Multiplier"),
- if one or more of the specified Interest Rate Bases is LIBOR, the LIBOR
Currency, and the Designated LIBOR Page, and
- if one or more of the specified Interest Rate Bases is the CMT Rate, the
Designated CMT Telerate Page and Designated CMT Maturity Index.
The interest rate borne by the floating rate notes will be determined as
follows:
Regular Floating Rate Notes. Unless a floating rate note is designated as a
Floating Rate/Fixed Rate Note, an Inverse Floating Rate Note or as having an
Addendum attached or as having "Other Provisions" apply relating to a different
interest rate formula, it will be a "Regular Floating Rate Note". Except as
described below or in an applicable pricing supplement, Regular Floating Rate
Notes will bear interest at the rate determined by reference to the applicable
Interest Rate Basis or Bases:
- plus or minus the applicable Spread, if any, and/or
- multiplied by the applicable Spread Multiplier, if any.
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Commencing on the first Interest Reset Date or Optional Reset Date, if any,
specified in the applicable pricing supplement, the interest rate on the related
Regular Floating Rate Note will be reset as of each Interest Reset Date and
Optional Reset Dates elected by Occidental, if any; provided, however, that the
interest rate in effect for the period from the date of issue to the first
Interest Reset Date will be the Initial Interest Rate.
Floating Rate/Fixed Rate Notes. If a floating rate note is designated as a
"Floating Rate/Fixed Rate Note", unless otherwise specified in the applicable
pricing supplement, it will bear interest at the rate determined by reference to
the applicable Interest Rate Basis or Bases:
- plus or minus the applicable Spread, if any, and/or
- multiplied by the applicable Spread Multiplier, if any.
Commencing on the first Interest Reset Date or Optional Reset Date, if any,
specified in the applicable pricing supplement, the interest rate on the related
Floating Rate/Fixed Rate Note will be reset as of each Interest Reset Date and
Optional Reset Dates elected by Occidental, if any; provided, however, that:
- the interest rate in effect for the period from the date of issue to the
first Interest Reset Date will be the Initial Interest Rate, and
- the interest rate in effect commencing on, and including, the date on
which interest begins to accrue on a fixed rate basis to Maturity will be
the Fixed Interest Rate, if the rate is specified in the applicable
pricing supplement, or if no Fixed Interest Rate is specified, the
interest rate in effect on the Floating Rate/Fixed Rate Note on the day
immediately preceding the date on which interest begins to accrue on a
fixed rate basis.
Inverse Floating Rate Notes. If a floating rate note is designated as an
"Inverse Floating Rate Note", except as described below or as specified in the
applicable pricing supplement, it will bear interest equal to the Fixed Interest
Rate specified in the related pricing supplement minus the rate determined by
reference to the applicable Interest Rate Basis or Bases:
- plus or minus the applicable Spread, if any, and/or
- multiplied by the applicable Spread Multiplier, if any;
provided, however, that unless otherwise specified in the applicable pricing
supplement, the interest rate on Inverse Floating Rate Notes will not be less
than zero percent. Commencing on the first Interest Reset Date or Optional Reset
Date, if any, specified in the applicable pricing supplement, the interest rate
on the related Inverse Floating Rate Note will be reset as of each Interest
Reset Date and Optional Reset Dates elected by Occidental, if any, provided,
however, that the interest rate in effect for the period from the date of issue
to the first Interest Reset Date will be the Initial Interest Rate.
Notwithstanding the foregoing, if a Floating Rate Note is designated as
having an Addendum attached or as having "Other Provisions" apply as specified
on the face of the applicable note, it will bear interest in accordance with the
terms described in the Addendum or specified under "Other Provisions" in the
note and the applicable pricing supplement.
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<PAGE> 15
Each Interest Rate Basis shall be the rate determined in accordance with
the applicable provisions below. Except as set forth above, the interest rate in
effect on each day will be the interest rate determined as of the Interest
Determination Date (as defined below) immediately preceding the applicable
Interest Reset Date.
Interest Reset Dates. The applicable pricing supplement will specify the
dates on which the interest rate on the related floating rate note will be reset
(each, an "Interest Reset Date"). Unless otherwise specified in the applicable
pricing supplement, the Interest Reset Date will be, in the case of floating
rate notes which reset:
- daily -- each Business Day;
- weekly -- the Wednesday of each week, with the exception of weekly reset
Floating Rate Notes as to which the Treasury Rate is an applicable
Interest Rate Basis, as to which the Interest Reset Date will be the
Tuesday of each week, except as described below;
- monthly -- the third Wednesday of each month, with the exception of
monthly reset Floating Rate Notes as to which the Eleventh District Cost
of Funds Rate is an applicable Interest Rate Basis, as to which the
Interest Reset Date will be the first calendar day of the month;
- quarterly -- the third Wednesday of March, June, September and December
of each year;
- semiannually -- the third Wednesday of the two months specified in the
applicable pricing supplement; and
- annually -- the third Wednesday of the month specified in the applicable
pricing supplement;
provided, however, that with respect to Floating Rate/Fixed Rate Notes, the rate
of interest will not reset after the applicable date on which interest on a
fixed rate basis begins to accrue.
If any Interest Reset Date for any floating rate note would otherwise be a
day that is not a Business Day, the applicable Interest Reset Date will be
postponed to the next succeeding day that is a Business Day, except that in the
case of a floating rate note as to which LIBOR is an applicable Interest Rate
Basis, if the Business Day falls in the next succeeding calendar month, then the
Interest Reset Date will be the immediately preceding Business Day. In addition,
in the case of a floating rate note for which the Treasury Rate is an applicable
Interest Rate Basis, if the Interest Determination Date would otherwise fall on
an Interest Reset Date, then the applicable Interest Reset Date will be
postponed to the next succeeding Business Day.
Maximum and Minimum Interest Rates. A floating rate note may also have
either or both of the following:
- a maximum numerical limitation, or ceiling, on the rate at which interest
may accrue during any interest period (a "Maximum Interest Rate"), and
- a minimum numerical limitation, or floor, on the rate at which interest
may accrue during any period (a "Minimum Interest Rate").
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<PAGE> 16
Each indenture is, and any notes issued under either indenture will be,
governed by and construed in accordance with the laws of the State of New York.
Under present New York law, the maximum rate of interest is 25 percent per annum
on a simple interest basis. This limit may not apply to securities in which
$2,500,000 or more has been invested. While Occidental believes that New York
law would be given effect by a state or federal court sitting outside of New
York, state laws frequently regulate the amount of interest that may be charged
to and paid by a borrower, including, in some cases, corporate borrowers. It is
suggested that prospective investors consult their personal advisors with
respect to the applicability of these laws. Occidental has agreed for the
benefit of the beneficial owners of the notes, to the extent permitted by law,
not to claim voluntarily the benefits of any laws concerning usurious rates of
interest against a beneficial owner of the notes.
Interest Payments. Each applicable pricing supplement will specify the
dates on which interest will be payable. Each floating rate note will bear
interest from the date of issue at the rates specified in the applicable
floating rate note until the principal of the applicable note is paid or
otherwise made available for payment. Except as provided below or in the
applicable pricing supplement, the interest payment dates with respect to
floating rate notes will be at Maturity and, in the case of floating rate notes
which reset:
- daily, weekly or monthly -- the third Wednesday of each month or on the
third Wednesday of March, June, September and December of each year, as
specified in the applicable pricing supplement;
- quarterly -- the third Wednesday of March, June, September and December
of each year;
- semiannually -- the third Wednesday of each of the two months of each
year specified in the applicable pricing supplement; and
- annually -- the third Wednesday of the month of each year specified in
the applicable pricing supplement.
If any interest payment date for any floating rate note, other than an
interest payment date at Maturity, would otherwise be a day that is not a
Business Day, the interest payment date will be postponed to the next Business
Day except that in the case of a floating rate note as to which LIBOR is an
applicable Interest Rate Basis, if the Business Day falls in the next succeeding
calendar month, the applicable interest payment date will be the immediately
preceding Business Day. If the Maturity of a floating rate note falls on a day
that is not a Business Day, the payment of principal, premium, if any, and
interest will be made on the next succeeding Business Day, and no interest on
the payment will accrue for the period from and after the Maturity.
Notwithstanding anything else contained herein, unless otherwise specified in an
applicable pricing supplement, the interest rate in effect on a floating rate
note for the ten calendar days immediately prior to a Maturity will be the
interest rate in effect on the tenth calendar day preceding that Maturity.
All percentages resulting from any calculation on floating rate notes
(other than percentages used in the calculation of the accrued interest factor
and accrued interest) will be rounded to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upwards. For example, 9.876545 percent, or .09876545, would be rounded to
9.87655 percent, or .0987655. All dollar amounts used in or resulting from any
calculation on floating rate notes will be rounded to the nearest cent or, in
the case of a foreign currency, to the nearest unit (with one-half cent or unit
being rounded upwards).
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<PAGE> 17
Interest payments on floating rate notes will equal the amount of interest
accrued from and including either:
- the immediately preceding interest payment date on which interest was
paid, or
- if no interest has been paid, the date of issue,
to, but excluding the interest payment date or Maturity, as the case may be.
With respect to each floating rate note, accrued interest will be
calculated by multiplying its face amount by an accrued interest factor. The
accrued interest factor is computed by adding the interest factor calculated for
each day in the period for which accrued interest is being calculated.
Unless otherwise specified in the applicable pricing supplement, the
interest factor for each day will be computed as follows:
- In the case of notes for which the Interest Rate Basis is the CD Rate,
the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate, the interest factor for each
day will be computed by dividing the interest rate applicable to each day
by 360.
- In the case of notes for which the Interest Rate Basis is the CMT Rate or
the Treasury Rate, the interest factor for each day will be computed by
dividing the interest rate applicable to each day by the actual number of
days in the year.
- The interest factor for notes for which the interest rate is calculated
with reference to two or more Interest Rate Bases will be calculated in
each period in the same manner as if only one of the applicable Interest
Rate Bases applied.
Interest Determination Dates. Unless otherwise specified in the applicable
pricing supplement, the interest rate applicable to each interest reset period
commencing on the Interest Reset Date, or Optional Reset Date, if applicable,
with respect to that interest reset period will be the rate determined as of the
applicable "Interest Determination Date." For purposes of this section only, the
term "Interest Reset Date" includes any Optional Reset Date for which Occidental
resets the interest rate applicable to a note.
- The Interest Determination Date with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime
Rate will be the second Business Day preceding each Interest Reset Date
for the related note.
- The Interest Determination Date with respect to the Eleventh District
Cost of Funds Rate will be the last Business Day of the month immediately
preceding each Interest Reset Date on which the Federal Home Loan Bank of
San Francisco publishes the Index, as defined below.
- The Interest Determination Date with respect to LIBOR will be the second
London Business Day preceding each Interest Reset Date, unless the LIBOR
Currency is British pounds sterling, in which case the "Interest
Determination Date" will be the applicable Interest Reset Date.
- The Interest Determination Date with respect to the Treasury Rate, unless
otherwise specified in the applicable pricing supplement, will be the day
in the week in which the related Interest Reset Date falls on which day
Treasury Bills, as defined below, are normally auctioned. Treasury Bills
are normally sold at auction
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on Monday of each week, unless that day is a legal holiday, in which case
the auction is normally held on the following Tuesday, although the
auction may be held on the preceding Friday; provided, however, that if
an auction is held on the Friday of the week preceding the related
Interest Reset Date, the related Interest Determination Date will be the
preceding Friday; and provided, further, that if an auction falls on any
Interest Reset Date, then the related Interest Reset Date will instead be
the first Business Day following the auction.
- The Interest Determination Date pertaining to a floating rate note the
interest rate of which is determined with reference to two or more
Interest Rate Bases will be the latest Business Day which is at least two
Business Days before the applicable Interest Reset Date for the
applicable floating rate note on which each Interest Reset Basis is
determinable. Each Interest Rate Basis will be determined on that
Interest Determination Date, and the applicable interest rate will take
effect on the related Interest Reset Date.
Calculation Date. Unless otherwise provided in the applicable pricing
supplement, the trustee will be the calculation agent. Upon the request of the
holder of any floating rate note, the calculation agent will provide the
interest rate then in effect and, if determined, the interest rate that will
become effective as a result of a determination made for the next Interest Reset
Date with respect to that floating rate note. Unless otherwise specified in the
applicable pricing supplement, the calculation date, if applicable, pertaining
to any Interest Determination Date will be the earlier of:
- the tenth calendar day after the applicable Interest Determination Date,
or, if the tenth calendar day is not a Business Day, the next succeeding
Business Day or
- the Business Day preceding the applicable Interest Payment Date or
Maturity, as the case may be.
CD RATE. CD Rate notes will bear interest at the rates, calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable CD Rate notes and in any applicable pricing
supplement.
"CD Rate" means:
(1) the rate on the applicable Interest Determination Date for negotiable
United States dollar certificates of deposit having the Index Maturity
specified in the applicable pricing supplement published in H.15(519),
as defined below, under the heading "CDs (secondary market)", or
(2) if the rate referred to in clause (1) above is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the applicable Interest Determination Date for negotiable United States
dollar certificates of deposit of the Index Maturity specified in the
applicable pricing supplement as published in H.15 Daily Update, as
defined below, or another recognized electronic source used for the
purpose of displaying the applicable rate, under the caption "CDs
(secondary market)", or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date calculated by the calculation
agent as the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on the applicable Interest
Determination Date, of three leading non-bank dealers in
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<PAGE> 19
negotiable United States dollar certificates of deposit in The City of
New York, which may include the agents or their respective affiliates,
selected by the calculation agent for negotiable United States dollar
certificates of deposit of major United States money market banks for
negotiable United States dollar certificates of deposit with a
remaining maturity closest to the Index Maturity specified in the
applicable pricing supplement in an amount that is representative for a
single transaction in that market at that time, or
(4) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (3) above, the same CD Rate already in effect on
the applicable Interest Determination Date.
"H.15(519)" means the weekly statistical release designated as H.15(519),
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or
publication.
CMT RATE. CMT Rate notes will bear interest at the rates, calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable CMT Rate notes and in any applicable pricing
supplement.
"CMT Rate" means:
(1) the rate displayed on the Designated CMT Telerate Page under the
caption ". . . Treasury Constant Maturities . . . Federal Reserve Board
Release H.15 . . . Mondays Approximately 3:45 P.M.", under the column
for the Designated CMT Maturity Index, as defined below, for:
(a) if the Designated CMT Telerate Page is 7051, the rate on the
applicable Interest Determination Date, and
(b) if the Designated CMT Telerate Page is 7052, the weekly or the
monthly average, as specified in the applicable pricing supplement,
for the week or the month, as applicable, ended immediately
preceding the week or the month, as applicable, in which the related
Interest Determination Date falls, or
(2) if the rate referred to in clause (1) is no longer displayed on the
relevant page or is not so displayed by 3:00 P.M., New York City time,
on the related calculation date, the treasury constant maturity rate
for the Designated CMT Maturity Index published in H.15(519), or
(3) if the rate referred to in clause (2) is no longer published or is not
published by 3:00 P.M., New York City time, on the related calculation
date, the treasury constant maturity rate for the Designated CMT
Maturity Index, or other United States Treasury rate for the Designated
CMT Maturity Index, for the applicable Interest Determination Date with
respect to the applicable Interest Reset Date as may then be published
by either the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the calculation agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519), or
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<PAGE> 20
(4) if the rate referred to in clause (3) is not so published by 3:00 P.M.,
New York City time, on the applicable calculation date, the rate on the
applicable Interest Determination Date calculated by the calculation
agent as a yield to maturity, based on the arithmetic mean of the
secondary market offered rates as of approximately 3:30 P.M., New York
City time, on the applicable Interest Determination Date reported,
according to their written records, by three leading primary United
States government securities dealers in The City of New York (each, a
"Reference Dealer"), which may include the agents or their respective
affiliates, selected by the calculation agent from five Reference
Dealers selected by the calculation agent after eliminating the highest
quotation, or, in the event of equality, one of the highest, and the
lowest quotation or, in the event of equality, one of the lowest, for
the most recently issued direct noncallable fixed rate obligations of
the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to
maturity of not less than the Designated CMT Maturity Index minus one
year, or
(5) if the calculation agent is unable to obtain three applicable Treasury
Note quotations as referred to in clause (4), the rate on the
applicable Interest Determination Date calculated by the calculation
agent as a yield to maturity based on the arithmetic mean of the
secondary market offered rates as of approximately 3:30 P.M., New York
City time, on the applicable Interest Determination Date of three
Reference Dealers in The City of New York selected by the calculation
agent from five Reference Dealers selected by the calculation agent
after eliminating the highest quotation or, in the event of equality,
one of the highest and the lowest quotation or, in the event of
equality, one of the lowest, for Treasury Notes with an original
maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest
to the Designated CMT Maturity Index and in an amount of at least $100
million, or
(6) if three or four, and not five, of the Reference Dealers are quoting as
referred to in clause (5) above, the rate will be calculated by the
calculation agent as the arithmetic mean of the offered rates obtained
and neither the highest nor the lowest of quotes will be eliminated, or
(7) if fewer than three Reference Dealers selected by the calculation agent
are quoting as mentioned in clause (5), the same rate already in effect
on the applicable Interest Determination Date.
If two Treasury Notes with an original maturity as described in clause (5) have
remaining terms to maturity equally close to the Designated CMT Maturity Index,
the calculation agent will obtain from five Reference Dealers quotations for the
Treasury Note with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on Bridge Telerate, Inc.,
or any successor service, on the page specified in the applicable pricing
supplement, or any other page as may replace the specified page on that service,
for the purpose of displaying Treasury Constant Maturities as reported in
H.15(519), or, if no page is specified in the applicable pricing supplement,
page 7052.
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<PAGE> 21
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified in the applicable pricing supplement with respect to which the CMT
Rate will be calculated or, if no maturity is specified in the applicable
pricing supplement, 2 years.
COMMERCIAL PAPER RATE. Commercial Paper Rate notes will bear interest at
the rates, calculated with reference to the Commercial Paper Rate and the Spread
and/or Spread Multiplier, if any, specified in the applicable Commercial Paper
Rate notes and in any applicable pricing supplement.
"Commercial Paper Rate" means:
(1) the Money Market Yield, as defined below, on the applicable Interest
Determination Date of the rate for commercial paper having the Index
Maturity specified in the applicable pricing supplement published in
H.15(519) under the caption "Commercial Paper -- Nonfinancial", or
(2) if the rate described in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the Money Market
Yield of the rate on the applicable Interest Determination Date for
commercial paper having the Index Maturity specified in the applicable
pricing supplement published in H.15 Daily Update, or another
recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "Commercial Paper -- Nonfinancial",
or
(3) if the rate is referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the applicable Interest Determination Date calculated by the
calculation agent as the Money Market Yield of the arithmetic mean of
the offered rates at approximately 11:00 A.M., New York City time, on
the applicable Interest Determination Date of three leading dealers of
United States dollar commercial paper in The City of New York, which
may include the agents or their respective affiliates, selected by the
calculation agent for commercial paper having the Index Maturity
specified in the applicable pricing supplement placed for industrial
issuers whose bond rating is "Aa", or the equivalent, from a nationally
recognized statistical rating organization, or
(4) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (3), the same rate already in effect on the
applicable Interest Determination Date.
"Money Market Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
<TABLE>
<CAPTION>
<C> <C> <S>
D x 360
Money Market Yield = ------------- x 100
360 - (D x M)
</TABLE>
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
ELEVENTH DISTRICT COST OF FUNDS RATE. Eleventh District Cost of Funds Rate
notes will bear interest at the rates, calculated with reference to the Eleventh
District Cost of
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<PAGE> 22
Funds Rate and the Spread and/or Spread Multiplier, if any, specified in the
applicable Eleventh District Cost of Funds Rate notes and in any applicable
pricing supplement.
"Eleventh District Cost of Funds Rate" means:
(1) the rate equal to the monthly weighted average cost of funds for the
calendar month immediately preceding the month in which the applicable
Interest Determination Date falls as set forth under the caption "11th
District" on the display on Bridge Telerate, Inc., or any successor
service, on page 7058, or any other page as may replace the specified
page on the applicable service ("Telerate Page 7058"), as of 11:00
A.M., San Francisco time, on the applicable Interest Determination
Date, or
(2) if the rate referred to in clause (1) does not appear on Telerate Page
7058 on the related Interest Determination Date, the monthly weighted
average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that was most recently announced (the
"Index") by the Federal Home Loan Bank of San Francisco as the cost of
funds for the calendar month immediately preceding the applicable
Interest Determination Date, or
(3) if the Federal Home Loan Bank of San Francisco fails to announce the
Index on or before the applicable Interest Determination Date for the
calendar month immediately preceding the applicable Interest
Determination Date, the same rate already in effect on the applicable
Interest Determination Date.
