SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
[(Amendment No. ___)]
Filed by the Registrant [X]
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))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
TOSCO CORPORATION
(Name of Registrant as Specified in Its Charter)
_________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(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):
___________________________________________________________________
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(5) Total fee paid: ___________________________________________________
[ ] Fee previously paid 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: ___________________________________________
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(4) Date Filed: _______________________________________________________
TOSCO CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Tosco Corporation ("Tosco") will be held at The Westin Hotel, 1 First Stamford
Place, Stamford, Connecticut, on May 20, 1999, at 10:00 o'clock in the morning
for the following purposes:
I. To elect ten (10) Directors of Tosco.
II. To ratify and approve the appointment of PricewaterhouseCoopers
LLP as independent accountants of Tosco for the fiscal year ending December
31, 1999.
III. To consider and act upon the stockholder proposal described in
the accompanying Proxy Statement.
IV. To transact such other business as may properly come before the
meeting, or any adjournment thereof.
Stockholders of record at the close of business on March 31, 1999
shall be entitled to vote at and be present at the meeting.
By order of the Board of Directors,
Wilkes McClave III
Secretary
Dated: April 15, 1999
Stamford, Connecticut
TOSCO CORPORATION
PROXY STATEMENT
The accompanying Proxy is solicited by the Board of Directors of Tosco
Corporation, a Nevada corporation ("Tosco"), for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on May 20, 1999 at 10:00 a.m. at
The Westin Hotel, 1 First Stamford Place, Stamford, Connecticut, or any
adjournment of the Annual Meeting, at which stockholders of record at the close
of business on March 31, 1999 shall be entitled to vote. The cost of
solicitation of proxies will be borne by Tosco. Tosco may use the services of
its Directors, officers, stockholders of record and others to solicit proxies,
personally or by mail or telephone. Arrangements may also be made with brokerage
houses and other custodians, nominees, fiduciaries and stockholders of record to
forward solicitation material to the beneficial owners of the stock held of
record by such persons. Tosco may reimburse such solicitors for reasonable
out-of-pocket expenses incurred by them in soliciting, but no compensation will
be paid for their services. Tosco has retained Hill and Knowlton, Inc. to assist
in the solicitation of proxies for a fee estimated at $12,000 plus out-of-pocket
expenses. Any Proxy granted as a result of this solicitation may be revoked at
any time before its exercise by granting a subsequently dated Proxy, by
attending the Annual Meeting and voting in person or by mailing a notice of
revocation to Tosco Corporation, 72 Cummings Point Road, Stamford, Connecticut
06902, Attention: Secretary.
The date of this Proxy Statement is the approximate date on which this
Proxy Statement and accompanying Proxy were first sent or given to stockholders.
The principal executive offices of Tosco are located at 72 Cummings
Point Road, Stamford, Connecticut 06902.
On March 31, 1999, Tosco had outstanding and entitled to vote with
respect to all matters to be acted upon at the Annual Meeting 152,363,766 shares
of Common Stock, par value $.75 per share ("Common Stock"). Each holder of
Common Stock will be entitled to one vote for each share of Common Stock held by
such holder. The presence of holders representing a majority of the outstanding
shares will constitute a quorum at the meeting. Abstentions are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. Abstentions and broker non-votes are not counted in determining the
votes cast with respect to any of the matters submitted to a vote of
stockholders.
It is expected that the following business will be considered at the
Annual Meeting and action taken thereon:
I. ELECTION OF DIRECTORS
It is proposed to elect ten (10) Directors at the Annual Meeting to
hold office until the 2000 Annual Meeting of Stockholders and until their
successors are duly elected and qualify. It is intended that the accompanying
form of Proxy will be voted for the nominees set forth below, each of whom is
presently a Director of Tosco. To be elected as a Director, each nominee must
receive the affirmative vote of the holders of a plurality of the stock of Tosco
voted for Directors. If some unexpected occurrence should make necessary, in the
Board of Directors' judgment, the substitution of some other person or persons
for any of the nominees, shares will be voted for such other person or persons
as the Board of Directors may select. The Board of Directors is not aware that
any nominee will be unable or unwilling to serve as a Director. The following
table sets forth certain information with respect to each of the nominees.
NOMINEES FOR ELECTION
SERVED AS A PRINCIPAL OCCUPATION AND
NAME AGE DIRECTOR SINCE POSITIONS HELD
Jefferson F. Allen 53 1990 President of Tosco since May
1997 and Chief Financial Officer
since June 1990; Executive Vice
President from June 1990 to May
1997; Treasurer of Tosco from
June 1990 to October 1995;
various positions, including
Chairman and CEO, with Comfed
Bancorp, Inc. and related
entities from November 1988 to
June 1990.
Patrick M. de Barros 54 1995 Director of Petrogal, Petroleos
de Portugal, SA since July 1995;
Chairman and Chief Executive
Officer of Argus Resources Ltd.
(UK) since 1988 and Chairman of
Fundacao Monteiro de Barros and
Protea Holdings Inc. since 1980.
Wayne A. Budd 57 1997 Group President, Bell Atlantic
or Senior Vice President, NYNEX
since April 1996; Senior
Partner, Goodwin, Procter &
Hoar, Attorneys, from February
1993 to April 1996;
Commissioner, United States
Sentencing Commission, October
1994 to May 1997; Associate
Attorney General of the United
States from March 1992 to
January 1993; United States
Attorney for the District of
Massachusetts from April 1989 to
March 1992.
Houston I. Flournoy 69 1978 Retired Executive; Special
Assistant to the President for
Governmental Affairs, University
of Southern California (USC),
from 1976 to 1999 and Professor
of Public Administration, USC,
from 1976 to 1993.
Edmund A. Hajim 62 1991 Chairman and Chief Executive
Officer of ING Furman Selz Asset
Management since July 1998;
Co-Chairman of ING Barings,
Americas Region, since December
1997; Chairman and Chief
Executive Officer of Furman Selz
LLC from 1983 to 1998; Managing
Director and member of the Board
of Directors of Lehman Brothers
Kuhn Loeb prior to 1983.
Joseph P. Ingrassia 74 1991 Petroleum consultant; Consultant
to E. T. Petroleum Inc. from
1992 to 1993; Petroleum
consultant to Saudi Petroleum
International Inc. from 1988 to
1992; Managing Director Norbec
Ltd. from 1983 to 1988.
