<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
(AMENDMENT NO. 38)
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
PENNZOIL COMPANY
(Name of Subject Company)
PENNZOIL COMPANY
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.83 1/3 PER SHARE
(including the associated Preferred Stock Purchase Rights)
(Title of Class of Securities)
709903 10 8
(CUSIP Number of Class of Securities)
LINDA F. CONDIT
CORPORATE SECRETARY
PENNZOIL COMPANY
PENNZOIL PLACE, P.O. BOX 2967
HOUSTON, TEXAS 77252-2967
(713) 546-8910
(Name, address and telephone number of person authorized
to receive notice and communications on behalf of the person(s) filing
statement)
Copies to:
<TABLE>
<S> <C>
MOULTON GOODRUM, JR. CHARLES F. RICHARDS, JR.
BAKER & BOTTS, L.L.P. RICHARDS, LAYTON & FINGER
ONE SHELL PLAZA ONE RODNEY SQUARE
HOUSTON, TEXAS 77002-4995 P.O. BOX 551
(713) 229-1234 WILMINGTON, DELAWARE 19899-0551
(302) 658-6541
</TABLE>
================================================================================
<PAGE> 2
This Amendment No. 38 (this "Amendment") amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9, as amended, originally
filed on July 1, 1997 by Pennzoil Company, a Delaware corporation ("Pennzoil"
or the "Company"), relating to a tender offer commenced by Resources Newco,
Inc., a wholly owned subsidiary of Union Pacific Resources Group Inc. ("UPR"),
on June 23, 1997.
All capitalized terms used in this Amendment without definition have the
meanings attributed to them in the Schedule 14D-9.
The items of the Schedule 14D-9 set forth below are hereby amended by
adding the following:
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT
NO. DESCRIPTION
------- -----------
105 Letter to stockholders of the Company dated October 28,
1997.
106 Published advertisement of the Company dated October 28,
1997.
107 Text of press release of the Company dated October 28,
1997.
<PAGE> 3
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
PENNZOIL COMPANY
Dated: October 28, 1997 By: /s/ James L. Pate
James L. Pate
Chairman of the Board, President
and Chief Executive Officer
3
<PAGE> 4
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
------- -----------
105 Letter to stockholders of the Company dated October 28,
1997.
106 Published advertisement of the Company dated October 28,
1997.
107 Text of press release of the Company dated October 28,
1997.
<PAGE> 1
EXHIBIT 105
Pennzoil Company
[PENNZOIL LOGO] P. O. Box 2967 - Houston, Texas 77252-2967 - 713/546-4000
---------------------------------------------------------
JAMES L. PATE
Chairman of the Board
Chief Executive Officer
October 28, 1997
Dear Pennzoil Shareholder:
On October 27, 1997, Pennzoil Company announced its third quarter
results. The third quarter was, again, very strong, with improvement in
virtually every aspect of our business. Recurring earnings reached $38.2
million, or 81 cents per share, a 56 percent increase over last year. This
result exceeded the Wall Street consensus estimate by 25 percent and was the
eighth consecutive quarter of year-over-year improvement in recurring income.
For your review, I have enclosed a copy of Pennzoil's third quarter
earnings press release. Also enclosed is an October 28, 1997, newspaper
advertisement emphasizing the positive trend in Pennzoil's financial and
operating performance.
Your Board of Directors believes Pennzoil's consistent improvement over
the past eight quarters reflects that Pennzoil's turnaround is well underway.
While I am personally very pleased with our third quarter performance, I
believe there is still much improvement to come as a result of our pending
initiatives, which include oil and gas projects in the Caspian Sea, Egypt,
Venezuela, Qatar, Australia and the Gulf of Mexico and our recently completed
base oil and refining projects.
As you know, on October 6, 1997, Union Pacific Resources Group Inc.
(UPR) revised its unsolicited tender offer to $84 per share in cash for all
Pennzoil shares. Your Board of Directors has determined that the UPR offer is
inadequate and not in the best interest of Pennzoil's shareholders and
believes that pursuit of Pennzoil's own strategic direction, initiatives and
projects will produce greater long-term value than the UPR proposal.
So far, 1997 has been a successful year. With your continued support,
the rest of the year and beyond will be even more successful.
