INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant September 7, 2001 [X]
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Texaco Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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(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:
(4) Proposed maximum aggregate value of transaction:
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[_] Check box if any part of the fee is offset as provided by Exchange Act
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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.:
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(4) Date Filed:
Except for the historical and present factual information contained herein,
the matters set forth in this filing, including statements as to the expected
benefits of the merger such as efficiencies, cost savings, market profile and
financial strength, and the competitive ability and position of the combined
company, and other statements identified by words such as "anticipates,"
"expects," "projects," "plans," and similar expressions are forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially, including the possibility that the anticipated benefits from the
merger cannot be fully realized, the possibility that costs or difficulties
related to the integration of our businesses will be greater than expected, the
impact of competition and other risk factors relating to our industry as
detailed from time to time in each of Chevron's and Texaco's reports filed with
the SEC.
Chevron has filed a Registration Statement on Form S-4 with the SEC and
Texaco has filed a Definitive Proxy Statement on Schedule 14A with the SEC.
These filings contain a definitive joint proxy statement/prospectus regarding
the proposed merger transaction between Chevron and Texaco. Investors are urged
to read this joint proxy statement/prospectus and any other relevant documents
filed with the SEC because they contain important information. The joint proxy
statement/prospectus is being sent to the stockholders of Chevron and Texaco
seeking their approval of the proposed transaction. In addition, you may obtain
the documents free of charge at the website maintained by the SEC at
www.sec.gov. Also, you may obtain documents filed with the SEC by Chevron free
of charge by requesting them in writing from Chevron Corporation, 575 Market
Street, San Francisco, CA 94105, Attention: Corporate Secretary, or by telephone
at (415) 894-7700. You may obtain documents filed with the SEC by Texaco free of
charge by requesting them in writing from Texaco Inc., 2000 Westchester Avenue,
White Plains, New York 10650, Attention: Secretary, or by telephone at (914)
253-4000.
Chevron and Texaco, and their respective directors and executive officers,
may be deemed to be participants in the solicitation of proxies from the
stockholders of Chevron and Texaco in connection with the merger. Information
about the directors and executive officers of Chevron and their ownership of
Chevron stock is set forth in the proxy statement for Chevron's 2001 annual
meeting of stockholders. Information about the directors and executive officers
of Texaco and their ownership of Texaco stock is set forth in Texaco's
Annual Report on Form 10-K for the year ended December 31, 2000. Investors may
obtain additional information regarding the interests of such participants by
reading the definitive joint proxy statement/prospectus.
* * *
September 7, 2001
To All Texaco Employees from Glenn Tilton:
Dear Fellow Employees:
I am delighted to report that the U.S. Federal Trade Commission (FTC) has
completed its review and has approved a consent order allowing us to move
forward with our merger with Chevron. The resulting new company -- ChevronTexaco
Corp. -- will rank among the world's largest and most competitive energy
companies.
With this important milestone behind us, our next step is to seek merger
approval by the stockholders of both Texaco and Chevron at separate stockholder
meetings scheduled for October 9 in Houston, Texas. Attached below are today's
news release, along with a Q&A, to further explain this important step toward
merger completion. These documents will be posted to Texaco's internal web site
shortly. The news release is available now on Texaco.com.
Since we announced the merger last October, teams of employees from Texaco have
been working diligently with counterparts from Chevron and Caltex on integration
planning. With the FTC announcement, that effort will accelerate as we make
certain we will be ready to start operating effectively as one company upon
stockholder approval.
Along with reviews from state attorneys general, the European Union and other
countries, the regulatory review process is now essentially complete. While the
consent order contains a number of issues that must be addressed, the most
significant, as we envisioned, is the requirement for Texaco to divest our
interests in the U.S. downstream companies, Equilon and Motiva. We have been in
ongoing discussions with Shell and Saudi Refining, Inc. over a sale of these
interests. However, if we are not able to reach an agreement prior to closing
the merger, we plan to place the stock of the Texaco subsidiaries that hold
those interests in a Divestiture Trust just prior to merger close, for sale
within eight months of the merger date. Therefore, the trust enables us to
complete the merger without delay.
