Filed under Rule 424(b)(3)
Prospectus relates to registration Statement No. 33-74162
ULTRAMAR DIAMOND SHAMROCK CORPORATION
STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
COMMON STOCK ($.01 PAR VALUE)
This Prospectus relates to shares of Common Stock, $. 01 par value
("Common Stock") of Ultramar Diamond Shamrock Corporation, a Delaware
corporation (the "Company"), offered pursuant to the Stock Purchase and
Dividend Reinvestment Plan (the "Plan") of the Company. The Plan provides
eligible holders of the Company's Common Stock (the "Common Stock") with
a simple and convenient method of purchasing additional shares of Common
Stock without service charges or brokerage fees.
A participant in the Plan obtains additional shares of Common Stock
by:
- reinvesting cash dividends on all or a portion of shares
registered in the name of the participant as well as on those
shares held in the Plan; and
- making optional cash payments of up to a maximum of
$10,000 in any calendar quarter (but in no event more than an
aggregate of $25,000 per calendar year).
Reinvested cash dividends and optional cash payments will be used to
purchase authorized but unissued shares of the Company or shares held by
the Company as treasury stock, shares purchased in the open market by an
agent independent of the Company, or a combination of the foregoing. The
price of Common Stock purchased under the Plan will be the average of the
high and low sales prices of the Company's Common Stock on the New York
Stock Exchange on the date of purchase (the "Market Price Average") or, in
the case of open market purchase, the weighted average purchase price
excluding transaction costs (the "Market Purchase Price"). Those holders
of Common Stock who do not participate in the Plan will receive cash
dividends, as declared, in the usual manner.
This Prospectus relates to 2,000,000 shares of Common Stock of the
Company registered for sale under the Plan. Common Stock is listed and
traded on the New York Stock Exchange and a foreign exchange. Common Stock
is traded under the symbol "UDS." The reported closing price of UDS Common
Stock on the New York Stock Exchange on October 31, 1997 was $30.875 per
share.
PARTICIPANTS SHOULD RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is November 3, 1997.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements, and other information filed with the Commission
can be inspected and copied at the public reference facilities maintained
by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and the following Regional offices of the
Commission: Chicago Regional Office, Suite 1400, Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661-2511; and New York Regional Office,
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material may be obtained at prescribed rates from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a web site that contains reports, proxy and
information statements and other information regarding registrants that
file electronically with the Commission. Such reports, proxy and
information statements and other information may be found on the
Commission's web site address, http://www.sec.gov.
In addition, certain securities of the Company are listed on the New
York Stock Exchange (the "NYSE") and the Montreal Exchange (the "ME").
Material filed by the Company may be inspected at the offices of the NYSE
at 20 Broad Street, New York, New York 10005 and the ME at 800 Victoria
Square, Montreal, Quebec, Canada H4Z 1A9. The Company has filed with the
Commission a Registration Statement on Form S-3 (together with all
amendments and exhibits, the "Registration Statement") under the Securities
Act of 1933, as amended (the "Securities Act"). This Prospectus does not
contain all information set forth in the Registration Statement, certain
parts of which have been omitted in accordance with the rules and
regulations of the Commission. For further information, reference is
hereby made to said Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the commission are
incorporated herein by reference:
(a) Annual Report of the Company on Form 10-K for the year ended
December 31, 1996.
(b) Quarterly Reports of the Company on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997.
(c) Current Report on Form 8-K dated March 4, 1997, and Amendment to
Current Report on Form 8-K/A dated March 4, 1997.
(d) Current Report on Form 8-K dated June 20, 1997.
(e) Current Report on Form 8-K dated September 25, 1997.
(f) Proxy Statement of the Company dated May 6, 1997.
(g) Description of the capital stock of the Company contained in the
Company's Registration Statement on Form S-3 (File No.
333-28737).
All documents filed by the Company pursuant to Section 13(a), 13(c),
14, or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of this offering shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person
(including any beneficial owner) to whom a copy of this Prospectus has been
delivered, upon written or oral request of any such person, a copy of any
or all of the documents incorporated by reference herein (other than
exhibits to such documents, unless such exhibits are specifically
incorporated by reference herein). Requests for such copies should be
directed to Ultramar Diamond Shamrock Corporation, P.O. Box 696000, San
Antonio, Texas 78269-6000, Attention: Director, Investor Relations
(telephone number: 1-800-333-3377 ext. 2020).
THE COMPANY
Ultramar Diamond Shamrock Corporation was the surviving corporation
in the merger (the "UDS Merger") of two leading North American independent
refining and marketing companies, Ultramar Corporation and Diamond
Shamrock, Inc., which was completed in December 1996. The Company is a
leading independent refiner and marketer of high-quality petroleum products
in the Southwest United States, the Northeast United States and Eastern
Canada. In 1996, the Company sold over 400,000 barrels per day ("BPD") of
petroleum products and had total revenues of $10.2 billion. In the
Southwest United States, the Company owns and operates a 150,000 BPD
refinery near Amarillo, Texas, a 100,000 BPD refinery near Long Beach
California and a 90,000 BPD refinery near San Antonio, Texas. The Company
markets petroleum products and a broad range of convenience store items and
other merchandise in the Southwest United States under the Diamond
Shamrock, Beacon, and Ultramar brand names through a network of
approximately 3,000 outlets located across ten states in the United States.
The Company is also one of the largest independent petroleum refining and
marketing companies in the Northeast United States and Eastern Canada,
owning and operating a 160,000 BPD refinery in St. Romuald, Quebec and
marketing petroleum products through approximately 1,320 retail outlets and
84 unattended facilities in Eastern Canada. The Company is also one of the
largest retail home heating oil companies in the Northeast United States
and Eastern Canada, selling heating oil to approximately 210,000
households.
