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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Valero Energy Corporation
(formerly Valero Refining and Marketing Company)
- -----------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
- -----------------------------------------------------------------
(Title of Class of Securities)
91913Y100
------------------------------------
(CUSIP Number)
c/o Arnold S. Olshin, Salomon Inc
Seven World Trade Center,
New York, New York 10048 (212) 783-7000
- -----------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 22, 1997
------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box. [ ]
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) 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).
<PAGE>
SCHEDULE 13D
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CUSIP No. 91913Y100 Page 2 of 5 Pages
- ----------------------- ------------------------
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Salomon Inc
22-1660266
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ X ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF, 00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ X ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
0 shares
NUMBER OF SHARES -------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH REPORTING -------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0 shares
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- -------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0 shares
- -------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- -------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, HC
- -------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Salomon Inc hereby amends its Statement on Schedule 13D
relating to the Common Stock, par value $.01 per share, of Valero
Energy Corporation (formerly Valero Refining and Marketing
Company) (the "Issuer") dated August 11, 1997 (as amended by an
Amendment No. 1, dated September 15, 1997, the "Schedule 13D"),
as set forth below. All terms defined in the Schedule 13D have
the same meaning in this Amendment No. 2.
Item 4. Purpose of Transaction.
The fourth sentence of the third paragraph of this
item as set forth in the Schedule 13D is hereby deleted and the
following is inserted at the end of this item:
"In accordance with the discussions between the Issuer
and Salomon Inc referred to in the foregoing paragraph, the
Issuer and Salomon Inc have entered into a First Amendment and
Waiver, dated as of September 22, 1997 (the "Waiver Agreement").
A copy of the Waiver Agreement is attached hereto as Exhibit 2
and is incorporated herein by reference. Under the Waiver
Agreement, the Issuer has agreed, among other things, to waive
(x) the lock-up provisions of the Stockholder Agreement so as to
permit the sale by Salomon Inc of all, but not fewer than all, of
Salomon Inc's shares of Common Stock (the "Salomon Shares") in a
transaction or series of related transactions (i) consummated
prior to September 30, 1997, (ii) resulting in gross cash
proceeds to Salomon Inc of not less than $33.00 per share of
Common Stock and (iii) involving a bona fide, broad public
offering and distribution of such shares and (y) the Issuer's
right of first offer with respect to such shares. Accordingly,
Salomon Inc has sold all of the Salomon Shares to third parties
in connection with a public offering (the "Offering"), in which
SBI is acting as the agent for Salomon Inc. It is anticipated
that the delivery of the Salomon Shares to the purchasers of such
shares will be made on or about September 26, 1997.
In connection with the Offering, SBI may, in each case
in accordance with Rule 104 of Regulation M under the 1934 Act,
prevailing market conditions and SBI's judgment with respect to
the necessity and desirability thereof, (x) place or effect, as
the case may be, stabilizing bids or purchases with respect to
the Common Stock or (y) effect syndicate covering transactions to
purchase shares of Common Stock in the open market to cover all
or a portion of a short position, if any, resulting from the
Offering.
Other than as described above, neither Salomon Inc
nor, to the best knowledge of Salomon Inc, SBI or any of the
persons listed in Annex A hereto has any plans or proposals that
relate to or would result in any transactions involving the
Issuer or any of its subsidiaries or securities of the type or
kind listed in Item 4 of Schedule 13D adopted by the SEC under
the 1934 Act."
Item 5. Interest in Securities of the Issuer.
(a-b) The following is inserted at the end of this item
as set forth in the Schedule 13D:
Page 3 of 5 Pages
<PAGE>
"As a result of the disposition of the Salomon Shares
pursuant to the Offering, as more fully described in Item 4,
Salomon Inc beneficially owns no shares of Common Stock as of the
date hereof. Accordingly, Salomon Inc beneficially owns 0.0% of
the outstanding shares of Common Stock."
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
This item as set forth in the Schedule 13D is deleted
and the following is inserted in its place:
"Other than the provisions of the Stockholder
Agreement, the Waiver Agreement and the agreements, arrangements
and relationships existing or contemplated in connection with the
distribution by SBI (as the agent for Salomon Inc) of the Salomon
Shares pursuant to the Offering, as more fully described in Item
4, neither Salomon Inc nor, to the best knowledge of Salomon Inc,
SBI or any of the persons listed in Annex A hereto has any
contracts, arrangements, understandings or relationships (legal
or otherwise) with any person with respect to securities of the
Issuer."
Item 7. Material to Be Filed as Exhibits.
The following is inserted after Exhibit 1 of this item
as set forth in the Schedule 13D:
"Exhibit 2. First Amendment and Waiver, dated as of September 22,
1997, between the Issuer and Salomon Inc"
Page 4 of 5 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: September 23, 1997
SALOMON INC
By /s/ Arnold S. Olshin
-------------------------
Name: Arnold S. Olshin
Title: Secretary
Page 5 of 5 Pages
FIRST AMENDMENT AND WAIVER dated as of
September 22, 1997, to the STOCKHOLDER AGREEMENT
dated as of May 1, 1997 (the "Original
Agreement"), between VALERO ENERGY CORPORATION,
formerly known as Valero Refining and Marketing
Company, a Delaware corporation (the "Company"),
and SALOMON INC, a Delaware corporation
("Stockholder").
