0000928475-05-000066.txt : 20120703 0000928475-05-000066.hdr.sgml : 20120703 20050310190353 ACCESSION NUMBER: 0000928475-05-000066 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20050311 DATE AS OF CHANGE: 20050310 GROUP MEMBERS: KERR MCGEE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KERR MCGEE CORP /DE CENTRAL INDEX KEY: 0001141185 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731612389 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-78007 FILM NUMBER: 05673608 BUSINESS ADDRESS: STREET 1: KERR-MCGEE CENTER STREET 2: 123 ROBERT S. KERR AVENUE CITY: OKLAHOMA CITY STATE: OK ZIP: 73102 BUSINESS PHONE: 4052701313 MAIL ADDRESS: STREET 1: KERR-MCGEE CENTER STREET 2: P.O. BOX 25861 CITY: OKLAHOMA CITY STATE: OK ZIP: 73125 FORMER COMPANY: FORMER CONFORMED NAME: KERR MCGEE HOLDCO INC DATE OF NAME CHANGE: 20010525 FORMER COMPANY: FORMER CONFORMED NAME: KING HOLDCO INC DATE OF NAME CHANGE: 20010523 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ICAHN CARL C ET AL CENTRAL INDEX KEY: 0000921669 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 000000000 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O ICAHN ASSOCIATES CORP STREET 2: 767 FIFTH AVE #4700 CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2127024300 MAIL ADDRESS: STREET 1: C/O ICAHN ASSOCIATES CORP STREET 2: 767 FIFTH AVE #4700 CITY: NEW YORK STATE: NY ZIP: 10153 SC 13D/A 1 kerrmcgeeschedule13dafinal10.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* Kerr-McGee Corporation (Name of Issuer) Common Stock (Title of Class of Securities) 492386107 (CUSIP Number) Marc Weitzen, Esq. General Counsel Icahn Associates Corp. & affiliated companies 767 Fifth Avenue, 47th Floor New York, New York 10153 (212) 702-4388 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 10, 2005 (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 that is the subject of this Schedule 13D, and is filing this schedule because of " 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box / /. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 492386107 1 NAME OF REPORTING PERSON High River Limited Partnership S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 1,476,200 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 1,476,200 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,476,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.97% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 492386107 NAME OF REPORTING PERSON Hopper Investments LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 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 1,476,200 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 1,476,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,476,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.97% 14 TYPE OF REPORTING PERSON* OO SCHEDULE 13D CUSIP No. 492386107 NAME OF REPORTING PERSON Barberry Corp. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 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 1,476,200 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 1,476,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,476,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.97% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 492386107 NAME OF REPORTING PERSON Icahn Partners Master Fund L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 3,013,412 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 3,013,412 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,013,412 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.99% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 492386107 NAME OF REPORTING PERSON Icahn Offshore L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 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 3,013,412 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 3,013,412 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,013,412 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.99% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 492386107 NAME OF REPORTING PERSON CCI Offshore LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 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 3,013,412 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 3,013,412 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,013,412 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.99% 14 TYPE OF REPORTING PERSON* OO SCHEDULE 13D CUSIP No. 492386107 NAME OF REPORTING PERSON Icahn Partners L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 2,891,388 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 2,891,388 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,891,388 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.91% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 492386107 NAME OF REPORTING PERSON Icahn Onshore L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 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 2,891,388 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 2,891,388 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,891,388 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.91% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 492386107 NAME OF REPORTING PERSON CCI Onshore LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 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 2,891,388 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 2,891,388 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,891,388 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.91% 14 TYPE OF REPORTING PERSON* OO SCHEDULE 13D CUSIP No. 492386107 1 NAME OF REPORTING PERSON Carl C. Icahn S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 7,381,000 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 7,381,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,381,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.87% 14 TYPE OF REPORTING PERSON* IN SCHEDULE 13D Item 1. Security and Issuer This Statement constitutes Amendment No. 1 to the Schedule 13D previously filed on March 3, 2005. All capitalized terms not