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[UNION TEXAS. LETTERHEAD]
September 26, 1997
Dear Stockholder:
On September 12, 1997, your Board of Directors adopted a Rights Agreement and
declared a dividend of one Right on each outstanding share of Union Texas
Petroleum Holdings, Inc. ("Union Texas") Common Stock. The dividend is payable
on September 23, 1997 to the stockholders of record on that date.
These Rights contain provisions to protect stockholders in the event of an
unsolicited attempt to acquire Union Texas, including a gradual accumulation of
shares in the open market, a two-tier tender offer that does not treat all
stockholders equally, a squeeze-out merger and other abusive takeover tactics
which the Board believes are not in the best interests of the stockholders.
These tactics unfairly pressure the stockholders, squeeze them out of their
investment without giving them any real choice and deprive them of the full
value of their shares.
The Rights will initially trade with shares of Union Texas' Common Stock and
will have no impact on the way in which Union Texas' shares are traded. There
are no separate certificates or market for the Rights. The Rights Agreement
does not in any way weaken Union Texas' financial strength or interfere with
its business plans. The issuance of the Rights have no dilutive effect, will
not affect reported earnings per share and is not taxable to Union Texas or
you.
The Rights Agreement may cause substantial dilution to a person or group that
acquires 15% or more of Union Texas' Common Stock unless the Rights are first
redeemed by the Board of Directors. Since the Board of Directors can redeem
the Rights at $.001 per Right in cash prior to the date of a public
announcement that a person or group has acquired 15% or more of Union Texas'
stock, the Rights Agreement should not interfere with any merger or other
business combination that is in the best interests of Union Texas and its
stockholders.
Many other public companies have adopted similar plans, indicating widespread
agreement that such plans can help the Board of Directors deflect coercive and
inadequate offers.
A summary of the terms of the Rights Agreement is attached. The summary is not
complete and is qualified in its entirety by the Rights Agreement relating
thereto, a copy of which can be obtained free of charge from Union Texas
Petroleum Holdings, Inc., 0000 Xxxx Xxx Xxxxxxxxx, Xxxxxxx, Xxxxx 00000,
Attention: Corporate Secretary.
In adopting the Rights Agreement, the Board is giving you, the stockholders,
every opportunity to participate fully in Union Texas' future.
On behalf of the Board of Directors,
Xxxx Xxxxxxxx
Chairman & Chief Executive Officer
