Comparison of Rights of Stockholders of Occidental and Anadarko

 

The authorized capital stock of Occidental consists of 1,100,000,000 shares of common stock, par value $0.20 per share, and 50,000,000 shares of preferred stock, par value $1.00 per share.

The authorized capital stock of Anadarko consists of 1,000,000,000 shares of common stock, par value $0.10 per share, and 2,000,000 shares of preferred stock, par value $1.00 per share.

 

 

 

Under the DGCL, a special meeting of stockholders may be called by the board of directors or by any other person authorized to do so in the certificate of incorporation or by-laws.

 

Under Occidental’s by-laws and certificate of incorporation, special meetings of stockholders may be called by the Occidental Board or the chairman of the Occidental Board. In addition, subject to certain procedural requirements contained in Occidental’s certificate of incorporation and by-laws, special meetings of stockholders shall be called by the secretary of Occidental upon the written request of record holders of at least 25% of the outstanding common stock of Occidental.
   
Stockholders are permitted to take action without a meeting by written consent, subject to certain procedures specified in Occidental’s certificate of incorporation and by-laws.

Under Anadarko’s by-laws, special meetings of stockholders may only be called by a majority of the Anadarko Board, the chairman of the Anadarko Board or Anadarko’s chief executive officer or president. Stockholders are not permitted to call special meetings.
   
Stockholders are not permitted to take action without a meeting by written consent.

 

 

 

Occidental’s by-laws generally allow stockholders who are record holders on the date of notice and on the record date for the determination of stockholders entitled to vote at such annual meeting to nominate candidates for election to the Occidental Board and propose other business to be brought before an annual meeting.

Anadarko’s by-laws generally allow stockholders who are record holders on the date of notice and on the record date for the determination of stockholders entitled to vote at such annual meeting to nominate candidates for election to the Anadarko Board and propose other business to be brought before an annual meeting.

 

 

Such proposals (other than proposals included in the notice of meeting pursuant to Rule 14a-8 promulgated under the Exchange Act) and nominations, however, may only be brought by a stockholder who has given timely notice in proper written form to Occidental’s secretary prior to the meeting.

Such proposals (other than proposals included in the notice of meeting pursuant to Rule 14a-8 promulgated under the Exchange Act) and nominations, however, may only be brought by a stockholder who has given timely notice in proper written form to Anadarko’s secretary prior to the meeting.

 

In connection with an annual meeting, to be timely, notice of such proposals other than the election of directors must be received at the principal executive offices of Occidental not later than the 70^th day nor earlier than the 90^th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is not within 30 days of such date, notice by the stockholder must be delivered not later than the close of business on the 10^th day following the day on which (i) such notice of the date of the annual meeting was mailed or (ii) such public disclosure was made, whichever first occurs.
   
In connection with an annual meeting, to be timely, notice of nominations of persons for election to the Occidental Board must be received at the principal executive offices of Occidental between September 1 and November 30 of the year preceding the annual meeting. The stockholder notice must also include specific information regarding the stockholder and the director nominee or business to be brought before the annual meeting, as described in Occidental’s by-laws.

In connection with an annual meeting, to be timely, an Anadarko stockholder must deliver written notice by mail to Anadarko’s secretary not later than the close of business on the 90^th day and not earlier than the 120^th day prior to the first anniversary date of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after the anniversary date of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, the stockholder notice must be delivered no earlier than the close of business on the 120^th day prior to the annual meeting and not later than the close of business on the later of (i) the 90^th day prior to the annual meeting or (ii) if the first public announcement of the date of the annual meeting is less than 100 days prior to the date of the annual meeting, the 10^th day following the day on which Anadarko publicly announces the date of the annual meeting. The stockholder notice must also include specific information regarding the stockholder and the director nominee or business to be brought before the annual meeting, as described in Anadarko’s by-laws.

 

 

 

 

In addition, Occidental’s by-laws permit any stockholder or group of up to 20 stockholders who have maintained continuous qualifying ownership of 3% or more of Occidental’s outstanding common stock for at least three years to include up to a specified number of director nominees in Occidental’s proxy materials for an annual meeting, subject to satisfying notice requirements and other conditions set forth in the by-laws.
   
   

In addition, Anadarko’s by-laws permit any stockholder or group of up to 20 stockholders who have maintained continuous qualifying ownership of 3% or more of Anadarko’s outstanding common stock for at least three years to include up to a specified number of director nominees in Anadarko’s proxy materials for an annual meeting, subject to satisfying notice requirements and other conditions set forth in the by-laws.
   