FEDERAL FUNDS RATE. Federal Funds Rate notes will bear interest at the
rates, calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any, specified in the applicable Federal Funds Rate notes
and in any applicable pricing supplement.
"Federal Funds Rate" means:
(1) the rate on the applicable Interest Determination Date for United
States dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)", as displayed on Bridge Telerate, Inc., or
any successor service, on page 120, or any other page as may replace
the specified page on the applicable service ("Telerate Page 120"), or
(2) if the rate referred to in clause (1) does not appear on Telerate Page
120 or is not so published by 3:00 P.M., New York City time, on the
related calculation date, the rate on the applicable Interest
Determination Date for United States dollar federal funds published in
H.15 Daily Update, or another recognized electronic source used for the
purpose of displaying the applicable rate, under the caption "Federal
Funds (Effective)", or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date calculated by the calculation
agent as the arithmetic mean of the rates for the last transaction in
overnight United States dollar federal funds arranged by three leading
brokers of United States dollar federal funds transactions in The City
of New York, which may include the agents or their respective
affiliates, selected by the calculation agent before 9:00 A.M., New
York City time, on the applicable Interest Determination Date, or
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<PAGE> 23
(4) if the brokers selected by the calculation agent are not quoting as
mentioned in clause (3), the same rate already in effect on the applicable
Interest Determination Date.
LIBOR. LIBOR notes will bear interest at the rates, calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any, specified in
the applicable LIBOR notes and in any applicable pricing supplement.
"LIBOR" means:
(1) if "LIBOR Telerate" is specified in the applicable pricing supplement
or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement as the method for calculating LIBOR, the
rate for deposits in the LIBOR Currency, as defined below, having the
Index Maturity specified in the applicable pricing supplement,
commencing on the second London Business Day immediately following that
Interest Determination Date, that appears on the Designated LIBOR Page,
as defined below, as of 11:00 A.M., London time, on the applicable
Interest Determination Date, or
(2) if "LIBOR Reuters" is specified in the applicable pricing supplement,
the arithmetic mean of the offered rates for deposits in the LIBOR
Currency having the Index Maturity specified in the applicable pricing
supplement, commencing on the second London Business Day immediately
following that Interest Determination Date, that appear on the
Designated LIBOR Page as of 11:00 A.M., London time, on the applicable
Interest Determination Date. If the Designated LIBOR Page by its terms
provides only for a single rate, then the single rate will be used, or
(3) if on the Interest Determination Date fewer than two offered rates
appear, or no rate appears, as the case may be, on the Designated LIBOR
Page as specified in clauses (1) or (2), respectively, the rate
calculated by the calculation agent as the arithmetic mean of at least
two quotations obtained by the calculation agent after requesting the
principal London offices of each of four major reference banks, which
may include affiliates of the agents, in the London interbank market to
provide the calculation agent with its offered quotation for deposits
in the LIBOR Currency for the period of the Index Maturity specified in
the applicable pricing supplement, commencing on the second London
Business Day immediately following the applicable Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on the applicable Interest
Determination Date and in a principal amount that is representative for
a single transaction in the LIBOR Currency in that market at that time,
or
(4) if fewer than two quotations referred to in clause (3) are so provided,
the rate on the applicable Interest Determination Date calculated by
the calculation agent as the arithmetic mean of the rates quoted at
approximately 11:00 A.M., in the applicable Principal Financial Center,
on the applicable Interest Determination Date by three major banks,
which may include affiliates of the agents, in the applicable Principal
Financial Center selected by the calculation agent for loans in the
LIBOR Currency to leading European banks, having the Index Maturity
specified in the applicable pricing supplement and in a principal
amount that is representative for a single transaction in the
applicable LIBOR Currency in that market at that time, or
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(5) if the banks so selected by the calculation agent are not quoting as
mentioned in clause (4), the same rate already in effect on the
applicable Interest Determination Date.
"LIBOR Currency" means the currency specified in the applicable pricing
supplement as to which LIBOR will be calculated or, if no currency is specified
in the applicable pricing supplement, United States dollars.
"Designated LIBOR Page" means either:
- if "LIBOR Telerate" is designated in the applicable pricing supplement or
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement as the method for calculating LIBOR, the
display on Bridge Telerate, Inc., or any successor service, on the page
specified in the applicable pricing supplement, or any page as may
replace the specified page on the applicable service, for the purpose of
displaying the London interbank rates of major banks for the applicable
LIBOR Currency, or
- if "LIBOR Reuters" is specified in the applicable pricing supplement, the
display on the Reuters Monitor Money Rates Service, or any successor
service, on the page specified in the applicable pricing supplement, or
any other page as may replace the specified page on the applicable
service, for the purpose of displaying the London interbank rates of
major banks for the LIBOR Currency.
PRIME RATE. Prime Rate notes will bear interest at the rates, calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any, specified in the applicable Prime Rate notes and any applicable pricing
supplement.
"Prime Rate" means:
(1) the rate on the applicable Interest Determination Date as published in
H.15(519) under the heading "Bank Prime Loan", or
(2) if the rate referred to in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date published in H.15 Daily Update,
or another recognized electronic source used for the purpose of
displaying the applicable rate under the caption "Bank Prime Loan", or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate
calculated by the calculation agent as the arithmetic mean of the rates
of interest publicly announced by at least four banks that appear on
the Reuters Screen US PRIME 1 Page, as defined below, as the particular
bank's prime rate or base lending rate as of 11:00 A.M., New York City
time, on the applicable Interest Determination Date, or
(4) if fewer than four rates described in clause (3) appear on Reuters
Screen US PRIME 1 Page by 3:00 P.M., New York City time on the
applicable Interest Determination Date, the rate will be calculated by
the calculation agent as the arithmetic mean of the prime rates or base
lending rates quoted on the basis of the actual number of days in the
year divided by a 360-day year as of the close of business on the
applicable Interest Determination Date by three major banks,
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<PAGE> 25
which may include affiliates of the agents, in The City of New York
selected by the calculation agent, or
(5) if the banks selected by the calculation agent are not quoting as
mentioned in clause (4), the same rate already in effect on the
applicable Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuters Monitor
Money Rates Service, or any successor service, on the "US PRIME 1" Page, or
other page as may replace the US PRIME 1 Page on the applicable service, for the
purpose of displaying prime rates or base lending rates of major United States
banks.
TREASURY RATE. Treasury Rate notes will bear interest at the rates,
calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any, specified in the applicable Treasury Rate notes and in any
applicable pricing supplement.
"Treasury Rate" means:
(1) the rate from the auction held on the applicable Interest Determination
Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified in the
applicable pricing supplement under the caption "INVESTMENT RATE" on
the display on Bridge Telerate, Inc., or any successor service, on page
56, or any other page as may replace page 56 on the applicable service
("Telerate Page 56") or page 57, or any other page as may replace page
57 on the applicable service ("Telerate Page 57"), or
(2) if the rate described in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the Bond
Equivalent Yield, as defined below, of the rate for the applicable
Treasury Bills as published in H.15 Daily Update, or another recognized
electronic source used for the purpose of displaying the applicable
rate, under the caption "U.S. Government Securities/ Treasury
Bills/Auction High", or
(3) if the rate described in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the Bond
Equivalent Yield of the auction rate of the applicable Treasury Bills
announced by the United States Department of the Treasury, or
(4) in the event that the rate referred to in clause (3) is not available,
the Bond Equivalent Yield of the rate on the applicable Interest
Determination Date of Treasury Bills having the Index Maturity
specified in the applicable pricing supplement published in H.15(519)
under the caption "U.S. Government Securities/Treasury Bills/Secondary
Market", or
(5) if the rate referred to in clause (4) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date of the applicable Treasury Bills
as published in H.15 Daily Update, or another recognized electronic
source used for the purpose of displaying the applicable rate, under
the caption "U.S. Government Securities/ Treasury Bills/Secondary
Market", or
(6) if the rate referred to in clause (5) is not so published by 3:00 P.M.,
New York City time, on the related Calculation Date, the rate on the
applicable Interest Determination Date calculated by the calculation
agent as the Bond Equivalent
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<PAGE> 26
Yield of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on the applicable Interest
Determination Date, of three primary United States government
securities dealers, which may include the agents or their respective
affiliates, selected by the calculation agent, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity
specified in the applicable pricing supplement, or
(7) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (6), the same rate already in effect on the
applicable Interest Determination Date.
"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
<TABLE>
<C> <C> <S>
D x N
Bond Equivalent Yield = ------------- x 100
360 - (D x M)
</TABLE>
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366 (if a leap year), as the case may
be, and "M" refers to the actual number of days in the interest period for which
interest is being calculated.
OTHER INDEXED INTEREST RATES. Indexed notes will bear interest based on an
index, described in the applicable pricing supplement, based on a price or
change in price of securities, currencies, intangibles, goods, articles or
commodities, or the application of a formula.
If a third party is appointed to calculate or announce the index for a
particular indexed note, and the third party either (1) suspends the calculation
or announcement of that index or (2) changes the basis upon which that index is
calculated in a manner that is inconsistent with the applicable pricing
supplement, then Occidental will select another third party to calculate or
announce the index. The agent or anther affiliate of Occidental may be either
the original or successor third party selected by Occidental.
If for any reason the index cannot be calculated on the same basis and
subject to the same conditions and controls as applied to the original third
party, then any interest on such indexed note will be calculated in the manner
set forth in the applicable pricing supplement. Any determination by the
selected third party will be binding on all parties, except in the case of an
obvious error.
OTHER PROVISIONS; ADDENDA
Any provisions with respect to an issue of notes, including the
determination of one or more Interest Rate Bases, the specification of one or
more Interest Rate Bases, the calculation of the interest rate applicable to a
floating rate note, the applicable interest payment dates, the stated maturity
date, any redemption or repayment provisions or any other matter relating to the
applicable notes may be modified by the terms as specified under "Other
Provisions" on the face of the applicable notes or in an Addendum relating to
the applicable notes, if so specified on the face of the applicable notes and in
the applicable pricing supplement.
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ORIGINAL ISSUE DISCOUNT NOTES
Occidental may from time to time offer notes at a price less than their
"stated redemption price at maturity", or notes with other characteristics that
result in the notes being treated as issued with original issue discount for
federal income tax purposes ("Original Issue Discount Notes"). Original Issue
Discount Notes may pay no interest currently or pay interest at below market
rates. Additional considerations relating to any Original Issue Discount Notes
may be described in the applicable pricing supplement.
AMORTIZING NOTES
Occidental may from time to time offer notes ("Amortizing Notes") with
amounts of principal and interest payable in installments over the term of the
notes. Unless otherwise specified in the applicable pricing supplement, interest
on each Amortizing Note will be computed on the basis of a 360-day year of
twelve 30-day months. Payments with respect to Amortizing Notes will be applied
first to interest due and payable on the Amortizing Notes and then to the
reduction of the unpaid principal amount of the Amortizing Notes. Further
information concerning additional terms and conditions of any issue of
Amortizing Notes will be provided in the applicable pricing supplement. A table
setting forth repayment information in respect of each Amortizing Note will be
included in the applicable note and the applicable pricing supplement.
SUBSEQUENT INTEREST PERIODS
The pricing supplement relating to each note will indicate whether
Occidental has the option to reset the interest rate, or the Spread, Spread
Multiplier, or method of calculation, as the case may be, for that note. If
Occidental has the option to reset, the pricing supplement will also indicate
the Optional Reset Date or dates on which the interest rate or the Spread,
Spread Multiplier, or method of calculation, as the case may be, may be reset.
Occidental shall notify the trustee whether or not it intends to exercise
its option relating to that note at least 45 but not more than 60 days prior to
an Optional Reset Date for that note. Not later than 40 days prior to the
Optional Reset Date, the trustee will mail to the holder of that note a reset
notice first class, postage prepaid, indicating whether Occidental has elected
to reset the interest rate, or the Spread, Spread Multiplier or method of
calculation, as the case may be.
If Occidental elects to reset the interest rate, or the Spread, Spread
Multiplier or method of calculation, as the case may be, the trustee will mail
to the holder in a manner described above a notice indicating the new interest
rate or new Spread, Spread Multiplier, or method or calculation as the case may
be. The notice will also indicate any provisions for redemption during the
subsequent interest period. The subsequent interest period is the period from
one Optional Reset Date to the next Optional Reset Date or, if there is no next
Optional Reset Date, to the stated maturity of the note, including the date or
dates on which or the period or periods during which and the price or prices at
which redemption may occur during the subsequent interest period.
Upon the transmittal by the trustee of a reset notice to the holder of a
note, the new interest rate or new Spread, Spread Multiplier, and/or method of
calculation as the case may be, will take effect automatically. Except as
modified by the reset notice and as
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described below, the note will have the same terms as prior to the transmittal
of the reset notice.
Despite the foregoing, not later than 20 days prior to an Optional Reset
Date for a note, Occidental may, at its option, revoke the interest rate, or the
Spread or Spread Multiplier provided for in the reset notice relating to that
Optional Reset Date and establish a higher interest rate, or a higher Spread or
Spread Multiplier, as applicable, for the subsequent interest period commencing
on that Optional Reset Date.
Occidental can make a revocation by causing the trustee for the note to
mail notice of the higher interest rate or higher Spread or Spread Multiplier,
as the case may be, first class, postage prepaid to the holder of the note. That
notice shall be irrevocable. All notes for which the interest rate or Spread or
Spread Multiplier is reset on an Optional Reset Date will bear the higher
interest rate, or higher Spread or Spread Multiplier, as the case may be,
whether or not tendered for repayment.
The holder of a note will have the option to elect repayment of that note
by Occidental on each Optional Reset Date at a price equal to the principal
amount of the note plus interest accrued to the Optional Reset Date. In order
for a note to be repaid on an Optional Reset Date, the holder of the note must
follow the procedures set forth above under "Repayment at the Option of the
Holder" for optional repayment. However, the period for delivery of the note or
notification to the trustee for the note will be at least 25 but not more than
35 days prior to the Optional Reset Date. Further, a holder who has tendered a
note for repayment pursuant to a reset notice may, by written notice to the
trustee for the note, revoke any such tender for repayment until the close of
business on the tenth day prior to such Optional Reset Date.
INDEXED PRINCIPAL NOTES
Occidental may from time to time offer indexed notes on which some or all
of the principal amount payable at stated maturity or earlier redemption or
retirement is determined based on:
- the amount designated in the applicable pricing supplement as the "face
amount" of the indexed principal note; and
- an index which may be based on:
(1) prices, changes in prices, or differences between prices, of
securities, currencies, intangibles, goods, articles or commodities,
or
(2) the application of a formula, as described in the applicable pricing
supplement, or
- an index which shall be an objective price, economic or other measures as
are described in the applicable pricing supplement.
A description of the index used in any determination of a principal payment, and
the method of formula by which principal payments will be determined based on
that index, will be set forth in the applicable pricing supplement.
If a fixed rate note, floating rate note or indexed rate note is also an
indexed principal note, the amount of any interest payment will be determined
based on the face amount of the indexed note unless specified otherwise in the
applicable pricing supplement. The
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principal amount payable at stated maturity or any earlier redemption or
repayment of an indexed principal note may be different from the face amount.
If a third party is appointed to calculate or announce the index for a
particular indexed principal note, and the third party either (1) suspends the
calculation or announcement of that index or (2) changes the basis upon which
that index is calculated in a manner that is inconsistent with the applicable
pricing supplement, then Occidental will select another third party to calculate
or announce the index. The agents or their respective affiliates may be either
the original or successor third party selected by Occidental.
If for any reason the index cannot be calculated on the same basis and
subject to the same conditions and controls as applied to the original third
party, then any indexed principal amount of such indexed note will be calculated
in the manner set forth in the applicable pricing supplement. Any determination
by the selected third party will be binding on all parties, except in the case
of an obvious error.
Unless otherwise specified in the applicable pricing supplement, for the
purpose of determining whether holders of the requisite principal amount of
notes outstanding under the applicable indenture have made a demand or given a
notice or waiver or taken any other action, the outstanding principal amount of
indexed principal notes will be deemed to be the face amount stated on the
notes. Unless otherwise specified in the applicable pricing supplement, in the
event of an acceleration of the stated maturity of an indexed principal note,
the principal amount payable to the holder of a note upon acceleration will be
the principal amount determined based on the formula used to determine the
principal amount of that note on its stated maturity, as if the date of
acceleration were the stated maturity.
An investment in indexed principal notes has significant risks, including
the possibility of wide fluctuations in market value as well as in the amount of
payments due, that are not associated with a similar investment in a
conventional debt security. Such risks depend on a number of factors including
supply and demand for the particular security, currency, commodity or other good
or article to which the note is indexed and economic and political events over
which Occidental has no control.
DUAL CURRENCY NOTES
Occidental may from time to time offer dual currency notes on which
Occidental has a one time option of making all payments of principal, any
premium and interest on those notes which are issued on the same day and have
the same terms, the payments on which would otherwise be made in the specified
currency of those notes, in the optional payment currency specified in the
applicable pricing supplement. This option will be exercisable in whole but not
in part on an option election date, which will be any one of the dates specified
in the applicable pricing supplement. Information as to the relative value of
the specified currency compared to the optional payment currency will be set
forth in the applicable pricing supplement.
The pricing supplement for each issuance of dual currency notes will
specify, among other things:
- the specified currency;
- the optional payment currency; and
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- the designated exchange rate.
The designated exchange rate will be a fixed exchange rate used for
converting amounts denominated in the specified currency into amounts
denominated in the optional payment currency. The pricing supplement will also
specify the option election dates and interest payment dates for the related
issuance of dual currency notes. Each option election date will be a particular
number of days before an interest payment date or stated maturity, as set forth
in the applicable pricing supplement. Each option election date will be the date
on which Occidental may select whether to make all scheduled payments due
thereafter in the optional payment currency rather than in the specified
currency.
If Occidental makes an election, the amount payable in the optional payment
currency will be determined using the designated exchange rate specified in the
applicable pricing supplement. Notice of an election will be mailed in
accordance with the terms of the applicable tranche of dual currency notes
within two Business Days of the option election date. The notice will state (1)
the first date, whether an interest payment date and/or stated maturity, on
which scheduled payments in the optional payment currency will be made and (2)
the designated exchange rate. Notice by Occidental, once given, may not be
withdrawn. The equivalent value in the specified currency of any payment made
after an election may be less, at the then current exchange rate, than if
Occidental had made the payment in the specified currency.
For United States federal income tax purposes, holders of dual currency
notes may need to comply with rules which differ from the general rules
applicable to holders of other types of notes offered by this prospectus
supplement. The United States federal income tax consequences of the purchase,
ownership and disposition of dual currency notes will be set forth in the
applicable pricing supplement.
RENEWABLE NOTES
Occidental may from time to time offer renewable notes, which will mature
on an initial maturity date. That initial maturity date will be an interest
payment date specified in the applicable pricing supplement occurring in, or
prior to, the twelfth month following the original issue date of those notes,
unless the term of all or any portion of those notes is renewed in accordance
with the procedures described below.
The term of a renewable note may be extended to the interest payment date
occurring in the twelfth month, or, if a special election interval is specified
in the applicable pricing supplement, the last month in a period equal to twice
the special election interval elected by the holder after that renewal date.
That extension may be made on the initial renewal date. That date will be the
interest payment date occurring in the sixth month, unless a special election
interval is specified in the applicable pricing supplement, prior to the initial
maturity date of a renewable note and on the interest payment date occurring in
each sixth month, or in the last month of each special election interval, after
that initial renewal date which, together with the initial renewal date,
constitutes a renewal date.
If a holder does not elect to extend the terms of any portion of the
principal amount of a renewable note during the specified period prior to any
renewal date, that portion will become due and payable on the new maturity date.
That new maturity date will be the interest payment date occurring in the sixth
month, or the last month in the special election interval, after the renewal
date.
