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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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[_] Filed by the Registrant
[x] Filed by a Party other than the Registrant
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 Rule 14a-11(c) or Rule 14a-12
Tesoro Petroleum Corporation
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(Name of Registrant as Specified in Its Charter)
The Stockholders' Committee for New Management of
Tesoro Petroleum Corporation
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 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.):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[x] 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:
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PRELIMINARY COPY-SUBJECT TO COMPLETION
CONSENT SOLICITATION STATEMENT OF THE STOCKHOLDERS'
COMMITTEE FOR NEW MANAGEMENT OF TESORO PETROLEUM CORPORATION
To the Stockholders of Tesoro Petroleum Corporation:
The time has come for the stockholders of Tesoro Petroleum
Corporation, a Delaware corporation (the "Company"), to take charge of
the future of their investments in the Company. Toward that end, a
group of concerned stockholders has formed The Stockholders' Committee
for New Management of Tesoro Petroleum Corporation (the "Committee")
in order to solicit consents from the holders of common stock, par
value $0.16-2/3 per share (the "Common Stock"), of the Company to take
action without a stockholders' meeting, as permitted by Delaware law.
The Committee is soliciting consents with respect to:
1. The amendment of Sections 2.1, 2.2 and 2.7 of Article II
of the By-Laws of the Company to:
(a) set the number of directors that constitute the Board
of Directors of the Company (the "Board") at five;
(b) unambiguously provide that stockholders may remove any
or all directors, with or without cause, whether at an
annual or special meeting or by written consent;
(c) provide that vacancies created on the Board by the
removal of one or more directors be filled only by
stockholder action; and
(d) repeal any and all By-Law provisions or amendments
thereto adopted after November 14, 1995.
2. The removal of all seven of the present members of the
Board and any person or persons elected or appointed to the Board
prior to the effective date of the proposed actions set forth
herein; and
3. The election of George F. Baker, Gale L. Galloway, Alan
Kaufman, James H. Stone and Douglas Thompson as directors of the
Company (collectively, the "Committee Nominees"), to serve until
their successors are elected and qualified.
On February 5, 1996, pursuant to Section 213(b) of the
Delaware General Corporation Law (the "DGCL") and in accordance with
the By-Laws of the Company as believed to be currently in effect (the
"By-Laws"), the Committee requested by written notice delivered to the
Secretary of the Company that the Board fix a record date for this
consent solicitation. [On
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________, 1996, the Company announced that the Board had set ________,
1996, as the record date for the purposes of this solicitation (the
"Record Date").] This Consent Statement and the related WHITE Consent
Card are first being sent or given on or about __________, 1996, to
holders of record of Common Stock on the Record Date.
YOU ARE URGED TO CONSENT TO THE REMOVAL OF THE BOARD AND THE
ELECTION OF THE COMMITTEE NOMINEES BY MARKING, SIGNING, DATING, AND
RETURNING PROMPTLY THE ENCLOSED WHITE CONSENT CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED. THE FAILURE TO EXECUTE A CONSENT WILL HAVE THE
SAME EFFECT AS WITHHOLDING A CONSENT. SEE "THE CONSENT
PROCEDURE-SPECIAL INSTRUCTIONS."
THE COMMITTEE URGES YOU NOT TO SIGN ANY GREEN REVOCATION OF
CONSENT CARDS SENT TO YOU BY THE COMPANY. IF YOU HAVE PREVIOUSLY
SIGNED AND RETURNED A GREEN REVOCATION OF CONSENT CARD, YOU HAVE EVERY
REASON TO CHANGE YOUR MIND AND MAY DO SO BY MARKING, SIGNING, DATING
AND RETURNING A LATER-DATED WHITE CONSENT CARD.
If your shares of Common Stock are held in the name of a
brokerage firm, bank nominee or other institution, only it can execute
a Consent Card with respect to your shares. Accordingly, please
contact the person responsible for your account and give instructions
for a WHITE Consent Card to be signed representing your shares. The
Committee requests that you confirm your instructions to the person
responsible for your account in writing and provide a copy of such
instructions to the Committee, c/o Morrow & Co., Inc., 909 Third
Avenue, New York, New York 10022, so that the Committee will be aware
of all instructions given and can attempt to ensure that such
instructions are followed.
THE PROPOSED ACTIONS WILL BECOME EFFECTIVE AT THE TIME, NOT
LATER THAN _____________, 1996 [WITHIN 60 DAYS OF THE EARLIEST DATED
CONSENT DELIVERED TO THE COMPANY], THAT WRITTEN UNREVOKED CONSENTS OF
THE HOLDERS OF A MAJORITY OF THE SHARES OF COMMON STOCK OUTSTANDING AT
THE CLOSE OF BUSINESS ON THE RECORD DATE ARE DELIVERED TO THE COMPANY
(THE "EFFECTIVE TIME").
If you have any questions about completing or signing the
White Consent Card or require assistance, including assistance in
assuring that any of your shares held by brokers or other nominees are
voted, please call Morrow & Co., Inc. at (800) 634-4458.
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REASONS FOR THE CONSENT SOLICITATION
The Committee is soliciting the consent of holders of the
Common Stock to actions that would result in the removal of all
incumbent members of the Board and their replacement with the
Committee Nominees, who will devote their energies to reorganizing and
revitalizing the Company.
THE BASIC ISSUE WE ARE RAISING THROUGH THIS CONSENT
SOLICITATION IS WHETHER THE INCUMBENT DIRECTORS' RECORD JUSTIFIES
THEIR CONTINUATION IN OFFICE OR WHETHER A NEW BOARD OF DIRECTORS
SHOULD BE GIVEN THE OPPORTUNITY TO SEEK NEW DIRECTIONS FOR THE BENEFIT
OF ALL STOCKHOLDERS OF THE COMPANY.
In our view the answer is clear: We think that the
Company's current management has failed to perform its primary
function -- maximizing stockholder value.
WE THINK THAT MANAGEMENT WILL CONTINUE WITH BUSINESS AS
USUAL FOR THE FORESEEABLE FUTURE UNLESS STOCKHOLDERS ELECT A NEW
BOARD.
We believe that many of you share our discontent and
concerns. In order to address those concerns, the Committee seeks
your help to remove the directors now in office and elect five new
directors who, we believe, will be responsive to stockholders and
firmly committed to the goal of increasing stockholder value.
Your consent is important. No matter how many or how few
shares you own, please help us to improve stockholder value by
completing, signing, dating and mailing the enclosed WHITE Consent
Card promptly. The Committee urges you not to sign any green
revocation of consent cards sent to you by the Company. If you have
previously signed and returned a green revocation of consent card, you
have every reason to change your mind and may do so by marking,
signing, dating and returning a later-dated WHITE Consent Card.
THE COMMITTEE AND ITS NOMINEES
The Committee consists of George F. Baker, Kevin S.
Flannery, Alan J. Kaufman, M.D., James H. Stone and Robert S.
Washburn. Dr. Kaufman and Messrs. Baker and Stone also are Committee
Nominees.
Mr. Flannery, age 51, has been, since May 1993, President, a
director and the principal stockholder of Whelan Management Corp.
("Whelan"), an investment advisory firm, and of Whelan Securities
Inc., a securities broker-dealer. From September 1991 until April
1993 he was Senior Vice President and head equity trader at George
Weiss Associates, Inc., a money management
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and brokerage firm in Hartford, Connecticut. From 1975 until
September 1991 Mr. Flannery was with Bear, Stearns & Co., Inc. as
Senior Managing Director and head of the block trading desk.
Mr. Washburn, age 64, has a background in law, real estate
development and investment banking, and currently manages his private
investment portfolio. From 1974 to 1987, Mr. Washburn was a general
partner of Montgomery Securities, a New York Stock Exchange member
firm, serving as head of its investment banking activities and as
Chairman of its Executive Committee for several of those years.
The Committee Nominees are Mr. Baker, Dr. Kaufman, Mr.
Stone, Gale L. Galloway and Douglas B. Thompson. Brief biographical
information about each of these individuals follows:
George F. Baker, age 56, has been President of Cambridge
Capital Holdings, an investment advisory firm, since 1987, and a
General Partner of Baker, Nye L.P., an investment partnership, since
1967. Mr. Baker also is Chairman, President and Chief Executive
Officer of Whitehall Corporation, a New York Stock Exchange company in
the electronics, aerospace and earth sciences fields. He is a
director of Digicon, Inc., an American Stock Exchange Company engaged
primarily in the business of collecting, processing and interpreting
geophysical data for the oil and gas exploration and development
industry.
Gale L. Galloway, age 66, has had a long career in the oil
and natural gas industry, and for more than the past five years has
been Chairman of the Board and Chief Executive Officer of GLG Energy,
Inc., an independent oil and gas producer. Mr. Galloway has formerly
served as Chairman and Chief Executive Officer of Louisiana Intrastate
Gas Corporation and Entex. Prior to his employment with Entex, Mr.
Galloway was Chairman, President and Chief Executive Officer of
Celeron Corporation and a member of the Board of Directors of The
Goodyear Tire & Rubber Company. Celeron and Entex were Fortune 500,
New York Stock Exchange listed corporations. As of August 1994, Mr.
Galloway has been a part owner and a member of the Board of Directors
of Prodevco S.A., a project development company, headquartered in
Santiago, Chile, and involved principally in the design and
development of refinery units in South America. Since September of
1994, Mr. Galloway has been a part owner and director of Pennacle
Natural Gas Co., a natural gas gathering company and, from May of 1995
until the present, Mr. Galloway has served as a member and owner of
1836 L.L.C., a product distribution company.
Dr. Alan J. Kaufman, age 58, has been a practicing
neurosurgeon for over 25 years and an investor in a number of
companies. Since 1987, he has been a director of Newpark Resources,
Inc., a New York Stock Exchange company engaged primarily in providing
oilfield services.
James H. Stone, age 70, has served since March of 1993 as
Chairman of the Board and Chief Executive Officer of Stone Energy
Corporation, a New York Stock Exchange company engaged primarily in
oil and natural gas exploration and development. Stone Energy
Corporation was formed in March 1993 to become a holding company for
The Stone Petroleum Corporation ("TSPC")
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and its subsidiaries and certain partnership interests. Mr. Stone
served as Chairman of the Board of TSPC from 1981 until March of 1993
and served as President of TSPC from September of 1992 to July of
1993. He also is a director and member of the executive committee of
the Board of Directors of Newpark Resources, Inc., a New York Stock
Exchange company, engaged primarily in providing oilfield services,
and a director and member of the Executive Committee of the Board of
Directors of Hibernia Corp., a bank holding company listed on the New
York Stock Exchange, and of its subsidiary, Hibernia National Bank.
Douglas B. Thompson, age 46, has served since July of 1991
as a director and member of the executive committee of Digicon, Inc.,
a worldwide integrated geophysical service company listed on the
American Stock Exchange, and as Digicon's Chairman of the Board
commencing in April of 1994. Since June of 1991, Mr. Thompson has
been Chairman of the Board of Welltech, a domestic and international
well servicing and production servicing company, and, from September
of 1992 to October of 1995, he served as Welltech's President and
Chief Executive Officer. Mr. Thompson has also been President and
sole shareholder of Jupiter Management Company, an investment company,
since 1989.
Certain additional information regarding the Committee's
members and the Committee Nominees, including stock ownership
information regarding the members of the Committee and the Committee
Nominees, is set forth in Appendix I attached to this Consent
Solicitation Statement.
All information contained in this Consent Solicitation
Statement (including Appendices) concerning each member of the
Committee and each Committee Nominee has been provided to the
Committee by that person.
THE COMMITTEE'S PROPOSALS
The Committee believes that a new Board must be elected in
order to further stockholder interests. To achieve that end, the
Committee is requesting stockholders to give their written consents to
the following actions:
1. BY-LAW AMENDMENTS.
The Committee is proposing amendments (the "By-Law
Amendments") to certain provisions of the Company's By-Laws. Our
first proposal concerning the By-Laws relates to the size of the
Board, the removal of directors and the filling of vacancies on the
Board. The purpose and effect of each of the Committee's proposed
By-Law Amendments is to facilitate the proposed removal and
replacement of all incumbent directors, as discussed further below.
Article II, Section 2.1 of the By-Laws, as now in effect,
provides that the number of directors who constitute the whole Board
is to be determined by resolution of the Board, but may not be fewer
than three. The Committee believes that the number of directors
constituting the entire Board currently consists of seven directors.
The Committee's proposed amendment to Article II,
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Section 2.1, if adopted, will fix the number of directors at five,
while maintaining the authority of the Board to increase or decrease
the number of directors. The proposed amendment is designed to ensure
that the Committee Nominees, if elected, will maintain majority
representation on the Board in order to carry out their plan of
seeking to maximize stockholder value.
Under the General Corporation Law of the State of Delaware
(the "DGCL"), directors of a corporation without a classified board
and whose certificate of incorporation does not otherwise provide may
be removed with or without cause by the holders of a majority of the
outstanding shares entitled to vote in the election of directors. The
Company does not have a classified board, and its Certificate of
Incorporation makes no provision respecting the removal of directors.
In addition, unless a Delaware corporation's certificate of
incorporation otherwise provides, the DGCL permits stockholders to
take action without a meeting and without prior notice if a consent or
consents in writing, setting forth the action so taken, are signed by
the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to take such action at a
meeting at which all shares entitled to vote on that action were
present. Under the applicable provision of the DGCL, stockholder
action by written consent is effective when written consents from the
holders of record of the minimum number of shares of stock necessary
to authorize the action are executed and delivered to the corporation
within 60 days of the earliest dated consent so delivered.
Since the DGCL provides that the directors of a corporation
may be removed without cause unless otherwise provided in the
certificate of incorporation, and because the Company's Certificate of
Incorporation contains no contrary provision, we believe that one of
the fundamental charter rights of the Company's stockholders is to
exercise complete and unfettered discretion in choosing and changing
the persons who manage its business and affairs. Section 2.7 of
Article II of the By-Laws provides that directors may be removed (with
or without cause) at a special meeting of stockholders called for that
specific purpose. Other provisions of the By-Laws, however, state
that stockholder actions which may be taken at special meetings may be
taken by written consent in lieu of a special meeting, subject to
certain requirements. The Committee believes, therefore, that the
By-Laws (as well as applicable provisions of the DGCL) permit the
removal of directors without cause through use of a written consent
solicitation like the one in which the Committee currently is engaged
and do not limit the exercise of the removal power to special
meetings. In order to achieve certainty, however, the Committee's
Consent Card includes a proposal to amend Article II, Section 2.7 of
the By-Laws to unambiguously provide that stockholders may remove any
or all directors with or without cause, whether at an annual or
special meeting or by written consent. The adoption of this amendment
will facilitate the removal of all of the incumbent members of the
Board, as discussed below.
Sections 2.2 and 2.7 of Article II of the By-Laws provide
that vacancies created by the removal of a director may be filled by
the majority vote of the remaining directors. These provisions permit
such vacancies to be filled without any stockholder participation.
