SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
(Amendment No. 3)
TESORO PETROLEUM CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.16-2/3 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
0008816091
- --------------------------------------------------------------------------------
(CUSIP Number)
Gerald S. Backman, P.C.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
April 5, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
Page 1 of 17
<PAGE>
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page should be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
NOTE: THIS STATEMENT CONSTITUTES AN ORIGINAL REPORT ON SCHEDULE 13D OF EACH
OF THE REPORTING PERSONS (AS DEFINED IN THE SCHEDULE 13D).
Page 2 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Kevin S. Flannery
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
PF, AF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
United States/Republic of Ireland
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 100 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 335,972 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 100 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 335,972 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
336,072 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [X]
See Item 5
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
1.3 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
IN
Page 3 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Whelan Management Corp.
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
WC, AF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 0 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 317,615 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 0 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 317,615 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
317,615 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
1.2 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
CO
Page 4 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Sean Kenrick Flannery Trust
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
WC, AF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
New York
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 0 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 18,357 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 0 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 18,357 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
18,357 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
0.1 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
00
Page 5 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
George F. Baker
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
PF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 110,000 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 0 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 110,000 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 0 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
110,000 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
0.4 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
IN
Page 6 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Alan Kaufman
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
PF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 581,500 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 20,000 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 581,500 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 20,000 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
601,500 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [X]
See Item 5
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
2.3 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
IN
Page 7 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Kaufman Children's Trust
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
WC, AF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Indiana
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 0 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 20,000 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 0 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 20,000 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
20,000 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
0.1 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
00
Page 8 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
James H. Stone
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
PF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 149,700 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 0 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 149,700 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 0 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
150,000 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
0.6 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
IN
Page 9 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Robert S. Washburn
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
PF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 0 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 233,336 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 0 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 233,336 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
233,336 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
0.9 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
IN
Page 10 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Robert S. and Suzanne P. Washburn Revocable Trust
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
WC, AF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
California
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 0 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 39,545 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 0 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 39,545 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
39,545 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
0.2 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
00
Page 11 of 17
<PAGE>
CUSIP No. 0008816091
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons
Robert S. Washburn, Trustee for the Robert S. Washburn Money
Purchase, Pension and Profit Sharing Keogh Plan Trusts
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
WC, AF
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
California
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 0 shares
Shares Bene- ___________________________________________________________________
ficially (8) Shared Voting Power 193,791 shares
Owned by ___________________________________________________________________
Each Report- (9) Sole Dispositive Power 0 shares
ing Person ___________________________________________________________________
With (10) Shared Dispositive Power 193,791 shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
193,791 shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
0.8 %
- --------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
00
Page 12 of 17
<PAGE>
This Amendment No. 3 amends and supplements the Statement on
Schedule 13D, as amended (the "Statement"), filed by the Stockholders' Committee
for New Management of Tesoro Petroleum Corporation (the "Committee") relating to
the shares of common stock, $0.16-2/3 par value (the "Shares"), of Tesoro
Petroleum Corporation (the "Company"). Unless otherwise indicated, all
capitalized terms shall have the same meaning as provided in the Statement as
previously filed.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 is hereby supplemented by the addition of the following:
On December 26, 1995, the Committee commenced a consent
solicitation (the "Consent Solicitation") to remove the existing members of the
Company's Board of Directors and replace them with the Committee Nominees. The
Consent Solicitation was terminated pursuant to the Settlement Agreement
described in Item 4 of this Amendment No. 3 as of April 4, 1996.
From and after April 5, 1996, as a result of the termination of
the Consent Solicitation, each member of the Committee and the other Reporting
Persons expressly disclaims membership in any "group" within the meaning of Rule
13d-5(b)(1) under the Securities Exchange Act of 1934.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 is hereby supplemented by the addition of the following:
On April 5, 1996, Flannery, Kaufman, Washburn, Stone, Baker (each
members of the Committee), Thompson, Galloway, Whelan (together with the members
of the Committee, the "Solicitation Parties") and Ardsley Advisory Partners
entered into a Settlement and Standstill Agreement, dated as of April 4, 1996
(the "Settlement Agreement"), with the Company. Pursuant to the Settlement
Agreement, (i) the parties thereto agreed to the dismissal of the lawsuit in the
United States District Court for the Western District of Texas, San Antonio
Division and (ii) the Solicitation Parties agreed to terminate the Consent
Solicitation. In addition, each of the Solicitation Parties severally agreed,
among other things, that for a period beginning as of April 4, 1996 and ending
on the earlier of the day after the Company's 1999 annual meeting or June 30,
1999 (the "Standstill Period") he or it shall not in any way, directly or
indirectly, encourage (1) any attempt to take control of the Company, (2) any
consent solicitation to remove any member of the Company's Board of Directors,
(3) any solicitation of proxies to vote or become a participant in any election
contest to remove any member of the Company's Board of Directors, (4) the
nomination or election of any alternate director or slate of directors proposed
from the floor at any meeting of the Company's stockholders or (5) any offers or
indications of interest with respect to the acquisition or disposition of the
Company or any of its business units.
