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EXHIBIT 2
GENERAL MEMORANDUM OF
UNDERSTANDING
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BETWEEN THE UNDERSIGNED:
1. ELECTRAFINA, a corporation under Belgian law with stated capital of BEF
13,692,135,813 and registered office in B-1000 XXXXXXXX, 00, avenue
Marnix, registered in the Commercial Register of Brussels under No.
3,902, represented by Xx. Xxxxxxx xx Xxxxxx and Xx. Xxxxxx Bellens,
duly authorized for the purpose of these presents, and any other
company of its group to which PETROFINA shares may be transferred in
the meantime and for which it acts as a guarantor (hereinafter referred
to as "ELECTRAFINA"),
2. FIBELPAR, a corporation under Belgian law with stated capital of BEF
22,968,750,000 and registered office in B-6280 LOVERVAL, 00, xxx xx xx
Xxxxxxx Xxxxx, registered in the Commercial Register of Charleroi under
No. 139,774, represented by Xx. Xxxxxx Xxxxx, duly authorized for the
purpose of these presents, and any other companies among its group to
which PETROFINA shares may be transferred in the meantime and for which
it acts as a guarantor (hereinafter referred to as "FIBELPAR"),
3. TRACTEBEL, a corporation under Belgian law with stated capital of BEF
30,204,546,074 and registered office in B-1000 BRUSSELS, 0, Xxxxx xx
Xxxxx, registered in the Commercial Register of Brussels under No.
38,296, represented by Xx. Xxxxxxxx Xxxxxx and Xx. Xxxxxxx Xxxxxxx,
duly authorized for the purpose of these presents, and any other
companies among its group to which PETROFINA shares may be transferred
in the meantime and for which it acts as a guarantor (hereinafter
referred to as "TRACTEBEL"),
4. ELECTRABEL, a corporation under Belgian law with stated capital of BEF
82,970,232,342 and registered office in B-1000 BRUSSELS, 0, Xxxxxxxxx
xx Xxxxxx, registered in the Commercial Register of Brussels under No.
267,922, represented by Xx. Xxxx-Xxxxxx Xxxxxx and Xx. Xxxxxxxx xxx
Xxxxx, duly authorized for the purpose of these presents, and any other
companies among its group to which PETROFINA shares may be transferred
in the meantime and for which it acts as a guarantor (hereinafter
referred to as "ELECTRABEL"),
5. AG 1824, COMPAGNIE BELGE D'ASSURANCES GENERALES, a corporation under
Belgian law with stated capital of BEF 2,708,177,981 and registered
office in B-1000 XXXXXXXX, 00, Xxxxxxxxx Xxxxx Xxxxxxxx, registered in
the Commercial Register of Brussels under No. 345,622, represented by
Xx. Xxxxxxx Xxxxxxx and Xx. Xxxxxx Xxxxxxxx, duly authorized for the
purpose of these presents, and any other companies among its group to
which PETROFINA shares may be transferred in the meantime and for which
it acts as a guarantor (hereinafter referred to as "AG 1824"),
(hereinafter collectively referred to as the "COMPANIES"),
PARTY OF THE FIRST PART
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AND
TOTAL, a corporation under French law with stated capital of FFR 12,216,658,800
and registered office in France, in PUTEAUX (Hauts-de-Seine), 24, Cours
Michelet, registered in the Commercial and Company Register under No.
542,051,180, represented by Xx. Xxxxxxx XXXXXXXXX acting in his capacity of
Chairman of the Board of Directors and duly authorized for the purpose of these
presents (hereinafter referred to as "TOTAL"),
PARTY OF THE SECOND PART
(the Companies and TOTAL are hereinafter collectively
referred to as the "PARTIES"),
WHEREAS:
1. The Companies are shareholders of PETROFINA, a corporation under
Belgian law with stated capital of BEF 43,605,279,966 divided into
23,459,772 shares without par value, to which could be added 511,255
shares that might be created by the exercise of various warrants issued
by PETROFINA, admitted to the official listing of the Brussels Stock
Exchange and other financial stock exchanges, with registered office in
B-1040 XXXXXXXX, 00, rue de l'Industrie, registered in the Commercial
Register of Brussels under No. 227,597 (hereinafter referred to as
"PETROFINA").