The Committee proposes to amend Article II, Sections 2.2 and 2.7 of
the By-Laws to require that such vacancies be filled only by
stockholder action. This proposed amendment is intended to prevent the
incumbent Board of Directors from filling any of the vacancies which
would be created upon the removal of any of its members.
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The texts of Section 2.1, 2.2 and 2.7 of Article II of the
By-Laws, as believed to be currently in effect, and as proposed to be
amended, are set forth in Appendix II attached to this Consent
Solicitation Statement.
On November 14, 1995, the Company filed with the Securities
and Exchange Commission (the "Commission") its report on Form 10-Q for
the quarter ended September 30, 1995 (the "1995 Third Quarter 10-Q").
The 1995 Third Quarter 10-Q included as an exhibit a form of By-Laws
for the Company which indicated that they reflected amendments made by
the incumbent Board on September 27, 1995. Those amendments include
(i) a new requirement of 60 or 90 days' prior notice in order for
stockholders to nominate directors or place matters on the agenda at
an annual or special meeting of stockholders and (ii) new requirements
for and conditions upon actions by stockholders by written consent.
In the Committee's view, the effect of these and other By-Law changes
made by the incumbent Board is to increase the difficulty, time and
expense of actions by stockholders to exercise their rights
effectively as the Company's true owners.
Additionally, the By-Law Amendments we are proposing include
the repeal of each provision of the Company's By-Laws or any amendment
thereto adopted by the incumbent Board after November 14, 1995, and
prior to the Effective Time. The reason for this proposed repeal is
to address the possibility that the Board may have taken, and not yet
publicly disclosed, actions that the Committee might be opposed to or
that the Board might take during the pendency of this solicitation.
The Committee, however, is not aware of the adoption by the incumbent
Board after November 14, 1995, of any provision of the Company's By-
Laws or any amendment thereto, and the Committee has no reason to
believe at this time that the incumbent Board has adopted any such
provisions or amendments that have not been disclosed. In the event
that the Committee becomes aware of any action taken by the incumbent
Board to amend the By-Laws following the date of this Consent
Solicitation Statement, the Committee will distribute as necessary
additional materials describing the By-Law provisions or amendments
that would be affected by the By-Law repeal amendment. Additionally,
if the By-Law Amendments are adopted pursuant to this consent
solicitation, prompt notice, including a description of such repealed
By-Law provisions or amendments, must be given by the Company pursuant
to Section 228(d) of the DGCL to stockholders who did not execute
consents. Moreover, if the By-Law Amendments are adopted pursuant to
this consent solicitation, a description of such repealed By-Law
provisions or amendments will be included in the report on Form 10-Q
for the quarter in which the Effective Time occurs.
As indicated above, the 1995 Third Quarter 10-Q includes the
By-Laws as an exhibit. Accordingly, the Committee assumes that the
By-Laws, in the form filed with the 1995 Third Quarter 10-Q, were
current as of November 14, 1995, the date of filing, and the
Committee's proposed By-Law Amendments would not repeal any provision
of the By-Laws that was publicly disclosed prior to that date, other
than as specifically described herein; however, any amendment to the
By-Laws adopted by the Board since November 14, 1995 and prior to the
Effective Time would be repealed. There are no provisions in the
By-Laws or in the Company's Certificate of Incorporation restricting
the ability of stockholders to amend or repeal provisions of the
By-Laws without the consent of the Board. Although, to the Committee's
knowledge, there is no Delaware precedent precisely on point, the
Committee is confident that such proposed repeal of undisclosed
By-Laws or amendments is
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enforceable. If it were not, By-Laws adopted by the Board would not
be automatically repealed, but would be subject to challenge in court.
THE COMMITTEE RECOMMENDS THAT YOU EXECUTE THE ACCOMPANYING
WHITE CONSENT CARD FOR THE PROPOSED BY-LAW AMENDMENTS.
2. REMOVAL OF ALL INCUMBENT DIRECTORS.
Based on the Company's filings with the Commission, the
individuals who now sit on the Board are Robert J. Caverly, Peter M.
Detwiler, Steven H. Grapstein, Raymond K. Mason, Sr., John J. McKetta,
Jr., Bruce A. Smith and Murray L. Weidenbaum. The Committee believes
that the incumbent directors have failed to maximize stockholder value
and should be removed and replaced with the Committee Nominees.
ACCORDINGLY, THE COMMITTEE RECOMMENDS THAT YOU EXECUTE THE
ACCOMPANYING WHITE CONSENT CARD FOR REMOVAL OF ALL OF THE PRESENT
MEMBERS OF THE COMPANY'S BOARD AND ANY PERSON ELECTED BY THE INCUMBENT
DIRECTORS (WHETHER BEFORE OR AFTER THE DATE OF THIS CONSENT
SOLICITATION STATEMENT) TO FILL ANY VACANCY OR NEWLY CREATED
DIRECTORSHIP.
3. PROPOSED ELECTION OF THE COMMITTEE NOMINEES.
If the proposed By-Law Amendments are adopted and the
Company's incumbent directors are removed, the entire Board will
consist of five directorships, all of which will be vacant. To fill
those vacancies, the Committee proposes the election of the Committee
Nominees -- George F. Baker, Gale L. Galloway, Alan J. Kaufman, M.D.,
James H. Stone and Douglas B. Thompson. Certain information
concerning the Committee's Nominees is set forth above under the
caption "THE COMMITTEE AND ITS NOMINEES" and in Appendix I attached to
this Consent Solicitation Statement. Each of the Committee Nominees
has agreed to serve as a director of the Company, if elected.
THE COMMITTEE RECOMMENDS THAT YOU EXECUTE THE ACCOMPANYING
WHITE CONSENT CARD FOR THE ELECTION OF THE COMMITTEE NOMINEES TO THE
BOARD. THE COMMITTEE URGES YOU NOT TO SIGN ANY GREEN REVOCATION OF
CONSENT CARDS SENT TO YOU BY THE COMPANY. IF YOU HAVE PREVIOUSLY
SIGNED A GREEN REVOCATION OF CONSENT CARD, YOU HAVE EVERY REASON TO
CHANGE YOUR MIND AND MAY DO SO BY MARKING, SIGNING, DATING AND
RETURNING A LATER-DATED WHITE CONSENT CARD.
CONSENT PROCEDURE
Section 228 of the DGCL states that, unless otherwise
provided in the certificate of incorporation of a Delaware
corporation, any action that is required to be or may be taken at any
annual or special meeting of stockholders of that corporation may be
taken without a meeting, without
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prior notice and without a vote, if a consent or consents in writing,
setting forth the action so taken, are signed by the holders of
outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and voted,
and those consents are delivered to the corporation by delivery to its
registered office in Delaware, its principal place of business or an
officer or agent of the corporation having custody of the books in
which proceedings of meetings of stockholders are recorded. The
Company's certificate of incorporation does not prohibit stockholder
action by written consent.
Section 213(b) of the DGCL provides that if no record date
has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in
writing without a meeting, when no prior action by the board of
directors is required, will be the first date on which a signed
written consent setting forth the action taken or proposed to be taken
is delivered to the corporation by delivery to its registered office
in Delaware, its principal place of business or an officer or agent of
the corporation having custody of the books in which proceedings of
meetings of the stockholders are recorded. On September 27, 1995, the
Board, without stockholder involvement, amended its By-Laws to provide
that a stockholder seeking to have the stockholders of the Company
authorize or take corporate action by written consent is required to
request the Board to fix a record date. Pursuant to the September 27,
1995, By-Law amendments, the Board shall promptly, but in all events
within 10 days after the date on which the request is received, adopt
a resolution fixing the record date for the solicitation. The By-Laws
further provide that such record date may not be before nor more than
15 days after the date of the resolution.(1) If the Board fails
to set a record date on a timely basis, a stockholder may fix the
record date by the delivery of a signed consent to the Company. On,
February 5, 1996, pursuant to DGCL Section 213(b) and in accordance
with the By-Laws, the Committee requested by written notice delivered
to the Secretary of the Company that the Board fix a record date for
this consent solicitation. [On ________, 1996, the Company announced
that the Board had set ________, 1996, as the Record Date.]
If the Proposals are adopted pursuant to this consent
solicitation, prompt notice must be given by the Company pursuant to
Section 228(d) of the DGCL to stockholders who have not executed
consents.
EFFECTIVENESS AND REVOCATION OF CONSENTS
The Committee's proposals will become effective when
properly completed, unrevoked consents are signed by the holders of
record as of the Record Date of a majority of the voting power of the
then outstanding Common Stock and such consents are delivered to the
Company,
___________________
(1) The Committee believes that permitting the Board to set a
record date 15 days after the date of the resolution fixing such
record date may be inconsistent with DGCL Section 213(b), which
provides that the record date "shall not be more than ten days
after the date upon which the resolution fixing the record date
is adopted by the board of directors," and reserves the right to
contest any action by the Company which is inconsistent with DGCL
Section 213(b).
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provided that the requisite consents are so delivered within 60 days
of the date of the earliest dated consent so delivered to the Company.
An executed Consent Card may be revoked at any time by
marking, dating, signing and delivering a written revocation before
the time signed, unrevoked consents by the holders of more than 50% of
the outstanding shares of Common Stock on the Record Date have been
delivered to the Company pursuant to DGCL Section 228. A revocation
may be in any written form validly signed by the record holder as long
as it clearly states that the consent previously given is no longer
effective. The delivery of a subsequently dated Consent Card which is
properly completed will constitute a revocation of any earlier
consent. The revocation may be delivered either to the Committee, in
care of Morrow & Co., Inc., 909 Third Avenue, New York, New York
10022, or to the Company at 8700 Tesoro Drive, San Antonio, Texas
78217 or any other address provided by the Company. Although a
revocation is effective if delivered to the Company, the Committee
requests that either the original or photostatic copies of all
revocations of consents be mailed or delivered to the Committee as set
forth above, so that the Committee will be aware of all revocations
and can more accurately determine if and when the requisite consents
to the actions described herein have been received.
VALIDITY OF CONSENTS
In connection with a consent solicitation, the By-Laws of
the Company require that the Company retain nationally recognized
independent inspectors of elections for the purpose of performing a
ministerial review of the validity of consents and any revocations
thereof. Upon receipt by the inspectors of election of all of the
consents and revocations delivered to the Company in connection with
this consent solicitation, the By-Laws require the inspectors of
election to issue a preliminary report to the Company stating: (i)
the number of shares represented by valid and unrevoked consents; (ii)
the number of shares represented by invalid consents; (iii) the number
of shares represented by invalid revocations; and (iv) the number of
shares entitled to submit consents as of the Record Date. Unless the
Company and the Committee agree to a shorter or longer period, the
Company and the Committee will have five days thereafter to review the
consents and revocations and to advise the inspectors and the opposing
party in writing as to whether they intend to challenge the
preliminary report. If no timely written notice of an intention to
challenge the preliminary report is received, the inspectors will
certify the preliminary report (as corrected or modified by virtue of
the detection by the inspectors of clerical errors) as their final
report and deliver it to the Company. If the Company or the Committee
gives timely written notice of an intention to challenge the
preliminary report, a challenge session will be scheduled by the
inspectors as promptly as practicable. Following completion of the
challenge session, the inspectors will issue and deliver to the
Company as promptly as practicable their final report. Upon receipt
of a final report from the inspectors, the By-Laws require the Company
to give prompt notice to the stockholders of the results of this
consent solicitation.
CONSENTS REQUIRED
The consent of the holders of shares representing a majority
of the votes of all shares of Common Stock outstanding as of the
Record Date is required to adopt and approve each of the
10
<PAGE>
<PAGE>
Committee's proposals. According to the Company, there were
_____________ shares of Common Stock outstanding on the Record Date.
Each share of Common Stock entitles the Record-Date holder to one vote
on the Committee's proposals. Accordingly, written consents by
Record-Date holders of approximately ________________ shares of Common
Stock will be required to adopt and approve each of the Committee's
proposals.
As of the Record Date, the Committee's members, the
Committee Nominees and their respective affiliates and associates
beneficially owned an aggregate of [1,463,008] shares of Common Stock,
constituting approximately [6.0%] of the Common Stock believed to be
outstanding as of the Record Date, and expect to execute (or cause to
be executed) consents to all of the actions for which consents are
being solicited by the Committee with respect to all such shares. As
a result, in addition to the consents of the Committee's members and
the Committee Nominees, the unrevoked consents of other Record-Date
holders owning approximately [44.0%] of the outstanding shares of
Common Stock on the Record Date are required to adopt the Proposals.
SOLICITATION OF CONSENTS
Consents will be solicited by mail, telephone, telegraph,
telex, facsimile transmission, electronic mail and in person.
Solicitations of consents will be made by all or some of the
Committee's members and the Committee Nominees.
In addition, the Committee has retained Morrow & Co., Inc.
to assist in the solicitation and has executed an engagement letter
with Morrow & Co., Inc. providing for the payment of a fee of $150,000
plus reimbursement of expenses. The engagement letter provides Morrow
& Co., Inc. with indemnity from certain liabilities, including
liabilities arising under Federal securities laws. It is anticipated
that approximately 50 employees of Morrow & Co., Inc. will be involved
in soliciting the consents of stockholders in this consent
solicitation.
Brokers, custodians, nominees and fiduciaries will be
requested to forward solicitation material to beneficial owners of the
Common Stock. The Committee will reimburse brokers, custodians,
nominees and fiduciaries for their reasonable expenses for sending
solicitation material to the beneficial owners of Common Stock.
Subject to the following two paragraphs, the cost of
solicitation will be borne by the members of the Committee in equal
proportions. Total expenditures for the solicitation, including fees
for attorneys, accountants, financial advisers, solicitors,
advertising, printing, transportation, litigation and other costs
incidental to the solicitation are estimated to be approximately
$900,000. The total amount of such expenditures made to date
is estimated to be approximately $285,000, which amount
includes expenditures incurred to date for attorneys' fees and other
costs incidental to the matters set forth below under the caption
"CERTAIN LEGAL PROCEEDINGS."
Under an agreement between Mr. Washburn and Whelan, Mr.
Washburn will be entitled to receive a portion of the net profits, if
any, from the exercise and sale of 200,000 shares of
11<PAGE>
<PAGE>
Common Stock underlying certain options held by Whelan if Mr. Washburn
is not otherwise reimbursed for expenses incurred in connection with
this consent solicitation upon its termination. The amount payable to
Mr. Washburn will be equal to the lesser of (i) 30% of such net
profits, if any, realized upon exercise (or the deemed exercise and
the sale thereof based on the trading price of the Common Stock on the
NYSE on the date the consent solicitation is terminated) or (ii) the
aggregate amount of such expenses funded by Mr. Washburn as to which
no reimbursement is received.
The Committee will seek reimbursement of the costs of this
solicitation from the Company to the extent legally permissible. The
Committee does not intend that the question of the Company's
reimbursement of solicitation expenses will be submitted to a vote of
stockholders unless such submission is required by law.
SPECIAL INSTRUCTIONS
If you were a record holder as of the close of business on
the Record Date, you may elect to consent to or withhold consent to
each of the Committee's proposals by marking the "CONSENTS" or
"CONSENT WITHHELD" box, as applicable, underneath each such proposal
on the accompanying WHITE Consent Card and signing, dating and
returning it promptly in the enclosed postage-paid envelope.
