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LYONDELL PETROCHEMICAL COMPANY
1221 McKINNEY STREET
SUITE 1600
HOUSTON, TX 77010
June 23, 1994
Dear Stockholders:
You are cordially invited to the reconvened 1994 Annual Meeting of
Stockholders for Lyondell Petrochemical Company ("Lyondell") on Friday, July 22,
1994, beginning at 1:30 p.m. in the Austin Room of the Four Seasons Hotel, 1300
Lamar, in Houston, Texas.
Lyondell convened its annual meeting of stockholders on May 5, 1994. Upon
recommendation by the Board of Directors, the meeting was adjourned and voting
on the proposals in the proxy statement was deferred to give stockholders an
opportunity to fully consider the May 5, 1994 public announcement that Atlantic
Richfield Company ("ARCO") and Lyondell had filed registration statements
related to a proposed offering of ARCO debt securities exchangeable upon
maturity, at ARCO's option, into Lyondell common stock or cash with an equal
value ("Proposed Debt Offering").
The marketing of the Proposed Debt Offering has been delayed and the
Company is not currently in a position to determine if or when the marketing
efforts will re-commence or when the transaction might be consummated. If the
Proposed Debt Offering is consummated, Mike Bowlin, Chairman of the Board and
the other four ARCO officers who serve on the Lyondell Board intend to resign.
If those resignations occur, the Board of Directors currently expects to reduce
the size of the Board from eleven members to six, pending further decisions by
the Board with respect to the appropriate size and composition of the
reconstituted Board.
AT THE RECONVENED ANNUAL MEETING NO NEW BUSINESS ITEMS WILL BE SUBMITTED
AND IT IS NOT NECESSARY TO REVOTE YOUR PROXY. Each stockholder of record
previously received a single form of proxy pertaining to all classes of voting
stock registered in his or her name. A new proxy has been provided with these
materials. You may use this form to vote if you did not vote earlier and you
may also use it to revoke your earlier proxy and recast your vote. IF YOU DO
NOT WISH TO RECAST YOUR VOTE, THERE IS NO NEED TO TAKE ANY ADDITIONAL ACTION.
The attached supplemental proxy booklet includes the Notice of the
Reconvened Meeting and supplemental information about the formal business to be
acted upon by the stockholders. The meeting will provide a question and
discussion period. A post-meeting report will be mailed to all stockholders.
Sincerely yours,
(Signature of (Signature of
Mike R. Bowlin Bob G. Gower
appears here) appears here)
Mike R. Bowlin Bob G. Gower
Chairman of the Board President and Chief Executive Officer
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LYONDELL PETROCHEMICAL COMPANY
1221 McKINNEY STREET
SUITE 1600
HOUSTON, TEXAS 77010
NOTICE OF RECONVENED ANNUAL MEETING OF STOCKHOLDERS
JULY 22, 1994
To the Stockholders:
The 1994 Annual Meeting of Stockholders for Lyondell Petrochemical Company was
initially convened on May 5, 1994 at the Four Seasons Hotel in Houston, Texas.
Before a final vote on the business items was taken, the meeting was adjourned
in order to provide an opportunity for the Company to update the stockholders
with respect to recent announcements concerning the Company and its largest
stockholder, Atlantic Richfield Company. The reconvened annual meeting of
stockholders will be held at 1:30 p.m. Houston, Texas time, on Friday, July 22nd
in the Austin Room of the Four Seasons Hotel, 1300 Lamar in Houston, Texas, for
the following purposes, as more fully described in the proxy statement and the
attached supplemental materials.
1. To elect directors to serve until the 1995 Annual Meeting of Stockholders
or until their earlier resignation or removal;
2. To amend the Certificate of Incorporation to authorize the issuance of
preferred stock;
3. To ratify the appointment of Coopers & Lybrand as independent auditors for
Lyondell for the year 1994; and
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Stockholders of record at the close of business on March 18, 1994 will be
entitled to notice of and to vote at the meeting or any adjournment thereof.