The Company's principal executive offices are located at 6000 N. Loop
1604 W., San Antonio, Texas 78249-1112, telephone (210) 592-2000.
USE OF PROCEEDS
The Company intends to use the proceeds of the sale of any shares of
Common Stock purchased from the Company under the Plan for general
corporate purposes. Since the Company does not know how many shares of
Common Stock will be sold under the Plan, or the number of such shares that
will be acquired from it, rather than in open market purchases, the Company
is unable to predict the amount of proceeds that will be generated by this
offering.
DESCRIPTION OF THE PLAN
The Plan was approved by the Board of Directors of the Company
("Board" or "Board of Directors") on October 19, 1993. The Plan consists
of the following questions and answers.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to offer a simple and convenient way for
holders of Common Stock to increase their ownership of shares of Common
Stock, without payment of any brokerage commissions or service charges.
Participants will have cash dividends on some or all shares registered in
the name of such participant (each, a "Participating Share") as well as on
those shares held in the Plan (each, a "Plan Share") automatically
reinvested in additional shares of Common Stock. Participants may make
optional cash payments that will be invested in Common Stock whether or not
they elect to have dividends reinvested on other Common Stock they own.
ADVANTAGES
2. What are the advantages of the Plan?
Automatic Reinvestment of Cash Dividends: Cash dividends on all or any
portion of the Common Stock registered in a participant's name are
automatically reinvested in additional Common Stock.
Optional Cash Payments: Participants may make optional cash payments,
subject to minimum and maximum amounts, for the purchase of additional
Common Stock at 100% of the Market Price Average or the Market
Purchase Price, as applicable (as defined in Question 11) , whether
or not they elect to reinvest dividends.
No Brokerage Commission to Participants: No brokerage commission
or service charge is paid by participants in connection with purchases
under the Plan, except as provided in Question 9.
Fractional Share Accounting: Full investment of funds is possible
because the Plan permits fractional shares, as well as whole shares,
to be credited to participants' accounts. In addition, dividends on
all whole and fractional shares held in the Plan will be reinvested
in additional shares of Common Stock, which will also be credited to
participants' accounts.
Simplified Recordkeeping: Participants will receive periodic
statements of account that reflect all current activity, including
purchases of shares of Common Stock and latest Plan account balance.
Certificate Safekeeping: since certificates will not be issued to
participants until requested, participants avoid the necessity for
safekeeping of certificates for shares of Common Stock credited to
their accounts under the Plan.
ADMINISTRATION
3. Who administers the Plan?
Registrar and Transfer Company (the "Administrator") administers the
Plan, maintains records, sends statements of accounts to participants, and
performs other duties relating to the Plan. In addition, the Administrator
will purchase shares of Common Stock (other than those shares purchased
directly from the Company) for participants and will hold and act as
custodian for shares purchased under the Plan.
The Company reserves the right to make such other arrangements for the
administration of the Plan as it deems appropriate.
PARTICIPATION
023.
4. Who is eligible to participate in the Plan?
All shareholders of record are eligible to participate in the Plan.
Shareholders of record who participate in the Plan are sometimes
hereinafter referred to as "participants."
Beneficial owners whose shares of Common Stock are registered in names
other than their own (e.g., in the name of a broker or other nominee) must
either make appropriate arrangements with their broker or other nominee to
participate in the Plan on their behalf or must have their shares
transferred into their names in order to be eligible to participate
directly in the Plan. Indirect participation in the Plan by beneficial
owners through brokers or other nominees may be on terms and conditions
which differ from those set forth in this Prospectus, in which case the
terms and conditions established by each broker or other nominee will
govern. Such terms and conditions may include limitations on participation
in the Plan and the requirement that the beneficial owner pay a commission
or service charge to the broker or other nominee. Certain features of the
Plan, including investment of optional cash payments, may not be available
to beneficial owners participating indirectly in the Plan through brokers
or other nominees. The Company may from time to time enter into
arrangements with brokers or other nominees in order to facilitate indirect
participation in the Plan by beneficial owners. Such arrangements may
require payment of service charges by the Company to the broker or other
nominee and indemnification of the broker or other nominee against
securities law claims in connection with its participation in the Plan.
The Company has not entered into any such arrangements as of the date of
this Prospectus.
The right to participate in the Plan is not transferable apart from
a transfer of a participant's underlying shares of Common Stock.
Shareholders who reside in jurisdictions in which it is unlawful for
the Company to permit their participation are not eligible to participate
in the Plan.
5. How does an eligible shareholder become a participant?
A shareholder of record of Common Stock may enroll in the Plan by
completing an Authorization Form and returning it to the Administrator.
A postage paid return envelope is provided for this purpose. Authorization
Forms may be obtained at any time by shareholders by written request to
Registrar and Transfer Company, 10 Commerce Drive, Cranford, New Jersey
07016 or by calling the Company's Investor Relations Department at
1-800-333-3377 ext. 2020.
If a shareholder returns a properly executed Authorization Form to the
Administrator without electing an investment option, such Authorization
Form will be deemed to indicate the intention of such shareholder to apply
all cash dividends and optional cash payments toward the purchase of
additional shares of Common Stock.
6. When may an eligible shareholder become a participant?
An eligible shareholder of Common Stock may join the Plan at any time.
If an Authorization Form requesting reinvestment of cash dividends is
received by the Administrator on or before the record date established for
a particular dividend, reinvestment of dividends will commence on that
dividend payment date. If an Authorization Form is received from a
shareholder after the record date established for a particular cash
dividend, the reinvestment of dividends will begin on the dividend payment
date following the next record date provided such shareholder is still a
holder of record. See Question 17 for instructions concerning optional
cash payments.
