-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FUf26ROKP9heOlHMW0aGrfRS9jZHsOn/8F2QJTHE3J+CcYsXrTz5KMMUbt6JtgMp NpYbkrtSu90eU/bzScb/nw== 0000902595-99-000053.txt : 19990303 0000902595-99-000053.hdr.sgml : 19990303 ACCESSION NUMBER: 0000902595-99-000053 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19990302 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NUEVO ENERGY CO CENTRAL INDEX KEY: 0000861819 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 760304436 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-41101 FILM NUMBER: 99555269 BUSINESS ADDRESS: STREET 1: 1331 LAMAR ST STE 1650 CITY: HOUSTON STATE: TX ZIP: 77010 BUSINESS PHONE: 7136520706 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RELATIONAL INVESTORS LLC CENTRAL INDEX KEY: 0001047644 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 330694767 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 4330 LA JOLLA VILLAGE DRIVE, SUITE 220 CITY: SAN DIEGO STATE: CA ZIP: 92122 BUSINESS PHONE: 6195979400 SC 13D/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 5)* NUEVO ENERGY COMPANY (Name of Issuer) Common Stock, par value $0.01 per share (Title of class of securities) 0067050910 (CUSIP number) Ralph V. Whitworth Relational Investors, LLC 4330 La Jolla Village Drive, Suite 220 San Diego, California 92122 (619) 597-9400 (Name, address and telephone number of person authorized to receive notices and communications) March 1, 1999 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-l(b)(3) or (4), check the following box [_]. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-l(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 0067050910 - ------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON RELATIONAL INVESTORS, LLC - -------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------- 4 SOURCE OF FUNDS 00 - -------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------- 7 SOLE VOTING POWER 1,914,300 NUMBER OF ------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY ------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 1,914,300 PERSON ------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,914,300 - -------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.65% - -------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - -------------------------------------------------------- CUSIP No. 006705910 - ------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON RELATIONAL INVESTORS, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------- 4 SOURCE OF FUNDS WC - -------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------- 7 SOLE VOTING POWER 1,435,970 NUMBER OF ------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY ------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 1,435,970 PERSON ------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,435,970 - -------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.24% - -------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - -------------------------------------------------------- CUSIP No. 0067050910 - -------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON RELATIONAL FUND PARTNERS, L.P. - -------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------- 4 SOURCE OF FUNDS WC/OO - -------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------- 7 SOLE VOTING POWER 147,320 NUMBER OF --------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY ------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 147,320 PERSON -------------------------------- WITH 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 147,320 - ------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.74% - ------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - ------------------------------------------------------- CUSIP No. 0067050910 - -------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON RELATIONAL COAST PARTNERS, L.P. - ------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------- 4 SOURCE OF FUNDS WC/OO - ------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------- 7 SOLE VOTING POWER 63,806 NUMBER OF --------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY ------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 63,806 PERSON -------------------------------- WITH 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 63,806 - ------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.32% - ------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - ------------------------------------------------------- CUSIP No. 0067050910 - -------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON RELATIONAL PARTNERS, L.P. - ------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------- 4 SOURCE OF FUNDS WC/OO - ------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------- 7 SOLE VOTING POWER 228,136 NUMBER OF --------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY ------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 228,136 PERSON -------------------------------- WITH 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 228,136 - ------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.15% - ------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - ------------------------------------------------------- CUSIP No. 0067050910 - -------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON RALPH V. WHITWORTH - ------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------- 4 SOURCE OF FUNDS NA - ------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF --------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 1,914,300 OWNED BY ------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON -------------------------------- WITH 10 SHARED DISPOSITIVE POWER 1,914,300 - -------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,914,300 - ------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.65% - ------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------- CUSIP No. 0067050910 - -------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON DAVID H. BATCHELDER - ------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------- 4 SOURCE OF FUNDS NA - ------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF --------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 1,914,300 OWNED BY ------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON -------------------------------- WITH 10 SHARED DISPOSITIVE POWER 1,914,300 - -------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,914,300 - ------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.65% - ------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------- CUSIP No. 0067050910 - -------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON JOEL L. REED - ------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------- 4 SOURCE OF FUNDS NA - ------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF --------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 1,914,300 OWNED BY ------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON -------------------------------- WITH 10 SHARED DISPOSITIVE POWER 1,914,300 - -------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,914,300 - ------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.65% - ------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------- This Amendment No. 5 to Schedule 13D (this "Statement") is being filed by and on behalf of Relational Investors, L.P. ("RILP"), Relational Fund Partners, L.P. ("RFP"), Relational Coast Partners, L.P. ("RCP"), and Relational Partners, L.P. ("RP"). Each of RILP, RFP, RCP and RP is a Delaware limited partnership. The principal business of each of RILP, RFP, RCP and RP is investing in securities. This Statement is also being filed by and on behalf of Relational Investors, LLC ("RILLC"), a Delaware limited liability company. The principal business of RILLC is being the sole general partner of RILP, RFP, RCP and RP. RILP, RFP, RCP, RP and an account managed by RILLC are the beneficial owners of the securities covered by this Statement. Pursuant to the Limited Partnership Agreement of each of RILP, RFP, RCP and RP, and the investment management agreement for the account managed by RILLC, RILLC has sole investment discretion and voting authority with respect to the securities covered by this Statement. This Statement is also being filed by and on behalf of Ralph V. Whitworth, David H. Batchelder and Joel L. Reed. Messrs. Whitworth, Batchelder and Reed are the Managing Members of RILLC, in which capacity they share voting control and dispositive power over the securities covered by this Statement. Messrs. Whitworth, Batchelder and Reed, therefore, may be deemed to have shared indirect beneficial ownership of such securities. The present principal occupation of each of Messrs. Whitworth and Batchelder is serving as a Managing Member of RILLC. The present principal occupation of Mr. Reed is serving as President of Batchelder & Partners, Inc. (Messrs. Whitworth, Batchelder and Reed, together with RILP, RFP, RCP, RP and RILLC, hereinafter, the "Reporting Persons"). This Statement hereby amends the Schedule 13D filed on April 20, 1998, as amended by the Schedule 13D/A filed on May 26, 1998, the Schedule 13D/A filed on July 16, 1998, the Schedule 13D/A filed on September 23, 1998, and the Schedule 13D/A filed on December 14, 1998, as follows: ITEM 4. PURPOSE OF THE TRANSACTION. Item 4 is hereby amended in its entirety by substituting the following: As of the date of this Statement, except as set forth below, none of the Reporting Persons has any present plan or intention which would result in or relate to any of the actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. The Reporting Persons acquired the Shares covered by this Statement because, in their opinion, such Shares are undervalued by the market at the present time. During the course of their investment, the Reporting Persons have closely monitored the Company's performance and determined that, despite the steps the Company took to add independent directors to the Company's board in March and April of 1998, the Company's corporate governance and responsiveness to shareholders would be enhanced by the addition to the Company's board of directors of a representative of the Company's largest shareholder. Consistent with this determination, on December 11, 1998, in compliance with the Company's charter and