EACH STOCKHOLDER OF RECORD PREVIOUSLY RECEIVED A SINGLE FORM OF PROXY PERTAINING
TO ALL CLASSES OF VOTING STOCK REGISTERED IN HIS OR HER NAME. A NEW PROXY HAS
BEEN PROVIDED WITH THESE MATERIALS. YOU MAY USE THIS FORM TO VOTE IF YOU DID
NOT VOTE EARLIER AND YOU MAY ALSO USE IT TO REVOKE YOUR EARLIER PROXY AND RECAST
YOUR VOTE. IF YOU DO NOT WISH TO RECAST YOUR VOTE, THERE IS NO NEED TO TAKE ANY
ADDITIONAL ACTION. EACH PARTICIPANT IN ANY OF THE VARIOUS EMPLOYEE BENEFIT
PLANS WILL ALSO RECEIVE A NEW PROXY PERTAINING TO SHARES CREDITED TO HIS OR HER
ACCOUNTS IN ALL PLANS.
BY ORDER OF THE BOARD OF DIRECTORS
(Signature of Jeffrey R.
Pendergraft appears here)
Jeffrey R. Pendergraft Houston, Texas
Secretary June 23, 1994
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Lyondell Petrochemical Company
1221 McKinney Street
Suite 1600
Houston, Texas 77010
__________________________
PROXY STATEMENT SUPPLEMENT
JUNE 23, 1994
__________________________
INTRODUCTION
This proxy statement supplement is pursuant to direction from the Board of
Directors of Lyondell Petrochemical Company ("Lyondell" or the "Company").
Lyondell convened its 1994 annual meeting of stockholders on May 5, 1994. Shares
representing a total of 70,905,851 votes, or approximately 88 percent of the
shares entitled to vote, were present in person or by proxy. The stockholders
represented at the meeting voted to approve the Board of Directors'
recommendation to adjourn the meeting before a final vote on the proposals in
the proxy statement. Voting on the proposals in the proxy statement was deferred
to give stockholders an opportunity to fully consider the May 5, 1994 public
announcement that Atlantic Richfield Company ("ARCO") and Lyondell had filed
registration statements related to a proposed offering of up to 39,921,400 ARCO
debt securities (the "Notes") exchangeable upon maturity, at ARCO's option, into
Lyondell common stock or cash (the "Proposed Debt Offering"). The Board of
Directors has acted to reconvene the Annual Meeting on July 22, 1994.
STOCKHOLDERS WHO HAVE PREVIOUSLY SUBMITTED A PROXY CARD AND DO NOT WISH TO
CHANGE THEIR VOTE DO NOT NEED TO RESUBMIT A PROXY CARD. The proxy submitted by
stockholders for the original May 5, 1994 Annual Meeting of Stockholders is
still valid. However, a new proxy is included should stockholders choose to
modify their original vote.
PRINCIPAL STOCKHOLDERS
Reference is hereby made to the disclosure on page 2 of the Company's Proxy
Statement dated April 14, 1994 for the Annual Meeting to be held May 5, 1994
(the "Proxy Statement") regarding Amendment No. 4 to ARCO's Schedule 13D filing
and the discussion of the Proposed Debt Offering.
ARCO and Lyondell each filed registration statements with the Securities and
Exchange Commission on May 5, 1994 (each as amended by Amendment No. 1 filed May
20, 1994) for the offering by ARCO of three-year debt
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securities exchangeable into Lyondell common stock or cash.
Upon maturity, three years from the date of issuance, the principal amount of
the Notes will be payable, at ARCO's option, in shares of Lyondell common stock
or cash. The number of shares or the amounts of such cash will be determined
using a formula based on the price of Lyondell common stock at the maturity of
the Notes.
ARCO currently owns 39,921,400 shares of Lyondell common stock, or 49.9 percent
of the total outstanding shares of Lyondell. If the Proposed Debt Offering is
consummated and if ARCO elects to deliver shares at the maturity of the Notes,
ARCO's equity interest in Lyondell will then be substantially reduced or
eliminated, depending on the price of Lyondell common stock at such time.
