SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-12
Kerr-McGee Corporation
(Name of Registrant as Specified In Its Charter)
Icahn Partners LP
Icahn Partners Master Fund LP
High River Limited Partnership
Carl C. Icahn
Keith A. Meister
Vincent J. Intrieri
JANA Partners LLC
JANA Master Fund, Ltd.
Barry S. Rosenstein
August H. Roth
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
1
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
2
2005 ANNUAL MEETING OF STOCKHOLDERS
OF
KERR-MCGEE CORPORATION
-------------------
PROXY STATEMENT [PRELIMINARY COPY]
OF
ICAHN PARTNERS LP,
ICAHN PARTNERS MASTER FUND LP,
HIGH RIVER LIMITED PARTNERSHIP
AND
JANA PARTNERS LLC
-------------------
To Our Fellow Kerr-McGee Stockholders:
This Proxy Statement and the accompanying GOLD proxy card are being
furnished to stockholders ("Stockholders") of Kerr-McGee Corporation
("Kerr-McGee") in connection with the solicitation of proxies by Carl C. Icahn,
Barry S. Rosenstein and certain of their affiliates and associates, to be used
at the 2005 Annual Meeting of Stockholders of Kerr-McGee which is scheduled to
be held at 9:00 a.m. on Tuesday, May 10, 2005, in the Robert S. Kerr Auditorium,
Kerr-McGee Center, 123 Robert S. Kerr Avenue, Oklahoma City, Oklahoma, and at
any adjournments, postponements or continuations thereof (the "Annual Meeting").
This Proxy Statement and the GOLD proxy card are first being furnished to
Stockholders on or about April __, 2005.
At the Annual Meeting, the Participants (as hereinafter defined) will
seek to elect to the Board of Directors of Kerr-McGee a slate of two nominees,
comprised of Carl C. Icahn and Barry S. Rosenstein. Each of the nominees (each a
"Nominee" and, collectively, the "Nominees") has consented, if elected, to serve
as a director.
Subject to their fiduciary duties to Stockholders, the Nominees will,
if elected, attempt to convince Kerr-McGee's Board of Directors to take actions
(such as those previously proposed by the Nominees) to enhance Stockholder
value. Specifically, the Nominees will advocate that Kerr-McGee attempt to take
advantage of the spread between the valuation that the stock market currently
places on Kerr-McGee based on its proved reserves and the higher value at which
oil and gas futures are trading in the commodity markets.
PLEASE NOTE THAT WE CANNOT ASSURE YOU THAT WE WILL BE ABLE TO NOMINATE DIRECTORS
AT THE ANNUAL MEETING. KERR-MCGEE HAS FILED A LAWSUIT SEEKING A DECLARATION THAT
THE NOMINATION OF THE NOMINEES FOR ELECTION AS DIRECTORS AT THE ANNUAL MEETING
IS INVALID BECAUSE, ACCORDING TO KERR-MCGEE, WE FAILED TO COMPLY WITH ITS
ADVANCE NOTICE BYLAW. ALTHOUGH WE BELIEVE KERR-MCGEE'S CLAIMS HAVE ABSOLUTELY NO
MERIT, WE CANNOT PREDICT THE OUTCOME OF LITIGATION. THAT WILL BE DECIDED BY A
FEDERAL COURT IN OKLAHOMA. STOCKHOLDERS WHO SUBMIT GOLD PROXY CARDS SHOULD BE
AWARE THAT THEIR SHARES MAY
3
NOT BE VOTED IN THE ELECTION OF DIRECTORS IF KERR-MCGEE IS SUCCESSFUL IN THE
LITIGATION.
DON'T LET KERR-MCGEE PREVENT YOU FROM CHOOSING FOR YOURSELF!
Kerr-McGee has filed a lawsuit in federal court in Oklahoma against the
Nominees and certain of their respective affiliates, seeking, among other
things, a court order declaring that the nomination of the Nominees at the
Annual Meeting is invalid because of a purported failure to comply with
Kerr-McGee's advanced notice bylaw. Thus, instead of debating on the merits and
permitting Stockholders to choose directors for themselves, Kerr-McGee is
attempting to prevent the Nominees from being nominated at all - thus leaving
you with NO CHOICE but the existing directors. If the court should grant the
relief requested by Kerr-McGee, the Nominees will not be able to be nominated at
the Annual Meeting and you will not be permitted to cast your vote for the
Nominees. Because only a plurality vote (as opposed to a majority) is required
to elect Kerr-McGee directors, if Kerr-McGee succeeds in having its existing
directors run unopposed they will be re-elected even if an overwhelming majority
of the votes cast withhold support for them - only a single affirmative vote
would be necessary to ensure their re-election!
YOU CAN MAKE YOUR VOICE HEARD BY NOT RETURNING THE WHITE PROXY CARD SENT TO YOU
BY KERR-MCGEE AND BY SIGNING, DATING AND RETURNING THE GOLD PROXY CARD IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE, WHICH WILL REVOKE ALL PRIOR PROXIES.
WHY WON'T KERR-MCGEE ALLOW YOU TO CHOOSE FOR YOURSELF?
In this era of sweeping corporate governance reforms and enhanced
efforts by the Securities and Exchange Commission to foster corporate democracy,
Kerr-McGee seems to be going in the opposite direction. In addition to a poison
pill, blank-check preferred stock and various other devices that could have an
anti-takeover effect (including the proposed increase in the number of
authorized shares of Common Stock described in Kerr-McGee's Proxy Statement),
Kerr-McGee has adopted numerous provisions that have the effect of preventing or
severely limiting the ability of Stockholders to act in a manner that may
challenge existing directors and management. Below is a list of only some of
these provisions:
o Stockholders do not have the right to call special meetings. Special
meetings of the Stockholders may be called only by the Chief Executive
Officer of Kerr-McGee or by the Secretary at the direction of the Board
of Directors.
o Stockholders do not have the right to act by written consent. Any
action required or permitted to be taken by the Stockholders must be
effected at a duly called annual or special meeting of Stockholders.
o Stockholders may not nominate persons for election to the Board of
Directors of Kerr-McGee or propose other business to be conducted at
stockholder meetings unless they comply with advance notice procedures
requiring the delivery of information to Kerr-McGee not less than 70
days nor more than 90 days prior to the first anniversary of the
preceding year's annual meeting.
4
o Kerr-McGee's Board of Directors is staggered - i.e., the Board of
Directors is divided into three classes, with each class being elected
for a term of three years. The effect of this classification of
directors is that Stockholders are only able to elect approximately
one-third of the Board of Directors each year.
o Any vacancies in the Board of Directors, as well as newly created
directorships resulting from any increase in the authorized number of
directors, may be filled only by a majority of the remaining directors
then in office.
o Directors may be removed from the Board only for cause, and then only
by a supermajority Stockholder vote.
o Kerr-McGee's certificate of incorporation provides that no director
shall be liable to Kerr-McGee -- or to the Stockholders -- for monetary
damages for breach of fiduciary duty as a director.