bylaws, the Reporting Persons by the letter previously filed with the Schedule 13D/A filed on December 14, 1998 notified the Company of the Reporting Persons' intention to nominate David H. Batchelder, one of the Reporting Persons, to stand for election to the Company's board of directors at the Company's 1999 Annual Meeting of Stockholders ("Nomination Notice"). On March 1, 1999, the Reporting Persons entered into a letter agreement with the Company (the "Agreement"),a copy of which is filed herewith as Exhibit 5. Pursuant to the terms of the Agreement, Mr. Batchelder would be elected to the Company's board of directors no later than March 31, 1999 and, upon such election, the Reporting Persons will withdraw their Nomination Notice. Prior to becoming a member of the board, Mr. Batchelder is obligated to deliver to the board of the Company an executed, undated, irrevocable letter of resignation in the form attached to the Agreement as Exhibit A. Upon the good faith determination by a majority of the Board of Directors of Nuevo Energy Company that acceptance of the resignation is necessary to enable the Company to pursue its strategic alternatives in a manner the Board of Directors reasonably believes to be in the best interests of the Company's stockholders, such resignation shall become effective and the Agreement will terminate except as provided therein. The Reporting Persons continue to closely monitor the Company's performance. Consistent with the Reporting Persons' obligations under the Agreement, the Reporting Persons and their representatives and advisers intend to continue from time-to-time to discuss the Company and its business and management with members of the board of directors and management of the Company and communicate with other shareholders concerning the Company. The Reporting Persons may modify their plans in the future. The Reporting Persons may from time-to-time (i) acquire additional Shares (subject to availability at prices deemed favorable) in the open market, in privately negotiated transactions, or otherwise, or (ii) dispose of Shares at prices deemed favorable in the open market, in privately negotiated transactions or otherwise. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The following Exhibit 5 filed herewith is hereby added as an Exhibit: 5. Letter agreement between Nuevo Energy Company and Relational Investors, LLC, dated March 1, 1999. SIGNATURES After reasonable inquiry and to the best of their knowledge and belief, the undersigned certify that the information contained in this Amendment No. 5 to Schedule 13D is true, complete and correct. Dated: March 2, 1999 RELATIONAL INVESTORS, L.P. RELATIONAL FUND PARTNERS, L.P. RELATIONAL COAST PARTNERS, L.P. RELATIONAL PARTNERS, L.P. By: Relational Investors, LLC - -------------------------------- as general partner to each By: /s/ Ralph V. Whitworth ----------------------------- Ralph V. Whitworth Managing Member RELATIONAL INVESTORS, LLC By: /s/ Ralph V. Whitworth --------------------------------- Ralph V. Whitworth Managing Member /s/ Ralph V. Whitworth - -------------------------------------- Ralph V. Whitworth /s/ David H. Batchelder - -------------------------------------- David H. Batchelder /s/ Joel L. Reed - -------------------------------------- Joel L. Reed EXHIBIT INDEX
Page No. Exhibit No. Description - ------- ----------- ----------- 5. Letter agreement between Nuevo Energy Company and Relational Investors, LLC, dated March 1, 1999.
EX-5 2 EXHIBIT 5 EXHIBIT 5 LETTER AGREEMENT BETWEEN NUEVO ENERGY COMPANY AND RELATIONAL INVESTORS, LLC, DATED MARCH 1, 1999. NUEVO ENERGY COMPANY 1331 Lamar, Suite 1650 Houston, Texas 77010-3039 March 1, 1999 RELATIONAL INVESTORS, LLC 4330 La Jolla Village Drive, Suite 220 San Diego, CA 92212 Gentlemen: Relational Investors, LLC ("Relational") has submitted to Nuevo Energy Company, a Delaware corporation (the "Company"), a letter, dated December 11, 1998 (the "Nomination Notice"), proposing one nominee to stand for election to the Company's Board of Directors (the "Board") at the 1999 Annual Meeting of Stockholders of the Company (the "1999 Annual Meeting"). As a result of conversations between Relational and the Chairman of the Corporate Governance Committee of the Board, the Board has agreed to consider the nomination of David H. Batchelder or such other person proposed by Relational and reasonably acceptable to the Governance Committee of the Board (the "Proposed Director") to the Board, in light of (i) the fact that Relational is one of the Company's largest stockholders, and (ii) the Company's desire to avoid the expense and distraction of a possible proxy contest by Relational, subject to Relational entering into this letter agreement. In connection with the consideration of the Proposed Director by the Board, Relational and the Company have agreed that if the Proposed Director is elected by the Board to become a member of the Board beginning at the next regularly scheduled Board meeting (which the Proposed Director shall be invited to attend and shall be elected a director of the Company at the beginning of such meeting) and in no case later than March 31, 1999, then upon