<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
(AMENDMENT NO. 2)
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
PENNZOIL COMPANY
(Name of Subject Company)
PENNZOIL COMPANY
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.83 1/3 PER SHARE
(including the associated Preferred Stock Purchase Rights)
(Title of Class of Securities)
709903 10 8
(CUSIP Number of Class of Securities)
LINDA F. CONDIT
CORPORATE SECRETARY
PENNZOIL COMPANY
PENNZOIL PLACE, P.O. BOX 2967
HOUSTON, TEXAS 77252-2967
(713) 546-8910
(Name, address and telephone number of person authorized
to receive notice and communications on behalf of the person(s) filing
statement)
Copies To:
<TABLE>
<S> <C>
Moulton Goodrum, Jr. Charles F. Richards, Jr.
Baker & Botts, L.L.P. Richards, Layton & Finger
One Shell Plaza One Rodney Square
Houston, Texas 77002-4995 P.O. Box 551
(713) 229-1234 Wilmington, Delaware 19899-0551
(302) 658-6541
</TABLE>
<PAGE> 2
This Amendment No 2 (this "Amendment") amends and supplements the
Solicitation/ Recommendation Statement on Schedule 14D-9, as amended, originally
filed on July 1, 1997 by Pennzoil Company, a Delaware corporation (the
"Company"), relating to a tender offer commenced by Resources Newco, Inc., a
wholly owned subsidiary of Union Pacific Resources Group Inc. on June 23, 1997.
All capitalized terms used in this Amendment without definition have the
meanings attributed to them in the Schedule 14D-9.
The items of the Schedule 14D-9 set forth below are hereby amended by
adding the following:
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
18 Bylaws of the Company, as amended through July 1, 1997
(corrected).
31 Answer filed by UPR and Newco to the Complaint filed by the
Company (dated July 2, 1997, United States District Court
for the District of Delaware).
</TABLE>
<PAGE> 3
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
PENNZOIL COMPANY
Dated: July 7, 1997 By: /s/ James L. Pate
James L. Pate
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
18 Bylaws of the Company, as amended through July 1, 1997
(corrected).
31 Answer filed by UPR and Newco to the Complaint filed by the
Company (dated July 2, 1997, United States District Court
for the District of Delaware).
<PAGE> 1
EXHIBIT 18
PENNZOIL COMPANY
BY-LAWS
(AS AMENDED)
ARTICLE I.
MEETINGS OF SHAREHOLDERS
SECTION 1. The annual meeting of the shareholders of this
Corporation shall be held on the fourth Thursday of April in each year, at ten
o'clock A.M., and on any subsequent day or days to which such meeting may be
adjourned, for the purposes of electing directors and of transacting such other
business as may properly come before the meeting. The Board of Directors shall
designate the place for the holding of such meeting, and at least ten days'
notice shall be given to the shareholders of the place so fixed. If the day
designated herein is a legal holiday, the annual meeting shall be held on the
first succeeding day which is not a legal holiday. If for any reason the
annual meeting shall not be held on the day designated herein, the Board of
Directors shall cause the annual meeting to be held as soon thereafter as may
be convenient.
SECTION 2. Special meetings of the shareholders may be called at
any time by the Board of Directors, the Chairman of the Board, the Executive
Committee, the Chairman of the Executive Committee or the President. Upon
written request of any person or persons who have duly called a special
meeting, it shall be the duty of the Secretary of the Corporation to fix the
date of the meeting to be held not less than ten nor more than sixty days after
the receipt of the request and to give due notice thereof. If the Secretary
shall neglect or refuse to fix the date of the meeting and give notice thereof,
the person or persons calling the meeting may do so.
SECTION 3. Every special meeting of the shareholders shall be held
at such place within or without the State of Delaware as the Board of Directors
may designate, or, in the absence of such designation, at the registered office
of the Corporation in the State of Delaware.
SECTION 4. Written notice of every meeting of the shareholders
shall be given by the Secretary of the Corporation to each shareholder of
record entitled to vote at the meeting, by placing such notice in the mail at
least ten days, but not more than sixty days, prior to the day named for the
meeting addressed to each shareholder at his address appearing on the books of
the Corporation or supplied by him to the Corporation for the purpose of
notice.
SECTION 5. The Board of Directors may fix a date, not less than
ten nor more than sixty days preceding the date of any meeting of shareholders,
as a record date for the determination of shareholders entitled to notice of,
or to vote at, any such meeting. The Board of Directors shall not close the
books of the Corporation against transfers of shares during the whole or any
part of such period.
SECTION 6. The notice of every meeting of the shareholders may be
accompanied by a form of proxy approved by the Board of Directors in favor of
such person or persons as the Board of Directors may select.
SECTION 7. A majority of the outstanding shares of stock of the
Corporation entitled to vote, present in person or represented by proxy, shall
constitute a quorum at any meeting of the shareholders, and the shareholders
present at any duly convened meeting may continue to do business until
adjournment notwithstanding any withdrawal from the meeting of holders of
shares counted in determining the existence of a quorum. Directors shall be
elected by a plurality of the votes cast in the election. For all matters as
to which no other voting requirement is specified by the General Corporation
Law of the State of Delaware (the "General Corporation Law"), the Restated
Certificate of Incorporation of the Corporation, as amended (the "Certificate
of Incorporation") or these By-laws, the affirmative vote required for
shareholder action shall be that of a majority of the shares present in person
or represented by proxy at the meeting (as counted for purposes of determining
the existence of a quorum at the meeting). In the case of a matter submitted
for a vote of the shareholders as to which a shareholder approval requirement
is applicable under the
<PAGE> 2
shareholder approval policy of the New York Stock Exchange, the requirements of
Rule 16b-3 under the Securities Exchange Act of 1934 or any provision of the
Internal Revenue Code, in each case for which no higher voting requirement is
specified by the General Corporation Law, the Certificate of Incorporation or
these By-laws, the vote required for approval shall be the requisite vote
specified in such shareholder approval policy, Rule 16b-3 or Internal Revenue
Code provision, as the case may be (or the highest such requirement if more
than one is applicable). For the approval of the appointment of independent
public accountants (if submitted for a vote of the shareholders), the vote
required for approval shall be a majority of the votes cast on the matter.
SECTION 8. Any meeting of the shareholders may be adjourned from
time to time, without notice other than by announcement at the meeting at which
such adjournment is taken, and at any such adjourned meeting at which a quorum
shall be present any action may be taken that could have been taken at the
meeting originally called; provided that if the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting.
SECTION 9. Subject to such rights of the holders of Preferred
Stock or Preference Common Stock or any series thereof as shall be prescribed
in the Certificate of Incorporation or in the resolutions of the Board of
Directors providing for the issuance of any such series, only persons who are
nominated in accordance with the procedures set forth in this Section 9 shall
be eligible for election as, and to serve as, directors. Nominations of
persons for election to the Board of Directors may be made at a meeting of
shareholders at which directors are to be elected (a) by or at the direction of
the Board of Directors (or any duly authorized committee thereof) or (b) by any
shareholder of the Corporation (i) who is a shareholder of record on the date
of the giving of the notice provided for in this Section 9 and on the record
date for the determination of shareholders entitled to vote at such annual
meeting and (ii) who complies with the requirements of this Section 9. In
addition to any other applicable requirements, nominations, other than those
made by or at the direction of the Board of Directors (or any duly authorized
committee thereof) shall be preceded by timely notice thereof in proper written
form to the Secretary of the Corporation.
To be timely, a shareholder's notice must be delivered to, or
mailed and received at, the principal executive offices of the Corporation not
less than 90 days nor more than 120 days prior to the anniversary date of the
immediately preceding annual meeting of shareholders; provided, however, that
in the event that the annual meeting is called for a date that is not within 30
days before or after such anniversary date, notice by the shareholder, in order
to be timely, must be so received not later than the close of business on the
tenth day following the day on which such notice of the date of the annual
meeting was mailed or public disclosure of the date of the annual meeting was
made, whichever first occurs. In no event shall the public disclosure of an
adjournment of an annual meeting commence a new time period for the giving of a
shareholder's notice as described above.
To be in proper written form, a shareholder's notice to the
Secretary must set forth (a) as to each person whom the shareholder proposes to
nominate for election as a director (i) the name, age, business address and
residence address of such person, (ii) the principal occupation or employment
of such person, (iii) the class or series and number of shares of capital stock
of the Corporation which are owned beneficially or of record by such person and
(iv) any other information relating to such person that would be required to
be disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
shareholder giving the notice (i) the name and record address of such
shareholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such shareholder,
(iii) a description of all arrangements or understandings between such
shareholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by
such shareholder, (iv) a representation that such shareholder intends to appear
in person or by proxy at the meeting to nominate the persons named in its
notice and (v) any other information relating to such shareholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of the directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
<PAGE> 3
promulgated thereunder. Such notice must be accompanied by a written consent
of each proposed nominee to be named as a nominee and to serve as a director if
elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in
this Section 9. If the Chairman of the meeting determines that a nomination
was not made in accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the nomination was defective and such defective
nomination shall be disregarded.
Notwithstanding anything in the second paragraph of this
Section 9 to the contrary, in the event that the number of directors to be
elected to the Board of Directors of the Corporation is increased and there is
no public disclosure by the Corporation naming all of the nominees for director
or specifying the size of the increased Board of Directors at least 100 days
prior to the first anniversary of the preceding year's annual meeting, a
shareholder's notice required by this by-law shall also be considered timely,
but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than the close of business on the 10th day
following the day on which such public disclosure is first made by the
Corporation.
For purposes of this Section 9 and Section 10 of these by-laws,
"public disclosure" shall mean disclosure in a press release reported by the
Dow Jones News Service, Associated Press, PR Newswire, Bloomberg or comparable
national news service or in a document publicly filed by the Corporation with
the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of
the Exchange Act.
SECTION 10. No business may be transacted at an annual meeting of
shareholders, other than business that is either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board
of Directors (or any duly authorized committee thereof), (b) otherwise properly
brought before the annual meeting by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (c) otherwise properly
brought before the annual meeting by any shareholder of the Corporation (i) who
is a shareholder of record on the date of the giving of the notice provided for
in this Section 10 and on the record date for the determination of shareholders
entitled to vote at such annual meeting and (ii) who complies with the notice
procedures set forth in this Section 10. In addition to any other applicable
requirements, for business to be properly brought before an annual meeting by a
shareholder, such shareholder must have given timely notice thereof in proper
written form to the Secretary of the Corporation.
To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than 90 days nor more than 120 days prior to the anniversary date of the
immediately preceding annual meeting of shareholders; provided, however, that
in the event that the annual meeting is called for a date that is not within 30
days before or after such anniversary date, notice by the shareholder, in order
to be timely, must be so received not later than the close of business on the
tenth day following the day on which such notice of the date of the annual
meeting was mailed or public disclosure (as defined in Section 9) of the date
of the annual meeting was made, whichever first occurs. In no event shall the
public disclosure of an adjournment of an annual meeting commence a new time
period for the giving of a shareholder's notice as described above.
To be in proper written form, a shareholder's notice to the
Secretary must set forth as to each matter such shareholder proposes to bring
before the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and record address of such shareholder,
(iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by such shareholder, (iv)
a description of all arrangements or understandings between such shareholder
and any other person or persons (including their names) in connection with the
proposal of such business by such shareholder and any material interest of such
shareholder in such business and (v) a representation that such shareholder
intends to appear in person or by proxy at the annual meeting to bring such
business before the meeting.
<PAGE> 4
No business shall be conducted at the annual meeting of
shareholders except business brought before the annual meeting in accordance
with the procedures set forth in this Section 10; provided, however, that, once
business has been properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 10 shall be deemed to preclude
discussion by any shareholder of any such business. If the Chairman of an
annual meeting determines that business was not properly brought before the
annual meeting in accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
At a special meeting of shareholders, only such business shall
be conducted as shall have been set forth in the notice relating to the
meeting. At any meeting, matters incident to the conduct of this meeting may
be voted upon or otherwise disposed of as the presiding officer of the meeting
shall determine to be appropriate.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 1. The business, affairs and property of the Corporation
shall be managed by a board of eleven directors divided into three classes as
provided in the Certificate of Incorporation of the Corporation. Each director
shall hold office for the full term to which he shall have been elected and
until his successor is duly elected and shall qualify, or until his earlier
death, resignation or removal. A director need not be a resident of the State
of Delaware or a shareholder of the Corporation.
SECTION 2. Except as provided in the Certificate of Incorporation
of the Corporation, newly created directorships resulting from any increase in
the number of directors and any vacancies on the Board of Directors resulting
from death, resignation, disqualification, removal or other cause shall be
filled by the affirmative vote of a majority of the remaining directors then in
office, even though less than a quorum of the Board of Directors. Any director
elected in accordance with the preceding sentence shall hold office for the
remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such director's
successor shall have been elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
SECTION 3. No director of the Corporation shall be removed from
his office as a director by vote or other action of shareholders or otherwise
except for cause.
SECTION 4. Regular meetings of the Board of Directors shall be
held at such place or places within or without the State of Delaware, at such
hour and on such day as may be fixed by resolution of the Board of Directors,
without further notice of such meetings. The time or place of holding regular
meetings of the Board of Directors may be changed by the Chairman of the Board
or the President by giving written notice thereof as provided in Section 6 of
this Article II.
SECTION 5. Special meetings of the Board of Directors shall be
held, whenever called by the Chairman of the Board, the Chairman of the
Executive Committee, the President, by four directors or by resolution adopted
by the Board of Directors, at such place or places within or without the State
of Delaware as may be stated in the notice of the meeting.
SECTION 6. Written notice of the time and place of, and general
nature of the business to be transacted at, all special meetings of the Board
of Directors, and written notice of any change in the time or place of holding
the regular meetings of the Board of Directors, shall be given to each director
personally or by mail or by telegraph, telecopier or similar communication at
least one day before the day of the meeting; provided, however, that notice of
any meeting need not be given to any director if waived by him in writing, or
if he shall be present at such meeting.