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A holder of a renewable note may elect to renew the term of that renewable
note, or if specified in the applicable pricing supplement, any portion of that
renewable note by delivering a notice to that effect to the trustee or any duly
appointed paying agent at the corporate trust office of the trustee or agency of
the trustee in New York City. That notice will be delivered not less than 15 nor
more than 30 days prior to the renewal date, unless another period is specified
in the applicable pricing supplement as the special election period. That
election will be irrevocable and will be binding upon each subsequent holder of
the renewable note.
An election to renew the term of a renewable note may be exercised for less
than the entire principal amount of that renewable note only if specified in the
applicable pricing supplement and only in a principal amount, or any integral
multiple in excess of that amount, that is specified in the applicable pricing
supplement. Despite the foregoing, the term of the renewable note may not be
extended beyond the stated maturity specified for any renewable note in the
applicable pricing supplement.
If the holder does not elect to renew the term, the renewable note must be
presented to the trustee, or any duly appointed payment agent. If a renewable
note is represented by a certificate issued in definitive form, that certificate
must be presented to the trustee as soon as practicable following receipt of
that renewable note. The trustee, or any duly appointed paying agent, will issue
in exchange for the note, in the name of that holder, a note in a principal
amount equal to the principal amount of the exchanged renewable note for which
no election to renew the term was exercised, with terms identical to those
specified on the renewable note. However, the newly issued note will have a
fixed, nonrenewable stated maturity on the new maturity date.
If an election to renew is made for less than the full principal amount of
a holder's renewable note, the trustee, or any duly appointed paying agent, will
issue in exchange for that note in the name of that holder, a replacement
renewable note. The replacement renewable note will be in a principal amount
equal to the principal amount elected to be renewed of the exchanged renewable
note, with terms otherwise identical to the exchanged renewable note.
EXTENSION OF MATURITY
The pricing supplement relating to each note will indicate whether
Occidental has the option to extend the stated maturity of that note for an
extension period. An extension period will be one or more periods of one to five
whole years, up to but not beyond the final maturity date set forth in the
applicable pricing supplement.
Occidental may exercise this option by notifying the trustee at least 45
but not more than 60 days prior to the old stated maturity of that note. Not
later than 40 days prior to the old stated maturity of that note, the trustee
will mail to the holder an extension notice, first class, postage prepaid. The
extension notice will set forth:
- the election of Occidental to extend the stated maturity of the note;
- the new stated maturity;
- in the case of a fixed rate note, the interest rate applicable to the
extension period;
- in the case of a floating rate note, the Spread, Spread Multiplier or
method of calculation applicable to the extension period; and
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- any provisions for redemption during the extension period, including the
date or dates on which, or the period or periods during which, and the
price or prices at which, any redemption may occur during the extension
period.
Upon the mailing by the trustee of an extension notice to the holder of a
note, the stated maturity of that note will be extended automatically, and,
except as modified by the extension notice and as described in the next
paragraph, the note will have the same terms as prior to the mailing of the
extension notice. Despite the foregoing, not later than 20 days prior to the old
stated maturity of the note, Occidental may, at its option, revoke the interest
rate, or the Spread or Spread Multiplier, as the case may be, provided for in
the extension notice for the note and establish for the extension period a
higher interest rate, in the case of a fixed rate note, or a higher Spread or
Spread Multiplier, in the case of a floating rate note.
Occidental may so act by causing the trustee for the note to mail notice of
the higher interest rate or higher Spread or Spread Multiplier, as the case may
be, first class, postage prepaid, to the holder of the note. This notice will be
irrevocable. All notes for which the stated maturity is extended will bear the
higher interest rate, in the case of fixed rate notes, or higher Spread or
Spread Multiplier, in the case of floating rate notes, for the extension period,
whether or not tendered for repayment.
If Occidental extends the stated maturity of a note, the holder of the note
will have the option to elect repayment of the note by Occidental on the old
stated maturity at a price equal to the principal amount of the note, plus
interest accrued to such date. In order for a note be repaid on the old stated
maturity once Occidental has extended its stated maturity, the holder of that
note must follow the procedures set forth above under "Repayment at the Option
of the Holder" for optional repayment. The period for delivery of a note or
notification to the trustee will be at least 25 but not more than 35 days prior
to the old stated maturity. A holder who has tendered a note for repayment
pursuant to an extension notice may give written notice to the trustee to revoke
its tender for repayment until the close of business on the tenth day before the
old stated maturity.
COMBINATION OF PROVISIONS
If so specified in the applicable pricing supplement, any note may be
required to comply with all of the provisions, or any combination of provision,
described above under "Subsequent Interest Periods", "Extension of Maturity" and
"Renewable Notes".
DEFEASANCE
Each indenture permits Occidental, by irrevocably depositing, in amounts
and maturities sufficient to pay and discharge at the stated maturity or
redemption date, if any, as the case may be, the entire indebtedness on all
outstanding notes of a particular series, cash or U.S. Government Obligations
with the trustee in trust solely for the benefit of the holders of that series
of notes, to defease the indenture with respect to those notes, and upon such
deposit, Occidental will be deemed to have paid and discharged its entire
indebtedness on that series of notes. Thereafter, holders would be able to look
only to such trust fund for payment of principal and interest at the stated
maturity or redemption date of that series of notes, if any, as the case may be.
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BOOK-ENTRY NOTES
DESCRIPTION OF THE GLOBAL SECURITIES
Upon issuance, all notes in book-entry form having the same date of issue,
stated maturity and otherwise having identical terms and provisions will be
represented by one or more fully registered global notes (the "Global Notes").
Each Global Note will be deposited with, or on behalf of, The Depository Trust
Company as depositary and registered in the name of the depositary or a nominee
of the depositary. Unless and until it is exchanged in whole or in part for
notes in certificated form, no Global Note may be transferred except as a whole
by the depositary to a nominee of the depositary or by a nominee of the
depositary to the depositary or another nominee of the depositary or by the
depositary or any nominee to a successor of the depositary or a nominee of the
successor.
DTC PROCEDURES
The following is based on information furnished by the depositary:
The depositary will act as securities depositary for the notes in
book-entry form. The notes in book-entry form will be issued as fully registered
securities registered in the name of Cede & Co., the depositary's partnership
nominee. One fully registered Global Note will be issued for each issue of notes
in book-entry form, each in the aggregate principal amount of the issue, and
will be deposited with the depositary. If, however, the aggregate principal
amount of any issue exceeds $200,000,000, one Global Note will be issued with
respect to each $200,000,000 of principal amount and an additional Global Note
will be issued with respect to any remaining principal amount of the issue.
The depositary 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. The depositary holds securities that its participants deposit with the
depositary. The depositary also 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 of the depositary include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
The depositary is owned by a number of its direct participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, LLC, and the National
Association of Securities Dealers, Inc. Access to the depositary's 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. The rules applicable to the
depositary and its participants are on file with the SEC.
Purchases of notes in book-entry form under the depositary's system must be
made by or through direct participants, which will receive a credit for those
notes in book-entry form on the depositary's records. The ownership interest of
each actual purchaser of each note in book-entry form represented by a Global
Note is, in turn, to be recorded on the records of direct participants and
indirect participants. Beneficial owners in book-entry form will not receive
written confirmation from the depositary of their purchase, but beneficial
owners are expected to receive written confirmations providing details of the
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transaction, as well as periodic statements of their holdings, from the direct
participants or indirect participants through which the beneficial owner entered
into the transaction. Transfers of ownership interests in a Global Note
representing notes in book-entry form are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners. Beneficial
owners of a Global Note representing notes in book-entry form will not receive
notes in certificated form representing their ownership interests therein,
except in the event that use of the book-entry system for the notes in
book-entry form is discontinued.
To facilitate subsequent transfers, all Global Notes representing notes in
book-entry form which are deposited with, or on behalf of, the depositary are
registered in the name of the depositary's nominee, Cede & Co. The deposit of
Global Notes with, or on behalf of, the depositary and their registration in the
name of Cede & Co. effect no change in beneficial ownership. The depositary has
no knowledge of the actual beneficial owners of the Global Notes representing
the notes in book-entry form; the depositary's records reflect only the identity
of the direct participants to whose accounts the notes in book-entry form are
credited, which may or may not be the beneficial owners. The participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the depositary to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners, will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither the depositary nor Cede & Co. will consent or vote with respect to
the Global Notes representing the notes in book-entry form. Under its usual
procedures, the depositary mails an omnibus proxy to Occidental as soon as
possible after the applicable record date. The omnibus proxy assigns Cede &
Co.'s consenting or voting rights to those direct participants, identified in a
listing attached to the omnibus proxy, to whose accounts the notes in book-entry
form are credited on the applicable record date.
Occidental will make principal, premium, if any, and/or interest, if any,
payments on the Global Notes representing the notes in book-entry form in
immediately available funds to the depositary. The depositary's practice is to
credit direct participants' accounts on the applicable payment date in
accordance with their respective holdings shown on the depositary's records
unless the depositary has reason to believe that it will not receive payment on
the applicable payment date. Payments by participants to beneficial owners will
be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered
in "street name", and will be the responsibility of the applicable participant
and not of the depositary, the trustee or Occidental, subject to any statutory
or regulatory requirements as may be in effect from time to time. Payment of
principal, premium, if any, and/or interest, if any, to the depositary is the
responsibility of Occidental and the trustee, disbursement of payments to direct
participants will be the responsibility of the depositary, and disbursement of
payments to the beneficial owners will be the responsibility of direct
participants and indirect participants.
If applicable, redemption notices shall be sent to Cede & Co. If less than
all of the notes in book-entry form of like tenor and terms are being redeemed,
the depositary's practice is to determine by lot the amount of the interest of
each direct participant in the issue to be redeemed.
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A beneficial owner will give notice of any option to elect to have its
notes in book-entry form repaid by Occidental, through its participant, to the
trustee, and will effect delivery of the applicable notes in book-entry form by
causing the direct participant to transfer the participant's interest in the
Global Note or Notes representing the notes in book-entry form, on the
depositary's records, to the trustee.
The depositary may discontinue providing its services as securities
depositary with respect to the notes in book-entry form at any time by giving
reasonable notice to Occidental or the trustee. In the event that a successor
securities depositary is not obtained, notes in certificated form are required
to be printed and delivered.
Occidental may decide to discontinue use of the system of book-entry
transfers through the depositary or a successor securities depositary. In that
event, notes in certificated form will be printed and delivered.
The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of securities in definitive form. These
restrictions may impair the ability to own, transfer or pledge beneficial
interests in Global Notes in book-entry form.
So long as the depositary, or its nominee, is the registered owner of a
Global Note, the depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the notes represented by the Global Note
or Notes for all purposes under the applicable indenture. Except as provided
below, beneficial owners of a Global Note will not be entitled to have the notes
represented by a Global Note registered in their names, will not receive or be
entitled to receive physical delivery of the notes in definitive form and will
not be considered the owners or holders thereof under the indentures.
Accordingly, each person owning a beneficial interest in a Global Note must rely
on the procedures of the depositary and, if that person is not a participant, on
the procedures of the participant through which that person owns its interest,
to exercise any rights of a holder under the Global Notes or the indentures.
Occidental understands that under existing industry practices, in the event that
Occidental requests any action of holders or that an owner of a beneficial
interest in a Global Note desires to give or take any action which a holder is
entitled to give or take under the indentures, the depositary would authorize
the participants holding the relevant beneficial interests to give or take the
desired action, and the participants would authorize beneficial owners owning
through the participants to give or take the desired action or would otherwise
act upon the instructions of beneficial owners.
YEAR 2000 COMPLIANCE
The depositary has advised Occidental that management of the depositary is
aware that some computer applications, systems and the like for processing data
("Systems") that are dependent upon calendar dates, including dates before, on,
and after January 1, 2000, may encounter "Year 2000 problems". The depositary
has informed direct and indirect participants and other members of the financial
community (the "Industry") that it has developed and is implementing a program
so that its Systems, as the same relate to the timely payment of distributions
(including principal and interest payments) to security holders, book-entry
deliveries, and settlement of trades with the depositary, continue to function
appropriately. This program includes a technical assessment and a remediation
plan, each of which is complete. Additionally, the depositary's plan includes a
testing phase, which is expected to be completed within appropriate time frames.
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However, the depositary's ability to perform properly its services is also
dependent upon other parties, including, but not limited to, issuers and their
agents, as well as the depositary's direct and indirect participants, third
party vendors from whom the depositary licenses software and hardware, and third
party vendors on whom the depositary relies for information or the provision of
services, including telecommunications and electrical utility service providers,
among others. The depositary has informed the Industry that it is contacting
(and will continue to contact) third party vendors from whom the depositary
acquires services to: (a) impress upon them the importance of such services
being Year 2000 compliant; and (b) determine the extent of their efforts for
Year 2000 remediation (and, as appropriate, testing) of their services. In
addition, the depositary is in the process of developing such contingency plans
as it deems appropriate.
According to the depositary, the information in the preceding two
paragraphs with respect to the depositary has been provided to the Industry for
informational purposes only and is not intended to serve as a representation,
warranty, or contract modification of any kind.
EXCHANGE FOR NOTES IN CERTIFICATED FORM
If:
(a) the depositary is at any time unwilling or unable to continue as
depositary for a series of the notes and a successor depositary is not
appointed by Occidental within 60 calendar days,
(b) Occidental executes and delivers to the trustee a Company Order to the
effect that the Global Notes of a series shall be exchangeable, or
(c) an Event of Default has occurred and is continuing with respect to a
series of notes,
the Global Note or Global Notes of the applicable series will be exchangeable
for notes in certificated form of like tenor and of an equal aggregate principal
amount, in denominations of $1,000 and integral multiples of $1,000. The
certificated notes will be registered in the name or names as the depositary
instructs the trustee. It is expected that instructions may be based upon
directions received by the depositary from participants with respect to
ownership of beneficial interests in Global Notes.
The information in this section concerning the depositary and the
depositary's system has been obtained from sources that Occidental believes to
be reliable, but Occidental takes no responsibility for the accuracy of the
information. Although the depositary has agreed to the foregoing procedures in
order to facilitate transfers of interest in the global securities among
participants of the depositary, it is under no obligation to perform or continue
to perform the procedures, and the procedures may be discontinued at any time.
Neither Occidental nor the trustee will have any responsibility for the
performance by the depositary 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 tax
consequences of the acquisition, ownership, and disposition of the notes by
original purchasers of the notes. This summary is based on existing United
States federal tax law, which is subject to change, possibly with retroactive
effect. This discussion does not address all aspects of United States federal
taxation which may be relevant to a particular holder in light of its specific
investment circumstances, such as holders who hold the notes as part of a
straddle, hedging, or synthetic security transaction for United States federal
income tax purposes, holders who have a functional currency other than the U.S.
dollar, or holders subject to special treatment under the United States federal
income tax law, such as financial institutions, insurance companies, tax-exempt
organizations, and broker-dealers. In addition, this summary does not discuss
any aspects of foreign, state, or local tax laws. This summary assumes that
purchasers will hold the notes as "capital assets," which generally means
property held for investment under the Internal Revenue Code of 1986, as
amended, or the "Code." We urge you to consult your tax advisor regarding the
United States federal tax consequences of acquiring, holding, and disposing of
the notes, as well as any tax consequences that may arise under the laws of any
foreign, state, local, or other taxing jurisdiction.
For purposes of this summary, the term "U.S. holder" means a beneficial
owner of a note that is, for United States federal income tax purposes:
- an individual citizen or resident of the United States;
- a corporation, partnership, or other entity created or organized in, or
under the laws of, the United States or any State;
- an estate, the income of which is includible in gross income for United
States federal income tax purposes regardless of its source; or
- a trust, the administration of which is subject to the primary
supervision of a United States court and which has one or more United
States persons who have the authority to control all substantial
decisions of the trust.
For purposes of this summary, the term "non-U.S. holder" means a beneficial
owner of a note that is not a U.S. holder.
U.S. HOLDERS
Original Issue Discount
Notes with a term greater than one year may be issued with original issue
discount for United States federal income tax purposes. Notes will be issued
with original issue discount if the stated principal amount due at maturity of a
note exceeds its issue price by more than a statutory minimum, or if a note has
specified interest payment characteristics such as interest payable less
frequently than annually, interest holidays, interest payable in additional
notes, specified stepped interest rates, or specified rates based on multiple
indices. If a note is issued with original issue discount, a U.S. holder of the
note will generally be required to include amounts in gross income for United
States federal income tax purposes in advance of the receipt of the cash payment
to which such income is attributable. The amount of original issue discount to
be included in income in any tax period will be determined using a constant
yield to maturity method, which will result in a
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greater portion of discount being included in income in the later part of the
term of the note. Any amounts included in income as original issue discount will
increase a U.S. holder's adjusted tax basis in the note. The treatment of notes
with contingent payments, such as indexed notes, will be different and is
described below. Additional information with respect to such treatment may be
provided in the pricing supplement relating to the notes.
Occidental will report annually to the Internal Revenue Service and to each
holder of a note the amount of original issue discount accrued on the note. We
urge you to consult your tax advisor regarding the particular original issue
discount characteristics of the note that is offered.
Acquisition Discount
Notes that have a fixed maturity of one year or less may be issued with
acquisition discount. Acquisition discount may arise if the stated principal
amount at maturity of a note exceeds its issue price. Accrual method taxpayers,
taxpayers in specified classes, and cash method taxpayers making an election to
accrue acquisition discount will generally be required to include acquisition
discount in income currently in an amount and manner similar to that applicable
to original issue discount. A cash method U.S. holder who makes this election
cannot revoke the election without the consent of the Internal Revenue Service,
and the election applies to all short-term obligations acquired by the U.S.
holder in the taxable year in which the election is made and in all subsequent
taxable years. Individuals and other non-electing cash method taxpayers holding
notes with acquisition discount are not required to include accrued acquisition
discount in income until the cash payments attributable to such amounts are
received, which amounts will be treated as ordinary income. A U.S. holder who
does not recognize acquisition discount on a note currently may also be subject
to limitations on the deductibility of interest on indebtedness incurred to
purchase or carry the note.
Disposition of Notes
In general, and subject to the previous discussion of acquisition discount,
a U.S. holder of a note will recognize gain or loss on the sale, redemption,
exchange or other disposition of the note in an amount equal to the difference
between (1) the amount realized, except to the extent attributable to accrued
but unpaid interest, and (2) the U.S. holder's adjusted tax basis in the note.
Foreign Currency Notes
Interest Payments and Original Issue Discount
A U.S. holder will be subject to tax on interest accrued or received on
notes that are denominated in, or determined by reference to, a currency or
currencies other than the U.S. dollar, or "foreign currency notes," in
accordance with the U.S. holder's regular method of tax accounting for United
States federal income tax purposes, and any original issue discount must be
included in income as it accrues. Regardless of whether an interest payment is
converted into U.S. dollars, the amount of interest income, including any
original issue discount, required to be included in income, or "includible
amount," will generally be:
- in the case of a cash method taxpayer, the U.S. dollar value of the
foreign currency interest payment based on the exchange rate prevailing
on the date of receipt of the
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payment plus the amount of any accrued original issue discount, as
described below, and
- in the case of an accrual method taxpayer, the average U.S. dollar value
of the accrued amounts based on the average exchange rate prevailing
during the interest accrual period, unless an election is made under the
Treasury regulations to use a different exchange rate. The U.S. dollar
value will be the U.S. holder's tax basis in the foreign currency. The
amount of original issue discount on a foreign currency note required to
be included in income will be computed for each accrual period in the
relevant foreign currency and then translated into a U.S. dollar value
based on the average exchange rate prevailing during the accrual period.
An accrual method taxpayer will be required to recognize gain or loss upon
the receipt of interest payments in a foreign currency on a foreign currency
note as a result of fluctuations in currency exchange rates between the dates of
accrual and receipt. This "exchange gain or loss" will be equal to the U.S.
dollar value of the foreign currency payment based on the exchange rate
prevailing on the date of receipt of such payment less the includible amount.
Similarly, upon the sale, exchange or retirement of a foreign currency note, a
U.S. holder who receives proceeds in a foreign currency which are attributable
to original issue discount or, in the case of an accrual method holder, accrued
but unpaid interest, will be required to recognize exchange gain or loss. Any
exchange gain or loss will be treated as ordinary income or loss.
