SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
Amendment No. 2
Lyondell Chemical Company
------------------------------------------------------------
(Name of Issuer)
Common Stock
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(Title of Class of Securities)
552078
------------------------------------------------------------
(CUSIP Number)
Donald P. de Brier, Esq.
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
(310) 208-8800
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 7, 2003
------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(e), 13d-1(f) or 13d-1(g), check the following box
[ ]
Page 1 of 14 Pages
CUSIP No. 552078
------
(1) Names of reporting persons. Occidental Petroleum Corporation
I.R.S. Identification Nos. of above persons (entities 95-4035997
only).
(2) Check the appropriate box if a member of a group (a)
(see instructions) (b)
(3) SEC use only.
(4) Source of funds (see instructions). OO, WC
(5) Check if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e).
(6) Citizenship or place of organization. Delaware
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power. 0
(8) Shared voting power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(9) Sole dispositive power. 0
(10) Shared dispositive power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(11) Aggregate amount beneficially owned by each 44,010,972 (including 2,700,000 shares of
reporting person regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
(13) Percent of class represented by amount in Row 24.2%
(11).
(14) Type of reporting person (see instructions). CO
Page 2 of 14 Pages
CUSIP No. 552078
------
(1) Names of reporting persons. Occidental Petroleum Investment Co.
I.R.S. Identification Nos. of above persons (entities 95-2584267
only).
(2) Check the appropriate box if a member of a group (a)
(see instructions) (b)
(3) SEC use only.
(4) Source of funds (see instructions). OO, WC
(5) Check if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e).
(6) Citizenship or place of organization. California
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power. 0
(8) Shared voting power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(9) Sole dispositive power. 0
(10) Shared dispositive power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(11) Aggregate amount beneficially owned by each 44,010,972 (including 2,700,000 shares of
reporting person regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
(13) Percent of class represented by amount in Row 24.2%
(11).
(14) Type of reporting person (see instructions). CO
Page 3 of 14 Pages
CUSIP No. 552078
------
(1) Names of reporting persons. Occidental Chemical Holding Corporation
I.R.S. Identification Nos. of above persons (entities 95-2865897
only).
(2) Check the appropriate box if a member of a group (a)
(see instructions) (b)
(3) SEC use only.
(4) Source of funds (see instructions). OO, WC
(5) Check if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e).
(6) Citizenship or place of organization. California
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power. 0
(8) Shared voting power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(9) Sole dispositive power. 0
(10) Shared dispositive power. 44,010,972 (including 2,700,000 shares of
regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(11) Aggregate amount beneficially owned by each 44,010,972 (including 2,700,000 shares of
reporting person regular Common Stock, 36,310,972 shares
of Series B Common Stock and 5,000,000
shares of Lyondell regular Common Stock
issuable upon exercise of a warrant)
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
(13) Percent of class represented by amount in Row 24.2%
(11).
(14) Type of reporting person (see instructions). CO
Page 4 of 14 Pages
ITEM 1. SECURITY AND ISSUER.
Title of class of equity security: Series B Common Stock
Common Stock
Issuer: Lyondell Chemical Company
Address of principal executive offices: 1221 McKinney Street, Suite 700
Houston, Texas 77010
This Schedule relates to the regular Common Stock of Lyondell, the Series B
Common Stock of Lyondell, and a warrant to acquire shares of the regular Common
Stock of Lyondell. For reporting purposes, the Reporting Person has treated the
Series B Common Stock of Lyondell as being part of the same class under Section
12 of the 1934 Act as the regular Common Stock of Lyondell.
ITEM 2. IDENTITY AND BACKGROUND.
Occidental Petroleum Corporation ("Occidental"):
------------------------------------------------
state of organization: Delaware
principal business: engaged, through its subsidiaries and
affiliates, in the production, development
and marketing of natural resources and
chemicals
principal business address: 10889 Wilshire Boulevard
Los Angeles, California 90024
Occidental Petroleum Investment Co. ("OPIC"):
---------------------------------------------
state of organization: California
principal business: holding company
principal business address: 10889 Wilshire Boulevard
Los Angeles, California 90024
Occidental Chemical Holding Corporation ("OCHC"):
-------------------------------------------------
state of organization: California
principal business: holding company
principal business address: 10889 Wilshire Boulevard
Los Angeles, California 90024
Page 5 of 14 Pages
The name, business address, and current principal occupation or employment
of each of the executive officers and directors of Occidental, OPIC and OCHC
(collectively, the "Companies") are set forth below. Unless otherwise indicated,
the business address of each such person is 10889 Wilshire Boulevard, Los
Angeles, California 90024. All such persons listed below are citizens of the
United States except Mr. Syriani, who is a citizen of Lebanon; Dr. Segovia, who
is a citizen of Colombia; and Mr. Feick, who is a citizen of Canada. Directors
of Occidental are identified by an asterisk (*).
