SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
TOSCO CORPORATION
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
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4) Proposed maximum aggregate value of transaction:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
Tosco Corporation
72 Cummings Point Road
Stamford, CT 06902
Telephone: 203 977-1000
TOSCO
January 10, 1997
Dear Fellow Shareholders:
A Special Meeting of Stockholders is being held on February 12, 1997 for
the purpose of increasing the number of authorized shares of Common Stock of the
Company. This will provide the Company sufficient shares to complete the
previously announced acquisition of Unocal's refining and marketing assets and
also provide shares for general corporate purposes.
We believe the planned acquisition of Union 76's refining and marketing
assets represents a unique opportunity for the Company. However, we need your
approval to issue additional shares to complete the transaction.
An absolute majority of shares is needed for us to proceed and we therefore
strongly urge that you consider and approve the attached proposal promptly.
Thank you for your consideration.
Sincerely,
/s/ THOMAS D. O'MALLEY
---------------------------------------
Thomas D. O'Malley
Chairman & Chief Executive Officer
<PAGE>
TOSCO CORPORATION
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 12, 1997
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NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Tosco
Corporation ("Tosco") will be held at the The Hyatt Regency Greenwich Hotel,
1800 East Putnam Avenue, Old Greenwich, Connecticut, on February 12, 1997 at
8:00 o'clock in the morning for the following purposes:
I. To authorize and approve an amendment to the Articles of
Incorporation of Tosco increasing the number of authorized shares of Common
Stock of Tosco.
II. To transact such other business as may properly come before the
meeting, or any adjournment thereof.
Stockholders of record at the close of business on December 27, 1996 shall
be entitled to vote at and be present at the meeting.
By order of the Board of Directors,
WILKES MCCLAVE III
Secretary
Dated: January 10, 1997
Stamford, Connecticut
IMPORTANT: PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED IN ORDER TO ASSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING. IF YOU ATTEND THE MEETING YOU MAY VOTE IN PERSON IF
YOU WISH TO DO SO EVEN THOUGH YOU HAVE SENT IN YOUR PROXY.
<PAGE>
TOSCO CORPORATION
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PROXY STATEMENT
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The accompanying Proxy is solicited by the Board of Directors of Tosco
Corporation, a Nevada corporation ("Tosco"), for use at a Special Meeting of
Stockholders (the "Special Meeting") to be held on February 12, 1997 at 8:00
a.m. at The Hyatt Regency Greenwich Hotel, 1800 East Putnam Avenue, Old
Greenwich, Connecticut, at which stockholders of record at the close of business
on December 27, 1996 shall be entitled to vote. At the Special Meeting
stockholders will be asked to approve an amendment to the Articles of
Incorporation of Tosco increasing the number of authorized shares of Common
Stock of Tosco. The cost of solicitation of proxies will be borne by Tosco.
Tosco may use the services of its Directors, officers, stockholders of record
and others to solicit proxies, personally or by mail or telephone. Arrangements
may also be made with brokerage houses and other custodians, nominees,
fiduciaries and stockholders of record to forward solicitation material to the
beneficial owners of the stock held of record by such persons. Tosco may
reimburse such solicitors for reasonable out-of-pocket expenses incurred by them
in soliciting, but no compensation will be paid for their services. Tosco has
retained Hill and Knowlton, Inc. to assist in the solicitation of proxies for a
fee estimated at $12,000 plus out-of-pocket expenses. Any Proxy granted as a
result of this solicitation may be revoked at any time before its exercise by
granting a subsequently dated Proxy, by attending the Special Meeting and voting
in person or by mailing a notice of revocation to Tosco Corporation, 72 Cummings
Point Road, Stamford, Connecticut 06902, Attention: Secretary.
The principal executive offices of Tosco are located at 72 Cummings Point
Road, Stamford, Connecticut 06902 and its telephone number is (203) 977-1000.
The date of this Proxy Statement is the approximate date on which this
Proxy Statement and accompanying Proxy were first sent or given to stockholders.
On December 27, 1996, Tosco had outstanding and entitled to vote with
respect to all matters to be acted upon at the Special Meeting 43,671,907 shares
of Common Stock, par value $.75 per share ("Common Stock"). Each holder of
Common Stock will be entitled to one vote for each share of Common Stock held by
such holder. The presence of holders representing a majority of the outstanding
shares will constitute a quorum at the meeting. Abstentions are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. Abstentions and broker non-votes are not counted in determining the
votes cast with respect to any of the matters submitted to a vote of
stockholders.
AMENDMENT TO ARTICLES OF INCORPORATION
Pursuant to Article FOURTH of its Articles of Incorporation, Tosco is
presently authorized to issue 50,000,000 shares of Common Stock, par value $.75
per share, of which on the record date, 43,671,907 shares were issued and
outstanding and 2,549,041 shares were held in the treasury. All of Tosco's
unissued shares and treasury shares are reserved for issuance upon exercise of
stock options and conversion of convertible securities. Tosco is also presently
authorized to issue 12,000,000 shares of Preferred Stock, par value $1.00 per
share, of which on the record date, no shares were issued and outstanding. Tosco
proposes to increase the authorized number of shares of Common Stock to
250,000,000 shares, par value $.75 per share.
It is proposed (the "Proposal") to amend the first paragraph of Article
FOURTH of the Articles of Incorporation of Tosco in order to increase the
authorized number of shares of Common Stock of Tosco from 50,000,000 shares, par
value $.75 per share, to 250,000,000 shares, par value $.75 per share, as
follows:
"FOURTH: The total authorized capital stock of this Corporation is One
Hundred Ninety-Nine Million, Five Hundred Thousand Dollars ($199,500,000)
divided into 250,000,000 shares of Common Stock of the par value of $.75 per
share and 12,000,000 shares of Preferred Stock of the par value of $1.00 per
share."
The authorized number of shares of Preferred Stock will not be changed as
the result of the Proposal. The Board of Directors of Tosco has unanimously
approved the adoption of the Proposal. In order for such Proposal to be adopted
<PAGE>
there will be required a vote in favor by the holders of shares of Common Stock
of Tosco carrying a majority of the votes entitled to be cast at this Special
Meeting. The Board of Directors believes that it would be in the best interests
of Tosco to amend Article FOURTH of the Articles of Incorporation to give effect
to the Proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AUTHORIZATION AND
APPROVAL OF THE AMENDMENT TO THE ARTICLES OF INCORPORATION.
Pursuant to the Articles of Incorporation of Tosco, stockholders of Tosco
have no preemptive rights with respect to the additional shares being
authorized. The Articles of Incorporation do not require further approval by
stockholders prior to the issuance of any additional shares of Common Stock or
Preferred Stock. However, in certain circumstances (generally relating to the
number of shares to be issued and the identity of the recipients), the rules of
the New York Stock Exchange require stockholder authorization in connection with
the issuance of such additional shares. Subject to the rules of the New York
Stock Exchange, the Board of Directors of Tosco has the sole discretion to issue
additional shares of Common Stock. The issuance of any additional shares of
stock will have the effect of diluting the percentage of stock ownership and
voting rights of the present stockholders of Tosco.
On December 14, 1996, Tosco entered into a definitive Sale and Purchase
Agreement (the "Agreement") with Union Oil Company of California ("Unocal") to
acquire Unocal's West Coast petroleum refining, marketing and related supply and
transportation assets for a purchase price of approximately $1.4 billion, plus
the value of inventory as of the closing date (the "Acquisition"). In addition,
Unocal will be entitled to receive contingent participation payments over the
next seven years, up to a maximum amount of $250 million, if the margin on
dealer tank wagons exceeds a base index and/or the differential between
California Air Resources Board Phase II gasoline and conventional gasoline
exceeds a base index. For a period of 25 years, Unocal will be responsible for
environmental liabilities arising out of or relating to the period prior to the
closing, except that Tosco will pay the first $7 million of such environmental
liabilities each year, plus 40% of any amounts in excess of $7 million per year,
with Unocal paying the remaining 60% each year. The aggregate maximum amount
that Tosco may have to pay in total for 25 years for such environmental
liabilities is limited to $200 million. Environmental liabilities assumed by
Tosco pursuant to the Acquisition will be reserved for at the time of
Acquisition.
In connection with the Acquisition, Tosco intends to issue Common Stock
directly to Unocal and/or may publicly sell shares of its Common Stock. If
Tosco's shareholders do not approve the increase in the number of authorized
shares of Common Stock, Tosco may not be able to effectuate the Acquisition.