Purchase and Disposition of the Foreign Currency Notes
A U.S. holder's tax basis in a foreign currency note will be the U.S.
dollar value of the foreign currency amount paid for the foreign currency note
based on the exchange rate prevailing on the date of purchase of the foreign
currency note, plus the U.S. dollar value of any accrued original issue discount
on the foreign currency note that the holder has included in gross income. A
U.S. holder who converts U.S. dollars to a foreign currency and immediately uses
that currency to purchase a foreign currency note denominated in the same
currency will ordinarily not recognize exchange gain or loss in connection with
such conversion and purchase. If a U.S. holder purchases a foreign currency note
with previously owned foreign currency, the U.S. holder will recognize exchange
gain or loss in an amount equal to the difference, if any, between the U.S.
holder's tax basis in the foreign currency and the U.S. dollar fair market value
of the foreign currency note based on the exchange rate prevailing on the date
of purchase. Gain or loss will be recognized upon the sale, exchange,
redemption, or other disposition of a foreign currency note equal to the U.S.
dollar value of the foreign currency received upon such disposition less the
U.S. dollar tax basis in the foreign currency note. Gain or loss that is
recognized will be treated as ordinary income or loss to the extent it is
exchange gain or loss. Any gain or loss recognized in excess of the exchange
gain or loss will be treated as capital gain or loss.
Exchange of the Foreign Currency
Foreign currency received or accrued as interest on a foreign currency note
or on the sale, exchange, redemption, or other disposition of a foreign currency
note will have a tax basis equal to its U.S. dollar value based on the exchange
rate prevailing at the time the interest is received or accrued at the time of
the disposition. Any gain or loss recognized on a subsequent sale or other
disposition of the foreign currency will be ordinary income or loss.
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Multicurrency Notes
The treatment of multicurrency notes may be subject to special rules which
will be set forth in the applicable pricing supplement.
Variable Rate Notes
A floating rate note will generally be governed by the Treasury regulations
with respect to variable rate notes. In general, a "variable rate note" is a
debt instrument:
- with an issue price that does not exceed the sum of the noncontingent
principal payments to be made on the note by more than a specified
amount, and
- that provides for stated interest unconditionally payable at least
annually at the current value of:
(1) one or more qualified floating rates;
(2) a single fixed rate and one or more qualified floating rates;
(3) a single objective rate; or
(4) a single fixed rate and a qualified inverse floating rate.
A qualified floating rate is a rate that can reasonably be expected to
measure contemporaneous variations in the cost of newly borrowed funds.
An objective rate is a rate, other than a qualified floating rate, that
is determined using a single fixed formula and that is based on
objective financial or economic information. A qualified inverse
floating rate is a rate equal to a fixed rate minus a qualified floating
rate whose variations can reasonably be expected to reflect inversely
contemporaneous variations in the qualified floating rate. Occidental
will provide notice in the applicable pricing supplement when it
determines that a particular floating rate note will be a variable rate
note because certain types of floating rate notes will not be subject to
the rules described in this section. A variable rate note issued for a
price equal to its stated principal amount due at maturity will
generally not be subject to the original issue discount rules described
above.
A variable rate note may be subject to the rules described under the
heading "Original Issue Discount" if, among other circumstances, it is issued at
a price less than its stated principal amount due at maturity. To determine the
amount of original issue discount to be included in income, if any, the variable
rate note must be converted into a fixed rate debt instrument by substituting an
appropriate fixed rate for the variable rate or rates, and then the rules under
the heading "Original Issue Discount" must be applied. In certain circumstances,
if the interest actually accrued or paid during an accrual period is greater or
less than the interest assumed to be accrued or paid under the equivalent fixed
rate debt instrument, appropriate adjustments must be made to the original issue
discount allocable to the period.
Contingent Payment Notes
Notes issued by Occidental, such as indexed notes, may be treated as
contingent payment notes. Occidental will provide notice in the applicable
pricing supplement when it determines that a particular note will be a
contingent payment note.
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Interest on notes that are treated as contingent payment notes will accrue
under the constant yield method based upon a "projected payment schedule," to be
established by Occidental in accordance with the Treasury regulations and
reported by Occidental to holders. The projected payment schedule for the notes
will consist of all stated principal and interest payments and a projected
amount and time for each contingent interest payment. Because the yield of the
notes for United States federal income tax purposes will be determined assuming
that the projected payments are made on definite dates, a U.S. holder's income
inclusions may be accelerated in comparison to the time when payments under the
notes are in fact made. The yield, timing and amounts set forth in the projected
payment schedule are for United States federal income tax purposes only and are
not assurances by Occidental with respect to any aspect of the notes. U.S.
holders will generally be bound by the projected payment schedule. The Internal
Revenue Service can, however, disregard a projected payment schedule if it
determines the schedule to be unreasonable.
If the actual amount of a contingent interest payment differs from the
projected amount of the payment, the difference will result in either a positive
or a negative adjustment to be taken into account by a U.S. holder. These
adjustments will generally increase or decrease the amount includible in income
as interest on the notes. If the actual amount of a contingent interest payment
is greater than the projected amount of the payment, the difference will be a
positive adjustment. If the projected amount of a contingent interest payment is
greater than the actual amount of the payment, the difference will be a negative
adjustment. Positive and negative adjustments for a taxable year will be netted.
A net positive adjustment for the taxable year will be treated by the U.S.
holder as additional interest for the year. A net negative adjustment for the
taxable year will be taken into account as follows:
- first, the net negative adjustment for the taxable year will offset the
interest that would have accrued on the notes for the taxable year based
on the projected payment schedule;
- second, if the net negative adjustment exceeds the amount of interest
that accrued on the notes for the taxable year, the excess will be
treated as an ordinary loss by the holder to the extent of all prior
interest, including positive adjustments, accrued on the notes, net of
all prior negative adjustments;
- third, the excess will be treated as a negative adjustment that occurs on
the first day of the succeeding taxable year; and
- fourth, any unused net negative adjustment will reduce the amount
realized by the holder on the sale, exchange or other taxable disposition
of the notes.
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NON-U.S. HOLDERS
Under current United States federal income and estate tax law, assuming the
certification requirements described below are satisfied, and subject to the
discussion of backup withholding below:
(a) payments of interest, including any original issue discount, on the
notes to any non-U.S. holder will not be subject to United States
federal income or withholding tax, provided that:
(1) the non-U.S. holder does not actually or constructively own 10
percent or more of the total combined voting power of all classes of
stock of Occidental entitled to vote;
(2) the non-U.S. holder is not:
(i) a foreign tax exempt-organization or a foreign private
foundation for United States federal income tax purposes;
(ii) a bank receiving interest pursuant to a loan agreement entered
into in the ordinary course of its trade or business; or
(iii) a controlled foreign corporation that is related to
Occidental through stock ownership; and
(3) the interest payments are not effectively connected with the conduct
of a United States trade or business of the non-U.S. holder;
(b) a non-U.S. holder of a note will not be subject to United States
federal income tax on gain realized on the sale, exchange, redemption,
or other disposition of a note, unless:
(1) the non-U.S. holder is an individual who is present in the United
States for 183 days or more during the taxable year and certain
other requirements are met, or
(2) the gain is effectively connected with the conduct of a United
States trade or business of the non-U.S. holder;
(c) if interest on the notes is exempt from withholding of United States
federal income tax under the rules described above, the notes will not
be included in the estate of a non-U.S. holder for United States
federal estate tax purposes.
To qualify for the above exemption from withholding of interest on the
notes, a non-U.S. holder must certify that it is not a United States person by
supplying a statement that:
(a) is signed by the beneficial owner of the note under penalty of perjury;
(b) certifies that the beneficial owner is not a United States person; and
(c) provides the name and address of the beneficial owner.
This statement may be made on an Internal Revenue Service Form W-8 or Internal
Revenue Service Form W-8BEN, or a substantially similar form. In general, if a
note is held through a securities clearing organization or a financial
institution, the organization or
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institution may furnish the statement together with a copy of the beneficial
owner's statement as provided to the organization or institution.
Backup and Information Reporting
In the case of payments of interest to non-U.S. holders, current Treasury
regulations provide that the 31 percent backup withholding tax and information
reporting will not apply to the payments on which either the certification, as
described above, has been received or an exemption has otherwise been
established; provided that neither Occidental nor its payment agent has actual
knowledge that the holder is a United States person or that the conditions of
any other exemption are not in fact satisfied. Under current Treasury
regulations, these information reporting and backup withholding requirements
will, however, apply to the gross proceeds paid to a non-U.S. holder on the
disposition of the notes by or through a United States office of a United States
or foreign broker, unless the non-U.S. holder certifies to the broker under
penalties of perjury as to its name, address, and status as a foreign person or
the holder otherwise establishes an exemption. Information reporting
requirements, but not backup withholding, will also apply to a payment of the
proceeds of a disposition of the notes by or through a foreign office of a
United States broker or foreign brokers with specified types of relationships to
the United States. Neither information reporting nor backup withholding will
generally apply to a payment of the proceeds of a disposition of the notes by or
through a foreign office of a foreign broker not subject to the preceding
sentence.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be credited against the non-U.S. holder's United
States federal income tax liability and, in the event backup withholding results
in an overpayment of tax, the non-U.S. holder may claim a refund, provided the
required information is furnished to the Internal Revenue Service.
The Treasury Department promulgated final regulations regarding the
withholding and information reporting rules discussed above which regulations
are generally anticipated to be effective for payments made after December 31,
2000, subject to certain transition rules. In general, these final regulations
do not significantly alter the substantive withholding and information reporting
requirements but unify current certification procedures and forms and clarify
reliance standards. Under the final regulations, special rules apply which
permit the shifting of primary responsibility for withholding to certain
financial intermediaries acting on behalf of beneficial owners.
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PLAN OF DISTRIBUTION
Occidental is offering the notes for sale on a continuing basis to or
through the agents. The agents, individually or in a syndicate, may purchase
notes, as principal, from Occidental from time to time, for resale to investors
and other purchasers at varying prices relating to prevailing market prices at
the time of resale as determined by the applicable agent or agents, or, if so
specified in the applicable pricing supplement, for resale at a fixed public
offering price. Unless otherwise specified in an applicable pricing supplement,
any note sold to the agents as principal will be purchased by the agents at a
price equal to 100% of the principal amount of the note less a percentage of the
principal amount equal to the commission applicable to an agency sale as
described below of a note of identical maturity. If agreed to by Occidental and
the agents at the particular time, the agents may utilize their reasonable
efforts on an agency basis to solicit offers to purchase the notes at 100% of
the principal amount of the notes, unless otherwise specified in an applicable
pricing supplement. Pursuant to a distribution agreement, Occidental will pay a
commission to the agents, ranging from 0.125% to 0.750% of the principal amount
(or, in the case of an Original Issue Discount Note, the price to the public) of
a note, depending upon its stated maturity or, with respect to a note for which
the stated maturity is in excess of 30 years, a commission as agreed upon by
Occidental and the agent at the time of sale, sold through the agents.
Occidental may also sell notes directly to investors. If Occidental sells notes
directly to investors, it will not pay any commissions or discounts. In
addition, Occidental may appoint additional agents for the purpose of soliciting
offers to purchase notes or may sell to other agents acting as principal. Those
agents will be named in the applicable pricing supplement.
The agents may sell notes they have purchased from Occidental as principal
to other dealers for resale to investors, and may allow any portion of the
discount received in connection with those purchases from Occidental to those
dealers. The agents may allow, and the dealers may reallow, a discount to other
dealers. After the initial public offering of notes, the public offering price,
in the case of notes to be resold at a fixed public offering price, the
concession and the discount allowed to dealers may be changed.
Occidental reserves the right to withdraw, cancel or modify the offer made
by this prospectus supplement without notice and may reject orders, in whole or
in part, whether placed directly with Occidental or through the agents. Each
agent will have the right, in its discretion reasonably exercised, to reject in
whole or in part any offer to purchase notes received by that agent.
Unless otherwise specified in an applicable pricing supplement, payment of
the purchase price of the notes will be required to be made in immediately
available funds in U.S. dollars or the Specified Currency, as the case may be,
in The City of New York on the date of settlement.
No note will have an established trading market when issued. Unless
specified in the applicable pricing supplement, Occidental will not list the
notes on any securities exchange. The agents may from time to time purchase and
sell notes in the secondary market, but the agents are not obligated to do so,
and Occidental cannot assure you that there will be a secondary market for the
notes or liquidity in the secondary market if one develops. From time to time,
the agents may make a market in the notes, but the agents are not obligated to
do so and may discontinue any market-making activity at any time.
S-44
<PAGE> 45
The agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. Occidental has agreed to indemnify the
agents against or to make contributions relating to certain civil liabilities,
including liabilities under the Securities Act, or to contribute to payments the
agents may be required to make in respect thereof. Occidental has agreed to
reimburse the agents for certain expenses.
From time to time, Occidental and the trusts may issue and sell other
securities described in the accompanying prospectus, and the amount of notes
that Occidental may offer and sell under this prospectus supplement will be
reduced as a result of those sales.
In connection with the offering of notes purchased by the agents as
principal on a fixed price basis, the agents are permitted to engage in certain
transactions that stabilize the price of the notes. These transactions may
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the notes. If the agents create a short position in the notes in
connection with the offering, i.e., if they sell notes in an aggregate principal
amount exceeding that set forth in the applicable pricing supplement, then the
agents may reduce that short position by purchasing notes in the open market. In
general, purchases of notes for the purpose of stabilization or to reduce a
short position could cause the price of the notes to be higher than in the
absence of these purchases.
Neither Occidental nor the agents make 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 Occidental nor
the agents make any representation that the agents will engage in any of those
transactions or that those transactions, once commenced, will not be
discontinued without notice.
In the ordinary course of their respective businesses, the agents and their
respective affiliates have engaged, and may in the future engage, in commercial
banking and/or investment banking transactions with Occidental and its
affiliates.
S-45
<PAGE> 46
PROSPECTUS
$1,000,000,000
[OXY LOGO]
OCCIDENTAL PETROLEUM CORPORATION
Senior Debt Securities
Subordinated Debt Securities
Preferred Stock
Depositary Shares
OXY CAPITAL TRUST II
OXY CAPITAL TRUST III
Preferred Securities Guaranteed To The Extent Set Forth Herein By
Occidental Petroleum Corporation
- --------------------------------------------------------------------------------
We will provide the specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest.
- --------------------------------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
The date of this prospectus is June 30, 1999.
<PAGE> 47
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Forward-Looking Statements.................................. 2
About This Prospectus....................................... 3
Where You Can Find More Information......................... 4
Occidental.................................................. 5
The Trusts.................................................. 5
Use of Proceeds............................................. 6
Ratios of Earnings to Fixed Charges and Earnings to Combined
Fixed Charges and
Preferred Stock Dividends................................. 6
Description of Securities................................... 6
Description of Senior Debt Securities....................... 7
Description of Subordinated Debt Securities................. 16
Description of Preferred Stock.............................. 24
Description of Depositary Shares............................ 26
Description of Preferred Securities......................... 29
Description of Preferred Securities Guarantees.............. 35
Relationship Among Preferred Securities, Preferred
Securities Guarantees and Subordinated Debt Securities
Held by Each Trust........................................ 37
Plan of Distribution........................................ 38
Legal Opinions.............................................. 39
Experts..................................................... 39
</TABLE>
FORWARD-LOOKING STATEMENTS
This prospectus includes or incorporates by reference forward-looking
statements, including those identified by the words "estimates," "projects,"
"predicts," "believes," "expects" and similar expressions that convey the
uncertainty of future events or outcomes. These forward-looking statements are
subject to risks, uncertainties, and assumptions about Occidental that could
significantly affect expected results of operations, liquidity and cash flows,
including, among other things:
- global commodity pricing fluctuations;
- competitive pricing pressures;
- higher than expected costs including feedstocks;
- the supply and demand considerations for our products;
- any general economic recession domestically or internationally; and
- not successfully completing any development of new fields, expansion,
capital expenditure, efficiency improvement, acquisition or divestiture.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information or otherwise. In light of
these risks, uncertainties and assumptions, the forward-looking events discussed
in this prospectus or in the incorporated documents might not occur.
2
<PAGE> 48
You should rely only on the information contained or incorporated by reference
in this prospectus and any accompanying prospectus supplements. We have not
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. The information contained or
incorporated by reference in this prospectus is accurate only as of the date on
the front cover of this prospectus. Our business, financial condition, results
of operations and prospects may have changed since that date.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement Occidental and the trusts
filed with the Securities and Exchange Commission using a "shelf" registration
process. Under this shelf registration process, Occidental may sell any
combination of the senior debt securities, subordinated debt securities,
preferred stock and depositary shares and the trusts may sell preferred
securities as described in this prospectus in one or more offerings up to a
total dollar amount of $1,000,000,000 (or the equivalent thereof if any of the
securities are denominated in a currency, currency unit or composite currency
other than the U.S. dollar). This prospectus provides you with a general
description of the securities Occidental and the trusts may offer. Each time
Occidental or a trust sells securities, it will provide a prospectus supplement
and, for certain offerings, a pricing supplement, that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read
this prospectus, any prospectus supplement and any pricing supplement together
with the additional information described under the heading "Where You Can Find
More Information."
3
<PAGE> 49
WHERE YOU CAN FIND MORE INFORMATION
Occidental files annual, quarterly and special reports, proxy statements, and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C.
20549 and in New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. The SEC
also maintains an internet site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the SEC, including Occidental. Occidental's common
stock is listed and traded on the New York Stock Exchange ("NYSE"). These
reports, proxy statements and other information are also available for
inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
This prospectus is part of a registration statement filed with the SEC by
Occidental and the trusts. You may obtain the full registration statement from
the SEC as indicated above or from Occidental.
The SEC allows Occidental to "incorporate by reference" the information it files
with the SEC. This permits Occidental to disclose important information to you
by referencing these filed documents. Any information referenced this way is
considered part of this prospectus, and any information filed with the SEC
subsequent to this prospectus will automatically be deemed to update and
supersede this information. Occidental incorporates by reference the following
documents which have been filed with the SEC:
- - Annual Report on Form 10-K for the year ended December 31, 1998;
- - Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
- - Current Reports on Form 8-K, dated January 6, 1999, January 13, 1999, January
20, 1999 (Form 8-K/A), January 26, 1999, February 5, 1999 and April 20, 1999;
and
- - Description of Occidental's $3.00 Cumulative CXY-Indexed Convertible Preferred
Stock included in Amendment No. 5 to Registration Statement on Form 8-B/A
filed with the SEC on November 2, 1995.
Occidental also incorporates by reference any future filings made by Occidental
with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
of 1934 (the "Exchange Act") until our offering of securities has been
completed.
Occidental will provide without charge upon written or oral request, a copy of
any or all of the documents which are incorporated by reference to this
prospectus. Requests should be directed to Occidental Petroleum Corporation,
10889 Wilshire Boulevard, Los Angeles, California 90024, Attn: J. R. Havert,
Vice President and Treasurer; telephone: (310) 208-8800.
There are no separate financial statements of the trusts in this prospectus.
Occidental does not believe such financial statements would be helpful because:
- - The trusts are direct or indirect wholly-owned subsidiaries of Occidental,
which files consolidated financial information under the Exchange Act.
- - The trusts do not have any independent operations other than issuing the
preferred and common securities and purchasing the subordinated debt
securities.
- - Occidental guarantees the preferred securities of the trusts as described in
this prospectus.
4
<PAGE> 50
OCCIDENTAL
Occidental explores for, develops, produces and markets crude oil and natural
gas and manufactures and markets a variety of basic chemicals, including
chlorine, caustic soda and ethylene dichloride (EDC), as well as specialty
chemicals. Occidental conducts its principal operations through two
subsidiaries, Occidental Oil and Gas Corporation and Occidental Chemical
Corporation. Occidental has an interest in the vinyls intermediates business,
including polyvinyl chloride (PVC) and vinyl chloride monomer (VCM), through its
76 percent interest in the Oxy Vinyls, LP partnership. Occidental also has an
interest in the petrochemicals business through its 29.5 percent interest in the
Equistar Chemicals, LP partnership. Occidental's executive offices are located
at 10889 Wilshire Boulevard, Los Angeles, California 90024; telephone (310)
208-8800.
THE TRUSTS
Occidental created two Delaware business trusts pursuant to two Declarations of
Trust. The trusts are named Oxy Capital Trust II and Oxy Capital Trust III. As
used in this prospectus, the words "trust" or "trusts" refer to Oxy Capital
Trust II and Oxy Capital Trust III. Occidental will file an Amended and Restated
Declaration of Trust (a "Declaration") for each trust, which will state the
terms and conditions for each trust to issue and sell its preferred securities
and common securities. A form of Declaration is incorporated by reference as an
exhibit to the registration statement of which this prospectus forms a part.