IF THE STOCKHOLDER WHO HAS EXECUTED AND RETURNED THE CONSENT
CARD HAS FAILED TO CHECK A BOX MARKED "CONSENTS" OR "CONSENT WITHHELD"
FOR ANY OR ALL OF THE PROPOSALS, SUCH STOCKHOLDER WILL BE DEEMED TO
HAVE CONSENTED TO SUCH PROPOSAL OR PROPOSALS.
THE COMMITTEE RECOMMENDS THAT YOU CONSENT TO EACH OF THE
PROPOSALS. YOUR CONSENT IS IMPORTANT. PLEASE MARK, SIGN AND DATE THE
ENCLOSED WHITE CONSENT CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE PROMPTLY. FAILURE TO RETURN YOUR CONSENT WILL HAVE THE SAME
EFFECT AS VOTING AGAINST THE PROPOSALS.
If you have any questions about completing or signing the
Consent Card or require assistance, including assistance in assuring
that any of your shares held by brokers or other nominees are voted,
please call Morrow & Co., Inc., 909 Third Avenue, New York, New York
10022, (800) 634-4458.
If your shares are held in the name of a brokerage firm,
bank nominee or other institution, only it can execute a consent with
respect to your shares and only upon receipt of specific instructions
from you. Accordingly, you should contact the person responsible for
your account and give instructions for the WHITE Consent Card to be
signed representing your shares. The Committee urges you to confirm
in writing your instructions to the person responsible for your
account and provide a copy of those instructions to the Committee in
care of Morrow & Co., Inc.,
12
<PAGE>
<PAGE>
909 Third Avenue, New York, New York 10022, so that the Committee will
be aware of all instructions given and can attempt to ensure that such
instructions are followed.
Carefully review this Consent Solicitation Statement. YOUR
RESPONSE IS IMPORTANT. You are urged to support the Committee's
solicitation efforts by promptly completing, signing, dating and
mailing the enclosed WHITE consent card. The Committee strongly urges
you not to return any green revocation of consent cards. Please be
aware that if you sign a green card but do not check any of the boxes
thereon, you will be deemed to have revoked your consent to all of the
Committee's proposals with respect to any prior-dated WHITE Consent
Card.
BACKGROUND
Each of Messrs. Flannery, Stone and Washburn and Dr. Kaufman
has been a beneficial owner of Common Stock for at least four years,
although the number of shares beneficially owned by each has
fluctuated. Those members of the Committee invested in the Company
because, at the time of their respective investments, they saw
fundamental values which they expected would eventually be reflected
through increases in stock prices. As already noted, however, the
Committee members have lost confidence in the ability of the incumbent
Board to realize those values.
During 1992, when the Company was experiencing particularly
severe financial difficulties, the level of concern of Mr. Flannery
and Dr. Kaufman about their investments in the Company became acute.
On October 30, 1992, Mr. Flannery and Dr. Kaufman, together with
certain other stockholders of the Company, including Fraydan
Manocherian, filed a statement on Schedule 13D reporting, among other
things, that the persons signing that Schedule 13D (the "United
Partners Reporting Persons") had reached, on October 26, 1992, "an
understanding to act together under the name `United Partners' in
order to attempt to protect and enhance the value of their shares of
Common Stock," and had delivered a letter to the Company requesting
that there be added to the Company's Board of Directors two directors
from a list of five designees, who included Messrs. Flannery and Stone
and Dr. Kaufman. On April 2, 1993, an amendment to the Schedule 13D
was filed which stated that as a result of the Company's failure to
respond to the October 26, 1992 letter, the United Partners Reporting
Persons were reviewing the options available, including engaging in a
proxy contest. No agreement or understanding between Mr. Flannery or
Dr. Kaufman and the other United Partners Reporting Persons was
subsequently reached regarding a proxy contest or the pursuit of any
other option with regard to the Company. In February 1994, each of
Mr. Flannery and Dr. Kaufman formally notified Mr. Manocherian of
their withdrawal as participants in the Schedule 13D filing group and
the United Partners filed an amendment to the Schedule 13D reporting
that, as a consequence of Dr. Kaufman's withdrawal, the other
participants had ceased to be the beneficial owners of 5% or more of
the Common Stock.
In the weeks before the scheduled 1994 Annual Meeting of the
Company's stockholders, several developments affecting the Company
resulted in a decline in Common Stock prices, including a
restructuring by the Company of its outstanding debt and preferred
stock on terms which Mr. Flannery, Mr. Washburn and Dr. Kaufman
independently concluded were contrary to the
13
<PAGE>
<PAGE>
best interests of stockholders. At the Company's 1994 Annual Meeting
held on May 20, 1994, a representative of Messrs. Flannery and
Washburn and Dr. Kaufman nominated from the floor an alternative slate
of directors consisting of Messrs. Baker, Flannery and Washburn, Dr.
Kaufman and another individual who is not a member of the Committee or
a Committee Nominee, but was unsuccessful in seating any of those
nominees.
Events affecting the Company in early 1995, including the
prospective sale of a significant part of the Company's rights in the
Bob West natural gas field, led Dr. Kaufman and Mr. Flannery to
conclude that another effort to unseat the then-incumbent Board should
be attempted at the forthcoming 1995 Annual Meeting. During the week
before the scheduled date for the 1995 Annual Meeting, Mr. Flannery
succeeded in obtaining revocable proxies for the meeting from several
other stockholders.
At the Company's Annual Meeting held on May 4, 1995, a
representative of Mr. Flannery, Dr. Kaufman and the stockholders whose
proxies were held by Mr. Flannery nominated from the floor a dissident
slate of six directors which included Mr. Baker, Mr. Flannery, Dr.
Kaufman, and three other individuals who are not members of the
Committee or Committee Nominees. Following the closing of the polls,
the inspectors of election determined that they could not make a
report on the vote at that time because of the number of ballots and
proxies submitted by stockholders at the meeting. On May 15, 1995,
the inspectors of election delivered a report showing that all of the
Board-approved nominees had been elected and all of the dissident
nominees had been defeated.
As a result of what he perceived to be irregularities in the
process by which votes were taken, tallied, inspected and reported,
Mr. Flannery, through Whelan, the record holder of the shares of
Common Stock then beneficially owned by Mr. Flannery, formally
challenged the reported results of the election. On June 8, 1995, the
inspectors of election denied Whelan's challenges, and on June 9, 1995
issued a second report confirming the results of the first report.
That second report indicated that with respect to three directorships,
the average difference in votes between the three Board-approved
nominees receiving the fewest votes and the three alternative nominees
with the highest votes was 1,670,522 votes, or only 7.48% of the
22,303,905 shares present at the meeting, in person or by proxy. In
other words, a change in vote by holders of only 841,345 shares (or
3.7% of the shares present at the Annual Meeting) would have elected
three of the alternative nominees. In light of the advantages
typically enjoyed by incumbent management in annual elections of
directors and the fact that the dissident nominees were nominated from
the floor without a formal solicitation of proxies from stockholders
generally, the Committee believes those results are a strong
indication of the breadth and depth of opposition to the existing
Board.
On June 23, 1995, Whelan filed with the Court of Chancery of
the State of Delaware (New Castle County) an application for review of
the election of directors held at the Annual Meeting held in 1995, and
the Court eventually issued a ruling upholding the results of the
election as reported by the inspectors of election.
14
<PAGE>
<PAGE>
The activities of Mr. Flannery and Dr. Kaufman relating to
the 1995 Annual Meeting were conducted with the guidance of legal
counsel, and each believes that his activities were in compliance with
all applicable laws.
Following the decision of the Delaware Chancery Court
upholding the results of the 1995 election, Mr. Flannery and Dr.
Kaufman continued to believe strongly that the Company's management
was seriously deficient. As a result of his role at the Annual
Meetings held in 1994 and 1995, Mr. Flannery was periodically
contacted by dissatisfied stockholders voicing their complaints
against incumbent management and, in some cases, encouraging him to
take further steps to attempt to change the direction of the Company's
management; however, as a result of the time, effort and expense which
Mr. Flannery knew would be required in order to mount another effort
to challenge the Board, he was reluctant to do so. In August 1995,
however, the Texas Supreme Court rendered a decision in the litigation
between the Company and the Tennessee Gas Pipeline Company (which is
more fully described in the 1995 Company Proxy Statement) that Mr.
Flannery considered unfavorable to the Company. Furthermore, the
closing prices of the Common Stock on the NYSE had declined since the
election loss by the dissidents at the 1995 Annual Meeting, from $10-
7/8 per share of Common Stock on the day before the 1995 Annual
Meeting to $9.00 per share on December 22, 1995, the last trading day
before this consent solicitation became publicly known, and had
reached a low for the year of $7-3/8 on October 5, 1995. As the
result of these events, as well as the continued urging of other
stockholders, Mr. Flannery began in September 1995 to consider more
seriously various options for influencing or replacing the incumbent
Board. His deliberations included discussions with Messrs. Baker,
Stone and Washburn and Dr. Kaufman.
Those discussions were informal, general and exploratory,
and no agreement or understanding was reached until December 14, 1995,
at which time Messrs. Baker, Flannery, Stone and Washburn and Dr.
Kaufman orally agreed to form the Committee in order to pursue removal
and replacement of the Company's entire Board of Directors. In view
of the expense and intense effort associated with a consent
solicitation in opposition to incumbent management, each Committee
member's decision was made after lengthy deliberation and with
reluctance. In the final analysis, the Committee concluded that there
was no other choice. After discussions with Committee members, Mr.
Galloway and Mr. Thompson agreed to become Committee Nominees. In
certain pleadings filed by the Company in connection with the
litigation described below under the caption "CERTAIN LEGAL
PROCEEDINGS," the Company alleges "upon information and belief, [that]
the members of the [Committee] have had an understanding and an
agreement since 1994, and perhaps sooner, to attempt to effect a
change in the control of the [Board]."
On December 26, 1995, the Committee filed with the
Commission, within the period provided by law, a Statement on Schedule
13D disclosing formation of the Committee and its intention to
commence this consent solicitation.
Over the past several months, each of Mr. Baker and Mr.
Flannery has at various times discussed with Ardsley Advisory Partners
("Ardsley"), the Company's largest stockholder, the possibility that
Ardsley might sell options to purchase some of the shares of Common
Stock held by Ardsley. On November 16, 1995, Whelan purchased from
Ardsley options to acquire up to 400,000
15
<PAGE>
<PAGE>
of the shares of Common Stock held by Ardsley. As part of the oral
agreement reached on December 14, 1995, Whelan sold to each of Messrs.
Baker and Stone corresponding options written by Whelan to acquire
100,000 of the shares of Common Stock covered by the options written
by Ardsley. In certain pleadings filed by the Company in connection
with the litigation described below under the caption "CERTAIN LEGAL
PROCEEDINGS," the Company alleges that "the terms of these
extraordinary option grants leave no doubt as to their true purpose --
to provide financial assistance to the Whelan Group in order to help
defray the anticipated costs of a consent solicitation to unseat the
incumbent Board. Thus, for a purchase price of $.09 per share (or
$36,000 in the aggregate), Ardsley purported to grant Whelan options
to purchase for $8.25 per share (or $.625 lower than the closing
market price on January 5, 1996) up to 400,000 shares (enough to push
the Whelan Group's holdings over the 5% threshold for Schedule 13D
filing purposes), which if exercised today would yield in excess of
$250,000 in profits. The options are only exercisable, however, until
May 16, 1996 (shortly after the anticipated date of the 1996 Annual
Meeting). The options are intended to provide plaintiffs with the
best of both worlds: in the event the Whelan Group is unsuccessful in
its consent solicitation, it will be able to use the profits realized
upon the exercise and the subsequent sale of shares to defray the
costs of their unsuccessful solicitation. However, if the consent
solicitation succeeds, the Whelan Group has stated that it intends to
seek reimbursement for such expenses directly from the Company
(without stockholder approval unless mandated by law), in which case
there will be no need to exercise the Ardsley options to defray
plaintiffs' costs. Any profits realized upon exercise and sale in
such case would present a windfall to Whelan. In light of Ardsley's
enthusiastic financial and other support of the Whelan Group's
efforts, as well as the extraordinary terms of the option grant to
Whelan, it is obvious that an arrangement or understanding beyond the
mere grant of the options themselves exists between Ardsley and the
other members of the Whelan Group, and that Ardsley's role extends far
beyond the normal role played by a passive institutional investor."
By letter dated February 7, 1996, Mr. Flannery, as a record
holder of shares of Common Stock, requested that the Company provide a
list of stockholders to enable the Committee to undertake this Consent
Solicitation and for other valid purposes.
CERTAIN LEGAL PROCEEDINGS
On December 26, 1995, the Committee commenced a lawsuit in
the United States District Court for the Western District of Texas,
San Antonio Division, against the Company and its Chief Executive,
Bruce A. Smith (collectively, "Defendants"). The action seeks, among
other relief, a judgment (i) declaring that the Company's "poison
pill" plan does not apply to the efforts of the Committee to solicit
consents from other stockholders of the Company; (ii) declaring that
the Company's By-Laws permit removal of directors through stockholder
action by written consent; (iii) enjoining the Company from delaying
or otherwise unlawfully interfering with the efforts of the Committee
to solicit consents from other stockholders; and (iv) declaring that
the actions and disclosures of the Committee with regard to their
effort to solicit consents are and have been in compliance with the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
16
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<PAGE>
On January 8, 1996, defendants filed their Answer and
Counterclaim to the Committee's Complaint. Defendants' counterclaim
alleges, inter alia, that the Committee's Schedule 13D, filed on
----------
December 26, 1995, violated Section 13(d) of the Exchange Act by (i)
not including Ardsley as part of the 13D group and not including in
the 13D group certain of the wives and children of the Shareholders
Committee who held shares of Tesoro directly or in trust, (ii) not
filing a Schedule 13D earlier disclosing that a 13d group had already
been formed purportedly in 1994 and (iii) making purported false and
misleading statements in preliminary consent materials filed with the
SEC. Defendants' counterclaim also alleges that the preliminary
consent materials filed with the SEC on December 26, 1995 by the
Committee contained purported false and misleading statements in
violation of Section 14(a) of the Exchange Act. On that same day,
Defendants filed a motion seeking a temporary restraining order and
preliminary injunction and then sought and obtained an ex parte
temporary restraining order enjoining the Committee from (i)
soliciting or attempting to solicit written consents of the Company's
stockholders, (ii) filing or disseminating to stockholders or the
public any Schedule 13D or 14A Statements regarding the Company and
(iii) taking any temporary further steps in furtherance of their
consent solicitation effort.
Defendants based their application for an ex parte temporary
restraining order and for a preliminary injunction upon their
allegations (1) that the draft Consent Solicitation Statement, which
had not been disseminated to the Company's stockholders, was in
violation of Section 14(a) of the Exchange Act in that it contained
various false and misleading statements and omissions that would
likely result in "confusion" and misunderstanding on the part of the
Company's stockholders and (2) that the proposed solicitation was a
"midnight raid" which could force the removal of the Company's present
Board of Directors without any opportunity to either rebut the
disclosures in the Consent Statement or seek relief from the Courts.