Although ARCO will continue to be a stockholder after issuance of the Notes,
with all attendant rights, including the right to receive dividends and to vote
its shares, ARCO has stated that, with respect to issues submitted for
stockholder vote after consummation of the Proposed Debt Offering and while the
Notes are outstanding, ARCO currently intends to vote its shares proportionately
to the votes of the remainder of Lyondell's stockholders; provided, that in the
event a person other than ARCO is deemed to own more than 10 percent of the
Lyondell common stock within the meaning of Section 13(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") and there occurs a contested proxy
solicitation within the meaning of Rule 14a-11(a) of the Exchange Act, ARCO
intends to vote its shares as it deems appropriate. If the Proposed Debt
Offering is consummated prior to the commencement of the reconvened Annual
Meeting, ARCO has indicated its intention to vote its shares with respect to all
business items proportionately as described in the preceding paragraph.
However,if the Proposed Debt Offering is not consummated prior to the
commencement of the reconvened Annual Meeting, as indicated in the Company's
Proxy Statement dated April 14, 1994, ARCO has stated that it intends to vote
its shares in favor of the eleven nominees to the Board of Directors, for the
amendment of the Certificate of Incorporation to authorize Preferred Stock and
for the appointment of Coopers & Lybrand as independent auditors for 1994.
ELECTION OF DIRECTORS
Reference is hereby made to the disclosure on pages 4-6 of the Proxy Statement
regarding Election of Directors.
Five of the eleven directors of Lyondell are officers of ARCO ("ARCO
Directors"). If the Proposed Debt Offering is consummated, the ARCO officers
currently serving on the Board of Directors intend to resign.
If the Proposed Debt offering and anticipated resignation of ARCO directors
occurs, the Board of Directors currently expects to reduce the size of the Board
from eleven members to six pending a final decision by the Board about the
appropriate size and composition of the Board.
As of the date of this mailing, all of the incumbent directors, including the
ARCO directors, are candidates for the Board of Directors and will stand for
election unless the Proposed Debt Offering has been concluded by July 22, 1994.
If the Proposed Debt Offering and the anticipated resignations occur prior to
the July 22nd meeting, then the ARCO directors will withdraw their candidacy and
the size of the Board is expected to be reduced to six. In that event, all
votes cast for the ARCO directors will be disregarded. IT IS NOT NECESSARY FOR
STOCKHOLDERS TO RECAST PROXY VOTES WITH RESPECT TO THE DIRECTORS.
If any vacancy in the Board is created by an expansion of the Board prior to the
1995 Annual Stockholders Meeting, the Board has the
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authority to fill the vacancies created by such expansion and would do so for
the interim period prior to the 1995 Annual Stockholder Meeting.
EXECUTIVE COMPENSATION
Reference is hereby made to the disclosure in the Proxy Statement regarding
Executive Compensation.
The Company has recently entered into severance agreements with each of its
executive officers. The severance agreements provide for the receipt by the
executive officers of certain payments and benefits in the event of a "Change of
Control" of the Company. A Change in Control occurs when (i) the Incumbent
Directors (as defined in the severance agreements) cease to constitute at least
a majority of the Board, (ii) the stockholders of the Company approve any
merger, consolidation, recapitalization or sale of substantially all of the
assets of the Company under circumstances where such stockholders would own less
than 80 percent of the outstanding voting securities of the surviving entity, or
where the Incumbent Directors would not constitute a majority of the Board of
Directors immediately after such transaction, or such stockholders approve any
plan or proposal for the liquidation or dissolution of the company, (iii) any
person or group, other than ARCO, holds or acquires, directly or indirectly,
more than 20 percent of the Company's then outstanding voting securities, or
(iv) ARCO acquires (other than in an inadvertent transaction that is effectively
reversed) ownership, directly or indirectly, of more than 50 percent of the
Company's then outstanding voting securities.