Charles J. Luellen 69 1992 Retired Executive; President
and Chief Operating Officer
of Ashland Inc. from March
March 1986 to January 1992.
Eija Malmivirta 58 1997 Chairman and principal owner of
Merei Energy Consulting Oy Ltd.,
Helsinki, Finland, a consulting
company with expertise in the
oil industry, oil trading and
risk management, since October
1996; for more than 27 years
prior thereto, Mrs. Malmivirta
was employed by Neste Oy, a
Finnish oil refining and
marketing company, with her last
position as Executive Vice
President.
Mark R. Mulvoy 57 1996 Retired Executive; Editor,
Sports Illustrated magazine from
1992 to 1996; various positions
with Sports Illustrated for more
than five years prior thereto.
Thomas D. O'Malley 57 1988 Chairman of the Board and Chief
Executive Officer of Tosco since
January 1990; President of Tosco
from 1993 to May 1997 and from
October 1989 to May 1990.
Mr. de Barros is a director of Espirito Santo Financial Group. Mr.
Budd is a director of BankBoston, N.A., which is the agent under Tosco's credit
agreement. Mr. Flournoy is a director of Fremont General Corporation and
Lockheed Martin Corporation. Mr. Hajim is a director of NFO Worldwide, Inc.
Tosco's Board of Directors has a Committee on Audit, Ethics and
Conflicts of Interest (the "Audit Committee"), consisting of Messrs. Budd,
Flournoy, Ingrassia, Luellen and Mulvoy, a Compensation Committee consisting of
Messrs. Flournoy, Hajim and Luellen, an Executive Committee consisting of
Messrs. Allen, Ingrassia, and O'Malley, a Business Affairs Committee consisting
of Messrs. de Barros, Ingrassia, Luellen and Mrs. Malmivirta, a Government &
Regulatory Affairs Committee consisting of Messrs. Budd, Flournoy, Mulvoy and
Allen, an International Affairs Committee consisting of Messrs. de Barros and
Ingrassia and Mrs. Malmivirta and a Nominating Committee consisting of Messrs.
de Barros, Hajim and Ingrassia. The Audit Committee's functions include
recommending to the Board of Directors the engaging and discharging of the
independent accountants, reviewing with the independent accountants the plan and
results of the audit engagement, reviewing the scope and results of Tosco's
procedures for internal auditing, reviewing the independence of the accountants
and reviewing the adequacy of Tosco's system of internal accounting controls.
The Compensation Committee is responsible for reviewing and setting the
compensation of Tosco's management, and considering, recommending and
administering its cash incentive and long-term stock incentive plans. The
Nominating Committee's functions include reviewing potential nominees for the
Board of Directors and recommending the annual slate of nominees for election to
the Board of Directors.
During 1998, there were 7 meetings of the Board of Directors, 6
meetings of the Audit Committee, 4 meetings of the Compensation Committee and 1
meeting of the Nominating Committee. During 1998, each of the Directors then in
office attended in excess of 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings of all
committees on which he served.
Tosco is not aware of any family relationship between any Director or
executive officer.
STOCK OWNERSHIP OF OFFICERS AND DIRECTORS
The following table sets forth the number of shares of Common Stock of
Tosco beneficially owned by each Director, by each of the five most highly
compensated executive officers and by all executive officers and Directors as a
group at March 1, 1999, and the percentage of the outstanding shares of Common
Stock so owned by each Director, executive officer, and such group.
Amount and nature of
Name beneficial ownership Percent of Class
- ------------------- ---------------------- ----------------
Jefferson F. Allen 719,784(1) *
Patrick M. de Barros 722,341(2) *
Wayne A. Budd 72,786(3) *
Houston I. Flournoy 2,265(4) *
Edmund A. Hajim 74,686(5) *
Joseph P. Ingrassia 74,186(6) *
Robert J. Lavinia 447,500(7) *
Charles J. Luellen 75,686(8) *
Eija Malmivirta 73,206(9) *
Wilkes McClave 398,499(10) *
Mark R. Mulvoy 72,934(11) *
Thomas D. O'Malley 4,124,009(12) 2.68%
Dwight L. Wiggins 430,000(13) *
All executive officers and
Directors (20 persons, including
those listed above) 8,220,785(14) 5.24%
- -------------------------
* Represents less than 1% of the outstanding shares of Common Stock.
(1) Consists of 63,881 shares of Common Stock, options to purchase 464,238
shares of Common Stock under the 1989 Stock Incentive Plan (the "1989
Plan"), and options to purchase 191,665 shares of Common Stock under the
1992 Stock Incentive Plan (the "1992 Plan").
(2) Consists of 650,341 shares of Common Stock of which 649,662 are owned by a
Trust of which Mr. de Barros is a beneficiary, and options to purchase
56,001 and 15,999 shares of Common Stock under the 1989 Plan and the 1992
Plan, respectively.
(3) Consists of 100 shares of Common Stock, options to purchase 72,000 shares
of Common Stock under the 1992 Plan and 686 Common Stock units under the
Directors Stock Plan.
(4) Consists of 1,579 shares of Common Stock and 686 Common Stock units under
the Directors Stock Plan.
(5) Consists of 2,000 shares of Common Stock, options to purchase 72,000
shares of Common Stock under the 1989 Plan and 686 Common Stock units
under the Directors Stock Plan.
(6) Consists of 1,500 shares of Common Stock, options to purchase 72,000
shares of Common Stock under the 1989 Plan and 686 Common Stock units
under the Directors Stock Plan.
(7) Consists of 5,000 shares of Common Stock, and options to purchase 75,000
and 367,500 shares of Common Stock under the 1989 Plan and the 1992 Plan,
respectively.
(8) Consists of 3,000 shares of Common Stock, options to purchase 72,000
shares of Common Stock under the 1989 Plan and 686 Common Stock units
under the Directors Stock Plan.
(9) Consists of options to purchase 72,000 shares of Common Stock under the
1992 Plan and 1,206 Common Stock units under the Directors Stock Plan.
(10) Consists of 48,844 shares of Common Stock and options to purchase 150,000
and 199,655 shares of Common Stock under the 1989 Plan and 1992 Plan,
respectively.
(11) Consists of 934 shares of Common Stock and options to purchase 72,000
shares of Common Stock under the 1989 Plan.
