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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
(AMENDMENT NO. 35)
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:
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<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
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This Amendment No. 35 (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 8. ADDITIONAL INFORMATION TO BE FURNISHED
Item 8 of Schedule 14D-9 is hereby amended and supplemented by adding
the following:
On October 21, 1997, the United States District Court for the Northern
District of Texas, Fort Worth Division, issued an Initial Scheduling Order in
the litigation between Pennzoil and UPR in response to a request by Pennzoil.
The order is filed as Exhibit 100 hereto.
On October 21, 1997, two stockholders of Pennzoil commenced litigation
against the Company in the United States District Court for the Northern
District of Texas, Fort Worth Division. The suit alleges, among other things,
that the Schedule 14D-9 filed by Pennzoil in response to the Revised UPR Offer
violates Section 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), Rule 14d-9 promulgated thereunder and Section 14(e) of the
Exchange Act. Plaintiffs seek a judgment from the Court which, among other
things, (i) compels and enjoins Pennzoil to comply with the requirements of the
Exchange Act and (ii) compels and enjoins Pennzoil to file immediately an
amended Schedule 14D-9 which is complete and accurate.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
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<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
100 Initial Scheduling Order dated October 21, 1997 with
respect to the litigation styled Union Pacific Resources
Group, Inc. vs. Pennzoil Company (C.A. No.
4:97-CV-509-Y), pending in the United States District
Court for the Northern District of Texas, Fort Worth
Division.
101 Text of press release of the Company dated October 22,
1997.
102 Complaint filed in Garfinkle and Haberman v. Pennzoil
Company (dated October 21, 1997, United States District
Court for the Northern District of Texas, Fort Worth
Division).
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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 23, 1997 By: /s/ James L. Pate
James L. Pate
Chairman of the Board, President
and Chief Executive Officer
3
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INDEX TO EXHIBITS
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<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
100 Initial Scheduling Order dated October 21, 1997 with
respect to the litigation styled Union Pacific Resources
Group, Inc. vs. Pennzoil Company (C.A. No.
4:97-CV-509-Y), pending in the United States District
Court for the Northern District of Texas, Fort Worth
Division.
101 Text of press release of the Company dated October 22,
1997.
102 Complaint filed in Garfinkle and Haberman v. Pennzoil
Company (dated October 21, 1997, United States District
Court for the Northern District of Texas, Fort Worth
Division).
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
UNION PACIFIC RESOURCES GROUP, )
INC. )
)
VS. ) CIVIL ACTION NO. 4:97-CV-509-Y
)
PENNZOIL COMPANY )
INITIAL SCHEDULING ORDER
------------------------
Pursuant to FED. R. CIV.P. 16(b), this Initial Scheduling Order will
govern the preparation of this case for trial. The Court, having reviewed the
joint status report and proposed discovery plan recently submitted by the
parties,establishes the deadlines set out below to ensure that the case is
expeditiously prepared for trial.
Accordingly, it is ORDERED that:
(1) The parties file any motions to implead third parties or to join
additional parties pursuant to FED. R. CIV.P. 14 or 19, respectively, by 4:30
p.m. on November 17, 1997:
(2) All disclosures relating to expert witnesses required by FED. R.
CIV. P. 26(a)(2) be made and supplemented in the manner set out in that rule
except that the disclosures required by subparagraphs (A) and (B) of Rule 26
(a)(2) be made by each party plaintiff no later than 4:30 p.m. on December 1,
1997, and by each party defendant no later than 4:30 p.m. on, December 18,
1997;(1)
(3) Each party plaintiff file any motions for leave to amend his
pleadings no later than 4:30 p.m. on December 18, 1997;
(4) Each party defendant file any motions for leave to amend his
pleadings no later than 4:30 p.m. on January 6, 1998;
(5) The parties cease all discovery activity under the Federal Rules
of Civil Procedure by
- ----------------------------
(1) In accordance with the language of rule 26(a)(2), these disclosures shall be
served on all parties but shall not be filed with the clerk of the Court.
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4:30 p.m. on February 5, 1998;(2)
(6) The parties file all pretrial and dispositive motions except
motions in limine no later than 4:30 p.m. on March 9, 1998;
Further, it is ORDERED that the parties and their counsel strictly
comply with the terms of this initial scheduling order and be on notice that
failure to timely comply with this order may result in the imposition of
sanctions against the non-complying party or counsel or both
Near the close of discovery in this case, the Court will issue an order
requiring the attendance of lead counsel at a trial-settling conference, at
which time a trial date will be chosen.
SIGNED October 21, 1997.
