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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
(Amendment No. 27)
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
------------------------
PENNZOIL COMPANY
(Name of Subject Company)
------------------------
UNION PACIFIC RESOURCES GROUP INC.
RESOURCES NEWCO, INC.
(Bidders)
------------------------
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)
------------------------
JOSEPH A. LASALA, JR., ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
UNION PACIFIC RESOURCES GROUP INC.
801 CHERRY STREET
FORT WORTH, TEXAS 76102
TELEPHONE: (817) 877-6000
(Name, Address and Telephone Number of Persons Authorized to Receive
Notices and Communications on Behalf of Bidders)
Copies To:
HOWARD L. SHECTER, ESQ. PAUL T. SCHNELL, ESQ.
MORGAN, LEWIS & BOCKIUS LLP SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
101 PARK AVENUE 919 THIRD AVENUE
NEW YORK, NY 10178-0060 NEW YORK, NY 10022-3897
TELEPHONE: (212) 309-6384 TELEPHONE: (212) 735-3000
------------------------
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
---------------------- ----------------------
$4,234,852,692 $846,971
* For purposes of calculating the filing fee only. This calculation assumes the
purchase of 50,414,913 shares of Common Stock, par value $0.83 1/3 per share,
of Pennzoil Company for $84.00 net per share in cash.
** 1/50 of 1% of Transaction Valuation.
/X/ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: $421,600 FILING PARTY: Same
FORM OR REGISTRATION NO.: 14D-1 DATE FILED: June 23, 1997
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<PAGE>
This Amendment No. 27 amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed on June 23, 1997, as amended (the 'Schedule 14D-1'), by
Union Pacific Resources Group Inc., a Utah corporation ('UPR'), and Resources
Newco, Inc., a Delaware corporation and a wholly owned subsidiary of UPR (the
'Purchaser', and together with UPR, the 'Bidders'), with respect to Purchaser's
offer to purchase all outstanding shares of Common Stock, par value $0.83 1/3
per share (the 'Shares'), of Pennzoil Company, a Delaware corporation
('Pennzoil'), together with the associated Preferred Stock Purchase Rights, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated June 23, 1997 (the 'Offer to Purchase'), as amended and supplemented by
the Supplement thereto, dated October 7, 1997 (the 'Supplement'), and the
related revised Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the 'Offer'), which have been
annexed to and filed with the Schedule 14D-1 as Exhibits (a)(1), (a)(26) and
(a)(27), respectively. Unless otherwise defined herewith, all capitalized terms
used herein shall have the respective meanings given such terms in the Offer to
Purchase.
ITEM 1. SECURITY AND SUBJECT COMPANY.
The information set forth in Items 1(b) and 1(c) of the Schedule 14D-1 is
hereby amended and supplemented by the following:
(b) The information set forth in the Introduction and Section 1 ('Amended
Terms of the Offer') of the Supplement is incorporated herein by reference.
(c) The information set forth in Section 5 ('Price Range of the Shares;
Dividends on the Shares') of the Supplement is incorporated herein by
reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
The information set forth in Item 3(b) of the Schedule 14D-1 is hereby
amended and supplemented as follows:
(b) The information set forth in the Introduction, Section 8 ('Background
of the Offer Since June 23, 1997; Contacts with Pennzoil') and Section 9
('Purpose of the Offer; Plans for Pennzoil') of the Supplement is incorporated
herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in Items 4(a)-(c) of the Schedule 14D-1 is hereby
amended and supplemented as follows:
(a)-(c) The information set forth in Section 7 ('Source and Amount of
Funds') of the Supplement is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
The information set forth in Items 5(a)-(g) of the Schedule 14D-1 is hereby
amended and supplemented as follows:
(a)-(g) The information set forth in the Introduction and Sections 8
('Background of the Offer; Contacts with Pennzoil') and 9 ('Purpose of the Offer
Since June 23, 1997; Plans for Pennzoil') of the Supplement is incorporated
herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in Item 7 of the Schedule 14D-1 is hereby
amended and supplemented as follows:
The information set forth in the Introduction, Section 8 ('Background of
the Offer Since June 23, 1997; Contacts with Pennzoil'), Section 9 ('Purpose of
the Offer; Plans for Pennzoil') and Section 11. ('Certain Legal Matters') of the
Supplement is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
The information set forth in Items 10(b)-(c), (e) and (f) of the Schedule
14D-1 is hereby amended and supplemented by the following:
(b)-(c), (e) The information set forth in the Introduction, Section 9
('Purpose of the Offer; Plans for Pennzoil') and Section 11 ('Certain Legal
Matters') of the Supplement is incorporated herein by reference.
(f) The information set forth in the Supplement and the revised Letter of
Transmittal, to the extent not otherwise incorporated herein by reference,
copies of which are attached hereto as Exhibits (a)(26) and (a)(27), is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
<S> <C> <C>
(a) (1) Offer to Purchase, dated June 23, 1997.*
(2) Letter of Transmittal with respect to the Shares and Rights, together with the Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9.*
(3) Notice of Guaranteed Delivery.*
(4) Letter, dated June 23, 1997, from Smith Barney Inc. to brokers, dealers, banks, trust
companies and other nominees.*
(5) Form of letters to be sent by brokers, dealers, banks, trust companies and other nominees.*
(6) Press release, dated June 23, 1997 relating to the commencement of the Offer.*
(7) Form of summary advertisement, dated June 23, 1997.*
(8) Press release, dated June 23, 1997 relating to certain litigation.*
(9) Press release, dated June 25, 1997 relating to Pennzoil complaint.*
(10) Published message to Pennzoil Chief Executive Officer and Board of Directors, dated June 30, 1997.*
(11) Press release, dated July 1, 1997, relating to Pennzoil Board recommendation.*
(12) Form of letter to certain Pennzoil stockholders.*
(13) Letter to certain Pennzoil stockholders.*
(14) Published message to Pennzoil Shareholders, dated July 15, 1997.*
(15) Message to Participants in Pennzoil 401(k) Plans on UPR Web Site.*
(16) Press release, dated July 22, 1997, relating to response to and extension of tender offer.*
(17) Press release, dated July 22, 1997, relating to response of Pennzoil Company to results of UPR tender offer.*
(18) Published message to Pennzoil Shareholders, published July 24,1997.*
(19) Press release, dated August 27, 1997, relating to extension of the tender offer.*
(20) Press release, dated September 8, 1997, relating to Pennzoil strategic plan.*
(21) Published message to Pennzoil, published September 9, 1997.*
(22) Press release, dated September 9, 1997, relating to Pennzoil's strategic plan disclosures.*
(23) Press release, dated September 10, 1997, relating to denial of Pennzoil motion for preliminary injunction.*
(24) Press release, dated September 15, 1997, relating to the filing of a motion to compel
Pennzoil to publicly disclose its strategic plan.*
(25) Press release, dated September 17, 1997, relating to UPR record of performance.*
(26) Supplement to the Offer to Purchase, dated October 7, 1997.
(27) Revised Letter of Transmittal together with Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(28) Form of cover letter for revised tender offer documents.
(29) Revised Notice of Guaranteed Delivery
(30) Revised letter, dated October 7, 1997, from Smith Barney Inc. to brokers, dealers, banks, trust companies
and other nominees.
(31) Revised form of letter to be sent by brokers, dealers, banks, trust companies and other nominees.
(32) Press release, dated October 6, 1997 issued by UPR announcing the amended terms of the Offer.
(33) Form of summary advertisement, dated October 7, 1997.
(34) Form of letter to certain Pennzoil stockholders, dated October 6, 1997.
(35) Form of letter to certain UPR stockholders and analysts, dated October 6, 1997.
(b) None.
(c) None.
(d) Opinion of Morgan, Lewis & Bockius LLP.*
(e) Not applicable.
(f) None.
(g) (1) Complaint, filed by UPR and Purchaser against Pennzoil et al. (dated June 23, 1997,
Court of Chancery of the State of Delaware in and for New Castle County).*
(2) Original Complaint, filed by UPR and Purchaser against Pennzoil (dated June 23, 1997,
United States District Court for the Northern District of Texas, Fort Worth Division).*
(3) Verified Complaint for Declaratory and Injunctive Relief, filed by UPR and
Purchaser against Pennzoil, Richard Ieyoub, Attorney General of the State of Louisiana,
and Larry L. Murray, Commissioner of Financial Institutions (dated June 23, 1997,
United States District Court for the Middle District of Louisiana).*
(4) First Amended Complaint, filed by UPR and Purchaser against Pennzoil (dated June 25,
1997, United States District Court for the Northern District of Texas, Fort Worth
Division).*
(5)(a) Complaint, filed by Pennzoil against UPR and Purchaser (dated June 25, 1997,
United States District Court for the District of Delaware).*
(5)(b) Answer of UPR and Purchaser to Complaint filed by Pennzoil (dated July 2, 1997,
United States District Court for the District of Delaware).*
(6) Form of letter, dated June 27, 1997, to each member of the Board of Directors of Pennzoil.*
(7) Second Amended Complaint, filed by UPR and Purchaser against Pennzoil (dated July 11, 1997,
United States District Court for the Northern District of Texas, Fort Worth Division).*
(8) Order Denying Amended Motion to Dismiss and Partially Granting Motion for
Preliminary Injunction (dated July 18, 1997, United States District Court for the
Northern District of Texas, Fort Worth Division).*
(9) Form of letter, dated August 1, 1997, to James L. Pate.*
(10) Form of letter, dated August 1, 1997, from Mr. James L. Pate to Mr. Jack L. Messman.*
(11) Form of letter, dated August 13, 1997, to each member of the Board of Directors of Pennzoil.*
(12) Form of letter, dated August 14, 1997, from Mr. James L. Pate to Mr. Jack L. Messman.*
(13) Form of letter, dated September 8, 1997, from Mr. Jack L. Messman to Mr. James L. Pate.*
(14) Form of letter, dated September 9, 1997, from Mr. James L. Pate to Mr. Jack L. Messman.*
(15) Form of letter to certain analysts and UPR shareholders.*
(16) Form of letter, dated September 18, 1997, from Mr. James L. Pate to Mr. Jack L. Messman.*
(17) Form of letter, dated September 18, 1997, from Mr. Jack L. Messman to Mr. James L. Pate.*
(18) Form of letter, dated September 18, 1997, from Mr. James L. Pate to certain members of the UPR Board.*
</TABLE>
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* Previously Filed.
SIGNATURES
After due inquiry and to the best of our knowledge and belief, we certify
that the information set forth in this statement is true, complete and correct.
UNION PACIFIC RESOURCES GROUP INC.
By: /s/ JOSEPH A. LASALA, JR.
-----------------------------------
Name: Joseph A. LaSala, Jr.
Title: Vice President, General Counsel
and Secretary
RESOURCES NEWCO, INC.
By: /s/ JOSEPH A. LASALA, JR.
-----------------------------------
Name: Joseph A. LaSala, Jr.
Title: Vice President, General Counsel
and Secretary
Dated: October 7, 1997
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
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<S> <C> <C> <C>
(a) (1) Offer to Purchase, dated June 23, 1997.*
(2) Letter of Transmittal with respect to the Shares and Rights, together with the Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9.*
(3) Notice of Guaranteed Delivery.*
(4) Letter, dated June 23, 1997, from Smith Barney Inc. to brokers, dealers, banks, trust
companies and other nominees.*
(5) Form of letters to be sent by brokers, dealers, banks, trust companies and other nominees.*
(6) Press release, dated June 23, 1997 relating to the commencement of the Offer.*
(7) Form of summary advertisement, dated June 23, 1997.*
(8) Press release, dated June 23, 1997 relating to certain litigation.*
(9) Press release, dated June 25, 1997 relating to Pennzoil complaint.*
(10) Published message to Pennzoil Chief Executive Officer and Board of Directors, dated June 30, 1997.*
(11) Press release, dated July 1, 1997, relating to Pennzoil Board recommendation.*
(12) Form of letter to certain Pennzoil stockholders.*
(13) Letter to certain Pennzoil stockholders.*
(14) Published message to Pennzoil Shareholders, dated July 15, 1997.*
(15) Message to Participants in Pennzoil 401(k) Plans on UPR Web Site.*
(16) Press release, dated July 22, 1997, relating to response to and extension of tender offer.*
(17) Press release, dated July 22, 1997, relating to response of Pennzoil Company to results of UPR tender offer.*
(18) Published message to Pennzoil Shareholders, published July 24,1997.*
(19) Press release, dated August 27, 1997, relating to extension of the tender offer.*
(20) Press release, dated September 8, 1997, relating to Pennzoil strategic plan.*
(21) Published message to Pennzoil, published September 9, 1997.*
(22) Press release, dated September 9, 1997, relating to Pennzoil's strategic plan disclosures.*
(23) Press release, dated September 10, 1997, relating to denial of Pennzoil motion for preliminary injunction.*
(24) Press release, dated September 15, 1997, relating to the filing of a motion to compel
Pennzoil to publicly disclose its strategic plan.*
(25) Press release, dated September 17, 1997, relating to UPR record of performance.*
(26) Supplement to the Offer to Purchase, dated October 7, 1997.
(27) Revised Letter of Transmittal together with Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(28) Form of cover letter for revised tender offer documents.
(29) Revised Notice of Guaranteed Delivery
(30) Revised letter, dated October 7, 1997, from Smith Barney Inc. to brokers, dealers, banks, trust companies
and other nominees.
(31) Revised form of letter to be sent by brokers, dealers, banks, trust companies and other nominees.
(32) Press release, dated October 6, 1997 issued by UPR announcing the amended terms of the Offer.
(33) Form of summary advertisement, dated October 7, 1997.
(34) Form of letter to certain Pennzoil stockholders, dated October 6, 1997.
(35) Form of letter to certain UPR stockholders and analysts, dated October 6, 1997.
(b) None.
(c) None.
(d) Opinion of Morgan, Lewis & Bockius LLP.*
(e) Not applicable.
(f) None.
(g) (1) Complaint, filed by UPR and Purchaser against Pennzoil et al. (dated June 23, 1997,
Court of Chancery of the State of Delaware in and for New Castle County).*
(2) Original Complaint, filed by UPR and Purchaser against Pennzoil (dated June 23, 1997,
United States District Court for the Northern District of Texas, Fort Worth Division).*
(3) Verified Complaint for Declaratory and Injunctive Relief, filed by UPR and
Purchaser against Pennzoil, Richard Ieyoub, Attorney General of the State of Louisiana,
and Larry L. Murray, Commissioner of Financial Institutions (dated June 23, 1997,
United States District Court for the Middle District of Louisiana).*
(4) First Amended Complaint, filed by UPR and Purchaser against Pennzoil (dated June 25,
1997, United States District Court for the Northern District of Texas, Fort Worth
Division).*
(5)(a) Complaint, filed by Pennzoil against UPR and Purchaser (dated June 25, 1997,
United States District Court for the District of Delaware).*
(5)(b) Answer of UPR and Purchaser to Complaint filed by Pennzoil (dated July 2, 1997,
United States District Court for the District of Delaware).*
(6) Form of letter, dated June 27, 1997, to each member of the Board of Directors of Pennzoil.*
(7) Second Amended Complaint, filed by UPR and Purchaser against Pennzoil (dated July 11, 1997,
United States District Court for the Northern District of Texas, Fort Worth Division).*
(8) Order Denying Amended Motion to Dismiss and Partially Granting Motion for
Preliminary Injunction (dated July 18, 1997, United States District Court for the
Northern District of Texas, Fort Worth Division).*
(9) Form of letter, dated August 1, 1997, to James L. Pate.*
(10) Form of letter, dated August 1, 1997, from Mr. James L. Pate to Mr. Jack L. Messman.*
(11) Form of letter, dated August 13, 1997, to each member of the Board of Directors of Pennzoil.*
(12) Form of letter, dated August 14, 1997, from Mr. James L. Pate to Mr. Jack L. Messman.*
(13) Form of letter, dated September 8, 1997, from Mr. Jack L. Messman to Mr. James L. Pate.*
(14) Form of letter, dated September 9, 1997, from Mr. James L. Pate to Mr. Jack L. Messman.*
(15) Form of letter to certain analysts and UPR shareholders.*
(16) Form of letter, dated September 18, 1997, from Mr. James L. Pate to Mr. Jack L. Messman.*
(17) Form of letter, dated September 18, 1997, from Mr. Jack L. Messman to Mr. James L. Pate.*
(18) Form of letter, dated September 18, 1997, from Mr. James L. Pate to certain members of the UPR Board.*
</TABLE>
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* Previously Filed.
Supplement to the Offer to Purchase Dated June 23, 1997
Resources Newco, Inc.,
a wholly owned subsidiary of
Union Pacific Resources Group Inc.,
Has Amended its Offer and is Now Offering to Purchase
All Outstanding Shares of Common Stock
(including the Associated Preferred Stock Purchase Rights)
of
Pennzoil Company
at
$84.00 Net Per Share in Cash
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, NOVEMBER 5, 1997, UNLESS THE OFFER IS EXTENDED TO
A LATER DATE AND TIME (THE "EXPIRATION DATE"). SHARES WHICH ARE TENDERED
PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION
DATE.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OR,
WHERE APPLICABLE, WAIVER OF THE FOLLOWING CONDITIONS: (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE A NUMBER OF SHARES
WHICH, TOGETHER WITH SHARES OWNED BY RESOURCES NEWCO, INC. ("PURCHASER") AND ITS
AFFILIATES, WILL CONSTITUTE AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
OUTSTANDING SHARES OF PENNZOIL ON A FULLY DILUTED BASIS AS OF THE DATE THE
SHARES ARE ACCEPTED FOR PAYMENT BY PURCHASER PURSUANT TO THE OFFER, AND (II)
PURCHASER BEING SATISFIED IN ITS REASONABLE DISCRETION THAT THE BOARD OF
DIRECTORS OF PENNZOIL HAS IRREVOCABLY TAKEN ALL SUCH ACTION SO THAT (A) THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER AND THE PROPOSED MERGER DESCRIBED
HEREIN HAVE BEEN APPROVED PURSUANT TO SECTION 203 OF THE DELAWARE GENERAL
CORPORATION LAW OR THE PROVISIONS OF SECTION 203 ARE OTHERWISE INAPPLICABLE TO
THE ACQUISITION OF SHARES PURSUANT TO THE OFFER AND THE PROPOSED MERGER, (B) THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER AND THE PROPOSED MERGER HAVE BEEN
APPROVED PURSUANT TO ARTICLE SIXTH OF PENNZOIL'S RESTATED CERTIFICATE OF
INCORPORATION, (C) THE PREFERRED STOCK PURCHASE RIGHTS ISSUED BY PENNZOIL HAVE
BEEN REDEEMED OR PURCHASER IS SATISFIED IN ITS REASONABLE DISCRETION THAT THE
RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE
PROPOSED MERGER, AND (D) EITHER (1) PURCHASER'S DESIGNEES HAVE BEEN ELECTED TO
THE BOARD OF DIRECTORS OF PENNZOIL SO THAT AFTER SUCH ELECTION SUCH DESIGNEES
CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS OF PENNZOIL, OR (2) PENNZOIL HAS
ENTERED INTO A MUTUALLY SATISFACTORY DEFINITIVE MERGER AGREEMENT WITH UNION
PACIFIC RESOURCES GROUP INC. ("UPR") AND PURCHASER TO PROVIDE FOR THE
ACQUISITION OF PENNZOIL PURSUANT TO THE OFFER AND THE PROPOSED MERGER. THE OFFER
IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THIS SUPPLEMENT. SEE
SECTION 10 OF THIS SUPPLEMENT.
THE OFFER IS NOT CONDITIONED ON PURCHASER OBTAINING FINANCING.
IMPORTANT
UPR AND PURCHASER ARE CURRENTLY REVIEWING THEIR OPTIONS WITH RESPECT TO THE
OFFER AND MAY CONSIDER, AMONG OTHER THINGS, CHANGES TO THE MATERIAL TERMS OF THE
OFFER. IN ADDITION, UPR AND PURCHASER INTEND TO CONTINUE TO SEEK TO NEGOTIATE
WITH PENNZOIL WITH RESPECT TO THE ACQUISITION OF PENNZOIL BY UPR OR PURCHASER.