(12) Consists of 2,280,857 shares of Common Stock, options to purchase
1,019,238 and 281,669 shares of Common Stock under the 1989 Plan and the
1992 Plan, respectively, and 25,597 shares of Common Stock owned by Mr.
O'Malley's wife. In addition, the shares listed in the table include
221,595 shares held by Argus Energy Corporation and 295,053 shares held by
Argus Investments, Inc., of which Mr. O'Malley is the sole shareholder.
Mr. O'Malley disclaims beneficial ownership of the 25,597 shares of Common
Stock owned by his wife.
(13) Consists of 66,597 shares of Common Stock and options to purchase 44,238
and 319,165 shares of Common Stock under the 1989 Plan and the 1992 Plan,
respectively.
(14) Consists of 3,745,033 shares of Common Stock and options to purchase
2,141,715, 2,216,903 and 112,500 shares of Common Stock under the 1989
Plan, the 1992 Plan and the 1998 Plan, respectively, and 4,634 Common
Stock units under the Directors Stock Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Tosco's
Directors, executive officers and holders of more than 10% of Tosco's Common
Stock to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of Tosco. Tosco believes that during the fiscal year ended December
31, 1998, its officers, directors and holders of more than 10% of Tosco's Common
Stock complied with all Section 16(a) filing requirements with the following
exception. Mr. Robert Lavinia, an Executive Vice President, failed to file on a
timely basis with the Securities and Exchange Commission one report on Form 4
relating to one transaction. This transaction was subsequently reported on a
Form 5.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The summary Compensation Table shows certain compensation information
for Thomas D. O'Malley, the Chief Executive Officer of Tosco, and for the four
other most highly compensated executive officers of Tosco for the year ended
December 31, 1998. The information includes the dollar amount of salaries,
bonuses and other compensation for these officers as well as the number of stock
options granted.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
--------------------------------------- -------------------------------------------------
Awards Payouts
Other ----------- ------------
Annual Restricted All
Compen- Stock Options LTIP Other
Name and Salary Bonus sation Award(s) /SARs Payouts Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
- ------------------- ---- ------- ------- --------- ---------- --------- --------- --------------
Thomas D. O'Malley 1998 650,000 4,413,155 0 62,950(1)
Chairman and CEO 1997 650,000 4,903,505 0 66,574(2)
1996 600,000 3,257,331 75,000 68,211(3)
Jefferson F. Allen 1998 450,000 2,291,445 0 107,782(1)
President and Chief 1997 429,170 2,546,050 0 111,032(2)
Financial Officer 1996 400,000 1,628,665 45,000 45,302(3)
Robert J. Lavinia 1998 425,000 2,164,143 0 14,316(1)
Executive Vice President 1997 425,000 2,404,603 0 12,564(2)
1996 400,000 1,628,665 37,500 10,620(3)
Dwight L. Wiggins 1998 425,000 2,164,143 0 13,311(1)
Executive Vice President 1997 425,000 2,404,603 0 13,404(2)
1996 400,000 1,628,665 37,500 12,552(3)
Wilkes McClave 1998 375,000 1,527,630 0 43,732(1)
Senior Vice President 1997 375,000 1,697,367 0 44,999(2)
and General Counsel 1996 340,000 1,139,966 37,500 45,881(3)
- --------------
1 All other compensation consists of the following: (a) contributions
pursuant to Tosco's Capital Accumulation Plan for Messrs. Allen, Lavinia,
McClave, O'Malley and Wiggins in the amounts of $20,800, $11,967, $20,800,
$20,800 and $9,667, respectively, (b) the value of certain premiums paid
by Tosco under a split dollar life arrangement for Messrs. Allen, McClave
and O'Malley in the amounts of $84,534, $20,867 and $36,541, respectively,
and (c) group term life insurance benefits of $2,448, $2,349, $2,065,
$5,609 and $3,644 for Messrs. Allen, Lavinia, McClave, O'Malley and
Wiggins, respectively.
2 All other compensation consists of the following: (a) contributions
pursuant to Tosco's Capital Accumulation Plan for Messrs. Allen, Lavinia,
McClave, O'Malley and Wiggins in the amounts of $20,400, $10,400, $20,400,
$20,400 and $9,600, respectively, (b) the value of certain premiums paid
by Tosco under a split dollar life arrangement for Messrs. Allen, McClave
and O'Malley in the amounts of $88,328, $22,727 and $40,774, respectively,
and (c) group term life insurance benefits of $2,304, $2,164, $1,872,
$5,400 and $3,804 for Messrs. Allen, Lavinia, McClave, O'Malley and
Wiggins, respectively.
3 All other compensation consists of the following: (a) contributions
pursuant to Tosco's Capital Accumulation Plan for Messrs. Allen, Lavinia,
McClave, O'Malley, and Wiggins in the amounts of $17,443, $9,756, $19,500,
$19,126, and $9,000, respectively, (b) the value of certain premiums paid
by Tosco under a split dollar life arrangement for Messrs. Allen, McClave
and O'Malley in the amounts of $25,699, $25,098 and $45,710, respectively,
and (c) group term life insurance benefits of $2,160, $864, $1,283, $3,375
and $3,552 for Messrs. Allen, Lavinia, McClave, O'Malley and Wiggins,
respectively.
AGREEMENTS WITH OFFICERS AND DIRECTORS
Tosco has severance agreements (the "Agreements") with Messrs. Allen,
Lavinia, McClave, O'Malley and Wiggins, which provide that if an executive's
employment is terminated by Tosco without cause, or upon a change of control of
Tosco (followed by termination of employment), or is terminated by the executive
for good reason, as all such terms are defined in the Agreements and as set
forth below, then the executive shall be entitled to a lump sum severance
payment and all of the terminated executive's options or restricted shares, if
any, which are not then vested shall vest immediately and all such restrictions
shall lapse. The lump sum severance payments for Messrs. Allen, McClave and
O'Malley is 30 months of base salary at the time of termination and for Messrs.