The assets to be purchased from Unocal include the following: two petroleum
refining systems comprised of four sites in California with an aggregate
throughput capacity of 250,000 barrels per day; a retail gasoline system which
currently sells over 100,000 barrels per day of gasoline and diesel fuel
consisting of approximately 1,350 76-branded gasoline stations, approximately
1,100 of which are company-controlled; a distribution system comprised of 13
company-owned oil storage terminals, three modern American-flag 40,000
deadweight-ton tankers and 1,500 miles of crude oil and product pipeline; the
worldwide rights to the "76" and "Union 76" brands, together with the
distinctive orange ball logo, in the petroleum refining and marketing
businesses; and Unocal's lubricants manufacturing, distribution and marketing
business.
Tosco intends to fund the Acquisition through the issuance of a combination
of debt and equity securities, including the possibility of selling Common Stock
pursuant to an underwritten public offering, and borrowings under a new credit
facility. Tosco is presently planning the sale pursuant to Rule 144A or
Regulation S of $600 million of notes having maturities of from 10 to 50 years
and is contemplating the public sale of up to 9.2 million shares of Common
Stock. The terms and manner of the financing have not been finalized and may be
different from those described herein.
Consummation of the Acquisition is subject to the satisfaction of a number
of conditions, including obtaining governmental regulatory approvals, approval
of the Proposal by Tosco's stockholders and the satisfaction of conditions
normally contained in transactions of this type. In addition, on January 15,
1997, Tosco must deposit $1.4 billion of value into an escrow account, of which
at least $1 billion must be in cash and the balance may be in the form of the
right to receive Common Stock of Tosco having a value equal to the difference
between $1.4 billion in cash and the amount of cash deposited in escrow. Tosco
will not be required to issue Common Stock having a value of less than $45 per
share. The number of shares of Common Stock to which Unocal will be entitled
will be determined based on the average Tosco stock prices for the ten days
preceding the date Unocal will be entitled to receive such shares. If the
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<PAGE>
price is below $45 per share, each of Tosco and Unocal will have specified
rights. If Tosco fails to make the deposit into escrow or if the Proposal is not
approved, either party has the right to terminate the Agreement and Unocal would
receive a $20 million break-up fee. If Unocal receives shares of Common Stock,
it will be granted registration rights to sell such shares and will enter into
an agreement with Tosco restricting its right to sell such shares or acquire
additional shares, agreeing to vote such shares at all stockholder meetings in
proportion to the votes of other stockholders and undertaking not to take or
influence the control of Tosco. The Acquisition is presently scheduled to close
in the first quarter of 1997.
Tosco believes the Acquisition is in the best interests of Tosco and its
stockholders. In reaching its determination, the Board of Directors considered a
number of factors, including without limitation the following: the assets
complement Tosco's existing west coast operations; the combination of the
refineries should result in a cost-effective network; Tosco's existing refinery
and transportation system should be enhanced; Tosco will become the third
largest retailer in California; its current retail operations in the western
United States will be enhanced; the Tosco Circle K convenience store network
will be enhanced; and there are significant opportunities for economies of scale
and operating efficiencies, particularly in terms of integration of office
facilities, information systems, management and computer systems.
The terms of the Acquisition were the result of arms' length negotiations
conducted by representatives of Tosco and Unocal. The Acquisition will be
accounted for by the purchase method of accounting. The statements contained in
this Proxy Statement with respect to the terms of the Acquisition are subject to
the more detailed information set forth in the Agreement, and are qualified in
their entirety by reference thereto. There is no assurance that the Acquisition
will be consummated even if the Proposal is approved by the stockholders.
Since the stockholders of Tosco will not have the opportunity to separately
vote on the Acquisition, each stockholder's vote on the authorization to approve
the issuance of additional shares of Common Stock could be deemed such
stockholder's right to vote, indirectly, with respect to the Acquisition. The
stockholders of Tosco who vote against the Proposal do not have any appraisal
rights under Nevada law with respect to their shares of Common Stock.
The increased number of authorized shares of Common Stock will be available
for issuance by Tosco, in the discretion of the Board of Directors, from time to
time. The Board of Directors will be able to issue such shares without the
time-consuming and costly need to hold a special meeting of stockholders, for
stock splits, in the acquisition of properties or businesses, in financing
future growth or for other corporate purposes. Except with respect to the Unocal
transaction, Tosco has not entered into any specific agreements or
understandings relating to the issuance of additional shares of Common Stock;
however, Tosco is receptive to all methods of financing which may be reasonably
available and acquisition opportunities which may arise from time to time. The
Board of Directors presently has under consideration a proposal to approve a
stock split of the Common Stock; however, no determination has been made as to
when, or if, such split will occur. The Board of Directors believes that, in the
future, occasions may arise where the time required to obtain stockholder
approval might adversely delay Tosco's ability to enter into a desirable
transaction. Authorized but unissued shares of Common Stock will be issued by
Tosco from time to time as appropriate and opportune situations arise.
DESCRIPTION OF TOSCO CAPITAL STOCK
The summary of the terms of the capital stock of Tosco set forth below does
not purport to be complete and is subject to and qualified in its entirety by
reference to Tosco's Articles of Incorporation and Bylaws.
Authorized Capital Stock
The authorized capital stock of Tosco consists of 50 million shares of
Common Stock, and 12 million shares of Preferred Stock. As of December 27, 1996
there were 43,671,907 shares of Common Stock outstanding. Tosco Common Stock is
listed on the NYSE and the Pacific Stock Exchange under the symbol TOS. No
shares of Preferred Stock are outstanding. On January 6, 1997, the closing price
of a share of Common Stock on the NYSE was $80.
Common Stock
The holders of Common Stock are entitled to one vote for each share held
and have the sole right and power to vote in all matters on which a vote of
stockholders is taken, except as otherwise provided by statute and subject to
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voting rights of any holders of Preferred Stock. Subject to the rights of any
holders of Preferred Stock, the holders of shares of Common Stock are entitled
to receive dividends when, as and if declared by the Board of Directors, out of
funds legally available therefor and to share pro rata in any distribution to
stockholders. Upon liquidation, dissolution, or winding up of Tosco, subject to
the rights of the holders of any shares of Preferred Stock, the holders of
Common Stock are entitled to receive the net assets of Tosco in proportion to
the respective number of shares held by them. The holders of Common Stock do not
have any preemptive right to subscribe for or purchase any shares of any class
of stock. The outstanding shares of Common Stock are not subject to further call
or redemption and all outstanding shares of Common Stock are validly issued,
fully paid and non-assessable.
Preferred Stock
Tosco is authorized to issue 12 million shares of Preferred Stock. Such
shares may be issued from time to time at the discretion of the Board of
Directors, without stockholder approval. The Board of Directors is authorized to
issue such shares in different series and with respect to each series to
determine the dividend rate, the redemption provisions, voting rights,
conversion provisions, liquidation preferences and such other rights and
privileges not in conflict with Tosco's Articles of Incorporation and any
qualifications, limitations or restrictions on such shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
At December 15, 1996 to the knowledge of Tosco, from Statements on Schedule
13G provided to Tosco, beneficial owners of more than 5% of any class of the
outstanding voting securities of Tosco were as follows:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership* Class
-------------- ------------------- --------------------- ----------
<S> <C> <C> <C>
Common Stock ........... Tiger Management Corporation 5,933,900 12.85%
Panther Partners, L.P. shares (1)
Panther Management Company, L.P.
Julian H. Robertson, Jr.
101 Park Avenue
New York, New York 10178
Common Stock ........... FMR Corp. 5,238,672 11.35%
82 Devonshire Street shares (2)
Boston, Massachusetts 02109
</TABLE>
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* The beneficial owner of such shares reports that it has sole voting and
investment power with respect to such securities, except where otherwise
indicated.
(1) According to a Statement on Schedule 13G filed with the Commission on
February 12, 1996, (i) Tiger Management Corporation, an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940,
reported beneficial ownership of 5,580,500 shares; (ii) Panther Partners,
L.P., an investment company registered under Section 8 of the Investment
Company Act, reported beneficial ownership of 313,400 shares; (iii)
Panther Management Company, L.P., an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940, reported beneficial
ownership of 313,400 shares; and (iv) Julian H. Robertson, Jr. reported
beneficial ownership of 5,933,900 shares. Julian H. Robertson, Jr. is the
ultimate controlling person of Tiger Management Corporation and Panther
Management Company, L.P. Other persons are known to have the right to
receive dividends from, or proceeds from, the sale of such shares. The
interest of one such person, The Jaguar Fund N.V., a Netherlands Antilles
corporation, is more than 5%.
(2) According to a Statement on Schedule 13G filed with the Commission on
December 10, 1996, wholly-owned subsidiaries or affiliates of FMR Corp.