Ask yourself - are these provisions in place for YOUR benefit? Or are these
provisions in place to help ensure that Kerr-McGee's directors remain
unchallenged, regardless of how poorly they perform? It seems to us rather
backwards that the owners of Kerr-McGee - the Stockholders - should be hampered
in their efforts to effect change by the Board of Directors -- the very people
the Stockholders have appointed to safeguard their interests! Kerr-McGee's
directors and executive officers have only a tiny stake in Kerr-McGee - 1.3%,
according to Kerr-McGee's Proxy Statement. Should this small group be permitted
to prevent the holders of over 98% of Kerr-McGee's stock from having the freedom
to choose their own fiduciaries? We think not. The absurdity of this situation
may be illustrated by the following analogy. Imagine that the owners of a store
have hired a security guard to protect their business - should that security
guard be allowed to prevent the owners from entering their own store to make
changes? Should that security guard further be allowed to prevent his employers
from finding a new security guard in the event that he does not perform his
duties to the satisfaction of the owners? We think not.
THE NOMINEES ARE COMMITTED TO ACTING IN THE BEST INTEREST OF ALL THE
STOCKHOLDERS. WE BELIEVE THAT YOUR VOICE IN THE FUTURE OF KERR-MCGEE CAN BEST BE
EXPRESSED THROUGH THE ELECTION OF CARL C. ICAHN AND BARRY S. ROSENSTEIN.
ACCORDINGLY, WE URGE YOU TO SIGN AND RETURN YOUR GOLD PROXY CARD TODAY.
IF YOU HAVE ALREADY SUBMITTED A KERR-MCGEE PROXY, YOU MAY REVOKE YOUR PROXY BY
DELIVERING A LATER-DATED GOLD PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. WE WILL CONTINUE TO URGE KERR-MCGEE TO PERMIT US TO VOTE ALL PROXIES
AS INSTRUCTED, INCLUDING FOR THE NOMINEES.
YOU MAY ALSO REVOKE ANY PROXY YOU HAVE ALREADY GRANTED BY ATTENDING THE ANNUAL
MEETING AND VOTING IN PERSON.
IF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK NOMINEE OR
OTHER INSTITUTION ON THE RECORD DATE, ONLY IT CAN VOTE SUCH SHARES AND ONLY UPON
RECEIPT OF YOUR SPECIFIC INSTRUCTIONS.
5
ACCORDINGLY, PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT
THAT PERSON TO EXECUTE ON YOUR BEHALF THE GOLD PROXY CARD AS SOON AS POSSIBLE.
Mr. Icahn, Mr. Rosenstein and each of the other Participants have no
interest in Kerr-McGee other than as Stockholders.
IMPORTANT
The election of the Nominees requires the affirmative vote of a
plurality of the votes cast, assuming a quorum is present or otherwise
represented at the Annual Meeting. As a result, your vote is extremely important
in deciding the future of Kerr-McGee. We urge you to mark, sign, date and return
the enclosed GOLD proxy card today.
Only holders of record of Kerr-McGee's voting securities as of the
close of business on March 11, 2005 (the "Record Date") are entitled to notice
of, and to attend and to vote at, the Annual Meeting and any adjournments or
postponements thereof. According to the proxy statement of Kerr-McGee filed with
the Securities and Exchange Commission ("Kerr-McGee's Proxy Statement"), as of
the Record Date, there were outstanding 163,442,818 shares of common stock, par
value $1.00 per share (the "Common Stock"). Stockholders of record at the close
of business on the Record Date will be entitled to one vote at the Annual
Meeting for each share of Common Stock of Kerr-McGee held on the Record Date.
As of the Record Date, the Participants and their affiliates
beneficially owned an aggregate of 9,907,100 shares of Common Stock,
representing approximately 6.1% of the outstanding shares of Common Stock.1 The
Participants and their affiliates intend to vote such shares FOR the election of
the Nominees.
PLEASE VOTE FOR CARL C. ICAHN AND BARRY S. ROSENSTEIN BY RETURNING YOUR
COMPLETED GOLD PROXY TODAY.
If you have any questions about giving your proxy or require
assistance, please call:
D.F. King & Co., Inc.
48 Wall Street
New York, NY 10005
Call Toll-Free: l-888-605-1957
Banks and Brokerage Firms Call Toll-Free: 1-212-269-5550
Participants in Solicitation of Proxies
------------
(1) These amounts do not include options to purchase shares of Common Stock held
by the JANA Parties (as hereinafter defined) as of the Record Date, as such
shares are not eligible to be voted by the JANA Parties at the Annual Meeting.
6
In addition to the Nominees (who are Mr. Carl C. Icahn and Mr. Barry S.
Rosenstein), the participants in the solicitation of proxies (the
"Participants") are Icahn Partners LP ("Icahn Partners"), Icahn Partners Master
Fund LP ("Icahn Master"), High River Limited Partnership ("High River"), JANA
Partners LLC ("JANA"), JANA Master Fund, Ltd. ("JANA Master"), Mr. Keith A.
Meister, Mr. Vincent J. Intrieri and Mr. August H. Roth.
Icahn Partners, Icahn Master and High River (collectively, the "Icahn
Parties") are entities controlled by Carl C. Icahn. JANA and JANA Master
(collectively, the "JANA Parties") are entities controlled by Barry S.
Rosenstein and Gary Claar. Keith A. Meister and Vincent J. Intrieri are
employees of the Icahn Parties who may also participate in soliciting proxies
from Kerr-McGee Stockholders. August H. Roth is an employee of JANA who may also
participate in soliciting proxies from Kerr-McGee Stockholders. Messrs. Meister,
Intrieri and Roth do not own beneficially any interest in securities of
Kerr-McGee, and none will receive any special compensation in connection with
such solicitation.
The Icahn Parties
Icahn Partners is a Delaware limited partnership principally engaged in
the business of investing in securities. Icahn Onshore LP ("Icahn Onshore") is a
Delaware limited partnership primarily engaged in the business of acting as the
general partner of Icahn Partners. CCI Onshore LLC ("CCI Onshore") is a Delaware
limited liability company primarily engaged in the business of acting as the
general partner of Icahn Onshore. CCI Onshore is wholly owned by Mr. Icahn.
Icahn Master is a Cayman Islands exempted limited partnership
principally engaged in the business of investing in securities. Icahn Offshore
LP ("Icahn Offshore") is a Delaware limited partnership primarily engaged in the
business of acting as the general partner of Icahn Master. CCI Offshore LLC
("CCI Offshore") is a Delaware limited liability company primarily engaged in
the business of acting as the general partner of Icahn Offshore. CCI Offshore is
wholly owned by Mr. Icahn.
High River is a Delaware limited partnership principally engaged in the
business of investing in securities. Hopper Investments LLC ("Hopper") is a
Delaware limited liability company that serves as the general partner of High
River. Barberry Corp. ("Barberry") is a Delaware corporation that serves as the
sole member of Hopper. Each of Hopper and Barberry is primarily engaged in the
business of investing in securities. Barberry is wholly owned by Mr. Icahn.