PURCHASER RESERVES THE RIGHT TO AMEND THE OFFER (INCLUDING AMENDING THE NUMBER
OF SHARES TO BE PURCHASED, THE PURCHASE PRICE AND THE PROPOSED SECOND-STEP
MERGER CONSIDERATION) UPON ENTERING INTO A SECOND-STEP MERGER AGREEMENT WITH
PENNZOIL OR TO NEGOTIATE A MERGER AGREEMENT WITH PENNZOIL NOT INVOLVING A TENDER
OFFER PURSUANT TO WHICH PURCHASER WOULD TERMINATE THE OFFER AND THE SHARES
WOULD, UPON CONSUMMATION OF SUCH MERGER, BE CONVERTED INTO CASH, UPR COMMON
STOCK AND/OR OTHER SECURITIES IN SUCH AMOUNTS AS ARE NEGOTIATED BY UPR AND
PENNZOIL. SEE SECTION 8 OF THIS SUPPLEMENT.
Any Pennzoil stockholder desiring to tender all or any portion of such
stockholder's Shares (and the associated Rights) should either (i) complete and
sign the revised Letter of Transmittal (or a facsimile thereof) in accordance
with the instructions in the revised Letter of Transmittal, have such
stockholder's signature thereon guaranteed if required by Instruction 1 to the
revised Letter of Transmittal, mail or deliver the revised Letter of Transmittal
(or such facsimile), or, in the case of a book-entry transfer effected pursuant
to the procedure set forth in Section 2 of the Original Offer to Purchase and
Section 2 of this Supplement, an Agent's Message (as defined herein), and any
other required documents to the Depositary and either deliver the certificates
for such Shares and, if separate, the certificate(s) representing the associated
Rights to the Depositary along with the revised Letter of Transmittal (or
facsimile) or deliver such Shares (and associated Rights, if applicable)
pursuant to the procedure for book-entry transfer set forth in Section 2 of the
Original Offer to Purchase and Section 2 of this Supplement, or (ii) request
such stockholder's broker, dealer, bank, trust company or other nominee to
effect the transaction for such stockholder. A Pennzoil stockholder having
Shares (and, if applicable, Rights) registered in the name of a broker, dealer,
bank, trust company or other nominee must contact such broker, dealer, bank,
trust company or other nominee if such stockholder desires to tender such Shares
(and, if applicable, Rights). Unless the Board Action Condition (as defined
herein) with respect to the Rights is satisfied, stockholders will be required
to tender one Right for each Share tendered in order to effect a valid tender of
Shares.
If a Pennzoil stockholder desires to tender Shares and Rights and such
stockholder's certificates for Shares (or Rights, if applicable) are not
immediately available or the procedure for book-entry transfer cannot be
completed on a timely basis, or time will not permit all required documents to
reach the Depositary prior to the Expiration Date, such stockholder's tender may
be effected by following the procedure for guaranteed delivery set forth in
Section 2 of the Original Offer to Purchase and Section 2 of this Supplement.
STOCKHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED SHARES PURSUANT TO THE
OFFER AND WHO HAVE NOT WITHDRAWN SUCH SHARES NEED NOT TAKE ANY FURTHER ACTION.
Questions and requests for assistance or for additional copies of the
Original Offer to Purchase, this Supplement, the revised Letter of Transmittal
and the revised Notice of Guaranteed Delivery may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of the Original Offer to Purchase and this
Supplement. A Pennzoil stockholder may also contact brokers, dealers, commercial
banks, trust companies or other nominees for assistance concerning the Offer.
------------------------------
The Dealer Manager for the Offer is:
SMITH BARNEY INC.
October 7, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
----
INTRODUCTION.............................................................. 1
THE TENDER OFFER.......................................................... 4
1. Amended Terms of the Offer............................................ 4
2. Procedure for Tendering Shares and Rights............................. 5
3. Withdrawal Rights..................................................... 5
4. Certain Federal Income Tax Consequences............................... 5
5. Price Range of the Shares; Dividends on the Shares.................... 6
6. Recent Financial Results.............................................. 7
7. Source and Amount of Funds............................................ 8
8. Background of the Offer Since June 23, 1997; Contacts with Pennzoil... 8
9. Purpose of the Offer; Plans for Pennzoil.............................. 13
10. Certain Amended Conditions of the Offer............................... 15
11. Certain Legal Matters................................................. 18
12. Miscellaneous......................................................... 18
<PAGE>
To the Holders of Common Stock
(including the associated Preferred Stock Purchase Rights) of
Pennzoil Company:
INTRODUCTION
On June 23, 1997, Resources Newco, Inc., a Delaware corporation
("Purchaser"), commenced a tender offer for shares of Common Stock, par value
$0.83 1/3 per share (the "Shares"), of Pennzoil Company, a Delaware corporation
("Pennzoil"), pursuant to the Offer to Purchase, dated June 23, 1997 (the
"Original Offer to Purchase"). Purchaser is a wholly-owned subsidiary of Union
Pacific Resources Group Inc., a Utah corporation ("UPR"). The tender offer
described in the Original Offer to Purchase (the "Original Offer") constituted
an offer to purchase up to 50.1% of the fully-diluted Shares for a purchase
price of $84.00 per Share, which was a 41% premium over the $59.625 closing
price per Share on the New York Stock Exchange on June 20, 1997, the last
trading day before commencement of the Original Offer. If the Original Offer was
successful, Shares not acquired in the Original Offer were to be converted into
shares of Common Stock, no par value, of UPR as described in the Original Offer
to Purchase.
The Original Offer was conditioned, among other things, on the Board of
Directors of Pennzoil taking action to amend a number of Pennzoil's takeover
defenses to make them inapplicable to the Original Offer. On July 1, 1997,
Pennzoil filed a Schedule 14D-9 which described the recommendation of the
Pennzoil Board that stockholders not tender their Shares pursuant to the
Original Offer. Notwithstanding that recommendation, on July 22, 1997, the
original expiration date of the Original Offer, approximately 61.5% of the
outstanding Shares had been tendered pursuant to the Original Offer. Purchaser
was unable to consummate the Original Offer, however, because the Board of
Directors of Pennzoil (the "Pennzoil Board") had not fulfilled the conditions to
the Original Offer and had not made the Pennzoil takeover defenses inapplicable
to the Original Offer. Purchaser extended the expiration date of the Original
Offer.
On the terms and conditions described in this Supplement (the
"Supplement"), Purchaser is now amending and supplementing the Original Offer to
Purchase to provide that Purchaser is offering to purchase all Shares (rather
than 50.1% of the fully-diluted Shares), together with (unless and until
Purchaser declares that the Board Action Condition (as defined below) is
satisfied) the associated preferred stock purchase rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of October 28, 1994, as it may from
time to time be supplemented or amended (the "Rights Agreement"), between
Pennzoil and Chemical Bank, as Rights Agent (the "Rights Agent"). The price to
be paid in the Offer is $84.00 per Share (and associated Right), net to the
seller in cash, without interest thereon (the "Offer Price"). If the Offer is
consummated, Purchaser intends to effect a merger with Pennzoil in which all
outstanding Shares not tendered in the Offer will be converted into $84.00 in
cash, without interest. The Expiration Date of the Offer has been extended to
12:00 Midnight, New York City time, on November 5, 1997.
IF YOU HAVE PREVIOUSLY VALIDLY TENDERED SHARES PURSUANT TO THE ORIGINAL
OFFER USING THE BLUE LETTER OF TRANSMITTAL OR THE YELLOW NOTICE OF GUARANTEED
DELIVERY AND HAVE NOT PROPERLY WITHDRAWN SUCH SHARES, YOU NEED TAKE NO FURTHER
ACTION TO VALIDLY TENDER SUCH SHARES FOR PURPOSES OF THE OFFER AS AMENDED BY
THIS SUPPLEMENT.
The information contained in this Supplement and the revised Letter of
Transmittal amends and supplements the Original Offer to Purchase. The Original
Offer, as amended as described in this Supplement and the revised Letter of
Transmittal (together with any amendments or supplements hereto or thereto), is
referred to as the "Offer", and the Original Offer to Purchase, as amended and
supplemented as described in this Supplement, is referred to as the "Offer to
Purchase." All references herein to Rights shall include all benefits that may
inure to holders of the Rights pursuant to the Rights Agreement and, unless the
context otherwise requires, all references herein to Shares shall include the
Rights.
The purpose of the Offer is to acquire all of the outstanding Shares of
Pennzoil. UPR is seeking to negotiate with Pennzoil a definitive acquisition
agreement (the "Proposed Merger Agreement") pursuant to which Pennzoil would, as
soon as practicable following consummation of the Offer, consummate a merger
(the "Proposed Merger") with Purchaser or another direct or indirect wholly
owned subsidiary of UPR. At
<PAGE>
the effective time of the Proposed Merger, each Share that is issued and
outstanding immediately prior to the effective time (other than Shares held in
the treasury of Pennzoil or owned by UPR, Purchaser or any direct or indirect
wholly owned subsidiary of UPR and Shares ("Dissenting Shares") held by
stockholders who properly exercise appraisal rights under the Delaware General
Corporation Law (the "Delaware Law")) would be converted into the right to
receive $84.00 in cash. See Sections 10 ("Background of the Offer; Contacts with
Pennzoil") and 11 ("Purpose of the Offer; Plans for Pennzoil") of the Original
Offer to Purchase and Sections 8 and 9 of this Supplement. To date, Pennzoil has
refused to enter into negotiations with UPR regarding the merger proposed in the
Original Offer or the Proposed Merger. There can be no assurance that such
negotiations will occur, or if such negotiations occur, as to the outcome
thereof. UPR and Purchaser are exploring ways to encourage the Pennzoil Board to
permit Pennzoil's stockholders to participate in the Offer and the Proposed
Merger. See Sections 10 ("Background of the Offer; Contacts with Pennzoil") and
11 ("Purpose of the Offer; Plans for Pennzoil") of the Original Offer to
Purchase and Sections 8 and 9 of this Supplement.
In a letter dated October 6, 1997, Jack L. Messman, the Chairman and Chief
Executive Officer of UPR, informed James L. Pate, the Chairman, President and
Chief Executive Officer of Pennzoil, of the revisions to the Original Offer
described in this Supplement. In that letter, Mr. Messman advised Mr. Pate that,
if Pennzoil would begin negotiations with UPR, UPR would consider a transaction
structure that would provide Pennzoil shareholders with the opportunity to
benefit directly from a future increase in value, if it occurs, of Pennzoil's
international (i.e., non-North American) exploration and production assets,
above the $600 million in value UPR has ascribed to such assets. See Section 8
of this Supplement.
The Offer is conditioned on, among other things, either Purchaser's
designees constituting a majority of the Pennzoil Board or Pennzoil having
entered into a mutually acceptable definitive merger agreement with UPR and
Purchaser to provide for the acquisition of Pennzoil pursuant to the Offer and
the Proposed Merger. See Section 10 of this Supplement. BY TENDERING SHARES IN
THE OFFER, PENNZOIL'S STOCKHOLDERS EFFECTIVELY WILL EXPRESS TO THE BOARD THAT
THEY WISH TO BE ABLE TO ACCEPT THE OFFER AND TO APPROVE THE PROPOSED MERGER OR A
SIMILAR TRANSACTION WITH UPR AND ITS AFFILIATES.
Except as otherwise set forth in this Supplement, the terms and conditions
previously set forth in the Original Offer to Purchase remain applicable in all
respects to the Offer, and this Supplement should be read in conjunction with
the Original Offer to Purchase. Unless the context requires otherwise, terms not
defined herein have the meanings ascribed to them in the Original Offer to
Purchase.
Certain federal income tax consequences of the sale of Shares pursuant to
the Offer are described in Section 4 of this Supplement.
THE OFFER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF OFFERS TO BUY
ANY SECURITIES WHICH MAY BE ISSUED IN ANY MERGER OR SIMILAR BUSINESS COMBINATION
INVOLVING PURCHASER, UPR OR PENNZOIL. THE ISSUANCE OF SUCH SECURITIES WOULD HAVE
TO BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND SUCH SECURITIES WOULD BE OFFERED ONLY BY MEANS OF A PROSPECTUS
COMPLYING WITH THE REQUIREMENTS OF THE SECURITIES ACT.
The Offer is subject to the fulfillment of a number of conditions,
including, without limitation, the following:
Minimum Tender Condition. The Minimum Tender Condition requires that there
are validly tendered and not withdrawn prior to the Expiration Date (as defined
in Section 1 of this Supplement) at least that number of Shares which, together
with Shares owned by Purchaser and its affiliates, will constitute at least a
majority of the total number of all outstanding Shares on a fully diluted basis
(as though all options or other securities convertible into or exercisable or
exchangeable for Shares had been so converted, exercised or exchanged) on the
date Shares are accepted for payment, without giving effect to any dilution that
might arise from exercise of the Rights. See Sections 1 ("Terms of the Offer")
and 14 ("Certain Conditions of the Offer") of the Original Offer to Purchase.
According to Pennzoil's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1997 (the "Pennzoil 10-Q"), as of July 31, 1997 there
were 47,190,592 Shares issued and outstanding. In addition, according to
Pennzoil's Annual Report on Form 10-K for the fiscal year ended December 31,
1996 (the
2
<PAGE>
"Pennzoil 10-K"), as of December 31, 1996 there were 3,311,921 Shares subject to
options outstanding under Pennzoil's stock option plans. UPR and Purchaser
currently own an aggregate of 87,600 Shares which wereacquired in open market
purchases. See Schedule II to the Original Offer to Purchase. Based on the
foregoing and assuming that no options were granted or expired after December
31, 1996 and no options were exercised after December 31, 1996 through July 31,
1997, there would be 50,502,513 Shares outstanding on a fully diluted basis and
the Minimum Number of Shares would be 25,163,657. However, the actual Minimum
Number of Shares will depend on the facts as they exist on the date of purchase.
Board Action Condition. The Board Action Condition requires that Purchaser
be satisfied in its reasonable discretion that the Pennzoil Board has
irrevocably taken all such action so that (a) the acquisition of Shares pursuant
to the Offer and the Proposed Merger have been approved pursuant to Section 203
("Section 203") of the Delaware Law or the provisions of Section 203 are
otherwise inapplicable to the acquisition of Shares pursuant to the Offer and
the Proposed Merger, (b) the acquisition of Shares pursuant to the Offer and the
Proposed Merger have been approved pursuant to Article Sixth of Pennzoil's
Restated Certificate of Incorporation, (c) the Rights have been redeemed or
Purchaser is satisfied in its reasonable discretion that the Rights have been
invalidated or are otherwise inapplicable to the Offer and the Proposed Merger,
and (d) either (1) Purchaser's designees have been elected to the Pennzoil Board
so that after such election, such designees constitute a majority of the
Pennzoil Board, or (2) Pennzoil has entered into a mutually satisfactory
definitive merger agreement with UPR and Purchaser to provide for the
acquisition of Pennzoil pursuant to the Offer and the Proposed Merger described
herein. Information concerning Section 203, the Rights and various provisions of
Pennzoil's certificate of incorporation and by-laws is contained in the
Introduction to, and Sections 11 ("Purpose of the Offer; Plans for Pennzoil")
and 15 ("Certain Legal Matters") of, the Original Offer to Purchase.
Purchaser will waive the Board Action Condition if at least 90% of the
outstanding Shares have been tendered before the expiration of the Offer and not
withdrawn, all other conditions to the Offer have been satisfied or waived and
(1) Purchaser is satisfied in its reasonable discretion that, immediately
following the consummation of the Offer, Purchaser will have the ability to
effectuate a short-form merger with Pennzoil under Section 253 of the Delaware
Law and under Article Sixth of Pennzoil's Restated Certificate of Incorporation
(the "Short-Form Merger"), and (2) the Pennzoil Board has irrevocably taken such
action so that the Rights have been redeemed or Purchaser is satisfied in its
reasonable discretion that the Rights have been invalidated or are otherwise
inapplicable to the Offer. In the Short-Form Merger, each Share that is issued
and outstanding immediately prior to the effective time of the Short-Form Merger
(other than Shares held in the treasury of UPR or owned by Purchaser or any
affiliate of Purchaser) would be converted into the right to receive $84.00 in
cash.
UPR and Purchaser are hereby requesting that the Pennzoil Board take such
action as is necessary to satisfy the Board Action Condition in order to give
Pennzoil stockholders the opportunity to decide for themselves whether they wish
to take advantage of the Offer by tendering their Shares in the Offer.
Purchaser presently intends to extend the Offer from time to time until the
Board Action Condition is satisfied or Purchaser determines, in its reasonable
discretion, that such condition is not reasonably likely to be satisfied under
then current circumstances. Although UPR has sought to enter into negotiations
with Pennzoil with respect to the Proposed Merger and intends to continue to
pursue such negotiations, there can be no assurances that such negotiations will
occur or, if such negotiations occur, as to the outcome thereof.
Certain other conditions to the Offer are described in Section 10 of this
Supplement. Purchaser reserves the right (but shall not be obligated) to waive
any or all such conditions.
THE ORIGINAL OFFER TO PURCHASE, THIS SUPPLEMENT AND THE REVISED LETTER OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
3
<PAGE>
THE TENDER OFFER
1. AMENDED TERMS OF THE OFFER.
The terms of the Offer are set forth in Section 1 ("Terms of the Offer") of
the Original Offer to Purchase as supplemented and amended by Section 1 of this
Supplement. The Offer is being made for all of the Shares, whereas the Original
Offer was made for only 50.1% of the fully-diluted Shares.
The price to be paid pursuant to the Offer is $84.00 per Share, net to the
seller in cash and without interest thereon. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any extension or amendment), Purchaser will accept for
payment and pay the Offer Price for all of the Shares validly tendered prior to
the Expiration Date (as hereinafter defined) and not theretofore withdrawn in
accordance with Section 3 ("Withdrawal Rights") of the Original Offer to
Purchase and Section 3 of this Supplement. The term "Expiration Date" means
12:00 Midnight, New York City time, on Wednesday, November 5, 1997, unless and
until Purchaser, in its reasonable discretion, shall have extended the period of
time during which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by
Purchaser, will expire.
Consummation of the Offer is conditioned upon, among other things,
satisfaction of the Minimum Tender Condition and the Board Action Condition. If
any or all of such conditions are not satisfied or any or all of the other
events set forth in Section 10 of this Supplement shall have occurred or shall
be determined by Purchaser to have occurred prior to the Expiration Date,
Purchaser reserves the right (but shall not be obligated) to (i) decline to
purchase any or all of the Shares tendered and terminate the Offer, and return
all tendered Shares to tendering stockholders, (ii) waive or reduce the Minimum
Tender Condition or waive or reduce any or all other conditions and, subject to
complying with applicable rules and regulations of the Commission, purchase all
Shares validly tendered, or (iii) extend the Offer and, subject to the right of
stockholders to withdraw Shares until the Expiration Date, retain the Shares
which have been tendered during the period or periods for which the Offer is
extended.
Purchaser expressly reserves the right, in its reasonable discretion, at
any time and from time to time, to extend for any reason the period of time
during which the Offer is open, including the occurrence of any of the events
specified in Section 10 of this Supplement, by giving oral or written notice of
such extension to the Depositary. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the rights of a tendering stockholder to withdraw its Shares. See Section 3
("Withdrawal Rights") of the Original Offer to Purchase and Section 3 of this
Supplement. Under no circumstances will interest be paid on the purchase price
for tendered Shares, whether or not Purchaser exercises its right to extend the
Offer.
Subject to the applicable regulations of the Commission, Purchaser also
expressly reserves the right, in its reasonable discretion at any time and from
time to time, (i) to delay acceptance for payment of, or, regardless of whether
such Shares were theretofore accepted for payment, payment for, any Shares
pending receipt of any regulatory approval specified in Section 15 ("Certain
Legal Matters") of the Original Offer to Purchase or in order to comply in whole
or in part with any other applicable law, (ii) to terminate the Offer and not
accept for payment any Shares if any of the conditions referred to in Section 10
of this Supplement have not been satisfied or upon the occurrence of any of the
events specified in Section 10 of this Supplement and (iii) to waive any
condition or otherwise amend the Offer in any respect by giving oral or written
notice of such delay, termination, waiver or amendment to the Depositary and by
making a public announcement thereof.