("Fidelity Funds"), including a registered investment advisor, own these
shares. FMR does not have the power to vote or direct the voting of shares
owned by the Fidelity Funds, which power resides with Fidelity Funds'
Board of Trustees.
STOCK OWNERSHIP OF OFFICERS AND DIRECTORS
The following table sets forth the number of shares of Common Stock of
Tosco beneficially owned by each Director, by each of the most highly
compensated executive officers and by all executive officers and Directors as a
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group at December 1, 1996, and the percentage of the outstanding shares of
Common Stock so owned by each Director, executive officer, and such group.
Amount and
nature of
beneficial Percent of
Name ownership Class
---- ------------ ---------
Jefferson F. Allen ............................. 240,349 (1) *
Joseph B. Carr ................................. 24,000 (2) *
Patrick M. de Barros ........................... 240,554 (3) *
Houston I. Flournoy ............................ 24,516 (4) *
Clarence G. Frame .............................. 11,216 (5) *
Edmund A. Hajim ................................ 30,000 (6) *
Joseph P. Ingrassia ............................ 24,500 (7) *
Robert J. Lavinia .............................. 147,500 (8) *
Charles J. Luellen ............................. 25,000 (9) *
Mark R. Mulvoy ................................. 24,000(10) *
Thomas D. O'Malley ............................. 1,589,451(11) 3.60%
Dwight L. Wiggins .............................. 140,000(12) *
All executive officers and Directors
(19 persons, including those listed above) ... 2,987,490(13) 6.60%
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* Represents less than 1% of the outstanding shares of Common Stock.
(1) Consists of 5,349 shares of Common Stock, options to purchase 165,000
shares of Common Stock under the 1989 Stock Incentive Plan (the "1989
Plan"), and options to purchase 70,000 shares of Common Stock under the
1992 Stock Incentive Plan (the "1992 Plan").
(2) Consists of options to purchase 24,000 shares of Common Stock under the
1989 Plan.
(3) Consists of 216,554 shares of Common Stock owned by a Trust of which Mr. de
Barros is a beneficiary, and options to purchase 18,667 and 5,333 shares of
Common Stock under the 1989 Plan and the 1992 Plan, respectively.
(4) Consists of 516 shares of Common Stock and options to purchase 24,000
shares of Common Stock under the 1989 Plan.
(5) Consists of 11,216 shares of Common Stock.
(6) Consists of 6,000 shares of Common Stock and options to purchase 24,000
shares of Common Stock under the 1989 Plan.
(7) Consists of 500 shares of Common Stock and options to purchase 24,000
shares of Common Stock under the 1989 Plan.
(8) Consists of options to purchase 25,000 and 122,500 shares of Common Stock
under the 1989 Plan and the 1992 Plan, respectively.
(9) Consists of 1,000 shares of Common Stock and options to purchase 24,000
shares of Common Stock under the 1989 Plan.
(10) Consists of options to purchase 24,000 shares of Common Stock under the
1992 Plan.
(11) Consists of 957,236 shares of Common Stock, options to purchase 350,000 and
100,000 shares of Common Stock under the 1989 Plan and the 1992 Plan,
respectively, and 9,999 shares of Common Stock owned by Mr. O'Malley's
wife. In addition, the shares listed in the table include 73,865 shares
held by Argus Energy Corporation and 98,351 shares held by Argus
Investments, Inc., of which Mr. O'Malley is the sole shareholder. Mr.
O'Malley disclaims beneficial ownership of the 9,999 shares of Common Stock
owned by his wife.
(12) Consists of 2,500 shares of Common Stock and options to purchase 25,000 and
112,500 shares of Common Stock under the 1989 Plan and the 1992 Plan,
respectively.
(13) Consists of 1,407,657 shares of Common Stock and options to purchase
847,667 and 732,166 shares of Common Stock under the 1989 Plan and the 1992
Plan, respectively.
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INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P. has acted as the independent public accountants of
Tosco since 1977. A representative of Coopers & Lybrand L.L.P. is expected to be
present at the Special Meeting with the opportunity to make a statement if he or
she so desires and to respond to appropriate questions.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Tosco's Annual Report on Form 10-K for the fiscal year ended December 31,
1995, and Quarterly Report on Form 10-Q for the nine months ended September 30,
1996, copies of which accompany this Proxy Statement, are incorporated herein by
reference.
All documents filed by Tosco pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 (the "Exchange Act") subsequent to the
date of this Proxy Statement and prior to the Special Meeting shall be deemed to
be incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for the purposes of this Proxy Statement to the extent
that a statement contained herein or in any other subsequently filed document
which also is incorporated or is deemedto be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Proxy Statement.
Tosco will provide, without charge, to each person to whom a copy of this
Proxy Statement is delivered, upon the written or oral request of such person
and by first class mail or other equally prompt means within one business day of
receipt of such request, a copy of any or all of the documents incorporated
herein by reference (other than exhibits, unless such exhibits are specifically
incorporated herein by reference). Requests should be directed to: Investor
Relations, Tosco Corporation, 72 Cummings Point Road, Stamford, Connecticut
06902, (203) 977-1000.
Tosco is subject to the informational requirements of the Exchange Act and,
in accordance therewith, files reports, proxy or information statements and
other information with the Commission. Such reports, proxy or information
statements, exhibits and other information filed by Tosco with the Commission
can be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth St., N.W., Washington, D.C.
20549, and at the Regional Offices of the Commission at 7 World Trade Center
(13th Floor), New York, New York 10048 and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
materials can be obtained by mail from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and its public reference facilities in New York, New York and
Chicago, Illinois, at prescribed rates. The Commission maintains an Internet web
site that contains reports, proxy and information statements and other
information regarding Issuers who file electronically with the Commission. The
address of that site is http://www.sec.gov. Such reports, proxy or information
statements and other information concerning Tosco can also be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005 and the Pacific Stock Exchange on which exchanges Tosco's Common
Stock is listed.
FINANCIAL INFORMATION
Financial information for Tosco for the fiscal year ended December 31,
1995, is included in Tosco's Annual Report on Form 10-K, a copy of which
accompanies this Proxy Statement. In addition, attached hereto are (a) the
consolidated balance sheets of 76 Products Company and subsidiaries as of
September 30, 1996 and December 31, 1995 and the related statements of
operations, cash flows and parent investment for the nine months ended September
30, 1996 and for the years ended December 31, 1995 and 1994 and (b) pro forma
combined balance sheet of Tosco at September 30, 1996, pro forma combined
statement of income for the nine months ended September 30, 1996 and year ended
December 31, 1995 and actual and pro forma capitalization at September 30, 1996.
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MISCELLANEOUS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting is
that hereinabove set forth. If any other matter or matters are properly brought
before the meeting, or any adjournment thereof, it is the intention of the
persons named in the accompanying form of Proxy to vote the Proxy on such
matters in accordance with their judgment.
WILKES MCCLAVE
Secretary
Dated: January 10, 1997
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TOSCO CORPORATION
PRO FORMA COMBINED FINANCIAL STATEMENTS
(Unaudited)
The following pro forma combined balance sheet of Tosco as of September 30,
1996 gives effect to (i) the December 1996 sale by Tosco Financing Trust, a
Delaware business trust all of the common securities of which are owned by Tosco
(the "Trust"), of 6 million 5 3/4% Convertible Preferred Securities and the
application of the net proceeds therefrom, (ii) the planned issuance of $600
million of unsecured term debt and cash borrowings under a contemplated new
revolving credit agreement (the "New Credit Agreement"), which will expand
Tosco's existing revolving credit agreement (the "Credit Agreement") from $600
million to $1 billion to fund, by January 15, 1997, a required $1 billion
minimum cash escrow account for the Unocal transaction, (iii) the contemplated
issuance of 9.2 million shares of Tosco Common Stock and (iv) the consummation
of the Unocal transaction. The pro forma balance sheet assumes that the
transactions occurred as of the balance sheet date.
The pro forma combined statements of income for the nine months ended
September 30, 1996 and the year ended December 31, 1995 reflect the above
transactions as well as the acquisition of The Circle K Corporation ("Circle
K"). The pro forma combined statements of income give effect to the transactions
and the Circle K acquisition, completed on May 30, 1996, as if they occurred at
the beginning of the periods presented. The statements may not be indicative of
the results that actually would have occurred or the results which may be
obtained in the future. The 1996 pro forma combined statement of income does not
fully reflect the possible improvement in operating contribution or the planned
reduction in operating and administrative costs expected from the Circle K
acquisition. The pro forma combined statements of income also do not reflect the
improvement in operating contribution and the reduction in operating and
administrative costs expected from the Unocal transaction.
The information presented herein should be read in conjunction with the
historical consolidated financial statements of Tosco which are included with
this Proxy Statement.