2. The number of PETROFINA shares held by the Companies on the date of
these presents is as follows:
5,304,018 shares held by ELECTRAFINA;
1,518,218 shares held by FIBELPAR;
1,275,772 shares held by TRACTEBEL;
1,241,000 shares held by ELECTRABEL;
275,182 shares held by AG 1824;
i.e., a total of 9,614,190 PETROFINA shares (hereinafter collectively
referred to as the "SHARES").
3. The Parties have sought a mutual rapprochement in order to implement
industrial synergies between TOTAL and PETROFINA. For this purpose,
TOTAL will acquire the Shares held by the Companies. This acquisition
will take the form of contributions in kind, subject to French law, and
will be compensated by new shares of TOTAL ("NEW TOTAL SHARES") under
the terms and conditions described below, whereby the Companies will
become shareholders of TOTAL as a result of these contributions.
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As soon as the contributions, which are the subject of the
Contribution Agreement, have been made, TOTAL will file a notice of a
public exchange offer ("OPE") for the entirety of the shares and, if
necessary, PETROFINA securities equivalent thereto within the meaning
of Article 1, ss. 3 of the Royal Decree of November 8, 1989, which are
not owned by the Companies, under the same terms as those offered to
the Companies.
These operations fall within the scope of an industrial combination
between TOTAL and PETROFINA and the purpose of this Memorandum is to
clarify this scope.
NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:
TITLE I - IMPLEMENTATION OF COMBINATION TRANSACTIONS
ARTICLE 1. SIGNATURE OF AGREEMENT BETWEEN THE PARTIES FOR CONTRIBUTIONS
IN KIND
1.1 To implement the first stage of the industrial combination described
above, the parties are signing today the Contribution Agreement
attached as Exhibit 1 (hereinafter referred to as "CONTRIBUTION
AGREEMENT").
1.2 The Board of Directors of TOTAL called a Combined General Meeting of
its shareholders November 30, 1998, notably to approve the contribution
transaction by the Companies and the corresponding increase in TOTAL's
capital under the terms of the notice of meeting, which is attached to
these presents as Exhibit 2. The Board of Directors furthermore decided
the launching of the OPE and has delegated the necessary powers to its
Chairman to implement it.
1.3 The report by the Board of Directors of TOTAL to the General Meeting of
its shareholders, in which it recommends, in particular, the approval
described in Paragraph 1.2 above, is attached to these presents as
Exhibit 3.
1.4 The parties agree that in the event that the General Meeting of the
shareholders of TOTAL should fail to approve by February 17, 1999, the
contributions and the corresponding compensation set forth in the
Contribution Agreement, TOTAL shall pay to the Companies a
non-revisable sum of US$ 100,000,000, exclusive of any other sum
whatsoever, in consideration of the immobilization of the shares, which
are the subject of the Contribution Agreement. This sum is to be
distributed among them in proportion to the PETROFINA shares to be
contributed by each. This clause shall not be construed as a right to a
penalty for any of the parties.
ARTICLE 2. LAUNCHING OF AN OPE BY TOTAL FOR THE PETROFINA SHARES
2.1 As soon as the contributions, which are the subject of the Contribution
Agreement, have been made, TOTAL will file the notice and documents
with the Belgian Banking and Finance Commission, as specified in
Articles 4 and 5 of the Royal Decree of November 8, 1989, regarding
take-over bids and changes in the control of companies, required to
launch an OPE for the entirety of the shares forming the capital of
PETROFINA that are not owned by the Companies and, if required,
securities equivalent thereto within the meaning of
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Article 1, ss. 3 of the Royal Decree of November 8, 1989, that are not
owned by the Companies.