Keith A. Meister, age 32, has been a senior investment analyst of High
River since June 2002. Mr. Meister is also a Senior Investment Analyst of Icahn
Partners LP and Icahn Partners Master Fund LP. He is also a director of Icahn
Fund Ltd., which is the feeder fund of Icahn Partners Master Fund LP. Since
August 2003, Mr. Meister has served as the President and Chief Executive Officer
of American Property Investors, Inc., which is the general partner of American
Real Estate Partners, L.P., a public limited partnership controlled by Mr. Icahn
that invests in real estate and holds various other interests, including the
interests in its subsidiaries that are engaged, among other things, in the oil
and gas business and casino entertainment business. From March 2000 through the
end of 2001, Mr. Meister co-founded and served as co-president of J Net
Ventures, a venture capital fund focused on investments in information
technology and enterprise software businesses. From 1997 through 1999, Mr.
Meister served as
7
an investment professional at Northstar Capital Partners, an opportunistic real
estate investment partnership. Prior to his work at Northstar, Mr. Meister
served as an investment analyst in the investment banking group at Lazard
Freres. Mr. Meister is a director of TransTexas Gas Corporation, an oil and gas
exploration company controlled by Carl C. Icahn. Mr. Meister serves on the Board
of Directors of XO Communications, Inc., a publicly held telecommunications
company controlled by Mr. Icahn. Mr. Meister also is a director of American
Entertainment Properties Corp. and American Casino & Entertainment Properties
Finance Corp., which are gaming companies controlled by American Real Estate
Partners, L.P., which is controlled by Mr. Icahn. Mr. Meister received his A.B.
in Government cum laude from Harvard College in 1995.
Vincent J. Intrieri, age 48, is a Senior Managing Director of Icahn
Partners LP and Icahn Partners Master Fund LP. Since January 1, 2005 Mr.
Intrieri has been Senior Managing Director of High River and Icahn Associates
Corp., an entity controlled by Mr. Icahn whose principal business is to hold a
lease to premises at 767 Fifth Avenue, New York, New York. From March 2003 to
December 2004 Mr. Intrieri served as a Managing Director and from 1998 to March
2003, he served as a portfolio manager of Icahn Associates Corp. and High River.
From 1995 to 1998, Mr. Intrieri served as portfolio manager for distressed
investments with Elliott Associates L.P., a New York investment fund. Prior to
1995, Mr. Intrieri was a partner at the Arthur Anderson accounting firm. Mr.
Intrieri is a certified public accountant. Mr. Intrieri is a director of
TransTexas Gas Corporation and Panaco Inc., each of which is an oil and gas
exploration company controlled by Carl C. Icahn. Mr. Intrieri is Chairman of the
Board of Directors and a director of Viskase Companies, Inc., a publicly owned
producer of cellulosic and plastic casings used in preparing and packaging
processed meat products, in which Carl C. Icahn has an interest through the
ownership of securities. In addition, Mr. Intrieri serves on the board of
directors of XO Communications, Inc., a publicly owned telecommunications
company controlled by Carl C. Icahn. Mr. Intrieri received a B.S. in Accounting
in 1984 from The Pennsylvania State University.
The address of each of Icahn Partners, Icahn Onshore, CCI Onshore,
Icahn Master, Icahn Offshore, CCI Offshore, High River, Hopper, Barberry and
Messrs. Icahn, Meister and Intrieri is c/o Icahn Associates Corp., 767 Fifth
Avenue, 47th Floor, New York, New York 10153.
Mr. Icahn, through his control of the Icahn Parties, may be deemed to
be the indirect beneficial owner of 8,244,100 shares of the Common Stock, which
represents approximately 5.04% of outstanding shares of Common Stock.2 In
addition, Mr. Icahn may be deemed to be a member of a "group" (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), comprised of the Icahn Parties and the JANA Parties,
which beneficially owns 12,632,800 shares of the Common Stock, representing
approximately 7.7% of outstanding shares of Common Stock. However, neither the
fact of this filing nor anything contained herein shall be deemed to be an
admission by Mr. Icahn or any of the Icahn Parties that they are the beneficial
owners of any shares of Common Stock beneficially owned by the JANA Parties.
High River is the direct beneficial owner of 1,648,820 shares of the
Common Stock, Icahn Master is the direct beneficial owner of 3,365,557 shares of
the Common Stock, and Icahn Partners is the direct beneficial owner of 3,229,723
shares of the Common Stock. Hopper,
-------------
(2) Except as otherwise noted herein, all share amounts are reported as of the
close of business on April 7, 2005.
8
as the general partner of High River, and Barberry, as the sole member of
Hopper, may each be deemed to be the indirect beneficial owner of the shares of
Common Stock directly owned by High River. Icahn Offshore, as the general
partner of Icahn Master, and CCI Offshore, as the general partner of Icahn
Offshore, may each be deemed to be the indirect beneficial owner of the shares
of Common Stock directly owned by Icahn Master. Icahn Onshore, as the general
partner of Icahn Partners, and CCI Onshore, as the general partner of Icahn
Onshore, may each be deemed to be the indirect beneficial owner of the shares of
Common Stock directly owned by Icahn Partners. Carl C. Icahn, as the sole
stockholder of Barberry and the sole member of each of CCI Offshore and CCI
Onshore, may be deemed to be the indirect beneficial owner of the shares of
Common Stock directly owned by High River, Icahn Master and Icahn Partners.
The purchase of the 8,244,100 shares of Common Stock owned by the Icahn
Parties was made with the respective general working capital of the purchasers
and, with respect to High River, pursuant to margin accounts in the regular
course of business. As of the date hereof, the Icahn Parties have no Common
Stock in any of their margin accounts.
All transactions in the securities of Kerr-McGee effected within the
past 2 years by each Participant are contained in Appendix I attached hereto.
The JANA Parties
JANA is a Delaware limited liability company principally engaged in the
business of making investments. JANA Master is a Cayman Islands exempted company
principally engaged in the business of making investments. JANA serves as the
investment manager to JANA Master and a separate managed account.
August H. Roth, age 26, is an investment analyst employed by JANA.
The address of each of JANA, JANA Master and Messrs. Rosenstein and
Roth is 201 Post Street, San Francisco, CA 94108.
Mr. Rosenstein, through his control of the JANA Parties, may be deemed
to be the indirect beneficial owner of 4,388,700 shares of the Common Stock
(including options to purchase 1,587,600 shares of Common Stock), which
represents approximately 2.7% of outstanding shares of Common Stock. In
addition, Mr. Rosenstein may be deemed to be a member of a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act), comprised of the JANA Parties
and the Icahn Parties, which beneficially owns 12,632,800 shares of the Common
Stock, representing approximately 7.7% of outstanding shares of Common Stock.
However, neither the fact of this filing nor anything contained herein shall be
deemed to be an admission by Mr. Rosenstein or any of the JANA Parties that they
are the beneficial owners of any shares of Common Stock beneficially owned by
the Icahn Parties.
JANA Master is the direct beneficial owner of 4,006,535 shares of
Common Stock (including options to purchase 1,449,200 shares of Common Stock).
In addition, a separate account managed by JANA is the direct beneficial owner
of 382,165 shares of Common Stock (including options to purchase 138,400 shares
of Common Stock). JANA, as the investment manager to both JANA Master and the
managed account, may be deemed to be the indirect beneficial owner of the shares
of Common Stock directly beneficially owned by such parties.
9
Barry S. Rosenstein, as a managing member of JANA, may be deemed to be the
indirect beneficial owner of the shares of Common Stock directly beneficially
owned by such parties.