such election: 1. Relational will withdraw the Nomination Notice, and Relational, on behalf of itself and each of its affiliates and associates (as such terms are defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), will have waived any right to submit a new Nomination Notice in connection with the 1999 Annual Meeting; 2. Upon his election to the Board, the Proposed Director will abide by the Nuevo Energy Company Corporate Governance Guidelines as currently in effect and neither Relational, nor any of its affiliates or associates shall, directly or indirectly, take any action that is intended to frustrate the requirements of such Guidelines; 3. So long as the Proposed Director is a member of the Board, and for a period ending on the date that is 90 days after the date that the Proposed Director is no longer a director of the Company, Relational will not, and it will cause its affiliates and associates not to, directly or indirectly, seek or propose to obtain additional representation on the Board, or solicit any proxies or consents with respect to any securities of the Company, or participate as a participant (as such term is defined in Instruction 3 to Item 4 of Schedule 14A (Rule 14a-101) without giving effect to the exception set forth in paragraph (b)(iii) of such Instruction) in the solicitation of any proxies or consents with respect to any securities of the Company, or make or submit any proposal to the Company's stockholders (pursuant to Rule 14a-8 under the Exchange Act or otherwise); provided, however, that the foregoing shall not prohibit Relational or its affiliates and associates from (a) soliciting to maintain representation on the Board by the Proposed Director in the event of an "election contest" (as such term is used in Rule 14a-11 under the Exchange Act), or (b) stating publicly how they intend to vote their shares on any matter properly brought before the Company's stockholders at any annual or special meeting of the Company's stockholders as contemplated by Rule 14a-1(l)(2)(iv) of the Exchange Act (including explaining their reasons for such position and discussing such position with the Company's stockholders); provided, further, that to the extent (i) the Proposed Director resigns (other than pursuant to the penultimate paragraph of this letter agreement) from the Board more than 90 days prior to any meeting of stockholders where directors are to be elected, or (ii) this letter agreement is terminated pursuant to the penultimate paragraph of this letter agreement, then, for a period of fifteen days following the date that the Proposed Director is no longer a member of the Board, the Company will take all necessary actions to permit Relational to submit during such fifteen day period (a) nominations for the election of directors notwithstanding the limitation set forth in Section 2 of Article Six of the Company's Certificate of Incorporation and (b) matters for business to be considered by the Company's stockholders that may be properly brought before any such meeting by exempting Relational from the application of any advance notice provisions that would otherwise prevent such matters from being brought before such meeting; or 4. So long as the Proposed Director is a member of the Board, neither Relational nor any of its affiliates and associates will, directly or indirectly, initiate, continue or enter into any discussions or negotiations with any industry participant or other party regarding the Company's pursuit of its strategic alternatives or such party's or the Company's interest in pursuing a business combination, acquisition or merger transaction or any other extraordinary transaction involving the Company; provided, however, that the foregoing shall not prohibit Relational or its affiliates or associates from having discussions with any of the Company's stockholders, solely to the extent such discussions do not involve such stockholder's interest in pursuing a business combination, acquisition or merger transaction or other extraordinary transaction involving the Company or otherwise involve discussion of any specific Board deliberations regarding the Company's pursuit of its strategic alternatives; provided, further, that to the extent Relational or any of its affiliates or associates receives an unsolicited inquiry from a third party relating to the Company's interest in pursuing a business combination, acquisition or merger transaction or any other extraordinary transaction involving the Company, the Proposed Director shall refer such third party to the Company's Chairman of the Board and the Proposed Director shall promptly inform the Company's Chairman of the Board of such inquiry. Notwithstanding the foregoing, so long as the Proposed Director is a member of the Board, nothing shall prohibit Relational and its respective affiliates and associates, from (a) communicating with the Proposed Director, or (b) making a request, suggestion or proposal to the Proposed Director or the Chairman of the Board (and either the Proposed Director or the Chairman of the Board conveying such request, proposal or suggestions to the Board), provided, however, in each case, that such