CAPITALIZATION
The following table sets forth as of September 30, 1996, the actual
unaudited consolidated capitalization of Tosco, and as adjusted to reflect
(i) the sale by the Trust of 6,000,000 Convertible Preferred Securities, the
application of proceeds therefrom to the purchase of Convertible Debentures of
Tosco, and the application of the net proceeds from the Convertible Debentures
to the paydown of cash borrowings under the Credit Agreement and the retirement
of $100 million of First Mortgage Bonds due March 15, 1997, (ii) the
contemplated issuance of $600 million of unsecured debt and cash borrowings
under the New Credit Agreement to fund, by January 15, 1997, a required $1
billion minimum cash escrow account, (iii) the contemplated issuance of 9.2
million shares of Tosco Common Stock, and (iv) the consummation of the Unocal
transaction. The table should be read in conjunction with Tosco's consolidated
financial statements and notes thereto included with the Proxy Statement.
8
<PAGE>
<TABLE>
TOSCO CORPORATION
PRO FORMA COMBINED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
<CAPTION>
September 30, 1996
--------------------------
Actual As Adjusted
---------- -----------
(In Thousands)
<S> <C> <C>
Long-term debt--collateralized:
Mortgage bonds guaranteed on a collateralized basis by the
Bayway Refining Company ................................................... $ 150,000 $ 150,000
Mortgage bonds collateralized by the Avon Refinery .......................... 300,000 200,000
Capital leases .............................................................. 67,656 69,656
Real estate installment purchase ............................................ 55,306 55,306
Other ....................................................................... 5,631 5,631
Long-term debt--uncollateralized:
Revolving credit facility (a) ............................................... 360,000 707,450
7% Notes due 2000 ........................................................... 125,000 125,000
7 5/8% Notes due 2006 ....................................................... 240,000 240,000
% Notes due 2007 ....................................................... 200,000
% Debentures due 2027 .................................................. 300,000
% Debentures due 2047 .................................................. 100,000
---------- ----------
Total debt, including current portion ....................................... 1,303,593 2,153,043
Less current portion ........................................................ (12,766) (12,766)
---------- ----------
Total long-term debt ........................................................ 1,290,827 2,140,277
---------- ----------
Company-obligated mandatorily redeemable convertible preferred securities of
Tosco Financing Trust holding solely 5 3/4% convertible
junior subordinated debentures of Tosco (b) ................................. 300,000
Shareholders' equity:
Common Stock, $.75 par value, 50,000,000 shares authorized, as adjusted
250,000,000 shares; 46,168,861 shares issued, as adjusted 55,368,861
(including treasury shares) ............................................... 34,626 41,526
Capital in excess of par value ................................................. 963,635 1,626,035
Retained earnings .............................................................. 124,098 124,098
Less Common Stock held in treasury, at cost (2,549,041 shares) ................. (73,270) (73,270)
---------- ----------
Total stockholders' equity ............................................... 1,049,089 1,718,389
---------- ----------
Total capitalization ..................................................... $2,339,916 $4,158,666
========== ==========
</TABLE>
- ----------
(a) At September 30, 1996, Tosco's Credit Agreement provided for an extension
of up to $600 million in credit. At that date, Tosco had $360 million of
cash borrowings and outstanding letters of credit of approximately $109
million under the Credit Agreement. Tosco plans to increase cash and credit
availability by $400 million to $1 billion under the New Credit Agreement.
(b) The sole assets of the Trust are 5 3/4% Convertible Debentures of Tosco
due 2006 with a principal amount of $300 million due December 15, 2026.
9
<PAGE>
<TABLE>
TOSCO CORPORATION
PRO FORMA COMBINED BALANCE SHEET
As of September 30, 1996
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
Pro Forma Adjustments
--------------------------------------------------------------------------------
Sale of
Preferred Record
Securities Issue Purchase of
Tosco and Debt Issue Common Unocal Tosco
Historical Payment(a) Debt(b) Stock(c) Assets(d) Pro Forma
---------- --------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Cash, cash equivalents, short-term
investments and deposits ..................... $ 86,882 $ 86,882
Cash held in escrow ............................ $1,000,000 (1,000,000)
Inventories .................................... 686,199 400,000(e) 1,086,199
Other current assets ........................... 351,797 351,797
---------- -------- ---------- ------- ---------- ----------
Total current assets ......................... 1,124,878 1,000,000 (600,000) 1,524,878
Property and equipment ......................... 1,696,693 1,652,000 3,348,693
Intangibles and other long-term assets ......... 807,501 8,750 8,000 824,251
---------- -------- ---------- ------- ---------- ----------
Total assets ................................. $3,629,072 $ 8,750 $1,008,000 $1,052,000 5,697,822
========== ======== ========== ======= ========== ==========
Current liabilities ............................ $ 952,238 $ 7,000(f) $ 959,238
Current maturities of long-term obligations .... 12,766 12,766
---------- -------- ---------- ------- ---------- ----------
965,004 7,000 972,004
Revolver debt .................................. 360,000 (191,250) 408,000 (669,300) 800,000 707,450
Long-term debt, including capitalized leases ... 930,827 (100,000) 600,000 2,000 1,432,827
Environmental cost liabilities ................. 90,680 193,000(f) 283,680
Other liabilities .............................. 233,472 50,000 283,472
Company-obligated mandatorily redeemable
convertible preferred securities of
Tosco Financing Trust holding solely
5 3/4% convertible junior subordinated
debentures of Tosco .......................... 300,000 300,000
Shareholders' equity
Common Stock ................................. 34,626 6,900 41,526
Additional paid in capital ................... 963,635 662,400 1,626,035
Retained earnings ............................ 124,098 124,098
Reductions from capital ...................... (73,270) (73,270)
---------- -------- ---------- ------- ---------- ----------
1,049,089 669,300 1,718,389
---------- -------- ---------- ------- ---------- ----------
Total liabilities and equity ................ $3,629,072 $ 8,750 $1,008,000 $1,052,000 $5,697,822
========== ======== ========== ======= ========== ==========
</TABLE>
- ----------
Pro forma adjustments:
(a) In December 1996, the Trust issued 6,000,000 5 3/4% Convertible Preferred
Securities (liquidation amount of $50 per Convertible Preferred Security)
representing a preferred undivided interest in the assets of the Trust. The
Trust exists for the sole purpose of issuing common securities, all of
which are owned by Tosco, and the Convertible Preferred Securities, the
proceeds of which were invested in 5 3/4% Convertible Junior Subordinated
Debentures (the "Convertible Debentures") of Tosco. The Convertible
Debentures are subordinate and junior in right of payment to all
liabilities of Tosco. The Convertible Preferred Securities and Convertible
Debentures will be convertible into Tosco Common Stock at the rate of
.50633 shares of Tosco Common Stock for each Convertible Preferred Security
or each $50 of Convertible Debentures (equivalent to a conversion price of
$98.75 per share of Tosco Common Stock). The pro forma financial statements
reflect the application of the net proceeds from the Convertible Debentures
to the paydown of cash borrowings under the Credit Agreement and the
payment of $100 million of 9% First Mortgage Bonds due March 15, 1997.
(b) Record, net of estimated costs, (i) the contemplated issuance of $600
million of unsecured term debt, and (ii) cash borrowings of $400 million
under the New Credit Agreement of $1 billion of cash and credit
availability. Under
10
<PAGE>
the terms of the agreement with Unocal, Tosco is required to deposit into
escrow by January 15, 1997, $1.4 billion in value, of which $1.0 billion
must be in cash.
(c) Record planned sale of Tosco Common Stock prior to the consummation of the
Unocal transaction. The pro forma financial statements assume that Tosco
will issue 9,200,000 shares at $75 per share, net of costs of $20.7
million. The average closing price of Tosco Common Stock for the period
November 18 to December 17, 1996 was $76.00 per share.
(d) Record consummation of the Unocal transaction. The allocation of the
purchase price to the assets and liabilities acquired in the Unocal
transaction is based upon a preliminary evaluation. The purchase price
allocation is expected to be finalized by the end of 1997 based upon
appraisals and other evaluations expected to be completed by that date. The
purchase price of the Unocal assets could be increased by up to $250
million in contingent participation payments over the next seven years if
retail market conditions and/or California Air Resources Board (CARB)
gasoline premiums improve.
(e) Value of inventories expected to be on hand at the consummation of the
Unocal transaction. The actual value of inventories to be acquired, based
on volumes and prices at the purchase date, may vary significantly from
this estimated amount.
