DESCRIPTION OF OCCIDENTAL CAPITAL STOCK
The following describes the material terms of the capital stock of Occidental. This description is qualified in its entirety by reference to the restated certificate of incorporation, as amended on May 5, 2006, May 1, 2009 and May 2, 2014 (“Occidental’s certificate of incorporation”), and amended and restated by-laws, as adopted on May 5, 2019 (“Occidental’s by-laws”), of Occidental, which are incorporated by reference into this proxy statement/prospectus. For more information about the documents incorporated by reference into this proxy statement/prospectus, see “Where You Can Find More Information” on page .
The authorized capital stock of Occidental currently consists of one billion and one hundred million shares of common stock, par value $0.20 per share, and fifty million shares of preferred stock, par value $1.00 per share. As of July 8, 2019, the most recent practicable date for which such information was available, there were 748,306,455 shares of Occidental common stock outstanding and no shares of Occidental preferred stock outstanding.
Occidental Common Stock
Subject to the dividend rights of the holders of any outstanding series of preferred stock to be issued in the future, including the series A preferred stock to be issued at the closing of the merger pursuant to the Berkshire Hathaway investment, holders of Occidental common stock will be entitled to receive dividends when, as and if declared by the Occidental Board. Occidental will pay those dividends either in cash, shares of common stock, or otherwise, at the rate and on the date or dates as declared by the Occidental Board. Accruals of dividends will not bear interest. As a Delaware corporation, Occidental is subject to statutory limitations on the declaration and payment of dividends.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of Occidental’s affairs, holders of Occidental common stock would be entitled to share ratably in Occidental’s assets that are legally available for distribution to stockholders after payment of liabilities, and after the payment in full of the amounts required to be paid to the holders of any outstanding class or series of preferred stock, including the series A preferred stock. Because Occidental is a holding company, holders of common stock may not receive assets of Occidental’s subsidiaries in the event of Occidental’s liquidation until the claims of creditors of Occidental’s subsidiaries are paid, except to the extent that Occidental is a creditor of, and may have recognized claims against, such subsidiaries. Each holder of common stock entitled to vote will have one vote for each one share of common stock held on all matters to be voted upon by Occidental stockholders, including elections of directors. Holders of Occidental common stock have no conversion, redemption, preemptive, subscription or similar rights.
All outstanding shares of Occidental common stock are, and the shares of Occidental common stock to be issued in the merger will be, validly issued, fully paid and non-assessable. At July 8, 2019, the most recent practicable date for which such information was available, there were approximately 22,933 holders of record of Occidental common stock.
Occidental has also agreed to issue and sell to Berkshire Hathaway on the closing date of the merger, subject to certain conditions, a warrant to acquire 80 million shares of Occidental common stock at an exercise price of $62.50 per share and, in connection therewith, to enter into a registration rights agreement with respect to such Occidental common stock. See “The Merger—Financing of the Merger and Treatment of Existing Debt—Berkshire Hathaway Investment” beginning on page .
Occidental Preferred Stock
Occidental’s certificate of incorporation expressly authorizes the Occidental Board to issue preferred stock in one or more series, to fix, from time to time, before issuance, the number of shares to be included in any series and the designation, relative powers, preferences and rights and qualifications, limitations or restrictions of all shares of such series.
Occidental has agreed to issue and sell to Berkshire Hathaway on the closing date of the merger, subject to certain conditions, 100,000 shares of a new series of cumulative perpetual preferred stock of Occidental, with a face value of $100,000 per share (the “series A preferred stock”). The series A preferred stock has no maturity date and is generally non-voting (except with respect to issuances of senior stock and certain other transactions or modifications affecting the rights of the series A preferred stock). The series A preferred stock will rank senior to the outstanding shares of Occidental common stock with respect to the payment of dividends and distributions
in liquidation and has a liquidation price of 105% of the face value plus any accrued and unpaid dividends (whether or not declared). So long as any share of the series A preferred stock remains outstanding, Occidental may not declare or pay dividends on Occidental common stock and Occidental may not purchase, redeem or otherwise acquire for consideration any Occidental common stock unless all accrued and unpaid dividends on all outstanding shares of series A preferred stock have been, or are contemporaneously, declared and paid in full and Occidental has paid, or will contemporaneously pay, in full any portion of the redemption price required to be paid pursuant to the certificate of designations for the series A preferred stock. For more information about the series A preferred stock and the Berkshire Hathaway investment, see “The Merger—Financing of the Merger and Treatment of Existing Debt—Berkshire Hathaway Investment” beginning on page .
