Item 1.01. Entry Into a Material Definitive Agreement.
On July 20, 2020, Noble Energy, Inc. (the "Company" or "Noble Energy") entered
into an Agreement and Plan of Merger (the "Merger Agreement") with Chevron
Corporation ("Chevron") and Chelsea Merger Sub Inc., a direct, wholly-owned
subsidiary of Chevron ("Merger Subsidiary"). The Merger Agreement provides that,
among other things and subject to the terms and conditions of the Merger
Agreement, Merger Subsidiary will be merged with and into Noble Energy, with
Noble Energy surviving and continuing as the surviving corporation in the Merger
as a direct, wholly-owned subsidiary of Chevron (such transaction, the
"Merger").
At the Effective Time (as such term is defined in the Merger Agreement), each
outstanding share of common stock of Noble Energy, par value $0.01 per share
(the "Company Common Stock"), will be converted into the right to receive 0.1191
of a share of common stock of Chevron, par value $0.75 per share ("Chevron
Common Stock"), plus cash in lieu of any fractional shares of Chevron Common
Stock that otherwise would have been issued (the "Merger Consideration").
Pursuant to the Merger Agreement, at the Effective Time, awards of Noble Energy
stock options, cash-settled restricted stock units, restricted stock and
performance shares will convert into similar awards of Chevron based on the
value of the Merger Consideration at closing, assuming that any
performance-based vesting conditions applicable to such performance shares are
achieved at the greater of "target" performance or actual performance as of the
closing.
The board of directors of Noble Energy has unanimously approved the Merger
Agreement and resolved to recommend the adoption of the Merger Agreement by
Noble Energy stockholders, who will be asked to vote on the adoption of the
Merger Agreement at a special stockholders meeting.
The completion of the Merger is subject to satisfaction or waiver of certain
customary mutual closing conditions, including (1) the receipt of the required
approval from Noble Energy stockholders, (2) the expiration or termination of
the waiting period under the Hart-Scott-Rodino Act, as amended (the "HSR Act")
applicable to the Merger, and the receipt of other applicable customary
regulatory approvals, (3) the absence of any order or law prohibiting
consummation of the Merger, (4) the effectiveness of the Registration Statement
on Form S-4 to be filed by Chevron pursuant to which the shares of Chevron
Common Stock to be issued in connection with the Merger will be registered with
the Securities and Exchange Commission (the "SEC") and (5) the authorization for
listing on the New York Stock Exchange of the shares of Chevron Common Stock to
be issued in connection with the Merger. The obligation of each party to
consummate the Merger is also conditioned upon the other party's representations
and warranties being true and correct (subject to certain materiality
thresholds) and the other party having performed in all material respects its
obligations under the Merger Agreement.
The Merger Agreement contains customary representations and warranties of Noble
Energy and Chevron relating to their respective businesses, financial statements
and public filings, in each case generally subject to customary materiality
qualifiers. Additionally, the Merger Agreement provides for customary
pre-closing covenants of Noble Energy and Chevron, including a covenant of Noble
Energy relating to conducting its business in the ordinary course consistent
with past practice, subject to certain exceptions, and covenants of each party
to refrain from taking certain actions without the other party's consent. Noble
Energy and Chevron also agreed to use their respective reasonable best efforts
to cause the Merger to be consummated, to avoid or eliminate impediments under
any antitrust laws, and to obtain expiration or termination of the waiting
period under the HSR Act and other applicable regulatory approvals, subject to
certain exceptions, including that Chevron is not required to take or authorize
any action that would result in or be reasonably likely to result in a material
adverse effect (after giving effect to any reasonably expected proceeds of any
divestiture or sale of assets) on the financial condition, business, assets or
continuing results of operations of Noble Energy (or, in the case of actions
with respect to Chevron's pre-closing assets, if such action with respect to a
comparable amount of assets or businesses of Noble Energy, taken together with
all other actions required to obtain the required applicable regulatory
approvals pursuant to the Merger Agreement, would be reasonably likely, in the
aggregate, to have such effect).
The Merger Agreement provides that, during the period from the date of the
Merger Agreement until the Effective Time, Noble Energy is subject to certain
restrictions on its ability to solicit alternative acquisition proposals from
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third parties and to provide non-public information to third parties and to
engage in negotiations with third parties regarding alternative acquisition
proposals, subject to exceptions. Unless the Merger Agreement is terminated,
Noble Energy is required to call a meeting of its stockholders to vote on a
proposal to adopt the Merger Agreement and to recommend that its stockholders
adopt the Merger Agreement.
