-----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, QSZoRdTIgM77wyYIC52NtX2/R3eC+147YVM69YdeLyFC6R0p+P1VgujHHRChy1Ti UgN3yw0BOzjjJ6zjlGK86g== 0000950130-99-005977.txt : 19991026 0000950130-99-005977.hdr.sgml : 19991026 ACCESSION NUMBER: 0000950130-99-005977 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19991025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION CARBIDE CORP /NEW/ CENTRAL INDEX KEY: 0000100790 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 131421730 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 001-01463 FILM NUMBER: 99732934 BUSINESS ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 BUSINESS PHONE: 2037942000 MAIL ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE CORP DATE OF NAME CHANGE: 19890806 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE & CARBON CORP DATE OF NAME CHANGE: 19710317 DEFA14A 1 DEFINITIVE ADDITIONAL MATERIALS UNITED STATES 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 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)) [ ] Definitive Proxy Statement [X] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 Filing by: Union Carbide Corporation (Name of Each Registrant as Specified in Its Charter) (Name of Person(s) Filing Statement, if other than the Registrant) Payment of filing fee (check the appropriate box): [ ] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [X] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided in 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: (2) Form, Schedule or Registration Statement no.: (3) Filing Party: (4) Date Filed: [UNION CARBIDE LOGO APPEARS HERE] To the Stockholders of Union Carbide Corporation: As you know, Union Carbide Corporation has entered into a merger agreement with The Dow Chemical Company and a wholly owned subsidiary of Dow. Previously, we sent to you the proxy statement/prospectus, dated October 5, 1999, which described the merger and included a notice of special meeting of stockholders to be held on December 1, 1999 for the purpose of adopting the merger agreement. As a result of the merger, Union Carbide would become a subsidiary of Dow and each then outstanding share of Union Carbide common stock would be converted into 0.537 of a share of Dow common stock. This proxy statement/prospectus supplement is provided to supplement the information contained in the proxy statement/prospectus. Union Carbide has restated net earnings for the first and second quarters of 1999 upward by $6 million ($.04 per diluted share) and $7 million ($.05 per diluted share), respectively. The fourth quarter of 1998 earnings were also understated by $2 million, after tax ($.01 per diluted share), the adjustment for which has been included in the third quarter of 1999. These adjustments correct an overstatement of cost of sales of $22 million ($15 million, after tax). The overstatement was the result of human error associated with a work process change in conjunction with Union Carbide's enterprise-wide information systems implementation. The overstatement did not impact cash flow. After considering the restatement of net earnings described above at a meeting on October 24, 1999, your board of directors continues to recommend that you vote FOR adoption of the merger agreement. Credit Suisse First Boston Corporation, Union Carbide's financial advisor, has delivered to the board of directors a letter, dated October 24, 1999 (attached as Annex I hereto), to the effect that had such restatement of net earnings been included in the information Credit Suisse First Boston reviewed in connection with issuing its opinion, dated August 3, 1999 (attached as Annex B to the proxy statement/prospectus), such restatement would not have resulted in any change to the conclusion reached in such opinion that, as of the date of such opinion, the exchange ratio provided for in the merger was fair to the holders of Union Carbide common stock from a financial point of view. We encourage you to read this letter carefully for a description of the matters considered and limitations on the review undertaken with respect to this letter. Your vote is very important. The affirmative vote of holders of two-thirds of the outstanding shares of Union Carbide common stock is required to adopt the merger agreement. Regardless of the number of shares you own, or whether you plan to attend the December 1, 1999 stockholders meeting, please complete, sign, date and mail your proxy card or vote your proxy by telephone, fax or the Internet as soon as possible to make sure your shares are represented at the meeting. See pages 15-17 of the proxy statement/prospectus for voting instructions. If you have already returned a proxy card or voted by telephone, fax or the Internet, no further action is required. If you have not yet voted, we request that you do so promptly. Sincerely, /s/ William H. Joyce Dr. William H. Joyce Chairman of the Board, President and Chief Executive Officer Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this proxy statement/ prospectus supplement or the proxy statement/prospectus. Any representation to the contrary is a criminal offense and should be reported immediately to the Securities and Exchange Commission. ---------------- The date of this