(f) Under the purchase agreement with Unocal, for a period of 25 years, Unocal
will be responsible for environmental liabilities arising out of or
relating to the period prior to closing, except that Tosco will pay the
first $7 million of such environmental liabilities each year, plus 40% of
any amounts in excess of $7 million per year, with Unocal paying the
remaining 60% each year. The aggregate maximum amount that Tosco may have
to pay in total for 25 years for such environmental liabilities is limited
to $200 million. As the Company has not completed its related environmental
studies, it has determined it to be prudent to accrue the maximum under the
purchase agreement with Unocal.
11
<PAGE>
<TABLE>
TOSCO CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
For the Year Ended December 31, 1995
(In thousands, except per share data)
(Unaudited)
<CAPTION>
Historicals
---------------------- Circle K Unocal
Circle K Pro Forma Pro Forma Historical Pro Forma Pro Forma
Tosco (Note A) Subtotal Adjustment (Note B) Unocal Adjustment (Note C)
---------- ---------- ----------- ------------ ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales ................. $7,284,051 $3,540,531 $10,824,582 ($526,000)(g) $10,298,582 $4,036,200 ($897,700)(i) $13,437,082
Cost of sales and
operating
expenses ............ (7,004,501) (2,747,071) (9,751,572) 526,000(g) (9,813,106) (3,984,100) 897,700(i) (12,882,506)
(587,534)(h) 17,000(ii)
Selling, general and
administrative
expense ............. (95,858) (709,559) (805,417) 587,534 (h) (229,332) (107,200) (336,532)
(11,449)(i)
Interest expense, net . (56,253) (26,547) (82,800) (29,854)(j) (112,941) (300) (77,330)(iii) (191,441)
(287)(k) (870)(iv)
---------- ---------- ---------- --------- ----------- ----------- --------- -----------
(7,156,612) (3,483,177) (10,639,789) 484,410 (10,155,379) (4,091,600) 836,500 (13,410,479)
---------- ---------- ---------- --------- ----------- ----------- --------- -----------
Income (loss) before
income taxes ....... 127,439 57,354 184,793 (41,590) 143,203 (55,400) (61,200) 26,603
(Provision) credit
for income taxes ... (50,381) (23,956) (74,337) 11,906(l) (62,431) 38,000 22,374(v) (2,057)
---------- ---------- ---------- --------- ----------- ----------- --------- -----------
Net income (loss) .... $ 77,058 $ 33,398 $ 110,456 ($ 29,684) $ 80,772 ($ 17,400) ($ 38,826) $ 24,546
========== ========== ========== ========= =========== =========== ========= ===========
Earnings per share
Primary ............. $2.06 $1.84(m) $0.46(vi)
===== ===== =====
Fully diluted ....... $2.04 $1.83(m) $0.46(vi)
===== ===== =====
</TABLE>
12
<PAGE>
<TABLE>
TOSCO CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
For the Nine Months Ended September 30, 1996
(In thousands, except per share data)
(Unaudited)
<CAPTION>
Historicals
---------------------- Circle K Unocal
Circle K Pro Forma Historical Pro Forma
Tosco (Note D) Subtotal Adjustment Pro Forma Unocal Adjustment Pro Forma
---------- ---------- ----------- ------------ ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales ................ $7,160,151 $1,519,542 $8,679,693 ($218,800)(g) $ 8,460,893 $3,629,600 ($734,500)(i) $11,355,993
Cost of sales and
operating
expenses ........... (6,755,105) (1,217,565) (7,972,670) 218,800 (g) (7,963,692) (3,428,900) 734,500 (i) (10,621,092)
(209,822)(h) 37,000(ii)
Selling, general and
administrative
expense ............ (147,218) (263,636) (410,854) 209,822 (h) (205,702) (92,500) (298,202)
(4,670)(i)
Interest expense, net. (61,998) (11,324) (73,322) (12,439)(j) (85,881) (900) (55,719)(iii) (143,165)
(120)(k) (665)(iv)
---------- ---------- ---------- --------- ----------- ----------- --------- -----------
(6,964,321) (1,492,525) (8,456,846) 201,571 (8,255,275) (3,522,300) 715,116 (11,062,459)
---------- ---------- ---------- --------- ----------- ----------- --------- -----------
Income (loss) before
income taxes ....... 195,830 27,017 222,847 (17,229) 205,618 107,300 (19,384) 293,534
Provision for income
taxes .............. (79,733) (11,347) (91,080) 4,961(l) (86,119) (39,600) 4,457(v) (121,262)
---------- ---------- ---------- --------- ----------- ----------- --------- -----------
Net income (loss) .... $ 116,097 $ 15,670 $ 131,767 ($ 12,268) $ 119,499 $ 67,700 ($ 14,927) $ 172,272
========== ========== =========== ========= =========== ========== ========= ===========
Earnings per share
Primary ............ $2.86 $2.72(m) $3.24(vi)
===== ===== =====
Fully diluted ...... $2.84 $2.70(m) $3.22(vi)
===== ===== =====
</TABLE>
- ----------
Circle K pro forma adjustments:
(g) Remove excise taxes of Circle K included in sales and cost of sales for
consistency of presentation.
(h) Allocate Circle K store operating costs and depreciation and amortization
to cost of sales for consistency of presentation.
(i) Record amortization of $593 million of intangibles (primarily trademarks)
acquired in the purchase of Circle K over 40 years (the revised useful
life over which the intangible assets are expected to be realized).
(j) Record interest on $435.436 million additional debt incurred to finance
the Circle K acquisition. The Circle K acquisition was financed by the
issuance of $240 million of 7 5/8% senior unsecured notes due 2006 and
cash borrowings under Tosco's Credit Agreement.
13
<PAGE>
(k) Record amortization of debt financing costs over 10 year term of debt.
(l) Record income taxes on taxable pro forma adjustments at Tosco's current
effective tax rate of 39.5%. No deduction has been taken on amortization
of intangibles which will not be deductible for income tax purposes.
(m) Pro forma earnings per share are based on the number of common and common
equivalent shares that would have been outstanding had the Circle K
acquisition occurred on January 1, 1995.
Unocal pro forma adjustments:
(i) Remove excise taxes of Unocal included in sales and cost of sales for
consistency of presentation.
(ii) Adjust historical depreciation and amortization based on a purchase price
allocation of $1.650 billion.
(iii) Record interest on 6,000,000 5 3/4% Convertible Preferred Securities
(liquidation $50 per share). Record additional interest on $1.00 billion
of additional indebtedness including $600 million of unsecured term debt,
$400 million of borrowings under the New Credit Agreement as adjusted for
repayment of $100 million of 9% Series A First Mortgage Bonds due March
15, 1997.
(iv) Record amortization of debt financing costs over the respective debt
terms.
(v) Record income taxes on pro forma results of Unocal's operations at
Tosco's current effective tax rate of 39.5%.
(vi) Pro forma earnings per share are based on the number of common and common
equivalent shares that would have been outstanding had the transaction
occurred on January 1, 1995.
Note A--The historical statement of income of Circle K is for the year ended
January 31, 1996.
Note B--The pro forma income statement does not reflect the improvement in
operating contribution anticipated from the merger or the possible
reduction in operating and administrative costs expected from the
consolidation of the Seattle, Washington office of Tosco with the
Phoenix, Arizona office of Circle K, net of non-recurring costs of
consolidation.
Note C--The pro forma income statement does not reflect the improvement in
operating contribution and cost reductions anticipated from the Unocal
transaction.
Note D--Tosco consummated the purchase of Circle K on May 30, 1996.
Accordingly, the results of operations of Circle K are included in
Tosco's historical statement of income for the nine months ended
September 30, 1996 from that date. The separately presented historical
results of operations of Circle K, excluding non-recurring charges, are
for the period January 1, 1996 to May 29, 1996.