The Company agreed, among other things, to expand its Board of
Directors to include nine members. Pursuant to the Settlement Agreement, the
three new members of the Company's Board of Directors will be (1) Kaufman
(beginning on or before April 12, 1996), (2) an individual who is independent of
each of the Company, the Solicitation Parties and Ardsley Advisory Partners
(beginning no later than July 31, 1996) and (3) an employee of Ardsley Advisory
Partners (beginning on or before April 12, 1996). Further, each of these persons
will remain members of the Company's Board of Directors throughout the
Standstill Period. In the event that Kaufman dies, resigns or is removed
pursuant to the terms of the Settlement Agreement, he shall not
Page 13 of 17
<PAGE>
be replaced. The foregoing description of certain of the terms of the Settlement
Agreement is qualified in its entirety by reference to the Settlement Agreement,
a copy of which is attached as Exhibit 12 and incorporated by reference herein.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 is hereby amended by (i) with respect to subsection (c),
the additions to Schedule II as set forth in Schedule II attached hereto and
(ii) with respect to subsections (a) and (b) as follows:
(x) deleting the first sentence of the first paragraph thereof and replacing it
with the following:
(a) and (b). As of the date hereof, Whelan directly owned 117,615
Shares and held options to acquire an additional 200,000 Shares that
expire on May 16, 1996.
and (y) deleting the first sentence of the fourth paragraph thereof and
replacing it with the following:
As of the date hereof, Stone owned 50,000 Shares and held options
to acquire 100,000 Shares that expire on May 16, 1996.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The information regarding the Settlement Agreement set forth in
Item 4 of this Amendment No. 3 is incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Item 7 is hereby supplemented by the addition of the following:
12. Settlement and Standstill Agreement, dated as of April 4,
1996, among Kevin S. Flannery, Alan Kaufman, Robert S. Washburn, James H. Stone,
George F. Baker, Douglas Thompson, Gale E. Galloway, Whelan Management Corp.,
Ardsley Advisory Partners and Tesoro Petroleum Corporation.
13. Joint Press Release of the Company and the Solicitation
Parties, dated April 5, 1996.
Page 14 of 17
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of their respective
knowledge and belief, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct as of April 5, 1996.
WHELAN MANAGEMENT CORP.