<PAGE> 5
SECTION 7. A majority of the directors in office shall constitute
a quorum of the Board of Directors for the transaction of business; but a
lesser number may adjourn from day to day until a quorum is present. Except as
otherwise provided by law or in these By-laws, all questions shall be decided
by the vote of a majority of the directors present.
SECTION 8. Any action which may be taken at a meeting of the
directors or members of the Executive Committee may be taken without a meeting
if consent in writing setting forth the action so taken shall be signed by all
of the directors or members of the Executive Committee as the case may be and
shall be filed with the Secretary of the Corporation.
SECTION 9. The Board of Directors may designate one or more of its
number to be Vice Chairman of the Board, Chairman of the Executive Committee,
and Chairman of any other committees of the Board and to hold such other
positions on the Board as the Board of Directors may designate.
ARTICLE III.
EXECUTIVE COMMITTEE
The Board of Directors may, by resolution adopted by a majority of the
whole Board, designate two or more of its number to constitute an Executive
Committee which committee, during intervals between meetings of the Board,
shall have and exercise the authority of the Board of Directors in the
management of the business of the Corporation to the extent permitted by law.
ARTICLE IV.
OFFICERS
SECTION 1. The officers of the Corporation shall consist of a
Chairman of the Board, President, Secretary, Treasurer and such Executive,
Group, Senior or other Vice Presidents, and other officers as may be elected or
appointed by the Board of Directors. Any number of offices may be held by the
same person. All officers shall hold office until their successors are elected
or appointed, except that the Board of Directors may remove any officer at any
time at its discretion.
SECTION 2. The officers of the Corporation shall have such powers
and duties as generally pertain to their offices, except as modified herein or
by the Board of Directors, as well as such powers and duties as from time to
time may be conferred by the Board of Directors. The Chairman of the Board
shall have such duties as may be assigned to him by the Board of Directors and
shall preside at meetings of the Board and at meetings of the stockholders.
The President shall be the chief executive officer of the Corporation and shall
have general supervision over the business, affairs, and property of the
Corporation.
ARTICLE V.
SEAL
The seal of the Corporation shall be in such form as the Board of
Directors shall prescribe.
ARTICLE VI.
CERTIFICATES OF STOCK
The shares of stock of the Corporation shall be represented by
certificates of stock, signed by the President or such Vice President or other
officer designated by the Board of Directors, countersigned by the Treasurer or
the Secretary; and such signature of the President, Vice President, or other
officer, such countersignature of the Treasurer
<PAGE> 6
or Secretary, and such seal, or any of them, may be executed in facsimile,
engraved or printed. In case any officer who has signed or whose facsimile
signature has been placed upon any share certificate shall have ceased to be
such officer because of death, resignation or otherwise before the certificate
is issued, it may be issued by the Corporation with the same effect as if the
officer had not ceased to be such at the date of its issue. Said certificates
of stock shall be in such form as the Board of Directors may from time to time
prescribe.
ARTICLE VII.
INDEMNIFICATION
SECTION 1. The Corporation shall indemnify, and advance Expenses
(as this and all other capitalized words are defined in Section 12) to,
Indemnitee to the fullest extent permitted by applicable law in effect on July
24, 1986, and to such greater extent as applicable law may thereafter permit.
The rights of Indemnitee provided under the preceding sentence shall include,
but not be limited to, the right to be indemnified to the fullest extent
permitted by Section 145(b) of the D.G.C.L. in Proceedings by or in the right
of the Corporation and to the fullest extent permitted by Section 145(a) of the
D.G.C.L. in all other Proceedings.
SECTION 2. If Indemnitee is, by reason of his Corporate Status, a
witness in or a party to and is successful, on the merits or otherwise, in any
Proceeding, he shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on
the merits or otherwise, as to any Matter in such Proceeding, the Corporation
shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf relating to each Matter. The termination of
any Matter in such a Proceeding by dismissal, with or without prejudice, shall
be deemed to be a successful result as to such Matter.
SECTION 3. Indemnitee shall be advanced Expenses within 10 days
after requesting them to the fullest extent permitted by Section 145(e) of the
D.G.C.L.
SECTION 4. To obtain indemnification Indemnitee shall submit to
the Corporation a written request with such information as is reasonably
available to Indemnitee. The Secretary of the Corporation shall promptly
advise the Board of Directors of such request.
