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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ü]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] | Preliminary Proxy Statement | |||||
[ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||
[ü] | Definitive Proxy Statement | |||||
[ ] | Definitive Additional Materials | |||||
[ ] | Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2. |
UNOCAL CORPORATION
Payment of Filing Fee (Check the appropriate box):
[ü] | No fee required. |
[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
[ ] | Fee paid previously with preliminary materials. | |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
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• | a combination of 0.7725 of a share of Chevron common stock and $16.25 in cash; | |
• | 1.03 shares of Chevron common stock; or | |
• | $65.00 in cash. |
Sincerely, | |
Charles R. Williamson | |
Chairman of the Board of Directors and | |
Chief Executive Officer |
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Unocal Corporation Unocal Stockholder Services 2141 Rosecrans Avenue, Suite 4000 El Segundo, CA 90245 (800) 252-2233 | Chevron Corporation Chevron Comptroller’s Department 6001 Bollinger Canyon Road — A3201 San Ramon, CA 94583-2324 (925) 842-1000 |
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• | through the Internet, by visiting a website established for this purpose athttp://www.proxyvoting.com/ucl and following the instructions; or | |
• | by telephone, by calling the toll-free number (866) 540-5760 in the United States, Puerto Rico or Canada on a touch-tone pad and following the recorded instructions. |
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• | to vote on a proposal to approve and adopt the Agreement and Plan of Merger (referred to as the “merger agreement”), dated as of April 4, 2005, by and among Unocal, Chevron Corporation (referred to as “Chevron”) and Blue Merger Sub Inc., a wholly owned subsidiary of Chevron; | |
• | to vote upon an adjournment or postponement of the special meeting, if necessary, to solicit additional proxies; and | |
• | to transact any other business as may properly be brought before the special meeting or any adjournment or postponement of the special meeting. |
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Q: | What am I voting on? |
A: | Chevron is proposing to acquire Unocal. You are being asked to vote to approve and adopt an agreement and plan of merger through which Unocal will merge with and into a wholly owned subsidiary of Chevron, sometimes referred to as “Merger Sub.” After the merger, Merger Sub would be the surviving entity and a wholly owned subsidiary of Chevron, and Unocal would no longer be a separate company. |
Q: | What will I receive in exchange for my Unocal shares? |
A: | You may elect to receive, for each Unocal common share that you own, either: |
• | a combination of 0.7725 of a share of Chevron common stock and $16.25 in cash; |
• | 1.03 shares of Chevron common stock; or |
• | $65 in cash. |
Unless you make an all-cash or an all-stock election, you will receive the mixed consideration in the merger. In addition, the all-cash and all-stock elections are subject to proration in order to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all of the outstanding shares of Unocal common stock taken together. | |
If you are a participant in the Unocal Savings Plan, the Molycorp, Inc. 401(k) Retirement Savings Plan or the Pure Resources 401(k) and Matching Plan (which we collectively refer to in the proxy statement as the Unocal Plans), you will receive instructions from the relevant plan trustee on how to elect to have cash consideration or share consideration allocated to your plan account in exchange for Unocal common stock in your plan account. See “Information About the Special Meeting and Voting — Voting and Elections by Participants in the Unocal Plans” beginning on page 72 for detailed instructions. | |
Unocal Plan holders may be subject to an election deadline earlier than the general deadline of the day before the Unocal special meeting. Therefore, you should carefully read any materials you receive from your broker or the relevant plan trustee or administrator. | |
Q: | Will I be taxed on the consideration that I receive in exchange for my Unocal shares? |
A: | The transaction is intended to be tax-free to Unocal stockholders for U.S. federal income tax purposes, except with respect to any cash received. See “The Merger — Material Federal Income Tax Consequences of the Merger” beginning on page 34 of this proxy statement/prospectus. |
Q: | What is the required vote to approve and adopt the merger agreement and the merger? |
A: | The holders of a majority of the outstanding shares of Unocal common stock as of June 29, the record date for the special meeting, must vote to approve and adopt the merger agreement in order for the merger to be completed. Abstentions from voting and “broker non-votes” are not considered affirmative votes and therefore will have the same practical effect as a vote against the merger. |
Q: | What does the Unocal board of directors recommend? |
A: | The board of directors of Unocal unanimously recommends that Unocal’s stockholders vote in favor of the merger and any adjournment of the special meeting. |
Q: | Do I have dissenters’ or appraisal rights with respect to the merger? |
A: | Yes. Under Delaware law, you have the right to dissent from the merger and, in lieu of receiving the merger consideration, obtain payment in cash of the fair value of your shares of Unocal common stock as determined by the Delaware Chancery Court. To exercise appraisal rights, you must strictly follow the procedures prescribed by Delaware law. These procedures are summarized under “The Merger — Appraisal Rights” beginning on page 37 of this proxy statement/prospectus. In addition, the text of the applicable provisions of Delaware law is included as Annex C to this proxy statement/prospectus. |
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Q: | May I submit a form of election if I vote against the merger? |
A: | Yes. You may submit a form of election even if you vote against adopting the merger agreement. However, if you submit a properly executed election form, you will thereby withdraw any previously filed written demand for appraisal and will not be entitled to appraisal rights. See “The Merger — Appraisal Rights” beginning on page 37 of this proxy statement/prospectus. |
Q: | When do you expect the merger to occur? |
A: | We expect to complete the merger promptly after Unocal stockholders approve and adopt the merger agreement and the merger at the special meeting and after the satisfaction or waiver of all other conditions to the merger. We currently expect this to occur in the first half of August, 2005. |
Q: | What is the board’s view of the CNOOC proposal? |
A: | On June 22, 2005, we received from CNOOC a proposal to acquire Unocal at $67 per share in cash. The Unocal board continues to recommend the Chevron transaction. We expect that, prior to the special meeting, and after engaging in discussions with CNOOC, we will update you regarding the board’s evaluation of the CNOOC proposal. |
Q: | When and where is the Unocal special stockholder meeting? |
A: | The Unocal special stockholder meeting will take place on August 10, 2005, at 10:00 a.m., Pacific Daylight Time, and will be held at The Hilton Los Angeles Airport Hotel, 5711 West Century Blvd., Los Angeles, California 90045. |
Q: | Who is entitled to vote at the special meeting? |
Holders of record of Unocal common stock at the close of business on June 29, 2005, which is the date Unocal’s board of directors has fixed as the record date for the special meeting, are entitled to vote at the special meeting. | |
Q: | What do I need to do now? |
A: | Please mail your signed proxy card in the enclosed return envelope or vote by telephone or the Internet, as soon as possible, so your shares will be represented at the special meeting. In order to be sure that your vote is counted, please submit your proxy as instructed on your proxy card even if you plan to attend the special meeting in person. |
Q: | May I change my vote after I have mailed my signed proxy card? |
A: | Yes. You may change your vote at any time before your proxy is voted at the special meeting. If your shares of Unocal common stock are registered in your own name, you can do this in one of three ways. |
• | First, you can deliver to Unocal prior to the special meeting a written notice stating that you want to revoke your proxy. The notice should be sent to the attention of the Corporate Secretary, 2141 Rosecrans Avenue, Suite 4000, El Segundo, CA 90245, to arrive by the close of business on the day before the special meeting, which is currently scheduled for August 10, 2005. |
• | Second, you can complete and deliver prior to the special meeting a new proxy card. The proxy card should be sent to the addressee indicated on the pre-addressed envelope enclosed with your initial proxy card to arrive by the close of business on the day before the special meeting, which is currently scheduled for August 10, 2005. The latest dated and signed proxy actually received by this addressee before the special meeting will be counted, and any earlier proxies will be considered revoked. |
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If you vote your proxy electronically through the Internet or by telephone, you can change your vote by submitting a different vote through the Internet or by telephone, in which case your later-submitted proxy will be recorded and your earlier proxy revoked. |
• | Third, you can attend the Unocal special meeting and vote in person. Simply attending the meeting, however, will not revoke your proxy, as you must vote at the special meeting in order to revoke a prior proxy. |
If you are a street-name stockholder and you vote by proxy, you may later revoke your proxy instructions by informing the holder of record in accordance with that entity’s procedures. | |
Q: | If I beneficially own Unocal shares held pursuant to a Unocal Plan, will I be able to vote on adoption of the merger agreement? |
A: | Yes. If you are a participant in a Unocal Plan, please submit the voting form you receive from the plan administrator or trustee to indicate to the relevant plan administrator or trustee how you want the Unocal common stock allocated to your plan account to be voted. |
Q: | If my shares are held in “street name” by my broker, will my broker vote my shares for me? |
A: | If you do not provide your broker with instructions on how to vote your “street name” shares, your broker will not be permitted to vote them on the merger. Therefore, you should be sure to provide your broker with instructions on how to vote your shares. Please check the voting form used by your broker to see if it offers telephone or Internet voting. |
Q: | Why is it important for me to vote? |
A: | We cannot complete the merger without Unocal stockholders voting in favor of the merger. |
Q: | What if I don’t vote? |
A: | If you do not give voting instructions to your broker or you do not vote, you will, in effect, be voting against the merger. |
Q: | Should I send in my stock certificates with my proxy card? |
A: | No. Pleasedo notsend your stock certificates with your proxy card. Prior to the election deadline described in this proxy statement/ prospectus, you should send your Unocal common stock certificates to the exchange agent, together with a completed, signed election form being provided to you with this document, or, if your shares are held in “street name,” according to your broker’s instructions. |
Q: | How do I elect the type of the merger consideration that I prefer to receive? |
A: | Each Unocal stockholder is being sent an election form and transmittal materials. You must properly complete and deliver to the exchange agent the election materials, together with your stock certificates (or a properly completed notice of guaranteed delivery). A return envelope will be enclosed for submitting the election form and certificates to the exchange agent. This is different from the envelope that you will use to return your completed proxy card.Please do not send your stock certificates or form of election with your proxy card. |
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Q: | Can I make one election for some of my shares and another election for the rest? |
A: | Yes. The election form permits you to specify, among the shares you are submitting, how many you are allocating to |
• | a mixed election, |
• | an all-stock election, |
• | an all-cash election, or |
• | no election. |
Q: | What if I do not make an election? |
A: | If you do not submit a properly completed and signed election form to the exchange agent by the election deadline (or if you submit a properly completed election form indicating no election, together with the certificates representing all of your shares), then you will be deemed to have made the mixed election and would therefore receive $16.25 in cash and 0.7725 of a share of Chevron common stock in exchange for each of your shares of Unocal common stock. |
Q: | Can I change my election after I submit an election form? |
A: | Yes. You may revoke your election of merger consideration with respect to all or a portion of your shares of Unocal common stock by delivering written notice of your revocation to the exchange agent prior to the election deadline. If you instructed a broker to submit an election for your shares, you must follow your broker’s directions for changing those instructions. In addition, any election of merger consideration you make will automatically be revoked if the merger agreement is terminated. |
Q: | Where can I find more information about Unocal and Chevron? |
A: | You can find more information about Unocal and Chevron from various sources described under the heading “Additional Information for Stockholders — Where You Can Find More Information” beginning on page 82 of this proxy statement/prospectus. |
Q: | Who do I call if I have questions about the meeting or the merger? |
A: | If you have any questions about the merger or if you need additional copies of this proxy statement/ prospectus or the enclosed proxy card, you should contact: |
If you need an additional election form, you should contact the exchange agent: |
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• | a combination of 0.7725 of a share of Chevron common stock and $16.25 in cash (which we refer to as the “mixed consideration”); | |
• | 1.03 shares of Chevron common stock; or | |
• | $65 in cash. |
• | If you receive a combination of Chevron common stock and cash in exchange for your Unocal common stock and your tax basis in your Unocal common stock is less than the sum of the cash and the fair market value, as of the closing date of the merger, of the Chevron common stock received, you generally will recognize gain equal to the lesser of (1) the sum of the cash and the fair market value of the Chevron common stock you receive, minus the tax basis of your Unocal |
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common stock surrendered and (2) the amount of cash you receive in the merger. However, if your tax basis in the Unocal common stock surrendered in the merger is greater than the sum of the cash and the fair market value of the Chevron common stock you receive, your loss will not be currently allowed or recognized for federal income tax purposes. | ||
• | If you receive solely Chevron common stock in exchange for Unocal common stock, then you generally will not recognize any gain or loss, except with respect to cash you receive in lieu of fractional shares of Chevron common stock. | |
• | If you receive solely cash in exchange for your Unocal common stock, then you generally will recognize gain or loss equal to the difference between the amount of cash you receive and the tax basis in your shares of Unocal common stock. |
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• | approval of the merger agreement and the merger by Unocal stockholders; | |
• | expiration or termination of the relevant waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act); | |
• | absence of any legal prohibition on completion of the merger; | |
• | the registration statement of which this proxy statement/ prospectus is a part having been declared effective by the Securities and Exchange Commission; | |
• | approval for listing on the New York Stock Exchange of the shares of Chevron common stock to be issued in the merger; | |
• | absence of any condition to approval of the merger by the Federal Trade Commission (FTC) or Department of Justice that would result in or be reasonably likely to result in a “substantial detriment” (as defined in this proxy statement/ prospectus); | |
• | absence of any proceeding seeking to limit Chevron’s ownership of Unocal or to compel divestiture of assets if any such matter would result in or be reasonably likely to result in a “substantial detriment”; | |
• | absence of any statute, rule, or order applicable to the merger that would result in or be reasonably likely to result in a “substantial detriment”; | |
• | receipt of all material regulatory approvals for the merger on terms that are not reasonably likely to result in a “substantial detriment”; | |
• | performance by the other party in all material respects of its obligations under the merger agreement; | |
• | accuracy as of the closing of the merger of the representations and warranties made by the other party; | |
• | receipt by Chevron and Unocal of opinions of their respective tax counsel to the effect that the merger will qualify as a reorganization under the Code; and | |
• | absence of a material adverse effect on the other party during the period from April 4, 2005 until the closing of the merger. |
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• | the merger is not completed by December 31, 2005 (or August 31, 2006, if the reason for not closing by December 31, 2005 is that the regulatory conditions specified in the merger agreement have not been satisfied); | |
• | the approval of Unocal stockholders has not been obtained by reason of the failure to obtain the required vote at the Unocal special meeting or any adjournment of the special meeting; | |
• | a law or court order permanently prohibits the merger; or | |
• | a breach by the other party of any of its representations, warranties, covenants or obligations in the merger agreement if that breach would result in the failure to satisfy the closing condition relating to the representations, warranties and covenants and the breach is not cured. |
• | Chevron terminates the agreement because the Unocal board fails to recommend the merger to its stockholders, because the Unocal board otherwise changes or proposes publicly to change, in any manner adverse to Chevron, its recommendation of the merger to stockholders, because Unocal fails to comply with its obligations to hold the special meeting or because Unocal has materially (and to the material detriment of Chevron) breached its obligation to refrain from soliciting other acquisition proposals; | |
• | either Chevron or Unocal terminates the merger agreement because Unocal’s stockholders do not approve the merger and, prior to the Unocal stockholders’ meeting, a proposal by a third party for an alternative transaction was made known to Unocal (including any of its agents or representatives) and communicated publicly or to any substantial number of Unocal stockholders or |
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was made directly to Unocal’s stockholders or any person publicly announced an intention (whether or not conditional) to make an alternative acquisition proposal; or | ||
• | a proposal by a third party for an alternative transaction is made known to Unocal (including any of its agents or representatives) and communicated publicly or to any substantial number of Unocal stockholders or is made directly to Unocal’s stockholders by any person, or any person publicly announces an intention (whether or not conditional) to make an alternative acquisition proposal, and after any such event the merger agreement is terminated by either Chevron or Unocal because the merger is not completed by the end date, so long as the Unocal stockholder approval has not been obtained. |
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Three Months | |||||||||||||||||||||||||||||
Ended March 31, | Year Ended December 31, | ||||||||||||||||||||||||||||
2005 | 2004 | 2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||||||||
(millions of dollars, except per-share amounts) | |||||||||||||||||||||||||||||
Sales and other operating revenue(1)(2) | $ | 40,441 | $ | 33,063 | $ | 150,865 | $ | 119,575 | $ | 98,340 | $ | 103,951 | $ | 116,619 | |||||||||||||||
Income from continuing operations | 2,677 | 2,551 | 13,034 | 7,382 | 1,102 | 3,875 | 7,638 | ||||||||||||||||||||||
Income from continuing operations per common share(3) | |||||||||||||||||||||||||||||
Basic | 1.28 | 1.21 | 6.16 | 3.55 | 0.52 | 1.82 | 3.58 | ||||||||||||||||||||||
Diluted | 1.28 | 1.20 | 6.14 | 3.55 | 0.52 | 1.82 | 3.57 | ||||||||||||||||||||||
Cash dividends per common share(3) | 0.40 | 0.36 | 1.53 | 1.43 | 1.40 | 1.33 | 1.30 | ||||||||||||||||||||||
Total assets | 95,803 | 85,107 | 93,208 | 81,470 | 77,359 | 77,572 | 77,621 | ||||||||||||||||||||||
Long-term debt and capital lease obligations | 10,422 | 10,880 | 10,456 | 10,894 | 10,911 | 8,989 | 12,821 | ||||||||||||||||||||||
(1) Includes consumer excise taxes | 2,116 | 1,857 | 7,968 | 7,095 | 7,006 | 6,546 | 6,601 | ||||||||||||||||||||||
(2) Includes amounts for buy/sell contracts | 5,290 | 4,256 | 18,650 | 14,246 | 7,963 | N/A | (4) | N/A | (4) | ||||||||||||||||||||
(3) All periods reflect a two-for-one stock split effected as a 100 percent stock dividend in September 2004. | |||||||||||||||||||||||||||||
(4) Information for this period not readily available. |
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Three Months | |||||||||||||||||||||||||||||
Ended March 31 | Year Ended December 31 | ||||||||||||||||||||||||||||
2005 | 2004 | 2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||||||||
(millions of dollars, except per-share amounts) | |||||||||||||||||||||||||||||
Sales and other operating revenue(1) | $ | 2,157 | $ | 1,821 | $ | 7,921 | $ | 6,357 | $ | 5,200 | $ | 6,682 | $ | 8,953 | |||||||||||||||
Income from continuing operations | 449 | 267 | 1,146 | 699 | 323 | 591 | 722 | ||||||||||||||||||||||
Income from continuing operations per common share Basic | 1.66 | 1.02 | 4.36 | 2.70 | 1.31 | 2.42 | 2.97 | ||||||||||||||||||||||
Diluted | 1.64 | 0.99 | 4.25 | 2.66 | 1.31 | 2.40 | 2.93 | ||||||||||||||||||||||
Cash dividends per common share | 0.20 | 0.20 | 0.80 | 0.80 | 0.80 | 0.80 | 0.80 | ||||||||||||||||||||||
Total assets | 13,690 | 12,136 | 13,101 | 11,798 | 10,846 | 10,491 | 10,066 | ||||||||||||||||||||||
Long-term debt and capital lease obligations | 2,302 | 3,199 | 2,571 | 2,635 | 3,002 | 2,897 | 2,392 | ||||||||||||||||||||||
Company-obligated mandatorily redeemable convertible preferred securities of a subsidiary trust holding solely-parent debentures | — | — | — | 522 | 522 | 522 | 522 | ||||||||||||||||||||||
(1) Includes amounts for buy/sell contracts | 163 | 252 | 965 | 820 | 604 | 601 | 533 |
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Three Months Ended | Year Ended | ||||||||
March 31, 2005 | December 31, 2004 | ||||||||
Chevron historical(1) | |||||||||
Income from continuing operations — basic | $ | 1.28 | $ | 6.16 | |||||
Income from continuing operations — diluted | 1.28 | 6.14 | |||||||
Cash dividends | 0.40 | 1.53 | |||||||
Book value at end of period | 22.21 | 21.47 | |||||||
Chevron pro forma combined(1) | |||||||||
Income from continuing operations — basic | 1.34 | 6.06 | |||||||
Income from continuing operations — diluted | 1.34 | 6.02 | |||||||
Cash dividends(2) | 0.40 | 1.53 | |||||||
Book value at end of period | 25.47 | N/A | (3) | ||||||
Unocal historical | |||||||||
Income from continuing operations — basic | 1.66 | 4.36 | |||||||
Income from continuing operations — diluted | 1.64 | 4.25 | |||||||
Cash dividends | 0.20 | 0.80 | |||||||
Book value at end of period | 21.64 | 19.82 | |||||||
Unocal pro forma (equivalent)(4) | |||||||||
Income from continuing operations — basic | 1.04 | 4.68 | |||||||
Income from continuing operations — diluted | 1.03 | 4.65 | |||||||
Cash dividends | 0.31 | 1.18 | |||||||
Book value at end of period | 19.67 | N/A | (3) |
(1) | Both periods reflect a two-for-one stock split effected as a 100 percent stock dividend in September 2004. |
(2) | Same as Chevron historical since no change in dividend policy is expected as a result of the merger. In April 2005, Chevron increased its quarterly dividend to $0.45 per share. |
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(3) | Book value is presented on a pro forma basis only for the most recent balance sheet date, March 31, 2005. |
(4) | Derived using per-share amounts for “Chevron pro forma combined” times the exchange ratio of 0.7725 Chevron common shares for each Unocal common share. This computation does not include the benefit to the Unocal stockholder of the cash component of the transaction. |
(Millions of dollars) | ||||||
Cash — (25 percent of 271,654,896 Unocal shares times $65.00 per share) | $ | 4,414 | ||||
Chevron stock — 209,853,407 shares times $57.40 per share | 12,046 | |||||
(Weighted-average price of Chevron stock for a five-day period beginning two days before the date of announcement) | ||||||
Unocal stock options — estimated fair value that will fully vest at the date of close | 168 | |||||
Transaction costs — estimated direct fees | 22 | |||||
Total | $ | 16,650 | ||||
• | Purchase price as a percentage of total assets of Chevron at December 31, 2004. | |
• | Unocal assets as a percentage of Chevron assets at December 31, 2004. | |
• | Unocal before-tax income from continuing operations for the year ending December 31, 2004, as a percentage of Chevron before-tax income from continuing operations for the same period. |
(Millions of dollars) | ||||||||||
Carryover basis of Unocal net assets | $ | 5,878 | ||||||||
Net increase in assets to estimated fair value: | ||||||||||
Upstream — Proved properties | 3,938 | |||||||||
Upstream — Unproved properties | 5,888 | |||||||||
Midstream and other assets | 1,459 | 11,285 | ||||||||
Net increase in liabilities to fair value, including $4,221 million of deferred income taxes | (4,825 | ) | ||||||||
Goodwill | 4,312 | |||||||||
Total | $ | 16,650 | ||||||||
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• | for a mixed election, by multiplying the closing price per share of Chevron common stock on each of the two dates by the mixed election exchange ratio of 0.7725 and adding $16.25; and | |
• | for an all-stock election, by multiplying the closing price per share of Chevron common stock on each of the two dates by the all-stock election exchange ratio of 1.03, assuming no proration. |
Closing Price per Share | ||||||||
April 1, 2005 | June 29, 2005 | |||||||
Chevron Common Stock | $ | 59.31 | $ | 56.76 | ||||
Unocal Common Stock | $ | 64.35 | $ | 65.20 | ||||
Unocal Mixed Election Equivalent | $ | 62.07 | $ | 60.10 | ||||
Unocal Stock Election Equivalent | $ | 61.09 | $ | 58.46 |
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Chevron(1) | Unocal | ||||||||||||||||||||||||
For the quarterly period ended: | High | Low | Dividends | High | Low | Dividends | |||||||||||||||||||
2002 | |||||||||||||||||||||||||
March 31, 2002 | $ | 45.80 | $ | 40.40 | $ | 0.35 | $ | 39.24 | $ | 33.09 | $ | 0.20 | |||||||||||||
June 30, 2002 | $ | 45.52 | $ | 41.78 | $ | 0.35 | $ | 39.70 | $ | 35.25 | $ | 0.20 | |||||||||||||
September 30, 2002 | $ | 44.47 | $ | 32.82 | $ | 0.35 | $ | 36.92 | $ | 29.14 | $ | 0.20 | |||||||||||||
December 31, 2002 | $ | 37.72 | $ | 32.70 | $ | 0.35 | $ | 32.40 | $ | 26.58 | $ | 0.20 | |||||||||||||
2003 | |||||||||||||||||||||||||
March 31, 2003 | $ | 35.20 | $ | 30.65 | $ | 0.35 | $ | 31.76 | $ | 24.97 | $ | 0.20 | |||||||||||||
June 30, 2003 | $ | 38.11 | $ | 31.06 | $ | 0.35 | $ | 31.38 | $ | 26.14 | $ | 0.20 | |||||||||||||
September 30, 2003 | $ | 37.28 | $ | 35.02 | $ | 0.36 | $ | 32.45 | $ | 27.79 | $ | 0.20 | |||||||||||||
December 31, 2003 | $ | 43.49 | $ | 35.57 | $ | 0.37 | $ | 37.08 | $ | 30.72 | $ | 0.20 | |||||||||||||
2004 | |||||||||||||||||||||||||
March 31, 2004 | $ | 45.71 | $ | 41.99 | $ | 0.36 | $ | 39.40 | $ | 35.12 | $ | 0.20 | |||||||||||||
June 30, 2004 | $ | 47.50 | $ | 43.95 | $ | 0.37 | $ | 39.70 | $ | 34.18 | $ | 0.20 | |||||||||||||
September 30, 2004 | $ | 54.49 | $ | 46.21 | $ | 0.40 | $ | 43.50 | $ | 34.65 | $ | 0.20 | |||||||||||||
December 31, 2004 | $ | 56.07 | $ | 50.99 | $ | 0.40 | $ | 46.50 | $ | 40.56 | $ | 0.20 | |||||||||||||
2005 | |||||||||||||||||||||||||
March 31, 2005 | $ | 63.15 | $ | 50.40 | $ | 0.40 | $ | 63.98 | $ | 41.06 | $ | 0.20 | |||||||||||||
April 1 - June 29, 2005 | $ | 59.48 | $ | 49.81 | $ | 0.45 | $ | 66.50 | $ | 53.44 | $ | 0.20 |
(1) | Prices in all periods have been adjusted for two-for-one stock split effected as a 100 percent stock dividend in September 2004. |
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• | obtaining the required approvals of various regulatory agencies, any of which could impose conditions or restrictions on its approval; | |
• | minimizing the diversion of management attention from ongoing business concerns; | |
• | addressing differences in the business cultures of Chevron and Unocal; | |
• | coordinating and combining international operations, relationships, and facilities, which may be subject to additional complications resulting from operating in countries that are new to Chevron and geographic distance from other Chevron operations; and | |
• | retaining key employees and maintaining key employee morale, particularly in areas where Chevron does not currently have personnel. |
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• | Unocal may be required to pay Chevron fees of up to $500 million in the aggregate if the merger agreement is terminated under certain circumstances and Unocal enters into an alternative transaction; | |
• | The current market price of Unocal common stock may reflect a market assumption that the merger will occur, and a failure to complete the merger could result in a negative perception by the market of Unocal generally and a resulting decline in the market price of Unocal common stock; | |