proxy statement/prospectus supplement is October 25, 1999. This proxy statement/prospectus supplement includes revised financial information that supersedes certain financial information contained in the proxy statement/prospectus. This proxy statement/prospectus supplement should be read in conjunction with the proxy statement/prospectus. If you require an additional copy of the proxy statement/prospectus, please call D.F. King & Co., Inc. at 1-800-994-3227. In connection with the restatement of net earnings described above, on October 25, 1999, Union Carbide filed with the Securities and Exchange Commission Forms 10-Q/A for the quarterly periods ended March 31, 1999 and June 30, 1999, respectively. The proxy statement/prospectus as supplemented by this proxy statement/prospectus supplement incorporates by reference the information contained in these Forms 10-Q/A as well as other important business and financial information about both Dow and Union Carbide that is not included in or delivered with the proxy statement/prospectus or this proxy statement/prospectus supplement. See "Additional Information--Where You Can Find More Information" on pages 61-62 of the proxy statement/prospectus. 2 The following page supersedes page 4 of the proxy statement/prospectus: The unaudited equivalent pro forma per share information for Union Carbide is based on the unaudited pro forma amounts per share for Dow multiplied by the exchange ratio of 0.537. The information set forth below is qualified in its entirety by reference to, and should be read in conjunction with, the historical consolidated financial information of Dow and Union Carbide incorporated by reference in this proxy statement/prospectus and the unaudited pro forma combined condensed financial information included in this proxy statement/prospectus.
Year Ended Six Months December 31, Ended -------------------- June 30, 1999 1998 1997 1996 ------------- ------ ------- ----- Dow: Income per share from continuing operations: Basic: Historical............................. $ 3.35 $ 5.83 $ 7.81 $7.71 Pro forma.............................. 2.97 5.69 8.07 7.75 Diluted: Historical............................. $ 3.30 $ 5.76 $ 7.70 $7.60 Pro forma.............................. 2.93 5.61 7.79 7.44 Book value per share: Historical............................. $35.20 $33.91 Pro forma.............................. 35.88 34.93 Cash dividends declared per share: Historical............................. $ 1.74 $ 3.48 $ 3.36 $3.00 Pro forma.............................. 1.74 3.48 3.36 3.00 Union Carbide: Income per share before the cumulative effect of change in accounting principle: Basic: Historical............................. $ 1.05 $ 2.98 $ 5.02 $4.43 Equivalent pro forma................... 1.59 3.06 4.33 4.16 Diluted: Historical............................. $ 1.02 $ 2.91 $ 4.53 $3.90 Equivalent pro forma................... 1.57 3.01 4.18 4.00 Book value per share: Historical............................. $18.42 $18.46 Equivalent pro forma................... 19.27 18.76 Cash dividends declared per share: Historical............................. $ 0.45 $ 0.90 $0.7875 $0.75 Equivalent pro forma................... 0.93 1.87 1.80 1.61
The Meeting The meeting of Union Carbide's stockholders will take place on Wednesday, December 1, 1999, in the John C. Creasy Health Education Center, 24 Hospital Avenue, Danbury, Connecticut, at 10:00 a.m. Eastern time. At the meeting, you will be asked to vote on adoption of the merger agreement. If you plan to attend the meeting, you will need to obtain a ticket. Please call the toll-free number--1-800-934-3350--and a member of Union Carbide's Shareholder Services Department will process your ticket request. Vote Required Each stockholder of record on the record date is entitled to one vote on each matter submitted to a vote at the meeting for each share of Union Carbide common stock held. A majority of the shares of Union Carbide common stock outstanding on the record date represented in person or by proxy 3 The following page supersedes page 10 of the proxy statement/prospectus: Selected Historical Financial Information of Union Carbide Union Carbide is providing the following information to aid your analysis of the financial aspects of the merger. Union Carbide derived this information from audited financial statements for the years 1994 through 1998 and unaudited financial statements for the six months ended June 30, 1998 and 1999. In the opinion of Union Carbide management, this unaudited interim information reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of operations and financial condition for the six months ended June 30, 1998 and 1999. Results for interim periods should not be considered indicative of results for any other periods or for the year. This information is only a summary. You should read it along with Union Carbide's historical financial statements and related notes and the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in Union Carbide's annual reports, quarterly reports and other information on file with the Securities and Exchange Commission and incorporated by reference in this proxy statement/prospectus. See "Additional Information--Where You Can Find More Information."