Each trust will exist solely to:
- - issue and sell its preferred and common securities;
- - use the proceeds from the sale of its preferred and common securities to
purchase a series of Occidental's subordinated debt securities;
- - maintain its status as a grantor trust for United States federal income tax
purposes; and
- - engage in other activities that are necessary or incidental to these purposes.
Occidental will purchase all of the common securities of each trust. The common
securities will represent an aggregate liquidation amount equal to at least 3
percent of each trust's total capitalization. The preferred securities will
represent the remaining 97 percent of each trust's total capitalization. The
common securities will have terms substantially identical to, and will rank
equal in priority of payment with, the preferred securities. However, if
Occidental defaults on the related subordinated debt securities, then cash
distributions and liquidation, redemption and other amounts payable on the
common securities will be subordinate to the preferred securities in priority of
payment.
Occidental will guarantee the preferred securities as described later in this
prospectus.
Occidental has appointed five trustees to conduct each trust's business and
affairs:
- - The Bank of New York ("Property Trustee");
- - The Bank of New York (Delaware) ("Delaware Trustee"); and
- - Three Occidental officers ("Regular Trustees").
Only Occidental, as owner of the common securities, can remove or replace the
trustees. In addition, Occidental can increase or decrease the number of
trustees. However, the majority of trustees will always be Regular Trustees.
Occidental will pay all fees and expenses related to each trust and each
offering of the related preferred securities and will pay all
5
<PAGE> 51
ongoing costs and expenses of each trust, except that trust's obligations under
the related preferred and common securities.
The trusts will not have separate financial statements. The statements would not
be material to holders of the preferred securities because no trust will have
any independent operations. Each trust exists solely for the reasons summarized
above.
USE OF PROCEEDS
The net proceeds Occidental receives from the sale of securities offered under
this prospectus will be used for general corporate purposes, including the
retirement of outstanding debt. Each trust will use all proceeds from the sale
of the common and preferred securities to purchase subordinated debt securities
of Occidental. The prospectus supplement with respect to any offering of
securities may identify different or additional uses for the proceeds of such
offering.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth Occidental's total enterprise ratios of earnings
to fixed charges and earnings to combined fixed charges and preferred stock
dividends based on the historical results of Occidental and its subsidiaries.
For the purpose of calculating these ratios, earnings consist of income from
continuing operations before income taxes (other than foreign oil and gas taxes)
and fixed charges. Fixed charges include interest and debt expense, including
the proportionate share of interest and debt expense of 50-percent-owned equity
investments and the portion of lease rentals representative of the interest
factor.
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------- --------------------------------
1999 1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges........ (a) 2.45 1.93 1.55 2.08 1.75 (b)
Ratio of Earnings to
Combined Fixed
Charges and Preferred
Stock Dividends...... (c) 2.34 1.85 1.28 1.53 1.45 (d)
</TABLE>
(a) Earnings were inadequate to cover fixed charges by $23 million for the three
months ended March 31, 1999.
(b) Earnings were inadequate to cover fixed charges by $298 million in 1994.
(c) Earnings were inadequate to cover combined fixed charges and preferred stock
dividends by $28 million for the three months ended March 31, 1999.
(d) Earnings were inadequate to cover combined fixed charges and preferred stock
dividends by $395 million in 1994.
DESCRIPTION OF SECURITIES
This prospectus contains a summary of the senior debt securities, the
subordinated debt securities, the preferred stock, the depositary shares, the
preferred securities and the preferred securities guarantee. These summaries are
not meant to be a complete description of each security. However, this
prospectus, the accompanying prospectus supplement and the accompanying pricing
supplement, if applicable, contain the material terms and conditions for each
security. For more information please refer to (1) the indenture (the "Senior
Indenture") between Occidental and The Bank of New York, as trustee ("Senior
Indenture Trustee"), relating to issuance of each series of senior debt
securities, (2) the indenture (the "Subordinated Indenture") between Occidental
and The Bank of New York, as trustee (the "Subordinated Indenture Trustee")
relating to issuance of each series of subordinated debt securities, (3) the
certificate of designations relating to each series of preferred stock, (4) the
deposit agreement and the depositary receipts relating to offerings of
depositary shares, (5) the Declaration of each trust and (6) Occiden-
6
<PAGE> 52
tal's guarantee of the preferred securities issued by each trust (the "Preferred
Securities Guarantees"). Forms of these documents are filed with or incorporated
by reference as exhibits to the registration statement (or in the case of an
offering of preferred stock, will be filed as exhibits to the registration
statement), which includes this prospectus. Capitalized terms used in this
prospectus that are not defined will have the meanings given them in these
documents.
DESCRIPTION OF SENIOR DEBT SECURITIES
GENERAL
Below is a description of certain general terms of the senior debt securities.
The description is not complete and is subject to and qualified in its entirety
by reference to the Senior Indenture. The particular terms of a series of senior
debt securities will be described in a prospectus supplement and, if applicable,
a pricing supplement.
The senior debt securities will rank equally with all of Occidental's senior and
unsubordinated debt. The Senior Indenture does not limit the amount of senior
debt securities which Occidental may issue, nor does it limit Occidental or its
subsidiaries from issuing any other unsecured debt.
Occidental will issue the senior debt securities under the Senior Indenture. The
Senior Indenture will be qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). The Senior Indenture is filed as an exhibit
to the registration statement which includes this prospectus.
Each prospectus supplement, together with a pricing supplement, if applicable,
will describe the following terms relating to a series of senior debt
securities, as follows:
- - the title;
- - any limit on the amount that may be issued;
- - whether or not that series of senior debt securities will be issued as
registered securities, bearer securities or both;
- - the price at which that series of senior debt securities will be issued, which
may be at a discount;
- - whether or not that series of senior debt securities will be issued in global
form, the terms and who the depositary will be;
- - the maturity date(s);
- - the person to whom any interest will be payable on any registered security, if
other than the person in whose name that security is registered at the close
of business on the regular record date;
- - the annual interest rate(s), if any, (which may be fixed or variable) or the
method for determining the rate(s) and the date(s) interest will begin to
accrue, the date(s) interest will be payable and the regular record date(s)
for interest payment date(s) or the method for determining such date(s);
- - the place(s) where payments shall be payable, registered securities may be
surrendered for registration of transfer, securities may be surrendered for
exchange, and notices and demands to or upon Occidental may be served;
- - the period(s) within which, and the price(s) at which, that series of senior
debt securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed, in whole or in part, and other related terms and
provisions;
- - any mandatory or optional sinking fund provisions or any provisions for
remarketing that series of senior debt securities and other related terms and
provisions;
- - the denominations in which that series of senior debt securities will be
issued, if other than denominations of $1,000 in the case of registered
securities and any integral multi-
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<PAGE> 53
ple thereof, and in the case of bearer securities, if other than denominations
of $5,000 and $100,000;
- - the currency or currencies, including composite currencies or currency units,
in which that series of senior debt securities may be denominated or in which
payment of the principal of and interest, if any, on that series of senior
debt securities shall be payable, if other than the currency of the United
States of America, and, if so, whether that series of senior debt securities
may be satisfied and discharged other than as provided in Article Four of the
Senior Indenture;
- - if the amounts of payments of principal of and interest, if any, on that
series of senior debt securities are to be determined with reference to an
index, formula or other method, or based on a coin or currency other than that
in which that series of senior debt securities are stated to be payable, the
manner in which such amounts shall be determined and the calculation agent, if
any, with respect thereto;
- - if other than the principal amount thereof, the portion of the principal
amount of that series of senior debt securities that will be payable upon
declaration of acceleration of the maturity thereof pursuant to an event of
default;
- - if other than as defined in the Senior Indenture, the meaning of "Business
Day" when used with respect to that series of senior debt securities;
- - if that series of senior debt 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 Senior Indenture, the
forms and terms of those certificates, documents or conditions;
- - any addition to, or modification or deletion of, any event of default,
covenant of Occidental or other term or provision specified in the Senior
Indenture with respect to that series of senior debt securities; and
- - any other terms (which terms may be inconsistent with the Senior Indenture).
CONSOLIDATION, MERGER OR SALE
The Senior Indenture generally permits Occidental to merge or consolidate, or
sell, convey, transfer or otherwise dispose of its assets as an entirety or
substantially as an entirety, provided that no event of default would occur as a
result of that transaction. However, any successor or acquiror of such assets
must assume all of the obligations of Occidental under the Senior Indenture and
the senior debt securities and be organized and existing under U.S. laws.
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:
(1) Liens (as defined below) existing on the date of the Senior Indenture;
(2) 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;
(3) Liens in favor of Occidental or a Consolidated Subsidiary;
(4) Liens in favor of governmental bodies to secure progress, advance or other
payments;
8
<PAGE> 54
(5) 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
(6) any extension, renewal or refunding of any Liens referred to in the
foregoing clauses (1) through (5).
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 all
Secured Debt, together with the 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 (1) or (2) of the last sentence of
such paragraph), would not exceed 10 percent of consolidated Net Tangible Assets
(as defined below) of Occidental and its Consolidated Subsidiaries.
LIMITATIONS 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:
(1) 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;
(2) 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
(3) 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 (1)
between Occidental and a Consolidated Subsidiary or between Consolidated
Subsidiaries or (2) involving the taking back of a lease for a period, including
renewals, of not more than three years.
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
9
<PAGE> 55
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 percent. 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.
"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.
"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, (1) all Current Liabilities of such Person;
(2) 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 (3) 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 (1) developed oil or gas producing
property or (2) 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).
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<PAGE> 56
"Production Payment" means any economic interest in oil, gas or mineral reserves
which (1) entitles the holder thereof to a specified share of future production
from such reserves, free of the costs and expenses of such production, and (2)
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.
"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.
EVENTS OF DEFAULT UNDER THE SENIOR INDENTURE
The following are events of default under the Senior Indenture with respect to
any series of senior debt securities issued:
- - failure to pay interest when due and such failure continues for 30 days and
the time for payment has not been extended or deferred;
- - failure to pay the principal (or premium, if any) when due;
- - failure to observe or perform any other covenant contained in the senior debt
securities or the Senior Indenture (other than a covenant specifically
benefitting only another series of senior debt securities), and such failure
continues for 60 days after Occidental receives notice from the Senior
Indenture Trustee or holders of at least 25 percent in aggregate principal
amount of the outstanding senior debt securities of that series;
- - acceleration of more than $50,000,000 of debt of Occidental, after which the
accelerated debt is not discharged or the acceleration is not cancelled within
20 days after Occidental receives notice from the Senior Indenture Trustee or
holders of at least 25 percent in aggregate principal amount of the
outstanding senior debt securities of that series;
- - certain events of bankruptcy, insolvency or reorganization of Occidental; and
- - any other event of default specified in the prospectus supplement or pricing
supplement, if any, relating to that series of senior debt securities.
If an event of default with respect to senior debt securities of any series
occurs and is continuing, the Senior Indenture Trustee or the holders of at
least 25 percent in principal amount of the outstanding senior debt securities
of that series, by notice in writing to Occidental (and to the Senior Indenture
Trustee if notice is given by such holders), may declare the principal of (or if
such senior debt securities are discount securities, the portion of the
principal amount as specified in the applicable prospectus supplement or pricing
supplement, if any), premium, if any, and accrued interest, if any, due and
payable immediately.
The holders of a majority in aggregate principal amount of the outstanding
senior debt securities of an affected series may waive any past default or event
of default with respect to that series and its consequences, except defaults or
events of default regarding:
- - payment of principal or interest; or
- - covenants that cannot be modified or amended without the consent of each
holder of any outstanding senior debt securities affected (as described under
"-- Modification of Senior Indenture; Waiver" below).
Any waiver shall cure the corresponding default or event of default.
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Subject to the terms of the Senior Indenture, if an event of default under the
Senior Indenture shall occur and be continuing, the Senior Indenture Trustee
will be under no obligation to exercise any of its rights or powers under the
Senior Indenture at the request or direction of any of the holders of the
applicable series of senior debt securities, unless the holders have offered the
Senior Indenture Trustee reasonable security or indemnity. The holders of a
majority in principal amount of the outstanding senior debt securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Senior Indenture Trustee, or
exercising any trust or power conferred on the Senior Indenture Trustee, with
respect to the senior debt securities of that series, provided that:
- - the direction given to the Senior Indenture Trustee is not in conflict with
any law or the Senior Indenture;
- - the Senior Indenture Trustee may take any other action deemed proper by it
which is not inconsistent with that direction; and
- - the Senior Indenture Trustee has not determined that the action would be
unjustly prejudicial to the holders not involved in the proceeding.
A holder of the senior debt securities of any series will have the right to
institute a proceeding under the Senior Indenture or to appoint a receiver or
trustee, or to seek other remedies only if:
- - the holder has given written notice to the Senior Indenture Trustee of a
continuing event of default with respect to that series;
- - the holders of at least 25 percent in aggregate principal amount of the
outstanding senior debt securities of that series have made written request
to, and have offered reasonable indemnity to, the Senior Indenture Trustee to
institute the proceedings as trustee; and
- - the Senior Indenture Trustee does not institute the proceeding, and does not
receive from the holders of a majority in aggregate principal amount of the
outstanding senior debt securities of that series other conflicting
directions, within 60 days after the notice, request and offer.
These limitations do not apply to a suit instituted by a holder of senior debt
securities if Occidental defaults in the payment of the principal, premium, if
any, or interest on, the senior debt securities.
Occidental will periodically file statements with the Senior Indenture Trustee
regarding its compliance with the conditions and covenants in the Senior
Indenture.
MODIFICATION OF SENIOR INDENTURE; WAIVER
Occidental and the Senior Indenture Trustee may change the Senior Indenture
without the consent of any holders with respect to certain matters, including:
- - evidencing the succession of another person to Occidental and the assumption
by it of the covenants of Occidental in the Senior Indenture and the
corresponding series of securities;
- - adding to the covenants, agreements and obligations of Occidental for the
benefit of the holders of that series of senior debt securities, or to
surrender any right or power the Senior Indenture confers upon Occidental;
- - evidencing and providing for the acceptance of appointment under the Senior
Indenture of a successor Senior Indenture Trustee with respect to the
securities of one or more series and to add to or change any provisions of the
Senior Indenture as shall be necessary to provide for or facilitate the
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administration of the trusts by more than one Senior Indenture Trustee;
- - curing any ambiguity or correcting any inconsistency in the Senior Indenture
or making other provisions with respect to matters or questions arising under
the Senior Indenture;
- - adding, changing or eliminating any provisions of the Senior Indenture (which
addition, change or elimination may apply to one or more series of senior debt
securities), provided that the addition, change or elimination neither (a)
applies to any security of any series created prior to the execution of the
supplemental indenture that is entitled to the benefit of the provision nor
(b) modifies the rights of holders of the securities with respect to the
modified provisions;
- - securing the securities; or
- - changing anything else that does not adversely affect the interests of any
holder of senior debt securities.
In addition, under the Senior Indenture, the rights of holders of a series of
senior debt securities may be changed by Occidental and the Senior Indenture
Trustee with the written consent of the holders of at least a majority in
aggregate principal amount of the outstanding senior debt securities of each
series that is affected. However, the following changes, among other things, may
be made only with the consent of each holder of any outstanding senior debt
securities affected:
- - changing the stated maturity of such senior debt securities;
- - reducing the principal amount of a discount security payable upon declaration
of acceleration;
- - reducing the principal amount, reducing the rate of or extending the time of
payment of interest, or reducing any premium payable upon the redemption of
any of the senior debt securities;
- - changing the place or currency of payment of principal or interest, if any, on
any of the senior debt securities;
- - impairing the right to institute suit for the enforcement of any payment on or
with respect to any of the senior debt securities; and
- - modifying any of the foregoing requirements or reducing the percentage of
senior debt securities, the holders of which are required to consent to any
amendment or waiver of any covenant or past default.
FORM, EXCHANGE, AND TRANSFER
The senior debt securities of each series may be issued as registered
securities, as bearer securities (with or without coupons) or both. Unless
otherwise specified in the applicable prospectus supplement or the pricing
supplement, if any, registered securities will be issued in denominations of
$1,000 and any integral multiple thereof and bearer securities will be issued in
denominations of $5,000 and $100,000. Subject to the terms of the Senior
Indenture and the limitations applicable to global securities described in the
applicable prospectus supplement or the pricing supplement, if any, registered
securities will be exchangeable for other registered securities of the same
series, in any authorized denomination and of like tenor and aggregate principal
amount.
Subject to the terms of the Senior Indenture and the limitations applicable to
global securities set forth in the applicable prospectus supplement or pricing
supplement, if any, senior debt securities issued as registered securities may
be presented for exchange or for registration of transfer (duly endorsed or with
the form of transfer duly executed) at the office of the Security Registrar or
at the office of any transfer agent designated by
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Occidental for that purpose. Bearer securities will not be issued in exchange
for registered securities. Unless otherwise provided in the senior debt
securities to be transferred or exchanged, no service charge will be made for
any registration of transfer or exchange, but Occidental may require payment of
any taxes or other governmental charges. Occidental has appointed the Senior
Indenture Trustee as Security Registrar. Any transfer agent (in addition to the
Security Registrar) initially designated by Occidental for any senior debt
securities will be named in the applicable prospectus supplement. Occidental may
at any time designate additional transfer agents or rescind the designation of
any transfer agent or approve a change in the office through which any transfer
agent acts, except that Occidental will be required to maintain a transfer agent
in each place of payment for the senior debt securities of each series.
If the senior debt securities of any series are to be redeemed, Occidental will
not be required to:
- - issue, register the transfer of, or exchange any senior debt securities of,
that series during a period beginning at the opening of business 15 days
before any selection of senior debt securities for redemption and ending, in
the case of registered securities, at the close of business on the day of
mailing of the relevant notice of redemption and, in the case of bearer
securities, the first publication date of the notice, or if the senior debt
securities of that series are also issuable as registered securities and there
is no publication, at the close of business on the day of mailing of the
notice;
- - in the case of registered securities, register the transfer of or exchange any
senior debt securities so selected for redemption, in whole or in part, except
the unredeemed portion of any registered security being redeemed in part; or
- - in the case of bearer securities, exchange any senior debt securities so
selected for redemption, except to exchange a bearer security for a registered
security that is immediately surrendered for redemption.
GLOBAL SECURITIES
The senior debt securities of each series may be issued in whole or in part in
global form. A senior debt security in global form will be deposited with, or on
behalf of, a depositary, which will be named in an applicable prospectus
supplement or pricing supplement, if any. A global security may be issued in
either registered or bearer form and in either temporary or definitive form. A
global senior debt security may not be transferred, except as a whole, among the
depositary for that senior debt security and/or its nominees and/or successors.
If any senior debt securities of a series are issuable as global securities, the
applicable prospectus supplement or pricing supplement, if any, will describe
any circumstances when beneficial owners of interest in that global security may
exchange their interests for definitive senior debt securities of like series
and tenor and principal amount in any authorized form and denomination, the
manner of payment of principal of and interest, if any, on that global senior
debt security and the specific terms of the depositary arrangement with respect
to that global senior debt security.
DISCHARGE
Unless otherwise indicated in an applicable prospectus supplement or pricing
supplement, if any, Occidental may terminate at any time its obligations under
the Senior Indenture with respect to any series of senior debt securities by
(1)(a) delivering all of the outstanding securities of that series to the Senior
Indenture Trustee to be cancelled or
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(b) depositing with the Senior Indenture Trustee funds or non-callable United
States government obligations sufficient to pay all remaining principal and
interest on the series of senior debt securities and (2) complying with selected
other provisions of the Senior Indenture.
If Occidental elects to satisfy its obligations by depositing United States
obligations as described above ("discharge"), that election under present law is
likely to be treated as a redemption of the senior debt securities of that
series prior to maturity in exchange for the property deposited in trust. If so,
each holder would generally recognize, at the time of discharge, gain or loss
for United States federal income tax purposes measured by the difference between
(1) 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 (unless attributable
to accrued interest) and (2) the holder's tax basis in the senior debt
securities deemed surrendered. After the discharge, 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 senior debt security would not receive cash (except
for current payments of interest on that senior debt security) until the
maturity or earlier redemption of that senior debt security. United States
federal income tax treatment of this nature could affect the purchase price that
a holder would receive upon the sale of the senior debt securities.