Dividend record dates and the related payment dates for any cash
dividends which may be declared on Common Stock have been or are
anticipated to be as follows for 1997:
RECORD DATE PAYMENT DATE
February 20, 1997 March 7, 1997
May 20, 1997 June 6, 1997
August 20, 1997 September 5, 1997
November 20, 1997 December 5, 1997
It is anticipated that record dates and payment dates for any cash
dividends which may be declared on Common Stock in the future will be at
approximately the same times of the year as listed above.
Once in the Plan, a shareholder will remain a participant until such
time as the shareholder elects to discontinue participation or the Plan is
terminated. See Question 19 regarding termination of participation in the
Plan.
7. What does the Authorization Form provide?
The Authorization Form serves to initiate participation in the Plan.
Specifically, the Authorization Form appoints the Administrator as agent
for the participant and directs the Company to pay the Administrator each
participant's cash dividends on all Participating Shares as well as on all
Plan Shares. The Authorization Form directs the Administrator to purchase
additional shares of Common Stock in accordance with each participant's
election of one of the following investment options:
a. Dividend Reinvestment/Optional Cash Payments -- Cash dividends
on all or any portion of common Stock registered in the
participant's name, as well as all Plan Shares credited to a
participant's account, will be reinvested in Common Stock at 100%
of the Market Price Average or the Market Purchase Price, as
applicable (each as defined in Question 11). If a participant
elects not to reinvest dividends on all shares of Common Stock
registered in such participant's name, the participant will
continue to receive a quarterly check for dividends on non-
Participating Shares. Optional cash payments of not less than
$100 each, nor more than, at the Company's option, $10,000 in any
calendar quarter (but in any event no more than an aggregate of
$25,000 per calendar year), will be invested in Common Stock at
100% of the Market Price Average or the Market Purchase Price,
as applicable; or
b. Optional Cash Payment Only -- Optional cash payments of not less
than $100 each, nor more than, at the Company's option, $10,000
in any calendar quarter (but in any event no more than an
aggregate of $25,000 per calendar year), will be invested in
Common Stock at 100% of the Market Price Average or the Market
Purchase Price, as applicable. Under this option, a participant
continues to receive checks for dividends on Common Stock
registered and held in the participant's name. However, once
purchased pursuant to the Plan, such additional shares of Common
Stock will be credited to the participant's Plan account and will
be considered Plan Shares. As Plan Shares, the dividends on such
shares will be automatically reinvested in additional shares of
Common Stock. If a participant wishes to receive cash payments
of dividends on Plan Shares, he or she must withdraw such shares
from the Plan by written notification to the Administrator at the
address set forth in Question 5. See Question 19 regarding
withdrawal of shares from the Plan account.
8. How may a participant change options under the Plan?
Participants may change their investment options at any time by
completing a new Authorization Form and returning it to the Administrator
at the address specified in Question 5.
COSTS
9. Are there any expenses to participants in connection with purchases
under the Plan?
There are no brokerage fees on purchases of Common Stock under the
Plan for participants. All costs of administration of the Plan will be
paid by the Company. However, (a) beneficial owners who arrange to
participate indirectly in the Plan through a broker or other nominee may
be required to pay a commission or service charge to such broker or nominee
in connection with such participation (see Question 4) and (b) participants
who request stock certificates may incur expenses related to such request
(see Question 13).
PURCHASES
10. How many shares of Common Stock will be purchased for a
participant?
A participant's account will be credited with the number of shares of
Common Stock, including fractional shares computed to four decimal places,
equal to the total amount invested by such participant divided by the
Market Price Average, or the Market Purchase Price, as applicable. The
amount of dividends for purposes of this computation will include cash
dividends payable on all Participating Shares and Plan Shares in a
participant's Plan account, whether purchased with reinvested dividends or
with optional cash payments.
11. What will be the price per share of Common Stock purchased under
the Plan?
The price to the participant of shares of Common Stock purchased
pursuant to the Plan with reinvested cash dividends or with optional cash
payments will be the "Market Price Average" which is the average of the
daily high and low sales prices on the dividend payment date. In the case
of open market purchases, the price will be the weighted average purchase
price excluding transaction costs (the "Market Purchase Price").
12. What is the source of shares of Common Stock purchased under the
Plan?
At the option of the Company, shares of Common Stock purchased under
the Plan will (a) come from the authorized but unissued shares of the
Company or shares held by the Company as treasury stock, (b) be purchased
in the open market or (c) be a combination of the foregoing.
Purchases on the open market will begin on the relevant dividend
payment date and will be completed no later than 30 days from such date
except where completion at a later date is necessary or advisable under any
applicable federal securities laws. Such purchase may be made on any
securities exchange where such shares are traded, in the over-the-counter
market, or by negotiated transactions and may be subject to such terms with
respect to price, delivery, and other terms as the Administrator may agree.
Neither the Company nor any participant shall have any authority or power
to direct the time or price at which shares may be purchased, or the
selection of the broker or dealer through or from whom purchases are to be
made.
CERTIFICATES
13. Will certificates be issued for shares of Common Stock purchased
under the Plan?
Generally, certificates for Plan Shares will not be issued to
participants but will be registered in the name of the Administrator as
agent for the participants. This will relieve participants of the
responsibility for the safekeeping of multiple certificates for shares
purchased and protect against loss, theft, or destruction of such
certificates. The number of shares of Common Stock credited to an account
under the Plan, however, will be shown on the participant's statement of
account. At any time upon written request of a participant to the Company,
certificates for any number of whole shares of Common Stock credited to
such participant's account under the Plan will be issued to such
participant. Participants may incur a fee for this service. Any remaining
whole shares of Common Stock for which certificates are not requested and
any fractional shares of Common Stock will continue to be credited to the
participant's account under the Plan. Certificates for fractional shares
of Common Stock cannot be issued under any circumstances.
At its discretion, the Company may institute procedures other than
those described above with respect to participation in the Plan by brokers
or other nominees on behalf of beneficial owners.