The Merger Agreement contains termination rights for each of Noble Energy and
Chevron, including, among others, (1) if the consummation of the Merger does not
occur on or before January 20, 2021 (the "End Date"); except that if the
Effective Time has not occurred by January 20, 2021 due to the fact that all
required applicable regulatory approvals have not been obtained but all other
conditions to closing have been satisfied (other than those conditions that by
their terms are to be satisfied at the closing, each of which is capable of
being satisfied) or (to the extent permitted by law) waived, the End Date shall
automatically be extended to April 20, 2021; and (2) subject to certain
conditions, if Noble Energy wishes to terminate the Merger Agreement to enter
into a definitive agreement with respect to a Superior Proposal (as such term is
defined in the Merger Agreement). Upon termination of the Merger Agreement under
specified circumstances, including the termination by Chevron in the event of a
change of recommendation by the board of directors of Noble Energy or by Noble
Energy in order to enter into a new definitive agreement with respect to an
alternative acquisition proposal, Noble Energy would be required to pay Chevron
a termination fee of $176,295,000.
The foregoing description of the Merger Agreement and the transactions
contemplated thereby in this Current Report on Form 8-K is only a summary and
does not purport to be complete and is qualified in its entirety by reference to
the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1
hereto and incorporated by reference herein.
The Merger Agreement has been included to provide investors with information
regarding its terms. It is not intended to provide any other factual information
about Noble Energy or Chevron. The representations, warranties and covenants
contained in the Merger Agreement were made only for purposes of the Merger
Agreement as of the specific dates therein, were solely for the benefit of the
parties to the Merger Agreement, may be subject to limitations agreed upon by
the contracting parties, including being qualified by confidential disclosures
made for the purposes of allocating contractual risk between the parties to the
Merger Agreement instead of establishing these matters as facts, and may be
subject to standards of materiality applicable to the contracting parties that
differ from those applicable to investors. Investors are not third-party
beneficiaries under the Merger Agreement and should not rely on the
representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of the parties
thereto or any of their respective subsidiaries or affiliates. Moreover,
information concerning the subject matter of representations and warranties may
change after the date of the Merger Agreement, which subsequent information may
or may not be fully reflected in Noble Energy's public disclosures.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of July 20, 2020, by and
among Chevron Corporation, Chelsea Merger Sub Inc., and Noble Energy,
Inc.†
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document.
† Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The
registrant hereby undertakes to furnish supplementally copies of any of the
omitted schedules upon request by the SEC.
Important Information For Investors and Stockholders
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of securities shall
be made except by means of a prospectus meeting the requirements of Section 10
of the Securities Act of 1933, as amended. In connection with the potential
transaction, Chevron expects to file a registration statement on Form S-4 with
the Securities and Exchange Commission ("SEC") containing a preliminary
prospectus of Chevron that also constitutes a preliminary proxy statement of
Noble Energy. After the registration statement is declared effective, Noble
Energy will mail a definitive proxy statement/prospectus to stockholders of
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Noble Energy. This communication is not a substitute for the proxy
statement/prospectus or registration statement or for any other document that
Chevron or Noble Energy may file with the SEC and send to Noble Energy's
stockholders in connection with the potential transaction. INVESTORS AND
SECURITY HOLDERS OF CHEVRON AND NOBLE ENERGY ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders will be able to obtain free copies
of the proxy statement/prospectus (when available) and other documents filed
with the SEC by Chevron or Noble Energy through the website maintained by the
SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Chevron
will be available free of charge on Chevron's website at
http://www.chevron.com/investors and copies of the documents filed with the SEC
by Noble Energy will be available free of charge on Noble Energy's website at
http://investors.nblenergy.com.
Chevron and Noble Energy and certain of their respective directors, certain of
their respective executive officers and other members of management and
employees may be considered participants in the solicitation of proxies with
respect to the potential transaction under the rules of the SEC. Information
about the directors and executive officers of Chevron is set forth in its Annual
Report on Form 10-K for the year ended December 31, 2019, which was filed with
the SEC on February 21, 2020, and its proxy statement for its 2020 annual
meeting of stockholders, which was filed with the SEC on April 7, 2020.
Information about the directors and executive officers of Noble Energy is set
forth in its Annual Report on Form 10-K for the year ended December 31, 2019,
which was filed with the SEC on February 12, 2020, and its proxy statement for
its 2020 annual meeting of stockholders, which was filed with the SEC on
March 10, 2020. These documents can be obtained free of charge from the sources
indicated above. Additional information regarding the interests of such
participants in the solicitation of proxies in respect of the potential
transaction will be included in the registration statement and proxy
statement/prospectus and other relevant materials to be filed with the SEC when
they become available.
Cautionary Statement Regarding Forward-Looking Information
This communication contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements generally include statements
regarding the potential transaction between Chevron and Noble Energy, including
any statements regarding the expected timetable for completing the potential
transaction, the ability to complete the potential transaction, the expected
benefits of the potential transaction (including anticipated annual run-rate
operating and exploration cost synergies and anticipated accretion to return on
capital employed, free cash flow, and earnings per share), projected financial
information, future opportunities, and any other statements regarding Chevron's
and Noble Energy's future expectations, beliefs, plans, objectives, results of
operations, financial condition and cash flows, or future events or performance.