Lavinia and Wiggins is 24 months of base salary at the time of termination;
provided, however, upon a change in control, the severance payments shall be
based on salary plus bonus. At March 1, 1999, and based upon salary levels
currently in effect, in the event Tosco had caused their employments to be
terminated, Messrs. Allen, Lavinia, McClave, O'Malley, and Wiggins would have
been entitled pursuant to the Agreements to receive a lump sum of $1,125,000,
$850,000, $938,000, $1,625,000 and $850,000, respectively; if such terminations
had resulted from a change in control, they would have been entitled to receive
approximately an additional $6,047,000, $4,569,000, $4,031,000, $11,646,000 and
$4,569,000, respectively; in each case together with the accelerated vesting of
their options. The Agreements have a one-year term, but will be automatically
renewed for successive one-year terms unless Tosco notifies the executive at
least six months prior to any renewal date. Such notification by Tosco shall
entitle the executive to terminate his employment for Good Reason and shall be
deemed to be a termination without Cause if the executive's employment
terminates before the end of the Agreement. As used in the Agreements, the
following terms generally have the following meanings: Cause means material and
intentional failure to perform his duties, fraud, misappropriation of property
or intentional damage to Tosco's property; Good Reason includes a reduction in
base annual compensation or a significant reduction in the nature of employment;
and Change in Control means a person or group of persons become the beneficial
owner of more than 50% of Tosco's Common Stock, stockholders approve a merger of
Tosco into another entity or a change in the composition of a majority of the
members of the Board of Directors.
In 1998, each Director who was not also an officer of Tosco was paid
an annual fee of $40,000 per year (or pro rata portion thereof for period of
service as a Director) plus $1,000 for each Board of Directors meeting attended
and $1,000 for each committee meeting attended, provided such committee meeting
was not held on the same day as a Board of Directors meeting. At least $10,000
of the fee must be paid in Common Stock or Common Stock units under a tax
deferred plan. Pursuant to the Directors Stock Plan, directors may elect at
least 30 days prior to each plan year to receive more than $10,000 of their
director's fees in shares of Common Stock or Common Stock units under a tax
deferred plan.
In 1991, Tosco created the Directors' Charitable Award Program (the
"Program"), which allows each Director to recommend a donation to educational
institutions and/or charitable organizations designated by them. The Program is
funded by joint life insurance policies of which Tosco is the sole owner and
beneficiary, with each policy insuring the lives of two eligible Directors.
Tosco pays all premiums due and at the time of the death of the second of the
two Directors, receives a tax-free death benefit of approximately $2 million,
thereby recovering the costs of the Program. Tosco will make charitable
contributions in the name of each Director, within ten years following the first
Director's death, to the institution(s) designated by the Director. The
Directors may recommend one organization to receive a donation of $1 million, or
two or more organizations to receive $1 million in the aggregate.
After five years of service as a Director, Tosco Directors who are not
employees are eligible to participate in a retirement plan. The plan generally
provides that upon the later of age 65 or retirement, an annual retirement
benefit equal to annual retainer fees in effect at the time of retirement will
be paid. One year of retirement payments for each year of Board service, up to a
maximum of 20 years, is provided. Upon the Director's death, remaining payments
will continue to the spouse during the period of his/her life, subject to the
maximum set forth above. A Director may elect to receive such retirement
benefits as an actuarially equivalent lump sum.
In 1996, Tosco adopted a mandatory retirement policy for Directors.
The policy requires Directors to retire upon the completion of the annual term
of office during which the Director's seventy-fifth birthday occurs.
LONG TERM INCENTIVE PLAN
In 1996, Tosco adopted the 1996 Long Term Incentive Plan ("LTIP")
which replaced the granting of incentive awards under the 1992 Plan to
participants in the LTIP. Under the LTIP, the Compensation Committee may grant
performance units to participants, the payment of which is contingent on the
meeting of performance goals during a performance period (which may not exceed 5
years) established by the Committee. The performance goals are based on the
difference between the price of Tosco's Common Stock at the time of grant of a
unit and the price of the stock at various dates above a target level. Under
certain circumstances specified in the LTIP, the total amount of all payments
made to any participant in any calendar year may not exceed 400% of such
participant's total annual compensation for the year of the award. Purposes of
the LTIP include providing a strong incentive to participants to improve the
performance of Tosco's Common Stock and requiring such participants' continued
employment over several years in order to receive the full benefit of any award
level achieved. Generally, if a participant voluntarily terminates employment
with Tosco or retires prior to age 65 prior to the scheduled payment date of an
award, all unpaid amounts will be forfeited. Upon a change in control, amounts
will be paid in cash, with Tosco's obligations to be continued by the successor.
When a performance goal is achieved during any period, a participant shall be
deemed vested ("Deemed Vested Amount") in an amount equal to the performance
level multiplied by the number of performance units a participant has. On
January 1, 1999 based on the performance goal achieved to that date ($36.375 per
share), Messrs. Allen, Lavinia, McClave, O'Malley and Wiggins received
$5,867,656, $3,682,891, $3,816,049, $11,235,938 and $3,433,203, respectively,
and will be entitled to receive payments of approximately one-half of such
amounts on January 1, 2000 and January 1, 2001. The payment of such amounts is
subject to the satisfaction of certain contingencies and such amounts will
change if different performance levels are achieved. The Company accrues such
amounts on a ratable basis over the required service period.
LONG TERM INCENTIVE PLAN AWARDS
Number of Shares, Performance or Other
Units or Other Period Until
Name Rights (#) Maturation or Payout(1)
- -------------------------------------------------------------------------------
Thomas D. O'Malley 1,350,000
Jefferson F. Allen 705,000
Robert J. Lavinia 442,500
Dwight L. Wiggins 412,500
Wilkes McClave 458,499
- ---------------
(1) Payment dates and amounts are as follows: 50% of Deemed Vested Amount
on January 1, 1999, 50% of remaining, plus additional (if any), Deemed
Vested Amount on January 1, 2000 and 100% of remaining, plus additional
(if any), Deemed Vested Amount on January 1, 2001.
PENSION PLANS
The following table shows the estimated annual benefits payable to
participants upon retirement under the Tosco Pension Plan (the "Pension Plan").
The covered compensation consists of the salary, but not the bonus, reported in
the Summary Compensation Table. Of Tosco's five highest paid executives, Messrs.
Lavinia and Wiggins are participants in the Pension Plan.