The purchase of the 4,388,700 shares of Common Stock beneficially owned
by JANA Master and the managed account was made with respective working capital
of such parties. As of the date hereof, JANA Master and the managed account have
no shares of Common Stock in margin accounts.
All transactions in the securities of Kerr-McGee effected within the
past 2 years by each Participant are contained in Appendix I attached hereto.
Information with respect to all options to purchase shares of Common Stock owned
beneficially by the JANA Parties is contained in Appendix II attached hereto.
Certain Information Regarding the Icahn Parties and the JANA Parties
The Icahn Parties and the JANA Parties may be deemed to be members of a
"group" within the meaning of Section 13(d)(3) of the Exchange Act. As such, the
"group" may be deemed to beneficially own all of the shares of Common Stock
owned by the Icahn Parties and the JANA Parties. Accordingly, the "group" may be
deemed to be beneficially own 12,632,800 shares of Common Stock in the
aggregate, constituting approximately 7.7% of the shares of Common Stock
outstanding. However, neither the fact of this filing nor anything contained
herein shall be deemed to be an admission by any of (i) the Icahn Parties that
they are the beneficial owners of shares beneficially owned by the JANA Parties
or (ii) the JANA Parties that they are the beneficial owners of shares
beneficially owned by any of the Icahn Parties.
ELECTION OF DIRECTORS
According to Kerr-McGee's Proxy Statement, Kerr-McGee's board of
directors intends to nominate two candidates for election as directors at the
Annual Meeting. The Participants propose that Kerr-McGee Stockholders elect Carl
C. Icahn and Barry S. Rosenstein as directors of Kerr-McGee at the Annual
Meeting. Each Nominee, if elected, would hold office until the 2008 Annual
Meeting of Stockholders and until a successor has been duly elected and
qualified.
Background information about the Nominees is set forth below. The
Nominees are not receiving any compensation from any of the Participants or any
of their affiliates in connection with this proxy solicitation.
CARL C. ICAHN, age 69, has served as Chairman of the Board and a director of
Starfire Holding Corporation ("Starfire") (formerly Icahn Holding Corporation),
a privately-held holding company, and Chairman of the Board and a director of
various subsidiaries of Starfire, since 1984. Mr. Icahn is and has been since
1994 a majority shareholder, the Chairman of the Board and a Director of
American Railcar Industries, Inc. ("ARI"), a Missouri corporation. ARI is
primarily engaged in the business of manufacturing, managing, leasing and
selling of railroad freight and tank cars. Mr. Icahn has also been Chairman of
the Board and President of Icahn & Co., Inc., a registered broker-dealer and a
member of the National Association of Securities Dealers, since 1968. Since
November 1990, Mr. Icahn has been Chairman of the Board of American Property
Investors, Inc., the general partner of American Real Estate Partners, L.P., a
10
public limited partnership that invests in real estate and holds various other
interests, including the interests in its subsidiaries that are engaged, among
other things, in the oil and gas business and casino entertainment business. Mr.
Icahn has been a director of Cadus Pharmaceutical Corporation, a firm that holds
various biotechnology patents, since 1993. From August 1998 to August 2002, Mr.
Icahn served as Chairman of the Board of Maupintour Holding LLC (f/k/a/
Lowestfare.com, LLC), an internet travel reservations company. From October 1998
through May, 2004, Mr. Icahn was the President and a director of Stratosphere
Corporation, which operates the Stratosphere Hotel and Casino. Since September
29, 2000, Mr. Icahn has served as the Chairman of the Board of GB Holdings,
Inc., which owns all of the outstanding stock of Atlantic Coast Entertainment
Holdings, Inc., which through its wholly-owned subsidiary owns and operates The
Sands Hotel and Casino in Atlantic City, New Jersey. Mr. Icahn also serves in
the same capacity with Atlantic Coast Entertainment Holdings, Inc. In January
2003, Mr. Icahn became Chairman of the Board and a director of XO
Communications, Inc., a telecommunications company.
BARRY S. ROSENSTEIN, age 46, is the founder and Managing Partner of JANA, a
position he has held since 2001. Mr. Rosenstein also founded, and from 1993 to
2001 served as Managing Partner of, Sagaponack Partners L.P., a private equity
fund. He received his M.B.A. from the University of Pennsylvania's Wharton
School of Business in 1984. In 1981, Mr. Rosenstein graduated Phi Beta Kappa
from Lehigh University. Mr. Rosenstein is also a C.P.A. Mr. Rosenstein serves on
the board of directors of Cobra Electronics and Marisa Christina, Inc.
BACKGROUND
On or about January 20, 2005, Barry S. Rosenstein and August H. Roth
spoke with Robert Wohleber (the CFO of Kerr-McGee), Rick Buterbaugh (the head of
investor relations of Kerr-McGee) and David Hager (the head of exploration of
Kerr-McGee) and discussed their respective views regarding the sale of
Kerr-McGee's chemicals business and regarding Kerr-McGee generally.
On February 10, 2005, representatives of the Icahn Parties and the JANA
Parties had a meeting in which they discussed Kerr-McGee. The parties also
discussed the possibility of JANA Master selling to the Icahn Parties an option
to purchase shares of Common Stock.
On February 14, 2005, the Icahn Parties acquired, for $1,500,000, an
option (the "JANA Option") to purchase, in the aggregate, 250,000 shares of
Common Stock of Kerr-McGee from JANA Master. Pursuant to the exercise of the
JANA Option on March 1, 2005, Icahn Partners purchased 96,000 shares of Common
Stock, Icahn Master purchased 104,000 shares of Common Stock and High River
purchased 50,000 shares of Common Stock. The JANA Option had an exercise price
of $60.00 per share and an expiration date of August 14, 2005.
On or about February 23, 2005 and on or about March 3, 2005, Carl C.
Icahn and Mr. Rosenstein spoke with Luke Corbett (the CEO of Kerr-McGee), and
suggested various actions to be taken by Kerr-McGee that they believed would
enhance stockholder value.
On March 2, 2005, the Icahn Parties delivered a letter to Kerr-McGee,
notifying Kerr-McGee that the Icahn Parties intend to appear at the Annual
Meeting, in person or by proxy, to
11
nominate and seek to elect Carl C. Icahn and Barry S. Rosenstein as members of
the board of directors of Kerr-McGee.
On March 3, 2005, Carl C. Icahn and Barry S. Rosenstein sent a letter
to Kerr-McGee, proposing that Kerr-McGee (i) sell its chemical business, (ii)
enter into a volumetric production payment ("VPP") transaction to sell future
production of a portion of its reserves and (iii) utilize the proceeds to buy
back shares of its stock at a price of $90 per share. Under the terms of a VPP
transaction, an energy producer arranges to receive an up-front payment of cash
from a counterparty in exchange for a fixed-term commitment to deliver oil and
gas in the future from one or more producing oil or gas wells. The producer
typically retains control of the properties and rights to future development
drilling, as well as production above the VPP volumes. A VPP transaction allows
the producer to monetize a portion of its reserves while providing a predictable
supply of oil or gas to the counterparty. Messrs. Icahn and Rosenstein believe
that their proposal could create value for Stockholders because it would permit
Kerr-McGee to take advantage of the spread between the valuation that the stock
market currently places on Kerr-McGee on a per barrel of oil equivalent of
proved reserves basis and the higher value at which oil and gas futures are
trading in the commodity markets.