SECTION 5. If there has been no Change of Control at the time the
request for indemnification is sent, Indemnitee's entitlement to
indemnification shall be determined in accordance with Section 145(d) of the
D.G.C.L. If entitlement to indemnification is to be determined by Independent
Counsel, the Corporation shall furnish notice to Indemnitee within 10 days
after receipt of the request for indemnification, specifying the identity and
address of Independent Counsel. The Indemnitee may, within 14 days after
receipt of such written notice of selection, deliver to the Corporation a
written objection to such selection. Such objection may be asserted only on
the ground that the Independent Counsel so selected does not meet the
requirements of Independent Counsel and the objection shall set forth with
particularity the factual basis of such assertion. If there is an objection to
the selection of Independent Counsel, either the Corporation or Indemnitee may
petition the Court of Chancery of the State of Delaware or any other court of
competent jurisdiction for a determination that the objection is without a
reasonable basis and/or for the appointment of Independent Counsel selected by
the Court.
SECTION 6. If there has been a Change of Control at the time the
request for indemnification is sent, Indemnitee's entitlement to
indemnification shall be determined in a written opinion by Independent Counsel
selected by Indemnitee. Indemnitee shall give the Corporation written notice
advising of the identity and address of the Independent Counsel so selected.
The Corporation may, within 7 days after receipt of such written notice of
selection, deliver to the Indemnitee a written objection to such selection.
Indemnitee may, within 5 days after the receipt of such objection from the
Corporation, submit the name of another Independent Counsel and the Corporation
may, within 7 days after receipt of such written notice of selection, deliver
to the Indemnitee a written objection to such selection. Any objection is
subject to the limitations in Section 5. Indemnitee may petition the Court of
Chancery of the State of
<PAGE> 7
Delaware or any other Court of competent jurisdiction for a determination that
the Corporation's objection to the first and/or second selection of Independent
Counsel is without a reasonable basis and/or for the appointment as Independent
Counsel of a person selected by the Court.
SECTION 7. If a Change of Control shall have occurred before the
request for indemnification is sent by Indemnitee, Indemnitee shall be presumed
(except as otherwise expressly provided in this Article) to be entitled to
indemnification upon submission of a request for indemnification in accordance
with Section 4 of this Article, and thereafter the Corporation shall have the
burden of proof to overcome the presumption in reaching a determination
contrary to the presumption. The presumption shall be used by Independent
Counsel as a basis for a determination of entitlement to indemnification unless
the Corporation provides information sufficient to overcome such presumption by
clear and convincing evidence or the investigation, review and analysis of
Independent Counsel convinces him by clear and convincing evidence that the
presumption should not apply.
Except in the event that the determination of entitlement to
indemnification is to be made by Independent Counsel, if the person or persons
empowered under Section 5 or 6 of this Article to determine entitlement to
indemnification shall not have made and furnished to Indemnitee in writing a
determination within 60 days after receipt by the Corporation of the request
therefor, the requisite determination of entitlement to indemnification shall
be deemed to have been made and Indemnitee shall be entitled to such
indemnification unless Indemnitee knowingly misrepresented a material fact in
connection with the request for indemnification or such indemnification is
prohibited by law. The termination of any Proceeding or of any Matter therein,
by judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this
Article) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, or with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his conduct was unlawful.
SECTION 8. The Corporation shall pay any and all reasonable fees
and expenses of Independent Counsel incurred acting pursuant to this Article
and in any proceeding to which it is a party or witness in respect of its
investigation and written report and shall pay all reasonable fees and expenses
incident to the procedures in which such Independent Counsel was selected or
appointed. No Independent Counsel may serve if a timely objection has been
made to his selection until a Court has determined that such objection is
without a reasonable basis.
SECTION 9. In the event that (i) a determination is made pursuant
to Section 5 or 6 that Indemnitee is not entitled to indemnification under this
Article, (ii) advancement of Expenses is not timely made pursuant to Section 3
of this Article, (iii) Independent Counsel has not made and delivered a written
opinion determining the request for indemnification (a) within 90 days after
being appointed by the Court, or (b) within 90 days after objections to his
selection have been overruled by the Court, or (c) within 90 days after the
time for the Corporation or Indemnitee to object to his selection, or (iv)
payment of indemnification is not made within 5 days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Section 5, 6 or 7 of this Article, Indemnitee shall be entitled to
an adjudication in an appropriate court of the State of Delaware, or in any
other court of competent jurisdiction, of his entitlement to such
indemnification or advancement of Expenses. In the event that a determination
shall have been made that Indemnitee is not entitled to indemnification, any
judicial proceeding or arbitration commenced pursuant to this Section shall be
conducted in all respects as a de novo trial on the merits and Indemnitee shall
not be prejudiced by reason of that adverse determination. If a Change of
Control shall have occurred, in any judicial proceeding commenced pursuant to
this Section, the Corporation shall have the burden of proving that Indemnitee
is not entitled to indemnification or advancement of Expenses, as the case may
be. If a determination shall have been made or deemed to have been made that
Indemnitee is entitled to indemnification, the Corporation shall be bound by
such determination in any judicial proceeding commenced pursuant to this
Section 9, or otherwise, unless Indemnitee knowingly misrepresented a material
fact in connection with the request for indemnification, or such
indemnification is prohibited by law.