• | Many costs relating to the merger (such as legal, accounting and financial advisory fees) are payable by Unocal whether or not the merger is completed; | |
• | There may be substantial disruption to the business of Unocal and a distraction of its management and employees from day-to-day operations, because matters related to the merger (including integration planning) may require substantial commitments of time and resources, which could otherwise have been devoted to other opportunities that could have been beneficial; and | |
• | Unocal would continue to face the risks that it currently faces as a independent company, as further described in the documents that Unocal has filed with the SEC that are incorporated by reference into this proxy statement/ prospectus. |
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• | materially adverse changes in economic, financial or industry conditions generally or in the markets served by our companies |
• | the competitiveness of alternative energy sources or product substitutes |
• | actions of competitors |
• | crude oil and natural gas prices |
• | refining and marketing margins |
• | petrochemicals prices and competitive conditions affecting supply and demand for aromatics, olefins and additives products |
• | changes in demographics and consumer preferences |
• | the outcome of negotiations with partners, governments, suppliers, unions, customers or others |
• | our ability to successfully integrate the operations of Chevron and Unocal after the merger and to minimize the diversion of management’s attention and resources during the integration process |
• | the process of, or conditions imposed in connection with, obtaining regulatory approvals for the merger |
• | political instability or civil unrest in the areas of the world relating to our operations |
• | political developments and laws and regulations, such as forced divestiture of assets, restrictions on production or on imports or exports, price controls, tax increases and retroactive tax claims, expropriation of assets, cancellation of contract rights, and environmental laws or regulations |
• | potential liability for remedial actions under environmental regulations and litigation |
• | potential failure to achieve expected production from existing and future crude oil and natural gas development projects |
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• | potential delays in the development, construction or start-up of planned projects |
• | successful introduction of new products |
• | labor relations |
• | accidents or technical difficulties |
• | changes in operating conditions and costs |
• | weather and natural disasters |
• | crude oil, natural gas and petrochemical project advancement |
• | the development and use of new technology by us or our competitors |
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• | the board’s familiarity with, and understanding of, Unocal’s business, financial condition, results of operations, current business strategy and earnings and prospects and of Chevron’s business, financial condition, results of operations, business strategy and earnings (including the report of Unocal’s management and financial advisor on the results of their due diligence review of Chevron); | |
• | the board’s understanding of the current and prospective markets in which Unocal operates, including global, national and local economic conditions, the competitive landscape for oil and gas industry participants generally and the likely effect of these factors on Unocal in light of, and in the absence of, the merger; | |
• | the board’s understanding, and management’s review, of Unocal’s current and prospective holdings, including Unocal’s international and deepwater assets, and the board’s and management’s views concerning maximizing the future benefits relating to these holdings in view of Unocal’s size and position in the oil and gas industry. In this regard, Unocal’s board and management believe that: |
– | maximizing Unocal’s unique international asset base would require very significant capital outlays and the assumption of a degree of risk and potential volatility in the results of the business that in each case would be borne significantly more readily if the company were larger and more diversified; and | |
– | by virtue of its financial and technical resources and geographic scope, Chevron would be better positioned, and therefore more likely, to develop these prospects without subjecting Chevron to the same degree of volatility; |
• | management’s review, and the board’s understanding, of the geopolitical risks inherent in Unocal’s asset portfolio, and of the likelihood that a business combination with Chevron would diversify these risks significantly. In this regard, the board noted that on a barrels of oil-equivalent basis, as of December 31, 2004, approximately 67 percent of Unocal’s oil and gas production and approximately 74 percent of Unocal’s proved oil and gas reserves were located outside the United States; |
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• | the fact that, because most of the merger consideration is payable in the form of Chevron shares, Unocal stockholders will have the opportunity to participate in the performance of the combined post-merger company. In that regard, the Unocal board understood that the volatility of prices for oil and gas would cause the value of the merger consideration to fluctuate, perhaps significantly, but was of the view that on a long-term basis it would be desirable for stockholders to have an opportunity to retain some continuing investment in the post-merger combined company. Unocal’s board and management noted that the combined company was expected to be highly competitive across all key aspects of the energy sector and would benefit from the integration of Unocal’s and Chevron’s complementary businesses and strategies and from the combined expertise of each company’s personnel. The board noted specifically the strengthening of the combined company’s operations in the following core geographic areas: |
– | the Asia-Pacific region, where, after the merger, Chevron is expected to be in the top tier of natural gas producers and marketers, the top oil and gas producer in Thailand and will have an enhanced presence in key areas such as Indonesia; | |
– | the Gulf of Mexico, where, after the merger, Chevron is expected to have an enhanced position in terms of available assets and deepwater opportunities; and | |
– | the Caspian Region, where the acquisition will give Chevron the second-largest interest in oil producing operations in the Azerbaijan International Operating Company and will broaden Chevron’s status as a leading oil company in that region. |
– | maintaining focus on high-impact exploration and growth and leveraging Unocal’s advantaged positions in the Gulf of Thailand and deepwater Indonesia; | |
– | building large-scale businesses in Asia and pursuing regional expansion in Asia in general; | |
– | continuing exploration and development efforts in the Gulf of Mexico deepwater; and | |
– | the greater likelihood of pursuing these strategies effectively, in light of the market conditions and the oil and gas industry landscape, if the companies were combined; |
• | the board’s belief, supported by the views and information provided by Unocal’s management and financial advisor, that Unocal’s stock price following the publication in early 2005 of news reports relating to a potential transaction (see “— Background of the Merger”) reflected, in part, takeover speculation and therefore was higher than Unocal’s unaffected trading price, and that the consideration offered by Chevron in the merger represented a premium to the unaffected trading price of Unocal common stock; | |
• | the board’s understanding, and management’s review, of overall market conditions, including then-current and prospective commodity prices and Unocal’s unaffected trading price, and the board’s determination that, in light of these factors, the timing of a potential transaction was favorable to Unocal; | |
• | the fact that the dividend yield of Chevron common stock is considerably higher than that of Unocal, and the board’s expectation that Unocal stockholders who receive Chevron common stock in the merger would receive higher annual dividends than the dividends paid with respect to Unocal’s common stock; | |
• | the potential savings from operational synergies and reduced corporate expenses, currently estimated by Chevron to be approximately $325 million before tax annually, and the related potential impact of these savings on the combined company’s earnings; |
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• | the review by the board with Unocal’s legal and financial advisors of the structure of the merger and the financial and other terms of the merger agreement, including the blend of cash and stock consideration, the covenants of each party and the conditions to consummation of the merger; | |
• | the quantitative analyses of the financial terms of the merger presented to the board by Unocal’s financial advisor; | |
• | the opinion of Unocal’s financial advisor that, as of the date of that opinion, and based upon and subject to the qualifications, assumptions and limitations in the opinion, the consideration to be received by holders of Unocal’s common stock in the merger agreement was fair from a financial point of view to those stockholders (see “— Opinion of Unocal’s Financial Advisor”); | |
• | the expectation that the merger would qualify as a reorganization for federal income tax purposes. |
• | the risks of the type and nature described under “Risk Factors”; | |
• | the challenges of integrating the businesses and operations of the two companies, and the risk that the anticipated cost savings and other expected synergies may not be achieved as and when planned; | |
• | the possibility that the U.S. Department of Justice, the FTC or other regulatory authorities might seek to enjoin or otherwise prevent the merger, which possibility the board considered to be low; | |
• | with respect to the equity component of the consideration, the volatility of trading prices of oil and gas companies, which typically corresponds to changes in commodity prices, and the fact that the fixed exchange ratio, by its nature, would not adjust upwards to compensate for declines, or downwards to compensate for increases, in Chevron’s stock price prior to completion of the merger; and that the terms of the merger agreement did not include “collar” provisions or stock-price-based termination rights that would be triggered by a decrease in the value of the equity component of the merger consideration attributable to the Chevron stock price; | |
• | the interests of certain of Unocal’s officers and directors described under “Interests of Unocal Directors and Executive Officers in the Merger”; | |
• | the restrictions on the conduct of Unocal’s business prior to the consummation of the merger, requiring Unocal to conduct its business in the ordinary course consistent with past practice and in a manner not involving the entry by Unocal into businesses that are materially different from the businesses of Unocal on the date of the merger agreement, subject to specific limitations, which may delay or prevent Unocal from undertaking business opportunities that may arise pending completion of the merger; | |
• | the requirement that Unocal submit the merger agreement to its stockholders even if the Unocal board withdraws its recommendation, which could delay or prevent Unocal from pursuing a superior proposal if one were to become available; and | |
• | the risk, which is common in transactions of this type, that the terms of the merger agreement, including provisions relating to Unocal’s payment of a termination fee under specified circumstances, might discourage other parties that could otherwise have an interest in a business combination with, or an acquisition of, Unocal from proposing such a transaction (see “The Merger Agreement — Termination of the Merger Agreement”). |
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• | to acquire a portfolio of high quality upstream exploration and production assets that complement Chevron’s core areas worldwide, including the Asia-Pacific, Gulf of Mexico and Caspian regions; | |
• | to improve Chevron’s resource base, including through the addition of 1.75 billion barrels of oil-equivalent proved reserves; and | |
• | to achieve synergies through the rationalization of duplicate activities, highgrading the combined company’s investment programs and sharing best practices. |
• | a citizen or resident of the United States; | |
• | a corporation, or other entity taxable as a corporation for United States federal income tax purposes, created or organized under the laws of the United States or any of its political subdivisions; | |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust, or (2) has a valid election in effect under applicable Treasury regulations to be treated as a United States person; or | |
• | an estate that is subject to United States federal income tax on its income regardless of its source. |
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• | You must deliver to Unocal a written demand for appraisal of your shares of Unocal common stock before the vote on the merger agreement at Unocal’s special meeting. This demand will be sufficient if it reasonably informs Unocal of your identity and that you intend by that writing to demand the appraisal of your shares. Voting against, abstaining from voting on or failing to vote on the proposal to adopt the merger agreement will not constitute a written demand for appraisal within the meaning of Section 262. The written demand for appraisal must be in addition to and separate from any proxy you deliver or vote you cast in person. | |
• | You must not vote your shares of Unocal common stock in favor of the merger agreement. A proxy that does not contain voting instructions will, unless revoked, be voted in favor of the adoption of the merger agreement. Therefore, if you vote by proxy and wish to exercise appraisal rights, you must vote against the adoption of the merger agreement or mark your proxy card to indicate that you abstain from voting on the adoption of the merger agreement. | |
• | You must continuously hold your shares of Unocal common stock from the date of making the demand through the completion of the merger. If you are the record holder of shares of Unocal common stock on the date the written demand for appraisal is made but you thereafter transfer those shares prior to the completion of the merger, you will lose any right to appraisal in respect of those shares. |
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• | reviewed certain publicly available financial statements and other business and financial information of Unocal and Chevron; | |
• | reviewed certain internal financial statements and other financial and operating data, including internal oil and gas reserve and production estimates, concerning Unocal prepared by the management of Unocal; | |
• | reviewed certain financial projections prepared by the management of Unocal; | |
• | discussed the past and current operations and financial condition and the prospects of Unocal, including internal oil and gas reserve and production estimates, with senior management of Unocal; | |
• | reviewed certain internal financial statements and other financial and operating data, including internal oil and gas production estimates, concerning Chevron prepared by the management of Chevron; | |
• | reviewed certain financial projections prepared by the management of Chevron; | |
• | discussed the past and current operations and financial condition and the prospects of Chevron, including internal oil and gas production estimates, with senior management of Chevron; | |
• | reviewed the pro forma impact of the merger on Chevron’s earnings per share, cash flow per share, return on capital employed, and oil and gas reserves and production; | |
• | reviewed the reported prices and trading activity for Unocal Common Stock and for Chevron Common Stock; | |
• | compared the financial performance of Unocal and the prices and trading activity of Unocal Common Stock with that of certain other comparable publicly-traded companies and their securities; | |
• | compared the financial performance of Chevron and the prices and trading activity of Chevron Common Stock with that of certain other comparable publicly-traded companies and their securities; |
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• | reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions; | |
• | reviewed certain reserve reports prepared by Unocal; | |
• | discussed certain information prepared by the management of Unocal relating to strategic, financial and operational benefits anticipated from the merger and the strategic rationale for the merger with senior management of Unocal; | |
• | participated in discussions among representatives of Unocal, Chevron and certain other parties; | |
• | reviewed the draft merger agreement and certain related documents; and | |
• | performed such other analyses and considered such other factors as Morgan Stanley deemed appropriate. |
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“Unaffected” Price and “Unaffected” Exchange Ratio Analysis |
Per Share Merger Consideration Value as Compared to Unocal’s Common Stock Price: | ||||||||||||||||||||||||||||||||||||
Consideration | 10 Day | 30 Day | 60 Day | 90 Day | LTM | LTM | LTM | |||||||||||||||||||||||||||||
Value(1) | 4/1/05 | Unaffected(2) | Avg. | Avg. | Avg. | Avg. | High | Low | Avg. | |||||||||||||||||||||||||||
$62.07 | (3.5 | )% | 13.3 | % | 1.6 | % | 5.7 | % | 16.9 | % | 24.4 | % | (3.5 | )% | 81.2 | % | 45.7 | % |
(1) | As of April 1, 2005. |
(2) | Calculation of “unaffected” price of $54.77 described in Unaffected Price and Unaffected Exchange Ratio Analysis paragraph above. |
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Implied Merger Exchange Ratio as Compared to Period Average Exchange Ratio: | ||||||||||||||||||
Implied | ||||||||||||||||||
Merger | ||||||||||||||||||
Exchange | 10 Day | 30 Day | 60 Day | 90 Day | LTM | LTM | LTM | |||||||||||
Ratio(1) | 4/1/05 | Unaffected(2) | Avg. | Avg. | Avg. | Avg. | High | Low | Avg | |||||||||
$62.07 | (3.5)% | 29.3% | 1.0% | 5.8% | 12.2% | 16.7% | (3.5)% | 41.8% | 26.2% |
(1) | As of April 1, 2005. |
(2) | Calculation of “unaffected” exchange ratio of 0.8096x described in Unaffected Price and Unaffected Exchange Ratio Analysis paragraph above. |
Analyst Price Targets |
Comparable Company Analysis |
• | Amerada Hess Corp. | |
• | Anadarko Petroleum Corp. | |
• | Apache Corp. | |
• | Burlington Resources Inc. | |
• | Devon Energy Corp. | |
• | EOG Resources Inc. | |
• | Marathon Oil Corp. | |
• | Occidental Petroleum Corp. |
• | the per share price divided by 2005 and 2006 estimated cash flow per share | |
• | the per share price divided by 2005 estimated earnings per share | |
• | the aggregate trading value divided by 2005 estimated EBITDAX |
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Comparable Companies | ||||||||||||
Metric | Range of Multiples | Average | Unocal | |||||||||
Price/2005E Earnings | 10.3x - 17.1 | x | 12.0 | x | 13.5x | |||||||
Price/2005E Cash Flow | 4.6x - 6.9 | x | 5.6 | x | 6.3x | |||||||
Price/2006E Cash Flow | 4.3x - 6.7 | x | 5.6 | x | 6.5x | |||||||
Aggregate Value/2005E EBITDAX | 4.8x - 6.6 | x | 5.3 | x | 5.2x |
• | BP plc | |
• | ConocoPhillips | |
• | Eni SpA | |
• | ExxonMobil Corp. | |
• | Royal Dutch/ Shell Group | |
• | Total S.A. |
• | the per share price divided by 2005 and 2006 estimated earnings per share | |
• | the per share price divided by 2005 estimated cash flow per share | |
• | The aggregate market value divided by 2005 estimated EBITDAX |
Comparable Companies | ||||||||||||
Metric | Range of Multiples | Average | Chevron | |||||||||
Price/ 2005E Earnings | 9.3x - 14.9 | x | 12.3 | x | 11.0x | |||||||
Price/ 2006E Earnings | 10.5x - 15.1 | x | 13.1 | x | 12.2x | |||||||
Price/ 2005E Cash Flow | 6.0x - 10.5 | x | 7.6 | x | 7.6x | |||||||
Aggregate Value/ 2005E EBITDAX | 4.7x - 7.0 | x | 5.9 | x | 5.0x |
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Sum-of-the-Parts Analysis |
• | Discounted Cash Flow Method. Morgan Stanley analyzed each individual Unocal business using a discounted cash flow analysis. This discounted after-tax unlevered free cash flow analysis, calculated as of December 31, 2004, was based on company projections. Additionally, Morgan Stanley performed sensitivities, including production profiles and oil prices, on the projections provided by Unocal management. The range of discount rates utilized in this analysis was 8% to 12%, which was chosen based upon an analysis of the weighted average cost of capital of Unocal and other comparable companies. | |
• | Multiple Method. For selected business units, Morgan Stanley also reviewed and compared various actual and forecasted financial and operating information of these businesses with that of various precedent transactions which shared certain characteristics with these businesses. Based upon the aggregate transaction value divided by proved reserves in these precedent transactions and Morgan Stanley’s experience in mergers and acquisitions in the energy industry, Morgan Stanley estimated reference valuation metric ranges for these business units. Morgan Stanley then calculated the potential implied after-tax valuation range for these business units. |
• | 1/26/2005 — Cimarex/ Magnum Hunter | |
• | 12/16/2004 — Noble/ Patina | |
• | 6/9/2004 — Petro-Canada/ Prima Energy | |
• | 5/24/2004 — Forest/ Wiser | |
• | 5/4/2004 — Pioneer/ Evergreen |
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• | 4/15/2004 — EnCana/ Tom Brown | |
• | 4/7/2004 — Kerr-McGee/ Westport Resources | |
• | 2/12/2004 — Plains/ Nuevo | |
• | 2/24/2003 — Devon/ Ocean | |
• | 9/4/2001 — Devon/ Anderson Exploration | |
• | 8/14/2001 — Devon/ Mitchell Energy | |
• | 7/10/2001 — Amerada Hess/ Triton Energy | |
• | 5/29/2001 — Conoco/ Gulf Canada Resources | |
• | 5/14/2001 — Kerr-McGee/ HS Resources | |
• | 5/7/2001 — Williams/ Barrett | |
• | 12/22/2000 — Marathon/ Pennaco | |
• | 12/21/2000 — ENI SpA; Agip/ LASMO | |
• | 5/26/2000 — Devon Energy/ Santa Fe Snyder | |
• | 4/3/2000 — Anadarko/ Union Pacific Resources |
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Unvested Options at | ||||||||||||||||
June 20, 2005 | ||||||||||||||||
Number of | ||||||||||||||||
Shares | Outstanding | Outstanding | ||||||||||||||
Underlying | Weighted | Restricted Stock at | Performance Shares | |||||||||||||
Name | Options | Average Price | June 20, 2005 | at June 20, 2005 | ||||||||||||
Mr. Williamson | 113,475 | $ | 49.31 | 107,373 | 150,729 | |||||||||||
Mr. Bryant | 200,000 | 46.44 | 19,692 | 16,342 | ||||||||||||
Mr. Dallas | 18,913 | 49.31 | 19,554 | 39,291 | ||||||||||||
Mr. Gillespie | 29,091 | 44.64 | 21,284 | 16,560 | ||||||||||||
Mr. Howard | 25,287 | 40.08 | 13,418 | 21,981 |
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• | Employees with less than five years of service in the Unocal Retirement Plan would receive four months of base pay plus three-fourths of a month of base pay for every year of service. | |
• | Employees with five or more years of service in the Unocal Retirement Plan would receive four months of base pay, plus an enhanced retirement benefit which offsets the remainder of the severance payment. The enhanced retirement benefit would add three years to each of the employee’s service and age, plus the benefit would utilize the highest consecutive 12 months of pensionable pay in the most recent 120 months of service. |
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• | a combination of 0.7725 of a share of Chevron common stock and $16.25 in cash; | |
• | 1.03 shares of Chevron common stock; or | |
• | $65 in cash. |
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Explanation of the Proration of the Stock and Cash Elections |
Proration If Too Much Cash Is Elected |
• | Step 1: Derive the available cash election amount: The available cash election amount is the aggregate cash amountminusthe amount of cash to be paid in respect of shares of Unocal common stock as to which a valid election for the mixed merger consideration was made or is deemed to have been made. | |
• | Step 2: Derive the elected cash amount: The elected cash amount is an amount equal to $65.00multiplied bythe number of shares of Unocal common stock as to which a valid all-cash election was made. | |
• | Step 3: Derive the cash proration factor: The cash proration factor equals the available cash election amountdivided bythe elected cash amount. | |
• | Step 4: Derive the prorated cash merger consideration: The prorated cash merger consideration is an amount in cash equal to $65.00multiplied bythe cash proration factor. | |
• | Step 5: Derive the prorated stock merger consideration: The prorated stock merger consideration is a number of shares of Chevron common stock equal to (x) 1.03multiplied by(y) a number equal to 1minusthe cash proration factor. | |
• | Step 6: Determine the stock and cash mix: Each share of Unocal common stock as to which a valid all-cash election was made will be converted into the right to receive the prorated cash merger consideration and the prorated stock merger consideration. |
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Proration If Too Many Shares of Chevron Common Stock Are Elected |
• | Step 1: Derive the available cash election amount: As stated above, the available cash election amount is the aggregate cash amountminusthe amount of cash to be paid in respect of shares of Unocal common stock as to which a valid election for mixed merger consideration was made or is deemed to have been made. | |
• | Step 2: Derive the elected cash amount: As stated above, the elected cash amount is an amount equal to $65.00multiplied bythe number of shares of Unocal common stock as to which a valid all-cash election was made. | |
• | Step 3: Derive the excess cash amount: The excess cash amount is the difference between the available cash amount and the elected cash amount. | |
• | Step 4: Derive the prorated cash merger consideration: The prorated cash merger consideration is an amount in cash equal to the excess cash amountdivided bythe number of shares of Unocal common stock as to which a valid all-stock election was made. | |
• | Step 5: Derive the stock proration factor: The stock proration factor is a fraction the numerator of which is equal to $65.00minus the per share prorated cash consideration calculated in Step 4 and the denominator of which is $65.00. | |
• | Step 6: Derive the prorated stock merger consideration: The prorated stock merger consideration is a number of shares of Chevron common stock equal to 1.03multiplied bythe stock proration factor. | |
• | Step 7: Determine the stock and cash mix: Each share of Unocal common stock as to which a valid all-stock election was made will be converted into the right to receive the prorated cash merger consideration and the prorated stock merger consideration. |
Explanation of Potential Adjustment to Merger Consideration |
Conversion of Shares |
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Exchange of Unocal Stock Certificates |
Treatment of Unocal Options and Equity Awards |
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• | take any action to solicit, initiate or knowingly encourage or facilitate the making of any alternative acquisition proposal involving Unocal or any inquiry with respect to an alternative acquisition proposal; | |
• | engage in discussions or negotiations with any person with respect to an alternative acquisition proposal; | |
• | disclose any nonpublic information or afford access to properties, books or records to, any person that has made, or to Unocal’s knowledge is considering making, an alternative acquisition proposal; | |
• | approve or recommend, or propose to approve or recommend, or execute or enter into any agreement relating to an alternative acquisition proposal; or | |
• | propose publicly or agree to do any of the above relating to an alternative acquisition proposal. |
• | direct or indirect acquisition or purchase of a business or assets of Unocal or any of its subsidiaries that constitutes, either individually or in the aggregate, 20 percent or more of the net revenue, net income or assets of Unocal and its subsidiaries, taken as a whole; |
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• | direct or indirect acquisition or purchase of 20 percent or more of any class of equity securities of Unocal or of any of its subsidiaries whose business constitutes 20 percent or more of the net revenue, net income or assets of Unocal and its subsidiaries, taken as a whole; | |
• | tender offer or exchange offer that, if completed, would result in any person owning 20 percent or more of any class of equity securities of Unocal, or any of its subsidiaries whose business constitutes 20 percent or more of the net revenue, net income or assets of Unocal and its subsidiaries, taken as a whole; or | |
• | merger, consolidation, business combination, joint venture, partnership, recapitalization, liquidation, dissolution or similar transaction involving Unocal or any of its subsidiaries whose business constitutes 20 percent or more of the net revenue, net income or assets of Unocal and its subsidiaries, taken as a whole. |
• | furnish information and access, but only in response to a request, to a person making an alternative acquisition proposal to Unocal’s board of directors that was not solicited, initiated or knowingly encouraged by Unocal or any of its affiliates or any director, employee, representative or agent of Unocal or any of its subsidiaries; and | |
• | participate in discussions and negotiate with the person making the alternative acquisition proposal. |
• | the Unocal board concludes in good faith, after receipt of the advice of a financial advisor of nationally recognized reputation and outside legal counsel, that there is a reasonable likelihood that the alternative acquisition proposal will result in a superior proposal and, taking into account any revised terms proposed by Chevron, that doing so is necessary for the Unocal board to comply with its fiduciary duties to Unocal’s stockholders; | |