WHEREAS the Company and Stockholder are parties to the
Original Agreement, which provides, among other things, for
certain restrictions on transfer by Stockholder of the Spin-Off
Shares (capitalized terms used and not defined in this Amendment
and Waiver have the meanings assigned such terms in the Original
Agreement); and
WHEREAS the Company has agreed, on the terms and
subject to the conditions set forth in this Amendment and Waiver,
to waive certain of such restrictions.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
SECTION 1. Amendment and Waiver. (a) Notwithstanding
Section 3.02 of the Original Agreement, Stockholder may sell all,
but not less than all, the Spin-Off Shares in a transaction or
series of related transactions (a
"Permitted Transaction") that:
(i) is consummated prior to September 30, 1997;
(ii) results in cash proceeds to Stockholder (before
selling commissions or discounts and other expenses) of not
less than $33.00 per Spin-Off Share; and
<PAGE>
2
(iii) involves a bona fide, broad public offering
and distribution of the Spin-Off Shares.
(b) The Company hereby waives its rights under Section
3.04 with respect to any Permitted Transaction.
SECTION 2. Permitted Transaction Procedures. (a)
Officer's Certificate. On the settlement date for a Permitted
Transaction (the "Closing Date"), the Company shall furnish to
Stockholder a certificate of the Company, signed by the Executive
Vice President and Chief Financial Officer of the Company, in
form and substance satisfactory to Stockholder.
(b) Opinion. On the Closing Date, the Company shall
furnish to Stockholder the opinion of Gregory C. King, General
Counsel of the Company, in form and substance satisfactory to
Stockholder.
(c) Indemnification.
(i) By the Company. The Company agrees, in connection
with a Permitted Transaction, to indemnify Stockholder, its
officers, directors, employees and agents and each Person
who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act)
Stockholder or such other indemnified Person and the
officers, directors, employees and agents of such control
Persons or other indemnified Persons against all losses,
claims, damages, liabilities and expenses, including,
without limitation, reasonable attorneys' fees and expenses
(collectively, "Losses"), as incurred, caused by, resulting
from or relating to (i) any untrue or alleged untrue
statement of material fact contained in the Form S-1
(including the Prospectus), the Form 10-Q or any amendment
thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein
or necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading or (ii) any violation by the
<PAGE>
3
Company of any Federal or state law, rule or regulation
applicable to the Company and relating to any action
required of, or inaction required by, the Company with
respect to the Form S-1 (including the Prospectus), the
Form 10-Q or any amendment thereto or supplement thereof;
provided, however, that the Company's liability under this
indemnity shall not exceed the amount of net proceeds
received by Stockholder from the sale of Spin-Off Shares in
a Permitted Transaction.
(ii) By Stockholder. In connection with a Permitted
Transaction, Stockholder shall indemnify the Company, its
directors, officers, employees and agents and each Person
who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) the
Company or such other indemnified Person and the officers,
directors, employees and agents of such control Persons or
other indemnified Persons against all Losses, as incurred,
caused by, resulting from or relating to any untrue or
alleged untrue statement of material fact contained in any
offering memorandum or other offering materials used in
connection with a Permitted Transaction (other than any
attachment thereto consisting of the Form S-1 or the Form
10-Q) or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading, but only to the extent that such
untrue statement or omission or alleged untrue statement or
omission is caused by, results from or relates to, or is
alleged to be omitted from, the information in such
offering memorandum or such other offering materials
prepared or furnished by Stockholder; provided, however,
that Stockholder shall not be liable for any claims
hereunder in excess of the amount of net proceeds received
by Stockholder from the sale of Spin-Off Shares in a
Permitted Transaction.
<PAGE>
4
(iii) Notice. Notice shall be in accordance with
Section 11(g) of the Purchase Agreement.
(iv) Defense of Actions. Defense of actions shall
be in accordance with Section 11(g) of the Purchase
Agreement.
(v) Survival. The indemnification provided for herein
shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified
Person and will survive the transfer of the Spin-Off
Shares.
(vi) Contribution. If the indemnification provided for
in this Section 2(c) is unavailable to an indemnified party
or is insufficient to hold such indemnified party harmless
for any Losses in respect of which this Section 2(c) would
otherwise apply by its terms, then the indemnifying party,
in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with
the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying
party, on the one hand, and the indemnified party, on the
other hand, shall be determined by reference to, among
other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has
been taken by, or relates to information supplied by, each
indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent any such action,
statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include
any legal or other fees or expenses
<PAGE>
5
incurred by such party, to the extent such party would have
been indemnified for such expenses if the indemnification
provided for in Section 2(c)(i) or 2(c)(ii) was available
to such party. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this
Section 2(c)(vi) were determined by pro rata allocation or
by any other method of allocation that does not take
account of the equitable considerations referred to in this
Section 2(c)(vi). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
any Person who was not found guilty of such fraudulent
misrepresentation.
SECTION 3. Miscellaneous. (a) Except as
expressly set forth in this Amendment and Waiver, all the
provisions of the Original Agreement shall remain in full
force and effect.
(b) This Amendment and Waiver and all the provisions
hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, successors
and permitted assigns, but, except as expressly contemplated
herein, neither this Amendment and Waiver nor any of the rights,
interests or obligations hereunder shall be assigned, directly or
indirectly, by the Company or Stockholder without the prior
written consent of the other.
(c) This Amendment and Waiver may be executed in
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
<PAGE>
6
(d) THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
IN WITNESS WHEREOF, the undersigned hereby agree to be
bound by the terms and provisions of this Amendment and Waiver as
of the date first above written.
VALERO ENERGY CORPORATION,
By:__________________________
Name:
Title:
SALOMON INC,
By:__________________________
Name:
Title:
