-----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, VZUOyZynINzegFiUWRiXnqeaHLLJkplJfQ4rERAuWppsdXtOE6PEzs8dNVPAHaMQ 5P45H6mtmPCwROBeIBatDQ== 0000898822-02-001066.txt : 20020827 0000898822-02-001066.hdr.sgml : 20020827 20020827171843 ACCESSION NUMBER: 0000898822-02-001066 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20020827 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PURE RESOURCES INC CENTRAL INDEX KEY: 0001109860 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 742952918 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-59083 FILM NUMBER: 02749970 BUSINESS ADDRESS: STREET 1: 500 WEST ILLINOIS CITY: MIDLAND STATE: TX ZIP: 79701 BUSINESS PHONE: 915-498-8600 MAIL ADDRESS: STREET 1: 500 WEST ILLINOIS CITY: MIDLAND STATE: TX ZIP: 79701 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: UNOCAL CORP CENTRAL INDEX KEY: 0000716039 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 953825062 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107267600 MAIL ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 SC 13D/A 1 aug2713da.txt SCHEDULE 13D/A ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2) Pure Resources, Inc. - -------------------------------------------------------------------------------- (NAME OF ISSUER) Common Stock, Par Value $.01 Per Share - -------------------------------------------------------------------------------- (TITLE OF CLASS OF SECURITIES) 74622E 10 2 - -------------------------------------------------------------------------------- (CUSIP NUMBER) Barry A. L. Hoffman, Esq. Deputy General Counsel Unocal Corporation 2141 Rosecrans Avenue, Suite 4000 El Segundo, California 90245 (310) 726-7600 - -------------------------------------------------------------------------------- (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) August 21, 2002 - -------------------------------------------------------------------------------- (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 that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_]. 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. 74622E 10 2 Page 2 of 7 Pages - ----------------------------- ----------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Unocal Corporation 95-3825062 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS AF - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER -0- SHARES ------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 35,890,333 (*) EACH ------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER REPORTING 32,709,067 PERSON WITH ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 35,890,333 (*) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 71.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON REPORTING CO - -------------------------------------------------------------------------------- - ------------------ (*) Includes 32,709,067 shares directly owned by Union Oil Company of California, and 3,181,266 shares beneficially owned by Jack D. Hightower, with respect to which the reporting persons may be deemed to share voting control by virtue of the Voting Agreement (as described on the Schedule 13D). SCHEDULE 13D - ----------------------------- ----------------------------- CUSIP NO. 74622E 10 2 Page 3 of 7 - ----------------------------- ----------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Union Oil Company of California 95-1315450 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (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 California - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER -0- SHARES ------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 35,890,333 (**) EACH ------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER REPORTING 32,709,067 PERSON WITH ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 35,890,333 (**) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 71.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON REPORTING CO - -------------------------------------------------------------------------------- - ------------------- (**) Includes 32,709,067 shares directly owned by Union Oil Company of California, and 3,181,266 shares beneficially owned by Jack D. Hightower, with respect to which the reporting persons may be deemed to share voting control by virtue of the Voting Agreement (as described on the Schedule 13D). Item 1. Security and Issuer. ------------------- This Amendment No. 2 (this "Amendment") amends and supplements the joint Statement on Schedule 13D, as amended (the "Schedule 13D") of Unocal Corporation, a Delaware corporation ("Unocal") and Union Oil Company of California ("Union Oil", together with Unocal, the "Reporting Persons"), a California corporation and wholly owned subsidiary of Unocal, filed on May 5, 2000 and relating to the common stock, par value of $.01 per share (the "Pure Common Stock"), of Pure Resources, Inc., a Delaware corporation ("Pure"). Pure's principal executive offices are located at 500 West Texas, Suite 200, Midland, Texas 79701. Capitalized terms used herein and not defined have the meanings ascribed to them in the Schedule 13D previously filed by the Reporting Persons. Item 4. Purpose of Transaction. ---------------------- The information contained in Item 4 of the Schedule 13D is hereby incorporated herein by reference. On or about August 21, 2001, individual stockholders of Pure filed complaints in the Delaware Court of Chancery purporting to commence class action lawsuits on behalf of the public stockholders of Pure against the Reporting Persons, Pure and each of the individual directors of Pure. The complaints were styled as Cersente v. Pure Resources, Inc., et al (C.A. No. 19854), Brown v. Pure Resources, Inc., et al (C.A. No. 19855), Summit Trading Group, LLC v. Hightower, et al (C.A. No. 19856), Metera v. Pure Resources, Inc., et al (C.A. No. 19857) and Bistritzky v. Hightower, et al (C.A. No. 19859). The complaints are attached hereto as exhibits, are incorporated herein by reference and any description provided herein is qualified in its entirety by reference to the actual complaints. In general, the complaints allege, among other things: (1) breaches of fiduciary duty by the Reporting Persons, Pure and the members of Pure's board in connection with the offer and the subsequent merger; (2) that the consideration offered is inadequate; and (3) that the Reporting Persons are acting to further their respective interests at the expense of the holders of Pure's common stock. Among other remedies, the complaints seek to enjoin the offer and subsequent merger or, alternatively, damages in an unspecified amount and rescission in the event the offer and merger occur. The Reporting Persons view the complaints as being without merit. Item 7. Materials to be Filed as Exhibits. --------------------------------- Exhibit No. Description ---------- ----------- 99.1 Cersente v. Pure Resources, Inc., et al (C.A. No. 19854) 99.2 Brown v. Pure Resources, Inc., et al (C.A. No. 19855) 99.3 Summit Trading Group, LLC v. Hightower, et al (C.A. No. 19856) 4 of 7 Pages 99.4 Metera v. Pure Resources, Inc., et al (C.A. No. 19857) 99.5 Bistritzky v. Hightower, et al (C.A. No. 19859) 5 of 7 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 27, 2002 UNOCAL CORPORATION By: /s/ Douglas M. Miller -------------------------------------------- Name: Douglas M. Miller Title: Vice President, Corporate Development UNION OIL COMPANY OF CALIFORNIA By: /s/ Douglas M. Miller -------------------------------------------- Name: Douglas M. Miller Title: Vice President, Corporate Development 6 of 7 Pages Index to Exhibits ------------------ Exhibit No. Description ---------- ----------- 99.1 Cersente v. Pure Resources, Inc., et al (C.A. No. 19854) 99.2 Brown v. Pure Resources, Inc., et al (C.A. No. 19855) 99.3 Summit Trading Group, LLC v. Hightower, et al (C.A. No. 19856) 99.4 Metera v. Pure Resources, Inc., et al (C.A. No. 19857) 99.5 Bistritzky v. Hightower, et al (C.A. No. 19859) - -------- EX-99 3 aug2613da991.txt EXHIBIT 99.1 IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - ------------------------------------------x : MARY CRESCENTE, : : Civil Action 19854 Plaintiff, : : -against- : : PURE RESOURCES, INC., JACK D. : HIGHTOWER, GEORGE G. STALEY, : HERBERT C. WILLIAMSON, III, : TIMOTHY H. LING, DARRELL D. CHESSUM, : KEITH A COVINGTON, GRAYDON H. : LAUGHBAUM, H.D. MAXWELL and : UNOCAL CORPORATION : : Defendants. : : - ------------------------------------------x CLASS ACTION COMPLAINT ---------------------- Plaintiff, by her attorneys, for her complaint against defendants, alleges upon personal knowledge with respect to paragraph 2, and upon information and belief as to all other allegations herein, as follows: NATURE OF THE ACTION -------------------- 1. This is a stockholders' class action on behalf of the public stockholders of Pure Resources, Inc. ("Pure" or the "Company") to enjoin the proposed acquisition of the publicly owned shares of Pure's common stock by its controlling shareholder, defendant Unocal Corporation ("Unocal"). THE PARTIES ----------- 2. Plaintiff has been the owner of the common stock of the Company since prior to the transaction herein complained of and continuously to date. 3. Pure is a corporation duly organized and existing under the law of the State of Delaware. 4. Unocal is a corporation duly organized and existing under the laws of Delaware. Unocal owns approximately 65% of the Company's outstanding common stock. 5. Defendant Jack D. Hightower is Chief Executive Officer, President and Chairman of the Board of Pure. 6. Defendant George G. Staley is Executive Vice President and a director of the Company. 7. Defendant Timothy H. Ling is a director of the Company. He is also President and COO of Unocal. 8. Defendant Darrell D. Chessum is a director of the Company. He is also Treasurer of Unocal. 9. Defendant Graydon H. Laughbaum is a director of the Company. He is also Advisor of Unocal. 10. Defendants Herbert C. Williamson, III, Keith A. Covington, and H.D. Maxwell are directors of the Company. 11. The defendants named in paragraphs 5 through 10 (the "Individual Defendants") are in a fiduciary relationship with plaintiff and the other public stockholders of Pure and owe them the highest obligations of good faith and fair dealing. 12. Defendant Unocal, through its approximately 65% ownership of Pure and having persons affiliated with on Pure's board, has effective and working control of Pure. As such, defendant Unocal is in a fiduciary relationship with plaintiff and the other public stockholders of Pure and owes them the highest obligations of good faith and fair dealing. -2- CLASS ACTION ALLEGATIONS ------------------------ 13. Plaintiff brings this action individually and as a class action pursuant to Court of Chancery Rule 23, on behalf of all Pure stockholders (except defendants herein and any person, firm, trust, corporation or other entity related to or affiliated with any of the defendants) and their successors in interest, who are or will be threatened with injury arising from defendants' actions as more fully described herein. 14. This action is properly maintainable as a class action. 15. The class of stockholders for whose benefit this action is brought is so numerous that joinder of all Class members is impracticable. 16. There are questions of law and fact which are common to the Class including, inter alia, the following: ----- ---- (a) whether the Individual Defendants have breached their fiduciary and other common law duties owed by them to plaintiff and the members of the Class; (b)whether plaintiff and the other members of the Class will be damaged irreparably by defendants' failure to take action designed to obtain the best value for the public shareholders' interest in Pure. 17. Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. The claims of plaintiff are typical of the claims of the other members of the Class and plaintiff has the same interests as the other members of the Class. Accordingly, plaintiff will fairly and adequately represent the Class. 18. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class and establish incompatible standards of conduct for the party opposing the Class. -3- 19. Defendants have noted and are about to act on grounds generally applicable to the Class, thereby making appropriate final injunctive relief with respect to the Class as a whole. SUBSTANTIVE ALLEGATIONS ----------------------- 20. On August 20, it was announced that Unocal offered, through its subsidiary Union Oil Company of California, to acquire all of the outstanding shares of Pure, it does not already own, for .6527 shares of Unocal common stock for each Pure share owned by the public shareholders. 21. The consideration to be paid to Class members in the transaction is unfair and inadequate because, among other things, the intrinsic value of Pure's common stock is materially in excess of the amount offered for those securities in the proposed acquisition given the stock's current trading price and the Company's prospects for future growth and earnings. 22. Unocal has timed its offer to take advantage of the decline in the market price of Pure's stock. The offer has the effect of capping the market for Pure's stock to facilitate Unocal's plan to obtain the public interest in Pure as cheaply as possible. 23. Under the circumstances, the Individual Defendants are obligated to explore all alternatives to maximize shareholder value. 24. The defendants have breached their duty of loyalty to Pure stockholders by using their control of Pure to force plaintiff and the Class to sell their equity interest in Pure at an unfair price, and deprive Pure's public shareholders of maximum value to which they are entitled. The Individual Defendants have also breached their duties of loyalty and due care by not taking adequate measures to ensure that the interests of Pure's public shareholders are properly protected from overreaching. Unocal has breached its fiduciary duties, which arise -4- from its effective control of Pure, by using such effective control for its own benefit and at the expense of the Class. 25. The terms of the transaction are grossly unfair to the Class, and the unfairness is compounded by the gross disparity between the knowledge and information possessed by defendants by virtue of their positions of control of Pure and that possessed by Pure's public shareholders. Defendants' scheme and intent is to take advantage of this disparity and to induce the Class to relinquish their shares in the acquisition at an unfair price on the basis of incomplete or inadequate information. 26. Absent injunctive relief, defendants will breach their fiduciary duties owed to plaintiff and the other members of the Class, all to the irreparable harm of the Class. 27. Plaintiff has no adequate remedy at law. WHEREFORE, plaintiff demands judgment as follows: A. declaring this to be a proper class action; B. enjoining, preliminarily and permanently, the acquisition under the terms presently proposed; C. to the extent, if any, that the transaction complained of is consummated prior to the entry of this Court's final judgment, rescinding the same or awarding rescissory damages to the Class; D. directing that defendants account to plaintiff and the Class for all damages caused to them and account for all profits and any special benefits obtained by defendants as a result of their unlawful conduct; E. awarding to plaintiff the costs and disbursements of this action, including a reasonable allowance for the fees and expenses of plaintiff's attorneys and experts; and -5- F. granting such other and further relief as the Court deems appropriate. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By:/s/ Carmella P. Keener --------------------------- 919 North Market Street, Suite 1401 P.O. Box 1070 Wilmington, Delaware 19899 (302) 656-4433 Attorneys for Plaintiff OF COUNSEL; FARUQI & FARUQI, LLP 320 East 39th Street New York, New York 10016 (212) 983-9330 -6- EX-99 4 aug2613da992.txt EXHIBIT 99.2 IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - ------------------------------------------x : CARL BROWN, : : Plaintiff, : : C.A. NO. 19855 v. : : PURE RESOURCES, INC., UNOCAL : CORPORATION, UNION OIL COMPANY OF : CALIFORNIA, JACK D. HIGHTOWER, : GEORGE G. STALEY, DARRELL D. : CHESSUM, KEITH A. COVINGTON, : GRAYDON H. LAUGHBAUM, JR., : TIMOTHY H. LING, H.D. MAXWELL, and : HERBERT C. WILLIAMSON, : : Defendants. : : - ------------------------------------------x CLASS ACTION COMPLAINT ---------------------- Plaintiff, by and through his attorneys, alleges upon information and belief, except as to paragraph 1 which is alleged upon personal knowledge, as follows: THE PARTIES ----------- 1. Plaintiff Carl Brown ("plaintiff") is the owner of common stock of Pure Resources, Inc. ("Pure" or the "Company") and has been the owner of such shares continuously since prior to the wrongs complained of herein. 2. Pure is a corporation duly existing and organized under the laws of the State of Delaware, with its principal executive offices located at 901 Marguette Avenue, Midland, Texas. Pure is an independent energy company engaged in the exploitation, development, exploration and acquisition of oil and gas properties. Pure common stock trades on the New York Stock Exchange under the symbol "PRS." 3. Defendant Unocal Corporation ("Unocal") is a Delaware corporation with its principal executive offices located in El Segundo, California. Unocal purports to be one of the world's leading independent natural gas and crude oil exploration and production companies. Through its wholly owned subsidiary, Union Oil Company of California ("Union"), Unocal owns approximately 65% of the Company's common stock. By virtue of its controlling stake in Pure, Unocal is in a fiduciary relationship with plaintiff and the other public stockholders of Pure, and owes plaintiff and the other members of the class the highest obligations of good faith, fair dealing, due care, loyalty and full, candid and adequate disclosure. 4. Defendant Jack D. Hightower ("Hightower") is and at all relevant times has been Chairman of the Board, Chief Executive Officer, and President of Pure. 5. Defendant George G. Staley ("Staley") is and at all relevant times has been Executive Vice President, Exploration and a director of Pure. 6. Defendant Darrell D. Chessum ("Chessum") is and at all relevant times has been a director of Pure. Chessum also serves as Treasurer of Unocal. 7. Defendant Keith A. Covington ("Covington") is and at all relevant times has been a director of Pure. 8. Defendant Graydon H. Laughbaum, Jr. ("Laughbaum") is and at all relevant times has been a director of Pure. Laughbaum also currently serves as an advisor to Unocal and formerly served as an officer of Unocal. 9. Defendant Timothy H. Ling ("Ling") is and at all relevant times has been a director of Pure. Ling also serves as President, Chief Operating Officer and a director of Unocal. -2- 10. Defendant H.D. Maxwell ("Maxwell") is and at all relevant times has been a director of Pure. Maxwell formerly held several management positions with Unocal and Union. 11. Defendant Herbert C. Williamson, III ("Williamson") is and at all relevant times has been a director of Pure. 12. The defendants referred to in paragraphs 4 through 11 are collectively referred to herein as the "Individual Defendants." 13. By reason of the above individual Defendants' positions with the Company as officers and/or directors, said individuals are in a fiduciary relationship with plaintiff and the other public stockholders of Pure, and owe plaintiff and the other members of the class the highest obligations of good faith, fair dealing, due care, loyalty and full and candid disclosure. CLASS ACTION ALLEGATIONS ------------------------ 14. Plaintiff brings this action individually and as a class action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all shareholders of Pure common stock, or their successors in interest, who are being and will be harmed by defendants' conduct described herein (the "Class"). Excluded from the Class are defendants herein and any person, firm, trust, corporation or other entity related to or affiliated with any of the defendants. 15. This action is properly maintainable as a class action. 16. The Class is so numerous that joinder of all members is impracticable. As of August 19, 2002, there were approximately 50.4 million shares of Pure common stock in the public float, owned by hundreds if not thousands of public shareholders. 17. There are questions of law and fact which are common to the Class including, inter alia, the following: ----- ---- -3- (a) whether defendants have improperly engaged in a course of conduct designed to benefit themselves at the expense of Pure's public stockholders; and (b) whether plaintiff and the other members of the Class would be irreparably damaged were the transactions complained of herein consummated. 18. Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. Plaintiff's claims are typical of the claims of the other members of the Class and plaintiff has the same interests as the other members of the Class. Accordingly, plaintiff is an adequate representative of the Class and will fairly and adequately protect the interests of the Class. 19. The prosecution of separate actions by individual Class members would create the risk of inconsistent or varying adjudications with respect to the individual members of the Class which would establish incompatible standards of conduct for defendants, or adjudications with respect to individual members of the Class which would, as a practical matter, be dispositive of the interests of the other members not parties to the adjudications or substantially impair their ability to protect their interests. 20. Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole. SUBSTANTIVE ALLEGATIONS ----------------------- 21. On August 20, 2002, Unocal announced that its board of directors has approved plans for its subsidiary, Union, to make an offer to the stockholders of Pure to acquire all of the outstanding common stock of Pure that Unocal does not already own. Pure stockholders will be offered 0.6527 shares of Unocal common stock, in exchange for each -4- outstanding share of Pure's common stock they own. Based upon Unocal's closing price of $34.09 per share on August 20, 2002, the proposed exchange offer values Pure common stock at only $22.25 per share. 22. Unocal has timed the proposal to freeze out Pure shareholders in order to capture for itself the Company's future potential without paying an adequate or fair price to the Company's public shareholders. Pure common stock has recently traded in excess of the proposed consideration. As recently as May, 2002, Pure common stock traded as high as $23.60 per share. 23. Unocal has timed the announcement of the proposed buyout to place an artificial lid on the market price of Pure stock so that the market would not reflect Pure's improving potential, thereby purporting to justify an unreasonably low price. 24. Unocal has access to internal financial information about Pure, its true value, expected increase in true value, and the benefits of 100% ownership of Pure to which plaintiff and the Class members are not privy. Unocal is using such inside information to benefit itself in this proposed transaction, to the detriment of the Pure's public stockholders. 25. Unocal has clear and material conflicts of interest and is acting to better its own interests at the expense of Pure's public shareholders. Unocal has voting control of the Company and controls its proxy machinery. Unocal has selected and controls all of the Company's directors, who are beholden to Unocal for their offices and the valuable perquisites which they enjoy therefrom. Five of the Company's nine directors also are employed by Unocal. 26. Unocal is engaging in self-dealing and not acting in good faith toward plaintiff and the other members of the Class. By reason of the foregoing, Unocal and the -5- individual Defendants have breached and are breaching their fiduciary duties to the members of the Class. 27. Unless the proposed exchange offer is enjoined by the Court, defendants will continue to breach their fiduciary duties owed to plaintiff and the members of the Class to the irreparable harm of the members of the Class. 28. Plaintiff and the Class have no adequate remedy at law. WHEREFORE, plaintiff prays for judgment and relief as follows: A. Ordering that this action may be maintained as a class action and certifying plaintiff as the Class representative; B. Preliminarily and permanently enjoining defendants and all persons acting in concert with them, from proceeding with, consummating or closing the proposed transaction; C. In the event the proposed exchange offer is consummated, rescinding it and setting it aside or awarding rescissory damages to the Class; D. Directing defendants to account to Class members for their damages sustained as a result of the wrongs complained of herein; E. Awarding plaintiff the costs of this action, including reasonable allowance for plaintiff's attorneys' and experts' fees; -6- F. Granting such other and further relief as this Court may deem just and proper. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By: /s/ Carmella P. Keener --------------------------------- 919 N. Market Street, Suite 1401 P.O. Box 1070 Wilmington, DE 19899 (302) 656-4433 OF COUNSEL: SCHIFFRIN & BARROWAY, LLP Marc A. Topaz Patricia C. Weiser Three Bala Plaza East Suite 400 Bala Cynwyd, PA 19004 (610) 667-7706 -7- EX-99 5 aug2613da993.txt EXHIBIT 99.3 IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - ------------------------------------------x : SUMMIT TRADING GROUP, LLC on : behalf of itself and all other similarly : C.A. No. 19856 situated, : Plaintiff, : CLASS ACTION COMPLAINT : ---------------------- : -against- : : JACK D. HIGHTOWER, GEORGE G. : STALEY, HERBERT C. WILLIAMSON III, : TIMOTHY H. LING, DARRELL D. : CHESSUM, KEITH A COVINGTON, : GRAYDON H. LAUGHBAUM, H.D. : MAXWELL, UNOCAL CORPORATION, : UNION OIL COMPANY OF CALIFORNIA, : and PURE RESOURCES, INC. : : Defendants. : - ------------------------------------------x Plaintiff, by and through its attorneys, alleges the following upon information and belief, except as to paragraph 1 which is alleged upon personal knowledge: INTRODUCTION ------------ 1. This action arises out of an unlawful scheme and plan by Unocal Corporation ("Unocal"), which, through its subsidiary, Union Oil Company of California ("Union Oil"), owns or controls 65% of Pure Resources, Inc. ("Pure Resources" or the "Company"), to acquire the remaining ownership of the Company for grossly inadequate consideration and in breach of defendants' fiduciary duties. THE PARTIES ----------- 2. Plaintiff is and has been at all relevant times the owner of shares of the common stock of Pure Resources. 3. Defendant Jack D. Hightower is and has been at all relevant times Chairman of the Board of Directors of Pure Resources as well as President and Chief Executive Officer of the Company. 4. Defendant George G. Staley is and has been at all relevant times a director of Pure Resources and Executive Vice President of the Company. 5. Defendant Timothy H. Ling is President and Chief Operating Officer of Unocal a Director of the Company. 6. Defendant Darrell D. Chessum is a director of the Company and Treasurer of Unocal. 7. Defendant Graydon H. Laughbaum is a Director of the Company and serves as an Advisor to Unocal. 8. Defendants Herbert C. Williamson, III, Keith A. Covington, and H.D. Maxwell are and have been at all relevant times directors of Pure Resources. 9. The Individual Defendants described in paragraphs 3-8 above are hereinafter collectively referred to as the "Individual Defendants." 10. By virtue of their positions as directors and/or officers of Pure Resources, the Individual Defendants are in a fiduciary relationship with plaintiff and other public stockholders of the Company, and owe plaintiff and other members of the Class (defined below) the highest obligations of good faith, candor, loyalty and fair dealing. 11. Pure Resources is a Delaware corporation with its principal executive offices located at 500 West Illinois Street, Midland, TX. 12. Unocal is an oil and gas exploration and production company with operations in Asia and the United States, Gulf of Mexico, with interest in Canada. -2- 13. Defendant Union Oil explores, produces, transports and sells crude oil and natural gas in the United States and abroad. CLASS ACTION ALLEGATIONS ------------------------ 14. Plaintiff brings this action individually and as a class action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all public stockholders of Pure Resources, and their successors in interest, who are or will be threatened with injury arising from defendants' actions as more fully described herein (the "Class"). Excluded from the Class are defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any of the defendants. 15. This action is property maintainable as a class action. (a) The Class is so numerous that joinder of all members is impracticable. As of August 2, 2002, there were 50,353,000 shares of Pure Resources common stock outstanding, held by a substantial number of stockholders of record. Members of the Class are scattered through the United States; (b) There are questions of law and fact which are common to the Class, including inter alia, the following: ----- ---- (i) Whether Defendants have breached their fiduciary duties owed to plaintiff and the Class; and (ii) Whether plaintiff and the Class will be harmed irreparably by defendants wrongful conduct as alleged herein, absent injunctive relief from the Court; (c) Plaintiff is committed to the prosecution of this action and has retained competent counsel experienced in litigation of this nature. Plaintiff's claims are typical of the claims of other members of the Class and plaintiff has the same interests as the other members of -3- the Class. Accordingly, plaintiff is an adequate representative of the Class and will fairly and adequately protect the interests of the Class. 16. The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for defendants, or adjudications with respect to individual members of the Class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests. 17. Defendants have acted, or refused to act, on grounds generally applicable to, and causing injury to, the Class and, therefore, preliminary and final injunctive relief on behalf of the Class as a whole is appropriate. SUBSTANTIVE ALLEGATIONS ----------------------- 18. Pure Resources is an exploration and production company that develops and produces oil and natural gas in the United States. 19. On or about August 20, 2002, Unocal announced that its board of directors had approved plans for its subsidiary, Union Oil, to acquire the approximately 35% of shares of the Company that are publicly traded for 0.6527 shares of Unocal common stock, or approximately $22.50 per share (the "Offer"). 20. Unocal's Offer is grossly inadequate in light of the Company's recent trading history. As recently as May 1, 2002, Pure Resources' shares traded as high as $23.60 per share. 21. Moreover, the exchange ratio with an imputed value of $22.25 per share of Pure does not adequately value the Company in light of its recent, outstanding financial performance as announced on August 6, 2002, when the Company reported its Second Quarter 2002 results. -4- 22. In addition, the amount of the Offer is grossly inadequate in view of the Company's present results of operations, its financial condition, and the current price of oil in the public market. 23. Because Unocal through Union Oil now controls approximately 65% of the Company's common shares, it can, as a practical matter, effectively force the Company to accept its grossly inadequate offer even in the face of opposition by a majority of the Company's public stockholders. Thus, a fully informed vote of the majority of the minority stockholders is crucial to shareholder democracy. 24. The Individual Defendants' fiduciary obligations require them to: (a) undertake an appropriate evaluation of any bona fide offers, and take appropriate steps to solicit all potential bids for the Company or its assets, consider strategic alternatives and otherwise maximize shareholder value; (b) take appropriate steps to have any offer for the company reviewed independently, including appointing a truly disinterested committee and requiring a vote of a majority of the minority stockholders so that the interests of Pure Resources' public stockholders are protected; and (c) adequately ensure that no conflicts of interest exist between defendants' own interests and their fiduciary obligations to the public stockholders of the Company. 25. By virtue of the acts and conduct alleged herein, Unocal, Union Oil and the Individual Defendants are breaching their fiduciary duties by caring out a preconceived plan to protect and advance their own parochial interests at the expense of the Company's public shareholders by seeking to acquire Class members' shares for grossly inadequate consideration and in a procedurally unfair manner. -5- 26. Unless enjoined by this Court, defendants will breach their fiduciary duties owed to plaintiff and the other members of the Class and will benefit themselves in their corporate offices, all to the irreparable harm of the Class, as aforesaid. 27. Plaintiff and the other members of the Class have no adequate remedy at law. WHEREFORE, plaintiff demands judgment as follows: A. declaring this to be a proper class action and certifying plaintiff as the Class representative; B. enjoining preliminarily and permanently the consummation of the proposed transaction or, alternatively, in the event that the proposed transaction is consummated, rescinding it and setting it aside or awarding rescissory damages; C. ordering defendants, jointly and severally, to account to plaintiff and the other members of the Class for all damages suffered and to be suffered by them as a result of defendants' wrongful conduct as alleged herein; D. awarding plaintiff the costs and disbursements of the action, including a reasonable allowance for plaintiff's attorney's fees and experts' fees; and E. granting such other and further relief as this Court may deem to be just and proper. ROSENTHAL MONHAIT GROSS & GODDESS, P.A. By:/s/ Carmella P. Keener --------------------------- 919 N. Market Street, Suite 1401 Wilmington, Delaware 19801 (302) 656-4433 Attorneys for Plaintiff OF COUNSEL: -6- ENTWISTLE & CAPPUCCI LLP 299 Park Avenue New York, New York 10171 (212) 894-7200 -7- EX-99 6 aug2613da994.txt EXHIBIT 99.4 IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - ------------------------------------------x : JOHN METERA, individually and on behalf of: all Others similarly situated, : : C.A. No. 19857 Plaintiff, : : -against- : CLASS ACTION COMPLAINT : PURE RESOURCES, INC., UNION OIL : COMPANY OF CALIFORNIA, JACK D. : HIGHTOWER, GEORGE G. STALEY, : DARRELL D. CHESSUM, KEITH A. : COVINGTON, GRAYDON H. LAUGHBAUM, : JR., TIMOTHY H. LING, H.D. MAXWELL, and : HERBERT C. WILLIAMSON, III : : Defendants. : - ------------------------------------------x INTRODUCTION ------------ Plaintiff alleges on information and belief, except for those allegations which pertain to plaintiff which are alleged upon personal knowledge, as follows: 1. This action arises out of an unlawful scheme and plan by Unocal, who is the majority shareholders of the Pure Resources, Inc. ("Pure Resources" or the "Company") to acquire the remaining ownership of Pure Resources that they do not already own in a stock-for-stock transaction for grossly inadequate consideration and without adequate procedural protections customarily afforded public shareholders under such circumstances. Plaintiff alleges that, in connection with the Proposed Transaction, the defendants have engaged and are continuing to engage in acts of self-dealing, unfair dealing, gross overreaching and breaches of their fiduciary duties, all in an effort to enable Unocal to acquire the remaining outstanding shares of the Company for as little value as possible. Plaintiff alleges that he and other public stockholders of Pure Resources are entitled to enjoin the Proposed Transaction, or alternatively, recover damages in the event the Proposed Transaction is consummated. THE PARTIES ----------- 2. Plaintiff is and has been at all relevant times the owner of Pure Resources common stock. 3. Pure Resources is a corporation organized and existing under the laws of the State of Delaware and is headquartered at 500 West Illinois, Midland, Texas 79701. 4. Pure Resources is an independent energy company engaged in the exploitation, development, exploration and acquisition of oil and gas properties located in the Permian Basin of West Texas and southeastern New Mexico, the San Juan Basin of New Mexico and Colorado, offshore in the Gulf of Mexico and the Gulf Coast region covering Texas, Louisiana, Arkansas, Mississippi, Alabama and Florida. As of April 1, 2002, the Company had issued and outstanding about 50,20,597 shares of common stock. 5. Unocal is an independent oil and gas exploration and production company, with principal operations in North America and Asia. Unocal, through its subsidiary, Union Oil Company of California ("Union Oil") directly owns 32,709,067 (62.5%) of Pure Resources common stock (over which Unocal Corporation and Union Oil Company of California have sold dispositive power). Unocal has approved plans for Union Oil to make an offer to the stockholders of Pure Resources to acquire all of the outstanding shares of common stock of Pure Resources that Unocal does not already own. 6. Defendant Union Oil Company of California ("Union Oil") is a subsidiary of Unocal. -2- 7. Pure Resources and Unocal have extensive corporate relations. Prior to May 25, 2000, the Company was a wholly-owned subsidiary of Union Oil. Subsequent to May 25, 2000, Pure Resources, Union Oil and Defendant Jack D. Hightower ("Hightower") entered into an Amended and Restated Stockholders Voting Agreement in which, pursuant to certain levels of stock ownership by Union Oil and Defendant Hightower, Union Oil and Defendant Hightower agreed to vote all of their respective shares of the Company's capital stock to cause two persons designated by Defendant Hightower, up to five persons designated by Union Oil, and one person agreed upon by Union Oil and Defendant Hightower to be elected to the Company's Board of Directors. 8. Defendant Hightower has served as President, Chief Executive Officer and Chairman of the Board of Directors of the Company since May 2000. Defendant Hightower owns 3,181,266 shares (6.2%) of the Company's common shares. 9. Defendant George G. Staley ("Staley") has served as Executive Vice President, Exploration and Director of the Company since May 2000. Staley was designated as a director of Hightower pursuant to the Voting Agreement described above. Defendant Staley owns 655,261 (1.3%) of the Company's common stock. 10. Defendant Darrell D. Chessum ("Chessum") has served as a director of the Company since its inception. Defendant Chessum has served as Treasurer of Unocal since 1990. 11. Defendant Keith A. Covington "(Covington") has served as a director of the Company since May 2000. 12. Defendant Graydon H. Laughbaum, Jr. ("Laughbaum") has served as a director of the Company since May 2000. Defendant Laughbaum has served as an advisor to -3- Unocal on global energy issues since July 1, 1999. From August 1, 1997 until January 1, 1999, Laughbaum was Senior Vice President of New Ventures for Unocal. 13. Defendant Timothy H. Ling ("Ling") has served as a director of the Company since its inception. Defendant Ling was named President and Chief Operating Officer of Unocal in January, 2001. 14. Defendant H.D. Maxwell ("Maxwell") has served as a director of the Company since May 2000. Prior to 1992, Maxwell served in several management positions with Unocal. 15. Defendant Herbert C. Williamson, III ("Williamson") has served as a director of the Company since May 2000. 16. Defendants Chessum, Laughbaum, Ling, Maxwell and Williamson were designated to the Company's Board of Directors by Defendant Union Oil. 17. Defendants Hightower, Staley, Chessum, Laughbaum, Ling, Maxwell, Covington and Williamson are sometimes collectively referred to in this complaint as the "Individual Defendants". 18. The individual Defendants named above, as officers and/or directors of the Company, and Defendants Union Oil and Unocal, as the majority stockholder of Pure Resources, owe the highest fiduciary duties of good faith, loyalty, fair dealing, due care, and candor to plaintiff and the other members of the Class (as defined below). CLASS ACTION ALLEGATIONS ------------------------ 19. Plaintiff brings this action pursuant to Rule 23 of the Rules of the Court of Chancery, individually and on behalf of all other stockholders of the Company (except the defendants herein and any persons, firm, trust, corporation, or other entity related to or affiliated -4- with them and their successors in interest), who are or will be threatened with injury arising from defendants' actions, as more fully described herein (the "Class"). 20. This action is properly maintainable as a class action for the following reasons: (a) The Class is so numerous that joinder of all members is impracticable. As of April 2, 2002, there were approximately 144 holders of record of Pure Resources common stock and likely many more beneficial owners. (b) There are questions of law and fact which are common to the Class, including, inter alia, the following: ----- ---- (i) Whether the Individual Defendants have engaged and are continuing to engage in a plan and scheme to benefit themselves at the expenses of the members of the Class; (ii) Whether the Individual Defendants have fulfilled, and are capable of fulfilling, their fiduciary duties to plaintiff and the other members of the Class, including their duties of entire fairness, fair dealing, loyalty, due care, and candor; (iii) Whether the Individual Defendants have disclosed all material facts in connection with the challenged transaction; and (iv) Whether plaintiff and the other members of the Class would be irreparably damaged if the Individual Defendants, are not enjoined form the conduct described herein. -5- 21. The claims of plaintiff are typical of the claims of the other members of the Class in that all members of the Class will be damaged alike by the wrongs complained of herein. 22. Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. Plaintiff is an adequate representative of the Class. 23. The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for defendants, or adjudications with respect to individual members of the Class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests. 24. Defendants have acted and will continue to act on grounds generally applicable to the Class, thereby making appropriate final injunctive or corresponding declaratory relief with respect to the Class as a whole. BACKGROUND AND SUBSTANTIVE ALLEGATIONS -------------------------------------- 25. On August 20, 2002 Unocal announced in a press release that its Board of Directors have approved plans for its subsidiary, Union Oil, to make an offer to acquire all of the outstanding shares of common stock of Pure Resources that Unocal does not already own (the "Offer"). Pure Resources stockholders would receive 0.6527 share of Unocal common stock for each share of Pure Resources Common Stock. 