action will not result in the Company, Relational, or the affiliates or associates of Relational being required to make any public announcement or public disclosure as a result of such action. Nothing in this letter agreement shall prohibit or otherwise prevent the Proposed Director from exercising his fiduciary duties to the Company's stockholders as a director of the Company as required by applicable law. This letter agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without giving effect to the principles of conflicts of laws thereof. Venue for any action to enforce the provisions of this letter agreement shall be properly laid only in any federal court in the State of Delaware; provided, however, if jurisdiction or venue may not be properly laid in any federal court in the State of Delaware then venue for any action to enforce the provisions of this letter agreement shall be properly laid only in any state court in the State of Delaware. It is further understood and agreed that no failure or delay by the Company or Relational in exercising any right, power or privilege under this letter agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. The parties hereto acknowledge that money damages are an inadequate remedy for breach of this letter agreement because of the difficulty of ascertaining the amount of damage that will be suffered in the event that this letter agreement is breached. Therefore, we each agree that the parties to this letter agreement may obtain specific performance of this letter agreement and injunctive or other equitable relief as a remedy for any such breach, and each party further waives any requirement for the securing or posting of any bond in connection with any such remedy. Such remedy shall not be deemed to be the exclusive remedy for breach of this letter agreement, but shall be in addition to all other remedies available at law or equity. In the event that either party to this letter agreement believes that the other party is in breach of this letter agreement, prior to commencing any litigation with respect to such breach, the non- breaching party shall give written notice of the alleged breach to the breaching party and provide the breaching party with a reasonable opportunity to respond. If any term, provision, covenant or restriction of this letter agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The agreements set forth in this letter agreement may be modified or waived only by a separate writing between the Company and Relational expressly so modifying or waiving such agreements. If for any reason, other than a decision by the Proposed Director not to stand for reelection, the Proposed Director is not nominated by the Board for reelection to the Board at any meeting of the Company's stockholders where the Proposed Director would otherwise stand for reelection, then this letter agreement shall terminate (except for the provisions set forth in the "provided, further," clause of numbered paragraph 3 of this letter agreement that are intended to survive termination of this letter agreement) upon the decision by the Board (or the Nominating Committee of the Board) not to renominate the Proposed Director (which decision shall be communicated to the Proposed Director in writing not later than the following business day). Prior to becoming a member of the Board, the Proposed Director shall deliver to the Board an executed, undated letter of resignation in the form attached to this letter agreement as Exhibit A. Upon the good faith acceptance by the Board of such letter of resignation (which acceptance shall be communicated in writing to the Proposed Director no later than the following business day), this letter agreement shall terminate (except for the provisions set forth in the "provided, further," clause of numbered paragraph 3 of this letter agreement that are intended to survive termination of this letter agreement). If you are in agreement with the foregoing, please so indicate by signing and returning one copy of this letter agreement, which will constitute our agreement with respect to the matters set forth herein. This letter agreement may be executed in two counterparts which together shall constitute a single agreement. Very truly yours, NUEVO ENERGY COMPANY /s/ Doug L. Foshee By: Doug L. Foshee Confirmed and Agreed to as of the date first above written: RELATIONAL INVESTORS, LLC, on behalf of itself and its affiliates and associates (including the Proposed Director) /s/ Ralph V. Whitworth By: Ralph V. Whitworth EXHIBIT A Board of Directors Nuevo Energy Company 1331 Lamar, Suite 1650 Houston, Texas 77010-3039 Gentlemen: I hereby resign as a director of Nuevo Energy Company, such resignation being effective upon the good faith determination by a majority of the Board of Directors of Nuevo Energy Company that acceptance of the resignation is necessary to enable the Company to pursue its strategic alternatives in a manner the Board of Directors reasonably believes to be in the best interests of the Company's stockholders. This resignation letter is irrevocable. Sincerely, /s/ David H. Batchelder David H. Batchelder -----END PRIVACY-ENHANCED MESSAGE-----