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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Ultramar Corporation
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
903912 10 3
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(CUSIP Number)
Diamond Shamrock, Inc.
9830 Colonnade Boulevard
San Antonio, TX, 78230
Dallas, Texas 75201
Attention: Timothy J. Fretthold, Esq.
(210) 641-6800
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
With a copy to:
Robert A. Profusek, Esq.
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
(212) 326-3939
September 22, 1996
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(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with this statement /X/.
(Continued on following page(s))
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SCHEDULE 13D
CUSIP No. Page 2 of Pages
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(1) Names of Reporting Person.
S.S. or I.R.S. Identification Nos. of Above Person
Diamond Shamrock, Inc.
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(2) Check the Appropriate Box if a Member of a Group* (a) / /
(b) / /
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(3) SEC Use Only
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(4) Source of Funds*
WC (See Item 3)
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
/ /
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(6) Citizenship or Place of Organization
Delaware
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Number of Shares (7) Sole Voting Power
Beneficially Owned 8,927,500
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting Power
-0-
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(9) Sole Dispositive Power
8,927,500
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(10) Shared Dispositive Power
-0-
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
8,927,500
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
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(13) Percent of Class Represented by Amount in Row (11)
19.9%
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(14) Type of Reporting Person*
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
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Item 1. SECURITY AND ISSUER.
This Statement relates to shares of the common stock, par value $.01 per
share (the "Ultramar Common Stock"), of Ultramar Corporation, a Delaware
corporation ("Ultramar"). The principal executive offices of Ultramar are
located at Two Pickwick Plaza, Greenwich, Connecticut 06830, and its telephone
number at such address is (210) 622-7000.
Item 2. IDENTITY AND BACKGROUND.
This statement is filed by Diamond Shamrock, Inc., a Delaware corporation
("Diamond Shamrock"). The principal business of Diamond Shamrock is the
refining and marketing of petroleum products. The principal executive offices
of Diamond Shamrock are located at 9830 Colonnade Blvd., San Antonio, Texas
78230. The name, address, present principal occupation or employment, and
citizenship of each director and executive officer of Diamond Shamrock are set
forth on Schedule I hereto and are incorporated herein by reference.
Neither Diamond Shamrock nor, to the knowledge of Diamond Shamrock, any of
its executive officers or directors has during the past five years (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction that resulted in a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Diamond Shamrock acquired an option to purchase 8,927,500 shares of
Ultramar Common Stock on September 22, 1996 (the "Option"). The Option was
acquired pursuant to a Stock Option Agreement, dated September 22, 1996,
between Ultramar and Diamond Shamrock (the "Ultramar Option Agreement")
pursuant to which Diamond Shamrock has the right, upon the occurrence of
certain events the result of which is that Diamond Shamrock is entitled to a
termination fee under the Merger Agreement (as defined in Item 4), to
purchase up to 8,927,500 shares of Ultramar Common Stock (or such greater
number as equals 19.9% of then-outstanding shares of Ultramar Common Stock)
for $27.20 per share, subject to customary anti-dilution adjustments. The
number of shares issuable upon exercise of the Option is subject to a cap,
the effect of which is to limit the value of the Option to no more than $60
million. If Diamond Shamrock were to exercise the Option in full, the funds
required to purchase the shares of Ultramar Common Stock issuable upon such
exercise would be $242.8 million (based on the number of
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shares currently subject to the Option). It is currently anticipated that such
funds would be provided from Diamond Shamrock's working capital and other
sources, including financings or borrowings under existing credit facilities.
The Option Agreement is incorporated herein by reference to Exhibit 10(b) to
Diamond Shamrock's Current Report on Form 8-K, dated September 27, 1996.
Item 4. PURPOSE OF TRANSACTION.
On September 22, 1996, Ultramar and Diamond Shamrock entered into an
Agreement and Plan of Merger (the "Merger Agreement"), providing for the merger
of Diamond Shamrock into Ultramar (the "Merger"). Ultramar will be the
surviving corporation in the Merger and will continue its corporate existence
under Delaware law under the name "Ultramar Diamond Shamrock Corporation." At
the effective time of the Merger, each outstanding share of the Common Stock of
Diamond Shamrock (the "Diamond Shamrock Common Stock") (other than shares of
Diamond Shamrock Common Stock owned by Diamond Shamrock or Ultramar or any of
their wholly owned subsidiaries) will be converted into the right to receive
1.02 shares of Ultramar Common Stock (except that cash will be paid in lieu of
fractional shares) and each outstanding share of Diamond Shamrock 5% Cumulative
Convertible Preferred Stock (other than shares of Diamond Shamrock 5% Cumulative
Convertible Preferred Stock owned by Diamond Shamrock or Ultramar or any of
their wholly owned subsidiaries) will be converted into the right to receive one
share of a newly established series of Ultramar 5% Cumulative Convertible
Preferred Stock having terms substantially identical to the Diamond Shamrock 5%
Cumulative Convertible Preferred Stock.
Concurrently with and as an inducement and condition to Diamond Shamrock's
entering into the Merger Agreement, Ultramar, as issuer, and Diamond Shamrock,
as grantee, entered into the Ultramar Option Agreement, pursuant to which
Ultramar granted Diamond Shamrock the Option. Concurrently with and as and
inducement and condition to Ultramar's entering into the Merger Agreement,
Diamond Shamrock, as issuer, and Ultramar, as grantee, entered into a Stock
Option Agreement, dated September 22, 1996 (the "Diamond Shamrock Option
Agreement"), pursuant to which Diamond Shamrock granted Ultramar an option, on
substantially identical terms as set forth in the Ultramar Option Agreement, to
purchase from Diamond Shamrock, upon the occurrence of certain events the result
of which is that Ultramar is entitled to a termination fee under the Merger
Agreement, up to 5,858,500 shares of Diamond Shamrock Common Stock (or such
greater number of shares as equals 19.9% of the then-outstanding shares of
Diamond Shamrock Common Stock) for $27.55 per share, subject to customary anti-
dilution adjustments and a cap the effect of which is to limit the value of such
option to no more than $60 million. In addition, in connection with the
execution and delivery of the Merger Agreement, each of Ultramar and Diamond
Shamrock amended
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their respective stockholder rights plans to provide that the other party would
not become an "Acquiring Person" or, in the case of the Diamond Shamrock
stockholder rights plan, an "Adverse Person," and accordingly the transactions
contemplated by the Merger Agreement, the Ultramar Option Agreement and the
Diamond Shamrock Option Agreement would not result in a "Distribution Date,"
"Share Acquisition Date" or "Triggering Event" under such stockholder rights
plans.
The Merger Agreement provides that the Board of Directors of the
surviving corporation in the Merger (the "Combined Company") will consist of
12 persons, six of whom will be designated by each of Ultramar and Diamond
Shamrock from their respective current Boards of Directors. The Merger
Agreement contemplates that Roger R. Hemminghaus, presently the Chairman,
Chief Executive Officer and President of Diamond Shamrock, will become the
Chairman and Chief Executive Officer of the Combined Company until December
31, 1998, after which he will resign as Chief Executive Officer and remain as
Chairman of the Board of the Combined Company until no later than December 31,
2001. The Merger Agreement also contemplates that Jean Gaulin, the Chairman
and Chief Executive Officer of Ultramar, will become the Vice Chairman,
President and Chief Operating Officer of the Combined Company until
December 31,1998, after which he will become the Vice Chairman, President and
Chief Executive Officer of the Combined Company until December 31, 2001.
In addition, it is contemplated that the remaining executive officers of both
companies will become executive officers of the Combined Company. The Merger
Agreement also provides for certain amendments to the Certificate of
Incorporation and By-laws of the Combined Company.
The preceding summary of certain provisions of the Merger Agreement, the
Ultramar Stock Option Agreement, the Diamond Shamrock Stock Option Agreement and
the amendments to the parties' stockholder rights plans is not intended to be
complete. The preceding summary of certain provisions of the Merger Agreement,
the Ultramar Stock Option Agreement and the Diamond Shamrock Stock Option
Agreement is qualified in its entirety by reference to the full text of such
documents, copies of which are filed as Exhibits 2, 10(a) and 10(b),
respectively, to Diamond Shamrock's Current Report on Form 8-K, dated September
26, 1996, as filed with the Securities and Exchange Commission (the
"Commission"), and which are incorporated herein by this reference.
Except as set forth herein, Diamond Shamrock has no plans or proposals with
respect to Ultramar that relate to or would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
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Item 5. INTEREST IN SECURITIES OF THE ISSUER.
Under the Ultramar Stock Option Agreement, Diamond Shamrock does not have
the right to acquire any shares of Ultramar Common Stock unless certain
specified events occur. If the Option were to become exercisable, Diamond
Shamrock would be entitled to purchase upon exercise of the Option 8,927,500
shares of Ultramar Common Stock (or such greater number as equals 19.9% of the
then-outstanding shares of Ultramar Common Stock), subject to customary anti-
dilution adjustments and the cap described in Item 3 above. If Diamond Shamrock
were to exercise the Option, it would have sole power to vote and, subject to
the terms of the Ultramar Stock Option Agreement, sole power to direct the
disposition of, the shares of Ultramar Common Stock covered thereby. Because
the Option will not be exercisable unless and until certain specified events
occur, Diamond Shamrock disclaims beneficial ownership of any shares of Ultramar
Common Stock subject to the Option.