On or about October 7, 1997, Purchaser sent or gave this Supplement and the
revised Letter of Transmittal and other relevant materials to Pennzoil's
stockholders and sent or gave such materials, for subsequent transmittal to
beneficial owners of Shares, to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list of Pennzoil or, if applicable, who are listed as
participants in a clearing agency's security position listing.
4
<PAGE>
2. PROCEDURE FOR TENDERING SHARES AND RIGHTS.
Procedures for tendering Shares are set forth in Section 2 ("Procedure for
Tendering Shares and Rights") of the Original Offer to Purchase, as supplemented
by Section 2 of this Supplement. Section 2 of the Original Offer to Purchase
generally describes the procedures for making a valid tender of Shares,
including tenders through book-entry transfer and guaranteed delivery.
STOCKHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED (AND NOT WITHDRAWN) THEIR
SHARES PURSUANT TO THE ORIGINAL OFFER NEED NOT TAKE ANY FURTHER ACTION TO HAVE
VALIDLY TENDERED THEIR SHARES FOR PURPOSES OF THE OFFER, AS AMENDED.
Tendering stockholders should use the revised PINK Letter of Transmittal or
the revised BLUE Notice of Guaranteed Delivery included with this Supplement.
However, to the extent the PINK Letter of Transmittal or the revised BLUE Notice
of Guaranteed Delivery is not obtainable, tendering stockholders may continue to
use the BLUE Letter of Transmittal and the YELLOW Notice of Guaranteed Delivery
that were provided with the Original Offer to Purchase. Although such BLUE
Letter of Transmittal indicates that the Offer will expire at 12:00 Midnight,
New York City time, on Monday, July 21, 1997, stockholders will be able to
tender their Shares pursuant to the Offer until 12:00 Midnight, New York City
time, on Wednesday, November 5, 1997 (or such later date to which the Offer may
be extended). Stockholders who have previously validly tendered Shares pursuant
to the Original Offer using the BLUE Letter of Transmittal or the YELLOW Notice
of Guaranteed Delivery and who have not properly withdrawn such Shares have
validly tendered such Shares for the purposes of the Offer and need not take any
further action.
3. WITHDRAWAL RIGHTS.
The discussion set forth in Section 3 ("Withdrawal Rights") of the Original
Offer to Purchase is hereby amended and supplemented as follows:
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the acceptance for payment of Shares in the Offer. Section 3 of the Original
Offer to Purchase describes the procedure to be followed to effect a withdrawal
of Shares tendered pursuant to the Offer.
4. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The discussion set forth in Section 5 ("Certain Federal Income Tax
Consequences") of the Original Offer to Purchase is hereby amended and restated
as follows:
The following discussion is a summary of certain material federal income
tax consequences of the Offer and Proposed Merger to holders of Shares who hold
the Shares as capital assets. The discussion set forth below is for general
information only and may not apply to particular categories of holders of Shares
subject to special treatment under the Internal Revenue Code of 1986, as amended
(the "Code"). The discussion is based on the Code as in effect on the date of
this Supplement, as well as regulations promulgated thereunder and existing
administrative interpretations and court decisions.
Consequences of the Offer and the Proposed Merger Generally. If the
Proposed Merger is consummated, the Offer and Proposed Merger should be treated
as a single integrated transaction for federal income tax purposes, and the
Offer and Proposed Merger together would be a taxable transaction for federal
income tax purposes and may be a taxable transaction for foreign, state and
local income tax purposes as well. If, for any reason, the Proposed Merger is
not consummated, the receipt of cash pursuant to the Offer would still be a
taxable exchange.
In general, a stockholder of Pennzoil who, pursuant to the Offer and/or the
Proposed Merger, exchanges Shares for cash will recognize capital gain or loss
on the date of acceptance of Shares for purchase pursuant to the Offer or at the
effective time of the Proposed Merger, as the case may be, in an amount equal to
the difference between the amount of cash received and the stockholder's
adjusted tax basis in the Shares accepted for payment in the Offer or
surrendered in the Proposed Merger. The gain or loss will be long-term capital
gain or loss if, as of the date of the exchange pursuant to the Offer or as of
the effective time of the Proposed Merger, the holders thereof have held such
Shares for more than eighteen months, and will be mid-term capital gain or loss
if, as of
5
<PAGE>
the date of the exchange pursuant to the Offer or as of the effective time of
the Proposed Merger, the holders thereof have held such Shares for more than one
year but not more than eighteen months.
Withholding. Unless a stockholder complies with certain reporting and/or
certification procedures or is an exempt recipient under applicable provisions
of the Code and Treasury Regulations promulgated thereunder, such stockholder
may be subject to withholding tax of 31% with respect to any cash payments
received pursuant to the Offer and Proposed Merger. Stockholders should consult
their brokers to ensure compliance with such procedures. Foreign stockholders
should consult with their own tax advisors regarding withholding taxes in
general.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. THE ABOVE DISCUSSION MAY NOT APPLY TO PARTICULAR CATEGORIES OF
HOLDERS OF SHARES SUBJECT TO SPECIAL TREATMENT UNDER THE CODE, SUCH AS FOREIGN
HOLDERS AND HOLDERS WHOSE SHARES WERE ACQUIRED PURSUANT TO THE EXERCISE OF AN
EMPLOYEE STOCK OPTION OR OTHERWISE AS COMPENSATION, OR WHO HOLD RESTRICTED
STOCK. STOCKHOLDERS OF PENNZOIL ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE OFFER AND THE PROPOSED MERGER,
INCLUDING ANY STATE, LOCAL OR OTHER TAX CONSEQUENCES OF THE OFFER AND THE
PROPOSED MERGER.
5. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES.
The discussion set forth in Section 6 ("Price Range of the Shares;
Dividends on the Shares") of the Original Offer to Purchase is hereby amended
and supplemented as follows:
The following table sets forth, for each of the periods indicated, the high
and low sales prices for the Shares on the NYSE Composite Tape and the amount of
cash dividends paid per Share, all as reported in published financial sources.
PENNZOIL COMMON STOCK
---------------------------
FISCAL YEAR ENDING HIGH LOW DIVIDENDS
- ------------------ ------ ------ ---------
December 31, 1997:
First Quarter.............................. $63.50 $49.88 $.25
Second Quarter............................. 83.88 45.00 .25
Third Quarter.............................. 81.25 72.25 .25
Fourth Quarter (through October 3, 1997)... 82.50 79.81 --
On October 3, 1997, which was the last trading day before UPR's
announcement that it was amending the Offer upon the terms set forth in this
Supplement, the last reported closing price on the NYSE Composite Tape was
$81.4375 per Share. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR THE SHARES.
6
<PAGE>
6. RECENT FINANCIAL RESULTS.
The financial information contained in Section 7 ("Certain Information
Concerning Pennzoil") and Section 8 ("Certain Information Concerning Purchaser
and UPR") is hereby supplemented with the following financial information for
June 30, 1997 and the six months then ended:
PENNZOIL COMPANY
RECENT CONSOLIDATED FINANCIAL INFORMATION
(EXPRESSED IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------------
1996 1997
--------- ---------
<S> <C> <C>
INCOME STATEMENT DATA:
Revenues.................................................... $ 1,223.9 $ 1,297.4
Net income(1)............................................... 40.3 81.4
Earnings per share.......................................... .87 1.74
Dividends per common share.................................. .50 .50
FINANCIAL POSITION DATA:
Total assets................................................ $ 4,386.3 $ 4,224.8
Total debt (consisting of long-term debt, including current
maturities)............................................... 2,572.2 2,243.8
Total shareholders' equity(2)............................... 887.8 1,045.5
</TABLE>
- ------------------
(1) Reference is made to Notes 1 and 8 of Notes to Consolidated Financial
Statements contained in the Pennzoil 10-K.
(2) Reference is made to Note 1 of Notes to Consolidated Financial Statements
contained in the Pennzoil 10-K.
UNION PACIFIC RESOURCES GROUP INC.
RECENT CONSOLIDATED FINANCIAL INFORMATION
(EXPRESSED IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------------
1996 1997
--------- ---------
<S> <C> <C>
INCOME STATEMENT DATA:
Operating revenues.......................................... $ 817.6 $ 976.3
Operating income............................................ 217.4 301.4
Net income.................................................. 129.6 191.6
Per Share:
Net income................................................ $ .52 $ .76
Dividends................................................. .10 .10
FINANCIAL POSITION DATA:
Properties -- net........................................... $ 2,833.6 $ 3,273.7
Total assets................................................ 3,303.7 3,767.5
Long-term debt.............................................. 126.3 672.7
Shareholders' equity........................................ 1,419.3 1,692.0
CASH FLOW DATA:
Capital and exploratory expenditures........................ $ 367.9 $ 643.1
Cash provided by operations................................. 409.0 572.1
</TABLE>
The foregoing information has been derived from, and more comprehensive
information is included in, the Quarterly Reports of Pennzoil on Form 10-Q for
the quarters ended June 30, 1996 and 1997 and the Quarterly Reports of UPR on
Form 10-Q for the quarters ended June 30, 1996 and 1997, respectively. These
filings are available as described under the sub-caption "Available Information"
in Sections 7 ("Certain Information Concerning Pennzoil") and 8 ("Certain
Information Concerning Purchaser and UPR"), respectively, of the Original Offer
to Purchase.
7
<PAGE>
7. SOURCE AND AMOUNT OF FUNDS.
The discussion set forth in Section 9 ("Source and Amount of Funds") of the
Original Offer to Purchase is hereby amended and restated as follows:
As a result of the amended Offer, Purchaser now estimates that the total
amount of funds required to acquire the outstanding Shares pursuant to the Offer
and the Proposed Merger and to pay fees and expenses related to the Offer will
be approximately $4.2 billion.
As stated in the Original Offer to Purchase, Purchaser plans to obtain the
necessary funds through capital contributions or advances made by UPR. UPR and
Purchaser expect to obtain the funds necessary to make such contributions or
advances from UPR's available cash and working capital, commercial paper
issuances supported by a credit facility and borrowings under such credit
facility. UPR and Purchaser are currently in discussions with a small group of
financial institutions regarding the establishment of such credit facility that
would be used to support the commercial paper issuances and borrowings. Any
borrowings under such credit facility are expected to be unsecured and to have
various maturities up to three years. It is anticipated that the indebtedness
incurred by UPR under the commercial paper issuances and such credit facility
will be repaid from a combination of the sale of certain assets of UPR and
Pennzoil and the public or private sale of equity and debt securities, as well
as from cash flow generated by UPR and its subsidiaries (including, after the
Proposed Merger, if consummated, Pennzoil and its subsidiaries), or through a
combination of such sources. UPR does not expect that the interest rate on any
such borrowings would be materially greater than the interest rate currently
applicable under UPR's existing credit facility. No final decisions have been
made concerning the method UPR will employ to repay such indebtedness and no
definitive agreements have been entered into regarding such credit facility or
any such sale of assets of UPR or Pennzoil. Asset sale possibilities include
Pennzoil's downstream operations, and selected producing properties and other
assets of both UPR and Pennzoil. See Section 9 of this Supplement. Such
decisions when made will be based on UPR's review from time to time of the
advisability of particular actions, as well as on prevailing interest rates and
financial and other economic conditions. This Offer is not conditioned on
financing.
8. BACKGROUND OF THE OFFER SINCE JUNE 23, 1997; CONTACTS WITH PENNZOIL.
Section 10 ("Background of the Offer; Contacts with Pennzoil") of the
Original Offer to Purchase describes various contacts between UPR and Pennzoil
prior to commencement of the Original Offer on June 23, 1997. The disclosure
contained in Section 10 of the Original Offer to Purchase is hereby amended and
supplemented as follows to describe various contacts with Pennzoil and related
matters since June 23, 1997:
On June 25, 1997, UPR and Purchaser amended their original complaint (the
"Original Complaint") filed against Pennzoil on June 23, 1997 in the United
States District Court for the Northern District of Texas (the "Texas Federal
Action"). In addition to reiterating the allegations contained in the Original
Complaint, the Amended Complaint alleges, among other things, that Pennzoil
violated Sections 14(d) and 14(e) of the Exchange Act, and Rule 14d-9
promulgated thereunder, by making certain materially false and misleading
statements concerning the Offer contained in an Associated Press story.
On June 25, 1997, Pennzoil filed an action in the United States District
Court for the District of Delaware (Pennzoil Co. v. Union Pacific Resources
Group, Inc. et al., C.A. No. 97-353 (JJF) (D. Del.)) (hereinafter, the "Delaware
Federal Action"). In the Delaware Federal Action, Pennzoil alleged that UPR and
Purchaser had violated the Exchange Act by making materially false and
misleading statements in connection with the Offer. On July 18, 1997, the Court
in the Texas Federal Action entered an order prohibiting Pennzoil from pursuing
any relief in the Delaware Federal Action.
On June 25, 1997, UPR filed with the Antitrust Division of the Department
of Justice and the Federal Trade Commission a Notification and Report Form with
respect to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and a request for early termination of the
applicable 15-calendar-day waiting period under the HSR Act.
On July 1, 1997, Pennzoil filed a Schedule 14D-9 (the "Schedule 14D-9")
with the Commission. The Schedule 14D-9 included the Pennzoil Board's
determination that the Original Offer (and the merger proposed in
8
<PAGE>
the Original Offer) was inadequate and not in the best interests of Pennzoil and
its stockholders and it recommended that Pennzoil stockholders reject the Offer
and not tender Pennzoil Shares pursuant to the Offer. The Schedule 14D-9
disclosed that many of the factors considered by the Pennzoil Board in reaching
its determination and recommendation relate to issues which are no longer
applicable to the Offer, as amended, including concerns of the Pennzoil Board
over the structure of the Original Offer, the value of the UPR Common Stock
which would have been received by the holders of 49.9% of the fully-diluted
Shares in the proposed merger after consummation of the Original Offer, the tax
consequences of the proposed merger after consummation of the Original Offer,
and the uncertainty of the completion of the proposed merger after consummation
of the Original Offer.
On July 10, 1997 (at 11:59 p.m., New York City time), the waiting period
under the HSR Act expired.
On July 11, 1997, UPR and Purchaser filed a Second Amended Complaint in the
Texas Federal Action. In addition to reiterating the allegations contained in
the First Amended Complaint, the Second Amended Complaint alleges, among other
things, that Pennzoil violated Sections 14(d) and 14(e) of the Exchange Act, and
Rule 14d-9, promulgated thereunder, by making materially false and misleading
statements in its July 1, 1997 Schedule 14D-9, including failing to disclose
information about management's views as to the amount of "long term value" and
"share price appreciation" Pennzoil shareholders can expect to receive if
Pennzoil's strategic plan is implemented successfully. In the Second Amended
Complaint, UPR and Purchaser sought a judgment compelling Pennzoil to comply
with the requirements of the Exchange Act and requiring Pennzoil to file and
disseminate an amended Schedule 14D-9 which is complete and accurate and which
corrects the alleged materially false and misleading statements in the initial
Schedule 14D-9.
On July 18, 1997, in the Texas Federal Action the United States District
Court for the Northern District of Texas, Fort Worth Division entered an order
in Union Pacific Resources Group Inc., et. al., v. Pennzoil Company denying
Pennzoil's amended motion to dismiss the action and partially granting UPR's
motion for preliminary injunction against Pennzoil enjoining Pennzoil from,
among other things, prosecuting or seeking any relief in the matter of Pennzoil
Company v. Union Pacific Resources Group Inc. and Resources Newco, Inc. in the
United States District Court for the District of Delaware.
On July 22, 1997, UPR announced that 61.5% of the outstanding Shares had
been tendered in the Original Offer and that UPR and Purchaser were extending
the expiration date for the Offer to 12:00 Midnight, New York City time, on
Wednesday, September 24, 1997.
On August 11, 1997, Pennzoil made an application for a preliminary
injunction in the Texas Federal Action. The basis for Pennzoil's application was
its assertions that certain information contained in documents that UPR and
Purchaser had provided to Pennzoil in connection with discovery in the Texas
Federal Action should have been disclosed. In connection with such application,
Pennzoil sought an order requiring UPR and Purchaser to withdraw the Original
Offer and enjoining UPR and Purchaser from making any other offer for the Shares
until UPR and Purchaser disclosed such information to the public. On September
8, 1997, UPR and Purchaser filed Amendment No. 20 to the Schedule 14D-1, in
which they disclosed the information that Pennzoil claimed should have been
disclosed, although UPR and Purchaser did not and do not concede that any such
disclosure was required under applicable law. On September 10, 1997, at a
hearing before the United States District Court in the Texas Federal Action, the
Court denied Pennzoil's application for a preliminary injunction as moot.
Additionally, at such hearing UPR and Purchaser confirmed that certain of the
documents referred to in Amendment No. 20 were no longer subject to a
confidentiality order previously entered in the Texas Federal Action.
On August 12, 1997, UPR moved in the Texas Federal Action for an order
prohibiting the law firm of Baker & Botts from advising Pennzoil in any manner
in connection with the Offer or any litigation concerning the Offer to which UPR
or Purchaser is a party. In this motion, UPR claims that such disqualification
is warranted because Baker & Botts has acted as counsel to UPR and its
affiliates in a variety of matters over the past several years and has received
from them confidential information concerning their business and affairs.
Pennzoil and Baker & Botts have filed papers with the Court in the Texas Federal
Action denying that disqualification is necessary or appropriate and that Baker
& Botts received any such information.
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On August 27, 1997, UPR announced that it and Purchaser were extending the
expiration date for the Offer to 12:00 Midnight, New York City time, on
Wednesday, October 29, 1997.
On September 15, 1997, UPR and Purchaser made an application for a
preliminary injunction against Pennzoil in the Texas Federal Action. In
connection with this motion, UPR and Purchaser allege that Pennzoil has violated
Sections 14(d) and 14(e) of the Exchange Act by failing to disclose its most
recent strategic plan upon which the Pennzoil Board relied in rejecting the
Original Offer. UPR and Purchaser seek entry of an order requiring Pennzoil to
make corrective disclosure and enjoining Pennzoil from making any further
recommendation concerning the Offer for a period of 21 days following
dissemination of such disclosure to the Pennzoil stockholders. The United States
District Court for the Northern District of Texas has scheduled a hearing on
UPR's and Purchaser's application for preliminary injunction for October 15,
1997.
On September 22, 1997, Pennzoil commenced an action in the District Court
of Dallas County, Texas (the "Texas Smith Barney Action"), against Smith Barney,
Inc., the Dealer-Manager for the Offer and financial advisor to UPR and
Purchaser ("Smith Barney"). In this state court action, Pennzoil claims that, in
violation of a Stipulation and Order agreed to by Pennzoil, UPR and Purchaser
and entered by the Court in the Texas Federal Action, Smith Barney received from
counsel to UPR and Purchaser certain information produced by Pennzoil in
discovery in the Texas Federal Action. According to Pennzoil, Smith Barney has
used or will use such information in rendering financial advice to UPR and
Purchaser concerning the Offer, contrary to the terms of the Stipulation and
Order referred to above. On October 2, 1997, the Court in this action entered an
order granting Smith Barney's Plea in Abatement and directing Pennzoil to pursue
the relief it sought in this action, if at all, in the context of the Texas
Federal Action. Smith Barney has informed UPR and the Purchaser that it intends
to contest any further litigation which Pennzoil initiates in this respect and
to defend itself vigorously.
On October 2, 1997, at a regularly scheduled meeting, the Board of
Directors of UPR met to consider the various alternatives available to UPR and
Purchaser in connection with the Offer.
On October 6, 1997, the Board of Directors of UPR held a meeting and
authorized the amended Offer.
On October 6, 1997, Mr. Messman telecopied the following letter to Mr.
Pate:
Mr. James L. Pate
Chairman, President & Chief Executive Officer
Pennzoil Company
700 Milam
P.O. Box 2967
Houston, Texas 77252-2967
Dear Jim:
I am writing to inform you that Union Pacific Resources Group Inc.
(UPR) has revised its offer to purchase shares of common stock of Pennzoil
Company and is now offering to purchase all outstanding shares of Pennzoil
common stock for $84 per share in cash. Pennzoil shareholders will be
entitled to receive $84 per share in cash, either in the tender offer or in
a subsequent merger between Pennzoil and a subsidiary of UPR. Our offer is
not subject to a financing condition.