Union Carbide ------------------------------------------------- Six Months Ended June 30, Year Ended December 31, ------------- ----------------------------------- 1999 1998 1998 1997 1996 1995 1994 ------ ------ ------ ------- ------ ------ ------ (in millions, except per share data) Selected Historical Consolidated Statements of Income Information: Net sales................... $2,820 $3,020 $5,659 $ 6,502 $6,106 $5,888 $4,865 Earnings before cumulative effect of change in accounting principle.................. 140 260 403 669 583 915 379 Earnings before cumulative effect of change in accounting principle per common share--basic.... $ 1.05 $ 1.91 $ 2.98 $ 5.02 $ 4.43 $ 6.65 $ 2.51 Earnings before cumulative effect of change in accounting principle per common share--diluted.. 1.02 1.86 2.91 4.53 3.90 5.85 2.27 Cash dividends declared per common share............... 0.45 0.45 0.90 0.7875 0.75 0.75 0.75 Weighted average common shares outstanding--basic......... 133.0 136.5 135.0 128.2 131.0 137.2 149.9 Weighted average common shares outstanding--diluted....... 136.1 140.2 138.4 144.0 151.6 157.9 170.7
December 31, June 30, ---------------------------------- 1999 1998 1997 1996 1995 1994 -------- ------ ------ ------ ------ ------ (in millions) Selected Historical Consolidated Balance Sheet Information: Working capital................... $ 613 $ 436 $ 362 $ 595 $ 858 $ 329 Total assets...................... 7,465 7,291 6,964 6,546 6,256 5,028 Total long-term debt.............. 2,044 1,796 1,458 1,487 1,285 899 Total stockholders' equity........ 2,454 2,449 2,348 2,114 2,045 1,509
4 The following page supersedes page 12 of the proxy statement/prospectus
Six Months Ended June 30, Year Ended December 31, --------------- ----------------------- 1999 1998 1998 1997 1996 ------- ------- ------- ------- ------- (in millions, except per share data) Selected Unaudited Pro Forma Combined Statements of Income Information: Net sales.............................. $11,856 $12,706 $24,100 $26,520 $26,159 Earnings before cumulative effect of change in accounting principle........ 879 1,106 1,707 2,471 2,483 Earnings before cumulative effect of change in accounting principle per common share--basic................... $ 2.97 $ 3.66 $ 5.69 $ 8.07 $ 7.75 Earnings before cumulative effect of change in accounting principle per common share--diluted................. 2.93 3.59 5.61 7.79 7.44 Weighted average common shares outstanding--basic.................... 295.6 302.2 299.8 303.2 320.4 Weighted average common shares outstanding--diluted.................. 301.3 308.7 305.4 315.9 336.1
December 31, June 30, ----------------------- 1999 1998 1997 1996 -------- ------- ------- ------- (in millions) Selected Unaudited Pro Forma Combined Balance Sheet Information: Working capital.............................. $ 2,470 $ 2,034 $ 2,391 $ 5,271 Total assets................................. 31,545 32,005 31,878 32,158 Total long-term debt and redeemable preferred stock....................................... 6,160 5,890 5,703 5,717 Net stockholders' equity..................... 10,548 10,278 10,374 10,468
5 The following page supersedes page 66 of the proxy statement/prospectus: UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET June 30, 1999 (in millions)