PENSION PLAN TABLE
ESTIMATED ANNUAL RETIREMENT BENEFITS
________________YEARS OF SERVICE AT AGE 65__________________
3-YEAR
AVG. COMP. 10 15 20 25 30 35
$300,000 $29,204 $47,082 $64,960 $82,838 $100,126 $117,165
350,000 29,204 47,082 64,960 82,838 100,126 117,165
400,000 29,204 47,082 64,960 82,838 100,126 117,165
450,000 29,204 47,082 64,960 82,838 100,126 117,165
500,000 29,204 47,082 64,960 82,838 100,126 117,165
550,000 29,204 47,082 64,960 82,838 100,126 117,165
600,000 29,204 47,082 64,960 82,838 100,126 117,165
Benefits shown in the table are single life annuities payable at age
65. Pension benefits, which are integrated with Social Security benefits, will
be reduced for amounts payable under prior Tosco pension plans or predecessor
employer plans. Messrs. Lavinia and Wiggins have 6 and 34 years of credited
service under the Pension Plan.
In 1990, Tosco adopted a Senior Executive Retirement Plan ("SERP") to
provide retirement benefits to selected senior executives and their
beneficiaries. Messrs. Allen, Lavinia, McClave, O'Malley and Wiggins are
eligible for benefits under the SERP. The table that follows shows the estimated
annual benefits payable under the SERP.
SERP Table
Years of Service
Final ___________________________________________________________________
3-year
Avg. Comp. 10 15 20 25 30 35
$300,000 $135,000 $180,000 $180,000 $180,000 $180,000 $180,000
350,000 157,500 210,000 210,000 210,000 210,000 210,000
400,000 180,000 240,000 240,000 240,000 240,000 240,000
450,000 202,500 270,000 270,000 270,000 270,000 270,000
500,000 225,000 300,000 300,000 300,000 300,000 300,000
550,000 247,500 330,000 330,000 330,000 330,000 330,000
600,000 270,000 360,000 360,000 360,000 360,000 360,000
650,000 292,500 390,000 390,000 390,000 390,000 390,000
690,000 310,500 414,000 414,000 414,000 414,000 414,000
700,000 310,500 414,000 414,000 414,000 414,000 414,000
Benefits shown are life annuities payable at age 65 and are based on a
percentage of eligible compensation. SERP benefits are reduced by the amount of
benefits payable under the Tosco Pension Plan, or, if applicable, certain
predecessor employer plans. Eligible compensation is the average of base pay
plus incentive compensation (limited to an aggregate maximum of $690,000 as
increased by the Consumer Price Index commencing December 31, 1998) during the
highest three-consecutive calendar years of employment after January 1, 1990.
Normal retirement age is 65 with early retirement benefits (reduced by 1% for
each year preceding age 65) commencing at age 55 and three years of service.
There is no reduction if age plus years of service equal or exceed 75 at date of
retirement.
Messrs. Allen, McClave and O'Malley have nine years of credited
service while Messrs. Lavinia and Wiggins each have five years and seven months
of credited service under the SERP as of December 31, 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since 1987, Tosco has entered into indemnity agreements (the
"Indemnity Agreements") with its Directors and certain of its officers
(collectively, the "Indemnitees") which provide for Tosco to indemnify the
Indemnitees against expenses incurred by the Indemnitees in any proceedings
which may be maintained against them by reason of any action or omission to act
by any Indemnitee in his capacity as a Director, officer, employee, agent or
fiduciary of Tosco. Tosco's obligations are subject to certain limitations,
including the limitation that no payment will be made which is prohibited by
applicable law. The Indemnity Agreements provide for the advancement of expenses
incurred by Indemnitees in advance of the final disposition of any proceedings
and require Tosco to establish a trust (the "Trust") for the benefit of the
Indemnitees. In the event of a Change in Control (as defined in the Indemnity
Agreements), Tosco will, from time to time upon written request of an
Indemnitee, fund the Trust in an amount sufficient to satisfy any and all
expenses reasonably anticipated to be incurred in connection with any
proceedings. Change in Control is defined to include the following events: (a)
Tosco would be required to report a change in control under the Securities
Exchange Act of 1934; (b) any person becomes the beneficial owner of 20% or more
of the voting power of Tosco's outstanding stock without the approval of Tosco's
Board of Directors; (c) Tosco is a party to a merger, consolidation or sale of
assets; (d) certain changes in the composition of Tosco's Board of Directors; or
(e) a person who owns 9.5% or more of the voting power of Tosco's stock
increases his beneficial ownership by 5% or more.
As of December 31, 1998, Tosco was obligated under leases for
approximately 27,686 square feet of office space in a building in Stamford,
Connecticut owned until April 1998 by an entity in which Mr. O'Malley held a
minority economic interest. Such entity sold the building in mid-April 1998 and
Mr. O'Malley no longer has an interest in the building. The leases expire on
April 30, 2002 (with renewal options), unless sooner terminated in accordance
with their terms. The total monthly base rent, excluding utilities, paid by
Tosco under the leases was approximately $44,972. The monthly rent was
determined to be generally at market rate for similar buildings and locations at
the time each lease was entered into and is at the lowest per square foot rate
of any tenants in the building for comparable space. Tosco may terminate its
leases at any time upon payment of specified amounts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee, which consists of Messrs.
Flournoy, Hajim and Luellen, have entered into the Indemnity Agreements
discussed under "Certain Relationships and Related Transactions". The Indemnity
Agreements provide for Tosco to indemnify the Indemnitees against expenses
incurred by the Indemnitees in any proceedings which may be maintained against
them by reason of any action or omission to act by any Indemnitee in his
capacity as a Director, officer, employee, agent or fiduciary of Tosco. Tosco's
obligations are subject to certain limitations, including the limitation that no
payment will be made which is prohibited by applicable law. The Indemnity
Agreements provide for the advancement of expenses incurred by Indemnitees in
advance of the final disposition of any proceedings and require Tosco to
establish the Trust for the benefit of the Indemnitees. In the event of a Change
in Control (as defined in the Indemnity Agreements), Tosco will, from time to
time upon written request of any Indemnitee, fund the Trust in an amount
sufficient to satisfy any and all expenses reasonably anticipated to be incurred
in connection with any proceedings.
OPTION GRANTS IN 1998
The LTIP is intended to replace the granting of additional options to
the five officers listed in the Summary Compensation Table, and, therefore,
during 1998, no options were granted to such officers.