Our all cash offer presents a clear alternative for Pennzoil
shareholders:
a) receive $84 per share in cash today, or
b) hold Pennzoil stock indefinitely in the hope that, sometime in
the future, Pennzoil's undisclosed strategic plan might
provide more than $84 per share in present value.
We believe our $84 per share cash offer fully and fairly values all of
Pennzoil's businesses. Clearly, industry analysts and your own shareholders
overwhelmingly agree.
You have claimed, as an excuse for denying your shareholders the
opportunity to accept our offer, that we have underestimated the long-term
potential of Pennzoil's international (i.e., non-North American)
exploration and production assets. Based on our own assessment, we
disagree. However, if Pennzoil will
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begin negotiations, UPR is prepared to consider a transaction structure
which would provide Pennzoil shareholders the opportunity to benefit
directly from a future increase in value, if it occurs, of Pennzoil's
international E&P assets, above the $600 million in value that UPR has
ascribed to those assets. This international valuation assumes that the
Karabakh prospect can be commercially developed.
Although we cannot make this additional value feature a part of our
tender offer at this time, because we need Pennzoil's cooperation to
implement this approach, there are several ways this could be accomplished.
For example, one way might be to form an entity to hold the international
E&P assets and to distribute to every Pennzoil shareholder, in addition to
$84 per share in cash, a combination of target or common stock and related
warrants in that entity. This type of structure would allow Pennzoil
shareholders to benefit directly from a future increase in value, if it
occurs, of the international assets, which Pennzoil management has been
promising.
Since our initial offer in June, you have had ample time to explain to
your shareholders how Pennzoil, on its own, can deliver more than $84 per
share in present value. In our opinion, you have failed to do so. There can
be no excuses for continuing to deny Pennzoil shareholders their right to
choose between our $84 cash offer and your plan. The only obstacle to
giving Pennzoil shareholders the opportunity to choose between these
alternatives is the refusal by Pennzoil's Board of Directors to redeem
Pennzoil's poison pill and to remove its other takeover defenses. We are
willing to accept the judgment of your shareholders as to which of the two
alternatives they prefer. Are you? If not, we can only conclude that
Pennzoil fears the decision its own shareholders will make.
Our preference is, and always has been, to negotiate a transaction
with Pennzoil. We invite you and your Board to begin constructive
negotiations with us regarding a merger of the two companies.
Sincerely,
/s/ Jack L. Messman
Jack L. Messman
cc: Pennzoil Company Board of Directors
On October 6, 1997, UPR issued the following press release:
UPR REVISES OFFER FOR PENNZOIL TO
$84 PER SHARE CASH FOR ALL SHARES
ALL CASH PROPOSAL ELIMINATES PENNZOIL EXCUSES
FOR DENYING SHAREHOLDERS RIGHT TO CHOOSE
UPR ALSO PROPOSES OPPORTUNITY FOR PENNZOIL SHAREHOLDERS TO BENEFIT
FROM ANY INCREASE IN VALUE OF PENNZOIL INTERNATIONAL E&P PROPERTIES,
IF PENNZOIL NEGOTIATES
FOR IMMEDIATE RELEASE -- Fort Worth, TX - Oct. 6, 1997 - Union Pacific
Resources Group Inc. (NYSE: UPR) today announced a revised offer to acquire
Pennzoil Company. UPR is now offering to purchase all outstanding shares of
Pennzoil common stock for cash at $84 per share. This offer is not
conditioned upon financing.
"Our revised offer requires the Pennzoil Board to demonstrate to its
shareholders how Pennzoil, on its own, can provide value greater than our
offer," said Jack L. Messman, Chairman and Chief Executive Officer of UPR.
"This all cash proposal offers Pennzoil shareholders two clear
alternatives: receive $84 per share in cash today from UPR, or hold
Pennzoil stock indefinitely in the hope that Pennzoil's undisclosed
strategic plan might someday provide more than $84 per share in present
value.
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In a letter today to Pennzoil Chairman James L. Pate, Mr. Messman
said, "Since our initial offer in June, you have had ample time to explain
to your shareholders how Pennzoil, on its own, can deliver more than $84
per share in present value. In our opinion, you have failed to do so," Mr.
Messman continued. "There can be no excuses for continuing to deny Pennzoil
shareholders their right to choose between our $84 cash offer and your
plan. The only obstacle to giving Pennzoil shareholders the opportunity to
choose between these alternatives is the refusal by Pennzoil's Board of
Directors to redeem Pennzoil's poison pill and to remove its other takeover
defenses. We are willing to accept the judgment of your shareholders as to
which of the two alternatives they prefer; are you? If not, we can only
conclude that Pennzoil fears the decision its own shareholders will make."
UPR PROPOSES OFFERING PENNZOIL SHAREHOLDERS UPSIDE
POTENTIAL OF INTERNATIONAL E&P PROPERTIES, IF PENNZOIL WILL NEGOTIATE
In the letter, Mr. Messman also wrote, "We believe our $84 per share
cash offer fully and fairly values all of Pennzoil's businesses. Clearly,
industry analysts and your own shareholders overwhelmingly agree.
You have claimed, as an excuse for denying your shareholders the
opportunity to accept our offer, that we have underestimated the long-term
potential of Pennzoil's international (i.e., non-North American)
exploration and production assets. Based on our own assessment, we
disagree. "However, if Pennzoil will begin negotiations, UPR is prepared to
consider a transaction structure which would provide Pennzoil shareholders
the opportunity to benefit directly from a future increase in value, if it
occurs, of Pennzoil's international E&P assets, above the $600 million in
value that UPR has ascribed to those assets."
Mr. Messman also noted that the international valuation assumes the
commercial viability of Pennzoil's high-profile Karabakh prospect in the
Caspian Sea, and that Pennzoil has indicated that results from the first
exploratory well should be known soon.
Mr. Messman's letter to Mr. Pate goes on to state: "Although we cannot
make this additional value feature a part of our tender offer at this time,
because we need Pennzoil's cooperation to implement this approach, there
are several ways this could be accomplished. For example, one way might be
to form an entity to hold the international E&P assets and to distribute to
every Pennzoil shareholder, in addition to $84 per share in cash, a
combination of target or common stock and related warrants in that entity."
The full text of Mr. Messman's letter to Mr. Pate is attached.
UPR'S PROVEN BUSINESS MODEL WOULD QUICKLY
INCREASE PRODUCTION FROM PENNZOIL'S OIL AND GAS PROPERTIES
In announcing the all cash tender offer today, Mr. Messman also
reiterated the powerful business rationale for acquiring Pennzoil: "This
combination is driven by the opportunity to apply UPR's proven business
model to Pennzoil's drill sites and create value through growth - something
Pennzoil has been unable to do. Pennzoil has a substantial domestic
property base with unexploited opportunities for development and
exploratory drilling. By increasing production and reserves from those
assets, this acquisition will allow UPR to perform even beyond our
established growth targets."
Mr. Messman added that, "After acquiring Pennzoil, we intend to
maintain a strong investment grade credit rating and the financial
flexibility to fund our business plan. Following the closing of the
Pennzoil acquisition, we plan to refinance our acquisition financing
through a combination of asset sales and the public or private sale of
equity and debt securities.
TERMS OF THE TRANSACTION
Pennzoil shareholders will be entitled to receive $84 per share in
cash, either in the tender offer or in a subsequent merger between Pennzoil
and a wholly-owned subsidiary of UPR. This proposal revises the offer UPR
made on June 23, 1997 to acquire Pennzoil for a combination of $84 per
share in cash for 50.1% of Pennzoil's outstanding shares and UPR stock for
the remaining shares. The revised offer is subject to the same conditions
as the original offer.
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A total of 61.5% of Pennzoil shares were tendered into UPR's tender
offer as of the initial expiration date of July 21, 1997. The tender offer
was previously scheduled to expire on October 29, 1997, prior to being
extended today to midnight New York time on November 5, 1997. At the close
of business on October 3, 1997, a total of 18,187,684 Pennzoil shares, or
over 38.5% of outstanding shares, still remained tendered. The normal
practice for many investors in a tender offer is to withdraw their shares
temporarily after the initial expiration date in order to give themselves
trading flexibility prior to re-tendering at a later date.
As with the original offer, the revised offer will generate immediate
and ongoing accretion to UPR's cash flow per share, which is the primary
measurement of value in the E&P industry, while it will have a near-term
dilutive effect on earnings per share. Based on the revised offer, UPR
estimates that after completion of the Pennzoil acquisition, using debt to
finance the purchase of Pennzoil common stock and assuming no refinancing
of that acquisition debt, 1998 discretionary cash flow per share could
increase by approximately 45% and 1998 earnings per share could decrease by
approximately 75%, as compared to 1998 consensus estimates. The Company's
estimates are subject to a number of assumptions, including a year-end 1997
completion of the acquisition. These per share figures will be affected as
the Company implements the refinancing of acquisition debt through the
contemplated combination of asset sales and sale of equity and debt
securities.
UPR is the largest domestic independent oil and gas exploration and
production company. Headquartered in Fort Worth, Texas, UPR has been the #1
domestic driller for the past five years.
On October 7, 1997, Purchaser amended and supplemented the Original Offer
as described in this Supplement and the revised Letter of Transmittal.
9. PURPOSE OF THE OFFER; PLANS FOR PENNZOIL.
The discussion set forth in Section 11 ("Purpose of the Offer; Plans for
Pennzoil") of the Original Offer to Purchase is hereby amended and supplemented
as follows:
General. The purpose of the Offer is to acquire all of the outstanding
Shares of Pennzoil. The purpose of the Proposed Merger is to acquire all Shares
not beneficially owned by Purchaser following consummation of the Offer.
Purchaser will seek to complete the Proposed Merger with Pennzoil as
promptly as practicable following consummation of the Offer. Under the Proposed
Merger and in the case of a Short-Form Merger effected with or without an
agreement, at the effective time of the Proposed Merger, each Share that is
outstanding prior to the effective time (other than Shares held in the treasury
of Pennzoil or owned by UPR or any affiliate of UPR and Dissenting Shares) would
be converted into the right to receive $84.00 in cash.
The Offer is conditioned upon, among other things, satisfaction of the
Board Action Condition. Although UPR has sought to enter into negotiations with
Pennzoil with respect to the Offer and the Proposed Merger and continues to
pursue such negotiations, there can be no assurance that such negotiations will
occur or, if such negotiations occur, as to the outcome thereof. In the event
UPR determines that the Board Action Condition will not be satisfied, Purchaser
may terminate the Offer. Purchaser is currently reviewing its options with
respect to the Offer and may consider, among other things, changes to the
material terms of the Offer. Purchaser reserves the right to amend the Offer
(including amending the number of Shares to be purchased, the purchase price and
the proposed second-step merger consideration) if it enters into the Proposed
Merger Agreement or is able to negotiate a merger agreement with Pennzoil not
involving a tender offer pursuant to which Purchaser would terminate the Offer
and the Shares would, upon consummation of such merger, be converted into cash,
UPR Common Stock and/or other securities in such amounts as are negotiated by
UPR and Pennzoil. UPR and Purchaser are exploring ways to encourage the Pennzoil
Board to permit Pennzoil's stockholders to participate in the Offer and the
Proposed Merger. These may include a solicitation of proxies at Pennzoil's 1998
and 1999 annual meetings of stockholders. If Purchaser determines in its sole
discretion at any time that it is unlikely that the Board Action Condition will
be satisfied, Purchaser presently intends to terminate the Offer.
Plans for Pennzoil. In connection with the Offer, UPR and Purchaser have
reviewed and will continue to consider, on the basis of publicly available
information, various possible business strategies to be pursued in the event
that Purchaser acquires control of Pennzoil, whether pursuant to the Offer and
the Proposed Merger or
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otherwise. Among other things, UPR is receiving unsolicited expressions of
interest from third parties regarding possible acquisition and joint venture
transactions involving certain assets of UPR and Pennzoil, and UPR plans to
discuss with various entities the feasibility and desirability of entering into,
and possible terms of, agreements for such transactions before or after
consummation of the Offer. No decision has been made by UPR with regard to any
such transactions, although UPR and Purchaser anticipate that proceeds from the
sale of certain assets of UPR and Pennzoil will be used to repay borrowings
incurred to obtain the funds necessary to consummate the Offer and Proposed
Merger. See Section 7 of this Supplement.
UPR intends to conduct a detailed review of Pennzoil and its assets,
corporate structure, dividend policy, capitalization, operations, properties,
policies, management and personnel to consider and determine what, if any,
changes would be desirable in light of the circumstances that then exist. Such
strategies could include, among other things, changes in Pennzoil's business,
corporate structure, Restated Certificate of Incorporation, By-laws,
capitalization, management or dividend policy.
Except as indicated in the Original Offer to Purchase or this Supplement,
neither UPR nor Purchaser has any present plans or proposals which relate to or
would result in an extraordinary corporate transaction, such as a merger,
consolidation, reorganization or liquidation, involving Pennzoil or any of its
subsidiaries, a sale or transfer of a material amount of assets of Pennzoil or
any of its subsidiaries or any material change in Pennzoil's capitalization or
dividend policy, a class of securities of Pennzoil being delisted from a
national securities exchange, a class of equity securities of Pennzoil becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act, or any other material changes in Pennzoil's corporate structure or
business, or the composition of the Pennzoil Board or Pennzoil's management.
Other. Under the Delaware Law, if Purchaser acquires less than 90% of the
outstanding Shares, the Proposed Merger would require, among other things, the
affirmative vote of the holders of at least a majority of all the outstanding
Shares entitled to vote at a meeting of stockholders. See "Introduction." If
Purchaser acquires Shares pursuant to the Offer, Purchaser may be in a position
to exercise voting control of more than a majority of the Shares and will have
the voting power to approve the Proposed Merger without the vote of any other
stockholder. If Purchaser acquires 90% or more of the outstanding Shares
pursuant to the Offer, and if Article Sixth of Pennzoil's Restated Certificate
of Incorporation were not applicable, UPR would have the power to consummate a
merger of Purchaser with and into Pennzoil without a meeting or vote of
stockholders pursuant to the Delaware Law.
Holders of Shares will not have appraisal rights as a result of the Offer.
If the Proposed Merger is consummated, however, persons who hold Shares at that
time would have the right to appraisal of their Shares in accordance with
Section 262 of the Delaware Law. Such appraisal rights, if the statutory
procedures are complied with, would result in a judicial determination of the
"fair value" of the Shares owned by such holders. Any such judicial
determination of the fair value of the Shares could be based upon considerations
other than or in addition to the price paid in the Offer and the Proposed Merger
and the market value of the Shares, including asset values, the investment value
of the Shares and any other valuation considerations generally accepted in the
investment community. The value so determined for Shares could be more or less
than the value of the consideration per Share to be paid pursuant to the Offer
or the Proposed Merger and payment of such consideration would take place
subsequent to payment pursuant to the Offer.
In addition, several decisions by the Delaware courts have held that a
controlling stockholder of a corporation involved in a merger has a fiduciary
duty to the other stockholders which requires that the merger be fair to such
other stockholders. In determining whether a merger is fair to minority
stockholders, the Delaware courts have considered, among other things, the type
and amount of consideration to be received by the stockholders and whether there
was fair dealing among the parties. The Delaware Supreme Court indicated in
Weinberger v. UOP, Inc. and Rabkin v. Philip A. Hunt Chemical Corp. that
ordinarily the remedy available to stockholders in a merger that is found not to
be "fair" to minority stockholders is the right to appraisal described above or
a damages remedy based on essentially the same principles.
If Purchaser purchases Shares pursuant to the Offer, and the Proposed
Merger or another merger or other business combination is consummated more than
one year after the completion of the Offer, or if such a merger or other
business combination were to provide for the payment of consideration less than
that paid pursuant to the Offer, compliance by Purchaser with Rule 13e-3 under
the Exchange Act would be required, unless the Shares were to be deregistered
under the Exchange Act prior to such transaction. See Section 13 ("Effect of the
Offer on
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the Market for the Shares; Exchange Listing; Exchange Act Registration; Margin
Regulations") of the Original Offer to Purchase. Rule 13e-3 would require, among
other things, that certain financial information concerning Pennzoil and certain
information relating to the fairness of the proposed transaction and the
consideration offered to minority stockholders therein be filed with the
Commission and disclosed to minority stockholders prior to consummation of the
transaction.
THIS SUPPLEMENT DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY
MEETING OF PENNZOIL'S STOCKHOLDERS. IN ADDITION, THIS SUPPLEMENT IS NEITHER AN
OFFER TO SELL NOR A SOLICITATION OF OFFERS TO BUY ANY SECURITIES WHICH MAY BE
ISSUED IN ANY MERGER OR SIMILAR BUSINESS COMBINATION INVOLVING PURCHASER, UPR OR
PENNZOIL.