   

 

 

The maximum number of stockholder nominees permitted under such proxy access provisions of Occidental’s by-laws is the greater of two or 20% of the number of Occidental’s directors on the last day a notice of nomination may be submitted. Notice of a nomination under Occidental’s proxy access by-law provisions must be submitted to the secretary of Occidental not later than the 120^th day, nor earlier than the 150^th day, prior to the anniversary of the date that Occidental mailed its proxy statement for the preceding year’s annual meeting. If the date of the annual meeting is more than 30 days before or after the first anniversary date of the preceding year’s annual meeting, notice by the stockholder must be given by the later of the close of business on the date that is (i) 180 days prior to such other meeting date or (ii) the 10^th day following the date such other meeting date is first publicly announced or disclosed.

The maximum number of stockholder nominees permitted under such proxy access provisions of Anadarko’s by-laws is the greater of two or 20% of the number of Anadarko’s directors on the last day a notice of nomination may be submitted. Notice of a nomination under Anadarko’s proxy access by-law provisions must be delivered by a stockholder to the secretary of Anadarko at its principal executive offices not later than the close of business on the 120^th day, nor earlier than the close of business on the 150^th day, prior to the first anniversary of the date the definitive proxy statement was first sent to stockholders in connection with the preceding year’s annual meeting of stockholders. If the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder must be so delivered (i) not earlier than the close of business on the 150^th day prior to such annual meeting and (ii) not later than the close of business on the later of (a) the 120^th day prior to such annual meeting or (b) if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10^th day following the day on which Anadarko publicly announced the date of the annual meeting.

 

 

 

The DGCL provides that the board of directors of a Delaware corporation must consist of one or more directors, with the number of directors fixed by or in the manner provided in the corporation’s by-laws unless the certificate of incorporation fixes the number of directors.

 

 

 

 

Occidental’s certificate of incorporation and by-laws provide that, subject to the rights, if any, of holders of preferred stock issued by Occidental to elect directors thereof, the Occidental Board will consist of one or more directors and the authorized number of directors will be determined from time to time by resolution adopted by the Occidental Board.
   
There are currently nine positions authorized and nine directors serving on the Occidental Board.

Anadarko’s certificate of incorporation and by-laws provide that the number of directors will be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the Anadarko Board.
   
There are currently 13 positions authorized and 13 directors serving on the Anadarko Board.

 

The DGCL provides that, unless the certificate of incorporation or by-laws provide otherwise, directors will be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.

 

 

 

 

Occidental’s by-laws provide that in an uncontested election, a director nominee is elected by a majority of the votes cast at an annual meeting at which a quorum is present; provided, however, that directors will be elected by a plurality of the votes cast at any meeting of the stockholders for which the number of nominees exceeds the number of directors to be elected. In an uncontested election, any nominee for director who receives a greater number of votes “against” his or her election than votes “for” such election must promptly tender his or her resignation following certification of the stockholder vote.
   
Holders of Occidental common stock do not have cumulative voting rights in the election of directors or otherwise.
   
Occidental does not have a classified board. Occidental’s by-laws require that all directors be elected at each annual meeting of stockholders for a term of one year and until his or her successor is duly elected.

Anadarko’s by-laws provide that in an uncontested election, a director nominee is elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election at a meeting at which a quorum is present; provided, however, that if, as of the 10^th day preceding the date Anadarko first mails its notice of meeting for such meeting to the stockholders, the number of nominees exceeds the number of directors to be elected, director nominees will be elected by a plurality of votes cast.
   
Anadarko’s certificate of incorporation provides that directors will be elected by cumulative voting in any election on or after the date on which any 30% stockholder becomes a 30% stockholder, and until the time as no 30% stockholder exists. A 30% stockholder is defined in Anadarko’s certificate of incorporation as any person, other than Anadarko, its subsidiaries or any Anadarko employee stock ownership/benefit plan, who beneficially owns 30% or more of the outstanding shares of Anadarko’s voting stock or who, at any time within the two-year period immediately prior to the date in question, beneficially owned 30% or more of the then-outstanding shares of Anadarko’s voting stock.
   
Anadarko does not have a classified board. Anadarko’s certificate of incorporation requires that all directors be elected at each annual meeting of stockholders for a term expiring at the next annual meeting of stockholders.

 

Section 141(k) of the DGCL provides that any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.

