What is the main impact of this agreement on Occidental's Board of Directors?

The agreement immediately increases the size of Occidental's Board to fifteen directors by appointing two designees from Carl Icahn's group and one independent director. This also means four existing directors will not be re-nominated for the upcoming 2020 annual meeting.

What concessions has the Icahn Group made in exchange for these board seats?

The Icahn Group has withdrawn its slate of director nominees and stockholder proposals for the 2020 annual meeting. They have also agreed to withdraw a demand for books and records and dismiss a pending appeal in the Delaware Supreme Court related to that demand.

What governance changes are being implemented as part of this agreement?

Occidental has amended its by-laws to implement a uniform advance notice period for stockholder proposals, lower the threshold for calling a special meeting to 15% of outstanding shares, and grant stockholders the ability to fix the size of the Board and remove/replace directors. The company also intends to recommend charter amendments to stockholders.

Will the Icahn Group have significant control over future board decisions?

The agreement grants the Icahn designees certain approval rights. For example, they must approve any increase in board size above fifteen directors before the 2020 annual meeting (or eleven after). They also have approval rights over the appointment of a new Chairman and specific extraordinary corporate transactions. These rights are tied to the Icahn Group maintaining a certain 'net long position' in Occidental's stock.

OXY 8-K: Leadership Changes, Material Agreements & More

Summary

Occidental Petroleum Corporation (OXY) announced a significant agreement with Carl C. Icahn and his affiliated entities (the "Icahn Group") on March 25, 2020. This agreement involves the immediate appointment of two Icahn designees, Nicholas Graziano and Andrew Langham, and an independent director, Margarita Paláu-Hernández, to Occidental's Board of Directors, expanding it to fifteen members. This move comes as a resolution to proxy disputes and activist pressure from the Icahn Group. The agreement also stipulates that four existing directors will not seek re-election at the upcoming 2020 annual meeting. Furthermore, Occidental has agreed to include the Icahn designees and the new independent director on its slate of nominees for the 2020 annual meeting. The agreement also places certain restrictions on the Board's size and requires approval from the Icahn designees for new committee chairs or extraordinary transactions. In exchange, the Icahn Group has withdrawn its director nominations, stockholder proposals, and legal actions, signaling a period of cooperation and a shift in board composition.

Key Highlights

1Occidental Petroleum entered into a Director Appointment and Nomination Agreement with Carl Icahn and his group.
2The Board of Directors has been expanded to fifteen members with the immediate appointment of two Icahn designees and one independent director.
3Four existing directors will retire and not stand for re-election at the 2020 annual meeting.
4Occidental has agreed to include the Icahn designees and the new independent director on its slate of nominees for the 2020 annual meeting.
5The Icahn Group has withdrawn its director nominations, stockholder proposals, and legal challenges.
6The agreement places certain approval rights with the Icahn designees regarding board size, new chairman appointments, and extraordinary corporate actions.
7By-laws have been amended to include uniform advance notice periods, facilitate special meeting requests with a lower threshold (15%), and allow stockholders to fix board size and remove/replace directors.

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Material Agreement (Mar 25, 2020)

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Key Highlights

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