10. CERTAIN AMENDED CONDITIONS OF THE OFFER.
The conditions to the Offer as set forth in Section 14 ("Certain Conditions
of the Offer") of the Original Offer to Purchase are hereby amended and restated
in their entirety as follows:
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its reasonable discretion, Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the Commission,
including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate the Offer, if, in the reasonable judgment of Purchaser
(i) at or prior to the Expiration Date any one or more of the Minimum Tender
Condition or the Board Action Condition has not been satisfied or (ii) at any
time on or after June 23, 1997 and before the Expiration Date, any of the
following events shall occur or shall be determined by Purchaser to have
occurred:
(a) there shall be threatened, instituted or pending any action,
proceeding, application or counterclaim by any government or governmental,
regulatory or administrative authority or agency, domestic, foreign or
supranational (each, a "Governmental Entity"), or by any other person,
domestic or foreign, before any court or Governmental Entity, (i)(A)
challenging or seeking to, or which is reasonably likely to, make illegal,
delay or otherwise directly or indirectly restrain or prohibit, or seeking
to, or which is reasonably likely to, impose voting, procedural, price or
other requirements, in addition to those required by Federal securities
laws and the Delaware Law (each as in effect on the date of this Original
Offer to Purchase), in connection with, the making of the Offer, the
acceptance for payment of, or payment for, some of or all the Shares by
Purchaser, UPR or any other affiliate of UPR or the consummation by
Purchaser, UPR or any other affiliate of UPR of a merger or other similar
business combination with Pennzoil, (B) seeking to obtain material damages
or (C) otherwise directly or indirectly relating to the transactions
contemplated by the Offer or any such merger or business combination, (ii)
seeking to prohibit the ownership or operation by Purchaser, UPR or any
other affiliate of UPR of all or any portion of the business or assets of
Pennzoil and its subsidiaries or of Purchaser, UPR or any other affiliate
of UPR or to compel Purchaser, UPR or any other affiliate of UPR to dispose
of or hold separate all or any portion of the business or assets of
Pennzoil or any of its subsidiaries or of Purchaser, UPR or any other
affiliate of UPR or seeking to impose any limitation on the ability of
Purchaser, UPR or any other affiliate of UPR to conduct such business or
own such assets, (iii) seeking to impose or confirm limitations on the
ability of Purchaser, UPR or any other affiliate of UPR effectively to
exercise full rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired or owned by Purchaser,
UPR or any other affiliate of UPR on all matters properly presented to
Pennzoil's stockholders, (iv) seeking to require divestiture by Purchaser,
UPR or any other affiliate of UPR of any Shares, (v) seeking any material
diminution in the benefits expected to be derived by Purchaser, UPR or any
other affiliate of UPR as a result of the transactions contemplated by the
Offer or any merger or other similar business combination with Pennzoil,
(vi) otherwise directly or indirectly relating to the Offer or which
otherwise, in the reasonable judgment of Purchaser, might materially
adversely affect Pennzoil or any of its subsidiaries or Purchaser, UPR or
any other affiliate of UPR or the value of the Shares or (vii) in the
reasonable judgment of Purchaser, materially adversely affecting the
business, properties, assets, liabilities, capitalization, stockholders'
equity, condition (financial or otherwise), operations, licenses or
franchises, results of operations or prospects of Pennzoil or any of its
subsidiaries;
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(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed applicable to (i)
Purchaser, UPR or any other affiliate of UPR or Pennzoil or any of its
subsidiaries or (ii) the Offer or any merger or other similar business
combination by Purchaser, UPR or any other affiliate of UPR with Pennzoil,
by any government, legislative body or court, domestic, foreign or
supranational, or Governmental Entity, other than the routine application
of the waiting period provisions of the HSR Act to the Offer, that, in the
reasonable judgment of Purchaser, might, directly or indirectly, result in
any of the consequences referred to in clauses (i) through (vii) of
paragraph (a) above;
(c) any change shall have occurred or been threatened (or any
condition, event or development shall have occurred or been threatened
involving a prospective change) in the business, properties, assets,
liabilities, capitalization, stockholders' equity, condition (financial or
otherwise), operations, licenses or franchises, results of operations or
prospects of Pennzoil or any of its subsidiaries that, in the reasonable
judgment of Purchaser, is or may be materially adverse to Pennzoil or any
of its subsidiaries, or Purchaser shall have become aware of any facts
that, in the reasonable judgment of Purchaser, have or may have material
adverse significance with respect to either the value of Pennzoil or any of
its subsidiaries or the value of the Shares to Purchaser, UPR or any other
affiliate of UPR;
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the
United States, Canada or abroad, (ii) any extraordinary or material adverse
change in the financial markets or major stock exchange indices in the
United States, Canada or abroad or in the market price of Shares, (iii) any
change in the general political, market, economic or financial conditions
in the United States, Canada or abroad that could, in the reasonable
judgment of Purchaser, have a material adverse effect upon the business,
properties, assets, liabilities, capitalization, stockholders' equity,
condition (financial or otherwise), operations, licenses or franchises,
results of operations or prospects of Pennzoil or any of its subsidiaries
or the trading in, or value of, the Shares, (iv) any material change in
United States or Canada currency exchange rates or any other currency
exchange rates or a suspension of, or limitation on, the markets therefor,
(v) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, Canada or abroad, (vi) any
limitation (whether or not mandatory) by any government, domestic, foreign
or supranational, or Governmental Entity on, or other event that, in the
reasonable judgment of Purchaser, might affect the extension of credit by
banks or other lending institutions, (vii) a commencement of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States or Canada or (viii) in the case of
any of the foregoing existing at the time of the commencement of the Offer,
a material acceleration or worsening thereof;
(e) Pennzoil or any of its subsidiaries shall have (i) split, combined
or otherwise changed, or authorized or proposed a split, combination or
other change of, the Shares or its capitalization (other than by redemption
of the Rights in accordance with their terms as such terms have been
publicly disclosed prior to June 23, 1997), (ii) acquired or otherwise
caused a reduction in the number of, or authorized or proposed the
acquisition or other reduction in the number of, outstanding Shares or
other securities (other than as aforesaid), (iii) issued or sold, or
authorized or proposed the issuance, distribution or sale of, additional
Shares (other than the issuance of Shares under option prior to June 23,
1997, in accordance with the terms of such options as such terms have been
publicly disclosed prior to June 23, 1997), shares of any other class of
capital stock, other voting securities or any securities convertible into,
or rights, warrants or options, conditional or otherwise, to acquire, any
of the foregoing, (iv) declared or paid, or proposed to declare or pay, any
dividend or other distribution, whether payable in cash, securities or
other property, on or with respect to any shares of capital stock of
Pennzoil (other than a regular cash quarterly dividend not in excess of
$.25 per Share, having customary and usual record and payment dates and, in
the event the Rights are redeemed, the price of redemption thereof), (v)
altered or proposed to alter any material term of any outstanding security
(including the Rights) other than to amend the Rights Agreement to make the
Rights inapplicable to the Offer and the Proposed Merger, (vi) incurred any
debt other than in the ordinary course of business or any debt containing
burdensome covenants, (vii) authorized, recommended, proposed or entered
into an agreement, agreement in principle or arrangement or understanding
with respect to any merger, consolidation, liquidation, dissolution,
business combination, acquisition of assets, disposition of assets, release
or relinquishment of any material contractual or other right of Pennzoil or
any of its
16
<PAGE>
subsidiaries or any comparable event not in the ordinary course of
business, (viii) authorized, recommended, proposed or entered into, or
announced its intention to authorize, recommend, propose or enter into, any
agreement, arrangement or understanding with any person or group that in
the reasonable judgment of Purchaser could adversely affect either the
value of Pennzoil or any of its subsidiaries, joint ventures or
partnerships or the value of the Shares to Purchaser, UPR or any other
affiliate of UPR, (ix) entered into or amended any employment, change in
control, severance, executive compensation or similar agreement,
arrangement or plan with or for the benefit of any of its employees,
consultants or directors, or made grants or awards thereunder, other than
in the ordinary course of business or entered into or amended any
agreements, arrangements or plans so as to provide for increased or
accelerated benefits to any such persons, (x) except as may be required by
law, taken any action to terminate or amend any employee benefit plan (as
defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended) of Pennzoil or any of its subsidiaries, or Purchaser
shall have become aware of any such action that was not disclosed in
publicly available filings prior to June 23, 1997, or (xi) amended, or
authorized or proposed any amendment to, Pennzoil's Restated Certificate of
Incorporation or Pennzoil's By-laws, or Purchaser shall become aware that
Pennzoil or any of its subsidiaries shall have proposed or adopted any such
amendment that was not disclosed in publicly available filings prior to
June 23, 1997;
(f) a tender or exchange offer for any Shares shall have been made or
publicly proposed to be made by any other person (including Pennzoil or any
of its subsidiaries or affiliates), or it shall have been publicly
disclosed or Purchaser shall have otherwise learned that (i) any person,
entity (including Pennzoil or any of its subsidiaries) or "group" (within
the meaning of Section 13(d)(3) of the Exchange Act) shall have acquired or
proposed to acquire beneficial ownership of more than 5% of any class or
series of capital stock of Pennzoil (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, or shall have
been granted any right, option or warrant, conditional or otherwise, to
acquire beneficial ownership of more than 5% of any class or series of
capital stock of Pennzoil (including the Shares), other than acquisitions
for bona fide arbitrage purposes only and other than as disclosed in a
Schedule 13G on file with the Commission prior to June 23, 1997, (ii) any
such person, entity or group that prior to June 23, 1997, had filed such a
Schedule with the Commission has acquired or proposes to acquire, through
the acquisition of stock, the formation of a group or otherwise, beneficial
ownership of 1% or more of any class or series of capital stock of Pennzoil
(including the Shares), or shall have been granted any right, option or
warrant, conditional or otherwise, to acquire beneficial ownership of 1% or
more of any class or series of capital stock of Pennzoil (including the
Shares), (iii) any person or group shall have entered into a definitive
agreement or an agreement in principle or made a proposal with respect to a
tender offer or exchange offer or a merger, consolidation or other business
combination with or involving Pennzoil or (iv) any person shall have filed
a Notification and Report Form under the HSR Act (or amended a prior filing
to increase the applicable filing threshold set forth therein) or made a
public announcement reflecting an intent to acquire Pennzoil or any assets
or subsidiaries of Pennzoil;
(g) any approval, permit, authorization or consent of any Governmental
Entity (including those described or referred to in Section 15 ("Certain
Legal Matters") of the Original Offer to Purchase) shall not have been
obtained on terms satisfactory to Purchaser in its reasonable discretion;
or
(h) Purchaser shall have reached an agreement or understanding with
Pennzoil providing for termination of the Offer, or Purchaser, UPR or any
other affiliate of UPR shall have entered into a definitive agreement or
announced an agreement in principle with Pennzoil providing for a merger or
other business combination with Pennzoil or the purchase of stock or assets
of Pennzoil;
which, in the reasonable judgment of Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Purchaser, UPR or any
other affiliate of UPR) giving rise to any such condition, makes it inadvisable
to proceed with the Offer and/or with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and UPR and
may be asserted by Purchaser regardless of the circumstances giving rise to any
such condition or may be waived by Purchaser in whole or in part at any time and
from time to time in its reasonable discretion provided that Purchaser cannot
assert any of the conditions set forth in this Section (other than the
expiration of the waiting period under the HSR Act) after the Expiration Date.
The failure by Purchaser at any time to exercise any of the foregoing rights
will not be deemed a waiver of any such right, the waiver of any such right with
respect to particular facts and circumstances
17
<PAGE>
will not be deemed a waiver with respect to any other facts and circumstances
and each such right will be deemed an ongoing right that may be asserted at any
time and from time to time. Any determination by Purchaser concerning the events
described in Section 10 of this Supplement will be final and binding upon all
parties.
11. CERTAIN LEGAL MATTERS.
The discussion contained in Section 15 ("Certain Legal Matters") of the
Original Offer to Purchase is hereby amended and supplemented as follows:
Antitrust. Under the provisions of the HSR Act applicable to the Offer,
the acquisition of Shares under the Offer may be consummated following the
expiration of a 15-calendar-day waiting period following the filing by UPR of a
Notification and Report Form with respect to the Offer, unless UPR receives a
request for additional information or documentary material from the Antitrust
Division or the FTC or early termination of the waiting period is granted. The
waiting period expired at 11:59 p.m., New York City time, on July 10, 1997.
Litigation. Developments since June 23, 1997 in the Delaware Federal
Action, the Texas Federal Action and the Texas Smith Barney Action are described
in Section 8 of this Supplement. In the action commenced by UPR and Purchaser in
the Chancery Court of Delaware, the Chancery Court has scheduled the trial of
the action to commence on December 1, 1997. On July 14, 1997, Pennzoil filed an
Answer and Counterclaim to UPR's and Purchaser's Verified Complaint in the
action commenced by Purchaser and UPR in the United States District Court for
the Middle District of Louisiana. On July 29, 1997, UPR and Purchaser filed a
Reply to Pennzoil's Counterclaim. On September 26, 1997, the proceeding was
stayed for 120 days. No further proceedings have occurred in connection with
this action.
12. MISCELLANEOUS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR UPR NOT CONTAINED HEREIN OR IN THE
REVISED LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY PURCHASER OR
UPR. NEITHER THE DELIVERY OF THE ORIGINAL OFFER TO PURCHASE OR THIS SUPPLEMENT
NOR ANY PURCHASE PURSUANT TO THE OFFER, SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF UPR, PURCHASER
OR PENNZOIL SINCE THE DATE AS OF WHICH INFORMATION IS FURNISHED OR THE DATE OF
THIS SUPPLEMENT.
Purchaser and UPR have filed with the Commission a Tender Offer Statement
on Schedule 14D-1 and amendments thereto, together with exhibits, pursuant to
Rule 14d-3 under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file further amendments thereto from time to
time. Such Schedule 14D-1 and any amendments thereto, including exhibits, should
be available for inspection and copies should be obtainable in the manner set
forth in Section 8 ("Certain Information Concerning Purchaser and UPR") of the
Original Offer to Purchase (except that such material will not be available at
the regional offices of the Commission).
EXCEPT AS OTHERWISE SET FORTH IN THIS SUPPLEMENT, THE TERMS AND CONDITIONS
PREVIOUSLY SET FORTH IN THE OFFER TO PURCHASE REMAIN APPLICABLE IN ALL RESPECTS
TO THE OFFER, AND THIS SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH THE OFFER
TO PURCHASE. UNLESS THE CONTEXT REQUIRES OTHERWISE, TERMS NOT DEFINED HEREIN
HAVE THE MEANINGS ASCRIBED TO THEM IN THE OFFER TO PURCHASE.
RESOURCES NEWCO, INC.
October 7, 1997
18
<PAGE>
Manually signed and properly completed facsimile copies of the revised
Letter of Transmittal will be accepted. The revised Letter of Transmittal,
certificates for Shares and/or Rights and any other required documents should be
sent or delivered by each stockholder of Pennzoil or such stockholder's broker,
dealer, bank, trust company or other nominee to the Depositary at the applicable
address set forth below.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight
Tender & Exchange Department (212) 815-6213 Courier:
P.O. Box 11248 (For Eligible Tender & Exchange Department
Church Street Station Institutions Only) 101 Barclay Street
New York, New York Receive and Deliver Window
10286-1248 Confirm by Telephone: New York, New York 10286
(800) 507-9357
</TABLE>
Any questions or requests for assistance or for additional copies of this
Supplement, the Original Offer to Purchase, the revised Letter of Transmittal
and the other tender offer materials may be directed to the Information Agent or
the Dealer Manager at their respective telephone numbers and locations listed
below. You may also contact your broker, dealer, bank, trust company or other
nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
20th Floor
New York, NY 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage
Firms please call:
(800) 662-5200
The Dealer Manager for the Offer is:
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
(212) 816-7346
<PAGE>
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
PENNZOIL COMPANY
Pursuant to the Offer to Purchase dated June 23, 1997
and
The Supplement dated October 7, 1997
of
RESOURCES NEWCO, INC.,
a wholly owned subsidiary of
UNION PACIFIC RESOURCES GROUP INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, NOVEMBER 5, 1997, UNLESS THE OFFER IS EXTENDED.
SHARES WHICH ARE TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY
TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile By Hand or Overnight
Transmission: Courier:
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 (For Eligible Receive and Deliver Window
Church Street Station Institutions Only) 101 Barclay Street
New York, New York New York, New York 10286
10286-1248 Confirm by
Telephone:
(800) 507-9357
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This revised Letter of Transmittal or the previously circulated BLUE Letter
of Transmittal is to be used if certificates for Shares and/or Rights (as such
terms are defined below) are to be forwarded herewith or, unless an Agent's
Message (as defined in Instruction 2 below) is utilized, if delivery of Shares
and/or Rights is to be made by book-entry transfer (in the case of Rights, if
available) to an account maintained by the Depositary at a Book-Entry Transfer
Facility (as defined in and pursuant to the procedures set forth in Section 2 of
the Offer to Purchase). Unless the Board Action Condition (as defined in the
Offer to Purchase) with respect to the Rights (as defined in the Offer to
Purchase) is satisfied, stockholders will be required to tender one Right for
each Share tendered in order to effect a valid tender of Shares. Stockholders
who deliver Shares and/or Rights by book-entry transfer are referred to herein
as "Book-Entry Stockholders" and other stockholders who deliver shares are
referred to herein as "Certificate Stockholders".
Stockholders whose certificates for Shares and/or Rights are not immediately
available or who cannot deliver either the certificates for, or a Book-Entry
Confirmation (as defined in Section 2 of the Offer to Purchase) with respect to,
their Shares and/or Rights and all other documents required hereby to the
Depositary prior to the Expiration Date (as defined in Section 1 of the
Supplement) must tender their Shares and/or Rights pursuant to the guaranteed
delivery procedures set forth in Section 2 of the Offer to Purchase and Section
2 of the Supplement. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED SHARES AND/OR RIGHTS ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY
TRANSFER FACILITIES AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A
BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES AND/OR RIGHTS BY BOOK-ENTRY
TRANSFER):
Name of Tendering Institution ______________________________________________
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company / / Philadelphia Depository
Trust Company
Account Number _____________________ Transaction Code Number ____________
/ / CHECK HERE IF TENDERED SHARES AND/OR RIGHTS ARE BEING DELIVERED PURSUANT TO
A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s) _____________________________________________
Window Ticket Number (if any) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
IF DELIVERED BY BOOK-ENTRY TRANSFER, CHECK BOX OF BOOK-ENTRY TRANSFER
FACILITY:
/ / The Depository Trust Company / / Philadelphia Depository
Trust Company
Account Number ____________ Transaction Code Number ____________
<PAGE>
<TABLE>
<CAPTION>
__________________________________________________________________________________
DESCRIPTION OF SHARES TENDERED
__________________________________________________________________________________
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN BLANK EXACTLY AS SHARES TENDERED (ATTACH ADDITIONAL
NAME(S) APPEAR(S) ON CERTIFICATE(S)) SIGNED LIST IF NECESSARY)
__________________________________________________________________________________
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
____________________________________________
<S> <C> <C> <C>
____________________________________________
____________________________________________
____________________________________________
____________________________________________
TOTAL SHARES
____________________________________________
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares described
above are being tendered. See Instruction 4.
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
__________________________________________________________________________________
DESCRIPTION OF RIGHTS TENDERED(1)
__________________________________________________________________________________
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN BLANK EXACTLY AS RIGHTS TENDERED (ATTACH ADDITIONAL
NAME(S) APPEAR(S) ON CERTIFICATE(S)) SIGNED LIST IF NECESSARY)
__________________________________________________________________________________
TOTAL NUMBER
OF RIGHTS NUMBER OF
CERTIFICATE REPRESENTED BY RIGHTS
NUMBER(S)(2)(3) CERTIFICATE(S)(3) TENDERED(4)
____________________________________________
<S> <C> <C> <C>
____________________________________________
____________________________________________
____________________________________________
____________________________________________
TOTAL RIGHTS
____________________________________________
(1) Need not be completed if the Distribution Date has not occurred.
(2) If the tendered Rights are represented by separate certificates, complete
using the certificate numbers of such certificates for Rights. If the
tendered Rights are not represented by separate certificates, or if such
certificates have not been distributed, complete using the certificate
numbers of the Shares with respect to which the Rights were issued.
Stockholders tendering Rights that are not represented by separate
certificates should retain a copy of this description in order to
accurately complete the Notice of Guaranteed Delivery if the Distribution
Date occurs.
(3) Need not be completed by Book-Entry Stockholders who are delivering Rights
by book-entry transfer.
(4) Unless otherwise indicated, it will be assumed that all Rights described
herein are being tendered. See Instruction 4.
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Resources Newco, Inc., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Union Pacific
Resources Group Inc., a Utah corporation, the above-described shares of Common
Stock, par value $0.83 1/3 per share (the "Shares"), of Pennzoil Company, a
Delaware corporation ("Pennzoil"), together with the associated preferred stock
purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as
of October 28, 1994 (the "Rights Agreement") between Pennzoil and Chemical Bank,
as Rights Agent (the "Rights Agent"), pursuant to the Purchaser's offer to
purchase all outstanding Shares at a price of $84.00 per Share (and associated
Right), net to the seller in cash, without interest thereon (the "Offer Price")
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated June 23, 1997 (the "Offer to Purchase"), the Supplement dated October 7,
1997 (the "Supplement"), and in this Letter of Transmittal (which together, with
any amendments or supplements thereto or hereto, collectively constitute the
"Offer"), receipt of each of which is hereby acknowledged.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of, and payment for, the Shares
and Rights tendered herewith in accordance with the terms of the Offer, the
undersigned hereby sells, assigns and transfers to or upon the order of the
Purchaser all right, title and interest in and to all the Shares and Rights that
are being tendered hereby (and any and all other Shares, Rights or other
securities or rights issued or issuable in respect thereof on or after June 23,
1997) and irrevocably constitutes and appoints the Depositary the true and
lawful agent and attorney-in-fact of the undersigned with respect to such Shares
and Rights (and all such other Shares, Rights or securities or rights), with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares and Rights (and all such other Shares, Rights or securities or
rights), or transfer ownership of such Shares and Rights (and all such other
Shares, Rights or securities or rights) on the account books maintained by any
of the Book-Entry Transfer Facilities, together, in any such case, with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser, (b) present such Shares and Rights (and all such other Shares, Rights
or securities or rights) for transfer on the books of Pennzoil, and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares and Rights (and all such other Shares, Rights or securities or rights),
all in accordance with the terms of the Offer.
<PAGE>
If, on or after June 23, 1997, Pennzoil should declare or pay any cash
dividend (other than regular cash dividends on the Shares not in excess of $.25
per Share, quarterly) on the Shares or other distribution on the Shares, or
issue with respect to the Shares any additional Shares, shares of any other
class of capital stock, other voting securities or any securities convertible
into, or rights, warrants or options, conditional or otherwise, to acquire, any
of the foregoing, payable or distributable to stockholders of record on a date
prior to the transfer of the Shares purchased pursuant to the Offer to the
Purchaser and the Supplement or its nominee or transferee on Pennzoil's stock
transfer records, then, subject to the provisions of Section 9 of the
Supplement, (a) the Offer Price may, in the sole discretion of the Purchaser, be
reduced by the amount of any such cash dividend or cash distribution and (b) the
whole of any such noncash dividend, distribution or issuance to be received by
the tendering stockholders will (i) be received and held by the tendering
stockholders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (ii) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance and
subject to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such noncash dividend, distribution, issuance or
proceeds and may withhold the entire Offer Price or deduct from the Offer Price
the amount or value thereof, as determined by the Purchaser in its sole
discretion.