2.2 Within the context of the OPE, two (2) common PETROFINA shares
contributed to the OPE are planned to be exchanged for nine (9) new
common TOTAL shares with dividend rights as of January 1, 1998 (i.e.,
providing the right to all dividends paid for fiscal year 1998). TOTAL
shall have the right to the dividends paid for fiscal year 1998 by
PETROFINA, except for a unique interim dividend for fiscal year 1998 of
BEF 460 per share of PETROFINA to be decided by the Board of Directors
for the benefit of its shareholders, or any other equivalent formula
for the shareholders' benefit.
The terms of the OPE to be launched shall be the same as those for the
contributions made in accordance with the Contribution Agreement.
2.3 The opening of this OPE will be subject to the approval by the Belgian
Banking and Finance Commission and the competent European Authorities
under (EC) Council Regulation No. 4064/89 regarding control of
concentration operations between enterprises and by the competent
American authorities under the American Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act.
ARTICLE 3. FAILURE OF CONDITIONS PRECEDENT AND CONSULTATION AMONG THE PARTIES
The approvals by the competent European authorities under (EC) Council
Regulation No. 4064/89 regarding control of concentration operations between
enterprises and by the competent American authorities under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act must be obtained within a period of
3 months from the date when said authorities are notified of the operation.
TOTAL shall complete such notifications by December 18, 1998 at the latest. If
at the end of these 3 months, the concentration has not been authorized, the
commitments by the Companies shall remain in effect for an additional period of
one month. At the end of this one-month period, the commitments by the Companies
shall become null and void due to failure of the conditions precedent unless,
upon a good faith consultation, the Companies and TOTAL reach an agreement no
later than fifteen days prior to the expiration of this one-month period
regarding the deadline for obtaining the approval by said authorities. Assuming
such an agreement, the Companies' commitments will remain in full effect.
TITLE II - ORGANIZATION OF SYNERGIES BETWEEN TOTAL AND PETROFINA
ARTICLE 4. GENERAL POLICY OF THE NEW GROUP ESTABLISHED BY TOTAL AND PETROFINA
As soon as the contribution in kind has been completed and TOTAL has obtained
control of PETROFINA within the meaning of Belgian Accounting Law, the following
actions shall be taken:
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4.1 TOTAL shall implement a global development strategy that will profit
from the resources of PETROFINA and its group. To this end, TOTAL is
planning jointly to manage with PETROFINA their refining-distribution
assets in order to optimize the advantages of the two entities in
Europe. In particular, TOTAL shall ensure the continuation of the large
Belgian industrial sites of Anvers and Feluy and pursue the necessary
investments.
4.2 To better reflect the alliance between the two entities, TOTAL shall
propose to the first General Meeting of its shareholders following the
closing of the OPE to change the name "TOTAL" to a new name: "TOTAL
FINA".
4.3 PETROFINA shall remain an entirely separate legal structure with its
own corporate bodies and general management. The registered office of
PETROFINA shall remain in Brussels. Furthermore, the seats of the
operational general management of TOTAL FINA refining-distribution and
petrochemicals shall be located in Brussels. Xx. Xxxxxxxx XXXXXXXX
shall be appointed Member and Vice-Chairman of the Executive Committee
of TOTAL FINA.
4.4 The Board of Directors of PETROFINA shall be composed of 7 members
appointed by TOTAL and 5 members appointed by the ELECTRAFINA Group.The
Board of Directors of PETROFINA shall be chaired by Baron X. XXXXX. Two
Managing Directors shall be initially appointed: Xx. Xxxxxxxx XXXXXXXX
and Xx. Xxxx-Xxxx XXXXXXX.
4.5 With respect to labor issues, the planned combination will be the
subject of major consultation and will depend on the development
prospects of the new group. In particular, a joint policy of stock
ownership and stock options will be implemented for the employees of
TOTAL FINA following a study of the different systems currently in
place at the TOTAL and PETROFINA companies.
ARTICLE 5. TRANSFER
TOTAL shall not transfer the PETROFINA shares contributed by the Companies in
any form whatsoever for a period of two years from the date when such
contributions are made.