SEAN KENRICK FLANNERY TRUST
GEORGE F. BAKER
ALAN KAUFMAN
KAUFMAN CHILDREN'S TRUST
JAMES H. STONE
ROBERT S. WASHBURN
ROBERT S. AND SUZANNE P. WASHBURN
REVOCABLE TRUST
ROBERT S. WASHBURN MONEY
PURCHASE, PENSION AND PROFIT
SHARING KEOGH PLAN TRUSTS
By:/s/ Kevin S. Flannery
-------------------------------
Name: Kevin S. Flannery
Title: Attorney-in-Fact for All
KEVIN S. FLANNERY
/s/ Kevin S. Flannery
----------------------------------
Kevin S. Flannery
Page 15 of 17
<PAGE>
SCHEDULE II
I. FLANNERY ENTITIES
A. WHELAN MANAGEMENT CORP.
<TABLE>
<CAPTION>
Number
of Shares Price per Share
Type of Transaction Date or Call Options or Option Contract Location
- ------------------- ---- --------------- ------------------ --------
<S> <C> <C> <C> <C>
Sale 3/07/96 2,000 8 1/2 Exchange
Sale 3/13/96 3,000 8 1/8 Exchange
Sale 3/14/96 2,000 8 1/4 Exchange
Sale 3/14/96 3,000 8 3/8 Exchange
Sale 3/20/96 3,000 8 1/4 Exchange
Sale 3/25/96 5,000 8 1/2 Exchange
Sale 4/02/96 5,000 8 1/2 Exchange
</TABLE>
IV. STONE
<TABLE>
<CAPTION>
Number
of Shares Price per Share
Type of Transaction Date or Options or Option Contract Location
- ------------------- ---- ---------- ------------------ --------
<S> <C> <C> <C> <C>
Purchase 3/11/96 300 8 Exchange
Purchase 3/12/96 2,000 8 Exchange
Sale of Options (Put) 3/12/96 300 218 3/4 Exchange
Purchase of Options (Put) 3/12/96 300 206 1/4 Exchange
Purchase 3/13/96 1,700 8 Exchange
</TABLE>
Page 16 of 17
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
12 Settlement and Standstill Agreement, dated as of April 4, 1996,
among Kevin S. Flannery, Alan Kaufman, Robert S. Washburn, James
H. Stone, George F. Baker, Douglas Thompson, Gale E. Galloway,
Whelan Management Corp., Ardsley Advisory Partners and Tesoro
Petroleum Corporation.
13 Joint Press Release of the Company and the Solicitation Parties,
dated April 5, 1996.
Page 17 of 17
NYFS10...:\80\99980\0025\2401\SCH4016S.40F
EXHIBIT 12
SETTLEMENT AND STANDSTILL AGREEMENT
-----------------------------------
This Agreement, dated as of April 4, 1996, is among Kevin S.
Flannery, Alan Kaufman, Robert S. Washburn, James H. Stone, George F. Baker,
Douglas Thompson, Gale E. Galloway, and Whelan Management Corp. (together, the
"Solicitation Parties"), Ardsley Advisory Partners ("Ardsley"), and Tesoro
Petroleum Corporation ("Tesoro").
WHEREAS, on or about December 26, 1995, The Stockholders
Committee for New Management of Tesoro Petroleum Corporation, comprised of
Messrs. Flannery, Kaufman, Washburn, Stone and Baker (the "Committee), announced
its intention to engage in a solicitation (the "Solicitation") of written
consents for the purpose, inter alia, of removing the current members of the
Board of Directors of Tesoro and replacing them with a new Board comprised of
Messrs. Kaufman, Stone, Baker, Thompson and Galloway, and in connection
therewith filed with the Securities and Exchange Commission ("SEC") Schedule 13D
and preliminary Schedule 14A statements relating thereto; and
WHEREAS, on or about December 26, 1995, the Committee commenced
an action in the United States District Court for the Western District of Texas
(C.A. No. SA-95-CA- 1298) (the "Pending Action") against Tesoro and its Chief
Executive Officer Bruce A. Smith; and
WHEREAS, on or about January 8, 1996, defendants in the Pending
Action filed their answer to the amended complaint, and defendant Tesoro
asserted various counterclaims against the Solicitation Parties and others
relating, inter alia, to the Solicitation; and
----- ----
WHEREAS, on or about March 1, 1996, the Committee filed a
definitive Schedule 14A (the "Committee Schedule") with the SEC, and thereafter
commenced the Solicitation pursuant thereto; and
WHEREAS, the parties hereto have agreed to the terms of a
proposed settlement that would result in the dismissal of the Pending Action and
termination of the Solicitation substantially in accord with the terms set forth
below;
<PAGE>
NOW, THEREFORE, in order to effectuate the settlement, and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. The parties shall execute and file with the Court as soon as
practicable a stipulation of dismissal without prejudice or costs to either
side, encompassing all claims and counterclaims in the Pending Action. All
discovery and other proceedings in the Pending Action shall be suspended in the
interim.
2. The Solicitation Parties hereby agree to terminate the
Solicitation by, among other things, (a) promptly filing an amended Schedule 13D
Statement announcing the termination of the Solicitation, (b) promptly issuing,
or causing to be issued, with Tesoro a joint press release announcing the
settlement and termination of the Solicitation, and (c) executing such other
documents as may be necessary or appropriate to accomplish the settlement set
forth herein. In addition, by executing this Agreement Kevin S. Flannery hereby
revokes all notices to Tesoro of his intention to submit a slate of candidates
at the Company's 1996 annual meeting.