A number of the Company's specific allegations are discussed in detail
in this Consent Solicitation Statement.
On January 16, 1996, the Committee moved to dissolve the ex
parte temporary restraining order because, inter alia, it was in
----------
violation of Rule 65 of the Federal Rules of Civil Procedure, was
unprecedented in scope and was contrary to the purposes of the
Williams Act. On the next day, January 17, 1996, the Court denied the
Committee's motion to dissolve the ex parte temporary restraining
order.
On January 19, 1996, Defendants moved for an order extending
the temporary restraining order, which order was granted on that same
day. On January 24, 1996, the Court scheduled a hearing on
Defendants' preliminary injunction motion for January 31, 1996. On
January 31, 1996, a hearing was held on Defendants' preliminary
injunction motion. On February 1, 1996, the Court signed an order
which was entered on February 2, 1996, and which vacated the temporary
restraining order and denied Defendants' motion for preliminary
injunction.
ADDITIONAL INFORMATION
The Company's principal executive offices are at 8700 Tesoro
Drive, San Antonio, Texas 78217, and its telephone number at that
address is (210) 828-8484.
17
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<PAGE>
Certain information regarding ownership of voting securities
of the Company by certain members of the Company's management and
principal stockholders other than the Committee is contained in
Appendix III attached to this Consent Solicitation Statement.
The information concerning the Company contained in this
Consent Solicitation Statement has been taken from or based upon
publicly available reports, proxy statements and other documents on
file with the Commission and other public sources. Such reports,
proxy statements and other documents on file with the Commission may
be inspected without charge at public reference facilities maintained
by the Commission office at 450 Fifth Street, N.W., Washington, D.C.
20549, and also should be available for inspection at the regional
offices of the Commission located in 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300,
New York, New York 10048. Copies may be obtained from the Commission
on payment of the Commission's prescribed rates through the
Commission's Public Reference Section by writing to its principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
material should also be available for inspection at the New York Stock
Exchange Inc., 20 Broad Street, New York, New York 10005. Although
the Committee does not have any knowledge that would indicate that any
statement contained herein based upon such reports, proxy statements
and other documents is untrue, the Committee does not take any
responsibility for the accuracy or completeness of the information
contained in such reports, proxy statements and other documents, or
for any failure by the Company or any of its subsidiaries to disclose
events that may affect the significance or accuracy of any such
information.
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THE
ENCLOSED WHITE CONSENT CARD PROMPTLY IN THE POSTAGE-PAID ENVELOPE
PROVIDED.
Dated: ____________, 1996
THE STOCKHOLDERS' COMMITTEE FOR NEW
MANAGEMENT OF TESORO PETROLEUM
CORPORATION
18
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<PAGE>
APPENDIX I
This Appendix I sets forth certain information regarding
each Committee member and each Committee Nominee.
A. The following table sets forth with respect to each
such person such person's (i) name and business address, (ii) present
principal occupation or employment and the name, principal business
and address of any corporation or other organization in which such
employment is carried on.
PRINCIPAL OCCUPATION
NAME AND BUSINESS ADDRESS OR EMPLOYMENT
------------------------- -------------------
Kevin S. Flannery President and director of
P.O. Box 1970 Whelan Management Corp., which
8 Holley Street is engaged in investment
Lakeville, CT 06039 advisory services, and of
Whelan Securities Inc., which
is engaged in broker-dealer
services
George F. Baker Partner of Baker Nye, L.P.
767 Fifth Avenue, Suite 2800 which is engaged in money
New York, NY 10153 management and investment
advisory services
Gale L. Galloway Independent oil and gas
400 West 15th Street, Suite 808 operator
Austin, TX 78701
Alan J. Kaufman, M.D. Neurosurgeon
5500 Hohman Avenue, Suite 210
Hammond, IN 46320
James H. Stone Chairman of the Board of Stone
909 Poydras Street, Suite 2650 Energy Corporation, engaged in
New Orleans, LA 70112 oil and gas production
Robert S. Washburn Private investor
455 Santa Rita Avenue
Palo Alto, CA 94301
Douglas B. Thompson Chairman of Digicon, Inc.,
3701 Kirby Drive which is engaged in worldwide
Houston, TX 77098 geophysical services
I-1
<PAGE>
<PAGE>
B. The following table and the notes thereto set forth the
aggregate number of shares of Common Stock beneficially owned,
directly or indirectly, as of the date of this Consent Solicitation
Statement by each of the Committee's members and their respective
"associates," individually and as a group. As of such date, neither
Mr. Galloway nor Mr. Thompson beneficially owned any shares of Common
Stock. Unless otherwise indicated, each person has sole voting and
investment power with respect to the shares of Common Stock listed.
<TABLE>
<CAPTION>
Percentage of
Issued and
Shares of Outstanding
Name Common Stock (1) Common Stock (1)
---- ---------------- ----------------
<S> <C> <C>
Kevin S. Flannery 361,772(2) 1.5%
George F. Baker 110,000(3) 0.4%
Alan Kaufman 612,000(4) 2.5%
James H. Stone 146,000(5) 0.6%
Robert S. Washburn 233,336(6) 0.9%
------- ---
All Committee Nominees as a Group 868,000(1,3-5) 3.5%
All Committee Members as a Group 1,463,008(1-6) 6.0%
<FN>
(1) For purposes of this table, the number of shares which a person
or group of persons is deemed to "beneficially own" includes any
shares that such person has the right to acquire within 60 days.
For purposes of computing the percentage of outstanding shares
held by each person or group of persons named above on a given
date, any security that such person or persons has the right to
acquire within 60 days is deemed to be outstanding, but is not
deemed to be outstanding for the purpose of computing the
percentage ownership of any other person. Such computations are
based on information concerning the number of shares of Common
Stock issued and outstanding as of October 31, 1995, as reported
by the Company in the 1995 Third Quarter 10-Q.
(2) The shares shown include (i)(A) 140,615 shares held by Whelan
Management, Inc. ("Whelan"), of which Mr. Flannery is the
principal executive officer and a 75% common stockholder and
(B) 200,000 shares which Whelan has the right to acquire through
the exercise of stock options which were exercisable on February
5, 1996, or within 60 days thereafter, (ii) 18,357 shares held by
the Sean Kenrick Flannery Trust of which Mr. Flannery is the
investment officer and (iii) 2,600 shares of Common Stock owned
by Mr. Flannery's wife. Mr. Flannery disclaims beneficial
ownership of the shares owned by his wife. The shares shown do
not include shares that Whelan Securities Inc., in the ordinary
course of its business as a broker-dealer, has purchased and sold
for the accounts of its customers as to which Mr. Flannery
disclaims beneficial ownership. Mr. Flannery has advised the
Committee that all such customer accounts are non-discretionary
and that neither Whelan nor Whelan Securities Inc. has any
control over buying, selling or voting shares of Common Stock in
such
I-2
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<PAGE>
accounts. As a result, Whelan Securities Inc. or its clearing
agent may be the record owner of certain of such shares of Common
Stock over which it does not exercise beneficial ownership.
(3) The shares shown include 100,000 shares which Mr. Baker has the
right to acquire through the exercise of stock options which were
exercisable on February 5, 1996, or within 60 days thereafter.
(4) The shares shown include (i) 581,500 shares owned by Dr. Kaufman
either directly or through an individual retirement account,
(ii) 20,000 shares held by the Kaufman Children's Trust of which
Dr. Kaufman is the sole trustee and (iii) 10,500 shares owned by
Dr. Kaufman's wife. Dr. Kaufman disclaims beneficial ownership
of the shares in the Kaufman Children's Trust and the shares
owned by his wife.
(5) The shares shown include 100,000 shares which Mr. Stone has the
right to acquire through the exercise of stock options which were
exercisable on February 5, 1996, or within 60 days thereafter.
(6) The shares shown include 39,545 shares held by the Robert S. and
Suzanne P. Washburn Revocable Trust of which Mr. Washburn is a
co-trustee and 193,791 shares held by the Robert S. Washburn
Money Purchase Pension and Profit Sharing Keogh Plan Trust of
which Mr. Washburn is the sole trustee. Mr. Washburn exercises
shared voting and investment power with respect to the Common
Stock held by the Robert S. and Suzanne P. Washburn Revocable
Trust.
</TABLE>
C. Except as otherwise described herein, no member of the
Committee, Committee Nominee or "associate" of any of the foregoing
owns securities of the Company of record but not beneficially.
D. The following table sets forth shares of Common Stock,
Preferred Stock and Exchange Notes of the Company purchased or sold
within the past two years by each of the members of the Committee, the
Committee Nominees, or Whelan, the Sean Kenrick Flannery Trust
referred to in note (2) to the table under paragraph B above or either
of the two trusts of which Mr. Washburn is a trustee referred to in
note (6) to the table under paragraph B above, the dates on which they
were purchased or sold and the amount purchased or sold on each such
date. In the tables below, the term "Preferred Stock" shall mean the
Company's $2.16 Cumulative Convertible Preferred Stock which is no
longer outstanding, and "Exchange Notes" shall mean the Company's 13%
Exchange Notes due December 1, 2000. Transaction dates listed are
trade dates except for those marked with a "+" which denote settlement
dates. The tables do not reflect the purchase, on November 16, 1995,
by Whelan from Ardsley of options to acquire up to 400,000 of the
shares of Common Stock held by Ardsley or the sale, on December 22,
1995, by Whelan to each of Mr. Baker and Mr. Stone of corresponding
options written by Whelan to acquire 100,000 of the shares of Common
Stock covered by the options written by Ardsley. See "BACKGROUND" in
the Consent Solicitation Statement to which this Appendix is attached.
I-3
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
KEVIN S. FLANNERY
Number of Number of Principal
Purchase, Sale Shares of Shares of amount of
Date or Exchange Common Stock Preferred Stock Exchange Notes
---- ------------- ------------ --------------- --------------
<S> <C> <C> <C> <C>
02/11/94 EXCHANGE 4,900* 1,000*
02/11/94 EXCHANGE 24,500* 5,000*
02/11/94 EXCHANGE 42,630* 8,700*
02/08/94 SALE 500
02/08/94 SALE 1,500
02/09/94 PURCHASE 500
02/09/94 PURCHASE 1,500
02/16/94 SALE 10,000
02/25/94 EXCHANGE 9,800* 2,000*
03/16/94 SALE 10,000
08/30/94 DISTRIBUTION 215
08/30/94 DISTRIBUTION 375
08/30/94 DISTRIBUTION 44
09/07/94 PURCHASE 10,000
05/01/95 SALE 10,000
08/29/95 SALE 7,644
09/05/95 SALE 14,515
I-4
<PAGE>
<PAGE>
<CAPTION>
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
10/06/95 SALE 25,000
10/09/95 SALE 10,000
10/11/95 SALE 8,000
12/28/95 PURCHASE 100
<FN>
* Exchange of number of shares of Preferred Stock indicated for the number of shares of Common Stock
indicated.
</TABLE>
<TABLE>
<CAPTION>
WHELAN
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
02/07/94 SALE 2,500
02/07/94 SALE 3,000
02/07/94 PURCHASE 20,000
02/09/94 PURCHASE 10,000
02/09/94 PURCHASE 3,000
02/09/94 SALE 10,000
02/11/94 EXCHANGE 195,510* 39,900*
02/25/94 PURCHASE 600
03/16/94 SALE 50
03/16/94 SALE 38,000
I-5
<PAGE>
<PAGE>
<CAPTION>
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
03/17/94 SALE 6,700
03/24/94 PURCHASE 2,000
03/29/94 PURCHASE 8,000
03/30/94 PURCHASE 10,000
03/30/94 PURCHASE 20,000
04/11/94 PURCHASE 9,000
04/12/94 PURCHASE 7,500
04/13/94 PURCHASE 1,200
04/20/94 PURCHASE 2,900
04/21/94 PURCHASE 10,000
04/28/94 PURCHASE 10,000
05/31/94 PURCHASE 20,000
06/21/94 PURCHASE 2,500
08/05/94 SALE 1,500
08/05/94 SALE 5,000
08/05/94 SALE 8,500
08/30/94 DISTRIBUTION 1,178
09/07/94 PURCHASE 135,000
09/22/94 SALE 50,000
09/28/94 SALE 50,000
11/08/94 SALE 10,000
11/08/94 SALE 25,000
11/10/94 SALE 6,118
11/23/94 PURCHASE 1,500
11/30/94 SALE 3,500
12/15/94 SALE 10,000
I-6
<PAGE>
<PAGE>
<CAPTION>
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
03/22/95 SALE 13,000
05/02/95 SALE 10,000
05/15/95 SALE 10,000
06/30/95 SALE 1,800
07/28/95 SALE 2,500
09/01/95 SALE 10,000
09/05/95 SALE 2,985
09/06/95 SALE 10,000
09/07/95 SALE 10,000
09/08/95 SALE 5,000
09/12/95 SALE 10,000
09/14/95 SALE 10,000
10/04/95 SALE 7,500
10/06/95 PURCHASE 20,000
10/06/95 PURCHASE 26,000
10/09/95 PURCHASE 15,000
10/10/95 PURCHASE 3,500
10/11/95 PURCHASE 7,500
10/11/95 PURCHASE 8,000
10/13/95 SALE 3,000
10/13/95 SALE 7,000
10/20/95 SALE 8,000
10/20/95 SALE 42,000
10/24/95 PURCHASE 900
I-7
<PAGE>
<PAGE>
<CAPTION>
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
10/24/95 PURCHASE 2,000
10/25/95 PURCHASE 45,000
11/10/95 PURCHASE 500
11/17/95 PURCHASE 12,000(1)
11/28/95 PURCHASE 1,000
12/04/95 SALE 7,500
12/05/95 SALE 10,500
12/06/95 SALE 13,000
12/14/95 SALE 10,000
01/24/96 PURCHASE 4,000
01/24/96 SALE 4,000
<FN>
(1) Through the exercise of expiring options.
* Exchange of number of shares of Preferred Stock indicated for the number of shares of Common Stock
indicated.
</TABLE>
In addition to the foregoing transactions by Whelan, the
following table sets forth transactions effected by Whelan in call
option contracts covering shares of Common Stock during the past two
years. All such transactions were effected on a national securities
or option exchange through a broker and reflect the trade date of each
such transaction. Each call option contract represents the right to
buy 100 shares of Common Stock at a price and until the date specified
in the option contract.