• | Unocal complies with its obligations to keep Chevron informed as to the details of such offer, to convene and hold the Unocal stockholder meeting and to recommend the approval and adoption of the merger agreement and the merger; and | |
• | the Unocal board receives from the person making the alternative acquisition proposal an executed confidentiality agreement whose material confidentiality terms are, in all material respects, no less favorable to Unocal and no less restrictive to the person making the alternative acquisition proposal than those contained in the existing confidentiality agreement between Unocal and Chevron, and any information provided to such person also has been provided or is provided promptly to Chevron. |
• | on terms that Unocal’s board determines, in its good faith judgment (after consultation with, and taking into account the advice of, a financial advisor of nationally recognized reputation and outside legal counsel), taking into account all the terms and conditions of that alternative acquisition proposal, including any break-up fees, expense reimbursement provisions and conditions to consummation, as well as any revisions to the terms of the merger or the merger agreement proposed by Chevron, are more favorable to Unocal and its stockholders than the merger; and |
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• | that constitutes a transaction that is reasonably likely to be consummated on the terms proposed, taking into account all legal, financial, regulatory and other aspects of that proposal. |
• | the Unocal board determines in its good faith judgment, after consulting with outside legal counsel, that failure to withdraw or modify its recommendation would be inconsistent with fulfilling its fiduciary duty to stockholders; | |
• | Unocal has given Chevron advance written notice of its decision to withdraw or modify its recommendation, including the reasons for the change and, if the decision relates to an alternative acquisition proposal, the notice specifies the material terms and conditions of that proposal and identifies the person making the proposal; | |
• | Unocal has given Chevron the opportunity, for at least three business days after delivery of that notice, to propose revisions to the merger agreement or to make another proposal in response to an alternative acquisition proposal and negotiated in good faith with Chevron with respect to those revisions or that other proposal; | |
• | if the withdrawal or modification relates to an alternative acquisition proposal, that proposal is a superior proposal; and | |
• | Unocal has complied with its obligations under the no solicitation covenant described above under “No Solicitation.” |
• | amend its charter or bylaws or the Unocal stockholder rights agreement; | |
• | adopt a plan of liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; | |
• | issue or sell any of its capital stock or any securities convertible into its capital stock; | |
• | effect a stock split, combination or reclassification or declare any dividends, other than regular quarterly cash dividends consistent with past practice and intra-group dividends among Unocal and its subsidiaries; | |
• | redeem or repurchase any of its capital stock; | |
• | amend the terms of any outstanding options to purchase shares of Unocal common stock or of any outstanding restricted stock, stock units or stock appreciation rights; | |
• | make or authorize any capital expenditures in excess of $50 million; |
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• | increase the compensation or benefits of any director, officer or employee or enter into, adopt, extend or renew employment agreements or benefit plans; | |
• | acquire a material amount of assets or property, except in the ordinary course consistent with past practice; | |
• | sell, lease, license, encumber or otherwise dispose of any material assets or property, except pursuant to existing contracts or commitments or except in the ordinary course consistent with past practice and in no event in an amount in exceeding $50 million in the aggregate; | |
• | incur any indebtedness for borrowed money, except for intra-group indebtedness among Unocal and its subsidiaries and additional short-term debt not to exceed $500 million in the aggregate; | |
• | guarantee or assume indebtedness for borrowed money, or enter into any “keep well” or other arrangement to maintain any financial condition of another person, other than in the ordinary course consistent with past practice; | |
• | modify, amend or terminate any material contract or enter into an agreement that would constitute a material contract, other than in the ordinary course of business consistent with past practice; | |
• | settle or compromise any claim, demand, lawsuit or regulatory proceeding in an amount in excess of $20 million or that is otherwise qualitatively material to Unocal (provided that Chevron will not unreasonably withhold its consent to any such settlement or compromise); | |
• | change any method of financial accounting or financial accounting practice (except for changes that are not material or are required by concurrent changes in GAAP or applicable law); | |
• | enter into any material joint venture, partnership or similar arrangement or make any loan, capital contribution or advance to or investment in any other person, except in the ordinary course consistent with past practice or in an amount not exceeding $10 million; | |
• | take any action which would limit Chevron’s or Unocal’s freedom to license, cross-license or otherwise dispose of any of Unocal’s intellectual property; | |
• | amend or waive any provisions of any standstill agreement; | |
• | except as required by law, make or change any tax election, settle any tax audit or file any amended tax return, in each case, that is reasonably likely to result in an increase to a tax liability, if that increase is material to Unocal and its subsidiaries taken as a whole; | |
• | enter into any agreement that limits (other than in an insignificant manner) the ability of Unocal or its subsidiaries or would limit (other than in an insignificant manner) the ability of Chevron or its subsidiaries after the merger to compete in any line of business or geographic area. For this purpose, it is understood that any restriction that by its terms does not extend more than six months beyond the effective time of the merger will be considered insignificant; or | |
• | take any action that would prevent, materially delay or materially impede the consummation of the merger. |
• | take all actions and do all things necessary or advisable under the merger agreement and applicable laws to complete the merger and the other transactions contemplated by the merger agreement as soon as practicable, including preparing and filing all necessary regulatory filings; and | |
• | obtain as soon as practicable all required regulatory or third-party approvals for consummation of the merger. |
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• | avoid the entry of, or to have vacated or terminated, any decree, order or judgment that would restrain, prevent or delay the closing, on or before the end date, including defending through litigation on the merits any claim asserted in any court by any person; and | |
• | avoid or eliminate every impediment under any antitrust, competition or trade regulation law that may be asserted by any governmental authority with respect to the merger so that the closing can occur as soon as reasonably possible. This includes proposing, negotiating, committing to and effecting the sale, divestiture or disposition of businesses, product lines or assets of Chevron, Unocal and their respective subsidiaries; and otherwise taking or committing to take actions that after the closing date would limit Chevron’s or its subsidiaries’ freedom of action with respect to, or its or their ability to retain, one or more of the businesses, product lines or assets of Chevron, Unocal and their subsidiaries, in each case as may be required in order to avoid a government order that would prevent or materially delay the closing. |
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• | for six years after the merger becomes effective, it will cause the surviving corporation to indemnify, to the greatest extent permitted by law as of April 4, 2005, the individuals who on or prior to the effective time of the merger were directors, officers and employees of Unocal or its subsidiaries with respect to all acts or omissions in those capacities occurring prior to the effective time of the merger; | |
• | it will cause the surviving corporation to honor all indemnification agreements with the individuals who on or prior to the effective time of the merger were directors, officers and employees in effect as of April 4, 2005; and | |
• | for six years after the effective time of the merger, it will provide officers’ and directors’ liability insurance covering acts or omissions occurring prior to the effective time of the merger by each person currently covered by Unocal’s officers’ and directors’ liability insurance policy, on terms no less favorable than the Unocal policy in effect as of April 4, 2005, except that Chevron will be obligated to pay only up to 300 percent of the annual premium paid by Unocal for such insurance as of April 4, 2005. |
• | corporate authorization to enter into the merger agreement and to consummate the transactions contemplated by the merger agreement; | |
• | the stockholder vote and governmental approvals required in connection with the contemplated transactions; | |
• | absence of any breach of organizational documents, law or certain material agreements as a result of the contemplated transactions; | |
• | capitalization; |
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• | ownership of subsidiaries; | |
• | filings with the SEC; | |
• | financial statements; | |
• | accuracy of information provided for inclusion in this proxy statement/ prospectus; | |
• | disclosure controls and procedures and internal control over financial reporting; | |
• | absence of material changes since December 31, 2004; | |
• | absence of defaults and violations; | |
• | absence of undisclosed material liabilities; | |
• | litigation; | |
• | tax matters; | |
• | employee benefits matters; | |
• | compliance with laws, including the Foreign Corrupt Practices Act of 1977, as amended; | |
• | environmental matters; | |
• | title to properties; | |
• | material contracts and contracts relating to Unocal’s exploration and production operations; | |
• | intellectual property; | |
• | confidentiality and standstill agreements; | |
• | finders’ or advisors’ fees; | |
• | inapplicability of the Delaware anti-takeover statute; and | |
• | amendment of the Unocal stockholder rights plan to render it inapplicable to the merger. |
• | corporate authorization to enter into the merger agreement and to consummate the transactions contemplated by the merger agreement; | |
• | the governmental approvals required in connection with the contemplated transactions; | |
• | absence of any breach of organizational documents, law or certain material agreements as a result of the contemplated transactions; | |
• | capitalization; | |
• | filings with the SEC; | |
• | financial statements; | |
• | accuracy of information provided for inclusion in this proxy statement/ prospectus; | |
• | disclosure controls and procedures and internal control over financial reporting; | |
• | absence of material changes since December 31, 2004; | |
• | absence of undisclosed material liabilities; | |
• | litigation; | |
• | compliance with laws; |
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• | tax matters; and | |
• | capitalization of Merger Sub. |
• | approval and adoption by the Unocal stockholders of the merger agreement and the merger; | |
• | expiration of the HSR Act waiting period; | |
• | approval by the European Commission of the contemplated transactions (if applicable); | |
• | absence of any legal prohibition on completion of the merger; | |
• | Chevron’s registration statement on Form S-4, which includes this proxy statement/ prospectus, being effective and not subject to any stop order by the SEC; | |
• | approval for the listing on the New York Stock Exchange of the shares of Chevron common stock to be issued in the merger; | |
• | absence of any condition to approval of the merger by the U.S. Federal Trade Commission or the U.S. Department of Justice that would result in or be reasonably likely to result in a substantial detriment; | |
• | absence of any proceeding seeking to limit Chevron’s ownership of Unocal or to compel divestiture of assets, in either case that would result in or be reasonably likely to result in a substantial detriment; | |
• | absence of any statute, rule or other governmental order applicable to the merger that would result in or be reasonably likely to result in a substantial detriment; | |
• | receipt of all material regulatory approvals for the merger on terms that are not reasonably likely to result in a substantial detriment; and | |
• | performance in all material respects by the other party of the obligations required to be performed by it at or prior to closing. |
• | accuracy as of closing of the representations and warranties made by the other party to the extent specified in the merger agreement; | |
• | receipt by that party of an opinion of counsel to the effect that the merger will qualify as a reorganization under Section 368(a) the Code; and | |
• | absence of any event, occurrence, development or state of circumstances which, individually or in the aggregate, would be reasonably likely to have a material adverse effect on the other party. |
• | any changes in general United States or global economic conditions or | |
• | any changes affecting the oil and gas industry in general (including changes to commodity prices). |
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• | by mutual written consent of Chevron and Unocal; | |
• | by either Chevron or Unocal if: |
– | the merger has not been completed by December 31, 2005 (or if the reason for not closing by December 31, 2005 is that the regulatory conditions specified in the merger agreement have not been satisfied by that date, August 31, 2006) (but neither Chevron nor Unocal can terminate the merger agreement for this reason if its failure to fulfill in any material respect its obligations under the merger agreement has resulted in the failure to complete the merger); | |
– | the approval of Unocal stockholders has not been obtained by reason of the failure to obtain the required vote at the Unocal special meeting of stockholders or at any adjournment of that special meeting; or | |
– | there is a permanent legal prohibition to closing the merger. |
• | by Chevron if the Unocal board fails to recommend the merger or withdraws or modifies in a manner adverse to Chevron its approval or recommendation of the merger, Unocal breaches its obligation to call the Unocal stockholder meeting or Unocal has materially breached its obligations described above under “No Solicitation” to the material detriment of Chevron. | |
• | by Chevron or Unocal if the other party has breached any of its representations, warranties, covenants or obligations under the merger agreement, and that breach would result in the failure to satisfy certain specified closing conditions and is incapable of being cured, or, if capable of being cured, has not been cured within 30 days after the party alleged to have breached receives written notice of the breach. |
• | Chevron terminates the merger agreement because the Unocal board fails to recommend the merger to its stockholders, because the Unocal board otherwise changes or proposes publicly to change its recommendation of the merger to stockholders, because Unocal fails to comply with its obligation to hold the special meeting or to obtain SEC clearance for this proxy statement/ prospectus or because Unocal has materially (and to the material detriment of Chevron) breached its obligations under the merger agreement with respect to non-solicitation of other acquisition proposals as described above; | |
• | either Chevron or Unocal terminates the merger agreement because Unocal’s stockholders fail to approve the merger and, prior to the Unocal stockholders’ meeting but after April 4, 2005, an alternative acquisition proposal was made known to Unocal (including any of its agents or representatives) and communicated publicly or to any substantial number of Unocal stockholders or was made directly to Unocal’s stockholders or any person publicly announced an intention (whether or not conditional) to make an alternative acquisition proposal; or |
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• | after April 4, 2005, an alternative acquisition proposal is made known to Unocal (including any of its agents or representatives) and communicated publicly or to any substantial number of Unocal stockholders or is made directly to Unocal’s stockholders by any person, or any person publicly announces an intention (whether or not conditional) to make an alternative acquisition proposal, and after any such event the merger agreement is terminated by either Chevron or Unocal because the merger is not completed by the end date, so long as the Unocal stockholder approval has not been obtained. |
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• | to consider and vote upon a proposal to approve and adopt the merger agreement; | |
• | to vote upon an adjournment or postponement of the special meeting, if necessary, to solicit additional proxies; and | |
• | to transact any other business as may properly be brought before the special meeting or any adjournment or postponement of the special meeting. |
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• | By Mail. You may vote by signing, dating and returning your proxy card in the enclosed pre-addressed envelope; | |
• | By Telephone. You may vote by telephone (from U.S., Puerto Rico and Canada only) using the toll-free number listed on the proxy card. Please have your proxy card in hand when you call. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. Telephone voting facilities will be available 24 hours a day and will close at 11:59 p.m., Eastern Time, on the day before the special meeting, which is currently scheduled for August 10, 2005; | |
• | By Internet. You may vote electronically on the Internet, using the web site listed on the proxy card. Please have your proxy card in hand when you log onto the web site. Internet voting facilities will be available 24 hours a day and will close at 11:59 p.m., Eastern Time, on the day before the special meeting, which is currently scheduled for August 10, 2005; or | |
• | In Person. You may vote in person at the special meeting. |
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• | By Mail. You may vote by signing, dating and returning your proxy card in the enclosed pre-addressed envelope; | |
• | By Methods Listed on Proxy Card. Please refer to your voting card or other information forwarded by your bank, broker or other holder of record to determine whether you may vote by telephone or electronically on the Internet, following the instructions on the card or other information provided by the record holder; or | |
• | In Person With a Proxy from the Record Holder. A street-name stockholder who wishes to vote at the meeting will need to obtain a legal proxy from his or her bank or brokerage firm. Please consult the voting form sent to you by your bank or broker to determine how to obtain a legal proxy in order to vote in person at the annual meeting. |
• | sending a written notice to the Corporate Secretary of Unocal, 2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245, by the close of business on the day before the special meeting, which is currently scheduled for August 10, 2005, indicating you are revoking your earlier proxy; | |
• | completing, signing and timely submitting a new proxy card to the addressee indicated on the pre-addressed envelope enclosed with your initial proxy card by the close of business on the day before the special meeting, which is currently scheduled for August 10, 2005. The latest dated and signed proxy actually received by such addressee before the special meeting will be counted, and any earlier proxies will be considered revoked; or | |
• | attending the special meeting and voting in person. |
• | subsequently recording a different vote by telephone or Internet; | |
• | signing and returning a proxy card after your last telephone or Internet vote; or | |
• | attending the special meeting and voting in person. |
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• | If you fail to properly provide any instructions as to how you want the shares allocated to your plan account to be voted, your plan shares will be voted ratably for and against the adoption of the merger agreement, in the same proportion as for those plan shares for which specific directions have been received. | |
• | If you return a properly signed voting instruction form but do not specifically indicate how you want your shares to be voted on the adoption of the merger agreement, your plan shares will be voted FOR the adoption of the merger agreement. | |
• | If you indicate you wish to abstain, your shares will not be voted, which will have the same effect as a vote AGAINST the adoption of the merger agreement. |
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Unocal Stockholder Rights | Chevron Stockholder Rights | |||
Authorized Capital Stock | Unocal’s certificate of incorporation authorizes Unocal to issue 850,000,000 shares consisting of 750,000,000 shares of common stock and 100,000,000 shares of preferred stock. | Chevron’s certificate of incorporation authorizes Chevron to issue 4,100,000,000 shares consisting of 4,000,000,000 shares of common stock and 100,000,000 shares of preferred stock. | ||
Unocal’s board of directors has the authority to issue one or more series of preferred stock, having terms designated by Unocal’s board. As of March 31, 2005, there were 271,654,896 shares of common stock and no shares of preferred stock outstanding. | Chevron’s board of directors has the authority to issue one or more series of preferred stock, having terms designated by Chevron’s board. As of March 31, 2005, there were 2,098,220,174 shares of common stock and no shares of preferred stock outstanding. | |||
Unocal’s common stock is listed on the New York Stock Exchange. | Chevron’s common stock is listed on the New York Stock Exchange and the Pacific Exchange. | |||
Voting Rights | Each share of Unocal’s common stock entitles its holder to one vote on all matters on which stockholders are entitled to vote. | Each share of Chevron’s common stock entitles its holder to one vote on all matters on which stockholders are entitled to vote. | ||
Conversion Rights | Unocal common stock is not subject to any conversion rights. | Chevron common stock is not subject to any conversion rights. | ||
Stockholder Proposals | Unocal’s bylaws provide that any stockholder who intends to bring a matter before the stockholders’ meeting must deliver written notice of his or her intent to do so to Unocal’s secretary. For an annual meeting, the secretary must receive the notice no later than 90 days prior to the meeting, unless there has been an amendment to the bylaws since the last annual meeting changing the date of the annual meeting, in which case the notice must be delivered no later than 90 days prior to the meeting or the tenth day following the date of public disclosure of the new meeting date. See the subsection entitled “Nomination of Directors” below for more information. | Chevron’s bylaws do not contain advance notice provisions for stockholder proposals. Chevron’s restated certificate of incorporation, however, precludes taking action on any proposal at a stockholder meeting that is not included in the proxy statement for that meeting (unless this requirement is waived by the board of directors). In practice, this means that stockholder proposals must comply with the submission standards under federal proxy rules and must be submitted to Chevron consistent with the company’s deadline set forth in the proxy statement for the prior year’s annual meeting of stockholders. | ||
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Unocal Stockholder Rights | Chevron Stockholder Rights | |||
In any case, the business must be a proper matter for stockholder action and the notice must include: • a brief description of each matter desired to be brought before the meeting; • the name and address of the proposing stockholder (if the stockholder is a holder of record, they must be as in Unocal’s stock ownership records); • the class and number of shares of Unocal that are beneficially owned by the stockholder presenting the proposed business (and if the stockholder is not a holder of record, proof of beneficial ownership); • a description of any material interest of the proponent in the business being brought; and • a statement as to whether the proponent intends to deliver a proxy statement and a form of proxy to a sufficient number of stockholders. | ||||
Nomination of Directors | Unocal’s bylaws provide that a Unocal stockholder may nominate one or more persons for election as directors at an annual or special meeting called for the election of directors, but only if the stockholder delivers written notice of his or her intent to make the nomination to Unocal’s secretary. The timing requirements for receiving the notice are similar to those for receiving notice of stockholder proposals described above. The notice must include: • such information concerning each nominee as would be required under SEC rules to be included in a proxy statement soliciting proxies for the election of the nominee as a director; and • a written and signed consent of each nominee to serve as a Unocal director if elected. In addition, if the number of directors to be elected to the board of directors is increased and there is no public announcement naming all of the | Chevron’s board of directors proposes a slate of nominees for director each year. Chevron’s Nominating and Governance Committee identifies, investigates and recommends prospective directors to the board. Stockholders may recommend a nominee by writing to the corporate secretary, specifying the nominee’s name and qualifications for board membership. All recommendations are brought to the attention of the Nominating and Governance Committee. | ||
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Unocal Stockholder Rights | Chevron Stockholder Rights | |||
nominees for director or specifying the size of the increased board of directors at least 100 days prior to the annual meeting, a stockholder’s notice will be deemed to be timely received, but only with respect to the nominees for any new positions created by such increase, if it is delivered on or prior to the tenth day following the date of public disclosure of the meeting date. For a special meeting, nominations of persons to be elected to the board of directors by or at the direction of the board of directors or a nominating stockholder must be made by notice to the secretary no later than the close of business on the later of the 90th day prior to such special meeting or the tenth day following the date of public disclosure of the meeting date. | ||||
Advance Notice of Stockholder Meetings | Unocal’s bylaws provide that written notice of meetings shall be given to stockholders not less than 10 or more than 60 days prior to the meeting. | Chevron’s certificate of incorporation provides that written notice of meetings shall be given to stockholders not less than 30 days prior to the meeting, together with a proxy statement. | ||
Calling Special Meetings of Stockholders | Unocal’s restated certificate of incorporation provides that a special meeting of stockholders can be called at any time by the board, or by a majority of the board, or by a committee of the board duly designated by the board as provided in a resolution of the board. | Chevron’s bylaws provide that a special meeting of stockholders may be called by the board or the chairman of the board, and shall be called by the chairman of the board or the secretary at the request in writing of at least one-third of the members of the board. | ||
Quorum | Unocal’s bylaws provide that the holders of one-third of the outstanding shares of stock entitled to vote shall constitute a quorum for transacting business at a meeting of stockholders. | Chevron’s bylaws provide that a majority of the outstanding shares of stock entitled to vote shall constitute a quorum for action at a meeting of stockholders. | ||
Number of Directors | Unocal’s bylaws provide that the number of directors shall be 10 and the Unocal certificate of incorporation provides that any by-law amendment increasing or reducing the authorized number of directors must be adopted by the affirmative vote of not less than 75% of the directors. Unocal’s board currently consists of 10 directors. | Chevron’s bylaws provide that the number of directors will be determined by resolution of the board approved by at least a majority of the directors then in office. Chevron’s board currently consists of 12 directors. | ||
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Unocal Stockholder Rights | Chevron Stockholder Rights | |||
Classification of Board of Directors | Unocal’s restated certificate of incorporation and bylaws provide that Unocal’s board of directors is to be divided into three classes, with the classes having an equal or near equal number of directors and the directors of each class entitled to serve for three-year terms. Unocal’s board of directors currently has three outstanding classes, two composed of three members and one composed of four members. | Chevron does not have a classified board. Chevron’s bylaws require that all directors be elected at each annual meeting of stockholders for a term of one year. | ||
Removal of Directors | Neither Unocal’s bylaws nor its restated certificate of incorporation contains any express provisions with respect to the removal of directors; however, Delaware law provides that directors of a corporation with a classified board may only be removed for cause. | Chevron stockholders may remove directors with or without cause by the affirmative vote of the majority of stockholders entitled to vote in the election of directors. | ||