The undersigned hereby irrevocably appoints Jack L. Messman, Morris B. Smith
and Joseph A. LaSala, Jr., in their respective capacities as officers of the
Purchaser, and any individual who shall thereafter proceed to any such office of
the Purchaser, and each of them, the attorneys-in-fact and proxies of the
undersigned, each with full power of substitution, to vote at any annual or
special or adjourned meeting of Pennzoil's stockholders or any adjournment or
postponement thereof or otherwise in such manner as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper with
respect to, to execute any written consent concerning any matter as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, and to otherwise act as each such attorney-in-fact and
proxy or his substitute shall in his sole discretion deem proper with respect
to, all of the Shares and Rights tendered hereby (and any and all other Shares,
Rights or other securities or rights issued or issuable in respect thereof on or
after June 23, 1997), which have been accepted for payment by the Purchaser
prior to the time of any action is taken and with respect to which the
undersigned is entitled to vote. This appointment is effective when, and only to
the extent that, the Purchaser accepts for payment such Shares pursuant to the
Offer. This power of attorney and proxy are irrevocable and are granted in
consideration of the acceptance for payment of such Shares and Rights in
accordance with the terms of the Offer. Such acceptance for payment shall,
without further action, revoke any prior powers of attorney and proxies
appointed by the undersigned at any time with respect to such Shares and Rights
(and all such other Shares, Rights or securities or rights), and no subsequent
powers of attorney or proxies will be appointed, or be effective, with respect
thereto.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares and Rights
tendered hereby (and any and all other Shares, Rights or other securities or
rights issued or issuable in respect thereof on or after June 23, 1997) and that
when the same are accepted for payment by the Purchaser, the Purchaser will
acquire good, marketable and unencumbered title thereto, free and clear of all
liens, restrictions, charges and encumbrances and the same will not be subject
to any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares and Rights tendered hereby (and all such other Shares, Rights or
securities or rights).
The undersigned understands that, unless the Board Action Condition with
respect to the Rights is satisfied, stockholders will be required to tender one
Right for each Share tendered in order to effect a valid tender of Shares in
accordance with the procedures set forth in Section 2 of the Offer to Purchase
and Section 2 of the Supplement. If the Distribution Date occurs and separate
certificates representing the Rights are distributed to holders of Shares prior
to the time Shares are tendered herewith, certificates representing a number of
Rights equal to the number of Shares being tendered herewith must be delivered
to the Depositary or, if available, a Book-Entry Confirmation must be received
by the Depositary with respect thereto, in order for such Shares tendered
herewith to be validly tendered. If the Distribution Date occurs and separate
certificates representing the Rights are not distributed prior to the time
Shares are tendered herewith, Rights may be tendered prior to a stockholder
receiving separate certificates for Rights by use of the guaranteed delivery
procedures described in Section 2 of the Offer to Purchase and Section 2 of the
Supplement. A tender of Shares constitutes an agreement by the tendering
stockholder to deliver certificates representing a number of Rights equal to the
number of Shares tendered pursuant to the Offer to the Depositary prior to
expiration of the period permitted by such guaranteed delivery procedures for
delivery of certificates for, or a Book-Entry Confirmation with respect to,
Rights (the "Rights Delivery Period"). However, after expiration of the Rights
Delivery Period, the Purchaser may elect to reject as invalid a tender of Shares
with respect to which certificates for, or a Book-Entry Confirmation with
respect to, an equal number of Rights has not been received by the Depositary.
Nevertheless, the Purchaser will be entitled to accept for payment Shares
tendered by the undersigned prior to the receipt of the certificates for the
Rights required to be tendered with such Shares, or a Book-Entry Confirmation
with respect to such Rights, and either (a) subject to complying with the
applicable rules and regulations of the Securities and Exchange Commission,
withhold payment for such Shares pending receipt of the certificates for, or a
Book-Entry Confirmation with respect to, such Rights or (b) make payment for
Shares accepted for payment pending receipt of the certificates for, or a
Book-Entry Confirmation with respect to, such Rights in reliance upon the
agreement of a tendering stockholder to deliver Rights and such guaranteed
delivery procedures. Any determination by the Purchaser to make payment for
Shares in reliance upon such agreement and such guaranteed delivery procedures
or, after the expiration of the Rights Delivery Period, to reject a tender as
invalid will be made in the sole and absolute discretion of the Purchaser.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators,
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
<PAGE>
The undersigned understands that the valid tender of Shares and, if
applicable, Rights, pursuant to any one of the procedures described in Section 2
of the Offer to Purchase and Section 2 of the Supplement and in the Instructions
hereto will constitute a binding agreement between the undersigned and the
Purchaser upon the terms and subject to the conditions of the Offer (and if the
Offer is extended or amended, the terms or conditions of any such extension or
amendment). Without limiting the foregoing, if the price to be paid in the Offer
is amended in accordance with the Offer, the price to be paid to the undersigned
will be the amended price notwithstanding the fact that a different price is
stated in this revised Letter of Transmittal. The undersigned recognizes that
under certain circumstances set forth in the Offer to Purchase and the
Supplement, the Purchaser may not be required to accept for payment any of the
Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions", please
issue the check for the purchase price and/or return any certificates for Shares
or Rights not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered" and "Description of
Rights Tendered", respectively. Similarly, unless otherwise indicated under
"Special Delivery Instructions", please mail the check for the purchase price
and/or return any certificates for Shares or Rights not tendered or accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered" and
"Description of Rights Tendered", respectively. In the event that both the
"Special Payment Instructions" and the "Special Delivery Instructions" are
completed, please issue the check for the purchase price and/or return any
certificates for Shares or Rights not tendered or accepted for payment (and any
accompanying documents, as appropriate) in the name(s) of, and deliver such
check and/or return any such certificates (and any accompanying documents, as
appropriate) to, the person(s) so indicated. Unless otherwise indicated herein
under "Special Payment Instructions", please credit any Shares and Rights
tendered herewith by book-entry transfer that are not accepted for payment by
crediting the account at the Book-Entry Transfer Facility (as defined herein)
designated above. The undersigned recognizes that the Purchaser has no
obligation, pursuant to the "Special Payment Instructions", to transfer any
Shares or Rights from the name of the registered holder thereof if the Purchaser
does not accept for payment any of the Shares or Rights, respectively, so
tendered.
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
NUMBER OF SHARES REPRESENTED BY THE LOST OR DESTROYED
CERTIFICATES:________________________________
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares or Rights are not tendered
or not accepted for payment and/or the check for the purchase price of Shares or
Rights accepted for payment are to be issued in the name of someone other than
the undersigned, or if Shares or Rights delivered by book-entry transfer that
are not accepted for payment are to be returned by credit to an account
maintained at a Book-Entry Transfer Facility other than the account indicated
above.
Issue / / Check / / Certificates to:
Name: __________________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
Credit unpurchased Shares or Rights delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below:
Check appropriate Box:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
________________________________________________________________________________
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares or Rights are not tendered
or not accepted for payment and/or the check for the purchase price of Shares or
Rights accepted for payment are to be sent to someone other than the undersigned
or to the undersigned at an address other than that indicated above.
Mail / / Check / / Certificates to:
Name: __________________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
<PAGE>
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
________________________________________________________________________________
________________________________________________________________________________
(Signature(s) of Stockholder(s))
Dated: ------------------------------
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) for the Shares or Rights or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, please provide the following
information and see Instruction 5).
Name(s)_________________________________________________________________________
(Please Print)
Name of Firm:___________________________________________________________________
Capacity (full title):__________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Code and Telephone No.:____________________________________________________
Taxpayer Identification or Social Security No.:_________________________________
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Authorized Signature:___________________________________________________________
Name:___________________________________________________________________________
(Please Print)
Name of Firm:___________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Code and Telephone No.:____________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of Shares and
Rights tendered herewith, unless such registered holder(s) has completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the reverse hereof or (b) if such Shares and Rights
are tendered for the account of a financial institution (including most
commercial banks, savings and loan associations and brokerage houses) that is a
participant in the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be completed by stockholders either if certificates are to be
forwarded herewith or, unless an Agent's Message is utilized, if delivery of
Shares and/or Rights is to be made by book-entry transfer pursuant to the
procedures set forth in Section 2 of the Offer to Purchase and Section 2 of the
Supplement. For a stockholder validly to tender Shares and Rights pursuant to
the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees or an Agent's Message (in connection with book-entry transfer) and
any other required documents, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date and either (i)
certificates for tendered Shares and Rights must be received by the Depositary
at one of such addresses prior to the Expiration Date or (ii) Shares and Rights
must be delivered pursuant to the procedures for book-entry transfer set forth
herein and a Book-Entry Confirmation must be received by the Depositary prior to
the Expiration Date or (b) the tendering stockholder must comply with the
guaranteed delivery procedures set forth below and in Section 2 of the Offer to
Purchase and Section 2 of the Supplement.
Unless the Board Action Condition with respect to the Rights is satisfied,
stockholders will be required to tender one Right for each Share tendered in
order to effect a valid tender of Shares. Unless the Distribution Date occurs, a
tender of Shares will also constitute a tender of the associated Rights. The
Rights are currently represented by the certificates for the Shares with respect
to which the Rights were issued. The Rights Agreement provides that until the
close of business on the Distribution Date, the Rights will be evidenced by the
certificates for the Shares and may be transferred with and only with the
Shares. The Rights Agreement further provides that, as soon as practicable
following the Distribution Date, separate certificates representing the Rights
are to be mailed by the Company or the Rights Agent to holders of record of
Shares as of the close of business on the Distribution Date. If the Distribution
Date occurs and separate certificates representing the Rights are distributed
prior to the time Shares are tendered herewith, certificates representing a
number of Rights equal to the number of Shares being tendered herewith must be
delivered to the Depositary or, if available, a Book-Entry Confirmation must be
received by the Depositary with respect thereto, in order for such Shares
tendered herewith to be validly tendered. If the Distribution Date occurs and
separate certificates representing the Rights are not distributed prior to the
time Shares are tendered herewith, Rights may be tendered prior to a stockholder
receiving separate certificates for Rights by use of the guaranteed delivery
procedures described below.
Stockholders whose certificates for Shares or Rights are not immediately
available (including because certificates for Rights have not yet been
distributed by Pennzoil or the Rights Agent) or who cannot deliver their
certificates and all other required documents to the Depositary prior to the
Expiration Date or who cannot comply with the book-entry transfer procedure on a
timely basis may tender their Shares and Rights by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedure set forth in Section 2 of the Offer to Purchase.
Pursuant to such procedures, (i) such tender must be made by or through an
Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the Purchaser, must
be received by the Depositary prior to the Expiration Date and (iii) the
certificates for all tendered Shares and/or Rights, in proper form for transfer
(or a Book-Entry Confirmation with respect to all tendered Shares and/or
Rights), together with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
required documents are received by the Depositary within (a) in the case of
Shares, three trading days after the date of execution of such Notice of
Guaranteed Delivery or (b) in the case of Rights, a period ending on the later
of (1) three trading days after the date of execution of such Notice of
Guaranteed Delivery or (2) three business days (as defined in the Offer to
Purchase) after the date certificates for Rights are distributed to stockholders
by the Company or the Rights Agent, all as provided in Section 2 of the Offer to
Purchase. A "trading day" is any day on which the New York Stock Exchange (the
"NYSE") is open for business.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
<PAGE>
The signatures on this Letter of Transmittal cover the Shares and the
Rights tendered hereby whether or not such Rights are delivered simultaneously
with such Shares.
THE METHOD OF DELIVERY OF THE SHARES, THE RIGHTS, THIS LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
STOCKHOLDER. THE SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares or Rights will be purchased. All tendering stockholders, by
executing this Letter of Transmittal (or facsimile thereof), waive any right to
receive any notice of the acceptance of their Shares or Rights for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
number of Shares and Rights tendered and the Share certificate numbers with
respect to such Shares and Rights should be listed on a separate signed schedule
attached hereto.
4. Partial Tenders. (Not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares or Rights evidenced by any
certificate submitted are to be tendered, fill in the number of Shares or Rights
that are to be tendered in the box entitled "Number of Shares Tendered" or
"Number of Rights Tendered", as appropriate. In any such case, new
certificate(s) for the remainder of the Shares or Rights that were evidenced by
the old certificate(s) will be sent to the registered holder, unless otherwise
provided in the appropriate box on this Letter of Transmittal, as soon as
practicable after the Expiration Date or the termination of the Offer. All
Shares and Rights represented by certificates delivered to the Depositary will
be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
and Rights tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares or Rights tendered hereby are held of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares or Rights are registered in different names
on several certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Purchaser of the authority of such person so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares and Rights listed and transmitted hereby, no endorsements of certificates
or separate stock powers are required unless payment or certificates for Shares
or Rights not tendered or accepted for payment are to be issued in the name of a
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares and Rights evidenced by certificates listed
and transmitted hereby, the certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the certificates. Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6, the
Purchaser will pay any stock transfer taxes with respect to the transfer and
sale of Shares or Rights to it or its order pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or if certificates for Shares or
Rights not tendered or accepted for payment are to be registered in the name of,
any person other than the registered holder(s), or if tendered certificates are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder(s) or such person) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. Special Payment and Delivery Instructions. If a check is to be issued
in the name of, and/or certificates for Shares or Rights not accepted for
payment are to be returned to a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such certificates are to be
returned to a person other than the signer of this Letter of Transmittal, or to
an address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Any stockholder(s) delivering Shares or Rights
by book-entry transfer may request that Shares or Rights not purchased be
credited to such account maintained at a Book-Entry Transfer Facility as such
stockholder(s) may designate. If no such instructions are given, any such Shares
not purchased will be returned by crediting the account at the Book-Entry
Transfer Facilities designated above.
8. Requests for Assistance or Additional Copies. Questions and requests
for assistance or additional copies of the Offer to Purchase, the Supplement,
this Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 may
be directed to the Information Agent or the Dealer Manager at their respective
addresses or telephone numbers set forth below.
9. Waiver of Conditions. The Purchaser reserves the absolute right in its
sole discretion to waive, at any time or from time to time, any of the specified
conditions of the Offer, in whole or in part, in the case of any Shares or
Rights tendered.
<PAGE>
10. Backup Withholding. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on
Substitute Form W-9 in this Letter of Transmittal and certify under penalties of
perjury that such TIN is correct and that such stockholder is not subject to
backup withholding. If a stockholder does not provide such stockholder's correct
TIN or fails to provide the certifications described above, the Internal Revenue
Service (the "IRS") may impose a $50 penalty on such stockholder and payment of
cash to such stockholder pursuant to the Offer may be subject to backup
withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the Federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the stockholder upon filing an income tax
return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
11. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares or Rights has been lost, destroyed or stolen, the
stockholder should promptly notify the Depositary by checking the box
immediately preceding the special payment/special delivery instructions and
indicating the number of Shares or Rights lost. The stockholder will then be
instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES AND RIGHTS MUST BE RECEIVED BY THE DEPOSITARY OR SHARES AND RIGHTS MUST
BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE
PRIOR TO THE EXPIRATION DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE
PROCEDURES FOR GUARANTEED DELIVERY.
<PAGE>
(DO NOT WRITE IN SPACES BELOW)
Date Received ____________ Accepted By ________________ Checked By _____________
SHARES | SHARES | SHARES | CHECK | AMOUNT | SHARES | CERTIFICATE |
SURRENDERED | TENDERED | ACCEPTED | NO. | OF CHECK | RETURNED | NO. |
Delivery Prepared By ______________ Checked By ______________ Date _____________
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct taxpayer identification number on Substitute Form W-9
below. If such stockholder is an individual, the taxpayer identification number
is his social security number. If a tendering stockholder is subject to backup
withholding, he must cross out item (2) of the Certification box on the
Substitute Form W-9. If the Depositary is not provided with the correct taxpayer
identification number, the stockholder may be subject to a $50 penalty imposed
by the Internal Revenue Service. In addition, payments that are made to such
stockholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.
Certain stockholders (including, among others, all corporations, and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that stockholder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Depositary. Exempt stockholders, other than
foreign individuals, should furnish their TIN, write "Exempt" on the face of the
Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to
the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of his or her correct taxpayer identification
number by completing the form below certifying that the taxpayer identification
number provided on Substitute Form W-9 is correct (or that such stockholder is
awaiting a taxpayer identification number).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidance on which number to report.
If the tendering stockholder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, he should write
"Applied For" in the space provided for in the TIN in Part I, and sign and date
the Substitute Form W-9. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% on all payments of the purchase price until a TIN is provided to
the Depositary.
<PAGE>
<TABLE>
<S> <C> <C>
PAYER'S NAME: THE BANK OF NEW YORK
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING OR___________________________________
AND DATING BELOW. Employer Identification Number
---------------------------------------------------------------------------
DEPARTMENT OF THE PART 2 -- CERTIFICATION -- Under penalties of perjury, I certify that:
TREASURY (1) The number shown on this form is my correct Taxpayer Identification
INTERNAL REVENUE Number (or I am waiting for a number to be issued to me) and
SERVICE (2) I am not subject to backup withholding either because: (a) I am
Payer's Request for exempt from backup withholding, or (b) I have not been notified by
Taxpayer the Internal Revenue Service (the "IRS") that I am subject to backup
Identification withholding as a result of a failure to report all interest or
Number ("TIN") dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part 2 above if you
have been notified by the IRS that you are currently subject to
backup withholding because of under-reporting interest or dividends
on your tax returns. However, if after being notified by the IRS
that you were subject to backup withholding, you receive another
notification from the IRS that you are no longer subject to backup
withholding, do not cross out such item (2). (Also see instructions
in the enclosed Guidelines).
---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
SIGNATURE___________________________ DATE____________ PART 3 -- Awaiting TIN / /
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Officer or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a Taxpayer Identification Number to the Depositary by the
time of payment, 31% of all reportable payments made to me will be withheld, but
that such amounts will be refunded to me if I provide a certified Taxpayer
Identification Number to the Depositary within sixty (60) days.
Signature________________________________ Date _______
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
20th Floor
New York, NY 10022
Toll Free (800) 566-9061
Banks and Brokerage
Firms please call:
(800) 662-5200
The Dealer Manager for the Offer is:
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
(212) 816-7346
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payor.
- --------------------------------------------------------------------------------
GIVE THE TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of the account or,
account) if combined funds, the first
individual on the account(1)
3. Husband and wife The actual owner of the account or,
(joint account) if joint funds, either person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor The adult or, if the minor is the
(joint account) only contributor, the minor(1)
- --------------------------------------------------------------------------------
GIVE THE TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------------------------
9. A valid trust, estate, or pension The legal entity (Do not furnish the
trust identifying number of the personal
representative or trustee unless the
legal entity itself is not designated
in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name The partnership
of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or nominee
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show your individual name. You may also enter your business name. You may
use either your social security number or your employer identification
number.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the "IRS") and apply for a
number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisers Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except a corporation that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and payments
by certain fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries, Inc.,
Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
o Payments to nonresident aliens subject to withholding under Section 1441 of
the Code.
o Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid in
money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payor.
o Payments of tax-exempt interest (including exempt-interest dividends under
Section 852 of the Code).
o Payments described in Section 6049(b)(5) of the Code to non-resident aliens.
o Payments on tax-free covenant bonds under Section 1451 of the Code.
o Payments made by certain foreign organizations.
o Payments of mortgage interest to you.
o Payments made to an appropriate nominee.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYOR. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYOR A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, and 6050A and 6050N
of the Code and the regulations promulgated thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payors
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payors must generally withhold 31% of taxable interest,
dividend, and certain other payments to a payee who does not furnish a taxpayer
identification number to a payor. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payor, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
[UNION PACIFIC RESOURCES GROUP LETTERHEAD]
October 7, 1997
Dear Pennzoil Shareholder:
UPR HAS REVISED ITS OFFER - ALL CASH FOR ALL SHARES
---------------------------------------------------
Union Pacific Resources Group Inc. (UPR) has revised its offer to purchase
Pennzoil shares and is now offering $84 per share in cash for all Pennzoil
shares. This revises the proposal UPR made in June to purchase Pennzoil shares
for a combination of cash and stock.