<TABLE>
<CAPTION>
Type of Number of Price per Option
Transaction Date Call Options Contract
----------- ---- ------------ -------------------
<S> <C> <C> <C>
Purchase 06/21/94 100 $187.50
Purchase 06/23/94 100 $237.50
Purchase 08/05/94 100 $125.00
Purchase 01/25/95 25 $37.25
Purchase 01/25/95 100 $31.25
Purchase 01/30/95 200 $31.50
Purchase 02/09/95 150 $87.50
Sale 02/09/95 150 $12.50
Sale 05/15/95 50 $50.00
Sale 05/15/95 100 $181.25
Purchase 05/16/95 90 $104.17
Sale 06/15/95 90 $81.25
Purchase 06/15/95 90 $118.75
Purchase 07/13/95 100 $25.00
Purchase 10/13/95 54 $87.50
Purchase 10/16/95 46 $87.50
Sale 10/18/95 50 $125.00
Sale 10/20/95 50 $106.25
Purchase 10/24/95 120 $112.50
</TABLE>
I-8<PAGE>
<PAGE>
In addition to the foregoing transactions by Whelan, on
November 16, 1995 Whelan purchased, in a private transaction, options
exercisable for 400,000 shares of Common Stock having an exercise
price of $8.25 per share. The total purchase price for these options
was $36,000. On December 14, 1995, Whelan sold, in a private
transaction, a portion of the foregoing options exercisable for
200,000 of Common Stock; options exercisable for 100,000 shares of
Common Stock were sold to George F. Baker for $9,000 and options
exercisable for 100,000 shares of Common Stock were sold to James H.
Stone for $9,000.
<TABLE>
<CAPTION>
SEAN KENRICK FLANNERY TRUST
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
02/11/94 EXCHANGE 8,330* 1,700*
02/11/94 EXCHANGE 3,920* 800*
08/30/94 DISTRIBUTION 73
08/30/94 DISTRIBUTION 34
09/07/94 PURCHASE 60,000
11/23/94 PURCHASE 4,000
11/23/94 SALE 5,000
11/23/94 SALE 30,000
01/31/95 PURCHASE 1,500
04/24/95 SALE 18,000
04/26/95 SALE 2,000
04/27/95 SALE 5,000
06/26/95 PURCHASE 4,000
10/06/95 SALE 1,000
10/10/95 SALE 3,500
11/09/95 PURCHASE 500
11/10/95 PURCHASE 500
01/19/96 PURCHASE 4,000 (1)
01/19/96 SALE 4,000
<FN>
(1) Through the exercise of expiring options.
* Exchange of number of shares of Preferred Stock indicated for the number of shares of Common Stock
indicated.
</TABLE>
I-9
<PAGE>
<PAGE>
In addition to the foregoing transactions by the Sean
Kenrick Flannery Trust, the following table sets forth transactions
effected by such Trust in call option contracts covering shares of the
Common Stock during the past two years. All such transactions were
effected on a national securities or option exchange through a broker
and reflect the trade date of each such transaction. Each call option
contract represents the right to buy 100 shares of Common Stock at a
price and until the date specified in the option contract, and the
exercise price of each such option was $7.50 per share. Price per
Option Contract excludes brokerage commissions.
<TABLE>
<CAPTION>
Type of Number of Price per Option
Transaction Date Call Options Contract
----------- ---- ------------ -------------------
<S> <C> <C> <C>
Purchase 01/26/95 100 $87.50
Sale 05/15/95 50 $181.25
Sale 05/15/95 50 $50.00
Purchase 07/13/95 100 $25.00
Purchase 10/24/95 80 $112.50
Sale 11/17/95 80 $50.00
Purchase 11/17/95 80 $100.00
Sale 12/14/95 80 $81.25
Purchase 12/14/95 80 $118.25
Sale 01/19/96 40 $93.75
</TABLE>
<TABLE>
<CAPTION>
GEORGE BAKER
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
05/10/94 PURCHASE 1,000
02/24/95 PURCHASE 9,000
</TABLE>
<TABLE>
<CAPTION>
CAMBRIDGE CAPITAL FUND
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
8/14/95 PURCHASE 33,000
08/15/95 PURCHASE 176,000
08/15/95 PURCHASE 40,400
08/15/95 PURCHASE 45,000
08/15/95 PURCHASE 500
08/16/95 PURCHASE 11,200
08/17/95 PURCHASE 28,300
08/17/95 PURCHASE 3,000
08/18/95 PURCHASE 1,000
I-10<PAGE>
<PAGE>
<CAPTION>
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
08/23/95 PURCHASE 11,000
09/06/95 SALE 33,000
09/06/95 SALE 176,000
09/07/95 SALE 40,400
09/14/95 SALE 45,000
09/25/95 SALE 500
09/25/95 SALE 11,200
09/25/95 SALE 28,300
09/26/95 SALE 3,000
09/26/95 SALE 1,000
09/26/95 SALE 11,000
</TABLE>
I-11
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
ALAN KAUFMAN, M.D.
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
02/01/94+ SALE 500
02/02/94+ SALE 10,000
02/03/94+ SALE 10,000
02/09/94+ SALE 5,000
02/09/94+ SALE 27,500
02/09/94+ SALE 1,000
02/09/94+ SALE 1,000
02/09/94+ SALE 3,000
02/09/94+ SALE 4,000
02/09/94 SALE 70,000
02/15/94 SALE 10,000
03/30/94 PURCHASE 6,200
04/07/94 PURCHASE 3,000
04/18/94 PURCHASE 4,200
04/19/94 PURCHASE 5,000
04/19/94+ PURCHASE 5,000
04/20/94 PURCHASE 5,000
04/20/94+ PURCHASE 5,000
04/21/94 PURCHASE 20,000
04/21/94+ PURCHASE 11,000
04/28/94 SALE 10,000
05/03/94+ PURCHASE 5,000
05/09/94 PURCHASE 11,000
05/09/94 PURCHASE 3,000
05/09/94 PURCHASE 2,000
05/09/94+ PURCHASE 2,000
05/09/94+ PURCHASE 3,000
06/16/94 PURCHASE 5,000
06/16/94+ PURCHASE 5,000
06/21/94 PURCHASE 5,000
I-12
<PAGE>
<PAGE>
<CAPTION>
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
06/22/94 PURCHASE 15,000
06/22/94 PURCHASE 3,000
06/22/94 SALE 5,000
06/22/94+ PURCHASE 10,000
06/22/94+ PURCHASE 5,000
06/23/94+ SALE 10,000
06/24/94 SALE 3,000
07/12/94+ SALE 5,000
07/13/94+ SALE 10,000
07/14/94 SALE 10,000
08/12/94 SALE 10,000
08/26/94+ PURCHASE 2,500
08/29/94+ SALE 5,000
08/29/94+ SALE 5,000
08/31/94 SALE 5,000
09/01/94 SALE 2,000
09/01/94+ SALE 1,000
09/02/94 SALE 3,000
09/06/94+ SALE 4,830
11/18/94 PURCHASE 5,000
12/03/94 PURCHASE 2,800
12/10/94 PURCHASE 3,500
01/23/95 PURCHASE 5,000
01/25/95 PURCHASE 3,000
01/25/95 PURCHASE 5,000
02/01/95 PURCHASE 10,000
02/03/95 PURCHASE 3,000
02/13/95 PURCHASE 2,000
02/17/95 PURCHASE 5,900
02/21/95 PURCHASE 1,100
02/22/95 PURCHASE 12,000
02/24/95+ PURCHASE 2,500
I-13
<PAGE>
<PAGE>
<CAPTION>
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
04/07/95 PURCHASE 10,000
04/26/95 PURCHASE 800
05/03/95 SALE 10,000
05/10/95+ SALE 10,000
05/12/95 SALE 5,000
05/15/95 TRANSFER 15,000
05/15/95 SALE 10,000
05/16/95 PURCHASE 5,000
05/17/95 PURCHASE 5,000
05/17/95 PURCHASE 11,700
05/19/95 PURCHASE 3,000
05/19/95 PURCHASE 3,000
05/19/95 PURCHASE 14,000
05/19/95 PURCHASE 5,000
05/19/95 SALE 4,700
05/23/95 SALE 5,000
05/23/95 SALE 3,000
05/23/95 SALE 2,000
05/24/95 PURCHASE 10,000
05/25/95 PURCHASE 3,200
05/26/95 PURCHASE 10,000
05/31/95 SALE 20,000
06/02/95 PURCHASE 10,000
06/09/95 PURCHASE 10,000
06/09/95 SALE 5,000
06/09/95 SALE 5,000
06/12/95 PURCHASE 5,000
06/12/95 PURCHASE 5,000
06/13/95 PURCHASE 8,000
06/14/95 PURCHASE 5,000
06/15/95+ SALE 2,000
06/15/95 PURCHASE 5,000
I-14
<PAGE>
<PAGE>
<CAPTION>
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
06/16/95 SALE 1,000
06/16/95 SALE 10,000
06/19/95 SALE 5,000
06/23/95 PURCHASE 5,000
06/23/95 PURCHASE 2,000
06/23/95 PURCHASE 5,000
06/23/95 PURCHASE 10,000
06/29/95 PURCHASE 2,000
07/03/95+ PURCHASE 2,000
07/05/95+ PURCHASE 1,000
07/10/95 PURCHASE 6,000
07/10/95+ PURCHASE 1,000
07/18/95 PURCHASE 4,000
07/18/95+ PURCHASE 10,000
07/19/95+ PURCHASE 2,000
07/31/95 PURCHASE 1,400
08/01/95 PURCHASE 9,900
08/03/95 PURCHASE 10,000
08/15/95+ PURCHASE 4,000
09/20/95 PURCHASE 3,902
09/25/95+ PURCHASE 5,000
09/27/95+ PURCHASE 5,000
10/03/95+ PURCHASE 3,000
10/06/95+ PURCHASE 8,000
10/10/95+ PURCHASE 7,000
10/10/95+ PURCHASE 12,500
10/11/95+ PURCHASE 10,000
10/12/95+ PURCHASE 7,500
10/16/95+ PURCHASE 20,000
10/16/95+ PURCHASE 10,000
10/20/95 SALE 5,000
10/20/95 SALE 12,500
I-15
<PAGE>
<PAGE>
<CAPTION>
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
10/23/95+ SALE 20,000
10/31/95 PURCHASE 2,000
11/01/95+ PURCHASE 5,000
11/01/95+ PURCHASE 3,000
11/06/95+ PURCHASE 2,700
11/15/95+ PURCHASE 5,000
11/16/95 PURCHASE 4,500
12/04/95+ PURCHASE 2,000
12/06/95 PURCHASE 5,000
</TABLE>
<TABLE>
<CAPTION>
ROBERT S. WASHBURN (REVOCABLE TRUST ACCOUNT)
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
02/09/94 PURCHASE 17,000
02/10/94 PURCHASE 6,400
02/11/94 PURCHASE 5,000
02/11/94 PURCHASE 5,000
02/11/94 PURCHASE 3,000
02/11/94 EXCHANGE 39,200* 8,000*
02/14/94 PURCHASE 1,000
02/25/94 PURCHASE 9,700
03/29/94 PURCHASE 5,000
03/30/94 PURCHASE 4,400
08/16/94 DISTRIBUTION 3,045
07/10/95 SALE 9,000
07/14/95 SALE 4,900
07/17/95 SALE 10,000
07/17/95 SALE 1,000
07/17/95 SALE 6,000
07/18/95 SALE 10,000
08/07/95 SALE 9,700
08/07/95 SALE 4,400
08/07/95 SALE 1,500
<FN>
* Exchange of number of shares of Preferred Stock indicated for the number of shares of Common Stock
indicated.
</TABLE>
I-16<PAGE>
<PAGE>
In addition to the foregoing transactions by the Robert
Washburn Revocable Trust, the following table sets forth transactions
effected by the Robert Washburn Revocable Trust in call option
contracts covering shares of Common Stock during the past two years.
All such transactions were effected on a national securities or option
exchange through a broker and reflect the settlement date of each such
transaction. Each call option contract represents the right to buy
100 shares of Common Stock at a price and until the date specified in
the option contract.
<TABLE>
<CAPTION>
Type of Number of Price per Option
Transaction Date Call Options Contract
----------- ---- ------------ -------------------
<S> <C> <C> <C>
Purchase 06/03/94 180 $100.00
Purchase 08/08/94 50 $112.50
Sale 09/09/94 520 $ 25.00
Purchase 12/27/94 10 $ 50.00
Purchase 01/31/94 200 $ 35.62
Sale 02/14/95 260 $ 6.25
</TABLE>
<TABLE>
<CAPTION>
ROBERT S. WASHBURN (PROFIT SHARING PLAN ACCOUNT)
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
02/11/94 EXCHANGE 129,850* 26,500*
02/22/94 PURCHASE 20,000
03/29/94 PURCHASE 6,000
03/30/94 PURCHASE 21,500
03/30/94 PURCHASE 5,000
08/07/95 SALE 15,700
08/08/95 SALE 500
08/16/94 DISTRIBUTION 1,141
10/05/95 PURCHASE 10,000
10/06/95 PURCHASE 5,000
10/18/95 SALE 15,000
10/27/95 SALE 4,000
12/04/95 PURCHASE 3,100
12/07/95 PURCHASE 1,900
<FN>
* Exchange of number of shares of Preferred Stock indicated for the number of shares of Common Stock
indicated.
</TABLE>
I-17
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
STONE (1)
Purchase, Sale or Number of Shares of Number of Shares of Principal Amount of
Date Exchange Common Stock Preferred Stock Exchange Notes
---- ------------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
05/26/94 PURCHASE 5,000
05/27/94 PURCHASE 2,500
05/27/94 PURCHASE 2,500
05/31/94 PURCHASE 2,500
05/31/94 PURCHASE 2,500
06/21/94 PURCHASE 10,000
08/01/95 PURCHASE 5,000
10/05/95 PURCHASE 5,000
12/16/95 PURCHASE 11,000(1)
<FN>
(1) Through the exercise of expiring options.
</TABLE>
In addition to the foregoing transactions by Mr. Stone, the
following table sets forth transactions effected by call or put option
contracts covering shares of the Common Stock during the past two
years. All such transactions were effected on a national securities
or option exchange through a broker and reflect the trade date of each
such transaction. Each call or put option contract respectively
represents the right to buy or sell 100 shares of Common Stock at a
price and until the date specified in the option contract, and the
exercise price of each such option was $7.50 per share. Price per
Option Contract excludes brokerage commissions.
<TABLE>
<CAPTION>
Type of Number of Price per Option
Transaction Date Options Contract
----------- ---- --------- -------------------
<S> <C> <C> <C>
Sale 04/25/95 100 puts $87.50
Sale 07/31/95 100 puts $106.25
Sale 08/02/95 100 puts $156.25
Sale 09/21/95 300 puts $181.25
Purchase 09/21/95 300 puts $162.50
Purchase 12/01/95 100 call $127.50
Sale 01/18/96 100 call $97.50
</TABLE>
E. All of the shares described above in paragraph D were
purchased with personal funds, working capital or margin borrowings
extended by broker-dealers in the regular course of business. As of
January 26, 1996, Dr. Kaufman, Sean Flannery Trust and Whelan had
outstanding margin indebtedness with respect to securities of the
Company of $83,176.06, $127,157.57 and $714,774.88, respectively. As
of the date of this Consent Solicitation Statement, except as set
forth in the preceding sentence, none of the persons named in such
paragraph has any outstanding margin indebtedness with respect to any
securities of the Company.
I-18
<PAGE>
<PAGE>
F. No participant owns beneficially, directly or
indirectly, any securities of any parent or subsidiary of the Company.