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND DECEMBER 31, 1998 OPTION/SAR VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES DECEMBER 31, 1998 DECEMBER 31, 1998
ACQUIRED -------------------------------- --------------------------------
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----- ------------- -------------- ----------- ------------- ------------ --------------
Thomas D. O'Malley 10,000 $ 246,250 1,314,994 25,006 $23,169,689 $336,536
Jefferson F. Allen 684,630 20,370 11,866,592 274,143
Robert J. Lavinia 424,630 17,870 7,214,180 240,498
Dwight L. Wiggins 394,630 17,870 6,606,364 240,498
Wilkes McClave 10,791 $ 265,928 339,838 17,870 5,672,722 240,498
------------------------ ----------------------------
3,158,722 98,986 $54,529,547 $1,332,173
TOSCO PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for Tosco, the Standard & Poor's ("S&P") 500 Composite Stock Price Index
and an index of peer companies selected by Tosco. The graph assumes that the
value of the investment in Tosco's Common Stock and each index was $100 at
December 31, 1993 and that all dividends were reinvested.
Peer Group includes Ashland Inc., Crown Central Petroleum Corp.,
Ultramar Diamond Shamrock Corp., Sunoco Inc., Tesoro Petroleum Corp., and Valero
Energy Corp. Assumes $100 invested on December 31, 1993 in Tosco common stock,
an index of stock in Peer Group companies (weighted by market capitalization)
and the S&P 500 Index. Assumes reinvested dividends. Fiscal year ends December
31.
COMPARISON OF FIVE YEAR TOTAL RETURN
TOSCO, INDUSTRY PEER GROUP AND S&P 500 INDEX
[GRAPHIC OMITTED]
1993 1994 1995 1996 1997 1998
TOSCO CORP $100.0 $102.1 $136.3 $286.3 $413.5 $285.6
S&P 500 INDEX $100.0 $101.4 $139.5 $172.0 $229.5 $295.9
PEER GROUP $100.0 $101.3 $109.5 $127.4 $173.5 $145.2
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, which consists entirely of Directors who
are not employees of Tosco, reviews and approves all remuneration arrangements
for Tosco's executive officers, Directors and certain other employees, and
reviews and approves compensation plans in which officers and employees are
eligible to participate. The Committee met four times during 1998. Tosco's
philosophy for compensating executive officers is that a substantial portion of
the executive's compensation should be incentive based and determined by Tosco's
and the executive's performance. The policy is designed to attract, reward,
motivate and retain key executives who are capable of achieving Tosco's
objectives in a highly competitive industry.
Tosco's executive compensation program consists of the following key
elements: salary based on the Committee's assessment of the individual's level
of responsibility, performance, and contributions to Tosco; an annual bonus that
is directly related to the performance of Tosco as a whole or specific business
units; and grants of stock options or performance units under the LTIP designed
to motivate individuals to enhance the long-term value of Tosco's stock. The
Committee does not allocate a fixed percentage of compensation to each of these
three elements, nor does the Committee use specific qualitative or quantitative
measures or factors in assessing individual performance, except with respect to
the award of bonuses as described below.
The salaries of key executives and the incentive plans in which they
participate are reviewed by the Compensation Committee in light of the
Committee's assessment of individual performance, contribution to Tosco and
level of responsibility. The Committee generally assigns equal weight to each of
these factors. The Committee believes Mr. O'Malley's salary reflects his
experience and personal contributions to Tosco's performance. The base salaries
of the four other most highly compensated executive officers reflect their
individual job performance and contribution to Tosco.
During 1998 Tosco's executive officers participated in the Tosco
Corporate Incentive Plan (the "Tosco Corporate Plan"). Their bonuses are
determined in accordance with a formula and factors set by the Committee prior
to the beginning of the year. The plan provides that no bonuses are payable
unless the interest on Tosco's Mortgage Bonds is paid when due. The Tosco
Corporate Plan provides for the payment of a bonus dependent on the per share
(common shares plus common share equivalents) pre-tax operating earnings
("OPEPS") of Tosco. For 1998 no bonus was payable under the Tosco Corporate Plan
unless OPEPS exceeded $.50. For each $.33 (and, on a pro-rata basis, for each
fraction thereof) of OPEPS over the first $.50, the executive received a
percentage of annual base salary as a bonus. The hurdle rate was determined by
the Committee in early 1996 for a three year period in light of Tosco's budget
and anticipated performance to provide a sustained incentive to management.
Annual bonus under the Tosco Corporate Plan is computed in accordance with a
formula, the variables of which are the amount of OPEPS, if any, in excess of
the hurdle rate and the individual's percentage participation factor. The
percentages for executive officers who participate in the Tosco Corporate Plan
range from 25% to 100% of their base salary. The percentage for each executive
officer is based on the Committee's assessment of the officer's performance,
contribution to Tosco and level of responsibility. Messrs. Allen, Lavinia,
McClave, O'Malley and Wiggins were participants in the Tosco Corporate Plan and
the percentage applicable to each of them was 75, 75, 60, 100 and 75,
respectively.
Tosco has several stock option plans which are designed to link the
interests of executive officers with Tosco's shareholders and provide such
executives with an equity interest in Tosco. The options are designed to enhance
shareholder values by benefiting executives only if other shareholders of Tosco
also benefit. The purpose of the plans is to encourage executives and others to
acquire larger stock ownership and proprietary interest in Tosco and thereby
stimulate the active interest of such persons in the development and financial
success of Tosco. All options granted in 1998 were granted at the fair market
value of Tosco Common Stock on the date of grant and become exercisable over
five years commencing one year from the date of grant, and only if the holder is
still employed by Tosco (with certain exceptions for severance agreements). The
number of options that the Compensation Committee grants to executive officers
is based on individual performance and level of responsibility. The Committee
generally assigns equal weight to these two factors. In addition, the Committee
also considers the number of options previously granted to and the total number
of options held by such officers. Since stock options are tied to the future
performance of Tosco's Common Stock, they will provide value only if the price
of Tosco Common Stock exceeds the exercise price of the options. There is no
relationship between the future performance of Tosco and the number of stock
options granted.
Certain of Tosco's executive officers also participate in the Long
Term Incentive Plan commencing in 1996. The LTIP is designed to provide a strong
incentive to participants to improve the performance of Tosco's Common Stock and
to require such participants' continued employment over several years in order
to receive the full benefit of any award level achieved. Participants become
entitled to receive certain amounts if the stock price of Tosco increases above
escalating target levels, subject to their employment by Tosco and performance
over a multi-year period. Generally, if a participant voluntarily terminates
employment with Tosco or retires prior to age 65 prior to the scheduled payment
date of an award, all unpaid amounts will be forfeited. It is intended that
participation in the LTIP replaces additional awards under Tosco's stock option
plans, and, therefore, LTIP participants did not receive any stock options in
1998.
