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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. )
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Union Carbide Corporation
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(Name of Issuer)
Common Stock, par value $1.00 per share
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(Title of Class of Securities)
905581104
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(CUSIP Number)
John Scriven
Vice President, General Counsel and Secretary
The Dow Chemical Company
2030 Dow Center
Midland, Michigan 48674
(517) 636-1000
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(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)
August 3, 1999
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(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(e), 13d-1(f) or 13d-1(g), check the
following box [_]
(Continued on following pages)
(Page 1 of 9 Pages)
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CUSIP NO. 905581104
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NAME OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
The Dow Chemical Company (# 38-1285128)
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS
4 WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6 DELAWARE
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SOLE VOTING POWER
7 26,502,964 shares *
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8 0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9 26,502,964 shares *
REPORTING
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10 0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
26,502,964 shares
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 19.9%
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TYPE OF REPORTING PERSON
14 CO
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* The shares of common stock, par value $1.00 per share ("UCC Common Stock"), of
Union Carbide Corporation ("UCC") covered by this item are purchasable by The
Dow Chemical Company ("Dow") upon exercise of an option (the "Option") granted
by UCC to Dow under the Stock Option Agreement described in Item 4. Prior to the
exercise of the Option, Dow is not entitled to any rights as a shareholder of
UCC as to the shares of UCC Common Stock covered by the Option. Dow disclaims
any beneficial ownership of the shares of UCC Common Stock that are purchasable
by Dow upon exercise of the Option because the Option is not presently
exercisable and only becomes exercisable upon the occurrence of the events set
forth in the Stock Option Agreement.
Page 2 of 9 Pages
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ITEM 1. SECURITY AND ISSUER
This statement relates to the common stock, par value $1.00 per share (the
"UCC Common Stock") of Union Carbide Corporation, a New York corporation
("UCC"). UCC's principal executive offices are located at 39 Old Ridgebury Road,
Danbury, Connecticut 06817-1000.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c) This statement is being filed by The Dow Chemical Company, a
Delaware corporation ("Dow"). Dow's principal executive offices are located at
2030 Dow Center, Midland, Michigan 48674. Dow's principal business is the
manufacture and sale of chemicals, plastic materials, agricultural and other
specialized products and services. The names, business addresses and principal
occupation or employment (and the name, principal business and address of any
corporation or other organization in which such employment is conducted) of each
of the persons specified by Instruction C of the Schedule 13D is set forth on
Schedule 1.
(d) - (e) To the knowledge of Dow, neither Dow nor any of the persons
specified in Schedule 1 has, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
has been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) See (a) - (c) above.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
An irrevocable option (the "Option") to purchase up to 26,502,964 shares of
UCC Common Stock (the "Option Shares") representing approximately 19.9% of the
shares of UCC Common Stock issued and outstanding (without giving effect to the
shares issued or issuable under the Option) is exercisable only upon the
occurrence of the conditions set forth in the Stock Option Agreement described
in Item 4. The Option may be exercised at $48.8125 per share. If the Option
becomes exercisable and Dow exercises the Option, Dow anticipates that it would
fund the purchase with working capital of Dow.
ITEM 4. PURPOSE OF THE TRANSACTION
On August 3, 1999, UCC, Dow and Transition Sub Inc., a Delaware corporation
and wholly owned subsidiary of Dow ("Merger Sub"), entered into an Agreement and
Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will merge
with and into UCC (the "Merger"), with UCC continuing in existence as the
surviving corporation (the "Surviving Corporation") and a wholly owned
subsidiary of Dow. Each share of UCC Common Stock issued and outstanding at the
effective time of the Merger, other than shares of UCC Common Stock owned by
Dow, UCC or any direct or indirect subsidiary of Dow or UCC, which will be
canceled in the Merger, will be converted into 0.537 shares of the common stock
of Dow, par value $2.50 per share, subject to adjustment as provided in the
Merger Agreement. All shares of UCC Common Stock, when so converted, shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist. Each issued and outstanding share of the common stock of Merger
Sub, par value $0.01 per share, shall be converted into one share of common
stock of the Surviving Corporation. The Merger Agreement requires the Surviving
Corporation to use its reasonable best efforts to cause the UCC Common Stock to
be de-listed from the New York Stock Exchange, and the Chicago and the Pacific
stock exchanges and de-registered under the Securities Exchange Act of 1934, as
amended, as soon as practicable following the effective time of the Merger.