26. Unocal currently owns 62.5% of Pure Resources Common Stock. 27. The price of Pure Resources stock has traded as high as $23.95 in the last 52 weeks. -6- 28. The exchange ratio proposed in the Offer is particularly unfair in light of the Company's anticipated financial performance. On August 16, Pure Resources announced financial results for the second quarter 2002, which were negatively affected by lower commodity prices, higher exploration and abandonment expenses. 29. The Offer is wrongful, unfair and harmful to Class members and represents an attempt by Unocal to enrich itself, at the expense of and to the detriment of Class members. In seeking to consummate the Offer, Unocal has failed to offer a fair price or afford Class members adequate procedural safeguards, all in violation of their fiduciary obligations. 30. Unocal has breached its fiduciary duties by failing to offer a fair price to Class members for their Pure Resources shares. The proposed exchange ratio is not the result of arms-length negotiations, and is not based upon any independent valuation of the current or projected value of Pure Resources, but was fixed arbitrarily by Unocal as part of their unlawful plan and scheme to advance their self interests to the detriment of the Class. 31. Because Unocal controls a majority of the Company's common stock, no third party will likely bid for Pure Resources. Unocal thus will be able to proceed with the Offer without an auction or other type of market check to maximize value for the public shareholders. 32. Unocal is intent on paying the lowest possible price to Class members, even though Unocal is duty-bound to pay the highest fair price to the Company's public shareholders. Thus, Unocal has a clear and material conflict of interest in the Offer. 33. Because of its control over the Company and Pure Resources Board of Directors, Unocal is in a position to dictate the terms of the Offer. The directors are beholden to Unocal for their positions and the perquisites which the enjoy therefrom and cannot represent or protect the interests of the Company's public shareholders with impartiality and vigor. -7- 34. By reason of the foregoing acts, practices, and course of conduct by defendants, plaintiff and the other members of the Class have been and will be damaged because they will not receive their fair proportion of the value of Pure Resources' assets and business and will be prevented form obtaining fair consideration for their shares of Pure Resources' common stock. 35. The Offer has been timed and structured unfairly in that: (a) The Offer is designed and intended to eliminate members of the class as stockholders of the Company from continued equity participation in the Company for consideration which Unocal new or should know is unfair and inadequate; (b) Unocal has unique knowledge of the Company and has access to information denied or unavailable to the Class; and (c) Unocal has violated its duty of fair dealing by timing the transaction to place an artificial cap on the market price of Pure Resources stock. 36. Similarly, the Individual Defendants owe fiduciary duties to the Company's public shareholders, but because they are dominated, controlled and beholden to Pure Resources, they cannot not fairly discharge their duties. 37. Unocal and the Individual Defendants will continue to breach their fiduciary duties owed to plaintiff and the Class and will consummate the Offer to the irreparable harm of plaintiff and the Class. 38. Plaintiff and the other members of the Class have no adequate remedy at law. -8- WHEREFORE, plaintiff demands judgment as follows: A. Declaring this to be a proper class action and naming plaintiff as Class representative; B. Granting preliminary and permanent injunctive relief against the consummation of the Offer as described herein; C. In the event the Offer is consummated, rescinding the transaction or awarding rescissory damages; D. Ordering defendants to account to plaintiff and to other members of the Class for all damages suffered and to be suffered by them as the result of the acts and transactions alleged herein; E. Awarding plaintiff the costs and disbursements of the action including allowances for plaintiff's reasonable attorneys and experts fees; and F. Granting such other and further relief as may be just and proper. ROSENTHAL MONHAIT GROSS & GODDESS, P.A. By:/s/ Carmella P. Keener --------------------------- 919 N. Market Street, Suite 1401 P.O. Box 1070 Wilmington, Delaware 19801 Attorneys for Plaintiff OF COUNSEL: GOODKIND LABATON RUDOFF & SUCHAROW LLP 100 Park Avenue New York, New York 10017 (212) 907-0700 -9- EX-99 7 aug2613da995.txt EXHIBIT 99.5 IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - ------------------------------------------x : SCHLOMO BISTRITZKY, : : Civil Action 19859 Plaintiff, : : -against- : : JACK D. HIGHTOWER, GEORGE G. STALEY, : DARRELL D. CHESSUM, KEITH A : COVINGTON, GRAYDON H. : LAUGHBAUM, Jr., TIMOTHY H. LING, H.D. : MAXWELL, HERBERT C. WILLIAMSON, III, : PURE RESOURCES, INC., and UNOCAL : CORPORATION, : : Defendants. : : - ------------------------------------------x CLASS ACTION COMPLAINT ---------------------- Plaintiff alleges upon information and belief, except for paragraph 1 hereof, which is alleged upon knowledge, as follows: 1. Plaintiff has been the owner of shares of the common stock of Pure Resources Holding, Inc. ("Pure Resources" or the "Company") since prior to the wrongs herein complained of and continuously to date. 2. Pure Resources is a corporation duly organized and existing under the laws of the State of Delaware. The Company is an independent exploration and production company that develops and produces oil and natural gas in the Permian Basin, the San Juan Basin, the Gulf Cost and the Gulf of Mexico. The Company also owns and undivided interest under approximately 6 million gross fee mineral acres throughout the Southern Gulf Cost region of the U.S. Pure Resources was formed in May 2000 through the combination of Titan Exploration, Inc., and the Permian Basin business unit of Unocal Corporation. 3. Defendant Unocal Corporation ("Unocal") owns or controls approximately 65.2% of the outstanding common stock of the Company. Pursuant to a voting agreement between Unocal and defendant Jack D. Hightower, Unocal is entitled to elect five members of the Company's Board and Hightower is entitled to elect two members. The final designee to the Board is to be mutually agreed on by Unocal and Hightower. 4. Defendant Jack D. Hightower is President and Chief Operating Officer and a Director of the Company. 5. Defendant Darrell D. Chessum is Treasurer of Unocal and a Director of the Company designated by Unocal. 6. Defendant Graydon H. Laughbaum, Jr., is a former Executive Vice President of Unocal and a Director of the Company designated by Unocal. 7. Defendant Timothy H. Ling is President and Chief Operating Officer of Unocal and a Director of the Company designated by Unocal. 