INFORMATION CONCERNING THE SENIOR INDENTURE TRUSTEE
The Senior Indenture Trustee, other than during the occurrence and continuance
of an event of default under the Senior Indenture, undertakes to perform only
those duties as are specifically set forth in the Senior Indenture and, upon an
event of default under the Senior Indenture, must use the same degree of care as
a prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the Senior Indenture Trustee is under no obligation
to exercise any of the powers given it by the Senior Indenture at the request of
any holder of senior debt securities unless it is offered reasonable security
and indemnity by that holder against the costs, expenses and liabilities that it
might incur. The Senior Indenture Trustee is not required to spend or risk its
own money or otherwise become financially liable while performing its duties
unless it reasonably believes that it will be repaid or receive adequate
indemnity.
The Bank of New York is a participating lender under one of Occidental's
revolving credit agreements, provides commercial banking services to Occidental
and its affiliates and acts as the property trustee, preferred securities
guarantee trustee and (through an affiliate) Delaware trustee with respect to an
issue of trust preferred securities issued by an affiliate of Occidental. The
Bank of New York is the Senior Indenture Trustee and will also act as the
Subordinated Indenture Trustee, the Property Trustee and the Preferred
Securities Guarantee Trustee. In addition, an affiliate of The Bank of New York
will act as the Delaware Trustee under each trust. However, if The Bank of New
York acquires any conflicting interest when an event of default is pending, it
must (with certain exceptions) eliminate the conflict or resign.
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PAYMENT AND PAYMENT AGENTS
Unless otherwise indicated in the applicable prospectus supplement or pricing
supplement, if any, payment of the interest on any senior debt securities (other
than bearer securities) on any interest payment date will be made to the person
in whose name those debt securities (or one or more predecessor securities) are
registered at the close of business on the regular record date for the interest.
Principal of and any premium and interest on the senior debt securities (other
than bearer securities) of a particular series will be payable at the office of
the paying agents that Occidental designates, except that, unless otherwise
indicated in the applicable prospectus supplement or pricing supplement, if any,
interest payments may be made by wire transfer or by check mailed to the holder.
Unless otherwise indicated in the applicable prospectus supplement or pricing
supplement, if any, the corporate trust office of the Senior Indenture Trustee
in The City of New York will be designated as sole paying agent for payments
with respect to senior debt securities of each series. Any other paying agents
initially designated by Occidental for the senior debt securities of a
particular series will be named in the applicable prospectus supplement or
pricing supplement, if any. Occidental will be required to maintain a paying
agent in each place of payment for the senior debt securities of a particular
series.
Unless otherwise indicated in an applicable prospectus supplement or pricing
supplement, if any, 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 or pricing
supplement, if any, 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 a paying agent outside the United States as Occidental may designate,
or by check mailed to any address or by transfer to an account maintained by the
payee outside the United States. Unless otherwise indicated in an applicable
prospectus supplement or pricing supplement, if any, any payment of an
installment of interest on any bearer security will be made only if the coupon
relating to the interest installment is surrendered.
All moneys that Occidental pays to a paying agent or the Senior Indenture
Trustee for the payment of the principal of or any premium or interest on any
senior debt security which remain unclaimed at the end of two years after that
principal, premium or interest has become due and payable will be repaid to
Occidental, and the holder of the security thereafter may look only to
Occidental for payment thereof.
GOVERNING LAW
The Senior Indenture and senior debt securities will be governed by and
construed in accordance with the laws of the State of New York, except to the
extent that the Trust Indenture Act shall be applicable.
DESCRIPTION OF SUBORDINATED DEBT SECURITIES
GENERAL
Occidental may sell one or more series of subordinated debt securities pursuant
to this prospectus, including one series to each trust.
Below is a description of certain general terms of the subordinated debt
securities. The description is not complete and is subject to and qualified in
its entirety by reference to the Subordinated Indenture. The particular terms of
a series of subordinated debt securities will be described in a prospectus
supplement and, if applicable, a pricing supplement.
Each series of subordinated debt securities will be unsecured and will be
subordinate and junior in priority of payment to certain of
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Occidental's other indebtedness to the extent described in a prospectus
supplement. The Subordinated Indenture does not limit the amount of subordinated
debt securities which Occidental may issue, nor does it limit Occidental or its
subsidiaries from issuing any other secured or unsecured debt.
Occidental will issue the subordinated debt securities under the Subordinated
Indenture. The Subordinated Indenture will be qualified under the Trust
Indenture Act. The form of Subordinated Indenture is filed as an exhibit to the
registration statement which includes this prospectus.
Each prospectus supplement, together with a pricing supplement, if applicable,
will describe the following terms relating to a series of subordinated debt
securities, as follows:
- - the title;
- - any limit on the amount that may be issued;
- - whether or not that series of subordinated debt securities will be issued as
registered securities, bearer securities or both;
- - the price at which that series of subordinated debt securities will be issued,
which may be at a discount;
- - whether or not that series of subordinated debt securities will be issued in
global form, the terms and who the depositary will be;
- - the maturity date(s);
- - the person to whom any interest will be payable on any registered security, if
other than the person in whose name that security is registered at the close
of business on the regular record date;
- - the annual interest rate(s), if any, (which may be fixed or variable) or the
method for determining the rate(s) and the date(s) interest will begin to
accrue, the date(s) interest will be payable and the regular record date(s)
for interest payment date(s) or the method for determining such date(s);
- - the place(s) where payments shall be payable, registered securities may be
surrendered for registration of transfer, securities may be surrendered for
exchange, and notices and demands to or upon Occidental may be served;
- - the period(s) within which, and the price(s) at which, that series of
subordinated debt securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed, in whole or in part, and other related
terms and provisions;
- - any mandatory or optional sinking fund provisions or any provisions for
remarketing that series of subordinated debt securities and other related
terms and provisions;
- - the denominations in which that series of subordinated debt securities will be
issued, if other than denominations of $1,000 in the case of registered
securities and any integral multiple thereof, and in the case of bearer
securities, if other than denominations of $5,000 and $100,000;
- - the currency or currencies, including composite currencies or currency units,
in which that series of subordinated debt securities may be denominated or in
which payment of the principal of and interest, if any, on that series of
subordinated debt securities shall be payable, if other than the currency of
the United States of America, and, if so, whether that series of subordinated
debt securities may be satisfied and discharged other than as provided in
Article Four of the Subordinated Indenture;
- - if the amounts of payments of principal of and interest, if any, on that
series of subordinated debt securities are to be determined with reference to
an index, formula or other method, or based on a
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coin or currency other than that in which that series of subordinated debt
securities are stated to be payable, the manner in which such amounts shall be
determined and the calculation agent, if any, with respect thereto;
- - if other than the principal amount thereof, the portion of the principal
amount of that series of subordinated debt securities that will be payable
upon declaration of acceleration of the maturity thereof pursuant to an event
of default;
- - if other than as defined in the Subordinated Indenture, the meaning of
"Business Day" when used with respect to that series of subordinated debt
securities;
- - if that series of subordinated debt 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
Subordinated Indenture, the forms and terms of those certificates, documents
or conditions;
- - the right, if any, to extend the interest payment periods and the duration of
the extensions;
- - the terms, if any, pursuant to which any series of subordinated debt
securities will be subordinate to any of Occidental's debt;
- - any addition to, or modification or deletion of, any event of default,
covenant of Occidental or other term or provision specified in the
Subordinated Indenture with respect to that series of subordinated debt
securities; and
- - any other terms (which terms may be inconsistent with the Subordinated
Indenture).
CONSOLIDATION, MERGER OR SALE
The Subordinated Indenture generally permits Occidental to merge or consolidate,
or sell, convey, transfer or otherwise dispose of its assets as an entirety or
substantially as an entirety, provided that no event of default would occur as a
result of that transaction. However, any successor or acquiror of such assets
must assume all of the obligations of Occidental under the Subordinated
Indenture and the subordinated debt securities and be organized and existing
under U.S. laws.
EVENTS OF DEFAULT UNDER THE SUBORDINATED INDENTURE
The following are events of default under the Subordinated Indenture with
respect to any series of subordinated debt securities issued:
- - failure to pay interest when due and such failure continues for 30 days and
the time for payment has not been extended or deferred;
- - failure to pay the principal (or premium, if any) when due;
- - failure to observe or perform any other covenant contained in the subordinated
debt securities or the Subordinated Indenture (other than a covenant
specifically benefitting only another series of subordinated debt securities),
and such failure continues for 90 days after Occidental receives notice from
the Subordinated Indenture Trustee or holders of at least 25 percent in
aggregate principal amount of the outstanding subordinated debt securities of
that series;
- - certain events of bankruptcy, insolvency or reorganization of Occidental;
- - if that series of subordinated debt securities are held by a trust, the
voluntary or involuntary dissolution, winding up or termination of the trust
that owns the series
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of subordinated debt securities, except in connection with:
(1) the distribution of that series of subordinated debt securities to holders
of preferred and common securities of the trust;
(2) the redemption of all of the preferred and common securities of the trust;
or
(3) mergers, consolidations or amalgamations permitted by the Declaration of
the trust; and
- - any other event of default specified in the prospectus supplement or pricing
supplement, if any, relating to that series of subordinated debt securities.
If an event of default with respect to subordinated debt securities of any
series occurs and is continuing, the Subordinated Indenture Trustee or the
holders of at least 25 percent in aggregate principal amount of the outstanding
subordinated debt securities of that series, by notice in writing to Occidental
(and to the Subordinated Indenture Trustee if notice is given by such holders),
may declare the principal of (or if such subordinated debt securities are
discount securities, the portion of the principal amount as specified in the
applicable prospectus supplement or pricing supplement, if any), premium, if
any, and accrued interest, if any, due and payable immediately.
The holders of a majority in aggregate principal amount of the outstanding
subordinated debt securities of an affected series (or if that series of
subordinated debt securities are held by a trust, the holders of at least a
majority in aggregate liquidation amount of the trust's preferred securities)
may waive any past default or event of default with respect to that series and
its consequences, except defaults or events of default regarding:
- - payment of principal or interest; or
- - covenants that cannot be modified or amended without the consent of each
holder of any outstanding subordinated debt securities affected (as described
under "-- Modification of Subordinated Indenture; Waiver" below).
Any waiver shall cure the corresponding default or event of default.
If the subordinated debt securities of any series are held by a trust, and a
Declaration Event of Default (as defined under "Description of Preferred
Securities -- Declaration Events of Default" below) has occurred and is
attributable to Occidental's failure to pay principal, premium, if any, or
interest on, those subordinated debt securities, then each holder of the
preferred securities of the trust may sue Occidental, or seek other remedies to
force payment to the holder of the principal of, premium, if any, or interest
on, those subordinated debt securities having a principal amount equal to the
aggregate liquidation amount of the preferred securities held by the holder.
Subject to the terms of the Subordinated Indenture, if an event of default under
the Subordinated Indenture shall occur and be continuing, the Subordinated
Indenture Trustee will be under no obligation to exercise any of its rights or
powers under the Subordinated Indenture at the request or direction of any of
the holders of the applicable series of subordinated debt securities, unless the
holders have offered the Subordinated Indenture Trustee reasonable security or
indemnity. The holders of a majority in principal amount of the outstanding
subordinated debt securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Subordinated Indenture Trustee, or exercising any trust or power conferred
on the Subordinated Indenture Trustee, with respect to the
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subordinated debt securities of that series, provided that:
- - the direction given to the Subordinated Indenture Trustee is not in conflict
with any law or the Subordinated Indenture;
- - the Subordinated Indenture Trustee may take any other action deemed proper by
it which is not inconsistent with that direction; and
- - the Subordinated Indenture Trustee has not determined that the action would be
unjustly prejudicial to the holders not involved in the proceeding.
A holder of the subordinated debt securities of any series will have the right
to institute a proceeding under the Subordinated Indenture or to appoint a
receiver or trustee, or to seek other remedies only if:
- - the holder has given written notice to the Subordinated Indenture Trustee of a
continuing event of default with respect to that series;
- - the holders of at least 25 percent in aggregate principal amount of the
outstanding subordinated debt securities of that series have made written
request to, and have offered reasonable indemnity to, the Subordinated
Indenture Trustee to institute the proceedings as trustee; and
- - the Subordinated Indenture Trustee does not institute the proceeding, and does
not receive from the holders of a majority in aggregate principal amount of
the outstanding subordinated debt securities of that series other conflicting
directions, within 60 days after the notice, request and offer.
These limitations do not apply to a suit instituted by a holder of subordinated
debt securities if Occidental defaults in the payment of the principal, premium,
if any, or interest on, the subordinated debt securities.
Occidental will periodically file statements with the Subordinated Indenture
Trustee regarding its compliance with the conditions and covenants in the
Subordinated Indenture.
MODIFICATION OF SUBORDINATED INDENTURE; WAIVER
Occidental and the Subordinated Indenture Trustee may change the Subordinated
Indenture without the consent of any holders with respect to certain matters,
including:
- - evidencing the succession of another person to Occidental and the assumption
by it of the covenants of Occidental in the Subordinated Indenture and the
corresponding series of securities;
- - adding to the covenants, agreements and obligations of Occidental for the
benefit of the holders of that series of subordinated debt securities, or to
surrender any right or power the Subordinated Indenture confers upon
Occidental;
- - evidencing and providing for the acceptance of appointment under the
Subordinated Indenture of a successor Subordinated Indenture Trustee with
respect to the securities of one or more series and to add to or change any
provision of the Subordinated Indenture as shall be necessary to provide for
or facilitate the administration of the trusts by more than one Subordinated
Indenture Trustee;
- - curing any ambiguity or correcting any inconsistency in the Subordinated
Indenture or making other provisions with respect to matters or questions
arising under the Subordinated Indenture;
- - adding, changing or eliminating any provisions of the Subordinated Indenture
(which addition, change or elimination may apply to one or more series of
subordinated debt securities), provided that the addition, change or
elimination neither (a) applies to
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any security of any series created prior to the execution of the supplemental
indenture that is entitled to the benefit of the provision nor (b) modifies
the rights of holders of the securities with respect to the modified
provisions;
- - securing the securities; or
- - changing anything else that does not adversely affect the interests of any
holder of subordinated debt securities.
In addition, under the Subordinated Indenture, the rights of holders of a series
of subordinated debt securities may be changed by Occidental and the
Subordinated Indenture Trustee with the written consent of the holders of at
least a majority in aggregate principal amount of the outstanding subordinated
debt securities of each series that is affected. However, the following changes,
among other things, may only be made with the consent of each holder of any
outstanding subordinated debt securities affected:
- - changing the stated maturity of such subordinated debt securities;
- - reducing the principal amount of a discount security payable upon declaration
of acceleration;
- - reducing the principal amount, reducing the rate of or extending the time of
payment of interest, or reducing any premium payable upon the redemption of
any of the subordinated debt securities;
- - changing the place or currency of payment of principal or interest, if any, on
any of the subordinated debt securities;
- - impairing the right to institute suit for the enforcement of any payment on or
with respect to any of the subordinated debt securities; and
- - modifying any of the foregoing requirements or reducing the percentage of
subordinated debt securities, the holders of which are required to consent to
any amendment or waiver of any covenant or past default.
If the consent of the Property Trustee of a trust, as the sole holder of
subordinated debt securities held by the trust, is required to consent to any
amendment, modification or termination of the Subordinated Indenture, the
Property Trustee will request directions from the holders of the preferred
securities of the applicable trust.
FORM, EXCHANGE, AND TRANSFER
The subordinated debt securities of each series may be issued as registered
securities, as bearer securities (with or without coupons) or both. Unless
otherwise specified in the applicable prospectus supplement or the pricing
supplement, if any, registered securities will be issued in denominations of
$1,000 and any integral multiple thereof and bearer securities will be issued in
denominations of $5,000 and $100,000. Subject to the terms of the Subordinated
Indenture and the limitations applicable to global securities described in the
applicable prospectus supplement or the pricing supplement, if any, registered
securities will be exchangeable for other registered securities of the same
series, in any authorized denomination and of like tenor and aggregate principal
amount.
Subject to the terms of the Subordinated Indenture and the limitations
applicable to global securities set forth in the applicable prospectus
supplement or pricing supplement, if any, subordinated debt securities issued as
registered securities may be presented for exchange or for registration of
transfer (duly endorsed or with the form of transfer duly executed) at the
office of the Security Registrar or at the office of any transfer agent
designated by Occidental for that purpose. Bearer securities will not be issued
in exchange for registered securities. Unless other-
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wise provided in the subordinated debt securities to be transferred or
exchanged, no service charge will be made for any registration of transfer or
exchange, but Occidental may require payment of any taxes or other governmental
charges. Occidental has appointed the Subordinated Indenture Trustee as Security
Registrar. Any transfer agent (in addition to the Security Registrar) initially
designated by Occidental for any subordinated debt securities will be named in
the applicable prospectus supplement. Occidental may at any time designate
additional transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent acts, except
that Occidental will be required to maintain a transfer agent in each place of
payment for the subordinated debt securities of each series.
If the subordinated debt securities of any series are to be redeemed, Occidental
will not be required to:
- - issue, register the transfer of, or exchange any subordinated debt securities
of, that series during a period beginning at the opening of business 15 days
before any selection of subordinated debt securities for redemption and
ending, in the case of registered securities, at the close of business on the
day of mailing of the relevant notice of redemption and, in the case of bearer
securities, the first publication date of the notice, or if the subordinated
debt securities of that series are also issuable as registered securities and
there is no publication, at the close of business on the day of mailing of the
notice;
- - in the case of registered securities, register the transfer of or exchange any
subordinated debt securities so selected for redemption, in whole or in part,
except the unredeemed portion of any registered security being redeemed in
part; or
- - in the case of bearer securities, exchange any subordinated debt securities so
selected for redemption, except to exchange a bearer security for a registered
security that is immediately surrendered for redemption.
GLOBAL SECURITIES
The subordinated debt securities of each series may be issued in whole or in
part in global form. A subordinated debt security in global form will be
deposited with, or on behalf of, a depositary, which will be named in an
applicable prospectus supplement or pricing supplement, if any. A global
security may be issued in either registered or bearer form and in either
temporary or definitive form. A global subordinated debt security may not be
transferred, except as a whole among the depositary for those subordinated debt
securities and/or its nominees and/or successors. If any subordinated debt
securities of a series are issuable as global securities, the applicable
prospectus supplement or pricing supplement, if any, will describe any
circumstances when beneficial owners of interests in that global security may
exchange their interests for definitive subordinated debt securities of like
series and tenor and principal amount in any authorized form and denomination,
the manner of payment of principal of and interest, if any, on that global
subordinated debt security and the specific terms of the depositary arrangement
with respect to that global subordinated debt security.
DISCHARGE
Unless otherwise indicated in an applicable prospectus supplement or pricing
supplement, if any, Occidental may terminate at any time its obligations under
the Subordinated Indenture with respect to any series of subordinated debt
securities by (1)(a) delivering all of the outstanding securities of that series
to the Subordinated Indenture Trustee to be cancelled
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or (b) depositing with the Subordinated Indenture Trustee funds or non-callable
United States government obligations sufficient to pay all remaining principal
and interest on the series of subordinated debt securities and (2) complying
with selected other provisions of the Subordinated Indenture.
If Occidental elects to satisfy its obligations by depositing United States
obligations as described above ("discharge"), that election under present law is
likely to be treated as a redemption of the subordinated debt securities of that
series prior to maturity in exchange for the property deposited in trust. If so,
each holder would generally recognize, at the time of discharge, gain or loss
for United States federal income tax purposes measured by the difference between
(1) 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 (unless attributable
to accrued interest) and (2) the holder's tax basis in the subordinated debt
securities deemed surrendered. After the discharge, 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 subordinated debt security would not receive cash
(except for current payments of interest on that subordinated debt security)
until the maturity or earlier redemption of that subordinated debt security.
United States federal income tax treatment of this nature could affect the
purchase price that a holder would receive upon the sale of the subordinated
debt securities.