14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Union Oil Company of California
We have audited the accompanying consolidated balance sheets of 76 Products
Company and subsidiaries (a division of Union Oil Company of California, dba
Unocal) as of September 30, 1996 and December 31, 1995 and the related
consolidated statements of operations, cash flows and parent company investment
for the nine months ended September 30, 1996 and for the years ended December
31, 1995 and 1994. These consolidated financial statements are the
responsibility of the 76 Products Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of 76 Products
Company and subsidiaries as of September 30, 1996 and December 31, 1995, and the
results of their operations and their cash flows for the nine months ended
September 30, 1996 and for the years ended December 31, 1995 and 1994 in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Newport Beach, California
December 11, 1996
15
<PAGE>
<TABLE>
76 PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................. $ 8.0 $ 24.9
Accounts and notes receivable (net) ....................... 288.1 252.6
Inventories ............................................... 254.4 249.3
Other current assets ...................................... 4.6 4.0
-------- --------
Total current assets ................................... 555.1 530.8
Property, plant and equipment at cost ........................ 3,466.9 3,330.2
Less accumulated depreciation and amortization ............... (1,338.5) (1,253.0)
-------- --------
Property, plant and equipment (net) .......................... 2,128.4 2,077.2
Other assets ................................................. 52.4 32.4
-------- --------
Total assets ........................................... $2,735.9 $2,640.4
======== ========
LIABILITIES AND PARENT COMPANY INVESTMENT
Current liabilities:
Trade accounts payable .................................... $ 287.4 $ 327.1
Accrued liabilities ....................................... 10.5 11.7
Taxes payable ............................................. 76.3 69.5
Other current liabilities ................................. 27.0 18.7
-------- --------
Total current liabilities .............................. 401.2 427.0
Long-term debt and capital lease obligations ................. 2.6 2.7
Accrued environmental and other deferred liabilities ......... 21.0 26.3
Deferred income taxes ........................................ 166.7 144.5
-------- --------
Total liabilities ...................................... 591.5 600.5
Parent company investment
Excess of assets over liabilities ......................... 2,144.4 2,039.9
-------- --------
Total liabilities and parent company investment ........ $2,735.9 $2,640.4
======== ========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
16
<PAGE>
<TABLE>
76 PRODUCTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Millions)
<CAPTION>
Nine Months
Ended Years Ended December 31,
September 30, -----------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
REVENUES
Sales and services--unrelated parties* .......................... $3,615.5 $4,014.9 $3,668.5
Sales and services--related parties ............................. 14.1 21.3 11.9
-------- -------- --------
Total revenues ............................................... 3,629.6 4,036.2 3,680.4
COSTS AND EXPENSES
Cost of products sold and operating expenses .................... 2,042.5 2,267.9 1,865.4
Cost of products purchased from related parties ................. 369.3 462.1 425.0
Selling, administrative and general expenses .................... 245.7 310.0 346.0
Excise, property and other operating taxes* ..................... 757.0 940.9 931.4
Depreciation and amortization ................................... 106.9 110.4 114.2
Interest expense ................................................ 0.9 0.3 0.3
-------- -------- --------
Income (loss) before provision (benefit) for income taxes .......... 107.3 (55.4) (1.9)
Provision (benefit) for income taxes ............................... 39.6 (38.0) (0.2)
-------- -------- --------
NET INCOME (LOSS) ............................................ $ 67.7 $ (17.4) $ (1.7)
======== ======== ========
- --------------
* Includes consumer excise taxes of ................................ $ 734.5 $ 897.7 $ 892.9
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
17
<PAGE>
76 PRODUCTS COMPANY
CONSOLIDATED STATEMENT OF PARENT COMPANY INVESTMENT
(Dollars in Millions)
Excess of assets over liabilities at December 31, 1993 ........... $1,618.1
Net loss for the year ended December 31, 1994 .................. (1.7)
Net changes in parent company advances ......................... 228.4
--------
Excess of assets over liabilities at December 31, 1994 ........... 1,844.8
Net loss for the year ended December 31, 1995 .................. (17.4)
Net change in parent company advances .......................... 212.5
--------
Excess of assets over liabilities at December 31, 1995 ........... 2,039.9
Net income for the nine months ended September 30, 1996 ........ 67.7
Net change in parent company advances .......................... 36.8
--------
Excess of assets over liabilities at September 30, 1996 .......... $2,144.4
========
The accompanying notes are an integral part of these consolidated
financial statements.
18
<PAGE>
<TABLE>
76 PRODUCTS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
<CAPTION>
Nine Months
Ended Years Ended December 31,
September 30, ------------------------
1996 1995 1994
------------ -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) .................................................... $ 67.7 $ (17.4) $ (1.7)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization .................................... 106.9 110.4 114.2
Gain on sale of assets (pre-tax) ................................. (5.0) (2.2) (0.9)
Expense provisions (Uninsured loss, environmental
and litigation) ................................................ 28.8 31.8 33.5
Provision (benefit) for deferred income taxes .................... 22.2 (13.0) (6.4)
Equity in earnings of affiliates, net of dividends ............... 0.7 1.1 (0.1)
Provision for doubtful accounts .................................. 2.8 0.3 (1.6)
Changes in operating assets and liabilities:
Decrease (increase) in accounts and notes receivable .............. (38.3) (118.9) (45.4)
Decrease (increase) in inventories ................................ (5.0) (16.0) (31.0)
Decrease (increase) in other current assets ....................... (0.6) 0.6 4.9
Decrease (increase) in other assets ............................... (19.0) 6.0 (0.1)
Increase (decrease) in trade accounts payable ..................... (39.7) 105.9 58.2
Increase (decrease) in accrued liabilities ........................ (1.2) 0.3 0.9
Increase (decrease) in taxes payable .............................. 6.7 9.6 (4.9)
Increase (decrease) in accrued environmental/other
deferred liabilities ............................................ (25.7) (39.1) (12.8)
------ ------ -------
Net cash provided by operating activities ............................ 101.3 59.4 106.8
------ ------ -------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures .............................................. (157.3) (404.4) (366.8)
Proceeds from sale of assets ...................................... 6.8 2.6 4.0
(Increase) decrease in investment in joint venture affiliates ..... (1.8) (0.5) 9.7
------ ------ -------
Net cash used in investing activities ................................ (152.3) (402.3) (353.1)
------ ------ -------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in other long-term liabilities ................ -- (0.5) --
Net change in parent company advances ............................. 34.1 342.1 261.3
------ ------ -------
Net cash provided by financing activities ............................ 34.1 341.6 261.3
------ ------ -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ................. (16.9) (1.3) 15.0
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ..................... 24.9 26.2 11.2
------ ------ -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ........................... $ 8.0 $ 24.9 $ 26.2
====== ====== =======
- ---------------------------------------------------------------------------------------------------------------
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest ........................................................ $ 0.9 $ 0.3 $ 0.3
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
19
<PAGE>
76 PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions)
NOTE 1--BUSINESS OPERATIONS AND BASIS OF PRESENTATION
76 Products Company and its consolidated subsidiaries (76 Products or the
Company) operate as a business division of Union Oil Company of California (dba
Unocal) which is also referred to as the parent company. This division is
engaged primarily in the manufacture, purchase, transportation and marketing of
petroleum products in the western United States. Operating assets primarily
consist of three refineries in California, service stations, various terminals,
bulk plants, pipelines, tankers and trucks.
On November 17, 1996, Unocal signed a letter of intent to sell its
refining, marketing and transportation assets to Tosco Corporation. A definitive
agreement has not yet been reached by the parties. The accompanying consolidated
financial statements do not include any adjustments that might result from the
proposed sale.
The accompanying consolidated financial statements are presented as if 76
Products had existed as an entity separate from Unocal, during the periods
presented. They include expenses, net of recoveries, attributable to the Company
that were not recorded in the accounts of the business division. In addition,
they include allocations and estimates of direct and indirect corporate
administrative costs attributable to the Company. The methods by which such
amounts are attributed or allocated are deemed reasonable by management.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation. The consolidated financial statements of the
Company include the accounts of subsidiaries more than 50 percent owned.
Investments in affiliates owned 50 percent or less are accounted for by the
equity method. Under the equity method, the investments are stated at cost plus
the Company's equity in undistributed earnings after acquisition. Income taxes
estimated to be payable when earnings are distributed are included in deferred
income taxes.
Use of Estimates. The consolidated financial statements are prepared in
conformity with generally accepted accounting principles, which require
management to make estimates and assumptions that affect the amounts of assets
and liabilities and the disclosures of contingent liabilities as of the
financial statement date and the amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents. The Company participates in Unocal's centralized
funding and cash management system. Under this system, the Company utilizes
Unocal's banks for cash deposits and withdrawals. Cash equivalents consist of
highly liquid investments, such as time deposits and commercial paper issued by
Unocal. At times, bank balances may be in excess of the federally insured limit.
Accounts Receivable and Credit Risk. The Company grants credit terms in the
normal course of business to its credit card customers, service station dealers,
airlines and other oil companies. As part of its ongoing control procedures, the
Company monitors the credit worthiness of its customers. The Company requires
collateral from service station dealers to support credit sales. An estimated
provision for returns and credit losses has been provided for in the
consolidated financial statements. There were no significant concentrations of
credit risk at September 30, 1996 and December 31, 1995.
Inventories. Crude oil and refined product inventories are valued at the
lower of cost or market. Cost is determined on the last-in, first-out (LIFO)
inventory method. Materials and supplies are valued at cost, not in excess of
market value.
Property, Plant and Equipment. Property, plant and equipment are stated at
cost. Depreciation and amortization are generally provided using the
straight-line method based on estimated useful lives ranging from 20-30 years
for refinery facilities and from 3-30 years for all other property, plant and
equipment. Replacements and major improvements are capitalized. Expenditures for
maintenance and repairs, including those for refinery turnarounds, are expensed.