G. Except as described in this Appendix or elsewhere in
the Consent Solicitation Statement,
(1) none of the members of the Committee or the Committee
Nominees is, or was within the past year, a party to any contract,
arrangement or understanding with any person with respect to any
securities of the registrant, including, but not limited to joint
ventures, loan or option arrangements, puts or calls, guarantees
against loss or guarantees of profit, division of losses or profits,
or the giving or withholding of proxies;
(2) none of the members of the Committee, the Committee
Nominees or any of their respective associates has had any
transaction, or series of similar transactions, since January 1, 1995,
or any currently proposed transaction, or series of similar
transactions, to which the Company or any of its subsidiaries was or
is to be a party, in which the amount involved exceeds $60,000 and in
which any such participant had, or will have, a direct or indirect
material interest;
(3) none of the members of the Committee, the Committee
Nominees or any of their respective associates has any arrangement or
understanding with any person (i) with respect to any future
employment by the Company or its affiliates; or (ii) with respect to
any future transactions to which the Company or any of its affiliates
will or may be a party;
(4) no person who is a party to an arrangement or
understanding pursuant to which a Committee Nominee is proposed to be
elected, has any substantial interest, direct or indirect, by security
holdings or otherwise, in any matter to be acted upon by the
stockholders of the Company;
(5) there are no material proceedings to which any
Committee Nominee or any associate of any such Committee Nominee, is a
party adverse to the Company or any of its subsidiaries or has a
material interest adverse to the Company or any of its subsidiaries;
and
(6) no Committee Nominee has been party to any of the
following events that occurred during the past five years and that are
material to an evaluation of the ability or integrity of any person
nominated to become a director of the Company:
(a) A petition under the Federal bankruptcy laws or any
state insolvency law was filed by or against, or a
receiver, fiscal agent or similar officer was appointed
by a court for the business or property of such person,
or any partnership in which he was a general partner at
or within two years before the time of such filing, or
any corporation or business association of which he was
an executive officer at or within two years before the
time of such filing;
I-19
<PAGE>
<PAGE>
(b) Such person was convicted in a criminal proceeding or
is a named subject of a pending criminal proceeding
(excluding traffic violations and other minor
offenses);
(c) Such person was the subject of any order, judgment, or
decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:
i) Acting as a futures commission merchant,
introducing broker, commodity trading advisor,
commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated
by the Commodity Futures Trading Commission, or an
associated person of any of the foregoing, or as
an investment advisor, underwriter, broker or
dealer in securities, or as an affiliated person,
director or employee of any investment company,
bank, savings and loan association or insurance
company, or engaging in or continuing any conduct
or practice in connection with such activity;
ii) Engaging in any type of business practice; or
iii) Engaging in any activity in connection with the
purchase or sale of any security or commodity or
in connection with any violation of Federal or
State securities laws or Federal commodities laws;
(d) Such person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or
vacated, of any Federal or State authority barring,
suspending or otherwise limiting for more than 60 days
the right of such person to engage in any activity
described in paragraph G.(6)(c)(i) of this Appendix, or
to be associated with persons engaged in any such
activity;
(e) Such person was found by a court of competent
jurisdiction in a civil action or by the Commission to
have violated any Federal or State securities law, and
the judgment in such civil action or finding by the
Commission has not been subsequently reversed,
suspended, or vacated; or
(f) Such person was found by a court of competent
jurisdiction in a civil action or by the Commodity
Futures Trading Commission to have violated any Federal
commodities law, and the judgment in such civil action
or finding by the Commodity Futures Trading Commission
has not been subsequently reversed, suspended or
vacated.
I-20
<PAGE>
<PAGE>
For purposes of the foregoing, the term "associate" has the
meaning set forth in Rule 14a-1 under the Exchange Act.
I-21
<PAGE>
<PAGE>
APPENDIX II
This Appendix sets forth the text, in relevant part, of the
By-Laws which are proposed by the Committee to be amended, as the
Company's public filings indicate such By-Laws were in effect on
November 14, 1995 and as they will appear after adoption of the
Committee's proposed By-Law Amendments. Language proposed to be
deleted is marked in brackets. Language proposed to be added is
underlined. The Committee is not aware of any amendments to the
By-Laws since November 14, 1995. To the extent any such By-Law
amendments have been adopted subsequently, such intervening amendments
shall be repealed by the adoption of the following amendments if
inconsistent therewith.
Section 2.1 Number, Election and Term of Office. The
number of directors which shall constitute the whole Board of
Directors shall be five, unless and until changed by resolution of the
------------------------------------------------------
Board of Directors [fixed from time to time by resolution of the Board
------------------
of Directors but shall not be less than three]. The directors shall
be elected at the annual meeting of stockholders, except as provided
in Section 2.2, and each director elected at an annual meeting of
stockholders, and directors elected or appointed in the interim to
fill vacancies and newly created directorships shall hold office until
the next annual meeting of stockholders and [or] until their
successors are duly elected and qualified or until their earlier
resignation or removal. A director need not be a stockholder.
Section 2.2 Vacancies and Additional Directorships. Any
---
vacancy or vacancies created by the death or resignation of a director
----------------------------------------------------------------------
may be filled only by the majority vote of the remaining directors,
-------------------------------------------------------------------
though less than a quorum, or by the sole remaining director. Any
------------------------------------------------------------------
vacancy or vacancies created by the removal of one or more directors
--------------------------------------------------------------------
may be filled only by action of the holders of shares representing a
--------------------------------------------------------------------
majority of the shares of Common Stock outstanding and entitled to
------------------------------------------------------------------
vote and such action may be taken at the same annual or special
---------------------------------------------------------------
meeting, or by means of the same written consent or consents, of
----------------------------------------------------------------
stockholders at or by which such director or directors were removed,
--------------------------------------------------------------------
or may be taken at a different meeting or by a separate written
---------------------------------------------------------------
consent or consents. Newly created directorships resulting from any
--------------------------------------------------------------------
increase in the authorized number of directors shall be filled only by
----------------------------------------------------------------------
a majority of the directors then in office, though less than a quorum,
----------------------------------------------------------------------
or by the sole remaining director, and such newly created
---------------------------------------------------------
directorships may not be filled by the stockholders unless otherwise
--------------------------------------------------------------------
required by law. [Unless otherwise provided in the Certificate of
---------------
Incorporation or these By-Laws: (1) vacancies and newly created
directorships resulting from any increase in the authorized number of
directors elected by all of the stockholders having the right to vote
as a single class may be filled by a majority of the directors then in
office, although less than a quorum; (2) whenever the holders of any
class or classes of stock or series thereof are entitled to elect one
or more directors by the Certificate of Incorporation, vacancies and
newly created directorships of such class or classes or series may be
filled by a majority of the directors elected by such class or classes
or series thereof then in office.]
<PAGE>
Section 2.7 Removal of Directors. At any annual meeting
---------------------
of stockholders, at any special meeting of the stockholders, duly
---------------
called for the purpose of removing a director or directors as provided
in these By-Laws, or by action of the stockholders by written consent
in accordance with the
II-1
<PAGE>
<PAGE>
laws of the State of Delaware and the Certificate of Incorporation,
------------------------------------------------
any director or directors may, by the affirmative vote or written
----------
consent, as the case may be, of the holders of shares representing a
----------------------------
majority of [the votes of all] the shares of Common Stock [stock]
------------
outstanding and entitled to vote [for the election of directors], be
removed from office, either for or without cause. Such vacancy
[shall] may only be filled by the stockholders [directors] as provided
--------
in Section 2.2.
II-2
<PAGE>
<PAGE>
APPENDIX III
PRINCIPAL STOCKHOLDERS OF THE COMPANY AND
STOCK HOLDINGS OF THE COMPANY'S MANAGEMENT
Schedule 14A adopted by the Commission under the Exchange
Act requires the Committee to disclose, to the extent known to the
Committee, certain information regarding ownership of voting
securities of the Company. The information set forth in this Appendix
is provided in response to that requirement. Except with respect to
information concerning the Committee and its members, all information
contained in the following tables (including the footnotes) has been
taken from or is based upon the Joint Proxy Statement/Prospectus of
Coastwide Energy Services, Inc. and Tesoro Petroleum Corporation,
dated January 20, 1996 (the "Coastwide Proxy Statement"), and other
information contained in other filings by the Company with the
Commission.
The following table shows the beneficial ownership of the
Company's Common Stock as reported to the Company as of December 31,
1995, including shares as to which a right to acquire ownership exists
(for example, through the exercise of stock options or stock awards)
within the meaning of Rule 13d-3(d)(1) under the Exchange Act for each
director of the Company, the Company's Chief Executive Officer, the
other four most highly compensated officers of the Company during 1994
and, as a group, such persons and other executive officers. Unless
otherwise indicated, each person or member of the group listed has
sole voting and investment power with respect to the shares of Common
Stock listed.
<TABLE>
<CAPTION>
Beneficial Ownership
Of Common Stock
On December 31, 1995(1)
-----------------------
Shares Percent of Class
------ ----------------
<S> <C> <C>
Robert J. Caverly . . . . . . 9,000(2) 0.036
Peter M. Detwiler . . . . . . 14,715(2) 0.059
Steven H. Grapstein . . . . . 1,528,900(2)(3) 6.168
Raymond K. Mason, Sr. . . . . 23,428(2) 0.095
John J. McKetta, Jr. . . . . 7,565(2) 0.031
Bruce A. Smith . . . . . . . 94,018(4) 0.378
Murray L. Weidenbaum . . . . 7,000(2) 0.028
Gaylon H. Simmons . . . . . . 128,540(5) 0.516
James C. Reed, Jr. . . . . . 30,980(6) 0.125
III-1
<PAGE>
<PAGE>
<CAPTION>
Beneficial Ownership
Of Common Stock
On December 31, 1995
--------------------
Shares Percent of Class
------ ----------------
<S> <C> <C>
William T. Van Kleef . . . . 22,645(7) 0.091
Thomas E. Reardon . . . . . 14,163(8) 0.057
All directors and executive
officers as a group (14
individuals) . . . . . . . . 1,934,196(9) 7.709
<FN>
_______________________
(1) The shares shown do not include 430,367 shares of the Company's
Common Stock beneficially owned by Michael D. Burke, who resigned
as a director on January 12, 1996.
(2) The shares shown for Mr. Caverly, Mr. Grapstein, Mr. Detwiler,
Mr. Mason, Dr. McKetta and Dr. Weidenbaum include 6,000 shares
each, which such directors had the right to acquire through the
exercise of stock options on December 31, 1995, or within 60 days
thereafter.
(3) The shares shown include 1,522,900 shares of the Company's Common
Stock owned by Oakville N.V., a Netherland Antilles corporation
("Oakville"). Mr. Grapstein is an officer of Oakville. As an
officer, Mr. Grapstein shares voting and investment power with
respect to such shares.
(4) The shares shown include 1,304 shares credited to Mr. Smith's
account under the Company's Thrift Plan and 80,866 shares which
Mr. Smith had the right to acquire through the exercise of stock
options on December 31, 1995, or within 60 days thereafter.
(5) The shares shown include 114,200 shares which Mr. Simmons had the
right to acquire through the exercise of stock options on
December 31, 1995, or within 60 days thereafter.
(6) The shares shown include 733 shares and 88 shares credited to Mr.
Reed's account under the Company's Thrift Plan and Employee Stock
Ownership Plan, respectively, and 23,200 shares which Mr. Reed
had the right to acquire through the exercise of stock options or
stock awards on December 31, 1995, or within 60 days thereafter.
(7) The shares shown include 728 shares credited to Mr. Van Kleef's
account under the Company's Thrift Plan and 14,660 shares of
which Mr. Van Kleef had the right to acquire through the exercise
of stock options or stock awards on December 31, 1995, or within
60 days thereafter.
(8) The shares shown include 88 shares credited to Mr. Reardon's
account under the Company's Employee Stock Ownership Plan and
12,741 shares which Mr. Reardon had the right to
III-2
<PAGE>
<PAGE>
acquire through the exercise of stock options on December 31,
1995 or within 60 days thereafter.
(9) The shares shown include 3,912 shares and 352 shares credited to
the accounts of executive officers and directors under the
Company's Thrift Plan and Employee Stock Ownership Plan,
respectively, and 311,384 shares which directors and executive
officers had the right to acquire through the exercise of stock
options or stock awards on December 31, 1995, or within 60 days
thereafter. The shares shown also include 3,000 shares acquired
in the name of an executive officer's mother with respect to
which such executive officer has voting and investment power.
</TABLE>
----------------------------------------------
The following table sets forth information as to each person
or group, other than members of the Committee and the Committee
Nominees, who, according to the Coastwide Proxy Statement,
beneficially owned more than five percent of the outstanding shares of
Common Stock of the Company as of December 31, 1995. For information
concerning ownership of Common Stock by members of the Committee and
the Committee Nominees, see Appendix I attached to this Consent
Solicitation Statement.
III-3
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
--------------------
Percent
of
Name and Address Number of Class
Title of Class of Beneficial Owner Shares (1)
----------------- ------------------- ------ -------
<S> <C> <C> <C>
Common Stock . . . . . . . . . Ardsley Advisory Partners (2) 2,560,000 10.421
646 Steamboat Road
Greenwich, CT 06838
Common Stock . . . . . . . . . Oakville N.V. (3) 1,522,900 6.146
c/o Kuo Investment Company
33rd Floor
767 Third Avenue
New York, NY 10017
<FN>
__________________
(1) Percentages are based on the number of outstanding shares of
Common Stock as of the date of the 1995 Third Quarter 10-Q.
(2) According to Amendment No. 1 to Schedule 13G filed with the
Commission on February 13, 1996, Ardsley beneficially owned
2,560,000 shares of Common Stock and is a general partnership
organized under the laws of the State of Connecticut and an
investment adviser registered under Section 203 of the Investment
Advisers Act of 1940, as amended (the "Act"). In its Schedule
13G, Ardsley claims that, with respect to the shares of the
Company's Common Stock held by Ardsley, it acts as investment
advisor for the discretionary accounts of certain clients,
including (i) investment partnerships for which Ardsley serves as
the management company and (ii) a general partnership comprised
of the same partners as Ardsley serves as general partner. By
reason of the provisions of Rule 13d-3 under the Exchange Act,
Ardsley is deemed to own beneficially the shares owned by the
managed accounts. Each client for whose account Ardsley had
purchased the Company's Common Stock has the right to receive or
the power to direct the receipt of dividends from, or the
proceeds from the sale of, such shares purchased for his account.
No such client has any of the foregoing rights with respect to
more than 5 percent of the Company's Common Stock. According to
its Schedule 13G, Ardsley states that there is no agreement or
understanding among such persons to act together for the purpose
of acquiring, holding, voting or disposing of any such
securities. Philip J. Hempleman, a managing partner of Ardsley,
is a citizen of the United States. By virtue of Mr. Hempleman's
position as managing partner of Ardsley, he may be deemed to have
the shared power to vote, or direct the voting of, and the shared
power to dispose, or direct the disposition of, shares of the
Company's Common Stock held by the discretionary accounts managed
by Ardsley, and therefore, Mr. Hempleman may be deemed to be
beneficial owner of such shares.