Except as set forth herein, Diamond Shamrock does not beneficially own, or
have the sole or shared power to vote or to direct the vote or to dispose of or
direct the disposition of any shares of Ultramar Common Stock. To the knowledge
of Diamond Shamrock, none of its directors or executive officers beneficially
owns any shares of Ultramar Common Stock.
Neither Diamond Shamrock nor, to the knowledge of Diamond Shamrock any of
its directors or executive officers, has effected any transaction in shares of
Ultramar Common Stock for its or his own account during the past 60 days.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Except as set forth in response to Items 3, 4 and 5 hereof, neither Diamond
Shamrock nor, to the knowledge of Diamond Shamrock, any of its directors or
executive officers, has any contracts, arrangements, understandings or
relationships (legal or otherwise) with any person with respect to any
securities of Ultramar, including, but not limited to, transfer or voting of any
securities of Ultramar, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss
or the giving or withholding of proxies.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Agreement and Plan of Merger, dated as of September 22, 1996, between
Ultramar and Diamond Shamrock (filed as Exhibit 2 to Diamond
Shamrock's Current Report on Form 8-K, dated September 26, 1996, and
incorporated herein by reference).
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(b) Stock Option Agreement, dated as of September 22, 1996, between
Ultramar, as issuer, and Diamond Shamrock, as grantee (filed as
Exhibit 10(b) to Diamond Shamrock's Current Report on Form 8-K, dated
September 26, 1996, and incorporated herein by reference).
(c) Stock Option Agreement, dated as of September 22, 1996, between
Diamond Shamrock, as issuer, and Ultramar, as grantee (filed as
Exhibit 10(a) to Diamond Shamrock's Current Report on Form 8-K, dated
September 27, 1996 and incorporated herein by reference)
SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
DIAMOND SHAMROCK, INC.
By:/s/Timothy J. Fretthold
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Name: Timothy J. Fretthold
Title: Senior Vice President/
Group Executive and
General Counsel
Dated: October 1, 1996
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
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1. Agreement and Plan of Merger, dated as of September 22, 1996,
between Ultramar and Diamond Shamrock (filed as Exhibit 2 to
Diamond Shamrock's Current Report on Form 8-K, dated September
26, 1996, and incorporated herein by reference).
2. Stock Option Agreement, dated as of September 22, 1996,
between Ultramar, as issuer, and Diamond Shamrock, as grantee
(filed as Exhibit 10(b) to Diamond Shamrock's Current Report
on Form 8-K, dated September 26, 1996, and incorporated herein
by reference).
3. Stock Option Agreement, dated as of September 22, 1996,
between Diamond Shamrock, as issuer, and Ultramar, as grantee
(filed as Exhibit 10(a) to Diamond Shamrock's Current Report
on Form 8-K, dated September 27, 1996, and incorporated herein
by reference).
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SCHEDULE I
The following are the directors and executive officers
of Diamond Shamrock as of October 1, 1996 and their principal occupations or
employment. The business address of all such persons for purposes of this
Schedule 13D is 9830 Colonnade Boulevard, San Antonio, Texas 78230. Each of
such directors and executive officers is a citizen of the United States.
DIRECTORS
Name Principal Occupation
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Roger R. Hemminghaus Chairman of the Board,
Chief Executive Officer
and President of Diamond
Shamrock
B. Charles Ames Partner of Clayton &
Dublier, Inc.
E. Glenn Biggs President of Biggs & Co.
W.E. "Bill" Bradford President and Chief
Executive Officer of
Dresser Industries, Inc.
Lauro F. Cavazos, Ph.D. Adjunct Professor of Community
Health and acting Chairman,
Tufts University School of
Medicine
W.H. Clark Retired Chief Executive Officer
and Chairman of the Board
of Nalco Chemical Company
William L. Fisher Professor University of Texas
at Austin
Bob Marbut Chairman and Chief
Executive Officer of Argyle
Television, Inc.
Katherine D. Ortega Member of board of directors of
various companies and
United States Comptroller
General's Consultant Panel
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EXECUTIVE OFFICERS
Roger R. Hemminghaus Chairman of the Board,
Chief Executive Officer
and President of Diamond
Shamrock
Robert C. Becker Vice President and Treasurer
of Diamond Shamrock
W. Paul Eisman Vice President and Group
Executive-Manufacturing of
Diamond Shamrock
Timothy J. Fretthold Senior Vice President/
Group Executive and
General Counsel of Diamond
Shamrock
Gary E. Johnson Vice President and
Controller of Diamond
Shamrock
William P. Klesse Executive Vice President
of Diamond Shamrock
J. Robert Mehall Executive Vice President
of Diamond Shamrock
A.W. O'Donnell President, Marketing
and Senior Vice President/
Group Executive of Diamond
Shamrock
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