On March 10, 2005, Carl C. Icahn and Barry S. Rosenstein sent a letter
to Kerr-McGee, responding to Kerr-McGee's March 8, 2005 announcement regarding
the proposed sale of its chemicals business and share repurchase program.
Messrs. Icahn and Rosenstein wrote that they were encouraged that Kerr-McGee had
agreed with their position with respect to the sale of its chemicals business,
but also expressed dissatisfaction that the board did not address the arbitrage
opportunity outlined in their March 3rd letter. Messrs. Icahn and Rosenstein
reiterated their belief that if Kerr-McGee were to consummate the VPP
transaction described in the March 3rd letter, it would unlock significant
shareholder value. Further, in response to Kerr-McGee's characterization of
their proposal as an attempt to earn "quick cash," Messrs. Icahn and Rosenstein
stated that, given current market conditions, if Kerr-McGee were to consummate
the VPP transaction they proposed and commence a tender offer to repurchase its
shares at $90 per share, they would commit not to sell their shares in such an
offer.
On March 10, 2005, Kerr-McGee filed a lawsuit in federal court in
Oklahoma against the Icahn Parties, the JANA Parties and certain of their
respective affiliates. The amended complaint in this action, which was filed by
Kerr-McGee on March 14, 2005, claims: (i) that the Icahn Parties and the JANA
Parties have violated their disclosure obligations under Section 13(d) of the
Exchange Act, including by filing misleading Schedules 13D which falsely
disclaim that they are acting with each other as a group, and mischaracterize
their purpose in acquiring shares; (ii) that the March 2, 2005 letter in which
the Icahn Parties notified Kerr-McGee of their intention to seek to elect Carl
C. Icahn and Barry S. Rosenstein to the board of directors fails to comply with
Kerr-McGee's bylaws; and (iii) that the Icahn Parties and the JANA Parties have
violated Section 14(a) of the Exchange Act and Rule 14a-9 thereunder by filing
false and misleading proxy solicitation materials. The lawsuit requests that the
court enter a judgment: (i) declaring the March 2, 2005 letter from the Icahn
Parties invalid; (ii) ordering the Icahn Parties and the JANA Parties to file
accurate disclosures in accordance with the requirements of Sections 13(d) and
14(a) of the Exchange Act and the regulations promulgated thereunder; (iii)
enjoining the Icahn Parties and the JANA Parties from voting any shares acquired
prior to the filing of true and accurate Schedules 13D; (iv) ordering the Icahn
Parties and the JANA Parties to return any proxies received prior to the filing
of true and accurate disclosures under Section 14(a) of the Exchange Act and the
regulations promulgated thereunder; (v) enjoining the Icahn Parties and
12
the JANA Parties from undertaking any action -- including (without limitation)
soliciting proxies, exercising stockholder voting rights, or purchasing
additional shares of Kerr-McGee --designed to change or affect control of
Kerr-McGee until 30 days following the filing of such true and accurate
disclosures pursuant to Sections 13(d) and 14(a) of the Exchange Act; and (vi)
granting such other and further relief as the court may deem just and proper.
On March 17, 2005, Messrs. Corbett, Wohleber, Buterbaugh and Hager
visited with Mr. Icahn, Vincent J. Intrieri and Keith A. Meister and discussed
their respective views regarding the sale of Kerr-McGee's chemicals business,
the VPP transaction and the stock repurchase that had been proposed by Messrs.
Icahn and Rosenstein.
On March 17, 2005, the Icahn Parties sent a letter to Kerr-McGee
demanding, pursuant to Delaware law, the right as stockholders to inspect
certain documents and records of Kerr-McGee (including stockholder list
materials).
On March 18, 2005, Messrs. Corbett, Wohleber, Buterbaugh and Hager
visited with Messrs. Rosenstein and Roth and discussed their respective views
regarding the sale of Kerr-McGee's chemicals business, the VPP transaction and
the stock repurchase that had been proposed by Messrs. Icahn and Rosenstein.
On April 4, 2005, Carl C. Icahn and Barry S. Rosenstein sent a letter
to the Board of Directors of Kerr-McGee urging them to allow the Stockholders
the opportunity to choose their own directors instead of running a single ballot
election.
On April 4, 2005, the Icahn Parties filed an answer to Kerr-McGee's
lawsuit, denying all material allegations and requesting a judgment dismissing
Kerr-McGee's amended complaint in its entirety, together with attorney's fees,
costs and disbursements incurred in defending the action, and such further
relief as the Court may deem just and proper.
Appendix I attached hereto sets forth, as to each of the Participants,
all transactions in securities of Kerr-McGee effected during the past two years.
Appendix II attached hereto sets forth information with respect to all options
to purchase shares of Common Stock owned beneficially by the JANA Parties.
Except as set forth herein or in any of the Appendices attached hereto,
neither of the Nominees nor or any of the other Participants: (i) owns any
securities of Kerr-McGee of record but not beneficially; (ii) owns beneficially
any securities of Kerr-McGee or any parent or subsidiary of Kerr-McGee; (iii)
has any agreement or understanding with any person with respect to any future
employment by Kerr-McGee or its affiliates; (iv) has any agreement or
understanding with any person with respect to any future transactions to which
Kerr-McGee or any of its affiliates will or may be a party; (v) has engaged in
or had a direct or indirect interest in any transaction, or series of similar
transactions, since the beginning of Kerr-McGee's last fiscal year, or any
currently proposed transaction, or series of similar transactions, to which
Kerr-McGee or any of its subsidiaries was or is to be a party, in which the
amount involved exceeds $60,000; (vi) borrowed any funds for the purpose of
acquiring or holding any securities of Kerr-McGee; or (vii) is presently, or has
been within the past year, a party to any contract, arrangement or understanding
with any person with respect to securities of Kerr-McGee.
13
OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
According to Kerr-McGee's Proxy Statement, Kerr-McGee is soliciting
proxies with respect to four proposals other than the election of directors.
Please refer to Kerr-McGee's Proxy Statement for a detailed discussion of these
proposals, including various arguments in favor of and against such proposals.
These proposals are discussed briefly below. THE PARTICIPANTS MAKE NO
RECOMMENDATION AS TO THESE PROPOSALS AND INTEND TO ABSTAIN FROM VOTING THEREON.
IF YOU HAVE SIGNED THE GOLD PROXY CARD AND NO MARKING IS MADE, YOU WILL BE
TREATED AS HAVING GIVEN A DIRECTION TO ABSTAIN FROM VOTING ALL THE SHARES
REPRESENTED BY THE GOLD PROXY CARD WITH RESPECT TO THESE PROPOSALS AND THE
PERSONS NAMED IN THE GOLD PROXY CARD WILL ACT ACCORDINGLY.
Item 2 -- Ratification of Appointment of Independent Auditors
At the Annual Meeting, the Stockholders will be asked to ratify the
appointment of Ernst & Young LLP as Kerr-McGee's independent auditors for 2005.
Kerr-McGee's board of directors unanimously recommended a vote for this
proposal. The Participants make no recommendation as to this proposal.