8. Defendant H.D. Maxwell is a former senior executive of Unocal and a Director of the Company designated by Unocal. 9. Defendant Herbert C. Williamson is a Director of the Company designated by Unocal. 10. Defendant George G. Staley is an Executive Vice President and a Director for the Company designated by Hightower. 11. Defendant Keith A. Covington is a director of the Company designated by Unocal and Hightower. -2- 12. Unocal, a controlling shareholder, and the director defendants stand in a fiduciary position relative to the Company's public shareholders and owe the public shareholders of Pure Resources the highest duties of good faith, fair dealing, due care, loyalty, and full and candid disclosure. CLASS ACTION ALLEGATIONS ------------------------ 13. Plaintiff brings this action as a class action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all security holders of the Company (except the defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any of the defendants) and their successors in interest, who are or will be threatened with injury arising from defendants' actions as more fully described herein. 14. This action is properly maintainable as a class action. 15. The class is so numerous that joinder of all members is impracticable. There are approximately 50.5 million shares of Pure Resources common stock outstanding owned by hundreds, if not thousands, of holders other than Unocal and its affiliates. 16. There are questions of law and fact which are common to the class including, inter alia, the following: (a) whether defendants have breached their fiduciary and other common law duties owned by them to plaintiff and the members of the class; (b) whether defendants are pursuing a scheme and course of business designated to eliminate the public securities holders of Pure Resources in violation of the laws of the State of Delaware in order to enrich Unocal at the expense and to the detriment of plaintiff and the other public stockholders who are members of the class; (c) whether the proposed transaction, hereinafter described, constitutes a breach of the duty of fair dealing with respect to the plaintiff and the other members of the class; and (d) whether the class is entitled to injunctive relief or damages as a result of the wrongful conduct committed by defendants. -3- 17. Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. The claims of the plaintiff are typical of the claims of other members of the class and plaintiff has the same interests as the other members of the class. Plaintiff will fairly and adequately represent the class. 18. Defendants have acted in a manner which affects plaintiff and all members of the class alike, thereby making appropriate injunctive relief and/or corresponding declaratory relief with respect to the class as a whole. 19. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class, which would establish incompatible standards of conduct of defendants, or adjudications with respect to individual members of the Class which would, as a practical matter, be dispositive of the interests of other members or substantially impair or impede their ability to protect their interests. SUBSTANTIVE ALLEGATIONS ----------------------- 20. On August 20, 2002, Unocal announced that it has offered to purchase all of the shares of common stock of the Company not held by Unocal and its affiliates. Under the proposed transaction the Company's public shareholders would receive 0.6527 shares of Unocal for each Pure Resources share. Based on the $34.09 closing price of Unocal's shares on Aug. 20, 2002, offer represents a value of approximately $22.25 per share of Pure Resources common stock. 21. The consideration of $22.65 per share to be paid to class members is unfair and inadequate consideration because, among other things: (a) the intrinsic value of the stock of Pure Resources is materially in excess of $22.65 per share, giving due consideration to the prospects of growth and profitability of Pure Resources in light of its business, earnings and -4- earnings power, present and future; (b) the $22.65 per share price offers an inadequate premium to the public stockholders of Pure Resources; and (c) the $22.65 per share price is not the result of arm's-length negotiations but was fixed arbitrarily by Unocal to "cap" the market price of Pure Resources stock, as part of a plan for Unocal to obtain complete ownership of Pure Resources, its assets and businesses at the lowest possible. 22. The proposed acquisitions is an attempt by Unocal to unfairly aggrandize Unocal at the expense of Pure Resources' public stockholders. The proposed acquisition will, for inadequate consideration, deny plaintiff and the other members of the class their right to share proportionately in the future success of Pure Resources and its valuable assets, while permitting Unocal to benefit wrongfully from the transactions. 23. Given Unocal's stock ownership and representation on Pure Resources' Board and in management, it is able to dominate and control the Board. Under the circumstances, the Board can not be expected to protect the Company's public shareholders in transactions which benefit Unocal at the expense of Pure Resources' public shareholders, as exemplified by the proposed transaction. 24. Because of Unocal's stock ownership and the offices held by Unocal personnel, no third party, as a practical matter, can attempt any competing bid for Pure Resources, as the success of any such bid would require the consent and cooperation of Unocal. 25. Plaintiff and the other members of the Class will suffer irreparable damage unless defendants are enjoined from breaching their fiduciary duties to Pure Resource's public shareholders in a proposed transaction which will benefit Unocal at the expense of the public shareholders of the Company. -5- 26. Plaintiff and the other members of the Class have no adequate remedy at law. WHEREFORE, plaintiff demands judgment against defendants, jointly and severally, as follows: (1) declaring this action to be a class action and certifying plaintiff as the Class representative; (2) enjoining, preliminarily and permanently, the transaction complained of herein; (3) to the extent, if any, that the transaction or transactions complained of are consummated prior to the entry of this Court's final judgment, rescinding such transaction or transactions, or granting the Class rescissory damages; (4) directing that defendants account to plaintiff and the other members of the Class for all damages caused to them and account for all profits and any special benefits obtained as a result of their unlawful conduct; (5) awarding plaintiff the costs and disbursements of this action, including a reasonable allowance for the fees and expenses of plaintiff's attorneys and experts; and -6- (6) Granting plaintiff and the other members of the Class such other and further relief as may be just and proper. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By:/s/ Illegible --------------------------- 919 North Market Street Suite 1401 Wilmington, Delaware 19801 (302) 656-4433 Attorneys for Plaintiff OF COUNSEL; BERNSTEIN LIEBHARD & LIFSHITZ, LLP 10 East 40th Street New York, New York 10016 (212) 779-1414 -7- -----END PRIVACY-ENHANCED MESSAGE-----