This is a historic time for us. Our companies have been both competitors and
partners in various businesses around the globe for several decades. Now we are
building a new company that will be highly competitive across all energy
sectors.
What is remarkable about this milestone is that we have been able to achieve it
while continuing an outstanding record of performance by staying focused on our
jobs and getting the work done in a safe, efficient and reliable manner. I thank
you for that and commend you for your efforts and commitment.
With today's important regulatory approval, I expect the pace of integration
planning will intensify. I know how demanding merger planning can be, but it
remains important for all of us to focus on our day-to-day work. It is equally
important to remind you that we remain separate, competing companies and will
remain so until both companies obtain stockholder approval. Please remember to
follow all legal guidelines as you interact with people from Chevron.
I know how interested all of you are in our progress. Certainly, today's news is
another high point in our goal to combine Texaco, Chevron and Caltex and to
realize the full potential of ChevronTexaco. We will continue to keep you
updated as frequently as possible, as we have done throughout this transition
period.
New challenges and growth opportunities lie ahead. Your collective commitment,
energy and talent will help us forge the new ChevronTexaco.
[GLENN TILTON SIGNATURE]
Attachments
[Joint Press Release Issued by Chevron Corporation and Texaco Inc. on September
7, 2001]
U.S. FEDERAL TRADE COMMISSION APPROVES MERGER
---------------------------------------------
OF CHEVRON AND TEXACO
---------------------
FOR IMMEDIATE RELEASE: FRIDAY, SEPTEMBER 07, 2001.
- --------------------------------------------------
SAN FRANCISCO, Calif. and WHITE PLAINS, N.Y. (Sept. 7, 2001) --
Chevron Corp. and Texaco Inc. today confirmed that the U.S. Federal Trade
Commission (FTC) has approved a consent order that will allow the two companies
to complete their previously announced merger.
The new company, ChevronTexaco Corporation, will rank among the
world's largest energy companies and will be highly competitive across all
energy sectors.
Separately, the companies have negotiated a consent decree with the
attorneys general of 12 U.S. states. In addition, the companies have obtained
necessary regulatory approvals from the European Union and several countries
where the two companies have major operations.
"Today marks a critically important milestone as we move to establish
a premier energy company with the world-class assets, talent, financial strength
and technology to achieve superior results," said Chevron Chairman and CEO David
J. O'Reilly, who will lead the new company in the same capacity.
"Our integration planning since announcing the merger last October has
gone exceptionally well. Upon receiving stockholder approval, we will be ready
to start operating effectively as one company."
Texaco Chairman and CEO Glenn F. Tilton said, "The new ChevronTexaco
will bring together two great companies with long histories of success and
innovation to tackle the new challenges we face in meeting the energy needs of
our customers and partners.
"We are fully prepared to comply with all of the conditions of the
consent order and look forward to completing the merger and creating a great new
energy company," added Tilton, who, along with Richard H. Matzke, vice chairman
of Chevron, will serve as vice chairman of ChevronTexaco.
Chevron and Texaco will satisfy the following conditions listed in the
consent order to complete the merger:
- more -
- 2 -
o Texaco will divest its interests in the U.S. downstream joint ventures
Motiva Enterprises LLC and Equilon Enterprises LLC. If Texaco is not
able to complete a sale of its interest in Motiva to Shell and Saudi
Refining, Inc., and its interest in Equilon to Shell prior to the
merger, it will place the stock of the Texaco subsidiaries that hold
those interests in a Divestiture Trust just prior to merger close for
sale within eight months of the merger date.
o Subject to certain conditions, Texaco will extend its license of the
Texaco brand to Equilon and Motiva on an exclusive basis until June 30,
2003, and on a non-exclusive basis until June 30, 2006.
o ChevronTexaco will divest Texaco's interest in the Discovery Pipeline
System within six months of the merger date, and Texaco will resign as
operator of the System.
o ChevronTexaco will divest Texaco's interest in the Enterprise
Fractionating Plant in Mont Belvieu, Texas, within six months of the
merger date.
o Texaco will divest a portion of its U.S. general aviation business.
Chevron and Texaco will seek approval of the merger by their
respective stockholders at separate stockholder meetings scheduled for Oct. 9 in
Houston, Texas.
The merger joins two leading energy companies and long-time partners.