The closing of the Merger will occur on the second business day on which
the last of the closing conditions to the Merger contained in the Merger
Agreement have been satisfied or waived or on such other date as UCC and Dow may
agree. The Merger is intended to qualify as a reorganization for purposes of
Section 368(a) of the Internal Revenue Code of 1986, as amended, and for
accounting and financial purposes as a pooling of interests. The Merger is
subject to a number of conditions set forth in the Merger Agreement.
Page 3 of 9 Pages
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Pursuant to the Merger Agreement, upon consummation of the Merger, (i) the
certificate of incorporation of UCC and the bylaws of Merger Sub immediately
prior to the effective time of the Merger will be the certificate of
incorporation and bylaws of the Surviving Corporation until duly amended as
provided therein or by applicable law; (ii) the directors of Merger Sub at the
effective time of the Merger will be the directors of the Surviving Corporation;
(iii) the officers of UCC at the effective time of the Merger will be the
officers of the Surviving Corporation; and (iv) two current UCC directors will
be appointed as members of the board of directors of Dow.
The Merger Agreement provides that UCC may not take certain actions prior
to the effective time of the Merger, except as agreed to in writing by Dow or as
contemplated by the Merger Agreement, the Stock Option Agreement, or as
disclosed or required by applicable law, including the declaration or paying of
any dividend payable in cash, stock or property in respect of any capital stock,
other than regular quarterly cash dividends not in excess of $0.225 per share of
UCC Common Stock.
Pursuant to the Merger Agreement, UCC must pay Dow a fee of $300 million in
cash (the "Termination Fee") if the Merger Agreement is terminated in the
following circumstances:
(i) if all of the following occur: (w) another person makes an acquisition
proposal or expresses an interest to make an acquisition proposal and that
acquisition proposal is not withdrawn prior to the UCC stockholders meeting, (x)
UCC's stockholders do not adopt the Merger Agreement and do not approve the
Merger at the UCC stockholders meeting, (y) either Dow or UCC terminates the
Merger Agreement because UCC's stockholders did not adopt the Merger Agreement
and did not approve the Merger at the UCC stockholders meeting, and (z) within
12 months after termination of the Merger Agreement, UCC enters into an
agreement to complete a transaction that constitutes an acquisition proposal if
it were the subject of a proposal; or
(ii) if UCC terminates the Merger Agreement because UCC's board of
directors provides written notice to Dow that UCC intends to enter into a
binding written agreement for a superior proposal from another person; or
(iii) if Dow terminates the Merger Agreement because (y) before the UCC
stockholders meeting, UCC's board of directors withdraws, adversely modifies or
changes its recommendation in favor of the Merger Agreement and the Merger or
fails to reconfirm its recommendation in favor of the Merger Agreement and the
Merger within 15 business days after a written request by Dow to do so, or (z)
at any time, there has been a material breach by UCC of its obligation under the
Merger Agreement not to solicit, encourage or engage in negotiations regarding
an alternative acquisition proposal.
As an inducement and condition to Dow's and Merger Sub's willingness to
enter into the Merger Agreement, UCC entered into a Stock Option Agreement with
Dow, dated as of August 3, 1999 (the "Stock Option Agreement"), whereby UCC
granted Dow an Option to purchase up to 26,502,964 shares of UCC Common Stock,
or such number of shares of UCC Common Stock as represents 19.9% of the then-
outstanding shares of UCC Common Stock, at a price per share of $48.8125.