These statements are often, but not always, made through the use of words or
phrases such as "anticipates," "expects," "intends," "plans," "targets,"
"forecasts," "projects," "believes," "seeks," "schedules," "estimates,"
"positions," "pursues," "may," "could," "should," "will," "budgets," "outlook,"
"trends," "guidance," "focus," "on schedule," "on track," "is slated," "goals,"
"objectives," "strategies," "opportunities," "poised," "potential" and similar
expressions. All such forward-looking statements are based on current
expectations of Chevron's and Noble Energy's management and therefore involve
estimates and assumptions that are subject to risks, uncertainties and other
factors that could cause actual results to differ materially from the results
expressed in the statements. Key factors that could cause actual results to
differ materially from those projected in the forward-looking statements include
the ability to obtain the requisite Noble Energy stockholder approval;
uncertainties as to the timing to consummate the potential transaction; the risk
that a condition to closing the potential transaction may not be satisfied; the
risk that regulatory approvals are not obtained or are obtained subject to
conditions that are not anticipated by the parties; the effects of disruption to
Chevron's or Noble Energy's respective businesses; the effect of this
communication on Chevron's or Noble Energy's stock prices; the effects of
industry, market, economic, political or regulatory conditions outside of
Chevron's or Noble Energy's control; transaction costs; Chevron's ability to
achieve the benefits from the proposed transaction, including the anticipated
annual run-rate operating and exploration cost synergies and accretion to return
on capital employed, free cash flow, and earnings per share; Chevron's ability
to promptly, efficiently and effectively integrate acquired operations into its
own operations; unknown liabilities; and the diversion of management time on
transaction-related issues. Other important factors that could cause actual
results to differ materially from those in the forward-looking statements are:
changing crude oil and natural gas prices and demand for Chevron's or Noble
Energy's products and production curtailments due to market conditions; crude
oil production quotas or other actions that might be imposed by the Organization
of
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Petroleum Exporting Countries and other producing countries; public health
crises, such as pandemics (including coronavirus (COVID-19)) and epidemics, and
any related government policies and actions; changing economic, regulatory and
political environments in the various countries in which the parties operate;
general domestic and international economic and political conditions; changing
refining, marketing and chemicals margins; Chevron's ability to realize
anticipated cost savings, expenditure reductions and efficiencies associated
with enterprise transformation initiatives; actions of competitors or
regulators; timing of exploration expenses; timing of crude oil liftings; the
competitiveness of alternate-energy sources or product substitutes;
technological developments; the results of operations and financial condition of
the parties' suppliers, vendors, partners and equity affiliates, particularly
during extended periods of low prices for crude oil and natural gas during the
COVID-19 pandemic; the inability or failure of joint-venture partners to fund
their share of operations and development activities; the potential failure to
achieve expected net production from existing and future crude oil and natural
gas development projects; potential delays in the development, construction or
start-up of planned projects; the potential disruption or interruption of
operations due to war, accidents, political events, civil unrest, severe
weather, cyber threats, terrorist acts, or other natural or human causes beyond
Chevron's control; the potential liability for remedial actions or assessments
under existing or future environmental regulations and litigation; significant
operational, investment or product changes required by existing or future
environmental statutes and regulations, including international agreements and
national or regional legislation and regulatory measures to limit or reduce
greenhouse gas emissions; the potential liability resulting from pending or
future litigation; Chevron's future acquisitions or dispositions of assets or
shares or the delay or failure of such transactions to close based on required
closing conditions; the potential for gains and losses from asset dispositions
or impairments; government-mandated sales, divestitures, recapitalizations,
industry-specific taxes, tariffs, sanctions, changes in fiscal terms or
restrictions on scope of operations; foreign currency movements compared with
the U.S. dollar; material reductions in corporate liquidity and access to debt
markets; the receipt of required Board authorizations to pay future dividends;
the effects of changed accounting rules under generally accepted accounting
principles promulgated by rule-setting bodies; and Chevron's ability to identify
and mitigate the risks and hazards inherent in operating in the global energy
industry. Other unpredictable or unknown factors not discussed in this
communication could also have material adverse effects on forward-looking
statements. Noble Energy assumes no obligation to update any forward-looking
statements, except as required by law. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of the date
hereof. Additional factors that could cause results to differ materially from
those described above can be found in Noble Energy's most recent Annual Report
on Form 10-K, as it may be updated from time to time by quarterly reports on
Form 10-Q and current reports on Form 8-K all of which are available on the
Noble Energy's website at
http://investors.nblenergy.com/financial-information/sec-filings and on the
SEC's website at http://www.sec.gov, and in Chevron's most recent Annual Report
on Form 10-K, as it may be updated from time to time by quarterly reports on
Form 10-Q and current reports on Form 8-K all of which are available on
Chevron's website at
https://chevroncorp.gcs-web.com/financial-information/sec-filings and on the
SEC's website at http://www.sec.gov.
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