/s/ TERRY R. MEANS
--------------------------------
TERRY R. MEANS
UNITED STATES DISTRICT JUDGE
- ----------------
(2) All discovery must be completed by the ordered date. Parties must serve
discovery request with sufficient lead time to permit opponents to serve timely
responses prior to the discovery deadline.
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[PENNZOIL LOGO]
[PENNZOIL LETTERHEAD]
[PENNZOIL COMPANY NEWS LOGO]
FOR IMMEDIATE RELEASE
Contacts:
Robert Harper Joele Frank/Brian Faw
Corporate Communications Abernathy MacGregor Group
713/546-8536 212/371-5999
COURT ORDERS EXPEDITED DISCOVERY IN CASE AGAINST UPR AND
SMITH BARNEY ALLEGING MISUSE OF "INSIDE" INFORMATION
HOUSTON (Oct. 22, 1997) -- Pennzoil Company (NYSE:PZL) announced today that in
response to a request by Pennzoil, the United States District Court for the
Northern District of Texas, Ft. Worth Division, entered a scheduling order "to
ensure that the case is expeditiously prepared for trial." The case involves
claims by Pennzoil that Union Pacific Resources Group Inc. (NYSE:UPR) and Smith
Barney, Inc., have violated federal securities laws and breached contractual
obligations by misusing "inside" information obtained from Pennzoil in
connection with the tender offer begun by UPR in June. The Court has ordered
that discovery be completed in the case by February 5, in just over 90 days,
and that the lead lawyers attend a trial setting conference near the February 5
discovery cut-off date, at which time the Court will fix the trial date. The
Court also set a number of intermediate dates to advance the case for trial
expeditiously.
A Pennzoil spokesman said, "Pennzoil is extremely pleased to have an early
opportunity to try these critical claims against UPR and Smith Barney regarding
the tender offer. This case is not -- as UPR has sought to downplay it in the
media -- a 'sideshow'. It obviously involves very serious claims which the
Court has now ordered be quickly prepared for trial."
Pennzoil seeks to have the tender offer permanently enjoined as a consequence of
the claimed violations.
Pennzoil Company explores for and produces crude oil and natural gas,
manufactures and markets premium quality lubricants, including America's top
selling motor oil for the past 11 years, and is the parent company of Jiffy
Lube International, the world's largest franchiser of fast oil change centers.
###
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT TEXAS
FORT WORTH DIVISION
HARVEY GARFINKLE and )
JACOB HABERMAN, )
)
Plaintiffs, )
) C.A. No. 4-97CV-882-A
)
v. )
)
PENNZOIL COMPANY, )
)
Defendant. )
COMPLAINT
Plaintiffs filed this action seeking injunctive relief and challenging
the sufficiency of disclosures by Defendant in connection with the revised
offer by Resources Newco, Inc. ("Newco"), a wholly-owned subsidiary of Union
Pacific Resources Group ("Union Pacific"), to purchase all shares of Pennzoil
Company's stock.
1. Plaintiffs are and have been at all relevant times the owners
of common stock of Pennzoil.
2. Defendant Pennzoil Company ("Pennzoil") is a corporation
organized and existing under the laws of the State of Delaware with its
principal place of business in Houston, Texas. It may be served with summons
COMPLAINT-Page 1
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by serving its registered agent, CT Corporation Systems, 811 Dallas Avenue,
Houston, Texas 77002. Pennzoil is an energy company engaged primarily in oil
and gas exploration and production, in processing, refining, and marketing of
oil and motor oil and refined products, and in fast automotive oil change
operations. Pennzoil's common stock is registered pursuant to Section 12(b) of
the Exchange Act, 15 U.S.C. Section 781(b), and is listed and traded on the New
York Stock Exchange. As of January 31, 1997, there were over 46 million shares
of Pennzoil common stock outstanding.
Jurisdiction and Venue
3. This action arises under Sections 14(d) and 14(e) of the
Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. Sections 78n(d)
and 78n(e), and the rules and regulations promulgated thereunder by the
Securities and Exchange Commission ("SEC"), 17 C.F.R. Sections 240.14d-1 et seq.
4. This Court has subject matter jurisdiction pursuant to:
(a) Section 27 of the Exchange Act, 15 U.S.C. Section 78aa,
because this action is brought to enforce rights and duties
created by the Exchange Act and regulations thereunder;
COMPLAINT-Page 2
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(b) 28 U.S.C. Section 1331, because the matter in
controversy arises under the Constitution and the laws
of the United States; and
(c) 28 U.S.C. Section 1337(a), because the action arises
under the Exchange Act, an Act of Congress regulating
commerce.