In the event of a Change in Control, the severance agreements provide for the
vesting of all of the executives' non-vested stock options (and dividend share
credits with respect thereto) granted to the executive under the Company's Long-
Term Incentive Plan. In the further event that there is a cessation of an active
market for the Company's common stock at or within three years after the Change
in Control, the Company is required to pay the executive a lump-sum payment
based on the Black Scholes value (as of the date immediately preceding the
cessation of an active market) and remaining term of the options for all of the
executive's unexercised stock options, notwithstanding the possibility that the
average exercise price of such options is in excess of the market value of the
underlying common stock. Also upon a Change in Control, the Company may be
required to make a lump-sum payment based on the pro-rata value of the
performance units then held by the executive under the Company's Executive Long-
Term Incentive Plan.
The severance agreements provide for additional payments and benefits in the
event the executive's employment with the Company is actually or constructively
terminated at any time within three years following a Change in Control,
including lump-sum payments based on three times the executive's base salary and
targeted
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bonus, certain tax gross-up payments, additional pension benefits and benefits
upon termination of the executive's Deferral Plan. The Company expects that a
material portion of any payments required to be made under the severance
agreements would be considered "parachute" payments under applicable Internal
Revenue Code provisions and would therefore not be deductible for Federal Income
Tax purposes by the Company. The agreement extends through August 1995 but is
renewable at the request of the Company and upon specific approval of the
Compensation Committee.
_________________________________
STOCKHOLDERS WHO PREVIOUSLY SUBMITTED A PROXY CARD FOR THE MAY 5, 1994 VOTE WHO
DO NOT WISH TO MODIFY THEIR VOTE NEED NOT RESUBMIT A PROXY CARD. THE ORIGINAL
PROXY SUBMITTED BY STOCKHOLDERS FOR THE MAY 5, 1994 ANNUAL MEETING OF
STOCKHOLDERS IS STILL VALID. HOWEVER, A NEW PROXY IS INCLUDED SHOULD
STOCKHOLDERS CHOOSE TO MODIFY THEIR ORIGINAL VOTE.
_________________________________
Stockholders requiring more information on any of the above referenced
information may address questions to the Bank of New York at 1-800-524-4458.
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[LOGO OF LYONDELL PETROCHEMICAL COMPANY APPEARS HERE]
One Houston Center
1221 McKinney, Suite 1600
Houston, Texas 77010
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby makes, constitutes and appoints John R. Beard, Joseph
M. Putz and Russell S. Young, and each of them, lawful attorneys and proxies of
the undersigned, with full power of substitution, for and in the name, place and
stead of the undersigned to attend the Annual Meeting of Stockholders of
Lyondell Petrochemical Company (herein the "Company") in the Austin Room of the
Four Seasons Hotel, 1300 Lamar, Houston, Texas, on Friday, July 22, 1994 at
1:30 p.m., local time, and at any adjournment(s) thereof, with all powers the
undersigned would be entitled to vote if personally present.
If you submitted a proxy vote previously, it is not necessary to submit a new
proxy. This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR Items 1, 2 and 3.
(Continued, and to be signed and dated, on reverse side.)
Item 1. ELECTION OF DIRECTORS FOR all nominees
listed below [ ]
WITHHOLD AUTHORITY to EXCEPTIONS* (as indicated
vote for all nominees below [ ] to the contrary below) [ ]
Mike R. Bowlin, William T. Butler, Allan L. Comstock, Terry G. Dallas,
Bob G. Gower, Stephen F. Hinchliffe, Jr., Dudley C. Mecum II,
William C. Rusnack, Dan F. Smith, Paul R. Staley, William E. Wade, Jr.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee mark
the "Exceptions" box and write that nominee's name on space provided below.)
*Exceptions
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Item 2. Proposal to amend the Certificate of Incorporation to authorize
Preferred Stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Item 3. Proposal to ratify the appointment of Coopers & Lybrand, independent
accountants, as the Company's auditors for the fiscal year ending
December 31, 1994.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Item 4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
[ ] I/we will attend the meeting.
PROXY DEPARTMENT Address Change
NEW YORK, N.Y. 10203-0244 Mark Here [ ]
Please sign exactly as name appears.
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
Dated , 1994
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Signature
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Signature if held jointly
Please Sign, Date and Return the Proxy Votes MUST be indicated
Promptly Using the Enclosed Envelope. (x) in Black or Blue Ink. X