14. In whose name will accounts be maintained and certificates registered
when issued?
Participant accounts will be maintained in the same name as shown on
the Company's stockholder records. Certificates for whole shares of Common
Stock will similarly be registered in that name when issued. Upon written
request, certificates can also be registered and issued in names other than
the account name, subject to compliance with any applicable laws and the
payment by the participant of any applicable taxes, provided that the
request bears the signature of the participant and such signature is
properly guaranteed by members of Medallion Programs approved by the
Securities Transfer Association. If any part of a participant's name is
incorrect, the participant should contact the Administrator for assistance
in making a correction or change.
DIVIDEND REINVESTMENT
15. How does dividend reinvestment work?
The Administrator will use the aggregate dollar amount of the
dividends payable on the Common Stock which participants have elected to
reinvest to purchase Common Stock either (a) from the Company constituting
either authorized but unissued shares or shares held by the Company as
treasury stock or (b) in the open market, in each case, at the applicable
price per share computed as in Question 11.
16. When will dividends be reinvested?
In the case of shares purchased from the Company, the Administrator
will reinvest the dividends on the date that dividends are paid on Common
Stock. This date is set by the Company, and is usually in the first week
of March, June, September, and December. In the case of open market
purchases, such purchase will begin on the relevant dividend payment date
and be completed no later than 30 days thereafter as described in Question
12.
OPTIONAL CASH PAYMENTS
17. How do optional cash payments work?
All eligible holders of record of Common Stock who have submitted a
signed Authorization Form are eligible to make optional cash payments at
any time. Any number of optional cash payments may be made during the 30
day period prior to the next dividend payment date. Optional cash payments
received by the Administrator at least one business day prior to the
applicable dividend payment date will be invested in additional Common
Stock on such dividend payment date, along with the reinvestment of
dividends. No interest will be paid on optional cash payments received but
not yet invested. Therefore, it is suggested that any optional cash
payments that a participant wishes to make be sent so as to be received by
the Company shortly before the dividend payment date. Optional cash
payments may not be less than $100 each. The same amount of optional cash
payments need not be sent each time a payment is made, and there is no
obligation to make any cash payment at all. All optional cash payments
must be sent to the Administrator and made by check or money order payable
to the Administrator. Other forms of payment may be made, but only if
approved in writing in advance by the Administrator. To ensure proper and
timely crediting of optional cash payments, participants should indicate
on the face of checks, "DRP - optional cash payment," or otherwise identify
the purpose of the payment.
Payments of less than $100 and payments received too late to be
invested on the dividend payment date will be returned to the participant.
Optional cash payments will not be invested and will be returned to the
participant upon the participant's request if such request is received by
the Administrator no later than 48 hours prior to the close of business on
the applicable dividend payment date.
The Company reserves the right and option, in its sole discretion, to
limit optional cash payments with respect to any participant to $10,000 in
any calendar quarter (but in any event to an aggregate of $25,000 per
calendar year). Any optional cash payments not accepted for investment in
additional Common Stock will be returned to the participant.
REPORTS TO PARTICIPANTS
18. What reports will be issued?
Each participant in the Plan will receive after each dividend payment
date a detailed statement showing the status of the account at that time.
The statement will show the amount of the purchase, the price per share,
either the Market Price Average or the Market Purchase Price, as
applicable, of the Common Stock on the dividend payment date, the number
of shares purchased or withdrawn, and the total number of Participating
Shares and Plan Shares held for the participant by the Plan. All
year-to-date transactions in the account will be included. The Company may
amend the form of the statement from time to time, and may include other
information or limit the information given. The Company will take such
actions as may be necessary to conform the statement to, and provide it in
accordance with, any requirements of the Internal Revenue Code of 1986, as
amended, and the rules and regulations issued thereunder. Participants
will continue to receive copies of all materials normally sent to
non-participating shareholders, including the Company's annual report,
interim reports, and notice of annual meeting and proxy statement.
Statements should be retained by participants for income tax purposes.
WITHDRAWAL
19. How and when may a participant withdraw shares from the Plan or
terminate participation in the Plan?
Participants may withdraw all or a portion of Participating Shares and
Plan Shares from the Plan at any time by forwarding a written request to
the Administrator, indicating in such request the number of shares to be
withdrawn. Such written request must be addressed to the Administrator at
the address given in Question 5 above. If a participant's notice of
withdrawal is not received by the Administrator at least five business days
prior to the record date (normally during the first week of a calendar
quarter) for a particular dividend, the next dividend will be reinvested
for such participant's Plan account. The withdrawal of shares from a
participant's Plan account does not constitute termination of participation
in the Plan. Dividends on Participating Shares and Plan Shares retained
in the Plan account will continue to be reinvested.
Requests for termination of participation in the Plan must be in
writing and must be received by the Administrator at least five business
days prior to the record date (normally during the first week of the
calendar quarter) for a particular dividend to ensure complete termination
before the dividend payment date. If a request for termination is received
less than five business days prior to the record date for a particular
dividend, the next dividend will be reinvested for such participant's Plan
Account and it will be necessary to delay the distribution due upon
termination until after the dividend payment date.
If a participant withdraws all Participating shares and Plan Shares
from the Plan and requests to terminate participation in the Plan, or if
the Company terminates the Plan, certificates for whole shares of Common
Stock credited to the account of the participant under the Plan will be
issued and cash will be remitted in an amount equal to the market value of
any fractional share (see Question 13).
In the event that a participant withdraws only a portion of the shares
from the Plan, or withdraws all shares held in the Plan but does not
request to terminate participation in the Plan, certificates for such
shares will be issued by the Company as described in Question 13, but the
Plan will otherwise remain in effect for such participant.