Filling of Board Vacancies | Unocal’s bylaws provide that any vacancy occurring on the board of directors may be filled by a majority of the remaining directors or by a sole remaining director, each such director to hold office until a successor is elected at an annual or special meeting of the stockholders. | Chevron’s bylaws provide that any vacancy occurring on the board of directors may be filled by a majority of the directors then in office, each such director to hold office until a successor is elected at an annual or special meeting of the stockholders. | ||
Action by Written Consent | Unocal’s restated certificate of incorporation provides that no action of stockholders may be taken by written consent without a meeting. | Chevron’s restated certificate of incorporation provides that action which may be taken at an annual or special meeting and which requires the approval of at least a majority of • the voting power of the securities present at the meeting and entitled to vote on the action, or • the shares of common stock present at the meeting, may not be taken except by vote at a meeting. | ||
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Unocal Stockholder Rights | Chevron Stockholder Rights | |||
Amendment of Certificate of Incorporation | The affirmative vote of at least 75% of the voting power of Unocal’s outstanding voting stock is required to amend various provisions of the Unocal restated certificate of incorporation, including provisions relating to • the adoption, amendment or repeal of bylaws, • the classified board, • business combinations, • actions by stockholders by written consent without a meeting, • the call of special meetings, and • amendments to the restated certificate of incorporation. | The affirmative vote of at least two-thirds of the voting power of Chevron’s outstanding voting stock is required to amend various provisions of the Chevron restated certificate of incorporation, including provisions relating to • prior notice of stockholders’ meetings, and • the fairness committee. | ||
Amendment of Bylaws | Unocal’s bylaws may be amended by a vote of 75% of the outstanding stock entitled to vote or by the board of directors. However, any bylaw amendment by the board of directors regarding an increase or decrease to the number of directors or regarding the amendment of bylaws requires a resolution adopted by at least 75% of the directors. | Chevron’s bylaws may be amended by the affirmative vote of the holders of a majority of the outstanding shares of common stock, or by a resolution of the board approved by at least a majority of the directors then in office. However, special restrictions apply to the amendment of the bylaw provisions governing change in control benefit protection. | ||
Stockholder Rights Plan | Unocal’s stockholder rights plan grants stockholders one preferred stock purchase right for each share of common stock held. Ten business days after a public announcement that a person has acquired beneficial ownership of 15% or more of Unocal’s common stock or the commencement of a tender offer that, if successful, would result in such an acquisition, each purchase right will become exercisable and entitle its holder to purchase from Unocal that number of shares of Unocal’s common stock having a market value equal to twice the $180 exercise price of the right. However, Unocal’s stockholder rights plan has been amended so that it will not apply to the merger. | Chevron does not currently have a stockholder rights plan. | ||
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Unocal Stockholder Rights | Chevron Stockholder Rights | |||
Certain Business Combinations | Unocal’s restated certificate of incorporation requires the affirmative vote of not less than 75% of the outstanding shares of Unocal’s voting stock to approve any of the following: • mergers or consolidations with a “related corporation” (as described below); • a sale or exchange of all or a substantial part of Unocal’s assets to or with a related corporation; or • the issuance or delivery of Unocal stock or other Unocal securities in exchange for any properties or assets of or securities issued by a related corporation, or in a merger of any affiliate of Unocal with or into a related corporation or its affiliates. For this purpose, a “related corporation” means any corporation that owns, together with its affiliates, more than 10% of the voting power of Unocal’s outstanding voting stock. The above 75% stockholder voting requirement does not apply: • if the transaction was approved by 75% of the directors prior to the related corporation’s acquisition of more than 10% of the total voting power of Unocal’s outstanding voting stock, or • to any transaction between Unocal and any corporation of which Unocal owns more than 50% or more of the voting stock. | Chevron’s restated certificate of incorporation provides that a fairness committee of the board of directors will be established during any period of the existence of a 10% stockholder. The fairness committee will consist of all directors serving at the time any such stockholder becomes a 10% stockholder. The fairness committee will look into the fairness to the corporation and its stockholders of transactions the committee deems “extraordinary,” which may include mergers or liquidations, transactions with major stockholders, major asset sales or recapitalizations. The fairness committee may require that the corporation’s stockholders ratify such an extraordinary transaction by the affirmative vote of two- thirds of the shares of outstanding common stock or a majority of the outstanding shares of common stock, excluding shares held by the 10% stockholder. | ||
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1. | Annual Report on Form 10-K for the year ended December 31, 2004. | |
2. | Quarterly Report on Form 10-Q for the quarter ended March 31, 2005. | |
3. | Current Reports on Form 8-K filed April 4, April 7, April 28 and May 10, 2005. | |
4. | The description of Chevron’s common stock contained in Chevron’s Current Reports on Form 8-K dated November 1, 2001 and November 19, 2002. |
1. | Annual Report on Form 10-K for the year ended December 31, 2004, except for Items 6, 7 and 8, which are superseded by the Current Report on Form 8-K dated May 26, 2005. | |
2. | Quarterly Report on Form 10-Q for the quarter ended March 31, 2005. | |
3. | Current Reports on Form 8-K filed on March 31, April 4, April 7, May 10, May 24, May 26, June 9, June 10, June 23 and June 24, 2005. | |
4. | The description of Unocal’s common stock, $1.00 par value per share, excluding that of the associated Preferred Stock Purchase Rights, set forth under the caption “Description of the Common Stock,” included in the prospectus dated September 25, 1998, of Union Oil Company of California and Unocal (File Nos. 333-58415 and 333-58415-01). | |
5. | Rights Agreement, dated as of January 5, 2000, between Unocal and Mellon Investor Services, L.L.C., as Rights Agent (incorporated by reference to Exhibit 4 to Unocal’s Current Report on Form 8-K dated January 5, 2000, File No. 1-8483), as amended by (1) Amendment to Rights Agreement, dated as of March 27, 2002 (incorporated by reference to Exhibit 10 to Unocal’s Current Report on Form 8-K dated March 27, 2002, File No. 1-8483); (2) Amendment No. 2 to |
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Rights Agreement, dated as of August 2, 2002 (incorporated by reference to Exhibit 10 to Unocal’s Current Report on Form 8-K dated August 2, 2002, File No. 1-8483); (3) Amendment No. 3 to Rights Agreement, dated as of April 1, 2003 (incorporated by reference to Exhibit 10.1 to Unocal’s Current Report on Form 10-Q for the quarter ended March 31, 2003, File No. 1-8483) and (4) Amendment No. 4 to Rights Agreement, dated as of April 4, 2005 (incorporated by reference to Exhibit 4.2 to Unocal’s Form 8-A/A for Registration of Certain Classes of Securities Pursuant to Section 12(b) dated April 7, 2005, File No. 1-8483). |
Unocal Corporation | Chevron Corporation | |
Unocal Stockholder Services 2141 Rosecrans Avenue, Suite 4000 El Segundo, CA 90245 (800) 252-2233 | Chevron Comptroller’s Department 6001 Bollinger Canyon Road — A3201 San Ramon, CA 94583-2324 (925) 842-1000 |
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ARTICLE I The Merger | A-1 | |||||||
Section 1.1 | The Merger | A-1 | ||||||
Section 1.2 | Certificate of Incorporation and Bylaws of the Surviving Corporation | A-2 | ||||||
Section 1.3 | Directors and Officers of the Surviving Corporation | A-2 | ||||||
Section 1.4 | Effect on Capital Stock | A-2 | ||||||
Section 1.5 | Election Procedures | A-3 | ||||||
Section 1.6 | Dissenting Shares | A-4 | ||||||
Section 1.7 | Stock Options and Equity Awards | A-5 | ||||||
Section 1.8 | Shares Held by Company Affiliates | A-6 | ||||||
ARTICLE II Exchange of Certificates | A-6 | |||||||
Section 2.1 | Surrender and Payment | A-6 | ||||||
Section 2.2 | Fractional Shares | A-8 | ||||||
Section 2.3 | Lost Certificates | A-8 | ||||||
Section 2.4 | Withholding Rights | A-8 | ||||||
ARTICLE III Representations and Warranties of the Company | A-9 | |||||||
Section 3.1 | Corporate Existence and Power | A-9 | ||||||
Section 3.2 | Corporate Authorization | A-9 | ||||||
Section 3.3 | Governmental Authorization | A-9 | ||||||
Section 3.4 | Non-Contravention | A-10 | ||||||
Section 3.5 | Capitalization | A-10 | ||||||
Section 3.6 | Subsidiaries | A-11 | ||||||
Section 3.7 | Commission Filings | A-12 | ||||||
Section 3.8 | Financial Statements | A-12 | ||||||
Section 3.9 | Disclosure Documents | A-12 | ||||||
Section 3.10 | Controls and Procedures | A-13 | ||||||
Section 3.11 | Absence of Certain Changes | A-14 | ||||||
Section 3.12 | No Default | A-15 | ||||||
Section 3.13 | No Undisclosed Material Liabilities | A-15 | ||||||
Section 3.14 | Litigation | A-15 | ||||||
Section 3.15 | Taxes | A-15 | ||||||
Section 3.16 | Employee Benefit Plans; Employment | A-16 | ||||||
Section 3.17 | Compliance with Laws | A-18 | ||||||
Section 3.18 | Certain Business Practices | A-18 | ||||||
Section 3.19 | Environmental Matters | A-18 | ||||||
Section 3.20 | Title to Properties | A-18 | ||||||
Section 3.21 | Hydrocarbon Contracts | A-19 | ||||||
Section 3.22 | Material Contracts | A-19 | ||||||
Section 3.23 | Intellectual Property | A-19 | ||||||
Section 3.24 | Confidentiality and Other Agreements | A-20 | ||||||
Section 3.25 | Brokers; Financial Advisors | A-20 | ||||||
Section 3.26 | Opinion of Financial Advisor | A-20 | ||||||
Section 3.27 | Takeover Statutes | A-20 | ||||||
Section 3.28 | Stockholder Rights Plan | A-20 | ||||||
ARTICLE IV Representations and Warranties of Parent and Merger Subsidiary | A-20 | |||||||
Section 4.1 | Corporate Existence and Power | A-21 | ||||||
Section 4.2 | Corporate Authorization | A-21 | ||||||
Section 4.3 | Governmental Authorization | A-21 | ||||||
Section 4.4 | Non-Contravention | A-21 |
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Section 4.5 | Capitalization | A-22 | ||||||
Section 4.6 | Commission Filings | A-22 | ||||||
Section 4.7 | Financial Statements | A-23 | ||||||
Section 4.8 | Disclosure Documents | A-23 | ||||||
Section 4.9 | Controls and Procedures | A-23 | ||||||
Section 4.10 | Absence of Certain Changes | A-24 | ||||||
Section 4.11 | No Undisclosed Material Liabilities | A-25 | ||||||
Section 4.12 | Litigation | A-25 | ||||||
Section 4.13 | Compliance with Laws | A-25 | ||||||
Section 4.14 | Tax Treatment | A-25 | ||||||
Section 4.15 | Capitalization of Merger Subsidiary | A-25 | ||||||
ARTICLE V Covenants of the Company | A-25 | |||||||
Section 5.1 | Conduct of the Company | A-25 | ||||||
Section 5.2 | Company Stockholder Meeting; Proxy Material | A-28 | ||||||
Section 5.3 | Resignation of Company Directors | A-30 | ||||||
Section 5.4 | Other Actions | A-30 | ||||||
ARTICLE VI Covenants of Parent | A-30 | |||||||
Section 6.1 | Obligations of Merger Subsidiary | A-30 | ||||||
Section 6.2 | Director and Officer Liability | A-30 | ||||||
Section 6.3 | Form S-4 | A-30 | ||||||
Section 6.4 | Stock Exchange Listing | A-30 | ||||||
Section 6.5 | Employee Benefits | A-31 | ||||||
ARTICLE VII Covenants of Parent and the Company | A-32 | |||||||
Section 7.1 | Best Efforts | A-32 | ||||||
Section 7.2 | Certain Filings | A-33 | ||||||
Section 7.3 | Access to Information | A-34 | ||||||
Section 7.4 | Tax Treatment | A-34 | ||||||
Section 7.5 | Public Announcements | A-34 | ||||||
Section 7.6 | Further Assurances | A-34 | ||||||
Section 7.7 | Notices of Certain Events | A-34 | ||||||
Section 7.8 | Affiliates | A-34 | ||||||
Section 7.9 | No Solicitation | A-35 | ||||||
Section 7.10 | Takeover Statutes | A-36 | ||||||
Section 7.11 | Section 16(b) | A-37 | ||||||
ARTICLE VIII Conditions to the Merger | A-37 | |||||||
Section 8.1 | Conditions to the Obligations of Each Party | A-37 | ||||||
Section 8.2 | Conditions to the Obligations of Parent and Merger Subsidiary | A-38 | ||||||
Section 8.3 | Conditions to the Obligations of the Company | A-38 | ||||||
ARTICLE IX Termination | A-39 | |||||||
Section 9.1 | Termination | A-39 | ||||||
Section 9.2 | Effect of Termination | A-40 | ||||||
ARTICLE X Miscellaneous | A-40 | |||||||
Section 10.1 | Notices | A-40 | ||||||
Section 10.2 | Non-Survival of Representations and Warranties | A-41 | ||||||
Section 10.3 | Amendments; No Waivers | A-41 | ||||||
Section 10.4 | Expenses | A-41 | ||||||
Section 10.5 | Company Termination Fee | A-41 | ||||||
Section 10.6 | Successors and Assigns | A-42 | ||||||
Section 10.7 | Governing Law | A-42 |
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Section 10.8 | Enforcement; Jurisdiction | A-42 | ||||||
Section 10.9 | Waiver of Jury Trial | A-42 | ||||||
Section 10.10 | Counterparts; Effectiveness | A-42 | ||||||
Section 10.11 | Entire Agreement | A-42 | ||||||
Section 10.12 | Captions | A-42 | ||||||
Section 10.13 | Severability | A-42 |
Exhibit A — Form of Certificate of Incorporation of Merger Subsidiary | ||
Exhibit B — Form of Affiliate’s Rule 145 Letter |
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2005 Pro Rata Bonus | 6.5(e) | |
2006 Pro Rata Bonus | 6.5(e) | |
Acquisition Proposal | 7.9(b) | |
Affected Employees | 6.5(b) | |
Affected Retirees | 6.5(b) | |
Affiliate Agreement | 7.8(a) | |
Agreement | Preamble | |
Anti-Discrimination Laws | 3.16(j) | |
Antitrust Laws | 7.1(b)(ii) | |
Available Cash Election Amount | 1.4(a)(ii) | |
Book-Entry Shares | 2.1(a) | |
Cancelled Shares | 1.4(d) | |
Cash Election | 1.4(a)(ii) | |
Cash Election Amount | 1.4(a)(ii) | |
Cash Election Share | 1.4(a)(ii) | |
Cash Fraction | 1.4(a)(ii) | |
CERCLA | 3.19(b) | |
Certificate | 1.4(b) | |
Change in Control | 6.5(a) | |
Change in the Company Recommendation | 5.2(a) | |
Closing | 1.1(d) | |
Closing Date | 1.1(d) | |
Code | Recitals | |
Commission | 1.7(c) | |
Common Shares Trust | 2.2(b) | |
Company | Preamble | |
Company 10-K | 3.7(a) | |
Company Award | 1.7(b) | |
Company Award Plans | 1.7(b) | |
Company Balance Sheet | 3.8 | |
Company Balance Sheet Date | 3.8 | |
Company Benefit Plans | 3.16(a) | |
Company By-laws | 3.1 | |
Company Capital Stock | 3.5 | |
Company Charter | 3.1 | |
Company Commission Documents | 3.7(a) | |
Company Common Stock | 3.5 | |
Company Disclosure Schedules | Article 3 | |
Company Intellectual Property | 3.23(a) | |
Company Material Adverse Effect | 3.1 | |
Company Material Contracts | 3.22 | |
Company Pension Plan | 3.16(e) | |
Company Phantom Stock Option | 1.7(a) | |
Company Preferred Stock | 3.5 |
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Company Proxy Statement | 3.9(a) | |
Company Recommendation | 5.2(f) | |
Company Rights | 3.5 | |
Company Rights Agreement | 3.5 | |
Company Securities | 3.5 | |
Company Stock Option | 1.7(a) | |
Company Stock Option Plans | 1.7(a) | |
Company Stockholder Approval | 3.2(a) | |
Company Stockholder Meeting | 5.2(f) | |
Company Subsidiary Securities | 3.6(b) | |
Confidentiality Agreement | 7.3 | |
DGCL | 1.1(a) | |
Dissenting Share | 1.6 | |
EC Merger Regulation | 3.3 | |
Effective Time | 1.1(b) | |
Electing Stockholder | 2.1(a) | |
Election Deadline | 1.5(b) | |
Election Form | 1.5(a) | |
Election Form Record Date | 1.5(a) | |
End Date | 9.1(b)(i) | |
Environmental Laws | 3.19(b) | |
ERISA | 3.16(a) | |
ERISA Affiliate | 3.16(d) | |
Excess Shares | 2.2(a) | |
Exchange Act | 3.3 | |
Exchange Agent | 2.1(a) | |
Exchange Ratio | 1.4(a)(iii) | |
Financial Advisor | 3.25 | |
Foreign Company Benefit Plan | 3.16(a) | |
Form S-4 | 4.8(a) | |
GAAP | 3.8 | |
Hazardous Substance | 3.19(b) | |
HSR Act | 3.3 | |
Hydrocarbon Contract | 3.21(a) | |
Hydrocarbons | 3.21(a) | |
Indemnitees | 6.2(a) | |
Intellectual Property | 3.23(a) | |
Knowledge | 3.10(e) | |
Lien | 3.4 | |
Mailing Date | 1.5(a) | |
Merger | 1.1(a) | |
Merger Consideration | 1.4(a) | |
Merger Subsidiary | Preamble | |
Mixed Consideration Election Share | 1.4(a)(i) | |
Mixed Election | 1.4(a)(i) | |
Mixed Election Stock Exchange Ratio | 1.4(a)(i) |
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No Election Shares | 1.5(b) | |
NYSE | 2.2(a) | |
Parent | Preamble | |
Parent 10-K | 4.6(a) | |
Parent Balance Sheet | 4.7 | |
Parent Balance Sheet Date | 4.7 | |
Parent Commission Documents | 4.6(a) | |
Parent Common Stock | 4.5 | |
Parent Disclosure Schedules | Article IV | |
Parent Material Adverse Effect | 4.1 | |
Parent Securities | 4.5 | |
Per Share Cash Amount | 1.4(a)(i) | |
Per Share Cash Election Consideration | 1.4(a)(ii) | |
Per Share Mixed Consideration | 1.4(a)(i) | |
Person | 2.1(c) | |
RCRA | 3.19(b) | |
Release | 3.19(b) | |
RFG Patents | 3.23(a) | |
Sarbanes-Oxley Act | 3.10(a) | |
Securities Act | 3.3 | |
Significant Subsidiaries | 3.6(a) | |
Stock Award Exchange Ratio | 1.7(a) | |
Stock Consideration | 1.4(a)(iii) | |
Stock Election | 1.4(a)(iii) | |
Stock Election Share | 1.4(a)(iii) | |
Subsidiary | 3.6(a) | |
Substantial Detriment | 7.1(c) | |
Superior Proposal | 7.9(b) | |
Surviving Corporation | 1.1(a) | |
Tax Returns | 3.15 | |
Taxes | 3.15 |
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(i) Each share of Company Common Stock with respect to which an election to receive a combination of stock and cash (a “Mixed Election”) has been effectively made and not revoked or lost pursuant to Section 2.1 (each, a “Mixed Consideration Election Share”) and each No Election Share (as that term is defined in Section 1.5(b) hereof) shall be converted into the right to receive the combination (which combination shall hereinafter be referred to as the “Per Share Mixed Consideration”) of (x) $16.25 in cash (the “Per Share Cash Amount”) and (y) 0.7725 of a share of validly issued, fully paid and non-assessable shares of Parent Common Stock (the “Mixed Election Stock Exchange Ratio”), subject to adjustment in accordance with Section 1.4(c); | |
(ii) Each share of Company Common Stock with respect to which an election to receive cash (a“Cash Election”) has been effectively made and not revoked or lost pursuant to Section 2.1 (each, a“Cash Election Share”) shall be converted (provided that the Available Cash Election Amount (as defined below) equals or exceeds the Cash Election Amount (as defined below)) into the right to receive $65.00 in cash without interest (the “Per Share Cash Election Consideration”);if,however, (A) the product of the number of Cash Election Shares and the Per Share Cash Election Consideration (such product being the “Cash Election Amount”) exceeds (B) the difference between (x) the product of the Per Share Cash Amount and the total number of shares of Company Common Stock (other than the Cancelled Shares) issued and outstanding immediately prior to the Effective Time minus (y) the product of the number of Mixed Consideration Election Shares (provided that No Election Shares shall be deemed to be Mixed Consideration Election Shares for purposes of this Section 1.4(a)(ii)) and the Per Share Cash Amount (such difference being the “Available Cash Election Amount”), then each Cash Election Share shall be converted into a right to receive (1) an amount of cash (without interest) equal to the product of (p) the Per Share Cash Election Consideration and (q) a fraction, the numerator of which shall be the Available Cash Election Amount and the denominator of which shall be the Cash Election Amount (such fraction being the“Cash Fraction”) and (2) a number of validly issued, fully paid and non-assessable shares of Parent Common Stock equal to the product of (r) the Exchange Ratio and (s) one (1) minus the Cash Fraction; | |
(iii) Each share of Company Common Stock with respect to which an election to receive stock consideration (a “Stock Election”) is properly made and not revoked or lost pursuant to Section 2.1 |
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(each, a “Stock Election Share”) shall be converted (provided that the Cash Election Amount equals or exceeds the Available Cash Election Amount), into the right to receive 1.03 shares (the“Exchange Ratio”) of validly issued, fully paid and non-assessable shares of Parent Common Stock, subject to adjustment in accordance with Section 1.4(c) (together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 2.2, the “Stock Consideration”);provided however, if the Available Cash Election Amount exceeds the Cash Election Amount, then each Stock Election Share shall be converted into the right to receive (1) an amount of cash (without interest) equal to the amount of such excess divided by the number of Stock Election Shares and (2) a number of validly issued, fully paid and non-assessable shares of Parent Common stock equal to the product of (x) the Exchange Ratio and (y) a fraction, the numerator of which shall be the Per Share Cash Election Consideration minus the amount calculated in clause (1) of this paragraph and the denominator of which shall be the Per Share Cash Election Consideration. |
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(a) any event, occurrence, change or development of a state of circumstances or facts which, individually or in the aggregate, has had, or would be reasonably likely to have, a Company Material Adverse Effect; | |
(b) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of the Company (other than the Company’s regular quarterly cash dividend and dividends or distributions by any direct or indirect wholly-owned Subsidiary to the Company or any wholly-owned Subsidiary of the Company, and except for dividends or distributions by other Subsidiaries of the Company for which the portion of such dividends or distributions not payable to a direct or indirect wholly-owned Subsidiary of the Company did not exceed $10,000,000 in value in the aggregate for all such dividends and distributions), or any repurchase, redemption or other acquisition by the Company or any of its wholly-owned Subsidiaries of any outstanding shares of capital stock or other securities of, or other ownership interests in, the Company or any of its Significant Subsidiaries (other than (i) any such repurchases prior to the date hereof pursuant to the Company’s publicly announced stock buyback program or, after the date hereof, as permitted under Section 5.1(e) or pursuant to the terms of Company Stock Options and Company Awards, in each case subject to Section 7.4), and (ii) any such transaction solely among the Company and its wholly-owned Subsidiaries or solely among the Company’s wholly-owned Subsidiaries; | |
(c) any amendment of any material term of any outstanding security of the Company or any of its Significant Subsidiaries (other than wholly-owned Subsidiaries); | |
(d) to the knowledge of the Company’s Management Committee, any transaction or commitment made, or any contract, agreement or settlement entered into, by (or judgment, order or decree affecting) the Company or any of its Subsidiaries relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by the Company or any of its Subsidiaries of any contract or other right, in either case, material to the Company and its Subsidiaries taken as a whole, other than transactions, commitments, contracts, agreements or settlements (including without limitation settlements of litigation and tax proceedings) in the ordinary course of business consistent with past practice, those expressly permitted by this Agreement, or as agreed to in writing by Parent; | |
(e) any change in any method of financial accounting or financial accounting practice (other than any change for tax purposes) by the Company or any of its Subsidiaries, except for any such change which is not material or which is required by reason of a concurrent change in GAAP or applicable law; | |
(f) any (i) grant of any severance or termination pay to (or amendment to any such existing arrangement with) any director, officer or employee of the Company or any of its Subsidiaries, other than in accordance with existing plans and policies, (ii) entering into of any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of the Company or any of its Subsidiaries, other than in accordance with existing plans and policies, (iii) increase in benefits payable under any existing severance or termination pay policies or employment agreements or (iv) increase in (or amendments to the terms of) compensation, bonus or other benefits payable to directors, officers or employees of the Company or any of its Subsidiaries, other than increases made in the ordinary course of business with respect to employees other than executives; or | |
(g) any (i) Tax election made or changed, (ii) Tax audit settled, or (iii) amended Tax Return filed, in each case, that is reasonably likely to result in an increase to a Tax liability, which increase is material to the Company and its Subsidiaries, taken as a whole. |
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(a) liabilities disclosed or provided for in the Company Balance Sheet or in the notes thereto; | |
(b) liabilities incurred since the Company Balance Sheet Date in the ordinary course of business consistent with past practice and which, individually or in the aggregate, would not be reasonably likely to have a Company Material Adverse Effect; | |
(c) liabilities disclosed in the Company Commission Documents filed prior to the date of this Agreement; | |
(d) liabilities or obligations that have been discharged or paid in full in the ordinary course of business; and | |
(e) liabilities under this Agreement. |
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(a) any event, occurrence, change or development of a state of circumstances or facts which, individually or in the aggregate, has had, or would be reasonably likely to have, a Parent Material Adverse Effect; or | |
(b) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of Parent (other than regular quarterly cash dividends payable by Parent (x) consistent with past practice (including periodic dividend increases consistent with past practice) and (y) that are not special dividends), or any repurchase, redemption or other acquisition by Parent or any of its wholly-owned Subsidiaries of any outstanding shares of capital stock or other equity securities of, or other ownership interests in, Parent or any of its Significant Subsidiaries (other than (i) any such repurchases prior to the date hereof pursuant to Parent’s publicly announced stock buyback program or, after the date hereof, or pursuant to the terms of employee and director stock options and (ii) any such |
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transaction solely among Parent and its wholly-owned Subsidiaries or solely among Parent’s wholly-owned Subsidiaries); | |
(c) any change prior to the date hereof in any method of financial accounting or financial accounting practice by Parent or any of its Subsidiaries, except for any such change which is not material or which is required by reason of a concurrent change in GAAP or by applicable law; or | |
(d) any (i) Tax election made or changed, (ii) Tax audit settled, or (iii) amended Tax Return filed, in each case, that is reasonably likely to result in an increase to a Tax liability, which increase is material to Parent and its Subsidiaries, taken as a whole. |
(a) liabilities disclosed or provided for in the Parent Balance Sheet or in the notes thereto; | |
(b) liabilities incurred since the Parent Balance Sheet Date in the ordinary course of business consistent with past practice and which, individually or in the aggregate, would not be reasonably likely to have a Parent Material Adverse Effect; | |
(c) liabilities disclosed in the Parent Commission Documents filed prior to the date of this Agreement; | |
(d) liabilities or obligations that have been discharged or paid in full in the ordinary course of business; and | |
(e) liabilities under this Agreement. |
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(a) the Company will not, and will not permit any of its Subsidiaries to, adopt or propose any change in its certificate of incorporation or by-laws, or amend or waive any provision of the Company Rights Agreement; | |
(b) the Company will not, and will not permit any Subsidiary of the Company to, adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries; | |
(c) the Company will not, and will not permit any Subsidiary of the Company to, issue, sell, transfer, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Company or its Subsidiaries other than (i) issuances pursuant to the exercise of convertible securities outstanding on the date hereof or issuances pursuant to stock based awards or options that are outstanding on the date hereof and are reflected in Section 3.5 or are granted in accordance with clause 5.1(c), (ii) if the Effective Time occurs in 2006, grants to be made in 2006 in accordance with the Company’s customary schedule in accordance with past practice and (iii) grants made to directors of the Company and newly hired and promoted employees in the ordinary course of business in accordance with past practice; | |
(d) the Company will not, and will not permit any Subsidiary of the Company to, (i) split, combine, subdivide or reclassify its outstanding shares of capital stock, or (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock other than (x) regular quarterly cash dividends payable by the Company or such Subsidiary consistent with past practice, but not including any special dividend or (y) dividends paid by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; | |