(3) According to Schedule 13Ds on file with the Commission, Oakville
is a wholly owned subsidiary of Kuo Investment Limited, a Cayman
Islands corporation ("Kuo"). According to
III-4
<PAGE>
<PAGE>
information provided to the Company by Oakville, the following
persons are Oakville's directors and executive officers: (a)
Peter Yun Siak Fu, President and Director of Oakville; Director
and officer of Kuo; (b) Peter Chong Cheng Fu, Director and
Secretary of Oakville; Director and officer of Kuo; (c) Ong Beng
Seng, Vice President and Director of Oakville; Director and
officer of Kuo; (d) David Song Long Ban, Treasurer and Director
of Oakville; Director and officer of Kuo; (e) Steven H.
Grapstein, Vice President and Director of Oakville; and (f)
Holland Intertrust (Curacao) N.V., a Netherlands Antilles
corporation, a Director of Oakville. Oakville reports that it
has sole voting and dispositive power over its voting securities
of the Company.
</TABLE>
As stated under the caption "BACKGROUND" in the Consent
Solicitation Statement to which this Appendix is attached, on November
16, 1995, Whelan purchased from Ardsley options to acquire up to
400,000 shares of Common Stock from Ardsley, and the foregoing table
does not reflect that transaction, nor any other changes to beneficial
ownership of Common Stock which may have occurred since December 31,
1995.
III-5
<PAGE>
<PAGE>
[BACK COVER OF SOLICITATION STATEMENT]
IMPORTANT
1. If your shares are held in your own name, please sign, date and
mail the enclosed WHITE Consent Card to our solicitation agent,
Morrow & 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 execute a consent with
respect to your shares and only upon receipt of your specific
instructions. Accordingly, you should contact the person
responsible for your account and give instructions for a WHITE
Consent Card to be signed representing your shares. The
Committee urges you to confirm in writing your instructions to
the person responsible for your account and to provide a copy of
those instructions to The Stockholders' Committee for New
Management of Tesoro Petroleum Corporation in care of Morrow &
Co., Inc. at the address set forth below so that the Committee
will be aware of all instructions given and can attempt to ensure
that such instructions are followed.
3. If you have previously signed a green revocation of consent card,
you have every reason to change your mind and may do so by
marking, signing, dating and returning a later-dated WHITE
Consent Card.
If you have any questions or require any assistance in
executing your consent, please call
Morrow & Co., Inc.
909 Third Avenue
New York, New York 10022
Toll Free: (800) 634-4458
Banks and Brokerage firms, please call collect:
(212) 754-8000
<PAGE>
<PAGE>
Exhibit A
THE STOCKHOLDERS' COMMITTEE FOR NEW MANAGEMENT OF
TESORO PETROLEUM CORPORATION
c/o Whelan Management Corp.
8 Holley Street
Lakeville, CT 06039
February ___, 1996
Dear Fellow Tesoro Petroleum Stockholder:
The Stockholders' Committee for New Management of Tesoro
Petroleum Corporation (the "Committee") beneficially owns
approximately 6.0% of the outstanding Common Stock of Tesoro Petroleum
Corporation (the "Company"). We believe that many of the Company's
stockholders share the Committee's profound disappointment with the
performance of the Company's stock and the Company's Board of
Directors (the "Board"). As described in the accompanying Consent
Solicitation Statement, we are seeking your consent to remove all
seven of the present members of the Board, and to elect George F.
Baker, Gale L. Galloway, Alan Kaufman, James H. Stone and Douglas
Thompson as directors of the Company (collectively, the "Committee
Nominees").
THE ALASKAN REFINING BUSINESS SHOULD BE DIVESTED
The Committee believes that current and recent trading prices of
the Common Stock do not adequately reflect the value of the Company's
underlying businesses and assets. In the Committee's opinion, the
principal reason for that discrepancy is the fact that the Company is
primarily engaged in two businesses, (i) petroleum refining and
marketing in Alaska (the "Refining Business") and (ii) natural gas
exploration and production in Texas and Bolivia (the "E & P
Business"), which have distinctly separate financial, operating and
investment characteristics. Unfortunately, they also have quite
different financial performance records, as made clear by the
following table which shows the operating profit (loss) of the
Refining Business and the E & P Business for each of the years 1992
through 1995:
<TABLE>
<CAPTION>
Operating Profit (Loss)
-----------------------
Refining E & P
-------- -----
Business Business
-------- --------
(Dollars in millions)
<S> <C> <C>
1992 . . . . . . . . . . . $( 14.9 ) $ 22.3 (1)
1993 . . . . . . . . . . . 15.2 40.7
1994 . . . . . . . . . . . ( 3.4 )(2) 64.3
1995 . . . . . . . . . . . 0.7 76.6 (3)
<FN>
----------
(1)Excludes gain on sale of assets of $5.8 million.
(2)Excludes (i) a refund of $8.5 million received in settlement of a
tariff dispute, (ii) a gain of $2.4 million from the sale of
assets, (iii) favorable feedstock cost adjustments of $1.5 million
and (iv) charges of $6.6 million for environmental contingencies
and other matters.
(3)Excludes $33 million gain from sale of certain interests in the
Bob West Field.
</TABLE>
1
<PAGE>
<PAGE>
Obviously, the E & P Business is a strong financial performer,
and the Company's overall operating results have been dragged down by
the erratic Refining Business which lost an aggregate of $2.4 million
during the past four years.
During 1994, the Company made $32 million in capital expenditures
for the Refining Business. In 1995, another $9.3 million went into
the Refining Business, and the Company has budgeted an additional $9
million in capital expenditures related to the Refining Business for
1996. Also, according to the 1995 Third Quarter 10-Q, another $10
million will be required in 1997 to comply with environmental laws.
We think that all of that money would be better spent if used to
reduce the Company's high-cost debt or to develop the Company's E & P
Business.
We think that a divestiture of the Refining Business would have
several benefits for stockholders. The stock market would be able to
value the Common Stock based on the strong positive cash flow of the
Company's continuing E & P Business, free of the drag on market
valuation of the Common Stock that we think has been caused by the
poorly performing Refining Business. If the divestiture took the form
of a sale, the proceeds could be used to reduce the Company's
high-cost debt, directly and immediately increasing the value of
stockholders' investments. Money which otherwise would be needed for
capital expenditures for the Refining Business could be used to reduce
debt or take other actions to enhance stockholder value immediately.
We also think that the Company's management has been distracted by the
many problems experienced by the Refining Business during the past
several years. There can be no assurance, however, that if elected
the Committee Nominees will be able to effectuate a divestiture of the
Refining Business under terms that would be beneficial to the Company
and its stockholders. The ability of the Committee Nominees to
effectuate a divestiture of the Refining Business under terms that
would be beneficial to the Company and its stockholders is subject to
a number of significant uncertainties, including the then prevailing
and prospective levels of the Refining Business earnings and cash flow
as well as general business and economic conditions in the petroleum
refining and marketing industry. Because the Committee Nominees have
not had access to the Company's books, records, property or personnel,
they have not been able to fully assess the difficulties that may be
encountered in attempting to consummate the proposed transaction. It
is the Company's position, as stated in certain of its pleadings in
the litigation described in the Consent Solicitation Statement under
the caption "CERTAIN LEGAL PROCEEDINGS," that "market conditions on
the West Coast are such that the refinery cannot `promptly' be sold;
numerous other refineries are known to be on the market at this time
for which there are no buyers. Nor is it likely at the present time
that the refinery could be sold at a commercially reasonable price let
alone anywhere near the price fantasized by the [Committee]. It is
unlikely that a sale of the refinery could cover the approximately $90
million in debt associated with the refinery, let alone cover the
additional environmental costs or have excess funds available for
refinancing or repayment of other debt."
The Committee believes there is an opportunity to increase value
for stockholders by divesting the Refining Business and focusing on
the core business of exploiting the Company's valuable interests in
the Bob West and Bolivian fields. It is not presently contemplated
that the Committee Nominees would seek separate stockholder approval
of a divestiture of the Refining Business unless required by law.
2
<PAGE>
<PAGE>
THE COMMITTEE'S PROGRAM
The Committee Nominees are experienced businessmen who have no
prior relationship with or allegiance to any members of the Company's
senior management. Each of the Committee Nominees has a substantial
background in business, finance or investing. Messrs. Galloway, Stone
and Thompson are, we think, very knowledgeable about the oil and gas
industry, and Mr. Galloway has a proven track record in turning around
underperforming companies within that industry. The Committee
Nominees are committed to taking appropriate steps to maximize values
for all stockholders as promptly as possible after their election.
The knowledge of the Committee Nominees concerning the Company is
not as complete as it would be if they were already Board members.
Accordingly, if elected, the Committee Nominees will conduct a
detailed review of the Company and its assets, corporate structure,
capitalization, operations, properties, policies and personnel in
order to develop strategies to enhance stockholder value.
While we cannot now know the specifics of those strategies, based
on our current knowledge of the Company and its businesses, assets and
operations, we expect that the Committee Nominees, once elected, will
(subject to their fiduciary obligations and based upon the information
then available):
o DEVELOP A PLAN FOR THE DISPOSITION OF THE
COMPANY'S REFINING BUSINESS THROUGH A SALE
TO ONE OR MORE BUYERS, A SPIN-OFF OR SOME
OTHER MEANS. The Committee Nominees have
not reached a conclusion regarding the
method or process pursuant to which the
Refining Business would be sold.
Additionally, the Committee Nominees have no
intention of selling the Refining Business,
or any other assets or businesses of the
Company, to the Committee, any of its
members or any of their affiliates.
Further, it is not the Committee Nominees'
present intention, if elected, to enter into
any agreements or transactions with the
Committee, any of its members or any of
their affiliates. The Committee Nominees,
however, are aware of Mr. Flannery's
expectations, as described below, that, to
the extent he were asked to and were
instrumental in assisting the Company in
arranging for the sale of some or all of
the Company, he should receive a
commercially reasonable fee.
The Committee Nominees have not considered
whether, if elected, to cause the Company to
enter into any agreement with Mr. Flannery
to engage his services in connection with
the sale of the Refining Business, or any
other assets or businesses of the Company.
3
<PAGE>
<PAGE>
o FULLY EVALUATE ALL ALTERNATIVES. We
anticipate that the Committee Nominees will
also proceed to dispose of other
non-productive assets that are unrelated to
the core E & P Business. They will engage
in an in-depth analysis of the Company's
operations in an effort to identify
opportunities for reducing corporate
overhead and general administrative expenses
and strengthening and improving the core E &
P Business. Our nominees will thoroughly
review the Company's management and make
such changes as they conclude are in the
best interests of stockholders.
o THE COMMITTEE IS COMMITTED TO STOCKHOLDER
DEMOCRACY. Stockholders, as the true owners
of the Company, should be able to freely
elect and change the individuals serving on
the Board and should also be able to decide
for themselves whether to accept or reject
third-party bids for the entire Company. If
elected, the Committee Nominees intend to
abolish devices such as the Company's
"poison pill" and the amendments to the
By-Laws adopted by the incumbent Board
which, in the opinion of the Committee,
limit the ability of stockholders to
participate in or control important
corporate decisions. Additionally, if
elected, the Committee Nominees have agreed
to forgo and not receive in their respective
capacities as directors any cash director
fees or any retirement benefits currently
enjoyed by the Board. They intend, however,
to structure director compensation in the
form of stock and/or stock options.
o REDUCE OR REFINANCE DEBT. The Committee
believes that the Company is burdened by
long-term debt, including the Company's 12-
3/4% Subordinated Debentures and 13%
Exchange Notes. If the Committee Nominees
conclude, after their election to the Board,
to pursue a sale of Refining Business or
other assets, we believe that in the
existing interest rate and investment
environment and given other currently
prevailing conditions, reduction of the
high-cost debt would be a profitable use of
all or part of the proceeds. Of course, the
Committee's Nominees also will consider the
feasibility of refinancing all or part of
the Company's outstanding debt in order to
reduce debt service costs. As discussed in
footnote 1 below, the Company has stated
that it does not believe it
4
<PAGE>
<PAGE>
would be prudent to attempt to refinance its debt at this
time.(1)
THE COMMITTEE NOMINEES ARE COMMITTED TO
REORGANIZING AND REVITALIZING THE COMPANY
The Committee Nominees will be flexible in pursuing the goal of
maximizing stockholder value. They are prepared to tailor the steps
outlined above to the extent they believe desirable to better suit the
Company's situation, and will fully evaluate alternatives to those
steps, such as a sale of the entire Company. They will, of course, be
open to the views and suggestions of stockholders.
The Committee has not had discussions with potential acquirors of
the Refining Business, any of the Company's other assets or the
Company as a whole. However, in May of 1995, Kevin S. Flannery, a
member of the Committee, acting on his own and without any authority
from the Company, attempted to sell all of the Company and/or part of
its E & P Business. Although he approached as many potential
acquirors as he could identify, he had
_______________________
(1) The Company, however, has stated that it does not believe
it would be prudent to attempt to refinance its debt at this
time. In fact, the Company has stated in certain of its
pleadings in the litigation described in the Consent Solicitation
Statement under the caption "CERTAIN LEGAL PROCEEDINGS" that
"Tesoro has taken steps to reduce debt service by redeeming $34.6
million of 12-3/4% Subordinated Debentures effected December 1,
1995, thus satisfying the balance of Tesoro's sinking fund
requirements. Tesoro management has considered other possible
restructuring scenarios, but believes, as it has advised the
public in its March 31, 1995 First Quarter report [on Form 10-Q],
that it would not be prudent to undertake refinancing prior to
resolution of the Tennessee Gas litigation, since it would not
result in any short-term savings given the significant cost of
any refinancing, additional restrictions that would be required
and the Company's credit rating, which continues to be adversely
affected by the Tennessee Gas litigation." Additionally, the
Company also stated that the Committee has not disclosed how it
proposes to effect such refinancing or on what terms. "Although
the [Committee] states that a divestiture of the refining
business, if it took the form of a sale, would produce proceeds
that `could be used to reduce the Company's high-cost debt,' this
statement lacks any credible basis . . . . [A] `fire sale' of
Tesoro's refinery business, which is what the Committee says it
expects to attempt, would at current market prices actually
destroy shareholder value, by wiping out any value gained by
-------
strategic improvements in refinery operations -- improvements
that will become readily apparent to all (including potential
buyers) when the Company's initiatives are fully implemented and
industry conditions improve. The Committee also fails to
disclose that opportunities exist in today's depressed industry
environment, such as by consolidating the Company's refining and
marketing assets with other existing operations, thereby creating
operating synergies and enhancing the attractiveness of that
segment of the Company's business to (and the price that could be
realized from) a prospective purchaser. As far as paying down
high-cost debt with sales proceeds is concerned, what the
Committee fails to disclose is that, as discussed above, the
proceeds from a sale in today's market, net of environmental
costs and other liabilities related to the refinery, would be
virtually non-existent, and that Tesoro's current credit
agreement would, in all likelihood, preclude such a sale."