In the request for withdrawal from the Plan, a participant may direct
the Administrator to sell the shares to be withdrawn. Similarly, in the
request for termination of participation in the Plan, a participant may
direct the Administrator to sell such participant's shares. In either
case, the Administrator will engage a broker to make such a sale in the
market at the prevailing market price as soon as practicable after receipt
of the request. Participants will receive the proceeds of the sale, less
any brokerage commission and transfer tax as soon as practicable
thereafter.
FEDERAL INCOME TAX CONSEQUENCES
20. What are the Federal income tax consequences of participation in
the Plan?
Automatic Reinvestment of Dividends
With respect to dividends used to purchase shares from the Company,
a participant in the Plan will generally be treated for Federal income tax
purposes as having received a dividend equal to the Market Price Average
multiplied by the number of whole and fractional shares purchased with such
reinvested dividends on the dividend payment date. A participant's tax
basis in those shares will also equal such Market Price Average multiplied
by the number of whole and fractional shares purchased with such reinvested
dividends on the dividend payment date.
With respect to dividends used by the Administrator to purchase shares
in the open market, a participant in the Plan will generally be treated for
Federal income tax purposes as having received a dividend equal to the full
amount of the cash dividend used to purchase such shares plus a
proportionate share of the brokerage fees and service charges attributable
to such purchase. A participant's tax basis in the purchased shares will
equal the Market Purchase Price for such shares plus that portion of the
brokerage fees and service charges attributable to such shares.
If all or a portion of a dividend paid by the Company is treated for
Federal income tax purposes as a return of capital because it exceeds the
available earnings and profits of the Company, the treatment of a
participant in the Plan will be different than the treatment described
above. Generally, the participant will not recognize taxable income with
respect to the portion of such dividend treated as a return of capital, and
a portion of the tax basis attributable to the participant's existing
shares will be allocated to the whole and fractional shares purchased with
such portion of the reinvested dividends. If, however, the amount of such
portion exceeds the tax basis of the participant's existing shares, under
certain circumstances, it is possible that the participant will be treated
for Federal income tax purposes as having a capital gain equal to all or
a portion of such reinvested dividends.
Optional Purchases
Participants will recognize no income for Federal income tax purposes
on the optional purchase of shares other than any brokerage fees and/or
service charges paid by the Company where the shares are purchased in the
open market. A participant's tax basis in the shares will be equal to the
amount of the optional cash payment used to purchase the shares plus any
brokerage commissions and/or service charges paid by the Company.
General
Upon withdrawal from the Plan, a participant will not recognize any
taxable income when certificates for whole shares credited to the
participant's account under the Plan are issued to the participant. Gain
or loss will be recognized by the participant when shares are sold by the
participant after withdrawal of shares from the Plan. The amount of such
gain or loss will be the difference between the amount realized by the
participant on the sale of such shares and the tax basis thereof. A
participant who receives a cash payment for a fractional share will realize
gain or loss with respect to such fractional share in the same manner as
applies to the sale of whole shares, unless such payment is treated as a
dividend for tax purposes, in which case the entire amount of such payment
will constitute taxable income if paid out of current or accumulated
earnings and profits of the Company.
Dividends available for reinvestment are subject to backup withholding
if a participant is so subject. In addition, in the case of foreign
shareholders whose dividends are subject to U.S. Federal income tax
withholding, the Company will reinvest dividends, less the amount of tax
to be withheld. Participants should seek advice with respect to such
matters from their own tax advisors.
OTHER INFORMATION
21. What happens when a participant sells or transfers all of the
shares registered in the participant's name?
If a participant sells or transfers all Participating Shares but
maintains Plan Shares in the Plan account, the Company will continue to
reinvest dividends on that balance and continue to accept optional cash
payments for the account until the participant withdraws all Plan Shares
credited to the Plan account.
22. What happens if the Company issues a stock dividend, declares a
stock split, offers stock rights, or makes some other type of distribution
or offering of the Company's Common Stock?
Participants will be treated the same as all other holders of Common
Stock in the event the Company pays a stock dividend, declares a stock
split, offers stock rights, or makes some other type of distribution or
offering to shareholders. At its discretion, the Company may either credit
the participant's account or distribute all or a portion of such stock,
property, or rights (including the amount allocable to Common Stock held
in the Plan) directly to the participant.
23. How will a participant's shares of Common Stock be voted at meetings
of shareholders?
Each participant will be furnished a proxy card and will be entitled
to vote any whole Plan Shares held in the Plan as well as all Participating
Shares and non-participating shares registered in the participant's name
If the proxy card is properly signed, the participant's proxy will be voted
in accordance with the instructions on the proxy card. If a properly
signed proxy card is returned without instructions, all whole Plan Shares
will be voted in accordance with the recommendations of the Company's Board
of Directors in the same manner as for Participating Shares and non-
participating shares registered in the name of the participant. If the
proxy card is not returned, or is returned unsigned, none of the
participant's shares under the Plan will be voted unless the participant,
or a duly appointed representative, votes in person at the meeting.
24. What are the responsibilities of the Company and the Administrator
under the Plan?
In administering the Plan, the Company and the Administrator will not
be liable for any act done in good faith or for any good faith omission to
act. Participants should recognize that an investment in shares of Common
Stock under the Plan is no different from an investment in shares held
directly and that neither the Company nor the Administrator can assure a
profit or protect against loss on the Common Stock purchased under the
Plan. Shareholders are cautioned that this Prospectus does not represent
a change in the Company's dividend policy nor a guarantee of future
dividends, which will continue to depend upon the Company's earnings,
financial requirements, governmental regulations and other factors.
25. Can the Company or the Administrator terminate a participant's
interest in the Plan?
The Company or the Administrator may terminate any participant's
participation in the Plan at any time for any reason, including, without
limitation, arbitrage-related activities or transactional profit
activities, by notice in writing mailed to the participant. In such event
the Administrator will follow the procedures for termination set forth in
Question 19.