(e) the Company will not, and will not permit any Subsidiary of the Company to, redeem, purchase or otherwise acquire directly or indirectly any of the Company’s or any Subsidiary’s capital stock, except for repurchases, redemptions or acquisitions (x) required by the terms of its capital stock or any securities outstanding on the date hereof, (y) required by or in connection with the respective terms, as of the date hereof, of any Company Stock Option Plan or any dividend reinvestment plan as in effect on the date hereof in the ordinary course of the operations of such plan consistent with past practice and only to the extent consistent with Section 7.4 or (z) effected in the ordinary course consistent with past practice and only to the extent consistent with Section 7.4; | |
(f) the Company will not amend the terms (including the terms relating to accelerating the vesting or lapse of repurchase rights or obligations) of any outstanding options to purchase shares of Company Common Stock or of any outstanding restricted stock, stock units or stock appreciation rights (which, it is understood, will not limit the administration of the relevant plans in accordance with past practices and interpretations of the Company’s Board and the Company’s Compensation Committee to the extent consistent with Section 7.4); | |
(g) except (A) as consistent with the capital budgets set forth in Section 5.1(g) of the Company Disclosure Schedules or (B) if the Effective Time occurs in 2006, with respect to capital expenditures in future periods that are not covered by such capital budgets, as based on a reasonable extrapolation of permissible expenditures for the capital budgets set forth in Section 5.1(g) of the Company Disclosure Schedules, the Company will not, and will not permit any Subsidiary of the Company to, make or authorize any capital expenditure in excess of $50 million; |
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(h) the Company will not, and will not permit any Subsidiary of the Company to, (1) increase the compensation or benefits of any director, officer or employee, except for normal increases in the ordinary course of business consistent with past practice or as required under applicable law or any Company Benefit Plan existing on the date hereof, or (2)(i) enter into, (ii) adopt, (iii) extend or renew (with respect to clause (iii) only, for a term in excess of one year) (or waive or amend any performance or vesting criteria or accelerate funding under) any employment, change in control, severance, bonus, profit sharing, retirement, restricted stock, stock option, deferred compensation or other director, executive or employee benefit plan, policy, agreement or arrangement except as required by applicable law or the terms of an agreement or arrangement existing on the date hereof or, with respect to individual non-U.S. payroll employees, in the ordinary course of business consistent with past practice or as required by applicable law; | |
(i) the Company will not, and will not permit any of its Subsidiaries to, acquire a material amount of assets or property (as measured with respect to the consolidated assets of the Company and its Subsidiaries taken as a whole) of any other Person (other than the Company or a wholly-owned Subsidiary of the Company), except in the ordinary course of business consistent with past practice; | |
(j) except as expressly permitted by Section 7.1, the Company will not, and will not permit any of its Subsidiaries to, sell, lease, license, encumber (including by the grant of any option thereon) or otherwise dispose of any material assets or property except pursuant to existing contracts or commitments or except in the ordinary course of business consistent with past practice and in no event in an amount exceeding $50 million in the aggregate; | |
(k) the Company will not, and will not permit any of its Subsidiaries to, incur any indebtedness for borrowed money (other than (i) any such indebtedness among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries or (ii) additional short-term debt not to exceed $500,000,000 in the aggregate) or guarantee or assume any such indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness of another Person, enter into any “keep well” or other agreement to maintain any financial condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, in each case other than in the ordinary course of business, consistent with past practice; | |
(l) the Company will not, and will not permit any of its Subsidiaries to, (i) modify, amend, terminate or waive any material rights under any Company Material Contract or (ii) enter into any agreement that would constitute a Company Material Contract if entered into as of the date of this Agreement other than (with respect to clause (ii)) in the ordinary course of business, consistent with past practice; | |
(m) the Company will not, and will not permit any of its Subsidiaries to, settle or compromise any claim, demand, lawsuit or state or federal regulatory proceeding, whether now pending or hereafter made or brought, or waive, release or assign any rights or claims, in any such case in an amount in excess of $20 million or that is otherwise qualitatively material to the Company, provided that Parent will not unreasonably withhold its consent to any such settlement or compromise; | |
(n) except for any such change which is not material or which is required by reason of a concurrent change in GAAP or applicable law, the Company will not, and will not permit any Subsidiary of the Company to, change any method of financial accounting or financial accounting practice (other than any change for tax purposes) used by it; | |
(o) the Company will not, and will not permit any Subsidiary of the Company to, enter into any material joint venture, partnership or other similar arrangement or make any loan, capital contribution or advance to or investment in any other Person (other than the Company or any wholly-owned Subsidiary of the Company) other than in the ordinary course of business, consistent with past practice or in an amount not exceeding $10 million; |
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(p) the Company will not, and will not permit any of its Subsidiaries to, take any action which would limit Parent’s or the Company’s freedom to license, cross-license or otherwise dispose of any Company Intellectual Property; | |
(q) the Company will not amend or waive any provisions of any standstill agreement; | |
(r) except as required by Law, the Company will not (i) make or change any Tax election, (ii) settle any Tax audit or (iii) file any amended Tax Return, in each case, that is reasonably likely to result in an increase to a Tax liability, which increase is material to the Company and its Subsidiaries, taken as a whole; | |
(s) except as contemplated by Section 7.1, the Company will not, and will not permit any of its Subsidiaries to, enter into any agreement that limits (other than in an insignificant manner) the ability of the Company or any Subsidiary of the Company, or would limit (other than in an insignificant manner) the ability of Parent or any Subsidiary of Parent after the Effective Time, to compete in or conduct any line of business or compete with any Person in any geographic area or during any period, it being understood that any restriction that by its terms does not extend more than six (6) months beyond the Effective Time shall be deemed to be insignificant; | |
(t) the Company will not, and will not permit any of its Subsidiaries to, take any action that would prevent, materially delay or materially impede the consummation of the Merger; and | |
(u) the Company will not, and will not permit any of its Subsidiaries to, agree or commit to do any of the foregoing. |
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(i) each use its best efforts to avoid the entry of, or to have vacated or terminated, any decree, order, or judgment that would restrain, prevent or delay the Closing, on or before the End Date (as defined in Section 9.1(b)(i)), including without limitation defending through litigation on the merits any claim asserted in any court by any Person; and | |
(ii) each use its best efforts to avoid or eliminate each and every impediment under any antitrust, competition or trade regulation law that may be asserted by any governmental authority with respect to the Merger (collectively, “Antitrust Laws”) so as to enable the Closing to occur as soon as reasonably possible (and in any event no later than the End Date), including, without limitation, (x) proposing, negotiating, committing to and effecting, by consent decree, hold separate order, or otherwise, the sale, divestiture or disposition of such businesses, product lines or assets of Parent, the Company and their respective Subsidiaries and (y) otherwise taking or committing to take actions that after the Closing Date would limit Parent or its Subsidiaries’ freedom of action with respect to, or its or their ability to retain, one or more of the businesses, product lines or assets of Parent, the Company and their respective Subsidiaries, in each case as may be required in order to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order, or other order in any suit or proceeding, which would otherwise have the effect of preventing or materially delaying the Closing. Parent and, if requested by Parent, the Company shall agree to divest, sell, dispose of, hold separate, or otherwise take or commit to take any action that limits its freedom of action with respect to, or Parent or Parent’s Subsidiaries’ ability to retain, any of the businesses, product lines or assets of Parent, the Company or any of their respective Subsidiaries, provided that any such action is conditioned upon the consummation of the Merger. The Company agrees and acknowledges that, notwithstanding anything to the contrary in this Section 7.1, in connection with any filing or submission required, action to be taken or commitment to be made by Parent, the Company or any of their respective Subsidiaries to consummate the Merger or other transactions contemplated by this Agreement, neither the Company nor any of the Company’s Subsidiaries shall, without Parent’s prior written consent, sell, divest, or dispose of any assets, license any Company Intellectual Property, commit to any sale, divestiture or disposal of businesses, product lines or assets of the Company and the Company’s Subsidiaries or any license of Company Intellectual Property or take any other action or commit to take any action that would limit the Company’s, Parent’s or any of their respective Subsidiaries’ freedom of action with respect to, or their ability to retain any of, their businesses, product lines or assets or Company Intellectual Property; provided that the foregoing shall not relieve any party of its obligations under this Agreement. |
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(i) Any written notice or other written communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; | |
(ii) Any notice or other written communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement; and | |
(iii) Any actions, suits, claims, investigations or proceedings (A) commenced or (B) to the best of its knowledge, threatened against, relating to or involving or otherwise affecting such party or any of its Subsidiaries which relate to the consummation of the transactions contemplated by this Agreement. |
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(a) this Agreement and the Merger shall have been approved and adopted by the stockholders of the Company in accordance with DGCL; | |
(b) any applicable waiting period under the HSR Act relating to the Merger shall have expired; | |
(c) any applicable approval by the European Commission of the transactions contemplated by this Agreement shall have been obtained pursuant to the EC Merger Regulation; | |
(d) no provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit or enjoin the consummation of the Merger; | |
(e) the Form S-4 shall have been declared effective under the Securities Act and no stop order suspending the effectiveness of the Form S-4 shall be in effect and no proceedings for such purpose shall be pending before or threatened by the Commission; | |
(f) the shares of Parent Common Stock to be issued in the Merger shall have been approved for listing on the NYSE, subject to official notice of issuance; | |
(g) neither the U.S. Federal Trade Commission nor the Antitrust Division of the U.S. Department of Justice, as the case may be, shall have, as a condition to its approval of the Merger and the other transactions contemplated by this Agreement, required Parent to take any action which, individually or in the aggregate, would result in, or be reasonably likely to result in, a Substantial Detriment; | |
(h) there shall not be instituted or pending any action or proceeding by any governmental authority (whether domestic, foreign or supranational) before any court or governmental authority or agency, domestic, foreign or supranational, seeking to (i) restrain, prohibit or otherwise interfere with the ownership or operation by Parent or any Subsidiary of Parent of all or any material portion of the business of the Company or any of its Subsidiaries or of Parent or any of its Subsidiaries or to compel Parent or any Subsidiary of Parent to dispose of or hold separate all or any portion of the businesses, product lines or assets of the Company or any of its Subsidiaries or of Parent or any of its Subsidiaries, (ii) impose or confirm limitations on the ability of Parent or any Subsidiary of Parent effectively to exercise full rights of ownership of the shares of Company Common Stock (or shares of stock of the Surviving Corporation) including, without limitation, the right to vote any shares of Company Common Stock (or shares of stock of the Surviving Corporation) on any matters properly presented to stockholders or (iii) require divestiture by Parent or any Subsidiary of Parent of any shares of Company Common Stock (or shares of stock of the Surviving Corporation), if any such matter referred to in subclauses (i), (ii) and (iii) hereof, individually or in the aggregate, would result in, or would be reasonably likely to result in, a Substantial Detriment; |
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(i) there shall not be any statute, rule, regulation, injunction, order or decree, enacted, enforced, promulgated, entered, issued or deemed applicable to the Merger and the other transactions contemplated hereby (or in the case of any statute, rule or regulation, awaiting signature or reasonably expected to become law), by any court, government or governmental authority or agency or legislative body, domestic, foreign or supranational, which, individually or in the aggregate, would result in, or would be reasonably likely to result in, a Substantial Detriment; and | |
(j) all required approvals or consents of any governmental authority (whether domestic, foreign or supranational) in connection with the Merger and the consummation of the other transactions contemplated hereby shall have been obtained (and all relevant statutory, regulatory or other governmental waiting periods, whether domestic, foreign or supranational, shall have expired) unless the failure to receive any such approval or consent would not be reasonably expected to result in a Substantial Detriment and all such approvals and consents which have been obtained shall be on terms which, individually or in the aggregate, would not be reasonably likely to result in, a Substantial Detriment. |
(a)(i) The Company shall have performed in all material respects all of its obligations hereunder required to be performed by it as of or prior to the Closing Date, (ii)(A) the representations and warranties of the Company set forth in this Agreement which are qualified by a “Company Material Adverse Effect” qualification shall be true and correct in all respects as so qualified at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date and (B) the representations and warranties of the Company set forth in this Agreement which are not qualified by a “Company Material Adverse Effect” qualification shall be true and correct at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date, except for such failures to be true and correct as would not, in the aggregate, reasonably be expected to have a Company Material Adverse Effect;provided, however, that, with respect to clauses (A) and (B) hereof, representations and warranties that are made as of a particular date or period shall be true and correct (in the manner set forth in clauses (A) or (B), as applicable), only as of such date or period; | |
(b) Parent shall have received an opinion of McDermott Will & Emery LLP (or such other counsel reasonably acceptable to Parent), on the basis of representations and assumptions set forth or referred to in such opinion, dated as of the Closing Date, to the effect that the Merger will be treated for federal income tax purposes as a reorganization qualifying under the provisions of Section 368(a) of the Code. In rendering such opinion, such counsel shall be entitled to receive and rely upon representations of officers of Parent, the Company or others reasonably requested by counsel; and | |
(c) since the date of this Agreement, there shall not have been any event, occurrence, development or state of circumstances which, individually or in the aggregate, would be reasonably likely to have a Company Material Adverse Effect. |
(a) (i) Parent shall have performed in all material respects all of its obligations hereunder required to be performed by it as of or prior to the Closing Date, (ii) (A) the representations and warranties of Parent and Merger Subsidiary set forth in this Agreement which are qualified by a “Parent Material Adverse Effect” qualification shall be true and correct in all respects as so qualified at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date and (B) the representations and warranties of Parent and Merger Subsidiary set forth in this Agreement which are not qualified by a “Parent Material Adverse Effect” qualification shall be true and correct at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date, except for such failures to be true and correct as would not, in the aggregate, reasonably be |
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expected to have a Parent Material Adverse Effect;provided, however, that, with respect to clauses (A) and (B) hereof, representations and warranties that are made as of a particular date or period shall be true and correct (in the manner set forth in clauses (A) or (B), as applicable), only as of such date or period; | |
(b) the Company shall have received an opinion of Wachtell, Lipton, Rosen & Katz (or such other counsel reasonably acceptable to the Company), on the basis of representations and assumptions set forth or referred to in such opinion, dated as of the Closing Date, to the effect that the Merger will be treated for federal income tax purposes as a reorganization qualifying under the provisions of Section 368(a) of the Code. In rendering such opinion, such counsel shall be entitled to rely upon representations of officers of Parent, the Company or others reasonably requested by counsel; and | |
(c) since the date of this Agreement, there shall not have been any event, occurrence, development or state of circumstances which, individually or in the aggregate, would be reasonably likely to have a Parent Material Adverse Effect. |
(a) by mutual written consent of the Company and Parent; | |
(b) by either the Company or Parent; |
(i) if the Merger has not been consummated by December 31, 2005 (the“End Date”);provided, however, that if (x) the Effective Time has not occurred by such date by reason of nonsatisfaction of any of the conditions set forth in Sections 8.1(b), 8.1(c), 8.1(g), 8.1(h), 8.1(i) or 8.1(j) and (y) all other conditions in Article 8 have theretofore been satisfied or (to the extent legally permissible) waived or are then capable of being satisfied, the End Date will be August 31, 2006;provided further that the right to terminate this Agreement under this Section 9.1(b)(i) shall not be available to any party whose failure to fulfill any obligation under this Agreement has caused or resulted in the failure of the Effective Time to occur on or before the End Date; or | |
(ii) if the Company Stockholder Approval shall not have been obtained by reason of the failure to obtain the required vote at a duly held meeting of stockholders or any adjournment thereof; |
(c) by either the Company or Parent, if there shall be any law or regulation that makes consummation of the Merger illegal or otherwise prohibited or if any judgment, injunction, order or decree enjoining Parent or the Company from consummating the Merger is entered and such judgment, injunction, order or decree shall become final and nonappealable;provided that the party seeking to terminate this Agreement pursuant to this Section 9.1(c) shall have complied with its obligations in Section 7.1 hereof; | |
(d) by Parent, if (i) the Board of Directors of the Company shall have failed to recommend its approval or recommendation of this Agreement or the Merger or there has otherwise been a Change in the Company Recommendation, whether or not permitted by the terms hereof, or the Company shall be in breach of its obligation to call and hold the Company Stockholder Meeting or to prepare, obtain Commission clearance for and mail the Proxy Statement in accordance with Section 5.2 or otherwise comply with such Section (or the Board of Directors of the Company or any committee thereof shall resolve to do any of the foregoing) or (ii) the Company shall have materially breached its obligations in Section 7.9 hereof to the material detriment of Parent; or | |
(e) by either Parent or the Company, if there shall have been a breach by the other of any of its representations, warranties, covenants or obligations contained in this Agreement, which breach would result in the failure to satisfy one or more of the conditions set forth in Section 8.2(a) (in the case of a |
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breach by the Company) or Section 8.3(a) (in the case of a breach by Parent), and in any such case such breach shall be incapable of being cured or, if capable of being cured, shall not have been cured within 30 days after written notice thereof shall have been received by the party alleged to be in breach. |
ChevronTexaco Corporation | |
6001 Bollinger Canyon Road | |
San Ramon, California 94583 | |
Facsimile No.: (925) 842-1230 |
Attention: | David J. O’Reilly, Chairman of the Board and Chief Executive Officer |
Charles A. James, Vice President and General Counsel |
Pillsbury Winthrop Shaw Pittman LLP | |
50 Fremont Street | |
San Francisco, California 94105 | |
Facsimile No.: (415) 983-1200 |
Attention: | Alfred L. Pepin, Jr. |
Robert A. James | |
Terry M. Kee |
if to the Company, to: |
Unocal Corporation | |
2141 Rosecrans Avenue, Suite 4000 | |
El Segundo, California 90245 | |
Facsimile No.: (310) 726-7815 |
Attention: | Samuel H. Gillespie III, Senior Vice President, Chief Legal Officer & |
General Counsel/Law |
with copies to: |
Wachtell, Lipton, Rosen & Katz | |
51 West 52nd Street | |
New York, New York 10019 | |
Telecopy: (212) 403 2000 |
Attention: | Daniel A. Neff |
David C. Karp |
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(i) Parent shall terminate this Agreement pursuant to Section 9.1(d); or | |
(ii) either the Company or Parent shall terminate this Agreement pursuant to Section 9.1(b)(ii) and prior to the Company Stockholder Meeting but after the date hereof an Acquisition Proposal shall have been made known to the Company (including any of its agents or representatives) and communicated publicly or to any substantial number of stockholders of the Company or shall have been made directly to the stockholders of the Company by any Person or any Person shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal; or | |
(iii) after the date hereof, an Acquisition Proposal by any Person shall have been made known to the Company (including any of its agents or representatives) and communicated publicly or to any substantial number of stockholders of the Company or shall have been made directly to the stockholders of the Company by any Person, or any Person shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal, and thereafter this Agreement is terminated pursuant to Section 9.1(b)(i) and the Company Stockholder Approval shall not theretofore have been obtained; |
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UNOCAL CORPORATION |
By: | /s/Charles R. Williamson | ||
Name: | Charles R. Williamson | ||
Title: | Chairman of the Board and | ||
Chief Executive Officer |
CHEVRONTEXACO CORPORATION |
By: | /s/David J. O’Reilly | ||
Name: | David J. O’Reilly | ||
Title: | Chairman of the Board and | ||
Chief Executive Officer |
BLUE MERGER SUB INC |
By: | /s/David J. O’Reilly | ||
Name: | David J. O’Reilly | ||
Title: | President |
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A. The Board of Directors is expressly authorized to adopt, amend or repeal the By-laws of the corporation, provided, however, that the By-laws may only be amended in accordance with the provisions thereof. | |
B. Elections of directors need not be by written ballot unless the By-laws of the corporation shall so provide. | |
C. The books of the corporation may be kept at such place within or without the State of Delaware as the By-laws of the corporation may provide or as may be designated from time to time by the Board of Directors. |
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Very truly yours, |
By: |
Name: |
By: |
Title: |
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[Name] | [Date] |
Very truly yours, |
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i) | reviewed certain publicly available financial statements and other business and financial information of the Company and the Parent; | |
ii) | reviewed certain internal financial statements and other financial and operating data, including internal oil and gas reserve and production estimates, concerning the Company prepared by the management of the Company; | |
iii) | reviewed certain financial projections prepared by the management of the Company; | |
iv) | discussed the past and current operations and financial condition and the prospects of the Company, including internal oil and gas reserve and production estimates, with senior management of the Company; | |
v) | reviewed certain internal financial statements and other financial and operating data, including internal oil and gas production estimates, concerning the Parent prepared by the management of the Parent; | |
vi) | reviewed certain financial projections prepared by the management of the Parent; |
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vii) | discussed the past and current operations and financial condition and the prospects of the Parent, including internal oil and gas production estimates, with senior management of the Parent; | |
viii) | reviewed the pro forma impact of the merger on the Parent’s earnings per share, cash flow per share, return on capital employed, and oil and gas reserves and production; | |
ix) | reviewed the reported prices and trading activity for the Company Common Stock and for the Parent Common Stock; | |
x) | compared the financial performance of the Company and the prices and trading activity of the Company Common Stock with that of certain other comparable publicly-traded companies and their securities; | |
xi) | compared the financial performance of the Parent and the prices and trading activity of the Parent Common Stock with that of certain other comparable publicly-traded companies and their securities; | |
xii) | reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions; | |
xiii) | reviewed certain reserve reports prepared by the Company; | |
xiv) | discussed certain information prepared by the management of the Company relating to strategic, financial and operational benefits anticipated from the Merger and the strategic rationale for the Merger with senior management of the Company; | |
xv) | participated in discussions among representatives of the Company, the Parent and certain other parties; | |
xvi) | reviewed the draft Merger Agreement and certain related documents; and | |
xvii) | performed such other analyses and considered such other factors as we have deemed appropriate. |
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Very truly yours, | |
MORGAN STANLEY & CO. INCORPORATED |
By: | /s/Stephen R. Munger | ||
Stephen R. Munger | |||
Managing Director |
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(1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of sec. 251 of this title. | |
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to sec.sec. 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except: |
a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof; | |
b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders; | |
c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or | |
d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph. |
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(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under sec. 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation. |
(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or | |
(2) If the merger or consolidation was approved pursuant to sec. 228 or sec. 253 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall |
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be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given. |
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FORM OF UNOCAL CORPORATION ELECTION FORM
Pursuant to the terms of the Agreement and Plan of Merger, as described and set forth in the Proxy Statement/Prospectus dated June 29, 2005, upon consummation of the merger each share of Unocal Corporation will be converted into the right to receive either a mix of Chevron Corporation common stock and cash, stock, or cash. As a Unocal Corporation stockholder, you are being given the opportunity to elect for each Unocal share:
• | a combination of 0.7725 of a share of Chevron common stock and $16.25 in cash (the “mixed election”); | |
• | 1.03 shares of Chevron common stock (the “all-stock election”) or | |
• | $65 in cash (the “all-cash election”). |
Your election is subject to certain proration rules, as described in the Proxy Statement/Prospectus.