otherwise defined shall have the meaning ascribed to such terms in the previously filed statement on Schedule 13D. Item 3. Source and Amount of Funds or Other Consideration The aggregate purchase price of the 7,381,000 Shares purchased by High River, Icahn Master and Icahn Partners, collectively, was $530,203,600.84 (including commissions and, with respect to Shares acquired upon exercise of options, including option purchase prices). The source of funding for the purchase of these Shares was the respective general working capital of the purchasers, and, with respect to High River, pursuant to margin accounts in the regular course of business. Item 4. Purpose of Transaction Item 4 is hereby amended to add the following: On March 10, 2005, the Reporting Persons and Jana Partners LLC sent a letter to the Issuer (the "Response Letter"), responding to the Issuer's announcement of the proposed sale of its chemicals business and share repurchase program. A copy of the Response Letter is filed herewith as an exhibit and incorporated herein by reference, and any descriptions herein of the Response Letter are qualified in their entirety by reference to the Response Letter. SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO SOLICITATION OF PROXIES BY MESSRS. CARL ICAHN AND BARRY ROSENSTEIN AND THEIR RESPECTIVE AFFILIATES FROM THE STOCKHOLDERS OF KERR-MCGEE CORPORATION FOR USE AT ITS ANNUAL MEETING WHEN AND IF THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN ANY SUCH PROXY SOLICITATION. WHEN AND IF COMPLETED, THE PROXY STATEMENT AND SUCH OTHER DOCUMENTS WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV, AND A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF KERR-MCGEE CORPORATION. Item 5. Interest in Securities of the Issuer Item 5 is hereby supplemented as follows: (a) The Reporting Persons may be deemed to beneficially own, in the aggregate, 7,381,000 Shares, representing approximately 4.87% of the Issuer's outstanding Shares (based upon the 151,692,157 Shares stated to be outstanding as of October 31, 2004 by the Issuer in the Issuer's Form 10-Q for the period ending September 30, 2004, filed with the Securities and Exchange Commission on November 9, 2004). (b) High River has sole voting power and sole dispositive power with regard to 1,476,200 Shares. Each of Barberry, Hopper and Carl C. Icahn has shared voting power and shared dispositive power with regard to such Shares. Icahn Master has sole voting power and sole dispositive power with regard to 3,013,412 Shares. Each of Icahn Offshore, CCI Offshore and Carl C. Icahn has shared voting power and shared dispositive power with regard to such Shares. Icahn Partners has sole voting power and sole dispositive power with regard to 2,891,388 Shares. Each of Icahn Onshore, CCI Onshore and Carl C. Icahn has shared voting power and shared dispositive power with regard to such Shares. The Reporting Persons may be deemed to be members of a "group" with the Jana Parties within the meaning of Section 13(d)(3) of the Act. As such, the Reporting Persons may be deemed to beneficially own Shares owned by the Jana Parties. Upon information and belief, the Jana Parties, as of the close of business on March 9, 2005, may be deemed to beneficially own 4,332,400 Shares in the aggregate. Accordingly, the 11,713,400 Shares that may be deemed to be beneficially owned in the aggregate by the Reporting Persons and the Jana Parties constitutes approximately 7.72% of the Shares outstanding. However, the Reporting Persons disclaim membership in any such group for all purposes and disclaim ownership of any Shares owned by the Jana Parties, and neither the fact of this filing or anything contained herein shall be deemed to be an admission by any of the Reporting Persons that they are members of such a group. (c) The following table sets forth all transactions with respect to Shares effected since the most recent filing on Schedule 13D by the Reporting Persons. All such transactions were effected in the open market and the table includes commissions paid in per share prices. ------------------ -------------- ------------------- ------------------ No. of Shares Price Name Date Purchased Per Share ------------------ -------------- ------------------- ------------------- ------------------ -------------- ------------------- ------------------- High River 03/10/05 55,000 77.0961 ------------------ -------------- ------------------- ------------------- ------------------ -------------- ------------------- ------------------- Icahn Master 03/10/05 112,200 77.0961 ------------------ -------------- ------------------- ------------------- ------------------ -------------- ------------------- ------------------- Icahn Partners 03/10/05 107,800 77.0961 ------------------ -------------- ------------------- ------------------- Item 6. Contracts, Arrangements, Understandings or Relationship with Respect to Securities of the Issuer Item 6 is hereby amended to add the following: On March 10, 2005, the Reporting Persons and Jana Partners LLC sent to the Issuer the Response Letter more fully described in Item 4. A copy of the Response Letter is filed herewith as an exhibit and incorporated herein by reference, and any descriptions herein of the Response Letter are qualified in their entirety by reference to the Response Letter. Item 7. Material to be Filed as Exhibits 1 Letter from the Reporting Persons and Jana Partners LLC to the Issuer. SIGNATURE After reasonable inquiry and to the best of each of the undersigned knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: March 10, 2005 HOPPER INVESTMENTS LLC By: Barberry Corp. By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: Authorized Signatory BARBERRY CORP. By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: Authorized Signatory HIGH RIVER LIMITED PARTNERSHIP By: Hopper Investments LLC, General Partner By: Barberry Corp., member By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: Authorized Signatory ICAHN PARTNERS MASTER FUND