 

 

 

 

Occidental’s by-laws and certificate of incorporation do not expressly provide for the removal of directors, and so Section 141(k) of the DGCL governs.
   
Vacancies resulting from any increase in the number of directors or from death, resignation, disqualification, removal or other cause may be filled by the affirmative vote of a majority of the directors then in office, even if less than a quorum.

Anadarko’s certificate of incorporation provides that Anadarko stockholders may remove directors with or without cause by the affirmative vote of the holders of a majority of the shares then entitled to vote at an election of directors.
   
Vacancies resulting from any increase in the number of directors or from death, resignation, disqualification, removal or other cause may be filled solely by the affirmative vote of a majority of the directors then in office, even if less than a quorum.

 

 

 

Occidental’s certificate of incorporation provides that no director will be personally liable to Occidental or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to Occidental to its stockholders, (ii) for acts and omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of DGCL, which addresses liability of directors for unlawful payment of dividend or unlawful stock purchase or redemption, or (iv) for any transaction from which the director derived an improper benefit.

Anadarko’s certificate of incorporation provides that no director will be personally liable to Anadarko or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to Anadarko or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, which addresses liability of directors for unlawful payment of dividend or unlawful stock purchase or redemption or (iv) for any transaction from which the director derived an improper benefit.

 

 

 

Under the DGCL, a Delaware corporation may indemnify its present or former directors and officers against expenses (including attorneys’ fees) actually and reasonably incurred to the extent that the officer or director has been successful on the merits or otherwise in defense of any action, suit or proceeding brought against him or her by reason of the fact that he or she is or was a director or officer of the corporation.
   
Delaware law provides that a corporation may indemnify its present and former directors, officers, employees and agents, as well as any individual serving with another corporation in that capacity at the corporation’s request against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement of actions taken, if the individual acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation and, in the case of a criminal proceeding, the individual had no reasonable cause to believe the individual’s conduct was unlawful; except that no indemnification may be paid for judgments and settlements in actions by or in the right of the corporation.
   
A corporation may not indemnify a current or former director or officer of the corporation against expenses to the extent the person is adjudged to be liable to the corporation unless a court approves the indemnity.

 

 

Occidental’s by-laws require Occidental to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal or administrative by reason of the fact that such person is or was a director, officer, employee or agent of Occidental, or is or was serving at the request of Occidental as a director, officer, manager, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other organization or enterprise, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, if such person acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of Occidental, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful.
   
Occidental’s by-laws provide that Occidental may advance expenses incurred by such person in connection with any such action, suit or proceeding prior to its final disposition upon receipt of an undertaking to repay any advanced amounts if it is ultimately determined that he or she is not entitled to be indemnified.

Anadarko’s by-laws require Anadarko to indemnify any person who was or is a party or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal or administrative by reason of the fact that such person, or a person for whom he or she is the legal representative, (i) is or was a director or officer of Anadarko or, while a director or officer of Anadarko, is or was serving at Anadarko’s request as a director, officer, manager, partner, employee or agent of another corporation partnership, limited liability company, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans (a “Covered Person”) or (ii) is or was an employee of Anadarko or, while an employee of Anadarko, is or was serving at Anadarko’s request as a director, officer, manager, partner, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans (a “Covered Employee”), in each case, against all liability and loss suffered and expenses reasonably incurred by such Covered Person or Covered Employee.
   
Anadarko is required under its by-laws to advance expenses incurred by a Covered Person in connection with any such action, suit or proceeding prior to its final disposition so long as the person undertakes to repay any advanced amounts if it is ultimately determined that he or she is not entitled to be indemnified. The by-laws also permit Anadarko, in its discretion, to advance expenses incurred by a Covered Employee in connection with any such action, suit or proceeding prior to its final disposition upon such terms and conditions as Anadarko deems appropriate.

 

Occidental’s certificate of incorporation provides that Occidental reserves the right to amend, alter, change or repeal any provision contained in the certificate of incorporation, in the manner prescribed by statute, and all rights conferred upon stockholders in the certificate of incorporation are granted subject to such reservation.
   
As provided under the DGCL, subject to limited exceptions, any amendment to Occidental’s certificate of incorporation requires (i) the approval of the Occidental Board, (ii) the approval of a majority of the voting power of the outstanding stock entitled to vote upon the proposed amendment and (iii) the approval of the holders of a majority of the outstanding stock of each class entitled to vote thereon as a class, if any.