Sincerely,
/s/ James L. Pate
Enclosures
<PAGE> 1
EXHIBIT 106
TO ALL PENNZOIL SHAREHOLDERS:
THE PENNZOIL TURNAROUND CONTINUES....
Yesterday We Announced Our 8th Consecutive Quarter Of
Year-On-Year Recurring Earnings Improvement
[Graph: Pennzoil Company recurring earnings per share - trailing four quarters;
4th quarter 1994: $0.61; 1st quarter 1995: $0.12; 2nd quarter 1995: ($0.38);
3rd quarter 1995: ($0.56); 4th quarter 1995: ($0.23); 1st quarter 1996: $0.37;
2nd quarter 1996: $1.04; 3rd quarter 1996: $1.65; 4th quarter 1996: $2.17;
1st quarter 1997: $3.05; 2nd quarter 1997: $3.27; 3rd quarter 1997: $3,56.]
That's not all....Compared to last year:
o Pennzoil's Third Quarter Recurring Earnings UP 56%
o Pennzoil's Third Quarter Operating Cash Flow(1) UP 29%
o Pennzoil's Year-To-Date Recurring Earnings UP 94%
o Pennzoil's Year-To-date Operating Cash Flow(2) UP 26%
Pennzoil's turnaround is well underway, which is one reason why UPR's offer of
$84 is inadequate. Indeed, UPR's own confidential internal studies arrived at
valuations for Pennzoil above $84 per share(2).
DON'T LET UPR TRY TO SOLVE ITS PROBLEMS
AT THE EXPENSE OF PENNZOIL SHAREHOLDERS.
[PENNZOIL LOGO]
(1) Net cash provided by operating activities before changes in operating
assets and liabilities.
(2) Smith Barney Project Mercury Reports dated January, March and June, 1997.
<PAGE> 1
EXHIBIT 107
FOR IMMEDIATE RELEASE
Contacts:
Robert Harper Joele Frank/Brian Faw
Corporate Communications Abernathy MacGregor Group
713/546-8536 212/371-5999
DELAWARE COURT REJECTS DUAL ROLE OF SMITH BARNEY
IN UPR'S HOSTILE TENDER OFFER FOR PENNZOIL
HOUSTON (October 28, 1997) -- Pennzoil Company (NYSE: PZL) today announced that
the Delaware Court of Chancery ruled that the confidentiality agreement and
order governing discovery between Union Pacific Resources Group (NYSE: UPR) and
Pennzoil unmistakably provides that Smith Barney cannot continue to act as both
a financial advisor and a litigation consultant to UPR.
The Court concluded that it is improper for Smith Barney to continue providing
financial advice while in possession of Pennzoil's confidential information. The
Court stated that "UPR's assertion that 'litigation consultants' would be able
to 'segregate mentally' confidential financial information when they switch into
their role as 'financial consultants' is...an epistemological leap of heroic
proportions." The Court further stated that UPR's interpretation of the
confidentiality order "is not a tenable or realistic one." The Court added that
Pennzoil's position "makes sense from the standpoint of practice, theory and
public policy."
Pennzoil stated that "The Delaware Court's order precludes Smith Barney from
continuing to serve as UPR's financial advisor in connection with UPR's hostile
acquisition offer for Pennzoil. The Court's ruling is significant and has
substantial implications for the Delaware Chancery action as well as the
Federal securities litigation between Pennzoil and UPR pending in the U.S.
District Court in Fort Worth."
-more-
<PAGE> 2
-2-
The Delaware Court also noted that "UPR does not dispute that Smith Barney has
been shown confidential and highly confidential information or that Smith Barney
has provided UPR with financial advice in connection with UPR's attempt to
acquire Pennzoil." These facts form the basis of Pennzoil's action for misuse of
"inside" information and breach of the confidentiality order against UPR and
Smith Barney in the U.S. District Court in Texas where Pennzoil is seeking a
permanent injunction against UPR proceeding with its hostile tender offer.
Pennzoil Company explores for and produces crude oil and natural gas,
manufactures and markets premium quality lubricants, including America's top
selling motor oil, and is the parent company of Jiffy Lube International, the
world's largest franchiser of fast oil change centers.
# # #
