April 5, 1996
Dear Shareholder:
As you will note from the attached news release, the board and management
have agreed to terms which end the current consent solicitation by a dissident
group of shareholders. Consequently, we can once again focus our complete
energies and resources on our primary objective of creating shareholder value.
The changes you have seen us make in the company have provided a great deal
of upside potential in our assets which we believe will begin to be realized in
the stock price, particularly if there is a favorable resolution of the
Tennessee Gas litigation.
Thank you for your support. Our annual shareholders meeting is scheduled
for June 6. A proxy for the meeting should be mailed in the near future.
Please call our investor relations department at 800/837-6768 if you have
questions or comments.
Sincerely,
/s/ Bruce A. Smith
Bruce A. Smith
FOR IMMEDIATE RELEASE Contact: Greg Wright
(210) 283-2440
TESORO AND DISSIDENT SHAREHOLDER GROUP
AGREE TO END CONSENT SOLICITATION
San Antonio, Texas -- April 5, 1996 -- Tesoro Petroleum Corporation
(NYSE:TSO) and the Committee for New Management of Tesoro Petroleum Corporation
today announced that an agreement has been reached to end a consent solicitation
initiated by the Committee Dec. 26, 1995.
Following is a summary of the terms of the agreement.
. The Committee will terminate its current consent solicitation and both
parties will dismiss all pending legal action.
. The members of the dissident shareholder group have agreed that, for a
period ending the earlier of the day after Tesoro's 1999 annual
meeting or June 30, 1999, they will not seek to take over control of
the company or support, encourage or assist any effort to elect anyone
to Tesoro's Board of Directors other than nominees recommended by the
board.
. Three new directors will be named to Tesoro's board, increasing the
number of directors to nine: One director will be Sanford B. Prater,
a partner of Ardsley Advisory Partners, the company's largest
shareholder; Dr. Alan Kaufman, a Committee member, will be elected as
a second director; and the third will be selected by the board's
Governance Committee but will have no prior connection to Tesoro, the
Committee or Ardsley.
-more-
"This consent solicitation has diverted management time and company
resources from our primary objective of increasing shareholder value," Tesoro
Chief Executive Officer Bruce Smith said. "Beginning last year, we have
initiated cost savings, redeployed assets, lowered debt, strengthened management
and improved corporate governance, all of which sets the stage for improved
value. This is a program that needs our full attention. We believe this
settlement represents a win-win solution for our shareholders since it adds
additional shareholder representation on our board and will include individuals
who will bring a different perspective to Tesoro. We welcome this change and
are pleased that we can once again bring our full resources to bear on improving
Tesoro's operations."
Kevin Flannery, president of Whelan Management Corp., said "We have seen
the implementation of many of the changes the Committee has sought and now
believe the management and board of Tesoro are headed in the right direction to
create shareholder value. We are pleased that members of the board now
represent ownership of approximately 20% of Tesoro's outstanding shares."
Tesoro Petroleum Corporation is a natural resource company engaged in
natural gas exploration and production, petroleum refining and marketing, and
marine services.
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