<PAGE> 8
The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 9 that the procedures and
presumptions of this Article are not valid, binding and enforceable and shall
stipulate in any such court that the Corporation is bound by all provisions of
this Article. In the event that Indemnitee, pursuant to this Section 9, seeks
a judicial adjudication to enforce his rights under, or to recover damages for
breach of, this Article, Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any and all
Expenses actually and reasonably incurred by him in such judicial adjudication,
but only if he prevails therein. If it shall be determined in such judicial
adjudication that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the Expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall
be appropriately prorated.
SECTION 10. The rights of indemnification and to receive
advancement of Expenses as provided by this Article shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Certificate of Incorporation, the By-laws, any
agreement, a vote of stockholders or a resolution of directors, or otherwise.
No amendment, alteration or repeal of this Article or any provision thereof
shall be effective as to any Indemnitee for acts, events and circumstances that
occurred, in whole or in part, before such amendment, alteration or repeal.
The provisions of this Article shall continue as to an Indemnitee whose
Corporate Status has ceased and shall inure to the benefit of his heirs,
executors and administrators.
SECTION 11. If any provision or provisions of this Article shall be
held to be invalid, illegal or unenforceable for any reason whatsoever, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby; and, to the fullest extent possible,
the provisions of this Article shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable.
SECTION 12. For purposes of this Article:
"Change of Control" means a change in control of the
Corporation after July 24, 1986 in any one of the following circumstances (1)
there shall have occurred an event required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on
any similar schedule or form) promulgated under the Securities Exchange Act of
1934 (the "Act"), whether or not the Corporation is then subject to such
reporting requirement; (2) any "person" (as such term is used in Section 13(d)
and 14(d) of the Act) shall have become the "beneficial owner" (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the
Corporation representing 40% or more of the combined voting power of the
Corporation's then outstanding voting securities without prior approval of at
least two-thirds of the members of the Board of Directors in office immediately
prior to such person attaining such percentage interest; (3) the Corporation is
a party to a merger, consolidation, sale of assets or other reorganization, or
a proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; (4) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Corporation's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors.
"Corporate Status" describes the status of a person who (a) is
or was a director, officer or employee of the Corporation, or is or was serving
at the request of the Corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise, in each
case which is controlled by the Corporation, or (b) is or was serving, at the
written request of the Corporation or pursuant to an agreement in writing with
the Corporation which request or agreement provides for indemnification under
these By-laws, as a director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise not controlled by the
Corporation, provided that if such written request or agreement referred to in
this clause (b) provides for a lesser degree of indemnification by the
Corporation than that provided pursuant to this Article VII, the provisions
contained in or made pursuant to such written request or agreement shall
govern. References above to "other enterprises" shall include employee benefit
plans and references to "serving at the request of the Corporation" shall
include any service as a
<PAGE> 9
director, officer or employee which imposes duties on, or involves services by,
such director, officer or employee with respect to an employee benefit plan or
its participants or beneficiaries.
"D.G.C.L." means the Delaware General Corporation Law.
"Disinterested Director" means a director of the Corporation
who is not and was not a party to the Proceeding in respect of which
indemnification is sought by indemnitee.
"Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, or being or preparing to be a witness in
a Proceeding.
"Indemnitee" includes any person who is, or is threatened to be
made, a witness in or a party to any Proceeding as described in Section 1 or 2
of this Article by reason of his Corporate Status.
"Independent Counsel" means a law firm, or member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the five years previous to his selection or appointment has been,
retained to represent: (i) the Corporation or Indemnitee in any matter material
to either such party, or (ii) any other party to the Proceeding giving rise to
a claim for indemnification hereunder.
"Matter" is a claim, a material issue, or a substantial request
for relief.
"Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any
other proceeding whether civil, criminal, administrative or investigative,
except one initiated by an Indemnitee pursuant to Section 9 of this Article to
enforce his rights under this Article.
SECTION 13. Any communication required or permitted to the
Corporation shall be addressed to the Secretary of the Corporation and any such
communication to Indemnitee shall be addressed to his home address unless he
specifies otherwise and shall be personally delivered or delivered by overnight
mail delivery.
ARTICLE VIII.