5. Venue is proper in the Northern District of Texas pursuant to
15 U.S.C. Section 78aa because on information and belief, Pennzoil is and can
be found in the district, Pennzoil is an inhabitant of and/or transacts business
in this district, and some or all of the acts or transactions which are, or
could be alleged to constitute, a violation of the Exchange Act occurred in
this district.
The Union Pacific Offers
6. On June 23, 1997, Newco announced a tender offer (the "Initial
Tender Offer") for 50.1% of the issued and outstanding shares of Pennzoil common
stock that it and Union Pacific did not already own for $84 per share, a
substantial premium to the then market price of Pennzoil common stock. The
Initial Tender Offer was made to all Pennzoil stockholders throughout the United
States and elsewhere. The Initial Tender Offer was to be followed by a
COMPLAINT - Page 3
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second-step merger pursuant to which each remaining share of Pennzoil stock
would be converted into shares of Union Pacific stock, designed to have a value
of $84 per share (the "Merger") in connection with the Initial Tender Offer, a
Schedule 14D-1 was filed with the SEC pursuant to Section 14(d)(1) of the
Exchange Act. On July 1, 1997, Pennzoil filed a Schedule 14D-9 with the SEC
pursuant to 14(d)(9) of the Exchange Act setting forth Pennzoil's position with
respect to the Initial Tender Offer that shareholders reject the Initial
Tender Officer. ("Initial Schedule 14D-9").
7. On October 6, 1997, Union Pacific announced that it was amending the
Initial Tender Offer by changing the terms to an $84 all-cash tender offer for
all of Pennzoil's shares (the "Revised Tender Offer").
8. On October 14, 1997, Pennzoil announced that its Board had determined
to reject the Revised Tender Offer and recommend that shareholders reject the
all-cash, all-shares $84 per share offer. The Pennzoil Board characterized the
Revised Tender Offer as inadequate and continued to adhere to its purported
long-term strategic plan as justification for rejecting the Revised Tender
Offer.
COMPLAINT - Page 4
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9. On October 15, 1997, Pennzoil filed its Schedule 14D-9 responding to
the Revised Tender Offer (the "Revised Schedule 14D-9") in which the Pennzoil
Board sets forth its reasons for rejecting the Revised Tender Offer.
MATERIALLY MISLEADING 14D-9
10. Section 14(d) and Rule 14d-9 promulgated thereunder, 17 C.F.R.
Section 240.14d-9, regulate solicitations or recommendations made by "subject"
or "target" companies in response to a tender offer. Under Rule 14d-9, no such
solicitation or recommendation is permitted unless prior thereto, the target
company has filed with the SEC and delivered to the offeror a Schedule 14D-9
containing certain specified information, including, among other things, the
nature of the solicitation or recommendation and particularized reasons for the
solicitation or recommendation.
11. In addition, Section 14(e) of the Exchange Act, 15 U.S.C. Section
78n(e), makes it "unlawful for any person to make any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statement made, in light of the circumstances under which they are made, not
misleading, or to engage in any fraudulent, deceptive, or manipulative acts or
practice in connection with any tender offer..."
COMPLAINT - Page 5
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12. On October 15, 1997, Pennzoil filed its Revised Schedule 14D-9
and issued a press release announcing that its Board of Directors had decided to
recommend that Pennzoil stockholders reject the Revised Tender Offer. The
Revised Schedule 14D-9 is materially misleading as is more fully described
below.
13. The Revised Schedule 14D-9 states that the Pennzoil directors
have concluded that the Revised Tender Offer "does not reflect the long-term
values inherent" in Pennzoil. However, the Revised Schedule 14D-9 fails to
disclose the amount or range or such long-term values or when such values can
be expected to be realized by Pennzoil stockholders, or if no quantification
was made, the reasons why.
14. The Revised Schedule 14D-9 refers to the Pennzoil Board's
consideration of presentations by Pennzoil management as to Pennzoil's
"prospects for future growth, profitability and share price appreciation, as
reflected in Pennzoil's strategic plan." However, the Revised Schedule 14D-9
fails to disclose meaningful detail regarding the supposed prospects for future
growth, profitability, and share price appreciation, including the amount or
COMPLAINT - Page 6
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range thereof and when such profitability and share price appreciation can be
expected to be realized by Pennzoil stockholders.
15. The Revised Schedule 14D-9 states that the Pennzoil board
believes that "pursuit of the Company's strategic plan...will produce greater
long-term value for stockholders" than the $84 per share Revised Tender Offer.
However, the Revised Schedule 14D-9 fails to disclose the expected amount of
such value and when any such value can be expected to be realized by Pennzoil
stockholders, or if no quantification was made, the reasons why.