In 1993, the tax laws were amended to limit the deduction a publicly
held company is allowed for compensation paid to the chief executive officer and
to the four other most highly compensated executive officers. Generally, amounts
paid in excess of $1 million, other than performance-based compensation, may not
be deducted. In order to be considered performance-based compensation, one of
the criteria imposed by the tax law is that the plan relating to such
compensation must be approved by a company's stockholders. The LTIP does not
meet such criteria, while the Tosco Corporate Plan does.
Mr. O'Malley's compensation for 1998 was based on the same performance
and other criteria as summarized in the preceding paragraphs relative to all
executive officers.
COMPENSATION COMMITTEE
Houston I. Flournoy
Edmund A. Hajim
Charles J. Luellen
II. APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of Tosco, upon recommendation of the Audit
Committee, has selected PricewaterhouseCoopers LLP as the independent
accountants of Tosco for 1999. PricewaterhouseCoopers LLP has acted in such
capacity since 1977. Stockholders are requested to ratify and approve such
appointment. A representative of PricewaterhouseCoopers LLP is expected to be
present at the meeting with the opportunity to make a statement if he or she so
desires and to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION AND APPROVAL
OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS TOSCO'S AUDITORS.
III. STOCKHOLDER PROPOSAL
A shareholder has given notice that the following proposal will be
presented at the meeting:
WHEREAS, as shareholders, we believe it is important for our company
to assume leadership on limiting pollution in the environment. Such an approach
is good for business and for our company's public image;
We believe that the responsible implementation of pollution prevention
procedures results in benefits to the corporation and its shareholders by
increased efficiencies, reduced costs from potential enforcement and liability
actions, and long term elimination of environmental compliance costs;
We also believe that pollution prevention is the best approach to
reducing pollution because it seeks an efficient and cost-effective means of
reducing pollution at its source. Pollution prevention can keep a company's
products from leaking into air, land or water and thereby reduces the amount of
wasted products. A study conducted by the New Jersey Department of Environment
Protection concluded that companies will save five to eight dollars for every
dollar they spend reducing the amount of hazardous chemicals that they use.
In response to concerns expressed by local residents, the Chevron
refinery in Richmond, California, performed a pollution prevention audit of
their wastewater processes, resulting in a 70-90 percent reduction of toxic
discharges to San Francisco Bay. Many other companies have also engaged in
effective pollution prevention planning through internal and external reviews.
RESOLVED: Shareholders request that the company adopt a policy
requiring each of its major facilities to conduct an annual review of available
pollution prevention options for high priority pollution sources, especially
those on which stakeholder groups have raised concerns, and to provide a summary
report to shareholders of these reviews.
SUPPORTING STATEMENT: The Presbyterian Church (USA) is a religious
organization concerned about environmental stewardship. We also own stock in
several petrochemical corporations, including Tosco. We believe that our company
would benefit from annual pollution prevention assessments that identify options
to eliminate or greatly reduce toxic hazards at the source. This process would
help restore public confidence in the company's commitment to reduce undesirable
impacts on workers, neighbors and the environment. While we are pleased with
efforts to address selenium discharges from the Tosco refinery into San
Francisco Bay, news reports of the past year of continuing spills, leaks and
accidents at both Tosco refineries in the San Francisco Bay Area demonstrates
the ongoing need for increased prevention efforts at our company.
TOSCO RECOMMENDATION
The Board of Directors of Tosco recommends a vote AGAINST the adoption
of the proposal because it believes it is unnecessary, for reasons set forth
below, and would subject the Company to additional administrative expense,
including producing and distributing more than fifty thousand copies of the
report. The proposal is the same as the one submitted by the proponent last
year, which received only 3.32% of the votes cast in favor.
Tosco already has extensive programs in place for environmental
compliance by each facility, including staffs with highly trained technical
professionals, and audits its environmental compliance. These programs have been
carefully developed and implemented to meet the particular needs of each
facility.
During 1997 Tosco commenced an on-going, comprehensive, in-depth study
and review of environmental and safety programs, procedures, and practices at
all significant facilities. These reviews are conducted by a dedicated team of
both in-house and outside experts in their fields. By the end of 1998, onsite
reviews at all major facilities were over 90% complete.
In 1998, the Company completed a major water pollution control project
which removes more than 95% of the selenium from the water the facility
processes at the Rodeo refinery.
In California Tosco complies with the California Hazardous Waste
Source Reduction and Management Review Act of 1989. This requires us to conduct
a review of our processes, operations, and procedures every four years to reduce
hazardous waste at sites. It also requires us to determine any alternatives to
(or modifications of) processes, operations and procedures that may be
implemented to reduce hazardous materials that may be generated at our sites,
including source reduction measures. Tosco also voluntarily participates in the
National Petroleum Refiners Association's Environmental Committee for the
purpose of improving environmental performance, including waste reduction. As a
result of these initiatives and other voluntary efforts, Tosco has reduced the
amount of hazardous materials with which it must deal.
We strive to be a good corporate neighbor, particularly in the
communities in which our facilities are located, and to facilitate communication
with our neighbors. For example, at the Avon and Rodeo Refineries in California,
we have formally constituted Community Advisory Panels whose members represent a
broad spectrum of local residents. The panels meet on a regular basis. They
provide a forum for people to ask questions and communicate their concerns to us
and for us, in turn, to learn from them and to inform them about our operations.
The Company presently reports to stockholders on environmental
initiatives, in summary form in its Annual Report on Form 10-K, which is
available in print or on Tosco's website @ www.tosco.com.
CONCLUSION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS
PROPOSAL. THE PROXY HOLDERS WILL VOTE ALL PROXIES RECEIVED AGAINST THIS PROPOSAL
UNLESS INSTRUCTED OTHERWISE.
The affirmative vote of the holders of a majority of the shares
present in person or by proxy at the meeting, and entitled to vote on this item,
is required for approval of this proposal.
The names and addresses of the stockholder proponents, and information
regarding their Tosco stock ownership, will be furnished promptly upon receipt
of any telephone or written request to the Secretary of Tosco.