3. For a period beginning on the date hereof and ending on the
earlier of the day after Tesoro's 1999 annual meeting or June 30, 1999 (the
"Standstill Period"), each of the Solicitation Parties severally agrees on
behalf of himself or itself and his or its affiliates, agents, representatives,
or any person or entity controlled or under common control with any such member,
that he or it shall not, directly or indirectly, (a) make, or in any way
participate or assist in, or otherwise encourage any attempt to take control of
Tesoro, without the approval of the Board, whether through the acquisition of
shares of capital stock during a tender offer for the common stock of Tesoro,
exercising voting rights with respect to shares of capital stock or otherwise,
provided, however, that this provision shall not preclude any of the
Solicitation Parties from tendering shares in response to a tender offer for
Tesoro shares that is made without the participation, assistance or
encouragement of any of the Solicitation Parties; (b) solicit any consent or
participate or assist in any way or otherwise encourage any consent solicitation
seeking, without the approval of the Board, to remove any member of the Tesoro
Board of Directors and/or to elect one or more new directors or to take any
other action which would have
2
<PAGE>
the effect of removing any member of the Tesoro Board of Directors; (c)
commence, support (including without limitation by giving a proxy or voting) or
otherwise encourage any "solicitation" of "proxies" to vote (as such terms are
defined in Rule 14a-1 of the Securities Exchange Act of 1934) or become a
"participant" in any "election contest" (as such terms are defined in Rule
14a-11 of the Securities Exchange Act of 1934) in connection with any annual or
special meeting of stockholders seeking, without the approval of the Board, to
remove any member of the Tesoro Board of Directors and/or to elect one or more
new directors not nominated for election by the Tesoro Board of Directors; (d)
nominate, support (including without limitation by giving a proxy or voting) or
otherwise encourage the nomination or election of any alternate director or
slate of directors proposed from the floor at any annual or special meeting of
Tesoro stockholders; or (e) without the approval of the Board, solicit, support
or otherwise encourage any offers or indications of interest with respect to the
acquisition or disposition of Tesoro or any of its business units.
4. Tesoro's Board of Directors shall be expanded to include nine
members. Dr. Alan Kaufman shall be added to the Tesoro Board of Directors on or
before April 12, 1996. Tesoro further agrees that Dr. Kaufman shall be nominated
for election as part of the Board of Directors' recommended slate throughout the
Standstill Period unless he dies, resigns or is removed pursuant to paragraph 9
below. Dr. Kaufman agrees to serve as a director, if elected by the requisite
vote of shareholders, throughout the Standstill Period unless he dies, resigns
or is removed pursuant to paragraph 9 below.
5. Tesoro also agrees to add to its Board of Directors throughout
the Standstill Period another independent director with no prior relationship or
connection to Tesoro, Ardsley or any of the Solicitation Parties, who shall be
selected by the Board of Directors in accordance with governance procedures that
have been adopted by the Board. Tesoro agrees that the individual selected
pursuant to this paragraph shall be proposed for election as soon as possible
but in no event later than July 31, 1996. In the event that the independent
director selected pursuant to this paragraph shall at any time during the
Standstill Period die, resign or be removed from the Board of Directors (for any
reason other than the failure to receive the requisite vote of shareholders),
Tesoro agrees to replace
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such director with another independent director selected in accordance with the
Company' By-laws and governance procedures then in effect.
6. Tesoro also agrees to provide Ardsley during the Standstill
Period with the right to designate one of its employees (who shall not include
any of the Solicitation Parties or any affiliate, agent or representative of, or
other person or entity controlled by or under common control with, any of the
Solicitation Parties) as a nominee for election to Tesoro's Board of Directors,
subject to a normal background check. Tesoro agrees that the person designated
by Ardsley pursuant to this paragraph will be added to the Tesoro Board on or
before April 12, 1996. Tesoro further agrees that the employee designated by
Ardsley pursuant to this paragraph shall be nominated for election as part of
the Board's recommended slate throughout the Standstill Period unless he dies,
resigns or is removed pursuant to paragraph 10 below. If such employee dies or
resigns, Ardsley shall be entitled to designate another employee to become a
director, subject to a normal background check.
7. Dr. Kaufman hereby agrees not to disclose without the consent
of Tesoro any non-public information or trade secrets of Tesoro obtained in his
capacity as a director of Tesoro to any unauthorized person including without
limitation any of the Solicitation Parties, except as may be required by law.
8. Ardsley hereby agrees that the person designated pursuant to
paragraph 6 above shall not disclose without the consent of Tesoro any
non-public information or trade secrets of Tesoro obtained in his capacity as a
director of Tesoro to any unauthorized person including without limitation any
of the Solicitation Parties, except as may be required by law.