Anadarko’s certificate of incorporation may be amended if the change is proposed by the Anadarko Board and approved by the holders of a majority of outstanding voting stock. However, the vote of at least 80% of the votes entitled to be cast by the holders of all outstanding shares of voting stock is required to amend various provisions of Anadarko’s certificate of incorporation, including provisions relating to: (i) the number of directors constituting the Anadarko Board, (ii) the classification of the Anadarko Board, (iii) the removal of directors, (iv) the procedures for filling vacancies on the Anadarko Board, (v) the liability of directors for monetary damages for breach of fiduciary duty, (vi) certain business combinations with any interested stockholder, (vii) the cumulative voting for election of directors upon a 30% stockholder becoming a 30% stockholder and (viii) the prohibitions on stockholder action by written consent.

 

 

 

Occidental’s certificate of incorporation provides that the Occidental by-laws may be adopted, amended or repealed by the affirmative vote of the majority of the Occidental Board. In addition, Section 109 of the DGCL provides that stockholders have the power to adopt, amend or repeal by-laws.

Anadarko’s certificate of incorporation and by-laws provide that the by-laws generally may be amended (i) at any regular or special meeting of Anadarko stockholders by the affirmative vote of the holders of a majority in voting power of the shares of capital stock of Anadarko issued and outstanding and entitled to vote thereat or (ii) by the affirmative vote of a majority of the Anadarko Board.

 

 

 

Section 203 of the DGCL prohibits a Delaware corporation from engaging in a business combination with a stockholder acquiring more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an “interested stockholder”, unless prior to such date the board of directors approves either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder or the business combination is approved by the board of directors and by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder or certain other exceptions are met. The DGCL allows a corporation’s certificate of incorporation to contain a provision expressly electing not to be governed by Section 203.

 

 

 

 

Occidental’s certificate of incorporation does not contain a provision electing not to be governed by Section 203, and so Occidental is subject to such provision.

Anadarko’s certificate of incorporation does not contain a provision electing not to be governed by Section 203, and so Anadarko is subject to such provision.
   
   
   
   

 

 

 

In addition, Anadarko’s certificate of incorporation provides that, with some exceptions, a business combination with a person, other than Anadarko, its subsidiaries or any Anadarko employee stock ownership/benefit plan, that is the beneficial owner of voting stock representing 5% or more of the votes entitled to be cast by the holders of all outstanding voting stock, or who was at any point within the two-year period immediately prior to the date in question, requires the affirmative vote of at least 80% of the votes entitled to be cast by the holders of all outstanding voting stock.

 

 

 

Occidental currently does not have a stockholder rights plan.

Anadarko currently does not have a stockholder rights plan.

 

 

 

Occidental’s by-laws provide that, unless Occidental consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for any derivative action, action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or stockholder of Occidental to Occidental or its stockholders, action asserting a claim arising pursuant to, or seeking to enforce any right, obligation or remedy under, the DGCL, Occidental’s certificate of incorporation or Occidental’s by-laws (as each may be amended from time to time), action to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or action asserting a claim governed by the internal affairs doctrine.

Anadarko’s by-laws provide that, unless Anadarko consents in writing to the selection of an alternative forum, the sole and exclusive forum for any derivative action, action asserting a claim for or based on a breach of a fiduciary duty owed by any current or former director or officer or other employee of Anadarko to Anadarko or Anadarko’s stockholders, including a claim alleging the aiding and abetting of such a breach of fiduciary duty, action asserting a claim against Anadarko or any current or former director or officer or other employee of Anadarko arising pursuant to the DGCL or Anadarko’s certificate of incorporation or Anadarko’s by-laws (as either may be amended from time to time), action asserting a claim related to or involving Anadarko that is governed by the internal affairs doctrine or action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL will be a state court within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware).

 

 

Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in Occidental common stock is deemed to have received notice of and consented to the foregoing forum selection by-law, which could limit Occidental stockholders’ ability to choose the judicial forum for disputes with Occidental. The enforceability of similar forum clauses in other companies’ by-laws or similar governing documents has been challenged in legal proceedings, and it is possible that in connection with any action a court could find the forum selection clause contained in Occidental’s by-laws to be inapplicable or unenforceable in such action.

The enforceability of similar forum clauses in other companies’ by-laws or similar governing documents has been challenged in legal proceedings, and it is possible that in connection with any action a court could find the forum selection clause contained in Anadarko’s by-laws to be inapplicable or unenforceable in such action.