Name and Business Address Present Principal Occupation or Employment
------------------------- ------------------------------------------
Ray R. Irani* Chairman of the Board and Chief Executive Officer of
Occidental
Ronald W. Burkle* Managing Partner and majority owner of The Yucaipa
9130 West Sunset Boulevard Companies
Los Angeles, California 90069
John S. Chalsty* Chairman, Muirfield Capital Management, LLC
10 Rockefeller Center, 8th Floor
New York, New York 10020
Stephen I. Chazen Chief Financial Officer and Executive Vice President -
Corporate Development of Occidental
Donald P. de Brier Executive Vice President, Secretary and General
Counsel of Occidental
Edward P. Djerejian* Director, James A. Baker III Institute for Public Policy
Rice University, MS-40
6100 Main Street
Houston, Texas 77005-1892
S. P. Dominick, Jr. (1)(2) Vice President and Controller of Occidental; President
of OPIC
R. Chad Dreier* President and Chief Executive Officer, The Ryland
24025 Park Sorrento, Suite 400 Group
Calabasas, California 91302
John E. Feick* President and Chief Executive Officer of Matrix
230, 319-2nd Avenue, SW Solutions, Inc.
Calgary, Alberta, Canada T2P OC5
Richard W. Hallock Executive Vice President - Human Resources of
Occidental
J. R. Havert (1)(2) Vice President and Treasurer of Occidental; Vice
President and Treasurer of OPIC; Vice President and
Treasurer of OCHC
Page 6 of 14 Pages
Name and Business Address Present Principal Occupation or Employment
------------------------- ------------------------------------------
Kenneth J. Huffman Vice President - Investor Relations of Occidental
Scott A. King (2) Vice President and General Counsel of OCHC
5005 LBJ Freeway
Dallas, Texas 75244
Dale R. Laurance* President of Occidental
Anthony R. Leach Vice President - Finance of Occidental; Executive Vice
President of OCHC
Irvin W. Maloney* Retired Chairman and Chief Executive Officer,
Dataproducts Corporation
Robert M. McGee Vice President of Occidental
Lawrence P. Meriage Vice President - Communications and Public Affairs of
Occidental
Donald L. Moore Vice President and Chief Information Officer of
5 East Greenway Plaza Occidental
Houston, Texas 77046-0504
John W. Morgan Executive Vice President - Operations of Occidental;
Vice President of OPIC
R. Casey Olson Vice President of Occidental
5 East Greenway Plaza
Houston, Texas 77046-0504
Linda S. Peterson (1) Assistant Secretary of Occidental; Vice President and
Secretary of OPIC; Vice President and Assistant
Secretary of OCHC
Rodolfo Segovia* Member of Executive Committee of Inversiones
Carrera 9A No. 99-02 OF. 1001 Sanford
Santafe de Bogota, D.C. Colombia
Richard A. Swan Vice President - Health, Environment and Safety of
Occidental
Aziz D. Syriani* President and Chief Operating Officer of The Olayan
505 Park Avenue - 11th Floor Group
New York, New York 10022
Page 7 of 14 Pages
Name and Business Address Present Principal Occupation or Employment
------------------------- ------------------------------------------
Rosemary Tomich* Owner of the Hope Cattle Company and the A.S.
Tomich Construction Company; Chairman of the Board
of Directors and Chief Executive Officer, Livestock
Clearing, Inc.
Aurmond A. Watkins, Jr. Vice President - Tax of Occidental; Vice President of
OCHC
Walter L. Weisman* Past Chairman and Chief Executive Officer of
P.O. Box 18017 American Medical International, Inc.
Beverly Hills, California 90209
------------------
(1) Director of OPIC
(2) Director of OCHC
During the last five years, none of the Companies or the natural persons
named above (a) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) was a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Occidental will pay Credit Suisse First Boston ("CSFB") $33,480,000 in cash
to consummate its purchase of 2,700,000 shares of Lyondell's regular Common
Stock. The transaction's expected closing date is October 14, 2003. The source
of these funds is the working capital of Occidental and its subsidiaries.