Upon retirement of property, plant and equipment, remaining book values are
charged to depreciation expense. Gains or losses on sales of properties are
included in current income.
20
<PAGE>
76 PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions)
Impairment. A long-lived asset is reviewed for impairment whenever events
or changes in circumstances indicate that the carrying value of the asset may
not be recoverable. Impairment charges are made for the write-down of long-lived
assets when it is determined that the carrying values of the assets may not be
recoverable.
Income Taxes. The Company's results of operations are included in the
consolidated U.S. federal and state income tax returns of Unocal. Income taxes
are computed on a separate-return basis using the liability method as prescribed
in Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes." Any resulting current tax liability or refund is settled with
Unocal through the parent company's investment in 76 Products on a current
basis. Under the liability method, the amount of deferred tax liabilities or
assets at the end of each period is determined using the tax rate expected to be
in effect when taxes are actually paid or recovered. Deferred income taxes are
provided for the estimated income tax effect of temporary differences between
financial reporting and tax bases in assets and liabilities. Deferred tax assets
are also provided for certain tax credit carryforwards. A valuation allowance to
reduce deferred tax assets is established, if appropriate.
For purposes of these separate consolidated financial statements, the
stand-alone tax provision has been reduced by California business tax credits,
which would be utilized in the consolidated return, even where such credits
could not be used by the Company on a separate-return basis.
Environmental Expenditures. Environmental expenditures that create future
benefits or contribute to future revenue generation are capitalized.
Expenditures that relate to existing conditions caused by past operationsare
expensed.
Liabilities related to environmental assessments and future remediation
costs are recorded when such liabilities are probable and the amounts can be
reasonably estimated. The Company considers a site to present a probable
liability when an investigation has identified environmental remediation
requirements for which the Company is responsible. Other than for assessments,
the timing of accruing for remediation costs generally coincides with the
Company's completion of investigation or feasibility work and the recommendation
of remedy or commitment toan appropriate plan of action. Environmental
liabilities are not discounted or reduced by possible recoveries from third
parties.
Financial Instruments. The Company has only limited involvement with
derivative financial instruments and does not use them for trading purposes.
Gains and losses arising from commodity futures contracts are deferred and
included in the basis of the underlying transactions.
NOTE 3--RELATED PARTY TRANSACTIONS
For purposes of these separate consolidated financial statements, payables
and receivables related to transactions between 76 Products and Unocal, as well
as liabilities and refunds related to income taxes (See Note 2), are included as
a component of parent company investment. Non-cash transfers of properties
between 76 Products and Unocal are offset to the parent company investment
account on the consolidated balance sheets.
NOTE 4--WRITE-DOWN OF ASSETS
During 1996, the Company wrote off $4.9 for costs related to its Pacific
Pipeline investment and $0.7 related to terminal operations. During 1994, the
Company wrote off $3.7 for certain pipeline related assets and $7.0 for costs
related to the reformulated fuels program at the Company's Los Angeles refinery
due to project modifications.
21
<PAGE>
76 PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions)
NOTE 5--EXCISE, PROPERTY AND OTHER OPERATING TAXES
Taxes other than income taxes consist of the following:
Nine Months Years Ended
Ended December 31,
September 30, ------------------
1996 1995 1994
------ ------ ------
Consumer excise taxes ........................ $734.5 $897.7 $892.9
Real and personal property taxes ............. 18.5 28.4 23.9
Other taxes and duties ....................... 4.0 14.8 14.6
------ ------ ------
Total ...................................... $757.0 $940.9 $931.4
====== ====== ======
NOTE 6--INCOME TAXES
The provision (benefit) for income taxes consists of the following:
Nine Months Years Ended
Ended December 31,
September 30, ------------------
1996 1995 1994
------ ------ ------
Current
Federal .................................... $ 37.6 $(23.0) $ 6.2
State ...................................... (20.2) (2.0) --
------ ------ ------
Total .................................... 17.4 (25.0) 6.2
------ ------ ------
Deferred
Federal .................................... (0.6) 14.3 (6.4)
State (a) .................................. 22.8 (27.3) --
------ ------ ------
Total .................................... 22.2 (13.0) (6.4)
------ ------ ------
Total provision (benefit) for income taxes ... $ 39.6 $(38.0) $ (0.2)
====== ====== ======
- ----------
(a) 1995 includes state business tax credits of $28.0.
The following table is a reconciliation of income taxes at the federal
statutory rates to income taxes as reported in the consolidated statements of
operations
Nine Months Years Ended
Ended December 31,
September 30, ------------------
1996 1995 1994
------ ------ ------
Federal statutory rate ....................... 35% 35% 35%
Provision (benefit) for income taxes
on book income at statutory rate ........... $ 37.6 $(19.4) $ (0.7)
California business tax credits,
net of federal tax effect .................. -- (18.2) --
Other ........................................ 2.0 (0.4) 0.5
------ ------ ------
$ 39.6 $(38.0) $ (0.2)
====== ====== ======
22
<PAGE>
76 PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions)
The Company's net deferred income tax assets (liabilities) consist of the
following:
September 30, December 31,
1996 1995
------------ ------------
Deferred tax assets (liabilities)
Properties .................................. $(175.8) $(168.7)
Inventories ................................. (12.0) (12.0)
Other deferred tax liabilities .............. (3.9) (4.0)
Other deferred tax assets ................... 25.0 40.2
------- -------
Total .................................... $(166.7) $(144.5)
======= =======
NOTE 7--ACCOUNTS AND NOTES RECEIVABLE
Accounts and notes receivable consist of the following:
September 30, December 31,
1996 1995
------------ ------------
Trade accounts receivable (a) .................. $299.3 $251.8
Notes receivable ............................... 1.7 10.9
------ ------
Total receivables ........................ 301.0 262.7
Less allowance for doubtful accounts ........... (12.9) (10.1)
------ ------
Net ...................................... $288.1 $252.6
====== ======
- ----------
(a) Excludes $178.3 of trade accounts receivable that were securitized
by Unocal.
On December 15, 1995 Unocal entered into an agreement to sell, on a
revolving basis, an undivided interest in a defined pool of Unocal's trade
receivables. 76 Products' portion of the defined pool is $178.3. As collections
reduce the amount of receivables included in the pool, Unocal sells new
receivables to bring the amount sold up to $178.3. Under the terms of the
agreement, Unocal retains the risk of credit loss and the collection and
administrative responsibilities for the receivables sold. The receivable amounts
reported in the accompanying consolidated balance sheets are net of receivables
sold.
NOTE 8--INVENTORIES
Inventories consist of the following:
September 30, December 31,
1996 1995
------------ ------------
Crude oil and other feedstocks ................. $ 41.8 $ 40.1
Refined products ............................... 175.1 171.7
Materials and supplies ......................... 33.5 34.2
Other .......................................... 4.0 3.3
------ ------
Total .................................... $254.4 $249.3
====== ======
The current replacement cost of inventories exceeded the LIFO inventory
value included above by $166.9 and $126.8 at September 30, 1996 and December 31,
1995, respectively.
23
<PAGE>
76 PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions)
NOTE 9--PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
September 30, December 31,
1996 1995
------------ ------------
Refining ......................................... $ 2,261.7 $ 2,197.0
Marketing ........................................ 649.7 605.1
Supply & Transportation .......................... 509.0 487.4
Other ............................................ 46.5 40.7
--------- ---------
3,466.9 3,330.2
Less accumulated depreciation and amortization ... (1,338.5) (1,253.0)
--------- ---------
Net .......................................... $ 2,128.4 $ 2,077.2
========= =========
NOTE 10--INVESTMENTS IN AFFILIATES
The Company's investments in joint venture affiliates are $22.7 and $21.6
at September 30, 1996 and December 31, 1995, respectively, and are classified as
other assets on the accompanying consolidated balance sheets. The net earnings
related to these investments are included in sales and services-related parties
on the accompanying consolidated statements of operations in the amounts of
$1.6, $2.4, and $3.5 for the periods ended September 30, 1996, December 31,
1995, and December 31, 1994, respectively.
NOTE 11--FINANCIAL INSTRUMENTS
The Company uses commodity futures contracts with maturities of one year or
less to hedge the impact of fluctuations in prices of crude oil and refined
products. Realized and unrealized changes in the market value of futures
contracts are deferred until the hedged transaction is recognized. At September
30, 1996 there were no open futures contracts. At December 31, 1995, contracts
covering 75 thousand barrels of crude oil and 4.2 million gallons of heating oil
with a notional amount of $4.0 were outstanding. The fair values of the
contracts, based on quoted market prices, approximate the notional amount.