The Dow Union Carbide Merger Combined Chemical Corporation Pro Forma Pro Forma Company (As Restated) Adjustments (As Restated) -------- ------------- ----------- ------------- ASSETS Current Assets: Cash and cash equivalents. $ 218 $ 41 $ (75)(1) $ 659 475 (2) Accounts and notes receivable............... 4,065 1,075 -- 5,140 Inventories............... 2,593 599 -- 3,192 Other current assets...... 574 247 6 (4) 827 ------- ------- ------- ------- Total current assets.... 7,450 1,962 406 9,818 ------- ------- ------- ------- Investments: Investment in nonconsolidated affiliates............... 1,379 561 -- 1,940 Other investments and noncurrent receivables... 2,720 119 -- 2,839 ------- ------- ------- ------- Total investments....... 4,099 680 -- 4,779 ------- ------- ------- ------- Net Property................ 8,226 4,351 -- 12,577 ------- ------- ------- ------- Total Other Assets.......... 3,330 472 569 (4) 4,371 ------- ------- ------- ------- Total Assets............ $23,105 $ 7,465 $ 975 $31,545 ======= ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable and long- term debt due within one year..................... $ 1,286 $ 419 -- $ 1,705 Accounts payable.......... 2,394 239 -- 2,633 Other current liabilities. 2,313 691 $ 6 (4) 3,010 ------- ------- ------- ------- Total current liabilities............ 5,993 1,349 6 7,348 ------- ------- ------- ------- Long-Term Debt.............. 4,063 2,044 -- 6,107 ------- ------- ------- ------- Other Noncurrent Liabilities: Deferred income tax liabilities--noncurrent.. 785 -- 977 (4) 1,762 Pension and other postretirement benefits-- noncurrent............... 1,870 439 20 (4) 2,329 Other noncurrent obligations.............. 2,241 1,141 (428)(4) 2,954 ------- ------- ------- ------- Total other noncurrent liabilities............ 4,896 1,580 569 7,045 ------- ------- ------- ------- Minority Interest in Subsidiary Companies....... 406 38 -- 444 ------- ------- ------- ------- Temporary Equity............ 53 -- -- 53 ------- ------- ------- ------- Stockholders' Equity: Common stock.............. 818 157 (157)(3) 818 Additional paid-in capital.................. 891 114 433 (2) -- (4,892)(3) 3,454 (3) Retained earnings......... 13,242 3,417 (75)(1) 13,130 (3,454)(3) Unearned employee compensation--ESOP and other equity adjustments. -- (58) -- (58) Accumulated other comprehensive loss....... (300) (157) -- (457) Treasury stock, at cost... (6,957) (1,019) 42 (2) (2,885) 5,049 (3) ------- ------- ------- ------- Net stockholders' equity................. 7,694 2,454 400 10,548 ------- ------- ------- ------- Total Liabilities and Stockholders' Equity... $23,105 $ 7,465 $ 975 $31,545 ======= ======= ======= =======
6 The following page supersedes page 67 of the proxy statement/prospectus: UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME For the six months ended June 30, 1999 (in millions, except per share data)
The Dow Union Carbide Merger Combined Pro Chemical Corporation Pro Forma Forma Company (As Restated) Adjustments (As Restated) -------- ------------- ----------- ------------- Net Sales.................... $9,036 $2,820 -- $11,856 ------ ------ ----- ------- Cost of sales.............. 6,671 2,137 $ 187 (4) 8,995 Research and development expenses.................. 415 76 5 (4) 496 Selling, general and administrative expenses... 764 127 -- 891 Amortization of intangibles............... 54 -- 7 (4) 61 Depreciation and amortization.............. -- 199 (199)(4) -- Partnership income......... -- 2 (2)(4) -- Insurance and finance company operations, pretax income.................... 61 -- 10 (4) 71 Equity in earnings (losses) of nonconsolidated affiliates................ 47 (50) 2 (4) (1) Sundry income--net......... 157 41 (16)(4) 182 ------ ------ ----- ------- Earnings Before Interest, Income Taxes and Minority Interests................... 1,397 274 (6) 1,665 ------ ------ ----- ------- Interest income............ 