16. The Revised Schedule 14D-9 states that one of the factors
considered by the Pennzoil Board in recommending rejection of the Revised
Tender Offer is the "Board's and management's commitment to protecting the best
interests of the stockholders of the Company and enhancing the value of the
Company." However, the true purpose and effect of recommending rejection of the
Revised Tender Offer and utilizing, inter alia, the Pennzoil poison pill to
block the Revised Tender Offer is to entrench management and the Pennzoil Board
and protect the receipt of the perquisites of such positions, which precludes
shareholders from obtaining maximum value for their shares.
COMPLAINT-Page 7
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COUNT ONE
(For violation of Section 14(d) of the Exchange Act
and Rule 14d-9 Promulgated Thereunder)
17. Plaintiffs repeat and reallege the above paragraphs as if set
forth herein.
18. Rule 14d-9, 17 C.F.R. Section 240.14d-9, promulgated by the SEC
pursuant to Section 14(d) of the Exchange Act, prohibits the target company and
its employees from making any solicitation or recommendation concerning a
tender offer to the target company stockholders unless, as soon as practicable
on the date any such solicitation or recommendation is made, a Schedule 14D-9
is filed with the SEC and a copy is delivered to the offeror. The Schedule
14D-9 must contain the information set forth in Rule 14d-9, including, among
other things, the nature of the solicitation or recommendation and
particularized reasons for the solicitation or recommendation.
19. In violation of Section 14(d) and Rule 14d-9, the Revised
Schedule 14D-9 filed by Pennzoil with the SEC on October 15, 1997, omits
material information and is materially misleading as set forth herein.
20. By reason of the foregoing, Plaintiffs have been and are being
irreparably harmed in that they are being deprived of material information
COMPLAINT - Page 8
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required to be publicly, accurately, and fully disclosed by Defendant under
applicable law.
21. Plaintiffs have no adequate remedy at law.
COUNT TWO
(For Violation of Section 14(e) of the Exchange Act)
22. Plaintiffs repeat and reallege the paragraphs as if fully set
forth herein.
23. In violation of Section 14(e) of the Exchange Act, the Revised
Schedule 14D-9 omits material information and is materially misleading as set
forth herein.
24. By reason of the foregoing, Plaintiffs have been and are being
irreparably harmed in that they are being deprived of material information
required to be publicly, accurately, and fully disclosed by Defendant under
applicable law.
25. Plaintiffs have no adequate remedy of law.
WHEREFORE, PREMISES CONSIDERED, Plaintiffs respectfully request that
this Court enter a judgment:
COMPLAINT - Page 9
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(i) Compelling and enjoining Pennzoil to comply with the
requirements of the Exchange Act, and compelling and enjoining
Pennzoil to file immediately an amended Schedule 14D-9 which is
complete and accurate:
(ii) Awarding the Plaintiffs their reasonable and necessary
attorneys' fees, together with all costs of court; and
(iii) Granting such other relief as the Court deems just and proper.
COMPLAINT - Page 10
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Respectfully submitted,
By: [ILLEGIBLE]
--------------------------
W.D. Masterson
State Bar No. 13184000
Theodore C. Anderson
State Bar No. 01215700
KILGORE & KILGORE
3131 McKinney Avenue
Suite 700 LB 103
Dallas, Texas 75204-2471
Telephone: (214) 969-9099
Telecopy: (214) 953-0677
WILLIAM L. KIRKMAN
State Bar No. 11518700
BOURLAND, KIRKMAN, SEIDLER
& EVANS, L.L.P.
201 Main Street
Suite 1400
Fort Worth, Texas 76102
Telephone: (817) 336-2800
Telecopier: (817) 877-1863
ATTORNEYS FOR PLAINTIFFS
JACOB HABERMAN & HARVEY GARFINKLE
OF COUNSEL:
MILBERG WEISS BERSHAD HYNES
& LERACH
One Pennsylvania Plaza
New York, NY 10119
(212) 594-5300
COMPLAINT - Page 11
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WOLF, HALDENSTEIN, ADLER
FREEMAN & HERZ, LLP
270 Madison Avenue
New York, New York 10016
(212) 545-4600
CHIMICLES, JACOBSEN & TIKELLIS
One Rodney Square
P.O. Box 1035
Wilmington, DE 19899
(302) 656-2500
BERNSTEIN, LEIBHARD & LIFSHITZ
274 Madison Avenue
New York, NY 10016
(212) 779-1414
LAW OFFICES OF LAWRENCE SOICHER
300 Park Avenue
New York, New York 10022
(212) 980-7000
COMPALINT - Page 12