L.P. By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: Authorized Signatory [Signature Page of Amendment #1 to Schedule 13D - Kerr-McGee, Inc.] ICAHN OFFSHORE L.P. By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: Authorized Signatory CCI OFFSHORE LLC By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: Authorized Signatory ICAHN PARTNERS L.P. By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: Authorized Signatory ICAHN ONSHORE L.P. By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: Authorized Signatory CCI ONSHORE LLC By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: Authorized Signatory /s/ Carl C. Icahn_____________ ----------------- CARL C. ICAHN [Signature Page of Amendment #1 to Schedule 13D - Kerr-McGee, Inc.] EX-99 2 kerrmcgeefinalletterexh.txt ICAHN PARTNERS LP ICAHN PARTNERS MASTER FUND LP HIGH RIVER LIMITED PARTNERSHIP JANA PARTNERS LLC March 10, 2005 VIA FEDERAL EXPRESS AND FACSIMILE ---------------------------------- Mr. Luke R. Corbett Chairman and Chief Executive Officer Kerr-McGee Corporation 123 Robert S. Kerr Avenue Oklahoma City, Oklahoma 73102 Dear Mr. Corbett: We are writing in response to the March 8th announcement by Kerr-McGee Corporation ("KMG") regarding the board's decision to approve the sale of KMG's chemicals business and the repurchase of $1 billion of shares. We are encouraged that KMG agrees with our position with respect to the sale of its chemicals business. However, the board did not address the substance of our proposal - taking advantage of the significant arbitrage opportunity we outlined. We have spoken with several of KMG's largest shareholders, and we found that each believes that: o KMG should not miss the opportunity to LOCK IN HIGH OIL PRICES; o KMG should STOP WASTING MONEY ON HIGH-RISK EXPLORATION; and o KMG should RETURN MORE MONEY TO SHAREHOLDERS IMMEDIATELY. We continue to believe that if KMG were to consummate the VPP transaction described in our March 3rd letter, it would unlock significant shareholder value. Furthermore, contrary to KMG's mischaracterization of our proposal, we are not seeking "quick cash." As such, given current market conditions, if KMG were to consummate the VPP transaction we proposed and commence a tender offer (as opposed to an uncertain and open-ended buy back such as that approved by the board) to repurchase its shares at $90 per share, WE WOULD COMMIT NOT TO SELL OUR SHARES IN SUCH AN OFFER. KMG has expressed concern that returning capital to its shareholders would limit its ability to conduct exploratory drilling activities. That is exactly our point - we believe KMG can spend its money much more judiciously than to continue spending money on high-risk exploration. Extrapolating from your public filings, we see that KMG's 3-year historic average exploration costs through the drill bit (including revisions) are approximately $40 per boe (excluding Westport and other acquisitions). At its current share price (and assuming a value for the chemicals business within management's estimated range), KMG now has the opportunity to repurchase its own shares and thereby repurchase its own reserves at between $11 and $12 per boe. We believe that KMG has destroyed shareholder value through its exploratory activities over the last three years. We do not seem to be alone in our opinion. In addition to the several large KMG shareholders with whom we have spoken, Goldman Sachs, in a research report released on March 7th, stated as follows: "Our concern with Kerr-McGee's current E&P business model is that its strategy of trying to offset the steep declines inherent in its mature, short-lived core E&P asset base does not appear to be a good fit with a high-risk deepwater exploration strategy. If allowed to continue, WE SEE A HIGH LIKELIHOOD THAT KERR-MCGEE COULD SQUANDER THE BENEFITS OF HIGH OIL PRICES. . . . We believe that the most attractive solution would be for Kerr-McGee to "produce out" its E&P reserves. Given our view that Kerr-McGee's E&P business is capable of generating substantial cash flow, THE KEY TO UNLOCKING THE VALUE WOULD BE TO SPEND MINIMAL AMOUNTS OF CAPEX, ESSENTIALLY DEPLETE OUT ITS RESERVES OVER TIME, AND RETURN REMAINING CASH FLOWS BACK TO THE SHAREHOLDERS. We believe Kerr-McGee could choose to take advantage of currently high commodity forward prices to lock in value for its reserves. "1 (emphasis added) KMG's board should be focused on maximizing value for its shareholders, the constituency to whom the board owes its fiduciary duties. We are dismayed that KMG has chosen to make dismissive public statements instead of taking seriously our proposal for enhancing shareholder value. To resort to meaningless rhetoric is wasteful, just as, unfortunately for shareholders, we believe much of KMG's exploratory drilling activity has been. Although we believe that a proxy fight would be a debilitating exercise for all involved, if KMG continues to ignore what we believe is the obvious way to unlock shareholder value, we will press forward to seek to elect the undersigned to the board at the upcoming annual meeting of shareholders. Further, if oil prices were to decline and KMG were to miss the significant and unique arbitrage opportunity that currently exists, management and the board will be responsible for having destroyed shareholder value. Very truly yours, CARL C. ICAHN BARRY ROSENSTEIN SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO SOLICITATION OF PROXIES BY MESSRS. CARL ICAHN AND BARRY ROSENSTEIN AND THEIR RESPECTIVE AFFILIATES FROM THE STOCKHOLDERS OF KERR-MCGEE CORPORATION FOR USE AT ITS ANNUAL MEETING WHEN AND IF THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN ANY SUCH PROXY SOLICITATION. WHEN AND IF COMPLETED, THE PROXY STATEMENT AND SUCH OTHER DOCUMENTS WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV, AND A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF KERR-MCGEE CORPORATION. -------- 1 We have not received, nor have we sought, permission from Goldman Sachs to publish excerpts from this research report.