Occidental did not transfer any funds in exchange for the 594,180 shares of
Series B Common Stock of Lyondell described in Item 5(c), below. The securities
constituted stock dividends.
On August 22, 2002, Occidental paid Lyondell $440 million pursuant to a
Securities Purchase Agreement, dated as of July 8, 2002, between Lyondell and
OCHC (the "Securities Purchase Agreement") and received 34 million shares of
Series B Common Stock and 5,000,000 shares of regular common stock issuable upon
exercise of the Warrant for the Purchase of Shares of Common Stock (the
"Warrant"). 1
--------------------------
1 The $440 million came from general corporate funds received when
Occidental sold to Lyondell three of its affiliates, which owned a 29.5%
interest in Equistar Chemicals, LP.
Page 8 of 14 Pages
ITEM 4. PURPOSE OF TRANSACTION.
As described in Item 5(c), (i) Occidental agreed to purchase 2,700,000
million shares of Lyondell's regular Common Stock from CSFB as part of a public
offering of those shares and (ii) Occidental received 594,180 shares of Series B
Common Stock of Lyondell as a dividend in place of a cash dividend. Pursuant to
Lyondell's Certificate of Incorporation, Lyondell has the right to elect to pay
dividends on its Series B Common Stock with additional shares of Series B Common
Stock rather than cash.
Directly and through OPIC and OCHC, Occidental currently holds its Lyondell
shares for investment purposes only with a view toward maximizing long-term
shareholder value for Occidental's shareholders and not for the purpose of
controlling Lyondell.
Other than as set forth above or in Item 6 of this Schedule 13D, Occidental
currently has no plans that relate to, or would result in, any of the actions
listed in clauses (a) through (j) of Item 4 of Schedule 13D. However, Occidental
continuously reviews and analyzes its investments in each of its subsidiaries
and other operations, including the Lyondell shares, in order to determine
whether value for Occidental's shareholders is best served by holding those
investments, increasing, disposing of, or monetizing those investments, or
recapitalizing or otherwise restructuring those investments. With respect to the
Lyondell shares, these reviews and analyses depend on a variety of factors,
including without limitation, the price of, and other market conditions relating
to, the Lyondell shares, the investment return on the Lyondell shares,
Lyondell's business and prospects, other investment and business opportunities
available to Occidental, general stock market and economic conditions, tax
considerations, and other factors deemed relevant.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Occidental: aggregate number of shares held: 44,010,972*
----------- percentage of class: 24.2%
OPIC: aggregate number of shares held: 44,010,972*
----- percentage of class: 24.2%
OCHC: aggregate number of shares held: 44,010,972*
----- percentage of class: 24.2%
None of the directors or executive officers listed in Item 2 above is the
beneficial owner of Lyondell common stock, except Ray R. Irani and Stephen I.
Chazen, each of whom holds 1,780 shares of restricted common stock, 1,780 shares
of phantom stock (to be settled for cash upon vesting of the restricted common
stock), and 1,044.6028 deferred stock units (to be settled
--------------------------
* This number includes 2,700,000 shares of regular Common Stock, 36,310,972
shares of Series B Common Stock and 5,000,000 shares of regular Common Stock
issuable upon exercise of the Warrant.
Page 9 of 14 Pages
for cash upon retirement). Each of Dr. Irani's and Mr. Chazen's holdings
constitute less than one percent of Lyondell's common stock.
(b) Occidental: sole power to vote or direct the vote: 0
----------- shared power to vote or direct the vote: 44,010,972*
sole power to dispose or direct the disposition: 0
shared power to dispose or direct the disposition: 44,010,972*
OPIC: sole power to vote or direct the vote: 0
----- shared power to vote or direct the vote: 44,010,972*
sole power to dispose or direct the disposition: 0
shared power to dispose or direct the disposition: 44,010,972*
OCHC: sole power to vote or direct the vote: 0
----- shared power to vote or direct the vote: 44,010,972*
sole power to dispose or direct the disposition: 0
shared power to dispose or direct the disposition: 44,010,972*
None of the directors or executive officers listed in Item 2 above is the
beneficial owner of Lyondell common stock, except Ray R. Irani and Stephen I.