52 -- 6 (4) 58 Interest expense and amortization of debt discount.................. 241 66 -- 307 ------ ------ ----- ------- Income Before Income Taxes and Minority Interests...... 1,208 208 -- 1,416 ------ ------ ----- ------- Provision for income taxes. 431 66 -- 497 Minority interests' share in income................. 35 2 -- 37 Preferred stock dividends.. 3 -- -- 3 ------ ------ ----- ------- Earnings before cumulative effect of change in accounting principle........ 739 140 -- 879 ------ ------ ----- ------- Cumulative effect of change in accounting principle... -- (20) -- (20) ------ ------ ----- ------- Net Income Available for Common Stockholders......... $ 739 $ 120 -- $ 859 ====== ====== ===== ======= Share Data: Earnings before cumulative effect of change in accounting principle per common share--basic....... $ 3.35 $ 1.05 (5) $ 2.97 Earnings per common share-- basic..................... 3.35 0.90 (5) 2.91 Earnings before cumulative effect of change in accounting principle per common share--diluted..... 3.30 1.02 (5) 2.93 Earnings per common share-- diluted................... 3.30 0.88 (5) 2.86 Weighted average common shares outstanding--basic. 220.4 133.0 (5) 295.6 Weighted average common shares outstanding-- diluted................... 224.4 136.1 (5) 301.3
7 ANNEX I [LETTERHEAD OF CREDIT SUISSE FIRST BOSTON CORPORATION] October 24, 1999 Board of Directors Union Carbide Corporation 39 Old Ridgebury Road Danbury, Connecticut 06817-0001 Members of the Board: Reference is made to our written opinion to the Board of Directors dated August 3, 1999 (the "Opinion") in connection with the merger (the "Merger") contemplated by the Agreement and Plan of Merger, dated as of August 3, 1999, among Union Carbide Corporation ("Union Carbide"), The Dow Chemical Company ("Dow Chemical") and Transition Sub Inc., a wholly owned subsidiary of Dow Chemical. We have been advised by Union Carbide of the restatement of net earnings (the "Restatement") as described in the proxy statement/prospectus supplement to be dated October 25, 1999 of Union Carbide and Dow Chemical relating to the Merger (the "Proxy Statement/Prospectus Supplement"). Based upon the information in the Proxy Statement/Prospectus Supplement relating to the Restatement and without undertaking any responsibility to update the Opinion or to review or take into account any changes since the date of the Opinion in events, circumstances or projections or other matters we may have considered in connection with issuing the Opinion, we confirm that, had the Restatement been included in the information we reviewed in connection with issuing the Opinion, such Restatement would not have resulted in any change to the conclusion reached in the Opinion that, as of the date of the Opinion, the Exchange Ratio (as defined in the Opinion) was fair to the holders of Union Carbide common stock from a financial point of view. This letter is being provided to the Board of Directors in light of, and solely with respect to, the specific matters relating to the Restatement referred to above and does not constitute a "bring-down" of the Opinion. This letter is subject to the same qualifications, limitations and assumptions as are set forth in the Opinion. We hereby consent to the inclusion of this letter as Annex I to, and the reference thereto in, the Proxy Statement/Prospectus Supplement. Very truly yours, /s/ Credit Suisse First Boston Corporation - ------------------------------------------ CREDIT SUISSE FIRST BOSTON CORPORATION -----END PRIVACY-ENHANCED MESSAGE-----