9. In the event of a breach of the provisions set forth in
paragraphs 2, 3, 7, 12 or 13 of this Agreement by any of the Solicitation
Parties, or in the event that the total common stock holdings of Dr. Kaufman
shall at any time during the Standstill Period be reduced to less than 400,000
shares, or in the event that Dr. Kaufman shall, at any time during the
Standstill Period, while he is a member of Tesoro's Board of Directors, announce
his intention to vote or vote his shares of Tesoro common stock for any
candidate other than the nominees for election to the Board of Directors of
Tesoro proposed by a majority of Tesoro's
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Board, Dr. Kaufman shall immediately tender his resignation and, at the option
of Tesoro, be removed from the Tesoro Board. The death, resignation or removal
pursuant to the terms of this Agreement of Dr. Alan Kaufman from the Tesoro
Board shall not relieve any of the Solicitation Parties from their obligations
hereunder, which shall continue and remain in effect until the conclusion of the
Standstill Period.
10. In the event of a breach of the provisions set forth in
paragraph 8 above, or in the event that at any time during the Standstill Period
(a) the total common stock holdings of Ardsley shall at any time be reduced to
50 percent or less of the number of shares held as of the date hereof, or (b)
Ardsley agrees or takes any action to support a change of control of Tesoro or
the election to the Tesoro Board of any person other than a Board nominee, the
director designated by Ardsley pursuant to paragraph 6 above shall immediately
tender his resignation and, at the option of Tesoro, be removed from the Tesoro
Board. Ardsley agrees to vote all shares of common stock of Tesoro owned by
Ardsley or with respect to which it or its affiliates have voting discretion in
favor of the entire slate of candidates proposed for election at Tesoro's 1996
annual meeting, provided it includes the individuals selected pursuant to
paragraphs 4 and 6 above. For purposes of this paragraph, Ardsley shall be
deemed the owner as of the date hereof of all shares covered by the option
granted to Whelan Management Corp. on November 18, 1995, unless the option is
exercised, in whole or in part, by Whelan or any other of the Solicitation
Parties, in which case Ardsley shall not be deemed the owner as of the date
hereof of any shares acquired pursuant to the exercise of such option.
11. In consideration of the above and in order to eliminate
future legal fees and expenses associated with continued protracted litigation
and the Solicitation, Tesoro agrees to pay the Solicitation Parties each of
their reasonable out-of-pocket costs (including reasonable attorneys' fees)
actually incurred in connection with the Pending Action and/or the Solicitation,
up to a maximum of $700,000. Tesoro also agrees to pay Ardsley its reasonable
out-of-pocket costs (including reasonable attorneys' fees) actually incurred in
connection with the Pending Action, up to a maximum of $200,000. Tesoro hereby
agrees to pay $500,000 to the Solicitation Parties and $140,000 to Ardsley upon
execution of this Agreement and issuance of the joint press release required by
paragraph 2 of this Agreement, with the balance to be paid within 15 days of
receipt of the
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documentation required by the succeeding sentence. Tesoro shall have the right
to examine all invoices and other documentation necessary to substantiate the
amount and reasonableness of any fees and expenses incurred. In the event of any
dispute regarding the amount of expenses to be reimbursed pursuant to this
paragraph, the parties agree to submit the dispute to binding arbitration. The
arbitrator shall be Dean John Feerick of Fordham Law School or, if he declines
or is unable to serve, a mutually agreeable person of similar standing in the
legal community. The decision of the arbitrator shall be rendered within 90 days
from the date submitted to the arbitrator and the decision shall be final,
conclusive and not subject to appeal. In any such arbitration, the prevailing
party (i.e., the party to whom the arbitrator awards the largest portion of the
amount in dispute) shall recover his or its reasonable attorneys' fees in
connection therewith.
12. Each of the Solicitation Parties, Ardsley and Tesoro
severally agrees that during the Standstill Period neither he nor it nor any
affiliate shall make any statement or take any action that is critical or
disparaging of each other or the management or performance of Tesoro. Each of
the Solicitation Parties and Ardsley further severally agrees that throughout
the Standstill Period neither he nor it nor any of his or its affiliates will
issue any press release, knowingly make any statements to the press or other
news media, or make any critical or disparaging statement to any securities
analyst or institutional investor regarding the management or performance of
Tesoro.
