BOARD STRUCTURE AND OPERATION
Size of the Board
In determining the size of the Board, the Board of Directors will consider the level of work required from each director, including the requirement that certain Committees be composed entirely of independent directors.
Independent directors (as defined below) will comprise at least two-thirds of the members of the Board. No former Chief Executive officer of Occidental will be eligible to serve on the Board.
An "independent director" is a director who:
- Has not been employed by Occidental within the last five years;
- Has not been an employee or affiliate of any present or former internal or external auditor of Occidental within the last three years;
- Has not received more than $60,000 in direct compensation from Occidental, other than director and committee fees, during the current fiscal year or any of the last three completed fiscal years;
- Has not been an executive officer or employee of a company that made payments to, or received payments from, Occidental for property or services in an amount exceeding the greater of $1 million or 2 percent of such other company’s consolidated gross revenues during the current fiscal year;
- Has not been employed by a company of which an executive officer of Occidental has been a director within the last three years;
- Is not affiliated with a not-for-profit entity that received contributions from Occidental exceeding the greater of $1 million or 2 percent of such charitable organization’s consolidated gross revenues during the current fiscal year or any of the last three completed fiscal years;
- Has not had any of the relationships described above with an affiliate of Occidental; and
- Is not a member of the immediate family of any person described above. An "immediate family member" includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than domestic employees) who shares such person’s home.
In order for a director to qualify as an "independent director," the Board must affirmatively determine that the director satisfies the foregoing criteria.
Each director will be elected for a term of one year.
No person 75 or older will be elected a director, unless as to such person such requirement is unanimously waived by the members of the Corporate Governance, Nominating and Social Responsibility Committee and such Committee’s action is ratified and approved by a majority of the disinterested directors on the Board of Directors.
No director of Occidental will hold more than four "for-profit" corporate directorships (including his or her Occidental directorship) at any one time.
Director Stock Ownership
Each director will beneficially own a number of shares of common stock of Occidental having a market price equal to six times the annual cash retainer for non-employee directors within five years of his or her election to the Board.
Compensation for directors will promote ownership of Occidental's stock to align the interests of directors and stockholders and the independence of directors.
In connection with each regularly scheduled Board meeting, the independent directors will hold an executive session at which employee directors and other members of management are not present.
The Committees of the Board will have standing authorization (including funding), on their own decision, to consult with members of management and to retain legal or other advisors of their choice, which advisors will report directly to the Committee that retained them.
Chairman of the Board
The Board will elect a Chairman from among the Independent Directors to perform the duties delegated to him pursuant to the by-laws, including:
- Propose an appropriate schedule of Board meetings and the information that shall be provided by management for Board consideration
- Approve the agendas for the Board and Committee meetings
- Recommend the retention of consultants who report directly to the Board
- Assist in assuring compliance with the Corporate Governance Policies and in recommending revisions to the policies
- Call, coordinate and develop the agenda for and moderate executive sessions of the independent directors at which no members of management are present
- Evaluate, along with the members of the Executive Compensation Committee and the other independent directors, the performance of the Chief Executive Officer
- Communicate to the Chief Executive Officer the views of the independent directors and the Board committees with respect to objectives set for management by the Board
- Consult with other members of the Board as to recommendations on membership and chairpersons of all the Board Committees and discusses such recommendations with the Corporate Governance, Nominating and Social Responsibility Committee and the Board
- Serve as liaison between the Board and stockholders, communicating their views to the Boar
Vice Chairman of the Board
The Board may elect a Vice Chairman from among the Independent Directors to perform the duties of the Chairman of the Board in the absence or disability of the Chairman and such other duties as may be delegated to him pursuant to the By-laws.
Tenure of the Board and Committee Chairs
The Chairs of the Board Committees and the Chairman and Vice Chairman of the Board will be rotated at least every five years.
Membership of Committees
The Corporate Governance, Nominating and Social Responsibility Committee, the Executive Compensation Committee and the Audit Committee will be composed entirely of independent directors and will also satisfy all applicable membership requirements for such.
The Corporate Governance, Nominating and Social Responsibility Committee, the Executive Compensation Committee and the Audit Committee will each have a written charter that addresses the committee’s purpose, duties, responsibilities and annual performance evaluation.
The Board is committed to achieving a diverse and broadly inclusive membership.
The Board will hold at least six regularly scheduled meetings each year.
Director Orientation and Education
Each new director will be provided with materials and information concerning Occidental in order to enable the director to perform the duties of a director. In addition, directors will be provided with continuing education, including business-specific learning opportunities through site visits and briefing sessions on topics that are relevant to Occidental. Directors are also encouraged to attend additional continuing education programs designed to enhance the performance of individual directors and the Board of Directors. Occidental will pay reasonable expenses for a director’s participation in non-company continuing education programs.
Each director will use his or her best efforts to attend, in person or by telephone, all meetings of the Board and the committees to which such director is appointed. Each director is responsible for being familiar with Occidental’s Corporate Governance Policies, the provisions of the Code of Business Conduct applicable to directors and the charter of each committee on which such director serves and for reviewing materials provided in advance of Board and committee meetings.
The Board will establish performance criteria for itself and, annually, will evaluate each director, committee and the overall Board. Board evaluation will include an assessment of, among other things, whether the Board and its committees are functioning effectively and have the necessary diversity of skills, backgrounds and experiences to meet Occidental's needs. Individual director evaluations will include high standards for in-person attendance at Board and committee meetings.
The Management Succession and Talent Development Committee of the Board of Directors will review on a regular basis Occidental’s policies and principles for recruiting, developing and selecting the persons to succeed the CEO and other executive officers and will report to the Board with respect thereto at least once a year. The review will encompass the background, training, qualities and other characteristics that would be desirable in candidates to succeed the CEO and other executive officers as well as consideration of possible successors.
Communications with Directors
Interested parties may communicate with any non-management director by sending a letter to such director’s attention in care of Occidental’s Corporate Secretary, 5 Greenway Plaza, Houston, Texas 77046-0506.