Voting on Item 2
The accompanying GOLD proxy card will be voted in accordance with your
instruction on such card. You may vote for or vote against, or abstain from
voting on, Item 2 described above by marking the proper box on the GOLD proxy
card.
Item 3 - Approval of the 2005 Long Term Incentive Plan
At the Annual Meeting, the Stockholders will be asked to approve
Kerr-McGee's 2005 Long Term Incentive Plan to replace the 2002 Long Term
Incentive Plan. Kerr-McGee's board of directors unanimously recommended a vote
for this proposal. The Participants make no recommendation as to this proposal.
Voting on Item 3
The accompanying GOLD proxy card will be voted in accordance with your
instruction on such card. You may vote for or vote against, or abstain from
voting on, Item 3 described above by marking the proper box on the GOLD proxy
card.
Item 4 - Approval to Amend the Amended and Restated Certificate of Incorporation
to Increase the Authorized Number of Shares of Common Stock from 300,000,000 to
500,000,000
At the Annual Meeting, the Stockholders will be asked to approve an
amendment to Kerr-McGee's Amended and Restated Certificate of Incorporation to
increase the authorized number of shares of Common Stock from 300,000,000 to
500,000,000. Kerr-McGee's board of directors unanimously recommended a vote for
this proposal. The Participants make no recommendation as to this proposal.
14
Voting on Item 4
The accompanying GOLD proxy card will be voted in accordance with your
instruction on such card. You may vote for or vote against, or abstain from
voting on, Item 4 described above by marking the proper box on the GOLD proxy
card.
Item 5 - Stockholder Proposal Requesting Establishment of an Office of the Board
of Directors
At the Annual Meeting, the Stockholders will be presented with a
stockholder proposal requesting establishment of an Office of the Board of
Directors. Kerr-McGee's board of directors unanimously recommended a vote
against this proposal. The Participants make no recommendation as to this
proposal.
Voting on Item 5
The accompanying GOLD proxy card will be voted in accordance with your
instruction on such card. You may vote for or vote against, or abstain from
voting on, Item 5 described above by marking the proper box on the GOLD proxy
card.
Other Proposals
The Participants and their affiliates know of no other business to be
presented at the 2005 Annual Meeting. If any other matters should properly come
before the Annual Meeting and the shares represented by GOLD proxy cards are
present at the Annual Meeting, it is intended that the persons named on the
enclosed GOLD proxy card will vote that proxy on such other matters in
accordance with their judgment (provided, however, that the persons named on the
enclosed GOLD proxy card will be permitted to use such discretionary authority
only for matters which the Participants do not know, a reasonable time before
the solicitation, are to be presented at the Annual Meeting).
VOTING PROCEDURES
According to Kerr-McGee's Proxy Statement, the voting procedures are as
set forth below.
A majority of the shares of the Common Stock of Kerr-McGee, present in
person or represented by proxy, shall constitute a quorum for purposes of the
Annual Meeting. Abstentions and broker non-votes are considered to be shares
present for the purpose of determining whether a quorum exists. A broker
non-vote occurs when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received voting instructions
from the beneficial owner.
Directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Annual Meeting and entitled to vote on the
election of directors. Abstentions and broker non-votes are not counted as votes
present for the purpose of electing directors. The proposal to amend the Amended
and Restated Certificate of Incorporation of Kerr-
15
McGee requires the affirmative vote of a majority of the outstanding shares of
Common Stock. Abstentions and broker non-votes will have the effect of votes
against the proposal to amend the Amended and Restated Certificate of
Incorporation of Kerr-McGee. In all matters other than the election of directors
and the amendment of the Amended and Restated Certificate of Incorporation of
Kerr-McGee, the affirmative vote of a majority of shares present in person or
represented by proxy at the Annual Meeting and entitled to vote on the subject
matter shall be the act of the Stockholders. With respect to such matters,
broker non-votes are not considered to be shares present in person or
represented by proxy, but abstentions are considered to be shares present in
person or represented by proxy, and, therefore, abstentions will have the effect
of votes against the proposal.
The New York Stock Exchange has determined that the appointment of
independent auditors is a "routine" item. Therefore, a broker or nominee may
vote shares held by it with respect to that item if no instructions have been
received for it at least 15 days before the Annual Meeting.
You are urged to complete the enclosed GOLD proxy and return it in the
enclosed self-addressed, prepaid envelope. All valid proxies received prior to
the Annual Meeting will be voted. If you specify a choice with respect to any
item by marking the appropriate box on the proxy, the shares will be voted in
accordance with that specification. In the event that Kerr-McGee succeeds in
obtaining a court order declaring the nominations of Carl C. Icahn and Barry S.
Rosenstein invalid, your shares may not be voted for the election of directors
at the Annual Meeting.
IF NO SPECIFICATION IS MADE, THE PERSONS NAMED ON THE ENCLOSED GOLD PROXY CARD
WILL VOTE YOUR SHARES FOR CARL C. ICAHN AND BARRY S. ROSENSTEIN WITH RESPECT TO
PROPOSAL 1, AND WILL ABSTAIN FROM VOTING WITH RESPECT TO THE REMAINING
PROPOSALS.
PROXY PROCEDURES
IN ORDER TO SUPPORT THE NOMINEES, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED GOLD PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. IN THE EVENT
THAT THE NOMINATIONS OF CARL C. ICAHN AND BARRY S. ROSENSTEIN ARE PERMITTED, WE
WILL VOTE ALL GOLD PROXIES AS INSTRUCTED (OR IF NO INSTRUCTION IS GIVEN, FOR THE
ELECTION OF THE NOMINEES AND ABSTAINING ON ALL OTHER MATTERS). IF KERR-MCGEE
SUCCEEDS IN OBTAINING A COURT ORDER DECLARING THE NOMINATIONS OF CARL C. ICAHN
AND BARRY S. ROSENSTEIN INVALID, YOUR SHARES MAY NOT BE VOTED IN THE ELECTION OF
DIRECTORS AT THE MEETING.
Revocation of Proxies
Any Stockholder who has mailed a white proxy card to Kerr-McGee may
revoke it before it is voted by mailing a duly executed GOLD proxy card to the
Participants bearing a date LATER than the white proxy card delivered to
Kerr-McGee. Proxies may also be revoked at
16
any time prior to voting by: (i) delivering to the corporate secretary of
Kerr-McGee, a written notice, bearing a date later than the date of the proxy,
stating that the proxy is revoked; (ii) delivering a duly executed proxy bearing
a later date than the proxy delivered previously; or (iii) attending the Annual
Meeting and voting in person.
Only holders of record as of the close of business on the Record Date
will be entitled to vote. If you were a Stockholder of record on the Record
Date, you will retain your voting rights at the Annual Meeting even if you sell
such shares after the Record Date. Accordingly, it is important that you vote
the shares held by you on the Record Date, or grant a proxy to vote such shares
on the GOLD proxy card, even if you sell such shares after the Record Date.
IF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK NOMINEE OR
OTHER INSTITUTION ON THE RECORD DATE, ONLY IT CAN VOTE SUCH SHARES AND ONLY UPON
RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE CONTACT THE PERSON
RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON TO EXECUTE ON YOUR BEHALF
THE GOLD PROXY CARD AS SOON AS POSSIBLE.