AMENDMENTS
These By-laws may be altered, amended, added to or repealed by the
shareholders at any annual or special meeting, by the vote of shareholders
entitled to cast at least a majority of the votes which all shareholders are
entitled to cast (i.e., by the vote of a majority of the outstanding shares
entitled to vote), and, except as may be otherwise required by law, the power
to alter, amend, add to or repeal these By-laws is also vested in the Board of
Directors (subject always to the power of the shareholders to change such
action); provided, however, that notice of the general nature of any such
action proposed to be taken shall be included in the notice of the meeting of
shareholders or of the Board of Directors at which such action is taken.
<PAGE> 1
EXHIBIT 31
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
PENNZOIL COMPANY, ) C. A. No. 97-353
a Delaware corporation, )
)
Plaintiff, )
)
v. )
)
UNION PACIFIC RESOURCES )
GROUP, INC., )
a Utah corporation, and )
RESOURCES NEWCO, INC., a )
Delaware corporation, )
)
Defendants. )
ANSWER
Defendants Union Pacific Resources Group, Inc. ("UPR") and Resources
Newco, Inc. ("Newco") by their undersigned attorneys, hereby answer the
Complaint in the above-captioned matter.
1. Denied, except admitted that plaintiff purports to bring this action
pursuant to Section 14(e) of the Securities Exchange Act of 1934 and rules and
regulations promulgated thereunder by the Securities and Exchange Commission
and to seek preliminary and permanent injunctive relief as described in the
Complaint.
2. Denied, except admitted that plaintiff is seeking expedited discovery.
Defendants respectfully refer the Court to UPR's Schedule 14D-1 for its
content.
3. Paragraph 3 alleges matters of law as to which no responsive pleading
is required.
<PAGE> 2
4. Denied, except admitted that Newco is incorporated in Delaware.
5. Paragraph 5 alleges matters of law as to which no responsive pleading
is required.
6. Admitted, except defendants are without knowledge sufficient to admit
or deny the last two sentences of paragraph 6.
7. The first two sentences of paragraph 7 are admitted. Defendants lack
information sufficient to admit or deny the third sentence in paragraph 7. The
fourth sentence of paragraph 7 is denied, except that it is admitted that
Pennzoil's franchise operation segment includes the Jiffy Lube system and brand
name. Defendants are without knowledge or information sufficient to admit or
deny the fifth sentence of paragraph 7.
8. Admitted.
9. Denied, except admitted that defendant Newco is a Delaware corporation
whose executive offices are located at 801 Cherry Street, Fort Worth, Texas,
that Newco is a wholly-owned subsidiary of UPR, and that Newco was organized to
acquire plaintiff Pennzoil Company ("Pennzoil").
10. Defendants have insufficient information to admit or deny
paragraph 10.
11. Paragraph 11 pleads matters as to which defendants have insufficient
information to admit or deny, except defendants admit that in January 1995 UPR
was a wholly-owned subsidiary of Union Pacific Corporation. Paragraph 11 is
specifically denied to the extent that it suggests that the currently proposed
combination with UPR would not provide superior value maximization for
Pennzoil's shareholders.
12. The first two sentences of paragraph 12 are denied. Defendants lack
knowledge sufficient to admit or deny the third sentence in paragraph 12.
2
<PAGE> 3
13. Defendants have insufficient information to admit or deny paragraph
13, except it is admitted that discussions in 1995 between Pennzoil and UPR did
not result in a transaction between Pennzoil and UPR.
14. The first and second sentences of paragraph 14 are admitted. The third
sentence of paragraph is denied except that it is admitted that the
Distribution was subject to certain conditions, the terms of which are set
forth in UPR's October 10, 1995 Prospectus, to which defendants respectfully
refer the Court.
15. The first sentence of paragraph 15 is denied. The remainder of
paragraph 15 is admitted.
16. Paragraph 16 pleads matters of law as to which no responsive pleading
is required.
17. Admitted that UPR and Resources entered into an indemnification
agreement in connection with the October 1995 initial public offering of UPR
stock, to which defendants respectfully refer the Court for its contents, and
that UPR has made statements concerning the indemnification agreement in
certain publicly filed documents, to which defendants also respectfully refer
the Court for their contents.
18. Admitted.
19. The first sentence of paragraph 19 is admitted. The second sentence of
paragraph 19 is denied.
20. The first sentence of paragraph 20 is admitted. The second and third
sentences of paragraph 20 are denied.
21. The first sentence of paragraph 21 is admitted. The second sentence of
paragraph 21 is denied, except defendants lack sufficient information to admit
or deny the allegations concerning Mr. Pate's belief. Defendants lack
information sufficient to admit or deny the third sentence of paragraph 21,
except that it is admitted that Mr. Pate received a letter from Mr. Messman
dated May 6, 1997, to which defendants respectfully refer the Court for its
contents.