The new company will have world-class upstream positions in reserves, production
and exploration opportunities; an integrated, worldwide refining and marketing
business; a global chemicals business; expanded growth platforms in natural gas
and power; and industry-leading skills in technology innovation.
ChevronTexaco will have a combined enterprise market value of more
than $100 billion, assets of $83 billion, net proved reserves of 11.5 billion
barrels of oil equivalent (BOE), daily production of 2.7 million BOE and
operations throughout the world. In the United States, ChevronTexaco will be the
third-largest producer of oil and gas. Its Chevron, Texaco and Caltex petroleum
products will be marketed in 180 countries. (Caltex is a 50-50 refining and
marketing joint venture started by Chevron and Texaco in 1936, operating in
Asia, Africa and the Middle East.)
In the merger, Texaco stockholders will receive .77 shares of
ChevronTexaco common stock for each share of Texaco common stock they own, and
Chevron stockholders will retain their existing shares.
- more -
- 3 -
The FTC review process was triggered by the filing last year of notice
and information about the merger under the Hart-Scott-Rodino Antitrust
Improvements Act. - xxx -
CONTACT: Texaco: Paul Weeditz 914-253-7745
Chevron: Fred Gorell 415-894-4443
Private Securities Litigation Reform Act Safe Harbor Statement
Except for the historical and present factual information contained herein, the
matters set forth in this press release, including statements as to the expected
benefits of the merger such as efficiencies, cost savings, market profile and
financial strength, and the competitive ability and position of the combined
company, and other statements identified by words such as "anticipates,"
"expects," "projects," "plans," and similar expressions are forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially, including the possibility that the anticipated benefits from the
merger cannot be fully realized, the possibility that costs or difficulties
related to the integration of our businesses will be greater than expected, the
impact of competition and other risk factors relating to our industry as
detailed from time to time in each of Chevron's and Texaco's reports filed with
the SEC.
Additional Information
Chevron has filed a Registration Statement on Form S-4 with the SEC and Texaco
has filed a Definitive Proxy Statement on Schedule 14A with the SEC. These
filings contain a definitive joint proxy statement/prospectus regarding the
proposed merger transaction. Investors are urged to read this joint proxy
statement/prospectus and any other relevant documents filed with the SEC because
they contain important information. The joint proxy statement/prospectus is
being sent to the stockholders of Chevron and Texaco seeking their approval of
the proposed transaction. In addition, you may obtain the documents free of
charge at the website maintained by the SEC at www.sec.gov. Also, you may obtain
documents filed with the SEC by Chevron free of charge by requesting them in
writing from Chevron Corporation, 575 Market Street, San Francisco, CA 94105,
Attention: Corporate Secretary, or by telephone at (415) 894-7700. You may
obtain documents filed with the SEC by Texaco free of charge by requesting them
in writing from Texaco Inc., 2000 Westchester Avenue, White Plains, New York
10650, Attention: Secretary, or by telephone at (914) 253-4000.
Chevron and Texaco, and their respective directors and executive officers, may
be deemed to be participants in the solicitation of proxies from the
stockholders of Chevron and Texaco in connection with the merger. Information
about the directors and executive officers of Chevron and their ownership of
Chevron stock is set forth in the proxy statement for Chevron's 2001 annual
meeting of stockholders. Information about the directors and executive officers
of Texaco and their ownership of Texaco stock is set forth in Texaco's Annual
Report on Form 10-K for the year ended December 31, 2000. Investors may obtain
additional information regarding the interests of such participants by reading
the definitive joint proxy statement/prospectus.
[EMPLOYEE QUESTIONS AND ANSWERS]
1. What does the U.S. Federal Trade Commission (FTC) consent mean for the
ChevronTexaco merger? FTC consent is one of the most important
milestones en route to completion of the merger. The next step is for
Chevron and Texaco to seek approval of the deal for the new
ChevronTexaco by their respective stockholders. Separate stockholder
votes are scheduled for Oct. 9 in Houston.