I/we the undersigned, surrender to you for exchange the share(s) identified below. I/we certify that I/we have complied with all requirements as stated in the instructions on the reverse side, was/were the registered holder(s) of the shares of Unocal Corporation common stock represented by the enclosed certificates, have full authority to surrender these certificate(s) and give the instructions in this Election Form and warrant that the shares represented by these certificates are free and clear of all liens, restrictions, adverse claims and encumbrances.
Please complete the back if you would like to transfer ownership or request special mailing.
(1) | Signature:This formmustbe signed by the registered holder(s) exactly as their name(s) appears on the certificate(s) or by person(s) authorized to sign on behalf of the registered holder(s) by documents transmitted herewith. |
X | ||||
Signature of Stockholder | Date | Daytime Telephone # | ||
X | ||||
Signature of Stockholder | Date | Daytime Telephone # |
(2) | SUBSTITUTE FORM W-9 | |||
If the Taxpayer ID Number printed above isINCORRECTOR if the space isBLANK write in theCORRECTnumber here. | ||
Signature: | Date: | |||||
PLACE ANx IN ONE ELECTION BOX ONLY
(3) | o | All Mixed Election | (4 | ) | o | All Stock Election Only | ||||||
(5) | o | All Cash Election Only | (6 | ) | o | No Election | ||||||
(7) | o | Combination* Cash Stock Shares Shares |
*Any remaining shares will be the mixed election.
If you cannot produce some or all of your Unocal Corporation stock certificate(s), you must obtain a lost instrument open penalty surety bond. To do so through Mellon, complete the section below. (Alternatively, you may obtain such a bond through an intermediary of your choice, as long as the insurance company that issues the bond is rated A+XV or better by A.M. Best & Company). Please print clearly.
(8) | AFFIDAVIT OF LOST, MISSING OR DESTROYED CERTIFICATE(S) AND AGREEMENT OF INDEMNITY | |||
THIS AFFIDAVIT IS INVALID IF NOT SIGNED BELOW AND A CHECK IS NOT INCLUDED | ||||
Taxpayer ID or Social Security Number |
TOTAL SHARES LOST | ||||
Please Fill In Certificate No(s). if Known | Number of Shares | |||
Attach separate schedule if needed | ||||
By signing this form I/We swear, depose and state that: I/We am/are the lawful owner(s) of the certificate(s) hereinafter referred to as the “securities” described in the enclosed Election Form. The securities have not been endorsed, pledged, cashed, negotiated, transferred, assigned, or otherwise disposed of. I/We have made a diligent search for the securities and have been unable to find it or them and make this Affidavit for the purpose of inducing the sale, exchange, redemption, or cancellation of the securities, as outlined in the Election Form, without the surrender of the original(s), and also to request and induce Federal Insurance Company to provide suretyship for me to cover the missing securities under its Blanket Bond #8302-00-67. I/We hereby agree to surrender the securities for cancellation should I/We, at any time, find the securities.
I/We hereby agree for myself/ourselves, my/our heirs, successors, assigns and personal representatives, in consideration of the proceeds of the sale, exchange, redemption or cancellation of the securities, and the aforementioned suretyship, to indemnify, protect and hold harmless Federal Insurance Company (the Surety), Mellon Investor Services LLC,Unocal Corporation, Chevron Corporation, all their subsidiaries and any other party to the transaction,from and against any and all loss, costs, and damages including court costs and attorney’s fees, which they may be subject to or liable for in respect to the sale, exchange, redemption, or cancellation of the securities without requiring surrender of the original securities. The rights accruing to the parties under the preceding sentence shall not be limited or abridged by their negligence, inadvertence, accident, oversight, breach or failure to inquire into, contest, or litigate any claim, whenever such negligence, inadvertence, accident, oversight, breach or failure may occur or may have occurred, I/We agree that this Affidavit and Indemnity Agreement is to become part of Blanket Bond #8302-00-67 underwritten by Federal Insurance Company.
Any person who, knowingly and with intent to defraud any insurance company or other person, files an application or statement of claim, containing any materially false information, or conceals for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent insurance act, which is a crime, and shall also be subject to civil penalties as prescribed by law.
XSigned by Affiant (stockholder) | on this (date) | |||||
(Deponent) (Indemnitore) (Heirs Individually) | Month Day Year |
Social Security # | Date | Notary Public | ||||||||
Lost Securities Premium/Service Fee Calculation
If you have lost certificate(s) representing 100 shares or less, there is only a $25.00 service fee.
1. | Enter the number of shares that are lost: x (Cash Rate) $65.00=$ Share Value* | |||||
*If the share value exceeds $500,000, or if the shareholder is foreign or deceased, do not complete this affidavit, as it will be considered invalid. Complete only the Election Form and contact Mellon Investor Services regarding the lost certificate(s). | ||||||
2. | Please Enter Share Value $___(Share Value) x (2%) or .02=Multiply by 2% (.02) for Surety Premium. | $ | Surety Premium | |||
3. | Add $25.00 for service fee | $ | Service Fee | |||
Total Amount Due (Add Lines 2 & 3) | $ | Total Fee | ||||
Please make all checks payable to:Mellon Investor Services, 85 Challenger Rd., Ridgefield Park, NJ 07660.Any checks over $250.00 must be in the form of a certified check, cashier’s check or money order. |
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(9)
Special Transfer Instructions
If you want your Chevron Corporation common DRS Stock Distribution Statement, check for fractional shares, and/or check for cash to be issued inanother name, fill in this section with the information for thenewaccount name. | Signature Guarantee Medallion |
If the Exchange Agent has not RECEIVED an effective Election Form from a holder of shares of Unocal Corporation Common Stock at the Exchange Agent’s designated office by 5:00 p.m., Eastern Daylight Time, on or prior to August 9, 2005, such holder shall be deemed to have made no election and such holder’s shares of Unocal Corporation Common Stock shall be deemed to be No Election Shares (as defined in the Merger Agreement).
INSTRUCTIONS FOR COMPLETING THE ELECTION FORM
PLEASE NOTE: TOTAL SHARES YOU HOLD ARE LISTED ABOVE YOUR NAME AND ADDRESS (STOCK CERTIFICATE SHARES ON LEFT AND UNOCAL DIVIDEND REINVESTMENT SHARES ON RIGHT)
(1) | Sign, date and include your daytime telephone number in this Election Form in Box 1 and after completing all other applicable sections return this form and your stock certificates in the enclosed envelope. | |||
(2) | PLEASE SIGN IN BOX 2 TO CERTIFY YOUR TAXPAYER ID OR SOCIAL SECURITY NUMBERif you are a U.S. Taxpayer. If the Taxpayer ID or Social Security Number is incorrect or blank, write the corrected number in Box 2 and sign to certify. Please note that Mellon Investor Services may withhold 28% of your proceeds as required by the IRS if the Taxpayer ID or Social Security Number is not certified on our records. If you are a non - U.S. Taxpayer, please complete and return form W-8BEN. | |||
(3) | If you are electing to receive the mixed election for all of your Unocal shares, please check this box. | |||
(4) | If you are electing to receive all stock, please check this box only. | |||
(5) | If you are electing to receive all cash, please check this box only. | |||
(6) | To specify no election, please check this box only. | |||
(7) | If you choose the combination, you must indicate the number of shares you are electing to receive all stock, and/or all cash. You will receive the mixed election for any remaining shares. | |||
(8) | If you cannot locate some or all of your Unocal Corporation stock certificates, please follow the instructions provided and complete Box 8, the Affidavit of Lost, Missing or Destroyed Certificates section, on the front side of the Election Form. | |||
(9) | If you want your Chevron common DRS Stock Distribution Statement, check for fractional shares, and/or check for cash to be issued in another name, complete the Special Transfer Instructions in Box 9. Signature(s) in Box 9 must be medallion guaranteed. | |||
Please refer to the letter of transmittal included in your packet for additional information and instructions. If you wish to designate an allocation of the merger consideration among your Unocal shares for tax purposes, please consult your tax advisor. |
HOW TO CONTACT MELLON INVESTOR SERVICES
By Telephone — 9 a.m. to 7 p.m. Eastern Daylight Time, Monday through Friday, except for bank
holidays:
From within the U.S., Canada or Puerto Rico:
1-866-865-6324 (Toll Free)
From outside the U.S.:
1-201-329-8660 (Collect)
WHERE TO FORWARD YOUR ELECTION FORM
By Regular Mail:
Mellon Investor Services LLC
Attn: Reorganization Dept.
P.O. Box 3301
South Hackensack, NJ 07606
By Overnight Courier or
Registered Insured Mail:
Mellon Investor Services LLC
Attn: Reorganization Dept.
85 Challenger Road
Mail Drop-Reorg
Ridgefield Park, NJ 07660
By Hand:
Mellon Investor Services LLC
Attn: Reorganization Dept.
120 Broadway, 13th Floor
New York, NY 10271
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FORM OF UNOCAL STOCKHOLDER LETTER
June 29, 2005
Dear Unocal Stockholders:
Thank you for your support toward completing the merger between Chevron Corporation and Unocal Corporation. The merger will be considered at a special meeting of Unocal stockholders to be held on August 10, 2005. Pending receipt of stockholder and all necessary regulatory approvals, we presently expect that the merger will become effective in the first half of August 2005.
Under the terms of the merger agreement, each Unocal stockholder has the opportunity to elect to receive, for each share of Unocal common stock that he or she owns, a combination of 0.7725 of a share of Chevron common stock and $16.25 in cash (the “mixed election”),1.03 shares of Chevron common stock (the “stock election”), or $65.00 in cash (the “cash election”).
Stockholders may make the mixed election, the stock election and/or the cash election with respect to all or any number of their Unocal shares. The cash elections and stock elections of Unocal stockholders will be subject to proration to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all of the outstanding shares of Unocal common stock taken together, after taking into account all of the elections made by all of the Unocal stockholders.
All the documents necessary to complete your election are included in this package. Please review the following documents carefully:
(1) | TheElection Formfor making your mixed election, stock election, cash election, or a combination of mixed, stock and/or cash elections and for surrendering your Unocal stock certificate(s), which includes aSubstituteForm W-9 to certify your taxpayer identification/social security number. | |||
(2) | TheInstructions for Completing the Election Formregarding the election process. | |||
(3) | ANotice of Guaranteed Deliveryto be used if none of the procedures for delivering your Unocal stock certificate(s) can be completed on a timely basis. | |||
(4) | Frequently Asked Questions. | |||
(5) | AReturn Envelopefor mailing items to the Exchange Agent, Mellon Investor Services LLC. |
Please complete the Election Form, attach the stock certificate(s) representing the Unocal shares covered by your election or a properly completed Notice of Guaranteed Delivery, and deliver these items to Mellon Investor Services LLC.This form and your stock certificate(s) or Notice of Guaranteed Delivery must be RECEIVED no later than the election deadline, which will be 5:00 p.m., Eastern Daylight Time, on August 9, 2005.We presently expect that the merger will occur in the first half of August 2005. In the event that the expected effective time of the merger and the election deadline change, we will announce the revised dates, in a press release, on our web sites at www.unocal.com and www.chevron.com, and in a filing with the Securities and Exchange Commission. You may also obtain up-to-date information regarding the election deadline by calling the Exchange Agent at 1-866-865-6324.
There is a limited period of time for you to deliver your Election Form and your Unocal stock certificate(s). Therefore, we encourage you to submit your Election Form and Unocal stock certificate(s) promptly. If you do not make a valid election, you will be deemed to have made an election to receive the mixed consideration for all of your shares of Unocal common stock surrender with the Election Form. You should note that if you elect to receive Chevron common stock, the value of the shares you receive will depend on the market value of Chevron’s common stock at the effective time of the merger. Information regarding Chevron stock prices can be obtained by calling the Exchange Agent at 1-866-865-6324 or on Chevron’s web site at www.chevron.com.
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You can find additional information on the merger and related transactions in the Proxy Statement/Prospectus dated June 29, 2005, available through the Securities and Exchange Commission’s website at http://www.sec.gov, as well as in the enclosed Instructions for Completing the Election Form. The answer to Question No. 20 in the Frequently Asked Questions explains how you can obtain a copy of the Proxy Statement/Prospectus. The information contained in the Proxy Statement/Prospectus speaks as of June 29, 2005, and does not reflect subsequent developments. However, it incorporates by reference subsequent filings with the Securities and Exchange Commission by Chevron and Unocal. You should rely only on the information contained or expressly incorporated by reference in the Proxy Statement/Prospectus. We have not authorized anyone to provide you with information that is different from what is contained or incorporated by reference in that document.
If you cannot locate your stock certificate(s) or should you have any questions regarding the forms or the election process, contact the Exchange Agent, Mellon Investor Services LLC at 1-866-865-6324.
Bryan J. Pechersky
Corporate Secretary
Unocal Corporation
Lydia I. Beebe
Corporate Secretary
Chevron Corporation
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FORM OF
Chevron Corporation/Unocal Corporation Merger
Frequently Asked Questions
1. When will the merger be completed?
The companies presently expect that the merger will become effective in the first half of August 2005. The merger will be considered at a special meeting of Unocal stockholders to be held on August 10, 2005, and we expect to receive all of the required regulatory approvals in the near future. Based on this timetable, the election deadline for Unocal stockholders will be 5:00 p.m., Eastern Daylight Time, August 9, 2005. If the expected effective time of the merger and the election deadline change, Chevron and Unocal will provide information regarding the revised dates in a press release, on their websites at www.chevron.com and www.unocal.com and in a filing with the Securities and Exchange Commission. You may also obtain up-to-date information regarding the election deadline by calling Mellon Investor Services LLC at 1-866-865-6324.
2. What will I receive in exchange for my Unocal shares upon completion of the merger?
You have the opportunity to elect to receive, for each share of Unocal common stock that you own:
• | a combination of 0.7725 of a share of Chevron common stock and $16.25 in cash (a “mixed election”); | |||
• | 1.03 shares of Chevron common stock (subject to proration in certain circumstances) (a “stock election”); or | |||
• | $65.00 in cash (subject to proration in certain circumstances) (a “cash election”). |
3. Do I have to make the same election with respect to all of the Unocal shares that I own?
No.
You may specify the number of Unocal shares with respect to which you want to make a stock and/or cash election in the spaces provided in Box 7 on the Election Form, in which case the balance of your Unocal shares, if any, will receive the mixed consideration.
4. Will I receive any fractional shares?
No.
No fractional shares of Chevron common stock will be delivered in the merger. Instead, you will be entitled to receive cash, without interest, for any fractional share of Chevron common stock you might otherwise have been entitled to receive, based on a portion of the proceeds from the sale of all fractional shares in the market by the Exchange Agent.
5. How do I make an election if I hold my shares through a broker or other nominee?
If you hold your shares through a broker or other nominee, they must make an election for your shares on your behalf in accordance with your instructions. Please instruct them how to exchange your shares by completing the election instructions you will receive from them.
6. When is my Election Form due?
Your Election Form and your Unocal stock cer-tificate(s) must beRECEIVEDby the Exchange Agent, Mellon Investor Services LLC, by the election deadline, which is 5:00 p.m., Eastern Daylight Time, August 9, 2005. If you hold your shares through a broker or other nominee, you must return your election instructions to them in time for them to respond by the election deadline. Please refer to the instructions provided by your broker or other nominee.
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7. Am I guaranteed to receive the Chevron common stock or cash I ask for on the Election Form?
No.
If the result of the elections by all Unocal stockholders would require an amount greater than the product of $16.25 and the total number of outstanding Unocal shares to be paid in cash, you will not receive $65.00 in cash for each share of Unocal common stock with respect to which you have made a cash election, but instead will receive a mix of stock and cash calculated to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all outstanding shares of Unocal common stock taken together, after taking into account all of the elections made by all of the Unocal stockholders. In all cases, you will receive at least $16.25 for each of your shares with respect to which you make a cash election. Similarly, if the result of the elections by all Unocal stockholders would require a number of shares of Chevron common stock greater than the product of 0.7725 and the total number of total outstanding Unocal shares to be converted into Chevron shares, you will not receive 1.03 shares of Chevron common stock for each share of Unocal common stock, but instead will receive a mix of stock and cash calculated to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all outstanding shares of Unocal common stock taken together, after taking into account all of the elections made by all of the Unocal stockholders. In all cases, you will receive at least 0.7725 of a share of Chevron common stock for each of your shares with respect to which you make a stock election.
Thus, even if you make a valid election, you may not receive exactly the form of consideration that you request. The proration rules referenced in this paragraph are explained in detail under the caption “The Merger Agreement—Merger Consideration” in the Proxy Statement/Prospectus, dated June 29, 2005, previously delivered to you.
8. What happens if I do not make an election, make more than one election on the Election Form or miss the election deadline?
If you do not make an election, make more than one election on the Election Form or miss the election deadline, you will be deemed to have indicated no election as to the form of consideration that you will receive in the merger, and you will receive the mixed consideration, consisting of 0.7725 of a share of Chevron common stock and $16.25 in cash, for each share of Unocal common stock that you surrender.
9. I have received more than one set of Election Materials in connection with the election. Do I need to complete them all?
Yes. If you received more than one set of Election Materials, this indicates that you own stock in more than one manner or you own stock in more than one name. For example, you may have shares registered directly with Unocal; you may own Unocal shares through a third party, such as a broker or the administrator of Unocal’s Dividend Reinvestment Plan; or you may own shares in both single name and joint name. Each set of Election Materials you receive is specific to the manner in which you hold your Unocal shares. Failure to complete one of the Election Forms means that no election will be made with respect to the shares to which that Election Form applies.
10. What are the tax consequences associated with each of the election options?
Different tax consequences may be associated with each of the election options. The tax consequences to you of the merger will depend on the facts of your own situation. Therefore, you should consult your tax advisor for a full understanding of the tax consequences to you of exchanging your Unocal shares for Chevron shares, cash, or a combination of Chevron shares and cash. You can also refer to the general description of tax consequences under the caption, “The Merger—Material Federal Income Tax Consequences of the Merger” in the Proxy Statement/Prospectus, dated June 29, 2005.
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11. Will Unocal stock continue to trade until the effective time of the merger?
Yes. Unocal stock will continue to trade on the NYSE during the election period and until the effective time of the merger. However, after your shares are sent to the Exchange Agent, you will not be able to trade them.
12. What will I receive as future dividends if I elect to receive Chevron common stock?
Your Chevron shares will be eligible for any Chevron dividends that are declared by the Chevron Board of Directors with a record date after the effective date of the merger. The current Chevron dividend is $0.45 per share on a quarterly basis, paid on or about the 10th day of March, June, September and December.
It is important to note that if you are entitled to receive Chevron shares in the merger, you will not receive any Chevron dividends to which you are entitled until your Unocal stock certificates are delivered to the Exchange Agent for exchange.
13. How long will it take to receive cash or Chevron shares after the effective date of the merger?
If the Exchange Agent receives a valid Election Form and your Unocal stock certificate(s) by the Election Deadline, the cash and/or Chevron shares to which you are entitled will be mailed within ten days after the effective date of the merger. If the Exchange Agent receives your Unocal stock certificate(s) after the Election Deadline, you will receive the cash and/or Chevron shares as soon as practicable from the Exchange Agent.
Chevron shares will be issued via a Direct Registration System®(DRS) stock distribution statement. You will not receive a stock certificate.
14. What if I have lost my Unocal stock certificate(s)?
You should complete Box 8 of the Election Form and pay the total fee indicated therein or contact Mellon Investor Services LLC at 1-866-865-6324.
15. What if my address has changed?
You should either correct your address on the Election Form or submit your new address in writing with the Election Form.
16. Should I insure the Unocal stock certificate(s) I mail for exchange?
We suggest that you return your Unocal stock certificate(s) by registered mail and insure the certificate(s) for two percent of the value of the shares.If you choose to send your certificates by registered insured mail or overnight delivery, do not use the addressed envelope included with this mailing.Please send them to the following address:
Mellon Investor Services LLC
Reorganization Department
85 Challenger Road
Ridgefield Park, NJ 07660
17. Should I sign my Unocal stock certificate(s) before returning them?
No. Your completed and signed Election Form will replace the necessity to sign your stock certificate(s).
18. What happens to my shares held in the Unocal Dividend Reinvestment Plan?
The election you make on your Election Form applies to all of your Unocal shares, including shares held in your Dividend Reinvestment Plan account. Therefore, subject to the proration procedures described in Answer 7 above, you will receive a combination of Chevron common stock and cash, Chevron common stock or cash in accordance with your election.
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19. What is the trading symbol for Chevron common stock?
Chevron common stock is listed on the New York Stock Exchange and the trading symbol is “CVX.”
20. What if I have lost or misplaced my copy of the Proxy Statement/Prospectus dated June 29, 2005?
In making your election to receive the mixed consideration, shares of Chevron common stock or cash for your shares of Unocal common stock, you should refer to the information included in the Prospectus/Proxy Statement, dated June 29, 2005, mailed in connection with the special meeting of stockholders of Unocal to be held on August 10, 2005 and available through the Securities and Exchange Commission’s website.atwww.sec.gov.If you have lost or misplaced your copy of the Prospectus/Proxy Statement, you may obtain an additional copy by contacting: MacKenzie Partners at (800)322-2885, Unocal Corporation at (800) 252-2233 or Chevron Corporation at (925) 842-1000.
21. After the merger, if I receive Chevron common stock will I be automatically enrolled in Chevron’s Dividend Reinvestment Plan?
No. Shortly after the merger, you will receive information about enrolling in Chevron’s Dividend Reinvestment and Stock Purchase Plan from Chevron’s Transfer Agent, Mellon Investor Services LLC. At that time, you may enroll in the plan by mail or online.
22. Who do I call if I have additional questions or need more information?
You may contact the Exchange Agent, Mellon Investor Services LLC, at 1-866-865-6324.
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FORM OF
INSTRUCTIONS FOR COMPLETING THE ELECTION FORM
These instructions are for the accompanying Election Form for the registered stockholders of Unocal Corporation. All elections are subject to the Agreement and Plan of Merger, dated April 4, 2005, by and among Unocal Corporation (“Unocal”), Chevron Corporation (“Chevron”) and Blue Merger Sub, a wholly owned subsidiary of Chevron (the “merger agreement”), which was furnished to stockholders as part of the Proxy Statement/Prospectus dated June 29, 2005.
GENERAL INSTRUCTIONS
The Election Form is to be completed and submitted to Mellon Investor Services LLC (the Exchange Agent) prior to the Election Deadline indicated below by those holders of Unocal shares desiring to make an Election. It also may be used, following consummation of the merger, as a letter of transmittal to accompany the surrender of Unocal shares to be exchanged for the merger consideration by holders of Unocal shares who do not complete and submit the Election Form prior to the Election Deadline, although any such Unocal shares so surrendered will be treated as No Election Shares (as defined in the merger agreement) for all purposes of the merger agreement.
Until a record holder’s Unocal share certificate(s) or confirmation of a book-entry transfer of the holder’s Unocal shares into the Exchange Agent’s account at DTC is received by the Exchange Agent at one of the addresses set forth on the front of the Election Form, together with any other documents the Exchange Agent may require, and until the same are processed for exchange by the Exchange Agent, the holder will not receive a Direct Registration System (DRS) stock distribution statement regarding such holder’s Chevron shares and/or check representing cash consideration or cash in lieu of fractional shares (if any) in exchange for the holder’s Unocal share certificate(s). No interest will accrue on any cash consideration or any cash in lieu of fractional shares.
Any holder of Unocal shares who has made an election by submitting an Election Form to the Exchange Agent may at any time prior to the Election Deadline change that holder’s election by submitting to the Exchange Agent a revised, later-dated Election Form, properly completed and signed, that is received by the Exchange Agent prior to the Election Deadline. Any holder of Unocal shares may at any time prior to the Election Deadline revoke an election and withdraw the certificate(s) for the holder’s Unocal shares deposited with the Exchange Agent by written notice to the Exchange Agent received prior to the Election Deadline. After the Election Deadline, a holder of Unocal shares may not change an election and may not withdraw such holder’s certificate(s) unless the merger agreement is terminated.
If the Exchange Agent, Mellon Investor Services LLC, has not RECEIVED a properly completed Election Form from a holder of shares of Unocal common stock at the Exchange Agent’s designated office by 5:00 p.m., Eastern Daylight Time, on or prior to August 9, 2005 (the “Election Deadline”), such holder shall be deemed to have made no election and such holder’s shares of Unocal common stock shall be deemed to be No Election Shares (as defined in the merger agreement).
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ELECTION FORM
ABOUT YOU AND YOUR SHARES (BOX 1)
Shown above Box 1 of the Election Form are the registration number of your account and the number and type of shares owned by you as reflected on the records of Unocal at the time of mailing these instructions. The total stock certificate shares are on the left and the dividend reinvestment shares are on the right above your name and address. If your stock certificate(s) is lost, please complete Box 8 of the Election Form or contact the Exchange Agent, Mellon Investor Services, at 1-866-865-6324. Strike any incorrect address information that is printed above Box 1 of the Election Form. Clearly print the correct address in the space beside the printed information.
ELECTION OPTIONS AND REQUIRED SIGNATURES (BOXES 1-7)
The terms of the merger agreement allow you to choose, subject to certain limitations, the type of consideration you receive for each of your shares. For more information, please refer to the Proxy Statement/Prospectus dated June 29, 2005.Regardless of the option you choose, your stock certificate(s) must be returned with the Election Form for your election to be valid.