TITLE III - MISCELLANEOUS PROVISIONS
ARTICLE 6. CONFIDENTIALITY
Subject to the information to be provided in connection with the OPE
prospectus or Document E approved by the Commission of Stock Exchange Operations
(Commission des Operations de Bourse), the Parties shall keep the existence of
this Memorandum of Understanding as well as its terms and conditions strictly
confidential. Consequently, the Parties shall not disclose any information
pertaining thereto to anyone whatsoever without the prior written agreement by
the Parties, except as required by law or by the applicable regulations.
However, the Parties shall provide this document and any other documents showing
the value of the securities, which are the subject of the offer, to CBF if CBF
requires them to do so.
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ARTICLE 7. TERM
This Memorandum of Understanding, with respect to its Articles 4 and 6, is
entered into for a period of five (5) years from the date of signature of these
presents and may be renewed by tacit agreement for successive periods of one (1)
year, respectively.
Any party that does not intend to continue to be bound at the end of a period
in progress as set forth in this Article shall notify the other Parties of its
decision by registered mail with return receipt requested no later than three
(3) months before expiration of the period in progress.
ARTICLE 8. NOTIFICATION
Any notification or communication that may become necessary in the context of
this Memorandum of Understanding shall be sent by registered mail with return
receipt requested and shall become effective on the date of receipt, or on the
date of mailing if the text is previously sent by fax or telex. Said
notifications shall be mailed to the following addresses, unless changes are
made, which shall be notified as indicated above:
For ELECTRAFINA:
00, xxxxxx Xxxxxx
X 0000 XXXXXXXX
Attention: Xx. Xxxxxxx xx Xxxxxx
For FIBELPAR:
00, xxx xx xx Xxxxxxx Xxxxx
B 6280 LOVERVAL
Attention: Xx. Xxxxxx Xxxxx
For TRACTEBEL:
0, Xxxxx xx Xxxxx
X 0000 XXXXXXXX
Attention: Xx. Xxxxxxxx xxx Xxxxx
For ELECTRABEL:
0, xxxxxxxxx xx Xxxxxx
X 0000 XXXXXXXX
Attention: Xx. Xxxxx Xxxxxxx
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For AG 1824:
00 Xx. Xxxxx Xxxxxxxx
X 0000 XXXXXXXX
Attention: Xx. Xxxx-Xxxxx Xxxxxxx
For TOTAL:
Tour TOTAL
24 Cours Michelet
La Defense 10
92 069 PARIS La Defense Cedex
Attention: Xx. Xxxxxx Xxxxxxxxx
ARTICLE 9. APPLICABLE LAW
The present Memorandum of Understanding shall be subject to French law.
ARTICLE 10. DISPUTES
Any disputes that may arise between the Parties concerning the validity,
interpretation, or execution of this Memorandum of Understanding shall be
definitively settled pursuant to the Rules of Conciliation and Arbitration of
the International Chamber of Commerce by three arbiters appointed in accordance
with these Rules. The place of arbitration shall be in Paris and the language of
the proceedings shall be French. The court of arbitration will not be able to
rule on an amicable composition
ARTICLE 11. FINAL PROVISIONS
In the event that there are discrepancies between the provisions of this
Memorandum of Understanding and any of the provisions contained in its
Attachments, the provisions of the Memorandum of Understanding shall prevail.
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Done in Brussels
December 1, 1998
in 7 originals
ELECTRAFINA FIBELPAR
Represented by Represented by
[signatures] [signature]
Xx. Xxxxxxx xx Xxxxxx Xx. Xxxxxx Xxxxx
Xx. Xxxxxx Bellens
TRACTEBEL ELECTRABEL
Represented by Represented by
[signatures] [signatures]
Xx. Xxxxxxxx Xxxxxx Xx. Xxxx-Xxxxxx Xxxxxx
Xx. Xxxxxxx Xxxxxxx Xx. Xxxxxxxx xxx Xxxxx
AG1824 TOTAL
Represented by Represented by
[signatures] [signature]
Xx. Xxxxxxx Xxxxxxx Xx. Xxxxxxx Xxxxxxxxx
Xx. Xxxxxx Xxxxxxxx
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