5
<PAGE>
<PAGE>
no success. Mr. Flannery, however, did not attempt to sell the
Refinery Business by itself. In May of 1995, it was Mr. Flannery's
expectation that, to the extent he was instrumental in arranging for
the sale of some or all of the Company, he would seek a fee for
those services. At the present time, Mr. Flannery has no agreement,
arrangement or understanding concerning his role in any sale of the
Company of some or all of its assets. Additionally, the Committee
Nominees have not considered whether, if elected, to cause the Company
to enter into any agreement with Mr. Flannery to engage his services
in connection with the sale of the Refining Business, or any other
assets or businesses of the Company. To the extent that Mr. Flannery
were asked to play such a role and perform services in connection
therewith, he would expect to be compensated in a commercially
reasonable manner. To the extent Mr. Flannery were to receive a fee
for such services, he might be deemed to have a conflict of interest
with all other stockholders who would not share in such a fee. There
can be no assurance that, if elected, the Committee Nominees will be
able to accomplish the disposition of the Refining Business or other
assets, or as to the timing of or amount of proceeds from any such
disposition which may be arranged. Moreover, while we think that a
disposition of the Refining Business and the use of all or part of any
sale proceeds to reduce debt or the other steps to be considered will
have a favorable impact on stockholder value, the trading prices of
the Common Stock are, of course, influenced by many factors and,
therefore, it is impossible to say with certainty that prices will
increase or to predict the amount of any such increase that might
occur. We think, though, that vigorous and concentrated efforts to
enhance the value of your investments in the Company should be made.
Except as described above, the Committee has no present plans or
proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization, liquidation,
relocation of operations or sale or transfer of assets involving the
Company or any of its subsidiaries, or any material changes in the
Company's business, corporate structure or policies; however, as
stated above the Committee intends to consider all of these
alternatives. In the event such a transaction materializes,
stockholders will have the opportunity to vote thereon to the extent
required by law and the Company's Amended and Restated Certificate of
Incorporation.
HELP US MAXIMIZE STOCKHOLDER VALUE
THE BASIC ISSUE WE ARE RAISING THROUGH THIS CONSENT SOLICITATION
IS WHETHER THE INCUMBENT DIRECTORS' RECORD JUSTIFIES THEIR
CONTINUATION IN OFFICE OR WHETHER A NEW BOARD OF DIRECTORS SHOULD BE
GIVEN THE OPPORTUNITY TO SEEK NEW DIRECTIONS FOR THE BENEFIT OF ALL
STOCKHOLDERS OF THE COMPANY.
We believe that many of you share our discontent and concerns.
In order to address those concerns, the Committee seeks your help to
remove the directors now in office and elect five new directors who,
we believe, will be responsive to stockholders and firmly committed to
the goal of increasing stockholder value.
6
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Your consent is important. No matter how many or how few shares
you own, please help us to improve stockholder value by completing,
signing, dating and mailing the enclosed WHITE Consent Card promptly.
YOU ARE URGED TO CONSENT TO THE REMOVAL OF THE BOARD AND THE
ELECTION OF THE COMMITTEE NOMINEES BY MARKING, SIGNING, DATING, AND
RETURNING PROMPTLY THE ENCLOSED WHITE CONSENT CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED. THE FAILURE TO EXECUTE A CONSENT WILL HAVE THE
SAME EFFECT AS WITHHOLDING A CONSENT.
THE COMMITTEE URGES YOU NOT TO SIGN ANY GREEN REVOCATION OF
CONSENT CARDS SENT TO YOU BY THE COMPANY. IF YOU HAVE PREVIOUSLY
SIGNED A GREEN REVOCATION OF CONSENT CARD, YOU HAVE EVERY REASON TO
CHANGE YOUR MIND AND MAY DO SO BY MARKING, SIGNING, DATING AND
RETURNING A LATER-DATED WHITE CONSENT CARD.
If your shares of Common Stock are held in the name of a
brokerage firm, bank nominee or other institution, only it can execute
a Consent Card with respect to your shares. Accordingly, please
contact the person responsible for your account and give instructions
for a WHITE Consent Card to be signed representing your shares. The
Committee requests that you confirm your instructions to the person
responsible for your account in writing and provide a copy of such
instructions to the Committee c/o Morrow & Co., Inc., 909 Third
Avenue, New York, New York 10022 so that the Committee will be aware
of all instructions given and can attempt to ensure that such
instructions are followed.
If you have any questions about completing or signing the Consent
Card or require assistance, including assistance in assuring that any
of your shares held by brokers or other nominees are voted, please
call Morrow & Co., Inc. at (800) 634-4458.
Very truly yours,
Kevin S. Flannery, on behalf of
The Stockholders' Committee for
New Management of Tesoro Petroleum
Corporation
7
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<PAGE>
Exhibit B
[FRONT OF FORM OF CONSENT CARD]
PRELIMINARY COPY--SUBJECT TO COMPLETION
WRITTEN CONSENT BY STOCKHOLDERS OF
TESORO PETROLEUM CORPORATION
TO ACTION WITHOUT A MEETING
SOLICITED BY
THE STOCKHOLDERS' COMMITTEE FOR NEW MANAGEMENT
OF TESORO PETROLEUM CORPORATION IN
OPPOSITION TO THE BOARD OF DIRECTORS
OF TESORO PETROLEUM CORPORATION
Unless otherwise indicated below, the undersigned, a
stockholder of record of Tesoro Petroleum Corporation, a Delaware
corporation (the "Company"), on __________, __, 1996 (the "Record
Date"), hereby consents pursuant to Section 228(a) of the Delaware
General Corporation Law with respect to all shares of common stock,
par value $0.16-2/3 per share (the "Common Stock"), of the Company
held by the undersigned to the taking of each of the following actions
without a meeting, without prior notice and without a vote:
THE STOCKHOLDERS' COMMITTEE FOR NEW MANAGEMENT OF TESORO
PETROLEUM CORPORATION STRONGLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY CONSENT TO ALL OF THE FOLLOWING RESOLUTIONS. EACH OF THE
RESOLUTIONS REQUIRES THE APPROVAL OF A MAJORITY OF THE COMMON STOCK
OUTSTANDING ON THE RECORD DATE.
THIS CONSENT CARD IS CONTINUED ON THE REVERSE SIDE. PLEASE
MARK, SIGN AND DATE THIS CONSENT CARD ON THE REVERSE SIDE BEFORE
RETURNING THIS CONSENT CARD IN THE ENCLOSED ENVELOPE.
1.A. FIX THE NUMBER OF DIRECTORS AT FIVE (5).
RESOLVED, that Section 2.1 of Article II of the By-Laws be
amended to read as follows:
Section 2.1 Number, Election and Term of Office. The
number of directors which shall constitute the whole Board of
Directors shall be five, unless and until changed by resolution of the
Board of Directors. The directors shall be elected at the annual
meeting of stockholders, except as provided in Section 2.2, and each
director elected at an annual meeting of stockholders, and directors
elected or appointed in the interim to fill vacancies and newly
created directorships shall hold office until the next annual meeting
of stockholders and until their successors are duly elected and
qualified or until their earlier resignation or removal. A director
need not be a stockholder.
1<PAGE>
<PAGE>
/ / CONSENTS / / CONSENT WITHHELD
1.B. REQUIRE THAT ANY VACANCIES AND NEWLY CREATED
DIRECTORSHIPS MAY BE FILLED ONLY BY STOCKHOLDER ACTION.
RESOLVED, that Section 2.2 of Article II of the By-Laws be
amended to read as follows:
Section 2.2 Vacancies and Additional Directorships. Any
vacancy or vacancies created by the death or resignation of a director
may be filled only by the majority vote of the remaining directors,
though less than a quorum, or by the sole remaining director. Any
vacancy or vacancies created by the removal of one or more directors
may be filled only by action of the holders of shares representing a
majority of the shares of Common Stock outstanding and entitled to
vote and such action may be taken at the same annual or special
meeting, or by means of the same written consent or consents, of
stockholders at or by which such director or directors were removed,
or may be taken at a different meeting or by a separate written
consent or consents. Newly created directorships resulting from any
increase in the authorized number of directors shall be filled only by
a majority of the directors then in office, though less than a quorum,
or by the sole remaining director, and such newly-created
directorships may not be filled by the stockholders unless otherwise
required by law.
/ / CONSENTS / / CONSENT WITHHELD
1.C. AUTHORIZE THE STOCKHOLDERS TO REMOVE ANY OR ALL
DIRECTORS AT ANY MEETING OR BY WRITTEN CONSENT OF A MAJORITY OF THE
STOCKHOLDERS.
RESOLVED, that Section 2.7 of Article II of the By-Laws be
amended to read as follows:
Section 2.7 Removal of Directors. At any annual meeting
of stockholders, at any special meeting of the stockholders duly
called for the purpose of removing a director or directors as provided
in these By-Laws, or by action of the stockholders by written consent
in accordance with the laws of the State of Delaware and the
Certificate of Incorporation, any director or directors may, by the
affirmative vote or written consent, as the case may be, of the
holders of shares representing a majority of the shares of Common
Stock outstanding and entitled to vote, be removed from office, either
for or without cause. Such vacancy may be filled only by the
stockholders as provided in Section 2.2.
/ / CONSENTS / / CONSENT WITHHELD
1.D. DELETE ANY PROVISION OF THE COMPANY'S BY-LAWS, AND
DELETE ANY AMENDMENT TO THE COMPANY'S BY-LAWS, IN EACH CASE ADOPTED ON
OR AFTER NOVEMBER 14, 1995, AND PRIOR TO THE EFFECTIVE TIME.
2
<PAGE>
<PAGE>
RESOLVED, that any provision of the Company's By-Laws, and
any amendment to the Company's By-Laws, in each case adopted on or
after November 14, 1995 and on or prior to the date that written
unrevoked consents of the holders of a majority of the shares of
Common Stock outstanding at the close of business on the Record Date
are delivered to the Company, be deleted.
/ / CONSENTS / / CONSENT WITHHELD
2. REMOVAL OF THE INCUMBENT DIRECTORS OF THE COMPANY.
RESOLVED, that the following incumbent directors of the
Company are hereby removed from such directorships without cause:
Robert J. Caverly, Peter M. Detwiler, Steven H. Grapstein, Raymond K.
Mason, Sr., John J. McKetta, Jr., Bruce A. Smith, Murray L. Weidenbaum
and any other person elected by the incumbent directors to fill any
vacancy or newly created directorship.
/ / CONSENTS / / CONSENT WITHHELD
INSTRUCTION: To consent or withhold consent to the removal of all
the above-named directors and any other person who is a
director of the Company at the time the action taken by
this written consent becomes effective, check the
appropriate box above. IF YOU WISH TO CONSENT TO THE
REMOVAL OF CERTAIN OF THE ABOVE-NAMED DIRECTORS AND/OR
CERTAIN OF THE DIRECTORS NOT NAMED ABOVE WHO ARE
DIRECTORS OF THE COMPANY AT THE TIME THE ACTION TAKEN
BY THIS WRITTEN CONSENT BECOMES EFFECTIVE, BUT NOT ALL
OF THEM, CHECK THE "CONSENTS" BOX ABOVE AND WRITE THE
NAME OF EACH PERSON YOU DO NOT WISH REMOVED IN THE
FOLLOWING SPACE:
_________________________________________________________________
IF NO BOX IS MARKED ABOVE WITH RESPECT TO THIS
PROPOSAL, THE UNDERSIGNED WILL BE DEEMED TO CONSENT TO
SUCH PROPOSAL, EXCEPT THAT THE UNDERSIGNED WILL NOT BE
DEEMED TO CONSENT TO THE REMOVAL OF ANY INCUMBENT
DIRECTOR WHOSE NAME IS WRITTEN IN THE SPACE PROVIDED
ABOVE.
3. ELECTION OF NEW DIRECTORS TO THE BOARD.
RESOLVED, that the following persons are hereby elected as
directors of the Company to hold office until their successors are
elected and qualified: George F. Baker, Gale L. Galloway, Alan J.
Kaufman, M.D., James H. Stone, and Douglas B. Thompson (the
"Nominees").
3<PAGE>
<PAGE>
/ / CONSENTS / / CONSENT WITHHELD
INSTRUCTION: TO CONSENT OR WITHHOLD CONSENT TO THE ELECTION OF ALL
THE ABOVE-NAMED PERSONS, CHECK THE APPROPRIATE BOX
ABOVE. IF YOU WISH TO CONSENT TO THE ELECTION OF
CERTAIN OF THE ABOVE-NAMED PERSONS, BUT NOT ALL OF
THEM, CHECK THE "CONSENTS" BOX ABOVE AND WRITE THE NAME
OF EACH SUCH PERSON YOU DO NOT WISH ELECTED IN THE
FOLLOWING SPACE:
________________________________________________________________
IF NO BOX IS MARKED ABOVE WITH RESPECT TO THIS PROPOSAL, THE
UNDERSIGNED WILL BE DEEMED TO CONSENT TO SUCH PROPOSAL, EXCEPT THAT
THE UNDERSIGNED WILL NOT BE DEEMED TO CONSENT TO THE ELECTION OF ANY
NOMINEE WHOSE NAME IS WRITTEN IN THE SPACE PROVIDED ABOVE.
The invalidity, illegality or unenforceability of any
particular provision of this Consent shall be construed in all
respects as if such invalid, illegal or unenforceable provision were
omitted without affecting the validity, legality or enforceability of
the remaining provisions hereof.
IN THE ABSENCE OF DISSENT BEING INDICATED ABOVE, THE UNDERSIGNED
HEREBY CONSENTS TO EACH ACTION LISTED ABOVE.
4
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<PAGE>
[REVERSE OF FORM OF CONSENT CARD]
Please sign exactly as name appears on
stock certificates or on label affixed
hereto. When shares are registered in
more than one name, all such persons
should sign. When signing as attorney,
executor, administrator, trustee,
guardian, corporate officer, partner,
etc., sign in official capacity, giving
full title as such. If a corporation,
please sign in the full corporate name
by president or other authorized
officer. If a partnership, please sign
in the partnership name by authorized
person.
DATED:__________________________________
________________________________________
Signature
________________________________________
Signature, if held jointly
________________________________________
Title or Authority (if applicable)
IN ORDER FOR YOUR CONSENT TO BE VALID, IT MUST BE DATED.
PLEASE SIGN, DATE AND MAIL YOUR CONSENT PROMPTLY IN THE POSTAGE-PAID
ENVELOPE ENCLOSED. THE FAILURE TO EXECUTE A CONSENT WILL HAVE THE
SAME EFFECT AS WITHHOLDING A CONSENT.
THE COMMITTEE URGES YOU NOT TO SIGN ANY GREEN REVOCATION OF
CONSENT CARDS SENT TO YOU BY THE COMPANY. IF YOU HAVE PREVIOUSLY
SIGNED AND RETURNED A GREEN REVOCATION OF CONSENT CARD, YOU HAVE EVERY
REASON TO CHANGE YOUR MIND AND MAY DO SO BY MARKING, SIGNING, DATING
AND RETURNING A LATER-DATED WHITE CONSENT CARD.
5
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