A) | Election Options (BOXES 3-7) |
Select from the following options:
Box 3. Exchange each of your Unocal shares for a combination of $16.25 in cash and 0.7725 of a share of Chevron common stock (“all-mixed election”).Check Box 3 on the Election Form if you would like to elect the mixed election for all of your Unocal shares being surrendered with this Election Form.
Box 4. Exchange each of your Unocal shares for Chevron common stock (“all-stock election only”). Check Box 4 on the Election Form if you would like to make the all-stock election for each of your Unocal shares being surrendered with this election form. You will receive 1.03 shares of Chevron common stock for each Unocal share, subject to proration to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all of the outstanding shares of Unocal common stock taken together, after taking into account all of the elections made by all of the Unocal stockholders. No fractional shares will be issued and you will receive a cash payment in lieu of fractional shares.
Box 5. Exchange each of your Unocal shares for cash (“all-cash election only”).Check Box 5 on the Election Form if you would like to make the all-cash election for all of your Unocal shares being surrendered with this Election Form. You will receive $65.00 for each Unocal share you surrender, subject to proration to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all of the outstanding shares of Unocal common stock taken together, after taking into account all of the elections made by all of the Unocal stockholders.
Box 6. No preference indicated as to form of consideration.Check Box 6 on the Election Form if you do not wish to indicate any preference as to the form of consideration you will receive for your Unocal shares in the merger.
2
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Box 7. Exchange some of your Unocal shares for all cash, some of your Unocal shares for all stock and some of your Unocal shares for a combination of cash and stock (combination).Check Box 7 if you wish to make the stock election and/or the cash election with respect to some, but not all, of your Unocal shares being surrendered with the Election Form. Indicate the number of shares for which you are electing to receive all stock and/or all cash in the space provided. You will receive the mixed election for any remaining shares.
B) | Required Signatures (Box 1) |
All individuals listed on the account must sign the Election Form.Please be sure to include your daytime telephone number.
By your signature, you (1) acknowledge receipt of the Proxy Statement/Prospectus and agree that all elections, instructions and orders in the Election Form are subject to the terms and conditions of the merger agreement, the Proxy Statement/Prospectus and the instructions applicable to the Election Form; (2) represent and warrant that you are, as of the date hereof, and will be, as of the effective time of the merger, the record holder of the Unocal shares represented by the share certificate(s) surrendered herewith, with good title to those common shares and full power and authority (i) to sell, assign and transfer those common shares free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims and (ii) to make the election indicated on this Election Form; (3) agree that you will, upon request, execute any additional documents necessary or desirable to complete the surrender and exchange of the Unocal shares represented by the share certificate(s) surrendered herewith; (4) irrevocably appoint the Exchange Agent, as your agent, to effect the exchange pursuant to the merger agreement and the instructions hereto; (5) authorize and instruct the Exchange Agent to deliver the certificate(s) covered hereby, and to receive on your behalf, in exchange for the Unocal shares represented by that certificate(s), any check and/or any cer-tificate(s) for Chevron shares issuable to the undersigned; (6) authorize the Exchange Agent to follow any election and to rely upon all representations, certifications and instructions contained in the Election Form; and (7) agree that all authority conferred or agreed to be conferred in the Election Form is binding upon your successors, assigns, heirs, executors, administrators and legal representatives and is not affected by, and survives, your death or incapacity.
C) | W-9 Certification (Box 2) |
Certify that the Social Security Number printed on the form is correct.Regardless of whether you have previously furnished a Taxpayer Identification Number (TIN), Social Security Number (SSN) or the certification onForm W-9 with respect to dividend payments, you must again furnish this number on the SubstituteForm W-9 Certification.
If you are a trustee, executor, administrator or someone who is acting on behalf of a stockholder and your name is not printed on the Election Form, you must include your full title and send us proper evidence of your authority to exchange the shares.
VALIDITY OF SURRENDER; IRREGULARITIES
Any disputes regarding your election or the elections made by other Unocal stockholders will be resolved by the Exchange Agent (in consultation with Unocal and Chevron) and its decision will be final for all parties concerned. The Exchange Agent has the right, subject to reasonable discre-
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tion, to reject any and all Election Forms which it determines are not in proper form or to waive minor defects in any Election Form. Surrenders of stock certificate(s) will not be effective until all defects or irregularities that have not been waived by the Exchange Agent have been corrected. None of the Exchange Agent, Unocal or Chevron is under any obligation to provide notification of any defects in the deposit and surrender of any certificate(s) formerly representing Unocal shares, nor shall the Exchange Agent, Unocal or Chevron be liable for any failure to give any such notification. Please return your Election Form promptly to allow sufficient time to correct any possible deficiencies before the Election Deadline.
LOST, MISSING OR DESTROYED CERTIFICATE(S) (BOX 8)
Complete all of the blanks in Box 8, including Numbers 1-3. Make checks payable to Mellon Investor Services.
UNLESS THERE ARE SPECIAL TRANSFER OF PAYMENT INSTRUCTIONS OR SPECIAL DELIVERY INSTRUCTIONS, OR YOU ARE REPORTING LOST, STOLEN OR DESTROYED CERTIFICATES, YOU NEED NOT CONTINUE TO THE NEXT SECTION. HOWEVER, BEFORE YOU MAIL YOUR ELECTION FORM, MAKE SURE YOU DO THE FOLLOWING:
a) | Verify the election you have chosen; | |||
b) | Sign, and date the Election Form and include your daytime phone number; | |||
c) | Verify the SSN or TIN printed on the form and sign the Substitute Form W-9 certification; and | |||
d) | Include your Unocal stock certificates, if applicable, along with the Election Form in the enclosed envelope. | |||
e) | If you are reporting lost, stolen or destroyed certificates, please complete Box 8 or contact Mellon Investor Services at 1-866-865-6324. |
SPECIAL TRANSFER INSTRUCTIONS (Box 9)
If you want your Chevron common stock registered or your check made payable in a name or names different from the name(s) printed on the Election Form, please follow the instructions below.
First, print the name(s) and address(es) of the person(s) receiving the shares in the space provided under Special Transfer Instructions. Then, refer to the procedures printed below for the requirements needed to make some of the most frequently requested types of registration changes. These documents must accompany your Election Form.
Name change due to marriage or transfer of ownership to another individual:
1. | Obtain a signature guarantee for the stockholder whose name is printed on the Election Form. If it is a joint account both owners must sign and have their signatures guaranteed. Each signature must be guaranteed by an officer of a commercial bank, trust company, credit union or savings & loan who is a member of the Securities Transfer Agents Medallion Program (STAMP), or by a stockbroker who is a member of STAMP.The signature of a Notary Public is not acceptable for this purpose. |
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2. | Complete the Substitute Form W-9 in Section 2 of the Election Form by listing the Taxpayer Identification Number (TIN) or Social Security Number (SSN) that is to be used for tax reporting on the new account. The individual whose TIN or SSN is being used must sign the Substitute Form W-9. Please refer to theInstructions for Completing SubstituteForm W-9 for more detailed information. |
Stockholder whose name is printed on the Election Form is deceased. You are the executor or administrator of the estate:
1. | Provide a certified(under raised seal)copy of the Court Qualification appointing the legal representative(dated within 60 days). |
2. | Obtain a signature for the legal representative. The signature must be guaranteed by an officer of a commercial bank, trust company, credit union or savings & loan who is a member of the Securities Transfer Agents Medallion Program (STAMP), or by a stockbroker who is a member of STAMP.The signature of a Notary Public is not acceptable for this purpose. |
3. | Complete the Substitute Form W-9 in Section 2 of the Election Form by listing the Taxpayer Identification Number (TIN) or Social Security Number (SSN) that is to be used for tax reporting on the new account. If the account is being registered in the name of the estate and not to an individual, a TIN is required. Please refer to theInstructions for Completing SubstituteForm W-9 for more detailed information. |
The account is a joint account and one of the account holders is deceased. Transferring shares to the survivor only:
1. | Provide a certified(under raised seal)copy of death certificate. | |||
2. | Provide the survivor’s signature.(Signature guarantee is not necessary in this case.) | |||
3. | Complete the Substitute Form W-9 in Section 2 of the Election Form by listing the Taxpayer Identification Number (TIN) or Social Security Number (SSN) that is to be used for tax reporting on the new account. The individual whose TIN or SSN is being used must sign the Substitute Form W-9. Please refer to theInstructions for Completing SubstituteForm W-9 for more detailed information. |
The account is a joint account and one of the account holders is deceased. Transferring shares to the survivor and adding a name:
1. | Provide a certified(under raised seal)copy of death certificate. | |||
2. | The survivor must obtain a signature guarantee. The signature must be guaranteed by an officer of a commercial bank, trust company, credit union or savings & loan who is a member of the Securities Transfer Agents Medallion Program (STAMP), or by a stockbroker whose is a member of STAMP.The signature of a Notary Public is not acceptable for this purpose. | |||
3. | Complete the Substitute Form W-9 in Section 2 of the Election Form by listing the Taxpayer Identification Number (TIN) or Social Security Number (SSN) that is to be used for tax reporting on the new account. The individual whose TIN or SSN is being used must sign the Substitute Form W-9. Please refer to theInstructions for Completing SubstituteForm W-9 for more detailed information. |
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The account is a custodial account and the former minor has reached the legal age of majority:
1. | The former minor must obtain a signature guarantee. The signature must be guaranteed by an officer of a commercial bank, trust company, credit union or savings & loan who is a member of the Security Transfer Agents Medallion Program (STAMP), or by a stockbroker who is a member of STAMP.The signature of a Notary Public is not acceptable for this purpose. | |||
2. | Provide a certified(under raised seal)copy of the birth certificate for the former minor. | |||
3. | Complete the Substitute Form W-9 in Section 2 of the Election Form by listing the Taxpayer Identification Number (TIN) or Social Security Number (SSN) that is to be used for tax reporting on the new account. The individual whose TIN or SSN is being used must sign the Substitute Form W-9. Please refer to theInstructions for Completing SubstituteForm W-9 for more detailed information. |
If the request is being made by a minor who has now reached the age of majority:
1. | The former minor must obtain a signature guarantee. This signature must be guaranteed by an officer of a commercial bank, trust company, credit union or savings & loan who is a member of the Securities Transfer Agents Medallion Program (STAMP), or by a stockbroker who is a member of STAMP.The signature of a Notary Public is not acceptable for this purpose. |
2. | Complete the Substitute Form W-9 in Section 2 of the Election Form by listing the Taxpayer Identification Number (TIN) or Social Security Number (SSN) that is to be used for tax reporting on the new account. The individual whose TIN or SSN is being used must sign the Substitute Form W-9. Please refer to theInstructions for Completing SubstituteForm W-9 for more detailed information. |
You want to have the account registered in the name of a trust:
1. | Obtain a signature guarantee for the stockholder whose name is printed on the Election Form. If it is a joint account both owners must sign and have their signatures guaranteed. Each signature must be guaranteed by an officer of a commercial bank, trust company, credit union or savings & loan who is a member of the Securities Transfer Agents Medallion Program (STAMP), or by a stockbroker who is a member of STAMP.The signature of a Notary Public is not acceptable for this purpose. | |||
2. | Provide a copy of the first and last pages of the trust agreement. | |||
3. | Complete the Substitute Form W-9 in Section 2 of the Election Form by listing the Taxpayer Identification Number (TIN) or Social Security Number (SSN) that is to be used for tax reporting on the new account. The individual whose TIN or SSN is being used must sign the Substitute Form W-9. Please refer to theInstructions for Completing SubstituteForm W-9 for more detailed information. |
NOTICE OF GUARANTEED DELIVERY.
If your Unocal share certificates are not immediately available or you cannot deliver your certificates and all other required documents to the Exchange Agent or cannot complete the procedure for delivery of Unocal shares by book-entry transfer into the Exchange Agent’s account at the Depository Trust Company (DTC) prior to the Election Deadline, you may deliver your Unocal shares by prop-
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erly completing and duly executing a Notice of Guaranteed Delivery if (1) the Guarantee of Delivery is made by or through a member of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or by a commercial bank or trust company in the United States; (2) prior to the Election Deadline, the Exchange Agent receives a properly completed and duly executed Notice of Guaranteed Delivery, as provided herein, together with a properly completed and duly executed Election Form and any other documents required by the Election Form; and (3) the certificates for all the Unocal shares covered by the Notice of Guaranteed Delivery, in proper form for transfer (or confirmation of a book-entry transfer of such Unocal shares into the Exchange Agent’s account at DTC), are received by the Exchange Agent within three New York Stock Exchange trading days after the Election Deadline. If the above requirements are not satisfied in a timely manner, you will be deemed to have made no election.
If your circumstances differ from those listed above, or if you have any other questions, please contact Mellon Investor Services at 1-866-865-6324.
DIVIDEND REINVESTMENT PLAN PARTICIPANTS
Any reference to the term “certificate” means Unocal common shares held in certificate form. Your Unocal Dividend Reinvestment Plan shares are held as book entry; therefore, you will not have any certificates to surrender. However, you are still required to complete the Election Form as explained in the Section entitled ELECTION OPTIONS AND REQUIRED SIGNATURES in the INSTRUCTIONS section of this booklet. Please note: on July 1, 2005, Unocal suspended the Unocal Dividend Reinvestment Plan and any future dividend declared by the Unocal board of directors will be paid in cash and will not be reinvested. In addition, no further optional cash payments for the purchase of additional shares will be accepted.
DELIVERY INSTRUCTIONS
Mellon Investor Services LLC
For information (Toll Free):1-866-865-6324
By Regular Mail
Mellon Investor Services LLC
Reorganization Department
Post Office Box 3301
South Hackensack, NJ 07606
By Registered Insured Mail or Overnight Delivery:
Mellon Investor Services LLC
Reorganization Department
85 Challenger Road
Ridgefield Park, NJ 07660
By Hand:
Mellon Investor Services LLC
Reorganization Department
120 Broadway
13th Floor
New York, NY 10271
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MERCER TRUST COMPANY, TRUSTEE – UNOCAL SAVINGS PLAN | Special Meeting of Stockholders – Voting Instructions | Please | o | |
SEE REVERSE SIDE |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2 | ||||||||||||
I understand that Mercer Trust Company, the Trustee, is the holder of record and custodian of all shares of Unocal Corporation (the “Company”) common stock allocated to me under the Unocal Savings Plan. Further, I understand that my voting instructions are solicited on behalf of the Company’s Board of Directors for the Special Meeting of Stockholders to be held on August 10, 2005 relating to the merger of the Company with and into a wholly-owned subsidiary of Chevron Corporation. Accordingly, please vote my shares as follows: | ||||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||
Item 1: | Approval and adoption of the Agreement and Plan of Merger, dated as of April 4, 2005, by and among Unocal Corporation, Chevron Corporation and Blue Merger Sub Inc., a wholly owned subsidiary of Chevron Corporation | o | o | o | ||||||||
FOR | AGAINST | ABSTAIN | ||||||||||
Item 2: | Approval of any adjournment or postponement of the special meeting, if necessary, to solicit additional proxies | o | o | o | ||||||||
Signature _____________________________ Signature _____________________________ Date ________________ | |
Please mark, date and sign as your name appears above and return in the enclosed envelope. If acting as executor, administrator, trustee or guardian, you should so indicate when signing. If the signer is a corporation, please sign the full corporate name, by duly authorized officer. If shares are held jointly, each stockholder should sign. | |
• See other side for important information • |
Ù FOLD AND DETACH HEREÙ |
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time on August 8, 2005.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
http://www.proxyvoting.com/ucl-empsp | 1-866-540-5760 | |||||||||
Use the internet to vote your proxy. Have your proxy card in hand when you access the web site. | Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
View Unocal’s Proxy Statement on the World Wide Web:
http://www.unocal.com/specialproxy
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Address Change/Comments (Mark the corresponding box on the reverse side) |
Ù FOLD AND DETACH HEREÙ |
TO: MEMBERS OF THE UNOCAL SAVINGS PLAN
Your voting instructions are solicited on behalf of the Board of Directors of Unocal Corporation for the Special Meeting of Stockholders to be held on August 10, 2005. The shares in your account will be voted as directed, subject to the fiduciary duties of an independent fiduciary that will be hired by Unocal to oversee such voting. IN THE ABSENCE OF SUCH DIRECTION, THE TRUSTEE OF THE UNOCAL SAVINGS PLAN WILL VOTE THE SHARES IN THE SAME PROPORTION ON EACH ISSUE AS IT VOTES THE SHARES FOR WHICH IT RECEIVES DIRECTION, EXCEPT AS LIMITED BY LAW AND AS DIRECTED BY THE INDEPENDENT FIDUCIARY. It is understood that the Trustee will have the authority to vote or give proxy to vote on all other matters which may properly come before the meeting and at any adjournment or postponement thereof. Your voting instructions will be kept confidential by the independent voting tabulator.
Please date, sign and return this form in the enclosed envelope no later than 11:59 p.m., New York City time on August 8, 2005.
Mercer Trust Company, Trustee Unocal Savings Plan Investors Way Norwood, MA 02062 |
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE SPECIAL MEETING OF STOCKHOLDERS OF UNOCAL CORPORATION | Please | o | ||||
SEE REVERSE SIDE |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2 | ||||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||
Item 1: | Approval and adoption of the Agreement and Plan of Merger, dated as of April 4, 2005, by and among Unocal Corporation, Chevron Corporation and Blue Merger Sub Inc., a wholly owned subsidiary of Chevron Corporation | o | o | o | ||||||||
FOR | AGAINST | ABSTAIN | CHECK THIS BOX FOR OPEN BALLOT If you check this box, the Company will be given access to your proxy | o | ||||||||
Item 2: | Approval of any adjournment or postponement of the special meeting, if necessary, to solicit additional proxies | o | o | o | MEETING ATTENDANCE Check this box if you plan to attend the Special Meeting of Stockholders | o | ||||||
Signature _____________________________ Signature _____________________________ Date ________________ | |
Please mark, date and sign as your name appears above and return in the enclosed envelope. If acting as executor, administrator, trustee or guardian, you should so indicate when signing. If the signer is a corporation, please sign the full corporate name, by duly authorized officer. If shares are held jointly, each stockholder should sign. | |
• See other side for important information • |
Ù FOLD AND DETACH HEREÙ |
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time on August 9, 2005.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
http://www.proxyvoting.com/ucl Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. | 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
View Unocal’s Proxy Statement on the World Wide Web:
http://www.unocal.com/specialproxy
Ù FOLD AND DETACH HEREÙ |
Bring this admission ticket and a photo I.D. with you to the special meeting. Do not mail. Unocal Corporation Special Meeting of Stockholders | ||
ADMISSION TICKET | Meeting Time/Date: 10:00 a.m. P.D.T., August 10, 2005 | Meeting Location: The Westin Los Angeles Airport Hotel 5400 W. Century Blvd., Los Angeles, CA 90045 |
PLEASE SEE REVERSE SIDE FOR MAP AND DIRECTIONS TO THE MEETING SITE |
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UNOCAL CORPORATION C/O MELLON INVESTOR SERVICES LLC P.O. Box 3535 South Hackensack, NJ 07606-9235 | |
Board of Directors Proxy SPECIAL MEETING OF STOCKHOLDERS |
Terry G. Dallas and Samuel H. Gillespie III, or either of them, with full power of substitution, are hereby appointed by the signatory of this Proxy to vote all shares of Common Stock held by the signatory on June 29, 2005, at the August 10, 2005 Special Meeting of Stockholders of Unocal Corporation, and any adjournment or postponement thereof, on each of the items on the reverse side, subject to any directions given there, and in their discretion, on all other matters that may properly come before the Special Meeting and any adjournment or postponement thereof.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED ON THE REVERSE SIDE, OR IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ITEMS 1 and 2.
(Continued, and to be dated and signed on reverse side)
Address Change/Comments (Mark the corresponding box on the reverse side) |
Ù FOLD AND DETACH HEREÙ |
Choose MLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor ServiceDirect® at www.melloninvestor.com/isd where step-by-step instructions will prompt you through enrollment.
Ù FOLD AND DETACH HEREÙ |
DIRECTIONS TO THE HILTON LOS ANGELES AIRPORT HOTEL |
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UNOCAL CORPORATION – ADMINISTRATOR FBO EMPLOYEES WITH RESTRICTED STOCK | Special Meeting of Stockholders – Voting Instructions | Please | o | ||
SEE REVERSE SIDE |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2 | ||||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||
Item 1: | Approval and adoption of the Agreement and Plan of Merger, dated as of April 4, 2005, by and among Unocal Corporation, Chevron Corporation and Blue Merger Sub Inc., a wholly owned subsidiary of Chevron Corporation | o | o | o | ||||||||
FOR | AGAINST | ABSTAIN | ||||||||||
Item 2: | Approval of any adjournment or postponement of the special meeting, if necessary, to solicit additional proxies | o | o | o | ||||||||
Signature _____________________________ Signature _____________________________ Date ________________ | |
Please mark, date and sign as your name appears above and return in the enclosed envelope. If acting as executor, administrator, trustee or guardian, you should so indicate when signing. If the signer is a corporation, please sign the full corporate name, by duly authorized officer. If shares are held jointly, each stockholder should sign. | |
• See other side for important information • |
Ù FOLD AND DETACH HEREÙ |
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time on August 9, 2005.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet http://www.proxyvoting.com/ucl-emprs | 1-866-540-5760 | |||||||||
Use the internet to vote your proxy. Have your proxy card in hand when you access the web site. | Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
View Unocal’s Proxy Statement on the World Wide Web:
http://www.unocal.com/specialproxy
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Address Change/Comments (Mark the corresponding box on the reverse side) |
Ù FOLD AND DETACH HEREÙ |
TO: HOLDERS OF UNOCAL RESTRICTED STOCK
Your voting instructions are solicited on behalf of the Board of Directors of Unocal Corporation for the Special Meeting of Stockholders to be held on August 10, 2005. Your restricted stock will be voted as directed. In the absence of such direction, the Management Development and Compensation Committee of the Board of Directors will vote your restricted stock in its discretion, except as limited by law. It is understood that the Management Development and Compensation Committee will have the authority to vote or give proxy to vote on all matters which may properly come before the meeting and at any adjournment or postponement thereof. Your voting instructions will be kept confidential by the independent voting tabulator.
Unocal Corporation, Administrator Management Incentive Programs 2141 Rosecrans Ave, Suite 4000 El Segundo CA 90245 |
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED ON THE REVERSE SIDE, OR IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ITEMS 1 and 2.
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Bryan J. Pechersky Corporate Secretary |
Dear Unocal Savings Plan Participant:
On behalf of the Board of Directors of Unocal Corporation (the “Company”), I am forwarding you the attached vote authorization form provided for the purpose of conveying your voting instructions to Mellon Investor Services LLC, as tabulating agent for the plan’s directed trustee, Mercer Trust Company (the “Trustee”), on the proposals to be presented at the Special Meeting of Stockholders of Unocal Corporation to be held on August 10, 2005 relating to the merger of the Company with and into a wholly-owned subsidiary of Chevron Corporation.
As a participant in the Unocal Savings Plan (the “Plan”), you are entitled to direct the Trustee how to vote all shares of Company common stock held under your accounts in the Plan as of June 29, 2005. All such shares of Company common stock will be voted by the Trustee as directed by participants, subject to the fiduciary duties of an independent fiduciary that will be hired by the Company to oversee voting and election instructions with respect to shares of Company common stock held in the Plan, so long as participant instructions are received by the tabulator by 11:59 p.m. Eastern Daylight Time, August 8, 2005. To the extent that your directions (or failure to provide direction) regarding the voting of the shares of Company common stock held under your accounts in the Plan are inconsistent with the requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Trustee or the independent fiduciary, as applicable, may determine not to follow your directions and may vote the shares of Company common stock held in the Plan in a manner that is deemed more prudent under the circumstances in light of ERISA fiduciary requirements. If you do not direct the Trustee as to how to vote the shares of Company common stock in your Plan account, the Trustee will vote your shares in the same proportion on each issue as it votes the shares for which it receives direction, subject to the fiduciary duties of the independent fiduciary, as described above.
In order to direct the voting of the shares of Company common stock held in your account under the Plan, please submit your vote no later than 11:59 p.m. Eastern Daylight Time on August 8, 2005. Your vote will not be revealed, directly or indirectly, to any officer, employee or director of Chevron Corporation or the Company.
Sincerely,
Bryan J. Pechersky
Corporate Secretary
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UNOCAL CORPORATION
(Plans)
July 1, 2005
To: | Participants, Beneficiaries, and Alternate Payees in the Unocal Savings Plan | |
Re: | Proposed Acquisition of Unocal Corporation by Chevron Corporation – Directing the Trustee with Respect to Electing the Form of Merger Consideration You Wish to Receive in Exchange for the Shares of Unocal Corporation Common Stock Allocated to Your Account in the Plan. |
Dear Participant, Beneficiary, or Alternate Payee:
Our records show that you are either a participant, beneficiary or alternate payee in the Unocal Savings Plan (the “Plan”), and this letter will describe your rights as such in connection with the proposed acquisition of Unocal Corporation (“Unocal”) by Chevron Corporation (“Chevron”). At a special meeting of the stockholders of Unocal, to be held on August 10, 2005 (the “Special Meeting”), holders of Unocal common stock (“Unocal Common Stock”) will be asked to approve the merger agreement, pursuant to which Unocal will merge into a wholly owned subsidiary of Chevron (the “Merger”).