The Option is exercisable within 180 days following the occurrence of any
event entitling Dow to receive the Termination Fee under the Merger Agreement (a
"Triggering Event") unless prior to the Triggering Event, the effective time of
the Merger occurs. The Option expires upon either (i) the effective time of the
Merger; or (ii) the earlier of (y) 180 days after the date that Dow becomes
entitled to receive the Termination Fee under the Merger Agreement and (z) the
date that Dow is no longer potentially entitled to receive the Termination Fee
under the Merger Agreement for a reason other than that Dow has already received
the Termination Fee.
Instead of purchasing shares of UCC Common Stock under the Option upon the
occurrence of a Triggering Event, the Stock Option Agreement provides that Dow
may require UCC to pay to Dow an amount per share of UCC Common Stock equal to
the number of shares of UCC Common Stock subject to the Option multiplied by the
difference between (i) the highest of (x) the price per share of UCC Common
Stock at which a tender or exchange offer for UCC Common Stock has been made,
(y) the price per share of UCC Common
Page 4 of 9 Pages
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Stock to be paid by any other person pursuant to an agreement with UCC and (z)
the highest trading price for shares of UCC Common Stock on the New York Stock
Exchange within the 120-day period immediately preceding the delivery of the
notice requesting cash payment for the Option; and (ii) $48.8125, the exercise
price of the Option.
The Stock Option Agreement limits the amount of total profit that Dow may
receive from the Option to an aggregate of $50 million.
The preceding are summaries of the principal terms of the Merger Agreement
and the Stock Purchase Agreement and do not purport to be complete. Reference is
made to the full text of such agreements which are filed as exhibits to this
statement and are incorporated in this Schedule 13D by this reference. The full
text of the joint press release filed as an exhibit to this statement also is
incorporated in this Schedule 13D by this reference.
Except as set forth in this Item 4 or as provided in the Merger Agreement,
the Stock Option Agreement and as otherwise referred to or described in this
Schedule 13D, Dow has no present plan or proposal which relates to or would
result in any of the matters referred to in Items (a) through (j) of Item 4 of
Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) - (b) By reason of its execution of the Stock Option Agreement, Dow may
be deemed to beneficially own 26,502,964 shares, or approximately 19.9%, of the
UCC Common Stock subject to the Option. However, Dow disclaims beneficial
ownership of shares of UCC Common Stock which are purchasable by Dow upon
exercise of the Option on the grounds that the Option is not presently
exercisable and only becomes exercisable upon the occurrence of the events set
forth in the Stock Option Agreement, none of which have occurred. If the Option
becomes exercisable and Dow exercises the Option, Dow would have the sole right
to vote and to dispose of the shares of UCC Common Stock issued as a result of
such exercise.
To Dow's knowledge, none of the persons named on Schedule 1 own shares of
UCC Common Stock.
(c) Other than the execution of the Stock Option Agreement on August 3,
1999, none of Dow or, to Dow's knowledge, any of the persons named on Schedule 1
have effected any transactions in UCC Common Stock in the past 60 days.
(d) - (e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SECURITIES OF THE ISSUER
Reference is made to Item 4 above.
Except as provided in the Merger Agreement, the Stock Option Agreement and
as otherwise referred to or described in this Schedule 13D, to Dow's knowledge,
there are no contracts, arrangements, understandings or relationships (legal or
otherwise) between Dow and UCC or any other person with respect to any
securities of UCC.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
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<C> <S>
99(a)(1) Agreement and Plan of Merger dated as of August 3, 1999, among
UCC, Dow and Merger Sub (incorporated by reference to Exhibit 2
to the current report on Form 8-K filed by UCC on August 5,
1999).
99(a)(2) Stock Option Agreement dated as of August 3, 1999, between UCC
and Dow (incorporated by reference to Exhibit 99.1 to the
current report on Form 8-K filed by UCC on August 5, 1999)
99(a)(3) Text of Joint Press Release dated August 4, 1999, issued by
UCC and Dow (incorporated by reference to Exhibit 99.2 to the
current report on Form 8-K filed by UCC on August 5, 1999).