OTHER MATTERS
CERTAIN SECURITY HOLDINGS
At February 16, 1999, to the knowledge of Tosco, from Statements on
Schedule 13G provided to Tosco, beneficial owners of more than 5% of any class
of the outstanding voting securities of Tosco were as follows:
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP* OF CLASS
- -------------- ------------------------------------- ------------ ---------
Common Stock FMR Corp. 23,077,782 15.0%
82 Devonshire Street shares (1)
Boston, Massachusetts 02109
Common Stock Tiger Management L.L.C. 18,085,100 11.8%
Tiger Performance L.L.C. shares (2)
Julian H. Robertson, Jr.
101 Park Avenue
New York, New York 10178
Common Stock J.P. Morgan & Co., Incorporated 15,411,530 10.0%
60 Wall Street shares (3)
New York, New York 10260
Common Stock Putnam Investments, Inc. 7,785,378 5.1%
One Post Office Square shares (4)
Boston, Massachusetts 02109
- ---------------------
* The beneficial owner of such shares reports that it has sole voting and
investment power with respect to such securities, except where otherwise
indicated.
(1) According to a Statement on Schedule 13G filed with the Commission on
February 1, 1999, wholly-owned subsidiaries or affiliates of FMR Corp.
("Fidelity Funds"), including a registered investment advisor, own these
shares. FMR does not have the power to vote or direct the voting of shares
owned by the Fidelity Funds, which power resides with Fidelity Funds'
Board of Trustees.
(2) According to a Statement on Schedule 13G filed with the Commission on
February 16, 1999, (i) Tiger Management L.L.C. and Tiger Performance
L.L.C., investment advisers registered under Section 203 of the Investment
Advisers Act of 1940, reported beneficial ownership of an aggregate of
18,085,100 shares and (ii) Julian H. Robertson, Jr. reported beneficial
ownership of 18,085,100 shares. Julian H. Robertson, Jr. is the ultimate
controlling person of Tiger Management L.L.C., and Tiger Performance
L.L.C. Other persons are known to have the right to receive dividends
from, or proceeds from, the sale of such shares. The interest of one such
person, The Jaguar Fund N.V., a Netherlands Antilles corporation, is more
than 5%.
(3) According to an Amendment No. 2 to a Statement on Schedule 13G filed with
the Commission on December 31, 1998, these securities are owned by
subsidiaries of J.P. Morgan & Co., Incorporated which are registered
investment advisors.
(4) According to a Statement on Schedule 13G filed with the Commission on
February 11, 1999, these securities are owned by subsidiaries of Putnam
Investments, Inc. which are registered investment advisors.
MISCELLANEOUS
Proposals of stockholders intended to be presented at Tosco's 2000
Annual Meeting of Stockholders must be received by Tosco on or prior to December
17, 1999, to be eligible for inclusion in Tosco's Proxy Statement and form of
Proxy to be used in connection with the 2000 Annual Meeting.
The By-Laws of Tosco currently provide that nominations for the
election of Directors may be made by a shareholder entitled to vote for the
election of Directors provided that (a) such shareholder delivers written notice
by first class mail to the Secretary of Tosco not less than 14 days nor more
than 50 days prior to any meeting of the shareholders called for the election of
Directors (if less than 21 days' notice of the meeting is given to shareholders,
the shareholder's written notice may be delivered to the Secretary of Tosco not
later than the close of the seventh day following the day on which notice of the
meeting was mailed to shareholders); and (b) such written notice contains
background information as to each nominee, including (i) the name, age, business
address and, if known, residence address of each nominee proposed in such
notice, (ii) the principal occupation or employment of each nominee, (iii) the
number of shares of stock of Tosco beneficially owned by each nominee, and (iv)
any information with respect to each nominee's affiliation with a competitor of
Tosco.
Registered stockholders attending the meeting may be asked for
identification. If you are a beneficial owner of Tosco stock held by a bank or
broker ("in street name"), you will need proof of ownership to be admitted to
the meeting. A recent brokerage statement or letter from the broker or bank
indicating you are an owner as of the record date are examples of proof of
ownership.
At the date of this Proxy Statement, the only business which the Board
of Directors intends to present or knows that others will present at the meeting
is that hereinabove set forth. If any other matter or matters are properly
brought before the meeting, or any adjournment thereof, it is the intention of
the persons named in the accompanying form of Proxy to vote the Proxy on such
matters in accordance with their judgment.
Wilkes McClave III
Secretary
Dated: April 15, 1999
PROXY
TOSCO CORPORATION
ANNUAL MEETING OF STOCKHOLDERS MAY 20, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking any proxy heretofore given, hereby appoints
Thomas D. O'Malley, Jefferson F. Allen and Wilkes McClave III, or any of them,
proxies of the undersigned, with full power of substitution, with respect to all
of the shares of stock of TOSCO CORPORATION ("Tosco") which the undersigned is
entitled to vote at Tosco's Annual Meeting of Stockholders to be held on
Thursday, May 20, 1999, and at any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE REVERSE SIDE)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL I, FOR PROPOSAL II AND AGAINST
PROSPSAL III.
I. ELECTION OF DIRECTORS: To elect the ten (10) nominees for Director
listed below for a term of one year.
FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY [ ]
(except as indicated to the to vote for all nominees
contrary below) listed below
Jefferson F. Allen, Patrick M. deBarros, Wayne A. Budd, Houston I.
Flournoy, Edmund A. Hajim, Joseph P. Ingrassia, Charles J. Luellen, Eija
Malmivirta, Mark R. Mulvoy, Thomas D. O'Malley.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
_______________________________________________________________________________
II. Proposal to ratify and approve the appointment of
PricewaterhouseCoopers LLP as independent auditors of Tosco for the fiscal year
ending December 31, 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
III. To approve the stockholder proposal described in the accompanying
Proxy Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
IV. In their discretion, upon any other matters which may properly
come before the meeting or any adjournment thereof.
Receipt of the Notice of Annual Meeting and of the Proxy Statement and Annual
Report to Stockholders of Tosco is hereby acknowledged.
Dated ____________________, 1999
_________________________(L.S.)
(Signature of Stockholder)
_________________________(L.S.)
(Signature of Stockholder)
_________________________
Your signature should
appear the same as your
name appears hereon. If
signing as attorney,
executor, administrator,
trustee or guardian, please
indicate the capacity in
which signing. When signing
as joint tenants, all
parties to the joint
tenancy must sign. When the
proxy is given by a
corporation, it should be
signed by an authorized officer.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.