The Plan holds shares of Unocal Common Stock in trust for the benefit of the Plan’s participants, beneficiaries, and alternate payees, and as such, is a stockholder of Unocal entitled to vote at the Special Meeting. The shares of Unocal Common Stock that are held in the Plan are held in the name of the Trust for the Plan and are allocated to participants’ accounts. Mercer Trust Company serves as the directed trustee (“Trustee”) of the Plan and holds legal title, on behalf of the Plan, to the Unocal Common Stock allocated to the individual accounts of Plan participants, beneficiaries, and alternate payees. In connection with the Merger, an independent fiduciary will be hired by Unocal to oversee the voting and election instructions with respect to Unocal Common Stock in Plan participants’ accounts (the “Independent Fiduciary”). To the extent that your directions (or failure to provide direction) regarding the form of merger consideration to be elected are inconsistent with the requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Trustee or the Independent Fiduciary, as applicable, may determine not to follow your directions and may implement an election that is deemed more prudent under the circumstances in light of ERISA fiduciary requirements.
You have already separately received a proxy statement-prospectus dated June 29, 2005 (the “Proxy Statement-Prospectus”) and Voting Instruction Form for you to complete, instructing the Trustee on how to vote the shares of Unocal Common Stock allocated to your individual account under the Plan on the proposals to be considered at the Special Meeting. Under the terms of the Plan, you, as a participant, beneficiary, or alternate payee in the Plan, may also direct the Trustee to elect the form of merger consideration that will be received in exchange for the shares of Unocal Common Stock allocated to your individual account, subject to the proration and other restrictions in the merger agreement, if the merger is consummated.
This letter and the materials accompanying this letter provide additional information on (1) the proposed merger, (2) directing the Trustee with respect to electing the form of merger consideration you wish to have allocated to your individual account in exchange for the shares of Unocal Common Stock allocated to your individual account if the merger is consummated, and (3) the circumstances under which the allocation provisions under the merger agreement and ERISA may cause you to be allocated merger consideration different from the election contained in your directions to the Trustee. The information in this letter is subject to the more extensive discussion in the Proxy Statement-Prospectus and, if there is any conflict between this letter and the Proxy Statement-Prospectus, the Proxy Statement-Prospectus shall control. If you have questions regarding the administrative procedures that cover electing your preferred form of merger consideration after reading this letter and the enclosed materials, you may contact the Exchange Agent, Mellon Investor Services, LLC at 1-866-865-6324.
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MERGER MATERIALS
In connection with the proposed merger, you, as a participant, beneficiary, or alternate payee in the Plan, will be receiving or have already received the following materials in addition to this letter:
(1) | A copy of the Proxy Statement-Prospectus; and | |||
(2) | AnElection Formfor you to complete, instructing the Trustee on the type of merger consideration you wish to have allocated to your individual account in exchange for the shares of Unocal Common Stock allocated to your individual account if the merger is consummated. |
The foregoing items are referred to in this letter as the “Merger Materials.”
You are encouraged to carefully review the Merger Materials before deciding how to direct the Trustee on electing the type of merger consideration you wish to have allocated to your individual account in exchange for the shares of Unocal Common Stock allocated to your individual account if the merger is consummated.
ELECTION OF MERGER CONSIDERATION FOR PLAN SHARES
Forms of Merger Consideration. Under the merger agreement, you, as a participant, beneficiary, or alternate payee in the Plan, are entitled to instruct the Trustee to elect the type of merger consideration you wish to have allocated to your individual account under the Plan in exchange for the shares of Unocal Common Stock credited to your individual account under the Plan. An Election Form has been included as part of the Merger Materials for this purpose. The Election options are:
1. | Exchange each share of Unocal Common Stock credited to your individual account under the Plan for a combination of $16.25 in cash and 0.7725 of a share of Chevron common stock (“all mixed election”). Check Box 3 on the Election Form if you would like to elect the mixed election. If you make an all mixed election with respect to the shares of Unocal Common Stock credited to your individual account under the Plan, your individual account under the Plan will be credited a combination of 0.7725 of a share of Chevron common stock (“Chevron Common Stock”) and $16.25 in cash for each share of Unocal Common Stock credited to your individual account under the Plan. Although no fractional shares will be issued in the merger, the Plan will engage in an aggregated transaction for all Plan participants and accordingly will credit fractional shares to your individual account under the Plan. The cash allocated to your individual account as merger consideration will be reinvested in the Plan’s money market account or equivalent account. | |||
2. | Exchange each share of Unocal Common Stock credited to your individual account under the Plan for Chevron Common Stock (“all-stock election only”). Check Box 4 on the Election Form if you would like to make the all-stock election. If you make the all-stock election, your individual account under the Plan will be credited 1.03 shares of Chevron Common Stock for each share of Unocal Common Stock credited to your individual account under the Plan, subject to proration to preserve an overall mix of 0.7725 of a share of Chevron Common Stock and $16.25 in cash for all of the outstanding shares of Unocal common stock taken together, after taking into account all of the elections made by all of the Unocal stockholders. For a more detailed description, see the Proxy Statement-Prospectus. Although no fractional shares will be issued in the merger, the Plan will engage in an aggregated transaction for all Plan participants and accordingly will credit fractional shares to your individual account under the Plan. Any cash allocated to your individual account as merger consideration will be reinvested in the Plan’s money market or equivalent account. |
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3. | Exchange each share of Unocal Common Stock credited to your individual account for cash (“all-cash election only”). Check Box 5 on the Election Form if you would like to make the all-cash election. If you make the all-cash election, your individual account under the Plan will be credited $65.00 without interest for each share of Unocal Common Stock credited to your individual account under the Plan, subject to proration to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all of the outstanding shares of Unocal common stock taken together, after taking into account all of the elections made by all of the Unocal stockholders. The cash allocated to your individual account as merger consideration will be reinvested in the Plan’s money market account or equivalent account. | |||
4. | No preference indicated as to form of consideration. Check Box 6 on the Election Form if you do not wish to indicate any preference as to the form of consideration you will receive for the shares of Unocal Common Stock credited to your individual account. If you check Box 6 on the Election Form, or if you do not timely return a completed Election Form, you will be deemed to have elected to receive all mixed election merger consideration described in Section 1 above. | |||
5. | Exchange a percentage of the shares of Unocal Common Stock credited to your individual account under the Plan for all-cash, a percentage of the shares of Unocal Common Stock credited to your individual account under the Plan for all-stock and a percentage of the shares of Unocal Common Stock credited to your individual account under the Plan for a combination of cash and stock (“combination”). Check Box 7 if you wish to make the stock election and/or the cash election with respect to some, but not all, of the shares of Unocal Common Stock credited to your individual account under the Plan. Indicate the percentage of shares for which you are electing to receive all stock and/or all cash in the space provided. You will receive the mixed election for any remaining shares. |
The material United States Federal income tax consequences of the merger with respect to shares of Unocal Common Stock generally are summarized on pages 34-36 of the Proxy-Statement-Prospectus; however, you should consult your personal tax advisor concerning the tax consequences of your directions to the Trustee regarding the form of merger consideration you wish to have allocated to your individual account in exchange for the shares of Unocal Common Stock allocated to your individual account under the Plan.
Circumstances Under Which Your Directions Regarding the Form of Merger Consideration May Not Be Followed.Your directions regarding the form of merger consideration you wish to have allocated to your individual account in exchange for the shares of Unocal Common Stock allocated to your individual account are subject to (1) the terms, conditions, and limitations set forth in (a) the Proxy Statement-Prospectus, (b) the merger agreement included as Annex A to the Proxy Statement-Prospectus, and (c) the Instructions set forth on the reverse side of the Election Form, and (2) the requirements of ERISA.
Specifically, your directions regarding your preferred form of merger consideration may not be followed to the extent required to (1) satisfy the proration procedures set forth in the merger agreement and (2) comply with the fiduciary requirements of ERISA.
Elections Must Comply With the Proration Procedures Under the Merger Agreement.Because the merger agreement generally provides that the Unocal Common Stock outstanding at the closing will be converted to preserve an overall mix of 0.7725 of a share of Chevron Common Stock and $16.25 in cash for all outstanding shares of Unocal Common Stock taken together, a Unocal stockholder may actually receive a combination of cash and shares of Chevron Common Stock for his, her or its Unocal Common Stock that is different than what such stockholder elected depending on the elections made by other Unocal
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stockholders. All elections will be subject to the allocation and proration procedures described in the merger agreement.
If shareholders owning more than the applicable percentage of the outstanding shares of Unocal Common Stock necessary to preserve the overall mix described above elect to receive cash, the number of shares of Unocal Common Stock that will be exchanged for cash will be reduced on a pro rata basis. Similarly, if shareholders owning more than applicable percentage of the outstanding shares of Unocal Common Stock necessary to preserve the overall mix described above elect to receive shares of Chevron Common Stock, the number of shares of Unocal Common Stock that will be exchanged for shares of Chevron Common Stock will be reduced on a pro rata basis.
Elections Must Comply With ERISA’s Fiduciary Requirements.The Plan is governed by ERISA. Accordingly, your directions regarding the form of merger consideration to be elected in exchange for the shares of Unocal Common Stock allocated to your individual account under the Plan are subject to the requirements of ERISA. To the extent that your directions (or failure to provide direction) regarding the form of merger consideration to be elected are inconsistent with the requirements of ERISA, the Independent Fiduciary may determine not to follow your directions and may implement an election that is deemed more prudent under the circumstances in light of ERISA fiduciary requirements.
If you wish to instruct the Trustee with respect to electing the type of merger consideration you wish to have allocated to your individual account in exchange for the shares of Unocal Common Stock allocated to your Plan individual account, you must complete, sign, date, and return an Election Form to Mellon Investor Services LLC as tabulating agent for the Trustee in the enclosed envelope by 11:59 p.m. New York City time on August 5, 2005. If you do not timely return a completed Election Form, the shares of Unocal Common Stock allocated to your Plan individual account will be treated as though you had made no election.
Procedures have been established to maintain the confidentiality of your vote and your election. Your Election Form and any other communications you have with Mellon Investor Services LLC, the Trustee and the Independent Fiduciary will be held in confidence by the Trustee and the Independent Fiduciary and will not be released or divulged to anyone, except as required by law. Your election of merger consideration will not be disclosed to Unocal, Chevron or any of their respective affiliates.
Your decision is important. You are encouraged to carefully review the Merger Materials and to return your completed Election Form in a timely manner.
DELIVERY INSTRUCTIONS
Mellon Investor Services LLC
For information (Toll Free): 1-866-865-6324
By Regular Mail | By Registered Insured Mail or Overnight | |||
Mellon Investor Services LLC | Delivery: | |||
Reorganization Department | By Hand: | Mellon Investor Services LLC | ||
Post Office Box 3301 | Mellon Investor Services LLC | Reorganization Department | ||
South Hackensack, NJ 07606 | Reorganization Department | 85 Challenger Road | ||
120 Broadway | Ridgefield Park, NJ 07660 | |||
13th Floor | ||||
New York, NY 10271 |
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UNOCAL SAVINGS PLAN ELECTION FORM | (PLANS) |
Pursuant to the terms of the Agreement and Plan of Merger, as described and set forth in the Proxy Statement/Prospectus dated June 29, 2005, upon consummation of the merger each share of Unocal Corporation Common Stock will be converted into the right to receive either a mix of Chevron Corporation common stock and cash, stock, or cash. As a participant in the Unocal Savings Plan (the “Plan”) whose individual account under the Plan holds shares of Unocal Corporation Common Stock, you are being given the opportunity to elect for each Unocal share:
• | a combination of 0.7725 of a share of Chevron common stock and $16.25 in cash (the “ all mixed election”); | |||
• | 1.03 shares of Chevron common stock (the “all-stock election”) or | |||
• | $65 in cash (the “all-cash election”). |
Your election is subject to certain proration rules, as described in the Proxy Statement/Prospectus.
The undersigned authorizes and directs Mercer Trust Company, as the directed trustee of the Plan, to elect the form of merger consideration the undersigned wishes to have allocated to the undersigned’s individual account(s) in exchange for the shares of Unocal Corporation Common Stock allocated to the undersigned’s individual account(s) under the Plan. The undersigned has read and understood the letter of instruction accompanying this election form.
(1)Signature:
X | ||||
Signature of Participant | Date | Daytime Telephone # |
(2) SUBSTITUTE FORM W-9
PLEASE CERTIFY YOUR TAXPAYER ID OR SOCIAL SECURITY NUMBER BY SIGNING BELOW.
If the Taxpayer ID Number printed above isINCORRECT OR if the space isBLANKwrite in theCORRECTnumber here. |
Under penalties of perjury. I certify that:
1.The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me),and
2.I am not subject to backup withholding because:(a)I am exempt from backup withholding, or(b)I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or(c)the IRS has notified me that I am no longer subject to backup withholding,and
3.I am a U.S. person (including a U.S. resident alien).
Certification instructions.You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.
Signature: | Date: | |
PLACE ANü IN ONE ELECTION BOX ONLY
(3) | o | All Mixed Election | (4 | ) | o | All Stock Election Only | ||||||
(5) | o | All Cash Election Only | (6 | ) | o | No Election | ||||||
(7) | o | Combination* Cash % Stock % Shares Shares |
*Any remaining shares will be the mixed election. You will receive the mixed election if you check Box 7 but do not indicate a percentage.
If Mellon Investor Services, the tabulating agent for the Trustee has not RECEIVED an effective Election Form from a participant at the Mellon’s designated office by 11:59 p.m., Eastern Daylight Time, on or prior to August 5, 2005, such participant shall be deemed to have made no election and such participant’s shares of Unocal Corporation Common Stock under the Plan shall be deemed to be No Election Shares (as defined in the Merger Agreement).
INSTRUCTIONS FOR COMPLETING THE ELECTION FORM
(1) | Sign, date and include your daytime telephone number in this Election Form in Box 1 and after completing all other applicable sections return this form in the enclosed envelope. | |||
(2) | PLEASE SIGN IN BOX 2 TO CERTIFY YOUR TAXPAYER ID OR SOCIAL SECURITY NUMBERif you are a U.S. Taxpayer. If the Taxpayer ID or Social Security Number is incorrect or blank, write the corrected number in Box 2 and sign to certify. | |||
(3) | If you are electing to receive the all mixed election for all of your Unocal shares, please check this box. | |||
(4) | If you are electing to receive all stock, please check this box only. | |||
(5) | If you are electing to receive all cash, please check this box only. | |||
(6) | To specify no election, please check this box only. | |||
(7) | If you choose the combination, you must indicate the percentage of shares you are electing to receive all stock, and/or all cash. You will receive the all mixed election for any remaining shares. |
HOW TO CONTACT MELLON INVESTOR SERVICES
By Telephone – 9 a.m. to 7 p.m. Eastern Daylight Time, Monday through Friday, except for bank holidays:
From within the U.S., Canada or Puerto Rico:
1-866-865-6324 (Toll Free)
From outside the U.S.:
1-201-329-8660 (Collect)
WHERE TO FORWARD YOUR ELECTION FORM
By Regular Mail: | By Overnight Courier or | By Hand: | ||
Registered Insured Mail: | ||||
Mellon Investor Services LLC | Mellon Investor Services LLC | Mellon Investor Services LLC | ||
Attn: Reorganization Dept. | Attn: Reorganization Dept. | Attn: Reorganization Dept. | ||
P.O. Box 3301 | 85 Challenger Road | 120 Broadway, 13th Floor | ||
South Hackensack, NJ 07606 | Mail Drop–Reorg | New York, NY 10271 | ||
Ridgefield Park, NJ 07660 |
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UNOCAL SAVINGS PLAN
ELECTION FORM (REVERSE SIDE)
INSTRUCTIONS
A. | SPECIAL CONDITIONS. | |||
1. | Time in Which to Elect.To be effective, an Election on this form must be properly completed, signed, dated, and returned to Mellon Investor Services, the tabulating agent for the Trustee in the enclosed envelope, and must be received by Mellonno later than 11:59 p.m., Eastern Daylight Time, on August 5, 2005.Subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the merger consideration for shares of Unocal common stock held in the account(s) of Plan participants, beneficiaries, and alternate payees whose Election Forms are not so received (whether due to the Election Form being received late, not being received at all, or not being properly completed),will be calculated as if the participant, beneficiary or alternate payee made an all mixed election. | |||
2. | Change or Revocation of Election.An Election may be changed or revoked by giving written notice to Mellon Investor Services, the tabulating agent for the Trustee. All Elections will be irrevocable after 11:59 p.m., Eastern Daylight Time, on August 5, 2005. | |||
3. | Nullification of Election.All Election Forms will be void and of no effect if the merger is not consummated. | |||
4. | ERISA. An Election is subject to the requirements of ERISA. | |||
B. | PRORATION PROCEDURES. | |||
It is understood that this Election is subject to the terms, conditions and limitations set forth in the merger agreement and this Election Form. In particular, all Elections are subject to the limitation that the Unocal common stock outstanding at the closing will be converted to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all outstanding shares of Unocal common stock taken together.Chevron cannot, therefore, ensure that all Unocal stockholders will receive their election preferences.Any adjustments to the elections will be made in accordance with the allocation and pro-ration procedures set forth in the merger agreement that is attached as Annex A to the Proxy Statement-Prospectus dated June 29, 2005 and described under “The Merger Agreement – Merger Consideration” in the Proxy Statement-Prospectus. The undersigned acknowledges receipt, prior to execution of the Election Form, of the Proxy Statement-Prospectus. | ||||
C. | GENERAL. | |||
1. | Execution and Delivery Instructions.This Election Form must be properly completed, signed, dated, and returned to Mellon Investor Services, in the enclosed envelope so that it will be receivedno later than 11:59 p.m., Eastern Daylight Time, on August 5, 2005.This Election Form may also be sent to Mellon by overnight mail (at the Plan participant’s, beneficiary’s, or alternate payee’s expense) to the following address: |
Mellon Investor Services LLC.
Attn: Reorganization Dept
85 Challenger Rd
Mail Drop — Reorg
Ridgefield Park, NJ 07660
2. | Multiple Elections Not Allowed.A Plan participant, beneficiary, or alternate payee must make a single Election for all shares of Unocal common stock allocated to his or her individual account(s) under the Unocal Savings Plan. | |||
3. | Tax Consequences.Since individual circumstances may differ, a Plan participant, beneficiary, or alternate payee should consult his or her personal tax advisor to determine the tax consequences of the form of merger consideration, including the effect of foreign, federal, state, local or other tax laws. | |||
4. | Miscellaneous.All questions with respect to this Election Form and the Elections (including, without limitations, questions relating to the timeliness or effectiveness of any Election and computations as to proration) will be determined by a Plan fiduciary, which determinations shall be conclusive and binding. |
IMPORTANT:In the event that the number of shares of Unocal Common Stock to be exchanged for either cash or Chevron Common Stock exceed the limitations set forth in the merger agreement, as described in the Proxy Statement-Prospectus, the shares of Unocal Common Stock as to which Elections have been made to receive the form of consideration which is over-subscribed will be reduced to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all of the outstanding shares of Unocal Common Stock taken together, after taking into account all of the elections made by all of the Unocal stockholders, as further described in the Proxy Statement-Prospectus. In addition, an Election is subject to the requirements of ERISA. Also, any cash allocated to your individual account as merger consideration will initially be reinvested in the Plan’s money market account or similar account.
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(Plans)
Chevron Corporation/Unocal Corporation Merger
Frequently Asked Questions
1. When will the merger be completed?
The companies presently expect that if the merger is consummated it will become effective in the first half of August 2005. The merger will be considered at a special meeting of Unocal stockholders to be held on August 10, 2005, and we expect to receive all of the required regulatory approvals in the near future. Based on this expected effective time, the election deadline with respect to the form of merger consideration for participants, beneficiaries and alternate payees in the Unocal Savings Plan (the “Plan”) will be 11:59 p.m., Eastern Daylight Time, on August 5, 2005. If the effective time of the special meeting changes, Unocal and Chevron will provide you with revised dates in a press release, on their websites at www.chevron.com and www.uno-cal.com and in a filing with the Securities and Exchange Commission (SEC).
2. What type of merger consideration may I elect to have allocated to my individual account under the Plan?
You have the opportunity to elect to have allocated to your individual account under the Plan, for each share of Unocal common stock that is credited to your individual account, either:
• | a combination of $16.25 cash and 0.7725 of a share of Chevron common stock (subject to proration in certain circumstance) (a “all mixed election”); | |||
• | $65.00 in cash (subject to proration in certain circumstances) (an “all cash election”); | |||
• | 1.03 shares of Chevron Corporation stock (subject to proration in certain circumstance) (an “all stock election”); |
These elections are described in detail in the accompanying letter of transmittal. Also, see Q&A 6, below, on when an election may change.
3. Will I receive any fractional shares?
Yes.
Although no fractional shares of Chevron stock will be delivered in the merger, the Plan will engage in an aggregated transaction for all Plan participants, and will then allocate interests in fractional shares to individual participant accounts.
4. When is my Election Form due?
Your election form must be received by Mellon Investor Services LLC as agent for Mercer Trust Company which serves as the trustee (“Trustee”) of the Plan and holds legal title, on behalf of the Plan, to the Unocal common stock allocated to the individual accounts of Plan participants, beneficiaries, and alternate payees by the election deadline which is 11:59 p.m., Eastern Daylight Time, on August 5, 2005.
5. What happens if I do not make an election or I miss the election deadline?
If you do not make an election or you miss the election deadline you will be deemed to have made an election to receive the all mixed election described above.
6. If I make a valid election can it be changed?
Yes. Unocal has hired an independent fiduciary to oversee the election instructions with respect to Unocal common stock in Plan participants’ accounts. This means that the independent fiduciary will direct the trustee of the Plan about how to vote the shares of Unocal common stock in the Plan in the Merger. To the extent that your directions (or failure to provide direction) regarding the form of merg-
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er consideration to be elected are inconsistent with the requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the trustee or the independent fiduciary, as applicable, may not follow your directions and may implement an election that is deemed more prudent under the circumstances in light of ERISA fiduciary requirements.
In addition, if the result of the elections by all Unocal stockholders would require an amount greater than the product of $16.25 and the total number of outstanding Unocal shares to be paid in cash, you will not have credited to your account under the Plan $65.00 in cash for each share of Unocal common stock with respect to which you have made an all cash election, but instead will have credited a mix of stock and cash calculated to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all outstanding shares of Unocal common stock taken together, after taking into account all of the elections made by all of the Unocal stockholders. In all cases, you will have credited to your account under the Plan at least $16.25 for each of the shares with respect to which you make an all cash election. Similarly, if the result of the elections by all Unocal stockholders would require a number of shares of Chevron common stock greater than the product of 0.7725 and the total number of total outstanding Unocal shares to be converted into Chevron shares, you will not have credited to your account under the Plan 1.03 shares of Chevron common stock for each share of Unocal common stock with respect to which you have made an all stock election, but instead will have credited a mix of stock and cash calculated to preserve an overall mix of 0.7725 of a share of Chevron common stock and $16.25 in cash for all outstanding shares of Unocal common stock taken together, after taking into account all of the elections made by all of the Unocal stockholders. In all cases, you will have credited to your account under the Plan at least 0.7725 of a share of Chevron common stock for each of your shares with respect to which you make an all stock election. Thus, even if you make a valid election, you may not have credited to your account under the Plan exactly the form of consideration that you request. The allocation rules referenced in this paragraph are explained in detail under the caption “The Merger Agreement—Merger Consideration” in the Proxy Statement/Prospectus, dated June 29, 2005, previously delivered to you.
You may revoke or change your election at any time prior to the deadline described in Q&A 4 above.
7. Will I have access to my Unocal shares and be able to transact those shares up until the election deadline?
No.
There will be a blackout period for transactions involving Unocal stock beginning on the fifth business day prior to the effective date of the merger. We presently expect that the merger will occur in the first half of August 2005. Accordingly, the blackout period will begin on August 3, 2005. The blackout period will end approximately six business days after the effective date of the merger. The blackout period is necessary in order to provide the election agent and the Plan administrator enough time to make a valid election on your behalf and enough time to receive the appropriate compensation due to you and make the proper allocations into your account.
During the blackout period, you will have the same access as usual to investments other than Unocal stock in your plan account. This means that you can transfer among investments as long as the investment is not Unocal stock.
8 What are the Tax Consequences of electing cash, shares or a combination election?
There are no immediate tax consequences to a Plan participant with respect to Unocal stock held in the Plan because the Plan is generally exempt from income taxation. If
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you receive Chevron stock, then Chevron stock will become part of your Plan account. If you receive cash, then the cash will go into the Plan’s money market fund (or equivalent fund). However, if you have made after-tax contributions to the Plan or you receive a lump sum distribution under certain circumstances, the form of consideration you receive for the shares of Unocal stock allocated to your Plan account may affect your tax consequences at the time of distribution of your account by the Plan if you elect to apply the special tax rules applicable to “net unrealized appreciation” on employer stock distributed by a tax-qualified retirement plan. You should consult your personal tax advisor concerning the tax consequences of the form of merger consideration allocated to your account in the Plan in exchange for the shares of Unocal Common Stock allocated to your account under the Plan.
9. What happens after the blackout period ends?
You will have the same access to your account as before the blackout period. For example, you can transfer into and out of investments, subject to regular Plan rules.
10. Who do I call if I have additional questions or need more information?
You may contact the Exchange Agent, Mellon Investor Services LLC, at 1-866-865-6324.