</TABLE>
Page 5 of 9 Pages
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SCHEDULE 1
Information Concerning Executive Officers and
Directors of The Dow Chemical Company
The current corporate officers and directors of The Dow Chemical Company
("Dow") are listed below. The address of Dow is: The Dow Chemical Company, 2030
Dow Center, Midland, Michigan 48674. Dow does not consider all of its corporate
officers to be executive officers as defined by the Securities Exchange Act of
1934 or Releases thereunder. Unless otherwise indicated, all positions set forth
below opposite an individual's name refer to positions within Dow, and the
business address listed for each individual not principally employed by Dow is
also the address of the corporation or other organization which principally
employs that individual.
<TABLE>
<CAPTION>
POSITION/PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND BUSINESS ADDRESS CITIZENSHIP
<S> <C> <C>
CORPORATE OFFICERS
- ------------------
Frank P. Popoff Chairman of the Board U.S.A.
William S. Stavropoulos President and Chief Executive Officer U.S.A.
J. Pedro Reinhard Executive Vice President and Brazil
Chief Financial Officer
Arnold A. Allemang Vice President of Operations U.S.A.
Anthony J. Carbone Executive Vice President U.S.A.
Michael D. Parker Executive Vice President United Kingdom
John Scriven Vice President, General Counsel and Switzerland
Secretary
Lawrence J. Washington, Jr. Vice President, U.S.A.
Environment, Health &
Safety, Human Resources and
Public Affairs
Geoffery E. Merszei Vice President and Treasurer Canada
G. Michael Lynch Vice President and Controller U.S.A.
Richard M. Gross Vice President and Director U.S.A.
of Research & Development
</TABLE>
Page 6 of 9 Pages
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<TABLE>
<CAPTION>
POSITION/PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND BUSINESS ADDRESS CITIZENSHIP
<S> <C> <C>
DIRECTORS
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Frank P. Popoff Officer of Dow U.S.A.
William S. Stavropoulos Officer of Dow U.S.A.
J. Pedro Reinhard Officer of Dow Brazil
Arnold A. Allemang Officer of Dow U.S.A.
Jacqueline K. Barton Professor of Chemistry U.S.A.
California Institute of Technology
Division of Chem. & Chem. Engr.
Mail Code 127-72
Pasadena, California 91125
David T. Buzzelli Senior Consultant to Dow U.S.A.
Anthony J. Carbone Officer of Dow U.S.A.
John C. Danforth Partner U.S.A.
Bryan Cave LLP
One Metropolitan Square
211 North Broadway, Suite 3600
St. Louis, Missouri 63102-2750
Willie D. Davis President and Chief Executive Officer U.S.A.
All Pro Broadcasting, Inc.
161 N. LaBrea Avenue
Inglewood, California 90301
Joseph L. Downey Senior Consultant to Dow U.S.A.
Enrique C. Falla Senior Consultant to Dow U.S.A.
Barbara Hackman Franklin President and Chief Executive Officer U.S.A.
Barbara Franklin Enterprises
2600 Virginia Avenue NW, Suite 506
Washington, DC 20037
Allan D. Gilmour Retired Vice Chairman of Ford U.S.A.
Motor Company
36 Blair Lane
Dearborn, Michigan 48120
Michael D. Parker Officer of Dow United Kingdom
Harold T. Shapiro President and Professor of Economics U.S.A.
and Public Affairs
Princeton University
1 Nassau Hall
Princeton, NJ 08544
</TABLE>
Page 7 of 9 Pages
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<TABLE>
<CAPTION>
POSITION/PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND BUSINESS ADDRESS CITIZENSHIP
<S> <C> <C>
Paul G. Stern Partner U.S.A.
Thayer Capital Partners
and Arlington Capital Partners
1455 Pennsylvania Avenue NW,
Suite 350
Washington, DC 20004
</TABLE>
Page 8 of 9 Pages
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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: August 13, 1999
THE DOW CHEMICAL COMPANY
By: /s/ J. Pedro Reinhard
-------------------------------------
Name: J. Pedro Reinhard
-----------------------------------
Title: Executive Vice President and Chief
Financial Officer
Page 9 of 9 Pages