13. Each of the Solicitation Parties has delivered herewith a
Revocation of Consent (the "Revocation"), revoking all consents previously
executed by such member or his affiliates, agents, representatives, or any
person or entity controlled by or under common control with such member, if any,
and such member represents and warrants to such effect to Tesoro. Each of such
members, on behalf of himself or itself and his or its affiliates, agents,
representatives, and any person controlled by or under common control with him,
agrees to the following:
A. Except as contemplated by paragraph C of this Section 13,
neither he nor it nor any of his or its affiliates, agents,
representatives, or any person or entity controlled by or under common
control with such member, will sign or deliver any consents relating
to any of the matters (the "Matters") as to which consents
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<PAGE>
are, were or are proposed to be solicited pursuant to the Committee
Schedule.
B. Neither he nor it nor any of his or its affiliates, agents,
representatives, or any person or entity controlled by or under common
control with such member, will take any action to revoke the
Revocation.
C. Neither he nor it nor any of his or its affiliates, agents,
representatives, or any person or entity controlled by or under common
control with such member, will deliver to Tesoro any consents relating
to any of the Matters, except the consent dated April 1, 1996,
relating to 100 shares of common stock of Tesoro held in the name of
Kevin S. Flannery, which consent is covered and revoked by the
Revocation.
D. He and it and his and its affiliates, agents, representatives,
and any person or entity controlled by or under common control with
such member, will immediately cease soliciting consents relating to
the Matters, will not encourage, and, in response to any inquiry will
specifically discourage, all other persons with respect to the
delivery to Tesoro of consents relating to any of the Matters.
14. The parties hereto agree that any breach of the this
Agreement shall constitute irreparable harm and entitle any party to obtain
immediate injunctive relief to enforce compliance with the terms hereof. The
failure of any party to seek or obtain immediate relief shall not constitute a
waiver of, and shall not relieve any party from, his or its obligations
hereunder.
15. In the event that Tesoro or the Board of Directors of Tesoro
shall breach the provisions of paragraphs 4, 5, 6 or 12 of this Agreement, the
Solicitation Parties shall be relieved of their obligations pursuant to
paragraphs 3 and 12 of this Agreement for the balance of the Standstill Period.
In the event any of the Solicitation Parties shall breach the provisions of
paragraphs 2, 3, 7, 12 or 13, Tesoro shall be relieved of its obligations
pursuant to paragraphs 4, 5 and 12 of this Agreement. In the event that Tesoro
or the Board of Directors of Tesoro shall breach the provisions of paragraphs 6
or 12 of this Agreement, Ardsley shall be relieved of its obligations pursuant
to paragraphs 10 and 12 of this Agreement for the balance of the Standstill
Period. In the event that Ardsley
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shall breach the provisions of paragraphs 8, 10 or 12, Tesoro shall be relieved
of its obligations pursuant to paragraphs 6 and 12 of this Agreement.
16. Immediately following the end of the Standstill Period,
provided that the parties shall have complied with the provisions of this
Agreement in all material respects, the parties hereto shall exchange mutual
general releases with respect to all claims or counterclaims which have or could
have been asserted, or which arise out of any of the acts, transactions or
events alleged, in the Pending Action (the "Released Claims"). Tesoro hereby
covenants not to sue any or each of the Solicitation Parties or Ardsley during
the Standstill Period with respect to any Released Claim provided that such
Solicitation Party or Ardsley, as the case may be, complies with his or its
respective obligations pursuant to paragraphs 2, 3, 7, 12 and 13 above. Each of
the Solicitation Parties hereby covenants not to sue Tesoro during the
Standstill Period with respect to any Released Claim provided that Tesoro
complies with its obligations pursuant to paragraphs 4, 5, 6 and 12 above. Each
of the parties hereto hereby agrees to toll the running of the applicable
statutes of limitations with respect to the Released Claims until the conclusion
of the Standstill Period. The provisions of this paragraph shall not operate as
a bar to an action to enforce the terms of this Agreement.
17. Except as otherwise provided herein, this Agreement shall
remain in full force and effect throughout the Standstill Period, unless all of
the parties hereto agree in writing to terminate this Agreement prior to the
conclusion of the Standstill Period.
18. No modification, amendment or waiver of the terms of this
Agreement shall be enforceable against any party hereto absent a written
agreement signed by Tesoro and such other party.