NOTE 12--COMMITMENTS
The Company leases service stations, office space and other assets under
operating leases with terms expiring at various dates through the year 2053.
Certain leases contain renewal options, escalation clauses and require the
Company to pay property taxes, insurance and maintenance costs. Certain service
station leases provide for the payment of incremental rentals, in addition to
any established minimums, contingent upon the achievement of specified levels of
sales volumes.
Future minimum rental payments for operating leases, including estimated
amounts for property taxes and maintenance costs under such leases, having
initial or remaining noncancelable lease terms in excess of one year are as
follows:
1996 (4th Qtr) ................................. $ 5.3
1997 ........................................... 21.5
1998 ........................................... 19.6
1999 ........................................... 18.0
2000 ........................................... 15.8
2001 ........................................... 12.9
Balance ........................................ 50.1
------
$143.2
======
24
<PAGE>
76 PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions)
Net operating rental expense included in consolidated earnings is as
follows:
Years Ended
Ended December 31,
September 30, -------------------
1996 1995 1994
------------- ------ ------
Fixed rentals .......................... $ 19.5 $ 25.1 $ 30.4
Contingent rentals (based primarily
on sales and usage) .................. 7.0 9.7 10.9
Less sublease rental income ............ (12.8) (18.7) (18.1)
------ ------ ------
Net expense ........................ $ 13.7 $ 16.1 $ 23.2
====== ====== ======
Unocal has guaranteed certain obligations of the Company's service station
operators amounting to $7.8 at September 30, 1996. Also, the Company purchases
crude oil from a number of suppliers. During 1996, Unocal sold certain oil
producing properties in California to another company. In connection with that
sale, the Company entered into a purchase agreement to purchase the crude oil
produced by such properties with various expiration dates through December 31,
1998. During the nine months ended September 30, 1996, such purchases accounted
for approximately 12% of total crude purchases. In addition, the Company entered
into a one year crude purchase contract with another entity effective November
1, 1996 through October 31, 1997, which is expected to approximate 10% of
futurecrude purchases.
NOTE 13--EMPLOYEE BENEFITS EXPENSES
76 Products' employees are included in the various employee benefit plans
of Unocal. These plans include the Unocal Retirement Plan, employee and retiree
medical, dental and life insurance plans, 401(k) and other such benefits. For
the purposes of these separate consolidated financial statements, 76 Products
Company is considered to be participating in multiemployer benefit plans.
76 Products' allocated share of employee benefit expenses is $35.2, $46.8
and $46.0 for the nine months ended September 30, 1996 and for the years ended
December 31, 1995 and 1994, respectively. No charges have been made to 76
Products by Unocal for the qualified Unocal Retirement Plan as the plan is in an
overfunded position for the periods stated above.
NOTE 14--ACCRUED ENVIRONMENTAL LIABILITIES
At September 30, 1996 and December 31, 1995, the Company had accrued $40.4
and $44.1, respectively, for estimated future environmental liabilities, of
which $22.4 and $18.7 were included in other current liabilities. The accrued
environmental liabilities on the accompanying consolidated balance sheet
included $32.9 for the remediation of retail marketing sites as of September 30,
1996. Some of the remediation is performed as a result of the Company's programs
to replace underground storage tank systems and upgrade its service stations.
The Company estimates it could incur additional remediation costs for similar
work aggregating approximately $17.6.
NOTE 15--CONTINGENT LIABILITIES
The Company has certain contingent liabilities with respect to material
existing or potential claims, lawsuits and other proceedings, including those
involving environmental, tax and other matters, certain of which are discussed
more specifically below. The Company accrues liabilities when it is probable
that future costs will be incurred and such costs can be reasonably estimated.
Such accruals are based on developments to date, the Company's estimates of the
outcomes of these matters and its experience in contesting, litigating and
settling other matters. As the scope of the liabilities becomes better defined,
there will be changes in the estimates of future costs, which could have a
material effect on the Company's future results of operations and financial
condition or liquidity.
25
<PAGE>
76 PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions)
Environmental Matters. The Company is subject to loss contingencies
pursuant to federal, state and local environmental laws and regulations. These
include existing and possible future obligations to investigate the effects of
the release or disposal of certain chemical and mineral substances at various
sites; to remediate or restore these sites; to compensate others for damage to
property and natural resources, for remediation and restoration costs and for
personal injuries; and to pay civil penalties and, in some cases, criminal
penalties and punitive damages. These obligations relate to sites owned by the
Company or others and associated with past and present operations. Liabilities
are accrued when it is probable that future costs will be incurred and such
costs can be reasonably estimated. However, in many cases, investigations are
not yet at a stage where the Company is able to determine whether it is liable
or, if liability is probable, to quantify the liability or estimate a range of
possible exposure. In such cases, the amount of the Company's liabilities is
indeterminable due to the potentially large number of claimants for any given
site or exposure, the unknown magnitude of possible contamination, the imprecise
and conflicting engineering evaluations and estimates of proper cleanup methods
and costs, the unknown timing and extent of the corrective actions that may be
required, the uncertainty attendant to the possible award of punitive damages,
the recent judicial recognition of new causes of action, and the present state
of the law. As discussed in Note 14, the Company has accrued $40.4 and $44.1 for
estimated future liabilities at September 30, 1996 and December 31, 1995,
respectively.
Between August 22 and September 6, 1994, a chemical known as "Catacarb" was
released into the environment at the Company's San Francisco Refinery near
Rodeo, California. Persons in the surrounding area have claimed that they were
exposed to the chemical in varying degrees. As a result, lawsuits have been
filed by or on behalf of all persons, alleged to be approximately eight
thousand, claiming that they or their property were adversely affected by the
releases. Unocal has adequately provided in its accounts for the Catacarb
litigation. Such amounts are not included in 76 Product's separate consolidated
financial statements.
Other Matters. The Company also has certain other contingent liabilities
with respect to litigation, claims and contractual agreements arising in the
ordinary course of business. Although these contingencies could result in
expenses or judgments that, if aggregated and assumed to occur within a single
fiscal year, could be material to the Company's results of operations, the
likelihood of such occurrence is considered remote. On the basis of management's
best assessment of the ultimate amount and timing of these events, such expenses
or judgments are not expected to have a material adverse effect on the Company's
consolidated financial condition or liquidity.
NOTE 16--FUTURE ACCOUNTING CHANGE
The Company's key employees receive certain stock-based compensation under
Unocal's Long-Term Incentive Plans of 1991 and 1985. The Financial Accounting
Standards Board has issued SFAS No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 is effective for 1996 financial statements. Under
the new standard, companies must either expense the value of stock-based
compensation or disclose in a footnote what the earnings and earnings per share
would be had the value been expensed.
The Company has adopted the disclosure method and the effect on earnings is
immaterial.
26
<PAGE>
TOSCO CORPORATION
P PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
R FEBRUARY 12, 1997
O
X THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
Y TOSCO CORPORATION
The undersigned stockholder of Tosco Corporation, a Nevada corporation,
revoking any previous proxies for its shares, hereby appoints Thomas D.
O'Malley, Jefferson F. Allen and Wilkes McClave III, and each of them, the true
and lawful attorneys-in-fact and proxies of the undersigned, each having full
power of substitution, with respect to all shares of common stock which the
undersigned is entitled to vote at the Special Meeting of Stockholders of Tosco
Corporation to be held on Februarty 12, 1997, and at any adjournments thereof,
on all matters set forth in the Notice of Special Meeting of Stockholders and
the related Proxy Statement.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
| SEE REVERSE |
| SIDE |
- --------------------------------------------------------------------------------
DETACH HERE
Please mark
[X] votes as in
this example.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFIC INSTRUCTIONS SET
FORTH BELOW. IN THE ABSENCE OF SUCH INSTRUCTIONS, THIS PROXY WILL BE VOTED
FOR APPROVAL OF THE AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
FOR AGAINST ABSTAIN
1. Approval of the amendment to the Articles of
Incorporation of Tosco increasing the number [ ] [ ] [ ]
of authorized shares of Common Stock of Tosco.
MARK HERE FOR
ADDRESS CHANGE [ ]
AND NOTE AT LEFT
The undersigned hereby acknowledges receipt of the
Notice of Special Meeting of Stockholders and the
related Proxy Statement.
Please date and signed below exactly as your name
or names appear hereon. Joint owners shall each
sign personally. Corporate proxies should be
signed in full corporate name by an authorized
officer and attested. Persons signing in a
fiduciary capacity should indicate their full
name, in such capacity.
Signature ______________________________ Date __________
Signature ______________________________ Date __________