2. What are the requirements of the consent order? Chevron and Texaco will
satisfy the following FTC conditions, listed in the consent order, to
complete the merger:
o Texaco will divest its interests in the U.S. downstream joint
ventures Motiva Enterprises LLC and Equilon Enterprises LLC. If
Texaco is not able to complete a sale of its interest in Motiva
to Shell and Saudi Refining, Inc., and its interest in Equilon to
Shell prior to the merger, it will place the stock of the Texaco
subsidiaries that hold those interests in a Divestiture Trust
just prior to merger close for sale within eight months of the
merger date.
o Subject to certain conditions, Texaco will extend its license of
the Texaco brand to Equilon and Motiva on an exclusive basis
until June 30, 2003, and on a non-exclusive basis until June 30,
2006.
o ChevronTexaco will divest Texaco's interest in the Discovery
Pipeline System within six months of the merger date, and Texaco
will resign as operator of the System.
o ChevronTexaco will divest Texaco's interest in the Enterprise
Fractionating Plant in Mont Belvieu, Texas, within six months of
the merger date.
o Texaco will divest a portion of its U.S. general aviation
business in California, Alaska, Washington, Idaho, Nevada,
Oregon, Utah, Arizona, Louisiana, Mississippi, Alabama, Georgia,
Florida and Tennessee. Texaco has reached an agreement to sell
this business to Avfuel Corp. of Ann Arbor, Michigan, with
closing occurring on the merger date or shortly thereafter.
3. Are you confident the merger will be completed now? The FTC's approval
of the consent order removes the last major obstacle to closing the
merger, except for the stockholder votes. We are optimistic that the
stockholders of both companies will approve the merger proposals that
have been submitted to them because we believe that the merger's
completion is in the best interests of the stockholders, as well as
those of the companies and the respective employees of both companies.
4. When does the FTC's public comment period begin and do you anticipate
it will surface issues that might delay merger completion? The 30-day
public comment period begins the day following the FTC's announcement.
The FTC has conducted a thorough review of the proposed merger, and we
are confident that the merger will move forward to completion.
5. What's the status of approvals from any U.S. states? We have reached
agreement on a consent decree with the Attorneys General of 12 states:
Alaska, Arizona, California, Florida, Hawaii, Idaho, Nevada, New
Mexico, Texas, Oregon, Utah and Washington, and the consent decree is
being presented to the United States District Court in Los Angeles for
approval.
6. What are the conditions of the state consent decree with regard to
California crude refiners? The state consent decree will require
ChevronTexaco to supply crude oil to two California refiners, San
Joaquin Refining Company and Kern Oil and Refining Company, pursuant to
agreements providing for specified volumes and prices. Any volume
reduction or price increase, or termination of the agreements, must be
approved by the California State Attorney General's Office.
7. What is the status of approvals from the European Union or other
countries? The merger has received the approval of the European Union
and certain countries where both companies operate.
8. What's the first day ChevronTexaco will be operational? Following
stockholder approval on October 9, ChevronTexaco will be operational on
October 10.
9. What happens if Shell does not purchase Texaco's part of Equilon or
Motiva prior to merger close? If Texaco is not able to complete a sale
of its interests in Motiva to Shell and Saudi Refining Inc., and its
interest in Equilon to Shell, prior to merger close, it will place the
stock of the Texaco subsidiaries that hold those interests in a
Divestiture Trust just prior to merger close for sale within eight
months of the merger date. By doing so, ChevronTexaco will be able to
complete the merger.
10. Has the Trustee been selected to oversee the Divestiture Trust? There
are actually three trustees. Robert A. Falise has been named the
Divestiture Trustee with responsibility for overseeing the sale of
Texaco's interests in Equilon and Motiva; Joe B. Foster has been named
Operating Trustee to oversee Texaco's interests in Equilon and John
Linehan has been named Operating Trustee to oversee Texaco's interests
in Motiva.
11. If Texaco puts its U.S. refining and marketing interests in a trust
until a buyer is found, who receives the dividends? The dividends will
be paid to ChevronTexaco.
12. When the sale is completed, who receives the proceeds? The proceeds
will go to ChevronTexaco.
13. What happens if a buyer cannot be found for Equilon and Motiva in 8
months? The Divestiture Trust can request an extension from the FTC.
14. Can Shell or Saudi Refining, Inc. bid for the assets once they are
placed into a trust? Yes.