26. What if a participant dies?
In the event of the death of a participant, the account will continue
to be administered according to the decedent's prior instructions until the
Company receives other instructions including a death certificate from the
duly authorized representative of the decedent's estate.
27. May the Plan be changed or discontinued?
The Company reserves the right to amend, suspend, modify, or terminate
the Plan at any time. Notice of any such amendment, suspension,
modification, or termination will be sent to all participants. Upon a
termination of the Plan, except in the circumstances described below, any
uninvested optional cash payments will be returned, a certificate for any
whole Plan Shares credited to the participant's Plan account will be
issued, and a cash payment will be made for any fractional share credited
to the participant's account.
In the event the Company terminates the Plan for the purpose of
establishing another dividend reinvestment and Common Stock purchase plan,
participants in the Plan will be enrolled automatically in such other plan
and Plan Shares credited to their Plan accounts will be credited
automatically to such other plan, unless notice is received to the
contrary.
THE COMPANY RESERVES THE RIGHT TO TERMINATE ANY PARTICIPANT'S
PARTICIPATION IN THE PLAN AT ANY TIME. ANY QUESTIONS OR INTERPRETATION
ARISING UNDER THE PLAN SHALL BE DETERMINED BY THE COMPANY AND ANY SUCH
DETERMINATION SHALL BE FINAL.
28. Who interprets and regulates the Plan?
The Plan, the Authorization Form, and each participant's account shall
be governed by and construed in accordance with the laws of the State of
New York and applicable state and Federal securities laws and cannot be
modified orally. The Company reserves the right to interpret and regulate
the Plan as deemed desirable or necessary. Any such interpretation and
regulation will be final and binding on the Company and all participants.
29. How may shareholders obtain answers to other questions regarding
the Plan?
Any additional questions should be addressed to: Registrar and
Transfer Company, 10 Commerce Drive, Cranford, New Jersey 07016 or by
calling the Company's Investor Relations Department at 1-800-333-3377 ext.
2020.
30. What are some of the responsibilities of participants?
Participants will have no right to draw checks or drafts against their
Plan account or to give instructions to the Administrator with respect to
any shares of Common Stock or cash held therein except as expressly
provided herein.
Participants should notify the Administrator promptly in writing of
any change of address. Notices to participants will be given by letter
addressed to them at their last address of record with the Administrator
under the Plan.
DESCRIPTION OF COMMON STOCK
The following description of the Company's Common Stock does not
purport to be complete and is subject to the detailed provisions of the
Delaware General Corporation Law, the Company's certificate of
incorporation (the "Charter") and the terms of the UDS Rights Agreement (as
defined below under "Rights Agreement").
The Company's authorized capital stock consists of 250,000,000 shares
of Common Stock, of which 74,870,755 shares were issued and outstanding on
June 30, 1997, and 25,000,000 preferred shares, of which 1,724,400 were
issued and outstanding on June 30, 1997.
Common Stock
Dividend Rights. Holders of Common Stock are entitled to receive
dividends when, as, and if declared by the Board, out of funds legally
available therefor, subject, however, to the rights relating to any
outstanding preferred stock of the Company.
Voting Rights. Subject to the rights, if any, of the holders of any
series of preferred stock of the Company, all voting rights are vested in
the holders of Common Stock, each share being entitled to one vote on each
matter presented for a vote, including the election of directors. The
Board, which currently consists of 12 directors, is divided into three
classes of directors with the term of one class expiring at each annual
meeting of stockholders. Because holders of Common Stock do not have
cumulative voting rights, the holders of a plurality of the Common Stock
represented at a meeting can elect all the directors standing for election
at such meeting.
Rights upon Liquidation. In the event of the liquidation, dissolution
or winding up of the Company, whether voluntary or involuntary, the holders
of Common Stock will be entitled to share ratably in assets available for
distribution to holders of Common Stock, subject, however, to the rights
relating to any outstanding preferred stock of the Company.
Miscellaneous. Common Stock is not liable for further calls or
assessments by the Company and the holders of Common Stock are not liable
for any liabilities of the Company. The Common Stock do not have
preemptive or other subscription rights, any conversion rights, or any
redemption or sinking fund provisions. Registrar & Transfer Company and
The R-M Trust Company act as transfer agent and registrar for the Common
Stock in the United States and Canada, respectively.
Rights. For a description of rights which are attached to each
outstanding share of Common Stock, see "Rights Agreement."
Rights Agreement
The Company has entered into a rights agreement with Registrar and
Transfer Company, as rights agent. Pursuant to the Rights Agreement, a
right initially representing the right to purchase one share of Common
Stock (a "Right") at a price of $75 (the "Rights Purchase Price"),
exercisable only in certain circumstances, was issued with respect to each
share of Common Stock outstanding on June 25, 1992 and will be issued with
respect to each share of Common Stock issued by the Company until the
earliest of the Distribution Date (as defined below), the redemption of
the Rights, or the Rights Expiration Date (as defined below). Rights may
also be issued with respect to Common Stock issued after the Distribution
Date in certain circumstances. A Right was issued with respect to each
share of Common Stock issued to holders of common stock of Diamond
Shamrock, Inc. in the merger of Diamond Shamrock, Inc. with and into the
Company. Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
Until the earlier of (i) such time as the Company learns that a person
has become a Acquiring Person (as defined below) and (ii) the close of
business on such date, if any, as may be designated by the Board of
Directors following the commencement of, or first public disclosure of an
intent to commence, a tender or exchange offer by any person (subject to
certain exceptions) for outstanding Common Stock, if upon consummation of
such tender or exchange offer such person's beneficial ownership of
outstanding Common Stock could equal or exceed such person's Ownership
Threshold (as defined below) (the earlier of such dates being the
"Distribution Date"), the Rights will be evidenced by the certificates for
Common Stock registered in the names of the holders thereof and not by
separate right certificates. Therefore, until the Distribution Date, the
Rights will be transferred with and only with the Common Stock.