COST AND METHOD OF SOLICITATION
Solicitation of proxies shall be made by Messrs. Icahn, Meister,
Intrieri, Rosenstein and Roth.
The Icahn Parties and the JANA Parties have retained D.F. King & Co.,
Inc. ("King") to conduct the solicitation, for which King is to receive a fee of
approximately $200,000, plus a fee per call and reimbursement for its reasonable
out-of-pocket expenses. The Icahn Parties and the JANA Parties have agreed to
indemnify King against certain liabilities and expenses, including certain
liabilities under the federal securities laws. Insofar as indemnification for
liabilities arising under the federal securities laws may be permitted to King
pursuant to the foregoing provisions, we have been informed that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy and is therefore unenforceable. Proxies may be solicited by mail,
courier services, Internet, advertising, telephone or telecopier or in person.
It is anticipated that King will employ approximately 100 persons to solicit
proxies from Stockholders for the Annual Meeting. The total expenditures in
furtherance of, or in connection with, the solicitation of proxies is
approximately $500,000 to date, and is estimated to be approximately $1,000,000
in total.
The Icahn Parties and the JANA Parties agreed on March 24, 2005 to each
pay half of all costs related to the solicitation of proxies (including
expenditures for public relations and financial advisers, proxy solicitors,
advertising, printing, transportation and related expenses), except that the
Icahn Parties and the JANA Parties will each bear their own legal expenses. The
Icahn Parties and the JANA Parties intend to seek reimbursement for the costs
and expenses associated with the proxy solicitation in the event that the
Nominees are elected to the Board of Directors of Kerr-McGee, but do not intend
to submit the issue of reimbursement to a vote of security holders.
17
ADDITIONAL INFORMATION
Certain information regarding the securities of Kerr-McGee held by
Kerr-McGee's Directors, nominees, management and 5% Stockholders is contained in
Kerr-McGee's Proxy Statement. Information concerning the date by which proposals
of security holders intended to be presented at the next annual meeting of
Stockholders of Kerr-McGee must be received by Kerr-McGee for inclusion in
Kerr-McGee's Proxy Statement and form of proxy for that meeting is also
contained in Kerr-McGee's Proxy Statement. Although the Participants do not have
any knowledge that would indicate that any such information is untrue, the
Participants do not take any responsibility for the accuracy or completeness of
the information contained in Kerr-McGee's public filings, or any failure by
Kerr-McGee to disclose events that may affect the significance or accuracy of
any such information.
Date: April __, 2005 ICAHN PARTNERS LP
ICAHN PARTNERS MASTER FUND LP
HIGH RIVER LIMITED PARTNERSHIP
JANA PARTNERS LLC
18
APPENDIX I
SUPPLEMENTAL NOMINEE AND OTHER INFORMATION
Set forth below are the dates, types and amounts of each Participant's purchases
and sales of Kerr-McGee's securities within the past two years.
Transactions Within the Past Two Years in Kerr-McGee Voting Securities by Icahn
Partners, Icahn Master and High River
Shares Price
Name Date Purchased Per Share ($)**
------------------ -------------- ------------------- -------------------
High River 01/24/05 45,000 60.1318
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 01/25/05 45,000 60.3339
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 01/26/05 67,000 59.2852
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 01/26/05 12,000 60.5174
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 01/28/05 60,000 60.5075
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 01/31/05 10,000 60.8514
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 02/03/05 30,000 62.5149
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 02/04/05 27,000 62.9524
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 02/24/05 118,000* 66.1770
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 02/24/05 30,000* 65.8539
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 02/24/05 25,400* 64.0752
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
19
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 02/24/05 20,000* 65.9420
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 02/24/05 300,000 76.4535
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 02/28/05 125,000 77.1996
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/01/05 50,000* 66.0000
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/01/05 238,600 77.1092
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/01/05 110,000 76.7300
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/02/05 108,200 77.7004
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/10/05 55,000 77.0961
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/11/05 10,000 77.5100
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/16/05 60,000 78.7567
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/23/05 14,100 77.9401
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/28/05 14,000 77.9163
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/29/05 22,520 76.7957
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 03/30/05 40,000 76.5262
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
High River 04/06/05 12,000 75.2439
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 01/24/05 91,800 60.1318
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 01/25/05 91,800 60.3339
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
20
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 01/26/05 136,680 59.2852
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 01/26/05 24,480 60.5174
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 01/28/05 122,400 60.5075
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 01/31/05 20,400 60.8514
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 02/03/05 61,200 62.5149
------------------ -------------- ------------------ -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 02/04/05 55,080 62.9524
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 02/24/05 240,700* 66.2058
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 02/24/05 61,200* 65.8823
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 02/24/05 51,800* 64.1035
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 02/24/05 40,800* 65.9700
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 02/24/05 612,000 76.4535
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 02/28/05 255,000 77.1996
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/01/05 104,000* 66.0000
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/01/05 486,744 77.1092
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/01/05 224,400 76.7300
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/02/05 220,728 77.7004
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/10/05 112,200 77.0961
------------------ -------------- ------------------- -------------------
21
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/11/05 20,400 77.5100
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/16/05 122,400 78.7567
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/23/05 28,764 77.9401
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/28/05 28,560 77.9163
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/29/05 45,941 76.7957
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 03/30/05 81,600 76.5262
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Master 04/06/05 24,480 75.2439
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 01/24/05 88,200 60.1318
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 01/25/05 88,200 60.3339
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 01/26/05 131,320 59.2852
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 01/26/05 23,520 60.5174
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 01/28/05 117,600 60.5075
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 01/31/05 19,600 60.8514
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 02/03/05 58,800 62.5149
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 02/04/05 52,920 62.9524
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 02/24/05 231,300* 66.2062
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
22
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 02/24/05 58,800* 65.8823
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 02/24/05 49,800* 64.1035
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 02/24/05 39,200* 65.9700
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 02/24/05 588,000 76.4535
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 02/28/05 245,000 77.1996
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/01/05 96,000* 66.0000
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/01/05 467,656 77.1092
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/01/05 215,600 76.7300
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/02/05 212,072 77.7004
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/10/05 107,800 77.0961
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/11/05 19,600 77.5100
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/16/05 117,600 78.7567
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/23/05 27,636 77.9401
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/28/05 27,440 77.9163
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/29/05 44,139 76.7957
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 03/30/05 78,400 76.5262
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
23
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
Icahn Partners 04/06/05 23,520 75.2439
------------------ -------------- ------------------- -------------------
------------------ -------------- ------------------- -------------------
* Shares acquired upon exercise of options (including, where applicable, the
JANA Option).
** Per share prices include commissions paid and, with respect to
options, the purchase price of options.