15. Does the Trust affect the management of Equilon and Motiva? No. Equilon
and Motiva have existing management teams that are responsible for
day-to-day management and operations of the respective companies.
However, Texaco's representatives on the Members Committees of Equilon
and Motiva will resign when the trust arrangement is implemented.
16. Can you provide details of the Discovery System? Discovery Producer
Services LLC is a joint venture of Texaco (33.3%), The Williams
Companies (50%) and Agip Petroleum Company Inc. (16.7%). The system
includes a 600 mmcfd natural gas gathering pipeline in the Gulf of
Mexico, a cryogenic processing facility in Larose, Louisiana and a
fractionating unit in Paradis, Louisiana.
17. Can you provide details of the Enterprise Fractionating Plant? Texaco
owns a 12.5% interest in the Enterprise Fractionating Plant, with
remaining interests held by Enterprise Products Company, Duke Field
Services and Burlington Resources. The plant has a capacity of 210,000
barrels per day. The facility fractionates natural gas liquids into
ethane, propane, isobutane, butane and natural gasoline.
18. Can you provide details of Texaco's general aviation fuel business and
its divestiture? Texaco markets general aviation fuel throughout the
United States. In order to address FTC market concentration concerns,
Texaco has entered into an agreement with Avfuel Corporation for that
company to purchase the majority of its general aviation business in
California, Alaska, Washington, Idaho, Nevada, Oregon, Utah, Arizona,
Louisiana, Mississippi, Alabama, Georgia, Florida and Tennessee. The
completion of the sale will be concurrent with or soon after merger
close.
19. How will the Texaco brand be managed in the U.S.? Subject to certain
conditions, Texaco will extend its license of the Texaco brand to
Equilon and Motiva on an exclusive basis until June 30, 2003, and on a
non-exclusive basis until June 30, 2006. Subject to certain
restrictions, ChevronTexaco will be able to market Texaco-branded motor
fuels in the U.S. after June 30, 2003.
20. Will all the Texaco stations become Chevron stations? No. Subject to
certain conditions, in the U.S., Equilon and Motiva will have exclusive
licenses for the Texaco brand for motor fuels until June 30, 2003 and
non-exclusive licenses until June 30, 2006. Subject to certain
restrictions, ChevronTexaco will be able to market Texaco-branded motor
fuels in the U.S. after June 30, 2003. In Europe, West Africa, Latin
America and the Caribbean the Texaco brand will be maintained.
21. What happens to lubricants and the Havoline brand? Texaco currently
markets premium automotive and industrial lubricants worldwide,
including Havoline, which is marketed by Caltex in Asia and Equilon in
the U.S. This business is not addressed by the FTC consent order. It is
planned that ChevronTexaco will continue to market these products on a
worldwide basis.
22. What happens to the Texaco Xpress Lube outlets in the U.S.? The Texaco
Xpress Lube outlets in the U.S. are assets of Equilon and Motiva or
their customers. That ownership will not be affected by the merger.
However, ChevronTexaco will have a non-exclusive right to use the
Texaco Xpress Lube name in the U.S. after the merger.
23. Where do customers or credit card holders turn for any questions? This
regulatory approval step does not affect retail customers, and they can
continue to utilize the resources at their disposal for answers to any
questions they have.
24. Can U.S. consumers use Chevron credit cards at Texaco stations and
Texaco credit cards at Chevron stations? No such arrangements are
contemplated at this time.
25. If someone is currently a Chevron jobber and a Texaco jobber, will that
become one contract? All existing contracts will be honored. Chevron
contracts will remain separate from any contracts with Equilon and
Motiva.
26. Will the new company keep the Texaco brand and where? ChevronTexaco
will maintain the Texaco brand, particularly in markets where it
already has a presence, subject to the terms of the FTC consent order
and the state consent decree. In the U.S., subject to certain
conditions, the Texaco brand will be licensed to Equilon and Motiva on
an exclusive basis until June 30, 2003 and a non-exclusive basis until
June 30, 2006. While no decision has been made about ChevronTexaco's
use of the Texaco brand in the U.S. after June 30, 2003, subject to
certain restrictions, ChevronTexaco will be able to market
Texaco-branded motor fuels in the U.S. following the expiration of the
exclusive license with Equilon and Motiva.