For purposes of the Rights Agreement, (i) the term "Acquiring Person"
means, subject to certain exceptions set forth in the Rights Agreement,
any person, alone or together with all affiliates and associates of such
person, whose beneficial ownership of outstanding Common Stock equals or
exceeds such person's Ownership Threshold and (ii) the term "Ownership
Threshold" means, with respect to any person, beneficial ownership of the
greater of (a) 10% of the outstanding Common Stock or (b) 3% plus the
percentage of the outstanding Common Stock beneficially owned by such
person on May 10, 1994.
Pursuant to its terms and with certain limited exceptions, the Rights
Agreement may be amended or supplemented by the Company without the
approval of any holder of Rights.
In the event a person becomes a Acquiring Person, the Rights will
entitle each holder thereof (other than the Acquiring Person (or any
affiliate or associate of such Acquiring Person)) to purchase, for the
Rights Purchase Price, that number of shares of Common Stock equivalent to
the number of shares of Common Stock which at the time of the transaction
would have a market value of twice the Rights Purchase Price. Any Rights
that are at any time beneficially owned by an Acquiring Person (or any
affiliate or associate of an Acquiring Person) will be null and void and
nontransferable and any holder of any such Right (including any purported
transferee or subsequent holder) will be unable to exercise or transfer any
such Right.
After there is a Acquiring Person, the Board may elect to exchange
each Right (other than Rights that have become null and void and
nontransferable as described above) for consideration per Right consisting
of one-half of the securities that would be issuable at such time upon the
exercise of one Right pursuant to the terms of the Rights Agreement, and
without payment of the Rights Purchase Price.
In the event that, following a Distribution Date, the Company is
acquired in a merger by, or other business combination with, or 50% or more
of its assets or assets representing 50% or more of its earning power are
sold, leased, exchanged or otherwise transferred (in one or more
transactions) to, a publicly traded corporation, or such corporation merges
with and into the Company (in certain circumstances), each Right will
entitle its holder (subject to the next paragraph) to purchase, for the
Rights Purchase Price, that number of common shares of such corporation
which at the time of the transaction would have a market value of twice the
Rights Purchase Price. In the event the Company is acquired in a merger
by, or other business combination with, or 50% or more of its assets or
assets representing 50% or more of the earning power of the Company are
sold, leased, exchanged or otherwise transferred (in one or more
transactions) to, an entity that is not a publicly traded corporation or
such corporation merges with and into the Company (in certain
circumstances), each Right will entitle its holder (subject to the next
paragraph) to purchase, for the Rights Purchase Price, at such holder's
option, (i) that number of shares of such entity (or, at such holder's
option, of the surviving corporation in such acquisition, which could be
the Company) which at the time of the transaction would have a book value
of twice the Rights Purchase Price or (ii) if such entity has an affiliate
which has publicly traded common shares, that number of common shares of
such affiliate which at the time of the transaction would have a market
value of twice the Rights Purchase Price.
The Rights are not exercisable until the Distribution Date and will
expire on July 6, 2002 (the "Rights Expiration Date") unless earlier
redeemed or canceled by the Company as described below. At any time prior
to the earlier of (i) such time as a person becomes an Acquiring Person and
(ii) the Rights Expiration Date, the Board may redeem the Rights in whole,
but not in part, at a price (in cash or Common Stock or other securities
of the Company deemed by the Board to be at least equivalent in value) of
$.01 per Right, subject to adjustment as provided in the Rights Agreement
(the "Rights Redemption Price"); provided that, for the 120-day period
after any date of a change (resulting from a proxy or consent solicitation)
in a majority of the Board in office at the commencement of such
solicitation, the Rights may only be redeemed if (a) there are directors
then in office who were in office at the commencement of such solicitation
and (b) the Board, with the concurrence of a majority of such directors
then in office, determines that such redemption is, in its judgment, in the
best interests of the Company and its stockholders. Immediately upon the
action of the Board electing to redeem the Rights, the right to exercise
the Rights will terminate and within ten business days, the Company will
give notice thereof to holders of Rights.
The Delaware Business Combination Act
Section 203 of the General Corporation Law of the State of Delaware
(the "DGCL") imposes a three-year moratorium on business combinations (as
defined) between a Delaware corporation and an "interested stockholder" (in
general, a stockholder owning 15 percent or more of a corporation's
outstanding voting stock) or an affiliate or associate thereof unless (a)
prior to an interested stockholder becoming such, the Board of Directors
of the corporation approved either the business combination or the
transaction resulting in the interested stockholder becoming such, (b) upon
consummation of the transaction resulting in an interested stockholder
becoming such, the interested stockholder owns 85 percent of the voting
stock outstanding at the time the transaction commenced (excluding, from
the calculation of outstanding shares, shares beneficially owned by
management, directors and certain employee stock plans) or (c) on or after
an interested stockholder becomes such, the business combination is
approved by (i) the board of directors and (ii) holders of at least 66-2/3
percent of the outstanding shares (other than those shares beneficially
owned by the interested stockholder) at a meeting of stockholders.
Business combinations include (a) mergers or consolidations, (b)
sales, leases, exchanges or other transfers of ten percent or more of the
aggregate assets of the company, (c) issuance or transfers by the
corporation of any stock of the corporation which would have the effect of
increasing the interested stockholder's proportionate share of the stock
of any class or series of the corporation, (d) any other transaction which
has the effect of increasing the proportionate share of the stock of any
class or series of the corporation which is owned by an interested
stockholder and (e) receipt by an interested stockholder of the benefit
(except proportionately as stockholder) of loans, advances, guarantees,
pledges or other financial benefits provided by the corporation.