Chazen, each of whom holds 1,780 shares of restricted common stock, 1,780 shares
of phantom stock (to be settled for cash upon vesting of the restricted common
stock), and 1,044.6028 deferred stock units (to be settled for cash upon
retirement). Each of Dr. Irani's and Mr. Chazen's holdings constitute less than
one percent of Lyondell's common stock.
(c) On October 7, 2003, Occidental entered into a letter agreement with CSFB
(the "Letter Agreement") that obligates Occidental or one of its affiliates to
purchase 2,700,000 shares of Lyondell regular Common Stock at $12.40 per share.
Occidental will pay CSFB $33,480,000 in cash to consummate this transaction,
which is expected to close on October 14, 2003. On September 30, 2003,
Occidental received a stock dividend of 594,180 shares of Series B Common Stock
of Lyondell.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Pursuant to the Letter Agreement, in addition to agreeing to purchase the
2,700,000 shares of Lyondell regular Common Stock, Occidental agreed not to
dispose of, or request registration of, any of its Lyondell shares for ninety
days from the public offering date stated in
--------------------------
* This number includes 2,700,000 shares of regular Common Stock, 36,310,972
shares of Series B Common Stock and 5,000,000 shares of regular Common Stock
issuable upon exercise of the Warrant.
Page 10 of 14 Pages
the prospectus for Lyondell's public offering (the "Lock-Up Period"). The two
Occidental officers who serve on Lyondell's board of directors (as described in
more detail below) entered into separate agreements with CSFB that provided that
they would not dispose of any of their Lyondell shares during the Lock-Up
Period. Also in connection with the Letter Agreement, Occidental and Lyondell
entered into a First Amendment to Stockholder's Agreement, dated as of October
7, 2003 (the "Amendment"). The Amendment provided a specific waiver of
Occidental's obligations (stated in the Stockholder's Agreement) that it would
not acquire, or agree to acquire, any Lyondell securities.
Pursuant to the Securities Purchase Agreement, OCHC purchased from Lyondell
a total of 34,000,000 shares of Lyondell's newly created Series B common stock.
Pursuant to the Warrant, OCHC also received warrants to purchase an additional 5
million shares (the "Warrant Shares") of Lyondell's regular common stock for $25
per share. In exchange for the Lyondell securities, Occidental paid $440,000,000
in cash.
As additional consideration for the transaction, Occidental will receive
from Lyondell a contingent payment equal to 7.38% of cash distributions from
Equistar for 2002 and 2003 up to a total of $35 million, to be paid either in
cash or in Lyondell regular Common Stock or Series B Common Stock.
Pursuant to a Stockholders Agreement, dated as of August 22, 2002 (the
"Stockholders Agreement"), Lyondell has appointed to its board of directors two
of Occidental's executive officers, Dr. Ray R. Irani (who also is an Occidental
director) and Mr. Stephen I. Chazen. Unless Occidental obtains Lyondell's
consent, the Stockholders Agreement prevents Occidental (a) from selling its
Series B common stock or the Warrant Shares and (b) from converting its Series B
common stock into regular Lyondell common stock for at least two years. In
addition, the Stockholders Agreement generally requires Occidental to vote its
Lyondell common stock in favor of the slate of directors proposed by Lyondell's
management. The Stockholders Agreement will be effective as long as Occidental
owns 17 million or more shares of Lyondell common stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Agreement Pursuant to Rule 13d-1(k)
Exhibit 2 Securities Purchase Agreement, dated as of July 8, 2002, by
and between Lyondell Chemical Company and Occidental
Chemical Holding Corporation*
Exhibit 3 Warrant for the Purchase of Shares of Common Stock, issued
August 22, 2002*
Exhibit 4 Stockholders Agreement, dated as of August 22, 2002, by and
among Lyondell Chemical Company and the Stockholders as
defined therein*
--------
* Previously filed.
Page 11 of 14 Pages
Exhibit 5 Letter Agreement dated as of October 7, 2003
Exhibit 6 First Amendment to Stockholders Agreement, dated as of
October 7, 2003
Page 12 of 14 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
October 10, 2003 OCCIDENTAL PETROLEUM CORPORATION
By: /s/ J. R. HAVERT
------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
OCCIDENTAL PETROLEUM INVESTMENT CO.
By: /s/ J. R. HAVERT
------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
OCCIDENTAL CHEMICAL HOLDING CORPORATION
By: /s/ J. R. HAVERT
------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
Page 13 of 14 Pages