INFORMATION CONCERNING THE SUBORDINATED INDENTURE TRUSTEE
The Subordinated Indenture Trustee, other than during the occurrence and
continuance of an event of default under the Subordinated Indenture, undertakes
to perform only those duties as are specifically set forth in the Subordinated
Indenture and, upon an event of default under the Subordinated Indenture, must
use the same degree of care as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Subordinated
Indenture Trustee is under no obligation to exercise any of the powers given it
by the Subordinated Indenture at the request of any holder of subordinated debt
securities unless it is offered reasonable security and indemnity by that holder
against the costs, expenses and liabilities that it might incur. The
Subordinated Indenture Trustee is not required to spend or risk its own money or
otherwise become financially liable while performing its duties unless it
reasonably believes that it will be repaid or receive adequate indemnity.
The Bank of New York is a participating lender under one of Occidental's
revolving credit agreements, provides commercial banking services to Occidental
and its affiliates and acts as the property trustee, preferred securities
guarantee trustee and (through an affiliate) the Delaware trustee with respect
to an issue of trust preferred securities issued by an affiliate of Occidental.
The Bank of New York is the Senior Indenture Trustee and will also act as the
Subordinated Indenture Trustee, the Property Trustee and the Preferred
Securities Guarantee Trustee. In addition, an affiliate of The Bank of New York
will act as the Delaware Trustee under each trust. However, if The Bank of New
York acquires any conflicting interest when an event of default is pending, it
must (with certain exceptions) eliminate the conflict or resign.
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PAYMENT AND PAYMENT AGENTS
Unless otherwise indicated in the applicable prospectus supplement or pricing
supplement, if any, payment of the interest on any subordinated debt securities
(other than bearer securities) on any interest payment date will be made to the
person in whose name those subordinated debt securities (or one or more
predecessor securities) are registered at the close of business on the regular
record date for the interest.
Principal of and any premium and interest on the subordinated debt securities
(other than bearer securities) of a particular series will be payable at the
office of the paying agents that Occidental designates, except that, unless
otherwise indicated in the applicable prospectus supplement or pricing
supplement, if any, interest payments may be made by wire transfer or by check
mailed to the holder. Unless otherwise indicated in the applicable prospectus
supplement or pricing supplement, if any, the corporate trust office of the
Subordinated Indenture Trustee in The City of New York will be designated as
sole paying agent for payments with respect to subordinated debt securities of
each series. Any other paying agents initially designated by Occidental for the
subordinated debt securities of a particular series will be named in the
applicable prospectus supplement or pricing supplement, if any. Occidental will
be required to maintain a paying agent in each place of payment for the
subordinated debt securities of a particular series.
Unless otherwise indicated in the applicable prospectus supplement or pricing
supplement, if any, interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Unless otherwise indicated in an applicable prospectus supplement or pricing
supplement, if any, 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 a paying agent outside the United States as Occidental may designate,
or by check mailed to any address or by transfer to an account maintained by the
payee outside the United States. Unless otherwise indicated in an applicable
prospectus supplement or pricing supplement, if any, any payment of an
installment of interest on any bearer security will be made only if the coupon
relating to the interest installment is surrendered.
All moneys that Occidental pays to a paying agent or the Subordinated Indenture
Trustee for the payment of the principal of or any premium or interest on any
subordinated debt securities which remain unclaimed at the end of two years
after that principal, premium or interest has become due and payable will be
repaid to Occidental, and the holder of the security thereafter may look only to
Occidental for payment thereof.
GOVERNING LAW
The Subordinated Indenture and subordinated debt securities will be governed by
and construed in accordance with the laws of the State of New York except to the
extent that the Trust Indenture Act shall be applicable.
DESCRIPTION OF PREFERRED STOCK
GENERAL
Occidental's Restated Certificate of Incorporation, as amended, authorizes
Occidental's Board of Directors, without further stockholder action, to provide
for the issuance of up to 50,000,000 shares of preferred stock, par value $1.00
per share, in one or more series, and to fix the designations, terms, and
relative rights and preferences, including the dividend rate, voting rights,
conversion rights, redemption and sinking fund provisions and liquidation values
of each of these series. Occidental may amend from time to time its restated
certificate to increase the number of authorized shares of preferred stock. Any
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such amendment would require the approval of the holders of a majority of
Occidental's stock entitled to vote. As of the date of this prospectus,
Occidental has 4,762,294 shares of $3.00 Cumulative CXY-Indexed Convertible
Preferred Stock outstanding.
The particular terms of any series of preferred stock that Occidental offers
under this prospectus will be described in the applicable prospectus supplement
relating to that series of preferred stock. Those terms may include:
- - the title and liquidation preference per share of the preferred stock and the
number of shares offered;
- - the purchase price of the preferred stock;
- - the dividend rate (or method of calculation), the dates on which dividends
will be paid, whether dividends shall be cumulative and, if so, the date from
which dividends will begin to accumulate;
- - any redemption or sinking fund provisions of the preferred stock;
- - any conversion provisions of the preferred stock (which will not include
conversion into common stock);
- - the voting rights, if any, of the preferred stock; and
- - any additional dividend, liquidation, redemption, sinking fund and other
rights, preferences, privileges, limitations and restrictions of the preferred
stock.
If the terms of any series of preferred stock being offered differ from the
terms set forth in this prospectus, those terms will also be disclosed in the
applicable prospectus supplement relating to that series of preferred stock. The
summary in this prospectus is not complete. You should refer to the certificate
of designations establishing a particular series of preferred stock which will
be filed with the Secretary of State of the State of Delaware and the SEC in
connection with the offering of the preferred stock.
The preferred stock will, when issued, be fully paid and nonassessable.
DIVIDEND RIGHTS
The preferred stock will be preferred over the common stock as to payment of
dividends. Before any dividends or distributions (other than dividends or
distributions payable in common stock or other stock ranking junior to that
series of preferred stock as to dividends and upon liquidation) on the common
stock or other stock ranking junior to that series of preferred stock as to
dividends and upon liquidation shall be declared and set apart for payment or
paid, the holders of shares of each series of preferred stock (unless otherwise
set forth in the applicable prospectus supplement) will be entitled to receive
dividends when, as and if declared by Occidental's Board of Directors or, if
dividends are cumulative, full cumulative dividends for the current and all
prior dividend periods. Occidental will pay those dividends either in cash,
shares of preferred stock or otherwise, at the rate and on the date or dates set
forth in the applicable prospectus supplement. With respect to each series of
preferred stock that has cumulative dividends, the dividends on each share of
the series will be cumulative from the date of issue of the share unless some
other date is set forth in the prospectus supplement relating to the series.
Accruals of dividends will not bear interest. The applicable prospectus
supplement will indicate the relative ranking of the particular series of the
preferred stock as to the payment of dividends, as compared with then existing
and future series of preferred stock.
RIGHTS UPON LIQUIDATION
The preferred stock of each series will be preferred over the common stock and
other
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stock ranking junior to that series of preferred stock as to assets so that the
holders of that series of preferred stock (unless otherwise set forth in the
applicable prospectus supplement) will be entitled to be paid, upon Occidental's
voluntary or involuntary liquidation, dissolution or winding up and before any
distribution is made to the holders of common stock and other stock ranking
junior to that series of preferred stock, the amount set forth in the applicable
prospectus supplement. However, in this case the holders of preferred stock of
that series will not be entitled to any other or further payment. If upon any
liquidation, dissolution or winding up Occidental's net assets are insufficient
to permit the payment in full of the respective amounts to which the holders of
all outstanding preferred stock are entitled, Occidental's entire remaining net
assets will be distributed among the holders of each series of preferred stock
in amounts proportional to the full amounts to which the holders of each series
are entitled, subject to any provisions of any series of preferred stock that
rank it junior or senior to other series of preferred stock upon liquidation.
The applicable prospectus supplement will indicate the relative ranking of the
particular series of the preferred stock upon liquidation, as compared with then
existing and future series of preferred stock.
REDEMPTION
The shares of any series of preferred stock will be redeemable to the extent set
forth in the prospectus supplement relating to the series.
VOTING RIGHTS
Except as indicated in the applicable prospectus supplement or as otherwise from
time to time required by law, the holders of preferred stock will have no voting
rights.
CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION AND BY-LAWS
The Restated Certificate of Incorporation, as amended, and By-laws of Occidental
contain certain provisions which may have the effect of delaying, deferring or
preventing a change of control of Occidental. The By-laws limit the ability of
stockholders to change the number of directors. Only the Board of Directors or
the Chairman of the Board of Directors may call a special meeting of our
stockholders, and any action required or permitted to be taken by the
stockholders of Occidental must be effected at an annual or special meeting of
stockholders of Occidental and may not be effected by any consent in writing of
such stockholders. The By-laws of Occidental contain certain requirements
concerning advance notice of (i) nominations by stockholders of persons for
election to the Board of Directors and (ii) other matters introduced by
stockholders at annual meetings. In addition, the Board of Directors generally
has the authority, without further action by stockholders, to fix the relative
powers, preferences and rights of the unissued shares of preferred stock of
Occidental. Provisions which could discourage an unsolicited tender offer or
takeover proposal, such as extraordinary voting, dividend, redemption or
conversion rights, could be included in a series of preferred stock.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
Occidental may elect to offer fractional shares of preferred stock of a series,
rather than full shares of preferred stock. Occidental will issue to the public
receipts for depositary shares, and each of these depositary shares will
represent a fraction of a share of a particular series of preferred stock. The
fraction of a share of preferred stock represented
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by each depositary share will be set forth in the applicable prospectus
supplement.
The shares of any series of preferred stock underlying the depositary shares
will be deposited under a deposit agreement between Occidental and a bank or
trust company selected by Occidental. The depositary will have its principal
office in the United States and a combined capital and surplus of at least
$50,000,000. Subject to the terms of the deposit agreement, each holder of a
depositary share will be entitled, in proportion to the applicable fraction of a
share of preferred stock underlying that depositary share, to all the rights and
preferences of the preferred stock underlying that depositary share. Those
rights include dividend, voting, redemption and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued pursuant
to the deposit agreement. Occidental will distribute depositary receipts to
those persons purchasing the fractional shares of preferred stock of a series
underlying the depositary shares, in accordance with the terms of the offering.
Occidental will file copies of the forms of deposit agreement and depositary
receipt as exhibits to the registration statement. The following summary of the
deposit agreement, the depositary shares and the depositary receipts is not
complete and is subject to and qualified in its entirety by reference to the
forms of the deposit agreement and depositary receipts that Occidental will file
with the SEC in connection with the offering of the specific depositary shares.
Pending the preparation of definitive engraved depositary receipts, the
depositary may, upon Occidental's written order, issue temporary depositary
receipts substantially identical to the definitive depositary receipts but not
in definitive form. These temporary depositary receipts entitle their holders to
all the rights of definitive depositary receipts which Occidental will prepare
without unreasonable delay. Temporary depositary receipts will then be
exchangeable for definitive depositary receipts at Occidental's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash distributions
received with respect to the applicable series of preferred stock to the record
holders of depositary shares relating to the preferred stock of that series in
proportion to the number of depositary shares owned by those holders.
If there is a distribution other than in cash, the depositary will distribute
property received by it to the record holders of depositary shares that are
entitled to receive the distribution, unless the depositary determines that the
distribution cannot be made proportionately or it is not feasible to make the
distribution. If this occurs, the depositary may, with Occidental's approval,
sell the property and distribute the net proceeds from the sale to the
applicable holders or adopt another method of distribution as it deems
equitable.
CONVERSION OR EXCHANGE
If a series of preferred stock represented by depositary shares is subject to
provisions relating to conversion or exchange as set forth in the applicable
prospectus supplement, each holder of the related depositary shares will have
the right or obligation to convert or exchange depositary shares in accordance
with its terms.
REDEMPTION OF DEPOSITARY SHARES
If a series of preferred stock represented by depositary shares is subject to
redemption, the depositary shares will be redeemed from the proceeds received by
the depositary resulting from the redemption, in whole or in part, of that
series of preferred stock held by the depositary. The redemption price per
deposi-
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tary share will be equal to the applicable fraction of the redemption price per
share payable with respect to that series of the preferred stock. Whenever
Occidental redeems shares of preferred stock that are held by the depositary,
the depositary will redeem, as of the same redemption date, the number of
depositary shares representing the shares of preferred stock so redeemed. If
fewer than all the depositary shares are to be redeemed, the depositary shares
to be redeemed will be selected by lot or pro rata as may be determined by
Occidental. The rights of holders of depositary shares after the date fixed for
redemption will be described in the applicable prospectus supplement.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the preferred
stock are entitled to vote, the depositary will mail the information contained
in the notice to the record holders of the depositary shares underlying the
preferred stock. Each record holder of the depositary shares on the record date
(which will be the same date as the record date for the preferred stock) will be
entitled to instruct the depositary as to the exercise of the voting rights
pertaining to the amount of the preferred stock represented by that holder's
depositary shares. The depositary will then try, as far as practicable, to vote
the number of shares of preferred stock underlying those depositary shares in
accordance with the instructions. Occidental will agree to take all reasonable
actions which may be deemed necessary by the depositary to enable the depositary
to do so. The depositary will not vote the shares of preferred stock to the
extent it does not receive specific instructions from the holders of depositary
shares underlying the preferred stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between Occidental and the depositary. However, any amendment which materially
and adversely alters the rights of the holders of depositary shares will not be
effective unless the amendment has been approved by the holders of at least a
majority of the depositary shares then outstanding.
Whenever so directed by Occidental, the depositary will terminate the deposit
agreement by mailing notice of termination to the record holders of all
depositary receipts then outstanding at least 30 days prior to the date fixed in
the notice for termination. The depositary may likewise terminate the deposit
agreement if at any time 60 days shall have expired after the depositary shall
have delivered to Occidental a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its appointment.
If any depositary receipts remain outstanding after the date of termination, the
depositary thereafter will discontinue the transfer of depositary receipts, will
suspend the distribution of dividends to the holders thereof, and will not give
any further notices (other than notice of termination) or perform any further
acts under the deposit agreement except that the depositary will continue (1) to
collect dividends on the preferred stock and any other distributions with
respect thereto and (2) to deliver the preferred stock together with those
dividends and distributions and the net proceeds of any sales of rights,
preferences, privileges and other property, without liability for interest
thereon, in exchange for depositary receipts surrendered.
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CHARGES OF DEPOSITARY
Occidental will pay charges of the depositary in connection with the initial
deposit of the preferred stock, any redemption of the preferred stock and other
administrative matters. Holders of depositary receipts will pay transfer and
other taxes and governmental charges and those other charges, including a fee
for the withdrawal of shares of preferred stock upon surrender of depositary
receipts, as are expressly provided in the deposit agreement to be for their
accounts.
MISCELLANEOUS
The depositary will forward to holders of depositary receipts all reports and
communications from Occidental delivered to the depositary required to be
furnished to the holders of the preferred stock.
Neither Occidental nor the depositary will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
respective obligations under the deposit agreement. Occidental's obligations and
those of the depositary will be limited to performance in good faith of its
respective duties under the deposit agreement. Neither Occidental nor the
depositary will be obligated to prosecute or defend any legal proceeding in
respect of any depositary shares or preferred stock unless satisfactory
indemnity is furnished. Occidental and the depositary may rely upon written
advice of counsel or accountants, or upon information provided by persons
presenting preferred stock for deposit, holders of depositary receipts or other
persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering notice to Occidental of its
election to resign. Occidental may remove the depositary at any time. Any
resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of the appointment. The successor depositary must
be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
DESCRIPTION OF PREFERRED SECURITIES
GENERAL
Each Declaration authorizes the Regular Trustees to issue on behalf of each
trust one series of preferred securities which will have the terms described in
a prospectus supplement. The proceeds from the sale of a trust's preferred and
common securities will be used by that trust to purchase a series of
subordinated debt securities issued by Occidental. The subordinated debt
securities will be held in trust by the Property Trustee for the benefit of the
holders of the trust's preferred and common securities.
Under each Preferred Securities Guarantee, Occidental will agree to make
payments of distributions and payments on redemption or liquidation with respect
to a trust's preferred securities, but only to the extent the trust has funds
available to make those payments and has not made such payments. See
"Description of the Preferred Securities Guarantees."
The assets of a trust available for distribution to the holders of its preferred
securities will be limited to payments from Occidental under the series of
subordinated debt securities held by the trust. If Occidental fails to make a
payment on those subordinated debt securities, the trust will not have
sufficient funds to make related payments, including distributions, on its
preferred securities.
Each Preferred Securities Guarantee, when taken together with Occidental's
obligations under the related series of subordinated debt
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securities, the Subordinated Indenture and the related Declaration, will provide
a full and unconditional guarantee of amounts due on the preferred securities
issued by a trust.
Each Declaration will be qualified as an indenture under the Trust Indenture
Act. Each Property Trustee will act as indenture trustee for the preferred
securities to be issued by the applicable trust, in order to comply with the
provisions of the Trust Indenture Act.
Each series of preferred securities will have the terms, including
distributions, redemption, voting, liquidation rights and other preferred,
deferred or special rights or restrictions as described in the relevant
Declaration or made part of such Declaration by the Trust Indenture Act or the
Delaware Business Trust Act. The terms of any preferred securities will mirror
the terms of the subordinated debt securities held by the trust that issues the
preferred securities.
The prospectus supplement relating to the preferred securities of a trust will
describe the specific terms of the preferred securities, including:
- - the name of the preferred securities;
- - the dollar amount and number of securities issued;
- - any provision relating to deferral of distribution payments;
- - the annual distribution rate(s) (or method of determining that rate(s)), the
payment date(s) and the record dates used to determine the holders who are to
receive distributions;
- - the date from which distributions shall be cumulative;
- - the optional redemption provisions, if any, including the prices, time periods
and other terms and conditions for which the preferred securities shall be
purchased or redeemed, in whole or in part;
- - the terms and conditions, if any, upon which the applicable series of
subordinated debt securities may be distributed to holders of the preferred
securities;
- - the voting rights, if any, of holders of the preferred securities;
- - any securities exchange on which the preferred securities will be listed;
- - whether the preferred securities are to be issued in book-entry form and
represented by one or more global certificates and, if so, the depository for
the global certificates and the specific terms of the depositary arrangements;
and
- - any other relevant rights, preferences, privileges, limitations or
restrictions of the preferred securities.
Each prospectus supplement will describe certain United States federal income
tax considerations applicable to the purchase, holding and disposition of the
series of preferred securities covered by that prospectus supplement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Unless otherwise specified in an applicable prospectus supplement, each
Declaration states that the related trust shall be dissolved:
- - on the expiration of the term of the trust;
- - upon the bankruptcy of Occidental;
- - upon the filing of a certificate of dissolution or its equivalent with respect
to Occidental;
- - upon the filing of a certificate of cancellation with respect to the trust
after obtaining the consent of at least a majority in liquidation amount of
the preferred and common securities of the trust, voting together as a single
class;
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- - 90 days after the revocation of the charter of Occidental (but only if the
charter is not reinstated during that 90-day period);
- - upon the distribution of the related subordinated debt securities directly to
the holders of the preferred and common securities of the trust;
- - upon the redemption of all of the common and preferred securities of the
trust; or
- - upon entry of a court order for the dissolution of Occidental, or the trust.
Unless otherwise specified in an applicable prospectus supplement, in the event
of a dissolution, after the trust pays all amounts owed to creditors, the
holders of the preferred and common securities will be entitled to receive:
- - cash equal to the aggregate liquidation amount of each preferred and common
security specified in an accompanying prospectus supplement, plus accumulated
and unpaid distributions to the date of payment; unless
- - subordinated debt securities in an aggregate principal amount equal to the
aggregate liquidation amount of the preferred and common securities are
distributed to the holders of the preferred and common securities.
If the trust cannot pay the full amount due on its preferred and common
securities because insufficient assets are available for payment, then the
amounts payable by the trust on its preferred and common securities shall be
paid pro rata. However, if an event of default under the related Declaration has
occurred, the total amounts due on the preferred securities will be paid before
any distribution on such common securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Subordinated Indenture relating to a series of
subordinated debt securities is an event of default under the Declaration of the
trust that owns these subordinated debt securities (a "Declaration Event of
Default"). See "Description of the subordinated debt securities -- Events of
Default Under the Subordinated Indenture."
Occidental and the Regular Trustees of a trust must file annually with the
Property Trustee a certificate stating whether or not they are in compliance
with all the applicable conditions and covenants under the related Declaration.
Upon the occurrence of a Declaration Event of Default, the Property Trustee of
the applicable trust, as the sole holder of the subordinated debt securities
held by that trust, will have the right under the Subordinated Indenture to
declare the principal of, premium, if any, and interest on the subordinated debt
securities to be immediately due and payable.