The $84 per share price is 41% higher than the closing price on the trading day
prior to the day we announced our offer in June and is 56% higher than the
average closing price for the 12 months prior to the announcement of our offer
in June.
Pennzoil is Trying to Prevent You from Receiving $84 Per Share
--------------------------------------------------------------
Despite this substantial premium, Pennzoil's Board has repeatedly refused to
allow you to receive the value of our offer. Instead, Pennzoil's Board has put
forward a smokescreen of excuses for its refusal. Our revised offer eliminates
Pennzoil's excuses.
Tell Pennzoil's Board You Want $84 Per Share - Tender Your Shares
-----------------------------------------------------------------
You can send the Board a message that you want our $84 per share cash offer by
tendering your shares into UPR's offer before the deadline of November 5, 1997.
To tender your shares, do ONE of the following:
o If your shares are held by a bank or broker, immediately contact your
account executive at the firm that is holding your shares and instruct them
to tender your shares.
o If you hold the actual stock certificate, you should complete the enclosed
letter of transmittal and, using the enclosed envelope, send it with your
stock certificate to The Bank of New York, the depositary for the offer.
If you have any questions or need assistance in tendering your shares, call
Morrow & Co., UPR's information agent, at 1-800-566-9061.
Even though you may be sending in your actual Pennzoil stock certificates, they
still belong to you and can be withdrawn if you wish to sell your shares in the
open market. If we are able to complete our offer, you will receive $84 in cash
for each of your shares.
If you have already tendered your shares, you do not need to do anything further
regarding your shares.
If you have not tendered your shares yet, you must do so by November 5, 1997 if
you want to take advantage of UPR's $84 per share cash offer.
Thank you very much.
Sincerely,
/s/ Jack L. Messman
Jack L. Messman
Chairman and CEO
P.S. In addition to tendering your shares into UPR's offer, you can send
Pennzoil a message by contacting the Pennzoil Board of Directors now and telling
them that you support UPR's $84 per share cash offer. A contact list for the
Pennzoil Board is on the reverse side of this letter.
We are enclosing a Supplement which, together with the Offer to Purchase and the
Letter of Transmittal, describes the revised offer.
<PAGE>
- --------------------------------------------------------------------------------
Office
- --------------------------------------------------------------------------------
Howard H. Baker, Jr. Baker, Donelson, Bearman & Caldwell
801 Pennsylvania Avenue, N.W.
Suite 800
Washington, D.C. 20004
202-508-3400
202-508-3402 (Fax)
- --------------------------------------------------------------------------------
W. J. Bovaird c/o Pennzoil Company
700 Milam
P.O. Box 2967
Houston, Texas 77252
713-546-8966
713-546-6050 (Fax)
- --------------------------------------------------------------------------------
W. L. Lyons Brown, Jr. c/o Pennzoil Company
700 Milam
P.O. Box 2967
Houston, Texas 77252
713-546-8966
713-546-6050 (Fax)
- --------------------------------------------------------------------------------
Harry H. Cullen Harry H. Cullen
P.O. Box 3331
Houston, Texas 77253-3331
713-651-8844
713-651-8866 (Fax)
- --------------------------------------------------------------------------------
Ernest H. Cockrell Cockrell Oil Corporation
1600 Smith, Ste. 4600
Houston, Texas 77002-7348
713-209-7300
713-209-7450 (Fax)
- --------------------------------------------------------------------------------
Alfonso Fanjul Okeelanta Corporation
P.O. Box 1059
Palm Beach, Florida 33480
for FEDERAL EXPRESS:
316 Royal Poinclana Plaza
561-655-6303
561-659-3206 (Fax)
- --------------------------------------------------------------------------------
Berdon Lawrence Hollywood Marine Inc.
55 Waugh Dr., Ste. 1000
Houston, Texas 77007-5840
713-868-1661
713-868-6422 (Fax)
- --------------------------------------------------------------------------------
James L. Pate Pennzoil Company
700 Milam
P.O. Box 2967
Houston, Texas 77252
713-546-8966
713-546-6050 (Fax)
- --------------------------------------------------------------------------------
Gen. Brent Scowcroft 1750 K Street, N.W.
Suite 800
Washington, D.C. 20006
202-296-9365
202-296-9395 (Fax)
- --------------------------------------------------------------------------------
Gerald B. Smith Smith, Graham & Co.
Texas Commerce Tower
600 Travis, Ste. 6900
Houston, Texas 77002
713-227-1100
713-223-0844 (Fax)
- --------------------------------------------------------------------------------
Cyril Wagner, Jr. Wagner & Brown, LTD
Oil Gas Production
P.O. Box 1714
300 Marienfeld Street, Ste. 1100
Midland, Texas 79701
915-682-7936
915-686-5928 (Fax)
- --------------------------------------------------------------------------------
NOTICE OF GUARANTEED DELIVERY
for
TENDER OF SHARES OF COMMON STOCK
(Including the Associated Preferred Stock Purchase Rights)
of
PENNZOIL COMPANY
to
RESOURCES NEWCO, INC.,
a wholly owned subsidiary of
UNION PACIFIC RESOURCES GROUP INC.
(Not To Be Used For Signature Guarantees)
This revised Notice of Guaranteed Delivery, or one substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
representing shares of Common Stock, par value $0.83 1/3 per share (including
the associated Rights, as defined in the Offer to Purchase) (collectively, the
"Shares"), of Pennzoil Company, a Delaware corporation, are not immediately
available, if the procedure for book-entry transfer cannot be completed on a
timely basis, or if time will not permit all required documents to reach the
Depositary prior to the Expiration Date (as defined in Section 1 of the
Supplement). Such form may be delivered by hand or transmitted by facsimile
transmission or mail to the Depositary. See Section 2 of the Offer to Purchase
and Section 2 of the Supplement.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight
Tender & Exchange Department (212) 815-6213 Courier:
P.O. Box 11248 (For Eligible Tender & Exchange Department
Church Street Station Institutions Only) 101 Barclay Street
New York, New York Receive and Deliver Window
10286-1248 Confirm by Telephone: New York, New York 10286
(800) 507-9357
</TABLE>
-------------------------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE
TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Resources Newco, Inc., a Delaware
corporation and a wholly owned subsidiary of Union Pacific Resources Group Inc.,
a Utah corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated June 23, 1997, the Supplement dated October 7, 1997
and the related revised Letter of Transmittal (which, together with any
amendments or supplements thereto, constitute the "Offer"), receipt of which is
hereby acknowledged, ____________ shares of Common Stock, par value $0.83 1/3
per share (the "Shares"), of Pennzoil Company, a Delaware corporation, pursuant
to the guaranteed delivery procedure set forth in Section 2 of the Offer to
Purchase and Section 2 of the Supplement.
Signature(s)_______________________ Address(es)_______________________________
___________________________________ __________________________________________
(Zip Code)
Name of Record Holder(s):__________ Area Code and Tel. No(s)._________________
___________________________________ Complete and check ONE box if Shares will
be tendered by book-entry transfer:
Certificate No(s). (if available):
___________________________________ Account No. _______________ at
___________________________________ / / The Depository Trust Company
___________________________________ / / Philadelphia Depository Trust Company
___________________________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program guarantees delivery to the Depositary, at
one of its addresses set forth above, of certificates representing the Shares
tendered hereby in proper form for transfer, or confirmation of book-entry
transfer of such Shares into the Depositary's accounts at The Depository Trust
Company or the Philadelphia Depository Trust Company, in each case with delivery
of a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), and any other required documents, within three New York Stock
Exchange, Inc. trading days after the date hereof.
__________________________________________
(Name of Firm)
__________________________________________
(Authorized Signature)
__________________________________________
(Name)
__________________________________________
(Address)
__________________________________________
(Zip Code)
__________________________________________
(Area Code and Telephone No.)
Dated: _____________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
CERTIFICATES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
Pennzoil Company
at
$84.00 Net Per Share in Cash
by
Resources Newco, Inc.,
a wholly owned subsidiary of
Union Pacific Resources Group Inc.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, NOVEMBER 5, 1997, UNLESS THE OFFER IS EXTENDED. SHARES
WHICH ARE TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME
PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
October 7, 1997
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
We have been appointed by Resources Newco, Inc., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Union Pacific Resources Group
Inc., a Utah corporation ("UPR"), to act as Dealer Manager in connection with
the Purchaser's offer to purchase all outstanding shares of Common Stock, par
value $0.83 1/3 per share (the "Common Stock"), of Pennzoil Company, a Delaware
corporation ("Pennzoil"), together with the associated preferred stock purchase
rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
October 28, 1994 (the "Rights Agreement"), between Pennzoil and Chemical Bank,
as Rights Agent (the Common Stock, together with the Rights hereinafter referred
to as the "Shares") at $84.00 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase dated June 23, 1997, Supplement dated October 7, 1997 and the related
revised Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer") enclosed herewith.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Supplement dated October 7, 1997;
2. Revised Letter of Transmittal for your use and for the information of
your clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information relating
to backup federal income tax withholding;
3. Revised Notice of Guaranteed Delivery to be used to accept the Offer
if certificates for Shares and all other required documents cannot be
delivered to the Depositary by the Expiration Date (as defined in the
Supplement) or if the procedure for book-entry transfer cannot be completed
on a timely basis;
4. A form of letter which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer; and
5. A return envelope addressed to The Bank of New York, the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and pay for all of the Shares
which are validly tendered prior to the Expiration Date and not theretofore
properly withdrawn when, as and if the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance of such Shares for payment pursuant
to the Offer. Payment for Shares purchased pursuant to the Offer will in all
cases be made only after timely
<PAGE>
receipt by the Depositary of certificates for such Shares, or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company or the Philadelphia Depository Trust
Company, pursuant to the procedures described in Section 2 of the Offer to
Purchase and Section 2 of the Supplement, a properly completed and duly executed
Letter of Transmittal (or a properly completed and manually signed facsimile
thereof) or an Agent's Message in connection with a book-entry transfer, and all
other documents required by the Letter of Transmittal.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Dealer Manager and the Information Agent as
described in the Offer to Purchase) for soliciting tenders of Shares pursuant to
the Offer. The Purchaser will, however, upon request, reimburse brokers,
dealers, commercial banks and trust companies for reasonable and necessary costs
and expenses incurred by them in forwarding materials to their customers.
The Purchaser will pay or cause to be paid all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 6 of the enclosed revised Letter of Transmittal.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, NOVEMBER 5, 1997, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed revised Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry delivery of Shares, and any other
required documents, should be sent to the Depositary, and certificates
representing the tendered Shares should be delivered or such Shares should be
tendered by book-entry transfer, all in accordance with the Instructions set
forth in the revised Letter of Transmittal, the Offer to Purchase and the
Supplement.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents or to complete the
procedure for delivery by book-entry transfer prior to the expiration of the
Offer, a tender may be effected by following the guaranteed delivery procedures
specified under Section 2 in the Offer to Purchase and Section 2 of the
Supplement.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers set
forth on the back cover of the Offer to Purchase or the Supplement.
Very truly yours,
SMITH BARNEY INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE PURCHASER, UPR, THE DEALER MANAGER, THE INFORMATION AGENT OR
THE DEPOSITARY, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF
THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND
THE STATEMENTS CONTAINED THEREIN.
2
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
PENNZOIL COMPANY
at
$84.00 NET PER SHARE IN CASH
by
RESOURCES NEWCO, INC.,
a wholly owned subsidiary of
UNION PACIFIC RESOURCES GROUP INC.
-----------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, NOVEMBER 5, 1997, UNLESS THE OFFER IS EXTENDED.
SHARES WHICH ARE TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY
TIME PRIOR TO THE EXPIRATION DATE.
-----------------------------------------------------------------------------
TO OUR CLIENTS:
Enclosed for your consideration are the Supplement dated October 7, 1997
(the "Supplement") to the Offer to Purchase dated June 23, 1997 and the revised
Letter of Transmittal (which, together with any amendments or supplements
thereto, constitute the "Offer") in connection with the offer by Resources
Newco, Inc., a Delaware corporation (the "Purchaser"), a wholly owned subsidiary
of Union Pacific Resources Group Inc., a Utah corporation, to purchase for cash
all outstanding shares of Common Stock, par value $0.83 1/3 per share (the
"Common Stock"), of Pennzoil Company, a Delaware corporation ("Pennzoil"),
together with the associated preferred stock purchase rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of October 28, 1994, between
Pennzoil and Chemical Bank, as Rights Agent (the Common Stock, together with the
Rights, are referred to herein as the "Shares"). We are the holder of record of
Shares held for your account. A tender of such Shares can be made only by us as
the holder of record and pursuant to your instructions. The enclosed revised
Letter of Transmittal is furnished to you for your information only and cannot
be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $84.00 per Share, net to you in cash without
interest, and the Offer is now being made for all outstanding Shares.
2. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Wednesday, November 5, 1997, unless the Offer is extended.
<PAGE>
3. The Offer is conditioned upon, among other things, a minimum of
25,163,657 Shares being properly tendered prior to the Expiration Date (as
defined in Section 1 of the Supplement) and not withdrawn.
4. Any stock transfer taxes applicable to the sale of Shares to the
Purchaser pursuant to the Offer will be paid by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Except as disclosed in the Offer to Purchase, the Purchaser is not aware of
any state in which the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. In any jurisdiction in
which the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of the
Purchaser by the Dealer Manager or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form enclosed
herewith. An envelope to return your instructions to us is enclosed. If you
authorize tender of your Shares, all such Shares will be tendered unless
otherwise specified on the following page. Your instructions should be forwarded
to us in ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
STOCKHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED SHARES PURSUANT TO THE
OFFER USING THE BLUE LETTER OF TRANSMITTAL OR THE YELLOW NOTICE OF GUARANTEED
DELIVERY AND WHO HAVE NOT PROPERLY WITHDRAWN SUCH SHARES HAVE VALIDLY TENDERED
SUCH SHARES FOR THE PURPOSES OF THE OFFER, AS AMENDED, AND NEED NOT TAKE ANY
FURTHER ACTION.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
PENNZOIL COMPANY
The undersigned acknowledge(s) receipt of your letter and the enclosed
Supplement dated October 7, 1997 to the Offer to Purchase dated June 23, 1997,
and the related Letter of Transmittal, in connection with the Offer by Resources
Newco, Inc., a Delaware corporation and a wholly owned subsidiary of Union
Pacific Resources Group Inc., a Utah corporation, to purchase all outstanding
shares of Common Stock, par value $0.83 1/3 per share (the "Common Stock"), of
Pennzoil Company, a Delaware corporation ("Pennzoil"), together with the
associated preferred stock purchase rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of October 28, 1994, between Pennzoil and Chemical
Bank, as Rights Agent (the Common Stock and the Rights are referred to herein as
the "Shares").
This will instruct you to tender the number of Shares indicated below (or if
no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
- ------------------------------------ SIGN HERE
Number of Shares to be Tendered:*
______________________ Shares
- ------------------------------------
_________________________________________
Signature(s)
Dated:______________________________ _________________________________________
_________________________________________
Please print name(s) and address(es) here
- ------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
Union Pacific Resources Group Inc.
News Release [UPR LOGO]
- --------------------------------------------------------------------------------
UPR REVISES OFFER FOR PENNZOIL TO
$84 PER SHARE CASH FOR ALL SHARES
All Cash Proposal Eliminates Pennzoil Excuses
For Denying Shareholders Right to Choose
UPR Also Proposes Opportunity for Pennzoil Shareholders to Benefit
from Any Increase in Value of Pennzoil International E&P Properties,
If Pennzoil Negotiates
FOR IMMEDIATE RELEASE -- Fort Worth, TX - Oct. 6, 1997 - Union Pacific
Resources Group Inc. (NYSE: UPR) today announced a revised offer to acquire
Pennzoil Company. UPR is now offering to purchase all outstanding shares of
Pennzoil common stock for cash at $84 per share. This offer is not conditioned
upon financing.
"Our revised offer requires the Pennzoil Board to demonstrate to its
shareholders how Pennzoil, on its own, can provide value greater than our
offer," said Jack L. Messman, Chairman and Chief Executive Officer of UPR. "This
all cash proposal offers Pennzoil shareholders two clear alternatives: receive
$84 per share in cash today from UPR, or hold Pennzoil stock indefinitely in the
hope that Pennzoil's undisclosed strategic plan might someday provide more than
$84 per share in present value.
In a letter today to Pennzoil Chairman James L. Pate, Mr. Messman said, "Since
our initial offer in June, you have had ample time to explain to your
shareholders how Pennzoil, on its own, can deliver more than $84 per share in
present value. In our opinion, you have failed to do so," Mr. Messman continued.
"There can be no excuses for continuing to deny Pennzoil shareholders their
right to choose between our $84 cash offer and your plan. The only obstacle to
giving Pennzoil shareholders the opportunity to choose between these
alternatives is the refusal by Pennzoil's Board of Directors to redeem
Pennzoil's poison pill and to remove its other takeover defenses. We are willing
to accept the judgment of your shareholders as to which of the two alternatives
they prefer; are you? If not, we can only conclude that Pennzoil fears the
decision its own shareholders will make."
<PAGE>
UPR Proposes Offering Pennzoil Shareholders Upside
--------------------------------------------------
Potential of International E&P Properties, If Pennzoil Will Negotiate
---------------------------------------------------------------------
In the letter, Mr. Messman also wrote, "We believe our $84 per share cash offer
fully and fairly values all of Pennzoil's businesses. Clearly, industry analysts
and your own shareholders overwhelmingly agree.
You have claimed, as an excuse for denying your shareholders the opportunity to
accept our offer, that we have underestimated the long-term potential of
Pennzoil's international (i.e., non-North American) exploration and production
assets. Based on our own assessment, we disagree. "However, if Pennzoil will
begin negotiations, UPR is prepared to consider a transaction structure which
would provide Pennzoil shareholders the opportunity to benefit directly from a
future increase in value, if it occurs, of Pennzoil's international E&P assets,
above the $600 million in value that UPR has ascribed to those assets."
Mr. Messman also noted that the international valuation assumes the commercial
viability of Pennzoil's high-profile Karabakh prospect in the Caspian Sea, and
that Pennzoil has indicated that results from the first exploratory well should
be known soon.
Mr. Messman's letter to Mr. Pate goes on to state: "Although we cannot make this
additional value feature a part of our tender offer at this time, because we
need Pennzoil's cooperation to implement this approach, there are several ways
this could be accomplished. For example, one way might be to form an entity to
hold the international E&P assets and to distribute to every Pennzoil
shareholder, in addition to $84 per share in cash, a combination of target or
common stock and related warrants in that entity."
The full text of Mr. Messman's letter to Mr. Pate is attached.
UPR's Proven Business Model Would Quickly
-----------------------------------------
Increase Production from Pennzoil's Oil and Gas Properties
----------------------------------------------------------
In announcing the all cash tender offer today, Mr. Messman also reiterated the
powerful business rationale for acquiring Pennzoil: "This combination is driven
by the opportunity to apply UPR's proven business model to Pennzoil's drill
sites and create value through growth - something Pennzoil has been unable to
do. Pennzoil has a substantial domestic property base with unexploited
opportunities for development and exploratory drilling. By increasing production
and reserves from those assets, this acquisition will allow UPR to perform even
beyond our established growth targets."
<PAGE>
Mr. Messman added that, "After acquiring Pennzoil, we intend to maintain a
strong investment grade credit rating and the financial flexibility to fund our
business plan. Following the closing of the Pennzoil acquisition, we plan to
refinance our acquisition financing through a combination of asset sales and the
public or private sale of equity and debt securities.
Terms of the Transaction
------------------------
Pennzoil shareholders will be entitled to receive $84 per share in cash, either
in the tender offer or in a subsequent merger between Pennzoil and a
wholly-owned subsidiary of UPR. This proposal revises the offer UPR made on June
23, 1997 to acquire Pennzoil for a combination of $84 per share in cash for
50.1% of Pennzoil's outstanding shares and UPR stock for the remaining shares.