24
Transactions Within the Past Two Years in Kerr-McGee Voting Securities by
the JANA Parties*
Date of Purchase Shares of Common Stock Price per Share
(Sale) Purchased (Sold) ($)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
12/16/04 100,000 59.0389
12/22/04 100,000 58.3149
12/30/04 35,000 58.1890
01/03/05 100,000 56.9715
01/04/05 65,000 55.8455
01/07/05 75,000 56.4429
01/13/05 27,400 58.5759
01/13/05 100,000 58.7622
01/14/05 500 58.6570
01/14/05 100,000 58.7027
01/18/05 50,000 59.7400
01/20/05 98,000 58.3727
01/21/05 25,000 59.6000
01/24/05 50,000 60.0846
01/25/05 75,000 60.3329
01/26/05 125,000 59.6540
01/27/05 100,000 60.7730
01/28/05 75,000 60.4541
01/31/05 200,000 61.6390
01/31/05 245,000 61.7078
01/31/05 10,700 61.4280
01/31/05 22,800 60.4686
02/01/05 150,000 62.5734
02/04/05 200,000 62.9580
02/04/05 1,400 62.8050
02/07/05 80,300 63.6141
02/07/05 45,000 64.2684
02/08/05 100,000 64.3024
02/11/05 50,000 66.8984
02/14/05 100,000 67.3423
02/14/05 100,000 67.5628
02/14/05 50,000 67.6016
02/15/05 95,000 68.2814
02/15/05 100,000 68.6418
02/15/05 100,000 68.3215
02/15/05 100,000 68.4526
03/01/05 (250,000)** 60.0000
* Of the shares of Common Stock reported herein, 2,557,335 shares are
beneficially owned by JANA Master and 243,765 shares are beneficially owned by a
separate account managed by JANA.
** Sold pursuant to an option that had been issued to and exercised by the Icahn
Parties.
25
APPENDIX II
Below is information with respect to all options to purchase shares of Common
Stock beneficially owned by the JANA Parties:*
Shares
Date of Underlying Exercise Price Purchase Price
Purchase Options per Share ($) Expiration Date per Option ($)
--------------------------------------------------------------------------------
02/28/05 73,300 80.00 04/15/05 2.0558
03/01/05 100,000 80.00 04/15/05 2.7408
03/02/05 85,100 80.00 04/15/05 3.1693
03/17/05 352,200 80.00 04/15/05 2.8197
03/17/05 180,200 75.00 04/15/05 6.7099
03/17/05 356,600 75.00 04/15/05 6.0286
03/18/05 58,300 80.00 04/15/05 3.8390
03/18/05 81,900 75.00 04/15/05 7.0603
03/21/05 50,000 75.00 04/15/05 7.4114
03/21/05 100,000 80.00 05/20/05 5.1000
04/06/05 100,000 75.00 05/20/05 3.7459
04/07/05 50,000 75.00 05/20/05 3.2300
* Of the options reported herein, options to purchase 1,449,200 shares of Common
Stock are beneficially owned by JANA Master and options to purchase 138,400
shares of Common Stock are beneficially owned by a separate account managed by
JANA.
26
IMPORTANT
---------
1. If your shares are held in your own name, please mark, date and mail
the enclosed GOLD proxy card to our Proxy Solicitor, D.F. King & Co., Inc., in
the postage-paid envelope provided.
2. If your shares are held in the name of a brokerage firm, bank
nominee or other institution, only it can vote such shares and only upon receipt
of your specific instructions. Accordingly, you should contact the person
responsible for your account and give instructions for a GOLD proxy card to be
signed representing your shares.
3. If you have already submitted a white proxy card to Kerr-McGee for
the Annual Meeting, you may change your vote to a vote FOR the election of the
Nominees by marking, signing, dating and returning the enclosed GOLD proxy card
for the Annual Meeting, which must be dated after any proxy you may have
submitted to Kerr-McGee. ONLY YOUR LATEST DATED PROXY FOR THE ANNUAL MEETING
WILL COUNT AT THE ANNUAL MEETING.
4. You may also revoke any proxy you have already granted by attending
the Annual Meeting and voting in person.
If you have any questions about giving your proxy or require
assistance, please call:
D.F. King & Co., Inc.
48 Wall Street New York, NY 10005
Call Toll-Free: l-888-605-1957
Banks and Brokerage Firms Call Toll-Free: 1-212-269-5550
27
PROXY CARD [PRELIMINARY COPY]
KERR-MCGEE CORPORATION
2005 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY
ICAHN PARTNERS LP
ICAHN PARTNERS MASTER FUND LP
HIGH RIVER LIMITED PARTNERSHIP AND
JANA PARTNERS LLC
The undersigned hereby appoints and constitutes each of Keith A. Meister and
Vincent J. Intrieri (acting alone or together) as proxies, with full power of
substitution in each, to represent the undersigned at the Annual Meeting of
Stockholders of Kerr-McGee Corporation ("Kerr-McGee") to be held on May 10, 2005
at 9:00 a.m. local time, and at any adjournment or postponement or continuations
thereof (the "Annual Meeting"), hereby revoking any proxies previously given, to
vote all shares of Common Stock of Kerr-McGee held or owned by the undersigned
as directed below, and in their discretion upon such other matters as may come
before the meeting (provided, however, that the persons named above will be
permitted to use such discretionary authority only for matters which they do not
know, a reasonable time before the solicitation, are to be presented at the
meeting).
IF NO DIRECTION IS MADE, THE PERSONS NAMED IN THIS GOLD PROXY CARD WILL VOTE
YOUR SHARES FOR --- CARL C. ICAHN AND BARRY S. ROSENSTEIN FOR DIRECTOR, IF
PERMITTED, AND WILL ABSTAIN FROM VOTING WITH RESPECT TO THE REMAINING PROPOSALS.
SIGN, DATE AND MAIL YOUR PROXY TODAY
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
ICAHN PARTNERS, ICAHN MASTER, HIGH RIVER AND JANA EACH RECOMMEND A VOTE "FOR"
THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1 BELOW. NO RECOMMENDATION IS
MADE AS TO THE REMAINING PROPOSALS. [PRELIMINARY COPY]
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN, AND RETURN THIS PROXY.
YOUR VOTE IS VERY IMPORTANT TO US.
1. Election of directors -- Nominees: [ ] [ ] [ ]
(01) Carl C. Icahn FOR ALL WITHHELD FOR ALL
(02) Barry S. Rosenstein NOMINEES FROM ALL EXCEPT
NOMINEES
NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE,
MARK THE "FOR ALL EXCEPT" BOX AND WRITE THE NAME(S) OF THE NOMINEE(S)
YOU DO NOT SUPPORT ON THE LINE BELOW. YOUR SHARES WILL BE VOTED FOR THE
REMAINING NOMINEE(S).
-------------------------------------------------------
2. Ratification of appointment of Ernst & Young LLP
as independent auditors for 2005. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of 2005 Long Term Incentive Plan. FOR AGAINST ABSTAIN
4. Approval to amend the Amended and Restated FOR AGAINST ABSTAIN
Certificate of Incorporation to Increase the
Authorized Number of Shares of Common Stock from [ ] [ ] [ ]
300,000,000 to 500,000,000.
5. Stockholder proposal requesting establishment FOR AGAINST ABSTAIN
of an Office of the Board of Directors.
[ ] [ ] [ ]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE IF AN ADDRESS CHANGE HAS BEEN [ ]
NOTED ON THE REVERSE SIDE OF THIS CARD
Please be sure to sign and date this Proxy.
------------------------------------------------------- -----------
Signature(s) of Stockholder(s) Date
------------------------------------------------------------------------
Title, if any
SIGNATURE (IF HELD JOINTLY):
--------------------------------------------