If a Property Trustee fails to enforce its rights under the related Declaration
or the Subordinated Indenture to the fullest extent permitted by law and subject
to the terms of the Declaration and the Subordinated Indenture, any holder of
the preferred securities issued by the related trust may sue Occidental, or seek
other remedies, to enforce the Property Trustee's rights under the Declaration
or the Subordinated Indenture without first instituting a legal proceeding
against such Property Trustee or any other person.
If Occidental fails to pay principal, premium, if any, or interest on a series
of subordinated debt securities when payable, then a holder of the related
preferred securities issued by a trust which owns those notes may directly sue
Occidental or seek other remedies, to collect its pro rata share of payments
owed.
REMOVAL AND REPLACEMENT OF TRUSTEES
Only the holder of a trust's common securities has the right to remove or
replace the
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trustees of that trust. The resignation or removal of any trustee and the
appointment of a successor trustee shall be effective only on the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Declaration for that trust.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS OF THE TRUSTS
A trust may not consolidate, amalgamate, merge with or into, or be replaced by
or convey, transfer or lease its properties and assets substantially as an
entirety to any other corporation or other body ("Merger Event"), except as
described below. A trust may, with the consent of a majority of its Regular
Trustees and without the consent of the holders of its preferred and common
securities, consolidate, amalgamate, merge with or into, or be replaced by
another trust, if:
- - the successor entity either
(1) assumes all of the obligations of the trust relating to its preferred and
common securities; or
(2) substitutes for the trust's preferred and common securities other
securities substantially similar to those preferred and common securities
("successor securities"), so long as the successor securities rank the
same as the trust's preferred and common securities for distributions and
payments upon liquidation, redemption and otherwise;
- - Occidental acknowledges a trustee of the successor entity who has the same
powers and duties as the Property Trustee of the trust as the holder of the
particular series of subordinated debt securities;
- - the preferred securities are listed, or any successor securities will be
listed, upon notice of issuance, on the same national securities exchange or
other organization that the trust's preferred securities are then listed;
- - the Merger Event does not cause the trust's preferred securities or successor
securities to be downgraded by any national rating agency;
- - the Merger Event does not adversely affect the rights, preferences and
privileges of the holders of the trust's preferred and common securities or
successor securities in any material way (other than with respect to any
dilution of the holders' interest in the new entity);
- - the successor entity has a purpose identical to that of the trust;
- - prior to the Merger Event, Occidental has received an opinion of counsel from
a law firm stating that
(1) the Merger Event does not adversely affect the rights of the holders of
the trust's preferred securities or any successor securities in any
material way (other than with respect to any dilution of the holders'
interest in the new entity); and
(2) following the Merger Event, neither the trust nor the successor entity
will be required to register as an investment company under the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and
- - Occidental guarantees the obligations of the successor entity under the
successor securities in the same manner as in the applicable Preferred
Securities Guarantee and the guarantee of the common securities for the trust.
In addition, unless all of the holders of the preferred and common securities
approve otherwise, a trust shall not consolidate, amalgamate, merge with or
into, or be replaced by
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any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it, if that transaction would cause the trust or the
successor entity to be classified other than as a grantor trust for United
States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF DECLARATIONS
The holders of a trust's preferred securities have no voting rights except as
discussed under "-- Mergers, Consolidations or Amalgamations of the Trust" and
"Description of the Preferred Securities Guarantees -- Amendments and
Assignment," and as otherwise required by law and the Declaration for that
trust.
A Declaration may be amended if approved by a majority of the Regular Trustees
of the applicable trust. However, if any proposed amendment provides for, or the
Regular Trustees otherwise propose to effect:
(1) any action that would adversely affect the powers, preferences or special
rights of the trust's preferred and common securities, whether by way of
amendment to the trust's Declaration or otherwise; or
(2) the dissolution, winding-up or termination of the trust other than
pursuant to the terms of its Declaration,
then the holders of the trust's preferred and common securities as a single
class will be entitled to vote on the amendment or proposal. In that case, the
amendment or proposal will be effective only if approved by at least a majority
in liquidation amount of the preferred and common securities affected by the
amendment or proposal.
If any amendment or proposal referred to in clause (1) above would adversely
affect only the preferred securities or the common securities of a trust, then
only the affected class will be entitled to vote on the amendment or proposal
and the amendment or proposal will only be effective with the approval of at
least a majority in liquidation amount of the affected class.
No amendment may be made to a Declaration if that amendment would:
- - cause the related trust to be characterized as other than a grantor trust for
United States federal income tax purposes;
- - reduce or otherwise adversely affect the powers of the Property Trustee; or
- - cause the related trust to be deemed to be an "investment company" which is
required to be registered under the Investment Company Act.
The holders of a majority in aggregate liquidation amount of the preferred
securities of each trust have the right to:
- - direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee of the trust; or
- - direct the exercise of any trust or power conferred upon such Property Trustee
under that trust's Declaration, including the right to direct the Property
Trustee, as the holder of a series of subordinated debt securities, to
(1) exercise the remedies available under the Subordinated Indenture with
respect to any subordinated debt securities;
(2) waive any event of default under the Subordinated Indenture that is
waivable; or
(3) cancel an acceleration of the principal of the subordinated debt
securities.
However, if the Subordinated Indenture requires the consent of the holders of
more than a majority in aggregate principal amount of a series of subordinated
debt securities (a "super-majority"), then the Property Trustee
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for the series must get approval of the holders of a super-majority in
liquidation amount of the series of preferred securities.
In addition, before taking any of the foregoing actions, the Property Trustee
must obtain an opinion of counsel stating that, as a result of the action will
not result in the failure of the trust to continue to be classified as a grantor
trust for United States federal income tax purposes.
The Property Trustee of a trust will notify all preferred securities holders of
that trust of any notice received from the Subordinated Indenture Trustee with
respect to the subordinated debt securities held by that trust.
As described in each Declaration, the Property Trustee may hold a meeting to
have preferred securities holders vote on a change or have them approve the
change by written consent.
If a vote of preferred securities holders is taken or a consent is obtained, any
preferred securities owned by Occidental or any of its affiliates will, for
purposes of the vote or consent, be treated as if they were not outstanding.
This means:
- - Occidental and any of its affiliates will not be able to vote on or consent to
matters requiring the vote or consent of holders of preferred securities; and
- - any preferred securities owned by Occidental or any of its affiliates will not
be counted in determining whether the required percentage of votes or consents
has been obtained.
INFORMATION CONCERNING THE PROPERTY TRUSTEES
For matters relating to compliance with the Trust Indenture Act, the Property
Trustee of each trust will have all of the duties and responsibilities of an
indenture trustee under the Trust Indenture Act. Each Property Trustee, other
than during the occurrence and continuance of a Declaration Event of Default
under the applicable trust, undertakes to perform only those duties as are
specifically set forth in the applicable Declaration and, upon a Declaration
Event of Default, must use the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, a Property Trustee is under no obligation to exercise any of the
powers given it by the applicable Declaration at the request of any holder of
preferred securities unless it is offered reasonable security or indemnity
against the costs, expenses and liabilities that it might incur. However, the
holders of the preferred securities will not be required to offer an indemnity
where the holders, by exercising their voting rights, direct the Property
Trustee to take any action following a Declaration Event of Default.
The Bank of New York is a participating lender under one of Occidental's
revolving credit agreements, provides commercial banking services to Occidental
and its affiliates and acts as property trustee, preferred securities guarantee
trustee and, through an affiliate, the Delaware trustee with respect to an issue
of preferred securities issued by an affiliate of Occidental. The Bank of New
York is the Senior Indenture Trustee and will act as the Subordinated Indenture
Trustee, the Property Trustee and the Preferred Securities Guarantee Trustee. In
addition, an affiliate of The Bank of New York will act as the Delaware Trustee
of each of the trusts. However, if The Bank of New York acquires any conflicting
interest when an event of default is pending, it must (with certain exceptions)
eliminate the conflict or resign.
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MISCELLANEOUS
The Regular Trustees of each trust are authorized and directed to conduct the
affairs of and to operate each trust so that:
- - it will not be deemed to be an "investment company" required to be registered
under the Investment Company Act;
- - it will be classified as a grantor trust for United States federal income tax
purposes; and
- - the subordinated debt securities held by it will be treated as Occidental's
indebtedness for United States federal income tax purposes.
Occidental and the Regular Trustees of a trust are authorized to take any action
(so long as it is consistent with applicable law or the applicable certificate
of trust or Declaration) that Occidental and the Regular Trustees of that trust
determine to be necessary or desirable for such purposes.
Holders of preferred securities have no preemptive or similar rights.
A trust may not borrow money, issue debt, execute mortgages or pledge any of its
assets.
GOVERNING LAW
Each Declaration and the related preferred securities will be governed by and
construed in accordance with the laws of the State of Delaware.
DESCRIPTION OF PREFERRED SECURITIES GUARANTEES
GENERAL
Occidental will execute a Preferred Securities Guarantee, which benefits the
holders of preferred securities, at the time that a trust issues those preferred
securities. Each Preferred Securities Guarantee will be qualified as an
indenture under the Trust Indenture Act. The Bank of New York will act as
indenture trustee ("Preferred Guarantee Trustee") under each Preferred
Securities Guarantee for the purposes of compliance with the Trust Indenture
Act. The Preferred Guarantee Trustee will hold each Preferred Securities
Guarantee for the benefit of the preferred securities holders of the applicable
trust.
Occidental will irrevocably agree, as described in each Preferred Securities
Guarantee, to pay in full, to the holders of the preferred securities issued by
the applicable trust, the Preferred Securities Guarantee Payments (as defined
below) (except to the extent previously paid), when and as due, regardless of
any defense, right of set-off or counterclaim which the trust may have or
assert. The following payments, to the extent not paid by a trust ("Preferred
Securities Guarantee Payments"), will be covered by the applicable Preferred
Securities Guarantee:
- - any accrued and unpaid distributions required to be paid on the applicable
preferred securities, to the extent that the trust has funds available to make
the payment;
- - the redemption price, to the extent that the trust has funds available to make
the payment; and
- - upon a voluntary or involuntary dissolution and liquidation of the trust
(other than in connection with a distribution of subordinated debt securities
to holders of the preferred securities or the redemption of all such preferred
securities), the lesser of:
(1) the aggregate of the liquidation amount specified in the prospectus
supplement for each preferred security plus all accrued and unpaid
distributions on the preferred security to the date of payment, to the
extent the trust has funds available to make the payment; and
(2) the amount of assets of the trust remaining available for distribution to
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holders of its preferred securities upon a dissolution and liquidation of
the trust ("Liquidation Payment").
Occidental's obligation to make a Preferred Securities Guarantee Payment may be
satisfied by directly paying the required amounts to the holders of the
preferred securities or by causing the trust to pay the amounts to the holders.
No single document relating to the issuance of preferred securities will provide
for Occidental's full, irrevocable and unconditional guarantee of the preferred
securities. Only the combined operation of Occidental's obligations under the
applicable Preferred Securities Guarantee, Declaration, Subordinated Indenture
and the subordinated debt securities has the effect of providing a full,
irrevocable and unconditional guarantee of a trust's obligations under its
preferred securities.
STATUS OF THE PREFERRED SECURITIES GUARANTEES
Each Preferred Securities Guarantee will be an unsecured obligation of
Occidental and will rank:
- - subordinate and junior in right of payment to all of Occidental's other
liabilities (except for those liabilities made equal or junior by their terms
to any of Occidental's liabilities under the applicable Preferred Securities
Guarantee);
- - equal with any guarantee that Occidental has issued, or will issue, in respect
of the most senior preferred or preference stock that Occidental issues now or
hereafter and with any guarantee that Occidental issues now or hereafter in
respect of any preferred or preference stock of any of its affiliates
including Occidental's guarantee of the preferred securities of Oxy Capital
Trust I, issued and sold on January 20, 1999; and
- - senior to Occidental's common stock.
Each Declaration will require that the holder of preferred securities accept the
subordination provisions and other terms of the Preferred Securities Guarantee.
Each Preferred Securities Guarantee will constitute a guarantee of payment and
not of collection (in other words the holder of the guaranteed security may sue
Occidental, or seek other remedies, to enforce its rights under the Preferred
Securities Guarantee without first suing any other person or entity). A
Preferred Securities Guarantee will not be discharged except by payment of the
Preferred Securities Guarantee Payments in full to the extent not previously
paid or upon distribution to the applicable preferred securities holders of the
corresponding series of subordinated debt securities pursuant to the appropriate
Declaration.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights of
holders of a series of preferred securities in any material respect (in which
case no consent of any holders will be required), a Preferred Securities
Guarantee may be amended only with the prior approval of the holders of at least
a majority in aggregate liquidation amount of the applicable preferred
securities (excluding any preferred securities that Occidental or its affiliates
hold). A description of the way to obtain any approval is described under
"Description of the Preferred Securities -- Voting Rights; Amendment of
Declarations." All guarantees and agreements contained in a Preferred Securities
Guarantee will be binding on Occidental's successors, assigns, receivers,
trustees and representatives and are for the benefit of the holders of the
applicable preferred securities.
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PREFERRED SECURITIES GUARANTEE EVENTS OF DEFAULT
An event of default under a Preferred Securities Guarantee occurs if Occidental
fails to make any of its required payments or perform its obligations under that
Preferred Securities Guarantee.
The holders of at least a majority in aggregate liquidation amount of the
preferred securities relating to each Preferred Securities Guarantee (excluding
any preferred securities that Occidental or any of its affiliates hold) will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Preferred Guarantee Trustee relating to the
applicable Preferred Securities Guarantee or to direct the exercise of any trust
or power given to the Preferred Guarantee Trustee under that Preferred
Securities Guarantee.
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEES
The Preferred Guarantee Trustee under a Preferred Securities Guarantee, other
than during the occurrence and continuance of a default under that Preferred
Securities Guarantee, will perform only the duties that are specifically
described in that Preferred Securities Guarantee. After such a default, the
Preferred Guarantee Trustee will exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, a Preferred Guarantee Trustee is under no obligation
to exercise any of its powers as described in the applicable Preferred
Securities Guarantee at the request of any holder of covered preferred
securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that it might incur.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEES
Each Preferred Securities Guarantee will terminate once the applicable preferred
securities are paid in full or upon distribution of the corresponding series of
subordinated debt securities to the holders of those preferred securities. Each
Preferred Securities Guarantee will continue to be effective or will be
reinstated if at any time any holder of preferred securities issued by the
applicable trust must restore payment of any sums paid under those preferred
securities or such Preferred Securities Guarantee.
GOVERNING LAW
The Preferred Securities Guarantees will be governed by and construed in
accordance with the laws of the State of New York.
RELATIONSHIP AMONG PREFERRED SECURITIES, PREFERRED SECURITIES GUARANTEES AND
SUBORDINATED DEBT SECURITIES HELD BY EACH TRUST
Occidental will guarantee payments of distributions and redemption and
liquidation payments due on each series of preferred securities (to the extent
the applicable trust has funds available for the payments) to the extent
described under "Description of the Preferred Securities Guarantees." No single
document that Occidental executes in connection with the issuance of any series
of preferred securities will provide for its full, irrevocable and unconditional
guarantee of such preferred securities. Only the combined operation of
Occidental's obligations under the applicable Preferred Securities Guarantee,
Declaration, Subordinated Indenture and subordinated debt securities has the
effect of providing a full, irrevocable and unconditional guarantee of a trust's
obligations under its preferred securities.
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As long as Occidental makes payments of interest and other payments when due on
the subordinated debt securities held by a trust, those payments will be
sufficient to cover the payment of distributions and redemption and liquidation
payments due on the preferred securities issued by that trust, primarily
because:
- - the aggregate principal amount of the subordinated debt securities will be
equal to the sum of the aggregate liquidation amount of the preferred and
common securities;
- - the interest rate and interest and other payment dates on the subordinated
debt securities will match the distribution rate and distribution and other
payment dates for the preferred securities;
- - Occidental shall pay for any and all costs, expenses and liabilities of each
trust except the trust's obligations under its preferred securities (and
Occidental has agreed to guarantee such payment); and
- - each Declaration provides that the related trust will not engage in any
activity that is not consistent with the limited purposes of the trust.
If and to the extent that Occidental does not make payments on those
subordinated debt securities, the trust will not have funds available to make
payments of distributions or other amounts due on its preferred securities. In
those circumstances, you will not be able to rely upon the Preferred Securities
Guarantee for payment of these amounts. Instead, you may directly sue Occidental
or seek other remedies to collect your pro rata share of payments owed. If you
sue Occidental to collect payment, then Occidental will assume your rights as a
holder of preferred securities under such trust's Declaration to the extent
Occidental makes a payment to you in any legal action.
A holder of any preferred security may sue Occidental, or seek other remedies,
to enforce its rights under the applicable Preferred Securities Guarantee
without first suing the applicable Preferred Guarantee Trustee, the trust which
issued the preferred security or any other person or entity.
PLAN OF DISTRIBUTION
Occidental may sell the senior debt securities, subordinated debt securities,
shares of preferred stock or depositary shares and a trust may sell its
preferred securities being offered hereby in one or more of the following ways
from time to time:
- - to underwriters for resale to the public or to institutional investors;
- - directly to institutional investors;
- - directly to agents;
- - through agents to the public or to institutional investors; or
- - if indicated in the prospectus supplement, pursuant to delayed delivery
contracts or by remarketing firms.
The prospectus supplements and pricing supplements, if any, will set forth the
terms of the offering of each series of securities, including the name or names
of any underwriters or agents, the purchase price of the securities and the
proceeds to Occidental or the applicable trust, as the case may be, from such
sale, any underwriting discounts or agency fees and other items constituting
underwriters' or agents' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which the securities may be listed.
If underwriters are used in the sale, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed
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public offering price or prices, which may be changed, or at market or varying
prices determined at the time of sale.
Unless otherwise set forth in a prospectus supplement or a pricing supplement,
if any, the obligations of the underwriters to purchase any series of securities
will be subject to certain conditions precedent and the underwriters will be
obligated to purchase all of the series of securities, if any are purchased.
If a dealer is utilized in the sale of securities, Occidental will sell the
securities to the dealer, as principal. The dealer may then resell the
securities to the public at varying prices to be determined by the dealer at the
time of resale.
Securities may also be offered and sold, if so indicated in the prospectus
supplement or a pricing supplement, if any, 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 or a pricing
supplement, if any.
Underwriters, agents, dealers and remarketing firms may be entitled under
agreements entered into with Occidental and/or a trust to indemnification by
Occidental and/or such trust against certain civil liabilities, including
liabilities under the Securities Act of 1933, or to contribution with respect to
payments which the underwriters or agents may be required to make in respect
thereof. Underwriters, agents, dealers and remarketing firms may be customers
of, engage in transactions with, or perform services for Occidental and its
affiliates in the ordinary course of business.
Each series of securities will be a new issue of securities and will have no
established trading market. Any underwriters to whom Occidental or any trust
sells securities for public offering and sale may make a market in the
securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The securities may or
may not be listed on a national securities exchange or a foreign securities
exchange.
LEGAL OPINIONS
The validity of the senior debt securities, the subordinated debt securities,
the preferred stock, the depositary shares, the preferred securities, the
preferred securities guarantees and certain matters relating thereto will be
passed on for Occidental by Robert E. Sawyer, Esq., Associate General Counsel of
Occidental, and by Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles,
California, and for any underwriters by Brown & Wood LLP, Los Angeles,
California. Mr. Sawyer beneficially owns, and has rights to acquire under
employee stock options, an aggregate of less than 1 percent of the outstanding
common stock of Occidental.
EXPERTS
The consolidated financial statements and financial statement schedule of
Occidental and its subsidiaries, for the fiscal year ended December 31, 1998,
included in Occidental's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, which are incorporated by reference in this prospectus, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
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- --------------------------------------------------------------------------------
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$1,000,000,000
[OXY LOGO]
OCCIDENTAL PETROLEUM CORPORATION
MEDIUM-TERM SENIOR NOTES,
SERIES C
MEDIUM-TERM SUBORDINATED NOTES,
SERIES A
-------------------------------------------
PROSPECTUS SUPPLEMENT
-------------------------------------------
CHASE SECURITIES
CREDIT SUISSE FIRST BOSTON
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
JUNE 30, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