The revised offer is subject to the same conditions as the original offer.
A total of 61.5% of Pennzoil shares were tendered into UPR's tender offer as of
the initial expiration date of July 21, 1997. The tender offer was previously
scheduled to expire on October 29, 1997, prior to being extended today to
midnight New York time on November 5, 1997. At the close of business on October
3, 1997, a total of 18,187,684 Pennzoil shares, or over 38.5% of outstanding
shares, still remained tendered. The normal practice for many investors in a
tender offer is to withdraw their shares temporarily after the initial
expiration date in order to give themselves trading flexibility prior to
re-tendering at a later date.
As with the original offer, the revised offer will generate immediate and
ongoing accretion to UPR's cash flow per share, which is the primary measurement
of value in the E&P industry, while it will have a near-term dilutive effect on
earnings per share. Based on the revised offer, UPR estimates that after
completion of the Pennzoil acquisition, using debt to finance the purchase of
Pennzoil common stock and assuming no refinancing of that acquisition debt, 1998
discretionary cash flow per share could increase by approximately 45% and 1998
earnings per share could decrease by approximately 75%, as compared to 1998
consensus estimates. The Company's estimates are subject to a number of
assumptions, including a year-end 1997 completion of the acquisition. These per
share figures will be affected as the Company implements the refinancing of
acquisition debt through the contemplated combination of asset sales and sale of
equity and debt securities.
UPR is the largest domestic independent oil and gas exploration and production
company. Headquartered in Fort Worth, Texas, UPR has been the #1 domestic
driller for the past five years.
<PAGE>
This press release is not an offer to purchase shares of Pennzoil, nor is it an
offer to sell any securities which may be issued in a merger involving Pennzoil
and a subsidiary of UPR. The cash tender offer by a subsidiary of UPR to acquire
all of Pennzoil's common shares will be made solely by the Offer to Purchase,
the Supplement thereto, and the related Letter of Transmittal. Any issuance of
securities in any merger involving Pennzoil and a subsidiary of UPR would have
to be registered under the Securities Act of 1933, as amended, and such
securities would be offered only by means of a prospectus complying with such
Act.
This press release contains forward-looking statements that involve risks and
uncertainties, including statements regarding future drilling and development
activities, the achievement of future growth targets, estimates of discretionary
cash flow and earnings per share, future financing activities and the effect
thereof and other matters. Actual results may vary materially for the reasons
detailed in UPR's SEC reports, including its reports on Form 10-K for the year
ended December 31, 1996 and on Form 10-Q for the quarter ended June 30, 1997.
# # # #
Media Contacts: Investor Relations Contact:
Walter Montgomery Michael Liebschwager
October 6 Only: 817-877-6527 817-877-6531
After October 6: 212-484-6721
Pat Doyle On the Internet: www.upr.com
817-877-6527
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares or Rights. The Offer is made solely by the Offer to Purchase
dated June 23, 1997, the Supplement dated October 7, 1997 and the revised Letter
of Transmittal, and is not being made to (nor will tenders be accepted from or
on behalf of) holders of Shares or Rights in any jurisdiction in which the
making of the Offer or acceptance thereof would not be in compliance with the
laws of such jurisdiction. In any jurisdiction the securities, blue sky or other
laws of which require the Offer to be made by a licensed broker or dealer, the
Offer is being made on behalf of Purchaser by Smith Barney Inc. or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
Resources Newco, Inc.
a wholly owned subsidiary of
Union Pacific Resources Group Inc.
Has Amended its Offer
and is Now Offering to Purchase
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
Pennzoil Company
at
$84.00 Net Per Share in Cash
Resources Newco, Inc., a Delaware corporation("Purchaser") which is a
wholly owned subsidiary of Union Pacific Resources Group Inc., a Utah
corporation ("UPR"), is offering to purchase all outstanding shares of common
stock, par value $0.83-1/3 per share (the "Shares"), of Pennzoil Company, a
Delaware corporation ("Pennzoil"), together with the associated preferred stock
purchase rights (the "Rights") issued pursuant to the Rights Agreement dated as
of October 28, 1994 (the "Rights Agreement"), between Pennzoil and Chemical
Bank, as Rights Agent (the "Rights Agent"), at a price of $84.00 per Share (and
associated Right), net to the seller in cash, without interest thereon (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase dated June 23, 1997 (the "Offer to Purchase"), the Supplement
dated October 7, 1997 (the "Supplement") and in the revised Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Unless the context otherwise requires, all
references herein to Shares shall include the Rights.
Unless the Rights are redeemed or Purchaser is satisfied, in its sole
discretion, that the Rights have been invalidated or are otherwise inapplicable
to the Offer and the Proposed Merger (as defined herein), stockholders are
required to tender one Right for each Share tendered in order to effect a valid
tender of Shares in accordance with the procedures set forth in Section 2 of the
Offer to Purchase and Section 2 of the Supplement. Unless the Distribution Date
(as defined in the Offer to Purchase) occurs, a tender of Shares will also
constitute a tender of the associated Rights.
The purpose of the Offer is to acquire all outstanding Shares of Pennzoil.
UPR is seeking to negotiate with Pennzoil a definitive acquisition agreement
pursuant to which Pennzoil would, as soon as practicable following consummation
of the Offer, consummate a merger (the "Proposed Merger") with Purchaser or
another direct or indirect wholly owned subsidiary of UPR. At the effective time
of the Proposed Merger, each Share that is issued and outstanding immediately
prior to the effective time (other than Shares held in the treasury of Pennzoil
or owned by UPR, Purchaser or any direct or indirect wholly owned subsidiary of
UPR) would be converted into the right to receive $84.00 in cash.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, NOVEMBER 5, 1997, UNLESS THE OFFER IS EXTENDED. SHARES WHICH
ARE TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
The Offer is conditioned upon, among other things, the satisfaction or,
where applicable, waiver of the following conditions: (i) there being validly
tendered and not withdrawn prior to the Expiration Date a number of Shares
which, together with Shares owned by Purchaser and its affiliates, will
constitute at least a majority of the total number of outstanding Shares on a
fully diluted basis as of the date the Shares are accepted for payment by
Purchaser pursuant to the Offer, and (ii) Purchaser being satisfied in its
reasonable discretion that the Board of Directors of Pennzoil has irrevocably
taken all such action so that (a) the acquisition of Shares pursuant to the
Offer and the Proposed Merger have been approved pursuant to Section 203 of the
Delaware General Corporation Law or the provisions of Section 203 are otherwise
inapplicable to the acquisition of Shares pursuant to the Offer and the Proposed
Merger, (b) the acquisition of Shares pursuant to the Offer and the Proposed
Merger have been approved pursuant to Article Sixth of Pennzoil's Restated
Certificate of Incorporation, (c) the Rights have been redeemed or Purchaser is
satisfied in its reasonable discretion that the Rights have been invalidated or
are otherwise inapplicable to the Offer and the Proposed Merger, and (d) either
(1) Purchaser's designees have been elected to the Board of Directors of
Pennzoil so that, after such election, such designees constitute a majority of
the Board of Directors of Pennzoil, or (2) Pennzoil has entered into a mutually
satisfactory definitive merger agreement with UPR and Purchaser to provide for
the acquisition of Pennzoil pursuant to the Offer and the Proposed Merger. The
Offer is also subject to other terms and conditions contained in the Offer to
Purchase and the Supplement.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn as, if and when Purchaser gives oral or written notice to The Bank of
New York (the "Depositary") of its acceptance for payment of such Shares.
Payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from
Purchaser and transmitting payment to tendering stockholders. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (a) certificates for (or a timely
Book-Entry Confirmation with respect to) such Shares and, if the Distribution
Date occurs, certificates for (or a timely Book-Entry Confirmation, if
available, with respect to) the associated Rights (unless Purchaser elects to
make payment for such Shares pending receipt of the certificates for, or a
Book-Entry Confirmation with respect to, such Rights), (b) a revised Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and (c) any other documents required by the revised Letter of
Transmittal. The per Share consideration paid to any stockholder pursuant to the
Offer will be the highest per Share consideration paid to any other stockholder
pursuant to the Offer. Under no circumstances will interest be paid on the
purchase price of the Shares to be paid by Purchaser, regardless of any
extension of the Offer or any delay in making such payment.
The Shares and the Rights tendered pursuant to the Offer may be withdrawn
at any time prior to acceptance for payment of Shares in the Offer. The Shares
or the Rights may not be withdrawn unless the associated Rights or Shares, as
the case may be, are also withdrawn. A withdrawal of the Shares or the Rights
will also constitute a withdrawal of the associated Rights or Shares, as the
case may be. For a withdrawal to be effective, a written, telegraphic, or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase and the Supplement and must specify the person who tendered the Shares
and the Rights to be withdrawn, the number of the Shares and Rights to be
withdrawn and the name of the registered holder of the Shares and the Rights to
be withdrawn, if different from the name of the person who tendered the Shares
and the Rights. If certificates for the Shares or the Rights have been delivered
or otherwise identified to the Depositary, then, prior to the physical release
of such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares or Rights have been tendered
by an Eligible Institution (as defined in Section 2 of the Offer to Purchase),
the signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If the Shares or the Rights have been delivered pursuant to the
procedure for book-entry transfer as set forth in Section 2 of the Offer to
Purchase, any notice of withdrawal must also specify the name and number of the
account at the appropriate Book-Entry Transfer Facility to be credited with the
withdrawn Shares or Rights and otherwise comply with such Book-Entry Transfer
Facility's procedures. Withdrawals of tenders of the Shares and the Rights may
not be rescinded, and any Shares and Rights properly withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares and Rights may be retendered by again following one of the procedures
described in Section 2 of the Offer to Purchase and Section 2 of the Supplement
at any time prior to the Expiration Date. All questions as to the form and
validity (including time of receipt) of notices of withdrawal will be determined
by Purchaser in its sole discretion, which determination will be final and
binding. None of Purchaser, UPR, the Depositary, the Information Agent, the
Dealer Manager or any other person will be under any duty to give notification
of any defects or irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification.
Stockholders who have previously validly tendered Shares and who have not
properly withdrawn such Shares have validly tendered such Shares for the
purposes of the Offer, as amended, and need not take any further action.
Purchaser reserves the right, in its sole discretion, at any time and from
time to time, and regardless of whether or not any of the events or facts set
forth in Section 10 of the Supplement shall have occurred, to (a) extend the
period of time during which the Offer is open, and thereby delay acceptance for
payment of and the payment for any Shares, by giving oral or written notice of
such extension to the Depositary and (b) amend the Offer in any other respect by
giving oral or written notice of such amendment to the Depositary. Under no
circumstances will interest be paid on the purchase price for tendered Shares,
whether or not Purchaser exercises its right to extend the Offer.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and the Supplement and is
incorporated herein by reference.
The Supplement, the revised Letter of Transmittal and other relevant
materials are being given to Pennzoil and then will be mailed to record holders
of Shares, and will be furnished to brokers, dealers, banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder lists, or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares by Pennzoil.
The Offer to Purchase, the Supplement and the revised Letter of
Transmittal contain important information that should be read before any
decision is made with respect to the Offer.
Questions and requests for assistance or for copies of the Offer to
Purchase, the Supplement, the revised Letter of Transmittal and other tender
offer materials may be directed to the Information Agent or the Dealer Manager,
as set forth below, and copies will be furnished promptly at Purchaser's
expense. No fees or commissions will be payable to brokers, dealers or other
persons (other than the Dealer Manager and the Information Agent) for soliciting
tenders of Shares and Rights pursuant to the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, NY 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms please call:
(800) 662-5200
The Dealer Manager for the Offer is:
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
(212) 816-7346
October 7, 1997
[UPR LOGO]
October 6, 1997
Dear Pennzoil Shareholder:
Union Pacific Resources Group Inc. (UPR) today revised its offer to acquire
Pennzoil Company. We are now offering $84 per share in cash for all shares. Our
offer is not subject to financing.
This all cash offer presents two clear alternatives for you and all other
Pennzoil shareholders:
a) receive $84 per share in cash today, or
b) hold Pennzoil stock indefinitely in the hope that, sometime in the
future, Pennzoil's secret strategic plan might provide more than
$84 per share in present value.
Pennzoil's refusal to remove its poison pill and other takeover defenses is the
only obstacle that prevents its shareholders from having the opportunity to
choose between our $84 cash offer and Pennzoil's plan.
I urge you to:
1) tender your shares to UPR, and
2) contact Pennzoil Directors now to tell them to begin negotiations
with UPR. (A contact list for the Pennzoil Board is attached.)
We believe our $84 per share cash offer fully and fairly values all of
Pennzoil's businesses. Clearly, industry analysts and Pennzoil's own
shareholders overwhelmingly agree.
Pennzoil has claimed, as an excuse for denying its shareholders the opportunity
to accept our offer, that we have underestimated the long-term potential of
Pennzoil's international (i.e., non-North American) exploration and production
assets. Based on our own assessment, we disagree. However, if Pennzoil will
begin negotiations, UPR is prepared to consider a transaction structure which
would provide Pennzoil shareholders the opportunity to benefit directly from a
future increase in value, if it occurs, of Pennzoil's international E&P assets,
above the $600 million in value that UPR has ascribed to those assets.
<PAGE>
This international valuation assumes the commercial viability of Pennzoil's
high-profile Karabakh prospect in the Caspian Sea. Pennzoil has indicated that
the results from the first exploratory well should be known soon.
For your information, I am enclosing a copy of the letter I sent today to
Pennzoil CEO Jim Pate. If you have any questions regarding UPR's tender offer,
call Morrow & Co., UPR's information agent, at 1-800-662-5200.
Sincerely,
/s/ Jack L. Messman
Jack L. Messman
P.S. You can make the difference. Contact the Pennzoil Board today, before it
meets to consider UPR's offer.
This letter is not an offer to purchase shares of Pennzoil, nor is it an offer
to sell any securities which may be issued in a merger involving Pennzoil and a
subsidiary of UPR. The cash tender offer by a subsidiary of UPR to acquire all
of Pennzoil's common shares will be made solely by the Offer to Purchase, the
Supplement thereto, and the related Letter of Transmittal. Any issuance of
securities in any merger involving Pennzoil and a subsidiary of UPR would have
to be registered under the Securities Act of 1933, as amended, and such
securities would be offered only by means of a prospectus complying with such
Act.
<PAGE>
- --------------------------------------------------------------------------------
Office
- --------------------------------------------------------------------------------
Howard H. Baker, Jr. Baker, Donelson, Bearman & Caldwell
801 Pennsylvania Avenue, N.W.
Suite 800
Washington, D.C. 20004
202-508-3400
202-508-3402 (Fax)
- --------------------------------------------------------------------------------
W. J. Bovaird c/o Pennzoil Company
700 Milam
P.O. Box 2967
Houston, Texas 77252
713-546-8966
713-546-6050 (Fax)
- --------------------------------------------------------------------------------
W. L. Lyons Brown, Jr. c/o Pennzoil Company
700 Milam
P.O. Box 2967
Houston, Texas 77252
713-546-8966
713-546-6050 (Fax)
- --------------------------------------------------------------------------------
Harry H. Cullen Harry H. Cullen
P.O. Box 3331
Houston, Texas 77253-3331
713-651-8844
713-651-8866 (Fax)
- --------------------------------------------------------------------------------
Ernest H. Cockrell Cockrell Oil Corporation
1600 Smith, Ste. 4600
Houston, Texas 77002-7348
713-209-7300
713-209-7450 (Fax)
- --------------------------------------------------------------------------------
Alfonso Fanjul Okeelanta Corporation
P.O. Box 1059
Palm Beach, Florida 33480
for FEDERAL EXPRESS:
316 Royal Poinclana Plaza
561-655-6303
561-659-3206 (Fax)
- --------------------------------------------------------------------------------
Berdon Lawrence Hollywood Marine Inc.
55 Waugh Dr., Ste. 1000
Houston, Texas 77007-5840
713-868-1661
713-868-6422 (Fax)
- --------------------------------------------------------------------------------
James L. Pate Pennzoil Company
700 Milam
P.O. Box 2967
Houston, Texas 77252
713-546-8966
713-546-6050 (Fax)
- --------------------------------------------------------------------------------
Gen. Brent Scowcroft 1750 K Street, N.W.
Suite 800
Washington, D.C. 20006
202-296-9365
202-296-9395 (Fax)
- --------------------------------------------------------------------------------
Gerald B. Smith Smith, Graham & Co.
Texas Commerce Tower
600 Travis, Ste. 6900
Houston, Texas 77002
713-227-1100
713-223-0844 (Fax)
- --------------------------------------------------------------------------------
Cyril Wagner, Jr. Wagner & Brown, LTD
Oil Gas Production
P.O. Box 1714
300 Marienfeld Street, Ste. 1100
Midland, Texas 79701
915-682-7936
915-686-5928 (Fax)
- --------------------------------------------------------------------------------
[UPR LOGO]
October 6, 1997
Dear UPR Shareholders and Analysts:
We have today announced a revision to our tender offer for Pennzoil. UPR is
now offering to purchase all outstanding shares of Pennzoil common stock for $84
per share in cash. The tender offer would be followed by a merger between
Pennzoil and a UPR subsidiary in which any remaining Pennzoil shareholders would
receive the same $84 per share in cash. Our offer is not subject to a financing
condition.
We have sought a combination of UPR and Pennzoil in order to create an
outstanding E&P company with significant potential to increase value for UPR
shareholders in both the near and long term. UPR brings to the combined company
a track record of applying drilling technology to boost reserves and production
quickly and efficiently. As you know, we have been the number one domestic
driller for the past five years, and our recent drilling successes, including
major new discoveries in the Gulf of Mexico, the Austin Chalk and Canada,
demonstrate the continuing strength of that record. We believe UPR's proven
drilling expertise, financial strength and world-class technical skills can
significantly enhance the value of Pennzoil's properties. UPR has strong growth
prospects on its own, and by acquiring Pennzoil we could build even greater
value for our shareholders.
We believe our $84 per share cash offer fully and fairly values all of
Pennzoil's businesses. Clearly, industry analysts and Pennzoil shareholders
agree.
Pennzoil management has claimed, as an excuse for denying Pennzoil
shareholders the opportunity to accept our offer, that UPR has underestimated
the value of Pennzoil's international (i.e., non-North American) exploration and
production assets. Based on our own assessment, we disagree. However, if
Pennzoil will begin negotiations, UPR is prepared to consider a transaction
structure which would provide Pennzoil shareholders the opportunity to benefit
directly from a future increase in value, if it occurs, of Pennzoil's
international E&P assets, above the $600 million in value that UPR has ascribed
to those assets. This international valuation assumes that the Pennzoil Karabakh
prospect in the Caspian Sea can be commercially developed. Pennzoil has
indicated that the results from the first exploratory well should be known soon.
After acquiring Pennzoil, we intend to maintain a strong investment
grade credit rating and the financial flexibility to fund our business plan. We
plan initially to finance our purchase of Pennzoil shares through a combination
of bank financing and commercial paper. Following the Pennzoil acquisition, we
plan to refinance our acquisition financing through a combination of asset sales
and the public or private sale of equity and debt securities. While no final
decisions have been made, asset sale possibilities include Pennzoil's downstream
operations, and selected producing properties and other assets of both UPR and
Pennzoil.
<PAGE>
We have approached this transaction carefully and thoughtfully. Both we
and our financial advisors are confident regarding our ability both to finance
the acquisition and implement appropriate refinancing. Although this has been a
tough battle, as we expected, rest assured that we have not - and will not - let
it distract us from our core oil and gas business or our primary goal of
increasing UPR shareholder value.
The revised offer eliminates, once and for all, the smokescreen of
Pennzoil's rhetoric, including their misleading characterizations of our
original offer and their false attacks on UPR. It is designed to focus the
Pennzoil Board's attention on the real issue: a choice for Pennzoil shareholders
between our $84 per share cash offer and the hope that, sometime in the future,
Pennzoil's undisclosed strategic plan might provide more than $84 per share in
present value.
UPR has a strong record of delivering value for our shareholders and
the ability to continue meeting our future growth objectives. By acquiring
Pennzoil, we would be able to further enhance those already strong prospects.
Sincerely,
/s/ Jack L. Messman
Jack L. Messman