19. If for any reason the settlement provided for herein is not
consummated, all negotiations and proceedings relating to the settlement shall
be without prejudice to the rights of the parties hereto, who shall be restored
to the status quo existing as of the date of this agreement.
20. Neither this Agreement, nor the fact of its existence nor any
of the terms hereof, nor any negotiations or proceedings relating thereto, shall
be offered or
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received in evidence in the Pending Action or in any other action or proceeding,
other than an action to enforce the terms hereof, nor shall they be deemed to
constitute any evidence or admission of liability or wrongdoing on the part of
any party to the Pending Action, all of which is expressly denied, it being
understood that the parties have agreed to enter into this Agreement and the
settlement contemplated hereunder solely to avoid the expense, distraction and
inconvenience of further protracted litigation and other proceedings.
21. This Agreement shall inure to the benefit of and is binding
upon the parties and their respective officers, directors, employees, partners,
heirs, executors, successors, representatives, agents and assigns.
22. This Agreement shall be governed by the laws of the State of
New York, exclusive of the law on conflicts of laws.
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23. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original. The executed
signature pages from each actual or telecopied counterpart may be joined
together and attached to such original and shall constitute one and the same
instrument.
Whelan Management Corp. /s/ Kevin S. Flannery
-----------------------------
Kevin S. Flannery
By: /s/ Kevin S. Flannery /s/ Alan Kaufman
------------------------------- -----------------------------
Title: President Alan Kaufman
Ardsley Advisory Partners /s/ Robert S. Washburn
-----------------------------
Robert S. Washburn
By: /s/ Sanford B. Prater /s/ James H. Stone
------------------------------- -----------------------------
Title: Partner James H. Stone
Tesoro Petroleum Corp. /s/ George F. Baker
-----------------------------
George F. Baker
By: /s/ Bruce A. Smith /s/ Douglas Thompson
------------------------------- -----------------------------
Title: President and Douglas Thompson
Chief Executive
Officer
/s/ Gale E. Galloway
-----------------------------
Gale E. Galloway
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EXHIBIT 13
FOR IMMEDIATE RELEASE Contact: Greg Wright
(210) 283-2440
TESORO AND DISSIDENT SHAREHOLDER GROUP
AGREE TO END CONSENT SOLICITATION
San Antonio, Texas -- April 5, 1996 -- Tesoro Petroleum Corporation
(NYSE:TSO) and the Committee for New Management of Tesoro Petroleum Corporation
today announced that an agreement has been reached to end a consent solicitation
initiated by the Committee Dec. 26, 1995.
Following is a summary of the terms of the agreement.
o The Committee will terminate its current consent
solicitation and both parties will dismiss all pending
legal action.
o The members of the dissident shareholder group have agreed that,
for a period ending the earlier of the day after Tesoro's 1999
annual meeting or June 30, 1999, they will not seek to take over
control of the company or support, encourage or assist any effort
to elect anyone to Tesoro's Board of Directors other than
nominees recommended by the board.
o Three new directors will be named to Tesoro's board,
increasing the number of directors to nine: One
director will be Sanford B. Prater, a partner of Ardsley
Advisory Partners, the company's largest shareholder;
Dr. Alan Kaufman, a Committee member, will be elected as
<PAGE>
a second director; and the third will be selected by the board's
Governance Committee but will have no prior connection to Tesoro,
the Committee or Ardsley.
"This consent solicitation has diverted management time and company
resources from our primary objective of increasing shareholder value," Tesoro
Chief Executive Officer Bruce Smith said. "Beginning last year, we have
initiated cost savings, redeployed assets, lowered debt, strengthened management
and improved corporate governance, all of which sets the stage for improved
value. This is a program that needs our full attention. We believe this
settlement represents a win-win solution for our shareholders since it adds
additional shareholder representation on our board and will include individuals
who will bring a different perspective to Tesoro. We welcome this change and are
pleased that we can once again bring our full resources to bear on improving
Tesoro's operations."
Kevin Flannery, president of Whelan Management Corp., said "We have seen
the implementation of many of the changes the Committee has sought and now
believe the management and board of Tesoro are headed in the right direction to
create shareholder value. We are pleased that members of the board now represent
ownership of approximately 20% of Tesoro's outstanding shares."
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Tesoro Petroleum Corporation is a natural resource company engaged in
natural gas exploration and production, petroleum refining and marketing, and
marine services.
3