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<PAGE> 4
22. The allegations in paragraph 22 are denied, except that it is admitted
that Mr. Pate sent a letter dated May 8, 1997 to Mr. Messman, to which
defendants respectfully refer the Court for its contents.
23. The first two sentences of paragraph 23 are denied, except that it is
admitted that Mr. Messman sent a letter dated June 10, 1997 to Mr. Pate, to
which defendants respectfully refer the Court for its contents. The third
sentence of paragraph 23 is denied.
24. Denied, except admitted that the contents of Mr. Messman's June 10,
1997 letter speak for themselves.
25. Denied, except admitted that the contents of Mr. Messman's June 10,
1997 letter speak for themselves and that on June 12, 1997, certain
representatives of UPR contacted certain directors of Pennzoil to discuss such
letter.
26. Paragraph 26 pleads matters as to which defendants are without
knowledge sufficient to admit or deny, except that it is admitted that the
persons listed in the third sentence of paragraph 26 are directors of Pennzoil.
27. Defendants are without knowledge sufficient to admit or deny
paragraph 27.
28. Defendants are without knowledge sufficient to admit or deny
paragraph 28.
29. Defendants are without knowledge sufficient to admit or deny paragraph
29, except that it is admitted that Mr. Pate transmitted to Mr. Messman a
letter dated June 20, 1997, to which defendants respectfully refer the Court
for its contents.
4
<PAGE> 5
30. The first sentence of paragraph 30 is admitted. The second, third,
fourth and fifth sentences of paragraph 30 are denied, except it is admitted
that the terms and conditions of UPR's offer are set forth in UPR's Offer to
Purchase, to which defendants respectfully refer the Court for its contents.
The sixth sentence of paragraph 30 is admitted.
31. Denied.
32. Denied.
33. Denied.
34. The first sentence of paragraph 34 is admitted. The second and third
sentences of paragraph 34 are denied.
35. Denied.
36. Denied, except admitted that the contents of the Schedule 14D-1 and
the contents of UPR's request for a ruling from the IRS, to which defendants
respectfully refer the Court, speak for themselves.
37. Denied, except admitted that the contents of Mr. Messman's June 10,
1997 letter and the Schedule 14D-1 speak for themselves.
38. Denied.
39. Denied, except admitted that the contents of the indemnification
agreement, UPR's public filings, and the Schedule 14D-1, to which defendants
respectfully refer the Court, speak for themselves.
40. Denied, except admitted that the contents of the Schedule 14D-1, to
which defendants respectfully refer the Court, speak for themselves and that
purchase accounting would apply to the proposed acquisition of Pennzoil by UPR.
5
<PAGE> 6
41. The first sentence of paragraph 41 is denied. Defendants lack
sufficient information to admit or deny the accuracy of the quotations set
forth in the remainder of paragraph 41.
42. The first and second sentences of paragraph 42 are denied. The
remainder of paragraph 42 pleads matters as to which defendants have
insufficient knowledge to admit or deny.
43. All allegations of paragraph 43 are denied, including specifically
without limitation, the accuracy of the assumptions set forth therein.
44. Denied, except admitted that the contents of the Schedule 14D-1, to
which defendants respectfully refer the Court, speak for themselves.
45. Denied.
46. Defendants reallege and incorporate by reference their responses to
paragraphs 1 through 45 as if fully set forth herein.
47. Denied.
48. Denied.
49. Denied.
FIRST AFFIRMATIVE DEFENSE
50. The complaint fails to state a claim upon which relief may be granted.
SECOND AFFIRMATIVE DEFENSE
51. The complaint is subject to dismissal pursuant to Fed.R.Civ.P. 13(a)
on the grounds that the purported claim it attempts to assert is a compulsory
counterclaim in defendants' first-filed action in the United States District
Court for the Northern District of Texas, Forth Worth Division, No.
4-97-CV:50A-Y.
THIRD AFFIRMATIVE DEFENSE
52. This action should be dismissed, stayed or transferred in accordance
with the first-filed rule.
6
<PAGE> 7
FOURTH AFFIRMATIVE DEFENSE
53. The complaint is not brought in the proper venue.
FIFTH AFFIRMATIVE DEFENSE
54. Plaintiff's claims for equitable relief are barred by the doctrine of
unclean hands.
WHEREFORE, having answered the Complaint herein, defendants request entry
of a judgment dismissing the Complaint, awarding them their costs and expenses
of suit, including reasonable attorneys fees; and awarding them such
7
<PAGE> 8
other and further relief as the Court may deem just and proper.
/s/ Andrew J. Turezyn
----------------------------------------
Edward P. Welch, I.D. No. 671
Andrew J. Turezyn, I.D. No. 2054
R. Michael Lindsey, I.D. No. 2711
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899
(302) 651-3000
Attorneys for Defendants
DATED: July 2, 1997
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