Certain Provisions of the Certificate of Incorporation and By-laws
The Certificate of Incorporation of the Company (the "Certificate")
and By-laws of the Company (the "By-laws") contain certain provisions that
may delay, defer or prevent a change in control of the Company and make
removal of management of the Company more difficult.
The Certificate provides that the Board of Directors of the Company
is divided into three classes that are elected for staggered three-year
terms, with the number of directors in each class to be as nearly equal as
possible. The Certificate provides that stockholder action may be taken
only at an annual or special meeting of stockholders, and may not be taken
by written consent of the stockholders. The Certificate also provides that
special meetings may be called only by the Chairman of the Board, if there
be one, the President or the Board of Directors.
The Certificate also contains certain "fair price provisions" designed
to provide safeguards for stockholders when an "interested stockholder"
(defined as a stockholder owning ten percent or more of the Company's
voting stock) or its affiliate or associate attempts to effect a "business
combination" with the Company. The term "business combination" includes any
merger or consolidation of the Company involving the interested
stockholder, certain dispositions of assets of the Company, any issuance
of securities of the Company, meeting certain threshold amounts, to the
interested stockholder, adoption of any plan of liquidation or dissolution
of the Company proposed by the interested stockholder and any
reclassification of securities of the Company having the effect of
increasing the proportionate share of ownership of the interested
stockholder. In general, a business combination between the Company and the
interested stockholder must be approved by the affirmative vote of 80% of
the outstanding voting stock, excluding voting stock owned by such
interested stockholder, unless the transaction is approved by a majority
of the members of the Board of Directors who are not affiliated with the
interested stockholder or certain minimum price and form of consideration
requirements are satisfied. See also "The Delaware Business Combination
Act."
The By-laws provide that the Board of Directors shall fix the number
of directors and that a stockholder may nominate directors only if written
notice is delivered to the Company by such stockholder 60 days in advance
of an annual meeting or within ten days after the date of notice by the
Company of a special meeting involving the election of directors. The By-laws
and Certificate also provide that any newly created directorship
resulting from an increase in the number of directors or a vacancy on the
Board shall be filled by vote of a majority of the remaining directors then
in office, even, in the case of a vacancy other than a newly created
directorship, if less than a quorum. A director elected to fill a vacancy
shall be elected for the unexpired term of his predecessor in office. A
director elected by reason of an increase in the number of directors shall
be elected until the next election of one or more directors by the
stockholders. Directors may be removed from office but only for cause and
only by the affirmative vote of a majority of the then outstanding shares
of stock entitled to vote on the matter. "Cause" is defined in the
Certificate to mean the "wilful and continuous failure of a director to
substantially perform such director's duties to the Corporation (including
any such failure resulting from incapacity due to physical or mental
illness) or the wilful engaging by a director in gross misconduct
materially and demonstrably injurious to the Corporation". The Certificate
provides that the By-laws and Certificate may not be amended without the
approval of at least 80% of the voting power of all shares of the Company
entitled to vote generally in the election of directors, voting together
as a single class.
The foregoing provisions, together with the ability of the Board to
issue preferred stock without further stockholder action, could delay or
frustrate the removal of incumbent directors or the assumption of control
by the holder of a large block of the Company's Common Stock even if such
removal or assumption would be beneficial, in the short term, to
stockholders of the Company. The provisions could also discourage or make
more difficult a merger, tender offer or proxy contest even if such event
would be favorable to the interests of stockholders.
LEGAL OPINION
Certain legal matters with respect to the Common Stock offered hereby
have been passed upon for the Company by Cravath, Swaine & Moore, Worldwide
Plaza, 825 Eighth Avenue, New York, New York 10019.
EXPERTS
The consolidated financial statements of Ultramar Corporation and
subsidiaries (Successor Company) and the combined financial statements of
Ultramar Corporation (Predecessor Company) appearing in Ultramar
Corporation's Annual Report (Form 10-K) for the year ended December 31,
1992, have been audited by Ernst & Young, independent auditors, as set
forth in their report thereon included therein and incorporated by
reference herein. Such financial statements are incorporated by reference
herein in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.<PAGE>
No person has been authorized 2,000,000 SHARES
to give any information or to make
any representation not contained in ULTRAMAR DIAMOND
this Prospectus in connection with SHAMROCK CORPORATION
the offer made by this Prospectus,
and if given or made, such informa-
tion or representation must not be COMMON STOCK
relied upon as having been autho- ($.01 PAR VALUE)
rized by the Company. This Pro-
spectus is not an offer to sell or
a solicitation of an offer to buy
any securities other than those
specifically offered hereby, nor
it such an offer or solicitation in
any jurisdiction to any person to
whom it is unlawful to make such an
offer or solicitation in such jur- ULTRAMAR DIAMOND SHAMROCK
isdiction. Neither the delivery C O R P O R A T I O N
of this Prospectus nor any sale
hereunder shall, under any circum-
stances, create an implication that
there has been no change in the
affairs of the Company or its sub-
sidiaries since the date hereof.
TABLE OF CONTENTS STOCK PURCHASE
AND
AVAILABLE INFORMATION........... DIVIDEND REINVESTMENT
INCORPORATION OF CERTAIN PLAN
DOCUMENTS BY REFERENCE........
THE COMPANY..................... PROSPECTUS
USE OF PROCEEDS.................
DESCRIPTION OF THE PLAN.........
Purpose.........................
Advantages......................
Administration..................
Participation...................
Costs...........................
Purchases.......................
Certificates....................
Dividend reinvestment...........
Optional cash payments..........
Reports to participants.........
Withdrawal......................
Federal income tax consequences.
Other information...............
DESCRIPTION OF COMMON STOCK.....
LEGAL OPINION...................
EXPERTS......................... November 3, 1997
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